Q4 2018
- Sales reached US$69.2
million
- IFRS net loss totaled US$4.0
million
- Adjusted EBITDA amounted to US$6.1
million
- Announced reorganization plan with US$10.5 million in annualized cost
savings
Fiscal 2018
- Sales increased 10.8% to US$269.5
million
- IFRS net loss attributable to the parent
interest1 totaled US$11.9
million
- Adjusted EBITDA amounted to US$17.2 million
QUEBEC CITY, Oct. 11, 2018 /CNW Telbec/ - EXFO Inc.
(NASDAQ: EXFO) (TSX: EXF), the communications industry's test,
monitoring and analytics experts, announced today financial results
for the fourth quarter and fiscal year ended August 31, 2018.
Sales in the fourth quarter of fiscal 2018 reached US$69.2 million compared to US$63.0 million in the fourth quarter of 2017.
Annual sales improved 10.8% to US$269.5
million in fiscal 2018 from US$243.3
million in 2017.
Bookings totaled US$63.1 million
for a book-to-bill ratio of 0.91 in the fourth quarter of fiscal
2018 compared to US$66.3 million in
the fourth quarter of 2017. Overall for fiscal 2018, bookings
increased 6.3% to US$267.7 million for a book-to-bill ratio of
0.99 from US$251.8 million
in 2017.
Gross margin before depreciation and amortization* attained
60.4% of sales in the fourth quarter of fiscal 2018 compared 61.9%
in the fourth quarter of 2017. Gross margin before depreciation and
amortization included restructuring charges of 0.7% of sales in the
fourth quarter of 2018 and 0.2% in the fourth quarter of 2017. In
fiscal 2018, gross margin before depreciation and amortization
reached 61.0% of sales compared to 61.2% in 2017. Gross margin
before depreciation and amortization included restructuring charges
of 0.2% of sales in 2018 and 0.7% in 2017.
In the fourth quarter of fiscal 2018, IFRS net loss amounted to
US$4.0 million, or US$0.07 per share, compared to net earnings of
US$0.8 million, or US$0.02 per share, in the fourth quarter of 2017.
Net loss in the fourth quarter of 2018 included net expenses
totaling US$6.6 million:
US$1.7 million in after-tax
amortization of intangible assets, US$0.5
million in stock-based compensation costs, US$3.4 million in after-tax restructuring
changes, US$0.9 million for the
deferred revenue fair-value adjustment related to the Astellia
acquisition, and a foreign exchange loss of US$0.1 million.
In fiscal 2018, IFRS net loss attributable to the parent
interest1 totaled US$11.9
million, or US$0.22 per share,
compared to net earnings of US$0.9
million, or US$0.02 per share,
in 2017. Net loss in 2018 included net expenses totaling
US$17.1 million: US$9.4 million in after-tax amortization of
intangible assets, US$1.7 million in
stock-based compensation costs, US$3.4
million in after-tax restructuring charges, US$2.1 million for the deferred revenue
fair-value adjustment related to the Astellia acquisition,
US$0.7 million for the positive
change in the fair value of the cash contingent consideration
related to the Ontology acquisition, US$2.5
million in after-tax acquisition-related costs, and a
foreign exchange gain of US$1.3
million.
Adjusted EBITDA* amounted to US$6.1
million, or 8.8% of sales, in the fourth quarter of fiscal
2018 compared US$8.5 million, or
13.6% of sales, in the fourth quarter of 2017. In fiscal 2018,
adjusted EBITDA totaled US$17.2
million, or 6.4% of sales, compared to US$22.0 million, or 9.1% of sales,
in 2017.
On August 21, 2018, EXFO announced
a reorganization plan to fast-track the integration of newly
acquired monitoring and analytics solutions, while reducing the
company's overall cost structure. Once completed in the second half
of fiscal 2019, the reorganization is expected to deliver
annualized cost savings of US$10.5
million.
EXFO closed two acquisitions in fiscal 2018: Astellia, a leading
provider of mobile network and subscriber intelligence, and Yenista
Optics, a supplier of advanced optical test equipment for the
R&D and manufacturing markets. Astellia generated revenue of
US$16.4 million during seven months
under EXFO in 2018, while Yenista's revenue contribution was not
material. Astellia's sales were reduced by US$2.1
million to account for acquisition-related fair value
adjustment of deferred revenue.
