Evertz Technologies Reports Record Revenue of $101 Million for the Second Quarter Fiscal 2016

BURLINGTON, ONTARIO--(Marketwired - Dec. 2, 2015) -

Attention Business/Financial Editors:

Evertz Technologies Limited (TSX:ET), the leader in Software Defined Video Network ("SDVN") technology, today reported its results for the second quarter ended October 31, 2015.

Quarterly Highlights

• Revenue of $100.6 million, an increase of 21% year over year
• United States / Canada region revenue up 35% year over year to $61.2 million
• The increase was predominantly driven by the adoption of the Evertz newly released technologies and products
• International revenue of $39.3 million, up 5% year over year
• Net earnings of $19.6 million for the quarter, up 37%
• Fully diluted earnings per share of $0.26 for the quarter, up 37% year over year

Selected Financial Information
Consolidated Statement of Earnings Data
(in thousands of dollars, except per share amounts)
	Q2 '16		Q2 '15
Revenue	$	100,560	$	82,889
Gross Margin		57,534		46,565
Earnings from operations		26,715		19,528
Net earnings		19,619		14,343
Fully-diluted earnings per share	$	0.26	$	0.19
Selected Financial Information
Consolidated Balance Sheet Data
(in thousands of dollars)
	Q2 '16		YE '15
Cash and cash equivalents	$	97,491	$	100,681
Working capital		305,757		294,895
Total assets		431,751		426,162
Shareholders' equity		364,379		353,471

Revenue

For the quarter ended October 31, 2015, revenues were $100.6 million compared to revenues of $82.9 million for the quarter ended October 31, 2014. For the quarter, revenues in the United States/Canada region were $61.2 million compared to $45.4 million in the same quarter last year. The International region had revenues of $39.3 million compared to $37.5 million in the same quarter last year.

Gross Margin

For the quarter ended October 31, 2015 gross margin was $57.5 million compared to $46.6 million in the same quarter last year. Gross margin percentage was approximately 57.2% compared to 56.2% in the quarter ended October 31, 2014.

Earnings

For the quarter ended October 31, 2015 net earnings were $19.6 million, compared to $14.3 million in the corresponding period last year.

For the quarter ended October 31, 2015, earnings per share on a fully-diluted basis were $0.26 compared to $0.19 in the corresponding period last year.

Operating Expenses

For the quarter ended October 31, 2015 selling and administrative expenses were $14.8 million compared to $15.1 million for the quarter ended October 31, 2014.

For the quarter ended October 31, 2015 gross research and development expenses increased by $1.0 million or 7% as compared to the corresponding period in 2014. Gross research and development expenses represented approximately 16% of revenue for the quarter ended October 31, 2015.

Liquidity and Capital Resources

The Company's working capital as at October 31, 2015 was $305.8 million as compared to $294.9 million on April 30, 2015.

Cash and cash equivalents were $97.5 million as at October 31, 2015 as compared to $100.7 million on April 30, 2015.

Cash generated from operations was $23.7 million for the quarter ended October 31, 2015 as compared to cash used of $0.7 million for the quarter ended October 31, 2014. Before taking into account taxes and the changes in non-cash working capital and current taxes, the Company generated $22.2 million from operations for the quarter ended October 31, 2015 compared to $17.5 million for the same period last year.

For the quarter, the Company used $1.1 million in investing activities largely a result of purchases in capital assets.

For the quarter ended, the Company used cash in financing activities of $21.6 million which was principally a result of the payment of dividends of $14.0 million and the repurchase of Capital Stock costing $7.5 million.

Shipments and Backlog

At the end of November 2015, purchase order backlog was in excess of $66 million and shipments during the month of November 2015 were $30 million.

Dividend Declared

Evertz's Board of Directors declared a regular quarterly dividend on December 2, 2015 of $0.18 per share.

The dividend is payable to shareholders of record on December 11, 2015 and will be paid on or about December 18, 2015.

Selected Consolidated Financial Information

(in thousands of dollars, except earnings per share and percentages)

		Three month period ended						Six month period ended
		October 31,						October 31,
		2015			2014			2015			2014
Revenue		$	100,560		$	82,889		$	185,429		$	180,903
Cost of goods sold			43,026			36,324			80,066			78,517
Gross margin			57,534			46,565			105,363			102,386
Expenses
	Selling and administrative		14,827			15,103			29,629			28,502
	General		1,643			1,323			3,238			3,133
	Research and development		16,127			15,121			32,379			30,941
	Investment tax credits		(2,411	)		(2,387	)		(4,895	)		(4,853	)
	Foreign exchange loss (gain)		633			(2,123	)		(7,079	)		(1,380	)
			30,819			27,037			53,272			56,343
Earnings before undernoted			26,715			19,528			52,091			46,043
Finance income			180			201			338			394
Finance costs			(200	)		(76	)		(322	)		(143	)
Other income and expenses			188			(113	)		150			27
Earnings before income taxes			26,883			19,540			52,257			46,321
Provision for (recovery of) income taxes
	Current		7,995			5,249			15,968			14,560
	Deferred		(731	)		(52	)		(1,928	)		(2,288	)
			7,264			5,197			14,040			12,272
Net earnings for the period		$	19,619		$	14,343		$	38,217		$	34,049
Net earnings attributable to non-controlling interest			133			194			320			489
Net earnings attributable to shareholders			19,486			14,149			37,897			33,560
Net earnings for the period		$	19,619		$	14,343		$	38,217		$	34,049
Earnings per share
Basic		$	0.26		$	0.19		$	0.51		$	0.45
Diluted		$	0.26		$	0.19		$	0.51		$	0.45

Consolidated Balance Sheet Data		As at		As at
		October 31, 2015		April 30, 2015
Cash and cash equivalents		$	97,491	$	100,681
Inventory		$	160,524	$	154,259
Working capital		$	305,757	$	294,895
Total assets		$	431,751	$	426,162
Shareholders' equity		$	364,379	$	353,471
Number of common shares outstanding:
	Basic		74,238,646		74,459,346
	Fully-diluted		78,835,146		79,195,846
Weighted average number of shares outstanding:
	Basic		74,537,638		74,399,096
	Fully-diluted		74,952,462		75,033,398

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 2, 2015 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- 1967 or toll-free (North America) 1-866-253-4709.

For those unable to listen to the live call, a rebroadcast will also be available until January 2, 2016. The rebroadcast can be accessed at 416-915-1035 or toll-free 1-866-245-6755. The pass code for the rebroadcast is 299199.

About Evertz

Evertz Technologies Limited (TSX:ET) designs, manufactures and markets video and audio infrastructure solutions for the television, telecommunications and new-media industries. 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") and next generation high bandwidth low latency IP network environments and by telecommunications and new-media companies. 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.