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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 |
Form 20-F ☑
|
Form 40-F □
|
Yes □
|
No ☑
|
◾
|
Sales reached US$71.5 million
|
◾
|
Bookings attained US$69.0 million
|
◾
|
IFRS net earnings totaled US$3.6 million, US$0.06 per share
|
◾
|
Adjusted EBITDA amounted to US$9.9 million, 13.9% of sales
|
•
|
Sales. Sales decreased 2.8% year-over-year in the first quarter of 2021 mainly due to the impact of the coronavirus pandemic, which was partially offset by stronger year-end calendar spending on the
part of communications service providers. Test and Measurement (T&M) sales dropped 9.8% from a record US$55.9 million in first quarter of 2020, while Service Assurance, Systems and Services (SASS) sales increased 18.6% year-over-year.
Sales in Europe, Middle East and Africa (EMEA) and Asia-Pacific improved 23.3% and 9.2% year-over-year, respectively, while sales in the Americas fell 20.4%. EXFO’s top customer accounted for 4.3% of sales, while the top three
represented 12.6%.
|
•
|
Profitability. IFRS net earnings totaled US$3.6 million, or US$0.06 per share, in the first quarter of 2021, while adjusted EBITDA amounted to US$9.9 million, or 13.9% of sales. Net earnings included
an after-tax wage subsidy of US$1.4 million under the Canada emergency wage subsidy program to help qualifying businesses alleviate the effects of the pandemic, as well as an after-tax insurance recovery of US$2.5 million related to the
loss of assets.
|
Three months ended
November 30,
|
||||||||
2020
|
2019
|
|||||||
Test and measurement sales
|
$
|
50,473
|
$
|
55,947
|
||||
Service assurance, systems and services sales
|
21,046
|
17,749
|
||||||
Foreign exchange losses on forward exchange contracts
|
(7
|
)
|
(145
|
)
|
||||
Total sales
|
$
|
71,512
|
$
|
73,551
|
||||
Test and measurement bookings
|
$
|
51,248
|
$
|
55,009
|
||||
Service assurance, systems and services bookings
|
17,802
|
15,049
|
||||||
Foreign exchange losses on forward exchange contracts
|
(7
|
)
|
(145
|
)
|
||||
Total bookings
|
$
|
69,043
|
$
|
69,913
|
||||
Book-to-bill ratio (bookings/sales)
|
0.97
|
0.95
|
||||||
Gross margin before depreciation and amortization*
|
$
|
41,643
|
$
|
43,310
|
||||
58.2
|
%
|
58.9
|
%
|
|||||
Other selected information:
|
||||||||
IFRS net earnings (loss)
|
$
|
3,554
|
$
|
(63
|
)
|
|||
Amortization of intangible assets
|
$
|
2,549
|
$
|
1,632
|
||||
Stock-based compensation costs
|
$
|
568
|
$
|
487
|
||||
Restructuring charges
|
$
|
543
|
$
|
–
|
||||
Net income tax effect of the above items
|
$
|
(530
|
)
|
$
|
(249
|
)
|
||
Foreign exchange loss
|
$
|
246
|
$
|
126
|
||||
Adjusted EBITDA*
|
$
|
9,949
|
$
|
7,544
|
Three months ended
November 30,
|
||||||||
2020
|
2019
|
|||||||
IFRS net earnings (loss) for the period
|
$
|
3,554
|
$
|
(63
|
)
|
|||
Add (deduct):
|
||||||||
Depreciation and amortization
|
4,723
|
3,926
|
||||||
Interest and other (income) expenses
|
(1,866
|
)
|
399
|
|||||
Income taxes
|
2,181
|
2,669
|
||||||
Stock-based compensation costs
|
568
|
487
|
||||||
Restructuring charges
|
543
|
–
|
||||||
Foreign exchange loss
|
246
|
126
|
||||||
