Market Overview

EXFO Reports Fourth Quarter and Fiscal 2019 Results

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Fiscal 2019

  • Sales increased 6.4% to US$286.9 million
  • Bookings improved 11.2% to US$297.8 million
  • IFRS net loss reduced by 79.8% to US$2.5 million
  • Adjusted EBITDA surged 48.8% to US$25.6 million

Q4 2019

  • Sales reached US$70.2 million, up 1.4% year-over-year
  • Bookings attained US$70.9 million, up 12.3% year-over-year
  • IFRS net loss totaled US$0.2 million
  • Adjusted EBITDA amounted to US$6.2 million

QUEBEC CITY, Oct. 9, 2019 /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, 2019.

"I am pleased EXFO significantly improved its profitability in fiscal 2019 and surpassed its annual target with adjusted EBITDA of US$25.6 million, while achieving solid growth in sales, bookings and cash flows from operations," said Philippe Morin, EXFO's Chief Executive Officer. "We also fully integrated our transformative acquisition of Astellia to create disruptive solutions that will support our growth objectives."

"Based on sound operational discipline, we completed our restructuring plan, bolstered efficiency and maintained our proven innovation capabilities. Overall, I am confident we have assembled the key building blocks to generate long-term growth supported by a highly differentiated offering for fiber, 5G mobility and network virtualization."

Fiscal 2019 Highlights

  • Sales growth. Total sales increased 6.4% to US$286.9 million in fiscal 2019. Service Assurance, Systems and Services (SASS) sales improved 16.2% largely due to a full-year contribution from the Astellia acquisition and multi-million-dollar contract win for EXFO's network topology and automation solution. Test and Measurement (T&M) sales were up 3.7% year-over-year. Annual sales in Europe, Middle East and Africa (EMEA), Americas, and Asia-Pacific regions increased 9.5%, 6.3% and 1.6%, respectively, in 2019. EXFO's largest customer accounted for 6.9% of sales in 2019, while the company's top-three customers represented 18.1%.
  • Bookings growth. Total bookings increased $11.2% year-over-year to US$297.8 million in 2019 for a book-to-bill ratio of 1.04. SASS bookings grew 21.0% due in part to four monitoring orders related to 5G deployments, while T&M bookings improved 8.4% year‑over-year.
  • Profitability. IFRS net loss was reduced by 79.8% to US$2.5 million in fiscal 2019 from US$12.3 million in 2018. Adjusted EBITDA, which surpassed the company's annual profitability target, surged 48.8% to US$25.6 million in 2019 from US$17.2 million in 2018. Cash flows from operations improved 20.0% to US$17.2 million in 2019 from US$14.4 million in 2018.
  • Innovation. EXFO released several game-changing solutions in fiscal 2019 to accelerate its customers' network transformations. The company introduced the industry's first optical fiber multimeter, creating a new testing category that greatly simplifies, accelerates and automates the task of frontline technicians while maximizing quality of fiber links. EXFO expanded its 400G test leadership with a new module featuring an Open Transceiver System that enables compatibility between current and future high-speed transceivers with EXFO's field and lab test platforms. EXFO released an automated fiber inspection tool for testing polarity, continuity and connector cleanliness on multifiber cables.

Business Outlook
EXFO forecasts sales between US$70 million and US$75 million for the first quarter of fiscal 2020.

IFRS net loss is expected to range between US$0.01 and US$0.05 per share in the first quarter of 2020. IFRS net loss includes US$0.04 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 quarter, as well as exchange rates as of the day of this news release.

For fiscal 2020, EXFO is targeting adjusted EBITDA of US$33 million based on the newly adopted International Financial Reporting Standard 16 for leases (IFRS 16). Note the positive impact of IFRS 16 on adjusted EBITDA for 2020 is projected to be approximately US$4 million.

This adjusted EBITDA target is a forward-looking statement. In addition, as it excludes items that pertain to future events that are not currently estimable with a reasonable degree of accuracy, such as foreign exchange gain or loss and income taxes, no corresponding IFRS measure has been provided.

Selected Financial Information








(In thousands of US dollars)

















Q4 2019


Q4 2018


FY 2019


FY 2018









T&M sales

$

50,162


$

47,489


$

204,693


$

197,423

SASS sales

20,202


21,649


82,788


71,248

Foreign exchange gains (losses) on forward exchange contracts

(189)


78


(591)


875

Total sales

$

70,175


$

69,216


$

286,890


$

269,546









T&M bookings

$

50,378


$

41,485


$

210,055


$

193,836

SASS bookings

20,723


21,575


88,341


72,982

Foreign exchange gains (losses) on forward exchange contracts

(189)


78


(591)


875

Total bookings

$

70,911


$

63,138


$

297,805


$

267,693

Book-to-bill ratio (bookings/sales)

1.01


0.91


1.04


0.99


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