International Datacasting Corporation Announces First Quarter Fiscal 2014 Results

Marketwired

OTTAWA, ONTARIO--(Marketwired - June 12, 2013) - International Datacasting Corporation ("IDC") (IDC.TO), a global leader in digital content distribution solutions for the world's premiere broadcasters, announced its financial results today for the first quarter ended April 30, 2013. All amounts in this release are in Canadian dollars unless otherwise stated.

Financial Highlights for the First Quarter:

(in thousands, except for gross margin (GM) and loss per share)              

    2013         2012      
Revenues (1):       GM         GM  
  Products $ 4,026   53 % $ 3,080   40 %
  Services   1,132   48 %   975   34 %
  Systems Project   209   24 %   5,636   20 %
Total revenues $ 5,367       $ 9,691      
   
Gross profit $ 2,710   50 % $ 2,684   28 %
Operating expenses $ 2,811       $ 2,885      
Adjusted EBITDA (2) $ 64       $ 159      
Net loss $ (102 )     $ (207 )    
Net loss per share $ (0.00 )     $ (0.00 )    

(1) The breakdow n of revenues is based on revised operating segments.

(2) Adjusted EBITDA is a non-GAAP financial measure. The reconciliation of Adjusted EBITDA to Net Loss is provided at the end of this release.

Total revenues for the first quarter of Fiscal 2014 were $5.4 million, a decrease of 45% or $4.3 million from the comparable prior period as a result of the completion of the first phase of the Direct-to-Home (DTH) Broadcasting project in Kenya with the Wananchi Group. Product revenues grew by 31% during the first quarter resulting in an improvement in gross margin to 50% vs 28% in Q1 FY'13.. The margin improvement was largely due to a change in business mix, driven by increased Products revenue at higher margins.

Operating Expenses were $2.8 million, a decrease from $2.9 million in the first quarter of the prior year. When excluding $0.2 million of restructuring charges included in the first quarter of prior year, operating expenses increased by 4% during the first quarter of Fiscal 2014. This was due mainly to the new product launch of the STAR Pro Audio™ Solution and LASER™ Targeted Ad Insertion Platform at the National Association of Broadcasters Show in April 2013, and due to fees associated with the recruitment of the new CEO and VP of Research and Development.

IDC earned a lower Adjusted EBITDA of $64 thousand during the current quarter due to higher operating expenses, compared to $159 thousand in the comparable prior period. IDC's consolidated balance sheet improved during the current quarter, with working capital ratio of 3.4 to 1 and liquid assets of $7.2 million at April 30, 2013.

"IDC is actively changing its business model to focus on selling higher-margin products which contribute significantly to our customer's business growth, and reducing our emphasis on one-time projects." said Doug Lowther, President and CEO of IDC. "This is a significant change and will take time to fully implement, however in the future we believe that this strategy will allow us to scale the business more effectively. We continue to see significant market interest in our STAR Pro Audio™ Solution, LASER™ Targeted Ad Insertion Platform, and Digital Tattoo™ DTH Over IP Gateway for multi-dwelling units."

For further information on IDC's first quarter results, refer to the unaudited interim condensed consolidated financial statements and Management's Discussion and Analysis that will be available on SEDAR (www.sedar.com) after the Toronto Stock Exchange closes on June 12, 2013.

Financial Summary and Conference Call

This announcement will be followed by a Management conference call at 8:30 a.m. ET on Thursday, June 13, 2013, to discuss the results, and to respond to questions from investors.

Mr. Doug Lowther, President and CEO of IDC, cordially invites all interested parties to participate in the conference call.

CONFERENCE CALL DETAILS:

CONFERENCE DATE:  Thursday June 13, 2013
 
CONFERENCE TIME:  8:30 a.m. ET
 
DIAL-IN NUMBERS:  613-233-1979 / 866-696-5910
 
PARTICIPANT CODE:  1045890

WEBCAST: A live audio webcast of the conference call will be available at the following link: http://www.gowebcasting.com/4364. This webcast will be archived here for 365 days. Please connect to the website at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be needed to access the webcast.

