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Press release from Marketwire

Evertz Technologies Reports Results for the Third Quarter Ended January 31, 2012

Tuesday, March 06, 2012

Evertz Technologies Reports Results for the Third Quarter Ended January 31, 201216:00 EST Tuesday, March 06, 2012BURLINGTON, ONTARIO--(Marketwire - March 6, 2012) - Attention Business/Financial Editors:Evertz Technologies Limited (TSX:ET), a leading equipment provider to the television broadcast industry, today reported its results, for the third quarter ended January 31, 2012, of its fiscal 2012 year. Quarterly Highlights Revenue was $71.4 million Revenue in the International region up 11% year over year for the quarter Net earnings were $12.7 million for the quarter Gross investment in R&D was $11.1 million Cash generated from operations of $23.8 million Purchased and cancelled 148,500 shares pursuant to a NCIB Cash and instruments held for trading at $190.5 millionSelected Financial Information Consolidated Statement of Earnings Data (in thousands of dollars, except per share amounts) Q3 ' 12Q3 '11Revenue$71,445$84,073Gross margin40,16248,684Earnings from operations17,35729,045Net earnings attributable to shareholders12,63724,238Fully-diluted earnings per share$0.17$0.32Selected Financial InformationConsolidated Balance Sheet Data(in thousands of dollars)Q3 '12YE ' 11Cash and instruments held for trading$190,514$192,025Working capital320,540326,029Total assets418,358410,511Shareholders' equity375,278372,209 Revenue For the quarter ended January 31, 2012, revenues were $71.4 million as compared to revenues of $84.1 million for the quarter ended January 31, 2011. For the quarter, revenues in the United States/Canada region were $32.0 million. The International region had revenues of $39.5 million. Gross Margin For the quarter ended January 31, 2012 gross margin was $40.2 million compared to $48.7 million in the same quarter last year. Gross margin percentage was approximately 56.2% compared to 57.9% for the quarter ended January 31, 2011. Earnings For the quarter ended January 31, 2012 net earnings were $12.7 million as compared to $24.4 million in the corresponding period last year.For the quarter ended January 31, 2012, earnings per share on a fully-diluted basis were $0.17 as compared to $0.32 in the same period in 2011. Operating Expenses For the quarter January 31, 2012 selling and administrative expenses were $12.7 million compared to $10.0 million for the quarter ended January 31, 2011. Selling and administrative expenses represented approximately 17.7% of revenue in the quarter ended January 31, 2012.For the quarter ended January 31, 2012 gross research and development expenses increased by $1.4 million or 15% as compared to the corresponding period in 2011. Gross research and development expenses represented approximately 15.5% of revenue for the quarter compared to 11.4% for the same period last year. Liquidity and Capital Resources The Company's working capital as at January 31, 2012 was $320.5 million as compared to $326.0 million on April 30, 2011.Cash and instruments held for trading were $190.5 million as at January 31, 2012 as compared to $192.0 million on April 30, 2011.Cash provided by operations was $23.8 million for the quarter ended January 31, 2012 as compared to $29.0 million for the quarter ended January 31, 2011. Before taking into account the changes in non-cash working capital, the Company generated $16.7 million from operations for the quarter ended January 31, 2012 compared to $24.2 million for the same period last year.The Company spent $10.9 million on the purchase of equipment for the quarter ended January 31, 2012 as compared to $0.6 million for the quarter ended January 31, 2011.For the quarter ended January 31, 2012, the Company used cash from financing activities of $8.7 million which was principally a result of the payment of dividends of $8.8 million and the repurchase of common shares for $1.8 million being partially offset by cash generated of $2.0 million from the issuance of common shares. IFRS Reporting Commenced First Quarter of 2012 Starting with the first quarter of 2012, Evertz is now reporting its financial results in accordance with International Financial Reporting Standards ("IFRS"). Previously, the Company prepared its financial results under Canadian Generally Accepted Accounting Standards ("Canadian GAAP"). The comparative financial information has been restated to reflect the adoption of IFRS. Further information on the transition from Canadian GAAP to IFRS is provided within the Company's first quarter July 31, 2011 Management's Discussion and Analysis and Note 16 to the July 31, 2011 Interim Condensed Consolidated Financial Statements. Shipments and Backlog Purchase order backlog at the end of February 2012 was in excess of $42 million and shipments during the month of February 2012 exceeded $26 million. Dividend Declared On March 6, 2012, the Evertz Board of Directors approved an increase of the dividend to $0.14 per share from $0.12 per share. This is the 5th dividend increase in the past five years, reflecting the underlying strength of the Company's cash flow and business outlook.The dividend is payable to shareholders of record on March 16, 2012 and will be paid on or about March 23, 2012.Selected Consolidated Financial Information(Unaudited)(in thousands of dollars, except earnings per share and share data)Three month period endedNine month period endedJanuary 31,January 31,2012201120122011Revenue$71,445$84,073$217,060$240,216Cost of goods sold31,28335,38993,675100,895Gross margin40,16248,684123,385139,321ExpensesSelling and administrative12,6779,98534,79827,194General1,5801,8274,6784,770Research and development11,0589,62031,41825,863Investment tax credits(2,574)(2,258)(7,310)(6,139)Foreign exchange gain64465(3,001)(478)22,80519,63960,58351,210Earnings before undernoted17,35729,04562,80288,111Finance income5512041,427733Finance costs(45)(43)(142)(120)Other income and expenses(332)3,935(557)2,428Earnings before income taxes17,53133,14163,53091,152Provision for (recovery of) income taxesCurrent4,3237,97017,80424,848Deferred463808(740)4634,7868,77817,06425,311Net earnings for the period$12,745$24,363$46,466$65,841Net earnings attributable to non-controlling interest108125306461Net earnings attributable to shareholders12,63724,23846,16065,380Net earnings for the period$12,745$24,363$46,466$65,841Earnings per shareBasic$0.17$0.32$0.63$0.88Diluted$0.17$0.32$0.62$0.88Consolidated Balance Sheet DataAs atAs atJanuary 31, 2012April 30, 2011Cash and instruments held for trading$190,514$192,025Inventory$104,353$106,422Working capital$320,540$326,029Total assets$418,358$410,511Shareholders' equity$375,278$372,209Number of common shares outstanding:Basic73,260,48674,470,606Fully-diluted77,973,28678,577,206Weighted average number of shares outstanding:Basic73,746,64673,989,997Fully-diluted73,937,25474,879,139Forward-Looking StatementsThe 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 CallThe Company will hold a conference call with financial analysts to discuss the results on March 6, 2012 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 1-416-849- 6166 or toll-free (North America) 1-866-250-6267.For those unable to listen to the live call, a rebroadcast will also be available until April 6, 2012. The rebroadcast can be accessed at 1-416-915-1035 or toll-free 1-866-245-6755. The pass code for the rebroadcast is 603097.About EvertzEvertz Technologies Limited (TSX:ET) designs, manufactures and markets video and audio infrastructure equipment for the production, post production, broadcast and internet protocol television ("IPTV") industry. 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 definition television ("HDTV") broadcast environments and by telecommunications companies to roll-out IPTV. The Company's products allow its customers to generate additional revenue while reducing costs through the more efficient signal routing, distribution, monitoring and management of content as well as the automation of previously manual processes.FOR FURTHER INFORMATION PLEASE CONTACT: Anthony GridleyEvertz Technologies LimitedChief Financial Officer(905) 335