West Corporation Reports Increased Revenues and Margins on Receivables Management Growth

By Patrick Lunsford, CollectionIndustry.com

The West Corporation yesterday announced results from its first quarter of operations in 2005. The company reported revenues of $359.6 million for the quarter, a 24.3% increase from the first quarter of 2004. Operating income also rose 32.1% to $44.7 million reflecting increased margins.

In the earnings release, the company attributed the operating margins improvement to traditionally higher margin segments like Conferencing and Receivables Management. West also experienced improved margins in the Communications Services and Receivables Management segments.

In a statement, West CEO Thomas Barker commented, “We are pleased to report solid growth in each of our business segments. Our continued investment through capital expenditures and acquisitions has yielded outstanding operating results, demonstrating the strength of our overall business.”

The statement alludes to one major acquisition the company pulled off last year. In July, West announced it was purchasing Worldwide Asset Management, a major player in debt buying and collecting.

To underscore the impact the West Receivables Management segment may have on the collection industry as a whole, one need only to look at the operating data broken out by select segments West provided in the earnings statement. The Receivables Management group brought in $54 million in revenues in the first quarter alone. This reflects a 406.8% increase in revenue from the first quarter of 2004. The increase in operating income was even more dramatic. West reported operating income from the Receivables Management segment of $10.3 million, an 864% increase from the 2004 total.