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): August 6, 2013
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) |
Registrants 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 August 6, 2013, CSG Systems International, Inc. (CSG) issued a press release relating to the results of its operations for the quarter and six months ended June 30, 2013. A copy of such press release is attached to this Form 8-K as Exhibit 99.1 and hereby incorporated by reference.
In the attached press release, CSG makes reference to non-GAAP financial measures. Non-GAAP financial measures are not measures of performance under GAAP, and therefore should not be considered in isolation or as a substitute for GAAP financial information. There are limitations with the use of non-GAAP financial measures since they are not based on any comprehensive set of accounting rules or principles, and the way in which CSG calculates non-GAAP financial measures may differ from the way in which other companies calculate similar non-GAAP financial measures. A more detailed discussion of CSGs use of non-GAAP financial measures, to include reconciliations of the non-GAAP financial measures to the comparable GAAP financial measures, is contained in the attached press release and is posted to the Companys website at www.csgi.com.
Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits
99.1 | Press release of CSG Systems International, Inc. dated August 6, 2013 |
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: August 6, 2013 | ||||||
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 August 6, 2013 |
4
Exhibit 99.1
PRESS RELEASE
For Immediate Release
CSG SYSTEMS INTERNATIONAL REPORTS RESULTS
FOR SECOND QUARTER 2013
ENGLEWOOD, COLO. (August 6, 2013) CSG Systems International, Inc. (Nasdaq: CSGS), a leading global provider of interactive transaction-driven solutions and services, today reported results for the quarter ended June 30, 2013.
Key Financial Highlights:
| Second quarter 2013 results: |
| Total revenues were $186.1 million. |
| Non-GAAP operating income was $30.4 million, or 16.3% of total revenues and GAAP operating income was $21.7 million, or 11.6% of total revenues. |
| Non-GAAP earnings per diluted share (EPS) was $0.57. GAAP EPS was $0.37. |
| Cash flows from operations for the quarter were $38.8 million. |
| CSG signed its first significant multi-year managed services agreement with a tier one communications provider in Asia Pacific. |
| During the quarter, CSG announced that it would be paying a quarterly cash dividend for the first time in its history. The initial quarterly cash dividend of $0.15 per share of common stock was paid to stockholders on July 25, 2013. |
| During the quarter, CSG repurchased approximately 166,000 shares of its common stock for $3.5 million (weighted-average price of $21.01 per share) under its stock repurchase program. |
This quarter we continued to make solid progress in extending our role in our clients operations and helping various providers monetize content and strengthen their relationships with their customers, said Peter Kalan, president and chief executive officer for CSG International. I believe that we have set this company up to deliver revenue growth and operating margin improvements in subsequent years as we successfully execute on the numerous opportunities that this dynamic and evolving market presents.
CSG Systems International, Inc.
August 6, 2013
Page 2
Financial Overview (unaudited)
(in thousands, except per share amounts and percentages):
Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
2013 | 2012 | Percent Change |
2013 | 2012 | Percent Change |
|||||||||||||||||||
Revenues |
$ | 186,107 | $ | 183,851 | 1 | % | $ | 366,739 | $ | 368,858 | (1 | )% | ||||||||||||
Non-GAAP Results: |
||||||||||||||||||||||||
Operating Income |
$ | 30,362 | $ | 33,135 | (8 | )% | $ | 58,010 | $ | 71,446 | (19 | )% | ||||||||||||
Operating Income Margin |
16.3 | % | 18.0 | % | | 15.8 | % | 19.4 | % | | ||||||||||||||
EPS |
$ | 0.57 | $ | 0.56 | 2 | % | $ | 1.05 | $ | 1.16 | (9 | )% | ||||||||||||
GAAP Results: |
||||||||||||||||||||||||
Operating Income |
$ | 21,681 | $ | 23,745 | (9 | )% | $ | 39,716 | $ | 52,697 | (25 | )% | ||||||||||||
Operating Income Margin |
11.6 | % | 12.9 | % | | 10.8 | % | 14.3 | % | | ||||||||||||||
EPS |
$ | 0.37 | $ | 0.37 | 0 | % | $ | 0.83 | $ | 0.73 | 14 | % |
For additional information and reconciliations regarding CSGs use of non-GAAP financial measures, please refer to the attached Exhibit 2 and the Investor Relations section of CSGs website at www.csgi.com.
Results of Operations
Revenues: Total revenues for the second quarter of 2013 were $186.1 million, a 1% increase when compared to revenues of $183.9 million for the second quarter of 2012, and a 3% increase when compared to $180.6 million for the first quarter of 2013. Revenues for the second quarter of 2013 reflect the first full quarter impact of the pricing adjustments associated with both the Comcast and Time Warner contract extensions. This was offset by increased software and services revenues, which contributed to the increases in overall total revenues.
Non-GAAP Results: Non-GAAP operating income for the second quarter of 2013 was $30.4 million, or 16.3% of total revenues, compared to $33.1 million, or 18.0%, for the second quarter of 2012. Non-GAAP operating income for the first quarter of 2013 was $27.6 million, or 15.3% of total revenues. The year-over-year decrease in operating income and operating income margin reflects the impact of the Comcast and Time Warner pricing adjustments. The sequential quarterly increase can be attributed to the increased software and services revenues generated during the second quarter of 2013 when compared to the first quarter of 2013, as mentioned above.
Non-GAAP EPS for the second quarter of 2013 was $0.57, relatively consistent when compared to non-GAAP EPS of $0.56 for the second quarter of 2012. Non-GAAP EPS for the first quarter of 2013 was $0.48, with the sequential improvement a result of higher software and services revenues in the second quarter of 2013.
GAAP Results: GAAP operating income for the second quarter of 2013 was $21.7 million, or 11.6% of total revenues, compared to $23.7 million, or 12.9%, for the same period in 2012.
CSG Systems International, Inc.
August 6, 2013
Page 3
GAAP EPS for the second quarter of 2013 was $0.37, consistent with that of the second quarter of 2012.
