OTTAWA, ONTARIO -- (Marketwire) -- 12/06/10 -- International Datacasting Corporation, (TSX: IDC), a global leader in IP-based datacasting solutions for the distribution of broadband multimedia content, today announced its financial results for the three and nine-month FY2011 periods ended October 31, 2010. All figures are in Canadian dollars unless otherwise stated.
Financial Highlights: Q3 2011 vs. Q3 2010
-- Revenue of $ 8.9 million, up 53% from $ 5.8 million. Excluding the
impact of foreign exchange, sales increased by 67%
-- Gross margin improved to 45% from 40%
-- EBITDA(1)increased to $ 1.1 million vs. a loss of $ 0.2 million making
it the highest EBITDA quarter in the Company's history
-- GAAP net income increased from $ 0.1 million to $ 0.9 million
Financial Highlights: Q3 2011 vs. Q2 2011
-- Sequential revenue up by 4% from $ 8.6 million to $ 8.9 million -- Gross margin remained consistent at 45% -- EBITDA(1)increased by 29% to $ 1.14 million from $ 0.9 million -- GAAP net income increased by $ 0.6 million
Third Quarter Fiscal 2011 Financial Review
Consolidated FY2011 third quarter revenues were $ 8.9 million or 53% higher than in the same quarter in FY2010 and 4% higher than in the second quarter of FY2011. Excluding the impact of foreign exchange, sales increased by 67% over FY2010. These improvements in revenues were driven by increased sales in the Radio market, the roll out of Digital Cinema in European and North American markets, and greater demand for IPTV product lines. EBITDA, GAAP net income and gross margin realized significant improvements over FY2010. Cash levels continue to be strong with cash totaling $ 8.3 million at the end of the third quarter, up from $7.6 million in the second quarter, with net working capital at $ 11.5 million, up from $ 10.4 million at the end of the previous quarter.
Research and development expenses, net of investment tax credits ("R&D"), declined by 7% to $ 1.1 million from $ 1.2 million in the second quarter. Selling, general and administrative ("SG&A") expenses increased slightly due to timing of customer tradeshows from $ 1.9 million in the second quarter to $ 2.0 million in third quarter. As a result of the implementation of cost control measures during the first quarter 2011, IDC realized a decrease in operating expenses relative to the same quarter in FY2010 with SG&A expenses decreasing from $ 2.3 million to $ 2.0 million in 2011, while R&D remained the same at $ 1.1 million for the same period in FY2010.
The results for the current period include a contribution for the Direct-to-Home Broadcasting service that was announced June 30, 2010 regarding The Wananchi Group. In the third quarter, revenues from this contract totaled $ 0.9 million, with the balance expected to be realized over the next four quarters.
"Our continued focus on delivering innovative broadband solutions for our global customer base resulted in significant orders in all of our product lines and territories," said Fred Godard, IDC President & CEO. "I am pleased with our fiscal and operational accomplishments and maintain our optimistic outlook for the balance of the year and into fiscal 2012. Increased revenue combined with lower operating costs have generated the strongest EBITDA quarter in the Company's history."
"We are pleased to announce, year to date, the highest revenue in IDC's history," stated Adam Adamou, IDC Executive Chairman. "Management believes the Company is only beginning to realize the benefits of our operational enhancements made over the past three quarters. Our strategic planning process includes continuing operational improvements well into fiscal 2012, a full market based assessment of the present and future needs of our customers, and an on-going commitment to generating sustainable long term value for our shareholders."
Conference Call
A conference call will be held on Tuesday, December 7, 2010 at 9:00 a.m. ET to discuss this announcement. The call may be accessed by dialing 1-613-233-1979 / 1-866-696-5910 with the pass code 8611450. A taped replay will be available until December 8, 2010 at 10:00 p.m. by dialing 1-800-408-3053 and reference the pass code 7810186. To access the live webcast, please visit http://www.gowebcasting.com/2102.
A complete set of Financial Statements and Management's Discussion and Analysis for the three and nine months ended October 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.
Forward-Looking Statements
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 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 Australia, Singapore and China and an international network of value-added partners and distributors.
