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							78,019			67,477
Earnings from operations							32,150			28,392
Net earnings							22,251			19,977
Fully-diluted earnings per share						$	0.29		$	0.26
Fully-diluted shares							76,650,240			76,324,261

 

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						191,262			171,428
Total assets						446,661			436,652
Shareholders’ equity						254,682			243,098

 

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 ended								Six month period ended
		October 31,								October 31,
			2023				2022				2023				2022
Revenue	$	130,749			$	113,248			$	256,568			$	214,786
Cost of goods sold		52,730				45,771				106,513				88,785
Gross margin		78,019				67,477				150,055				126,001
Expenses
Selling, administrative and general		18,792				15,905				36,523				30,081
Research and development		33,202				29,361				66,543				58,625
Investment tax credits		(3,212		)		(3,173		)		(6,607		)		(6,362		)
Foreign exchange gain		(2,913		)		(3,008		)		(861		)		(4,039		)
		45,869				39,085				95,598				78,305
Earnings before undernoted		32,150				28,392				54,457				47,696
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 taxes		29,946				26,748				51,827				45,667
Provision for (recovery of) income taxes
Current		6,675				6,530				14,436				13,169
Deferred		1,020				241				(752		)		(1,409		)
		7,695				6,771				13,684				11,760
Net earnings for the period	$	22,251			$	19,977			$	38,143			$	33,907
Net earnings attributable to non-controlling interest		158				160				457				249
Net earnings attributable to shareholders		22,093				19,817				37,686				33,658
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			76,040,496				76,145,758
Fully-diluted			82,005,746				82,446,008
Weighted average number of shares outstanding:
Basic			76,107,761				76,200,248
Fully-diluted			76,702,268				76,232,462

 

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