Avaya Reports Second Quarter Fiscal 2018 Financial Results
Second Quarter Fiscal 2018 (1) :
- Revenue of $672 million, non-GAAP(2) revenue of $757 million
- Adjusted EBITDA of $187 million(2) or 24.7% of non-GAAP revenue
- Completed acquisition of Spoken Communications
Avaya Holdings Corp. (NYSE: AVYA) today reported financial results for the second quarter and first six months of fiscal 2018
ended March 31, 2018. Due to the company’s emergence from Chapter 11 proceedings during the first quarter of fiscal 2018, and
adoption of fresh start accounting effective on December 15, 2017, the results for the first quarter and first six-months of
fiscal 2018 are required by GAAP to be presented separately as the predecessor period from October 1, 2017 through December 15,
2017 (inclusive of results prior to October 1, 2017, the “Predecessor” period) and the successor period from December 16, 2017
through December 31, 2017 or March 31, 2018, as applicable (each, a “Successor” period). The application of fresh start accounting
results in a new basis of accounting making the results of the Predecessor period not comparable to the results of the Successor
period. Where applicable we have, however, combined results of the Predecessor and Successor periods for discussion purposes as we
believe it provides the most meaningful basis to analyze our results.(1)
“We are excited about our results for our first full quarter as a public company. They underscore the momentum generated by our
increased investments in the business even during what is historically a weak seasonal quarter and represent a significant step
forward in our progress against strategic goals for growth,” said Jim Chirico, President and CEO, Avaya. “We continue to
deliver results by making significant progress in customer-driven innovations and advancing our technology plays, including our
acquisition of Spoken Communications that has accelerated our multitenant cloud capabilities, our strategic alliance with Afiniti
that uses behavioral pairing to match customers with contact center agents and our Avaya Mobile Experience announcement that
changes the game by reducing contact center costs and offering omnichannel communications for mobile customers.”
Revenue for the second quarter of fiscal 2018 was $672 million, including $1 million related to Avaya’s former Networking
business, which was sold on July 14, 2017. Revenue for the combined period from October 1, 2017 through December 31, 2017 (the
“Combined First Quarter Fiscal 2018” (1)), was $752 million, including $3 million related to the Networking business.
Revenue for the second quarter of fiscal 2017 ending March 31, 2017 was $804 million, including $51 million related to the
Networking business.
Non-GAAP revenue adjusted to further exclude the revenue of the Networking business was $756 million for the second quarter of
fiscal 2018, $16 million lower than the prior quarter (on a combined basis), representing a decline of approximately 2%, primarily
as a result of seasonality and $2 million higher than the second quarter of fiscal 2017.
Gross margin for the second quarter of fiscal 2018 was 48.1%. Non-GAAP gross margin was 62.4%, a record percentage for a second
quarter result, compared to 61.8% for the Combined First Quarter Fiscal 2018 and 60.9% for the second quarter of fiscal 2017.
Operating loss for the second quarter of fiscal 2018 was $89 million, compared to operating income of $38 million in Combined
First Quarter Fiscal 2018, and operating income of $75 million for the second quarter of fiscal 2017. Non-GAAP operating income for
the second quarter of fiscal 2018 was $157 million, representing a second quarter record 20.7% percentage of non-GAAP revenue,
compared to $172 million for the prior quarter (on a combined basis) and $159 million for the second quarter of fiscal 2017. Net
loss for the second quarter of fiscal 2018 was $130 million, compared to net income of $3,214 million for the Combined First
Quarter Fiscal 2018, and a net loss of $8 million for the second quarter of fiscal 2017.
For the second quarter of fiscal 2018, adjusted EBITDA was $187 million or 24.7% of non-GAAP revenue, compared to adjusted
EBITDA of $206 million, or 26.6% of non-GAAP revenue, for the Combined First Quarter Fiscal 2018 and $199 million, or 24.8% of
revenue, for the second quarter of fiscal 2017.
Cash provided by operating activities for the second quarter of fiscal 2018 was $54 million, compared to cash used for operating
activities of $374 million during the Combined First Quarter Fiscal 2018, and cash provided by operating activities of $97 million
during the second quarter of fiscal 2017. Cash and cash equivalents totaled $311 million as of March 31, 2018, compared to
$417 million at December 31, 2017 and $764 million at the end of the second quarter of fiscal 2017. The sequential change in cash
and cash equivalents is primarily due to payments for the acquisition of Spoken Communications, term loan payments to lenders and
pension payments.
1 The results for the period from October 1, 2017 through December 31, 2017, or March 31, 2018, as applicable,
represent the sum of the reported amounts for the Predecessor period from October 1, 2017 through December 15, 2017 and the
Successor period from December 16, 2017 through December 31, 2017 or March 31, 2018, as applicable (each, a “Successor” period).
Refer to Supplemental Financial Information accompanying this press release for more information, including a reconciliation of
combined results to our Predecessor and Successor results.
2 Non-GAAP revenue, Non-GAAP gross margin, Non-GAAP operating income and Adjusted EBITDA are not measures
calculated in accordance with generally accepted accounting principles in the U.S. (“GAAP”). Refer to Supplemental Financial
Information accompanying this press release for more information, including a reconciliation of these measures to the most closely
comparable measure calculated in accordance with GAAP.
Second Quarter Fiscal 2018 Highlights
- Added over 1,200 new logos worldwide.
- Midmarket/SMB cloud revenue seats grew 53% quarter-over-quarter.
- Continued strength in our business model as a software & services company:
- Software and services accounted for a record 83% of non-GAAP revenue, up year-over-year from
79%;
- Recurring revenue represented a record 58% of non-GAAP revenue, up year-over-year from 56%;
and
- 108 deals over $1 million of Total Contract Value (TCV), up 44% year-over-year.
