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Share Name | Share Symbol | Market | Type |
---|---|---|---|
EXFO Inc | NASDAQ:EXFO | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 6.245 | 6.24 | 6.26 | 0 | 01:00:00 |
QUEBEC CITY, Jan. 8, 2014 /CNW Telbec/ - EXFO Inc. (NASDAQ: EXFO; TSX: EXF) reported today financial results for the first quarter ended November 30, 2013.
Sales reached US$56.0 million in the first quarter of fiscal 2014 compared to US$59.8 million in the first quarter of 2013 and US$60.9 million in the fourth quarter of 2013.
Bookings attained US$57.9 million in the first quarter of fiscal 2014 compared to US$64.3 million in the same period last year and US$54.0 million in the fourth quarter of 2013. The company's book-to-bill ratio was 1.03 in the first quarter of 2014.
Gross margin* amounted to 62.2% of sales in the first quarter of fiscal 2014 compared to 60.5% in the first quarter of 2013 and 62.9% in the fourth quarter of 2013.
IFRS net loss in the first quarter of fiscal 2014 totaled US$0.7 million, or US$0.01 per share, compared to a net loss of US$1.6 million, or US$0.03 per share, in the same period last year and net earnings of US$3.8 million, or US$0.06 per diluted share, in the fourth quarter of 2013. IFRS net loss in the first quarter of 2014 included US$1.1 million in after-tax amortization of intangible assets, a foreign exchange gain of US$0.8 million and US$0.5 million in stock-based compensation costs.
Adjusted EBITDA** totaled US$2.3 million, or 4.1% of sales, in the first quarter of fiscal 2014 compared to US$2.7 million, or 4.5% of sales, in the first quarter of 2013 and US$7.1 million, or 11.6% of sales, in the fourth quarter of 2013.
"Both EMEA and A-PAC delivered year-over-year revenue growth. We witnessed lower bookings and revenues than expected in the Americas due to order delays and lower spending levels, especially among key customers. Our growth in EMEA and A-PAC, together with much stronger engagement with Americas' largest operators, demonstrates that our portfolio of innovative solutions is ideally positioned to help resolve the most critical deployment, turn-up and operation issues related to investments in next-generation 4G/LTE, small cell and 100G networks that will assuredly take place," said Germain Lamonde, EXFO's Chairman, President and CEO.
Selected Financial Information
(In thousands of US dollars)
Q1 2014 | Q4 2013 | Q1 2013 | |||||||
Sales | $ | 56,003 | $ | 60,888 | $ | 59,821 | |||
Gross margin* | $ | 34,818 | $ | 38,314 | $ | 36,164 | |||
62.2% | 62.9% | 60.5% | |||||||
Other selected information: | |||||||||
IFRS net earnings (loss) | $ | (747) | $ | 3,802 | $ | (1,638) | |||
Amortization of intangible assets | $ | 1,182 | $ | 1,173 | $ | 1,962 | |||
Stock-based compensation costs | $ | 463 | $ | 437 | $ | 448 | |||
Net income tax effect of the above items | $ | (67) | $ | (64) | $ | (67) | |||
Foreign exchange gain | $ | 802 | $ | 1,312 | $ | 756 | |||
Adjusted EBITDA** | $ | 2,292 | $ | 7,052 | $ | 2,720 |
Operating Expenses
Selling and administrative expenses totaled US$21.7 million, or 38.8% of
sales in the first quarter of fiscal 2014 compared to US$22.3 million,
or 37.3% of sales, in the same period last year and US$21.4 million, or
35.1% of sales, in the fourth quarter of 2013.
Gross research and development expenses amounted to US$13.3 million, or 23.8% of sales, in the first quarter of fiscal 2014 compared to US$13.9 million, or 23.2% of sales, in the first quarter of 2013 and US$12.5 million, or 20.6% of sales, in the fourth quarter of 2013.
Net R&D expenses totaled US$11.3 million, or 20.1% of sales, in the first quarter of fiscal 2014 compared to US$11.6 million, or 19.4% of sales, in the same period last year and US$10.3 million, or 16.9% of sales, in the fourth quarter of 2013.
First-Quarter Highlights
Business Outlook
EXFO forecasts sales between US$53.0 million and US$58.0 million for the
second quarter of fiscal 2014, while IFRS net loss is expected to range
between -US$0.05 and -US$0.01 per share. Net loss includes US$0.02 per
share in after-tax amortization of intangible assets and stock-based
compensation costs.
This guidance was established by management based on existing backlog as of the date of this press release, seasonality, expected bookings for the remaining of the quarter, as well as exchange rates as of the day of this press release.
