Avaya Announces Preliminary Fiscal First Quarter 2013 Results

Avaya Announces Preliminary Fiscal First Quarter 2013 Results and
Reporting Date 
SANTA CLARA, CA -- (Marketwire) -- 01/22/13 --  Avaya Inc., a global
provider of business communications and collaboration systems,
software and services, announced today that, for fiscal first quarter
2013 ended December 31, 2012, the company expects to report the
following results: (i) revenue to be in the range of $1.237 billion
to $1.240 billion, (ii) non-GAAP gross profit as a percentage of
revenue to be approximately 55%, and (iii) adjusted EBITDA to be in
the range of $247 million to $251 million, with a cash balance as of
December 31, 2012 of approximately $285 million. 
The Company noted that its financial results for the first quarter of
fiscal 2013 ended December 31, 2012 are preliminary and subject to
the completion of its financial closing procedures. 
In addition, the Company plans to report fiscal first quarter 2013
results after the market close on Tuesday, February 5, 2013. 
Avaya will also host a conference call to discuss its financial
results at 5:00 p.m. EST on February 5, 2013. A listen-only broadcast
of the conference call and presentation notes can be accessed on the
company's website at www.avaya.com/investors. A replay of the
conference call will be available beginning at 8:00 p.m. EST on
February 5 through March 5, by dialing 855-859-2056 within the United
States and 404-537-3406 outside the United States. The replay access
code is 91163824. 
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.  
Use of Non-GAAP (Adjusted) Financial Measures 
The information furnished in this release includes non-GAAP financial
measures that differ from measures calculated in accordance with
Generally Accepted Accounting Principles in the United States (GAAP),
including adjusted EBITDA and non-GAAP gross margin.  
EBITDA is defined as net income (loss) before income taxes, interest
expense, interest income and depreciation and amortization. Adjusted
EBITDA is EBITDA further adjusted to exclude certain charges and
other adjustments permitted in calculating covenant compliance under
our debt agreements as further described in our SEC filings. We
believe that including supplementary information concerning adjusted
EBITDA is appropriate to provide additional information to investors
to demonstrate compliance with our debt agreements and because it
serves as a basis for determining management compensation. In
addition, we believe adjusted EBITDA provides more comparability
between our historical results and results that reflect purchase
accounting and our current capital structure. Accordingly, adjusted
EBITDA measures our financial performance based on operational
factors that management can impact in the short-term, namely the
company's pricing strategies, volume, costs and expenses of the
organization.  
Adjusted EBITDA has limitations as an analytical tool. Adjusted
EBITDA does not represent net income (loss) or cash flow from
operations as those terms are defined by GAAP and does not
necessarily indicate whether cash flows will be sufficient to fund
cash needs. While adjusted EBITDA and similar measures are frequently
used as measures of operations and the ability to meet debt service
requirements, these terms are not necessarily comparable to other
similarly titled captions of other companies due to the potential
inconsistencies in the method of calculation. Adjusted EBITDA does
not reflect the impact of earnings or charges resulting from matters
that we consider not to be indicative of our ongoing operations. In
particular, based on our debt agreements the definition of adjusted
EBITDA allows us to add back certain non-cash charges that are
deducted in calculating net income (loss). Our debt agreements also
allow us to add back restructuring charges, certain fees payable to
our private equity sponsors and other specific cash costs and
expenses as defined in the agreements and that portion of our pension
costs, other post-employment benefits costs, and non-retirement
post-employment benefits costs representing the amortization of
pension service costs and actuarial gain or loss associated with
these employment benefits. However, these are expenses that may
recur, may vary and are difficult to predict. Further, our debt
agreements require that adjusted EBITDA be calculated for the most
recent four fiscal quarters. As a result, the measure can be
disproportionately affected by a particularly strong or weak quarter.
Further, it may not be comparable to the measure for any subsequent
four-quarter period or any complete fiscal year.  
Non-GAAP gross margin excludes the amortization of technology
intangible assets, impairment of long lived assets, transition
services agreement costs incurred in connection with the acquisition
of Nortel Networks Corp.'s enterprise solutions business, share based
compensation and purchase accounting adjustments. We have included
Non-GAAP gross margin because we believe it provides additional
useful information to investors regarding our operations by excluding
those charges that management does not believe are reflective of the
company's ongoing operating results when assessing the performance of
the business.  
The estimate of adjusted EBITDA provided in this release has been
determined consistent with the methodology for calculating adjusted
EBITDA as set forth in the Company's Annual Report on Form 10-K for
the fiscal year ended September 30, 2012.  
The Company currently expects to provide reconciliations of the
non-GAAP measures included in this release to their most directly
comparable GAAP financial measures in its next SEC report in which
financial results for the quarter ended December 31, 2012 are
included.   
The preliminary financial data included in this release has been
prepared by, and is the responsibility of, the Company's management.
PricewaterhouseCoopers LLP has not audited, reviewed, compiled or
performed any procedures with respect to the accompanying preliminary
financial data. Accordingly, PricewaterhouseCoopers LLP does not
express an opinion or any other form of assurance with respect
thereto.  
Forward-Looking Statements
 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
factors, including those discussed in the Company's Annual Report on
Form 10-K for the fiscal year ended September 30, 2012 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 further list and
description of such risks and uncertainties, please refer to the
Company's filings with the SEC that are available at www.sec.gov. We
caution you that the list of important factors included in the
Company's SEC filings may not contain all of the material factors
that are important to you. In addition, in light of these risks and
uncertainties, the matters referred to in the forward-looking
statements contained in this report may not in fact occur. We
undertake no obligation to publicly update or revise any
forward-looking statement as a result of new information, future
events or otherwise, except as otherwise required by law.  
Media Inquiries: 
Marijke Shugrue 
908-953-7643 (office) 
mshugrue@avaya.com  
Investor Inquiries:
Matthew Booher
908-953-7500 (office)
mbooher@avaya.com 
 
 
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