Mitel (Nasdaq:MITL), a leading provider of unified communications and collaboration (UCC) software solutions, today announced financial results for the second quarter of fiscal 2012 ended October 31, 2011. All financial results are in U.S. dollars.
Financial Highlights
The net loss for the second quarter of fiscal 2012 was largely driven by special charges and the acceleration of planned restructuring costs of $8.4 million reflecting previously announced actions taken to drive improved operating performance. The net income for the second quarter of fiscal 2011 was due to a tax recovery resulting from the relief of a valuation allowance.
Please refer to the GAAP to non-GAAP reconciliation tables in this release and a discussion of the use of non-GAAP measures under the heading, "Non-GAAP Financial Measurements" below.
"Solid execution across the entire company and continued technology leadership allowed us to achieve results greater than our previous guidance across all metrics," said Richard McBee, chief executive officer, Mitel. "We continue to see the benefits of our previously announced strategic initiatives to simplify our business and streamline our organization. In addition, we are seeing solid demand for our Mitel 5000 platform and our virtualized UC Advanced client software."
Business Unit Results
"With our organizational changes and restructuring activities largely complete, we are seeing the early benefits in our MCS group, where operating margins improved to 21% from 18% in the prior year," stated Steve Spooner, chief financial officer, Mitel. "Our outlook for the third quarter of fiscal 2012 reflects typical seasonality. We remain focused on driving growth and continued improvement in operating results as we execute our business strategy."
Business Highlights
-- Appointment of Trust Distribution as a value added distributor for the Mitel 5000 Communications Platform, resulting in the addition of more than twenty new channel partners.
-- Announcement that Mitel and TalkTalk Business, one of the UK's leading next generation network providers, will launch hosted unified communication solutions early in 2012, a key go-to-market initiative leveraged by Mitel's Freedom architecture.
Business Outlook
Mitel has set the following financial performance guidance for the third quarter of fiscal year 2012 ending January 31, 2012:
Conference Call Information
Mitel will host an investor conference call and live webcast today at 5:00 p.m. EST (2:00 p.m. PST) to discuss its financial results for the second quarter ended October 31, 2011. To access the conference call, dial 866-322-8032. Callers outside the U.S. and Canada should dial 416-640-3406. A replay of the conference call will be available through Tuesday, December 6, 2011. To access the replay, please dial 888-203-1112 and enter pass code 4084944. Callers outside the U.S. and Canada should dial 647-436-0148 and enter pass code 4084944. 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.
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 U.S. Securities and Exchange Commission on July 1, 2011 and filed with Canadian securities authorities.
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 third quarter results any more than the information included in this release until after it announces its financial results for the third 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 third 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:
These risks and other risks are discussed in greater detail under the heading "Risk Factors" in Mitel's Annual Report on Form 10-K for the fiscal year ended April 30, 2011, which has been filed with the U.S. Securities and Exchange Commission on July 1, 2011 as well as with Canadian securities authorities. Except as required by law, Mitel is under no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.
A global market leader in business communications powering more than two billion business connections, Mitel helps businesses and service providers connect, collaborate and provide innovative services to their customers. Our innovation and communications experts serve business users in more than 100 countries. For more information, go to www.mitel.com and follow us on Twitter @Mitel.
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Mitel Public Relations
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