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Press release from PR Newswire

PGi Reports Second Quarter 2012 Results: Organic Revenues Grew 8.4%* to $127.0M; Non-GAAP Diluted EPS from Continuing Operations Grew Over 25% to $0.19*;

Thursday, July 19, 2012

PGi Reports Second Quarter 2012 Results: Organic Revenues Grew 8.4%* to $127.0M; Non-GAAP Diluted EPS from Continuing Operations Grew Over 25% to $0.19*;16:05 EDT Thursday, July 19, 2012New PGi SaaS Products, iMeet® and GlobalMeet®, Drive Year-over-Year Revenue Growth Company Reiterates Financial Outlook for 2012 Despite Foreign Currency HeadwindsATLANTA, July 19, 2012 /PRNewswire/ -- Premiere Global Services, Inc. (NYSE: PGI), a global leader in virtual meetings for over 20 years, today announced results for the second quarter ended June 30, 2012. (Logo: http://photos.prnewswire.com/prnh/20120628/MM33070LOGO )In the second quarter of 2012, net revenues increased to $127.0 million, compared to $119.0 million in the second quarter of 2011.  Diluted EPS from continuing operations was $0.14 and non-GAAP diluted EPS from continuing operations was $0.19* in the second quarter of 2012, compared to diluted EPS from continuing operations of $0.10 and non-GAAP diluted EPS from continuing operations of $0.15* in the second quarter of 2011.  "During the second quarter, we continued to maintain solid trends across our global business, in spite of growing macroeconomic pressures," said Boland T. Jones, PGi founder, chairman and CEO. "We continue to increase sales of iMeet and GlobalMeet, as well as grow our pipelines of new customer and strategic distribution partner opportunities. We remain optimistic in our outlook for the remainder of the year, as we continue to transition PGi toward a software as a service model."Second Quarter 2012 Accomplishments New PGi SaaS products, iMeet and GlobalMeet, represent significant portion of 8.4% organic revenue growth during the quarter;    Reported non-GAAP diluted EPS from continuing operations growth of over 25% as compared to the second quarter of 2011;   Launched iMeet 2.0 ? the second generation of our innovative, cloud-based video meeting product, which includes significant new features like Screen Share, Spotlight Cube, the Cloud Controls enterprise admin console and Auto-Connect? audio;   Launched GlobalMeet 3.0 ? the latest version of our integrated web and audio conferencing product, which includes an industry-leading new mobile meeting app for the iPad® among its many feature upgrades and enhancements;   Announced a new, multi-year strategic alliance with eircom, Ireland's leading provider of fixed and mobile telecommunications, who will offer PGi's entire suite of conferencing solutions, including iMeet and GlobalMeet, to its business customers;   Grew the annual revenue run-rate from iMeet and GlobalMeet by greater than 22% as compared to the first quarter of 2012;   iMeet recognized as the Silver award winner in the Best New Product category at the internationally renowned 2012 Edison Awards; and   Repurchased nearly one million shares of our common stock in the open market under our share repurchase plan.Six Month ResultsIn the first six months of 2012, net revenues totaled $253.6 million, compared to $235.9 million in the first six months of 2011.  Diluted EPS from continuing operations was $0.27 and non-GAAP diluted EPS from continuing operations was $0.37* in the first six months of 2012, compared to diluted EPS from continuing operations of $0.15 and non-GAAP diluted EPS from continuing operations of $0.26* in the first six months of 2011.  Financial OutlookThe 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. Despite increasing global macroeconomic pressures and the negative impact of foreign currency exchange rates, PGi maintained its financial outlook for 2012. Based on current trends and foreign currency exchange rates, PGi 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) 204-4317 (U.S. and Canada) or (913) 312-0643 (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 MeasuresTo 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.  