SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Month of April 2005
GENESYS S.A.
(Exact name of registrant as specified in its charter)
L'Acropole, 954-980 avenue Jean Mermoz, 34000 Montpellier, FRANCE
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):____
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):____
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-_______________.
Genesys Conferencing Reports
Q4 and 2004 Financial Results
Reston, Virginia, and Montpellier, France – April 6, 2005 – Genesys Conferencing (Euronext FR0004270270) (NASDAQ: GNSY), a global multimedia conferencing service leader, today reported financial results for the fourth quarter and fiscal year ended December 31, 2004. All results are reported under French Generally Accepted Accounting Principles (GAAP).
Q4 2004 Highlights
• | Revenue was €33.81 million stable with Q4 2003, based on a fixed currency rate of exchange | |||
• | In US dollars, revenue was $43.9 million, up 4.5% compared to Q4 2003 | |||
• | Total volume up 25.1% compared to Q4 2003, to 404.5 million minutes | |||
• | Genesys Meeting Center volume up 31.8% compared to Q4 2003, to 370.8 million minutes | |||
• | Volume based on Multimedia Minute pricing up 70.3% from Q3 2004, to 56.8 million minutes | |||
• | Gross margin was 63.7% | |||
• | EBITDA2, excluding restructuring and non-recurring charges, was €6.9 million | |||
• | EBITDA margin was 20.3% | |||
“Genesys is uniquely positioned to drive the fast-moving and expanding market for multimedia conferencing services,” stated Francois Legros, Chairman and CEO. “Our advanced multimedia services, unmatched global presence and competitive Multimedia Minute flat-rate, usage-based pricing strategy make our value proposition highly compelling to large enterprise customers.”
Revenue & Volume Summary
(millions) |
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| Revenue USD(1) |
| Revenue EUR |
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| Revenue USD(1) |
| Revenue EUR |
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Q4 2004 | $ 33.9 |
| € 33.8 |
| Full Year 2004 | $ 172.9 |
| € 139.0 |
Q4 2003 | $ 42.0 |
| € 35.3 |
| Full Year 2003 | $ 180.4 |
| € 159.5 |
Change % | 4.5% |
| -4.1% |
|
| -3.8% |
| -12.8% |
(millions of minutes) |
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| |
| Genesys Meeting Center Volume |
| Total Volume |
|
| Genesys Meeting Center Volume |
| Total Volume |
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Q4 2004 | 370.8 |
| 404.5 |
| Full Year 2004 | 1,356.2 |
| 1,507.9 |
Q4 2003 | 281.4 |
| 323.4 |
| Full Year 2003 | 1,094.6 |
| 1,308.1 |
Change % | 31.8% |
| 25.1% |
|
| 23.9% |
| 15.3% |
Fourth Quarter 2004 Operating Performance
In the fourth quarter of 2004, revenue was €33.8 million. Adjusting fourth quarter 2004 for the same exchange rate as in the fourth quarter of 2003, revenue was €35.4 million and, as expected, stable with revenue of €35.3 in the fourth quarter of 2003. During the fourth quarter, revenue from Genesys Meeting Center services reached 79.4% of total sales compared to 72.4% in the fourth quarter of 2003. Full year 2004 revenue was €139.0 million compared to full year 2003 revenue of €159.5 million.
Gross margin for the fourth quarter of 2004 was 63.7% compared to 65.1% for the fourth quarter of 2003 and reflects a higher percentage of revenue from high-volume, large enterprise customers which traditionally have lower margins. Full year 2004 gross margin was 61.9% compared to 64.3% in 2003.
Selling, general and administrative expenses, excluding restructuring and non-recurring charges, were €17.0 million in the fourth quarter of 2004, down 12.8% compared to €19.5 million in the fourth quarter of 2003. The improvement in selling, general and administrative expenses was largely attributable to the company’s cost-reduction initiatives completed in the second half of 2004.
