OTTAWA, ONTARIO--(Marketwire - Dec. 11, 2012) - International Datacasting Corporation (TSX:IDC), a global leader in digital content distribution solutions for the world's premiere broadcasters, announced its financial results today for the three and nine month periods ended October 31, 2012. All figures are in Canadian dollars unless otherwise stated.
| Financial Highlights: | ||||||||||||
| (In millions except for Gross Margins, Net Earnings per share) | ||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||
| October 31, | October 31, | |||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||
| Revenue | $ | 7.1 | $ | 7.3 | $ | 23.1 | $ | 23.0 | ||||
| Gross Profit | $ | 3.1 | $ | 3.1 | $ | 8.7 | $ | 9.7 | ||||
| Gross Margins | 44 | % | 43 | % | 38 | % | 42 | % | ||||
| Operating Expenses | $ | 2.6 | $ | 3.4 | $ | 8.7 | $ | 10.4 | ||||
| Adjusted EBITDA (1) | $ | 0.8 | $ | 0.1 | $ | 1.4 | $ | 0.1 | ||||
| Net Earnings | $ | 0.6 | $ | (0.2 | ) | $ | - | $ | (0.6 | ) | ||
| Net Earnings per share | $ | 0.01 | $ | - | $ | - | $ | (0.01 | ) | |||
| (1) Adjusted earnings before income taxes, depreciation and amortization (" Adjusted EBITDA") is a non-GAAP financial measure. The reconciliation of Adjusted EBITDA to Net Income (Loss) is provided at the end of this release. |
For the third quarter of fiscal 2013, total revenue was $7.1 million, down 2% from $7.3 million in the prior year. IDC Systems revenue declined 54%, while IDC Products revenue increased by 24%.
This increase in revenues from the IDC Products segment was driven by higher sales for our SuperFlex™ and STAR Pro Audio product lines resulting from large contracts in France and in Thailand. The decline in revenues from the IDC Systems segment was largely due to the completion of the first phase roll-out of the Direct-to-Home (DTH) Broadcasting project in Kenya in the first quarter of fiscal 2013.
IDC generated positive adjusted EBITDA of $782,000 during the current quarter, up from $59,000 from the comparable prior period. This improvement in EBITDA was largely due to lower operating expenses including a 19% reduction in Selling, General and Administration and a 32% decrease in Research and Development costs.
"IDC is actively reviewing and revising our global sales and distribution strategy," stated Del Lippert, Interim CEO and Chairman of the Board. "For example, our new Digital Tattoo™ offering is a prime DTH and IPTV product that is very relevant to emerging markets such as Asia and Africa. By reallocating and expanding key resources to meet the needs of Master Distributors and OEM customers in these target regions, we believe that we can directly enhance our market position and in turn stimulate the growth that our shareholders expect from IDC."
"We are pleased with the progress made in Q3 FY2013. Delivering solid revenue and margins combined with reduced operating costs translated to a net profit in the quarter and break-even for the first nine months of the fiscal year 2013," stated Rick Clements, Chief Financial Officer, IDC.
Financial Summary & Conference Call
This announcement will be followed by a Management conference call at 8:30 a.m. ET on Wednesday, December 12, 2012, to discuss the results, and to respond to questions from investors.
Del Lippert, IDC's Interim CEO, invites all interested parties to participate in the conference call.
CONFERENCE CALL DETAILS:
| DATE: | Wednesday, December 12, 2012 |
| TIME: | 8:30 a.m. ET |
| DIAL-IN NUMBERS: | 613-233-1979 / 1-866-696-5910 |
| PARTICIPANT CODE: | 1746780 |
| INSTANT REPLAY: | 1-800-408-3053 |
| Passcode: 1689868 | |
| Available until December 13, 2012 10:00 a.m. ET | |
WEBCAST: A live audio webcast of the conference call will be available at the following link: http://www.gowebcasting.com/4021. 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
IDC 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 Pro Audio, Pro Video, Pro Cinema, and Pro Data for implementing broadcast content contribution and distribution applications. IDC's products and solutions are in demand for radio and television networks, digital cinema, 3D live events, ad insertion, satellite news gathering, sport contribution, ad insertion, and IPTV among others. IDC is headquartered in Ottawa, Canada, with regional offices in Arnhem, the Netherlands and in San Diego, California. IDC has installations in over 100 countries and service offices in Thailand and Singapore with an international network of value-added partners and distributors.
