SOURCE: GENESYS

August 14, 2007 01:07 ET

GENESYS CONFERENCING Reports Second Quarter Results for 2007

VIENNA, VA, and MONTPELLIER, FRANCE--(Marketwire - August 14, 2007) - Vienna, Virginia, and Montpellier, France - August 14, 2007 - Genesys Conferencing

(Euronext Eurolist: FR0004270270), a global multimedia collaboration service leader, today reported unaudited financial results for the second quarter ended June 30, 2007. All results are reported under International Financial Reporting Standards (IFRS).

"Our volume growth continues to be evidence of the strong momentum gained by our multimedia collaboration services. We also note that customers are increasingly aware that applications such as Genesys Meeting Center are well positioned to be the future enablers of unified communications," commented Francois Legros, Chairman and Chief Executive Officer.

Volume and Revenue

Total volume in the second quarter of 2007 was 744 million minutes, an increase of 30.7% compared to 569 million minutes in the second quarter of 2006. Volume growth for the period reflects the increasing adoption of Genesys Meeting Center multimedia collaboration services and the maturation of new large customers won over the past twelve months.

Total revenue in the second quarter of 2007 was 37.7 million euros, an increase of 1.8 million euros, or 5.1%, compared to 35.9 million euros in the second quarter of 2006. Genesys Meeting Center revenue was 30.5 million euros in the second quarter of 2007, an increase of 2.4 million euros, or 8.4%, compared to 28.1 million euros in the second quarter of 2006. As expected, attended conferencing services revenue declined by 0.5 million euros to 7.2 million euros compared to 7.7 million euros during the second quarter of 2006.

Gross Profit and Operating Expenses

Gross profit for the second quarter of 2007 was 23.2 million euros, a 61.5% margin. Comparatively, excluding a one-time federal excise tax credit of 1.4 million euros, gross profit for the second quarter of 2006 was 22.7 million euros, a 63.1% margin. During the first half of 2007, the absolute increase in costs related to servicing a greater volume of minutes was partially offset by the per-minute reduction in telecommunication and direct operational costs.

Total operating expenses continue to decline in the second quarter of 2007 and were 19.6 million euros. In comparison, operating expenses in the second quarter of 2006 were 20.2 million euros, excluding a 0.6 million euro benefit recorded last year in connection with a reevaluation of a balance sheet reserve. As a percentage of revenue, total operating expenses declined to 52.0% in the second quarter of 2007 compared to 56.3% in the second quarter of 2006, excluding the credit noted above.

EBITDA and Net Income

EBITDA[1], before stock-based compensation, for the second quarter of 2007 was 6.2 million euros compared to 5.4 million euros for the second quarter of 2006. As noted above, EBITDA for the second quarter of 2006 excludes the benefit of the non-recurring credits.

Net income in the second quarter of 2007 was 1.2 million euros compared to net income of 1.0 million euros in the second quarter of 2006.

Liquidity

As of June 30, 2007, the company's net cash[2] was 10.0 million euros compared to 6.4 million euros of net cash as of December 31, 2006.

The company's net debt[3] position as of June 30, 2007, decreased to 18.6 million euros compared to 23.1 million euros as of December 31, 2006. Shareholders' equity was 52.9 million euros compared to 49.9 million euros as of December 31, 2006.

"The investments we have made in our product infrastructure and systems are resulting in improved operating efficiency. While servicing over 30% more minutes of utilization this quarter, we have been able to increase net profitability," stated Andrew Lazarus Executive Vice President, Chief Financial Officer. "Additionally, improved cash flow in the first half of 2007 reflects the initiatives taken by the company to foster revenue growth and reduce costs."

Outlook

The following contains forward-looking information regarding Genesys Conferencing's financial outlook, based on current expectations and on the current value of the U.S. dollar to the euro. Actual results may differ materially and the company may not update any forward-looking statements made in this press release.

Based on the strong adoption of Genesys Meeting Center services during the first six months of 2007, the company is increasing its revenue guidance. For the full-year 2007, it expects total revenue to be in the range of 143 million euros to 145 million euros.

