Operational execution leads to strong cash
position enabling a $23 million debt pay down subsequent to 2016
fiscal year end
Mitel® (Nasdaq:MITL) (TSX:MNW), a global leader in enterprise
communications, today announced financial results for the fourth
quarter ended December 31, 2016.
“In the fourth quarter, Mitel’s strong operational execution
enabled the company to deliver a solid quarter in a highly
competitive market driven by technology migration and vendor
consolidation,” said Richard McBee, Mitel’s Chief Executive
Officer. “Mitel continued to gain share with a particularly
strong performance across Europe, and executed well against our
Cloud strategy driving a 35% increase in hosted seats and 60%
increase in total seats year-over-year.”
“The pending divestiture of the Mobile Division, expected to
close in the first quarter, resulted in a goodwill impairment
charge of $213 million, a GAAP loss of $209.2 million and a GAAP
loss per share of $1.72. Our non-GAAP earnings per share of
$0.25 and adjusted EBITDA of $56 million, which both exclude the
impairment charge and other items, exceeded analyst consensus
estimates,” commented Steve Spooner, Chief Financial Officer.
“With continued focus on operational execution we improved our cash
position by $27 million from third quarter levels, enabling us to
pay down $23 million in debt shortly after the quarter closed.”
Financial Highlights from Continuing
Operations |
in millions(except per share data) |
Q4 2016 |
Q4 2015 |
HistoricalCurrency |
ConstantCurrency1 |
GAAP Revenues |
$ |
259.8 |
$ |
277.0 |
$ |
272.7 |
Non-GAAP Revenues2 |
$ |
259.8 |
$ |
277.5 |
$ |
273.2 |
GAAP Net Income (Loss) |
$ |
13.9 |
$ |
2.5 |
$ |
1.5 |
Non-GAAP Net Income3 |
$ |
27.3 |
$ |
31.3 |
$ |
30.3 |
GAAP EPS - basic |
$ |
0.11 |
$ |
0.02 |
$ |
0.01 |
Non-GAAP EPS4 |
$ |
0.22 |
$ |
0.25 |
$ |
0.24 |
Adjusted EBITDA5 |
$ |
42.7 |
$ |
49.3 |
$ |
48.3 |
Financial Highlights from Continuing and Discontinued
Operations |
in millions(except per share data) |
Q4 2016 |
Q4 2015 |
HistoricalCurrency |
ConstantCurrency1 |
Total Revenues from Continuing and Discontinued
Operations6 |
$ |
310.9 |
|
$ |
342.0 |
|
$ |
337.0 |
|
Non-GAAP Revenues2 |
$ |
310.9 |
|
$ |
335.7 |
|
$ |
330.7 |
|
GAAP Net Income (Loss) |
($ |
209.2 |
) |
($ |
6.3 |
) |
($ |
7.5 |
) |
Non-GAAP Net Income3 |
$ |
32.0 |
|
$ |
36.3 |
|
$ |
35.1 |
|
GAAP EPS - basic |
($ |
1.72 |
) |
($ |
0.05 |
) |
($ |
0.06 |
) |
Non-GAAP EPS4 |
$ |
0.25 |
|
$ |
0.29 |
|
$ |
0.28 |
|
Adjusted EBITDA5 |
$ |
55.6 |
|
$ |
62.2 |
|
$ |
61.0 |
|
1 – Constant currency is a non-GAAP measure that adjusts Q4-2015
results by using the same foreign currency exchange rates as in
Q4-2016. See “Non-GAAP Financial Measures” below.2 – Non-GAAP
revenues is a non-GAAP measure that excludes the effect of purchase
price accounting adjustments. For a Reconciliation of
Non-GAAP revenues to GAAP revenues, please refer to the segmented
information in this release. See “Non-GAAP Financial
Measures” below.3 - Non-GAAP Net Income is a non-GAAP measure
defined as Net Income (Loss), adjusted for items as noted in the
table included in this press release under “Reconciliation of Net
Income (Loss) to Non-GAAP Net Income”. See “Non-GAAP Financial
Measurements” below.4 - Non-GAAP EPS (earnings per share), or
Non-GAAP net income per common share, is a non-GAAP measure defined
as Non-GAAP Net Income divided by weighted average number of common
shares outstanding, fully diluted. See the table included in
this press release under “Reconciliation of Net Income (Loss) to
Non-GAAP Net Income.” See “Non-GAAP Financial Measurements” below.5
– Adjusted EBITDA is a non-GAAP measure defined as Net Income
(Loss), adjusted for items as noted in the table included in this
press release under “Reconciliation of Net Income (Loss) to
Adjusted EBITDA”. See “Non-GAAP Financial Measurements” below.6 –
Total Revenues from Continuing and Discontinued Operations of
$310.9 million equal Revenues from Continuing Operations of $259.8
million plus Revenues from Discontinued Operations of $51.1
million.
Business Highlights
- Hosted cloud seats grew by 49,000 during the quarter, up from
the 43,000 seats added during Q3-2016 and now stand at 543,000
- Mitel achieved the highest score for satisfying Hybrid UC
Requirements among the 16 providers evaluated in Gartner’s Critical
Capabilities for Unified Communications as a Service (UCaaS).
- City of Marseille selected Mitel to replace an installed Avaya
system in support of their taking initial steps to digitally
transform the organization’s 300 locations and 7,000 seats.
Mitel competed for the business against Cisco, Avaya and
Alcatel-Lucent.
Business Outlook
Mitel has set the following financial performance guidance for
Continuing Operations for the quarter ending March 31,
2017.
|
Q1-2017
Guidance |
GAAP Revenues |
$210 million to $230
million |
GAAP Gross Margin
% |
52.0% to 54.0% |
Adjusted EBITDA % |
6.5% to 10.5% |
Non-GAAP Net
Income |
2.0% to 5.0% |
Diluted Share
count |
126,000,000 |
A reconciliation between the Business Outlook for Q1-2017 on a
GAAP and non-GAAP basis is provided in the table entitled
”Reconciliation of Guidance-Non-GAAP Net Income and Adjusted EBITDA
to GAAP Net Income (Loss), before income taxes” located in the
tables at the end of this release.
