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Mitel Corporation. (55PT)

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Friday 05 May, 2000

Mitel Corporation.

4th Quarter & Final Results

Mitel Corporation
5 May 2000


Mitel Corporation Releases Fourth Quarter and Year End
Results to Close a Year of Solid Performance

OTTAWA, CANADA--

Profitability for the year up by 49%

Semiconductor sales for the final quarter increase 35%

Gross Margin for the quarter up to 53%

Order backlog increases to $280 million

R&D spending increases to build future growth

Mitel Corporation (TSE:MLT, NYSE:MLT) today announced fourth
quarter and year end results for the Fiscal 2000 period ended
March 31, 2000.

'This was a terrific year of great accomplishment and solid
performance,' said Kirk K. Mandy, President and Chief Executive
Officer, Mitel. 'Our profitability picture improved significantly
and, in addition, our R&D investments, operational adjustments,
and sharpened focus are laying the groundwork for building future
value.'

Revenue from continuing operations for the quarter reached $372.7
million, up 13% from $329.1 million for the same period last year.
For Fiscal 2000, revenue from continuing operations reached a new
high of $1.4 billion, up 7% from $1.31 billion in Fiscal 1999.

Adjusted Net Income (+) for the quarter reached $42.6 million, or
$0.37 per share, up 177% from $15.4 million, or $0.13 per share,
in Fiscal 1999, and also up from $0.31 per share in the third
quarter of this Fiscal year. The improvement from a year ago is
due mainly to growth in the Semiconductor business and strength in
North America of the Systems business. For Fiscal 2000, Adjusted
Net Income improved by 49% to $119.3 million, or $1.01 per share,
compared to $80.2 million, or $0.67 per share, for Fiscal 1999.

Order backlog remained strong at $280 million, up $3 million from
the previous quarter and up $100 million from the end of Fiscal
1999.

In the fourth quarter, Mitel recorded net income of $31.5 million,
or $0.27 per share, after the amortization of acquired intangibles
of $10.6 million. This compares to a net loss of $19.0 million, or
a loss of $0.17 per share, in the fourth quarter of Fiscal 1999.

For Fiscal 2000, net income was $56.0 million, or $0.46 per share,
after deducting the amortization of acquired intangibles of $54.8
million. This compares to net income of $26.2 million, or $0.20
per share for Fiscal 1999.

For the year, cash flow from operations before working capital
changes amounted to $229 million, up by 38% from $166 million in
the previous year. During Fiscal 2000, the company also spent $36
million to repurchase and cancel 3.4 million common shares under a
previously announced normal course issuer bid program.  Cash and
short-term investments totaled $228 million, up from $164 million
at the end of the third quarter and up from $125 million at the
end of Fiscal 1999.

Review of Operations

Mitel Communications Systems recorded fourth quarter revenue of
$197.9 million, slightly below last year's sales of $199.3 million
and the $200.4 million posted last quarter. For the quarter,
revenue performance reflected general market uncertainty with
respect to post-Year 2000 equipment deployment plans, especially
among European customers. For the year, revenue from the business
reached a new high of $793.7 million, up 5% from Fiscal 1999.

Operating income improved to $15.8 million for the quarter and
$79.8 million for the year, up from $12.8 million and $61.2
million respectively, in the preceding year.  The improvement
reflects on-going efforts to boost performance through gains in
operating efficiencies and margins.

'Our Systems business continues to perform well. Its mainstay
products continue to hold or gain market share while R&D
investments are focused on emerging opportunities in the Internet
space,' said Mandy. 'During the year, we introduced unique
approaches to deliver high quality voice over Internet Protocol
and brought new possibilities to the IP realm through the novel
application of voice recognition technology. We are looking
forward to the impact this will make on our performance and
success.'

