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Shares of CSG Systems International, Inc. (CSGS) were higher today after the Company announced its financial results for the third quarter ended September 30, 2009.
Total revenues for the third quarter of 2009 were $124.5 million, a 6% increase from the $118.0 million for the same period in 2008. Non-GAAP EPS for the third quarter of 2009 was $0.43 per diluted share, compared to non-GAAP EPS of $0.39 per diluted share for the third quarter of 2008. This beat analysts' estimate for EPS of $0.39 per share.
Peter Kalan, President and CEO of CSG Systems, commented in a conference call, "We continue to execute well in this very difficult business environment, while continuing to invest over 14% of our revenues in research and development during the quarter. Our strong business model, prudent cost management, stable capital structure and long term relationships with clients provides us comfort during this difficult time."
He added, "Our market share wins and conversions during the quarter are strong endorsements of our products, services and support."
Mr. Kalan noted, "Only 13% of our revenues came from outside the cable industry during the quarter. However, we believe that there will be an increased demand for our solutions outside of the cable industry when the economy recovers."
He explained, "While sales cycles have lengthened and decisions delayed in this economy, we have had our value proposition validated by some of the largest communications providers in North America. We are also well positioned to leverage our solutions and experience into complimentary markets. We are making progress in new vertical markets, and we are playing in some new spaces. We believe these markets have the potential to grow significantly faster than our core business. We have very good reasons to be optimistic."
Randy Wiese, CFO of CSG Systems, commented, "Our continued strong financial and operational performance has put us in a solid position going forward. We are very pleased with our organic revenue growth and the increased penetration of our products and services within our existing customer base."
He noted, "Our year-to-date cash flows from operations of $97 million are well ahead of the pace needed to achieve our full-year expectations."
The Company expects FY09 revenues of $498-$500 million, and non-GAAP EPS of $1.62-$1.64.
Mr. Wiese added, "We expects our non-GAAP operating margin to be approximately 18%. This is slightly above our previous guidance and reflects the strength of our Q3 results and our spending expectations for the remainder of the year. We see margin expansion opportunities in FY10 that we believe will help us toward our goal of achieving long term operating margins of 18%-20%."
He concluded, "Based on the expected momentum exiting FY09 and opportunities that we see going into FY10, we believe that our expectations for mid-single digit revenue growth in FY10 are reasonable."
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