Conference Call Information
Mitel will host an investor conference call and live webcast
today at 8:30 a.m. ET (5:30 a.m. PT) to discuss its financial
results for the fourth quarter ended December 31, 2016. To access
the conference call, dial 888-734-0328. Callers outside the U.S.
and Canada should dial 678-894-3054. The live webcast will be
accessible on Mitel's investor relations website at
www.mitel.com. It will be archived and available on this site
for replay on Thursday, February 23, 2017 after 12:00 p.m.
ET. We have also provided a slide deck to help illustrate our
financial results. It has been posted on www.mitel.com.
Our Form 10-K is expected to be filed with the SEC on or before
March 1, 2017 and will include our complete financial results for
the year ended December 31, 2016.
Investor Analyst Day in New York on March
7th
Mitel will host a meeting for analysts and institutional
investors at the Le Parker Meridien Hotel in New York City on
Tuesday, March 7, 2017.
Senior members of Mitel's management team will host a series of
presentations and be available to answer analyst and investor
questions. Product demonstrations will also be a featured
part of the presentation program. The event will begin at
8:00 a.m. ET and conclude by approximately 11:30 a.m. ET. A
live audio webcast and replay of the event will be made available
on the Investor Relations section of Mitel's website at
www.mitel.com.
Analysts and institutional investors interested in attending
should please contact Michael McCarthy, Vice President – Investor
Relations for Mitel at michael.mccarthy@mitel.com to confirm their
attendance.
Non-GAAP Financial Measurements
This press release includes references to non-GAAP financial
measures including Adjusted EBITDA, non-GAAP net income, non-GAAP
EPS (earnings per share) or non-GAAP net income per common share,
non-GAAP revenues, non-GAAP gross margin and Constant Currency.
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 and other 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 U.S. generally accepted
accounting principles. Please see the reconciliations of non-GAAP
financial measures to the most directly comparable U.S. GAAP
measure attached to this release.
Mitel completed the acquisition of Mavenir Systems Inc. on April
29, 2015. “As reported” results in this release and the
attached tables refer to the U.S. GAAP results of Mitel, which
include the results of Mavenir from the date of acquisition.
Pro-forma results reflect the results of the company as if it had
been fully combined with Mavenir Systems for the full presented
period. Non-GAAP Revenues and non-GAAP Gross Margin have been
adjusted to exclude the effect of purchase accounting. These
adjustments have no impact on Mitel’s business or cash flows, but
generally adversely affect the Company`s reported revenues and
gross margin in the period following an acquisition. For a
reconciliation of Mitel’s as-reported results to the pro-forma
results and non-GAAP results, please see the tables attached to
this release as well as the Form 8-K presenting combined historical
results of Mitel and Mavenir filed with the SEC on August 6,
2015.
Forward Looking Statements
Some of the statements in this communication 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 believe, 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 Mitel and are subject to a number of risks and
uncertainties. These statements are based on many assumptions and
factors, including general economic and market conditions, industry
conditions, operational and other factors. Any changes in these
assumptions or other factors could cause actual results to differ
materially from current expectations. All forward-looking
statements attributable to Mitel, or persons acting on its behalf,
are expressly qualified in their entirety by the cautionary
statements set forth in this paragraph. Undue reliance should not
be placed on such statements. In addition, material risks that
could cause actual results to differ from forward-looking
statements include: the inherent uncertainty associated with
financial or other projections; the ability to recognize the
anticipated benefits from the divestment of Mitel’s mobile
division; the ability to obtain required regulatory approvals for
the divestment of the Mobile division and the timing of obtaining
such approvals; the risk that the conditions to the divestment of
the Mobile division are not satisfied on a timely basis or at all
and the failure of the divestment of the Mobile division to close
for any other reason; risks associated with the non-cash
consideration to be received by Mitel in connection with the
divestment of the Mobile division; the impact to Mitel’s business
that could result from the announcement of the divestment of the
Mobile division; the anticipated size of the markets and continued
demand for Mitel products and services; access to available
financing on a timely basis and on reasonable terms; Mitel’s
ability to achieve or sustain profitability in the future;
fluctuations in quarterly and annual revenues and operating
results; fluctuations in foreign exchange rates; current and
ongoing global economic instability, political unrest and related
sanctions; intense competition; reliance on channel partners for a
significant component of sales; dependence upon a small number of
outside contract manufacturers to manufacture products; and,
Mitel’s ability to successfully implement and achieve its business
strategies, including its growth of the company through
acquisitions and the integration of recently acquired businesses
and realization of synergies. Additional risks are described under
the heading “Risk Factors” in Mitel’s Annual Report on Form 10-K
for the year ended December 31, 2015 and in Mitel’s Quarterly
Report on Form 10-Q for the quarter ended September 30, 2016 filed
with the U.S. Securities and Exchange Commission (the “SEC”) and
Canadian securities regulatory authorities on February 29, 2016 and
November 3, 2016, respectively. Forward-looking statements speak
only as of the date they are made. Except as required by law, Mitel
has no intention or obligation to update or to publicly announce
the results of any revisions to any of the forward-looking
statements to reflect actual results, future events or
developments, changes in assumptions or changes in other factors
affecting the forward-looking statements.
About Mitel
A global market leader in enterprise and mobile communications
powering more than 2 billion business connections every day, Mitel
(Nasdaq:MITL) (TSX:MNW) helps businesses and service providers
connect, collaborate and provide innovative services to their
customers. Our innovation and communications experts serve more
than 60 million business users in more than 100 countries.
For more information, go to www.mitel.com and follow us on Twitter
@Mitel.
Mitel is the registered trademark of Mitel Networks
Corporation.
All other trademarks are the property of their respective
owners.
