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PGi Reports Fourth Quarter and Fiscal Year 2012 Results: Q4 Organic Revenues Grew Over 6%* to $125.8M, Non-GAAP Diluted EPS from Continuing Operations $0.18*

Wednesday, February 13, 2013

PGi Reports Fourth Quarter and Fiscal Year 2012 Results: Q4 Organic Revenues Grew Over 6%* to $125.8M, Non-GAAP Diluted EPS from Continuing Operations $0.18*16:05 EST Wednesday, February 13, 2013Company Sees Solid Organic Growth and Higher Profitability in 2013ATLANTA, Feb. 13, 2013 /PRNewswire/ -- Premiere Global Services, Inc. (NYSE: PGI), a global leader in virtual meetings for over 20 years, today announced results for the fourth quarter and fiscal year ended December 31, 2012. In the fourth quarter of 2012, net revenues increased nearly 6% to $125.8 million, compared to $118.7 million in the fourth quarter of 2011.  Diluted EPS from continuing operations was $0.20 in the fourth quarter of 2012, compared to $0.07 in the fourth quarter of 2011.  Non-GAAP diluted EPS from continuing operations was $0.18* in the fourth quarter of 2012, compared to $0.18* in the fourth quarter of 2011.  "We are pleased with our solid financial performance in 2012, as we continued to grow across all regions and product lines and to generate operating leverage in our business," said Boland T. Jones, PGi founder, chairman and CEO. "Last year, we also made meaningful strategic progress in transitioning PGi toward a software as a service model, with increasing momentum of our next-generation virtual meeting solutions, iMeet® and GlobalMeet®, in the global market." "This year, we plan to continue to enhance our suite of PGi software products that will open new market opportunities and further position PGi as a global leader in business collaboration. We are optimistic in our outlook, and we see 2013 as another year of solid organic growth and higher profitability for PGi."2012 Financial ResultsIn 2012, net revenues increased 6.6% to $505.3 million, compared to $473.8 million in 2011.  Diluted EPS from continuing operations was $0.58 in 2012, compared to diluted EPS from continuing operations of $0.34 in 2011. Non-GAAP diluted EPS from continuing operations increased 17.7% to $0.73* in 2012, compared to non-GAAP diluted EPS from continuing operations of $0.62* in 2011.  2012 Accomplishments Reported our highest annual organic revenue growth in four years, with organic revenue increasing 7.5%* as compared to 2011; Reported non-GAAP diluted EPS from continuing operations growth of nearly 18%* as compared to 2011; Grew total meetings hosted by nearly 30% as compared to 2011; More than doubled the revenue run-rate from iMeet and GlobalMeet, exiting 2012 with an annual revenue run-rate of nearly $23 million from these solutions; Earned multiple awards and accolades for our product innovation, including: iMeet awarded Silver for Best New Product by Edison Awards; PGi awarded the Silver Stevie® Award for Most Innovative Tech Company of the Year by the American Business AwardsSM; PGi awarded the Bronze Stevie® Award for Most Innovative Company of the Year in Canada and the U.S.A. by the International Business AwardsSM; and PGi named one of the InformationWeek® Top 250 Innovators of the Year. 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; Announced a 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; Established a new open market share repurchase program for up to 5.0 million shares of our common stock; and Repurchased nearly 3.2 million shares of common stock in the open market under our prior share repurchase plan.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 2013 will be in the range of $525-$535 million and non-GAAP diluted EPS from continuing operations will be in the range of $0.81-$0.85*.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) 278-8475 (U.S. and Canada) or (913) 312-0390 (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 over 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 over 40,000 enterprise customers, including 75% of the Fortune 100?.  In the last five years, PGi has hosted nearly one billion people from 137 countries in over 200 million meetings. For more information, visit PGi 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 Calls Sean O'Brien Executive Vice President Strategy & Communications (404) 262-8462 PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share data) Three Months Ended   Twelve Months Ended   December 31,  December 31, 2012201120122011 (Unaudited)  (Unaudited) Net revenues$  125,771$    118,735$  505,281$    473,834Operating expenses: Cost of revenues (exclusive of depreciation and amortization shownseparately below)54,11049,227215,154195,822Selling and marketing31,87531,492130,631134,018General and administrative (exclusive of