KANATA, Ontario--(BUSINESS WIRE)--May 20, 1999--MITEL(TSE:MLT.) (NYSE:MLT) (ME:MLT.) (LSE:MLT.L) Mitel Corporation today confirmed preliminary Fiscal 1999 financial results released on April 22, 1999 as audited and final, following a regularly scheduled Board meeting at which the Directors approved the Company's audited financial statements. The Company expects to file the annual report on Form 10-K with the Securities and Exchange Commission on or before the due date of June 24, 1999. Headquartered near Ottawa, the capital city of Canada, Mitel (NYSE: MLT; TSE: MLT) is a global designer, manufacturer and marketer of specialty semiconductor products and networked communications systems. Mitel Semiconductor is focused on providing connectivity components for communications and medical markets with a product range which includes components for both wired and wireless networks; microelectronics for voice and data convergence; optical communication devices for high-speed Internet systems; and application-specific integrated circuits (ASICs) for medical applications such as pacemakers and hearing aids. Mitel Communications Systems provides feature-rich enterprise communications systems; unified messaging and call-center applications; networked voice and data systems including remote teleworking solutions; CTI systems and applications and alternate network access products. Mitel Corporation (incorporated under the laws of Canada) CONSOLIDATED BALANCE SHEETS (in millions of Canadian dollars) March 26, March 27, 1999 1998 ------------------------------ ASSETS Current assets: Cash and cash equivalents $ 125.3 $ 117.2 Short-term investments - 34.5 Accounts receivable 326.3 302.3 Inventories 198.1 162.2 Prepaid expenses and other 27.4 27.3 ------------------------------ 677.1 643.5 Long-term receivables 35.4 27.9 Fixed assets 507.7 549.3 Acquired intangible assets 56.7 13.9 Patents, trademarks and other 23.4 17.4 ------------------------------ $ 1,300.3 $ 1,252.0 ------------------------------ ------------------------------ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 254.1 $ 290.7 Income and other taxes payable 11.8 33.9 Deferred revenue 36.6 32.7 Current portion of long-term debt 37.6 40.3 ------------------------------ 340.1 397.6 Long-term debt 276.5 379.6 Pension liability 13.2 12.2 Deferred income taxes 23.2 27.1 ------------------------------ 653.0 816.5 ------------------------------ Shareholders' equity: Capital stock Preferred shares 37.2 37.2 Common shares (1999 - 116,705,531; 1998 - 108,394,631) 331.2 157.3 Contributed surplus 32.3 32.3 Retained earnings 218.4 202.9 Translation account 28.2 5.8 ------------------------------ 647.3 435.5 ------------------------------ $ 1,300.3 $ 1,252.0 ------------------------------ ------------------------------ Mitel Corporation CONSOLIDATED STATEMENTS OF INCOME (in millions of Canadian dollars, except per share amounts) Years Ended March 26, March 27, March 28, 1999 1998 1997 ---------------------------------------- Revenue $ 1,310.4 $ 881.4 $ 695.5 ---------------------------------------- Cost of sales: Cost of sales other than Amortization 645.6 432.6 344.4 Amortization of Manufacturing Assets 66.8 25.0 15.1 ---------------------------------------- 712.4 457.6 359.5 ---------------------------------------- Gross margin 598.0 423.8 336.0 ---------------------------------------- Expenses: Selling and administrative 332.9 246.0 220.9 Research and development (net) 149.8 52.0 50.0 Amortization of acquired intangibles 22.4 1.8 0.7 Special charges (net) 10.1 - 13.0 ---------------------------------------- 515.2 299.8 284.6 ---------------------------------------- Operating income from continuing operations 82.8 124.0 51.4 Investment and interest income 5.9 5.7 9.6 Interest expense (23.5) (7.2) (2.4) Debt issue and other costs (7.2) - - ---------------------------------------- Income from continuing operations before income taxes 58.0 122.5 58.6 Income tax expense 17.5 30.5 20.6 ---------------------------------------- Net income from continuing Operations 40.5 92.0 38.0 ---------------------------------------- Income (loss) from discontinued Operations 2.0 (0.1) - Estimated loss on disposal of discontinued operations (16.3) - - ---------------------------------------- (14.3) (0.1) - ---------------------------------------- Net income $ 26.2 $ 91.9 $ 38.0 ---------------------------------------- ---------------------------------------- Net income attributable to common shareholders after preferred share dividends $ 23.0 $ 88.7 $ 34.8 ---------------------------------------- ---------------------------------------- Net income per common share: Net income per common share from continuing operations: Basic $ 0.33 $ 0.82 $ 0.32 ---------------------------------------- ---------------------------------------- Fully diluted $ 0.32 $ 0.80 $ 0.32 ---------------------------------------- ---------------------------------------- Net income per common share: Basic $ 0.20 $ 0.82 $ 0.32 ---------------------------------------- ---------------------------------------- Fully diluted $ 0.20 $ 0.80 $ 0.32 ---------------------------------------- ---------------------------------------- Weighted