BURLINGTON, ONTARIO--(Marketwire - March 8, 2011) -
Attention Business/Financial Editors:
Evertz Technologies Limited (TSX:ET), a leading equipment provider to the television broadcast industry, today reported its results, for the third quarter ended January 31, 2011, of its fiscal 2011 year.
Quarterly Highlights
- Sales were $83.2 million a 26% increase year-over-year for the quarter
- Sales in the United States/Canada region increased by 44% year over year for the quarter
- Sales in the International region increased by 7% year over year for the quarter
- Gross margin was 57.5%
- Cash and instruments held for trading increased to $177.9 million
- Net earnings were $23.6 million for the quarter as compared to $11.7 million a year ago
- Diluted earnings per share were $0.32 for the quarter as compared to $0.16 a year ago
Selected Financial Information | |||||
Consolidated Statement of Earnings Data | |||||
(in thousands of dollars, except per share amounts) | |||||
Q3 '11 | Q3 '10 | ||||
Sales | $ | 83,207 | $ | 66,165 | |
Gross margin | 47,818 | 37,778 | |||
Earnings from operations | 28,384 | 18,715 | |||
Net income | 23,553 | 11,660 | |||
Fully-diluted earnings per share | $ | 0.32 | $ | 0.16 | |
Selected Financial Information | |||||
Consolidated Balance Sheet Data | |||||
(in thousands of dollars) | |||||
Q3 '11 | YE '10 | ||||
Cash and instruments held for trading | $ | 177,886 | $ | 145,029 | |
Working capital | 318,255 | 264,161 | |||
Total assets | 405,464 | 345,787 | |||
Shareholders' equity | 365,739 | 312,169 |
Sales
For the quarter ended January 31, 2011, sales were $83.2 million, an increase of $17.0 million or 26% as compared to sales of $66.2 million for the quarter ended January 31, 2010. For the quarter, sales in the United States/Canada region increased by $14.9 million or 44% when compared to the same quarter last year. The International region grew by $2.2 million or 7% for the quarter ended January 31, 2011 when compared to the same quarter last year.
Gross Margin
For the quarter ended January 31, 2011 gross margin was $47.8 million compared to $37.8 million in the same quarter last year. Gross margin percentage was approximately 58% compared to 57% for the quarter ended January 31, 2010.
Earnings
For the quarter ended January 31, 2011 net earnings were $23.6 million as compared to $11.7 million in the corresponding period last year.
For the quarter ended January 31, 2011, earnings per share on a fully-diluted basis were $0.32 as compared to $0.16 in the same period in 2010.
Operating Expenses
For the quarter ended January 31, 2011 selling and administrative expenses were $10.2 million compared to $9.5 million for the quarter ended January 31, 2010. Selling and administrative expenses represented approximately 12% of sales in the quarter ended January 31, 2011.
For the quarter ended January 31, 2011 gross research and development expenses increased by $1.6 million or 21% as compared to the corresponding period in 2010. Gross research and development expenses represented approximately 12% of sales for the quarter similar to the same period last year.
Liquidity and Capital Resources
The Company's working capital as at January 31, 2011 was $318.3 million as compared to $264.2 million on April 30, 2010.
Cash and instruments held for trading were $177.9 million as at January 31, 2011 as compared to $145.0 million on April 30, 2010.
Cash provided by operations was $29.1 million for the quarter ended January 31, 2011 as compared to $28.6 million for the quarter ended January 31, 2010. Before taking into account the changes in non-cash working capital, the Company generated $23.5 million from operations for the quarter ended January 31, 2011 compared to $19.3 million for the same period last year.
For the quarter ended January 31, 2011, the Company spent $3.1 million on a business acquisition and $0.6 million on the purchase of capital assets.
For the quarter ended January 31, 2011, the Company used cash from financing activities of $3.9 million which was principally a result of the payment of dividends of $7.4 million offset by the issuance of capital stock pursuant to the Company Stock Option Plan of $3.7 million.
Shipments and Backlog
Purchase order backlog at the end of February 2011 was in excess of $31 million and shipments during the month of February 2011 exceeded $17 million.
Dividend Declared
Evertz Board of Directors declared a dividend on March 08, 2011 of $0.10.
