UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
6-K
Report
of Foreign Private Issuer Pursuant to Rule 13a-16 or
15d-16
Under
the Securities Exchange Act of 1934
For
the
month of October 2007
EXFO
Electro-Optical Engineering Inc.
(Translation
of registrant’s name into English)
400
Godin Avenue, Quebec, Quebec, Canada G1M
2K2
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F.
|
Form
20-F þ
|
Form
40-F o
|
Indicate
by check mark whether the registrant by furnishing the information contained
in
this Form is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
|
Yes
o
|
No
þ
|
If
“Yes”
is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-______.
Page
1 of
12
TABLE
OF CONTENTS
On
October 16, 2007, EXFO Electro-Optical Engineering Inc., a Canadian corporation,
reported its results of operations for the fourth fiscal quarter and year end
for the fiscal year ended August 31, 2007. This report on Form
6-K sets forth the news release relating to EXFO’s announcement and certain
information relating to EXFO’s financial condition and results of operations for
the fourth fiscal quarter of the 2007 fiscal year. This press release
and information relating to EXFO’s financial condition and results of operations
for the fourth fiscal quarter of the 2007 fiscal year are hereby incorporated
as
a document by reference to Form F-3 (Registration Statement under the Securities
Act of 1933) declared effective as of July 30, 2001 and to Form F-3
(Registration Statement under the Securities Act of 1933) declared effective
as
of March 11, 2002 and to amend certain material information as set
forth in these two Form F-3 documents.
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
|
EXFO
ELECTRO-OPTICAL ENGINEERING INC.
|
|
|
By: /s/
Benoit Ringuette
Name: Benoit
Ringuette
Title: General
Counsel and Corporate Secretary
|
|
Date:
October 17, 2007
EXFO
Reports Record Sales and GAAP Net Earnings for Fiscal
2007
|
§
|
Annual
sales increase 19.2% to a record-high US$152.9 million, including
year-over-year growth of 20.3% to US$43.0 million in the fourth
quarter
|
|
§
|
GAAP
net earnings reach US$42.3 million in fiscal 2007, including recognition
of US$24.6 million in future income tax assets and US$3.2 million in
R&D tax credits
|
|
§
|
Gross
margin improves for a fifth consecutive year to
57.4%
|
|
§
|
Receives
fourth consecutive Growth Strategy Leadership Award from Frost &
Sullivan for highest market-share gains in fiber-optic test equipment
market
|
QUEBEC
CITY, CANADA, October 16, 2007—EXFO Electro-Optical Engineering Inc. (NASDAQ:
EXFO, TSX: EXF) reported today record sales and GAAP net earnings for the fiscal
year ended August 31, 2007.
Sales
increased 19.2% to a record-high US$152.9 million in fiscal 2007 from US$128.3
million in 2006. In the fourth quarter of 2007, sales reached US$43.0 million
compared to US$39.2 million in the previous quarter and US$35.7 million in
the
fourth quarter of 2006. Net bookings totaled US$39.5 million in the fourth
quarter of fiscal 2007 compared to US$43.7 million in the third quarter of
2007
and US$32.6 million in the fourth quarter of 2006. Overall in fiscal 2007,
net
accepted orders increased 21.0% to US$156.7 million from US$129.4 million in
2006 for a book-to-bill ratio of 1.02.
Gross
margin improved to 57.4% of sales in fiscal 2007 from 55.3% in 2006. In the
fourth quarter of 2007, gross margin amounted to 57.9% compared to 57.1% in
the
previous quarter and 54.3% in the fourth quarter of 2006. Fiscal 2007 marked
the
fifth consecutive increase in the company’s gross margin.
In
fiscal
2007, GAAP net earnings reached a record-high US$42.3 million, or US$0.61 per
diluted share, including US$24.6 million in recognition of previously
unrecognized future income taxes, US$3.2 million in recognition of previously
unrecognized R&D tax credits, US$2.9 million in amortization of intangible
assets, US$1.1 million from a government grant recovery and US$1.0 million
in
stock-based compensation costs. In 2006, GAAP net earnings totaled US$8.1
million, or US$0.12 per diluted share, including US$4.4 million in amortization
of intangible assets, US$1.3 million from a government grant recovery, US$1.0
million in stock-based compensation costs and US$0.6 million in impairment
of long-lived assets.
