Investor Information

West Corporation Reports Record Fourth Quarter and Full Year 2005 Results

Feb 1, 2006

OMAHA, Neb., Feb 01, 2006 /PRNewswire-FirstCall via COMTEX News Network/ -- West Corporation (Nasdaq: WSTC), a leading provider of outsourced communication solutions, today announced record fourth quarter and full year revenues, operating income, operating margin and net income.

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

                         Three Months Ended         Twelve Months Ended
                            December 31,                December 31,
                                        Percent                    Percent
                         2005      2004  Change    2005     2004    Change
     Revenue           $404.8    $336.7   20.2% $1,523.9  $1,217.4   25.2%
     Operating income   $72.8     $52.5   38.8%   $266.7    $187.9   41.9%
     Net income         $41.5     $30.5   36.2%   $150.3    $113.2   32.9%
     Earnings per
      share (basic)     $0.60     $0.45            $2.18     $1.67
     Earnings per
      share (diluted)   $0.58     $0.43            $2.11     $1.63

"We are pleased to report a strong close to our 2005 fiscal year," said Thomas B. Barker, Chief Executive Officer of West Corporation. "Solid organic growth and the performance of recent acquisitions improved our operating leverage and enabled us to produce record revenues of over $1.5 billion and expand operating margins to 17.5% in 2005. Additionally, our most profitable segments remain our fastest growing."

Consolidated Operating Results

For the fourth quarter ended December 31, 2005, revenues were $404.8 million compared to $336.7 million for the same quarter last year, an increase of 20.2%. Revenue from acquired entities(1) accounted for $33.6 million of this increase. Operating income for the fourth quarter was $72.8 million, an increase of 38.8% versus $52.5 million in the fourth quarter of 2004. Net income was $41.5 million, up 36.2% compared to $30.5 million in the same quarter last year. Diluted earnings per share were $0.58 versus $0.43 in the same period of 2004.

For the fiscal year 2005, revenues were $1,523.9 million compared to $1,217.4 million last year, an increase of 25.2%. Revenue from acquired entities(2) accounted for $195.5 million of this increase. Operating income was $266.7 million, an increase of 41.9% versus $187.9 million in 2004. Net income was $150.3 million, up 32.9% compared to $113.2 million last year. Diluted earnings per share were $2.11 versus $1.63 in 2004.


The company reported consolidated operating margin of 18.0% in the fourth quarter of 2005, up from 15.6% in the comparable quarter last year. The improvement for the quarter is the result of increased revenues in the higher margin Conferencing Services and Receivables Management segments and a short- term Communications Services engagement, completed in the fourth quarter, that contributed $8.6 million of revenue and utilized existing infrastructure.

For 2005, consolidated operating margin was 17.5%, compared to 15.4% in 2004. The improvement for the year is the result of increased revenues in the higher margin Conferencing Services and Receivables Management segments. Additionally, improved infrastructure utilization as a result of the integration of several acquisitions helped reduce SG&A expense as a percentage of revenues.

Balance Sheet

At December 31, 2005, West Corporation had cash and cash equivalents totaling $30.8 million and a current ratio of 1.5 to 1. Net cash flows from operating activities were $92.9 million for the fourth quarter and $279.2 million for the year. As of December 31, 2005, the company had $180 million of capacity available on its bank line of credit.

"During the year, we continued to invest in our business, spending approximately five percent of revenues on capital expenditures to upgrade equipment and infrastructure, as well as expanding facilities in the U.S. and internationally," commented Paul Mendlik, Chief Financial Officer of West Corporation. "During 2005, we added 2,400 workstations, bringing our year-end capacity to approximately 18,200 workstations. In addition, our At Home Agent business continues to gain traction with clients and, as announced last week, we have over 10,000 active contracted agents, which is nearly double our 2004 year-end total of 5,500."

Conference Call

The company will hold a conference call to discuss earnings on Thursday, February 2nd 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 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 28,000 employees based in North America, Europe and Asia.

For more information, please visit .

This press release contains forward-looking statements within the meaning of the federal securities laws relating to West Corporation. West intends these forward-looking statements to be covered by the safe harbor provisions of the federal securities laws. 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. In particular, any projections or estimates regarding West's future revenues, operating margins, expenses, net income, cash flows, capital expenditures, effective tax rates and client behavior, as well as the assumptions underlying or relating to such expectations, are forward-looking statements. These statements reflect only West's current expectations and are not guarantees of future performance or results. These statements involve risks, uncertainties and assumptions that could cause actual results or performance to differ materially from those contained in the forward-looking statements. These risks, uncertainties and assumptions include general economic conditions, the timing, integration and results of the recently announced Intrado transaction, West's ability to integrate or achieve the objectives of recent and future acquisitions, West's ability to complete future acquisitions, West's highly competitive industries, the extensive regulatory environment, West's ability to recover on its charged-off consumer receivables, the 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, 2004 and subsequently filed quarterly reports on Form 10-Q and the prospectus supplement related to West's secondary offering dated October 6, 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) and ECI Conference Call Services LLC
         (acquired in December 2004) in the Conferencing segment.
    (2)  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
      (Unaudited, in thousands except per share and selected operating data)

