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Mitel Reports Second Quarter 2014 Financial Results
53,000 recurring cloud seats added in the quarter, up 98% year-over-year
Strong cash generation enables another voluntary prepayment of
As Reported | Pro-forma | ||
Q2 '14 | Q2'13 | Q2'13* | |
Revenue |
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Net Income (Loss) |
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Non-GAAP Net Income |
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Adjusted EBITDA |
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All results are reported in millions of US dollars
See tables for reconciliation of non-GAAP measures to GAAP measures
*consists of the combined results of
"
In the second quarter
Cloud Operational Metrics*
Q2 '13 | Q3'13 | Q4'13 | Q1 '14 | Q2 '14 | |
Total |
431,886 | 497,489 | 566,562 | 625,699 | 754,045 |
Recurring |
98,727 | 115,870 | 121,314 | 142,600 | 195,673 |
Retail Cloud Monthly Average Revenue Per User (ARPU) | $ 48 | $ 46 | $ 48 | $ 48 | $ 47 |
Retail Cloud Average # of Seats per Customer | 32 | 33 | 31 | 32 | 34 |
Retail Cloud Monthly Customer Churn | 0.7% | 0.7% | 0.5% | 0.6% | 0.6% |
*Information reflects results on a pro-forma basis, as if the
"Our strategic progress is being recognized and rewarded by customers and the industry. In a highly competitive environment we announced global market share gains including #1 market share positions in
Financial Highlights
AS REPORTED:
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Total revenue increased 97% to
$288.7 million from second quarter 2013, primarily as a result of theAastra acquisition. -
Gross margins were 52.6%, down from 55.0% in the prior year, reflecting the acquisition of
Aastra , which was a lower gross margin business. -
Net income was
$0.8 million compared to net income of$2.7 million in the prior year, driven principally by the integration costs related to the acquisition ofAastra . -
Adjusted EBITDA was
$38.8 million compared to$21.4 million in the year ago period, due to a combination of EBITDA growth from the legacyMitel business and EBITDA resulting from the acquisition ofAastra . -
Non-GAAP net income for the second quarter of 2014 was
$22.2 million , or$0.21 per diluted share, compared to$9.9 million , or$0.18 per diluted share in the second quarter of 2013. The number of non-GAAP weighted-average common shares outstanding was 103.7 million and 56.3 million, respectively. -
Operating cash flow for the quarter ended
June 2014 was$25.8 million compared to$25.3 million in the quarter endedJune 2013 . -
Cash and cash equivalents as of
June 30, 2014 were$134.2 million .
PRO-FORMA*:
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Total revenue decreased 1.5% from
$293.0 million in second quarter 2013, driven principally by customers moving from premise to recurring cloud-based solutions. - Gross margins improved to 52.6% compared to 48.6% in the prior year, as a result of the prairieFyre acquisition and other cost reductions.
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Net income improved to
$0.8 million compared to a net loss of$1.6 million in the prior year, driven principally by margin improvements. -
Adjusted EBITDA increased to
$38.8 million compared to$35.2 million in the year ago period, reflecting improved operating performance. -
Non-GAAP net income improved to
$22.2 million , or$0.21 per share, compared to$18.9 million , or$0.19 per diluted share in the second quarter of 2013. The number of non-GAAP weighted-average common shares outstanding for the second quarter of 2013 was 100.5 million.
*Information reflects results on a pro-forma basis, as if the
"The global
Business Highlights
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Recognized by Gartner as a Leader in the 2014 Magic Quadrant for
Unified Communications , the second significant advancement in consecutive months by the prestigious research firm followingMitel's move into the Challengers Quadrant for Contact Center Infrastructure.
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Introduction of a new Partner program in
North America with a redesigned reward system that recognizes both revenue success and IT and technical skill credentials, including technical and sales certifications, operational efficiency and installation expertise as well as specialized expertise in contact center, cloud and hospitality solutions.
