PGi Reports Second Quarter 2013 Results: Organic Revenues Grew Nearly 5% to $132.2M*; Non-GAAP Diluted EPS from Continuing Operations $0.20*; SaaS Revenue Up Nearly 75% Year-Over-Year Company Revises 2013 Financial Outlook to Reflect Recent Changes in Foreign Currency Exchange Rates and Slower Trends in Europe

ATLANTA, July 18, 2013 /PRNewswire/ -- Premiere Global Services, Inc. (NYSE: PGI), a global leader in virtual meetings for over 20 years, today announced results for the second quarter ended June 30, 2013.

In the second quarter of 2013, net revenues totaled $132.2 million, compared to $127.0 million in the second quarter of 2012. Diluted EPS from continuing operations was $0.17 in the second quarter of 2013, compared to diluted EPS from continuing operations of $0.14 in the second quarter of 2012. Non-GAAP diluted EPS from continuing operations was $0.20* in the second quarter of 2013, compared to non-GAAP diluted EPS from continuing operations of $0.19* in the second quarter of 2012.

"With revenue from our SaaS products growing nearly 75% in the second quarter – and over half that growth coming from our audio customers adding iMeet® and GlobalMeet® – we remain pleased with our execution of PGi's growth strategy," said Boland T. Jones, PGi founder, chairman and CEO. "The continued growth of our SaaS-based revenue remains a top priority for us, while at the same time we are focused on continuing to drive market share gains through investments in our global distribution and in our acquisition program.

"Over the last few weeks, our year-over-year revenue trends in Europe have slowed, from double-digit to mid-single-digit organic growth rates. We believe this slowdown is related to general economic conditions in the region, and we are confident that PGi continues to have a strong competitive position in the European market. Despite these recent trends, we remain optimistic in both our near- and long-term outlooks for PGi."

Six Month Results

In the first six months of 2013, net revenues totaled $261.7 million, compared to $253.6 million in the first six months of 2012. Diluted EPS from continuing operations was $0.33 in the first six months of 2013, compared to diluted EPS from continuing operations of $0.27 in the first six months of 2012. Non-GAAP diluted EPS from continuing operations was $0.39* in the first six months of 2013, compared to non-GAAP diluted EPS from continuing operations of $0.37* in the first six months of 2012.

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.

Continued foreign currency exchange rate fluctuations and a recent slowing of our business trends in Europe have negatively affected the guidance PGi previously provided on April 18, 2013. As a result, PGi has updated its financial outlook for 2013. Based on current business trends and current foreign currency exchange rates, PGi anticipates that net revenues from continuing operations in 2013 will be in the range of $517-$523 million and non-GAAP diluted EPS from continuing operations will be in the range of $0.78-$0.81*.

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) 737-3662 (U.S. and Canada) or (913) 312-1472 (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. PGi's cloud-based solutions deliver multi-point, real-time virtual collaboration using video, voice, mobile, web streaming and file sharing technologies. PGi solutions are available via desktops, tablets and mobile devices, helping businesses worldwide be more productive, mobile and environmentally responsible. 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 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 our cloud-based, virtual meeting solutions, including our iMeet® and GlobalMeet® solutions; our ability to attract new customers and to retain and further penetrate our existing customers; our ability to establish and maintain strategic reseller relationships; 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 and privacy of our customer's confidential information; future write-downs of goodwill or other intangible assets; greater than anticipated tax and regulatory liabilities; restructuring and cost reduction initiatives and the market reaction thereto; our level of indebtedness; risks associated with acquisitions and divestitures; indemnification claims from 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, 2012. All forward-looking statements attributable to us or a person acting on our behalf are expressly qualified in their entirety by this cautionary statement. We do not undertake any obligation to update or to release publicly any revisions to forward-looking statements contained in this press release to reflect events or circumstances occurring after the date of this press release or to reflect the occurrence of unanticipated events.

 

PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)
















Three Months Ended


Six Months Ended





June 30,


June 30,





2013


2012


2013


2012












Net revenues


$ 132,178


$ 127,015


$ 261,670


$ 253,618

Operating expenses:










Cost of revenues (exclusive of depreciation and amortization shown











separately below)


56,856


53,788


112,363


107,238


Selling and marketing


34,382


32,997


68,545


67,031


General and administrative (exclusive of expenses











shown separately below)


16,186


15,934


31,679


31,215


Research and development


3,831


3,526


7,554


6,905


Excise and sales tax expense


77


118


77


118


Depreciation


8,331


8,011


16,570


15,956


Amortization


392


1,212


854


2,432


Restructuring costs (income)


131


(48)


