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OMAHA, Neb., Feb 4, 2004 /PRNewswire-FirstCall via COMTEX/ -- West Corporation (Nasdaq: WSTC), a leading provider of outsourced communication solutions, today announced its fourth quarter and full-year 2003 results.
Financial Summary (unaudited)
(In millions, except per share amounts and percentages)
Three Months Ended Twelve Months Ended
Dec 31 Dec 31
2003 2002 Percent 2003 2002 Percent
Change Change
Total Revenue $271.0 $215.7 25.7% $988.3 $820.7 20.4%
Operating Income $37.3 $19.6 90.3% $143.1 $106.5 34.4%
Net Income $22.6 $12.2 85.5% $87.9 $68.6 28.0%
Earnings per share
(basic) $0.34 $0.18 $1.32 $1.04
Earnings per share
(diluted) $0.33 $0.18 $1.28 $1.01
"Our consolidated year-over-year comparisons were enhanced by the acquisitions of InterCall and ConferenceCall.com," said Thomas B. Barker, Chief Executive Officer of West Corporation. "Despite a slight year-over-year revenue decrease during the fourth quarter in our Communications Services segment and a $2.1 million write off associated with a reduction in outbound capacity, we were able to meet our consolidated revenue and net income targets for the year."
Consolidated Operating Results
For the fourth quarter ended December 31, 2003, revenues were $271.0 million compared to $215.7 million for the same quarter last year, an increase of 25.7%. Operating income for the fourth quarter was $37.3 million, an increase of 90.3% compared to $19.6 million for the fourth quarter of 2002. Net income was $22.6 million, up 85.5% compared to $12.2 million in the same quarter last year. Diluted earnings per share were 33 cents versus 18 cents in the same period of 2002.
For the fiscal year 2003, revenues were $988.3 million, a 20.4% increase compared to 2002 revenues of $820.7 million. Operating income was $143.1 million, up 34.4% compared to $106.5 million in the prior year. Net income increased 28.0% to $87.9 million, versus $68.6 million in 2002. The company earned $1.28 per diluted share in 2003, compared to $1.01 in 2002.
Margins
The company reported consolidated operating margins of approximately 13.8% in the fourth quarter of 2003, a 470 basis point increase over consolidated operating margins of 9.1% in the comparable period of 2002. For the twelve months ended December 31, 2003, consolidated operating margins were 14.5%, a 150 basis point increase over consolidated operating margins of 13.0% in fiscal 2002. The addition of the Conferencing segment, which historically has higher margins than the Communication Services segment, significantly improved the company's consolidated operating margin. The Communications Services segment's fourth quarter 2003 operating margin improved to 11.8% from 9.1% in the comparable period in 2002. For the year ended December 31, 2003, the Communication Services segment's operating margin was 13.3% compared to 13.0% in the comparable period of 2002.
As a percentage of revenue, consolidated SG&A expense increased from 41.7% in the fourth quarter of 2002 to 42.7% in the fourth quarter of 2003. The fourth quarter SG&A was impacted by a charge of $2.1 million related to the sale and closing of outbound contact centers. This compares to a $2.5 million charge in the fourth quarter 2002, also related to closing outbound contact centers. For the twelve months ended December 31, 2003, consolidated SG&A expense as percentage of revenue increased to 41.0% from 38.4% in the previous year. The SG&A percentage of revenue increased 180 basis points in both the fourth quarter and annual periods due to the acquisitions of InterCall and ConferenceCall.com, which have a greater percentage of SG&A to revenue than our Communication Services segment.
Balance Sheet
At December 31, 2003, West Corporation had cash and short-term investments totaling $25.6 million and a current ratio of 1.66-to-1. On January 22, 2004, the company increased its line of credit by $125.0 million, which increased the unused and available portion of the revolving credit facility from $93.0 million at December 31, 2003 to $218.0 million currently.