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In conjunction with
Mitel emerging as the #1 market share leader in bothWestern Europe and Europe Middle East andAfrica (EMEA) overall, and to further strengthen and expand our market position in the region we completed the consolidation ofMitel's European sales organization into a single structure under the leadership ofGraham Bevington , Executive Vice President for EMEA.
Business Outlook
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GAAP revenue is expected to be in the range of
$261 million to$276 million , reflecting typical third quarter seasonality. - GAAP gross margin percentage is expected to be in the range of 51.5% to 53.0%.
- Adjusted EBITDA margins to be in the range 10.5% to 12.0%; and
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Non-GAAP earnings per share to be in the range of
$0.14 to$0.16
Conference Call Information
Non-GAAP Financial Measurements
This press release includes references to non-GAAP financial measures including adjusted EBITDA, non-GAAP net income and non-GAAP operating expenses. Non-GAAP financial measures do not have any standardized meaning and are therefore unlikely to be comparable to similar measures presented by other companies. We use these non-GAAP financial measures to assist management and investors in understanding our past financial performance and prospects for the future, including changes in our operating results, trends and marketplace performance, exclusive of unusual events or factors which do not directly affect what we consider to be our core operating performance. Non-GAAP measures are among the primary indicators management uses as a basis for our planning and forecasting of future periods. Investors are cautioned that non-GAAP financial measures should not be relied upon as a substitute for financial measures prepared in accordance with generally accepted accounting principles. Please see the reconciliation of non-GAAP financial measures to the most directly comparable U.S. GAAP measure attached to this release.
Forward Looking Statements
Some of the statements in this press release are forward-looking statements (or forward-looking information) within the meaning of applicable U.S. and Canadian securities laws. These include statements using the words target, outlook, may, will, should, could, estimate, continue, expect, intend, plan, predict, potential, project and anticipate, and similar statements which do not describe the present or provide information about the past. There is no guarantee that the expected events or expected results will actually occur. Such statements reflect the current views of management of
About
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All other trademarks are the property of their respective owners.
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CONSOLIDATED BALANCE SHEETS | ||
(in millions of US dollars) | ||
(unaudited) | ||
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2014 | 2013 | |
ASSETS | ||
Current assets: | ||
Cash and cash equivalents | $ 134.2 | $ 40.2 |
Accounts receivable | 230.1 | 104.3 |
Sales-type lease receivables | 21.9 | 13.9 |
Inventories | 89.3 | 36.9 |
Deferred tax asset | 27.9 | 17.3 |
Other current assets | 53.7 | 26.5 |
557.1 | 239.1 | |
Non-current portion of sales-type lease receivables | 23.1 | 12.1 |