- Closed the acquisition of Spoken Communications, a leading innovator in Contact Center as a Service
(CCaaS) solutions. The Spoken platform provides a secure and scalable, multitenant cloud platform for customers of all sizes, and
its intellectual property will accelerate our move into Machine Learning and AI.
- Alorica, one of the world’s largest BPOs, will transition all of its global contact center operations
to the Avaya cloud. A complete Avaya contact center cloud solution (CCaaS) will support 100,000 agents, hundreds
of client companies, and millions of their end customers around the world.
- Launched Cloud Master Agent program focused on accelerating sales of Avaya Cloud to small and
midmarket businesses. Jenne and leading cloud distributor Intelisys have signed as Master Agents, and we already have early
customer sales.
- Unveiled Avaya Mobile Experience. This category-breaking technology detects 800 calls from mobile
numbers, and then accesses contextual information about the caller for a more personalized customer service experience.
Organizations can reply to a phone call with a text, for example, which can reduce costs while enhancing the customer
experience.
- Signed a strategic alliance including joint development to incorporate Afiniti International
Holding’s AI and analytics into the industry-leading Avaya contact center platform. Afiniti Behavioral Pairing efficiently
matches customers with the most appropriate agent based on predicted interpersonal behavior, for a better customer
experience.
- Eletropaulo, the largest electricity distribution company in Latin America, has signed a five-year
contract as part of the company’s digital transformation plan, migrating its customer service platform to cloud-based Avaya
Oceana as a service in more than 800 locations.
- Avaya Customer Happiness Index on Blockchain named a gold medal winner in the
internationally-renowned Edison Awards™ for 2018.
- Avaya has received CRN’s prestigious 2018 5-Star Partner Program rating for ninth consecutive
year.
Third Quarter Fiscal 2018 Outlook
- Revenue of $690-$705 million, non-GAAP revenue of $750-$770 million
- GAAP operating loss of 8-8.5% of revenue, non-GAAP operating profit of 20-21% of non-GAAP
revenue
- GAAP operating loss of $55-60 million, non-GAAP operating income $150-$160 million
- Cash taxes of approximately $9 million
- GAAP net loss $0.89-$0.97 per diluted share
- Adjusted EBITDA of $170-$190 million or adjusted EBITDA margin of approximately 23-25% of non-GAAP
revenue, includes impact of Spoken acquisition
- Approximately 111 million shares outstanding
Avaya’s outlook does not include the potential impact of any business combinations, asset acquisitions, divestitures, strategic
investments, or other significant transactions that may be completed after May 10, 2018. Actual results may differ materially
from Avaya’s outlook as a result of, among other things, the factors described under “Forward-Looking Statements” below.
Conference Call and Webcast
Avaya will host a webcast and conference call to discuss its financial results and Q&A at 8:30 AM ET/5:30 AM PT on May 10,
2018. On the call will be Jim Chirico, President and CEO, and Pat O’Malley, Senior Vice President and CFO. The call will be
moderated by Peter Schuman, Senior Director of Investor Relations.
To join the financial results live webcast and view supplementary materials including earnings presentation and CFO commentary,
listeners should access the investor page of Avaya’s website https://investors.avaya.com. Following the live webcast, a replay will be available at the same web address in
the event archives for a period of one year.
To access the financial results live by phone, dial +1-866-393-4306 in the U.S. or Canada and +1-734-385-2616 for international
callers. Listeners should access the webcast or the call 10-15 minutes before the start time to ensure they are able to
connect.
A replay of the financial results live conference call will be available for 2 business days soon after the call by phone by
dialing +1-855-859-2056 in the U.S. or Canada and +1-404-537-3406 for international callers, using the conference access code:
4728797.
Links to this financial results press release and accompanying slides are available on the investor page of Avaya’s website
https://investors.avaya.com.
About Avaya
Avaya is a global leader in digital communications software, services and devices for businesses of all sizes. Our
open, intelligent and customizable solutions for contact centers and unified communications offer the flexibility of Cloud,
on-premises and hybrid deployments. Avaya shapes intelligent connections and creates seamless communication experiences for our
customers, and their customers. Our professional planning, support and management services teams help optimize solutions, for
highly reliable and efficient deployments. Avaya Holdings Corp. is traded on the NYSE under the ticker AVYA. For more information,
please visit www.avaya.com.
Cautionary Note Regarding Forward-Looking Statements
This document contains certain “forward-looking statements.” All statements other than statements of historical fact are
“forward-looking” statements for purposes of the U.S. federal and state securities laws. These statements may be identified by the
use of forward looking terminology such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may,"
"might," "our vision," "plan," "potential," "preliminary," "predict," "should," "will," or "would" or the negative thereof or other
variations thereof or comparable terminology and include, but are not limited to, the outlook for the third quarter of fiscal 2018.
The company has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While
the company believes 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 its control. These factors are
discussed in Amendment No. 3 to the company’s Registration Statement on Form 10 filed with the Securities and Exchange Commission
(the “SEC”), and may cause its 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 . The company cautions 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. The
company undertakes 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.
