IDC Reports Significant Loss in Revenues in First Quarter Fiscal 2015
Ottawa, Canada, June 10, 2014-- International Datacasting Corporation today announced its financial results for the first quarter of Fiscal 2015 ended April 30th, 2014. Revenues totaled CDN$ 2.8 million for the first quarter of Fiscal 2015, 47% lower than the prior year's first quarter.
The decrease from the year earlier quarter was primarily due to lower revenues from data and radio products, in addition to the non-renewal of the Canadian Forces Radio and Television service which ended on March 31st, 2014, according to IDC.
In the quarter, IDC's product revenues were lower than expected primarily because three customer orders that had been expected to be achieved in the quarter were deferred. One of the three orders has shipped in May, and the other two are expected to be completed in the second or the third quarter.
In addition, IDC closed several support agreements with customers, contributing to an increase of 75% in deferred revenues to CDN$ 0.8 million. This revenue will be recognized in future quarters.
Gross profit for the first quarter of Fiscal 2015 declined to CDN$ 1.0 million or 36% gross margin, compared to CDN$ 2.7 million or 50% gross margin in the comparable prior period. The decrease was driven primarily by restructuring activities charged to cost of sales during the first quarter of Fiscal 2015 and software upgrades delivered to a large customer at substantial higher margins during the first quarter of Fiscal 2014. Net of these factors, overall product margins were slightly less in the first quarter of Fiscal 2015 due to the lower revenue base (resulting in fixed manufacturing overheads representing a larger percentage of sales).
IDC's Adjusted EBITDA loss was CDN$ 1.2 million in the quarter, as compared to $1.6 million in the fourth quarter of Fiscal 2014 and CDN $2.2 million in the third quarter of Fiscal 2014. The reduced loss compared to the fourth quarter was due to significantly lower operating costs, partially offset by lower revenues. In the first quarter of Fiscal 2014, Adjusted EBITDA was close to breakeven.
At April 30, 2014, IDC's working capital was CDN$ 5.6 million, including CDN$ 2.2 million in cash. Steven Archambault, CFO, commented, "While working capital has been consumed during Q1 Fiscal 2015, we remain confident that this will stabilize by midyear based on the current sales pipeline for Q2 and Q3. We continue to make good progress in reducing our worldwide cost structure to achieve breakeven results with CDN $4.5 million in quarterly revenues."
Doug Lowther, IDC's President and CEO, stated, "While revenue in the first quarter was below our expectations, we made excellent progress in restructuring our business for lower costs and in launching two new products that we believe will lead to enhanced competitiveness and revenues later in the year. We remain confident that IDC will reach profitability by the end of the current Fiscal year."
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