Earnings before interest, taxes, depreciation and amortization (EBITDA2),before restructuring and non-recurring charges, was €6.9 million for the fourth quarter 2004 and was stable compared to EBITDA in the fourth quarter of 2003. As expected, the EBITDA margin was 20.3% for the fourth quarter, a slight increase from the EBITDA margin of 19.8% in the fourth quarter of 2003. The full year 2004 EBITDA margin was 17.4% compared to 22.9% in 2003.
Net loss for the fourth quarter of 2004 was down to €45,000 compared to a net loss of €34.3 million for the fourth quarter of 2003. For the twelve months ended December 31, 2004, the company reported a net loss of €67.4 million compared to a net loss of €36.5 million in 2003. Annual net losses include non-cash reductions in the carrying value of intangible and other long-lived assets of €57.3 million and €33.0 million in the second quarter of 2004 and in the fourth quarter of 2003, respectively.
As of December 31, 2004, net cash3 was €6.4 million, down from €12.9 million at September 30, 2004, primarily due to scheduled semi-annual payments of principal and interest under the company credit facility. For the full year, the company repaid €19.9 million of total debt.
“Operating margins reached their highest level in twelve months, a direct result of our increased volume growth in the second half of 2004 and the benefits of our highly cost-efficient Genesys Meeting Center multimedia technology platform,” stated Mike Savage, Executive Vice President and Chief Financial Officer.
Guidance 2005
The following contains forward-looking guidance regarding Genesys Conferencing’s financial outlook and is based on current expectations. Actual results may differ materially, and the company may not update any forward-looking statements made in this press release.
In 2005, the company expects the following:
- Revenue will be in the range of €140 to €145 million
- EBITDA will be in the range of €23 million to €26 million
“We expect 2005 results will positively reflect our competitive differentiation within the large enterprise market,” added Legros. “Large enterprise customers will further benefit from our planned expansion of our geographical distribution and the introduction of customizable multimedia conferencing solutions.”
Guidance is based on a fixed currency rate of exchange of EUR 1.00 = USD 1.25, similar to the average exchange rate for 2004. In 2005, the Company is required to transition to International Financial Reporting Standards (IFRS). The Company does not believe there will be a significant difference between these standards and French GAAP for revenue and EBITDA, excluding stock-based compensation expense.
Conference Call and Webcast
Chief Executive Officer François Legros and Executive Vice President/Chief Financial Officer Michael E. Savage will host a conference call on Wednesday, April 6, 2005, at 5:30 p.m. Central European Time or 11:30 a.m. Eastern Time to discuss 2005 financial results.
The conference call will be webcast live and may be accessed at www.genesys.com. A replay of the call will be available at www.genesys.com.
____________
(1) | Amounts were calculated using the average quarterly exchange rate. |
| |
(2) | EBITDA and EBITDA before restructuring and non-recurring expenses. See attached note to consolidated statements of operations for reconciliation of Operating Income and EBITDA. We believe that EBITDA and EBITDA before restructuring and non-recurring expenses are meaningful measures of performance, because they present our results of operations without the potentially volatile impact (which can be substantial) of goodwill impairment, the non-cash impacting nature of depreciation and amortization, and the restructuring and non-recurring charges incurred with events that do not reflect normal operations. | ||
| (3) | Net cash is equivalent to cash and cash equivalents less bank overdrafts. | ||
Impact of Exchange Rates
The company serves large enterprises on a worldwide basis. As a result, the company has extensive international operations and, thus, significant exposure to exchange rate fluctuations, in particular those of the U.S. dollar. In 2003, the U.S. dollar declined significantly compared to the euro, and its value further declined during 2004. As a result, the comparability of the company’s revenues and results of operations expressed in euros were significantly impacted. The company prepares its consolidated financial statements in euros. In order to demonstrate the impact of the decline of the U.S. dollar on its revenues from the fourth quarter of 2003 to the fourth quarter of 2004, the company has recalculated its revenues as if its functional currency had been the U.S. dollar rather than the euro. For this purpose, the company has used the average for each quarter of the daily euro/U.S. dollar exchange rate for the fourth quarters of 2003 and 2004, respectively, which are the rates it used for translation purposes in its consolidated income statement.
