Genesys Conferencing Reports Second Quarter Results

Genesys Conferencing Reports Second Quarter Results -Automated services reach 53% of revenue- -Call center consolidation on target- -Reaffirms 2002 EBITDA guidance- MONTPELLIER, France, August 13, 2002 - Genesys Conferencing (Euronext: 3955) (Nasdaq: GNSY), the world's leading conferencing specialist, today reported revenue and earnings for the second quarter and six months ended June 30, 2002. All financial results are reported under French Generally Accepted Accounting Principles (GAAP). Highlights for the second quarter compared to the prior year period included: · Total call volumes reached 282 million minutes, up 39% · Continued acceleration of deployment of automated services: volumes increased 114% · Closed two call centers and prepared for the closure of the third in August · Negotiated new long distance contract · Genesys Meeting Center now exceeds 120,000 seats The results for 2001 reflect the combined performance of Genesys Conferencing, Vialog Corporation, which was acquired by Genesys on April 26, 2001, and Astound Incorporated, which was acquired by Genesys on March 28, 2001 as if these acquisitions were completed on January 1, 2001. Deployment of automated services continues to accelerate in the second quarter Total call volumes were 282 million minutes for the second quarter, up 39% from the prior year period. Automated services call volumes were up 114% from the second quarter of 2001 and increased 16% from the first quarter 2002. Automated services represented 52.7% of revenue and 71% of call volumes in the second quarter compared to 34% of revenue in the prior year period. Revenues decreased 2.5% to ?52.7 (US$52.5) million for the second quarter of 2002, from ?54.0 (US$53.9) million in the second quarter of 2001. Revenue was negatively impacted by the weakening U.S. dollar and the strong shift to automated services which have lower per-minute rates, but generate higher gross margins. Gross margin, before non-recurring costs, expanded to 59.0%, a 190 basis point improvement from the same period last year. The non-recurring costs consists of ?1.2 million (2.3% of revenue) associated with terminating a U.S. long distance contract and ?500,000 (0.9% of revenue) of duplicate personnel costs related to the call center consolidation. During the second quarter, the Company renegotiated a long distance supplier contract in the U.S. The Company expects savings of approximately ?1.9 million in the third quarter 2002 and ?2.3 million in the fourth quarter 2002, as a result of the new long distance contract. To allow the Company to obtain maximum benefit from the lower rates under the renegotiated contract in future quarters, the Company terminated a contract with another long distance supplier in the second quarter which required the Company to satisfy a minimum purchase requirement as a condition of termination (costing approximately ?1.2 million). Earnings before interest, taxes, depreciation and amortization (EBITDA), before non-recurring charges noted above, increased to ?7.5 (US$7.5) million in the second quarter, an increase of 56.8%, compared to ?4.8 (US$4.8) million in the prior year period. Michael E. Savage, Executive Vice President and Chief Financial Officer, stated, "During the second quarter, we incurred ?500,000 in duplicate personnel costs related to the call center consolidation and ?1.2 million from additional long distance costs which enabled us to terminate a contract with a more expensive long distance provider. Excluding these non-recurring costs, EBITDA would have been 14.3% of revenue. With most of our call center consolidation behind us, we now expect non-recurring costs to diminish significantly in the second half of 2002." Mr. Savage continued, "With ?9.7 million of cash on hand as of August 9, 2002 and strong projected free cash flow, we are comfortable with our debt service requirements and working capital needs." Genesys Meeting Center Genesys Meeting Center has reached over 120,000 seats sold. Since its introduction, Genesys Meeting Center has become the fastest growing web conferencing service in the world, based on the number of seats sold. Francois Legros, Chairman and Chief Executive Officer, stated, "Large enterprises continue to show a very strong interest in deploying Genesys Meeting Center for enterprise wide applications. Our pipeline of opportunities looks very encouraging." Guidance for 2002 Management is updating guidance for 2002 as follows: · Automated services are expected to reach between 60 and 65% of revenue in Q4 compared to prior guidance of 50% Revenue is projected to be between ?200 million and ?210 million based on the acceleration of automated services deployment and unfavorable shift in currencies experienced during the second quarter from prior guidance of ?230 million to ?250 million Management reaffirmed that 2002 EBITDA, excluding non-recurring costs, is projected to grow between 27% and 33%, on a proforma basis, compared to 2001. Mr. Legros concluded, "While the continuing shift to higher margin automated services has impacted our near term revenue, we expect the continued growth of automated services, our new long distance contract and the realized savings from the call center consolidation to have a positive impact on our second half results." Second Quarter Conference Call and Webcast The Company will hold a conference call today at 5:30 p.m. Central European Time (GMT+1) or 11:30 a.m. Eastern Daylight Time. Chairman and Chief Executive Officer, Francois Legros, and Executive Vice President and Chief Financial Officer, Michael E. Savage, will host the call. The conference call will be webcast live. The call may be accessed at www.genesys.com. US GAAP Financial Statements The Company will file its U.S. GAAP financial statements with the Securities and Exchange Commission on Form 6-K on Wednesday, August 14, 2002. Forward-Looking Statements This release contains statements that constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements other than historical information or statements of current condition. These statements appear in a number of places in this release and include statements concerning the parties' intent, belief or current expectations regarding future events and trends affecting the parties' financial condition or results of operations. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those in the forward-looking statements as a result of various factors. Some of these factors are described in the Form 20-F which was filed by Genesys with the Securities and Exchange Commission on June 12, 2002. Although management of the parties believe that their expectations reflected in the forward-looking statements are reasonable based on information currently available to them, they cannot assure you that the expectations will prove to have been correct. Accordingly, you should not place undue reliance on these forward-looking statements. In any event, these statements speak only as of the date of this release. Except to the extent required by law, the parties undertake no obligation to revise or update any of them to reflect events or circumstances after the date of this release, or to reflect new information or the occurrence of unanticipated events. Genesys Conferencing's ordinary shares are listed on the Euronext Paris Stock Exchange and its ADSs are listed on the Nasdaq National Stock Market Euronext: 3955 - Nasdaq: GNSY - Reuters: GNSY LP - Bloomberg: GENE LP www.genesys.com At Genesys Conferencing Michael E. Savage Executice Vice President and Chief Financial Officer Direct Line: +33 4 99 13 27 66 mike.savage@genesys.com Consolidated Balance Sheets (French GAAP) (in thousands of euros, except share data) GENESYS Conferencing Consolidated Statements of Operations (French GAAP) (in thousands of euros, except share data) See accompanying notes to consolidated financial statements Genesys Conferencing Notes to Consolidated Financial Statements of Operations (French GAAP) (in thousands of euros, except share data) ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2002/08/15/20020815BIT00180/wkr0001.DOC http://www.waymaker.net/bitonline/2002/08/15/20020815BIT00180/wkr0002.pdf