West 8K oration Reports Second Quarter 2007 Results | WSTC 19 Jul 07



West Corporation		AT THE COMPANY:
11808 Miracle Hills Drive		David Pleiss
Omaha, NE 68154		Investor Relations
		(402) 963-1500
		dmpleiss@west.com

West Corporation Reports Second Quarter 2007 Results

OMAHA, NE, July 18, 2007— West Corporation, a leading provider of outsourced communication solutions, today announced its second quarter 2007 results.

Financial Summary (unaudited)
(Dollars in millions)


	Three Months Ended									Six Months Ended
	June 30,									June 30,
							Percent									Percent
	2007			2006			Change			2007			2006			Change
Revenue	$	520.2		$	461.7			12.7	%	$	1,028.8		$	886.4			16.1	%
Adjusted EBITDA¹	$	146.9		$	125.8			16.8	%	$	292.3		$	233.0			25.4	%
Adjusted EBITDA Margin		28.2	%		27.2	%					28.4	%		26.3	%
Cash Flow from Operations	$	45.3		$	97.2			-53.4	%	$	127.2		$	155.3			-18.1	%

“We are pleased with this quarter’s results and the closing of the Omnium acquisition on May 4,” said Thomas B. Barker, Chief Executive Officer of West Corporation.

Consolidated Operating Results
For the second quarter ended June 30, 2007, revenues were $520.2 million compared to $461.7 million for the same quarter last year, an increase of 12.7 percent. Revenue from


¹		See Reconciliation of Financial Measures below.

acquired entities² accounted for $28.7 million of the $58.5 million increase during the second quarter and $100.9 million of the $142.4 million year-to-date increase.

Balance Sheet and Liquidity
At June 30, 2007, West Corporation had cash and cash equivalents totaling $281.3 million and working capital of $189.3 million. Second quarter depreciation expense was $25.8 million and amortization expense was $19.0 million. Cash flow from operating activities was $45.3 million and was impacted by interest expense of $83.5 million. Adjusted EBITDA for the second quarter was $146.9 million, or 28.2 percent of revenue. A reconciliation of adjusted EBITDA to cash flow from operating activities is presented in the Reconciliation of Financial Measures below.

“During the quarter, we invested $25.7 million in capital expenditures primarily for telecom and computer network equipment,” stated Paul Mendlik, Chief Financial Officer of West Corporation. “The Company also expanded its term credit facility by $135 million to fund the Omnium acquisition.”

Conference Call
The Company will hold a conference call to discuss these topics on Thursday, July 19, 2007 at 11:00 AM Eastern Time (10:00 AM Central Time). Investors may access the call by visiting the Financials section of the West Corporation website at 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 28,000 employees based in North America, Europe and Asia. For more information, please visit www.west.com.

Forward Looking Statements
This press release contains forward looking statements. Forward-looking statements can be identified by the use of words such as “may,” “should,” “expects,” “plans,”


²		Acquired entities include InPulse (acquired in October 2006), CenterPost (acquired in February 2007) and TeleVox (acquired in March 2007) in the Communications Services segment and Omnium (acquired May 2007) in the Receivables Management segment.

“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 the ability to integrate or achieve the objectives of our recent acquisitions including Omnium, 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 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 Commission including West’s annual report on Form 10-K for the year ended December 31, 2006 and quarterly report on Form 10-Q for the quarter ended March 31, 2007. 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.

WEST CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited, in thousands except selected operating data)


	Three Months Ended June 30,									Six Months Ended June 30,
	2007			2006			% Change			2007			2006			% Change
Revenue	$	520,186		$	461,678			12.7	%	$	1,028,819		$	886,416			16.1	%
Cost of services		224,306			200,123			12.1	%		443,291			397,414			11.5	%
Selling, general and administrative expenses		206,305			185,052			11.5	%		399,368			341,110			17.1	%

Operating income		89,575			76,503			17.1	%		186,160			147,892			25.9	%
Interest expense		83,465			12,205			583.9	%		163,655			16,426			896.3	%
Other expense (income), net		(4,178	)		(1,421	)		194.0	%		(8,108	)		(1,977	)		310.1	%

Income before tax		10,288			65,719			-84.3	%		30,613			133,443			-77.1	%
Income tax expense		3,519			23,921			-85.3	%		10,927			48,005			-77.2	%
Minority Interest		4,257			4,048			5.2	%		8,155			6,624			23.1	%

Net income	$	2,512		$	37,750			-93.3	%	$	11,531		$	78,814			-85.4	%


SELECTED SEGMENT DATA:
Revenue:
Communication Services	$	264,303		$	248,298			6.4	%	$	536,970		$	477,727			12.4	%
Conferencing		183,651			155,853			17.8	%		359,817			292,717			22.9	%
Receivables Management		73,658			59,020			24.8	%		134,781			119,176			13.1	%
Inter segment eliminations		(1,426	)		(1,493	)		-4.5	%		(2,749	)		(3,204	)		-14.2	%