Forward-Looking Statements
This release contains statements that constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements other than historical information or statements of current condition. These statements appear in a number of places in this release and include statements concerning the parties' intent, belief or current expectations regarding future events and trends affecting the parties' financial condition or results of operations. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those in the forward-looking statements as a result of various factors. Some of these factors are described in the Form 20-F that was filed by Genesys with the Securities and Exchange Commission on April 28, 2004. Although management of the parties believe that their expectations reflected in the forward-looking statements are reasonable based on information currently available to them, they cannot assure you that the expectations will prove to have been correct. Accordingly, you should not place undue reliance on these forward-looking statements. In any event, these statements speak only as of the date of this release. Except to the extent required by law, the parties undertake no obligation to revise or update any of them to reflect events or circumstances after the date of this release, or to reflect new information or the occurrence of unanticipated events.
About Genesys Conferencing
Genesys Conferencing is a leading provider of integrated Web, voice and video conferencing services to over 500,000 users worldwide, including users at nearly 200 of the Global Fortune 500 companies. The company’s services are designed to meet the full range of communication needs within the global enterprise, from small, collaborative team meetings to large, high profile online events. The company’s flagship product, Genesys Meeting Center, provides a single-platform multimedia conferencing solution that is easy to use and available on demand. With offices in 21 countries across North America, Europe and Asia Pacific, the company offers an unmatched global presence and strong local support. Genesys Conferencing is listed on the Nouveau Marché in Paris (Euronext FR0004270270) and Nasdaq (GNSY). Additional information is available at www.genesys.com.
| At Genesys Conferencing | ||
| Michael E. Savage | Marine Pouvreau | |
| Executive Vice President and Chief Financial Officer | Investor Relations Manager | |
| Phone: +1 703 736 7100 | Phone: +1 703 733 2140 | |
| mike.savage@genesys.com | marine.pouvreau@genesys.com | |
Genesys Conferencing
French GAAP Consolidated Balance Sheets
(in thousands of Euros)
ASSETS |
| At December 31, | ||
|
| 2003 |
| 2004 |
Fixed assets |
|
|
|
|
Goodwill, net |
| €54 992 |
| €16 608 |
Intangible assets, net |
| 47 504 |
| 19 461 |
Tangible assets, net |
| 22 014 |
| 17 097 |
Financial assets, net |
| 1 255 |
| 1 215 |
Investments in affiliated companies |
| 141 |
| 212 |
Total fixed assets |
| 125 906 |
| 54 593 |
Current assets |
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|
Inventory |
| 29 |
| 21 |
Accounts receivable, less allowances (€ 2,537 |
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|
|
and € 2,100 at December 31, 2003 and 2004, respectively) |
| 30 206 |
| 27 783 |
Deferred tax assets |
| 840 |
| 448 |
Other current assets |
| 10 600 |
| 6 002 |
Prepaid expenses and deferred charges |
| 4 858 |
| 3 242 |
Marketable securities |
