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Press release from Business Wire

Premiere Global Services Reports Second Quarter 2010 Results: Revenues $144.6M, Non-GAAP Diluted EPS from Continuing Operations $0.20*

<p class=' bwtextaligncenter'> <i><b>Company Advances Its Transition to New Model with Expanded Beta of iMeet</b></i><sup><i><b>®</b></i></sup> </p>

Thursday, July 22, 2010

Premiere Global Services Reports Second Quarter 2010 Results: Revenues $144.6M, Non-GAAP Diluted EPS from Continuing Operations $0.20*16:10 EDT Thursday, July 22, 2010 ATLANTA (Business Wire) -- Premiere Global Services, Inc. (NYSE: PGI), a global meetings expert, today announced results for the second quarter ended June 30, 2010. Consolidated net revenues totaled $144.6 million in the second quarter of 2010, including $110.9 million from the Company's PGiMeet solutions. In the second quarter of 2010, diluted EPS from continuing operations was $0.07, and non-GAAP diluted EPS from continuing operations was $0.20.* In the second quarter of 2009, consolidated net revenues totaled $153.9 million, including $116.7 million from the Company's PGiMeet solutions, diluted EPS from continuing operations was $0.14, and non-GAAP diluted EPS from continuing operations was $0.25.* Results for 2009 are adjusted to reflect the Company's email marketing business as discontinued operations. “Our long-term growth drivers remain strong, though our current business trends continue to reflect the weight of a sluggish global economy,” said Boland T. Jones, Founder, Chairman and CEO of Premiere Global Services, Inc. “We continue to aggressively manage our business, while at the same time investing in our strategy of transitioning PGi toward an online meetings company, which we believe will deliver higher value to our customers and shareholders. “We are excited about the announcement of our expanded beta of iMeet®, which we designed to provide a more enjoyable, intuitive and productive meeting experience for our users. iMeet is the first of our online meetings applications to be deployed on PGi's next-generation collaboration platform.” Six Month Results Consolidated net revenues totaled $291.0 million in the six months ended June 30, 2010, including $223.4 million from the Company's PGiMeet solutions. In the first half of 2010, diluted EPS from continuing operations was $0.20, and non-GAAP diluted EPS from continuing operations was $0.38.* In the six months ended June 30, 2009, consolidated net revenues totaled $309.0 million, including $234.6 million from the Company's PGiMeet solutions. In the first half of 2009, diluted EPS from continuing operations was $0.33, and non-GAAP diluted EPS from continuing operations was $0.52.* 2010 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. The Company assumes no duty to update any forward-looking statements made in this press release. Foreign currency exchange rates have changed meaningfully since the Company initially provided its financial outlook for 2010. Additionally, volume and pricing trends in the Company's customer base continue to be affected by current economic conditions, including high levels of global unemployment and reduced levels of business activity. Based on current trends and foreign currency exchange rates, the Company now anticipates consolidated net revenues will be in the range of $568-$576 million and non-GAAP diluted EPS from continuing operations will be in the range of $0.68-$0.71* in 2010, including marketing and advertising costs associated with the launch of its new collaboration applications. The Company will host a conference call this afternoon 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) 211-4435 (U.S. and Canada) or (913) 312-0688 (International). The conference call will simultaneously be webcast. Please visit www.pgi.com for webcast details, as well as the webcast archive, replay details 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 consolidated net revenues, segment net revenues and certain solutions revenue, 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 The world collaborates with PGi. Our advanced meeting, conferencing and collaboration solutions energize people and organizations to connect more meaningfully and work together more productively. Our customers include more than 50,000 companies and nearly 90% of the Fortune 500. Every month, 12 million people around the world use PGi's advanced solutions and next-generation platform to meet, work and collaborate. PGi is headquartered in Atlanta, Georgia