Deferred tax asset | 118.8 | 127.5 |
Property and equipment | 52.4 | 28.5 |
Identifiable intangible assets | 204.0 | 50.7 |
Goodwill | 333.4 | 147.3 |
Other non-current assets | 19.1 | 15.3 |
$ 1,307.9 | $ 620.5 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Current liabilities: | ||
Accounts payable and accrued liabilities | $ 212.1 | $ 82.8 |
Current portion of deferred revenue | 75.8 | 39.4 |
Current portion of long-term debt | 6.0 | 5.3 |
293.9 | 127.5 | |
Long-term debt | 336.0 | 264.2 |
Lease recourse liability | 2.5 | 3.5 |
Long-term portion of deferred revenue | 34.7 | 16.6 |
Deferred tax liability | 23.5 | 14.4 |
Pension liability | 102.4 | 57.3 |
Other non-current liabilities | 28.6 | 18.6 |
821.6 | 502.1 | |
Shareholders' equity | 486.3 | 118.4 |
$ 1,307.9 | $ 620.5 | |
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STATEMENT OF OPERATIONS | ||||
(in millions of US dollars) | ||||
(unaudited) | ||||
US GAAP As Reported Quarter Ended |
Proforma Quarter Ended |
US GAAP As Reported Quarter Ended |
Proforma Quarter Ended |
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Revenues | $ 288.7 | $ 288.7 | $ 146.6 | $ 293.0 |
Cost of revenues | 136.9 | 136.9 | 66.0 | 150.5 |
Gross margin | 151.8 | 151.8 | 80.6 | 142.5 |
Expenses: | ||||
Selling, general and administrative | 91.8 | 91.8 | 50.7 | 86.8 |
Research and development | 31.9 | 31.9 | 13.5 | 31.6 |
Special charges and restructuring costs | 10.9 | 10.9 | 2.6 | 7.5 |
Amortization of acquisition-related intangible assets | 14.0 | 14.0 | 5.6 | 13.0 |
148.6 | 148.6 | 72.4 | 138.9 | |
Operating income | 3.2 | 3.2 | 8.2 | 3.6 |
Interest expense | (5.5) | (5.5) | (6.3) | (6.4) |
Debt retirement costs | (0.8) | (0.8) | -- | -- |
Other income (loss) | 1.7 | 1.7 | (0.3) | (1.2) |
Income (loss) from operations, before income taxes | (1.4) | (1.4) | 1.6 | (4.0) |
Current income tax recovery (expense) | (0.6) | (0.6) | 3.3 | 2.6 |
Deferred income tax recovery (expense) | 2.8 | 2.8 | (2.2) | (0.2) |
Net income (loss) | $ 0.8 | $ 0.8 | $ 2.7 | $ (1.6) |
Non-GAAP measures: | ||||
Adjusted EBITDA | 38.8 | 38.8 | 21.4 | 35.2 |
Non-GAAP net income | 22.2 | 22.2 | 9.9 | 18.9 |
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STATEMENT OF OPERATIONS | ||||
(in millions of US dollars) | ||||
(unaudited) | ||||
US GAAP As Reported Six Months Ended |
Proforma Six Months Ended |
US GAAP As Reported Six Months Ended |
Proforma Six Months Ended |
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Revenues | $ 530.2 | $ 566.1 | $ 289.7 | $ 566.5 |
Cost of revenues | 249.0 | 270.3 | 128.3 | 289.5 |
Gross margin | 281.2 | 295.8 | 161.4 | 277.0 |
Expenses: | ||||
Selling, general and administrative | 168.7 | 182.4 | 99.6 | 172.7 |
Research and development | 58.2 | 63.8 | 27.3 | 64.2 |
Special charges and restructuring costs | 24.1 | 39.1 | 4.1 | 9.9 |
Amortization of acquisition-related intangible assets | 25.3 | 27.8 | 11.2 | 26.0 |
276.3 | 313.1 | 142.2 | 272.8 | |
Operating income (loss) from continuing operations | 4.9 | (17.3) | 19.2 | 4.2 |
Interest expense | (11.4) | (11.5) | (11.7) | (11.9) |
Debt retirement costs | (15.5) | (15.5) | (2.6) | (2.6) |
Fair value adjustment on derivative instruments | -- | -- | -- | 0.4 |
Other income (loss) | 1.8 | 0.8 | (0.2) | -- |
Income (loss) from operations, before income taxes | (20.2) | (43.5) | 4.7 | (9.9) |
Current income tax recovery (expense) | (0.3) | 5.2 | 3.9 | 2.5 |
