February 4, 2003

West Corporation Reports Fourth Quarter & Full Year 2002 Earnings

OMAHA, Neb., Feb 4, 2003 /PRNewswire-FirstCall via COMTEX/ --

West Corporation (Nasdaq: WSTC) or "West", a leading provider of integrated customer contact solutions focused on helping Fortune 1000 companies acquire, manage, retain and grow their customer relationships, today announced its fourth quarter and full-year 2002 results.

    Financial Summary (unaudited)
    (In millions, except per share amounts and percentages)

                      Three Months Ended          Twelve Months Ended
                            Dec 31                      Dec 31
                                         Percent                     Percent
                        2002      2001   Change     2002      2001   Change
    Total Revenue     $215.7     $203.1    6.2%   $820.7    $780.2     5.2%
    Operating Income   $19.6      $31.0  -36.8%   $106.5    $120.8   -11.9%
    Net Income         $12.2      $19.7  -38.4%    $68.6     $75.8    -9.4%
    Earnings per share
     (basic)           $0.18      $0.30            $1.04     $1.17
    Earnings per share
     (diluted)         $0.18      $0.29            $1.01     $1.11

"It was a difficult and challenging year for West," said Thomas B. Barker, President and Chief Executive Officer of West Corporation. "We continue to focus on meeting the needs of our clients and are well positioned for continued growth once the economy begins to recover. We are pleased with the level of profitability we delivered while adapting to changing market conditions."

Operating Results

For the fourth quarter ended December 31, 2002, revenues were $215.7 million compared to $203.1 million for the same quarter last year, an increase of 6.2%. Fourth quarter operating income was $19.6 million, compared to $31.0 million for the same quarter last year, a decrease of 36.8%. Net income was $12.2 million, compared to $19.7 million in the same quarter last year, a decrease of 38.4%. Diluted earnings per share were 18 cents versus 29 cents in the same period of 2001.

For the fiscal year 2002, revenues were $820.7 million, 5.2% higher than 2001 revenues of $780.2 million. Operating income was $106.5 million compared to $120.8 million in the prior year. Net income was $68.6 million, versus $75.8 million in 2001. The company earned $1.01 per diluted share during the year, compared to $1.11 in 2001. For the full-year 2002 EBITDA totaled $169.8 million, consistent with the 2001 number of $169.6 million.

Margins

The company reported fourth quarter 2002 operating margins of approximately 9.1%, compared to 15.3% in the comparable period of 2001. For the twelve months ended December 31, 2002, operating margins were 13.0%, versus 15.5% in fiscal 2001. As a percentage of revenues, SG&A expense increased from 33.7% in the fourth quarter of 2001 to 41.7% in the fourth quarter of 2002. The increase in fourth quarter SG&A was related to $12.3 million of bad debt expense, a $3.1 million increase related to depreciation and amortization costs and a one-time charge of $2.5 million related to closing outbound contact centers. For the twelve months ended December 31, 2002, SG&A expense as percentage of revenue increased to 38.4% from 33.4% in the previous year.

Balance Sheet

At December 31, 2002, West Corporation had cash and cash equivalents totaling $137.9 million. Over the past year, the company's current ratio has improved from 3.5-to-1 at the end of 2001 to 4.4-to-1 on December 31, 2002. West Corporation continues to maintain its strong financial position and there are no outstanding borrowings under the company's lines of credit.

Other Developments

The company announced the opening of a contact center in Victoria, British Columbia, Canada. Operations will begin in April 2003, with approximately 150 workstations. The center can accommodate up to 500 workstations.

"This new state of the art center is being opened to provide additional inbound customer service support for an existing client," said Paul Mendlik, Chief Financial Officer of West Corporation. "With these additions, West will have approximately 14,400 workstations in operation by the start of the second quarter."

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 integrated customer contact solutions, focused on helping Fortune 1000 companies acquire, manage, retain and grow their customer relationships.

West's customized solutions include large volume agent based transaction processing, interactive voice response and Web-enabled customer contact solutions. The company's operational strength and proprietary technology enables it to develop long-term partnerships with its clients and drive greater value from each customer interaction.

