Evertz Technologies Reports Record Revenue in Fiscal 2015

BURLINGTON, ONTARIO--(Marketwired - Jun 10, 2015) - Evertz Technologies Limited (ET.TO), the leader in Software Defined Video Network ("SDVN") technology, today reported its results for the fourth quarter and year ended April 30, 2015.

Fiscal 2015 Highlights

• Record annual revenue of $363.6 million, up 12% year over year

• United States / Canada region revenue up 19% to $204.5 million from the prior year

• Net earnings of $66.4 million for the year

• Fully diluted earnings per share of $0.87

Fourth Quarter 2015 Highlights

• Revenue of $92.0 million, up 5% from the same quarter in the prior year

• United States / Canada revenue up 16% to $50 million from the prior year

• Earnings from operations before FX of $21.3 million, up 13% year over year

• Net earnings were $11.2 million or $0.15 per share for the quarter, inclusive of a foreign exchange ("FX") loss of $6.7 million

Selected Financial Information

Consolidated Statement of Earnings Data

(in thousands of dollars, except per share amounts)

		Q4'15		Q3'15		YE'15		Q4'14		YE'14
Revenue	$	91,977	$	90,726	$	363,606	$	87,237	$	325,524
Gross margin		52,728		51,017		206,131		49,083		186,186
Earnings from operations		14,583		27,878		88,504		18,538		83,163
Earnings from operations before FX		21,296		21,134		87,093		18,804		76,246
Net earnings		11,154		21,207		66,410		14,754		63,539
Fully-diluted earnings per share	$	0.15	$	0.28	$	0.87	$	0.20	$	0.85

Selected Financial Information

Consolidated Balance Sheet Data

(in thousands of dollars)

		YE ' 15		YE ' 14
Cash and cash equivalents	$	100,681	$	101,956
Working capital		294,895		273,914
Total assets		426,162		401,280
Shareholders' equity		353,471		333,478

Revenue

For the quarter ended April 30, 2015, revenues were $92.0 million, an increase of 5% compared to revenues of $87.2 million for the quarter ended April 30, 2014. For the quarter, revenues in the United States/Canada region were $50.0 million compared to $43.2 million in the same quarter last year. The International region had revenues of $41.9 million compared to $44.1 million in the same quarter last year.

For the year ended April 30, 2015, sales were $363.6 million, an increase of $38.1 million or 12% as compared to sales of $325.5 million for the prior year. For the year, revenues in the United States/Canada region were $204.5 million compared to $172.3 million in the prior year. The International region had revenues of $159.2 million compared to $153.2 million in the prior year.

Gross Margin

For the quarter ended April 30, 2015 gross margin was $52.7 million compared to $49.1 million in the same quarter last year. Gross margin percentage was approximately 57.3% compared to 56.3% in the quarter ended April 30, 2014.

For the year ended April 30, 2015, gross margin was $206.1 million as compared to $186.2 million for the year ended April 30, 2014. Gross margin percentage was approximately 56.7% for the year ended April 30, 2015 compared to 57.2% for the prior year.

Earnings

For the quarter ended April 30, 2015 net earnings were $11.2 million, compared to $14.8 million in the corresponding period last year.

For the year ended April 30, 2015, net earnings were $66.4 million as compared to $63.5 million in the corresponding period last year.

For the quarter ended April 30, 2015, earnings per share on a fully-diluted basis were $0.15 compared to $0.20 in the corresponding period last year.

For the year ended April 30, 2015, earnings per share on a fully-diluted basis were $0.87 as compared to $0.85 in the same period in 2014.

Operating Expenses

For the quarter ended April 30, 2015 selling and administrative expenses were $15.5 million compared to $15.0 million for the quarter ended April 30, 2014.

For the year ended April 30, 2015, selling and administrative expenses were $58.8 million compared to $55.2 million for the year ended April 30, 2014.

For the quarter ended April 30, 2015 gross research and development expenses increased by $0.6 million or 3% as compared to the corresponding period in 2014. Gross research and development expenses represented approximately 19% of revenue for the quarter ended April 30, 2015.

For the year ended April 30, 2015, gross research and development expenses increased by 7% or $4.1 million as compared to the prior year. Research and development expenses represented approximately 18% of sales.

Liquidity and Capital Resources

The Company's working capital as at April 30, 2015 was $294.9 million as compared to $273.9 million on April 30, 2014.

Cash and cash equivalents were $100.7 million as at April 30, 2015 as compared to $102.0 million on April 30, 2014.

Cash generated from operations was $12.3 million for the quarter ended April 30, 2015 as compared to cash used of $1.3 million for the quarter ended April 30, 2014. Before taking into account taxes and the changes in non-cash working capital and current taxes, the Company generated $14.1 million from operations for the quarter ended April 30, 2015 compared to $17.5 million for the same period last year.

