- Annual sales total US$250.0 million, down 7.3% due to challenging market
- Gross margin improves to 63.3% of sales
- Cash flows from operations attain US$25.3 million
QUEBEC CITY, Oct. 9, 2012 /PRNewswire/ - EXFO Inc. (NASDAQ: EXFO) (TSX: EXF) announced today financial results for the fourth quarter and fiscal year ended August 31, 2012.
Annual sales decreased 7.3% to US$250.0 million in fiscal 2012 from US$269.7 million in 2011. In the fourth quarter of fiscal 2012, sales totaled US$57.2 million compared to US$59.5 million in the third quarter of 2012 and US$64.4 million in the fourth quarter of 2011.
Overall for fiscal 2012, bookings dropped 10.1% to US$244.8 million from US$272.3 million in 2011for an annual book-to-bill ratio of 0.98. In the fourth quarter of 2012, bookings totaled US$55.2 million for a book-to-bill ratio of 0.97 compared to US$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 US$3.6 million, or US$0.06 per share, including US$7.8 million in after-tax amortization of intangible assets, US$1.9 million in after-tax restructuring expenses, US$1.9 million in stock-based compensation costs and a gain of US$0.3 million for changes in the fair value of the cash contingent consideration related to the NetHawk acquisition.
In fiscal 2011, IFRS net earnings amounted to US$22.1 million, or US$0.36 per diluted share. It should be noted that EXFO recorded net earnings of US$12.9 million, or US$0.21 per diluted share, from discontinued operations (Life Sciences and Industrial business) in 2011. IFRS net earnings also included US$8.7 million in after-tax amortization of intangible assets, US$2.3 million in stock-based compensation costs and a gain of US$2.7 million for changes in the fair value of the cash contingent consideration related to the NetHawk acquisition.
In the fourth quarter of 2012, IFRS net loss totaled US$3.7 million, or US$0.06 per share, including US$2.1 million in after-tax amortization of intangible assets, US$1.9 million in after-tax restructuring expenses and US$0.4 million in stock-based compensation costs. EXFO also incurred a foreign exchange loss of US$1.9 million in the fourth quarter of 2012.
In the third quarter of 2012, IFRS net loss totaled US$3.9 million, or US$0.06 per share, including US$1.9 million in after-tax amortization of intangible assets and US$0.4 million in stock-based compensation costs. The company also reported a foreign exchange gain of US$1.1 million in the third quarter of 2012.
In the fourth quarter of 2011, IFRS net earnings amounted to US$4.6 million, or US$0.07 per diluted share, including a gain of US$2.7 million for changes in the fair value of the cash contingent consideration related to the NetHawk acquisition, US$2.1 million in after-tax amortization of intangible assets and US$0.5 million in stock-based compensation costs.
Adjusted EBITDA** reached US$13.5 million, or 5.4% of sales, in fiscal 2012 compared to US$30.6 million, or 11.3% of sales in 2011.
Cash flows from operations attained US$25.3 million in fiscal 2012 compared to US$23.3 million in 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."
"In my opinion, several market opportunities, such as 3G and 4G/LTE deployments and 40G /100G network upgrades, remain robust," Mr. Lamonde added. "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 a15% EBITDA margin in our target operating model."
