EX-99.1 3 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

 

[LOGO OF WEST COPORATION APPEARS HERE]

 

West Corporation

  AT THE COMPANY:        

11808 Miracle Hills Drive

  Carol Padon        

Omaha, NE 68154

  Investor Relations        
    (402) 963-1500        

 

West Corporation Announces Third Quarter Results and Acquisition of ConferenceCall.com

Company Adds Market Leading Internet Conferencing Solutions Firm

 

(Omaha, NE—October 21, 2003)—West Corporation (NASDAQ: WSTC), a leading provider of outsourced communication solutions, today announced results for the third quarter ended September 30, 2003 and the acquisition of ConferenceCall.com.

 

Financial Summary (unaudited)

 

(In thousands, except per share amounts and percentages)

 

    

Three Months Ended

September 30,


   

Nine Months Ended

September 30,


 
     2003

   2002

   Percent
Change


    2003

   2002

   Percent
Change


 

Revenue

   $ 263,551    $ 199,354    32.2 %   $ 717,296    $ 604,978    18.6 %

Operating Income

     40,438      20,931    93.2 %     105,835      86,917    21.8 %

Net Income

     24,368      13,607    79.1 %     65,325      56,484    15.7 %

Earnings per share (basic)

     0.37      0.21            0.98      0.86       

Earnings per share (diluted)

     0.35      0.20            0.95      0.83       

 

“We are pleased with this quarter’s results and the progress made with the integration of InterCall,” stated Thomas B. Barker, President and Chief Executive

 

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Officer. “Although our Communication Services segment continues to be impacted by a difficult operating environment, it still produced solid numbers this quarter.”

 

Third Quarter Operating Results

 

For the quarter ended September 30, 2003, consolidated revenues increased 32.2% to $263.6 million compared to $199.4 million in the third quarter 2002. The first full quarter of results for the Conferencing segment produced $61.5 million of revenue in the third quarter 2003. Consolidated operating income for the third quarter was $40.4 million, an increase of 93.2% compared to $20.9 million in the same period last year. Consolidated operating income included $12.7 million from the Conferencing segment in 2003. Consolidated net income for the quarter stood at $24.4 million versus $13.6 million in third quarter 2002, an increase of 79.1%. Diluted earnings per share for the third quarter 2003 was 35 cents, versus 20 cents during the same period in 2002.

 

Nine-Month Operating Results

 

For the nine-months ended September 30, 2003, consolidated revenues were $717.3 million, an increase of 18.6% compared to $605.0 million for the same period in 2002. Consolidated operating income increased by 21.8% to $105.8 million in the first nine months of 2003 compared to $86.9 million last year. Consolidated net income was $65.3 million, an increase of 15.6% from $56.5 million in the nine-month 2002 period.

 

“The company generated $147.9 million in cash flow from operating activities during the nine months ended September 30, 2003,” noted Paul Mendlik, Chief Financial Officer of West Corporation. “We expect strong cash flow to continue going forward.”

 

Margins

 

Consolidated operating margins for the third quarter 2003 were 15.3%, compared to 10.5% in the same period last year. For the nine-months ended September 30, 2003, consolidated operating margins were 14.8%, compared to 14.4% in the same period last year. The margin improvement for the nine months ended September 30, 2003, is the result of continued improvements in the Communications Services segment and the addition of the Conferencing segment.

 

In the third quarter of 2003, SG&A as a percent of revenues rose to 41.9% compared to 40.3% last year. For the first nine months of 2003, SG&A as a percent of revenues increased to 40.3% from 37.2% in the comparable period last year. The increase can be attributed to the acquisition of InterCall, Inc. due to its different operating structure, and the mix of overall business completed during the quarter.

 

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Balance Sheet

 

On September 30, 2003, the company reported a solid current ratio of 1.54 to 1 and cash and short-term investments totaling $40.6 million. The company’s total debt was reduced to $198 million at September 30, 2003, due to the payment of $55.7 million of long-term obligations during the quarter.

 

Acquisition Details

 

West has agreed to acquire ConferenceCall.com for approximately $38.5 million net of cash. The acquisition will be funded with cash and the company’s existing bank credit facility. Based in Dallas, Texas, ConferenceCall.com is a provider of conferencing solutions to companies of all sizes through the Internet. The acquisition is expected to close on November 1, 2003.

 

The firm brings proprietary conferencing related URL’s, a strong Internet marketing presence and sophisticated marketing tools to West. ConferenceCall.com will be integrated into InterCall, but will maintain its brand and market presence. West will leverage its infrastructure, technology and operating expertise to improve the operating efficiency of ConferenceCall.com.

 

In 2003, ConferenceCall.com is expected to produce annual revenue of approximately $18.0 million and normalized operating income of approximately $8.0 million, delivering an operating margin of approximately 44%. Given the cyclical nature of the conferencing sector and the approaching holiday season, the acquisition is not expected to contribute to West’s overall net income during the remaining two months of the year, but is expected to be accretive in 2004.

