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International Datacasting Corporation Announces Fiscal 2015 Third Quarter Results

OTTAWA, ONTARIO — (Marketwired) — 12/10/14 — International Datacasting Corporation (“IDC”) (TSX: IDC), a global technology provider for the world–s premiere broadcasters, announced its financial results today for the nine months and third quarter ended October 31, 2014. All amounts in this release are in Canadian dollars unless otherwise stated.

Third Quarter Results

Revenues totaled $3.0 million for the third quarter of Fiscal 2015, 19% higher than the prior year–s third quarter. The increase was primarily due to a 79% improvement in product revenues, partially offset by a reduction in services revenues due to the non-renewal of the Canadian Forces Radio and Television service. The increase in product revenues was driven by video and data products, including large orders for digital cinema and data receivers as well as increasing shipments of the new TITAN 3 encoder. When comparing IDC–s third quarter product sales with the second quarter of Fiscal 2015, revenues increased sequentially by 20%, continuing a trend that has been in place for several quarters.

The total gross margin for the quarter improved to 40% from 33% for the comparable prior period, primarily due to an increased revenue base to cover fixed expenses.

Total operating expenses decreased by 27% compared to the third quarter of Fiscal 2014, and by 10% compared to the first nine months of Fiscal 2014. Fiscal 2015–s operating expenses include $0.4 million of restructuring costs. IDC incurred a net loss of $1.1 million in the third quarter of Fiscal 2015, compared to a loss of $2.3 million in Fiscal 2014.

At October 31, 2014, IDC–s working capital was $4.1 million, including $0.3 million in cash. In addition, IDC–s accounts receivable factoring facility remains mostly undrawn, with $0.9 million of additional capacity available.

Progress and Outlook

During the first nine months of Fiscal 2015, IDC made progress in executing our turnaround plan. Key accomplishments during this period included the following:

Doug Lowther, IDC–s President and CEO, stated, “While IDC has made significant progress over the last three quarters, we have not yet returned the company to profitability. This remains our top priority and we are focused on achieving sustainable revenue growth to return the company to profitability in the near term.”

For further information on IDC–s third quarter results, refer to the unaudited interim condensed consolidated financial statements and Management–s Discussion and Analysis that will be available on SEDAR () after the Toronto Stock Exchange closes on December 10, 2014.

Financial Summary and Conference Call

This announcement will be followed by a Management conference call at 8:30 a.m. ET on Thursday, December 11, 2014, 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.


WEBCAST: A live audio webcast of the conference call will be available at the following link: . 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 (TSX: IDC) is a global technology provider for the world–s premiere broadcasters in radio, television, data and digital cinema. 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. For more information visit: .

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 including, without limitation, management–s beliefs with respect to strategy, efficiencies, results and costs savings in Fiscal 2015, management–s expectations with respect to customer acceptance of, and the receipt of orders for, the company–s products, and management–s expectations with respect to the impact of new personnel and a restructured sales force. 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 IDC under its action plan, anticipated impact of senior personnel, consolidation of operations and restructuring of the sales force, 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 IDC 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”, “design”, “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 TITAN 3 Video Encoder; a lengthy and variable sales cycle for IDC–s products and services; 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. 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 is included in the public documents IDC files from time to time with Canadian securities regulatory authorities and which are available on SEDAR at , including, without limitation, IDC–s Annual Information Form and MD&A for the year ended January 31, 2014, each dated April 29, 2014, and our MD&A for the quarter ended October 31, 2014.

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.

In this release, IDC has presented Adjusted EBITDA, which is a “non-GAAP financial measure” and accordingly it is not an earnings measure recognized by IFRS and does not carry standard prescribed significance. Moreover, IDC–s method for calculating Adjusted EBITDA may differ from that used by other companies using the same designation. Accordingly, we caution readers that Adjusted EBITDA should not be substituted for determining net income (loss) as an indicator of operating results or as a substitution for cash flows from operating and investing activities.

We believe Adjusted EBITDA is a meaningful and useful financial metric to investors and analysts for measuring and predicting its operating performance by excluding interest expense and income, income taxes, depreciation and amortization as well as restructuring charges as noted in the above table.

Doug Lowther, President & CEO
International Datacasting Corporation
+1 613 596 4120 ext. 2211

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