Convergys Corporation's Earnings up 43 Percent in the Third Quarter

Convergys Corporation (NYSE: CVG), a global leader in providing customer care, human resources, and billing services, announced today its financial results for the third quarter of 2005.

Total revenues increased to $644.8 million compared to $639.9 million reported in the third quarter of 2004 reflecting growth from the Information Management Group. Operating income of $67.0 million increased 25 percent from $53.6 million in the prior year, while operating margin increased to 10.4 percent versus 8.4 percent. The increase in operating income reflects a continuation of IMG’s strong operating performance resulting from a combination of revenue growth and the fourth quarter 2004 restructuring actions. Improvement in CMG’s cost structure also contributed to the increase in operating income. Net income of $42.4 million was up 41 percent versus $30.1 million in the third quarter of 2004. Earnings per diluted share increased 43 percent to $0.30 compared to $0.21 in the third quarter of 2004.

“I am very pleased with our earnings performance this quarter. Our third quarter results put us on track to deliver our earnings guidance in 2005,” said Jim Orr, Chairman and CEO of Convergys. “Previously we made commitments to improve performance at both IMG and CMG. We have delivered at IMG with our third consecutive quarter of revenue growth and strong operating margins. With CMG’s strong operating improvement from the second quarter, we have begun to deliver on our commitment at CMG as well. Importantly, we believe there are opportunities for even further improvement.”

Orr continued, “I also want to highlight the important management change Convergys announced this quarter. Dave Dougherty assumed the duties of President and Chief Operating Officer. Dave brings to this new role a strong track record of success at Convergys. In his new role, Dave will focus on driving improved profitability and growth.”

Convergys is the parent company of collection agency Encore Receivables Management.