Conference Call and Webcast
EXFO will host a conference call today at 5 p.m. (Eastern time) to
review its financial results for the first quarter of fiscal 2014. To
listen to the conference call and participate in the question period
via telephone, dial 1-416-641-6700. Germain Lamonde, Chairman, President and CEO, and Pierre Plamondon, CPA,
CA, Vice-President of Finance and Chief Financial Officer, will
participate in the call. An audio replay of the conference call will be
available one hour after the event until 7 p.m. on January 15, 2014.
The replay number is 1-402-977-9141 and the reservation number
is 21693946. The audio Webcast and replay of the conference call will
also be available on EXFO's Website at www.EXFO.com, under the Investors section.
About EXFO
Listed on the NASDAQ and TSX stock exchanges, EXFO is among the leading
providers of next-generation test and service assurance solutions for
wireline and wireless network operators and equipment manufacturers in
the global telecommunications industry. The company offers innovative
solutions for the development, installation, management and maintenance
of converged, IP fixed and mobile networks—from the core to the edge.
Key technologies supported include 3G, 4G/LTE, IMS, Ethernet, OTN,
FTTx, VDSL2, ADSL2+ and various optical technologies accounting for
more than 35% of the portable fiber-optic test market. EXFO has a staff
of approximately 1600 people in 25 countries, supporting more than 2000
customers worldwide. For more information, visit www.EXFO.com and follow us on the EXFO Blog, Twitter, LinkedIn, Facebook, Google+ and YouTube.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act of 1995,
and we intend that such forward-looking statements be subject to the
safe harbors created thereby. Forward-looking statements are statements
other than historical information or statements of current condition.
Words such as may, will, expect, believe, anticipate, intend, could,
estimate, continue, or the negative or comparable terminology are
intended to identify forward-looking statements. In addition,
any statements that refer to expectations, projections or other
characterizations of future events and circumstances are considered
forward-looking statements. They are not guarantees of future
performance and involve risks and uncertainties. Actual results may
differ materially from those in forward-looking statements due to
various factors including macro-economic uncertainty as well as capital
spending and network deployment levels in the telecommunications
industry (including our ability to quickly adapt cost structures with
anticipated levels of business and our ability to manage inventory
levels with market demand); future economic, competitive, financial
and market conditions; consolidation in the global telecommunications
test and service assurance industry and increased competition among
vendors; limited visibility with regards to customer orders and the
timing of such orders; fluctuating exchange rates; concentration of
sales; timely release and market acceptance of our new products and
other upcoming products; our ability to successfully integrate our
acquired and to-be-acquired businesses; our ability to successfully
expand international operations; and the retention of key technical and
management personnel. Assumptions relating to the foregoing involve
judgments and risks, all of which are difficult or impossible to
predict and many of which are beyond our control. Other risk factors
that may affect our future performance and operations are detailed
in our Annual Report, on Form 20-F, and our other filings with the
U.S. Securities and Exchange Commission and the Canadian securities
commissions. We believe that the expectations reflected in the
forward-looking statements are reasonable based on information
currently available to us, but we cannot assure you that
the expectations will prove to have been correct. Accordingly, you
should not place undue reliance on these forward-looking statements.
These statements speak only as of the date of this document. Unless
required by law or applicable regulations, we undertake no obligation
to revise or update any of them to reflect events or circumstances that
occur after the date of this document.
Non-IFRS Measures
EXFO provides non-IFRS measures (gross margin* and adjusted EBITDA**) as
supplemental information regarding its operational performance. The
company uses these measures for the purpose of evaluating historical
and prospective financial performance, as well as its performance
relative to competitors. These measures also help the company to plan
and forecast for future periods as well as to make operational and
strategic decisions. EXFO believes that providing this information, in
addition to IFRS measures, allows investors to see the company's
results through the eyes of management, and to better understand its
historical and future financial performance.
The presentation of this additional information is not prepared in accordance with IFRS. Therefore, the information may not necessarily be comparable to that of other companies and should be considered as a supplement to, not a substitute for, the corresponding measures calculated in accordance with IFRS.
* | Gross margin represents sales less cost of sales, excluding depreciation and amortization. |
** | Adjusted EBITDA represents net earnings (loss) before interest, income taxes, depreciation and amortization, stock-based compensation costs and foreign exchange gain. |
The following table summarizes the reconciliation of adjusted EBITDA to IFRS net earnings (loss), in thousands of US dollars:
Adjusted EBITDA
Q1 2014 | Q4 2013 | Q1 2013 | ||||||
IFRS net earnings (loss) for the period | $ | (747) | $ | 3,802 | $ | (1,638) | ||
Add (deduct): | ||||||||
Depreciation of property, plant and equipment | 1,275 | 1,446 | 1,605 | |||||
Amortization of intangible assets | 1,182 | 1,173 | 1,962 | |||||
Interest income | (27) | (37) | (33) | |||||
Income taxes | 948 | 1,543 | 1,132 | |||||
Stock-based compensation costs | 463 | 437 | 448 | |||||
Foreign exchange gain | (802) | (1,312) | (756) | |||||
Adjusted EBITDA for the period | $ | 2,292 | $ | 7,052 | $ | 2,720 | ||
Adjusted EBITDA in percentage of sales | 4.1% | 11.6% | 4.5% |
EXFO Inc.