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Avaya Holdings Corp. |
Consolidated Statements of Operations |
(Unaudited; in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor |
|
Predecessor |
|
Successor |
|
Predecessor |
|
|
|
|
|
Three months
ended
March 31,
2018
|
|
Three months
ended
March 31,
2017
|
|
Period from
December 16, 2017
through
March 31, 2018
|
|
Period from
October 1, 2017
through
December 15, 2017
|
|
Six months
ended
March 31,
2017
|
|
REVENUE |
|
|
|
|
|
|
|
|
|
|
|
|
Products |
|
$ |
293 |
|
|
$ |
348 |
|
|
$ |
364 |
|
|
$ |
253 |
|
|
$ |
749 |
|
|
|
Services |
|
|
379 |
|
|
|
456 |
|
|
|
456 |
|
|
|
351 |
|
|
|
930 |
|
|
|
|
|
|
|
672 |
|
|
|
804 |
|
|
|
820 |
|
|
|
604 |
|
|
|
1,679 |
|
|
COSTS |
|
|
|
|
|
|
|
|
|
|
|
|
Products: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs |
|
|
110 |
|
|
|
125 |
|
|
|
143 |
|
|
|
84 |
|
|
|
270 |
|
|
|
|
Amortization of technology intangible assets |
|
41 |
|
|
|
6 |
|
|
|
48 |
|
|
|
3 |
|
|
|
11 |
|
|
|
Services |
|
|
198 |
|
|
|
189 |
|
|
|
228 |
|
|
|
155 |
|
|
|
379 |
|
|
|
|
|
|
|
349 |
|
|
|
320 |
|
|
|
419 |
|
|
|
242 |
|
|
|
660 |
|
|
GROSS PROFIT |
|
|
323 |
|
|
|
484 |
|
|
|
401 |
|
|
|
362 |
|
|
|
1,019 |
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
282 |
|
|
|
292 |
|
|
|
332 |
|
|
|
264 |
|
|
|
628 |
|
|
|
Research and development |
|
|
50 |
|
|
|
57 |
|
|
|
59 |
|
|
|
38 |
|
|
|
119 |
|
|
|
Amortization of intangible assets |
|
|
40 |
|
|
|
56 |
|
|
|
47 |
|
|
|
10 |
|
|
|
113 |
|
|
|
Restructuring charges, net |
|
|
40 |
|
|
|
4 |
|
|
|
50 |
|
|
|
14 |
|
|
|
14 |
|
|
|
|
|
|
|
412 |
|
|
|
409 |
|
|
|
488 |
|
|
|
326 |
|
|
|
874 |
|
|
OPERATING (LOSS) INCOME |
|
|
(89 |
) |
|
|
75 |
|
|
|
(87 |
) |
|
|
36 |
|
|
|
145 |
|
|
Interest expense |
|
|
(47 |
) |
|
|
(38 |
) |
|
|
(56 |
) |
|
|
(14 |
) |
|
|
(212 |
) |
|
Other expense, net |
|
|
(3 |
) |
|
|
(22 |
) |
|
|
(5 |
) |
|
|
(2 |
) |
|
|
(18 |
) |
|
Reorganization costs, net |
|
|
- |
|
|
|
(42 |
) |
|
|
- |
|
|
|
3,416 |
|
|
|
(42 |
) |
|
(LOSS) INCOME BEFORE INCOME TAXES |
|
|
(139 |
) |
|
|
(27 |
) |
|
|
(148 |
) |
|
|
3,436 |
|
|
|
(127 |
) |
|
Benefit from (provision for) income taxes |
|
|
9 |
|
|
|
19 |
|
|
|
255 |
|
|
|
(459 |
) |
|
|
16 |
|
|
NET (LOSS) INCOME |
|
$ |
(130 |
) |
|
$ |
(8 |
) |
|
$ |
107 |
|
|
$ |
2,977 |
|
|
$ |
(111 |
) |
|
Net (loss) income per share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(1.18 |
) |
|
$ |
(0.03 |
) |
|
$ |
0.97 |
|
|
$ |
5.19 |
|
|
$ |
(0.25 |
) |
|
Diluted |
|
$ |
(1.18 |
) |
|
$ |
(0.03 |
) |
|
$ |
0.96 |
|
|
$ |
5.19 |
|
|
$ |
(0.25 |
) |
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
109.8 |
|
|
|
497.1 |
|
|
|
109.8 |
|
|
|
497.3 |
|
|
|
497.0 |
|
|
Diluted |
|
|
109.8 |
|
|
|
497.1 |
|
|
|
110.8 |
|
|
|
497.3 |
|
|
|
497.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Avaya Holdings Corp. |
Consolidated Balance Sheets |
(Unaudited; in millions, except share amounts) |
|
|
|
|
Successor |
|
Predecessor |
|
|
|
March 31,
2018
|
|
September 30,
2017
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
311 |
|
|
$ |
876 |
|
|
Accounts receivable, net |
|
|
366 |
|
|
|
536 |
|
|
Inventory |
|
|
106 |
|
|
|
96 |
|
|
Other current assets |
|
|
269 |
|
|
|
269 |
|
TOTAL CURRENT ASSETS |
|
|
1,052 |
|
|
|
1,777 |
|
|
Property, plant and equipment, net |
|
|
281 |
|
|
|
200 |
|
|
Deferred income taxes, net |
|
|
31 |
|
|
|
- |
|
|
Intangible assets, net |
|
|
3,404 |
|
|
|
311 |
|
|
Goodwill |
|
|
2,780 |
|
|
|
3,542 |
|
|
Other assets |
|
|
58 |
|
|
|
68 |
|
TOTAL ASSETS |
|
$ |
7,606 |
|
|
$ |
5,898 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
Current liabilities: |
|
|
|
|
|
Debt maturing within one year |
|
$ |
- |
|
|
$ |
725 |
|
|
Long-term debt, current portion |
|
|
29 |
|
|
|
- |
|
|
Accounts payable |
|
|
331 |
|
|
|
282 |
|
|
Payroll and benefit obligations |
|
|
139 |
|
|
|
127 |
|
|
Deferred revenue |
|
|
412 |
|
|
|
614 |
|
|
Business restructuring reserve, current portion |
|
|
43 |
|
|
|
35 |
|
|
Other current liabilities |
|
|
127 |
|
|
|
90 |
|
TOTAL CURRENT LIABILITIES |
|
|
1,081 |
|
|
|
1,873 |
|
|
Long-term debt |
|
|
2,860 |
|
|
|
- |
|
|
Pension obligations |
|
|
780 |
|
|
|
513 |
|
|
Other postretirement obligations |
|
|
216 |
|
|
|
- |
|
|
Deferred income taxes, net |
|
|
465 |
|
|
|
32 |
|
|
Business restructuring reserve, non-current portion |
|
|
54 |
|
|
|
34 |
|
|
Other liabilities |
|
|
394 |
|
|
|
170 |
|
TOTAL NON-CURRENT LIABILITIES |
|
|
4,769 |
|
|
|
749 |
|
LIABILITIES SUBJECT TO COMPROMISE |
|
|
- |
|
|
|
7,705 |
|
TOTAL LIABILITIES |
|
|
5,850 |
|
|
|
10,327 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
Predecessor equity awards on redeemable shares |