Balance Sheet and Cash Flows
Balance Sheet: Certain key balance sheet items as of the indicated dates are as follows (in thousands):
June 30, 2013 |
March 31, 2013 |
December 31, 2012 |
||||||||||
Cash, cash equivalents, and short-term investments |
$ | 189,294 | $ | 172,703 | $ | 169,321 | ||||||
Net billed trade accounts receivable |
172,521 | 179,093 | 191,943 | |||||||||
Total long-term debt: |
||||||||||||
Par value |
$ | 292,500 | $ | 296,250 | $ | 300,000 | ||||||
Unamortized OID |
(22,678 | ) | (24,003 | ) | (25,302 | ) | ||||||
|
|
|
|
|
|
|||||||
Net debt carrying amount |
$ | 269,822 | $ | 272,247 | $ | 274,698 | ||||||
|
|
|
|
|
|
Cash Flows: Certain key operating cash flow items for the indicated quarters then ended are as follows (in thousands):
June 30, 2013 |
March 31, 2013 |
June 30, 2012 |
||||||||||
Cash Flows from Operating Activities: |
||||||||||||
Operations |
$ | 31,308 | $ | 41,320 | $ | 29,898 | ||||||
Changes in operating assets and liabilities |
7,494 | (18,776 | ) | 6,681 | ||||||||
|
|
|
|
|
|
|||||||
Net cash provided by operating activities |
$ | 38,802 | $ | 22,544 | $ | 36,579 | ||||||
|
|
|
|
|
|
|||||||
Cash Flows from Investing Activities: |
||||||||||||
Purchases of property and equipment |
$ | (6,633 | ) | $ | (4,492 | ) | $ | (11,232 | ) | |||
Cash Flows from Financing Activities: |
||||||||||||
Repurchase of common stock under stock repurchase program |
(3,490 | ) | (6,511 | ) | $ | (5,438 | ) | |||||
Payments on long-term debt |
(3,750 | ) | (3,750 | ) | (10,000 | ) |
During the second quarter of 2013, CSG initiated a quarterly cash dividend in the amount of $0.15 per share of common stock. A total of approximately $5 million was paid to shareholders on July 25, 2013, and therefore will be reported with CSGs cash flow results for the third quarter of 2013. Going forward, CSG expects to pay cash dividends each year in September, December, March, and June, with the amount and timing subject to the Board of Directors approval.
2013 Financial Guidance
CSG is maintaining its financial guidance for the full year 2013 as follows:
Revenues |
$740 - $760 million | |
Non-GAAP EPS |
$2.05 - $2.15 | |
GAAP EPS |
$1.31 - $1.41 | |
Adjusted EBITDA |
$153 - $158 million |
CSG Systems International, Inc.
August 6, 2013
Page 4
For additional information and reconciliations regarding CSGs use of non-GAAP financial measures, please refer to the attached Exhibit 2 and the Investor Relations section of CSGs website at www.csgi.com.
Conference Call
CSG will host a one-hour conference call on August 6, 2013, at 5:00 p.m. ET, to discuss CSGs second quarter results. The call will be carried live and archived on the Internet. A link to the conference call is available at www.csgi.com. In addition, to reach the conference by phone, dial (800) 762-8779 and ask the operator for the CSG International conference call and Liz Bauer, chairperson.
Additional Information
For information about CSG, please visit CSGs web site at www.csgi.com. Additional information can be found in the Investor Relations section of the web site.
About CSG International
CSG Systems International, Inc. (NASDAQ: CSGS) is a market-leading business support solutions and services company serving the majority of the top 100 global communications service providers, including leaders in fixed, mobile and next-generation networks such as AT&T, Comcast, DISH, France Telecom, Orange, T-Mobile, Telefonica, Time Warner Cable, Vodafone, Vivo and Verizon. With over 25 years of experience and expertise in voice, video, data and content services, CSG International offers a broad portfolio of licensed and Software-as-a-Service (SaaS)-based products and solutions that help clients compete more effectively, improve business operations and deliver a more impactful customer experience across a variety of touch points. For more information, visit our website at www.csgi.com.
Forward-Looking Statements
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. Some of these key factors include, but are not limited to the following items:
| CSG derives over forty percent of its revenues from its three largest clients; |
| Continued market acceptance of CSGs products and services; |
| CSGs ability to continuously develop and enhance products in a timely, cost-effective, technically-advanced and competitive manner; |
| CSGs ability to deliver its solutions in a timely fashion within budget, particularly large and complex software implementations; |
| CSGs dependency on the global telecommunications industry, and in particular, the North American telecommunications industry; |
| CSGs ability to meet its financial expectations as a result of increased dependency on software sales, which are subject to greater volatility; |
| Increasing competition in CSGs market from companies of greater size and with broader presence in the communications sector; |
| CSGs ability to successfully integrate and manage acquired businesses or assets to achieve expected strategic, operating and financial goals; |
| CSGs ability to protect its intellectual property rights; |
CSG Systems International, Inc.
August 6, 2013
Page 5
| CSGs ability to maintain a reliable, secure computing environment; |
| CSGs ability to conduct business in the international marketplace; |
| CSGs ability to comply with applicable U.S. and International laws and regulations; and |
| Fluctuations in credit market conditions, general global economic and political conditions, and foreign currency exchange rates. |
This list is not exhaustive and readers are encouraged to review the additional risks and important factors described in CSGs reports on Forms 10-K and 10-Q and other filings made with the SEC.
For more information, contact:
Liz Bauer, Senior Vice President of Investor Relations & Strategic Communications
(303) 804-4065
E-mail: liz.bauer@csgi.com
CSG Systems International, Inc.
