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OMAHA, Neb., Oct 19, 2005 /PRNewswire-FirstCall via COMTEX News Network/ -- West Corporation (Nasdaq: WSTC), a leading provider of outsourced communication solutions, today announced its third quarter 2005 results.
Financial Summary (unaudited)
(In millions, except per share amounts and percentages)
Three Months Ended Nine Months Ended
September 30, September 30,
Percent Percent
2005 2004 Change 2005 2004 Change
Revenue $389.8 $307.6 26.7% $1,119.2 $880.7 27.1%
Operating
income $68.7 $47.7 44.0% $193.8 $135.4 43.1%
Net income $37.8 $28.5 32.7% $108.8 $82.7 31.6%
Earnings per
share (basic) $0.55 $0.42 $1.58 $1.23
Earnings per
share (diluted) $0.53 $0.41 $1.53 $1.19
"During the quarter, the benefits of our diversified business model combined with continued growth across all three business segments resulted in record revenue and profitability," said Thomas B. Barker, Chief Executive Officer of West Corporation. "Our Communication Services segment benefited from a short-term customer engagement that contributed $8.4 million of revenue in the third quarter."
Consolidated Operating Results
For the third quarter ended September 30, 2005, revenues were $389.8 million compared to $307.6 million for the same quarter last year, an increase of 26.7%. Revenue from acquired entities* accounted for $50.3 million of this increase. Operating income for the third quarter was $68.7 million, an increase of 44.0% versus $47.7 million in the third quarter of 2004. Net income was $37.8 million, up 32.7% compared to $28.5 million in the same quarter last year. Diluted earnings per share were $0.53 versus $0.41 in the same period of 2004.
Margins
The company reported consolidated operating margin of 17.6% in the third quarter of 2005, up from 15.5% in the comparable quarter last year. The improvement for the quarter is the result of increased revenues in the traditionally higher margin Conferencing segment and from a short-term customer engagement in the Communications Services segment.
Balance Sheet
At September 30, 2005, West Corporation had cash and short-term investments totaling $9.7 million and a current ratio of 1.6 to 1. Net cash flows from operating activities were $50.3 million for the third quarter and $186.3 million for the nine months ended September 30, 2005. As of September 30, 2005, the company had $118 million of capacity available on its bank line of credit.
"During the quarter, we continued to invest in our business, spending approximately five percent of revenues on capital expenditures to upgrade equipment and infrastructure, as well as expand facilities in three U.S. locations," commented Paul Mendlik, Chief Financial Officer of West Corporation. "We continue to increase our capacity to meet growing demand, adding both U.S. based and international workstations during the quarter, and bringing our total capacity to approximately 18,200 workstations. In addition, our At Home Agent business continues to gain traction with clients and we now have approximately 7,300 trained agents."
Conference Call
The company will hold a conference call to discuss earnings on October 20th at 10:00 a.m. Central Time. Investors may access the call by visiting the Investor section of the West Corporation website at http://www.west.com and clicking on the Webcast link. 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 27,000 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.
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 and the prospectus supplement related to our secondary offering dated October 6, 2005. 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 December 2004) in the Conferencing segment and Worldwide Asset Management, Inc. and its related entities (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 Nine Months Ended
Sept. 30, % Sept. 30, %
2005 2004 Change 2005 2004 Change
Revenue $389,814 $307,613 26.7% $1,119,159 $880,665 27.1%
Cost of
services 174,239 137,858 26.4% 505,473 387,342 30.5%
Selling, general
and
administrative
expenses 146,911 122,059 20.4% 419,838 357,890 17.3%
Operating income 68,664 47,696 44.0% 193,848 135,433 43.1%
Other expense,
net 4,293 2,687 59.8% 9,333 4,596 103.1%
Income before
tax 64,371 45,009 43.0% 184,515 130,837 41.0%
Income tax
expense 22,344 16,498 35.4% 63,656 48,144 32.2%
Minority Interest 4,202 - 12,036 -
Net income $37,825 $28,511 32.7% $108,823 $82,693 31.6%
Earnings per share:
Basic $0.55 $0.42 31.0% $1.58 $1.23 28.5%
Diluted $0.53 $0.41 29.3% $1.53 $1.19 28.6%
Weighted average
common shares
outstanding:
Basic 69,089 67,621 68,752 67,459
Diluted 71,586 69,488 71,185 69,310
SELECTED OPERATING
DATA:
Revenue:
Communication
Services $213,476 $197,769 7.9% $644,002 $598,633 7.6%
Conferencing 123,068 75,353 63.3% 315,192 227,442 38.6%
Receivables
Management 54,453 34,775 56.6% 163,413 55,388 195.0%
Inter segment
eliminations (1,183) (284) 316.5% (3,448) (798) 332.1%
Total $389,814 $307,613 26.7% $1,119,159 $880,665 27.1%
Operating Income:
Communication
Services $28,461 $22,187 28.3% $88,518 $74,030 19.6%
Conferencing 30,692 18,232 68.3% 75,605 53,447 41.5%
Receivables
Management 9,511 7,277 30.7% 29,725 7,956 273.6%
Total $68,664 $47,696 44.0% $193,848 $135,433 43.1%
Operating Margin:
Communication
Services 13.3% 11.2% 18.8% 13.7% 12.4% 10.5%
Conferencing 24.9% 24.2% 2.9% 24.0% 23.5% 2.1%
Receivables
Management 17.5% 20.9% -16.3% 18.2% 14.4% 26.4%
Total 17.6% 15.5% 13.5% 17.3% 15.4% 12.3%
Number of
workstations
(end of period) 18,188 14,765 23.2%
Number of
Communication
Services ports
(end of period) 119,158 135,822 -12.3%
Condensed Balance Sheet
(Unaudited, in thousands)
September December
30, 31, %
2005 2004 Change
Current assets:
Cash and cash
equivalents $9,742 $21,939 -55.6%
Trust cash 11,893 10,633 11.8%
Accounts and
notes
receivable,
net 219,145 195,598 12.0%
Portfolio
receivables,
current 34,749 26,646 30.4%
Other current
assets 26,022 27,244 -4.5%
Total current
assets 301,551 282,060 6.9%
Net property and
equipment 227,493 223,110 2.0%
Portfolio
receivables,
net 54,610 56,897 -4.0%
Goodwill 709,249 573,885 23.6%
Other assets 186,914 135,254 38.2%
Total
assets $1,479,817 $1,271,206 16.4%
Current
liabilities $186,335 $160,755 15.9%
Long Term
Obligations 292,421 238,354 22.7%
Other liabilities
& minority
interest 77,161 82,642 -6.6%
Stockholders'
equity 923,900 789,455 17.0%
Total
liabilities
and
stockholders'
equity $1,479,817 $1,271,206 16.4%
SOURCE West Corporation
David Pleiss, Investor Relations, of West Corporation, +1-402-963-1500
http://www.prnewswire.com
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