Attached files
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| EX-99.1 - PRESS RELEASE - AVAYA INC | d454233dex991.htm |
| 8-K - FORM 8-K - AVAYA INC | d454233d8k.htm |
 December 11, 2012
Avaya Q4 2012 Earnings Call
Exhibit 99.2 |
 ©
2012 Avaya –
Proprietary. Use pursuant to your signed agreement or Avaya policy.
2
Forward -
Looking Statements
Certain statements contained in this presentation are forward-looking
statements, including statements regarding our future financial and
operating performance, as well as statements regarding our future growth
plans and drivers. 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 our filings with the SEC
that
are
available
at
www.sec.gov
and
in
particular,
our
2011
Form
10-K
and
our
first,
second, and third quarter 2012 Form 10-Q‘s. We disclaim any intention or
obligation to update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
This presentation should be read in conjunction with our Form 8-K filed with
the SEC on December 11, 2012. Within this presentation, we refer to
certain non-GAAP
financial measures that involve adjustments to GAAP measures. A
reconciliation between our non- GAAP financial measures and GAAP
financial measures is included on the last two slides of this presentation,
which will be available on our web site at www.avaya.com/investors. |
 ©
2012 Avaya –
Proprietary. Use pursuant to your signed agreement or Avaya policy.
3
Fiscal Q4 2012 Financial Highlights
(Amounts other than Revenue and Cash Balance are non-GAAP unless
specified) Revenue of $1.277 billion grew 2% over the prior quarter
–
Revenue increase comprised of a 3% increase in product revenue and
slightly higher service revenue
Gross margin of 54.7% continued to improve during the second half
of the year just below the historic high in the prior year
Operating income grew almost 30% from the prior quarter
–
Operating
margin
16.1%,
3
plus
percentage
points
higher
than
the
prior
quarter
Adjusted EBITDA improved to $267 million from prior quarter
–
As a percentage of revenue of 20.9%
Cash balance increased 24% from prior quarter |
 ©
2012 Avaya –
Proprietary. Use pursuant to your signed agreement or Avaya policy.
4
FY 2012 Financial Summary
(Amounts in millions)
FY 2012
FY 2011
Revenue
$5,171
$5,547
Gross
Margin
1
54.0%
52.7%
Operating
Margin
1
13.9%
13.1%
Adjusted
EBITDA
1
$971
$971
Cash from Operations
$44
($300)
Cash and Cash Equivalents
$337
$400
1.
Non-GAAP -
refer to supplemental financial Information accompanying
this presentation for a reconciliation of GAAP to non-GAAP numbers.
|
 ©
2012 Avaya –
Proprietary. Use pursuant to your signed agreement or Avaya policy.
5
Income Statement
(Amounts non-GAAP (other than Revenue) and dollars in millions)
FQ4 2012
FQ3 2012
FQ4 2011
Revenue
$1,277
$1,250
$1,419
Gross Margin
54.7%
53.9%
55.0%
Operating Margin
16.1%
12.7%
16.9%
Adjusted EBITDA
$267
$225
$293 |
 ©
2012 Avaya –
Proprietary. Use pursuant to your signed agreement or Avaya policy.
6
Revenue by Geographic Region
(Amounts GAAP and dollars in millions)
FQ4 2012
FQ3 2012
FQ4 2011
Revenue
U.S.
$694
$666
$767
EMEA
$327
$330
$382
APAC
$126
$128
$133
CALA
$130
$126
$137
Total
$1,277
$1,250
$1,419
% of Total Revenue
U.S.
54.3%
53.3%
54.0%
EMEA
25.6%
26.4%
26.9%
APAC
9.9%
10.2%
9.4%
CALA
10.2%
10.1%
9.7%
Total
100.0%
100.0%
100.0% |
 ©
2012 Avaya –
Proprietary. Use pursuant to your signed agreement or Avaya policy.
7
Fiscal 2012 Balance Sheet and Operating Metrics
(Dollars in millions)
FY 2012
FY 2011
Total Cash and Cash Equivalents
$337
$400
Cash from Operations
$44
($300)
Capital Expenditures and
Capitalized Software
$127
$125
Days Sales Outstanding
55
48
Inventory Turns
10
10
Head Count (as of Sept 30 2012)
16,951
18,588 |
 ©
2012 Avaya –
Proprietary. Use pursuant to your signed agreement or Avaya policy.
8
Gross Margin
(1)
(%)
Operating Income
(1)
($M) & Margin
Total Revenue ($M)
Adjusted EBITDA
(1)
($M) & Margin
Financial Metrics
1.
Non-GAAP -
refer to supplemental financial Information accompanying
this presentation for a reconciliation of GAAP to non-GAAP numbers.
