OTTAWA, ONTARIO--(Marketwired - Mar 10, 2014) - International Datacasting Corporation (IDC.TO) ("IDC" or the "Company") today released an update on the Company's action plan and recent progress against that plan.
IDC has conducted a comprehensive review of the Company's cost structure. As a result, a first phase of cost reductions was implemented in late 2013. Following the recent announcement regarding the Canadian Forces Radio & Television (CFRT) contract, an additional phase of cost reduction has been initiated. In total, the two phases will achieve the following in Fiscal 2015:
- Manufacturing, supply chain, and logistics will be consolidated in Ottawa, resulting in more efficient and lower cost global operations;
- Management overheads will be reduced, and IDC's structure simplified. In addition to reducing cost, this is expected to reduce complexity and speed decision making;
- External costs such as marketing, consultancy, travel, and outsourced services will be substantially reduced;
- Approximately 30% of IDC's workforce, including all executives, will reduce their cash compensation in exchange for equity during Fiscal 2015;
IDC's board is working with management to provide feedback and support on key operational and financial aspects of the business. In addition, the board has reassessed IDC's three-year business plan in light of the changes and reviewed alternatives to maximize shareholder return.
"Despite the reduction in revenue and cash flow from the decision to discontinue the CFRT service, IDC has an existing and developing suite of products that provide a stable base from which we can operate", stated Chris Van Staveren, Chairman. "Management has been proactive in prudently reducing costs, while ensuring that the long-term future of the business remains attractive."
As previously announced, IDC expects progressive improvement in results during Fiscal 2015. The following results have been achieved early in the financial year:
- The LASER Two product is now in live service with a customer, and a second customer has completed evaluation of the product and placed a volume order during February;
- The STAR G2 product is now shipping in volume, and an order for more than 100 receivers by a Latin American customer is expected to be delivered during the first quarter;
- IDC's Digital Cinema pipeline continues to be robust, with increased shipments expected during the first half of Fiscal 2015 compared to the same period in Fiscal 2014.
IDC's President and CEO Doug Lowther stated, "IDC experienced an exceptionally challenging year in Fiscal 2014. The team has responded to these challenges by renewing our strategy, structure, and market positioning. While the plan includes an increased degree of risk following the CFRT decision, we continue to expect progressive improvement in IDC's results during Fiscal 2015. I would like to thank our customers, shareholders, and employees for their continued support and dedication to IDC".
The disclosure in this news release has been reviewed and approved by IDC's Board of Directors and is based on information available to the Company as of the date of this release.
Upcoming Shareholder Communications
IDC expects to announce preliminary Fiscal 2014 results prior to the end of March, and to publish complete Fiscal 2014 results and analysis prior to the end of April. A public conference call will be held following the release of the Company's complete Fiscal 2014 results to permit investors and analysts to ask questions of IDC's management.
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. The Company's products and solutions are in demand for radio and television networks, targeted ad insertion, digital cinema, 3D live events, satellite newsgathering, sports contribution, VOD, and IPTV. IDC is headquartered in Ottawa, Canada, with regional offices in Arnhem, the Netherlands and in San Diego, California. For more information visit: www.datacast.com.
This press release contains certain information that constitutes "forward-looking information" and/or "forward-looking statements" within the meaning of applicable Canadian securities laws, including statements regarding management's beliefs with respect to results in Fiscal 2015, management's expectations with respect to the receipt of orders for the Company's products, the expected impact of the CFRT decision announced by IDC on February 5, 2014 and the Company's plans with respect to further shareholder communications. 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. The material assumptions used to develop the forward looking-statements made in this release include anticipated cost savings resulting from the initiatives taken by the Company under its action plan, management's perceptions of current conditions and expected future developments, expectations regarding future shipments of IDC products, management's knowledge of the current credit, interest rate and liquidity conditions affecting the Company as well as other considerations that are believed to be appropriate in the circumstances.
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. The Company considers the assumptions upon which the forward-looking statements contained in this release are based to be reasonable, based on information currently available to it, but 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. Risk factors that might cause actual results to differ materially include, but are not limited to: competitive developments; 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; 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; and expectations with respect to the sufficiency of its financial resources and liquidity. Further, any incorrect identification of, or failure or delay in identifying, areas that require attention in IDC's business as part of the Company's strategic review, or inability to successfully address areas requiring increased focus in accordance with IDC's action plan, could materially adversely affect the Company's business, financial conditions, and results of operations as well as other key indicators.
More detailed information about potential factors that could affect IDC's financial and business results and the material assumptions upon which the forward-looking statements are based is included in the public documents IDC files from time to time with Canadian securities regulatory authorities (including, without limitation, IDC's Fiscal 2013 MD&A dated April 29, 2013 and Q3 Fiscal 2014 MD&A dated December 10, 2013) and which are available on SEDAR at www.sedar.com.
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.