Mr. Anthony Gridley reports
EVERTZ TECHNOLOGIES REPORTS FIRST QUARTER RESULTS FOR THE PERIOD ENDED JULY 31, 2018
Evertz Technologies Ltd. has released its results for the first quarter ended July 31, 2018.
First quarter 2019 highlights:
-
Quarterly revenue of $103.1-million, up 11 per cent sequentially;
- U.S./Canada revenue up 15 per cent to $75.2-million from the prior year;
- Net earnings of $17.4-million for the quarter, up 32 per cent from the prior year;
- Fully diluted earnings per share of 23 cents for the quarter, up 35 per cent from the prior year.
Selected financial information
CONSOLIDATED STATEMENT OF EARNINGS DATA
(in thousands of dollars, except earnings per share data)
Q1 2019 Q1 2018
Revenue $103,089 $109,009
Gross margin 58,778 61,161
Earnings from operations 23,289 18,172
Net earnings 17,361 13,192
Fully diluted earnings per share $0.23 $0.17
Revenue
For the quarter ended July 31, 2018, revenues were $103.1-million, compared with revenues of $109.0-million for the quarter ended July 31, 2017. For the quarter, revenues in the U.S./Canadian region were $75.2-million, compared with $65.4-million in the same quarter last year. The international region had revenues of $27.9-million, compared with $43.6-million in the same quarter last year.
Gross margin
For the quarter ended July 31, 2018, gross margin was $58.8-million as compared with $61.2-million in the same quarter last year. Gross margin percentage was approximately 57.0 per cent as compared with 56.1 per cent in the quarter ended July 31, 2017.
Earnings
For the quarter ended July 31, 2018, net earnings were $17.4-million as compared with $13.2-million in the corresponding period last year.
For the quarter ended July 31, 2018, earnings per share on a fully diluted basis were 23 cents as compared with 17 cents in the corresponding period last year.
Operating expenses
For the quarter ended July 31, 2018, selling and administrative expenses were $15.9-million as compared with $15.8-million for the quarter ended July 31, 2017.
For the quarter ended July 31, 2018, gross research and development expenses were $21.3-million as compared with $19.3-million for the quarter ended July 31, 2017.
Liquidity and capital resources
The company's working capital as at July 31, 2018, was $268.4-million as compared with $264.5-million on April 30, 2018.
Cash and marketable securities were $102.7-million as at July 31, 2018, as compared with $94.2-million on April 30, 2018.
Cash generated from operations was $24.2-million for the quarter ended July 31, 2018, as compared with $32.2-million for the quarter ended July 31, 2017. Before taking into account taxes and the changes in non-cash working capital and current taxes, the company generated $20.3-million from operations for the quarter ended July 31, 2018, compared with $15.5-million for the same period last year.
For the quarter, the company used $13.0-million from investing activities, which was principally driven by the purchase of marketable securities of $10.8-million and capital equipment of $2.3-million.
For the quarter, the company used cash in financing activities of $13.5-million, which was principally a result of the payment of dividends of $13.8-million.
Shipments and backlog
At the end of August, 2018, purchase order backlog was in excess of $81-million, and shipments during the month of August, 2018, were $41-million.
Dividend declared
Evertz board of directors declared a regular quarterly dividend on Sept. 11, 2018, of 18 cents per share.
The dividend is payable to shareholders of record on Sept. 21, 2018, and will be paid on or about Sept. 28, 2018.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(in thousands of dollars, except earnings per share and percentages)
Three months ended Three months ended
July 31, 2018 July 31, 2017
Revenue $103,089 $109,009
Cost of goods sold 44,311 47,848
Gross margin 58,778 61,161
Expenses
Selling and administrative 15,905 15,827
General 1,339 2,097
Research and development 21,320 19,272
Investment tax credits (2,003) (2,451)
Foreign exchange (gain) loss (1,072) 8,244
35,489 42,989
Earnings before undernoted 23,289 18,172
Finance income 359 101
Finance costs (426) (48)
Other income and expenses 135 29
Earnings before income taxes 23,357 18,254
Provision for (recovery of) income taxes
Current 5,618 5,855
Deferred 378 (793)
5,996 5,062
Net earnings for the period 17,361 13,192
Net earnings attributable to non-controlling interest 88 114
Net earnings attributable to shareholders 17,273 13,078
Net earnings for the period 17,361 13,192
Earnings per share
Basic 0.23 0.17
Diluted 0.23 0.17
Conference call
The company will hold a conference call with financial analysts to discuss the results on Sept. 11, 2018, at 5 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 dialling 647-793-2625 or toll-free (North America) 1-888-297-0356, access code 3157015.
For those unable to listen to the live call, a rebroadcast will also be available until Oct. 11, 2018. The rebroadcast can be accessed at 647-436-0148 or toll-free 1-888-203-1112. The passcode for the rebroadcast is 3157015.
About Evertz Technologies Ltd.
Evertz Technologies 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 multichannel digital, and high- and ultrahigh-definition television (HDTV and UHD), and next-generation high-bandwidth low-latency IP (Internet protocol) 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.
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