QUEBEC CITY — Telecom testing and analytics solutions supplier EXFO Inc. reported today its financial results for the fourth quarter and fiscal year ended August 31, 2020, which saw the Quebec City-based company’s revenue negatively impacted by the Covid-19 pandemic.
“In fiscal 2020, EXFO experienced the unprecedented impact of the coronavirus pandemic on the global economy which, in turn, adversely affected our revenues and profitability. However, I’m pleased to see EXFO close its fourth quarter on a positive note with strong revenues and cash flows from operations,” said Philippe Morin, EXFO’s CEO in a press release announcing the company’s fiscal 2020 results.
“Our ongoing digital transformation allowed EXFO to quickly adapt to the virtualized selling environment and secure five new service assurance contract wins. In FY21, we will continue to strengthen our focus on high-growth drivers like fibre, 5G and cloud-native deployments, while reducing investments in lower-growth areas. These initiatives should continue to benefit EXFO’s competitive position and enable profitable growth,” Morin added.
“Looking ahead, we are excited about the wealth of opportunities for our T&M (test and measurement) and SASS (service assurance, systems and services) product groups. Demand for field testing equipment should recover with major fibre deployment projects, barring the return of extensive lockdown restrictions with the second wave. We also expect continued growth from our lab and manufacturing test solutions, especially in the ultra-high-speed area with our pending acquisition of InOpticals. In addition, we expect our Nova Adaptive Service Assurance platform to benefit from the momentum of our recent contract wins, the ramp-up of cloud-native 5G architectures and heightened activity in the network core,” Morin said.
Reported in U.S. dollars, EXFO’s total revenue for fiscal 2020 decreased 7.4% to US$265.6 million, compared to US$286.9 million for fiscal year 2019. The company’s test and measurement sales dropped 3.6% year-over-year, despite a strong increase from lab and manufacturing test solutions, says the press release. Service assurance, systems and services (SASS) revenue decreased 16.4% year-over-year, although the company secured service assurance orders totalling US$5 million with its five new customers in the fourth quarter.
The company’s annual sales in the Asia-Pacific region improved 11.9%, while sales in the Americas and Europe, Middle East and Africa (EMEA) decreased 10% and 13.9%, respectively. EXFO’s largest customer accounted 8.3% of sales in 2020, while the company’s top-three customers represented 18.1%.
In terms of profitability, the company’s net loss in fiscal 2020 totalled US$9.5 million, compared to US$2.5 million in 2019. The net loss in fiscal 2020 included expenses totalling US$10.3 million, and also included US$2.4 million for an after-tax wage subsidy granted by the Canadian government to mitigate the impact of the Covid-19 pandemic.
EXFO’s adjusted EBITDA in fiscal 2020 amounted to US$18.2 million, compared to US$25.6 million in 2019. Cash flows used by operations totalled US$2.1 million in fiscal 2020, including cash flows provided by operations of US$14.1 million in the fourth quarter. In comparison, cash flows provided by operations amounted to US$17.2 million in fiscal 2019.
Due to the economic uncertainty caused by the coronavirus pandemic, EXFO has suspended quarterly and annual guidance indefinitely, the company said.
For more information about EXFO’s fourth quarter and fiscal 2020 results, please click here.
