Concerns over the company’s financial stability contributed to a 37 per cent drop in 2015 revenue for International Datacasting, the company said late Wednesday.
IDC, which recently announced it is selling its product portfolio and customer and supplier relationships to San Diego-based Pico Digital, reported 2015 fiscal year-end revenue of $10.3 million compared with the $16.3 million posted in 2014.
Revenue was lower in both the products and services division. While the product division revenue suffered from concerns over IDC’s stability, its services division suffered from the discontinued Canadian Forces Radio and Television broadcasting contract, which ended on March 31, 2014.
Operating expenses for the year were down 25 per cent from the year before, to $9.1 million, as the company cut costs under restructuring initiatives undertaken to work with a lower revenue base.
The restructuring initiatives played a role in helping IDC post a net loss of $4.3 million for the year, or seven cents per share, down from $8.2 million or 14 cents per share in 2014.
"Fiscal 2015 was another difficult year for IDC,” company president and CEO Doug Lowther said in a statement. “Product revenues have not developed as expected during fiscal 2015 and consequently IDC has not been able to achieve our previously stated guidance to return to operating profitability."
IDC chairman Chris Van Staveren said the board is strongly recommending shareholders to support the proposed sale to Pico Digital.
“We believe that this transaction is of benefit to IDC's shareholders, customers, and employees relative to currently available alternatives, including continuing operation as a standalone company,” he said in a statement.
Meanwhile, IDC has finalized the terms of $1.0 million in bridge financing from Pico Digital, which will provide it with working capital at a significantly reduced interest expense relative to the accounts receivable factoring facility IDC was using before.