Science & Technology
Science and Technology
Science and Technology
Tue, April 7, 2009
Mon, April 6, 2009 International Datacasting Corporation: International Datacasting Corporation Announces Fiscal 2009 Year End and Fourth Quarter
OTTAWA, ONTARIO--(Marketwire - April 6, 2009) - International Datacasting Corporation (TSX:IDC), a leader in providing advanced global solutions for the distribution of broadband content via satellite, announced today its financial results for the three- and 12-month periods ended January 31, 2009. All figures are stated in Canadian dollars.
Fiscal 2009 Highlights
- Revenue for fiscal 2009 was $29.1 million, an increase of 18% from the $24.7 million recorded in fiscal 2008.
- Gross margin was 47%, up from 46% last year.
- EBITDA increased to $2.6 million from $1.7 million in fiscal 2008.
- Net earnings increased to $3.0 or $0.05 per share-basic in fiscal 2009, changed from $2.6 million or $0.06 per share-basic in fiscal 2008.
Fourth Quarter Fiscal 2009 Highlights
- Revenue for the quarter was $6.4 million, compared to $7.5 million recorded in Q4 2008.
- Gross margin was 57%, compared to 32% for the same period last year.
- EBITDA increased to $0.7 million from $0.3 million in Q4 2008.
- Net earnings were $1.6 million or $0.03 per share-basic in Q4 2009, compared to $2.0 million or $0.04 per share-basic in the same quarter of the previous year.
"In fiscal 2009, we delivered another successful year of significant growth in the business," said Ron Clifton, President and CEO of IDC. "We achieved record revenue and earnings, expanded our customer base, added many new clients, launched new products in each of our vertical markets and secured the renewal of our multi-year contract to continue providing radio and television services to Canadian Forces serving overseas. We also strengthened our foothold in the rapidly growing digital cinema market with new orders in Europe and our first full scale deployment of 3D systems for live alternative content in the U.S."
Mr. Clifton continued: "While a slowing economy provides cause for caution in the near-term, we believe that our long-term prospects remain strong. The trends in the industry favouring broadband satellite IP multicasting in the broadcast radio, data and video markets continue to fuel demand for our products and applications. We believe the combination of momentum from our sizable customer base, our technology leadership with an applications focus and a strong balance sheet will continue to position us well going forward."
Operational Highlights
IDC generated a combination of new and repeat business orders in fiscal 2009 with strong revenue growth in all its geographic regions. Throughout fiscal 2009, IDC continued to deliver on its strategy of providing a comprehensive suite of solutions by offering a common broadband technology platform across three vertical market sectors: broadcast data, radio and video.
In the Broadcast Data market, IDC fulfilled a large multi-million dollar master order from a long-time customer in the news and financial information sector with its new award-winning dual carrier satellite receiver product. The Company was also selected and received orders for a U.S. Government program for a ruggedized compact version of this new product. In addition, the Company secured an order for a new high speed Internet overlay service network,won its first orders for its high-performance IP multicast network security and encryption solution and was selected to provide a next-generation corporate training and digital signage network to Grupo Financiero Banorte's more than 950 branches across Mexico.
In the Broadcast Radio market, IDC continued to make significant progress in international markets that are upgrading to new technology. The Company installed new SuperFlex IP radio networks for customers in Europe, Australia, New Zealand, Papua New Guinea and Thailand, and continued the roll-out of network expansion and upgrades for Westwood One in the U.S. PROFLine professional radio network products were also supplied to new and existing customers across the European market.
In the Broadcast Video market, IDC continued to deliver products and services to two major IPTV customers in the US and was selected by the Public Broadcasting Service (PBS), and shipped initial equipment for a next-generation satellite network to deliver file based digital television programming to PBS member stations across the U.S. The Company also received orders from TVN, the world's largest television on-demand company, to provide SuperFlex IP satellite receivers for their Video On Demand network. IDC's digital cinema solutions also contributed significantly in fiscal 2009. Through technology licensing agreements with Doremi Labs and Sensio, IDC provided to long standing customer Cinedigm in the US the world's first 3D live digital cinema network, designated CineLive". IDC's leading edge technology was also selected by OpenSky and Arqiva with orders received for new digital cinema network deployments in Europe.
