OTTAWA, ONTARIO--(Marketwired - June 2, 2015) - International Datacasting Corporation ("IDC") (TSX:IDC), a technology provider for the world's premiere broadcasters, today announced its financial results for the first quarter of Fiscal 2016 ended April 30, 2015. All amounts in this release are in Canadian dollars unless otherwise stated.
Financial Highlights:
(in thousands, except for gross margin and net loss per share)
| First Quarter | |||||||||||
| 2015 | 2014 | ||||||||||
| Revenues: | GM | GM | |||||||||
| Products | $ | 2,633 | 61 | % | $ | 1,938 | 40 | % | |||
| Services | 382 | 79 | % | 892 | 49 | % | |||||
| Total revenues | $ | 3,015 | $ | 2,830 | |||||||
| Gross profit | $ | 1,918 | 64 | % | $ | 1,205 | 43 | % | |||
| Operating expenses | $ | 2,254 | $ | 2,768 | |||||||
| Adjusted EBITDA (Loss) (1) | $ | (28 | ) | $ | (1,206 | ) | |||||
| Net loss | $ | (351 | ) | $ | (1,566 | ) | |||||
| Net loss per share | $ | (0.01 | ) | $ | (0.03 | ) | |||||
(1) Adjusted EBITDA (Loss) is a non-GAAP financial measure. The reconciliation of Adjusted EBITDA (Loss) to Net Loss is provided at the end of this release.
First Quarter Results
Revenues totaled $3.0 million for the first quarter of Fiscal 2016, a 7% increase from the comparable prior period. Products revenue increased by 36% to $2.6 million, and was driven mainly by a large Digital Cinema deal with a European customer. This order represented approximately 50% of total Products revenue in the quarter. Services revenue decreased by 57% to $0.4 million due to the previously announced non-renewal of the Canadian Forces Radio and Television broadcast services contract.
Gross profit for the quarter increased to $1.9 million or 64% gross margin, compared to $1.2 million or 43% gross margin in the comparable prior period. The improved margin was driven mostly by the above-noted Digital Cinema revenue, in addition to increased software revenues compared with the prior period.
IDC's Adjusted EBITDA was approximately breakeven in the quarter, compared to a $1.2 million loss in the first quarter of Fiscal 2015. The significant improvement in operating results was driven by higher gross margins and lower operating expenses due to the cost reductions and restructuring initiatives undertaken during Fiscal 2015.
At April 30, 2015, IDC's working capital was $3.6 million, including $1.1 million in cash. Our cash position improved since January 31, 2015 as a result of closing the $1.2 million bridge financing with Pico Digital Inc. ("Pico Digital") in connection with the Asset Purchase Agreement signed on April 21, 2015 with Pico Digital (the "Agreement") for the sale of IDC's broadcast technology business and related assets.
Strategy Committee Update
As previously announced, IDC will hold an annual general and special meeting (the "Meeting") on June 12, 2015, for among other things, shareholder review and consideration of the sale of IDC's broadcast products business and its related assets to Pico Digital (the "Transaction").
As previously disclosed, the Agreement includes a number of holdbacks which affect the potential proceeds to shareholders. Based on the revenue reported for the first quarter of Fiscal 2016, no reduction to proceeds under the minimum revenue requirement is expected; under the agreement this could have led to a reduction of up to US$500,000.
IDC is also subject to a US$850,000 holdback linked to achievement of LASER MPS sales. IDC is continuing to pursue sales of its LASER targeted advertising platform; however, it is uncertain whether sufficient LASER MPS revenue will be achieved by July 31, 2015 to receive any portion of this holdback amount. IDC's current LASER pipeline includes multiple projects, some of which are large, and one of which could contribute in excess of $10 million in revenues over a 12-18 month period. IDC is one of multiple vendors competing for that project and while we believe that IDC is well positioned, there is no assurance that IDC will be successful in closing this or any other LASER contracts or that a decision by the potential customer will be reached in a timely manner.
As noted above, IDC's liquidity and working capital position has improved as a result of the Pico Digital bridge financing. If shareholders do not approve the Transaction and the Agreement is terminated by IDC or Pico Digital, the bridge financing facility and all accrued interest will become due and will have to be repaid to Pico Digital. Based on IDC's current position, there is no assurance that refinancing would be possible on acceptable terms or at all within the time period required.
The IDC Board of Directors encourages all shareholders to be present at the Meeting or be represented there if unable to attend. The Board of Directors continues to unanimously recommend that shareholders vote their shares in favor of the Transaction as well as in favor of the other matters requiring shareholder approval at the Meeting. More details are available in the Management Information Circular mailed to shareholders in connection with the Meeting and filed on SEDAR at www.sedar.com.
