Printer Friendly
The Free Library
23,375,127 articles and books


EXFO Reports Record Revenues and Operating Results for the Fourth Quarter and Fiscal 2000.

Business Editors

QUEBEC--(BUSINESS WIRE)--Oct. 4, 2000

EXFO (NASDAQ:EXFO) (TSE:EXF.)

[pilcrow (paragraph sign)] * Revenues up 85% in the quarter and 70% for fiscal 2000 *

Net earnings from operations up 76% in the quarter and

71% for fiscal 2000

EXFO Electro-Optical Engineering Inc. (NASDAQ:EXFO)(TSE:EXF.) today reported record revenues and operating results for the fourth quarter and year ended August 31, 2000.

Revenues increased 85% to US$23.1 million in the fourth quarter from US$12.5 million for the same period in 1999, and 19% sequentially from US$19.4 million in the third quarter.

Net earnings increased 76% to US$3.5 million, or $0.08 per share, for the fourth quarter from US$2.0 million, or $0.05 per share, for the same period in fiscal 1999, and 26% sequentially from US$2.8 million, or $0.07 per share, for the third quarter in 2000.

Overall for fiscal 2000, revenues increased 70% to US$71.6 million from US$42.2 million in fiscal 1999. Net earnings, meanwhile, increased 71% to US$9.9 million, or $0.25 per share, for fiscal 2000 from US$5.8 million, or $0.14 per share, for fiscal 1999.

"We are extremely pleased with our strong growth in the fourth quarter," said Germain Lamonde, Chairman, CEO, and President of EXFO. "A few years ago, we had set our sights on two growing market opportunities: DWDM and High-Bandwidth Solutions and the Industrial and Scientific Market.

"We are now beginning to see evidence that we have a winning strategy."

EXFO began shipping a number of new products in the fourth quarter including the DWDM Passive Component Test System dedicated to the production environment, the second-generation Remote Fiber Test System with DWDM monitoring capabilities to ensure network performance, and the second-generation Optical Spectrum Analyzer for field deployment.

All of these products have quickly received market acceptance from customers, especially the DWDM Passive Component Test System. This test system has been well received by manufacturers of optical components, value-added optical modules, and optical networking systems because it allows them to drastically reduce their testing time from hours to less than one minute for a 40 or 80-channel multiplexer-demultiplexer, the essential building block of a DWDM system.

"Test and measurement can account for as much as 60% of total production time for some optical components or value-added optical modules," Lamonde added. "Not surprisingly, manufacturers are turning to third-party vendors such as EXFO to provide them with fully automated, off-the-shelf test systems so that they can achieve substantial improvements in productivity, yields, and manufacturing costs while concentrating their energies on product development."

Selling and administrative expenses amounted to US$7.8 million, or 33.8% of revenues, for the fourth quarter compared to US$3.9 million, or 30.8% of revenues, for the same period in fiscal 1999 and US$6.5 million, or 33.7% of revenues, in the third quarter of fiscal 2000. Overall for fiscal 2000, selling and administrative expenses were at US$24.3 million, or 33.9% of revenues, compared to US$13.3 million, or 31.5% of revenues, for fiscal 1999.

Gross research and development expenses were at US$2.4 million, or 10.5% of revenues, in the fourth quarter compared to US$2.0 million, or 15.9% of revenues, for the same period in fiscal 1999 and US$2.2 million, or 11.6% of revenues, in the third quarter of fiscal 2000. Overall for fiscal 2000, gross R&D expenses amounted to US$9.4 million, or 13.1% of revenues, compared to US$6.4 million, or 15.2% of revenues, for fiscal 1999.

The audio Web cast of the fourth quarter and year-end conference call can be accessed live on EXFO's Web site, under Investor Relations, at 8:00 a.m. (Eastern time) on Oct. 5, 2000. Guests are invited to click on the Web cast icon and enter 9799 as a password. A replay of the Web cast will be available for 90 days.