In
the
fourth quarter of 2007, GAAP net earnings amounted to US$33.5 million, or
US$0.48 per diluted share, including US$24.6 million in recognition of
previously unrecognized future income taxes, US$3.2 million in recognition
of
previously unrecognized R&D tax credits, US$1.1 million from a government
grant recovery, US$0.7 million in amortization of intangible assets and
US$0.3 million in stock-based compensation costs. In the third quarter of 2007,
GAAP net earnings reached US$2.6 million, or US$0.04 per diluted share,
including US$0.7 million in amortization of intangible assets and US$0.2
million in stock-based compensation costs. In the fourth quarter of 2006, GAAP
net earnings totaled US$2.9 million, or US$0.04 per diluted share, including
US$1.0 million in amortization of intangible assets and US$0.2 million in
stock-based compensation costs.
“Fiscal
2007 marked another good year with market-share gains for a 22nd consecutive
reporting period, while being recognized with a fourth consecutive Growth
Strategy Leadership Award from Frost& Sullivan for gains in optical
testing,” said Germain Lamonde, EXFO’s Chairman, President and CEO. “We
delivered sales growth of 19.2% for record sales of $152.9 million in 2007
largely due to strong performances from our optical and protocol businesses
and
significant inroads into the Americas and EMEA sales regions.”
“I
am
also pleased with our long-term profitability, especially how we coped with
a
32% increase in the Canadian dollar in the last five fiscal years,” Mr. Lamonde
added. “More specifically in 2007, we improved our net earnings 78.8% year over
year if you exclude tax-related items. Our earnings growth exceeded sales growth
for a fifth consecutive year and our gross margin progressed for a fifth
consecutive year, too. I remain confident that we can continue growing sales
and
earnings based on our positioning among key growth trends, history of
market-share gains, strong focus on execution, healthy balance sheet, as well
as
global expansion plans for our sales, R&D and manufacturing
operations.”
Selected
Financial Information
(In
thousands of US dollars)
|
Segmented
results:
|
Q4
2007
|
Q3
2007
|
Q4
2006
|
FY
2007
|
FY
2006
|
|||||||||||||||
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
|||||||||||||||||
|
Sales:
|
||||||||||||||||||||
|
Telecom
Division
|
$ |
37,199
|
$ |
33,821
|
$ |
30,111
|
$ |
129,839
|
$ |
107,376
|
||||||||||
|
Life
Sciences & Industrial Division
|
5,776
|
5,384
|
5,622
|
23,095
|
20,877
|
|||||||||||||||
|
Total
|
$ |
42,975
|
$ |
39,205
|
$ |
35,733
|
$ |
152,934
|
$ |
128,253
|
||||||||||
|
Earnings
from operations:
|
||||||||||||||||||||
|
Telecom
Division
|
$ |
8,108
|
$ |
2,143
|
$ |
1,275
|
$ |
13,132
|
$ |
6,679
|
||||||||||
|
Life
Sciences & Industrial Division
|
994
|
697
|
1,088
|
3,650
|
1,383
|
|||||||||||||||
|
Total
|
$ |
9,102
|
$ |
2,840
|
$ |
2,363
|
$ |
16,782
|
$ |
8,062
|
||||||||||
|
Other
selected information:
|
||||||||||||||||||||
|
GAAP
net earnings
|
$ |
33,646
|
$ |
2,574
|
$ |
2,910
|
$ |
42,275
|
$ |
8,135
|
||||||||||
|
Amortization
of intangible assets
|
$ |
699
|
$ |
653
|
$ |
1,043
|
$ |
2,864
|
$ |
4,394
|
||||||||||
|
Stock-based
compensation costs
|
$ |
277
|
$ |
178
|
$ |
213
|
$ |
981
|
$ |
1,032
|
||||||||||
|
Impairment
of long-lived assets
|
$ |
−
|
$ |
−
|
$ |
−
|
$ |
−
|
$ |
604
|
||||||||||
|
Government
grants
|
$ | (1,079 | ) | $ |
−
|
$ |
−
|
$ | (1,079 | ) | $ | (1,307 | ) | |||||||
|
Recognition
of previously unrecognized future income taxes
|
$ | (24,566 | ) | $ |
−
|
$ |
−
|
$ | (24,566 | ) | $ |
−
|
||||||||
|
Recognition
of previously unrecognized R&D tax credits
|
$ | (3,162 | ) | $ |
−
|
$ |
−
|
$ | (3,162 | ) | $ |
−
|
||||||||
Operating
Expenses
Selling
and administrative expenses amounted to US$49.6 million, or 32.4% of sales,
in
fiscal 2007 compared to US$40.3 million, or 31.4% of sales, in 2006. In the
fourth quarter of 2007, selling and administrative expenses totaled US$13.0
million, or 30.3% of sales, compared to US$12.8 million, or 32.7% of sales,
in
the third quarter of 2007 and US$10.9 million, or 30.4% of sales, in the fourth
quarter of 2006.
