Press release from PR Newswire
PGi Reports Third Quarter 2012 Results: Organic Revenues Grew 7.0%* to $125.9M; Non-GAAP Diluted EPS from Continuing Operations $0.18*
Thursday, October 18, 2012
PGi Reports Third Quarter 2012 Results: Organic Revenues Grew 7.0%* to $125.9M; Non-GAAP Diluted EPS from Continuing Operations $0.18*16:05 EDT Thursday, October 18, 2012ATLANTA, Oct. 18, 2012 /PRNewswire/ -- Premiere Global Services, Inc. (NYSE: PGI), a global leader in virtual meetings for over 20 years, today announced results for the third quarter ended September 30, 2012. In the third quarter of 2012, net revenues increased to $125.9 million, compared to $119.2 million in the third quarter of 2011. Diluted EPS from continuing operations was $0.12 and non-GAAP diluted EPS from continuing operations was $0.18* in the third quarter of 2012, compared to diluted EPS from continuing operations of $0.12 and non-GAAP diluted EPS from continuing operations of $0.18* in the third quarter of 2011. "We maintained solid trends across our global business in the third quarter, despite the typical seasonal pressure of the summer months," said Boland T. Jones, PGi founder, chairman and CEO. "Sales of iMeet® and GlobalMeet® continue to grow, as a result of an increasing demand by business professionals looking for simpler, more intuitive ways to meet and collaborate online, wherever and whenever they want. We remain optimistic in our outlook for the fourth quarter and for 2013, as we continue to grow and transition PGi toward a software as a service model."Third Quarter 2012 Accomplishments Reported 7.0% organic revenue growth as compared to the third quarter of 2011; Grew total meetings hosted by over 30% as compared to the third quarter of 2011; Grew the annual revenue run-rate from iMeet and GlobalMeet by greater than 17% as compared to the second quarter of 2012; PGi recognized as the Silver Stevie® Award winner for "Most Innovative Tech Company of the Year" at the 2012 American Business Awards?; and Repurchased nearly 800,000 shares of our common stock in the open market under our share repurchase plan.Nine Month ResultsIn the first nine months of 2012, net revenues totaled $379.5 million, compared to $355.1 million in the first nine months of 2011. Diluted EPS from continuing operations was $0.38 and non-GAAP diluted EPS from continuing operations was $0.55* in the first nine months of 2012, compared to diluted EPS from continuing operations of $0.27 and non-GAAP diluted EPS from continuing operations of $0.44* in the first nine 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.Based on current business trends and current foreign currency exchange rates, PGi anticipates net revenues from continuing operations in 2012 will be in the range of $504-$507 million and non-GAAP diluted EPS from continuing operations will be in the range of $0.73-$0.74*.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: (800) 776-0487 (U.S. and Canada) or (913) 312-0658 (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. 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 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 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.Investor CallsSean O'BrienExecutive Vice PresidentStrategy & Communications(404) 262-8462 PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2012201120122011 (Unaudited) (Unaudited) Net revenues$ 125,892$ 119,184$ 379,510$ 355,099Operating expenses: Cost of revenues (exclusive ofdepreciation and amortizationshown separately below)53,80649,938161,044146,595Selling and marketing31,72532,16798,756102,526General and administrative(exclusive of expenses shown separately below)15,85514,41147,07042,409Research and development3,7032,93410,6088,737Excise and sales tax expense-331118352Depreciation8,2517,73724,20723,172Amortization8071,6123,2395,061Restructuring costs5903870338Asset impairments69662741116Net legal settlements andrelated expenses1,769431,851115Total operating expenses117,202109,273348,337329,121Operating income8,6909,91131,17325,978Other (expense) income:Interest expense(1,843)(2,192)(5,404)(6,381)Interest income1071934Other, net(282)143(531)(235)Total other expense(2,115)(2,042)(5,916)(6,582)Income