Adjusted EBITDA for the period
|
$
|
9,949
|
$
|
7,544
|
||||
Adjusted EBITDA in percentage of sales
|
13.9
|
%
|
10.3
|
%
|
As at
November 30,
2020
|
As at
August 31,
2020
|
|||||||
Assets
|
||||||||
Current assets
|
||||||||
Cash
|
$
|
15,392
|
$
|
32,818
|
||||
Short-term investments
|
1,106
|
919
|
||||||
Accounts receivable
|
||||||||
Trade
|
55,541
|
56,291
|
||||||
Other
|
6,090
|
4,055
|
||||||
Income taxes and tax credits recoverable
|
2,337
|
4,203
|
||||||
Inventories
|
41,769
|
38,865
|
||||||
Prepaid expenses
|
5,422
|
5,631
|
||||||
Other assets
|
4,009
|
5,493
|
||||||
131,666
|
148,275
|
|||||||
Tax credits recoverable
|
49,961
|
48,812
|
||||||
Property, plant and equipment
|
39,303
|
39,722
|
||||||
Lease right-of-use assets
|
9,228
|
10,758
|
||||||
Intangible assets
|
15,481
|
17,616
|
||||||
Goodwill
|
40,451
|
40,290
|
||||||
Deferred income tax assets
|
4,147
|
3,633
|
||||||
Other assets
|
1,521
|
1,548
|
||||||
$
|
291,758
|
$
|
310,654
|
|||||
Liabilities
|
||||||||
Current liabilities
|
||||||||
Bank loan
|
$
|
16,314
|
$
|
32,737
|
||||
Accounts payable and accrued liabilities
|
39,405
|
41,348
|
||||||
Provisions
|
2,333
|
3,792
|
||||||
Income taxes payable
|
242
|
43
|
||||||
Deferred revenue
|
24,345
|
25,785
|
||||||
Other liabilities
|
4,040
|
4,032
|
||||||
Current portion of lease liabilities (note 7)
|
2,870
|
3,249
|
||||||
Current portion of long-term debt (note 8)
|
1,880
|
2,076
|
||||||
91,429
|
113,062
|
|||||||
Provisions
|
2,784
|
2,782
|
||||||
Deferred revenue
|
8,887
|
8,858
|
||||||
Lease liabilities (note 7)
|
6,715
|
7,334
|
||||||
Long-term debt (note 8)
|
1,759
|
2,144
|
||||||
Deferred income tax liabilities
|
2,925
|
3,760
|
||||||
Other liabilities
|
144
|
151
|
||||||
114,643
|
138,091
|
|||||||
Shareholders’ equity
|
||||||||
Share capital (note 9)
|
94,190
|
94,024
|
||||||
Contributed surplus
|
19,724
|
19,680
|
||||||
Retained earnings
|
106,187
|
102,633
|
||||||
Accumulated other comprehensive loss
|
(42,986
|
)
|
(43,774
|
)
|
||||
177,115
|
172,563
|
|||||||
$
|
291,758
|
$
|
310,654
|
Three months ended
November 30,
|
||||||||
2020
|
2019
|
|||||||
Sales
|
$
|
71,512
|
$
|
73,551
|
||||
Cost of sales (1)
|
29,869
|
30,241
|
||||||
Selling and administrative
|
21,606
|
24,504
|
||||||
Net research and development
|
11,199
|
11,749
|
||||||
Depreciation of property, plant and equipment
|
1,341
|
1,443
|
||||||
Depreciation of lease right-of-use assets
|
833
|
851
|
||||||
Amortization of intangible assets
|
2,549
|
1,632
|
||||||
Interest and other (income) expense (note 10)
|
(1,866
|
)
|
399
|
|||||
Foreign exchange loss
|
246
|
126
|
||||||
Earnings before income taxes
|
5,735
|
2,606
|
||||||
Income taxes (note 11)
|
2,181
|
2,669
|
||||||
Net earnings (loss) for the period
|
$
|
3,554
|
$
|
(63
|
)
|
|||
Basic and diluted net earnings (loss) per share
|
$
|
0.06
|
$
|
(0.00
|
)
|
|||
Basic weighted average number of shares outstanding (000’s)
|
55,749
|
55,439
|
||||||
Diluted weighted average number of shares outstanding (000’s) (note 12)
|
57,023
|
55,439
|
(1)
|
The cost of sales is exclusive of depreciation and amortization, shown separately.