201


113


Asset impairments


54


20


198


45


Net legal settlements and related expenses


220


62


313


82


Acquisition-related costs


212


-


239


-



Total operating expenses


120,672


115,620


238,593


231,135












Operating income


11,506


11,395


23,077


22,483












Other (expense) income:










Interest expense


(1,527)


(1,789)


(3,328)


(3,561)


Interest income


50


5


71


9


Other, net


188


(179)


218


(249)



Total other expense, net


(1,289)


(1,963)


(3,039)


(3,801)












Income from continuing operations before income taxes


10,217


9,432


20,038


18,682

Income tax expense


2,109


2,739


4,749


5,763

Net income from continuing operations


8,108


6,693


15,289


12,919












Loss from discontinued operations, net of taxes


(133)


(226)


(236)


(273)












Net income


$     7,975


$     6,467


$   15,053


$   12,646












BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING


46,204


48,103


46,146


48,279












Basic net income (loss) per share (1)










Continuing operations


$       0.18


$       0.14


$       0.33


$       0.27


Discontinued operations


-


-


(0.01)


(0.01)


Net income per share


$       0.17


$       0.13


$       0.33


$       0.26












DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING


46,720


48,551


46,618


48,740












Diluted net income (loss) per share (1)










Continuing operations


$       0.17


$       0.14


$       0.33


$       0.27


Discontinued operations


-


-


(0.01)


(0.01)


Net income per share


$       0.17


$       0.13


$       0.32


$       0.26












(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)

(unaudited)










June 30,


December 31,




2013


2012







ASSETS




CURRENT ASSETS





Cash and equivalents

$   25,291


$    20,976


Accounts receivable (less allowances of $796 and $834, respectively)

85,120


75,149


Prepaid expenses and other current assets

20,584


18,245


Income taxes receivable

3,030


1,272


Deferred income taxes, net

11,224


9,852



Total current assets

145,249


125,494







PROPERTY AND EQUIPMENT, NET

103,907


104,613







OTHER ASSETS





Goodwill

294,426


297,773


Intangibles, net of amortization

6,608


7,384


Deferred income taxes, net

2,473


2,597


Other assets

7,085


7,942



TOTAL ASSETS

$ 559,748


$  545,803







LIABILITIES AND SHAREHOLDERS' EQUITY




CURRENT LIABILITIES





Accounts payable

$   55,090


$   48,166


Income taxes payable

277


1,116


Accrued taxes, other than income taxes

5,272


4,333


Accrued expenses

29,507


32,093


Current maturities of long-term debt and capital lease obligations

1,838


3,137


Accrued restructuring costs

350


1,040


Deferred income taxes, net

1


15



Total current liabilities

92,335


89,900







LONG-TERM LIABILITIES





Long-term debt and capital lease obligations

176,716


179,832


Accrued restructuring costs

68


117


Accrued expenses

14,606


15,541


Deferred income taxes, net

12,739


8,209



Total long-term liabilities

204,129


203,699







SHAREHOLDERS' EQUITY





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





48,181,655 and 47,745,592 shares issued and outstanding, respectively

482


477


Additional paid-in capital

455,673


453,621


Accumulated other comprehensive income

7,072


13,102


Accumulated deficit

(199,943)


(214,996)



Total shareholders' equity

263,284


252,204



TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$ 559,748


$  545,803

 

PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)
















Six Months Ended







June 30,







2013


2012










CASH FLOWS FROM OPERATING ACTIVITIES







Net income


$ 15,053


$ 12,646



Loss from discontinued operations, net of taxes


236


273




Net income from continuing operations


15,289


12,919


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







Depreciation


16,570


15,956



Amortization


854


2,432



Amortization of debt issuance costs


296


295



Net legal settlements and related expenses


313


82



Payments for legal settlements and related expenses


(91)


(17)



Deferred income taxes


1,741


3,342



Restructuring costs


201


113



Payments for restructuring costs


(922)


(1,152)



Asset impairments


198


45



Equity-based compensation


3,636


4,184



Excess tax benefits from share-based payment arrangements


(358)


(264)



Provision for doubtful accounts


360


576



Changes in working capital


(8,189)


(9,344)





Net cash provided by operating activities from continuing operations


29,898


29,167





Net cash used in operating activities from discontinued operations


(257)


(630)





Net cash provided by operating activities


29,641


28,537










CASH FLOWS FROM INVESTING ACTIVITIES







Capital expenditures


(17,307)


(15,018)



Other investing activities


569


(249)



Business acquisitions, net of cash acquired


(1,194)


(97)





Net cash used in investing activities from continuing operations


(17,932)


(15,364)





Net cash used in investing activities from discontinued operations


-


(60)





Net cash used in investing activities


(17,932)


(15,424)



















CASH FLOWS FROM FINANCING ACTIVITIES







Principal payments under borrowing arrangements


(31,164)


