West Corporation
Oct 20, 2004

West Corporation Announces Third Quarter Results

Worldwide Acquisition Increases Profitability

OMAHA, Neb., Oct 20, 2004 /PRNewswire-FirstCall via COMTEX/ -- West Corporation (Nasdaq: WSTC), a leading provider of outsourced communication solutions, today announced results for the quarter ended September 30, 2004.

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

                      Three Months Ended            Nine Months Ended
                         September 30                  September 30
                        2004      2003   Percent      2004      2003  Percent
                                          Change                       Change
     Revenue        $307,613  $263,551     16.7%  $880,6650 $717,296    22.8%
     Operating
      income          47,696    40,438     17.9%   135,433   105,835    28.0%
     Net income       28,511    24,368     17.0%    82,693    65,325    26.6%
     Earnings per
      share (basic)     0.42      0.37                 1.23     0.98
     Earnings per
      share (diluted)   0.41      0.35                 1.19     0.95

"We are pleased by the performance of each of our business segments," noted Thomas B. Barker, Chief Executive Officer. "Revenues for the Communication Services and Conferencing segments continued to trend higher during the quarter. The Receivable Management segment benefited from the recent acquisition of Worldwide."

Operating Results

Consolidated revenue for the third quarter of 2004 increased 16.7% to $307.6 million from $263.6 million in the same quarter last year. The company reported consolidated operating income of $47.7 million for the quarter, 17.9% higher than $40.4 million in the third quarter of 2003. Consolidated net income for the third quarter of 2004 was $28.5 million, a 17.0% increase when compared to net income of $24.4 million in last year's third quarter. This translated into diluted earnings per share of $0.41, higher than $0.35 earned in the same period of 2003.

Revenues for the nine months ended on September 30, 2004 also increased significantly from $717.3 million to $880.7 million, a 22.8% increase. During the same nine-month period, the company reported operating income of $135.4 million, 28.0% higher than $105.8 million in the comparable period of 2003. Net income rose 26.6% to $82.7 million in the nine-month period of 2004, from $65.3 million for the same period of 2003.

Margins

The company reported consolidated operating income as a percentage of revenue of 15.5% in the third quarter of 2004, up from 15.3% in the comparable quarter last year. During the first nine months of 2004, operating income as a percentage of revenues was 15.4%, compared to 14.8% for the nine months ended September 30, 2003. The operating margins reflect continued improvements in the Conferencing segment and the addition of Worldwide Asset Management.

Balance Sheet

At the end of the third quarter 2004, West Corporation maintained a solid current ratio of 1.5 to 1. At September 30, 2004, the company had cash and cash equivalents totaling $34.1 million, up from $25.6 million at December 31, 2003. Additionally, West continues to have $170 million of cash available from its revolving line of credit.

"Our recent acquisition of Worldwide contributed $24.2 million to the revenue growth of the quarter and helped us drive operating income margins of 21.4% for the receivable management segment," commented Paul Mendlik, Chief Financial Officer of West. "At the end of the quarter, we had 14,765 workstations in operation, including 2,343 international workstations. We converted two outbound call centers and 800 workstations to inbound use during the quarter. In addition, we have approximately 3,400 'West at Home' agents. The acquisition of Worldwide added 490 workstations during the quarter."

Conference Call

The company will hold a conference call to discuss earnings on October 21st 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, 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. For example, the statement of our progress against our 2004 financial projections 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 as well as other risks can be found in documents filed by the company with the United States Securities and Exchange Commissions (the "SEC") including but not limited to our annual reports on Form 10K for the year ended December 31, 2003, and subsequently filed reports. 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          Nine Months Ended
                        September 30,               September 30,
                                           %                          %
                        2004      2003   Change     2004      2003  Change
    Revenue         $307,613 $ 263,551    16.7% $880,665  $717,296   22.8%
    Cost of services 137,858   112,804    22.2%  387,342   322,290   20.2%
    Selling, general
     and
     administrative
     expenses        122,059   110,309    10.7%  357,890   289,171   23.8%
    Operating income  47,696    40,438    17.9%  135,433   105,835   28.0%
    Other expense,
     net              (2,687)   (1,409)   90.7%   (4,596)   (1,615) 184.6%
    Income before tax 45,009    39,029    15.3%  130,837   104,220   25.5%
    Income tax
     expense          16,498    14,661    12.5%   48,144    38,730   24.3%
    Minority Interest    -         -                 -         165 -100.0%
    Net income       $28,511   $24,368    17.0%  $82,693   $65,325   26.6%