|
|
- |
|
|
|
7 |
|
Predecessor preferred stock, $0.001 par value, 250,000 shares authorized
at September 30, 2017 |
|
|
|
|
Convertible Series B preferred stock; 48,922 shares issued and
outstanding at September 30, 2017 |
|
|
- |
|
|
|
393 |
|
Series A preferred stock; 125,000 shares issued and outstanding at
September 30, 2017 |
|
|
- |
|
|
|
184 |
|
Successor preferred stock, $0.01 par value; 55,000,000 authorized, no
shares issued or outstanding at March 31, 2018 |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY (DEFICIT) |
|
|
|
|
Predecessor common stock, $0.01 par value; 750,000,000 shares authorized,
494,768,243 issued and outstanding at September 30, 2017 |
|
|
- |
|
|
|
- |
|
Successor common stock, $0.01 par value; 550,000,000 shares authorized,
110,000,000 issued and 109,794,137 outstanding at March 31, 2018 |
|
|
1 |
|
|
|
- |
|
Additional paid-in capital |
|
|
1,673 |
|
|
|
2,389 |
|
Retained earnings (Accumulated deficit) |
|
|
107 |
|
|
|
(5,954 |
) |
Accumulated other comprehensive loss |
|
|
(25 |
) |
|
|
(1,448 |
) |
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) |
|
|
1,756 |
|
|
|
(5,013 |
) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |
|
$ |
7,606 |
|
|
$ |
5,898 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Avaya Holdings Corp. |
Condensed Statements of Cash Flows |
(Unaudited; in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor |
|
Predecessor |
|
Non-GAAP Combined |
|
Predecessor |
|
|
|
Period from
December 16, 2017
through
March 31, 2018
|
|
Period from
October 1,
2017 through
December 15,
2017
|
|
Six months
ended
March 31,
2018
|
|
Six months
ended
March 31,
2017
|
Net cash provided by (used for): |
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$ |
107 |
|
|
$ |
2,977 |
|
|
$ |
3,084 |
|
|
$ |
(111 |
) |
Adjustments to net income (loss) for non-cash items |
|
|
(79 |
) |
|
|
(3,410 |
) |
|
|
(3,489 |
) |
|
|
274 |
|
Changes in operating assets and liabilities |
|
|
66 |
|
|
|
19 |
|
|
|
85 |
|
|
|
(110 |
) |
Operating activities |
|
|
94 |
|
|
|
(414 |
) |
|
|
(320 |
) |
|
|
53 |
|
Investing activities |
|
|
(147 |
) |
|
|
8 |
|
|
|
(139 |
) |
|
|
(109 |
) |
Financing activities |
|
|
(11 |
) |
|
|
(102 |
) |
|
|
(113 |
) |
|
|
492 |
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
9 |
|
|
|
(2 |
) |
|
|
7 |
|
|
|
(8 |
) |
Net (decrease) increase in cash and cash equivalents |
|
|
(55 |
) |
|
|
(510 |
) |
|
|
(565 |
) |
|
|
428 |
|
Cash and cash equivalents at beginning of period |
|
|
366 |
|
|
|
876 |
|
|
|
876 |
|
|
|
336 |
|
Cash and cash equivalents at end of period |
|
$ |
311 |
|
|
$ |
366 |
|
|
$ |
311 |
|
|
$ |
764 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Avaya Holdings Corp. |
Supplemental Schedules of Non-GAAP Revenue |
(Unaudited; in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor |
|
Predecessor |
|
|
|
|
|
|
|
Successor |
|
Predecessor |
|
|
|
|
|
Predecessor |
|
|
|
Three Months Ended |
|
Three months
|
|
Change |
|
Period from |
|
Period from |
|
|
|
Q118 |
|
|
|
|
|
|
|
|
|
Adj. for
|
|
Non-GAAP |
|
ended
|
|
|
|
|
|
Pct., net
|
|
Dec. 16, 2017
|
|
Oct. 1, 2017 |
|
Adj. for |
|
Non-GAAP |
|
Three Months Ended |
|
|
|
March 31, |
|
Fresh Start |
|
March 31, |
|
March 31, |
|
|
|
|
|
of FX |
|
through |
|
through |
|
Fresh Start |
|
Combined |
|
Sept. 30, |
|
June 30, |
|
|
|
2018 |
|
Accounting |
|
2018 |
|
2017 |
|
Amount |
|
Pct. |
|
impact |
|
Dec. 31, 2017 |
|
Dec. 15, 2017 |
|
Accounting |
|
Results |
|
2017 |
|
2017 |
Revenue by Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total ECS product revenue |
|
$ |
317 |
|
|
$ |
- |
|
$317 |
|
$ |
348 |
|
$ |
(31 |
) |
|
-9 |
% |
|
-11 |
% |
|
$ |
77 |
|
|
$ |
253 |
|
$ |
- |
|
$ |
330 |
|
$ |
343 |
|
$ |
345 |
AGS |
|
|
440 |
|
|
|
- |
|
440 |
|
|
456 |
|
|
(16 |
) |
|
-4 |
% |
|
-5 |
% |
|
|
94 |
|
|
|
351 |
|
|
- |
|
|
445 |
|
|
447 |
|
|
458 |
Unallocated amounts |
|
|
(85 |
) |
|
|
85 |
|
- |
|
|
- |
|
|
- |
|
|
n/a |
|
|
n/a |
|
|
|
(23 |
) |
|
|
- |
|
|
23 |
|
|
- |
|
|
- |
|
|
- |
Total revenue |
|
$ |
672 |
|
|
$ |
85 |
|
$757 |
|
$ |
804 |
|
$ |
(47 |
) |
|
-6 |
% |
|
-18 |
% |
|
$ |
148 |
|
|
$ |
604 |
|
$ |
23 |
|
$ |
775 |
|
$ |
790 |
|
$ |
803 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by Geography
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
|
|
$ |
333 |
|
|
$ |
76 |
|
$409 |
|
$ |
450 |
|
$ |
(41 |
) |
|
-9 |
% |
|
-9 |
% |
|
$ |
71 |
|
|
$ |
331 |
|
$ |
23 |
|
$ |
425 |
|
$ |
447 |
|
$ |
435 |
International: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA |
|
|
191 |
|
|
|
6 |
|
197 |
|
|
202 |
|
|
(5 |
) |
|
-2 |
% |
|
-8 |
% |
|
|
42 |
|
|
|
166 |
|
|
- |
|
|
208 |
|
|
194 |
|
|
204 |
