Posts Tagged ‘Brian Campbell’

Evertz Announces Record Backlog and Shipments along with C$13.5 million IP Order

Analysis, Broadcaster Financial Results, Quarterly Results | Posted by Josh Stinehour
Sep 19 2016

Evertz announced revenue for the first quarter of its 2017 fiscal year, which ended on July 31, 2016.  Revenue for the quarter was C$87.0 million, up 2.5% versus the same period a year ago, and down 9.7% versus the previous quarter. evertz-logo

The strengthening US dollar contributed a foreign exchange gain of C$6.6 million during the quarter.

Net earnings for the quarter were C$18.6 million (C$0.25 earnings per share), flat versus the first fiscal quarter of 2016, and an increase of 129.6% versus the preceding quarter. The company generated C$19.9 million cash from operations in the quarter.  This compares to cash used by operations of C$7.8 million during the same period last year and cash from operations of C$10.1 million during the previous quarter.

Revenue results for the quarter were below the consensus estimates of equity analysts of C$95.1 million, while earnings results were above the consensus estimates of analysts of C$0.24 per share.

During management’s exchange with analysts, EVP Brian Campbell attributed the lower level of revenue in the quarter to the typical lumpiness of orders along with the stretching of certain orders into future quarters.

The Company said its shipments during August 2016 were C$31 million, and that its purchase order backlog at the end of the quarter was in excess of C$70 million.   The combined shipments and backlog of C$101 million is a record level for Evertz.

The top ten customers in the quarter accounted for 30% of revenue and no customer accounted for an excess of 6% of revenue. Evertz had 104 individual customers each representing over $200,000 of revenue.

Gross margins in the quarter were 57.3%, down slightly from 56.4% last year and also down from 57.1% last quarter.  For the quarter operating margins were 28.5%, compared to 29.9% during the same period last year and 23.9% in the FQ4 2016.

Evertz ended the quarter with C$125.4 million of cash and cash equivalents up slightly from C$123.1 million at the end of last quarter.

Revenue by Geography:

  • Revenue in the US/Canada region was C$52.1 million, an increase of 4.2% versus the same period a year ago, and flat versus the previous quarter. US/Canada sales were 59.9% of total revenue during the quarter, up from 58.9% of revenue during the same period a year ago, and a substantial increase versus the 53% contribution during the preceding quarter.
  • International revenue was C$34.9 million, flat versus the previous year’s result and a decrease of 22.6% when compared to the previous quarter. International sales were 40.1% of total revenue, down from 41.1% last year and 47.0% last quarter.

Operating Expenditures by Function:

  • R&D expenses (before tax credits) in the second quarter were C$17.5 million, an increase of 7.4% versus the same period last year, and an increase of 1.2% versus the previous quarter. R&D expenses were 20.1% of revenue in the quarter, higher on a percentage basis than the 19.2% last year and the 17.9% last quarter.
  • Selling and administrative expenses for the quarter were C$14.9 million, a slight increase of 0.7% versus last year, and a decrease of 8.0% versus the preceding quarter. Selling and administrative expenses represented approximately 17.1% of revenue in the quarter versus 19.2% of revenue during the same period last year, and 17.9% of revenue in the previous quarter.

Management Commentary on Results:

Consistent with earlier quarters, Evertz EVP Brian Campbell attributed the overall performance and combined shipment and order backlog “to the ongoing transition to HD, channel proliferation, the increasing global demand for high-quality video anywhere anytime”.  Also consistent with previous quarters, Mr. Campbell added emphasis on “the growing adoption of Evertz’s IP-based software-defined networking solutions.”

While Evertz declined to provide an update on the number of SDVN deployments (over 50 SDVN installments as of the 2016 NAB Show), the Company did issue a press release on the receipt of a C$13.5 million purchase order for a “state-of-the-art” IP facility for a US customer.  The purchase order includes multiple EXE hyperscale and IPX modular switch cores, IP media gateways, and compression and control solutions.

In responding to a question by Thanos Moschopoulos of BMO Capital Markets on the interest level of cloud for Evertz customers, Mr. Campbell provided commentary on cloud adoption in the media sector.  “It’s very much early days, but it is meaningful” stated Mr. Campbell.  “And Evertz is well down the path in virtualizing the important components for customers to meet to their needs, whether that’s in a public cloud or in a private cloud or hybrid” continued Mr. Campbell.

 

 

Related Content:

Press release on Evertz FY Q1 2017 Results

MD&A on Evertz FY Q1 2017 Results

Financial Statements for Evertz FY Q1 2017

Press Release on “State-of-the-Art” IP Facility Order

 

 

© Devoncroft Partners 2009-2016.  All Rights Reserved.

 

 

Evertz Reports Record Annual Revenue, Highlights SDVN Momentum

Analysis, Broadcast technology vendor financials, Quarterly Results | Posted by Josh Stinehour
Jun 10 2016

Evertz reported results for its fiscal fourth quarter and year ending April 30, 2016.  For the full year Evertz achieved record annual revenue of C$381.6 million, an increase of 5% versus fiscal 2015 revenue.  evertz-logo

Net earnings for the fiscal year were C$70.9 million (C$0.94 per share), an 8% increase against fiscal 2015.  Evertz generated cash flow of C$91.2 million from operations during 2016, an increase of 68% over 2015.

Gross margin percentage for fiscal 2016 was 57%, which is similar to the 56.7% recorded during fiscal 2015.  Operating margins for the 2016 year were 25.2%, a slight improvement over the 24.3% operating margins in 2015.

2016 annual revenue from the US/Canada region was $216.0 million, up 6% when compared to 2015.  US/Canada represented 56.6% of total revenue in 2016, approximately flat versus the 56.2% in 2015.

International revenue for full year 2016 was $165.5 million, a 3.9% increase compared to 2015.  As a percentage of total revenue, International represented 43.3% of total sales in 2016, which compares to 43.7% of total revenue in 2015.

