- Successfully closes acquisition of publicly traded
Astellia
- Sales increase 7.8% to US$64.7
million, including US$1.8
million from Astellia
- Bookings improve 17.3% to US$65.6
million, including US$2.5
million from Astellia
QUEBEC CITY, April 10, 2018 /CNW Telbec/ - EXFO Inc.
(NASDAQ: EXFO) (TSX: EXF), the network test, monitoring and
analytics experts, reported today financial results for the second
quarter and first half ended February 28,
2018.
Following a successful public tender offer, EXFO achieved
majority control of Astellia's share capital on January 26, 2018 and assumed full control of the
France-based company on
February 28, 2018. Astellia is
recognized as a global leader in the performance analysis of mobile
networks and subscriber experience.
Sales increased 7.8% year-over-year to US$64.7 million in the second quarter of fiscal
2018 and 5.2% to US$128.1 million at
the halfway mark of the fiscal year. Sales, excluding the one-month
contribution of Astellia, attained US$62.9
million in the second quarter of 2018 compared to
US$60.0 million in the second quarter
of 2017. Astellia contributed US$1.8
million in sales in the second quarter and first half of
2018. Astellia's sales were reduced by US$0.3 million to account for acquisition-related
fair value adjustment of deferred revenue.
Bookings improved 17.3% year-over-year to US$65.6 million for a book-to-bill ratio of 1.01
in the second quarter of fiscal 2018 and 8.0% to US$131.5 million for a book-to-bill ratio of 1.03
at the halfway mark of the fiscal year. Bookings, excluding the
one-month contribution of Astellia, reached US$63.1 million in the second quarter of 2018
compared to US$55.9 million in the
same period last year. Astellia contributed US$2.5 million in bookings in the second quarter
and first half of 2018.
Gross margin before depreciation and amortization*
amounted to 60.9% of sales in the second quarter of fiscal 2018
compared to 61.7% in the second quarter of 2017. Gross margin
before depreciation and amortization amounted to 62.1% of sales at
the halfway mark of fiscal 2018 compared to 62.4% for the same
period in 2017.
IFRS net loss attributable to the parent interest totaled
US$4.7 million, or US$0.08 per share, in the second quarter of
fiscal 2018 and US$2.0 million, or
US$0.04 per share, at the halfway
mark of the fiscal year. In comparison, net earnings attributable
to the parent interest totaled US$1.0 million, or US$0.02 per diluted share, in the second quarter
of 2017 and US$4.3 million, or
US$0.08 per diluted share, in the
first half of 2017. EXFO's share of Astellia's net loss amounted to
US$2.7 million in the second quarter
and first half of 2018.
IFRS net loss attributable to the parent interest in the second
quarter of 2018 included US$2.7 million in after-tax amortization of
intangible assets, US$0.4 million in
stock-based compensation costs, US$0.6
million for the positive change in the fair value of the
cash contingent consideration related to Ontology Systems,
US$1.5 million in after-tax
acquisition costs related to Astellia, US$0.3 million for the acquisition-related
deferred revenue fair value adjustment, and US$1.5 million in income tax expenses to account
for the effects of the recent US tax reform.
IFRS net loss attributable to the parent interest in the first
half of 2018 included US$3.6 million
in after-tax amortization of intangible assets, US$0.8 million in stock-based compensation costs,
US$0.7 million for the positive
change in the fair value of the cash contingent consideration
related to Ontology Systems, US$2.3
million in after-tax acquisition costs related to Astellia,
US$0.3 million for the
acquisition-related deferred revenue fair value adjustment, and
US$1.5 million in income tax expenses
to account for the effects of the recent US tax reform.
Adjusted EBITDA* totaled US$2.5 million, or 3.9% of sales, in the second
quarter of 2018 and US$8.6 million, or 6.7% of sales, in the
first half of the fiscal year. In comparison, adjusted EBITDA
amounted to US$4.9 million, or
8.1% of sales, in the second quarter of 2017 and US$11.2 million, or 9.2% of sales, in the first
half of 2017. Astellia negatively affected adjusted EBITDA by
US$1.3 million in the second
quarter and first half of 2018. In addition, adjusted EBITDA
included acquisition-related costs of US$1.4
million in the second quarter of 2018 and US$2.1 million in the first half of the fiscal
year.
