PGi Reports Third Quarter 2013 Results: Revenues $130.6M, Non-GAAP Diluted EPS from Continuing Operations $0.20*; Company Sets Quarterly Sales Record of $4.0M in New SaaS-based Collaboration Products

30 Oct, 2013, 16:05 ET from Premiere Global Services, Inc.

ATLANTA, Oct. 30, 2013 /PRNewswire/ -- Premiere Global Services, Inc. (NYSE: PGI), a global leader in collaboration and virtual meetings for over 20 years, today announced results for the third quarter ended September 30, 2013.

In the third quarter of 2013, net revenues totaled $130.6 million, compared to $125.9 million in the third quarter of 2012.  Diluted EPS from continuing operations was $0.10 in the third quarter of 2013, compared to diluted EPS from continuing operations of $0.12 in the third quarter of 2012.  Non-GAAP diluted EPS from continuing operations was $0.20* in the third quarter of 2013, compared to non-GAAP diluted EPS from continuing operations of $0.18* in the third quarter of 2012. 

"We are pleased with the progress we made during the third quarter, with record sales of our new SaaS-based collaboration products," said Boland T. Jones, PGi founder, chairman and CEO. "Our top priority is to continue to drive profitable growth and increase shareholder value by converting our business and our customers to PGi's higher-value online and mobile meeting applications on our new SaaS platform. At the same time, we continue to look for opportunities to grow our share of the global collaboration market through strategic acquisitions and continuing investments in our go-to-market strategy."

Third Quarter 2013 Accomplishments

  • Grew revenue from PGi SaaS products over 65% as compared to the third quarter of 2012;
  • Exited the quarter with an annual revenue run-rate of nearly $33 million from SaaS products;
  • Acquired ACT Teleconferencing, a global provider of integrated conferencing solutions with operations in eight countries in North America, Europe and Asia Pacific;
  • Increased the borrowing capacity, extended the term and improved the pricing and covenants of PGi's credit facility, providing additional flexibility to execute its strategic growth plans, while also lowering its cost of capital;
  • Announced iMeet® accessibility via the SAP® Business ByDesign® solution, making it available to even more fast-growing, mid-market businesses and subsidiaries of large enterprises working with SAP around the world;
  • Announced a managed services agreement with Ingram Micro Inc., the world's largest technology distributor and a global leader in IT supply-chain, adding iMeet to the Ingram Micro Cloud Marketplace; and
  • Launched GlobalMeet® in the Google Play™ Store for Android smartphones, giving users all the tools they need to host and manage meetings wherever they are with their Android phone.

Nine Month Results In the first nine months of 2013, net revenues totaled $392.2 million, compared to $379.5 million in the first nine months of 2012.  Diluted EPS from continuing operations was $0.43 in the first nine months of 2013, compared to diluted EPS from continuing operations of $0.38 in the same period in 2012.  Non-GAAP diluted EPS from continuing operations was $0.58* in the first nine months of 2013, compared to non-GAAP diluted EPS from continuing operations of $0.55* in the first nine 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.

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 $523-$525 million and non-GAAP diluted EPS from continuing operations will be in the range of $0.78-$0.79*.

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) 244-2417 (U.S. and Canada) or (913) 312-1516 (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. 

All trademarks and registered trademarks are the property of their respective owners.

About Premiere Global Services, Inc. │ PGi PGi has been a global leader in collaboration and 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.

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

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 the date of the statement, if a different date, 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  

 Nine Months Ended  

 September 30, 

 September 30, 

2013

2012

2013

2012

Net revenues

$  130,570

$    125,892

$  392,240

$    379,510

Operating expenses: 

Cost of revenues (exclusive of depreciation and amortization shown

separately below)

56,203

53,806

168,566

161,044

Selling and marketing

33,379

31,725

101,924

98,756

General and administrative (exclusive of expenses

shown separately below)

15,605

15,855

47,284

47,070

Research and development

4,145

3,703

11,699

10,608

Excise and sales tax expense

1

-

78

118

Depreciation

8,459

8,251

25,029

24,207

Amortization

855

807

1,709

3,239

Restructuring costs

240

590

441

703

Asset impairments

18

696

216

741

Net legal settlements and related expenses

278

1,769

591

1,851

Acquisition-related costs

2,805

-

3,044

-

Total operating expenses

121,988

117,202

360,581

348,337

Operating income

8,582

8,690

31,659

31,173

Other (expense) income:

Interest expense

(1,599)

(1,843)