|
Three months ended
November 30,
|
||||||||
2020
|
2019
|
|||||||
Net earnings (loss) for the period
|
$
|
3,554
|
$
|
(63
|
)
|
|||
Other comprehensive income (loss), net of income taxes
|
||||||||
Items that may be reclassified subsequently to net earnings (loss)
|
||||||||
Foreign currency translation adjustment
|
722
|
561
|
||||||
Unrealized gains/losses on forward exchange contracts
|
256
|
(35
|
)
|
|||||
Reclassification of realized gains/losses on forward exchange contracts in net earnings (loss)
|
(156
|
)
|
183
|
|||||
Deferred income tax effect of gains/losses on forward exchange contracts
|
(34
|
)
|
(30
|
)
|
||||
Other comprehensive income
|
788
|
679
|
||||||
Comprehensive income for the period
|
$
|
4,342
|
$
|
616
|
Three months ended November 30, 2019
|
||||||||||||||||||||
Share
capital
|
Contributed surplus
|
Retained earnings
|
Accumulated other comprehensive loss
|
Total
shareholders’ equity
|
||||||||||||||||
Balance as at September 1, 2019
|
$
|
92,706
|
$
|
19,196
|
$
|
112,173
|
$
|
(51,511
|
)
|
$
|
172,564
|
|||||||||
Reclassification of stock-based compensation costs (note 9)
|
861
|
(861
|
)
|
–
|
–
|
–
|
||||||||||||||
Redemption of share capital (note 9)
|
(212
|
)
|
(13
|
)
|
–
|
–
|
(225
|
)
|
||||||||||||
Stock-based compensation costs
|
–
|
494
|
–
|
–
|
494
|
|||||||||||||||
Net loss for the period
|
–
|
–
|
(63
|
)
|
–
|
(63
|
)
|
|||||||||||||
Other comprehensive income
|
||||||||||||||||||||
Foreign currency translation adjustment
|
–
|
–
|
–
|
561
|
561
|
|||||||||||||||
Changes in unrealized gains/losses on forward exchange contracts, net of deferred income taxes of $30
|
–
|
–
|
–
|
118
|
118
|
|||||||||||||||
Total comprehensive income for the period
|
616
|
|||||||||||||||||||
Balance as at November 30, 2019
|
$
|
93,355
|
$
|
18,816
|
$
|
112,110
|
$
|
(50,832
|
)
|
$
|
173,449
|
Three months ended November 30, 2020
|
||||||||||||||||||||
Share
capital
|
Contributed surplus
|
Retained earnings
|
Accumulated other comprehensive loss
|
Total
shareholders’ equity
|
||||||||||||||||
Balance as at September 1, 2020
|
$
|
94,024
|
$
|
19,680
|
$
|
102,633
|
$
|
(43,774
|
)
|
$
|
172,563
|
|||||||||
Reclassification of stock-based compensation costs (note 9)
|
704
|
(704
|
)
|
–
|
–
|
–
|
||||||||||||||
Redemption of share capital (note 9)
|
(538
|
)
|
158
|
–
|
–
|
(380
|
)
|
|||||||||||||
Stock-based compensation costs
|
–
|
590
|
–
|
–
|
590
|
|||||||||||||||
Net earnings for the period
|
–
|
–
|
3,554
|
–
|
3,554
|
|||||||||||||||
Other comprehensive income
|
||||||||||||||||||||
Foreign currency translation adjustment
|
–
|
–
|
–
|
722
|
722
|
|||||||||||||||
Changes in unrealized gains/losses on forward exchange contracts, net of deferred income taxes of $34
|
–
|
–
|
–
|
66
|
66
|
|||||||||||||||
Total comprehensive income for the period
|
4,342
|
|||||||||||||||||||
Balance as at November 30, 2020
|
$
|
94,190
|
$
|
19,724
|
$
|
106,187
|
$
|
(42,986
|
)
|
$
|
177,115
|
Three months ended
November 30,
|
||||||||
2020
|
2019
|
|||||||
Cash flows from operating activities
|
||||||||
Net earnings (loss) for the period
|
$
|
3,554
|
$
|
(63
|
)
|
|||
Add (deduct) items not affecting cash
|
||||||||
Stock-based compensation costs
|
568
|
487
|
||||||
Depreciation and amortization
|
4,723
|
3,926
|
||||||
Write-off of capital assets
|
10
|
216
|
||||||
Deferred revenue
|
(1,600
|
)
|
(4,372
|
)
|
||||
Deferred income taxes
|
(1,318
|
)
|
(442
|
)
|
||||
Changes in foreign exchange gain/loss
|
212
|
(21
|
)
|
|||||
6,149
|
(269
|
)
|
||||||
Changes in non-cash operating items
|
||||||||
Accounts receivable
|
(831
|
)
|
72
|
|||||
Income taxes and tax credits
|
1,220
|
516
|
||||||
Inventories
|
(2,605
|
)
|
(3,493
|
)
|
||||
Prepaid expenses
|
579
|
378
|
||||||
Other assets
|