The replay of EXFO's fourth quarter and year-end conference call can also be accessed after 11:00 a.m. (Eastern time) October 5, 2000 until midnight (Eastern time) October 12, 2000 via telephone. The replay numbers are (800) 558-5253 and the password is 16401516, or (416) 626-4100 and the password is 16399799. About EXFO

EXFO is a leading designer, manufacturer, and marketer of fiber-optic test, measurement, and monitoring instruments for the telecommunications industry.

EXFO develops products mainly for two markets. Its Portable and Monitoring Division provides solutions primarily to telecommunications carriers, cable television companies, public utilities, private network operators, as well as third-party installers and equipment rental companies. Its Industrial and Scientific Division designs an extensive line of more sophisticated and higher performance instruments for manufacturers of optical components, value-added optical modules, and optical networking systems, as well as for research and development markets.


 EXFO Electro-Optical Engineering Inc.
 Interim Consolidated Balance Sheets

 (in thousands of U.S. dollars)

 As at August 31,
---------------------------------------------------------------------

 1999 2000
---------------------------------------------------------------------

Assets

Current assets
Cash and cash equivalents $423 $729
Short-term investments 1,371 162,659
Accounts receivable
 Trade 8,869 18,272
 Other 1,026 2,790
Income taxes receivable 381 284
Inventories 7,591 18,868
Prepaid expenses and deposits 475 1,023
Future income taxes - 995
---------------------------------------------------------------------

 20,136 205,620

Capital assets 2,639 8,694

Goodwill and other assets 65 2,320

Future income taxes - 3,089
---------------------------------------------------------------------

 $22,840 $219,723
---------------------------------------------------------------------
---------------------------------------------------------------------

Liabilities

Current liabilities
Bank advances $- $10
Accounts payable and
 accrued liabilities 5,523 10,353
Dividend payable 51 -
Mandatorily redeemable
 preferred shares - 543
Loan from a company under
 common control 1,337 -
Deferred revenue 218 395
Current portion of long-term debt - 152
Future income taxes 262 -
---------------------------------------------------------------------

 7,391 11,453

Deferred revenue 109 151

Deferred grants 533 1,109

Long-term debt - 16

Future income taxes 128 -
---------------------------------------------------------------------

 8,161 12,729
---------------------------------------------------------------------

Shareholders' Equity

Share capital 87 198,459

Cumulative translation adjustment - 1,555

Retained earnings 14,592 6,980
---------------------------------------------------------------------

 14,679 206,994
---------------------------------------------------------------------

 $22,840 $219,723
---------------------------------------------------------------------
---------------------------------------------------------------------



 EXFO Electro-Optical Engineering Inc.
 Interim Consolidated Statements of Earnings

 (in thousands of U.S. dollars, except share and per share data)

 Three Twelve Three Twelve
 Months Months Months Months
 Ended Ended Ended Ended
 August 31, August 31, August 31, August 31,
 1999 1999 2000 2000
---------------------------------------------------------------------

 (unaudited) (unaudited)

Sales $12,522 $42,166 $23,117 $71,639

Cost of sales 4,224 14,998 7,756 24,712
---------------------------------------------------------------------

Gross margin 8,298 27,168 15,361 46,927
---------------------------------------------------------------------

Operating expenses
Selling and
 administrative 3,850 13,279 7,817 24,304
Net research and
 development 1,466 4,315 1,916 6,402
Amortization of capital
 assets and other assets 253 898 484 1,498
---------------------------------------------------------------------

Total
 operating expenses 5,569 18,492 10,217 32,204
---------------------------------------------------------------------

Earnings from
 operations 2,729 8,676 5,144 14,723

Interest income, net (57) (136) (1,625) (1,480)
Foreign exchange loss 6 506 1,073 684
---------------------------------------------------------------------

Earnings before income
 taxes and amortization
 of goodwill 2,780 8,306 5,696 15,519

Income taxes 809 2,492 2,106 5,298
---------------------------------------------------------------------

Earnings before
 amortization of
 goodwill 1,971 5,814 3,590 10,221

Amortization of goodwill - - 126 297
---------------------------------------------------------------------

