Evertz Technologies Reports Second Quarter Results for the Quarter Ended October 31, 2020

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

Second Quarter 2021 Highlights

  • Quarterly revenue of $100.5 million
  • Earnings from operations before foreign exchange of $30 million
  • Net earnings of $21.2 million for the quarter
  • Fully diluted earnings per share of $0.28 for the quarter

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

     
 Q2 ' 21 
   Q2 ' 20 
Revenue   $
100,482
$ 119,788
Gross margin    
59,659
  69,322
Earnings from operations before foreign exchange  
29,971
  28,353
Earnings from operations    
28,672
  27,223
Net earnings    
21,188
  20,526
Fully-diluted earnings per share   $
0.28
$ 0.27
Fully-diluted shares    
76,488,271
  76,783,365

 

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

 
 Q2 ' 21 

 YE '20 
Cash and cash equivalents $110,042
$75,025
Working capital
231,153

223,720
Total assets
452,312

443,673
Shareholders' equity
302,544

295,012

 

Revenue

For the quarter ended October 31, 2020, revenues were $100.5 million compared to revenues of $119.8 million for the quarter ended October 31, 2019. For the quarter, revenues in the United States/Canada region were $66.9 million compared to $88.6 million in the same quarter last year. The International region had revenues of $33.6 million compared to $31.2 million in the same quarter last year.

Gross Margin

For the quarter ended October 31, 2020, gross margin was $59.7 million as compared to $69.3 million in the same quarter last year. Gross margin percentage was approximately 59.4% as compared to 57.9% in the quarter ended October 31, 2019.

Earnings

For the quarter ended October 31, 2020, net earnings were $21.2 million as compared to $20.5 million in the corresponding period last year.

For the quarter ended October 31, 2020, earnings per share on a fully-diluted basis were $0.28 as compared to $0.27 in the corresponding period last year.

Operating Expenses

For the quarter ended October 31, 2020, selling and administrative expenses were $12.8 million as compared to $18.0 million for the quarter ended October 31, 2019.

For the quarter ended October 31, 2020, gross research and development expenses were $19.7 million as compared to $22.9 million for the quarter ended October 31, 2019.

Liquidity and Capital Resources

The Company's working capital as at October 31, 2020 was $231.2 million as compared to $223.7 million on April 30, 2020.

Cash was $110.0 million as at October 31, 2020 as compared to $75.0 million on April 30, 2020.

Cash generated from operations was $20.8 million for the quarter ended October 31, 2020 as compared to $12.9 million cash used for the quarter ended October 31, 2019. Before taking into account taxes and the changes in non-cash working capital and current taxes, the Company generated $26.1 million from operations for the quarter ended October 31, 2020 compared to $23.9 million for the same period last year.

For the quarter, the Company used $2.9 million for investing activities, including $0.8 million in the acquisition of Ease Live AS.

For the quarter ended, the Company used cash in financing activities of $10.4 million which was principally a result of the payment of dividends of $6.9 million.

Shipments and Backlog

At the end of November 2020, purchase order backlog was in excess of $106 million and shipments during the month of November 2020 were $23 million.

Dividend Declared

Evertz Board of Directors declared a regular quarterly dividend on December 9, 2020 of $0.18 per share.

The dividend is payable to shareholders of record on December 16, 2020 and will be paid on or about December 23, 2020.

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,
 
2020

2019

2020

2019
Revenue $100,482
$119,788
$156,819
$223,199
Cost of goods sold
40,823

50,466

64,936

94,725
Gross margin
59,659

69,322

91,883

128,474
 
 

 

 

 
Expenses
 

 

 

 
   Selling and administrative
12,773

18,004

24,692

34,334
   General
897

864

1,792

1,758
   Research and development
19,667

22,938

36,244

45,632
   Investment tax credits
(4,684)
(1,978)
(6,169)
(3,981)
   Share based compensation
1,036

1,141

1,310

2,872
   Foreign exchange loss
1,297

1,130

4,406

2,907
 
30,986

42,099

62,275

83,522
Earnings before undernoted
28,673

27,223

29,608

44,952
Finance income
597

361

690

812
Finance costs
(371)
(78)
(722)
(541)
Other income and expenses
(781)
(223)
(673)
(182)
Earnings before income taxes
28,118

27,283

28,903

45,041
Provision for (recovery of) income taxes
 

 

 

 
   Current
7,080

7,707

8,487

11,274
   Deferred
(150)
(950)
(1,347)
34
 
6,930

6,757

7,140

11,308
Net earnings for the period $21,188
$20,526
$21,763
$33,733
Net earnings attributable to non-controlling interest
140

154

230

284
Net earnings attributable to shareholders
21,048

20,372

21,533

33,449
Net earnings for the period $21,188
$20,526
$21,763
$33,733
Earnings per share
 

 

 

 
Basic $0.28
$0.27
$0.28
$0.44
Diluted $0.28
$0.27
$0.28
$0.44
 
 

 

 

 

 

 
 

 
Consolidated Balance Sheet Data
As at

As at
 
October 31, 2020

April 30, 2020
Cash and cash equivalents $110,042
$75,025
Inventory $157,605
$161,985
Working capital $231,153
$223,720
Total assets $452,312
$443,673
Shareholders' equity $302,544
$295,012
    

 

 
Number of common shares outstanding:
 

 
   Basic
76,310,446

76,449,446
   Fully-diluted
81,813,946

78,077,946
     

 

 
Weighted average number of shares outstanding:
 

 
   Basic
76,429,664

76,624,706
   Fully-diluted
76,429,664

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
December 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 1582299.

For those unable to listen to the live call, a rebroadcast will also be available until
January 8, 2021. The rebroadcast can be accessed at 647-436-0148 or toll-free 1-888-203-1112. The pass code for the rebroadcast is 1582299.

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".

Evertz Technologies Limited
Doug Moore, CPA, CA
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/69901

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