| 9 614 |
| 15 |
Cash at bank |
| 12 094 |
| 8 550 |
Total current assets |
| 68 241 |
| 46 061 |
Total assets |
| €194 147 |
| €100 654 |
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LIABILITIES AND SHAREHOLDERS' EQUITY |
| At December 31, | ||
|
| 2003 |
| 2004 |
Shareholders' Equity |
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Ordinary shares, nominal value of € 1 per share at Dec. |
| €18 308 |
| €18 308 |
Common shares to be issued |
| 140 |
| 139 |
Additional paid-in capital |
| 185 080 |
| 185 080 |
Additional paid-in capital to be issued |
| 3 844 |
| 3 852 |
Accumulated deficit |
| (137 950) |
| (174 472) |
Net loss for the period |
| (36 544) |
| (67 416) |
Currency translation adjustments |
| 15 945 |
| 23 417 |
Total shareholders' equity |
| 48 823 |
| (11 092) |
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Provisions for risks and charges |
| 5 558 |
| 3 520 |
Long-term debt |
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Long-term portion of long term debt |
| 82 445 |
| 64 713 |
Long-term portion of capitalized lease obligations |
| 298 |
| 61 |
Total long-term debt |
| 82 743 |
| 64 774 |
Current liabilities |
|
|
|
|
Bank overdrafts |
| 3 850 |
| 2 173 |
Accounts payable and accrued liabilities |
| 14 353 |
| 13 840 |
Tax payable and deferred compensation |
| 15 611 |
| 13 146 |
Current portion of long-term debt |
| 19 144 |
| 12 391 |
Current portion of capitalized lease obligations |
| 572 |
| 407 |
Deferred revenue |
| 88 |
| 30 |
Other liabilities |
| 3 405 |
| 1 465 |
Total current liabilities |
| 57 023 |
| 43 452 |
Total liabilities and shareholders' equity |
| €194 147 |
| €100 654 |
Genesys Conferencing
French GAAP Consolidated Statements of Operations
(in thousands of Euros, except share data)
| Three Months ended December 31, |
| Twelve Months ended December 31, | ||
| 2003 | 2004 |
| 2003 | 2004 |
Revenue |
|
|
|
|
|
Services | € 35 233 | € 33 784 |
| € 159 155 | € 138 762 |
Products | 50 | 50 |
| 345 | 276 |
| 35 283 | 33 834 |
| 159 500 | 139 038 |
Cost of Revenue |
|
|
|
|
|
Services | 12 320 | 12 242 |
| 56 736 | 52 961 |
Products | 8 | 34 |
| 207 | 83 |
| 12 328 | 12 276 |
| 56 943 | 53 044 |
Gross Profit | 22 955 | 21 558 |
| 102 557 | 85 994 |
Operating expenses |
|
|
|
|
|
Research and development expenses | 1 055 | 798 |
| 4 183 | 3 750 |
Selling and marketing expenses | 8 934 | 8 029 |
| 37 394 | 35 839 |
General and administrative expenses | 9 858 | 8 677 |
| 39 032 | 35 713 |
Restructuring charge | 540 | (304) |
| 2 147 | 2 242 |
Amortization of identifiable intangible assets | 24 631 | 815 |
| 31 805 | 26 884 |
| 45 018 | 18 015 |
| 114 561 | 104 428 |
Operating income / (loss) | (22 063) | 3 543 |
| (12 004) | (18 434) |
Financial expense, net | (1 436) | (3 358) |
| (7 201) | (6 991) |
Equity in income of affiliated companies | 12 | 22 |
| 22 | 71 |
Income tax credit (expense) | 594 | 599 |
| (1 982) | (2 458) |
Amortization of goodwill | (11 370) | (851) |
| (15 379) | (39 604) |
Net loss | € (34 263) | (45) |
| € (36 544) | € (67 416) |
Basic and diluted net loss per share | € (1.87) | € 0.00 |
| € (2.20) | € (3.67) |
Number of outstanding shares used | 18 364 462 | 18 372 841 |
| 16 579 986 | 18 372 841 |
Genesys Conferencing
Notes to French GAAP Consolidated Statements of Operations
(in thousands of Euros)
NOTE A: EBITDA CALCULATION | Three Months ended December 31, |