"I am thrilled with the closing of the Astellia acquisition as
it positions EXFO among the top five providers worldwide of service
assurance solutions," said Philippe
Morin, EXFO's Chief Executive Officer. "Together, we have
created a strong critical mass with solutions deployed at more than
250 network operators, while our global sales organizations
have been merged to maximize cross-selling opportunities.
Similarly, our unique portfolio of complementary technologies will
be combined to deliver unmatched capabilities in high-growth
markets like NFV/SDN, IoT and 5G. Although this transformative
acquisition involves a short-term financial impact, we expect the
additional sales volume, cross-selling opportunities, efficiencies
as well as complementary technology and service offerings will
contribute to earnings growth in fiscal 2019."
"In addition, I am pleased with the strong performance from our
Physical-layer product line in the second quarter of 2018," Mr.
Morin added. "Despite a seasonally soft reporting period, we
delivered robust sales and bookings due to our entrenched
leadership position in optical testing and contributions from
recent acquisitions."
Selected Financial
Information
|
(In thousands of
US dollars)
|
|
|
|
|
Q2
2018
|
|
Q2
2017
|
|
H1
2018
|
|
H1
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Physical-layer
sales
|
$
|
43,461
|
|
$
|
38,038
|
|
$
|
85,974
|
|
$
|
80,054
|
Protocol-layer
sales
|
|
20,880
|
|
|
22,097
|
|
|
41,521
|
|
|
42,106
|
Foreign exchange
gains (losses) on forward exchange contracts
|
|
381
|
|
|
(105)
|
|
|
618
|
|
|
(345)
|
Total
sales
|
$
|
64,722
|
|
$
|
60,030
|
|
$
|
128,113
|
|
$
|
121,815
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Physical-layer
bookings
|
$
|
41,431
|
|
$
|
34,031
|
|
$
|
89,783
|
|
$
|
78,121
|
Protocol-layer
bookings
|
|
23,774
|
|
|
21,992
|
|
|
41,064
|
|
|
44,001
|
Foreign exchange
gains (losses) on forward exchange contracts
|
|
381
|
|
|
(105)
|
|
|
618
|
|
|
(345)
|
Total
bookings
|
$
|
65,586
|
|
$
|
55,918
|
|
$
|
131,465
|
|
$
|
121,777
|
Book-to-bill ratio
(bookings/sales)
|
|
1.01
|
|
|
0.93
|
|
|
1.03
|
|
|
1.00
|
Gross margin before
depreciation and amortization*
|
$
|
39,396
|
|
$
|
37,041
|
|
$
|
79,498
|
|
$
|
76,013
|
|
|
|
60.9%
|
|
|
61.7%
|
|
|
62.1%
|
|
|
62.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other selected
information:
|
|
|
|
|
|
|
|
|
|
|
|
|
IFRS net earnings
(loss) attributable to the parent interest
|
$
|
(4,660)
|
|
$
|
1,008
|
|
$
|
(1,981)
|
|
$
|
4,311
|
|
Amortization of
intangible assets
|
$
|
3,056
|
|
$
|
768
|
|
$
|
4,175
|
|
$
|
1,195
|
|
Stock-based
compensation costs
|
$
|
438
|
|
$
|
353
|
|
$
|
840
|
|
$
|
611
|
|
Change in fair value
of cash contingent consideration
|
$
|
(561)
|
|
$
|
‒
|
|
$
|
(716)
|
|
$
|
‒
|
|
Acquisition-related
deferred revenue fair value adjustment
|
$
|
309
|
|
$
|
‒
|
|
$
|
309
|
|
$
|
‒
|
|
Income tax expense
for US tax reform
|
$
|
1,528
|
|
$
|
‒
|
|
$
|
1,528
|
|
$
|
‒
|
|
Net income tax effect
of the above items
|
$
|
(394)
|
|
$
|
(162)
|
|
$
|
(566)
|
|
$
|
(226)
|
|
Foreign exchange
(gain) loss
|
$
|
(8)
|
|
$
|
272
|
|
$
|
(1,226)
|
|
$
|
(240)
|
|
Adjusted
EBITDA*
|
$
|
2,492
|
|
$
|
4,875
|
|
$
|
8,551
|
|
$
|
11,196
|
Operating Expenses
Selling and administrative expenses
totaled US$24.9 million, or 38.5% of
sales in the second quarter of fiscal 2017 compared to US$21.3 million, or 35.4% of sales, in the same
period last year. At the halfway mark of fiscal 2018, selling and
administrative expenses amounted to US$48.1
million, or 37.6% of sales, compared to US$42.9 million, or 35.2% of sales, in the first
half of 2017.