    Earnings per share:
      Basic            $0.42     $0.37             $1.23   $ 0.98
      Diluted          $0.41     $0.35             $1.19   $ 0.95
    Weighted average
     common shares
     outstanding:
      Basic           67,621    66,617            67,459   66,411
      Diluted         69,488    69,026            69,310   68,521

    SELECTED OPERATING DATA:

    Revenue:
      Communication
       Services     $197,587  $193,074          $598,092 $596,281
      Conferencing    75,251    61,479           227,185   95,317
      Receivable
       Management     34,775     8,998            55,388   25,698
      Total         $307,613  $263,551          $880,665 $717,296

    Operating Income:
      Communication
       Services      $22,082   $27,543           $73,708  $84,961
      Conferencing    18,161    12,730            53,242   20,088
      Receivable
       Management      7,453       165             8,483      786
      Total          $47,696   $40,438          $135,433 $105,835
                         -         -                 -
    Operating Margin:
      Communication
       Services        11.2%     14.3%             12.3%    14.2%
      Conferencing     24.1%     20.7%             23.4%    21.1%
      Receivable
       Management      21.4%      1.8%             15.3%     3.1%
      Total            15.5%     15.3%             15.4%    14.8%

    Number of
     workstations
     (end of period)  14,765    14,103            14,765   14,103
    Number of
     Communication
     Services ports
     (end of period) 135,822   144,719           135,822  144,719


                                           Condensed Balance Sheet
                                            Unaudited in thousands
                                         September 30,  December 31,     %
                                              2004          2003      Change
    Current assets:
       Cash and cash equivalents               $34,116       $25,563    33.5%
       Accounts receivable, net                179,449       153,428    17.0%
       Portfolio receivables, current           40,156           -
       Other current assets                     24,445        23,423     4.4%
         Total current assets                  278,166       202,414    37.4%
    Net property and equipment                 214,750       234,650    -8.5%
    Portfolio receivables, net                  37,091           -
    Goodwill                                   538,876       452,848    19.0%
    Other assets                               125,479       125,951    -0.4%
         Total assets                       $1,194,362    $1,015,863    17.6%
    Current liabilities                       $189,413      $121,621    55.7%
    Long Term Obligations                      182,500       169,500     7.7%
    Other liabilities & minority interest       75,460        68,504    10.2%
    Stockholders' equity                       746,989       656,238    13.8%
       Total liabilities and
        stockholders' equity                $1,194,362    $1,015,863    17.6%



    "EBITDA" is defined as income before income tax expense and
    minority interest, depreciation, interest income, interest expense
    and amortization.  EBITDA is not intended to represent cash flow
    from operations as defined by generally accepted accounting
    principles and should not be considered as an alternative to net
    income as an indicator of operating performance or to cash flows
    as a measure of liquidity.  EBITDA is presented as the Company
    understands that certain investors use it as one measure of a
    borrower's historical ability to service its debt.  The following
    is a reconciliation of EBITDA to net income:

                  Amounts in thousands
                  Three Months Ended
                   September 30,                      2004              2003
                         Net Income                $28,511           $24,368
                         Interest Expense            3,547             1,972
                         Depreciation &
                          Amortization              24,600            23,740
                         Interest Income              (189)              (25)
                         Income Taxes               16,498            14,661
                                                   $72,967           $64,716


                  Nine Months Ended
                   September 30,                      2004              2003
                         Net Income                $82,693           $65,325
                         Minority
                          Interest                     -                 165
                         Interest Expense            6,613             3,645
                         Depreciation &
                          Amortization              73,347            62,300
                         Interest Income              (475)             (652)
                         Income Taxes               48,144            38,730
                                                  $210,322          $169,513

SOURCE West Corporation

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

Copyright (C) 2004 PR Newswire. All rights reserved.

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