• Earnings announcement date moved to align with financing activities for the previously announced Dell/EMC transaction
     
  • Company reaffirms previously released Fiscal 2017 Q1 preliminary results


Denali Holding Inc. (“Denali” or “the Company”) today announced it will release its Fiscal 2017 Q1 financial results for the three months ended April 29, 2016 on June 10, 2016. The Company today also reaffirmed its preliminary results for Fiscal 2017 Q1 initially released on May 13, 2016.

The release of the Fiscal 2017 Q1 Financial Statements and results was moved to June 10, 2016 to align with financing activities related to the previously announced Dell/EMC transaction.

The Company also will conduct a conference call for debt investors on June 10 at 11 a.m. CDT to provide management’s perspective and respond to questions with respect to the results. Call details will be provided at a later date to current and prospective qualified institutional debt investors who have been granted access to Dell financial information, as well as to all holders of Dell’s other debt securities, including Dell’s unsecured senior notes. New prospective qualified institutional debt investors and holders of Dell’s debt securities who wish to request access to the confidential conference call, or to Dell’s financial information before or after the call, can do so at: www.dell.com/investors.

On May 13, 2016, the Company released selected preliminary financial results for the three months ended April 29, 2016 in connection with the financing for its previously announced acquisition of EMC Corporation. Preliminary non-GAAP net revenue and non-GAAP operating income of Denali were approximately $13.3 billion and $0.6 billion, respectively, for the three months ended April 29, 2016. Preliminary Adjusted EBITDA was approximately $0.7 billion for the three months ended April 29, 2016. The selected preliminary financial results presented were inclusive of the results of Dell Services. On March 27, 2016, Dell entered into a definitive agreement with NTT Data International L.L.C. to divest substantially all of Dell Services, including the Dell Services Federal Government business, for cash consideration of approximately $3.1 billion.

The Company reaffirms the preliminary results and further adjusted the financial statement presentation in accordance with applicable accounting guidance to reflect the results on a continuing operations basis, which excludes Dell Services. The table below presents results from continuing operations of Denali Holding Inc. for the periods indicated.


  

Three Months Ended 

 
 

   April 29, 2016 

  May 1, 2015 

  Change  

  

(in millions)

 

Net revenue

$12,534

$12,838

-2%

Operating loss

$(161)

$(335)

52%

Non-GAAP net revenue

$12,612

 $12,985

-3%

Non-GAAP operating income

$565 

$412 

37%

Adjusted EBITDA

$659 

$513 

28%


 

The table below provides a reconciliation of net revenue to non-GAAP net revenue, operating loss to non-GAAP operating income and operating loss to Adjusted EBITDA for the periods indicated.

Three Months Ended
       April 29, 2016       
    
       May 1, 2015       
(in millions)
Net revenue
$12,534
 
$12,838
Non-GAAP adjustments:
 
 
 
    
Impact of purchase accounting
Non-GAAP net revenue

 

78
$12,612
 
147
$12,985
 
Operating loss
$(161)
 
$(335)
Non-GAAP adjustments:   
Impact of purchase accounting
107
 
180
Amortization of intangibles
527
 
529
Other corporate expenses
92
 
38
Non-GAAP operating income
$565
 
$412

 

 

  

 

 Three Months Ended

   April 29, 2016 

     

  May 1, 2015   

 

 (in millions)

 Operating loss

$(161)

 

$(335)

 Adjustments:
 Depreciation and amortization

660

 

663

 Other corporate expenses

92

38

 Impact of purchase accounting 

68

147

 Adjusted EBITDA    

$659

 $513

 

Non-GAAP net revenue, non-GAAP operating income and Adjusted EBITDA (collectively “non-GAAP financial measures”) are not measurements of financial performance prepared in accordance with U.S. Generally Accepted Accounting Principles. Non-GAAP financial measures exclude the impact of purchase accounting related to Dell’s going-private transaction, amortization of intangibles, and other corporate expenses. Other corporate expenses primarily consist of stock based compensation expense, severance and facility action costs and acquisition, integration, and divestiture related costs. More information about Denali’s use of non-GAAP financial information is provided in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP Financial Measures” for the fiscal year ended January 29, 2016 in Denali’s S-4 Registration Statement.