The top ten customers for the year accounted for 29% of total revenue, and no customer accounted for an excess of 7% of revenue.  During the year, Evertz had 311 individual customers each representing over C$200,000 of revenue.

The Company ended the year with C$123.1 million of cash and cash equivalents down slightly from C$129.9 million at January 31, 2016.

 

Q4 FY2016 Results:

Evertz revenue for the fourth quarter of its 2016 fiscal year was C$96.4 million, up 5% versus the same quarter a year earlier, and down 3.3% versus the previous quarter ending January 31, 2016.

Revenue for the quarter was in line with the consensus analyst estimates for revenue of C$96.7 million.

The Company said that its shipments during May 2016 were C$21 million, and that its purchase order backlog at the end of the quarter was in excess of C$69 million.  May 2016 shipments represented a 28% year-over-year decline versus May 2015.  Management attributed the weakness to the timing of customer orders and fewer shipping days in May.

Net earnings for the quarter were C$8.1 million (C$0.11 earnings per share), a decrease of 26.6% versus the fourth fiscal quarter of 2015, and a decrease of 66% versus the preceding quarter.  Evertz generated cash from operations of C$10.1 million for the quarter, which compares favorably to the C$1.6 million used by operations during the fourth quarter of fiscal 2015.  The operating results included an unfavorable C$11.8 million foreign exchange loss during the quarter.

Revenue in quarter for the US/Canada region was C$51.2 million, up 2.4% versus the same period a year ago, and down 4.4% versus the previous quarter. US/Canada sales were 53% of total revenue during the quarter, down from 54% of revenue during the same period a year ago, and 53.7% of revenue last quarter.

International revenue for the quarter was C$45.1 million, representing a 7.6% increase versus the previous year’s result and a decrease of 2.3% when compared to the previous quarter. International sales were 47% of total revenue in the quarter, up from 45% during the same quarter last year and 46.3% from the preceding quarter.

Gross margins in the quarter were 57.1%, down slightly from 57.3% during the prior year period and equivalent to the 57.1% contribution from the third fiscal quarter of the year.

R&D expenses in the second quarter were C$17.3 million, a decrease of 1.9% versus the same period last year, and flat versus the previous quarter.  R&D expenses were approximately 17.9% of revenue in the quarter, lower on a percentage basis than last year (19.1%) and last quarter (17.3%).

Selling and administrative expenses for the quarter were C$16.2 million, an increase of 4.5% versus last year, and a decrease of 2.4% versus the sequential quarter. Selling and administrative expenses represented 16.8% of revenue in the quarter, the same as the year earlier quarter, and a slight increase versus the 16.6% contribution of revenue in the previous quarter.

On the call with earnings analyst, Evertz EVP Brian Campbell highlighted Evertz’s positive market momentum with its Software Defined Video Networking (SDVN) solutions.  Responding to a question by Robert Young from Canaccord Genuity, Brian Campbell stated, “We have over 50 deployments of SDVN including some of the first of their kind and largest scale.  By virtue of that, it would put us in leadership position.  As you recall as well, we were very early in developing the solutions and advocating software defined networking and also virtualized – whether it be private cloud or public cloud – solutions. So I think we are very well positioned to help our customers that are looking to move in that direction, and to give them great comfort that they’ve got fabulous solutions that they can count on going forward.”

 

 

Related Content:

Press Release on Evertz Q4 FY2016 Results

Evertz MD&A on Q4 FY2016 Results

Evertz Q4 FY2016 Financial Statements

 

 

© Devoncroft Partners 2009-2016.  All Rights Reserved.

 

 

International Sales and IP Adoption Drive Evertz Quarterly Growth

Analysis, Broadcast technology vendor financials, Quarterly Results | Posted by Josh Stinehour
Mar 09 2016

Evertz announced revenue for the third quarter of its 2016 fiscal year was C$99.8 million, up 10% versus the same period a year ago, and down 1.0% versus the previous quarter.evertz-logo

Net earnings for the quarter were C$24.4 million (C$0.32 per share), up 15.1% versus the same quarter last year, and up 24% versus the previous quarter. The company generated C$49.6 million cash from operations in the quarter, up from C$27.5 million cash used last year, and C$23.6 million generated last quarter.

The revenue result (second highest in Evertz history) was slightly above the consensus estimates of equity analysts, who were looking for revenue of $C97.5m.  Consensus earnings expectations for the quarter were C$0.24 per share.

Evertz EVP Brian Campbell attributed the strong performance to ongoing industry technical transition to IP networking and file-based workflow.  Brian Campbell also highlighted the growing adoption of Evertz’s IP-based software-defined networking solutions, compression solutions, and DreamCatcher IP-based replay and production suite.

Revenue in the US/Canada region was C$53.5 million, flat versus the same period a year ago, and down 12.4% versus the previous quarter. US/Canada sales were 53.7% of total revenue during the quarter, down from 59% of revenue during the same period a year ago, and 60.8% of revenue last quarter.

International revenue was C$46.2 million, an increase of 24% versus the same period last year, and up 17.5% versus the previous quarter. International sales were 46.3% of total revenue, up from 41% last year, and 39.2% last quarter.

The top ten customers in the quarter accounted for 36% of revenue (C$35.9 million), and the no customer in the quarter accounted for more than 11% of revenue (C$10.9 million). Altogether Evertz had 78 orders in the quarter that were greater than C$200,000 (the same as last year, and down from 82 last quarter).

Gross margins in the quarter were 57.1%, up from 57.6% last year and up from 57.2% last quarter. Evertz CFO Anthony Gridley reiterated the gross margin performance in the quarter was within the company’s target range of 56% to 60%.

R&D expenses in the second quarter were C$17.2 million, an increase of 8.8% versus the same period last year, and up 6.8% versus the previous quarter.  R&D expenses were approximately 17.2% of revenue in the quarter, higher on a percentage basis than last year (16.1%) and last quarter (16%).

