SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULES 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Month of November 2002
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 whether the registrant by furnishing the
information contained in this Form 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
Genesys Conferencing Reports Third Quarter Results
-Automated services reach 72.7% of volume-
-EBITDA margin expands to 14.9%-
-Call Center Consolidation and Cost Cutting Boost Margins-
-September 2002 EBITDA Margin Reaches 20%-
-Positive Trend Continues into October 2002-
MONTPELLIER, France, November 14, 2002 - Genesys Conferencing (Euronext: 3955)
(Nasdaq: GNSY), the world's leading conferencing specialist, today reported
revenue and earnings for the third quarter and nine months ended September 30,
2002. All financial results are reported under French Generally Accepted
Accounting Principles (GAAP).
Highlights for the third quarter included:
o Total call volumes reach 297 million minutes, up 37.9% over last
year
o Automated service volume increases 90.5%
o Completed consolidation of call centers in early October 2002
o Genesys Meeting Center now exceeds 300,000 seats
o September EBITDA margin reaches 20%
The results for 2001 reflect the combined performance of Genesys Conferencing,
Vialog Corporation, which was acquired by Genesys on April 26, 2001, and Astound
Incorporated, which was acquired by Genesys on March 28, 2001 as if these
acquisitions were completed on January 1, 2001
Revenues decreased 7.9% to (euro)46.9 (US$46.2) million for the third quarter of
2002, from (euro)50.9 (US$50.2) million in the third quarter of 2001. The
decline in revenue was due to the weakening U.S. dollar and the continuing shift
to automated services, which have lower per minute rates than operator assisted
services. Without the dollar effect, revenues for the third quarter 2002 would
have reached (euro)49.7 (US$46.0) million, a decrease of 2.3% from the third
quarter of 2001. Automated services accounted for 72.7% of audio volume in the
third quarter of 2002 compared to 52.8% of volume in the prior year period.
Gross profit expanded to 56.7% of revenue, a 64 basis point improvement from the
same period last year, due to the continued shift to higher margin automated
services.
Operating expenses for the third quarter declined 15.6% to (euro)27.9 million as
a result of a significant reduction in sales, marketing, general and
administrative expenses.
Earnings before interest, taxes, depreciation and amortization (EBITDA), before
non-recurring charges, increased to (euro)7.0 (US$6.9) million in the third
quarter of 2002, an increase of 4.5%, compared to (euro)6.7 (US$6.6) million in
the prior year period. The non-recurring charge consists of (euro)0.8 million in
costs associated with employee severance.
Call Center Consolidation and Cost Cutting Improving Profitability
In October 2002, the company completed the call center consolidation announced
earlier in the year. The call center consolidation was part of a cost reduction
initiative launched in January 2002 to improve financial performance. The total
number of employees has been reduced by approximately 30% to 1,200 from over
1,700 immediately after the completion of the Vialog and Astound acquisitions in
May 2001.
Since then, the sales headcount in North America was reduced from approximately
210 sales people to about 100 while the quality of the field sales group was
upgraded to more experienced sales representatives and the number of inside
sales representatives was increased significantly.
Demonstrating how the cost reduction initiatives are driving margins, the
company noted that EBITDA margins in September reached 20%, a positive trend
which has continued into October 2002.
Michael E. Savage, Executive Vice President and Chief Financial Officer, stated,
"During this quarter, we experienced a material improvement in our costs.
General and administrative expenses decreased to 31.8% of revenue this quarter
from 36.6% last year. Our financial performance the last few months reflects the
call center consolidation and our cost cutting programs which are beginning to
generate the desired results."
Genesys Meeting Center
At the end of the third quarter, Genesys Meeting Center had reached over 300,000
seats sold. Since its introduction, Genesys Meeting Center has become the
fastest growing web conferencing service in the world, based on the number of
seats sold.
Francois Legros, Chairman and Chief Executive Officer, stated, "We continue to
see strong interest from our customer base for our web conferencing solutions.
More importantly, our web conferencing customers are utilizing more automated
teleconferencing minutes, on average, than non-web conferencing customers."
