Evertz Technologies Reports Second Quarter Results for the Quarter Ended October 31, 2022

Burlington, Ontario--(Newsfile Corp. - December 6, 2022) - 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, 2022.

Second Quarter 2023 Highlights

  • Quarterly revenue of $113.2 million, an increase of $6.0 million from the prior year quarter
  • US/Canada quarterly revenue up 13% from the prior year quarter
  • Earnings from operations of $28.4 million for the quarter, an increase of 20% from the prior year quarter
  • Net earnings of $20.0 million for the quarter, and increase of $2.8 million from the prior year quarter
  • Fully diluted earnings per share of $0.26 for the quarter
  • Regular quarterly dividend increased to $0.19

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

                 
             Q2 ' 23     Q2 ' 22 
Revenue            $    113,248    $    107,199
Gross margin                    67,477            61,077
Earnings from operations                    28,392            23,700
Net earnings                    19,977            17,184
Fully-diluted earnings per share            $          0.26    $          0.22
Fully-diluted shares           76,324,261   76,561,480

 

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

           Q2 ' 23     YE '22 
(Bank Indebteness) Cash and cash equivalents        $      (4,193)    $      33,902
Working capital                154,145          158,947
Total assets                421,807          420,979
Shareholders' equity                232,546          230,938

 

Revenue

For the quarter ended October 31, 2022, revenues were $113.2 million an increase of $6.0 million compared to revenues of $107.2 million for the quarter ended October 31, 2021. For the quarter, revenues in the United States/Canada region were $88.3 million an increase of 13% compared to $78.2 million in the same quarter last year. The International region had revenues of $25.0 million compared to $29.0 million in the same quarter last year.

Gross Margin

For the quarter ended October 31, 2022, gross margin was $67.5 million as compared to $61.1 million in the same quarter last year. Gross margin percentage was approximately 59.6% as compared to 57.0% in the quarter ended October 31, 2021.

Earnings

For the quarter ended October 31, 2022, net earnings were $20.0 million as compared to $17.2 million in the corresponding period last year.

For the quarter ended October 31, 2022, earnings per share on a fully-diluted basis were $0.26 as compared to $0.22 in the corresponding period last year.

Operating Expenses

For the quarter ended October 31, 2022, selling and administrative expenses were $14.7 million as compared to $14.8 million for the quarter ended October 31, 2021.

For the quarter ended October 31, 2022, gross research and development expenses were $29.6 million as compared to $24.4 million for the quarter ended October 31, 2021.

Liquidity and Capital Resources

The Company's working capital as at October 31, 2022 was $154.1 million as compared to $158.9 million on April 30, 2022.

Bank indebtedness was $4.2 million as at October 31, 2022 as compared to cash and cash equivalents of $33.9 million on April 30, 2022.

Cash used from operations was $7.7 million for the quarter ended October 31, 2022 as compared to $0.9 million cash generated for the quarter ended October 31, 2021. Before taking into account taxes and the changes in non-cash working capital and current taxes, the Company generated $27.5 million from operations for the quarter ended October 31, 2022 compared to $23.1 million for the same period last year.

For the quarter, the Company used $5.6 million for investing activities, including acquisitions of $3.2 million of investments.

For the quarter ended, the Company used cash in financing activities of $16.0 million which was principally a result of the payment of dividends of $13.7 million.

Shipments and Backlog

At the end of November 2022, purchase order backlog was in excess of $149 million and shipments during the month of November 2022 were $39 million.

Dividend Declared

Evertz Board of Directors declared a regular quarterly dividend on December 6, 2022 of $0.19 per share.

The dividend is payable to shareholders of record on December 16, 2022 and will be paid on or about December 22, 2022.

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,
  2022   2021     2022   2021
Revenue  $  113,248  $  107,199    $   214,786  $   204,364
Cost of goods sold        45,771         46,122           88,785         86,601
Gross margin        67,477         61,077         126,001       117,763
                 
Expenses                
   Selling and administrative        14,681         14,773           27,655         28,730
   General          1,128           1,259              2,224            2,370
   Research and development        29,642         24,441           57,035         49,121
   Investment tax credits        (3,173)         (2,862)            (6,362)          (5,806)
   Share based compensation            (185)           1,970              1,792            2,968
   Foreign exchange gain        (3,008)         (2,204)            (4,039)          (3,633)
         39,085         37,377           78,305         73,750
Earnings before undernoted        28,392         23,700           47,696         44,013
                 
Finance income              216              137                 369               220
Finance costs            (508)            (322)               (826)             (640)
Share of net loss from Investment in Associate, net of taxes        (1,064)            (268)            (1,412)             (598)
Other income and expenses            (288)              174               (160)               186
Earnings before income taxes        26,748         23,421           45,667         43,181
Provision for (recovery of) income taxes                
   Current          6,530           5,841           13,169         13,642
   Deferred              241              396            (1,409)          (2,333)
           6,771           6,237           11,760         11,309
                 
Net earnings for the period  $    19,977  $     17,184    $     33,907  $     31,872
                 
Net earnings attributable to non-controlling interest              160              193                 249               334
Net earnings attributable to shareholders        19,817         16,991           33,658         31,538
Net earnings for the period  $    19,977  $     17,184    $     33,907  $     31,872
                 
Earnings per share                
Basic  $        0.26  $         0.22    $          0.44  $          0.41
Diluted  $        0.26  $         0.22    $          0.44  $          0.41

      

Consolidated Balance Sheet Data   As at     As at
    October 31, 2022     April 30, 2022
(Bank indetedness) Cash and cash equivalents    $                  (4,193)    $                  33,902
Inventory    $                199,892    $                177,268
Working capital    $                154,145    $                158,947
Total assets    $                421,807    $                420,979
Shareholders' equity    $                232,546    $                230,938
         
Number of common shares outstanding:        
   Basic                 76,223,768                 76,229,696
   Fully-diluted                 81,124,768                 81,285,196
           
Weighted average number of shares outstanding:        
   Basic                 76,223,768                 76,266,341
   Fully-diluted                 76,384,699                 76,570,564

 

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 6, 2022 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 416-764-8646 or toll-free (North America) 1-888-396-8049.

For those unable to listen to the live call, a rebroadcast will also be available until
December 6, 2023. The rebroadcast can be accessed at 416-764-8692 or toll-free 1-877-674-7070. The pass code for the rebroadcast is 898266.

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
[email protected]

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/146974