1,391
|
35
|
||||||
Accounts payable, accrued liabilities and provisions
|
(3,833
|
)
|
(3,693
|
)
|
||||
Other liabilities
|
(8
|
)
|
(16
|
)
|
||||
2,062
|
(6,470
|
)
|
||||||
Cash flows from investing activities
|
||||||||
Additions to short-term investments
|
(230
|
)
|
(147
|
)
|
||||
Disposal of short-term investments
|
30
|
563
|
||||||
Purchases of capital assets
|
(1,111
|
)
|
(2,040
|
)
|
||||
(1,311
|
)
|
(1,624
|
)
|
|||||
Cash flows from financing activities
|
||||||||
Bank loan
|
(16,338
|
)
|
8,354
|
|||||
Repayment of lease liabilities
|
(833
|
)
|
(844
|
)
|
||||
Repayment of long-term debt
|
(581
|
)
|
(676
|
)
|
||||
Redemption of share capital
|
(380
|
)
|
(225
|
)
|
||||
(18,132
|
)
|
6,609
|
||||||
Effect of foreign exchange rate changes on cash
|
(45
|
)
|
12
|
|||||
Change in cash
|
(17,426
|
)
|
(1,473
|
)
|
||||
Cash – Beginning of the period
|
32,818
|
16,518
|
||||||
Cash – End of the period
|
$
|
15,392
|
$
|
15,045
|
||||
Supplementary information
|
||||||||
Income taxes cash outflow
|
$
|
372
|
$
|
741
|
1
|
Nature of Activities and Incorporation
|
2
|
Basis of Presentation
|
3
|
Business Combination
|
4
|
Government Grants
|
5
|
Restructuring Charges
|
Balance – Beginning of the period
|
$
|
3,626
|
||
Additions (1)
|
543
|
|||
Payments
|
(1,742
|
)
|
||
Balance – End of the period
|
$
|
2,427
|
(1)
|
Additions are recorded in selling and administrative expenses in the condensed unaudited consolidated statement of earnings.
|
6
|
Financial Instruments
|
As at November 30, 2020
|
As at August 31, 2020
|
|||||||||||||||
Level 1
|
Level 2
|
Level 1
|
Level 2
|
|||||||||||||
Financial assets
|
||||||||||||||||
Short-term investments
|
$
|
1,106
|
$
|
–
|
$
|
919
|
$
|
–
|
||||||||
Forward exchange contracts
|
$
|
–
|
$
|
1,708
|
$
|
–
|
$
|
1,587
|
||||||||
Financial liabilities
|
||||||||||||||||
Forward exchange contracts
|
$
|
–
|
$
|
42
|
$
|
–
|
$
|
110
|
Expiry dates
|
Contractual
amounts
|
Weighted average
contractual forward rates
|
|||||||
December 2020 to August 2021
|
$
|
26,800
|
1.3329
|
||||||
September 2021 to August 2022
|
18,800
|
1.3492
|
|||||||
September 2022 to February 2023
|
3,600
|
1.3324
|
|||||||
Total
|
$
|
49,200
|
1.3391
|
Expiry dates
|
Contractual
amount
|
Weighted average
contractual forward rate
|
|||||||
December 2020 to February 2021
|
$
|
750
|
77.88
|
7
|
Leases
|
No later than 1 year
|
$
|
2,870
|
||
Later than 1 year and no later than 5 years
|
5,810
|
|||
Later than 5 years
|
905
|
|||
Total lease liabilities as at November 30, 2020
|
$
|
9,585
|
8
|
Long-term Debt
|
As at
November 30,
2020
|
As at
August 31,
2020
|
|||||||
Unsecured, non-interest-bearing loans, denominated in euros, repayable in quarterly instalments, maturing in September 2024 and September 2025
|
$
|
877
|
$
|
896
|
||||
Unsecured loans, denominated in euros, repayable in monthly, quarterly or bi‑annual instalments, bearing interest at annual rates of nil to 5.0%, maturing at
different dates between July 2021 and September 2023
|
2,123
|
2,443
|
||||||
Loans, secured by the universality of the assets of a subsidiary, denominated in euros, repayable in monthly instalments, bearing interest at annual rates of 0.7%
to 1.5%, maturing at different dates between December 2020 and March 2023
|
233
|
295
|
||||||
Loans, secured by the universality of the assets of a subsidiary, denominated in euros, repayable in monthly or quarterly instalments, bearing interest at annual
rates of 1.1% to 2.9%, maturing at different dates between December 2020 and July 2022
|
406
|
586
|
||||||
3,639
|
4,220
|
|||||||
Current portion of long-term debt
|
1,880
|
2,076
|
||||||
$
|
1,759
|
$
|
2,144
|
As at
November 30,
2020
|
||||
No later than 1 year
|
$
|
1,880
|
||
Later than 1 year and no later than 5 years
