CSG Systems International, Inc. Reports First Quarter Results

Earnings At $0.49 Per Share: Up 36 Percent;

Revenues of $114.1 Million: Up 24 Percent



Apr 25, 2001, 01:00 ET from CSG Systems International, Inc.

    ENGLEWOOD, Colo., April 25 /PRNewswire/ -- CSG Systems International, Inc.
 (Nasdaq:   CSGS), a leader in customer care and billing, today reported results
 for the quarter ended March 31, 2001.
 
     First Quarter 2001 Highlights:
     -- Revenues rose to a record $114.1 million, a 24 percent increase.
     -- Net income rose 33 percent to $27.1 million, or $0.49 per diluted
        share.
     -- Operating income rose 33 percent to a first quarter record of
        $43.8 million, or 38 percent of total revenues.
     -- The company converted approximately 377,000 new customers onto its
        processing system, ending the quarter  with 37.0 million.
     -- The Company repurchased 2.28 million shares under its stock buyback
        program during the quarter.
     -- The Company licensed CSG NextGen(TM), its next-generation customer care
        and billing solution for the global convergence communications
        industry, to a Latin American broadband provider.
     -- The Company's DBOs (days billings outstanding) improved to 56 days for
        the quarter from 72 days in the fourth quarter of last year.
     -- The Company raises its guidance for earnings per diluted share for 2001
        from $1.98 - $2.05 to $2.04 - $2.11.
 
 
     "I am pleased with our progress both on the domestic and international
 sides of our business.  We signed our first international contract for CSG
 NextGen(TM), we are on track with our domestic conversions onto our system and
 we continue to sell additional software into the broadband industry.  There is
 always a market for solutions like ours that help communications providers run
 their operations more efficiently and provide higher quality customer
 service."
                     Neal Hansen, Chairman and Chief Executive Officer
 
 
      Summary Information (unaudited)
      (in thousands, except per share amounts and percentages)
 
                                          Three Months Ended
                                               March 31,             Percent
                                          2001            2000       Change
 
      Total revenues                   $114,099         $92,063        24%
      Operating income                   43,804          32,989        33%
      Net income                         27,066          20,309        33%
      Net income per diluted share        $0.49           $0.36        36%
      Customer accounts processed
       (period end):
        Video                            34,076          32,745         4%
        Internet                          2,302           1,441        60%
        Telephony                           630             124       408%
          Total                          37,008          34,310         8%
 
     Record First Quarter Results
     Revenues reached a quarterly record.  Revenues grew 24 percent to
 $114.1 million for the quarter ended March 31, 2001, compared with
 $92.1 million for the first quarter of 2000.  Net income for the first quarter
 of 2001 was $27.1 million, or $0.49 per diluted share, compared to
 $20.3 million, or $0.36 per diluted share, in the same quarter last year, a
 33 percent increase (see attached financial statements).
     Processing revenues were $79.1 million in the first quarter of 2001,
 compared to $70.6 million in the same quarter last year, a 12 percent
 increase.  Software and professional services generated $35.0 million of
 revenue in the quarter, compared to $21.5 million for the first quarter in
 2000, a 63 percent increase.
 
     Customer Accounts
     Total domestic customer accounts on the Company's processing system as of
 March 31, 2001 were 37.0 million, compared to 34.3 million as of March 31,
 2000, an increase of 8 percent.  The Company converted approximately
 0.4 million new customer accounts onto its processing system during the first
 quarter of 2001.  The Company received $8.43 in annualized processing revenue
 per video account in the first quarter of 2001, compared to $8.31 for the
 first quarter of 2000, and $4.94 in processing revenue per internet account in
 the first quarter of 2001, compared to $5.46 per account in same period last
 year.
 
     Outlook for 2001
     "Consolidation, the introduction of new products like digital and
 high-speed data by our clients and the need to do more with the same or fewer
 employees, has created a need for our enabling technologies," Hansen said.
 "Based on what we are seeing in the broadband industry, the sales pipeline for
 the remainder of 2001 is robust."
     "We are raising our guidance on earnings per diluted share for 2001 based
 on the results we achieved this quarter," Peter Kalan, Chief Financial Officer
 for CSG Systems, said.  "Earnings per diluted share is expected to range
 between $2.04 and $2.11, an increase of 6 cents over our previous guidance."
 
