Evertz Technologies Limited
TSX : ET

Evertz Technologies Limited

June 13, 2012 16:05 ET

Evertz Technologies Reports Results for the Fourth Quarter and Fiscal Year Ended April 30, 2012

BURLINGTON, ONTARIO--(Marketwire - June 13, 2012) -

Attention Business/Financial Editors:

Evertz Technologies Limited (TSX:ET), a leading equipment provider to the television broadcast industry, today reported its results, for the fourth quarter and year ended April 30, 2012, of its fiscal 2012 year.

Annual Highlights

  • Revenue increased 5% within the International region
  • Revenue was $293.4 million
  • Net earnings were $60.0 million for the year
  • Gross investment in R&D was $44.2 million
  • Cash generated from operations of $66.6 million
  • Cash and instruments held for trading at $185.7 million
  • Purchased and cancelled 2,046,800 shares pursuant to the NCIB
Selected Financial Information
Consolidated Statement of Earnings Data
(in thousands of dollars, except per share amounts)
Q4'12 YE'12 Q4'11 YE'11
Revenue $ 76,340 $ 293,400 $ 69,043 $ 309,259
Gross Margin 42,783 166,168 38,988 178,309
Earnings from operations 17,474 80,276 16,033 104,145
Net Income 13,490 59,956 12,418 78,259
Fully-diluted earnings per share $ 0.18 $ 0.81 $ 0.16 $ 1.04
Selected Financial Information
Consolidated Balance Sheet Data
(in thousands of dollars)
YE'12 YE'11
Cash and instruments held for trading $ 185,669 $ 192,025
Working capital 325,677 326,029
Total assets 431,864 410,511
Shareholders' equity 378,417 372,209

Revenue

For the quarter ended April 30, 2012, revenues were $76.3 million, an increase of $7.3 million or 11% as compared to revenues of $69.0 million for the quarter ended April 30, 2011. For the quarter, revenues in the United States/Canada region were $36.7 million. The International region had revenues of $39.6 million, an increase of 42% when compared to the same quarter last year.

For the year ended April 30, 2012, sales were $293.4 million, a decrease of $15.9 million or 5% as compared to sales of $309.3 million for the prior year. The United States/Canada region decreased by $22.2 million or 13% when compared to the prior year, and the International region grew by $6.4 million or 5% when compared to the prior year.

Gross Margin

For the quarter ended April 30, 2012 gross margin was $42.8 million compared to $39.0 million in the same quarter last year. Gross margin percentage was approximately 56% compared to 57% for the quarter ended April 30, 2011.

For the year ended April 30, 2012, gross margin was $166.2 million when compared to $178.3 million for the year ended April 30, 2011. Gross margin percentage was approximately 57% for the year ended April 30, 2012 as compared to 58% for the prior year.

Earnings

For the quarter ended April 30, 2012 net earnings were $13.5 million as compared to $12.4 million in the corresponding period last year.

For the year ended April 30, 2012, net earnings were $60.0 million as compared to $78.3 million in the corresponding period last year.

For the quarter ended April 30, 2012, earnings per share on a fully-diluted basis were $0.18 as compared to $0.16 in the same period in 2011.

For the year ended April 30, 2012, earnings per share on a fully-diluted basis were $0.81 as compared to $1.04 in the same period in 2011.

Operating Expenses

For the quarter ended April 30, 2012 selling and administrative expenses were $12.3 million compared to $10.4 million for the quarter ended April 30, 2011. Selling and administrative expenses represented approximately 16% of revenue in the quarter ended April 30, 2012.

For the year ended April 30, 2012, selling and administrative expenses were $47.1 million compared to $37.6 million for the year ended April 30, 2011. Selling and administrative expenses represented approximately 16% of revenue in fiscal 2012.

For the quarter ended April 30, 2012 gross research and development expenses increased by $2.9 million or 30% as compared to the corresponding period in 2011. Gross research and development expenses represented approximately 17% of revenue for the quarter compared to 14% for the same period last year.

For the year ended April 30, 2012, gross research and development expenses increased by 24% or $8.5 million as compared to the prior year. Research and development expenses represented approximately 15% of sales.

Liquidity and Capital Resources

The Company's working capital as at April 30, 2012 was $325.7 million as compared to $326.0 million on April 30, 2011.

Cash and instruments held for trading were $185.7 million as at April 30, 2012 as compared to $192.0 million on April 30, 2011.

Cash provided by operations was $8.0 million for the quarter ended April 30, 2012 as compared to $23.3 million for the quarter ended April 30, 2011. Before taking into account the changes in non-cash working capital, the Company generated $18.2 million from operations for the quarter ended April 30, 2012 compared to $15.2 million for the same period last year.