For further information on IDC's first quarter Fiscal 2016 results, refer to the unaudited 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 2, 2015.
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: 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 including, without limitation, statements with respect to commercial agreements related to LASER MPS and possible revenue to be generated from sales of LASER MPS, the proposed Transaction, the ability of IDC to raise funds, and the matters to be approved at the Meeting. 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 LASER MPS, ability of IDC to consummate the proposed Transaction, the compliance of Pico Digital with the terms of the Agreement, 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: the possibility that Pico Digital will not agree with our quarterly revenue for the first quarter of Fiscal 2016, that commercial transactions with respect to LASER MPS will not materialize or will not be concluded on terms that are favorable to IDC, the amount of LASER MPS revenue expected to be realized by IDC as of July 31, 2015, the termination of the Agreement by Pico Digital if IDC suffers a material adverse effect prior to the completion of the acquisition and the satisfaction or waiver of certain other conditions contemplated by the Agreement, and the possibility that certain assumptions with respect to the proposed Transaction could prove to be inaccurate.
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 Annual Information Form and MD&A for the year ended January 31, 2015, each dated April 29, 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.
| INTERNATIONAL DATACASTING CORPORATION | ||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION | ||||||||
| As at April 30, 2015 and January 31, 2015 | ||||||||
| (Canadian dollars) | ||||||||
| April 30, 2015 | January 31, 2015 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | 1,108,641 | $ | 615,403 | ||||
| Restricted short-term investments | 80,000 | 80,000 | ||||||
| Accounts receivable | 2,551,906 | 1,464,828 | ||||||
| Inventories | 3,316,217 | 3,603,125 | ||||||
| Other assets | 135,168 | 176,336 | ||||||
| Total Current Assets | 7,191,932 | 5,939,692 | ||||||
| Non-Current Assets | ||||||||
| Capital assets | 481,904 | 541,794 | ||||||
| Total Non-Current Assets | 481,904 | 541,794 | ||||||
| TOTAL ASSETS | $ | 7,673,836 | $ | 6,481,486 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | 742,993 | $ | 838,531 | ||||
| Secured borrowings | 1,206,400 | 144,406 | ||||||
| Accrued liabilities | 729,685 | 648,615 | ||||||
| Customer deposits | 209,052 | 50,712 | ||||||
| Deferred revenue - current portion | 589,119 | 275,483 | ||||||
| Provisions | 147,712 | 145,947 | ||||||
| Current tax liability | 14,786 | 10,450 | ||||||
| Total Current Liabilities | 3,639,747 | 2,114,144 | ||||||
| Non-Current Liabilities | ||||||||
| Deferred tax liability | 8,275 | 8,793 | ||||||
| Deferred revenue | 296,418 | 323,230 | ||||||
| Total Non-Current Liabilities | 304,693 | 332,023 | ||||||
| TOTAL LIABILITIES | 3,944,440 | 2,446,167 | ||||||
| Shareholders' Equity | ||||||||
| Capital stock | 24,241,037 | 24,131,627 | ||||||
| Contributed surplus | 3,837,108 | 3,901,345 | ||||||
| Accumulated other comprehensive loss | (229,729 | ) | (229,729 | ) | ||||
| Accumulated deficit | (24,119,020 | ) | (23,767,924 | ) | ||||
| TOTAL SHAREHOLDERS' EQUITY | 3,729,396 | 4,035,319 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 7,673,836 | $ | 6,481,486 | ||||
| INTERNATIONAL DATACASTING CORPORATION | ||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||||||||
| FOR THE THREE MONTHS ENDED APRIL 30, 2015 and 2014 | ||||||||
| (Canadian dollars, except for share data) | ||||||||
| 2015 | 2014 | |||||||
| REVENUE | ||||||||
| Products | $ | 2,633,262 | $ | 1,937,937 | ||||
| Services | 382,127 | 891,825 | ||||||
| Total revenue | 3,015,389 | 2,829,762 | ||||||
| COST OF REVENUE | 1,097,685 | 1,625,198 | ||||||
| GROSS PROFIT | 1,917,704 | 1,204,564 | ||||||
| OPERATING EXPENSES | ||||||||
| Selling, general and administrative | 1,361,073 | 1,160,119 | ||||||
