Evertz Technologies Limited
TSX : ET

Evertz Technologies Limited

June 17, 2009 16:30 ET

Evertz Technologies Reports Results for the Fourth Quarter and Fiscal Year Ended April 30, 2009

BURLINGTON, ONTARIO--(Marketwire - June 17, 2009) -

Attention Business/Financial Editors:

Evertz Technologies Limited (TSX:ET), a leading equipment provider to the television broadcast industry, today reported its results, ended April 30, 2009, of its fiscal 2009 year.

Annual Highlights

- Sales were $315.9 million, a 16% increase year-over-year

- Gross investment in R&D increased by $10.1 million to $28.7 million, 54% higher than the prior year

- Net earnings were $100.7 million for the year as compared to $87.3 million a year ago

- Fully-diluted earnings per share were $1.36 for the year as compared to $1.17 a year ago



Selected Financial Information
Consolidated Statement of Earnings Data
(in '000)

Q4'09 YE'09 Q4'08 YE'08
-------- --------- -------- ---------
Sales $ 77,296 $ 315,905 $ 62,899 $ 272,505
Gross Margin 47,654 194,019 38,081 161,641
Earnings from operations 29,709 137,258 26,795 118,806
Net Income 20,763 100,717 21,096 87,294
Fully-diluted earnings per share $ 0.28 $ 1.36 $ 0.28 $ 1.17



Selected Financial Information
Consolidated Balance Sheet Data as at Year End
(in '000 except share data)

YE'09 YE'08
--------- ---------
Cash and Short-Term Investments $ 114,020 $ 95,543
Working Capital 216,539 164,147
Total Assets 316,446 220,579
Shareholders' Equity 268,376 188,220


Sales

For the quarter ended April 30, 2009, sales were $77.3 million, an increase of $14.4 million or 23% as compared to sales of $62.9 million for the quarter ended April 30, 2008. For the quarter, sales in the United States/Canada region increased by $9.7 million or 25% when compared to the same quarter last year. The International region grew by $4.7 million or 20% for the quarter ended April 30, 2009 when compared to the same quarter last year.

For the year ended April 30, 2009, sales were $315.9 million, an increase of $43.4 million or 16% as compared to sales of $272.5 million for the prior year. The United States/Canada region grew by $26.0 million or 14% when compared to the prior year and the International region grew by $17.4 million or 20% when compared to the prior year.

Gross Margin

For the quarter ended April 30, 2009 gross margin was $47.7 million compared to $38.1 million in the same quarter last year. Gross margin percentage was approximately 62% as compared to 61% for the quarter ended April 30, 2008.

For the year ended April 30, 2009 gross margin was $194.0 million compared to $161.6 million when compared to the year ended April 30, 2008. Gross margin percentage was approximately 61% for the year ended April 30, 2009 as compared to 59% for the prior year.

Earnings

For the quarter ended April 30, 2009 net earnings were $20.8 million as compared to $21.1 million in the corresponding period last year.

For the year ended April 30, 2009 net earnings were $100.7 million as compared to $87.3 in the corresponding period last year, an increase of 15%.

For the quarter ended April 30, 2009 Earnings per share on a fully-diluted basis were $0.28 as compared to $0.28 in the same period in 2008.

For the year ended April 30, 2009 Earnings per share on a fully-diluted basis were $1.36 as compared to $1.17 in the same period in 2008.

Operating Expenses

For the quarter ended April 30, 2009 selling and administrative expenses increased by $4.4 million as compared to the prior year. Selling and administrative expenses represented approximately 15% of sales in the quarter ended April 30, 2009.

For the year ended April 30, 2009 selling and administrative expenses increased by $9.2 million as compared to the year ended April 30, 2008. Selling and administrative expenses represented approximately 11% of sales in fiscal 2009.

For the quarter ended April 30, 2009 research and development expenses rose by 21% to $7.0 million as compared to the corresponding period during fiscal 2008. Research and development expenses represented approximately 9% of sales for the quarter.

For the year ended April 30, 2009 research and development expenses rose by 54% to $28.7 million as compared to the prior year. Research and development expenses represented approximately 9% of sales.

Liquidity and Capital Resources

The Company's working capital as at April 30, 2009 was $216.5 million as compared to $164.1 million on April 30, 2008.

Cash and Short-Term Investments were $114.0 million as at April 30, 2009 as compared $95.5 million at April 30, 2008.

Cash provided by operations was $29.6 million for the quarter ended April 30, 2009 as compared to $19.5 million for the quarter ended April 30, 2008. Before taking into account the changes in non-cash working capital, the Company generated $26.9 million from operations for the quarter ended April 30, 2009 compared to $23.5 million for the same period last year.

Cash provided by operations was $90.1 million for the 2009 fiscal year as compared to cash provided by operations of $82.5 million in the 2008 fiscal year. Before taking into account changes in non-cash working capital, the Company generated $113.9 million from operations for fiscal 2009 as compared to $95.3 million for fiscal 2008.

