PGi Reports Third Quarter 2012 Results: Organic Revenues Grew 7.0%* to $125.9M; Non-GAAP Diluted EPS from Continuing Operations $0.18*

Oct 18, 2012, 16:05 ET from Premiere Global Services, Inc.

ATLANTA, Oct. 18, 2012 /PRNewswire/ -- Premiere Global Services, Inc. (NYSE: PGI), a global leader in virtual meetings for over 20 years, today announced results for the third quarter ended September 30, 2012.

In the third quarter of 2012, net revenues increased to $125.9 million, compared to $119.2 million in the third quarter of 2011.  Diluted EPS from continuing operations was $0.12 and non-GAAP diluted EPS from continuing operations was $0.18* in the third quarter of 2012, compared to diluted EPS from continuing operations of $0.12 and non-GAAP diluted EPS from continuing operations of $0.18* in the third quarter of 2011.  

"We maintained solid trends across our global business in the third quarter, despite the typical seasonal pressure of the summer months," said Boland T. Jones, PGi founder, chairman and CEO. "Sales of iMeet® and GlobalMeet® continue to grow, as a result of an increasing demand by business professionals looking for simpler, more intuitive ways to meet and collaborate online, wherever and whenever they want. We remain optimistic in our outlook for the fourth quarter and for 2013, as we continue to grow and transition PGi toward a software as a service model."

Third Quarter 2012 Accomplishments

  • Reported 7.0% organic revenue growth as compared to the third quarter of 2011;
  • Grew total meetings hosted by over 30% as compared to the third quarter of 2011;
  • Grew the annual revenue run-rate from iMeet and GlobalMeet by greater than 17% as compared to the second quarter of 2012;
  • PGi recognized as the Silver Stevie® Award winner for "Most Innovative Tech Company of the Year" at the 2012 American Business Awards℠; and
  • Repurchased nearly 800,000 shares of our common stock in the open market under our share repurchase plan.

Nine Month Results

In the first nine months of 2012, net revenues totaled $379.5 million, compared to $355.1 million in the first nine months of 2011.  Diluted EPS from continuing operations was $0.38 and non-GAAP diluted EPS from continuing operations was $0.55* in the first nine months of 2012, compared to diluted EPS from continuing operations of $0.27 and non-GAAP diluted EPS from continuing operations of $0.44* in the first nine months of 2011. 

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 2012 will be in the range of $504-$507 million and non-GAAP diluted EPS from continuing operations will be in the range of $0.73-$0.74*.

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:  (800) 776-0487 (U.S. and Canada) or (913) 312-0658 (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 more than 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 more than 35,000 enterprise customers, including 75% of the Fortune 100.  In the last five years, we have hosted more than 725 million people from 137 countries in over 165 million meetings.

For more information, visit us 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.

Investor Calls

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

  

PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

 Three Months Ended

 Nine Months Ended  

 September 30,  

 September 30,  

2012

2011

2012

2011

 (Unaudited) 

 (Unaudited) 

Net revenues

$ 125,892

$ 119,184

$ 379,510

$ 355,099

Operating expenses: 

Cost of revenues (exclusive of

depreciation and amortization

shown separately below)

53,806

49,938

161,044

146,595

Selling and marketing

31,725

32,167

98,756

102,526

General and administrative

(exclusive of expenses shown separately below)

15,855

14,411

47,070

42,409

Research and development

3,703

2,934

10,608

8,737

Excise and sales tax expense

-

331

118

352

Depreciation

8,251

7,737

24,207

23,172

Amortization

807

1,612

3,239

5,061

Restructuring costs

590

38

703

38

Asset impairments

696

62

741

116

Net legal settlements and

related expenses

1,769

43

1,851

115

Total operating expenses

117,202

109,273

348,337

329,121

Operating income

8,690

9,911

31,173

25,978

Other (expense) income:

Interest expense

(1,843)

(2,192)

(5,404)

(6,381)

Interest income

10

7

19

34

Other, net

(282)

143

(531)

(235)

Total other expense

(2,115)

(2,042)

(5,916)

(6,582)

Income from continuing operations

before income taxes

6,575

7,869

25,257

19,396

Income tax expense

855

2,047

6,618

5,789

Net income from continuing operations

5,720

5,822

18,639

13,607

(Loss) income from discontinued

operations, net of taxes

(61)

6,735

(334)

