Evertz Technologies Limited
TSX : ET

Evertz Technologies Limited

March 01, 2017 14:14 ET

Evertz Technologies Reports Results for the Third Quarter Ended January 31, 2017

BURLINGTON, ONTARIO--(Marketwired - March 1, 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 Third Quarter ended January 31, 2017.

Quarter Highlights

  • Revenue of $91.1 million
  • US/Canada revenue up 6% to $56.8 million for the quarter
  • Net earnings of $9.7 million for the quarter, inclusive of a foreign exchange loss of $4.3 million
  • Fully diluted earnings per share of $0.13 for the quarter
Selected Financial Information
Consolidated Statement of Earnings Data
(in thousands of dollars, except earnings per share and share data)
Q3'17 Q3'16
Revenue $ 91,080 $ 99,754
Gross margin 51,123 56,991
Earnings from operations 12,419 33,031
Earnings from operations before foreign exchange 16,696 25,658
Net earnings 9,705 24,390
Fully-diluted earnings per share $ 0.13 $ 0.32
Fully-diluted shares 78,521,246 78,715,246
Selected Financial Information
Consolidated Balance Sheet Data
(in thousands of dollars)
Q3'17 YE'16
Cash and cash equivalents $ 64,094 $ 123,102
Working capital 255,605 314,912
Total assets 384,354 448,314
Shareholders' equity 308,034 366,205

Revenue

For the quarter ended January 31, 2017, revenues were $91.1 million as compared to revenues of $99.8 million for the quarter ended January 31, 2016. For the quarter, revenues in the United States/Canada region were $56.8 million, an increase of 6% as compared to $53.6 million in the same quarter last year. The International region had revenues of $34.3 million as compared to $46.2 million for the quarter ended January 31, 2016.

Gross Margin

For the quarter ended January 31, 2017 gross margin was $51.1 million as compared to $57.0 million in the same quarter last year. Gross margin percentage was approximately 56.1% as compared to 57.1% in the quarter ended January 31, 2016.

Earnings

For the quarter ended January 31, 2017 net earnings were $9.7 million as compared to $24.4 million in the corresponding period last year.

For the quarter ended January 31, 2017 earnings per share on a fully-diluted basis were $0.13, compared to $0.32 in the corresponding period last year.

Operating Expenses

For the quarter ended January 31, 2017 selling and administrative expenses were $15.5 million as compared to $15.1 million for the quarter ended January 31, 2016.

For the quarter ended January 31, 2017 gross research and development expenses were $18.5 million as compared to $17.2 million in the corresponding period in 2016.

Liquidity and Capital Resources

The Company's working capital as at January 31, 2017 was $255.6 million as compared to $314.9 million on April 30, 2016.

Cash and cash equivalents were $64.1 million as at January 31, 2017 as compared to $123.1 million on April 30, 2016.

Cash generated from operations was $25.9 million for the quarter ended January 31, 2017 as compared to cash generated of $49.6 million for the quarter ended January 31, 2016. Before taking into account taxes and the changes in non-cash working capital and current taxes, the Company generated $13.4 million from operations for the quarter ended January 31, 2017 compared to $29.8 million for the same period last year.

For the quarter, the Company used $4.2 million in investing activities largely a result of purchases in capital assets.

For the quarter ended, the Company used cash from financing activities of $92.2 million which was a result of the payment of dividends of $96.7 million, partially offset by the issuance of capital stock for $4.5 million.

Shipments and Backlog

At the end of February 2017, purchase order backlog was in excess of $103 million and shipments during the month of February 2017 were $21 million.

Dividend Declared

Evertz Board of Directors declared a regular quarterly dividend on March 1, 2017 of $0.18 per share.

The dividend is payable to shareholders of record on March 10, 2017 and will be paid on or about March 17, 2017.

Selected Consolidated Financial Information

(in thousands of dollars, except earnings per share and percentages)

Three month period ended January 31, Nine month period ended January 31,
2017 2016 2017 2016
Revenue $ 91,080 $ 99,754 $ 277,698 $ 285,183
Cost of goods sold 39,957 42,763 119,598 122,829
Gross margin 51,123 56,991 158,100 162,354
Expenses
Selling and administrative 15,529 15,121 45,704 44,750
General 2,567 1,502 6,534 4,740
Research and development 18,484 17,229 53,757 49,608
Investment tax credits (2,153 ) (2,519 ) (7,213 ) (7,414 )
Foreign exchange loss (gain) 4,277 (7,373 ) (5,777 ) (14,452 )
38,704 23,960 93,005 77,232
Earnings before undernoted 12,419 33,031 65,095 85,122
Finance income 658 117 1,438 455
Finance costs (74 ) (128 ) (196 ) (450 )
Other income and expenses (225 ) 211 (188 ) 361
Earnings before income taxes 12,778 33,231 66,149 85,488
Provision for (recovery of) income taxes
Current 2,550 7,344 18,191 23,312
Deferred 523 1,497 (1,130 ) (431 )
3,073 8,841 17,061 22,881
Net earnings for the period $ 9,705 $ 24,390 $ 49,088 $ 62,607
Net earnings attributable to non-controlling interest 68 165 475 485
Net earnings attributable to shareholders 9,637 24,225 48,613 62,122
Net earnings for the period $ 9,705 $ 24,390 $ 49,088 $ 62,607
Earnings per share
Basic $ 0.13 $ 0.33 $ 0.65 $ 0.83
Diluted $ 0.13 $ 0.32 $ 0.65 $ 0.83
Consolidated Balance Sheet Data As at
January 31, 2017
As at
April 30, 2016
Cash and cash equivalents $ 64,094 $ 123,102
Inventory $ 172,694 $ 155,957
Working capital $ 255,605 $ 314,912
Total assets $ 384,354 $ 448,314
Shareholders' equity $ 308,034 $ 366,205
Number of common shares outstanding:
Basic 75,715,246 74,188,746
Fully -diluted 78,521,246 78,595,246
Weighted average number of shares outstanding:
Basic 75,530,630 74,360,423
Fully -diluted 75,666,776 74,843,493

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 1, 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) 1-866-253-4709, access code 4849338.

For those unable to listen to the live call, a rebroadcast will also be available until March 31, 2017. The rebroadcast can be accessed at 647-436-0148 or toll-free 1-888-203-1112. The pass code for the rebroadcast is 4849338.

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