PGi Reports Fourth Quarter and Fiscal Year 2012 Results: Q4 Organic Revenues Grew Over 6%* to $125.8M, Non-GAAP Diluted EPS from Continuing Operations $0.18*

Company Sees Solid Organic Growth and Higher Profitability in 2013

13 Feb, 2013, 16:05 ET from Premiere Global Services, Inc.

ATLANTA, Feb. 13, 2013 /PRNewswire/ -- Premiere Global Services, Inc. (NYSE: PGI), a global leader in virtual meetings for over 20 years, today announced results for the fourth quarter and fiscal year ended December 31, 2012.

In the fourth quarter of 2012, net revenues increased nearly 6% to $125.8 million, compared to $118.7 million in the fourth quarter of 2011.  Diluted EPS from continuing operations was $0.20 in the fourth quarter of 2012, compared to $0.07 in the fourth quarter of 2011.  Non-GAAP diluted EPS from continuing operations was $0.18* in the fourth quarter of 2012, compared to $0.18* in the fourth quarter of 2011.  

"We are pleased with our solid financial performance in 2012, as we continued to grow across all regions and product lines and to generate operating leverage in our business," said Boland T. Jones, PGi founder, chairman and CEO. "Last year, we also made meaningful strategic progress in transitioning PGi toward a software as a service model, with increasing momentum of our next-generation virtual meeting solutions, iMeet® and GlobalMeet®, in the global market."

"This year, we plan to continue to enhance our suite of PGi software products that will open new market opportunities and further position PGi as a global leader in business collaboration. We are optimistic in our outlook, and we see 2013 as another year of solid organic growth and higher profitability for PGi."

2012 Financial Results In 2012, net revenues increased 6.6% to $505.3 million, compared to $473.8 million in 2011.  Diluted EPS from continuing operations was $0.58 in 2012, compared to diluted EPS from continuing operations of $0.34 in 2011. Non-GAAP diluted EPS from continuing operations increased 17.7% to $0.73* in 2012, compared to non-GAAP diluted EPS from continuing operations of $0.62* in 2011. 

2012 Accomplishments

  • Reported our highest annual organic revenue growth in four years, with organic revenue increasing 7.5%* as compared to 2011;
  • Reported non-GAAP diluted EPS from continuing operations growth of nearly 18%* as compared to 2011;
  • Grew total meetings hosted by nearly 30% as compared to 2011;
  • More than doubled the revenue run-rate from iMeet and GlobalMeet, exiting 2012 with an annual revenue run-rate of nearly $23 million from these solutions;
  • Earned multiple awards and accolades for our product innovation, including:
    • iMeet awarded Silver for Best New Product by Edison Awards;
    • PGi awarded the Silver Stevie® Award for Most Innovative Tech Company of the Year by the American Business AwardsSM;
    • PGi awarded the Bronze Stevie® Award for Most Innovative Company of the Year in Canada and the U.S.A. by the International Business AwardsSM; and
    • PGi named one of the InformationWeek® Top 250 Innovators of the Year.
  • Announced a multi-year, multi-million dollar strategic alliance with Deutsche Telekom, naming the integrated telecommunications company as the exclusive reseller of iMeet in Germany;
  • Announced a multi-year strategic alliance with eircom, Ireland's leading provider of fixed and mobile telecommunications, who will offer PGi's entire suite of conferencing solutions, including iMeet and GlobalMeet, to its business customers;
  • Established a new open market share repurchase program for up to 5.0 million shares of our common stock; and
  • Repurchased nearly 3.2 million shares of common stock in the open market under our prior share repurchase plan.

Financial Outlook The following statements are based on PGi's current expectations. These statements contain forward-looking statements and company estimates, and actual results may differ materially.  PGi assumes no duty to update any forward-looking statements made in this press release.

Based on current business trends and current foreign currency exchange rates, PGi anticipates net revenues from continuing operations in 2013 will be in the range of $525-$535 million and non-GAAP diluted EPS from continuing operations will be in the range of $0.81-$0.85*.