Selected Financial Information (unaudited)
(In thousands of US dollars)
| Q4 2012 | Q3 2012 | Q4 2011 | FY 2012 | FY 2011 | |||||||||||
| Sales | $ | 57,156 | $ | 59,505 | $ | 64,414 | $ | 249,966 | $ | 269,743 | |||||
| Gross margin* | $ | 35,899 | $ | 35,956 | $ | 40,967 | $ | 158,174 | $ | 169,447 | |||||
| 62.8% | 60.4% | 63.6% | 63.3% | 62.8% | |||||||||||
| Other selected information: | |||||||||||||||
| Net earnings (loss) from continuing operations | $ | (3,714) | $ | (3,720) | $ | 4,597 | $ | (3,593) | $ | 9,194 | |||||
| Amortization of intangible assets | $ | 1,931 | $ | 1,993 | $ | 2,122 | $ | 7,819 | $ | 9,187 | |||||
| Stock-based compensation costs | $ | 429 | $ | 370 | $ | 461 | $ | 1,862 | $ | 2,256 | |||||
| Restructuring costs | $ | 2,329 | $ | − | $ | − | $ | 2,329 | $ | − | |||||
| Net income tax effect of the above items | $ | (247) | $ | (60) | $ | (60) | $ | (392) | $ | (479) | |||||
| Changes in fair value of cash contingent consideration | $ | − | $ | − | $ | (2,685) | $ | (311) | $ | (2,685) | |||||
| Foreign exchange gain (loss) | $ | (1,940) | $ | 1,090 | $ | (57) | $ | (657) | $ | (3,808) | |||||
| Adjusted EBITDA** | $ | (152) | $ | 248 | $ | 6,925 | $ | 13,524 | $ | 30,583 |
Operating Expenses
Selling and administrative expenses amounted to US$94.1 million, or 37.7% of sales, in fiscal 2012 compared to US$87.1 million, or 32.3% of sales, in 2011. In the fourth quarter of 2012, selling and administrative expenses totaled US$22.2 million, or 38.9% of sales, compared to US$23.6 million, or 39.7% of sales, in the third quarter of 2012 and US$21.8 million, or 33.9% of sales, in the fourth quarter of 2011.
Gross research and development (R&D) expenses reached US$59.3 million, or 23.7% of sales, in fiscal 2012 compared to US$57.2 million, or 21.2% of sales, in 2011. In the fourth quarter of 2012, gross R&D expenses attained US$14.1 million, or 24.7% of sales, compared to US$15.6 million, or 26.2% of sales, in the previous quarter and US$14.3 million, or 22.3% of sales, in the fourth quarter of 2011.
Net R&D expenses totaled US$49.9 million, or 19.9% of sales, in fiscal 2012 compared to US$47.9 million, or 17.7% of sales, in 2011. In the fourth quarter of 2012, net R&D expenses amounted to US$11.9 million, or 20.8% of sales, compared to US$13.2 million, or 22.1% of sales, in the third quarter of 2012 and US$12.1 million, or 18.8% of sales, in the fourth quarter of 2011.
FY 2012 Business Highlights
- Despite adverse economic conditions in fiscal 2012, sales of Protocol-layer products (Layers 1-7) increased 4.4% year-over-year on the strength of market traction in wirelesss backhaul, 4G/LTE as well as 10G, 40G and 100G network deployments. Sales of Physical-layer solutions (Layer 0, Optical and Copper), decreased 14.5% year-over-year as network operators largely held off on capital-intensive investments in access networks (fiber-to-the-home /curb/node, xDSL, etc.).
- Given the debt crisis in Europe and ripple effects on other economies in fiscal 2012, sales in Europe, Middle East and Africa (EMEA) dropped 16.4% year-over-year, while the Americas incurred a more modest decrease of 4.6%. Sales in the Asia-Pacific region increased 1.2% year-over-year. EXFO's largest customer accounted for 4.4% of sales in 2012, while the company's top three customers represented 12.0%.
- EXFO launched 21 new products in fiscal 2012, including two in the fourth quarter. Key product introductions in 2012 included amongst others the 100G Packet Blazer, a multi-rate, multi-service test module within the FTB Ecosystem for characterizing high-speed networks reaching 100G; Ethernet One, a centralized Ethernet service activation and monitoring solution that enables operators to improve the operational efficiency of their networks from the core to the last mile; EXFO Apps, a portal offering software applications that boost the capabilities and productivity of the FTB Ecosystem of platforms and test modules; the QA-805/QA-813 QualityAssurer, the industry's most scalable platform (simulates more than 12 million active mobile subscribers) for load simulation of converged 3G, 4G/LTE and IMS networks; the portable iPro, an intelligent high-performance capture and analysis probe for 3G and 4G/LTE networks up to 10 Gbit/s; and the MaxTester 600 series for cost-effective VDSL2 installation and repair work on copper links.
- Following the year-end, EXFO announced a strategic partnership with Japan-based Artiza Networks, a technology leader in 4G/LTE very-large-scale radio access network (RAN) simulation and LTE-Advanced RAN testing. Combined with EXFO's solution, it delivers the highest-capacity wraparound testing of the LTE eNodeB — up to 6000 UEs towards the eNodeB — and the most advanced end-to-end portfolio of wireless network simulators, ranging from RF and functional testing to large-scale core network traffic generation. EXFO also announced major contract wins with threeTier-1 North American operators for its new suite of VDSL2 test sets that feature the most advanced technologies for characterizing vectoring and wire-bonding for high-speed 50 Mbit/s and over copper links.
