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Press release from PR Newswire

PGi Reports First Quarter 2013 Results: Revenues $129.5M, Non-GAAP Diluted EPS from Continuing Operations $0.19*

Thursday, April 18, 2013

PGi Reports First Quarter 2013 Results: Revenues $129.5M, Non-GAAP Diluted EPS from Continuing Operations $0.19*

16:05 EDT Thursday, April 18, 2013

Company Revises 2013 Financial Outlook to Reflect Recent Changes in Foreign Currency Exchange Rates

ATLANTA, April 18, 2013 /PRNewswire/ -- Premiere Global Services, Inc. (NYSE: PGI), a global leader in virtual meetings for over 20 years, today announced results for the first quarter ended March 31, 2013.

In the first quarter of 2013, net revenues totaled $129.5 million, compared to $126.6 million in the first quarter of 2012.  Diluted EPS from continuing operations was $0.15 in the first quarter of 2013, compared to diluted EPS from continuing operations of $0.13 in the first quarter of 2012.  Non-GAAP diluted EPS from continuing operations was $0.19* in the first quarter of 2013, compared to non-GAAP diluted EPS from continuing operations of $0.18* in the first quarter of 2012.

"We are pleased with our first quarter performance, as we continued to execute our strategy for growth," said Boland T. Jones, PGi founder, chairman and CEO. "This year, we remain focused on continuing to enhance and expand our suite of PGi collaboration software products, while at the same time driving new distribution and growth opportunities for our award-winning products, iMeet® and GlobalMeet®. We remain optimistic in our outlook for 2013 and beyond."

First Quarter 2013 Accomplishments

  • Nearly doubled revenue from iMeet and GlobalMeet in the first quarter of 2013 as compared to the first quarter of 2012;
  • Exited the first quarter of 2013 with an annual revenue run-rate of nearly $26 million from iMeet and GlobalMeet;
  • iMeet named a Top 10 mobile application at 2013 International CES® Mobile Apps Showdown;
  • PGi named a Top 10 Most Innovative Technology Company in Georgia by the Technology Association of Georgia (TAG);
  • Launched iMeet integrated with the Plantronics® Voyager Legend? UC headset, bringing a more natural and intuitive virtual meeting experience to users worldwide; 
  • Released a new, native iMeet app for Android?-powered phones in the Google Play? Store, enabling users to start and manage their meetings from anywhere in the world and solidifying iMeet's position as an anywhere-collaboration product for businesses of all sizes; and
  • Announced a multi-year strategic alliance with TeliaSonera, a leading provider of network access and telecommunication services in the Nordic and Baltic countries, to bring PGi's virtual meeting solutions to TeliaSonera's business and consumer customers in these regions.

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.

Recent foreign currency exchange rate fluctuations have negatively impacted the guidance PGi previously provided on February 13, 2013 by approximately $5 million. As a result, PGi has updated its financial outlook for 2013. Based on current business trends and current foreign currency exchange rates, PGi anticipates that net revenues from continuing operations in 2013 will be in the range of $520-$530 million and non-GAAP diluted EPS from continuing operations will be in the range of $0.80-$0.84*.

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) 580-5706 (U.S. and Canada) or (913) 312-0957 (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. PGi's 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 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 our cloud-based, virtual meeting solutions, including our iMeet® and GlobalMeet® solutions; our ability to attract new customers and to retain and further penetrate our existing customers; our ability to establish and maintain strategic reseller relationships; 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 and privacy of our customer's confidential information; future write-downs of goodwill or other intangible assets; greater than anticipated tax and regulatory liabilities; restructuring and cost reduction initiatives and the market reaction thereto; our level of indebtedness; risks associated with acquisitions and divestitures; indemnification claims from 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, 2012. All forward-looking statements attributable to us or a person acting on our behalf are expressly qualified in their entirety by this cautionary statement.

All third party trademarks used herein are the property of their respective owners.

