Evertz Technologies Limited
TSX : ET

Evertz Technologies Limited

December 06, 2011 16:00 ET

Evertz Technologies Reports Results for the Second Quarter Ended October 31, 2011

BURLINGTON, ONTARIO--(Marketwire - Dec. 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 second quarter ended October 31, 2011, of its fiscal 2012 year.

Quarterly Highlights

  • Revenues was $70.5 million
  • Net earnings were $16.1 million for the quarter
  • Gross investment in R&D was $10.0 million
  • Fully-diluted earnings per share were $0.22 for the quarter
  • Purchased and cancelled 305,200 shares pursuant to a NCIB
Selected Financial Information
Consolidated Statement of Earnings Data
(in thousands of dollars, except per share amounts)
Q2 '12 Q2 '11
Revenue $ 70,487 $ 82,327
Gross margin 40,376 47,639
Earnings from operations 21,983 31,124
Net earnings attributable to shareholders 15,996 20,734
Fully-diluted earnings per share $ 0.22 $ 0.28
Selected Financial Information
Consolidated Balance Sheet Data
(in thousands of dollars)
Q2 '12 YE ' 11
Cash and instruments held for trading $ 186,316 $ 192,025
Working capital 323,625 326,029
Total assets 408,362 410,511
Shareholders' equity 371,500 372,209

Revenue

For the quarter ended October 31, 2011, revenues were $70.5 million as compared to revenues of $82.3 million for the quarter ended October 31, 2010. For the quarter, revenues in the United States/Canada region were $35.9 million. The International region had revenues of $34.6 million.

Gross Margin

For the quarter ended October 31, 2011 gross margin was $40.4 million compared to $47.6 million in the same quarter last year. Gross margin percentage was approximately 57.3% compared to 57.9% for the quarter ended October 31, 2010.

Earnings

For the quarter ended October 31, 2011 net earnings were $16.1 million as compared to $20.9 million in the corresponding period last year.

For the quarter ended October 31, 2011, earnings per share on a fully-diluted basis were $0.22 as compared to $0.28 in the same period in 2010.

Operating Expenses

For the quarter October 31, 2011 selling and administrative expenses were $11.7 million compared to $9.0 million for the quarter ended October 31, 2010. Selling and administrative expenses represented approximately 16.7% of revenue in the quarter ended October 31, 2011.

For the quarter ended October 31, 2011 gross research and development expenses increased by $1.8 million or 22.1% as compared to the corresponding period in 2010. Gross research and development expenses represented approximately 14.2% of revenue for the quarter compared to 10.0% for the same period last year.

Liquidity and Capital Resources

The Company's working capital as at October 31, 2011 was $323.6 million as compared to $326.0 million on April 30, 2011.

Cash and instruments held for trading were $186.3 million as at October 31, 2011 as compared to $192.0 million on April 30, 2011.

Cash provided by operations was $22.3 million for the quarter ended October 31, 2011 as compared to $9.5 million for the quarter ended October 31, 2010. Before taking into account the changes in non-cash working capital, the Company generated $19.0 million from operations for the quarter ended October 31, 2011 compared to $27.1 million for the same period last year.

The Company spent $3.4 million on the purchase of equipment for the quarter ended October 31, 2011 and compared to $0.9 million for the quarter ended October 31, 2010.

For the quarter ended October 31, 2011, the Company used cash from financing activities of $12.5 million which was principally a result of the payment of dividends of $8.8 million and the repurchase of common shares for $3.7 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 15 to the Interim Condensed Consolidated Financial Statements.

Shipments and Backlog

Purchase order backlog at the end of November 2011 was in excess of $39 million and shipments during the month of November 2011 exceeded $20 million.

Dividend Declared

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

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

Selected Consolidated Financial Information
(Unaudited)
(in thousands of dollars, except earnings per share and share data)
Three month period ended Six month period ended
October 31, October 31,
2011 2010 2011 2010
Revenue $ 70,487 $ 82,327 $ 145,615 $ 156,143
Cost of goods sold 30,111 34,688 62,392 65,506
Gross margin 40,376 47,639 83,223 90,637
Expenses
Selling and administrative 11,739 9,015 22,121 17,209
General 1,789 1,511 3,098 2,943
Research and development 10,041 8,221 20,360 16,243
Investment tax credits (2,454 ) (1,876 ) (4,736 ) (3,881 )
Foreign exchange gain (2,722 ) (356 ) (3,065 ) (943 )
18,393 16,515 37,778 31,571
Earnings before undernoted 21,983 31,124 45,445 59,066
Finance income 453 291 876 529
Finance costs (46 ) (46 ) (97 ) (77 )
Other income and expenses (242 ) (2,220 ) (225 ) (1,507 )
Earnings before income taxes 22,148 29,149 45,999 58,011
Provision for (recovery of) income taxes
Current 6,126 7,399 13,481 16,878
Deferred (75 ) 822 (1,203 ) (345 )
6,051 8,221 12,278 16,533
Net earnings for the period $ 16,097 $ 20,928 $ 33,721 $ 41,478
Net earnings attributable to non-controlling interest 101 194 198 336
Net earnings attributable to shareholders 15,996 20,734 33,523 41,142
Net earnings for the period $ 16,097 $ 20,928 $ 33,721 $ 41,478
Earnings per share
Basic $ 0.22 $ 0.28 $ 0.45 $ 0.56
Diluted $ 0.22 $ 0.28 $ 0.45 $ 0.56
Consolidated Balance Sheet Data
As at As at
October 31, 2011 April 30, 2011
Cash and instruments held for trading $ 186,316 $ 192,025
Inventory $ 104,050 $ 106,422
Working capital $ 323,625 $ 326,029
Total assets $ 408,362 $ 410,511
Shareholders' equity $ 371,500 $ 372,209
Number of common shares outstanding:
Basic 73,224,286 74,470,606
Fully-diluted 78,146,436 78,577,206
Weighted average number of shares outstanding:
Basic 74,085,659 73,989,997
Fully-diluted 74,416,633 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 December 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 January 06, 2012. The rebroadcast can be accessed at 1-416-915-1035 or toll-free 1-866-245-6755. The pass code for the rebroadcast is 48060.

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