OTTAWA, ONTARIO--(Marketwired - April 29, 2015) - International Datacasting Corporation ("IDC") (TSX:IDC), a technology provider for the world's premiere broadcasters, today provided an update regarding the Company's proposed asset sale as well as announcing financial results for the fourth quarter and full year Fiscal 2015.
In connection with the asset purchase agreement signed on April 21, 2015 (the "Agreement"), IDC has finalized the terms of a US$1.0 million bridge financing facility with Pico Digital. The US$1.0 million loan will provide IDC with working capital at a significantly reduced interest expense relative to the accounts receivable factoring facility that IDC had previously utilized. Pico Digital is a privately-owned San Diego-based company providing multimedia delivery solutions to customers in the broadcast, cable, satellite, and broadband markets, and previously announced its intent to acquire certain IDC assets.
As previously announced, the acquisition will include IDC's product portfolio, and customer and supplier relationships. Certain IDC assets, including intellectual property, are excluded from the acquisition. It is expected that the majority of IDC's employees will join Pico Digital following the closing of the acquisition, which is expected to occur prior to the end of June 2015.
A copy of the Agreement has been filed under IDC's profile on SEDAR at www.sedar.com. Completion of the sale is subject to receipt of required shareholder and any required regulatory approvals. A shareholder meeting is expected to be held in Ottawa, Ontario on June 12, 2015 for, among other things, shareholder review and consideration of the sale. The record date for receiving notice of and voting at the meeting is expected to be May 12, 2015. The notice of meeting, the management information circular and a form of proxy in connection with the Meeting are expected to be available under IDC's profile on SEDAR on May 13, 2015 and will be mailed to shareholders on or about May 21, 2015.
IDC also announced its financial results for the fourth quarter and fiscal year ended January 31, 2015.
Financial Highlights:
(in thousands, except for gross margin (GM) and loss per share)
| Fourth Quarter | Fiscal Year | |||||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||
| Revenues: | GM | GM | GM | GM | ||||||||||||||||||||
| Products | $ | 1,444 | 57 | % | $ | 2,257 | 18 | % | $ | 8,268 | 39 | % | $ | 11,348 | 41 | % | ||||||||
| Services | 415 | 66 | % | 1,291 | 52 | % | 2,046 | 49 | % | 4,954 | 50 | % | ||||||||||||
| Total revenues | $ | 1,859 | $ | 3,548 | $ | 10,314 | $ | 16,302 | ||||||||||||||||
| Gross profit | $ | 1,099 | 59 | % | $ | 1,080 | 31 | % | $ | 4,789 | 46 | % | $ | 6,833 | 42 | % | ||||||||
| Operating expenses | $ | 1,430 | $ | 3,669 | $ | 9,102 | $ | 12,206 | ||||||||||||||||
| Adjusted EBITDA (Loss)(1) | $ | (276 | ) | $ | (1,575 | ) | $ | (3,672 | ) | $ | (3,890 | ) | ||||||||||||
| Net loss | $ | (349 | ) | $ | (5,404 | ) | $ | (4,330 | ) | $ | (8,174 | ) | ||||||||||||
| Net loss per share | $ | (0.01 | ) | $ | (0.09 | ) | $ | (0.07 | ) | $ | (0.14 | ) | ||||||||||||
| (1) Adjusted EBITA (Loss) is a non-GAAP financial measure. The reconciliation of Ajusted EBITA (Loss) to Net Loss is provided at the end of this release. | ||||||||||||||||||||||||
Fourth Quarter Results
Total revenues were $1.9 million for the fourth quarter of Fiscal 2015, 48% lower than the prior year's fourth quarter. The decline was driven by IDC's inability to close certain sales orders that had been expected for the fourth quarter as well as by conservative purchasing behavior driven by customers' concern over the Company's financial stability.
IDC's adjusted EBITDA loss was $0.3 million in the quarter, an improvement of $1.3 million. The improvement was driven by high gross margins due to a significant amount of software revenue secured in the quarter, as well as by cost reduction initiatives implemented during Fiscal 2015.
Full Year Results
Total revenues were $10.3 million for Fiscal 2015, a 37% decrease from the prior year. This decrease was driven by lower revenues from both Products and Services. The decrease in Products revenue was driven by the lack of large orders, coupled with conservative purchasing behavior due to customer concerns over IDC's financial stability. The decrease in Services revenue was mainly due to the non-renewal of the Canadian Forces Radio and Television broadcasting contract, which ended on March 31, 2014.
Operating expenses declined 25% to $9.1 million in Fiscal 2015 compared to the prior year. The reduction was a direct result of cost reduction and restructuring initiatives undertaken during Fiscal 2015 to right-size IDC's operations in line with a lower revenue base. Excluding restructuring charges, total operating expenses would have declined by 29%.