  

PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

 Three Months Ended  

 March 31, 

2013

2012

 (Unaudited) 

Net revenues

$ 129,492

$ 126,603

Operating expenses: 

Cost of revenues (exclusive of depreciation and amortization shown

separately below)

55,507

53,450

Selling and marketing

34,163

34,034

General and administrative (exclusive of expenses

shown separately below)

15,493

15,281

Research and development

3,723

3,379

Depreciation

8,239

7,945

Amortization

462

1,220

Restructuring costs

70

161

Asset impairments

144

25

Net legal settlements and related expenses

120

20

Total operating expenses

117,921

115,515

Operating income

11,571

11,088

Other (expense) income:

Interest expense

(1,801)

(1,772)

Interest income

21

4

Other, net

30

(70)

Total other expense

(1,750)

(1,838)

Income from continuing operations before income taxes

9,821

9,250

Income tax expense

2,640

3,024

Net income from continuing operations

7,181

6,226

Loss from discontinued operations, net of taxes

(103)

(47)

Net income

$      7,078

$      6,179

BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING

46,087

48,455

Basic net income per share (1)

Continuing operations

$        0.16

$        0.13

Discontinued operations

-

-

Net income per share

$        0.15

$        0.13

DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING

46,515

48,929

Diluted net income per share (1)

Continuing operations

$        0.15

$        0.13

Discontinued operations

-

-

Net income per share

$        0.15

$        0.13

(1)

Column totals may not sum due to the effect of rounding on EPS.

 

PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

March 31, 

December 31, 

2013

2012

(Unaudited)

ASSETS

CURRENT ASSETS

Cash and equivalents

$       21,456

$            20,976

Accounts receivable (less allowances of $657 and $834, respectively)

81,506

75,149

Prepaid expenses and other current assets

21,748

18,245

Income taxes receivable

2,025

1,272

Deferred income taxes, net

8,515

9,852

Total current assets

135,250

125,494

PROPERTY AND EQUIPMENT, NET

104,076

104,613

OTHER ASSETS

Goodwill

296,371

297,773

Intangibles, net of amortization

6,976

7,384

Deferred income taxes, net

1,824

2,597

Other assets

7,028

7,942

TOTAL ASSETS

$     551,525

$          545,803

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable

$       54,689

$            48,166

Income taxes payable

378

1,116

Accrued taxes, other than income taxes

4,804

4,333

Accrued expenses

28,595

32,093

Current maturities of long-term debt and capital lease obligations 

2,403

3,137

Accrued restructuring costs

466

1,040

Deferred income taxes, net

15

15

Total current liabilities

91,350

89,900

LONG-TERM LIABILITIES

Long-term debt and capital lease obligations 

179,498

179,832

Accrued restructuring costs

95

117

Accrued expenses

15,001

15,541

Deferred income taxes, net

8,400

8,209

Total long-term liabilities

202,994

203,699

SHAREHOLDERS' EQUITY

Common stock, $0.01 par value; 150,000,000 shares authorized,

48,126,367 and 47,745,592 shares issued and outstanding, respectively

481

477

Additional paid-in capital

454,181

453,621

Accumulated other comprehensive gain

10,437

13,102

Accumulated deficit

(207,918)

(214,996)

Total shareholders' equity

257,181

252,204

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$     551,525

$          545,803

 

PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (in thousands)

Three Months Ended

March 31, 

2013

2012

(Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES

Net income 

$   7,078

$   6,179

Loss from discontinued operations, net of taxes

103

47

 Net income from continuing operations 

7,181

6,226

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

8,239

7,945

Amortization

462

1,220

Amortization of debt issuance costs 

148

147

Net legal settlements and related expenses

93

20

Payments for legal settlements and related expenses

(85)

(10)

Deferred income taxes

2,206

1,935

Restructuring costs

70

161

Payments for restructuring costs 

(660)

(622)

Asset impairments

144

25

Equity-based compensation

1,674

2,082

Excess tax benefits from share-based payment arrangements

(244)

(86)

Provision for doubtful accounts

(31)

357

Changes in working capital

(6,786)

(9,825)

Net cash provided by operating activities from continuing operations

12,411

9,575

Net cash used in operating activities from discontinued operations

(105)

(298)

Net cash provided by operating activities

12,306

9,277

CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditures

(8,796)

(7,497)

Other investing activities

(425)

(170)

Net cash used in investing activities from continuing operations

(9,221)

