Evertz Technologies Reports Record Revenue in Fiscal 2016


BURLINGTON, ONTARIO--(Marketwired - June 8, 2016) - Evertz Technologies Limited (TSX:ET), the leader in Software Defined Video Network ("SDVN") technology, today reported its results for the fourth quarter and year ended April 30, 2016.

Fiscal 2016 Highlights

  • Record annual revenue of $381.6 million, up 5% year over year
  • United States / Canada region revenue, up 6% to $216.0 million from the prior year
  • Net earnings of $70.9 million for the year, up 7% year over year
  • Fully diluted earnings per share of $0.94, up 8% from the prior year

Fourth Quarter 2016 Highlights

  • Revenue of $96.4 million, up 5% from the same quarter in the prior year
  • International revenue up 8% to $45.1 million from the prior year
  • Earnings from operations before FX of $23.1 million, up 9% year over year
  • Net earnings were $8.3 million or $0.11 per share for the quarter, inclusive of a foreign exchange ("FX") loss of $11.8 million

Selected Financial Information
Consolidated Statement of Earnings Data
(in thousands of dollars, except earnings per share and share data)

Q4'16 Q4'15 YE'16 YE'15
Revenue $ 96,367 $ 91,977 $ 381,550 $ 363,606
Gross margin 55,024 52,728 217,378 206,131
Earnings from operations 11,311 14,583 96,433 88,504
Earnings from operations before FX 23,125 21,296 93,795 87,093
Net earnings 8,279 11,154 70,886 66,410
Fully-diluted earnings per share $ 0.11 $ 0.15 $ 0.94 $ 0.87
Fully-diluted shares 74,725,908 75,073,524 74,843,493 75,033,398

Selected Financial Information
Consolidated Balance Sheet Data
(in thousands of dollars)

YE ' 16 YE ' 15
Cash and cash equivalents $ 123,102 $ 100,681
Working capital 314,912 294,895
Total assets 448,314 426,162
Shareholders' equity 366,205 353,471

Revenue
For the quarter ended April 30, 2016, revenues were $96.4 million as compared to revenues of $92.0 million for the quarter ended April 30, 2015. For the quarter, revenues in the United States/Canada region were $51.2 million as compared to $50.0 million in the same quarter last year. The International region had revenues of $45.1 million compared to $41.9 million in the same quarter last year.

For the year ended April 30, 2016, sales were $381.6 million, an increase of $18.0 or 5% as compared to sales of $363.6 million for the prior year. For the year, revenues in the United States/Canada region were $216.0 million as compared to $204.5 million in the prior year. The International region had revenues of $165.5 million compared to $159.2 million in the prior year.

Gross Margin
For the quarter ended April 30, 2016 gross margin was $55.0 million as compared to $52.7 million in the same quarter last year. Gross margin percentage was approximately 57.1% as compared to 57.3% in the quarter ended April 30, 2015.

For the year ended April 30, 2016 gross margin was $217.4 million as compared to $206.1 million for the year ended April 30, 2015. Gross margin percentage was approximately 57.0% for the year ended April 30, 2016 as compared to 56.7% for the prior year.

Earnings
For the quarter ended April 30, 2016 net earnings were $8.3 million as compared to $11.2 million in the corresponding period last year.

For the year ended April 30, 2016 net earnings were $70.9 million as compared to $66.4 million in the corresponding period last year.

For the quarter ended April 30, 2016, earnings per share on a fully-diluted basis were $0.11 as compared to $0.15 in the corresponding period last year.

For the year ended April 30, 2016, earnings per share on a fully-diluted basis were $0.94 as compared to $0.87 in the same period in 2015.

Operating Expenses
For the quarter ended April 30, 2016 selling and administrative expenses were $16.2 million as compared to $15.5 million for the quarter ended April 30, 2015.

For the year ended April 30, 2016, selling and administrative expenses were $61.0 as compared to $58.8 million for the year ended April 30, 2015.

For the quarter ended April 30, 2016 gross research and development expenses decreased by $0.3 million or 2% as compared to the corresponding period in 2015. Gross research and development expenses represented approximately 17.9% of revenue for the quarter ended April 30, 2016.

For the year ended April 30, 2016 gross research and development expenses increased by $2.6 million or 4% as compared to the prior year. Research and development expenses represented approximately 17.5% of sales.

Liquidity and Capital Resources
The Company's working capital as at April 30, 2016 was $314.9 million as compared to $294.9 million on April 30, 2015.

Cash and cash equivalents were $123.1 million as at April 30, 2016 as compared to $100.7 million on April 30, 2015.

Cash generated from operations was $10.1 million for the quarter ended April 30, 2016 as compared to cash used of $1.6 million for the quarter ended April 30, 2015. Before taking into account taxes and the changes in non-cash working capital and current taxes, the Company generated $12.7 million from operations for the quarter ended April 30, 2016 compared to $12.3 million for the same period last year.

