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Evertz Technologies Reports Record Quarterly Revenue of $129 Million, Record Annual Revenue of $455 Million for Periods Ending April 30, 2023 and Record Backlog of $392 Million
June 21, 2023 6:31 PM EDT | Source: Evertz Technologies Limited
Burlington, Ontario--(Newsfile Corp. - June 21, 2023) - 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, 2023.
Fiscal 2023 Highlights
- Record Revenue of $454.6 million
- Record Backlog of $392 million as at May 31, 2023
- Earnings from operations of $95.6 million
- Net earnings of $64.6 million for the year
- Fully diluted earnings per share of $0.84 for the year
Fourth Quarter 2023 Highlights
- Record Quarterly revenue of $128.9 million, an increase of 11.1% from the prior year
- Earnings from operations up 13.4% to $30.5 million from the prior year
- Receipt of a purchase order in excess of $152 million from a major US based media company for Evertz Cloud software and services to be provided over a 5 year period
- Receipt of a purchase order in excess of $25 million from an International customer for a hybrid solution with next generation Evertz IP core, control, orchestration and visualization
- Net earnings of $18.6 million for the quarter
- Fully diluted earnings per share of $0.24 for the quarter
Selected Financial Information
Consolidated Statement of Earnings Data
(in thousands of dollars, except earnings per share and share data)
| Q4'23 | Q4'22 | YE'23 | YE'22 | |||||||||
| Revenue | $ | 128,919 | $ | 116,089 | $ | 454,578 | $ | 441,016 | ||||
| Gross margin | 76,647 | 68,340 | 268,258 | 255,315 | ||||||||
| Earnings from operations | 30,467 | 26,863 | 95,628 | 101,204 | ||||||||
| Earnings from operations (before Foreign Exchange) | 30,215 | 25,772 | 93,662 | 94,739 | ||||||||
| Net earnings | 18,551 | 19,213 | 64,555 | 72,677 | ||||||||
| Fully-diluted earnings per share | $ | 0.24 | $ | 0.25 | $ | 0.84 | $ | 0.94 | ||||
| Fully-diluted shares | 76,164,716 | 76,226,341 | 76,200,428 | 76,570,564 |
Selected Financial Information
Consolidated Balance Sheet Data
(in thousands of dollars)
| | YE ' 23 | YE '22 | ||||
| Cash and cash equivalents | $ | 12,468 | $ | 33,902 | ||
| Working capital | 171,428 | 158,947 | ||||
| Total assets | 436,652 | 420,979 | ||||
| Shareholders' equity | 243,099 | 230,938 |
Revenue
For the quarter ended April 30, 2023, revenues were $128.9 million compared to revenues of $116.1 million for the quarter ended April 30, 2022. For the quarter, revenues in the United States/Canada region were $98.0 million, an increase of $20.2 million, compared to $77.8 million in the same quarter last year. The International region had revenues of $30.9 million compared to $38.2 million in the same quarter last year.
For the year ended, April 30, 2023, sales were $454.6 million, compared to sales of $441.0 million for the year ended April 30, 2022. For the year, revenues in the United States/Canada region were $337.1 million, an increase of $37.7 million compared to $299.4 million in the prior year. The International region had revenues of $117.5 million compared to $141.7 million in the prior year.
Gross Margin
For the quarter ended April 30, 2023, gross margin was $76.6 million as compared to $68.3 million in the same quarter last year. Gross margin percentage was approximately 59.5% as compared to 58.9% in the quarter ended April 30, 2022.
For the year ended April 30, 2023, gross margin was $268.3 million as compared to $255.3 million for the year ended April 30, 2022. Gross margin percentage was approximately 59.0% as compared to 57.9% for the prior year.
Earnings
For the quarter ended April 30, 2023, net earnings were $18.6 million as compared to $19.2 million in the corresponding period last year.
For the year ended April 30, 2023, net earnings were $64.6 million as compared to $72.7 million in the corresponding period last year.
For the quarter ended April 30, 2023, earnings per share on a fully-diluted basis were $0.24 as compared to $0.25 in the corresponding period last year.
For the year ended April 30, 2023, earnings per share on a fully-diluted basis were $0.84 as compared to $0.94 in the same period in 2022.
