Mitel Reports June Quarter Results

OTTAWA, Aug. 6, 2015 (GLOBE NEWSWIRE)

Non-GAAP Revenues and Earnings Per Share meet consensus

Strong growth in Cloud and Mobile segments

  • As-reported non-GAAP revenues of $292.3 million
  • As-reported non-GAAP earnings per share of $0.18
  • Mobile segment pro-forma non-GAAP revenues of $45.1 million, increased 35% year-over-year
  • Recurring cloud revenues of $25.3 million grew 21% year-over-year
  • Total cloud seats installed during the quarter were 235,000


Mitel® (Nasdaq:MITL) (TSX:MNW) a global leader in real-time business, cloud and mobile communications today announced financial results for the second quarter ended June 30, 2015. For a definition of as-reported, non-GAAP and pro-forma results, refer to the section on `Non-GAAP Financial Measurements` below.

     
  Q2 2015 Q2 2014
in millions (except per share data)       Pro Forma
  As Reported Pro Forma As Reported Historical
Currency
Constant
Currency 1
Non-GAAP Revenues  $ 292.3  $ 298.3  $ 291.7  $ 325.0  $ 296.0
Non-GAAP Net Income  $ 21.4  $ 14.2  $ 22.2  $ 21.4  $ 14.8
Non-GAAP EPS  $ 0.18  $ 0.11  $ 0.21  $ 0.17  $ 0.12
Adjusted EBITDA  $ 40.6  $ 32.2  $ 38.8  $ 38.9  $ 32.3

1 - Constant currency in Q2-2014 assumes the same foreign currency exchange rates as in Q2-2015

"Mitel continues to execute well against our profitable growth strategy, driven by market leading performance from our mobile and cloud growth initiatives," said Richard McBee, Chief Executive Officer. "The acquisition of our new mobile business, which was completed in the quarter, delivered impressive results out of the gate with year-over-year revenue growth of 35%.  Our cloud business continued its upward trajectory with double-digit seat growth in the quarter, with our total cloud installed base now exceeding 1.6 million users. Our total recurring revenues, including cloud recurring revenues, now comprise 28% of our total revenues and were up 13% year-over-year on a constant currency basis."

Mobile and Cloud Highlights

Mobile - Following the April acquisition of Mavenir and through the end of the second quarter, the company demonstrated ongoing market traction adding another 10 footprint wins, including a major cable company seeking to deploy Mitel's market leading Voice over WIFI (VoWIFI) capability.

Cloud - In the second quarter, Mitel installed 235,500 new cloud seats, including 24,600 recurring cloud seats. Year-over-year, Mitel's total cloud seats installed were up 76% while recurring cloud seats increased 68%. More detailed Cloud Operational Metrics are included with the financial tables at the end of this release.

Financial Highlights

As Reported

  • Non-GAAP revenues were $292.3 million
  • GAAP revenues, which include a $15.4 million reduction to revenue for purchase accounting adjustments, were $276.9 million
  • Non-GAAP net income was $21.4 million, or $0.18 per diluted share
  • GAAP net loss was $11.6 million, or $0.10 per diluted share
  • Adjusted EBITDA was $40.6 million

Pro-forma

  • Non-GAAP revenues were $298.3 million, up 1% from the prior year period on a constant currency basis
  • Non-GAAP net income was $14.2 million, or $0.11 per diluted share, consistent with the prior year on a constant currency basis
  • Adjusted EBITDA was $32.2 million, consistent with the prior year on a constant currency basis

"Continued focus on operational execution across the company enabled us to deliver another quarter of solid results despite ongoing currency headwinds, which impacted revenue by approximately $29 million on a constant currency basis," said Steve Spooner, Mitel's Chief Financial Officer.  "As we look toward the second half of the year, our financial priorities are unchanged - invest in our cloud and mobile growth initiatives, while delivering on identified integration synergies to drive operating results toward our target model."   

Business Outlook

Mitel has set the following financial performance guidance for the third quarter ending September 30, 2015. Non-GAAP Revenues and non-GAAP Gross Margin % exclude the effect of purchase accounting adjustments.

