Evertz Technologies Limited
TSX : ET

Evertz Technologies Limited

September 08, 2008 16:01 ET

Evertz Technologies Reports Results for the First Quarter Ended July 31, 2008

BURLINGTON, ONTARIO--(Marketwire - Sept. 8, 2008) -

Attention Business/Financial Editors:

Evertz Technologies Limited (TSX:ET), a leading equipment provider to the television broadcast industry, today reported its results, ended July 31, 2008, of its fiscal 2009 year.

Quarterly Highlights

- Sales were $67.8 million, a 4% decrease year-over-year for the quarter

- Gross investment in R&D increased by $2.1 million to $6.2 million, 50% higher than the prior year

- Net earnings were $21.4 million for the quarter as compared to $22.6 million a year ago

- Fully-diluted earnings per share were $0.29 for the year as compared to $0.30 a year ago



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

Q1 '09 Q1 '08
--------------------
Sales $ 67,761 $ 70,780
Gross Margin 41,533 42,104
Earnings from operations 28,158 32,028
Net Income 21,407 22,587
Fully-diluted earnings per share $ 0.29 $ 0.30


Selected Financial Information
Consolidated Balance Sheet Data as at Year End

Q1 '08 YE '07
--------------------
Cash and Short-Term Investments $ 78,242 $ 95,543
Working Capital 169,770 164,147
Total Assets 225,521 220,579
Shareholder's Equity 204,446 188,220


Sales

For the quarter ended July 31, 2008, sales were $67.8 million, a decrease of $3.0 million or 4% as compared to sales of $70.8 million for the quarter ended July 31, 2007. For the quarter the Canada/US region decreased by $4.1 million or 8% when compared to the same quarter last year. The International region grew by $1.0 million or 5% for the quarter ended July 31, 2008 when compared to the same quarter last year.

Gross Margin

For the quarter ended July 31, 2008 gross margin was $41.5 million compared to $42.1 million when compared to the same quarter last year. Gross margin percentage was approximately 61% as compared to 60% for the quarter ended July 31, 2007.

Earnings

For the quarter ended July 31, 2008 net earnings were $21.4 million as compared to $22.6 million in the corresponding period last year, a decrease of 5%.

For the quarter ended July 31, 2008 Earnings per share on a fully-diluted basis were $0.29 as compared to $0.30 in the same period in 2007.

Operating Expenses

For the quarter ended July 31, 2008 selling and administrative expenses increased by $1.5 million as compared to the prior year. Selling and Administrative expenses represented approximately 11% of sales in the quarter ended July 31, 2008.

For the quarter ended July 31, 2008 research and development expenses rose by 50% to $6.2 million as compared to the corresponding period during fiscal 2007. Research and Development expenses represented approximately 9% of sales for the quarter.

Liquidity and Capital Resources

The Company's working capital as at July 31, 2008 was $169.8 million as compared to $164.1 million on April 30, 2008.

Cash and Short-Term Investments were $78.2 million as at July 31, 2008 as compared $95.5 million at April 30, 2008.

Cash provided by operations was $0.8 million for the quarter ended July 31, 2008 as compared to $8.9 million at July 31, 2007. Before taking into account the changes in non-cash working Capital, the Company generated $22.6 million from operations for the quarter ended July 31, 2008 compared to $23.9 million for the same period last year.

For the quarter ended July 31, 2008 cash used in financing activities was $6.2 million as a result of the payment of a dividend.

Shipments and Backlog

Purchase order backlog at the end of August 2008 was in excess of $38 million and shipments during the month of August 2008 exceeded $29 million.

Dividend Declared

Evertz Board of Directors declared a dividend on September 8, 2008 of $0.08 per share. The dividend is payable to shareholders of record on October 15, 2008 and will be paid on or about October 24, 2008.



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

----------------------------------------------------------------------------
----------------------------------------------------------------------------
Consolidated Statement of Earnings Data Quarter Ended Quarter Ended
July 31, 2008 July 31, 2007
----------------------------------------------------------------------------
Sales $ 67,761 $ 70,780
Cost of goods sold 26,228 28,676
----------------------------------------------------------------------------
Gross margin $ 41,533 $ 42,104
Gross margin % 61.3% 59.5%
Expenses
Selling and administrative 7,722 6,259
Research and development 6,194 4,121
Research and development tax credits (1,521) (1,320)
Foreign exchange (gain) loss (367) 275
Amortization of intangibles 329 183
Stock-based compensation 919 460
Non-controlling interest 99 98
----------------------------------------------------------------------------
Total operating expenses $ 13,375 $ 10,076
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Earnings from operations $ 28,158 $ 32,028
Other income (expenses) 870 413
----------------------------------------------------------------------------
Earnings before income tax $ 29,028 $ 32,441
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net earnings $ 21,407 $ 22,587
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net earnings per share:
Basic $ 0.30 $ 0.31
Fully-diluted $ 0.29 $ 0.30
----------------------------------------------------------------------------
----------------------------------------------------------------------------



----------------------------------------------------------------------------
----------------------------------------------------------------------------
Consolidated Balance Sheet Data As at As at
July 31, 2008 April 30, 2008
----------------------------------------------------------------------------
Cash and short-term investments $ 78,242 $ 95,543
Inventory $ 65,253 $ 53,760
Working capital $ 169,770 $ 164,147
Total assets $ 225,521 $ 220,579
Shareholder's equity $ 204,446 $ 188,220

Number of common shares outstanding:
Basic 72,312,206 72,277,206
Fully-diluted 77,289,206 76,398,206

Weighted average number of shares
outstanding:
Basic 72,285,206 72,318,148
Fully-diluted 74,494,528 74,707,530
----------------------------------------------------------------------------
----------------------------------------------------------------------------


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 September 8, 2008 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 October 8, 2008. The rebroadcast can be accessed at 416-915-1035 or Toll-Free 1-866-245-6755. The pass code for the rebroadcast is 80172.

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
    Email: ir@evertz.com