Gross
research and development (R&D) expenses reached US$25.2 million, or 16.5% of
sales, in fiscal 2007 compared to US$19.5 million, or 15.2% of sales, in 2006.
In the fourth quarter of 2007, gross R&D expenses attained US$7.1 million,
or 16.6% of sales, compared to US$6.6 million, or 16.9% of sales, in the
previous quarter and US$5.2 million, or 14.6% of sales, in the fourth quarter
of
2006.
Net
R&D expenses totaled US$16.7 million (including US$3.2 million for the
recognition of previously unrecognized R&D tax credits), or 10.9% of sales
in fiscal 2007, compared to US$15.4 million, or 12.0% of sales, in 2006. In
the
fourth quarter of 2007, net R&D expenses amounted to US$2.3 million
(including US$3.2 million for the recognition of previously unrecognized R&D
tax credits), or 5.4% of sales, compared to US$5.3 million, or 13.6% of sales,
in the third quarter of 2007 and US$4.3 million, or 12.0% of sales, in the
fourth quarter of 2006.
Fiscal
2007 and Fourth-Quarter Business Highlights
|
§
|
Market
expansion — EXFO increased its sales to an all-time high of
US$152.9 million in fiscal 2007 for an annual growth rate of 19.2%,
while
the company’s published goal was 20%. Telecom Division sales improved
20.9% year over year, including 19.9% in the optical test segment,
48.2%
in the protocol test segment and 15.5% in the copper access test
segment
(although Consultronics contributed only seven month’s revenue in fiscal
2006). Confirming the highest market-share gains in the fiber-optic
test
equipment market, Frost & Sullivan named EXFO recipient of the Growth
Strategy Leadership Award for the fourth consecutive year. In terms
of
market expansion, EXFO’s sales to Europe, Middle East and Africa (EMEA)
and the Americas increased 27.5% and 18.7%, respectively, in fiscal
2007.
The Life Sciences and Industrial Division and Asia-Pacific region
generated lower year-over-year sales growth of 10.6% and 7.8%,
respectively, in 2007.
|
|
§
|
Profitability
— EXFO completed fiscal 2007 with record-high GAAP net earnings
of US$42.3 million or US$0.61 per diluted share, including US$33.5
million
or US$0.48 per diluted share in the fourth quarter. GAAP net earnings
in
fiscal 2007 included US$24.6 million in recognition of previously
unrecognized future income taxes, US$3.2 million in recognition of
previously unrecognized R&D tax credits, US$2.9 million in
amortization of intangible assets, US$1.1 million from a government
grant
recovery and US$1.0 million in stock-based compensation costs. In
comparison, the company generated US$8.1 million in GAAP net earnings
in
2006. The significant improvement is mainly due to increased revenue
contribution from the Telecom Division and a strong focus on operations,
despite a headwind from a strengthening Canadian dollar. Looking
at GAAP
operating margin, it reached 11.0% of sales in fiscal 2007, while
the
company’s stated goal was 7%. Excluding the recognition of previously
unrecognized R&D tax credits of US$3.2 million and a government
grant recovery of US$1.1 million, operating margin would have attained
8.2% in 2007. EXFO also generated an all-time high of US$14.4 million
in
cash flows from operating activities in 2007, raising its cash and
short-term investments to US$129.8
million.
