PREMIERE GLOBAL SERVICES, INC. ATLANTA, July 17, 2014 /PRNewswire/ -- Premiere Global Services, Inc. (NYSE: PGI), a leading global provider of collaboration software and services for over 20 years, today announced results for the second quarter ended June 30, 2014.
In the second quarter of 2014, net revenues increased 9.2% to $144.3 million, compared to $132.2 million in the second quarter of 2013. Diluted EPS from continuing operations was $0.13 in the second quarter of 2014, compared to diluted EPS from continuing operations of $0.17 in the second quarter of 2013. Non-GAAP diluted EPS from continuing operations was $0.23* in the second quarter of 2014, compared to non-GAAP diluted EPS from continuing operations of $0.20* in the second quarter of 2013.
"We are pleased with the continuing solid trends in our global business and, in particular, the increasing momentum in sales of our SaaS-based collaboration products," said Boland T. Jones, PGi founder, chairman and CEO. "We generated SaaS revenue of approximately $12 million in the second quarter, representing over 50% year-over-year growth and our highest sequential increase ever in this important revenue category. We ended the quarter with strong sales pipelines and an annual revenue run-rate of over $48 million from these high-value, high-margin products. Consistent with our ongoing strategy, we plan to accelerate our investments in driving higher sales of these next-generation collaboration products this year, as we work to further accelerate the positive transition in our business toward a SaaS model."
Six Month Results
In the first six months of 2014, net revenues grew nearly 10% to $287.5 million, compared to $261.7 million in the first six months of 2013. Diluted EPS from continuing operations was $0.24 in the first six months of 2014, compared to diluted EPS from continuing operations of $0.33 in the first six months of 2013. Non-GAAP diluted EPS from continuing operations was $0.45* in the first six months of 2014, compared to non-GAAP diluted EPS from continuing operations of $0.39* in the first six months of 2013.
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 current business trends and current foreign currency exchange rates, and assuming no additional acquisitions, PGi continues to anticipate that results for 2014 will be within the financial outlook ranges it provided on April 24, 2014--net revenues from continuing operations are projected to be in the range of $565-$575 million and non-GAAP diluted EPS from continuing operations is projected to be in the range of $0.85-$0.88--and free cash flow is projected to exceed $1.00 per share*. The Company continues to anticipate that it will reinvest excess earnings this year in product, sales and marketing initiatives designed to accelerate sales of its collaboration software applications and its transition to a SaaS model.
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) 205-6705 (U.S. and Canada) or (913) 312-0726 (International), participant passcode 9783896. The conference call will simultaneously be webcast. Please visit 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, free cash flow and organic growth. Management defines "free cash flow" as net cash provided by operating activities from continuing operations, less capital expenditures. 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 leading global provider of collaboration software and services for over 20 years. PGi's cloud-based software applications empower business users to connect, collaborate and share ideas and information from their desktop, tablet or smartphone, enabling greater productivity in the office or on the go. PGi has a global presence in 25 countries, and its award-winning solutions provide a collaborative advantage to over 45,000 enterprise customers, including 75% of the Fortune 100(TM). In the last five years, PGi has hosted more than 1.1 billion people from 137 countries in over 250 million virtual meetings. For more information, visit PGi at 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, many of which are beyond our control. 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 PGi'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 PGi's SaaS products, including iMeet® and GlobalMeet®; our ability to attract new customers and to retain and further penetrate our existing customers; our ability to establish and maintain strategic reseller and distribution relationships; risks associated with challenging global economic conditions; price increases from our telecommunications service providers; service interruptions and network downtime, including undetected errors or defects in our software; technological obsolescence and our ability to upgrade our equipment or increase our network capacity; concerns regarding the security and privacy of our customers' 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 made 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, 2013. All forward-looking statements attributable to us or a person acting on our behalf are expressly qualified in their entirety by this cautionary statement. We do not undertake any obligation to update or to release publicly any revisions to forward-looking statements contained in this press release to reflect events or circumstances occurring after the date of this press release or the date of the statement, if a different date, or to reflect the occurrence of unanticipated events.
PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2014 2013 2014 2013
---- ---- ---- ----
Net revenues $144,287 $132,178 $287,526 $261,670
Operating expenses:
Cost of
revenues
(exclusive of
depreciation
and
amortization
shown
separately
below)
59,001 56,856 118,543 112,363
Selling and
marketing 37,593 34,382 75,429 68,545
General and
administrative
(exclusive of
expenses
shown
separately
below)
19,070 16,186 37,005 31,679
Research and
development 4,616 3,831 9,121 7,554
Excise and
sales tax
expense - 77 - 77
Depreciation 8,885 8,331 17,551 16,570
Amortization 2,484 392 4,967 854
Restructuring
costs - 131 - 201
Asset
impairments - 54 - 198
Net legal
settlements
and related
expenses - 220 - 313
Acquisition-
related costs 1,786 212 3,691 239
Total
operating
expenses 133,435 120,672 266,307 238,593
------- ------- ------- -------
Operating income 10,852 11,506 21,219 23,077
------ ------ ------ ------
Other (expense) income:
Interest
expense (2,385) (1,527) (4,485) (3,328)
Interest income 11 50 20 71
Other, net (36) 188 255 218
Total
other
expense (2,410) (1,289) (4,210) (3,039)
------ ------ ------ ------
Income from continuing operations
before income taxes 8,442 10,217 17,009 20,038
Income tax expense 2,309 2,109 5,606 4,749
----- ----- ----- -----
Net income from continuing
operations 6,133 8,108 11,403 15,289
----- ----- ------ ------
Loss from discontinued operations,
net of taxes (118) (133) (183) (236)
Net income $6,015 $7,975 $11,220 $15,053
====== ====== ======= =======
BASIC WEIGHTED-AVERAGE SHARES
OUTSTANDING 45,859 46,204 46,121 46,146
====== ====== ====== ======
Basic net income (loss) per share (1)
Continuing
operations $0.13 $0.18 $0.25 $0.33
Discontinued
operations - - - (0.01)
Net income per
share $0.13 $0.17 $0.24 $0.33
===============
DILUTED WEIGHTED-AVERAGE SHARES
OUTSTANDING 46,550 46,720 46,784 46,618
====== ====== ====== ======
Diluted net income (loss) per share
Continuing
operations $0.13 $0.17 $0.24 $0.33
Discontinued
operations - - - (0.01)
Net income per
share $0.13 $0.17 $0.24 $0.32
===============
(1) Column totals may not sum due to the effect
of rounding on EPS.
PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except per share data)
June 30, December 31,
2014 2013
---- ----
ASSETS
CURRENT ASSETS
Cash and equivalents $31,926 $44,955
Accounts receivable
(less allowances of
$768 and $760,
respectively) 88,465 78,481
Prepaid expenses and
other current assets 15,895 22,645
Income taxes
receivable 3,712 2,316
Deferred income
taxes, net 692 4,390
Total current assets 140,690 152,787
------- -------
PROPERTY AND EQUIPMENT, NET 105,894 105,724
OTHER ASSETS
Goodwill 341,524 341,382
Intangibles, net of
amortization 75,041 78,637
Deferred income
taxes, net 2,403 1,957
Other assets 17,382 17,621
TOTAL ASSETS $682,934 $698,108
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $62,554 $51,994
Income taxes payable 2,423 2,648
Accrued taxes, other
than income taxes 9,271 11,190
Accrued expenses 34,348 34,402
Current maturities of
long-term debt and
capital lease
obligations 1,821 1,719
Accrued restructuring
costs 544 2,104
Deferred income
taxes, net 28 171
Total current liabilities 110,989 104,228
------- -------
LONG-TERM LIABILITIES
Long-term debt and
capital lease
obligations 251,937 272,467
Accrued restructuring
costs - 77
Accrued expenses 29,587 29,570
Deferred income
taxes, net 19,334 18,881
Total long-term liabilities 300,858 320,995
------- -------
SHAREHOLDERS' EQUITY
Common stock, $0.01
par value;
150,000,000 shares
authorized,
47,375,315 and
48,338,335 shares
issued and
outstanding,
respectively 479 483
Additional paid-in
capital 444,691 457,913
Accumulated other
comprehensive gain 11,377 11,169
Accumulated deficit (185,460) (196,680)
Total shareholders' equity 271,087 272,885
------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $682,934 $698,108
======== ========
PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Six Months Ended
June 30,
--------
2014 2013
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $11,220 $15,053
Loss from
discontinued
operations, net
of taxes 183 236
--- ---
Net income
from
continuing
operations 11,403 15,289
Adjustments to
reconcile net income
to net cash provided
by operating
activities:
Depreciation 17,551 16,570
Amortization 4,967 854
Amortization of
debt issuance
costs 322 296
Net legal
settlements and
related expenses - 313
Payments for
legal
settlements and
related expenses - (91)
Deferred income
taxes 908 1,741
Restructuring
costs - 201
Payments for
restructuring
costs (1,659) (922)
Asset impairments - 198
Equity-based
compensation 4,884 3,636
Excess tax
benefits from
share-based
payment
arrangements (395) (358)
Provision for
doubtful
accounts 362 360
Acquisition-
related costs 3,691 -
Cash paid for
acquisition-
related costs (3,779) -
Changes in
working capital 812 (8,189)
Net cash
provided by
operating
activities
from
continuing
operations 39,067 29,898
------ ------
Net cash used
in operating
activities