Guidance
Management is providing the following guidance regarding Genesys' financial
outlook:
o Automated services are anticipated to be in the range of 57% -
60%% of revenue for the fourth quarter 2002.
o In the fourth quarter 2002, Genesys anticipates revenues of
approximately (euro)46 million, and approximately (euro)201
million for the year, based on the continued shift to automated
services and continuing unfavorable comparisons in currencies
compared to 2001.
o EBITDA, excluding the non-recurring call center costs and other
non-recurring costs, are anticipated to be in the range of
(euro)7 - (euro)8 million for the fourth quarter and (euro)30 -
(euro)31 for all of 2002.
Mr. Legros concluded, "We are continuing to take the necessary steps to make
Genesys as efficient as possible while we transition our conferencing customers
to automated services. We are encouraged as we approach 2003 by our
significantly reduced cost structure, improving revenue mix and industry-leading
web conferencing products."
Third Quarter Conference Call and Webcast
The Company will hold a conference call on November 14, 2002 at 5:30 p.m.
Central European Time (GMT+1) or 11:30 a.m. Eastern Standard Time. Chairman and
Chief Executive Officer, Francois Legros, and Chief Financial Officer, Michael
E. Savage, will host the call. The conference call will be webcast live. The
call may be accessed at www.genesys.com.
US GAAP Financial Statements
The Company will file its U.S. GAAP financial statements with the Securities and
Exchange Commission under Form 6-K on Friday, November 15, 2002.
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
which was filed by Genesys with the Securities and Exchange Commission on June
12, 2002. 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.
Genesys Conferencing's ordinary shares are listed on the Euronext Paris Stock
Exchange and its ADSs are listed on the Nasdaq National Stock Market Euronext:
3955 - Nasdaq: GNSY - Reuters: GNSY LP - Bloomberg: GENE LP www.genesys.com
At Genesys Conferencing
Michael E. Savage
Executice Vice President Chief Financial Officer
Direct Line: +33 4 99 13 27 66
mike.savage@genesys.com
Marine Pouvreau
Investor relations
Direct Line: +33 4 99 13 25 17
Marine.pouvreau@genesys.com
GENESYS CONFERENCING
Unaudited Proforma Statements of Operations (French GAAP)
(in thousands of euros)
Three months ended Sept. 30, Nine months ended Sept. 30,
------------------------------- ---------------------------------
2001 2002 2001 2002
------------------------------- ---------------------------------
Revenues (euro) 50,894 (euro) 46,863 (euro) 157,536 (euro) 154,970
Cost of revenue (1) 22,376 20,305 68,306 66,952
------------------------------- ---------------------------------
Gross Profit 28,518 26,558 89,230 88,018
Research and development expenses 1,606 1,159 4,029 3,607
Selling, general and administrative
expenses (2) (3) 26,433 22,644 85,614 82,183
Amortization of identifiable intangibles,
deferred acquisition and financing costs 4,991 4,066 14,507 12,184
------------------------------- ---------------------------------
EBIT (1) (2) (3) (euro) (4,512) (euro) (1,311) (euro) (14,920) (euro) (9,956)
=============================== =================================
EBITDA (1) (2) (euro) 5,522 (euro) 6,204 (euro) 18,327 (euro) 19,614
=============================== =================================
(1) The nine months ended September 30, 2002 include(euro)1.2 million in costs
related to the termination of a long distance contract and(euro)0.5 million in
duplicate costs related to call center consolidation
(2) The three and nine months ended September 30, 2002 include(euro)0.8 million
and(euro)1.8 million respectively in costs associated with employee separation
(3) The nine months ended September 30, 2002 include a(euro)3.2 million
provision related to the termination of a rich media contract
GENESYS CONFERENCING
Consolidated Balance Sheets
(in thousands of euros, except share data)
At Dec. 31, 2001 At Sept 30, 2002
------------------------------------
(Unaudited)
ASSETS
Fixed assets:
Goodwill, net (euro) 140,061 (euro) 129,919
Intangible assets, net 108,636 95,843
Tangible assets, net 38,257 27,895
Financial assets, net 2,100 2,000
Investment in affiliated companies 127 111
