Posts Tagged ‘Thanos Moschopoulos’

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

 

 

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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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