BURLINGTON, ONTARIO--(Marketwire - June 15, 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 fourth quarter ended April 30, 2011, of its fiscal 2011 year.
Annual Highlights
- Sales were $307.9 million with the Canada/US region up approximately 12% year-over-year
- Net earnings were $77.4 million for the year, an increase of 26% from the prior year
- Cash increased to $175.8 million
- Gross investment in R&D was $35.7 million
- Fully-diluted earnings per share were $1.03 for the year as compared to $0.83 a year ago
| Selected Financial Information |
| Consolidated Statement of Earnings Data |
| (in thousands of dollars, except per share amounts) |
| Q4'11 | YE'11 | Q4'10 | YE'10 | |||||
| Sales | $ | 68,532 | $ | 307,882 | $ | 75,285 | $ | 286,455 |
| Gross Margin | 38,925 | 177,380 | 43,425 | 166,973 | ||||
| Earnings from operations | 16,067 | 103,851 | 22,828 | 89,933 | ||||
| Net Income | 12,370 | 77,393 | 15,253 | 61,502 | ||||
| Fully-diluted earnings per share | $ | 0.16 | $ | 1.03 | $ | 0.21 | $ | 0.83 |
| Selected Financial Information | ||||||||
| Consolidated Balance Sheet Data | ||||||||
| (in thousands of dollars) | ||||||||
| YE ' 11 | YE ' 10 | |||
| Cash and instruments held for trading | $ | 192,025 | $ | 145,029 |
| Working capital | 324,244 | 264,161 | ||
| Total assets | 409,862 | 345,787 | ||
| Shareholders' equity | 371,704 | 312,169 |
Sales
For the quarter ended April 30, 2011, sales were $68.5 million, a decrease of $6.8 million or 9% as compared to sales of $75.3 million for the quarter ended April 30, 2010. For the quarter, sales in the United States/Canada region increased by $5.6 million or 16% when compared to the same quarter last year. The International region declined by $12.4 million or 31% for the quarter ended April 30, 2011 when compared to the same quarter last year.
For the year ended April 30, 2011, sales were $307.9 million, an increase of $21.4 million or 7% as compared to sales of $286.5 million for the prior year. The United States/Canada region increased by $18.1 million or 12% when compared to the prior year, and the International region grew by $3.3 million or 2% when compared to the prior year.
Gross Margin
For the quarter ended April 30, 2011 gross margin was $38.9 million compared to $43.4 million in the same quarter last year. Gross margin percentage was approximately 57% compared to 58% for the quarter ended April 30, 2010.
For the year ended April 30, 2011, gross margin was $177.4 million when compared to $167.0 for the year ended April 30, 2010. Gross margin percentage was approximately 58% for the year ended April 30, 2011 as compared to 58% for the prior year.
Earnings
For the quarter ended April 30, 2011 net earnings were $12.4 million as compared to $15.3 million in the corresponding period last year.
For the year ended April 30, 2011, net earnings were $77.4 million as compared to $61.5 million in the corresponding period last year, an increase of 26%.
For the quarter ended April 30, 2011, earnings per share on a fully-diluted basis were $0.16 as compared to $0.21 in the same period in 2010.
For the year ended April 30, 2011, earnings per share on a fully-diluted basis were $1.03 as compared to $0.83 in the same period in 2010.
Operating Expenses
For the quarter ended April 30, 2011 selling and administrative expenses were $10.9 million compared to $10.3 million for the quarter ended April 30, 2010. Selling and administrative expenses represented approximately 16% of sales in the quarter ended April 30, 2011.
For the year ended April 30, 2011, selling and administrative expenses increased by $1.0 million as compared to the year ended April 30, 2010. Selling and administrative expenses represented approximately 13% of sales in fiscal 2011.
For the quarter ended April 30, 2011 gross research and development expenses increased by $2.1 million or 28% as compared to the corresponding period in 2010. Gross research and development expenses represented approximately 14% of sales for the quarter compared to 10% for the same period last year.
For the year ended April 30, 2011, gross research and development expenses rose by 12% or $3.7 million as compared to the prior year. Research and development expenses represented approximately 12% of sales.
Liquidity and Capital Resources
The Company's working capital as at April 30, 2011 was $324.2 million as compared to $264.2 million on April 30, 2010.
Cash and instruments held for trading were $192.0 million as at April 30, 2011 as compared to $145.0 million on April 30, 2010.
Cash provided by operations was $23.2 million for the quarter ended April 30, 2011 as compared to $19.0 million for the quarter ended April 30, 2010. Before taking into account the changes in non-cash working capital, the Company generated $15.0 million from operations for the quarter ended April 30, 2011 compared to $20.0 million for the same period last year.
Cash provided by operations was $73.8 million for the 2011 fiscal year as compared to cash provided by operations of $59.7 million for the 2010 fiscal year. Before taking into account changes in non-cash working capital, the Company generated $87.4 million from operations for fiscal 2011 as compared to $81.9 million for fiscal 2010.