Cash provided by operations was $66.6 million for the 2012 fiscal year as compared to cash provided by operations of $73.7 million for the 2011 fiscal year. Before taking into account changes in non-cash working capital, the Company generated $73.0 million from operations for fiscal 2012 as compared to $88.1 million for fiscal 2011.

The Company spent $1.6 million on the purchase of equipment for the quarter ended April 30, 2012 and $16.6 million for the year ended April 30, 2012.

For the quarter ended April 30, 2012, the Company used cash from financing activities of $11.1 million which was principally a result of the payment of dividends of $10.3 million.

For the year ended April 30, 2012, the Company used cash from financing activities of $56.2 million as a result of the payment of dividends of $36.9 million, repurchase of capital stock costing $25.9 million offset by the issuance of share capital of $7.6 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 24 to the Consolidated Financial Statements.

Shipments and Backlog

Purchase order backlog at the end of May 2012 was in excess of $57 million and shipments during the month of May 2012 exceeded $30 million.

Dividend Declared

Evertz Board of Directors declared a dividend on June 13, 2012 of $0.14 per share.

The dividend is payable to shareholders of record on June 22, 2012 and will be paid on or about June 29, 2012.

Selected Consolidated Financial Information
(Unaudited)
(in thousands of dollars, except earnings per share and share data)
Three month periods ended Twelve month periods ended
April 30, April 30,
2012 2011 2012 2011
Revenue $ 76,340 $ 69,043 $ 293,400 $ 309,259
Cost of goods sold 33,557 30,055 127,232 130,950
Gross margin 42,783 38,988 166,168 178,309
Gross margin % 56.0 % 56.5 % 56.6 % 57.7 %
Expenses
Selling and administrative 12,320 10,389 47,118 37,583
General 2,110 1,910 6,788 6,680
Research and development 12,782 9,856 44,200 35,719
Investment tax credits (2,562 ) (2,271 ) (9,872 ) (8,410 )
Foreign exchange (gain) loss 659 3,070 (2,342 ) 2,592
25,309 22,954 85,892 74,164
17,474 16,034 80,276 104,145
Finance income 488 347 1,915 1,080
Finance costs (55 ) (67 ) (197 ) (187 )
Other income and expenses 403 880 (154 ) 3,308
Earnings before income taxes 18,310 17,194 81,840 108,346
Provision for income taxes
Current 3,865 4,359 21,669 29,207
Deferred 955 417 215 880
4,820 4,776 21,884 30,087
Net earnings for the year 13,490 12,418 59,956 78,259
Net earnings attributable to non-controlling interest 110 84 416 545
Net earnings attributable to shareholders 13,380 12,334 59,540 77,714
Net earnings for the year 13,490 12,418 59,956 78,259
Earnings per share
Basic $ 0.19 $ 0.17 $ 0.81 $ 1.05
Diluted $ 0.18 $ 0.16 $ 0.81 $ 1.04
Consolidated Statements of Financial Position
As at April 30, 2012, April 30, 2011 and May 1, 2010
(In thousands of Canadian dollars)
April 30, April 30, May 1,
2012 2011 2010
Assets
Current assets
Cash and cash equivalents $ 173,665 $ 175,835 $ 133,755
Instruments held for trading 12,004 16,190 11,274
Trade and other receivables (note 4) 61,806 52,732 48,988
Inventories (note 5) 109,211 106,422 91,745
Income tax receivable (note 22) 11,695 2,014 3,850
$ 368,381 $ 353,193 $ 289,612
Assets held for sale (note 23) $ 3,781 $ - $ -
Property, Plant and Equipment (note 6) $ 41,190 37,627 41,328
Goodwill (note 7) 17,507 17,467 14,584
Intangible assets (note 8) 1,005 2,224 1,823
$ 431,864 $ 410,511 $ 347,347
Liabilities
Current liabilities, trade and other payables $ 37,034 $ 21,814 $ 21,652
Provisions (note 9) 809 1,235 1,139
Deferred revenue 4,460 3,664 1,361
Current portion of long term debt (note 10) 401 451 388
$ 42,704 $ 27,164 $ 24,540
Long term debt (note 10) $ 1,875 $ 2,493 $ 2,732
Deferred taxes (note 22) 7,331 7,095 5,895
$ 51,910 $ 36,752 $ 33,167
Equity
Capital stock (note 11) $ 67,458 $ 58,882 $ 51,035
Share based payment reserve 14,320 13,762 12,183
Accumulated other comprehensive (loss) income (906 ) 440 -
Retained earnings 297,545 299,125 249,554
$ 296,639 $ 299,565 $ 249,554
Total equity attributable to shareholders 378,417 372,209 312,772
Non-controlling interest 1,537 1,550 1,408
379,954 373,759 314,180
$ 431,864 $ 410,511 $ 347,347

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 13, 2012 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 July 13, 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 376075.

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