Mitel sees revenue decline as it moves to new fiscal year

Mitel Networks (TSX:MNW) saw both its revenues and losses drop as it reported an abbreviated version of its financial statements due to the transition to a new fiscal year.

The company has traditionally ended its fiscal year on April 30 but is now in the process of changing that so it matches the calendar year.  

As a result, Mitel has reported results for the eight-month period that ended on Dec. 31. The results don’t include those of Aastra Technologies, which Mitel acquired at the end of January.

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The company reported revenue of US$357.3 million during the abbreviated fiscal year. That’s down from the US$364.7 million it recorded during the eight-month period that ended on Dec. 31, 2012.

The company blamed the decline on lower sales from its Mitel Communications Solutions segment, which serves as its primary business unit.

That was due to  “due to lower volumes in most geographies as management adjusted its focus to the new calendar-based fiscal quarters,” according to the annual report, known as a Form 10-K, the company filed to the United States Securities and Exchange Commission.

The company reported a net loss of $5.5 million during the year. That’s an improvement on the $6.7 million net loss during the eight-month period that ended on Dec. 31, 2012.

The company credited the change to a higher gross margin, which rose from 54.9 per cent to 57.1 per cent, and a higher tax recovery. Also playing a role was the sale of the money-losing DataNet business, which was completed in March 2013.

Mitel also recorded “special charge and restructuring costs of  $14.6 million in the eight months ended December 31, 2013,” the form 10-K read.

That included $8 million primarily related to the lay-offs of 75 employees and terminating leases to reduce costs. Another $6.6 million was due to integration and other costs related to the acquisitions of Aastra and prairieFyre.

Mitel did not hold a conference call to discuss these results with investors. The company says it will do that when it reports the results of the first quarter of its new fiscal year, which ended on March 31.

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