  Q3-2015 Guidance
Non-GAAP Revenues $275 million to $300 million
Non-GAAP Gross Margin % 52% to 54%
Adjusted EBITDA % 8% to 11%
Non-GAAP EPS $0.07 to $0.12

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 second quarter ended June 30, 2015. To access the conference call, dial 888-734-0328. Callers outside the U.S. and Canada should dial 678-894-3054. A replay of the conference call will be available through 5:00 p.m. ET on Monday, August 10, 2015. To access the replay, all callers should please dial 404-537-3406 and enter pass code 85780419. The live webcast will be accessible on Mitel's investor relations website at http://investor.mitel.com/ and will be archived and available on this site for at least three months.

Non-GAAP Financial Measurements

This press release includes references to non-GAAP financial measures including Adjusted EBITDA, non-GAAP net income, non-GAAP operating expenses, Adjusted Revenues and Adjusted Gross Margin. 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.

Mitel completed the acquisition of Mavenir Systems 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, April 29, 2015. Pro-forma results reflect the results of the company as if it had been fully combined with Mavenir Systems for the entire second quarter of 2015 and 2014. 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 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.

About Mitel

A global market leader in enterprise and mobile communications powering more than 2 billion business connections and 2 billion mobile subscribers every day, Mitel (Nasdaq:MITL) (TSX:MNW) helps businesses and mobile carriers 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, and 130 mobile service providers including 15 of the top 20 mobile carriers in the world. That makes us unique, and the only company able to provide a bridge between enterprise and mobile customers. 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.

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 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, and 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 integration of Mavenir and the ability to recognize the anticipated benefits from the acquisition of Mavenir; the anticipated size of the markets and continued demand for Mitel and Mavenir products and the impact of competitive products and pricing that could result from the announcement of the acquisition of Mavenir; access to available financing on a timely basis and on reasonable terms; Mitel's ability to achieve or sustain profitability in the future since its acquisition of Aastra; 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 implement and achieve its business strategies successfully. Additional risks are described under the heading "Risk Factors" in Mitel's Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on February 26, 2015, the section entitled "Risk Factors—Risks Relating to the Combined Company" included in our Offer to Exchange dated April 28, 2015 filed with the SEC on April 29, 2015 and the sections entitled "Risk Factors—Risks Relating to Our Business and Industry" and "Risk Factors - Risks Relating to Our International Operations" included in Mavenir's Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on March 3, 2015. Forward-looking statements speak only as of the date they are made. Except as required by law, Mitel does not have any 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.

MITL-F

Cloud Metrics tables
           
  CY14 CY14 CY14 CY15 CY15
  Q2 Q3 Q4 Q1 Q2
Total Cloud Seats  915,095  1,039,498  1,246,735  1,375,635  1,611,172
Recurring Cloud Seats  195,673  244,889  269,155  304,956  329,620
Retail Cloud Monthly Average Revenue Per User (ARPU)  $ 47  $ 46  $ 50  $ 50  $ 49
Retail Cloud Average # of Seats per Customer 34 39 37 39 38
Retail Cloud Monthly Customer Churn 0.6% 0.7% 0.4% 0.8% 0.7%
 
MITEL NETWORKS CORPORATION 
CONSOLIDATED BALANCE SHEETS 
(in millions of US dollars) 
(unaudited)
  June 30, December 31,
  2015 2014
     
ASSETS    
Current assets:    
Cash and cash equivalents   $ 76.0  $ 111.3
Accounts receivable  276.3  237.5
Sales-type lease receivables  14.5  18.1
Inventories  110.4  88.3
Deferred tax asset   46.5  31.7
Other current assets   83.5  53.2
     
   607.2  540.1
Non-current portion of sales-type lease receivables  17.8  19.7
Deferred tax asset   120.6  133.6
Property and equipment  56.6  50.7
Identifiable intangible assets  421.8  175.8
Goodwill  657.9  340.3
Other non-current assets  12.1  11.6
     
   $ 1,894.0  $ 1,271.8
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
Current liabilities:    
Accounts payable and accrued liabilities   $ 276.7  $ 215.0
Current portion of deferred revenue   109.3  78.2
Current portion of long-term debt   11.9  6.2
     
