Title of each class
|
Name of each exchange on which registered
|
Subordinate Voting Shares without par value
|
NASDAQ
|
Subordinate Voting Shares without par value
|
TSX
|
Large accelerated filer
o
|
Accelerated filer
x
|
Non-accelerated filer
o
|
U.S. GAAP
o
|
International Financial Reporting Standards as issued by the
x
International Accounting Standards Board
|
Other
o
|
Identity of Directors, Senior Management and Advisers
|
Offer Statistics and Expected Timetable
|
Key Information
|
Years ended August 31,
|
||||||||||||||||
2014
|
2013
|
2012
|
2011
|
|||||||||||||
(in thousands of US dollars, except share
and per share data)
|
||||||||||||||||
Consolidated Statements of Earnings Data:
|
||||||||||||||||
Sales
|
$ | 230,806 | $ | 242,150 | $ | 249,966 | $ | 269,743 | ||||||||
Cost of sales
(1)
|
86,836 | 92,469 | 91,792 | 100,296 | ||||||||||||
Selling and administrative
|
86,429 | 88,756 | 94,139 | 87,062 | ||||||||||||
Net research and development
|
44,846 | 45,444 | 49,854 | 47,927 | ||||||||||||
Depreciation of property, plant and equipment
|
4,995 | 6,028 | 6,169 | 6,655 | ||||||||||||
Amortization of intangible assets
|
4,398 | 6,643 | 7,819 | 9,183 | ||||||||||||
Changes in fair value of cash contingent consideration
|
– | – | (311 | ) | (2,685 | ) | ||||||||||
Interest and other income
|
(326 | ) | (113 | ) | (131 | ) | (511 | ) | ||||||||
Foreign exchange (gain) loss
|
(1,634 | ) | (4,082 | ) | 657 | 3,808 | ||||||||||
Earnings (loss) before income taxes
|
5,262 | 7,005 | (22 | ) | 18,008 | |||||||||||
Income taxes
|
4,479 | 5,664 | 3,571 | 8,814 | ||||||||||||
Net earnings (loss) from continuing operations
|
783 | 1,341 | (3,593 | ) | 9,194 | |||||||||||
Net earnings from discontinued operations
|
– | – | – | 12,926 | ||||||||||||
Net earnings (loss) for the year
|
$ | 783 | $ | 1,341 | $ | (3,593 | ) | $ | 22,120 | |||||||
Basic and diluted net earnings (loss) from continuing operations per share
|
$ | 0.01 | $ | 0.02 | $ | (0.06 | ) | $ | 0.15 | |||||||
Basic net earnings (loss) per share
|
$ | 0.01 | $ | 0.02 | $ | (0.06 | ) | $ | 0.37 | |||||||
Diluted net earnings (loss) per share
|
$ | 0.01 | $ | 0.02 | $ | (0.06 | ) | $ | 0.36 | |||||||
Basic weighted average number of shares used in per share calculations (000’s)
|
60,329 | 60,323 | 60,453 | 60,000 | ||||||||||||
Diluted weighted average number of shares used in per share calculations (000’s)
|
61,015 | 61,110 | 60,453 | 61,488 | ||||||||||||
Other Consolidated Statements of Earnings Data:
|
||||||||||||||||
Gross research and development
|
$ | 52,423 | $ | 54,334 | $ | 59,282 | $ | 57,226 | ||||||||
Net research and development
|
$ | 44,846 | $ | 45,444 | $ | 49,854 | $ | 47,927 |
As at August 31,
|
||||||||||||||||
2014
|
2013
|
2012
|
2011
|
|||||||||||||
(in thousands of US dollars)
|
||||||||||||||||
Consolidated Balance Sheets Data:
|
||||||||||||||||
Cash
|
$ | 54,121 | $ | 45,386 | $ | 58,868 | $ | 22,771 | ||||||||
Short-term investments
|
5,726 | 4,868 | 8,236 | 47,091 | ||||||||||||
Total assets
|
278,031 | 281,538 | 306,683 | 322,355 | ||||||||||||
Long-term debt (excluding current portion)
|
– | – | 282 | 968 | ||||||||||||
Share capital
|
111,491 | 109,837 | 110,965 | 110,341 | ||||||||||||
Shareholders’ equity
|
$ | 231,370 | $ | 236,452 | $ | 253,281 | $ | 264,511 |
(1)
|
The cost of sales is exclusive of depreciation and amortization, shown separately.
|
|
●
|
difficulty forecasting, budgeting and planning due to the uncertain spending plans of current or prospective customers;
|
|
●
|
increased competition for fewer network projects and sales opportunities;
|
|
●
|
increased pricing pressure that may adversely affect revenue and gross margin;
|
|
●
|
higher cost structure compared to revenue level;
|
|
●
|
increased risk of charges related to excess and obsolete inventories, write-off of deferred tax assets and tax credits, and impairment of intangible assets and goodwill;
|
|
●
|
customers’ financial difficulties and increased difficulty in collecting accounts receivable; and
|
|
●
|
additional restructuring costs.
|
|
●
|
increased competition for business;
|
|
●
|
reduced demand;
|
|
●
|
limited number of potential customers;
|
|
●
|
competition from companies with lower production costs, including companies operating in lower-cost environments;
|
|
●
|
introduction of new products by competitors;
|
|
●
|
greater economies of scale for higher-volume competitors;
|
|
●
|
large customers, who buy in high volumes, can exert substantial negotiating leverage over us; and
|
|
●
|
resale of used equipment.
|
|
●
|
issue shares that would dilute individual shareholder percentage ownership;
|
|
●
|
incur debt;
|
|
●
|
assume liabilities and commitments;
|
|
●
|
incur significant expenses related to acquisition costs;
|
|
●
|
incur significant expenses related to amortization of additional intangible assets;
|
|
●
|
incur significant impairment losses of goodwill and intangible assets related to such acquisitions; and
|
|
●
|
incur losses from operations.
|
|
●
|
the risk of not realizing the expected benefits or synergies from such acquisitions or alliances;
|
|
●
|
problems integrating the acquired operations, technologies, products and personnel;
|
|
●
|
risks associated with the transfer of acquired know-how and technology;
|
|
●
|
unanticipated costs or liabilities;
|
|
●
|
diversion of management’s attention from our core business;
|
|
●
|
adverse effects on existing business relationships with suppliers and customers;
|
|
●
|
risks associated with entering markets in which we have no or limited prior experience; and
|
|
●
|
potential loss of key employees, particularly those of acquired organizations.
|
|
●
|
challenges in staffing and managing foreign operations due to the limited number of qualified candidates, employment laws and business practices in foreign countries, any of which could increase the cost and reduce the efficiency of operating in foreign countries;
|
|
●
|
fluctuations among currencies;
|
|
●
|
our inability to comply with import/export, environmental and other trade compliance regulations of the countries in which we do business, together with unexpected changes in such regulations;
|
|
●
|
measures to ensure that we design, implement and maintain adequate and effective controls over our financial processes and reporting in the future;
|
|
●
|
failure to adhere to laws, regulations and contractual obligations relating to customer contracts in various countries;
|
|
●
|
difficulties in establishing and enforcing our intellectual property rights;
|
|
●
|
inability to maintain a competitive list of distributors for indirect sales;
|
|
●
|
tariffs and other trade barriers;
|
|
●
|
economic instability in foreign markets;
|
|
●
|
wars, acts of terrorism and political unrest;
|
|
●
|
language and cultural barriers;
|
|
●
|
lack of integration of foreign operations;
|
|
●
|
potential foreign and domestic tax consequences;
|
|
●
|
technology standards that differ from those on which our products are based, which could require expensive redesign and retention of personnel familiar with those standards;
|
●
|
longer accounts receivable payment cycles and possible difficulties in collecting payments which may increase our operating costs and hurt our financial performance; and
|
|
●
|
failure to meet certification requirements.
|
|
●
|
difficulty in hiring and retaining appropriate engineering and manufacturing resources due to intense competition for such resources and resulting wage inflation;
|
|
●
|
exposure to misappropriation of intellectual property and proprietary information;
|
|
●
|
heightened exposure to changes in the economic, regulatory, security, and political conditions of these countries;
|
|
●
|
fluctuations in currency exchange rates;
|
|
●
|
changes in tax compliance in India and China;
|
|
●
|
cash management and repatriation of profit; and
|
|
●
|
high inflation rates which could increase our operating costs.
|
|
●
|
properly identify and anticipate customer needs;
|
|
●
|
innovate and develop new products;
|
|
●
|
gain timely market acceptance for new products;
|
|
●
|
manufacture and deliver our new products on time, in sufficient volume and with adequate quality;
|
|
●
|
price our products competitively;
|
|
●
|
continue investing in our research and development programs; and
|
|
●
|
anticipate competitors’ announcements of new products.
|
|
●
|
costly repairs;
|
|
●
|
product returns or recalls;
|
|
●
|
damage to our brand reputation;
|
|
●
|
loss of customers, failure to attract new customers or achieve market acceptance;
|
|
●
|
diversion of development and engineering resources;
|
|
●
|
legal actions by our customers, including claims for consequential damages and loss of profits; and
|
|
●
|
legal actions by governmental entities, including actions to impose product recalls and/or forfeitures.
|
|
●
|
length of the sales cycle for certain products, especially those that are higher priced and more complex;
|
|
●
|
sales cycle prolonged by lengthy customer acceptance;
|
|
●
|
timing of product launches and market acceptance of our new products for us as well as those of our competitors;
|
|
●
|
our ability to sustain product volumes and high levels of quality across all product lines;
|
|
●
|
timing of shipments for large orders;
|
|
●
|
effect of seasonality on sales and bookings; and
|
|
●
|
losing key accounts and not successfully developing new ones.
|
|
●
|
fluctuating demand for telecommunications test and service assurance equipment;
|
|
●
|
changes in the capital spending and operating budgets of our customers, which may cause seasonal or other fluctuations in product mix, volume, timing and number of orders we receive from our customers;
|
|
●
|
order cancellations or rescheduled delivery dates;
|
|
●
|
pricing changes by our competitors or suppliers;
|
|
●
|
insufficient or excess inventory;
|
|
●
|
variations in the mix between higher and lower-margin products and services;
|
|
●
|
customer bankruptcies and difficulties in collecting accounts receivable;
|
|
●
|
restructuring and impairment charges;
|
|
●
|
foreign exchange rate fluctuations;
|
|
●
|
general economic conditions, including a slowdown or recession;
|
|
●
|
distorted effective tax rate due to non-taxable/deductible elements and unrecognized deferred tax assets; and
|
|
●
|
effects of recent acquisitions of businesses.
|
Information on the Company
|
|
●
|
Increase our presence with wireless operators;
|
|
●
|
Expand our sales with Tier-1 network operators;
|
|
●
|
Evolve from an instruments to a solutions supplier; and
|
|
●
|
Accelerate profitability.
|
|
●
|
Performance monitoring and analysis;
|
|
●
|
Advanced data correlation and analysis engine;
|
|
●
|
VoIP and VoLTE service assurance;
|
|
●
|
IP/MPLS service assurance;
|
|
●
|
Mobile backhaul and metro Ethernet service assurance;
|
|
●
|
IP video service assurance;
|
|
●
|
Advanced analytics and reports; and
|
|
●
|
Custom solutions and back-office integration services.
|
|
●
|
BrixCall: Voice quality and performance management;
|
|
●
|
BrixNGN: IP/MPLS and carrier Ethernet (mobile backhaul and metro Ethernet) service quality monitoring;
|
|
●
|
BrixVision: Comprehensive IP video quality and performance management;
|
|
●
|
BrixView: Advanced analytics and business intelligence software; and
|
|
●
|
BrixFlex: Adapted analytics and customized dashboards for integrated operations with operator backoffice and NOC systems.
|
Wireless Test and Solutions
|
||
Product Type
|
Product Line
|
Typical Application
|
Protocol Analyzer
|
PowerHawk & PowerHawk Pro,
TravelHawk &TravelHawk Pro
|
Protocol analysis to verify correct network behavior.
|
Network Simulator
|
EAST portfolio, QA 600 &
800 families
|
Regression and load testing.
|
Mobile Communications Intelligence Tools
|
NetHawk F10, NetHawk X6 and
NetHawk C2
|
Intelligence tools for police, armed forces and other governmental organizations to fight organized crime and terrorists.
|
|
●
|
Market study and research feasibility;
|
|
●
|
Product definition;
|
|
●
|
Development feasibility;
|
|
●
|
Development;
|
|
●
|
Qualification; and
|
|
●
|
Transfer to production
|
|
●
|
Customer Relationship Management (CRM) Administration –
Business Ownership of our CRM toolset and evolution;
|
|
●
|
Sales Support –
Leverage the effectiveness of our sales force by providing pre-sales and demo support, as well as guiding customers in purchasing the correct equipment for their respective applications, issuing quotations, and promoting our extended warranty service and support program;
|
|
●
|
Order Management –
Accurately process customer orders from entry through fulfillment and delivery, and manage order changes;
|
|
●
|
Customer Service
–
Serve as a primary interface for inbound and outbound customer communication. Provide customers with one central point of contact and work with the customer from purchasing equipment to helping them arrange for service, if necessary;
|
|
●
|
Field Support –
Provide expert technical support and deliver product service worldwide. Support our Worldwide Service Centers and directly manage the Service Partner Program. Where applicable, furnish installation and on-site servicing for more complex equipment and applications;
|
|
●
|
Systems Services –
Provide pre-sale, delivery, post-sale technical support, and systems actualization of customer’s network monitoring and converged service assurance systems;
|
|
●
|
Education Services –
Aggregate expertise, develop material, and deliver free and fee-based training;
|
|
●
|
Professional Services –
Provide value-added solution services for our test and system customers.
|
|
●
|
Production.
From production planning to product shipment, our production department is responsible for manufacturing high-quality products on time. Factories are organized in work cells; each cell consists of specialized technicians with equipment and has full responsibility over a product family. Technicians are cross-trained and versatile enough, so that they can carry out specific functions in more than one cell. This allows shorter lead times by alleviating bottlenecks.
|
|
●
|
Manufacturing and Test Engineering.
This department, which supports our production cells, acts like a gatekeeper to ensure the quality of our products and the effectiveness of our manufacturing processes. It is responsible for the transfer of products from research and development to manufacturing, product improvement, documentation, metrology, and the quality control and regulatory compliance process. Quality control represents a key element in our manufacturing operations. Quality is assured through product testing at numerous stages in the manufacturing process to ensure that our products meet both stringent industry and customer performance requirements.
|
|
●
|
Supply-Chain Management.
This department is responsible for sales forecasting, raw material procurement, material-cost reduction and vendor performance management. Our products consist of optical, electronic and mechanical parts, which are purchased from suppliers around the world. Approximately one-third of our parts are manufactured to our specifications. Materials represent the largest portion of our cost of goods. Our performance is tightly linked to vendor performance, requiring greater emphasis on this critical aspect of our business.
|
|
●
|
product performance and reliability;
|
|
●
|
solution’s contribution to productivity;
|
|
●
|
price and quality of products;
|
|
●
|
level of technological innovation;
|
|
●
|
product lead times;
|
|
●
|
breadth of product offerings;
|
|
●
|
ease of use;
|
|
●
|
brand-name recognition;
|
|
●
|
customer service and technical support;
|
|
●
|
strength of sales and distribution relationships; and
|
|
●
|
financial stability.
|
|
●
|
a method and apparatus for improved characterization of loss-inducing “events” along an optical fiber using an Optical Time Domain Reflectometer (OTDR). This invention describes how, by a judicious combination of OTDR data corresponding to different optical-pulse durations, the location and loss characteristics of an event can be quantified with much better accuracy and/or more rapidly than via conventional approaches. This invention is offered as an option for almost all of the current EXFO OTDR-based products;
|
|
●
|
a method for determining the optical signal-to-noise ratio employing an optical spectrum analyzer, which is particularly advantageous for use with tightly-filtered DWDM signals used in high-bandwidth optical networks. This invention is a key value-added option to our FTB-5240-S series of portable optical spectrum analyzers;
|
|
●
|
a method and apparatus to determine the theoretical and practical data rates for a cable under test. This invention forms the basis of the EXFO CableSHARK product, describing how two test devices, communicating with each other via the cable under test, can predict the performance of a pair of ADSL (Asymmetric Digital Subscriber Line) modems, and in case of problems, analyze the cause of the modems’ failure to synchronize;
|
|
●
|
a method and system for hardware time stamping packetized data to provide sub-microsecond accuracy in test measurements, which is embedded in the Brix100M, Brix1000, and Brix2500 Series Verifiers;
|
|
●
|
a method for actively analyzing a data packet delivery path to provide diagnostics and root cause analysis of network delivery path issues, which is embedded in BrixCall, BrixNGN, and BrixVision applications of EXFO Service Assurance;
|
|
●
|
a distributed protocol analyzer for quality-of-service measurement. This invention underlies the combined QoS measurements offered in the NetHawk iPro and NetHawk M5 products; and
|
|
●
|
a communication methodology used to perform independent bi-directional protocol testing over a connection or connectionless network between two test instruments, wherein the transfer mechanism of status and intermediate test results during an active test and the transmission of the final results to one of the instruments enables the user to perform a bidirectional single-ended test. This invention is at the heart of the EXFO Datacom product families, including applications in conformity with our EtherSAM standard test suite.
|
Location
|
Use of Space
|
Square
Footage
|
% of
Utilization
|
Type of
Interest
|
|
436 Nolin Street
Quebec (Quebec)
G1M 1E7
|
Occupied for manufacturing of products
|
44,000
|
90%
|
Owned
|
|
400 Godin Avenue
Quebec (Quebec)
G1M 2K2
|
Occupied for research and development, customer services, manufacturing, management and administration
|
129,000
|
(1)
|
85%
|
Owned
|
2500 Alfred-Nobel
Montreal (Quebec)
H4S 2C3
|
Occupied for research and development, management and administration
|
75,000
|
50%
|
Owned
|
|
2500 Alfred-Nobel
Montreal (Quebec)
H4S 2C3
|
Available for rent
|
50,000
|
0%
|
Owned
|
|
160 Drumlin Circle
Concord (Ontario)
L4K 3E5
|
Occupied for research and development, product management and administration
|
23,500
|
40%
|
Owned
|
|
270 Billerica Road
Chelmsford, MA 01824
United States
|
Occupied for research and development, manufacturing, management and administration
|
29,000
|
75%
|
Leased
|
Location
|
Use of Space
|
Square
Footage
|
% of
Utilization
|
Type of
Interest
|
|
Winchester House
School Lane
Chandlers Ford, Eastleigh
Hampshire SO53 4DG
United Kingdom
|
Occupied for European customer service, sales management and administration
|
13,000
|
70%
|
Leased
|
|
3
rd
Floor, Building 10
Yu Sheng Industrial Park
(Gu Shu Crossing)
No. 467, National Highway 107
Xixiang, Bao An District
Shenzhen 518126
China
|
Occupied for manufacturing of products
|
56,000
|
90%
|
Leased
|
|
Offices No 102, 602, 603, 604, 701 and 702
Tower S-4 Cybercity
Magarpatta , Hadapsar
Pune 411 013
India
|
Occupied for research and development
|
39,960
|
80%
|
Owned
|
|
Elektroniikkatie 2
FI-90590 Oulu
Finland
|
Occupied for research and development, manufacturing, management and administration
|
30,241
|
100%
|
Leased
|
(1)
|
Including the warehouse space. Premises without the warehouse are approximately 115,000 square feet.
|
Operating and Financial Review and Prospects
|
Consolidated statements of earnings data
(1)
:
|
2014
|
2013
|
2012
|
2014
|
2013
|
2012
|
||||||||||||||||||
Sales | $ | 230,806 | $ | 242,150 | $ | 249,966 | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||
Cost of sales
(2)
|
86,836 | 92,469 | 91,792 | 37.6 | 38.2 | 36.7 | ||||||||||||||||||
Selling and administrative
|
86,429 | 88,756 | 94,139 | 37.4 | 36.6 | 37.7 | ||||||||||||||||||
Net research and development
|
44,846 | 45,444 | 49,854 | 19.4 | 18.8 | 19.9 | ||||||||||||||||||
Depreciation of property, plant and equipment
|
4,995 | 6,028 | 6,169 | 2.2 | 2.5 | 2.5 | ||||||||||||||||||
Amortization of intangible assets
|
4,398 | 6,643 | 7,819 | 1.9 | 2.7 | 3.1 | ||||||||||||||||||
Changes in the fair value of cash contingent consideration
|
– | – | (311 | ) | – | – | (0.1 | ) | ||||||||||||||||
Interest and other income
|
(326 | ) | (113 | ) | (131 | ) | (0.1 | ) | – | (0.1 | ) | |||||||||||||
Foreign exchange (gain) loss | (1,634 | ) | (4,082 | ) | 657 | (0.7 | ) | (1.7 | ) | 0.3 | ||||||||||||||
Earnings (loss) before income taxes
|
5,262 | 7,005 | (22 | ) | 2.3 | 2.9 | – | |||||||||||||||||
Income taxes
|
4,479 | 5,664 | 3,571 | 2.0 | 2.3 | 1.4 | ||||||||||||||||||
Net earnings (loss) for the year | $ | 783 | $ | 1,341 | $ | (3,593 | ) | 0.3 | % | 0.6 | % | (1.4 | )% | |||||||||||
Basic and diluted net earnings (loss) per share
|
$ | 0.01 | $ | 0.02 | $ | (0.06 | ) | |||||||||||||||||
Other selected information:
|
||||||||||||||||||||||||
Gross margin
(3)
|
$ | 143,970 | $ | 149,681 | $ | 158,174 | 62.4 | % | 61.8 | % | 63.3 | % | ||||||||||||
Research and development data:
|
||||||||||||||||||||||||
Gross research and development
|
$ | 52,423 | $ | 54,334 | $ | 59,282 | 22.7 | % | 22.4 | % | 23.7 | % | ||||||||||||
Net research and development
|
$ | 44,846 | $ | 45,444 | $ | 49,854 | 19.4 | % | 18.8 | % | 19.9 | % | ||||||||||||
Restructuring charges included in:
|
||||||||||||||||||||||||
Cost of sales
|
$ | – | $ | – | $ | 264 | – | % | – | % | 0.1 | % | ||||||||||||
Selling and administrative expenses
|
$ | – | $ | – | $ | 1,181 | – | % | – | % | 0.5 | % | ||||||||||||
Net research and development expenses
|
$ | – | $ | 89 | $ | 884 | – | % | – | % | 0.4 | % | ||||||||||||
Adjusted EBITDA (3) | $ | 14,391 | $ | 17,338 | $ | 18,372 | 6.2 | % | 7.2 | % | 7.3 | % | ||||||||||||
Consolidated balance sheets data
(1)
:
|
||||||||||||||||||||||||
Total assets
|
$ | 278,031 | $ | 281,538 | $ | 306,683 | ||||||||||||||||||
Long-term debt (excluding
current portion)
|
$ | – | $ | – | $ | 282 |
(1)
|
Consolidated statements of earnings and balance sheets data has been derived from our consolidated financial statements prepared according with IFRS, as issued by the IASB, except for non-IFRS measures
(3)
.
|
(2)
|
The cost of sales is exclusive of depreciation and amortization, shown separately.
|
(3)
|
Refer to page 52 for non-IFRS measures.
|
Expiry dates
|
Contractual
amounts
|
Weighted average
contractual
forward rates
|
||
September 2014 to August 2015
|
$ 22,200,000
|
1.0666
|
||
September 2015 to August 2016
|
13,400,000
|
1.0923
|
||
September 2016 to December 2016
|
3,400,000
|
1.1063
|
||
Total
|
$ 39,000,000
|
1.0789
|
Expiry dates
|
Contractual
amounts
|
Weighted average
contractual
forward rate
|
||
September 2014 to March 2015
|
$ 2,800,000
|
62.11
|
(a)
|
Determination of functional currency
|
(a)
|
Inventories
|
(b)
|
Income taxes
|
(c)
|
Tax credits recoverable
|
(d)
|
Impairment of non-financial assets
|
i)
|
Growth rates
|
ii)
|
Discount rate
|
EXFO CGU
|
$ 10,465,000
|
|
Brix CGU
|
16,023,000
|
|
Total
|
$ 26,488,000
|
*
|
Gross margin represents sales less cost of sales, excluding depreciation and amortization.
|
**
|
Adjusted EBITDA represents net earnings (loss) before interest, income taxes, depreciation and amortization, restructuring charges, changes in the fair value of the cash contingent consideration, stock-based compensation costs and foreign exchange gain or loss.
|
Year ended August 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
IFRS net earnings (loss) for the year
|
$ | 783 | $ | 1,341 | $ | (3,593 | ) | |||||
Add (deduct):
|
||||||||||||
Depreciation of property, plant and equipment
|
4,995 | 6,028 | 6,169 | |||||||||
Amortization of intangible assets
|
4,398 | 6,643 | 7,819 | |||||||||
Interest and other income
|
(326 | ) | (113 | ) | (131 | ) | ||||||
Income taxes
|
4,479 | 5,664 | 3,571 | |||||||||
Restructuring charges
|
– | 89 | 2,329 | |||||||||
Changes in fair value of cash contingent consideration
|
– | – | (311 | ) | ||||||||
Stock-based compensation costs
|
1,696 | 1,768 | 1,862 | |||||||||
Foreign exchange (gain) loss
|
(1,634 | ) | (4,082 | ) | 657 | |||||||
Adjusted EBITDA for the year
|
$ | 14,391 | $ | 17,338 | $ | 18,372 | ||||||
Adjusted EBITDA in percentage of total sales
|
6.2 | % | 7.2 | % | 7.3 | % |
Directors, Senior Management and Employees
|
Name and Municipality of Residence
|
Positions with EXFO
|
|
PIERRE-PAUL ALLARD
Pleasanton, California
|
Independent Director
|
|
JON BRADLEY
Worminghall, United Kingdom
|
Vice-President, Sales — EMEA
|
|
STEPHEN BULL
Quebec City, Quebec
|
Vice-President, Research and Development
|
|
DARRYL EDWARDS
Weston Under Wetherley, United Kingdom
|
Independent Director
|
|
ÉTIENNE GAGNON
Quebec City, Quebec
|
Vice-President, Physical-Layer and Wireless Division
|
|
LUC GAGNON
St-Augustin-de-Desmaures, Quebec
|
Vice-President, Manufacturing Operations and Customer Service
|
|
GERMAIN LAMONDE
St-Augustin-de-Desmaures, Quebec
|
Chairman of the Board, President and Chief Executive Officer
|
|
GUY MARIER
Lakefield Gore, Quebec
|
Independent Director
|
|
CLAUDIO MAZZUCA
LaSalle, Quebec
|
Vice-President, Transport and Service Assurance Division
|
|
PIERRE PLAMONDON
Quebec City, Quebec
|
Vice-President, Finance and Chief Financial Officer
|
|
BENOIT RINGUETTE
Boischatel, Quebec
|
General Counsel and Corporate Secretary
|
|
SYLVAIN ROULEAU
Kirkland, Quebec
|
Vice-President, Human Capital
|
|
CLAUDE SÉGUIN
Montreal, Quebec
|
Independent Director
|
|
LEE HUAT (JOSEPH) SOO
Singapore
|
Vice-President, Sales — Asia-Pacific
|
|
RANDY E. TORNES
Frisco, Texas
|
Independent Director
|
|
DANA YEARIAN
Lake Forest, Illinois
|
Vice-President, Sales — Americas
|
|
●
|
Mr. Guy Marier (Chairman)
|
|
●
|
Mr. Pierre-Paul Allard
|
|
●
|
Mr. Darryl Edwards
|
|
●
|
Mr. Claude Séguin
|
|
●
|
Mr. Randy E. Tornes
|
Meeting
|
Main activities of the Human Resources Committee
|
|
October 8, 2013
|
●
|
Review of the Business Performance Measures results for the financial year ended August 31, 2013;
|
●
|
Review and approval of the Business Performance Measures for the financial year started September 1, 2013;
|
|
●
|
Review of the Short-Term Incentive Plan results for the financial year ended August 31, 2013;
|
|
●
|
Review and approval of the Short-Term Incentive Plan for the financial year started September 1, 2013;
|
|
●
|
Review of the proposed salary scales and salary increases for the year started September 1, 2013;
|
|
●
|
Review and approval of the compensation plans of executive officers for the financial year started September 1, 2013 being the Base Salary, the Short-Term Incentive Plan and the stock-based compensation delivered through the Long-Term Incentive Plan;
|
|
●
|
Review and approval of the stock-based compensation plan for the sales force delivered through the Long-Term Incentive Plan for the financial year started September 1, 2013;
|
|
●
|
Review and approval of the quantum for the stock-based compensation plan for the performing employees delivered through the Long-Term Incentive Plan for the financial year started September 1, 2013;
|
|
●
|
Review and approval of the executive compensation section of the management proxy circular for the financial year ended August 31, 2013;
|
|
●
|
Review of the succession planning program;
|
|
●
|
Review of the Mobilization / Motivation Plan;
|
|
●
|
Review of the Management Structure;
|
|
●
|
Review and approval of the CEO objectives and compensation plan;
|
|
●
|
Review of the Risk Assessment of Executive Compensation disclosure obligations.
