Evertz Technologies Reports First Quarter Results for the Quarter Ended July 31, 2021

Burlington, Ontario--(Newsfile Corp. - September 14, 2021) - 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, 2021.

First Quarter 2022 Highlights

  • Revenue of $97.2 million, an increase of 72% from the prior year
  • U.S./Canadian revenue up 79% from the prior year
  • International revenue up 60% from the prior year
  • Earnings from operations of $20.3 million, an increase of $19.4 million from the prior year.
  • Net earnings of $14.7 million for the quarter
  • Fully diluted earnings per share of $0.19 for the quarter

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

     Q1'22 
   Q1'21 
Revenue $ 97,165
$ 56,337
Gross margin   56,686
  32,224
Earnings from operations   20,313
  935
Net earnings   14,688
  575
Fully-diluted earnings per share $ 0.19
$ 0.01
Fully-diluted shares   76,771,395
  76,449,446

 

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

    Q1 ' 22
  YE '21
Cash and cash equivalents $ 131,619
$ 108,771
Working capital   217,019
  214,515
Total assets   482,476
  451,793
Shareholders' equity   295,392
  292,734

 

Revenue
For the quarter ended July 31, 2021, revenues were $97.2 million compared to revenues of $56.3 million for the quarter ended July 31, 2020. For the quarter, revenues in the United States/Canada region were $64.4 million, an increase of $28.5 million, compared to $35.9 million in the same quarter last year. The International region had revenues of $32.8 million, an increase of $12.4 million compared to $20.4 million in the same quarter last year.

Gross Margin
For the quarter ended July 31, 2021, gross margin was $56.7 million as compared to $32.2 million in the same quarter last year. Gross margin percentage was approximately 58.3% as compared to 57.2% in the quarter ended July 31, 2020.

Earnings
For the quarter ended July 31, 2021, net earnings were $14.7 million as compared to $0.6 million in the corresponding period last year.

For the quarter ended July 31, 2021, earnings per share on a fully-diluted basis were $0.19 as compared to $0.01 in the corresponding period last year.

Operating Expenses
For the quarter ended July 31, 2021, selling and administrative expenses were $14.0 million as compared to $11.9 million for the quarter ended July 31, 2020.

For the quarter ended July 31, 2021, gross research and development expenses were $24.7 million as compared to $16.6 million for the quarter ended July 31, 2020.

Liquidity and Capital Resources
The Company's working capital as at July 31, 2021 was $217.0 million as compared to $214.5 million on April 30, 2021.

Cash was $131.6 million as at July 31, 2021 as compared to $108.8 million on April 30, 2021.

Cash generated from operations was $38.0 million for the quarter ended July 31, 2021 as compared to $36.3 million cash generated for the quarter ended July 31, 2020. Before taking into account taxes and the changes in non-cash working capital and current taxes, the Company generated $17.3 million from operations for the quarter ended July 31, 2021 compared to $4.1 million for the same period last year.

For the quarter, the Company used $1.1 million for investing activities.

For the quarter ended July 31, 2021, the Company used cash in financing activities of $15.1 million which was principally a result of the payment of dividends of $13.7 million.

Shipments and Backlog
At the end of August 2021, purchase order backlog was in excess of $151 million and shipments during the month of August 2021 were $40 million.

Dividend Declared
Evertz Board of Directors declared a regular quarterly dividend on September 14, 2021 of $0.18 per share.

The dividend is payable to shareholders of record on September 28, 2021 and will be paid on or about October 5, 2021.

Special Dividend
Evertz Board of Directors declared a special dividend on September 14, 2021 of $1.00 per share, payable to shareholders of record on September 28, 2021 and will be paid on or about October 5, 2021.

The Special dividend reflects both the strong long-term operation performance of the Company and its solid balance sheet, thereby enabling a distribution of cash over and above what is considered necessary to meeting known commitments and maintain adequate reserves.

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

    Three months ended     Three months ended  
    July 31, 2021     July 31, 2020  
Revenue $ 97,165   $ 56,337  
Cost of goods sold   40,479     24,113  
Gross margin $ 56,686   $ 32,224  
Expenses            
   Selling and administrative   13,957     11,920  
   General   1,111     895  
   Research and development   24,680     16,576  
   Investment tax credits   (2,944 )   (1,485 )
   Share based compensation   998     274  
   Foreign exchange (gain) loss   (1,429 )   3,109  
    36,373     31,289  
Earnings before undernoted $ 20,313   $ 935  
             
Finance income   83     93  
Finance costs   (318 )   (351 )
Share of net loss from Investment in Associate, net of taxes   (330 )   -  
Other income and expenses   12     108  
Earnings before income taxes $ 19,760   $ 785  
Provision for (recovery of) income taxes            
   Current   7,801     1,407  
   Deferred   (2,729 )   (1,197 )
  $ 5,072   $ 210  
             
Net earnings for the period $ 14,688   $ 575  
             
Net earnings attributable to non-controlling interest   141     90  
Net earnings attributable to shareholders   14,547     485  
Net earnings for the period $ 14,688   $ 575  
             
Earnings per share:            
   Basic $ 0.19   $ 0.01  
   Diluted $ 0.19   $ 0.01  

 

Consolidated Balance Sheet Data   As at
  As at
    July 31, 2021
  April 30, 2021
Cash and marketable securities $ 131,619
$ 108,771
Inventory $ 155,291
$ 152,699
Working capital $ 217,019
$ 214,515
Total assets $ 482,476
$ 451,793
Shareholders' equity $ 295,392
$ 292,734
     
   
Number of common shares outstanding:    
   
   Basic   76,284,366
  76,284,366
   Fully-diluted   81,991,866
  82,169,366
     
   
Weighted average number of shares outstanding:    
   
   Basic   76,284,366
  76,357,895
   Fully-diluted   76,771,395
  76,403,894

 

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 14, 2021 at 5 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 7668281.

For those unable to listen to the live call, a rebroadcast will also be available until October 14, 2021. The rebroadcast can be accessed at 647-436-0148 or toll-free 1-888-203-1112. The pass code for the rebroadcast is 7668281.

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:

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/96537

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