a global multimedia collaboration service leader, today reported unaudited financial results for the fourth quarter and year ended December 31, 2007. All results are reported under International Financial Reporting Standards (IFRS).
“2007 was a very successful year for Genesys Conferencing as profitability grew significantly, many new customer wins were achieved and customer and industry analysts alike recognized the value of our proprietary Genesys Meeting Center technology,” stated Francois Legros, Chairman and Chief Executive Officer. “Delivered as a Software as a Service and providing a high level of integration with enterprise applications, Genesys Meeting Center is fast becoming a core component of large enterprises’ unified communications strategy.”
2007 versus 2006 Highlights
- Total volume increased 29.7% to approximately 3.0 billion minutes
- Revenue increased 4.8% to 148.3 million euros
- Genesys Meeting Center revenue increased 7.4%
- EBITDA1 increased 32.6% to 28.5million euros in 2007 compared to 21.5 million euros in 2006
- Net income increased to 13.8 million euros in 2007 compared to 6.4 million euros in 2006
- Net debt improved to 4.0 million euros at FYE 2007 compared to 23.2 million euros at FYE 2006
Q4 2007 versus Q4 2006 Highlights
- Total volume increased 31.6%
- Genesys Meeting Center volume increased 33.0%
- Revenue increased 9.5% to 38.5 million euros
- EBITDA1 increased to 9.0 million euros in Q4 2007 compared to 4.1 million euros in Q4 2006
- Net income increased to 6.9 million euros in Q4 2007 compared to 6.1 million euros in Q4 2006
Operating Profitability
Gross margin was 62.1% for the full-year 2007 and 63.8% in the fourth quarter of 2007, compared 63.8% for the full-year 2006 and 62.8% in the fourth quarter of 2006. The increase of gross margin in the fourth quarter of 2007 compared to the fourth quarter of 2006 reflects improved terms of the company’s telecommunications supplier agreements. The expected decline in full-year 2007 gross margin compared to full-year 2006 largely reflects the benefit of a U.S. federal excise tax credit refund recorded during 2006.
Total operating expenses in 2007 were 74.4 million euros compared to 81.2 million euros in 2006. In the fourth quarter of 2007, operating expenses were 18.1 million euros compared to 21.6 million euros in the fourth quarter of 2006. The decrease in operating expenses partially reflects a 1.4 million euro restructuring charge recorded in the fourth quarter of 2006 which resulted from initiatives taken to streamline the company’s sales and finance senior management. Total 2007 operating expenses also benefited by a reduction in U.S. public company related expenses since the company’s voluntary SEC deregistration in June 2007 along with the savings from the organizational restructuring efforts mentioned above.
EBITDA1,was 28.5 million euros in 2007, compared to 21.5 million euros in 2006. For the fourth quarter of 2007, EBITDA was 9.0 million euros compared to 4.1 million euros in fourth quarter of 2006. The year-over-year increase in fourth quarter 2007 EBITDA largely reflects the nearly 10% increase in revenue and 8.3% decrease in operating expenses. EBITDA margin for the fourth quarter of 2007 was over 23%.
Net income was 13.8 million euros in 2007 and 6.9 million euros in the fourth quarter of 2007, compared to 6.4 million euros in 2006 and 6.1 million euros in fourth quarter of 2006. The increase partially reflects a 7.3 million euro decrease in financial expenses in 2007 compared to 2006. The company also recorded an income tax expense of 2.0 million euros in 2007 compared to a 6.4 million euro income tax credit in 2006.
Liquidity
As of December 31, 2007, the company’s net cash2 was 14.2 million euros, an increase of 7.9 million euros compared to 6.3 million euros as of December 31, 2006. Cash from operating activities increased to 27.5 million euros in 2007 from 11.5 million euros in 2006
The company’s net debt position as of December 31, 2007, was 4.0 million euros compared to 23.2 million euros as of December 31, 2006. Shareholders’ equity was 61.7 million euros compared to 49.9 million euros as of December 31, 2006.
“Genesys Conferencing enters 2008 with the resources to fully de-leverage its capital structure,” stated Andrew Lazarus, Executive Vice President and Chief Financial Officer. “We expect cash from operations to increase during 2008 even while the company continues to maintain its pace of investment in technology development and global expansion. Genesys expects that future industry trends will be shaped by the strong advancement of IP based communication services and the growth of emerging economies and that our company is well positioned to benefit from these market dynamics.”
2008 Outlook
The following contains forward-looking information regarding Genesys Conferencing’s financial outlook, based on current expectations and a fixed currency rate of exchange of EUR 1.00 = USD 1.55, similar to the average exchange rate for the first quarter of 2008. Actual results may differ materially and the company may not update any forward-looking statements made in this press release.
In 2008, Genesys Conferencing plans to continue its development strategy by offering enterprise-class, multimedia collaboration services to the largest companies worldwide, while also concentrating on key priorities such as technology, customer service and cost efficiency. To that extent, the company will further leverage its deployment of Genesys Meeting Center as a Software as a Service and continue to better position Genesys Conferencing in the fast-evolving unified communications market and to further propel the adoption of its services among large enterprises.
For the full-year 2008, the company continues to expect revenue to be in the range of 150 million to 154 million euros.
For the full-year 2008, the company continues to expect EBITDA to be in the range of 30 million to 32 million euros.
Conference Call and Webcast
Chairman and Chief Executive Officer François Legros and Executive Vice President/Chief Financial Officer Andrew Lazarus will host a conference call on Tuesday, April 15, 2008 at 5:30 p.m. Central European Time or 11:30 a.m. Eastern Time to discuss 2007 financial results.
The conference call will be web cast live and may be accessed at
http://events.webeventservices.com/genesys/2008/04/15
A replay of the call will be available at the same URL or at http://www.genesys.com
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Targets
According to the AMF regulations in use, targets may not be considered as forecasts. Net income may not be estimated on the basis of the above mentioned EBITDA and on the basis of non-cash expenses previously recorded.
Impact of Exchange Rates
The company serves large enterprises on a worldwide basis. As a result, it has extensive international operations and, thus, significant exposure to exchange rate fluctuations, in particular those of the U.S. dollar. In 2006, and continuing through the third quarter of 2007, 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.
Disclaimer
This press release may contain some statements that constitute forward-looking statements. Forward-looking statements are statements other than historical information or statements of current condition. They may appear in a number of places in this press release and include statements concerning Genesys Conferencing's intent, belief or current expectations regarding future events and trends affecting Genesys Conferencing’s 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 chapter 4.5 of the Document de Référence, filed with the Autorité des marchés financiers under number D.07-551 on June 5, 2007. Although Genesys Conferencing’s management believe that their expectations 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 statements. In any event, these statements speak only as of the date of this press release. Except to the extent required by law, Genesys Conferencing undertakes no obligation to revise or update any of them to reflect events or circumstances after the date of this press release, or to reflect new information or the occurrence of unanticipated events.
Genesys Conferencing—Connecting the World for 20 Years
Founded in 1986, Genesys is a leading provider of unified collaboration and communication services to thousands of organizations worldwide, including more than half of the Fortune Global 500. The company’s flagship product, Genesys Meeting Center, provides an integrated multimedia collaboration 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). Additional information is available at www.genesys.com
At Genesys Conferencing
Andrew G. Lazarus
Executive Vice President, Chief Financial Officer
Phone: +1 703-749-2500
andrew.lazarus@genesys.com
Investor Relations
Phone: + 33 4 99 13 25 87
relations.investisseurs@genesys.com