Forward-Looking Statements
This press release contains forward-looking statements reflecting the current Board and management's operating and strategic plans, next steps and vision for IDC; and IDC's objectives, estimates and expectations, including statements about expected revenue impacts. All of these forward-looking statements are subject to risks and uncertainties. IDC's actual results, performance, achievements and developments may differ materially from the results, performance, achievements or developments expressed or implied by such statements. Factors that might cause actual results to differ materially include, but are not limited to, IDC's ability to successfully recruit new Board members and identify, hire, integrate and/or retain senior personnel and other key employees, competitive developments; risks associated with IDC's growth and the development and implementation of the Company's strategies; 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 datacasting 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; regulatory risks and intellectual property infringement. IDC assumes no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof, except as expressly required by applicable law. Forward-looking statements are provided to assist external stakeholders in understanding the current Board and management'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. 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 dated April 30, 2012.
| International Datacasting Corporation |
| Unaudited Condensed Consolidated Statements of Financial Position |
| As at October 31, 2012 and January 31, 2012 |
| (Canadian dollars) |
| October 31, 2012 | January 31, 2012 | ||||||
| ASSETS | |||||||
| Current Assets | |||||||
| Cash | $ | 5,167,748 | $ | 4,914,766 | |||
| Short-term investments | 75,000 | 2,336,800 | |||||
| Available-for-sale investments | 1,996,170 | - | |||||
| Accounts receivable | 6,123,101 | 4,673,727 | |||||
| Inventories | 2,933,872 | 4,247,470 | |||||
| Other assets | 508,150 | 722,882 | |||||
| Total Current Assets | 16,804,041 | 16,895,645 | |||||
| Non-Current Assets | |||||||
| Other assets | 84,231 | 631,607 | |||||
| Capital assets | 1,576,953 | 1,852,739 | |||||
| Deferred taxes | 2,800,000 | 2,800,000 | |||||
| Total Non-Current Assets | 4,461,184 | 5,284,346 | |||||
| TOTAL ASSETS | $ | 21,265,225 | $ | 22,179,991 | |||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
| Current Liabilities | |||||||
| Accounts payable and accrued liabilities | $ | 3,515,581 | $ | 3,128,708 | |||
| Customer deposits | 246,772 | 755,761 | |||||
| Deferred revenue - current portion | 743,062 | 882,827 | |||||
| Provisions | 423,855 | 660,474 | |||||
| Obligations under capital leases - current portion | 11,887 | 36,714 | |||||
| Current tax liability | 17,537 | - | |||||
| Total Current Liabilities | 4,958,694 | 5,464,484 | |||||
| Non-Current Liabilities | |||||||
| Deferred tax liability | 26,283 | - | |||||
| Deferred revenue | 61,661 | - | |||||
| Obligations under capital leases | - | 3,002 | |||||
| Total Non-Current Liabilities | 87,944 | 3,002 | |||||
| TOTAL LIABILITIES | 5,046,638 | 5,467,486 | |||||
| Shareholders' Equity | |||||||
| Capital stock | 23,406,260 | 23,977,481 | |||||
| Contributed surplus | 3,263,245 | 3,212,923 | |||||
| Accumulated other comprehensive loss | (233,549 | ) | (229,729 | ) | |||
| Accumulated deficit | (10,217,369 | ) | (10,248,170 | ) | |||
