QUEBEC CITY – Exfo’s annual sales dropped 7.3% to $250.0 million (U.S.) in 2012 compared to $269.7 million in 2011. In the fourth quarter of fiscal 2012, sales totaled $57.2 million compared to 59.5 million in the third quarter of 2012 and 64.4 million in the fourth quarter of 2011.
"Following more than 30% sales growth in our two previous fiscal years and a 20.5% sales CAGR in the last 10, I'm disappointed with our 7% decrease in 2012, largely driven by a sluggish telecom environment in Europe and China where network operators reduced capital spending and delayed projects," said Germain Lamonde, Exfo's Chairman, President and CEO. "I believe we still gained market share in 2012 based on estimates that our end-markets endured double-digit decreases. Amid these challenging market conditions, we implemented a restructuring plan, while enhancing our strategic focus in high-growth areas."
Bookings dropped 10.1% to $244.8 million from $272.3 million in 2011 for an annual book-to-bill ratio of 0.98. In the fourth quarter of 2012, bookings totaled $55.2 million for a book-to-bill ratio of 0.97 compared to $57.5 million in the third quarter of 2012 and US$62.5 million in the fourth quarter of 2011.
Gross margin improved to 63.3% of sales in fiscal 2012 from 62.8% in 2011. In the fourth quarter of 2012, gross margin reached 62.8% of sales compared to 60.4% in the third quarter of 2012 and 63.6% in the fourth quarter of 2011.
In fiscal 2012, IFRS net loss totaled $3.6 million, including 7.8 million in after-tax amortization of intangible assets, $1.9 million in after-tax restructuring expenses, $1.9 million in stock-based compensation costs and a gain of $0.3 million for changes in the fair value of the cash contingent consideration related to its NetHawk acquisition.
Adjusted EBITDA reached $13.5 million, or 5.4% of sales, in fiscal 2012 compared to $30.6 million, or 11.3% of sales in 2011. Cash flows from operations attained $25.3 million in fiscal 2012 compared to US$23.3 million in 2011.
"In my opinion, several market opportunities, such as 3G and 4G/LTE deployments and 40G /100G network upgrades, remain robust," added Lamonde. "The pause in carrier spending cannot last indefinitely, since bandwidth demand in fixed and mobile networks continues to follow a sharp growth curve. I firmly believe Exfo is uniquely positioned to benefit from these opportunities and, as such, we've taken a series of measures to rapidly return the company to a growth mode and eventually reach a 15% EBITDA margin in our target operating model."
