EXFO Inc (NASDAQ:EXFO) Q1 2020 Earnings Conference Call - Final Transcript

Jan 07, 2020 • 05:00 pm ET


EXFO Inc (NASDAQ:EXFO) Q1 2020 Earnings Conference Call - Final Transcript


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Good day everyone, welcome to EXFO's First Quarter Conference Call for Fiscal 2020. [Operator Instructions]. At this time, I'd like to turn the conference over to Vance Oliver, Director of Investor Relations. Please go ahead, sir.

Vance Oliver

Good afternoon and welcome to EXFO's first quarter conference call for fiscal 2020. With me on the line today are Philippe Morin, EXFO's Chief Executive Officer and Pierre Plamondon, CFO and Vice President of Finance. Germain Lamonde, EXFO's Founder and Executive Chairman will also be available to answer questions during the Q&A period.

A reminder that this conference call will include certain forward-looking statements and/or estimates concerning our intents, beliefs or expectations regarding future events that may affect EXFO. Please note that such comments will be affected by risks and/or uncertainties, which may cause the actual results of the Company to be materially different from those expressed or implied today.

For more information about EXFO, I encourage you to review our Form 20-F filed with the Securities and Exchange Commission. Our Annual Information Form is available with Canadian Securities Commission as well. Please note that non-IFRS numbers may be used during this conference call.

A reconciliation of these non-IFRS results with IFRS numbers is available in the Q1 2020 news release on our website. All dollar amounts in this conference call are expressed in U.S. dollars unless otherwise indicated. So without further delay, I will turn the call over to Philippe.

Philippe Morin

All right. Thank you, Vance, and good afternoon everyone. First of all, I'd like to take the opportunity to wish everyone on the call here a Happy New Year. Now turning to our financial results, EXFO opened fiscal 2020 with a strong first quarter performance, with sales increasing 6.3% year-over-year to $73.6 million.

Now this marked the fifth consecutive quarter, with our sales results finished above the midpoint of our management guidance. We're also pleased with our reported adjusted EBITDA of $7.5 million or 10.3% of sales, which set EXFO on the right path to achieve our profitability target of $33 million for the fiscal year. Our organic sales increase is mainly due to a steady influx of Test and Measurement orders that were booked and shipped in Q1 2020 versus a back end loaded Q1 2019.

And notably, we benefited from strong demand from EXFO's optical test solutions in our Asia-Pac region in our first quarter of 2020 and increased appetite of our 400-gig test equipment along with our high-end lab solution. Our bookings, however, were down versus the same period last year. And if you recall, we had reported our second highest bookings level of $81.2 million in Q1 2019 which was due to an unprecedented calendar year -- calendar -- year end spending on the part of service providers in Americas for our Test and Measurement products.

Now given less -- less than year spending -- year end spending and some annual maintenance contracts renewal being pushed out in the second quarter, our bookings totaled $69.9 million for a book to