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Press release from Business Wire

PGi Reports First Quarter 2011 Results: Revenues $116.9M, Non-GAAP Diluted EPS from Continuing Operations $0.12*

<p class='bwalignc'> <i>Company Raises 2011 Financial Outlook</i> </p>

Wednesday, April 20, 2011

PGi Reports First Quarter 2011 Results: Revenues $116.9M, Non-GAAP Diluted EPS from Continuing Operations $0.12*16:05 EDT Wednesday, April 20, 2011 ATLANTA (Business Wire) -- Premiere Global Services, Inc. (NYSE: PGI), a global leader in virtual meetings, today announced results for the first quarter ended March 31, 2011. In the first quarter of 2011, net revenues increased 3.9% to $116.9 million, compared to $112.5 million in the first quarter of 2010. Diluted EPS from continuing operations was $0.06 and non-GAAP diluted EPS from continuing operations was $0.12* in the first quarter of 2011, compared to diluted EPS from continuing operations of $0.08 and non-GAAP diluted EPS from continuing operations of $0.14* in the first quarter of 2010. Results for 2010 are reclassified to reflect the PGiSend business as discontinued operations, as it was sold in October 2010. “We are pleased with the momentum we have generated in our business, as we continue to execute our strategy for growth,” said Boland T. Jones, PGi founder, chairman and CEO. “The launch of our new iMeet® and GlobalMeet® solutions and our advertising campaigns have created a noticeable buzz in the marketplace. Our sales pipelines are strong, and trends in our base business continue to improve. As a result, 2011 is off to a good start.” 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 the strength of its first quarter results and current business trends, PGi increased its financial outlook for 2011. Based on current trends and foreign currency exchange rates, PGi now anticipates net revenues from continuing operations in 2011 will be in the range of $455-$465 million and non-GAAP diluted EPS from continuing operations will be in the range of $0.58-$0.62*, including marketing and advertising costs associated with the launch of our new virtual meetings solutions. 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) 206-4893 (U.S. and Canada) or (913) 312-1375 (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 is a global leader in virtual meetings. For nearly 20 years, we have innovated technologies that help people meet and collaborate in more enjoyable and productive ways. Every month, we bring together over 15 million people in nearly 4 million virtual meetings. Headquartered in Atlanta, PGi has a presence in 24 countries worldwide. For more information, visit us 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 new 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; costs or difficulties related to the integration of any new technologies; service interruptions and network downtime; price increases from our telecommunications service providers; technological obsolescence and our ability to upgrade our equipment or increase our network capacity; concerns regarding the security of transactions; our level of indebtedness; future write-downs of goodwill or other intangible assets; assessment of income, state sales and other taxes; restructuring and cost reduction initiatives and the market reaction thereto; risks associated with acquisitions and market expansion; the impact of the recent 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; risks associated with international operations, including political instability and 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, 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 EndedMarch 31,   2011     2010   (Unaudited)   Net revenues $ 116,925 $ 112,495 Operating expenses: Cost of revenues (exclusive of depreciation and amortization shown separately below) 47,342 44,075 Selling and marketing 36,112 32,968 General and administrative (exclusive of expenses shown separately below) 13,781 14,450 Research and development 3,176 3,577 Excise and sales tax expense 21 - Depreciation 7,725 6,332 Amortization 1,710 2,238 Restructuring costs - 232 Asset impairments 19 38 Net legal settlements and related expenses - 339 Acquisition-related costs   -     174   Total operating expenses   109,886     104,423     Operating income   7,039     8,072     Other (expense) income: Interest