Net earnings for
 the period $1,971 $5,814 $3,464 $9,924
---------------------------------------------------------------------
---------------------------------------------------------------------

Basic and fully diluted
 earnings per share
 Earnings before
 amortization of
 goodwill 0.05 0.14 0.08 0.26

Net earnings 0.05 0.14 0.08 0.25

Basic weighted average
 number of shares
 outstanding (000's) 38,002 38,001 44,220 39,951



 EXFO Electro-Optical Engineering Inc.
 Interim Consolidated Statements of Retained Earnings

 (in thousands of U.S. dollars, except per share data)

 Three Twelve Three Twelve
 Months Months Months Months
 Ended Ended Ended Ended
 August 31, August 31, August 31, August 31,
 1999 1999 2000 2000
---------------------------------------------------------------------

 (unaudited) (unaudited)

Balance -
 Beginning of period $15,547 $12,044 $21,052 $14,592

Add
Net earnings for
 the period 1,971 5,814 3,464 9,924
---------------------------------------------------------------------

 17,518 17,858 24,516 24,516
---------------------------------------------------------------------

Deduct
Dividends
 Class A shares 2,926 2,926 17,216 17,216
 Class C share - 340 - -
 Class F shares - - 320 320
---------------------------------------------------------------------

 2,926 3,266 17,536 17,536
---------------------------------------------------------------------

Balance -
 End of period $14,592 $14,592 $6,980 $6,980
---------------------------------------------------------------------
---------------------------------------------------------------------

Dividends per share
 Class A shares $0.08 $0.08 $0.43 $0.43
 Class C share $- $340 $- $-
 Class F shares $- $- $0.45 $0.45



 EXFO Electro-Optical Engineering Inc.
 Interim Consolidated Statements of Cash Flows

 (in thousands of U.S. dollars)

 Twelve Months Ended August 31,
---------------------------------------------------------------------

 1999 2000
---------------------------------------------------------------------

Cash flows from operating activities
Net earnings for the period $5,814 $9,924
Add (deduct) items not affecting
 cash and cash equivalents
 Amortization of discount on
 short-term investments - (807)
 Amortization of capital assets 857 1,451
 Amortization of goodwill
 and other assets 41 344
 Future income taxes (42) (33)
Change in non-cash operating
 working capital items
 Accounts receivable (3,875) (10,476)
 Income taxes receivable (381) 2,149
 Inventories (1,259) (10,732)
 Prepaid expenses and deposits (205) (519)
 Accounts payable and
 accrued liabilities 1,965 3,917
 Income taxes payable (115) -
 Deferred revenue 327 215
 Deferred grants 533 567
---------------------------------------------------------------------

 3,660 (4,000)
---------------------------------------------------------------------

Cash flows from financing activities
Bank advances (136) (357)
Repayment of loan from a company
 under common control - (1,349)
Repayment of long-term debt (20) (812)
Issuance of share capital 86 209,690
Share issue expenses - (16,743)
Dividends paid (3,215) (17,587)
---------------------------------------------------------------------

 (3,285) 172,842
---------------------------------------------------------------------

Cash flows from investing activities
Additions to short-term investments (33) (519,645)
Proceeds from disposal of
 short-term investments - 359,886
Additions to capital and
 other assets (1,181) (7,180)
Business combination, net of cash
 anash equivalents acquired - (2,108)
---------------------------------------------------------------------

 (1,214) (169,047)
---------------------------------------------------------------------

Change in cash and cash equivalents (839) (205)

Effect of foreign exchange rate
 changes on cash and cash equivalents - 511

Cash and cash equivalents -
 Beginning of period 1,262 423
---------------------------------------------------------------------

Cash and cash equivalents -
 End of period $423 $729
---------------------------------------------------------------------
---------------------------------------------------------------------

Supplementary information
Interest paid $148 $480

Income taxes paid $2,801 $3,761


EXFO Electro-Optical Engineering Inc.

