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Exhibit 99.1

LOGO

 

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 Fourth Quarter and Full Year 2009 Results

and Provides 2010 Guidance

Announces Purchase of Stream57

OMAHA, NE, February 9, 2010 – West Corporation, a leading provider of technology-driven, voice-oriented solutions, today announced its fourth quarter and full year 2009 results.

Financial Summary (unaudited)

(Dollars in millions)

 

     Three Months Ended
December 31,
    Year Ended
December 31,
 
     2009     2008     Percent
Change
    2009     2008     Percent
Change
 

Revenue

   $ 602.9      $ 571.7      5.4   $ 2,375.7      $ 2,247.4      5.7

Adjusted EBITDA1

   $ 164.6      $ 177.6      -7.3   $ 647.9      $ 633.6      2.3

Adjusted EBITDA Margin

     27.3     31.1       27.3     28.2  

Cash Flow from Operations

   $ 72.1      $ 126.8      -43.1   $ 272.9      $ 287.4      -5.0

 

1

See Reconciliation of Financial Measures below.

 

1


Consolidated Operating Results

For the fourth quarter of 2009, revenue was $602.9 million compared to $571.7 million for the same quarter last year, an increase of 5.4 percent. Revenue from an acquired entity2 was $8.6 million during the fourth quarter of 2009.

For the year ended December 31, 2009, revenue was $2,375.7 million compared to $2,247.4 million for 2008, an increase of 5.7 percent. Revenue from automated services increased 16 percent in 2009 while revenue from agent-based services decreased nine percent.

Cash flow from operations was $72.1 million for the fourth quarter of 2009, a decrease of 43.1 percent over the same period in 2008. This decrease was due to the timing of the year-end payroll cycle and interest payment dates. For the year 2009, cash flow from operations was $272.9 million, 5.0 percent lower than that in 2008.

Adjusted EBITDA for the fourth quarter of 2009 was $164.6 million, or 27.3 percent of revenue, compared to $177.6 million, or 31.1 percent of revenue, for the fourth quarter of 2008. For the year 2009, Adjusted EBITDA was $647.9 million, or 27.3 percent of revenue. A reconciliation of Adjusted EBITDA to cash flow from operating activities is presented below.

Balance Sheet and Liquidity

At December 31, 2009, West Corporation had cash and cash equivalents totaling $59.1 million and working capital of $175.0 million.

During the fourth quarter of 2009, the Company invested $27.3 million in capital expenditures primarily for software, equipment, information technology systems and data centers.

Acquisition

The Company also announced that it acquired the assets of Stream57, LLC (“Stream57”), a leading provider of fully customizable web event and streaming media solutions and services, on December 31, 2009 for $28.2 million. Stream57’s cutting-edge webcast and rich media software suite brings a new level of interactivity to online video presentations and e-learning. The business was founded in 2001 and has provided software and services for rich media delivery, webcasting and e-learning solutions for a wide range of distinguished clients, including several Fortune 1000 corporations, charities, B2B publishers, higher education institutions and health care organizations. Stream57 will be integrated with InterCall to expand its offerings in the event services market.

 

 

2

Revenue from an acquired entity includes Positron revenue through November 21, 2009 in the Communication Services segment.

 

2


2010 Guidance

For 2010, the Company expects the following results. This guidance includes the results of Stream57 but assumes no additional acquisitions or changes in the current operating environment or exchange rates.

 

In millions

   2009 Actual    2010 Guidance

Revenue

   $ 2,375.7    $ 2.42B - $2.50B

Adjusted EBITDA

   $ 647.9    $ 675 - $705

Cash Flow from Operations

   $ 272.9    $ 295 - $325

Capital Expenditures

   $ 122.7    $ 110 - $130

Conference Call

The Company will hold a conference call to discuss these topics on Wednesday, February 10, 2010 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 be available on the Company’s website at www.west.com.

About West Corporation

West Corporation is a leading provider of technology-driven, voice-oriented solutions. West offers its clients a broad range of communications and infrastructure management solutions that help them manage or support critical communications. West’s customer contact solutions and conferencing services are designed to improve its clients’ cost structure and provide reliable, high-quality services. West also provides mission-critical services, such as public safety and emergency communications.

