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EVERTZ TECHNOLOGIES LIMITED
2024 ANNUAL REPORT
A LETTER TO FELLOW SHAREHOLDERS
Evertz had an outstanding year in fiscal 2024, with record annual revenues exceeding over half a billion dollars.
Evertz gained substantial market share with a 13% increase in revenue and delivered meaningful profitability and
value for our shareholders. Evertz commitment to our customers’ success and their trust in our capabilities allowed
Evertz to execute on our backlog of work and deliver for our customers, while carrying significant momentum heading
into fiscal 2025.
Highlights from the year include:
•
Record annual revenues of $515 million, an increase of $60 million (13%) from the prior year;
•
Earnings before taxes of $97 million, an increase of 11 % from the prior year;
•
Reoccurring software, services and other software of $189 million, representing 37% of total revenue;
•
Annual investment in research and development of $135 million;
•
Distribution of $58.6 million in excess cash flow to shareholders through increased quarterly dividends
totaling $0.77 per share during the year.
Long-term Stability
Evertz has achieved success within an evolving industry that has gone through industry consolidation, changes to our
customer base and greater adoption of cloud and IP based solutions. Evertz is relied upon as a stable rock within our
industry with our over 300 years of senior management industry experience, consistently providing reliable, innovative,
and best-in-class solutions. Evertz prioritizes our customer’s needs and works assiduously for our customers to provide
leading edge technological solutions, on time and reliable deliveries, with continuous service and after-sales support
to ensure their success. Evertz is committed to providing innovative solutions to complex technological challenges and
being relied upon as a stable, trusted partner.
Business Transformation and greater visibility
Our customers are increasingly turning to Evertz to help build larger and more encompassing systems. Software and
services is becoming more of a catalyst to drive the sale and completion of these large scaled solutions. In fiscal 2024,
Evertz continued to make progress on the transformation of our business to more software and reoccurring-based
offerings and solutions. Evertz generated $189 million in combined reoccurring software, services and other software,
growing 9% in the year and 50% over two years, and representing 37% of Evertz total revenue. The success of this
transformation, which includes Evertz large order for the delivery of Evertz cloud software and associated professional
services, for $152 million across five years, ensures greater visibility and predictability. The visibility we achieve through
our growing reoccurring software, services and other software segment enables Evertz to strengthen our commitment
to innovation, increasing shareholder returns through capital return, and strong execution.
Innovation
Evertz commitment to innovation is a backbone of our vision as we maintain our technological leadership in a
constantly changing industry and as we expand market share into adjacent industries. Evertz invested $135 million
in research and development in the past year and over $500 million throughout the past five years. We are investing
in research and development across our diversified portfolio, providing solutions that leverage our knowledge
in networking, security, and through the utilization of artificial intelligence, to fuel future innovation and growth
opportunities. The annual investments fueled development activities within our core product portfolio and funded
intensive longer term R&D initiatives, such as: unified Orchestration, Control & Management, Analytics and User
Interface software platforms; high performance low latency IP networking technologies; our IT based and Cloud
architectures; Playout & Content Management; DreamCatcher™ Live Production Suite; Interactive graphic overlay
platforms; Compression and Media Transport Solutions; and Professional AV Solutions. These solutions are enabling
our current and future customers to efficiently transition to IP, IT and public/private/hybrid Cloud based solutions,
providing flexible tools for content creation, production, monetization, and distribution.
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EVERTZ TECHNOLOGIES LIMITED
2024 ANNUAL REPORT
COMPANY RECOGNITION
TV Technology – 2024 NAB Best of Show – Evertz awarded, in June 2024,
for the 7880RFIP platform, a groundbreaking RFoverIP solution, streamlining
the integration of complex digital IF or hybrid workflows, further solidifying our
position as an industry leader in satellite ground infrastructure digitization,
supporting end-to-end control over IP networks.
Throughout the year, Evertz executed on our innovation strategy and received
a number of recognitions, including those listed below:
FOUNDATION FOR GROWTH
As a leader in our technology sector, we are continuously dealing with increasing complexity. It is clear that technology
is an essential driver to productivity and economic growth. Evertz is in a position to lead; able to reach out to current
and new market customers with clean, technologically superior solutions and leverage the power of technology to
solve challenges brought forth by ourselves and our current and future customers. As the market leader, we are well
positioned with numerous, large exciting opportunities to capitalize on this in the coming year. Evertz is built upon
the long-term vision of generating value and sustainable success through continuous investment in technology while
maintaining a vigilant focus on operating discipline and uncompromising commitment throughout the organization to
doing it the “right way”.
We generated significant cash from operations and maintain a pristine balance sheet. We view this financial strength
as a competitive advantage, providing flexibility and allowing us to deliver significant value to our shareholders
through the continued payment of dividends, while adhering to our strategy of investment into new technologies.
AV Technology – 2024 InfoComm Best of Show – Evertz awarded, in June 2024, for
the DreamCatcher™ BRAVO Studio for corporate live production and NUCLEUS for
simplified AV over IP. BRAVO Studio unifies multiple live media applications to allow
broadcasters and new media companies to create content with smaller production
teams and lower costs. While NUCLEUS provides a scalable, reliable and cost-
effective 1GE based architecture for AV distribution for smaller AV applications.
TVB Europe – 2023 IBC Best of Show – Evertz awarded, in September 2023,
Reflektor On-Premise & Cloud Signal Processor a software-as-a-service (“SaaS”)
that on-ramp and off-ramps signals into and out of cloud services. Reflektor
normalizes, transcodes, and replicates IP streams that are used within cloud
environments overcoming networking limitations in a cloud environment.
TV Technology – 2023 IBC Best of Show – Evertz awarded, in September 2023,
for the ev670-X30-HW-2 a next-generation virtualized media processing platform
revolutionizing how media facilities are designed. Enabling customers to move
to an infrastructure that allows for essential core broadcast services to be applied
on a generic hardware platform when required.
50 Best Managed Company – Evertz was awarded as a 2024 Platinum Member
of Canada’s 50 Best Managed Companies, which recognizes excellence in Canadian
companies. Canada’s 50 Best Managed Companies identifies Canadian corporate
success through companies focused on their core vision, creating stakeholder value
and excelling in the global economy.
Save Soil Movement – Evertz continues to be a proud sponsor of Conscious
Planet and committed to raising awareness to the Save Soil Movement. The Save
Soil Movement is a global movement launched to address land degradation and
advocate for healthy soil and is consistent with Evertz goal of operating
in a sustainable future.
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EVERTZ TECHNOLOGIES LIMITED
2024 ANNUAL REPORT
Douglas A. DeBruin
Executive Chairman
Romolo Magarelli
Director, President and Chief Executive Officer
MOVING FOWARD
Evertz is entering the new year with a strong backlog and pipeline, and with the backing of our healthy balance sheet
and consistent investments in our technological solutions, we expect superior industry results for the 2025 fiscal year.
Evertz believes that our portfolio is stronger than ever and that Evertz has never been better positioned to help
deliver our customer outcomes. We are maintaining our focus on investing into new technologies, both leveraging
and expanding upon the high-profile industry leading Cloud and on-premise solutions that Evertz has successfully
deployed, while addressing technology requirements in adjacent markets . With significant orders and a robust
pipeline with key customers, we expect to gain broader adoption within the Media and Entertainment technology
industry and in vertical and adjacent markets.
Key successes to build upon:
• IP based Software Defined Video Networking platforms;
• IT based workflow and Cloud services, delivering an immersive viewing experience from production to playout;
• Mediator-X Asset Management and Playout platforms, managing and delivering content over private and public
Cloud infrastructures;
• evertz.io – powerful Cloud SaaS, enabling the launch and monetization of many OTT, DTC, Connected TV,
and Free Ad-Supported TV “FAST” channels around the world;
• DreamCatcher™ Live Production Suite – IP based instant replay & BRAVO Studio live production suite;
• Studer Audio – live production solution for comprehensive audio mixing; and
• evertzAV – network based, high quality and highly secure audio visual solutions.
These technologies provide superior solutions enabling our customers to address and implement complex multi-
platform solutions, including efficient, flexible, and reliable creation, production, monetization, and distribution of
content, with the expansion of remote operation capabilities, and to efficiently transition to evolving IP & IT based
solutions including Cloud and SaaS services.
We enter fiscal 2025 with significant momentum and demand for our Evertz IP, IT & Cloud native services and
solutions with influential industry leaders across the world. As a leading innovator and one of the largest pure
players in our technology sector, we believe Evertz is in a position of strength to provide solutions to customers
and deliver to shareholders!
We would like to take this opportunity to thank our employees, channel partners, customers and shareholders
for their continued support and we look forward to a successful future.
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EVERTZ TECHNOLOGIES LIMITED
2024 ANNUAL REPORT
THE FOLLOWING MANAGEMENT’S DISCUSSION AND ANALYSIS IS A REVIEW OF RESULTS OF THE OPERATIONS AND THE
LIQUIDITY AND CAPITAL RESOURCES OF THE COMPANY. IT SHOULD BE READ IN CONJUNCTION WITH THE SELECTED
CONSOLIDATED FINANCIAL INFORMATION AND OTHER DATA AND THE COMPANY’S CONSOLIDATED FINANCIAL STATEMENTS
AND THE ACCOMPANYING NOTES CONTAINED ON SEDAR. THE CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY
ARE PREPARED IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRS”) AND ARE PRESENTED
IN CANADIAN DOLLARS. THE FISCAL YEAR OF THE COMPANY ENDS ON APRIL 30 OF EACH YEAR. CERTAIN INFORMATION
CONTAINED HEREIN IS FORWARD-LOOKING AND BASED UPON ASSUMPTIONS AND ANTICIPATED RESULTS THAT ARE SUBJECT
TO RISKS, UNCERTAINTIES AND OTHER FACTORS. SHOULD ONE OR MORE OF THESE UNCERTAINTIES MATERIALIZE OR SHOULD
THE UNDERLYING ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY VARY SIGNIFICANTLY FROM THOSE EXPECTED.
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.
The report is based on information available to management on June 19, 2024.
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Year ended April 30, 2024
OVERVIEW
Evertz is a leading solutions provider to the television broadcast, telecommunications and new-media industries.
Founded in 1966, Evertz is a leading supplier of software, equipment and technology solutions to content creators,
broadcasters, specialty channels and television service providers. Evertz designs, manufactures and markets video
and audio infrastructure solutions for the production, post-production and transmission of television content. 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/Ultra HD”)
and next generation high bandwidth low latency IP network environments and by telecommunications and new-
media companies. The Company’s products allow its customers to generate additional revenue while reducing costs
through efficient signal routing, distribution, monitoring and management of content as well as the automation and
orchestration of more streamlined and agile workflow processes on premise and in the “Cloud”.
The Company made early research and development investments to establish itself as the leading supplier to
the broadcast industry addressing the ongoing technical transition to IP and IT based production, workflow and
distribution systems helping to create more efficient and agile workflows enabling the proliferation of high quality
video emerging Ultra HD, High Dynamic range initiatives. The Company has maintained its track record of rapid
innovation; is a leader in the expanding Internet Protocol Television (“IPTV”) market and a leader in Software Defined
Video Network (“SDVN”) technology. The Company is committed to maintaining its leadership position, and as such,
a significant portion of the Company’s staff is focused on research and development to ensure that the Company’s
products are at the forefront of the industry. This commitment contributes to the Company being consistently
recognized as a leading broadcast and video networking industry innovator by its customers.
SUMMARY OF MATERIAL ACCOUNTING POLICIES
Outlined below are those policies considered particularly significant:
Basis of Measurement
These financial statements have been prepared on the historical cost basis except for certain financial assets and
liabilities which are stated at fair value. Historical cost is generally based on the fair value of the consideration given
in exchange for assets.
Functional and Presentation Currency
These financial statements are presented in Canadian dollars, which is the Company’s parent company functional
currency. Each subsidiary of the Company determines its own functional currency based on the primary economic
environment in which the subsidiary operates. All financial information presented in Canadian dollars has been
rounded to the nearest thousand, except per share amounts.
Basis of Consolidation
These financial statements incorporate the financial statements of the Company and entities controlled by the
Company (its subsidiaries). Control is achieved where the Company has power over an entity, has exposure or rights
to variable returns from its involvement with the entity and has the ability to use its power over the entity to affect the
amount of the investor’s returns.
The results of subsidiaries acquired or disposed of are included in the consolidated statements of earnings and
comprehensive earnings from the effective date of acquisition of control and up to the effective date of disposal
of control, as appropriate. Total comprehensive earnings of subsidiaries is attributed to the owners of the Company
and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
All intra-Company transactions, balances, income and expenses are eliminated in full on consolidation.
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EVERTZ TECHNOLOGIES LIMITED
2024 ANNUAL REPORT
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2024 ANNUAL REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONT’D)
EVERTZ TECHNOLOGIES LIMITED
Business Combinations
Business combinations are accounted for using the acquisition method. The cost of the acquisition is measured at
the aggregate of the fair values, at the date of acquisition, of assets transferred, liabilities incurred or assumed, and
equity instruments issued by the Company. The acquiree’s identifiable assets and liabilities assumed are recognized
at their fair value at the acquisition date. Acquisition-related costs are recognized in earnings as incurred. Any
contingent consideration is measured at fair value on date of the acquisition and is included as part of the
consideration transferred. The fair value of the contingent consideration liability is re-measured at each reporting
date with corresponding gain/loss recognized in earnings. The excess of the consideration over the fair value of the
net identifiable assets and liabilities acquired is recorded as goodwill.
On an acquisition by acquisition basis, any non-controlling interest is measured either at the fair value of the non-
controlling interest or at the fair value of the proportionate share of the net identifiable assets acquired. Where the
non-controlling interest holds a put option that can be settled by a fixed amount of cash, in connection with their
remaining shares, the fair value of the put option is recognized as a financial redemption liability. In such a case, the
non-controlling interest is deemed to have been acquired at the acquisition date and a financial redemption liability is
recorded instead of a non-controlling interest. Options that are not exercisable for at least one year are presented as
non-current liabilities. Subsequent measurement of the redemption liability is recorded using the effective interest
rate method and recognized in the statement of earnings while no earnings are attributed to the non-controlling
interest.
Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the
business less accumulated impairment losses, if any.
Revenue Recognition
Revenue is measured using a five-step recognition model which includes; 1) identifying the contract(s) with the
customer; 2) identifying the separate performance obligations in the contract; 3) determining the transaction price;
4) allocating the transaction price to separate performance obligations; and 5) recognizing revenue when (or as)
each performance obligation is satisfied.
Step 1: Identifying the contract
Before recognizing revenue, the Company reviews customer contracts to ensure each party’s rights and payment
terms are identified, there is commercial substance, and that it is probable that the Company will collect the
consideration in exchange for the goods or services as stated in the contract. The Company may enter into multiple
contracts with the same customer. The Company uses judgement in evaluating whether various contracts are
interrelated, which includes considerations as to whether they were negotiated as a package with a single commercial
objective, whether the amount of consideration on one contract is dependent on the performance of the other
contract, or if some or all goods and services in the contracts are a single performance obligation. New arrangements
with existing customers can be either be treated as a new contract or the modification of prior contracts with the
customer. The Company uses judgment in making this determination, considering whether there is a connection
between the new arrangement and the pre-existing contract, whether the goods and services under the new
arrangement are highly interrelated with the goods and services sold under prior contracts, and how the goods and
services under the new arrangement are priced. In determining whether a transaction price represents a contract
modification or a change in variable consideration, the Company examines whether the change in price results from
changing the contract or from applying unchanged existing contract provisions.
Step 2: Identifying performance obligations
The Company regularly sells hardware and software solutions with related services. Software solutions including both,
right to access and right to use term based and perpetual licenses and stand-alone software solutions services.
Services include training and commissioning, warranty, maintenance and support and other professional services.
A customer contract typically lists items separately with distinct item descriptions, quantities, and prices. If a contract
contains a bundle of items priced together at a single price, the Company analyzes the contract to identify distinct
performance obligations within the bundle. The Company uses judgment in determining whether a good or service,
such as commissioning is considered separate performance obligations or are combined into one distinct
performance obligation.
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2024 ANNUAL REPORT
EVERTZ TECHNOLOGIES LIMITED
Step 3: Determining the transaction price
Transaction prices are typically the prices stated on the purchase orders or contracts, net of discounts. The Company
reviews customer contracts for any variable considerations, existence of significant financing components and
payables to customers, and adjusts transaction prices accordingly. Variable consideration is estimated and included
in the transaction price based on the most likely amount to be received. The Company does not account for significant
financing components if the period between when the Company transfers the promised goods or services to the
customer and when the customer pays for those goods or services is one year or less.
Step 4: Allocating the transaction price to performance obligations
If a customer contract includes multiple performance obligations, the transaction price is allocated to each
performance obligation based on its relative stand-alone selling price. If a stand-alone selling price is not directly
observable, the Company estimates the stand-alone selling price of individual elements, based on prices at which
the deliverable is regularly sold on a stand-alone basis after considering specific discounts where appropriate.