-------------------------------------
Total fixed assets 289,181 255,768
Current assets:
Inventory 146 118
Accounts receivable, less allowances 48,989 42,412
(Eur 3,201 and Eur 2.687 at December
31,2001 and September 30, 2002 respectively)
Deferred tax assets 236 235
Other current assets 10,514 7,672
Prepaid expenses and deferred charges 12,727 7,850
Marketable securities 8,562 28
Cash at bank 10,051 10,331
-------------------------------------
Total current assets 91,225 68,646
-------------------------------------
TOTAL ASSETS (euro) 380,406 (euro) 324,414
=====================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Shareholders' equity:
Ordinary shares, nominal value of Eur 5 per (euro) 76,356 (euro) 76,959
share, 15,271,064 and 15,391.856 shares issued
and outstanding at December 31,2001
and September 30, 2002, respectively
Common shares to be issued 2,175 1,699
Additional paid-in capital 177,758 180,222
Additional paid-in capital to be issued 10,347 8,082
Accumulated deficit (9,216) (102,996)
Net loss for the period (94,263) (29,136)
Currently translation adjustments 4,791 4,517
-------------------------------------
Total Shareholders' equity 167,948 139,347
Provisions for risks and charges 1,582 6,821
Long-term debt:
Long-term portion of long-term debt 142,083 119,568
Long-term portion of capitalized lease
obligations 171 69
-------------------------------------
Total long-term debt 142,254 119,637
Current liabilities
Bank overdrafts 996 4,488
Accounts payable and accrued liabilities 35,980 22,546
Tax payable and deferred compensation 17,419 14,865
Current portion of long-term debt 8,342 15,526
Current portion of capitalized lease obligations 266 174
Deferred revenue 4,198 562
Other liabilities 1,421 448
-------------------------------------
Total current liabilities 68,622 58,609
-------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (euro) 380,406 (euro) 324,414
=====================================
GENESYS CONFERENCING
Consolidated Statements of Operations (Unaudited)
(in thousands of euros, except share data)
Three months ended Sept 30, Nine months ended Sept 30,
----------------------------------- ----------------------------------
2001 2002 2001 2002
----------------------------------- ----------------------------------
Revenue:
Services (euro) 50,622 (euro) 46,296 (euro) 122,966 (euro) 153,544
Products 272 567 1,516 1,426
----------------------------------- ----------------------------------
50,894 46,863 124,482 154,970
Cost of revenue:
Services 22,121 19,894 51,857 65,838
Products 255 411 1,093 1,114
----------------------------------- ----------------------------------
22,376 20,305 52,950 66,952
----------------------------------- ----------------------------------
Gross Profit 28,518 26,558 71,532 88,018
Operating expenses:
Research and development 1,606 1,159 3,479 3,607
Selling and marketing 12,787 11,828 31,831 39,200
General and administrative (note A) 18,637 14,882 46,796 55,167
----------------------------------- ----------------------------------
33,030 27,869 82,106 97,974
----------------------------------- ----------------------------------
Operating loss (4,512) (1,311) (10,574) (9,956)
Financial expenses, net (note B) (2,982) (3,251) (3,914) (9,107)
Equity in loss of affiliated companies (12) (4) (52) (15)
Income tax expense (note C) (1,072) (836) (6,926) (2,594)
Amortization of goodwill (3,642) (2,296) (9,188) (7,464)
Net loss (euro) (12,220) (euro) (7,698) (euro) (30,654) (euro) (29,136)
================ =============== ================ ================
Basic and diluted net loss per share (euro) (0.88) (euro) (0.50) (euro) (2.53) (euro) (1.87)
============== ============== ============== ==============
Number of oustanding shares used in 13,902,755 15,547,282 12,095,064 15,540,009
computing net loss per share
GENESYS CONFERENCING
Notes to Consolidated Statements of Operations
(in thousands of Euros, except share data)
Three months ended Nine months ended
September 30, September 30,
--------------------------- ---------------------------
2001 2002 2001 2002
--------------------------- ---------------------------
NOTE A- Detail of General and Administrative expenses
General and Administrative expenses (euro) 18,637 (euro) 14,882 (euro) 46,796 (euro) 55,167
