Convergys Corporation announced unaudited consolidated earnings results for the first quarter ended March 31, 2017. For the quarter, the company reported total revenues of $727.6 million against $722.2 million a year ago. Increase includes a $41 million or 6% contribution from the buw acquisition. Operating income was $48.8 million against $60.4 million a year ago. Income from continuing operations, net of tax was $37.9 million or $0.38 per diluted share against $44.5 million or $0.43 per diluted share a year ago. Net income was $37.9 million or $0.38 per diluted share against $44.5 million or $0.43 per diluted share a year ago. Income before income taxes was $44.8 million against $54.6 million a year ago. Adjusted operating income was $71.3 million against $70.5 million a year ago. Adjusted income from continuing operations, net of tax was $52.1 million or $0.52 per diluted share against $51.6 million or $0.50 per diluted share a year ago. EBITDA was $84.7 million against $97.8 million a year ago. Adjusted EBITDA was $99.0 million against $97.8 million a year ago. Net cash provided by operating activities was $32.9 million against $76.6 million a year ago. Capital expenditures were $8.9 million against $11.0 million a year ago. Adjusted free cash flow was $25.7 million against $67.0 million a year ago. Free cash flow was $24.0 million against free cash flow of $65.6 million a year ago. Net debt totaled $156 million at March 31, 2017, compared with $148 million at December 31, 2016, and $86 million at the end of the first quarter last year. Compared with last year, free cash flow in the first quarter was impacted by the timing of payments on accounts payable and accrued expenses.

The company provided earnings guidance for the second, third quarter and full year of 2017. For the quarter, the company expects to see a sequential revenue reduction of 5% to 6%. The company expects seasonal sequential decreases in revenue, EBITDA and EPS in the second quarter of 2017. Profitability will be negatively impacted by investment in agent training and infrastructure in advance of new program ramps later in the year as well as a seasonal revenue reduction. As a result, the company expects to see a sequential operating margin reduction similar to the decrease in the second quarter last year.

In third quarter, The company anticipates sequential improvements in revenue as new programs begin to ramp. The company expects sequential improvement in EBITDA and EPS in quarterly results beginning in the third quarter of 2017. Anticipated sequential improvements in profitability as new programs come online.

The company expects currency revenue growth of negative 3% to positive 1%, this includes the 3% lift in 2017 from the buw acquisition and a 4% to 5% revenue headwind from their two clients; adjusted EBITDA margin to approximate 12.5%; adjusted effective tax rate to approximate 20%; adjusted EPS growth of negative 3% to positive 3%; adjusted free cash flow to approximate adjusted net income.