"During fiscal 2018, we made significant progress to
strategically transform EXFO into a supplier of software-intensive,
end-to-end solutions and analytics for fiber, mobile and
virtualized networks," said Philippe
Morin, EXFO's Chief Executive Officer. "While communications
service providers are undergoing fundamental changes to their
business models and network architectures with upcoming 5G and IoT
deployments, EXFO has positioned itself as a supplier of choice
delivering superior network performance, service reliability and
subscriber insights through the acquisitions of Astellia and
Ontology."
"Although these transformations are mostly unfolding according
to plan, I am disappointed with our financial results in 2018 due
to deal delays and the current market environment," Mr. Morin
added. "Nonetheless, we have planned significant improvements for
2019 with an increased focus on execution."
1Represents net loss excluding share of the net loss
attributable to Astellia's minority shareholders.
Selected Financial
Information
|
|
|
|
(In thousands of
US dollars)
|
|
|
|
|
|
|
|
|
|
Q4
2018
|
|
|
Q4
2017
|
|
|
FY
2018
|
|
|
FY
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Physical-layer
sales
|
$
|
43,178
|
|
$
|
40,802
|
|
$
|
172,912
|
|
$
|
161,864
|
Protocol-layer
sales
|
|
25,960
|
|
|
22,122
|
|
|
95,759
|
|
|
81,905
|
Foreign exchange
gains (losses) on forward exchange contracts
|
|
78
|
|
|
57
|
|
|
875
|
|
|
(468)
|
Total
Sales
|
$
|
69,216
|
|
$
|
62,981
|
|
$
|
269,546
|
|
$
|
243,301
|
|
|
|
|
|
|
|
|
|
|
|
|
Physical-layer
bookings
|
$
|
37,515
|
|
$
|
39,322
|
|
$
|
172,094
|
|
$
|
165,886
|
Protocol-layer
bookings
|
|
25,545
|
|
|
26,943
|
|
|
94,724
|
|
|
86,348
|
Foreign exchange
gains (losses) on forward exchange contracts
|
|
78
|
|
|
57
|
|
|
875
|
|
|
(468)
|
Total
Bookings
|
$
|
63,138
|
|
$
|
66,322
|
|
$
|
267,693
|
|
$
|
251,766
|
Book-to-bill ratio
(Bookings/Sales)
|
|
0.91
|
|
|
1.05
|
|
|
0.99
|
|
|
1.03
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin before
depreciation and amortization*
|
$
|
41,790
|
|
$
|
39,009
|
|
$
|
164,542
|
|
$
|
148,972
|
|
|
60.4%
|
|
|
61.9%
|
|
|
61.0%
|
|
|
61.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
Other selected
information:
|
|
|
|
|
|
|
|
|
|
|
|
|
IFRS net earnings
(loss) attributable to the parent interest1
|
$
|
(3,951)
|
|
$
|
844
|
|
$
|
(11,902)
|
|
$
|
851
|
|
Amortization of
intangible assets
|
$
|
1,942
|
|
$
|
1,048
|
|
$
|
10,327
|
|
$
|
3,289
|
|
Stock-based
compensation costs
|
$
|
468
|
|
$
|
431
|
|
$
|
1,748
|
|
$
|
1,414
|
|
Restructuring
charges
|
$
|
4,559
|
|
$
|
1,266
|
|
$
|
4,559
|
|
$
|
5,079
|
|
Change in fair value
of cash contingent consideration
|
$
|
46
|
|
$
|
(383)
|
|
$
|
(670)
|
|
$
|
(383)
|
|
Acquisition-related
deferred revenue fair value adjustment
|
$
|
873
|
|
$
|
–
|
|
$
|
2,095
|
|
$
|
–
|
|
Share in net loss of
an associate
|
$
|
–
|
|
$
|
–
|
|
$
|
2,080
|
|
$
|
–
|
|
Gain on deemed
disposal of the investment in an associate
|
$
|
–
|
|
$
|
–
|
|
$
|
(2,080)
|
|
$
|
–
|
|
Foreign exchange
(gain) loss
|
$
|
77
|
|
$
|
2,943
|
|
$
|
(1,309)
|
|
$
|
978
|
|
Income tax effect of
the above items
|
$
|
(1,329)
|
|
$
|
(275)
|
|
$
|
(2,033)
|
|
$
|
(858)
|
|
Adjusted
EBITDA*
|
$
|
6,098
|
|
$
|
8,545
|
|
$
|
17,198
|
|
$
|
22,041
|
Operating Expenses
Selling and administrative expenses
totaled US$24.7 million, or 35.7% of
sales, in the fourth quarter of fiscal 2018 compared to
US$20.8 million, or 33.1% of sales,
in the fourth quarter of 2017. In fiscal 2018, selling and
administrative expenses amounted to US$98.8
million, or 36.7% of sales, compared to US$86.3 million, or 35.5% of sales, in 2017.