                                             Three Months Ended December 31,
                                                2005         2004   % Change
    Revenue                                  $404,764     $336,718    20.2%
    Cost of services                          181,908      154,637    17.6%
    Selling, general and administrative
     expenses                                 150,027      129,623    15.7%
    Operating income                           72,829       52,458    38.8%
    Other expense, net                          3,848        1,772   117.2%
    Income before tax                          68,981       50,686    36.1%
    Income tax expense                         24,080       17,618    36.7%
    Minority Interest                           3,375        2,590    30.3%
    Net income                                $41,526      $30,478    36.2%

    Earnings per share:
      Basic                                     $0.60        $0.45    33.3%
      Diluted                                   $0.58        $0.43    34.9%
    Weighted average common shares
      Basic                                    69,594       68,075
      Diluted                                  71,737       70,249

         Communication Services              $229,973     $219,085     5.0%
         Conferencing                         123,421       75,027    64.5%
         Receivables Management                52,778       44,023    19.9%
         Inter segment eliminations            (1,408)      (1,417)   -0.6%
         Total                               $404,764     $336,718    20.2%

    Operating Income:
         Communication Services               $33,527      $31,642     6.0%
         Conferencing                          30,211       13,767   119.4%
         Receivables Management                 9,091        7,049    29.0%
         Total                                $72,829      $52,458    38.8%

    Operating Margin:
         Communication Services                  14.6%        14.4%    1.4%
         Conferencing                            24.5%        18.3%   33.9%
         Receivables Management                  17.2%        16.0%    7.5%
         Total                                   18.0%        15.6%   15.4%

    Number of workstations
    (end of period)                            18,225       15,776    15.5%
    Number of Communication Services
     ports (end of period)                    124,993      137,176    -8.9%

                                            Twelve Months Ended December 31,
                                                2005         2004   % Change
    Revenue                                $1,523,923   $1,217,383    25.2%
    Cost of services                          687,381      541,979    26.8%
    Selling, general and administrative
     expenses                                 569,865      487,513    16.9%
    Operating income                          266,677      187,891    41.9%
    Other expense, net                         13,181        6,368   107.0%
    Income before tax                         253,496      181,523    39.6%
    Income tax expense                         87,736       65,762    33.4%
    Minority Interest                          15,411        2,590   495.0%
    Net income                               $150,349     $113,171    32.9%

    Earnings per share:
      Basic                                     $2.18        $1.67    30.5%
      Diluted                                   $2.11        $1.63    29.4%
    Weighted average common shares
      Basic                                    68,945       67,643
      Diluted                                  71,310       69,469

         Communication Services              $873,975     $817,718     6.9%
         Conferencing                         438,613      302,469    45.0%
         Receivables Management               216,191       99,411   117.5%
         Inter segment eliminations            (4,856)      (2,215)  119.2%
         Total                             $1,523,923   $1,217,383    25.2%

    Operating Income:
         Communication Services              $122,076     $105,638    15.6%
         Conferencing                         105,793       67,264    57.3%
         Receivables Management                38,808       14,989   158.9%
         Total                               $266,677     $187,891    41.9%

    Operating Margin:
         Communication Services                  14.0%        12.9%    8.5%
         Conferencing                            24.1%        22.2%    8.6%
         Receivables Management                  18.0%        15.1%   19.2%
         Total                                   17.5%        15.4%   13.6%

                                            Condensed Balance Sheet
                                          December 31,  December 31,    %
                                               2005         2004      Change
    Current assets:
       Cash and cash equivalents              $30,835      $28,330     8.8%
       Trust cash                               3,727        4,242   -12.1%
    Accounts and notes receivable, net        217,806      195,598    11.4%
       Portfolio receivables, current          35,407       26,646    32.9%
       Other current assets                    28,567       27,244     4.9%
         Total current assets                 316,342      282,060    12.2%
    Net property and equipment                234,871      223,110     5.3%
    Portfolio receivables, net                 59,043       56,897     3.8%
    Goodwill                                  717,624      573,885    25.0%
    Other assets                              170,782      135,254    26.3%
         Total assets                      $1,498,662   $1,271,206    17.9%
    Current liabilities                      $206,295     $157,294    31.2%
    Long Term Obligations                     233,245      238,354    -2.1%
    Other liabilities & minority interest      87,254       86,103     1.3%
    Stockholders' equity                      971,868      789,455    23.1%
       Total liabilities and stockholders
        equity                             $1,498,662   $1,271,206    17.9%

SOURCE West Corporation

David Pleiss, Investor Relations of West Corporation, +1-402-963-1500, or

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