     Financial Condition
     As of March 31, 2001, the Company had cash and current investments of
 $52.4 million, compared to $43.7 million as of December 31, 2000.  The balance
 of the Company's long-term debt as of March 31, 2001 was $52.5 million,
 compared to $58.3 million as of December 31, 2000, a decrease of $5.8 million.
     Billed net accounts receivable as of March 31, 2001 were $79.9 million
 compared to $128.9 million as of December 31, 2000.  Accounts receivable
 reflected days billings outstanding (DBOs) of 56 days for the first quarter of
 2001, compared to 54 days for the quarter ended March 31, 2000.  Cash flows
 from operations for the quarter ended March 31, 2001 were $79.9 million,
 compared to $25.0 million for the first quarter of 2000.  The increase in cash
 flows from operations relates primarily to the growth in the Company's
 revenues and the timing of payments received from clients.
     For the first quarter of 2001, earnings before interest, taxes,
 depreciation and amortization (EBITDA) was $48.3 million, or 42 percent of
 total revenues, compared to $37.5 million, or 41 percent of total revenues,
 for the first quarter of 2000, an increase of 29 percent.
 
     Stock Repurchase Program
     On February 28, 2001, AT&T exercised its right to purchase 2.0 million
 shares of the Company's common stock at an exercise price of $12 per share,
 for a total exercise price of $24.0 million.  Immediately following the
 exercise of the warrant, the Company repurchased the 2.0 million shares at
 $37.00 per share (approximated the closing price on February 28, 2001) for a
 total repurchase price of $74.0 million.  As a result, the net cash outlay
 paid to AT&T for this transaction was $50.0 million.  After this transaction,
 AT&T no longer has any warrants or other rights to purchase the Company's
 common stock.
     During February 2001, the Company purchased an additional 0.28 million
 shares of its common stock in the open market for $11.2 million (weighted-
 average price of $39.98).  The shares repurchased under the Company's stock
 repurchase program since its inception in 1999, including the 2.0 million
 shares repurchased as part of the AT&T warrant exercise discussed above, total
 4.03 million shares at a total cost of $156.5 million (weighted-average price
 of $38.88 per share).  The Company is authorized to repurchase up to a total
 of 5.0 million shares under its stock repurchase program.
 
     Based in Denver, Colorado, CSG Systems International, Inc., is the parent
 company of CSG Systems, Inc., which provides customer care and billing
 solutions worldwide for the converging communications markets, including cable
 television, direct broadcast satellite, telephony, on-line services and
 others.  The Company offers its clients a full range of processing services,
 software and support services that automate customer management functions,
 including billing, sales support and order processing, invoice calculation and
 production, management reporting and customer analysis for target marketing.
 CSG Systems, Inc. provides its services to over one-third of the households in
 the United States.
 
     Information about CSG Systems, Inc. and its products can be found on the
 worldwide web at http://www.csgsys.com.
 
     This news release contains forward-looking statements that are based on
 assumptions about a number of important factors and involve risks and
 uncertainties that could cause actual results to differ materially from what
 appears in this press release.  These factors include, but are not limited to,
 the following:  1) the continued acceptance of CCS and related products and
 services; 2) CSG's ability to continue to perform satisfactorily under the
 terms of its contract with AT&T, which is set to expire in 2012, as well as
 the level of cooperation between CSG and AT&T on the opportunities and
 obligations presented by the contract; 3) CSG's ability to timely enhance
 current products and develop new technology that will retain existing
 customers and capture new market share; 4) significant forays into new
 markets, which may prove costly and unprofitable; 5) the degree to which CSG's
 expectations of market penetration and consumer acceptance of broadband
 services prove true -- and even if realized, CSG may be unable to meet the
 special billing and customer care needs of that market; 6) customer
 consolidation has decreased the number of potential buyers for many of the
 company's products and services; 7) CSG's ability to sell additional software
 products and services into its existing and new customers; and 8) the Company
 currently has scheduled approximately 4.8 million customers to be converted
 onto its system during 2001, the majority of which are AT&T customers.  If for
 any reason CSG is unable to convert the vast majority of these customers onto
 its system in the targeted timeframe, it may have an adverse impact on the
 Company's growth objectives.
     This list is not exhaustive and readers are encouraged to review the
 additional risks and important factors described in the Company's Report to
 Stockholders on Form 10-K and 10-Q and other filings made with the SEC.
 