August 6, 2013
Page 6
CSG SYSTEMS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS-UNAUDITED
(in thousands)
June 30, 2013 |
December 31, 2012 |
|||||||
ASSETS | ||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 96,849 | $ | 133,747 | ||||
Short-term investments |
92,445 | 35,574 | ||||||
|
|
|
|
|||||
Total cash, cash equivalents, and short-term investments |
189,294 | 169,321 | ||||||
Trade accounts receivable: |
||||||||
Billed, net of allowance of $3,750 and $3,147 |
172,521 | 191,943 | ||||||
Unbilled and other |
43,367 | 33,859 | ||||||
Deferred income taxes |
16,116 | 22,244 | ||||||
Income taxes receivable |
12,441 | 6,469 | ||||||
Other current assets |
22,476 | 17,099 | ||||||
|
|
|
|
|||||
Total current assets |
456,215 | 440,935 | ||||||
Non-current assets: |
||||||||
Property and equipment, net of depreciation of $129,990 and $120,643 |
35,173 | 39,429 | ||||||
Software, net of amortization of $73,941 and $68,513 |
39,036 | 36,729 | ||||||
Goodwill |
227,546 | 233,365 | ||||||
Client contracts, net of amortization of $71,026 and $184,763 |
67,467 | 76,388 | ||||||
Deferred income taxes |
3,312 | 2,596 | ||||||
Income taxes receivable |
169 | 1,292 | ||||||
Other assets |
15,508 | 16,207 | ||||||
|
|
|
|
|||||
Total non-current assets |
388,211 | 406,006 | ||||||
|
|
|
|
|||||
Total assets |
$ | 844,426 | $ | 846,941 | ||||
|
|
|
|
|||||
LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||
Current liabilities: |
||||||||
Current maturities of long-term debt |
$ | 15,000 | $ | 15,000 | ||||
Client deposits |
32,622 | 33,807 | ||||||
Trade accounts payable |
35,623 | 30,473 | ||||||
Accrued employee compensation |
44,536 | 61,083 | ||||||
Deferred revenue |
56,195 | 47,691 | ||||||
Income taxes payable |
2,282 | 2,116 | ||||||
Other current liabilities |
22,428 | 21,562 | ||||||
|
|
|
|
|||||
Total current liabilities |
208,686 | 211,732 | ||||||
|
|
|
|
|||||
Non-current liabilities: |
||||||||
Long-term debt, net of unamortized original issue discount of $22,678 and $25,302 |
254,822 | 259,698 | ||||||
Deferred revenue |
8,192 | 6,504 | ||||||
Income taxes payable |
1,168 | 1,168 | ||||||
Deferred income taxes |
22,973 | 21,674 | ||||||
Other non-current liabilities |
15,033 | 19,526 | ||||||
|
|
|
|
|||||
Total non-current liabilities |
302,188 | 308,570 | ||||||
|
|
|
|
|||||
Total liabilities |
510,874 | 520,302 | ||||||
|
|
|
|
|||||
Stockholders equity: |
||||||||
Preferred stock, par value $.01 per share; 10,000 shares authorized; zero shares issued and outstanding |
| | ||||||
Common stock, par value $.01 per share; 100,000 shares authorized; 33,797 shares and 33,734 shares outstanding |
658 | 653 | ||||||
Additional paid-in capital |
465,574 | 461,497 | ||||||
Treasury stock, at cost, 32,024 and 31,530 shares |
(738,244 | ) | (728,243 | ) | ||||
Accumulated other comprehensive income (loss): |
||||||||
Unrealized gain on short-term investments, net of tax |
(53 | ) | 3 | |||||
Unrecognized pension plan losses and prior service costs, net of tax |
(1,355 | ) | (1,761 | ) | ||||
Unrealized loss on change in fair value of interest rate swaps, net of tax |
(388 | ) | (658 | ) | ||||
Cumulative foreign currency translation adjustments |
(7,415 | ) | 2,274 | |||||
Accumulated earnings |
614,775 | 592,874 | ||||||
|
|
|
|
|||||
Total stockholders equity |
333,552 | 326,639 | ||||||
|
|
|
|
|||||
Total liabilities and stockholders equity |
$ | 844,426 | $ | 846,941 | ||||
|
|
|
|
CSG Systems International, Inc.
August 6, 2013
Page 7
CSG SYSTEMS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME-UNAUDITED
(in thousands, except per share amounts)
Quarter Ended | Six Months Ended | |||||||||||||||
June 30, 2013 |
June 30, 2012 |
June 30, 2013 |
June 30, 2012 |
|||||||||||||
Revenues: |
||||||||||||||||
Processing and related services |
$ | 131,184 | $ | 133,362 | $ | 265,818 | $ | 269,676 | ||||||||
Software, maintenance and services |
54,923 | 50,489 | 100,921 | 99,182 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues |
186,107 | 183,851 | 366,739 | 368,858 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cost of revenues (exclusive of depreciation, shown separately below): |
||||||||||||||||
Processing and related services |
62,964 | 62,334 | 124,541 | 124,294 | ||||||||||||
Software, maintenance and services |
31,794 | 30,186 | 63,571 | 58,195 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cost of revenues |
94,758 | 92,520 | 188,112 | 182,489 | ||||||||||||
Other operating expenses: |
||||||||||||||||
Research and development |
27,548 | 27,794 | 56,093 | 55,716 | ||||||||||||
Selling, general and administrative |
37,388 | 33,799 | 72,185 | 65,424 | ||||||||||||
Depreciation |
4,770 | 5,874 | 9,770 | 11,711 | ||||||||||||
Restructuring charges |
(38 | ) | 119 | 863 | 821 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
164,426 | 160,106 | 327,023 | 316,161 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating income |
21,681 | 23,745 | 39,716 | 52,697 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other income (expense): |
||||||||||||||||
Interest expense |
(3,180 | ) | (4,106 | ) | (6,109 | ) | (8,258 | ) | ||||||||
Amortization of original issue discount |
(1,325 | ) | (1,226 | ) | (2,624 | ) | (2,429 | ) | ||||||||
Interest and investment income, net |
188 | 152 | 343 | 372 | ||||||||||||
Other, net |
1,498 | 277 | 1,080 | 72 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other |
(2,819 | ) | (4,903 | ) | (7,310 | ) | (10,243 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Income before income taxes |
18,862 | 18,842 | 32,406 | 42,454 | ||||||||||||
Income tax provision |
(6,790 | ) | (6,972 | ) | (5,436 | ) | (18,778 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income |
$ | 12,072 | $ | 11,870 | $ | 26,970 | $ | 23,676 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted-average shares outstanding Basic: |
||||||||||||||||
Common stock |
32,125 | 32,194 | 32,129 | 32,293 | ||||||||||||
Participating restricted stock |
| 1 | | 34 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
32,125 | 32,195 | 32,129 | 32,327 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted-average shares outstanding Diluted: |
||||||||||||||||
Common stock |
32,439 | 32,309 | 32,483 | 32,435 | ||||||||||||
Participating restricted stock |
| 1 | | 34 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
32,439 | 32,310 | 32,483 | 32,469 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Earnings per common share: |
||||||||||||||||
Basic |
$ | 0.38 | $ | 0.37 | $ | 0.84 | $ | 0.73 | ||||||||
Diluted |
0.37 | 0.37 | 0.83 | 0.73 | ||||||||||||
Cash dividends declared per common share |
0.15 | | 0.15 | |
CSG Systems International, Inc.