Net R&D expenses amounted to US$16.7
million, or 24.1% of sales, in the fourth quarter of fiscal
2018 compared to US$11.3 million, or
17.8% of sales, in the fourth quarter of 2017. In fiscal 2018, net
R&D expenses totaled US$57.2
million, or 21.2% of sales, compared to US$47.2 million, or 19.4% of sales, in
2017.
Fiscal 2018 Highlights
- Sales. Total sales increased 10.8% to
US$269.5 million in fiscal 2018
mainly due to revenue contributions from the Astellia and Yenista
acquisitions, market-share gains in Physical-layer testing and the
positive currency impact. Sales of Physical-layer solutions
(optical and copper access) increased 6.8% year-over-year, while
sales of Protocol-layer solutions (transport, datacom, service
assurance, analytics and wireless products) improved 16.9%.
Annual sales in Europe,
Middle East and Africa (EMEA) and Asia-Pacific regions increased 36.4% and 6.5%,
respectively, while sales in the Americas remained relatively flat
year-over-year.
EXFO's largest customer accounted for 9.1% of sales in fiscal 2018,
while the company's top-three customers represented 15.9%. In
comparison, EXFO's largest customer accounted for 10.1% of sales in
2017, while the company's top-three customers represented
18.4%.
- Profitability. IFRS net loss attributable to the
parent interest totaled US$11.9
million in fiscal 2018 compared to net earnings attributable
to the parent interest of US$0.9
million in 2017. Adjusted EBITDA amounted to US$17.2 million in 2018 compared to US$22.0 million in 2017. EXFO also generated
US$14.4 million in cash flows from
operating activities in 2018 compared to US$12.9 million in 2017.
- Innovation. EXFO launched seven major solutions
in fiscal 2018. New product introductions included a compact 400G
test solution for network equipment manufacturers, carrier labs and
data centers. The company also introduced SkyRan, a remote access
monitoring solution for fiber-based fronthaul networks. Developed
in collaboration with tier-1 mobile network operators, SkyRAN
provides real-time, on-demand testing and 24/7 monitoring of
optical networks and radio frequency spectrum. Other key product
introductions included EX1, a multipurpose test solution for
validating bandwidth speeds up to full line rate Gigabit Ethernet
and for monitoring quality of experience at customer premises; an
optical spectrum analyzer delivering in-service optical
signal-to-noise ratio (OSNR) measurements for high-speed networks;
and an automated network troubleshooting solution that links
performance measurements to network topology to deliver service
degradation diagnosis.
Business Outlook
EXFO forecasts IFRS sales between
US$66.0 million and US$71.0 million for the first quarter of fiscal
2019; the company anticipates that IFRS sales will be reduced by
US$0.9 million to account for the
acquisition-related fair value adjustment of deferred revenue.
IFRS net loss is expected to range between US$0.20 and US$0.16
per share. IFRS net loss includes a total of US$0.13 per share in after-tax amortization of
intangible assets, after-tax restructuring charges, stock-based
compensation costs, and acquisition-related fair value adjustment
of deferred revenue.
This guidance, which is a forward-looking statement, was
established by management based on existing backlog as of the date
of this news release, seasonality, expected bookings for the
remaining of the quarter as well as exchange rates as of the date
of this news release.
Conference Call and Webcast
EXFO will host a
conference call today at 5 p.m. (Eastern
time) to review fourth quarter and year-end financial
results for fiscal 2018. To listen to the conference call and
participate in the question period via telephone, dial
1-323-794-2093. Please take note the following conference ID
number will be required: 3521447. EXFO's Executive Chairman
Germain Lamonde, CEO Philippe Morin, and Pierre Plamondon, CPA, Vice-President of Finance
and Chief Financial Officer, will participate in the call. An audio
replay of the conference call will be available two hours after the
event until 8:15 p.m. on October 18, 2018. The replay number is
1-719-457-0820 and the conference ID number is 3521447. 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
EXFO (NASDAQ: EXFO) (TSX: EXF) develops
smarter test, monitoring and analytics solutions for fixed and
mobile network operators, webscale companies and equipment
manufacturers in the global communications industry. Our customers
count on us to deliver superior network performance, service
reliability and subscriber insights. They count on our unique blend
of equipment, software and services to accelerate digital
transformations related to fiber, 4G/LTE and 5G deployments. They
count on our expertise with automation, real-time troubleshooting
and big data analytics, which are critical to their business
performance. We've spent over 30 years earning this trust, and
today more than 2,000 EXFO employees in over 25 countries work side
by side with our customers in the lab, field, data center and
beyond. For more information, visit EXFO.com and follow us on the
EXFO Blog.