(4,927)

(5,404)

Interest income

22

10

93

19

Other, net

(88)

(282)

130

(531)

Total other expense, net

(1,665)

(2,115)

(4,704)

(5,916)

Income from continuing operations before income taxes

6,917

6,575

26,955

25,257

Income tax expense

2,072

855

6,821

6,618

Net income from continuing operations

4,845

5,720

20,134

18,639

Loss from discontinued operations, net of taxes

(182)

(61)

(418)

(334)

Net income

$       4,663

$         5,659

$     19,716

$       18,305

BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING

46,313

47,297

46,202

47,949

Basic net income (loss) per share (1)

Continuing operations

$         0.10

$           0.12

$         0.44

$           0.39

Discontinued operations

-

-

(0.01)

(0.01)

Net income per share

$         0.10

$           0.12

$         0.43

$           0.38

DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING

46,818

47,800

46,685

48,424

Diluted net income (loss) per share (1)

Continuing operations

$         0.10

$           0.12

$         0.43

$           0.38

Discontinued operations

-

-

(0.01)

(0.01)

Net income per share

$         0.10

$           0.12

$         0.42

$           0.38

(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)

September 30, 

December 31, 

2013

2012

ASSETS

CURRENT ASSETS

Cash and equivalents

$           37,072

$           20,976

Accounts receivable (less allowances of $753 and $834, respectively)

86,646

75,149

Prepaid expenses and other current assets

21,103

18,245

Income taxes receivable

3,644

1,272

Deferred income taxes, net

11,197

9,852

Total current assets

159,662

125,494

PROPERTY AND EQUIPMENT, NET

107,597

104,613

OTHER ASSETS

Goodwill

310,908

297,773

Intangibles, net of amortization

43,108

7,384

Deferred income taxes, net

2,469

2,597

Other assets

10,375

7,942

TOTAL ASSETS

$         634,119

$         545,803

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable

$           56,951

$           48,166

Income taxes payable

554

1,116

Accrued taxes, other than income taxes

12,959

4,333

Accrued expenses

33,307

32,093

Current maturities of long-term debt and capital lease obligations 

2,124

3,137

Accrued restructuring costs

384

1,040

Deferred income taxes, net

30

15

Total current liabilities

106,309

89,900

LONG-TERM LIABILITIES

Long-term debt and capital lease obligations 

223,142

179,832

Accrued restructuring costs

49

117

Accrued expenses

17,109

15,541

Deferred income taxes, net

15,334

8,209

Total long-term liabilities

255,634

203,699

SHAREHOLDERS' EQUITY

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

48,349,874 and 47,745,592 shares issued and outstanding, respectively

484

477

Additional paid-in capital

457,572

453,621

Accumulated other comprehensive income

9,400

13,102

Accumulated deficit

(195,280)

(214,996)

Total shareholders' equity

272,176

252,204

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$         634,119

$         545,803

 

PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (in thousands)

 (unaudited)

Nine Months Ended

September 30, 

2013

2012

CASH FLOWS FROM OPERATING ACTIVITIES

Net income 

$       19,716

$       18,305

Loss from discontinued operations, net of taxes

418

334

 Net income from continuing operations 

20,134

18,639

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

Depreciation

25,029

24,207

Amortization

1,709

3,239

Amortization of debt issuance costs 

450

443

Net legal settlements and related expenses

591

1,851

Payments for legal settlements and related expenses

(272)

(101)

Deferred income taxes

2,182

2,907

Restructuring costs

441

703

Payments for restructuring costs 

(1,158)

(1,887)

Asset impairments

216

741

Equity-based compensation

5,694

6,113

Excess tax benefits from share-based payment arrangements

(360)

(267)

Provision for doubtful accounts

214

828

Changes in working capital

1,623

(14,412)

Net cash provided by operating activities from continuing operations

56,493

43,004

Net cash used in operating activities from discontinued operations

(493)

(668)

Net cash provided by operating activities

56,000

42,336

CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditures

(24,794)

(24,154)

Business acquisitions, net of cash acquired

(50,873)

-

Other investing activities

(457)

(1,479)

Net cash used in investing activities from continuing operations

(76,124)

(25,633)

Net cash used in investing activities from discontinued operations

-

(60)

Net cash used in investing activities

(76,124)

(25,693)

CASH FLOWS FROM FINANCING ACTIVITIES

Principal payments under borrowing arrangements

(55,494)

(53,011)

Proceeds from borrowing arrangements

94,750

55,529

Payments of debt issuance costs

(1,253)

