Evertz Technologies Reports Fiscal 2020 Results for the Year Ended April 30, 2020

Ad blocking detected

Thank you for visiting CanadianInsider.com. We have detected you cannot see ads being served on our site due to blocking. Unfortunately, due to the high cost of data, we cannot serve the requested page without the accompanied ads.

If you have installed ad-blocking software, please disable it (sometimes a complete uninstall is necessary). Private browsing Firefox users should be able to disable tracking protection while visiting our website. Visit Mozilla support for more information. If you do not believe you have any ad-blocking software on your browser, you may want to try another browser, computer or internet service provider. Alternatively, you may consider the following if you want an ad-free experience.

Canadian Insider Club
$299/ year*
Daily Morning INK newsletter
+3 months archive
Canadian Market INK weekly newsletter
+3 months archive
30 publication downloads per month from the PDF store
Top 20 Gold, Top 30 Energy, Top 40 Stock downloads from the PDF store
All benefits of basic registration
No 3rd party display ads
JOIN THE CLUB

* Price is subject to applicable taxes.

Paid subscriptions and memberships are auto-renewing unless cancelled (easily done via the Account Settings Membership Status page after logging in). Once cancelled, a subscription or membership will terminate at the end of the current term.

Burlington, Ontario--(Newsfile Corp. - June 30, 2020) - Evertz Technologies Limited (TSX: ET), the leader in Software Defined Video Network ("SDVN") technology, today reported its results for the fourth quarter and year ended April 30, 2020.

Fiscal 2020 Highlights

  • Revenue of $436.6 million
  • International revenue up $1.8 million year-over-year to $147.6 million
  • Net earnings of $69.2 for the year
  • Fully diluted earnings per share of $0.90 for the year

Fourth Quarter 2020 Highlights

  • Quarterly revenue of $92.2 million
  • Net earnings of $16.0 million for the quarter
  • Fully diluted earnings per share of $0.21 for the quarter

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

    Q4'20     Q4'19     YE'20     YE'19  
Revenue $ 92,167   $ 107,245   $ 436,592   $ 443,556  
Gross margin   52,053     62,725     248,376     253,358  
Earnings from operations   21,400     24,520     92,558     103,365  
Net earnings   16,038     18,627     69,172     78,504  
Fully-diluted earnings per share $ 0.21   $ 0.24   $ 0.90   $ 1.02  
Fully-diluted shares   76,415,396     76,565,850     76,642,787     76,529,799  

 

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

    YE ' 20     YE '19  
Cash and cash equivalents $ 75,025   $ 104,583  
Working capital   223,720     282,521  
Total assets   443,673     466,597  
Shareholders' equity   295,012     353,123  

 

Revenue

For the quarter ended April 30, 2020, revenues were $92.2 million compared to revenues of $107.2 million for the quarter ended April 30, 2019. For the quarter, revenues in the United States/Canada region were $58.7 million compared to $63.6 million in the same quarter last year. The International region had revenues of $33.5 million compared to $43.7 million in the same quarter last year.

For the year ended, April 30, 2020, sales were $436.6 million, compared to sales of $443.6 million for the year ended April 30, 2019. For the year, revenues in the United States/Canada region were $289.0 million compared to $297.8 million in the prior year. The International region had revenues of $147.6 million, an increase of $1.8 million compared to $145.8 million in the prior year.

Gross Margin

For the quarter ended April 30, 2020, gross margin was $52.1 million as compared to $62.7 million in the same quarter last year. Gross margin percentage was approximately 56.5% as compared to 58.5% in the quarter ended April 30, 2019.

For the year ended April 30, 2020, gross margin was $248.4 million as compared to $253.4 million for the year ended April 30, 2019. Gross margin percentage was approximately 56.9% as compared to 57.1% for the prior year.

Earnings

For the quarter ended April 30, 2020, net earnings were $16.0 million as compared to $18.6 million in the corresponding period last year.

For the year ended April 30, 2020, net earnings were $69.2 million as compared to $78.5 million in the corresponding period last year.

For the quarter ended April 30, 2020, earnings per share on a fully-diluted basis were $0.21 as compared to $0.24 in the corresponding period last year.

For the year ended April 30, 2020, earnings per share on a fully-diluted basis were $0.90 as compared to $1.02 in the same period in 2019.

Operating Expenses

For the quarter ended April 30, 2020, selling and administrative expenses were $15.4 million as compared to $18.0 million for the quarter ended April 30, 2019.

For the year ended April 30, 2020, selling and administrative expenses were $67.6 million as compared to $67.8 million for the year ended April 30, 2019.

For the quarter ended April 30, 2020, gross research and development expenses were $21.2 million as compared to $21.8 million for the quarter ended April 30, 2019.

For the year ended April 30, 2020, gross research and development expenses were $90.8 million as compared to $85.8 million for the year ended April 30, 2019.

Liquidity and Capital Resources

The Company's working capital as at April 30, 2020 was $223.7 million as compared to $282.5 million on April 30, 2019.

Cash was $75.0 million as at April 30, 2020 as compared to $104.6 million on April 30, 2019.

Cash generated from operations was $47.1 million for the quarter ended April 30, 2020 as compared to $23.7 million for the quarter ended April 30, 2019. Before taking into account taxes and the changes in non-cash working capital and current taxes, the Company generated $21.6 million from operations for the quarter ended April 31, 2020 compared to $23.2 million for the same period last year.

