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Avaya Reports Fourth Fiscal Quarter And Fiscal Year 2012 Results

Revenues up sequentially to $1.28 billion

For Immediate Release:11 Dec 2012

Fourth Quarter 2012
  • Revenue of $1.28 billion
  • Operating Income of $76 Million, Non-GAAP Operating Income(1) of $206 Million
  • Adjusted EBITDA(1) of $267 Million
Santa Clara, CA. – Avaya Inc., a global provider of business communications and collaboration systems, software and services, today reported results for the fourth quarter and full-year ended September 30, 2012. For the fourth fiscal quarter, revenue was $1.28 billion, up 2% compared to the prior quarter and down 10% compared to the fourth fiscal quarter of fiscal 2011. Operating income was $76 million compared to operating income of $23 million for the prior quarter and $84 million for the fourth quarter of fiscal 2011. Fourth quarter adjusted EBITDA was $267 million which compares to adjusted EBITDA of $225 million for the prior quarter and $293 million for the fourth quarter of fiscal 2011.  Cash flow from operations was $104 million for the fourth quarter. Cash and cash equivalents was $337 million as of September 30, 2012 up 24% from the prior quarter.
For fiscal 2012, Avaya reported revenue of $5.17 billion, down 7% compared to fiscal 2011 revenue of $5.55 billion. Operating income improved by $209 million to $115 million in fiscal 2012 compared to an operating loss of $94 million in fiscal 2011. Fiscal 2012 adjusted EBITDA of $971 was unchanged compared to fiscal 2011.
"Fiscal 2012 was challenged by cautious or deferred spending in several sectors. We are encouraged by our performance over the last two quarters and our operating income improvement for the year," said Kevin Kennedy, President and CEO, Avaya.  "We've introduced new products in the small and medium business segment and in open mobile enterprise collaboration, as well as made an important video acquisition in Radvision. Continued expense management and surgical restructuring enabled double digit sequential quarterly improvements in adjusted EBITDA. Adjusted EBITDA as a percentage of revenue of 18.8% for fiscal 2012 was at its highest level in over six years. As we move forward in fiscal 2013 we remain focused on growth via new product absorption and continued productivity improvements."
 
Fourth Fiscal Quarter Highlights
  • Revenue of $1.28 billion increased 2% compared to the prior quarter and decreased 10% compared to the fourth quarter of fiscal 2011
  • Gross margin was 50.6% compared to 49.8% for the prior quarter and 50.6% for the fourth quarter of fiscal 2011
  • Non-GAAP gross margin(1) was 54.7% compared to 53.9% for the prior quarter and 55.0% for the fourth quarter of fiscal 2011
  • Adjusted EBITDA was $267 million or 20.9% of revenue compared to $225 million or 18.0% of revenue for the prior quarter and $293 million or 20.6% for the fourth quarter of fiscal 2011
  • Global Communications Solutions revenue of $588 million increased 4.8% compared to the prior quarter and decreased 15.0% compared to the fourth quarter of fiscal 2011
  • Networking revenue of $64 million decreased 13.5% compared to the prior quarter and decreased 16.9% compared to the fourth quarter of 2011
  • Avaya Global Services revenue of $625 million increased 1.5% compared to the prior quarter and decreased 4.0% compared to the fourth quarter of 2011
  • Revenue from the U.S. represented 54% of revenue for the fourth quarter, EMEA represented 26% of revenue for the fourth quarter, Asia – Pacific represented 10% of revenue for the fourth quarter and Americas International represented 10% of revenue for the fourth quarter
  • The Company had $337 million in cash and cash equivalents as of September 30, 2012
Conference Call and Webcast
Avaya will host a conference call to discuss these results at 5:00 p.m. EST on Tuesday, December 11, 2012.  To access the conference call, dial 800-882-9327 in the U.S. or Canada and 706-645-9730 for international callers and provide the operator the conference passcode number of 76646392.  To ensure you are on the call from the start, we suggest you access the call 10-15 minutes prior to the start of the call.
                 
WEBCAST Information: Avaya will webcast this conference call live.  To ensure that you are on the webcast, we suggest that you access our website (www.avaya.com/investors) 10-15 minutes prior to the start.  Supplementary materials accompanying the conference call are available at the same location.  Following the live webcast, a replay will be available on our archives at the same web address.
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 are 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 expectations, assumptions, estimates and projections are reasonable, such forward looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. 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. Avaya disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
The following financial tables are presented in accordance with GAAP, unless otherwise specified: Avaya Fourth Fiscal Quarter and Fiscal Year 2012 Tables.
1Refer to Supplemental Financial Information accompanying this press release for a reconciliation of GAAP to non-GAAP numbers.

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