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Press release from Business Wire

PGi Reports Fourth Quarter and Fiscal Year 2011 Results: Q4 Revenues Grew 9% to $118.7M, Non-GAAP Diluted EPS from Continuing Operations $0.18*

<p class='bwalignc'> <i>Company Looks for Solid Organic Growth and Improved Profitability in 2012</i> </p>

Thursday, February 16, 2012

PGi Reports Fourth Quarter and Fiscal Year 2011 Results: Q4 Revenues Grew 9% to $118.7M, Non-GAAP Diluted EPS from Continuing Operations $0.18*16:05 EST Thursday, February 16, 2012 ATLANTA (Business Wire) -- Premiere Global Services, Inc. (NYSE: PGI), a global leader in virtual meetings for 20 years, today announced results for the fourth quarter and fiscal year ended December 31, 2011. In the fourth quarter of 2011, net revenues increased 9.1% to $118.7 million, compared to $108.8 million in the fourth quarter of 2010. Diluted EPS from continuing operations was $0.07 and non-GAAP diluted EPS from continuing operations was $0.18* in the fourth quarter of 2011, compared to diluted EPS from continuing operations of ($0.01) and non-GAAP diluted EPS from continuing operations of $0.10* in the fourth quarter of 2010. “We are pleased with our performance in 2011, as we returned to growth across all regions and product lines,” said Boland T. Jones, PGi founder, chairman and CEO. “Last year, we made significant progress in transitioning PGi toward a Software as a Service model with the initial launch of our next-generation virtual meeting solutions, iMeet® and GlobalMeet®. The market reception of these award-winning new products has been positive, and enterprise momentum continues to build. This year, we plan to continue to enhance both iMeet and GlobalMeet with increased functionality, mobility upgrades and exciting new features that will open new market opportunities and position these products as the ones to beat in the enterprise market.” 2011 Financial Results In 2011, net revenues increased 7.3% to $473.8 million, compared to $441.8 million in 2010. Diluted EPS from continuing operations was $0.34 and non-GAAP diluted EPS from continuing operations was $0.62* in 2011, compared to diluted EPS from continuing operations of $0.15 and non-GAAP diluted EPS from continuing operations of $0.51* in 2010. Results for 2010 are presented to reflect the PGiSend business as discontinued operations, as it was sold in October 2010. 2011 Accomplishments Celebrated 20 years as a global leader in virtual meetings; Launched iMeet, our secure, cloud-based video conferencing solution that enables up to 15 people to meet face-to-face online – anytime, anywhere – from their desktop, tablet or mobile device; Launched GlobalMeet, which integrates web conferencing and audio conferencing into one complete solution for simple, cost-effective meetings; Earned multiple awards and accolades for our product innovation, including: iMeet won the 2011 People's Choice Stevie Award for best new computer service; iMeet was named Best New Product by Best in Biz awards; PGi was named Frost & Sullivan's 2011 Product Strategy of the Year Award winner; and PGi moved into the Visionaries quadrant of the Gartner Magic Quadrant for Web Conferencing based on our innovation with iMeet and GlobalMeet. Exited the year with our new virtual meeting products generating an annual revenue run-rate of nearly $11 million; Amended our bank credit facility with increased capacity, an extended term and lower pricing; Reported our highest revenue growth in three years, with net revenues increasing more than 7% as compared to 2010; Reported our highest earnings growth in three years, with non-GAAP diluted EPS from continuing operations increasing nearly 22% as compared to 2010; Established a new open market share repurchase program for up to five million shares of our common stock; and Repurchased nearly three million shares of common stock in the open market under our prior and current share repurchase plans. 