expense (2,081 ) (2,417 ) Unrealized gain on change in fair value of interest rate swaps - 484 Interest income 16 35 Other, net   (211 )   10   Total other expense   (2,276 )   (1,888 )   Income from continuing operations before income taxes 4,763 6,184 Income tax expense   1,831     1,305   Net income from continuing operations   2,932     4,879     Income (loss) on discontinued operations, net of taxes (31 ) 2,693     Net income $ 2,901   $ 7,572     BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING   50,759     58,220     Basic net income per share Continuing operations $ 0.06 $ 0.08 Discontinued operations   -     0.05   Net income per share $ 0.06   $ 0.13     DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING   51,071     58,535     Diluted net income per share Continuing operations $ 0.06 $ 0.08 Discontinued operations   -     0.05   Net income per share $ 0.06   $ 0.13       PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(in thousands, except share data)           March 31,December 31,   2011     2010   (Unaudited)ASSETSCURRENT ASSETS Cash and equivalents $ 22,426 $ 15,101 Accounts receivable (less allowances of $919 and $930, respectively) 72,834 64,243 Prepaid expenses and other current assets 18,868 19,941 Income taxes receivable 3,291 2,870 Deferred income taxes, net 5,253 5,337 Assets of a disposal group held for sale   3,988     4,319   Total current assets   126,660     111,811     PROPERTY AND EQUIPMENT, NET 107,102 107,238   OTHER ASSETS Goodwill 298,436 296,681 Intangibles, net of amortization 15,452 16,967 Deferred income taxes, net 1,665 1,442 Other assets   7,360     7,518   TOTAL ASSETS $ 556,675   $ 541,657     LIABILITIES AND SHAREHOLDERS' EQUITYCURRENT LIABILITIES Accounts payable $ 41,481 $ 42,282 Income taxes payable 568 768 Accrued taxes, other than income taxes 6,041 4,671 Accrued expenses 24,705 27,585 Current maturities of long-term debt and capital lease obligations 3,732 3,577 Accrued restructuring costs 4,413 7,273 Liabilities of a disposal group held for sale   2,643     3,143   Total current liabilities   83,583     89,299     LONG-TERM LIABILITIES Long-term debt and capital lease obligations 195,854 180,167 Accrued restructuring costs 2,094 2,321 Accrued expenses 17,928 18,032 Deferred income taxes, net   11,286     9,823   Total long-term liabilities   227,162     210,343     SHAREHOLDERS' EQUITY Common stock, $0.01 par value; 150,000,000 shares authorized, 52,229,540 and 52,253,125 shares issued and outstanding, respectively 522 523 Additional paid-in capital 489,657 491,833 Accumulated other comprehensive gain 16,870 13,679 Accumulated deficit   (261,119 )   (264,020 ) Total shareholders' equity   245,930     242,015   TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 556,675   $ 541,657       PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)                 Three Months EndedMarch 31,   2011     2010   (Unaudited)CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 2,901 $ 7,572 (Income) loss from discontinued operations, net of taxes   31     (2,693 ) Net income from continuing operations 2,932 4,879 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 7,725 6,332 Amortization 1,710 2,238 Amortization of debt issuance costs 234 159 Net legal settlements and related expenses - 339 Payments for legal settlements and related expenses - (127 ) Deferred income taxes, net of effect of acquisitions 1,353 (749 ) Restructuring costs - 232 Payments for restructuring costs (3,034 ) (2,143 ) Asset impairments 19 38 Equity-based compensation 1,792 2,603 Unrealized gain on change in fair value of interest rate swaps - (484 ) Provision for doubtful accounts 157 166 Changes in working capital   (12,143 )   (7,025 ) Net cash provided by operating activities from continuing operations   745     6,458   Net cash provided in (used in) operating activities from discontinued operations   (256 )   5,623   Net cash provided by operating activities   489     12,081     CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (7,327 ) (6,944 ) Business dispositions 2,170 - Business acquisitions, net of cash acquired   (49 )   (246 ) Net cash used in investing activities from continuing operations   (5,206 )   (7,190 ) Net cash used in investing activities from discontinued operations   -     (2,260 ) Net cash used in investing activities   (5,206 )   (9,450 )     CASH FLOWS FROM FINANCING ACTIVITIES Principal payments under borrowing arrangements (9,223 ) (36,265 ) Proceeds from borrowing arrangements 23,971 35,044 Purchase of treasury stock, at cost   (3,319 )   (554 ) Net cash provided by (used in) financing activities from continuing operations   11,429     (1,775 ) Net cash used in financing activities from discontinued operations   -     (27 ) Net cash provided by (used in) financing activities   11,429     (1,802 )   Effect of exchange rate changes on cash and equivalents   613     (760 )   NET INCREASE IN CASH AND EQUIVALENTS   7,325     69   CASH AND EQUIVALENTS, beginning of period   15,101     41,402   CASH AND EQUIVALENTS, end of period $ 22,426   $ 41,471       PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIESRECONCILIATION OF NON-GAAP FINANCIAL MEASURES(in thousands, except per share data)           Three Months EndedMarch 31,   2011   2010   (Unaudited)Non-GAAP Operating Income (1) Operating income, as reported $ 7,039 $ 8,072 Restructuring costs - 232 Excise and sales tax expense 21 - Asset impairments 19 38 Net legal settlements and related expenses - 339 Equity-based compensation 1,792 2,603 Acquisition-related costs - 174 Amortization   1,710   2,238   Non-GAAP operating income $ 10,581 $ 13,696     Non-GAAP Net Income from Continuing Operations (1) Net income from continuing operations, as reported $ 2,932 $ 4,879 Elimination of non-recurring tax adjustments 450 (427 ) Unrealized gain on change in fair value of interest rate swaps - (348 ) Restructuring costs - 167 Excise and sales tax expense 15 - Asset impairments 13 27 Net legal settlements and related expenses - 244 Equity-based compensation 1,272 1,874 Acquisition-related costs - 125 Amortization   1,214   1,611   Non-GAAP net income from continuing operations $ 5,896 $ 8,152     Non-GAAP Diluted EPS from Continuing Operations (1) (2) Diluted net income per share from continuing operations, as reported $ 0.06 $ 0.08 Elimination of non-recurring tax adjustments 0.01 (0.01 ) Unrealized gain on change in fair value of interest rate swaps - (0.01 ) Restructuring costs - - Excise and sales tax expense - - Asset impairments - - Net legal settlements and related expenses - - Equity-based compensation 0.02 0.03 Acquisition-related costs - - Amortization   0.02   0.03   Non-GAAP diluted EPS from continuing operations $ 0.12 $ 0.14       (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 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, unrealized gain on change in fair value of interest rate swaps, 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 do not sum due to the effect of rounding on EPS.     PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIESRECONCILIATION OF NON-GAAP FINANCIAL MEASURESCONSTANT CURRENCY ADJUSTMENTS AND ORGANIC GROWTH                           Prior Year Quarter Constant Currency Adjustments (3)   Impact ofQ1 - 11(Constantcurrency)fluctuations in foreign currencyexchange ratesQ1 - 11 (Actual)(Unaudited, in thousands, except per share data)   Net Revenues $ 115,444 $ 1,481 $ 116,925 North America Net Revenue $ 79,562 $ 200 $ 79,762 Europe Net Revenue $ 23,216 $ 202 $ 23,418 Asia Pacific Net Revenue $ 12,666 $ 1,079 $ 13,745 Non-GAAP Operating Income $ 10,205 $ 376 $ 10,581 Non-GAAP Net Income from Continuing Operations $ 5,786 $ 110 $ 5,896 Non-GAAP Diluted EPS from Continuing Operations $ 0.12 $ - $ 0.12   (3) Management also presents these non-GAAP financial measures, 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 (Q1 - 10) average exchange rates.   Sequential Quarter Constant Currency Adjustments (4)   Impact ofQ1 - 11(ConstantCurrency)fluctuations in foreign currencyexchange ratesQ1 - 11 (Actual)(Unaudited, in thousands)   Net Revenues $ 116,423 $ 502 $ 116,925   (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 (Q4 - 10) average exchange rates.   Organic Growth (5)       March 31,2010Impact offluctuations inforeign currencyexchange ratesOrganic netrevenuegrowth   March 31,2011Organic netrevenuegrowth rate(Unaudited, in thousands, except percentages)   Net Revenues, Three Months Ended $ 112,495 $ 1,481 $ 2,949 $ 116,925 2.6 %   (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.     Premiere Global ServicesInvestor CallsSean O?Brien, 404-262-8462Executive Vice PresidentStrategy & Communications