SVR Notes:

EPS Report and conf call 2/19/08

• Q4 revenue $101.5m up 18.2% y/y, full year $377.5m up 12.0%

• Net income (non-GAAP) 21.2m for Q4 or 0.31 up 55%. For 2007 net income 75.3m or 1.11 per share up 30.6%

• Continuing strength in messaging and mobile data services as well as solid results in roaming and clearing services

• Acquisition of BSG (Billing Services Group) Wireless increases global scale and adds critical financial settlement capabilities

  • Expect $12m cost savings over next 2 years

• Generated $97m in operating free cash flow for 2007

• Won contracts in October with VimpleCom Group and Peoplenet in Ukraine

  • Also extended contract with Vodafone and Datanet (four year extension for both companies)

• Basically a technology service company offering solutions to global assortment of telecom customers

• Gross margins look to be healthy (low to mid 60%) and rising over last year levels

• $562m in long-term debt which could be a risk if business slows

• Adoption and ramp of use for GSM Data services is a primary driver of revenue

• Quite a few contracts under negotiation for data net product

• North America generated 78m revenue in Q4

• No new information regarding VZ contract renewal

• Broadening products sold to EMEA region (previously had seen mostly GSM clearing)

• Guiding Revenue 425-440m and cash net income $85-90m

• Company took on $290m debt ot purchase BSG and subsequently paid off $57m of that during the quarter

Broker Reports 2/20/08

• BSC – Could be hit with a substantial pricing decline when contract with VZ is re-negotiated

• LEHM – Management reiterated confidence VZ contract will be re-negotiated given firms longstanding relationship and broad range of products offered

  • Sprint renewal was completed ahead of Q1 expiration with additional services added

  • 1H ’09 AT&T and T-Mobile up for renewal

• Ahead of plan on first phase of integrating BSG

IBD Article 10/20/08

-          Provides technology to wireless telecom operators

-          Customers in 120 countries with 600 operators

-          Acquired wireless portion of Billings Service Group

-          72% of sales come from N. America

-          Most revenue tied to long-term contracts

 

11/5/08 EPS Report

-          Net revenue $135.8mil up 36.9%

-          Net income $25.5mil or 0.37 per share up 53.2% y/y

-          Technology interoperability revenue 88.6mil up 73.6%

-          Network service revenue 31.1 mil down 2.8%

-          Number portability services 8.1mil up 14.4%

-          Call processing services revenue $7.5 mil down 7.9%

-          Verizon agreed to 3 year contract extension for data clearing and roaming services

-          Reiterates guidance for 2008 – revenue 485-495, net income 69-74mil

-          Significant long-term debt of $520mil but cash of $126 mil should service debt adequately.

 

Barclays 12/17/08

-          SVR remains well positioned to benefit from rising mobile traffic

-          Smaller acquisitions and open market purchases of stock are likely uses of cash

-          India remains key opportunity for geographic expansion

-          Verizon acquisition of Alltel is an issue

o        Direct connect agreement between Sprint & Alltel is in question

o        DOJ could potentially force roaming agreement

-          Options for competitors have grown limited but still these competitors are aggressively seeking market share

o        SVR competes with significant technology and experience advantage

-          Cash should be used to repurchase debt in open market at a healthy discount.

 

*Main reason for stock loss was in-sourcing by alltell and Sprint of mobile data roaming traffic processing.

EPS Release 2/10/09

-          Revenue $125.9 mil up 24.1% y/y

-          Net income $17.3 mil or EPS $0.25 (pro forma $0.39 – up 25.7%)

-          Benefited from ongoing growth in mobile industry – significantly increased number of global customers

o        Added 100 new customers

o        98% retention rate

-          Continued to generate significant free cash flow in Q4

-          Took efficiency steps to reduce costs through 2009

-          Revenue breakdown:

o        Technology Interoperability - $80.1 mil – up 49.4%

o        Networrk Services - $30.1m – down 3.2%

o        Number portability - $7.8 mil – up 11.5%

o        Call Processing $6.5 mil – down 14.9%

-          Tree year contract extension with Verizon

-          Guidance for 2009:

o        Revenue $460-480 million

o        Net Income $64.5-74 mil

-          Majority of revenue from North American (US and Candada), but operations in Asia/pacific, Caribbean / Latin America, Europe/Middle East/Africa

-          Cash of $165.6m, long-term liabilities $584.8 mil

 

Barclays Report 2/11/09

-          Spring/Alltel delay insourcing lifted Q4 results

o        But even without this benefit, company beat revenue expectations

-          Margins down 250 BP (to 66.7%) as a result of verizon repricing, but still above 64% estimate

-          Healthy data traffic, strong clearing volumes

-          On-track to realize $12 mil in synergies from BSG Acquisition

-          SVR’s visibility better than most given recurring format of revenue stream.