BURLINGTON, Ontario, Dec. 05, 2018 (GLOBE NEWSWIRE) -- 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, 2018.

Second Quarter 2019 Highlights

  • Record quarterly revenue of $112.3 million, up 11% from the prior year
  • US/Canada revenue up 18% to $75.5 million from the prior year
  • Net earnings of $20.6 million for the quarter, up 18% from the prior year
  • Fully diluted earnings per share of $0.27 for the quarter, up 17% from the prior year
     
Selected Financial Information
Consolidated Statement of Earnings Data
(in thousands of dollars, except earnings per share and share data)
     
   Q2 '19   Q2 '18 
Revenue $112,280 $101,261
Gross margin  64,158  56,752
Earnings from operations  27,388  23,874
Net earnings  20,581  17,429
Fully-diluted earnings per share $0.27 $0.23
Fully-diluted shares  76,516,761  76,313,441
     
Selected Financial Information
Consolidated Balance Sheet Data
(in thousands of dollars)
    
   Q2 '19   YE '18 
Cash and marketable securities $78,949 $94,184
Working capital  274,457  264,514
Total assets  431,999  421,115
Shareholders' equity  338,784  329,227
     

Revenue
For the quarter ended October 31, 2018, revenues were $112.3 million, compared to revenues of $101.3 million for the quarter ended October 31, 2017.  For the quarter, revenues in the United States/Canada region were $77.5 million, an increase of 18%, compared to $66.0 million in the same quarter last year.  The International region had revenues of $34.8 million, compared to $35.3 million in the same quarter last year.

Gross Margin
For the quarter ended October 31, 2018, gross margin was $64.2 million as compared to $56.8 million in the same quarter last year.  Gross margin percentage was approximately 57.1% as compared to 56.0% in the quarter ended October 31, 2017.

Earnings
For the quarter ended October 31, 2018, net earnings were $20.6 million as compared to $17.4 million in the corresponding period last year.

For the quarter ended October 31, 2018, earnings per share on a fully-diluted basis were $0.27 as compared to $0.23 in the corresponding period last year.

Operating Expenses
For the quarter ended October 31, 2018, selling and administrative expenses were $16.4 million as compared to $16.0 million for the quarter ended October 31, 2017. 

For the quarter ended October 31, 2018, gross research and development expenses were $21.1 million as compared to $20.2 million for the quarter ended October 31, 2017.

Liquidity and Capital Resources
The Company’s working capital as at October 31, 2018 was $274.5 million as compared to $264.5 million on April 30, 2018.

Cash and marketable securities were $78.9 million as at October 31, 2018 as compared to $94.2 million on April 30, 2018.

Cash used from operations was $7.6 million for the quarter ended October 31, 2018 as compared to $2.8 million for the quarter ended October 31, 2017.  Before taking into account taxes and the changes in non-cash working capital and current taxes, the Company generated $22.7 million from operations for the quarter ended October 31, 2018 compared to $20.1 million for the same period last year.

For the quarter, the Company used $5.9 million from investing activities which was principally driven by the purchase of marketable securities of $2.9 million and capital equipment of $3.1 million.

For the quarter ended, the Company used cash in financing activities of $14.0 million which was principally a result of the payment of dividends of $14.1 million.

Acquisition
On November 1, 2018, the Company acquired Quintech Electronics and Communications, Inc. (“Quintech”), a privately held company headquartered in Indiana, Pennsylvania, USA, with world class RF solutions and products deployed in over 120 countries.  The acquisition was completed for cash consideration of $6.6 million at closing with a working capital adjustment to be completed in the third quarter.  

Shipments and Backlog
At the end of November 2018, purchase order backlog was in excess of $103 million and shipments during the month of November 2018 were $38 million.  

Dividend Declared
Evertz Board of Directors declared a regular quarterly dividend on December 5, 2018 of $0.18 per share.

The dividend is payable to shareholders of record on December 14, 2018 and will be paid on or about December 21, 2018.

          
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,
  2018  2017   2018  2017 
Revenue$112,280 $101,261  $215,369 $210,270 
Cost of goods sold 48,122  44,509   92,433  92,357 
Gross margin 64,158  56,752   122,936  117,913 
              
Expenses             
Selling and administrative 16,389  16,026   32,294  31,853 
General 2,069  2,370   3,408  4,467 
Research and development 21,083  20,214   42,403  39,486 
Investment tax credits (1,933) (2,850)  (3,936) (5,301)
Foreign exchange (gain) loss (838) (2,882)  (1,910) 5,362 
  36,770  32,878   72,259  75,867 
Earnings before undernoted 27,388  23,874   50,677  42,046 
              
Finance income 310  174   669  275 
Finance costs (83) (157)  (509) (205)
Other income and expenses 5  (75)  140  (46)
Earnings before income taxes 27,620  23,816   50,977  42,070 
Provision for (recovery of) income taxes             
Current 7,876  6,515   13,494  12,370 
Deferred (837) (128)  (459) (921)
  7,039  6,387   13,035  11,449 
              
Net earnings for the period$20,581 $17,429  $37,942 $30,621 
          
Net earnings attributable to non-controlling interest 235  143   323  257 
Net earnings attributable to shareholders 20,346  17,286   37,619  30,364 
Net earnings for the period$20,581 $17,429  $37,942 $30,621 
              
Earnings per share             
Basic$0.27 $0.23  $0.49 $0.40 
Diluted$0.27 $0.23  $0.49 $0.40 

 

Consolidated Balance Sheet Data  As at   As at 
   October 31, 2018   April 30, 2018 
Cash and cash equivalents $65,189  $94,184 
Inventory $171,430  $168,070 
Working capital $274,457  $264,514 
Total assets $431,999  $421,115 
Shareholders' equity $338,784  $329,227 
         
Number of common shares outstanding:        
Basic  76,519,746   76,481,746 
Fully-diluted  79,036,246   78,722,746 
         
Weighted average number of shares outstanding:        
Basic  76,497,637   76,211,007 
Fully-diluted  76,516,761   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 December 5, 2018 at 5:00 p.m. (EST).  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 2223034.

For those unable to listen to the live call, a rebroadcast will also be available until January 4, 2019.  The rebroadcast can be accessed at 647-436-0148 or toll‑free 1-888-203-1112.  The pass code for the rebroadcast is 2223034.

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