The Company spent $4.1 million on the purchase of equipment for the quarter ended April 30, 2009 and $14.9 million for the year ended April 30, 2009.

The Company spent $14.1 million on business acquisitions for the quarter ended April 30, 2009 and $25.3 million for the year ended April 30, 2009.

For the quarter ended April 30, 2009, the Company used cash from financing activities of $13.2 million as a result of the payout of dividends of $5.8 million and the repayment of debt of $7.4 million.

For the year ended April 30, 2009, the Company used cash from financing activities of $30.7 million as a result of payment of dividends of $23.7 million, repayment of debt of $7.4 million, purchase of shares pursuant to NCIB of $1.9 million offset by issuance of share capital of $2.3 million.

Shipments and Backlog

Purchase order backlog at the end of May 2009 was in excess of $33 million and shipments during the month of May 2009 exceeded $21 million.

Dividend Declared

Evertz Board of Directors declared a dividend on June 17, 2009 of $0.08 per share. The dividend is payable to shareholders of record on July 15, 2009 and will be paid on or about July 24, 2009.



Selected Consolidated Financial Information
(in '000 except earnings per share and share data)

------------------------------------------------------------------
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April 30, April 30,
2009 2008
-------------------------

Assets

Current assets
Cash $ 81,376 $ 10,195
Short-term investments 32,644 85,348
Accounts receivable 53,144 40,578
Inventories 86,518 53,760
Future income taxes 2,197 2,762
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$ 255,879 $ 192,643

Capital assets $ 43,145 $ 24,082
Future income taxes - 2,119
Intangibles 3,063 1,096
Goodwill 14,359 639
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$ 316,446 $ 220,579
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Liabilities

Current liabilities
Accounts payable and accrued
liabilities $ 32,529 $ 17,560
Income taxes payable 5,303 10,936
Current portion of long term debt 1,508 -
------------------------------------------------------------------
$ 39,340 $ 28,496

Long term debt $ 3,519 $ -
Deferred credit - 2,281
Future income taxes 3,282 612
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$ 46,141 $ 31,389

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Non-controlling interest 1,929 970
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Shareholders' Equity

Capital stock $ 48,261 $ 45,687
Contributed surplus 6,769 3,384

Accumulated other comprehensive loss (1,403) (381)
Retained earnings 214,749 139,530
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$ 213,346 $ 139,149

268,376 188,220
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$ 316,446 $ 220,579
------------------------------------------------------------------
------------------------------------------------------------------



Consolidated Statements of Retained Earnings
(Unaudited)

Three-month and Twelve-month periods ended April 30, 2009 and 2008
(in '000 except earnings per share and share data)

----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three-month periods Twelve-month periods
ended April 30, ended April 30,
---------------------- ----------------------
2009 2008 2009 2008
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Balance, beginning of period $ 199,833 $ 124,619 $ 139,530 $ 65,658
Net earnings 20,763 21,096 100,717 87,294
Shares repurchased pursuant to
NCIB - (2,565) (1,789) (2,565)
Dividends paid (5,847) (3,620) (23,709) (10,857)
----------------------------------------------------------------------------
Balance, end of period $ 214,749 $ 139,530 $ 214,749 $ 139,530
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Consolidated Statements of Comprehensive Income
(Unaudited)

Three-month and Twelve-month periods ended April 30, 2009 and 2008
(in '000 except earnings per share and share data)

----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three-month periods Twelve-month periods
ended April 30, ended April 30,
---------------------- ----------------------
2009 2008 2009 2008
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net earnings for the period $ 20,763 $ 21,096 $ 100,717 $ 87,294
Other comprehensive income
(loss):
Translation of self-sustaining
operations (39) 27 (1,022) (617)
----------------------------------------------------------------------------
Balance, end of period $ 20,724 $ 21,123 $ 99,695 $ 86,677
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Consolidated Statements of Earnings
(Unaudited)

Three-month and Twelve-month periods ended April 30, 2009 and 2008
(in '000 except earnings per share and share data)

-------------------------------------------------------------------------
-------------------------------------------------------------------------
Three-month periods Twelve-month periods
ended April 30, ended April 30,
--------------------- ----------------------
2009 2008 2009 2008
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Sales $ 77,296 $ 62,899 $ 315,905 $ 272,505
Cost of goods sold 29,642 24,818 121,886 110,864
-------------------------------------------------------------------------
Gross margin 47,654 38,081 194,019 161,641
-------------------------------------------------------------------------

Expenses
Selling and administrative 11,858 7,450 35,907 26,681
Research and development 6,999 5,769 28,719 18,629
Investment tax credits (3,738) (3,016) (8,377) (7,643)
Foreign exchange loss (gain) 1,286 10 (4,802) 1,923
Amortization of intangibles 402 182 1,533 731
Stock-based compensation 1,138 891 3,781 2,514
-------------------------------------------------------------------------
17,945 11,286 56,761 42,835
-------------------------------------------------------------------------
Earnings from operations 29,709 26,795 137,258 118,806