MITL-F
|
CY15 |
CY15 |
CY15 |
CY15 |
CY16 |
CY16 |
CY16 |
CY16 |
|
Q1 |
Q2 |
Q3 |
Q4 |
Q1 |
Q2 |
Q3 |
Q4 |
Total Cloud Seats |
|
1,375,635 |
|
|
1,611,172 |
|
|
1,763,857 |
|
|
1,929,882 |
|
|
2,194,040 |
|
|
2,468,791 |
|
|
2,654,978 |
|
|
3,090,361 |
|
Recurring Cloud Seats |
|
304,956 |
|
|
329,620 |
|
|
370,093 |
|
|
401,737 |
|
|
419,766 |
|
|
450,856 |
|
|
494,302 |
|
|
543,725 |
|
Retail Cloud Monthly ARPU |
$ |
50 |
|
$ |
49 |
|
$ |
49 |
|
$ |
49 |
|
$ |
50 |
|
$ |
50 |
|
$ |
47 |
|
$ |
49 |
|
Retail Cloud Avg Seats per Customer |
$ |
39 |
|
$ |
38 |
|
$ |
39 |
|
$ |
39 |
|
$ |
37 |
|
$ |
37 |
|
$ |
37 |
|
$ |
37 |
|
Retail Cloud Monthly Customer Churn |
|
0.8 |
% |
|
0.7 |
% |
|
0.9 |
% |
|
0.7 |
% |
|
0.6 |
% |
|
0.7 |
% |
|
0.7 |
% |
|
0.8 |
% |
MITEL NETWORKS
CORPORATION |
|
SUMMARY CONSOLIDATED BALANCE
SHEETS |
|
(in millions of US
dollars) |
|
(unaudited) |
|
|
December 31, |
December 31, |
|
|
2016 |
2015 |
|
|
|
|
|
ASSETS |
|
|
|
Current
assets: |
|
|
|
Cash and
cash equivalents |
$ |
97.3 |
$ |
82.2 |
|
Accounts
receivable |
|
186.3 |
|
209.3 |
|
Sales-type lease receivables |
|
5.8 |
|
12.6 |
|
Inventories |
|
74.9 |
|
87.1 |
|
Other
current assets |
|
57.7 |
|
44.2 |
|
Assets of
component held for sale, current |
|
121.3 |
|
117.1 |
|
|
|
|
|
|
|
543.3 |
|
552.5 |
|
Non-current portion of sales-type lease receivables |
|
6.7 |
|
17.0 |
|
Deferred
tax asset |
|
185.2 |
|
173.4 |
|
Property
and equipment |
|
39.1 |
|
43.9 |
|
Identifiable intangible assets |
|
100.4 |
|
134.2 |
|
Goodwill |
|
346.3 |
|
346.3 |
|
Other
non-current assets |
|
7.9 |
|
7.7 |
|
Assets
of component held for sale, non-current |
|
332.5 |
|
581.6 |
|
|
|
|
|
|
$ |
1,561.4 |
$ |
1,856.6 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable and accrued liabilities |
$ |
200.6 |
$ |
200.7 |
|
Current
portion of deferred revenue |
|
88.0 |
|
90.3 |
|
Current
portion of long-term debt |
|
38.9 |
|
11.7 |
|
Liabilities of component held for sale, current |
|
58.3 |
|
70.7 |
|
|
|
|
|
|
|
385.8 |
|
373.4 |
|
Long-term debt |
|
547.1 |
|
633.6 |
|
Long-term portion of deferred revenue |
|
39.4 |
|
38.0 |
|
Deferred
tax liability |
|
10.0 |
|
16.4 |
|
Pension
liability |
|
145.5 |
|
126.6 |
|
Other
non-current liabilities |
|
25.9 |
|
28.3 |
|
Liabilities of component held for sale, non-current |
|
24.8 |
|
35.4 |
|
|
|
|
|
|
|
1,178.5 |
|
1,251.7 |
|
|
|
|
|
Shareholders’ equity |
|
382.9 |
|
604.9 |
|
|
|
|
|
|
$ |
1,561.4 |
$ |
1,856.6 |
|
|
|
|
|
MITEL NETWORKS CORPORATION |
SUMMARY STATEMENT OF OPERATIONS
INFORMATION |
(in millions of US dollars) |
(unaudited) |
|
|
Quarter Ended December 31, 2016 (US GAAP, except
asindicated otherwise) |
|
Quarter Ended December 31, 2015 (US GAAP, except
asindicated otherwise) |
|
|
|
|
Non-GAAP Revenues |
$ |
259.8 |
|
|
$ |
277.5 |
|
Less:
Purchase accounting revenue adjustments |
|
- |
|
|
|
(0.5 |
) |
Total
Revenues |
|
259.8 |
|
|
|
277.0 |
|
|
|
|
|
Non-GAAP Cost of
Revenues |
|
119.5 |
|
|
|
129.7 |
|
Less:
Purchase accounting cost of revenue adjustments |
|
- |
|
|
|
- |
|
Total Cost of
revenues |
|
119.5 |
|
|
|
129.7 |
|
|
|
|
|
Non-GAAP Gross
Margin |
|
140.3 |
|
|
|
147.8 |
|
Less:
Purchase accounting gross margin adjustments |
|
- |
|
|
|
(0.5 |
) |
Total Gross
margin |
|
140.3 |
|
|
|
147.3 |
|
|
|
|
|
Expenses: |
|
|
|
Selling,
general and administrative |
|
84.2 |
|
|
|
82.8 |
|
Research
and development |
|
21.8 |
|
|
|
24.8 |
|
Special
charges and restructuring costs |
|
13.0 |
|
|
|
14.9 |
|
Amortization of acquisition-related intangible assets |
|
8.8 |
|
|
|
9.2 |
|
|
|
127.8 |
|
|
|
131.7 |
|
|
|
|
|
Operating income |
|
12.5 |
|
|
|
15.6 |
|
Interest expense |
|
(4.1 |
) |
|
|
(4.9 |
) |
Other income |
|
0.8 |
|
|
|
0.8 |
|
Income from continuing
operations, before income taxes |
|
9.2 |
|
|
|
11.5 |
|
Current income tax
recovery (expense) |
|
(13.7 |
) |
|
|
(10.2 |
) |
Deferred income tax
recovery (expense) |
|
18.4 |
|
|
|
1.2 |
|
Net income from
continuing operations |
|
13.9 |
|
|
|
2.5 |
|
Net loss from