 

The selected financial data included here has been prepared by, and is the responsibility of, Denali’s management. The assumptions and estimates underlying the estimated financial data are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties. See the section entitled “Risk Factors” in Denali’s S-4 Registration Statement.

About Denali Holding Inc. and Dell Inc.

Dell Inc., a wholly owned subsidiary of Denali Holding Inc., listens to customers and delivers worldwide innovative technology, business solutions and services that give them the power to do more. For more information, visit www.dell.com.

 

###

 
 Dell Media Contacts:         
 David Frink Dell            (512) 632-3423  david_frink@dell.com
 Kimberly Otzman Dell (408) 916-7338  kimberly_otzman@dell.com
 Investor Relations Contacts:    
 Kristy Bias Dell (512) 728-1658  kristy_harris_bias@dell.com
 Karen Litzler-Hollier Dell (512) 728-0388  karen_litzler-hollie@dell.com

 

 

Disclosure Regarding Forward Looking Statements

This communication contains forward-looking statements, which reflect Denali Holding Inc.’s current expectations. In some cases, you can identify these statements by such forward-looking words as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “confidence,” “may,” “plan,” “potential,” “should,” “will” and “would,” or similar expressions. Factors or risks that could cause our actual results to differ materially from the results we anticipate include, but are not limited to: (i) the failure to consummate or delay in consummating the proposed transaction with EMC; (ii) the risk that a condition to closing of the proposed transaction may not be satisfied or that required financing for the proposed transaction may not be available or may be delayed; (iii) the risk that a regulatory approval that may be required for the proposed transaction is delayed, is not obtained, or is obtained subject to conditions that are not anticipated; (iv) risk as to the trading price of Class V Common Stock to be issued by Denali Holding Inc. in the proposed transaction relative to the trading price of shares of VMware, Inc. common stock; (v) the effect of the announcement of the proposed transaction on Denali Holding Inc.’s relationships with its customers, operating results and business generally; and (vi) adverse changes in general economic or market conditions. Denali Holding Inc. undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

Additional Information and Where to Find It

This communication does not constitute an offer to sell or a solicitation of an offer to sell or a solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law. This communication is being made in respect of the proposed business combination transaction between EMC Corporation and Denali Holding Inc. The proposed transaction will be submitted to the shareholders of EMC Corporation for their consideration. In connection with the issuance of Class V Common Stock of Denali Holding Inc. in the proposed transaction, Denali Holding Inc. has filed with the SEC a Registration Statement on Form S-4 (File No. 333-208524) that included a preliminary proxy statement/prospectus regarding the proposed transaction and each of Denali Holding Inc. and EMC Corporation plans to file with the SEC other documents regarding the proposed transaction. After the registration statement has been declared effective by the SEC, a definitive proxy statement/prospectus will be mailed to each EMC Corporation shareholder entitled to vote at the special meeting in connection with the proposed transaction. INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER DOCUMENTS RELATING TO THE TRANSACTION FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors may obtain copies of the proxy statement/prospectus (when available) and all other documents filed with the SEC regarding the proposed transaction, free of charge, at the SEC's website (http://www.sec.gov) or from Denali Holding Inc.’s website (http://www.dell.com/futurereadydell).

Participants in the Solicitation

Denali Holding Inc. and certain of its directors, officers and employees may participate in the solicitation of proxies from EMC Corporation shareholders in connection with the proposed transaction without additional compensation. Additional information regarding the persons who may, under the rules of the SEC, participate in the solicitation of EMC Corporation shareholders in connection with the proposed transaction and a description of their direct and indirect interest, by security holdings or otherwise, is set forth in the proxy statement/prospectus filed with the SEC in connection with the proposed transaction.

 

 

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