EXFO EXFO Reports Record Sales and Bookings in the First...by GlobeNewswire Jan 12 2011 4:27PM
Exfo Inc.'s (EXFO) U.S.-listed shares jumped 20% after the Canadian telecom-testing-equipment maker reported first-quarter earnings that exceeded its own forecast. Get full Canada coverage.
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EXFO EXFO Reports Record Sales and Bookings in the First... by GlobeNewswire Jan 12 2011 4:27PM
Jan 12, 2011 (GlobeNewswire via COMTEX) --
-- Telecom sales increase 62.9% year-over-year to US$65.7 million
-- Telecom bookings improve 92.0% year-over-year to US$89.8 million
(book-to-bill of 1.37)
-- Adjusted EBITDA* amounts to US$8.2 million compared to US$4.4 million in
Q1 2010
QUEBEC CITY, Jan. 12, 2011 (GLOBE NEWSWIRE) -- EXFO Inc. (EXFO) reported today record sales and bookings for its first quarter ended November 30, 2010, with total sales and GAAP net earnings above the company's guidance range.
Total sales, including a one-month revenue contribution from the divested Life Sciences and Industrial Division (referred to as "discontinued operations" in the financial statements), increased 48.5% to US$67.6 million in the first quarter of fiscal 2011 from US$45.6 million in the first quarter of 2010 and 3.7% from US$65.2 million in the fourth quarter of 2010. Management had forecasted total sales between US$61 and US$66 million for the first quarter of 2011.
Telecom sales (referred to as "continuing operations" in the financial statements) increased 62.9% to US$65.7 million in the first quarter of 2011 from US$40.3 million in the first quarter of 2010 and 12.1% from US$58.6 million in the fourth quarter of 2010. NetHawk Oyj, which was acquired in mid-March 2010, contributed US$6.4 million to EXFO's revenues in the first quarter of 2011. Consequently, organic telecom sales increased 47.0% year-over-year.
Telecom bookings improved 92.0% to US$89.8 million in the first quarter of fiscal 2011 from US$46.8 million in the same period last year and 60.9% from US$55.8 million in the fourth quarter of 2010. The company's telecom book-to-bill ratio was 1.37 in the first quarter of 2011.
Telecom gross margin reached 62.2% of sales in the first quarter of fiscal 2011 compared to 65.2% in the first quarter of 2010 and 64.8% in the fourth quarter of 2010.
GAAP net earnings in the first quarter of fiscal 2011 totaled US$14.1 million, or US$0.23 per diluted share, above EXFO's guidance between US$0.17 and US$0.21 per diluted share. In comparison, the company generated US$0.3 million, or US$0.01 per diluted share, in the same period last year and US$5.0 million, or US$0.08 per diluted share, in the fourth quarter of fiscal 2010. It should be noted that EXFO recorded an after-tax gain of US$13.1 million, or US$0.21 per diluted share, from the disposal of discontinued operations (Life Sciences and Industrial Division) in the first quarter of 2011. GAAP net earnings in the first quarter of 2011 also included US$2.6 million in amortization of intangible assets and US$0.7 million in stock-based compensation costs. The former item resulted in an income tax recovery of US$0.2 million. As well, the company reported a foreign exchange loss of US$1.1 million in the first quarter of 2011.
"I am really pleased with our overall performance in the first quarter of 2011 as we posted our fifth consecutive quarter of sales growth and delivered unprecedented telecom bookings of nearly $90 million for a book-to-bill ratio of 1.37," said Germain Lamonde, EXFO's Chairman, President and CEO. "We generated strong sales and bookings growth year-over-year across all our telecom business segments and sales regions, while enjoying expanded traction in the fast-growing wireless market. These outstanding results demonstrate our superior market positioning, continued market-share gains across most businesses and some year-end money from network operators."
"As wireline and wireless operators are escalating investments in broadband deployments and IP convergence in order to increase network performance and lower operating expenses, EXFO is benefiting from ongoing VDSL2 and FTTH rollouts in access networks, upgrades from 10G to 40G and 100G in metro rings and long-haul routes and, on the wireless side, migration from 2G to 3G and 4G/LTE networks," Mr. Lamonde added. "As a result, I expect EXFO will continue delivering superior revenue growth, while remaining true to its commitment of increasing EBITDA even faster over a three-year horizon from 2010-2012."
Operating Expenses
Telecom selling and administrative expenses totaled US$19.9 million, or 30.3% of sales, in the first quarter of fiscal 2011 compared to US$13.8 million, or 34.3% of sales, in the same period last year and US$18.9 million, or 32.3% of sales, in the fourth quarter of 2010.
Telecom gross research and development expenses amounted to US$13.7 million, or 20.9% of sales, in the first quarter of fiscal 2011 compared to US$9.2 million, or 22.7% of sales, in the first quarter of 2010 and US$12.4 million, or 21.1% of sales, in the fourth quarter of 2010.
Telecom net R&D expenses totaled US$11.6 million, or 17.7% of sales, in the first quarter of fiscal 2011 compared to US$7.8 million, or 19.3% of sales, in the same period last year and US$10.5 million, or 17.9% of sales, in the fourth quarter of 2010.
