RDM Corporation reports third quarter results

Toronto Stock Exchange Symbol: RC

WATERLOO, ON, July 30 /PRNewswire-FirstCall/ - RDM Corporation (TSX: RC), a
leading provider of solutions for the electronic commerce and payment
processing markets, today reported its financial results for the three month
period ended June 30, 2009.

Q3 2009 Highlights

- Total revenues were $5.9 million in the third quarter of fiscal 2009,
compared to $5.2 million in the third quarter of 2008.

- Payment Processing Services segment revenues, which are recurring in
nature, were $2.5 million in Q3 2009, compared to $1.7 million a year
earlier.

- Transaction volumes for RDM's Image & Transaction Management System
(ITMS(R)) averaged 3.8 million items per week during the third
quarter, compared to 2.8 million items per week a year earlier, and
3.6 million items per week during Q2 2009.

- ITMS(R) end user locations grew from 17,000 to 17,800 during the
third quarter and 13,300 at the end of the third quarter in 2008.

- RDM added one additional bank distributor and two new independent
sales organizations (ISOs) during the quarter.

- Gross profit was $2.5 million or 42% of revenues, compared to $1.8
million or 34% of revenues in the third quarter of 2008.

- Net earnings were $175,000 or $0.01 per share (fully diluted) in Q3
2009, compared to a net loss of $298,000 or $0.01 per share in Q3
2008.

- Cash and equivalents of $16.9 million at June 30, 2009 were unchanged
from the end of the prior quarter.

"While recent economic conditions have restricted growth opportunities in our
sector, we made continued progress in growing our recurring revenues from our
Payment Processing Services", said Douglas Newman, President and CEO of RDM
Corporation. "ITMS transaction volumes and end users have increased
sequentially and year over year and we continue to expand both our
distribution network and our product footprint. Our strong financial position
has enabled us to build on our competitive advantage through ongoing
investment in product leadership, which we believe maximizes our long-term
growth potential."

Financial Review

Operating Results by Segment
For the Three Months Ended June 30, 2009

Payment Electronic
(In thousands of Processing Digital Payment Quality
Canadian dollars) Services Imaging Solutions Assurance Total
------------------------------------------------------
Revenue $2,491 $2,948 $180 $322 $5,941
Gross profit $1,173 $1,032 $66 $235 $2,506
Gross profit
percentage 47% 35% 37% 73% 42%

Operating Results by Segment
For the Three Months Ended June 30, 2008

Payment Electronic
(In thousands of Processing Digital Payment Quality
Canadian dollars) Services Imaging Solutions Assurance Total
------------------------------------------------------
Revenue $1,680 $2,672 $554 $331 $5,237
Gross profit $467 $822 $249 $220 $1,758
Gross profit
percentage 28% 31% 45% 67% 34%

RDM generated total revenues of $5.9 million in the three months ended June
30, 2009, an increase of $0.7 million from the third quarter of fiscal 2008.
The strengthening of the U.S. dollar compared to last year's third quarter
resulted in a $0.8 million favourable impact on reported revenues.
Payment Processing Services segment revenues increased by $0.8 million or 48%
from a year earlier to $2.5 million, driven by growth in ITMS transaction
volumes and end users as well as the change in currency exchange rates.
Revenues in the Digital Imaging Products segment increased by $0.3 million to
$2.9 million, as a reduction in proprietary scanner shipments was offset by
the favourable impact of exchange rates and higher third party scanner
shipments. The Electronic Payments Solutions segment and the Quality Assurance
segment, which represented a combined 8% of total revenues in the third
quarter, generated revenues of $180,000 and $322,000, respectively, compared
to $554,000 and $331,000, respectively, in the third quarter of 2008.
Gross profit increased by $0.7 million to $2.5 million in the third quarter of
2009 from $1.8 million in the comparable period of fiscal 2008. Expressed as a
percentage of revenues, gross margin was 42%, compared to 34% in Q3 2008.
Increased margins were due to the favourable impact of exchange rates and a
change in product mix to include a higher proportion of payment processing
recurring revenue. Gross profit in the Payment Processing Services segment
grew to $1.2 million in the third quarter from $467,000 a year earlier. The
segment generated an operating loss of $233,000, compared to a loss of
$776,000 in Q3 2008. This improvement in operating earnings was realized even
as the Company invested an additional $162,000 in sales, marketing and
research and development efforts.
Sales and marketing expense decreased $36,000 to $1.2 million in Q3 2009, with
efforts focused primarily on the rapidly growing Payment Processing Services
segment, and in particular on signing new ITMS banks and ISO resellers and
promoting Simply Deposit(TM). Research and development expenses increased
$242,000 to $1.1 million as the Company continued to invest in new product
development including Simply Deposit Mobile(TM). Simply Deposit Mobile is a
downloadable remote deposit product application that will initially be
available for the iPhone and latest Blackberry handsets. General and
administration expenses decreased $51,000 to $533,000.
Net earnings were $175,000 in the third quarter of 2009, or $0.01 per share,
compared to a net loss of $298,000 or $0.01 per share a year earlier. In
addition to the factors noted above, earnings were affected by a foreign
exchange gain of $692,000 recognized in the quarter, compared to a gain of
$131,000 in Q3 2008. The foreign exchange gain was due to the impact of a
shift in exchange rates during the quarter on forward contracts held by the
Company as economic hedges, partially offset by a gain in U.S. denominated
monetary assets.
RDM repurchased 30,100 shares in the third quarter, including 12,600 shares
repurchased since the renewal of its Normal Course Issuer Bid on May 21, 2009.
At June 30, 2009, the Company had 20.8 million common shares outstanding.