Forward-Looking Statements
This news 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, expect, believe, plan, anticipate, intend,
could, estimate, continue, or similar expressions or the negative
of such expressions 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, but not limited to, macroeconomic uncertainty, including
trade wars; our ability to successfully integrate businesses that
we acquire; capital spending and network deployment levels in the
telecommunications industry (including our ability to quickly adapt
cost structures to 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, service
assurance and analytics solutions markets and increased competition
among vendors; capacity to adapt our future product offering to
future technological changes; limited visibility with regard to the
timing and nature of customer orders; delay in revenue recognition
due to longer sales cycles for complex systems involving customers'
acceptance; fluctuating exchange rates; concentration of sales;
timely release and market acceptance of our new products and other
upcoming products; our ability to successfully expand international
operations and to conduct business internationally; 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
(non-IFRS sales, gross margin before depreciation and amortization
and adjusted EBITDA) as supplemental information regarding its
operational performance. Non-IFRS sales represent total sales plus
acquisition-related deferred revenue fair value adjustment. Gross
margin before depreciation and amortization represents sales,
less cost of sales, excluding depreciation and amortization.
Adjusted EBITDA represent net earnings (loss) attributable to the
parent interest before interest, income taxes, depreciation
and amortization, stock-based compensation costs,
restructuring charges, acquisition-related deferred revenue fair
value adjustment, change in fair value of cash contingent
consideration, share in net loss of an associate, gain on the
deemed disposal of the investment in an associate, and foreign
exchange gain or loss.
These non-IFRS measures eliminate the effect on the company's
IFRS results of non-cash and/or non-operating statement
of earnings elements, as well as elements subject to
significant volatility such as foreign exchange gain or loss.
EXFO uses these measures for evaluating its historical and
prospective financial performance, as well
as its performance relative to competitors. These
non-IFRS measures are also used by financial analysts to evaluate
and compare EXFO's performance against that of competitors and
industry players in the sector.
Finally, these measures help the company plan and forecast
future periods as well as make operational and strategic decisions.
EXFO believes that providing this information to investors, in
addition to the IFRS measures, allows them to see the company's
results through the eyes of management, and to better understand
historical and future financial performance. More importantly,
it enables the comparison of EXFO's performance on a relatively
similar basis against that of other public and private companies in
the industry worldwide.
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.
The following table summarizes the reconciliation of non-IFRS
sales to IFRS sales, in thousands of US dollars:
|
|
Q4
2018
|
|
|
Q4
2017
|
|
|
FY
2018
|
|
|
FY
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
IFRS sales
|
$
|
69,216
|
|
$
|
62,981
|
|
$
|
269,546
|
|
$
|
243,301
|
Acquisition-related
deferred revenue fair value adjustment
|
|
873
|
|
|
–
|
|
|
2,095
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-IFRS
sales
|
$
|
70,089
|
|
$
|
62,981
|
|
$
|
271,641
|
|
$
|
243,301
|
The following table summarizes the reconciliation of adjusted
EBITDA to IFRS net earnings (loss) attributable
to the parent interest, in thousands of US dollars:
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4
2018
|
|
|
Q4
2017
|
|
|
FY
2018
|
|
|
FY
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
IFRS net earnings
(loss) attributable to the parent interest
|
$
|
(3,951)
|
|
$
|
844
|
|
$
|
(11,902)
|
|
$
|
851
|
|
|
|
|
|
|
|
|
|
|
|
|
Add
(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of
property, plant and equipment
|
|
1,472
|
|
|
1,008
|
|
|
5,444
|
|
|
3,902
|
Amortization of
intangible assets
|
|
1,942
|
|
|
1,048
|
|
|
10,327
|
|
|
3,289
|
Interest and other
expenses
|
|
508
|
|
|
275
|
|
|
1,378
|
|
|
303
|
Income
taxes
|
|
254
|
|
|
1,113
|
|
|
5,678
|
|
|
6,608
|
Stock-based
compensation costs
|
|
468
|
|
|
431
|
|
|
1,748
|
|
|
1,414
|
Restructuring
charges
|
|
4,409
|
|
|
1,266
|
|
|
4,409
|
|
|
5,079
|
Change in fair value
of cash contingent
consideration
|
|
46
|
|
|
(383)
|
|
|
(670)
|
|
|
(383)
|
Acquisition-related
deferred revenue fair value adjustment
|
|
873
|
|
|
–
|
|
|
2,095
|
|
|
–
|
Share in net loss of
an associate
|
|
–
|
|
|
–
|
|
|
2,080
|
|
|
–
|
Gain on deemed
disposal of the investment in an associate
|
|
–
|
|
|
–
|
|
|
(2,080)
|
|
|
–
|
Foreign exchange
(gain) loss
|
|
77
|
|
|
2,943
|
|
|
(1,309)
|
|
|
978
|
Adjusted EBITDA for
the period
|
$
|
6,098
|
|
$
|
8,545
|
|
$
|
17,198
|
|
$
|
22,041
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA in
percentage of sales
|
|
8.8%
|
|
|
13.6%
|
|
|
6.4%
|
|
|
9.1%
|
EXFO
Inc.
