QUEBEC CITY – Canadian telecom test and measurement equipment manufacturer EXFO Electro-Optical Engineering today reported record sales for the fiscal year ended
August 31, 2008.
Annual sales increased 20.2% to a record-high of US$183.8 million in fiscal 2008. In the fourth quarter, sales reached US$50.9 million compared to US$48.6 million in the previous quarter and US$43.0 million in the fourth quarter of 2007. Overall for fiscal 2008, net accepted orders increased 17.8% to a record-high of US$184.6 million for a book-to-bill ratio of 1. In the fourth quarter of 2008, net bookings totaled US$45.7 million compared to US$50.7 million in the third quarter of 2008 and US$39.5 million in the fourth quarter of 2007.
Gross margin improved to 58.9% of sales in fiscal 2008 from 57.4% in 2007. In Q4 ‘08, gross margin amounted to 59.9% compared to 60.9% in the previous quarter and 57.9% in the fourth quarter of 2007. Fiscal 2008 marked the sixth consecutive year that the company raised its gross margin.
Net earnings also reached US$18.4 million, including US$5.3 million for the recognition of previously unrecognized future income tax assets, an extraordinary gain of US$3 million related to the negative goodwill on the acquisition of Navtel Communications, and a net recovery of income tax of US$1.2 million to account for new corporate tax rates in Canada and a related review of the company’s tax strategy. These items were partially offset by US$3 million in after-tax amortization of intangible assets and US$1.3 million in stock-based compensation costs.
In 2007, net earnings totaled US$42.3 million, or US$0.61 per diluted share, including US$27.8 million in recognition of previously unrecognized future income tax assets and tax credits and US$1.1 million for a government grant recovery. These items were partially offset by US$2.9 million in after-tax amortization of intangible assets and US$1.0 million in stock-based compensation costs.
In the fourth quarter of 2008, net earnings amounted to US$3.3 million, including US$1.2 million in after-tax amortization of intangible assets and US$0.4 million in stock-based compensation costs.
"Fiscal 2008 has been a year of transformation at EXFO as we positioned ourselves as a leader in next-generation, IP testing and service assurance through exceptional growth of our protocol test business as well as the acquisitions of Navtel Communications and Brix Networks," said Germain Lamonde, EXFO’s chairman, president and CEO, in a press release. "We also expanded our global presence with increased sales and marketing initiatives in targeted countries, a new manufacturing facility in China, and enhanced capabilities at our R&D software center in India. These latest investments should accelerate earnings growth in 2009 and beyond.
"Our EBITDA, however, didn’t grow faster than sales for the first time in five years, as we accepted short-term losses for long-term benefits with the Brix acquisition. Looking ahead, I’m confident that we’ll return to our customary sales/EBITDA growth model, despite a visibly challenging macro-economic environment."