 
                        CSG SYSTEMS INTERNATIONAL, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
               (in thousands, except share and per share amounts)
 
                                              March 31,          December 31,
                                                 2001                 2000
                            ASSETS           (unaudited)
     Current assets:
       Cash and cash equivalents               $30,187               $32,751
       Short-term investments                   22,178                10,982
         Total cash, cash equivalents
          and short-term investments            52,365                43,733
     Accounts receivable-
       Trade -
         Billed, net of allowance of
          $4,756 and $5,001                     79,898               128,902
         Unbilled                                8,335                 4,306
       Other                                     2,811                 1,259
       Deferred income taxes                     3,815                 3,247
       Other current assets                      8,576                 7,507
         Total current assets                  155,800               188,954
     Property and equipment, net of
      depreciation of $45,575 and $42,457       39,881                36,630
     Software, net of amortization
      of $36,162 and $39,112                     3,819                 4,284
     Goodwill, net of amortization
      of $4,926 and $4,883                       1,686                 1,894
     Client contracts and related
      intangibles, net of amortization
      of $28,416 and $28,855                    51,386                52,368
     Deferred income taxes                      46,387                47,331
     Other assets                                  536                   628
         Total assets                         $299,495              $332,089
 
          LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities:
       Current maturities of long-term debt    $26,250               $25,436
       Customer deposits                        12,785                12,391
       Trade accounts payable                   11,920                14,850
       Accrued employee compensation            13,072                19,147
       Deferred revenue                         11,246                 8,172
       Accrued income taxes                     22,559                15,633
       Other current liabilities                14,476                12,008
         Total current liabilities             112,308               107,637
     Non-current liabilities:
       Long-term debt, net of
        current maturities                      26,250                32,820
       Deferred revenue                            451                   463
         Total non-current liabilities          26,701                33,283
     Stockholders' equity:
       Preferred stock, par value $.01
        per share; 10,000,000 shares authorized;
        zero shares issued and outstanding          --                    --
       Common stock, par value $.01 per share;
        100,000,000 shares authorized;
        52,392,240 and 52,530,203
        shares outstanding                         565                   543
       Common stock warrants; zero and
        2,000,000 warrants outstanding              --                17,430
       Additional paid-in capital              225,401               180,750
       Accumulated other comprehensive
        income (loss):
         Unrealized gain (loss) on
          short-term investments, net of tax        12                  (350)
         Cumulative translation adjustments       (813)                 (654)
       Treasury stock, at cost, 4,110,986
        and 1,830,986 shares                  (156,692)              (71,497)
       Accumulated earnings                     92,013                64,947
         Total stockholders' equity            160,486               191,169
         Total liabilities and
          stockholders' equity                $299,495              $332,089
 
 
                        CSG SYSTEMS INTERNATIONAL, INC.
            CONDENSED CONSOLIDATED STATEMENTS OF INCOME  - UNAUDITED
                    (in thousands, except per share amounts)
 
                                                    Three Months Ended
                                             March 31,              March 31,
                                                2001                  2000
 
     Total revenues                           $114,099               $92,063
 
     Expenses:
     Total cost of revenues                     41,794                36,286
     Gross margin (exclusive of depreciation)   72,305                55,777
     Operating expenses:
       Research and development                 11,611                 9,888
       Selling, general and administrative      13,540                10,088
       Depreciation                              3,350                 2,812
           Total operating expenses             28,501                22,788
     Operating income                           43,804                32,989
       Other income (expense):
        Interest expense                        (1,082)               (1,541)
        Interest and investment income, net        947                 1,263
        Other                                      (19)                   (7)
           Total other                            (154)                 (271)
     Income before income taxes                 43,650                32,718
       Income tax provision                    (16,584)              (12,409)
     Net income                                $27,066               $20,309
 
     Basic net income per common share:
       Net income available to
        common stockholders                      $0.52                 $0.39
       Weighted-average common shares           52,469                51,857
 
     Diluted net income per common share:
       Net income available to
        common stockholders                      $0.49                 $0.36
       Weighted-average common shares           55,135                56,830
 