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 trends and foreign currency exchange rates, PGi anticipates net revenues in 2012 will be in the range of $490-$500 million and non-GAAP diluted EPS from continuing operations will be in the range of $0.70-$0.75*. 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) 211-4542 (U.S. and Canada) or (913) 312-0943 (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 20 years. Our cloud-based solutions, iMeet® and GlobalMeet®, 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 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 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 EndedTwelve Months EndedDecember 31,December 31,2011201020112010(Unaudited)(Unaudited)   Net revenues $ 118,735 $ 108,824 $ 473,834 $ 441,753 Operating expenses: Cost of revenues (exclusive of depreciation and amortization shown separately below) 49,227 44,434 195,822 178,699 Selling and marketing 31,492 31,773 134,018 122,034 General and administrative (exclusive of expenses shown separately below) 14,767 14,621 57,176 58,576 Research and development 2,784 3,541 11,521 14,136 Excise and sales tax expense - - 352 439 Depreciation 7,659 7,064 30,831 25,980 Amortization 1,304 1,616 6,365 7,386 Restructuring costs 809 5,350 847 12,257 Asset impairments 340 114 456 290 Net legal settlements and related expenses 363 244 399 659 Acquisition-related costs   12     -     91     316   Total operating expenses   108,757     108,757     437,878     420,772     Operating income   9,978     67     35,956     20,981     Other (expense) income: Interest expense (3,573 ) (1,649 ) (9,954 ) (10,785 ) Unrealized gain on change in fair value of interest rate swaps - - - 1,228 Interest income 12 48 46 157 Other, net   (339 )   (369 )   (574 )   (1,075 ) Total other expense   (3,900 )   (1,970 )   (10,482 )   (10,475 )   Income (loss) from continuing operations before income taxes 6,078 (1,903 ) 25,474 10,506 Income tax expense (benefit)   2,797     (1,078 )   8,586     1,540   Net income (loss) from continuing operations   3,281     (825 )   16,888     8,966     Income (loss) from discontinued operations, net of taxes (2,194 ) (10,126 ) 4,546 (4,135 )         Net income (loss) $ 1,087   $ (10,951 ) $ 21,434   $ 4,831     BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING   48,540     56,910     49,619     58,009     Basic net income (loss) per share Continuing operations $ 0.07 $ (0.01 ) $ 0.34 $ 0.15 Discontinued operations   (0.05 )   (0.18 )   0.09     (0.07 ) Net income (loss) per share $ 0.02   $ (0.19 ) $ 0.43   $ 0.08     DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING   48,970     56,910     49,971     58,355     Diluted net income (loss) per share Continuing operations $ 0.07 $ (0.01 ) $ 0.34 $ 0.15 Discontinued operations   (0.04 )   (0.18 )   0.09     (0.07 ) Net income (loss) per share $ 0.02   $ (0.19 ) $ 0.43   $ 0.08     PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(in thousands, except share data)       December 31,December 31,20112010(Unaudited)ASSETSCURRENT ASSETS Cash and equivalents $ 32,033 $ 15,101 Accounts receivable (less allowances of $613 and $930, respectively) 72,518 64,243 Prepaid expenses and other current assets 13,906 19,941 Income taxes receivable 1,739 2,870 Deferred income taxes, net 1,090 5,337 Assets of a disposal group held for sale   -     4,319   Total current assets   121,286     111,811     PROPERTY AND EQUIPMENT, NET 103,449 107,238   OTHER ASSETS Goodwill 295,690 296,681 Intangibles, net of amortization 10,906 16,967 Deferred income taxes, net 3,474 1,442 Other assets   8,016     7,518   TOTAL ASSETS $ 542,821   $ 541,657     LIABILITIES AND SHAREHOLDERS' EQUITYCURRENT LIABILITIES Accounts payable $ 42,589 $ 42,282 Income taxes payable 962 768 Accrued taxes, other than income