| TOTAL SHAREHOLDERS' EQUITY | 16,218,587 | 16,712,505 | |||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 21,265,225 | $ | 22,179,991 | |||
| International Datacasting Corporation |
| Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) |
| For the periods ended October 31, 2012 and 2011 |
| (Canadian dollars, except for share data) |
| Three months ended | Nine months ended | ||||||||||||
| October 31, 2012 | October 31, 2011 | October 31, 2012 | October 31, 2011 | ||||||||||
| REVENUE | $ | 7,111,096 | $ | 7,254,171 | $ | 23,086,247 | $ | 22,989,576 | |||||
| COST OF REVENUE | 4,006,235 | 4,113,037 | 14,359,724 | 13,297,569 | |||||||||
| GROSS PROFIT | 3,104,861 | 3,141,134 | 8,726,523 | 9,692,007 | |||||||||
| OPERATING EXPENSES | |||||||||||||
| Selling, general and administrative | 1,628,968 | 2,003,991 | 5,595,347 | 6,029,205 | |||||||||
| Research and development, net of investment tax credits | 914,360 | 1,346,790 | 3,062,304 | 4,341,088 | |||||||||
| Foreign exchange loss | 8,967 | 17,428 | 2,273 | 11,305 | |||||||||
| Total operating expenses | 2,552,295 | 3,368,209 | 8,659,924 | 10,381,598 | |||||||||
| OPERATING INCOME (LOSS) BEFORE OTHER ITEMS | 552,566 | (227,075 | ) | 66,599 | (689,591 | ) | |||||||
| Realized gain (loss) on sale of short-term investments | - | - | (27,220 | ) | - | ||||||||
| Net interest income: | |||||||||||||
| Interest income | 2,614 | 12,222 | 47,589 | 25,498 | |||||||||
| Interest expense | (1,827 | ) | (1,474 | ) | (11,149 | ) | (5,799 | ) | |||||
| INCOME (LOSS) BEFORE INCOME TAXES | 553,353 | (216,327 | ) | 75,819 | (669,892 | ) | |||||||
| Income tax recovery (expense): | |||||||||||||
| Current | (10,782 | ) | 15,692 | (18,735 | ) | 46,694 | |||||||
| Deferred | - | - | (26,283 | ) | - | ||||||||
| NET INCOME (LOSS) | $ | 542,571 | $ | (200,635 | ) | $ | 30,801 | $ | (623,198 | ) | |||
| OTHER COMPREHENSIVE LOSS, NET OF TAXES | |||||||||||||
| Change in fair value of available-for-sale investments | (3,820 | ) | - | (3,820 | ) | - | |||||||
| Total other comprehensive loss, net of taxes | (3,820 | ) | - | (3,820 | ) | - | |||||||
| COMPREHENSIVE INCOME (LOSS) | $ | 538,751 | $ | (200,635 | ) | $ | 26,981 | $ | (623,198 | ) | |||
| NET EARNINGS (LOSS) PER SHARE | |||||||||||||
| Basic | $ | 0.01 | $ | (0.00 | ) | $ | 0.00 | $ | (0.01 | ) | |||
| Diluted | $ | 0.01 | $ | (0.00 | ) | $ | 0.00 | $ | (0.01 | ) | |||
| Weighted average number of shares outstanding - basic | 57,502,268 | 58,410,946 | 58,082,876 | 57,018,768 | |||||||||
| Weighted average number of shares outstanding - diluted | 57,506,101 | 58,410,946 | 58,089,327 | 57,018,768 | |||||||||
| International Datacasting Corporation |
| Unaudited Condensed Consolidated Statements of Cash Flows |
| For the periods ended October 31, 2012 and 2011 |
| (Canadian dollars) |
| Three months ended | Nine months ended | ||||||||||||
| October 31, 2012 | October 31, 2011 | October 31, 2012 | October 31, 2011 | ||||||||||
| OPERATING ACTIVITIES | |||||||||||||
| Net income (loss) | $ | 542,571 | $ | (200,635 | ) | $ | 30,801 | $ | (623,198 | ) | |||
| Add items not requiring an outlay of cash: | |||||||||||||
| Depreciation and amortization | 122,739 | 239,136 | 401,229 | 771,018 | |||||||||
| Deferred and current taxes | 17,537 | (15,508 | ) | 43,820 | (46,525 | ) | |||||||
| Realized loss on sale of short-term investment | - | - | 27,220 | - | |||||||||
