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Press release from Business Wire

PGi Reports First Quarter 2012 Results: Organic Revenues Grew Nearly 9%* to $126.6M; Non-GAAP Diluted EPS from Continuing Operations $0.18*

<p class='bwalignc'> <i>Company Increases Financial Outlook for 2012</i> </p>

Thursday, April 19, 2012

PGi Reports First Quarter 2012 Results: Organic Revenues Grew Nearly 9%* to $126.6M; Non-GAAP Diluted EPS from Continuing Operations $0.18*16:05 EDT Thursday, April 19, 2012 ATLANTA (Business Wire) -- Premiere Global Services, Inc. (NYSE: PGI), a global leader in virtual meetings for 20 years, today announced results for the first quarter ended March 31, 2012. In the first quarter of 2012, revenues as reported increased 8.3% to $126.6 million, compared to $116.9 million in the first quarter of 2011. Diluted EPS from continuing operations was $0.13 and non-GAAP diluted EPS from continuing operations was $0.18* in the first quarter of 2012, compared to diluted EPS from continuing operations of $0.06 and non-GAAP diluted EPS from continuing operations of $0.12* in the first quarter of 2011. “During the first quarter, we continued to show solid momentum across our global business,” said Boland T. Jones, PGi founder, chairman and CEO. “At the same time, we are making great progress in transitioning PGi toward a software as a service model, as we continue to increase both our direct sales of iMeet® and GlobalMeet® and the number and quality of our distribution partners worldwide. As a result, we remain optimistic in our outlook for the remainder of the year.” First Quarter 2012 Accomplishments Reported nearly 9% organic revenue growth as compared to the first quarter of 2011; Reported non-GAAP diluted EPS from continuing operations growth of over 50% as compared to the first quarter of 2011; Grew the annual revenue run-rate from iMeet and GlobalMeet by greater than 22% as compared to the fourth quarter of 2011; Provisioned over 11,000 iMeet and GlobalMeet licenses worldwide; Announced a multi-year, multi-million dollar strategic alliance with Deutsche Telekom, naming the integrated telecommunications company as the exclusive reseller of iMeet in Germany; iMeet selected as a finalist in the Best New Product category for the internationally renowned 2012 Edison Awards; and Repurchased nearly 250,000 shares of common stock in the open market under our share repurchase plan. 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 2012. Based on current trends and foreign currency exchange rates, PGi now anticipates net revenues from continuing operations in 2012 will be in the range of $500-$510 million and non-GAAP diluted EPS from continuing operations will be in the range of $0.72-$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) 211-4495 (U.S. and Canada) or (913) 312-1396 (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 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 65 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 cloud-based, virtual meeting 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; 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 of transactions; future write-downs of goodwill or other intangible assets; greater than anticipated tax liabilities; restructuring and cost reduction initiatives and the market reaction thereto; our level of indebtedness; risks associated with acquisitions and divestitures; 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 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, 2011. 