CSG Systems International Reports Record Revenues for Fourth Quarter 2020

DENVER–(BUSINESS WIRE)–CSG (NASDAQ: CSGS), the trusted partner to simplify the complexity of business transformation in the digital age, today reported results for the quarter and year ended December 31, 2020.

Financial Results:

  • Fourth quarter 2020 financial results:

    • Total revenue was $260.5 million and total non-GAAP adjusted revenue was $243.2 million.
    • GAAP operating income was $23.7 million, or 9.1% of total revenue, and non-GAAP operating income was $43.0 million, or 17.7% of non-GAAP adjusted revenue.
    • GAAP earnings per diluted share (EPS) was $0.41 and non-GAAP EPS was $0.90.
    • Cash flows from operations were $57.3 million, with non-GAAP free cash flow of $52.1 million.
  • Full year 2020 financial results:

    • Total revenue was $990.5 million and non-GAAP adjusted revenue was $922.9 million.
    • GAAP operating income was $105.6 million, or 10.7% of total revenue, and non-GAAP operating income was $154.9 million, or 16.8% of non-GAAP adjusted revenue.
    • GAAP EPS was $1.82 and non-GAAP EPS was $3.12.
    • Cash flows from operations were $173.0 million, with non-GAAP free cash flow of $143.6 million.

Shareholder Returns:

  • On November 16, 2020, CSG declared its quarterly cash dividend of $0.235 per share of common stock, or a total of approximately $8 million, to shareholders, bringing total 2020 dividends to approximately $31 million.
  • In February 2021, CSG’s Board of Directors approved an approximately 6% increase in CSG’s cash dividend, with quarterly payments of $0.25 per share of common stock to be paid in March 2021.
  • During the quarter and full year 2020, CSG repurchased under its stock repurchase program, approximately 334,000 shares of its common stock for approximately $14 million and approximately 624,000 shares of its common stock for approximately $26 million, respectively.

“As challenging as 2020 was, CSG is fortunate to have a strong, resilient business model that generates good recurring cash flows and high revenue and earnings visibility,” said Brian Shepherd, president and chief executive officer of CSG. “We are pleased to announce that our 2020 financial performance finished at the high end of our guidance ranges, despite the challenges of the pandemic. Our strong fourth quarter finish in 2020 was underpinned by the strength of our customer base as CSG continues to be a trusted technology provider that helps our clients better acquire, monetize, engage and retain their customers. Looking ahead, we remain well positioned to lengthen and strengthen our relationships with existing customers, accelerate our growth and diversify our revenue base.”

Financial Overview (unaudited)

(in thousands, except per share amounts and percentages):

 

Quarter Ended December 31,

 

Year Ended December 31,

 

 

 

 

 

Percent

 

 

 

 

 

Percent

 

2020

 

2019

 

Changed

 

2020

 

2019

 

Changed

GAAP Results:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

$

260,487

 

$

254,747

 

2

%

$

990,533

 

$

996,810

 

(1

%)

Operating Income

 

23,675

 

 

30,258

 

(22

%)

 

105,556

 

 

126,109

 

(16

%)

Operating Margin Percentage

 

9.1

%

 

11.9

%

 

 

 

10.7

%

 

12.7

%

 

 

EPS

$

0.41

 

$

0.70

 

(41

%)

$

1.82

 

$

2.55

 

(29

%)

Non-GAAP Results:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Revenue

$

243,248

 

$

236,907

 

3

%

$

922,862

 

$

927,696

 

(1

%)

Operating Income

 

42,987

 

 

41,540

 

3

%

 

154,887

 

 

165,702

 

(7

%)

Adjusted Operating Margin Percentage

 

17.7

%

 

17.5

%

 

 

 

16.8

%

 

17.9

%

 

 

EPS

$

0.90

 

$

0.98

 

(8

%)

$

3.12

 

$

3.53

 

(12

%)

For additional information and reconciliations regarding CSG’s use of non-GAAP financial measures, please refer to the attached Exhibit 2 and the Investor Relations section of CSG’s website at csgi.com.