August 6, 2013
Page 8
CSG SYSTEMS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS-UNAUDITED
(in thousands)
Six Months Ended | ||||||||
June 30, 2013 |
June 30, 2012 |
|||||||
Cash flows from operating activities: |
||||||||
Net income |
$ | 26,970 | $ | 23,676 | ||||
Adjustments to reconcile net income to net cash provided by operating activities - |
||||||||
Depreciation |
9,770 | 11,711 | ||||||
Amortization |
18,757 | 21,096 | ||||||
Amortization of original issue discount |
2,624 | 2,429 | ||||||
(Gain) loss on short-term investments and other |
998 | (23 | ) | |||||
Deferred income taxes |
6,533 | (6,342 | ) | |||||
Excess tax benefit of stock-based compensation awards |
(542 | ) | (288 | ) | ||||
Stock-based employee compensation |
7,518 | 6,529 | ||||||
|
|
|
|
|||||
Subtotal |
72,628 | 58,788 | ||||||
Changes in operating assets and liabilities: |
||||||||
Trade accounts and other receivables, net |
7,848 | 18,117 | ||||||
Other current and non-current assets |
(5,833 | ) | (3,951 | ) | ||||
Income taxes payable/receivable |
(4,178 | ) | 1,842 | |||||
Trade accounts payable and accrued liabilities |
(16,763 | ) | (3,196 | ) | ||||
Deferred revenue |
7,644 | 13,168 | ||||||
|
|
|
|
|||||
Net cash provided by operating activities |
61,346 | 84,768 | ||||||
|
|
|
|
|||||
Cash flows from investing activities: |
||||||||
Purchases of property and equipment |
(11,125 | ) | (13,550 | ) | ||||
Purchases of short-term investments |
(98,883 | ) | (24,779 | ) | ||||
Proceeds from sale/maturity of short-term investments |
41,361 | 16,800 | ||||||
Acquisition of and investments in client contracts |
(3,808 | ) | (2,948 | ) | ||||
|
|
|
|
|||||
Net cash used in investing activities |
(72,455 | ) | (24,477 | ) | ||||
|
|
|
|
|||||
Cash flows from financing activities: |
||||||||
Proceeds from issuance of common stock |
921 | 1,007 | ||||||
Repurchase of common stock |
(14,883 | ) | (13,541 | ) | ||||
Payments on acquired equipment financing |
(1,894 | ) | (663 | ) | ||||
Payments on long-term debt |
(7,500 | ) | (17,000 | ) | ||||
Excess tax benefit of stock-based compensation awards |
542 | 288 | ||||||
|
|
|
|
|||||
Net cash used in financing activities |
(22,814 | ) | (29,909 | ) | ||||
|
|
|
|
|||||
Effect of exchange rate fluctuations on cash |
(2,975 | ) | (1,152 | ) | ||||
|
|
|
|
|||||
Net increase (decrease) in cash and cash equivalents |
(36,898 | ) | 29,230 | |||||
Cash and cash equivalents, beginning of period |
133,747 | 146,733 | ||||||
|
|
|
|
|||||
Cash and cash equivalents, end of period |
$ | 96,849 | $ | 175,963 | ||||
|
|
|
|
|||||
Supplemental disclosures of cash flow information: |
||||||||
Net cash paid during the period for - |
||||||||
Interest |
$ | 4,770 | $ | 6,738 | ||||
Income taxes |
2,306 | 23,115 | ||||||
Non-cash financing activity |
||||||||
Cash dividends payable |
5,069 | |
CSG Systems International, Inc.
August 6, 2013
Page 9
EXHIBIT 1
CSG SYSTEMS INTERNATIONAL, INC.
SUPPLEMENTAL REVENUE ANALYSIS
Revenues by Geography
Quarter Ended June 30, 2013 |
Quarter Ended March 31, 2013 |
Quarter Ended June 30, 2012 |
||||||||||
Americas |
85 | % | 85 | % | 88 | % | ||||||
Europe, Middle East and Africa |
9 | % | 11 | % | 8 | % | ||||||
Asia Pacific |
6 | % | 4 | % | 4 | % | ||||||
|
|
|
|
|
|
|||||||
Total Revenues |
100 | % | 100 | % | 100 | % | ||||||
|
|
|
|
|
|
Revenues by Significant Customers: 10% or more of Revenues
Quarter Ended June 30, 2013 |
Quarter Ended March 31, 2013 |
Quarter Ended June 30, 2012 |
||||||||||
Comcast |
18 | % | 20 | % | 19 | % | ||||||
DISH |
15 | % | 15 | % | 14 | % | ||||||
Time Warner |
10 | % | 11 | % | 10 | % |
ACP Customer Accounts (in thousands, at end of period)
June 30, 2013 |
March 31, 2013 |
June 30, 2012 |
||||||||||
Cable/Satellite Customer Accounts |
49,072 | 49,151 | 49,171 |
CSG Systems International, Inc.
