Attached files
file | filename |
---|---|
EX-99.2 - EXHIBIT 99.2 - AVAYA INC | q4fy16prelimresults10191.htm |
8-K - 8-K - AVAYA INC | a8k4q16preliminaryearnings.htm |
Media Inquiries: Investor Inquiries:
Christina Knittel John Nunziati
408-496-3417 408-562-3780
crknittel@avaya.com jfnunziati@avaya.com
Avaya Announces Preliminary Fourth Fiscal Quarter 2016
Financial Results
Santa Clara, Calif. — October 19, 2016 – Avaya announced today preliminary unaudited financial
results for fourth fiscal quarter ended September 30, 2016. These results include: (i) revenue in
the range of $945 million to $955 million, (ii) non-GAAP gross margin of approximately 61% to
62%, and (iii) adjusted EBITDA up year-over-year to the range of $270 million to $280 million. This
results in adjusted EBITDA for the 2016 fiscal year in the range of $926 million to $936 million, up
from $900 million for the 2015 fiscal year. Revenue results reflect year-over-year growth in
Contact Center and Networking products, and Cloud & Managed Services and sequential growth
in Unified Communications products. The Company’s cash balance as of September 30, 2016 was
approximately $336 million, up sequentially and year-over-year. The Company remains focused on
its assessment of capital structure improvement opportunities. The reporting date for fourth fiscal
quarter and full fiscal year ended September 30, 2016 results will be announced separately.
The Company noted that these financial results for the fourth fiscal quarter and year ended
September 30, 2016 are preliminary and subject to the completion of its financial closing
procedures and audit by its independent auditors. There can be no assurance that the Company’s
final results for the fourth fiscal quarter and year ended September 30, 2016 will not differ from
these preliminary estimates as a result of quarter-end closing, review procedures, or review
adjustments, and any such changes could be material.
Links to this preliminary financial results press release and Avaya’s SEC filings are available on
the investor page of Avaya’s website (www.avaya.com/investors).
Q4 FY’16 Preliminary Financial Results – October 19, 2016
$M
(Non-GAAP except
Revenue and Cash)
4Q15
Actual
(As Reported)
3Q16
Actual
(As Reported)
4Q16
Guidance
Range
4Q16
Preliminary
Results
Revenue $1,008 $882 $860 – $890 $945 – $955
Gross Margin % 62.0% 62.4% N/A ~61% – 62%
Adj EBITDA $ $246 $223 N/A $270 – $280
Adj EBITDA % 24.4% 25.3% 26% – 28% 28% – 29%
Cash Balance $323 $269 N/A ~$336
Preliminary Highlights:
Year-over-year growth in Contact Center and Networking products, and Cloud & Managed
Services; sequential growth in Unified Communications products
Sequential and year-over-year increase in Adjusted EBITDA $ and %, with Adjusted
EBITDA % reaching record level
Cash balance up sequentially and year-over-year
Continued focus on assessment of capital structure improvement opportunities
FY ‘16 Adjusted EBITDA in the range of ~$926M – $936M or a record ~25% of FY ‘16
revenue, up from $900M for FY ‘15
For a reconciliation of non-GAAP to GAAP financial information, please see our most recent filings at
www.sec.gov
Use of non-GAAP (Adjusted) Financial Measures
The information furnished in this release includes non-GAAP financial measures that differ from
measures calculated in accordance with generally accepted accounting principles in the United
States of America (“GAAP”), including Adjusted EBITDA and non-GAAP gross margin.
EBITDA is defined as net income (loss) before income taxes, interest expense, interest income
and depreciation and amortization. Adjusted EBITDA is EBITDA further adjusted to exclude certain
charges and other adjustments described in our SEC filings.
We believe that including supplementary information concerning Adjusted EBITDA is appropriate
because it serves as a basis for determining management and employee compensation. In
addition, we believe Adjusted EBITDA provides more comparability between our historical results
and results that reflect purchase accounting and our current capital structure. Accordingly,
Adjusted EBITDA measures our financial performance based on operational factors that
management can impact in the short-term, such as our pricing strategies, volume, costs and
expenses of the organization and it presents our financial performance in a way that can be more
easily compared to prior quarters or fiscal years.