"This has been an important and productive year in the development of our company," said Paul Mendlik, Chief Financial Officer of West Corporation. "Not only did we successfully acquire and finance InterCall and ConferenceCall.com, but we also adapted to changing market conditions by rightsizing our workstation capacity. Part of this process included transferring some workstations from outbound teleservices to other Communication Services units."
Conference Call
The company will hold a conference call to discuss earnings on February 5th at 10:00 AM Central Time. Investors may access the call by visiting the Investor Relations section of the West Corporation website at www.west.com and clicking on the Live Webcast icon. If you are unable to participate during the live webcast, a replay of the call will also be available on the website.
About West Corporation
West Corporation is a leading provider of outsourced communication solutions to many of the world's largest companies. The company helps its clients communicate effectively, maximize the value of their customer relationships and drive greater revenue from each transaction. West's integrated suite of customized solutions includes customer acquisition, customer care and retention services, interactive voice response services, and conferencing and accounts receivable management services.
Founded in 1986 and headquartered in Omaha, Nebraska, West has a team of approximately 24,000 employees based in North America, Europe and Asia.
For more information, please visit www.west.com .
WEST CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited, in thousands except per share and selected operating data)
Three Months Ended, Twelve Months Ended
December 31 % December 31, %
2003 2002 Change 2003 2002 Change
Revenue $271,045 $215,687 25.7% $988,341 $820,665 20.4%
Cost of services 117,970 106,066 11.2% 440,260 399,276 10.3%
Selling, general
and administrative
expenses 115,801 90,035 28.6% 404,972 314,886 28.6%
Operating income 37,274 19,586 90.3% 143,109 106,503 34.4%
Other income
(expense), net (1,674) 597 -380.4% (3,289) 2,145 -253.3%
Income before tax 35,600 20,183 76.4% 139,820 108,648 28.7%
Income tax
expense 13,049 7,928 64.6% 51,779 39,706 30.4%
Minority Interest - 97 -100.0% 165 300 -45.0%
Net income $22,551 $12,158 85.5% $87,876 $68,642 28.0%
Earnings per share:
Basic $0.34 $0.18 $1.32 $1.04
Diluted $0.33 $0.18 $1.28 $1.01
Weighted average
common shares
outstanding:
Basic 66,745 65,987 66,495 65,823
Diluted 68,898 67,329 68,617 68,129
SELECTED OPERATING DATA:
Revenue:
Communication
Services * $205,607 $215,687 $827,585 $820,665
Conferencing 65,438 - 160,756 -
Total $271,045 $215,687 $988,341 $820,665
Operating Income:
Communication
Services $24,222 $ 19,586 $109,969 $106,503
Conferencing 13,052 - 33,140 -
Total $37,274 $ 19,586 $143,109 $106,503
Operating Margin:
Communication
Services 11.8% 9.1% 13.3% 13.0%
Conferencing 19.9% - 20.6% -
Total 13.8% 9.1% 14.5% 13.0%
Number of
Communication
Services
workstations
(end of period) 13,231 14,230 13,231 14,230
Number of
Communication
Services ports
(end of period) 143,148 151,759 143,148 151,759
* Communication Services = includes all West Corporation services apart
from InterCall conferencing.
Condensed Balance Sheet
December 31, December 31, %
2003 2002 Change
Current assets:
Cash and short-term investments $25,563 $137,927 -81.5%
Trade accounts receivable, net 153,428 121,868 25.9%
Other current assets 23,423 29,790 -21.4%
Total current assets 202,414 289,585 -30.1%
Net property and equipment 234,650 213,641 9.8%
Goodwill 452,848 114,146 296.7%
Other assets 125,951 53,450 135.6%
Total assets $1,015,863 $670,822 51.4%
Current liabilities $121,621 $66,322 83.4%
Long Term Obligations 169,500 17,155 888.1%
Other liabilities & minority interest 68,504 37,753 81.5%
Stockholders' equity 656,238 549,592 19.4%
Total liabilities and stockholders
equity $1,015,863 $670,822 51.4%
SOURCE West Corporation
Carol Padon, Investor Relations of West Corporation, +1-402-963-1500
http://www.west.com
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