UPDATE: IDC tempering expectations after drop in Q2 revenues

Mark Brownlee
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Executives with Ottawa-based digital content distribution firm International Datacasting Corp. (TSX:IDC) do not expect any major shift in fortunes in the near future after reporting a second-quarter decrease in revenue as net losses increased.

International Datacasting Corp.'s headquarters are located in Kanata.

Doug Lowther, speaking to investors Friday morning after the results came out, said the company is currently in the process of developing a three-year plan that “will take IDC from today’s inconsistent performance towards sustainable revenue growth and profitability.”

IDC does not make specific projections about future revenue but Mr. Lowther, who only took over the position a few months ago, cautioned investors not to be overly optimistic in the coming quarters.“We do not expect to see a short-term change in the relatively restrained business climate that we see in many of IDC’s markets,” he said.

The firm intends on “developing and testing the detailed strategy” for each of its markets over the next two months, Mr. Lowther said.

The comments came after IDC reported less-than-encouraging results for the second quarter.

Revenues fell to $4.9 million in the three-month period ending July 31 from $6.3 million in the same time frame a year ago.

The firm’s net loss was $409,000, up from $305,000 last year.

IDC’s gross margin – the percentage of profit it gets for each dollar it spends producing goods or services – dropped to 45 per cent from 47 in the 2012 calendar year.

The company, in a press release, blamed the smaller gross margin on a “lower volume of sales to cover current manufacturing-related overhead costs.”

Company officials pointed to a year-over-year drop in operating expenses of $0.6 million as one of the measures IDC took to offset the drop in revenue.

Mr. Lowther, in his call with investors, said the firm has yet to see much growth from its recently released technologies such as laser. This is partly due to the amount of time it takes to get these products sold and product development delays.

The company noticed particularly soft demand for its radio and data products in the first half of the year, he said. However he believes IDC will be able to take advantage of clients that are looking for upgrades in the near future.

Organizations: IDC, Digital Cinema, International Datacasting

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