Deferred income tax recovery (expense) | 7.7 | 8.3 | (4.6) | -- |
Net income (loss) from continuing operations | (12.8) | (30.0) | 4.0 | (7.4) |
Net loss from discontinued operations | -- | -- | (3.0) | (3.0) |
Net income (loss) from continuing operations | $ (12.8) | $ (30.0) | $ 1.0 | $ (10.4) |
Non-GAAP measures: | ||||
Adjusted EBITDA | 74.4 | 71.6 | 44.4 | 62.9 |
Non-GAAP net income | 42.0 | 39.1 | 22.0 | 32.9 |
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Cash flow information | ||||
(in millions of US dollars) | ||||
(unaudited) | ||||
As Reported Quarter Ended |
As Reported Quarter Ended |
As Reported Six Months Ended |
As Reported Six Months Ended |
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Cash provided by (used in): | ||||
Net cash provided by operating activities | $ 25.8 | $ 25.3 | $ 52.6 | $ 35.0 |
Net cash used in investing activities | (4.3) | (25.5) | (13.7) | (27.1) |
Net cash provided by (used in) financing activities | (23.9) | (1.5) | 53.5 | (38.7) |
Effect of exchange rate changes on cash balances | 0.6 | (0.1) | 1.6 | (1.8) |
Net increase (decrease) in cash and cash equivalents | (1.8) | (1.8) | 94.0 | (32.6) |
Cash and cash equivalents, beginning of period | 136.0 | 39.4 | 40.2 | 70.2 |
Cash and cash equivalents, end of period | $ 134.2 | $ 37.6 | $ 134.2 | $ 37.6 |
Additional information on capital expenditures: | ||||
Capital expenditures acquired with cash | 4.3 | 2.4 | 7.5 | 4.0 |
Capital expenditures financed through capital leases | 1.5 | 0.9 | 2.7 | 2.2 |
Total capital expenditures | $ 5.8 | $ 3.3 | $ 10.2 | $ 6.2 |
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Segmented Information | ||||||
(in millions of US dollars) | ||||||
(unaudited) | ||||||
U.S. GAAP, As Reported Quarter Ended |
Proforma Quarter Ended |
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Revenues |
Premise segment |
Cloud segment |
Total |
Premise segment |
Cloud segment |
Total |
Product | $ 194.7 | $ 6.2 | $ 200.9 | $ 194.7 | $ 6.2 | $ 200.9 |
Services | 66.5 | 0.4 | 66.9 | 66.5 | 0.4 | 66.9 |
Cloud recurring | -- | 20.9 | 20.9 | -- | 20.9 | 20.9 |
Total revenues | $ 261.2 | $ 27.5 | $ 288.7 | $ 261.2 | $ 27.5 | $ 288.7 |
Gross margin | ||||||
Product | $ 112.0 | $ 3.7 | $ 115.7 | $ 112.0 | $ 3.7 | $ 115.7 |
Services | 25.8 | 0.2 | 26.0 | 25.8 | 0.2 | 26.0 |
Cloud recurring | -- | 10.1 | 10.1 | -- | 10.1 | 10.1 |
Total gross margin | $ 137.8 | $ 14.0 | $ 151.8 | $ 137.8 | $ 14.0 | $ 151.8 |
U.S. GAAP, As Reported Quarter Ended |
Proforma Quarter Ended |
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Revenues |
Premise segment |
Cloud segment |
Total |
Premise segment |
Cloud segment |
Total |
Product | $ 90.0 | $ 3.1 | $ 93.1 | $ 201.0 | $ 6.1 | $ 207.1 |
Services | 40.0 | -- | 40.0 | 69.7 | 0.6 | 70.3 |
Cloud recurring | -- | 13.5 | 13.5 | -- | 15.6 | 15.6 |
Total revenues | $ 130.0 | $ 16.6 | $ 146.6 | $ 270.7 | $ 22.3 | $ 293.0 |
Gross margin | ||||||
Product | $ 58.5 | $ 1.8 | $ 60.3 | $ 108.7 | $ 3.6 | $ 112.3 |
Services | 14.2 | -- | 14.2 | 22.8 | 0.3 | 23.1 |
Cloud recurring | -- | 6.1 | 6.1 | -- | 7.1 | 7.1 |
Total gross margin | $ 72.7 | $ 7.9 | $ 80.6 | $ 131.5 | $ 11.0 | $ 142.5 |
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Segmented Information | ||||||
(in millions of US dollars) | ||||||
(unaudited) | ||||||
U.S. GAAP, As Reported Six Months Ended |
