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Evertz Technologies Reports $121 Million Revenue for the Quarter Ended January 31, 2020

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Burlington, Ontario–(Newsfile Corp. – March 11, 2020) – Evertz Technologies Limited (TSX: ET), the leader in Software Defined Video Network (“SDVN”) technology, today reported its results for the third quarter ended January 31, 2020.

Third Quarter 2020 Highlights

  • Quarterly revenue of $121.2 million
  • Quarterly revenue in the International region of $51.7 million, an increase of 31% from the prior year
  • Net earnings of $19.4 million for the quarter
  • Fully diluted earnings per share of $0.25 for the quarter

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

Q3 ‘ 20 Q3 ‘ 19
Revenue $ 121,226 $ 120,942
Gross margin 67,849 67,697
Earnings from operations 26,206 28,168
Net earnings 19,401 21,935
Fully-diluted earnings per share $ 0.25 $ 0.28
Fully-diluted shares 76,780,796 76,528,720

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

Q3 ‘ 20 YE ’19
Cash and cash equivalents $ 51,653 $ 104,583
Working capital 224,966 282,521
Total assets 437,338 466,597
Shareholders’ equity 296,228 353,123

Revenue

For the quarter ended January 31, 2020, revenues were $121.2 million, an increase of $0.3 million compared to revenues of $120.9 million for the quarter ended January 31, 2019. For the quarter, revenues in the United States/Canada region were $69.5 million compared to $81.5 million in the same quarter last year. The International region had revenues of $51.7 million, an increase of $12.2 million compared to $39.5 million in the same quarter last year.

Gross Margin

For the quarter ended January 31, 2020, gross margin was $67.8 million as compared to $67.7 million in the same quarter last year. Gross margin percentage was approximately 56.0% as compared to 56.0% in the quarter ended January 31, 2019.

Earnings

For the quarter ended January 31, 2020, net earnings were $19.4 million as compared to $21.9 million in the corresponding period last year.

For the quarter ended January 31, 2020, earnings per share on a fully-diluted basis were $0.25 as compared to $0.28 in the corresponding period last year.

Operating Expenses

For the quarter ended January 31, 2020, selling and administrative expenses were $17.9 million as compared to $17.6 million for the quarter ended January 31, 2019.

For the quarter ended January 31, 2020, gross research and development expenses were $24.0 million as compared to $21.6 million for the quarter ended January 31, 2019.

Liquidity and Capital Resources

The Company’s working capital as at January 31, 2020 was $225.0 million as compared to $282.5 million on April 30, 2019.

Cash and cash equivalents were $51.7 million as at January 31, 2020 as compared to $104.6 million on April 30, 2019.

Cash generated from operations was $67.3 million for the quarter ended January 31, 2020 as compared to $48.1 million for the quarter ended January 31, 2019. Before taking into account taxes and the changes in non-cash working capital and current taxes, the Company generated $23.7 million from operations for the quarter ended January 31, 2020 compared to $22.9 million for the same period last year.

For the quarter, the Company used $2.8 million for investing activities.

For the quarter ended, the Company used cash in financing activities of $18.8 million which was principally a result of the payment of dividends of $13.8 million.

Shipments and Backlog

At the end of February 2020, purchase order backlog was in excess of $93 million and shipments during the month of February 2020 were $39 million.

Dividend Declared

Evertz Board of Directors declared a regular quarterly dividend on March 11, 2020 of $0.18 per share.

The dividend is payable to shareholders of record on March 20, 2020 and will be paid on or about March 27, 2020.

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

Three month period ended Nine month period ended
January 31, January 31,
2020 2019 2020 2019
Revenue $ 121,226 $ 120,942 $ 344,425 $ 336,311
Cost of goods sold 53,377 53,245 148,102 145,678
Gross margin 67,849 67,697 196,323 190,633
Expenses
Selling and administrative 17,863 17,570 52,197 49,864
General 927 897 2,685 2,398
Research and development 23,993 21,571 69,625 63,974
Investment tax credits (2,056 ) (2,136 ) (6,037 ) (6,072 )
Share based compensation 1,186 1,245 4,058 3,152
Foreign exchange (gain) loss (270 ) 382 2,637 (1,528 )
41,643 39,529 125,165 111,788
Earnings before undernoted 26,206 28,168 71,158 78,845
Finance income 84 295 896 964
Finance costs (511 ) (152 ) (1,375 ) (661 )
Other income and expenses 162 1,081 303 1,221
Earnings before income taxes 25,941 29,392 70,982 80,369
Provision for (recovery of) income taxes
Current 6,798 8,033 18,072 21,527
Deferred (258 ) (576 ) (224 ) (1,035 )
6,540 7,457 17,848 20,492
Net earnings for the period $ 19,401 $ 21,935 $ 53,134 $ 59,877
Net earnings attributable to non-controlling interest 143 241 427 564
Net earnings attributable to shareholders 19,258 21,694 52,707 59,313
Net earnings for the period $ 19,401 $ 21,935 $ 53,134 $ 59,877
Earnings per share
Basic $ 0.25 $ 0.28 $ 0.69 $ 0.78
Diluted $ 0.25 $ 0.28 $ 0.69 $ 0.78
Consolidated Balance Sheet Data As at As at
January 31, 2020 April 30, 2019
Cash and marketable securities $ 51,653 $ 108,606
Inventory $ 168,626 $ 171,271
Working capital $ 224,966 $ 282,521
Total assets $ 437,338 $ 466,597
Shareholders’ equity $ 296,228 $ 353,123
Number of common shares outstanding:
Basic 76,601,646 76,545,246
Fully-diluted 78,170,646 77,958,746
Weighted average number of shares outstanding:
Basic 76,666,791 76,510,417
Fully-diluted 76,745,929 76,529,799

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 March 11, 2020 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 9767391.

For those unable to listen to the live call, a rebroadcast will also be available until April 10, 2020. The rebroadcast can be accessed at 647-436-0148 or toll-free 1-888-203-1112. The pass code for the rebroadcast is 9767391.

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:

Doug Moore, CPA, CA
Chief Financial Officer
Evertz Technologies Limited
(905) 335-3700 ext 2256
www.evertz.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/53361