| Research and development, net of investment tax credits | 849,450 | 1,270,008 | ||||||
| Restructuring charges | - | 318,650 | ||||||
| Foreign exchange loss | 43,867 | 18,789 | ||||||
| Total operating expenses | 2,254,390 | 2,767,566 | ||||||
| OPERATING LOSS BEFORE OTHER ITEMS | (336,686 | ) | (1,563,002 | ) | ||||
| Interest Income | - | 4,624 | ||||||
| Interest expense | (10,060 | ) | - | |||||
| LOSS BEFORE INCOME TAXES | (346,746 | ) | (1,558,378 | ) | ||||
| Income tax recovery (expense): | ||||||||
| Current | (4,868 | ) | (7,035 | ) | ||||
| Deferred | 518 | (718 | ) | |||||
| NET AND COMPREHENSIVE LOSS | $ | (351,096 | ) | $ | (1,566,131 | ) | ||
| NET LOSS PER SHARE | ||||||||
| Basic | $ | (0.01 | ) | $ | (0.03 | ) | ||
| Diluted | $ | (0.01 | ) | $ | (0.03 | ) | ||
| Weighted average number of shares outstanding - basic | 64,771,493 | 58,505,804 | ||||||
| Weighted average number of shares outstanding - diluted | 64,771,493 | 58,505,804 | ||||||
| INTERNATIONAL DATACASTING CORPORATION | ||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| FOR THE THREE MONTHS ENDED APRIL 30, 2015 and 2014 | ||||||||
| (Canadian dollars) | ||||||||
| 2015 | 2014 | |||||||
| OPERATING ACTIVITIES | ||||||||
| Net loss | $ | (351,096 | ) | $ | (1,566,131 | ) | ||
| Add items not requiring an outlay of cash: | ||||||||
| Depreciation of capital assets | 59,918 | 38,644 | ||||||
| Deferred tax adjustments | (518 | ) | 718 | |||||
| Unrealized loss on derivatives | - | (8,945 | ) | |||||
| Stock-based compensation | 52,340 | 82,417 | ||||||
| (239,356 | ) | (1,453,297 | ) | |||||
| Net change in non-cash working capital: | ||||||||
| Accounts receivable | (1,087,078 | ) | 600,975 | |||||
| Inventories | 286,908 | 394,179 | ||||||
| Other assets | 41,168 | 174,268 | ||||||
| Accounts payable and accrued liabilities | (14,496 | ) | (890,212 | ) | ||||
| Customer deposits | 158,340 | 5,627 | ||||||
| Deferred revenue | 286,824 | 357,970 | ||||||
| Provisions | 1,765 | 237,532 | ||||||
| Current tax liability | 4,336 | (2,014 | ) | |||||
| Net cash applied to operating activities | (561,589 | ) | (574,972 | ) | ||||
| INVESTING ACTIVITIES | ||||||||
| Redemption of short-term investment | - | 22,500 | ||||||
| Purchase of capital assets | - | (10,243 | ) | |||||
| Net cash provided by investing activities | - | 12,257 | ||||||
| FINANCING ACTIVITIES | ||||||||
| Advances from secured lenders | 1,293,070 | - | ||||||
| Repayments of secured borrowings | (231,076 | ) | - | |||||
| Payments made on vested RSU's | (7,167 | ) | - | |||||
| Net cash provided by financing activities | 1,054,827 | - | ||||||
| Net increase (decrease) in cash during the period | 493,238 | (562,715 | ) | |||||
| CASH AND CASH EQUIVALENTS - Beginning of period | 615,403 | 2,734,655 | ||||||
| CASH AND CASH EQUIVALENTS - End of period | $ | 1,108,641 | $ | 2,171,940 | ||||
| International Datacasting Corporation | |||||||||
| NON-GAAP FINANCIAL MEASURE RECONCILIATION | |||||||||
| ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION, AND AMORTIZATION | |||||||||
| FOR THE THREE MONTHS ENDED APRIL 30, 2015 and 2014 | |||||||||
| (Canadian dollars) | |||||||||
| 2015 | 2014 | ||||||||
| Net loss reported under IFRS (unaudited) | $ | (351,096 | ) | $ | (1,566,131 | ) | |||
| Add (subtract): | |||||||||
| Transaction costs | 248,679 | - | |||||||
| Depreciation expense | 59,918 | 38,814 | |||||||
| Interest expense | 10,060 | - | |||||||
| Income tax expense | 4,350 | 7,753 | |||||||
| Restructuring charges | - | 318,650 | |||||||
| Net investment income | - | (4,624 | ) | ||||||
| Adjusted EBITDA Loss | $ | (28,089 | ) | $ | (1,205,538 | ) | |||
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. 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 financial metric to investors and analysts for measuring and predicting our operating performance by excluding income taxes, depreciation and amortization as well as unusual and/or non-recurring charges as noted in the above table.
Contact Information:
Doug Lowther
+1 613 596 4120 ext. 2211
dlowther@datacast.com