Net R&D expenses totaled US$13.1
million, or 20.2% of sales, in the second quarter of fiscal
2018 compared to US$11.3 million, or 18.8% of sales, in
the second quarter of 2017. At the halfway mark of fiscal 2018, net
R&D expenses amounted to US$24.3
million, or 19.0% of sales, compared to US$22.6 million, or 18.5% of sales, in the first
half of 2017.
Second-Quarter Highlights
- Sales. Sales increased 7.8% year-over-year due to a solid
performance of the Physical-layer product line, revenue
contributions from the Astellia, Yenista Optics and Ontology
Systems acquisitions, and the positive impact of the decrease in
the average value of the US dollar versus other currencies.
Physical-layer sales accounted for 68% of total revenue in the
second quarter of 2018, while Protocol-layer sales totaled 32%.
Revenue distribution among the three main selling regions amounted
to 49% in the Americas, 33% in Europe, Middle
East and Africa (EMEA) and
18% in Asia-Pacific. EXFO's top
customer accounted for 9.6% of sales, while the top three
represented 16.9%.
- Profitability. IFRS net loss attributable to the parent
interest totaled US$4.7 million in
the second quarter of 2018, while adjusted EBITDA amounted to
US$2.5 million. The company also
generated US$6.3 million in cash
flows from operations in the second quarter.
- Innovation. EXFO unveiled two key solutions in preparation for
Mobile World Congress and Optical Fiber Conference, high-profile
industry events held during and after the quarter-end. Major
product introductions included SkyRAN, a scalable 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. EXFO also introduced
the CTP10 Component Test Platform with related modules, the fastest
test system on the market for measuring insertion loss and return
loss on a wide variety of passive optical components, including
photonics integrated circuits.
Business Outlook
EXFO forecasts IFRS sales between
US$68.0 million and US$73.0 million for the third quarter of fiscal
2018; 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$0.19 and US$0.15
per share. IFRS net loss includes US$0.09 per share in after-tax amortization of
intangible assets and stock-based compensation costs.
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, Astellia's preliminary purchase price
allocation (PPA) as well as exchange rates as of the day of this
news release.
Conference Call and Webcast
EXFO will host a
conference call today at 5 p.m. (Eastern
time) to review second quarter results for fiscal 2018.
To listen to the conference call and participate in the
question period via telephone, dial 1-323-794-2551. Please
take note the following participant passcode will be required:
9600577. Germain Lamonde, founder
and Executive Chairman, Philippe
Morin, Chief Executive Officer, and Pierre Plamondon, 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 8:00 p.m. on April 17,
2018. The replay number is 1-719-457-0820 and the required
participant passcode is 9600577. 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 develops smarter network test,
monitoring and analytics solutions for the world's leading
communications service providers, network equipment manufacturers
and webscale companies. Since 1985, we've worked side by side with
our customers in the lab, field, data center, boardroom and beyond
to pioneer essential technology and methods for each phase of the
network lifecycle. Our portfolio of test orchestration and
real-time 3D analytics solutions turns complex into simple and
delivers business-critical insights from the network, service and
subscriber dimensions. Most importantly, we help our customers
flourish in a rapidly transforming industry where "good enough"
testing, monitoring and analytics just aren't good enough
anymore—they never were for us, anyway. 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 as
well as 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; our
ability to successfully integrate businesses that we acquire;
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. This discussion and analysis should be read in
conjunction with the consolidated financial statements.