Selling and administrative expenses for the quarter were C$15.1 million, an increase of 2.0% versus last year, and a decrease of 7.9% versus the previous quarter. Selling and administrative expenses represented approximately 15.2% of revenue in the quarter versus 16.3% of revenue during the same period last year, and 16.3% of revenue last quarter.

The company said that its shipments in February 2015 were C$28m, and that its purchase order backlog at the end of the third quarter were in excess of C$60 million, down slightly from the C$66 million figure in the second quarter.  Combination of the shipments and backlog (C$88 million) represents a 5% increase versus the same period last year.

The company ended the quarter with $129.9 million of cash and short term investments up from C$97.5 million at the end of last quarter, a difference of C$32.4m.  Cash generation in the quarter benefited from a C$18.7 million positive impact from changes in non-cash working capital accounts.

Management’s exchange with equity analyst Robert Young from Canaccord Genuity on the earnings call was worth highlighting for its commentary on the current competitive dynamic in the market:

Robert Young (Canaccord): … they (a competitor) also called out the number of IP projects that they booked and the number that they shipped. I was wondering, would you be willing to share a similar metric?

Brian Campbell (Evertz): Thanks, Robert. So in terms of the metric, what is more important for us would be to showcase the on-air installs. We’re quite familiar with the ESPN DC-2 that really launched the industry’s move to IP-based solutions for live production and workflow. And if we just even look to the recent Super Bowl 50, there’s been several industry articles highlighting the fact that the CBS Super truck was there as part of the coverage, or actually, the centerpiece of the coverage. That’s an industry pioneering, one of several that incorporates Evertz Software Defined Video Networking. In fact, it’s an EXE hyperscale, 23-terabit switch in that truck. And in addition, the Levi’s Stadium is a state-of-the-art stadium. It includes Evertz solutions, and for Super Bowl 50, there was an overlay of our Software Defined Video Networking helping to provide the coverage that folks saw at the Super Bowl and also the 4K replay for the in-stadium venue experiences.

 

 

Related Content:

Evertz Q3 2016 MD&A

Evertz Q3 2016 Financial Statements

 

 

© Devoncroft Partners 2009-2016.  All Rights Reserved.

 

 

Evertz Q1 FY 2016 Revenue Down 16 Percent, Management Remains “Cautiously Optimistic on Spending Environment”

Analysis, Broadcast technology vendor financials | Posted by Joe Zaller
Sep 10 2015

evertz-logoEvertz announced revenue for the first quarter of its 2016 fiscal year, which ended on July 31, 2015.  Revenue for the quarter was C$84.9m, down 16% versus the same period a year ago, and down 7.7% versus the previous quarter.

Net earnings for the quarter were C$18.6m ($0.26 earnings per share), an increase of 5.5% versus the first fiscal quarter of 2015, and an increase of 66% versus the preceding quarter. Excluding a significant foreign currency translation gain earning per share were $0.17 for the quarter. The company generated C$7.8m cash from operations in the quarter.  This compares to cash from operations of C$15.3m during the same period last year and C$12.3m during the previous quarter.

Revenue results were below the consensus estimates of equity analysts of $C91.7m.  Earnings results were slightly above the consensus estimates of analysts of earnings of C$0.24 per share.

The company said that its shipments during August 2015 were C$29m, and that its purchase order backlog at the end of the quarter was in excess of C$70m.   The combined shipments and backlog of C$99m is a record level for Evertz.

During management’s exchange with analysis, EVP Brian Campbell attributed this record level to expected orders not shipping in the quarter and to the nature of some of the orders stretching into future quarters including certain managed services commitments for disaster recovery.  Mr. Campbell noted the large IRD project mentioned on earlier calls was a national deployments, so is requiring a staged deployment at multiple locations.

Consistent with earlier quarters, Evertz EVP Brian Campbell attributed the overall performance “to the ongoing transition to HD, channel proliferation, the increasing global demand for high-quality video anywhere anytime, to worldwide demand for Evertz’s comprehensive product portfolio”.  Mr. Campbell added further color citing the “the growing adoption of Evertz IP-based Software Defined Networking solutions, our state-of-the-art DreamCatcher replay and Evertz IRD compression solutions.”

Revenue in the US/Canada region was C$50m, down 10% versus the same period a year ago, and flat versus the previous quarter. US/Canada sales were 59% of total revenue during the quarter, up from 57% of revenue during the same period a year ago, and 54% of revenue last quarter.

International revenue was C$34.9m, representing a 17.8% decline versus the previous year’s result and a decrease of 16.7% when compared to the previous quarter. International sales were 41% of total revenue, down from 43% last year and 46% last quarter.

The top ten customers in the quarter accounted for 30% of revenue (C$25.5m), and no customer accounted for an excess of 6% of revenue. Evertz had 81 individual customers each representing over $200,000 of revenue.

Gross margins in the quarter were 56.4%, down slightly from 57.0% last year and also down from 57.2% last quarter. Evertz executives reiterated that the gross margin performance in the quarter were within the company’s target range of 56% to 60%.

R&D expenses in the second quarter were C$16.3m, an increase of 3.1% versus the same period last year, and down 4.8% versus the previous quarter.  R&D expenses were approximately 19.1% of revenue in the quarter, higher on a percentage basis than last year (13.6%) and last quarter (15.7%) due to lower revenue.

Selling and administrative expenses for the quarter were C$14.8, an increase of 10.4% versus last year, and a decrease of 4.5% versus the sequential quarter. Selling and administrative expenses represented approximately 17.4% of revenue in the quarter versus 15.5% of revenue during the same period last year, and 16.8% of revenue in the previous quarter.

The company ended the quarter with $97.1m of cash and cash equivalents up slightly from C$100.7 at the end of last quarter.

Management’s exchange with equity analyst Thanos Moschopoulos from BMO Capital Markets on the call was worth highlighting for its commentary on the current market environment:

Thanos Moschopoulos (BMO): Brian, can you comment on the current spending environment, and how that’s changed, if at all, relative to last quarter? And also, how do you expect the spending environment to look going forward?