taxes 3,611 4,671 Accrued expenses 28,999 27,585 Current maturities of long-term debt and capital lease obligations 3,845 3,577 Accrued restructuring costs 2,287 7,273 Liabilities of a disposal group held for sale - 3,143 Deferred income taxes, net   386     -   Total current liabilities   82,679     89,299     LONG-TERM LIABILITIES Long-term debt and capital lease obligations 195,963 180,167 Accrued restructuring costs 1,410 2,321 Accrued expenses 17,249 18,032 Deferred income taxes, net   1,783     9,823   Total long-term liabilities   216,405     210,343     SHAREHOLDERS' EQUITY Common stock, $0.01 par value; 150,000,000 shares authorized, 50,144,703 and 52,253,125 shares issued and outstanding, respectively 501 523 Additional paid-in capital 475,013 491,833 Accumulated other comprehensive gain 10,809 13,679 Accumulated deficit   (242,586 )   (264,020 ) Total shareholders' equity   243,737     242,015   TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 542,821   $ 541,657     PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)       Twelve Months EndedDecember 31,20112010(Unaudited)CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 21,434 $ 4,831 (Income) loss from discontinued operations, net of taxes   (4,546 )   4,135   Net income from continuing operations 16,888 8,966 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 30,831 25,980 Amortization 6,365 7,386 Amortization of debt issuance costs 926 917 Write-off of unamortized debt issuance costs 743 161 Net legal settlements and related expenses 399 659 Payments for legal settlements and related expenses (246 ) (417 ) Deferred income taxes 2,388 (3,448 ) Restructuring costs 847 12,257 Payments for restructuring costs (6,779 ) (9,537 ) Asset impairments 456 290 Equity-based compensation 6,757 8,597 Unrealized gain on change in fair value of interest rate swaps - (1,228 ) Provision for doubtful accounts 626 855 Changes in assets and liabilities, net of effect of acquisitions and dispositions: Accounts receivable, net (8,937 ) 1,493 Other assets and liabilities 3,900 (5,752 ) Accounts payable and accrued expenses   3,565     738   Net cash provided by operating activities from continuing operations   58,729     47,917   Net cash (used in) provided by operating activities from discontinued operations   (792 )   17,901   Net cash provided by operating activities   57,937     65,818     CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (30,100 ) (32,868 ) Other investing activities (427 ) 10 Business dispositions 1,902 51,281 Business acquisitions, net of cash acquired   (1,282 )   (591 ) Net cash (used in) provided by investing activities from continuing operations   (29,907 )   17,832   Net cash used in investing activities from discontinued operations   (276 )   (6,009 ) Net cash (used in) provided by investing activities   (30,183 )   11,823       CASH FLOWS FROM FINANCING ACTIVITIES Principal payments under borrowing arrangements (70,793 ) (200,586 ) Proceeds from borrowing arrangements 85,971 158,756 Payments of debt issuance costs (1,469 ) (1,165 ) Repayment of shareholder notes - 1,904 Purchase of treasury stock, at cost (23,852 ) (61,603 ) Exercise of stock options   614     -   Net cash used in financing activities from continuing operations   (9,529 )   (102,694 ) Net cash used in financing activities from discontinued operations   (140 )   (90 ) Net cash used in financing activities   (9,669 )   (102,784 )   Effect of exchange rate changes on cash and equivalents   (1,153 )   (1,158 )   NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS   16,932     (26,301 ) CASH AND EQUIVALENTS, beginning of period   15,101     41,402   CASH AND EQUIVALENTS, end of period $ 32,033   $ 15,101     PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIESRECONCILIATION OF NON-GAAP FINANCIAL MEASURES(in thousands, except per share data)           Three Months