(1) Refer to Supplemental Financial Information accompanying this press release for a reconciliation of GAAP to non-GAAP numbers.
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 Inc. Consolidated Statements of Operations (Unaudited; in millions) For the twelve For the three months months ended ended September 30, September 30, -------------------- -------------------- 2012 2011 2012 2011 --------- --------- --------- ---------REVENUE Products $ 652 $ 768 $ 2,672 $ 2,976 Services 625 651 2,499 2,571 --------- --------- --------- --------- 1,277 1,419 5,171 5,547 --------- --------- --------- ---------COSTS Products: Costs (exclusive of amortization of intangibles) 283 320 1,145 1,314 Amortization of technology intangible assets 46 59 192 257 Services 302 322 1,248 1,344 --------- --------- --------- --------- 631 701 2,585 2,915 --------- --------- --------- ---------GROSS PROFIT 646 718 2,586 2,632 --------- --------- --------- ---------OPERATING EXPENSES Selling, general and administrative 378 442 1,630 1,845 Research and development 120 110 464 461 Amortization of intangible assets 57 58 226 226 Restructuring and impairment charges, net 15 23 147 189 Acquisition-related costs - 1 4 5 --------- --------- --------- --------- 570 634 2,471 2,726 --------- --------- --------- ---------OPERATING INCOME (LOSS) 76 84 115 (94)Interest expense (107) (109) (431) (460)Loss on extinguishment of debt - - - (246)Other (expense) income, net (13) 5 (20) 5 --------- --------- --------- ---------LOSS BEFORE INCOME TAXES (44) (20) (336) (795)(Benefit from) provision for income taxes (54) 79 8 68 --------- --------- --------- ---------NET INCOME (LOSS) $ 10 $ (99) $ (344) $ (863) ========= ========= ========= ========= Avaya Inc. Consolidated Balance Sheets (Unaudited; in millions) September 30, ------------------------ 2012 2011 ----------- -----------ASSETSCurrent assets: Cash and cash equivalents $ 337 $ 400 Accounts receivable, net 782 755 Inventory 255 280 Deferred income taxes, net 18 8 Other current assets 252 274 ----------- -----------TOTAL CURRENT ASSETS 1,644 1,717 ----------- ----------- Property, plant and equipment, net 364 397 Deferred income taxes, net 43 28 Intangible assets, net 1,775 2,129 Goodwill 4,188 4,079 Other assets 180 196 ----------- -----------TOTAL ASSETS $ 8,194 $ 8,546 =========== ===========LIABILITIESCurrent liabilities: Debt maturing within one year $ 37 $ 37 Accounts payable 438 465 Payroll and benefit obligations 262 323 Deferred revenue 616 639 Business restructuring reserve, current portion 84 130 Other current liabilities 302 352 ----------- -----------TOTAL CURRENT LIABILITIES 1,739 1,946 ----------- ----------- Long-term debt 6,084 6,120 Pension obligations 1,763 1,636 Other postretirement obligations 360 502 Deferred income taxes, net 204 168 Business restructuring reserve, non-current portion 51 56 Other liabilities 429 496 ----------- -----------TOTAL NON-CURRENT LIABILITIES 8,891 8,978 ----------- -----------Commitments and contingenciesDEFICIENCY Common stock - - Additional paid-in capital 2,926 2,692 Accumulated deficit (4,236) (3,892) Accumulated other comprehensive loss (1,126) (1,178) ----------- -----------TOTAL DEFICIENCY (2,436) (2,378) ----------- -----------TOTAL LIABILITIES AND DEFICIENCY $ 8,194 $ 8,546 =========== =========== Avaya Inc. Condensed Statements of Cash Flows (Unaudited; in millions) For the twelve months ended September 30, ------------------------ 2012 2011 ----------- -----------Net cash (used for) provided by: Net loss $ (344) $ (863) Operating Activities Adjustments to net loss 610 637 Changes in operating assets and liabilities (222) (74) ----------- ----------- Cash provided by (used for) operating activities 44 (300) Investing activities (271) (101) Financing activities 157 228 Effect of exchange rate changes on cash and cash equivalents 7 (6) ----------- -----------Net decrease in cash and cash equivalents (63) (179)Cash and cash equivalents at beginning of year 400 579 ----------- -----------Cash and cash equivalents at end of year $ 337 $ 400 =========== =========== Avaya Inc. Supplemental Revenue Tables (Unaudited; in millions)For the Three Months For the Three Months Ended Ended September 30,-------------------- -------------------------------------- Dec. Mar. June 31, 31, 30, Revenues Mix Change ------------- --------- ------------- 2011 2012 2012 2012 2011 2012 2011 Amount Pct.------ ------ ------ ------ ------ ---- ---- ------ ----- Revenue by Segment Global Communications$ 667 $ 574 $ 561 Solutions $ 588 $ 692 46% 49% $ (104) -15.0% Purchase accounting - (1) (1) adjustments - (1) 0% 0% 1 82 64 74 Networking 64 77 5% 5% (13) -16.9%------ ------ ------ ------ ------ ---- ---- ------ ----- Total ECS 749 637 634 product revenue 652 768 51% 54% (116) -15.1% 638 620 616 AGS 625 651 49% 46% (26) -4.0%------ ------ ------ ------ ------ ---- ---- ------ -----$1,387 $1,257 $1,250 Total revenue $1,277 $1,419 100% 100% $ (142) -10.0%====== ====== ====== ====== ====== ==== ==== ====== ===== Revenue by Geography$ 748 $ 678 $ 666 U.S. $ 694 $ 767 54% 54% $ (73) -9.5%------ ------ ------ ------ ------ ---- ---- ------ ----- International: 365 327 330 EMEA 327 382 26% 27% (55) -14.4% APAC - Asia 126 117 128 Pacific 126 133 10% 9% (7) -5.3% Americas International - Canada and 148 135 126 Latin America 130 137 10% 10% (7) -5.1%------ ------ ------ ------ ------ ---- ---- ------ ----- Total 639 579 584 International 583 652 46% 46% (69) -10.6%------ ------ ------ ------ ------ ---- ---- ------ -----$1,387 $1,257 $1,250 Total Revenue $1,277 $1,419 100% 100% $ (142) -10.0%====== ====== ====== ====== ====== ==== ==== ====== =====
