Mitel Releases Financial Results for Q2 2014
Mitel (News - Alert), a provider of cloud and software-based unified communications and collaborations solutions, has released financial results for its second fiscal quarter 2014, which wrapped up on October 31. Put simply, the company managed to make a profit during the quarter thanks in part to revenue growth, as well as what the company’s chief executive officer, Richard McBee, described as “solid expense control.”
"Sequential revenue growth and solid expense control enabled us to produce record gross margin of 58.2% for the second quarter," said McBee in a statement.
Overall revenue for the second quarter was $144.9 million with EBITDA (earnings before interest, taxes, depreciation and amortization) coming in at $24.8 million, or about 17 percent of revenue. Non-GAAP net income for the quarter was $12.7 million, while income in GAAP terms came in at $5.4 million.
"Our strong EBITDA and cash flow generation were the highlights of our second quarter performance. This enabled us, consistent with our strategy, to voluntarily pre-pay $20 million of our long-term debt in November 2013," said Steve Spooner (News - Alert), Mitel’s chief financial officer.
More important than numbers is the fact that Mitel’s cloud and contact center divisions continued to gain traction throughout the quarter, according to McBee — two key areas for the company. In fact, customer interest in Mitel’s cloud and contact center solutions helped offset the effects of the U.S. government shutdown.
Mitel’s performance during this quarter is worth taking note of as, shortly after the end of the period, the company entered into a definitive merger agreement with enterprise communications company Aastra Technologies. This strategic move will obviously have a profound effect on Mitel’s performance going forward, to say nothing of the fact that it has already turned Mitel into a billion dollar company with one of the largest footprints in the industry.
Unfortunately, Mitel’s projections for Q3 2014 are based on the company as a standalone entity, ignoring Aastra’s (News - Alert) projected financial performance for the same period, so it’s hard to gauge how the combined entity will perform going forward. Still, Mitel expects positive, if conservative, growth for its third quarter, with revenue in the range of $145 to $150 million.
Edited by Blaise McNamee