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Evertz Technologies Second Quarter Fiscal 2013 Revenue and Earnings Up 18%

BURLINGTON, ONTARIO -- (Marketwire) -- 12/04/12 --

Attention Business/Financial Editors:

Evertz Technologies Limited (TSX:ET), a global leader in video infrastructure solutions for production, playout and delivery systems for television broadcasters, telecom and multi-system operators, today reported that revenue and earnings per share rose 18% in its results for the second quarter of its fiscal 2013 year.

Quarterly Highlights


--  Revenue of $83.2 million, an increase of 18% year over year for the
    quarter 
--  US/Canada region revenue was up $10.8 million or 30% compared to a year
    ago 
--  Revenue in the International region rose 5% compared to a year ago, to
    $36.4 million 
--  Gross margin rose to 59% 
--  Fully diluted earnings per share increased 18% to $0.26 for the quarter
    as compared to $0.22 a year ago 
--  Cash and instruments held for trading increased to over $215 million 

                                                                            
Selected Financial Information                                              
Consolidated Statement of Earnings Data                                     
(in thousands of dollars, except per share amounts)                         
                                                       Q2 ' 13       Q2 ' 12
                                                    ----------    ----------
Revenue                                              $  83,158     $  70,487
Gross margin                                            48,860        40,376
Earnings from operations                                25,894        21,983
Net earnings                                            19,092        16,097
Fully-diluted earnings per share                     $    0.26     $    0.22
                                                                            
Selected Financial Information                                              
Consolidated Balance Sheet Data                                             
(in thousands of dollars)                                                   
                                                       Q2 ' 13       YE ' 12
                                                    ----------    ----------
Cash and instruments held for trading                $ 215,342     $ 185,669
Working capital                                        349,281       325,677
Total assets                                           446,714       431,864
Shareholders' equity                                   402,075       378,417

Revenue

For the quarter ended October 31, 2012, revenues were $83.2 million, an increase of $12.7 million or 18% as compared to revenues of $70.5 million for the quarter ended October 31, 2011. For the quarter, revenues in the United States/Canada region were $46.7 million, an increase of $10.8 million or 30% when compared to the same quarter last year. The International region had revenues of $36.4 million, an increase of 5% when compared to the same quarter last year.

Gross Margin

For the quarter ended October 31, 2012 gross margin was $48.9 million compared to $40.4 million in the same quarter last year. Gross margin percentage was approximately 59% compared to 57% for the quarter ended October 31, 2011.

Earnings

For the quarter ended October 31, 2012 net earnings were $19.1 million as compared to $16.1 million in the corresponding period last year.

For the quarter ended October 31, 2012, earnings per share on a fully-diluted basis were $0.26 as compared to $0.22 in the same period in 2011.

Operating Expenses

For the quarter ended October 31, 2012 selling and administrative expenses were $13.1 million compared to $11.7 million for the quarter ended October 31, 2011. Selling and administrative expenses represented approximately 16% of revenue in the quarter compared to 17% for the same period last year.

For the quarter ended October 31, 2012 gross research and development expenses increased by $2.6 million or 26% as compared to the corresponding period in 2011. Gross research and development expenses represented approximately 15% of revenue for the quarter ended October 31, 2012.

Liquidity and Capital Resources

The Company's working capital as at October 31, 2012 was $349.3 million as compared to $325.7 million on April 30, 2012.

Cash and instruments held for trading were $215.3 million as at October 31, 2012 as compared to $185.7 million on April 30, 2012.

Cash provided by operations was $46.4 million for the quarter ended October 31, 2012 as compared to $22.3 million for the quarter ended October 31, 2011. Before taking into account the changes in non-cash working capital, the Company generated $22.5 million from operations for the quarter ended October 31, 2012 compared to $19.0 million for the same period last year.

The Company spent $1.4 million on the purchase of capital assets for the quarter ended October 31, 2012 and $3.4 million for the quarter ended October 31, 2011.

For the quarter ended October 31, 2012, the Company used cash from financing activities of $11.0 million which was principally a result of the payment of dividends of $10.6 million.

Shipments and Backlog

Purchase order backlog at the end of November 2012 was in excess of $41 million and shipments during the month of November 2012 exceeded $21 million.

Dividend Declared

Evertz Board of Directors declared a dividend on December 4, 2012 of $0.14 per share.

The dividend is payable to shareholders of record on December 14, 2012 and will be paid on or about December 21, 2012.


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                   Three month period      Six month period 
                                                ended                 ended 
                                          October 31,           October 31, 
----------------------------------------------------------------------------
                                     2012        2011       2012       2011 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Revenue                         $  83,158   $  70,487  $ 179,119  $ 145,615 
Cost of goods sold                 34,298      30,111     74,604     62,392 
----------------------------------------------------------------------------
Gross margin                       48,860      40,376    104,515     83,223 
----------------------------------------------------------------------------
                                                                            
Expenses                                                                    
  Selling and administrative       13,090      11,739     25,459     22,121 
  General                           1,449       1,789      2,897      3,098 
  Research and development         12,612      10,041     24,404     20,360 
  Investment tax credits           (2,864)     (2,454)    (6,050)    (4,736)
  Foreign exchange gain            (1,321)     (2,722)    (1,323)    (3,065)
----------------------------------------------------------------------------
                                   22,966      18,393     45,387     37,778 
----------------------------------------------------------------------------
Earnings before undernoted         25,894      21,983     59,128     45,445 
                                                                            
Finance income                        428         453        877        876 
Finance costs                         (78)        (46)      (166)       (97)
Other income and expenses            (119)       (242)        (4)      (225)
----------------------------------------------------------------------------
Earnings before income taxes       26,125      22,148     59,835     45,999 
----------------------------------------------------------------------------
                                                                            
Provision for income taxes                                                  
  Current                           6,324       6,126     15,312     13,481 
  Deferred                            709         (75)       672     (1,203)
----------------------------------------------------------------------------
                                    7,033       6,051     15,984     12,278 
----------------------------------------------------------------------------
                                                                            
Net earnings for the period     $  19,092   $  16,097  $  43,851  $  33,721 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Net earnings attributable to                                                
 non-controlling interest             185         101        355        198 
----------------------------------------------------------------------------
Net earnings attributable to                                                
 shareholders                      18,907      15,996     43,496     33,523 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net earnings for the period     $  19,092   $  16,097  $  43,851  $  33,721 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Earnings per share                                                          
Basic                           $    0.26   $    0.22  $    0.59  $    0.45 
Diluted                         $    0.26   $    0.22  $    0.59  $    0.45 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Consolidated Balance Sheet Data                       As at            As at
                                           October 31, 2012   April 30, 2012
----------------------------------------------------------------------------
Cash and instruments held for trading          $    215,342     $    185,669
Inventory                                      $    107,927     $    109,211
Working capital                                $    349,281     $    325,677
Total assets                                   $    446,714     $    431,864
Shareholders' equity                           $    402,075     $    378,417
                                                                            
Number of common shares outstanding:                                        
  Basic                                          73,172,986       73,225,786
  Fully -diluted                                 77,924,586       77,904,086
                                                                            
Weighted average number of shares                                           
 outstanding:                                                               
  Basic                                          73,166,072       73,612,759
  Fully -diluted                                 73,382,083       73,812,767
----------------------------------------------------------------------------
----------------------------------------------------------------------------

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 December 4, 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 January 4, 2013. The rebroadcast can be accessed at 1-416-915-1035 or toll-free 1-866-245-6755. The pass code for the rebroadcast is 235180.

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 definition television ("HDTV") broadcast environments and by telecommunications and new-media companies. 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.

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