Brian Campbell (Evertz): Again, we’re cautiously optimistic on the spending environment. When you do take a look at this last quarter and the backlog and shipments that we’ve got going into Q2 of 2016, we’ve got — we had a quite strong order intake. So we’re feeling cautiously optimistic about the broad spending environment and very confident in our product positioning with the Software Defined Video Networking, the state-of-the art conventional broadcast infrastructure equipment we’ve got; and the DreamCatcher slow-motion sports replay. So those products are both winning new business for us and are also pulling along other of our products as well, too.

Thanos Moschopoulos (BMO): And so the case that you’re gaining share in a stagnant environment or putting aside the competitiveness of your products, is the actual underlying environment showing any improvement at all?

Brian Campbell (Evertz): That’s hard to tell. On a quarter-to-quarter basis, we only — we’ve got limited visibility, there are only a small handful of public companies in our sector. So we’re looking at the opportunities in front of us, and we have been winning marquee installations, designing, delivering and deploying Software Defined Video Networking. And I haven’t seen any other competitors deliver anything in scale.

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© Devoncroft Partners 2009-2015.  All Rights Reserved.

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Evertz Revenue Declines 3 Percent in Q3 FY 2015, Cites New Wins in Tough Market

Broadcaster Financial Results, Quarterly Results | Posted by Joe Zaller
Mar 05 2015

evertz-logo

Evertz announced that revenue for the third quarter of its 2015 fiscal year was C$90.7m, down 3% versus the same period a year ago, and up 9.5% versus the previous quarter.

Net earnings for the third quarter were C$21.2m (C$0.28 per share), down approximately 1% versus the same quarter last year, and up 47.9% versus the previous quarter.

The company generated C$27.5m cash from operations in the quarter, up from C$24.4m, last year, and C$17.5m last quarter.

The results (which were the fourth highest sales quarter in the history of the company), were in line with the consensus estimates of equity analysts.

Evertz EVP Brian Campbell said that the company’s revenue in the quarter was well-diversified, with the top 10 customers accounting for approximately 38% of sales.  The company had 72 orders of more than C$200,000 during the quarter (versus 78 last year, and 71 last quarter), and no single customer represented more than 7% (C$6.35m) of revenue.

According to Campbell, the company’s product mix profile during the quarter was “very consistent with the last few quarters,” specifically citing success with its EXE and IPX IP routing products, the DreamCatcher replay system, video compression products, and IRDs.  Campbell said that these new product families pull through traditional processing and infrastructure equipment with them.”

As evidence of this pull-through effect, Campbell highlighted how the “recent adoption of Evertz new Integrated Receiver/Decoder technology by a leading US national broadcast network customer, resulted in the purchase order of over C$10m” for Evertz IRDs, compression products, infrastructure products, and monitoring & control solutions.

Looking specifically at IP routers, Campbell said that although Evertz has not announced many wins for its EXE IP-based router (which it also calls SDVN), the company continues to have very good success with the EXE at its 46 terabit size, and has recently started to gain traction in the mobile production community with a newly introduced half-rack version of the EXE, which has a throughput capacity of 23 terabit per seconds.  Campbell added that the company currently has “in excess of 30 customers” for the EXE and IPX IP-based router products, and customer demand for these products remains “very good,” particularly with sports trucks, where the company is winning new business.

Revenue in the US/Canada region was C$53.6m, down 2.5% versus the same period a year ago, and up 18.1% versus the previous quarter. US/Canada sales were 59.1% of total revenue during the quarter, flat with the same period a year ago, and up from 54.7% of revenue last quarter. Evertz does not provide details of currency adjusted trading, but one analyst estimated that revenue in the US/Canada region was likely down 10% on a constant currency basis.

International revenue was C$37.2m, down 2.5% versus the same period a year ago, and down 1% versus the previous quarter. International sales were 41% of total revenue, flat with last year and down from C$45.2m last quarter.

Commenting on the US versus international results, Campbell said Evertz was “seeing good strength in the Canada/US region,” but internationally “there is a fair bit of geopolitical and economic instability,  so whether that’s Russian, Ukraine, parts of the Middle East or elsewhere, we are in a fairly challenging global economic market.”

Gross margins in the quarter were 56.2%, down from 57.6% last year and flat with the previous quarter. Evertz executives said that the gross margin performance in the quarter were within the company’s target range of 56% to 60%.

On the earnings call, RBC Capital analyst Steve Arthur asked why the company’s gross margins are “stubbornly at the lower end of your traditional range,” and what it will take to move gross margins “up towards the middle part of the 56 to 60 kind of range.” Evertz CFO Anthony Gridley said that gross margins in the quarter were driven by product mix, and that gross margins vary between geographies.  Gridley also said that “some of the larger scale projects can sometimes have lower margins, and this this quarter, we had some positives from currency, but they were offset by some few lower margin deals,” resulting in the 56% level.

R&D expenses in the third quarter were C$15.8m, an increase of 4.8% versus the same period last year, and up 4.3% versus the previous quarter.  R&D expenses were approximately 17.4% of revenue in the quarter, up from 16.1% last year, down from 18.2% last quarter when revenue was slightly lower.

Selling, general and administrative expenses for the quarter were C$16.4m, down 5.3% versus the same quarter last year, and essentially flat with the previous quarter. SG&A expenses represented approximately 18.1% of revenue in the quarter versus 18.6% of revenue during the same period last year, and 19.8% of revenue last quarter.

The company said that its shipments in February 2015 were C$19m, and that its purchase order backlog at the end of the third quarter of fiscal 2014 was in excess of C$65m. The combined C$84m total backlog in shipments represents a 24% year-over-year increase.

Evertz ended the quarter with C$103.3m of cash and short term investments, up from C$90.4 at the end of last quarter.