Results of Operations

GAAP Results: Total revenue for the fourth quarter of 2020 was $260.5 million, a 2% increase when compared to revenue of $254.7 million for the fourth quarter of 2019, and a 7% increase when compared to revenue of $244.1 million for the third quarter of 2020. These increases in revenue can be mainly attributed to a strong quarter of managed services, software, and professional services revenue. The fourth quarter marks the second quarter of sequential revenue growth, reflecting stabilization in sales and implementation cycles and a rebound in processing volumes that were negatively impacted in the first half of 2020 as a result of the COVID-19 pandemic. Total revenue for the full year 2020 was $990.5 million, a 1% decrease when compared to revenue of $996.8 million for the full year 2019. This decrease is primarily due to the pricing adjustments associated with the five-year Comcast extension effective January 1, 2020, as well as foreign currency headwinds, offset by the strong fourth quarter revenue discussed above, and year-over-year growth in revenue management solutions.

GAAP operating income for the fourth quarter of 2020 was $23.7 million, or 9.1% of total revenue, compared to $30.3 million, or 11.9% of total revenue, for the fourth quarter of 2019, and $28.9 million, or 11.9% of total revenue, for the third quarter of 2020. GAAP operating income for the full year 2020 was $105.6 million, or 10.7% of total revenue, compared to $126.1 million, or 12.7% of total revenue, for the full year 2019. GAAP operating income for the fourth quarter of 2020 was negatively impacted by executive transition costs of $11.2 million. Full year 2020 operating income was also negatively impacted by executive transition costs of $13.0 million and lower revenue. Additionally, GAAP operating income for the full year 2020 includes the benefit of lower employee-related costs, off-set to a certain extent by the write-off of approximately $10 million of deferred contract costs resulting from the discontinuance of a project implementation during the second quarter.

GAAP EPS for the fourth quarter of 2020 was $0.41, as compared to $0.70 for the fourth quarter of 2019, and $0.42 for the third quarter of 2020. GAAP EPS for the full year 2020 was $1.82, compared to $2.55 for the full year 2019. The year-over-year decreases in GAAP EPS can be mainly attributed to the lower operating income, discussed above, and a lower effective income tax rate in 2019 due to Comcast’s exercise of 0.4 million vested common stock warrants that resulted in the recognition of an approximately $4 million net income tax benefit in the fourth quarter of 2019.

Non-GAAP Results: Non-GAAP adjusted revenue for the fourth quarter of 2020 was $243.2 million, a 3% increase when compared to non-GAAP adjusted revenue of $236.9 million for the fourth quarter of 2019, and a 7% increase when compared to $227.7 million for the third quarter of 2020. Total non-GAAP adjusted revenue for the full year 2020 was $922.9 million, a 1% decrease when compared to $927.7 million for the full year 2019. The fluctuations in non-GAAP adjusted revenue between periods are primarily due to the factors discussed above.

Non-GAAP operating income for the fourth quarter of 2020 was $43.0 million, or 17.7% of total non-GAAP adjusted revenue, compared to $41.5 million, or 17.5% of total non-GAAP adjusted revenue for the fourth quarter of 2019, and $39.1 million, or 17.2% of total non-GAAP adjusted revenue for the third quarter of 2020. Non-GAAP operating income for the full year 2020 was $154.9 million, or 16.8% of total non-GAAP adjusted revenue, compared to $165.7 million, or 17.9% of total non-GAAP adjusted revenue for the full year 2019. The full year-over-year decrease in non-GAAP operating income is reflective of the approximately $10 million write-off of deferred contract costs and lower revenue, discussed above, off-set to a certain extent by lower employee related costs.

Non-GAAP EPS for the fourth quarter of 2020 was $0.90 compared to $0.98 for the fourth quarter of 2019, and $0.76 for the third quarter of 2020. Non-GAAP EPS for the full year 2020 was $3.12 compared to $3.53 for the full year 2019. The year-over-year decreases in non-GAAP EPS are primarily due to the lower 2019 non-GAAP effective income tax rate, with the full year non-GAAP EPS also impacted by lower non-GAAP operating income discussed above.

Balance Sheet and Cash Flows

Cash, cash equivalents and short-term investments as of December 31, 2020 were $240.3 million compared to $212.1 million as of September 30, 2020 and $182.7 million as of December 31, 2019. CSG had net cash flows from operations for the fourth quarters ended December 31, 2020 and 2019 of $57.3 million and $43.5 million, respectively, and had non-GAAP free cash flow of $52.1 million and $33.9 million, respectively. For the year ended December 31, 2020 and 2019, CSG generated net cash flows from operations of $173.0 million and $151.1 million, respectively, and had non-GAAP free cash flow of $143.6 million and $113.8 million, respectively.

