8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 or 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): October 23, 2007

CSG SYSTEMS INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Delaware	0-27512	47-0783182
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

9555 Maroon Circle, Englewood, CO	80112
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (303) 200-2000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

The following information is furnished pursuant to Item 2.02 (Results of Operations and Financial Condition). This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

On October 23, 2007, CSG Systems International, Inc. issued a press release relating to the results of its operations for the three months ended September 30, 2007. A copy of such press release is attached to this Form 8-K as Exhibit 99.1 and hereby incorporated by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

99.1 Press release of CSG Systems International, Inc. dated October 23, 2007

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: October 23, 2007

CSG SYSTEMS INTERNATIONAL, INC.
By:	/s/ Randy R. Wiese
	Randy R. Wiese,
	Chief Financial Officer and Principal Accounting Officer

3

CSG Systems International, Inc.

Form 8-K

Exhibit Index

99.1 Press release of CSG Systems International, Inc. dated October 23, 2007

4

EX-99.1

Exhibit 99.1

NEWS RELEASE

FOR IMMEDIATE RELEASE

For more information, contact:

Roger Metz, Vice President

(303) 804-4082

E-mail: roger_metz@csgsystems.com

CSG SYSTEMS INTERNATIONAL, INC. REPORTS

THIRD QUARTER 2007 RESULTS

Revenues of $107.6 million;

Income From Continuing Operations of $0.39 per share.

ENGLEWOOD, COLO. (October 23, 2007) — CSG Systems International, Inc. (Nasdaq: CSGS), a leading provider of customer care and billing solutions, today reported results for the quarter ended September 30, 2007.

Third Quarter 2007 Highlights:

• Results from continuing operations were as follows: total revenues were $107.6 million; operating income was $21.6 million; and income from continuing operations was $15.2 million, or $0.39 per diluted share.

• CSG’s third quarter results include the impact of the acquired Prairie Interactive Messaging (Prairie) business, which was not included in CSG’s previous financial guidance for the quarter. Additionally, income from continuing operations includes a benefit of $0.02 per diluted share when compared to CSG’s previous guidance expectations as a result of lower outstanding shares for the quarter due to higher than expected stock repurchases during the quarter. Absent the impact of these items, CSG’s revenue and earnings per diluted share were within the range of CSG’s financial guidance for the quarter.

• Cash flows from operations for the quarter were $35.7 million, which came in above CSG’s expectations of $30-32 million for the quarter, primarily due to normal changes in certain operating assets and liabilities for the quarter.

• For the quarter, CSG repurchased 5.6 million shares of its common stock for $129.7 million (weighted-average price of $23.34 per share) under its stock repurchase program.

• On July 9, 2007, CSG completed its acquisition of ComTec, Inc. (ComTec), a provider of statement processing solutions headquartered in Fairfield, New Jersey.

• On August 10, 2007, CSG closed on its acquisition of Prairie Voice Services, Inc., a provider of interactive messaging services headquartered in Omaha, Nebraska, and renamed the company Prairie Interactive Messaging, Inc.

“Every day, CSG plays a critical role in our clients’ success by helping them interact with their customers in meaningful, efficient and cost-effective ways,” said Ed Nafus, chief executive officer and president of CSG Systems International, Inc. “As our clients’ businesses expand in an increasingly competitive environment, CSG continuously seeks innovative ways to help clients improve levels of customer service and deploy new products and services. During the third quarter, we furthered our progress on this front by closing two strategic acquisitions, ComTec and Prairie Interactive Messaging. With these acquisitions, CSG gained capabilities that extend and complement our core offerings, while creating a path for CSG to grow its presence in new industries.”

-more-

CSG Systems International, Inc.

October 23, 2007

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Summary GAAP Results of Operations Information (unaudited)

(in thousands, except per share amounts and percentages):

	Three Months Ended September 30,							Nine Months Ended September 30,
	2007		2006			Percent Change		2007		2006			Percent Change
Continuing operations:
Total revenues	$	107,561	$	98,450		9	%	$	305,809	$	286,463		7	%
Operating income		21,568		22,530		(4	)%		63,183		66,523		(5	)%
Income from continuing operations		15,202		17,364		(12	)%		46,599		48,435		(4	)%
Discontinued operations, net of tax		—		(3,760	)	NM			269		(3,760	)	107	%
Net income		15,202		13,604		12	%		46,868		44,675		5	%
Diluted earnings per share:
Income from continuing operations	$	0.39	$	0.37		5	%	$	1.11	$	1.03		8	%
Discontinued operations, net of tax		—		(0.08	)	NM			0.01		(0.08	)	113	%
Net income	$	0.39	$	0.29		34	%	$	1.12	$	0.95		18	%

Third Quarter 2007 Results From Continuing Operations

Revenues. Total revenues for the third quarter of 2007 were $107.6 million, which represents an increase of nine percent when compared to $98.5 million for the same period in 2006, and an increase of eight percent when compared to $99.5 million for the second quarter of 2007. A significant portion of the increase in revenue in the third quarter, when compared to these prior quarters, relates primarily to the ComTec and Prairie businesses acquired by CSG during the third quarter.