Business Outlook
EXFO forecasts sales between US$60 million and US$65 million for the first quarter of fiscal 2013, while IFRS net loss should range between US$0.05 and US$0.01 per share. IFRS net loss includes US$0.05 per share in after-tax amortization of intangible assets and restructuring charges as well as stock-based compensation costs.
This guidance was established by management based on existing backlog as of the date of this press release, seasonality, expected bookings for the remaining of the quarter, as well as exchange rates as of the day of this press release.
Conference Call and Webcast
EXFO will host a conference call today at 5 p.m. (Eastern time) to review its fourth-quarter and year-end financial results for fiscal 2012. To listen to the conference call and participate in the question period via telephone, dial 1-416-641-6684. Germain Lamonde, Chairman, President and CEO, and Pierre Plamondon, CA, Vice-President of Finance and Chief Financial Officer, will participate in the call. An audio replay will be available one hour after the end of the conference call until 7 p.m. on October 16, 2012. The replay number is 1-402-977-9141 and the reservation number is 21604376. The live audio Webcast and replay of the conference call will also be available on EXFO's Website at www.EXFO.com/investors.
About EXFO
Listed on the NASDAQ and TSX stock exchanges, EXFO is among the leading providers of next-generation test and service assurance solutions for wireline and wireless network operators and equipment manufacturers in the global telecommunications industry. The company offers innovative solutions for the development, installation, management and maintenance of converged, IP fixed and mobile networks—from the core to the edge. Key technologies supported include 3G, 4G/LTE, IMS, Ethernet, OTN, FTTx, VDSL2, ADSL2+ and various optical technologies accounting for an estimated 35% of the portable fiber-optic test market. EXFO has a staff of approximately 1700 people in 25 countries, supporting more than 2000 telecom customers worldwide. For more information, visit www.EXFO.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, and we intend that such forward-looking statements be subject to the safe harbors created thereby. Forward-looking statements are statements other than historical information or statements of current condition. Words such as may, will, expect, believe, anticipate, intend, could, estimate, continue, or the negative or comparable terminology are intended to identify forward-looking statements. In addition, any statements that refer to expectations, projections or other characterizations of future events and circumstances are considered forward-looking statements. They are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those in forward-looking statements due to various factors including macro-economic uncertainty and/or recession (including our ability to quickly adapt cost structures with anticipated levels of business and our ability to manage inventory levels with market demand); capital spending and network deployment levels in the telecommunications industry; future economic, competitive, financial and market conditions; limited visibility with regards to customer orders and the timing of such orders; fluctuating exchange rates; consolidation in the global telecommunications test and service assurance industry and increased competition among vendors; concentration of sales; timely release and market acceptance of our new products and other upcoming products; our ability to successfully integrate our acquired and to-be-acquired businesses; our ability to successfully expand international operations; and the retention of key technical and management personnel. Assumptions relating to the foregoing involve judgments and risks, all of which are difficult or impossible to predict and many of which are beyond our control. Other risk factors that may affect our future performance and operations are detailed in our Annual Report, on Form 20-F, and our other filings with the U.S. Securities and Exchange Commission and the Canadian securities commissions. We believe that the expectations reflected in the forward-looking statements are reasonable based on information currently available to us, but we cannot assure you that the expectations will prove to have been correct. Accordingly, you should not place undue reliance on these forward-looking statements. These statements speak only as of the date of this document. Unless required by law or applicable regulations, we undertake no obligation to revise or update any of them to reflect events or circumstances that occur after the date of this document.
NON-IFRS FINANCIAL MEASURES
EXFO provides non-IFRS financial measures (gross margin*, EBITDA** and adjusted EBITDA**) as supplemental information regarding its operational performance. The company uses these measures for the purposes of evaluating its historical and prospective financial performance, as well as its performance relative to its competitors. These measures also help EXFO's management to plan and forecast future periods as well as to make operational and strategic decisions. EXFO believes that providing this information to its investors, in addition to the IFRS measures, allows them to see the company's results through the eyes of management, and to better understand its historical and future financial performance.
