Exfo reported financial results for the third quarter ended May 31, 2017. Its sales reached US$58.5 million compared to US$60.9 million in the third quarter of 2016 and US$60.0 million in the second quarter of 2017.
- Sales : US$58.5 million for the third quarter 2017
- Bookings attain US$63.7 million
- Adjusted EBITDA totals US$2.3 million
“Although bookings were robust at US$63.7 million, the timing of orders and necessity to rebuild backlog affected our financial results in the third quarter of 2017,” said Philippe Morin, Exfo’s Chief Executive Officer. “Looking at the bigger picture, we continued capturing market share in optical and high-speed Ethernet testing in the field, data centers and labs as reflected by sales and bookings growth of 6.2% and 4.2% nine months into the fiscal year. We also addressed an underperforming product line within our monitoring solutions portfolio and fined-tuned our go-to-market strategy to sharpen our focus and enhance profitability. We should begin benefitting from our restructuring efforts in the fourth quarter, but the full impact will be felt in fiscal 2018.”
Bookings attained US$63.7 million in the third quarter of fiscal 2017 compared to US$59.7 million in the same period last year and US$55.9 million in the second quarter of 2017. The company’s book-to-bill ratio was 1.09 in the third quarter of 2017.
IFRS net loss in the third quarter of fiscal 2017 totaled US$4.3 million, compared to net earnings of US$0.9 million, in the same period last year and net earnings of US$1.0 million, in the second quarter of 2017. IFRS net loss in the third quarter of 2017 included US$3.6 million in after-tax restructuring expenses, US$0.9 million in after-tax amortization of intangible assets, US$0.4 million in stock-based compensation costs and a foreign exchange gain of US$1.7 million.
Adjusted EBITDA totaled US$2.3 million, or 3.9% of sales, in the third quarter of fiscal 2017 compared to US$5.3 million, or 8.7% of sales, in the third quarter of 2016 and US$4.9 million, or 8.1% of sales, in the second quarter of 2017. Adjusted EBITDA represents net earnings (loss) before interest, income taxes, depreciation and amortization, stock-based compensation costs, restructuring charges, and foreign exchange gain or loss.
At the beginning of March, Exfo acquired UK-based Ontology Systems for a consideration of US$7.7 million, net of cash acquired, plus an earnout estimated at US$1.4 million based on future sales.
In early May, Exfo announced a restructuring plan to streamline its monitoring solutions portfolio. This plan, which resulted in US$3.8 million of restructuring charges in the third quarter of 2017, is expected to generate annual cost savings of US$8.0 million.