Step 5: Recognizing revenue upon satisfaction of performance obligations
The timing of revenue recognition is based on when a customer obtains control of the asset. Control of an asset refers
to the ability to direct the use of, and obtain substantially all of the remaining benefits from, the asset. Control
includes the ability to prevent other entities from directing the use of, and obtaining the benefits from, an asset. The
Company reviews customer contracts and the nature of the performance obligations to determine if a performance
obligation is satisfied over time or at a point in time, and recognizes revenue accordingly.
Revenue from sales of hardware are recognized upon shipment, provided that the significant risks and rewards of
ownership have been transferred to the customer, the Company retains neither continuing managerial involvement to
the degree usually associated with ownership nor effective control over the goods sold, revenue can be reliably
measured and its probable that the economic benefits will flow to the Company.
Revenue from software solutions are recognized either over a period of time or at a point in time depending on the
contractual terms of the contract identified and the specific performance obligations identified therein. For
performance obligations recognized at a point in time, revenue is recognized following the transfer of control or the
Company has objective evidence that criteria for acceptance has been satisfied. For performance obligations satisfied
over time, the Company measures the progress using the output method, measuring progress toward satisfaction of
the performance obligation.
Revenue from services is recognized as services are performed and warranty and maintenance revenue is recognized
ratably over the period of service.
Certain of the Company’s hardware and software solutions contracts are long-term in nature, and the Company
measures the progress using either an input or output method, depending on which yields the most reliable estimate.
For construction type contracts, where estimated total costs and the outcome of the contract can be assessed
reliably, the Company recognizes revenue over time, based on costs incurred relative to the estimated total contract
costs. When the outcome of the contract cannot be assessed reliably, contract costs incurred are immediately
expensed and revenue is recognized only to the extent that costs are considered likely to be recovered. For software
solutions that require significant customization, where the direct measurement of value to the customer results in the
best estimate and criteria for recognition over time is met, the Company recognizes revenue over time based on value
provided to the customer to date. Revenue recognized in excess of billings are recorded as contract assets, while
billings in excess of revenue recognized is recorded as deferred revenue.
Customer contacts have a variety of different payment terms. Contract assets are recognized when revenue is
recognized in excess of billings or when the Company has a right to consideration and that right is conditional to
something other than the passage of time. Contract assets are subsequently transferred to accounts receivable when
the right to payment becomes unconditional. This usually occurs when the Company issues an invoice to the
customer. Contract assets are adjusted for expected credit losses.
Deferred revenue relates to advance consideration received from customers in excess of revenue recognized under
the contract. During the year, the Company recognized $49,936 in revenue that was recognized as deferred revenue
at the beginning of the year (2023 – $55,020).
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2024 ANNUAL REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONT’D)
EVERTZ TECHNOLOGIES LIMITED
Finance Income
Interest income is recognized when it is probable that the economic benefits will flow to the Company and the amount
of revenue can be measured reliably. Interest revenue is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future
cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and in the bank, net of outstanding bank overdrafts.
Inventories
Inventories consist of raw materials and supplies, work in progress and finished goods. Inventories are stated at the
lower of cost and net realizable value. Cost is determined on a weighted average basis and includes raw materials,
the cost of direct labour applied to the product and the overhead expense.
Net realizable value represents the estimated selling price for inventories less all estimated costs of completion and
costs necessary to make the sale.
Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any recognized impairment loss.
Where the costs of certain components of an item of property, plant and equipment are significant in relation to the
total cost of the item, they are accounted for and depreciated separately. Depreciation expense is calculated based
on depreciable amounts which is the cost of an asset less residual value and is recognized in earnings on a straight-
line basis over the estimated useful life of the related asset. Borrowing costs are capitalized to the cost of qualifying
assets that take a substantial period of time to be ready for their intended use.
The estimated useful lives are as follows:
Asset
Basis
Rate
Office furniture and equipment
Straight-line
10 years
Research and development equipment
Straight-line
5 years
Machinery and equipment
Straight-line
5 - 15 years
Leaseholds
Straight-line
5 years
Building
Straight-line
10 - 40 years
Airplanes
Straight-line
10 - 20 years
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales
proceeds and the carrying amount of the asset and is recognized in earnings.
The Company reviews the residual value, estimated useful life and the depreciation method at least annually.
Impairment of Non-Financial Assets
Goodwill is tested for impairment annually, or whenever events or changes in circumstances indicate that the carrying
amount may be more than its recoverable amount. At each reporting period, the Company reviews the carrying
amounts of its other non-financial assets to determine whether there is any indication that those assets have suffered
an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to
determine the extent of the impairment loss (if any). Where the asset does not generate cash inflows that are largely
independent from other assets, the Company estimates the recoverable amount of the cash-generating unit (“CGU”)
to which the asset belongs. Goodwill is allocated to a group of CGU’s based on the level at which it is monitored for
internal reporting purposes.
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2024 ANNUAL REPORT
EVERTZ TECHNOLOGIES LIMITED
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use,
the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset for which the estimates of
future cash flows have not been adjusted.
If the recoverable amount of an asset or CGU is estimated to be less than its carrying amount, the carrying amount of
the asset or CGU is reduced to its recoverable amount. An impairment loss relating to a CGU to which goodwill has
been allocated, is allocated to the carrying amount of the goodwill first. An impairment loss is recognized immediately
in earnings.
An impairment loss in respect of goodwill is not reversed. Where an impairment loss subsequently reverses for other
non-financial assets, the carrying amount of the asset or CGU is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognized for the asset or CGU in prior years. A reversal of an impairment
loss is recognized immediately in earnings.
Intangible Assets
Intangible Assets
Intangible assets represent intellectual property acquired through business acquisitions and are recorded at cost less
any impairment loss and are amortized using the straight–line method over a five–year period. The estimated useful
life and amortization method are reviewed at the end of each reporting period.
Research and Development
All research and development expenditures are expensed as incurred unless a development project meets the criteria
for capitalization. Development expenditures are capitalized only if development costs can be measured reliably, the
product or process is technically and commercially feasible, future economic benefits are probable and the Company
intends to and has sufficient resources to complete development and to use or sell the asset. No internally generated
intangible assets have been recognized to date.
Research and development expenditures are recorded gross of investment tax credits and related government
grants. Investment tax credits for scientific research and experimental development are recognized in the period
the qualifying expenditures are incurred if there is reasonable assurance that they will be realized.
Investment in an Associate
Investments in an Associate are entities in which the Company has significant influence over, but not have control or
joint control over the financial and operating policies. Investments in an Associate are accounted for using the equity
method. Under the equity method, the initial investment is recognized at cost, which includes transaction costs.
Subsequent to initial recognition, the carrying amount is increased or decreased in recognition of the Company’s
share of the profit or loss after the date of acquisition, until the date on which significant influence ceases.
At the end of each reporting period, the Company also reviews the carrying amounts of Investments in an Associate to
determine whether there is any indication that those assets have suffered an impairment loss. If any such indication
exists, the carrying amount of such investment is compared to its recoverable amount, being the higher of its fair
value less costs of disposal and value-in-use. If the recoverable amount of an investment is less than its carrying
amount, the carrying amount is reduced to its recoverable amount and an impairment loss, being the excess of
carrying amount over the recoverable amount, is recognized immediately. When an impairment loss reverses in a
subsequent period, the carrying amount of the investment is increased to the revised estimate of recoverable
amount, but so that the increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognized.
Provisions
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past
event, it is probable that the Company will be required to settle that obligation and a reliable estimate can be made
of the amount of the obligation.
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MANAGEMENT’S DISCUSSION AND ANALYSIS (CONT’D)
EVERTZ TECHNOLOGIES LIMITED
The amount recognized as a provision is the best estimate of the consideration required to settle the present
obligation at the reporting period, taking into account the risks and uncertainties surrounding the obligation.
Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying
amount is the present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third
party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the
amount of the receivable can be measured reliably.
Leasing
At inception of a contract, the Company assesses whether that contract is, or contains, a lease. A contract is,
or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time
in exchange for consideration.
The Company records a right-of-use asset and a lease liability at the lease commencement date. The right-of-use
asset is initially measured at cost, consisting of the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct costs incurred and an estimate
of costs to dismantle and remove the underlying asset or restore the site on which it is located; less any lease
incentives received.
The right-of-use asset is depreciated on a straight-line basis over the lease term. The lease term consists of the
non-cancellable period of the lease; periods covered by options to extend the lease, where the Company is reasonably
certain to exercise the option; and periods covered by options to terminate the lease, where the Company is
reasonably certain not to exercise the option. The right-of-use asset is adjusted for remeasurement of lease liabilities
resulting from a change in future lease payments arising from a change in rate or a change in the assessment
of whether an extension or termination options will be exercised.
The lease liability is initially measured at the present value of lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the
Company’s incremental borrowing rate. The Company generally use their incremental borrowing rate as the interest
rate implicit in our leases cannot be readily determined. The lease liability is subsequently measured at amortized
cost using the effective interest rate method. After the commencement date, the lease liability is remeasured if there
is a modification, including a change in the lease term. Certain leases require us to make payments that relate to
property taxes, insurance, and other non-rental costs. These non-rental costs are typically variable and are not
included in the calculation of the right-of-use asset or lease liability.
Foreign Currency Translation
The individual financial statements of each subsidiary entity are presented in the currency of the primary economic
environment in which the entity operates (its functional currency). For the purpose of the consolidated financial
statements, the results and financial position of each group entity are presented in Canadian dollars (“CDN”), which
is the functional currency of the parent Company and the presentation currency for the financial statements.
In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s
functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the
transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated
at the rates prevailing at that date. Exchange differences are recognized in earnings in the period in which they arise.
Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Company’s foreign
operations are expressed in Canadian dollars using exchange rates prevailing at the end of the reporting period.
Income and expense items are translated at the average exchange rates for the period. Foreign currency gains and
losses are recognized in other comprehensive earnings. The relevant amount in cumulative foreign currency
translation adjustment is reclassified into earnings upon disposition or partial disposition of a foreign operation
and attributed to non-controlling interests as appropriate.
11
2024 ANNUAL REPORT
EVERTZ TECHNOLOGIES LIMITED
Income Taxes
Current Tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net earnings as reported
in the statement of earnings because it excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The Company’s liability for current tax is
calculated using tax rates that have been enacted or substantively enacted by the statement of financial position
date.
Deferred Tax
Deferred tax is the tax expected to be payable or recoverable on unused tax losses and credits, as well as differences
between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases
used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary
differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be
available against which unused tax losses, credits and other deductible temporary differences can be utilized.
Such assets and liabilities are not recognized if the temporary difference arises from the initial recognition of goodwill
or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction
that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting period and reduced to the extent that
it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the
asset is realized. The measurement of deferred tax liabilities and assets reflects the tax consequences that would
follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the
carrying amount of its assets and liabilities. Deferred tax is charged or credited to earnings, except when it relates
to items charged or credited directly to other comprehensive earnings or equity, in which case the deferred tax is also
dealt with in other comprehensive earnings or equity.
Share Based Compensation
Equity settled share based payments to employees and others providing similar services are measured at the fair
value of the equity instruments at the grant date. Details regarding the determination of the fair value of equity
settled share based transactions are set out in note 19.
The fair value determined at the grant date of the equity settled share based payments is expensed on a straight-line
basis over the vesting period of the option based on the Company’s estimate of the number of equity instruments that
will eventually vest. At each reporting period, the Company revises its estimate of the number of equity instruments
expected to vest. The impact of the revision of the original estimates, if any, is recognized in earnings such that the
cumulative expense reflects the revised estimate, with a corresponding adjustment to share based payment reserve.
Cash settled share based compensation to employees, including restricted share units, or others providing similar
services are measured at the fair value of the instruments at the grant date. The fair value is recognized as an
expense with a corresponding increase in liabilities over the vesting period of the option grant. At each reporting
period, the Company revises its estimate of fair value and the number of instruments expected to vest. The impact
of the revision of the original estimates, if any, is recognized in earnings such that the cumulative expense reflects
the revised estimate, with a corresponding adjustment to liabilities.
Earnings Per Share
The Company presents basic and diluted earnings per share (“EPS”) data for its common shares. Basic EPS is
calculated by dividing the net earnings attributable to shareholders by the weighted average number of common
shares outstanding during the period. Diluted EPS is determined by adjusting the net earnings attributable to
shareholders and the weighted average number of common shares outstanding for the effects of all potentially
dilutive common shares, which is comprised of share options granted to employees with an exercise price below
the average market price.
12
2024 ANNUAL REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONT’D)
EVERTZ TECHNOLOGIES LIMITED
Finance Costs
Finance costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets
that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of
those assets, until such time as the assets are substantially ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other finance costs are recognized in earnings in the period in which they are incurred.
Investment Tax Credits
The Company is entitled to investment tax credits, which are earned as a percentage of eligible research and
development expenditures incurred in each taxation year. Investment tax credits relate entirely to the Company’s
research and development expenses in the consolidated statements of earnings but are presented separately in the
consolidated statements of earnings for information purposes. Investment tax credits are recognized and recorded
within income tax receivable or as a reduction of income tax payable, when there is reasonable assurance they will
be received.
Financial Instruments
The Company’s financial assets and liabilities which are initially recorded at fair value and subsequently measured
based on their assigned classifications as follows:
Assets/Liabilities
Classification
Cash and cash equivalents
Amortized cost
Trade and other receivables
Amortized cost
Investments in public companies
Fair value through other comprehensive income
Investments in private companies
Fair value through profit and loss
Bank indebtedness
Amortized cost
Trade and other payables, excluding RSUs
Amortized cost
Cash based RSU liability
Fair value through profit and loss
Redemption liability
Amortized cost
Financial Assets
All financial assets are initially measured at fair value, plus transaction costs. Transaction costs in respect of financial
instruments that are classified as fair value through profit or loss are recognized in earnings immediately. Transaction
costs in respect of other financial instruments are included in the initial measurement of the financial instrument
Financial assets are classified into the following specific categories: financial assets “at fair value through profit or
loss” (“FVTPL”), “fair value through other comprehensive income (“FVTOCI”)” and “amortized cost”. The classification
depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
Financial assets at FVTPL are stated at fair value, with any gains or losses arising on re-measurement recognized in
earnings. Financial assets at FVTOCI are stated at fair value, with any gains or losses arising on re-measurement
recognized in other comprehensive earnings. Where financial assets at FVTOCI are derecognized, the gains or losses
previously recognized in other comprehensive earnings is reclassified from other comprehensive earnings to earnings.
13
2024 ANNUAL REPORT
EVERTZ TECHNOLOGIES LIMITED
Impairment of Financial Assets
Financial assets, other than those at FVTPL and FVTOCI, are assessed for indicators of impairment at the time of
initial recognition and at each reporting period. The Company measures a loss allowance based on the lifetime
expected credit losses. Lifetime expected credit losses are estimated based on factors such as the Company’s past
experience of collecting payments, observable changes in national or local economic conditions that correlated with
default on receivables, financial difficulties of the borrower, and it becoming probable that the borrow will either enter
bankruptcy or financial reorganization. Financial assets are written off when there is no reasonable expectation of
recovery.
For financial assets carried at amortized cost, the amount of the impairment is the difference between the asset’s
carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original
effective interest rate.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the
exception of trade receivables, where the carrying amount is reduced through the use of an allowance account.
A trade receivable is considered impaired if it is probable that a customer will not pay all amounts due. When a trade
receivable is considered impaired, it is recorded in the allowance account. Subsequent recoveries of amounts are
credited against the allowance account. Changes in the carrying amount of the allowance account are recognized in
earnings. When there is no reasonable expectation of recovery, the trade receivable balance is written off against the
allowance account.
Financial Liabilities and Equity Instruments Issued by the Company
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on re-measurement recognized
in earnings. The net gain or loss recognized in earnings incorporates any interest paid on the financial liability and
is included in the “other income and expenses” line item in the consolidated statements of earnings.
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all
of its liabilities. Equity instruments issued by the Company are recognized at the proceeds received, net of direct
issue costs.
Other financial liabilities, including long term debt and redemption liabilities, are initially measured at fair value,
net of transaction costs. Other financial liabilities are subsequently measured at amortized cost using the effective
interest method, with interest expense recognized on an effective yield basis.
Critical Accounting Estimates and Judgments
The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year.
Consequently, actual results could differ from those estimates. Those estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate
is revised and in any future periods affected.
Significant estimates include the determination of expected credit losses which are based on the amount and timing
of cash flows expected to be received, allocation of the transaction price on customer contracts with multiple
deliverables which are based on standalone selling prices, of the applicable deliverable or using estimation
techniques where no standalone selling prices are available, provision for inventory obsolescence which is recorded
to adjust to the net realizable value of inventory and based on current market prices and past experiences, the useful
life of property, plant and equipment and intangibles for depreciation which are based on past experiences, expected
use and industry trends, amortization and valuation of net recoverable amount of property, plant and equipment and
intangibles, determination of fair value for share based compensation, evaluating deferred income tax assets and
liabilities, the determination of fair value of financial instruments and the likelihood of recoverability, and the
determination of implied fair value of goodwill and implied fair value of assets and liabilities for purchase price
allocation purposes and goodwill impairment assessment purposes.