The presentation of this additional information is not prepared in accordance with IFRS. Therefore, the information may not necessarily be comparable to that of other companies and should be considered as a supplement to, not a substitute for, the corresponding measures calculated in accordance with IFRS.
| * | Gross margin represents sales less cost of sales, excluding depreciation and amortization. |
| ** | EBITDA is defined as net earnings (loss) before interest, income taxes, depreciation of property, plant and equipment and amortization of intangible assets. Adjusted EBITDA represents EBITDA excluding changes in the fair value of the cash contingent consideration and the gain from the disposal of discontinued operations. |
The following tables summarize the reconciliation of EBITDA and adjusted EBITDA to IFRS net earnings (loss) and additional information, in thousands of US dollars:
EBITDA and adjusted EBITDA (including discontinued operations)
| Year ended August 31, 2012 | Year ended August 31, 2011 | ||||||
| IFRS net earnings (loss) for the year | $ | (3,593) | $ | 22,120 | |||
| Add (deduct): | |||||||
| Depreciation of property, plant and equipment | |||||||
| Continuing operations | 6,169 | 6,655 | |||||
| Discontinued operations | - | 14 | |||||
| Amortization of intangible assets | |||||||
| Continuing operations | 7,819 | 9,183 | |||||
| Discontinued operations | - | 4 | |||||
| Interest and other income (continuing operations) | (131) | (511) | |||||
| Income taxes | |||||||
| Continuing operations | 3,571 | 8,814 | |||||
| Discontinued operations | - | 201 | |||||
| EBITDA for the year | 13,835 | 46,480 | |||||
| Changes in fair value of cash contingent consideration | (311) | (2,695) | |||||
| Gain on disposal of discontinued operations | - | (13,212) | |||||
| Adjusted EBITDA for the year | $ | 13,524 | $ | 30,583 | |||
| EDITDA in percentage of total sales | 5.5% | 17.1% | |||||
| Adjusted EDITDA in percentage of total sales | 5.4% | 11.3% |
| EXFO Inc. | ||||||||||
| Unaudited Interim Consolidated Balance Sheets | ||||||||||
| (in thousands of US dollars) | ||||||||||
| As at August 31, 2012 | As at August 31, 2011 | As at September 1, 2010 | ||||||||
| Assets | ||||||||||
| Current assets | ||||||||||
| Cash | $ | 58,868 | $ | 22,771 | $ | 21,440 | ||||
| Short-term investments | 8,236 | 47,091 | 10,379 | |||||||
| Accounts receivable | ||||||||||
| Trade | 37,643 | 45,151 | 50,190 | |||||||
| Other | 4,283 | 6,329 | 5,217 | |||||||
| Income taxes and tax credits recoverable | 9,024 | 5,414 | 2,604 | |||||||
| Inventories | 41,212 | 52,754 | 40,328 | |||||||
| Prepaid expenses | 3,800 | 3,237 | 2,816 | |||||||
| Current assets held for sale | - | - | 3,769 | |||||||
| 163,066 | 182,747 | 136,743 | ||||||||
| Tax credits recoverable | 38,397 | 36,627 | 29,397 | |||||||
| Forward exchange contracts | - | 149 | - | |||||||
| Property, plant and equipment | 49,848 | 32,076 | 24,730 | |||||||
| Intangible assets | 14,132 | 22,901 | 27,947 | |||||||
| Goodwill | 29,160 | 30,942 | 29,355 | |||||||
| Deferred income taxes | 12,080 | 16,913 | 18,730 | |||||||
| Long-term assets held for sale | - | - | 7,530 | |||||||
| $ | 306,683 | $ | 322,355 | $ | 274,432 | |||||
| Liabilities | ||||||||||
| Current liabilities | ||||||||||
| Bank loan | $ | - | $ | 784 | $ | - | ||||
| Accounts payable and accrued liabilities | 32,392 | 30,320 | 29,943 | |||||||
| Provisions | 952 | 1,817 | 927 | |||||||
| Income taxes payable | 917 | 876 | 426 | |||||||
| Contingent liability | - | 338 | - | |||||||