expensesshown separately below)16,34214,76763,41257,176Research and development3,7412,78414,34911,521Excise and sales tax expense203-321352Depreciation8,2757,65932,48230,831Amortization7421,3043,9816,365Restructuring costs(91)809612847Asset impairments138340879456Net legal settlements and related expenses1833752,034490Total operating expenses115,518108,757463,855437,878Operating income10,2539,97841,42635,956Other (expense) income:Interest expense(1,763)(3,573)(7,167)(9,954)Interest income30124946Other, net(277)(339)(808)(574)Total other expense(2,010)(3,900)(7,926)(10,482)Income from continuing operations before income taxes8,2436,07833,50025,474Income tax (benefit) expense(1,173)2,7975,4458,586Net income from continuing operations9,4163,28128,05516,888(Loss) income from discontinued operations, net of taxes(131)(2,194)(465)4,546Net income$       9,285$         1,087$     27,590$       21,434BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING46,54648,54047,59649,619Basic net income (loss) per share (1)Continuing operations$         0.20$           0.07$         0.59$           0.34Discontinued operations-(0.05)(0.01)0.09 Net income per share$         0.20$           0.02$         0.58$           0.43DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING47,10348,97048,09249,971Diluted net income (loss) per share (1)Continuing operations$         0.20$           0.07$         0.58$           0.34Discontinued operations-(0.04)(0.01)0.09Net income per share$         0.20$           0.02$         0.57$           0.43(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)December 31, December 31, 20122011(Unaudited)ASSETSCURRENT ASSETSCash and equivalents$           20,976$           32,033Accounts receivable (less allowances of $834 and $613, respectively)75,14972,518Prepaid expenses and other current assets18,24513,906Income taxes receivable1,2721,739Deferred income taxes, net2,5661,090Total current assets118,208121,286PROPERTY AND EQUIPMENT, NET104,613103,449OTHER ASSETSGoodwill297,773295,690Intangibles, net of amortization7,38410,906Deferred income taxes, net5,8483,474Other assets7,9428,016TOTAL ASSETS$         541,768$         542,821          LIABILITIES AND SHAREHOLDERS' EQUITYCURRENT LIABILITIESAccounts payable$           48,166$           42,589Income taxes payable1,116962Accrued taxes, other than income taxes4,3333,611Accrued expenses32,09328,999Current maturities of long-term debt and capital lease obligations 3,1373,845Accrued restructuring costs1,0402,287Deferred income taxes, net15386Total current liabilities89,90082,679LONG-TERM LIABILITIESLong-term debt and capital lease obligations 179,832195,963Accrued restructuring costs1171,410Accrued expenses19,66117,249Deferred income taxes, net541,783Total long-term liabilities199,664216,405SHAREHOLDERS' EQUITYCommon stock, $0.01 par value; 150,000,000 shares authorized,47,745,592 and 50,144,703 shares issued and outstanding, respectively477501Additional paid-in capital453,621475,013Accumulated other comprehensive gain13,10210,809Accumulated deficit(214,996)(242,586)Total shareholders' equity252,204243,737TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$         541,768$         542,821PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)Twelve Months EndedDecember 31, 20122011(Unaudited)CASH FLOWS FROM OPERATING ACTIVITIESNet income $       27,590$       21,434Loss (income) from discontinued operations, net of taxes465(4,546) Net income from continuing operations 28,05516,888Adjustments to reconcile net income to net cash provided by operating activities:Depreciation32,48230,831Amortization3,9816,365Amortization of debt issuance costs 592926Write-off of unamortized debt issuance costs-743Net legal settlements and related expenses2,034399Payments for legal settlements and related expenses(1,512)(246)Deferred income taxes(5,333)2,388Restructuring costs612847Payments for restructuring costs (3,213)(6,779)Asset impairments879456Equity-based compensation8,0746,757Excess tax benefits from share-based payment arrangements(367)-Provision for doubtful accounts1,089626Changes in assets and liabilities, net of effect of acquisitions and dispositions:Accounts receivable, net(3,581)(8,937)Other assets and liabilities(2,404)3,900Accounts payable and accrued expenses9,1333,565Net cash provided by operating activities from continuing operations70,52158,729Net cash used in operating activities from discontinued operations(672)(792)Net cash provided by operating activities69,84957,937CASH FLOWS FROM INVESTING ACTIVITIESCapital expenditures(32,338)(30,100)Other investing activities(1,273)(1,709)Business dispositions-1,902Net cash used in investing activities from continuing operations(33,611)(29,907)Net cash used in investing activities from discontinued operations(60)(276)Net