Evertz Technologies Limited
TSX : ET

Evertz Technologies Limited

June 13, 2017 15:08 ET

Evertz Technologies reports Record Revenue for Fiscal 2017

BURLINGTON, ONTARIO--(Marketwired - June 13, 2017) -

Attention Business/Financial Editors:

Evertz Technologies Limited (TSX:ET), the leader in Software Defined Video Network ("SDVN") technology, today reported its results for the fourth quarter and year ended April 30, 2017.

Fiscal 2017 Highlights

  • Record annual revenue of $384.4 million
  • US/Canada revenue up 6% to $229.1 million for the year
  • Net earnings of $69.8 million for the year
  • Fully diluted earnings per share of $0.92 for the year
  • Dividends paid of $137.5 million including a special dividend of $83.1 million

Fourth Quarter 2017 Highlights

  • Record quarterly revenue of $106.7 million, up 11% from the prior year
  • US/Canada revenue up 13% to $57.9 million for the quarter
  • International revenue up 8% to $48.9 million for the quarter
  • Net earnings of $20.7 million for the quarter
  • Fully diluted earnings per share of $0.27 for the quarter
Selected Financial Information
Consolidated Statement of Earnings Data
(in thousands of dollars, except earnings per share and share data)
Q4'17 Q4'16 YE'17 YE'16
Revenue $ 106,734 $ 96,367 $ 384,432 $ 381,550
Gross margin 60,044 55,024 218,144 217,378
Earnings from operations 27,513 11,311 92,608 96,433
Net earnings 20,685 8,279 69,773 70,886
Fully-diluted earnings per share $ 0.27 $ 0.11 $ 0.92 $ 0.94
Fully-diluted shares 75,825,621 74,725,908 75,374,204 74,843,493
Selected Financial Information
Consolidated Balance Sheet Data
(in thousands of dollars)
YE'17 YE'16
Cash and cash equivalents $ 54,274 $ 123,102
Working capital 264,586 314,912
Total assets 410,568 448,314
Shareholders' equity 317,830 366,205

Revenue

For the quarter ended April 30, 2017, revenues were $106.7 million, up 11% or $10.3 million as compared to revenues of $96.4 million for the quarter ended April 30, 2016. For the quarter, revenues in the United States/Canada region were $57.9 million, up 13% or $6.7 million as compared to $51.2 million in the same quarter last year. The International region had revenues of $48.9 million, up 8% or $3.8 million as compared to $45.1 million in the same quarter last year.

For the year ended April 30, 2017, sales were $384.4 million, an increase of $2.8 million or 1% as compared to sales of $381.6 million for the prior year. For the year, revenues in the United States/Canada region were $229.1 million as compared to $216.0 million in the prior year. The International region had revenues of $155.4 million compared to $165.5 million in the prior year.

Gross Margin

For the quarter ended April 30, 2017 gross margin was $60.0 million as compared to $55.0 million in the same quarter last year. Gross margin percentage was approximately 56.3% as compared to 57.1% in the quarter ended April 30, 2016.

For the year ended April 30, 2017 gross margin was $218.1 million as compared to $217.4 million for the year ended April 30, 2016. Gross margin percentage was approximately 56.7% for the year ended April 30, 2017 as compared to 57.0% for the prior year.

Earnings

For the quarter ended April 30, 2017 net earnings were $20.7 million as compared to $8.3 million in the corresponding period last year.

For the year ended April 30, 2017 net earnings were $69.8 million as compared to $70.9 million in the corresponding period last year.

For the quarter ended April 30, 2017, earnings per share on a fully-diluted basis were $0.27 as compared to $0.11 in the corresponding period last year.

For the year ended April 30, 2017, earnings per share on a fully-diluted basis were $0.92 as compared to $0.94 in the same period in 2016.

Operating Expenses

For the quarter ended April 30, 2017 selling and administrative expenses were $16.4 million as compared to $16.2 million for the quarter ended April 30, 2016.

For the year ended April 30, 2017, selling and administrative expenses were $62.1 million as compared to $61.0 million for the year ended April 30, 2016.

For the quarter ended April 30, 2017 gross research and development expenses were $19.9 million as compared to $17.3 million for the quarter ended April 30, 2016.

For the year ended April 30, 2017 gross research and development expenses were $73.7 million as compared to $66.9 million for the year ended April 30, 2016.

Liquidity and Capital Resources

The Company's working capital as at April 30, 2017 was $264.6 million as compared to $314.9 million on April 30, 2016.

Cash and cash equivalents were $54.3 million as at April 30, 2017 as compared to $123.1 million on April 30, 2016.

Cash generated from operations was $6.0 million for the quarter ended April 30, 2017 as compared to cash generated of $10.1 million for the quarter ended April 30, 2016. Before taking into account taxes and the changes in non-cash working capital and current taxes, the Company generated $23.8 million from operations for the quarter ended April 30, 2017 compared to $12.7 million for the same period last year.