Interest and other income 324 1,213 2,889 2,974
Non-controlling interest (118) (103) (523) (464)
-------------------------------------------------------------------------
Earnings before income taxes 29,915 27,905 139,624 121,316
-------------------------------------------------------------------------

Provision for income taxes
Current 6,936 5,559 35,613 30,872
Future 2,216 1,250 3,294 3,150
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9,152 6,809 38,907 34,022
-------------------------------------------------------------------------

Net earnings for the period 20,763 21,096 100,717 87,294
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Earnings per share
Basic $ 0.28 $ 0.29 $ 1.39 $ 1.21
Diluted $ 0.28 $ 0.28 $ 1.36 $ 1.17
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-------------------------------------------------------------------------



Consolidated Statements of Cash Flows
(Unaudited)

Three-month and Twelve-month periods ended April 30, 2009 and 2008
(in '000 except earnings per share and share data)

----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three-month periods Twelve-month periods
ended April 30, ended April 30,
---------------------- ----------------------
2009 2008 2009 2008
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating activities
Net earnings $ 20,763 $ 21,096 $ 100,717 $ 87,294
Add: Items not involving cash
Amortization of equipment 2,305 1,271 6,316 4,569
Amortization of intangibles 402 182 1,533 731
Amortization of deferred
credit - (1,015) (2,281) (3,084)
Non-controlling interest 118 103 523 464
Stock-based compensation 1,138 891 3,781 2,514
Loss/(Gain) on disposal of
capital assets 3 (298) 3 (298)
Future income taxes 2,216 1,250 3,294 3,150
----------------------------------------------------------------------------
26,945 23,480 113,886 95,340
Changes in non-cash working
capital items 2,692 (3,999) (23,821) (12,798)
----------------------------------------------------------------------------
Cash provided by operating
activities 29,637 19,481 90,065 82,542
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Investing activities
Acquisition of short-term
investments 59 (17,109) (30,796) (90,810)
Proceeds from sale of
short-term investments 9,000 10,500 83,500 39,000
Acquisition of capital assets (4,068) (591) (14,862) (8,337)
Proceeds from disposal of
capital assets 23 586 23 586
Business acquisitions net of
cash acquired (14,149) - (25,274) -
----------------------------------------------------------------------------
Cash provided by (used) in
investing activities (9,135) (6,614) 12,591 (59,561)
----------------------------------------------------------------------------

Financing activities
Repayment of debt (7,359) (3,620) (7,359) -
Dividends paid (5,847) - (23,709) (10,857)
Capital stock issued 38 (2,670) 2,264 112
Capital stock repurchased
pursuant to NCIB - - (1,875) (2,670)
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Cash used in financing
activities (13,168) (6,290) (30,679) (13,415)
----------------------------------------------------------------------------

Effect of exchange rates on
cash $ (97) $ 135 $ (796) $ (377)
----------------------------------------------------------------------------

Increase in cash and cash
equivalents 7,237 6,712 71,181 9,189
Cash beginning of period 74,139 3,483 10,195 1,006
----------------------------------------------------------------------------
Cash end of period $ 81,376 $ 10,195 $ 81,376 $ 10,195
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Forward-Looking Statements

The report contains forward-looking statements reflecting Evertz's objectives, estimates and expectations. Such forward looking statements use words such as "may", "will", "expect", "believe", "anticipate", "plan", "intend", "project", "continue" and other similar terminology of a forward-looking nature or negatives of those terms.

Although management of the Company believes that the expectations reflected in such forward-looking statements are reasonable, all forward-looking statements address matters that involve known and unknown risks, uncertainties and other factors. Accordingly, there are or will be a number of significant factors which could cause the Company's actual results, performance or achievements, or industry results to be materially different from any future results performance or achievements expressed or implied by such forward-looking statements.

Conference Call

The Company will hold a conference call with financial analysts to discuss the results on June 17, 2009 at 5:00 p.m. (EDT). Media and other interested parties are invited to join the conference call in listen-only mode. The conference call may be accessed by dialing 416-849-6166 or Toll-Free (North America) 1-866-250-6267.

For those unable to listen to the live call, a rebroadcast will also be available until July 17, 2009. The rebroadcast can be accessed at 416-915-1035 or Toll-Free 1-866-245-6755. The pass code for the rebroadcast is 494196.

About Evertz

Evertz Technologies Limited (TSX:ET) designs, manufactures and markets video and audio infrastructure equipment for the production, post production, broadcast and internet protocol television ("IPTV") industry. The Company's solutions are purchased by content creators, broadcasters, specialty channels and television service providers to support their increasingly complex multi-channel digital and high definition television ("HDTV") broadcast environments and by telecommunications companies to roll-out IPTV. The Company's products allow its customers to generate additional revenue while reducing costs through the more efficient signal routing, distribution, monitoring and management of content as well as the automation of previously manual processes.

Contact Information

  • Evertz Technologies Limited
    Anthony Gridley
    Chief Financial Officer
    (905) 335-7580
    ir@evertz.com