|
|
January 8, 2014
|
●
|
Review of the quarterly payments under the Short-Term Incentive Plan for the financial year started September 1, 2013 and being part of the Short-Term Incentive Plan;
|
●
|
Review and approval of the stock-based compensation for performing employees delivered through the Long-Term Incentive Plan for the financial year started September 1, 2013;
|
|
●
|
Review of the Management Structure;
|
|
●
|
Global Compensation Review;
|
|
●
|
Review and approval of the compensation plans of executive officers for the financial year started September 1, 2013 being the Base Salary, the Short-Term Incentive Plan and the stock-based compensation delivered through the Long-Term Incentive Plan.
|
|
March 25, 2014
|
●
|
Review of the quarterly payments under the Short-Term Incentive Plan for the financial year started September 1, 2013 and being part of the Short-Term Incentive Plan;
|
●
|
Review of the Key Human Capital Initiatives;
|
|
●
|
Global Compensation Review (benchmarking, sales commissions, pension, benefits and working conditions);
|
|
●
|
Review of the Management Structure;
|
|
●
|
Review of the Talent Management.
|
|
June 25, 2014
|
●
|
Review of the quarterly payments under the Short-Term Incentive Plan for the financial year started September 1, 2013 and being part of the Short-Term Incentive Plan;
|
●
|
Review of the succession planning process;
|
|
●
|
Update on the Global Compensation Review;
|
|
●
|
Update on the Management Structure Review;
|
|
●
|
Review of the Key Human Capital Initiatives.
|
|
October 8, 2014
|
●
|
Review of the Business Performance Measures results for the financial year ended August 31, 2014;
|
●
|
Review and approval of the Business Performance Measures for the financial year started September 1, 2014;
|
|
●
|
Review of the Short-Term Incentive Plan results for the financial year ended August 31, 2014;
|
|
●
|
Review and approval of the Short-Term Incentive Plan for the financial year started September 1, 2014;
|
|
●
|
Review and approval of the compensation plans of executive officers for the financial year started September 1, 2014 being the Base Salary, the Short-Term Incentive Plan and the stock-based compensation delivered through the Long-Term Incentive Plan;
|
|
●
|
Review and approval of the stock-based compensation for the sales force delivered through the Long-Term Incentive Plan for the financial year started September 1, 2014;
|
|
●
|
Review and approval of the quantum for the stock-based compensation for the performing employees delivered through the Long-Term Incentive Plan for the financial year started September 1, 2014;
|
|
●
|
Review and approval of the executive compensation section of the management proxy circular for the financial year ended August 31, 2014;
|
|
●
|
Review of the Management Structure;
|
|
●
|
Review and approval of the CEO objectives and compensation plan;
|
|
●
|
Review of the Risk Assessment of Executive Compensation disclosure obligations.
|
Type of Fee
|
Financial 2013 Fees
|
Percentage of
Financial 2013 Fees
|
Financial 2014 Fees
|
Percentage of
Financial 2014 Fees
|
||||
Executive Compensation Related Fees
|
CA$58,958
|
(1)
|
39%
|
CA$16,823
|
(1) (2)
|
18%
|
||
All Other Fees
|
CA$91,300
|
61%
|
CA$76,541
|
82%
|
||||
Total
|
CA$150,258
|
100%
|
CA$93,364
|
100%
|
(1)
|
The aggregate fees paid to Towers Watson are CA$58,958 and CA$13,854 respectively for financial 2013 and 2014, and the aggregate fees paid to 37-2 Conseil Inc. are CA$2,969 in 2014.
|
(2)
|
Those fees are not exclusively related to executive compensation as some work was also used for other employees.
|
|
●
|
Canadian e
xecutives
: For the executives based in Canada, the Corporation used the following comparator group: 5N Plus Inc., Aastra Technologies Ltd., ACCEO Solutions, Atos It Services and Solutions, Inc., Avigilon Corporation, Calian Technologies Ltd., COM DEV International Ltd., Constellation Software Inc., GTECH, Ericsson Canada Inc., Evertz Technologies Ltd., Hemisphere GPS Inc., Hitachi Data Systems, Miranda Technologies Inc., OpenText Corporation, Redline Communications Group Inc., Sandvine Corporation, Sierra Wireless Inc., Smart Technologies Inc., Vecima Networks Inc. and Wi-Lan Inc.
|
|
●
|
United States executives
: For the executives based in the United States, the Corporation used the following comparator group: AMETEK, Aricent Group, Cincinnati Bell, Consolidated Communications, Crown Castle, ESRI, Fidessa Group, Globecomm Systems, Hutchinson Technology, Itron, Kaspersky Lab, Omgeo, Openet, PASCO Scientific, Plexus, SAS Institute, Sensata Technologies, Spotify, Teradata and Total System Services.
|
|
●
|
United Kingdom executives
: For the executives based in the United Kingdom, the Corporation used the following comparator group: ARM Holdings, BT, Cable & Wireless, COLT Telecom, Computacenter, Electrocomponents, Everything Everywhere, hibu (prev. Yell Group), Hitachi Data Systems, Office Depot, Pearson Group, Pitney Bowes, Reed Elsevier, Sage UK, Telefonica O2, Three, Virgin Media and Vodafone.
|
|
●
|
Asia executives
: For the executives based in Asia, the Corporation used a broader comparator group, based on general industry data: Abbott Laboratories, Ace Insurance Limited, Acr Capital Holdings Pte Ltd, Aeg Power Solutions, Agilent Technologies, Aia Co. Ltd (Singapore), Allianz Insurance, Allianz Se Reinsurance Branch Asia Pacific, Amlin Plc, Aon Asia Pacific, Astrazeneca Singapore Pte Ltd, Atos, Australia And New Zealand Banking Group Limited, Avanade, Aviva Asia, Aviva Ltd, Axa Asia Regional Centre Pte Ltd, Axa Insurance Singapore Pte Ltd, Axa Life Insurance Singapore, Bank Of America, Bank Of East Asia, Barclays Capital, Baxter Healthcare (Asia) Pte Ltd, BBC Worldwide, Belgacom, Biosensors Interventional Technologies Pte Ltd, Boeing (United States), Bombardier Transportation Gmbh, Boston Scientific Asia Pacific, BP, British Telecomms, Cable & Wireless, Canon, Catlin Singapore Pte Ltd, Celgene Pte Ltd, Cerebos Pacific, Certis Cisco Security, Chartis S'Pore, Chubb Pacific Underwriting, Cimb, Cisco, Citigroup, Clearwater Capital, Colt Technology Services Sa, Commerzbank Ag, Commscope Solutions Singapore Pte Ltd, Credit Suisse, Dbs, De Lage Landen Pte Ltd, Delphi Automotive Systems, Dematic, Dentsply, Deutsche Bank, Dhl Global Forwarding Management (Asia Pacific) Pte Ltd, Dhl Global Fowarding Singapore, Dhl Supply Chain Singapore, Diageo Plc, Discovery, Edwards Lifesciences (Asia) Pte Ltd, Edwards Lifesciences (Singapore) Pte Ltd, Energy Market Company, Enpro, Espnstar Sports, Estee Lauder Asia, Euler Hermes Credit Insurance Agency (S) Pte Ltd, Expedia, Inc., Experian Plc, Franklin Templeton Capital Holdings Pte Ltd, Friends Provident International Ltd, General Reinsurance Ag, Goldman Sachs, Great Eastern Life Insurance, Hewlett-Packard, Hill-Rom, Hilton Worldwide, Htc Corporation, Ida, Ii-Vi, Img, Ing Bank N.V., Singapore, Intel, Jabil Circuit, Inc., Jardine Lloyd Thompson Limited, John Wiley & Sons, Jones Lang Lasalle, JPMorgan Chase, Lenovo, Lexmark, Liberty Insurance Pte Ltd, Liberty Insurance Underwriters, Lilly-Nus Centre For Clinical Pharmacology Pte Ltd, M1, Malayan Banking Berhad, Manulife (Singapore) Pte Ltd, Marvell, Mastercard, Merck Pte Ltd, Microsoft, Mine Safety Appliances (United States), Molex, Morgan Stanley, Mp Biomedicals Asia Pacific Pte Ltd, Msig Insurance, MTV Asia, Mundipharma Pte Ltd, Munich Management Pte Ltd, Nagravision, National Australia Bank, NBC Universal, Nomura, Ocbc, Orange Business Services, Pacific Life Re Limited, Singapore Branch, Pall Corporation, Pearson Education South Asia Pte Ltd, Pfizer Asia Pacific Pte Ltd, Philips Electronic (S) Pte Ltd, Pramerica Financial Asia Hq Pte Ltd, Premier Farnell (Element14), Printronix, Prudential Assurance Company Singapore (Pte) Ltd, Qbe Insurance (International) Ltd, Qliktech International, Rbc Dexia Investor Services Bank, Reckitt Benckiser, East Asia, Reed Elsevier, Rentokil Initial Asia Pacific Management Pte Ltd, Research In Motion, Rhb Bank, Rolls Royce, Royal Bank Of Scotland, Royal Bank Of Scotland Gbm, Royal Dutch Shell, Royal Philips Electronics, Rsa Insurance, Sakari Resources Limited, Sandoz International Gmbh, Sanofi-Aventis Singapore Pte Ltd, SAS Institute, Scor Services Asia Pacific Pte Ltd, Sirtex Medical Ltd, Skandinaviska Enskilda Banken Ab Publ, Smith & Nephew Pte Ltd, Sompo Japan Insurance (Singapore) Pte Ltd, Standard & Poors, Standard Chartered Bank, Standard Life International, Starhub, Straits Developments, Swarovski Management Pte, Swiss Reinsurance Co, Takeda Pharmaceuticals (Asia Pacific) Pte Ltd, Teleplan, Tellabs, Temasek International, Tenet Insurance Co. Ltd., The Economist Group (A/P) Limited, The Walt Disney Company, Thomsonreuters, Tokio Marine Life Insurance Singapore Ltd, Transamerica Life (Bermuda) Ltd, Transitlink, T-Systems International, Tui Travel, UBS, Underwriters Laboratories (United States), Unilever, Unisys, United Overseas Insurance Ltd., Verizon Business, Xl Re Ltd, Zimmer Pte Ltd, Zurich Insurance Company (S`Pore Branch) and Urich International.
|
a)
|
Similar industry: Technology Hardware and Equipment, Telecommunications Equipment and Services or Software and Services; and
|
b)
|
Comparable in size: revenues under CA$1 billion. Only one publicly traded company had revenues slightly above the equivalent of CA$1 billion. The compensation market comparison is done using the regression analysis which is a method to predict the “size-adjusted” competitive level of compensation to reflect the size of the Corporation in relation to that of the other companies of the reference group. This method mitigates the impact that larger companies may have on the competitive compensation levels for the Corporation.
|
|
●
|
Performance-based:
Executive compensation levels reflect both the results of the Corporation and individual results based on specific quantitative and qualitative objectives established at the beginning of each financial year in keeping with the Corporation’s long-term strategic objectives.
|
|
●
|
Aligned with shareholder interests:
An important portion of incentive compensation for executives is composed of equity awards to ensure that executives are aligned with the principles of sustained long-term shareholder value growth.
|
|
●
|
Market competitive:
Compensation of executives is designed to be externally competitive when compared against executives of comparable peer companies, and in consideration of the Corporation’s results.
|
|
●
|
Individually equitable:
Compensation levels are also designed to reflect individual factors such as scope of responsibility, experience, and performance against individual measures.
|
Name & Position
|
Annual Incentive Target as % of base salary
|
Germain Lamonde, CEO
|
65.0%
|
Pierre Plamondon, Vice-President, Finance and CFO
|
40.0%
|
Jon Bradley, Vice-President, Sales — EMEA
|
70.0%
|
Lee Huat (Joseph) Soo, Vice-President, Sales — Asia-Pacific
|
55.0%
|
Dana Yearian, Vice-President, Sales — Americas
|
89.0%
|
●
|
Short-Term Incentive Plan
|
|
Base Salary
|
X
|
Annual Incentive
Target (%)
|
X
|
Business Performance
Measures (%)
|
X
|
Individual Performance
Measures (%)
|
(1)
|
For sales metric, results will range from nil to 100% of the weight upon attainment of 50% of the annual target up to the annual target and will range from 100% to 150% of the weight from the annual target up to 112.5% of the annual target.
|
(2)
|
For EBITDA metric, results will range from nil to 100% of the weight upon attainment of 0% of the annual target up to the annual target and will range from 100% to 150% of the weight from the annual target up to 125% of the annual target.
|
(3)
|
For gross margin, quality and on-time delivery metrics, results will range from nil to 100% of the weight upon attainment of a minimum threshold of US$85.3M, 50% and 87%, respectively, up to the annual target and from 100% to 150% of the weight from the annual target to the maximum threshold of US$191.9M, 125% and 98%, respectively.
|
●
|
The Sales Incentive Plan
|
|
(1)
|
The amount of bonus for the attainment of the quarterly and annual contribution margin targets for the territory of the EMEA is based on the percentage of achievement from above 50% to 150% of the quarterly and annual contribution margin targets defined at the beginning of the financial year. An additional amount of bonus based on the percentage of attainment of the annual contribution margin target from 70% to 100% is also payable.
|
(2)
|
The amount of bonus for the attainment of the billings targets for the territory of the EMEA is based on the percentage of achievement from above 50% to 150% of the quarterly and annual billings targets defined at the beginning of the financial year. An additional amount of bonus based on the percentage of attainment of one third (1/3) of the quarterly billings targets on a monthly basis from 80% to 100% is also payable. An additional amount of bonus based on the percentage of attainment of the annual billings targets from 80% to 100% is also payable.
|
(3)
|
The amount of bonus for the attainment of the specific product lines bookings targets for the territory of the EMEA is based on the percentage of achievement from above 50% to 200% of the annual bookings targets of the specific product lines defined at the beginning of the financial year.
|
(4)
|
The amount of bonus for the attainment of the selected tier-1 operators’ revenue progression for the territory of the EMEA is defined at the beginning of the financial year and is payable on a discretionary basis.
|
(1)
|
The amount of bonus for the attainment of the quarterly and annual contribution margin targets for the territory of the APAC is based on the percentage of achievement from above 50% to 150% of the quarterly and annual contribution margin targets defined at the beginning of the financial year. An additional amount of bonus based on the percentage of attainment of the annual contribution margin target from 70% to 100% is also payable.
|
(2)
|
The amount of bonus for the attainment of the billings targets for the territory of the APAC is based on the percentage of achievement from above 50% to 150% of the quarterly and annual billings targets defined at the beginning of the financial year. An additional amount of bonus based on the percentage of attainment of one third (1/3) of the quarterly billings targets on a monthly basis from 80% to 100% is also payable. An additional amount of bonus based on the percentage of attainment of the annual billings targets from 80% to 100% is also payable.
|
(3)
|
The amount of bonus for the attainment of the specific product lines bookings targets for the territory of the APAC is based on the percentage of achievement from above 50% to 200% of the annual bookings targets of the specific product lines defined at the beginning of the financial year.
|
(4)
|
The amount of bonus for the attainment of the selected tier-1 territories’ revenue progression for the territory of the APAC is defined at the beginning of the financial year and is payable on a discretionary basis.
|
(1)
|
The amount of bonus for the attainment of the quarterly and annual contribution margin targets for the territory of the Americas is based on the percentage of achievement from above 50% to 150% of the quarterly and annual contribution margin targets defined at the beginning of the financial year. An additional amount of bonus based on the percentage of attainment of the annual contribution margin target from 70% to 100% is also payable.
|
(2)
|
The amount of bonus for the attainment of the billings targets for the territory of the Americas is based on the percentage of achievement from above 50% to 150% of the quarterly and annual billings targets defined at the beginning of the financial year. An additional amount of bonus based on the percentage of attainment of one third (1/3) of the quarterly billings targets on a monthly basis from 80% to 100% is also payable. An additional amount of bonus based on the percentage of attainment of the annual billings targets from 80% to 100% is also payable.
|
(3)
|
The amount of bonus for the attainment of the specific product lines bookings targets for the territory of the Americas is based on the percentage of achievement from above 50% to 200% of the annual bookings targets of the specific product lines defined at the beginning of the financial year.
|
(4)
|
The amount of bonus for the attainment of the selected tier-1 operators’ revenue progression for the territory of the Americas is defined at the beginning of the financial year and is payable on a discretionary basis.
|
●
|
Long-Term Incentive Plan
|
|
Name & Position
|
Grant Levels
(1)
(% of previous year base salary)
|
Pierre Plamondon, Vice-President, Finance and CFO
|
42.5%
|
Jon Bradley, Vice-President, Sales ─ EMEA
|
42.5%
|
Lee Huat (Joseph) Soo, Vice-President, Sales ─ Asia-Pacific
|
32.5%
|
Dana Yearian, Vice-President, Sales ─ Americas
|
42.5%
|
(1)
|
Actual grant value may differ from the grant level guidelines as the stock price may vary between the time of the grant and its approval.
|
Financial
year ended
|
Grant Date
|
RSUs
granted
(#)
|
Fair Value
at the Time
of Grant
(US$/RSU)
|
Vesting schedule
|
|
August 31, 2014
|
October 16, 2013
|
36,950
|
5.28
|
50% on each of the third and fourth anniversary dates of the grant.
|
|
January 15, 2014
|
132,000
|
4.36
|
|||
July 3, 2014
|
29,502
|
4.77
|
|||
October 16, 2013
|
138,233
|
5.28
|
100% on the fifth anniversary date of the grant subject to early vesting of up to 1/3 on the third anniversary date of the grant and up to 50% of the remaining units on the fourth anniversary date of the grant if performance objectives namely related to long-term growth of revenue and profitability, as determined by the Board of Directors of the Corporation, are fully attained.
|
||
August 31, 2013
|
October 16, 2012
|
30,006
|
5.06
|
50% on each of the third and fourth anniversary dates of the grant.
|
|
January 16, 2013
|
145,750
|
5.61
|
|||
October 16, 2012
|
140,404
|
5.06
|
100% on the fifth anniversary date of the grant subject to early vesting of up to 1/3 on the third anniversary date of the grant and up to 50% of the remaining units on the fourth anniversary date of the grant if performance objectives namely related to long-term growth of revenue and profitability, as determined by the Board of Directors of the Corporation, are fully attained.
|
||
August 31, 2012
|
October 18, 2011
|
23,000
|
5.43
|
50% on each of the third and fourth anniversary dates of the grant.
|
|
January 17, 2012
|
8,321
|
6.61
|
|||
January 18, 2012
|
122,000
|
6.47
|
|||
January 23, 2012
|
7,576
|
6.55
|
|||
April 3, 2012
|
2,571
|
7.06
|
|||
October 18, 2011
|
163,651
|
5.43
|
100% on the fifth anniversary date of the grant subject to early vesting of up to 1/3 on the third anniversary date of the grant and up to 50% of the remaining units on the fourth anniversary date of the grant if performance objectives namely related to long-term growth of revenue and profitability, as determined by the Board of Directors of the Corporation are fully attained.
|
||
January 23, 2012
|
6,330
|
6.55
|
100% on the fifth anniversary date of the grant subject to early vesting of up to 1/3 on the third anniversary date of the grant and up to 50% of the remaining units on the fourth anniversary date of the grant if performance objectives namely related to long-term growth of revenue and profitability, as determined by the Board of Directors of the Corporation are fully attained.
|
||
April 3, 2012
|
1,429
|
7.06
|
100% on the fifth anniversary date of the grant subject to early vesting of up to 1/3 on the third anniversary date of the grant and up to 50% of the remaining units on the fourth anniversary date of the grant if performance objectives namely related to long-term growth of revenue and profitability, as determined by the Board of Directors of the Corporation are fully attained.
|
||
August 31, 2011
|
October 19, 2010
|
30,250
|
6.03
|
50% on each of the third and fourth anniversary dates of the grant.
|
|
January 19, 2011
|
119,900
|
9.32
|
|||
April 7, 2011
|
7,297
|
8.28
|
|||
April 18, 2011
|
8,226
|
8.64
|
|||
October 19, 2010
|
56,361
|
6.03
|
100% on the fifth anniversary date of the grant subject to early vesting of up to 100% on the third or fourth anniversary date of the grant when performance objectives related to revenue, as determined by the Board of Directors of the Corporation, are fully attained.
|
Financial
year ended
|
Grant Date
|
RSUs
granted
(#)
|
Fair Value
at the Time
of Grant
(US$/RSU)
|
Vesting schedule
|
October 19, 2010
|
128,348
|
6.03
|
100% on the fifth anniversary date of the grant subject to early vesting of up to 1/3 on the third anniversary date of the grant and up to 50% of the remaining units on the fourth anniversary date of the grant if performance objectives namely related to long-term growth of revenue and profitability, as determined by the Board of Directors of the Corporation, are fully attained.
|
||
August 31, 2010
|
October 20, 2009
|
36,500
|
3.74
|
50% on each of the third and fourth anniversary dates of the grant.
|
|
January 19, 2010
|
130,000
|
5.13
|
|||
April 7, 2010
|
37,900
|
5.68
|
|||
April 7, 2010
|
6,155
|
5.68
|
1/3 on the third, fourth and fifth anniversary dates of the grant.
|
||
July 7, 2010
|
3,759
|
5.32
|
|||
October 20, 2009
|
174,686
|
3.74
|
100% on the fifth anniversary date of the grant subject to early vesting of up to 1/3 on the third anniversary date of the grant and up to 50% of the remaining units on the fourth anniversary date of the grant if performance objectives namely related to long-term growth of revenue and profitability, as determined by the Board of Directors of the Corporation, are fully attained.
|
||
April 7, 2010
|
7,575
|
5.68
|
|||
July 7, 2010
|
18,963
|
5.32
|
●
|
Restricted Share Unit Grants in Last Financial Year
|
|
Name
|
RSUs
granted
(#)
|
Percentage of Total
RSUs Granted to
Employees in
Financial Year (%)
(1)
|
Fair Value
at the Time
of Grant
(US$/RSU)
(2)
|
Grant Date
|
Vesting schedule
(3)
|
|
Pierre Plamondon
|
19,839
|
5.89%
|
5.28
|
October 16, 2013
|
100% on the fifth anniversary date of the grant subject to early vesting up to 1/3 on the third anniversary date of the grant and up to 50% of the remaining units on the fourth anniversary date of the grant if performance objectives namely related to long-term growth of revenue and profitability, as determined by the Board of Directors of the Corporation are fully attained.
(4)
|
|
Jon Bradley
|
14,100
|
4.19%
|
5.28
|
October 16, 2013
|
100% on the fifth anniversary date of the grant subject to early vesting up to 1/3 on the third anniversary date of the grant and up to 50% of the remaining units on the fourth anniversary date of the grant if performance objectives namely related to long-term growth of revenue and profitability, as determined by the Board of Directors of the Corporation are fully attained.
(4)
|
|
Lee Huat (Joseph) Soo
|
12,958
|
3.85%
|
5.28
|
October 16, 2013
|
100% on the fifth anniversary date of the grant subject to early vesting up to 1/3 on the third anniversary date of the grant and up to 50% of the remaining units on the fourth anniversary date of the grant if performance objectives namely related to long-term growth of revenue and profitability, as determined by the Board of Directors of the Corporation are fully attained.
(4)
|
|
Dana Yearian
|
17,676
|
5.25%
|
5.28
|
October 16, 2013
|
100% on the fifth anniversary date of the grant subject to early vesting up to 1/3 on the third anniversary date of the grant and up to 50% of the remaining units on the fourth anniversary date of the grant if performance objectives namely related to long-term growth of revenue and profitability, as determined by the Board of Directors of the Corporation are fully attained.
