WATERLOO - RDM Corporation reported its financial results for the three and twelve-month periods ended September 30, 2009.

Fiscal 2009 Financial Highlights

- Total revenues were $24.5 million in fiscal 2009, a decrease of 8%
from $26.6 million in 2008.
- Payment Processing Services revenues generated by RDM's Image &
Transaction Management System (ITMS(R)) grew 64% to $9.9 million
compared to $6.0 million reported in 2008.
- The increase in Payment Processing Service revenues resulted in an
improvement in gross profit from $1.8 million to $4.4 million for the
segment.
- Overall gross profit was $10.4 million or 43% of revenues, compared
to $9.7 million or 36% of revenues in 2008.
- The loss before income taxes and the gain on the sale of the
Company's investment in Xign was $2.0 million in fiscal 2009,
compared to a loss of $1.6 million in fiscal 2008.
- Net loss was $2.0 million or $0.10 per share (fully diluted) in 2009,
compared to a loss of $1.0 million or $0.05 per share in the previous
year.
- Cash and equivalents were $15.7 million at September 30, 2009, a
decrease of $1.7 million from one year earlier.

Fiscal 2009 Operational Highlights

- ITMS transaction volumes averaged 3.7 million items per week during
the fourth quarter of 2009, compared to 3.12 million items per week
in Q4 2008, and 3.8 million items per week during Q3 2009.
- Nine new bank distributors were signed during the year, bringing the
total to 41 banks.
- ITMS end user locations increased from 14,900 to 17,800 during the
year.
- RDM shipped 22,081 proprietary scanners in 2009, compared to 39,623 a
year earlier.
- The Company released Simply Deposit Mobile(TM), a downloadable
application specifically designed for mobile customers and initially
available for the iPhone and latest BlackBerry.
- RDM entered into distribution agreements with 29 independent sales
organizations (ISOs) who are marketing RDC directly to end user
merchants, bringing the total to 53 ISOs.

"In a year where growth opportunities were limited by the economic environment, we achieved a meaningful increase in payment processing revenues and volumes. Our market research validates our view that a significant percentage of small businesses in the U.S. are still very interested in a remote deposit capture solution, but the vast majority have never been offered the service," said Douglas Newman, President and CEO of RDM Corporation. "We continue to believe the market opportunity is substantial, and are cautiously optimistic that momentum will return to the sector in 2010. We expect to be able to capitalize on the basis of our product leadership, distribution channels and financial strength."

Financial Review

Operating Results by Segment
For the Year Ended September 30, 2009

Payment Digital Electronic
(In thousands of Processing Imaging Payment Quality
Canadian dollars) Services Products Solutions Assurance Total
--------------------------------------------------
Revenue $9,899 $11,780 $1,323 $1,518 $24,520
Gross profit $4,396 $4,336 $554 $1,131 $10,417
Gross profit percentage 44% 37% 42% 75% 42%

Operating Results by Segment
For the Year Ended September 30, 2008

Payment Digital Electronic
(In thousands of Processing Imaging Payment Quality
Canadian dollars) Services Products Solutions Assurance Total
--------------------------------------------------
Revenue $6,042 $16,129 $2,781 $1,670 $26,622
Gross profit $1,843 $5,074 $1,553 $1,179 $9,649
Gross profit percentage 31% 31% 56% 71% 36%

RDM generated total revenues of $24.5 million in the year ended September 30, 2009, a decrease of $2.1 million from the previous year. The decrease was due to lower scanner revenue, partially mitigated by increased payment processing revenue and by the effects of a stronger U.S. dollar.

Payment Processing Services segment revenues increased by $3.9 million or 64% from a year earlier to $9.9 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 decreased by $4.4 million to $11.8 million due to a reduction in scanner shipments attributable to general economic conditions. The Electronic Payments Solutions segment and the Quality Assurance segment, which represented a combined 12% of total revenues for the year, generated revenues of $1.3 million and $1.5 million, respectively, compared to $2.8 million and $1.7 million, respectively, in fiscal 2008.

Gross profit increased by $0.8 million to $10.4 million in fiscal 2009 from $9.7 million in fiscal 2008. Expressed as a percentage of revenues, gross margin was 42.5%, compared to 36.2% a year earlier. 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 $4.4 million in fiscal 2009 from $1.8 million a year earlier. The segment generated an operating loss of $1.3 million, compared to a loss of $2.8 million in fiscal 2008. This improvement in operating earnings would have been greater if the Company had not invested an additional $0.8 million in sales, marketing and research and development efforts.

Sales and marketing expense increased $251,000 to $5.1 million in fiscal 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 accelerating adoption for their customers. Research and development expenses increased $660,000 to $4.5 million as the Company continued to invest in new product development including Simply Deposit Mobile. General and administration expenses were relatively flat at $1.9 million.

Net loss was $2.0 million in fiscal 2009, or $0.10 per share, compared to a net loss of $1.0 million or $0.05 per share a year earlier. Fiscal 2008 results included a $559,000 gain on the sale of the Company's investment in Xign. The loss before income taxes and the gain on the sale of Xign was $2.0 million in fiscal 2009, compared to a loss of $1.6 million on the same basis in fiscal 2008.

RDM repurchased 478,700 shares during fiscal 2009 under its Normal Course Issuer Bids. At September 30, 2009, the Company had 20.8 million common shares outstanding.

Fourth Quarter Review

RDM recorded revenues of $5.7 million in the three month period ended September 30, 2009, down from $7.5 million in the fourth quarter of 2008. Gross margin was 42% in the quarter compared to 36% a year earlier. Operating expenses were $2.1 million, compared to $2.0 million in Q4 2008.

Net earnings were $286,000 or $0.01 per share in the fourth quarter of 2009, compared to a loss of $476,000 or $0.02 per share in the comparable period of last year. Fourth quarter 2009 earnings were positively impacted by the recognition of a $952,000 foreign exchange gain due to the impact of the strengthening of the Canadian dollar during the quarter, while Q4 2008 results included a $399,000 exchange loss.

Executive Change

RDM also announced that John Mamalakis, Vice President of Sales, will be leaving the Company after December 31, 2009.

"We will miss John's enthusiasm and on behalf of the Company, I would like to wish him well in his future endeavours," said Douglas Newman.