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Press release from Business Wire

PGi Reports Second Quarter 2011 Results: Revenues $119.0M, Non-GAAP Diluted EPS from Continuing Operations $0.15*

<p class='bwalignc'> <i>Company Raises 2011 Financial Outlook, Establishes New Open Market Stock Repurchase Program for Nearly 10% of Total Shares Outstanding</i> </p>

Thursday, July 21, 2011

PGi Reports Second Quarter 2011 Results: Revenues $119.0M, Non-GAAP Diluted EPS from Continuing Operations $0.15*16:05 EDT Thursday, July 21, 2011 ATLANTA (Business Wire) -- Premiere Global Services, Inc. (NYSE: PGI), a global leader in virtual meetings, today announced results for the second quarter ended June 30, 2011. In the second quarter of 2011, net revenues increased 7.3% to $119.0 million, compared to $110.9 million in the second quarter of 2010. Diluted EPS from continuing operations was $0.10 and non-GAAP diluted EPS from continuing operations was $0.15* in the second quarter of 2011, compared to diluted EPS from continuing operations of $0.07 and non-GAAP diluted EPS from continuing operations of $0.15* in the second 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 overall performance of our global business and the continuing momentum in our new products, iMeet® and GlobalMeet®,” said Boland T. Jones, PGi founder, chairman and CEO, who is leading the company's next-generation product innovation. “Our sales pipelines continue to grow, and our outlook for the rest of the year remains strong.” Six Month Results In the first six months of 2011, net revenues increased 5.6% to $235.9 million, compared to $223.4 million in the first six months of 2010. Diluted EPS from continuing operations was $0.15 and non-GAAP diluted EPS from continuing operations was $0.26* in the first six months of 2011, compared to diluted EPS from continuing operations of $0.15 and non-GAAP diluted EPS from continuing operations of $0.29* in the first six months of 2010. Other News PGi also announced that its Board of Directors approved the repurchase of up to 5.0 million shares of the company's common stock, or approximately 10% of total shares currently outstanding, under a new stock repurchase program. PGi repurchased 1.0 million shares of common stock during the second quarter under its previous Board-authorized repurchase program. Aggregate stock repurchases under the previous program totaled 6,720,200 shares. Share repurchases will be made in the open market at prevailing market prices or in privately negotiated transactions in accordance with all applicable securities laws and regulations. Such repurchases may occur from time to time and may be discontinued at any time. 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 second 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 $460-$470 million and non-GAAP diluted EPS from continuing operations will be in the range of $0.60-$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) 239-5348 (U.S. and Canada) or (913) 312-1513 (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 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 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 services, including our iMeet® and GlobalMeet® services; our ability to attract new customers and to retain and further penetrate our existing customer base; 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 EndedSix Months EndedJune 30,June 30,2011201020112010(Unaudited)(Unaudited)   Net revenues $ 118,990 $ 110,937 $ 235,915 $ 223,432 Operating expenses Cost of revenues (exclusive of depreciation and amortization shown separately below) 49,315 45,356 96,657 89,431 Selling and marketing 34,247 28,791 70,359 61,759 General and administrative (exclusive of expenses shown separately below) 14,217 14,550 27,998 29,000 Research and development 2,627 3,358 5,803 6,935 Excise and sales tax expense - 439 21 439 Depreciation 7,710 6,209 15,435 12,541 Amortization 1,739 1,874 3,449 4,112 Restructuring costs - 1,851 - 2,083 Asset impairments 35 91 54 129 Net legal settlements and related expenses 12 41 12 380 Acquisition-related costs   60     142     60     316   Total operating expenses   109,962     102,702     219,848     207,125     Operating income   9,028     8,235     16,067     16,307     Other (expense) income Interest expense (2,108 ) (3,905 ) (4,189 ) (6,322 ) Unrealized gain on change in fair value of interest rate swaps - 490 - 974 Interest income 11 36 26 71 Other, net   (167 )   74     (378 )   84   Total other expense   (2,264 )   (3,305 )   (4,541 )   (5,193 )   Income from continuing operations before income taxes 6,764 4,930 11,526 11,114 Income tax expense   1,911     1,040     3,741     2,345   Net income from continuing operations   4,853     3,890     7,785     8,769     Income on discontinued operations, net of taxes 36 510 5 3,203         Net income $ 4,889   $ 4,400   $ 7,790   $ 11,972     BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING   50,173     58,367     50,465     58,294     Basic net income per share Continuing operations $ 0.10 $ 0.07 $ 0.15 $ 0.15 Discontinued operations   0.00     0.01     0.00     0.05   Net income per share $ 0.10   $ 0.08   $ 0.15   $ 0.21     DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING   50,508     58,774     50,788     58,655     Diluted net income per share Continuing operations $ 0.10 $ 0.07 $ 0.15 $ 0.15 Discontinued operations   0.00     0.01     0.00     0.05   Net income per share $ 0.10   $ 0.07   $ 0.15   $ 0.20     PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(in thousands, except share data)                 June 30,December 31,20112010(Unaudited)ASSETSCURRENT ASSETS Cash and equivalents $ 24,018 $ 15,101 Accounts receivable (less allowances of $995 and $930, respectively) 72,604 64,243 Prepaid expenses and other current assets 20,121 19,941 Income taxes receivable 2,604 2,870 Deferred income taxes, net 2,703 5,337 Assets of a disposal group held for sale   3,719     4,319   Total current assets   125,769     111,811     PROPERTY AND EQUIPMENT, NET 107,212 107,238   OTHER ASSETS Goodwill 299,269 296,681 Intangibles, net of amortization 13,806 16,967 Deferred income taxes, net 1,846 1,442 Other assets   8,119     7,518   TOTAL ASSETS $ 556,021   $ 541,657     LIABILITIES AND SHAREHOLDERS' EQUITYCURRENT LIABILITIES Accounts payable $ 42,129 $ 42,282 Income taxes payable 1,266 768 Accrued taxes, other than income taxes 5,674 4,671 Accrued expenses 28,195 27,585 Current maturities of long-term debt and capital lease obligations 3,815 3,577 Accrued restructuring costs 3,132 7,273 Liabilities of a disposal group held for sale   2,624     3,143   Total current liabilities   86,835     89,299     LONG-TERM LIABILITIES Long-term debt and capital lease obligations 195,645 180,167 Accrued restructuring costs 1,918 2,321 Accrued expenses 17,891 18,032 Deferred income taxes, net   8,152     9,823   Total long-term liabilities   223,606     210,343     SHAREHOLDERS' EQUITY Common stock, $0.01 par value; 150,000,000 shares authorized, 51,231,485 and 52,253,125 shares issued and outstanding, respectively 512 523 Additional paid-in capital 482,908 491,833 Accumulated other comprehensive gain 18,390 13,679 Accumulated deficit   (256,230 )   (264,020 ) Total shareholders' equity   245,580     242,015   TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 556,021   $ 541,657     PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)                           Six Months EndedJune 30,20112010(Unaudited)CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 7,790 $ 11,972 Income from discontinued operations, net of taxes   (5 )   (3,203 ) Net income from continuing operations 7,785 8,769 Adjustments to reconcile net income to net cash provided by operating activities Depreciation 15,435 12,541 Amortization 3,449 4,112 Amortization of debt issuance costs 468 391 Write-off of unamortized debt issuance costs - 161 Net legal settlements and related expenses 12 380 Payments for legal settlements and related expenses (12 ) (178 ) Deferred income taxes, net of effect of acquisitions 655 (851 ) Restructuring costs - 2,083 Payments for restructuring costs (4,540 ) (3,463 ) Asset impairments 54 129 Equity-based compensation 3,587 4,820 Unrealized gain on change in fair value of interest rate swaps - (974 ) Provision for doubtful accounts 378 403 Changes in working capital   (7,119 )   (8,191 ) Net cash provided by operating activities from continuing operations   20,152     20,132   Net cash provided by operating activities from discontinued operations   27     12,511   Net cash provided by operating activities   20,179     32,643     CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (15,306 ) (15,024 ) Business dispositions 1,951 - Business acquisitions, net of cash acquired   (1,094 )   (392 ) Net cash used in investing activities from continuing operations   (14,449 )   (15,416 ) Net cash used in investing activities from discontinued operations   -     (4,136 ) Net cash used investing activities   (14,449 )   (19,552 )     CASH FLOWS