CSG Systems International, Inc. Reports Third Quarter 2007 Results.Revenues of $107.6 Million; Income from Continuing Operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $0.39 Per Share ENGLEWOOD, Colo. -- CSG CSG - constructive solid geometry Systems International, Inc. (Nasdaq: CSGS CSGS Computer Systems Group Software ), a leading provider of customer care and billing solutions, today reported results for the quarter ended September 30, 2007. Third Quarter 2007 Highlights: * Results from continuing operations were as follows: total revenues were $107.6 million; operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. was $21.6 million; and income from continuing operations was $15.2 million, or $0.39 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. * CSG's third quarter results include the impact of the acquired Prairie prairie Level or rolling grassland, especially that found in central North America. Decreasing amounts of rainfall, from 40 in. (100 cm) at the forested eastern edge to less than 12 in. Interactive Messaging (Prairie) business, which was not included in CSG's previous financial guidance for the quarter. Additionally, income from continuing operations includes a benefit of $0.02 per diluted share when compared to CSG's previous guidance expectations as a result of lower outstanding shares for the quarter due to higher than expected stock repurchases Stock repurchase A firm's repurchase of outstanding shares of its common stock. during the quarter. Absent the impact of these items, CSG's revenue and earnings per diluted share were within the range of CSG's financial guidance for the quarter. * Cash flows from operations for the quarter were $35.7 million, which came in above CSG's expectations of $30-32 million for the quarter, primarily due to normal changes in certain operating assets Operating Assets Another term for working capital. and liabilities for the quarter. * For the quarter, CSG repurchased 5.6 million shares of its common stock for $129.7 million (weighted-average price of $23.34 per share) under its stock repurchase program. * On July 9, 2007, CSG completed its acquisition of ComTec, Inc. (ComTec), a provider of statement processing solutions headquartered in Fairfield, New Jersey. * On August 10, 2007, CSG closed on its acquisition of Prairie Voice Services, Inc., a provider of interactive messaging services headquartered in Omaha, Nebraska “Omaha” redirects here. For other uses, see Omaha (disambiguation). Omaha is the largest city in the State of Nebraska, United States. It is the county seat of Douglas County.GR6 As of the 2000 census, the city had a population of 390,007. , and renamed the company Prairie Interactive Messaging, Inc. "Every day, CSG plays a critical role in our clients' success by helping them interact with their customers in meaningful, efficient and cost-effective ways," said Ed Nafus, chief executive officer and president of CSG Systems International, Inc. "As our clients' businesses expand in an increasingly competitive environment, CSG continuously seeks innovative ways to help clients improve levels of customer service and deploy new products and services. During the third quarter, we furthered our progress on this front by closing two strategic acquisitions, ComTec and Prairie Interactive Messaging. With these acquisitions, CSG gained capabilities that extend and complement our core offerings, while creating a path for CSG to grow its presence in new industries." Summary GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). Results of Operations Information (unaudited) (in thousands, except per share amounts and percentages): [TABLE OMITTED] Third Quarter 2007 Results From Continuing Operations Revenues. Total revenues for the third quarter of 2007 were $107.6 million, which represents an increase of nine percent when compared to $98.5 million for the same period in 2006, and an increase of eight percent when compared to $99.5 million for the second quarter of 2007. A significant portion of the increase in revenue in the third quarter, when compared to these prior quarters, relates primarily to the ComTec and Prairie businesses acquired by CSG during the third quarter. The components of total revenues were as follows: * processing revenues for the third quarter of 2007 were $97.8 million, an increase of eight percent when compared to $90.3 million for the same period last year, and the second quarter of 2007. The revenues of ComTec and Prairie fall within this revenue classification, which accounts for a significant portion of the increase over the prior periods; and * software, maintenance and services revenues were $9.8 million for the current quarter, a 20 percent increase when compared to $8.2 million for the same period last year, and a seven percent increase when compared to $9.2 million for the second quarter of 2007. Due to the timing of the transaction, CSG's financial guidance for the third quarter of 2007 did not include the impact of Prairie, which is