Founded in 1986 and headquartered in Omaha, Nebraska, West has a team of approximately 23,000 employees, occupying thirty-five state-of-the-art contact centers and seven interactive automated voice and data processing centers across North America and India.

    For more information, please visit www.west.com .

Statements which are not historical facts contained in this release are forward-looking statements that involve risks and uncertainties. Such risks and uncertainties include, but are not limited to: planned expansion of operating facilities; labor market conditions; mergers, acquisitions, or joint ventures, including their execution; customer concentrations; technological innovation; and general economic conditions. Further information regarding the factors that could cause actual results to differ from expected or projected results can be found in documents filed by the Company with the United States Securities and Exchange Commission (the "SEC").

                              WEST CORPORATION
                     CONDENSED STATEMENTS OF OPERATIONS
                                 Unaudited
      ($ in thousands except per share amounts and selected operating
                                   data)
                                              Three Months Ended
                                                    31-Dec
                                              2002           2001     % change

    Revenue                                 $215,687       $203,143      6.2%
    Cost of services                         106,066        103,714      2.3%
    Selling, general and administrative
     expense                                  90,035         68,428     31.6%
    Operating Income                          19,586         31,001    -36.8%

    Other Income (expense)                       597            496     20.4%
    Income before tax and minority interest   20,183         31,497    -35.9%
    Income tax expense                         7,928         11,577     31.5%
    Minority interest                             97            197    -50.8%
    Net income                               $12,158        $19,723    -38.4%

    Earnings per common share
                   Basic                       $0.18          $0.30
                   Diluted                     $0.18          $0.29

    Weighted average number
     of shares outstanding (in 000's):
                   Basic common shares        65,987         65,110
                   Diluted common share       67,329         67,868

    Selected operating data:
                   Operating margin             9.1%          15.3%
                   Number of workstations     14,230         11,675
                      (end of period)
                   Number of ports           151,759         78,287
                      (end of period)


                              WEST CORPORATION
                     CONDENSED STATEMENTS OF OPERATIONS
                                 Unaudited
      ($ in thousands except per share amounts and selected operating
                                   data)
                                                Twelve Months
                                                   31-Dec
                                              2002        2001     % change

    Revenue                                $820,665     $780,159      5.2%
    Cost of services                        399,276      398,892      0.1%
    Selling, general and administrative
     expense                                314,886      260,426     20.9%
    Operating Income                        106,503      120,841    -11.9%

    Other Income (expense)                    2,145           81   2548.1%
    Income before tax and minority interest 108,648      120,922    -10.2%
    Income tax expense                       39,706       44,633    -11.0%
    Minority interest                           300          503    -40.4%
    Net income                              $68,642      $75,786     -9.4%

    Earnings per common share
                   Basic                      $1.04        $1.17
                   Diluted                    $1.01        $1.11

    Weighted average number
     of shares outstanding (in 000's):
                   Basic common shares       65,823       64,895
                   Diluted common share      68,129       68,130

    Selected operating data:
                   Operating margin           13.0%        15.5%
                   Number of workstations    14,230       11,675
                      (end of period)
                   Number of ports          151,759       78,287
                      (end of period)



    Current assets:                        31-Dec-02      31-Dec-01   % change
    Cash and cash equivalents               $137,927       $151,520     -9.0%
    Accounts & notes receivable, net         121,868        135,631    -10.1%
    Other current assets                      29,790         41,621    -28.4%
    Total current assets                     289,585        328,772    -11.9%
    Property and equipment, net              213,641        202,671      5.4%
    Goodwill                                 114,146         41,942    172.2%
    Other assets                              53,450         18,050    196.1%
    Total assets                            $670,822       $591,435     13.4%

    Current liabilities                      $66,322        $93,592    -29.1%
    Other liabilities & minority interest     54,908         29,684     85.0%
    Stockholders' equity                     549,592        468,159     17.4%
    Total liabilities and stockholders
     equity                                 $670,822       $591,435     13.4%

SOURCE West Corporation

Investor Relations, Carol Padon of West Corporation,
+1-402-963-1500
http://www.west.com

Copyright (C) 2003 PR Newswire. All rights reserved.

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