PGi will host a conference call today at 5:00 p.m., Eastern Time, to discuss these results.  To participate in the call, please dial-in to the appropriate number 5-10 minutes prior to the scheduled start time:  (888) 278-8475 (U.S. and Canada) or (913) 312-0390 (International).  The conference call will simultaneously be webcast.  Please visit www.pgi.com for webcast details and conference call replay information, as well as the webcast archive and the text of the earnings release, including the financial and statistical information to be presented during the call.

* Non-GAAP Financial Measures To supplement the company's consolidated financial statements presented in accordance with GAAP, we have included the following non-GAAP measures of financial performance: non-GAAP operating income, non-GAAP net income from continuing operations, non-GAAP diluted net income per share (EPS) from continuing operations and organic growth. The company has also included these non-GAAP measures, as well as net revenues and segment net revenues, on a constant currency basis.  Management uses these measures internally as a means of analyzing the company's current and future financial performance and identifying trends in our financial condition and results of operations.  We have provided this information to investors to assist in meaningful comparisons of past, present and future operating results and to assist in highlighting the results of ongoing core operations.  Please see the table attached for calculation of these non-GAAP financial measures and for reconciliation to the most directly comparable GAAP measures.  These non-GAAP financial measures may differ materially from comparable or similarly titled measures provided by other companies and should be considered in addition to, not as a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. 

About Premiere Global Services, Inc. │PGi PGi has been a global leader in virtual meetings for over 20 years. Our cloud-based solutions deliver multi-point, real-time virtual collaboration using video, voice and file sharing technologies. PGi solutions are available via desktops, tablets or mobile devices, helping businesses worldwide be more productive, mobile and green.  PGi has a global presence in 25 countries and an established base of over 40,000 enterprise customers, including 75% of the Fortune 100.  In the last five years, PGi has hosted nearly one billion people from 137 countries in over 200 million meetings. For more information, visit PGi at http://www.pgi.com.

Statements made in this press release, other than those concerning historical information, should be considered forward-looking and subject to various risks and uncertainties. Such forward-looking statements are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and are made based on management's current expectations or beliefs as well as assumptions made by, and information currently available to, management. A variety of factors could cause actual results to differ materially from those anticipated in Premiere Global Services, Inc.'s forward-looking statements, including, but not limited to, the following factors: competitive pressures, including pricing pressures; technological changes and the development of alternatives to our services; market acceptance of new cloud-based, virtual meeting services, including our iMeet® and GlobalMeet® services; our ability to attract new customers and to retain and further penetrate our existing customers; risks associated with challenging global economic conditions; price increases from our telecommunications service providers; service interruptions and network downtime; technological obsolescence and our ability to upgrade our equipment or increase our network capacity; concerns regarding the security of transactions; future write-downs of goodwill or other intangible assets; greater than anticipated tax liabilities; restructuring and cost reduction initiatives and the market reaction thereto; our level of indebtedness; risks associated with acquisitions and divestitures; the impact of the sale of our PGiSend business; our ability to protect our intellectual property rights, including possible adverse results of litigation or infringement claims; regulatory or legislative changes, including further government regulations applicable to traditional telecommunications service providers and data privacy; risks associated with international operations and market expansion, including fluctuations in foreign currency exchange rates; and other factors described from time to time in our press releases, reports and other filings with the Securities and Exchange Commission, including but not limited to the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2011. All forward-looking statements attributable to us or a person acting on our behalf are expressly qualified in their entirety by this cautionary statement. 

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PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

 Three Months Ended  

 Twelve Months Ended  

 December 31, 

 December 31, 

2012

2011

2012

2011

 (Unaudited) 

 (Unaudited) 

Net revenues

$  125,771

$    118,735

$  505,281

$    473,834

Operating expenses: 

Cost of revenues (exclusive of depreciation and amortization shown

separately below)

54,110

49,227

215,154

195,822

Selling and marketing

31,875

31,492

130,631

134,018

General and administrative (exclusive of expenses

shown separately below)

16,342

14,767

63,412

57,176

Research and development

3,741

2,784

14,349

11,521

Excise and sales tax expense

203

-

321

352

Depreciation

8,275

7,659

32,482

30,831

Amortization

742

1,304

3,981

6,365

Restructuring costs

(91)