About International Datacasting Corporation:

International Datacasting Corporation (IDC.TO) is a global leader in digital content distribution for the world's premiere broadcasters in radio, television, data and digital cinema. IDC offers a broad portfolio of advanced solutions including the STAR Pro Audio™ Solution, LASER™ Targeted Ad Insertion Platform, and the Digital Tattoo™ DTH Over IP Gateway. IDC's products and solutions are in demand for radio and television networks, targeted ad insertion, digital cinema, 3D live events, satellite news gathering, sports contribution, VOD, and IPTV. IDC is headquartered in Ottawa, Canada, with regional offices in Arnhem, the Netherlands and in San Diego, California. The company has installations in over 100 countries and service offices in Thailand and Singapore, and an international network of value-added partners and resellers. For more information visit: www.datacast.com.

Forward-Looking Statements:

This press release contains certain information that may constitute "forward-looking information" and/or "forward-looking statements" within the meaning of applicable Canadian securities laws. All forward- looking information and forward-looking statements are necessarily based on a number of estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies. All statements other than statements which are reporting results as well as statements of historical fact are forward-looking statements that may involve a number of known and unknown risks, uncertainties and other factors; many of which are beyond the ability of IDC to control or predict.

Forward-looking statements are generally identifiable by use of the words "may", "will", "should", "continue", "expect", "anticipate", "estimate", "believe", "intend", "plan or "project" or the negative of these words or other variations on these words or comparable terminology. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Risks and uncertainties that might cause actual results to differ materially include, but are not limited to: competitive developments; risks associated with IDC's growth; expectations regarding new product initiatives and timing, including the STAR Pro Audio™ Solution, LASER™ Targeted Ad Insertion Platform and Digital Tattoo™ DTH Over IP Gateway; any difficulties with integrating acquired product lines into IDC's business and/or manufacturing procedures; any difficulties or disputes with IDC's subcontractors, contract manufacturers and suppliers; IDC's dependence on the development and growth of the satellite services market; a lengthy and variable sales cycle for IDC's products and services; IDC's reliance on a small number of customers for a large percentage of its revenue; expectations with respect to the sufficiency of its financial resources and liquidity; regulatory risks and intellectual property infringement.

More detailed information about potential factors that could affect IDC's financial and business results is included in the public documents IDC files from time to time with Canadian securities regulatory authorities and which are available on SEDAR at www.sedar.com, including, without limitation, IDC's MD & A for the year ended January 31, 2013, dated April 29, 2013.

Except as expressly required by applicable law, we undertake no obligation to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise. Forward- looking statements are provided to assist external stakeholders in understanding IDC's expectations as at the date of this release and may not be appropriate for other purposes. Readers are cautioned not to place undue reliance on such statements.

INTERNATIONAL DATACASTING CORPORATION 
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION 
AS AT APRIL 30, 2013 and JANUARY 31, 2013 
(Canadian dollars) 
  
  April 30, 2013  January 31, 2013 
ASSETS       
Current Assets       
 Cash$5,091,795  $4,943,025 
 Short-term investments 75,000   75,000 
 Available-for-sale investments 1,996,170   1,986,510 
 Accounts receivable 5,547,590   6,145,251 
 Inventories 2,631,386   2,449,121 
 Other assets 585,041   443,519 
Total Current Assets 15,926,982   16,042,426 
        
Non-Current Assets       
 Other assets 19,069   28,215 
 Capital assets 1,246,498   1,312,544 
 Deferred taxes 2,800,000   2,800,000 
Total Non-Current Assets 4,065,567   4,140,759 
        
TOTAL ASSETS$19,992,549  $20,183,185 
        
LIABILITIES AND SHAREHOLDERS' EQUITY       
Current Liabilities       
 Accounts payable$1,579,945  $1,842,762 
 Accrued liabilities 1,825,912   1,842,544 
 Customer deposits 98,862   363,936 
 Deferred revenue - current portion 664,333   433,480 
 Provisions 466,097   440,167 
 Current tax liability 5,842   19,326 
Total Current Liabilities 4,640,991   4,942,215 
        
Non-Current Liabilities       
 Deferred tax liability 23,063   23,063 
 Deferred revenue 21,479   55,277 
Total Non-Current Liabilities 44,542   78,340 
        
TOTAL LIABILITIES 4,685,533   5,020,555 
        
Shareholders' Equity       
 Capital stock 23,637,259   23,406,259 
 Contributed surplus 3,269,346   3,263,245 
 Accumulated other comprehensive loss (233,549)  (243,209)
 Accumulated deficit (11,366,040)  (11,263,665)
TOTAL SHAREHOLDERS' EQUITY 15,307,016   15,162,630 
        
