West Reports Big Jump in ARM Revenue and Operating Income

Outsourced communications and ARM provider West Corporation late Wednesday reported earnings for the second quarter, marked by a 37.3 percent increase in operating income in its accounts receivable management division.

For the second quarter of 2007, West said that its West Asset Management division reported revenues of $73.7 million, up 24.8 percent from the $59 million reported in the second quarter of 2006. Operating income for the division was $13.7 million, up 37.3 percent from the $9.95 million reported in the same period a year ago. The operating margin for WAM was 18.6 percent in the quarter, up from a 16.9 percent margin a year ago.

In the first six months of 2007, West said that revenues from the receivables management unit were $134.8 million, up 13.1 percent from the $119.2 million reported in the first half of last year.

The company overall reported revenues of $520.2 million in the quarter compared to $461.7 million for the same quarter last year, an increase of 12.7 percent.  The company said that acquired entities accounted for $28.7 million of the increase in revenue, although an acquisition in the receivables management unit had minimal impact in the second quarter.

West earlier this year acquired Omnium Worldwide for a reported $150 million.

"We are pleased with this quarter’s results and the closing of the Omnium acquisition on May 4," Thomas B. Barker, CEO of West Corporation said in a press release.  CFO Paul Mendlik said West had “expanded its term credit facility by $135 million to fund the Omnium acquisition.”

West was bought by a private equity investor group led by Thomas H. Lee Partners, L.P. and Quadrangle Group LLC.