EARNINGS ARE OUT:
Tuesday October 28 4:00 PM EST
Company Press Release
USCS International Reports Record Third Quarter Results
Net Income Increases 34% To $5.8 Million
$0.24 Per Share
RANCHO CORDOVA, Calif.--(BUSINESS WIRE)--Oct. 28, 1997--USCS International, Inc. (NASDAQ:USCS) today reported that net income for the third
quarter rose to $5,791,000, or $0.24 per share, a 34% increase over third quarter 1996 net income of $4,328,000, or $0.18 per share.
Software and services revenue for the quarter rose 9% to $68,644,000 from $63,140,000. Exclusive of TCI, software and services revenue grew by 14%. As
planned, equipment sales and services revenue declined by approximately 28% to $4,479,000 from $6,217,000. Total revenue for the period increased to
$73,123,000 from $69,357,000 in the third quarter 1996. Weighted average shares outstanding in the third quarter of 1997 were 24,399,000 compared to
24,154,000 in the year ago period.
For the first nine months of 1997, USCS net income was $16,446,000, or $0.68 per share, up from $9,734,000, or $0.44 per share in the year ago period.
Software and services revenue rose 15% to $201,997,000 as compared to the $176,350,000 recorded for the first nine months of 1996. Equipment sales and
services revenue declined to $14,794,000 from $16,834,000. Total revenue for the period was $216,791,000, up from $193,184,000. Weighted average shares
outstanding in the first nine months of 1997 were 24,312,000 compared to 22,039,000 in the comparable year ago period.
''This is the fourth quarter of record earnings that we have achieved since going public in June of 1996,'' commented Dr. James Castle, chairman and chief executive
officer.
''We are especially pleased with the numerous customer management software contracts signed during the quarter which represent both new and renewed
agreements among a diversity of customers. Of particular significance was an agreement with BellSouth Entertainment to utilize Intelecable(R) as their
enterprise-wide customer management and billing system. An additional North American Intelecable agreement was reached with Cable Plus. We also signed
multiple agreements with Time Warner, the nation's largest MSO, for our industry leading DDP/SQL system.
''Internationally, we continued to expand and solidify our geographic customer base. Our penetration of the Latin American market was further strengthened with the
signing of a multi-year contract with TVA in Brazil and with VenInFoTel, an Venezuelan cable operator. Also announced during the quarter was an agreement in
Portugal with cable operator Intercabo.
''We also secured several significant bill processing contracts, most notably a recently announced agreement with Bell Atlantic to license our bill processing
technology and to supply software for the consolidation of statements from the various Bell Atlantic billing systems. In addition, we signed five-year contracts with
Lucent Technologies and Global One, the joint venture of Deutsche Telekom, France Telecom and Sprint.
''We continue to provide customer management and billing for Tele-Communications, Inc. While the conversion of TCI subscribers has not begun, we are prepared
for the eventual migration in accordance with TCI's schedule, which has not been finalized. In spite of this eventuality, we will continue to carry forward the
momentum of this quarter by aggressively pursuing opportunities both internationally, as well as within the US communications market and other service industries,''
concluded Dr. Castle.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act.
Actual results could differ materially from those projected in the forward-looking statements, which involve a number of risks and uncertainties and should be
considered in conjunction with the cautionary statements contained in the registration statement filed by USCS on Form S-1 and declared effective by the Securities
and Exchange Commission on June 20, 1996 and its report on Form 10-Q for the quarter ended June 30, 1997.
USCS International offers customer management software and statement processing solutions to the global communications marketplace. In the United States, the
company currently serves 58 percent of all cable television subscribers, 39 percent of all cellular telephone subscribers and 11 percent of all landline telephone
subscribers.
USCS International's clients include providers of cable television, wireless and wireline telephony, direct broadcast satellite and multiple communications services in
the United States and 20 other countries. More information on USCS can be found at uscs.com .
