Avaya Says Financial Position Is Solid1:22 PM EST Thu. Nov. 15, 2012
Avaya on Thursday acknowledged that its financial standing has been a source of angst among partners, analysts and investors.
During a session at its Avaya Americas Partner Executive Forum in Cancun, Matt Booher, Avaya vice president of finance, corporate treasurer and investor relations officer, urged partners to understand a "unique period in our company."
For the quarter ended June 30, 2012, Avaya reported $1.25 billion in revenue, compared to about $1.37 billion in the prior-year quarter, and a $166 million loss, compared to a $152 million loss the previous year. Avaya also recently confirmed that it will lay off employees as part of a plan to remove $400 million in overall operating costs by the end of its fiscal 2015.
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But Booher said Avaya will be up in top-line revenue when it reports its September quarter, and that Avaya has been consistent despite a difficult economic environment and the integration challenges -- including the time spent consolidating employees -- following its $915 million acquisition of Nortel's former enterprise unit in 2009.
"We are just now getting to the point where we've gotten out of some of the heaviest restructuring," Booher said.
The idea that Avaya's in trouble -- that it doesn't have the cash or resources to support its growth -- is FUD (fear uncertainty and doubt), Booher said. Avaya has made several acquisitions -- including Aurix, Konftel, Persony, Sipera Systems and Radvision in the past two years -- and has also increased its R&D budget. Avaya's R&D as a percentage of product revenue, Booher said, is 17 percent ahead of the industry average of 14 percent.
"We are not cash-poor," Booher said. "We are managing through all the restructuring expenses we have and those will come close to an end in 2013."
Avaya's profitability for fiscal 2013 over fiscal 2012 will increase as a measure of EBITDA by 20 percent, he told partners, and actions that are already done that weren't yet annualized for 2012 will show up positively in Avaya's 2013 balance sheet.
"We're going to do our best in the face of economic headwinds," Booher added.
PUBLISHED NOV. 15, 2012