|
Condensed
Unaudited Interim Consolidated Balance Sheets
|
|
|
|
|
(in thousands of US
dollars)
|
|
|
|
|
|
As at August
31,
|
|
|
2018
|
|
|
2017
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash
|
$
|
12,758
|
|
$
|
38,435
|
Short-term
investments
|
|
2,282
|
|
|
775
|
Accounts
receivable
|
|
|
|
|
|
|
Trade
|
|
47,273
|
|
|
41,130
|
|
Other
|
|
4,137
|
|
|
3,907
|
Income taxes and tax
credits recoverable
|
|
4,790
|
|
|
4,955
|
Inventories
|
|
38,589
|
|
|
33,832
|
Prepaid
expenses
|
|
5,291
|
|
|
4,202
|
Other
assets
|
|
2,279
|
|
|
–
|
|
|
117,399
|
|
|
127,236
|
|
|
|
|
|
|
Tax credits
recoverable
|
|
47,677
|
|
|
38,111
|
Property, plant
and equipment
|
|
44,310
|
|
|
40,132
|
Intangible
assets
|
|
29,866
|
|
|
11,183
|
Goodwill
|
|
39,892
|
|
|
35,077
|
Deferred income
tax assets
|
|
4,714
|
|
|
6,555
|
Other
assets
|
|
686
|
|
|
947
|
|
$
|
284,544
|
|
$
|
259,241
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Bank loan
|
$
|
10,692
|
|
$
|
–
|
Accounts payable and
accrued liabilities
|
|
47,898
|
|
|
36,776
|
Provisions
|
|
2,954
|
|
|
3,889
|
Income taxes
payable
|
|
873
|
|
|
663
|
Deferred
revenue
|
|
16,556
|
|
|
11,554
|
Other
liabilities
|
|
3,197
|
|
|
–
|
Current portion of
long-term debt
|
|
2,921
|
|
|
–
|
|
|
85,091
|
|
|
52,882
|
|
|
|
|
|
|
Provisions
|
|
2,347
|
|
|
–
|
Deferred
revenue
|
|
6,947
|
|
|
6,257
|
Long-term
debt
|
|
5,907
|
|
|
–
|
Deferred income
tax liabilities
|
|
5,910
|
|
|
3,116
|
Other
liabilities
|
|
421
|
|
|
196
|
|
|
106,623
|
|
|
62,451
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
Share
capital
|
|
91,937
|
|
|
90,411
|
Contributed
surplus
|
|
18,428
|
|
|
18,184
|
Retained
earnings
|
|
114,906
|
|
|
127,160
|
Accumulated other
comprehensive loss
|
|
(47,350)
|
|
|
(38,965)
|
|
|
177,921
|
|
|
196,790
|
|
|
|
|
|
|
|
$
|
284,544
|
|
$
|
259,241
|
EXFO
Inc.