The components of total revenues were as follows:

• processing revenues for the third quarter of 2007 were $97.8 million, an increase of eight percent when compared to $90.3 million for the same period last year, and the second quarter of 2007. The revenues of ComTec and Prairie fall within this revenue classification, which accounts for a significant portion of the increase over the prior periods; and

• software, maintenance and services revenues were $9.8 million for the current quarter, a 20 percent increase when compared to $8.2 million for the same period last year, and a seven percent increase when compared to $9.2 million for the second quarter of 2007.

Due to the timing of the transaction, CSG’s financial guidance for the third quarter of 2007 did not include the impact of Prairie, which is discussed in further detail below. As a result, excluding the Prairie results, revenues were approximately $105 million, which is within the range of CSG’s previous financial guidance of $105—$107 million for the quarter.

Results of Operations. Income from continuing operations presented in accordance with generally accepted accounting principles (“GAAP”) for the third quarter of 2007 was $15.2 million ($0.39 per diluted share), compared to $17.4 million ($0.37 per diluted share) for the same period last year, and $15.6 million ($0.37 per diluted share) for the second quarter of 2007.

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October 23, 2007

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CSG’s income from continuing operations of $0.39 per diluted share for the current quarter includes a benefit of $0.02 per diluted share when compared to CSG’s previous guidance expectations as a result of lower outstanding shares for the quarter due to higher than expected stock repurchases during the quarter. Absent the impact of this $0.02 benefit, CSG’s earnings per diluted share were within the range of CSG’s previous financial guidance of $0.36 - $0.38 per diluted share for the quarter.

Supplemental Data

The following information is provided to assist readers in further evaluating CSG’s performance (in thousands, except per share amounts):

	Three Months Ended September 30, 2007				Three Months Ended September 30, 2006
	Amount (1)		Per Diluted Share Impact (2)		Amount (1)		Per Diluted Share Impact (2)
Certain non-cash expenses:
Depreciation	$	3,422	$	0.06	$	2,600	$	0.04
Amortization of intangible assets		4,556		0.08		4,115		0.06
Stock-based employee compensation		3,274		0.05		3,085		0.04
Total	$	11,252	$	0.19	$	9,800	$	0.14
	Nine Months Ended September 30, 2007				Nine Months Ended September 30, 2006
	Amount (1)		Per Diluted Share Impact (2)		Amount (1)		Per Diluted Share Impact (2)
Certain key operating income items:
Restructuring charges	$	545	$	0.01	$	2,368	$	0.03
Certain non-cash expenses:
Depreciation	$	9,328	$	0.14	$	7,651	$	0.10
Amortization of intangible assets		13,080		0.20		11,646		0.16
Stock-based employee compensation		8,126		0.12		9,114		0.12
Total	$	30,534	$	0.46	$	28,411	$	0.38

(1) These items (on a pretax basis) are calculated in accordance with GAAP, and are reflected as part of continuing operations in the accompanying Unaudited Condensed Consolidated Statements of Income.

(2) This represents the after tax impact to income from continuing operations on a per diluted share basis using CSG’s effective income tax rates from continuing operations of approximately 36% for the three and nine months ended September 30, 2007, and 35% and 37%, respectively, for the three and nine months ended September 30, 2006.

Total customer accounts processed on CSG's systems as of September 30, 2007, were 45.1 million, consistent with the number of customer accounts processed as of June 30, 2007.

Prairie Interactive Messaging Acquisition

On August 10, 2007, CSG closed on its acquisition of Prairie Voice Services, Inc., a privately-held provider of interactive messaging services headquartered in Omaha, Nebraska, for approximately $41 million in net cash. In addition, the merger agreement provides for contingent payments of up to $6 million through the end of 2009 upon the achievement of certain predetermined operating criteria. In connection with the purchase, CSG and Prairie agreed to rename the company Prairie Interactive Messaging, Inc., which operates as a wholly-owned CSG company.