discontinued operations |
|
(223.1 |
) |
|
|
(8.8 |
) |
Net loss |
$ |
(209.2 |
) |
|
$ |
(6.3 |
) |
|
|
|
|
Non-GAAP measures: |
|
|
|
Adjusted EBITDA from
continuing operations |
$ |
42.7 |
|
|
$ |
49.3 |
|
Adjusted EBITDA from
discontinued operations |
$ |
12.9 |
|
|
$ |
12.9 |
|
Adjusted EBITDA |
$ |
55.6 |
|
|
$ |
62.2 |
|
|
|
|
|
Non-GAAP net income
from continuing operations |
$ |
27.3 |
|
|
$ |
31.3 |
|
Non-GAAP net income
from discontinued operations |
$ |
4.7 |
|
|
$ |
5.0 |
|
Non-GAAP net
income |
$ |
32.0 |
|
|
$ |
36.3 |
|
|
|
|
|
|
|
|
|
MITEL NETWORKS CORPORATION |
SUMMARY STATEMENT OF OPERATIONS
INFORMATION |
(in millions of US dollars) |
(unaudited) |
|
|
Year Ended December 31, 2016 (US GAAP, except
asindicated otherwise) |
|
Year Ended December 31, 2015 (US GAAP, except
asindicated otherwise) |
|
|
|
|
Non-GAAP Revenues |
$ |
987.6 |
|
|
$ |
1,028.7 |
|
Less:
Purchase accounting revenue adjustments |
|
- |
|
|
|
(2.9 |
) |
Total
Revenues |
|
987.6 |
|
|
|
1,025.8 |
|
|
|
|
|
Non-GAAP Cost of
Revenues |
|
455.6 |
|
|
|
480.6 |
|
Less:
Purchase accounting cost of revenue adjustments |
|
- |
|
|
|
- |
|
Total Cost of
revenues |
|
455.6 |
|
|
|
480.6 |
|
|
|
|
|
Non-GAAP Gross
Margin |
|
532.0 |
|
|
|
548.1 |
|
Less:
Purchase accounting gross margin adjustments |
|
- |
|
|
|
(2.9 |
) |
Total Gross
margin |
|
532.0 |
|
|
|
545.2 |
|
|
|
|
|
Expenses (income): |
|
|
|
Selling,
general and administrative |
|
339.8 |
|
|
|
331.0 |
|
Research
and development |
|
96.5 |
|
|
|
102.2 |
|
Special
charges and restructuring costs |
|
70.8 |
|
|
|
47.5 |
|
Amortization of acquisition-related intangible assets |
|
35.1 |
|
|
|
48.2 |
|
Income
from termination fee received |
|
(60.0 |
) |
|
|
- |
|
|
|
482.2 |
|
|
|
528.9 |
|
|
|
|
|
Operating income |
|
49.8 |
|
|
|
16.3 |
|
Interest expense |
|
(16.8 |
) |
|
|
(17.8 |
) |
Debt retirement and
other debt costs |
|
(2.1 |
) |
|
|
(9.6 |
) |
Other income |
|
2.8 |
|
|
|
20.7 |
|
Income from continuing
operations, before income taxes |
|
33.7 |
|
|
|
9.6 |
|
Current income tax
recovery (expense) |
|
(15.7 |
) |
|
|
(15.6 |
) |
Deferred income tax
recovery (expense) |
|
17.0 |
|
|
|
12.5 |
|
Net income from
continuing operations |
|
35.0 |
|
|
|
6.5 |
|
Net loss from
discontinued operations |
|
(252.3 |
) |
|
|
(27.2 |
) |
Net Ioss |
$ |
(217.3 |
) |
|
$ |
(20.7 |
) |
|
|
|
|
Non-GAAP measures: |
|
|
|
Adjusted EBITDA from
continuing operations |
$ |
129.6 |
|
|
$ |
149.1 |
|
Adjusted EBITDA from
discontinued operations |
$ |
32.0 |
|
|
$ |
19.0 |
|
Adjusted EBITDA |
$ |
161.6 |
|
|
$ |
168.1 |
|
|
|
|
|
Non-GAAP net income
from continuing operations |
$ |
74.9 |
|
|
$ |
88.2 |
|
Non-GAAP net income
from discontinued operations |
$ |
3.2 |
|
|
$ |
1.2 |
|
Non-GAAP net
income |
$ |
78.1 |
|
|
$ |
89.4 |
|
|
|
|
|
MITEL NETWORKS CORPORATION |
Cash flow information |
(in millions of US
dollars) |
(unaudited) |
|
|
Quarter Ended December 31, 2016 |
|
Quarter Ended December 31, 2015 |
|
Year Ended December 31, 2016 |
|
Year Ended December 31, 2015 |
|
|
|
|
|
|
|
|
Cash provided
by (used in): |
|
|
|
|
|
|
|
Net cash
provided by (used in) operating activities |
$ |
37.2 |
|
|
$ |
18.1 |
|
|
$ |
99.7 |
|
|
$ |
54.6 |
|
Net cash
provided by (used in) investing activities |
|
(5.4 |
) |
|
|
(8.0 |
) |
|
|
(17.3 |
) |
|
|
(362.9 |
) |
Net cash
provided by (used in) financing activities |
|
(1.2 |
) |
|
|
(0.7 |
) |
|
|
(69.0 |
) |
|
|
292.8 |
|
Effect of
exchange rate changes on cash balances |
|
(3.1 |
) |
|
|
(0.7 |
) |
|
|
(4.2 |
) |
|
|
(4.2 |
) |
Net
increase (decrease) in cash and cash equivalents |
|
27.5 |
|
|
|
8.7 |
|
|
|
9.2 |
|
|
|
(19.7 |
) |
|
|
|
|
|
|
|
|
Cash and
cash equivalents, beginning of period |
|
73.3 |
|
|
|
82.9 |
|
|
|
91.6 |
|
|
|
111.3 |
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, end of period |
$ |
100.8 |
|
|
$ |
91.6 |
|
|
$ |
100.8 |
|
|
$ |
91.6 |
|
Less: cash and cash
equivalents classified as assets of component held for sale, end of
year |
|
3.5 |
|
|
|
9.4 |
|
|
|
3.5 |
|
|
|
9.4 |