Amortization of identifiable intangible assets (4,506) (3,643) (8,474) (10,933)
Amortization of deferred acquisition and deferred
financing costs (485) (423) (1,257) (1,251)
Non recurrent income (charges) 673 22 (201) 92
--------------------------- ---------------------------
Operating General and Administrative expenses (euro) 14,319 (euro) 10,838 (euro) 36,864 (euro) 43,075
restated for the above items =========================== ===========================
OPERATING INCOME AND EBITDA
Operating loss (euro) (4,512) (euro)(1,311) (euro) (10,574) (euro)(9,956)
Amortization of intangibles, deferred acquis. &
financing costs 4,991 4,066 9,731 12,184
Non recurrent charges (income) (673) (22) 201 (92)
--------------------------- ---------------------------
Operating income (loss) restated for the above items (194) 2,733 (642) 2,136
--------------------------- ---------------------------
Depreciation and operating provision 5,716 3,471 12,562 14,247
Early termination of a Rich Media contract - - - 3,231
--------------------------- ---------------------------
EBITDA (euro) 5,522 (euro) 6,204 (euro) 11,920 (euro) 19,614
=========================== ===========================
NOTE B- Detail of financial expenses ,net Three months ended Nine months ended
September 30, September 30,
--------------------------- ---------------------------
2001 2002 2001 2002
--------------------------- ---------------------------
Interest and other financial income (euro) 73 (euro) 85 (euro) 989 (euro) 365
Foreign exchange gains (954) (470) 2,803 2,089
--------------------------- ---------------------------
Total financial income (881) (385) 3,792 2,454
Interest and other financial expenses 2,602 2,441 5,913 8,012
Foreign exchange losses (501) 425 1,793 3,549
--------------------------- ---------------------------
Total financial charges 2,101 2,866 7,706 11,561
Financial expense, net (euro) (2,982)(euro) (3,251) (euro) (3,914)(euro) (9,107)
=========================== ===========================
Three months ended Nine months ended
September 30, September 30,
--------------------------- ---------------------------
2001 2002 2001 2002
--------------------------- ---------------------------
NOTE C- Detail of income tax
Deferred income tax (euro) (39) (euro) 11 (euro) (29) (euro) 10
Tax on acquisition costs (229) - (4,708) -
Income tax expense (804) (847) (2,189) (2,604)
--------------------------- ---------------------------
Total income tax expense (euro) (1,072) (euro) (836) (euro) (6,926)(euro) (2,594)
=========================== ===========================
GENESYS CONFERENCING
Unaudited Proforma Statements of Operations (U.S. GAAP)
(in thousands of euros)
-------------------------- ----------------------------
Three months ended Nine months ended
September 30, September 30,
2001 2002 2001 2002
------------ ----------- ----------- -------------
Revenue (1) (euro) 50,894 (euro) 46,863 (euro) 157,536 (euro) 154,261
Cost of revenue (2) 22,376 20,305 68,306 66,952
------------ ----------- ----------- -------------
Gross profit 28,518 26,558 89,230 87,309
Research and development expenses 1,606 1,159 4,029 3,607
Selling, general and administrative expenses (1) (3) 27,248 22,694 85,805 81,647
Non-recurring charge - - - 3,671
Amortization of goodwill and other intangibles 9,829 3,790 30,245 11,271
----------------------------- ----------- -------------
EBIT (1) (2) (3) (euro) (10,165) (euro)(1,085) (euro) (30,849) (euro) (12,887)
============================= ============== ==============
EBITDA (1) (2) (3) (euro) 4,426 (euro) 5,982 (euro) 15,752 (euro) 14,464
=============== ============= ============== ==============
(1) The nine months ended September 30, 2002 include a (euro) 3.2 million
negative impact (revenue - (euro) 0.7 million, SG&A - (euro) 2.5 million)
related to the termination of a rich media contract.
(2) The nine months ended September 30, 2002 include (euro) 1.2 million in
costs related to the termination of a long distance contract and (euro)
0.5 million in duplicate costs related to the call center consolidation.
(3) The three and nine months ended September 30, 2002 include (euro) 0.8
million and (euro) 1.8 million, respectively, in cost associated with
employee separations.
GENESYS S.A.