Proforma Six Months Ended |
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Revenues |
Premise segment |
Cloud segment |
Total |
Premise segment |
Cloud segment |
Total |
Product | $ 354.5 | $ 12.9 | $ 367.4 | $ 381.1 | $ 13.6 | $ 394.7 |
Services | 122.4 | 0.4 | 122.8 | 130.0 | 0.6 | 130.6 |
Cloud recurring | -- | 40.0 | 40.0 | -- | 40.8 | 40.8 |
Total revenues | $ 476.9 | $ 53.3 | $ 530.2 | $ 511.1 | $ 55.0 | $ 566.1 |
Gross margin | ||||||
Product | $ 207.3 | $ 6.9 | $ 214.2 | $ 219.3 | $ 7.2 | $ 226.5 |
Services | 47.4 | 0.2 | 47.6 | 49.4 | 0.2 | 49.6 |
Cloud recurring | -- | 19.4 | 19.4 | -- | 19.7 | 19.7 |
Total gross margin | $ 254.7 | $ 26.5 | $ 281.2 | $ 268.7 | $ 27.1 | $ 295.8 |
U.S. GAAP, As Reported Six Months Ended |
Proforma Six Months Ended |
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Revenues |
Premise segment |
Cloud segment |
Total |
Premise segment |
Cloud segment |
Total |
Product | $ 177.1 | $ 4.3 | $ 181.4 | $ 388.9 | $ 8.5 | $ 397.4 |
Services | 82.7 | -- | 82.7 | 138.4 | 1.0 | 139.4 |
Cloud recurring | -- | 25.6 | 25.6 | -- | 29.7 | 29.7 |
Total revenues | $ 259.8 | $ 29.9 | $ 289.7 | $ 527.3 | $ 39.2 | $ 566.5 |
Gross margin | ||||||
Product | $ 116.5 | $ 2.6 | $ 119.1 | $ 211.2 | $ 5.1 | $ 216.3 |
Services | 30.6 | -- | 30.6 | 46.3 | 0.6 | 46.9 |
Cloud recurring | -- | 11.7 | 11.7 | -- | 13.8 | 13.8 |
Total gross margin | $ 147.1 | $ 14.3 | $ 161.4 | $ 257.5 | $ 19.5 | $ 277.0 |
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Reconciliation of Net Income (Loss) to Adjusted EBITDA | ||||
(in millions of US dollars) | ||||
(unaudited) | ||||
As Reported Quarter Ended |
Proforma Quarter Ended |
As Reported Quarter Ended |
Proforma Quarter Ended |
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Net income (loss) | $ 0.8 | $ 0.8 | $ 2.7 | $ (1.6) |
Adjustments: | ||||
Interest expense | 5.5 | 5.5 | 6.3 | 6.4 |
Income tax expense (recovery) | (2.2) | (2.2) | (1.1) | (2.4) |
Amortization and depreciation | 19.6 | 19.6 | 9.0 | 18.9 |
Foreign exchange loss (gain) | (1.3) | (1.3) | 0.5 | 1.6 |
Special charges and restructuring costs | 10.9 | 10.9 | 2.6 | 7.5 |
Stock-based compensation | 1.7 | 1.7 | 1.0 | 1.1 |
Debt retirement costs | 0.8 | 0.8 | -- | -- |
Acquisition accounting for deferred revenue | 3.0 | 3.0 | -- | 3.0 |
Other | -- | -- | 0.4 | 0.7 |
Adjusted EBITDA | $ 38.8 | $ 38.8 | $ 21.4 | $ 35.2 |
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Reconciliation of Net Income (Loss) to Adjusted EBITDA | ||||
(in millions of US dollars) | ||||
(unaudited) | ||||
As Reported Six Months Ended |
Proforma Six Months Ended |
As Reported Six Months Ended |
Proforma Six Months Ended |
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Net income (loss) | $ (12.8) | $ (30.0) | $ 1.0 | $ (10.4) |
Net loss from discontinued operations | -- | -- | 3.0 | 3.0 |
Net income (loss) from continuing operations | (12.8) | (30.0) | 4.0 | (7.4) |
Adjustments: | ||||
Interest expense | 11.4 | 11.5 | 11.7 | 11.9 |
Income tax expense (recovery) | (7.4) | (13.5) | 0.7 | (2.5) |
Amortization and depreciation | 35.8 | 39.1 | 17.9 | 37.4 |
Foreign exchange loss (gain) | (1.0) | -- | 1.0 | 1.3 |
Special charges and restructuring costs | 24.1 | 39.1 | 4.1 | 9.9 |
Stock-based compensation | 3.0 | 3.0 | 2.1 | 2.4 |
Debt retirement costs | 15.5 | 15.5 | 2.6 | 2.6 |