APAC - Asia Pacific |
|
|
80 |
|
|
|
3 |
|
83 |
|
|
77 |
|
|
6 |
|
|
8 |
% |
|
5 |
% |
|
|
19 |
|
|
|
57 |
|
|
- |
|
|
76 |
|
|
79 |
|
|
88 |
Americas International - Canada and Latin America
|
|
|
68 |
|
|
|
- |
|
68 |
|
|
75 |
|
|
(7 |
) |
|
-9 |
% |
|
-11 |
% |
|
|
16 |
|
|
|
50 |
|
|
- |
|
|
66 |
|
|
70 |
|
|
76 |
Total International |
|
|
339 |
|
|
|
9 |
|
348 |
|
|
354 |
|
|
(6 |
) |
|
-2 |
% |
|
-6 |
% |
|
|
77 |
|
|
|
273 |
|
|
- |
|
|
350 |
|
|
343 |
|
|
368 |
Total revenue |
|
$ |
672 |
|
|
$ |
85 |
|
$757 |
|
$ |
804 |
|
$ |
(47 |
) |
|
-6 |
% |
|
-8 |
% |
|
$ |
148 |
|
|
$ |
604 |
|
$ |
23 |
|
$ |
775 |
|
$ |
790 |
|
$ |
803 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revision of Prior Period Amounts
During the second quarter of fiscal 2018 ended March 31, 2018, the company identified and corrected a cut-off error as of
December 15, 2017, the date the company emerged from Chapter 11 proceedings, related to an understatement of cash and a
corresponding overstatement of accounts receivable of $26 million. These accounts were correctly reported as of December 31, 2017.
Because of the application of fresh start accounting as of December 15, 2017, Stockholder’s Equity and Goodwill were also each
understated by the same amount but not corrected as of December 31, 2017. The company determined that these errors were not
material and corrected the errors in the applicable period of the consolidated financial statements included elsewhere in this
release and will correct them in the March 31, 2018 Form 10-Q.
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 of America (“GAAP”), including the combined three
month period ending December 31, 2017, combined six month period ending March 31, 2018 and financial measures labeled as “non-GAAP”
or “adjusted.”
Although GAAP requires that we report on our results for the periods October 1, 2017 through December 15, 2017 and December 16,
2017 through December 31, 2017 or March 31, 2018 as applicable, separately, management reviews the company’s operating results for
the three and six months ended December 31, 2017 and March 31, 2018 by combining the results of these two periods because such
presentation provides the most meaningful comparison of our results. The company cannot adequately benchmark the operating results
of the 16-day period ended December 31, 2017 against any of the previous periods reported in its condensed consolidated financial
statements and does not believe that reviewing the results of this period in isolation would be useful in identifying any trends
regarding the company’s overall performance. Management believes that the key performance metrics such as revenue, gross margin and
operating income when combined for the three and six months ended December 31, 2017 and March 31, 2018, respectively, provide
meaningful comparisons to other periods and are useful in identifying current business trends.
We also present the measures non-GAAP revenue, non-GAAP gross margin and non-GAAP operating income, as a supplement to our
unaudited condensed consolidated financial statements presented in accordance with GAAP. We believe these non-GAAP measures are the
most meaningful for comparisons to prior periods because they exclude the impact of the earnings and charges noted in the
applicable tables below that resulted from matters that we consider not to be indicative of our ongoing operations. The
presentation of these non-GAAP financial measures is not intended to be considered in isolation from, as substitute for, or
superior to, the financial information prepared and presented in accordance with GAAP, and may be different from the non-GAAP
financial measures used by other companies. In addition, these non-GAAP measures have limitations in that they do not reflect all
of the amounts associated with the company’s results of operations as determined in accordance with GAAP.
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 described in our SEC filings and the
tables below.
We believe that including supplementary information concerning adjusted EBITDA is appropriate because it serves as a basis for
determining management and employee 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. We also present EBITDA and
Adjusted EBITDA because we believe analysts and investors utilize these measures in analyzing our results. Accordingly, adjusted
EBITDA measures our financial performance based on operational factors that management can impact in the short-term, such as our
pricing strategies, volume, costs and expenses of the organization and it presents our financial performance in a way that can be
more easily compared to prior quarters or fiscal years.