Notes to Interim Consolidated Financial Statements

(tabular amounts in thousands of U.S. dollars,

except share and per share data and as otherwise noted)

1 Interim financial information

The financial information as at August 31, 1999 and 2000 and for

the twelve months ended August 31, 1999 and 2000 is derived from

our audited consolidated financial statements.

The financial information for the three months ended August 31,

1999 and 2000 is unaudited; however, in the opinion of management,

all adjustments necessary to present fairly the results of these

periods have been included. The adjustments made were of a normal

recurring nature. Interim results may not necessarily be indicative

of results anticipated for the year.

2 Additional disclosures required by U.S. GAAP and

differences between Canadian GAAP and U.S. GAAP

Change in reporting currency

On September 1, 1999, the company adopted the U.S. dollar as its

reporting currency. Under U.S. GAAP, the financial statements,

including prior years, are translated according to the current rate

method. Under Canadian GAAP, at the time of change in reporting

currency, the historical financial statements are presented using a

translation of convenience.

Under Canadian GAAP, the statements of earnings for the periods

ended August 31, 1999 were translated into U.S. dollar using an

exchange rate of US$1.00 = Cdn$1.4958. Under U.S. GAAP, revenue and

expenses would be translated at exchange rates prevailing at the

respective transaction dates. Average exchange rates for the three

months and the twelve months ended August 31, 1999 were US$1.00 =

Cdn$1.4834 and Cdn$1.5068 respectively.

Accounting for stock-based compensation

To conform with U.S. GAAP, the company measures stock-based

compensation costs using the intrinsic value method (APB 25

"Accounting for Stock Issued to Employees").

Stock purchase plan

Under APB 25, compensation cost related to the stock purchase plan

is measured as the difference between the fair value of the

purchased stock and the purchase price paid by plan participants.

Compensation cost is amortized to expense over a period of five

years, being the restriction period.

During the twelve months ended August 31, 1999 and 2000, the

weighted average fair value per share under the stock purchase plan

amounted to approximately $0.68 and $10.80, respectively. The fair

value per share since inception of the plan ranged between $0.68

and $18.00. As at August 31, 1999 and 2000, the balance of deferred

stock-based compensation amounted to $40,000 and $2,144,000,

respectively.

Stock option plan

In accordance with APB 25, the company's stock option plan is

considered to be a variable plan. Accordingly, subsequent increases

in the fair value of the underlying stock, in excess of the

exercise price of the option, are accounted for as additional

compensation costs. Compensation cost is amortized to expense over

the estimated vesting period to a maximum of four years. As at

August 31, 2000, the balance of deferred stock-based compensation

amounted to $17,285,000.

Under Canadian GAAP, no compensation cost is recognized for these

stock-based compensation plans.

 Reconciliation of net earnings to conform with U.S. GAAP

 Three Twelve Three Twelve
 Months Months Months Months
 Ended Ended Ended Ended
 August 31, August 31, August 31, August 31,
 1999 1999 2000 2000
---------------------------------------------------------------------

 (unaudited) (unaudited)

Net earnings for the
 period in accordance
 with Canadian GAAP $1,971 $5,814 $3,464 $9,924
Non-cash stock-based
 compensation costs
 related to stock
 purchase plan * (3) (10) (101) (538)
Non-cash stock-based
 compensation costs
 related to stock option
 plan under variable
 accounting * - - (1,464) (1,464)
Change in reporting
 currency 161 (44) - -
Unrealized gains on
 forward exchange
 contracts - 208 71 -
Future income taxes on
 forward exchange
 contracts - (67) (27) -
---------------------------------------------------------------------

Net earnings for the
 period in accordance
 with U.S. GAAP 2,129 5,901 1,943 7,922
Other comprehensive
 income (loss)
 Foreign currency
 translation
 adjustments (415) 606 1,753 1,555
 Unrealized holding
 gains on short-term
 investments, net of
 related income taxes 36 36 37 1
---------------------------------------------------------------------

Comprehensive income $1,750 $6,543 $3,733 $9,478
---------------------------------------------------------------------
---------------------------------------------------------------------

Basic and diluted net
 earnings per share
 in accordance with
 U.S. GAAP $0.06 $0.15 $0.04 $0.20

 * Required under APB 25.

