OMAHA, NE – West Corporation (Nasdaq: WSTC), a leading provider of outsourced communication solutions, today announced that InterCall Inc., a wholly owned subsidiary of West, has entered into an agreement to acquire Sprint conferencing-related assets for $207 million in cash. The acquisition is expected to close within 30 days and will be funded with cash on hand and West’s existing bank credit facility. West and Sprint will also enter into a strategic alliance to jointly market and sell conferencing services. West will make additional future payments to Sprint based on customer revenues.
Sprint’s conferencing business offers an integrated portfolio that supports audio, video, web and event conferencing. The business is headquartered in Overland Park, KS and services corporate clients and government entities. Sprint will continue to provide a complete portfolio of wireline and wireless services to its customers, including conferencing in partnership with West.
The acquisition of Sprint’s conferencing business is expected to be immediately accretive to earnings and to produce revenues in the range of $63 to $68 million during the remainder of 2005, with operating margins in the range of 20% to 25%. The actual operating margin achieved will be partly dependent on the amortization of intangible expenses and certain integration costs that will be finalized after the acquisition closes.
“The addition of Sprint’s conferencing assets and the strategic alliance are important milestones in the growth of our Conferencing segment,” explained Tom Barker, Chief Executive Officer of West Corporation. “This move will allow us to combine the expertise of InterCall and Sprint to effectively grow our Conferencing business, leverage the Sprint sales force, and increase the diversity of our blue-chip client base.”
“Although Sprint has shifted its wireline strategy to focus on products that offer profitable growth and customer migration to wireless-enabled and IP driven solutions, conferencing remains an integral part of the telecom services we provide to our customers. The agreement with West will allow us to continue to sell “best in class” conferencing services to customers as part of an integrated communications portfolio, while providing the opportunity, through InterCall, to offer enhanced conferencing solutions in a more cost effective manner,” explained Howard Janzen, President of Sprint Business Solutions – Sprint.
Outlook
In light of this acquisition and increased demand for the West’s Receivables Management services, the company now anticipates the following results for the year ended December 31, 2005. This guidance assumes no additional acquisitions or changes in the current operating environment.
| 2005 Financial Outlook* | ||
| Consolidated Financial Outlook | Original** | Updated |
| Revenue | $1,375 – $1,425 | $1,455 – $1,510 |
| Operating Margin | 15.0% – 15.75% | 15.5% – 16.5% |
| Net Income | $120 – $130 | $130 – $140 |
| Cash Flow from Operations | $190 – $210 | $210 – $230*** |
| Capital Expenditures | $60 – $70 | $65 – $75 |
Figures in millions, except percentages
* Assumes acquisition of Sprint conferencing occurs 6/1/05
** As issued on December 15th, 2004
*** This estimate is net of $15 to $20 million in additional cash over the first few months following the acquisition, which will be used to fund new accounts receivables and other working capital requirements
Conference Call
The company will hold a conference call to discuss this acquisition on May 10 at 10 AM Central Time. Investors may access the call by calling 1-888-412- 9257 or by visiting the Investor Relations section of the West Corporation website at http://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
West Corporation is a leading provider of outsourced communication solutions to many of the world’s 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, customer care and retention services, interactive voice response services, and conferencing and accounts receivable management services.