International Datacasting Corporation
Unaudited Consolidated Balance Sheets as
at
October 31, January 31, 2010
2010
ASSETS
Current Assets
Cash $ 8,303,716 $ 4,675,868
Amounts receivable 6,836,654 6,171,603
Inventories 3,774,095 5,260,362
Prepaid expenses and other assets -
current portion 1,896,985 527,228
Future tax asset - current portion 40,672 40,672
--------------- ----------------
Total Current Assets 20,852,122 16,675,733
--------------- ----------------
Equipment 2,192,540 2,724,108
Prepaid expenses - long term portion 187,849 142,102
Future tax asset - long term portion 2,059,328 2,059,328
Intangible assets 533,603 542,792
Goodwill 102,925 399,925
--------------- ----------------
Total Non-Current Assets 5,076,245 5,868,255
--------------- ----------------
Total Assets $ 25,928,367 $ 22,543,988
--------------- ----------------
--------------- ----------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued liabilities$ 4,779,883 $ 4,238,427
Customer deposits 3,816,364 78,745
Other liabilities - 1,814
Obligations under capital leases -
current portion 61,806 83,542
Deferred revenue 681,177 514,096
--------------- ----------------
Total Current Liabilities 9,339,230 4,916,624
--------------- ----------------
Long Term Liabilities
Obligations under capital leases 50,853 92,930
Future tax liability 62,033 108,558
--------------- ----------------
Total Non-Current Liabilities 112,886 201,488
--------------- ----------------
Total Liabilities 9,452,116 5,118,112
--------------- ----------------
Shareholders' Equity
Capital stock 23,106,561 22,965,108
Contributed surplus 3,160,163 2,999,748
Accumulated other comprehensive (loss)
income (206,452) 23,277
Accumulated deficit (9,584,021) (8,562,257)
--------------- ----------------
Total Shareholders' Equity 16,476,251 17,425,876
--------------- ----------------
Total Liabilities and Shareholders'
Equity $ 25,928,367 $ 22,543,988
--------------- ----------------
--------------- ----------------
International
Datacasting
Corporation
Unaudited Consolidated Statements of
Operations and Comprehensive (Loss) Income
For the Nine Months Ended For the Three Months Ended
October 31, October 31, October 31, October 31,
2010 2009 2010 2009
Revenue $ 22,868,799 $ 16,441,652 $ 8,901,659 $ 5,810,288
Cost of revenue 12,397,732 9,242,545 4,911,383 3,490,026
------------- ------------- ------------- -------------
Gross profit 10,471,067 7,199,107 3,990,276 2,320,262
------------- ------------- ------------- -------------
Operating expenses
Selling, general
and
administrative 6,118,553 5,934,416 2,001,423 2,262,604
Research and
development, net
of investment tax
credits 3,543,978 3,009,812 1,072,328 1,096,994
Amortization 957,792 921,844 304,640 296,313
Goodwill
impairment - 2,491,030 - -
Restructuring
costs (Note 8) 673,131 - - -
------------- ------------- ------------- -------------
11,293,454 12,357,102 3,378,391 3,655,911
------------- ------------- ------------- -------------
Operating (loss)
income (822,387) (5,157,995) 611,885 (1,335,649)
Interest income
(expense)
Long-term (10,086) (15,688) (4,226) (4,474)
Short-term 23,142 51,299 13,244 37,588
Realized gain on
sale of
available-for-
sale investment - 437,384 - 437,384
Realized gain on
sale of held-for-
trading
investment - 427,038 - 326,944
Foreign exchange
gain (loss) 261,506 (116,225) 220,399 29,409
------------- ------------- ------------- -------------
(Loss) income
before income
taxes and
extraordinary
(loss) income (547,825) (4,374,187) 841,302 (508,798)
Income tax
(expense)
recovery (25,426) 88,525 15,276 15,509
------------- ------------- ------------- -------------
(Loss) income
before
extraordinary
(loss) income (573,251) (4,285,662) 856,578 (493,289)
Extraordinary
(loss) income
(Note 9) (448,513) 591,886 - 591,886
------------- ------------- ------------- -------------
Net (loss) income $ (1,021,764)$ (3,693,776)$ 856,578 $ 98,597
