BURLINGTON, Ontario, June 19, 2018 (GLOBE NEWSWIRE) -- 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, 2018.

Fiscal 2018 Highlights

  • Revenue of $402.8 million, up 5% from the prior year
  • US/Canada revenue up 10% to $252.8 million for the year
  • Net earnings of $53.5 million for the year, inclusive of a foreign exchange (“FX”) loss of $4.7 million
  • Fully diluted earnings per share of $0.70 for the year

Fourth Quarter 2018 Highlights

  • Fourth quarter revenue of $93.0 million
  • Net earnings of $8.3 million for the quarter
  • Fully diluted earnings per share of $0.11 for the quarter

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

   Q4'18   Q4'17   YE'18   YE'17 
Revenue $  92,988 $  106,734 $  402,832 $  384,432
Gross margin    49,009    60,044    222,901    218,144
Earnings from operations    11,603    27,513    70,684    92,608
Net earnings    8,269    20,685    53,546    69,773
Fully-diluted earnings per share $  0.11 $  0.27 $  0.70 $  0.92
Fully-diluted shares  76,517,551  75,825,621  76,347,750  75,374,204
         

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

  YE '18   YE '17 
Cash and cash equivalents$  94,184 $  54,274
Working capital   264,514    264,586
Total assets   421,115    410,568
Shareholders' equity   329,227    317,830
    

Revenue
For the quarter ended April 30, 2018, revenues were $93.0 million, compared to revenues of $106.7 million for the quarter ended April 30, 2017.  For the quarter, revenues in the United States/Canada region were $52.1 million, compared to $57.9 million in the same quarter last year.  The International region had revenues of $40.9 million, compared to $48.9 million in the same quarter last year.

For the year ended April 30, 2018, sales were $402.8 million, an increase of $18.4 million or 5% as compared to sales of $384.4 million for the prior year.  For the year, revenues in the United States/Canada region were $252.8 million as compared to $229.1 million in the prior year.  The International region had revenues of $150.1 million compared to $155.4 million in the prior year.

Gross Margin
For the quarter ended April 30, 2018, gross margin was $49.0 million as compared to $60.0 million in the same quarter last year.  Gross margin percentage was approximately 52.7% as compared to 56.3% in the quarter ended April 30, 2017.

For the year ended April 30, 2018, gross margin was $222.9 million as compared to $218.1 million for the year ended April 30, 2017.  Gross margin percentage was approximately 55.3% for the year ended April 30, 2017 as compared to 56.7% for the prior year.

Earnings
For the quarter ended April 30, 2018, net earnings were $8.3 million as compared to $20.7 million in the corresponding period last year.

For the year ended April 30, 2018, net earnings were $53.5 million as compared to $69.8 million in the corresponding period last year.

For the quarter ended April 30, 2018, earnings per share on a fully-diluted basis were $0.11 as compared to $0.27 in the corresponding period last year.

For the year ended April 30, 2018, earnings per share on a fully-diluted basis were $0.70 as compared to $0.92 in the same period in 2017.

Operating Expenses
For the quarter ended April 30, 2018, selling and administrative expenses were $17.8 million as compared to $16.4 million for the quarter ended April 30, 2017. 

For the year ended April 30, 2018, selling and administrative expenses were $65.5 million as compared to $62.1 million for the year ended April 30, 2017.

For the quarter ended April 30, 2018, gross research and development expenses were $21.0 million as compared to $19.9 million for the quarter ended April 30, 2017.

For the year ended April 30, 2018, gross research and development expenses were $80.8 million as compared to $73.7 million for the year ended April 30, 2017.

Liquidity and Capital Resources
The Company’s working capital as at April 30, 2018 was $264.5 million as compared to $264.6 million on April 30, 2017.

Cash and cash equivalents were $94.2 million as at April 30, 2018 as compared to $54.3 million on April 30, 2017.

Cash generated from operations was $18.3 million for the quarter ended April 30, 2018 as compared to $6.0 million for the quarter ended April 30, 2017.  Before taking into account taxes and the changes in non-cash working capital and current taxes, the Company generated $9.1 million from operations for the quarter ended April 30, 2018 compared to $23.8 million for the same period last year.

Cash provided by operations was $98.4 million for the 2018 fiscal year as compared to cash provided by operations of $64.5 million for the 2017 fiscal year.  Before taking into account taxes and the changes in non-cash working capital, the Company generated $57.6 million from operations for fiscal 2018 as compared to $81.1 million for fiscal 2017.

For the quarter, the Company used $8.7 million from investing activities which was principally driven by the purchase of equipment of $9.0 million for manufacturing and research and development.