Doug Lowther, IDC's President and CEO, stated, "Fiscal 2015 was another difficult year for IDC. We substantially reduced our cost structure and renewed IDC's product portfolio. However, product revenues have not developed as expected during Fiscal 2015 and consequently IDC has not been able to achieve our previously stated guidance to return to operating profitability."
Chris Van Staveren, IDC's Chairman, added, "Following a full review of IDC's performance and prospects, the strategy committee proposed and the board of directors unanimously recommended to shareholders that IDC sell its product portfolio, customer and supplier relationships to Pico Digital. We believe that this transaction is of benefit to IDC's shareholders, customers, and employees relative to currently available alternatives, including continuing operation as a standalone company."
For further information on IDC's fourth quarter and full year Fiscal 2015 results, refer to the audited 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 April 29, 2015.
Mr. Chris Van Staveren, Chairman of the Board, and Mr. Doug Lowther, President and CEO of IDC, cordially invite all interested parties to participate in a conference call to discuss the results and to respond to questions from Shareholders about matters related to the upcoming Meeting:
| CONFERENCE CALL DETAILS | |
| CONFERENCE DATE: | Friday, May 15, 2015 |
| CONFERENCE TIME: | 10:00 a.m. ET |
| DIAL-IN NUMBERS: | 416-340-2217 / 888-789-9572 |
| PARTICIPANT CODE: | 2601438 |
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, 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 the proposed acquisition, the employment by Pico Digital of former employees of IDC, the timing and completion of the sale of assets of IDC, the preparation and mailing of the management information circular and other Meeting materials, the record date for the Meeting, the matters to be approved at the shareholder meeting of IDC, and the timing and holding of 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 ability of IDC to consummate the proposed acquisition, the compliance of Pico Digital with the terms of the Agreement, the ability of IDC to prepare and deliver Meeting materials to shareholders within the expected timeframe, 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 certain assumptions with respect to the proposed transaction could prove to be inaccurate, that required shareholder approval is not obtained, 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.
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 | ||||||
| CONSOLIDATED STATEMENTS OF FINANCIAL POSITION | ||||||
| As at January 31, 2015 and 2014 | ||||||
| (Canadian dollars) | ||||||
| 2015 | 2014 | |||||
| ASSETS | ||||||
| Current Assets | ||||||
| Cash | $ | 615,403 | $ | 2,734,655 | ||
| Restricted short-term investments | 80,000 | 72,500 | ||||
| Accounts receivable | 1,464,828 | 3,289,596 | ||||
| Inventories | 3,603,125 | 3,793,347 | ||||
| Other assets | 176,336 | 438,268 | ||||
| Total Current Assets | 5,939,692 | 10,328,366 | ||||
| Non-Current Assets | ||||||
| Capital assets | 541,794 | 536,057 | ||||
| Total Non-Current Assets | 541,794 | 536,057 | ||||
| TOTAL ASSETS | $ | 6,481,486 | $ | 10,864,423 | ||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
| Current Liabilities | ||||||
| Accounts payable | $ | 838,531 | $ | 1,159,025 | ||
| Secured borrowings | 144,406 | - | ||||
| Accrued liabilities | 648,615 | 1,545,234 | ||||
| Customer deposits | 50,712 | 30,654 | ||||
| Deferred revenue - current portion | 275,483 | 349,870 | ||||
| Provisions | 145,947 | 254,575 | ||||
| Current tax liability | 10,450 | 9,496 | ||||
| Total Current Liabilities | 2,114,144 | 3,348,854 | ||||
| Non-Current Liabilities | ||||||
| Deferred tax liability | 8,793 | 14,551 | ||||
| Deferred revenue | 323,230 | 129,568 | ||||
| Total Non-Current Liabilities | 332,023 | 144,119 | ||||
| TOTAL LIABILITIES | 2,446,167 | 3,492,973 | ||||