The Company spent $1.9 million on the purchase of equipment for the quarter ended April 30, 2011 and $4.1 million for the year ended April 30, 2011.
For the year ended April 30, 2011, the Company spent $3.1 million on a business acquisition.
For the quarter ended April 30, 2011, the Company used cash from financing activities of $7.3 million which was principally a result of the payment of dividends of $7.4 million.
For the year ended April 30, 2011, the Company used cash from financing activities of $23.2 million as a result of the payment of dividends of $28.1 million, repayment of debt of $0.3 million offset by the issuance of share capital of $5.6 million.
Shipments and Backlog
Purchase order backlog at the end of May 2011 was in excess of $24 million and shipments during the month of May 2011 exceeded $18 million.
Dividend Declared
Evertz Board of Directors declared a dividend on June 15, 2011 of $0.12 per share.
The dividend is payable to shareholders of record on June 24, 2011 and will be paid on or about July 4, 2011.
Consolidated Balance Sheets
| As at April 30 |
| (in thousands of dollars) |
| April 30, | April 30, | ||||||
| 2011 | 2010 | ||||||
| Assets | |||||||
| Current assets | |||||||
| Cash | $ | 175,835 | $ | 133,755 | |||
| Instruments held for trading | 16,190 | 11,274 | |||||
| Accounts receivable | 52,732 | 48,988 | |||||
| Inventories (note 3) | 106,269 | 91,745 | |||||
| Income tax receivable (note 7) | 2,014 | 3,850 | |||||
| $ | 353,040 | $ | 289,612 | ||||
| Capital assets (note 4) | $ | 36,740 | $ | 39,768 | |||
| Goodwill (notes 2 and 5) | 17,858 | 14,584 | |||||
| Intangible assets (notes 2 and 6) | 2,224 | 1,823 | |||||
| $ | 409,862 | $ | 345,787 | ||||
| Liabilities | |||||||
| Current liabilities | |||||||
| Accounts payable and accrued liabilities | $ | 27,168 | $ | 23,899 | |||
| Current portion of long term debt (note 8) | 451 | 388 | |||||
| Future income taxes (note 7) | 1,177 | 1,164 | |||||
| $ | 28,796 | $ | 25,451 | ||||
| Long term debt (note 8) | $ | 2,493 | $ | 2,732 | |||
| Future income taxes (note 7) | 5,319 | 4,027 | |||||
| $ | 36,608 | $ | 32,210 | ||||
| Non-controlling interest | 1,550 | 1,408 | |||||
| Shareholders' Equity | |||||||
| Capital stock (note 9) | $ | 58,882 | $ | 51,035 | |||
| Contributed surplus (note 9) | 14,659 | 12,828 | |||||
| Accumulated other comprehensive loss (note 9) | (3,852 | ) | (4,459 | ) | |||
| Retained earnings | 302,015 | 252,765 | |||||
| $ | 298,163 | $ | 248,306 | ||||
| 371,704 | 312,169 | ||||||
| $ | 409,862 | $ | 345,787 | ||||
Consolidated Statements of Retained Earnings
| Three month and twelve month periods ended April 30, 2011 and 2010 |
| (in thousands of dollars) |
| Three-month periods ended | Twelve-month periods ended | |||||||||||
| April 30, | April 30, | |||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||
| Balance, beginning of period | $ | 297,092 | $ | 242,900 | $ | 252,765 | $ | 214,749 | ||||
| Net earnings | 12,370 | 15,253 | 77,393 | 61,502 | ||||||||
| Dividends paid | (7,447 | ) | (5,388 | ) | (28,143 | ) | (23,486 | ) | ||||
| Balance, end of period | $ | 302,015 | $ | 252,765 | $ | 302,015 | $ | 252,765 | ||||
Consolidated Statements of Comprehensive Income
| Three month and twelve month periods ended April 30, 2011 and 2010 |
| (in thousands of dollars) |
| Three-month periods ended | Twelve-month periods ended | |||||||||
| April 30, | April 30, | |||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||
| Net earnings for the period | $ | 12,370 | $ | 15,253 | $ | 77,393 | $ | 61,502 | ||
| Translation of self-sustaining operations | 77 | (1,993 | ) | 607 | (3,056 | ) | ||||
| Balance, end of period | $ | 12,447 | $ | 13,260 | $ | 78,000 | $ | 58,446 | ||
Consolidated Statements of Earnings
| Three month and twelve month periods ended April 30, 2011 and 2010 |
| (in thousands of dollars, except earnings per share amounts) |
| Three month periods ended | Twelve month periods ended | ||||||||||||
| April 30, | April 30, | ||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||
| Sales | $ | 68,532 | $ | 75,285 | $ | 307,882 | $ | 286,455 | |||||
| Cost of goods sold | 29,607 | 31,860 | 130,502 | 119,482 | |||||||||