Summary of 2021 Financial Guidance

CSG’s financial guidance for the full year 2021 is as follows:

GAAP Measures:

 

 

Revenue

 

$995 – $1,035 million

Operating Margin Percentage

 

12.2% – 12.7%

EPS

 

$2.30 – $2.53

Cash Flows from Operating Activities

 

$135 – $155 million

Non-GAAP Measures:

 

 

Adjusted Revenue

 

$922 – $954 million

Adjusted Operating Margin Percentage

 

16.25% – 16.75%

EPS

 

$3.02 – $3.24

For additional information and reconciliations regarding CSG’s use of non-GAAP financial measures, please refer to the attached Exhibit 2 and the Investor Relations section of CSG’s website at csgi.com.

Conference Call

CSG will host a conference call on Wednesday, February 3, 2021 at 5:00 p.m. EST, to discuss CSG’s fourth quarter and full year results for 2020. The call will be carried live and archived on the Internet. A link to the conference call is available at http://ir.csgi.com. In addition, to reach the conference by phone, call 800-437-2398 and ask the operator for the CSG Systems International conference call.

Additional Information

For information about CSG, please visit CSG’s web site at csgi.com. Additional information can be found in the Investor Relations section of the website.

About CSG

For more than 35 years, CSG has simplified the complexity of business, delivering innovative customer engagement solutions that help companies acquire, monetize, engage and retain customers. Operating across more than 120 countries worldwide, CSG manages billions of critical customer interactions annually, and its award-winning suite of software and services allow companies across dozens of industries to tackle their biggest business challenges and thrive in an ever-changing marketplace. CSG is the trusted partner for driving digital innovation for hundreds of leading global brands, including AT&T, Charter Communications, Comcast, DISH, Eastlink, Formula One, Maximus, MTN and Telstra. To learn more, visit our website at csgi.com and connect with us on LinkedIn, Twitter and Facebook.

Forward-Looking Statements

This news release contains forward-looking statements as defined under the Securities Act of 1933, as amended, that are based on assumptions about a number of important factors and involve risks and uncertainties that could cause actual results to differ materially from what appears in this news release. Some of these key factors include, but are not limited to the following items:

  • CSG’s business may be disrupted and its results of operations and cash flows adversely affected by the COVID-19 pandemic;
  • CSG derives over forty percent of its revenue from its two largest clients;
  • Continued market acceptance of CSG’s products and services;
  • CSG’s ability to continuously develop and enhance products in a timely, cost-effective, technically advanced and competitive manner;
  • CSG’s ability to deliver its solutions in a timely fashion within budget, particularly large and complex software implementations;
  • CSG’s dependency on the global telecommunications industry, and in particular, the North American telecommunications industry;
  • CSG’s ability to meet its financial expectations;
  • Increasing competition in CSG’s market from companies of greater size and with broader presence;
  • CSG’s ability to successfully integrate and manage acquired businesses or assets to achieve expected strategic, operating and financial goals;
  • CSG’s ability to protect its intellectual property rights;
  • CSG’s ability to maintain a reliable, secure computing environment;
  • CSG’s ability to conduct business in the international marketplace;
  • CSG’s ability to comply with applicable U.S. and International laws and regulations; and
  • Fluctuations in credit market conditions, general global economic and political conditions, and foreign currency exchange rates.

This list is not exhaustive, and readers are encouraged to review the additional risks and important factors described in CSG’s reports on Forms 10-K and 10-Q and other filings made with the SEC.