Financial Review
Revenues were $29.1 million for fiscal 2009 compared to $24.7 million a year earlier, an increase of 18%. The year-over-year growth was a result of an increase in satellite equipment sales to new and existing customers in all three of the Company's vertical markets, and, in particular, an increase in sales of a new dual carrier satellite receiver product launched in the first quarter and targeted at data and video applications.
IDC's business continues to grow on an annual basis with fluctuations due to order timing on a quarterly basis. As a result, revenues for Q4 2009 were $6.4 million, down compared to revenue of $7.5 million in Q4 2008.
Gross profit was $13.8 million in fiscal 2009, representing 47% of revenues, compared to $11.4 million or 46% of revenues in fiscal 2008. Margins were positively affected by a change in the product mix, increased manufacturing efficiencies and reduced costs due to outsourcing compared to fiscal 2008.
Gross profit for Q4 2009 was $3.6 million, representing 57% of revenues, compared to $2.4 million or 32% of revenues in Q4 2008. In Q4 2009, margins were higher than usual due to product mix, an inventory accrual adjustment and a standard cost adjustment. Without these two inventory adjustments, which were for prior periods in the fiscal year, margins for Q4 2009 would have been 47%. Margins in Q4 2008 were lower than usual as the Company fulfilled a large order at significantly lower margins for strategic reasons.
Overall operating expenses were $12.3 million in fiscal 2009 compared to $10.3 million in fiscal 2008, as the Company increased spending to support and grow a higher volume of business. Selling, general and administrative (SG&A) expenses grew to $7.8 million from $6.8 million, primarily due to increased staff, sales commissions associated with higher revenues and consulting fees related to the implementation of new internal controls certification. As a percentage of revenues, SG&A expense declined from 28% of revenue in fiscal 2008 to 27% of revenue in fiscal 2009.
Research and Development (R&D) spending rose to $3.4 million from $2.4 million, primarily due to the addition of engineering staff to support the expansion and continued innovation of the Company's satellite equipment product lines. Over the longer term, the Company expects R&D investment to be approximately 10% to 12% of revenue, as IDC maintains its strategy of developing new products and applications to grow the business.
Earnings before interest, taxes, depreciation and amortization (EBITDA) was $2.6 million in fiscal 2009, up from $1.7 million in fiscal 2008. The increase was due to the higher revenues, improved margins, and the implementation of a foreign currency strategy in fiscal 2009, which resulted in a smaller net foreign exchange loss for the year of $79,451, compared to a foreign exchange loss of $487,319 in fiscal 2008. (Please see note on Non-GAAP Financial Information below.)
Net earnings increased to $3.0 million for the year, up from $2.6 million in fiscal 2008. In fiscal 2009, IDC recorded a $1.5 million income tax recovery, compared to a $2.0 million recovery in fiscal 2008. In both fiscal 2009 and fiscal 2008, the Company recognized the majority of the income tax recovery in Q4. For fiscal 2009, net earnings per share-basic were $0.05, compared to $0.06 in fiscal 2008. The year-over-year decline was due to a higher weighted average number of shares outstanding in fiscal 2009.
IDC's cash balance was $7.6 million at January 31, 2009 compared to $7.8 million at January 31, 2008, with $1.6 million of cash generated by operating activities in fiscal 2009, compared to $1.7 million of cash used in operating activities in fiscal 2008. At fiscal 2009 year end, the Company was free of term debt compared to $1.0 million in term debt at the beginning of the year.
A complete set of audited financial statements and management's discussion and analysis for the three and 12 months ended January 31, 2009 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 Tuesday, April 7, 2009 at 9:00 a.m. EPT to discuss this announcement. The call may be accessed by dialing 416-644-3416 or 1-800-732-9307. A taped replay will be available for one week by dialing 416-640-1917 or 1-877-289-8525, reference number 21301974#. 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.