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Other
comprehensive
(loss) income
Unrealized gain on
revaluation of
available-for-
sale investment $ - $ 446,897 $ - $ 128,333
arising during the
period
Reclassification
adjustment for
gains included in
net income - (446,897) - (446,897)
------------- ------------- ------------- -------------
Change in
unrealized gain
on available-for-
sale investment - - - (318,564)
Unrealized (loss)
gain on
translation of
self-sustaining (229,729) 49,484 - 104,827
foreign operations
------------- ------------- ------------- -------------
Other
comprehensive
(loss) income (229,729) 49,484 - (213,737)
------------- ------------- ------------- -------------
Comprehensive
(loss) income $ (1,251,493)$ (3,644,292)$ 856,578 $ (115,140)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Net (loss)
earnings per
share
Basic $ (0.02)$ (0.07)$ 0.01 $ 0.00
Diluted $ (0.02)$ (0.07)$ 0.01 $ 0.00
Net (loss)
earnings per
share before
extraordinary
(loss) income
Basic $ (0.01)$ (0.08)$ 0.01 $ (0.01)
Diluted $ (0.01)$ (0.08)$ 0.01 $ (0.01)
Weighted average
number of
shares outstanding
Basic (Note 10) 57,393,701 56,755,340 57,241,823 56,762,413
Diluted (Note
10) 57,393,701 57,667,840 57,241,823 58,072,492
International
Datacasting
Corporation
Unaudited
Consolidated
Statements of
Cash Flows
Nine months ended Three months ended
October 31, October 31, October 31, October 31,
2010 2009 2010 2009
Operating
activities
Net (loss)
income $ (1,021,764)$ (3,693,776)$ 856,578 $ 98,597
Add items not
requiring an
outlay of cash:
Goodwill
impairment - 2,491,030 - -
Amortization 957,792 921,844 304,640 296,313
Bad debt
expense
(recovery) - 38,357 - (6,894)
Gain on sale
of available-
for-sale
investment - (437,384) - (437,384)
Gain on sale
of held-for-
trading
investment - (427,038) - (326,944)
Future income
taxes (46,525) (93,437) (15,509) (15,509)
Stock-based
compensation 204,831 278,319 48,996 88,651
Extraordinary
loss (income) 448,513 (591,886) - (591,886)
Net change in
operating
components of
working capital
net of
effects of
business
acquisition of
Tiernan (Note 7) 3,171,812 1,237,253 (522,008) 495,216
------------- ------------- ------------- -------------
Cash provided by
(applied to)
operating
activities 3,714,659 (276,718) 672,697 (399,840)
------------- ------------- ------------- -------------
Investing
activities
Additions to
equipment (120,035) (350,378) (13,946) (149,253)
Proceeds on
disposition of
available-for-
sale investment - 635,487 - 635,487
Proceeds on
disposition of
held-for-trading
investment - 624,778 - 624,778
Business
acquisition of
Tiernan - (1,870,135) - (1,870,135)
Purchase of
available-for-
sale investment - (198,103) - -
Purchase of held-
for-trading
investment - (197,740) - (145,843)
------------- ------------- ------------- -------------
Cash applied to
investing
activities (120,035) (1,356,091) (13,946) (904,966)
------------- ------------- ------------- -------------
Financing
activities
Repayments of
obligations under
capital leases (63,813) (127,209) (21,605) (36,117)
Issue of common
shares, net of
issue costs 97,037 56,411 61,239 -
------------- ------------- ------------- -------------
Cash provided by
(applied to)
financing
activities 33,224 (70,798) 39,634 (36,117)
------------- ------------- ------------- -------------
Increase
(decrease) in
cash during the
period 3,627,848 (1,703,607) 698,385 (1,340,923)
Cash - Beginning
of period 4,675,868 7,554,296 7,605,331 7,191,612
------------- ------------- ------------- -------------
Cash - End of
period $ 8,303,716 $ 5,850,689 $ 8,303,716 $ 5,850,689
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Interest paid 10,086 15,688 4,226 4,474
Income taxes paid 139,010 4,913 - -
(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.
Contacts:
International Datacasting Corporation
Christine Rozak
Director, Marketing and Communications
613-596-4120 x 2215
crozak@datacast.com