 

CSG SYSTEMS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS-UNAUDITED

(in thousands, except per share amounts)

 

 

 

December 31,

 

December 31,

 

 

2020

 

2019

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

$

188,699

 

$

156,548

 

Short-term investments

 

51,598

 

 

26,109

 

Total cash, cash equivalents and short-term investments

 

240,297

 

 

182,657

 

Settlement assets

 

149,785

 

 

169,327

 

Trade accounts receivable:

 

 

 

 

 

 

Billed, net of allowance of $3,628 and $3,735

 

226,623

 

 

244,058

 

Unbilled

 

37,785

 

 

33,450

 

Income taxes receivable

 

2,167

 

 

4,297

 

Other current assets

 

41,688

 

 

35,293

 

Total current assets

 

698,345

 

 

669,082

 

Non-current assets:

 

 

 

 

 

 

Property and equipment, net of depreciation of $105,073 and $98,029

 

81,759

 

 

84,429

 

Operating lease right-of-use assets

 

110,756

 

 

94,847

 

Software, net of amortization of $139,836 and $125,437

 

26,453

 

 

32,526

 

Goodwill

 

272,322

 

 

259,164

 

Acquired client contracts, net of amortization of $105,778 and $93,767

 

48,012

 

 

55,105

 

Client contract costs, net of amortization of $39,893 and $31,526

 

47,238

 

 

50,746

 

Deferred income taxes

 

10,205

 

 

9,392

 

Other assets

 

36,910

 

 

27,739

 

Total non-current assets

 

633,655

 

 

613,948

 

Total assets

$

1,332,000

 

$

1,283,030

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Current portion of long-term debt

$

14,063

 

$

10,313

 

Operating lease liabilities

 

22,651

 

 

22,442

 

Client deposits

 

39,992

 

 

38,687

 

Trade accounts payable

 

29,834

 

 

32,704

 

Accrued employee compensation

 

86,289

 

 

77,527

 

Settlement liabilities

 

148,819

 

 

168,342

 

Deferred revenue

 

52,357

 

 

45,094

 

Income taxes payable

 

6,627

 

 

2,806

 

Other current liabilities

 

19,383

 

 

20,778

 

Total current liabilities

 

420,015

 

 

418,693

 

Non-current liabilities:

 

 

 

 

 

 

Long-term debt, net of unamortized discounts of $5,346 and $10,053

 

337,154

 

 

346,509

 

Operating lease liabilities

 

95,926

 

 

78,936

 

Deferred revenue

 

17,275

 

 

18,552

 

Income taxes payable

 

2,436

 

 

2,543

 

Deferred income taxes

 

5,109

 

 

6,376

 

Other non-current liabilities

 

31,690

 

 

14,759

 

Total non-current liabilities

 

489,590

 

 

467,675

 

Total liabilities

 

909,605

 

 

886,368

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, par value $.01 per share; 10,000 shares authorized; zero shares issued and outstanding

 

 

 

 

Common stock, par value $.01 per share; 100,000 shares authorized; 32,713 and 32,891 shares outstanding

 

700

 

 

696

 

Additional paid-in capital

 

470,557

 

 

454,663

 

Treasury stock, at cost; 35,980 and 35,356 shares

 

(894,126

)

 

(867,817

)

Accumulated other comprehensive income (loss):

 

 

 

 

 

 

Unrealized gains on short-term investments, net of tax

 

13

 

 

16

 

Cumulative foreign currency translation adjustments

 

(31,151

)

 

(39,519

)

Accumulated earnings

 

876,402

 

 

848,623

 

Total stockholders’ equity

 

422,395

 

 

396,662

 

Total liabilities and stockholders’ equity

$

1,332,000

$

1,283,030

 

 

CSG SYSTEMS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME-UNAUDITED

(in thousands, except per share amounts)

 

 

 

Quarter Ended

 

Year Ended

 

 

December 31,

2020

 

December 31,

2019

 

December 31,

2020

 

December 31,

2019

Revenue

$

260,487

 

$

254,747

 

$

990,533

 

$

996,810

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue (exclusive of depreciation, shown separately below)

 

135,165

 

 

131,871

 

 

535,597

 

 

525,122

 

Other operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

32,822

 

 

32,207

 

 

122,847

 

 

127,994

 

Selling, general and administrative

 

61,864

 

 

53,345

 

 

198,279

 

 

191,329

 

Depreciation

 

5,910

 

 

5,503

 

 

22,926

 

 

21,422

 

Restructuring and reorganization charges

 

1,051

 

 

1,563

 

 

5,328

 

 

4,834

 

Total operating expenses

 

236,812

 

 

224,489

 

 

884,977

 

 

870,701

 

Operating income

 

23,675

 

 

30,258

 

 

105,556

 

 

126,109

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(3,606

)

 