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Related Content:

Press Release: Evertz Technologies Reports Results for the Third Quarter Ended January 31, 2015

Previous Year: Evertz Q3 FY 2014 Revenue Jumps 30 Percent on Big Deals in North America

Previous Quarter: Evertz Revenue Increases 2 Percent in Q2 FY 2015, Misses Analyst Estimates

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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Evertz Reports Record Revenues for First Quarter of New Fiscal Year

broadcast industry technology trends, Broadcast technology vendor financials, Broadcast Vendor M&A, Quarterly Results | Posted by Joe Zaller
Sep 09 2014

Evertz announced record revenue for the first quarter of its 2015 fiscal year of C$98.0m, up 54% versus the same period a year ago (a poor quarter for the company), and up 12.5% versus the previous quarter.

Net earnings for the quarter were C$19.7m ($0.27 earnings per share), an increase of 61.3% versus the first fiscal quarter of 2014, and an increase of 33% versus the preceding quarter. The company generated C$15.3m cash from operations in the quarter.  This compares to cash from operations of C$2.7m during the same period last year and negative C$1.3m during the previous quarter.

The revenue result is the highest in Evertz’s corporate history. It came in well above the consensus estimates of equity analysts, which were expecting revenue of $C91.7m and earnings of C$0.24 per share.

Evertz EVP Brian Campbell attributed the strong performance “to the ongoing transition to HD, channel proliferation, the increasing global demand for high-quality video anywhere anytime, to worldwide demand for Evertz’s comprehensive product offering with our optimized workflow solutions providing compelling value to customers and to the growing adoption of Evertz’s state of the art sports replay and our software defined video networking solutions”

Revenue in the US/Canada region was C$55.5m, up 55% versus the same period a year ago, and up 28.8% versus the previous quarter. US/Canada sales were 57% of total revenue during the quarter, up from 56% of revenue during the same period a year ago, and 49.5% of revenue last quarter.

International revenue was C$42.5m, representing 52% growth versus the previous year’s result and a slight decrease of 3.7% when compared to the previous quarter. International sales were 43% of total revenue, down from 44% last year and 50.5% last quarter.

The top ten customers in the quarter accounted for 31% of revenue (C$17.2m), and the largest customer in the quarter accounted for 6% of revenue (C$3.3m).

During the first quarter of fiscal 2015, Evertz had 86 individual customers each representing over $200,000 of revenue.

Gross margins in the quarter were 57.0%, down slightly from 57.5% last year and up from 56.3% last quarter. Evertz executives said that the gross margin performance in the quarter were within the company’s target range of 56% to 60%.  Consistent with recent calls, equity analysts asked both why the company’s gross margins were not increasing more rapidly with revenue growth, and what is required for gross margins to move to the high-end of Management’s target range.

While Management cited gross margins drivers of product mix, geographic mix, and the discounting of volume orders, the principal factor was the competitive pricing environment.  “We’ve been in a quite a competitive pricing environment for the last year, so there hasn’t been any significant change to that.” noted Campbell.

R&D expenses in the second quarter were C$15.8m, an increase of 18% versus the same period last year, and down 2.8% versus the previous quarter.  R&D expenses were approximately 13.6% of revenue in the quarter, lower on a percentage basis than last year (16.6%) and last quarter (15.8%) due to higher revenue.

Selling and administrative expenses for the quarter were C$13.4m, an increase of 16% versus last year, and a decrease of 18.8% versus the previous quarter. Selling and administrative expenses represented approximately 15.5% of revenue in the quarter versus 20.5% of revenue during the same period last year, and 18.9% of revenue last quarter.

The company said that its shipments in August 2014 were C$25m, and that its purchase order backlog at the end of the quarter was in excess of C$46m.

The company ended the quarter with $103.4m of cash and short term investments up slightly from C$102.0 at the end of last quarter.

There was some additional commentary provided during management’s exchange with equity analysts:

Thanos Moschopoulos, BMO: “…With respect to the EXE and the overall IP product platform, is there any incremental color you can provide in terms of the types of customers you are seeing adopt that solution?”

Brian Campbell, Evertz: “…We are definitely seeing good interest and traction within our broadcast and new media customer set”

Rob Young, Canaccord Genuity: “…A lot of your competitors have been going through large M&A and are you seeing any beneficial environment for Evertz while some of these large competitors change their strategy?”

Brian Campbell, Evertz: “Yes we have picked up market share from our perspective.  We have very solid year-over-year growth and I don’t know that any of the competitors have had anything similar to that although some of them are no longer public entities where you can see the numbers. So I would say that yes we have definitely benefited and as a consequence perhaps of their activities but also directly resulting from the very significant, sustained investments we’ve made in new products and innovation.

Campbell concluded the call by emphasizing several points, “Our commitment to R&D continues to deliver innovative solutions enabling our customers to migrate to IP and IT based solutions to address the increasing complexities of our industry and to implement multiscreen TV everywhere anytime solutions.  Our customers have confidence in Evertz’s financial stability and our competitive position as one of the largest pure-players in the broadcast technology sector.”

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Related Content:

Press Release: Evertz Technologies Limited Revenue for the three months ended July 31, 2014

Evertz Revenue Declines 33 Percent in Q1 Fiscal 2014

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© Devoncroft partners 2009-2014. All Rights Reserved.

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Evertz Q3 FY 2014 Revenue Jumps 30 Percent on Big Deals in North America

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Mar 11 2014

Evertz announced that its revenue for the third quarter of its 2014 fiscal year was C$93.2m, up 30% versus the same period a year ago, and up 14.6% versus the previous quarter.

Net earnings for the quarter were C$21.3m (C$0.29 per share), up 61.3% versus the same quarter last year, and up 38% versus the previous quarter. The company generated C$24.4m cash from operations in the quarter, up from C$22m, last year, and C$9.7m last quarter.

The results (which were the second highest sales quarter in the history of the company), were well above the consensus estimates of equity analysts who were looking for revenue of $C80m and earnings of C$0.21 per share.