Cash provided by operations was $64.5 million for the 2017 fiscal year as compared to cash provided by operations of $91.2 million for the 2016 fiscal year. Before taking into account taxes and the changes in non-cash working capital, the Company generated $81.1 million from operations for fiscal 2017 as compared to $85.5 million for fiscal 2016.

For the quarter, the Company used $3.2 million in investing activities largely a result of purchases in capital assets.

For the year, the Company used $11.2 million in investing activities, largely a result of purchases of capital assets.

For the quarter ended, the Company used cash in financing activities of $13.3 million which was principally a result of the payment of dividends of $13.6 million.

For the year ended April 30, 2017, the Company used cash in financing activities of $119.0 million which was principally a result of the payment of dividends of $137.5 million, including a special dividend of $83.1 million, partially offset by the issuance of Capital Stock pursuant to the Company's Stock Option Plan of $18.7 million.

Shipments and Backlog

At the end of May 2017, purchase order backlog was in excess of $93 million and shipments during the month of May 2017 were $36 million.

Dividend Declared

Evertz Board of Directors declared a regular quarterly dividend on June 13, 2017 of $0.18 per share.

The dividend is payable to shareholders of record on June 23, 2017 and will be paid on or about June 30, 2017.

Selected Consolidated Financial Information
(in thousands of dollars, except earnings per share and percentages)
Three month period
ended
April 30,
Twelve month period
ended
April 30,
2017 2016 2017 2016
Revenue $ 106,734 $ 96,367 $ 384,432 $ 381,550
Cost of goods sold 46,690 41,343 166,288 164,172
Gross margin 60,044 55,024 218,144 217,378
Expenses
Selling and administrative 16,431 16,236 62,135 60,986
General 2,417 1,460 8,951 6,200
Research and development 19,942 17,284 73,699 66,892
Investment tax credits (2,149 ) (3,081 ) (9,362 ) (10,495 )
Foreign exchange (gain) loss (4,110 ) 11,814 (9,887 ) (2,638 )
32,531 43,713 125,536 120,945
Earnings before undernoted 27,513 11,311 92,608 96,433
Finance income (117 ) 317 1,321 772
Finance costs (46 ) (84 ) (242 ) (534 )
Other income and expenses 47 (237 ) (141 ) 124
Earnings before income taxes 27,397 11,307 93,546 96,795
Provision for (recovery of) income taxes
Current 6,969 1,270 25,160 24,582
Deferred (257 ) 1,758 (1,387 ) 1,327
6,712 3,028 23,773 25,909
Net earnings for the period $ 20,685 $ 8,279 $ 69,773 $ 70,886
Net earnings attributable to non-controlling interest 138 182 613 667
Net earnings attributable to shareholders 20,547 $ 8,097 69,160 70,219
Net earnings for the period $ 20,685 $ 8,279 $ 69,773 $ 70,886
Earnings per share
Basic $ 0.27 $ 0.11 $ 0.92 $ 0.94
Diluted $ 0.27 $ 0.11 $ 0.92 $ 0.94
April 30,
2017
April 30,
2016
April 30,
2015
Assets
Current assets
Cash and cash equivalents $ 54,274 $ 123,102 $ 100,681
Trade and other receivables 111,664 97,435 95,403
Prepaid expenses 4,075 6,307 8,426
Inventories 178,208 155,957 154,259
Income tax receivable - 4,256 -
348,221 387,057 358,769
Property, Plant and Equipment 44,152 42,971 49,080
Goodwill 18,195 18,286 18,313
$ 410,568 $ 448,314 $ 426,162
Liabilities
Current liabilities
Trade and other payables $ 50,321 $ 49,815 $ 44,265
Provisions 3,817 3,563 2,229
Deferred revenue 28,272 18,529 15,427
Current portion of long term debt 280 238 254
Income tax payable 945 - 1,699
83,635 72,145 63,874
Long term debt 733 888 996
Deferred taxes 4,427 5,545 4,432
88,795 78,578 69,302
Equity
Capital stock 124,695 100,483 95,708
Share based payment reserve 10,091 13,835 12,418
Accumulated other comprehensive income 747 1,567 3,077
Retained earnings 182,297 250,320 242,268
183,044 251,887 245,345
Total equity attributable to shareholders 317,830 366,205 353,471
Non-controlling interest 3,943 3,531 3,389
321,773 369,736 356,860
$ 410,568 $ 448,314 $ 426,162

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 June 13, 2017 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 647-793-2625 or toll-free (North America) 1-888-297-0356, access code 8673665.

For those unable to listen to the live call, a rebroadcast will also be available until July 13, 2017. The rebroadcast can be accessed at 647-436-0148 or toll-free 1-888-203-1112. The pass code for the rebroadcast is 8673665.

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 and ultra-high definition television ("HDTV" and "UHD") 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