|
Condensed
Unaudited Interim Consolidated Statements of
Earnings
|
|
|
|
|
|
|
|
|
(in thousands of US
dollars, except share and per share data)
|
|
|
|
|
|
|
|
|
|
Three
months ended August 31, 2018
|
|
Twelve
months ended August 31, 2018
|
|
Three
months ended August 31, 2017
|
|
Twelve
months ended August 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
69,216
|
|
$
|
269,546
|
|
$
|
62,981
|
|
$
|
243,301
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
(1,2)
|
|
27,426
|
|
|
105,004
|
|
|
23,972
|
|
|
94,329
|
Selling and
administrative (2)
|
|
24,728
|
|
|
98,794
|
|
|
20,834
|
|
|
86,256
|
Net research and
development (2)
|
|
16,714
|
|
|
57,154
|
|
|
11,327
|
|
|
47,168
|
Depreciation of
property, plant and equipment
|
|
1,472
|
|
|
5,444
|
|
|
1,008
|
|
|
3,902
|
Amortization of
intangible assets
|
|
1,942
|
|
|
10,327
|
|
|
1,048
|
|
|
3,289
|
Change in fair value
of cash contingent consideration
|
|
46
|
|
|
(670)
|
|
|
(383)
|
|
|
(383)
|
Interest and other
expense
|
|
508
|
|
|
1,378
|
|
|
275
|
|
|
303
|
Foreign exchange
(gain) loss
|
|
77
|
|
|
(1,309)
|
|
|
2,943
|
|
|
978
|
Share in net loss of
an associate
|
|
‒
|
|
|
2,080
|
|
|
‒
|
|
|
‒
|
Gain on deemed
disposal of the investment in an associate
|
|
‒
|
|
|
(2,080)
|
|
|
‒
|
|
|
‒
|
Earnings (loss)
before income taxes
|
|
(3,697)
|
|
|
(6,576)
|
|
|
1,957
|
|
|
7,459
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
254
|
|
|
5,678
|
|
|
1,113
|
|
|
6,608
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
(loss) for the period
|
$
|
(3,951)
|
|
$
|
(12,254)
|
|
$
|
844
|
|
$
|
851
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the
period attributable to non-controlling interest
|
$
|
‒
|
|
$
|
(352)
|
|
$
|
‒
|
|
$
|
‒
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
(loss) for the period attributable to parent
interest
|
$
|
(3,951)
|
|
$
|
(11,902)
|
|
$
|
844
|
|
$
|
851
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
net earnings (loss) attributable to parent interest per
share
|
$
|
(0.07)
|
|
$
|
(0.22)
|
|
$
|
0.02
|
|
$
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted
average number of shares outstanding (000's)
|
|
55,112
|
|
|
54,998
|
|
|
54,708
|
|
|
54,423
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average number of shares outstanding (000's)
|
|
55,112
|
|
|
54,998
|
|
|
55,784
|
|
|
55,555
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The cost of
sales is exclusive of depreciation and amortization, shown
separately.
|
(2) Restructuring
charges included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
$
|
517
|
|
$
|
517
|
|
$
|
115
|
|
$
|
1,697
|
|
Selling and
administrative
|
|
673
|
|
|
673
|
|
|
231
|
|
|
1,150
|
|
Net research and
development
|
|
3,219
|
|
|
3,219
|
|
|
920
|
|
|
2,232
|
|
Interest and other
expense
|
|
150
|
|
|
150
|
|
|
‒
|
|
|
‒
|
|
Income
taxes
|
|
(1,150)
|
|
|
(1,150)
|
|
|
‒
|
|
|
‒
|
|
$
|
3,409
|
|
$
|
3,409
|
|
$
|
1,266
|
|
$
|
5,079
|
EXFO
Inc.
|
Condensed
Unaudited Interim Consolidated Statements of Comprehensive Income
(Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of US
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended August 31, 2018
|
|
Twelve
months ended August 31, 2018
|
|
Three
months ended August 31, 2017
|
|
Twelve
months ended August 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
(loss) for the period
|
|
$
|
(3,951)
|
|
$
|
(12,254)
|
|
$
|
844
|
|
$
|
851
|
Other comprehensive
income (loss), net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
Items that may be
reclassified subsequently to net earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
|
(1,458)
|
|
|
(6,491)
|
|
|
13,028
|
|
|
8,262
|
|
Unrealized
gains/losses on forward exchange contracts
|
|
|
(505)
|
|
|
(1,476)
|
|
|
1,765
|
|
|
1,403
|
|
Reclassification of
realized gains/losses on forward exchange contracts
in net earnings
|
|
|
(132)
|
|
|
(972)
|
|
|
64
|
|
|
423
|
|
Deferred income tax
effect of gains/losses on forward exchange contracts
|
|
|
136
|
|
|
554
|
|
|
(510)
|
|
|
(479)
|
Other comprehensive
income (loss)
|
|
|
(1,959)
|
|
|
(8,385)
|
|
|
14,347
|
|
|
9,609
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income (loss) for the period
|
|
|
(5,910)
|
|
|
(20,639)
|
|
|
15,191
|
|
|
10,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss
for the period attributable to non-controlling
interest
|
|
|
‒
|
|
|
(352)
|
|
|
‒
|
|
|
‒
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
earnings (loss) for the period attributable to parent
interest
|
|
$
|
(5,910)
|
|
$
|
(20,287)
|
|
$
|
15,191
|
|
$
|
10,460
|
EXFO
Inc.