average number of common shares outstanding (millions) Basic 114.0 107.8 107.3 ---------------------------------------- ---------------------------------------- Fully diluted 115.9 114.0 110.5 ---------------------------------------- ---------------------------------------- Mitel Corporation Quarterly Statements of Income - Revised (Quarterly data is unaudited) Fiscal 1999 First Second Third Quarter Quarter Quarter -------------------------------- Revenue $ 289.6 $ 347.6 $ 344.1 -------------------------------- Cost of sales: Cost of sales other than Amortization 143.2 171.8 164.4 Amortization of manufacturing Assets 16.6 17.1 17.9 -------------------------------- 159.8 188.9 182.3 -------------------------------- Gross margin 129.8 158.7 161.8 -------------------------------- Expenses: Selling and administrative 67.0 86.0 92.8 Research and development (net) 35.5 35.5 39.8 Amortization of acquired intangibles 1.5 2.1 2.2 Special charges (net) - - - -------------------------------- 104.0 123.6 134.8 -------------------------------- Operating income (loss) from continuing operations 25.8 35.1 27.0 Investment and interest income 1.6 1.1 1.5 Interest expense (6.5) (5.8) (5.8) Debt issue and other costs - (7.2) - -------------------------------- Income (loss) from continuing operations before income taxes 20.9 23.2 22.7 Income tax expense 5.2 6.9 3.0 -------------------------------- Net income (loss) from continuing operations 15.7 16.3 19.7 -------------------------------- Income (loss) from discontinued Operations (1.1) (3.5) (2.0) Estimated loss on disposal of discontinued operations - - - -------------------------------- (1.1) (3.5) (2.0) -------------------------------- Net income (loss) $ 14.6 $ 12.8 $ 17.7 -------------------------------- -------------------------------- Net income (loss) attributable to common shareholders after preferred share dividends $ 13.8 $ 12.0 $ 16.9 -------------------------------- -------------------------------- Net income (loss) per common share: Net income (loss) per common share from continuing operations: Basic $ 0.14 $ 0.13 $ 0.16 -------------------------------- -------------------------------- Fully diluted $ 0.14 $ 0.13 $ 0.16 -------------------------------- -------------------------------- Net income (loss) per common share: Basic $ 0.13 $ 0.10 $ 0.15 -------------------------------- -------------------------------- Fully diluted $ 0.13 $ 0.10 $ 0.14 -------------------------------- -------------------------------- Weighted average number of common shares outstanding (millions) Basic 108.5 115.3 116.7 -------------------------------- -------------------------------- Fully diluted 111.5 118.1 122.5 -------------------------------- -------------------------------- Fiscal Fiscal Fourth 1999 1998 Quarter Full Year Full Year Revenue $ 329.1 $ 1,310.4 $ 881.4 -------------------------------------- Cost of sales: Cost of sales other than Amortization 166.2 645.6 432.6 Amortization of manufacturing Assets 15.2 66.8 25.0 -------------------------------------- 181.4 712.4 457.6 -------------------------------------- Gross margin 147.7 598.0 423.8 -------------------------------------- Expenses: Selling and Administrative 87.1 332.9 246.0 Research and development (net) 39.0 149.8 52.0 Amortization of acquired Intangibles 16.6 22.4 1.8 Special charges (net) 10.1 10.1 - -------------------------------------- 152.8 515.2 299.8 -------------------------------------- Operating income (loss) from continuing operations (5.1) 82.8 124.0 Investment and interest income 1.7 5.9 5.7 Interest expense (5.4) (23.5) (7.2) Debt issue and other costs - (7.2) - -------------------------------------- Income (loss) from continuing operations before income taxes (8.8) 58.0 122.5 Income tax expense 2.4 17.5 30.5 -------------------------------------- Net income (loss) from Continuing operations (11.2) 40.5 92.0 -------------------------------------- Income (loss) from Discontinued Operations 8.6 2.0 (0.1) Estimated loss on disposal of discontinued operations (16.3) (16.3) - -------------------------------------- (7.7) (14.3) (0.1) -------------------------------------- Net income (loss) $ (18.9) $ 26.2 $ 91.9 -------------------------------------- -------------------------------------- Net income (loss) attributable to common shareholders after preferred share dividends $ (19.7) $ 23.0 $ 88.7 -------------------------------------- -------------------------------------- Net income (loss) per common share: Net income (loss) per common share from continuing operations: Basic $ (0.10) $ 0.33 $ 0.82 -------------------------------------- -------------------------------------- Fully diluted $ (0.10) $ 0.32 $ 0.80 -------------------------------------- -------------------------------------- Net income (loss) per common share: Basic $ (0.17) $ 0.20 $ 0.82 -------------------------------------- -------------------------------------- Fully diluted $ (0.17) $ 0.20 $ 0.80 -------------------------------------- -------------------------------------- Weighted average number of common shares outstanding (millions) Basic 116.7 114.0 107.8 -------------------------------------- -------------------------------------- Fully