14
2024 ANNUAL REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONT’D)
EVERTZ TECHNOLOGIES LIMITED
Significant items requiring the use of judgment in application of accounting policies and assumptions include the
determination of functional currencies, classification of financial instruments, classification of leases, determination
of the number of revenue performance obligations, the allocation of transaction prices on customer contracts,
determination if revenues should be recognized at a point in time or over time, application of the percentage of
completion method on long-term contracts, degree of componentization applied when calculating amortization
of property, plant and equipment, and identification of cash generating units for impairment testing purposes.
Operating Segments
An operating segment is a component of the Company that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company’s
other components. The Company reviewed its operations and determined that it operates a single reportable
segment, the television broadcast equipment market. The single reportable operating segment derives its revenue
from the sale of hardware and software solutions, related services, training and commissioning and long-term
contracts.
Changes in Accounting Policies
Presentation of Financial Statements
Effective May 1, 2023, the Company adopted amendments to IAS 1, Presentation of Financial Statements,
which requires the disclosure of material accounting policy information, instead of significant accounting policies.
The adoption of the amendments did not have a material impact on the Consolidated Financial Statements.
New and Revised IFRSs Issued but Not Yet Effective
Following is a listing of amendments, revisions and new International Financial Reporting Standards issued but not
yet effective. Unless otherwise indicated, earlier application is permitted.
Presentation of Non-Current Liabilities with Covenants
Amendments to IAS 1, Presentation of Financial Statements was issued by the IASB in January 2020, and clarifies
the classification, presentation and disclosure requirements in the standard for non-current liabilities with covenants.
The amendments are effective for reporting periods beginning on or after January 1, 2024. The Company does not
expect that the adoption of this standard listed above will have a material impact on the consolidated financial
statements of the Company.
Lease Liability in Sale and Leaseback Transactions
Amendments to IFRS 16, Leases was issued by the IASB in September 2022, and clarifies the subsequent
measurement requirements for sale and leaseback transactions for sellers-leasees. The amendments are effective
for reporting periods beginning on or after January 1, 2024. The Company does not expect that the adoption of the
standard listed above will have a material impact on the consolidated financial statements of the Company.
Presentation and Disclosure in Financial Statements
IFRS 18, Presentation and Disclosure in Financial Statements issues was issued by the IASB in April 2024, and
replaces IAS 1, Presentation of Financial Statements. The standard is effective for reporting periods beginning
on or after January 1, 2027. The Company has not yet determined the impact of the standard.
YEAR END HIGHLIGHTS
Revenue was $514.6 million for the year ended April 30, 2024, an increase of $60.0 million, compared to
$454.6 million for the year ended April 30, 2023.
For the year ended April 30, 2024, net earnings were $71.0 million, an increase of $6.4 million from $64.6 million
for the year ended April 30, 2023, and fully diluted earnings per share were $0.92, an increase from $0.84 for the
year ended April 30, 2023.
Gross margin during the year ended April 30, 2024, was 58.8% as compared to 59.0% for the year ended
April 30, 2023.
15
2024 ANNUAL REPORT
EVERTZ TECHNOLOGIES LIMITED
Foreign exchange gain during the year was $0.2 million, predominantly driven by the increase in value of the
US dollar against the Canadian dollar since April 30, 2023.
Selling and administrative expenses for the year ended April 30, 2024, was $72.3 million as compared to the year
ended April 30, 2023, of $61.5 million. As a percentage of revenue, selling and administrative expenses totaled
14.0% for the year ended April 30, 2024 as opposed to 13.5% for the year ended April 30, 2023.
Research and development (“R&D”) expenses were $134.8 million for the year ended April 30, 2024, as compared
to $117.1 million for the year ended April 30, 2023.
Cash and cash equivalents were $86.3 million and working capital was $201.7 million as at April 30, 2024,
compared to cash and cash equivalents of $12.5 million, bank indebtedness of $5.9 million and working capital
of $171.4 million as at April 30, 2023.
HIGHLIGHTS FROM THE FOURTH QUARTER
Revenue was $122.8 million for the fourth quarter ended April 30, 2024; a decrease of $6.1 million,
compared to $128.9 million for the same period ended April 30, 2023.
For the fourth quarter ended April 30, 2024, net earnings were $13.9 million, a decrease from $18.6 million for the
fourth quarter ended April 30, 2023. Fully diluted earnings per share were $0.18 a decrease from $0.24 in the fourth
quarter ended April 30, 2023.
For the fourth quarter ended April 30, 2024, foreign exchange gain during the quarter was $2.1 million, compared to
a foreign exchange gain of $0.3 million for the fourth quarter April 30, 2023.
Gross margin during the fourth quarter ended April 30, 2024, was 59.2% compared to 59.5% in the fourth quarter
ended April 30, 2023.
Selling and administrative expenses for the fourth quarter ended April 30, 2024, was $20.1 million as compared to
the fourth quarter ended April 30, 2023, of $17.5 million. As a percentage of revenue, selling and administrative
expenses totaled 16.4% for the fourth quarter ended April 30, 2024, compared to 13.6% in the fourth quarter ended
April 30, 2023.
Research and development expenses were $36.7 million for the fourth quarter ended April 30, 2024, as compared
to $29.9 million for the fourth quarter ended April 30, 2023.
16
2024 ANNUAL REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONT’D)
EVERTZ TECHNOLOGIES LIMITED
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(In thousands of dollars except earnings per share and share data)
Year Ended April 30,
2024
2023
2022
Revenue
$
514,616
$
454,578
$
441,016
Cost of goods sold
212,173
186,320
185,701
Gross margin
302,443
268,258
255,315
Expenses
Selling and administrative
72,274
61,518
60,884
General
4,672
4,704
4,563
Research and development
134,843
117,127
102,438
Investment tax credits
(14,708)
(13,415)
(12,336)
Share based compensation
5,120
4,662
5,028
Foreign exchange gain
(154)
(1,966)
(6,465)
Total Operating Expenses
202,047
172,630
154,112
Earnings before undernoted
100,396
95,628
101,203
Finance income
1,661
376
309
Finance costs
(1,353)
(3,718)
(2,445)
Net loss from investments through profit and loss
(2,704)
(5,364)
(1,493)
Other income and expenses
(642)
888
338
Earnings before income taxes
97,358
87,810
97,912
Provision for (recovery of) income taxes
Current
26,044
25,066
26,959
Deferred
287
(1,811)
(1,724)
26,331
23,255
25,235
Net earnings for the year
$
71,027
$
64,555
$
72,677
Net earnings attributable to non-controlling interest
$
857
$
523
$
932
Net earnings attributable to shareholders
70,170
64,032
71,745
Net earnings for the year
$
71,027
$
64,555
$
72,677
Earnings per share
Basic
$
0.92
$
0.84
$
0.94
Diluted
$
0.91
$
0.84
$
0.94
17
2024 ANNUAL REPORT
EVERTZ TECHNOLOGIES LIMITED
CONSOLIDATED BALANCE SHEET DATA
As at April 30,
2024
2023
2022
Cash and cash equivalents
$
86,325
$
12,468
$
33,902
Inventory
$
206,154
$
202,479
$
177,268
Working capital
$
201,437
$
171,428
$
158,947
Total assets
$
484,722
$
436,652
$
420,979
Shareholders' equity
$
263,267
$
243,099
$
230,938
Number of common shares outstanding:
Basic
76,164,322
76,145,758
76,229,696
Fully-diluted
81,614,447
82,446,008
81,285,196
Weighted average number of shares outstanding:
Basic
76,088,691
76,200,248
76,266,341
Fully-diluted
77,044,858
76,232,462
76,570,564
SELECTED CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)
18
2024 ANNUAL REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONT’D)
EVERTZ TECHNOLOGIES LIMITED
CONSOLIDATED STATEMENT OF OPERATIONS DATA
2024
2023
2022
Revenue
100.0%
100.0%
100.0%
Cost of goods sold
41.2%
41.0%
42.1%
Gross margin
58.8%
59.0%
57.9%
Expenses
Selling and administrative
14.0%
13.5%
13.8%
General
0.9%
1.0%
1.0%
Research and development
26.2%
25.8%
23.2%
Investment tax credits
(2.9%)
(3.0%)
(2.8%)
Share based compensation
1.0%
1.0%
1.2%
Foreign exchange (gain) loss
0.0%
(0.4%)
(1.5%)
Total Operating Expenses
39.2%
38.0%
34.9%
Earnings before undernoted
19.6%
21.0%
23.0%
Finance income
0.3%
0.0%
0.1%
Finance costs
(0.3%)
(0.7%)
(0.6%)
Net loss on investments through profit and loss
(0.5%)
(1.2%)
(0.4%)
Other income and expenses
(0.1%)
0.2%
0.1%
Earnings before income taxes
19.0%
19.3%
22.2%
Provision for (recovery of) income taxes
Current
5.1%
5.5%
6.1%
Deferred
0.1%
(0.4%)
(0.4%)
5.2%
5.1%
5.7%
Net earnings for the year
13.8%
14.2%
17.2%
Net earnings attributable to non-controlling interest
0.2%
0.1%
0.2%
Net earnings attributable to shareholders
13.6%
14.1%
17.0%
Net earnings for the year
13.8%
14.2%
17.2%
Earnings per share:
Basic
$
0.92
$
0.84
$
0.94
Diluted
$
0.91
$
0.84
$
0.94
19
2024 ANNUAL REPORT
EVERTZ TECHNOLOGIES LIMITED
REVENUE AND EXPENSES
Revenue
The Company generates revenue principally from the sale of software, equipment, and technology solutions to
content creators, broadcasters, specialty channels, television service providers, government and corporate.
The Company markets and sells its products and services through both direct and indirect sales strategies. The
Company’s direct sales efforts focus on large and complex end-user customers. These customers have long sales
cycles typically ranging from four to eight months before an order may be received by the Company for fulfillment.
The Company monitors revenue performance in two main geographic regions: (i) United States/Canada and (ii)
International.
The Company currently generates approximately 70% to 80% of its revenue in the United States/Canada.
The Company recognizes the opportunity to more aggressively target markets in other geographic regions
and intends to invest in personnel and infrastructure in those markets.
While a significant portion of the Company’s expenses are denominated in Canadian dollars, the Company collects
a significant amount of its revenues in currencies other than the Canadian dollar and therefore has significant
exposure to fluctuations in foreign currencies, in particular the US dollar. Approximately 80% to 85% of the
Company’s revenues are denominated in US dollars.
REVENUE
Year Ended April 30,
(In thousands of Canadian dollars)
2024
2023
2022
United States/Canada
$
338,031
$
337,109
$
299,359
International
176,585
117,469
141,657
$
514,616
$
454,578
$
441,016
Total revenue for the year ended April 30, 2024, was $514.6 million, (including $325.7 million in hardware and
$188.9 million in reoccurring software, services and other software) an increase of $60.0 million as compared to
revenue of $454.6 million (including $281.2 million in hardware and $173.4 million in reoccurring software, services
and other software) for the year ended April 30, 2023. The increase in revenue is due to continued adoption of Evertz
solutions, including Evertz cloud native solutions.
Revenue in the United States/Canada region was $338.0 million for the year ended April 30, 2024, an increase
of $0.9 million when compared to revenue of $337.1 million for the year ended April 30, 2023.
Revenue in the International region was $176.6 million for the year ended April 30, 2024, an increase of
$59.1 million or 50.0% as compared to revenue of $117.5 million for the year ended April 30, 2023.
COST OF SALES
Cost of sales consists primarily of costs of manufacturing and assembly of products. A substantial portion of these
costs is represented by components and compensation costs for the manufacture and assembly of products.
Cost of sales also includes related overhead, certain depreciation, final assembly, quality assurance, inventory
management, support costs as well as inventory obsolescence and write-offs. Cost of sales also includes the
costs of providing services to clients, primarily the cost of service-related personnel.
20
2024 ANNUAL REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONT’D)
EVERTZ TECHNOLOGIES LIMITED
GROSS MARGIN
Year Ended April 30,
(In thousands of Canadian dollars, except for percentages)
2024
2023
2022
Gross margin
$
302,443
$
268,258
$
255,315
Gross margin % of sales
58.8%
59.0%
57.9%
Gross margin for the year ended April 30, 2024, was $302.4 million, compared to $268.3 million for the year
ended April 30, 2023. As a percentage of revenue, the gross margin was 58.8% for the year ended April 30, 2024,
compared to 59.0% for the year ended April 30, 2023.
Gross margins vary depending on the product mix, manufacturing volumes, geographic distribution, competitive
pricing pressures and currency fluctuations. Since fiscal 2022, a global supply chain disruption, including a global
semi-conductor chip shortage has caused the Company to experience continued unstable procurement capabilities
leading to increased lead times and increased component costs. The Company has taken proactive steps to minimize
the impact, resulting in $26.7 million increase in raw materials since April 30, 2022, and $49.6 million since
April 30, 2021. The sales environment continues to also be very competitive with substantial discounting in certain
segments by our competition.
The Company expects that it will continue to experience competitive pricing pressures and increased lead time
of components. The Company continually seeks to build its products more efficiently and enhance the value of its
product and service offerings in order to reduce the risk of declining gross margin associated with the competitive
environment.
Operating Expenses
The Company’s operating expenses consist of: (i) selling, administrative and general; (ii) research and development
and (iii) foreign exchange.
Selling expenses primarily relate to remuneration of sales and technical personnel. Other significant cost components
include trade show costs, advertising and promotional activities, demonstration material and sales support. Selling
and administrative expenses relate primarily to remuneration costs of related personnel, legal and professional fees,
occupancy and other corporate and overhead costs. The Company also records certain depreciation and amortization
charges as general expenses. For the most part, selling, and administrative expenses are fixed in nature and do not
fluctuate directly with revenue. The Company has certain selling expenses that tend to fluctuate in regards to the
timing of trade shows.
The Company invests in research and development to maintain its position in the markets it currently serves and
to enhance its product portfolio with new functionality and efficiencies. Although the Company’s research and
development expenditures do not fluctuate directly with revenues, it monitors this spending in relation to revenues
and adjusts expenditures when appropriate. Research and development expenditures consist primarily of personnel
costs and material costs. Research and development expenses are presented on a gross basis (without deduction
of research and development tax credits). Research and development tax credits associated with research and
development expenditures are shown separately under research and development tax credits.
21
2024 ANNUAL REPORT
EVERTZ TECHNOLOGIES LIMITED
SELLING AND ADMINISTRATIVE
Year Ended April 30,
(In thousands of Canadian dollars, except for percentages)
2024
2023
2022
Selling and administrative
$
72,274
$
61,518
$
60,884
Selling and administrative % of sales
14.0%
13.5%
13.8%
Selling and administrative expenses excludes stock-based compensation, depreciation and amortization of
intangibles. Selling and administrative expenses for the year ended April 30, 2024, were $72.3 million or 14.0%
of revenue an increase of $10.8 million, as compared to selling and administrative expenses of $61.5 million or
13.5% of revenue for the year ended April 30, 2023. The increase of $10.8 million includes $3.7 million in salary
costs, $2.1 million in increased selling costs and a $1.4 million increase from increased translation costs of Euro
and UK Sterling denominated expenses. The prior year included a recovery that did not reoccur in the current year
of $3.9 million netted against associated fees.
Share Based Compensation
In March 2016, the Company adopted a restricted share unit (RSU) plan to attract, motivate and compensate persons
who are integral to the growth and success of the Company. During the year ended April 30, 2024, share based
compensation expense associated with the plan was $0.3 million, compared to $0.9 million for the year ended
April 30, 2023. In June 2022, the Company adopted an equity based restricted share unit plan, which was approved
by shareholders on October 6, 2022. During the year ended April 30, 2024, share based compensation expense
associated with the 2022 plan was $4.2 million, compared to $2.5 million for the year ending April 30, 2023.
RESEARCH AND DEVELOPMENT (R&D)
Year Ended April 30,
(In thousands of Canadian dollars, except for percentages)
2024
2023
2022
Research and development expenses
$
134,843
$
117,127
$
102,438
Research and development % of sales
26.2%
25.8%
23.2%
Research and development expenses excluded stock based compensation but includes depreciation. For the year
ended April 30, 2024, gross R&D expenses were $134.8 million, an increase of $17.7 million as compared to an
expense of $117.1 million for the year ended April 30, 2023. The increase of $17.7 million includes a $14.9 million
increase net salary costs, a $3.1 million increase in corresponding materials and supplies and $2.0 million increase
in outside services.
Investment Tax Credits
For the year ended April 30, 2024, investment tax credits were $14.7 million compared to $13.4 million for the year
ended April 30, 2023.