|
|
§
|
Innovation
— EXFO introduced 20 new products in fiscal 2007, including
two
in the fourth quarter, compared to 18 in 2006. Two product releases
in the
fourth quarter of 2007 included a high-performance OTDR for
ultra-long-haul network applications and a quality assurance system
for
real-time monitoring of triple-play IP services. Following the
year-end, the company released three additional test solutions:
a multi-service, multi-medium handheld platform for characterizing
and
troubleshooting rapidly growing access networks (AXS-200
SharpTESTER); a compact multi-service transport test set that
combines next-generation SONET/SDH and Ethernet testing inside a
single
module (FTB-8120NGE/FTB-8130NGE Power Blazer); and a cost-effective
handheld tester for the rapid installation and maintenance of
ADSL/ADSL2/ADSL2+ services (EXD-350 ADSL2+ Test Set). Products on the
market two years or less accounted for 33.7% of sales in fiscal 2007,
while the company’s published goal was
35%.
|
Business
Outlook
EXFO
forecasts sales between US$38.0 million and US$41.0 million and GAAP net
earnings between US$0.01 and US$0.04 per diluted share for the first quarter
of
fiscal 2008. The GAAP net earnings outlook includes US$0.01 per diluted share
in
after-tax amortization of intangible assets and stock-based compensation
costs
.
Corporate
Performance Objectives for Fiscal 2008/Results for Fiscal
2007
EXFO
disclosed the following three corporate objectives and related metrics for
fiscal 2008 as well as results for fiscal 2007. It should be noted that these
metrics are not guidance, but goals that management has set out to
achieve.
|
Objectives
|
2008
|
2007
|
||
|
Metrics
|
Metrics
|
Results
|
||
|
Increase
sales (% of year-over-year growth)
|
20%
|
20%
|
19.2%
|
|
|
Maximize
profitability (operating margin in %)
|
8%
|
7%
|
11.0%
|
|
|
Focus
on innovation (sales % from products <2
years
on market)
|
30%
|
35%
|
33.7%
|
|
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 2007. To listen to
the
conference call and participate in the question period via telephone,
dial 1-416-620-5690. 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
23, 2007. The replay number is 1-402-977-9141 and the reservation number is
21349311. 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
EXFO
is a
Tier-1 test and measurement expert in the global telecommunications industry,
especially in the portable test market segment. The Telecom Division, which
represents more than 80% of the company's business, offers a full suite of
test
solutions and monitoring systems to network service providers, cable TV
operators, telecom system vendors and component manufacturers in approximately
70 countries. EXFO is the global market leader for portable optical test
solutions with an estimated 25.5% market share and a leading supplier of
protocol and access test solutions to enable triple-play deployments and
converged IP networking. Its Windows-based modular AXS-200, FTB-200, FTB-400
and
IQS-500 test platforms host a wide range of modular test solutions across
optical, physical, data and network layers, while maximizing technology reuse
across several market segments. The Life Sciences and Industrial Division offers
value-added light-based solutions in high-precision medical device and
opto-electronics assembly sectors, and advanced fluorescence microscopy and
electrophysiology solutions for the life sciences sector. For more information
about EXFO’s Telecom Division, visit www.EXFO.com, and for its Life
Sciences and Industrial Division, visit
www.EXFO-lifesciences.com.
Forward-Looking
Statements
This
news
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 consolidation
in
the global telecommunications test and measurement industry; capital spending
levels in the telecommunications, life sciences and high-precision assembly
sectors; concentration of sales; fluctuating exchange rates and our ability
to
execute in these uncertain conditions; the effects of the additional actions
we
have taken in response to such economic uncertainty (including our ability
to
quickly adapt cost structures with anticipated levels of business, ability
to
manage inventory levels with market demand); market acceptance of our new
products and other upcoming products; limited visibility with regards to
customer orders and the timing of such orders; our ability to successfully
integrate our acquired and to-be-acquired businesses; the retention of key
technical and management personnel; and future economic, competitive and market
conditions. 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. We undertake no obligation to revise or update any of them to reflect
events or circumstances that occur after the date of this document.