|
Cash and cash
equivalents of continuing operations, end of year |
$ |
97.3 |
|
|
$ |
82.2 |
|
|
$ |
97.3 |
|
|
$ |
82.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
information on capital expenditures: |
|
|
|
|
|
|
|
Capital
expenditures acquired with cash |
$ |
5.4 |
|
|
$ |
5.0 |
|
|
$ |
17.3 |
|
|
$ |
16.2 |
|
Capital
expenditures financed through capital leases |
|
1.4 |
|
|
|
1.4 |
|
|
|
8.3 |
|
|
|
4.0 |
|
Total capital
expenditures |
$ |
6.8 |
|
|
$ |
6.4 |
|
|
$ |
25.6 |
|
|
$ |
20.2 |
|
|
|
|
|
|
|
|
|
MITEL NETWORKS CORPORATION |
Segmented Information |
(in millions of US dollars) |
(unaudited) |
|
|
Quarter Ended December 31, 2016 (US GAAP, except as
indicated otherwise) |
|
Enterprise segment |
Cloudsegment |
Unallocatedcorporatecosts(1) |
Total |
Revenues |
|
|
|
|
Product |
$ |
142.3 |
|
$ |
15.3 |
$ |
- |
|
$ |
157.6 |
|
Recurring |
|
46.9 |
|
|
31.4 |
|
- |
|
|
78.3 |
|
Services |
|
22.7 |
|
|
1.2 |
|
- |
|
|
23.9 |
|
Non-GAAP
Revenues |
|
211.9 |
|
|
47.9 |
|
- |
|
|
259.8 |
|
Purchase
accounting adjustments |
|
- |
|
|
- |
|
- |
|
|
- |
|
Total
revenues |
$ |
211.9 |
|
$ |
47.9 |
$ |
- |
|
$ |
259.8 |
|
|
|
|
|
|
Gross margin |
|
|
|
|
Product |
$ |
77.3 |
|
$ |
9.3 |
$ |
- |
|
$ |
86.6 |
|
Recurring |
|
29.7 |
|
|
15.8 |
|
- |
|
|
45.5 |
|
Services |
|
7.4 |
|
|
0.8 |
|
- |
|
|
8.2 |
|
Non-GAAP
Gross Margin |
|
114.4 |
|
|
25.9 |
|
- |
|
|
140.3 |
|
Purchase
accounting adjustments |
|
- |
|
|
- |
|
- |
|
|
- |
|
Total gross
margin |
$ |
114.4 |
|
$ |
25.9 |
$ |
- |
|
$ |
140.3 |
|
|
|
|
|
|
Selling, General and
Administrative |
$ |
64.5 |
|
$ |
16.7 |
$ |
3.0 |
|
$ |
84.2 |
|
Research and
Development |
|
15.9 |
|
|
5.9 |
|
- |
|
|
21.8 |
|
Other income |
|
(0.4 |
) |
|
- |
|
- |
|
|
(0.4 |
) |
Segment income
(loss) |
$ |
34.4 |
|
$ |
3.3 |
$ |
(3.0 |
) |
$ |
34.7 |
|
|
|
|
|
|
Other information |
|
|
|
|
Depreciation and
amortization |
$ |
3.3 |
|
$ |
0.8 |
$ |
0.4 |
|
$ |
4.5 |
|
Stock-based
compensation |
$ |
3.0 |
|
$ |
0.5 |
$ |
- |
|
$ |
3.5 |
|
Adjusted EBITDA, a
non-GAAP measure |
$ |
40.7 |
|
$ |
4.6 |
$ |
(2.6 |
) |
$ |
42.7 |
|
|
|
|
|
|
(1)
Represents costs previously allocated to the Mobile business unit
that have not been reclassified to discontinued operations as they
are not included in the business unit being sold. |
|
MITEL NETWORKS CORPORATION |
Segmented Information |
(in millions of US dollars) |
(unaudited) |
|
|
Year Ended December 31, 2016 (US GAAP, except as
indicated otherwise) |
|
Enterprise segment |
Cloudsegment |
Unallocatedcorporatecosts(1) |
Total |
Revenues |
|
|
|
|
Product |
$ |
522.5 |
|
$ |
60.9 |
|
$ |
- |
|
$ |
583.4 |
|
Recurring |
|
190.7 |
|
|
121.0 |
|
|
- |
|
|
311.7 |
|
Services |
|
90.0 |
|
|
2.5 |
|
|
- |
|
|
92.5 |
|
Non-GAAP
Revenues |
|
803.2 |
|
|
184.4 |
|
|
- |
|
|
987.6 |
|
Purchase
accounting adjustments |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Total
revenues |
$ |
803.2 |
|
$ |
184.4 |
|
$ |
- |
|
$ |
987.6 |
|
|
|
|
|
|
Gross margin |
|
|
|
|
Product |
$ |
290.3 |
|
$ |
37.1 |
|
$ |
- |
|
$ |
327.4 |
|
Recurring |
|
115.6 |
|
|
59.9 |
|
|
- |
|
|
175.5 |
|
Services |
|
28.0 |
|
|
1.1 |
|
|
- |
|
|
29.1 |
|
Non-GAAP
Gross Margin |
|
433.9 |
|
|
98.1 |
|
|
- |
|
|
532.0 |
|
Purchase
accounting adjustments |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Total gross
margin |
$ |
433.9 |
|
$ |
98.1 |
|
$ |
- |
|
$ |
532.0 |
|
|
|
|
|
|
Selling, General and
Administrative |
$ |
263.7 |
|
$ |
64.2 |
|
$ |
11.9 |
|
$ |
339.8 |
|
Research and
Development |
|
71.1 |
|
|
25.4 |
|
|
- |
|
|
96.5 |
|
Other income |
|
(0.8 |
) |
|
(0.1 |
) |
|
- |
|
|
(0.9 |
) |
Segment income
(loss) |
$ |
99.9 |
|
$ |
8.6 |
|
$ |
(11.9 |
) |
$ |
96.6 |
|
|
|
|
|
|
Other information |
|
|
|
|
Depreciation and
amortization |
$ |
14.3 |
|
$ |
3.3 |
|
$ |
1.7 |
|
$ |
19.3 |
|
Stock-based
compensation |
$ |
11.7 |
|
$ |
2.0 |
|
$ |
- |
|
$ |
13.7 |
|
Adjusted EBITDA, a
non-GAAP measure |
$ |
125.9 |
|
$ |
13.9 |
|
$ |
(10.2 |
) |
$ |
129.6 |
|
|
|
|
|
|
(1)
Represents costs previously allocated to the Mobile business unit
