Gruss E.
Avaya Reports Third Fiscal Quarter Net Income of $8 Million - Company Earns 2 Cents Per Diluted Share On A GAAP Basis - Cash Balance Increases For Fourth Straight Quarter To $843 Million - Net Debt* at Lowest Level Since Avaya's Inception
BASKING RIDGE, N.J., Jul 24, 2003 (Canada NewsWire via COMTEX) -- Avaya Inc.
(NYSE: AV), a leading global provider of communications networks and services
for businesses, today reported third fiscal quarter results in accordance with
generally accepted accounting principles (GAAP).
The company reported net income of $8 million and earnings per diluted share of
2 cents for the third fiscal quarter ended June 30, 2003. These results compare
to a net loss of $41 million or a loss of 11 cents per diluted share in the
second fiscal quarter of 2003.
Third fiscal quarter revenue of $1.072 billion was slightly below second fiscal
quarter revenue of $1.081 billion.
In the third fiscal quarter of 2002, Avaya reported a net loss of $39 million or
a loss of 11 cents per diluted share on revenue of $1.219 billion.
Avaya noted its cash balance increased for the fourth straight quarter to $843
million. Net debt- decreased to $150 million and is at the lowest level it has
been since the company became an independent business. Selling, General and
Administrative expenses declined $22 million sequentially from the second fiscal
quarter and $51 million from the same period last year.
CEO Comments
"The operational improvements we instituted across Avaya helped us achieve
positive earnings this quarter," said Don Peterson, chairman and CEO, Avaya. "In
the quarter, we saw revenue stabilizing and positive signs that IT spending is
strengthening. It is also clear that customers are no longer buying technology
for technology's sake. Customers want investments to drive new business models
that improve business performance and deliver bottom-line results. Our
combination of services and solutions makes us well-positioned to meet today's
customers' needs."
Year-To-Date Results
Revenue for the first nine months of fiscal 2003 was $3.220 billion compared to
revenue of $3.804 billion for the first nine months of fiscal 2002, a decline of
15.4 percent.
The company had a net loss of $154 million or a loss of 41 cents per diluted
share for the first nine months of fiscal 2003, compared to a net loss of $122
million or a loss of 81 cents per diluted share for the first nine months of
fiscal 2002.
Business Highlights
Since the end of the last quarter Avaya announced a number of key sales,
marketing agreements and new offers, including:
-- An agreement announced earlier today that Merrill Lynch will be
implementing Avaya IP telephony solutions at the company's
three-year-old corporate campus in Hopewell, New Jersey and at its new
regional headquarters in Tokyo, Japan. The new solutions provide
Merrill Lynch with greater flexibility and resiliency with a lower
total cost of ownership in supporting 7600 employees. Avaya Global
Services will implement the solution.
-- A joint marketing agreement announced just this week with HP to bring
IP solutions to small and mid-sized businesses. Avaya will combine its
IP Office Solution with HP's ProLiant servers to give smaller customers
fully integrated communications systems that make it easier to move to
IP telephony.
-- An agreement with IBM that allows both companies to jointly provide a
full complement of best-in-class voice services on multi-vendor
platforms to customers in the United States.
-- Building the largest IP telephony network for Seoul Auto Gallery,
Korea's largest auto complex. The wireless IP network will have nearly
5,000 telephone lines and 2,000 IP telephony users.
-- BA London Eye, London's top tourist attraction, with 3 million
visitors, will expand its Avaya Contact Center to support increased
sales and customer inquiries. It will use the contact center system to
capture customer information and improve service to the more than
350,000 customers who are expected to use the telephone service over
the next 12 months.
-- DIRECTV in Mexico has used its Avaya Contact Management solution to
improve customer service and increase its subscriber base in Mexico by
23 percent in one year. DIRECTV was able to integrate its call centers
to help it manage customer transactions, and deliver consistent and
integrated customer service.
-- Avaya Enterprise Connect Solutions, which extends the advanced features
and complete functionality of Avaya MultiVantage(TM) Communications
Applications -- including Internet Protocol telephony, contact center,
unified communication and messaging -- from a central location to any
size office or home in a distributed enterprise over a secure,
high-performance converged network.
-- Avaya Business Continuity Practice provides consulting services to help
companies assess risks and speed the recovery of networks and
communication applications in the event of a natural disaster or other
business disruption. The practice provides expertise and planning tools
to make converged voice and data networks more secure and reliable, for
smoother restoration of operations when unexpected challenges arise.
About Avaya
Avaya Inc. designs, builds and manages communications networks for more than 1
million businesses worldwide, including 90 percent of the FORTUNE 500(R).
Focused on businesses large to small, Avaya is a world leader in secure and
reliable Internet Protocol (IP) telephony systems and communications software
applications and services.
Driving the convergence of voice and data communications with business
applications -- and distinguished by comprehensive worldwide services -- Avaya
helps customers leverage existing and new networks to achieve superior business
results. For more information visit the Avaya website: www.avaya.com
This news release contains forward-looking statements regarding the company's
outlook for operating results and future cash needs based on current
expectations, forecasts and assumptions that involve risks and uncertainties
that could cause actual outcomes and results to differ materially. These risks
and uncertainties include, but are not limited to, general industry market
conditions and growth rates and general domestic and international economic
conditions including interest rate and currency exchange rate fluctuations and
the economic, political, and other risks associated with international sales and
operations, U.S. and foreign government regulation, price and product
competition, rapid technological development, dependence on new product
development, the successful introduction of new products, the mix of our
products and services, customer demand for our products and services, the
ability to successfully integrate acquired companies, control of costs and
expenses, the ability to implement in a timely manner our restructuring plans,
and the ability to form and implement alliances. For a further list and
description of such risks and uncertainties, see the reports filed by Avaya with
the Securities and Exchange Commission. Avaya disclaims any intention or
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
- Net Debt is defined as total debt less cash and cash equivalents.
Management uses this measure to evaluate its ability to fund the
company's indebtedness.
NOTE: Avaya will host a conference call with a listen-only Q&A session to
discuss these results at 5:00 p.m. EDT on Thursday, July 24, 2003. To ensure you
are on the call from the start, we suggest you access the call 10-15 minutes
early by dialing:
Within and outside the United States: 706-634-2454
For those unable to participate, there will be a playback available from 8:00
p.m. EDT, July 24, through July 31, 2003. For the replay, if you are calling
from within the United States, please dial 800-642-1687. If you are calling from
outside the United States, please dial 706-645-9291. The passcode for the replay
is 1340557.
WEBCAST Information: Avaya will webcast this conference call live, with a
listen-only Q&A session. To ensure that you are on the webcast, we suggest that
you access our website (www.avaya.com/investors/) 10-15 minutes prior to
the start. Slides accompanying the conference call are available at the same
location. Following the live webcast, a replay will be available on our archives
at the same web address.