|
Condensed
Unaudited Interim Consolidated Statements of Changes in
Shareholders' Equity
|
|
|
|
|
|
|
(in thousands of US
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
Year ended August
31, 2017
|
|
|
|
|
|
Share capital
|
|
Contributed
surplus
|
|
Retained
earnings
|
|
Accumulated
other
comprehensive
loss
|
|
Total
shareholders'
equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at
September 1, 2016
|
|
|
|
|
$
|
85,516
|
|
$
|
18,150
|
|
$
|
126,309
|
|
$
|
(48,574)
|
|
$
|
181,401
|
Issuance of share
capital
|
|
|
|
|
|
3,490
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
3,490
|
Reclassification of
stock-based compensation costs
|
|
|
|
|
|
1,405
|
|
|
(1,405)
|
|
|
–
|
|
|
–
|
|
|
–
|
Stock-based
compensation costs
|
|
|
|
|
|
–
|
|
|
1,439
|
|
|
–
|
|
|
–
|
|
|
1,439
|
Net earnings for the
year
|
|
|
|
|
|
–
|
|
|
–
|
|
|
851
|
|
|
–
|
|
|
851
|
Other comprehensive
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
|
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
8,262
|
|
|
8,262
|
|
Changes in unrealized
gains/losses on forward exchange contracts, net of deferred income
taxes of $479
|
|
|
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
1,347
|
|
|
1,347
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive
income for the year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at August
31, 2017
|
|
|
|
|
$
|
90,411
|
|
$
|
18,184
|
|
$
|
127,160
|
|
$
|
(38,965)
|
|
$
|
196,790
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended August
31, 2018
|
|
|
Share
capital
|
|
Contributed
surplus
|
|
Retained
earnings
|
|
Accumulated
other
comprehensive
loss
|
|
Non-
controlling
interest
|
|
Total
shareholders'
equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at
September 1, 2017
|
|
$
|
90,411
|
|
$
|
18,184
|
|
$
|
127,160
|
|
$
|
(38,965)
|
|
$
|
–
|
|
$
|
196,790
|
Reclassification of
stock-based compensation costs
|
|
|
1,526
|
|
|
(1,526)
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
–
|
Stock-based
compensation costs
|
|
|
–
|
|
|
1,770
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
1,770
|
Business
combination
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
(3,662)
|
|
|
(3,662)
|
Acquisition of
non-controlling interest
|
|
|
–
|
|
|
–
|
|
|
(352)
|
|
|
–
|
|
|
4,014
|
|
|
3,662
|
Net loss for the
year
|
|
|
–
|
|
|
–
|
|
|
(11,902)
|
|
|
–
|
|
|
(352)
|
|
|
(12,254)
|
Other comprehensive
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
(6,491)
|
|
|
–
|
|
|
(6,491)
|
|
Changes in unrealized
gains/losses on forward exchange contracts, net of deferred income
taxes of $554
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
(1,894)
|
|
|
–
|
|
|
(1,894)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive
loss for the year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(20,639)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at August
31, 2018
|
|
$
|
91,937
|
|
$
|
18,428
|
|
$
|
114,906
|
|
$
|
(47,350)
|
|
$
|
–
|
|
$
|
177,921
|
EXFO
Inc.