Acquisition accounting for deferred revenue | 5.8 | 6.9 | -- | 6.9 |
Other | -- | -- | 0.4 | 0.5 |
Adjusted EBITDA from continuing operations | 74.4 | 71.6 | 44.5 | 63.0 |
Adjusted EBITDA from discontinued operations(1) | -- | -- | (0.1) | (0.1) |
Adjusted EBITDA | $ 74.4 | $ 71.6 | $ 44.4 | $ 62.9 |
(1) The reconciliation of net loss from discontinued operations to Adjusted EBITDA from discontinued operations for the six months ended |
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Reconciliation of Net Income (Loss) to Non-GAAP Net Income | ||||
(in millions of US dollars, except per share amounts) | ||||
(unaudited) | ||||
As Reported Quarter Ended |
Proforma Quarter Ended |
As Reported Quarter Ended |
Proforma Quarter Ended |
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Net income (loss) | $ 0.8 | $ 0.8 | $ 2.7 | $ (1.6) |
Income tax expense (recovery) | (2.2) | (2.2) | (1.1) | (2.4) |
Net income (loss), before income taxes | (1.4) | (1.4) | 1.6 | (4.0) |
Adjustments: | ||||
Foreign exchange loss (gain) | (1.3) | (1.3) | 0.5 | 1.6 |
Special charges and restructuring costs | 10.9 | 10.9 | 2.6 | 7.5 |
Stock-based compensation | 1.7 | 1.7 | 1.0 | 1.1 |
Amortization of acquisition-related intangibles assets | 14.0 | 14.0 | 5.6 | 13.0 |
Debt retirement costs | 0.8 | 0.8 | -- | -- |
Acquisition accounting for deferred revenue | 3.0 | 3.0 | -- | 3.0 |
Other | -- | -- | 0.4 | 0.7 |
Non-GAAP net income, before income taxes | 27.7 | 27.7 | 11.7 | 22.9 |
Non-GAAP tax expense(1) | (5.5) | (5.5) | (1.8) | (4.0) |
Non-GAAP net income | $ 22.2 | $ 22.2 | $ 9.9 | $ 18.9 |
. | . | . | ||
Non-GAAP net income per share, diluted: | ||||
Non-GAAP net income per common share | $ 0.21 | $ 0.21 | $ 0.18 | $ 0.19 |
Non-GAAP weighted-average number of common shares outstanding (in millions): | 103.7 | 103.7 | 56.3 | 100.5 |
(1) Non-GAAP tax expense for 2013 is based on an estimated effective tax rate of 15% for |
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Reconciliation of Net Income (Loss) to Non-GAAP Net Income | ||||
(in millions of US dollars, except per share amounts) | ||||
(unaudited) | ||||
As Reported Six Months Ended |
Proforma Six Months Ended |
As Reported Six Months Ended |
Proforma Six Months Ended |
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Net income (loss) from continuing operations | $ (12.8) | $ (30.0) | $ 4.0 | $ (7.4) |
Income tax expense (recovery) | (7.4) | (13.5) | 0.7 | (2.5) |
Net income (loss) from continuing operations, before income taxes | (20.2) | (43.5) | 4.7 | (9.9) |
Adjustments: | ||||
Foreign exchange loss (gain) | (1.0) | -- | 1.0 | 1.3 |
Special charges and restructuring costs | 24.1 | 39.1 | 4.1 | 9.9 |
Stock-based compensation | 3.0 | 3.0 | 2.1 | 2.4 |
Amortization of acquisition-related intangibles assets | 25.3 | 27.8 | 11.2 | 26.0 |
Debt retirement costs | 15.5 | 15.5 | 2.6 | 2.6 |
Acquisition accounting for deferred revenue | 5.8 | 6.9 | -- | 6.9 |
Other | -- | -- | 0.4 | 0.5 |
Non-GAAP net income from continuing operations, before income taxes | 52.5 | 48.8 | 26.1 | 39.7 |
Non-GAAP tax expense(1) | (10.5) | (9.7) | (4.0) | (6.7) |
Non-GAAP net income from continuing operations | 42.0 | 39.1 | 22.1 | 33.0 |
Non-GAAP net loss from discontinued operations | -- | -- | (0.1) | (0.1) |
Non-GAAP net income | $ 42.0 | $ 39.1 | $ 22.0 | $ 32.9 |
Non-GAAP net income per share, diluted: | ||||