| Twelve Months ended December 31, | ||
| 2003 | 2004 |
| 2003 | 2004 |
Operating income / (loss) | € (22 063) | € 3 543 |
| € (12 004) | € (18 434) |
Amortization of identifiable intangible assets | 24 631 | 816 |
| 31 805 | 26 886 |
Amortization of deferred acquisition and deferred financing costs | 384 | 279 |
| 1 570 | 856 |
Operating income (loss) restated for the above items | 2 952 | 4 638 |
| 21 371 | 9 308 |
Depreciation and operating provision | 3 477 | 2 268 |
| 12 498 | 10 290 |
EBITDA | 6 429 | 6 906 |
| 33 869 | 19 598 |
Restructuring charge | 540 | (304) |
| 2 147 | 2 242 |
Other non-recurring expenses | 8 | 256 |
| 150 | 2 380 |
EBITDA before non-recurring expenses | € 6 977 | € 6 858 |
| € 36 166 | € 24 220 |
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NOTE B: DETAIL OF FINANCIAL EXPENSES, NET | Three Months ended December 31, |
| Twelve Months ended December 31, | ||
| 2003 | 2004 |
| 2003 | 2004 |
Interest and other financial income | € 35 | € 38 |
| € 124 | € 718 |
Foreign exchange gains | 621 | 901 |
| 2 698 | 4 238 |
Total financial income | 656 | 939 |
| 2 822 | 4 956 |
Interest and other financial expenses | 1 500 | 1 175 |
| 7 005 | 5 431 |
Foreign exchange losses | 592 | 3 122 |
| 3 018 | 6 516 |
Total financial charges | 2 092 | 4 297 |
| 10 023 | 11 947 |
Financial expense, net | € (1 436) | € (3 358) |
| € (7 201) | €(6 991) |
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NOTE C: DETAIL OF INCOME TAX EXPENSE | Three Months ended December 31, |
| Twelve Months ended December 31, | ||
| 2003 | 2004 |
| 2003 | 2004 |
Deferred tax (expense) credit | € 781 | 595 |
| € 548 | € 49 |
Income tax expense | (187) | 4 |
| (2 530) | (2 507) |
Total income tax (expense) credit | € 594 | € 599 |
| € (1 982) | € (2 458) |
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NOTE D: DETAIL OF ACCOUNTS RECEIVABLE, NET | At December 31, | ||||
| 2003 |
| 2004 | ||
Billed portion of accounts receivable, net | 23 462 |
| 21 523 | ||
Un-billed portion of accounts receivable, net | 6 744 |
| 6 260 | ||
Total accounts receivable, net | 30 206 |
| 27 783 | ||
US GAAP ANNEX
GENESYS SA
U.S. GAAP CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
| December 31, | December 31, | |
| 2003 | 2004 | |
ASSETS |
| (Unaudited) | |
Current assets: |
|
| |
Cash and cash equivalents | €15,574 | €7,361 | |
Short-term portion of restricted cash | 3,371 | 1,194 | |
Accounts receivable, less allowances €2,537 and €2,100 at December 31, 2003 and 2004, respectively | 23,462 | 21,523 | |
Un-billed accounts receivable | 6,744 | 6,260 | |
Inventory | 29 | 21 | |
Prepaid expenses | 2,286 | 1,622 | |
Other current assets | 8,856 | 4,289 | |
Total current assets | 60,322 | 42,270 | |
Property and equipment, net | 27,284 | 22,366 | |
Goodwill, net | 75,047 | 21,834 | |
Customer lists, net | 42,774 | 15,798 | |
Technology and other intangibles, net | 352 | 72 | |
Investment in affiliated company | 141 | 212 | |
Deferred tax assets | 840 | 448 | |
Deferred financing costs, net | 2,531 | 1,619 | |
Other assets | 1,824 | 1,493 | |
Long-term portion of restricted cash | 2,722 | — | |
Total assets | €213,837 | €106,112 | |
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
| |
Current liabilities: |
|
| |
Bank overdrafts | €3,850 | €2,173 | |
Accounts payable | 8,676 | 9,488 | |
Accrued liabilities | 6,627 | 5,004 | |
Accrued compensation | 6,519 | 6,479 | |
Tax payable | 9,092 | 6,667 | |
