Evertz Technologies Limited
TSX : ET

Evertz Technologies Limited

September 06, 2011 16:00 ET

Evertz Technologies Reports Results for the First Quarter Ended July 31, 2011

BURLINGTON, ONTARIO--(Marketwire - Sept. 6, 2011) -

Attention Business/Financial Editors:

Evertz Technologies Limited (TSX:ET), a leading equipment provider to the television broadcast industry, today reported its results, for the first quarter ended July 31, 2011, of its fiscal 2012 year.

Quarterly Highlights

  • Revenues were $75.1 million with the US/Canada region up approximately 6% year-over-year
  • Net earnings were $17.6 million for the quarter
  • Gross investment in R&D was $10.3 million
  • Fully-diluted earnings per share were $0.23 for the quarter
  • Purchased and cancelled 1,546,400 shares pursuant to a NCIB
Selected Financial Information
Consolidated Statement of Earnings Data
(in thousands of dollars, except per share amounts)
Q1 ' 12 Q1 '11
Revenue $ 75,128 $ 73,816
Gross margin 42,847 42,998
Earnings from operations 23,462 27,942
Net earnings attributable to shareholders 17,527 20,408
Fully-diluted earnings per share $ 0.23 $ 0.28
Selected Financial Information
Consolidated Balance Sheet Data
(in thousands of dollars)
Q1 '12 YE ' 11
Cash and instruments held for trading $ 179,985 $ 192,025
Working capital 320,370 326,029
Total assets 408,483 410,511
Shareholders' equity 366,638 372,209

Revenue

For the quarter ended July 31, 2011, revenues were $75.1 million, an increase of $1.3 million or 2% as compared to revenues of $73.8 million for the quarter ended July 31, 2010. For the quarter, revenues in the United States/Canada region increased by $2.7 million or 6% when compared to the same quarter last year. The International region declined by $1.4 million or 4% for the quarter ended July 31, 2011 when compared to the same quarter last year.

Gross Margin

For the quarter ended July 31, 2011 gross margin was $42.9 million compared to $43.0 million in the same quarter last year. Gross margin percentage was approximately 57% compared to 58% for the quarter ended July 31, 2010.

Earnings

For the quarter ended July 31, 2011 net earnings were $17.6 million as compared to $20.6 million in the corresponding period last year.

For the quarter ended July 31, 2011, earnings per share on a fully-diluted basis were $0.23 as compared to $0.28 in the same period in 2010.

Operating Expenses

For the quarter ended July 31, 2011 selling and administrative expenses were $10.4 million compared to $8.2 million for the quarter ended July 31, 2010. Selling and administrative expenses represented approximately 14% of revenue in the quarter ended July 31, 2011.

For the quarter ended July 31, 2011 gross research and development expenses increased by $2.3 million or 29% as compared to the corresponding period in 2010. Gross research and development expenses represented approximately 14% of revenue for the quarter compared to 11% for the same period last year.

Liquidity and Capital Resources

The Company's working capital as at July 31, 2011 was $320.4 million as compared to $326.0 million on April 30, 2010.

Cash and instruments held for trading were $180.0 million as at July 31, 2011 as compared to $192.0 million on April 30, 2010.

Cash provided by operations was $12.6 million for the quarter ended July 31, 2011 as compared to $11.8 million for the quarter ended July 31, 2010. Before taking into account the changes in non-cash working capital, the Company generated $19.2 million from operations for the quarter ended July 31, 2011 compared to $21.6 million for the same period last year.

The Company spent $0.7 million on the purchase of equipment for the quarter ended July 31, 2011 and $0.8 million for the quarter ended July 31, 2010.

For the quarter ended July 31, 2011, the Company used cash from financing activities of $23.9 million which was principally a result of the payment of dividends of $9.4 million and the repurchase of common shares for $19.7 million.

IFRS Reporting Commenced First Quarter of 2012

Starting with the first quarter of 2012, Evertz is now reporting its financial results in accordance with International Financial Reporting Standards ("IFRS"). Previously, the Company prepared its financial results under Canadian Generally Accepted Accounting Standards ("Canadian GAAP"). The comparative financial information has been restated to reflect the adoption of IFRS. Further information on the transition from Canadian GAAP to IFRS is provided within the Company's Management's Discussion and Analysis and Note 16 to the Interim Condensed Consolidated Financial Statements.

Shipments and Backlog

Purchase order backlog at the end of August 2011 was in excess of $21 million and shipments during the month of August 2011 exceeded $29 million.

Dividend Declared

Evertz Board of Directors declared a dividend on September 06, 2011 of $0.12 per share.

The dividend is payable to shareholders of record on September 16, 2011 and will be paid on or about September 23, 2011.

Selected Consolidated Financial Information
(Unaudited)
(in thousands of dollars, except earnings per share and share data)
Three months ended Three months ended
July 31, 2011 July 31, 2010
Revenue $ 75,128 $ 73,816
Cost of goods sold 32,281 30,818
Gross margin 42,847 42,998
Expenses
Selling and administrative 10,382 8,194
General 1,309 1,432
Research and development 10,319 8,022
Investment tax credits (2,282 ) (2,005 )
Foreign exchange gain (343 ) (587 )
19,385 15,056
Earnings before undernoted 23,462 27,942
Finance income 423 238
Finance costs (51 ) (31 )
Other income and expenses 17 713
Earnings before income taxes 23,851 28,862
Provision for (recovery of) income taxes
Current 7,355 9,479
Deferred (1,128 ) (1,167 )
6,227 8,312
Net earnings for the period 17,624 20,550
Net earnings attributable to non-controlling interest 97 142
Net earnings attributable to shareholders 17,527 20,408
Net earnings for the period $ 17,624 $ 20,550
Earnings per share
Basic $ 0.23 $ 0.28
Diluted $ 0.23 $ 0.28
Consolidated Balance Sheet Data
As at As at
July 31, 2011 April 30, 2011
Cash and instruments held for trading $ 179,985 $ 192,025
Inventory $ 105,360 $ 106,422
Working capital $ 320,370 $ 326,029
Total assets $ 408,483 $ 410,511
Shareholders' equity $ 366,638 $ 372,209
Number of common shares outstanding:
Basic 73,513,486 74,470,606
Fully-diluted 77,036,136 78,577,206
Weighted average number of shares outstanding:
Basic 74,760,948 73,989,997
Fully-diluted 74,909,807 74,879,139

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 06, 2011 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 1-416- 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 06, 2011. The rebroadcast can be accessed at 1-416-915-1035 or toll-free 1-866-245-6755. The pass code for the rebroadcast is 122105.

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
    ir@evertz.com