Evertz EVP Brian Campbell attributed the higher than expected results to improvements in the US/Canada market, the ongoing worldwide transition to HDTV, and strong customer demand for its new products.

Revenue in the US/Canada region was C$55m, up 63% versus the same period a year ago, and up 44.3% versus the previous quarter. US/Canada sales were 59% of total revenue during the quarter, up from 47% of revenue during the same period a year ago, and 47% of revenue last quarter.

International revenue was C$38.2m, essentially flat with last year, and down 11.4% versus the previous quarter. International sales were 41% of total revenue, down from 53% last year and last quarter.

The top ten customers in the quarter accounted for 38% of revenue (C$27.8m), and the largest customer in the quarter accounted for 12% of revenue (C$11.2m). Altogether Evertz had 78 orders in the quarter that were greater than C$200,000 (up from 57 last year, and 68 last quarter).

Unusually for Evertz, which is notoriously tight-lipped about corporate activity and customer wins, Cambell disclosed that the company had shipped a total of C$15m worth of product to two separate customers in the quarter, and specifically mentioned that these orders included the company’s new EXE routing switcher platform and Dreamcatcher video replay system.  Campbell declined to identify the customers by name, saying only that Dreamcatcher had been adopted by a “major sports league” and that the EXE platform had been adopted by “a major sports network.” However, an Evertz executive speaking on the “Professional Networked Media” panel at last month’s HPA Tech Retreat in Indian Wells, California, told the audience that the EXE-VSR router has been deployed by ESPN as part of its new D2 project.

Gross margins in the quarter were 57.6%, up from 56.1% last year and up from 57.4% last quarter. Evertz executives said that the gross margin performance in the quarter were within the company’s target range of 56% to 60%.  This prompted equity analysts on the earnings call to ask, for the second quarter in a row, why the company’s gross margins were not increasing more rapidly given the large percentage increases in quarterly sales.

Campbell attributed the gross margin performance to two factors. Because the company’s top-line growth in the quarter was driven by to big deals, “gross margins were lower than what you may anticipate from increased volumes, because of the large size of the orders, often-times those customers require a volume discount.”   Campbell also said gross margins in the quarter were affected by the order mix.

R&D expenses in the second quarter were C$15.05m, an increase of 15% versus the same period last year, and up 3% versus the previous quarter.  R&D expenses were approximately 16.1% of revenue in the quarter, lower on a percentage basis than last year (18.2%) and last quarter (18%) due to higher revenue.

Selling and administrative expenses for the quarter were C$14.9m, an increase of 9.2% versus last year, and an increase of 9.1% versus the previous quarter. Selling and administrative expenses represented approximately 16.1% of revenue in the quarter versus 18.2% of revenue during the same period last year, and 16.8% of revenue last quarter.

The company said that its shipments in February 2014 were C$25m, and that its purchase order backlog at the end of the third quarter of fiscal 2014 was in excess of C$43m, unchanged from last quarter.

Campbell said that the backlog remained the same despite higher revenue in the quarter because of a large order, which the customer asked to be expedited. Thus it was received and turned into sales during in one quarter, rather than showing up in backlog.

The company ended the quarter with $118.8m of cash and short term investments down from C$208.2 at the end of last quarter, a difference of C$89.4m.  The primary reason for this was the payment of dividends of C$115.8, including a special dividend of $C104m.

Evertz said it expects its annual revenues will continue to outpace the industry growth, and that its gross margin percentages may vary depending on the mix of products sold, the company’s success in winning more complete projects, utilization of manufacturing capacity and the competitiveness of the pricing environment. R&D will continue to be a key focus as the Company invests in new product development.

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Related Content:

Press Release: Evertz Technologies Third Quarter Fiscal 2014 Revenue Up 30%

Previous Year: Evertz Q3 FY 2013 Revenue Flat With Last Year, Down 14 Percent Versus Last Quarter

Evertz Revenue Declines 33 Percent in Q1 Fiscal 2014

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Evertz Misses Expectations as Revenue Dip 14 Percent in Q4 FY 2013, Still Delivers Record Full-Year Performance

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Jun 17 2013

Evertz announced that its revenue for the fourth quarter of its 2013 fiscal year was C$65.4m, down 14% versus the same period a year ago, and down 9% versus the previous quarter.

Net earnings for the quarter were C$10.52m (C$0.11 per share), down 40% versus the same quarter last year, and down 20% versus the previous quarter.

The results were well below the consensus expectations of equity analysts who were expecting revenue of C$73.2m and EPS of C$0.17. Analysts called the results “disappointing,” and noted that this was the company’s weakest quarter since Q4 2008.

Evertz EVP Brian Campbell said the company’s performance in the quarter had been impacted by the same type of macroeconomic issues seen across the technology sector in the first quarter of 2013, “where it’s pretty much in the first quarter sales have been off ten percent.” He also said that the European market had been weaker and is an area of concern for the company.

However, Campbell noted that the company does not necessarily see this as a long term trend, saying “I think it’s more a delay of spending as customers determine what they’re going to do in 2013.”

Revenue in the US/Canada region was C$33.3m, down 9.1% versus the same period a year ago, and down 1% versus the previous quarter.  US/Canada sales were 51% of total revenue during the quarter, up from 48% of revenue during the same period a year ago, and up from 47% of revenue last quarter.

International revenue was C$32.1m, down 19% versus the same period last year, and down 16% versus the previous quarter. International sales were 49% of total revenue, down from 52% last year, and down from 55% last quarter.

The company had 52 orders in the quarter that were greater than C$200,000 (down from 57 last quarter), and no single customer accounted for more than 5% of the company’s total revenue in the quarter.

Gross margins for the fourth quarter were 56.7%, up from 56% last year and up from 56.1% last quarter. Evertz CFO Anthony Gridley said that gross margins in the quarter were within the company’s historical range.

