CSGS

CSG Systems International, Inc. (CSGS)

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CSG Systems International (CSGS)

Q2 2013 Earnings Call

August 06, 2013 5:00 pm ET

Executives

Liz Bauer - Senior Vice President of Investor Relations and Strategic Communications

Peter E. Kalan - Chief Executive Officer, President and Director

Randy R. Wiese - Chief Financial Officer, Chief Accounting Officer and Executive Vice President

Analysts

Mark Sue - RBC Capital Markets, LLC, Research Division

Lauren Choi - JP Morgan Chase & Co, Research Division

Howard Smith - First Analysis Securities Corporation, Research Division

Paul B. Thomas - Goldman Sachs Group Inc., Research Division

Presentation

Operator

Good day, ladies and gentlemen, thank you for standing by. Welcome to the CSG Systems Q2 2013 Conference Call. [Operator Instructions] This conference is also being recorded today, August 7, 2013. I would now like to turn the conference over to our host, Ms. Liz Bauer. Please go ahead.

Liz Bauer

Thank you, Crescent, and thanks to everyone for joining us. Today's discussion will contain a number of forward-looking statements. These will include, but are not limited to, statements regarding our projected financial results; our ability to meet our clients needs through our products, services and performance; and our ability to successfully integrate and manage acquired businesses in order to achieve their expected strategic, operating and financial goals. While these statements reflect our best current judgment, they are subject to risks and uncertainties that could cause our actual results to differ materially. Please note that these forward-looking statements reflect our opinions only as of the date of this call, and we undertake no obligation to revise or publicly release any revision to these forward-looking statements in light of new or future events. In addition to the factors noted during this call, a more comprehensive discussion of our risk factors can be found in today's press release, as well as our most recently filed 10-K and 10-Q, which are all available in the Investor Relations section of our website. Also, we will discuss certain financial information that is not prepared in accordance with GAAP. We believe that these non-GAAP financial measures, when reviewed in conjunction with our GAAP financial measures, provide investors with greater transparency to the information used by our management team in our financial and operational decision-making. For more information regarding our use of non-GAAP financial measures, we refer you to today's earning release and our non-GAAP reconciliation tables on our website, which will also be furnished to the SEC on Form 8-K.

With me on the phone are Peter Kalan, our Chief Executive Officer; and Randy Wiese, our Chief Financial Officer.

With that, I'd like to now turn the call over to Peter.

Peter E. Kalan

Thanks, Liz, and thanks to everyone, for joining us for today's call. We had a very solid first quarter in what continues to be a challenging business environment. During the second quarter, we were able to close several of the deals that we had anticipated closing in the first quarter, and also start to build momentum around several key areas of our business. This quarter, we signed our first significant managed services contract with a Tier 1 operator in the Asia-Pacific region. We'll help this operator move their legacy billing operations onto our Singl.eView platform for their enterprise service business. We will also operate this solution for them in their data center. It's a 5-year contract, and it represents a significant opportunity for CSG to demonstrate internationally what we've proven here in the United States.

We know how to run large-scale solutions to meet operational performance standards, while also achieving cost-effectiveness. These types of implementations are complex, but we're thrilled to be able to demonstrate what many of North America's leading communication providers already know: we're a good partner, we deliver on our promises, and we're there day-in and day-out helping our clients achieve their business objectives.

While we're not at liberty yet to disclose the client or the size of the contract, I can tell you that annually, it represents a fourfold increase in what this operator has spent with CSG over the past several years for other solutions we've deployed with them. This type of managed services engagement is representative of our key strategy of getting broader and deeper in our client's operations.

Let me provide some color on how we view this. Historically, a provider would purchase a software solution aimed at meeting a specific business or a technological need. Typically, a client would hire us to implement this software and after implementation, we would provide support to make sure that the solution continues to work as designed. When a client's business changes, we would help make sure that the solution stays up-to-date to meet their changing needs. Historically, with our international clients, this would be the extent of the services that we would provide. However, with our North American cable and satellite clients, we provide and operate highly complex solutions for them, ensuring that it operates effectively and efficiently, as well as provide the computing environment in which the solution operates.

As in the case of the new contract win I mentioned earlier, we will not only provide the solution and ongoing support to ensure that it continues to meet the future needs of the client's business, we will also operate the solution, ensuring that the system operates efficiently and effectively. By doing this, we work within a client's operational structure and learn first-hand how a client's businesses are evolving. And then we're able to anticipate their future needs and proactively come to them with solutions aimed at helping them maximize their revenues, profits and their customer satisfaction. This trusting relationship creates a strong foundation, which enables us to do more for them.

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