Operating Expenses
For the quarter ended April 30, 2023, selling and administrative expenses were $17.5 million as compared to $16.1 million for the quarter ended April 30, 2022.
For the year ended April 30, 2023, selling and administrative expenses were $61.5 million as compared to $60.9 million for the year ended April 30, 2022.
For the quarter ended April 30, 2023, gross research and development expenses were $29.9 million as compared to $27.3 million for the quarter ended April 30, 2022.
For the year ended April 30, 2023, gross research and development expenses were $117.1 million as compared to $102.4 million for the year ended April 30, 2022.
Liquidity and Capital Resources
The Company's working capital as at April 30, 2023 was $171.4 million as compared to $158.9 million on April 30, 2022.
Cash was $12.5 million as at April 30, 2023 as compared to $33.9 million on April 30, 2022.
Cash generated from operations was $25.9 million for the quarter ended April 30, 2023 as compared to $21.5 million cash generated for the quarter ended April 30, 2022. Before taking into account taxes and the changes in non-cash working capital and current taxes, the Company generated $26.7 million from operations for the quarter ended April 30, 2023 compared to $23.9 million for the same period last year.
Cash provided by operations was $53.8 million for the 2023 fiscal year as compared to cash provided by operations of $68.7 million for the 2022 fiscal year. Before taking into account taxes and the changes in non-cash working capital and current taxes, the Company generated $91.5 million from operations for fiscal 2023 as compared to $93.0 million for fiscal 2022.
For the quarter, the Company generated $3.0 million from investing activities.
For the year, the Company used $17.1 million in investing activities which was principally driven by the acquisition of instruments held for trading of $14.4 million.
For the quarter ended, the Company used cash in financing activities of $10.6 million which was principally a result of the payment of dividends of $14.5 million.
For the year ended April 30, 2023, the Company used cash in financing activities of $58.0 million which was principally a result of the payment of dividends of $56.4 million.
Shipments and Backlog
At the end of May 2023, purchase order backlog was in excess of $392 million and shipments during the month of May 2023 were $40 million.
Dividend Declared
Evertz Board of Directors declared a regular quarterly dividend on June 21, 2023 of $0.19 per share.
The dividend is payable to shareholders of record on June 29, 2023 and will be paid on or about July 6, 2023.
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, | | ||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||
| Revenue | $ | 128,919 | $ | 116,089 | $ | 454,578 | $ | 441,016 | ||||
| Cost of goods sold | 52,273 | 47,749 | 186,320 | 185,701 | ||||||||
| Gross margin | 76,646 | 68,340 | 268,258 | 255,315 | ||||||||
| Expenses | ||||||||||||
| Selling and administrative | 17,521 | 16,139 | 61,518 | 60,883 | ||||||||
| General | 1,323 | 1,026 | 4,704 | 4,563 | ||||||||
| Research and development | 29,867 | 27,327 | 117,127 | 102,438 | ||||||||
| Investment tax credits | (3,503 | ) | (3,295 | ) | (13,415 | ) | (12,336 | ) | ||||
| Share based compensation | 1,223 | 1,370 | 4,662 | 5,028 | ||||||||
| Foreign exchange (gain) loss | (252 | ) | (1,091 | ) | (1,966 | ) | (6,465 | ) | ||||
| 46,179 | 41,476 | 172,630 | 154,111 | |||||||||
| Earnings before undernoted | 30,467 | 26,864 | 95,628 | 101,204 | ||||||||
| Finance income | 91 | 72 | 376 | 309 | ||||||||
| Finance costs | (2,290 | ) | (1,207 | ) | (3,718 | ) | (2,445 | ) | ||||
