CSGS

CSG Systems International, Inc. (CSGS)

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CSG Systems International, Inc. (CSGS)

2Q08 Earnings Call

July 22, 2008 5:00 pm ET

Executives

Peter E. Kalan - President and Chief Executive Officer

Randy R. Wiese - Chief Financial Officer

Roger Metz – Vice President, Investor Relations

Analysts

Ashwyn Shabekar – Citigroup

Karl Keirstead - Kaufman Bros, L.P.

Scott Featherland - Wedbush Morgan Securities

Peter Jacobson - Palmer Murray

Larry Bowen - First Analysis Securities Corp.

Chris Cohen

Presentation

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the CSG Systems Second Quarter conference call. (Operation Instructions) This conference is being recorded today, Tuesday July 22, 2008. At this time, I’d like to turn the conference over to Mr. Roger Metz. Please go ahead sir.

Roger Metz

Thank you Val and thanks to everyone on the call for joining us.

Today’s discussion will contain a number of forward-looking statements. In particular, these will include 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 presentation and we undertake no obligation to revise or publically release any revisions to these forward-looking statements in light of new information or future events.

In addition to factors noted during this call, a more comprehensive discussion of our risk factors can be found in today’s press release as well as in our most recently filed 10-K and 10-Q which are all available in the Investor Relations section of our website.

With me today on the phone are Peter Kalan, Chief Executive Officer and Randy Wiese, Chief Financial Officer. Peter will begin.

Peter E. Kalan

Thank you, Roger and thanks to all of you for joining us today.

CSG continued to execute in the second quarter, posting strong revenues of $117 million and net income of $0.40 per share.

We also generated very strong cash flows, delivering new products and services and most importantly, achieved great successes with our clients.

Randy will share more detail on our financial performance after I conclude.

As we reach the midway point of 2008, I think it’s important to reflect on CSG’s successes during the first half of the year and where we are headed going forward.

On last quarter’s conference call, we talked about the strong start to the year with solid financial performance coupled with customer wins such as the 6-year Mediacom renewal through 2014, which included the deployment of several additional products. We also talked about our successes with interactive messaging, statement services, applications for customer service agents, and new solutions for managing digital content, sales and service.

Following on the first quarter, we stayed on a similar track of success, again, with solid financial results and noteworthy client wins. Of course, the most visible of these was the Comcast renewal that we told you about last week. We are very pleased to have this contract extension completed as we continue to deliver key services to Comcast while also providing our investors with increased visibility into the revenues of the company to the end of 2012.

In the second quarter, we signed a new client, Brinks Home Security Services to provide 670,000 monthly customer statements and letters. This new client relationship coupled with ADT, another home security service provider that is also our client, provides CSG with a strong footprint in the home security market.

Also during the quarter, we continued to make progress on delivering many of our solutions in modular components, so we can meet our clients’ needs for applications and solutions in a variety of ways.

Along with our workforce management application, interactive messaging services and statement and marketing services, we are also componentizing our ACP solutions to offer capabilities such as our product catalog as standalone applications that can be used in conjunction with other vendors’ products.

Going forward, we are focused on continuing to grow our revenues and profits while diversifying our revenue concentration in the markets we serve. Our business proposition is to help our clients maximize the value of their customers through optimizing the interactions they have with their customers. This is important to our clients as they are in extremely competitive marketplaces which require the highest level of customer service along with the ability to roll out new services for purchase.

Through our offerings, we help our clients build, engage and transact with their customers. The breadth of our solutions which are integrated to provide management of customer interactions across the many customer touchpoints is the unique offering in the marketplace and sets CSG apart from our competition.

To grow, we have been expanding our capabilities through our investment in research and development and also through acquisitions. We’ve seen our investment in products create and enhance solutions that have been helping our clients deliver new services to their customers, increasing the value of these relationships. As an example, we have recently seen our clients eclipse 6 million customers for voice services on our system which translates to a penetration rate of approximately 20% of the cable subscribers we support. This growth has principally been accomplished in approximately 30 months since our clients started aggressively marketing their digital voice services.

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