Foreign Exchange
For the year ended April 30, 2024, the foreign exchange gain was $0.2 million, as compared to a foreign exchange
gain for the year ended April 30, 2023, of $2.0 million.
EVERTZ TECHNOLOGIES LIMITED
22
2024 ANNUAL REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONT’D)
LIQUIDITY AND CAPITAL RESOURCES
Liquidity and Capital Resources
(In thousands of dollars except ratios)
Year Ended April 30,
Key Balance Sheet Amounts and Ratios:
2024
2023
Cash and cash equivalents
$
86,325
$
12,468
Working capital
$
201,437
$
171,428
Long-term assets
$
77,266
$
86,744
Days sales outstanding in accounts receivable
60
86
Statement of Cash Flow Summary
Year Ended April 30,
2024
2023
Operating activities
$
144,667
$
53,814
Investing activities
$
(2,262)
$
(17,119)
Financing activities
$
(70,211)
$
(58,023)
Net increase (decrease) in cash
$
73,857
$
(21,434)
Operating Activities
For the year ended April 30, 2024, the Company generated cash from operations of $144.7 million, compared to
$53.8 million for the year ended April 30, 2023. Excluding the effects of the changes in non-cash working capital
and current taxes, the Company generated cash from operations of $95.4 million for the year ended April 30, 2024,
compared to $91.5 million for the year ended April 30, 2023.
Investing Activities
The Company used cash for investing activities of $2.3 million for the year ended April 30, 2024, which was
principally driven from the acquisition of capital assets for $9.6 million, partially offset by the disposal
of investments of $7.2 million.
Financing Activities
For the year ended April 30, 2024, the Company used cash from financing activities of $70.2 million, which was
principally driven by dividends paid of $58.6 million, $4.3 million in principle payments on capitalized leases,
capital stock repurchased for $2.3 million, repayment of credit facilities of $6.0 million, partially offset by the
issuance of Capital Stock pursuance to the Company’s stock option plan for $2.5 million.
WORKING CAPITAL
As at April 30, 2024, the Company had cash and cash equivalents of $86.3 million and no bank indebtedness,
compared to $12.5 million in cash and cash equivalents and bank indebtedness of $5.9 million as at April 30, 2023.
The Company had working capital of $201.4 million as at April 30, 2024, compared to $171.4 million
as at April 30, 2023.
The Company believes that the current balance in cash plus future cash flow from operations will be sufficient
to finance growth and related investment and financing activities in the foreseeable future.
Day sales outstanding in accounts receivable were 60 days at April 30, 2024, as compared to 86 for April 30, 2023.
EVERTZ TECHNOLOGIES LIMITED
23
2024 ANNUAL REPORT
SHARE CAPITAL STRUCTURE
Authorized capital stock consists of an unlimited number of common and preferred shares.
Year Ended April 30,
2024
2023
Common shares
76,164,322
76,145,758
Stock options granted and outstanding
3,955,625
4,788,500
Restricted stock options granted and outstanding
1,494,500
1,511,750
FINANCIAL INSTRUMENTS
The Company’s financial instruments consist of cash and cash equivalents, bank indebtedness, trade and other
receivables, trade and other payables and long- term debt. Unless otherwise noted, it is management’s opinion that
the Company is not exposed to significant interest or credit risks arising from these financial instruments. The Company
estimates the fair value of these instruments approximates the carrying values as listed below.
Fair Values and Classification of Financial Instruments:
The following summarizes the significant methods and assumptions used in estimating the fair values of financial
instruments:
I. Quoted prices (unadjusted) in active markets for identical assets or liabilities.
II. Inputs other than quoted prices included in level I that are observable for the asset or liability, either directly
or indirectly. Cash and cash equivalents, trade and other receivables, trade and other payables and long-term
debt fair value measurements have been measured within level II.
III. Inputs for the asset or liability that are not based on observable market data.
CONTRACTUAL OBLIGATIONS
The following table sets forth the Company’s contractual obligations as at April 30, 2024.
Payments Due by Period
(In thousands)
Total
Less than
1 Year
2-3 Years
4-5 Years
Thereafter
Redemption liabilities
$
3,811
$
3,811
$
-
$
-
$
-
Lease commitments
23,668
2,814
10,432
7,527
2,895
$
27,479
$
6,625
$
10,432
$
7,527
$
2,895
OFF-BALANCE SHEET FINANCING
The Company does not have any off-balance sheet arrangements.
RELATED PARTY TRANSACTIONS
In the normal course of business, we may enter into transactions with related parties. These transactions occur under
market terms consistent with the terms of transactions with unrelated arms-length second parties. The Company
continues to lease a premise from a company in which two shareholders’ each indirectly hold a 16% interest, continues
to lease a facility from a company in which two shareholders each indirectly hold a 20% interest, continues to lease
three facilities for manufacturing where two shareholders indirectly own 100% interest, continues to lease a facility
from a company in which two shareholders each indirectly own a 35% interest, and continues to lease a facility where
two shareholders each indirectly own 46.6%.
24
2024 ANNUAL REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONT’D)
EVERTZ TECHNOLOGIES LIMITED
SELECTED CONSOLIDATED QUARTERLY FINANCIAL INFORMATION
The following table sets out selected consolidated financial information for each of the eight quarters ended
April 30, 2024. In the opinion of management, this information has been prepared on the same basis as the audited
consolidated financial statements. The operating results for any quarter should not be relied upon as any indication
of results for any future period.
Quarter Ending
(In thousands)
2024
2023
2022
Apr 30
Jan 31
Oct 31
July 31
Apr 30
Jan 31
Oct 31
July 31
Revenue
$ 122,770 $ 135,278
$ 130,749 $ 125,819 $ 128,919 $ 110,873
$ 113,248 $ 101,538
Cost of
goods sold
50,115
55,545
52,730
53,783
52,273
45,262
45,771
43,014
Gross margin
$
72,655 $
79,733
$
78,019 $
72,036 $
76,647 $
65,611
$
67,477 $
58,524
Operating
expenses
53,114
53,335
45,869
49,729
46,179
48,146
39,085
39,220
Earnings from
operations
$
19,541 $
26,398
$
32,150 $
22,307 $
30,468 $
17,465
$
28,392 $
19,304
Other income
and expenses
28
(436)
(2,204)
(426)
4,547
(1,243)
(1,644)
(385)
Earnings
before taxes
$
19,569 $
25,962
$
29,946 $
21,881 $
25,921 $
16,222
$
26,748 $
18,919
Net earnings
13,764
18,722
22,093
15,593
18,423
11,951
19,817
13,841
Net earnings
per share:
Basic
$
0.18 $
0.25
$
0.29 $
0.20 $
0.24 $
0.16
$
0.26 $
0.18
Diluted
$
0.18 $
0.24
$
0.29 $
0.20 $
0.24 $
0.19
$
0.26 $
0.18
Dividends
per share
$
0.195 $
0.195
$
0.19 $
0.19 $
0.19 $
0.19
$
0.18 $
0.18
The Company’s revenue and corresponding earnings can vary from quarter to quarter depending on the delivery
requirements of our customers. Our customers can be influenced by a variety of factors including upcoming sports
or entertainment events as well as their access to capital. Net earnings represent net earnings attributable
to shareholders.
DISCLOSURE CONTROLS AND PROCEDURES
Management, including the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the
Company’s disclosure controls and procedures (as defined in National Instrument 52-109 of the Canadian Securities
Administrators) as of April 30, 2024. Management has concluded that, as of April 30, 2024, the Company’s
disclosure controls and procedures were effective to provide reasonable assurance that material information relating
to the Company would be made known to them by others within the Company, particularly during the period in which
this report was being prepared.
INTERNAL CONTROLS OVER FINANCIAL REPORTING
Management is responsible for and has designed internal controls over financial reporting, or caused it to be
designed under management’s supervision, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with IFRS. Management
has concluded that, as of April 30, 2024, the Company’s internal controls over financial reporting were effective
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with IFRS.
25
2024 ANNUAL REPORT
EVERTZ TECHNOLOGIES LIMITED
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
There have been no changes to the Company’s internal controls over financial reporting during the period ended
April 30, 2024, that have materially affected, or reasonably likely to materially affect, its internal controls over
financial reporting. Management is currently operating under the Committee of Sponsoring Organizations of the
Treadway Commission Internal Control-Integrated Framework: 2013.
OUTLOOK
Management is encouraged with the Company’s revenue outlook, including within the cloud native technology and
service business, as evidenced by the receipt of significant orders and increase in the Company’s backlog. 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 continues to invest in new product developments.
RISKS AND UNCERTAINTIES
The Company risk factors are outlined in our AIF filed on SEDAR.
EVERTZ TECHNOLOGIES LIMITED
26
2024 ANNUAL REPORT
OPINION
We have audited the consolidated financial statements of Evertz Technologies Limited (“Evertz” or the “Company”),
which comprise the consolidated statements of financial position as at April 30, 2024 and 2023,
and the consolidated statements of earnings, changes in equity and cash flows for the years then ended,
and notes to the consolidated financial statements, including material accounting policy information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the consolidated financial position of the Company as at April 30, 2024 and 2023, and its consolidated financial
performance and its consolidated cash flows for the years then ended in accordance with International Financial
Reporting Standards (“IFRS”).
BASIS FOR OPINION
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial
Statements section of our report. We are independent of the company in accordance with the ethical requirements
that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our opinion.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated financial statements of the current period. These matters were addressed in the context of our audit
of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
REVENUE RECOGNITION
Description of the Key Audit Matter
The Company generates revenue through the sale of hardware, software solutions, services, warranty as well
as a combination of these revenue streams. The Company’s contracts with customers involve multiple performance
obligations. Determining whether the products and services represent distinct performance obligations, the allocation
of the transaction fee to the performance obligations and, for certain performance obligations in certain arrangements,
whether to recognize revenue at a point in time or over time may require significant management judgment.
We identified revenue recognition as a key audit matter. Significant auditor judgment and effort, involving more senior
professionals, was required to evaluate the results of our audit procedures regarding the Company’s significant
judgments in identifying distinct performance obligations and whether to recognize the related revenue over time
or at a point in time.
Please refer to notes 2 and 15 to the consolidated financial statements for details on the Company’s Use of Estimates
and Judgments and accounting policies related to revenue recognition.
INDEPENDENT AUDITOR’S REPORT
To the Shareholders of Evertz Technologies Limited
EVERTZ TECHNOLOGIES LIMITED
27
2024 ANNUAL REPORT
How the Key Audit Matter Was Addressed in the Audit
Our audit procedures to address the Key Audit Matter included, but were not limited to, the following:
• Obtaining, reading and understanding the terms of a sample of contracts entered into during the year.
• For a sample of revenue transactions recognized during the year, we performed the following:
• We agreed key contractual terms back to signed contracts, including contract amendments and
correspondence with customers, where applicable;
• Assessed the Company’s determination of the distinct performance obligation by examining the
contract source documents;
• We assessed the Company’s determination of the allocation of the transaction fee to the performance
obligation based on the standalone selling price for the performance obligation; and
• We obtained evidence of the Company’s satisfaction of the performance obligation to the customers and
assessed the Company’s determination of whether to recognize the related revenues over time or at a point
in time based on the terms of the agreements and the nature of the performance obligation rendered.
OTHER INFORMATION
Management is responsible for the other information. The other information comprises:
• The information included in the Management Discussion and Analysis; and
• The information, other than the financial statements and our auditor’s report thereon, included in the Annual Report.
Our opinion on the consolidated financial statements does not cover the other information and we do
not and will not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the
other information identified above and, in doing so, consider whether the other information is materially
inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise
appears to be materially misstated.
We obtained the Management Discussion and Analysis prior to the date of this auditor’s report. If, based on the
work we have performed on this other information, we conclude that there is a material misstatement of this other
information, we are required to report that fact in this auditor’s report. We have nothing to report in this regard.
The Annual Report is expected to be made available to us after the date of the auditor’s report. If, based on the
work we will perform on this other information, we conclude that there is a material misstatement of this other
information, we are required to report that fact to those charged with governance.
RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE CONSOLIDATED
FINANCIAL STATEMENTS
Management is responsible for the preparation and fair presentation of the consolidated financial statements
in accordance with IFRS, and for such internal control as management determines is necessary to enable the
preparation of consolidated financial statements that are free from material misstatement, whether due to fraud
or error.
In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless management either intends to liquidate the Company or to cease operations,
or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
EVERTZ TECHNOLOGIES LIMITED
28
2024 ANNUAL REPORT
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when
it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that
a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures
in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and events
in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Company to express an opinion on the consolidated financial statements. We are responsible for the
direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where applicable, related safeguards.
EVERTZ TECHNOLOGIES LIMITED
29
2024 ANNUAL REPORT
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Jamie Barron.
CHARTERED PROFESSIONAL ACCOUNTANTS, LICENSED PUBLIC ACCOUNTANTS
Oakville, Ontario
June 19, 2024
EVERTZ TECHNOLOGIES LIMITED
30
2024 ANNUAL REPORT
THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK
EVERTZ TECHNOLOGIES LIMITED
31
2024 ANNUAL REPORT
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at April 30, 2024 and April 30, 2023
(In thousands of Canadian dollars) April 30, 2024 April 30, 2023
ASSETS
Current assets
Cash and cash equivalents
$
86,325
$
12,468
Trade and other receivables (note 3)
84,350
106,871
Contract assets
12,554
11,032
Prepaid expenses
11,179
10,319
Inventories (note 4)
206,154
202,479
400,562
343,169
Property, plant and equipment (note 5)
34,384
34,730
Right-of-use assets (note 6)
20,432
20,396
Goodwill (note 7)
21,352
21,333
Intangibles (note 8)
1,098
2,125
Investments (note 9)
-
8,160
Deferred income taxes (note 27)
6,894
6,739
$
484,722
$
436,652
LIABILITIES
Current liabilities
Bank Indebtedness (note 12)
$
-
$
5,928
Trade and other payables
63,249
75,521
Provisions (note 10)
4,946
5,104
Deferred revenue
119,597
69,827
Current portion of lease obligations (note 11)
4,296
4,060
Redemption liability (note 13)
3,811
3,711
Income tax payable (note 27)
3,226
7,590
199,125
171,741
Long-term lease obligations (note 11)
18,920
18,827
$
218,045
$
190,568
EQUITY
Capital stock (note 14)
$
145,721
$
143,344
Share based payment reserve
19,246
14,697
Accumulated other comprehensive loss
1,197
(2,402)
Retained earnings
97,103
87,460
98,300
85,058
Total equity attributable to shareholders
263,267
243,099
Non-controlling interest (note 24)
3,410
2,985
266,677
246,084
$
484,722
$
436,652
See accompanying notes to the consolidated financial statements.
EVERTZ TECHNOLOGIES LIMITED
32
2024 ANNUAL REPORT
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Years ended April 30, 2024 and 2023
Capital
stock
Share-
based
pay-
ment
reserve
Accumu-
lated
other
compre-
hensive
earnings
Retained
earnings
Total
equity
attributable
to share-
holders
Non-
control-
ling
interest
Total
Equity
(In thousands
of Canadian dollars)
Balance at
April 30, 2022
$ 143,505 $ 10,893 $
(4,093) $
80,636 $
230,938 $
2,710 $
233,648
Net earnings
for the year
-
-
-
64,032
64,032
523
64,555
Unrealized loss on an FVTOCI
investments, net of tax (note 9)
-
-
(1,595)
-
(1,595)
-
(1,595)
Foreign currency
translation adjustment
-
-
3,286
-
3,286
177
3,463
Total comprehensive
earnings for the year
$
- $
- $
1,691
64,032 $
65,723 $
700 $
66,423
Dividends declared
-
-
-
(56,392)
(56,392)
(425)
(56,817)
Share based
compensation expense (note 19)
-
3,804
-
-
3,804
-
3,804
Repurchase
of common shares (note 14)
(158)
-
-
(816)
(974)
-
(974)
Balance at
April 30, 2023
$
143,344 $ 14,697 $
(2,402) $
87,460 $
243,099 $
2,985 $
246,084
Net earnings
for the year
-
-
-
70,170
70,170
857
71,027
Unrealized loss on an FVTOCI
investments, net of tax (note 9)
-
-
(1,131)
-
(1,131)
-
(1,131)
Transfer of earnings on
disposal of investments (note 9)
-
-
2,704
-
2,704
-
2,704
Foreign currency
translation adjustment
-
-
2,026
-
2,026
(32)
1,994
Total comprehensive
earnings for the year
$
- $
- $
3,599 $
70,170 $
73,769 $
825 $
74,594
Dividends declared
-
-
-
(58,596)
(58,596)
(400)
(58,996)
Issued on exercise of employee
stock options (note 14)
2,456
-
-
-
2,456
-
2,456
Transfer of stock options (note 14)
260
(260)
-
-
-
-
-
Share based
compensation expense (note 19)
-
4,809
-
-
4,809
-
4,809
Repurchase of
common shares (note 14)
(339)
-
-
(1,931)
(2,270)
-
(2,270)
Balance at
April 30, 2024
$ 145,721 $ 19,246 $
1,197 $
97,103 $
263,267 $
3,410 $
266,677
See accompanying notes to the consolidated financial statements.
