Evertz- where were they in 2002?

[GlennChan]

I'm looking through Evertz' financial statements and they don't make sense to me.

In 2002, their sales were $25,957K.
In 2006, their sales were $141,119K.
In 2008, their sales were $272,505K.

In the span of 6 years, did their earnings really go up 10 times? Now I was not familiar at all with Evertz in 2002 (e.g. did not go to NAB) so I don't know how much they were selling back then.

Do their numbers make sense to you? (If you were paying attention to Evertz back in 2002.)

*This is not to disparage their products or the financial soundness of the company. I've not seen anything to suggest that either is bad, and I've seen their equipment installed in many facilities.
**I've seen one of their products fail, as does a lot of broadcast equipment from time to time. That is just one data point.

 

[Michael Hastings]

Maybe they merged or acquired other companies

Maybe they merged or acquired other companies

Maybe they merged or acquired other companies, this can sort of instantly increase sales numbers without necessarily doing much to the profit picture.

 

[Stefan Christou]

Maybe they started trading towards the end of the financial year

 

[GlennChan]

If they merged or acquired other companies, they would have to say so in their financial reports. The acquired company would also likely issue a press release, and users would notice that their suppliers have been bought out by Evertz.
In 2005 they acquired quartz electronics.
In 2006 they acquired two companies, the names of which aren't disclosed.
I can't figure out who audited their books in 2002-2006. The 2006 prospectus does not say.

Maybe they started trading towards the end of the financial year

I believe a small portion of the company was IPOed in 2006. There is some financial incentive to make your financial statements look good prior to an IPO, e.g. to make the company look like a growth stock. That way investors will pay more for the company.

Their stellar growth might be possible since Evertz makes good products. But I don't know since I don't know what they were like back in 2002.

- Other:
In 2006, they were depreciating their airplanes at 30%. In 2008, they were depreciating them at 10%.
Higher depreciation rates deflate earnings for that reporting period. Changing the depreciation rates can cause the earnings to growth/shrink (on paper).

In 2006, their airplanes were:
Cost: $8,809K
Accumulated amortization: $4,075
Net book value: $4,734

In 2008:
Cost: $8,806
Accumulated amortization: $3,757
Net book value: $5,049

So apparently, their airplanes were worth more in 2008 than in 2006???