| Current portion of long-term debt | 565 | 645 | 568 | |||||||
| Deferred revenue | 10,583 | 10,590 | 10,354 | |||||||
| Current liabilities related to assets held for sale | - | - | 2,531 | |||||||
| 45,409 | 45,370 | 44,749 | ||||||||
| Deferred revenue | 4,997 | 5,704 | 5,775 | |||||||
| Long-term debt | 282 | 968 | 1,419 | |||||||
| Contingent liability | - | - | 2,660 | |||||||
| Other liabilities | 609 | 723 | 603 | |||||||
| Deferred income taxes | 2,105 | 5,079 | - | |||||||
| Long-term liabilities related to assets held for sale | - | - | 537 | |||||||
| 53,402 | 57,844 | 55,743 | ||||||||
| Shareholders' equity | ||||||||||
| Share capital | 110,965 | 110,341 | 106,126 | |||||||
| Contributed surplus | 17,298 | 18,017 | 18,563 | |||||||
| Retained earnings | 111,511 | 115,104 | 92,984 | |||||||
| Accumulated other comprehensive income | 13,507 | 21,049 | 1,016 | |||||||
| 253,281 | 264,511 | 218,689 | ||||||||
| $ | 306,683 | $ | 322,355 | $ | 274,432 |
| EXFO Inc. | |||||||||||||
| Unaudited Interim Consolidated Statements of Earnings | |||||||||||||
| (in thousands of US dollars, except share and per share data) | |||||||||||||
| Three months ended August 31, 2012 | Twelve months ended August 31, 2012 | Three months ended August 31, 2011 | Twelve months ended August 31, 2011 | ||||||||||
| Sales | $ | 57,156 | $ | 249,966 | $ | 64,414 | $ | 269,743 | |||||
| Cost of sales (1, 2) | 21,257 | 91,792 | 23,447 | 100,296 | |||||||||
| Selling and administrative (2) | 22,220 | 94,139 | 21,846 | 87,062 | |||||||||
| Net research and development (2) | 11,891 | 49,854 | 12,139 | 47,927 | |||||||||
| Depreciation of property, plant and equipment | 1,535 | 6,169 | 1,667 | 6,655 | |||||||||
| Amortization of intangible assets | 1,931 | 7,819 | 2,122 | 9,183 | |||||||||
| Changes in fair value of cash contingent consideration | ‒ | (311) | (2,685) | (2,685) | |||||||||
| Earnings (loss) from operations | (1,678) | 504 | 5,878 | 21,305 | |||||||||
| Interest and other income (expenses) | 63 | 131 | 21 | 511 | |||||||||
| Foreign exchange loss | (1,940) | (657) | (57) | (3,808) | |||||||||
| Earnings (loss) before income taxes | (3,555) | (22) | 5,842 | 18,008 | |||||||||
| Income taxes | 159 | 3,571 | 1,245 | 8,814 | |||||||||
| Net earnings (loss) from continuing operations | (3,714) | (3,593) | 4,597 | 9,194 | |||||||||
| Net earnings from discontinued operations | ‒ | - | - | 12,926 | |||||||||
| Net earnings (loss) for the period | $ | (3,714) | $ | (3,593) | $ | 4,597 | $ | 22,120 | |||||
| Basic net earnings (loss) from continuing operations per share | $ | (0.06) | $ | (0.06) | $ | 0.08 | $ | 0.15 | |||||
| Diluted net earnings (loss) from continuing operations per share | $ | (0.06) | $ | (0.06) | $ | 0.07 | $ | 0.15 | |||||
| Basic net earnings from discontinued operations per share | $ | ‒ | $ | ‒ | $ | ‒ | $ | 0.22 | |||||
| Diluted net earnings from discontinued operations per share | $ | ‒ | $ | ‒ | $ | ‒ | $ | 0.21 | |||||
| Basic net earnings (loss) per share | $ | (0.06) | $ | (0.06) | $ | 0.08 | $ | 0.37 | |||||
| Diluted net earnings (loss) per share | $ | (0.06) | $ | (0.06) | $ | 0.07 | $ | 0.36 | |||||
| Basic weighted average number of shares outstanding (000's) | 60,491 | 60,453 | 60,253 | 60,000 | |||||||||
| Diluted weighted average number of shares outstanding (000's) | 60,491 | 60,453 | 61,607 | 61,488 | |||||||||
| (1) | The cost of sales is exclusive of depreciation and amortization, shown separately. | ||||||||||||