The dividend is payable to shareholders of record on March 17, 2011 and will be paid on or about March 25, 2011.
Selected Consolidated Financial Information | |||||||||||||
(Unaudited) | |||||||||||||
(in thousands of dollars, except earnings per share and share data) | |||||||||||||
Consolidated Statement of Earnings Data | |||||||||||||
Three month period ended | Nine month period ended | ||||||||||||
January 31, | January 31, | ||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||
Sales | $ | 83,207 | $ | 66,165 | $ | 239,350 | $ | 211,170 | |||||
Cost of goods sold | 35,389 | 28,387 | 100,895 | 87,622 | |||||||||
Gross margin | $ | 47,818 | $ | 37,778 | $ | 138,455 | $ | 123,548 | |||||
Gross margin % | 57.5 | % | 57.1 | % | 57.8 | % | 58.5 | % | |||||
Expenses | |||||||||||||
Selling and administrative | 10,155 | 9,459 | 27,736 | 27,245 | |||||||||
Research and development | 9,620 | 7,977 | 25,863 | 24,318 | |||||||||
Investment tax credits | (2,258 | ) | (2,063 | ) | (6,139 | ) | (6,088 | ) | |||||
Foreign exchange (gain) loss | 516 | 1,550 | (587 | ) | 5,021 | ||||||||
Amortization of intangibles | 277 | 401 | 715 | 1,204 | |||||||||
Stock-based compensation | 1,124 | 1,739 | 3,083 | 4,743 | |||||||||
19,434 | 19,063 | 50,671 | 56,443 | ||||||||||
Earnings from operations | $ | 28,384 | $ | 18,715 | $ | 87,784 | $ | 67,105 | |||||
Interest and other income | $ | 4,096 | $ | (1,530 | ) | $ | 3,041 | $ | (755 | ) | |||
Non-controlling interest | (125 | ) | (92 | ) | (461 | ) | (323 | ) | |||||
Earnings before income taxes | $ | 32,355 | $ | 17,093 | $ | 90,364 | $ | 66,027 | |||||
Net earnings | $ | 23,553 | $ | 11,660 | $ | 65,023 | $ | 46,249 | |||||
Net earnings per share: | |||||||||||||
Basic | $ | 0.32 | $ | 0.16 | $ | 0.88 | $ | 0.63 | |||||
Fully-diluted | $ | 0.32 | $ | 0.16 | $ | 0.88 | $ | 0.62 |
Consolidated Balance Sheet Data | ||||||
As at | As at | |||||
January 31, 2011 | April 30, 2010 | |||||
Cash and instruments held for trading | $ | 177,886 | $ | 145,029 | ||
Inventory | $ | 107,986 | $ | 91,745 | ||
Working capital | $ | 318,255 | $ | 264,161 | ||
Total assets | $ | 405,464 | $ | 345,787 | ||
Shareholders' equity | $ | 365,739 | $ | 312,169 | ||
Number of common shares outstanding: | ||||||
Basic | 74,470,606 | 73,607,506 | ||||
Fully-diluted | 78,524,206 | 77,703,006 | ||||
Weighted average number of shares outstanding: | ||||||
Basic | 73,794,552 | 73,324,244 | ||||
Fully-diluted 1 | 74,050,161 | 74,223,642 | ||||
Note: | ||||||
(1) Based on weighted average number of Common Shares outstanding using the treasury stock method as per Canadian GAAP. |
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 08, 2011 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 1-416-849- 6166 or toll-free (North America) 1-866-250-6267.
For those unable to listen to the live call, a rebroadcast will also be available until April 08, 2011. The rebroadcast can be accessed at 1-416-915-1035 or toll-free 1-866-245-6755. The pass code for the rebroadcast is 689294.
About Evertz
Evertz Technologies Limited (TSX:ET) designs, manufactures and markets video and audio infrastructure equipment for the production, post production, broadcast and internet protocol television ("IPTV") industry. 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") broadcast environments and by telecommunications companies to roll-out IPTV. 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.
Contact Information: Evertz Technologies Limited
Anthony Gridley
Chief Financial Officer
(905) 335-7580
ir@evertz.com