Condensed Unaudited Interim Consolidated Balance Sheets
(in thousands of US dollars)
As at November 30, 2013 |
As at August 31, 2013 |
|||||
Assets | ||||||
Current assets | ||||||
Cash | $ | 47,765 | $ | 45,386 | ||
Short-term investments | 4,837 | 4,868 | ||||
Accounts receivable | ||||||
Trade | 51,417 | 50,117 | ||||
Other | 2,765 | 2,778 | ||||
Income taxes and tax credits recoverable | 4,821 | 6,525 | ||||
Inventories | 37,653 | 35,705 | ||||
Prepaid expenses | 2,367 | 2,561 | ||||
151,625 | 147,940 | |||||
Tax credits recoverable | 41,924 | 41,719 | ||||
Property, plant and equipment | 44,834 | 45,523 | ||||
Intangible assets | 6,787 | 7,543 | ||||
Goodwill | 27,082 | 27,313 | ||||
Deferred income taxes | 10,539 | 10,807 | ||||
Other assets | 681 | 693 | ||||
$ | 283,472 | $ | 281,538 | |||
Liabilities | ||||||
Current liabilities | ||||||
Accounts payable and accrued liabilities | $ | 32,306 | $ | 26,253 | ||
Provisions | 728 | 756 | ||||
Income taxes payable | 331 | 679 | ||||
Current portion of long-term debt | 304 | 296 | ||||
Deferred revenue | 7,869 | 9,467 | ||||
41,538 | 37,451 | |||||
Deferred revenue | 3,703 | 3,932 | ||||
Deferred income taxes | 3,525 | 3,226 | ||||
Other liabilities | 474 | 477 | ||||
49,240 | 45,086 | |||||
Shareholders' equity | ||||||
Share capital | 111,378 | 109,837 | ||||
Contributed surplus | 16,168 | 17,186 | ||||
Retained earnings | 112,105 | 112,852 | ||||
Accumulated other comprehensive loss | (5,419) | (3,423) | ||||
234,232 | 236,452 | |||||
$ | 283,472 | $ | 281,538 |
EXFO Inc.
Condensed Unaudited Interim Consolidated Statements of Earnings
(in thousands of US dollars, except share and per share data)
Three months ended November 30, |
|||||
2013 | 2012 | ||||
Sales | $ | 56,003 | $ | 59,821 | |
Cost of sales (1) | 21,185 | 23,657 | |||
Selling and administrative | 21,708 | 22,290 | |||
Net research and development | 11,281 | 11,602 | |||
Depreciation of property, plant and equipment | 1,275 | 1,605 | |||
Amortization of intangible assets | 1,182 | 1,962 | |||
Interest income | (27) | (33) | |||
Foreign exchange gain | (802) | (756) | |||
Earnings (loss) before income taxes | 201 | (506) | |||
Income taxes | 948 | 1,132 | |||
Net loss for the period | $ | (747) | $ | (1,638) | |
Basic and diluted net loss per share | $ | (0.01) | $ | (0.03) | |
Basic and diluted weighted average number of shares outstanding (000's) | 60,217 | 60,389 | |||
(1) The cost of sales is exclusive of depreciation and amortization, shown separately. |
EXFO Inc.
Condensed Unaudited Interim Consolidated Statements of Comprehensive
Loss
(in thousands of US dollars)
Three months ended November 30, |
||||||
2013 | 2012 | |||||
Net loss for the period | $ | (747) | $ | (1,638) | ||
Other comprehensive income (loss), net of income taxes | ||||||
Items that will not be reclassified subsequently to net earnings | ||||||
Foreign currency translation adjustment | (1,948) | (1,708) | ||||
Items that may be reclassified subsequently to net earnings | ||||||
Unrealized gains/losses on forward exchange contracts | (240) | (83) | ||||
Reclassification of realized gains/losses on forward exchange contracts in net loss | 174 | (199) | ||||
Deferred income tax effect of gains/losses on forward exchange contracts | 18 | 76 | ||||
Other comprehensive loss | (1,996) | (1,914) | ||||
Comprehensive loss for the period | $ | (2,743) | $ | (3,552) |
EXFO Inc.
