Evertz Technologies Limited
TSX : ET

Evertz Technologies Limited

June 18, 2008 16:09 ET

Evertz Technologies Reports Results for the Fourth Quarter and Fiscal Year Ended April 30, 2008

BURLINGTON, ONTARIO--(Marketwire - June 18, 2008) -

Attention Business/Financial Editors:

Evertz Technologies Limited (TSX:ET), a leading equipment provider to the television broadcast industry, today reported its annual results, ended April 30, 2008, of its fiscal 2008 year.

Annual Highlights

- Sales were $272.5 million, 36% higher than last year

- Gross investment in R&D increased by $2.7 million to $18.6 million, 17% higher than the prior year

- Net earnings were $87.3 million for the year as compared to $60.7 million a year ago

- Fully-diluted earnings per share were $1.17 for the year as compared to $0.83 a year ago



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

Q4'08 YE'08 Q4'07 YE'07
---------- --------- -------- ---------
Sales $ 62,899 $ 272,505 $ 58,563 $ 200,681
Gross Margin 38,081 161,641 34,990 121,618
Earnings from operations 26,692 118,342 22,693 83,249
Net Income 21,096 87,294 18,391 60,663
Fully-diluted earnings per
share $ 0.28 $ 1.17 $ 0.25 $ 0.83


Selected Financial Information
Consolidated Balance Sheet Data as at Year End

YE'08 YE'07
--------- -----------
Cash and Short-Term Investments $ 95,543 $ 34,544
Working Capital 164,147 89,991
Total Assets 220,579 143,996
Shareholder's Equity $ 188,220 $ 112,444


Sales

For the quarter ended April 30, 2008, sales were $62.9 million, an increase of $4.3 million or 7% as compared to sales of $58.6 million for the quarter ended April 30, 2007. For the quarter the Canada/US region decreased by $3.5 million or 8% when compared to the same quarter last year. The International region grew by $7.8 million or 49% for the quarter ended April 30, 2008 when compared to the same quarter last year.

For the year ended April 30, 2008 sales were $272.5 million, an increase of $71.8 million or 36% as compared to sales of $200.7 million for the prior year. The Canada/US region grew by $ 39.3 million or 27% when compared to the prior year and the International region grew by $32.5 million or 57% when compared to the prior year.

Gross Margin

For the quarter ended April 30, 2008 gross margin was $38.1 million compared to $35.0 million when compared to the same quarter last year. Gross margin percentage was approximately 61% as compared to 60% for the quarter ended April 30, 2007.

For the year ended April 30, 2008 gross margin was $161.6 million compared to $121.6 million when compared to the year ended April 30, 2007. Gross margin percentage was approximately 59% for the year ended April 30, 2008 as compared to 61% for the prior year.

Earnings

For the quarter ended April 30, 2008 net earnings were $21.1 million as compared to $18.4 million in the corresponding period last year, an increase of 15%.

For the year ended April 30, 2008 net earnings were $87.3 million as compared to $60.7 million in the corresponding period last year, an increase of 44%.

For the quarter ended April 30, 2008 Earnings per share on a fully-diluted basis were $0.28 as compared to $0.25 in the same period in 2007.

For the year ended April 30, 2008 Earnings per share on a fully-diluted basis were $1.17 as compared to $0.83 in the same period in 2007.

Operating Expenses

For the quarter ended April 30, 2008 selling and administrative expenses decreased by $0.2 million as compared to the prior year. Selling and Administrative expenses represented approximately 12% of sales in the quarter ended April 30, 2008.

For the year ended April 30, 2008 selling and administrative expenses increased by $1.5 million as compared to the year ended April 30, 2007. Selling and Administrative expenses represented approximately 10% of sales in the year end of fiscal 2008.

For the quarter ended April 30, 2008 research and development expenses rose by 3% to $5.8 million as compared to the corresponding period during fiscal 2007. Research and Development expenses represented approximately 9% of sales for the quarter.

For the year ended April 30, 2008 research and development expenses rose by 17% to $18.6 million as compared to the prior year. Research and Development expenses represented approximately 7% of sales.

Liquidity and Capital Resources

The Company's working capital as at April 30, 2008 was $164.1 million as compared to $90.0 million on April 30, 2007.

Cash and Short-Term Investments were $95.5 million as at April 30, 2008 as compared $34.5 million at April 30, 2007.

Cash provided by operations was $19.5 million for both the quarter ended April 30, 2008 and the quarter ended April 30, 2007. Before taking into account the changes in non-cash working capital, the Company generated $23.5 million from operations for the quarter ended April 30, 2008 compared to $17.6 million for the same period last year.

