[SatNews] International Datacasting Corporation ("IDC") (TSX:IDC) has announced its financial results for the first half and second quarter ended July 31, 2013—all amounts in this release are in Canadian dollars unless otherwise stated.
For the second quarter of Fiscal 2014, total revenues were $4.9 million, a decrease of 23 percent or $1.4 million from the prior period. The total gross margin for the quarter declined to 45 percent from 47 percent for the comparable prior period, primarily due to lower volume of sales to cover current manufacturing-related overhead costs.
For the first half of Fiscal 2014, total revenues were $10.2 million, compared to $16.0 million for the same period in Fiscal 2013. The decrease of $4.8 million or 36 percent was driven substantially by lower sales within the Systems Project segment as a result of the completion of the Direct-to-Home Broadcasting project in Kenya. The total gross margin improvement was largely due to change in business mix with higher margins earned from Products and Services segments.
"The impact of reduced revenues on profitability was mitigated by strength in our Digital Cinema business, as well as by effective cost controls," said Doug Lowther, CEO of International Datacasting. "IDC remains the market leader in satellite delivery of Cinema content and we estimate that we support 70 percent of the sites that are deployed worldwide."
Operating Expenses decreased by $0.6 million or 20 percent to $2.6 million in the current quarter and decreased by $0.7 million or 17 percent to $5.4 million for the first half of Fiscal 2014 compared to prior periods. The significant cost savings were largely due to unusual charges incurred in the second quarter of Fiscal 2013 with respect to the dissident shareholder proxy contest and the failed acquisition transaction.
IDC incurred an Adjusted EBITDA loss of $0.2 million for both the second quarter and first half of Fiscal 2014, compared to income of $0.4 million and $0.6 million for the same prior periods, respectively. At July 31, 2013, IDC's working capital ratio improved to 3.7 to 1 and had liquid assets of $5.6 million. "Cash management continues to be a focus for the Company and our balance sheet remains solid," said Rick Clements, CFO of International Datacasting.