Evertz Technologies Reports First Quarter Results for the Quarter Ended July 31, 2020

Burlington, Ontario--(Newsfile Corp. - September 9, 2020) - 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, 2020.

First Quarter 2021 Highlights

  • Quarterly revenue of $56.3 million
  • Earnings from operations before foreign exchange of $4.0 million
  • Net earnings of $0.6 million for the quarter

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

     Q1 ' 21 
   Q1 ' 20 
Revenue $ 56,337
$ 103,411
Gross margin   32,224
  59,152
Earnings from operations before foreign exchange   4,044
  19,506
Earnings from operations   935
  17,729
Net earnings   575
  13,207
Fully-diluted earnings per share $ 0.01
$ 0.17
Fully-diluted shares   76,449,446
  76,673,167

 

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

     Q1 ' 21 
   YE '20 
Cash and cash equivalents $ 102,035
$ 75,025
Working capital   218,807
  223,720
Total assets   443,668
  443,673
Shareholders' equity   290,365
  295,012

 

Revenue

For the quarter ended July 31, 2020, revenues were $56.3 million compared to revenues of $103.4 million for the quarter ended July 31, 2019. For the quarter, revenues in the United States/Canada region were $35.9 million compared to $74.0 million in the same quarter last year. The International region had revenues of $20.4 million compared to $29.4 million in the same quarter last year.

Gross Margin

For the quarter ended July 31, 2020, gross margin was $32.2 million as compared to $59.2 million in the same quarter last year. Gross margin percentage was approximately 57.2% as compared to 57.2% in the quarter ended July 31, 2019.

Earnings

For the quarter ended July 31, 2020, net earnings were $0.6 million as compared to $13.2 million in the corresponding period last year.

For the quarter ended July 31, 2020, earnings per share on a fully-diluted basis were $0.01 as compared to $0.17 in the corresponding period last year.

Operating Expenses

For the quarter ended July 31, 2020, selling and administrative expenses were $11.9 million as compared to $16.3 million for the quarter ended July 31, 2019.

For the quarter ended July 31, 2020, gross research and development expenses were $16.6 million as compared to $22.7 million for the quarter ended July 31, 2019.

Liquidity and Capital Resources

The Company's working capital as at July 31, 2020 was $218.8 million as compared to $223.7 million on April 30, 2020.

Cash was $102.0 million as at July 31, 2020 as compared to $75.0 million on April 30, 2020.

Cash generated from operations was $36.3 million for the quarter ended July 31, 2020 as compared to $7.9 million for the quarter ended July 31, 2019. Before taking into account taxes and the changes in non-cash working capital and current taxes, the Company generated $4.1 million from operations for the quarter ended July 31, 2020 compared to $18.5 million for the same period last year.

For the quarter, the Company used $1.8 million for investing activities.

For the quarter ended, the Company used cash in financing activities of $8.3 million which was principally a result of the payment of dividends of $6.9 million.

Shipments and Backlog

At the end of August 2020, purchase order backlog was in excess of $118 million and shipments during the month of August 2020 were $36 million.

Dividend Declared

Evertz Board of Directors declared a regular quarterly dividend on September 9, 2020 of $0.09 per share.

The dividend is payable to shareholders of record on September 18, 2020 and will be paid on or about September 25, 2020.

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

    Three months ended
July 31, 2020
    Three months ended
July 31, 2019
 
Revenue $ 56,337   $ 103,411  
Cost of goods sold   24,113     44,259  
Gross margin $ 32,224   $ 59,152  
             
Expenses            
   Selling and administrative   11,920     16,330  
   General   895     894  
   Research and development   16,576     22,694  
   Investment tax credits   (1,485 )   (2,003 )
   Share based compensation   274     1,731  
   Foreign exchange loss   3,109     1,777  
    31,289     41,423  
Earnings before undernoted $ 935   $ 17,729  
             
Finance income   93     451  
Finance costs   (351 )   (463 )
Other income and expenses   108     41  
Earnings before income taxes $ 785   $ 17,758  
             
Provision for (recovery of) income taxes            
   Current   1,407     3,567  
   Deferred   (1,197 )   984  
  $ 210   $ 4,551  
             
Net earnings for the period $ 575   $ 13,207  
             
Net earnings attributable to non-controlling interest   90     130  
Net earnings attributable to shareholders   485     13,077  
Net earnings for the period $ 575   $ 13,207  
             
Earnings per share:            
   Basic $ 0.01   $ 0.17  
   Diluted $ 0.01   $ 0.17  

 

Consolidated Balance Sheet Data   As at
July 31, 2020

  As at
April 30, 2020

Cash and marketable securities $ 102,035
$ 75,025
Inventory $ 163,059
$ 161,985
Working capital $ 218,807
$ 223,720
Total assets $ 443,668
$ 443,673
Shareholders' equity $ 290,365
$ 295,012
     
   
Number of common shares outstanding:    
   
   Basic   76,449,446
  76,449,446
   Fully-diluted   82,015,946
  78,077,946
     
   
Weighted average number of shares outstanding:    
   
   Basic   76,449,446
  76,624,706
   Fully-diluted   76,449,446
  76,642,787

 

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 9, 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 647-490-5367 or toll-free (North America) 1-800-367-2403, access code 7193166.

For those unable to listen to the live call, a rebroadcast will also be available until October 9, 2020. The rebroadcast can be accessed at 647-436-0148 or toll-free 1-888-203-1112. The pass code for the rebroadcast is 7193166.

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
Chief Financial Officer
(905) 335-7580
ir@evertz.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/63508

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