BURLINGTON, ONTARIO--(Marketwired - Dec. 1, 2016) - Evertz Technologies Limited (TSX:ET), the leader in Software
Defined Video Network ("SDVN") technology, today reported its results for the second quarter ended October 31, 2016.
Quarter Highlights
- Revenue of $99.6 million, up 14% sequentially
- US/Canada revenue up 20% to $62.3 million sequentially
- Net earnings of $20.8 million for the quarter
- Fully diluted earnings per share of $0.27 for the quarter
- Cash and cash equivalents in excess of $133 million
- Discovery Communications partners with Evertz for first-of-its-kind "Cloud" playout on Amazon Web Services
- Special dividend declared of $1.10 per common share
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| Selected Financial Information |
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| Consolidated Statement of Earnings Data |
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| (in thousands of dollars, except earnings per share and share data) |
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| |
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Q2'17 |
|
Q2'16 |
| Revenue |
$ |
99,592 |
$ |
100,560 |
| Gross margin |
|
57,111 |
|
57,534 |
| Earnings from operations |
|
27,886 |
|
26,715 |
| Net earnings |
|
20,760 |
|
19,619 |
| Fully-diluted earnings per share |
$ |
0.27 |
$ |
0.26 |
| Fully-diluted shares |
|
75,140,335 |
|
74,795,927 |
| Selected Financial Information |
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| Consolidated Balance Sheet Data |
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| (in thousands of dollars) |
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| |
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Q2 ' 17 |
|
YE ' 16 |
| Cash and cash equivalents |
$ |
133,359 |
$ |
123,102 |
| Working capital |
|
338,445 |
|
314,912 |
| Total assets |
|
464,091 |
|
448,314 |
| Shareholders' equity |
|
390,323 |
|
366,205 |
Revenue
For the quarter ended October 31, 2016, revenues were $99.6 million as compared to revenues of $100.6 million for
the quarter ended October 31, 2015. For the quarter, revenues in the United States/Canada region were $62.3 million, an increase
of 2% as compared to $61.2 million in the same quarter last year. The International region had revenues of $37.3 million as
compared to $39.3 million for the quarter ended October 31, 2015.
Gross Margin
For the quarter ended October 31, 2016 gross margin was $57.1 million as compared to $57.5 million in the same
quarter last year. Gross margin percentage was approximately 57.3% as compared to 57.2% in the quarter ended October 31,
2015.
Earnings
For the quarter ended October 31, 2016 net earnings were $20.8 million as compared to $19.6 million in the
corresponding period last year.
For the quarter ended October 31, 2016 earnings per share on a fully-diluted basis were $0.27, compared to $0.26 in
the corresponding period last year.
Operating Expenses
For the quarter ended October 31, 2016 selling and administrative expenses were $15.3 million as compared to $14.8
million for the quarter ended October 31, 2015.
For the quarter ended October 31, 2016 gross research and development expenses were $17.8 million as compared to
$16.1 million in the corresponding period in 2015.
Liquidity and Capital Resources
The Company's working capital as at October 31, 2016 was $338.4 million as compared to $314.9 million on April 30,
2016.
Cash and cash equivalents were $133.4 million as at October 31, 2016 as compared to $123.1 million on April 30,
2016.
Cash generated from operations was $12.6 million for the quarter ended October 31, 2016 as compared to cash
generated of $23.7 million for the quarter ended October 31, 2015. Before taking into account taxes and the changes in non-cash
working capital and current taxes, the Company generated $24.4 million from operations for the quarter ended October 31, 2016
compared to $22.2 million for the same period last year.
For the quarter, the Company used $2.4 million in investing activities largely a result of purchases in capital
assets.
For the quarter ended, the Company generated cash from financing activities of $0.1 million which was principally a
result of the issuance of capital stock for $13.7 million, partially offset by the payment of dividends of $13.5 million.
Shipments and Backlog
At the end of November 2016, purchase order backlog was in excess of $72 million and shipments during the month of
November 2016 were $39 million.
Dividend Declared
Evertz Board of Directors declared a regular quarterly dividend on December 1, 2016 of $0.18 per share.
The dividend is payable to shareholders of record on December 12, 2016 and will be paid on or about December 19,
2016.
Special Dividend
Evertz Board of Directors declared a special dividend on December 1, 2016 of $1.10 per common share, payable on
December 19, 2016 to shareholders of record on December 12, 2016.
