Evertz Technologies Limited
TSX : ET

Evertz Technologies Limited

December 11, 2007 16:04 ET

Evertz Technologies Reports Quarterly End Results

BURLINGTON, ONTARIO--(Marketwire - Dec. 11, 2007) -

Attention Business/Financial Editors:

Evertz Technologies Limited (TSX:ET), a leading equipment provider to the television broadcast industry, today reported results for the second quarter, ended October 31, 2007, of its fiscal 2008 year.

Quarterly Highlights

- Sales were $74.4 million, 59% higher year-over-year for the quarter

- Gross investment in R&D increased by $0.8 million to $4.2 million, 22% year-over-year for the quarter

- Net earnings were $22.2 million in the quarter as compared to $14.2 million a year ago, an increase of 56 %

- Fully-diluted earnings per share were $0.30 for the quarter ended October 31, 2007 as compared to $0.19 a year ago



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

Q2'08 Q2'07
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Sales $ 74,437 $ 46,695
Gross Margin 43,747 28,401
Earnings from operations 31,050 19,937
Net Income 22,166 14,204
Fully-diluted earnings per share 0.30 0.19


Selected Financial Information
Consolidated Balance Sheet Data as at Year End

Q2'08 YE'07
---------- ----------
Cash and Short-Term Investments $ 65,063 $ 34,544
Working Capital 129,040 89,991
Total Assets 185,947 143,996
Shareholder's Equity 153,804 112,444


For the quarter ended October 31, 2007, sales were $74.4 million, an increase of $27.7 million or 59% as compared to sales of $46.7 million for quarter ended October 31, 2006. For the quarter the Canada/US region grew by $18.8 million or 57% when compared to the same quarter last year. The International region grew by $8.9 million or 66% when compared to the same quarter last year.

For the quarter ended October 31, 2007 gross margin was $43.7 million compared to $28.4 million when compared to the same quarter last year. Gross margin percentage was approximately 59% as compared to 61% for the quarter ended October 31, 2006.

For the quarter ended October 31, 2007 net earnings were $22.2 million as compared to $14.2 million in the corresponding period last year, an increase of 56%.

For the quarter ended October 31, 2007 Earnings per share on a fully-diluted basis were $0.30 as compared to $0.19 in the same period in 2006.

For the quarter ended October 31, 2007 selling and administrative expenses increased by $0.4 million as compared to the prior year. Selling and Administrative expenses represented approximately 8.1% of sales in the quarter ended October 31, 2007.

For the quarter ended October 31, 2007 research and development expenses increased by 22% to $4.2 million as compared to the corresponding period during fiscal 2007.

The Company's working capital as at October 31, 2007 was $129.0 million as compared to $90.0 million on April 30, 2007.

Cash and Short-Term Investments were $65.1 million as at October 31, 2007 as compared to cash and short-term investments of $34.5 million as at April 30, 2007.

Cash provided by operations was $30.9 million for the quarter ended October 31, 2007 as compared to $3.3 million in the quarter ended October 31, 2006. Before taking into account changes in non-cash working capital, the Company generated $23.9 million from operations for the quarter ended October 31, 2007 as compared to $15.7 million for the same period last year.

Cash used in investing activities was $23.6 million for the quarter ended October 31, 2007 as a result of the net acquisition of $20.5 million in short term investments, and $3.1 million in capital assets.

Purchase order backlog at the end of November 2007 was in excess of $20 million and shipments during the month of November 2007 exceeded $21 million.

Evertz Board of Directors declared a dividend on December 11, 2007 of $0.05 per share. The dividend is payable to shareholders of record on January 15, 2008 and will be paid on or about January 25, 2008.



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

---------------------------------------------------------------------------
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Three-months ended Six-months ended
October 31, October 31,
Consolidated Statement of
Earnings Data 2007 2006 2007 2006
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Sales $ 74,437 $ 46,695 $ 145,217 $ 91,290
Cost of goods sold 30,690 18,294 59,366 35,784
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Gross margin $ 43,747 $ 28,401 $ 85,851 $ 55,506
Gross margin % 58.8% 60.8% 59.1% 60.8%
Expenses
Selling and administrative 6,023 5,580 12,282 10,384
Research and development 4,169 3,423 8,290 6,488
Research and development tax
credits (1,086) (800) (2,406) (1,600)
Foreign exchange (gain) loss 2,791 (200) 3,066 (251)
Interest on long-term debt - 127 - 219
Stock-based compensation 491 188 951 377
Amortization of intangibles 183 183 366 366
Non-controlling interest 126 (37) 224 (37)
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Total operating expenses $ 12,697 $ 8,464 $ 22,773 $ 15,946
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Earnings from operations 31,050 19,937 63,078 39,560
Other income (expenses) 582 208 995 106
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Earnings before income tax $ 31,632 $ 20,145 $ 64,073 $ 39,666
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Net earnings 22,166 14,204 44,753 27,451
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Net earnings per share:
Basic $ 0.31 $ 0.20 $ 0.62 $ 0.39
Fully-diluted $ 0.30 $ 0.19 $ 0.60 $ 0.38
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As at As at
Consolidated Balance Sheet Data October 31, 2007 April 30, 2007
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Cash and short-term investments $ 65,063 $ 34,544
Inventory $ 49,741 $ 43,084
Working capital $ 129,040 $ 89,991
Total assets $ 185,947 $ 143,996
Shareholder's equity $ 153,804 $ 112,444

Number of common shares outstanding:
Basic 72,319,806 72,217,806
Fully-diluted 75,945,306 75,510,806

Weighted average number of shares
outstanding:
Basic 72,268,806 71,305,725
Fully-diluted 74,752,368 73,202,106
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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 11, 2007 at 5:00 p.m. (EST). 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 11, 2008. The rebroadcast can be accessed at 416-915-1035 or Toll-Free 1-866-245-6755. The pass code for the rebroadcast is 960518.

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
    Vice-President, Finance
    (905) 335-7580
    Email: ir@evertz.com