*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 less
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, change in fair value
of cash contingent consideration, acquisition-related deferred
revenue fair value adjustment, 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 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
historical and prospective financial performance, as well as its
performance relative to competitors. These non-IFRS measures are
also the financial measures used by financial analysts to evaluate
and compare EXFO's performance against competitors and industry
players in the company's sector. Finally, these measures help EXFO
plan and forecast future periods as well as make operational and
strategic decisions. EXFO believes that providing this information,
in addition to the IFRS measures, allows investors 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 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:
Non-IFRS
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2
2018
|
|
Q2
2017
|
|
H1
2018
|
|
H1
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
IFRS sales
|
$
|
64,722
|
|
$
|
60,030
|
|
$
|
128,113
|
|
$
|
121,815
|
Acquisition-related
deferred revenue fair value adjustment
|
|
309
|
|
|
‒
|
|
|
309
|
|
|
‒
|
Non-IFRS
sales
|
$
|
65,031
|
|
$
|
60,030
|
|
$
|
128,422
|
|
$
|
121,815
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2
2018
|
|
Q2
2017
|
|
H1
2018
|
|
H1
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
IFRS net earnings
(loss) attributable to the parent interest for the
period
|
$
|
(4,660)
|
|
$
|
1,008
|
|
$
|
(1,981)
|
|
$
|
4,311
|
|
|
|
|
|
|
|
|
|
|
|
|
Add
(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of
property, plant and equipment
|
|
1,263
|
|
|
962
|
|
|
2,417
|
|
|
1,865
|
Amortization of
intangible assets
|
|
3,056
|
|
|
768
|
|
|
4,175
|
|
|
1,195
|
Interest and other
(income) expense
|
|
334
|
|
|
(9)
|
|
|
672
|
|
|
(29)
|
Income
taxes
|
|
2,321
|
|
|
1,521
|
|
|
4,061
|
|
|
3,483
|
Stock-based
compensation costs
|
|
438
|
|
|
353
|
|
|
840
|
|
|
611
|
Change in fair value
of cash contingent consideration
|
|
(561)
|
|
|
‒
|
|
|
(716)
|
|
|
‒
|
Acquisition-related
deferred revenue fair value adjustment
|
|
309
|
|
|
‒
|
|
|
309
|
|
|
‒
|
Share in net loss of
an associate
|
|
2,080
|
|
|
‒
|
|
|
2,080
|
|
|
‒
|
Gain on the deemed
disposal of the investment in an associate
|
|
(2,080)
|
|
|
‒
|
|
|
(2,080)
|
|
|
‒
|
Foreign exchange
(gain) loss
|
|
(8)
|
|
|
272
|
|
|
(1,226)
|
|
|
(240)
|
Adjusted EBITDA for
the period (1)(2)
|
$
|
2,492
|
|
$
|
4,875
|
|
$
|
8,551
|
|
$
|
11,196
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA in
percentage of sales
|
|
3.9%
|
|
|
9.6%
|
|
|
6.7%
|
|
|
9.2%
|
|
|
(1)
|
Astellia negatively
impacted adjusted EBITDA by $1.3 million for Q2 2018 and S1 2018
(nil for Q2 2017 and S1 2017)
|
(2)
|
Includes
acquisition-related costs of $1.4 million for Q2 2018 and $2.1
million for S1 2018 ($0.6 million in Q2 2017 and $0.7 million for
S1 2017)
|
EXFO
Inc.
|
Unaudited
Condensed Interim Consolidated Balance
Sheets
|
|
|
|
|
|
|
(in thousands of US
dollars)
|
|
|
|
|
|
|
|
As
at
February
28,
2018
|
|
As
at
August
31,
2017
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash
|
$
|
12,553
|
|
$
|
38,435
|
Short-term
investments
|
|
1,022
|
|
|
775
|
Accounts
receivable
|
|
|
|
|
|
|
Trade
|
|
49,837
|
|
|
41,130
|
|
Other
|
|
5,173
|
|
|
3,907
|
Income taxes and tax
credits recoverable
|
|
9,261
|
|
|
4,955
|
Inventories
|
|
39,439
|
|
|
33,832
|
Prepaid
expenses
|
|
5,253
|
|
|
4,202
|
Other
assets
|
|
1,512
|
|
|
‒
|
|
|
124,050
|
|
|
127,236
|
|
|
|
|
|
|
Tax credits
recoverable
|
|
47,615
|
|
|
38,111
|
Property, plant
and equipment
|
|
44,182
|
|
|
40,132
|
Intangible
assets
|
|
32,567
|
|
|
11,183
|
Goodwill
|
|
41,725
|
|
|
35,077
|
Deferred income
tax assets
|
|
4,754
|
|
|
6,555
|
Other
assets
|
|
852
|
|
|
947
|
|
|
|
|
|
|
|
$
|
295,745
|
|
$
|
259,241
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Bank loan
|
$
|
2,000
|
|
$
|
‒
|
Accounts payable and
accrued liabilities
|
|
52,946
|
|
|
36,776
|
Provisions
|
|
466
|
|
|
3,889
|
Income taxes
payable
|
|
689
|
|
|
663
|
Deferred
revenue
|
|
18,626
|
|
|
11,554
|
Other
liabilities
|
|
4,860
|
|
|
‒
|
Current portion of
long-term debt
|
|
3,021
|
|
|
‒
|
|
|
82,608
|
|
|
52,882
|
|
|
|
|
|
|
Provisions
|
|
1,579
|
|
|
‒
|
Deferred
revenue
|
|
5,544
|
|
|
6,257
|
Long-term
debt
|
|
7,675
|
|
|
‒
|
Deferred income
tax liabilities
|
|
5,156
|
|
|
3,116
|
Other
liabilities
|
|
544
|
|
|
196
|
|
|
103,106
|
|
|
62,451
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
Share
capital
|
|
91,684
|
|
|
90,411
|
Contributed
surplus
|
|
17,767
|
|
|
18,184
|
Retained
earnings
|
|
124,827
|
|
|
127,160
|
Accumulated other
comprehensive loss
|
|
(41,639)
|
|
|
(38,965)
|
|
|
192,639
|
|
|
196,790
|
|
|
|
|
|
|
|
$
|
295,745
|
|
$
|
259,241
|
EXFO
Inc.