EBITDA and adjusted EBITDA have limitations as analytical tools. EBITDA measures do not represent net income (loss) or cash flow
from operations as those terms are defined by GAAP and do not necessarily indicate whether cash flows will be sufficient to fund
cash needs. While EBITDA 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 excludes the impact of earnings or charges resulting from matters
that we consider not to be indicative of our ongoing operations. In particular, our formulation of adjusted EBITDA allows
adjustment for certain amounts that are included in calculating net income (loss), however, these are expenses that may recur, may
vary and are difficult to predict.
We do not provide a forward-looking reconciliation of expected third quarter of fiscal 2018 Adjusted EBITDA, Non-GAAP operating
income or Non-GAAP revenue guidance as the amount of significance of special items required to develop meaningful comparable GAAP
financial measures cannot be estimated at this time without unreasonable efforts. These special items could be meaningful.
The following tables present Successor, Predecessor and combined results and reconcile historical GAAP measures to non-GAAP
measures.
|
|
|
|
|
|
|
|
|
|
|
Avaya Holdings Corp. |
Supplemental Schedule of Non-GAAP Adjusted EBITDA |
(Unaudited; in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor |
|
Predecessor |
|
Successor |
|
Predecessor |
|
Predecessor |
|
|
|
Three
months
ended
March 31,
2018
|
|
Three
months
ended
March 31,
2017
|
|
Period from
December 16,
2017 through
March 31,
2018
|
|
Period from
October 1,
2017 through
December 15,
2017
|
|
Six months
ended
March 31,
2017
|
Net (loss) income |
|
$ |
(130 |
) |
|
$ |
(8 |
) |
|
$ |
107 |
|
|
$ |
2,977 |
|
|
$ |
(111 |
) |
|
Interest expense |
|
|
47 |
|
|
|
38 |
|
|
|
56 |
|
|
|
14 |
|
|
|
212 |
|
|
Interest income |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(1 |
) |
|
(Benefit from) provision for income taxes |
|
|
(9 |
) |
|
|
(19 |
) |
|
|
(255 |
) |
|
|
459 |
|
|
|
(16 |
) |
|
Depreciation and amortization |
|
|
123 |
|
|
|
88 |
|
|
|
145 |
|
|
|
31 |
|
|
|
178 |
|
EBITDA |
|
|
30 |
|
|
|
98 |
|
|
|
52 |
|
|
|
3,479 |
|
|
|
262 |
|
|
Impact of fresh start accounting adjustments |
|
|
86 |
|
|
|
- |
|
|
|
113 |
|
|
|
- |
|
|
|
- |
|
|
Restructuring charges, net |
|
|
40 |
|
|
|
4 |
|
|
|
50 |
|
|
|
14 |
|
|
|
14 |
|
|
Advisory fees |
|
|
4 |
|
|
|
14 |
|
|
|
12 |
|
|
|
3 |
|
|
|
65 |
|
|
Acquisition-related costs |
|
|
7 |
|
|
|
- |
|
|
|
7 |
|
|
|
- |
|
|
|
- |
|
|
Reorganization items, net |
|
|
- |
|
|
|
42 |
|
|
|
- |
|
|
|
(3,416 |
) |
|
|
42 |
|
|
Share-based and other compensation |
|
|
5 |
|
|
|
4 |
|
|
|
6 |
|
|
|
- |
|
|
|
6 |
|
|
Loss on disposal of long-lived assets |
|
|
2 |
|
|
|
- |
|
|
|
2 |
|
|
|
1 |
|
|
|
- |
|
|
Costs in connection with certain legal matters |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
37 |
|
|
|
- |
|
|
Change in fair value of warrant liability |
|
|
10 |
|
|
|
- |
|
|
|
15 |
|
|
|
- |
|
|
|
- |
|
|
Foreign currency gains, net |
|
|
3 |
|
|
|
12 |
|
|
|
1 |
|
|
|
- |
|
|
|
1 |
|
|
Pension/OPEB/nonretirement postemployment benefits and long-term disability
costs |
|
|
- |
|
|
|
25 |
|
|
|
- |
|
|
|
17 |
|
|
|
46 |
|
|
Other |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1 |
|
Adjusted EBITDA |
|
$ |
187 |
|
|
$ |
199 |
|
|
$ |
258 |
|
|
$ |
135 |
|
|
$ |
437 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Avaya Holdings Corp. |
Supplemental Schedules of Non-GAAP Reconciliations |
(Unaudited; in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor |
|
Successor |
|
Predecessor |
|
|
|
Predecessor |
|
|
|
|
Three Months |
|
Period from |
|
Period from |
|
Q118 |
|
|
|
|
|
|
|
|
|
|
Ended |
|
Dec. 16, 2017 |
|
Oct. 1, 2017 |
|
Non-GAAP |
|
Three Months Ended |
|
|
|
|
March 31, |
|
through |
|
through |
|
Combined |
|
Sept. 30 |
|
June 30 |
|
Mar. 31 |
|
|
|
|
2018 |
|
Dec. 31, 2017 |
|
Dec. 15, 2017 |
|
Results |
|
2017 |
|
2017 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Gross Profit
and Non-GAAP Gross Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
$ |
323 |
|
|
$ |
78 |
|
|
$ |
362 |
|
|
$ |
440 |
|
|
$ |
496 |
|
|
$ |
493 |
|
|
$ |
484 |
|
|
Gross Margin |
|
|
48.1 |
% |
|
|
52.7 |
% |
|
|
59.9 |
% |
|
|
58.5 |
% |
|
|
62.8 |
% |
|
|
61.4 |
% |
|
|
60.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items excluded: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adj. for fresh start accounting |
|
|