CONSOLIDATED BALANCE SHEETS (U.S. GAAP)
(in thousands, except share data)
December 31, September 30,
2001 2002
--------------- ------------------
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents (euro) 17,510 (euro) 5,849
Accounts receivable, less allowances of(euro)3,201 at December 31, 2001
and(euro)2,687 at September 30, 2002 48,989 42,412
Inventory 146 118
Prepaid expenses 7,156 3,375
Other current assets 6,664 3,822
--------------- --------------------
Total current assets 80,465 55,576
Property and equipment, net 47,697 35,582
Goodwill and other intangibles, net 275,058 255,546
Investment in affiliated company 126 111
Deferred tax assets 236 235
Deferred financing costs, net 4,722 4,178
Other assets 2,100 2,000
--------------- --------------------
Total assets (euro) 410,404 (euro) 353,228
=============== ====================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable (euro) 24,533 (euro) 17,730
Accrued liabilities 7,148 8,254
Accrued compensation 7,489 7,158
Tax payable 9,929 7,707
Deferred revenue 4,198 562
Current portion of long-term debt 6,901 12,088
Current portion of capitalized lease obligations 266 174
Current portion of deferred tax liability 5,346 4,866
Current portion of accrued restructuring expenses - 3,219
Other current liabilities 6,894 229
--------------- --------------------
Total current liabilities 72,704 61,987
Long-term portion of long-term debt 142,552 120,150
Long-term portion of capitalized lease obligations 171 69
Long term portion of deferred tax liability 28,503 23,702
Other long term liability 3,606 6,902
Shareholders' equity:
Ordinary shares;(euro)5.00 nominal value; 15,271,064 and 15,391,856
at December 31, 2001 and September 30, 2002, respectively 76,356 76,959
Common shares to be issued :(euro)5.00 nominal value;
250,687 and 155,424 shares at December 31, 2001 and September 30, 2002 1,253 778
Additional paid-in capital 194,019 194,195
Accumulated other comprehensive income 3,749 2,705
Deferred compensation (465) (280)
Accumulated deficit (111,293) (133,187)
--------------- --------------------
163,619 141,170
Less cost of treasury shares : 22,131 shares at December 31, 2001
and September 30, 2002 (751) (751)
--------------- --------------------
Total shareholders' equity 162,868 140,419
--------------- --------------------
Total liabilities and shareholders' equity (euro) 410,404 (euro) 353,228
=============== ====================
GENESYS S.A.
CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. GAAP)
(in thousands, except share data)
Three Months ended September 30, Nine Months ended September 30,
2001 2002 2001 2002
----------------- ---------------- --------------- ----------------
Revenue :
Services (euro) 50,622 (euro) 46,296 (euro) 122,966 (euro) 152,835
Products 272 567 1,516 1,426
----------------- ---------------- --------------- ----------------
50,894 46,863 124,482 154,261
Cost of revenue :
Services 22,121 19,894 51,857 65,838
Products 255 411 1,093 1,114
----------------- ---------------- --------------- ----------------
22,376 20,305 52,950 66,952
----------------- ---------------- --------------- ----------------
Gross profit 28,518 26,558 71,532 87,309
Operating expenses :
Research and development 1,606 1,159 3,479 3,607
Selling and marketing 12,787 11,828 31,831 39,200
General and administrative 14,461 10,866 37,190 42,447
Non-recurring charge - - - 3,671
Amortization of goodwill and other intangibles 9,829 3,790 21,180 11,271
----------------- ---------------- --------------- ----------------
Total operating expenses 38,683 27,643 93,680 100,196
Operating loss (10,165) (1,085) (22,148) (12,887)
Financial income (expense)
Interest income 73 10 229 99
Interest expense (2,886) (2,595) (5,955) (7,703)
Foreign exchange gain (loss) (445) (895) 1,085 (1,460)
Other financial income (expense), net (132) (34) (40) (829)
----------------- ---------------- --------------- ----------------
Financial expense, net (3,390) (3,514) (4,681) (9,893)
Equity in loss of affiliated company (12) (4) (52) (15)
----------------- ---------------- --------------- ----------------
Income (loss) before taxes (13,567) (4,603) (26,881) (22,795)
Income tax (expense) / credit (1,072) 369 (6,681) 1,020
----------------- ---------------- --------------- ----------------
Net loss (euro) (14,639) (euro) (4,234) (euro) (33,562) (euro) (21,775)
================= ================ =============== ================
----------------- ---------------- ------------- ----------------
Basic and diluted net loss per share (euro) (1.05) (euro) (0.27) (euro) (2.77) (euro) (1.40)
================= ================ =============== ================
Number of shares used in computing basic
and diluted net loss per share 13,902,755 15,547,282 12,095,064 15,540,009
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: November 15, 2002
GENESYS SA
By: /s/ Francois Legros
----------------------------
Name: Francois Legros
Title: Chairman and Chief
Executive Officer