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 31,20122011(Unaudited)   Net revenues $ 126,603 $ 116,925 Operating expenses: Cost of revenues (exclusive of depreciation and amortization shown separately below) 53,450 47,342 Selling and marketing 34,034 36,112 General and administrative (exclusive of expenses shown separately below) 15,281 13,781 Research and development 3,379 3,176 Excise and sales tax expense - 21 Depreciation 7,945 7,725 Amortization 1,220 1,710 Restructuring costs 161 - Asset impairments 25 19 Net legal settlements and related expenses   20     -   Total operating expenses   115,515     109,886     Operating income   11,088     7,039     Other (expense) income: Interest expense (1,772 ) (2,081 ) Interest income 4 16 Other, net   (70 )   (211 ) Total other expense   (1,838 )   (2,276 )   Income from continuing operations before income taxes 9,250 4,763 Income tax expense   3,024     1,831   Net income from continuing operations   6,226     2,932     Loss from discontinued operations, net of taxes (47 ) (31 )     Net income $ 6,179   $ 2,901     BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING   48,455     50,759     Basic net income per share Continuing operations $ 0.13 $ 0.06 Discontinued operations   -     -   Net income per share $ 0.13   $ 0.06     DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING   48,929     51,071     Diluted net income per share Continuing operations $ 0.13 $ 0.06 Discontinued operations   -     -   Net income per share $ 0.13   $ 0.06     PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(in thousands, except share data)       March 31,December 31,20122011(Unaudited)ASSETSCURRENT ASSETS Cash and equivalents $ 23,751 $ 32,033 Accounts receivable (less allowances of $711 and $613, respectively) 81,432 72,518 Prepaid expenses and other current assets 14,140 13,906 Income taxes receivable 1,976 1,739 Deferred income taxes, net   1,007     1,090   Total current assets   122,306     121,286     PROPERTY AND EQUIPMENT, NET 102,690 103,449   OTHER ASSETS Goodwill 297,205 295,690 Intangibles, net of amortization 9,809 10,906 Deferred income taxes, net 2,508 3,474 Other assets   9,081     8,016   TOTAL ASSETS $ 543,599   $ 542,821     LIABILITIES AND SHAREHOLDERS' EQUITYCURRENT LIABILITIES Accounts payable $ 45,886 $ 42,589 Income taxes payable 624 962 Accrued taxes, other than income taxes 3,344 3,611 Accrued expenses 25,814 28,999 Current maturities of long-term debt and capital lease obligations 3,765 3,845 Accrued restructuring costs 2,001 2,287 Deferred income taxes, net   375     386   Total current liabilities   81,809     82,679     LONG-TERM LIABILITIES Long-term debt and capital lease obligations 188,153 195,963 Accrued restructuring costs 1,284 1,410 Accrued expenses 18,528 17,249 Deferred income taxes, net   2,194     1,783   Total long-term liabilities   210,159     216,405     SHAREHOLDERS' EQUITY Common stock, $0.01 par value; 150,000,000 shares authorized, 50,185,721 and 50,144,703 shares issued and outstanding, respectively 502 501 Additional paid-in capital 474,844 475,013 Accumulated other comprehensive gain 12,692 10,809 Accumulated deficit   (236,407 )   (242,586 ) Total shareholders' equity   251,631     243,737   TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 543,599   $ 542,821     PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)       Three Months EndedMarch 31,20122011(Unaudited)CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 6,179 $ 2,901 Loss from discontinued operations, net of taxes   47     31   Net income from continuing operations 6,226 2,932 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 7,945 7,725 Amortization 1,220 1,710 Amortization of debt issuance costs 147 234 Net legal settlements and related expenses 20 - Payments for legal settlements and related expenses (10 ) - Deferred income taxes 1,935 1,353 Restructuring costs 161 - Payments for restructuring costs (622 ) (3,034 ) Asset impairments 25 19 Equity-based compensation 2,082 1,792 Excess tax benefits from share-based payment arrangements (86 ) - Provision for doubtful accounts 357 157 Changes in assets and liabilities, net of effect of acquisitions and dispositions: Changes in working capital   (9,825 )   (12,143 ) Net cash provided by operating activities from continuing operations   9,575     745   Net cash used in operating activities from discontinued operations   (298 )   (256 ) Net cash provided by operating activities   9,277     489     CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (7,497 ) (7,327 ) Other investing activities (170 ) (49 ) Business dispositions   -     2,170   Net cash used in investing activities from continuing operations   (7,667 )   (5,206 ) Net cash used in investing activities from discontinued operations   (60 )   -   Net cash used in investing activities   (7,727 )   (5,206 )     CASH FLOWS FROM FINANCING ACTIVITIES Principal payments under borrowing arrangements (15,069 ) (9,223 ) Proceeds from borrowing arrangements 7,000 23,971 Payments of debt issuance costs (23 ) - Excess tax benefits of share-based payment arrangements 86 - Purchase of treasury stock, at cost (2,926 ) (3,319 ) Exercise of stock options   852     -   Net cash (used in) provided by financing activities from continuing operations   (10,080 )   11,429   Net cash used in financing activities from discontinued operations   -     -   Net cash (used in) provided by financing activities   (10,080 )   11,429     Effect of exchange rate changes on cash and equivalents   248     613     NET (DECREASE) INCREASE IN CASH AND EQUIVALENTS   (8,282 )   7,325   CASH AND EQUIVALENTS, beginning of period   32,033     15,101   CASH AND EQUIVALENTS, end of period $ 23,751   $ 22,426     PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIESRECONCILIATION OF NON-GAAP FINANCIAL MEASURES(in thousands, except per share data)     Three Months EndedMarch 31,20122011(Unaudited)Non-GAAP Operating Income (1) Operating income, as reported $ 11,088 $ 7,039 Restructuring costs 161 - Excise and sales tax expense - 21 Asset impairments 25 19 Net legal settlements and related expenses 20 - Equity-based compensation 2,082 1,792 Amortization   1,220   1,710 Non-GAAP operating income $ 14,596 $ 10,581   Non-GAAP Net Income from Continuing Operations (1) Net income from continuing operations, as reported $ 6,226 $ 2,932 Elimination of non-recurring tax adjustments 249 450 Restructuring costs 113 - Excise and sales tax expense - 15 Asset impairments 18 13 Net legal settlements and related expenses 14 - Equity-based compensation 1,457 1,272 Amortization   854   1,214 Non-GAAP net income from continuing operations $ 8,931 $ 5,896   Non-GAAP Diluted EPS from Continuing Operations (1) (2) Diluted net income per share from continuing operations, as reported $ 0.13 $ 0.06 Elimination of non-recurring tax adjustments 0.01 0.01 Restructuring costs - - Excise and sales tax expense - - Asset impairments - - Net legal settlements and related expenses - - Equity-based compensation 0.03 0.02 Amortization   0.02   0.02 Non-GAAP diluted EPS from continuing operations $ 0.18 $ 0.12     (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 and net legal settlements and related expenses. 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 SUBSIDIARIESRECONCILIATION OF NON-GAAP FINANCIAL MEASURESCONSTANT CURRENCY ADJUSTMENTS AND ORGANIC GROWTH             Prior Year Quarter Constant Currency Adjustments (3)   Q1 - 12(Constantcurrency)Impact offluctuations inforeign currencyexchange ratesQ1 - 12(Actual)(Unaudited, in thousands, except per share data)   Net Revenues $ 126,836 $ (233 ) $ 126,603 North America Net Revenue $ 85,740 $ (55 ) $ 85,685 Europe Net Revenue $ 26,392 $ (613 ) $ 25,779 Asia Pacific Net Revenue $ 14,704 $ 435 $ 15,139 Non-GAAP Operating Income $ 14,749 $ (153 ) $ 14,596 Non-GAAP Net Income from Continuing Operations $ 8,939 $ (8 ) $ 8,931 Non-GAAP Diluted EPS from Continuing Operations $ 0.18 $ - $ 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 (Q1 - 11) average exchange rates.   Sequential Quarter Constant Currency Adjustments (4)   Q1 - 12(Constantcurrency)Impact offluctuations inforeign currencyexchange ratesQ1 - 12(Actual)(Unaudited, in thousands)   Net Revenues $ 126,631 $ (28 ) $ 126,603   (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 - 11) average exchange rates.   Organic Growth (5)     March 31,2011Impact offluctuations inforeign currencyexchange ratesOrganic netrevenuegrowthMarch 31,2012Organic netrevenuegrowth rate(Unaudited, in thousands, except percentages)   Net Revenues, Three Months Ended $ 116,925 $ (233 ) $ 9,911 $ 126,603 8.5 %     (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