This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Convergys Reports Fourth Quarter Results

Convergys Corporation (NYSE: CVG), a global leader in customer management, today announced its financial results for the fourth quarter of 2012.

The Company also announced that the Board of Directors approved raising its regular quarterly dividend 20 percent to $0.06 per share and increasing the authorization for share repurchase to $250 million in the aggregate.

Fourth Quarter Summary

  • Total revenue from continuing operations of $509 million, up two percent compared with prior year;
  • GAAP EPS from continuing operations of $0.27; adjusted EPS from continuing operations of $0.25, compared with $0.21 in the prior year;
  • Adjusted EBITDA from continuing operations of $62 million, up five percent compared with adjusted EBITDA in the prior year;
  • Repurchased 3.7 million Convergys shares for $59 million, or $16.05 per share;
  • $639 million cash and short term investments on balance sheet at quarter end;
  • 2013 outlook includes continuing revenue and profit improvement with EPS growth to exceed 10 percent compared with 2012 adjusted results.

“We delivered our seventh consecutive quarter of revenue growth and profit improvement,” said Andrea Ayers, president and CEO. “Entering 2013, we continue to execute our growth strategy and expect another year of performance improvement. We repurchased $59 million of our stock in the fourth quarter consistent with our disciplined capital deployment strategy. Our strong capital position and confidence in the future allows us to pursue strategic growth and return cash to investors. We are pleased to raise the quarterly dividend 20 percent and increase our share repurchase authorization to $250 million.”

Fourth Quarter Results – Continuing Operations

Having completed the corporate simplification, the Company now reports results as a single segment.

Revenue – Revenue from continuing operations was $509 million, a two percent increase compared with $501 million in the same period last year. This included transition services revenue related to discontinued operations in both periods of $5 million and $1 million, respectively.

Operating Income – Adjusted operating income from continuing operations was $38 million, compared with $37 million in the same period last year. Including the Information Management sale impacts discussed below, GAAP operating income from continuing operations was $31 million in both periods.

EBITDA – Adjusted EBITDA was $62 million, compared with $59 million in the same period last year. Adjusted EBITDA excludes the Information Management sale impacts discussed below, and includes non-cash long-term compensation expense in both periods of $5 million and $4 million, respectively.

Net Income – Adjusted net income from continuing operations was $28 million, or $0.25 per diluted share, compared with $26 million, or $0.21 per diluted share, in the same period last year. Adjusted results exclude the Information Management sale impacts and tax benefit items discussed below and apply a normalized tax rate of 24 percent. GAAP net income from continuing operations was $30 million, or $0.27 per diluted share, compared with $39 million, or $0.33 per diluted share, in the same period last year.

Share Repurchase Convergys repurchased 3.7 million shares in the fourth quarter at a cost of $59 million. For the full year 2012, the Company repurchased 12.3 million shares at a cost of $184 million, or $15.04 per share. The Board of Directors of the Company increased the current authorization to purchase outstanding shares to $250 million.

Quarterly Dividend Convergys paid its regular quarterly dividend of $0.05 per share in January to holders of record at the close of business on December 21, 2012. The first raised dividend payment of $0.06 is scheduled to be made on April 5, 2013, to shareholders of record at the close of business on March 22, 2013.

Free Cash Flow – Free cash flow was a net use of $26 million, including $35 million for pension liability reduction and Information Management sale tax payments, compared with net cash inflows of $30 million, including approximately $15 million contribution from Information Management, in the same period last year.

Net Cash and Short Term Investments – At December 31, 2012, cash and short term investments were $639 million, debt maturing in one year was $1 million and long term debt was $60 million. Net cash and short term investments totaled $578 million at December 31, 2012, compared with $668 million at September 30, 2012, and $318 million at the end of the fourth quarter last year.

Information Management Sale Impacts and Certain Other Tax Items – GAAP fourth-quarter 2012 results from continuing operations include the expected $7 million non-cash pension plan settlement charge related to the Information Management business sold last year, and a $6 million tax benefit largely to reflect the mix of income by jurisdictions. GAAP fourth-quarter 2011 results include $6 million Information Management-related costs that did not qualify for presentation as discontinued operations and $17 million tax benefits from international transactions and certain discrete items.

Reconciliation tables of GAAP to non-GAAP results are attached.

1 of 11

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,912.11 -70.48 -0.42%
S&P 500 1,969.95 -8.96 -0.45%
NASDAQ 4,442.6980 -2.2110 -0.05%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs