Evertz announced revenue for its second fiscal quarter of 2015 (ending October 31, 2014) of C$82.9 million, an increase of 2% versus the same quarter in 2014 and down 15% from the previous quarter.
Net earnings for the quarter were C$14.3 million ($0.19 earnings per share), a decline of approximately 8% against the 2014 second quarter performance and down 27% versus the preceding quarter. It is important to note the revenue result from the first quarter of 2015 was the highest in Evertz’s corporate history.
The results for the quarter were lower than the consensus estimate of equity analysts, who were expecting revenue of C$88m and earnings of C$0.23 per share.
The revenue miss was principally attributable to the softness in international markets.
Revenue in the US/Canada region was C$45.4m, up 19% versus the same period a year ago, and up 18.2% versus the previous quarter. US/Canada sales were 55% of total revenue during the quarter, up from 47% of revenue during the same period a year ago, and 57% of revenue last quarter.
International revenue was C$37.5m, representing a 13% decline versus the previous year’s result and a slight decrease of 11.8% when compared to the previous quarter. International sales were 45% of total revenue, down from 53% last year and 43% last quarter.
Gross margins in the quarter were 56.2%, down slightly from 57.4% last year and up from 57.0% last quarter. This result remained in Evertz’s previously communicated target gross margin range of 56% to 60%.
R&D expenses in the second quarter were C$15.1m, an increase of 3% versus the same period last year, and down 4.5% versus the previous quarter. R&D expenses were approximately 18.2% of revenue in the quarter, higher on a percentage basis of revenue than last year (17.9%) and last quarter (13.6%) due to higher revenue.
Selling and administrative expenses for the quarter were C$15.1m, an increase of 10% versus last year, and an increase of 12.6% versus the previous quarter. Selling and administrative expenses represented approximately 18.2% of revenue in the quarter versus 16.8% of revenue during the same period last year, and 15.5% of revenue last quarter.
One interesting non-financial note from the quarter was the disclosure that Evertz has signed deals with more than thirty customers for its IP routing products, including its new 46 TB/s EXE router.
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