iPad is a trademark of Apple, Inc., registered in the U.S. and other countries.About Premiere Global Services, Inc. ? PGiPGi has been a global leader in virtual meetings for more than 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 Ended   Six Months Ended   June 30,   June 30,  2012201120122011 (Unaudited)  (Unaudited) Net revenues$  127,015$    118,990$  253,618$    235,915Operating expenses: Cost of revenues (exclusive   of depreciation and   amortization shown   separately below)53,78849,315107,23896,657Selling and marketing32,99734,24767,03170,359General and administrative   (exclusive of expenses   shown separately below)15,93414,21731,21527,998Research and development3,5262,6276,9055,803Excise and sales tax expense118-11821Depreciation8,0117,71015,95615,435Amortization1,2121,7392,4323,449Restructuring costs(48)-113-Asset impairments20354554Net legal settlements and   related expenses62728272Total operating expenses115,620109,962231,135219,848Operating income11,3959,02822,48316,067Other (expense) income:Interest expense(1,789)(2,108)(3,561)(4,189)Interest income511926Other, net(179)(167)(249)(378)Total other expense(1,963)(2,264)(3,801)(4,541)Income from continuing operations   before income taxes9,4326,76418,68211,526Income tax expense2,7391,9115,7633,741Net income from continuing operations6,6934,85312,9197,785(Loss) income from discontinued   operations, net of taxes(226)36(273)5Net income$       6,467$         4,889$     12,646$         7,790BASIC WEIGHTED-AVERAGE   SHARES OUTSTANDING48,10350,17348,27950,465Basic net income (loss) per share (1)Continuing operations$         0.14$           0.10$         0.27$           0.15Discontinued operations--(0.01)-Net income per share$         0.13$           0.10$         0.26$           0.15DILUTED WEIGHTED-AVERAGE   SHARES OUTSTANDING48,55150,50848,74050,788Diluted net income (loss) per share (1)Continuing operations$         0.14$           0.10$         0.27$           0.15Discontinued operations--(0.01)-Net income per share$         0.13$           0.10$         0.26$           0.15(1)Column totals may not sum due to the effect of rounding on EPS. PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(in thousands, except share data)June 30,December 31, 20122011(Unaudited)ASSETSCURRENT ASSETSCash and equivalents$           24,001$           32,033Accounts receivable (less allowances of $781 and $613,   respectively)81,98372,518Prepaid expenses and other current assets15,01913,906Income taxes receivable1,6341,739Deferred income taxes, net3401,090Total current assets122,977121,286PROPERTY AND EQUIPMENT, NET103,360103,449OTHER ASSETSGoodwill295,875295,690Intangibles, net of amortization8,74410,906Deferred income taxes, net3,6003,474Other assets7,5568,016TOTAL ASSETS$         542,112$         542,821LIABILITIES AND SHAREHOLDERS' EQUITYCURRENT LIABILITIESAccounts payable$           46,645$           42,589Income taxes payable239962Accrued taxes, other than income taxes2,2133,611Accrued expenses28,71928,999Current maturities of long-term debt and capital lease obligations 4,2113,845Accrued restructuring costs1,4702,287Deferred income taxes, net10386Total current liabilities83,50782,679LONG-TERM LIABILITIESLong-term debt and capital lease obligations 186,677195,963Accrued restructuring costs1,2231,410Accrued expenses17,29717,249Deferred income taxes, net4,3171,783Total long-term liabilities209,514216,405SHAREHOLDERS' EQUITYCommon stock, $0.01 par value; 150,000,000 shares authorized,49,260,185 and 50,144,703 shares issued and outstanding, respectively496501Additional paid-in capital468,193475,013Accumulated other comprehensive gain10,34210,809Accumulated deficit(229,940)(242,586)Total shareholders' equity249,091243,737TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$         542,112$         542,821 PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)Six Months EndedJune 30, 20122011(Unaudited)CASH FLOWS FROM OPERATING ACTIVITIESNet income $       12,646$          7,790Loss (income) from discontinued operations, net of taxes273(5) Net income from continuing operations 12,9197,785Adjustments to reconcile net income to net cash provided by   operating activities:Depreciation15,95615,435Amortization2,4323,449Amortization of debt issuance costs 295468Net legal settlements and related expenses8212Payments for legal settlements and related expenses(17)(12)Deferred income taxes3,342655Restructuring costs113-Payments for restructuring costs (1,152)(4,540)Asset impairments4554Equity-based compensation4,1843,587Excess tax benefits from share-based payment arrangements(264)-Provision for doubtful accounts576378Changes in assets and liabilities, net of effect of acquisitions   and dispositions:Changes in working capital(9,344)(7,119)Net cash provided by operating activities from   continuing operations29,16720,152Net cash (used in) provided by operating activities from   discontinued operations(630)27     Net cash provided by operating activities28,53720,179CASH FLOWS FROM INVESTING ACTIVITIESCapital expenditures(15,018)(15,306)Other investing activities(346)(1,094)Business dispositions-1,951Net cash used in investing activities from continuing   