809

612

847

Asset impairments

138

340

879

456

Net legal settlements and related expenses

183

375

2,034

490

Total operating expenses

115,518

108,757

463,855

437,878

Operating income

10,253

9,978

41,426

35,956

Other (expense) income:

Interest expense

(1,763)

(3,573)

(7,167)

(9,954)

Interest income

30

12

49

46

Other, net

(277)

(339)

(808)

(574)

Total other expense

(2,010)

(3,900)

(7,926)

(10,482)

Income from continuing operations before income taxes

8,243

6,078

33,500

25,474

Income tax (benefit) expense

(1,173)

2,797

5,445

8,586

Net income from continuing operations

9,416

3,281

28,055

16,888

(Loss) income from discontinued operations, net of taxes

(131)

(2,194)

(465)

4,546

Net income

$       9,285

$         1,087

$     27,590

$       21,434

BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING

46,546

48,540

47,596

49,619

Basic net income (loss) per share (1)

Continuing operations

$         0.20

$           0.07

$         0.59

$           0.34

Discontinued operations

-

(0.05)

(0.01)

0.09

 Net income per share

$         0.20

$           0.02

$         0.58

$           0.43

DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING

47,103

48,970

48,092

49,971

Diluted net income (loss) per share (1)

Continuing operations

$         0.20

$           0.07

$         0.58

$           0.34

Discontinued operations

-

(0.04)

(0.01)

0.09

Net income per share

$         0.20

$           0.02

$         0.57

$           0.43

(1)

Column totals may not sum due to the effect of rounding on EPS.

 

 

PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

December 31, 

December 31, 

2012

2011

(Unaudited)

ASSETS

CURRENT ASSETS

Cash and equivalents

$           20,976

$           32,033

Accounts receivable (less allowances of $834 and $613, respectively)

75,149

72,518

Prepaid expenses and other current assets

18,245

13,906

Income taxes receivable

1,272

1,739

Deferred income taxes, net

2,566

1,090

Total current assets

118,208

121,286

PROPERTY AND EQUIPMENT, NET

104,613

103,449

OTHER ASSETS

Goodwill

297,773

295,690

Intangibles, net of amortization

7,384

10,906

Deferred income taxes, net

5,848

3,474

Other assets

7,942

8,016

TOTAL ASSETS

$         541,768

$         542,821

          LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable

$           48,166

$           42,589

Income taxes payable

1,116

962

Accrued taxes, other than income taxes

4,333

3,611

Accrued expenses

32,093

28,999

Current maturities of long-term debt and capital lease obligations 

3,137

3,845

Accrued restructuring costs

1,040

2,287

Deferred income taxes, net

15

386

Total current liabilities

89,900

82,679

LONG-TERM LIABILITIES

Long-term debt and capital lease obligations 

179,832

195,963

Accrued restructuring costs

117

1,410

Accrued expenses

19,661

17,249

Deferred income taxes, net

54

1,783

Total long-term liabilities

199,664

216,405

SHAREHOLDERS' EQUITY

Common stock, $0.01 par value; 150,000,000 shares authorized,

47,745,592 and 50,144,703 shares issued and outstanding, respectively

477

501

Additional paid-in capital

453,621

475,013

Accumulated other comprehensive gain

13,102

10,809

Accumulated deficit

(214,996)

(242,586)

Total shareholders' equity

252,204

243,737

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$         541,768

$         542,821

PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (in thousands)

Twelve Months Ended

December 31, 

2012

2011

(Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES

Net income 

$       27,590

$       21,434

Loss (income) from discontinued operations, net of taxes

465

(4,546)

 Net income from continuing operations 

28,055

16,888

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

32,482

30,831

Amortization

3,981

6,365

Amortization of debt issuance costs 

592

926

Write-off of unamortized debt issuance costs

-

743

Net legal settlements and related expenses

2,034

399

Payments for legal settlements and related expenses

(1,512)

(246)

Deferred income taxes

(5,333)