Deferred revenue | 88 | 30 | |
Current portion of long-term debt | 18,564 | 12,038 | |
Current portion of capitalized lease obligations | 55 | 187 | |
Current portion of deferred tax liability | 2,143 | 989 | |
Current portion of other long-term liability | 1,740 | 1,467 | |
Other current liabilities | 3,242 | 1,458 | |
Total current liabilities | 60,596 | 45,980 | |
Long-term portion of long-term debt | 82,814 | 64,713 | |
Long-term portion of capitalized lease obligations | 107 | 60 | |
Long term portion of deferred tax liability | 11,504 | 3,396 | |
Other long-term liability | 3,173 | 1,244 | |
Shareholders’ equity (deficit): |
|
| |
Ordinary shares: €1.00 nominal value and 18,307,756 shares issued and outstanding at December 31, 2003 and 2004 | 18,308 | 18,308 | |
Common shares to be issued: €1.00 nominal value and 65,067 shares at December 31, 2003 and 2004 | 65 | 65 | |
Additional paid-in capital | 197,611 | 197,129 | |
Accumulated other comprehensive income | 15,372 | 22,293 | |
Deferred compensation | (322) | — | |
Accumulated deficit | (174,640) | (246,325) | |
| 56,394 | (8,530) | |
Less cost of treasury shares: 22,131 shares at December 2003 and 2004 | (751) | (751) | |
Total shareholders’ equity (deficit) | 55,643 | (9,281) | |
Total liabilities and shareholders’ equity (deficit) | €213,837 | €106,112 | |
See notes to financial statements
GENESYS SA
U.S. GAAP CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(in thousands, except share data)
| Three months ended December 31, | Year ended December 31, | ||||
| 2003 | 2004 | 2003 | 2004 | ||
|
|
| ||||
Revenue: |
|
|
|
| ||
Services | €35,233 | €33,784 | €159,155 | €138,762 | ||
Products | 50 | 50 | 345 | 276 | ||
| 35,284 | 33,834 | 159,500 | 139,038 | ||
Cost of revenue: |
|
|
|
| ||
Services | 12,372 | 12,246 | 56,936 | 53,013 | ||
Products | 8 | 34 | 207 | 83 | ||
| 12,380 | 12,280 | 57,143 | 53,096 | ||
Gross profit | 22,904 | 21,554 | 102,357 | 85,942 | ||
Operating expenses: |
|
|
|
| ||
Research and development | 1,055 | 798 | 4,183 | 3,750 | ||
Selling and marketing | 8,934 | 8,029 | 37,394 | 35,839 | ||
General and administrative | 9,299 | 8,475 | 37,729 | 34,773 | ||
Restructuring charge | 1,115 | (305) | 1,115 | 2,242 | ||
Impairment of goodwill and other intangibles | 28,057 | — | 28,057 | 75,401 | ||
Amortization of intangibles | 1,761 | 947 | 9,595 | 5,382 | ||
Total operating expenses | 50,221 | 17,944 | 118,073 | 157,387 | ||
Operating income (loss) | (27,317) | 3,610 | (15,716) | (71,445) | ||
Interest income | 24 | 27 | 219 | 173 | ||
Interest expense | (1,261) | (966) | (6,818) | (4,285) | ||
Foreign exchange gain (loss) | (1,936) | (701) | 3,679 | (1,595) | ||
Other financial expense, net | (724) | (474) | (1,581) | (1,287) | ||
Financial expense, net | (3,898) | (2,114) | (4,501) | (6,994) | ||
Equity in income of affiliated company | 11 | 22 | 22 | 71 | ||
Income (loss) before taxes | (31,204) | 1,518 | (20,195) | (78,368) | ||
Income tax credit | 8,930 | 858 | 8,842 | 6,683 | ||
Net income (loss) | €(22,274) | €2,376 | €(11.353) | €(71,685) | ||
Basic and diluted net income (loss) per share | €(1.21) | €0.13 | €(0.69) | €(3.90) | ||
Number of shares used in computing basic and diluted net income (loss) per share |
18,364,462 |
18,372,841 |
16,579,986 |
18,372,841 | ||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: April 6, 2005
GENESYS SA By: /s/ François Legros |