6,740

Net income

$      5,659

$   12,557

$   18,305

$   20,347

BASIC WEIGHTED-AVERAGE

SHARES OUTSTANDING

47,297

49,033

47,949

49,982

Basic net income (loss) per share (1)

Continuing operations

$        0.12

$        0.12

$        0.39

$        0.27

Discontinued operations

-

0.14

(0.01)

0.13

Net income per share

$        0.12

$        0.26

$        0.38

$        0.41

DILUTED WEIGHTED-AVERAGE

SHARES OUTSTANDING

47,800

49,366

48,424

50,308

Diluted net income (loss) per share (1)

Continuing operations

$        0.12

$        0.12

$        0.38

$        0.27

Discontinued operations

-

0.14

(0.01)

0.13

Net income per share

$        0.12

$        0.25

$        0.38

$        0.40

(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)

September 30,

December 31,

2012

2011

(Unaudited)

ASSETS

CURRENT ASSETS

Cash and equivalents

$           33,144

$           32,033

Accounts receivable (less allowances of $749 and $613,

respectively)

84,974

72,518

Prepaid expenses and other current assets

18,116

13,906

Income taxes receivable

661

1,739

Deferred income taxes, net

1,702

1,090

Total current assets

138,597

121,286

PROPERTY AND EQUIPMENT, NET

102,609

103,449

OTHER ASSETS

Goodwill

297,436

295,690

Intangibles, net of amortization

7,962

10,906

Deferred income taxes, net

4,290

3,474

Other assets

8,690

8,016

TOTAL ASSETS

$         559,584

$        542,821

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable

$           46,770

$           42,589

Income taxes payable

158

962

Accrued taxes, other than income taxes

2,975

3,611

Accrued expenses

28,583

28,999

Current maturities of long-term debt and capital lease obligations 

3,926

3,845

Accrued restructuring costs

2,205

2,287

Deferred income taxes, net

72

386

Total current liabilities

84,689

82,679

LONG-TERM LIABILITIES

Long-term debt and capital lease obligations 

200,147

195,963

Accrued restructuring costs

353

1,410

Accrued expenses

17,074

17,249

Deferred income taxes, net

5,713

1,783

Total long-term liabilities

223,287

216,405

SHAREHOLDERS' EQUITY

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

48,431,753 and 50,144,703 shares issued and outstanding,

respectively

484

501

Additional paid-in capital

462,368

475,013

Accumulated other comprehensive gain

13,037

10,809

Accumulated deficit

(224,281)

(242,586)

Total shareholders' equity

251,608

243,737

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$         559,584

$        542,821

  

PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (in thousands)

Nine Months Ended

September 30, 

2012

2011

(Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES

Net income 

$ 18,305

$ 20,347

Loss (income) from discontinued operations, net of taxes

334

(6,740)

 Net income from continuing operations 

18,639

13,607

Adjustments to reconcile net income to net cash provided by operating

activities:

Depreciation

24,207

23,172

Amortization

3,239

5,061

Amortization of debt issuance costs 

443

702

Net legal settlements and related expenses

1,851

36

Payments for legal settlements and related expenses

(101)

(36)

Deferred income taxes

2,907

1,411

Restructuring costs

703

38

Payments for restructuring costs 

(1,887)

(5,673)

Asset impairments

741

116

Equity-based compensation

6,113

5,209

Excess tax benefits from share-based payment arrangements

(267)

-

Provision for doubtful accounts

828

456

Changes in working capital

(14,412)

(4,528)

Net cash provided by operating activities from continuing

operations

43,004

39,571

Net cash used in operating activities from discontinued

operations

(668)

(591)

Net cash provided by operating activities

42,336

38,980

CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditures

(24,154)

(23,304)

Other investing activities

(1,479)

(1,222)

Business dispositions

-

1,903

Net cash used in investing activities from continuing operations

(25,633)

(22,623)

Net cash used in investing activities from discontinued

operations

(60)

-

Net cash used in investing activities

(25,693)

(22,623)

CASH FLOWS FROM FINANCING ACTIVITIES

Principal payments under borrowing arrangements

(53,011)

(50,067)

Proceeds from borrowing arrangements

55,529

68,971

Payments of debt issuance costs

(23)

-

Excess tax benefits of share-based payment arrangements

267

-

Purchase of treasury stock, at cost

(19,358)

(20,911)