For
more information
Vance
Oliver
Manager,
Investor Relations
(418)
683-0913, Ext. 3733
vance.oliver@exfo.com
EXFO
Electro-Optical Engineering
Inc.
Interim
Consolidated Balance Sheet
(in
thousands of US dollars)
|
As
at
August
31,
2007
|
As
at
August
31,
2006
|
|||||||
|
(unaudited)
|
||||||||
|
Assets
|
||||||||
|
Current
assets
|
||||||||
|
Cash
|
$ |
5,541
|
$ |
6,853
|
||||
|
Short-term
investments
|
124,217
|
104,437
|
||||||
|
Accounts
receivable
|
||||||||
|
Trade,
less allowance for doubtful accounts of $206
($451
as at August 31, 2006)
|
26,699
|
20,891
|
||||||
|
Other
|
2,479
|
2,792
|
||||||
|
Income
taxes and tax credits recoverable
|
6,310
|
2,201
|
||||||
|
Inventories
|
31,513
|
24,623
|
||||||
|
Prepaid
expenses
|
1,391
|
1,404
|
||||||
|
Future
income taxes
|
7,609
|
−
|
||||||
|
205,759
|
163,201
|
|||||||
|
Income
taxes recoverable
|
−
|
476
|
||||||
|
Property,
plant and equipment
|
18,117
|
17,392
|
||||||
|
Intangible
assets
|
9,628
|
10,948
|
||||||
|
Goodwill
|
28,437
|
27,142
|
||||||
|
Future
income taxes
|
17,197
|
−
|
||||||
| $ |
279,138
|
$ |
219,159
|
|||||
|
Liabilities
|
||||||||
|
Current
liabilities
|
||||||||
|
Accounts
payable and accrued liabilities
|
$ |
22,721
|
$ |
17,337
|
||||
|
Deferred
revenue
|
2,598
|
1,772
|
||||||
|
Current
portion of long-term debt
|
−
|
107
|
||||||
|
25,319
|
19,216
|
|||||||
|
Deferred
revenue
|
3,414
|
2,632
|
||||||
|
Government
grants
|
−
|
723
|
||||||
|
Long-term
debt
|
−
|
354
|
||||||
|
Future
income taxes
|
240
|
−
|
||||||
|
28,973
|
22,925
|
|||||||
|
Shareholders’
Equity
|
||||||||
|
Share
capital
|
150,019
|
148,921
|
||||||
|
Contributed
surplus
|
4,453
|
3,776
|
||||||
|
Retained
earnings
|
42,275
|
−
|
||||||
|
Cumulative
translation adjustment
|
53,418
|
43,537
|
||||||
|
250,165
|
196,234
|
|||||||
| $ |
279,138
|
$ |
219,159
|
|||||
EXFO
Electro-Optical Engineering
Inc.
