Exfo unveils Q1 sales growth results

10 January 2003 -- Exfo Electro-Optical Engineering Inc., Quebec City, Canada has posted sales growth for a third consecutive quarter following the release this week of Q1 results for 2003.

Jan 10th, 2003

- Sales increase of 3% in first quarter
- Gross margin improves to 57%
- Positive cash flows from operations for second consecutive quarter

10 January 2003 -- Exfo Electro-Optical Engineering Inc., Quebec City, Canada has posted sales growth for a third consecutive quarter following the release this week of Q1 results for 2003.

Sales increased 3% to USD17.7m in Q1 (ended 30 November 2002) from USD17.2m in the Q4 2002, but decreased 12% from USD20.1m in Q1 2002.

"I am encouraged by this third consecutive growth in sales as well as second consecutive increase in gross margin and cash flows from operating activities," said Germain Lamonde, Exfo's Chairman, President and CEO. "They represent remarkable achievements in this difficult environment.

"Our strong balance sheet with USD49m in cash, our focus on innovation with 45% of sales in the first quarter coming from products that have been on the market two years or less, and our relentless drive to offer best-in-class service and support are increasingly making it clear to our global customer base that Exfo is the long-term partner of choice."

Exfo's pro forma net loss for Q1 2003 amounted to USD1.4m, or USD0.02 per share, compared to a pro forma net loss of USD1.2m, or USD0.02 per share, for Q4 2002 and a pro forma net loss of USD1.9m, or USD0.03 per share, for Q1 2002.

Net loss for the first quarter of fiscal 2003 decreased to USD2.2m, or USD0.03 per share, from a net loss of USD3.0m, or USD0.05 per share, for the previous quarter and a net loss of USD19.1m, or USD0.33 per share, for Q1 2002.

Gross margin for Q1 2003 climbed to 56.7% from 51.8% in Q4 2002 and 55.1% (excluding an inventory write-off) in Q1 of last year.

Cash flows from operations reached USD2.8m in Q1 2003 compared to USD300,000 in the previous quarter and cash flows from operations used of USD1.7m in Q1 of 2002.

"I am pleased with the strong commitment of our workforce towards gains in market share and quality of execution as demonstrated by new product approvals by several customers and key new products gaining traction in the marketplace," Mr. Lamonde added.

"We will continue to be creative and remain focused on the network service provider market, and strategically address the system vendor market by leveraging our synergies following the gnubi transaction."

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