About International Datacasting Corporation (IDC)
International Datacasting Corporation (TSX:IDC) is a global leader in providing advanced solutions for the distribution of broadband content via satellite. IDC is at the forefront of delivering IP-based datacasting solutions via satellite and content distribution technologies with installations in more than 100 countries worldwide. IDC's products are in demand for radio and television broadcast networks, distance learning, digital signage, digital cinema, IPTV distribution and other content distribution applications. IDC is headquartered in Ottawa, Canada, operates in Europe through its wholly owned subsidiary PROFline B.V. in Arnhem, the Netherlands and has an established international network of value-added partners and distributors.
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, 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.
International Datacasting Corporation
Consolidated Balance Sheet as at
January 31, 2009 January 31, 2008
ASSETS
Current Assets
Cash $7,554,296 $7,842,443
Amounts receivable 6,903,984 8,310,120
Income tax receivable 171,766 34,190
Inventories 4,250,698 2,547,142
Prepaid expenses 487,073 373,280
Future tax asset 583,537 301,125
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Total Current Assets 19,951,354 19,408,300
Equipment 3,113,279 3,074,510
Future tax asset long term portion 2,911,463 1,862,375
Intangible assets 852,957 1,163,127
Goodwill 2,491,030 2,491,030
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9,368,729 8,591,042
$29,320,083 $27,999,342
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LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities
Accounts payable and accrued liabilities $4,376,113 $5,103,315
Other liabilities 7,800 4,662
Amounts on deposit - 4,881
Obligations under capital leases -
current portion 147,827 204,598
Term loan - current portion - 628,333
Deferred revenue 691,326 705,990
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Total Current Liabilities 5,223,066 6,651,779
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Long Term Liabilities
Term loan - long term portion - 343,645
Obligations under capital leases 176,473 259,854
Future tax liability 217,504 296,597
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Total Long Term Liabilities 393,977 900,096
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Total Liabilities 5,617,043 7,551,875
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Shareholders' equity
Capital stock 22,829,784 22,779,088
Contributed surplus 2,680,871 2,547,811
Accumulated other comprehensive income 176,440 97,254
Accumulated deficit (1,984,055) (4,976,686)
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Total Shareholders' Equity 23,703,040 20,447,467
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$29,320,083 $27,999,342
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International Datacasting Corporation
Consolidated Statement of Operations and
Comprehensive Income
For The Years Ended
January 31, 2009 January 31, 2008
Revenue $29,060,599 $24,708,905
Cost of revenue 15,278,327 13,262,957
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Gross profit 13,782,272 11,445,948
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Operating expenses
Selling, general and administrative 7,765,188 6,805,912
Research and development, net of
investment tax credits 3,361,556 2,431,798
Amortization 1,206,999 1,014,572
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12,333,743 10,252,282
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Operating income 1,448,529 1,193,666
Interest income (expense)
Long-term (47,567) (66,243)
Short-term 157,593 (44,589)
Foreign exchange (loss) (79,451) (487,319)
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Earnings before income taxes 1,479,104 595,515
Income tax recovery 1,513,527 1,957,108
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Net earnings $2,992,631 $2,552,623
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Other comprehensive income
Unrealized gain (loss) on translation of
self sustaining foreign operations $79,186 $(48,462)
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Other comprehensive income $79,186 $(48,462)
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Comprehensive income $3,071,817 $2,504,161
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Net earnings per share
Basic $0.05 $0.06
Diluted $0.05 $0.05
Weighted average number of shares
outstanding
Basic 56,384,415 45,641,857
Diluted 59,055,942 49,763,317
International Datacasting Corporation
Unaudited Consolidated Statement of Operations and
Comprehensive Income
For The Three Months Ended
January 31, 2009 January 31, 2008
Revenue $6,431,288 $7,528,562
Cost of revenue 2,790,518 5,135,515
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Gross profit 3,640,770 2,393,047
