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OMAHA, Neb., July 20, 2005 /PRNewswire-FirstCall via COMTEX/ -- West Corporation (Nasdaq: WSTC), a leading provider of outsourced communication solutions, today announced its second quarter 2005 results.
Financial Summary (unaudited)
(In millions, except per share amounts and percentages)
Three Months Ended Six Months Ended
June 30 June 30
Percent Percent
2005 2004 Change 2005 2004 Change
Revenue $369.8 $283.7 30.4% $729.3 $573.1 27.3%
Operating income $66.1 $43.0 53.7% $125.2 $87.7 42.7%
Net income $37.5 $26.8 40.0% $71.0 $54.2 31.0%
Earnings per share
(basic) $0.55 $0.40 $1.04 $0.80
Earnings per share
(diluted) $0.53 $0.39 $1.00 $0.79
"We are pleased by the growth we are seeing across all of our business segments," said Thomas B. Barker, Chief Executive Officer of West Corporation. "The acquisitions of Sprint's conferencing business, ECI and Worldwide during the past year are proving to be very successful and are allowing us to further leverage our operating model."
Consolidated Operating Results
For the second quarter ended June 30, 2005, revenues were $369.8 million compared to $283.7 million for the same quarter last year, an increase of 30.4%. Revenue from acquired entities* accounted for $61.2 million of this increase. Operating income for the second quarter was $66.1 million, an increase of 53.7% compared to $43.0 million for the second quarter of 2004. Net income was $37.5 million, up 40.0% compared to $26.8 million in the same quarter last year. Diluted earnings per share were $0.53 versus $0.39 in the same period of 2004.
Margins
The company reported consolidated operating income as a percentage of revenue of 17.9% in the second quarter of 2005, up from 15.2% in the comparable quarter last year. The operating margin improvements for the quarter are the result of increased revenues in the traditionally higher margin Conferencing and Receivables Management segments. The Company also produced improved margins in the Communications Services segment, primarily due to improved infrastructure utilization, which reduced SG&A expense as a percent of revenue.
Balance Sheet
At June 30, 2005, West Corporation had cash and short-term investments totaling $25.3 million and a current ratio of 1.5 to 1. Net cash flows from operating activities were $79.0 million for the second quarter, an increase of $47.9 million over the second quarter of 2004. As of June 30, 2005, the company had $60 million of capacity available on its bank line of credit.
"During the quarter, we invested $18.0 million in capital expenditures, which were mainly related to telephone switching equipment, computer hardware and software, and facility expansion in the Philippines and North Carolina," commented Paul Mendlik, Chief Financial Officer of West Corporation.
Conference Call
The company will hold a conference call to discuss earnings on July 21st 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 28,000 employees based in North America, Europe and Asia.
For more information, please visit www.west.com.
This news release contains forward looking statements within the meaning of the Federal securities laws. You can identify forward looking statements by the use of such words as "will," "expect," "plans," "believes," "estimates," "intend," "continue," or the negative of such terms, or other comparable terminology. Forward looking statements also include the assumptions underlying or relating to any of the foregoing statements.
Our results could differ materially from the expectations expressed in
these statements. Further information regarding the factors that could cause
actual results to differ from expected projected results can be found in
documents filed by the company with the United States Securities and Exchange
Commissions (the "SEC") including our annual report on Form 10-K for the year
ended December 31, 2004, and subsequently filed quarterly reports on Form 10-
Q. We assume no obligation to update these forward looking statements.
* Acquired entities include Sprint Corporation's conferencing assets
(acquired in June 2005) and ECI, Conference Call Services, LLC (Acquired
in November 2004) in the Conferencing segment and Worldwide Asset
Management, LLC (acquired in August 2004) in the Receivables Management
segment.
WEST CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited, in thousands except per share and selected operating data)
Three Months Ended Six Months Ended
June 30, % June 30, %
2005 2004 Change 2005 2004 Change
Revenue $369,788 $283,684 30.4% $729,345 $573,052 27.3%
Cost of services 165,297 123,550 33.8% 331,234 249,484 32.8%
Selling, general
and
administrative
expenses 138,386 117,136 18.1% 272,927 235,831 15.7%
Operating income 66,105 42,998 53.7% 125,184 87,737 42.7%
Other expense, net 2,678 636 321.1% 5,040 1,909 164.0%
Income before tax 63,427 42,362 49.7% 120,144 85,828 40.0%
Income tax expense 21,832 15,607 39.9% 41,312 31,646 30.5%
Minority Interest 4,137 - 7,834 -
Net income $37,458 $26,755 40.0% $70,998 $54,182 31.0%
Earnings per share:
Basic $0.55 $0.40 37.5% $1.04 $0.80 30.0%
Diluted $0.53 $0.39 35.9% $1.00 $0.79 26.6%
Weighted average
common shares
outstanding:
Basic 68,579 67,406 68,513 67,356
Diluted 71,052 69,014 70,958 69,010
SELECTED OPERATING DATA:
Revenue:
Communication
Services $212,026 $197,122 7.6% $430,526 $400,864 7.4%
Conferencing 103,932 76,862 35.2% 192,124 152,089 26.3%
Receivables
Management 55,008 9,956 452.5% 108,960 20,613 428.6%
Inter segment
eliminations (1,178) (256)360.2% (2,265) (514) 340.7%
Total $369,788 $283,684 30.4% $729,345 $573,052 27.3%
Operating Income:
Communication
Services $29,444 $25,097 17.3% $60,057 $52,172 15.1%
Conferencing 26,760 18,457 45.0% 44,913 35,236 27.5%
Receivables
Management 9,901 (556) 20,214 329
Total $66,105 $42,998 53.7% $125,184 $87,737 42.7%
Operating Margin:
Communication
Services 13.9% 12.7% 9.4% 13.9% 13.0% 6.9%
Conferencing 25.7% 24.0% 7.2% 23.4% 23.2% 0.9%
Receivables
Management 18.0% -5.6% 18.6% 1.6%
Total 17.9% 15.2% 17.8% 17.2% 15.3% 12.4%
Number of
workstations
(end of period) 16,871 14,007
Number of
Communication
Services ports
(end of period) 132,573 135,478
Condensed Balance Sheet
June 30, December 31, %
2005 2004 Change
Current assets:
Cash and short-term investments $25,271 $21,939 15.2%
Trust cash 10,371 10,633 -2.5%
Trade accounts receivable, net 204,551 195,598 4.6%
Portfolio receivables, current 27,421 26,646 2.9%
Other current assets 26,894 27,244 -1.3%
Total current assets 294,508 282,060 4.4%
Net property and equipment 228,575 223,110 2.4%
Portfolio receivables, net 60,632 56,897 6.6%
Goodwill 707,035 573,885 23.2%
Other assets 194,218 135,254 43.6%
Total assets $1,484,968 $1,271,206 16.8%
Current liabilities $192,290 $160,755 19.6%
Long Term Obligations 350,664 238,354 47.1%
Other liabilities & minority interest 73,643 82,642 -10.9%
Stockholders' equity 868,371 789,455 10.0%
Total liabilities and
stockholders equity $1,484,968 $1,271,206 16.8%
SOURCE West Corporation
Investor Relations, Carol Padon of West Corporation, +1-402-963-1500
http://www.prnewswire.com
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