with operations in 24 countries worldwide. You can learn more 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; the development of alternatives to our services; general domestic and international economic, business or political conditions; risks associated with challenging global economic conditions or a prolonged recession, including customer consolidations, restructuring, bankruptcies or payment defaults; market acceptance of our new services and enhancements; our ability to complete acquisitions and successfully integrate acquired operations; concerns regarding the security of sending information over the Internet and public networks; our ability to upgrade our equipment or increase our network capacity; service interruptions; continued weakness in our legacy broadcast fax business; our dependence on telecommunications supply agreements; increased financial leverage; our dependence on our subsidiaries for cash flow; future write-downs of goodwill or other intangible assets; assessments of income, sales and other taxes for which we have not accrued; our ability to attract and retain key personnel; our ability to protect our proprietary technology and intellectual property rights; possible adverse results of pending or future litigation or infringement claims; federal, state or international legislative or regulatory changes, including further government regulations applicable to traditional telecommunications service providers; risks associated with international operations and fluctuations in currency exchange rates; changes in and the successful execution of restructuring and cost reduction initiatives and the market reaction thereto and other factors described from time to time in our press releases, reports and other filings with the SEC, including but not limited to the “Risk Factors” sections of our Annual Report on Form 10-K for the year ended December 31, 2009 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2010. All forward-looking statements attributable to us or a person acting on our behalf are expressly qualified in their entirety by this cautionary statement. PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share data)                           Three Months EndedSix Months EndedJune 30,June 30,   2010     2009     2010     2009   (Unaudited)(Unaudited)   Net revenues $ 144,586 $ 153,933 $ 290,991 $ 309,015 Operating expenses: Cost of revenues (exclusive of depreciation and amortization shown separately below) 62,092 65,628 122,649 130,998 Selling and marketing 33,638 35,727 72,042 72,715 General and administrative (exclusive of expenses shown separately below) 16,650 16,308 33,106 31,859 Research and development 4,560 4,105 9,487 7,983 Excise and sales tax expense 439 - 439 - Depreciation 9,995 9,091 19,875 17,722 Amortization 1,897 2,777 4,158 5,757 Restructuring costs 3,186 4,686 3,186 6,280 Asset impairments 1,887 - 1,942 - Net legal settlements and related expenses 44 161 192 161 Acquisition-related costs   142     231     316     571   Total operating expenses   134,530     138,714     267,392     274,046     Operating income   10,056     15,219     23,599     34,969     Other (expense) income: Interest expense (4,292 ) (3,767 ) (7,123 ) (7,792 ) Unrealized gain on change in fair value of interest rate swaps 490 1,145 974 2,086 Interest income 36 74 71 180 Other, net   (75 )   (153 )   (171 )   (91 ) Total other expense   (3,841 )   (2,701 )   (6,249 )   (5,617 )   Income from continuing operations before income taxes 6,215 12,518 17,350 29,352 Income tax expense   1,815     4,062     5,378     9,581   Net income from continuing operations   4,400     8,456     11,972     19,771     Loss on discontinued operations, net of taxes - (672 ) - (1,763 )         Net income $ 4,400   $ 7,784   $ 11,972   $ 18,008     BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING   58,367     58,840     58,294     58,834     Basic net income (loss) per share Continuing operations $ 0.08 $ 0.14 $ 0.21 $ 0.34 Discontinued operations   -     (0.01 )   -     (0.03 ) Net income per share $ 0.08   $ 0.13   $ 0.21   $ 0.31     DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING   58,774     59,439     58,655     59,400     Diluted net income (loss) per share Continuing operations $ 0.07 $ 0.14 $ 0.20 $ 0.33 Discontinued operations   -     (0.01 )   -     (0.03 ) Net income per share $ 0.07   $ 0.13   $ 0.20   $ 0.30     PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(in thousands, except share data)               June 30,December 31,   2010     