Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - AVAYA INC | d481149d8k.htm |
| EX-99.1 - PRESS RELEASE - AVAYA INC | d481149dex991.htm |
 February 5, 2013
Avaya Q1 2013 Earnings Call
The Power of We
™
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 2012 Form 10-K. 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
February 5, 2013. 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 Q1 2013 Financial Highlights
(Amounts other than Revenue and Cash Balance are non-GAAP unless
specified) Revenue of $1.24 billion declined 2.9% over the prior
quarter –
Revenue decrease comprised of:
–
Product revenue a 3.2% decline; Service revenue a 2.6% decline
–
U.S. Federal Government sector of approximately 60% of revenue decline;
Americas International of approximately 38% of revenue decline
Gross margin improved over the prior quarter to a record 55.6%
Operating income of $193 million
–
Operating margin 15.6%
Adjusted EBITDA of $251 million or 20.2% of revenue
Cash balance of $285 million |
 ©
2012 Avaya –
Proprietary. Use pursuant to your signed agreement or Avaya policy.
4
Income Statement
(Amounts non-GAAP (other than Revenue) and dollars in millions)
FQ1 2013
FQ4 2012
FQ1 2012
Revenue
$1,240
$1,277
$1,387
Gross Margin
55.6%
54.7%
54.4%
Operating Margin
15.6%
16.1%
15.7%
Adjusted EBITDA
$251
$267*
$279
* For reconciliation of adjusted EBITDA for the fourth quarter of 2012 see our
Form 8-K filed with the SEC on December 11,2012 at www.sec.gov.
|
 ©
2012 Avaya –
Proprietary. Use pursuant to your signed agreement or Avaya policy.
5
Revenue by Geographic Region
(Amounts GAAP and dollars in millions)
FQ1 2013
FQ4 2012
FQ1 2012
Revenue
U.S.
$670
$694
$748
EMEA
$331
$327
$365
APAC
$123
$126
$126
AI
$116
$130
$148
Total
$1,240
$1,277
$1,387
% of Total Revenue
U.S.
54.0%
54.3%
53.9%
EMEA
26.7%
25.6%
26.3%
APAC
9.9%
9.9%
9.1%
AI
9.4%
10.2%
10.7%
Total
100.0%
100.0%
100.0% |
 ©
2012 Avaya –
Proprietary. Use pursuant to your signed agreement or Avaya policy.
6
Balance Sheet and Operating Metrics
(Dollars in millions, Balance sheet items as of the end of the period
indicated) FQ1 2013
FQ4 2012
FQ1 2012
Total Cash and Cash
Equivalents
$285
$337
$345
Cash from Operations
6
104
(10)
Capital Expenditures and
Capitalized Software
$30
$37
$26
Days Sales Outstanding
55
55
49
Inventory Turns
9
10
10
Headcount
16,393
16,951
18,192 |
 ©
2012 Avaya –
Proprietary. Use pursuant to your signed agreement or Avaya policy.
7
Adjusted EBITDA Reconciliation
2012
2011
Net loss
(85)
$
(26)
$
Interest expense
108
109
Interest income
(1)
(1)
Benefit from income taxes
(9)
(2)
Depreciation and amortization
114
143
127
223
Restructuring charges, net
84
21
Sponsors' fees
2
2
Acquisition-related costs
-
1
Integration-related costs
4
5
Loss on extinguishment of debt
3
-
Third-party fees expensed in connection with the debt
modification 4
-
Non-cash share-based compensation
2
3
Loss on investments and sale of long-lived assets, net
-
1
Loss on foreign currency transactions
2
1
Pension/OPEB/nonretirement postemployment benefits and
long-term disability costs
23
22
Adjusted EBITDA
251
$
279
$
EBITDA
For the three months ended
December 31, |
 ©
2012 Avaya –
Proprietary. Use pursuant to your signed agreement or Avaya policy.
8
Non-GAAP Reconciliation
Dec. 31
Mar. 31,
June 30
Sept. 30,
Dec. 31
2011
2012
2012
2012
2012
GAAP Gross Profit
704
$
613
$
623
$
646
$
666
$
GAAP Gross Margin
50.8%
48.8%
49.8%
50.6%
53.7%
Items excluded:
Amortization of technology intangible assets
50
49
47
46
22
Impairment of capitalized software development costs
-
-
2
4
-
Share-based compensation
1
1
1
1
1
Purchase accounting adjustments
-
1
1
1
-
Non-GAAP Gross Profit
755
$
664
$
674
$
698
$
689
$
Non-GAAP Gross Margin
54.4%
52.8%
53.9%
54.7%
55.6%
Reconciliation of Non-GAAP Operating Income
GAAP Operating Income (Loss)
82
$
(66)
$
23
$
76
$
23
$
Percentage of Revenue
6%
-5%
2%
6%
2%
Items excluded:
Amortization of acquired assets
106
105
104
103
79
Restructuring and impairment charges, net
21
90
21
15
84
Acquisition/integration-related costs
6
6
6
6
5
Share-based compensation
3
2
2
1
2
Impairment of capitalized software development costs
-
-
2
4
-
Purchase accounting adjustments
-
1
1
1
-
Non-GAAP Operating Income
218
$
138
$
159
$
206
$
193
$
Percentage of Revenue
15.7%
11.0%
12.7%
16.1%
15.6%
Reconciliation of Non-GAAP Gross Profit
and Non-GAAP Gross Margin
Avaya Inc.
Supplemental Schedules of Non-GAAP Reconciliations
(Unaudited; in millions)
For the Three Months Ended |