Posted on September 13, 2010
Ottawa, ON – September 13, 2010 – – International Datacasting Corporation, (TSX: IDC), a global leader in providing IP-based datacasting solutions for the distribution of broadband multimedia content announced its financial results for the three- and six-month FY2011 periods ended July 31, 2010. All figures are in Canadian dollars unless otherwise stated.
Financial Highlights: Q2 2011 vs. Q2 2010
- Revenue of $8.6 million, up 55% from $5.5 million. Excluding the impact of foreign exchange, sales increased by 74%
- Gross margin improved to 45% from 43%
- EBITDA1 increased by $1.1 million to $900,000 vs. loss of $200,000
- GAAP net income increased by $3.2 million to $200,000 vs. loss of $3.0 million
Financial Highlights: Q2 2011 vs. Q1 2011
- Sequential revenue up 59% to $8.6 million from $5.4 million
- Gross margin declined from 49% to 45% due primarily to changes in product mix
- EBITDA1 increased by $2.5 million to $900,000 vs. loss of $1.6 million
- GAAP net income increased by $2.3 million to $200,000 vs. loss of $2.1 million
Second Quarter Fiscal 2011 Financial Review
Consolidated FY2011 second quarter revenues were $8.6 million or 55% higher than in the same quarter in FY2010 and 59% higher than in the first quarter of FY2011. Excluding the impact of foreign exchange, sales increased by 74% over FY2010. The improvements in revenues were driven by increases in the Digital Cinema and IPTV product lines and the impact of the acquisition of the Tiernan and Logic Innovations product lines in the second half of fiscal 2010. EBITDA and GAAP net income realized significant improvements over FY2010 while gross margins improved to 45% from 43%. Cash levels continue to be strong with cash totaling $7.6 million at the end of the quarter, up from $4.8 million in the first quarter, with net working capital at $10.4 million, up from $9.8 million at the end of the previous quarter.
The implementation of cost control measures along with a recovery on bad debt expense during the quarter resulted in quarter-over-quarter declines in costs, with Selling, General and Administrative (“SG&A”) expenses declining by 15% to $1.9 million from $2.2 million in the first quarter, while Research and Development expenses, net of investment tax credits (“R&D”), declined by 13% to $1.2 million from $1.3 million in the first quarter. As a result of the addition of staff related to the Company’s acquisition of the Tiernan and Logic Innovations’ product lines, IDC’s realized an increase in operating expenses relative to the same quarter in FY2010 with SG&A expenses increasing to $1.9 million from $1.7 million while R&D increased to $1.2 million from $880,000 during the same period in FY2010.
The results for the current period do not include a contribution for the Direct-to-Home Broadcasting service that was announced on June 30, 2010 in conjunction with The Wananchi Group. The proceeds from this contract will be recognized over the next eighteen months.
“Strong demand combined with lower operating expenses enabled us to deliver a strong quarter with order levels strengthening significantly,” said Fred Godard, IDC President & CEO. “This includes an uptick in all of our territories and product lines. With the recent launch of our new Seamless 3D features, the IDC Tiernan Titan video encoding platform and the IDC PROFline STR Audio Broadcast system, combined with on-going upgrades and partnerships, we remain optimistic about our outlook for the balance of the year and into fiscal 2012.”
“We’re forging ahead with our plan and are now realizing the initial benefits of our operational reviews,” stated Adam E. Adamou, IDC Executive Chairman. “Our plan calls for additional operational improvements over the second half of fiscal 2011, a full market based assessment of the needs of our customers, and an on-going commitment to generating sustainable long term value for our shareholders.”
A conference call will be held on Monday September 13, 2010 at 9:00 a.m. ET to discuss this announcement. The call may be accessed by dialing 1-866-696-5910 with the passcode of 2527501. A taped replay will be available for one week by dialing 1-800-408-3053 reference number 4253018. To access the live webcast, please visit http://www.gowebcasting.com/1969.
A complete set of Financial Statements and Management’s Discussion and Analysis for the three and six months ended July 31, 2010 of FY2011 will be available at www.sedar.com or on the Investor Information section of IDC’s website at www.datacast.com.
This release may contain forward-looking statements reflecting IDC’s objectives, estimates and expectations. Such statements may be marked by the use words such as “believe”, “anticipate”, “estimate”, “looking ahead”, “outlook” and “expect” as well as the conditional or future tense. Such statements involve risks and uncertainties and future results may differ materially from the Company’s expectations. The forward-looking statements are subject to change and IDC disclaims any intention and assumes no obligation to update or revise any forward-looking statement whether as a result of new information or events or otherwise unless required to do so by the applicable securities legislation.
About International Datacasting Corporation (IDC)
International Datacasting Corporation (TSX: IDC) is a global leader in providing IP-based datacasting solutions for the distribution of broadband multimedia content. IDC has a broad portfolio of advanced technology products marketed under the names SuperFlex, Datacast XD, Tiernan, Logic Innovations and PROFline for implementing a wide range of broadband content contribution and distribution networks. IDC's products are in demand for radio and television broadcast networks, distance learning, digital satellite news gathering and sport contribution, digital signage, digital cinema, IPTV distribution and other applications. IDC is headquartered in Ottawa, Canada, with regional offices in Arnhem, the Netherlands and in San Diego, California. International in scope, IDC has installations in over 100 countries and service offices in the UK, Australia, Singapore and China and an international network of value-added partners and distributors.
International Datacasting Corporation
Tel. 613-596-4120 x 2220
(1) Earnings before interest, taxes, depreciation and amortization (“EBITDA”) are a non-GAAP financial measure. EBITDA is not an earnings measure recognized by GAAP and does not carry standard prescribed significance. Our method for calculating EBITDA may differ from that used by other companies that use the same designation and the reader is advised that EBITDA should not be substituted for determining net income as an indicator of operating results or as a substitute for cash flows from operating and investing activities.
This press release contains forward-looking statements that may involve risks and uncertainties. Actual results may differ materially. Factors that might cause a difference include, but are not limited to, competitive developments, risks associated with IDC’s growth, any difficulties with integrating acquired product lines into IDC’s business and/or manufacturing procedures, the development of the satellite datacasting market, regulatory risks, intellectual property infringement and other factors. IDC assumes no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof. 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.