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
August 2003
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 Logo]
Genesys Conferencing Reports Financial Results
for Second Quarter Ended June 30, 2003
Continuing Adoption of Automated Services and Cost Reduction Initiatives
Boosts Gross Margins and EBITDA Margins
Montpellier, France, August 13, 2003 - Genesys Conferencing (Euronext: 3955)
(Nasdaq: GNSY), the world's leading conferencing specialist, today reported
financial results (unaudited) for the second quarter ended June 30, 2003. All
financial results are reported under French Generally Accepted Accounting
Principles (GAAP).
Comparisons for the second quarter with the prior year included:
o Total call volumes increased 20.5% to 339.4 million minutes
o Revenue decreased 19.7% to (euro)42.3 million
o Gross margin increased to 66.4%, despite revenue decline
o EBITDA* increased 90.3% to (euro)11.1 million with EBITDA margin at 26.2%
o Net income reached (euro)0.9 million, a (euro)14.3 million improvement from
the prior year
o Fully diluted GAAP EPS of (euro) 0.05
o Cash and equivalents increased by (euro)6.3 million from Q4 2002 to (euro)16.3
million
Francois Legros, Chairman and Chief Executive Officer, stated, "Our second
quarter results reflect our continuing efforts to improve profitability and our
financial strength. During the second quarter, we benefited from the continuing
increase in call volumes and the shift to higher-margin automated services, as
well as our continued cost reduction initiatives."
Second Quarter Results Reflect Improved Profitability from Cost Reduction
Efforts
Total call volumes were 339.4 million minutes for the second quarter of 2003, up
20.5% from the same period in 2002. Automated services call volumes were up
40.3% from the second quarter of 2002 and increased 6.6% from the first quarter
of 2003. Automated services represented approximately 64.6% of revenue and 82.1%
of audio call volumes in the second quarter of 2003.
Revenue decreased 19.7% to (euro)42.3 million, from (euro)52.7 million in the
second quarter of 2002. The revenue decline was primarily due to the weak U.S.
dollar and also to the continuing shift to automated services (which carry
higher margins but generate lower per-minute revenues than operator assisted
services) and to price erosion. Despite the revenue decrease, gross margin was
66.4% compared to 55.9% in the second quarter 2002, primarily driven by the
shift to automated services and higher productivity in the consolidated call
centers.
Selling, general and administrative expenses and research and development
expenses declined (euro)11.7 million to (euro)20.7 million, or 36.2%, compared
to the second quarter of 2002, primarily due to the Company's cost-reduction
programs. Operating profit in the second quarter of 2003 was (euro)5.0 million,
compared to an operating loss of (euro)6.7 million in the second quarter of
2002.
Earnings before interest, taxes, depreciation and amortization (EBITDA*) totaled
(euro)11.1 million in the second quarter of 2003, resulting in an EBITDA margin
of 26.2%, compared to (euro)5.8 million in the second quarter of 2002, or an
EBITDA margin of 11.1%.
Net income was (euro)0.9 million, or (euro)0.05 per share in the second quarter
of 2003, compared with a loss of (euro)13.4 million, or (euro)0.86 per share, in
the same period last year. Cash increased to (euro)16.3 million, up (euro)6.3
million from the fourth quarter of 2002.
Michael E. Savage, Executive Vice President and Chief Financial Officer, stated,
"The continuing improvement in profitability and the amended credit facility
have significantly improved our financial liquidity. We completed the quarter
with cash and cash equivalents of over (euro)16.0 million, and we expect further
improvement in the second half of 2003."
New Initiatives to Support the Migration to Automated Services and Boost Volume
Growth
The Company expects the migration to automated services to continue through 2003
and 2004 until they represent approximately 80% of revenue. To support this
migration and boost its volume growth, the Company has now standardized the
bundled price offering of its multimedia automated services Genesys Meeting
Center, which includes audio, web and video over IP conferencing.
Second Quarter 2003 Conference Call and Webcast
Chairman and Chief Executive Officer Francois Legros and Executive Vice
President and Chief Financial Officer Michael E. Savage will host a conference
call on August 13, 2003, at 5:30 p.m. Central European Time or 11:30 a.m.
Eastern Daylight Time.
The conference call will be webcast live. The call may be accessed at
www.genesys.com
A replay of the call will be available at www.genesys.com
*EBITDA is not a generally accepted accounting principle measurement and is
presented solely as a supplemental disclosure. See attached note to consolidated
statements of operations for reconciliation of Operating Income and EBITDA.
See financial tables to follow.