106 |
|
|
|
|
|
|
|
29 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
Amortization of technology intangible assets |
|
|
41 |
|
|
|
|
|
|
|
10 |
|
|
|
4 |
|
|
|
5 |
|
|
|
6 |
|
|
|
Loss on disposal of long-lived assets |
|
|
2 |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Non-GAAP Gross Profit |
|
$ |
472 |
|
|
|
|
|
|
$ |
479 |
|
|
$ |
500 |
|
|
$ |
498 |
|
|
$ |
490 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Gross Margin |
|
|
62.4 |
% |
|
|
|
|
|
|
61.8 |
% |
|
|
63.3 |
% |
|
|
62.0 |
% |
|
|
60.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Operating Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (Loss) Income |
|
$ |
(89 |
) |
|
$ |
2 |
|
|
$ |
36 |
|
|
$ |
38 |
|
|
$ |
69 |
|
|
$ |
(43 |
) |
|
$ |
75 |
|
|
|
Percentage of Revenue |
|
|
-13.2 |
% |
|
|
1.4 |
% |
|
|
6.0 |
% |
|
|
5.1 |
% |
|
|
8.7 |
% |
|
|
-5.4 |
% |
|
|
9.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items excluded: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adj. for fresh start accounting |
|
|
107 |
|
|
|
|
|
|
|
33 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
Amortization of intangible assets |
|
|
81 |
|
|
|
|
|
|
|
27 |
|
|
|
38 |
|
|
|
62 |
|
|
|
62 |
|
|
|
Restructuring charges, net |
|
|
40 |
|
|
|
|
|
|
|
24 |
|
|
|
8 |
|
|
|
8 |
|
|
|
4 |
|
|
|
Acquisition-related costs |
|
|
7 |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
Loss on disposal of long-lived assets |
|
|
2 |
|
|
|
|
|
|
|
1 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
Impairment charges |
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
120 |
|
|
|
- |
|
|
|
Advisory fees |
|
|
4 |
|
|
|
|
|
|
|
11 |
|
|
|
3 |
|
|
|
18 |
|
|
|
14 |
|
|
|
Share-based compensation |
|
|
5 |
|
|
|
|
|
|
|
1 |
|
|
|
1 |
|
|
|
4 |
|
|
|
4 |
|
|
|
Costs in connection with certain legal matters |
|
|
- |
|
|
|
|
|
|
|
37 |
|
|
|
64 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Operating Income |
|
$ |
157 |
|
|
|
|
|
|
$ |
172 |
|
|
$ |
183 |
|
|
$ |
169 |
|
|
$ |
159 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Operating Margin |
|
|
20.7 |
% |
|
|
|
|
|
|
22.2 |
% |
|
|
23.2 |
% |
|
|
21.0 |
% |
|
|
19.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Avaya Holdings Corp. |
Supplemental Schedules of Non-GAAP Reconciliation of Gross Profit and
Gross Margin by Portfolio |
(Unaudited; in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor |
|
Successor |
|
Predecessor |
|
|
|
Predecessor |
|
|
|
|
Three Months |
|
Period from |
|
Period from |
|
Q118 |
|
|
|
|
|
|
|
|
|
|
Ended |
|
Dec. 16, 2017 |
|
Oct. 1, 2017 |
|
Non-GAAP |
|
Three Months Ended |
|
|
|
|
March 31, |
|
through |
|
through |
|
Combined |
|
Sept. 30, |
|
June 30, |
|
Mar. 31, |
|
|
|
|
2018 |
|
Dec. 31, 2017 |
|
Dec. 15, 2017 |
|
Results |
|
2017 |
|
2017 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Gross Profit
and Non-GAAP Gross Margin - Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
293 |
|
|
$ |
71 |
|
|
$ |
253 |
|
|
$ |
324 |
|
|
$ |
343 |
|
|
$ |
345 |
|
|
$ |
348 |
|
|
|
Costs |
|
|
110 |
|
|
|
33 |
|
|
|
84 |
|
|
|
117 |
|
|
|
104 |
|
|
|
121 |
|
|
|
125 |
|
|
|
Amortization of technology intangible assets |
|
|
41 |
|
|
|
7 |
|
|
|
3 |
|
|
|
10 |
|
|
|
4 |
|
|
|
5 |
|
|
|
6 |
|
|
GAAP Gross Profit |
|
|
142 |
|
|
|
31 |
|
|
|
166 |
|
|
|
197 |
|
|
|
235 |
|
|
|
219 |
|
|
|
217 |
|
|
GAAP Gross Margin |
|
|
48.5 |
% |
|
|
43.7 |
% |
|
|
65.6 |
% |
|
|
60.8 |
% |
|
|
68.5 |
% |
|
|
63.5 |
% |
|
|
62.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items excluded: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adj. for fresh start accounting |
|
|
32 |
|
|
|
|
|
|
|
7 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
Amortization of technology intangible assets |
|
|
41 |
|
|
|
|
|
|
|
10 |
|
|
|
4 |
|
|
|
5 |
|
|
|
6 |
|
|
|
Loss on disposal of long-lived assets |
|
|
1 |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Non-GAAP Gross Profit |
|
$ |
216 |
|
|
|
|
|
|
$ |
214 |
|
|
$ |
239 |
|
|
$ |
224 |
|
|
$ |
223 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Gross Margin |
|
|
68.1 |
% |
|
|
|
|
|
|
64.8 |
% |
|
|
69.7 |
% |
|
|
64.9 |
% |
|
|
64.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Gross Profit
and Non-GAAP Gross Margin - Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
379 |
|
|
$ |
77 |
|
|
$ |
351 |
|
|
$ |
428 |
|
|
$ |
447 |
|
|
$ |
458 |
|
|
$ |
456 |
|
|
|
Costs |
|
|
198 |
|
|
|
30 |
|
|
|
155 |
|
|
|
185 |
|
|
|
186 |
|
|
|
184 |
|
|
|
189 |
|
|
