EXFO reports third-quarter results for Fiscal 2015

Created July 9, 2015
News and Business

Sales reach $57.8m; bookings $59.2m, book-to-bill ratio of 1.03; adjusted EBITDA of $4.5m, 7.7% of sales.

EXFO Inc. reported on June 23, 2015 its financial results for the third quarter ended May 31, 2015. Sales reached US$57.8m in the third quarter of fiscal 2015 compared to US$63.9m in the third quarter of 2014 and US$51.0m in the second quarter of 2015. Bookings attained US$59.2m in the third quarter of fiscal 2015 compared to US$66.5m in the same period last year and US$54.7m in the second quarter of 2015. The company’s book-to-bill ratio was 1.03 in the third quarter of 2015. Gross margin before depreciation and amortization amounted to 61.4% of sales in the third quarter of fiscal 2015 compared to 63.3% in the third quarter of 2014 and 61.7% in the second quarter of 2015.

IFRS net earnings in the third quarter of fiscal 2015 totaled US$0.6m, or US$0.01 per diluted share, compared to US$1.7m, or US$0.03 per diluted share, in the same period last year and US$0.9m, or US$0.02 per diluted share, in the second quarter of 2015. IFRS net earnings in the third quarter of 2015 included US$0.4m in after-tax amortization of intangible assets, US$0.4m in stock-based compensation costs and a foreign exchange loss of US$0.2m.

Adjusted “EBITDA” earnings totalled US$4.5m, or 7.7% of sales, in the third quarter of fiscal 2015 compared to US$7.3m, or 11.5% of sales, in the third quarter of 2014 and US$1.2 million, or 2.3% of sales, in the second quarter of 2015.

“Our sequential sales improvement was led by a 20%-plus increase in the Americas, while the EMEA region remained challenging due to macro-economic issues, devaluation of local currencies and difficult end-markets,” said Germain Lamonde, EXFO’s Chairman, President and CEO. “We have begun taking action this quarter to reduce operating costs and position the company to accelerate revenue, since improving profitability is the centerpiece of management’s strategy.”

Q3 highlights

Sales: Geographical sales breakdown in the third quarter was 58% from the Americas, 23% from EMEA and 19% from the Asia-Pacific region. EXFO’s top-three customers represented 15.7% of sales

Profitability: EXFO generated adjusted EBITDA of US$4.5 million (7.7% of sales) in the third quarter of 2015 for a total of US$8.8 million (5.3%) after the first three quarters into the fiscal year

Innovation: EXFO introduced major enhancements to its analytics platform (EXFO Xtract), service assurance systems and network visibility solutions in the third quarter in order to help network operators take proactive actions that improve customer quality of experience. The company also released new capabilities for its iOLM fiber test technology and a fully automated wireless fiber inspection solution,.

Business outlook: EXFO forecasts sales between US$55.0 million and US$60.0 million for the fourth quarter of fiscal 2015, while IFRS net results are expected to range between a net loss of US$0.02 per share and net earnings of US$0.02 per share. IFRS net loss/earnings include US$0.01 per share in after-tax amortization of intangible assets and stock-based compensation costs as well as US$0.02 per share in restructuring charges.

See Also: EXFO Official Press Release

Matthew Peach

This article was written
by Matthew Peach

Matthew Peach is a freelance technology journalist specialising in photonics and communications. He has previously worked for several business-to-business publishers, editing a range of high-tech magazines and websites.