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OMAHA, Neb., Feb 02, 2005 /PRNewswire-FirstCall via COMTEX/ -- West Corporation (Nasdaq: WSTC), a leading provider of outsourced communication solutions, today announced record fourth quarter and full-year 2004 results.
Financial Summary (unaudited)
(In millions, except per share amounts and percentages)
Three Months Ended Twelve Months Ended
Dec 31 Dec 31
2004 2003 Percent 2004 2003 Percent
Change Change
Total Revenue $336.7 $271.0 24.2% $1,217.4 $988.3 23.2%
Operating Income $52.5 $37.3 40.7% $187.9 $143.1 31.3%
Net Income $30.5 $22.6 35.1% $113.2 $87.9 28.8%
Earnings per
share (basic) $0.45 $0.34 32.4% $1.67 $1.32 26.5%
Earnings per
share (diluted) $0.43 $0.33 30.3% $1.63 $1.28 27.3%
"We achieved significant revenue growth in all of our business segments, both during the fourth quarter and over the past year," said Thomas B. Barker, Chief Executive Officer of West Corporation. "The acquisitions of Worldwide and ECI, combined with the strengths in our existing businesses, have positioned us well for 2005."
Consolidated Operating Results
For the fourth quarter ended December 31, 2004, revenues were $336.7 million compared to $271.0 million for the same quarter last year, an increase of 24.2%. Revenue from acquired entities accounted for $36.4 million of this increase. Operating income for the fourth quarter was $52.5 million, an increase of 40.7% compared to $37.3 million for the fourth quarter of 2003. Net income was $30.5 million, up 35.2% compared to $22.6 million in the same quarter last year. Diluted earnings per share were $0.43 versus $0.33 in the same period of 2003.
For the fiscal year 2004, revenues were $1,217.4 million, a 23.2% increase compared to 2003 revenues of $988.3 million. Revenue from acquired entities accounted for $165.3 million of this increase. Operating income was $187.9 million, up 31.3% compared to $143.1 million in the prior year. Net income increased 28.8% to $113.2 million, versus $87.9 million in 2003. The company earned $1.63 per diluted share in 2004, compared to $1.28 in 2003.
Margins
The company reported consolidated operating income as a percentage of revenue of 15.6% in the fourth quarter of 2004, up from 13.8% in the comparable quarter last year. For the twelve months ended December 31, 2004, operating income as a percentage of revenues was 15.4%, compared to 14.5% in fiscal 2003. The operating margin improvements for the year reflect management's control of SG&A expense and the impact of the acquisition of Worldwide Asset Management on August 1, 2004.
Balance Sheet
At December 31, 2004, West Corporation had cash and short-term investments totaling $32.6 million and a current ratio of 1.8 to 1. Net cash flows from operating activities were $222.5 million for the year, an increase of $26.3 million over 2003.
"During the fourth quarter, we invested $21.6 million in capital expenditures to open a new contact center in Ohio, as well as expand six domestic and three international centers to support new business opportunities. We also redeployed one Outbound contact center to the Receivables Management segment and converted two additional Outbound centers for Inbound dedicated agent business," commented Paul Mendlik, Chief Financial Officer of West. "During 2004, we added 2,500 workstations, including 1,300 international workstations, and our 'West at Home' program has continued to expand, now utilizing over 5,500 agents."
West amended its existing revolving credit facility in the fourth quarter of 2004. The amended facility increases the borrowing capacity to $400 million, provides greater financial flexibility, reduces the Company's interest rate, and relaxes certain debt covenants. West utilized $230 million of this credit facility at December 31, 2004 and had an effective interest rate of 3.3% in the fourth quarter. This facility was used to fund the ECI acquisition.
Conference Call
The company will hold a conference call to discuss earnings on February 3rd at 10:00 AM Central Time. Investors may access the call by visiting the Investor Relations section of the West Corporation website at http://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 http://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. For example, the statement regarding our 2005 positioning is a forward looking statement.
