Hesitant customers led to lower 2016 second-quarter revenue for Ottawa-based International Datacasting, the company said late Tuesday.
IDC said the hesitation was due to the possibility the firm would be acquired by San Diego’s Pico Digital, a deal shareholders eventually rejected.
The company reported second-quarter revenues of $1.7 million, a decrease of 36 per cent from the same quarter last year. IDC posted a gross profit of $900,000 and a gross margin of 54 per cent for the three months ending July 31.
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IDC reduced operating expenses to $2.1 million, 20 per cent lower than the same period a year earlier. The company said it achieved the cuts through initiatives it has employed throughout fiscal 2015 and so far in 2016.
The company’s adjusted EBITDA loss for the quarter was down to $900,000, compared with $1.2 million for the same quarter last year. Lower revenues were not enough to cover operating costs, it said.
Shareholders’ rejection of Pico Digital’s bid prompted the board to take another look at its short-term business strategy.
Doug Lowther left as CEO and was replaced by the tandem of Steeve Huin and Chris Barrett. Both men say customer confidence is starting to return.
“We are seeing signs of increased sales volume and pipeline for both the third and fourth quarter of fiscal 2016,” they said in a statement. “This increased volume and the advanced state of some larger potential deals maintain our confidence in a stronger IDC going forward.”
The company said it has made further progress since the end of the quarter, including engaging in active negotiations for a multimillion-dollar laser MPS opportunity. It has also closed its San Diego offices, transferring all activity to Ottawa.
The company also announced Wednesday it has entered into a long-term strategic agreement with Ymagis, a European company providing digital technology to the motion picture industry. IDC will supply Ymagis with its new software-based Digital Cinema Client, enabling delivery of movies and trailers over both satellite and broadband.