 Earnings available to common shareholders is reconciled as
follows:

 Three Twelve Three Twelve
 Months Months Months Months
 Ended Ended Ended Ended
 August 31, August 31, August 31, August 31,
 1999 1999 2000 2000
---------------------------------------------------------------------

 (unaudited) (unaudited)

Net earnings for
 the period $2,129 $5,901 $1,943 $7,922
Dividend on
 Class C share - (333) - -
---------------------------------------------------------------------

Earnings available to
 common shareholders $2,129 $5,568 $1,943 $7,922
---------------------------------------------------------------------
---------------------------------------------------------------------

 The diluted weighted average number of common shares outstanding
calculated according to U.S. GAAP is as follows:

 Three Twelve Three Twelve
 Months Months Months Months
 Ended Ended Ended Ended
 August 31, August 31, August 31, August 31,
 1999 1999 2000 2000
---------------------------------------------------------------------

 (unaudited) (unaudited)

Weighted average
 number of common
 shares outstanding
 - Basic (000's) 38,002 38,001 44,220 39,951
Conversion of preferred
 shares Series 1 - - 45 26
Exercise of stock options - - 418 109
---------------------------------------------------------------------

Weighted average number
 of common shares
 outstanding
 -Diluted (000's) 38,002 38,001 44,683 40,086
---------------------------------------------------------------------
---------------------------------------------------------------------

 The number of common shares issuable upon the assumed conversion of
 preferred shares Series 1 has been determined by dividing the
 paid-in value of the preferred shares Series 1 (previously Class G
 shares) by the estimated fair value of the former Class A shares as
 at February 4, 2000 (the date the Class G shares were issued), or
 $18.00 per Class A share, weighted from the date of issuance of the
 Class G shares to the end of the year.

Share capital

 As at August 31,
---------------------------------------------------------------------

 1999 2000
---------------------------------------------------------------------

Share capital in accordance with Canadian GAAP $87 $198,459
Stock-based compensation costs related to stock
 purchase plan
 Current period 10 538
 Cumulative effect of prior periods - 10
---------------------------------------------------------------------

Share capital in accordance with U.S. GAAP $97 $199,007
---------------------------------------------------------------------
---------------------------------------------------------------------


Other capital

 As at August 31,
---------------------------------------------------------------------

 1999 2000
---------------------------------------------------------------------

Other capital in accordance with Canadian GAAP $- $-
Stock-based compensation costs related to stock
 option plan under variable accounting - 1,464
---------------------------------------------------------------------

Other capital in accordance with U.S. GAAP $- $1,464
---------------------------------------------------------------------
---------------------------------------------------------------------


Retained earnings

 As at August 31,
---------------------------------------------------------------------

 1999 2000
---------------------------------------------------------------------

Retained earnings in accordance
 with Canadian GAAP $14,592 $6,980
Stock-based compensation costs
 Current period (10) (2,002)
 Cumulative effect of prior periods - (10)
Change in reporting currency
 Current period
 Net earnings (44) -
 Dividends 24 -
 Cumulative effect of prior periods 1,036 1,016
---------------------------------------------------------------------

Retained earnings in accordance with U.S. GAAP $15,598 $5,984
---------------------------------------------------------------------
---------------------------------------------------------------------


Accumulated other comprehensive income (loss)

 Twelve Months Ended August 31,
---------------------------------------------------------------------

 1999 2000
---------------------------------------------------------------------

Foreign currency translation adjustments
 Balance - Beginning of period $(1,622) $(1,016)
 Change during the period 606 1,555
---------------------------------------------------------------------

 Balance - End of period (1,016) 539
---------------------------------------------------------------------