   397.9  299.4
Long-term debt   638.4  303.6
Long-term portion of deferred revenue  38.7  35.6
Deferred tax liability   34.7  15.3
Pension liability   148.4  136.1
Other non-current liabilities  37.9  34.0
     
   1,296.0  824.0
     
Shareholders' equity  598.0  447.8
     
   $ 1,894.0  $ 1,271.8
     
MITEL NETWORKS CORPORATION
STATEMENT OF OPERATIONS
(in millions of US dollars)
(unaudited)
         
  US GAAP As Reported
Quarter Ended
June 30, 2015
Proforma
Quarter Ended
June 30, 2015(1)
US GAAP As Reported
Quarter Ended
June 30, 2014
Proforma
Quarter Ended
June 30, 2014(1)
         
Non-GAAP Revenues  $ 292.3  $ 298.3  $ 291.7  $ 325.0
Less: Purchase accounting revenue adjustments   (15.4)  (15.5)  (3.0)  (17.6)
Total Revenues  276.9  282.8  288.7  307.4
         
Non-GAAP Cost of Revenues  135.7  139.7  136.9  151.4
Less: Purchase accounting cost of revenue adjustments   (8.5)  (8.5)  --   (8.5)
Total Cost of revenues  127.2  131.2  136.9  142.9
         
Non-GAAP Gross Margin  156.6  158.6  154.8  173.6
Less: Purchase accounting gross margin adjustments   (6.9)  (7.0)  (3.0)  (9.1)
Total Gross margin  149.7  151.6  151.8  164.5
         
Expenses:        
Selling, general and administrative  91.8  99.6  91.8  105.1
Research and development  34.0  38.2  31.9  39.1
Special charges and restructuring costs  14.3  27.1  10.9  10.9
Amortization of acquisition-related intangible assets  19.4  22.0  14.0  21.9
   159.5  186.9  148.6  177.0
         
Operating income (loss)  (9.8)  (35.3)  3.2  (12.5)
Interest expense  (7.8)  (7.9)  (5.5)  (5.9)
Debt retirement costs  (8.4)  (9.0)  (0.8)  (0.8)
Other income  5.1  5.7  1.7  0.9
Loss from operations, before income taxes  (20.9)  (46.5)  (1.4)  (18.3)
Current income tax recovery (expense)  (5.5)  (5.6)  (0.6)  (1.0)
Deferred income tax recovery (expense)  14.8  14.8  2.8  2.8
Net income (loss)  $ (11.6)  $ (37.3)  $ 0.8  $ (16.5)
         
Non-GAAP measures:        
Adjusted EBITDA  $ 40.6  $ 32.2  $ 38.8  $ 38.9
Non-GAAP net income  $ 21.4  $ 14.2  $ 22.2  $ 21.4
         
(1) For a reconciliation of Mitel's US GAAP as-reported results to the Proforma results, please see Mitel's current report on Form 8-K filed with the SEC on August 6, 2015.
 
MITEL NETWORKS CORPORATION
STATEMENT OF OPERATIONS
(in millions of US dollars)
(unaudited)
         
  US GAAP As Reported
Six Months Ended
June 30, 2015
Proforma
Six Months Ended
June 30, 2015(1)
US GAAP As Reported
Six Months Ended
June 30, 2014
Proforma
Six Months Ended
June 30, 2014(1)
         
Non-GAAP Revenues  $ 541.2  $ 575.5  $ 536.0  $ 635.0
Less: Purchase accounting revenue adjustments   (16.2)  (18.5)  (5.8)  (22.9)
Total Revenues  525.0  557.0  530.2  612.1
         
Non-GAAP Cost of Revenues  253.4  272.0  249.0  297.3
Less: Purchase accounting cost of revenue adjustments   (8.5)  (8.5)  --   (8.5)
Total Cost of revenues  244.9  263.5  249.0  288.8
         
Non-GAAP Gross Margin  287.8  303.5  287.0  337.7
Less: Purchase accounting gross margin adjustments   (7.7)  (10.0)  (5.8)  (14.4)
Total Gross margin  280.1  293.5  281.2  323.3
         