|
Unaudited
Condensed Interim Consolidated
Statements of Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of US
dollars, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months
ended
February
28,
2018
|
|
Six
months ended February 28, 2018
|
|
Three
months ended February 28, 2017
|
|
Six
months ended February 28, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
64,722
|
|
$
|
128,113
|
|
$
|
60,030
|
|
$
|
121,815
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
(1)
|
|
25,326
|
|
|
48,615
|
|
|
22,989
|
|
|
45,802
|
Selling and
administrative
|
|
24,916
|
|
|
48,109
|
|
|
21,255
|
|
|
42,850
|
Net research and
development
|
|
13,087
|
|
|
24,339
|
|
|
11,264
|
|
|
22,578
|
Depreciation of
property, plant and equipment
|
|
1,263
|
|
|
2,417
|
|
|
962
|
|
|
1,865
|
Amortization of
intangible assets
|
|
3,056
|
|
|
4,175
|
|
|
768
|
|
|
1,195
|
Change in fair value
of cash contingent consideration
|
|
(561)
|
|
|
(716)
|
|
|
‒
|
|
|
‒
|
Interest and other
(income) expense
|
|
334
|
|
|
672
|
|
|
(9)
|
|
|
(29)
|
Foreign exchange
(gain) loss
|
|
(8)
|
|
|
(1,226)
|
|
|
272
|
|
|
(240)
|
Share in net loss of
an associate
|
|
2,080
|
|
|
2,080
|
|
|
‒
|
|
|
‒
|
Gain on deemed
disposal of the investment in an associate
|
|
(2,080)
|
|
|
(2,080)
|
|
|
‒
|
|
|
‒
|
Earnings (loss)
before income taxes
|
|
(2,691)
|
|
|
1,728
|
|
|
2,529
|
|
|
7,794
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
2,321
|
|
|
4,061
|
|
|
1,521
|
|
|
3,483
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
(loss) for the period
|
|
(5,012)
|
|
|
(2,333)
|
|
|
1,008
|
|
|
4,311
|
Net loss for the
period attributable to non-controlling interest
|
|
(352)
|
|
|
(352)
|
|
|
‒
|
|
|
‒
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
(loss) for the period attributable to parent
interest
|
$
|
(4,660)
|
|
$
|
(1,981)
|
|
$
|
1,008
|
|
$
|
4,311
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
net earnings (loss) attributable to parent interest per
share
|
$
|
(0.08)
|
|
$
|
(0.04)
|
|
$
|
0.02
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted
average number of shares outstanding (000's)
|
|
54,975
|
|
|
54,890
|
|
|
54,506
|
|
|
54,195
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average number of shares outstanding (000's)
|
|
54,975
|
|
|
54,890
|
|
|
55,681
|
|
|
55,341
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The cost of sales is
exclusive of depreciation and amortization, shown
separately.
|
EXFO
Inc.