5,060
5,547
5,171
49.9%
52.7%
54.0%
795
971
971
15.7%
17.5%
18.8%
573
726
721
11.3%
13.1%
13.9% |
 ©
2012 Avaya –
Proprietary. Use pursuant to your signed agreement or Avaya policy.
9
Avaya Productivity Trend
Headcount data as of fiscal year end
Revenue and Adjusted EBITDA per Headcount ($K)
Revenue per Headcount
Adj. EBITDA per Headcount
267
298
305
42
52
57 |
 ©
2012 Avaya –
Proprietary. Use pursuant to your signed agreement or Avaya policy.
10
Adjusted EBITDA Reconciliation
2012
2011
2012
2011
Net income (loss)
10
$
(99)
$
(344)
$
(863)
$
Interest expense
107
109
431
460
Interest income
-
(2)
(3)
(5)
Provision for income taxes
(54)
79
8
68
Depreciation and amortization
138
155
564
653
201
242
656
313
Impact of purchase accounting
adjustments 1
2
3
-
Restructuring charges, net
14
23
142
189
Sponsors' fees
2
2
7
7
Acquisition-related costs
-
1
4
5
Integration-related costs
5
10
19
132
Loss on extinguishment of debt
-
-
-
246
Third-party fees expensed in connection
with the debt modification -
-
-
9
Non-cash
share-based compensation 1
3
8
12
Write-down of assets held for
sale to net realizable value 1
-
5
1
Loss on investments
and sale of long-lived assets, net -
-
3
1
Impairment of
long-lived assets 4
-
6
-
Reversal of contingent liability
related to acquisition (1)
-
(1)
-
Loss (gain) on foreign currency
transactions 14
(5)
21
(12)
Pension/OPEB/nonretirement
postemployment benefits and long-term disability
costs 25
15
98
68
Adjusted EBITDA
267
$
293
$
971
$
971
$
Avaya Inc.
Supplemental Schedule of Non-GAAP Adjusted EBITDA
(Unaudited; in millions)
EBITDA
For the three months ended
September 30,
For the twelve months ended
September 30, |
 ©
2012 Avaya –
Proprietary. Use pursuant to your signed agreement or Avaya policy.
11
Non-GAAP Reconciliation
Sept. 30,
Dec. 31
Mar. 31,
June 30
Sept. 30,
Sept. 30,
Sept. 30,
Sept. 30,
2011
2011
2012
2012
2012
2010
2011
2012
GAAP Gross Profit
718
$
704
$
613
$
623
$
646
$
2,172
$
2,632
$
2,586
$
GAAP Gross Margin
50.6%
50.8%
48.8%
49.8%
50.6%
42.9%
47.4%
50.0%
Items excluded:
Amortization of technology intangible assets
59
50
49
47
46
291
257
192
TSA
-
-
-
-
-
54
26
-
Impairment of capitalized software development costs
-
-
-
2
4
-
-
6
Share-based compensation
1
1
1
1
1
5
6
4
Purchase accounting adjustments
2
-
1
1
1
5
-
3
Non-GAAP Gross Profit
780
$
755
$
664
$
674
$
698
$
2,527
$
2,921
$
2,791
$
Non-GAAP Gross Margin
55.0%
54.4%
52.8%
53.9%
54.7%
49.9%
52.7%
54.0%
Reconciliation of Non-GAAP Operating Income
GAAP Operating Income (Loss)
84
$
82
$
(66)
$
23
$
76
$
(381)
(94)
$
115
$
Percentage of Revenue
6%
6%
-5%
2%
6%
-8%
-2%
2%
Items excluded:
Amortization of acquired assets
117
106
105
104
103
509
483
418
Restructuring and impairment charges, net
23
21
90
21
15
187
189
147
Acquisition/integration-related costs
11
6
6
6
6
228
136
24
Share-based compensation
3
3
2
2
1
19
12
8
Impairment of capitalized software development costs
-
-
-
2
4
-
-
6
Strategic initiative costs
-
-
-
-
-
6
-
-
Purchase accounting adjustments
2
-
1
1
1
5
-
3
Non-GAAP Operating Income
240
$
218
$
138
$
159
$
206
$
573
$
726
$
721
$
Percentage of Revenue
16.9%
15.7%
11.0%
12.7%
16.1%
11.3%
13.1%
13.9%
Reconciliation of Non-GAAP Gross Profit
and Non-GAAP Gross Margin
Avaya Inc.
Supplemental Schedules of Non-GAAP Reconciliations
(Unaudited; in millions)
For the Twelve Months Ended
For the Three Months Ended |