(4)
|
(1)
|
Such percentage does not include any cancelled RSUs.
|
(2)
|
The fair value at the time of grant of a RSU is equal to the market value of Subordinate Voting Shares at the time RSUs are granted. The grant date market value is equal to the highest of the closing prices of the Subordinate Voting Shares on the Toronto Stock Exchange and the NASDAQ National Market on the last trading day preceding the grant date, using the noon buying rate of the Bank of Canada on the grant date to convert either the NASDAQ National Market closing price to Canadian dollars or the Toronto Stock Exchange closing price to United States dollars as required.
|
(3)
|
All RSUs first vesting cannot be earlier than the third anniversary date of their grant.
|
(
4
)
|
Those RSUs granted in the financial year ended August 31, 2014 vest on the fifth anniversary date of the grant but are subject to early vesting on the third and fourth anniversary date of the grant on the attainment of performance objectives, as determined by the Board of Directors of the Corporation. Accordingly, subject to the attainment of performance objectives, the first early vesting is up to 1/3 of the units on the third anniversary date of the grant and the second early vesting is up to 50% of the remaining units on the fourth anniversary date of the grant. The early vesting shall be subject to the attainment of performance objectives. Such performance objectives are based on the attainment of a sales growth metric combined with profitability metric. The sales growth metric is determined by the Compound Annual Growth Rate of sales of the Corporation for the period described below (SALES CAGR). The profitability metric is determined as the Cumulative Corporation’s IFRS net earnings before interest, income taxes, depreciation of property, plant and equipment, amortization of intangible assets, foreign exchange gain or loss, change in fair value of cash contingent consideration, and extraordinary gain or loss over the Cumulative Sales for the same period (LTIP EBITDA). Accordingly, the first early vesting performance objectives will be attained, calculated on a pro-rated basis as follows: i) 100% for a SALES CAGR of 20% or more and 0% for a SALES CAGR of 5% or less for the three-year period ending on August 31, 2016; cumulated with ii) 100% for a LTIP EBITDA of 15% and 0% for a LTIP EBITDA of 7.5% or less for the three-year period ending on August 31, 2016. The second early vesting performance objectives will be attained on the same premises as described above but for the four-year period ending on August 31, 2017.
|
Number of
RSUs (#)
|
% of Issued and
Outstanding RSUs
|
Weighted Average Fair Value at
the Time of Grant ($US/RSU)
|
||||
President and CEO (one (1) individual)
|
140,150
|
11.44%
|
5.11
|
|||
Board of Directors (five (5) individuals)
|
–
|
–
|
–
|
|||
Management and Corporate Officers (ten (10) individuals)
|
551,953
|
45.05%
|
5.32
|
●
|
Option Grants in Last Financial Year
|
|
Number of
Options (#)
|
% of Issued and
Outstanding Options
|
Weighted Average Exercise Price
($US/Security)
|
||||
President and CEO (one (1) individual)
|
29,160
|
33.34%
|
4.61
|
|||
Board of Directors (five (5) individuals)
|
‒
|
‒
|
‒
|
|||
Management and Corporate Officers (two (2) individuals)
|
14,494
|
16.57%
|
4.98
|
●
|
Deferred Share Unit Plan
|
|
●
|
Deferred Share Unit Grants in Last Financial Year
|
|
DSUs
granted (#)
|
Weighted Average Fair Value
at the Time of Grant (US$/DSU)
|
Total of the Fair Value
at the Time of Grant (US$)
|
Vesting
|
35,803
|
4.59
|
164,336
|
At the time director ceases to be a member of the Board of Directors of the Corporation
|
Number of
DSUs (#)
|
% of Issued and
Outstanding DSUs
|
Total of the Fair Value at
the Time of Grant (US$)
|
Weighted Average Fair Value
at the Time of Grant (US$/DSU)
|
|
Board of Directors (five (5) individuals)
|
117,701
|
100%
|
575,558
|
4.89
|
●
|
Number of Subordinate Voting Shares Reserved for Future Issuance
|
|
(1)
|
The vesting schedules are provided in the table under the heading “Long-Term Incentive Plan”.
|
Compensation Elements
|
2014
|
2013
|
2012
|
Three-Year Total
|
||||
Cash
|
||||||||
Base Salary
|
CA$557,767
|
CA$498,663
|
CA$441,000
|
CA$1,497,430
|
||||
Short-term incentive
|
CA$214,300
|
CA$185,866
|
CA$143,784
|
CA543,950
|
||||
Equity
|
||||||||
Long-term incentive
|
–
|
–
|
CA$294,001
|
(1)
|
CA$294,001
|
(1)
|
||
Total Direct Compensation
|
CA$772,067
|
CA$684,529
|
CA$878,785
|
CA$2,335,381
|
||||
Pension Value
|
–
|
–
|
–
|
–
|
||||
All Other Compensation
|
–
|
–
|
–
|
–
|
||||
Total Compensation
|
CA$772,067
|
CA$684,529
|
CA$878,785
|
CA$2,335,381
|
||||
Annual Average
|
–
|
–
|
–
|
CA$778,460
|
||||
Total Market Capitalization Growth (CA$ millions)
|
(2.2)
|
(2)
|
2.1
|
(2)
|
(105.6)
|
(2)
|
(105.7)
|
(2)
|
Total Cost as a % of Market Capitalization Growth
|
(35.6)%
|
32.1%
|
(0.8)%
|
(2.2)%
|
(1)
|
Indicates the dollar amount based on the grant date fair value of the RSUs awarded under the LTIP for the financial year. The grant date fair value is equal to the highest of the closing prices of the Subordinate Voting Shares on the Toronto Stock Exchange and the NASDAQ National Market on the last trading day preceding the grant date, using the noon buying rate of the Bank of Canada on the grant date to convert either the NASDAQ National Market closing price to Canadian dollars or the Toronto Stock Exchange closing price to United States dollars. Grants of RSUs to NEOs are detailed under section “Compensation Discussion and Analysis – Long-Term Incentive Plan”.
|
(2)
|
Includes the redemption of 438,894, 663,256 and 214,470 Subordinate Voting Shares respectively in financial years 2012, 2013 and 2014 under the normal course issuer bid of the Corporation during these years.
|
Name and
Principal Position
|
Financial
Year
|
Salary
(1) (2)
($)
|
Share-Based
Awards
(2)
(3)
($)
|
Option-
based
Awards
($)
|
Non-equity incentive
plan compensation ($)
|
Pension
value
($)
|
All other
compensation
($)
(2) (5)
|
Total
Compensation
($)
|
||||||
Annual
Incentive
plans
(2) (4)
|
Long-term
Incentive
plans
|
|||||||||||||
Germain Lamonde,
President and CEO
|
2014
|
517,313
557,767
|
(US)
(CA)
|
─
─
|
(US)
(CA)
|
–
|
198,757
214,300
|
(US)
(CA)
|
–
|
–
|
–
|
716,070
772,067
|
(US)
(CA)
|
|
2013
|
493,384
498,663
|
(US)
(CA)
|
─
─
|
(US)
(CA)
|
–
|
183,899
185,866
|
(US)
(CA)
|
–
|
–
|
–
|
677,283
684,529
|
(US)
(CA)
|
||
2012
|
436,893
441,000
|
(US)
(CA)
|
291,263
294,001
|
(US)
(CA)
|
–
|
142,446
143,784
|
(US)
(CA)
|
–
|
–
|
–
|
870,602
878,785
|
(US)
(CA)
|
||
Pierre Plamondon,
Vice-President,
Finance and CFO
|
2014
|
252,938
272,718
|
(US)
(CA)
|
100,465
108,321
|
(US)
(CA)
|
–
|
69,448
74,879
|
(US)
(CA)
|
–
|
–
|
11,667
12,579
|
(US)
(CA)
|
434,518
468,497
|
(US)
(CA)
|
2013
|
252,673
255,377
|
(US)
(CA)
|
97,460
98,502
|
(US)
(CA)
|
–
|
58,709
59,337
|
(US)
(CA)
|
–
|
–
|
9,473
9,575
|
(US)
(CA)
|
418,315
422,791
|
(US)
(CA)
|
|
2012
|
245,149
247,453
|
(US)
(CA)
|
94,743
95,634
|
(US)
(CA)
|
–
|
63,948
64,549
|
(US)
(CA)
|
–
|
–
|
9,431
9,519
|
(US)
(CA)
|
413,271
417,155
|
(US)
(CA)
|
|
Jon Bradley,
Vice-President,
Sales — EMEA
|
2014
|
200,594
216,280
121,459
|
(US)
(CA)
(£)
|
71,402
76,986
45,740
|
(US)
(CA)
(£)
|
–
|
116,563
125,678
70,579
|
(US)
(CA)
(£)
|
–
|
–
|
–
|
388,559
418,944
237,778
|
(US)
(CA)
(£)
|
|
2013
|
178,871
180,785
114,585
|
(US)
(CA)
(£)
|
69,560
70,304
44,560
|
(US)
(CA)
(£)
|
–
|
81,369
82,240
52,125
|
(US)
(CA)
(£)
|
–
|
–
|
–
|
329,800
333,329
211,270
|
(US)
(CA)
(£)
|
||
2012
|
165,355
166,909
105,083
|
(US)
(CA)
(£)
|
61,549
62,128
39,114
|
(US)
(CA)
(£)
|
–
|
87,328
88,148
55,497
|
(US)
(CA)
(£)
|
–
|
–
|
–
|
314,232
317,185
199,694
|
(US)
(CA)
(£)
|
Name and
Principal Position
|
Financial
Year
|
Salary
(1) (2)
($)
|
Share-Based
Awards
(2)
(3)
($)
|
Option-
based
Awards
($)
|
Non-equity incentive
plan compensation ($)
|
Pension
value
($)
|
All other
compensation
($)
(2) (5)
|
Total
Compensation
($)
|
||||||
Annual
Incentive
plans
(2) (4)
|
Long-term
Incentive
plans
|
|||||||||||||
Lee Huat (Joseph) Soo,
Vice-President,
Sales — Asia-Pacific
|
2014
|
224,908
242,495
282,529
|
(US)
(CA)
(SGD)
|
65,619
70,751
82,431
|
(US)
(CA)
(SGD)
|
–
|
81,325
87,684
102,160
|
(US)
(CA)
(SGD)
|
–
|
–
|
–
|
371,852
400,930
467,120
|
(US)
(CA)
(SGD)
|
|
2013
|
215,672
217,980
267,800
|
(US)
(CA)
(SGD)
|
62,875
63,548
78,072
|
(US)
(CA)
(SGD)
|
–
|
76,926
77,749
95,520
|
(US)
(CA)
(SGD)
|
–
|
–
|
–
|
355,473
359,277
441,392
|
(US)
(CA)
(SGD)
|
||
2012
|
153,894
155,340
195,000
|
(US) (6)
(CA)
(SGD)
|
55,232
55,751
69,984
|
(US)
(CA)
(SGD)
|
–
|
52,772
53,268
66,867
|
(US)
(CA)
(SGD)
|
–
|
–
|
–
|
261,898
264,359
331,851
|
(US)
(CA)
(SGD)
|
||
Dana Yearian,
Vice-President,
Sales — Americas
|
2014
|
224,400
241,948
|
(US)
(CA)
|
93,329
100,627
|
(US)
(CA)
|
–
|
140,579
151,573
|
(US)
(CA)
|
–
|
–
|
7,049
7,601
|
(US)
(CA)
|
465,357
501,749
|
(US)
(CA)
|
2013
|
219,596
221,946
|
(US)
(CA)
|
91,050
92,024
|
(US)
(CA)
|
–
|
134,529
135,968
|
(US)
(CA)
|
–
|
–
|
7,009
7,084
|
(US)
(CA)
|
452,184
457,022
|
(US)
(CA)
|
|
2012
|
214,240
216,254
|
(US)
(CA)
|
83,198
83,980
|
(US)
(CA)
|
–
|
149,851
151,260
|
(US)
(CA)
|
–
|
–
|
7,293
7,361
|
(US)
(CA)
|
454,582
458,855
|
(US)
(CA)
|
(1)
|
Base salary earned in the financial year, regardless when paid.
|
(2)
|
The compensation information for Canadian residents has been converted from Canadian dollars to US dollars based upon an average foreign exchange rate of CA$1.0782 = US$1.00 for the financial year ended August 31, 2014, CA$1.0107 = US$1.00 for the financial year ended August 31, 2013 and CA$1.0094 = US$1.00 for the financial year ended August 31, 2012. The compensation information for UK resident has been converted from British Pounds to US dollars based upon an average foreign exchange rate of £0.6055 = US$1.00 for the financial year ended August 31, 2014, £0.6406 = US$1.00 for the financial year ended August 31, 2013 and £0.6355 = US$1.00 for the financial year ended August 31, 2012 and the conversion from US dollars to Canadian dollars is made as described above. The compensation information for Singapore resident has been converted from Singapore dollars to US dollars based upon an average foreign exchange rate of SGD1.2562 = US$1.00 for the financial year ended August 31, 2014, SGD1.2417 = US$1.00 for the financial year ended August 31, 2013 and SGD1.2671 = US$1.00 for the financial year ended August 31, 2012 and the conversion from US dollars to Canadian dollars is made as described above.
|
(3)
|
Indicates the dollar amount based on the grant date fair value of the RSUs awarded under the LTIP for the financial year. The grant date fair value is equal to the highest of the closing prices of the Subordinate Voting Shares on the Toronto Stock Exchange and the NASDAQ National Market on the last trading day preceding the grant date, using the noon buying rate of the Bank of Canada on the grant date to convert either the NASDAQ National Market closing price to Canadian dollars or the Toronto Stock Exchange closing price to United States dollars. Grants of RSUs to NEOs are detailed under section “Compensation Discussion and Analysis – Long-Term Incentive Plan”.
|
(4)
|
Indicates the total bonus earned during the financial year whether paid during the financial year or payable on a later date:
|
Name
|
Paid during the
financial year ended
August 31, 2014
(i)
($)
|
Paid in the first quarter
of the financial year
ending on August 31, 2015
(i)
($)
|
Total bonus earned during
the financial year
ended August 31, 2014
(i)
($)
|
||||
Germain Lamonde
|
149,643
161,345
|
(US)
(CA)
|
49,114
52,955
|
(US)
(CA)
|
198,757
214,300
|
(US)
(CA)
|
|
Pierre Plamondon
|
45,026
48,547
|
(US)
(CA)
|
24,422
26,332
|
(US)
(CA)
|
69,448
74,879
|
(US)
(CA)
|
|
Jon Bradley
|
67,941
73,254
41,138
|
(US)
(CA)
(£)
|
48,622
52,424
29,441
|
(US)
(CA)
(£)
|
116,563
125,678
70,579
|
(US)
(CA)
(£)
|
|
Lee Huat (Joseph) Soo
|
38,987
42,035
48,975
|
(US)
(CA)
(SGD)
|
42,338
45,649
53,185
|
(US)
(CA)
(SGD)
|
81,325
87,684
102,160
|
(US)
(CA)
(SGD)
|
|
Dana Yearian
|
67,746
73,044
|
(US)
(CA)
|
72,833
78,529
|
(US)
(CA)
|
140,579
151,573
|
(US)
(CA)
|
(i)
|
Refer to note 2 above.
|
(5)
|
Indicates the amount contributed by the Corporation during the financial year to the DPSP as detailed under section “Compensation Discussion and Analysis – Deferred Profit-Sharing Plan”, the 401K plan as detailed under section “Compensation Discussion and Analysis – 401K Plan”, as applicable, for the benefit of the NEOs. Mr. Lamonde is not eligible to participate in the DPSP and Mr. Bradley and Mr. Soo did not participate.
|
(6)
|
This amount represents the salary paid to Mr. Lee Huat (Joseph) Soo from January 17, 2012 until August 31, 2012 which is based on an annual salary amounted to US$205,193 (CA$207,122) (SGD260,000) for the financial year ended August 31, 2012.
|
Name
|
Outstanding Option-based Awards (Options)
|
Outstanding Share-based Awards (RSUs)
|
||||||||
Number of
securities
underlying
unexercised
options
(#)
|
Option
Exercise
Price
(1)
|
Option
expiration
date
|
Value
(2)
of
unexercised
“in-the-money”
options
(3)
|
Number of
shares
or units of
shares
that have not
vested (#)
|
Market or
payout value of
share-based
awards that
have not vested
(US$)
(4)
|
Market or
payout value of
vested share-
based awards
not paid out or
distributed
(US$)
|
||||
Germain Lamonde
|
17,942
|
4.51
5.60
|
(US)
(CA)
|
Feb. 1, 2015
|
–
–
|
140,150
|
616,660
|
–
|
||
11,218
|
4.76
5.50
|
(US)
(CA)
|
Dec. 6, 2015
|
–
–
|
||||||
Pierre Plamondon
|
5,383
|
5.13
6.28
|
(US)
(CA)
|
Oct. 26, 2014
|
–
–
|
89,385
|
393,294
|
–
|
||
3,653
|
4.76
5.50
|
(US)
(CA)
|
Dec. 6, 2015
|
–
–
|
||||||
Jon Bradley
|
–
|
–
|
–
|
–
|
63,285
|
278,454
|
–
|
|||
Lee Huat (Joseph) Soo
|
–
|
–
|
–
|
–
|
34,014
|
149,662
|
–
|
|||
Dana Yearian
|
–
|
–
|
–
|
–
|
81,085
|
356,774
|
–
|
(1)
|
These options were granted in Canadian dollars. The exercise price was calculated by using the highest of the closing prices of the Subordinate Voting Shares on the Toronto Stock Exchange and on the NASDAQ National Market on the business day preceding the grant date using the noon buying rate of the Bank of Canada to convert either the NASDAQ National Market closing price to Canadian dollars or the Toronto Stock Exchange closing price to United States dollars on the grant date.
|
(2)
|
The unexercised options have not been and may never be exercised and actual gains if any, on exercise will depend on the value of the Subordinate Voting Shares on the date of exercise. There can be no assurance that these options will be exercised or any gain realized.
|
(3)
|
Indicates an aggregate value of “in-the-money” unexercised options held at the financial year ended August 31, 2014. “in-the-money” options are options for which the market value of the underlying securities is higher than the exercise price. The value of unexercised
“in-the-money” options at financial year end is the difference between its exercise or base price and the market value of the underlying Subordinate Voting Share at August 31, 2014, which was US$4.40 (CA$4.78). The market value of the Subordinate Voting Shares was calculated by using the highest of the closing prices of the Subordinate Voting Shares on the Toronto Stock Exchange and on the NASDAQ National Market on August 29, 2014 using the noon buying rate of the Bank of Canada to convert either the NASDAQ National Market closing price to Canadian dollars or the Toronto Stock Exchange closing price to United States dollars as required. For a Canadian resident, the value of unexercised “in-the-money” options is calculated using the option exercise price and the market value of the subordinate voting shares on the Toronto Stock Exchange in Canadian dollars.
|
(4)
|
The value of unvested RSUs at the financial year-end is the market value of the Subordinate Voting Shares on August 31, 2014, which was US$4.40 (CA$4.78). The market value of the Subordinate Voting Shares was calculated by using the highest of the closing prices of the Subordinate Voting Shares on the Toronto Stock Exchange and on the NASDAQ National Market on August 29, 2014 using the noon buying rate of the Bank of Canada to convert either the NASDAQ National Market closing price to Canadian dollars or the Toronto Stock Exchange closing price to United States dollars as required. The actual gains on vesting will depend on the value of the Subordinate Voting Shares on the date of vesting. There can be no assurance that these values will be realized.
|
Name
|
Share-based awards – value
vested during the year (US$)
(1)
|
Non-equity incentive plan compensation –
Value earned during the year (US$)
(2)
|
||
Germain Lamonde
|
327,629
|
198,757
|
||
Pierre Plamondon
|
224,612
|
69,448
|
||
Jon Bradley
|
211,481
|
116,563
|
||
Lee Huat (Joseph) Soo
|
‒
|
81,325
|
||
Dana Yearian
|
245,784
|
140,579
|
(1)
|
The aggregate dollar value realized is equivalent to the market value of the Subordinate Voting Shares underlying the RSUs at vesting. This value, as the case may be, has been converted from Canadian dollars to US dollars based upon the noon buying rate of the Bank of Canada on the day of vesting.
|
(2)
|
Includes total non-equity incentive plan compensation earned by each NEO in respect to the financial year ended on August 31, 2014 (as indicated under the “Summary Compensation Table”).
|
Named Executive Officer
|
Termination Payment Event
|
|||||
Without Cause ($)
(1) (2)
|
Change of Control ($)
(2) (3) (4)
|
Voluntary ($)
|
||||
Germain Lamonde
|
2,019,084
2,157,183
|
(US) (5)
(CA)
|
2,019,084
2,157,183
|
(US)
(CA)
|
616,660
669,917
|
(US) (6)
(CA)
|
Pierre Plamondon
|
464,402
502,445
|
(US)
(CA)
|
860,765
925,343
|
(US)
(CA)
|
–
|
|
Jon Bradley
|
345,112
373,319
208,965
|
(US)
(CA)
(£)
|
601,702
644,621
367,663
|
(US)
(CA)
(£)
|
–
|
Named Executive Officer
|
Termination Payment Event
|
|||||
Without Cause ($)
(1) (2)
|
Change of Control ($)
(2) (3) (4)
|
Voluntary ($)
|
||||
Lee Huat (Joseph) Soo
|
133,859
144,807
141,055
|
(US)
(CA)
(SGD)
|
250,278
269,340
314,010
|
(US)
(CA)
(SGD)
|
–
|
|
Dana Yearian
|
417,270
451,475
|
(US)
(CA)
|
895,168
954,460
|
(US)
(CA)
|
–
|
(1)
|
The aggregate amount disclosed includes an evaluation of the amount that the NEO would have been entitled to should a termination of employment without cause have occurred on August 31, 2014 and includes, as the case may be for each NEO, the base salary that would have been received and total value of RSUs and options that would have vested (with the exception of Mr. Lamonde’s evaluation which is described in note 6 below and includes: the base salary, STIP compensation, and total value of RSUs and options that would have vested). The amount for base salary compensation is calculated according to those amounts provided under the section entitled “Summary Compensation Table” included in this Annual Report. The amount for the total value attached to the vesting of RSUs and options determined pursuant to the LTIP as described in the section entitled “Long-Term Incentive Compensation – Long-Term Incentive Plan”
for termination without cause.
|
(2)
|
The aggregate amount for Canadian residents has been converted from Canadian dollars to US dollars based upon an average foreign exchange rate of CA$1.0782 = US$1.00 for the financial year ended August 31, 2014. The aggregate amount for UK resident has been converted from British Pounds to US dollars based upon an average foreign exchange rate of £0.6055 = US$1.00 for the financial year ended August 31, 2014. The aggregate amount for Singapore resident has been converted from Singapore dollars to US dollars based upon an average foreign exchange rate of SGD1.2562 = US$1.00 for the financial year ended August 31, 2014.
|
(3)
|
“Change of Control” is defined as a merger or an acquisition by a third party of substantially all of the Corporation’s assets or of the majority of its share capital.
|
(4)
|
The aggregate amount disclosed includes, as the case may be for each NEO, an evaluation of the amount that the NEO would have been entitled to should a termination of employment for Change of Control have occurred on August 31, 2014 and includes, as the case may be, namely, the base salary, STIP or SIP compensation and total value of RSUs and options that would have vested. The amount for base salary and STIP or SIP compensation are calculated according to those amounts provided under the section entitled “Summary Compensation Table” included in this Annual Report, the total value attached to the vesting of RSUs and options is calculated according to those amounts provided in the columns named “Value of unexercised “in-the-money” options” and “Market or payout value
of share-based awards that have not vested” of the table included under the heading entitled “Outstanding share-based awards and option-based awards”.
|
(5)
|
The aggregate amount disclosed includes an evaluation of the amount that Mr. Lamonde would have been entitled to should a termination of employment without cause have occurred on August 31, 2014 and includes: the base salary, STIP compensation, and total value of RSUs and options that would have vested. The amount for base salary and STIP compensation are calculated according to those amounts provided under the section entitled “Summary Compensation Table” included in this Annual Report; the total value attached to the vesting of RSUs and options are calculated according to those amounts provided in the columns named “Value of unexercised “in-the-money” options” and “Market or payout value of share-based awards that have not vested” of the table included under the heading entitled – “Outstanding share-based awards and option-based awards”.
|
(6
)
|
The aggregate amount disclosed includes an evaluation of the amount that Mr. Lamonde would have been entitled to should a voluntary termination of employment have occurred on August 31, 2014 and includes: the total value of RSUs and options that would have vested. The amount for the total value attached to the vesting of RSUs and options are calculated according to those amounts provided in the columns named “Value of unexercised “in-the-money” options” and “Market or payout value of share-based awards that have not vested” of the table included under the heading entitled “Outstanding share-based awards and option-based awards”.
|
Annual Retainer for Directors
(1)
|
CA$57,000
|
(2)
|
US$52,866
|
(3)
|
Annual Retainer for Lead Director
|
CA$8,000
|
US$7,420
|
(3)
|
|
Annual Retainer for Audit Committee Chairman
|
CA$8,000
|
US$7,420
|
(3)
|
|
Annual Retainer for Audit Committee Members
|
CA$4,000
|
US$3,710
|
(3)
|
Annual Retainer for Human Resources Committee Chairman
|
CA$6,000
|
US$5,565
|
(3)
|
|
Annual Retainer for Human Resources Committee Members
|
CA$3,000
|
US$2,782
|
(3)
|
(1)
|
All the Directors elected to receive 50% of their Annual Retainer for Directors in form of DSUs except Mr. Randy E. Tornes who elected to receive 100% of his Annual Retainer in form of DSUs.
|
(2)
|
The Annual Retainer for Mr. Pierre-Paul Allard and Mr. Randy E. Tornes is US$57,000 (CA$61,457).
|
(3)
|
The compensation information has been converted from Canadian dollars to US dollars based upon an average foreign exchange rate of CA$1.0782 = US$1.00 for the financial year ended August 31, 2014.
|
Name
|
Fees earned
(1)
($)
|
Share-based
Awards
($)
|
Option-
based
awards
($)
|
Non-equity
incentive plan
compensation
($)
|
Pension
Value
($)
|
All other
Compensation
($)
|
Total
($)
|
||
Pierre-Paul Allard
|
63,492
68,457
|
(US)
(CA)
|
–
|
–
|
–
|
–
|
–
|
63,492
68,457
|
(US)
(CA)
|
Darryl Edwards
|
66,778
72,000
|
(US)
(CA)
|
–
|
–
|
–
|
–
|
–
|
66,778
72,000
|
(US)
(CA)
|
Guy Marier
|
63,470
68,433
|
(US)
(CA)
|
–
|
–
|
–
|
–
|
–
|
63,470
68,433
|
(US)
(CA)
|
Claude Séguin
|
61,739
66,567
|
(US)
(CA)
|
–
|
–
|
–
|
–
|
–
|
61,739
66,567
|
(US)
(CA)
|
Randy E. Tornes
|
63,492
68,457
|
(US)
(CA)
|
–
|
–
|
–
|
–
|
–
|
63,492
68,457
|
(US)
(CA)
|
(1)
|
The compensation information has been converted from Canadian dollars to US dollars based upon an average foreign exchange rate of CA$1.0782 = US$1.00 for the financial year ended August 31, 2014 except for compensation amounts paid to Mr. Pierre-Paul Allard and Mr. Randy E. Tornes which were paid in US dollars for the portion of their annual retainer for Directors. The fees are always payable in cash, but executives are provided the opportunity to elect to exchange all or a portion of their Annual Retainer for Directors into DSUs. The following table identifies the portion of the fees earned by the directors that were paid in DSUs and the portion that were paid in cash.