| (2) | Restructuring charges included in: | ||||||||||||
| Cost of sales | $ | 264 | $ | 264 | $ | ‒ | $ | ‒ | |||||
| Selling and administrative | 1,181 | 1,181 | ‒ | ‒ | |||||||||
| Net research and development | 884 | 884 | ‒ | ‒ | |||||||||
| $ | 2,329 | $ | 2,329 | $ | ‒ | $ | ‒ |
| EXFO Inc. | |||||||||||||
| Unaudited Interim Consolidated Statements of Comprehensive Income (Loss) | |||||||||||||
| (in thousands of US dollars) | |||||||||||||
| Three months ended August 31, 2012 | Twelve months ended August 31, 2012 | Three months ended August 31, 2011 | Twelve months ended August 31, 2011 | ||||||||||
| Net earnings (loss) for the period | $ | (3,714) | $ | (3,593) | $ | 4,597 | $ | 22,120 | |||||
| Other comprehensive income (loss), net of income taxes | |||||||||||||
| Foreign currency translation adjustment | 10,956 | (6,875) | (1,703) | 19,123 | |||||||||
| Reclassification of realized losses on short-term investments in net earnings | - | - | 2 | 2 | |||||||||
| Unrealized gains on forward exchange contracts | 1,107 | 185 | (13) | 3,413 | |||||||||
| Reclassification of realized gains on 11forward exchange contracts in net earnings (loss) | 157 | (1,108) | (746) | (2,191) | |||||||||
| Deferred income tax effect of the components of other comprehensive income (loss) | (338) | 256 | 217 | (314) | |||||||||
| Other comprehensive income (loss) | 11,882 | (7,542) | (2,243) | 20,033 | |||||||||
| Comprehensive income (loss) for the period | $ | 8,168 | $ | (11,135) | $ | 2,354 | $ | 42,153 |
| EXFO Inc. | ||||||||||||||||
| Unaudited Interim Consolidated Statements of Changes in Shareholders' Equity | ||||||||||||||||
| (in thousands of US dollars) | ||||||||||||||||
| Year ended August 31, 2011 | ||||||||||||||||
| Share capital | Contributed surplus | Retained earnings | Accumulated other comprehensive income | Total shareholders' equity | ||||||||||||
| Balance as at September 1, 2010 | $ | 106,126 | $ | 18,563 | $ | 92,984 | $ | 1,016 | $ | 218,689 | ||||||
| Exercise of stock options | 1,452 | - | - | - | 1,452 | |||||||||||
| Reclassification of stock-based compensation costs | 2,763 | (2,763) | - | - | - | |||||||||||
| Stock-based compensation costs | - | 2,217 | - | - | 2,217 | |||||||||||
| Net earnings for the year | - | - | 22,120 | - | 22,120 | |||||||||||
| Other comprehensive income | ||||||||||||||||
| Foreign currency translation adjustment | - | - | - | 19,123 | 19,123 | |||||||||||
| Changes in unrealized losses on short-term investments | 2 | 2 | ||||||||||||||
| Changes in unrealized gains on forward exchange contracts, net of deferred income taxes of $314 | - | - | - | 908 | 908 | |||||||||||
| Total comprehensive income for the year | - | - | 22,120 | 20,033 | 42,153 | |||||||||||
| Balance as at August 31, 2011 | $ | 110,341 | $ | 18,017 | $ | 115,104 | $ | 21,049 | $ | 264,511 | ||||||
| Year ended August 31, 2012 | ||||||||||||||||
| Share capital | Contributed surplus | Retained earnings | Accumulated other comprehensive income | Total shareholders' equity | ||||||||||||
| Balance as at September 1, 2011 | $ | 110,341 | $ | 18,017 | $ | 115,104 | $ | 21,049 | $ | 264,511 | ||||||
| Exercise of stock options | 310 | - | - | - | 310 | |||||||||||
| Redemption of share capital | (1,696) | (540) | (2,236) | |||||||||||||
| Reclassification of stock-based compensation costs | 2,010 | (2,010) | - | - | - | |||||||||||
| Stock-based compensation costs | - | 1,831 | - | - | 1,831 | |||||||||||
| Net loss for the year | - | - | (3,593) | - | (3,593) | |||||||||||
| Other comprehensive loss | ||||||||||||||||