Exercise of stock options

932

-

Net cash used in financing activities from continuing operations

(15,664)

(2,007)

Net cash used in financing activities from discontinued

operations

-

-

Net cash used in financing activities

(15,664)

(2,007)

Effect of exchange rate changes on cash and equivalents

132

(437)

NET INCREASE IN CASH AND EQUIVALENTS

1,111

13,913

CASH AND EQUIVALENTS, beginning of period

32,033

15,101

CASH AND EQUIVALENTS, end of period

$ 33,144

$ 29,014

  

PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(in thousands, except per share data)

Three Months Ended

Nine Months Ended 

September 30, 

September 30, 

2012

2011

2012

2011

(Unaudited)

(Unaudited)

Non-GAAP Operating Income (1)

Operating income, as reported 

$   8,690

$   9,911

$ 31,173

$ 25,978

Restructuring costs 

590

38

703

38

Excise and sales tax expense

-

331

118

352

Asset impairments

696

62

741

116

Net legal settlements and related

expenses

1,769

43

1,851

115

Equity-based compensation

1,929

1,622

6,113

5,209

Amortization

807

1,612

3,239

5,061

    Non-GAAP operating income

$ 14,481

$ 13,619

$ 43,938

$ 36,869

Non-GAAP Net Income from

Continuing Operations (1)

Net income from continuing

operations, as reported

$   5,720

$   5,822

$ 18,639

$ 13,607

Elimination of non-recurring tax

adjustments

(1,118)

-

(959)

451

Restructuring costs

413

28

492

28

Excise and sales tax expense

-

245

83

255

Excise and sales tax interest

-

118

-

116

Asset impairments

487

46

519

84

Net legal settlements and related

expenses

1,238

32

1,296

83

Equity-based compensation

1,350

1,200

4,279

3,775

Amortization

565

1,193

2,267

3,668

    Non-GAAP net income from

 continuing operations

$   8,655

$   8,684

$ 26,616

$ 22,067

Non-GAAP Diluted EPS from

Continuing Operations (1) (2)

Diluted net income per share from

continuing operations, as reported

$      0.12

$      0.12

$      0.38

$      0.27

Elimination of non-recurring tax

adjustments

(0.02)

-

(0.02)

0.01

Restructuring costs

0.01

-

0.01

-

Excise and sales tax expense

-

0.01

-

0.01

Excise and sales tax interest

-

-

-

-

Asset impairments

0.01

-

0.01

-

Net legal settlements and related

expenses

0.03

-

0.03

-

Equity-based compensation

0.03

0.02

0.09

0.08

Amortization

0.01

0.02

0.05

0.07

    Non-GAAP diluted EPS from

 continuing operations

$      0.18

$      0.18

$      0.55

$      0.44

(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 interest, asset

impairments and net legal settlements and related expenses. 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

Q3 - 12 (Constant currency)

fluctuations in foreign currency exchange rates

Q3 - 12 (Actual)

(Unaudited, in thousands, except per share data)

Net Revenues

$          127,558

$                     (1,666)

$      125,892

North America Net Revenue

$            84,036

$                          (48)

$        83,988

Europe Net Revenue

$            26,988

$                     (1,446)

$        25,542

Asia Pacific Net Revenue

$            16,534

$                        (172)

$        16,362

Non-GAAP Operating Income

$            14,317

$                          164

$        14,481

Non-GAAP Net Income from Continuing Operations

$               8,782

$                        (127)

$          8,655

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 (Q3 - 11) average exchange rates.

Sequential Quarter Constant Currency Adjustments (4)

Impact of 

Q3 - 12 (Constant currency)

fluctuations in foreign currency exchange rates

Q3 - 12 (Actual)

(Unaudited, in thousands)

Net Revenues

$          125,809

$                            83

$     125,892

(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 (Q2 - 12) average exchange rates.

Organic Growth (5)

Impact of

September 30, 2011

fluctuations in foreign currency exchange rates

Organic net revenue growth

September 30, 2012

Organic net revenue growth rate

(Unaudited, in thousands, except percentages)

Net Revenues, Three Months Ended

$          119,184

$                     (1,666)

$          8,374

$         125,892

7.0%

 Net Revenues, Nine Months Ended

$          355,099

$                     (3,865)

$        28,276

$         379,510

8.0%

(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.

  

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

 

 

 

SOURCE Premiere Global Services, Inc.



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