Genesys Conferencing Reports Third Quarter 2006 Results

11/15/2006

Vienna, Virginia and Montpellier, France – November 15, 2006 – Genesys Conferencing (Euronext Eurolist C: FR0004270270) (NASDAQ: GNSY), a global multimedia conferencing service leader, today reported financial results for the quarter ended September 30, 2006. All results are reported under International Financial Reporting Standards (IFRS).

In the third quarter of 2006, volume increased 11.5% to 556.9 million minutes compared to 499.4 million minutes in the third quarter of 2005. Revenue?; decreased 5.5% to €34.1 million in the third quarter of 2006 compared to €36.1 million in the third quarter of 2005. In US dollars, revenue for the third quarter of 2006 was $43.5 million a 1.1% decrease compared to $44.0 million in the third quarter of 2005.

The decrease reflects the exceptionally high level of revenue in the third quarter of 2005 generated by Genesys Event Services and, as previously announced, the loss of a major customer late in the fourth quarter of 2005. Despite the anticipated decline in third quarter revenue, the company continues to expect 2006 total revenue to remain stable when compared to 2005.

“Our focus on delivering high-value multimedia collaboration services to large enterprises is proving successful, as we continue to gain greater market penetration in a highly competitive environment,” commented Francois Legros, Chairman and Chief Executive Officer. “The next generation of Genesys Meeting Center, to be launched in the next few weeks, has been designed for easy and fast enterprise-wide deployment and will allow us to further drive customer adoption of our services.”

Gross profit was €21.1 million for the third quarter of 2006, compared to €23.9 million for the third quarter of 2005. Gross margin was 61.9% compared to 66.1% for the third quarter of 2005. Gross margin remains in the company’s targeted range of above 60% of revenue.

Operating income was €2.5 million for the third quarter of 2006, compared to €2.9 million for the third quarter of 2005. Operating profitability partially reflects the reduction in operating expenses from €20.2 million in the third quarter of 2005 to €18.1 million in the third quarter of 2006, as part of the company’s continuous efforts to improve efficiency and reduce general and administrative expenses.

Net income was €41 thousand for the third quarter of 2006, compared to €1.4 million for the third quarter of 2005. The year-over-year change in third quarter net income largely reflects the decline in operating income, the previously reported increase in non-cash, deferred income tax expense and the non-cash impact of exchange rate fluctuations which negatively impacted net income by €0.9 million between the third quarter of 2005 and 2006.

Earnings before interest, taxes, depreciation and amortization (EBITDA²) and before stock-based compensation was €5.1 million for the third quarter of 2006, compared to €6.0 million for the third quarter of 2005.

As of September 30, 2006, the company’s net cash³ was €3.6 million and its net debt was €26.9 million compared to €4.1 million and €71.9 million as of December 31, 2005, respectively. Net cash reflects €8.5 million of company investments in equipment and capitalized development costs made in the nine months ended September 30, 2006, largely related to the development of the company’s VoIP initiatives and preparation for the commercial introduction of the next generation of Genesys Meeting Center in the fourth quarter of 2006.

Guidance

The following contains forward-looking guidance regarding Genesys Conferencing’s financial outlook, based on current expectations and a fixed currency rate of exchange of EUR 1.00 = USD 1.25, similar to the average exchange rate for 2005. Actual results may differ materially, and the company may not update any forward-looking statements made in this press release.

Consistent with previously issued financial outlook, the company expects for the full-year ended December 31, 2006:

Revenue to be in the range of €140 to €144 million
EBITDA² to be in the range of €22 to €25 million
Net income to be positive

Conference Call and Webcast

Chairman and CEO Francois Legros and EVP/Chief Financial Officer Michael E. Savage will host a conference call on Wednesday, November 15, 2006, at 5:30 p.m. Central European Time or 11:30 a.m. Eastern Time to discuss third- quarter 2006 financial results.

The conference may be accessed at:http://events.webeventservices.com/genesys/2006/11/15/
A replay of the call will be available at http://www.genesys.com

Click here to see the financial tables

Please refer to the paragraph “Impact of Exchange Rates” below for information regarding the calculation of U.S. dollar amounts
See attached note to consolidated statements of operations for reconciliation of Operating Income and EBITDA. The company believes that EBITDA is a meaningful measure of performance, because it presents the company’s results of operations without the non-cash impact of depreciation and amortization. EBITDA is reported excluding stock-based compensation expense.
Net cash includes cash and cash equivalents less bank overdrafts

Impact of Exchange Rates

The company serves large enterprises on a worldwide basis. As a result, the company has extensive international operations and, thus, significant exposure to exchange rate fluctuations, in particular those of the U.S. dollar. During 2005, and continuing through the first nine months of 2006, the U.S. dollar has fluctuated compared to the euro. As a result, the comparability of the company’s revenues and results of operations expressed in euros were affected.

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 that was filed by Genesys Conferencing with the Securities and Exchange Commission on May 18, 2006.
Although Genesys Conferencing’s management 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—Connecting the World for 20 Years

Founded in 1986, Genesys Conferencing is a leading provider of converged collaboration and communication services to thousands of organisations worldwide, including more than 200 of the Fortune Global 500. The company’s flagship product, Genesys Meeting Center, provides an integrated multimedia conferencing solution that is easy to use and available on demand. With offices in more than 20 countries across North America, Europe and Asia Pacific, the company offers an unmatched global presence and strong local support. Genesys Conferencing is publicly traded on Euronext Eurolist C in France (FR0004270270) and on the NASDAQ in the U.S. (GNSY). Additional information is available at www.genesys.com.

At Genesys Conferencing

Michael E. Savage
Executive Vice President, Chief Financial Officer
Phone: +1 703-749-2500
mike.savage@genesys.com

Marine Pouvreau
Investor Relations Manager
Phone: +1 703-749-2500
marine.pouvreau@genesys.com