Interim
Unaudited Consolidated Statements of Earnings
(in
thousands of US dollars, except share and per share data)
|
Three
months ended
August
31, 2007
|
Twelve
months ended
August
31, 2007
|
Three
months ended
August
31, 2006
|
Twelve
months ended
August
31, 2006
|
|||||||||||||
|
Sales
|
$ |
42,975
|
$ |
152,934
|
$ |
35,733
|
$ |
128,253
|
||||||||
|
Cost
of sales (1,2)
|
18,109
|
65,136
|
16,318
|
57,275
|
||||||||||||
|
Gross
margin
|
24,866
|
87,798
|
19,415
|
70,978
|
||||||||||||
|
Operating
expenses
|
||||||||||||||||
|
Selling
and administrative (1)
|
13,035
|
49,580
|
10,857
|
40,298
|
||||||||||||
|
Net
research and development (1,
3)
|
2,308
|
16,668
|
4,281
|
15,404
|
||||||||||||
|
Amortization
of property, plant and equipment
|
801
|
2,983
|
871
|
3,523
|
||||||||||||
|
Amortization
of intangible assets
|
699
|
2,864
|
1,043
|
4,394
|
||||||||||||
|
Impairment
of long-lived assets
|
−
|
−
|
−
|
604
|
||||||||||||
|
Government
grants
|
(1,079 | ) | (1,079 | ) |
−
|
(1,307 | ) | |||||||||
|
Total
operating expenses
|
15,764
|
71,016
|
17,052
|
62,916
|
||||||||||||
|
Earnings
from operations
|
9,102
|
16,782
|
2,363
|
8,062
|
||||||||||||
|
Interest
and other income
|
1,204
|
4,717
|
1,074
|
3,253
|
||||||||||||
|
Foreign
exchange gain (loss)
|
(156 | ) | (49 | ) |
17
|
(595 | ) | |||||||||
|
Earnings
before income taxes
|
10,150
|
21,450
|
3,454
|
10,720
|
||||||||||||
|
Income
taxes
|
||||||||||||||||
|
Current
|
1,232
|
3,741
|
544
|
2,585
|
||||||||||||
|
Recognition
of previously unrecognized future income tax assets
|
(24,566 | ) | (24,566 | ) |
−
|
−
|
||||||||||
| (23,334 | ) | (20,825 | ) |
544
|
2,585
|
|||||||||||
|
Net
earnings for the period
|
$ |
33,484
|
$ |
42,275
|
$ |
2,910
|
$ |
8,135
|
||||||||
|
Basic
net earnings per share
|
$ |
0.49
|
$ |
0.61
|
$ |
0.04
|
$ |
0.12
|
||||||||
|
Diluted
net earnings per share
|
$ |
0.48
|
$ |
0.61
|
$ |
0.04
|
$ |
0.12
|
||||||||
|
Basic
weighted average number of shares outstanding
(000’s)
|
68,969
|
68,875
|
68,735
|
68,643
|
||||||||||||
|
Diluted
weighted average number of shares outstanding
(000’s)
|
69,486
|
69,555
|
69,346
|
69,275
|
||||||||||||
|
(1)
Stock-based compensation costs included
in:
|
||||||||||||||||
|
Cost
of sales
|
$ |
25
|
$ |
118
|
$ |
16
|
$ |
127
|
||||||||
|
Selling
and administrative
|
191
|
633
|
142
|
701
|
||||||||||||
|
Net
research and development
|
61
|
230
|
55
|
204
|
||||||||||||
| $ |
277
|
$ |
981
|
$ |
213
|
$ |
1,032
|
|||||||||
|
(2)
The cost of sales is exclusive of amortization, shown
separately.
|
||||||||||||||||
|
(3)
Net research and development expenses for the periods ended August
31,
2007 include recognition of unrecognized research and development
tax
credits of $3,162.
|
||||||||||||||||
EXFO
Electro-Optical Engineering
Inc.
Interim
Unaudited Consolidated Statements of Retained Earnings
(Deficit)
and
Contributed Surplus
(in
thousands of US dollars)
|
Retained
earnings (Deficit)
|
||||||||
|
Twelve
months ended August 31,
|
||||||||
|
2007
|
2006
|
|||||||
|
(unaudited)
|
||||||||
|
Balance
– Beginning of period
|
$ |
−
|
$ | (381,846 | ) | |||
|
Add
|
||||||||
|
Net
earnings for the period
|
42,275
|
8,135
|
||||||
|
Elimination
of deficit by reduction of share capital
|
−
|
373,711
|
||||||
|
Balance
– End of period
|
$ |
42,275
|
$ |
–
|
||||
|
Contributed
surplus
|
||||||||
|
Twelve
months ended August 31,
|
||||||||
|
2007
|
2006
|
|||||||
|
(unaudited)
|
||||||||
|
Balance
– Beginning of period
|
$ |
3,776
|
$ |
2,949
|
||||
|
Add
(deduct)
|
||||||||
|
Stock-based
compensation costs
|
973
|
1,027
|
||||||
|
Reclassification
of stock-based compensation costs to share capital upon exercise
of stock
awards
|
(296 | ) | (200 | ) | ||||
|
Balance
– End of period
|
$ |
4,453
|
$ |
3,776
|
||||
EXFO
Electro-Optical Engineering
Inc.
