ENGLEWOOD, Colo., Nov. 9 /PRNewswire-FirstCall/ -- CSG Systems
International, Inc., a leading provider of customer care and billing
solutions, today announced it has entered into an agreement to effectively
terminate its ICMS service bureau processing agreement with FairPoint
Communications, Inc., a provider of communication services to rural
communities. CSG currently provides processing services utilizing the ICMS
customer care and billing software application under a long-term processing
agreement with FairPoint. FairPoint is CSG's only client that receives
processing services utilizing the ICMS asset in a service bureau environment.
Under the terms of the termination agreement, CSG expects to continue to
provide processing services using the ICMS asset until FairPoint's customers
are transitioned to an alternative solution, which is expected to be no later
than December 31, 2006.
(Logo: http://www.newscom.com/cgi-bin/prnh/20020627/CSGSLOGO )
"Our decision to terminate this agreement is consistent with CSG's
decision to focus on our core competencies in the cable and DBS markets
utilizing CSG's Advanced Convergent Platform and related services," said Ed
Nafus, chief executive officer and president of CSG Systems International,
Inc.
As a result of this contract termination, CSG expects to record a charge
ranging from approximately $6 million to $7 million in the fourth quarter of
2005, which consists primarily of a non-cash impairment charge related to
long-lived assets associated with the FairPoint processing agreement
(principally, a client contract asset); retention and severance costs for
certain of CSG's employees impacted by the termination agreement; and a
contract termination fee of $4 million, which is scheduled to be paid to
FairPoint in 2006.
In addition, CSG today updated its expected earnings guidance for the
fourth quarter 2005 to include the impact of the termination agreement. The
$6 million to $7 million expected charge, or approximately $0.08 to $0.09 per
diluted share, will result in CSG reducing its guidance from $0.30 to $0.31
per diluted share from continuing operations to $0.21 to $0.23 per diluted
share from continuing operations for the fourth quarter 2005. Cash flows from
operations for the fourth quarter of 2005 are not expected to be significantly
impacted by the termination agreement.
About CSG Systems International
Headquartered in Englewood, Colorado, CSG Systems International
(Nasdaq: CSGS) is a leader in next-generation billing and customer care
solutions for the cable television, direct broadcast satellite, advanced IP
services, next generation mobile, and fixed wireline markets. CSG's unique
combination of proven and future-ready solutions, delivered in both outsourced
and licensed formats, empowers its clients to deliver unparalleled customer
service, improve operational efficiencies and rapidly bring new
revenue-generating products to market. CSG is an S&P Midcap 400 company. For
more information, visit CSG's Web site at http://www.csgsystems.com.
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. These factors include, but are not limited to: 1) CSG's ability to
continue to perform satisfactorily and maintain good customer relations with
its three largest clients, Comcast Corporation, Echostar Communications, and
Time Warner, Inc., which combined make up over 50% of CSG's revenues from
continuing operations; 2) the continued acceptance of CSG ACP and its related
products and services; 3) CSG's ability to enhance current products and
develop new technology that will retain existing clients and capture new
market share; 4) significant forays into new markets, which may prove costly
and unprofitable; 5) the degree to which CSG's expectations of market
penetration and consumer acceptance of broadband, wireline and wireless
services prove true -- and even if realized, CSG's ability to meet the billing
and customer care needs of those markets; 6) client consolidation, which has
decreased the number of potential buyers for many of CSG's products and
services; 7) CSG's ability to renew contracts and sell additional products and
services to existing and new clients; 8) CSG's ability to successfully deliver
on lengthy and/or complex implementation projects, which by their nature,
carry much more risk; and 9) if the sale of the GSS Business to Comverse is
terminated or delayed for any reason, there is a risk that the resulting
disruption to the GSS Business could negatively impact the division's
operational and financial performance. 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.
SOURCE CSG Systems International, Inc.
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Related links:
http://www.csgsystems.com
Photo Notes:
NewsCom:
http://www.newscom.com/cgi-bin/prnh/20020627/CSGSLOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
Company News On-Call:
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CONTACT:
Liz Bauer, Senior Vice President of CSG
Systems International, Inc., +1-303-804-4065,
liz_bauer@csgsystems.com
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