CSG Systems International, Inc.

October 23, 2007

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CSG acquired Prairie to extend its suite of products and solutions to help its clients maximize the value of interactions with their customers with a set of unified, interactive messaging solutions that can interact with customers through outbound and inbound automated voice, text/SMS, e-mail and fax messages. Additionally, this acquisition extends CSG’s reach into industry verticals such as financial services, telecommunications, direct response, and contact centers.

Financial Condition and Cash Flows

Certain key balance sheet items as of the end of the indicated periods are as follows (in thousands):

	September 30, 2007		June 30, 2007		December 31, 2006
Cash, cash equivalents, and short-term investments (3)	$	177,328	$	338,478	$	415,490
Net trade accounts receivable		109,952		102,635		110,020

Certain key operating cash flow items for the indicated quarters then ended are as follows (in thousands):

	September 30, 2007		June 30, 2007			December 31, 2006
Cash Flows from Operating Activities:
Operations	$	28,404	$	28,217		$	29,549
Changes in operating assets and liabilities		7,266		(3,719	)		(680	)
Net cash provided by operating activities	$	35,670	$	24,498		$	28,869

(3) The sequential decrease of approximately $161 million between June 30, 2007, and September 30, 2007, is primarily due to $129.7 million of stock repurchases made during the quarter and total net cash paid of approximately $63 million for the ComTec and Prairie acquisitions, offset by cash generated from operations of $35.7 million.

Stock Repurchase Program

During the third quarter of 2007, CSG repurchased 5.6 million shares of its common stock for $129.7 million (a weighted-average price of $23.34 per share) under its stock repurchase program. Through September 30, 2007, CSG has purchased 12.0 million shares for a total of $295.0 million (a weighted-average price of $24.70 per share) towards its planned $350 million stock repurchases announced in August 2006.

Fourth Quarter 2007 and Full Year 2007 Financial Guidance

A summary of CSG’s financial guidance for continuing operations for the fourth quarter and full year 2007 is as follows (in millions, except for per share amounts and percentages). These amounts include the expected GAAP financial impact of the acquired ComTec and Prairie businesses.

CSG Systems International, Inc.

October 23, 2007

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	Fourth Quarter		Full Year
Revenues	$	111-$113	$	417-$419
Operating Margins		20%		20%-21%
Effective Income Tax Rate		37%-38%		36%-37%
Earnings per Diluted Share	$	0.40-$0.42	$	1.50-$1.52
Cash Flow from Operations	$	31-$32	$	127-$128

There are certain non-cash items included in CSG’s fourth quarter and full year 2007 income from continuing operations per diluted share guidance noted above. The following table outlines the expected impact of these items, and is provided to assist readers in further evaluating CSG’s expected financial performance for these periods (in thousands, except per share amounts):

	Fourth Quarter - 2007		Full Year – 2007
Certain non-cash expenses (4):
Depreciation	$	3,800	$	13,200
Amortization of intangible assets		4,700		17,800
Stock-based employee compensation		3,300		11,400
Total	$	11,800	$	42,400
Per diluted share impact (5)	$	0.21	$	0.67

(4) These items (on a pretax basis) are calculated in accordance with GAAP and take into account estimates related to the ComTec and Prairie acquisitions.

(5) This represents the after tax impact to income from continuing operations on a per diluted share basis using CSG’s estimated effective income tax rates from continuing operations as noted above.

Conference Call

CSG will host a one-hour conference call on Tuesday, October 23, at 5 p.m. EDT, to discuss CSG's third quarter results. The call will be carried live and archived on the Internet. A link to the conference call is available at www.csgsystems.com.

Additional Information

For additional information about CSG, please visit CSG’s web site at www.csgsystems.com. Additional information can be found in the Investor Relations section of the web site.

About CSG Systems International

Headquartered in Englewood, Colorado, CSG Systems International (Nasdaq: CSGS) is a leading provider of outsourced billing, customer care and print and mail solutions and services supporting the North American cable and direct broadcast satellite markets. CSG’s solutions support some of the world’s largest and most innovative providers of bundled multi-channel video, Internet, voice and IP-based services. CSG’s unique combination of solutions, services and expertise ensure that cable and satellite operators can continue to rapidly launch new service offerings, improve operational efficiencies and deliver a high-quality customer experience in a competitive and ever-changing marketplace. CSG is a S&P Midcap 400 company. For more information, visit our website at www.csgsystems.com.

