Exfo's 2002 total sales down 50% on 2001

26 September 2002 -- Exfo Electro-Optical Engineering, Qebec City, Canada, reports Q3-Q4 sales growth in 2001-2002 fiscal, but total annual sales are 50% down on last year's results.

Sep 26th, 2002

-- Sales increase of 5% in Q4
-- 2002 total less than 50% of that of 2001
-- Third sequential increase in net bookings
-- Positive cash flows from operations in fourth quarter

26 September 2002 -- Exfo Electro-Optical Engineering, Qebec City, Canada, has recorded sales growth for a second consecutive quarter following the release yesterday of fourth quarter and fiscal 2002 financial results.

Sales increased 5% to USD17.2m in Q4 ended 31 August 2002 from USD16.3m in Q3. The latest sales figures are still down from USD35.4m in Q4 2001. However, overall for 2002, Exfo's sales reached USD68.3m - less than half the USD146.0m total in 2001.

"Fiscal 2002 has been the most challenging in my 17 years at the head of EXFO due to the unprecedented upheaval in the telecommunications industry," said Germain Lamonde, Chairman, President and CEO of Exfo.

"Our growth in sales in the last two quarters, increases in net bookings in the last three quarters, and return to positive cash flows from operations in the fourth quarter are early indicators that we're moving in the right direction," Lamonde added.

Exfo's pro forma net loss for the fourth quarter of fiscal 2002 amounted to USD1.2m, or USD0.02 per share, compared to a pro forma net loss of USD3.9m, or USD0.06 per share, for the Q3 2002 and pro forma net earnings of USD3.2m, or USD0.06 per share, for Q4 2001.

Net loss for the fourth quarter of fiscal 2002 improved to USD3.0m, or USD0.05 per share, compared to a net loss of USD263.8m, or USD4.29 per share, for the previous quarter and a net loss of USD14.2m, or USD0.25 per share, for Q4 of 2001.

Pro forma net loss for 2002 amounted to USD11.2m, or USD0.19 per share, compared to pro forma net earnings of USD24.5m, or USD0.46 per share, for 2001. Net loss for fiscal 2002 was USD308.5m, or USD5.09 per share, compared to a net loss of USDD15.3m, or USD0.29 per share, for fiscal 2001. The net loss in fiscal 2002 is largely due to a USD222.2m write-down of goodwill and a USD23.7m write-down of intangible assets that are related to the three strategic acquisitions made during the last two years.

"Exfo has maintained a fine balance between prudence and boldness during the last 12 months," Lamonde said. "We have preserved a healthy balance sheet with USD50m in cash and almost no debt, while we strongly enhanced our strategic position with network operators and system vendors through the acquisitions of critical protocol-layer testing technologies from Avantas Networks and gnubi communications."

Exfo also forecasted sales between USD16.0m and USD18.5m and a pro forma net loss between USD0.03 and USD0.05 per share for the first quarter of fiscal 2003.

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