operations(15,364)(14,449)Net cash used in investing activities from discontinued   operations(60)-     Net cash used in investing activities(15,424)(14,449)CASH FLOWS FROM FINANCING ACTIVITIESPrincipal payments under borrowing arrangements(35,140)(30,790)Proceeds from borrowing arrangements24,72944,971Payments of debt issuance costs(23)-Excess tax benefits of share-based payment arrangements264-Purchase of treasury stock, at cost(11,437)(11,992)Exercise of stock options853-Net cash (used in) provided by financing activities from   continuing operations(20,754)2,189Net cash used in financing activities from discontinued   operations--    Net cash (used in) provided by financing activities(20,754)2,189Effect of exchange rate changes on cash and equivalents(391)998NET (DECREASE) INCREASE IN CASH AND EQUIVALENTS(8,032)8,917CASH AND EQUIVALENTS, beginning of period32,03315,101CASH AND EQUIVALENTS, end of period$       24,001$       24,018 PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIESRECONCILIATION OF NON-GAAP FINANCIAL MEASURES(in thousands, except per share data)Three Months Ended Six Months Ended June 30, June 30, 2012201120122011(Unaudited)(Unaudited)Non-GAAP Operating   Income (1)Operating income,   as reported $      11,395$        9,028$      22,483$      16,067Restructuring costs (48)-113-Excise and sales tax   expense118-11821Asset impairments20354554Net legal settlements   and related   expenses62728272Equity-based   compensation2,1021,7954,1843,587Amortization1,2121,7392,4323,449Non-GAAP   operating   income$      14,861$      12,669$      29,457$      23,250Non-GAAP Net Income   from Continuing   Operations (1)Net income from   continuing   operations, as   reported$        6,693$        4,853$      12,919$        7,785Elimination of non-   recurring tax   adjustments(91)-158485Restructuring costs(34)-79-Excise and sales tax   expense83-8315Asset impairments14253239Net legal settlements   and related   expenses43525752Equity-based   compensation1,4711,2882,9292,574Amortization8481,2481,7022,475Non-GAAP   net income   from   continuing   operations$        9,027$        7,466$      17,959$      13,425Non-GAAP Diluted EPS   from Continuing   Operations (1) (2)Diluted net income per   share from   continuing   operations, as   reported$           0.14$           0.10$           0.27$          0.15Elimination of non-   recurring tax   adjustments---0.01Restructuring costs----Excise and sales tax   expense----Asset impairments----Net legal settlements   and related   expenses----Equity-based   compensation0.030.030.060.05Amortization0.020.020.030.05Non-GAAP   diluted EPS   from   continuing   operations$           0.19$           0.15$           0.37$          0.26(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 GROWTHPrior Year Quarter Constant Currency Adjustments (3)Impact offluctuations in foreign currency exchange ratesQ2 - 12 (Constant currency)Q2 - 12 (Actual)(Unaudited, in thousands, except per share data)Net Revenues$          128,981$                      (1,966)$      127,015North America Net Revenue$            84,739$                         (155)$        84,584Europe Net Revenue$            28,324$                      (1,585)$        26,739Asia Pacific Net Revenue$            15,918$                         (226)$        15,692Non-GAAP Operating Income$            14,953$                           (92)$        14,861Non-GAAP Net Income from Continuing Operations$               9,083$                           (56)$          9,027Non-GAAP Diluted EPS from Continuing Operations$                 0.19$                               -$            0.19(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 - 11) average exchange rates.Sequential Quarter Constant Currency Adjustments (4)Impact of fluctuations in foreign currency exchange ratesQ2 - 12 (Constant currency)Q2 - 12 (Actual)(Unaudited, in thousands)Net Revenues$          127,586$                        (571)$     127,015(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 - 12) average exchange rates.Organic Growth (5)Impact offluctuations in foreign currency exchange ratesJune 30, 2011Organic net revenue growthJune 30,2012Organic net revenue growth rate(Unaudited, in thousands, except percentages)Net Revenues, Three Months Ended$          118,990$                     (1,966)$          9,991$         127,0158.4% Net Revenues, Six Months Ended$          235,915$                     (2,199)$        19,902$         253,6188.4%(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. Investor Calls Sean O'Brien Executive Vice President Strategy & Communications (404) 262-8462 SOURCE PGi