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)
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------------------------------------------------
(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(TM) 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(TM)
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, October 31, October 31, October 31,
2012 2011 2012 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
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GROSS PROFIT 3,104,861 3,141,134 8,726,523 9,692,007
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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
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Total operating
expenses 2,552,295 3,368,209 8,659,924 10,381,598
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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)
------------------------------------------------------
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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)
------------------------------------------------------
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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, October 31, October 31, October
2012 2011 2012 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
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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, October 31, October 31, October 31,
2012 2011 2012 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
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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.
Contacts: International Datacasting Corporation Christine Rozak
Director, Marketing and Communications
613-596-4120crozak@datacast.com