Evertz Technologies Limited

good afternoon ladies and gentlemen and welcome to the first quarter everts conference call at this time all lines are in listen only mode following the presentation we will conduct a question and answer session if at any time during this call you require immediate assistance please press store 0 for the operator this call is being recorded on wednesday september 10th 2025. i would now like to turn the conference over to mr brian campbell executive vice president of business development Please go ahead, Mr. Campbell.

Thank you, Constantine. Good afternoon, everyone, and welcome to Ebert's Technologies Conference call for our fiscal 2026 first quarter ended July 31st, 2025. With Doug Moore, Ebert's Chief Financial Officer, and myself, Brian Campbell. Please note that our financial press release and MD&A will be available on CDAR on and on the company's investor website. Doug and I will comment on the financial results and then open the call to your questions. Turning now to Evert's results, I'll begin by providing a few highlights, and then Doug will provide additional details. First off, sales for the first quarter totaled $112.1 million, including $51.6 million in software and services revenue, representing 46% of total revenue. Our sales base is well diversified with the top 10 customers accounting for approximately 50% of sales during the quarter with no one customer accounting for more than 9% of sales. In fact, we had 114 customer orders of over $200,000. Gross margin in the quarter was 68.8 million or 61.4%. up from 59.4% in the prior year. Net earnings were 11.9 million, up 22% from the prior year, while fully diluted earnings per share were 15 cents for the quarter. Investment and research and development totaled 37 million in the quarter. Everett's working capital was $202.6 million, including cash of $124.3 million as at July 31, 2025. At the end of August, Everett's purchase order backlog was more than $252 million, and shipments during the month of August were $41 million. We attribute the strong financial performance and robust combined shipments and purchase order backlog to channel and video service proliferation, increasing global demand for high-quality video anywhere, anytime, the ongoing technical transition to IP, IT, and cloud-based architectures in the industry, and specifically to the growing adoption of Ebert's IP-based software-defined video networking solutions, Ebert's IT and cloud solutions, our immersive 4K, 8K ultra-high-definition solutions and Everett's state-of-the-art Dreamcatcher IP replay and live production suite with Bravo Studio featuring the iconic Studor Audio. Today, Everett's Board of Directors declared a regular quarterly dividend of 20 cents per share payable on or about September 25th. I'll now hand over to Doug Moore, Everett's Chief Financial Officer, to cover our results in greater detail.

All right, thank you, Brian. Starting with revenue, After a slow start in May of 2025, sales were $112.1 million in the first quarter of fiscal 2026, a slight increase compared to $111.6 million in the first quarter of fiscal 2025. Hardware revenue increased quarter-over-quarter from $55.7 million to $60.5 million, while software services revenue decreased from $55.9 million to $51.6 million in the current quarter. Revenue from the software services segment there represented approximately 46% of the total revenue in the quarter. Looking at regional revenue, quarterly revenues in the U.S. Canadian region were $79.5 million compared to $73.9 million the prior year, while quarterly revenues in the international region were $32.7 million compared to $37.7 million in the prior year. The international segment represented 29% of total sales in the quarter, compared to 34% in the same period last year. Gross margin for the quarter was 61.4%. That's compared to 59.4% in the prior year and slightly above our target range. While the gross margin was above our target range for the second quarter in a row, that's largely being driven by product mix, including a relatively high proportion of higher margin software service revenue in the quarter. Turning to selling and amending expenses, S&A was $18.6 million in the first quarter, an increase of $1 million from the same period last year. And selling and amending expenses as a percentage of revenue were approximately 16.6, as compared to 15.8% for the same period last year. Sequentially, S&A is down approximately $2 million from Q4. That's largely driven by the non-recurrence of NAB, which we attended in April of this year. R&D expenses were $37 million for the first quarter. That represents a $0.3 million decrease over the same period last year. As a percentage of revenue, R&D expenses were 33% compared to 33.5% in the prior year. The higher percent is largely being driven by softer revenue on Q1 this year and last. Investment tax credits for the quarter were $3.3 million. Foreign exchange for the first quarter was a gain of $0.7 million, as compared to a foreign exchange gain of less than $1 million in the first quarter last year. The U.S. dollar closed at approximately 1.38 on July 31st, not significantly different from its closing rate as of April 30th. Turning to discussion of liquidity of the company, cash as of July 31st was $124.3 million, increasing compared to cash of $111.7 million as of April 30th. Working capital was $202.6 million as of July 31st, compared to $206.9 million at the end of April 30th. The company generated cash from operations of $33.5 million. That includes $18 million change in non-cash working capital and current taxes. If the effects from the change in non-cash working capital and current taxes were excluded from the calculation, the company would have generated $15.5 million in cash from operations during the quarter. The company used $0.5 million for investing activities, which was principally driven by the acquisition of capital assets of $1.4 million and partially offset by proceeds of disposals of $900,000. The company used cash in financing activities of $20.2 million, which was principally driven by dividends paid of $15.1 million and the repurchase of capital stock under NCIB plan of $3.8 million which translated to approximately 317,000 shares purchased and canceled in the quarter. Finally, looking at our share capital position as of July 31st, shares at standing were approximately 75.5 million, and options and share-based RSUs at standing were approximately 2.1 million at the end of the quarter. During the quarter, approximately 2.7 million options expired. Weighted average shares outstanding were 75.5 million, and weighted average fully diluted shares were 76.6 million for the period ended July 31, 2025. That concludes the review of our financial results and position for the first quarter. Finally, I would like to remind you that some of the statements presented today are forward-looking, subject to a number of risks and uncertainties, and we refer you to the risk factors described in our annual information form and the official reports filed with the Canadian Securities Commission. Brian, back to yourself.