Mitel Semiconductor sales for the quarter reached $174.8 million,
a 35% increase over the $129.8 million recorded in the same period
last year. Compared to the third quarter of Fiscal 2000, sales
were up by 7% as the business continues to benefit from strong
customer relationships in North America as well as a product
portfolio focus on high-growth opportunities.  For Fiscal 2000,
Mitel Semiconductor achieved sales of $602.8 million, up from
$557.7 million in Fiscal 1999.

For the quarter, operating income increased significantly from
$8.8 million last year to $42.4 million as a result of higher
sales, improved manufacturing utilization and sharper operating
focus. For the year, operating income reached $92.0 million, up by
70% from $54.1 million in Fiscal 1999.

Semiconductor order backlog improved substantially to $253
million, up by $16 million over the previous quarter and up by
$109 million since the end of Fiscal 1999.

'Our Semiconductor business continues to make major design wins
with most of the top-tier global communications companies. In
particular, our WAN Internetworking business experienced strong
growth and we continue to extend our abilities through investments
in key alliances and technologies related to optoelectronics,
Internet Protocol, and Bluetooth wireless standards.'

Margins and Expenses

Gross margin for the quarter improved from 45% last year to 53% of
revenue, reflecting higher shipments of semiconductors and cost
efficiencies in each of the Systems and Semiconductor businesses.

Selling and administrative expenses remained at 25% of sales as
the Company continued to invest in channel development, new
product introductions, and similar activities intended to grow the
business.

Reflecting the Company's earnings performance, research and
development expenses increased to 11% of sales in the final
quarter, a percentage point improvement from the previous quarter.
The Company channeled the majority of its R&D investments into
emerging opportunities related to the Internet and broadband
interconnection in the areas of wired, wireless, and
optoelectronic networking.  Net R&D expenses for the quarter were
$42.9 million and $152.9 million for the year.

About Mitel

Mitel is a growing global provider of converging voice and data
systems and applications, and specialty semiconductors for the
communications industry. The company has annual revenues of more
than $1.4 billion and employs some 6,000 people worldwide.

(+) As a supplementary measure to assess financial performance,
management utilizes Adjusted Net Income and Adjusted Net Income
per common share which exclude the impact of amortization of
acquired intangibles, special charges, non-cash debt issue and
other costs expensed on an early partial debt repayment, and
discontinued operations.

Certain statements in this press release constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties, and
other factors which may cause the actual results, performance or
achievements of the company, to be materially different from any
future results, performance, or achievements expressed or implied
by such forward-looking statements. Such risks, uncertainties and
assumptions include, among others, the risks discussed in
documents filed by the Company with the Securities and Exchange
Commission. Investors are encouraged to consider the risks
detailed in those filings.

Editor: An analyst call to discuss 4Q00 earnings will be held from
8:30-9:30am EST.  Media can listen to this call by dialing
1-800-273-9672. Following the analyst call, a playback is
available until midnight, Tuesday May 9, 2000. The replay number
is 1-800-408-3053 or 416-695-5800, passcode 452128. The analyst
call will also be webcast via two sites: www.Q1234.com and
www.streetevents.com.  In both cases, audio is 'listen only' and a
copy of Mitel's 4Q00 news release can be downloaded.


Mitel Corporation
(incorporated under the laws of Canada)
CONSOLIDATED BALANCE SHEETS
(in millions of Canadian dollars)
                                       March , 31           March 26,
                                          2000                 1999
                                       ------------------------------
ASSETS

Current assets:
  Cash and cash equivalents            $  195.5            $  125.3
  Short-term investments                   32.9                   -
  Accounts receivable                     288.2               326.3
  Inventories                             187.7               198.1
  Prepaid expenses and other               30.8                27.4
                                       -----------------------------
                                          735.1               677.1

Long-term receivables                      18.7                35.4
Fixed assets                              457.4               507.7
Acquired intangible assets                  3.0                56.7
Patents, trademarks and other              11.3                23.4
                                       ----------------------------
                                       $1,225.5            $1,300.3
                                       ----------------------------
                                       ----------------------------



LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable and
   accrued liabilities                 $ 215.4             $  254.1
  Income and other taxes payable          31.6                 11.8
  Deferred revenue                        44.1                 36.6
  Current portion of long-term debt       57.9                 37.6
                                       ----------------------------
                                         349.0                340.1
Long-term debt                           217.5                276.5
Pension liability                         13.4                 13.2
Deferred income taxes                      9.8                 23.2
                                       ----------------------------
                                         589.7                653.0
                                       ----------------------------
Shareholders' equity:
  Capital stock
    Preferred shares                      37.0                 37.2
     Common shares
    (2000 - 113,997,734;
     1999 - 116,705,531)                 325.6                331.2
  Contributed surplus                      9.2                 32.3
  Retained earnings                      267.4                218.4
  Translation account                     (3.4)                28.2
                                      -----------------------------
                                         635.8                647.3
                                      -----------------------------
                                      $1,225.5             $1,300.3
                                      -----------------------------
                                      -----------------------------


Mitel Corporation
CONSOLIDATED STATEMENTS OF INCOME
(in millions of Canadian dollars, except per share amounts)

                           Three Months Ended     Years Ended
                           March 31, March 26, March 31,   March 26,
                             2000      1999      2000        1999
                          ------------------------------------------

Revenue                   $ 372.7    $ 329.1   $ 1,396.5   $ 1,310.4
                          ------------------------------------------
Cost of sales:
 Cost of sales
  other than amortization   160.5      166.2       645.1       645.6
 Amortization of
  manufacturing assets       16.2       15.2        67.3        66.8
                          ------------------------------------------
                            176.7      181.4       712.4       712.4
                          ------------------------------------------
Gross margin                196.0      147.7       684.1       598.0
                          ------------------------------------------
Expenses:
 Selling and
  administrative            94.9       87.1       359.4        332.9
 Research and development
  (net)                     42.9       39.0       152.9        149.8
 Amortization of acquired
  intangibles               10.6       16.6        54.8         22.4
 Special charges(net)          -       10.1           -         10.1
                          ------------------------------------------
                           148.4      152.8       567.1        515.2
                          ------------------------------------------
Operating income (loss)
 from continuing
 operations                 47.6       (5.1)      117.0         82.8

Investment and interest
 income                      3.2        1.7         8.6          5.9
Interest expense            (6.2)      (5.4)      (21.5)       (23.5)
Debt issue and other costs  (0.5)         -        (0.5)        (7.2)
                          ------------------------------------------
Income (loss) from
 continuing operations
 before income taxes        44.1       (8.8)      103.6         58.0

Income tax expense          12.6        2.5        39.6         17.5
                          ------------------------------------------

Net income (loss) from
 continuing operations      31.5      (11.3)       64.0         40.5
                          ------------------------------------------

Income from discontinued
 operations                    -        8.6           -          2.0
Estimated loss on disposal
 of discontinued operations    -      (16.3)       (8.0)       (16.3)
                          ------------------------------------------
                               -       (7.7)       (8.0)       (14.3)
                          ------------------------------------------

Net income (loss)         $ 31.5    $ (19.0)   $   56.0     $   26.2
                          ------------------------------------------
                          ------------------------------------------

Net income (loss)
 attributable to common
 shareholders after
 preferred share
 dividends                $ 30.7   $ (19.8)    $   52.8     $   23.0
                          ------------------------------------------
                          ------------------------------------------

Net income per common share:
 Net income (loss) per
 common share from
 continuing operations:
      Basic              $  0.27   $ (0.10)    $   0.53     $   0.33
                          ------------------------------------------
                          ------------------------------------------
      Fully diluted      $  0.26   $ (0.10)    $   0.52     $   0.32
                          ------------------------------------------
                          ------------------------------------------

 Net income (loss)
 per common share:
      Basic             $  0.27    $ (0.17)    $   0.46     $   0.20
                          ------------------------------------------
                          ------------------------------------------
      Fully diluted     $  0.26    $ (0.17)    $   0.45     $   0.20
                          ------------------------------------------
                          ------------------------------------------