R&D expenses in the quarter were C$15.3m, an increase of 20.1% versus the same period last year, and up 17% versus the previous quarter.   R&D expenses were approximately 23.5% of revenue in the quarter, versus 15% last year, and 17% last quarter. Gridley attributed the sharp rise in R&D expenditure in the quarter to accelerated the purchase of materials and prototypes before the end of its fiscal year.  Gridley added that the company, which sees strong R&D as one of its differentiators, added engineers in the quarter and intends to continue adding engineers every quarter.

Selling and administrative expenses for the quarter were C$14m, an increase of 14% versus last year, and an increase of 2% versus the previous quarter. Selling and administrative expenses represented approximately 21% of revenue in the quarter versus 16% of revenue during the same period last year, and 19% of revenue last quarter.

The company’s purchase order backlog at the end of the third quarter of 2012 was in excess of C$35m, down from C$45m last quarter, and shipments during the month of May 2013 were $19 million.

 

Record Results for the Full Fiscal Year 2013

Revenue for the full year FY 2012 was C$316.3, up 8% versus the previous year, and a record result for the company.

The company’s top 10 customers accounted for approximately 25% of sales (C$79.1m) during the year, with no single customer representing over 5% (C$15.8m) of total annual revenue.

Full year fiscal 2013 net earnings were C$65.2m (C$0.88 per share), up 9% compared to net earnings of C$60m (C$0.81) in fiscal 2012.

During the year, the company had 246 orders of more than C$200,000, down from 282 in the previous year.

Full year revenue from the US and Canada revenue was $C173.2m, up 15.6% versus the full fiscal year 2012.  US/Canada revenue accounted for 55% of total revenue in fiscal 2013, up from 51% in fiscal 2012.

Full year revenue from the international region was $C143.1m, essentially flat with the previous year. International revenue accounted for 45% of total revenue in fiscal 2013, down from 49% in fiscal 2012.

Cash provided by operations was C$89.6 m for the 2013 fiscal year, up from C$66.6m in fiscal 2012. Before taking into account taxes and the changes in non-cash working capital, Evertz generated C$78.6m from operations for fiscal 2013, compared to C$73.0m for fiscal 2012.

Gross margins for the full year fiscal 2013 were 57.5%, up from 57% last year and within what company’s targeted range.

Full year R&D expenses were C$52.85m, an increase of 20% versus the previous year.   R&D expenses were approximately

Selling and administrative expenses for the fiscal year were C$53.1m, an increase of 13% versus fiscal 2012.  Selling and administrative expenses represented approximately 17% of full year revenue, up from 16% of full year revenue in fiscal 2012.

For the year ended April 30, 2013, the company used cash in financing activities of C$40.1m as a result of the payment of dividends of C$42.9m, repurchase of capital stock costing C$4.2m offset by the issuance of share capital of C$8m.

Campbell attributed the company’s record revenue to “continued worldwide demand for Evertz’s high-definition 3G and 4K video infrastructure offerings. More specifically, in success of Evertz’s comprehensive solutions delivering compelling value to our customers, and to the ongoing transition to high definition, and the increasing global demand for high-quality video.”

Campbell said the company remains “cautiously optimistic regarding the global economic environment, confident in Evertz’s ability to deliver compelling value and long-term stability to our customers. We’re encouraged by the Company’s continued solid performance in fiscal 2013, its record sales of C$316m, delivering net earnings of 21%, all while investing C$53m in R&D to fuel future growth. We are encouraged by the momentum we carry into fiscal 2014 with a purchase order backlog plus new shipments totaling over C$54m. With Evertz’s significant investments in new award-winning technologies, our comprehensive product offerings and the capabilities of our staff, Evertz is poised to build upon our leadership position.”

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Related Content:

Press Release: Evertz Technologies Reports Record Revenues in Fiscal 2013

Previous Quarter: Evertz Q3 FY 2013 Revenue Flat With Last Year, Down 14 Percent versus Last Quarter

Previous Year: Evertz Q4 FY 2012 Revenue Rises 11 Percent, Order Backlog at Record Level

More Broadcast Vendor M&A: Evertz Makes $5 Million Mystery Buy

Previous Quarter: Evertz Q2 Revenue Up 18 Percent Y/Y, Down 13 Percent Q/Q Following Record Q1 2013

Evertz Discloses Orders Worth More Than $12 Million From Two Mystery US Customers

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Evertz Q3 FY 2013 Revenue Flat With Last Year, Down 14 Percent Versus Last Quarter

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Mar 07 2013

Evertz announced that its revenue for the third quarter of its 2013 fiscal year was C$71.8m, essentially flat versus the same period a year ago, and down of 14% versus the previous quarter.

Net earnings for the quarter were C$13.2m (C$0.18 per share), up 6% versus the same quarter last year, and down 28% versus the previous quarter.

The results were below the consensus expectations of equity analysts who were looking for revenue of C$81.6m and EPS of C$0.24.

Investors did not like the news and sent the company’s stock down by more than 8% the first trading day after the results were issued.

Evertz EVP Brian Campbell attributed the lower than expected results to competitive pricing pressure and the delay of capital projects by customers.

Revenue in the US/Canada region was C$33.8m, up 6% versus the same period a year ago, and down 28% versus the previous quarter. US/Canada sales were 47% of total revenue during the quarter, up from 45% of revenue during the same period a year ago, and down from 56% of revenue last quarter.

International revenue was C$38m, a decrease of 4% versus the same period last year, and an increase of 4% versus the previous quarter. International sales were 53% of total revenue, down from 55% last year, and up from 44% last quarter.

The company had 57 orders in the quarter that were greater than C$200,000 (down from 70 last year, and 61 last quarter).

Gross margins in the quarter were 56.1%, down slightly from 56.2% last year and down from 59% last quarter. Evertz CFO Anthony Gridley said that gross margins in the quarter were within the company’s historical range.