Founded in 1986 and headquartered in Omaha, Nebraska, West serves Fortune 1000 companies and other clients in a variety of industries, including telecommunications, banking, retail, financial, technology and healthcare. West has sales and operations in the United States, Canada, Europe, the Middle East, Asia Pacific and Latin America. For more information on West Corporation, please call 1-800-841-9000 or visit www.west.com.

 

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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,” “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, but are not limited to, the effects of global economic trends on the businesses of West’s clients; competition in West’s highly competitive industries; West’s ability to keep pace with its clients’ needs for rapid technological change and systems availability; the loss, financial difficulties or bankruptcy of any key clients; the non-exclusive nature of West’s client contracts and the absence of revenue commitments; increases in the cost of voice and data services or significant interruptions in these services; the cost of pending and future litigation; extensive regulation affecting many of West’s businesses; security and privacy breaches of the systems West uses to protect personal data; West’s ability to protect its proprietary information or technology; the cost of defending West against intellectual property infringement claims; service interruptions to West’s data and operation centers; West’s ability to retain key personnel and attract a sufficient number of qualified employees; increases in labor costs and turnover rates; the political, economic and other conditions in the countries where West operates; changes in foreign exchange rates; West’s ability to complete future acquisitions and integrate or achieve the objectives of its recent and future acquisitions; West’s ability to recover charged-off consumer receivables and decreases in collections in its receivables management business. In addition, West is subject to risks related to its level of indebtedness. Such risks include West’s ability to generate sufficient cash to service its indebtedness and fund its other liquidity needs; West’s ability to comply with covenants contained in its debt instruments; the incurrence of significant additional indebtedness by West and its subsidiaries and the ability of West’s lenders to fulfill their lending commitments. West is also subject to other risk factors described in documents filed by the company with the United States Securities and Exchange Commission.

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, except to the extent required by applicable law.

 

4


WEST CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited, in thousands except selected operating data)

 

     Three Months Ended December 31,     Twelve Months Ended December 31,  
     2009     2008     % Change     2009     2008     % Change  

Revenue

   $ 602,870      $ 571,718      5.4   $ 2,375,748      $ 2,247,434      5.7

Cost of services

     268,889        258,839      3.9     1,067,777        1,015,028      5.2

Selling, general and administrative expenses

     226,583        223,632      1.3     907,358        881,586      2.9
                                            

Operating income

     107,398        89,247      20.3     400,613        350,820      14.2

Interest expense

     60,261        95,095      -36.6     254,103        313,019      -18.8

Other expense (income), net

     361        8,323      -95.7     (1,326     8,621      -115.4
                                            

Income (loss) before tax

     46,776        (14,171   430.1     147,836        29,180      406.6

Income tax

     19,502        (5,610   447.6     56,862        11,731      384.7
                                            

Net income (loss)

     27,274        (8,561   418.6     90,974        17,449      421.4

Less net income (loss) - Noncontrolling interest

     —          197      NM        2,745        (2,058   233.4
                                            

Net income (loss) - West Corporation

   $ 27,274      $ (8,758   411.4   $ 88,229      $ 19,507      352.3
                                            

SELECTED SEGMENT DATA:

            

Revenue:

            

Unified Communications

   $ 281,156      $ 266,833      5.4   $ 1,126,544      $ 995,161      13.2

Communication Services

     322,937        306,485      5.4     1,254,547        1,258,182      -0.3

Intersegment eliminations

     (1,223     (1,600   23.6     (5,343     (5,909   9.6
                                            

Total

   $ 602,870      $ 571,718      5.4   $ 2,375,748      $ 2,247,434      5.7
                                            

Depreciation & Amortization:

            

Unified Communications

   $ 22,966      $ 22,869      0.4   $ 91,491      $ 88,948      2.9

Communication Services

     24,113        25,417      -5.1     96,856        94,540      2.4
                                            

Total

   $ 47,079      $ 48,286      -2.5   $ 188,347      $ 183,488      2.6
                                            

Operating Income:

            

Unified Communications

   $ 67,971      $ 77,983      -12.8   $ 296,096      $ 256,853      15.3

Communication Services

     39,427        11,264      250.0     104,517        93,967      11.2
                                            

Total

   $ 107,398      $ 89,247      20.3   $ 400,613      $ 350,820      14.2
                                            

Operating Margin:

            

