OTTAWA, ONTARIO — (Marketwired) — 09/08/15 — International Datacasting Corporation (“IDC”) (TSX: IDC), a technology provider for the world–s premiere broadcasters, today announced its financial results for the second quarter of Fiscal 2016 ended July 31, 2015. All amounts in this release are in Canadian dollars unless otherwise stated.
Financial Highlights:
(in thousands, except for gross margin (GM) and net loss per share)
Second Quarter Results
Revenues in the second quarter of $1.7 million were below expectation, 36% lower than prior year–s second quarter. The decrease was driven by customers– hesitation in placing orders with IDC in light of the proposed asset sale of IDC–s broadcast products business to Pico Digital Inc. (the “Proposed Transaction”). As previously announced in June 2015, the Proposed Transaction was not approved by the shareholders and consequently it was terminated.
Gross profit was $251 thousand or 15% margin, including $0.7 million impairment charge for obsolete and slow-moving inventories mainly for legacy products within our video and audio lines. Excluding this non-cash impairment charge, gross profit was $0.9 million and margin was 54% for Q2 Fiscal 2016.
OPEX was $2.1 million for Q2 Fiscal 2016, a decrease of 20% compared to Q2 of Fiscal 2015 largely due to cost reduction initiatives undertaken during Fiscal 2015 and year-to-date in Fiscal 2016. The current quarter OPEX includes $249 thousand of transaction and termination costs.
Adjusted EBITDA loss was $0.9 million in the quarter, compared to a $1.2 million loss in the same year-ago quarter. The lower revenue base was insufficient to cover the Corporation–s operating costs.
At July 31, 2015, IDC–s working capital was $1.8 million, including $1.0 million in cash.
Progress Report
Following the termination of the Proposed Transaction, the Board evaluated the near-term business strategy for IDC. The following actions have taken place subsequently:
Since the end of Q2 of Fiscal 2016, we have made further progress:
Steeve Huin and Chris Barrett, IDC–s Co-CEOs, jointly stated, “As IDC moves on from the recent proposed acquisition phase, customer confidence is returning and we are seeing signs of increased sales volume and pipeline for both the third and fourth quarter of Fiscal 2016. This increased volume and the advanced state of some larger potential deals maintain our confidence in a stronger IDC going forward.”
“We continue to be disciplined and vigilant on cost controls and cash management. Based on the current positive sales momentum observed in recent weeks and current overall cost structure, we believe we can reach operating profitability and financial stability during the second half of Fiscal 2016,” stated Steve Archambault, EVP & CFO of IDC.
For further information on IDC–s second quarter Fiscal 2016 results, refer to the unaudited condensed consolidated financial statements and Management–s Discussion and Analysis that will be available on SEDAR () after the Toronto Stock Exchange closes on September 8, 2015.
CONFERENCE CALL
IDC will host a conference call tomorrow (September 9, 2015) to discuss these results. Chris Barrett and Steeve Huin (Co-CEOs) and Steve Archambault (EVP & CFO) will host the presentation starting at 8:30 a.m. Eastern time. A question and answer session will follow management–s presentation.
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. 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, results and costs savings in Fiscal 2016, management–s expectations with respect to IDC–s financial resources and liquidity over the next 12 months, management–s expectations with respect to the receipt of orders for the Corporation–s products and possible revenue to be generated from sales of the Corporation–s products, the ability of IDC to raise funds, and the ability to achieve profitability during the second half of Fiscal 2016. 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 the size of possible commercial transactions involving the Corporation–s products, expectations regarding future shipments of IDC products, anticipated cost savings resulting from the initiatives taken by the Corporation under its action plan, anticipated impact of senior personnel, management–s expectations with respect to the approach of the note holders to the repayment of the $0.9 million of secured notes issued in July 2015, management–s perceptions of current conditions and expected future developments, 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: that commercial transactions with respect to LASER MPS will not materialize or will not be concluded on terms that are favorable to IDC.
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, 2015, each dated April 29, 2015, and IDC–s MD&A for the three and six months periods ended July 31, 2015 and 2014 dated September 8, 2015.
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 (Loss), which is a “non-GAAP financial measure” and accordingly it is not an earnings measure recognized by IFRS and does have a standardized meaning prescribed under IFRS. IDC defines Adjusted EBITDA as net income (loss) excluding amounts for depreciation and amortization, finance costs, finance income, income tax recovery (expense) as well as unusual and/or non-recurring charges such as large inventory impairment charge, M&A transaction costs, restructuring costs, and significant termination costs.
Moreover, IDC–s method for calculating Adjusted EBITDA (Loss) may differ from that used by other companies using the same designation and is unlikely to be comparable to similar measures presented by other companies. Accordingly, we caution readers that Adjusted EBITDA (Loss) 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 (Loss) is a meaningful and useful supplemental financial metric to investors and analysts for measuring and predicting IDC–s operating performance.
Contacts:
International Datacasting Corporation
Steve Archambault
Executive VP and CFO
+1 613 596 4120 ext. 2296
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