|
Condensed
Unaudited Interim Consolidated Statements of Cash
Flows
|
|
|
|
|
|
|
|
|
|
(in thousands of US
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended August 31, 2018
|
|
Twelve
months ended August 31, 2018
|
|
Three
months ended August 31, 2017
|
|
Twelve
months ended August 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
for the period
|
|
$
|
(3,951)
|
|
$
|
(12,254)
|
|
$
|
844
|
|
$
|
851
|
Add (deduct) items
not affecting cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation costs
|
|
|
468
|
|
|
1,748
|
|
|
494
|
|
|
1,477
|
|
Depreciation and
amortization
|
|
|
3,414
|
|
|
15,771
|
|
|
2,056
|
|
|
7,191
|
|
Write-off of capital
assets
|
|
|
267
|
|
|
592
|
|
|
‒
|
|
|
‒
|
|
Change in fair value
of cash contingent consideration
|
|
|
46
|
|
|
(670)
|
|
|
(383)
|
|
|
(383)
|
|
Deferred
revenue
|
|
|
316
|
|
|
1,998
|
|
|
(1,303)
|
|
|
1,723
|
|
Deferred income
taxes
|
|
|
(1,165)
|
|
|
1,368
|
|
|
(109)
|
|
|
1,054
|
|
Share in net loss of
an associate
|
|
|
–
|
|
|
2,080
|
|
|
‒
|
|
|
‒
|
|
Gain on deemed
disposal of the investment in an associate
|
|
|
–
|
|
|
(2,080)
|
|
|
‒
|
|
|
‒
|
|
Changes in foreign
exchange gain/loss
|
|
|
58
|
|
|
(181)
|
|
|
2,051
|
|
|
1,096
|
|
|
|
(547)
|
|
|
8,372
|
|
|
3,650
|
|
|
13,009
|
Changes in non-cash
operating items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(418)
|
|
|
7,275
|
|
|
2,254
|
|
|
3,955
|
|
Income taxes and tax
credits
|
|
|
2,873
|
|
|
86
|
|
|
(1,154)
|
|
|
(2,386)
|
|
Inventories
|
|
|
(1,008)
|
|
|
(1,020)
|
|
|
920
|
|
|
911
|
|
Prepaid
expenses
|
|
|
(148)
|
|
|
57
|
|
|
(157)
|
|
|
(918)
|
|
Other
assets
|
|
|
(542)
|
|
|
(1,311)
|
|
|
6
|
|
|
(121)
|
|
Accounts payable,
accrued liabilities and provisions
|
|
|
1,028
|
|
|
1,033
|
|
|
(3,501)
|
|
|
(1,745)
|
|
Other
liabilities
|
|
|
(223)
|
|
|
(122)
|
|
|
165
|
|
|
165
|
|
|
|
1,015
|
|
|
14,370
|
|
|
2,183
|
|
|
12,870
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
short-term investments
|
|
|
(1,068)
|
|
|
(1,550)
|
|
|
(23)
|
|
|
(2,910)
|
Proceeds from
disposal and maturity of short-term investments
|
|
|
–
|
|
|
234
|
|
|
2,778
|
|
|
6,374
|
Purchases of capital
assets
|
|
|
(2,772)
|
|
|
(10,452)
|
|
|
(1,727)
|
|
|
(7,175)
|
Investment in an
associate
|
|
|
–
|
|
|
(12,530)
|
|
|
‒
|
|
|
‒
|
Business
combinations, net of cash acquired
|
|
|
(480)
|
|
|
(19,600)
|
|
|
(313)
|
|
|
(12,792)
|
|
|
|
(4,320)
|
|
|
(43,898)
|
|
|
715
|
|
|
(16,503)
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank loan
|
|
|
(189)
|
|
|
11,061
|
|
|
‒
|
|
|
‒
|
Repayment of
long-term debt
|
|
|
(661)
|
|
|
(1,688)
|
|
|
‒
|
|
|
(1,480)
|
Other
liabilities
|
|
|
(1,449)
|
|
|
(1,449)
|
|
|
‒
|
|
|
‒
|
Acquisition of
non-controlling interest
|
|
|
–
|
|
|
(3,657)
|
|
|
‒
|
|
|
‒
|
|
|
|
(2,299)
|
|
|
4,267
|
|
|
‒
|
|
|
(1,480)
|
Effect of foreign
exchange rate changes on cash
|
|
|
(127)
|
|
|
(416)
|
|
|
1,164
|
|
|
340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
cash
|
|
|
(5,731)
|
|
|
(25,677)
|
|
|
4,062
|
|
|
(4,773)
|
Cash – Beginning
of the period
|
|
|
18,489
|
|
|
38,435
|
|
|
34,373
|
|
|
43,208
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash – End of the
period
|
|
$
|
12,758
|
|
$
|
12,758
|
|
$
|
38,435
|
|
$
|
38,435
|
View original
content:http://www.prnewswire.com/news-releases/exfo-reports-fourth-quarter-and-fiscal-2018-results-300729867.html
SOURCE EXFO Inc.