Evertz Technologies Limited
TSX : ET

Evertz Technologies Limited

March 08, 2011 16:00 ET

Evertz Technologies Reports Results for the Third Quarter Ended January 31, 2011

BURLINGTON, ONTARIO--(Marketwire - March 8, 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 third quarter ended January 31, 2011, of its fiscal 2011 year.

Quarterly Highlights

  • Sales were $83.2 million a 26% increase year-over-year for the quarter
  • Sales in the United States/Canada region increased by 44% year over year for the quarter
  • Sales in the International region increased by 7% year over year for the quarter
  • Gross margin was 57.5%
  • Cash and instruments held for trading increased to $177.9 million
  • Net earnings were $23.6 million for the quarter as compared to $11.7 million a year ago
  • Diluted earnings per share were $0.32 for the quarter as compared to $0.16 a year ago
Selected Financial Information          
Consolidated Statement of Earnings Data          
(in thousands of dollars, except per share amounts)          
 
    Q3 '11     Q3 '10
Sales $ 83,207   $ 66,165
Gross margin   47,818     37,778
Earnings from operations   28,384     18,715
Net income   23,553     11,660
Fully-diluted earnings per share $ 0.32   $ 0.16
 
 
Selected Financial Information          
Consolidated Balance Sheet Data          
(in thousands of dollars)          
           
    Q3 '11     YE '10
Cash and instruments held for trading $ 177,886   $ 145,029
Working capital   318,255     264,161
Total assets   405,464     345,787
Shareholders' equity   365,739     312,169

Sales

For the quarter ended January 31, 2011, sales were $83.2 million, an increase of $17.0 million or 26% as compared to sales of $66.2 million for the quarter ended January 31, 2010. For the quarter, sales in the United States/Canada region increased by $14.9 million or 44% when compared to the same quarter last year. The International region grew by $2.2 million or 7% for the quarter ended January 31, 2011 when compared to the same quarter last year.

Gross Margin

For the quarter ended January 31, 2011 gross margin was $47.8 million compared to $37.8 million in the same quarter last year. Gross margin percentage was approximately 58% compared to 57% for the quarter ended January 31, 2010.

Earnings

For the quarter ended January 31, 2011 net earnings were $23.6 million as compared to $11.7 million in the corresponding period last year.

For the quarter ended January 31, 2011, earnings per share on a fully-diluted basis were $0.32 as compared to $0.16 in the same period in 2010.

Operating Expenses

For the quarter ended January 31, 2011 selling and administrative expenses were $10.2 million compared to $9.5 million for the quarter ended January 31, 2010. Selling and administrative expenses represented approximately 12% of sales in the quarter ended January 31, 2011.

For the quarter ended January 31, 2011 gross research and development expenses increased by $1.6 million or 21% as compared to the corresponding period in 2010. Gross research and development expenses represented approximately 12% of sales for the quarter similar to the same period last year.

Liquidity and Capital Resources

The Company's working capital as at January 31, 2011 was $318.3 million as compared to $264.2 million on April 30, 2010.

Cash and instruments held for trading were $177.9 million as at January 31, 2011 as compared to $145.0 million on April 30, 2010.

Cash provided by operations was $29.1 million for the quarter ended January 31, 2011 as compared to $28.6 million for the quarter ended January 31, 2010. Before taking into account the changes in non-cash working capital, the Company generated $23.5 million from operations for the quarter ended January 31, 2011 compared to $19.3 million for the same period last year.

For the quarter ended January 31, 2011, the Company spent $3.1 million on a business acquisition and $0.6 million on the purchase of capital assets.

For the quarter ended January 31, 2011, the Company used cash from financing activities of $3.9 million which was principally a result of the payment of dividends of $7.4 million offset by the issuance of capital stock pursuant to the Company Stock Option Plan of $3.7 million.

Shipments and Backlog

Purchase order backlog at the end of February 2011 was in excess of $31 million and shipments during the month of February 2011 exceeded $17 million.

Dividend Declared

Evertz Board of Directors declared a dividend on March 08, 2011 of $0.10.

The dividend is payable to shareholders of record on March 17, 2011 and will be paid on or about March 25, 2011.

Selected Consolidated Financial Information
(Unaudited)
 
(in thousands of dollars, except earnings per share and share data)
Consolidated Statement of Earnings Data                        
  Three month period ended   Nine month period ended  
  January 31,   January 31,  
    2011     2010     2011     2010  
Sales $ 83,207   $ 66,165   $ 239,350   $ 211,170  
Cost of goods sold   35,389     28,387     100,895     87,622  
Gross margin $ 47,818   $ 37,778   $ 138,455   $ 123,548  
Gross margin %   57.5 %   57.1 %   57.8 %   58.5 %
Expenses                        
  Selling and administrative   10,155     9,459     27,736     27,245  
  Research and development   9,620     7,977     25,863     24,318  
  Investment tax credits   (2,258 )   (2,063 )   (6,139 )   (6,088 )
  Foreign exchange (gain) loss   516     1,550     (587 )   5,021  
  Amortization of intangibles   277     401     715     1,204  
  Stock-based compensation   1,124     1,739     3,083     4,743  
    19,434     19,063     50,671     56,443  
Earnings from operations $ 28,384   $ 18,715   $ 87,784   $ 67,105  
 
Interest and other income $ 4,096   $ (1,530 ) $ 3,041   $ (755 )
Non-controlling interest   (125 )   (92 )   (461 )   (323 )
Earnings before income taxes $ 32,355   $ 17,093   $ 90,364   $ 66,027  
Net earnings $ 23,553   $ 11,660   $ 65,023   $ 46,249  
Net earnings per share:                        
  Basic $ 0.32   $ 0.16   $ 0.88   $ 0.63  
  Fully-diluted $ 0.32   $ 0.16   $ 0.88   $ 0.62  
           
Consolidated Balance Sheet Data          
    As at     As at
    January 31, 2011     April 30, 2010
Cash and instruments held for trading $ 177,886   $ 145,029
Inventory $ 107,986   $ 91,745
Working capital $ 318,255   $ 264,161
Total assets $ 405,464   $ 345,787
Shareholders' equity $ 365,739   $ 312,169
 
Number of common shares outstanding:          
  Basic   74,470,606     73,607,506
  Fully-diluted   78,524,206     77,703,006
 
Weighted average number of shares outstanding:          
  Basic   73,794,552     73,324,244
  Fully-diluted 1   74,050,161     74,223,642
           
Note:
(1) Based on weighted average number of Common Shares outstanding using the treasury stock method as per Canadian GAAP.

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 March 08, 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 April 08, 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 689294.

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