diluted 116.7 115.9 114.0 -------------------------------------- -------------------------------------- Net income from continuing operations previously reported on Form 10-Q differ from amounts reported above as a result of the reclassification of discontinued operations. The impact on the Fiscal 1998 quarterly results was negligible. Mitel Corporation Quarterly Adjusted Net Income Reconciliation (Quarterly data is unaudited) Fiscal 1999 First Second Third Adjusted Net Income Quarter Quarter Quarter -------------------------------- Net income (loss) as reported $ 14.6 $ 12.8 $ 17.7 Adjusted net income, as adjusted for: Amortization of acquired Intangibles 1.4 2.2 2.2 Special charges (net) - - - Debt issue and other costs - 7.2 - (Income) loss from discontinued operations 1.1 3.5 2.0 Estimated loss on disposal of discontinued operations - - - -------------------------------- Adjusted net income (1) $ 17.1 $ 25.7 $ 21.9 -------------------------------- -------------------------------- Adjusted Earnings Per Share Earnings (loss) per share as reported $ 0.13 $ 0.10 $ 0.15 Adjusted earnings per share, as adjusted for: Amortization of acquired Intangibles 0.01 0.02 0.02 Special charges (net) - - - Debt issue and other costs - 0.08 - (Income) loss from discontinued operations 0.01 0.03 0.01 Estimated loss on disposal of discontinued operations - - - -------------------------------- Adjusted earnings per share (1) $ 0.15 $ 0.23 $ 0.18 -------------------------------- -------------------------------- Fiscal Fiscal Fourth 1999 1998 Quarter Full Year Full Year -------------------------------- Net income (loss) as Reported $ (18.9) $ 26.2 $ 91.9 Amortization of acquired Intangibles 16.6 22.4 1.8 Special charges (net) 10.1 10.1 - Debt issue and other costs - 7.2 - (Income) loss from discontinued operations (8.6) (2.0) 0.1 Estimated loss on disposal of discontinued operations 16.3 16.3 - -------------------------------- Adjusted net income (1) $ 15.5 $ 80.2 $ 93.8 -------------------------------- -------------------------------- Adjusted Earnings Per Share Earnings (loss) per share as reported $ (0.17) $ 0.20 $ 0.82 Adjusted earnings per share, as adjusted for: Amortization of acquired intangibles 0.14 0.20 0.02 Special charges (net) 0.09 0.09 - Debt issue and other costs - 0.06 - (Income) loss from discontinued operations (0.07) (0.02) - Estimated loss on disposal of discontinued operations 0.14 0.14 - -------------------------------- Adjusted earnings per share (1) $ 0.13 $ 0.67 $ 0.84 -------------------------------- -------------------------------- (1) As a supplementary measure to assess financial performance, management utilizes adjusted net income and adjusted earnings per common share which excludes the impact of amortization of acquired intangibles, special charges (net), non-cash debt issue and other costs expensed on an early partial debt repayment, and discontinued operations. Mitel Corporation Schedule of Revenue by Business Segment (Quarterly data is unaudited) Revenue, by business segment, was distributed as follows: Three Months Ended percentage of March 26, 1999 Total -------------- ------------- Mitel Semiconductor $ 129.9 39 percent Mitel Communications Systems 199.2 61 -------------- ------------- $ 329.1 100 percent -------------- ------------- -------------- ------------- Three Months percentage of Ended Total March 27, 1998 -------------- ------------- Mitel Semiconductor $ 110.8 40 percent Mitel Communications Systems 168.1 60 -------------- ------------- $ 278.9 100 percent -------------- ------------- -------------- ------------- Year Ended percentage of March 26, 1999 Total -------------- ------------- Mitel Semiconductor $ 557.7 43 percent Mitel Communications Systems 752.7 57 -------------- ------------- $ 1,310.4 100 percent -------------- ------------- -------------- ------------- Year Ended percentage of March 27, 1998 Total -------------- ------------- Mitel Semiconductor $ 314.6 36 percent Mitel Communications Systems 566.8 64 -------------- ------------- $ 881.4 100 percent -------------- ------------- -------------- ------------- Schedule of Revenue by Geographic Segment (Unaudited) Revenue, based on the geographic location of Mitel's customers, was distributed as follows: Three Months percentage of Ended Total March 26, 1999 -------------- ------------- United States $ 137.5 42 percent Europe 116.1 35 Other Regions 56.1 17 Canada 19.4 6 -------------- ------------- $ 329.1 100 percent -------------- ------------- -------------- ------------- Three Months percentage of Ended Total March 26, 1999 -------------- ------------- United States $ 115.5 41 percent Europe 103.7 37 Other Regions 45.2 16 Canada 14.5 6 -------------- ------------- $ 278.9 100 percent Year Ended percentage of March 26, 1999 Total -------------- ------------- United States $ 589.1 45 percent Europe 428.6 33 Other Regions 221.6 17 Canada 71.1 5 $ 1,310.4 100 percent Year Ended percentage of March 27, 1998 Total -------------- ------------- United States $ 404.1 46 percent Europe 286.6 33 Other Regions 137.0 15 Canada 53.7 6 -------------- ------------- $ 881.4 100 percent -------------- ------------- -------------- -------------  