Mitel Reports September Quarter Results

  • GAAP Revenues of $279.8 million
  • GAAP Gross Margins increased 50 basis points year-over-year to 53.0%

OTTAWA, Nov. 03, 2016 (GLOBE NEWSWIRE) -- MitelĀ® (Nasdaq:MITL) (TSX:MNW), a global leader in real-time business, cloud and mobile communications, today announced financial results for the third quarter ended September 30, 2016.

"In Q3 the Mitel team delivered a solid performance reporting GAAP EPS of $0.20 and non-GAAP EPS of $0.12," said Richard McBee, Mitel's Chief Executive Officer.  "In a highly competitive and rapidly changing landscape, Mitel continued to win new enterprise accounts in premise and cloud, and earned global industry recognition including the Frost & Sullivan Competitive Strategy Innovation and Leadership Award for cloud services. With a clear migration path for customers, a series of new product offerings now in market, and a strong pipeline, we are well-positioned moving into what is typically our strongest quarter of the year."

Financial Highlights
in millions(except per share data) Q3 2016 Q3 2015
Historical Currency Constant Currency 1
GAAP Revenues $ 279.8   $ 290.7   $ 285.8  
GAAP Net Income (Loss) $ 25.1   $ (8.1 ) $ (9.2 )
GAAP EPS $ 0.20   $ (0.07 ) $ (0.08 )

in millions(except per share data) Q3 2016 Q3 2015
Historical Currency Constant Currency 1
Non-GAAP Revenues 2 $ 279.8   $ 293.7   $ 288.8  
Non-GAAP Net Income 3 $ 15.0   $ 15.2   $ 14.1  
Non-GAAP EPS 3 $ 0.12   $ 0.12   $ 0.11  
Adjusted EBITDA 4 $ 34.5   $ 34.9   $ 33.8  

1 - Constant currency estimates for Q3-2015 assumes the same foreign currency exchange rates as in Q3-2016. 2 - Revenues exclude 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 - For a Reconciliation of Non-GAAP Net Income to Net Income (Loss), please refer to the tables at the end of this release. See "Non-GAAP Financial Measurements" below. 4 - Adjusted EBITDA is defined as Net Income (Loss), adjusted for items as noted in the table included in this press release "Reconciliation of Net Income (Loss) to Adjusted EBITDA". See "Non-GAAP Financial Measurements" below.

Business Highlights

  • Significant new contract award for 60,000 private cloud users from a major German automobile manufacturer.  Deployment is scheduled to begin in the fourth quarter of this year.
  • Introduced the new Mitel 6900 series sets with high resolution touch screen display designed for seamless smartphone and desk phone integration, featuring bluetooth sync for automatic handoff from smartphone to desk phone, shared access to contacts across devices and WiFi connectivity.

  • Recurring cloud seats grew by 43,000 during the quarter, up from 31,000 seats added during Q2-2016, and now stand at 494,000 seats. 
  • Bouygues Telecom, a leading enterprise carrier in France, chose Mitel UCaaS solutions to market to their more than two million professional and corporate users.
  • A major European government customer chose to migrate 40,000 seats through a Mitel Cloud enabled service provider.
  • Received the Frost & Sullivan Competitive Strategy Innovation and Leadership Award for cloud services in North America and Europe.

  • Solid year-over-year gross margin improvement of 300 bps.
  • A large Tier 1 wireless carrier in North America has selected Mitel to supply and deploy their Network Functions Virtualization (NFV)-based Converged IP Messaging (CPM) solution, which empowers 2G, 3G and LTE operators to transform their messaging core and deliver messaging over an IP network. 

Business Outlook

Mitel has set the following financial performance guidance for the quarter ending December 31, 2016.  Revenues and Gross Margin % exclude the effect of purchase accounting adjustments.
  Q4-2016 Guidance
GAAP Revenues $310 million to $330 million
GAAP Gross Margin % 54.5% to 56.5%
Adjusted EBITDA % 15.0% to 18.0%
Non-GAAP Net Income 8.0% to 11.0%
Diluted Share count 126,000,000

A reconciliation between the Business Outlook for Q4-2016 on a GAAP and non-GAAP basis is provided in the table entitled "GAAP and non-GAAP Business Outlook for Q4-2016" located in the tables at the end of this release.

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