(35,140)



Proceeds from borrowing arrangements


26,000


24,729



Payments of debt issuance costs


-


(23)



Excess tax benefits of share-based payment arrangements


358


264



Purchase and retirement of treasury stock, at cost


(1,758)


(11,437)



Exercise of stock options


-


853





Net cash used in financing activities from continuing operations


(6,564)


(20,754)





Net cash used in financing activities from discontinued operations


-


-





Net cash used in financing activities


(6,564)


(20,754)










Effect of exchange rate changes on cash and equivalents


(830)


(391)










NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS


4,315


(8,032)

CASH AND EQUIVALENTS, beginning of period


20,976


32,033

CASH AND EQUIVALENTS, end of period


$ 25,291


$ 24,001

 

PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(in thousands, except per share data)

(unaudited)


















Three Months Ended


Six Months Ended






June 30,


June 30,






2013


2012


2013


2012









Non-GAAP Operating Income (1)










Operating income, as reported


$ 11,506


$ 11,395


$ 23,077


$ 22,483


Restructuring costs


131


(48)


201


113


Excise and sales tax expense


77


118


77


118


Asset impairments


54


20


198


45


Net legal settlements and related expenses


220


62


313


82


Acquisition-related costs


212


-


239


-


Equity-based compensation


1,962


2,102


3,636


4,184


Amortization


392


1,212


854


2,432



Non-GAAP operating income


$ 14,554


$ 14,861


$ 28,595


$ 29,457













Non-GAAP Net Income from Continuing Operations (1)










Net income from continuing operations, as reported


$ 8,108


$  6,693


$ 15,289


$ 12,919


Elimination of non-recurring tax adjustments


(905)


(91)


(1,162)


158


Restructuring costs


92


(34)


142


79


Excise and sales tax expense


54


83


54


83


Asset impairments


38


14


140


32


Net legal settlements and related expenses


155


43


221


57


Acquisition-related costs


149


-


168


-


Equity-based compensation


1,383


1,471


2,563


2,929


Amortization


276


848


602


1,702



Non-GAAP net income from continuing operations


$ 9,350


$   9,027


$ 18,017


$ 17,959













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










Diluted net income per share from continuing operations, as reported


$   0.17


$     0.14


$     0.33


$     0.27


Elimination of non-recurring tax adjustments


(0.02)


-


(0.02)


-


Restructuring costs


-


-


-


-


Excise and sales tax expense


-


-


-


-


Asset impairments


-


-


-


-


Net legal settlements and related expenses


-


-


-


-


Acquisition-related costs


-


-


-


-


Equity-based compensation


0.03


0.03


0.05


0.06


Amortization


0.01


0.02


0.01


0.03



Non-GAAP diluted EPS from continuing operations


$   0.20


$   0.19


$   0.39


$   0.37

























(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, asset impairments, net legal settlements and related expenses and acquisition-related costs. 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

(unaudited)














Prior Year Quarter Constant Currency Adjustments (3)




















Impact of

fluctuations in foreign currency exchange rates











Q2 - 13 (Constant currency)



Q2 - 13 (Actual)









(in thousands, except per share data)



















Net Revenues

$ 133,199


$  (1,021)


$  132,178






North America Net Revenue

$   86,538


$       (46)


$    86,492






Europe Net Revenue

$   28,941


$         23


$    28,964






Asia Pacific Net Revenue

$   17,720


$     (998)


$    16,722






Non-GAAP Operating Income

$   14,902


$     (348)


$    14,554






Non-GAAP Net Income from Continuing Operations

$     9,274


$        76


$      9,350






Non-GAAP Diluted EPS from Continuing Operations

$       0.20


$           -


$       0.20


















(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 (Q2 - 12) average exchange rates.



























Sequential Quarter Constant Currency Adjustments (4)




















Impact of

fluctuations in foreign currency exchange rates











Q2 - 13 (Constant currency)



Q2 - 13 (Actual)









(in thousands)




















Net Revenues

$ 132,958


$ (780)


$ 132,178


















(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 (Q1 - 13) average exchange rates.














Organic Growth (5)

































Impact of

fluctuations in foreign currency exchange rates











June 30,
2012



Organic net revenue growth


June 30,
2013


Organic net revenue growth rate





(in thousands, except percentages)
















Net Revenues, Three Months Ended

$ 127,015


$ (1,021)


$ 6,184


$ 132,178


4.9%



Net Revenues, Six Months Ended

$ 253,618


$ (1,753)


$ 9,805


$ 261,670


3.9%














(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 close any acquisitions during the period presented.

 

Investor Calls
Sean O'Brien
Executive Vice President
Strategy & Communications
(404) 262-8462

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

 

SOURCE PGi



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