Quebec City, Canada, January 8, 2004. EXFO Electro-Optical Engineering reported sales growth of 11.4% and a 5.2% improvement in gross margin for the first quarter ended November 30, 2003. Sales reached $16.0 million in the first quarter of fiscal 2004 compared to $14.3 million in the fourth quarter of 2003 and $17.7 million in the first quarter of 2003. The net book-to-bill ratio increased to 1.06 in the first quarter of fiscal 2004 from 0.98 in the previous quarter and 0.89 in the first quarter of 2003.

Gross margin amounted to 51.0% of sales in the first quarter of fiscal 2004 compared to 45.8% (excluding inventory write-offs and a non-recurring gain) in the fourth quarter of 2003 and 54.7% in the first quarter of 2003.

Net GAAP loss for the first quarter of fiscal 2004 totaled $2.0 million, or $0.03 per share, compared to a net loss of $10.1 million, or $0.16 per share, for the fourth quarter of 2003 and a net loss of $2.2 million, or $0.03 per share, for the first quarter of 2003. Net loss in the first quarter of fiscal 2004 included a non-recurring tax gain of $1.4 million or $0.02 per share.

"Sequential increases in sales, bookings and gross margin, combined with a tight control on operating costs and a non-recurring tax gain, have brought us closer to our goal of reaching break-even, despite the negative impact of the Canadian dollar," said Germain Lamonde, Chairman, President and CEO of EXFO. "Thanks to our strong R&D program, we are introducing new and exciting products to respond to market opportunities, and strengthening our strategic position while placing a strong focus on improving our gross margin and efficiencies. These initiatives should help us to increase revenues through market-share gains and return EXFO to profitability."

EXFO successfully completed its business reorganization in the first quarter, consisting of two separate divisions to better serve its end-markets and maximize revenues. The company also introduced seven new products in the first quarter, including the 10+ Gigabit Multi-Rate Transceiver designed for the next-generation SONET/SDH equipment manufacturer market. This new product introduction is aligned with EXFO's strategy to expand both into the protocol layer and system manufacturer markets.

Finally, EXFO has been working with lead customers to help them efficiently deploy their planned fiber-to-the-premises (FTTP) networks.

EXFO forecasted sales between $14.0 million and $17.0 million and a GAAP net loss between $0.09 and $0.06 per share for the second quarter of fiscal 2004.

For more information, visit www.exfo.com .

Laser Focus World

Thu Jan 08 08:21:00 CST 2004