| Shareholders' Equity | ||||||
| Capital stock | 24,131,627 | 23,637,259 | ||||
| Contributed surplus | 3,901,345 | 3,401,345 | ||||
| Accumulated other comprehensive loss | (229,729) | (229,729) | ||||
| Accumulated deficit | (23,767,924) | (19,437,425) | ||||
| TOTAL SHAREHOLDERS' EQUITY | 4,035,319 | 7,371,450 | ||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 6,481,486 | $ | 10,864,423 | ||
| INTERNATIONAL DATACASTING CORPORATION | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||||||||||||||||
| FOR THE PERIODS ENDED JANUARY 31, 2015 and 2014 | ||||||||||||||||
| (Canadian dollars, except for share data) | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| January 31, 2015 | January 31, 2014 | January 31, 2015 | January 31, 2014 | |||||||||||||
| REVENUE | ||||||||||||||||
| Products | $ | 1,444,116 | $ | 2,257,280 | $ | 8,267,993 | $ | 11,347,914 | ||||||||
| Services | 415,087 | 1,290,680 | 2,046,344 | 4,953,767 | ||||||||||||
| Total revenue | 1,859,203 | 3,547,960 | 10,314,337 | 16,301,681 | ||||||||||||
| COST OF REVENUE | 759,817 | 2,467,808 | 5,525,534 | 9,469,094 | ||||||||||||
| GROSS PROFIT | 1,099,386 | 1,080,152 | 4,788,803 | 6,832,587 | ||||||||||||
| OPERATING EXPENSES | ||||||||||||||||
| Selling, general and administrative | 775,522 | 2,243,538 | 4,716,419 | 7,487,209 | ||||||||||||
| Research and development, net of investment tax credits | 701,625 | 1,263,870 | 3,980,040 | 4,587,514 | ||||||||||||
| Restructuring charges | - | - | 441,559 | - | ||||||||||||
| Foreign exchange loss (gain) | (47,339 | ) | 161,508 | (35,598 | ) | 130,781 | ||||||||||
| Total operating expenses | 1,429,808 | 3,668,916 | 9,102,420 | 12,205,504 | ||||||||||||
| OPERATING LOSS BEFORE OTHER ITEMS | (330,422 | ) | (2,588,764 | ) | (4,313,617 | ) | (5,372,917 | ) | ||||||||
| Realized loss on sale of investments | - | - | - | (25,344 | ) | |||||||||||
| Interest Income | 564 | 8,822 | 11,505 | 54,871 | ||||||||||||
| Interest expense | (24,253 | ) | - | (25,977 | ) | (1,182 | ) | |||||||||
| LOSS BEFORE INCOME TAXES | (354,111 | ) | (2,579,942 | ) | (4,328,089 | ) | (5,344,572 | ) | ||||||||
| Income tax recovery (expense): | ||||||||||||||||
| Current | (841 | ) | (21,275 | ) | (8,168 | ) | (37,700 | ) | ||||||||
| Deferred | 6,294 | (2,802,314 | ) | 5,758 | (2,791,488 | ) | ||||||||||
| NET AND COMPREHENSIVE LOSS | $ | (348,658 | ) | $ | (5,403,531 | ) | $ | (4,330,499 | ) | $ | (8,173,760 | ) | ||||
| NET LOSS PER SHARE | ||||||||||||||||
| Basic | $ | (0.01 | ) | $ | (0.09 | ) | $ | (0.07 | ) | $ | (0.14 | ) | ||||
| Diluted | $ | (0.01 | ) | $ | (0.09 | ) | $ | (0.07 | ) | $ | (0.14 | ) | ||||
| Weighted average number of shares outstanding - basic | 62,787,777 | 58,484,642 | 60,690,473 | 58,294,779 | ||||||||||||
| Weighted average number of shares outstanding - diluted | 62,787,777 | 58,484,642 | 60,690,473 | 58,294,779 | ||||||||||||
| INTERNATIONAL DATACASTING CORPORATION | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||
| FOR THE PERIODS ENDED JANUARY 31, 2015 and 2014 | ||||||||||||||||
| (Canadian dollars) | ||||||||||||||||
| Three months ended | Twelve months ended | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| OPERATING ACTIVITIES | ||||||||||||||||
| Net loss | $ | (348,658 | ) | $ | (5,403,531 | ) | $ | (4,330,499 | ) | $ | (8,173,760 | ) | ||||
| Add items not requiring an outlay of cash: | ||||||||||||||||
| Impairment charge on non-current assets | - | 3,253,772 | - | 3,253,772 | ||||||||||||
| Depreciation and impairment of capital assets | 54,115 | 120,202 | 199,737 | 562,209 | ||||||||||||
| Deferred tax adjustments | (5,713 | ) | 2,314 | (5,758 | ) | (8,512 | ) | |||||||||
| Realized loss on sale of available-for-sale investments | - | - | - | 25,344 | ||||||||||||
| Unrealized loss on derivatives | - | 51,919 | - | 77,095 | ||||||||||||
| Stock-based compensation | 153,872 | 66,469 | 601,104 | 138,100 | ||||||||||||
