QUEBEC CITY — Telecom testing and analytics solutions supplier EXFO Inc. reported today third quarter results which showed a poorer performance for the company year-over-year but some indications of recovery from the impact of the Covid-19 pandemic felt in its previous quarter.
“Despite constraints and restrictive measures in many countries, EXFO navigated through the coronavirus pandemic with a solid financial performance in the third quarter of 2020,” said CEO Philippe Morin, in the news release. “We delivered encouraging sales in a difficult environment and proactively implemented cost controls, while benefiting from a Canadian government wage subsidy program. The end result was strong earnings amid end-markets that will necessarily improve as long-term drivers like fibre and 5G deployments remain intact.”
Reported in U.S. dollars, the Quebec City-based company’s sales totalled US$66.1 million in the third quarter of fiscal 2020, which is a 10.1% year-over-year decrease from the US$73.6 million in sales reported in the same quarter of 2019. However, it’s an improvement compared to the US$55.3 million in sales the company reported for its second quarter of 2020, during which EXFO was forced to temporarily shut down its manufacturing operations in China due to the Covid-19 outbreak.
For its third quarter 2020, test and measurement sales accounted for 75% of revenue, while service assurance, systems and services (SASS) sales represented 25% of total sales. Revenue distribution among its three main selling regions amounted to 45% in the Americas, 33% in Europe, Middle East and Africa (EMEA), and 22% in Asia-Pacific.
EXFO’s net earnings for the third quarter of 2020 totalled US$3.2 million, compared to net earnings of US$21,000 in the third quarter of 2019. Net earnings included a wage subsidy of US$3.3 million (US$2.4 million after tax) under the Canadian Emergency Wage Subsidy program to help qualifying businesses alleviate the effects of the coronavirus pandemic, says the release.
Adjusted EBITDA totalled US$10.7 million (or 16.1% of sales) in Q3 2020, compared to US$7.9 million (10.7% of sales) in Q3 2019.
During the third quarter of fiscal 2020, EXFO extended its revolving credit facilities, which had provided advances up to US$50.8 million (C$70 million), to US$65.3 million (C$90 million) until May 31, 2021, and will return to US$50.8 million (C$70 million) on June 1, 2021.