First-Quarter Business Highlights -- Broadband Deployments and IP Fixed-Mobile Network Convergence
-- EXFO generated record telecom orders of US$89.8 million, reflecting
strong bookings in all three businesses (Optical, Protocol and Copper
Access) and sales regions (Americas, EMEA and Asia-Pacific).
-- Two Tier-1 network operators placed follow-on orders totaling more than
US$8 million for EXFO's AXS-200/635 Triple-Play Tester in the first
quarter of 2011. EXFO's test solution will support their ongoing
deployment of next-generation VDSL2 services over hybrid network access
architectures.
-- A Tier-1 US wireless operator selected EXFO's service assurance solution
for monitoring Ethernet backhaul networks. The initial contract in
excess of US$1 million could reach several millions of dollars.
-- EXFO's wireless and 40G/100G wireline test solutions gained significant
traction with customers.
-- EXFO significantly strengthened its "FTB Ecosystem" of modular test
platforms, now based on a common Windows operating system, by releasing
the second generation of its highly successful FTB-200 platform,
launching the entry-level FTB-1 handheld platform with related OTDR and
Ethernet test modules, adding ODU0 and ODUflex test capabilities to its
industry-leading 10G and 40G test solutions, and introducing the
ConnectorMax Pass/Fail Connector Endface Assessment software option.
-- Altogether, EXFO launched seven new products in the first quarter of
2011.
Profitable Growth Path
EXFO generated adjusted EBITDA* of US$8.2 million, or 12.1% of sales, in the first quarter of fiscal 2011 on total revenue of US$67.9 million. It should be noted the company recorded a pre-tax foreign exchange loss of US$1.1 million in the first quarter of 2011. Foreign exchange losses or gains are included in EBITDA. See the section below entitled "Non-GAAP Financial Measures" for a reconciliation of EBITDA and adjusted EBITDA with GAAP net earnings.
Divestiture
EXFO sold its Life Sciences and Industrial Division in the first quarter of 2011, realizing a gain of US$13.2 million, to become a pure-play supplier in the telecom industry.
Business Outlook
EXFO forecasts sales between US$70.0 million and US$75.0 million for the second quarter of fiscal 2011, while GAAP net earnings are expected to range between US$0.03 and US$0.07 per diluted share. GAAP net earnings include US$0.04 per share in after-tax amortization of intangible assets and stock-based compensation costs. The company also anticipates a pre-tax, foreign exchange loss of US$0.03 per share following the significant increase in the value of the Canadian dollar since November 30, 2010.
This guidance was established by management based on existing backlog as of the date of this press release, seasonality, expected bookings for the remaining of the quarter, as well as exchange rates as of the day of this press release.
Conference Call and Webcast
EXFO will host a conference call today at 5 p.m. (Eastern time) to review its financial results for the first quarter of fiscal 2011. To listen to the conference call and participate in the question period via telephone, dial 1-416-981-9009. Germain Lamonde, Chairman, President and CEO, and Pierre Plamondon, CA, Vice-President of Finance and Chief Financial Officer, will participate in the call. An audio replay of the conference call will be available one hour after the event until 7 p.m. on January 19, 2011. The replay number is 1-402-977-9141 and the reservation number is 21494191. The audio Webcast and replay of the conference call will also be available on EXFO's Website at www.EXFO.com , under the Investors section.
About EXFO
Listed on the NASDAQ and TSX stock exchanges, EXFO is among the leading providers of next-generation test and service assurance solutions for wireless and wireline network operators and equipment manufacturers in the global telecommunications industry. The company offers innovative solutions for the development, installation, management and maintenance of converged, IP fixed and mobile networks -- from the core to the edge. Key technologies supported include 3G, 4G/LTE, IMS, Ethernet, OTN, FTTx, and various optical technologies (accounting for an estimated 35% of the portable fiber-optic test market). EXFO has a staff of approximately 1600 people in 25 countries, supporting more than 2000 telecom customers worldwide. For more information, visit www.EXFO.com .
EXFO Brand Name
The corporate name of the company is EXFO Inc. The company requests that all media outlets and publications use the corporate name ("EXFO Inc.") or abbreviated name ("EXFO") in capital letters for branding purposes. EXFO would like to thank all parties in advance for their cooperation.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, and we intend that such forward-looking statements be subject to the safe harbors created thereby. Forward-looking statements are statements other than historical information or statements of current condition. Words such as may, will, expect, believe, anticipate, intend, could, estimate, continue, or the negative or comparable terminology are intended to identify forward-looking statements. In addition, any statements that refer to expectations, projections or other characterizations of future events and circumstances are considered forward-looking statements. They are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those in forward-looking statements due to various factors including our ability to successfully integrate our acquired and to-be-acquired businesses; fluctuating exchange rates; consolidation in the global telecommunications test, measurement and service assurance industry and increased competition among vendors; capital spending levels in the telecommunications industry; concentration of sales; the effects of the additional actions we have taken in response to economic uncertainty (including our ability to quickly adapt cost structures with anticipated levels of business, ability to manage inventory levels with market demand); market acceptance of our new products and other upcoming products; limited visibility with regards to customer orders and the timing of such orders; our ability to successfully expand international operations; the retention of key technical and management personnel; and future economic, competitive, financial and market condition. 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 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 press release. 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-GAAP Financial Measures
EXFO provides non-GAAP financial measures (EBITDA* and adjusted EBITDA*) as supplemental information regarding its operational performance. The company uses these measures for the purposes of evaluating its historical and prospective financial performance, as well as its performance relative to competitors. These measures also help the company to plan and forecast for future periods as well as to make operational and strategic decisions. EXFO believes that providing this information to investors, in addition to GAAP measures, allows them to see the company's results through the eyes of management, and to better understand its historical and future financial performance.