33
2024 ANNUAL REPORT
EVERTZ TECHNOLOGIES LIMITED
(In thousands of Canadian dollars, except per share amounts)
2024
2023
Revenue (notes 15 and 22)
$
514,616
$
454,578
Cost of goods sold
212,173
186,320
Gross margin
302,443
268,258
Expenses
Selling, administrative and general (note 16)
77,494
66,760
Research and development (note 17)
139,415
121,251
Investment tax credits
(14,708)
(13,415)
Foreign exchange gain
(154)
(1,966)
202,047
172,630
100,396
95,628
Finance income
1,661
376
Finance costs
(1,353)
(3,718)
Net loss on investments through profit and loss (note 9)
(2,704)
(5,364)
Other income
(642)
888
Earnings before income taxes
97,358
87,810
Provision for (recovery of) income taxes
Current (note 27)
26,044
25,066
Deferred (note 27)
287
(1,811)
26,331
23,255
Net earnings for the year
$
71,027
$
64,555
Net earnings attributable to non-controlling interest (note 24)
$
857
$
523
Net earnings attributable to shareholders
70,170
64,032
Net earnings for the year
$
71,027
$
64,555
Earnings per share (note 26)
Basic
$
0.92
$
0.84
Diluted
$
0.91
$
0.84
See accompanying notes to the consolidated financial statements.
CONSOLIDATED STATEMENTS OF EARNINGS
Years ended April 30
34
2024 ANNUAL REPORT
EVERTZ TECHNOLOGIES LIMITED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
Years ended April 30
(In thousands of Canadian dollars)
2024
2023
Net earnings for the year
$
71,027
$
64,555
Other comprehensive earnings (loss)
Items that may or will be reclassified to earnings:
Unrealized loss on investments, net of tax (note 9)
(1,131)
(1,595)
Reclassification to net earnings for loss on sale of
FVTOCI investments, net of tax (note 9)
2,704
-
Foreign currency translation adjustment
1,994
3,463
Comprehensive earnings
$
74,594
$
66,423
Comprehensive earnings attributable to non-controlling interest
$
825
$
700
Comprehensive earnings attributable to shareholders
73,769
65,723
Comprehensive earnings
$
74,594
$
66,423
See accompanying notes to the consolidated financial statements.
35
2024 ANNUAL REPORT
EVERTZ TECHNOLOGIES LIMITED
(In thousands of Canadian dollars)
2024
2023
Operating activities
Net earnings for the year
$
71,027
$
64,555
Add: Items not involving cash
Depreciation of property, plant and equipment (note 5)
9,721
10,851
Amortization of right-of-use assets (note 6)
4,658
4,714
Amortization of intangibles (note 8)
1,028
1,238
Gain on disposal of property, plant and equipment (note 5)
(84)
(8)
Realized loss on investments
2,704
5,978
Share-based compensation (note 19)
4,809
3,803
Interest expense
1,247
2,165
Deferred income tax expense (note 27)
287
(1,754)
95,397
91,542
Current tax expenses, net of investment tax credits (note 27)
11,381
11,248
Income taxes paid
(15,530)
(12,252)
Changes in non-cash working capital items (note 18)
53,426
(36,724)
Cash provided by operating activities
144,674
53,814
Investing activities
Acquisition of property, plant and equipment (note 5)
(9,559)
(6,572)
Proceeds from disposal of property, plant and equipment
114
60
Acquisition of investments (note 9)
-
(14,386)
Proceeds from disposal of investments (note 9)
7,183
3,779
Cash used in investing activities
(2,262)
(17,119)
Financing activities
Proceeds from credit facility (note 12)
-
5,928
Repayment of credit facility (note 12)
(5,928)
-
Principle payments of lease liabilities (note 11)
(4,326)
(4,283)
Interest paid
(1,147)
(1,877)
Dividends paid
(58,596)
(56,392)
Dividends paid by subsidiaries to non-controlling interests
(400)
(425)
Capital stock repurchased (note 14)
(2,270)
(974)
Capital stock issued (note 14)
2,456
-
Cash used in financing activities
(70,211)
(58,023)
Effect of exchange rates on cash and cash equivalents
1,656
(106)
Increase (decrease) in cash and cash equivalents
73,857
(21,434)
Cash and cash equivalents beginning of year
12,468
33,902
Cash and cash equivalents end of year
$
86,325
$
12,468
See accompanying notes to the consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended April 30
36
2024 ANNUAL REPORT
EVERTZ TECHNOLOGIES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Years ended April 30, 2024 and 2023
(In thousands of Canadian dollars, except for “number of common shares”, “number of options” and “per share” information)
EVERTZ TECHNOLOGIES LIMITED (“EVERTZ” OR THE “COMPANY”) IS INCORPORATED UNDER THE CANADA BUSINESS
CORPORATIONS ACT. THE COMPANY IS INCORPORATED AND DOMICILED IN CANADA AND THE REGISTERED HEAD OFFICE IS
LOCATED AT 5292 JOHN LUCAS DRIVE, BURLINGTON, ONTARIO, CANADA. THE COMPANY IS A LEADING SUPPLIER OF SOFTWARE,
EQUIPMENT AND TECHNOLOGY SOLUTIONS TO CONTENT CREATORS, BROADCASTERS, SPECIALTY CHANNELS AND TELEVISION
SERVICE PROVIDERS. THE COMPANY DESIGNS, MANUFACTURES AND DISTRIBUTES VIDEO AND AUDIO INFRASTRUCTURE
SOLUTIONS FOR THE PRODUCTION, POST–PRODUCTION, BROADCAST AND TELECOMMUNICATIONS MARKETS.
1. STATEMENT OF COMPLIANCE
These consolidated financial statements have been prepared in accordance with International Financial Reporting
Standards (“IFRS”) as issued by the International Accounting Standards Board ("IASB").
These consolidated financial statements were authorized for issue by the Board of Directors on June 19, 2024.
2. SUMMARY OF MATERIAL ACCOUNTING POLICIES
Basis of Measurement
These financial statements have been prepared on the historical cost basis except for certain financial assets and
liabilities which are stated at fair value. Historical cost is generally based on the fair value of the consideration
given in exchange for assets.
Functional and Presentation Currency
These financial statements are presented in Canadian dollars, which is the Company’s parent company functional
currency. Each subsidiary of the Company determines its own functional currency based on the primary economic
environment in which the subsidiary operates. All financial information presented in Canadian dollars has been
rounded to the nearest thousand, except per share amounts.
Basis of Consolidation
These financial statements incorporate the financial statements of the Company and entities controlled by the
Company (its subsidiaries). Control is achieved where the Company has power over an entity, has exposure or
rights to variable returns from its involvement with the entity and has the ability to use its power over the entity
to affect the amount of the investor’s returns.
The results of subsidiaries acquired or disposed of are included in the consolidated statements of earnings and
comprehensive earnings from the effective date of acquisition of control and up to the effective date of disposal
of control, as appropriate. Total comprehensive earnings of subsidiaries is attributed to the owners of the Company
and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
All intra-Company transactions, balances, income and expenses are eliminated in full on consolidation.
Business Combinations
Business combinations are accounted for using the acquisition method. The cost of the acquisition is measured at
the aggregate of the fair values, at the date of acquisition, of assets transferred, liabilities incurred or assumed, and
equity instruments issued by the Company. The acquiree’s identifiable assets and liabilities assumed are recognized
at their fair value at the acquisition date. Acquisition-related costs are recognized in earnings as incurred. Any
contingent consideration is measured at fair value on date of the acquisition and is included as part of the
consideration transferred. The fair value of the contingent consideration liability is re-measured at each reporting
date with corresponding gain/loss recognized in earnings. The excess of the consideration over the fair value of the
net identifiable assets and liabilities acquired is recorded as goodwill.
On an acquisition by acquisition basis, any non-controlling interest is measured either at the fair value of the non-
controlling interest or at the fair value of the proportionate share of the net identifiable assets acquired. Where the
non-controlling interest holds a put option that can be settled by a fixed amount of cash, in connection with their
remaining shares, the fair value of the put option is recognized as a financial redemption liability. In such a case,
the non-controlling interest is deemed to have been acquired at the acquisition date and a financial redemption
37
2024 ANNUAL REPORT
EVERTZ TECHNOLOGIES LIMITED
liability is recorded instead of a non-controlling interest. Options that are not exercisable for at least one year are
presented as non-current liabilities. Subsequent measurement of the redemption liability is recorded using the
effective interest rate method and recognized in the statement of earnings while no earnings are attributed to the
non-controlling interest. Goodwill arising on an acquisition of a business is carried at cost as established at the date
of acquisition of the business less accumulated impairment losses, if any.
Revenue Recognition
Revenue is measured using a five-step recognition model which includes; 1) identifying the contract(s) with the
customer; 2) identifying the separate performance obligations in the contract; 3) determining the transaction price; 4)
allocating the transaction price to separate performance obligations; and 5) recognizing revenue when (or as) each
performance obligation is satisfied.
Step 1: Identifying the contract
Before recognizing revenue, the Company reviews customer contracts to ensure each party’s rights and payment
terms are identified, there is commercial substance, and that it is probable that the Company will collect the
consideration in exchange for the goods or services as stated in the contract. The Company may enter into multiple
contracts with the same customer. The Company uses judgement in evaluating whether various contracts are
interrelated, which includes considerations as to whether they were negotiated as a package with a single commercial
objective, whether the amount of consideration on one contract is dependent on the performance of the other
contract, or if some or all goods and services in the contracts are a single performance obligation. New arrangements
with existing customers can be either be treated as a new contract or the modification of prior contracts with the
customer. The Company uses judgment in making this determination, considering whether there is a connection
between the new arrangement and the pre-existing contract, whether the goods and services under the new
arrangement are highly interrelated with the goods and services sold under prior contracts, and how the goods and
services under the new arrangement are priced. In determining whether a transaction price represents a contract
modification or a change in variable consideration, the Company examines whether the change in price results from
changing the contract or from applying unchanged existing contract provisions.
Step 2: Identifying performance obligations
The Company regularly sells hardware and software solutions with related services. Software solutions including both,
right to access and right to use term based and perpetual licenses and stand-alone software solutions services.
Services include training and commissioning, warranty, maintenance and support and other professional services.
A customer contract typically lists items separately with distinct item descriptions, quantities, and prices. If a contract
contains a bundle of items priced together at a single price, the Company analyzes the contract to identify distinct
performance obligations within the bundle. The Company uses judgment in determining whether a good or service,
such as commissioning is considered separate performance obligations or are combined into one distinct
performance obligation.
Step 3: Determining the transaction price
Transaction prices are typically the prices stated on the purchase orders or contracts, net of discounts. The Company
reviews customer contracts for any variable considerations, existence of significant financing components and
payables to customers, and adjusts transaction prices accordingly. Variable consideration is estimated and included
in the transaction price based on the most likely amount to be received. The Company does not account for significant
financing components if the period between when the Company transfers the promised goods or services to the
customer and when the customer pays for those goods or services is one year or less.
Step 4: Allocating the transaction price to performance obligations
If a customer contract includes multiple performance obligations, the transaction price is allocated to each
performance obligation based on its relative stand-alone selling price. If a stand-alone selling price is not directly
observable, the Company estimates the stand-alone selling price of individual elements, based on prices at which
the deliverable is regularly sold on a stand-alone basis after considering specific discounts where appropriate.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
Years ended April 30, 2024 and 2023 (In thousands of Canadian dollars, except for “number of common shares”, “number of options” and “per share” information)
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
EVERTZ TECHNOLOGIES LIMITED
38
2024 ANNUAL REPORT
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Step 5: Recognizing revenue upon satisfaction of performance obligations
The timing of revenue recognition is based on when a customer obtains control of the asset. Control of an asset
refers to the ability to direct the use of, and obtain substantially all of the remaining benefits from, the asset.
Control includes the ability to prevent other entities from directing the use of, and obtaining the benefits from,
an asset. The Company reviews customer contracts and the nature of the performance obligations to determine
if a performance obligation is satisfied over time or at a point in time, and recognizes revenue accordingly.
Revenue from sales of hardware are recognized upon shipment, provided that the significant risks and rewards
of ownership have been transferred to the customer, the Company retains neither continuing managerial involvement
to the degree usually associated with ownership nor effective control over the goods sold, revenue can be reliably
measured and its probable that the economic benefits will flow to the Company.
Revenue from software solutions are recognized either over a period of time or at a point in time depending
on the contractual terms of the contract identified and the specific performance obligations identified therein.
For performance obligations recognized at a point in time, revenue is recognized following the transfer of control
or the Company has objective evidence that criteria for acceptance has been satisfied. For performance obligations
satisfied over time, the Company measures the progress using the output method, measuring progress toward
satisfaction of the performance obligation.
Revenue from services is recognized as services are performed and warranty and maintenance revenue is recognized
ratably over the period of service.
Certain of the Company’s hardware and software solutions contracts are long-term in nature, and the Company
measures the progress using either an input or output method, depending on which yields the most reliable estimate.
For construction type contracts, where estimated total costs and the outcome of the contract can be assessed
reliably, the Company recognizes revenue over time, based on costs incurred relative to the estimated total contract
costs. When the outcome of the contract cannot be assessed reliably, contract costs incurred are immediately
expensed and revenue is recognized only to the extent that costs are considered likely to be recovered. For software
solutions that require significant customization, where the direct measurement of value to the customer results in the
best estimate and criteria for recognition over time is met, the Company recognizes revenue over time based on value
provided to the customer to date. Revenue recognized in excess of billings are recorded as contract assets, while
billings in excess of revenue recognized is recorded as deferred revenue.
Customer contacts have a variety of different payment terms. Contract assets are recognized when revenue is
recognized in excess of billings or when the Company has a right to consideration and that right is conditional to
something other than the passage of time. Contract assets are subsequently transferred to accounts receivable when
the right to payment becomes unconditional. This usually occurs when the Company issues an invoice to the
customer. Contract assets are adjusted for expected credit losses.
Deferred revenue relates to advance consideration received from customers in excess of revenue recognized under
the contract. During the year, the Company recognized $49,936 in revenue that was recognized as deferred revenue
at the beginning of the year (2023 – $55,020).
Finance Income
Interest income is recognized when it is probable that the economic benefits will flow to the Company and the amount
of revenue can be measured reliably. Interest revenue is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future
cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and in the bank, net of outstanding bank overdrafts.
EVERTZ TECHNOLOGIES LIMITED
39
2024 ANNUAL REPORT
Inventories
Inventories consist of raw materials and supplies, work in progress and finished goods. Inventories are stated at the
lower of cost and net realizable value. Cost is determined on a weighted average basis and includes raw materials,
the cost of direct labour applied to the product and the overhead expense.
Net realizable value represents the estimated selling price for inventories less all estimated costs of completion and
costs necessary to make the sale.
Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any recognized impairment loss.
Where the costs of certain components of an item of property, plant and equipment are significant in relation to the
total cost of the item, they are accounted for and depreciated separately. Depreciation expense is calculated based
on depreciable amounts which is the cost of an asset less residual value and is recognized in earnings on a straight-
line basis over the estimated useful life of the related asset. Borrowing costs are capitalized to the cost of qualifying
assets that take a substantial period of time to be ready for their intended use.
The estimated useful lives are as follows:
ASSET
BASIS
RATE
Office furniture and equipment
Straight-line
10 years
Research and development equipment
Straight-line
5 years
Machinery and equipment
Straight-line
5 - 15 years
Leaseholds
Straight-line
5 years
Building
Straight-line
10 - 40 years
Airplanes
Straight-line
10 - 20 years
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales
proceeds and the carrying amount of the asset and is recognized in earnings.
The Company reviews the residual value, estimated useful life and the depreciation method at least annually.
Impairment of Non-Financial Assets
Goodwill is tested for impairment annually, or whenever events or changes in circumstances indicate that the carrying
amount may be more than its recoverable amount. At each reporting period, the Company reviews the carrying
amounts of its other non-financial assets to determine whether there is any indication that those assets have suffered
an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to
determine the extent of the impairment loss (if any). Where the asset does not generate cash inflows that are largely
independent from other assets, the Company estimates the recoverable amount of the cash-generating unit (“CGU”)
to which the asset belongs. Goodwill is allocated to a group of CGU’s based on the level at which it is monitored for
internal reporting purposes.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use,
the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset for which the estimates
of future cash flows have not been adjusted.
If the recoverable amount of an asset or CGU is estimated to be less than its carrying amount, the carrying amount
of the asset or CGU is reduced to its recoverable amount. An impairment loss relating to a CGU to which goodwill has
been allocated, is allocated to the carrying amount of the goodwill first. An impairment loss is recognized immediately
in earnings.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
Years ended April 30, 2024 and 2023 (In thousands of Canadian dollars, except for “number of common shares”, “number of options” and “per share” information)
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
EVERTZ TECHNOLOGIES LIMITED
40
2024 ANNUAL REPORT
An impairment loss in respect of goodwill is not reversed. Where an impairment loss subsequently reverses for other
non-financial assets, the carrying amount of the asset or CGU is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognized for the asset or CGU in prior years. A reversal of an impairment
loss is recognized immediately in earnings.