Conference Call and Webcast

Chairman and Chief Executive Officer François Legros and Executive Vice President and Chief Financial Officer Andrew Lazarus will host a conference call on Tuesday, August 14, 2007 at 2:30 p.m. Central European Time or 8:30 a.m. Eastern Time to discuss second quarter 2007 financial results.

The conference call will be web cast live and may be accessed at

http://events.webeventservices.com/genesys/2007/08/14/

A replay of the call will be available at the same URL or at http://www.genesys.com

FINANCIAL TABLES TO FOLLOW

Impact of Exchange Rates

The company serves large enterprises on a worldwide basis. As a result, it has extensive international operations and, thus, significant exposure to exchange rate fluctuations, in particular those of the U.S. dollar. In 2006, and continuing through the second quarter of 2007, the U.S. dollar has fluctuated compared to the euro. As a result, the comparability of the company's revenues and results of operations expressed in euros were affected.

DisclaimerThis press release may contain some statements that constitute forward-looking statements. Forward-looking statements are statements other than historical information or statements of current condition. They may appear in a number of places in this press release and include statements concerning Genesys Conferencing's intent, belief or current expectations regarding future events and trends affecting Genesys Conferencing's financial condition or results of operations. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those in the forward-looking statements as a result of various factors. Some of these factors are described in paragraph 4.5 of the Document de Référence, filed with the Autorité des marchés financiers under number D.07-551 on June 5, 2007. Although Genesys Conferencing's management believe that their expectations are reasonable based on information currently available to them, they cannot assure you that the expectations will prove to have been correct. Accordingly, you should not place undue reliance on these statements. In any event, these statements speak only as of the date of this press release. Except to the extent required by law, Genesys Conferencing undertakes no obligation to revise or update any of them to reflect events or circumstances after the date of this press release, or to reflect new information or the occurrence of unanticipated events.

Genesys Conferencing—Connecting the World for 20 Years

Founded in 1986, Genesys Conferencing is a leading provider of converged collaboration and communication services to thousands of organisations worldwide, including more than 250 of the Fortune Global 500. The company's flagship product, Genesys Meeting Center, provides an integrated multimedia conferencing solution that is easy to use and available on demand. With offices in more than 20 countries across North America, Europe and Asia Pacific, the company offers an unmatched global presence and strong local support. Genesys Conferencing is publicly traded on Euronext Eurolist C in France (FR0004270270). Additional information is available at www.genesys.com.

At Genesys Conferencing

Andrew G. Lazarus

Executive Vice President, Chief Financial Officer

Phone: +1 703-749-2500

andrew.lazarus@genesys.com

Marine Pouvreau

Investor Relations Manager

Phone: + 33 4 99 13 27 66

Marine.pouvreau@genesys.com

[1] See attached note to consolidated statements of operations for reconciliation of Operating Income and EBITDA. The company believes that EBITDA is meaningful measure of performance, because it presents the company's results of operations without the non-cash impact of depreciation and amortization. EBITDA is reported excluding stock-based compensation expense.

[2] Net cash includes cash and cash equivalents less bank overdrafts.

[3] Net debt includes current and long-term portions of long-term debt and capitalized lease obligations, less net cash.

GENESYS CONFERENCING

Consolidated Balance Sheets

(Unaudited IFRS, in thousands of euros, except share data)