Unrealized holding gains on short-term
 investments, net of income taxes
 Balance - Beginning of period - 36
 Unrealized gains arising during the period,
 net of related income taxes of
 $23,000 in 1999 and 2000 36 37
 Reclassification adjustment for amounts
 included in net earnings, net of related
 income taxes of $23,000 - (36)
---------------------------------------------------------------------

 Balance - End of period 36 37
---------------------------------------------------------------------

Accumulated other comprehensive income (loss) $(980) $576
---------------------------------------------------------------------
---------------------------------------------------------------------


Balance sheets

 As at August 31,
---------------------------------------------------------------------

 1999 2000
---------------------------------------------------------------------

Current assets
 Cash and cash equivalents $423 $729
 Available for sale securities 1,430 162,719
 Accounts receivable 9,895 21,062
 Inventories 7,591 18,868
 Other current assets 856 1,307
 Future income taxes - 972
---------------------------------------------------------------------

 20,195 205,657

Capital assets 2,639 8,694
Goodwill and other assets 65 2,320
Future income taxes - 3,089
---------------------------------------------------------------------

 $22,899 $219,760
---------------------------------------------------------------------
---------------------------------------------------------------------

Current liabilities
 Bank advances $- $10
 Accounts payable and accrued liabilities 5,523 10,353
 Other current liabilities 1,891 1,090
---------------------------------------------------------------------

 7,414 11,453

Long-term liabilities 770 1,276
---------------------------------------------------------------------

 8,184 12,729
---------------------------------------------------------------------

Shareholders' Equity
 Share capital 97 199,007
 Other capital - 1,464
 Accumulated other comprehensive income (loss) (980) 576
 Retained earnings 15,598 5,984
---------------------------------------------------------------------

 14,715 207,031
---------------------------------------------------------------------

 $22,899 $219,760
---------------------------------------------------------------------
---------------------------------------------------------------------

Statements of cash flows

 For the twelve months ended August 31, 1999 and 2000, there are no
material differences between the statement of cash flows under
Canadian GAAP as compared to U.S. GAAP.


This news release may contain statements that constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements other than historical information or statements of current condition. These statements may appear in a number of places in this news release and include statements concerning our intent, belief, or current expectations regarding future events. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those in the forward-looking statements as a result of various factors. Although we believe that the expectations reflected in the forward-looking statements are reasonable based on information currently available to us, 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. In any event, these statements speak only as of the date of this news release. We undertake no obligation to revise or update any of them to reflect events or circumstances after the date of this news release, or to reflect new information or the occurrence of unanticipated events. Readers are referred to our Registration Statement on Form F-1 and our other filings with the U.S. Securities and Exchange Commission and the Canadian securities commissions for a discussion of the various factors that may affect our future performance and other important risk factors concerning us and our operations.
COPYRIGHT 2000 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2000, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

 Reader Opinion

Title:

Comment:



 

Article Details
Printer friendly Cite/link Email Feedback
Publication:Business Wire
Geographic Code:1CANA
Date:Oct 4, 2000
Words:3292
Previous Article:Alanco's Excel/Meridian Data Awarded Best Value for Mid-Range NAS from "Network Computing".
Next Article:ADVISORY/Kana Communications, Inc. - Third Quarter Conference Call Webcast.
Topics:



Related Articles
EXFO Corrects Statement on NASDAQ.com Web Site.
EXFO Acquires Burleigh for US$ 275 Million in Stock and Cash.
EXFO Plans to Invest US$20 Million to Triple Manufacturing Capacity.
EXFO Completes Acquisition of Burleigh Instruments.
EXFO Acquires EFOS Inc., a Precision Light-Based Curing Technology Company.
EXFO Completes Acquisition of EFOS Inc.
Media Alert: EXFO Q2 2001 Conference Call Today, 5 p.m. Eastern Time, 2 p.m. Pacific Time.
EXFO Reports Record Financial Results for Fourth Consecutive Quarter.
EXFO Records Sales Growth for Second Consecutive Quarter.
EXFO Reports Sales Growth of 30.3% for Fiscal 2005.

Terms of use | Copyright © 2014 Farlex, Inc. | Feedback | For webmasters