BURLINGTON, Ontario, Sept. 11, 2018 (GLOBE NEWSWIRE) -- Evertz Technologies Limited (TSX:ET), the leader in Software Defined Video Network (“SDVN”) technology, today reported its results for the first quarter ended July 31, 2018.

First Quarter 2019 Highlights

  • Quarterly revenue of $103.1 million, up 11% sequentially
  • US/Canada revenue up 15% to $75.2 million from the prior year
  • Net earnings of $17.4 million for the quarter, up 32% from the prior year
  • Fully diluted earnings per share of $0.23 for the quarter, up 35% from the prior year

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

    
  Q1 '19   Q1 '18 
Revenue$103,089 $109,009
Gross margin58,778 61,161
Earnings from operations23,289 18,172
Net earnings17,361 13,192
Fully-diluted earnings per share$0.23 $0.17
Fully-diluted shares76,514,508 76,019,562
    

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

  Q1 '19   YE '18 
Cash and marketable securities$102,662 $94,184
Working capital268,427 264,514
Total assets433,215 421,115
Shareholders' equity331,934 329,227
                                    

Revenue
For the quarter ended July 31, 2018, revenues were $103.1 million, compared to revenues of $109.0 million for the quarter ended July 31, 2017.  For the quarter, revenues in the United States/Canada region were $75.2 million, compared to $65.4 million in the same quarter last year.  The International region had revenues of $27.9 million, compared to $43.6 million in the same quarter last year.

Gross Margin
For the quarter ended July 31, 2018, gross margin was $58.8 million as compared to $61.2 million in the same quarter last year.  Gross margin percentage was approximately 57.0% as compared to 56.1% in the quarter ended July 31, 2017.

Earnings
For the quarter ended July 31, 2018, net earnings were $17.4 million as compared to $13.2 million in the corresponding period last year.

For the quarter ended July 31, 2018, earnings per share on a fully-diluted basis were $0.23 as compared to $0.17 in the corresponding period last year.

Operating Expenses
For the quarter ended July 31, 2018, selling and administrative expenses were $15.9 million as compared to $15.8 million for the quarter ended July 31, 2017. 

For the quarter ended July 31, 2018, gross research and development expenses were $21.3 million as compared to $19.3 million for the quarter ended July 31, 2017.

Liquidity and Capital Resources
The Company’s working capital as at July 31, 2018 was $268.4 million as compared to $264.5 million on April 30, 2018.

Cash and marketable securities were $102.7 million as at July 31, 2018 as compared to $94.2 million on April 30, 2018.

Cash generated from operations was $24.2 million for the quarter ended July 31, 2018 as compared to $32.2 million for the quarter ended July 31, 2017.  Before taking into account taxes and the changes in non-cash working capital and current taxes, the Company generated $20.3 million from operations for the quarter ended July 31, 2018 compared to $15.5 million for the same period last year.

For the quarter, the Company used $13.0 million from investing activities which was principally driven by the purchase of marketable securities of $10.8 million and capital equipment of $2.3 million.

For the quarter ended, the Company used cash in financing activities of $13.5 million which was principally a result of the payment of dividends of $13.8 million.

Shipments and Backlog
At the end of August 2018, purchase order backlog was in excess of $81 million and shipments during the month of August 2018 were $41 million. 

Dividend Declared

Evertz Board of Directors declared a regular quarterly dividend on September 11, 2018 of $0.18 per share.

The dividend is payable to shareholders of record on September 21, 2018 and will be paid on or about September 28, 2018.

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

     
  Three months ended Three months ended
  July 31, 2018 July 31, 2017
Revenue $103,089 $109,009
Cost of goods sold 44,311 47,848
Gross margin $58,778 $61,161
     
Expenses    
Selling and administrative 15,905 15,827
General 1,339 2,097
Research and development 21,320 19,272
Investment tax credits (2,003) (2,451)
Foreign exchange (gain) loss (1,072) 8,244
  35,489 42,989
Earnings before undernoted $23,289 $18,172
     
Finance income 359 101
Finance costs (426) (48)
Other income and expenses 135 29
Earnings before income taxes $23,357 $18,254
     
Provision for (recovery of) income taxes    
Current 5,618 5,855
Deferred 378 (793)
  $5,996 $5,062
     
Net earnings for the period $17,361 $13,192
     
Net earnings attributable to non-controlling interest 88 114
Net earnings attributable to shareholders 17,273 13,078
Net earnings for the period $17,361 $13,192
     
Earnings per share:    
Basic $0.23 $0.17
Diluted $0.23 $0.17


Consolidated Balance Sheet Data As at As at
  July 31, 2018 April 30, 2018
Cash and marketable securities $102,662 $94,184
Inventory $167,109 $168,070
Working capital $268,427 $264,514
Total assets $433,215 $421,115
Shareholders' equity $331,934 $329,227
     
Number of common shares outstanding:    
Basic 76,497,746 76,481,746
Fully-diluted 78,739,746 78,722,746
     
Weighted average number of shares outstanding:    
Basic 76,488,876 76,211,007
Fully-diluted 76,514,508 76,347,750
     

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 September 11, 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 3157015.

For those unable to listen to the live call, a rebroadcast will also be available until October 11, 2018.  The rebroadcast can be accessed at 647-436-0148 or toll‑free 1-888-203-1112.  The pass code for the rebroadcast is 3157015.

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”.


Anthony Gridley
Chief Financial Officer
(905) 335‑7580
ir@evertz.com