The special dividend reflects both the strong long-term operating performance of the company and its solid balance
sheet, thereby enabling a distribution of cash over and above what is considered necessary to meet known commitments and maintain
adequate reserves.
Selected Consolidated Financial Information
(in thousands of dollars, except earnings per share and percentages)
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Three month period ended |
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Six month period ended |
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October 31, |
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October 31, |
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2016 |
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2015 |
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2016 |
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2015 |
| Revenue |
$ |
99,592 |
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$ |
100,560 |
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$ |
186,618 |
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$ |
185,429 |
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| Cost of goods sold |
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42,481 |
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|
43,026 |
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|
79,641 |
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|
80,066 |
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| Gross margin |
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57,111 |
|
|
57,534 |
|
|
106,977 |
|
|
105,363 |
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| Expenses |
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Selling and administrative |
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15,289 |
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14,827 |
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30,175 |
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|
29,629 |
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General |
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2,017 |
|
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1,643 |
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|
3,967 |
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|
3,238 |
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Research and development |
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17,780 |
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16,127 |
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35,273 |
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32,379 |
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Investment tax credits |
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(2,411 |
) |
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(2,411 |
) |
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(5,060 |
) |
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(4,895 |
) |
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Foreign exchange (gain) loss |
|
(3,450 |
) |
|
633 |
|
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(10,054 |
) |
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(7,079 |
) |
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29,225 |
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30,819 |
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54,301 |
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|
53,272 |
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| Earnings before undernoted |
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27,886 |
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26,715 |
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|
52,676 |
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|
52,091 |
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| Finance income |
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464 |
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|
180 |
|
|
780 |
|
|
338 |
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| Finance costs |
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(69 |
) |
|
(200 |
) |
|
(122 |
) |
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(322 |
) |
| Other income and expenses |
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(32 |
) |
|
188 |
|
|
37 |
|
|
150 |
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| Earnings before income taxes |
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28,249 |
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|
26,883 |
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|
53,371 |
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|
52,257 |
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| Provision for (recovery of) income taxes |
|
|
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Current |
|
6,969 |
|
|
7,995 |
|
|
15,641 |
|
|
15,968 |
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Deferred |
|
520 |
|
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(731 |
) |
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(1,653 |
) |
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(1,928 |
) |
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|
7,489 |
|
|
7,264 |
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|
13,988 |
|
|
14,040 |
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| Net earnings for the period |
$ |
20,760 |
|
$ |
19,619 |
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$ |
39,383 |
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$ |
38,217 |
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| Net earnings attributable to non-controlling interest |
|
177 |
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|
133 |
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|
407 |
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|
320 |
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| Net earnings attributable to shareholders |
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20,583 |
|
|
19,486 |
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|
38,976 |
|
|
37,897 |
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| Net earnings for the period |
$ |
20,760 |
|
$ |
19,619 |
|
$ |
39,383 |
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$ |
38,217 |
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| Earnings per share |
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|
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| Basic |
$ |
0.28 |
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$ |
0.26 |
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$ |
0.52 |
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$ |
0.51 |
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| Diluted |
$ |
0.27 |
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$ |
0.26 |
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$ |
0.52 |
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$ |
0.51 |
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| Consolidated Balance Sheet Data |
As at |
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As at |
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October 31, 2016 |
|
April 30, 2016 |
| Cash and cash equivalents |
$ |
133,359 |
$ |
123,102 |
| Inventory |
$ |
165,233 |
$ |
155,957 |
| Working capital |
$ |
338,445 |
$ |
314,912 |
| Total assets |
$ |
464,091 |
$ |
448,314 |
| Shareholders' equity |
$ |
390,323 |
$ |
366,205 |
| Number of common shares outstanding: |
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Basic |
|
75,348,496 |
|
74,188,746 |
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Fully -diluted |
|
78,587,246 |
|
78,595,246 |
| Weighted average number of shares outstanding: |
|
|
|
|
| |
Basic |
|
74,463,363 |
|
74,360,423 |
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Fully -diluted |
|
75,001,329 |
|
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 December 1, 2016 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) 1-844-254-9270, access code 2269957 (NEW).
For those unable to listen to the live call, a rebroadcast will also be available until January 1, 2017. The
rebroadcast can be accessed at 647-436-0148 or toll-free 1-888-203-1112. The pass code for the rebroadcast is 2269957.
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.