Evertz Technologies Limited
TSX : ET

Evertz Technologies Limited

March 04, 2010 16:44 ET

Evertz Technologies Reports Results for the Third Quarter Ended January 31, 2010

BURLINGTON, ONTARIO--(Marketwire - March 4, 2010) -

Attention Business/Financial Editors:

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

Quarterly Highlights

  • Sales were $66.2 million with the International region up 25% year-over-year
  • Cash position increased to $121.2 million
  • Gross investment in R&D was $8.0 million
  • Net earnings of $11.7 million despite a foreign exchange loss of $1.6 million for the quarter
  • Fully-diluted earnings per share were $0.16 for the quarter as compared to $0.33 a year ago
Selected Financial Information            
Consolidated Statement of Earnings Data            
(in '000)            
    Q3 '10     Q3 '09  
Sales $ 66,165 $ 79,584  
Gross margin   37,778     48,790  
Earnings from operations   18,715     33,150  
Net income   11,660     24,496  
Fully-diluted earnings per share $ 0.16 $ 0.33  
 
Selected Financial Information            
Consolidated Balance Sheet Data            
(in '000 except share data)            
    Q3 '10     YE ' 09  
Cash and instruments held for trading $ 131,793 $ 114,020  
Working capital   252,802     216,539  
Total assets   334,816     316,446  
Shareholders' equity   302,312     268,376  

Sales

For the quarter ended January 31, 2010, sales were $66.2 million, a decrease of $13.4 million or 17% as compared to sales of $79.6 million for the quarter ended January 31, 2009. For the quarter, sales in the United States/Canada region were $33.6 million or 51% of the total. Sales in the International region grew by $6.4 million or 25% for the quarter ended January 31, 2010 when compared to the same quarter last year.

Gross Margin

For the quarter ended January 31, 2010 gross margin was $37.8 million compared to $48.8 million in the same quarter last year. Gross margin percentage was approximately 57% as compared to 61% for the quarter ended January 31, 2009.

Earnings

For the quarter ended January 31, 2010 net earnings were $11.7 million as compared to $24.5 million in the corresponding period last year.

For the quarter ended January 31, 2010, earnings per share on a fully-diluted basis were $0.16 as compared to $0.33 in the same period in 2009.

Operating Expenses

For the quarter ended January 31, 2010 selling and administrative expenses increased by $0.8 million as compared to the prior year. Selling and administrative expenses represented approximately 14% of sales in the quarter ended January 31, 2010.

For the quarter ended January 31, 2010 gross research and development expenses were $8.0 million similar to the corresponding period during fiscal 2009. Gross research and development expenses represented approximately 12% of sales for the quarter while net research and development expense is 9% of sales for the quarter.

Liquidity and Capital Resources

The Company's working capital as at January 31, 2010 was $252.8 million as compared to $216.5 million on April 30, 2009.

Cash and instruments for trading were $131.8 million as at January 31, 2010 as compared to $114.0 million on April 30, 2009.

Cash provided by operations was $28.6 million for the quarter ended January 31, 2010 as compared to $38.1 million for the quarter ended January 31, 2009. Before taking into account the changes in non-cash working capital, the Company generated $19.3 million from operations for the quarter ended January 31, 2010 compared to $27.7 million for the same period last year.

For the quarter ended January 31, 2010, the Company used cash from financing activities of $5.2 million as a result of the payout of dividends of $5.9 million.

Shipments and Backlog

Purchase order backlog at the end of February 2010 was in excess of $24 million and shipments during the month of February 2010 exceeded $24 million.

Dividend Declared

Evertz Board of Directors declared a dividend on March 04, 2010 of $0.08 per share. The dividend is payable to shareholders of record on April 14, 2010 and will be paid on or about April 23, 2010.

Consolidated Statements of Earnings                    
(Unaudited)                    
                     
(in '000 except earnings per share and share data)                    
Consolidated Statement of Earnings Data                    
    Three month period ended  January 31,     Nine month period ended January 31,  
         
    2010   2009     2010   2009  
Sales $ 66,165 $ 79,584 $ 211,170 $ 238,609  
Cost of goods sold   28,387   30,794     87,622   92,244  
Gross margin $ 37,778 $ 48,790 $ 123,548 $ 146,365  
Gross margin %   57.1%   61.3%     58.5%   61.3%  
Expenses                    
  Selling and administrative   9,459   8,642     27,245   24,049  
  Research and development   7,977   7,858     24,318   21,720  
  Investment tax credits   (2,063)   (1,602)     (6,088)   (4,639)  
  Foreign exchange loss (gain)   1,550   (487)     5,021   (6,088)  
  Amortization of intangibles   401   401     1,204   1,131  
  Stock-based compensation   1,739   828     4,743   2,643  
    19,063   15,640     56,443   38,816  
Earnings from operations $ 18,715 $ 33,150 $ 67,105 $ 107,549  
 
Interest and other income $ (1,530) $ 726 $ (755) $ 2,565  
Non-controlling interest   (92)   (161)     (323)   (405)  
Earnings before income taxes $ 17,093 $ 33,715 $ 66,027 $ 109,709  
Net earnings $ 11,660 $ 24,496 $ 46,249 $ 79,954  
Net earnings per share:                    
  Basic $ 0.16 $ 0.34 $ 0.63 $ 1.10  
  Fully-diluted $ 0.16 $ 0.33 $ 0.62 $ 1.07  
Dividends per share:                    
                         
Consolidated Balance Sheet Data                        
          As at       As at    
      January 31, 2010       April 30, 2009    
Cash and instruments held for trading       131,793     114,020    
Inventory       92,640     86,518    
Working capital       252,802     216,539    
Total assets       334,816     316,446    
Shareholders' equity       302,312     268,376    
 
Number of common shares outstanding:                        
Basic       73,574,906       73,105,406    
Fully-diluted       77,703,006       77,208,006    
 
Weighted average number of shares outstanding:                      
Basic       73,237,773       72,550,364    
Fully-diluted 1       74,693,851       74,269,089    

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 March 04, 2010 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 Toll-Free (North America) 1-800-829-9048.

For those unable to listen to the live call, a rebroadcast will also be available until April 04, 2010. The rebroadcast can be accessed Toll-Free 1-866-245-6755. The pass code for the rebroadcast is 322363.  

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