|
Name
|
Fees earned
|
||||||
DSUs ($)
(i)
|
Cash ($)
|
Total ($)
|
|||||
Pierre-Paul Allard
(ii)
|
28,500
30,728
|
(US)
(CA)
|
34,992
37,729
|
(US)
(CA)
|
63,492
68,457
|
(US)
(CA)
|
|
Darryl Edwards
(ii)
|
26,433
28,500
|
(US)
(CA)
|
40,345
43,500
|
(US)
(CA)
|
66,778
72,000
|
(US)
(CA)
|
|
Guy Marier
(ii)
|
26,433
28,500
|
(US)
(CA)
|
37,037
39,933
|
(US)
(CA)
|
63,470
68,433
|
(US)
(CA)
|
|
Claude Séguin
(ii)
|
26,433
28,500
|
(US)
(CA)
|
35,306
38,067
|
(US)
(CA)
|
61,739
66,567
|
(US)
(CA)
|
|
Randy E. Tornes
(iii)
|
57,000
61,457
|
(US)
(CA)
|
6,492
7,000
|
(US)
(CA)
|
63,492
68,457
|
(US)
(CA)
|
(i)
|
The estimated value at the time of grant of a DSU is determined based on the highest of the closing prices of the Subordinate Voting Shares on the Toronto Stock Exchange and the NASDAQ National Market on the last trading day preceding the grant date, using the noon buying rate of the Bank of Canada on the grant date to convert either the NASDAQ National Market closing price to Canadian dollars or the Toronto Stock Exchange closing price to United States dollars, as required. The value at vesting of a DSU is equivalent to the market value of a Subordinate Voting Share when a DSU is converted to such Subordinate Voting Share.
|
(ii)
|
Elected to receive 50% of his Annual Retainer for Directors in form of DSUs.
|
(iii)
|
Elected to receive 100% of his Annual Retainer for Directors in form of DSUs.
|
Name
|
Outstanding Share-based Awards (DSUs)
|
||||
Number of shares or units of
shares that have not vested
(#)
|
Market or payout value of
share-based awards that
have not vested
(US$)
(1)
|
Market or payout value of
vested share-based awards
not paid out or distributed
(US$)
|
|||
Pierre-Paul Allard
|
31,882
|
140,281
|
–
|
||
Darryl Edwards
|
14,960
|
65,824
|
–
|
||
Guy Marier
|
46,902
|
206,369
|
–
|
||
Claude Séguin
|
8,498
|
37,391
|
–
|
||
Randy E. Tornes
|
15,459
|
68,020
|
–
|
(1)
|
The value of unvested DSUs at the financial year-end is the market value of the Subordinate Voting Shares on August 31, 2014, which was US$4.40 (CA$4.78). The market value of the Subordinate Voting Shares was calculated by using the highest of the closing prices of the Subordinate Voting Shares on the Toronto Stock Exchange and on the NASDAQ National Market on August 29, 2014 using the noon buying rate of the Bank of Canada to convert either the NASDAQ National Market closing price to Canadian dollars or the Toronto Stock Exchange closing price to United States dollars as required. The actual gains on vesting will depend on the value of the Subordinate Voting Shares on the date of vesting. There can be no assurance that these values will be realized.
|
Name
|
Number of DSUs converted
|
Aggregate Value Realized (US$)
(1)
|
Pierre Marcouiller
(2)
|
38,010
|
210,944
|
(1)
|
The aggregate value realized is equivalent to the market value of the securities underlying the DSUs at conversion.
|
(2)
|
Mr. Marcouiller ceased to be a member of the Board of Directors as of January 10, 2013.
|
Plan category
|
Number of securities to be
issued upon exercise of
outstanding options,
RSUs and DSUs (#)
(a)
|
Weighted-average exercise
price of outstanding options,
RSUs and DSUs (US$)
(b)
|
Number of securities remaining
available for future issuance under
equity compensation plans (excluding
securities reflected in column (a)) (#)
(c)
|
||
LTIP – RSUs
|
1,225,135
|
n/a
|
(1)
|
1,704,822
|
|
LTIP – Options
|
87,454
|
4.62
|
|||
Deferred Share Unit Plan – DSUs
|
117,701
|
n/a
|
(1)
|
(1)
|
The value of RSUs and DSUs will be equal to the market value of the Subordinate Voting Shares of the Corporation on the date of vesting.
|
August 31,
|
||||||
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
|
EXFO Subordinate Voting Shares (CA$)
|
$100
|
$183
|
$202
|
$148
|
$149
|
$148
|
S&P/TSX Composite Index (CA$)
|
$100
|
$111
|
$119
|
$112
|
$118
|
$146
|
NEOs’ total compensation (in millions of CA$)
|
$2.3
|
$2.5
|
$2.7
|
$2.5
|
$2.3
|
$2.6
|
●
|
Our share performance improved from the financial year that began on September 1, 2009 to the financial year ended August 31, 2011 and decreased from the financial year that began on September 1, 2011 to the financial year ended August 31, 2012. This share performance is aligned with the respective increase and decrease in total compensation received by the NEOs during these periods. This decrease in NEOs compensation mainly reflects the decision of the Human Resources Committee to no longer grant equity-based compensation to the CEO and progressively adjust base salaries of the CEO over a four (4) year-period and also reflects to some extent financial results below expectations for financial 2013.
|
●
|
Despite the relative stability of our share price as at August 31, 2013 compared to the previous financial year, total compensation of the NEOs decreased. This decrease in NEOs compensation reflects financial results below expectations for financial 2013 and consequently is aligned with shareholders’ interests.
|
●
|
Similarly, our share price remained relatively flat as at August 31, 2014 compared to the previous financial year, but this year total compensation of the NEOs increased. This can be explained mainly by the progressive adjustment of the base salary of the CEO, as he no longer receives equity-based compensation, and required adjustments to align executive compensation with the target compensation positioning offered within a reference market of comparable companies that are similar in size to us. This is necessary to maintain a competitive position within the market place and retain key executives.
|
(1)
|
From September 1, 2013 until November 1, 2014, Mr. Lamonde attended six (6) board meetings in person and one (1) by telephone.
|
(2)
|
Includes both Subordinate Voting Shares and Multiple Voting Shares.
|
(3)
|
The value of unvested RSUs at the financial year-end is the market value of the Subordinate Voting Shares on August 31, 2014, which was US$4.40 (CA$4.78). The market value of the Subordinate Voting Shares and Multiple Voting Shares was calculated by using the highest of the closing prices of the Subordinate Voting Shares on the Toronto Stock Exchange and on the NASDAQ National Market on August 29, 2014 using the noon buying rate of the Bank of Canada to convert either the NASDAQ National Market closing price to Canadian dollars or the Toronto Stock Exchange closing price to United States dollars as required. The actual gains on vesting of RSUs will depend on the value of the Subordinate Voting Shares on the date of vesting. There can be no assurance that these values will be realized.
|
(4)
|
Mr. Lamonde exercises control over 4,000,000 of Subordinate Voting Shares through G. Lamonde Investissements Financiers inc., a company controlled by Mr. Lamonde.
|
(5)
|
Mr. Lamonde exercises control over this number of Multiple Voting Shares through G. Lamonde Investissements Financiers inc., a company controlled by Mr. Lamonde and through Fiducie Germain Lamonde, a family trust for the benefit of Mr. Lamonde’s family.
|
(6)
|
These options were granted in Canadian dollars. The exercise price was calculated by using the highest of the closing prices of the Subordinate Voting Shares on the Toronto Stock Exchange and on the NASDAQ National Market on the business day preceding the grant date using the noon buying rate of the Bank of Canada to convert either the NASDAQ National Market closing price to Canadian dollars or the Toronto Stock Exchange closing price to United States dollars on the grant date.
|
(7)
|
Indicates an aggregate value of “in-the-money” unexercised options held at the financial year ended August 31, 2014. “In-the-money” options are options for which the market value of the underlying securities is higher than the exercise price. The value of unexercised
“in-the-money” options at financial year end is the difference between its exercise or base price and the market value of the underlying Subordinate Voting Share as at August 31, 2014, which was US$4.40 (CA$4.78). The market value of the Subordinate Voting Shares was calculated by using the highest of the closing prices of the Subordinate Voting Shares on the Toronto Stock Exchange and on the NASDAQ National Market on August 29, 2014 using the noon buying rate of the Bank of Canada to convert either the NASDAQ National Market closing price to Canadian dollars or the Toronto Stock Exchange closing price to United States dollars as required. For a Canadian resident, the value of options unexercised is calculated using the exercise price and the market value of the subordinate voting shares on the Toronto Stock Exchange in Canadian dollars.
|
Securities Held
|
||||||||||
As at
|
Subordinate
Voting Shares (#) |
DSUs (#)
|
Total Shares and DSUs (#)
|
Total Market Value
(3)
of Shares (4) and DSUs (US$) |
||||||
August 31, 2014
|
8,000
|
31,882
|
39,882
|
175,481
|
Options Held as at August 31, 2014
|
||||||||||
Date Granted
|
Number(#)
|
Exercise Price (US$)
(6)
|
Total Unexercised (#)
|
Value of Options
Unexercised (US$)
|
||||||
‒
|
‒
|
‒
|
‒
|
‒
|
(1)
|
Avaya Inc. is a global provider of business collaboration and communications solutions.
|
(2)
|
From September 1, 2013 until November 1, 2014, Mr. Allard attended six (6) board meetings in person and one (1) by telephone.
|
(3)
|
The value of unvested DSUs at the financial year-end is the market value of the Subordinate Voting Shares on August 31, 2014, which was US$4.40 (CA$4.78). The market value of the Subordinate Voting Shares was calculated by using the highest of the closing prices of the Subordinate Voting Shares on the Toronto Stock Exchange and on the NASDAQ National Market on August 29, 2014 using the noon buying rate of the Bank of Canada to convert either the NASDAQ National Market closing price to Canadian dollars or the Toronto Stock Exchange closing price to United States dollars as required. The actual gains on vesting of DSUs will depend on the value of the Subordinate Voting Shares on the date of vesting. There can be no assurance that these values will be realized.
|
(4)
|
Refers to Subordinate Voting Shares.
|
Securities Held
|
||||||||||
As at
|
Subordinate
Voting Shares (#) |
DSUs (#)
|
Total Shares and DSUs (#)
|
Total Market Value
of Shares and DSUs (US$) |
||||||
August 31, 2014
|
‒
|
‒
|
‒
|
‒
|
Options Held as at August 31, 2014
|
||||||||||
Date Granted
|
Number(#)
|
Exercise Price (US$)
(6)
|
Total Unexercised (#)
|
Value of Options
Unexercised (US$)
|
||||||
‒
|
‒
|
‒
|
‒
|
‒
|
(1)
|
Telus is a national telecommunications company in Canada that provides a wide range of telecommunications products and services.
|
(2)
|
Mr. Côté, if elected, will join our Board of Directors on January 8, 2015. Hence, from September 1, 2013 until November 1, 2014, Mr. Côté did not attend any meetings.
|
Securities Held
|
||||||||||
As at
|
Subordinate
Voting Shares (#) |
DSUs (#)
|
Total Shares and DSUs (#)
|
Total Market Value
(2)
of Shares (3) and DSUs (US$) |
||||||
August 31, 2014
|
‒
|
14,960
|
14,960
|
65,824
|
Options Held as at August 31, 2014
|
||||||||||
Date Granted
|
Number(#)
|
Exercise Price (US$)
(6)
|
Total Unexercised (#)
|
Value of Options
Unexercised (US$)
|
||||||
‒
|
‒
|
‒
|
‒
|
‒
|
(1)
|
From September 1, 2013 until November 1, 2014, Mr. Edwards attended five (5) board meetings in person and two (2) by telephone.
|
(2)
|
The value of unvested DSUs at the financial year-end is the market value of the Subordinate Voting Shares on August 31, 2014, which was US$4.40 (CA$4.78). The market value of the Subordinate Voting Shares was calculated by using the highest of the closing prices of the Subordinate Voting Shares on the Toronto Stock Exchange and on the NASDAQ National Market on August 29, 2014 using the noon buying rate of the Bank of Canada to convert either the NASDAQ National Market closing price to Canadian dollars or the Toronto Stock Exchange closing price to United States dollars as required. The actual gains on vesting of DSUs will depend on the value of the Subordinate Voting Shares on the date of vesting. There can be no assurance that these values will be realized.
|
(3)
|
Refers to Subordinate Voting Shares.
|
Securities Held
|
||||||||||
As at
|
Subordinate
Voting Shares (#) |
DSUs (#)
|
Total Shares and DSUs (#)
|
Total Market Value
(3)
of Shares (4) and DSUs (US$) |
||||||
August 31, 2014
|
‒
|
8,498
|
8,498
|
37,391
|
Options Held as at August 31, 2014
|
||||||||||
Date Granted
|
Number(#)
|
Exercise Price (US$)
(6)
|
Total Unexercised (#)
|
Value of Options
Unexercised (US$)
|
||||||
‒
|
‒
|
‒
|
‒
|
‒
|
(1)
|
CGI Group Inc. is an information technology consulting, systems integration, outsourcing and solutions company.
|
(2)
|
From September 1, 2013 until November 1, 2014, Mr. Séguin attended six (6) board meetings in person and one (1) by telephone.
|
(3)
|
The value of unvested DSUs at the financial year-end is the market value of the Subordinate Voting Shares on August 31, 2014, which was US$4.40 (CA$4.78). The market value of the Subordinate Voting Shares was calculated by using the highest of the closing prices of the Subordinate Voting Shares on the Toronto Stock Exchange and on the NASDAQ National Market on August 29, 2014 using the noon buying rate of the Bank of Canada to convert either the NASDAQ National Market closing price to Canadian dollars or the Toronto Stock Exchange closing price to United States dollars as required. The actual gains on vesting of DSUs will depend on the value of the Subordinate Voting Shares on the date of vesting. There can be no assurance that these values will be realized.
|
(4)
|
Refers to Subordinate Voting Shares.
|
Securities Held
|
||||||||||
As at
|
Subordinate
Voting Shares (#) |
DSUs (#)
|
Total Shares and DSUs (#)
|
Total Market Value
(3)
of Shares (4) and DSUs (US$) |
||||||
August 31, 2014
|
‒
|
15,459
|
15,459
|
68,020
|
Options Held as at August 31, 2014
|
||||||||||
Date Granted
|
Number(#)
|
Exercise Price (US$)
(6)
|
Total Unexercised (#)
|
Value of Options
Unexercised (US$)
|
||||||
‒
|
‒
|
‒
|
‒
|
‒
|
(1)
|
Juniper Networks is a manufacturer of networking equipment.
|
(2)
|
From September 1, 2013 until November 1, 2014, Mr. Tornes attended six (6) board meetings in person and one (1) by telephone.
|
(3)
|
The value of unvested DSUs at the financial year-end is the market value of the Subordinate Voting Shares on August 31, 2014, which was US$4.40 (CA$4.78). The market value of the Subordinate Voting Shares was calculated by using the highest of the closing prices of the Subordinate Voting Shares on the Toronto Stock Exchange and on the NASDAQ National Market on August 29, 2014 using the noon buying rate of the Bank of Canada to convert either the NASDAQ National Market closing price to Canadian dollars or the Toronto Stock Exchange closing price to United States dollars as required. The actual gains on vesting of DSUs will depend on the value of the Subordinate Voting Shares on the date of vesting. There can be no assurance that these values will be realized.
|
(4)
|
Refers to Subordinate Voting Shares.
|
(a)
|
is, as at the date hereof, or has been, within ten (10) years before the date hereof, a director, chief executive officer or chief financial officer of any company that (i) was subject to an order that was issued while such individual was acting in the capacity as director, chief executive officer or chief financial officer, or (ii) was subject to an order that was issued after such individual ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer;
|
(b)
|
is, as at the date hereof, or has been within ten (10) years before the date hereof, a director or executive officer of any company that, while such individual was acting in that capacity, or within a year of that individual ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets;
|
(c)
|
has, within the ten (10) years before the date hereof, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold his assets; or
|
(d)
|
has been subject to (i) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority, or (ii) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable security holder in deciding whether to vote for such individual.
|
Name
|
Subordinate Voting
Shares Owned
|
Currently Exercisable Options Owned as at November 1, 2014
|
Total Subordinate Voting Shares Beneficially Owned
(3)
|
Multiple Voting Shares Beneficially Owned
(3)
|
Total Percentage
of Voting Power
|
||||||||
“In-the-money”
(1)
|
Out-the-money
(2)
|
||||||||||||
Number
|
Percent
|
Number
|
Percent
|
Number
|
Percent
|
Number
|
Percent
|
Number
|
Percent
|
Percent
|
|||
Germain Lamonde
|
4,271,699
|
(4)
|
14.87
|
–
|
*
|
29,160
|
37.95
|
4,300,859
|
14.96
|
31,643,000
|
(5)
|
100
|
92.92
|
Pierre Plamondon
|
88,906
|
(6)
|
*
|
–
|
*
|
3,653
|
4.75
|
92,559
|
*
|
–
|
–
|
*
|
|
Pierre-Paul Allard
|
8,000
|
*
|
–
|
*
|
–
|
*
|
8,000
|
*
|
–
|
–
|
*
|
||
Darryl Edwards
|
–
|
*
|
–
|
*
|
–
|
*
|
–
|
*
|
–
|
–
|
*
|
||
Guy Marier
|
1,000
|
*
|
–
|
*
|
–
|
*
|
1,000
|
*
|
–
|
–
|
*
|
||
Claude Séguin
|
–
|
*
|
–
|
*
|
–
|
*
|
–
|
*
|
–
|
–
|
*
|
||
Randy E. Tornes
|
–
|
*
|
–
|
*
|
–
|
*
|
–
|
*
|
–
|
–
|
*
|
||
Jon Bradley
|
–
|
*
|
–
|
*
|
–
|
*
|
–
|
*
|
–
|
–
|
*
|
||
Lee Huat (Joseph) Soo
|
–
|
*
|
–
|
*
|
–
|
*
|
–
|
*
|
–
|
–
|
*
|
||
Dana Yearian
|
34,181
|
*
|
–
|
*
|
–
|
*
|
34,181
|
*
|
–
|
–
|
*
|
||
Other executive officers as a group
|
64,221
|
*
|
–
|
*
|
2,228
|
2.90
|
66,449
|
*
|
–
|
–
|
*
|
||
All of our Directors and executive officers as a group
|
4,468,007
|
15.55
|
–
|
*
|
35,041
|
45.60
|
4,503,048
|
15.66
|
31,643,000
|
100
|
92.97
|
|
|||||||||||
*
|
Less than 1%.
|
(1)
|
“In-the-money” options are options for which the market value of the underlying securities is higher than the exercise price at which such securities may be bought from the Corporation. As at November 1, 2014 the market value of a Subordinate Voting Share was US$3.84 or CA$4.19 as applicable.
|
(2)
|
“Out-the-money” options are options for which the market value of the underlying securities is lower than the price of which such securities may be bought from the Corporation.
|
(3)
|
Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Options that are currently exercisable or exercisable within sixty (60) days as at November 1, 2014 (including options that have an exercise price above the market price) are deemed to be outstanding and to be beneficially owned by the person holding such options for the purpose of computing the percentage ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Accordingly, DSUs and RSUs are not included.
|
(4)
|
The number of shares held by Germain Lamonde includes 4,000,000 subordinate voting shares held of record by G. Lamonde Investissements financiers inc.
|
(5)
|
The number of shares held by Germain Lamonde includes 1,900,000 multiple voting shares held of record by Fiducie Germain Lamonde and 29,743,000 multiple voting shares held of record by G. Lamonde Investissements Financiers inc.
|
(6)
|
The number of shares held by Pierre Plamondon includes 6,874 subordinate voting shares held of record by Fiducie Pierre Plamondon.
|
Name
|
Securities Under Options
Granted
(1)
(#)
|
Exercise Price
(2)
(US$/Security)
|
Expiration Date
|
||
Germain Lamonde
|
17,942
11,218
|
$4.51
$4.76
|
February 1, 2015
December 6, 2015
|
||
Pierre Plamondon
|
3,653
|
$4.76
|
December 6, 2015
|
||
Pierre-Paul Allard
|
−
|
−
|
−
|
||
Darryl Edwards
|
−
|
−
|
−
|
||
Guy Marier
|
−
|
−
|
−
|
||
Claude Séguin
|
−
|
−
|
−
|
||
Randy E. Tornes
|
−
|
−
|
−
|
||
Jon Bradley
|
−
|
−
|
−
|
||
Lee Huat (Joseph) Soo
|
−
|
−
|
−
|
Name
|
Securities Under Options
Granted
(1)
(#)
|
Exercise Price
(2)
(US$/Security)
|
Expiration Date
|
||
Dana Yearian
|
−
|
−
|
−
|
||
Other Executive Officers as a group
|
2,228
|
$4.76
|
Decembre 6, 2015
|
(1)
|
Underlying securities: subordinate voting shares.
|
(2)
|
The exercise price of options granted is determined based on the highest of the closing prices of the subordinate voting shares on the Toronto Stock Exchange and the NASDAQ National Market on the last trading day preceding the grant date, using the noon buying rate of the Federal Reserve Bank of New York on the grant date to convert either the NASDAQ National Market closing price to Canadian dollars or the Toronto Stock Exchange closing price to United States dollars, as required.
|
Name
|
DSUs
|
RSUs
|
||||||
Number
|
Percentage
|
Estimated Average
Value at the time of
grant US$/DSU
(1)
|
Number
|
Percentage
|
Fair Value at the
time of grant
US$/RSU
(2)
|
|||
Germain Lamonde
|
–
|
–
|
–
|
44,548
|
(3)
|
3.34%
|
6.03
|
|
–
|
–
|
–
|
53,261
|
(4)
|
4.00%
|
5.43
|
||
Pierre Plamondon
|
–
|
–
|
–
|
12,863
|
(3)
|
0.96%
|
6.03
|
|
–
|
–
|
–
|
8,857
|
(5)
|
0.66%
|
6.03
|
||
–
|
–
|
–
|
17,325
|
(4)
|
1.30%
|
5.43
|
||
–
|
–
|
–
|
19,740
|
(6)
|
1.48%
|
5.06
|
||
–
|
–
|
–
|
19,839
|
(7)
|
1.49%
|
5.28
|
||
–
|
–
|
–
|
27,729
|
(8)
|
2.08%
|
3.71
|
||
Pierre-Paul Allard
|
31,882
|
(9)
|
27.1%
|
4.81
|
–
|
–
|
–
|
|
Darryl Edwards
|
14,960
|
(9)
|
12.7%
|
5.04
|
–
|
–
|
–
|
|
Guy Marier
|
46,902
|
(9)
|
39.9%
|
5.03
|
–
|
–
|
–
|
|
Claude Séguin
|
8,498
|
(9)
|
7.2%
|
4.63
|
–
|
–
|
–
|
|
Randy E. Tornes
|
15,459
|
(9)
|
13.1%
|
4.62
|
–
|
–
|
–
|
|
Jon Bradley
|
–
|
–
|
–
|
8,342
|
(3)
|
0.63%
|
6.03
|
|
–
|
–
|
–
|
8,857
|
(5)
|
0.66%
|
6.03
|
||
–
|
–
|
–
|
11,255
|
(4)
|
0.84%
|
5.43
|
||
–
|
–
|
–
|
14,089
|
(6)
|
1.06%
|
5.06
|
||
–
|
–
|
–
|
14,100
|
(7)
|
1.06%
|
5.28
|
||
–
|
–
|
–
|
22,528
|
(8)
|
1.69%
|
3.71
|
||
Lee Huat (Joseph) Soo
|
–
|
–
|
–
|
8,321
|
(10)
|
0.62%
|
6.61
|
|
–
|
–
|
–
|
12,735
|
(6)
|
0.96%
|
5.06
|
||
–
|
–
|
–
|
12,958
|
(7)
|
0.97%
|
5.28
|
||
–
|
–
|
–
|
21,332
|
(8)
|
1.60%
|
3.71
|
||
Dana Yearian
|
–
|
–
|
–
|
11,470
|
(3)
|
0.86%
|
6.03
|
|
–
|
–
|
–
|
8,857
|
(5)
|
0.66%
|
6.03
|
||
–
|
–
|
–
|
15,322
|
(4)
|
1.15%
|
5.43
|
||
–
|
–
|
–
|
17,994
|
(6)
|
1.35%
|
5.06
|
||
–
|
–
|
–
|
17,676
|
(7)
|
1.33%
|
5.28
|
||
–
|
–
|
–
|
25,706
|
(8)
|
1.93%
|
3.71
|
||
Other executive officers as a group
|
–
|
–
|
–
|
29,709
|
(3)
|
2.23%
|
6.03
|
|
–
|
–
|
–
|
12,882
|
(5)
|
0.97%
|
6.03
|
||
–
|
–
|
–
|
2,300
|
(11)
|
0.17%
|
9.32
|
||
–
|
–
|
–
|
41,420
|
(4)
|
3.11%
|
5.43
|
||
–
|
–
|
–
|
4,600
|
(12)
|
0.30%
|
6.47
|
||
–
|
–
|
–
|
7,576
|
(15)
|
0.57%
|
6.55
|
||
–
|
–
|
–
|
6,330
|
(16)
|
0.47%
|
6.55
|
||
–
|
–
|
–
|
1,429
|
(13)
|
0.11%
|
7.06
|
||
–
|
–
|
–
|
75,846
|
(6)
|
5.69%
|
5.06
|
||
–
|
–
|
–
|
2,200
|
(14)
|
0.17%
|
5.61
|
||
–
|
–
|
–
|
73,660
|
(7)
|
5.53%
|
5.28
|
||
–
|
–
|
–
|
1,650
|
(17)
|
0.12%
|
4.36
|
||
–
|
–
|
–
|
100,431
|
(8)
|
7.53%
|
3.71
|
Name
|
DSUs
|
RSUs
|
||||||
Number
|
Percentage
|
Estimated Average
Value at the time of
grant US$/DSU
(1)
|
Number
|
Percentage
|
Fair Value at the
time of grant
US$/RSU
(2)
|
|||
All of the directors and executive officers as a group
|
–
|
–
|
–
|
106,932
|
(3)
|
8.02%
|
6.03
|
|
–
|
–
|
–
|
39,453
|
(5)
|
2.96%
|
6.03
|
||
–
|
–
|
–
|
2,300
|
(11)
|
0.17%
|
9.32
|
||
–
|
–
|
–
|
138,583
|
(4)
|
10.40%
|
5.43
|
||
–
|
–
|
–
|
4,000
|
(12)
|
0.30%
|
6.47
|
||
–
|
–
|
–
|
8,321
|
(10)
|
0.62%
|
6.61
|
||
–
|
–
|
–
|
7,576
|
(15)
|
0.57%
|
6.55
|
||
–
|
–
|
–
|
6,330
|
(16)
|
0.47%
|
6.55
|
||
–
|
–
|
–
|
1,429
|
(13)
|
0.11%
|
7.06
|
||
–
|
–
|
–
|
140,404
|
(6)
|
10.53%
|
5.06
|
||
–
|
–
|
–
|
2,200
|
(14)
|
0.17%
|
5.61
|
||
–
|
–
|
–
|
138,233
|
(7)
|
10.37%
|
5.28
|
||
–
|
–
|
–
|
1,650
|
(17)
|
0.12%
|
4.36
|
||
–
|
–
|
–
|
197,726
|
(8)
|
14.83%
|
3.71
|
||
Total
|
117,701
|
100%
|
4.89
|
795,137
|
59.64%
|
5.07
|
(1)
|
The estimated average value at the time of grant of a DSU is the average of the estimated value at the time of grant of a DSU which is determined based on the highest of the closing prices of the Subordinate Voting Shares on the Toronto Stock Exchange and the NASDAQ National Market on the last trading day preceding the grant date, using the noon buying rate of the Federal Reserve Bank of New York (for grants of DSUs prior to January 1, 2009) or the Bank of Canada (for grants of DSUs on or after January 1, 2009) on the grant date to convert either the NASDAQ National Market closing price to Canadian dollars or the Toronto Stock Exchange closing price to United States dollars, as required. The value at vesting of a DSU is equivalent to the market value of a Subordinate Voting Share when a DSU is converted to such Subordinate Voting Share.
