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Mitel Reports Third Quarter Fiscal 2013 Financial Results

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.

Business Unit Results

  • Mitel Communications Solutions revenues for the third quarter of fiscal 2013 were $117.9 million, compared to $127.2 million for the third quarter of fiscal 2012. Operating margin was consistent with the prior year's quarter.
  • Mitel NetSolutions revenues for the third quarter of fiscal 2013 grew 4% to $21.0 million from the same quarter of 2012. Operating margin was consistent with the prior year's quarter.

"In the fiscal third quarter, we saw continued strength in our gross margin, Adjusted EBITDA and cash flow generation," said Steve Spooner, Chief Financial Officer, Mitel. "Mitel's solid operating performance was a key factor in our ability to refinance our credit facilities on favorable terms, providing significant operational flexibility in the years ahead. Our forecast reflects our continued focus to execute on our strategy while remaining cautious in a challenging macroeconomic environment."

Business Highlights

  • Continued growth of Mitel's cloud customer base with more than 30,000 new cloud users added in the third quarter, bringing the total installed base to more than 228,000 cloud users.
  • Recognized by Frost & Sullivan with the 2013 North America Award for Product Leadership for pioneering product developments in real-time communications software virtualization, which is a capability critical to enabling customers to migrate their business communications to the cloud.
  • Introduction of Mitel Communications Director 6.0 with enhancements to the user experience, improvements for cloud environments, new features for financial services and education markets, and simplified installation.

Business Outlook

Mitel has set the following financial performance guidance for the fourth quarter of fiscal year 2013 ending April 30, 2013.

  • Revenue from continuing operations is expected to be in the range of $143 to $148 million.
  • Gross margin percentage from continuing operations is expected to be in the range of 55.0 to 56.0 percent.
  • Non-GAAP operating expenses as a percentage of revenue from continuing operations are expected to be in the range of 41.5 to 42.5 percent. Non-GAAP operating expenses include SG&A and R&D expenses but exclude estimated amortization of $5.5 million for acquisition-related intangible assets and estimated stock-based compensation expense of $1.1 million.

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 third quarter ended January 31, 2013. To access the conference call, dial 866-321-8231. Callers outside the U.S. and Canada should dial 416-642-5213. A replay of the conference call will be available through Tuesday, March 5, 2013. To access the replay, please dial 888-203-1112 and enter pass code 6324700. Callers outside the U.S. and Canada should dial 647-436-0148 and enter pass code 6324700. 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 income and non-GAAP operating expenses. 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.

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