Avaya — Q1 FY2014 Earnings Presentation
14 slides from Avaya's earnings presentation, Feb 18, 2014
Slide 1: Avaya Q1 2014 Earnings Call
The Power of We™ Avaya Q1 2014 Earnings Call February 18, 2014
Slide 2: Forward-Looking Statements
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
Slide 3: Fiscal Q1 2014 Key Messages
Fiscal Q1 2014 Key Messages Avaya remains committed to innovation in its product portfolio Avaya is focused on bringing the Go-To-Market approach for our products and services into better alignment with the needs of the enterprise and mid-market segments Avaya’s Q1 financial performance reflec
Slide 4: Fiscal Q1 2014 Financial Highlights
Fiscal Q1 2014 Financial Highlights (Amounts other than Revenue are non-GAAP) Revenue of $1,158 million down from the prior quarter – 3.5% sequential decrease is consistent with typical seasonality – 3rd sequential quarter of product revenue growth in Networking – Government-related revenue essent
Slide 5: Fiscal Q1 2014 Financial Highlights - Continued
Fiscal Q1 2014 Financial Highlights - Continued (Amounts other than Cash Flow and Cash are non-GAAP) Cash and cash equivalents balance of $300 million as of 12/31/13 Cash flow from operations was $64 million versus $52 million in Q4 Three capital structure events subsequent to quarter end: – S
Slide 6: Income Statement
Income Statement (All amounts non-GAAP, other than Revenue, and dollars in millions) FQ1 2014 FQ4 2013 FQ1 2013 Revenue: Product $574 $617 $631 Services $584 $583 $609 Total Revenue $1,158 $1,200 $1,240 Gross Margin: Product 60.3% 62.4% 58.6% Services 54.1% 53.5% 52.4% Total Gross Margin 57.2% 58.1%
Slide 7: Revenue by Geographic Region
Revenue by Geographic Region (Amounts GAAP and dollars in millions) FQ1 2014 FQ4 2013 FQ1 2013 Revenue U.S. $631 $659 $670 EMEA $303 $313 $331 APAC $114 $113 $123 AI $110 $115 $116 Total $1.158 $1,200 $1,240 % of Total Revenue U.S. 54% 55% 54% EMEA 26% 26% 27% APAC 10% 9% 10% AI 10% 10% 9% Total 100
Slide 8: Balance Sheet and Operating Metrics
Balance Sheet and Operating Metrics (Dollars in millions, Balance sheet items as of the end of the period indicated) FQ1 2014 FQ4 2013 FQ1 2013 Total Cash and Cash $300 $288 $285 Equivalents Cash from Operations $64 $52 $6 Capital Expenditures and $33 $34 $30 Capitalized Software Days Sales Outstand
Slide 9: Financial Summary
Financial Summary ($M) 4Q13 1Q14 Business Q1 Revenue - down Non-GAAP Actual Actual Model 3.5% sequentially Revenue $1,200 $1,158 $1,100 – $1,150 – Consistent with seasonality Gross Margin % 58.1% 57.2% 58.5% – 59.5% – 3rd sequential quarter of Networking growth Oper Expense % 37.8% 40.2% 38.5% – 39
Slide 10: Avaya Debt Maturity Profile
Avaya Debt Maturity Profile ($ in Billions, by calendar year) Cash Pay Notes (9.75%) TLB – 3 (4.8%) Senior Secured Bonds (7%) PIK Toggle Notes (10.125%) TLB – 4 (7.5%) Senior Secured Bonds (9%) $2.5 TLB – 6 (6.5%) 2nd Lien Bonds (10.5%) 2.0 $2.0 $1.5 1.3 1.4 1.1 $1.0 $0.5 0.15 $0.0 2014 2015 2016 20
Slide 11: Upcoming Investor Events
Upcoming Investor Events (See www.avaya.com/investors for additional details) Tuesday, February 25, 2014 – JP Morgan Global High Yield and Leveraged Finance Conference – Presenter: Dave Vellequette, CFO – Presentation Time: 1:00 PM Pacific / 4:00 PM Eastern Thursday, March 6, 2014 – Morgan Stanl
Slide 12: Non-GAAP Reconciliation: Adjusted EBITDA
Non-GAAP Reconciliation Adjusted EBITDA Avaya Inc. S upplemental S chedule of Non-GAAP Adjusted EBITDA (Unaudited; in millions) For the three months ended December 31, 2013 2012 Net loss $ (54) $ (85) Interest expense 119 108 Interest income - (1) Provision for (benefit from) income taxes 27 (9) Dep
Slide 13: Non-GAAP Reconciliation: Gross Margin and Operating Income
Non-GAAP Reconciliation Gross Margin and Operating Income Avaya Inc. S upplemental S chedules of Non-GAAP Reconciliations (Unaudited; in millions) For the Three Months Ended Dec. 31, Mar. 31, June 30, S ept. 30, Dec. 31, 2012 2013 2013 2013 2013 Reconciliation of Non-GAAP Gross Profit and Non-GAAP G
Slide 14: Non-GAAP Reconciliation: Product and Services Gross Margins
Non-GAAP Reconciliation Product and Services Gross Margins Avaya Inc. S upplemental S chedules of Non-GAAP Reconciliation of Gross Profit and Gross Margin by Portfolio (Unaudited; in millions) For the Three Months Ended Dec. 31, Mar. 31, June 30, S ept. 30, Dec. 31, 2012 2013 2013 2013 2013 Reconcil