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, 2003, and subsequently filed quarterly reports on Form 10-
Q. We assume no obligation to update these forward looking statements.
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, %
2004 2003 Change 2004 2003 Change
Revenue $336,718 $271,045 24.2% $1,217,383 $988,341 23.2%
Cost of services 154,637 117,970 31.1% 541,979 440,260 23.1%
Selling, general
and administrative
expenses 129,623 115,801 11.9% 487,513 404,972 20.4%
Operating income 52,458 37,274 40.7% 187,891 143,109 31.3%
Other income
(expense), net (1,772) (1,674) 5.9% (6,368) (3,289) 93.6%
Income before tax 50,686 35,600 42.4% 181,523 139,820 29.8%
Income tax expense 17,618 13,048 35.0% 65,762 51,779 27.0%
Minority Interest 2,590 -- 2,590 165 1469.7%
Net income $30,478 $22,552 35.1% $113,171 $87,876 28.8%
Earnings per share:
Basic $0.45 $0.34 32.4% $1.67 $1.32 26.5%
Diluted $0.43 $0.33 30.3% $1.63 $1.28 27.3%
Weighted average common
shares outstanding:
Basic 68,075 66,745 67,643 66,495
Diluted 70,249 68,898 69,469 68,617
SELECTED OPERATING DATA:
Revenue:
Communication
Services $219,085 $197,494 10.9% $817,718 $794,043 3.0%
Conferencing 75,027 65,470 14.6% 302,469 160,796 88.1%
Receivables
Management 44,023 8,324 428.9% 99,411 34,134 191.2%
Inter Segment
Eliminations (1,417) (243) (2,215) (632)
Total $336,718 $271,045 24.2% 1,217,383 $988,341 23.2%
Operating Income
(Loss):
Communication
Services $31,642 $24,760 27.8% $105,638 $109,981 -3.9%
Conferencing 13,767 13,083 5.2% 67,264 33,180 102.7%
Receivables
Management 7,049 (569) -- 14,989 (52) --
Total $52,458 37,274 40.7% $187,891 $143,109 31.3%
-- -- --
Operating Margin:
Communication
Services 14.4% 12.5% 15.2% 12.9% 13.9% -7.2%
Conferencing 18.3% 20.0% -8.5% 22.2% 20.6% 7.8%
Receivables
Management 16.0% -6.8% -- 15.1% -0.2% --
Total 15.6% 13.8% 13.0% 15.4% 14.5% 6.2%
Number of workstations
(end of period) 15,776 13,231 19.2% 15,776 13,231 19.2%
Number of Communication
Services ports
(end of period) 137,176 143,148 -4.2% 137,176 143,148 -4.2%
Condensed Balance Sheet
December 31, December 31, %
2004 2003 Change
Current assets:
Cash and short-term investments $32,572 $25,563 27.4%
Trade accounts receivable, net 195,598 153,428 27.5%
Portfolio receivables, current 26,646 -
Other current assets 27,244 23,423 16.3%
Total current assets 282,060 202,414 39.3%
Net property and equipment 223,110 234,650 -4.9%
Portfolio receivables, net 56,897 -
Goodwill 573,885 452,848 26.7%
Other assets 135,254 125,951 7.4%
Total assets $1,271,206 $1,015,863 25.1%
Current liabilities $160,755 $121,621 32.2%
Long Term Obligations 238,354 169,500 40.6%
Other liabilities & minority interest 82,642 68,504 20.6%
Stockholders' equity 789,455 656,238 20.3%
Total liabilities and stockholders
equity $1,271,206 $1,015,863 25.1%
(1) The common definition of EBITDA is "Earnings Before Interest, Taxes,
Depreciation and Amortization." In evaluating financial performance,
we use earnings before interest, taxes, depreciation and amortization
and minority interest ("Adjusted EBITDA"). Adjusted EBITDA should be
used in conjunction with GAAP financial measures and is not presented
as an alternative to cash flow from operations as a measure of our
liquidity or as an alternative to net income as an indicator or our
operating performance. Adjusted EBITDA, as presented, may not be
comparable to similarly titled measures of other companies. Adjusted
EBITDA is presented as we understand certain investors use it as one
measure of our historical ability to service debt. Also adjusted
EBITDA is used in our debt covenants. The following is a
reconciliation of adjusted EBITDA to net income.
Amounts in thousands
Three Months Ended December 31, 2004 2003
Net Income $30,478 $22,551
Interest Expense 2,518 1,859
Depreciation &
Amortization 26,838 24,166
Interest Income (419) (70)
Income Taxes 17,618 13,049
EBITDA 77,033 61,555
Minority
Interest 2,590 -
Adjusted EBITDA $79,623 $61,555
Twelve Months Ended December 31, 2004 2003
Net Income $113,171 $87,876
Interest Expense 8,165 5,503
Depreciation &
Amortization 100,185 86,466
Interest Income (895) (721)
Income Taxes 65,762 51,779
EBITDA 286,388 230,903
Minority
Interest 2,590 165
$288,978 $231,068
SOURCE West Corporation
Carol Padon, Investor Relations for West Corporation, +1-402-963-1500
http://www.prnewswire.com
Copyright (C) 2005 PR Newswire. All rights reserved.
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