(4,300

)

 

(15,500

)

 

(17,748

)

Amortization of original issue discount

 

(762

)

 

(720

)

 

(2,983

)

 

(2,819

)

Interest and investment income, net

 

158

 

 

457

 

 

1,244

 

 

1,785

 

Other, net

 

223

 

 

(1,481

)

 

(2,961

)

 

(1,604

)

Total other

 

(3,987

)

 

(6,044

)

 

(20,200

)

 

(20,386

)

Income before income taxes

 

19,688

 

 

24,214

 

 

85,356

 

 

105,723

 

Income tax provision

 

(6,423

)

 

(1,633

)

 

(26,645

)

 

(22,953

)

Net income

$

13,265

 

$

22,581

 

$

58,711

 

$

82,770

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

31,832

 

 

31,967

 

 

32,010

 

 

32,051

 

Diluted

 

32,225

 

 

32,443

 

 

32,278

 

 

32,465

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.42

 

$

0.71

 

$

1.83

 

$

2.58

 

Diluted

 

0.41

 

 

0.70

 

 

1.82

 

 

2.55

 

 

CSG SYSTEMS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS-UNAUDITED

(in thousands)

 

 

 

Year Ended

 

 

December 31,

2020

 

December 31,

2019

Cash flows from operating activities:

 

 

 

 

 

 

Net income

$

58,711

 

$

82,770

 

Adjustments to reconcile net income to net cash provided by operating activities-

 

 

 

 

 

 

Depreciation

 

22,926

 

 

21,422

 

Amortization

 

43,947

 

 

45,700

 

Amortization of original issue discount

 

2,983

 

 

2,819

 

Asset impairment

 

11,030

 

 

438

 

Gain on short-term investments and other

 

(123

)

 

(364

)

Deferred income taxes

 

(1,033

)

 

(77

)

Stock-based compensation

 

25,237

 

 

19,919

 

Subtotal

 

163,678

 

 

172,627

 

Changes in operating assets and liabilities, net of acquired amounts:

 

 

 

 

 

 

Trade accounts receivable, net

 

14,659

 

 

(4,015

)

Other current and non-current assets and liabilities

 

(10,688

)

 

(17,727

)

Income taxes payable/receivable

 

5,405

 

 

4,771

 

Trade accounts payable and accrued liabilities

 

(5,752

)

 

(10,317

)

Deferred revenue

 

5,718

 

 

5,737

 

Net cash provided by operating activities

 

173,020

 

 

151,076

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of software, property and equipment

 

(29,397

)

 

(37,319

)

Purchases of short-term investments

 

(81,824

)

 

(54,258

)

Proceeds from sale/maturity of short-term investments

 

56,454

 

 

52,135

 

Acquisition of and investments in business, net of cash acquired

 

(11,491

)

 

(17,194

)

Net cash used in investing activities

 

(66,258

)

 

(56,636

)

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from issuance of common stock

 

2,523

 

 

2,227

 

Payment of cash dividends

 

(31,056

)

 

(29,126

)

Repurchase of common stock

 

(38,123

)

 

(30,918

)

Exercise of common stock warrants

 

 

 

(12,911

)

Payments on long-term debt

 

(10,313

)

 

(7,500

)

Net cash used in financing activities

 

(76,969

)

 

(78,228

)

Effect of exchange rate fluctuations on cash

 

2,358

 

 

1,059

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

32,151

 

 

17,271

 

 

 

 

 

 

 

 

Cash and cash equivalents, beginning of period

 

156,548

 

 

139,277

 

Cash and cash equivalents, end of period

$

188,699

 

$

156,548

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

Cash paid during the period for-

 

 

 

 

 

 

Interest

$

13,681

 

$

16,064

 

Income taxes

 

22,431

 

 

18,358

 

EXHIBIT 1

CSG SYSTEMS INTERNATIONAL, INC.

