Exfo takes a Q3 loss, lays off 5%
Exfo Electro-Optical Engineering reported a 10 percent drop in sales, took a charge for impairment of goodwill and was hit by exchange rate changes, which together swung the company to a loss in its fiscal third quarter, ended May 31. In response, the company laid off 65 people, or about 5 percent of its workforce.
Sales dropped from $48.6 million in the third quarter of 2008 to $43.6 million in the third quarter just completed. Sales were down 5.9 percent sequentially from $46.4 million in the immediately prior second quarter.
The company’s net loss was $23.3 million, compared with a profit of $11.2 million in the like period last year.
“Exfo delivered a solid sales quarter despite an increasingly challenging economic environment, and I remain confident that we’re continuing to gain market share,” said Germain Lamonde, Exfo’s chairman, president and CEO.
There is no sign of a turnaround in the short term. The company said net bookings dropped 20.7 percent to $40.2 million for a book-to-bill ratio of 0.92 in the third quarter of fiscal 2009.
“In the meantime, we continue to maintain a strong balance sheet, generate positive cash flow, and have taken actions to protect our earnings through a cost-reduction plan that will provide approximately $6 million in annualized pre-tax savings, while we carefully balance short-term profitability with mid/long-term strategy,” Lamonde said, referring to the layoffs and other cost controls.
The company said it has also applied for a Canadian federal program that will allow certain employees to work four days per week for a maximum of 52 weeks.