R&D expenses in the second quarter were C$13.1m, an increase of 18.5% versus the same period last year, and up 4% versus the previous quarter.  R&D expenses were approximately 18% of revenue in the quarter, versus 15% last year, and 15% last quarter when revenue came in at C$96m.

SG&A expenses for the quarter were C$13.7m, an increase of 8% versus last year, and an increase of 5% versus the previous quarter. Selling and administrative expenses represented approximately 19% of revenue in the quarter versus 18% of revenue during the same period last year, and 16% of revenue last quarter.

The company’s purchase order backlog at the end of the third quarter of 2012 was in excess of C$45m, up from C$41m last quarter. Campbell said the bulk of this backlog will be delivered in the company’s fiscal Q4, but indicated that a portion of the backlog would be turned into revenue over multiple future quarters.

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Related Content:

Press Release: Evertz Technologies Third Quarter Fiscal 2013 Earnings Per Share Up 6%

More Broadcast Vendor M&A: Evertz Makes $5 Million Mystery Buy

Previous Quarter: Evertz Q2 Revenue Up 18 Percent Y/Y, Down 13 Percent Q/Q Following Record Q1 2013

Evertz Discloses Orders Worth More Than $12 Million From Two Mystery US Customers

Previous Year: Evertz Revenue and Earnings Decline in Fiscal Q3 2012 Despite Improving International Performance

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Evertz Beats Expectations in Q1 Fiscal 2013 as Profits Jump 41 Percent

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Sep 14 2012

Evertz announced that its revenue for the first quarter of its 2013 fiscal year was C$96m, an increase of 28% versus the same period a year ago, and up 26% versus the previous quarter.

Net earnings for the quarter were C$24.8m (C$0.34 per share), up 41% versus the same quarter last year, and up 87% versus the previous quarter.

The results for the quarter were well above the expectations of equity analysts, who on average were looking for revenue of C$84.9m and EPS of C$0.25.

Revenue in the US/Canada region was C$59.4, or 62% of total revenue, up 31% versus the same period a year ago, and up 62% versus the previous quarter.

International revenue was C$36.6m, an increase of 23% versus the same period last year, and down 8% versus the previous quarter. International sales were 38% of total revenue, down from 40% last year.

Evertz EVP Brian Campbell attributed the revenue growth to the ongoing transition to HD, a growing demand globally for high quality video, traction in the company’s workflow solutions from its purchase of Pharos, and several large projects that were recognized during the quarter.

The company had 76 orders in the quarter that were greater than C$200,000, and the top ten customers provided for 41% of revenue (C$39.4m), so Evertz clearly closed some big deals close during the quarter.

Significantly, one customer accounted for 15% of total revenue, or C$14.4m, during the quarter. C$14.4m is a huge order for any broadcast vendor, and this means that the company’s revenue during the quarter was significantly more concentrated than in the past.  For comparison, during the previous quarter no customer accounted for more than 5% of total revenue, or C$3.82m. In response to questions about the “15% customer” from Canacord Genuity analyst Robert Young, Brian Campbell pointed out that the 15% number relates to all product shipped to a single customer during the quarter, not necessarily a single order for one project.  Campbell also said that although this order was indeed large, the company has had large orders in the past.  What appears to make this order unusual is that it appears to have happened during a single quarter as opposed to delivery over multiple quarters, which Campbell said is more common.  Campbell declined to state who the customer was, or its geographic location, but given the rise in US/Canada sales, and the q/q decline in international revenue, it’s easy to speculate.

The strong results follow on from the previous quarter when Evertz announced that its order backlog had reached a record C$57m, and said that most of this backlog would ship during the current quarter. This appears to have happened, as the company’s order backlog at the end of the first quarter of its 2013 fiscal year was C$40m, or 30% lower than three months ago.

Gross margins in the quarter were 58%, up from 57% last year and up from 56% last quarter.  The company attributed its margin expansion in the quarter to higher revenue and traction in new product areas. Company CFO Anthony Gridley said that gross margins were within the company’s targeted range of 56% to 62%, and that the company is “comfortable” with that range.  Campbell added that this margin range allows Evertz to make money while remaining price-competitive in the market.

R&D expenses in the quarter were C$11.8m, an increase of 14% versus the same period last year, and down 8% versus the previous quarter when the company accelerated the purchase of materials and prototypes in order to take advantage of government tax incentives before the end of its fiscal year.  Gridley said the company is constantly adding R&D staff, so any reported decline in R&D spending is typically the result of an increase in prototypes in previous quarters.  Campbell said that the company will continue to invest in R&D as the company sees its engineering strength as a key market differentiator, and Evertz intends to “continue to extend this lead.”

SG&A expenses for the quarter were C$12.4m, an increase of 19% versus last year, and essentially flat with the previous quarter. Selling and administrative expenses represented approximately 13% of revenue in the quarter versus 14% of revenue during the same period last year, and 16% of revenue last quarter.

The company’s purchase order backlog at the end of August 2012 was in excess of C$40m, up 90% versus the same period last year, and down 30% versus the previous quarter.

Commenting on the recent IBC trade show, Campbell said that Evertz saw increasing awareness of some of its recent large R&D investments.  He specifically cited video transport, IT-based playout, asset management, and compressed domain products as areas where the company is seeing interest.

When asked by an analyst about the pick-up in broadcast technology M&A activity such as the recent purchase of Miranda by Belden, and the decision by Harris to divest its broadcast business, Campbell responded by saying that Grass Valley should be added to this list because it is also has been going through changes since being acquired by Francisco Partners.  Campbell implied that the distractions facing competitors was a net positive for Evertz.  “Customers look to Evertz as a very stable entity with very little disruption, so we’ve been able to capture market share” he said.

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Related Content:

Press Release: Evertz Technologies Reports Results for the First Quarter Ended July 31, 2012

Previous Quarter: Evertz Q4 FY 2012 Revenue Rises 11 Percent, Order Backlog at Record Level

Previous Year: Evertz Beats Expectations in Q1 2012 as Domestic Revenue Increases Six Percent

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