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GXS Reports Third Quarter 2013 Financial Results

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GXS Reports Third Quarter 2013 Financial Results GXS, a leading provider of B2B integration services, today announced its financial results for the third quarter ended September 30, 2013 and updated financial guidance for the fourth quarter and full year 2013.

FINANCIAL HIGHLIGHTS FROM THE QUARTER

  • Total Revenue: $121.8 million, up $0.5 million versus 3Q12, up 2% adjusting for currency
  • Managed Services Revenue: $50.4 million, up 12% versus 3Q12, up 13% adjusting for currency
  • Messaging Services Revenue: $50.0 million, down 5% versus 3Q12, down 2% adjusting for currency
  • Adjusted EBITDA: $40.0 million, up 7% versus 3Q12, up 8% adjusting for currency
  • Adjusted EBITDA Margin: 32.8%, up 210 basis points versus 3Q12, up 175 basis points adjusting for currency
  • Net Income: $0.5 million, up $0.7 million versus 3Q12
  • Minimum Contracted Value (MCV): $65.1 million, up 30% versus 3Q12 and up 24% versus 2Q13
  • Results at the high end of Total Revenue guidance and above the high end of Adjusted EBITDA guidance for 3Q13

BUSINESS HIGHLIGHTS FROM THE QUARTER

  • Announced the pending acquisition of the company by Open Text Corporation for $1.165 billion which is expected to close in the first quarter of 2014, subject to antitrust review and other customary closing conditions
  • Achieved its ninth consecutive quarter of constant currency pro forma revenue growth
  • Reported higher Managed Services revenue than Messaging revenue for the first time
  • Named the 2013 IT Supplier Quality Award (ISQA) Winner by Avago Technologies, an annual award presented to supplier partners that significantly contribute to Avago's goals
  • Announced that GXS Active Intelligence, which is delivered as a Software-as-a-Service (SaaS) solution, enables retailers operational visibility to monitor and assess the drop ship process to prevent errors before they impact the customer experience
  • Partnered with Tillerman to streamline data collection for complete point-of-sale analytics; Tillerman's Point-of-Sale (POS) Software-as-a-Service application will now integrate with GXS Trading Grid to easily collect key data and provide Tillerman's clients with insight into their supply chains for more accurate planning and forecasting
  • Held its EMEA Managed Services Customer Advisory Board (CAB) at ArcelorMittal's headquarters in Paris, France
  • Hosted a three part series with Secom Trust Systems, Japan's largest security company, to discuss global B2B integration issues specific to Japan
  • Received certification by SAP's Integration and Certification Center (SAP ICC) that GXS integrates with the latest versions of SAP's ERP application; the three-year Netweaver certification confirms that GXS Trading Grid is fully interoperable with SAP NetWeaver

“We are very pleased with our third quarter results, having achieved our ninth consecutive quarter of constant currency revenue growth, while generating strong margin expansion and MCV growth in the quarter,” commented GXS President and Chief Executive Officer Bob Segert. “We are also excited about the pending acquisition of GXS by OpenText. Through GXS, OpenText will strengthen its cloud services portfolio and its EIM leadership, and GXS customers will immediately benefit from an expanded suite of B2B cloud integration services and capabilities. We couldn't think of a better home for our great company and its approximately 3,000 employees around the world.”

FINANCIAL RESULTS FOR THE THIRD QUARTER OF 2013

Revenue

Total revenue for 3Q13 was $121.8 million, up $0.5 million as compared to 3Q12 (up 2%, adjusting for currency) and at the high end of our guidance of $121 to $122 million. Managed Services revenue was $50.4 million in 3Q13, up 12% as compared to $45.1 million in 3Q12 (up 13%, adjusting for currency) and Messaging Services revenue was $50.0 million in 3Q13, down 5% from $52.3 million in 3Q12 (down 2%, adjusting for currency). B2B Software and Services, Data Synchronization, and Custom Outsourcing revenues were $21.4 million in the aggregate for 3Q13, down 10% as compared to $23.8 million in 3Q12 (down 10%, adjusting for currency).

         
Third Quarter
2013   2012   % change
(in $ millions)
Revenue
Managed Services $ 50.4 $ 45.1 12 %
Messaging Services $ 50.0 $ 52.3 -5 %
B2B Software and Services, Data Synchronization, and Custom Outsourcing $ 21.4   $ 23.8   -10 %
Total Revenue $ 121.8 $ 121.3 0 %
             
Note: Some calculations may differ due to rounding
 

SOURCE: BUSINESS WIRE


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