International Datacasting Corporation Announces Fiscal 2011 First Quarter Results

June 8, 2010

Ottawa, ON – June 8, 2010 – – International Datacasting Corporation (TSX: IDC), a leader in providing advanced global solutions for the distribution of broadband content via satellite, announced its financial results for the three-month period ended April 30, 2010. All figures are stated in Canadian dollars.

Q1 Fiscal 2011 Highlights

·       Revenue was $5.4 million, compared to $5.1 million recorded in Q1 fiscal 2010.

·       Gross margin remained consistent at 49% year-over-year.

·       EBITDA was ($1.8m) compared to ($0.6m) in Q1 fiscal 2010.

·       Net loss $(2.1) million or $(0.04) per share, compared to net loss of $(0.8) million or $0.01 per share in Q1 fiscal 2010.

“Q1 was a disappointment and we need to do better” said Frederick Godard, IDC President and CEO. “We continue to streamline our operations, and these efficiency measures combined with a stronger revenue run-rate should result in a significant improvement in our performance over the balance of the year” he continued.

Revenues were $5.4 million for Q1 fiscal 2011, compared to $5.1 million in Q1 fiscal 2010.  IDC continues to experience longer than normal sales cycles as clients continue to moderate their purchasing decisions. This amount is lower than the Company’s expectation due to the delay of some orders for the upcoming FIFA World Cup, these orders were received and filled in Q2 fiscal 2011. The Company is closely monitoring expenses and capital expenditures in order to continue to grow the business while continuing to restructure operations.

Gross profit was $2.7 million in Q1 fiscal 2011. Gross margins were affected by the downward pressure on pricing, and the continued consolidation of business units. Management continues to work to improve gross margins over the long-term, but expects margins to continue to fluctuate with product mix and order timing on a quarterly basis.

Overall operating expenses for Q1 fiscal 2011 were $4.5 million, compared to $3.3 million in Q1 fiscal 2010. This includes the $0.7 million in costs for the previously announced corporate restructuring. 

Selling, General and Administrative (SG&A) expenses were $2.2 million in Q1 fiscal 2011, compared to $2.0 million in Q1 fiscal 2010.  Research and Development (R&D) costs were $1.3 million in fiscal 2011, compared to $1.0 million in Q1 fiscal 2010. 

Earnings before interest, taxes, depreciation and amortization (EBITDA) was $(1.8) million in Q1 fiscal 2011, compared to $(0.6) million in Q1 fiscal 2010. 

In Q1 fiscal 2011, the Company recorded a net loss of $2.1 million, or $0.04 per share, compared to a net loss of $0.8 million, or $0.01 per share, in Q1 fiscal 2010. 

IDC’s cash balance was $4.8 million at April 30, 2010, compared to $4.7 million at January 31, 2010, with $ 0.2 million of cash provided by operating activities in Q1 fiscal 2011, compared to $0.1 million of cash applied to operating activities in Q1 fiscal 2010. The Company remains free of long-term debt and has unused bank credit lines totaling $1.5 million

A complete set of unaudited consolidated financial statements and management’s discussion and analysis for the three months ended April 30, 2010 will be available at www.sedar.com or on the Investor Information section of IDC’s website at www.datacast.com.

Conference Call

A conference call will be held on Wednesday, June 09, 2010  at 9:00 a.m. ET to discuss this announcement. The call may be accessed by dialing 647-427-0833 or 1-800-231-8191. A taped replay will be available for one week by dialing 416-849-0833 or 1-800-642-1687, reference number 79534402.  To access the live webcast, please visit the Company’s website at www.datacast.com or www.newswire.ca for directions. 

Use of Non-GAAP Financial Information

Non-GAAP measures, such as EBITDA and backlog, are provided to enhance the overall understanding of our current financial performance and our prospects for the future. Specifically, we believe non-GAAP results provide useful information to both management and investors by excluding specific expenses we believe are not indicative of our core operating results. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with generally accepted accounting principles. 

EBITDA (earnings before interest, taxes, depreciation and amortization) is not a recognized measure under Canadian generally accepted accounting principles (GAAP), does not have standardized meaning, and is unlikely to be comparable to similar measures used by other companies. Accordingly, investors are cautioned that EBITDA should not be construed as an alternative to revenue, net earnings or loss determined in accordance with GAAP as an indicator of the financial performance of the Company or as a measure of the Company’s liquidity and cash flows.