cash used in investing activities(33,671)(30,183)CASH FLOWS FROM FINANCING ACTIVITIESPrincipal payments under borrowing arrangements(94,655)(70,793)Proceeds from borrowing arrangements75,92985,971Payments of debt issuance costs(23)(1,469)Excess tax benefits of share-based payment arrangements367-Purchase of treasury stock, at cost(29,915)(23,852)Exercise of stock options932614Net cash used in financing activities from continuing operations(47,365)(9,529)Net cash used in financing activities from discontinued operations-(140)Net cash used in financing activities(47,365)(9,669)Effect of exchange rate changes on cash and equivalents130(1,153)NET (DECREASE) INCREASE IN CASH AND EQUIVALENTS(11,057)16,932CASH AND EQUIVALENTS, beginning of period32,03315,101CASH AND EQUIVALENTS, end of period$       20,976$       32,033PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIESRECONCILIATION OF NON-GAAP FINANCIAL MEASURES(in thousands, except per share data)Three Months Ended Twelve Months Ended December 31,December 31,2012201120122011(Unaudited)(Unaudited)Non-GAAP Operating Income (1)Operating income, as reported $      10,253$        9,978$      41,426$      35,956Restructuring costs (91)809612847Excise and sales tax expense203-321352Asset impairments138340879456Net legal settlements and related expenses1833752,034490Equity-based compensation1,9611,5488,0746,757Amortization7421,3043,9816,365Non-GAAP operating income$      13,389$      14,354$      57,327$      51,223Non-GAAP Net Income from Continuing Operations (1)Net income from continuing operations, as reported$        9,416$        3,281$      28,055$      16,888Elimination of non-recurring tax adjustments(3,376)1,217(4,354)1,672Restructuring costs(67)599433617Excise and sales tax expense149-227256Excise and sales tax interest---117Asset impairments101252622332Net legal settlements and related expenses1342781,439357Equity-based compensation1,4371,1465,7124,923Amortization5449652,8174,638Debt refinance costs and other non-recurring interest-978-962Non-GAAP net income from continuing operations$        8,338$        8,716$      34,951$      30,762Non-GAAP Diluted EPS from Continuing Operations (1) (2)Diluted net income per share from continuing operations, as reported$           0.20$           0.07$           0.58$          0.34Elimination of non-recurring tax adjustments(0.07)0.02(0.09)0.03Restructuring costs-0.010.010.01Excise and sales tax expense---0.01Excise and sales tax interest----Asset impairments-0.010.010.01Net legal settlements and related expenses-0.010.030.01Equity-based compensation0.030.020.120.10Amortization0.010.020.060.09Debt refinance costs and other non-recurring interest-0.02-0.02Non-GAAP diluted EPS from continuing operations$           0.18$           0.18$           0.73$          0.62(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, excise and sales tax company's ongoing operations, including non-recurring tax adjustments, restructuring costs, excise and sales tax expense, excise and sales tax interest, asset impairments, net legal settlements and related expenses 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 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 ofQ4 - 12 (Constant currency)fluctuations in foreign currency exchange ratesQ4 - 12 (Actual)(Unaudited, in thousands, except per share data)Net Revenues$          125,988$(217)$     125,771North America Net Revenue$            82,477$102$       82,579Europe Net Revenue$            27,730$(302)$       27,428Asia Pacific Net Revenue$            15,781$(17)$       15,764Non-GAAP Operating Income$            13,379$10$       13,389Non-GAAP Net Income from Continuing Operations$              8,247$91$         8,338Non-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 (Q4 - 11) average exchange rates.Sequential Quarter Constant Currency Adjustments (4)Impact of Q4 - 12 (Constant currency)fluctuations in foreign currency exchange ratesQ4 - 12 (Actual)(Unaudited, in thousands)Net Revenues$          125,313$                     458$     125,771(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 - 12) average exchange rates.Organic Growth (5)December 31, 2011Impact offluctuations in foreign currency exchange ratesOrganic net revenue growthDecember 31,2012Organic net revenue growth rate(Unaudited, in thousands, except percentages)Net Revenues, Three Months Ended$          118,735$                       (217)$         7,253$     125,7716.1% Net Revenues, Twelve Months Ended$          473,834$                    (4,082)$       35,529$      505,2817.5%(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. The Company did not make any acquisitions during the period presented.(Logo: http://photos.prnewswire.com/prnh/20120628/MM33070LOGO )  SOURCE Premiere Global Services, Inc.