discussed in further detail below. As a result, excluding the Prairie results, revenues were approximately $105 million, which is within the range of CSG's previous financial guidance of $105 - $107 million for the quarter. Results of Operations. Income from continuing operations presented in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("GAAP") for the third quarter of 2007 was $15.2 million ($0.39 per diluted share), compared to $17.4 million ($0.37 per diluted share) for the same period last year, and $15.6 million ($0.37 per diluted share) for the second quarter of 2007. CSG's income from continuing operations of $0.39 per diluted share for the current quarter includes a benefit of $0.02 per diluted share when compared to CSG's previous guidance expectations as a result of lower outstanding shares for the quarter due to higher than expected stock repurchases during the quarter. Absent the impact of this $0.02 benefit, CSG's earnings per diluted share were within the range of CSG's previous financial guidance of $0.36 - $0.38 per diluted share for the quarter. Supplemental Data The following information is provided to assist readers in further evaluating CSG's performance (in thousands, except per share amounts): [TABLE OMITTED] [TABLE OMITTED] (1) These items (on a pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern basis) are calculated in accordance with GAAP, and are reflected as part of continuing operations in the accompanying Unaudited Condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. Consolidated Statements of Income. (2) This represents the after tax impact to income from continuing operations on a per diluted share basis using CSG's effective income tax rates from continuing operations of approximately 36% for the three and nine months ended September 30, 2007, and 35% and 37%, respectively, for the three and nine months ended September 30, 2006. Total customer accounts processed on CSG's systems as of September 30, 2007, were 45.1 million, consistent with the number of customer accounts processed as of June 30, 2007. Prairie Interactive Messaging Acquisition On August 10, 2007, CSG closed on its acquisition of Prairie Voice Services, Inc., a privately-held provider of interactive messaging services headquartered in Omaha, Nebraska, for approximately $41 million in net cash. In addition, the merger agreement provides for contingent payments of up to $6 million through the end of 2009 upon the achievement of certain predetermined pre·de·ter·mine v. pre·de·ter·mined, pre·de·ter·min·ing, pre·de·ter·mines v.tr. 1. To determine, decide, or establish in advance: operating criteria. In connection with the purchase, CSG and Prairie agreed to rename Re`name´ v. t. 1. To give a new name to. Verb 1. rename - assign a new name to; "Many streets in the former East Germany were renamed in 1990" the company Prairie Interactive Messaging, Inc., which operates as a wholly-owned CSG company. CSG acquired Prairie to extend its suite of products and solutions to help its clients maximize the value of interactions with their customers with a set of unified, interactive messaging solutions that can interact with customers through outbound out·bound adj. Outward bound; headed away: outbound trains. Adj. 1. outbound - that is going out or leaving; "the departing train"; "an outward journey"; "outward-bound ships" and inbound in·bound 1 adj. Bound inward; incoming: inbound commuter traffic. Adj. 1. inbound automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. voice, text/SMS, e-mail and fax messages. Additionally, this acquisition extends CSG's reach into industry verticals such as financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. , direct response, and contact centers. Financial Condition and Cash Flows Certain key balance sheet items as of the end of the indicated periods are as follows (in thousands): [TABLE OMITTED] Certain key operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. items for the indicated quarters then ended are as follows (in thousands): [TABLE OMITTED] (3) The sequential decrease of approximately $161 million between June 30, 2007, and September 30, 2007, is primarily due to $129.7 million of stock repurchases made during the quarter and total net cash paid of approximately $63 million for the ComTec and Prairie acquisitions, offset by cash generated from operations of $35.7 million. Stock Repurchase Program During the third quarter of 2007, CSG repurchased 5.6 million shares of its common stock for $129.7 million (a weighted-average price of $23.34 per share) under its stock repurchase program. Through September 30, 2007, CSG has purchased 12.0 million shares for a total of $295.0 million (a weighted-average price of $24.70 per share) towards its planned $350 million stock repurchases announced in August 2006. Fourth Quarter 2007 and Full Year 2007 Financial Guidance A summary of CSG's financial guidance for continuing operations for the fourth quarter and full year 2007 is as follows (in