 
                        CSG SYSTEMS INTERNATIONAL, INC.
          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  - UNAUDITED
                                 (in thousands)
 
                                                      Three Months Ended
                                                  March 31,        March 31,
                                                     2001            2000
     Cash flows from operating activities:
       Net income                                  $27,066          $20,309
       Adjustments to reconcile net income
        to net cash provided by
        operating activities -
         Depreciation                                3,350            2,812
         Amortization                                1,777            1,838
         Loss on short-term investment                 495               --
         Deferred income taxes                         158            1,446
         Stock-based employee compensation              --               30
         Changes in operating assets
          and liabilities:
            Trade accounts and other
             receivables, net                       43,423            5,345
            Other current and noncurrent assets     (1,121)          (1,087)
            Accounts payable and accrued
             liabilities                             4,793           (5,645)
              Net cash provided by
               operating activities                 79,941           25,048
 
     Cash flows from investing activities:
       Purchases of property and equipment, net     (6,587)          (6,442)
       Purchases of short-term investments         (16,993)              --
       Proceeds from sale of short-term
        investments                                  5,882               --
       Investment in client contract                   (30)              --
              Net cash used in
               investing activities                (17,728)          (6,442)
 
     Cash flows from financing activities:
       Proceeds from issuance of common stock        2,299            7,059
       Proceeds from exercise of stock warrants     24,000               --
       Repurchase of common stock                  (85,195)          (2,987)
       Payments on notes receivable
        from employee stockholders                      --               27
       Payments on long-term debt                   (5,756)          (5,000)
              Net cash used in
               financing activities                (64,652)            (901)
 
     Effect of exchange rate fluctuations on cash     (125)            (104)
 
     Net increase (decrease) in cash
      and cash equivalents                          (2,564)          17,601
 
     Cash and cash equivalents,
      beginning of period                           32,751           48,676
     Cash and cash equivalents, end of period      $30,187          $66,277
 
     Supplemental disclosures of cash flow
      information:
       Cash paid during the period for -
         Interest                                   $  970           $1,393
         Income taxes                               $8,598           $3,942
 
 
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                http://tbutton.prnewswire.com/prn/11690X00641167
 
 

SOURCE CSG Systems International, Inc.
    ENGLEWOOD, Colo., April 25 /PRNewswire/ -- CSG Systems International, Inc.
 (Nasdaq:   CSGS), a leader in customer care and billing, today reported results
 for the quarter ended March 31, 2001.
 
     First Quarter 2001 Highlights:
     -- Revenues rose to a record $114.1 million, a 24 percent increase.
     -- Net income rose 33 percent to $27.1 million, or $0.49 per diluted
        share.
     -- Operating income rose 33 percent to a first quarter record of
        $43.8 million, or 38 percent of total revenues.
     -- The company converted approximately 377,000 new customers onto its
        processing system, ending the quarter  with 37.0 million.
     -- The Company repurchased 2.28 million shares under its stock buyback
        program during the quarter.
     -- The Company licensed CSG NextGen(TM), its next-generation customer care
        and billing solution for the global convergence communications
        industry, to a Latin American broadband provider.
     -- The Company's DBOs (days billings outstanding) improved to 56 days for
        the quarter from 72 days in the fourth quarter of last year.
     -- The Company raises its guidance for earnings per diluted share for 2001
        from $1.98 - $2.05 to $2.04 - $2.11.
 
 
     "I am pleased with our progress both on the domestic and international
 sides of our business.  We signed our first international contract for CSG
 NextGen(TM), we are on track with our domestic conversions onto our system and
 we continue to sell additional software into the broadband industry.  There is
 always a market for solutions like ours that help communications providers run
 their operations more efficiently and provide higher quality customer
 service."
                     Neal Hansen, Chairman and Chief Executive Officer
 
 
      Summary Information (unaudited)
      (in thousands, except per share amounts and percentages)
 
                                          Three Months Ended
                                               March 31,             Percent
                                          2001            2000       Change
 