2009   (Unaudited)ASSETSCURRENT ASSETS Cash and equivalents $ 42,310 $ 41,402 Accounts receivable (less allowances of $1,488 and $1,702, respectively) 93,433 89,906 Prepaid expenses and other current assets 14,872 10,735 Deferred income taxes, net   7,038     7,261   Total current assets   157,653     149,304     PROPERTY AND EQUIPMENT, NET 139,253 137,235   OTHER ASSETS Goodwill 347,798 354,609 Intangibles, net of amortization 19,998 24,840 Deferred income taxes, net 3,229 2,703 Restricted cash 97 103 Other assets   12,195     9,432   TOTAL ASSETS $ 680,223   $ 678,226     LIABILITIES AND SHAREHOLDERS' EQUITYCURRENT LIABILITIES Accounts payable $ 51,115 $ 51,502 Income taxes payable 4,573 4,507 Accrued taxes, other than income taxes 7,671 6,947 Accrued expenses 26,516 28,543 Current maturities of long-term debt and capital lease obligations 7,774 3,596 Accrued restructuring costs   6,785     7,765   Total current liabilities   104,434     102,860     LONG-TERM LIABILITIES Long-term debt and capital lease obligations 258,103 262,927 Accrued restructuring costs 3,671 5,392 Accrued expenses 19,520 17,133 Deferred income taxes, net   9,352     8,872   Total long-term liabilities   290,646     294,324     SHAREHOLDERS' EQUITY Common stock, $0.01 par value; 150,000,000 shares authorized, 60,041,135 and 59,392,311 shares issued and outstanding, respectively 600 594 Additional paid-in capital 548,524 544,896 Notes receivable, shareholder (1,868 ) (1,814 ) Accumulated other comprehensive (loss) gain (5,234 ) 6,217 Accumulated deficit   (256,879 )   (268,851 ) Total shareholders' equity   285,143     281,042   TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 680,223   $ 678,226     PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)                   Six Months EndedJune 30,   2010     2009   (Unaudited)CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 11,972 $ 18,008 Loss from discontinued operations, net of taxes   -     1,763   Net income from continuing operations 11,972 19,771 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 19,875 17,722 Amortization 4,158 5,757 Amortization of debt issuance costs 391 296 Write-off of unamortized debt issuance costs 161 - Net legal settlements and related expenses 192 161 Payments for legal settlements and related expenses (178 ) - Deferred income taxes, net of effect of acquisitions (460 ) (206 ) Restructuring costs 3,186 6,280 Payments for restructuring costs (5,817 ) (2,196 ) Asset impairments 1,942 - Equity-based compensation 4,958 5,809 Excess tax benefits from share-based payment arrangements (2 ) (308 ) Unrealized gain on change in fair value of interest rate swaps (974 ) (2,086 ) Provision for doubtful accounts 858 549 Changes in working capital   (7,619 )   (6,756 ) Net cash provided by operating activities from continuing operations   32,643     44,793   Net cash used in operating activities from discontinued operations   -     (1,792 ) Net cash provided by operating activities   32,643     43,001     CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (19,160 ) (22,750 ) Other investing activities - 103 Business acquisitions, net of cash acquired   (392 )   (7,856 ) Net cash used in investing activities from continuing operations   (19,552 )   (30,503 ) Net cash used in investing activities from discontinued operations   -     (1,934 ) Net cash used investing activities   (19,552 )   (32,437 )     CASH FLOWS FROM FINANCING ACTIVITIES Principal payments under borrowing arrangements (73,742 ) (116,996 ) Proceeds from borrowing arrangements 65,844 116,907 Payment of debt issuance costs (1,038 ) (5 ) Excess tax benefits from share-based payment arrangements 2 308 Purchase of treasury stock, at cost (999 ) (3,978 ) Exercise of stock options   -     554   Net cash used in financing activities   (9,933 )   (3,210 )   Effect of exchange rate changes on cash and equivalents   (2,250 )   407     NET INCREASE IN CASH AND EQUIVALENTS   908     7,761   CASH AND EQUIVALENTS, beginning of period   41,402     27,535   CASH AND EQUIVALENTS, end of period $ 42,310   $ 35,296     PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIESRECONCILIATION OF NON-GAAP FINANCIAL MEASURES(in thousands, except per share data)                       Three Months EndedSix Months EndedJune 30,June 30,   2010     2009     2010     2009   (Unaudited)(Unaudited)Non-GAAP Operating Income (1) Operating income, as reported $ 10,056 $ 15,219 $ 23,599 $ 34,969 Restructuring costs 3,186 4,686 3,186 6,280 Excise and sales tax expense 439 - 439 - Asset