Intangible Assets
Intangible Assets
Intangible assets represent intellectual property acquired through business acquisitions and are recorded at cost less
any impairment loss and are amortized using the straight–line method over a five–year period. The estimated useful
life and amortization method are reviewed at the end of each reporting period.
Research and Development
All research and development expenditures are expensed as incurred unless a development project meets the criteria
for capitalization. Development expenditures are capitalized only if development costs can be measured reliably, the
product or process is technically and commercially feasible, future economic benefits are probable and the Company
intends to and has sufficient resources to complete development and to use or sell the asset. No internally generated
intangible assets have been recognized to date.
Research and development expenditures are recorded gross of investment tax credits and related government grants.
Investment tax credits for scientific research and experimental development are recognized in the period the
qualifying expenditures are incurred if there is reasonable assurance that they will be realized.
Investment in an Associate
Investments in an Associate are entities in which the Company has significant influence over, but not have control or
joint control over the financial and operating policies. Investments in an Associate are accounted for using the equity
method. Under the equity method, the initial investment is recognized at cost, which includes transaction costs.
Subsequent to initial recognition, the carrying amount is increased or decreased in recognition of the Company’s
share of the profit or loss after the date of acquisition, until the date on which significant influence ceases.
At the end of each reporting period, the Company also reviews the carrying amounts of Investments in an Associate to
determine whether there is any indication that those assets have suffered an impairment loss. If any such indication
exists, the carrying amount of such investment is compared to its recoverable amount, being the higher of its fair
value less costs of disposal and value-in-use. If the recoverable amount of an investment is less than its carrying
amount, the carrying amount is reduced to its recoverable amount and an impairment loss, being the excess of
carrying amount over the recoverable amount, is recognized immediately. When an impairment loss reverses in
a subsequent period, the carrying amount of the investment is increased to the revised estimate of recoverable
amount, but so that the increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognized.
Provisions
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past
event, it is probable that the Company will be required to settle that obligation and a reliable estimate can be made
of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present
obligation at the reporting period, taking into account the risks and uncertainties surrounding the obligation.
Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount
is the present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third
party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the
amount of the receivable can be measured reliably.
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
EVERTZ TECHNOLOGIES LIMITED
41
2024 ANNUAL REPORT
Leasing
At inception of a contract, the Company assesses whether that contract is, or contains, a lease. A contract is,
or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time
in exchange for consideration.
The Company records a right-of-use asset and a lease liability at the lease commencement date. The right-of-use
asset is initially measured at cost, consisting of the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs
to dismantle and remove the underlying asset or restore the site on which it is located; less any lease incentives
received.
The right-of-use asset is depreciated on a straight-line basis over the lease term. The lease term consists of the
non-cancellable period of the lease; periods covered by options to extend the lease, where the Company is reasonably
certain to exercise the option; and periods covered by options to terminate the lease, where the Company is
reasonably certain not to exercise the option. The right-of-use asset is adjusted for remeasurement of lease liabilities
resulting from a change in future lease payments arising from a change in rate or a change in the assessment
of whether an extension or termination options will be exercised.
The lease liability is initially measured at the present value of lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the
Company’s incremental borrowing rate. The Company generally use their incremental borrowing rate as the interest
rate implicit in our leases cannot be readily determined. The lease liability is subsequently measured at amortized
cost using the effective interest rate method. After the commencement date, the lease liability is remeasured if there
is a modification, including a change in the lease term. Certain leases require us to make payments that relate to
property taxes, insurance, and other non-rental costs. These non-rental costs are typically variable and are not
included in the calculation of the right-of-use asset or lease liability.
Foreign Currency Translation
The individual financial statements of each subsidiary entity are presented in the currency of the primary economic
environment in which the entity operates (its functional currency). For the purpose of the consolidated financial
statements, the results and financial position of each group entity are presented in Canadian dollars (“CDN”),
which is the functional currency of the parent Company and the presentation currency for the financial statements.
In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s
functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the
transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated
at the rates prevailing at that date. Exchange differences are recognized in earnings in the period in which they arise.
Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Company’s foreign
operations are expressed in Canadian dollars using exchange rates prevailing at the end of the reporting period.
Income and expense items are translated at the average exchange rates for the period. Foreign currency gains and
losses are recognized in other comprehensive earnings. The relevant amount in cumulative foreign currency
translation adjustment is reclassified into earnings upon disposition or partial disposition of a foreign operation and
attributed to non-controlling interests as appropriate.
Income Taxes
Current Tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net earnings as reported
in the statement of earnings because it excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The Company’s liability for current tax is
calculated using tax rates that have been enacted or substantively enacted by the statement of financial position date.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
Years ended April 30, 2024 and 2023 (In thousands of Canadian dollars, except for “number of common shares”, “number of options” and “per share” information)
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
EVERTZ TECHNOLOGIES LIMITED
42
2024 ANNUAL REPORT
Deferred Tax
Deferred tax is the tax expected to be payable or recoverable on unused tax losses and credits, as well as differences
between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases
used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary
differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be
available against which unused tax losses, credits and other deductible temporary differences can be utilized.
Such assets and liabilities are not recognized if the temporary difference arises from the initial recognition of goodwill
or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction
that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting period and reduced to the extent that
it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the
asset is realized. The measurement of deferred tax liabilities and assets reflects the tax consequences that would
follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the
carrying amount of its assets and liabilities. Deferred tax is charged or credited to earnings, except when it relates
to items charged or credited directly to other comprehensive earnings or equity, in which case the deferred tax is also
dealt with in other comprehensive earnings or equity.
Share Based Compensation
Equity settled share based payments to employees and others providing similar services are measured at the fair
value of the equity instruments at the grant date. Details regarding the determination of the fair value of equity
settled share based transactions are set out in note 19.
The fair value determined at the grant date of the equity settled share based payments is expensed on a straight-line
basis over the vesting period of the option based on the Company’s estimate of the number of equity instruments
that will eventually vest. At each reporting period, the Company revises its estimate of the number of equity
instruments expected to vest. The impact of the revision of the original estimates, if any, is recognized in earnings
such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to share based
payment reserve.
Cash settled share based compensation to employees, including restricted share units, or others providing similar
services are measured at the fair value of the instruments at the grant date. The fair value is recognized as an
expense with a corresponding increase in liabilities over the vesting period of the option grant. At each reporting
period, the Company revises its estimate of fair value and the number of instruments expected to vest. The impact
of the revision of the original estimates, if any, is recognized in earnings such that the cumulative expense reflects
the revised estimate, with a corresponding adjustment to liabilities.
Earnings Per Share
The Company presents basic and diluted earnings per share (“EPS”) data for its common shares. Basic EPS is
calculated by dividing the net earnings attributable to shareholders by the weighted average number of common
shares outstanding during the period. Diluted EPS is determined by adjusting the net earnings attributable to
shareholders and the weighted average number of common shares outstanding for the effects of all potentially
dilutive common shares, which is comprised of share options granted to employees with an exercise price below
the average market price.
Finance Costs
Finance costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets
that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of
those assets, until such time as the assets are substantially ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other finance costs are recognized in earnings in the period in which they are incurred.
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
EVERTZ TECHNOLOGIES LIMITED
43
2024 ANNUAL REPORT
Investment Tax Credits
The Company is entitled to investment tax credits, which are earned as a percentage of eligible research and
development expenditures incurred in each taxation year. Investment tax credits relate entirely to the Company’s
research and development expenses in the consolidated statements of earnings but are presented separately in the
consolidated statements of earnings for information purposes. Investment tax credits are recognized and recorded
within income tax receivable or as a reduction of income tax payable, when there is reasonable assurance they will
be received.
Financial Instruments
The Company’s financial assets and liabilities which are initially recorded at fair value and subsequently measured
based on their assigned classifications as follows:
Assets/Liabilities
Classification
Cash and cash equivalents
Amortized cost
Trade and other receivables
Amortized cost
Investments in public companies
Fair value through other comprehensive income
Investments in private companies
Fair value through profit and loss
Bank indebtedness
Amortized cost
Trade and other payables, excluding RSUs
Amortized cost
Cash based RSU liability
Fair value through profit and loss
Redemption liability
Amortized cost
Financial Assets
All financial assets are initially measured at fair value, plus transaction costs. Transaction costs in respect of financial
instruments that are classified as fair value through profit or loss are recognized in earnings immediately. Transaction
costs in respect of other financial instruments are included in the initial measurement of the financial instrument.
Financial assets are classified into the following specific categories: financial assets “at fair value through profit or
loss” (“FVTPL”), “fair value through other comprehensive income (“FVTOCI”)” and “amortized cost”. The
classification depends on the nature and purpose of the financial assets and is determined at the time of initial
recognition.
Financial assets at FVTPL are stated at fair value, with any gains or losses arising on re-measurement recognized
in earnings. Financial assets at FVTOCI are stated at fair value, with any gains or losses arising on re-measurement
recognized in other comprehensive earnings. Where financial assets at FVTOCI are derecognized, the gains or losses
previously recognized in other comprehensive earnings is reclassified from other comprehensive earnings to earnings.
Impairment of Financial Assets
Financial assets, other than those at FVTPL and FVTOCI, are assessed for indicators of impairment at the time
of initial recognition and at each reporting period. The Company measures a loss allowance based on the lifetime
expected credit losses. Lifetime expected credit losses are estimated based on factors such as the Company’s past
experience of collecting payments, observable changes in national or local economic conditions that correlated with
default on receivables, financial difficulties of the borrower, and it becoming probable that the borrow will either enter
bankruptcy or financial reorganization. Financial assets are written off when there is no reasonable expectation
of recovery.
For financial assets carried at amortized cost, the amount of the impairment is the difference between the asset’s
carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original
effective interest rate.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with
the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
Years ended April 30, 2024 and 2023 (In thousands of Canadian dollars, except for “number of common shares”, “number of options” and “per share” information)
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
EVERTZ TECHNOLOGIES LIMITED
44
2024 ANNUAL REPORT
A trade receivable is considered impaired if it is probable that a customer will not pay all amounts due. When a trade
receivable is considered impaired, it is recorded in the allowance account. Subsequent recoveries of amounts are
credited against the allowance account. Changes in the carrying amount of the allowance account are recognized
in earnings. When there is no reasonable expectation of recovery, the trade receivable balance is written off against
the allowance account.
Financial Liabilities and Equity Instruments Issued by the Company
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on re-measurement recognized in
earnings. The net gain or loss recognized in earnings incorporates any interest paid on the financial liability and
is included in the “other income and expenses” line item in the consolidated statements of earnings.
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all
of its liabilities. Equity instruments issued by the Company are recognized at the proceeds received, net of direct
issue costs.
Other financial liabilities, including long term debt and redemption liabilities, are initially measured at fair value,
net of transaction costs. Other financial liabilities are subsequently measured at amortized cost using the effective
interest method, with interest expense recognized on an effective yield basis.
Critical Accounting Estimates and Judgments
The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year.
Consequently, actual results could differ from those estimates. Those estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate
is revised and in any future periods affected.
Significant estimates include the determination of expected credit losses which are based on the amount and
timing of cash flows expected to be received, allocation of the transaction price on customer contracts with multiple
deliverables which are based on standalone selling prices, of the applicable deliverable or using estimation
techniques where no standalone selling prices are available, provision for inventory obsolescence which is recorded
to adjust to the net realizable value of inventory and based on current market prices and past experiences, the useful
life of property, plant and equipment and intangibles for depreciation which are based on past experiences, expected
use and industry trends, amortization and valuation of net recoverable amount of property, plant and equipment and
intangibles, determination of fair value for share based compensation, evaluating deferred income tax assets and
liabilities, the determination of fair value of financial instruments and the likelihood of recoverability, and the
determination of implied fair value of goodwill and implied fair value of assets and liabilities for purchase price
allocation purposes and goodwill impairment assessment purposes.
Significant items requiring the use of judgment in application of accounting policies and assumptions include the
determination of functional currencies, classification of financial instruments, classification of leases, determination
of the number of revenue performance obligations, the allocation of transaction prices on customer contracts,
determination if revenues should be recognized at a point in time or over time, application of the percentage
of completion method on long-term contracts, degree of componentization applied when calculating amortization
of property, plant and equipment, and identification of cash generating units for impairment testing purposes.
Operating Segments
An operating segment is a component of the Company that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company’s
other components. The Company reviewed its operations and determined that it operates a single reportable segment,
the television broadcast equipment market. The single reportable operating segment derives its revenue from the sale
of hardware and software solutions, related services, training and commissioning and long-term contracts.
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
EVERTZ TECHNOLOGIES LIMITED
45
2024 ANNUAL REPORT
Changes in Accounting Policies
Presentation of Financial Statements
Effective May 1, 2023, the Company adopted amendments to IAS 1, Presentation of Financial Statements,
which requires the disclosure of material accounting policy information, instead of significant accounting policies.
The adoption of the amendments did not have a material impact on the Consolidated Financial Statements.
New and Revised IFRSs Issued but Not Yet Effective
Following is a listing of amendments, revisions and new International Financial Reporting Standards issued but
not yet effective. Unless otherwise indicated, earlier application is permitted.
Presentation of Non-Current Liabilities with Covenants
Amendments to IAS 1, Presentation of Financial Statements was issued by the IASB in January 2020 and clarifies
the classification, presentation and disclosure requirements in the standard for non-current liabilities with covenants.
The amendments are effective for reporting periods beginning on or after January 1, 2024. The Company does not
expect that the adoption of this standard listed above will have a material impact on the consolidated financial
statements of the Company.
Lease Liability in Sale and Leaseback Transactions
Amendments to IFRS 16, Leases was issued by the IASB in September 2022 and clarifies the subsequent measurement
requirements for sale and leaseback transactions for sellers-leasees. The amendments are effective for reporting periods
beginning on or after January 1, 2024. The Company does not expect that the adoption of the standard listed above will
have a material impact on the consolidated financial statements of the Company.
Presentation and Disclosure in Financial Statements
IFRS 18, Presentation and Disclosure in Financial Statements issues was issued by the IASB in April 2024, and
replaces IAS 1, Presentation of Financial Statements. The standard is effective for reporting periods beginning
on or after January 1, 2027. The Company has not yet determined the impact of the standard.
3. TRADE AND OTHER RECEIVABLES
2024
2023
Trade receivables, net of allowances
$
81,742
$
105,692
Other receivables
2,608
1,179
$
84,350
$
106,871
4. INVENTORIES
2024
2023
Finished goods
$
58,588
$
53,446
Raw material and supplies
109,750
106,614
Work in progress
37,816
42,419
$
206,154
$
202,479
Cost of sales for the year ended April 30, 2024, included $204,071 of inventory (2023 - $171,059) and $4,317
of inventory write-offs (2023 - $3,150).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
Years ended April 30, 2024 and 2023 (In thousands of Canadian dollars, except for “number of common shares”, “number of options” and “per share” information)
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
EVERTZ TECHNOLOGIES LIMITED
46
2024 ANNUAL REPORT
5. PROPERTY, PLANT AND EQUIPMENT
April 30, 2024
April 30, 2023
Cost
Accumulated
Depreciation
Carrying
Amount
Cost
Accumulated
Depreciation
Carrying
Amount
Office furniture and equipment $
5,387 $
4,168 $
1,219 $
5,169 $
3,589 $
1,580
Research and development
equipment
35,590
28,610
6,980
34,008
27,086
6,922
Airplanes
11,987
10,740
1,247
11,599
10,263
1,336
Machinery and equipment
73,845
60,974
12,871
69,811
56,937
12,874
Leaseholds
10,240
7,581
2,659
9,570
7,086
2,484
Land
2,252
-
2,252
2,276
-
2,276
Buildings
10,864
3,708
7,156
10,984
3,726
7,258
$ 150,165 $
115,781 $
34,384 $ 143,417 $
108,687 $
34,730
Office
furniture
and
equip-
ment
Research
and
develop-
ment
equipment
Airplanes
Machin-
ery
and
equip-
ment
Lease-
holds
Land
Build-
ings
Total
Cost
Balance as at April 30, 2022
$
4,593 $
40,316 $ 11,599 $ 69,153 $ 9,195 $ 2,055 $ 9,916 $ 146,827
Additions
490
1,429
-
4,274
363
-
16
6,572
Foreign exchange
adjustments
125
465
-
1,052
12
221
1,052
2,927
Disposals
(39)
(8,202)
-
(4,668)
-
-
-
(12,909)
Balance as at April 30, 2023
$
5,169 $
34,008 $ 11,599 $ 69,811 $ 9,570 $ 2,276 $ 10,984 $ 143,417
Additions
264
1,909
255
6,451
667
-
13
9,559
Foreign exchange
adjustments
(7)
311
133
(1,597)
3
(24)
(133)
(1,314)
Disposals
(39)
(638)
-
(820)
-
-
-
(1,497)
Balance as at April 30, 2024
$
5,387 $
35,590 $ 11,987 $ 73,845 $ 10,240 $ 2,252 $ 10,864 $ 150,165
Accumulated Depreciation
Balance as at April 30, 2022
$
3,068 $ 30,544 $
9,720 $ 55,936 $ 6,527 $
- $ 3,155 $ 108,950
Depreciation for the year
479
4,246
543
4,834
559
-
190
10,851
Foreign exchange
adjustments
80
440
-
813
-
-
381
1,714
Disposals
(38)
(8,144)
-
(4,646)
-
-
-
(12,828)
Balance as at April 30, 2023
$
3,589 $
27,086 $ 10,263 $ 56,937 $ 7,086 $
- $ 3,726 $ 108,687
Depreciation for the year
625
3,087
609
4,851
495
-
53
9,720
Foreign exchange
adjustments
(9)
(929)
(132)
(13)
-
-
(71)
(1,154)
Disposals
(37)
(634)
-
(801)
-
-
-
(1,472)
Balance as at April 30, 2024
$
4,168 $
28,610 $ 10,740 $ 60,974 $ 7,581 $
- $ 3,708 $ 115,781
EVERTZ TECHNOLOGIES LIMITED
47
2024 ANNUAL REPORT
Carrying Amounts
At April 30, 2023
$
1,580 $
6,922 $
1,336 $ 12,874 $
2,484 $ 2,276 $
7,258 $
34,730
At April 30, 2024
$ 1,219 $
6,980 $
1,247 $ 12,871 $
2,659 $ 2,252 $
7,156 $
34,384
6. RIGHT-OF-USE ASSETS
Land & Building
Balance as at May 1, 2022
$
24,637
Amortization for the year
(4,714)
Foreign exchange adjustments
473
Balance as at April 30, 2023
$
20,396
Additions
4,643
Amortization for the year
(4,658)
Foreign exchange adjustments
51
Balance as at April 30, 2024
$
20,432
7. GOODWILL
The changes in carrying amounts of goodwill are as follows:
Cost
Balance as at April 30, 2022
$
21,033
Foreign exchange differences
300
Balance as at April 30, 2023
$
21,333
Foreign exchange differences
19
Balance as at April 30, 2024
$
21,352
The Company performs an impairment test annually on April 30th or whenever there is an indication of impairment.