(23)

Excess tax benefits of share-based payment arrangements

360

267

Purchase and retirement of treasury stock, at cost

(2,087)

(19,358)

Exercise of stock options

-

932

Net cash provided by (used in) financing activities from continuing operations

36,276

(15,664)

Net cash used in financing activities from discontinued operations

-

-

Net cash provided by (used in) financing activities

36,276

(15,664)

Effect of exchange rate changes on cash and equivalents

(56)

132

NET INCREASE IN CASH AND EQUIVALENTS

16,096

1,111

CASH AND EQUIVALENTS, beginning of period

20,976

32,033

CASH AND EQUIVALENTS, end of period

$       37,072

$       33,144

 

PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(in thousands, except per share data)

(unaudited)

 Three Months Ended  

 Nine Months Ended  

 September 30, 

 September 30, 

2013

2012

2013

2012

Non-GAAP Operating Income (1)

Operating income, as reported 

$        8,582

$        8,690

$      31,659

$      31,173

Restructuring costs 

240

590

441

703

Excise and sales tax expense

1

-

78

118

Asset impairments

18

696

216

741

Net legal settlements and related expenses

278

1,769

591

1,851

Acquisition-related costs

2,805

-

3,044

-

Equity-based compensation

2,058

1,929

5,694

6,113

Amortization

855

807

1,709

3,239

Non-GAAP operating income

$      14,837

$      14,481

$      43,432

$      43,938

Non-GAAP Net Income from Continuing Operations (1)

Net income from continuing operations, as reported

$        4,845

$        5,720

$      20,134

$      18,639

Elimination of non-recurring tax adjustments

31

(1,118)

(1,131)

(959)

Restructuring costs

169

413

311

492

Excise and sales tax expense

1

-

55

83

Asset impairments

13

487

152

519

Net legal settlements and related expenses

196

1,238

417

1,296

Acquisition-related costs

1,978

-

2,146

-

Equity-based compensation

1,451

1,350

4,014

4,279

Amortization

603

565

1,205

2,267

Non-GAAP net income from continuing operations

$        9,287

$        8,655

$      27,303

$      26,616

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

Diluted net income per share from continuing operations, as reported

$           0.10

$           0.12

$           0.43

$          0.38

Elimination of non-recurring tax adjustments

-

(0.02)

(0.02)

(0.02)

Restructuring costs

-

0.01

0.01

0.01

Excise and sales tax expense

-

-

-

-

Asset impairments

-

0.01

-

0.01

Net legal settlements and related expenses

-

0.03

0.01

0.03

Acquisition-related costs

0.04

-

0.05

-

Equity-based compensation

0.03

0.03

0.09

0.09

Amortization

0.01

0.01

0.03

0.05

Non-GAAP diluted EPS from continuing operations

$           0.20

$           0.18

$           0.58

$          0.55

(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)

Q3 - 13

(Constant

currency)

Impact of

fluctuations in

foreign currency

exchange rates

Q3 - 13

(Actual)

(in thousands, except per share data)

Net Revenues

$          131,911

$                     (1,341)

$     130,570

North America Net Revenue

$            85,802

$                        (125)

$        85,677

Europe Net Revenue

$            27,211

$                          380

$        27,591

Asia Pacific Net Revenue

$            18,898

$                     (1,596)

$        17,302

Non-GAAP Operating Income

$            15,141

$                        (304)

$        14,837

Non-GAAP Net Income from Continuing Operations

$               9,339

$                           (52)

$          9,287

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 (Q3 - 12) average exchange rates.

Sequential Quarter Constant Currency Adjustments (4)

Q3 - 13

(Constant

currency)

Impact of

fluctuations in

foreign currency

exchange rates

Q3 - 13

(Actual)

(in thousands)

Net Revenues

$          130,801

$                        (231)

$     130,570

(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 - 13)

average exchange rates.

Organic Growth (5)

September 30,

2012

Impact of

fluctuations in

foreign currency

exchange rates

Acquisitions

Organic net

revenue

growth

September 30,

2013

Organic net

revenue

growth rate

(in thousands, except percentages)

Net Revenues, Three Months Ended

$          125,892

$                     (1,341)

$          4,602

$              1,417

$         130,570

1.1%

 Net Revenues, Nine Months Ended

$          379,510

$                     (3,094)

$          4,602

$           11,222

$         392,240

3.0%

(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. 

 

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SOURCE Premiere Global Services, Inc.



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