Expenses:        
Selling, general and administrative  173.4  199.4  168.7  207.5
Research and development  60.9  75.7  58.2  77.1
Special charges and restructuring costs  27.3  44.0  24.1  39.1
Amortization of acquisition-related intangible assets  33.5  44.0  25.3  43.6
   295.1  363.1  276.3  367.3
         
Operating income (loss)  (15.0)  (69.6)  4.9  (44.0)
Interest expense  (12.4)  (13.0)  (11.4)  (12.7)
Debt retirement costs  (9.1)  (9.7)  (15.5)  (17.3)
Other income  20.5  18.4  1.8  0.8
Loss from operations, before income taxes  (16.0)  (73.9)  (20.2)  (73.2)
Current income tax recovery (expense)  (6.0)  (7.2)  (0.3)  4.7
Deferred income tax recovery (expense)  15.7  15.7  7.7  8.3
Net loss  $ (6.3)  $ (65.4)  $ (12.8)  $ (60.2)
         
Non-GAAP measures:        
Adjusted EBITDA  $ 71.0  $ 50.1  $ 74.4  $ 71.5
Non-GAAP net income  $ 37.9  $ 19.4  $ 42.0  $ 36.8
         
(1) For a reconciliation of Mitel's US GAAP as-reported results to the Proforma results, please see Mitel's current report on Form 8-K filed with the SEC on August 6, 2015.
         
MITEL NETWORKS CORPORATION
Cash flow information
(in millions of US dollars)
(unaudited)
         
  As Reported
Quarter Ended
June 30, 2015
As Reported
Quarter Ended
June 30, 2014
As Reported
Six Months Ended
June 30, 2015
As Reported
Six Months Ended
June 30, 2014
         
Cash provided by (used in):        
Net cash provided by (used in) operating activities  $ (1.9)  $ 25.8  $ 19.2  $ 52.6
Net cash used in investing activities  (349.9)  (4.3)  (351.0)  (13.7)
Net cash provided by (used in) financing activities  325.3  (23.9)  299.0  53.5
Effect of exchange rate changes on cash balances  1.7  0.6  (2.5)  1.6
Net decrease in cash and cash equivalents  (24.8)  (1.8)  (35.3)  94.0
         
Cash and cash equivalents, beginning of period  100.8  136.0  111.3  40.2
         
Cash and cash equivalents, end of period  $ 76.0  $ 134.2  $ 76.0  $ 134.2
         
         
         
         
Additional information on capital expenditures:        
Capital expenditures acquired with cash  $ 6.2  $ 4.3  $ 7.3  $ 7.5
Capital expenditures financed through capital leases and other  0.3  1.5  1.8  2.7
Total capital expenditures  $ 6.5  $ 5.8  $ 9.1  $ 10.2
         
  MITEL NETWORKS CORPORATION
  Segmented Information
  (in millions of US dollars)
  (unaudited)
                   
    U.S. GAAP, As Reported
Quarter Ended June 30, 2015
Proforma
Quarter Ended June 30, 2015
     Premise
segment 
 Cloud
segment 
 Mobile
segment 
 Total   Premise
segment 
 Cloud
segment 
 Mobile
segment 
 Total 
  Revenues                
  Product  $ 146.8  $ 11.4  $ 23.1  $ 181.3  $ 146.8  $ 11.4  $ 24.6  $ 182.8
  Recurring  47.6  25.3  6.4  79.3  47.6  25.3  9.5  82.4
  Services  21.6  0.5  9.6  31.7  21.6  0.5  11.0  33.1
  Non-GAAP Revenues  216.0  37.2  39.1  292.3  216.0  37.2  45.1  298.3
  Purchase accounting adjustments  (0.8)  --   (14.6)  (15.4)  (0.8)  --   (14.7)  (15.5)
  Total revenues  $ 215.2  $ 37.2  $ 24.5  $ 276.9  $ 215.2  $ 37.2  $ 30.4  $ 282.8
                   
