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

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

		Three month period ended							Six month period ended
			October 31,						October 31,
			2016			2015			2016			2015
Revenue		$	99,592		$	100,560		$	186,618		$	185,429
Cost of goods sold			42,481			43,026			79,641			80,066
Gross margin			57,111			57,534			106,977			105,363
Expenses
	Selling and administrative		15,289			14,827			30,175			29,629
	General		2,017			1,643			3,967			3,238
	Research and development		17,780			16,127			35,273			32,379
	Investment tax credits		(2,411	)		(2,411	)		(5,060	)		(4,895	)
	Foreign exchange (gain) loss		(3,450	)		633			(10,054	)		(7,079	)
			29,225			30,819			54,301			53,272
Earnings before undernoted			27,886			26,715			52,676			52,091
Finance income			464			180			780			338
Finance costs			(69	)		(200	)		(122	)		(322	)
Other income and expenses			(32	)		188			37			150
Earnings before income taxes			28,249			26,883			53,371			52,257
Provision for (recovery of) income taxes
	Current		6,969			7,995			15,641			15,968
	Deferred		520			(731	)		(1,653	)		(1,928	)
			7,489			7,264			13,988			14,040
Net earnings for the period		$	20,760		$	19,619		$	39,383		$	38,217
Net earnings attributable to non-controlling interest			177			133			407			320
Net earnings attributable to shareholders			20,583			19,486			38,976			37,897
Net earnings for the period		$	20,760		$	19,619		$	39,383		$	38,217
Earnings per share
Basic		$	0.28		$	0.26		$	0.52		$	0.51
Diluted		$	0.27		$	0.26		$	0.52		$	0.51

Consolidated Balance Sheet Data		As at			As at
		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:
	Basic		75,348,496		74,188,746
	Fully -diluted		78,587,246		78,595,246
Weighted average number of shares outstanding:
	Basic		74,463,363		74,360,423
	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.