Conference Call

RDM will be hosting a conference call to discuss the Company's third quarter
financial results on July 30, 2009 at 9:00 a.m. EDT. Dial-in numbers are
416-644-3422 or 1-800-587-1893. The call will be webcast live and archived at
www.rdmcorp.com. Detailed financial results and Management's Discussion and
Analysis will be filed on www.sedar.com.

About RDM Corporation

RDM Corporation is headquartered in Waterloo, Ontario and trades on the
Toronto Stock Exchange under the symbol RC. RDM is a leading provider of
specialized software and hardware products for electronic payment processing.
RDM has pioneered electronic check conversion systems and web based image and
transaction management services for banks, retailers, payment processors and
government agencies as well as print quality control and image quality systems
for a variety of global customers. For further information, visit RDM's
website at www.rdmcorp.com

This news release contains forward-looking statements. Forward-looking
statements are based on estimates and assumptions made by RDM in light of its
experience and its perception of historical trends, current conditions and
expected future developments, as well as other factors that RDM believes are
appropriate in the circumstances. Many factors could cause RDM's actual
results, performance or achievements to differ materially from those expressed
or implied by forward-looking statements. Risk factors relating to RDM are
discussed in the Risks and Uncertainties section of RDM's Annual Information
Form and year-end Management's Discussion and Analysis. These factors should
be considered carefully, and readers should not place undue reliance on RDM's
forward-looking statements. RDM has no intention and undertakes no obligation
to update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.

RDM CORPORATION
Consolidated Balance Sheets
(Amounts In Canadian Dollars, In Thousands)

-------------------------------------------------------------------------
June 30, September 30,
2009 2008
Unaudited Audited
-------------------------------------------------------------------------
Assets:

Current assets:
Cash and cash equivalents $ 16,939 $ 17,421
Accounts receivable 3,714 4,929
Inventories 4,167 6,325
Investment tax credit receivable 1,714 1,703
Other 951 1,087
-------------------------------------------------------------------------
Total current assets 27,485 31,465

Furniture and equipment 3,095 2,893
Intangible assets 318 278
-------------------------------------------------------------------------
Total assets $ 30,898 $ 34,636
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Liabilities and shareholders' equity:

Current liabilities:
Accounts payable and accrued liabilities $ 3,627 $ 4,945
Deferred revenue 609 631
-------------------------------------------------------------------------
Total current liabilities 4,236 5,576

Future income tax liability 138 201

Shareholders' equity:
Share capital 27,980 28,338
Contributed surplus 1,494 1,162
Retained earnings (deficit) (2,950) (641)
-------------------------------------------------------------------------
Total shareholders' equity 26,524 28,859
-------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 30,898 $ 34,636
-------------------------------------------------------------------------
-------------------------------------------------------------------------

RDM CORPORATION
Consolidated Statements of Operations and Deficit
(Amounts in Canadian Dollars, In Thousands, Except Per Share Amounts)