Condensed Unaudited Interim Consolidated Statements of Changes in
Shareholders' Equity
(in thousands of US dollars)
Three months ended November 30, 2012 | |||||||||||||||
Share Capital |
Contributed Surplus |
Retained earnings |
Accumulated other comprehensive income |
Total shareholders' equity |
|||||||||||
Balance as at September 1, 2012 | $ | 110,965 | $ | 17,298 | $ | 111,511 | $ | 13,507 | $ | 253,281 | |||||
Exercise of stock options | 51 | - | - | - | 51 | ||||||||||
Redemption of share capital | (793) | (180) | - | - | (973) | ||||||||||
Reclassification of stock-based compensation costs | 612 | (612) | - | - | - | ||||||||||
Stock-based compensation costs | - | 444 | - | - | 444 | ||||||||||
Net loss for the period | - | - | (1,638) | - | (1,638) | ||||||||||
Other comprehensive loss | |||||||||||||||
Foreign currency translation adjustment | - | - | - | (1,708) | (1,708) | ||||||||||
Changes in unrealized gains on forward exchange contracts, net of deferred income taxes of $76 | - | - | - | (206) | (206) | ||||||||||
Total comprehensive loss for the period | - | - | (1,638) | (1,914) | (3,552) | ||||||||||
Balance as at November 30, 2012 | $ | 110,835 | $ | 16,950 | $ | 109,873 | $ | 11,593 | $ | 249,251 | |||||
Three months ended November 30, 2013 | |||||||||||||||
Share Capital |
Contributed Surplus |
Retained earnings |
Accumulated other comprehensive loss |
Total shareholders' equity |
|||||||||||
Balance as at September 1, 2013 | $ | 109,837 | $ | 17,186 | $ | 112,852 | $ | (3,423) | $ | 236,452 | |||||
Exercise of stock options | 106 | - | - | - | 106 | ||||||||||
Reclassification of stock-based compensation costs | 1,435 | (1,435) | - | - | - | ||||||||||
Stock-based compensation costs | - | 417 | - | - | 417 | ||||||||||
Net loss for the period | - | - | (747) | - | (747) | ||||||||||
Other comprehensive loss | |||||||||||||||
Foreign currency translation adjustment | - | - | - | (1,948) | (1,948) | ||||||||||
Changes in unrealized losses on forward exchange contracts, net of deferred income taxes of $18 | - | - | - | (48) | (48) | ||||||||||
Total comprehensive loss for the period | - | - | (747) | (1,996) | (2,743) | ||||||||||
Balance as at November 30, 2013 | $ | 111,378 | $ | 16,168 | $ | 112,105 | $ | (5,419) | $ | 234,232 |
EXFO Inc.
Condensed Unaudited Interim Consolidated Statements of Cash Flows
(in thousands of US dollars)
Three months ended November 30, |
||||||
2013 | 2012 | |||||
Cash flows from operating activities | ||||||
Net loss for the period | $ | (747) | $ | (1,638) | ||
Add (deduct) items not affecting cash | ||||||
Changes in discount on short-term investments | - | 2 | ||||
Stock-based compensation costs | 463 | 448 | ||||
Depreciation and amortization | 2,457 | 3,567 | ||||
Deferred revenue | (1,752) | (1,531) | ||||
Deferred income taxes | 625 | 733 | ||||
Changes in foreign exchange gain/loss | (108) | (23) | ||||
938 | 1,558 | |||||
Changes in non-cash operating items | ||||||
Accounts receivable | (1,657) | (8,104) | ||||
Income taxes and tax credits | 743 | (1,873) | ||||
Inventories | (2,312) | (160) | ||||
Prepaid expenses | 171 | 359 | ||||
Other assets | 6 | - | ||||
Accounts payable, accrued liabilities and provisions | 5,485 | 3,637 | ||||
Other liabilities | (26) | (195) | ||||
3,348 | (4,778) | |||||
Cash flows from investing activities | ||||||
Additions to short-term investments | (9,781) | (24,533) | ||||
Proceeds from disposal and maturity of short-term investments | 9,772 | 24,527 | ||||
Additions to capital assets | (701) | (1,989) | ||||
(710) | (1,995) | |||||
Cash flows from financing activities | ||||||
Exercise of stock options | 106 | 51 | ||||
Redemption of share capital | - | (973) | ||||
106 | (922) | |||||
Effect of foreign exchange rate changes on cash | (365) | (355) | ||||
Change in cash | 2,379 | (8,050) | ||||
Cash - Beginning of the period | 45,386 | 58,868 | ||||
Cash - End of the period | $ | 47,765 | $ | 50,818 |
SOURCE EXFO inc.
Copyright 2014 Canada NewsWire
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