EBITDA and Adjusted EBITDA have limitations as analytical tools. EBITDA measures do not
represent net income (loss) or cash flow from operations as those terms are defined by GAAP and
do not necessarily indicate whether cash flows will be sufficient to fund cash needs. While EBITDA
measures are frequently used as measures of operations and the ability to meet debt service
requirements, these terms are not necessarily comparable to other similarly titled captions of other
companies due to potential inconsistencies in the method of calculation. Adjusted EBITDA
excludes the impact of earnings or charges resulting from matters that we consider not to be
indicative of our ongoing operations. In particular, our formulation of Adjusted EBITDA allows
adjustment for certain amounts that are included in calculating net income (loss). Our debt
agreements also allow us to add back restructuring charges, certain fees payable to our private
equity sponsors and other advisors, resolution of certain legal matters, and a portion of our
pension and post-employment benefits costs, which represents the amortization of pension service
costs and actuarial gain or (loss) associated with these benefits. However, these are expenses that
may recur, may vary and are difficult to predict.
Non-GAAP gross margin excludes the amortization of acquired technology intangible assets, share
based compensation, costs to settle certain legal matters, impairment of long lived assets, and
purchase accounting adjustments. We have included non-GAAP gross margin because we believe
it provides additional useful information to investors regarding our operations by excluding those
charges that management does not believe are reflective of the Company’s ongoing operating
results when assessing the performance of the business.
These non-GAAP measures are not based on any comprehensive set of accounting rules or
principles and have limitations as analytical tools in that they do not reflect all of the amounts
associated with the Company’s results of operations as determined in accordance with GAAP. As
such, these measures should only be used to evaluate the Company's results of operations in
conjunction with the corresponding GAAP measures.
The estimate of Adjusted EBITDA provided in this press release has been determined consistent
with the methodology for calculating Adjusted EBITDA as set forth in the Company’s Annual
Report on Form 10-K for the fiscal year ended September 30, 2015.
About Avaya
Avaya enables the mission critical, real-time communication applications of the world’s most
important operations. As the global leader in delivering superior communications experiences,
Avaya provides the most complete portfolio of software and services for contact center and unified
communications with integrated, secure networking— offered on premises, in the cloud, or a
hybrid. Today’s digital world requires some form of communications enablement, and no other
company is better positioned to do this than Avaya. For more information, please visit
www.avaya.com.
This press release contains certain forward-looking statements. These statements may be
identified by the use of forward-looking terminology such as "anticipate," "believe," "continue,"
"could," "estimate," "expect," "intend," "may," "might," "plan," "potential," "preliminary," "predict,"
"should," "will," or “would” or the negative thereof or other variations thereof or other comparable
terminology and include, but are not limited to, statements regarding the Company’s preliminary
financial results for fourth fiscal quarter ended September 30, 2016. We have based these forward-
looking statements on our current expectations, assumptions, estimates and projections. While we
believe these are reasonable, such forward looking statements are only predictions and involve
known and unknown risks and uncertainties, many of which are beyond our control, including, but
not limited to: adjustments in the calculation of financial results for the quarter and year end, or the
application of accounting principles; discovery of new information that alters expectations about
fourth quarter results or impacts valuation methodologies underlying these results; accounting
changes required by United States generally accepted accounting principles; and other factors
affecting the Company detailed from time to time in the Company’s filings with the SEC that are
available at www.sec.gov. These and other important factors may cause our actual results,
performance, or achievements to differ materially from any future results, performance, or
achievements expressed or implied by these forward-looking statements. For a list and description
of such risks and uncertainties, please refer to Avaya's filings with the SEC that are available at
www.sec.gov and in particular, our 2015 Form 10-K filed with the SEC on November 23, 2015.
Avaya disclaims any intention or obligation to update or revise any forward-looking statements.
###
Follow Avaya