For the purposes of testing for impairment, goodwill has been allocated to the following cash-generating units as follows:
April 30,
2024
2023
Evertz Microsystems Ltd.
$
13,955
$
13,926
Holdtech Kft
5,346
5,346
Quintech
1,007
1,023
ATCI
393
387
Ease Live
651
651
$
21,352
$
21,333
The key assumptions used in performing the impairment tests as at April 30, 2024 are as follows:
Method of determining recoverable amount:
Value in use
Discount Rate:
9.5% - 14%
Perpetual growth rate:
1.6% - 3.5%
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
Years ended April 30, 2024 and 2023 (In thousands of Canadian dollars, except for “number of common shares”, “number of options” and “per share” information)
5. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
EVERTZ TECHNOLOGIES LIMITED
48
2024 ANNUAL REPORT
Recoverable Amount
Management’s past experience and future expectations of the business performance is used to make a best
estimate of the expected revenue, earnings before interest, taxes, depreciation and amortization and operating cash
flows for a five year period. Subsequent to the fifth year, the present value of the fifth year cash flows is calculated
in perpetuity.
Discount Rate
The discount rate applied is a pre tax rate that reflects the time value of money and risk associated with the business.
The discount rate applied varies depending on the jurisdictions in which the entity operates.
Perpetual Growth Rate
The perpetual growth rate is management’s current assessment of the long-term growth prospect of the Company
in the jurisdictions in which it operates.
Sensitivity Analysis
Management performs a sensitivity analysis on the key assumptions. The sensitivity analysis indicates reasonable
changes to key assumptions will not result in an impairment loss.
8. INTANGIBLES
Cost
Balance as at April 30, 2022
$
3,317
Amortization
(1,238)
Foreign exchange differences
46
Balance as at April 30, 2023
$
2,125
Amortization
(1,028)
Foreign exchange differences
1
Balance as at April 30, 2024
$
1,098
The intangible assets relate to the technology, patents and workforce acquired during prior period acquisitions.
9. INVESTMENTS
April 30,
2024
April 30,
2023
Investments in:
Publically traded companies
-
8,160
Private companies
-
-
$
-
$
8,160
Investments in publicly traded companies are maintained at their fair value and are classified as financial assets
designated at fair value through other comprehensive income. The designation was made upon initial recognition
as the investments were not held for the purpose of trading. All investments in publicly traded companies were
disposed of in fiscal 2024, for proceeds of $7,183. Upon disposal, the Company recognized a loss of $2,704,
including a reclassification of losses previously recognized in other comprehensive earnings of $1,727.
Investments in private companies are maintained at their fair value and are classified as financial assets designated
at fair value through profit and loss. Upon initial recognition the investment in DDSports Inc. was treated under the
equity method due to having significant influence. In fiscal 2023, significant influence was lost and a valuation of
the investment was done to its fair value. During fiscal 2023, an impairment of $3,277 and $2,087 in losses were
recorded under the equity method in recognition of the Company’s share of DDSports Inc.
7. GOODWILL (CONTINUED)
EVERTZ TECHNOLOGIES LIMITED
49
2024 ANNUAL REPORT
10. PROVISIONS
Warranty and
Returns
Lease/
Retirement
Obligations
Total
Balance as at April 30, 2022
$
6,856
$
523 $
7,379
Net (reductions) additions
(2,364)
35
(2,329)
Foreign exchange differences
20
34
54
Balance as at April 30, 2023
$
4,512
$
592 $
5,104
Net additions (reductions)
61
(252)
(191)
Foreign exchange differences
30
3
33
Balance as at April 30, 2024
$
4,603
$
343 $
4,946
Warranty and Returns
The provision relates to estimated future costs associated with standard warranty repairs and returns on hardware
solutions. The provision is based on historical data associated with similar products. The warranty and returns are
expected to be incurred within the next twelve months.
Lease/Retirement Obligations
The provision relates to estimated restoration costs expected to be incurred upon the conclusion of Company leases.
11. LEASE LIABILITIES
April 30,
2024
April 30,
2023
Opening Balance
$
22,887
$
26,848
Additions
4,643
-
Interest
924
961
Lease Payments
(5,250)
(5,244)
Foreign exchange adjustments
12
322
Closing Balance
$
23,216
$
22,887
Less current portion
4,296
4,060
Long term lease obligations
$
18,920
$
18,827
12. CREDIT FACILITIES
The Company has the following credit facilities available:
1. Credit facility of $75 million and a treasury risk management facility up to $10 million available, bearing
interest at prime, subject to certain covenants and secured by all Canadian based assets. As at April 30, 2024,
and April 30, 2023, the Company was in compliance with covenants. There were no borrowings against the
facilities as at April 30, 2024, (April 30, 2023 – $5,928).
2. Credit facility available of $1,359 bearing interest at WIBOR plus 1.4% per annum. There were no borrowings
outstanding under this facility as at April 30, 2024, or 2023.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
Years ended April 30, 2024 and 2023 (In thousands of Canadian dollars, except for “number of common shares”, “number of options” and “per share” information)
EVERTZ TECHNOLOGIES LIMITED
50
2024 ANNUAL REPORT
13. REDEMPTION LIABILITY
April 30,
2024
April 30,
2023
Opening Balance
$
3,711
$
3,423
Amortization
-
57
Change in fair value
33
-
Foreign Exchange Adjustments
67
231
Closing Balance
$
3,811
$
3,711
On October 27, 2020, the Company completed the investment of 73% in the voting share capital of Ease Live
AS (“Ease Live”), who are based in Bergen, Norway. Ease Live, which was formerly part of Sixty AS, is a direct to
consumer interactive graphics company. The non-controlling shareholders held a put option for the remaining
shareholdings, exercisable between November 15, 2022, and December 15, 2022, for a fixed cash price of
$3,730. The option was not exercised. The non-controlling shareholders had another put option for the remaining
shareholdings, that was exercised in December 2023, for a price to be determined through the valuation process.
The put option has been separately valued as a redemption liability, at its estimated fair value as at April 30, 2024.
14. CAPITAL STOCK
Authorized capital stock consists of:
Unlimited number of preferred shares
Unlimited number of common shares
Number of
Common
Shares
Amount
Balance as at April 30, 2022
76,229,696
$
143,502
Cancelled pursuant to NCIB
(83,938)
(158)
Balance as at April 30, 2023
76,145,758
$
143,344
Issued on exercise of stock options
198,875
2,456
Transferred on stock option exercise
-
260
Cancelled pursuant to NCIB
(180,311)
(339)
Balance as at April 30, 2024
76,164,322
$
145,721
Dividends Per Share
During the year, $0.77 in dividends per share, were declared (2023 - 0.74 per share).
Normal Course Issuer Bid
In November 2022, the Company entered into a Normal Course Issuer Bid (“NCIB”) with the TSX to repurchase,
at the Company’s discretion, until November 13, 2023, up to 3,809,810 outstanding common shares on the open
market or as otherwise permitted, subject to normal terms and limitations of such bids. During the year, the Company
purchased and cancelled 173,023 common shares at a weighted average price of $12.55 (2023 – 50,444 common
shares at a weighted average price of $11.32).
In November 2023, the Company entered into a new NCIB with the TSX to repurchase, at the Company’s discretion,
until November 2024, up to 3,802,024 outstanding common shares on the open market or as otherwise permitted,
subject to normal terms and limitations of such bids. During the year, the Company purchased and cancelled 7,288
common shares at a weighted average price of $13.58 (2023-nil).
EVERTZ TECHNOLOGIES LIMITED
51
2024 ANNUAL REPORT
15. REVENUE
2024
2023
Hardware
$
325,745
$
281,199
Reoccurring software, services and other software
188,871
173,379
$
514,616
$
454,578
During the year, the company recognized $46,917 revenue under the long-term contract method (2023 – $48,638).
16. SELLING, ADMINISTRATIVE AND GENERAL EXPENSES
2024
2023
Selling and administrative
$
72,274
$
61,518
Depreciation - selling and administrative
3,644
3,441
General:
Share based compensation (note 19)
548
538
Amortization of intangibles
1,028
1,263
$
77,494
$
66,760
17. RESEARCH AND DEVELOPMENT
2024
2023
Research and development
$
131,043
$
112,380
Depreciation - research and development
3,800
4,747
General:
Share based compensation
4,572
4,124
$
139,415
$
121,251
18. STATEMENT OF CASH FLOWS
Changes in non–cash working capital items
2024
2023
Trade and other receivables
$
22,013
$
(3,475)
Contract assets
(1,522)
(4,634)
Inventories
(3,821)
(23,899)
Prepaid expenses
(543)
(3,765)
Trade and other payables
(13,632)
5,764
Deferred revenue
51,089
(4,440)
Provisions
(158)
(2,275)
$
53,426
$
(36,724)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
Years ended April 30, 2024 and 2023 (In thousands of Canadian dollars, except for “number of common shares”, “number of options” and “per share” information)
EVERTZ TECHNOLOGIES LIMITED
52
2024 ANNUAL REPORT
19. SHARE BASED PAYMENTS
Stock Option Plan
The Company established, in June 2006, a stock option plan to attract, retain, motivate and compensate employees,
officers and eligible directors who are integral to the growth and success of the Company. A number of shares equal
to 10% of the Company’s outstanding common shares are to be reserved for issuance under the stock option plan.
The Board of Directors administers the stock option plan and will determine the terms of any options granted.
The exercise price of an option is to be set by the Board of Directors at the time of grant but shall not be lower than
the market price as defined in the option plan at the time of grant. The term of the option cannot exceed 10 years.
Stock options are currently granted normally fully vest and expire by the end of the fifth year.
The changes in the number of outstanding share options are as follows:
Number of
Options
Weighted
Average
Exercise Price
Balance as at April 30, 2022
5,055,500
$
13.43
Forfeited
(174,500)
12.72
Expired
(92,500)
17.35
Balance as at April 30, 2023
4,788,500
$
13.38
Exercised
(198,875)
12.35
Forfeited
(166,500)
12.67
Expired
(467,500)
15.82
Balance as at April 30, 2024
3,955,625
$
13.18
Stock options outstanding as at April 30, 2024 were:
Exercise Price
Weighted
Average
Exercise Price
Number of
Outstanding
Options
Weighted
Average
Remaining
Contractual
Life
Number of
Options
Exercisable
Weighted
Average
Exercise Price
of Exercisable
Options
$
12.28 - $12.86
$
12.35
3,253,125
1.3
1,951,875
$
12.35
$
14.07
$
14.07
100,000
1.9
60,000
$
14.07
$
16.20
$
16.20
160,000
0.9
128,000
$
16.20
$
17.65 - $17.98
$
17.97
442,500
0.7
354,000
$
17.97
Totals
$
13.18
3,955,625
1.2
2,493,875
$
13.39
Stock options outstanding as at April 30, 2023 were:
Exercise Price
Weighted
Average
Exercise Price
Number of
Outstanding
Options
Weighted
Average
Remaining
Contractual
Life
Number of
Options
Exercisable
Weighted
Average
Exercise Price
of Exercisable
Options
$
12.28 - $12.86
$
12.35
3,603,500
2.3
-
$
-
$
14.07 - $15.80
$
15.37
500,000
1.0
320,000
$
15.70
$
16.08 - $16.20
$
16.17
220,000
1.6
144,000
$
16.16
$
17.24 - $17.98
$
17.94
465,000
1.6
283,000
$
17.93
Totals
$
13.38
4,788,500
2.1
747,000
$
16.63
EVERTZ TECHNOLOGIES LIMITED
53
2024 ANNUAL REPORT
Restricted Share Unit Plan (2016 Plan)
The Company established, in March 2016, a restricted share unit (“RSU-2016”) plan to provide an incentive
to participants, including key executives of the Company, by rewarding such participants with equity-based
compensation. Under the terms of the plan, RSU’s are issued to the participant with a vesting period of three years.
On the vesting date, all RSU’s issued under the 2016 Plan will be redeemed in cash at the fair market value at the
date of vest plus any accrued dividends. The changes in the number of outstanding RSUs under the 2016 Plan are
as follows:
Number of
RSUs
Balance as at April 30, 2022
443,000
Granted
0
Exercised
(371,500)
Forfeited
(4,500)
Balance as at April 30, 2023
67,000
Exercised
(57,000)
Balance as at April 30, 2024
10,000
As at April 30, 2024, the average remaining contractual life for outstanding RSUs under the 2016 Plan
is 0.4 years (2023 – 0.7 years).
Restricted Share Unit Plan (2022 Plan)
The Company established, in June 2022, a new restricted share unit plan (RSU-2022). The purpose of the plan is
to provide an incentive to participants; including key executives of the Company, by rewarding such participants with
equity-based compensation. Under the terms of the plan, the Company will redeem RSUs granted to a participant
under the 2022 Plan through the issuance of one Common Share of the Company for each fully vested RSU. The
Board of Directors administers the equity based restricted share unit plan and will determine the terms of any
restricted share units granted. Restricted share units currently granted normally fully vest and expire by the end
of the fifth year.
A number of restricted share units equal to 10% of the Company’s outstanding common shares at any point in time
are to be reserved for issuance under the equity based restricted share unit plan, less the aggregate number of stock
options granted under the Stock Option Plan described above.
The change in the number of outstanding RSUs under the 2022 Plan are as follows.
Number of
RSUs (2022 Plan)
Balance as at April 30, 2022
-
Granted
1,522,250
Forfeiture
(10,500)
Balance as at April 30, 2023
1,511,750
Granted
30,000
Forfeiture
(47,250)
Balance as at April 30, 2024
1,494,500
As at April 30, 2024, the average remaining contractual life for outstanding RSUs under the 2022
Plan is 2.7 years (2023 - 3.4 years).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
Years ended April 30, 2024 and 2023 (In thousands of Canadian dollars, except for “number of common shares”, “number of options” and “per share” information)
19. SHARE BASED PAYMENTS (CONTINUED)
EVERTZ TECHNOLOGIES LIMITED
54
2024 ANNUAL REPORT
Compensation Expense
Stock Option Plan
The share based compensation expense that has been charged against earnings over the fiscal period is $606
(2023 - $1,265). Compensation expense on grants was calculated using the Black-Scholes option pricing model.
There were no grants completed in fiscal 2024 or 2023.
Expected volatility is based on historical share price volatility over the past five years of the Company. Share based
compensation expense was calculated using a weighted average forfeiture rate of 24% (2023 – 24%).
Restricted Share Unit Plan (2016 Plan)
The share based compensation expense that has been charged against earnings over the fiscal year is $310
(2023 - $858). Share based compensation expense was calculated using a weighted average forfeiture rate of 0%
(2023 - 23%). As at April 30, 2024, the total liability included within trade and other payables is $154 (2023 - $780).