that have not been reclassified to discontinued operations as they
are not included in the business unit being sold. |
|
|
|
|
|
MITEL NETWORKS CORPORATION |
Segmented Information |
(in millions of US dollars) |
(unaudited) |
|
|
As Reported Quarter Ended December 31, 2015 (US GAAP,
except as indicated otherwise) |
|
Enterprise segment |
Cloudsegment |
Unallocatedcorporatecosts(1) |
Total |
Revenues |
|
|
|
|
Product |
$ |
160.1 |
|
$ |
15.0 |
|
$ |
- |
|
$ |
175.1 |
|
Recurring |
|
48.5 |
|
|
28.1 |
|
|
- |
|
|
76.6 |
|
Services |
|
25.0 |
|
|
0.8 |
|
|
- |
|
|
25.8 |
|
Non-GAAP
Revenues |
|
233.6 |
|
|
43.9 |
|
|
- |
|
|
277.5 |
|
Purchase
accounting adjustments |
|
(0.5 |
) |
|
- |
|
|
- |
|
|
(0.5 |
) |
Total
revenues |
$ |
233.1 |
|
$ |
43.9 |
|
$ |
- |
|
$ |
277.0 |
|
|
|
|
|
|
Gross margin |
|
|
|
|
Product |
$ |
87.1 |
|
$ |
8.9 |
|
$ |
- |
|
$ |
96.0 |
|
Recurring |
|
28.8 |
|
|
13.3 |
|
|
- |
|
|
42.1 |
|
Services |
|
9.3 |
|
|
0.4 |
|
|
- |
|
|
9.7 |
|
Non-GAAP
Gross Margin |
|
125.2 |
|
|
22.6 |
|
|
- |
|
|
147.8 |
|
Purchase
accounting adjustments |
|
(0.5 |
) |
|
- |
|
|
- |
|
|
(0.5 |
) |
Total gross
margin |
$ |
124.7 |
|
$ |
22.6 |
|
$ |
- |
|
$ |
147.3 |
|
|
|
|
|
|
Selling, General and
Administrative |
$ |
67.3 |
|
$ |
14.2 |
|
$ |
1.3 |
|
$ |
82.8 |
|
Research and
Development |
|
19.2 |
|
|
5.6 |
|
|
- |
|
|
24.8 |
|
Other income |
|
(0.4 |
) |
|
(0.1 |
) |
|
- |
|
|
(0.5 |
) |
Segment income
(loss) |
$ |
38.6 |
|
$ |
2.9 |
|
$ |
(1.3 |
) |
$ |
40.2 |
|
|
|
|
|
|
Other information |
|
|
|
|
Depreciation and
amortization |
$ |
4.0 |
|
$ |
0.8 |
|
$ |
0.5 |
|
$ |
5.3 |
|
Stock-based
compensation |
$ |
2.8 |
|
$ |
0.5 |
|
$ |
- |
|
$ |
3.3 |
|
Adjusted EBITDA, a
non-GAAP measure |
$ |
45.9 |
|
$ |
4.2 |
|
$ |
(0.8 |
) |
$ |
49.3 |
|
|
|
|
|
|
(1)
Represents costs previously allocated to the Mobile business unit
that have not been reclassified to discontinued operations as they
are not included in the business unit being sold. |
|
MITEL NETWORKS CORPORATION |
Segmented Information |
(in millions of US dollars) |
(unaudited) |
|
|
Year Ended December 31, 2015 (US GAAP, except as
indicated otherwise) |
|
Enterprise segment |
Cloudsegment |
Unallocatedcorporatecosts(1) |
Total |
Revenues |
|
|
|
|
Product |
$ |
594.1 |
|
$ |
48.8 |
|
$ |
- |
|
$ |
642.9 |
|
Recurring |
|
192.2 |
|
|
104.8 |
|
|
- |
|
|
297.0 |
|
Services |
|
86.3 |
|
|
2.5 |
|
|
- |
|
|
88.8 |
|
Non-GAAP
Revenues |
|
872.6 |
|
|
156.1 |
|
|
- |
|
|
1,028.7 |
|
Purchase
accounting adjustments |
|
(2.9 |
) |
|
- |
|
|
- |
|
|
(2.9 |
) |
Total
revenues |
$ |
869.7 |
|
$ |
156.1 |
|
$ |
- |
|
$ |
1,025.8 |
|
|
|
|
|
|
Gross margin |
|
|
|
|
Product |
$ |
329.7 |
|
$ |
27.2 |
|
$ |
- |
|
$ |
356.9 |
|
Recurring |
|
110.5 |
|
|
49.7 |
|
|
- |
|
|
160.2 |
|
Services |
|
29.7 |
|
|
1.3 |
|
|
- |
|
|
31.0 |
|
Non-GAAP
Gross Margin |
|
469.9 |
|
|
78.2 |
|
|
- |
|
|
548.1 |
|
Purchase
accounting adjustments |
|
(2.9 |
) |
|
- |
|
|
- |
|
|
(2.9 |
) |
Total gross
margin |
$ |
467.0 |
|
$ |
78.2 |
|
$ |
- |
|
$ |
545.2 |
|
|
|
|
|
|
Selling, General and
Administrative |
$ |
273.0 |
|
$ |
54.5 |
|
$ |
3.5 |
|
$ |
331.0 |
|
Research and
Development |
|
80.4 |
|
|
21.8 |
|
|
- |
|
|
102.2 |
|
Other income |
|
(1.6 |
) |
|
(0.3 |
) |
|
- |
|
|
(1.9 |
) |
Segment income
(loss) |
$ |
115.2 |
|
$ |
2.2 |
|
$ |
(3.5 |
) |
$ |
113.9 |
|
|
|
|
|
|
Other information |
|
|
|
|
Depreciation and
amortization |
$ |
16.9 |
|
$ |
3.0 |
|
$ |
1.2 |
|
$ |
21.1 |
|
Stock-based
compensation |
$ |
9.6 |
|
$ |
1.6 |
|
$ |
- |
|
$ |
11.2 |
|
Adjusted EBITDA, a
non-GAAP measure |
$ |
144.6 |
|
$ |
6.8 |
|
$ |
(2.3 |
) |
$ |
149.1 |
|
|
|
|
|
|
(1)
Represents costs previously allocated to the Mobile business unit
that have not been reclassified to discontinued operations as they
are not included in the business unit being sold. |
|
MITEL NETWORKS CORPORATION |
Reconciliation of Net Income (Loss) to Adjusted
EBITDA |
(in millions of US
dollars) |
(unaudited) |
|
|
Quarter Ended December 31, 2016 (US GAAP,