2,388

Restructuring costs

612

847

Payments for restructuring costs 

(3,213)

(6,779)

Asset impairments

879

456

Equity-based compensation

8,074

6,757

Excess tax benefits from share-based payment arrangements

(367)

-

Provision for doubtful accounts

1,089

626

Changes in assets and liabilities, net of effect of acquisitions and dispositions:

Accounts receivable, net

(3,581)

(8,937)

Other assets and liabilities

(2,404)

3,900

Accounts payable and accrued expenses

9,133

3,565

Net cash provided by operating activities from continuing operations

70,521

58,729

Net cash used in operating activities from discontinued operations

(672)

(792)

Net cash provided by operating activities

69,849

57,937

CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditures

(32,338)

(30,100)

Other investing activities

(1,273)

(1,709)

Business dispositions

-

1,902

Net cash used in investing activities from continuing operations

(33,611)

(29,907)

Net cash used in investing activities from discontinued operations

(60)

(276)

Net cash used in investing activities

(33,671)

(30,183)

CASH FLOWS FROM FINANCING ACTIVITIES

Principal payments under borrowing arrangements

(94,655)

(70,793)

Proceeds from borrowing arrangements

75,929

85,971

Payments of debt issuance costs

(23)

(1,469)

Excess tax benefits of share-based payment arrangements

367

-

Purchase of treasury stock, at cost

(29,915)

(23,852)

Exercise of stock options

932

614

Net cash used in financing activities from continuing operations

(47,365)

(9,529)

Net cash used in financing activities from discontinued operations

-

(140)

Net cash used in financing activities

(47,365)

(9,669)

Effect of exchange rate changes on cash and equivalents

130

(1,153)

NET (DECREASE) INCREASE IN CASH AND EQUIVALENTS

(11,057)

16,932

CASH AND EQUIVALENTS, beginning of period

32,033

15,101

CASH AND EQUIVALENTS, end of period

$       20,976

$       32,033

PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(in thousands, except per share data)

Three Months Ended 

Twelve Months Ended 

December 31,

December 31,

2012

2011

2012

2011

(Unaudited)

(Unaudited)

Non-GAAP Operating Income (1)

Operating income, as reported 

$      10,253

$        9,978

$      41,426

$      35,956

Restructuring costs 

(91)

809

612

847

Excise and sales tax expense

203

-

321

352

Asset impairments

138

340

879

456

Net legal settlements and related expenses

183

375

2,034

490

Equity-based compensation

1,961

1,548

8,074

6,757

Amortization

742

1,304

3,981

6,365

Non-GAAP operating income

$      13,389

$      14,354

$      57,327

$      51,223

Non-GAAP Net Income from Continuing Operations (1)

Net income from continuing operations, as reported

$        9,416

$        3,281

$      28,055

$      16,888

Elimination of non-recurring tax adjustments

(3,376)

1,217

(4,354)

1,672

Restructuring costs

(67)

599

433

617

Excise and sales tax expense

149

-

227

256

Excise and sales tax interest

-

-

-

117

Asset impairments

101

252

622

332

Net legal settlements and related expenses

134

278

1,439

357

Equity-based compensation

1,437

1,146

5,712

4,923

Amortization

544

965

2,817

4,638

Debt refinance costs and other non-recurring interest

-

978

-

962

Non-GAAP net income from continuing operations

$        8,338

$        8,716

$      34,951

$      30,762

Non-GAAP Diluted EPS from Continuing Operations (1) (2)

Diluted net income per share from continuing operations, as reported

$           0.20

$           0.07

$           0.58

$          0.34

Elimination of non-recurring tax adjustments

(0.07)

0.02

(0.09)

0.03

Restructuring costs

-

0.01

0.01

0.01

Excise and sales tax expense

-

-

-

0.01

Excise and sales tax interest

-

-

-

-

Asset impairments

-

0.01

0.01

0.01

Net legal settlements and related expenses

-

0.01

0.03

0.01

Equity-based compensation

0.03

0.02

0.12

0.10

Amortization

0.01

0.02

0.06

0.09

Debt refinance costs and other non-recurring interest

-

0.02

-

0.02

Non-GAAP diluted EPS from continuing operations

$           0.18

$           0.18

$           0.73

$          0.62

(1)