| (146,384 | ) | (1,908,855 | ) | (3,535,416 | ) | (4,125,752 | ) | |||||||||
| Net change in non-cash working capital: | ||||||||||||||||
| Accounts receivable | 1,385,796 | 387,365 | 1,824,768 | 2,855,655 | ||||||||||||
| Inventories | 15,360 | 767,355 | 210,231 | (1,344,226 | ) | |||||||||||
| Other assets | 54,179 | 161,862 | 261,932 | 33,466 | ||||||||||||
| Accounts payable and accrued liabilities | (552,720 | ) | (336,843 | ) | (1,210,726 | ) | (1,055,143 | ) | ||||||||
| Customer deposits | (12,589 | ) | 13,210 | 20,058 | (333,282 | ) | ||||||||||
| Deferred revenue | (239,851 | ) | (49,537 | ) | 119,275 | (9,319 | ) | |||||||||
| Provisions | (165,856 | ) | (240,999 | ) | (108,628 | ) | (185,592 | ) | ||||||||
| Current tax liability | 1,772 | 8,828 | 954 | (9,830 | ) | |||||||||||
| Net cash applied to operating activities | 339,707 | (1,197,614 | ) | (2,417,552 | ) | (4,174,023 | ) | |||||||||
| INVESTING ACTIVITIES | ||||||||||||||||
| Purchase of short-term investment | - | - | (80,000 | ) | - | |||||||||||
| Redemption of short-term investment | - | 89,500 | 72,500 | 2,500 | ||||||||||||
| Proceeds from sale of available-for-sale investments | - | - | - | 1,974,646 | ||||||||||||
| Purchase of capital assets | (69,975 | ) | (85,738 | ) | (225,483 | ) | (239,494 | ) | ||||||||
| Net cash (applied to) provided by investing activities | (69,975 | ) | 3,762 | (232,983 | ) | 1,737,652 | ||||||||||
| FINANCING ACTIVITIES | ||||||||||||||||
| Issuance of common shares | - | - | 394,325 | 231,000 | ||||||||||||
| Advances from secured lender | 630,266 | - | 751,597 | - | ||||||||||||
| Repayments of secured borrowings | (607,191 | ) | - | (607,191 | ) | - | ||||||||||
| Payments made on vested RSU's | (7,448 | ) | - | (7,448 | ) | - | ||||||||||
| Repayments of obligations under capital leases | - | - | - | (2,999 | ) | |||||||||||
| Net cash provided by financing activities | 15,627 | - | 531,283 | 228,001 | ||||||||||||
| Net decrease in cash during the year | 285,359 | (1,193,852 | ) | (2,119,252 | ) | (2,208,370 | ) | |||||||||
| CASH AND CASH EQUIVALENTS - Beginning of year | 330,044 | 3,928,507 | 2,734,655 | 4,943,025 | ||||||||||||
| CASH AND CASH EQUIVALENTS - End of year | $ | 615,403 | $ | 2,734,655 | $ | 615,403 | $ | 2,734,655 | ||||||||
| International Datacasting Corporation | |||||||||||||||||
| NON-GAAP FINANCIAL MEASURE RECONCILIATION | |||||||||||||||||
| ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION, AND AMORTIZATION | |||||||||||||||||
| FOR THE PERIODS ENDED JANUARY 31, 2015 and 2014 | |||||||||||||||||
| (Canadian dollars) | |||||||||||||||||
| Three months ended | Twelve months ended | ||||||||||||||||
| January 31, 2015 | January 31, 2014 | January 31, 2015 | January 31, 2014 | ||||||||||||||
| Net loss reported under IFRS (unaudited) | $ | (348,658 | ) | $ | (5,403,531 | ) | $ | (4,330,499 | ) | $ | (8,173,760 | ) | |||||
| Add (subtract): | |||||||||||||||||
| Writedown of deferred tax assets | - | 2,800,000 | - | 2,800,000 | |||||||||||||
| Restructuring charges | - | - | 441,559 | - | |||||||||||||
| Depreciation expense | 54,115 | 120,202 | 199,737 | 562,209 | |||||||||||||
| Write-down of capital assets | - | 453,772 | - | 453,772 | |||||||||||||
| Inventory impairment charge, net of recoveries | - | 277,291 | - | 282,961 | |||||||||||||
| Termination costs relating to senior management | - | 162,880 | - | 183,505 | |||||||||||||
| Income tax expense (recovery) | (5,453 | ) | 23,589 | 2,410 | 29,188 | ||||||||||||
| Interest expense | 24,253 | - | 25,977 | 1,182 | |||||||||||||
| Net investment income | (564 | ) | (8,822 | ) | (11,505 | ) | (29,527 | ) | |||||||||
| Adjusted EBITDA (Loss) | $ | (276,307 | ) | $ | (1,574,619 | ) | $ | (3,672,321 | ) | $ | (3,890,470 | ) | |||||
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 and/or non-recurring charges as noted in the above table.
Contact Information:
Chris Van Staveren
Chairman
+1 613 596 4120
CVanStaveren@datacast.com
www.datacast.com