Non-GAAP net income per common share from continuing operations | $ 0.44 | $ 0.38 | $ 0.39 | $ 0.33 |
Non-GAAP net loss per common share from discontinued operations | $ -- | $ -- | $ -- | $ -- |
Non-GAAP net income per common share | $ 0.44 | $ 0.38 | $ 0.39 | $ 0.33 |
Non-GAAP weighted-average number of common shares outstanding (in millions): | 96.1 | 103.5 | 56.3 | 100.5 |
(1) Non-GAAP tax expense for 2013 is based on an estimated effective tax rate of 15% for |
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STATEMENT OF OPERATIONS | |||||
QUARTER ENDED |
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(in millions of US dollars) | |||||
(unaudited) | |||||
as reported(1) |
Telepo(2) |
Purchase price adjustments(3) |
Proforma results of operations |
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Revenues | $ 146.6 | $ 149.4 | $ (3.0) | (4) | $ 293.0 |
Cost of revenues | 66.0 | 84.5 | -- | 150.5 | |
Gross margin | 80.6 | 64.9 | (3.0) | 142.5 | |
Expenses: | |||||
Selling, general and administrative | 50.7 | 36.1 | -- | 86.8 | |
Research and development | 13.5 | 18.1 | -- | 31.6 | |
Special charges and restructuring costs | 2.6 | 4.9 | -- | 7.5 | |
Amortization of acquisition-related intangible assets | 5.6 | 2.2 | 5.2 | (5) | 13.0 |
72.4 | 61.3 | 5.2 | 138.9 | ||
Operating income (loss) | 8.2 | 3.6 | (8.2) | 3.6 | |
Interest expense | (6.3) | (0.1) | -- | (6.4) | |
Other expense | (0.3) | (0.9) | -- | (1.2) | |
Income (loss) before income taxes | 1.6 | 2.6 | (8.2) | (4.0) | |
Current income tax recovery (expense) | 3.3 | (0.7) | -- | 2.6 | |
Deferred income tax recovery (expense) | (2.2) | 0.4 | 1.6 | (6) | (0.2) |
Net income (loss) | $ 2.7 | $ 2.3 | $ (6.6) | $ (1.6) | |
(1) Consists of the results of operations of |
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(2) Consists of the results of operations of |
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(3) Consists of purchase price allocation adjustments relating to |
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(4) Relates to the reduction in revenues as a result of the valuation of deferred revenue being below the historical book value. | |||||
(5) Relates to the amortization of intangibles acquired in the acquisition of |
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(6) Relates to the tax effect on the above adjustments using an effective tax rate of 20%. | |||||
STATEMENT OF OPERATIONS | |||||
SIX MONTHS ENDED |
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(in millions of US dollars) | |||||
(unaudited) | |||||
as reported(1) |
Telepo(2) |
Purchase price adjustments(3) |
Proforma results of operations |
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Revenues | $ 530.2 | $ 37.0 | $ (1.1) | (4) | $ 566.1 |
Cost of revenues | 249.0 | 21.3 | -- | 270.3 | |
Gross margin | 281.2 | 15.7 | (1.1) | 295.8 | |
Expenses: | |||||
Selling, general and administrative | 168.7 | 13.7 | -- | 182.4 | |
Research and development | 58.2 | 5.6 | -- | 63.8 | |
Special charges and restructuring costs | 24.1 | 15.0 | -- | 39.1 | |
Amortization of acquisition-related intangible assets | 25.3 | 0.7 | 1.8 | (5) | 27.8 |
276.3 | 35.0 | 1.8 | 313.1 | ||
Operating income (loss) | 4.9 | (19.3) | (2.9) | (17.3) | |
Interest expense | (11.4) | (0.1) | -- | (11.5) | |
Debt retirement costs | (15.5) | -- | -- | (15.5) | |