|
Unaudited
Condensed Interim Consolidated
Statements of Comprehensive Income
(Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of US
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months
ended
February
28,
2018
|
|
Six
months
ended
February
28,
2018
|
|
Three
months
ended
February
28,
2017
|
|
Six
months
ended
February
28,
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
(loss) for the period
|
$
|
(5,012)
|
|
$
|
(2,333)
|
|
$
|
1,008
|
|
$
|
4,311
|
Other comprehensive
income (loss), net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
Items that may be
reclassified subsequently to net earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
2,286
|
|
|
(1,844)
|
|
|
2,019
|
|
|
(2,198)
|
|
Unrealized
gains/losses on forward exchange contracts
|
|
39
|
|
|
(485)
|
|
|
326
|
|
|
(235)
|
|
Reclassification of
realized gains/losses on forward exchange contracts
in net earnings
|
|
(225)
|
|
|
(608)
|
|
|
139
|
|
|
320
|
|
Deferred income taxes
on gains/losses on forward exchange contracts
|
|
48
|
|
|
263
|
|
|
(100)
|
|
|
(8)
|
Other comprehensive
income (loss)
|
|
2,148
|
|
|
(2,674)
|
|
|
2,384
|
|
|
(2,121)
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income (loss) for the period
|
|
(2,864)
|
|
|
(5,007)
|
|
|
3,392
|
|
|
2,190
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss
for the period attributable to non-controlling
interest
|
|
(352)
|
|
|
(352)
|
|
|
‒
|
|
|
‒
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income (loss) for the period attributable to parent
interest
|
$
|
(2,512)
|
|
$
|
(4,655)
|
|
$
|
3,392
|
|
$
|
2,190
|
EXFO
Inc.
|
Unaudited
Condensed Interim Consolidated
Statements of Changes in Shareholders'
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of US
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
February 28, 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
|
|
835
|
|
|
(835)
|
|
|
–
|
|
|
–
|
|
|
–
|
Stock-based
compensation costs
|
|
–
|
|
|
528
|
|
|
–
|
|
|
–
|
|
|
528
|
Net earnings for the
period
|
|
–
|
|
|
–
|
|
|
4,311
|
|
|
–
|
|
|
4,311
|
Other comprehensive
income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
–
|
|
|
–
|
|
|
–
|
|
|
(2,198)
|
|
|
(2,198)
|
|
Changes in unrealized
gains/losses on forward exchange contracts, net of deferred income
taxes of $8
|
|
–
|
|
|
–
|
|
|
–
|
|
|
77
|
|
|
77
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at
February 28, 2017
|
$
|
89,841
|
|
$
|
17,843
|
|
$
|
130,620
|
|
$
|
(50,695)
|
|
$
|
187,609
|
|
Six months ended
February 28, 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
|
|
1,273
|
|
|
(1,273)
|
|
|
‒
|
|
|
‒
|
|
|
‒
|
|
|
‒
|
Stock-based
compensation costs
|
|
‒
|
|
|
856
|
|
|
‒
|
|
|
‒
|
|
|
‒
|
|
|
856
|
Business
combination
|
|
‒
|
|
|
‒
|
|
|
‒
|
|
|
‒
|
|
|
(3,662)
|
|
|
(3,662)
|
Acquisition of
non-controlling interest
|
|
‒
|
|
|
‒
|
|
|
(352)
|
|
|
‒
|
|
|
4,014
|
|
|
3,662
|
Net loss for the
period
|
|
‒
|
|
|
‒
|
|
|
(1,981)
|
|
|
‒
|
|
|
(352)
|
|
|
(2,333)
|
Other comprehensive
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
‒
|
|
|
‒
|
|
|
‒
|
|
|
(1,844)
|
|
|
‒
|
|
|
(1,844)
|
|
Changes in unrealized
gains/losses on forward exchange contracts, net of deferred income
taxes of $263
|
|
‒
|
|
|
‒
|
|
|
‒
|
|
|
(830)
|
|
|
‒
|
|
|
(830)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss
for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5,007)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at
February 28, 2018
|
$
|
91,684
|
|
$
|
17,767
|
|
$
|
124,827
|
|
$
|
(41,639)
|
|
$
|
‒
|
|
$
|
192,639
|
EXFO
Inc.
