QUEBEC CITY -- EXFO Electro-Optical Engineering Inc. (NASDAQ: EXFO, TSE: EXF) announced today additional proactive measures to accelerate its return to profitability. EXFO has implemented a restructuring plan in order to reach a pro-forma break-even level(x) of approximately US$20 to US$21 million in quarterly sales. The restructuring plan is expected to be completed before the end of calendar 2002. As part of efforts to lower its cost structure, EXFO is reducing its global workforce by approximately 20%. "Given that capital spending among telecommunications carriers continues to be weak, we have moved ahead to further reduce our break-even level," said Germain Lamonde, Chairman, President and CEO of EXFO. "The actions we have taken are difficult, but they are necessary to bring the organization back to profitability as soon as possible and safeguard the future of our company." In connection with these efforts, EXFO intends to incur restructuring charges in the third quarter ending May 31, 2002. In addition, the company is in the process of reviewing goodwill and intangible assets for impairment and may record an impairment loss in the third quarter. Despite on-going challenging market conditions, EXFO reiterated that sales will fall between guidance of US$14.5 million and US$17.0 million for the third quarter, while pro forma net loss(x) will be between US$0.05 and US$0.07 per share. EXFO Electro-Optical Engineering Inc.