Evertz Technologies Reports Third Quarter Results for the Quarter Ended January 31, 2021

Burlington, Ontario--(Newsfile Corp. - March 3, 2021) -  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, 2021.

Third Quarter 2021 Highlights

  • Quarterly revenue of $92.8 million
  • Earnings from operations before foreign exchange of $19.7 million
  • Net earnings of $10.4 million for the quarter
  • Fully diluted earnings per share of $0.13 for the quarter
  • Completed investment in DD Sports, Inc. (ShotTracker) for $8.0 million
  • Announced strategic asset acquisition of the iconic Studer audio brand, technology and related assets from HARMAN International, subsequently closed on February 9, 2021

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

    Q3 ' 21
  Q3 ' 20
Revenue $ 92,776
$ 121,226
Gross margin   51,983
  67,849
Earnings from operations before foreign exchange   19,668
  25,936
Earnings from operations   14,324
  26,206
Net earnings   10,388
  19,401
Fully-diluted earnings per share $ 0.13
$ 0.25
Fully-diluted shares   76,406,390
  76,780,796
     
   
Selected Financial Information    
   
Consolidated Balance Sheet Data    
   
(in thousands of dollars)    
   
    Q3 ' 21
  YE '20
Cash and cash equivalents $ 94,063
$ 75,025
Working capital   221,587
  223,720
Total assets   455,420
  443,673
Shareholders' equity   298,727
  295,012

 
Revenue

For the quarter ended January 31, 2021, revenues were $92.8 million compared to revenues of $121.2 million for the quarter ended January 31, 2020. For the quarter, revenues in the United States/Canada region were $56.3 million compared to $69.5 million in the same quarter last year. The International region had revenues of $36.5 million compared to $51.7 million in the same quarter last year.

Gross Margin
For the quarter ended January 31, 2021, gross margin was $52.0 million as compared to $67.8 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, 2020.

Earnings
For the quarter ended January 31, 2021, net earnings were $10.4 million as compared to $19.4 million in the corresponding period last year.

For the quarter ended January 31, 2021, earnings per share on a fully-diluted basis were $0.13 as compared to $0.25 in the corresponding period last year.

Operating Expenses
For the quarter ended January 31, 2021, selling and administrative expenses were $11.7 million as compared to $17.9 million for the quarter ended January 31, 2020.

For the quarter ended January 31, 2021, gross research and development expenses were $21.4 million as compared to $24.0 million for the quarter ended January 31, 2020.

Liquidity and Capital Resources
The Company's working capital as at January 31, 2021 was $221.6 million as compared to $223.7 million on April 30, 2020.

Cash was $94.1 million as at January 31, 2021 as compared to $75.0 million on April 30, 2020.

Cash generated from operations was $10.3 million for the quarter ended January 31, 2021 as compared to $67.3 million cash generated for the quarter ended January 31, 2020. Before taking into account taxes and the changes in non-cash working capital and current taxes, the Company generated $16.4 million from operations for the quarter ended January 31, 2021 compared to $23.7 million for the same period last year.

For the quarter, the Company used $10.0 million for investing activities, including $8.0 million in the investment in DD Sports, Inc. (ShotTracker).

For the quarter ended, the Company used cash in financing activities of $15.5 million which was principally a result of the payment of dividends of $13.7 million.

Shipments and Backlog
At the end of February 2021, purchase order backlog was in excess of $125 million and shipments during the month of February 2021 were $25 million.

Dividend Declared
Evertz Board of Directors declared a regular quarterly dividend on March 3, 2021 of $0.18 per share.

The dividend is payable to shareholders of record on March 19, 2021 and will be paid on or about March 25, 2021.

Selected Consolidated Financial Information

(in thousands of dollars, except earnings per share and percentages)

    Three month period ended January 31,     Nine month period ended January 31,  
         
    2021     2020     2021     2020  
Revenue $ 92,776   $ 121,226   $ 249,595   $ 344,425  
Cost of goods sold   40,793     53,377     105,729     148,102  
Gross margin   51,983     67,849     143,866     196,323  
Expenses                        
Selling and administrative   11,734     17,863     36,426     52,197  
General   817     927     2,609     2,685  
Research and development   21,427     23,993     57,671     69,625  
Investment tax credits   (3,931 )   (2,056 )   (10,100 )   (6,037 )
Share based compensation   2,268     1,186     3,578     4,058  
Foreign exchange loss (gain)   5,344     (270 )   9,750     2,637  
    37,659     41,643     99,934     125,165  
Earnings before undernoted   14,324     26,206     43,932     71,158  
Finance income   77     84     621     896  
Finance costs   (471 )   (511 )   (1,193 )   (1,375 )
Other income and expenses   96     162     (431 )   303  
Earnings before income taxes   14,026     25,941     42,929     70,982  
Provision for (recovery of) income taxes                        
Current   2,423     6,798     10,910     18,072  
Deferred   1,215     (258 )   (132 )   (224 )
    3,638     6,540     10,778     17,848  
Net earnings for the period $ 10,388   $ 19,401   $ 32,151   $ 53,134  
Net earnings attributable to non-controlling interest   116     143     346     427  
Net earnings attributable to shareholders   10,272     19,258     31,805     52,707  
Net earnings for the period $ 10,388   $ 19,401   $ 32,151   $ 53,134  
Earnings per share                        
Basic $ 0.13   $ 0.25   $ 0.42   $ 0.69  
Diluted $ 0.13   $ 0.25   $ 0.42   $ 0.69  

 

Consolidated Balance Sheet Data  
As at
  As at
   
January 31, 2021
  April 30, 2020
Cash and cash equivalents $
94,063
$ 75,025
Inventory $
156,811
$ 161,985
Working capital $
221,587
$ 223,720
Total assets $
455,420
$ 443,673
Shareholders' equity $
298,727
$ 295,012
Number of common shares outstanding:  
 
   
Basic  
76,284,366
  76,449,446
Fully-diluted  
82,201,366
  78,077,946
Weighted average number of shares outstanding:  
 
   
Basic  
76,381,605
  76,624,706
Fully-diluted  
76,431,308
  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
March 3 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 647-792-1240 or toll-free (North America) 1-800-437-2398, access code 1237007.

For those unable to listen to the live call, a rebroadcast will also be available until
April 2, 2021. The rebroadcast can be accessed at 647-436-0148 or toll-free 1-888-203-1112. The pass code for the rebroadcast is 1237007.

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 Information
Evertz Technologies Limited
Doug Moore, CPA, CA
(905) 335-7580
ir@evertz.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/75973

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