Interim
Unaudited Consolidated Statements of Cash Flows
(in
thousands of US dollars)
|
Three
months ended
August
31, 2007
|
Twelve
months ended
August
31, 2007
|
Three
months ended
August
31, 2006
|
Twelve
months ended
August
31, 2006
|
|||||||||||||
|
Cash
flows from operating activities
|
||||||||||||||||
|
Net
earnings for the period
|
$ |
33,484
|
$ |
42,275
|
$ |
2,910
|
$ |
8,135
|
||||||||
|
Add
(deduct) items not affecting cash
|
||||||||||||||||
|
Discount
on short-term investments
|
(1,062 | ) | (404 | ) | (872 | ) | (229 | ) | ||||||||
|
Stock-based
compensation costs
|
277
|
981
|
213
|
1,032
|
||||||||||||
|
Amortization
|
1,500
|
5,847
|
1,914
|
7,917
|
||||||||||||
|
Impairment
of long-lived assets
|
−
|
−
|
−
|
604
|
||||||||||||
|
Gain
on disposal of capital assets
|
(17 | ) | (117 | ) |
−
|
−
|
||||||||||
|
Future
income taxes
|
(24,566 | ) | (24,566 | ) |
−
|
−
|
||||||||||
|
Deferred
revenue
|
135
|
1,299
|
538
|
786
|
||||||||||||
|
Government
grants
|
(730 | ) | (752 | ) |
−
|
(1,307 | ) | |||||||||
|
9,021
|
24,563
|
4,703
|
16,938
|
|||||||||||||
|
Change
in non-cash operating items
|
||||||||||||||||
|
Accounts
receivable
|
792
|
(5,468 | ) |
1,521
|
(2,637 | ) | ||||||||||
|
Income
taxes and tax credits
|
(2,006 | ) | (3,403 | ) |
1,690
|
329
|
||||||||||
|
Inventories
|
(2,824 | ) | (5,456 | ) |
803
|
(2,287 | ) | |||||||||
|
Prepaid
expenses
|
174
|
85
|
260
|
79
|
||||||||||||
|
Accounts
payable and accrued liabilities
|
1,564
|
4,105
|
(759 | ) | (144 | ) | ||||||||||
|
6,721
|
14,426
|
8,218
|
12,278
|
|||||||||||||
|
Cash
flows from investing activities
|
||||||||||||||||
|
Additions
to short-term investments
|
(80,267 | ) | (807,056 | ) | (34,655 | ) | (673,289 | ) | ||||||||
|
Proceeds
from disposal and maturity of short-term investments
|
75,073
|
793,435
|
29,845
|
681,500
|
||||||||||||
|
Additions
to capital assets
|
(2,011 | ) | (5,547 | ) | (847 | ) | (3,378 | ) | ||||||||
|
Net
proceeds from disposal of capital assets
|
301
|
3,092
|
−
|
−
|
||||||||||||
|
Business
combination, net cash acquired
|
−
|
−
|
(338 | ) | (18,054 | ) | ||||||||||
| (6,904 | ) | (16,076 | ) | (5,995 | ) | (13,221 | ) | |||||||||
|
Cash
flows from financing activities
|
||||||||||||||||
|
Repayment
of long-term debt
|
(394 | ) | (472 | ) | (257 | ) | (415 | ) | ||||||||
|
Exercise
of stock options
|
229
|
802
|
54
|
557
|
||||||||||||
| (165 | ) |
330
|
(203 | ) |
142
|
|||||||||||
|
Effect
of foreign exchange rate changes on cash
|
(119 | ) |
8
|
(148 | ) |
535
|
||||||||||
|
Change
in cash
|
(467 | ) | (1,312 | ) |
1,872
|
(266 | ) | |||||||||
|
Cash
– Beginning of period
|
6,008
|
6,853
|
4,981
|
7,119
|
||||||||||||
|
Cash
– End of period
|
$ |
5,541
|
$ |
5,541
|
$ |
6,853
|
$ |
6,853
|
||||||||
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