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EXFO Announces Preliminary Third-Quarter Results

Complete quarterly results will be reported on June 28 th

QUEBEC CITY, June 1, 2012 /PRNewswire/ - EXFO Inc. (NASDAQ: EXFO) (TSX: EXF) announced today preliminary financial results for the third quarter ended May 31, 2012.

Revenue for the third quarter of fiscal 2012 is expected to be around US$60.0 million compared to EXFO's previous guidance of US$68.0 million to US$73.0 million.

Given the lower-than-anticipated revenue level for the third quarter of 2012, EXFO's gross margin will be negatively affected and IFRS net earnings will end below the company's initial outlook of US$0.01 to US$0.05 per diluted share.

EXFO will report its complete results for the third quarter of fiscal 2012 after the close of markets on June 28, 2012. All financial numbers provided in this news release are preliminary and subject to review.

"Challenging macro-economic conditions, coupled with the tightening of capital spending among network operators during the first half of calendar 2012, have rendered EXFO's end-markets very difficult for the short term," explained Germain Lamonde, EXFO's Chairman, President and CEO. " Europe turned out to be more impacted than expected, the anticipated pick-up of spending in the Americas did not materialize — especially with Tier-I operators — while spending in China has been sluggish. We believe this is not a company-specific issue, but rather a short-term industry spending pattern, since the requirement for wireline and wireless operators to invest in their networks in order to attract growing data revenue remains intact. We see a growing funnel of serious opportunities, but unfortunately they are being delayed and are taking longer to close."

Following the release of its quarterly results on June 28, 2012, EXFO will host a conference call at 5 p.m. Eastern time to review its performance. To listen to the conference call and participate in the question period via telephone on June 28, 2012 at 5 p.m. (Eastern time), dial (416) 641-6684.

Mr. Lamonde and Pierre Plamondon, CA, EXFO's Vice-President of Finance and Chief Financial Officer, will participate in the call. An audio replay will be available one hour after the end of the conference call until 7 p.m. (Eastern time) on July 5, 2012. The replay number is (402) 977-9141 and the reservation number is 21592376. The live audio Webcast and replay of the conference call will also be available on EXFO's website at www.EXFO.com/investors.

About EXFO Listed on the NASDAQ and TSX stock exchanges, EXFO is among the leading providers of next-generation test and service assurance solutions for wireless and wireline network operators and equipment manufacturers in the global telecommunications industry. The company offers innovative solutions for the development, installation, management and maintenance of converged, IP fixed and mobile networks — from the core to the edge. Key technologies supported include 3G, 4G/LTE, IMS, Ethernet, OTN, FTTx, VDSL2, ADSL2+ and various optical technologies (accounting for an estimated 35% of the portable fiber-optic test market). EXFO has a staff of approximately 1800 people in 25 countries, supporting more than 2000 telecom customers worldwide. For more information, visit www.EXFO.com.

Forward-Looking Statements This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and we intend that such forward-looking statements be subject to the safe harbors created thereby. Forward-looking statements are statements other than historical information or statements of current condition. Words such as may, will, expect, believe, anticipate, intend, could, estimate, continue, or the negative or comparable terminology are intended to identify forward-looking statements. In addition, any statements that refer to expectations, projections or other characterizations of future events and circumstances are considered forward-looking statements. They are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those in our forward-looking statements due to various factors including economic uncertainty (including our ability to quickly adapt cost structures with anticipated levels of business, ability to manage inventory levels with market demand); future economic, competitive, financial and market conditions; capital spending levels in the telecommunications industry; limited visibility with regards to customer orders and the timing of such orders; fluctuating exchange rates; our ability to successfully integrate our acquired and to-be-acquired businesses; consolidation in the global telecommunications test and service assurance industry and increased competition among vendors; concentration of sales; market acceptance of our new products and other upcoming products; our ability to successfully expand international operations; and the retention of key technical and management personnel. Assumptions relating to the foregoing involve judgments and risks, all of which are difficult or impossible to predict and many of which are beyond our control. Other risk factors that may affect our future performance and operations are detailed in our Annual Report, on Form 20-F, and our other filings with the U.S. Securities and Exchange Commission and Canadian securities commissions. We believe that the expectations reflected in the forward-looking statements are reasonable based on information currently available to us, but we cannot assure you that the expectations will prove to have been correct. Accordingly, you should not place undue reliance on these forward-looking statements. These statements speak only as of the date of this press release. Unless required by law or applicable regulations, we undertake no obligation to revise or update any of them to reflect events or circumstances that occur after the date of this document.

SOURCE EXFO INC.

Copyright 2011 PR Newswire. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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