August 6, 2013
Page 10
EXHIBIT 2
CSG SYSTEMS INTERNATIONAL, INC.
DISCLOSURES FOR NON-GAAP FINANCIAL MEASURES
Use of Non-GAAP Financial Measures and Limitations
To supplement its condensed consolidated financial statements presented in accordance with generally accepted accounting principles (GAAP), CSG uses non-GAAP operating income, non-GAAP EPS, non-GAAP adjusted EBITDA, and non-GAAP free cash flow. CSG believes that these non-GAAP financial measures, when reviewed in conjunction with its GAAP financial measures, provide investors with greater transparency to the information used by CSGs management in its financial and operational decision making. CSG uses these non-GAAP financial measures for the following purposes:
| Certain internal financial planning, reporting, and analysis; |
| Forecasting and budgeting; |
| Certain management compensation incentives; and |
| Communications with CSGs Board of Directors, stockholders, financial analysts, and investors. |
These non-GAAP financial measures are provided with the intent of providing investors with the following information:
| A more complete understanding of CSGs underlying operational results, trends, and cash generating capabilities; |
| Consistency and comparability with CSGs historical financial results; and |
| Comparability to similar companies, many of which present similar non-GAAP financial measures to investors. |
Non-GAAP financial measures are not measures of performance under GAAP, and therefore should not be considered in isolation or as a substitute for GAAP financial information. Limitations with the use of non-GAAP financial measures include the following items:
| Non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles; |
| The way in which CSG calculates non-GAAP financial measures may differ from the way in which other companies calculate similar non-GAAP financial measures; |
| Non-GAAP financial measures do not include all items of income and expense that affect CSGs operations and that are required by GAAP to be included in financial statements; |
| Certain adjustments to CSGs non-GAAP financial measures result in the exclusion of items that are recurring and will be reflected in CSGs financial statements in future periods; and |
| Certain charges excluded from CSGs non-GAAP financial measures are cash expenses, and therefore do impact CSGs cash position. |
CSG Systems International, Inc.
August 6, 2013
Page 11
CSG compensates for these limitations by relying primarily on its GAAP results and using non-GAAP financial measures as a supplement only. Additionally, CSG provides specific information regarding the treatment of GAAP amounts considered in preparing the non-GAAP financial measures and reconciles each non-GAAP financial measure to the most directly comparable GAAP measure.
Non-GAAP Financial Measures: Basis of Presentation
The table below outlines the exclusions from CSGs non-GAAP financial measures:
Non-GAAP Exclusions |
Operating Income |
EPS | ||
Restructuring charges |
X | X | ||
Acquisition-related charges |
X | X | ||
Stock-based compensation |
X | X | ||
Amortization of acquired intangible assets |
X | X | ||
Amortization of original issue discount (OID) |
| X | ||
Unusual income tax matters |
| X |
CSG believes that excluding certain items in calculating its non-GAAP financial measures provides meaningful supplemental information regarding CSGs performance and these items are excluded for the following reasons:
| Restructuring charges are infrequent expenses that result from cost reduction initiatives and/or significant changes to CSGs business, to include such things as involuntary employee terminations, and facility consolidations and abandonments. These charges are not considered reflective of CSGs recurring core business operating results. The exclusion of these items in calculating CSGs non-GAAP financial measures allows management and investors an additional means to compare CSGs current financial results with historical and future periods. |
| Acquisition-related charges relate to direct and incremental expenses related to business acquisitions, and thus, are not considered reflective of CSGs recurring core business operating results. These charges typically include expenses related to legal, accounting, and other professional services. The exclusion of these charges in calculating CSGs non-GAAP financial measures allows management and investors an additional means to compare CSGs current financial results with historical and future periods. |
| Stock-based compensation results from CSGs issuance of equity awards to its employees under incentive compensation programs. The amount of this incentive compensation in any period is not generally linked to the level of performance by employees or CSG, but instead is more dependent on CSGs stock price at the date the equity award is granted, and the employee service period over which the equity awards vest. The exclusion of these expenses in calculating CSGs non-GAAP financial measures allows management and investors an additional means to evaluate the non-cash expense related to compensation included in CSGs results of operations, and therefore, the exclusion of this item allows investors to further evaluate the cash generating capabilities of CSGs business. |
CSG Systems International, Inc.
August 6, 2013
Page 12
| Amortization of acquired intangible assets is the result of business acquisitions. A portion of the purchase price in an acquisition is allocated to acquired intangible assets (e.g., software, client relationships, etc.), which are then amortized to expense over their estimated useful lives. This annual amortization expense is generally unchanged from the initial estimates, regardless of performance of the acquired business in any one period. Also, the value assigned to acquired intangible assets in a business combination is based on various estimates and valuation techniques, and does not necessarily represent the costs CSG would incur to develop such capabilities internally. Additionally, amortization of acquired intangible assets can be inconsistent in amount and frequency, and can be significantly affected by the timing and size of an acquisition. The exclusion of these expenses in calculating CSGs non-GAAP financial measures allows management and investors an additional means to evaluate the non-cash expense related to acquisitions included in CSGs results of operations, and therefore, the exclusion of this item allows investors to further evaluate the cash generating capabilities of CSGs business. |
| The convertible debt securities OID is the result of allocating a portion of the principal balance of the debt at issuance to the equity component of the instrument, as required under current accounting rules. This OID is then amortized to interest expense over the life of the respective convertible debt instrument. The interest expense related to the amortization of the OID is a non-cash expense, and therefore, the exclusion of this item allows investors to further evaluate the cash interest costs of CSGs convertible debt securities for cash flow, liquidity, and debt service purposes. |
| Unusual items within CSGs quarterly and/or annual income tax expense can occur from such things as income tax accounting timing matters, income taxes related to unusual events, or as a result of different treatment of certain items for book accounting and income tax purposes. Consideration of such items in calculating CSGs non-GAAP financial measures allows management and investors an additional means to compare CSGs current financial results with historical and future periods. |
CSG also reports non-GAAP adjusted EBITDA and non-GAAP free cash flow. Management believes non-GAAP adjusted EBITDA is a useful measure to investors in evaluating CSGs operating performance, liquidity, debt servicing capabilities, and enterprise valuation. CSG defines adjusted EBITDA as income before interest, income taxes, depreciation, amortization, stock-based compensation, foreign currency transaction adjustments, and unusual items, such as restructuring charges, as discussed above. Additionally, management uses non-GAAP free cash flow, among other measures, to assess its financial performance and cash generating capabilities, and believes that it is useful to investors because it shows CSGs cash available to service debt, make strategic acquisitions and investments, repurchase its common stock, pay cash dividends, and fund ongoing operations. CSG defines non-GAAP free cash flow as net cash flows from operating activities less the purchases of property and equipment.
