Mitel Reports Year-End Financial Results for Fiscal Year 2009

September 24, 2009

Company posts 6.2 percent revenue growth, demonstrates strong operating performance

Mitel reported revenue in fiscal year 2009 of $735.1 million, an increase of 6.2 percent over the previous fiscal year. This was primarily due to growth in the U.S. market. Operating spending as a percentage of revenue declined by 3.4 percent, driven by cost reduction measures taken midway through fiscal year 2009. Earnings before interest, taxes, depreciation, and amortization (EBITDA*) was $85.3 million which represented an increase of $21 million or 33 percent over the previous fiscal year.

"In fiscal 2009, Mitel made proactive business decisions to ensure that the company remained strong in light of current and forecasted economic conditions," says Don Smith, CEO, Mitel. "Our market share growth and industry position is a testament to the strength and commitment of our team."

In fiscal 2009, Mitel incurred a net loss of $193.7 million. This net loss included a non-cash goodwill write-down of $284.9 million. In accordance with GAAP, goodwill is tested for impairment annually. This non-cash goodwill impairment charge does not affect the company's liquidity, cash flows, or future operations. A $23 million charge for integration and restructuring activities also contributed to the net loss.

"Within a challenging economy Mitel continues to demonstrate its strength in the market with a solid five-year growth trend in both revenues and EBITDA*," says Steve Spooner, CFO, Mitel. "Mitel is well positioned for growth, and remains focused on delivering industry-leading solutions to meet the needs of our customers."

MITEL NETWORKS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in millions $US)

	Year ended April 30
	2009	2008
Revenue	$ 735.1	$ 692.0

Cost of Revenue	$ 390.6	$ 367.9

Gross Margin	$ 344.5	$ 324.1
Gross Margin %	46.9%	46.8%

Operating Expenses:
Selling, General and Administrative	248.5	246.6
Research & Development	60.1	62.6
Special Charges and Merger Related Costs	23.3	16.0
Impairment of Goodwill	284.9	-
Loss on Sale of Manufacturing Operations	-	1.0
In-process Research and Development	-	5.0

Operating Loss	$ (272.3)	$ (7.1)
as a % of revenue	-37.0%	-1.0%

Interest Expense	40.1	34.7
FVA on Derivative Instruments	(100.2)	(61.9)
Debt and Warrant Retirement Costs	-	20.8
Other Expense (Income)	0.8	(1.6)
Tax Recovery	(19.3)	(12.3)

Net Income (Loss)	$ (193.7)	$ 13.2
as a % of revenue	-26.4%	1.9%

EBITDA*	$ 85.3	$ 64.2
as a % of revenue	11.6%	9.3%

*Reconciliation of EBITDA (Non-GAAP Measure)
Operating Loss	$ (272.3)	$ (7.1)
Add: Impairment of Goodwill	284.9	-
Add: Amortization and Depreciation	38.0	32.6
Add: Special Charges and Merger Related Costs	23.3	16.0
Add: In-process Research and Development	-	5.0
Add: Other Items	11.4	17.7
EBITDA	$ 85.3	$ 64.2

About Mitel

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.

Mitel is the registered trademark of Mitel Networks Corporation. All other trademarks are the property of their respective owners.

Contact Information

Sandrine Quinton, Mitel

Tel: +33 1 30 96 43 01

Email: [email protected]

Search

Select your Language

Americas

Europe

Oceania

Mitel Reports Year-End Financial Results for Fiscal Year 2009