Evertz Technologies Reports Fiscal 2021 Results for the Year Ended April 30, 2021

Burlington, Ontario–(Newsfile Corp. – June 17, 2021) – Evertz Technologies Limited (TSX: ET), the leader in Software Defined Video Network (“SDVN”) technology, today reported its results for the fourth quarter and year ended April 30, 2021.

Fiscal 2021 Highlights

  • Revenue of $342.9 million
  • Earnings from operations before foreign exchange (“FX”) of $72.8 million
  • Net earnings of $42.0 million for the year
  • Fully diluted earnings per share of $0.55 for the year
  • Completed investment in DDSports, Inc. (Shottracker)
  • Completed acquisition of EaseLive AS, a direct to consumer interactive graphics company
  • Completed strategic asset acquisition of iconic Studer audio brand, technology and related assets from Harman International

Fourth Quarter 2021 Highlights

  • Quarterly revenue of $93.3 million
  • Earnings from operations before foreign exchange of $19.2 million
  • Net earnings of $9.8 million for the quarter
  • Fully diluted earnings per share of $0.13 for the quarter

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

     Q4’21     Q4’20     YE’21     YE’20 
Revenue $ 93,293 $ 92,167 $ 342,888 $ 436,592
Gross margin   55,558   52,053   199,424   248,376
Earnings from operations   14,055   21,400   57,986   92,558
Earnings from operations before FX     19,166   15,279   72,847   89,074
Net earnings   9,810   16,038   41,960   69,172
Fully-diluted earnings per share $ 0.13 $ 0.21 $ 0.55 $ 0.90
Fully-diluted shares   76,646,831   76,415,396   76,403,894   76,642,787

 

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

     YE ‘ 21     YE ’20 
Cash and cash equivalents $ 108,771 $ 75,025
Working capital   214,515   223,720
Total assets   451,793   443,673
Shareholders’ equity   292,734   295,012

 

Revenue
For the quarter ended April 30, 2021, revenues were $93.3 million compared to revenues of $92.2 million for the quarter ended April 30, 2020. For the quarter, revenues in the United States/Canada region were $63.6 million, an increase of $4.9 million, compared to $58.7 million in the same quarter last year. The International region had revenues of $29.7 million compared to $33.5 million in the same quarter last year.

For the year ended April 30, 2021, sales were $342.9 million, compared to sales of $436.6 million for the year ended April 30, 2020. For the year, revenues in the United States/Canada region were $222.7 million compared to $289.0 million in the prior year. The International region had revenues of $120.2 million compared to $147.6 million in the prior year.

Gross Margin
For the quarter ended April 30, 2021, gross margin was $55.6 million as compared to $52.1 million in the same quarter last year. Gross margin percentage was approximately 59.6% as compared to 56.5% in the quarter ended April 30, 2020.

For the year ended April 30, 2021, gross margin was $199.4 million as compared to $248.4 million for the year ended April 30, 2020. Gross margin percentage was approximately 58.2% as compared to 56.9% for the prior year.

Earnings
For the quarter ended April 30, 2021, net earnings were $9.8 million as compared to $16.0 million in the corresponding period last year.

For the year ended April 30, 2021, net earnings were $42.0 million as compared to $69.2 million in the corresponding period last year.

For the quarter ended April 30, 2021, earnings per share on a fully-diluted basis were $0.13 as compared to $0.21 in the corresponding period last year.

For the year ended April 30, 2021, earnings per share on a fully-diluted basis were $0.55 as compared to $0.90 in the same period in 2020.

Operating Expenses
For the quarter ended April 30, 2021, selling and administrative expenses were $13.0 million as compared to $15.4 million for the quarter ended April 30, 2020.

For the year ended April 30, 2021, selling and administrative expenses were $49.4 million as compared to $67.6 million for the year ended April 30, 2020.

For the quarter ended April 30, 2021, gross research and development expenses were $22.5 million as compared to $21.2 million for the quarter ended April 30, 2020.

For the year ended April 30, 2021, gross research and development expenses were $80.2 million as compared to $90.8 million for the year ended April 30, 2020.

Liquidity and Capital Resources
The Company’s working capital as at April 30, 2021 was $214.5 million as compared to $223.7 million on April 30, 2020.

Cash was $108.8 million as at April 30, 2021 as compared to $75.0 million on April 30, 2020.

Cash generated from operations was $33.6 million for the quarter ended April 30, 2021 as compared to $47.1 million cash generated for the quarter ended April 30, 2020. Before taking into account taxes and the changes in non-cash working capital and current taxes, the Company generated $12.4 million from operations for the quarter ended April 30, 2021 compared to $21.6 million for the same period last year.

Cash provided by operations was $101.0 million for the 2021 fiscal year as compared to cash provided by operations of $109.3 million for the 2020 fiscal year. Before taking into account taxes and the changes in non-cash working capital and current taxes, the Company generated $59.0 million from operations for fiscal 2021 as compared to $87.7 million for fiscal 2020.

For the quarter, the Company used $4.1 million for investing activities.