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 May 15,
2003. 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 global leader in integrated multimedia solutions,
providing a full range of practical and innovative real-time collaboration and
conferencing services to over 18,000 clients worldwide. The largest conferencing
specialist in the world, with an unmatched global presence, Genesys Conferencing
has established its integrated multimedia technology in 19 countries throughout
Europe, Asia Pacific and North America. Genesys Conferencing is listed on the
Nouveau Marche in Paris (Euronext: 3955) and Nasdaq (GNSY). Additional
information is available at www.genesys.com.
At Genesys Conferencing
Michael E. Savage
Executive Vice President and Chief Financial Officer
Phone: +33 4 99 13 27 66
mike.savage@genesys.com
Marine Pouvreau
Investor Relations
Phone: +33 4 99 13 25 17
marine.pouvreau@genesys.com
Tricia Heinrich
Public Relations
Phone: +1 415 608 6651
tricia.heinrich@genesys.com
GENESYS CONFERENCING
Consolidated Balance Sheets (French GAAP)
(in thousands of euros, except share data)
At Dec. 31, 2002 At June 30, 2003
ASSETS un audited
Fixed assets:
Goodwill, net (euro) 77 504 (euro) 71 144
Intangible assets, net 80 715 75 015
Tangible assets, net 27 502 22 779
Financial assets, net 1 194 998
Investments in affiliated companies 118 133
-------------- --------------
Total fixed assets 187 033 170 069
Current assets:
Inventory 72 48
Accounts receivable, less allowances
((euro)3,502 and(euro)3,051 at December 31, 2002
and June 30, 2003, respectively) 35 929 37 755
Deferred tax assets 361 111
Other current assets 7 919 5 785
Prepaid expenses and deferred charges 5 834 6 701
Marketable securities 109 5 209
Cash at bank 9 886 11 083
-------------- --------------
Total current assets 60 110 66 692
-------------- --------------
TOTAL ASSETS (euro) 247 143 (euro) 236 761
============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Shareholders' equity:
Ordinary shares, nominal value of (euro) 5 per share,
15,409,933 shares issued and outstanding at
December 31,2002 and (euro) 1 per share, 15,482,195
shares issued and outstanding and June 30, 2003,
respectively (euro) 77 051 (euro) 15 482
Common shares to be issued 1,332 141
Additional paid-in capital 180 652 182 416
Additional paid-in capital to be issued 6 344 3 917
Accumulated deficit (103 250) (138 022)
Net income/(loss) for the period (96 617) 1 543
Currently translation adjustments 8 111 11 343
-------------- --------------
Total shareholders' equity 73 623 76 820
Provisions for risks and charges 7 505 5 127
Long-term debt:
Long-term portion of long-term debt 119 537 104 232
Long-term portion of capitalized lease obligations 673 582
-------------- --------------
Total long-term debt 120 210 104 814
Current liabilities
Bank overdrafts 3 417 4 605
Accounts payable and accrued liabilities 20 276 16 355
Tax payable and deferred compensation 15 553 17 901
Current portion of long-term debt 2 390 8 402
Current portion of capitalized lease obligations 1 844 945
Deferred revenue 352 301
Other liabilities 1 973 1 491
-------------- --------------
Total current liabilities 45 805 50 000
-------------- --------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (euro) 247 143 (euro) 236 761
============== ==============
GENESYS CONFERENCING
Unaudited Consolidated Statements of Operations (French GAAP)
(in thousands of euros, except share data)
Three months ended June 30, Six months ended June 30,
----------------------------------- ----------------------------------
2002 2003 2002 2003
----------------------------------- ----------------------------------
Revenue
Services (euro) 52 308 (euro) 42 125 (euro) 107 248 (euro) 87 696
Products 347 145 859 228
----------------------------------- ----------------------------------
52 655 42 270 108 107 87 924
Cost of revenue
Services 23 010 14 113 45 944 30 860
Products 218 85 703 144
----------------------------------- ----------------------------------
23 228 14 198 46 647 31 004
----------------------------------- ----------------------------------
Gross Profit 29 427 28 072 61 460 56 920
Operating expenses:
Research and development 1 188 1 053 2 448 2 085
Selling and marketing 13 864 10 484 27 372 19 160
General and administrative 17 409 9 186 32 995 20 987
Amortization of intangible 3 643 2 390 7 290 4 784
assets
----------------------------------- ----------------------------------
36 104 23 113 70 105 47 016
----------------------------------- ----------------------------------
Operating income/(loss) (6 677) 4 959 (8 645) 9 904
Financial expenses, net (3 381) (2 099) (5 856) (3 829)
Equity in income/(loss) of
affiliated companies (4) 11 (11) 15
Income tax expense (903) (1 101) (1 758) (2 041)
Amortization of goodwill (2 428) (908) (5 168) (2 506)
----------------------------------- ----------------------------------
Net income/(loss) (euro) (13 393) (euro) 862 (euro) (21 438) (euro) 1 543
============== ========== ============== ============
Basic net income/(loss) per share (euro) (0.86) (euro) 0.06 (euro) (1.38) (euro) 0.10
============= =========== ============ ===========
Diluted net income/(loss) per share (euro) (0.86) (euro) 0.05 (euro) (1.38) (euro) 0.10
============= =========== ============ ===========
Number of outstanding shares used in
computing basic net
income/(loss) per share 15 544 450 15 547 280 15 536 374 15 547 280
Number of outstanding shares used in
computing diluted net
income/(loss) per share 15 544 450 16 099 468 15 536 374 16 099 468
GENESYS CONFERENCING
Notes to the Statements of Operations
( in thousands of euros)
NOTE A- EBITDA calculation Three months ended June 30, Six months ended June 30,
2002 2003 2002 2003
General and Administrative expenses (euro) 17 409 (euro) 9 186 (euro) 32 995 (euro) 20 987
Amortization of deferred acquisition
and deferred financing costs (393) (382) (828) (777)
Non recurrent income (charges) 68 (22) 70 (22)
----------------------------- ------------------------------
Operating General and Administrative (euro) 17 084 (euro) 8 782 (euro) 32 237 (euro) 20 188
expenses restated for the above items
============================= ==============================
Operating income (loss) (euro) (6 677) (euro) 4 959 (euro) (8 645) (euro) 9 904
Amortization of deferred acquisition
and deferred financing costs 393 382 828 777
Amortization of intangible assets 3 643 2 390 7 290 4 784
Non recurrent charges (income) (68) 22 (70) 22
----------------------------- ------------------------------
Operating income
restated for the above items (2 709) 7 753 (597) 15 487
----------------------------- ------------------------------
Depreciation and provisions 5 299 3 324 10 776 6 628
Early termination of a rich media contract 3 231 - 3 231 -
EBITDA (euro) 5 821 (euro) 11 077 (euro) 13 410 (euro) 22 115
----------------------------- ------------------------------
NOTE B- DETAIL OF FINANCIAL Three months ended June 30, Six months ended June 30,
EXPENSES, NET
2002 2003 2002 2003
Interest and other financial income (euro) 43 (euro) 16 (euro) 280 (euro) 478
Foreign exchange gains 2 396 12 2 559 2 362
----------------------------- ------------------------------
Total financial income 2 439 28 2 839 2 840
Interest and other financial expenses 2 703 1 286 5 571 4 228
Foreign exchange losses 3 117 841 3 124 2 441
----------------------------- ------------------------------
Total financial charges 5 820 2 127 8 695 6 669
Financial expenses, net (euro) (3 381) (euro) (2 099) (euro) (5 856) (euro) (3 829)
============================= ==============================
NOTE C- DETAIL OF INCOME Three months ended June 30, Six months ended June 30,
TAX EXPENSE
2002 2003 2002 2003
Deferred tax expense (euro) (3) (euro) 17 (euro) (1) (euro) (31)
Income tax expense (900) (1 118) (1 757) (2 010)
----------------------------- ------------------------------
Total income tax expense (euro) (903) (euro) (1 101) (euro) (1 758) (euro) (2 041)
============================= ==============================
(1) We believe that EBITDA is a meaningful measure of performance, because it presents our results of operations
without the potentially volatile impact (which can be substantial) of goodwill impairment and the non-cash
impacting nature of depreciation and amortization.
Annex -- US GAAP Financial Information
GENESYS S.A.