| Gross margin | 38,925 | 43,425 | 177,380 | 166,973 | |||||||||
| Expenses | |||||||||||||
| Selling and administrative | 10,879 | 10,305 | 38,615 | 37,550 | |||||||||
| Research and development | 9,856 | 7,708 | 35,719 | 32,026 | |||||||||
| Investment tax credits | (2,271 | ) | (2,182 | ) | (8,410 | ) | (8,270 | ) | |||||
| Foreign exchange loss | 3,121 | 2,948 | 2,534 | 7,969 | |||||||||
| Amortization of intangibles | 308 | 36 | 1,023 | 1,240 | |||||||||
| Stock-based compensation (note 12) | 965 | 1,782 | 4,048 | 6,525 | |||||||||
| 22,858 | 20,597 | 73,529 | 77,040 | ||||||||||
| Earnings before undernoted | 16,067 | 22,828 | 103,851 | 89,933 | |||||||||
| Interest and other income | 1,236 | 1,097 | 4,277 | 342 | |||||||||
| Non-controlling interest | (84 | ) | 344 | (545 | ) | 21 | |||||||
| Earnings before income taxes | 17,219 | 24,269 | 107,583 | 90,296 | |||||||||
| Provision for income taxes | |||||||||||||
| Current | 4,359 | 7,175 | 29,207 | 24,391 | |||||||||
| Future | 490 | 1,841 | 983 | 4,403 | |||||||||
| 4,849 | 9,016 | 30,190 | 28,794 | ||||||||||
| Net earnings for the period | $ | 12,370 | $ | 15,253 | $ | 77,393 | $ | 61,502 | |||||
| Earnings per share (note 17) | |||||||||||||
| Basic | $ | 0.17 | $ | 0.21 | $ | 1.05 | $ | 0.84 | |||||
| Diluted | $ | 0.16 | $ | 0.21 | $ | 1.03 | $ | 0.83 | |||||
Consolidated Statements of Cash Flows
| Three month and twelve month periods ended April 30, 2011 and 2010 |
| (in thousands of dollars) |
| Three month periods ended | Twelve month periods ended | ||||||||||||
| April 30, | April 30, | ||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||
| Operating activities | |||||||||||||
| Net earnings | $ | 12,370 | $ | 15,253 | $ | 77,393 | $ | 61,502 | |||||
| Add: Items not involving cash | |||||||||||||
| Amortization of capital assets | 1,718 | 2,062 | 6,533 | 7,508 | |||||||||
| Amortization of intangible assets | 308 | 36 | 1,023 | 1,240 | |||||||||
| (Gain) loss on instruments held for trading | (863 | ) | (633 | ) | (3,668 | ) | 717 | ||||||
| (Gain) loss on disposal of capital assets | (44 | ) | 6 | 497 | 6 | ||||||||
| Non-controlling interest | 84 | (314 | ) | 545 | (21 | ) | |||||||
| Stock-based compensation | 965 | 1,782 | 4,048 | 6,525 | |||||||||
| Future income taxes | 490 | 1,841 | 983 | 4,403 | |||||||||
| 15,028 | 20,033 | 87,354 | 81,880 | ||||||||||
| Changes in non-cash working capital items | 8,138 | (1,061 | ) | (13,581 | ) | (22,145 | ) | ||||||
| Cash provided by operating activities | 23,166 | 18,972 | 73,773 | 59,735 | |||||||||
| Investing activities | |||||||||||||
| Acquisition of instruments held for trading | (12,003 | ) | - | (12,003 | ) | (11,347 | ) | ||||||
| Acquisition of capital assets | (1,881 | ) | (1,562 | ) | (4,116 | ) | (5,384 | ) | |||||
| Proceeds from sale of instruments held for trading | 9,253 | - | 10,755 | 32,000 | |||||||||
| Proceeds from disposal of capital assets | 148 | 45 | 795 | 45 | |||||||||
| Business acquisitions net of cash acquired | - | - | (3,089 | ) | - | ||||||||
| Cash (used in) provided by investing activities | (4,483 | ) | (1,517 | ) | (7,658 | ) | 15,314 | ||||||
| Financing activities | |||||||||||||
| Repayment of long term debt | 116 | 152 | (301 | ) | (1,306 | ) | |||||||
| Dividends paid | (7,447 | ) | (5,388 | ) | (28,143 | ) | (23,486 | ) | |||||
| Dividends paid by subsidiaries to non-controlling interests | - | (500 | ) | (400 | ) | (500 | ) | ||||||
| Capital stock issued | - | 203 | 5,630 | 2,308 | |||||||||
| Cash used in financing activities | (7,331 | ) | (5,533 | ) | (23,214 | ) | (22,984 | ) | |||||
| Effect of exchange rates on cash | (826 | ) | 680 | (821 | ) | 314 | |||||||
| Increase in cash | 10,526 | 12,602 | 42,080 | 52,379 | |||||||||
| Cash beginning of period | 165,309 | 121,153 | 133,755 | 81,376 | |||||||||
| Cash end of period | $ | 175,835 | $ | 133,755 | $ | 175,835 | $ | 133,755 | |||||
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 16, 2011 at 10:00 a.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 July 16, 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 373179.
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:
Anthony Gridley
Chief Financial Officer
(905) 335-7580
ir@evertz.com