Management believes that presenting non-GAAP operating income, non-GAAP net income from continuing operations and non-GAAP diluted EPS from continuing operations provide useful information regarding underlying trends in the company's continuing operations. Management expects equity-based compensation and amortization expenses to be recurring costs and presents non-GAAP net income from continuing operations and non-GAAP diluted EPS from continuing operations to exclude these non-cash items as well as non-recurring items that are unrelated to the company's ongoing operations, including non-recurring tax adjustments, restructuring costs, excise and sales tax expense, excise and sales tax company's ongoing operations, including non-recurring tax adjustments, restructuring costs, excise and sales tax expense, excise and sales tax interest, asset impairments, net legal settlements and related expenses and debt refinance costs and other non-recurring interest. These non-cash and non-recurring items are presented net of taxes for non-GAAP net income from continuing operations and non-GAAP diluted EPS from continuing operations.

(2)

Column totals may not sum due to the effect of rounding on EPS.

 

PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

CONSTANT CURRENCY ADJUSTMENTS AND ORGANIC GROWTH

Prior Year Quarter Constant Currency Adjustments (3)

Impact of

Q4 - 12 (Constant currency)

fluctuations in foreign currency exchange rates

Q4 - 12 (Actual)

(Unaudited, in thousands, except per share data)

Net Revenues

$          125,988

$

(217)

$     125,771

North America Net Revenue

$            82,477

$

102

$       82,579

Europe Net Revenue

$            27,730

$

(302)

$       27,428

Asia Pacific Net Revenue

$            15,781

$

(17)

$       15,764

Non-GAAP Operating Income

$            13,379

$

10

$       13,389

Non-GAAP Net Income from Continuing Operations

$              8,247

$

91

$         8,338

Non-GAAP Diluted EPS from Continuing Operations

$                0.18

$

-

$           0.18

(3)

Management also presents the non-GAAP financial measures described under note 1 above, as well as net revenues and segment net revenue, 

on a constant  currency basis compared to the same quarter in the previous year to exclude the effects of foreign currency exchange rates, which 

are not completely within management's control, in order to facilitate period-to-period comparison of the company's financial results 

without the distortion of these fluctuations.  These constant currency adjustments convert current quarter results using 

prior period (Q4 - 11) average exchange rates.

Sequential Quarter Constant Currency Adjustments (4)

Impact of 

Q4 - 12 (Constant currency)

fluctuations in foreign currency exchange rates

Q4 - 12 (Actual)

(Unaudited, in thousands)

Net Revenues

$          125,313

$                     458

$     125,771

(4)

Management also presents net revenues on a constant currency basis compared to the prior quarter to exclude the effects of foreign 

currency exchange rates, which are not completely within management's control, in order to facilitate period-to-period comparison of 

the company's financial results without the distortion of these fluctuations.  These constant currency adjustments convert current 

quarter results using prior period (Q3 - 12) average exchange rates.

Organic Growth (5)

December 31, 2011

Impact of

fluctuations in foreign currency exchange rates

Organic net revenue growth

December 31, 2012

Organic net

revenue

growth rate

(Unaudited, in thousands, except percentages)

Net Revenues, Three Months Ended

$          118,735

$                       (217)

$         7,253

$     125,771

6.1%

 Net Revenues, Twelve Months Ended

$          473,834

$                    (4,082)

$       35,529

$      505,281

7.5%

(5)

Management defines "organic growth" as revenue changes excluding the impact of foreign currency exchange rate fluctuations and acquisitions made 

during the periods presented and presents this non-GAAP financial measure to exclude the effect of these items that are not completely within 

management's control, such as foreign currency exchange rate fluctuations, or do not reflect the company's ongoing core operations or underlying 

growth, such as acquisitions. The Company did not make any acquisitions during the period presented.

(Logo: http://photos.prnewswire.com/prnh/20120628/MM33070LOGO

 

SOURCE Premiere Global Services, Inc.