      Total revenues                   $114,099         $92,063        24%
      Operating income                   43,804          32,989        33%
      Net income                         27,066          20,309        33%
      Net income per diluted share        $0.49           $0.36        36%
      Customer accounts processed
       (period end):
        Video                            34,076          32,745         4%
        Internet                          2,302           1,441        60%
        Telephony                           630             124       408%
          Total                          37,008          34,310         8%
 
     Record First Quarter Results
     Revenues reached a quarterly record.  Revenues grew 24 percent to
 $114.1 million for the quarter ended March 31, 2001, compared with
 $92.1 million for the first quarter of 2000.  Net income for the first quarter
 of 2001 was $27.1 million, or $0.49 per diluted share, compared to
 $20.3 million, or $0.36 per diluted share, in the same quarter last year, a
 33 percent increase (see attached financial statements).
     Processing revenues were $79.1 million in the first quarter of 2001,
 compared to $70.6 million in the same quarter last year, a 12 percent
 increase.  Software and professional services generated $35.0 million of
 revenue in the quarter, compared to $21.5 million for the first quarter in
 2000, a 63 percent increase.
 
     Customer Accounts
     Total domestic customer accounts on the Company's processing system as of
 March 31, 2001 were 37.0 million, compared to 34.3 million as of March 31,
 2000, an increase of 8 percent.  The Company converted approximately
 0.4 million new customer accounts onto its processing system during the first
 quarter of 2001.  The Company received $8.43 in annualized processing revenue
 per video account in the first quarter of 2001, compared to $8.31 for the
 first quarter of 2000, and $4.94 in processing revenue per internet account in
 the first quarter of 2001, compared to $5.46 per account in same period last
 year.
 
     Outlook for 2001
     "Consolidation, the introduction of new products like digital and
 high-speed data by our clients and the need to do more with the same or fewer
 employees, has created a need for our enabling technologies," Hansen said.
 "Based on what we are seeing in the broadband industry, the sales pipeline for
 the remainder of 2001 is robust."
     "We are raising our guidance on earnings per diluted share for 2001 based
 on the results we achieved this quarter," Peter Kalan, Chief Financial Officer
 for CSG Systems, said.  "Earnings per diluted share is expected to range
 between $2.04 and $2.11, an increase of 6 cents over our previous guidance."
 
     Financial Condition
     As of March 31, 2001, the Company had cash and current investments of
 $52.4 million, compared to $43.7 million as of December 31, 2000.  The balance
 of the Company's long-term debt as of March 31, 2001 was $52.5 million,
 compared to $58.3 million as of December 31, 2000, a decrease of $5.8 million.
     Billed net accounts receivable as of March 31, 2001 were $79.9 million
 compared to $128.9 million as of December 31, 2000.  Accounts receivable
 reflected days billings outstanding (DBOs) of 56 days for the first quarter of
 2001, compared to 54 days for the quarter ended March 31, 2000.  Cash flows
 from operations for the quarter ended March 31, 2001 were $79.9 million,
 compared to $25.0 million for the first quarter of 2000.  The increase in cash
 flows from operations relates primarily to the growth in the Company's
 revenues and the timing of payments received from clients.
     For the first quarter of 2001, earnings before interest, taxes,
 depreciation and amortization (EBITDA) was $48.3 million, or 42 percent of
 total revenues, compared to $37.5 million, or 41 percent of total revenues,
 for the first quarter of 2000, an increase of 29 percent.
 
     Stock Repurchase Program
     On February 28, 2001, AT&T exercised its right to purchase 2.0 million
 shares of the Company's common stock at an exercise price of $12 per share,
 for a total exercise price of $24.0 million.  Immediately following the
 exercise of the warrant, the Company repurchased the 2.0 million shares at
 $37.00 per share (approximated the closing price on February 28, 2001) for a
 total repurchase price of $74.0 million.  As a result, the net cash outlay
 paid to AT&T for this transaction was $50.0 million.  After this transaction,
 AT&T no longer has any warrants or other rights to purchase the Company's
 common stock.
     During February 2001, the Company purchased an additional 0.28 million
 shares of its common stock in the open market for $11.2 million (weighted-
 average price of $39.98).  The shares repurchased under the Company's stock
 repurchase program since its inception in 1999, including the 2.0 million
 shares repurchased as part of the AT&T warrant exercise discussed above, total
 4.03 million shares at a total cost of $156.5 million (weighted-average price
 of $38.88 per share).  The Company is authorized to repurchase up to a total
 of 5.0 million shares under its stock repurchase program.
 