+-------------------------+-------------------+---------------+
|                         |  December 31, 2006|  June 30, 2007|
+-------------------------+-------------------+---------------+
|ASSETS                   |                   |               |
+-------------------------+-------------------+---------------+
|Non current assets       |                   |               |
+-------------------------+-------------------+---------------+
|Goodwill, customer lists |             34,887|         33,562|
|and technology           |                   |               |
+-------------------------+-------------------+---------------+
|Other intangible assets, |              6,939|          6,498|
|net                      |                   |               |
+-------------------------+-------------------+---------------+
|Tangible assets, net     |             15,402|         13,897|
+-------------------------+-------------------+---------------+
|Financial assets, net    |              1,579|          1,520|
+-------------------------+-------------------+---------------+
|Deferred tax assets      |             10,829|         10,245|
+-------------------------+-------------------+---------------+
|Total non current assets |             69,636|         65,722|
+-------------------------+-------------------+---------------+
|Current assets           |                   |               |
+-------------------------+-------------------+---------------+
|Accounts receivable, less|             24,464|         25,683|
|allowances               |                   |               |
+-------------------------+-------------------+---------------+
|Prepaid expenses and     |              9,465|          8,670|
|other current assets     |                   |               |
+-------------------------+-------------------+---------------+
|Cash and cash equivalents|              7,970|         11,475|
+-------------------------+-------------------+---------------+
|Total current assets     |             41,899|         45,828|
+-------------------------+-------------------+---------------+
|TOTAL ASSETS             |            111,535|        111,550|
+-------------------------+-------------------+---------------+
|LIABILITIES AND          |                   |               |
|SHAREHOLDERS' EQUITY     |                   |               |
+-------------------------+-------------------+---------------+
|Shareholders' equity     |                   |               |
|(deficit)                |                   |               |
+-------------------------+-------------------+---------------+
|Ordinary shares, nominal |             69,798|         69,883|
|value of €1 per share    |                   |               |
+-------------------------+-------------------+---------------+
|Common shares to be      |                135|             69|
|issued                   |                   |               |
+-------------------------+-------------------+---------------+
|Additional paid-in       |            179,706|        181,494|
|capital                  |                   |               |
+-------------------------+-------------------+---------------+
|Additional paid-in       |              3,735|          1,896|
|capital to be issued     |                   |               |
+-------------------------+-------------------+---------------+
|Reserve for stock-based  |              3,410|          3,858|
|compensation             |                   |               |
+-------------------------+-------------------+---------------+
|Accumulated deficit      |          (218,411)|      (211,988)|
+-------------------------+-------------------+---------------+
|Net income               |              6,421|          2,447|
+-------------------------+-------------------+---------------+
|Currency translation     |              5,095|          5,290|
|adjustments              |                   |               |
+-------------------------+-------------------+---------------+
|Total shareholders'      |             49,889|         52,949|
|equity (deficit)         |                   |               |
+-------------------------+-------------------+---------------+
|Provisions for risks and |                434|            383|
|charges                  |                   |               |
+-------------------------+-------------------+---------------+
|Deferred tax liability   |              1,297|          1,327|
+-------------------------+-------------------+---------------+
|Long-term debt           |                   |               |
+-------------------------+-------------------+---------------+
|Long-term portion of     |             20,127|         12,205|
|long-term debt           |                   |               |
+-------------------------+-------------------+---------------+
|Long-term portion of     |                183|            172|
|capitalized lease        |                   |               |
|obligations              |                   |               |
+-------------------------+-------------------+---------------+
|Total long-term debt and |             22,041|         14,087|
|other liabilities        |                   |               |
+-------------------------+-------------------+---------------+
|Current liabilities      |                   |               |
+-------------------------+-------------------+---------------+
|Bank overdrafts          |              1,673|          1,518|
+-------------------------+-------------------+---------------+
|Accounts payable and     |             12,436|         12,417|
|accrued liabilities      |                   |               |
+-------------------------+-------------------+---------------+
|Taxes payable and        |             11,144|         10,675|
|deferred compensation    |                   |               |
+-------------------------+-------------------+---------------+
|Current portion of       |              1,601|          1,397|
|provision for risks and  |                   |               |
|charges                  |                   |               |
+-------------------------+-------------------+---------------+
|Current portion of       |              9,086|         16,076|
|long-term debt           |                   |               |
+-------------------------+-------------------+---------------+
|Current portion of       |                125|             62|
|capitalized lease        |                   |               |
|obligations              |                   |               |
+-------------------------+-------------------+---------------+
|Other current liabilities|              3,540|          2,369|
+-------------------------+-------------------+---------------+
|Total current liabilities|             39,605|         44,514|
+-------------------------+-------------------+---------------+
|LIABILITIES AND          |            111,535|        111,550|
|SHAREHOLDERS' EQUITY     |                   |               |
+-------------------------+-------------------+---------------+
GENESYS CONFERENCING