EndedTwelve Months EndedDecember 31,December 31,2011201020112010(Unaudited)(Unaudited)Non-GAAP Operating Income (1) Operating income, as reported $ 9,978 $ 67 $ 35,956 $ 20,981 Restructuring costs 809 5,350 847 12,257 Excise and sales tax expense - - 352 439 Asset impairments 340 114 456 290 Net legal settlements and related expenses 363 244 399 659 Equity-based compensation 1,548 1,619 6,757 8,597 Acquisition-related costs 12 - 91 316 Amortization   1,304   1,616     6,365   7,386   Non-GAAP operating income $ 14,354 $ 9,010   $ 51,223 $ 50,925     Non-GAAP Net Income from Continuing Operations (1) Net income from continuing operations, as reported $ 3,281 $ (825 ) $ 16,888 $ 8,966 Elimination of non-recurring tax adjustments 1,217 86 1,672 (1,192 ) Unrealized gain on change in fair value of interest rate swaps - - - (909 ) Restructuring costs 599 3,959 617 9,070 Excise and sales tax expense - - 256 325 Excise and sales tax interest - (145 ) 117 336 Asset impairments 252 84 332 215 Net legal settlements and related expenses 269 181 291 488 Equity-based compensation 1,146 1,198 4,923 6,362 Acquisition-related costs 9 - 66 234 Amortization 965 1,196 4,638 5,466 Non-recurring foreign exchange losses - 21 - 241 Debt refinance costs and other non-recurring interest   978   -     962   290   Non-GAAP net income from continuing operations $ 8,716 $ 5,755   $ 30,762 $ 29,892     Non-GAAP Diluted EPS from Continuing Operations (1) (2) Diluted net income per share from continuing operations, as reported $ 0.07 $ (0.01 ) $ 0.34 $ 0.15 Elimination of non-recurring tax adjustments 0.02 - 0.03 (0.02 ) Unrealized gain on change in fair value of interest rate swaps - - - (0.02 ) Restructuring costs 0.01 0.07 0.01 0.16 Excise and sales tax expense - - 0.01 0.01 Excise and sales tax interest - - - 0.01 Asset impairments 0.01 - 0.01 - Net legal settlements and related expenses 0.01 - 0.01 0.01 Equity-based compensation 0.02 0.02 0.10 0.11 Acquisition-related costs - - - - Amortization 0.02 0.02 0.09 0.09 Non-recurring foreign exchange losses - - - - Debt refinance costs and other non-recurring interest   0.02   -     0.02   -   Non-GAAP diluted EPS from continuing operations $ 0.18 $ 0.10   $ 0.62 $ 0.51       (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, 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, non-recurring foreign exchange losses and debt refinance costs and other non-recurring interest. 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)   Q4 - 11(Constantcurrency)Impact offluctuations inforeign currencyexchange ratesQ4 - 11(Actual)(Unaudited, in thousands, except per share data)   Net Revenues $ 118,422 $ 313 $ 118,735 North America Net Revenue $ 78,549 $ (32 ) $ 78,517 Europe Net Revenue $ 25,569 $ (84 ) $ 25,485 Asia Pacific Net Revenue $ 14,304 $ 429 $ 14,733 Non-GAAP Operating Income $ 14,256 $ 98 $ 14,354 Non-GAAP Net Income from Continuing Operations $ 8,569 $ 147 $ 8,716 Non-GAAP Diluted EPS from Continuing Operations $ 0.17 $ 0.00 $ 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 (Q4 - 10) average exchange rates.   Sequential Quarter Constant Currency Adjustments (4)   Q4 - 11(Constantcurrency)Impact offluctuations inforeign currencyexchange ratesQ4 - 11(Actual)(Unaudited, in thousands)   Net Revenues $ 119,921 $ (1,186 ) $ 118,735   (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 (Q3 - 11) average exchange rates.   Organic Growth (5)   December 31,2010Impact offluctuations inforeign currencyexchange ratesOrganic netrevenuegrowthDecember 31,2011Organic netrevenuegrowth rate(Unaudited, in thousands, except percentages)   Net Revenues, Three Months Ended $ 108,824 $ 313 $ 9,598 $ 118,735 8.8 %   Net Revenues, Twelve Months Ended $ 441,753 $ 8,514 $ 23,567 $ 473,834 5.3 %   (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.Sean O?Brien, 404-262-8462Executive Vice PresidentStrategy & Communications