from
discontinued
operations (165) (257)
---- ----
Net cash provided by
operating activities 38,902 29,641
------ ------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital
expenditures (15,520) (17,307)
Other investing
activities, net 2,052 (625)
Business
acquisitions,
net of cash
acquired 66 -
Net cash used
in investing
activities
from
continuing
operations (13,402) (17,932)
------- -------
Net cash used
in investing
activities
from
discontinued
operations - -
--- ---
Net cash used in investing
activities (13,402) (17,932)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal
payments under
borrowing
arrangements (83,447) (31,164)
Proceeds from
borrowing
arrangements 62,000 26,000
Excess tax
benefits of
share-based
payment
arrangements 395 358
Purchases and
retirement of
treasury stock,
at cost (18,988) (1,758)
Exercise of stock
options 963 -
Net cash used
in financing
activities
from
continuing
operations (39,077) (6,564)
------- ------
Net cash used
in financing
activities
from
discontinued
operations - -
--- ---
Net cash used in financing
activities (39,077) (6,564)
------- ------
Effect of exchange rate changes on cash and
equivalents 548 (830)
--- ----
NET (DECREASE) INCREASE IN CASH AND EQUIVALENTS (13,029) 4,315
------- -----
CASH AND EQUIVALENTS, beginning of period 44,955 20,976
CASH AND EQUIVALENTS, end of period $31,926 $25,291
======= =======
PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited, in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2014 2013 2014 2013
---- ---- ---- ----
Non-GAAP Operating Income (1)
Operating
income, as
reported $10,852 $11,506 $21,219 $23,077
Restructuring
costs - 131 - 201
Excise and
sales tax
expense - 77 - 77
Asset
impairments - 54 - 198
Net legal
settlements
and related
expenses - 220 - 313
Acquisition-
related costs 1,786 212 3,691 239
Equity-based
compensation 2,657 1,962 4,884 3,636
Amortization 2,484 392 4,967 854
$17,779 $14,554 $34,761 $28,595
Non-GAAP
operating
income
----------
Non-GAAP Net Income from Continuing Operations (1)
Net income from
continuing
operations, as
reported $6,133 $8,108 $11,403 $15,289
Elimination of
non-recurring
tax
adjustments
and related
interest (167) (905) 474 (1,162)
Restructuring
costs - 92 - 142
Excise and
sales tax
expense - 54 - 54
Asset
impairments - 38 - 140
Net legal
settlements
and related
expenses - 155 - 221
Acquisition-
related costs 1,232 149 2,547 168
Equity-based
compensation 1,833 1,383 3,370 2,563
Amortization 1,714 276 3,427 602
$10,745 $9,350 $21,221 $18,017
Non-GAAP net
income from
continuing
operations
----------
Non-GAAP Diluted EPS from Continuing Operations (1) (2)
Diluted net
income per
share from
continuing
operations, as
reported $0.13 $0.17 $0.24 $0.33
Elimination of
non-recurring
tax
adjustments
and related
interest - (0.02) 0.01 (0.02)
Restructuring
costs - - - -
Excise and
sales tax
expense - - - -
Asset
impairments - - - -
Net legal
settlements
and related
expenses - - - -
Acquisition-
related costs 0.03 - 0.05 -
Equity-based
compensation 0.04 0.03 0.07 0.05
Amortization 0.04 0.01 0.07 0.01
$0.23 $0.20 $0.45 $0.39
Non-GAAP
diluted EPS
from
continuing
operations
============
(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
and related interest,
restructuring costs, excise
and sales tax expense,
asset impairments, net
legal settlements and
related expenses and
acquisition-related costs.
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
Q2 - 14 fluctuations in Q2 - 14
(Constant foreign currency (Actual)
currency) exchange rates
-------- --------------
(Unaudited, in thousands, except per share data)
$143,185 $1,102 $144,287
Net Revenues
$89,645 $(253) $89,392
North America Net Revenue
$36,646 $1,643 $38,289
Europe Net Revenue
$16,894 $(288) $16,606
Asia Pacific Net Revenue
$17,534 $245 $17,779
Non-GAAP Operating Income
$10,803 $(58) $10,745
Non-GAAP Net Income from
Continuing Operations
$0.23 $ - $0.23
Non-GAAP Diluted EPS from
Continuing Operations
(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 - 13) average exchange rates.
Sequential Quarter Constant Currency Adjustments (4)
Impact of
Q2 - 14 fluctuations in Q2 - 14
(Constant foreign currency (Actual)
currency) exchange rates
-------- --------------
(Unaudited, in thousands)
Net Revenues $143,785 $502 $144,287
(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 - 14) average exchange rates.
Organic Growth (5)
Impact of
June 30, fluctuations in Acquisitions Organic net June 30, Organic net
2013 foreign currency revenue 2014 revenue
exchange rates growth growth rate
-------------- ------ -----------
(Unaudited, in thousands, except percentages)
$132,178 $548 $16,689 $(5,128) $144,287 -3.9%
Net Revenues, Three Months Ended
$261,670 $(9) $33,598 $(7,733) $287,526 -3.0%
Net Revenues, Six Months Ended
(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.
Media and Investor Contact:
Sean O'Brien
(404) 262-8462
sean.obrien@pgi.com
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