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$19,992,549  $20,183,185 
  
  
  
INTERNATIONAL DATACASTING CORPORATION 
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS 
FOR THE THREE MONTHS ENDED APRIL 30, 2013 and 2012 
(Canadian dollars, except for share data) 
  
  Three months ended 
  April 30, 2013   April 30, 2012 
        
REVENUE$5,366,809  $9,691,101 
        
COST OF REVENUE 2,656,810   7,007,168 
        
GROSS PROFIT 2,709,999   2,683,933 
        
OPERATING EXPENSES       
Selling, general and administrative 1,789,714   1,717,082 
Research and development, net of investment tax credits 1,033,741   1,251,424 
Foreign exchange gain (12,239)  (83,525)
 Total operating expenses 2,811,216   2,884,981 
        
OPERATING LOSS BEFORE OTHER ITEMS (101,217)  (201,048)
        
Change in fair value of short-term investments -   (28,800)
        
Investment income 21,028   24,516 
        
Interest expense (1,182)  (1,102)
        
LOSS BEFORE INCOME TAXES (81,371)  (206,434)
        
Income tax expense:       
 Current (21,004)  (769)
 Deferred -   - 
        
NET LOSS$(102,375) $(207,203)
        
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAXES       
Change in fair value of available-for-sale investments 9,660   - 
        
 Total other comprehensive income (loss), net of taxes 9,660   - 
        
COMPREHENSIVE LOSS$(92,715) $(207,203)
        
        
NET LOSS PER SHARE       
 Basic$(0.00) $(0.00)
 Diluted$(0.00) $(0.00)
        
 Weighted average number of shares outstanding - basic 57,705,990   58,384,490 
 Weighted average number of shares outstanding - diluted 57,705,990   58,384,490 
  
  
  
INTERNATIONAL DATACASTING CORPORATION 
CONSOLIDATED STATEMENTS OF CASH FLOWS 
FOR THE THREE MONTHS ENDED APRIL 30, 2013 and APRIL 30, 2012 
(Canadian dollars) 
  
  Three months ended (unaudited) 
  April 30, 2013   April 30, 2012 
        
OPERATING ACTIVITIES       
Net loss$(102,375) $(207,203)
Add items not requiring an outlay of cash:       
 Depreciation and amortization 165,175   137,698 
 Realized loss on sale of short-term investment -   28,800 
 Unrealized gains on derivatives 26,619   (108,172)
 Stock-based compensation 6,101   7,396 
  95,520   (141,481)
Net change in non-cash working capital:       
 Accounts receivable 597,661   (172,238)
 Inventories (182,265)  599,649 
 Other assets (158,995)  217,711 
 Accounts payable and accrued liabilities (276,450)  (51,402)
 Customer deposits (265,074)  (484,425)
 Deferred revenue 197,055   (72,842)
 Provisions 25,930   107,320 
 Current tax liability (13,484)  - 
        
Net cash provided by operating activities 19,898   2,292 
        
INVESTING ACTIVITIES       
Purchase of capital assets (99,129)  (67,894)
Net cash applied to investing activities (99,129)  (67,894)
        
FINANCING ACTIVITIES       
Repayments of obligations under capital leases (2,999)  (9,300)
Issue of common shares, net of issue costs 231,000   4,480 
Repurchase of common shares, net of costs -   (16,017)
Net cash provided by (applied to) financing activities 228,001   (20,837)
        
Net increase (decrease) in cash during the year 148,770   (86,439)
        
CASH - Beginning of period 4,943,025   4,914,766 
        
CASH - End of period$5,091,795  $4,828,327 
  
  
  
INTERNATIONAL DATACASTING CORPORATION 
Non-GAAP Financial Measure Reconciliation 
Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) 
For the three months ended April 30, 2013 and 2012 
(Canadian dollars) 
  
  Three months ended 
  April 30, 2013   April 30, 2012 
        
Net loss reported under IFRS$(102,375) $(207,203)
 Add back:       
  Depreciation expense 165,175   137,698 
  Restructuring expense -   222,029 
  Interest expense 1,182   1,102 
  Income tax expense 21,004   769 
 Subtract (add):       
  Net investment income (loss) 21,028   (4,284)
        
Adjusted EBITDA$63,958  $158,679 
Contact:
Rick Clements
Chief Financial Officer
International Datacasting Corporation
613-596-4120
rclements@datacast.com
www.datacast.com

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