EXHIBIT 99.1
PRESS RELEASE:
Mitel To Sell Its Communications Systems Division
OTTAWA, CANADA, December 15, 2000 - Mitel Corporation (NYSE/TSE:MLT) has signed
a letter of intent to sell its Communications Systems division, including the
name "Mitel", for approximately $350 million in cash, notes and a minority
interest in the business to companies controlled by Dr. Terence H. Matthews. The
sale transaction is expected to close in February 2001.
The letter of intent is subject to the entering of a Master Acquisition
Agreement between Mitel Corporation and Dr. Matthews' acquiring companies, and
to regulatory and other approvals.
"With this announcement, we are taking a significant step in our evolution and
sending a clear signal that we will focus on the opportunities and challenges of
the communications semiconductor market," said Kirk K. Mandy, president and CEO,
Mitel. "We turn a fresh page on our future knowing that both businesses will be
well placed for success."
"As a new 'pure play' semiconductor company, we are well positioned with a
strong top-tier customer base, a proven global network of sales and support
channels, leadership in a number of key industry segments, and a deep pool of
technological expertise and product development. We plan to drive forward with
new attitude, focus and growth."
Changes to Third-Quarter Expectations
Mitel expects to report the results, assets and liabilities of its
Communications Systems division as discontinued operations for the third quarter
ending December 29, 2000 with appropriate adjustments to reflect the anticipated
sale transaction. The final accounting for the sale transaction is expected to
be recorded in Mitel's fourth quarter of Fiscal 2001.
Also, Mitel expects its Semiconductor sales for the third quarter to be
sequentially lower by approximately 10% from the $194.3 million recorded in the
second quarter of Fiscal 2001. The decline is principally due to a reduction in
the orders normally booked and shipped in the same quarter, and to order
re-scheduling and cancellations, both resulting from market uncertainties. These
factors have reduced Semiconductor's backlog from $280 million at September 29,
2000 to approximately $249 million today.
"Mitel Semiconductor continues to benefit from a significant amount of design
wins, but is currently adversely affected by customer inventory adjustments in
its network access business," said Mandy.
Mitel will release its third quarter earnings on Thursday, February 1, 2001, as
planned, and these financial statements are expected to reflect the earnings
from operations attributable to its core Semiconductor business.
About Mitel Mitel is a global provider of semiconductors and communication
systems for converging voice and data networks in a rapidly evolving Internet
economy. The company has annual revenues of $1.4 billion and employs some 6,000
people worldwide.
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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.
A conference call for analysts will be held today from 8:30-9:30am ET. Media can
listen by dialing 1-800-273-9672 or 416-695-5806. A replay number is
1-800-408-3053 or 416-695-5800, passcode 631798. The replay will be available
until December 22. The call will also be available via www.Q1234.com.
A conference call for media will be held today from 9:30-10:00 ET. The call
number is 1-800-273-9672 or 416-695-5806. The replay number is 1-800-408-3053 or
416-695-5800, passcode 631799. It will be available until December 22.
For further information:
Mitel Corporation
Mitel Corporation Mike McGinn
Jacques Guerette Mnvestor Relations
Corporate Communications 613 592-2122
613 592-2122 [email protected]
[email protected]
Dr. Matthews
Pam Aung Thin
Hill & Knowlton
613 786-9939
[email protected]
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