from continuing operationsbefore income taxes6,5757,86925,25719,396Income tax expense8552,0476,6185,789Net income from continuing operations5,7205,82218,63913,607(Loss) income from discontinuedoperations, net of taxes(61)6,735(334)6,740Net income$ 5,659$ 12,557$ 18,305$ 20,347BASIC WEIGHTED-AVERAGESHARES OUTSTANDING47,29749,03347,94949,982Basic net income (loss) per share (1)Continuing operations$ 0.12$ 0.12$ 0.39$ 0.27Discontinued operations-0.14(0.01)0.13Net income per share$ 0.12$ 0.26$ 0.38$ 0.41DILUTED WEIGHTED-AVERAGESHARES OUTSTANDING47,80049,36648,42450,308Diluted net income (loss) per share (1)Continuing operations$ 0.12$ 0.12$ 0.38$ 0.27Discontinued operations-0.14(0.01)0.13Net income per share$ 0.12$ 0.25$ 0.38$ 0.40(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)September 30,December 31,20122011(Unaudited)ASSETSCURRENT ASSETSCash and equivalents$ 33,144$ 32,033Accounts receivable (less allowances of $749 and $613,respectively)84,97472,518Prepaid expenses and other current assets18,11613,906Income taxes receivable6611,739Deferred income taxes, net1,7021,090Total current assets138,597121,286PROPERTY AND EQUIPMENT, NET102,609103,449OTHER ASSETSGoodwill297,436295,690Intangibles, net of amortization7,96210,906Deferred income taxes, net4,2903,474Other assets8,6908,016TOTAL ASSETS$ 559,584$ 542,821LIABILITIES AND SHAREHOLDERS' EQUITYCURRENT LIABILITIESAccounts payable$ 46,770$ 42,589Income taxes payable158962Accrued taxes, other than income taxes2,9753,611Accrued expenses28,58328,999Current maturities of long-term debt and capital lease obligations 3,9263,845Accrued restructuring costs2,2052,287Deferred income taxes, net72386Total current liabilities84,68982,679LONG-TERM LIABILITIESLong-term debt and capital lease obligations 200,147195,963Accrued restructuring costs3531,410Accrued expenses17,07417,249Deferred income taxes, net5,7131,783Total long-term liabilities223,287216,405SHAREHOLDERS' EQUITYCommon stock, $0.01 par value; 150,000,000 shares authorized,48,431,753 and 50,144,703 shares issued and outstanding,respectively484501Additional paid-in capital462,368475,013Accumulated other comprehensive gain13,03710,809Accumulated deficit(224,281)(242,586)Total shareholders' equity251,608243,737TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$ 559,584$ 542,821 PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)Nine Months EndedSeptember 30, 20122011(Unaudited)CASH FLOWS FROM OPERATING ACTIVITIESNet income $ 18,305$ 20,347Loss (income) from discontinued operations, net of taxes334(6,740) Net income from continuing operations 18,63913,607Adjustments to reconcile net income to net cash provided by operatingactivities:Depreciation24,20723,172Amortization3,2395,061Amortization of debt issuance costs 443702Net legal settlements and related expenses1,85136Payments for legal settlements and related expenses(101)(36)Deferred income taxes2,9071,411Restructuring costs70338Payments for restructuring costs (1,887)(5,673)Asset impairments741116Equity-based compensation6,1135,209Excess tax benefits from share-based payment arrangements(267)-Provision for doubtful accounts828456Changes in working capital(14,412)(4,528)Net cash provided by operating activities from continuingoperations43,00439,571Net cash used in operating activities from discontinuedoperations(668)(591)Net cash provided by operating activities42,33638,980CASH FLOWS FROM INVESTING ACTIVITIESCapital expenditures(24,154)(23,304)Other investing activities(1,479)(1,222)Business dispositions-1,903Net cash used in investing activities from continuing operations(25,633)(22,623)Net cash used in investing activities from discontinuedoperations(60)-Net cash used in investing activities(25,693)(22,623)CASH FLOWS FROM FINANCING ACTIVITIESPrincipal payments under borrowing arrangements(53,011)(50,067)Proceeds from borrowing arrangements55,52968,971Payments of debt issuance costs(23)-Excess tax benefits of share-based payment arrangements267-Purchase of treasury stock, at cost(19,358)(20,911)Exercise of stock options932-Net cash used in financing activities from continuing operations(15,664)(2,007)Net cash used in financing activities from discontinuedoperations--Net cash used in financing