Cash provided by operations was $82.5 million for the 2008 fiscal year as compared to cash provided by operations of $31.4 million in the 2007 fiscal year. Before taking into account changes in non-cash working capital, the Company generated $95.3 million from operations for fiscal 2008 as compared to $63.2 million for fiscal 2007.

The Company spent $8.3 million on the purchase of equipment for the fiscal 2008 year.

For the quarter ended April 30, 2008 cash used in financing activities was $6.3 million as a result of the payment of a dividend of $3.6 million and the repurchase of our shares of $2.7 million, pursuant to a normal course issuer bid.

Cash used in financing activities in fiscal 2008 was $13.4 million and was a result of the payments of dividends of $10.8 and the repurchase of our shares for $2.6 million pursuant to a normal course issuer bid.

Shipments and Backlog

Purchase order backlog at the end of May 2008 was in excess of $32 million and shipments during the month of May 2008 exceeded $18 million.

Dividend Declared

Evertz Board of Directors declared a dividend on June 18, 2008 of $0.08 per share. The dividend is payable to shareholders of record on July 15, 2008 and will be paid on or about July 25, 2008.



Selected Consolidated Financial Information

Consolidated Balance Sheets (In thousands of dollars)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
April 30, 2008 April 30, 2007
-------------------------------
(Audited) (Audited)
Assets
Current assets
Cash $ 10,195 $ 1,006
Short-term investments 85,348 33,538
Accounts receivable 40,578 35,004
Inventories 53,760 43,084
Future income taxes 2,762 2,403
----------------------------------------------------------------------------
$ 192,643 $ 115,035

Equipment $ 24,082 $ 20,858
Future income taxes 2,119 5,637
Intangibles 1,096 1,827
Goodwill 639 639
----------------------------------------------------------------------------
$ 220,579 $ 143,996
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Liabilities
Current liabilities
Accounts payable and accrued liabilities $ 17,560 $ 16,935
Income taxes payable 10,936 8,109
----------------------------------------------------------------------------
$ 28,496 $ 25,044

Deferred credit 2,281 5,365
Future income taxes 612 637
----------------------------------------------------------------------------
$ 31,389 $ 31,046

----------------------------------------------------------------------------
Non-controlling interest 970 506
----------------------------------------------------------------------------

Shareholders' Equity
Capital stock $ 45,687 $ 45,657

Contributed surplus 3,384 893

Accumulated other comprehensive income (loss) (381) 236
Retained earnings 139,530 65,658
----------------------------------------------------------------------------
$ 139,149 65,894

188,220 112,444
----------------------------------------------------------------------------
$ 220,579 $ 143,996
----------------------------------------------------------------------------
----------------------------------------------------------------------------



Consolidated Statements of Retained Earnings
(Unaudited)

Three-month and Twelve-month periods ended April 30, 2008 and 2007
(In thousands of dollars)

----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three-month periods ended Twelve-month periods ended
April 30, April 30,
------------------------- --------------------------
2008 2007 2008 2007
----------------------------------------------------------------------------
Balance, beginning
of period $ 124,619 $ 47,267 $ 65,658 $ 4,995
Net earnings 21,096 18,391 87,294 60,663
Cancelled pursuant
to NCIB (2,565) - (2,565) -
Dividends (3,620) - (10,857) -
----------------------------------------------------------------------------
Balance, end of period $ 139,530 $ 65,658 $ 139,530 $ 65,658
----------------------------------------------------------------------------
----------------------------------------------------------------------------



Consolidated Statements of Comprehensive Earnings
(Unaudited)

Three-month and Twelve-month periods ended April 30, 2008 and 2007
(In thousands of dollars)

----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three-month periods ended Twelve-month periods ended
April 30, April 30,
------------------------- --------------------------
2008 2007 2008 2007
----------------------------------------------------------------------------

Net earnings for the
period $ 21,096 $ 18,391 $ 87,294 $ 60,663
Net change in
unrealized gains
(losses) of
translating financial
statements of
self-sustaining
foreign operations 27 - (617) 375

----------------------------------------------------------------------------
Balance, end of period $ 21,123 $ 18,391 $ 86,677 $ 61,038
----------------------------------------------------------------------------
----------------------------------------------------------------------------



Consolidated Statements of Earnings
(Unaudited)

Three-month and Twelve-month periods ended April 30, 2008 and 2007
(In thousands of dollars, except per share amounts)

