Evertz Technologies Limited
TSX : ET

Evertz Technologies Limited

December 08, 2009 16:05 ET

Evertz Technologies Reports Results for the Second Quarter Ended October 31, 2009

BURLINGTON, ONTARIO--(Marketwire - Dec. 8, 2009) -

Attention Business/Financial Editors:

Evertz Technologies Limited (TSX:ET), a leading equipment provider to the television broadcast industry, today reported its results, ended
October 31, 2009, of its fiscal 2010 year.

Quarterly Highlights

- Sales were $73.0 million, a 20% decrease year-over-year for the quarter but an increase marginally from the prior quarter

- Gross investment in R&D increased by $1.4 million to $9.1 million, 18% higher than the prior year

- Net earnings were $17.5 million for the quarter as compared to $34.1 million a year ago but increased from the prior quarter

- Foreign exchange gain was $0.6 million for the quarter as compared to a gain of $5.2 million a year ago

- Fully-diluted earnings per share were $0.23 for the quarter as compared to $0.46 a year ago



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


Q2 '10 Q2 '09
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Sales $ 72,984 $ 91,264
Gross margin 42,354 56,042
Earnings from operations 24,940 46,142
Net income 17,512 34,051
Fully-diluted earnings per share $ 0.23 $ 0.46



Selected Financial Information
Consolidated Balance Sheet Data
(in '000 except share data)


Q2 '10 YE '09
--------- ---------
Cash and instruments held for trading $ 111,552 $ 114,020
Working capital 243,885 216,539
Total assets 321,923 316,446
Shareholders' equity 294,965 268,376


Sales

For the quarter ended October 31, 2009, sales were $73.0 million, a decrease of $18.3 million or 20% as compared to sales of $91.3 million for the quarter ended October 31, 2008. For the quarter, sales in the United States/Canada region decreased by $18.7 million or 30% when compared to the same quarter last year. The International region grew by $0.4 million or 1% for the quarter ended October 31, 2009 when compared to the same quarter last year.

Gross Margin

For the quarter ended October 31, 2009 gross margin was $42.4 million compared to $56.0 million in the same quarter last year. Gross margin percentage was approximately 58% as compared to 61% for the quarter ended October 31, 2008.

Earnings

For the quarter ended October 31, 2009 net earnings were $17.5 million as compared to $34.1 million in the corresponding period last year.

For the quarter ended October 31, 2009, earnings per share on a fully-diluted basis were $0.23 as compared to $0.46 in the same period in 2008.

Operating Expenses

For the quarter ended October 31, 2009 selling and administrative expenses increased by $1.4 million as compared to the prior year. Selling and administrative expenses represented approximately 12% of sales in the quarter ended October 31, 2009.

For the quarter ended October 31, 2009 research and development expenses rose by 18% to $9.1 million as compared to the corresponding period during fiscal 2009. Research and development expenses represented approximately 12% of sales for the quarter.

Liquidity and Capital Resources

The Company's working capital as at October 31, 2009 was $243.9 million as compared to $216.5 million on April 30, 2009.

Cash and instruments for trading were $111.6 million as at October 31, 2009 as compared to $114.0 million on April 30, 2009.

Cash provided by operations was $7.0 million for the quarter ended October 31, 2009 as compared to $21.6 million for the quarter ended October 31, 2008. Before taking into account the changes in non-cash working capital, the Company generated $22.6 million from operations for the quarter ended October 31, 2009 compared to $36.6 million for the same period last year.

For the quarter ended October 31, 2009, the Company used cash from financing activities of $5.7 million as a result of the payout of dividends.

Shipments and Backlog

Purchase order backlog at the end of November 2009 was in excess of $32 million and shipments during the month of November 2009 exceeded $21 million.

Dividend Declared

Evertz Board of Directors declared a dividend on December 08, 2009 of $0.08 per share. The dividend is payable to shareholders of record on January 13, 2010 and will be paid on or about January 22, 2010.



Consolidated Statements of Earnings
(Unaudited)

(in '000 except earnings per share and share data )

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Consolidated Statement of Earnings Data

Three month Six month
period ended period ended
October 31, October 31,
-------------------- ----------------------
2009 2008 2009 2008
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Sales $ 72,984 $ 91,264 $ 145,005 $ 159,025
Cost of goods sold 30,630 35,222 59,235 61,450
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Gross margin $ 42,354 $ 56,042 $ 85,770 $ 97,575
Gross margin % 58.0% 61.4% 59.1% 61.4%
Expenses
Selling and administrative 9,125 7,685 17,786 15,407
Research and development 9,076 7,668 16,341 13,862
Investment tax credits (2,014) (1,516) (4,025) (3,037)
Foreign exchange loss (gain) (642) (5,234) 3,471 (5,601)
Amortization of intangibles 402 401 803 730
Stock-based compensation 1,467 896 3,004 1,815
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17,414 9,900 37,380 23,176
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Earnings from operations $ 24,940 $ 46,142 $ 48,390 $ 74,399
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Interest and other income $ 438 $ 969 $ 775 $ 1,839
Non-controlling interest (140) (145) (231) (244)
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Earnings before income taxes $ 25,238 $ 46,966 $ 48,934 $ 75,994
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Net earnings $ 17,512 $ 34,051 $ 34,589 $ 55,458
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Net earnings per share:
Basic $ 0.24 $ 0.47 $ 0.47 $ 0.77
Fully-diluted $ 0.23 $ 0.46 $ 0.46 $ 0.75
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Dividends per share: $ 0.08 $ 0.08 $ 0.16 $ 0.16
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Consolidated Balance Sheet Data

As at As at
October 31, 2009 April 30, 2009
----------------------------------------------------------------------------
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Cash and instruments held for trading $ 111,552 $ 114,020
Inventory $ 95,569 $ 86,518
Working capital $ 243,885 $ 216,539
Total assets $ 321,923 $ 316,446
Shareholders' equity $ 294,965 $ 268,376

Number of common shares outstanding:
Basic 73,260,506 73,105,406
Fully-diluted 77,683,006 77,208,006

Weighted average number of shares
outstanding:
Basic 73,175,439 72,550,364
Fully-diluted (1) 74,749,423 74,269,089
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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 December 08, 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 January 08, 2010. The rebroadcast can be accessed at 416-915-1035 or Toll-Free 1-866-245-6755. The pass code for the rebroadcast is 983120.

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