  Gross margin                
  Product  $ 83.0  $ 6.1  $ 11.9  $ 101.0  $ 83.0  $ 6.1  $ 13.3  $ 102.4
  Recurring  26.9  12.1  2.6  41.6  26.9  12.1  3.9  42.9
  Services  8.0  0.3  5.7  14.0  8.0  0.3  5.0  13.3
  Non-GAAP Gross Margin  117.9  18.5  20.2  156.6  117.9  18.5  22.2  158.6
  Purchase accounting adjustments  (0.8)  --   (6.1)  (6.9)  (0.8)  --   (6.2)  (7.0)
  Total gross margin  $ 117.1  $ 18.5  $ 14.1  $ 149.7  $ 117.1  $ 18.5  $ 16.0  $ 151.6
                   
    U.S. GAAP, As Reported
Quarter Ended June 30, 2014
Proforma
Quarter Ended June 30, 2014
     Premise
segment 
 Cloud
segment 
 Mobile
segment 
 Total   Premise
segment 
 Cloud
segment 
 Mobile
segment 
 Total 
  Revenues                
  Product  $ 189.9  $ 6.2  $ --   $ 196.1  $ 189.9  $ 6.2  $ 21.6  $ 217.7
  Recurring  50.8  20.9  --   71.7  50.8  20.9  6.1  77.8
  Services  23.6  0.3  --   23.9  23.6  0.3  5.6  29.5
  Non-GAAP Revenues  264.3  27.4  --   291.7  264.3  27.4  33.3  325.0
  Purchase accounting adjustments  (3.0)  --   --   (3.0)  (3.0)  --   (14.6)  (17.6)
  Total revenues  $ 261.3  $ 27.4  $ --   $ 288.7  $ 261.3  $ 27.4  $ 18.7  $ 307.4
                   
  Gross margin                
  Product  $ 107.4  $ 3.6  $ --   $ 111.0  $ 107.4  $ 3.6  $ 14.8  $ 125.8
  Recurring  24.8  10.1  --   34.9  24.8  10.1  3.2  38.1
  Services  8.8  0.1  --   8.9  8.8  0.1  0.8  9.7
  Non-GAAP Gross Margin  141.0  13.8  --   154.8  141.0  13.8  18.8  173.6
  Purchase accounting adjustments  (3.0)  --   --   (3.0)  (3.0)  --   (6.1)  (9.1)
  Total gross margin  $ 138.0  $ 13.8  $ --   $ 151.8  $ 138.0  $ 13.8  $ 12.7  $ 164.5
 
MITEL NETWORKS CORPORATION
Segmented Information
(in millions of US dollars)
(unaudited)
                 
  U.S. GAAP, As Reported
Six Months Ended June 30, 2015
Proforma
Six Months Ended June 30, 2015
   Premise
segment 
 Cloud
segment 
 Mobile
segment 
 Total   Premise
segment 
 Cloud
segment 
 Mobile
segment 
 Total 
Revenues                
Product  $ 292.1  $ 22.0  $ 23.1  $ 337.2  $ 292.1  $ 22.0  $ 37.9  $ 352.0
Recurring  96.2  48.6  6.4  151.2  96.2  48.6  19.2  164.0
Services  42.0  1.2  9.6  52.8  42.0  1.2  16.3  59.5
Non-GAAP Revenues  430.3  71.8  39.1  541.2  430.3  71.8  73.4  575.5
Purchase accounting adjustments  (1.6)  --   (14.6)  (16.2)  (1.6)  --   (16.9)  (18.5)
Total revenues  $ 428.7  $ 71.8  $ 24.5  $ 525.0  $ 428.7  $ 71.8  $ 56.5  $ 557.0
                 
Gross margin                
Product  $ 164.1  $ 11.7  $ 11.9  $ 187.7  $ 164.1  $ 11.7  $ 22.8  $ 198.6
Recurring  53.8  23.1  2.6  79.5  53.8  23.1  8.0  84.9
Services  14.2  0.7  5.7  20.6  14.2  0.7  5.1  20.0
Non-GAAP Gross Margin  232.1  35.5  20.2  287.8  232.1  35.5  35.9  303.5
Purchase accounting adjustments  (1.6)  --   (6.1)  (7.7)  (1.6)  --   (8.4)  (10.0)
Total gross margin  $ 230.5  $ 35.5  $ 14.1  $ 280.1  $ 230.5  $ 35.5  $ 27.5  $ 293.5
                 