| Foreign currency translation adjustment | - | - | - | (6,875) | (6,875) | |||||||||||
| Changes in unrealized gains on forward exchange contracts, net of deferred income taxes of $256 | - | - | - | (667) | (667) | |||||||||||
| Total comprehensive loss for the year | - | - | (3,593) | (7,542) | (11,135) | |||||||||||
| Balance as at August 31, 2012 | $ | 110,965 | $ | 17,298 | $ | 111,511 | $ | 13,507 | $ | 253,281 |
| EXFO Inc. | |||||||||||||
| Unaudited Interim Consolidated Statements of Cash Flows | |||||||||||||
| (in thousands of US dollars) | |||||||||||||
| Three months ended August 31, 2012 | Twelve months ended August 31, 2012 | Three months ended August 31, 2011 | Twelve months ended August 31, 2011 | ||||||||||
| Cash flows from operating activities | |||||||||||||
| Net earnings (loss) for the period | $ | (3,714) | $ | (3,593) | $ | 4,597 | $ | 22,120 | |||||
| Add (deduct) items not affecting cash | |||||||||||||
| Change in discount on short-term investments | 2 | 45 | 4 | (42) | |||||||||
| Stock-based compensation costs | 429 | 1,862 | 461 | 2,256 | |||||||||
| Depreciation and amortization | 3,466 | 13,988 | 3,789 | 15,856 | |||||||||
| Gain on disposal of discontinued operations | ‒ | - | ‒ | (13,212) | |||||||||
| Gain on disposal of capital assets | ‒ | - | ‒ | (568) | |||||||||
| Changes in fair value of cash contingent consideration | ‒ | (311) | (2,685) | (2,685) | |||||||||
| Deferred revenue | (2,482) | (506) | (3,543) | (1,262) | |||||||||
| Deferred income taxes | 33 | 2,050 | 782 | 7,063 | |||||||||
| Changes in foreign exchange gain/loss | 617 | (1,510) | 113 | 2,130 | |||||||||
| (1,649) | 12,025 | 3,518 | 31,656 | ||||||||||
| Change in non-cash operating items | |||||||||||||
| Accounts receivable | 7,706 | 7,974 | 3,891 | 10,066 | |||||||||
| Income taxes and tax credits | (2,004) | (5,570) | (1,714) | (6,714) | |||||||||
| Inventories | 1,306 | 10,879 | 200 | (8,751) | |||||||||
| Prepaid expenses | (138) | (589) | 600 | (232) | |||||||||
| Accounts payable and accrued liabilities and provisions | (2,800) | 643 | (4,506) | (2,775) | |||||||||
| Other liabilities | (116) | (105) | (187) | 60 | |||||||||
| 2,305 | 25,257 | 1,802 | 23,310 | ||||||||||
| Cash flows from investing activities | |||||||||||||
| Additions to short-term investments | (23,918) | (115,886) | (95,023) | (516,674) | |||||||||
| Proceeds from disposal and maturity of short-term investments | 23,896 | 152,797 | 100,613 | 481,945 | |||||||||
| Additions to capital assets | (5,846) | (23,849) | (5,079) | (12,164) | |||||||||
| Proceeds from disposal of capital assets | ‒ | - | ‒ | 568 | |||||||||
| Net proceeds from disposal of discontinued operations | ‒ | - | ‒ | 22,063 | |||||||||
| Business combination | ‒ | - | (289) | (1,049) | |||||||||
| (5,868) | 13,062 | 222 | (25,311) | ||||||||||
| Cash flows from financing activities | |||||||||||||
| Bank loan | ‒ | (782) | ‒ | 772 | |||||||||
| Repayment of long-term debt | (281) | (577) | (323) | (619) | |||||||||
| Exercise of stock options | 192 | 310 | 5 | 1,452 | |||||||||
| Redemption of share capital | (1,610) | (2,236) | ‒ | - | |||||||||
| (1,699) | (3,285) | (318) | 1,605 | ||||||||||
| Effect of foreign exchange rate changes on cash | 2,221 | 1,063 | (76) | 1,058 | |||||||||
| Change in cash | (3,041) | 36,097 | 1,630 | 662 | |||||||||
| Cash - Beginning of period | 61,909 | 22,771 | 21,141 | 22,109 | |||||||||
| Cash - End of period | $ | 58,868 | $ | 58,868 | $ | 22,771 | $ | 22,771 |
SOURCE EXFO INC.