-------------------------------------------------------------------------
Three months ended Nine months ended
June June
2009 2008 2009 2008
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
-------------------------------------------------------------------------
Revenue $ 5,941 $ 5,237 $ 18,810 $ 19,131
Cost of revenue 3,435 3,479 10,776 12,180
-------------------------------------------------------------------------
Gross Profit 2,506 1,758 8,034 6,951
Operating expenses:
Sales and marketing 1,233 1,269 3,879 3,564
Research and development 1,130 888 3,295 2,846
General and
administration 533 584 1,449 1,471
Depreciation and
amortization 64 60 186 176
Stock-based compensation 75 126 332 383
Foreign exchange
loss (gain) (692) (131) 1,319 153
Interest Income (12) (181) (117) (512)
Gain on sale of long
term investment - (559) - (559)
-------------------------------------------------------------------------
2,331 2,056 10,343 7,522
-------------------------------------------------------------------------
Earnings (loss) before
income taxes 175 (298) (2,309) (571)
Future Income Tax expense
(recovery) - - - (5)
-------------------------------------------------------------------------
Net earnings (loss) and
comprehensive
earnings (loss) 175 (298) (2,309) (566)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Earnings (loss) per share
- basic and diluted $ .01 $ (.01) $ (.11) $ (.03)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

RDM CORPORATION
Statement of Shareholder's Equity
(Amounts in Canadian Dollars, In Thousands)

-------------------------------------------------------------------------
Share Contributed Retained Share Total
Capital Surplus earnings Purchase
(deficit) Loans
-------------------------------------------------------------------------
Balance as at
October 1,
2007 $ 27,978 $ 927 $ 401 $ (16) $ 29,290

Net earnings
(loss) and
comprehensive
earnings (loss) - - (566) - (566)
Stock-based
compensation - 383 - - 383
Repayment of
share purchase
loans - - - 16 16
Issuance of
Capital 321 - - - 321
Repurchase of
Share Capital (20) - - - (20)
-------------------------------------------------------------------------
Balance as at
June 30, 2008 $ 28,279 $ 1,310 $ (165) $ (16) $ 29,424
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Balance as at
September 30,
2008 28,338 $ 1,162 $ (641) $ - $ 28,859

Net earnings
(loss) and
comprehensive
earnings (loss) - - (2,309) - (2,309)
Repurchase of
share capital (358) - - - (358)
Stock-based
compensation - 332 - - 332
-------------------------------------------------------------------------
Balance as at
June 30, 2009 $ 27,980 $ 1,494 $ (2,950) $ - $ 26,524
-------------------------------------------------------------------------
-------------------------------------------------------------------------

RDM CORPORATION
Consolidated Statements of Cash Flows
(Amounts in Canadian Dollars, In Thousands)

Three months ended Nine months ended
June June
2009 2008 2009 2008
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
-------------------------------------------------------------------------
Cash provided by (used
in):
Operations:
Net earnings (loss)
Items not
involving cash: $ 175 $ (298) $ (2,309) $ (566)
Amortization of
furniture and
equipment 262 235 711 580
Amortization of
intangible assets 13 11 36 30
Stock-based
compensation 75 126 332 383
Future income
taxes 10 - (64) (5)
Gain on sale of
long-term
investment - (559) - (559)
Change in non-cash
operating working
capital (238) (1,052) 2,159 121
-------------------------------------------------------------------------
Cash provided by (used
in) operations 297 (1,537) 865 (16)
Financing:
Issuance of share
capital; net of
issue costs - - - 321
Repayment of share
purchase loans - - - 16
-------------------------------------------------------------------------
Cash provided by
financing activities - - - 337
Investing:
Repurchase of
share capital (25) (20) (358) (20)
Cash proceeds on sale
of long-term
investment - 1,062 - 1,062
Purchase of furniture
and equipment (181) (232) (913) (1,600)
Additions to
intangible assets (16) (16) (76) (74)
-------------------------------------------------------------------------
Cash used in
investing
activities (222) 794 (1,347) (632)
Increase (decrease)
in cash and
cash equivalents 75 (743) (482) (311)
Cash and cash
equivalents,
beginning of period 16,864 17,850 17,421 17,418
-------------------------------------------------------------------------
Cash and cash
equivalents, end
of period $ 16,939 $ 17,107 $ 16,939 $ 17,107
-------------------------------------------------------------------------
-------------------------------------------------------------------------

SOURCE RDM Corporation

Douglas Newman, President and CEO, RDM Corporation, (519) 746-8483 ext. 340
phone, (519) 746-3317 fax, dnewman@rdmcorp.com; James Merwin, CFO, RDM
Corporation, (519) 746-8483 ext. 284 phone, (519) 746-3317 fax,
jmerwin@rdmcorp.com