For the year, the Company used $18.6 million in investing activities which was principally driven by the acquisition of capital equipment of $9.6 million and investment in DDSports Inc. (Shottracker) for $7.8 million.

For the quarter ended, the Company used cash in financing activities of $15.2 million which was principally a result of the payment of dividends of $13.8 million.

For the year ended April 30, 2021, the Company used cash in financing activities of $49.4 million which was principally a result of the payment of dividends of $41.6 million.

Shipments and Backlog
At the end of May 2021, purchase order backlog was in excess of $138 million and shipments during the month of May 2021 were $27 million.

Dividend Declared
Evertz Board of Directors declared a regular quarterly dividend on June 17, 2021 of $0.18 per share.

The dividend is payable to shareholders of record on June 25, 2021 and will be paid on or about July 2, 2021.

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

    Three month period ended     Twelve month period ended  
    April 30,     April 30,  
    2021     2020     2021     2020  
Revenue $ 93,293   $ 92,167   $ 342,888   $ 436,592  
Cost of goods sold   37,735     40,114     143,464     188,216  
Gross margin   55,558     52,053     199,424     248,376  
                         
Expenses                        
   Selling and administrative   12,987     15,400     49,413     67,597  
   General   1,287     824     3,896     3,509  
   Research and development   22,516     21,202     80,187     90,827  
   Investment tax credits   (2,942 )   (1,558 )   (13,042 )   (7,595 )
   Share based compensation   2,545     906     6,123     4,964  
   Foreign exchange loss (gain)   5,110     (6,121 )   14,861     (3,484 )
    41,503     30,653     141,438     155,818  
Earnings before undernoted   14,055     21,400     57,986     92,558  
                         
Finance income   66     181     687     1,077  
Finance costs   (516 )   (470 )   (1,709 )   (1,845 )
Share of net loss of Investment in Associate   (531 )   –     (531 )   –  
Other income and expenses   (157 )   (134 )   (588 )   169  
Earnings before income taxes   12,917     20,977     55,845     91,959  
Provision for (recovery of) income taxes                        
   Current   6,459     4,232     17,369     22,304  
   Deferred   (3,352 )   707     (3,484 )   483  
    3,107     4,939     13,885     22,787  
                         
Net earnings for the period $ 9,810   $ 16,038   $ 41,960   $ 69,172  
                         
Net earnings attributable to non-controlling interest   (144 )   138     202     565  
Net earnings attributable to shareholders   9,954     15,900     41,758     68,607  
Net earnings for the period $ 9,810   $ 16,038   $ 41,960   $ 69,172  
                         
Earnings per share                        
Basic $ 0.13   $ 0.21   $ 0.55   $ 0.90  
Diluted $ 0.13   $ 0.21   $ 0.55   $ 0.90  

 

    April 30,     April 30,   April 30,
    2021     2020   2019  
               
Assets              
Current assets              
   Cash and cash equivalents $ 108,771   $ 75,025 $ 104,583
   Marketable securities   –     –   4,023
   Trade and other receivables   76,785     90,631   81,498
   Contract assets   2,821     7,864   22,348
   Prepaid expenses   6,559     9,003   9,045
   Inventories   152,699     161,985   171,271
   Income tax receivable   –     –   708  
    347,635     344,508   393,476
                 
Property, plant and equipment   44,799     47,794   48,887
Right-of-use assets   23,570     28,823   –
Goodwill   21,140     20,771   20,716
Intangible assets   4,476     1,573   1,952
Investment in Associate   6,869     –   –
Deferred income taxes   3,304     204     1,566  
  $ 451,793   $ 443,673   $ 466,597  
               
Liabilities              
Current liabilities              
   Trade and other payables $ 66,727   $ 62,231 $ 63,647
   Provisions   4,069     5,031   4,171
   Deferred revenue   58,047     45,076   42,843
   Current portion of long term debt   –     238   294
   Current potion of lease obligations   4,122     4,400   –
   Income tax payable   155     3,812   –  
    133,120     120,788   110,955
               
Long term debt   –     –   239
Long term redemption liability   2,523     –   –
Long term lease obligations   21,245     25,465   –  
    156,888     146,253   111,194
               
Equity              
Capital stock   143,605     143,915   139,865
Share based payment reserve   9,514     8,279   8,245
               
Accumulated other comprehensive income   (1,062 )   1,032   1,729
Retained earnings   140,677     141,786   203,284  
    139,615     142,818   205,013  
                 
Total equity attributable to shareholders   292,734     295,012   353,123  
Non-controlling interest   2,171     2,408   2,280  
    294,905     297,420   355,403  
  $ 451,793   $ 443,673 $ 466,597  

 

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 17, 2021 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 8321777.

For those unable to listen to the live call, a rebroadcast will also be available until
July 17, 2021. The rebroadcast can be accessed at 647-436-0148 or toll-free 1-888-203-1112. The pass code for the rebroadcast is 8321777.

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”.

Contact Information
Evertz Technologies Limited
Doug Moore, CPA, CA
(905) 335-7580
ir@evertz.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/87936

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