CONSOLIDATED BALANCE SHEETS
(US GAAP)
(in thousands, except share data)
December 31, June 30,
2002 2003
------------ --------
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents............................................................ (euro)9,976 (euro)16,256
Accounts receivable, less allowances of(euro)3,502 at December 31, 2002
and(euro)3,051 at June 30, 2003.................................................... 35,930 37,755
Inventory............................................................................ 72 48
Prepaid expenses..................................................................... 1,874 3,465
Other current assets................................................................. 5,261 3,127
------------- -------------
Total current assets.......................................................... 53,113 60,651
Property and equipment, net............................................................ 32,234 27,731
Goodwill and other intangibles, net.................................................... 158,213 151,244
Investment in affiliated company....................................................... 118 133
Deferred tax assets.................................................................... 361 111
Deferred financing costs, net.......................................................... 3,797 3,291
Other assets........................................................................... 1,897 1,583
------------- -------------
Total assets........................................................ (euro)249,733 (euro)244,744
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Bank overdrafts...................................................................... (euro)3,417 (euro)4,605
Accounts payable..................................................................... 14,344 10,675
Accrued liabilities.................................................................. 7,178 6,890
Accrued compensation................................................................. 6,555 7,480
Tax payable.......................................................................... 8,998 10,421
Deferred revenue..................................................................... 352 301
Current portion of long-term debt.................................................... 1,143 7,191
Current portion of capitalized lease obligations..................................... 191 190
Current portion of deferred tax liability............................................ 3,097 3,097
Current portion of other long-term liability......................................... 2,284 802
Other current liabilities............................................................ 1,759 1,272
------------- -------------
Total current liabilities..................................................... 49,318 52,924
Long-term portion of long-term debt.................................................... 120,165 104,893
Long-term portion of capitalized lease obligations..................................... 149 128
Long term portion of deferred tax liability............................................ 20,666 19,122
Other long-term liability.............................................................. 6,644 4,831
Commitments and contingencies.......................................................... -- --
Shareholders' equity:
Ordinary shares;(euro)5.00 nominal value;
15,409,933 and 15,482,195 shares issued and
outstanding at December 31, 2002 and June 30, 2003, respectively................... 77,050 15,482
Common shares to be issued:(euro)5.00 nominal value; 137,347 and 65,085
shares at December 31, 2002 and June 30, 2003, respectively........................ 687 65
Additional paid-in capital........................................................... 194,217 193,565
Accumulated other comprehensive income............................................... 6,980 7,955
Deferred compensation................................................................ (220) (97)
Accumulated deficit.................................................................. (225,172) (153,373)
------------- -------------
53,542 63,597
Less cost of treasury shares: 22,131 shares at December 2002
and June 30, 2003.................................................................. (751) (751)
------------- -------------
Total shareholders' equity.................................................... 52,791 62,846
------------- -------------
Total liabilities and shareholders' equity.......................... (euro)249,733 (euro)244,744
============= =============
GENESYS S.A.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(US GAAP)
(in thousands, except share data)
Three months ended June 30, Six months ended June 30,
--------------------------- -------------------------
2002 2003 2002 2003
---- ---- ---- ----
Revenue:
Services.............................................. (euro)51,599 (euro)42,125 (euro)106,539 (euro)87,696
Products.............................................. 347 145 859 228
------------- ------------- -------------- -------------
51,946 42,270 107,398 87,924
Cost of revenue:
Services.............................................. 23,010 14,177 45,944 30,990
Products.............................................. 218 85 703 144
------------- ------------- -------------- -------------
23,228 14,262 46,647 31,134
------------- ------------- -------------- -------------
Gross profit............................................ 28,718 28,008 60,751 56,790
Operating expenses:
Research and development.............................. 1,188 1,053 2,448 2,085
Selling and marketing................................. 13,864 10,484 27,372 19,160
General and administrative............................ 16,371 8,862 31,581 20,331
Restructuring charge.................................. -- -- 3,671 --
Amortization of intangibles........................... 3,832 2,611 7,481 5,226
------------- ------------- -------------- -------------
Total operating expenses...................... 35,255 23,010 72,553 46,802
Operating income (loss)................................. (6,537) 4,998 (11,802) 9,988
Financial income (expense)
Interest income....................................... 31 120 89 179
Interest expense...................................... (2,811) (1,253) (5,108) (3,705)
Foreign exchange gain (loss).......................... (25) 642 (565) 5,330
Other financial expense, net.......................... (520) (482) (795) (770)
------------- ------------- -------------- -------------
Financial income (expense), net......................... (3,325) (973) (6,379) 1,034
Equity in income (loss) of affiliated company...........
(3) 11 (11) 15
------------- ------------- -------------- -------------
Income (loss) before taxes.............................. (9,865) 4,036 (18,192) 11,037
Income tax (expense) credit............................. 302 (328) 651 (494)
------------- ------------- -------------- -------------
Net income (loss)............................. (euro)(9,563) (euro) 3,708 (euro)(17,541) euro) 10,543
============= ============= ============== =============
Basic net income (loss) per share....................... (euro) (0.62) (euro) 0.24 (euro) (1.13) (euro) 0.68
============= ============= ============== =============
Diluted net income (loss) per share..................... (euro) (0.62) (euro) 0.23 (euro) (1.13) (euro) 0.66
============= ============= ============== =============
Number of shares used in computing basic net
income (loss) per share............................... 15,544,450 15,547,280 15,536,374 15,547,280
Dilution effect on convertible notes.................... -- 552,188 -- 552,188
Number of shares used in computing diluted net
income (loss) per share............................... 15,544,450 16,099,468 15,536,374 16,099,468
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: August 13, 2003
GENESYS SA
By: /s/ Francois Legros
-------------------
Name: Francois Legros
Title: Chairman and Chief Executive Officer