 

Conference Call

 

The company will hold a conference call to discuss earnings on October 22nd at 10:00 AM Central Time. Investors may access the call by visiting the Investor Relations section of the West Corporation website at 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 23,000 employees based in North America, Europe and Asia.

 

 

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For more information, please visit www.west.com.

 

Statements which are not historical facts contained in this release are forward-looking statements that involve risks and uncertainties. Such risks and uncertainties include, but are not limited to: our expected margins, the expected closing date of our announced acquisition of ConferenceCall.com, the expected financial results of ConferenceCall.com and its contribution to our operating results, expected changes in the efficiency and profitability of ConferenceCall.com, planned expansion of operating facilities; labor market conditions; mergers, acquisitions, or joint ventures, including their execution and integration; customer concentrations; technological innovation; and general economic conditions. Actual results could differ materially from those anticipated in these forward-looking statements. Further information regarding the factors that could cause actual results to differ from expected or projected results can be found in documents filed by the Company with the United States Securities and Exchange Commission (the “SEC”).

 

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WEST CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited, in thousands except per share and selected operating data)

 

     Three Months Ended September 30,

   

%

Change


    Nine Months Ended Sept 30,

    %
Change


 
     2003

    2002

      2003

    2002

   

Revenue

   $ 263,551     $ 199,354     32.2 %   $ 717,296     $ 604,978     18.6 %

Cost of services

     112,804       98,103     15.0 %     322,290       293,210     9.9 %

Selling, general and administrative expenses

     110,309       80,320     37.3 %     289,171       224,851     28.6 %
    


 


       


 


     

Operating income

     40,438       20,931     93.2 %     105,835       86,917     21.8 %

Other income (expense), net

     (1,409 )     406     -447.0 %     (1,615 )     1,548     -204.3 %
    


 


       


 


     

Income before tax

     39,029       21,337     82.9 %     104,220       88,465     17.8 %

Income tax expense

     14,661       7,682     90.8 %     38,730       31,778     21.9 %

Minority Interest

     —         48             165       203     -18.7 %
    


 


       


 


     

Net income

   $ 24,368     $ 13,607     79.1 %   $ 65,325     $ 56,484     15.7 %
    


 


       


 


     

Earnings per share:

                                            

Basic

   $ 0.37     $ 0.21           $ 0.98     $ 0.86        

Diluted

   $ 0.35     $ 0.20           $ 0.95     $ 0.83        

Weighted average common shares outstanding:

                                            

Basic

     66,617       65,725             66,411       65,685        

Diluted

     69,026       67,561             68,521       68,313        

SELECTED OPERATING DATA:

                                            

Revenue:

                                            

Communication Services*

   $ 202,072     $ 199,354           $ 621,979     $ 604,978        

Conferencing Services

     61,479       —               95,317       —          
    


 


       


 


     

Total

   $ 263,551     $ 199,354           $ 717,296     $ 604,978        
    


 


       


 


     

Operating Income:

                                            

Communication Services*

   $ 27,708     $ 20,931           $ 85,747     $ 86,917        

Conferencing Services

     12,730       —               20,088       —          
    


 


       


 


     

Total

   $ 40,438     $ 20,931           $ 105,835     $ 86,917        
    


 


       


 


     

Operating Margin:

                                            

Communication Services*

     13.7 %     10.5 %           13.8 %     14.4 %      

Conferencing Services

     20.7 %     —               21.1 %     —          
    


 


       


 


     

Total

     15.3 %     10.5 %           14.8 %     14.4 %      
    


 


       


 


     

Number of Communication Services workstations (end of period)

     14,103       13,827             14,103       13,827        

Number of Communication Services ports
(end of period)

     144,719       143,600             144,719       143,600        
     Condensed Balance Sheet

   

%

Change


                   
     September 30,
2003


    December 31,
2002


                     

Current assets:

                                            

Cash and short-term investments

   $ 40,568     $ 137,927     -70.6 %                      

Trade accounts receivable, net

     147,485       121,868     21.0 %                      

Other current assets

     24,611       29,790     -17.4 %                      
    


 


                           

Total current assets

     212,664       289,585     -26.6 %                      

Property and equipment, net

     242,817       213,641     13.7 %                      

Goodwill

     418,727       114,146     266.8 %                      

Other assets

     107,318       53,450     100.8 %                      
    


 


                           

Total assets

   $ 981,526     $ 670,822     46.3 %                      
    


 


                           

Current liabilities

   $ 138,201     $ 66,322     108.4 %                      

Long Term Obligations

     156,750       17,155     813.7 %                      

Other liabilities & minority interest

     54,652       37,753     44.8 %                      

Stockholders’ equity

     631,923       549,592     15.0 %                      
    


 


                           

Total liabilities and stockholders’ equity

   $ 981,526     $ 670,822     46.3 %                      
    


 


                           

 

 

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