For the year, the Company used $13.3 million in investing activities, largely a result of $18.2 million in purchases of property, plant and equipment, partially offset by proceeds from disposals of equipment of $6.5 million.

For the quarter ended, the Company used cash in financing activities of $13.8 million which was principally a result of the payment of dividends of $13.8 million.

For the year ended April 30, 2018, the Company used cash in financing activities of $44.5 million which was principally a result of the payment of dividends of $55.4 million, partially offset by the issuance of Capital Stock pursuant to the Company’s Stock Option Plan of $11.1 million.

Shipments and Backlog
At the end of May 2018, purchase order backlog was in excess of $85 million and shipments during the month of May 2018 were $32 million. 

Dividend Declared
Evertz Board of Directors declared a regular quarterly dividend on June 19, 2018 of $0.18 per share.

The dividend is payable to shareholders of record on June 29, 2018 and will be paid on or about July 6, 2018.

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

          
 Three month period ended Twelve month period ended
 April 30, April 30,
  2018  2017   2018  2017 
Revenue$  92,988 $  106,734  $  402,832 $  384,432 
Cost of goods sold   43,979    46,690     179,931    166,288 
Gross margin   49,009    60,044     222,901    218,144 
          
Expenses         
  Selling and administrative   17,832    16,431     65,531    62,135 
  General   1,980    2,417     7,898    8,951 
  Research and development   21,017    19,942     80,804    73,699 
  Investment tax credits   1,038    (2,149)    (6,743)   (9,362)
  Foreign exchange (gain) loss   (4,461)   (4,110)    4,727    (9,887)
    37,406    32,531     152,217    125,536 
Earnings before undernoted   11,603    27,513     70,684    92,608 
          
Finance income   272    (117)    781    1,321 
Finance costs   (96)   (46)    (455)   (242)
Other income and expenses   (87)   47     1,956    (141)
Earnings before income taxes   11,692    27,397     72,966    93,546 
Provision for (recovery of) income taxes         
  Current   5,151    6,969     24,076    25,160 
  Deferred   (1,728)   (257)    (4,656)   (1,387)
    3,423    6,712     19,420    23,773 
          
Net earnings for the period$  8,269 $  20,685  $  53,546 $  69,773 
          
Net earnings attributable to non-controlling interest   79    138     460    613 
Net earnings attributable to shareholders   8,190    20,547     53,086    69,160 
Net earnings for the period$  8,269 $  20,685  $  53,546 $  69,773 
          
Earnings per share         
Basic$  0.11 $  0.27  $  0.70 $  0.92 
Diluted$  0.11 $  0.27  $  0.70 $  0.92 
          


 April 30, April 30, April 30, 
  2018  2017  2016 
       
Assets      
Current assets      
  Cash and cash equivalents$  94,184$  54,274$  123,102
  Trade and other receivables   86,071   111,664   97,435
  Prepaid expenses   5,506   4,075   6,307
  Inventories   168,070   178,208   155,957
  Income tax receivable   -   -   4,256
    353,831   348,221   387,057
    
Property, Plant and Equipment   47,915   44,152   42,971
Goodwill   18,168   18,195   18,286
Deferred income taxes   1,201   -   -
 $  421,115$  410,568$  448,314
       
Liabilities      
Current liabilities   
  Trade and other payables$  56,377$  50,321$  49,815
  Provisions   3,981   3,817   3,563
  Deferred revenue   28,502   28,272   18,529
  Current portion of long term debt   383   280   238
  Income tax payable   74   945   -
    89,317   83,635   72,145
       
Long term debt   515   733   888
Deferred taxes   -   4,427   5,545
    89,832   88,795   78,578
       
Equity      
Capital stock   138,675   124,695   100,483
Share based payment reserve   7,885   10,091   13,835
       
Accumulated other comprehensive income   2,149   747   1,567
Retained earnings   180,518   182,297   250,320
    182,667   183,044   251,887
       
Total equity attributable to shareholders   329,227   317,830   366,205
Non-controlling interest   2,056   3,943   3,531
    331,283   321,773   369,736
 $  421,115$  410,568$  448,314
       

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 19, 2018 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) 1-888-297-0356, access code 5737026.

For those unable to listen to the live call, a rebroadcast will also be available until July 19, 2018.  The rebroadcast can be accessed at 647-436-0148 or toll‑free 1-888-203-1112.  The pass code for the rebroadcast is 5737026.

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 efficient signal routing, distribution, monitoring and management of content as well as the automation and orchestration of more streamlined and agile workflow processes on premise and in the “Cloud”.

Contact:
Anthony Gridley
Chief Financial Officer
(905) 335-3701