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Revenue of
Year-over-year revenue growth across all Business Units
OTTAWA,
Financial Highlights
"We are pleased with our execution in the first quarter of fiscal 2012 where we again exceeded our guidance, implemented our new strategy and initiated organizational changes to position Mitel for growth," said
Mitel recorded restructuring charges of
Non-GAAP net income for the first quarter of fiscal 2012 was
Business Unit Results
Business Highlights
- Hancock Estabrook selected Mitel's Freedom architecture to allow its attorneys the ability to work flexibly and effectively from any location. The solution provides seamless, unified communications between the firm's 60+ lawyers and their clients.
- Hospitality wins include the
Hotel Palace Madrid ,Hotel J Stockholm and the Mandarin Hotel inNew York City
"In our first quarter, we saw year-over-year revenue growth across all three business units," stated
Business Outlook
Mitel has set the following financial performance guidance for the second quarter of fiscal year 2012 ending
Conference Call Information
Mitel will host an investor conference call and live webcast today at
Adjusted EBITDA
For a reconciliation of Adjusted EBITDA to net income, the most directly comparable U.S. GAAP measure, see attached "Reconciliation of Net Income to Adjusted EBITDA."
Adjusted EBITDA is not a measure calculated in accordance with U.S. GAAP. Adjusted EBITDA should not be considered as an alternative to net income, income from operations or any other measure of financial performance calculated and presented in accordance with U.S. GAAP. We prepare Adjusted EBITDA to eliminate the impact of items that we do not consider indicative of our core operating performance. We encourage you to evaluate these adjustments and the reasons we consider them appropriate, as well as the material limitations of non-GAAP measures and the manner in which we compensate for those limitations. See "Selected Financial Data" in Mitel's Annual Report on Form 10-K, which has been filed with the
Non-GAAP Financial Measurements
To supplement our consolidated financial statements presented on a GAAP basis, Mitel uses non-GAAP measures of operating results, net income and income per share, which are adjusted to exclude certain costs, expenses, gains and losses we believe appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future. These adjustments to our current period and comparative prior period GAAP results are made with the intent of providing both management and investors a more complete understanding of Mitel's underlying operational results and trends and our marketplace performance. For example, the non-GAAP results are an indication of our baseline performance before gains, losses or other charges that are considered by management to be outside of our core operating results. In addition, these adjusted non-GAAP results are among the primary indicators management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income or diluted net income per share prepared in accordance with generally accepted accounting principles in the U.S.
For a reconciliation of non-GAAP net income to net income, the most directly comparable U.S. GAAP measure, see attached "Reconciliation of Net Income to Non-GAAP Net Income."
Forward-Looking Statements
Investors are cautioned that Mitel's historical performance has in the past deviated, in some cases materially, from its financial performance targets. Given that Mitel's sales occur disproportionately in the final weeks of a quarter, Mitel does not intend to update its financial performance targets during or after the quarter and will not comment or report on its second quarter results any more than the information included in this release until after it announces its financial results for the second quarter of fiscal year 2012 and holds its conference call with respect to such results. Some of the statements in this press release, including the information regarding our financial performance targets for the second quarter of fiscal year 2012, are forward-looking statements within the meaning of applicable U.S. and Canadian securities laws. Statements that include the words "target," "outlook," "may," "will," "should," "could," "estimate," "continue," "expect," "intend," "plan," "predict," "potential," "believe," "project," "anticipate" and similar statements of a forward-looking nature, or the negatives of those statements, identify forward-looking statements. In particular, this press release contains forward-looking statements pertaining to, among other matters: our future economic performance, profitability and financial condition; general global economic conditions; our business strategy; plans and objectives for future operations; our industry and the growth in the markets in which we compete; the costs of operating as a public company; and our research and development expenditures. These forward-looking statements reflect currently available information or our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. In making these statements, we have made assumptions regarding, among other things:
Actual events or Mitel's results, performance, financial position or achievements could differ materially from those contemplated, expressed or implied by such forward-looking statements as a result of various risks and uncertainties, including, without limitation:
Additional risks are discussed herein and under the heading "Risk Factors" in Mitel's Annual Report on Form 10-K for the fiscal year ended
About Mitel
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Mitel and the Mitel logo are registered trademarks of
All other trademarks are the property of their respective owners.
