QUEBEC CITY – Solid sales at EXFO Inc. were not enough to help offset a significant drop in net earnings for its first quarter ended November 30, 2011.
The Canadian test and measurement maker said net earnings were US$2.91 million for the period, down from $14.1 million in the same period last year. However, the company recorded an after-tax gain of $13.1 million from the disposal of discontinued operations (its Life Sciences and Industrial division) in the first quarter of 2011. In addition, net earnings in the first quarter of 2012 included $1.9 million in after-tax amortization of intangible assets and $0.6 million in stock-based compensation costs.
Sales reached $66.4 million, a modest increase from $65.7 million in the first quarter of 2011, while bookings were $71.4 million, a drop from $89.8 million in the same period last year. The company's book-to-bill ratio was 1.08 for the quarter.
Gross margin improved to 64.8% of sales this quarter from 62.2% in the first quarter of 2011 and 63.6% in the fourth quarter of 2011.
"I am pleased with our second-highest bookings level in company history," said chairman, president and CEO, Germain Lamonde, in a statement. "We also raised our gross margin close to our target of 65% on higher sales of software-intensive Protocol solutions and increased year-over-year sales across our main product groups with the exception of Copper Access which had benefited from a multi-million dollar, lower-margin order last year.
“These data points combined to generate healthy profitability in the first quarter of 2012 despite an uncertain global economic environment. I believe that our strategy to push ahead with game-changing solutions and a more aggressive access to key markets will pay off in the second half of the fiscal year, which is typically our strongest."