CSG Systems International, Inc.
August 6, 2013
Page 13
Non-GAAP Financial Measures
Non-GAAP Operating Income:
The reconciliations of GAAP operating income to non-GAAP operating income for the indicated periods are as follows (in thousands, except percentages):
Quarter Ended June 30, 2013 |
Quarter Ended June 30, 2012 |
|||||||||||||||
Amounts | % of Revenues |
Amounts | % of Revenues |
|||||||||||||
GAAP operating income |
$ | 21,681 | 11.6 | % | $ | 23,745 | 12.9 | % | ||||||||
Restructuring charges |
(38 | ) | (0.0 | )% | 119 | 0.1 | % | |||||||||
Ascade acquisition-related charges |
| | 344 | 0.2 | % | |||||||||||
Stock-based compensation |
3,908 | 2.1 | % | 3,382 | 1.8 | % | ||||||||||
Amortization of acquired intangible assets |
4,811 | 2.6 | % | 5,545 | 3.0 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Non-GAAP operating income |
$ | 30,362 | 16.3 | % | $ | 33,135 | 18.0 | % | ||||||||
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2013 |
Six Months Ended June 30, 2012 |
|||||||||||||||
Amounts | % of Revenues |
Amounts | % of Revenues |
|||||||||||||
GAAP operating income |
$ | 39,716 | 10.8 | % | $ | 52,697 | 14.3 | % | ||||||||
Restructuring charges |
863 | 0.2 | % | 821 | 0.2 | % | ||||||||||
Ascade acquisition-related charges |
| | 344 | 0.1 | % | |||||||||||
Stock-based compensation |
7,518 | 2.1 | % | 6,529 | 1.8 | % | ||||||||||
Amortization of acquired intangible assets |
9,913 | 2.7 | % | 11,055 | 3.0 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Non-GAAP operating income |
$ | 58,010 | 15.8 | % | $ | 71,446 | 19.4 | % | ||||||||
|
|
|
|
|
|
|
|
Non-GAAP EPS:
The reconciliations of GAAP EPS to non-GAAP EPS for the indicated periods are as follows (in thousands, except per share amounts):
Quarter Ended June 30, 2013 |
Quarter Ended June 30, 2012 |
|||||||||||||||
Pretax Amount (1) |
EPS (3) | Pretax Amount (1) |
EPS (4) | |||||||||||||
GAAP income before income taxes |
$ | 18,862 | $ | 0.37 | $ | 18,842 | $ | 0.37 | ||||||||
Restructuring charges |
(38 | ) | 119 | |||||||||||||
Ascade acquisition-related charges |
| 344 | ||||||||||||||
Stock-based compensation |
3,908 | 3,382 | ||||||||||||||
Amortization of acquired intangible assets |
4,811 | 5,545 | ||||||||||||||
Amortization of OID |
1,325 | 1,226 | ||||||||||||||
|
|
|
|
|||||||||||||
Non-GAAP income before income taxes (2) |
$ | 28,868 | $ | 0.57 | $ | 29,458 | $ | 0.56 | ||||||||
|
|
|
|
|
|
|
|
CSG Systems International, Inc.