The presentation of this additional information is not prepared in accordance with GAAP. 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 GAAP.
* EBITDA is defined as net earnings before interest, income taxes, amortization of property, plant and equipment, amortization of intangible assets. Adjusted EBITDA represents EBITDA excluding the gain from the disposal of discontinued operations.
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: EXFO Inc.
CONTACT: Vance Oliver
Manager, Investor Relations
(418) 683-0913, Ext. 3733
[email protected]
EXFO to Enhance Its Offering for Next-Generation Networks... by GlobeNewswire Jan 12 2011 9:00AM
QUEBEC CITY, Jan 12, 2011 (GlobeNewswire via COMTEX) -- EXFO Inc. (EXFO) announced today that it has selected Qosmos to supply critical network intelligence technology to be embedded in EXFO's NetHawk M5 analyzers and BrixMobile network monitoring system. The combined solution will enable subscriber-based, application-level quality monitoring, essential in delivering a high quality of experience when assessing LTE and other packet network environments.
As mobile carriers shift toward an all-IP network, visibility into every customer's quality of experience (QoE) and quality of service (QoS) becomes critical in their day-to-day operations. Visibility into QoE is increasingly becoming a requirement for carriers in order to manage their service-level performance, to reduce customer churn and to launch marketing initiatives for enhancing competitiveness.
"EXFO will use Qosmos' ixEngine to extract detailed, real-time traffic metadata from the carrier network to accurately classify each user's traffic by application," said Thibaut Bechetoille, CEO at Qosmos. "Using our advanced network intelligence capability, EXFO will then analyze the data to provide user-level DPI analytics and pinpoint the cause of service-quality problems. By providing mobile operators with capabilities beyond DPI, the combined EXFO/Qosmos solution allows service providers to be more effective in improving the quality of experience and overall satisfaction for subscribers."
"With this new partnership, EXFO Service Assurance enhances its NetHawk M5 protocol analyzers and BrixMobile offering with DPI analytics and customer experience management. When it comes to testing and monitoring wireless protocols, EXFO's leading-edge NetHawk M5 protocol analyzers and BrixMobile system provide unique scalability from portable sets to multi-user systems with high-performance packet capture and a complete multitechnology 2G/3G/LTE analysis and call tracing," said Vivian Hudson, Vice-President of EXFO's Service Assurance and Wireless Divisions.
Visit our website for details about the NetHawk M5 protocol analyzers and the BrixMobile system.
About Qosmos
Qosmos specializes in unique network intelligence technology that provides unprecedented visibility into data traffic. The company delivers software development kits and intelligent IP probes which recognize thousands of protocols and metadata attributes for the most accurate picture of real-time data activity on networks. Going beyond traditional deep packet inspection (DPI) technology, Qosmos treats the network as a real-time database, able to identify, query and extract specific data with unparalleled precision and detail.
Qosmos products are used by network equipment providers, software vendors and system integrators to build next-generation solutions where real-time intelligence is critical, such as cybersecurity, lawful interception, traffic optimization, content billing, service assurance, market research and more. They enable applications, services and networks themselves to be more secure, efficient and profitable. For more information, visit www.qosmos.com .
About EXFO
Listed on the NASDAQ and TSX stock exchanges, EXFO is among the leading providers of next-generation test and service assurance solutions for wireless and wireline network operators and equipment manufacturers in the global telecommunications industry. The company offers innovative solutions for the development, installation, management and maintenance of converged, IP fixed and mobile networks -- from the core to the edge. Key technologies supported include 3G, 4G/LTE, IMS, Ethernet, OTN, FTTx, and various optical technologies (accounting for an estimated 35% of the portable fiber-optic test market). EXFO has a staff of approximately 1600 people in 25 countries, supporting more than 2000 telecom customers worldwide. For more information, visit www.EXFO.com .
EXFO Brand Name
The corporate name of the company is EXFO Inc. The company requests that all media outlets and publications use the corporate name ("EXFO Inc.") or abbreviated name ("EXFO") in capital letters for branding purposes. EXFO would like to thank all parties in advance for their cooperation.
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: EXFO Inc.
CONTACT: Maryse Brodeur
Media Planner
(418) 683-0913, Ext. 3429
[email protected]Vance Oliver
Manager, Investor Relations
(418) 683-0913, Ext. 3733
[email protected]