(7,667)

Net cash used in investing activities from discontinued operations

-

(60)

Net cash used in investing activities

(9,221)

(7,727)

CASH FLOWS FROM FINANCING ACTIVITIES

Principal payments under borrowing arrangements

(12,144)

(15,069)

Proceeds from borrowing arrangements

11,000

7,000

Payments of debt issuance costs

-

(23)

Excess tax benefits of share-based payment arrangements

244

86

Purchase of treasury stock, at cost

(1,134)

(2,926)

Exercise of stock options

-

852

Net cash used in financing activities from continuing operations

(2,034)

(10,080)

Net cash used in financing activities from discontinued operations

-

-

Net cash used in financing activities

(2,034)

(10,080)

Effect of exchange rate changes on cash and equivalents

(571)

248

NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS

480

(8,282)

CASH AND EQUIVALENTS, beginning of period

20,976

32,033

CASH AND EQUIVALENTS, end of period

$ 21,456

$ 23,751

PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(in thousands, except per share data)

Three Months Ended 

March 31,

2013

2012

(Unaudited)

Non-GAAP Operating Income (1)

Operating income, as reported 

$ 11,571

$ 11,088

Restructuring costs 

70

161

Asset impairments

144

25

Net legal settlements and related expenses

120

20

Equity-based compensation

1,674

2,082

Amortization

462

1,220

Non-GAAP operating income

$ 14,041

$ 14,596

Non-GAAP Net Income from Continuing Operations (1)

Net income from continuing operations, as reported

$   7,181

$   6,226

Elimination of non-recurring tax adjustments

(257)

249

Restructuring costs

49

113

Asset impairments

102

18

Net legal settlements and related expenses

85

14

Equity-based compensation

1,180

1,457

Amortization

326

854

Non-GAAP net income from continuing operations

$   8,666

$   8,931

Non-GAAP Diluted EPS from Continuing Operations (1) (2)

Diluted net income per share from continuing operations, as reported

$      0.15

$      0.13

Elimination of non-recurring tax adjustments

(0.01)

0.01

Restructuring costs

-

-

Asset impairments

-

-

Net legal settlements and related expenses

-

-

Equity-based compensation

0.03

0.03

Amortization

0.01

0.02

Non-GAAP diluted EPS from continuing operations

$      0.19

$      0.18

(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, 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 SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

CONSTANT CURRENCY ADJUSTMENTS AND ORGANIC GROWTH

Prior Year Quarter Constant Currency Adjustments (3)

Impact of

Q1 - 13 (Constant currency)

fluctuations in foreign currency exchange rates

Q1 - 13 (Actual)

(Unaudited, in thousands, except per share data)

Net Revenues

$ 130,224

$                   (732)

$   129,492

North America Net Revenue

$   86,200

$                     (23)

$     86,177

Europe Net Revenue

$   27,404

$                     (14)

$     27,390

Asia Pacific Net Revenue

$   16,620

$                   (695)

$     15,925

Non-GAAP Operating Income

$   14,272

$                   (231)

$     14,041

Non-GAAP Net Income from Continuing Operations

$     8,758

$                     (92)

$       8,666

Non-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 (Q1 - 12) average exchange rates.

Sequential Quarter Constant Currency Adjustments (4)

Impact of 

Q1 - 13 (Constant currency)

fluctuations in foreign currency exchange rates

Q1 - 13 (Actual)

(Unaudited, in thousands)

Net Revenues

$ 130,195

$                   (703)

$   129,492

(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 - 12)

average exchange rates.

Organic Growth (5)

Impact of

March 31, 2012

fluctuations in foreign currency exchange rates

Organic net revenue growth

March 31,2013

Organic net

revenue

growth rate

(Unaudited, in thousands, except percentages)

Net Revenues, Three Months Ended

$ 126,603

$                   (732)

$        3,621

$ 129,492

2.9%

(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.

 

Investor Calls

Sean O'BrienExecutive Vice PresidentStrategy & Communications(404) 262-8462

(Logo:  http://photos.prnewswire.com/prnh/20120628/MM33070LOGO )

SOURCE Premiere Global Services, Inc.

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