|
(2)
|
The fair value at the time of grant of a RSU is equal to the market value of Subordinate Voting Shares at the time RSUs are granted.
|
(3)
|
Those RSUs will vest on the fifth anniversary date of the grant in October 2010 but are subject to early vesting on the third and fourth anniversary date of the grant on the attainment of performance objectives as determined by the Board of Directors. Accordingly, subject to the attainment of performance objectives, the first early vesting is up to 1/3 of the units on the third anniversary date of the grant and the second early vesting is up to 50% of the remaining units on the fourth anniversary date of the grant.
|
(4)
|
Those RSUs will vest on the fifth anniversary date of the grant in October 2011 but are subject to early vesting on the third and fourth anniversary date of the grant on the attainment of performance objectives as determined by the Board of Directors. Accordingly, subject to the attainment of performance objectives, the first early vesting is up to 1/3 of the units on the third anniversary date of the grant and the second early vesting is up to 50% of the remaining units on the fourth anniversary date of the grant.
|
(5)
|
Those RSUs will vest on the fifth anniversary date of the grant in October 2010 but are subject to early vesting on the third or fourth anniversary date of the grant on the attainment of performance objectives as determined by the Board of Directors. Accordingly, subject to the attainment of performance objectives, the early vesting is up to 100% of the units on the third or fourth anniversary date of the grant.
|
(6)
|
Those RSUs will vest on the fifth anniversary date of the grant in October 2012 but are subject to early vesting on the third and fourth anniversary date of the grant on the attainment of performance objectives as determined by the Board of Directors. Accordingly, subject to the attainment of performance objectives, the first early vesting is up to 1/3 of the units on the third anniversary date of the grant and the second early vesting is up to 50% of the remaining units on the fourth anniversary date of the grant.
|
(7)
|
Those RSUs will vest on the fifth anniversary date of the grant in October 2013 but are subject to early vesting on the third and fourth anniversary date of the grant on the attainment of performance objectives as determined by the Board of Directors. Accordingly, subject to the attainment of performance objectives, the first early vesting is up to 1/3 of the units on the third anniversary date of the grant and the second early vesting is up to 50% of the remaining units on the fourth anniversary date of the grant.
|
(8)
|
Those RSUs will vest on the fifth anniversary date of the grant in October 2014 but are subject to early vesting on the third and fourth anniversary date of the grant on the attainment of performance objectives as determined by the Board of Directors. Accordingly, subject to the attainment of performance objectives, the first early vesting is up to 1/3 of the units on the third anniversary date of the grant and the second early vesting is up to 50% of the remaining units on the fourth anniversary date of the grant.
|
(9)
|
Those DSUs will vest at the time Director ceases to be a member of the Board of the Corporation.
|
(10)
|
Those RSUs will vest at a rate of 1/2 annually commencing on the third anniversary date of the grant in January 2012.
|
(11)
|
Those RSUs will vest at a rate of 1/2 annually commencing on the third anniversary date of the grant in January 2011.
|
(12)
|
Those RSUs will vest at a rate of 1/2 annually commencing on the third anniversary date of the grant in January 2012.
|
(13)
|
Those RSUs will vest on the fifth anniversary date of the grant in April 2012 but are subject to early vesting on the third and fourth anniversary date of the grant on the attainment of performance objectives as determined by the Board of Directors. Accordingly, subject to the attainment of performance objectives, the first early vesting is up to 1/3 of the units on the third anniversary date of the grant and the second early vesting is up to 50% of the remaining units on the fourth anniversary date of the grant.
|
(14)
|
Those RSUs will vest at a rate of 1/2 annually commencing on the third anniversary date of the grant in January 2013.
|
(15)
|
Those RSUs will vest at a rate of 1/2 annually commencing on the third anniversary date of the grant in January 2012.
|
(16)
|
Those RSUs will vest on the fifth anniversary date of the grant in January 2012 but are subject to early vesting on the third and fourth anniversary date of the grant on the attainment of performance objectives as determined by the Board of Directors. Accordingly, subject to the attainment of performance objectives, the first early vesting is up to 1/3 of the units on the third anniversary date of the grant and the second early vesting is up to 50% of the remaining units on the fourth anniversary date of the grant.
|
(17)
|
Those RSUs will vest at a rate of 1/2 annually commencing on the third anniversary date of the grant in January 2014.
|
|
Escrowed Securities
|
Major Shareholders and Related Party Transactions
|
Multiple Voting Shares
Beneficially Owned (1) |
Subordinate Voting Shares
Beneficially Owned (1) |
Total Percentage
of Voting Power |
||||||||
Name
|
Number
|
Percent
|
Number
|
Percent
|
Percent
|
|||||
Germain
Lamonde
(2)
|
31,643,000
|
100.00%
|
4,271,699
|
14.87%
|
92.91%
|
|||||
Fiducie Germain Lamonde
(3)
|
1,900,000
|
6.00%
|
–
|
–
|
5.50%
|
|||||
G. Lamonde Investissements Financiers inc.
(4)
|
29,743,000
|
94.00%
|
4,000,000
|
13.92%
|
87.33%
|
|||||
EdgePoint Investment Group, Inc.
|
–
|
–
|
3,775,600
|
13.14%
|
1.09%
|
|||||
Royce & Associates LLC
|
–
|
–
|
2,268,534
|
7.90%
|
*
|
|||||
Brown Investment Advisory, Inc.
|
–
|
–
|
1,550,182
|
5.40%
|
*
|
*
|
Less than 1%
|
(1)
|
Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Options that are currently exercisable within 60 days of November 1, 2014 (including options that have an exercise price above the market price) are deemed to be outstanding and to be beneficially owned by the person holding such options for the purpose of computing the percentage ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.
|
(2)
|
The number of shares held by Germain Lamonde includes 1,900,000 multiple voting shares held of record by Fiducie Germain Lamonde, 29,743,000 multiple voting shares held of record by G. Lamonde Investissements Financiers inc. and 4,000,000 subordinate voting shares held of record by G. Lamonde Investissements Financiers inc.
|
(3)
|
Fiducie Germain Lamonde is a family trust for the benefit of Mr. Lamonde and members of his family.
|
(4)
|
G. Lamonde Investissements Financiers inc. is a company controlled by Mr. Lamonde.
|
Financial Information
|
Years ended August 31,
|
||||||||||||||||||||||||
2014
|
2013
|
2012
|
||||||||||||||||||||||
Export Sales
|
$ | 211,324 | 92 | % | $ | 216,077 | 89 | % | $ | 220,022 | 88 | % | ||||||||||||
Domestic Sales
|
19,482 | 8 | 26,073 | 11 | 29,944 | 12 | ||||||||||||||||||
$ | 230,806 | 100 | % | $ | 242,150 | 100 | % | $ | 249,966 | 100 | % |
The Offer and Listing
|
NASDAQ (US$)
|
TSX (CA$)
|
|||
High
|
Low
|
High
|
Low
|
|
September 1, 2009 to August 31, 2010
|
6.59
|
2.81
|
6.70
|
3.10
|
September 1, 2010 to August 31, 2011
|
12.96
|
5.28
|
12.56
|
5.50
|
September 1, 2011 to August 31, 2012
|
8.23
|
4.56
|
8.24
|
4.59
|
September 1, 2012 to August 31, 2013
|
5.90
|
4.00
|
5.86
|
4.14
|
September 1, 2013 to August 31, 2014
|
5.70
|
4.13
|
5.88
|
4.51
|
September 1, 2012 to November 30, 2012 (2013 1
st
Quarter)
|
5.20
|
4.38
|
5.10
|
4.40
|
December 1, 2012 to February 28, 2013 (2013 2
nd
Quarter)
|
5.90
|
4.51
|
5.86
|
4.40
|
March 1, 2013 to May 31, 2013 (2013 3
rd
Quarter)
|
5.65
|
4.33
|
5.76
|
4.40
|
June 1, 2013 to August 31, 2013 (2013 4
th
Quarter)
|
5.05
|
4.00
|
5.25
|
4.14
|
September 1, 2013 to November 30, 2013 (2014 1
st
Quarter)
|
5.70
|
4.46
|
5.88
|
4.67
|
December 1, 2013 to February 28, 2014 (2014 2
nd
Quarter)
|
5.32
|
4.13
|
5.68
|
4.51
|
March 1, 2014 to May 31, 2014 (2014 3
rd
Quarter)
|
5.15
|
4.22
|
5.70
|
4.60
|
June 1, 2014 to August 31, 2014 (2014 4
th
Quarter)
|
4.86
|
4.19
|
5.17
|
4.56
|
May 2014
|
4.60
|
4.22
|
5.01
|
4.60
|
June 2014
|
4.86
|
4.19
|
5.17
|
4.56
|
July 2014
|
4.80
|
4.35
|
5.15
|
4.73
|
August 2014
|
4.62
|
4.35
|
5.05
|
4.75
|
September 2014
|
4.40
|
3.94
|
4.80
|
4.40
|
October 2014
|
3.95
|
3.47
|
4.41
|
3.91
|
November 2014
|
3.67
|
3.45
|
4.20
|
3.90
|
(until November 10)
|
Additional Information
|
|
(a)
|
an individual citizen or resident of the United States;
|
|
(b)
|
a corporation created or organized under the laws of the United States or any state thereof and the District of Columbia;
|
|
(c)
|
an estate the income of which is subject to United States federal income taxation regardless of its source;
|
|
(d)
|
a trust if (1) a court within the United States is able to exercise primary supervision over its administration and one or more U.S. persons as described in Section 7701 (a) (30) of the Code have authority to control all substantial decisions of the trust or (2) the trust has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person; or
|
|
(e)
|
any other person whose worldwide income or gain is otherwise subject to U.S. federal income taxation on a net income basis.
|
|
●
|
the Code;
|
|
●
|
U.S. judicial decisions;
|
|
●
|
administrative pronouncements;
|
|
●
|
existing and proposed Treasury regulations; and
|
|
●
|
the Canada – U.S. Income Tax Treaty.
|
|
●
|
the holder’s holding period for the subordinate voting shares, with a preferential rate available for subordinate voting shares held for more than one year; and
|
|
●
|
the holder’s marginal tax rate for ordinary income.
|
|
●
|
such gain is effectively connected with the conduct by such Non-U.S. Holder of a trade or business in the United States; or
|
|
●
|
in the case of any gain realized by an individual Non-U.S. Holder, such Non-U.S. Holder is present in the United States for 183 days or more in the taxable year of such sale and certain other conditions are met.
|
|
●
|
at least 75% of our gross income for the taxable year is passive income; or
|
|
●
|
at least 50% of the average value of our assets is attributable to assets that produce or are held for the production of passive income.
|
|
●
|
dividends;
|
|
●
|
interest;
|
|
●
|
rents or royalties, other than certain rents or royalties derived from the active conduct of trade or business;
|
|
●
|
annuities; and
|
|
●
|
gains from assets that produce passive income.
|
|
●
|
any gain realized on the sale or other disposition of subordinate voting shares; and
|
|
●
|
any “excess distribution” by us to the U.S. Holder.
|
|
●
|
the gain or excess distribution would be allocated ratably over the U.S. Holder’s holding period for the subordinate voting shares;
|
|
●
|
the amount allocated to the taxable year in which the gain or excess distribution was realized and to taxable years prior to the first year in which we were classified as a PFIC would be taxable as ordinary income; and
|
|
●
|
the amount allocated to each other prior year would be subject to tax as ordinary income at the highest tax rate in effect for that year, and the interest charge generally applicable to underpayments of tax would be imposed in respect of the tax attributable to each such year.
|
|
●
|
is resident in the United States and not resident in Canada;
|
|
●
|
holds the subordinate voting shares as capital property;
|
|
●
|
does not have a “permanent establishment” or “fixed base” in Canada, as defined in the Convention; and
|
|
●
|
deals at arm’s length with us. Special rules, which are not discussed below, may apply to “financial institutions”, as defined in the ITA, and to non-resident insurers carrying on an insurance business in Canada and elsewhere.
|
Qualitative and Quantitative Disclosures about Market Risk
|
Years ending August 31,
|
||||||||||||
2015
|
2016
|
2017
|
||||||||||
Forward exchange contracts to sell US dollars in exchange for Canadian dollars
|
||||||||||||
Contractual amounts
|
$ | 22,200 | $ | 13,400 | $ | 3,400 | ||||||
Weighted average contractual forward rates
|
1.0666 | 1.0923 | 1.1063 |
Year ending August 31,
|
||||
2015
|
||||
Forward exchange contracts to sell US dollars in exchange for Indian rupees
|
||||
Contractual amounts
|
$ | 2,800 | ||
Weighted average contractual forward rate
|
62.11 |
Carrying/nominal
amount
(in thousands
of US dollars)
|
Carrying/nominal
amount
(in thousands
of euros)
|
|||||||
Financial assets
|
||||||||
Cash
|
$ | 15,382 | € | 3,353 | ||||
Accounts receivable
|
33,127 | 6,325 | ||||||
48,509 | 9,678 | |||||||
Financial liabilities
|
||||||||
Accounts payable and accrued liabilities
|
10,824 | 880 | ||||||
Forward exchange contracts (nominal amount)
|
3,800 | – | ||||||
14,624 | 880 | |||||||
Net exposure
|
$ | 33,885 | € | 8,798 |
|
●
|
An increase (decrease) of 10% in the period-end value of the Canadian dollar compared to the US dollar would decrease (increase) net earnings by and $3.0 million, or $0.05 per diluted share, as at August 31, 2014.
|
|
●
|
An increase (decrease) of 10% in the period-end value of the Canadian dollar compared to the euro would decrease (increase) net earnings by $1.1 million or $0.02 per diluted share, as at August 31, 2014.
|
|
●
|
An increase (decrease) of 10% in the period-end value of the Canadian dollar compared to the US dollar would increase (decrease) comprehensive income by $2.6 million as at August 31, 2014.
|
Bankers acceptance denominated in Canadian dollars, bearing interest at an annual rate of 1.1%, maturing in September 2014
|
$ | 4,730 | ||
Term deposits denominated in Indian rupees, bearing interest at an annual rate of 9.0%, maturing in December 2014 and January 2015
|
569 | |||
Term deposits denominated in Indian rupees, bearing interest at an annual rate of 8.0%, maturing between September 2014 and May 2015
|
427 | |||
$ | 5,726 |
Current
|
$ | 36,700 | ||
Past due, 0 to 30 days
|
5,508 | |||
Past due, 31 to 60 days
|
1,372 | |||
Past due, more than 60 days, less allowance for doubtful accounts of $396
|
2,451 | |||
Total trade accounts receivable
|
$ | 46,031 |
0-12
months
|
13-24
months
|
25-36
Months
|
||||||||||
Accounts payable and accrued liabilities
|
$ | 28,990 | $ | – | $ | – | ||||||
Forward exchange contracts
|
||||||||||||
Outflow (nominal amount)
|
25,000 | 13,400 | 3,400 | |||||||||
Inflow
|
(24,675 | ) | (13,480 | ) | (3,464 | ) | ||||||
Total
|
$ | 29,315 | $ | (80 | ) | $ | (64 | ) |
Description of Securities Other than Equity Securities
|
Defaults, Dividend Arrearages and Delinquencies
|
Material Modifications to the Rights of Security Holders and Use of Proceeds
|
Controls and Procedures
|
[Reserved]
|
|
●
|
Code of Ethics for our Principal Executive Officer and Senior Financial Officers;
|
|
●
|
Board of Directors Corporate Governance Guidelines;
|
|
●
|
Ethics and Business Conduct Policy;
|
|
●
|
Statement of Reporting Ethical Violations (Whistleblower).
|
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
|
Period
|
(a) Total
Number
of Shares
(or Units)
Purchased
(#)
|
(b) Average Price Paid
per Share (or Units)
|
(c) Total Number of
Shares (or Units)
Purchased as Part of
Publicly Announced
Plans or Programs
(#)
|
(d) Maximum Number
of Shares (or Units) that
May Yet Be Purchased
Under the Plans or
Programs
(#)
|
|
NASDAQ
(US$)
|
TSX
(CA$)
|
||||
From September 1, 2013
|
‒
|
‒
|
‒
|
‒
|
1,569,965
|
To September 30, 2013
|
|||||
From October 1, 2013
|
‒
|
‒
|
‒
|
‒
|
1,569,965
|
To October 31, 2013
|
|||||
From November 1, 2013
|
‒
|
‒
|
‒
|
‒
|
1,569,965
|
To November 11, 2013
|
|||||
From November 12, 2013
|
‒
|
‒
|
‒
|
‒
|
‒
|
To November 30, 2013
|
|||||
From December 1, 2013
|
‒
|
‒
|
‒
|
‒
|
‒
|
To December 31, 2013
|
|||||
From January 1, 2014
|
‒
|
‒
|
‒
|
‒
|
‒
|
To January 12, 2014
|
|||||
From January 13, 2014
|
117,316
|
4.33
|
4.74
|
117,316
|
2,043,101
|
To January 31, 2014
|
|||||
From February 1, 2014
|
97,154
|
4.35
|
4.79
|
97,154
|
1,828,631
|
To February 28, 2014
|
|||||
From March 1, 2014
|
‒
|
‒
|
‒
|
‒
|
1,828,631
|
To March 31, 2014
|
|||||
From April 1, 2014
|
‒
|
‒
|
‒
|
‒
|
1,828,631
|
To April 30, 2014
|
|||||
From May 1, 2014
|
‒
|
‒
|
‒
|
‒
|
1,828,631
|
To May 31, 2014
|
|||||
From June 1, 2014
|
‒
|
‒
|
‒
|
‒
|
1,828,631
|
To June 30, 2014
|
|||||
From July 1, 2014
|
‒
|
‒
|
‒
|
‒
|
1,828,631
|
To July 31, 2014
|
|||||
From August 1, 2014
|
‒
|
‒
|
‒
|
‒
|
1,828,631
|
To August 31, 2014
|
|||||
From September 1, 2014
|
‒
|
‒
|
‒
|
‒
|
1,828,631
|
To September 30, 2014
|
|||||
From October 1, 2014
|
92,048
|
3.61
|
4.05
|
92,048
|
1,736,583
|
To October 31, 2014
|
|||||
From November 1, 2014
|
45,225
|
3.69
|
4.15
|
45,225
|
1,691,358
|
To November 10, 2014
|
|||||
Total
|
351,743
|
351,743
|
Financial Statements
|
Financial Statements
|
Exhibits
|
Number
|
Exhibit
|
1.1
|
Amended Articles of Incorporation of EXFO (incorporated by reference to Exhibit 3.1 of EXFO’s Registration Statement on Form F-1 filed on June 9, 2000, File No. 333-38956).
|
1.2
|
Amended By-laws of EXFO (incorporated by reference to Exhibit 1.2 of EXFO’s Annual Report on Form-20F dated January 15, 2003, File No. 000-30895).
|
1.3
|
Amended and Restated Articles of Incorporation of EXFO (incorporated by reference to Exhibit 1.3 of EXFO’s Annual Report on Form 20-F dated January 18, 2001, File No. 000-30895).
|
1.4
|
Certificate of Amendment, Canada Business Corporations Act (incorporated by reference to Exhibit 10.1 of EXFO’s Annual Report on Form 20-F dated November 25, 2009, File No. 000-30895).
|
1.5
|
Certificate of Amendment (Change of Name), Canada Business Corporations Act (incorporated by reference to Exhibit 1.5 of EXFO’s Annual Report on Form 20-F dated November 24, 2010, File No. 000-30895).
|
2.1
|
Form of Subordinate Voting Share Certificate (incorporated by reference to Exhibit 4.1 of EXFO’s Registration Statement on Form F-1 filed on June 9, 2000, File No. 333-38956).
|
2.2
|
Form of Registration Rights Agreement between EXFO and Germain Lamonde dated July 6, 2000) (incorporated by reference to Exhibit 10.13 of EXFO’s Registration Statement on Form F-1 filed on June 9, 2000, File No. 333-38956).
|
3.1
|
Form of Trust Agreement among EXFO, Germain Lamonde, GEXFO Investissements Technologiques inc., Fiducie Germain Lamonde and G. Lamonde Investissements Financiers inc. (incorporated by reference to Exhibit 4.2 of EXFO’s Registration Statement on Form F-1 filed on June 9, 2000, File No. 333-38956).
|
4.1
|
Agreement of Merger and Plan of Reorganization, dated as of November 4, 2000, by and among EXFO, EXFO Sub, Inc., EXFO Burleigh Instruments, Inc., Robert G. Klimasewski, William G. May, Jr., David J. Farrell and William S. Gornall (incorporated by reference to Exhibit 4.1 of EXFO’s Annual Report on Form 20-F dated January 18, 2001, File No. 000-30895).
|
4.2
|
Amendment No. 1 to Agreement of Merger and Plan of Agreement, dated as of December 20, 2000, by and among EXFO, EXFO Sub, Inc., EXFO Burleigh Instruments, Inc., Robert G. Klimasewski, William G. May, Jr., David J. Farrell and William S. Gornall (incorporated by reference to Exhibit 4.2 of EXFO’s Annual Report on Form 20-F dated January 18, 2001, File No. 000-30895).
|
4.3
|
Agreement of Merger, dated as of August 20, 2001, by and among EXFO, Buyer Sub, and Avantas Networks Corporation and Shareholders of Avantas Networks corporation (incorporated by reference to Exhibit 4.3 of EXFO’s Annual Report on Form 20-F dated January 18, 2002, File No. 000-30895).
|
4.4
|
Amendment No. 1 dated as of November 1, 2002 to Agreement of Merger, dated as of August 20, 2001, by and among EXFO, 3905268 Canada Inc., Avantas Networks Corporation and Shareholders of Avantas Networks (incorporated by reference to Exhibit 4.4 of EXFO’s Annual Report on Form 20-F dated January 18, 2002, File No. 000-30895).
|
4.5
|
Offer to purchase shares of Nortech Fibronic Inc., dated February 6, 2000 among EXFO, Claude Adrien Noel, 9086-9314 Québec inc., Michel Bédard, Christine Bergeron and Société en Commandite Capidem Québec Enr. and Certificate of Closing, dated February 7, 2000 among the same parties (including summary in English) (incorporated by reference to Exhibit 10.2 of EXFO’s Registration Statement on Form F-1 filed on June 9, 2000, File No. 333-38956).
|
4.6
|
Share Purchase Agreement, dated as of March 5, 2001, among EXFO Electro-Optical Engineering, Inc., John Kennedy, Glenn Harvey and EFOS Corporation (incorporated by reference to Exhibit 4.1 of EXFO’s Registration Statement on Form F-3 filed on July 13, 2001, File No. 333-65122).
|
4.7
|
Amendment Number One, dated as of March 15, 2001, to Share Purchase Agreement, dated as of March 5, 2001, among EXFO Electro-Optical Engineering, Inc., John Kennedy, Glenn Harvey and EFOS Corporation. (incorporated by reference to Exhibit 4.2 of EXFO’s Registration Statement on Form F-3 filed on July 13, 2001, File No. 333-65122).
|
4.8
|
Share Purchase Agreement, dated as of November 2, 2001 between JDS Uniphase Inc. and 3905268 Canada Inc. (incorporated by reference to Exhibit 4.8 of EXFO’s Annual Report on Form 20-F dated January 18, 2002, File No. 000-30895).
|
4.9
|
Intellectual Property Assignment and Sale Agreement between EFOS Inc., EXFO Electro-Optical Engineering, Inc., John Kennedy, Glenn Harvey and EFOS Corporation. (incorporated by reference to Exhibit 4.3 of EXFO’s Registration Statement on Form F-3 filed on July 13, 2001, File No. 333-65122).
|
4.10
|
Offer to acquire a building, dated February 23, 2000, between EXFO and Groupe Mirabau inc. and as accepted by Groupe Mirabau inc. on February 24, 2000 (including summary in English) (incorporated by reference to Exhibit 10.3 of EXFO’s Registration Statement on Form F-1 filed on June 9, 2000, File No. 333-38956).
|
4.11
|
Lease Agreement, dated December 1, 1996, between EXFO and GEXFO Investissements Technologiques inc., as assigned to 9080-9823 Québec inc. on September 1, 1999 (including summary in English) (incorporated by reference to Exhibit 10.4 of EXFO’s Registration Statement on Form F-1 filed on June 9, 2000, File No. 333-38956).
|
4.12
|
Lease Agreement, dated March 1, 1996, between EXFO and GEXFO Investissements Technologiques inc., as assigned to 9080-9823 Québec inc. on September 1, 1999 (including summary in English) (incorporated by reference to Exhibit 10.5 of EXFO’s Registration Statement on Form F-1 filed on June 9, 2000, File No. 333-38956).
|
4.13
|
Lease renewal of the existing leases between 9080-9823 Québec inc. and EXFO, dated November 30, 2001(incorporated by reference to Exhibit 4.13 of EXFO’s Annual Report on Form 20-F dated January 18, 2002, File No. 000-30895).
|
4.14
|
Loan Agreement between EXFO and GEXFO Investissements Technologiques inc., dated May 11, 1993, as assigned to 9080-9823 Québec inc. on September 1, 1999 (including summary in English) (incorporated by reference to Exhibit 10.9 of EXFO’s Registration Statement on Form F-1 filed on June 9, 2000, File No. 333-38956).
|
4.15
|
Resolution of the Board of Directors of EXFO, dated September 1, 1999, authorizing EXFO to acquire GEXFO Distribution Internationale inc. from GEXFO Investissements Technologiques inc. (including summary in English) (incorporated by reference to Exhibit 10.10 of EXFO’s Registration Statement on Form F-1 filed on June 9, 2000, File No. 333-38956).
|
4.16
|
Form of Promissory Note of EXFO issued to GEXFO Investissements Technologiques inc. dated June 27, 2000 ) (incorporated by reference to Exhibit 10.12 of EXFO’s Registration Statement on Form F-1 filed on June 9, 2000, File No. 333-38956).
|
4.17
|
Term Loan Offer, dated March 28, 2000, among EXFO and National Bank of Canada as accepted by EXFO on April 3, 2000 (including summary in English) (incorporated by reference to Exhibit 10.11 of EXFO’s Registration Statement on Form F-1 filed on June 9, 2000, File No. 333-38956).
|
4.18
|
Employment Agreement of Germain Lamonde dated May 29, 2000 (incorporated by reference to Exhibit 10.15 of EXFO’s Registration Statement on Form F-1 filed on June 9, 2000, File No. 333-38956).
|
4.19
|
Employment Agreement of Bruce Bonini dated as of September 1, 2000 (incorporated by reference to Exhibit 4.24 of EXFO’s Annual Report on Form 20-F dated January 18, 2002, File No. 000-30895).