activities(15,664)(2,007)Effect of exchange rate changes on cash and equivalents132(437)NET INCREASE IN CASH AND EQUIVALENTS1,11113,913CASH AND EQUIVALENTS, beginning of period32,03315,101CASH AND EQUIVALENTS, end of period$ 33,144$ 29,014 PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIESRECONCILIATION OF NON-GAAP FINANCIAL MEASURES(in thousands, except per share data)Three Months EndedNine Months Ended September 30, September 30, 2012201120122011(Unaudited)(Unaudited)Non-GAAP Operating Income (1)Operating income, as reported $ 8,690$ 9,911$ 31,173$ 25,978Restructuring costs 5903870338Excise and sales tax expense-331118352Asset impairments69662741116Net legal settlements and relatedexpenses1,769431,851115Equity-based compensation1,9291,6226,1135,209Amortization8071,6123,2395,061 Non-GAAP operating income$ 14,481$ 13,619$ 43,938$ 36,869Non-GAAP Net Income fromContinuing Operations (1)Net income from continuingoperations, as reported$ 5,720$ 5,822$ 18,639$ 13,607Elimination of non-recurring taxadjustments(1,118)-(959)451Restructuring costs4132849228Excise and sales tax expense-24583255Excise and sales tax interest-118-116Asset impairments4874651984Net legal settlements and relatedexpenses1,238321,29683Equity-based compensation1,3501,2004,2793,775Amortization5651,1932,2673,668 Non-GAAP net income from continuing operations$ 8,655$ 8,684$ 26,616$ 22,067Non-GAAP Diluted EPS fromContinuing Operations (1) (2)Diluted net income per share fromcontinuing operations, as reported$ 0.12$ 0.12$ 0.38$ 0.27Elimination of non-recurring taxadjustments(0.02)-(0.02)0.01Restructuring costs0.01-0.01-Excise and sales tax expense-0.01-0.01Excise and sales tax interest----Asset impairments0.01-0.01-Net legal settlements and relatedexpenses0.03-0.03-Equity-based compensation0.030.020.090.08Amortization0.010.020.050.07 Non-GAAP diluted EPS from continuing operations$ 0.18$ 0.18$ 0.55$ 0.44(1) Management believes that presenting non-GAAP operating income, non-GAAP net income from continuingoperations and non-GAAP diluted EPS from continuing operations provide useful information regardingunderlying trends in the company's continuing operations. Management expects equity-based compensation andamortization expenses to be recurring costs and presents non-GAAP net income from continuing operationsand non-GAAP diluted EPS from continuing operations to exclude these non-cash items as well asnon-recurring items that are unrelated to the company's ongoing operations, including non-recurring taxadjustments, restructuring costs, excise and sales tax expense, excise and sales tax interest, assetimpairments and net legal settlements and related expenses. These non-cash and non-recurring items arepresented net of taxes for non-GAAP net income from continuing operations and non-GAAP diluted EPS fromcontinuing 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 ofQ3 - 12 (Constant currency)fluctuations inforeign currencyexchange ratesQ3 - 12 (Actual)(Unaudited, in thousands, except per share data)Net Revenues$ 127,558$ (1,666)$ 125,892North AmericaNet Revenue$ 84,036$ (48)$ 83,988Europe NetRevenue$ 26,988$ (1,446)$ 25,542Asia Pacific NetRevenue$ 16,534$ (172)$ 16,362Non-GAAPOperatingIncome$ 14,317$ 164$ 14,481Non-GAAP NetIncome fromContinuingOperations$ 8,782$ (127)$ 8,655Non-GAAPDiluted EPS fromContinuingOperations$ 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 (Q3 - 11) average exchange rates.Sequential Quarter Constant Currency Adjustments (4) Impact of Q3 - 12 (Constant currency)fluctuations in foreign currency exchange ratesQ3 - 12 (Actual)(Unaudited, in thousands)Net Revenues$ 125,809$ 83$ 125,892(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 (Q2 - 12) average exchange rates.Organic Growth (5)Impact ofSeptember 30, 2011fluctuations in foreign currency exchange ratesOrganic net revenue growthSeptember 30,2012Organic netrevenuegrowth rate(Unaudited, in thousands, except percentages)Net Revenues, Three Months Ended$ 119,184$ (1,666)$ 8,374$ 125,8927.0% Net Revenues, Nine Months Ended$ 355,099$ (3,865)$ 28,276$ 379,5108.0%(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. (Logo: http://photos.prnewswire.com/prnh/20120628/MM33070LOGO ) SOURCE Premiere Global Services, Inc.