Mitel Reports First Quarter Results

Mitel (NASDAQ:MITL,TSX:MNW), a global leader in business communications announced financial results for the first quarter ended March 31, 2018.

The company had a GAAP revenue of $313.8 million and non GAAP revenue of $315.3 million. Mitel helps business and service providers connect and collaborate and provide innovative services to customers.

As quoted in the press release:

Financial Highlights from Continuing Operations

in millions (except per share data)	Q1 2018			Q1 2017 – As Reported						Q1 2017 – Pro Forma1
				Historical C urrency			Constant Currency2			Historical Currency			Constant Currency2
GAAP Revenues	$ 313.8			$ 223.1			$ 237.7			$ 310.2			$ 324.8
Non-GAAP Revenues3	$315.3			$223.1			$237.7			$310.8			$325.4
GAAP Net Income (Loss)	($ 21.0		)	($ 19.7		)	($ 16.0		)	($ 45.3		)	($ 41.6		)
Non-GAAP Net Income4	$18.5			$10.9			$14.6			$7.4			$11.1
GAAP EPS – basic	($0.17		)	($0.16		)	($0.13		)	($ 0.37		)	($ 0.34		)
Non-GAAP EPS5	$0.15			$0.09			$0.12			N/A			N/A
Adjusted EBITDA6	$40.7			$21.0			$24.7			$25.3			$29.0

1 – 2017 pro forma results assume Mitel and ShoreTel had combined on January 1, 2017. The pro forma results are not necessarily indicative of results that actually would have occurred had the combination occurred on such date.
2 – Constant currency is a non-GAAP measure that adjusts Q1-2017 results by using the same foreign currency exchange rates as in Q1-2018. See “Non-GAAP Financial Measurements” below.
3 – Non-GAAP revenues is a non-GAAP measure that excludes the effect of purchase price accounting adjustments. For a reconciliation of non-GAAP revenues to GAAP revenues, please refer to the segmented information in this release. See “Non-GAAP Financial Measurements” below.
4 – Non-GAAP Net Income is a non-GAAP measure defined as Net Income (Loss), adjusted for items as noted in the table included in this press release under “Reconciliation of Net Income (Loss) to Non-GAAP Net Income (Loss)”. See “Non-GAAP Financial Measurements” below.
5 – Non-GAAP EPS (earnings per share), or Non-GAAP net income per common share, is a non-GAAP measure defined as Non-GAAP Net Income divided by weighted average number of common shares outstanding, fully diluted.  See the table included in this press release under “Reconciliation of Net Income (Loss) to Non-GAAP Net Income (Loss).” See “Non-GAAP Financial Measurements” below.
6 – Adjusted EBITDA is a non-GAAP measure defined as Net Income (Loss), adjusted for items as noted in the table included in this press release under “Reconciliation of Net Income (Loss) to Adjusted EBITDA”. See “Non-GAAP Financial Measurements” below.

The Company reported that On-Site Products and Services revenues were down 8% in constant currency during the March 2018 quarter and are contracting faster than previously expected. Pro forma overall revenues in constant currency declined 3% versus the prior year quarter.

The Company reported Cloud Recurring revenues that were largely in-line with management’s expectations, but noted that Cloud Recurring bookings declined compared to the prior year quarter.

Favorable foreign exchange rates were a significant contributor to Q1 revenue and earnings, but were partially offset by accelerating market decline for On-Site Products and Services combined with slower than expected integration progress in the Company’s combined UCaaS business.

Business Highlights

• Recurring clouds seats grew by 33,110 seats during the quarter and now total 1,159,509.

• A large UK-based manufacturing company transitions to MiCloud Flex from a competitor in a UCaaS deal with a total contract value of $1.3 million.

• A leading US-based technology company converted an existing Mitel installed contact center to MiCloud Contact Center Engage in a deal with a total contract value of $4.8 million.

• Notable On-Site wins from customers operating in the government vertical included a $2.1 million deal to upgrade a US-based customer to MiVoice MX-ONE and a $1.1 million deal in the UK for a customer upgrading to MiVoice Business Phase 2.

• Mitel announced its new Go-To-Market strategy and Global Partner Program, including the greater use of its two-tier distribution partnership.

• The previously announced sale of DeTeWe closed on April 30, 2018.

Click here for the full text release.