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CSG Systems International Reports Results For Third Quarter 2012

CSG Systems International, Inc. (Nasdaq: CSGS), a global provider of software- and services-based business support solutions that help clients generate revenue and maximize customer relationships, today reported results for the quarter ended September 30, 2012.

Key Financial Highlights :
  • Third quarter 2012 results:
    • Total revenues were $190.0 million.
    • Non-GAAP operating income was $31.1 million, or 16.4% of total revenues and GAAP operating income was $21.7 million, or 11.4% of total revenues.
    • Non-GAAP earnings per diluted share (EPS) was $0.50. GAAP EPS was $0.29.
  • Cash flows from operations for the quarter were $23.7 million.
  • During the quarter, CSG repurchased 150,000 shares of its common stock for $2.7 million (weighted-average price of $18.14 per share) under its stock repurchase program.

“We continue to remain confident in our ability to achieve the high end of our 2012 financial guidance for both revenues and non-GAAP EPS,” Peter Kalan, chief executive officer and president of CSG Systems, said. “This confidence comes from our ability to find new ways to help our clients be successful in generating revenues, improving their customers’ experiences and becoming more efficient in their operations. In spite of the challenging economic environment facing communications service providers worldwide, we continue to see decisions being made on projects that have a clear objective and quantifiable return on investment. ”

Financial Overview (unaudited)

(in thousands, except per share amounts and percentages):
  Quarter Ended September 30,   Nine Months Ended September 30,





Percent Change





Percent Change

$ 190,001 $ 182,753 4 % $ 558,859 $ 547,157 2 %
Non-GAAP Results:
Operating Income $ 31,071 $ 33,315 (7 )% $ 102,517 $ 99,044 4 %
Operating Income Margin 16.4 % 18.2 % - 18.3 % 18.1 % -
EPS $ 0.50 $ 0.58 (14 )% $ 1.66 $ 1.61 3 %
GAAP Results:
Operating Income $ 21,728 $ 22,767 (5 )% $ 74,425 $ 69,242 7 %
Operating Income Margin 11.4 % 12.5 % - 13.3 % 12.7 % -
EPS $ 0.29 $ 0.32 (9 )% $ 1.02 $ 0.93 10 %

For additional information and reconciliations regarding CSG’s use of non-GAAP financial measures, please refer to the attached Exhibit 2 and the Investor Relations section of CSG’s website at

Results of Operations

Revenues: Total revenues for the third quarter of 2012 were $190.0 million, a 4% increase when compared to revenues of $182.8 million for the third quarter of 2011, and a 3% increase when compared to $183.9 million for the second quarter of 2012. These revenue increases can be primarily attributed to the additional revenues generated from the Ascade business that CSG acquired in mid-July along with increased revenues from various ancillary services during the current quarter.

Non-GAAP Results: Non-GAAP operating income for the third quarter of 2012 was $31.1 million, or 16.4% of total revenues, compared to $33.3 million, or 18.2%, for the third quarter of 2011. Non-GAAP operating income for the second quarter of 2012 was $33.1 million, or 18.0% of total revenues. The year-over-year decrease in operating income and operating income margin is mainly due to the expected increases in data processing and employee-related costs, as well as the dilutive impact of the acquired Ascade business. The sequential decrease in operating income and operating income margin reflects an increase in employee-related costs and the dilutive impact of the acquired Ascade business.

Non-GAAP EPS for the third quarter of 2012 was $0.50, compared to non-GAAP EPS of $0.58 for the third quarter of 2011, and $0.56 for the second quarter of 2012, with these decreases reflective of the lower operating income for the third quarter of 2012 as discussed above.

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