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International Datacasting Corporation Announces Third Quarter FY2013 Financial Results

Date : 12/12/2012 @ 3:30AM
Source : Marketwired
Stock : Intl Datacasting J (IDC)
Quote : 0.08  0.0 (0.00%) @ 10:29PM
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International Datacasting Corporation Announces Third Quarter FY2013 Financial Results

Intl Datacasting (TSX:IDC)
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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)
                            ------------------------------------------------
                            ------------------------------------------------


                                                                            
(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 
                      ------------------------------------------------------
                                                                            
GROSS PROFIT             3,104,861    3,141,134     8,726,523     9,692,007 
                      ------------------------------------------------------
                                                                            
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 
                      ------------------------------------------------------
  Total operating                                                           
   expenses              2,552,295    3,368,209     8,659,924    10,381,598 
                      ------------------------------------------------------
                                                                            
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)
                      ------------------------------------------------------
                      ------------------------------------------------------
                                                                            
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)
                      ------------------------------------------------------
                      ------------------------------------------------------
                                                                            
                                                                            
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 
                        ----------------------------------------------------
                        ----------------------------------------------------
                                                                            
                                                                            
                                                                            
                    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 
                          --------------------------------------------------
                          --------------------------------------------------

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



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