----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three-month periods ended Twelve-month periods ended
April 30, April 30,
------------------------- --------------------------
2008 2007 2008 2007
----------------------------------------------------------------------------

Sales $ 62,899 $ 58,563 $ 272,505 $ 200,681
Cost of goods sold 24,818 23,573 110,864 79,063
----------------------------------------------------------------------------
Gross margin 38,081 34,990 161,641 121,618
----------------------------------------------------------------------------

Expenses:
Selling and
administrative 7,450 7,633 26,681 25,199
Research and
development 5,769 5,617 18,629 15,946
Investment tax
credits and
government grants (3,016) (2,595) (7,643) (5,040)
Foreign exchange
loss 10 1,327 1,923 542
Amortization of
intangibles 182 182 731 731
Stock-based
compensation 891 201 2,514 766
Interest on
long-term debt - - - 219
Non-controlling
interest 103 (68) 464 6
----------------------------------------------------------------------------
11,389 12,297 43,299 38,369
----------------------------------------------------------------------------
Earnings from
operations 26,692 22,693 118,342 83,249

Interest and other
income 1,213 221 2,974 562
----------------------------------------------------------------------------
Earnings before
income taxes 27,905 22,914 121,316 83,811
----------------------------------------------------------------------------

Provision for income
taxes
Current 5,559 6,399 30,872 23,404
Future 1,250 (1,876) 3,150 (256)
----------------------------------------------------------------------------
6,809 4,523 34,022 23,148
----------------------------------------------------------------------------

Net earnings for
the period $ 21,096 $ 18,391 $ 87,294 $ 60,663
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Earnings per share
Basic $ 0.29 $ 0.25 $ 1.21 $ 0.85
Diluted $ 0.28 $ 0.25 $ 1.17 $ 0.83
----------------------------------------------------------------------------
----------------------------------------------------------------------------



Consolidated Statements of Cash Flows
(Unaudited)

Three-month and Twelve-month periods ended April 30, 2008 and 2007
(In thousands of dollars)

----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three-month periods ended Twelve-month periods ended
April 30, April 30,
------------------------- --------------------------
2008 2007 2008 2007
----------------------------------------------------------------------------

Operating Activities
Net earnings for the
period $ 21,096 $ 18,391 $ 87,294 $ 60,663
Add: Items not
involving cash
Amortization of
equipment 1,271 731 4,569 3,232
Amortization of
intangibles 182 182 731 731
Amortization of
deferred credit (1,015) 21 (3,084) (1,978)
Non-controlling
interest 103 (68) 464 6
Stock based
compensation 891 201 2,514 766
Gain on disposal
of equipment (298) - (298) -
Future income
taxes 1,250 (1,876) 3,150 (256)
----------------------------------------------------------------------------
23,480 17,582 95,340 63,164
Changes in non-cash
working capital items (3,999) 1,802 (12,798) (31,808)
----------------------------------------------------------------------------
Cash provided by
operating activities 19,481 19,384 82,542 31,356
----------------------------------------------------------------------------

Investing Activities
Acquisition of equipment (591) (5,948) (8,337) (12,633)
Proceeds from disposal
of equipment 586 - 586 -
Business acquisitions
net of cash - - - (2,158)
----------------------------------------------------------------------------
Cash used in investing
activities (5) (5,948) (7,751) (14,791)
----------------------------------------------------------------------------

Financing Activities
Dividends paid (3,620) - (10,857) -
Capital stock issued - 8 112 42,661
Capital stock cancelled
pursuant to NCIB (2,670) - (2,670) -
Repayment of long-term
debt - - - (5,184)
Subsidiary's shares
issued - 500 - 500
----------------------------------------------------------------------------
Cash provided by (used
in) financing activities (6,290) 508 (13,415) 37,977
----------------------------------------------------------------------------

Effect of exchange rates
on cash 135 (276) (377) 399
----------------------------------------------------------------------------

Increase in cash and
short term investments 13,321 13,668 60,999 54,941
Cash (bank indebtedness)
and short term
investments, beginning
of period 82,222 20,876 34,544 (20,397)
----------------------------------------------------------------------------
Cash and short term
investments, end of period $ 95,543 $ 4,544 $ 95,543 $ 34,544
----------------------------------------------------------------------------
----------------------------------------------------------------------------


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 June 18, 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 July 18, 2008. The rebroadcast can be accessed at 416-915-1035 or Toll-Free 1-866-245-6755. The pass code for the rebroadcast is 299016.

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, C.A.
    CFO
    (905) 335-7580
    (905) 335-5785 (FAX)
    Email: ir@evertz.com