West Corporation Reports Q3 Results, Including WAM Data

by Patrick Lunsford, CollectionIndustry.com

West Corporation (NASDAQ: WSTC) yesterday released financial results for the third quarter of 2006 and for the year so far, including detailed financial data from the receivables management unit. The company also commented on its impending recapitalization and move to go private.

West posted net income of $42.9 million on revenues of $473.2 million for the quarter. The income figure was up 13.5% from the year-ago quarter and revenues were up 21.4%.

Interestingly, the earnings release included detailed information on the receivables management division, West Asset Management (WAM). In the third quarter, WAM saw operating income of $10.62 million ? an 11.7% increase from last year ? on revenues of $59.5 million, a 9.2% increase from the third quarter of 2005. So far for the year, WAM has brought in $178.6 million in nine months and posted overall operating income of $31.8 million; both amounts representing significant increases over last year.

West also included some interesting WAM data in the ?Selected Operating Data? portion of the earnings release. WAM?s revenue from portfolio sales increased 22.2% in the third quarter from $4.5 million in 2005 to $5.5 million this year. Also, ending portfolio receivables totaled $123.7 million for the quarter, a 38.4% increase from the same time last year.

In company-wide data, West reported that it now has 20,198 workstations, an11.1% increase, including 3,329 outside of the U.S. The much-hyped West at Home program now has 11,158 agents working from home, up 52.8% from this time last year.

On May 31of this year, West Corporation entered into a definitive agreement to recapitalize the Company in a transaction sponsored by an investor group led by Thomas H. Lee Partners and Quadrangle Group LLC.

Definitive proxy materials were filed with the SEC on September 19, 2006. The transaction is currently expected to close in the fourth quarter of 2006 and is subject to customary closing conditions including the approval of West Corporation’s stockholders. The stockholders of West will vote on the recapitalization at a special meeting to be held on October 23, 2006.