CSG Systems International, Inc.

October 23, 2007

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Safe-Harbor Statement

This news release contains forward-looking statements as defined under the Securities Act of 1933, as amended, that are based on assumptions about a number of important factors and involve risks and uncertainties that could cause actual results to differ materially from what appears in this news release. These factors include, but are not limited to: 1) CSG's ability to continue to perform satisfactorily and maintain good customer relations with its four largest clients, Comcast Corporation, Echostar Communications, Time Warner, Inc., and Charter Communications, which combined make up approximately 70% of CSG’s revenues; 2) the continued acceptance of CSG’s Advanced Convergent Platform and its related products and services; 3) CSG's ability to enhance current products and develop new technology that will retain existing clients and capture new market share; 4) significant forays into new markets, which may prove costly and unprofitable; 5) the degree to which CSG's expectations of market penetration and consumer acceptance of advanced IP services prove true — and even if realized, CSG’s ability to meet the billing and customer care needs of those markets; 6) client consolidation, which has decreased the number of potential buyers for many of CSG's products and services; 7) CSG's ability to renew contracts and sell additional products and services to existing and new clients; 8) CSG's ability to successfully deliver on lengthy and/or complex implementation projects, which by their nature, carry much more risk; and 9) CSG’s ability to successfully integrate and manage acquired businesses or assets in order to achieve the expected strategic, operating and financial goals established for such acquisitions. This list is not exhaustive and readers are encouraged to review the additional risks and important factors described in CSG's reports on Forms 10-K and 10-Q and other filings made with the SEC.

FINANCIALS TO FOLLOW

CSG Systems International, Inc.

October 23, 2007

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CSG SYSTEMS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS-UNAUDITED

(in thousands, except share and per share amounts)

	September 30, 2007			December 31, 2006
ASSETS
Current assets:
Cash and cash equivalents	$	118,867		$	240,687
Short-term investments		58,461			174,803
Total cash, cash equivalents and short-term investments		177,328			415,490
Trade accounts receivable-
Billed, net of allowance of $1,589 and $1,143		109,952			110,020
Unbilled and other		5,818			5,555
Deferred income taxes		10,494			8,927
Other current assets		7,784			5,636
Total current assets		311,376			545,628
Property and equipment, net of depreciation of $70,115 and $66,656		28,343			23,680
Software, net of amortization of $34,013 and $32,989		9,081			7,725
Goodwill		59,891			14,228
Client contracts, net of amortization of $94,543 and $82,486		35,131			36,024
Deferred income taxes		15,591			19,617
Other assets		6,848			6,594
Total assets	$	466,261		$	653,496
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Client deposits	$	26,887		$	23,645
Trade accounts payable		22,229			15,509
Accrued employee compensation		18,844			20,962
Deferred revenue		15,520			17,586
Income taxes payable		1,467			3,651
Other current liabilities		11,889			10,158
Total current liabilities		96,836			91,511
Non-current liabilities:
Long-term debt		230,000			230,000
Deferred revenue		9,292			8,632
Income taxes payable		4,490			—
Other non-current liabilities		4,745			5,619
Total non-current liabilities		248,527			244,251
Total liabilities		345,363			335,762
Stockholders’ equity:
Preferred stock, par value $.01 per share; 10,000,000 shares authorized; zero shares issued and outstanding		—			—
Common stock, par value $.01 per share; 100,000,000 shares authorized; 37,136,239 shares and 46,831,643 shares outstanding		623			616
Additional paid-in capital		347,989			340,564
Treasury stock, at cost, 25,142,208 shares and 14,776,238 shares		(612,863	)		(360,259	)
Accumulated other comprehensive income (loss):
Unrealized gain (loss) on short-term investments, net of tax		(4	)		25
Unrecognized pension plan losses and prior service costs, net of tax		(852	)		(852	)
Accumulated earnings		386,005			337,640
Total stockholders’ equity		120,898			317,734
Total liabilities and stockholders’ equity	$	466,261		$	653,496

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October 23, 2007

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CSG SYSTEMS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME-UNAUDITED

(in thousands, except per share amounts)