|
4.20
|
Employment Agreement of Juan-Felipe Gonzalez dated as of September 1, 2000 (incorporated by reference to Exhibit 4.25 of EXFO’s Annual Report on Form 20-F dated January 18, 2002, File No. 000-30895).
|
4.21
|
Employment Agreement of David J. Farrell dated as of December 20, 2000 (incorporated by reference to Exhibit 4.26 of EXFO’s Annual Report on Form 20-F dated January 18, 2002, File No. 000-30895).
|
4.22
|
Deferred Profit Sharing Plan, dated September 1, 1998 (incorporated by reference to Exhibit 10.6 of EXFO’s Registration Statement on Form F-1 filed on June 9, 2000, File No. 333-38956).
|
4.23
|
Stock Option Plan, dated May 25, 2000 (incorporated by Reference to Exhibit 10.7 of EXFO’s Registration Statement on Form F-1 filed on June 9, 2000, File No. 333-38956).
|
4.24
|
Share Plan, dated April 3, 2000 (incorporated by reference to Exhibit 10.8 of EXFO’s Registration Statement on Form F-1 filed on June 9, 2000, File No. 333-38956).
|
4.25
|
Directors’ Compensation Plan (incorporated by reference to Exhibit 10.17 of EXFO’s Registration Statement on Form F-1 filed on June 9, 2000, File No. 333-38956).
|
4.26
|
Restricted Stock Award Plan, dated December 20, 2000 (incorporated by reference to Exhibit 4.21 of EXFO’s Annual Report on Form 20-F dated January 18, 2001, File No. 000-30895).
|
4.27
|
Asset Purchase Agreement
by and Among EXFO Electro-Optical Engineering Inc., EXFO Gnubi Products Group Inc., gnubi communications, L.P., gnubi communications General Partner, LLC, gnubi communications Limited Partner, LLC, gnubi communications, Inc., Voting Trust created by The Irrevocable Voting Trust Agreement Among Carol Abraham Bolton, Paul Abraham and James Ray Stevens, James Ray Stevens and Daniel J. Ernst dated September 5, 2002 (incorporated by reference to Exhibit 4.30 of EXFO’s Annual Report on Form 20-F dated January 15, 2003, File No. 000-30895).
|
4.28
|
EXFO Protocol Inc. Executive Employment Agreement with Sami Yazdi signed November
2, 2001 (incorporated by reference to Exhibit 4.28 of EXFO’s Annual Report on Form 20-F dated January 15, 2003, File No. 000-30895).
|
4.29
|
Second Amending Agreement to the Employment Agreement of Bruce Bonini dated as of September 1, 2002, (incorporated by reference to Exhibit 4.29 of EXFO’s Annual Report on Form 20-F dated January 15, 2004, File No. 000-30895).
|
4.30
|
Severance and General Release Agreement with Bruce Bonini dated August 8, 2003, (incorporated by reference to Exhibit 4.30 of EXFO’s Annual Report on Form 20-F dated January 15, 2004, File No. 000-30895).
|
4.31
|
Separation Agreement and General Release with Sami Yazdi dated April 1, 2003, (incorporated by reference to Exhibit 4.31 of EXFO’s Annual Report on Form 20-F dated January 15, 2004, File No. 000-30895).
|
4.32
|
Executive Employment Agreement of James Stevens dated as of October 4, 2003, (incorporated by reference to Exhibit 4.32 of EXFO’s Annual Report on Form 20-F dated January 15, 2004, File No. 000-30895).
|
4.33
|
Termination Terms for John Holloran Jr. dated May 28, 2003, (incorporated by reference to Exhibit 4.33 of EXFO’s Annual Report on Form 20-F dated January 15, 2004, File No. 000-30895).
|
4.34
|
Employment Agreement of Pierre Plamondon dated as of September 1, 2002, (incorporated by reference to Exhibit 4.34 of EXFO’s Annual Report on Form 20-F dated January 15, 2004, File No. 000-30895).
|
4.35
|
Long-Term Incentive Plan, dated May 25, 2000, amended in October 2004 and effective January 12, 2005 (incorporated by reference to Exhibit 4.35 of EXFO’s Annual Report on Form 20-F dated November 29, 2005, File No. 000-30895).
|
4.36
|
Deferred Share Unit Plan, effective January 12, 2005 (incorporated by reference to Exhibit 4.36 of EXFO’s Annual Report on Form 20-F dated November 29, 2005, File No. 000-30895).
|
Number
|
Exhibit
|
4.37
|
Asset Purchase Agreement by and Among EXFO Electro-Optical Engineering Inc., Consultronics Limited., Andre Rekai, Consultronics Europe Limited, Consultronics Development Kft. and Consultronics Inc. dated January 5, 2006 (incorporated by reference to Exhibit 4.37 of EXFO’s Annual Report on Form 20-F dated November 23, 2006, File No. 000-30895).
|
4.38
|
Share Repurchase Program by Way of Normal Course Issuer Bid dated November 6, 2007 (incorporated by reference to EXFO’s report on Form 6-K dated November 6, 2007, file No. 000-30895).
|
4.39
|
Share Purchase Agreement by and Among EXFO Electro-Optical Engineering Inc., Navtel Communications Inc. and Vengrowth Investment Fund, BDC Capital Inc. and others, dated March 26, 2008 (incorporated by reference to Exhibit 4.38 of EXFO’s Annual Report on Form 20-F dated November 26, 2008, File No. 000-30895).
|
4.40
|
Agreement and Plan of Merger by and among Gexfo Distribution Internationale Inc., EXFO Service Assurance Inc. and Brix Networks, Inc. and Charles River Ventures, LLC dated April 2, 2008 (incorporated by reference to EXFO’s Material Change Report on Form 6-K dated May 2, 2008, File No. 000-30895).
|
4.41
|
Issuer Tender Offer, Letter of Transmittal and Notice of Guaranteed Delivery dated November 10, 2008 (incorporated by reference as Exhibits (a) (1) (i), (a) (1) (ii) and (a) (1) (iii) to EXFO’s Schedule TO dated November 10, 2008, File No. 000-30895).
|
4.42
|
Renewal of EXFO’s Share Repurchase Program by Way of Normal Course Issuer Bid dated November 6, 2008 (incorporated by reference to EXFO’s report on Form 6-K dated November 6, 2008, file No. 000-30895).
|
4.43
|
Final results of Issuer Bid Tender Offer, dated December 18, 2009 (incorporated by reference to EXFO’s Material Change Report on Form 6-K dated December 19, 2008, file No. 000-30895).
|
4.44
|
Share Transfer Agreement by and among GEXFO Distribution Internationale Inc. and AWS Holding AB (PicoSolve AB) and Patent Transfer Agreement by and among EXFO Electro-Optical Engineering Inc. and Starta Eget Boxen 11629 AB dated February 5, 2009 (incorporated by reference to Exhibit 4.44 of EXFO’s Annual Report on Form 20-F dated November 25, 2009, File No. 000-30895).
|
4.45
|
Renewal of EXFO’s Share Repurchase Program by Way of Normal Course Issuer Bid dated November 10, 2009 (incorporated by reference to EXFO’s report on Form 6-K dated November 6, 2009, file No. 000-30895).
|
4.46
|
Share Purchase Agreement by and among EXFO Finland Oy and NetHawk Oyj’s majority shareholders dated March 12, 2010 (incorporated by reference to EXFO’s Material Change Report on Form 6-K dated March 19, 2010, File No. 000-30895).
|
4.47
|
Share Purchase Agreement by and among EXFO Inc. and Photonic Acquisition Inc. dated October 1, 2010 (incorporated by reference to EXFO’s Material Change Report on Form 6-K dated October 8, 2010, File No. 000-30895).
|
4.48
|
Renewal of EXFO’s Share Repurchase Program by Way of Normal Course Issuer Bid dated November 5, 2010 (incorporated by reference to EXFO’s report on Form 6-K dated November 5, 2010, file No. 000-30895).
|
4.49
|
Renewal of EXFO’s Share Repurchase Program by Way of Normal Course Issuer Bid dated November 7, 2011 (incorporated by reference to EXFO’s report on Form 6-K dated November 7, 2011, file No. 000-30895).
|
4.50
|
Renewal of EXFO’s Share Repurchase Program by Way of Normal Course Issuer Bid dated November 7, 2012 (incorporated by reference to EXFO’s report on Form 6-K dated November 7, 2012, file No. 000-30895).
|
4.51
|
Renewal of EXFO’s Share Repurchase Program by Way
of Normal Course Issuer Bid dated January 8, 2014 (incorporated by reference to EXFO’s report on Form 6-K dated January 9, 2014, file No. 000-30895).
|
8.1
|
Subsidiaries of EXFO (list included in Item 4C of this Annual Report).
|
11.1
|
Code of Ethics for our Principal Executive Officer and Senior Financial Officers (incorporated by reference to Exhibit 11.1 of EXFO’s Annual Report on Form 20-F dated November 24, 2010, File No. 000-30895).
|
11.2
|
Board of Directors Corporate Governance Guidelines (inc
orporated by reference to Exhibit 11.2 of EXFO’s Annual Report on Form 20-F dated November 24, 2010, File No. 000-30895).
|
11.3
|
Ethics and Business Conduct Policy (incorporated by reference to Exhibit 11.3 of EXFO’s Annual Report on Form 20-F dated November 25, 2013, File No. 000-30895).
|
11.4
|
Statement of Reporting Ethical Violations (Whistleblower) (incorporated by reference to Exhibit 11.4 of EXFO’s Annual Report on Form 20-F dated November 25, 2013, File No. 000-30895).
|
11.5
|
Audit Committee Charter.
|
11.6
|
Human Resources Committee Charter.
|
11.7
|
Corporate Governance Practices.
|
11.8
|
Majority Voting Policy (incorporated by reference to Exhibit 11.8 of EXFO’s Annual Report on Form 20-F dated November 23, 2011, File No. 000-30895).
|
11.9
|
Independent Members Committee Charter (incorporated by reference to Exhibit 11.9 of EXFO’s Annual Report on Form 20-F dated November 23, 2011, File No. 000-30895).
|
11.10
|
Agent Code of Conduct (incorporated by reference to Exhibit 11.10 of EXFO’s Annual Report on Form 20-F dated November 25, 2013, File No. 000-30895).
|
11.11
|
Policy Regarding Conflict Minerals (incorporated by reference to Exhibit 11.11 of EXFO’s Annual Report on Form 20-F dated November 25, 2013, File No. 000-30895).
|
11.12
|
Director Share Ownership Policy (incorporated by reference to Exhibit 11.12 of EXFO’s Annual Report on Form 20-F dated November 25, 2013, File No. 000-30895).
|
12.1
|
Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
12.2
|
Certification of the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
13.1
|
Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
13.2
|
Certification of the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
As at August 31,
|
||||||||
2014
|
2013
|
|||||||
Assets
|
||||||||
Current assets
|
||||||||
Cash
|
$ | 54,121 | $ | 45,386 | ||||
Short-term investments (note 5)
|
5,726 | 4,868 | ||||||
Accounts receivable (note 5)
|
||||||||
Trade
|
46,031 | 50,117 | ||||||
Other
|
2,001 | 2,778 | ||||||
Income taxes and tax credits recoverable (note 18)
|
3,796 | 6,525 | ||||||
Inventories (note 6)
|
35,232 | 35,705 | ||||||
Prepaid expenses
|
2,281 | 2,561 | ||||||
149,188 | 147,940 | |||||||
Tax credits recoverable
(note 18)
|
41,745 | 41,719 | ||||||
Property, plant and equipment
(notes 7 and 20)
|
42,780 | 45,523 | ||||||
Intangible assets
(notes 8 and 20)
|
7,293 | 7,543 | ||||||
Goodwill
(notes 8 and 20)
|
26,488 | 27,313 | ||||||
Deferred income tax assets
(note 18)
|
9,816 | 10,807 | ||||||
Other assets
|
721 | 693 | ||||||
$ | 278,031 | $ | 281,538 | |||||
Liabilities
|
||||||||
Current liabilities
|
||||||||
Accounts payable and accrued liabilities (note 10)
|
$ | 29,553 | $ | 26,253 | ||||
Provisions (note 10)
|
532 | 756 | ||||||
Income taxes payable
|
840 | 679 | ||||||
Current portion of long-term debt
|
‒
|
296 | ||||||
Deferred revenue
|
8,990 | 9,467 | ||||||
39,915 | 37,451 | |||||||
Deferred revenue
|
3,319 | 3,932 | ||||||
Deferred income tax liabilities
(note 18)
|
3,087 | 3,226 | ||||||
Other liabilities
|
340 | 477 | ||||||
46,661 | 45,086 | |||||||
Commitments
(note 11)
|
||||||||
Shareholders’ equity
|
||||||||
Share capital (note 12)
|
111,491 | 109,837 | ||||||
Contributed surplus
|
16,503 | 17,186 | ||||||
Retained earnings
|
113,635 | 112,852 | ||||||
Accumulated other comprehensive loss (note 13)
|
(10,259 | ) | (3,423 | ) | ||||
231,370 | 236,452 | |||||||
$ | 278,031 | $ | 281,538 |
On behalf of the Board | |
/s/ Germain Lamonde | /s/ Claude Séguin |
GERMAIN LAMONDE | CLAUDE SÉGUIN |
Chairman, President and CEO | Chairman, Audit Committee |
Years ended August 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Sales
(note 20)
|
$ | 230,806 | $ | 242,150 | $ | 249,966 | ||||||
Cost of sales
(1)
(note 16)
|
86,836 | 92,469 | 91,792 | |||||||||
Selling and administrative (note 16)
|
86,429 | 88,756 | 94,139 | |||||||||
Net research and development
(note 16)
|
44,846 | 45,444 | 49,854 | |||||||||
Depreciation of property, plant and equipment (note 16)
|
4,995 | 6,028 | 6,169 | |||||||||
Amortization of intangible assets (note 16)
|
4,398 | 6,643 | 7,819 | |||||||||
Changes in fair value of cash contingent consideration
|
– | – | (311 | ) | ||||||||
Interest and other income
|
(326 | ) | (113 | ) | (131 | ) | ||||||
Foreign exchange (gain) loss
|
(1,634 | ) | (4,082 | ) | 657 | |||||||
Earnings (loss) before income taxes
|
5,262 | 7,005 | (22 | ) | ||||||||
Income taxes
(note 18)
|
4,479 | 5,664 | 3,571 | |||||||||
Net earnings (loss) for the year
|
$ | 783 | $ | 1,341 | $ | (3,593 | ) | |||||
Basic and diluted net earnings (loss) per share
|
$ | 0.01 | $ | 0.02 | $ | (0.06 | ) | |||||
Basic weighted average number of shares outstanding (000’s)
|
60,329 | 60,323 | 60,453 | |||||||||
Diluted weighted average number of shares outstanding (000’s)
(note 19)
|
61,015 | 61,110 | 60,453 |
Years ended August 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Net earnings (loss) for the year
|
$ | 783 | $ | 1,341 | $ | (3,593 | ) | |||||
Other comprehensive income (loss), net of income taxes
|
||||||||||||
Items that will not be reclassified subsequently to net earnings
|
||||||||||||
Foreign currency translation adjustment
|
(7,086 | ) | (15,830 | ) | (6,875 | ) | ||||||
Items that may be reclassified subsequently to net earnings
|
||||||||||||
Unrealized gains/losses on forward exchange contracts
|
(618 | ) | (1,256 | ) | 185 | |||||||
Reclassification of realized gains/losses on forward exchange contracts in net earnings (loss)
|
959 | (247 | ) | (1,108 | ) | |||||||
Deferred income tax effect of gains/losses on forward exchange contracts
|
(91 | ) | 403 | 256 | ||||||||
Other comprehensive loss
|
(6,836 | ) | (16,930 | ) | (7,542 | ) | ||||||
Comprehensive loss for the year
|
$ | (6,053 | ) | $ | (15,589 | ) | $ | (11,135 | ) |
Year ended August 31, 2012
|
||||||||||||||||||||
Share
capital
|
Contributed surplus
|
Retained earnings
|
Accumulated other comprehensive income
|
Total
shareholders’ equity
|
||||||||||||||||
Balance as at September 1, 2011
|
$ | 110,341 | $ | 18,017 | $ | 115,104 | $ | 21,049 | $ | 264,511 | ||||||||||
Exercise of stock options (note 12)
|
310 | – | – | – | 310 | |||||||||||||||
Redemption of share capital (note 12)
|
(1,696 | ) | (540 | ) | – | – | (2,236 | ) | ||||||||||||
Reclassification of stock-based compensation costs (note 12)
|
2,010 | (2,010 | ) | – | – | – | ||||||||||||||
Stock-based compensation costs
|
– | 1,831 | – | – | 1,831 | |||||||||||||||
Net loss for the year
|
– | – | (3,593 | ) | – | (3,593 | ) | |||||||||||||
Other comprehensive loss
|
||||||||||||||||||||
Foreign currency translation adjustment
|
– | – | – | (6,875 | ) | (6,875 | ) | |||||||||||||
Changes in unrealized gains on forward exchange contracts, net of deferred income taxes of $256
|
– | – | – | (667 | ) | (667 | ) | |||||||||||||
Total comprehensive loss for the year
|
– | – | (3,593 | ) | (7,542 | ) | (11,135 | ) | ||||||||||||
Balance as at August 31, 2012
|
$ | 110,965 | $ | 17,298 | $ | 111,511 | $ | 13,507 | $ | 253,281 |
Year ended August 31, 2013
|
||||||||||||||||||||
Share
capital
|
Contributed surplus
|
Retained earnings
|
Accumulated other comprehensive income (loss)
|
Total
shareholders’ equity
|
||||||||||||||||
Balance as at September 1, 2012
|
$ | 110,965 | $ | 17,298 | $ | 111,511 | $ | 13,507 | $ | 253,281 | ||||||||||
Exercise of stock options (note 12)
|
87 | – | – | – | 87 | |||||||||||||||
Redemption of share capital (note 12)
|
(2,565 | ) | (531 | ) | – | – | (3,096 | ) | ||||||||||||
Reclassification of stock-based compensation costs (note 12)
|
1,350 | (1,350 | ) | – | – | – | ||||||||||||||
Stock-based compensation costs
|
– | 1,769 | – | – | 1,769 | |||||||||||||||
Net earnings for the year
|
– | – | 1,341 | – | 1,341 | |||||||||||||||
Other comprehensive loss
|
||||||||||||||||||||
Foreign currency translation adjustment
|
– | – | – | (15,830 | ) | (15,830 | ) | |||||||||||||
Changes in unrealized gains/losses on forward exchange contracts, net of deferred income taxes of $403
|
– | – | – | (1,100 | ) | (1,100 | ) | |||||||||||||
Total comprehensive income (loss) for the year
|
– | – | 1,341 | (16,930 | ) | (15,589 | ) | |||||||||||||
Balance as at August 31, 2013
|
$ | 109,837 | $ | 17,186 | $ | 112,852 | $ | (3,423 | ) | $ | 236,452 |
Year ended August 31, 2014
|
||||||||||||||||||||
Share
capital
|
Contributed surplus
|
Retained earnings
|
Accumulated other comprehensive loss
|
Total
shareholders’ equity
|
||||||||||||||||
Balance as at September 1, 2013
|
$ | 109,837 | $ | 17,186 | $ | 112,852 | $ | (3,423 | ) | $ | 236,452 | |||||||||
Exercise of stock options (note 12)
|
225 | – | – | – | 225 | |||||||||||||||
Redemption of share capital (note 12)
|
(831 | ) | (106 | ) | – | – | (937 | ) | ||||||||||||
Reclassification of stock-based compensation costs (note 12)
|
2,260 | (2,260 | ) | – | – | – | ||||||||||||||
Stock-based compensation costs
|
– | 1,683 | – | – | 1,683 | |||||||||||||||
Net earnings for the year
|
– | – | 783 | – | 783 | |||||||||||||||
Other comprehensive income (loss)
|
||||||||||||||||||||
Foreign currency translation adjustment
|
– | – | – | (7,086 | ) | (7,086 | ) | |||||||||||||
Changes in unrealized losses on forward exchange contracts, net of deferred income taxes of $91
|
– | – | – | 250 | 250 | |||||||||||||||
Total comprehensive income (loss) for the year
|
– | – | 783 | (6,836 | ) | (6,053 | ) | |||||||||||||
Balance as at August 31, 2014
|
$ | 111,491 | $ | 16,503 | $ | 113,635 | $ | (10,259 | ) | $ | 231,370 |
Years ended August 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Cash flows from operating activities
|
||||||||||||
Net earnings (loss) for the year
|
$ | 783 | $ | 1,341 | $ | (3,593 | ) | |||||
Add (deduct) items not affecting cash
|
||||||||||||
Changes in discount on short-term investments
|
– | – | 45 | |||||||||
Stock-based compensation costs
|
1,696 | 1,768 | 1,862 | |||||||||
Depreciation and amortization
|
9,393 | 12,671 | 13,988 | |||||||||
Changes in fair value of cash contingent consideration
|
– | – | (311 | ) | ||||||||
Deferred revenue
|
(804 | ) | (1,266 | ) | (506 | ) | ||||||
Deferred income taxes
|
891 | 2,951 | 2,050 | |||||||||
Changes in foreign exchange gain/loss
|
(491 | ) | (1,091 | ) | (1,510 | ) | ||||||
11,468 | 16,374 | 12,025 | ||||||||||
Changes in non-cash operating items
|
||||||||||||
Accounts receivable
|
3,578 | (14,765 | ) | 7,974 | ||||||||
Income taxes and tax credits
|
1,447 | (4,205 | ) | (5,570 | ) | |||||||
Inventories
|
(734 | ) | 2,916 | 10,879 | ||||||||
Prepaid expenses
|
210 | 993 | (589 | ) | ||||||||
Other assets
|
92 | (703 | ) | – | ||||||||
Accounts payable and accrued liabilities and provisions
|
3,832 | (2,373 | ) | 643 | ||||||||
Other liabilities
|
(107 | ) | (258 | ) | (105 | ) | ||||||
19,786 | (2,021 | ) | 25,257 | |||||||||
Cash flows from investing activities
|
||||||||||||
Additions to short-term investments
|
(34,222 | ) | (54,489 | ) | (115,886 | ) | ||||||
Proceeds from disposal and maturity of short-term investments
|
33,208 | 57,514 | 152,797 | |||||||||
Additions to capital assets (notes 7 and 8)
|
(7,931 | ) | (8,026 | ) | (23,849 | ) | ||||||
(8,945 | ) | (5,001 | ) | 13,062 | ||||||||
Cash flows from financing activities
|
||||||||||||
Bank loan
|
– | – | (782 | ) | ||||||||
Repayment of long-term debt
|
(307 | ) | (589 | ) | (577 | ) | ||||||
Exercise of stock options
|
225 | 87 | 310 | |||||||||
Redemption of share capital
|
(937 | ) | (3,096 | ) | (2,236 | ) | ||||||
(1,019 | ) | (3,598 | ) | (3,285 | ) | |||||||
Effect of foreign exchange rate changes on cash
|
(1,087 | ) | (2,862 | ) | 1,063 | |||||||
Change in cash
|
8,735 | (13,482 | ) | 36,097 | ||||||||
Cash – Beginning of year
|
45,386 | 58,868 | 22,771 | |||||||||
Cash – End of year
|
$ | 54,121 | $ | 45,386 | $ | 58,868 | ||||||
Supplementary information
|
||||||||||||
Interest received
|
$ | 550 | $ | 668 | $ | 591 | ||||||
Interest paid
|
$ | 16 | $ | 37 | $ | 76 | ||||||
Income taxes paid
|
$ | 1,272 | $ | 1,373 | $ | 1,494 |
1 | Nature of Activities and Incorporation |
2 | Basis of Presentation |
a)
|
Foreign currency transactions
|
b)
|
Foreign operations
|
Cash
|
Loans and receivables
|
|
Short-term investments
|
Available for sale
|
|
Accounts receivable
|
Loans and receivables
|
|
Other assets
|
Loans and receivables
|
Accounts payable and accrued liabilities
|
Other financial liabilities
|
|
Long-term debt
|
Other financial liabilities
|
|
Level 1:
|
Quoted prices (unadjusted) in active market for identical assets or liabilities;
|
|
Level 2:
|
Inputs other than quoted prices included within level 1 that are observable for the asset and liability, either directly or indirectly;
|
|
Level 3:
|
Unobservable inputs for the asset or liability.
|
Term
|
||
Land improvements
|
15 years
|
|
Buildings
|
20 to 60 years
|
|
Equipment
|
3 to 15 years
|
|
Leasehold improvements
|
The lesser of useful life and remaining lease term
|
a)
|
Determination of functional currency
|
b)
|
Determination of cash generating units and allocation of goodwill
|
a)
|
Inventories
|
b)
|
Income taxes
|
c)
|
Tax credits recoverable
|
d)
|
Impairment of non-financial assets
|
i)
|
Growth rates
|
ii)
|
Discount rate
|
3 | Restructuring Charges |
4 | Capital Disclosures |
|
●
|
To maintain a flexible capital structure that optimizes the cost of capital at acceptable risk;
|
|
●
|
To sustain future development of the company, including research and development activities, market development and potential acquisitions of complementary businesses or products; and
|
|
●
|
To provide the company’s shareholders with an appropriate return on their investment.