SUPPLEMENTAL REVENUE ANALYSIS

Revenue by Significant Customers: 10% or more of Revenue

 

Quarter Ended

 

Quarter Ended

 

Quarter Ended

 

December 31, 2020

 

September 30, 2020

 

December 31, 2019

 

Amount

 

% of Revenue

 

Amount

 

% of Revenue

 

Amount

 

% of Revenue

Comcast

$

54,845

21

%

$

52,483

22

%

$

60,049

24

%

Charter

 

54,121

21

%

 

53,202

22

%

 

50,617

20

%

 

Year Ended

Year Ended

 

December 31, 2020

December 31, 2019

 

Amount

% of Revenue

Amount

% of Revenue

Comcast

$

213,290

22

%

$

228,962

23

%

Charter

 

209,400

21

%

 

194,994

20

%

 

Revenue by Vertical

 

Quarter Ended

 

Quarter Ended

 

Quarter Ended

 

December 31,

 

September 30,

 

December 31,

 

2020

 

2020

 

2019

Broadband/Cable/Satellite

56

%

59

%

59

%

Telecommunications

22

%

18

%

19

%

All other

22

%

23

%

22

%

Total revenue

100

%

100

%

100

%

 

Year Ended

 

Year Ended

 

December 31,

 

December 31,

 

2020

 

2019

Broadband/Cable/Satellite

58

%

58

%

Telecommunications

19

%

19

%

All other

23

%

23

%

Total revenue

100

%

100

%

 

Revenue by Geography

 

Quarter Ended

 

Quarter Ended

 

Quarter Ended

 

December 31,

 

September 30,

 

December 31,

 

2020

 

2020

 

2019

Americas

84

%

86

%

88

%

Europe, Middle East and Africa

12

%

10

%

8

%

Asia Pacific

4

%

4

%

4

%

Total revenue

100

%

100

%

100

%

 

Year Ended

 

Year Ended

 

December 31,

 

December 31,

 

2020

 

2019

Americas

86

%

87

%

Europe, Middle East and Africa

10

%

9

%

Asia Pacific

4

%

4

%

Total revenue

100

%

100

%

 

EXHIBIT 2

CSG SYSTEMS INTERNATIONAL, INC.

DISCLOSURES FOR NON-GAAP FINANCIAL MEASURES

Use of Non-GAAP Financial Measures and Limitations

To supplement its condensed consolidated financial statements presented in accordance with generally accepted accounting principles (GAAP), CSG uses non-GAAP adjusted revenue, non-GAAP operating income, non-GAAP adjusted operating margin percentage, non-GAAP EPS, non-GAAP adjusted EBITDA, and non-GAAP free cash flow. CSG believes that these non-GAAP financial measures, when reviewed in conjunction with its GAAP financial measures, provide investors with greater transparency to the information used by CSG’s management in its financial and operational decision making. CSG uses these non-GAAP financial measures for the following purposes:

  • Certain internal financial planning, reporting, and analysis;
  • Forecasting and budgeting;
  • Certain management compensation incentives; and
  • Communications with CSG’s Board of Directors, stockholders, financial analysts, and investors.

These non-GAAP financial measures are provided with the intent of providing investors with the following information:

  • A more complete understanding of CSG’s underlying operational results, trends, and cash generating capabilities;
  • Consistency and comparability with CSG’s historical financial results; and
  • Comparability to similar companies, many of which present similar non-GAAP financial measures to investors.

Non-GAAP financial measures are not measures of performance under GAAP, and therefore should not be considered in isolation or as a substitute for GAAP financial information. Limitations with the use of non-GAAP financial measures include the following items:

  • Non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles;
  • The way in which CSG calculates non-GAAP financial measures may differ from the way in which other companies calculate similar non-GAAP financial measures;
  • Non-GAAP financial measures do not include all items of income and expense that affect CSG’s operations and that are required by GAAP to be included in financial statements;
  • Certain adjustments to CSG’s non-GAAP financial measures result in the exclusion of items that are recurring and will be reflected in CSG’s financial statements in future periods; and
  • Certain charges excluded from CSG’s non-GAAP financial measures are cash expenses, and therefore do impact CSG’s cash position.

CSG compensates for these limitations by relying primarily on its GAAP results and using non-GAAP financial measures as a supplement only. Additionally, CSG provides specific information regarding the treatment of GAAP amounts considered in preparing the non-GAAP financial measures and reconciles each non-GAAP financial measure to the most directly comparable GAAP measure.

Contacts

John Rea, Investor Relations

(210) 687-4409

E-mail: john.rea@csgi.com

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Laurel McBride real estate agent with Century 21 N and N Realtors with homes for sale in Logan Utah