IDC revenues still down, gross margin improving

Ottawa-based International Datacasting is still feeling the effects of the non-renewal of the Canadian Forces Radio and Television service contract, reporting 2015 second-quarter revenue Thursday that was 46 per cent lower than the same quarter last year.

Still, product sales this quarter were up 14 per cent from the first quarter of the digital content distributor’s fiscal year. International Datacasting (TSX:IDC) said that reflects “more favourable margins from sales of newer products as well as reductions in overhead costs.”

A better mix of products and reduced overhead contributed to an improvement in gross margin, to 47 per cent from 45 per cent in the same quarter last year.

The company’s net loss is up to $1.3 million from $400,000 at this time last year.

CEO Doug Lowther said those numbers have improved over the last three quarters, mostly due to cost-cutting.

“In the second half of fiscal 2015, our focus will be on revenue growth,” Mr. Lowther said in a statement. “We believe that our new and enhanced products will enable IDC to increase product revenues from those achieved in the last few quarters, and continue to anticipate a return to profitability during the second half of fiscal 2015."

Year-to-date, the company’s deferred revenue sits at $1 million, all of which is expected to be recognized in future quarters.

The company has $5 million in working capital, including $1.8 million in cash on hand.

Earlier this week, a major financial institution made a commitment to the company for a new financing facility that will see an additional $1 million of additional liquidity for the company.

Shares in the company were down about five per cent in early afternoon trading Friday, at $0.08 per share.

IDC also announced Daniel Thunberg has been appointed vice-president, international sales.

Mr. Thunberg will be responsible for growing sales in the Europe, Middle East and Africa region as well as the Asia Pacific region..

“I am very excited about joining the IDC team and getting the opportunity to engage at the front lines with IDC's new product portfolio,” Mr. Thunberg said in a statement.