  U.S. GAAP, As Reported
Six Months Ended June 30, 2014
Proforma
Six Months Ended June 30, 2014
   Premise
segment 
 Cloud
segment 
 Mobile
segment 
 Total   Premise
segment 
 Cloud
segment 
 Mobile
segment 
 Total 
Revenues                
Product  $ 344.8  $ 12.9  $ --   $ 357.7  $ 371.4  $ 13.6  $ 38.9  $ 423.9
Recurring  91.9  40.0  --   131.9  98.1  40.8  11.8  150.7
Services  46.0  0.4  --   46.4  48.5  0.6  11.3  60.4
Non-GAAP Revenues  482.7  53.3  --   536.0  518.0  55.0  62.0  635.0
Purchase accounting adjustments  (5.8)  --   --   (5.8)  (6.9)  --   (16.0)  (22.9)
Total revenues  $ 476.9  $ 53.3  $ --   $ 530.2  $ 511.1  $ 55.0  $ 46.0  $ 612.1
                 
Gross margin                
Product  $ 197.8  $ 6.9  $ --   $ 204.7  $ 209.8  $ 7.2  $ 25.7  $ 242.7
Recurring  46.8  19.4  --   66.2  48.7  19.7  6.2  74.6
Services  15.9  0.2  --   16.1  17.1  0.2  3.1  20.4
Non-GAAP Gross Margin  260.5  26.5  --   287.0  275.6  27.1  35.0  337.7
Purchase accounting adjustments  (5.8)  --   --   (5.8)  (6.9)  --   (7.5)  (14.4)
Total gross margin  $ 254.7  $ 26.5  $ --   $ 281.2  $ 268.7  $ 27.1  $ 27.5  $ 323.3
 
MITEL NETWORKS CORPORATION
Reconciliation of Net Income (Loss) to Adjusted EBITDA
(in millions of US dollars)
(unaudited)
         
  US GAAP As Reported
Quarter Ended
June 30, 2015
Proforma
Quarter Ended
June 30, 2015
US GAAP As Reported
Quarter Ended
June 30, 2014
Proforma
Quarter Ended
June 30, 2014
         
         
Net income (loss)  $ (11.6)  $ (37.3)  $ 0.8  $ (16.5)
Adjustments:        
Interest expense  7.8  7.9  5.5  5.9
Income tax expense (recovery)  (9.3)  (9.2)  (2.2)  (1.8)
Amortization and depreciation  25.5  28.5  19.6  28.2
Foreign exchange loss (gain)  (4.7)  (5.3)  (1.3)  (0.5)
Special charges and restructuring costs  14.3  27.1  10.9  10.9
Stock-based compensation  3.3  4.5  1.7  2.8
Debt retirement costs  8.4  9.0  0.8  0.8
Purchase accounting adjustments  6.9  7.0  3.0  9.1
         
Adjusted EBITDA  $ 40.6  $ 32.2  $ 38.8  $ 38.9
         
MITEL NETWORKS CORPORATION
Reconciliation of Net Income (Loss) to Adjusted EBITDA
(in millions of US dollars)
(unaudited)
         
  US GAAP As Reported
Six Months Ended
June 30, 2015
Proforma
Six Months Ended
June 30, 2015
US GAAP As Reported
Six Months Ended
June 30, 2014
Proforma
Six Months Ended
June 30, 2014
         
         
Net loss  $ (6.3)  $ (65.4)  $ (12.8)  $ (60.2)
Adjustments:        
Interest expense  12.4  13.0  11.4  12.7
Income tax expense (recovery)  (9.7)  (8.5)  (7.4)  (13.0)
Amortization and depreciation  44.8  56.8  35.8  56.5
Foreign exchange loss (gain)  (19.4)  (17.3)  (1.0)  -- 
Special charges and restructuring costs  27.3  44.0  24.1  39.1
Stock-based compensation  5.1  7.8  3.0  4.7
Debt retirement costs  9.1  9.7  15.5  17.3
Purchase accounting adjustments  7.7  10.0  5.8  14.4
         