exceptAdjusted EBITDA) |
|
Quarter Ended December 31, 2015 (US GAAP,
exceptAdjusted EBITDA) |
|
Year Ended December 31, 2016 (US GAAP, exceptAdjusted
EBITDA) |
|
Year Ended December 31, 2015 (US GAAP, exceptAdjusted
EBITDA) |
|
|
|
|
|
|
|
|
Net loss |
$ |
(209.2 |
) |
|
$ |
(6.3 |
) |
|
$ |
(217.3 |
) |
|
$ |
(20.7 |
) |
Net loss from
continuing operations |
|
223.1 |
|
|
|
8.8 |
|
|
|
252.3 |
|
|
|
27.2 |
|
Net income from
continuing operations |
|
13.9 |
|
|
|
2.5 |
|
|
|
35.0 |
|
|
|
6.5 |
|
Adjustments: |
|
|
|
|
|
|
|
Interest
expense |
|
4.1 |
|
|
|
4.9 |
|
|
|
16.8 |
|
|
|
17.8 |
|
Income
tax expense (recovery) |
|
(4.7 |
) |
|
|
9.0 |
|
|
|
(1.3 |
) |
|
|
3.1 |
|
Amortization and depreciation |
|
13.3 |
|
|
|
14.5 |
|
|
|
54.4 |
|
|
|
69.3 |
|
Foreign
exchange gain |
|
(0.4 |
) |
|
|
(0.3 |
) |
|
|
(1.9 |
) |
|
|
(18.8 |
) |
Special
charges and restructuring costs |
|
13.0 |
|
|
|
14.9 |
|
|
|
70.8 |
|
|
|
47.5 |
|
Stock-based compensation |
|
3.5 |
|
|
|
3.3 |
|
|
|
13.7 |
|
|
|
11.2 |
|
Debt
retirement and other debt costs |
|
- |
|
|
|
- |
|
|
|
2.1 |
|
|
|
9.6 |
|
Purchase
accounting adjustments |
|
- |
|
|
|
0.5 |
|
|
|
- |
|
|
|
2.9 |
|
Income
from termination fee received |
|
- |
|
|
|
- |
|
|
|
(60.0 |
) |
|
|
- |
|
Adjusted EBITDA from
continuing operations |
|
42.7 |
|
|
|
49.3 |
|
|
|
129.6 |
|
|
|
149.1 |
|
Adjusted EBITDA from
discontinued operations(1) |
|
12.9 |
|
|
|
12.9 |
|
|
|
32.0 |
|
|
|
19.0 |
|
Adjusted EBITDA |
$ |
55.6 |
|
|
$ |
62.2 |
|
|
$ |
161.6 |
|
|
$ |
168.1 |
|
|
|
|
|
|
|
|
|
(1) The reconciliation of net loss from discontinued
operations to Adjusted EBITDA from discontinued operations for the
quarter ended December 31, 2016 consists of interest expense
of $5.5 million, income tax recovery of $2.1 million, amortization
and depreciation of $11.6 million, special charges and
restructuring costs of $7.4 million, stock-based compensation
of $0.8 million and goodwill impairment of $212.8 million. |
The reconciliation of net loss from discontinued operations to
Adjusted EBITDA from discontinued operations for the quarter ended
December 31, 2015 consists of interest expense of $5.5
million, income tax expense of $2.6 million, amortization and
depreciation of $11.2 million, special charges and restructuring
costs of $2.1 million, stock-based compensation of $0.6
million and purchase accounting adjustments of ($0.3) million. |
The reconciliation of net loss from discontinued operations to
Adjusted EBITDA from discontinued operations for the year ended
December 31, 2016 consists of interest expense of $22.0
million, income tax recovery of $14.3 million, amortization and
depreciation of $46.3 million, special charges and restructuring
costs of $13.2 million, stock-based compensation of $3.1
million, purchase accounting adjustments of $1.2 million and
goodwill impairment of $212.8 million. |
The reconciliation of net loss from discontinued operations to
Adjusted EBITDA from discontinued operations for the year ended
December 31, 2015 consists of interest expense of $14.6
million, income tax recovery of $13.7 million, amortization and
depreciation of $29.8 million, special charges and restructuring
costs of $7.1 million, stock-based compensation of $1.6
million and purchase accounting adjustments of $6.8 million. |
|
MITEL NETWORKS CORPORATION |
Reconciliation of Net Income (Loss) to Non-GAAP Net
Income |
(in millions of US dollars, except
per share amounts) |
(unaudited) |
|
|
Quarter Ended December 31, 2016 (US GAAP, except
asindicated otherwise) |
|
Quarter Ended December 31, 2015 (US GAAP, except
asindicated otherwise) |
|
Year Ended December 31, 2016 (US GAAP, except
asindicated otherwise) |
|
Year Ended December 31, 2015 (US GAAP, except
asindicated otherwise) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(209.2 |
) |
|
$ |
(6.3 |
) |
|
$ |
(217.3 |
) |
|
$ |
(20.7 |
) |
Net loss from
discontinued operations |
|
223.1 |
|
|
|
8.8 |
|
|
|
252.3 |
|
|
|
27.2 |
|
Net income from
continuing operations |
|
13.9 |
|
|
