Evertz Technologies Limited

TSX : ET


Evertz Technologies Limited

March 04, 2014 16:00 ET

Evertz Technologies Third Quarter Fiscal 2014 Revenue Up 30%

BURLINGTON, ONTARIO--(Marketwired - March 4, 2014) - 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, 2014 of its fiscal 2014 year.

Quarterly Highlights

  • Revenue of $93.2 million, up $21.4 million from prior quarter ending January 31, 2013
  • United States/Canada region revenue up 63% compared to the same quarter last year
  • Adoption of the recently released state-of-the-art technology in DreamCatcher replay for a major sports league, and the EXE 46Tb/s Ethernet SDN switching platform for a major network, resulted in over $15 million in total sales
  • Net earnings of $21.3 million for the quarter
  • Fully diluted earnings per share increased 61% to $0.29 for the quarter as compared to $0.18 one year ago
Selected Financial Information
Consolidated Statement of Earnings Data
(in thousands of dollars, except per share amounts)
Q3 ' 14 Q3 ' 13
Revenue $ 93,185 $ 71,771
Gross Margin 53,737 40,272
Earnings from operations 28,223 17,108
Net earnings 21,349 13,179
Fully-diluted earnings per share $ 0.29 $ 0.18
Selected Financial Information
Consolidated Balance Sheet Data
(in thousands of dollars)
Q3 ' 14 YE ' 13
Cash and instruments held for trading $ 118,782 $ 220,668
Working capital 271,609 352,164
Total assets 388,797 465,307
Shareholders' equity 329,222 406,797

Revenue

For the quarter ended January 31, 2014, revenues were $93.2 million as compared to revenues of $71.8 million for the quarter ended January 31, 2013. For the quarter, revenues in the United States/Canada region were $55.0 million, an increase of $21.2 million as compared to $33.8 million in the same quarter last year. The International region had revenues of $38.2 million, an increase of $0.2 million as compared to $38.0 million in the same quarter last year.

Gross Margin

For the quarter ended January 31, 2014 gross margin was $53.7 million compared to $40.3 million in the same quarter last year. Gross margin percentage was approximately 58% compared to 56% in the same quarter last year.

Earnings

For the quarter ended January 31, 2014 net earnings were $21.3 million as compared to $13.2 million in the corresponding period last year.

For the quarter ended January 31, 2014, earnings per share on a fully-diluted basis were $0.29 as compared to $0.18 in the same period in 2013.

Operating Expenses

For the quarter ended January 31, 2014 selling and administrative expenses were $14.9 million, an increase of $1.2 million or 9% compared to $13.7 million for the quarter ended January 31, 2013.

For the quarter ended January 31, 2014 gross research and development expenses increased by $1.9 million or 15% as compared to the corresponding period in 2013. Gross research and development expenses represented approximately 16% of revenue for the quarter ended January 31, 2014.

Liquidity and Capital Resources

The Company's working capital as at January 31, 2014 was $271.6 million as compared to $352.2 million on April 30, 2013.

Cash and instruments held for trading were $118.8 million as at January 31, 2014 as compared to $220.7 million on April 30, 2013.

Cash generated by operations was $24.4 million for the quarter ended January 31, 2014 as compared to $22.0 million for the quarter ended January 31, 2013. Before taking into account taxes and the changes in non-cash working capital, the Company generated $24.5 million from operations for the quarter ended January 31, 2014 compared to $16.8 million for the same period last year.

The Company used $2.6 million in investing activities largely a result of purchases in capital assets during the quarter ended January 31, 2014, compared to $6.2 million used during the quarter ended January 31, 2013.

For the quarter ended January 31, 2014, the Company used cash in financing activities of $112.6 million which was principally a result of the payment of dividends of $115.8 million, including a special dividend of $104.0 million, offset by the issuance of capital stock of $3.5 million.

Shipments and Backlog

Purchase order backlog at the end of February 2014 was in excess of $43 million and shipments during the month of February 2014 were $25 million.

Dividend Declared

Evertz Board of Directors declared a regular quarterly dividend on March 4, 2014 of $0.16 per share.

The dividend is payable to shareholders of record on March 14, 2014 and will be paid on or about March 21, 2014.

Selected Consolidated Financial Information
(Unaudited)
(in thousands of dollars, except earnings per share and share data)
Three month period ended Nine month period ended
January 31, January 31,
2014 2013 2014 2013
Revenue $ 93,185 $ 71,771 $ 238,287 $ 250,890
Cost of goods sold 39,448 31,499 101,184 106,103
Gross margin 53,737 40,272 137,103 144,787
Expenses
Selling and administrative 14,913 13,659 40,196 39,118
General 2,438 1,393 5,365 4,290
Research and development 15,049 13,098 43,133 37,502
Investment tax credits (3,168 ) (3,519 ) (9,033 ) (9,569 )
Foreign exchange gain (3,718 ) (1,467 ) (7,183 ) (2,790 )
25,514 23,164 72,478 68,551
Earnings before undernoted 28,223 17,108 64,625 76,236
Finance income 496 699 1,720 1,576
Finance costs (61 ) (103 ) (275 ) (269 )
Other income and expenses 47 276 (38 ) 272
Earnings before income taxes 28,705 17,980 66,032 77,815
Provision for (recovery of) income taxes
Current 7,672 3,968 19,387 19,280
Deferred (316 ) 833 (2,140 ) 1,505
7,356 4,801 17,247 20,785
Net earnings for the period $ 21,349 $ 13,179 $ 48,785 $ 57,030
Net earnings attributable to non-controlling interest 68 195 349 550
Net earnings attributable to shareholders 21,281 12,984 48,436 56,480
Net earnings for the period $ 21,349 $ 13,179 $ 48,785 $ 57,030
Earnings per share
Basic $ 0.29 $ 0.18 $ 0.65 $ 0.77
Diluted $ 0.29 $ 0.18 $ 0.65 $ 0.77
Consolidated Balance Sheet Data As at
January 31,
2014
As at
April 30,
2013
Cash and instruments held for trading $ 118,782 $ 220,668
Inventory 125,324 111,619
Working capital 271,609 352,164
Total assets 388,797 465,307
Shareholders' equity 329,222 406,797
Number of common shares outstanding:
Basic 74,279,746 73,632,566
Fully-diluted 78,068,346 78,246,966
Weighted average number of shares outstanding:
Basic 73,994,700 73,300,647
Fully-diluted 74,398,758 73,816,338

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 4, 2014 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 4, 2014. The rebroadcast can be accessed at 1-416-915-1035 or toll-free 1-866-245-6755. The pass code for the rebroadcast is 988819.

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, high definition television ("HDTV") 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