Adjusted EBITDA  $ 71.0  $ 50.1  $ 74.4  $ 71.5
         
MITEL NETWORKS CORPORATION
Reconciliation of Net Income (Loss) to Non-GAAP Net Income
(in millions of US dollars, except per share amounts)
(unaudited)
         
  US GAAP As Reported
Quarter Ended
June 30, 2015
Proforma
Quarter Ended
June 30, 2015
US GAAP As Reported
Quarter Ended
June 30, 2014
Proforma
Quarter Ended
June 30, 2014
         
Net income (loss)  $ (11.6)  $ (37.3)  $ 0.8  $ (16.5)
Income tax expense (recovery)  (9.3)  (9.2)  (2.2)  (1.8)
Net loss, before income taxes  (20.9)  (46.5)  (1.4)  (18.3)
         
Adjustments:        
Foreign exchange loss (gain)  (4.7)  (5.3)  (1.3)  (0.5)
Special charges and restructuring costs  14.3  27.1  10.9  10.9
Stock-based compensation  3.3  4.5  1.7  2.8
Amortization of acquisition-related intangibles assets  19.4  22.0  14.0  21.9
Debt retirement costs  8.4  9.0  0.8  0.8
Purchase accounting adjustments  6.9  7.0  3.0  9.1
Non-GAAP net income, before income taxes  26.7  17.8  27.7  26.7
Non-GAAP tax expense(1)  (5.3)  (3.6)  (5.5)  (5.3)
Non-GAAP net income  $ 21.4  $ 14.2  $ 22.2  $ 21.4
         
Non-GAAP net income per share, diluted:        
Non-GAAP net income per common share  $ 0.18  $ 0.11  $ 0.21  $ 0.17
Non-GAAP weighted-average number of common shares outstanding (in millions):   118.1  124.7  103.7  123.4
         
(1) Non-GAAP tax expense is based on an effective tax rate of 20%.
         
MITEL NETWORKS CORPORATION 
Reconciliation of Net Income (Loss) to Non-GAAP Net Income
(in millions of US dollars, except per share amounts)
(unaudited)
         
  US GAAP As Reported
Six Months Ended
June 30, 2015
Proforma
Six Months Ended
June 30, 2015
US GAAP As Reported
Six Months Ended
June 30, 2014
Proforma
Six Months Ended
June 30, 2014
         
Net loss  $ (6.3)  $ (65.4)  $ (12.8)  $ (60.2)
Income tax expense (recovery)  (9.7)  (8.5)  (7.4)  (13.0)
Net loss, before income taxes  (16.0)  (73.9)  (20.2)  (73.2)
         
Adjustments:        
Foreign exchange loss (gain)  (19.4)  (17.3)  (1.0)  -- 
Special charges and restructuring costs  27.3  44.0  24.1  39.1
Stock-based compensation  5.1  7.8  3.0  4.7
Amortization of acquisition-related intangibles assets  33.5  44.0  25.3  43.6
Debt retirement costs  9.1  9.7  15.5  17.3
Purchase accounting adjustments  7.7  10.0  5.8  14.4
Non-GAAP net income, before income taxes  47.3  24.3  52.5  45.9
Non-GAAP tax expense(1)  (9.4)  (4.9)  (10.5)  (9.1)
Non-GAAP net income  $ 37.9  $ 19.4  $ 42.0  $ 36.8
         
Non-GAAP net income per share, diluted:        
Non-GAAP net income per common share  $ 0.34  $ 0.16  $ 0.44  $ 0.30
Non-GAAP weighted-average number of common shares outstanding (in millions):   111.5  124.6  96.1  123.5
         
(1) Non-GAAP tax expense is based on an effective tax rate of 20%.

 

Contact Information

Media – Americas
Amy MacLeod
(613) 691-3317
amy.macleod@mitel.com

Media – EMEA/AP
Duncan Miller
+44 (0) 1291 612 646
duncan.miller@mitel.com

Investor Relations
Michael McCarthy
(469) 574-8134
michael.mccarthy@mitel.com

Industry Analyst Relations
Cynthia Navarro
(469) 574-8113
cynthia.navarro@mitel.com

 

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