An Eye on Financial Results: Exfo Inc (NASDAQ: EXFO)

On Wednesday, Exfo Inc (NASDAQ: EXFO) stock dipped -1.08% and closed at 3.68. The stock opened the session at $3.73 and touched its highest price point at $3.75. Its recent trading capacity is 0 shares versus to its average trading volume of 12409 shares. The company’s stock’s lowest price point for the session stood at $3.65. EXFO traded as low as $ 2.66 in the past 52 weeks, and shares hit its peak level to $4.97.

EXFO Inc. (NASDAQ: EXFO) (TSX: EXF), the communications industry’s test, monitoring and analytics experts, reported recently financial results for the fourth quarter and fiscal year ended August 31, 2019.

Business Outlook
EXFO forecasts sales between US$70M and US$75M for the first quarter of fiscal 2020.

IFRS net loss is predictable to range between US$0.01 and US$0.05 per share in the first quarter of 2020. IFRS net loss includes US$0.04 per share in after-tax amortization of intangible assets and stock-based compensation costs.

This guidance, which is a forward-looking statement, was established by management based on existing backlog as of the date of this news release, seasonality, predictable bookings for the quarter, as well as exchange rates as of the day of this news release.

For fiscal 2020, EXFO is targeting adjusted EBITDA of US$33M based on the newly adopted International Financial Reporting Standard 16 for leases (IFRS 16). Note the positive impact of IFRS 16 on adjusted EBITDA for 2020 is projected to be about US$4M.

This adjusted EBITDA target is a forward-looking statement. In addition, as it excludes items that pertain to future events that are not presently estimable with a reasonable degree of accuracy, such as foreign exchange gain or loss and income taxes, no corresponding IFRS measure has been provided.

Quarterly and Yearly Overview
Sales in the fourth quarter of fiscal 2019 reached US$70.2M contrast to US$69.2M in the fourth quarter of 2018. Yearly sales improved 6.4% to US$286.9M in fiscal 2019 from US$269.5M in 2018.

Bookings totaled US$70.9M for a book-to-bill ratio of 1.01 in the fourth quarter of fiscal 2019 contrast to US$63.1M in the fourth quarter of 2018. Overall for fiscal 2019, bookings increased 11.2% to US$297.8M for a book-to-bill ratio of 1.04 from US$267.7M in 2018.

Gross margin before depreciation and amortization* attained 56.9% of sales in the fourth quarter of fiscal 2019 contrast 60.4% in the fourth quarter of 2018. In fiscal 2019, gross margin before depreciation and amortization reached 58.6% of sales contrast to 61.0% in 2018.

Selling and administrative expenses totaled US$23.0M, or 32.8% of sales, in the fourth quarter of fiscal 2019 contrast to US$24.7M, or 35.7% of sales, in the fourth quarter of 2018. In fiscal 2019, selling and administrative expenses amounted to US$98.6M, or 34.4% of sales, contrast to US$98.8M, or 36.7% of sales, in 2018.

Net R&D expenses amounted to US$11.1M, or 15.9% of sales, in the fourth quarter of fiscal 2019 contrast to US$16.7M, or 24.1% of sales, in the fourth quarter of 2018. In fiscal 2019, net R&D expenses totaled US$50.6M, or 17.6% of sales, contrast to US$57.2M, or 21.2% of sales, in 2018.

In the fourth quarter of fiscal 2019, IFRS net loss amounted to US$0.2M, or US$0.00 per share, contrast to US$4.0M, or US$0.07 per share, in the fourth quarter of 2018. Net loss in the fourth quarter of 2019 included net expenses totaling US$3.0M: US$1.6M in after-tax amortization of intangible assets, US$0.5M in stock-based compensation costs and a foreign exchange loss of US$0.9M.

EXFO EPS growth ratio for the past five years was -60.30% while Sales growth for the past five years was 2.20%. Return on equity (ROE) was noted as -3.60% while return on investment (ROI) was -5.70%. The stock institutional ownership stands at 26.90%.

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