Weighted average
 number of common shares
 outstanding (millions)
     Basic                113.8      116.7        114.7        114.0
                          ------------------------------------------
                          ------------------------------------------
     Fully diluted        122.8      116.7        120.3        115.9
                          ------------------------------------------
                          ------------------------------------------



Mitel Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions of Canadian dollars)
(Unaudited)

                                             Years Ended
                                  March 31,    March 26,    March 27,
                                    2000         1999        1998
                                  -----------------------------------
CASH PROVIDED BY (USED IN)

Operating activities:
  Net income                     $  56.0       $   26.2     $   91.9
  Amortization of capital
   and other assets                157.0          143.2         50.8
  Estimated loss on disposal
   of discontinued operations        8.0           16.3            -
  Investment tax credits            10.1           (7.0)       (18.0)
  Gain on sale of capital
   assets and investments           (1.0)          (5.5)        (0.7)
  Deferred income taxes             (1.9)          (7.8)         0.6
  Change in pension liability        1.1            0.9          1.0
  Decrease (increase)
   in working capital               18.1         (123.2)       (50.2)
                                  ----------------------------------
   Total                           247.4           43.1         75.4
                                  ----------------------------------
Investing activities:
 Change in short-term investments  (33.5)          34.5         53.3
 Additions to capital and
  other assets                     (60.9)         (63.0)        (8.3)
 Proceeds from disposal of
  capital assets and investments     4.8           11.9          7.2
 Proceeds from sale of
  discontinued operations            9.5              -            -
 Acquisitions                          -          (46.6)      (343.8)
 Net change in non-cash balances
  related to investing activities   (4.5)           5.7         (0.2)
                                  ----------------------------------
  Total                            (84.6)         (57.5)      (291.8)
                                  ----------------------------------
Financing activities:
 Increase in long-term debt            -            0.4        339.7
 Repayment of long-term debt       (21.3)        (132.7)       (10.6)
 Repayment of capital lease
  liabilities                      (33.0)          (9.0)       (42.4)
 Debt issue costs                      -           (2.0)       (10.9)
 Dividends on preferred shares      (3.2)          (3.2)        (3.2)
 Issue of common shares - net        3.9          166.4          4.0
 Repurchase of common and
  preferred shares                 (36.6)             -            -
                                  ----------------------------------
   Total                           (90.2)          19.9        276.6
                                  ----------------------------------
Effect of currency translation
 on cash                            (2.4)           2.6          1.5
                                  ----------------------------------
Increase in cash and cash
 equivalents                        70.2            8.1         61.7

Cash and cash equivalents,
 beginning of year                 125.3          117.2         55.5
                                  ----------------------------------
Cash and cash equivalents,
 end of year                    $  195.5       $  125.3     $  117.2
                                  ----------------------------------
                                  ----------------------------------



Mitel Corporation
SUPPLEMENTARY SCHEDULES
(in millions of Canadian dollars, except per share amounts)
(Quarterly data is unaudited)

Adjusted Net Income

As a supplementary measure to assess financial performance, management
utilizes Adjusted Net Income and Adjusted Net Income per common share
which exclude 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.  The
Adjusted Net Income and Adjusted Net Income per common share are as
follows:


                            Three Months Ended         Years Ended
                           March 31,  March 26,  March 31,  March 26,
                             2000       1999       2000       1999
                           -----------------------------------------
Net income (loss) for
the period as reported    $  31.5    $  (19.0)   $  56.0    $  26.2

Adjusted net income,
 as adjusted for:
  Amortization of
  acquired intangibles       10.6        16.6       54.8       22.4
  Special charges (net)
                                -        10.1          -       10.1
Debt issue and other
 costs                        0.5           -        0.5        7.2

Income from discontinued
 operations                     -        (8.6)         -       (2.0)

Estimated loss on disposal
 of discontinued operations     -        16.3        8.0       16.3
                           -----------------------------------------