Consolidated Statements of Operations

(Unaudited IFRS, in thousands of euros, except share data)

+-------------------------+--------------------+--------------------+
|                         |Three months ended  |Three months ended  |
|                         |June 30,            |June 30,            |
+-------------------------+--------------------+--------------------+
|                         |                2006|                2007|
+-------------------------+--------------------+--------------------+
|Revenue                  |              35,903|              37,741|
+-------------------------+--------------------+--------------------+
|Cost of revenue          |              11,786|              14,528|
+-------------------------+--------------------+--------------------+
|Gross profit             |              24,117|              23,214|
+-------------------------+--------------------+--------------------+
|Operating expenses       |                    |                    |
+-------------------------+--------------------+--------------------+
|Research and development |               1,141|               1,173|
+-------------------------+--------------------+--------------------+
|Selling and marketing    |              10,392|              10,187|
+-------------------------+--------------------+--------------------+
|General and              |               7,440|               7,370|
|administrative           |                    |                    |
+-------------------------+--------------------+--------------------+
|Restructuring charge     |                (48)|                 329|
+-------------------------+--------------------+--------------------+
|Amortization of          |                 626|                 560|
|intangibles              |                    |                    |
+-------------------------+--------------------+--------------------+
|                         |              19,553|              19,618|
+-------------------------+--------------------+--------------------+
|Operating income         |               4,564|               3,596|
+-------------------------+--------------------+--------------------+
|Interest income          |                   7|                  56|
+-------------------------+--------------------+--------------------+
|Interest expense         |               (428)|               (725)|
+-------------------------+--------------------+--------------------+
|Foreign exchange gain    |             (2,214)|               (900)|
|(loss)                   |                    |                    |
+-------------------------+--------------------+--------------------+
|Other income (expense)   |               (386)|               (119)|
+-------------------------+--------------------+--------------------+
|Income tax credit        |               (504)|               (702)|
|(expense)                |                    |                    |
+-------------------------+--------------------+--------------------+
|Net income               |               1,039|               1,206|
+-------------------------+--------------------+--------------------+
|Basic net income per     |                0.01|                0.02|
|share                    |                    |                    |
+-------------------------+--------------------+--------------------+
|Diluted net income per   |                0.01|                0.02|
|share                    |                    |                    |
+-------------------------+--------------------+--------------------+
|Number of outstanding    |          69,912,650|          69,933,056|
|shares used in computing |                    |                    |
|basic net income per     |                    |                    |
|share                    |                    |                    |
+-------------------------+--------------------+--------------------+
|Number of outstanding    |          69,912,650|          69,959,540|
|shares used in computing |                    |                    |
|diluted net income per   |                    |                    |
|share                    |                    |                    |
+-------------------------+--------------------+--------------------+