|
2.5 |
|
|
|
35.0 |
|
|
|
6.5 |
|
Income
tax expense (recovery) |
|
(4.7 |
) |
|
|
9.0 |
|
|
|
(1.3 |
) |
|
|
3.1 |
|
Net income from
continuing operations, before income taxes |
|
9.2 |
|
|
|
11.5 |
|
|
|
33.7 |
|
|
|
9.6 |
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
Foreign
exchange loss (gain) |
|
(0.4 |
) |
|
|
(0.3 |
) |
|
|
(1.9 |
) |
|
|
(18.8 |
) |
Special
charges and restructuring costs |
|
13.0 |
|
|
|
14.9 |
|
|
|
70.8 |
|
|
|
47.5 |
|
Stock-based compensation |
|
3.5 |
|
|
|
3.3 |
|
|
|
13.7 |
|
|
|
11.2 |
|
Amortization of acquisition-related intangibles assets |
|
8.8 |
|
|
|
9.2 |
|
|
|
35.1 |
|
|
|
48.2 |
|
Debt
retirement and other debt costs |
|
- |
|
|
|
- |
|
|
|
2.1 |
|
|
|
9.6 |
|
Purchase
accounting adjustments |
|
- |
|
|
|
0.5 |
|
|
|
- |
|
|
|
2.9 |
|
Income
from termination fee received |
|
- |
|
|
|
- |
|
|
|
(60.0 |
) |
|
|
- |
|
Non-GAAP net income
from continuing operations, before income taxes |
|
34.1 |
|
|
|
39.1 |
|
|
|
93.5 |
|
|
|
110.2 |
|
Non-GAAP
tax expense(1) |
|
(6.8 |
) |
|
|
(7.8 |
) |
|
|
(18.6 |
) |
|
|
(22.0 |
) |
Non-GAAP net income
from continuing operations |
|
27.3 |
|
|
|
31.3 |
|
|
|
74.9 |
|
|
|
88.2 |
|
Non-GAAP net income
from discontinued operations(2) |
|
4.7 |
|
|
|
5.0 |
|
|
|
3.2 |
|
|
|
1.2 |
|
Non-GAAP net
income |
$ |
32.0 |
|
|
$ |
36.3 |
|
|
$ |
78.1 |
|
|
$ |
89.4 |
|
|
|
|
|
|
|
|
|
Non-GAAP
net income per share, diluted: |
|
|
|
|
|
|
Non-GAAP net income per
common share, continuing operations |
$ |
0.22 |
|
|
$ |
0.25 |
|
|
$ |
0.60 |
|
|
$ |
0.75 |
|
Non-GAAP net income per
common share, discontinued operations |
$ |
0.03 |
|
|
$ |
0.04 |
|
|
$ |
0.02 |
|
|
$ |
0.01 |
|
Non-GAAP net income per
common share |
$ |
0.25 |
|
|
$ |
0.29 |
|
|
$ |
0.62 |
|
|
$ |
0.76 |
|
Weighted-average number
of common shares outstanding, fully diluted (in
millions): |
|
125.7 |
|
|
|
125.1 |
|
|
|
125.5 |
|
|
|
118.0 |
|
|
|
|
|
|
|
|
|
(1)
Non-GAAP tax expense is based on an effective tax rate of 20%. |
|
|
|
(2) The reconciliation of net loss from discontinued
operations to Non-GAAP net income from discontinued operations for
the quarter ended December 31, 2016 consists of amortization
of acquisition-related intangible assets of $10.1 million, special
charges and restructuring costs of $7.4 million, stock-based
compensation of $0.8 million income tax recovery of $3.3
million and goodwill impairment of $212.8 million. |
The reconciliation of net loss from discontinued operations to
Non-GAAP net income from discontinued operations for the quarter
ended December 31, 2015 consists of amortization of
acquisition-related intangible assets of $10.1 million, special
charges and restructuring costs of $2.1 million, stock-based
compensation of $0.6 million income tax expense of $1.3
million and purchase accounting adjustments of ($0.3) million. |
The reconciliation of net loss from discontinued operations to
Non-GAAP net income from discontinued operations for the year ended
December 31, 2016 consists of amortization of
acquisition-related intangible assets of $40.4 million, special
charges and restructuring costs of $13.2 million, stock-based
compensation of $3.1 million, purchase accounting adjustments
of $1.2 million, income tax recovery of $15.2 million and goodwill
impairment of $212.8 million. |
The reconciliation of net loss from discontinued operations to
Adjusted EBITDA from discontinued operations for the year ended
December 31, 2015 consists of amortization of
acquisition-related intangible assets of $26.9 million, special
charges and restructuring costs of $7.1 million, stock-based
compensation of $1.6 million income tax recovery of $14.0
million and purchase accounting adjustments of $6.8
million. |
|
Contact Information
Media and Industry Analysts – Americas
Amy MacLeod
613-691-3317
amy.macleod@mitel.com
Media – EMEA/AP
Duncan Miller
+44 (0) 1291 612 646
duncan.miller@mitel.com
Investors
Michael McCarthy
469-574-8134
michael.mccarthy@mitel.com
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