|
1,759
|
|||
$
|
3,639
|
9
|
Share Capital
|
Three months ended November 30, 2019
|
||||||||||||||||||||
Multiple voting shares
|
Subordinate voting shares
|
|||||||||||||||||||
Number
|
Amount
|
Number
|
Amount
|
Total
amount |
||||||||||||||||
Balance as at September 1, 2019
|
31,643,000
|
$
|
1
|
23,703,675
|
$
|
92,705
|
$
|
92,706
|
||||||||||||
Redemption of restricted share units
|
−
|
−
|
255,822
|
−
|
−
|
|||||||||||||||
Redemption of share capital
|
−
|
−
|
(54,528
|
)
|
(212
|
)
|
(212
|
)
|
||||||||||||
Reclassification of stock-based compensation costs to share capital upon exercise of stock awards
|
−
|
−
|
−
|
861
|
861
|
|||||||||||||||
Balance as at November 30, 2019
|
31,643,000
|
$
|
1
|
23,904,969
|
$
|
93,354
|
$
|
93,355
|
Three months ended November 30, 2020
|
||||||||||||||||||||
Multiple voting shares
|
Subordinate voting shares
|
|||||||||||||||||||
Number
|
Amount
|
Number
|
Amount
|
Total
amount |
||||||||||||||||
Balance as at September 1, 2020
|
31,643,000
|
$
|
1
|
24,060,766
|
$
|
94,023
|
$
|
94,024
|
||||||||||||
Redemption of restricted share units
|
−
|
−
|
204,506
|
−
|
−
|
|||||||||||||||
Redemption of performance share units
|
−
|
−
|
2,704
|
−
|
−
|
|||||||||||||||
Redemption of share capital
|
−
|
−
|
(138,255
|
)
|
(538
|
)
|
(538
|
)
|
||||||||||||
Reclassification of stock-based compensation costs to share capital upon exercise of stock awards
|
−
|
−
|
−
|
704
|
704
|
|||||||||||||||
Balance as at November 30, 2020
|
31,643,000
|
$
|
1
|
24,129,721
|
$
|
94,189
|
$
|
94,190
|
10
|
Statements of Earnings
|
Three months ended
November 30,
|
||||||||
2020
|
2019
|
|||||||
Test and measurement
|
$
|
50,473
|
$
|
55,947
|
||||
Service assurance, systems and services
|
21,046
|
17,749
|
||||||
Foreign exchange losses on forward exchange contracts
|
(7
|
)
|
(145
|
)
|
||||
Total sales for the period
|
$
|
71,512
|
$
|
73,551
|
Three months ended
November 30,
|
||||||||
2020
|
2019
|
|||||||
Gross research and development expenses
|
$
|
14,153
|
$
|
13,832
|
||||
Research and development tax credits and grants
|
(2,954
|
)
|
(2,083
|
)
|
||||
Net research and development expenses for the period
|
$
|
11,199
|
$
|
11,749
|
Three months ended
November 30,
|
||||||||
2020
|
2019
|
|||||||
Inventory write-down for the period
|
$
|
495
|
$
|
534
|
Three months ended
November 30,
|
||||||||
2020
|
2019
|
|||||||
Cost of sales
|
||||||||
Depreciation of property, plant and equipment
|
$
|
449
|
$
|
455
|
||||
Depreciation of lease ROU assets
|
281
|
288
|
||||||
Amortization of intangible assets
|
2,162
|
1,318
|
||||||
2,892
|
2,061
|
|||||||
Selling and administrative expenses
|
||||||||
Depreciation of property, plant and equipment
|
277
|
295
|
||||||
Depreciation of lease ROU assets
|
341
|
362
|
||||||
Amortization of intangible assets
|
205
|
152
|
||||||
823
|
809
|
|||||||
Net research and development expenses
|
||||||||
Depreciation of property, plant and equipment
|
615
|
693
|
||||||
Depreciation of lease ROU assets
|
211
|
201
|
||||||
Amortization of intangible assets
|
182
|
162
|
||||||
1,008
|
1,056
|
|||||||
$
|
4,723
|
$
|
3,926
|
|||||
Depreciation of property, plant and equipment
|
$
|
1,341
|
$
|
1,443
|
||||
Depreciation of lease ROU assets
|
833
|
851
|
||||||
Amortization of intangible assets
|
2,549
|
1,632
|
||||||
$
|
4,723
|
$
|
3,926
|
Three months ended
November 30,
|
||||||||
2020
|
2019
|
|||||||
Salaries and benefits
|
$
|
35,900
|
$
|
34,307
|
||||
Restructuring charges
|
543
|
−
|
||||||
Stock-based compensation costs
|
568
|
487
|
||||||
Grants (CEWS)
|
(1,885
|
)
|
−
|
|||||
Total employee compensation for the period
|
$
|
35,126
|
$
|
34,794
|
Three months ended
November 30,
|
||||||||
2020
|
2019
|
|||||||
Cost of sales
|
$
|
30
|
$
|
40
|
||||