Total	$	520,186		$	461,678			12.7	%	$	1,028,819		$	886,416			16.1	%


Operating Income:
Communication Services	$	29,002		$	27,048			7.2	%	$	65,300		$	56,172			16.3	%
Conferencing		46,896			39,491			18.8	%		93,594			70,531			32.7	%
Receivables Management		13,677			9,964			37.3	%		27,266			21,189			28.7	%

Total	$	89,575		$	76,503			17.1	%	$	186,160		$	147,892			25.9	%


Operating Margin:
Communication Services		11.0	%		10.9	%		0.9	%		12.2	%		11.8	%		3.4	%
Conferencing		25.5	%		25.3	%		0.8	%		26.0	%		24.1	%		7.9	%
Receivables Management		18.6	%		16.9	%		10.1	%		20.2	%		17.8	%		13.5	%

Total		17.2	%		16.6	%		3.6	%		18.1	%		16.7	%		8.4	%


SELECTED OPERATING DATA ($M):
Share-based compensation expense recognized		0.3			3.7
Cash flow from operations		45.3			97.2
Revolving Line of Credit ending balance		—			690.0
Term loan facility		2,388.4			—
Senior notes		650.0			—
Senior subordinated notes		450.0			—

CONDENSED BALANCE SHEETS


	June 30,			December 31,			%
	2007			2006			Change
Current assets:
Cash and cash equivalents	$	281,286		$	214,932			30.9	%
Trust cash		20,669			7,104			190.9	%
Accounts receivable, net		308,839			285,087			8.3	%
Portfolio receivables, current		56,664			64,651			-12.4	%
Other current assets		51,406			54,382			-5.5	%

Total current assets		718,864			626,156			14.8	%
Net property and equipment		297,083			294,707			0.8	%
Portfolio receivables, net		120,321			85,006			41.5	%
Goodwill		1,284,862			1,186,375			8.3	%
Other assets		541,114			343,612			57.5	%

Total assets	$	2,962,244		$	2,535,856			16.8	%

Current liabilities	$	529,566		$	497,586			6.4	%
Long Term Obligations		3,529,884			3,206,590			10.1	%
Other liabilities		87,015			45,279			92.2	%

Total liabilities		4,146,465			3,749,455			10.6	%

Minority interest		10,988			10,299			6.7	%
Class L common stock		969,285			903,656			7.3	%

Stockholders’ deficit		(2,164,494	)		(2,127,554	)		1.7	%

Total liabilities and stockholders’ deficit	$	2,962,244		$	2,535,856			16.8	%

Reconciliation of Financial Measures

The common definition of EBITDA is “Earnings Before Interest Expense, Taxes, Depreciation and Amortization.” In evaluating liquidity, we use Adjusted EBITDA, which we define as earnings before interest expense, taxes, depreciation and amortization, share based compensation, minority interest, recapitalization transaction costs, after acquisition synergies and excluding unrestricted subsidiaries. EBITDA and Adjusted EBITDA are not measures of financial performance or liquidity under generally accepted accounting principles (“GAAP”). EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitution for net income, cash flow from operations or other income or cash flow data prepared in accordance with GAAP. Adjusted EBITDA, as presented, may not be comparable to similarly titled measures of other companies. Adjusted EBITDA is presented as we understand certain investors use it as one measure of our historical ability to service debt. Adjusted EBITDA is also used in our debt covenants. Set forth below is a reconciliation of EBITDA and adjusted EBITDA to cash flow from operations.


*Amounts in thousands*	Three Months Ended June 30,						Six Months Ended June 30,
	2007			2006			2007			2006
Cash flow from operating activities	$	45,255		$	97,153		$	127,183		$	155,344
Income tax expense		3,519			23,921			10,927			48,005
Deferred income tax (expense) benefit		4,008			(21,114	)		(2,682	)		(17,480	)
Interest expense		83,465			12,205			163,655			16,426
Minority interest in earnings, net of distributions		(969	)		579			(689	)		3,138
Provision for share based compensation		(319	)		(3,663	)		(629	)		(7,287	)
Debt amortization		(3,657	)		(218	)		(7,408	)		(433	)
Other		(5	)		(102	)		432			(136	)
Changes in operating assets and liabilities, net of business acquisitions		2,963			884			(22,081	)		9,665

EBITDA		134,260			109,645			268,708			207,242
Minority interest		4,257			4,048			8,155			6,624
Provision for share based compensation		319			3,663			629			7,287
Recapitalization costs		4,443			3,000			8,575			5,000
Synthetic lease interest		—			483			—			896
Acquisition synergies		2,475			3,900			4,237			3,900
Vertical Alliance Adjustment		1,113			1,057			1,948			2,057

Adjusted EBITDA	$	146,867		$	125,796		$	292,252		$	233,006

West (WSTC) Inactive 8-KWest Corporation Reports Second Quarter 2007 Results