West Corporation Reports Record First Quarter 2006 Revenue
OMAHA, Neb., April 19, 2006 /PRNewswire-FirstCall via COMTEX News Network/ -- West Corporation (Nasdaq: WSTC), a leading provider of outsourced communication solutions, today announced its first quarter 2006 results.
Financial Summary (unaudited) (In millions, except per share amounts and percentages) Three Months Ended March 31, 2006 2005 Percent Change Revenue $424.7 $359.6 18.1% Operating income $71.4 $59.1 20.8% Net income $41.1 $33.5 22.4% Earnings per share (basic) $0.59 $0.49 Earnings per share (diluted) $0.57 $0.47
"We are pleased to report strong overall growth in revenue and operating income for the quarter," said Thomas B. Barker, Chief Executive Officer of West Corporation. "We continue to focus on the integration of the recently completed Raindance and Intrado acquisitions and the execution of our growth and profitability strategy."
Consolidated Operating Results
For the first quarter ended March 31, 2006, revenues were $424.7 million compared to $359.6 million for the same quarter last year, an increase of 18.1%. Revenue from acquired entities(1) accounted for $30.3 million of this increase. Operating income for the first quarter was $71.4 million, an increase of 20.8%, versus $59.1 million in the first quarter of 2005. Net income was $41.1 million, up 22.4% compared to $33.5 million in the same quarter last year. Diluted earnings per share were $0.57 versus $0.47 in the same period of 2005.
The company reported consolidated operating margin of 16.8% in the first quarter of 2006, up from 16.4% in the comparable quarter last year. The improvement for the quarter is primarily the result of increased revenues and operating income in the Conferencing segment.
At March 31, 2006, West Corporation had cash and cash equivalents totaling $25.3 million and working capital of $108.3 million. Net cash flows from operating activities were $63.6 million for the first quarter.
At March 31, 2006, borrowings under the revolving credit facility totaled $161.0 million. As disclosed on April 6, West expanded its revolving credit facility to $800 million from $400 million. The Company borrowed approximately $619 million against its credit facility and currently has a total of approximately $780 million outstanding after funding acquisition costs. The current variable interest rate on the credit facility is 5.5 percent.
"During the quarter, we invested $22 million, or 5.2% of revenues, in capital expenditures to upgrade equipment and infrastructure, as well as expand facilities in three new domestic sites," commented Paul Mendlik, Chief Financial Officer of West Corporation. "During the first quarter, we added 1,100 workstations, bringing our capacity to approximately 19,300 workstations."
The company will hold a conference call to discuss earnings on Thursday, April 20, 2006 at 11:00 AM Eastern Time (10:00 AM 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, organizations and government agencies. West helps its clients communicate effectively, maximize the value of their customer relationships and drive greater profitability from every interaction. The company's integrated suite of customized solutions includes customer acquisition, customer care, automated voice services, emergency communications, conferencing and accounts receivable management services.
Founded in 1986 and headquartered in Omaha, Nebraska, West has a team of 29,000 employees based in North America, Europe and Asia. For more information, please visit http://www.west.com .
This press release contains forward-looking statements. Forward-looking statements can be identified by the use of words such as "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "intends," "continue" or similar terminology. These statements reflect only West's current expectations and are not guarantees of future performance or results. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those contained in the forward- looking statements. These risks and uncertainties include West's ability to integrate or achieve the objectives of the recently completed Intrado and Raindance acquisitions, West's ability to complete future acquisitions, competition in West's highly competitive industries, extensive regulation in many of West's markets, West's ability to recover on its charged-off consumer receivables, capacity utilization of West's contact centers, the cost and reliability of voice and data services, availability of key personnel and employees, the cost of labor and turnover rates, the political, economic and other conditions in countries where West operates, the loss of any key clients, West's ability to purchase charged-off receivable portfolios on acceptable terms and in sufficient amounts, the nature of West's forward flow contracts, the non-exclusive nature of West's client contracts and the absence of any revenue commitments, the possibility of an emergency interruption to West's data and contact centers, acts of terrorism or war, security or privacy breaches of West's systems and databases, West's ability to protect proprietary information or technology, West's ability to continue to keep pace with technological developments, the cost of pending and future litigation and other risk factors described in documents filed by the company with the United States Securities and Exchange Commissions including West's annual report on Form 10-K for the year ended December 31, 2005. These forward-looking statements speak only as of the date on which the statements were made. West undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
(1) Acquired entities include Sprint Corporation's conferencing assets (acquired in June 2005) in the Conferencing segment. WEST CORPORATION CONDENSED STATEMENTS OF OPERATIONS (Unaudited, in thousands except per share and selected operating data) Three Months Ended March 31, % 2006 2005 Change Revenue $424,738 $359,557 18.1% Cost of services 197,291 165,937 18.9% Selling, general and administrative expenses 156,058 134,541 16.0% Operating income 71,389 59,079 20.8% Other income (expense), net (3,665) (2,362) 55.2% Income before tax 67,724 56,717 19.4% Income tax expense 24,084 19,480 23.6% Minority Interest 2,576 3,697 -30.3% Net income $41,064 $33,540 22.4% Earnings per share: Basic $0.59 $0.49 20.4% Diluted $0.57 $0.47 21.3% Weighted average common shares outstanding: Basic 70,017 68,414 Diluted 72,375 70,805 SELECTED BUSINESS SEGMENT DATA: Revenue: Communication Services $229,429 $218,446 5.0% Conferencing 136,864 88,192 55.2% Receivables Management 60,156 54,006 11.4% Inter segment eliminations (1,711) (1,087) 57.4% Total $424,738 $359,557 18.1% Operating Income: Communication Services $29,125 $30,565 -4.7% Conferencing 31,037 18,147 71.0% Receivables Management 11,227 10,367 8.3% Total $71,389 $59,079 20.8% Operating Margin: Communication Services 12.7% 14.0% -9.3% Conferencing 22.7% 20.6% 10.2% Receivables Management 18.7% 19.2% -2.6% Total 16.8% 16.4% 2.4% SELECTED OPERATING DATA: Number of workstations (end of period) 19,307 16,269 18.7% Number of Communication Services ports (end of period) 120,911 133,684 -9.6% CONDENSED BALANCE SHEET (Unaudited, in thousands) March 31, December 31, % 2006 2005 Change Current assets: Cash and cash equivalents $25,297 $30,835 -18.0% Trust cash 7,716 3,727 107.0% Accounts receivable, net 248,756 217,806 14.2% Portfolio receivables, current 36,280 35,407 2.5% Other current assets 33,611 28,567 17.7% Total current assets 351,660 316,342 11.2% Net property and equipment 235,964 234,871 0.5% Portfolio receivables, net 60,443 59,043 2.4% Goodwill 717,627 717,624 0.0% Other assets 167,601 170,782 -1.9% Total assets $1,533,295 $1,498,662 2.3% Current liabilities $243,394 $206,295 18.0% Long Term Obligations 175,758 233,245 -24.6% Other liabilities & minority interest 82,472 87,254 -5.5% Stockholders' equity 1,031,671 971,868 6.2% Total liabilities and stockholders equity $1,533,295 $1,498,662 2.3%
SOURCE West Corporation
David Pleiss, Investor Relations of West Corporation, +1-402-963-1500, email@example.com
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