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Operating expenses
Selling, general and administrative 1,936,695 1,699,645
Research and development, net of
investment tax credits 927,226 666,876
Amortization 331,236 328,471
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3,195,157 2,694,992
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Operating income 445,613 (301,945)
Interest income (expense)
Long-term (6,986) (12,746)
Short-term 34,045 (1,639)
Foreign exchange gain (loss) (102,222) 231,765
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Earnings before income taxes 370,450 (84,565)
Income tax recovery 1,248,761 2,064,976
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Net earnings $1,619,211 $1,980,411
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Other comprehensive income
Unrealized gain on translation of self
sustaining foreign operations $69,198 $98,229
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Other comprehensive income 69,198 98,229
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Comprehensive income $1,688,409 $2,078,640
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Earnings per share
Basic $0.03 $0.04
Diluted $0.03 $0.03
Weighted average number of shares
outstanding
Basic 56,409,688 55,061,027
Diluted 57,526,022 57,973,785
International Datacasting Corporation
Consolidated Statement of Cash Flows
for the years ended
January 31, 2009 January 31, 2008
Operating Activities
Net earnings $2,992,631 $2,552,623
Add items not requiring an outlay of
cash:
Amortization 1,206,999 1,014,572
Future income taxes (1,410,593) (2,053,903)
Stock-based compensation 149,927 239,003
Loss on disposal of equipment 2,494 -
Net change in operating components of
working capital (1,335,336) (3,501,450)
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Cash provided by (applied to) operating
activities 1,606,122 (1,749,155)
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Investing activities
Additions to equipment (833,039) (1,712,747)
Payment of Profline holdback - (319,601)
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Cash (applied to) investing activities (833,039) (2,032,348)
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Financing activities
Line of credit advances - 1,425,000
Bank loan repayments (971,978) (2,078,022)
Repayments of obligations under capital
leases (218,337) (163,095)
Issue of common shares, net of issue costs 33,829 9,295,940
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Cash (applied to) provided by financing
activities (1,156,486) 8,479,823
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Effect of foreign exchange rate changes
on cash 95,256 (84,043)
Increase (decrease) in cash during the
period (288,147) 4,614,277
Cash - Beginning of period 7,842,443 3,228,166
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Cash - End of period $7,554,296 $7,842,443
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Equipment purchased under capital lease 78,185 245,686
Capital lease obligations assumed (78,185) (245,686)
Interest payments paid 68,286 110,832
Income taxes paid 42,935 127,635
International Datacasting Corporation
Consolidated Statement of Cash Flows
for the period ended
Three Months ended Three Months ended
January 31, 2009 January 31, 2008
Operating Activities
Net earnings $1,619,211 $1,980,411
Add items not requiring an outlay of
cash:
Amortization 331,236 328,471
Future income taxes (1,235,584) (1,970,158)
Stock-based compensation 27,540 46,932
Loss on disposal of equipment 2,494 -
Net change in operating components of
working capital (305,608) (1,808,563)
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Cash provided by (applied to) operating
activities 439,289 (1,422,907)
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Investing activities
Additions to equipment (115,552) (254,981)
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Cash (applied to) investing activities (115,552) (254,981)
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Financing activities
Line of credit advances - 1,425,000
Bank loan repayments - (2,088,019)
Repayments of obligations under capital
leases (58,299) (48,902)
Issue of common shares, net of issue costs 30,466 9,106,672
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Cash (applied to) provided by financing
activities (27,833) 8,394,751
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Effect of foreign exchange rate changes
on cash 51,246 31,998
Increase (decrease) in cash during the
period 347,150 6,748,861
Cash - Beginning of period 7,207,146 1,093,582
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Cash - End of period $7,554,296 $7,842,443
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Equipment purchased under capital lease 53,344 39,148
Capital lease obligations assumed (53,344) (39,148)
Interest payments paid 6,986 6,299
Income taxes paid - 64,210