MITL-F
| MITEL NETWORKS CORPORATION | ||
| (incorporated under the laws of Canada) | ||
| CONSOLIDATED BALANCE SHEETS | ||
| (in millions of US dollars) | ||
| (unaudited) | ||
| July 31, | April 30, | |
| 2011 | 2011 | |
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 71.3 | $ 73.9 |
| Accounts receivable | 113.8 | 127.5 |
| Sales-type lease receivables | 18.8 | 20.0 |
| Inventories | 29.0 | 27.1 |
| Deferred tax asset | 7.7 | 5.9 |
| Other current assets | 38.5 | 37.1 |
| 279.1 | 291.5 | |
| Non-current portion of sales-type lease receivables | 27.2 | 30.1 |
| Deferred tax asset | 90.1 | 91.1 |
| Property and equipment | 15.8 | 15.7 |
| Identifiable intangible assets | 95.2 | 100.6 |
| Goodwill | 134.5 | 134.5 |
| Other non-current assets | 8.3 | 8.7 |
| $ 650.2 | $ 672.2 | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable and accrued liabilities | $ 103.4 | $ 107.0 |
| Current portion of deferred revenue | 37.7 | 40.0 |
| Current portion of long-term debt | 2.0 | 16.4 |
| 143.1 | 163.4 | |
| Long-term debt | 308.4 | 306.9 |
| Lease recourse liability | 6.8 | 7.1 |
| Long-term portion of deferred revenue | 10.3 | 13.2 |
| Deferred tax liability | 49.9 | 50.5 |
| Pension liability | 67.5 | 61.4 |
| Other non-current liabilities | 20.5 | 20.2 |
| 606.5 | 622.7 | |
| Shareholders' equity | 43.7 | 49.5 |
| $ 650.2 | $ 672.2 | |
| MITEL NETWORKS CORPORATION | ||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||
| (in millions of US dollars, except per share amounts) | ||
| (unaudited) | ||
| Quarter Ended | Quarter Ended | |
| July 31, 2011 | July 31, 2010 | |
| Revenues | $ 164.1 | $ 160.0 |
| Cost of revenues | 83.8 | 81.8 |
| Gross margin | 80.3 | 78.2 |
| Expenses: | ||
| Selling, general and administrative | 57.1 | 52.6 |
| Research and development | 15.1 | 14.8 |
| Special charges and restructuring costs (recovery) | 4.8 | (0.1) |
| Loss on litigation settlement | 0.5 | -- |
| 77.5 | 67.3 | |
| Operating Income | 2.8 | 10.9 |
| Interest expense | (4.8) | (5.1) |
| Fair value adjustment on derivative instruments | -- | 0.8 |
| Other income (expense), net | (0.4) | 0.1 |
| Income (loss) before income taxes | (2.4) | 6.7 |
| Current income tax recovery (expense) | (1.8) | (1.0) |
| Deferred income tax recovery (expense) | 1.4 | 1.1 |
| Net income (loss) | $ (2.8) | $ 6.8 |
| Net income (loss) per common share | ||
| Basic | $ (0.05) | $ 0.13 |
| Diluted | $ (0.05) | $ 0.12 |
| Weighted-average number of common shares outstanding (in millions): | ||
| Basic | 53.3 | 52.8 |
| Diluted | 53.3 | 56.5 |
| MITEL NETWORKS CORPORATION | ||
| Cash flow information | ||
| (in millions of US dollars) | ||
| (unaudited) | ||
| Quarter Ended | Quarter Ended | |
| July 31, 2011 | July 31, 2010 | |
| Cash provided by (used in) | ||
| Net cash provided by operating activities | $ 12.4 | $ 9.6 |
| Net cash used in investing activities | (2.6) | (0.1) |
| Net cash used in financing activities | (12.1) | (2.0) |
| Effect of exchange rate changes on cash balances | (0.3) | 0.6 |
