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Evertz Technologies Ltd
Symbol ET
Shares Issued 76,449,446
Close 2020-06-30 C$ 11.22
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Evertz Technologies earns $69.17M in fiscal 2020

2020-06-30 16:18 ET - News Release

Mr. Doug Moore reports

EVERTZ TECHNOLOGIES REPORTS FISCAL 2020 RESULTS FOR THE YEAR ENDED APRIL 30, 2020

Evertz Technologies Ltd. has released 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

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.

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".

We seek Safe Harbor.

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