| Share of net loss of Investment in Associate | (3,277 | ) | (469 | ) | (5,364 | ) | (1,493 | ) | ||||
| Other income and expenses | 930 | 574 | 888 | 338 | ||||||||
| Earnings before income taxes | 25,921 | 25,834 | 87,810 | 97,913 | ||||||||
| Provision for (recovery of) income taxes | ||||||||||||
| Current | 8,521 | 7,477 | 25,066 | 26,959 | ||||||||
| Deferred | (1,151 | ) | (857 | ) | (1,811 | ) | (1,724 | ) | ||||
| 7,370 | 6,620 | 23,255 | 25,235 | |||||||||
| Net earnings for the period | $ | 18,551 | $ | 19,214 | $ | 64,555 | $ | 72,677 | ||||
| Net earnings attributable to non-controlling interest | 128 | 256 | 523 | 932 | ||||||||
| Net earnings attributable to shareholders | 18,423 | 18,957 | 64,032 | 71,745 | ||||||||
| Net earnings for the period | $ | 18,551 | $ | 19,213 | $ | 64,555 | $ | 72,677 | ||||
| Earnings per share | ||||||||||||
| Basic | $ | 0.24 | $ | 0.25 | $ | 0.84 | $ | 0.94 | | |||
| Diluted | $ | 0.24 | $ | 0.25 | $ | 0.84 | $ | 0.94 | | |||
| April 30, | April 30, | April 30, | | ||||||
| 2023 | 2022 | 2021 | |||||||
| Assets | |||||||||
| Current assets | |||||||||
| Cash and cash equivalents | $ | 12,468 | $ | 33,902 | $ | 108,771 | |||
| Trade and other receivables | 106,871 | 100,020 | 76,785 | ||||||
| Contract assets | 11,032 | 6,398 | 2,821 | ||||||
| Prepaid expenses | 10,319 | 5,930 | 6,559 | ||||||
| Inventories | 202,479 | 177,268 | 152,699 | ||||||
| 343,169 | 323,518 | 347,635 | |||||||
| Property, plant and equipment | 34,730 | 37,877 | 44,799 | ||||||
| Right-of-use assets | 20,396 | 24,637 | 23,570 | ||||||
| Goodwill | 21,333 | 21,033 | 21,140 | ||||||
| Intangible assets | 2,125 | 3,317 | 4,476 | ||||||
| Investment in Associate | 8,160 | 5,474 | 6,869 | ||||||
| Deferred income taxes | 6,739 | 5,123 | 3,304 | ||||||
| $ | 436,652 | $ | 420,979 | $ | 451,793 | ||||
| Liabilities | |||||||||
| Current liabilities | |||||||||
| Bank Indebtedness | $ | 5,928 | $ | - | $ | - | |||
| Trade and other payables | 75,521 | 68,405 | 66,727 | ||||||
| Provisions | 5,104 | 7,379 | 4,069 | ||||||
| Deferred revenue | 69,827 | 74,267 | 58,047 | ||||||
| Current potion of lease obligations | 4,060 | 4,088 | 4,122 | ||||||
| Current potion of redemption liability | 3,711 | 3,423 | - | ||||||
| Income tax payable | 7,590 | 7,009 | 155 | ||||||
| 171,741 | 164,571 | 133,120 | |||||||
| Long term redemption liability | - | - | 2,523 | ||||||
| Long term lease obligations | 18,827 | 22,760 | 21,245 | ||||||
| 190,568 | 187,331 | 156,888 | |||||||
| Equity | |||||||||
| Capital stock | 143,344 | 143,502 | 143,605 | ||||||
| Share based payment reserve | 14,696 | 10,893 | 9,514 | ||||||
| Accumulated other comprehensive income | (2,402 | ) | (4,093 | ) | (1,062 | ) | |||
| Retained earnings | 87,461 | 80,636 | 140,677 | ||||||
| 85,059 | 76,543 | 139,615 | |||||||
| Total equity attributable to shareholders | 243,099 | 230,938 | 292,734 | ||||||
| Non-controlling interest | 2,985 | 2,710 | 2,171 | ||||||
| 246,084 | 233,648 | 294,905 | |||||||
| $ | 436,652 | $ | 420,979 | $ | 451,793 |
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 21, 2023 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 416-764-8646 or toll-free (North America) 1-888-396-8049.
For those unable to listen to the live call, a rebroadcast will also be available until July 21, 2023. The rebroadcast can be accessed at 416-764-8692 or toll-free 1-877-647-7070. The pass code for the rebroadcast is 998178.
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".
For further information please contact:
Doug Moore, CPA, CA
Chief Financial Officer
(905) 335-3700
ir@evertz.com
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/170909