CSG Systems International(US:CSGS)2024-05-02 16:08Financial Performance - Total revenue for Q1 2024 was $295.1 million, a decrease of 0.5% compared to $298.7 million in Q1 2023[13] - Operating income for Q1 2024 was $31.8 million, representing 10.8% of total revenue, down from $38.2 million or 12.8% in Q1 2023[33] - Net income for Q1 2024 was $19.5 million, compared to $20.9 million in Q1 2023, reflecting a decrease of 6.9%[13] - Total operating expenses for Q1 2024 were $263.3 million, a 1.1% increase compared to $260.5 million in Q1 2023[168] - R&D expenses for Q1 2024 were $36.1 million, a 1.8% increase from $35.5 million in Q1 2023, representing 12.2% of total revenue[169] - Interest expense for Q1 2024 was $7.5 million, a 4.0% increase from $7.2 million in Q1 2023, primarily due to a higher outstanding debt balance[201] - The effective income tax rate for Q1 2024 was 29%, slightly up from 28% in Q1 2023[172] Cash and Liquidity - Cash and cash equivalents decreased to $120.8 million as of March 31, 2024, from $186.3 million at the end of 2023[12] - Cash flows from operating activities for Q1 2024 were $51.7 million, compared to $50.2 million in Q1 2023, reflecting a year-over-year increase of 3.0%[37] - Cash flows from operating activities showed a net cash used of $29.351 million for the quarter, compared to a net cash provided of $15.397 million in the same quarter last year[97] - Cash, cash equivalents, and restricted cash at the end of the period were $316.644 million, down from $344.981 million at the end of March 31, 2023[97] - Cash and cash equivalents as of March 31, 2024, were primarily held in institutional money market funds and time deposits, with no anticipated material amounts being unavailable for business operations[84] Assets and Liabilities - Total current assets decreased to $733.8 million as of March 31, 2024, down from $862.2 million at the end of 2023[12] - Total liabilities decreased to $1,023.6 million as of March 31, 2024, compared to $1,169.7 million at the end of 2023[12] - Long-term debt as of March 31, 2024, included $425.0 million in 2023 Convertible Notes and $131.3 million in 2021 Credit Agreement term loan borrowings[48] - Total debt as of March 31, 2024, was $541.486 million, slightly down from $542.497 million at the end of December 31, 2023[112] - The company had performance guarantees of $6.0 million, including a $1.2 million standby letter of credit[120] Shareholder Returns - The company declared a quarterly cash dividend of $0.30 per share, totaling $8.9 million, compared to $0.28 per share totaling $8.8 million in Q1 2023[20] - The Board declared dividends totaling $8.9 million in Q1 2024, slightly up from $8.8 million in Q1 2023, with payments of $9.5 million and $9.1 million respectively[60] - The company repurchased approximately 185,000 shares of common stock for $9.6 million during Q1 2024, at a weighted-average price of $51.96 per share[46] Customer and Revenue Segments - The three largest customers contributed 21% (Charter), 18% (Comcast), and 15% (DISH Network) to total revenue in Q1 2024[28] - Revenue from the Broadband/Cable/Satellite segment accounted for 51% of total revenue for the quarter ended March 31, 2024, slightly down from 52% in the same quarter of 2023[84] - Significant customer relationships include Charter and Comcast, contributing 21% and 18% of revenue, respectively, in Q1 2024[194] Operational Changes - The company experienced net settlement and merchant reserve activity of $82.2 million in Q1 2024, compared to $61.5 million in Q1 2023, reflecting increased merchant activity[62] - The company reduced its workforce by approximately 35 employees, incurring restructuring charges of $1.6 million[117] - The company recorded restructuring and reorganization charges of $2.0 million in Q1 2024, down from $5.2 million in Q1 2023[146] Future Outlook and Strategy - The company plans to continue evaluating potential business and asset acquisitions as part of its growth strategy, focusing on market share expansion[47] - The company expects to meet its capital resource requirements for at least the next twelve months through current cash balances and future operating cash flows[49] - The company expects to recognize the remaining performance obligations by the end of 2036, indicating a long-term revenue outlook[82] Miscellaneous - The company is evaluating the impact of ASU No. 2023-07 on its financial statements and disclosures, effective for fiscal years beginning after December 15, 2023[107] - The foreign currency translation adjustments resulted in a loss of $4,975,000 for the quarter ended March 31, 2024[78] - The company recognized $19.1 million in deferred revenue during the quarter, compared to $20.2 million in the same quarter of the previous year[102]