	Three Months Ended						Nine Months Ended
	September 30, 2007			September 30, 2006			September 30, 2007			September 30, 2006
Revenues:
Processing and related services	$	97,769		$	90,272		$	277,691		$	264,408
Software, maintenance and services		9,792			8,178			28,118			22,055
Total revenues		107,561			98,450			305,809			286,463
Cost of revenues:
Processing and related services		50,607			44,867			138,571			129,457
Software, maintenance and services		6,016			5,829			18,615			15,555
Total cost of revenues		56,623			50,696			157,186			145,012
Gross margin (exclusive of depreciation)		50,938			47,754			148,623			141,451
Operating expenses:
Research and development		15,415			12,097			43,254			32,872
Selling, general and administrative		10,566			10,449			32,313			32,037
Depreciation		3,422			2,600			9,328			7,651
Restructuring charges		(33	)		78			545			2,368
Total operating expenses		29,370			25,224			85,440			74,928
Operating income		21,568			22,530			63,183			66,523
Other income (expense):
Interest expense		(1,684	)		(1,862	)		(5,365	)		(5,650	)
Interest and investment income, net		3,707			6,046			14,317			15,993
Other, net		(2	)		—			133			(52	)
Total other		2,021			4,184			9,085			10,291
Income from continuing operations before income taxes		23,589			26,714			72,268			76,814
Income tax provision		(8,387	)		(9,350	)		(25,669	)		(28,379	)
Income from continuing operations		15,202			17,364			46,599			48,435
Discontinued operations:
Income from discontinued operations, includes net pretax loss on disposal in 2006 of $6,000		—			(6,555	)		—			(6,555	)
Income tax benefit		—			2,795			269			2,795
Discontinued operations, net of tax		—			(3,760	)		269			(3,760	)
Net income	$	15,202		$	13,604		$	46,868		$	44,675
Basic earnings (loss) per common share:
Income from continuing operations	$	0.39		$	0.37		$	1.12		$	1.04
Discontinued operations, net of tax		—			(0.08	)		0.01			(0.08	)
Net income	$	0.39		$	0.29		$	1.13		$	0.96
Diluted earnings (loss) per common share:
Income from continuing operations	$	0.39		$	0.37		$	1.11		$	1.03
Discontinued operations, net of tax		—			(0.08	)		0.01			(0.08	)
Net income	$	0.39		$	0.29		$	1.12		$	0.95
Weighted-average shares outstanding:
Basic		38,587			46,549			41,633			46,659
Diluted		38,969			47,154			41,999			47,228

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October 23, 2007

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CSG SYSTEMS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS-UNAUDITED

(in thousands)

	Nine Months Ended
	September 30, 2007			September 30, 2006
Cash flows from operating activities:
Net income	$	46,868		$	44,675
Adjustments to reconcile net income to net cash provided by operating activities -
Depreciation		9,328			7,651
Amortization		13,967			12,550
Restructuring charge for abandonment of facilities		308			401
Net pretax loss on disposition of discontinued operations		—			6,000
Gain on short-term investments		(3,061	)		(567	)
Deferred income taxes		9,154			9,740
Excess tax benefits from stock-based compensation awards		(870	)		(2,845	)
Stock-based employee compensation		8,126			9,114
Changes in operating assets and liabilities:
Trade accounts and other receivables, net		7,310			(235	)
Other current and non-current assets		1,200			(1,807	)
Income taxes payable/receivable		5,385			11,128
Trade accounts payable and accrued liabilities		(478	)		(8,103	)
Deferred revenue		(1,406	)		1,579
Net cash provided by operating activities		95,831			89,281
Cash flows from investing activities:
Net payments from the disposition of discontinued operations		—			(6,436	)
Purchases of property and equipment		(12,386	)		(5,198	)
Proceeds from sale of aircraft held for sale		—			7,376
Purchases of short-term investments		(189,536	)		(183,716	)
Proceeds from sale/maturity of short-term investments		309,800			98,100
Acquisition of businesses, net of cash acquired		(65,382	)		(21,533	)
Acquisition of and investments in client contracts		(6,914	)		(6,549	)
Net cash provided by (used in) investing activities		35,582			(117,956	)
Cash flows from financing activities:
Proceeds from issuance of common stock		1,786			7,431
Repurchase of common stock		(255,889	)		(44,568	)
Payments on acquired equipment financing		—			(481	)
Excess tax benefits from stock-based compensation awards		870			2,845
Net cash used in financing activities		(253,233	)		(34,773	)
Net decrease in cash and cash equivalents		(121,820	)		(63,448	)
Cash and cash equivalents, beginning of period		240,687			346,113
Cash and cash equivalents, end of period	$	118,867		$	282,665
Supplemental disclosures of cash flow information:
Net cash paid during the period for -
Interest	$	3,193		$	3,195
Income taxes		10,790			5,265