|
5 | Financial Instruments |
As at August 31, 2014
|
||||||||||||||||||||
Loans and receivable
|
Available
for sale
|
Other
financial
liabilities
|
Derivatives
used for
hedging
|
Total
|
||||||||||||||||
Financial assets
|
||||||||||||||||||||
Cash
|
$ | 54,121 | $ | – | $ | – | $ | – | $ | 54,121 | ||||||||||
Short-term investments
|
$ | – | $ | 5,726 | $ | – | $ | – | $ | 5,726 | ||||||||||
Accounts receivable
|
$ | 47,981 | $ | – | $ | – | $ | – | $ | 47,981 | ||||||||||
Other assets
|
$ | 114 | $ | – | $ | – | $ | – | $ | 114 | ||||||||||
Forward exchange contracts
|
$ | – | $ | – | $ | – | $ | 193 | $ | 193 | ||||||||||
Financial liabilities
|
||||||||||||||||||||
Accounts payable and accrued liabilities
|
$ | – | $ | – | $ | 28,990 | $ | – | $ | 28,990 | ||||||||||
Forward exchange contracts
|
$ | – | $ | – | $ | – | $ | 690 | $ | 690 |
As at August 31, 2013
|
||||||||||||||||||||
Loans and receivable
|
Available
for sale
|
Other
financial
liabilities
|
Derivatives
used for
hedging
|
Total
|
||||||||||||||||
Financial assets
|
||||||||||||||||||||
Cash
|
$ | 45,386 | $ | – | $ | – | $ | – | $ | 45,386 | ||||||||||
Short-term investments
|
$ | – | $ | 4,868 | $ | – | $ | – | $ | 4,868 | ||||||||||
Accounts receivable
|
$ | 52,895 | $ | – | $ | – | $ | – | $ | 52,895 | ||||||||||
Other assets
|
$ | 167 | $ | – | $ | – | $ | – | $ | 167 | ||||||||||
Financial liabilities
|
||||||||||||||||||||
Accounts payable and accrued liabilities
|
$ | – | $ | – | $ | 25,679 | $ | – | $ | 25,679 | ||||||||||
Forward exchange contracts
|
$ | – | $ | – | $ | – | $ | 722 | $ | 722 | ||||||||||
Long-term debt
|
$ | – | $ | – | $ | 296 | $ | – | $ | 296 |
As at August 31, 2014
|
As at August 31, 2013
|
|||||||||||||||
Level 1
|
Level 2
|
Level 1
|
Level 2
|
|||||||||||||
Financial assets
|
||||||||||||||||
Short-term investments
|
$ | 5,726 | $ | – | $ | 4,868 | $ | – | ||||||||
Forward exchange contracts
|
$ | – | $ | 193 | $ | – | $ | – | ||||||||
Financial liabilities
|
||||||||||||||||
Forward exchange contracts
|
$ | – | $ | 690 | $ | – | $ | 808 |
Expiry dates
|
Contractual
amounts
|
Weighted average
contractual forward rates
|
|||||||
As at August 31, 2013
|
|||||||||
September 2013 to August 2014
|
$ | 22,200 | 1.0280 | ||||||
September 2014 to August 2015
|
15,000 | 1.0529 | |||||||
September 2015 to August 2016
|
5,000 | 1.0716 | |||||||
Total
|
$ | 42,200 | 1.0420 | ||||||
As at August 31, 2014
|
|||||||||
September 2014 to August 2015
|
$ | 22,200 | 1.0666 | ||||||
September 2015 to August 2016
|
13,400 | 1.0923 | |||||||
September 2016 to December 2016
|
3,400 | 1.1063 | |||||||
Total
|
$ | 39,000 | 1.0789 |
Expiry dates
|
Contractual
amounts
|
Weighted average
contractual forward rates
|
|||||||
As at August 31, 2014
|
|||||||||
September 2014 to August 2015
|
$ | 2,800 | 62.11 |
As at August 31,
|
||||||||||||||||
2014
|
2013
|
|||||||||||||||
Carrying/nominal
amount (in thousands
of US dollars)
|
Carrying/nominal
amount (in thousands
of euros)
|
Carrying/nominal
amount (in thousands
of US dollars)
|
Carrying/nominal
amount (in thousands
of euros)
|
|||||||||||||
Financial assets
|
||||||||||||||||
Cash
|
$ | 15,382 | € | 3,353 | $ | 9,728 | € | 2,106 | ||||||||
Accounts receivable
|
33,127 | 6,325 | 33,191 | 5,284 | ||||||||||||
48,509 | 9,678 | 42,919 | 7,390 | |||||||||||||
Financial liabilities
|
||||||||||||||||
Accounts payable and accrued liabilities
|
10,824 | 880 | 10,355 | 1,075 | ||||||||||||
Forward exchange contracts (nominal value)
|
3,800 | – | 3,800 | – | ||||||||||||
14,624 | 880 | 14,155 | 1,075 | |||||||||||||
Net exposure
|
$ | 33,885 | € | 8,798 | $ | 28,764 | € | 6,315 |
|
●
|
An increase (decrease) of 10% in the period-end value of the Canadian dollar compared to the US dollar would decrease (increase) net earnings by $2,702,000, or $0.04 per diluted share, and $3,001,000, or $0.05 per diluted share, as at August 31, 2013 and 2014 respectively.
|
|
●
|
An increase (decrease) of 10% in the period-end value of the Canadian dollar compared to the euro would decrease (increase) net earnings by $870,000, or $0.01 per diluted share, and $1,142,000 or $0.02 per diluted share, as at August 31, 2013 and 2014 respectively.
|
|
●
|
An increase (decrease) of 10% in the period-end value of the Canadian dollar compared to the US dollar would increase (decrease) comprehensive income by $2,951,000 and $2,617,000 as at August 31, 2013 and 2014 respectively.
|
As at August 31
|
||||||||
2014
|
2013
|
|||||||
Bankers acceptance denominated in Canadian dollars, bearing interest at an annual rate of 1.1%, maturing in September 2014
|
$ | 4,730 | $ | – | ||||
Term deposits denominated in Indian rupees, bearing interest at an annual rate of 9.0%, maturing in December 2014 and January 2015
|
569 | – | ||||||
Term deposits denominated in Indian rupees, bearing interest at an annual rate of 8.0%, maturing between September 2014 and May 2015 (note 9)
|
427 | – | ||||||
Commercial paper denominated in Canadian dollars, bearing interest at an annual rate of 1.2%, matured in October 2013
|
– | 4,868 | ||||||
$ | 5,726 | $ | 4,868 |
As at August 31,
|
||||||||
2014
|
2013
|
|||||||
Current
|
$ | 36,700 | $ | 41,557 | ||||
Past due, 0 to 30 days
|
5,508 | 6,210 | ||||||
Past due, 31 to 60 days
|
1,372 | 2,088 | ||||||
Past due, more than 60 days, net of allowance for doubtful accounts of $766 and $396 as at August 31, 2013 and 2014, respectively
|
2,451 | 262 | ||||||
$ | 46,031 | $ | 50,117 |
Years ended August 31,
|
||||||||
2014
|
2013
|
|||||||
Balance – Beginning of year
|
$ | 766 | $ | 583 | ||||
Addition charged to earnings
|
210 | 323 | ||||||
Write-off of uncollectible accounts
|
(580 | ) | (140 | ) | ||||
Balance – End of year
|
$ | 396 | $ | 766 |
As at August 31, 2014
|
||||||||||||
0-12
months
|
13-24
months
|
25-36
months
|
||||||||||
Accounts payable and accrued liabilities
|
$ | 28,990 | $ | – | $ | – | ||||||
Forward exchange contracts
|
||||||||||||
Outflow
|
25,000 | 13,400 | 3,400 | |||||||||
Inflow
|
(24,675 | ) | (13,480 | ) | (3,464 | ) | ||||||
Total
|
$ | 29,315 | $ | (80 | ) | $ | (64 | ) |
As at August 31, 2013
|
||||||||||||
0-12
months
|
13-24
months
|
25-36
months
|
||||||||||
Accounts payable and accrued liabilities
|
$ | 25,679 | $ | – | $ | – | ||||||
Long-term debt
|
296 | – | – | |||||||||
Forward exchange contracts
|
||||||||||||
Outflow
|
22,200 | 15,000 | 5,000 | |||||||||
Inflow
|
(21,673 | ) | (14,999 | ) | (5,088 | ) | ||||||
Total
|
$ | 26,502 | $ | 1 | $ | (88 | ) |
6 | Inventories |
As at August 31,
|
||||||||
2014
|
2013
|
|||||||
Raw materials
|
$ | 16,464 | $ | 16,645 | ||||
Work in progress
|
1,100 | 1,179 | ||||||
Finished goods
|
17,668 | 17,881 | ||||||
$ | 35,232 | $ | 35,705 |
7 | Property, Plant and Equipment |
Land and land improvements
|
Buildings
|
Equipment
|
Leasehold improvements
|
Total
|
||||||||||||||||
Cost as at September 1, 2012
|
$ | 5,585 | $ | 38,355 | $ | 47,962 | $ | 2,367 | $ | 94,269 | ||||||||||
Additions
|
5 | 866 | 3,824 | 167 | 4,862 | |||||||||||||||
Disposals
|
– | – | (6,569 | ) | – | (6,569 | ) | |||||||||||||
Foreign currency translation adjustment
|
(358 | ) | (2,439 | ) | (2,661 | ) | (171 | ) | (5,629 | ) | ||||||||||
Cost as at August 31, 2013
|
5,232 | 36,782 | 42,556 | 2,363 | 86,933 | |||||||||||||||
Additions
|
148 | 18 | 3,550 | 164 | 3,880 | |||||||||||||||
Disposals
|
– | – | (5,799 | ) | (34 | ) | (5,833 | ) | ||||||||||||
Foreign currency translation adjustment
|
(158 | ) | (1,203 | ) | (1,337 | ) | (51 | ) | (2,749 | ) | ||||||||||
Cost as at August 31, 2014
|
$ | 5,222 | $ | 35,597 | $ | 38,970 | $ | 2,442 | $ | 82,231 | ||||||||||
Accumulated depreciation as at September 1, 2012
|
$ | 1,317 | $ | 6,242 | $ | 36,171 | $ | 691 | $ | 44,421 | ||||||||||
Depreciation for the year
|
62 | 664 | 4,935 | 367 | 6,028 | |||||||||||||||
Disposals
|
– | – | (6,423 | ) | – | (6,423 | ) | |||||||||||||
Foreign currency translation adjustment
|
(71 | ) | (437 | ) | (2,033 | ) | (75 | ) | (2,616 | ) | ||||||||||
Accumulated depreciation as at August 31, 2013
|
1,308 | 6,469 | 32,650 | 983 | 41,410 | |||||||||||||||
Depreciation for the year
|
58 | 697 | 3,891 | 349 | 4,995 | |||||||||||||||
Disposals
|
– | – | (5,633 | ) | (40 | ) | (5,673 | ) | ||||||||||||
Foreign currency translation adjustment
|
(39 | ) | (182 | ) | (1,020 | ) | (40 | ) | (1,281 | ) | ||||||||||
Accumulated depreciation as at August 31, 2014
|
$ | 1,327 | $ | 6,984 | $ | 29,888 | $ | 1,252 | $ | 39,451 | ||||||||||
Net carrying value as at:
|
||||||||||||||||||||
August 31, 2013
|
$ | 3,924 | $ | 30,313 | $ | 9,906 | $ | 1,380 | $ | 45,523 | ||||||||||
August 31, 2014
|
$ | 3,895 | $ | 28,613 | $ | 9,082 | $ | 1,190 | $ | 42,780 |
8 | Intangible Assets and Goodwill |
Core technology
|
Customer relationships
|
Brand name
|
Software
|
Total
|
||||||||||||||||
Cost as at September 1, 2012
|
$ | 26,077 | $ | 6,582 | $ | 656 | $ | 14,069 | $ | 47,384 | ||||||||||
Additions
|
145 |
‒
|
‒
|
515 | 660 | |||||||||||||||
Disposals
|
‒
|
‒
|
‒
|
(66 | ) | (66 | ) | |||||||||||||
Foreign currency translation adjustment
|
(1,349 | ) | (416 | ) | (42 | ) | (1,509 | ) | (3,316 | ) | ||||||||||
Cost as at August 31, 2013
|
24,873 | 6,166 | 614 | 13,009 | 44,662 | |||||||||||||||
Additions
|
3,582 |
‒
|
‒
|
754 | 4,336 | |||||||||||||||
Disposals
|
(15,281 | ) |
‒
|
‒
|
(193 | ) | (15,474 | ) | ||||||||||||
Foreign currency translation adjustment
|
(488 | ) | (187 | ) | (18 | ) | (645 | ) | (1,338 | ) | ||||||||||
Cost as at August 31, 2014
|
$ | 12,686 | $ | 5,979 | $ | 596 | $ | 12,925 | $ | 32,186 | ||||||||||
Accumulated amortization as at September 1, 2012
|
$ | 19,122 | $ | 3,252 | $ | 324 | $ | 10,554 | $ | 33,252 | ||||||||||
Amortization for the year
|
4,068 | 1,285 | 128 | 1,162 | 6,643 | |||||||||||||||
Disposals
|
‒
|
‒
|
‒
|
(51 | ) | (51 | ) | |||||||||||||
Foreign currency translation adjustment
|
(1,334 | ) | (258 | ) | (26 | ) | (1,107 | ) | (2,725 | ) | ||||||||||
Accumulated amortization as at August 31, 2013
|
21,856 | 4,279 | 426 | 10,558 | 37,119 | |||||||||||||||
Amortization for the year
|
2,046 | 1,204 | 120 | 1,028 | 4,398 | |||||||||||||||
Disposals
|
(15,281 | ) |
‒
|
‒
|
(193 | ) | (15,474 | ) | ||||||||||||
Foreign currency translation adjustment
|
(559 | ) | (137 | ) | (12 | ) | (442 | ) | (1,150 | ) | ||||||||||
Accumulated amortization as at August 31, 2014
|
$ | 8,062 | $ | 5,346 | $ | 534 | $ | 10,951 | $ | 24,893 | ||||||||||
Net carrying value as at:
|
||||||||||||||||||||
August 31, 2013
|
$ | 3,017 | $ | 1,887 | $ | 188 | $ | 2,451 | $ | 7,543 | ||||||||||
August 31, 2014
|
$ | 4,624 | $ | 633 | $ | 62 | $ | 1,974 | $ | 7,293 | ||||||||||
Remaining amortization period as at August 31, 2014
|
4 years
|
1 year
|
1 year
|
2 years
|
Years ended August 31,
|
||||||||
2014
|
2013
|
|||||||
Balance – Beginning of year
|
$ | 27,313 | $ | 29,160 | ||||
Foreign currency translation adjustment
|
(825 | ) | (1,847 | ) | ||||
Balance – End of year
|
$ | 26,488 | $ | 27,313 |
As at August 31,
|
||||||||
2014
|
2013
|
|||||||
EXFO CGU
|
$ | 10,465 | $ | 10,791 | ||||
Brix CGU
|
16,023 | 16,522 | ||||||
Total
|
$ | 26,488 | $ | 27,313 |
9 | Credit Facilities |
10 | Accounts Payable and Accrued Liabilities and Provisions |
As at August 31,
|
||||||||
2014
|
2013
|
|||||||
Trade
|
$ | 11,848 | $ | 10,002 | ||||
Salaries and social benefits
|
13,353 | 12,883 | ||||||
Forward exchange contracts (note 5)
|
563 | 574 | ||||||
Other
|
3,789 | 2,794 | ||||||
$ | 29,553 | $ | 26,253 |
As at August 31,
|
||||||||
2014
|
2013
|
|||||||
Warranty
|
$ | 500 | $ | 721 | ||||
Other
|
32 | 35 | ||||||
$ | 532 | $ | 756 |
Years ended August 31,
|
||||||||
2014
|
2013
|
|||||||
Balance – Beginning of year
|
$ | 721 | $ | 675 | ||||
Provision
|
513 | 650 | ||||||
Settlements
|
(734 | ) | (604 | ) | ||||
Balance – End of year
|
$ | 500 | $ | 721 |
11 | Commitments |
As at August 31
|
||||||||
2014
|
2013
|
|||||||
No later than 1 year
|
$ | 2,390 | $ | 2,514 | ||||
Later than 1 year and no later than 5 years
|
1,993 | 3,479 | ||||||
Later than 5 years
|
398 | 517 | ||||||
$ | 4,781 | $ | 6,510 |
12 | Share Capital |
Authorized – unlimited as to number, without par value
|
|
Subordinate voting and participating, bearing a non-cumulative dividend to be determined by the Board of Directors, ranking
pari passu
with multiple voting shares
|
|
Multiple voting and participating, entitling to 10 votes each, bearing a non-cumulative dividend to be determined by the Board of Directors, convertible at the holder’s option into subordinate voting shares on a one-for-one basis, ranking
pari passu
with subordinate voting shares
|
Multiple voting shares
|
Subordinate voting shares
|
|||||||||||||||||||
Number
|
Amount
|
Number
|
Amount
|
Total amount
|
||||||||||||||||
Balance as at September 1, 2011
|
31,643,000 | $ | 1 | 28,621,999 | $ | 110,340 | $ | 110,341 | ||||||||||||
Exercise of stock options (note 14)
|
– | – | 109,700 | 310 | 310 | |||||||||||||||
Redemption of restricted share units (note 14)
|
– | – | 418,086 | – | – | |||||||||||||||
Redemption of share capital
|
– | – | (438,894 | ) | (1,696 | ) | (1,696 | ) | ||||||||||||
Reclassification of stock-based compensation costs to share capital upon exercise of stock awards
|
– | – | – | 2,010 | 2,010 | |||||||||||||||
Balance as at August 31, 2012
|
31,643,000 | 1 | 28,710,891 | 110,964 | 110,965 | |||||||||||||||
Exercise of stock options (note 14)
|
– | – | 30,675 | 87 | 87 | |||||||||||||||
Redemption of restricted share units (note 14)
|
– | – | 286,426 | – | – | |||||||||||||||
Redemption of deferred share units (note 14)
|
– | – | 37,054 | – | – | |||||||||||||||
Redemption of share capital
|
– | – | (663,256 | ) | (2,565 | ) | (2,565 | ) | ||||||||||||
Reclassification of stock-based compensation costs to share capital upon exercise of stock awards
|
– | – | – | 1,350 | 1,350 | |||||||||||||||
Balance as at August 31, 2013
|
31,643,000 | 1 | 28,401,790 | 109,836 | 109,837 | |||||||||||||||
Exercise of stock options (note 14)
|
– | – | 52,800 | 225 | 225 | |||||||||||||||
Redemption of restricted share units (note 14)
|
– | – | 425,620 | – | – | |||||||||||||||
Redemption of deferred share units (note 14)
|
– | – | 38,010 | – | – | |||||||||||||||
Redemption of share capital
|
– | – | (214,470 | ) | (831 | ) | (831 | ) | ||||||||||||
Reclassification of stock-based compensation costs to share capital upon exercise of stock awards
|
– | – | – | 2,260 | 2,260 | |||||||||||||||
Balance as at August 31, 2014
|
31,643,000 | $ | 1 | 28,703,750 | $ | 111,490 | $ | 111,491 |
a)
|
On November 7, 2012, the company announced that its Board of Directors had approved the renewal of its share repurchase program, by way of a normal course issuer bid on the open market of up to 10% of its issued and outstanding subordinate voting shares, representing 2,072,721 subordinate voting shares at the prevailing market price. The normal course issuer bid started on November 12, 2012, and ended on November 11, 2013. All shares repurchased under the bid were cancelled.
|
b)
|
On January 8, 2014, the company announced that its Board of Directors had approved the renewal of its share repurchase program, by way of a normal course issuer bid on the open market of up to 10% of the issued and outstanding subordinate voting shares, representing 2,043,101 subordinate voting shares at the prevailing market price. The normal course issuer bid started on January 13, 2014, and will end on January 12, 2015. All shares repurchased under the bid are cancelled.
|
13 | Accumulated Other Comprehensive Income (loss) |
Foreign currency translation adjustment
|
Cash-flow
hedge
|
Accumulate other comprehensive income (loss)
|
||||||||||
Balance as at September 1, 2011
|
$ | 19,123 | $ | 1,926 | $ | 21,049 | ||||||
Foreign currency translation adjustment
|
(6,875 | ) | – | (6,875 | ) | |||||||
Changes in unrealized gains on forward exchange contracts, net of deferred income taxes
|
– | (667 | ) | (667 | ) | |||||||
Balance as at August 31, 2012
|
12,248 | 1,259 | 13,507 | |||||||||
Foreign currency translation adjustment
|
(15,830 | ) | – | (15,830 | ) | |||||||
Changes in unrealized gains/losses on forward exchange contracts, net of deferred income taxes
|
– | (1,100 | ) | (1,100 | ) | |||||||
Balance as at August 31, 2013
|
(3,582 | ) | 159 | (3,423 | ) | |||||||
Foreign currency translation adjustment
|
(7,086 | ) | – | (7,086 | ) | |||||||
Changes in unrealized losses on forward exchange contracts, net of deferred income taxes
|
– | 250 | 250 | |||||||||
Balance as at August 31, 2014
|
$ | (10,668 | ) | $ | 409 | $ | (10,259 | ) |
14 | Stock-Based Compensation Plans |
Years ended August 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Stock-based compensation costs arising from
equity-settled awards
|
$ | 1,683 | $ | 1,769 | $ | 1,831 | ||||||
Stock-based compensation costs arising from
cash-settled awards
|
13 | (1 | ) | 31 | ||||||||
$ | 1,696 | $ | 1,768 | $ | 1,862 |
Years ended August 31,
|
||||||||||||||||||||||||
2014
|
2013
|
2012
|
||||||||||||||||||||||
Number
|
Weighted
average
exercise
price
|
Number
|
Weighted average
exercise
price
|
Number
|
Weighted average
exercise
price
|
|||||||||||||||||||
(CA$)
|
(CA$)
|
(CA$)
|
||||||||||||||||||||||
Outstanding – Beginning of year
|
201,254 | $ | 6 | 244,354 | $ | 5 | 641,357 | $ | 9 | |||||||||||||||
Exercised
|
(52,800 | ) | 5 | (30,675 | ) | 3 | (109,700 | ) | 3 | |||||||||||||||
Forfeited
|
(4,500 | ) | 6 | (2,000 | ) | 6 | (1,500 | ) | 5 | |||||||||||||||
Expired
|
(56,500 | ) | 6 | (10,425 | ) | 5 | (285,803 | ) | 15 | |||||||||||||||
Outstanding – End of year
|
87,454 | $ | 6 | 201,254 | $ | 6 | 244,354 | $ | 5 | |||||||||||||||
Exercisable – End of year
|
87,454 | $ | 6 | 201,254 | $ | 6 | 244,354 | $ | 5 |
Years ended August 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Outstanding – Beginning of year
|
1,333,092 | 1,337,730 | 1,551,658 | |||||||||
Granted
|
336,685 | 316,160 | 334,878 | |||||||||
Redeemed
|
(425,620 | ) | (286,426 | ) | (418,086 | ) | ||||||
Forfeited
|
(19,022 | ) | (34,372 | ) | (130,720 | ) | ||||||
Outstanding – End of year
|
1,225,135 | 1,333,092 | 1,337,730 |
Years ended August 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Outstanding – Beginning of year
|
119,908 | 133,090 | 110,298 | |||||||||
Granted
|
35,803 | 23,872 | 22,792 | |||||||||
Redeemed
|
(38,010 | ) | (37,054 | ) | – | |||||||
Outstanding – End of year
|
117,701 | 119,908 | 133,090 |
Years ended August 31,
|
||||||||||||||||||||||||
2014
|
2013
|
2012
|
||||||||||||||||||||||
Number
|
Weighted
average
exercise
price
|
Number
|
Weighted
average
exercise
price
|
Number
|
Weighted
average
exercise
price
|
|||||||||||||||||||
Outstanding – Beginning of year
|
37,224 | $ | 3 | 33,124 | $ | 3 | 29,124 | $ | 3 | |||||||||||||||
Granted
|
7,150 | – | 4,100 | – | 4,000 | – | ||||||||||||||||||
Expired
|
(4,500 | ) | 5 |
─
|
─
|
─
|
─
|
|||||||||||||||||
Outstanding – End of year
|
39,874 | $ | 2 | 37,224 | $ | 3 | 33,124 | $ | 3 | |||||||||||||||
Exercisable – End of year
|
22,374 | $ | 3 | 22,624 | $ | 4 | 15,787 | $ | 4 |
Stock appreciation
rights outstanding
|
Stock appreciation
rights exercisable
|
|||||||
Exercise price
|
Number
|
Weighted average
remaining contractual
life
|
Number
|
|||||
$ –
|
19,750
|
8 years
|
2,250
|
|||||
$2.36
|
9,674
|
4 years
|
9,674
|
|||||
$3.74 to $4.51
|
6,000
|
4 years
|
6,000
|
|||||
$6.28 to $6.50
|
4,450
|
2 years
|
4,450
|
|||||
39,874
|
6 years
|
22,374
|
15 | Related Party Disclosures |
Years ended August 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Salaries and short-term employee benefits
|
$ | 3,627 | $ | 3,442 | $ | 3,398 | ||||||
Restructuring charges
|
– | – | 177 | |||||||||
Stock-based compensation costs
|
906 | 907 | 793 | |||||||||
$ | 4,533 | $ | 4,349 | $ | 4,368 |
16 | Statements of earnings |
Years ended August 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Gross research and development expenses
|
$ | 52,423 | $ | 54,334 | $ | 59,282 | ||||||
Research and development tax credits and grants
|
(7,577 | ) | (8,890 | ) | (9,428 | ) | ||||||
$ | 44,846 | $ | 45,444 | $ | 49,854 |
Years ended August 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Cost of sales
|
||||||||||||
Depreciation of property, plant and equipment
|
$ | 1,522 | $ | 1,651 | $ | 2,009 | ||||||
Amortization of intangible assets
|
2,087 | 4,027 | 5,076 | |||||||||
3,609 | 5,678 | 7,085 | ||||||||||
Selling and administrative expenses
|
||||||||||||
Depreciation of property, plant and equipment
|
951 | 1,100 | 1,037 | |||||||||
Amortization of intangible assets
|
1,534 | 1,687 | 1,806 | |||||||||
2,485 | 2,787 | 2,843 | ||||||||||
Net research and development expenses
|
||||||||||||
Depreciation of property, plant and equipment
|
2,522 | 3,277 | 3,123 | |||||||||
Amortization of intangible assets
|
777 | 929 | 937 | |||||||||
3,299 | 4,206 | 4,060 | ||||||||||
$ | 9,393 | $ | 12,671 | $ | 13,988 | |||||||
Depreciation of property, plant and equipment
|
$ | 4,995 | $ | 6,028 | $ | 6,169 | ||||||
Amortization of intangible assets
|
4,398 | 6,643 | 7,819 | |||||||||
$ | 9,393 | $ | 12,671 | $ | 13,988 |
Years ended August 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Salaries and benefits
|
$ | 121,515 | $ | 122,433 | $ | 127,007 | ||||||
Restructuring charges
|
─
|
89 | 2,329 | |||||||||
Stock-based compensation costs
|
1,696 | 1,768 | 1,862 | |||||||||
$ | 123,211 | $ | 124,290 | $ | 131,198 |
Years ended August 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Cost of sales
|
$ | – | $ | – | $ | 264 | ||||||
Selling and administrative expenses
|
– | – | 1,181 | |||||||||
Net research and development costs
|
– | 89 | 884 | |||||||||
$ | – | $ | 89 | $ | 2,329 |
Years ended August 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Cost of sales
|
$ | 191 | $ | 226 | $ | 248 | ||||||
Selling and administrative expenses
|
1,140 | 1,160 | 1,145 | |||||||||
Net research and development expenses
|
365 | 382 | 469 | |||||||||
$ | 1,696 | $ | 1,768 | $ | 1,862 |
17 | Other Disclosures |
|
●
|
Canadian defined contribution pension plan
|
|
|
The company maintains a plan for certain eligible employees residing in Canada, under which the company may elect to match the employees’ contributions up to a maximum of 4% (3% prior to January 1, 2014) of an employee’s gross salary. Cash contributions to this plan and expenses for the years ended August 31, 2012, 2013 and 2014, amounted to $1,178,000, $1,165,000 and $1,451,000 respectively.
|
|
●
|
US defined contribution pension plan (401K plan)
|
|
|
The company maintains a 401K plan for eligible employees residing in the U.S. Under this plan, the company must contribute an amount equal to 3% of an employee’s current compensation. In addition, eligible employees may contribute up to the lesser of 1% of eligible compensation or the statutorily prescribed annual limit to the 401K plan. The 401K plan permits but does not require the company to make additional matching contributions to the 401K plan on behalf of the eligible participants, subject to a maximum of 50% of the first 6% of the participant’s current compensation subject to certain legislated maximum contribution limits. During the years ended August 31, 2012, 2013 and 2014, the company recorded cash contributions and expenses totaling $693,000, $632,000 and $616,000 respectively.
|
18 | Income Taxes |
Years ended August 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Income tax provision (recovery) at combined Canadian federal and provincial statutory tax rate (27%)
|
$ | 1,421 | $ | 1,891 | $ | (6 | ) | |||||
Increase (decrease) due to:
|
||||||||||||
Foreign income taxed at different rates
|
(20 | ) | (249 | ) | 285 | |||||||
Non-taxable (income)/loss
|
(540 | ) | (2,077 | ) | 535 | |||||||
Non-deductible expenses
|
1,011 | 792 | 1,028 | |||||||||
Foreign exchange effect of translation of foreign subsidiaries
|
(547 | ) | 148 | (2,205 | ) | |||||||
Recognition of previously unrecognized deferred income tax assets
|
─
|
─
|
(557 | ) | ||||||||
Unrecognized deferred income tax assets on temporary deductible differences and unused tax losses
|
3,013 | 4,385 | 4,509 | |||||||||
Other
|
141 | 774 | (18 | ) | ||||||||
Income tax provision for the year
|
$ | 4,479 | $ | 5,664 | $ | 3,571 |
Years ended August 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
The income tax provision consists of the following:
|
||||||||||||
Current
|
||||||||||||
Current income taxes
|
$ | 3,588 | $ | 2,713 | $ | 1,521 | ||||||
Deferred
|
||||||||||||
Deferred income taxes relating to the origination and reversal of temporary differences
|
(2,122 | ) | (1,434 | ) | (1,902 | ) | ||||||
Benefit arising from previously unrecognized tax losses and deductible temporary differences
|
─
|
─
|
(557 | ) | ||||||||
(2,122 | ) | (1,434 | ) | (2,459 | ) | |||||||
Unrecognized deferred income tax assets on temporary deductible differences and unused tax losses
|
3,013 | 4,385 | 4,509 | |||||||||
891 | 2,951 | 2,050 | ||||||||||
Income tax provision for the year
|
$ | 4,479 | $ | 5,664 | $ | 3,571 |
As at August 31,
|
||||||||
2014
|
2013
|
|||||||
Deferred income tax assets
|
||||||||
Deferred income tax assets recoverable within 12 months
|
$ | 3,142 | $ | 3,193 | ||||
Deferred income tax assets recoverable after 12 months
|
6,674 | 7,614 | ||||||
9,816 | 10,807 | |||||||
Deferred income tax liabilities
|
||||||||
Deferred income tax liabilities payable within 12 months
|
529 | 252 | ||||||
Deferred income tax liabilities payable after 12 months
|
2,558 | 2,974 | ||||||
3,087 | 3,226 | |||||||
Deferred income tax assets net
|
$ | 6,729 | $ | 7,581 |
Balance as at September 1, 2012
|
Credited (charged) to the statement of earnings
|
Credited (charged) to shareholders’ equity
|
Foreign currency translation adjustment
|
Balance as at August 31, 2013
|
||||||||||||||||
Deferred income tax assets
|
||||||||||||||||||||
Long-lived assets
|
$ | 4,389 | $ | (449 | ) | $ | – | $ | (201 | ) | $ | 3,739 | ||||||||
Provisions and accruals
|
3,431 | 213 | 403 | (197 | ) | 3,850 | ||||||||||||||
Deferred revenue
|
2,044 | (164 | ) | – | (85 | ) | 1,795 | |||||||||||||
Research and development expenses
|
2,362 | (608 | ) | – | (125 | ) | 1,629 | |||||||||||||
Losses carried forward
|
9,207 | (808 | ) | – | (8 | ) | 8,391 | |||||||||||||
Deferred income tax liabilities
|
||||||||||||||||||||
Long-lived assets
|
(494 | ) | 45 | – | 28 | (421 | ) | |||||||||||||
Research and development tax credits
|
(10,964 | ) | (1,180 | ) | – | 742 | (11,402 | ) | ||||||||||||
Total
|
$ | 9,975 | $ | (2,951 | ) | $ | 403 | $ | 154 | $ | 7,581 | |||||||||
Classified as follows:
|
||||||||||||||||||||
Deferred income tax assets
|
$ | 12,080 | $ | 10,807 | ||||||||||||||||
Deferred income tax liabilities
|
(2,105 | ) | (3,226 | ) | ||||||||||||||||
$ | 9,975 | $ | 7,581 |
Balance as at September 1, 2013
|
Credited (charged) to the statement of earnings
|
Credited (charged) to shareholders’ equity
|
Foreign currency translation adjustment
|
Balance as at August 31, 2014
|
||||||||||||||||
Deferred income tax assets
|
||||||||||||||||||||
Long-lived assets
|
$ | 3,739 | $ | (812 | ) | $ | – | $ | (90 | ) | $ | 2,837 | ||||||||
Provisions and accruals
|
3,850 | 229 | (91 | ) | (50 | ) | 3,938 | |||||||||||||
Deferred revenue
|
1,795 | (120 | ) | – | (37 | ) | 1,638 | |||||||||||||
Research and development expenses
|
1,629 | 1,160 | – | (57 | ) | 2,732 | ||||||||||||||
Losses carried forward
|
8,391 | (991 | ) | – | 6 | 7,406 | ||||||||||||||
Deferred income tax liabilities
|
||||||||||||||||||||
Long-lived assets
|
(421 | ) | 371 | – | 9 | (41 | ) | |||||||||||||
Research and development tax credits
|
(11,402 | ) | (728 | ) | – | 349 | (11,781 | ) | ||||||||||||
Total
|
$ | 7,581 | $ | (891 | ) | $ | (91 | ) | $ | 130 | $ | 6,729 | ||||||||
Classified as follows:
|
||||||||||||||||||||
Deferred income tax assets
|
$ | 10,807 | $ | 9,816 | ||||||||||||||||
Deferred income tax liabilities
|
(3,226 | ) | (3,087 | ) | ||||||||||||||||
$ | 7,581 | $ | 6,729 |
As at August 31
|
||||||||
2014
|
2013
|
|||||||
Temporary deductible differences
|
$ | 1,050 | $ | 205 | ||||
Losses carried forward
|
35,806 | 35,914 | ||||||
Research and development expenses
|
641 | 1,370 | ||||||
$ | 37,497 | $ | 37,489 |
Canada
|
||||||||||||||||||||
Year of expiry
|
Federal
|
Provincial
|
Finland
|
United States
|
Other
|
|||||||||||||||
2015
|
$ | – | $ | 1,096 | $ | 1,539 | $ | 997 | $ | – | ||||||||||
2016
|
– | – | – | 553 | – | |||||||||||||||
2017
|
– | – | 4 | – | – | |||||||||||||||
2018
|
– | – | 382 | – | – | |||||||||||||||
2019
|
– | – | – | 741 | – | |||||||||||||||
2020
|
– | – | 8,747 | 3,470 | – | |||||||||||||||
2021
|
– | – | 7,582 | 10,202 | – | |||||||||||||||
2022
|
– | – | 13,145 | 7,435 | – | |||||||||||||||
2023
|
– | – | 8,516 | 1,972 | – | |||||||||||||||
2024
|
– | – | 2,269 | 1,351 | – | |||||||||||||||
2025
|
– | – | – | 1,351 | – | |||||||||||||||
2026
|
– | 990 | – | 1,351 | – | |||||||||||||||
2027
|
– | 1,256 | – | 1,351 | – | |||||||||||||||
2028
|
– | – | – | 2,447 | – | |||||||||||||||
2030
|
11 | 11 | – | 2,713 | – | |||||||||||||||
2031
|
35 | 35 | – | 109 | – | |||||||||||||||
2032
|
8 | 8 | – | – | – | |||||||||||||||
2033
|
44 | 44 | – | 4,681 | – | |||||||||||||||
2034
|
17 | 17 | – | 4,684 | – | |||||||||||||||
Indefinite
|
– | – | – | – | 2,216 | |||||||||||||||
$ | 115 | $ | 3,457 | $ | 42,184 | $ | 45,408 | $ | 2,216 |
(1)
|
Undistributed profits of its foreign subsidiaries will not be distributed in the foreseeable future; and
|
(2)
|
Undistributed profits of its domestic subsidiaries will not be taxable when distributed.
|
19 | Earnings per Share |
Years ended August 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Basic weighted average number of shares outstanding (000’s)
|
60,329 | 60,323 | 60,453 | |||||||||
Plus dilutive effect of (000’s):
|
||||||||||||
Stock options
|
9 | 24 | 149 | |||||||||
Restricted share units
|
574 | 648 | 910 | |||||||||
Deferred share units
|
103 | 115 | 118 | |||||||||
Diluted weighted average number of shares outstanding (000’s)
|
61,015 | 61,110 | 61,630 | |||||||||
Stock awards excluded from the calculation of the diluted weighted average number of shares outstanding because their exercise price was greater than the average market price of the common shares (000’s)
|
77 | 75 | 54 |
20 | Segment Information |
Years ended August 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Products
|
$ | 201,724 | $ | 213,042 | $ | 220,356 | ||||||
Services
|
29,082 | 29,108 | 29,610 | |||||||||
$ | 230,806 | $ | 242,150 | $ | 249,966 |
Years ended August 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
United States
|
$ | 83,172 | $ | 87,145 | $ | 83,401 | ||||||
Canada
|
19,482 | 26,073 | 29,944 | |||||||||
Other
|
19,195 | 14,910 | 17,838 | |||||||||
Americas
|
121,849 | 128,128 | 131,183 | |||||||||
United Kingdom
|
12,736 | 13,206 | 9,862 | |||||||||
Other
|
51,243 | 53,802 | 61,449 | |||||||||
Europe, Middle-East and Africa
|
63,979 | 67,008 | 71,311 | |||||||||
China
|
22,468 | 21,778 | 21,802 | |||||||||
Other
|
22,510 | 25,236 | 25,670 | |||||||||
Asia-Pacific
|
44,978 | 47,014 | 47,472 | |||||||||
$ | 230,806 | $ | 242,150 | $ | 249,966 |
As at August 31, 2014
|
As at August 31, 2013
|
|||||||||||||||||||||||
Property, plant and equipment
|
Intangible assets
|
Goodwill
|
Property, plant and equipment
|
Intangible assets
|
Goodwill
|
|||||||||||||||||||
Canada
|
$ | 33,094 | $ | 2,006 | $ | – | $ | 34,833 | $ | 2,274 | $ | – | ||||||||||||
United States
|
1,333 | 1,960 | 16,023 | 1,305 | 186 | 16,522 | ||||||||||||||||||
Finland
|
448 | 3,231 | 10,465 | 589 | 4,762 | 10,791 | ||||||||||||||||||
India
|
5,479 | 56 | – | 6,190 | 42 | – | ||||||||||||||||||
China
|
1,397 | 32 | – | 1,517 | 25 | – | ||||||||||||||||||
Other
|
1,029 | 8 | – | 1,089 | 254 | – | ||||||||||||||||||
$ | 42,780 | $ | 7,293 | $ | 26,488 | $ | 45,523 | $ | 7,543 | $ | 27,313 |
I.
|
Purpose
|
II.
|
Composition
|
III.
|
Meetings
|
IV.
|
Authority and Responsibilities
|
|
1.
|
Be directly responsible for recommending the nomination, compensation, retention and oversight of the external auditors (including resolution of disagreements between management and the external auditors regarding financial reporting) for the purpose of preparing its audit report or related work.
|
|
2.
|
Have the sole authority to review in advance, and grant any appropriate pre-approvals, of (a) all auditing services to be provided by the external auditors and (b) all non-audit services to be provided by the external auditors as permitted by Section 10A of the Securities Exchange Act and any other regulatory requirements, and in connection therewith to approve all fees and other terms of engagement. The Audit Committee shall also review and approve disclosures required by applicable regulatory requirements.
|
|
3.
|
Review on an annual basis the performance of the external auditors including the lead audit partner.
|
|
4.
|
Review the Corporation’s financial statements, MD&A and annual and earnings (profit or loss) press releases before the Corporation publicly discloses this information.
|
|
5.
|
Ensure that the external auditors submit directly to the Audit Committee, on an annual basis, a formal written statement consistent with Independence Standards Board Standard No. 1.
|
|
6.
|
Actively discuss with the external auditors with respect to any disclosed relationships or services that may impact the objectivity and independence of the external auditors and satisfy itself as to the external auditors’ independence.
|
|
7.
|
Take, or recommend that the full board take, appropriate action to oversee the independence of the external auditor.
|
|
8.
|
Confirm that the lead audit partner and the audit partner responsible for reviewing the audit, has not performed audit services for the Corporation for each of the five previous fiscal years, taking into account years prior to adoption of S/O Act.
|
|
9.
|
Review all reports required to be submitted by the external auditors to the Audit Committee under Section 10A of the Securities Exchange Act and any other regulatory requirements.
|
|
10.
|
Review, based upon the recommendation of the external auditors and management, the scope and plan of the work to be done by the external auditors.
|
|
11.
|
Review and discuss with management and the external auditors the Corporation’s annual audited financial statements, including disclosures made in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the external auditors’ audit of the annual financial statements prior to submission to stockholders, any government body, any stock exchange or the public.
|
|
12.
|
Discuss with the external auditors the matters required to be discussed by Statement on Auditing Standards No. 61, as amended, relating to the conduct of the audit.
|
|
13.
|
Recommend to the Board, if appropriate, that the Corporation’s annual audited financial statements be included in the Corporation’s annual report on Form 20-F or 40-F for filing with the Securities and Exchange Commission and with any other regulatory authorities.
|
|
14.
|
Review and discuss with management the Corporation’s quarterly financial statements, including disclosures made in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the external auditors’ review of the quarterly financial statements, prior to submission to stockholders, any government body, any stock exchange or the public.
|
|
15.
|
Obtain and review an annual report from management relating to the accounting principles used in the preparation of the Corporation’s financial statements, including those policies for which management is required to exercise discretion or judgments regarding the implementation thereof. If requested, discuss with management and the external auditors any issues regarding accounting principles used by the Corporation.
|
|
16.
|
Periodically review separately with each of management and the external auditors (a) any significant disagreement between management and the external auditors in connection with the preparation of the financial statements, (b) any difficulties encountered during the course of the audit, including any restrictions on the scope of work or access to required information and (c) management’s response to each.
|
|
17.
|
Periodically discuss with the external auditors, without management being present, (a) their judgments about the quality and appropriateness of the Corporation’s accounting principles and financial disclosure practices as applied in its financial reporting and (b) the completeness and accuracy of the Corporation’s financial statements.
|
|
18.
|
Consider and approve, if appropriate, significant changes to the Corporation’s accounting principles and financial disclosure practices as suggested by the external auditors or management. Review with the external auditors and management, at appropriate intervals, the extent to which any changes in accounting principles or financial disclosure practices, as approved by the Audit Committee, have been implemented.
|
|
19.
|
Review and discuss with management, the external auditors and the Corporation’s in-house and independent counsel, as appropriate, any legal, regulatory or compliance matters that could have a significant impact on the Corporation’s financial statements, including applicable changes in accounting standards or rules.
|
|
20.
|
Review and discuss with management the Corporation’s earnings press releases, including the use of “Pro forma” or “Adjusted” non-GAAP information as well as financial information and earnings guidance provided to analysts and rating agencies. Such discussions maybe done generally (i.e., discussion of the types of information to be disclosed and the types of presentation to be made).
|
|
21.
|
Review and discuss with management all material off-balance sheet transactions, arrangements, obligations (including contingent obligations) and other relationships of the Corporation with unconsolidated entities or other persons, that may have a material current or future effect on financial condition, changes in financial condition, results of operations, liquidity, capital resources, capital reserves or significant components of revenues or expenses.
|
|
22.
|
Review and discuss with management the Company’s major risk exposures and the steps management has taken to monitor, control and manage such exposures.
|
|
23.
|
In consultation with the external auditors, review the adequacy to the Corporation’s internal controls and disclosure controls and procedures designed to insure compliance with laws and regulations, and discuss the responsibilities, budget and staffing needs for support of internal controls and disclosure controls and procedures.
|
|
24.
|
Establish procedures for (a) the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters and (b) the confidential, anonymous submission by employees of the Corporation of concerns regarding the questionable accounting or auditing matters.
|
|
25.
|
Review, when required by regulation, (i) the internal control report prepared by management, including management’s assessment of the effectiveness of the Corporation’s internal controls for financial reporting and (ii) the external auditor’s attestation, and report, on the assessment made by management.
|
|
26.
|
Review and approve all related-party transactions.
|
|
27.
|
Review and approve (a) any change or waiver in the Corporation’s “Code of Ethics for our Principal Executive Officer and Senior Financial Officers” and (b) any disclosure regarding such change or waiver.
|
|
28.
|
Establish a policy addressing the Corporation’s hiring of employees or former employees of the external auditors who were engaged on the Corporation’s account that provides as a minimum that the positions of CEO, CFO, Chief Accounting Officer, Controller or any person serving in an equivalent position cannot be filled by a person employed by the external auditor and that participated in the audit of the Corporation during the preceding twelve month period.
|
|
29.
|
Review and reassess the adequacy of this Charter annually and recommend to the Board any changes deemed appropriate by the Audit Committee.
|
|
30.
|
Report regularly to the Board. Review with the full Board any issues that have arisen with respect to the quality or integrity of the Company’s financial statements, the Company’s compliance with legal or regulatory requirements, the performance and independence of the Company’s external auditors.
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31.
|
Perform any other activities consistent with this Charter, the Corporation’s by-laws and governing law, as the Audit Committee or the Board deems necessary or appropriate.
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V.
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Resources
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I.
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Purpose
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●
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Nomination of directors;
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●
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Annual base salary;
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●
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Annual incentive opportunity;
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●
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Stock option, RSU’s or DSU’s or other equity participation plans;
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●
|
Short term and long-term incentive compensation programs for all employees, including the performance goals for eligibility to participate in such programs and the apportionment of compensation among salary and short-term and long-term incentive compensation;
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●
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The terms of employment agreements, severance arrangements, and change in control agreements, in each case as, when and if appropriate;
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●
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Any special or supplemental benefits; and
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●
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Any other payments that are deemed compensation under applicable SEC rule.
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II.
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Organization
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●
|
The Board shall elect annually from among its members a committee to be known as the Human Resources Committee which shall consist of a minimum of three (3) independent directors, each of whom shall satisfy the applicable independence requirements of the NASDAQ and any other regulatory requirements. At least one member of the Committee shall have experience in matters relating to executive compensation either as a professional or as a business executive.
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●
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Each member of the Committee shall hold such office until the next annual meeting of shareholders after his or her election as a member of the Committee. However, any member of the Committee may be removed or replaced at any time by the Board and shall cease to be a director.
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●
|
The Committee shall appoint one of its members to act as Chairman of the Committee. The Chairman will appoint a secretary who will keep minutes of all meetings (the "Secretary"). The Secretary need not be a member of the Committee or a director and can be changed by simple notice from the Chairman.
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●
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The time at which and the place where the meetings of the Committee shall be held, the calling of meetings and the procedure in all respects of such meetings shall be determined by the Committee, unless otherwise provided for in the by-laws of the Corporation or otherwise determined by resolution of the Board.
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●
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The members of the Committee shall be entitled to receive such remuneration for acting as members of the Committee as the Board may from time to time determine.
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●
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It is understood that in order to properly carry out its responsibilities, the Board of Directors on behalf of the Committee may retain outside consultants at the expense of the Corporation if appropriate, so long as it notifies the Corporate Secretary of the Corporation in each instance.
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●
|
The Committee may form and delegate authority to subcommittees when appropriate.
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III.
|
Meetings
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●
|
When the Committee meets to vote or deliberate on Chief Executive Officer’s ("CEO") compensation, CEO is not to be present.
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●
|
The Committee will meet as many times as is necessary to carry out its responsibilities but in no event will the Committee meet less than twice a year.
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●
|
No business may be transacted by the Committee except at a meeting of its members at which a quorum of the Committee is present (in person or by means of telephone conference) or by a resolution in writing signed by all of the members of the Committee. A majority of the members of the Committee shall constitute a quorum.
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IV.
|
Authority and Responsibilities
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●
|
Review and approve on an annual basis corporate goals and objectives relevant to CEO’s compensation, evaluate the CEO’s performance in light of those goals and objectives and set the CEO’s compensation level based on this evaluation.
1
In determining the long-term incentive component of CEO compensation, the Committee will also consider, among such other factors as it may deem relevant, the Corporation's performance, shareholder returns, the value of similar incentive awards to chief executive officers at comparable companies, the awards given to the CEO in past years and consider any risks related to the compensation of the CEO.
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|
●
|
Review and approve on an annual basis with respect to the annual compensation of all senior officers
2
, after reviewing the recommendations of the CEO’s review of the salary structure, the short-term and long-term incentive compensation programs for all employees, including the performance goals for eligibility to participate in such programs and the apportionment of compensation among salary and short-term and long-term incentive compensation.
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|
●
|
Review and approve on an annual basis, the policy addressing the Corporation’s hiring of employees or former employees of the independent auditors who were engaged on the Corporation’s account that provides as a minimum that the positions of CEO, CFO, Chief Accounting Officer, Controller or any person serving in an equivalent position cannot be filled by a person employed by the independent auditor and that participated in the audit of the Corporation during the preceding twelve month period.
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|
●
|
Review and approve, on behalf of the Board of Directors (the “Board”) or in collaboration with the Board, as applicable, on the basis of the attribution authorized by the Board, to whom options to purchase shares of the Corporation, RSU’s or DSU’s shall be offered as the case may be and if so, the terms of such options, RSU’s or DSU’s in accordance with the terms of the Corporation’s Long Term Incentive Plan or the Deferred Share Unit Plan provided that no options, RSU’s or DSU’s shall be granted to members of this Committee without the approval of the Board.
|
|
●
|
Annually review and report to the Board on organizational structure and to ensure that senior management has developed a succession plan for the CEO and the CEO’s direct reports and to review such report with senior management.
|
|
●
|
Recommend to the Board from time to time the remuneration to be paid by the Corporation to directors.
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|
●
|
Make recommendations to the Board with respect to the Corporation's incentive compensation plans and equity-based plans.
|
|
●
|
Prepare the report required by the Securities and Exchange Commission to be included in the Corporation's annual proxy statement.
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|
●
|
Conduct annually a risk assessment associated to the compensation policies and practices for executives.
|
|
●
|
Make recommendations to the Board with respect to membership on committees of the Board.
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|
●
|
Identify individuals qualified to become members of the Board, the Committee may conduct background checks respecting such individuals as it wishes to recommend to the Board as a
director nominee and recommend that the Board select the director nominees for the next annual meeting of shareholders.
3
|
|
●
|
When considering a potential candidate, the Committee considers the qualities and skills that the Board, as a whole, should have and assesses the competencies and skills of the current members of the Board. Based on the talent already represented on the Board, the Committee identifies the specific skills, personal qualities or experiences that a candidate should possess in light of the opportunities and risks facing the Corporation.
|
3
|
Please note that NASDAQ requires Committee approval of director nominations.
|
|
●
|
Screen potential candidates to ensure that they possess the requisite qualities, including integrity, business judgment and experience, business or professional expertise, independence from management, international experience, financial literacy, excellent communications skills and the ability to work well with the Board and the Corporation. The Committee considers the existing commitments of a potential candidate to ensure such candidate will be able to fulfill his or her obligations as a Board member.
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|
●
|
Receive and discuss suggestions from shareholders for potential director nominees.
|
|
●
|
Make recommendations to the Board with respect to potential successors to the Chief Executive Officer.
|
|
●
|
Maintain a list of potential director candidates for its future consideration and may engage outside advisors to assist in identifying potential candidates.
|
|
●
|
Prepare an annual written peer review to assess individual directors on the Board and attributes that contribute to an effective Board. This consists of both an evaluation of each director’s peers and a self-evaluation which is based on a questionnaire approved by the Board. The written peer evaluation process is complemented meetings between the chair and the members.
|
|
●
|
Receive comments from all directors as to the Board's performance and report annually to the Board with an assessment of the Board’s performance.
|
|
●
|
Prepare and recommend to the Board a set of corporate governance guidelines applicable to the Corporation. Review and reassess the adequacy of such guidelines annually and recommend to the Board any changes deemed appropriate by the Committee.
|
|
●
|
Maintain an orientation program for new directors and continuing education programs for directors.
|
|
●
|
Review and reassess the adequacy of this charter annually and recommend to the Board any changes deemed appropriate by the Committee.
|
|
●
|
Review its own performance annually.
|
|
●
|
Report regularly to the Board.
|
|
●
|
Perform any other activities consistent with this Charter, the Corporation's by-laws and governing law, as the Committee or the Board deems necessary or appropriate.
|
V.
|
Resources
|
|
●
|
The Board of Directors on behalf of the Committee shall have the sole authority to retain or terminate consultants to assist the Committee in the evaluation of director, CEO or senior executive compensation and to be used to identify director candidates and the authority to retain other professionals to assist it with any background checks.
|
|
●
|
The Board of Directors on behalf of the Committee shall have the sole authority to determine the terms of engagement and the extent of funding necessary for payment of compensation to any consultant retained to advise the Committee and the extent of funding necessary for payment of compensation to any search firm and the authority to determine the extent of funding necessary for payment of compensation to any other professionals retained to advise the Committee. To do so, the Committee must take into account the provision of other services by the consultant’s company, the amount of fees received from the consultant’s company as a percentage of the total revenue of the consultant’s company, the policies and procedures followed by the consultant’s company, any business or personal relationship that the consultant may have with a member of the Committee or an Executive officer of the Committee and any stock of the Corporation the consultant may have.
|
1.
|
I have reviewed this Annual Report on Form 20-F of EXFO Inc. ("EXFO");
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of EXFO as of, and for, the periods presented in this report;
|
4.
|
EXFO's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for EXFO and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to EXFO, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of EXFO's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in EXFO's internal control over financial reporting that occurred during the period covered by the Annual Report that has materially affected, or is reasonably likely to materially affect, EXFO's internal control over financial reporting; and
|
5.
|
EXFO's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to EXFO's auditors and the audit committee of EXFO's board of directors:
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect EXFO's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in EXFO’s internal control over financial reporting.
|
1.
|
The Annual Report on Form 20-F for the year ended August 31, 2013 of EXFO fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in this Annual Report fairly presents, in all material respects, the financial condition and results of operations of EXFO.
|
1.
|
I have reviewed this Annual Report on Form 20-F of EXFO Inc. ("EXFO");
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of EXFO as of, and for, the periods presented in this report;
|
4.
|
EXFO's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for EXFO and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to EXFO, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of EXFO's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in EXFO's internal control over financial reporting that occurred during the period covered by the Annual Report that has materially affected, or is reasonably likely to materially affect, EXFO's internal control over financial reporting; and
|
5.
|
EXFO's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to EXFO's auditors and the audit committee of EXFO's board of directors:
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect EXFO's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in EXFO's internal control over financial reporting.
|
1.
|
The Annual Report on Form 20-F for the year ended August 31, 2013 of EXFO fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in this Annual Report fairly presents, in all material respects, the financial condition and results of operations of EXFO.
|