Cash provided by operations was $54.4 million for the 2015 fiscal year as compared to cash provided by operations of $35.5 million for the 2014 fiscal year. Before taking into account taxes and the changes in non-cash working capital, the Company generated $78.7 million from operations for fiscal 2015 as compared to $74.2 million for fiscal 2014.

For the quarter, the Company used $1.6 million in investing activities largely a result of purchases in capital assets of $1.7 million.

For the year, the Company used $8.1 million in investing activities for the year ended April 30, 2015, largely a result of purchases in capital assets of $8.3 million.

For the quarter ended April 30, 2015, the Company used cash in financing activities of $13.7 million which was principally a result of the payment of dividends.

For the year ended April 30, 2015, the Company used cash in financing activities of $49.5 which was principally a result of the payment of dividends.

Shipments and Backlog

At the end of May 2015, purchase order backlog was in excess of $57 million and shipments during the month of May 2015 were $29 million.

Dividend Declared

Evertz Board of Directors declared a regular quarterly dividend on June 10, 2015 of $0.18 per share.

The dividend is payable to shareholders of record on June 19, 2015 and will be paid on or about June 26, 2015.

Selected Consolidated Financial Information

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

		Three month periods ended						Twelve month periods ended
			April 30,						April 30,
			2015			2014			2015			2014
Revenue		$	91,977		$	87,237		$	363,606		$	325,524
Cost of goods sold			39,249			38,154			157,475			139,338
Gross margin			52,728			49,083			206,131			186,186
Gross margin %			57.3	%		56.3	%		56.7	%		57.2	%
Expenses
	Selling and administrative		15,526			14,966			58,833			55,162
	General		1,368			1,509			6,136			6,874
	Research and development		17,623			17,063			64,332			60,196
	Investment tax credits		(3,085	)		(3,259	)		(10,263	)		(12,292	)
	Foreign exchange loss (gain)		6,713			266			(1,411	)		(6,917	)
			38,145			30,545			117,627			103,023
			14,583			18,538			88,504			83,163
Finance income			227			281			830			2,001
Finance costs			(64	)		(123	)		(240	)		(398	)
Other income and expenses			160			76			325			38
Earnings before income taxes			14,906			18,772			89,419			84,804
Provision for (recovery of) income taxes
	Current		4,817			5,142			25,154			24,529
	Deferred		(1,065	)		(1,124	)		(2,145	)		(3,264	)
			3,752			4,018			23,009			21,265
Net earnings for the period		$	11,154		$	14,754		$	66,410		$	63,539
Net earnings attributable to non-controlling interest		$	228		$	55		$	910		$	404
Net earnings attributable to shareholders			10,926			14,699			65,500			63,135
Net earnings for the period		$	11,154		$	14,754		$	66,410		$	63,539
Earnings per share
Basic		$	0.15		$	0.20		$	0.88		$	0.85
Diluted		$	0.15		$	0.20		$	0.87		$	0.85

			April 30,		April 30,		April 30,
			2015		2014		2013
Assets
Current assets
	Cash and cash equivalents	$	100,681	$	101,956	$	208,658
	Instruments held for trading		-		-		12,010
	Trade and other receivables		95,403		87,981		53,813
	Prepaid expenses		8,426		4,704		3,274
	Inventories		154,259		134,561		111,619
	Income tax receivable		-		1,735		7,233
			358,769		330,937		396,607
Assets held for sale			-		-		3,781
Property, Plant and Equipment			49,080		51,831		46,637
Goodwill			18,313		18,269		17,724
Intangible assets			-		243		558
		$	426,162	$	401,280	$	465,307
Liabilities
Current liabilities
	Trade and other payables	$	44,265	$	44,888	$	36,237
	Provisions		2,229		1,624		1,104
	Deferred revenue		15,427		10,096		6,712
	Current portion of long term debt		254		415		390
	Income tax payable		1,699		-		-
			63,874		57,023		44,443
Long term debt			996		1,372		1,539
Deferred taxes			4,432		6,468		9,590
			69,302		64,863		55,572
Equity
Capital stock			95,708		92,931		81,453
Share based payment reserve			12,418		10,217		10,727
Accumulated other comprehensive income (loss)			3,077		2,966		(1,063	)
Retained earnings			242,268		227,364		315,680
			245,345		230,330		314,617
Total equity attributable to shareholders			353,471		333,478		406,797
Non-controlling interest			3,389		2,939		2,938
			356,860		336,417		409,735
		$	426,162	$	401,280	$	465,307

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 10, 2015 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 toll-free (North America) 1-888-244-2521.

For those unable to listen to the live call, a rebroadcast will also be available until July 10, 2015. The rebroadcast can be accessed at 1-416-915-1035 or toll-free 1-866-245-6755. The pass code for the rebroadcast is 541866.

About Evertz

Evertz Technologies Limited (ET.TO) 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 definition television ("HDTV") 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 the more efficient signal routing, distribution, monitoring and management of content as well as the automation of previously manual processes.