Evertz Technologies Limited
TSX : ET

Evertz Technologies Limited

December 02, 2015 16:00 ET

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.

Contact Information

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