GAAP Gross Profit |
|
|
181 |
|
|
|
47 |
|
|
|
196 |
|
|
|
243 |
|
|
|
261 |
|
|
|
274 |
|
|
|
267 |
|
|
GAAP Gross Margin |
|
|
47.8 |
% |
|
|
61.0 |
% |
|
|
55.8 |
% |
|
|
56.8 |
% |
|
|
58.4 |
% |
|
|
59.8 |
% |
|
|
58.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items excluded: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adj. for fresh start accounting |
|
|
74 |
|
|
|
|
|
|
|
22 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
Loss on disposal of long-lived assets |
|
|
1 |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Non-GAAP Gross Profit |
|
$ |
256 |
|
|
|
|
|
|
$ |
265 |
|
|
$ |
261 |
|
|
$ |
274 |
|
|
$ |
267 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Gross Margin |
|
|
58.2 |
% |
|
|
|
|
|
|
59.6 |
% |
|
|
58.4 |
% |
|
|
59.8 |
% |
|
|
58.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Avaya Holdings Corp. |
Reconciliation of GAAP to Non-GAAP results |
Three months ended March 31, 2018 |
(Unaudited; in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adj. for
|
|
Amortization
|
|
|
|
|
|
Disposal of
|
|
Share-based
|
|
|
|
|
|
|
|
Q217 |
|
|
|
|
|
GAAP |
|
Fresh Start |
|
of Intangible |
|
Restructuring |
|
Acquisition |
|
Long-lived |
|
and Other |
|
Advisory |
|
Other |
|
Non-GAAP |
|
GAAP |
|
Non-GAAP |
|
|
|
|
|
Results |
|
Accounting |
|
Assets |
|
Charges, net |
|
Costs |
|
Assets |
|
Comp |
|
Fees |
|
Costs, net |
|
Results |
|
Results |
|
Results |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Products |
|
|
$ |
293 |
|
|
$ |
24 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
$ |
317 |
|
|
$ |
348 |
|
|
$ |
348 |
|
|
|
Services |
|
|
|
379 |
|
|
|
61 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
440 |
|
|
|
456 |
|
|
|
456 |
|
|
|
|
|
|
|
672 |
|
|
|
85 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
757 |
|
|
|
804 |
|
|
|
804 |
|
|
Costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Products: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs |
|
|
|
110 |
|
|
|
(8 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
101 |
|
|
|
125 |
|
|
|
125 |
|
|
|
Amortization of technology intangible assets |
|
|
41 |
|
|
|
- |
|
|
|
(41 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
6 |
|
|
|
- |
|
|
|
Services |
|
|
|
198 |
|
|
|
(13 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
184 |
|
|
|
189 |
|
|
|
189 |
|
|
|
|
|
|
|
349 |
|
|
|
(21 |
) |
|
|
(41 |
) |
|
|
- |
|
|
|
- |
|
|
|
(2 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
285 |
|
|
|
320 |
|
|
|
314 |
|
|
GROSS PROFIT |
|
|
|
323 |
|
|
|
106 |
|
|
|
41 |
|
|
|
- |
|
|
|
- |
|
|
|
2 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
472 |
|
|
|
484 |
|
|
|
490 |
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
|
282 |
|
|
|
(1 |
) |
|
|
- |
|
|
|
- |
|
|
|
(7 |
) |
|
|
- |
|
|
|
(5 |
) |
|
|
(4 |
) |
|
|
- |
|
|
265 |
|
|
|
292 |
|
|
|
274 |
|
|
|
Research and development |
|
|
|
50 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
50 |
|
|
|
57 |
|
|
|
57 |
|
|
|
Amortization of intangible assets |
|
|
|
40 |
|
|
|
- |
|
|
|
(40 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
56 |
|
|
|
- |
|
|
|
Restructuring charges, net |
|
|
|
40 |
|
|
|
- |
|
|
|
- |
|
|
|
(40 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
4 |
|
|
|
- |
|
|
|
|
|
|
|
412 |
|
|
|
(1 |
) |
|
|
(40 |
) |
|
|
(40 |
) |
|
|
(7 |
) |
|
|
- |
|
|
|
(5 |
) |
|
|
(4 |
) |
|
|
- |
|
|
315 |
|
|
|
409 |
|
|
|
331 |
|
|
OPERATING (LOSS) INCOME |
|
|
|
(89 |
) |
|
|
107 |
|
|
|
81 |
|
|
|
40 |
|
|
|
7 |
|
|
|
2 |
|
|
|
5 |
|
|
|
4 |
|
|
|
- |
|
|
157 |
|
|
|
75 |
|
|
|
159 |
|
|
|
Interest expense |
|
|
|
(47 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
(47 |
) |
|
|
(38 |
) |
|
|
(38 |
) |
|
|
Other (expense) income, net |
|
|
|
(3 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
12 |
|
|
9 |
|
|
|
(22 |
) |
|
|
(11 |
) |
|
|
Reorganization items, net |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
(42 |
) |
|
|
- |
|
|
(LOSS) INCOME BEFORE INCOME TAXES |
|
$ |
(139 |
) |
|
$ |
107 |
|
|
$ |
81 |
|
|
$ |
40 |
|
|
$ |
7 |
|
|
$ |
2 |
|
|
$ |
5 |
|
|
$ |
4 |
|
|
$ |
12 |
|
$ |
119 |
|
|
$ |
(27 |
) |
|
$ |
110 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source: Avaya Newsroom
Avaya Holdings Corp.
Media Inquiries:
Debbie Lewandowski, 630-245-2720
deblewan@avaya.com
or
Investor Inquiries:
Peter Schuman, 669-242-8098
pschuman@avaya.com
View source version on businesswire.com: https://www.businesswire.com/news/home/20180510005438/en/