August 6, 2013
Page 14
Six Months Ended June 30, 2013 |
Six Months Ended June 30, 2012 |
|||||||||||||||
Pretax Amount (1) |
EPS (3) | Pretax Amount (1) |
EPS (4) | |||||||||||||
GAAP income before income taxes |
$ | 32,406 | $ | 0.83 | $ | 42,454 | $ | 0.73 | ||||||||
Restructuring charges |
863 | 821 | ||||||||||||||
Ascade acquisition-related charges |
| 344 | ||||||||||||||
Stock-based compensation |
7,518 | 6,529 | ||||||||||||||
Amortization of acquired intangible assets |
9,913 | 11,055 | ||||||||||||||
Amortization of OID |
2,624 | 2,429 | ||||||||||||||
|
|
|
|
|||||||||||||
Non-GAAP income before income taxes (2) |
$ | 53,324 | $ | 1.05 | $ | 63,632 | $ | 1.16 | ||||||||
|
|
|
|
|
|
|
|
(1) | These items (on a pretax basis) are calculated in accordance with GAAP, and are reflected as part of the results of operations in the accompanying Unaudited Condensed Consolidated Statements of Income. |
(2) | Non-GAAP EPS is calculated by taking the non-GAAP income before income taxes and deducting from this amount non-GAAP income taxes calculated by using the non-GAAP effective income tax rate for the period, and then dividing the result of this calculation by the outstanding diluted shares for the period. |
(3) | For the second quarter and six months ended June 30, 2013, the estimated effective income tax rate for non-GAAP purposes was approximately 36% for both periods, and the weighted-average diluted shares outstanding were 32.4 million and 32.5 million, respectively. For the six months ended June 30, 2013, the GAAP effective income tax rate was approximately 17%, primarily as a result of the recognition of the 2012 R&D tax credits of approximately $6 million, or approximately $0.18 per diluted share, in the first quarter of 2013. These credits were recognized for GAAP purposes in the first quarter of 2013 since the credit legislation was passed by Congress in January 2013. The effective income tax rate for non-GAAP purposes of approximately 36% for the six months ended June 30, 2013 excludes the impact of these tax credits, as they were reflected in the 2012 non-GAAP effective income tax rate. |
(4) | For the second quarter and six months ended June 30, 2012, the estimated effective income rates for non-GAAP purposes were approximately 39% and 41%, respectively, and the weighted-average diluted shares outstanding were 32.3 million and 32.5 million, respectively. |
Non-GAAP Adjusted EBITDA:
CSGs calculation of non-GAAP adjusted EBITDA and the reconciliation of CSGs non-GAAP adjusted EBITDA measure to net income and cash flows from operating activities are provided below for the indicated periods (in thousands, except percentages):
Quarter
Ended June 30, |
Six Months
Ended June 30, |
|||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
GAAP operating income |
$ | 21,681 | $ | 23,745 | $ | 39,716 | $ | 52,697 | ||||||||
Restructuring charges |
(38 | ) | 119 | 863 | 821 | |||||||||||
Ascade acquisition-related charges |
| 344 | | 344 | ||||||||||||
Depreciation |
4,770 | 5,874 | 9,770 | 11,711 | ||||||||||||
Amortization of acquired intangible assets (5) |
4,811 | 5,545 | 9,913 | 11,055 | ||||||||||||
Amortization of other intangible assets (5) |
3,598 | 4,550 | 7,614 | 8,624 | ||||||||||||
Stock-based compensation |
3,908 | 3,382 | 7,518 | 6,529 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA |
$ | 38,730 | $ | 43,559 | $ | 75,394 | $ | 91,781 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA as a percentage of revenues |
21 | % | 24 | % | 21 | % | 25 | % | ||||||||
|
|
|
|
|
|
|
|
CSG Systems International, Inc.
August 6, 2013
Page 15
Quarter
Ended June 30, |
Six Months
Ended June 30, |
|||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net income |
$ | 12,072 | $ | 11,870 | $ | 26,970 | $ | 23,676 | ||||||||
Interest expense (6) |
3,180 | 4,106 | 6,109 | 8,258 | ||||||||||||
Amortization of OID |
1,325 | 1,226 | 2,624 | 2,429 | ||||||||||||
Interest and investment income and other, net |
(1,686 | ) | (429 | ) | (1,423 | ) | (444 | ) | ||||||||
Income tax provision |
6,790 | 6,972 | 5,436 | 18,778 | ||||||||||||
Depreciation |
4,770 | 5,874 | 9,770 | 11,711 | ||||||||||||
Amortization of acquired intangible assets (5) |
4,811 | 5,545 | 9,913 | 11,055 | ||||||||||||
Amortization of other intangible assets (5) |
3,598 | 4,550 | 7,614 | 8,624 | ||||||||||||
Stock-based compensation |
3,908 | 3,382 | 7,518 | 6,529 | ||||||||||||
Ascade acquisition-related charges |
| 344 | | 344 | ||||||||||||
Restructuring charges |
(38 | ) | 119 | 863 | 821 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA |
$ | 38,730 | $ | 43,559 | $ | 75,394 | $ | 91,781 | ||||||||
|
|
|
|
|
|
|
|
Quarter
Ended June 30, |
Six Months
Ended June 30, |
|||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Cash flows from operating activities |
$ | 38,802 | $ | 36,579 | $ | 61,346 | $ | 84,768 | ||||||||
Income tax provision |
6,790 | 6,972 | 5,436 | 18,778 | ||||||||||||
Changes in operating assets and liabilities and deferred taxes |
(7,580 | ) | (3,450 | ) | 4,749 | (19,638 | ) | |||||||||
Interest expense (6) |
3,180 | 4,106 | 6,109 | 8,258 | ||||||||||||
Interest and investment income and other, net |
(1,686 | ) | (429 | ) | (1,423 | ) | (444 | ) | ||||||||
Ascade acquisition-related charges |
| 344 | | 344 | ||||||||||||
Restructuring charges |
(38 | ) | 119 | (19 | ) | 821 | ||||||||||
Other |
(738 | ) | (682 | ) | (804 | ) | (1,106 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA |
$ | 38,730 | $ | 43,559 | $ | 75,394 | $ | 91,781 | ||||||||
|
|
|
|
|
|
|
|
(5) | Amortization on the statement of cash flows is made up of the following items for the indicated periods (in thousands): |
Quarter
Ended June 30, |
Six Months
Ended June 30, |
|||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Amortization of acquired intangible assets |
$ | 4,811 | $ | 5,545 | $ | 9,913 | $ | 11,055 | ||||||||
Amortization of other intangible assets |
3,598 | 4,550 | 7,614 | 8,624 | ||||||||||||
Amortization of deferred financing costs |
612 | 699 | 1,230 | 1,417 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total amortization |
$ | 9,021 | $ | 10,794 | $ | 18,757 | $ | 21,096 | ||||||||
|
|
|
|
|
|
|
|
(6) | Interest expense includes amortization of deferred financing costs as provided in Note 5 above. |
CSG Systems International, Inc.
