EXFO Inc (NASDAQ:EXFO) Q2 2020 Earnings Conference Call - Final Transcript
Apr 07, 2020 • 05:00 pm ET
Thank you, sir. [Operator Instructions] We'll go first to Todd Coupland. Todd, your line is open. Please check your mute button.
Can you hear me okay?
Now we can, sir.
Apologies for that. Hi. Good evening, everyone. I was -- I had a few questions and I'll just walk through them here, if I could. First on the income statement. The opex that you had in the quarter, is that about the right level of opex to think about prior to seeing some turn-up in sales once we get into COVID?
Yeah, the level -- I'll make a high-level comment and I'm sure Pierre will add to that. So the level of opex that we have right now is pretty much, I would say, at the level that right now we're operating with. As I mentioned, we've decided to put a hiring freeze and obviously all of the other discretionary spend will be -- every dollar will be looked at. So the opex will probably, from a spend point of view, will probably go down from what you've seen here. But at this point, I would say with the hiring freeze that we have in place and the focus we are putting on any other kind of spend, I would expect our opex to slightly go down, but to be in that kind of range. Pierre, do you want to comment?
Yeah, I would add also that the Canadian currency went down since -- in the February and that should have a positive impact on our opex in US as well. So [Indecipherable] currency, we should have some saving, assuming that the currency -- Canadian dollars stay at the level that it is right now, okay.
Also with COVID we need to assume that travelling will be deeply reduced and we should see some saving on the traveling in addition of the hiring freeze that we're going to -- we're doing.
Great. Thank you. And then I just noticed on free cash flow while you just lost a few million dollars before non-cash working capital items, you had big cash names [Phonetic] from accounts receivable. So I'm assuming that you're not going to see that every quarter. So the way to think about burn at this point is $50 million above non-cash working capital. Is that -- tell me if I'm thinking about that correctly. Thanks.
Yeah, you're right. So as we have been impacted in the last month for our sales, so the accounts receivable went pretty down at the end of the quarter which is good for [Phonetic] the cash. We do expect that the accounts receivable will be back in line with the level that we have seen in the past in the $50 million roughly in sale -- in the receivable. Therefore, we will need that cash to finance the cash flow. So we should expect that accounts receivable in Europe will require some cash. But despite that, we should be able to fund our operation without