----------
WEST
----------sm
West Corporation AT THE COMPANY:
11808 Miracle Hills Drive Carol Padon
Omaha, NE 68154 Investor Relations
(402) 963-1500
West Corporation Reports First Quarter Results
OMAHA, NE, April 22, 2003 - West Corporation (NASDAQ: WSTC), a leading provider
of outsourced communication solutions, today announced first quarter 2003
results.
Financial Summary (unaudited)
(In millions, except per share amounts and percentages)
Three Months Ended
March 31
- -------------------------------------------------------------------------
2003 2002 Percent
Change
- -------------------------------------------------------------------------
Total Revenue $216.2 $210.5 2.7%
- -------------------------------------------------------------------------
Operating Income $31.9 $34.9 -8.6%
- -------------------------------------------------------------------------
Net Income $20.1 $22.6 -11.1%
- -------------------------------------------------------------------------
Net Income per $0.30 $0.35
share (basic)
- -------------------------------------------------------------------------
Net Income per $0.30 $0.33
diluted share
- -------------------------------------------------------------------------
1
"The economic climate and the war in Iraq continued to have a negative impact on
our business," commented Thomas B. Barker, President and Chief Executive
Officer. "We were able to successfully manage our variable costs during the
quarter. We remain well positioned to grow when the economy improves."
Operating Results
For the quarter ended March 31, 2003, the Company recorded revenues of $216.2
million up 2.7% from $210.5 million in the first quarter 2002. Net income was
$20.1 million, compared to $22.6 million for the same quarter of last year.
Diluted earnings per share for the first quarter was 30 cents, versus 33 cents
in the prior year comparable period.
Margins
As a percentage of revenue, first quarter operating income was 14.8% compared to
16.6% in the same period of last year and 13.0% for the year ended December 31st
2002. SG&A as a percentage of revenues increased during first quarter 2003 to
37.5% from 34.8% in the same period last year, due to increases in depreciation,
amortization of newly acquired intangible assets and salaries and benefits.
Balance Sheet
West invested $12.7 million in capital expenditures during the first quarter.
The Company's balance sheet remained strong in light of these investments with
cash and cash equivalents growing from December 31, 2002 levels by $49.5 million
to $187.4 million. The Company also maintained its positive current ratio of
3.7-to-1.
"Our capital expenditures this quarter were primarily related to the expansion
of the inbound contact center in Canada and the completion of the new Network
Operations Center (NOC) in March," commented Paul Mendlik, Chief Financial
Officer of West. "We are very pleased with the new NOC, which will improve the
efficiency of our operations and our ability to communicate effectively with our
clients."
Conference Call
The company will hold a conference call to discuss earnings on April 23rd at
10:00 AM Central Time. Investors may access the call by visiting the Investor
Relations section of the West Corporation website at www.west.com and clicking
on the Live Webcast icon. If you are unable to participate during the live
webcast, a replay of the call will also be available on the website.
About West Corporation
2
West Corporation is a leading provider of outsourced communication solutions to
many of the worlds largest companies. The company helps its clients communicate
effectively, maximize the value of their customer relationships and drive
greater revenue from each transaction. West's integrated suite of customized
solutions includes customer acquisition and retention services, direct marketing
services, accounts receivable management and, with the anticipated acquisition
of InterCall, worldwide teleconferencing.
Founded in 1986 and headquartered in Omaha, Nebraska, West has a team of
approximately 23,000 employees based in North America.
For more information, please visit www.west.com.
------------
Statements which are not historical facts contained in this release are
forward-looking statements that involve risks and uncertainties. Such risks and
uncertainties include, but are not limited to: planned expansion of operating
facilities; labor market conditions; mergers, acquisitions, or joint ventures,
including their execution; customer concentrations; technological innovation;
and general economic conditions. Further information regarding the factors that
could cause actual results to differ from expected or projected results can be
found in documents filed by the Company with the United States Securities and
Exchange Commission (the "SEC").
3
WEST CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited, in thousands except per share and selected operating data)
Three Months Ended March 31, %
2003 2002 Change
-------- -------- ------
Revenue $216,186 $210,548 2.7%
Cost of services 103,262 102,320 0.9%
Selling, general and administrative expenses 81,017 73,365 10.4%
-------- --------
Operating income 31,907 34,863 -8.5%
Other income, net 456 711 -35.9%
-------- --------
Income before tax and minority interest 32,363 35,574 -9.0%
Income tax expense 12,103 12,876 -6.0%
Minority interest 165 106 55.7%
-------- --------
Net income $ 20,095 $ 22,592 -11.1%
======== ========
Earnings per share:
Basic $ 0.30 $ 0.35
Diluted $ 0.30 $ 0.33
Weigted average common shares outstanding:
Basic 66,185 65,402
Diluted 67,468 68,617
SELECTED OPERATING DATA:
Operating margin 14.8% 16.6%
Number of workstations (end of period) 14,154 13,399
Number of ports (end of period) 153,659 104,763
March 31, December 31, %
2003 2002 Change
-------- ------------ ------
Current assets:
Cash and short-term investments $187,424 $137,927 35.9%
Trade accounts receivable, net 110,235 121,868 -9.5%
Other current assets 28,463 29,790 -4.5%
-------- --------
Total current assets 326,122 289,585 12.6%
Net property and equipment 210,254 213,641 -1.6%
Goodwill 120,456 114,146 5.5%
Other assets 45,928 53,450 -14.1%
-------- --------
Total assets $702,760 $670,822 4.8%
======== ========
Current liabilities 87,171 66,322 31.4%
Other liabilities & minority interest 44,013 54,908 -19.8%
Stockholders' equity 571,576 549,592 4.0%
-------- --------
Total liabilities and stockholders' equity $702,760 $670,822 4.8%
======== ========
# # #
4