millions, except for per share amounts and percentages). These amounts include the expected GAAP financial impact of the acquired ComTec and Prairie businesses. [TABLE OMITTED] There are certain non-cash items included in CSG's fourth quarter and full year 2007 income from continuing operations per diluted share guidance noted above. The following table outlines the expected impact of these items, and is provided to assist readers in further evaluating CSG's expected financial performance for these periods (in thousands, except per share amounts): [TABLE OMITTED] (4) These items (on a pretax basis) are calculated in accordance with GAAP and take into account estimates related to the ComTec and Prairie acquisitions. (5) This represents the after tax impact to income from continuing operations on a per diluted share basis using CSG's estimated effective income tax rates from continuing operations as noted above. Conference Call CSG will host a one-hour conference call on Tuesday, October 23, at 5 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT , to discuss CSG's third quarter results. The call will be carried live and archived on the Internet. A link to the conference call is available at www.csgsystems.com. Additional Information For additional information about CSG, please visit CSG's web site at www.csgsystems.com. Additional information can be found in the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of the web site. About CSG Systems International Headquartered in Englewood, Colorado Englewood is a city in Arapahoe County, Colorado, USA. As of 2005, the city is estimated to have a total population of 32,350.[5] It is part of the Denver-Aurora Metropolitan Area. , CSG Systems International (Nasdaq: CSGS) is a leading provider of outsourced billing, customer care and print and mail solutions and services supporting the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. cable and direct broadcast satellite markets. CSG's solutions support some of the world's largest and most innovative providers of bundled multi-channel video, Internet, voice and IP-based services. CSG's unique combination of solutions, services and expertise ensure that cable and satellite operators can continue to rapidly launch new service offerings, improve operational efficiencies and deliver a high-quality customer experience in a competitive and ever-changing marketplace. CSG is a S&P Midcap mid·cap adj. 1. Or or relating to corporations whose retained earnings and outstanding shares of common stock have a value between those of small cap companies and large cap corporations. 2. 400 company. For more information, visit our website at www.csgsystems.com. Safe-Harbor Statement This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. as defined under the Securities Act of 1933, as amended, that are based on assumptions about a number of important factors and involve risks and uncertainties that could cause actual results to differ materially from what appears in this news release. These factors include, but are not limited to: 1) CSG's ability to continue to perform satisfactorily and maintain good customer relations with its four largest clients, Comcast Corporation, Echostar Communications, Time Warner, Inc., and Charter Communications Charter Communications NASDAQ: CHTR is an American company providing cable television, high-speed Internet, and telephone services to more than 5.7 million customers in 29 states. It is the third-largest publicly traded cable operator in the U.S. , which combined make up approximately 70% of CSG's revenues; 2) the continued acceptance of CSG's Advanced Convergent Platform and its related products and services; 3) CSG's ability to enhance current products and develop new technology that will retain existing clients and capture new market share; 4) significant forays into new markets, which may prove costly and unprofitable; 5) the degree to which CSG's expectations of market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" and consumer acceptance of advanced IP services prove true -- and even if realized, CSG's ability to meet the billing and customer care needs of those markets; 6) client consolidation, which has decreased the number of potential buyers for many of CSG's products and services; 7) CSG's ability to renew contracts and sell additional products and services to existing and new clients; 8) CSG's ability to successfully deliver on lengthy and/or complex implementation projects, which by their nature, carry much more risk; and 9) CSG's ability to successfully integrate and manage acquired businesses or assets in order to achieve the expected strategic, operating and financial goals established for such acquisitions. This list is not exhaustive and readers are encouraged to review the additional risks and important factors described in CSG's reports on Forms 10-K and 10-Q and other filings made with the SEC. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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