| Realized and unrealized losses on derivatives | 111,727 | 30,299 | 125,296 | 181,562 | |||||||||
| Stock-based compensation | 21,452 | 20,705 | 42,744 | 127,198 | |||||||||
| 816,026 | 73,997 | 671,110 | 410,055 | ||||||||||
| Net change in non-cash working capital: | |||||||||||||
| Accounts receivable | (250,873 | ) | 1,483,787 | (1,449,374 | ) | 4,259,490 | |||||||
| Inventories | 547,296 | (458,735 | ) | 1,313,598 | (1,081,114 | ) | |||||||
| Other assets | 31,894 | (102,873 | ) | 116,428 | (185,048 | ) | |||||||
| Accounts payable and accrued liabilities | 3,790 | 112,940 | 355,257 | (1,578,166 | ) | ||||||||
| Customer deposits | (782,773 | ) | (245,760 | ) | (508,989 | ) | (1,094,020 | ) | |||||
| Deferred revenue | 252,902 | (200,077 | ) | (78,104 | ) | 231,658 | |||||||
| Provisions | (50,937 | ) | 26,370 | (236,619 | ) | (73,020 | ) | ||||||
| Net cash provided by operating activities | 567,325 | 689,649 | 183,307 | 889,835 | |||||||||
| INVESTING ACTIVITIES | |||||||||||||
| Purchase of capital assets | (13,291 | ) | (121,448 | ) | (125,443 | ) | (454,663 | ) | |||||
| Proceeds from redemption of short-term investment | 2,309,580 | - | 2,309,580 | - | |||||||||
| Purchase of short-term investment | - | - | (75,000 | ) | - | ||||||||
| Purchase of available-for-sale investments | (1,999,990 | ) | - | (1,999,990 | ) | - | |||||||
| Net cash provided by (applied to) investing activities | 296,299 | (121,448 | ) | 109,147 | (454,663 | ) | |||||||
| FINANCING ACTIVITIES | |||||||||||||
| Repayments of obligations under capital leases | (9,036 | ) | (13,780 | ) | (27,829 | ) | (42,079 | ) | |||||
| Issue of common shares, net of issue costs | - | 1,375 | 4,481 | 151,137 | |||||||||
| Repurchase of common shares, net of costs | - | - | (16,124 | ) | - | ||||||||
| Net cash provided by (applied to) financing activities | (9,036 | ) | (12,405 | ) | (39,472 | ) | 109,058 | ||||||
| Net increase in cash during the period | 854,588 | 555,796 | 252,982 | 544,230 | |||||||||
| CASH - Beginning of period | 4,313,160 | 6,691,058 | 4,914,766 | 6,702,624 | |||||||||
| CASH - End of period | $ | 5,167,748 | $ | 7,246,854 | $ | 5,167,748 | $ | 7,246,854 | |||||
| International Datacasting Corporation |
| Non-GAAP Financial Measure Reconciliation |
| Adjusted Earnings Before Income Taxes, Depreciation, and Amortization (EBITDA) |
| For the periods ended October 31, 2012 and 2011 |
| (Canadian dollars) |
| Three months ended | Nine months ended | ||||||||||
| October 31, 2012 | October 31, 2011 | October 31, 2012 | October 31, 2011 | ||||||||
| Net income (loss) | $ | 542,571 | $ | (200,635 | ) | $ | 30,801 | $ | (623,198 | ) | |
| Add back: | |||||||||||
| Shareholder dissent expense | 10,000 | - | 413,439 | - | |||||||
| Incremental external business acquisition expense | - | - | 213,940 | - | |||||||
| Depreciation and amortization expense | 122,739 | 239,136 | 401,229 | 771,018 | |||||||
| Restructuring expense | 96,377 | 35,851 | 287,665 | 35,851 | |||||||
| Income tax expense (recovery) | 10,782 | (15,692 | ) | 45,018 | (46,694 | ) | |||||
| Adjusted EBITDA | $ | 782,469 | $ | 58,660 | $ | 1,392,092 | $ | 136,977 | |||
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 income taxes, depreciation and amortization as well as unusual charges (shareholder dissent, and incremental external business acquisition costs), and restructuring.
Contact Information:
Christine Rozak
Director, Marketing and Communications
613-596-4120
crozak@datacast.com