Recently an online edition of Fortune listed Avaya among its “20 biggest money losers” for 2010. Fortune bases its rankings on the publicly available information that companies are required to file with the U.S. Securities and Exchange Commission (SEC). On that basis, Avaya did report a large net loss for the year.
People who tend to oversimplify, as well as people who may be looking for ways to discredit Avaya in the marketplace, are finding counterproductive ways to spin this. Avaya wants their customers and partners to know the facts:
2010 was a year of tremendous forward-focused activity for Avaya which required a significant investment. They acquired Nortel Enterprise Solutions (NES) and invested in the converged roadmap. Additionally, they invested in, and delivered, more innovation than in any other year in Avaya’s history. In the course of these activities, Avaya incurred more than $500 million in amortization of assets and non-cash charges related primarily to the acquisition. At the same time, Avaya worked extremely hard to control costs and streamline operations.
Overall, therefore, the net loss resulted primarily from items that did not require cash expenditures and/or from Avaya’s decisions to take actions designed to enhance our business long-term. “The loss is not surprising, and we are not apologetic about it” says Jeremy Butt, VP World Wide Channels for Avaya. More significant, Avaya delivered positive adjusted EBITDA in fiscal 2010, which is a more meaningful indicator of our operating performance.
To learn more about Avaya’s financial position or to get support for an Avaya phone system please contact a member of the Teltek team at 1.866.9.Teltek.
Source: Avaya Business Partner Email Media Release 5-5-11