Selling and administrative expenses
|
447
|
380
|
||||||
Net research and development expenses
|
91
|
67
|
||||||
Total stock-based compensation for the period
|
$
|
568
|
$
|
487
|
Three months ended
November 30,
|
||||||||
2020
|
2019
|
|||||||
Cost of sales
|
$
|
(430
|
)
|
$
|
−
|
|||
Selling and administrative expenses
|
(620
|
)
|
−
|
|||||
Net research and development expenses
|
(835
|
)
|
−
|
|||||
Total CEWS for the period
|
$
|
(1,885
|
)
|
$
|
−
|
11
|
Income Taxes
|
Three months ended
November 30,
|
||||||||
2020
|
2019
|
|||||||
Income tax provision at combined Canadian federal and provincial statutory tax rate (27%)
|
$
|
1,548
|
$
|
704
|
||||
Increase (decrease) due to:
|
||||||||
Foreign income taxed at different rates
|
(96
|
)
|
178
|
|||||
Non-deductible loss (non-taxable income)
|
(107
|
)
|
14
|
|||||
Non-deductible expenses
|
168
|
178
|
||||||
Foreign exchange effect of translation of foreign subsidiaries
|
(11
|
)
|
(115
|
)
|
||||
Utilization of previously unrecognized deferred income tax assets
|
(825
|
)
|
(16
|
)
|
||||
Unrecognized deferred income tax assets on temporary deductible differences and unused tax losses
|
1,569
|
1,442
|
||||||
Other
|
(65
|
)
|
284
|
|||||
Income tax provision for the period
|
$
|
2,181
|
$
|
2,669
|
Three months ended
November 30,
|
||||||||
2020
|
2019
|
|||||||
Current
|
$
|
3,499
|
$
|
3,111
|
||||
Deferred
|
(1,318
|
)
|
(442
|
)
|
||||
$
|
2,181
|
$
|
2,669
|
12
|
Earnings per Share
|
Three months ended
November 30,
|
||||||||
2020
|
2019
|
|||||||
Basic weighted average number of shares outstanding (000’s)
|
55,749
|
55,439
|
||||||
Plus dilutive effect of (000’s):
|
||||||||
Restricted share units
|
942
|
−
|
||||||
Deferred share units
|
332
|
−
|
||||||
Diluted weighted average number of shares outstanding (000’s)
|
57,023
|
55,439
|
||||||
Stock awards excluded from the calculation of the diluted weighted average number of shares outstanding because their exercise price was greater than the average
market price of the common shares, or their inclusion would be antidilutive (000’s)
|
22
|
1,385
|
Three months ended
November 30,
|
Three months ended
November 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Sales
|
$
|
71,512
|
$
|
73,551
|
100.0
|
%
|
100.0
|
%
|
||||||||
Cost of sales (1)
|
29,869
|
30,241
|
41.8
|
41.1
|
||||||||||||
Selling and administrative
|
21,606
|
24,504
|
30.2
|
33.3
|
||||||||||||
Net research and development
|
11,199
|
11,749
|
15.7
|
16.0
|
||||||||||||
Depreciation of property, plant and equipment
|
1,341
|
1,443
|
1.9
|
2.0
|
||||||||||||
Depreciation of lease right-of-use assets
|
833
|
851
|
1.1
|
1.2
|
||||||||||||
Amortization of intangible assets
|
2,549
|
1,632
|
3.6
|
2.2
|
||||||||||||
Interest and other (income) expense
|
(1,866
|
)
|
399
|
(2.6
|
)
|
0.5
|
||||||||||
Foreign exchange loss
|
246
|
126
|
0.3
|
0.2
|
||||||||||||
Earnings before income taxes
|
5,735
|
2,606
|
8.0
|
3.5
|
||||||||||||
Income taxes
|
2,181
|
2,669
|
3.0
|
3.6
|
||||||||||||
Net earnings (loss) for the period
|
$
|
3,554
|
$
|
(63
|
)
|
5.0
|
%
|
(0.1
|
)%
|
|||||||
Basic and diluted net earnings (loss) per share
|
$
|
0.06
|
$
|
(0.00
|
)
|
|||||||||||
Other selected information:
|
||||||||||||||||
Gross margin before depreciation and amortization (2)
|
$
|
41,643
|
$
|
43,310
|
58.2
|
%
|
58.9
|
%
|
||||||||
Gross research and development
|
$
|
14,153
|
$
|
13,832
|
19.8
|
%
|
18.8
|
%
|
||||||||
Canadian emergency wage subsidy included in:
|
||||||||||||||||
Cost of sales
|
$
|
(430
|
)
|
$
|
–
|
0.6
|
%
|
–
|
%
|
|||||||
Selling and administrative expenses
|
$
|
(620
|
)
|
$
|
–
|
0.9
|
%
|
–
|
%
|
|||||||
Net research and development expenses
|
$
|
(835
|
)
|
$
|
–
|
1.1
|
%
|
–
|
%
|
|||||||
Adjusted EBITDA (2)
|
$
|
9,949
|
