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Convergys Corporation (NYSE: CVG), a global leader in relationship management, today announced its financial results for the second quarter of 2012.
The company also announced that the Board of Directors approved increasing the authorization for share repurchases to $250 million in the aggregate.
Second Quarter Summary
Total revenue from continuing operations of $491 million, up three percent compared with prior year
Adjusted EBITDA from continuing operations of $58 million, up nine percent compared with prior year
Adjusted EPS from continuing operations of $0.19 compared with $0.17 in the prior year; GAAP EPS of $0.13
5.3 million Convergys shares repurchased year to date at average price of $13.95 per share
$757 million cash and short term investments on balance sheet at quarter end
Raised 2012 guidance for adjusted earnings
“We delivered excellent results from operations with increases in revenue, adjusted EBITDA and adjusted EPS,” said Jeff Fox, president and CEO of Convergys. “With the sale of the Information Management business we simplified our structure into a singularly focused company. Today, Convergys is a well capitalized market-leading customer management business with significant strategic and financial flexibility. We are committed to creating long-term value through close engagement with our clients, investment in operational excellence and disciplined deployment of capital.”
Fox added, “Based on our current financial strength and our confidence in the business, we paid a five-cent dividend, repurchased $74 million of our stock, and are raising our earnings guidance for the full year.”
Information Management Sale and Corporate Simplification Impacts – Convergys completed the sale of its Information Management business for $449 million in May. Consequently, second quarter results include $96 million of primarily non-cash impairment and other charges resulting from the Information Management sale and subsequent actions to simplify the corporate structure.
As discussed in the Form 10-Q for the first quarter of 2012, the sale of the Information Management business in the second quarter triggered an impairment assessment of certain of the company’s reporting units. The company determined that the estimated fair value of the Customer Interaction Technology reporting unit within the Customer Management segment was less than its carrying value due in part to the removal of Information Management client sales of this unit’s products. Consequently, second-quarter 2012 operating results include a $46 million non-cash goodwill impairment of the Customer Interaction Technology reporting unit which is reported in the Customer Management segment.