Evertz Technologies Limited

Evertz Technologies Reports Record Quarterly Revenue of $131 Million in the Second Quarter Ended October 31, 2023


Burlington, Ontario–(Newsfile Corp. – December 6, 2023) – 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, 2023.

Second Quarter 2024 Highlights

  • Record quarterly revenue of $130.7 million, an increase of 15% or $17.5 million from the prior year quarter
  • International quarterly revenue of $56.7 million up $31.8 million or 128% from the prior year quarter
  • Earnings from operations of $32.2 million for the quarter, an increase of 13% from the prior year quarter
  • Net earnings of $22.3 million for the quarter, and increase of 11% from the prior year quarter
  • Fully diluted earnings per share of $0.29 for the quarter
  • Regular quarterly dividend increased to $0.195 per share

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

       Q2 ‘ 24  Q2 ‘ 23 
Revenue     $130,749$113,248
Gross margin     78,01967,477
Earnings from operations     32,15028,392
Net earnings     22,25119,977
Fully-diluted earnings per share     $0.29$0.26
Fully-diluted shares     76,650,24076,324,261

 

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

      Q2 ‘ 24  YE ’23 
Cash and cash equivalents    $55,865$12,468
Working capital    191,262171,428
Total assets    446,661436,652
Shareholders’ equity    254,682243,098

 

Revenue

For the quarter ended October 31, 2023, revenues were $130.7 million an increase of $17.5 million compared to revenues of $113.2 million for the quarter ended October 31, 2022. For the quarter, revenues in the United States/Canada region were $74.0 million a decrease of 16% compared to $88.3 million in the same quarter last year. The International region had revenues of $56.7 million, an increase of $31.8 million or 128% compared to $24.9 million in the same quarter last year.

Gross Margin

For the quarter ended October 31, 2023, gross margin was $78.0 million an increase of $10.5 million compared to $67.5 million in the same quarter last year. Gross margin percentage was approximately 59.7% as compared to 59.6% in the quarter ended October 31, 2022.

Earnings

For the quarter ended October 31, 2023, net earnings were $22.3 million or increase of 11% compared to $20.0 million in the corresponding period last year.

For the quarter ended October 31, 2023, earnings per share on a fully-diluted basis were $0.29 as compared to $0.26 in the corresponding period last year.

Operating Expenses

For the quarter ended October 31, 2023, selling and administrative expenses were $17.5 million as compared to $14.7 million for the quarter ended October 31, 2022.

For the quarter ended October 31, 2023, gross research and development expenses were $32.2 million as compared to $28.7 million for the quarter ended October 31, 2022.

Liquidity and Capital Resources

The Company’s working capital as at October 31, 2023 was $191.3 million as compared to $171.4 million on April 30, 2023.

Cash and cash equivalent was $55.9 million as at October 31, 2023 as compared to $12.5 million on April 30, 2023.

Cash generated from operations was $20.3 million for the quarter ended October 31, 2023 as compared to $7.7 million cash generated for the quarter ended October 31, 2022. Before taking into account taxes and the changes in non-cash working capital and current taxes, the Company generated $30.9 million from operations for the quarter ended October 31, 2023 compared to $27.5 million for the same period last year.

For the quarter, the Company generated $4.1 million from investing activities.

For the quarter ended, the Company used cash in financing activities of $17.0 million which was principally a result of the payment of dividends of $14.5 million.

Shipments and Backlog

At the end of November 2023, purchase order backlog was in excess of $324 million and shipments during the month of November 2023 were $48 million.

Dividend Declared

Evertz Board of Directors declared a regular quarterly dividend on December 6, 2023 of $0.195 per share.

The dividend is payable to shareholders of record on December 15, 2023 and will be paid on or about December 21, 2023.

Selected Consolidated Financial Information
(in thousands of dollars, except earnings per share and percentages)

         
 Three month period endedSix month period ended
 October 31,October 31,
  2023 2022 2023 2022
         
Revenue$130,749$113,248$256,568$214,786
Cost of goods sold52,73045,771106,51388,785
Gross margin78,01967,477150,055126,001
         
Expenses        
   Selling, administrative and general18,79215,90536,52330,081
   Research and development33,20229,36166,54358,625
   Investment tax credits(3,212)(3,173)(6,607)(6,362)
   Foreign exchange gain(2,913)(3,008)(861)(4,039)
 45,86939,08595,59878,305
Earnings before undernoted32,15028,39254,45747,696
         
Finance income (costs) 72(292)(48)(457)
Net loss on investments through profit and loss(2,492)(1,064)(2,704)(1,412)
Other income (expenses)216(288)122(160)
Earnings before income taxes29,94626,74851,82745,667
         
Provision for (recovery of) income taxes        
   Current6,6756,53014,43613,169
   Deferred1,020241(752)(1,409)
 7,6956,77113,68411,760
         
Net earnings for the period$22,251$19,977$38,143$33,907
         
Net earnings attributable to non-controlling interest158160457249
Net earnings attributable to shareholders22,09319,81737,68633,658
Net earnings for the period$22,251$19,977$38,143$33,907
         
Earnings per share (note 18)        
Basic$0.29$0.26$0.49$0.44
Diluted$0.29$0.26$0.49$0.44

 

Consolidated Balance Sheet Data As at As at 
  October 31, 2023 April 30, 2023 
Cash and cash equivalents $55,865$12,468
Inventory $204,318$202,479
Working capital $191,262$171,428
Total assets $449,163$436,652
Shareholders’ equity $254,682$243,098
    
Number of common shares outstanding:   
   Basic 76,040,49676,145,758
   Fully-diluted 82,005,74682,446,008
      
Weighted average number of shares outstanding:   
   Basic 76,107,76176,200,248
   Fully-diluted 76,702,26876,232,462

 

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, 2023 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 January 6, 2024. The rebroadcast can be accessed at 416-764-8692 or Toll Free 1 877-674-7070, passcode 982737#.

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, CPA, CA
Chief Financial Officer
(905) 335-3700
ir@evertz.com

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