$
|
7,544
|
13.9
|
%
|
10.3
|
%
|
(1)
|
Cost of sales is exclusive of depreciation and amortization, shown separately.
|
(2)
|
Refer to page 33 for non-IFRS measures.
|
Three months ended
November 30,
|
||||||||
2020
|
2019
|
|||||||
Test and measurement
|
$
|
50,473
|
$
|
55,947
|
||||
Service assurance, systems and services
|
21,046
|
17,749
|
||||||
71,519
|
73,696
|
|||||||
Foreign exchange losses on forward exchange contracts
|
(7
|
)
|
(145
|
)
|
||||
Total sales
|
$
|
71,512
|
$
|
73,551
|
Three months ended
November 30,
|
||||||||
2020
|
2019
|
|||||||
Test and measurement
|
$
|
51,248
|
$
|
55,009
|
||||
Service assurance, systems and services
|
17,802
|
15,049
|
||||||
69,050
|
70,058
|
|||||||
Foreign exchange losses on forward exchange contracts
|
(7
|
)
|
(145
|
)
|
||||
Total bookings
|
$
|
69,043
|
$
|
69,913
|
Three months ended
November 30,
|
||||||||
2020
|
2019
|
|||||||
Americas
|
44
|
%
|
54
|
%
|
||||
Europe, Middle East and Africa (EMEA)
|
37
|
29
|
||||||
Asia-Pacific (APAC)
|
19
|
17
|
||||||
100
|
%
|
100
|
%
|
Decrease in bank loan
|
$
|
(16,338
|
)
|
|
Purchases of capital assets
|
(1,111
|
)
|
||
Repayment of lease liabilities and long-term debt
|
(1,414
|
)
|
||
Redemption of share capital
|
(380
|
)
|
||
Cash flows provided by operating activities
|
|
2,062
|
||
Other
|
(58
|
)
|
||
$
|
(17,239
|
)
|
Lease liabilities
|
Long-term
debt
|
Licensing
agreements
|
Total
|
|||||||||||||
No later than 1 year
|
$
|
2,870
|
$
|
1,880
|
$
|
1,862
|
$
|
6,612
|
||||||||
Later than 1 year and no later than 5 years
|
5,810
|
1,759
|
288
|
7,857
|
||||||||||||
Later than 5 years
|
905
|
‒
|
‒
|
905
|
||||||||||||
$
|
9,585
|
$
|
3,639
|
$
|
2,150
|
$
|
15,374
|
Expiry dates
|
Contractual
amounts
|
Weighted average
contractual
forward rates
|
||||||
December 2020 to August 2021
|
$
|
26,800,000
|
1.3329
|
|||||
September 2021 to August 2022
|
18,800,000
|
1.3492
|
||||||
September 2022 to February 2023
|
3,600,000
|
1.3324
|
||||||
Total
|
$
|
49,200,000
|
1.3391
|
Expiry dates
|
Contractual
amounts
|
Weighted average
contractual
forward rates
|
||||||
December 2020 to February 2021
|
$
|
750,000
|
77.88
|
Three months ended
November 30,
|
||||||||
2020
|
2019
|
|||||||
IFRS net earnings (loss) for the period
|
$
|
3,554
|
$
|
(63
|
)
|
|||
Add (deduct):
|
||||||||
Depreciation and amortization
|
4,723
|
3,926
|
||||||
Interest and other (income) expense
|
(1,866
|
)
|
399
|
|||||
Income taxes
|
2,181
|
2,669
|
||||||
Stock-based compensation costs
|
568
|
487
|
||||||
Restructuring charges
|
543
|
‒
|
||||||
Foreign exchange loss
|
246
|
126
|
||||||
Adjusted EBITDA for the period
|
$
|
9,949
|
$
|
7,544
|
||||
Adjusted EBITDA in percentage of sales
|
13.9
|
%
|
10.3
|
%
|
Quarters ended
|
||||||||||||||||
November 30,
2020
|
August 31,
2020
|
May 31,
2020
|
February 29,
2020
|
|||||||||||||
Sales
|
$
|
71,512
|
$
|
70,572
|
$
|
66,147
|
$
|
55,313
|
||||||||
Cost of sales (2)
|
$
|
29,869
|
$
|
32,573
|
$
|
27,948
|
$
|
23,796
|
||||||||
Net earnings (loss)
|
$
|
3,554
|
$
|
(3,633
|
)
|
$
|
3,177
|
$
|
(9,021
|
)
|
||||||
Basic and diluted net earnings (loss) per share
|
$
|
0.06
|
$
|
(0.07
|
)
|
$
|
0.06
|
$
|
(0.16
|
)
|
Quarters ended
|
||||||||||||||||
November 30,
2019
|
August 31,
2019
|
May 31,
2019
|
February 28,
2019
|
|||||||||||||
Sales
|
$
|
73,551
|
$
|
70,175
|
$
|
73,587
|
$
|
73,927
|
||||||||
Cost of sales (2)
|
$
|
30,241
|
$
|
30,260
|
$
|
30,458
|
$
|
29,062
|
||||||||
Net earnings (loss)
|
$
|
(63
|
)
|
$
|
(227
|
)
|
$
|
21
|
$
|
5,193
|
||||||
Basic and diluted net earnings (loss) per share
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
$
|
0.00
|
$
|
0.09
|
(1)
|
Quarterly financial information has been derived from our condensed unaudited interim consolidated financial statements, which are prepared in accordance with IFRS, as issued by the IASB,