USCS INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands except per share amounts)
Three months ended Nine months ended
Sept. 30, Sept. 30,
1997 1996 1997 1996
Revenue:
Software and
services:
Customer
management $ 39,646 $ 37,084 $115,080 $103,368
Bill processing 28,998 26,056 86,917 72,982
-------- -------- -------- --------
Total 68,644 63,140 201,997 176,350
Equipment sales
and services 4,479 6,217 14,794 16,834
-------- -------- -------- --------
Total revenue 73,123 69,357 216,791 193,184
Cost of revenue:
Software and
services:
Customer
management 17,759 18,601 53,670 55,352
Bill processing 20,923 19,294 62,847 54,129
-------- -------- -------- --------
Total 38,682 37,895 116,517 109,481
Equipment sales
and services 2,536 3,749 8,062 10,095
-------- -------- -------- --------
Total cost of
revenue 41,218 41,644 124,579 119,576
-------- -------- -------- --------
Gross profit 31,905 27,713 92,212 73,608
Operating expenses:
Research and
development 7,323 6,768 22,054 18,301
Selling,
general and
administrative 14,799 13,033 42,261 36,111
-------- -------- -------- --------
Total operating
expenses 22,122 19,801 64,315 54,412
-------- -------- -------- --------
Operating income 9,783 7,912 27,897 19,196
Interest expense 109 757 464 3,106
Income before
income taxes 9,674 7,155 27,433 16,090
Income tax provision 3,883 2,827 10,987 6,356
======== ======== ======== ========
Net income $ 5,791 $ 4,328 $ 16,446 $ 9,734
======== ======== ======== ========
Earnings per
share $ 0.24 $ 0.18 $ 0.68 $ 0.44
======== ======== ======== ========
Weighted average
common shares
and equivalents 24,399 24,154 24,312 22,039
======== ======== ======== ========
USCS INTERNATIONAL, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands except share and per share amounts)
Sept. 30, Dec. 31,
1997 1996
(Unaudited)
ASSETS
Current Assets:
Cash $ 8,815 $ 8,452
Accounts receivable 80,311 73,458
Current portion of
net investment in leases 4,585 4,922
Paper products and
other inventory 4,033 4,418
Other 6,570 8,972
--------- ---------
Total current assets 104,314 100,222
Property and equipment, net 96,706 94,350
Net investment in leases,
net of current portion 3,281 6,252
Other 9,683 4,735
--------- ---------
Total assets $ 213,984 $ 205,559
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and
accrued expenses $ 48,525 $ 48,975
Current portion of
long-term debt 3,992 4,772
Deferred revenue 1,660 9,434
--------- ---------
Total current liabilities 54,177 63,181
Long-term debt, net of
current portion 2,079 5,647
Customer deposits 18,176 12,752
Other liabilities 8,627 8,646
--------- ---------
Total liabilities 83,059 90,226
--------- ---------
Stockholders' Equity:
Preferred Stock, $.05 par
value, 10,000,000 shares
authorized; no shares
issued and outstanding -- --
Common Stock, $.05 par value,
Authorized 40,000,000 shares;
Issued and outstanding:
23,257,969 shares at
Sept. 30, 1997 (unaudited)
and 23,068,826 shares at
Dec. 31, 1996 1,172 1,153
Additional paid-in capital 56,221 53,902
Retained earnings 76,883 60,437
Treasury Stock (3,157) --
Foreign currency
translation adjustment (194) (159)
--------- ---------
Total stockholders' equity 130,925 115,333
--------- ---------
Total liabilities and
stockholders' equity $ 213,984 $ 205,559
========= =========
USCS INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Nine months ended
Sept. 30,
1997 1996
Cash flows from operating activities:
Net cash provided by operating
activities $ 31,564 $ 15,762
-------- --------
Cash flows from investing activities:
Capital expenditures, net (23,988) (20,042)
Purchase of subsidiary (2,046) --
Net cash used in investing
activities (26,034) (20,042)
-------- --------
Cash flows from financing activities:
Net paydown under revolving credit
agreement -- (28,500)
Payments on long-term debt (4,348) (24,337)
Proceeds from issuance of common
stock 2,338 54,286
Repurchase of common stock (3,157) (38)
-------- --------
Net cash (used) provided by
financing activities (5,167) 1,411
-------- --------
Net increase (decrease) in cash 363 (2,869)
Cash at January 1 8,452 6,627
-------- --------
Cash at September 30 $ 8,815 $ 3,758
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