     Based in Denver, Colorado, CSG Systems International, Inc., is the parent
 company of CSG Systems, Inc., which provides customer care and billing
 solutions worldwide for the converging communications markets, including cable
 television, direct broadcast satellite, telephony, on-line services and
 others.  The Company offers its clients a full range of processing services,
 software and support services that automate customer management functions,
 including billing, sales support and order processing, invoice calculation and
 production, management reporting and customer analysis for target marketing.
 CSG Systems, Inc. provides its services to over one-third of the households in
 the United States.
 
     Information about CSG Systems, Inc. and its products can be found on the
 worldwide web at http://www.csgsys.com.
 
     This news release contains forward-looking statements that are based on
 assumptions about a number of important factors and involve risks and
 uncertainties that could cause actual results to differ materially from what
 appears in this press release.  These factors include, but are not limited to,
 the following:  1) the continued acceptance of CCS and related products and
 services; 2) CSG's ability to continue to perform satisfactorily under the
 terms of its contract with AT&T, which is set to expire in 2012, as well as
 the level of cooperation between CSG and AT&T on the opportunities and
 obligations presented by the contract; 3) CSG's ability to timely enhance
 current products and develop new technology that will retain existing
 customers and capture new market share; 4) significant forays into new
 markets, which may prove costly and unprofitable; 5) the degree to which CSG's
 expectations of market penetration and consumer acceptance of broadband
 services prove true -- and even if realized, CSG may be unable to meet the
 special billing and customer care needs of that market; 6) customer
 consolidation has decreased the number of potential buyers for many of the
 company's products and services; 7) CSG's ability to sell additional software
 products and services into its existing and new customers; and 8) the Company
 currently has scheduled approximately 4.8 million customers to be converted
 onto its system during 2001, the majority of which are AT&T customers.  If for
 any reason CSG is unable to convert the vast majority of these customers onto
 its system in the targeted timeframe, it may have an adverse impact on the
 Company's growth objectives.
     This list is not exhaustive and readers are encouraged to review the
 additional risks and important factors described in the Company's Report to
 Stockholders on Form 10-K and 10-Q and other filings made with the SEC.
 
 
                        CSG SYSTEMS INTERNATIONAL, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
               (in thousands, except share and per share amounts)
 
                                              March 31,          December 31,
                                                 2001                 2000
                            ASSETS           (unaudited)
     Current assets:
       Cash and cash equivalents               $30,187               $32,751
       Short-term investments                   22,178                10,982
         Total cash, cash equivalents
          and short-term investments            52,365                43,733
     Accounts receivable-
       Trade -
         Billed, net of allowance of
          $4,756 and $5,001                     79,898               128,902
         Unbilled                                8,335                 4,306
       Other                                     2,811                 1,259
       Deferred income taxes                     3,815                 3,247
       Other current assets                      8,576                 7,507
         Total current assets                  155,800               188,954
     Property and equipment, net of
      depreciation of $45,575 and $42,457       39,881                36,630
     Software, net of amortization
      of $36,162 and $39,112                     3,819                 4,284
     Goodwill, net of amortization
      of $4,926 and $4,883                       1,686                 1,894
     Client contracts and related
      intangibles, net of amortization
      of $28,416 and $28,855                    51,386                52,368
     Deferred income taxes                      46,387                47,331
     Other assets                                  536                   628
         Total assets                         $299,495              $332,089
 
          LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities:
       Current maturities of long-term debt    $26,250               $25,436
       Customer deposits                        12,785                12,391
       Trade accounts payable                   11,920                14,850
       Accrued employee compensation            13,072                19,147
       Deferred revenue                         11,246                 8,172
       Accrued income taxes                     22,559                15,633
       Other current liabilities                14,476                12,008
         Total current liabilities             112,308               107,637
     Non-current liabilities:
       Long-term debt, net of
        current maturities                      26,250                32,820
       Deferred revenue                            451                   463
         Total non-current liabilities          26,701                33,283
     Stockholders' equity:
       Preferred stock, par value $.01
        per share; 10,000,000 shares authorized;
        zero shares issued and outstanding          --                    --
       Common stock, par value $.01 per share;
        100,000,000 shares authorized;
        52,392,240 and 52,530,203
        shares outstanding                         565                   543
       Common stock warrants; zero and
        2,000,000 warrants outstanding              --                17,430
       Additional paid-in capital              225,401               180,750
       Accumulated other comprehensive
        income (loss):
         Unrealized gain (loss) on
          short-term investments, net of tax        12                  (350)
         Cumulative translation adjustments       (813)                 (654)
       Treasury stock, at cost, 4,110,986
        and 1,830,986 shares                  (156,692)              (71,497)
       Accumulated earnings                     92,013                64,947
         Total stockholders' equity            160,486               191,169
         Total liabilities and
          stockholders' equity                $299,495              $332,089
 