applicable to the preparation of interim financial statements, including IAS 34, “Interim Financial Reporting”. The presentation currency is the US dollar, which differs from the
functional currency of the company (Canadian dollar).
|
(2)
|
Cost of sales is exclusive of depreciation and amortization.
|
1. |
Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of EXFO Inc. (the
“issuer”) for the interim period ended November 30, 2020.
|
2. |
No misrepresentation: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or
omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
|
3. |
Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information
included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
|
4. |
Responsibility: The issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and
internal control over financial reporting (ICFR), as those terms are defined in Regulation 52-109 respecting Certification of Disclosure in Issuer’s Annual and Interim Filings (c. V-1.1, r. 27), for the issuer.
|
5. |
Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer's other certifying officer and I have, as at the end of the period
covered by the interim filings
|
|
(a) |
designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
|
|
(i) |
material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
|
|
(ii) |
information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the
time periods specified in securities legislation; and
|
|
(b) |
designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with the issuer's GAAP.
|
5.1 |
Control framework: The control framework the issuer's other certifying officer and I used to design the issuer's ICFR is the Internal
Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
|
5.2 |
N/A
|
5.3 |
N/A
|
6. |
Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer's ICFR that occurred during the period beginning on
September 1, 2020 and ended on November 30, 2020 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR.
|
1. |
Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of EXFO Inc. (the
“issuer”) for the interim period ended November 30, 2020.
|
2. |
No misrepresentation: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or
omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
|
3. |
Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information
included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
|
4. |
Responsibility: The issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and
internal control over financial reporting (ICFR), as those terms are defined in Regulation 52-109 respecting Certification of Disclosure in Issuer’s Annual and Interim Filings (c. V-1.1, r. 27), for the issuer.
|
5. |
Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer's other certifying officer and I have, as at the end of the period
covered by the interim filings
|
|
(a) |
designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
|
|
(i) |
material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
|
|
(ii) |
information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the
time periods specified in securities legislation; and
|
|
(b) |
designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with the issuer's GAAP.
|
5.1 |
Control framework: The control framework the issuer's other certifying officer and I used to design the issuer's ICFR is the Internal
Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
|
5.2 |
N/A
|
5.3 |
N/A
|
6. |
Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer's ICFR that occurred during the period beginning on
September 1, 2020 and ended on November 30, 2020 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR.
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