| Net increase (decrease) in cash and cash equivalents | (2.6) | 8.1 |
| Cash and cash equivalents, beginning of period | 73.9 | 76.6 |
| Cash and cash equivalents, end of period | $ 71.3 | $ 84.7 |
| Additional information on capital expenditures | ||
| Capital expenditures acquired with cash | 2.6 | 1.0 |
| Capital expenditures financed through capital leases | 0.1 | 0.4 |
| Total capital expenditures | $ 2.7 | $ 1.4 |
| MITEL NETWORKS CORPORATION | ||
| Reconciliation of Net Income to Non-GAAP Net Income | ||
| (in millions of US dollars, except per share amounts) | ||
| (unaudited) | ||
| Quarter Ended | Quarter Ended | |
| July 31, 2011 | July 31, 2010 | |
| Net income (loss) | $ (2.8) | $ 6.8 |
| Income tax expense (recovery) | 0.4 | (0.1) |
| Net income (loss) before income tax | (2.4) | 6.7 |
| Adjustments: | ||
| Foreign exchange loss | 0.6 | 0.1 |
| Fair value adjustment on derivative instruments | -- | (0.8) |
| Special charges and restructuring costs | 4.8 | (0.1) |
| Stock-based compensation | 1.3 | 0.8 |
| Loss on litigation settlement | 0.5 | -- |
| Amortization of acquisition-related intangibles assets | 5.6 | 5.6 |
| Non-GAAP net income before income tax | 10.4 | 12.3 |
| Non-GAAP tax expense(1) | (1.2) | (1.5) |
| Non-GAAP net income | $ 9.2 | $ 10.8 |
| Non-GAAP net income per common share | $ 0.16 | $ 0.19 |
| Weighted-average number of common shares outstanding (in millions): | 55.8 | 56.5 |
| (1) Non-GAAP tax expense is based on an estimated effective tax rate of 12.0%. | ||
| MITEL NETWORKS CORPORATION | ||
| Reconciliation of Net Income to Adjusted EBITDA | ||
| (in millions of US dollars) | ||
| (unaudited) | ||
| Quarter Ended | Quarter Ended | |
| July 31, 2011 | July 31, 2010 | |
| Net income (loss) | $ (2.8) | $ 6.8 |
| Adjustments: | ||
| Interest expense | 4.8 | 5.1 |
| Income tax expense (recovery) | 0.4 | (0.1) |
| Amortization and depreciation | 8.4 | 8.6 |
| Foreign exchange loss | 0.6 | 0.1 |
| Fair value adjustment on derivative instruments | -- | (0.8) |
| Special charges and restructuring costs | 4.8 | (0.1) |
| Stock-based compensation | 1.3 | 0.8 |
| Loss on litigation settlement | 0.5 | -- |
| Adjusted EBITDA | $ 18.0 | $ 20.4 |
| MITEL NETWORKS CORPORATION | ||
| Segmented Information | ||
| (in millions of US dollars) | ||
| (unaudited) | ||
| Quarter Ended | Quarter Ended | |
| July 31, 2011 | July 31, 2010 | |
| Revenues | ||
| Mitel Communications Solutions | $ 124.4 | $ 123.5 |
| NetSolutions | 20.0 | 19.2 |
| DataNet | 19.7 | 17.3 |
| Total revenues | $ 164.1 | $ 160.0 |
| Segment income | ||
| Mitel Communications Solutions | $ 23.8 | $ 25.6 |
| NetSolutions | 4.5 | 4.4 |
| DataNet | 2.1 | 1.1 |
| Total segment income | $ 30.4 | $ 31.1 |
CONTACT:Cynthia Hiponia (investor relations) 613-592-2122 x71997 investorrelations@mitel.comStephen Beamish (media) 613-592-2122 x72821 stephen_beamish@Mitel.comJay Nichols (analyst relations) 415-992-3210 jnichols@sterlingpr.com
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