Cash provided by operations was $91.2 million for the 2106 fiscal year as compared to cash provided by operations of $54.4 million for the 2015 fiscal year. Before taking into account taxes and the changes in non-cash working capital, the Company generated $85.5 million from operations for fiscal 2016 as compared to $78.7 million for fiscal 2015.

For the quarter, the Company used $0.8 million in investing activities largely a result of purchases in capital assets.

For the year, the Company used $3.9 million in investing activities, largely a result of purchases of capital assets.

For the quarter ended, the Company used cash in financing activities of $13.2 million which was principally a result of the payment of dividends of $13.4 million.

For the year ended April 30, 2016, the Company used cash in financing activities of $59.4 which was principally a result of the payment of dividends of $54.2 million and the repurchase of Capital Stock costing $9.4 million, partially offset by the issuance of Capital Stock pursuant to the Company's Stock Option Plan of $4.4 million.

Shipments and Backlog
At the end of May 2016, purchase order backlog was in excess of $69 million and shipments during the month of May 2016 were $21 million.

Dividend Declared

Evertz Board of Directors declared a regular quarterly dividend on June 8, 2016 of $0.18 per share.

The dividend is payable to shareholders of record on June 17, 2016 and will be paid on or about June 24, 2016.

Selected Consolidated Financial Information
(in thousands of dollars, except earnings per share and percentages)

Three month periods ended Twelve month periods ended
April 30, April 30,
2016 2015 2016 2015
Revenue $ 96,367 $ 91,977 $ 381,550 $ 363,606
Cost of goods sold 41,343 39,249 164,172 157,475
Gross margin 55,024 52,728 217,378 206,131
Gross margin % 57.1% 57.3% 57.0% 56.7%
Expenses
Selling and administrative 16,236 15,526 60,986 58,833
General 1,460 1,368 6,200 6,136
Research and development 17,284 17,623 66,892 64,332
Investment tax credits (3,081 ) (3,085 ) (10,495 ) (10,263 )
Foreign exchange loss (gain) 11,814 6,713 (2,638 ) (1,411 )
43,713 38,145 120,945 117,627
11,311 14,583 96,433 88,504
Finance income 317 227 772 830
Finance costs (84 ) (64 ) (534 ) (240 )
Other income and expenses (237 ) 160 124 325
Earnings before income taxes 11,307 14,906 96,795 89,419
Provision for (recovery of) income taxes
Current 1,270 4,817 24,582 25,154
Deferred 1,758 (1,065 ) 1,327 (2,145 )
3,028 3,752 25,909 23,009
Net earnings for the period $ 8,279 $ 11,154 $ 70,886 $ 66,410
Net earnings attributable to non-controlling interest $ 182 $ 228 $ 667 $ 910
Net earnings attributable to shareholders 8,097 10,926 70,219 65,500
Net earnings for the period $ 8,279 $ 11,154 $ 70,886 $ 66,410
Earnings per share
Basic $ 0.11 $ 0.15 $ 0.94 $ 0.88
Diluted $ 0.11 $ 0.15 $ 0.94 $ 0.87
April 30, April 30, April 30,
2016 2015 2014
Assets
Current assets
Cash and cash equivalents $ 123,102 $ 100,681 $ 101,956
Trade and other receivables 97,435 95,403 87,981
Prepaid expenses 6,307 8,426 4,704
Inventories 155,957 154,259 134,561
Income tax receivable 4,256 - 1,735
387,057 358,769 330,937
Property, Plant and Equipment 42,971 49,080 51,831
Goodwill 18,286 18,313 18,269
Intangible assets - - 243
$ 448,314 $ 426,162 $ 401,280
Liabilities
Current liabilities
Trade and other payables $ 49,815 $ 44,265 $ 44,888
Provisions 3,563 2,229 1,624
Deferred revenue 18,529 15,427 10,096
Current portion of long term debt 238 254 415
Income tax payable - 1,699 -
72,145 63,874 57,023
Long term debt 888 996 1,372
Deferred taxes 5,545 4,432 6,468
78,578 69,302 64,863
Equity
Capital stock 100,483 95,708 92,931
Share based payment reserve 13,835 12,418 10,217
Accumulated other comprehensive income 1,567 3,077 2,966
Retained earnings 250,320 242,268 227,364
251,887 245,345 230,330
Total equity attributable to shareholders 366,205 353,471 333,478
Non-controlling interest 3,531 3,389 2,939
369,736 356,860 336,417
$ 448,314 $ 426,162 $ 401,280

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 8, 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 416-849-1967 or toll-free (North America) 1-866-253-4709.

For those unable to listen to the live call, a rebroadcast will also be available until July 8, 2016. The rebroadcast can be accessed at 647-436-0148 or toll-free 1-888-203-1112. The pass code for the rebroadcast is 5006431.

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 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