Avaya Reports Fourth Fiscal Quarter and Fiscal 2013 Financial Results

20 Nov 2013
Fourth Quarter 2013 Highlights:
  • Revenue of $1.2 billion
  • Operating Income of $113 million, Non-GAAP Operating Income(1) of $244 Million
  • Adjusted EBITDA(1) of $295 Million, 24.6% of revenue; both record levels
Fiscal 2013 Highlights
  • Revenue of $4.7 billion
  • Operating Income of $78 million, Non-GAAP Operating Income(1) of $721 Million
  • Adjusted EBITDA(1) of $943 Million, record level of 20% of revenue
Santa Clara, Calif.— Avaya Inc., a global provider of business communications and collaboration systems, software and services, today reported results for the fourth quarter and full fiscal-year ended September 30, 2013.
 
Total revenue for the fourth quarter was $1.2 billion, up 4.3% compared to the prior quarter.  On a year over year basis revenue was down 6% compared to the fourth quarter of fiscal 2012.  For the fourth fiscal quarter, adjusted EBITDA was $295 million which compares to adjusted EBITDA of $225 million for the prior quarter and $267 million for the fourth quarter of fiscal 2012.  Non-GAAP operating income was $244 million compared to non-GAAP operating income of $171 million for the prior quarter and $206 million for the fourth quarter of fiscal 2012. Fourth quarter cash flow from operations was $52 million. Cash and cash equivalents totaled $288 million as of September 30, 2013.
 
For fiscal 2013, Avaya reported revenue of $4.7 billion, down 9% compared to fiscal 2012 revenue of $5.17 billion. Non-GAAP operating income was $721 million in fiscal 2013 compared to $721 million in fiscal 2012.  Fiscal 2013 adjusted EBITDA of $943 million was down $28 million compared to fiscal 2012.
 
"Avaya closed fiscal 2013 delivering solid fourth quarter results reflecting advancement of our business model." said Kevin Kennedy, president and CEO. "Through the year, Avaya introduced over 100 new product releases to the market.  Avaya’s portfolio of easy-to-use, high quality mobile video and collaboration tools is well positioned to meet the requirements of an increasingly mobile and connected anytime/anywhere workforce. As we transition into fiscal 2014, Avaya remains focused on broadening our innovative product portfolio, improving our go-to-market alignment with the markets we serve, and executing against our business model."
 
Fourth Fiscal Quarter Highlights
  • Revenue of $1.2 billion increased 4.3% compared to the prior quarter and decreased 6.0% compared to the fourth quarter of fiscal 2012
  • Gross margin was 56.8% compared to 54.5% for the prior quarter and 50.6% for the fourth quarter of fiscal 2012
  • Non-GAAP gross margin(1) was 58.1% compared to 56.0% for the prior quarter and 54.7% for the fourth quarter of fiscal 2012
  • GAAP operating income was $113 million compared to GAAP operating income of $14 million for the prior quarter and $76 million for the fourth quarter of fiscal 2012 
  • Adjusted EBITDA was $295 million or 24.6% of revenue compared to $225 million or 19.5% of revenue for the prior quarter and $267 million or 20.9% of revenue for the fourth quarter of fiscal 2012
  • Fourth quarter adjusted EBITDA, fourth quarter and full-year total adjusted EBITDA as a percentage of revenue, and fourth quarter and full-year total gross margin percentage were all record levels for the company.
  • Product revenue of $617 million increased by 10.0% compared to the prior quarter and decreased by 5.4% compared to the fourth quarter of fiscal 2012. 
  • Avaya Global Services revenue of $583 million decreased 1.2% compared to the prior quarter and decreased 6.7% compared to the fourth quarter of fiscal  2012
  • For the fourth fiscal quarter, percentage of revenue by geography was:
- U.S. – 55%,    
- EMEA – 26%,
- Asia-Pacific – 9%    
- Americas International – 10%.
Conference Call and Webcast
Avaya will discuss these results at 2:00 p.m. PST on Wednesday, November 20, 2013 in a live webcast and conference call.  To join the webcast, listeners should access the investor page of our website (www.avaya.com/investors).  Supplementary materials will be available at the same location.  Following the live webcast, a replay will be available at the same web address in our event archives. 
 
To access the webcast by phone, dial 800-882-9327 in the U.S. or Canada and 706-645-9730 for international callers using the conference passcode number of 94144915.  To ensure you are connected prior to the start, we suggest you access the website or the call 10-15 minutes before the start time. 
 
For those unable to participate during the live event, a replay of the conference call will be available beginning at 5:00 p.m. PST on November 20, 2013 through December 20, 2013 by dialing 855-859-2056 or 800-585-8367 within the United States and 404-537-3406 outside the United States. The replay access code is 94144915.
 
The following financial tables are presented in accordance with GAAP, unless otherwise specified: here.
 
About Avaya
Avaya is a global provider of business collaboration and communications solutions, providing unified communications, contact centers, networking and related services to companies of all sizes around the world. For more information please visit www.avaya.com.
 
Certain statements contained in this press release may be 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," "predict," "should" or "will" or other similar terminology.  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 involve known and unknown risks and uncertainties, many of which are beyond our control. These and other important factors may cause our actual results to differ materially from any future results 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. Avaya disclaims any intention or obligation to update or revise any forward-looking statements.
 
(1)Refer to Supplemental Financial Information accompanying this press release for a reconciliation of GAAP to non-GAAP numbers and for reconciliation of adjusted EBITDA for the third quarter of fiscal 2013 see our Form 10-Q filed with the SEC on August 9, 2013 at www.sec.gov.

Deb Kline

908-953-6179

klined@avaya.com

Matthew Booher

Investor Inquiries

908-953-7500

mbooher@avaya.com

John Nunziati

Avaya Investor Relations

+1 408-562-3780

jfnunziati@avaya.com