August 6, 2013
Page 16
Non-GAAP Free Cash Flow:
CSGs calculation of non-GAAP free cash flow and the reconciliation of CSGs non-GAAP free cash flow measure to cash flows from operating activities are provided below for the indicated periods (in thousands):
Quarter
Ended June 30, |
Six Months
Ended June 30, |
|||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Cash flows from operating activities |
$ | 38,802 | $ | 36,579 | $ | 61,346 | $ | 84,768 | ||||||||
Purchases of property and equipment |
(6,633 | ) | (11,232 | ) | (11,125 | ) | (13,550 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Non-GAAP free cash flow |
$ | 32,169 | $ | 25,347 | $ | 50,221 | $ | 71,218 | ||||||||
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures 2013 Financial Guidance
Non-GAAP Operating Income Margin:
The reconciliation of GAAP operating income margin to non-GAAP operating income margin, as included in CSGs 2013 full year financial guidance, is as follows:
2013 Guidance |
||||
GAAP operating income margin |
11.0 | % | ||
Restructuring charges (7) |
0.5 | % | ||
Stock-based compensation (8) |
2.0 | % | ||
Amortization of acquired intangible assets (9) |
2.5 | % | ||
|
|
|||
Non-GAAP operating income margin (approximately 16%) |
16.0 | % | ||
|
|
(7) | This represents the pretax impact of restructuring charges of an estimated $4 million on CSGs operating income margin as a percentage of the midpoint of 2013 revenue guidance. |
(8) | This represents the pretax impact of stock-based compensation expense of an estimated $16 million on CSGs operating income margin as a percentage of the midpoint of 2013 revenue guidance. |
(9) | This represents the pretax impact of amortization of acquired intangible assets expense of an estimated $19 million on CSGs operating income margin as a percentage of the midpoint of 2013 revenue guidance. |
CSG Systems International, Inc.
August 6, 2013
Page 17
Non-GAAP EPS:
The reconciliation of GAAP EPS to non-GAAP EPS as included in CSGs 2013 full year financial guidance is as follows:
2013 Guidance Range | ||||||||||||||||
Low Range | High Range | |||||||||||||||
Pretax Amount (10) |
EPS (12) | Pretax Amount (10) |
EPS (12) | |||||||||||||
GAAP income before income taxes |
$ | 60,000 | $ | 1.31 | $ | 65,000 | $ | 1.41 | ||||||||
Restructuring charges |
4,000 | 4,000 | ||||||||||||||
Stock-based compensation |
16,000 | 16,000 | ||||||||||||||
Amortization of acquired intangible assets |
19,000 | 19,000 | ||||||||||||||
Amortization of OID |
5,000 | 5,000 | ||||||||||||||
|
|
|
|
|||||||||||||
Non-GAAP income before income taxes (11) |
$ | 104,000 | $ | 2.05 | $ | 109,000 | $ | 2.15 | ||||||||
|
|
|
|
|
|
|
|
(10) | These items (on a pretax basis) are calculated in accordance with GAAP, and will be reflected as part of the results of operations in CSGs Unaudited Condensed Consolidated Statements of Income. |
(11) | Non-GAAP EPS is calculated by taking the non-GAAP income before income taxes and deducting from this amount non-GAAP income taxes calculated by using the non-GAAP effective income tax rate for the period, and then dividing the result of this calculation by the outstanding diluted shares for the period. |
(12) | For 2013, the GAAP effective income rate is expected to be 29% percent, the non-GAAP effective income tax rate is expected to be approximately 36%, and the outstanding diluted shares are expected to be 32.6 million. The expected 29% percent GAAP effective income tax rate reflects the recognition of the 2012 R&D tax credits of approximately $6 million, or approximately $0.18 per diluted share. These credits were recognized for GAAP purposes in the first quarter of 2013 since the credit legislation was passed by Congress in January 2013. The expected effective income tax rate for non-GAAP purposes of approximately 36% for 2013 excludes the impact of these tax credits, as they were reflected in the 2012 non-GAAP effective income tax rate. |
Non-GAAP Adjusted EBITDA:
CSGs calculation of non-GAAP adjusted EBITDA and the reconciliation of CSGs non-GAAP adjusted EBITDA measure to net income and cash flows from operations are provided below for CSGs 2013 full year financial guidance at the mid-point (in thousands):
2013 | ||||
GAAP operating income |
$ | 80,000 | ||
Restructuring charges |
4,000 | |||
Depreciation |
21,000 | |||
Amortization of acquired intangible assets |
19,000 | |||
Amortization of other intangible assets |
15,000 | |||
Stock-based compensation |
16,000 | |||
|
|
|||
Adjusted EBITDA |
$ | 155,000 | ||
|
|
|||
Adjusted EBITDA as a percentage of revenues |
21 | % | ||
|
|
CSG Systems International, Inc.
August 6, 2013
Page 18
2013 | ||||
Net income |
$ | 45,000 | ||
Interest expense |
13,000 | |||
Interest and investment income and other, net |
(1,000 | ) | ||
Amortization of OID |
5,000 | |||
Income tax provision |
18,000 | |||
Depreciation |
21,000 | |||
Amortization of acquired of intangible assets |
19,000 | |||
Amortization of other intangible assets |
15,000 | |||
Stock-based compensation |
16,000 | |||
Restructuring charges |
4,000 | |||
|
|
|||
Adjusted EBITDA |
$ | 155,000 | ||
|
|
|||
2013 | ||||
Cash flows from operating activities (midpoint of guidance) |
$ | 115,000 | ||
Income tax provision |
18,000 | |||
Interest and investment income and other, net |
(1,000 | ) | ||
Changes in operating assets and liabilities and deferred taxes |
6,000 | |||
Interest expense |
13,000 | |||
Restructuring charges |
4,000 | |||
|
|
|||
Adjusted EBITDA |
$ | 155,000 | ||
|
|
Non-GAAP Free Cash Flow:
CSGs calculation of non-GAAP free cash flow and the reconciliation of CSGs non-GAAP free cash flow measure to cash flows from operating activities is provided below for the indicated period (in thousands):
2013 | ||||
Cash flows from operating activities (midpoint of guidance) |
$ | 115,000 | ||
Purchases of property and equipment |
(35,000 | ) | ||
|
|
|||
Non-GAAP free cash flow |
$ | 80,000 | ||
|
|
FN7L5B9LUS95K,\A@6DEV+