Restricted Share Unit Plan (2022 Plan)
The share base compensation expense that has been charged against earnings over the fiscal year is $4,204
(2023 – $2,539). Compensation expense on grants during the year was calculated using the fair value of the
Company’s share price at the grant date. Share based compensation expense was calculated using a weighted
average forfeiture rate of 11% (2023 – 10%).
20. COMMITMENTS AND CONTINGENCIES
In the normal course of operations, the Company is party to a number of lawsuits, claims and contingencies. Accruals
are made in instances where it is probable that liabilities have been incurred and where such liabilities can be
reasonably estimated. Although it is possible that liabilities may be incurred in instances for which no accruals have
been made, the Company believes the possibility of outflow of cash is remote and thus no additional provisions have
been recognized.
The Company is committed to payments under long term debt agreements and certain lease obligations in Note 11
with minimum annual lease payments as follows:
Redemption
Liabilities
Leases
Payments
Total
2025
$
3,811
$
2,814
$
6,625
2026
-
5,388
5,388
2027
-
5,044
5,044
2028
-
3,797
3,797
2029
-
3,730
3,730
Thereafter
-
2,895
2,895
Balance as at April 30, 2024
$
3,811
$
23,668
$
27,479
Total operating lease expense during the year was $472 (2023 - $489).
The Company has obtained documentary and standby letters of credit aggregating to a total of $11,781
(2023 - $14,360).
19. SHARE BASED PAYMENTS (CONTINUED)
EVERTZ TECHNOLOGIES LIMITED
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2024 ANNUAL REPORT
21. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The Company estimates that the fair value of financial instruments approximates their carrying values. The following
summarizes the significant methods and assumptions used in estimating the fair values of financial instruments:
I. Quoted prices (unadjusted) in active markets for identical assets or liabilities.
II. Inputs other than quoted prices included in level I that are observable for the asset or liability,
either directly or indirectly.
III. Inputs for the asset or liability that are not based on observable market data.
(a) Financial risk management:
The Company, through its financial assets and liabilities, is exposed to various risks. The following analysis provides
a measurement of risks as at April 30, 2024:
Credit Risk
Credit risk is the risk of a financial loss to the Company if a customer or counterparty to a financial instrument fails
to meet its contractual obligations. Financial instruments that potentially subject the Company to concentrations of
credit risk consist of cash and cash equivalents, contract assets and trade and other receivables the total of which
is the maximum exposure to credit risk. The Company performs evaluations of the financial situations of its customers
and uses various controls and processes, such as credit checks and billings in advance to investigate credit risk.
Management does not believe that there is significant credit concentration or risk not already provided for.
The Company sets up an allowance for doubtful accounts using the lifetime expected credit losses related to total
receivables, while factoring in the credit risks of the individual customer and the aging of receivables. Amounts
owing over 90 days are individually evaluated and provided for as an expected credit loss where appropriate in the
allowance for doubtful accounts. When considering the need for provisions in relation to balances past due, the
Company considers forward looking information such as region specific economic factors including industry outlook,
employment, politics, and other market indicators. The Company also takes into consideration customer specific
payment history. The trade and other receivables are presented as follows net of the allowance for doubtful accounts:
April 30, 2024
April 30, 2023
Trade and other receivables
$
87,252
$
109,702
Allowance for doubtful accounts
(2,902)
(2,831)
$
84,350
$
106,871
The change in the allowance for doubtful accounts was as follows:
April 30, 2024
April 30, 2023
Balance at beginning of year
$
2,831
$
2,501
Increase in allowance
897
778
Bad debt recaptured and write-offs
(715)
(629)
Impact of variation in exchange rates
(111)
181
Balance at end of year
$
2,902
$
2,831
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
Years ended April 30, 2024 and 2023 (In thousands of Canadian dollars, except for “number of common shares”, “number of options” and “per share” information)
EVERTZ TECHNOLOGIES LIMITED
56
2024 ANNUAL REPORT
The aging of trade and other receivables, net of the allowance for doubtful accounts was:
April 30, 2024
April 30, 2023
Less than 30 days past billing date
$
31,908
$
44,616
30-60 days past billing date
11,255
21,199
61-90 days past billing date
7,712
7,259
Greater than 90 days past billing date
33,475
33,797
$
84,350
$
106,871
Exchange Rate Risk
The Company transacts a significant portion of its business in U.S. dollars and is therefore exposed to currency
fluctuations.
U.S. dollar financial instruments are as follows:
April 30, 2024
April 30, 2023
Cash and cash equivalents
$
25,181
$
3,248
Trade and other receivables
90,867
87,548
Trade and other payables
(12,389)
(10,433)
$
103,659
$
80,363
Based on the financial instruments as at April 30, 2024, a 5% change in the value of the U.S. dollar would result
in a gain or loss of $5.2 million in earnings before income tax.
Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with its financial
liabilities. The Company's primary source of liquidity is its cash reserves. The Company also maintains certain credit
facilities to support short term funding of operations and trade finance. The Company believes it has sufficient
available funds to meet current and foreseeable financial requirements. The Company expects to settle all current
financial liabilities within the next year. Maturity of lease obligations are disclosed in Note 20.
22. SEGMENTED INFORMATION
The Company reviewed its operations and determined that it operates a single operating segment, the television
broadcast equipment market. The single reportable operating segment derives its revenues from the sale of hardware
and software solutions including related services, training and commissioning.
Revenue
2024
2023
United States
$
320,571
$
306,926
International
176,585
117,469
Canada
17,460
30,183
$
514,616
$
454,578
21. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED)
EVERTZ TECHNOLOGIES LIMITED
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2024 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
Years ended April 30, 2024 and 2023 (In thousands of Canadian dollars, except for “number of common shares”, “number of options” and “per share” information)
April 30, 2024
Property, Plant and
Equipment
Goodwill
Intangible Assets Right-of-Use Assets
United States
$
3,485
$
1,400
$
60
$
3,107
International
9,551
18,369
1,038
3,128
Canada
21,348
1,583
-
14,197
$
34,384
$
21,352
$
1,098
$
20,432
April 30, 2023
Property, Plant and
Equipment
Goodwill
Intangible Assets
Right-of-Use Assets
United States
$
4,114
$
1,411
$
395
$
246
International
9,553
18,339
1,730
3,617
Canada
21,063
1,583
-
16,533
$
34,730
$
21,333
$
2,125
$
20,396
23. RELATED PARTY TRANSACTIONS
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company,
have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the
Company and other related parties are disclosed below.
Related Party Transactions
Two shareholders each indirectly hold a 16% interest in the Company’s leased premises in Ontario. This lease
expires in 2029, with a total of $5,409 committed over the remaining term. During the year, rent paid for the leased
principal premises amounted to $1,081 (2023 – $1,055) with no outstanding amounts due as at April 30, 2024.
On December 1, 2008, the Company entered into a property lease agreement where two shareholders each
indirectly hold a 20% interest in the Company’s leased premises in Ontario. This lease expires in 2028, with a total
of $4,246 committed over the remaining term. During the year, rent paid for the leased principal premises amounted
to $892 (2023 – $877) with no outstanding amounts due as at April 30, 2024.
On May 1, 2009, the Company entered into a property lease agreement where two shareholders each indirectly
hold a 35% interest. This lease expires in 2029, with a total of $2,826 committed over the remaining term. During
the year, rent paid for the leased principal premises amounted to $543 (2023 – $525) with no outstanding amounts
due as at April 30, 2024.
On May 1, 2016, the Company entered into a property lease agreement where two shareholders each hold a 46.6%
interest. This lease expires in 2026, with a total of $2,136 committed over the remaining term. During the year, rent
paid for the leased principal premises amounted to $1,011 (2023 – $1,011) with no outstanding amounts due as
at April 30, 2024.
22. SEGMENTED INFORMATION (CONTINUED)
EVERTZ TECHNOLOGIES LIMITED
58
2024 ANNUAL REPORT
The Company also leases properties where two shareholders indirectly own 100% interest. There were no amounts
owing on the leases as at April 30, 2024. The term of these leases are as follows:
April 30, 2024
Lease
Commencement Date
Lease Expiry
Date
Amount Committed
Over Remaining Term
Rent Paid
2024
Rent Paid
2023
October 2021
September 2026
$
764
$
301
$
292
December 2023
November 2028
$
1,491
$
192
$
152
August 2016
July 2026
$
636
$
273
$
271
These transactions were in the normal course of business and entered into at their respective fair values.
The remuneration of directors and other members of key management personnel for the years ended
April 30, 2024, and April 30, 2023, are as follows:
2024
2023
Short-term salaries and benefits
$
5,090
$
5,010
Share-based payments
-
2,816
$
5,090
$
7,826
The total employee benefit expense was $197,148 (2023 - $162,826).
Subsidiaries:
The Company has the following significant subsidiaries:
Company
% Ownership
Location
Evertz Microsystems Ltd.
100%
Canada
Evertz USA
100%
United States
Evertz UK
100%
United Kingdom
Holdtech Kft.
100%
Hungary
Quintech Electronics & Communications Inc.
100%
United States
Tech Digital Manufacturing Limited
100%
Canada
Truform Metal Fabrication Ltd.
75%
Canada
Ease Live AS
73%
Norway
24. NON-CONTROLLING INTEREST
The Company has subsidiaries with non-controlling interests of 25% of Truform Metal Fabrication Ltd., located in
Canada, and 10% with Studiotech Poland Sp. z.o.o., a subsidiary of Holdtech Kft. located in Poland. Ease Live AS,
located in Norway, also has a non-controlling interest of 27% of Ease Live AS, located in Norway, whose interest
has been separately recorded as a redemption liability (see note 13).
23. RELATED PARTY TRANSACTIONS (CONTINUED)
EVERTZ TECHNOLOGIES LIMITED
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2024 ANNUAL REPORT
The table below summarizes the aggregate financial information relating to the above subsidiaries before eliminating
entries, as no such subsidiary is individually significant.
April 30,
2024
April 30,
2023
Current assets
$
21,170
$
13,697
Non-current assets
14,296
17,122
Current liabilities
3,784
3,028
Non-current liabilities
1,603
114
Equity attributable to shareholders
26,669
24,692
Non-controlling interest
3,410
2,985
April 30,
2024
April 30,
2023
Revenue
$
43,918
$
30,208
Net earnings attributable to:
Shareholders
6,113
2,666
Non-controlling interest
857
523
During the year, $400 (2023 - $425) in dividends were paid to non-controlling interests.
25. CAPITAL DISCLOSURES
The Company’s capital is composed of total equity attributable to shareholders which totals $263,267
(2023 - $243,099) as at April 30, 2024. The Company’s objective in managing capital is to ensure sufficient liquidity
to finance increases in non-cash working capital, capital expenditures for capacity expansions, pursuit of selective
acquisitions and the payment of quarterly dividends. The Company’s strategy on capital risk management has not
changed significantly since April 30, 2024.
The Company takes a conservative approach towards financial leverage and management of financial risk and the
Company currently satisfies their internal requirements.
The Company is not subject to any capital requirements imposed by a regulator.
26. EARNINGS PER SHARE
2024
2023
Weighted average common shares outstanding
76,088,691
76,200,428
Dilutive-effect of stock options
956,167
32,034
Diluted weighted average common shares outstanding
77,044,858
76,232,462
The weighted average number of diluted common shares excludes 702,500 options because they were anti-dilutive
during the period (2023 – 1,612,500).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
Years ended April 30, 2024 and 2023 (In thousands of Canadian dollars, except for “number of common shares”, “number of options” and “per share” information)
24. NON-CONTROLLING INTEREST (CONTINUED)
EVERTZ TECHNOLOGIES LIMITED
60
2024 ANNUAL REPORT
27. INCOME TAXES
The Company’s effective income tax rate differs from the statutory combined Canadian income tax rate as follows:
2024
2023
Expected income tax expense using statutory rates (25%, 2022 - 25%)
$
24,340
$
21,953
Difference in foreign tax rates
(225)
(152)
Benefit arriving from prior year losses
-
(101)
Non-deductible stock based compensation
1,275
1,029
Non-deductible losses
717
1,395
Change in estimates relating to prior periods
397
(459)
Other
(173)
(410)
$
26,331
$
23,255
Benefit arising from a previously unrecognized tax loss has been recognized in the year as a result of a change in
estimated taxable income in future years.
Components of deferred income taxes are summarized as follows:
April 30, 2024
April 30, 2023
Deferred income tax assets (liabilities):
Tax loss carried forward
$
395
$
549
Research and development tax credits
(3,087)
(2,825)
Equipment tax vs accounting basis
6,239
5,604
Non-deductible reserves
3,347
3,411
$
6,894
$
6,739
As at April 30, 2024, the Company had $3,428 in tax losses for which no deferred tax asset has been recognized
in the statement of financial position. Of these losses, $1,166 expire in 2025, while the remaining balance has
no expiry.
28. SUBSEQUENT EVENT
On June 19, 2024, the Company declared a quarterly dividend of $0.195 with a record date of July 2, 2024,
and a payment date of July 10, 2024.
EVERTZ TECHNOLOGIES LIMITED
61
2024 ANNUAL REPORT
5-YEAR FINANCIAL HIGHLIGHTS
(all amounts in thousands, except EPS and share amounts)
Consolidated Statement of Earnings Data
Year Ended April 30,
2024
2023
2022
2021
2020
Sales
$ 514,616
$ 454,578
$
441,016
$ 342,888
$ 436,592
Selling and administrative expenses
72,274
61,518
60,884
49,413
67,597
Research and development expenses
134,843
117,127
102,438
80,187
90,827
Earnings before income taxes
97,358
87,810
97,912
55,845
91,959
Net earnings
71,027
64,555
72,677
41,960
69,172
Fully diluted EPS
0.91
0.84
0.94
0.55
0.90
Consolidated Balance Sheet Data
Year Ended April 30,
2024
2023
2022
2021
2020
Cash and cash equivalents
$
86,325
$
12,468
$
33,902
$
108,771
$
75,025
Total assets
484,722
436,652
420,979
451,793
443,673
Shareholder’s equity
263,267
243,099
230,938
292,734
295,012
Number of common shares
Outstanding
Basic
76,088,691
76,200,428 76,266,341
76,357,895
76,624,706
Fully-diluted
77,044,858
76,232,462 76,570,564
76,403,894
76,642,787
EVERTZ TECHNOLOGIES LIMITED
62
2024 ANNUAL REPORT
DIRECTORS AND EXECUTIVE OFFICERS
Romolo Magarelli
Director, President and Chief Executive Officer
Douglas DeBruin
Executive Chairman
CORPORATE AND SHAREHOLDER INFORMATION
1 Member of the Audit Committee.
2 Member of the Compensation Committee.
Vince Silvestri
Vice-President of Software
Systems
Dan Turow
Senior Vice-President,
Media Distribution and
Chief Information Officer (CIO)
Paulo Francisco
Vice-President of Engineering
Evertz AV Division
Jeff Marks
Vice-President
of Manufacturing
Christopher Colclough 1, 2
Director
Dr. Thomas Pistor 1
Director
Dr. Ian McWalter 1, 2
Director
Brian Campbell
Executive Vice-President,
Business Development
Rakesh Patel
Chief Technology Officer,
Director
Brian Piccioni
Director
Douglas Moore
Chief Financial Officer
Eric Fankhauser
Vice-President,
Product Development
Marsha Garner
Vice-President, Inside Sales
and Administration
Orest Holyk
Vice-President of Sales USA
Jeremy Blythe
Vice-President of Engineering
Media Distribution
Rakesh Jalali
Vice-President of Technology
India
Robert Peter
Vice-President,
International Operations
EVERTZ TECHNOLOGIES LIMITED
63
2024 ANNUAL REPORT
AUDITORS
BDO Canada LLP
360 Oakville Place Drive
Suite 500
Oakville, ON Canada L6H 6K8
T: (289) 881-1111
LEGAL COUNSEL
WeirFoulds LLP
66 Wellington Street West, Suite 4100
P.O. Box 35, TD Bank Tower
Toronto, ON, Canada M5K 1B7
T: (416) 365-1110
EXCHANGE LISTING
The common shares of the Company are listed
on the Toronto Stock Exchange under the symbol ET
INVESTOR RELATIONS
Douglas Moore
Chief Financial Officer
T: (905) 335-7580
email: ir@evertz.com
REGISTRAR AND TRANSFER AGENT
Computershare Investor Services Inc.
100 University Ave., 8th floor, North Tower
Toronto, ON Canada M5J 2Y1
email: service@computershare.com
T: 1-800-736-1755
www.computershare.com
ANNUAL SHAREHOLDERS MEETING
10:00 am Wednesday, October 2, 2024
1160 Sutton Drive
Burlington, ON Canada L7L 6R6
CORPORATE AND SHAREHOLDER INFORMATION (CONTINUED)
EVERTZ TECHNOLOGIES LIMITED
64
2024 ANNUAL REPORT
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