+-------------------------+--------------------+--------------------+
|                         |Six months ended    |Six months ended    |
|                         |June 30,            |June 30,            |
+-------------------------+--------------------+--------------------+
|                         |                2006|                2007|
+-------------------------+--------------------+--------------------+
|Revenue                  |              72,280|              73,916|
+-------------------------+--------------------+--------------------+
|Cost of revenue          |              25,143|              28,166|
+-------------------------+--------------------+--------------------+
|Gross profit             |              47,137|              45,750|
+-------------------------+--------------------+--------------------+
|Operating expenses       |                    |                    |
+-------------------------+--------------------+--------------------+
|Research and development |               2,344|               2,753|
+-------------------------+--------------------+--------------------+
|Selling and marketing    |              21,887|              19,466|
+-------------------------+--------------------+--------------------+
|General and              |              15,272|              14,743|
|administrative           |                    |                    |
+-------------------------+--------------------+--------------------+
|Restructuring charge     |                (33)|                 849|
+-------------------------+--------------------+--------------------+
|Amortization of          |               1,374|               1,133|
|intangibles              |                    |                    |
+-------------------------+--------------------+--------------------+
|                         |              40,845|              38,944|
+-------------------------+--------------------+--------------------+
|Operating income         |               6,292|               6,806|
+-------------------------+--------------------+--------------------+
|Interest income          |                  58|                 109|
+-------------------------+--------------------+--------------------+
|Interest expense         |             (1,642)|             (1,528)|
+-------------------------+--------------------+--------------------+
|Foreign exchange gain    |             (1,651)|               (827)|
|(loss)                   |                    |                    |
+-------------------------+--------------------+--------------------+
|Other income (expense)   |               (880)|               (479)|
+-------------------------+--------------------+--------------------+
|Income tax credit        |             (1,872)|             (1,634)|
|(expense)                |                    |                    |
+-------------------------+--------------------+--------------------+
|Net income               |                 305|               2,447|
+-------------------------+--------------------+--------------------+
|Basic net income per     |                0.01|                0.03|
|share                    |                    |                    |
+-------------------------+--------------------+--------------------+
|Diluted net income per   |                0.01|                0.03|
|share                    |                    |                    |
+-------------------------+--------------------+--------------------+
|Number of outstanding    |          55,120,235|          69,928,598|
|shares used in computing |                    |                    |
|basic net income per     |                    |                    |
|share                    |                    |                    |
+-------------------------+--------------------+--------------------+
|Number of outstanding    |          55,120,235|          69,955,082|
|shares used in computing |                    |                    |
|diluted net income per   |                    |                    |
|share                    |                    |                    |
+-------------------------+--------------------+--------------------+
GENESYS CONFERENCING

Note to the Consolidated Financial Statements

(Unaudited IFRS, in thousands of euros, except share data)

+-------------------------+--------------------+--------------------+
|                         |Three months ended  |Three months ended  |
|                         |June 30,            |June 30,            |
+-------------------------+--------------------+--------------------+
|NOTE A- EBITDA           |                2006|                2007|
|calculation              |                    |                    |
+-------------------------+--------------------+--------------------+
|Operating income         |               4,564|               3,596|
+-------------------------+--------------------+--------------------+
|Amortization of          |                 626|                 560|
|intangibles              |                    |                    |
+-------------------------+--------------------+--------------------+
|Depreciation             |               2,263|               1,849|
+-------------------------+--------------------+--------------------+
|EBITDA                   |               7,453|               6,005|
+-------------------------+--------------------+--------------------+
|Stock-based compensation |                  45|                 221|
+-------------------------+--------------------+--------------------+
|EBITDA before stock-based|               7,499|               6,226|
|compensation             |                    |                    |
+-------------------------+--------------------+--------------------+

+-------------------------+--------------------+--------------------+
|                         |Six months ended    |Six months ended    |
|                         |June 30,            |June 30,            |
+-------------------------+--------------------+--------------------+
|NOTE A- EBITDA           |                2006|                2007|
|calculation              |                    |                    |
+-------------------------+--------------------+--------------------+
|Operating income         |               6,292|               6,806|
+-------------------------+--------------------+--------------------+
|Amortization of          |               1,374|               1,133|
|intangibles              |                    |                    |
+-------------------------+--------------------+--------------------+
|Depreciation             |               4,311|               3,895|
+-------------------------+--------------------+--------------------+
|EBITDA                   |              11,977|              11,834|
+-------------------------+--------------------+--------------------+
|Stock-based compensation |                 338|                 449|
+-------------------------+--------------------+--------------------+
|EBITDA before stock-based|              12,316|              12,283|
|compensation             |                    |                    |
+-------------------------+--------------------+--------------------+
GENESYS CONFERENCING

Consolidated Statements of Cash Flows

(Unaudited IFRS, in thousands of euros, except share data)