|
Unaudited
Condensed Interim Consolidated
Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of US
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months
ended
February
28,
2018
|
|
Six
months
ended
February
28,
2018
|
|
Three
months
ended
February
28,
2017
|
|
Six
months
ended
February
28,
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
for the period
|
$
|
(5,012)
|
|
$
|
(2,333)
|
|
$
|
1,008
|
|
$
|
4,311
|
Add (deduct) items
not affecting cash
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation costs
|
|
438
|
|
|
840
|
|
|
353
|
|
|
611
|
|
Depreciation and
amortization
|
|
4,319
|
|
|
6,592
|
|
|
1,730
|
|
|
3,060
|
|
Write-off of capital
assets
|
|
124
|
|
|
248
|
|
|
–
|
|
|
–
|
|
Change in fair value
of cash contingent consideration
|
|
(561)
|
|
|
(716)
|
|
|
–
|
|
|
–
|
|
Deferred
revenue
|
|
3,016
|
|
|
2,234
|
|
|
3,022
|
|
|
2,947
|
|
Deferred income
taxes
|
|
2,384
|
|
|
2,144
|
|
|
312
|
|
|
459
|
|
Share in net loss of
an associate
|
|
2,080
|
|
|
2,080
|
|
|
–
|
|
|
–
|
|
Gain on deemed
disposal of the investment in an associate
|
|
(2,080)
|
|
|
(2,080)
|
|
|
–
|
|
|
–
|
|
Changes in foreign
exchange gain/loss
|
|
611
|
|
|
364
|
|
|
107
|
|
|
(431)
|
|
|
5,319
|
|
|
9,373
|
|
|
6,532
|
|
|
10,957
|
Changes in non-cash
operating items
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
4,255
|
|
|
5,340
|
|
|
5,160
|
|
|
2,602
|
|
Income taxes and tax
credits
|
|
(3,018)
|
|
|
(2,959)
|
|
|
(46)
|
|
|
(390)
|
|
Inventories
|
|
779
|
|
|
(1,174)
|
|
|
924
|
|
|
(324)
|
|
Prepaid
expenses
|
|
(129)
|
|
|
189
|
|
|
(156)
|
|
|
102
|
|
Other
assets
|
|
(528)
|
|
|
(524)
|
|
|
(37)
|
|
|
(24)
|
|
Accounts payable,
accrued liabilities and provisions
|
|
(447)
|
|
|
(1,816)
|
|
|
2,011
|
|
|
586
|
|
Other
liabilities
|
|
22
|
|
|
210
|
|
|
1
|
|
|
1
|
|
|
6,253
|
|
|
8,639
|
|
|
14,389
|
|
|
13,510
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
short-term investments
|
|
(248)
|
|
|
(482)
|
|
|
(20)
|
|
|
(316)
|
Proceeds from disposal
and maturity of short-term investments
|
|
234
|
|
|
234
|
|
|
298
|
|
|
298
|
Purchases of capital
assets
|
|
(2,258)
|
|
|
(4,249)
|
|
|
(1,656)
|
|
|
(2,893)
|
Investment in an
associate
|
|
(2,219)
|
|
|
(12,530)
|
|
|
–
|
|
|
–
|
Business
combinations, net of cash acquired
|
|
(9,580)
|
|
|
(19,120)
|
|
|
–
|
|
|
(5,000)
|
|
|
(14,071)
|
|
|
(36,147)
|
|
|
(1,378)
|
|
|
(7,911)
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
|
|
|
|
Bank loan
|
|
2,064
|
|
|
2,066
|
|
|
–
|
|
|
–
|
Repayment of
long-term debt
|
|
(200)
|
|
|
(270)
|
|
|
–
|
|
|
–
|
|
|
1,864
|
|
|
1,796
|
|
|
–
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of foreign
exchange rate changes on cash
|
|
56
|
|
|
(170)
|
|
|
271
|
|
|
(464)
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in cash
during the period
|
|
(5,898)
|
|
|
(25,882)
|
|
|
13,282
|
|
|
5,135
|
Cash – Beginning
of the period
|
|
18,451
|
|
|
38,435
|
|
|
35,061
|
|
|
43,208
|
Cash – End of the
period
|
$
|
12,553
|
|
$
|
12,553
|
|
$
|
48,343
|
|
$
|
48,343
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
information
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
paid
|
$
|
587
|
|
$
|
1,269
|
|
$
|
603
|
|
$
|
1,561
|
Additions to capital
assets
|
$
|
2,699
|
|
$
|
5,588
|
|
$
|
2,483
|
|
$
|
3,662
|
EXFO-F
View original
content:http://www.prnewswire.com/news-releases/exfo-reports-second-quarter-results-for-fiscal-2018-300627614.html
SOURCE EXFO Inc.