Other income (loss) | 1.8 | (1.0) | -- | 0.8 | |
Loss before income taxes | (20.2) | (20.4) | (2.9) | (43.5) | |
Current income tax recovery (expense) | (0.3) | 5.5 | -- | 5.2 | |
Deferred income tax recovery (expense) | 7.7 | -- | 0.6 | (6) | 8.3 |
Net loss | $ (12.8) | $ (14.9) | $ (2.3) | $ (30.0) | |
(1) Consists of the results of operations of |
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(2) Consists of the results of operations of |
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(3) Consists of purchase price allocation adjustments relating to |
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(4) Relates to the reduction in revenues as a result of the valuation of deferred revenue being below the historical book value. | |||||
(5) Relates to the amortization of intangibles acquired in the acquisition of |
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(6) Relates to the tax effect on the above adjustments using an effective tax rate of 20%. | |||||
STATEMENT OF OPERATIONS | |||||
SIX MONTHS ENDED |
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(in millions of US dollars) | |||||
(unaudited) | |||||
as reported(1) |
Telepo(2) |
Purchase price adjustments(3) |
Proforma results of operations |
||
Revenues | $ 289.7 | $ 283.7 | $ (6.9) | (4) | $ 566.5 |
Cost of revenues | 128.3 | 161.2 | -- | 289.5 | |
Gross margin | 161.4 | 122.5 | (6.9) | 277.0 | |
Expenses: | |||||
Selling, general and administrative | 99.6 | 73.1 | -- | 172.7 | |
Research and development | 27.3 | 36.9 | -- | 64.2 | |
Special charges and restructuring costs | 4.1 | 5.8 | -- | 9.9 | |
Amortization of acquisition-related intangible assets | 11.2 | 4.5 | 10.3 | (5) | 26.0 |
142.2 | 120.3 | 10.3 | 272.8 | ||
Operating income (loss) from continuing operations | 19.2 | 2.2 | (17.2) | 4.2 | |
Interest expense | (11.7) | (0.2) | -- | (11.9) | |
Debt retirement costs | (2.6) | -- | -- | (2.6) | |
Fair value adjustment on derivative instruments | -- | 0.4 | -- | 0.4 | |
Other income (expense) | (0.2) | 0.2 | -- | -- | |
Income from continuing operations, before income taxes | 4.7 | 2.6 | (17.2) | (9.9) | |
Current income tax recovery (expense) | 3.9 | (1.4) | -- | 2.5 | |
Deferred income tax recovery (expense) | (4.6) | 1.2 | 3.4 | (6) | -- |
Net income (loss) from continuing operations | 4.0 | 2.4 | (13.8) | (7.4) | |
Net loss from discontinued operations | (3.0) | -- | -- | (3.0) | |
Net income (loss) | $ 1.0 | $ 2.4 | $ (13.8) | $ (10.4) | |
(1) Consists of the results of operations of |
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(2) Consists of the results of operations of |
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(3) Consists of purchase price allocation adjustments relating to |
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(4) Relates to the reduction in revenues as a result of the valuation of deferred revenue being below the historical book value. | |||||
(5) Relates to the amortization of intangibles acquired in the acquisition of |
|||||
(6) Relates to the tax effect on the above adjustments using an effective tax rate of 20%. | |||||
CONTACT:Source:Amy MacLeod (media) 613-592-2122 x71245 amy_macleod@mitel.comCynthia Navarro (industry analysts) 469-574-8113 cynthia_navarro@mitel.comMichael McCarthy (investor relations) 469-574-8134 michael_mccarthy@mitel.com
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