Cash provided by operations was $109.3 million for the 2020 fiscal year as compared to cash provided by operations of $88.5 million for the 2019 fiscal year. Before taking into account taxes and the changes in non-cash working capital and current taxes, the Company generated $87.7 million from operations for fiscal 2020 as compared to $89.1 million for fiscal 2019.

For the quarter, the Company used $3.1 million for investing activities.

For the year, the Company used $5.7 million in investing activities which was principally driven by the acquisition of capital equipment of $10.1 million, partially offset by the sale of marketable securities for $4.1 million.

For the quarter ended, the Company used cash in financing activities of $17.7 million which was principally a result of the payment of dividends of $13.8 million and capital stock repurchases of $2.4 million.

For the year ended April 30, 2020, the Company used cash in financing activities of $132.7 million which was principally a result of the payment of dividends of $124.8 million.

Shipments and Backlog

At the end of May 2020, purchase order backlog was in excess of $94 million and shipments during the month of May 2020 were $16 million.

Dividend Declared

Evertz Board of Directors declared a regular quarterly dividend on June 30, 2020 of $0.09 per share.

The dividend is payable to shareholders of record on July 10, 2020 and will be paid on or about July 17, 2020.

Evertz remains committed to increasing its financial flexibility and given the current environment dominated by Covid-19, the Company believes it is prudent to conserve cash. Evertz Board of Directors will reassess its decision regarding the reduction of the regularly quarterly dividends on September 9, 2020.

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

    Three month period ended     Twelve month period ended  
    April 30,     April 30,  
    2020     2019     2020     2019  
Revenue $ 92,167   $ 107,245   $ 436,592   $ 443,556  
Cost of goods sold   40,114     44,520     188,216     190,198  
Gross margin   52,053     62,725     248,376     253,358  
                         
Expenses                        
Selling and administrative   15,400     17,957     67,597     67,821  
General   824     1,012     3,509     3,410  
Research and development   21,202     21,849     90,827     85,823  
Investment tax credits   (1,558 )   (2,086 )   (7,595 )   (8,158 )
Share based compensation   906     1,349     4,964     4,501  
Foreign exchange gain   (6,121 )   (1,876 )   (3,484 )   (3,404 )
    30,653     38,205     155,818     149,993  
Earnings before undernoted   21,400     24,520     92,558     103,365  
                         
Finance income   181     430     1,077     1,394  
Finance costs   (470 )   (91 )   (1,845 )   (752 )
Other income and expenses   (134 )   (141 )   169     1,080  
Earnings before income taxes   20,977     24,718     91,959     105,087  
Provision for income taxes                        
Current   4,232     4,972     22,304     26,499  
Deferred   707     1,119     483     84  
    4,939     6,091     22,787     26,583  
                         
Net earnings for the period $ 16,038   $ 18,627   $ 69,172   $ 78,504  
                         
Net earnings attributable to non-controlling interest   138     65     565     629  
Net earnings attributable to shareholders   15,900     18,562     68,607     77,875  
Net earnings for the period $ 16,038   $ 18,627   $ 69,172   $ 78,504  
                         
Earnings per share                        
Basic $ 0.21   $ 0.24   $ 0.90   $ 1.02  
Diluted $ 0.21   $ 0.24   $ 0.90   $ 1.02  

 

    April 30,     April 30,     April 30,  
    2020     2019     2018  
Assets                  
Current assets                  
Cash and cash equivalents $ 75,025   $ 104,583   $ 94,184  
Marketable securities   -     4,023     -  
Trade and other receivables   90,631     81,498     64,241  
Contract assets   7,864     22,348     21,830  
Prepaid expenses   9,003     9,045     5,506  
Inventories   161,985     171,271     168,070  
Income tax receivable   -     708     -  
    344,508     393,476     353,831  
                   
Property, plant and equipment   47,794     48,887     47,915  
Right-of-use assets   28,823     -     -  
Goodwill   20,771     20,716     18,168  
Intangible assets   1,573     1,952        
Deferred income taxes   204     1,566     1,201  
  $ 443,673   $ 466,597   $ 421,115  
                   
Liabilities                  
Current liabilities                  
Trade and other payables $ 62,231   $ 63,647   $ 56,377  
Provisions   5,031     4,171     3,981  
Deferred revenue   45,076     42,843     28,502  
Current portion of long term debt   238     294     383  
Current potion of lease obligations   4,400     -     -  
Income tax payable   3,812     -     74  
    120,788     110,955     89,317  
          
Long term debt   -     239     515  
Long term lease obligations   25,465     -     -  
    146,253     111,194     89,832  
                   
Equity                  
Capital stock   143,915     139,865     138,675  
Share based payment reserve   8,279     8,245     7,885  
                   
Accumulated other comprehensive income   1,032     1,729     2,149  
Retained earnings   141,786     203,284     180,518  
    142,818     205,013     182,667  
                   
Total equity attributable to shareholders   295,012     353,123     329,227  
Non-controlling interest   2,408     2,280     2,056  
    297,420     355,403     331,283  
  $ 443,673   $ 466,597   $ 421,115  

 

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 30, 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 1288953.

For those unable to listen to the live call, a rebroadcast will also be available until July 30, 2020. The rebroadcast can be accessed at 647-436-0148 or toll-free 1-888-203-1112. The pass code for the rebroadcast is 1288953.

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/58908

Comment On!

140
Upload limit is up to 1mb only
To post messages to your Socail Media account, you must first give authorization from the websites. Select the platform you wish to connect your account to CanadianInsider.com (via Easy Blurb).