+-------------------------+--------------------+--------------------+
|                         |Three months ended  |Three months ended  |
|                         |June 30,            |June 30,            |
+-------------------------+--------------------+--------------------+
|                         |                2006|                2007|
+-------------------------+--------------------+--------------------+
|Cash flows from operating|                    |                    |
|activities:              |                    |                    |
+-------------------------+--------------------+--------------------+
|Net (loss) income        |               1,039|               1,206|
+-------------------------+--------------------+--------------------+
|Adjustments to reconcile |                    |                    |
|net (loss) income to net |                    |                    |
|cash provided by         |                    |                    |
|operating activities:    |                    |                    |
+-------------------------+--------------------+--------------------+
|Depreciation and         |               2,263|               1,849|
|amortization of property |                    |                    |
|and equipment            |                    |                    |
+-------------------------+--------------------+--------------------+
|Amortization of          |                 626|                 560|
|intangibles              |                    |                    |
+-------------------------+--------------------+--------------------+
|Allowance (recovery) for |               (270)|                  24|
|bad debt                 |                    |                    |
+-------------------------+--------------------+--------------------+
|Stock‑based        |                  45|                 221|
|compensation             |                    |                    |
+-------------------------+--------------------+--------------------+
|Loss on disposal of      |                  20|                (65)|
|property and equipment   |                    |                    |
+-------------------------+--------------------+--------------------+
|Deferred taxes           |                 185|                 319|
+-------------------------+--------------------+--------------------+
|Changes in operating     |               (657)|                 210|
|assets and liabilities   |                    |                    |
+-------------------------+--------------------+--------------------+
|Net cash provided by     |               3,251|               4,324|
|operating activities     |                    |                    |
+-------------------------+--------------------+--------------------+
|Cash flows from investing|                    |                    |
|activities:              |                    |                    |
+-------------------------+--------------------+--------------------+
|Purchases of property and|             (2,875)|             (1,105)|
|equipment                |                    |                    |
+-------------------------+--------------------+--------------------+
|Net cash used in         |             (2,875)|             (1,105)|
|investing activities     |                    |                    |
+-------------------------+--------------------+--------------------+
|Cash flows from financing|                    |                    |
|activities:              |                    |                    |
+-------------------------+--------------------+--------------------+
|Increase (decrease) in   |                 824|               (196)|
|bank overdrafts          |                    |                    |
+-------------------------+--------------------+--------------------+
|Increase (decrease) in   |                 394|                 102|
|factored receivables     |                    |                    |
|borrowing                |                    |                    |
+-------------------------+--------------------+--------------------+
|(Increase) decrease in   |                    |                   1|
|restricted cash          |                    |                    |
+-------------------------+--------------------+--------------------+
|Payments for the purchase|                    |                   2|
|of treasury stock, net   |                    |                    |
+-------------------------+--------------------+--------------------+
|Borrowings from credit   |                    |               3,683|
|facility revolver        |                    |                    |
+-------------------------+--------------------+--------------------+
|Principal payments on    |             (1,355)|             (4,325)|
|long‑term debt     |                    |                    |
+-------------------------+--------------------+--------------------+
|Interest paid            |               (902)|             (1,267)|
+-------------------------+--------------------+--------------------+
|Net cash provided by     |             (1,039)|             (2,000)|
|(used in) financing      |                    |                    |
|activities               |                    |                    |
+-------------------------+--------------------+--------------------+
|Effect of foreign        |               1,944|                 518|
|exchange rate changes on |                    |                    |
|cash and cash equivalents|                    |                    |
+-------------------------+--------------------+--------------------+
|Increase (decrease) in   |               1,281|               1,737|
|cash and cash equivalents|                    |                    |
+-------------------------+--------------------+--------------------+
|Cash and cash            |               5,590|               9,738|
|equivalents, beginning of|                    |                    |
|period                   |                    |                    |
+-------------------------+--------------------+--------------------+
|Cash and cash            |               6,871|              11,475|
|equivalents, end of      |                    |                    |
|period                   |                    |                    |
+-------------------------+--------------------+--------------------+
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