Unified Communications

     24.2     29.2   -17.1     26.3     25.8   1.9

Communication Services

     12.2     3.7   229.7     8.3     7.5   10.7
                                            

Total

     17.8     15.6   14.1     16.9     15.6   8.3
                                            

SELECTED OPERATING DATA ($M):

            

Cash flow from operations

     72.1        126.8          272.9        287.4     

Term loan facility

     2,460.2        2,485.5           

Revolving credit facility

     72.9        272.2           

Senior and senior subordinated notes

     1,100.0        1,100.0           

Purchases of receivables portfolios

     —          5.4          1.7        45.4     

Revenue from automated services ($M) (3)

     389.6        355.9      9.5     1,523.6        1,312.8      16.1

Revenue from agent-based services ($M)

     213.3        215.8      -1.2     852.1        934.6      -8.8

 

     Condensed Balance Sheets  
     Dec. 31,
2009
    Dec. 31,
2008
    %
Change
 

Current assets:

      

Cash and cash equivalents

   $ 59,068      $ 168,340      -64.9

Trust and restricted cash

     14,750        9,130      61.6

Accounts receivable, net

     353,622        359,021      -1.5

Portfolio receivables, current

     7,973        64,204      -87.6

Deferred income taxes receivable

     35,356        52,647      -32.8

Other current assets

     72,847        85,706      -15.0
                      

Total current assets

     543,616        739,048      -26.4

Net property and equipment

     333,267        320,152      4.1

Portfolio receivables, net

     5,766        68,542      -91.6

Goodwill

     1,665,569        1,642,857      1.4

Other assets

     497,044        544,190      -8.7
                      

Total assets

   $ 3,045,262      $ 3,314,789      -8.1
                      

Current liabilities

   $ 368,609      $ 527,638      -30.1

Long-term obligations

     3,607,873        3,843,536      -6.1

Other liabilities

     161,524        146,203      10.5
                      

Total liabilities

     4,138,006        4,517,377      -8.4

Class L common stock

     1,332,721        1,158,159      15.1

Stockholders’ deficit

     (2,425,465     (2,360,747   -2.7
                      

Total liabilities and stockholders’ deficit

   $ 3,045,262      $ 3,314,789      -8.1
                      

 

3

Automated services includes Unified Communications, Intrado and West Interactive

 

5


Reconciliation of Financial Measures

The common definition of EBITDA is “Earnings Before Interest Expense, Taxes, Depreciation and Amortization.” In evaluating liquidity, we use earnings before interest expense, share based compensation, taxes, depreciation and amortization, minority interest, non-recurring litigation settlement costs, other non-cash reserves, transaction costs and after acquisition synergies and excluding unrestricted subsidiaries, or “Adjusted EBITDA.” 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 substitute 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, although the precise adjustments used to calculate Adjusted EBITDA included in our credit facility and indentures vary in certain respects among such agreements and from those presented below. Set forth below is a reconciliation of EBITDA and Adjusted EBITDA to cash flow from operations.

 

Amounts in thousands    Three Months Ended Dec. 31,     Twelve Months Ended Dec. 31,  
     2009     2008     2009     2008  

Cash flow from operating activities

   $ 72,065      $ 126,760      $ 272,857      $ 287,381   

Income tax expense (benefit)

     19,502        (5,610     56,862        11,731   

Deferred income tax (expense) benefit

     (30,748     34,540        (28,274     26,446   

Interest expense, net of amortization

     60,261        95,096        254,103        313,019   

Allowance for impairment of purchased accounts receivable

     —          (32,329     (25,464     (76,405

Provision for share based compensation

     (2,566     (378     (3,840     (1,404

Debt amortization

     (4,017     (4,145     (16,416     (15,802

Other

     (70     (48     (375     (107

Changes in operating assets and liabilities, net of business acquisitions

     39,689        (84,676     80,833        (19,173
                                

EBITDA

     154,116        129,210        590,286        525,686   

Provision for share based compensation

     2,566        378        3,840        1,404   

Site closures, settlements and other impairments

     3,994        3,087        10,577        2,644   

Acquisition synergies and transaction costs

     3,260        7,001        18,003        20,985   

Portfolio impairments

     —          32,329        25,464        76,405   

Non-cash foreign currency loss (gain)

     653        5,558        (229     6,427   
                                

Adjusted EBITDA

   $ 164,589      $ 177,563      $ 647,941      $ 633,551   
                                

 

6