 
                        CSG SYSTEMS INTERNATIONAL, INC.
            CONDENSED CONSOLIDATED STATEMENTS OF INCOME  - UNAUDITED
                    (in thousands, except per share amounts)
 
                                                    Three Months Ended
                                             March 31,              March 31,
                                                2001                  2000
 
     Total revenues                           $114,099               $92,063
 
     Expenses:
     Total cost of revenues                     41,794                36,286
     Gross margin (exclusive of depreciation)   72,305                55,777
     Operating expenses:
       Research and development                 11,611                 9,888
       Selling, general and administrative      13,540                10,088
       Depreciation                              3,350                 2,812
           Total operating expenses             28,501                22,788
     Operating income                           43,804                32,989
       Other income (expense):
        Interest expense                        (1,082)               (1,541)
        Interest and investment income, net        947                 1,263
        Other                                      (19)                   (7)
           Total other                            (154)                 (271)
     Income before income taxes                 43,650                32,718
       Income tax provision                    (16,584)              (12,409)
     Net income                                $27,066               $20,309
 
     Basic net income per common share:
       Net income available to
        common stockholders                      $0.52                 $0.39
       Weighted-average common shares           52,469                51,857
 
     Diluted net income per common share:
       Net income available to
        common stockholders                      $0.49                 $0.36
       Weighted-average common shares           55,135                56,830
 
 
                        CSG SYSTEMS INTERNATIONAL, INC.
          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  - UNAUDITED
                                 (in thousands)
 
                                                      Three Months Ended
                                                  March 31,        March 31,
                                                     2001            2000
     Cash flows from operating activities:
       Net income                                  $27,066          $20,309
       Adjustments to reconcile net income
        to net cash provided by
        operating activities -
         Depreciation                                3,350            2,812
         Amortization                                1,777            1,838
         Loss on short-term investment                 495               --
         Deferred income taxes                         158            1,446
         Stock-based employee compensation              --               30
         Changes in operating assets
          and liabilities:
            Trade accounts and other
             receivables, net                       43,423            5,345
            Other current and noncurrent assets     (1,121)          (1,087)
            Accounts payable and accrued
             liabilities                             4,793           (5,645)
              Net cash provided by
               operating activities                 79,941           25,048
 
     Cash flows from investing activities:
       Purchases of property and equipment, net     (6,587)          (6,442)
       Purchases of short-term investments         (16,993)              --
       Proceeds from sale of short-term
        investments                                  5,882               --
       Investment in client contract                   (30)              --
              Net cash used in
               investing activities                (17,728)          (6,442)
 
     Cash flows from financing activities:
       Proceeds from issuance of common stock        2,299            7,059
       Proceeds from exercise of stock warrants     24,000               --
       Repurchase of common stock                  (85,195)          (2,987)
       Payments on notes receivable
        from employee stockholders                      --               27
       Payments on long-term debt                   (5,756)          (5,000)
              Net cash used in
               financing activities                (64,652)            (901)
 
     Effect of exchange rate fluctuations on cash     (125)            (104)
 
     Net increase (decrease) in cash
      and cash equivalents                          (2,564)          17,601
 
     Cash and cash equivalents,
      beginning of period                           32,751           48,676
     Cash and cash equivalents, end of period      $30,187          $66,277
 
     Supplemental disclosures of cash flow
      information:
       Cash paid during the period for -
         Interest                                   $  970           $1,393
         Income taxes                               $8,598           $3,942
 
 
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 SOURCE  CSG Systems International, Inc.