Adjusted Net Income
 for the period            $  42.6    $  15.4     $119.3    $  80.2
                           -----------------------------------------
                           -----------------------------------------

Adjusted Net Income per
 common share - basic      $  0.37    $  0.13    $  1.01    $  0.67
                           -----------------------------------------
                           -----------------------------------------


Geographic Information

Revenue, based on the geographic location of Mitel's customers, was
distributed as follows:

                        Three Months           Three Months
                           Ended      % of        Ended      % of
                      March 31, 2000  Total  March 26, 1999  Total
                      --------------  -----  --------------  -----

United States                $ 155.4     42 %       $ 137.5     42%
Europe                         125.6     34           116.1     35
Asia - Pacific                  47.3     13            48.9     15
Canada                          42.7     11            19.4      6
Other Regions                    1.7      -             7.2      2
                      --------------------------------------------
                      --------------------------------------------
                             $ 372.7    100 %       $ 329.1    100%
                      --------------------------------------------
                      --------------------------------------------


                        Year Ended     % of     Year Ended    % of
                      March 31, 2000   Total  March 26, 1999  Total
                      --------------   -----  --------------  -----

United States               $  632.7      45 %     $   589.1    45%
Europe                         459.8      33           428.6    33
Asia - Pacific                 159.9      11           166.7    13
Canada                          92.3       7            71.1     5
Other Regions                   51.8       4            54.9     4
                      --------------------------------------------
                      --------------------------------------------
                            $1,396.5     100 %      $1,310.4   100%
                      --------------------------------------------
                      --------------------------------------------



Mitel Corporation
SUPPLEMENTARY SCHEDULES
(in millions of Canadian dollars)
(Quarterly data is unaudited)

Information on Business Segments


Three Months Ended March 31, 2000
                                                  Unallocated
                          Systems  Semiconductor    Costs       Total
                          -------------------------------------------
Total external sales
 revenue                  $ 197.9        $ 174.8   $     -   $  372.7
Amortization of
 buildings and equipment      5.7           18.7         -       24.4
Amortization of acquired
 intangibles                    -              -      10.6       10.6
Segment's operating income
from continuing operations   15.8           42.4     (10.6)      47.6



Three Months Ended March 26, 1999
                                                  Unallocated
                          Systems  Semiconductor    Costs       Total
                          -------------------------------------------
Total external sales
 revenue                  $ 199.3       $ 129.8    $      -   $ 329.1
Amortization of
 buildings and equipment      5.5          19.1           -      24.6
Amortization of acquired
 intangibles                    -             -        16.6      16.6
Special charges (net)           -             -        10.1      10.1
Segment's operating income
 from continuing operations  12.8           8.8       (26.7)     (5.1)



Year Ended March 31, 2000
                                                  Unallocated
                          Systems  Semiconductor    Costs       Total
                          -------------------------------------------
Total external sales
 revenue                  $ 793.7        $ 602.8    $    -   $1,396.5
Amortization of
 buildings and equipment     22.6           77.8         -      100.4
Amortization of acquired
 intangibles                    -              -      54.8       54.8
Segment's operating income
 from continuing operations  79.8           92.0     (54.8)     117.0



Year Ended March 26, 1999
                                                  Unallocated
                          Systems  Semiconductor    Costs       Total
                          -------------------------------------------
Total external sales
revenue                   $ 752.7       $ 557.7    $     -   $1,310.4
Amortization of buildings
 and equipment               20.9          84.9          -      105.8
Amortization of acquired
 intangibles                    -             -       22.4       22.4
Special charges (net)           -             -       10.1       10.1
Segment's operating income
 from continuing operations  61.2           54.1     (32.5)      82.8



FOR FURTHER INFORMATION PLEASE CONTACT:

Mitel Corporation
Jacques Guerette
Corporate Communications
(613) 592-2122
E-mail: jacques_guerette@mitel.com
Web site: www.mitel.com
or
Mitel Corporation
Mike McGinn
Investor Relations
(613) 592-2122
E-mail: mike_mcginn@mitel.com