FROM FINANCING ACTIVITIES Principal payments under borrowing arrangements (30,790 ) (73,686 ) Proceeds from borrowing arrangements 44,971 65,844 Payments of debt issuance costs - (1,038 ) Purchase of treasury stock, at cost   (11,992 )   (999 ) Net cash provided by (used in) financing activities from continuing operations   2,189     (9,879 ) Net cash used in financing activities from discontinued operations   -     (54 ) Net cash provided by (used in) financing activities   2,189     (9,933 )   Effect of exchange rate changes on cash and equivalents   998     (2,250 )   NET INCREASE IN CASH AND EQUIVALENTS   8,917     908   CASH AND EQUIVALENTS, beginning of period   15,101     41,402   CASH AND EQUIVALENTS, end of period $ 24,018   $ 42,310     PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIESRECONCILIATION OF NON-GAAP FINANCIAL MEASURES(in thousands, except per share data)           Three Months EndedSix Months EndedJune 30,June 30,2011201020112010(Unaudited)(Unaudited)Non-GAAP Operating Income (1) Operating income, as reported $ 9,028 $ 8,235 $ 16,067 $ 16,307 Restructuring costs - 1,851 - 2,083 Excise and sales tax expense - 439 21 439 Asset impairments 35 91 54 129 Net legal settlements and related expenses 12 41 12 380 Equity-based compensation 1,795 2,217 3,587 4,820 Acquisition-related costs 60 142 60 316 Amortization   1,739   1,874     3,449     4,112   Non-GAAP operating income $ 12,669 $ 14,890   $ 23,250   $ 28,586     Non-GAAP Net Income from Continuing Operations (1) Net income from continuing operations, as reported $ 4,853 $ 3,890 $ 7,785 $ 8,769 Elimination of non-recurring tax adjustments - (340 ) 485 (767 ) Unrealized gain on change in fair value of interest rate swaps - (353 ) - (701 ) Restructuring costs - 1,333 - 1,500 Excise and sales tax expense - 316 15 316 Excise and sales tax interest - 468 - 468 Asset impairments 25 66 39 93 Net legal settlements and related expenses 9 30 9 274 Equity-based compensation 1,288 1,596 2,574 3,470 Acquisition-related costs 43 102 43 227 Amortization 1,248 1,349 2,475 2,960 Debt refinance costs   -   282     -     282   Non-GAAP net income from continuing operations $ 7,466 $ 8,739   $ 13,425   $ 16,891     Non-GAAP Diluted EPS from Continuing Operations (1) (2) Diluted net income per share from continuing operations, as reported $ 0.10 $ 0.07 $ 0.15 $ 0.15 Elimination of non-recurring tax adjustments - (0.01 ) 0.01 (0.01 ) Unrealized gain on change in fair value of interest rate swaps - (0.01 ) - (0.01 ) Restructuring costs - 0.02 - 0.03 Excise and sales tax expense - 0.01 - 0.01 Excise and sales tax interest - 0.01 - 0.01 Asset impairments - - - - Net legal settlements and related expenses - - - - Equity-based compensation 0.03 0.03 0.05 0.06 Acquisition-related costs - - - - Amortization 0.02 0.02 0.05 0.05 Debt refinance costs   -   -     -     -   Non-GAAP diluted EPS from continuing operations $ 0.15 $ 0.15   $ 0.26   $ 0.29       (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 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.   (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)   Q2 - 11(Constantcurrency)Impact offluctuations inforeign currencyexchange ratesQ2 - 11(Actual)(Unaudited, in thousands, except per share data)   Net Revenues $ 115,057 $ 3,933 $ 118,990 North America Net Revenue $ 78,379 $ 223 $ 78,602 Europe Net Revenue $ 23,283 $ 2,049 $ 25,332 Asia Pacific Net Revenue $ 13,395 $ 1,661 $ 15,056 Non-GAAP Operating Income $ 11,961 $ 708 $ 12,669 Non-GAAP Net Income from Continuing Operations $ 7,227 $ 239 $ 7,466 Non-GAAP Diluted EPS from Continuing Operations $ 0.15 $ - $ 0.15   (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 - 10) average exchange rates.   Sequential Quarter Constant Currency Adjustments (4)   Q1 - 11(Constantcurrency)Impact offluctuations inforeign currencyexchange ratesQ2 - 11(Actual)(Unaudited, in thousands)   Net Revenues $ 117,802 $ 1,188 $ 118,990   (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 - 11) average exchange rates.   Organic Growth (5)     June 30,2010Impact offluctuations inforeign currencyexchange ratesOrganic netrevenuegrowthJune 30,2011Organic netrevenuegrowth rate(Unaudited, in thousands, except percentages)   Net Revenues, Three Months Ended $ 110,937 $ 3,933 $ 4,120 $ 118,990 3.7 %   Net Revenues, Six Months Ended $ 223,432 $ 5,414 $ 7,069 $ 235,915 3.2 %   (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 Services, Inc.Investor CallsSean O?Brien, 404-262-8462Executive Vice PresidentStrategy & Communications