impairments 1,887 - 1,942 - Net legal settlements and related expenses 44 161 192 161 Equity-based compensation 2,251 2,873 4,958 5,809 Acquisition-related costs 142 231 316 571 Amortization   1,897     2,777     4,158     5,757   Non-GAAP operating income $ 19,902   $ 25,947   $ 38,790   $ 53,547     Non-GAAP Net Income from Continuing Operations (1) Net income from continuing operations, as reported $ 4,400 $ 8,456 $ 11,972 $ 19,771 Elimination of non-recurring tax adjustments (111 ) - - - Unrealized gain on change in fair value of interest rate swaps (338 ) (744 ) (672 ) (1,356 ) Restructuring costs 2,198 3,186 2,198 4,270 Excise and sales tax expense 303 - 303 - Excise and sales tax interest 448 - 448 - Asset impairments 1,302 - 1,340 - Net legal settlements and related expenses 30 109 132 109 Equity-based compensation 1,553 1,954 3,421 3,950 Acquisition-related costs 98 157 218 388 Amortization 1,309 1,888 2,869 3,915 Debt refinance costs   270     -     270     -   Non-GAAP net income from continuing operations $ 11,462   $ 15,006   $ 22,499   $ 31,047     Non-GAAP Diluted EPS from Continuing Operations (1) Diluted net income per share from continuing operations, as reported $ 0.07 $ 0.14 $ 0.20 $ 0.33 Elimination of non-recurring tax adjustments - - - - Unrealized gain on change in fair value of interest rate swaps (0.01 ) (0.01 ) (0.01 ) (0.02 ) Restructuring costs 0.04 0.05 0.04 0.07 Excise and sales tax expense 0.01 - 0.01 - Excise and sales tax interest 0.01 - 0.01 - Asset impairments 0.02 - 0.02 - Net legal settlements and related expenses - - - - Equity-based compensation 0.03 0.03 0.06 0.07 Acquisition-related costs - - - 0.01 Amortization 0.02 0.03 0.05 0.07 Debt refinance costs   -     -     -     -   Non-GAAP diluted EPS from continuing operations $ 0.20   $ 0.25   $ 0.38   $ 0.52       (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 compensation and amortization expenses to be recurring costs and presents non-GAAP diluted EPS from continuing operations to exclude these equity-based non-cash items as well as non-recurring items that are unrelated to the Company's ongoing operations, including tax adjustments, unrealized gain on change in fair value of interest rate swaps, restructuring costs, excise and sales tax expense and interest, asset impairments, net legal settlements and related expenses, acquisition-related costs, and debt refinance 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.   PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIESRECONCILIATION OF NON-GAAPCONSTANT CURRENCY ADJUSTMENTS AND ORGANIC GROWTH                                 Prior Year Quarter Constant Currency Adjustments (2)Impact of fluctuationsQ2 - 10in foreign currencyQ2 - 10(Constant currency)   exchange rates   (Actual)(Unaudited, in thousands, except per share data)   Consolidated Net Revenues $ 143,471 $ 1,115 $ 144,586 North America Net Revenue $ 88,770 $ 436 $ 89,206 Europe Net Revenue $ 28,695 $ (1,063 ) $ 27,632 Asia Pacific Net Revenue $ 26,006 $ 1,742 $ 27,748 PGiMeet Solutions Revenue $ 110,229 $ 708 $ 110,937 Non-GAAP Operating Income $ 19,614 $ 288 $ 19,902 Non-GAAP Net Income from Continuing Operations $ 11,125 $ 337 $ 11,462 Non-GAAP Diluted EPS from Continuing Operations $ 0.19 $ 0.01 $ 0.20   (2) Management also presents these non-GAAP financial measures, as well as consolidated net revenues, segment net revenue and certain solutions 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 - 09) average exchange rates.   Sequential Quarter Constant Currency Adjustments (3)Impact of fluctuationsQ2 - 10in foreign currencyQ2 - 10(Constant currency)   exchange rates   (Actual)(Unaudited, in thousands)   Consolidated Net Revenues $ 146,393 $ (1,807 ) $ 144,586   (3) Management also presents consolidated 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 - 10) average exchange rates.   Organic Growth (4)   Impact of fluctuationsOrganicOrganic netJune 30,in foreign currencyImpact ofnet revenueJune 30,revenue2009exchange rates   acquisitionsgrowth2010growth rate(Unaudited, in thousands, except percentages)   Consolidated Net Revenues, Three Months Ended $ 153,933 $ 1,115 $ - $ (10,462 ) $     144,586 -6.8 %     Consolidated Net Revenues, Six Months Ended $ 309,015 $ 5,940 $ 346 $ (24,310 ) $ 290,991 -7.9 %     PGiMeet Solutions Revenue, Three Months Ended $ 116,709 $ 708 $ - $ (6,480 ) $ 110,937 -5.6 %   PGiMeet Solutions Revenue, Six Months Ended $ 234,570 $ 4,036 $ 346 $ (15,520 ) $ 223,432 -6.6 %   (4) 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.