PREMIERE GLOBAL SERVICES, INC. ATLANTA, Oct. 23, 2014 /PRNewswire/ -- Premiere Global Services, Inc. (NYSE: PGI), the world's largest pure-play provider of collaboration software and services, today announced results for the third quarter ended September 30, 2014.
In the third quarter of 2014, net revenues increased 7.5% to $140.4 million, compared to $130.6 million in the third quarter of 2013. Diluted EPS from continuing operations was $0.06 in the third quarter of 2014, compared to diluted EPS from continuing operations of $0.10 in the third quarter of 2013. Non-GAAP diluted EPS from continuing operations was $0.22* in the third quarter of 2014, compared to non-GAAP diluted EPS from continuing operations of $0.20* in the third quarter of 2013.
"The last few months have been among the most important in PGi's history, with continuing strong growth in our core software applications, iMeet® and GlobalMeet®, and the completion of two strategic acquisitions that expand our collaboration portfolio," said Boland T. Jones, PGi founder, chairman and CEO. "With our acquisitions of TalkPoint and Central Desktop, PGi offers a unified collaboration platform that enables businesses to work how and when they want--in real-time or near-time, whether in teams, large groups or one-on-one. The acquisitions further our transition to a SaaS model, increasing our combined SaaS annual revenue run-rate to approximately $66 million, or over 10 percent of our total revenue run-rate--up from $48 million at the end of the second quarter."
Recent Accomplishments
-- Acquired TalkPoint, a leading provider of webcasting software and
services in September;
-- Acquired Central Desktop, a leading cloud-based team workspace platform
in October;
-- Integrated PGi's global hybrid IP audio conferencing network with
Microsoft® Lync® Server 2013;
-- Increased capacity, extended term and improved pricing and covenants of
our credit facility;
-- Announced a strategic alliance with Thinking Phone Networks to bring
iMeet to its UCaaS customers;
-- PGi and iMeet awarded gold and silver Stevie® Awards for Company of the
Year and Android App of the Year; and
-- Agenday won a platinum award from the Best Mobile App Awards for best
mobile calendar app.
Nine-Month Results
In the first nine months of 2014, net revenues grew 9.1% to $427.9 million, compared to $392.2 million in the first nine months of 2013. Diluted EPS from continuing operations was $0.30 in the first nine months of 2014, compared to diluted EPS from continuing operations of $0.43 in the first nine months of 2013. Non-GAAP diluted EPS from continuing operations was $0.68* in the first nine months of 2014, compared to non-GAAP diluted EPS from continuing operations of $0.58* in the first nine 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, PGi anticipates that results for 2014 will be within the following financial outlook ranges: net revenues from continuing operations are projected to be in the range of $568-$571 million and non-GAAP diluted EPS from continuing operations is projected to be in the range of $0.87-$0.88.
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) 278-8459 (U.S. and Canada) or (913) 312-1489 (International), participant passcode 9822202. 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 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 tables 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 is the world's largest pure-play provider of collaboration software and services. PGi's unified collaboration platform empowers business users and teams to connect, share ideas and manage projects with the simplicity and everywhere-access of the latest cloud technologies. PGi has a global presence in 25 countries, and its award-winning solutions provide a collaborative advantage to nearly 50,000 enterprise customers, including 75% of the Fortune 100(TM). In the last five years, PGi has helped over a billion people worldwide connect, collaborate and get work done--in teams, large groups and one-on-one. 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 Nine Months Ended
September 30, September 30,
------------- -------------
2014 2013 2014 2013
---- ---- ---- ----
Net revenues $140,383 $130,570 $427,909 $392,240
Operating expenses:
Cost of
revenues
(exclusive
of
depreciation
and
amortization
shown
57,965 56,203 176,508 168,566
separately
below)
Selling and
marketing 36,813 33,379 112,242 101,924
General and
administrative
(exclusive
of expenses
17,810 15,605 54,815 47,284
shown
separately
below)
Research and
development 5,534 4,145 14,655 11,699
Excise and
sales tax
expense - 1 - 78
Depreciation 8,697 8,459 26,248 25,029
Amortization 2,582 855 7,549 1,709
Restructuring
costs 68 240 68 441
Asset
impairments 4,938 18 4,938 216
Net legal
settlements
and related
expenses 172 278 172 591
Acquisition-
related
costs 2,147 2,805 5,838 3,044
Total operating expenses 136,726 121,988 403,033 360,581
------- ------- ------- -------
Operating income 3,657 8,582 24,876 31,659
----- ----- ------ ------
Other (expense) income:
Interest
expense (2,133) (1,599) (6,618) (4,927)
Interest
income 5 22 25 93
Other, net 741 (88) 996 130
Total other expense, net (1,387) (1,665) (5,597) (4,704)
------ ------ ------ ------
Income from continuing operations
before income taxes 2,270 6,917 19,279 26,955
Income tax (benefit) expense (376) 2,072 5,230 6,821
---- ----- ----- -----
Net income from continuing operations 2,646 4,845 14,049 20,134
----- ----- ------ ------
Loss from discontinued operations, net
of taxes (100) (182) (283) (418)
Net income $2,546 $4,663 $13,766 $19,716
====== ====== ======= =======
BASIC WEIGHTED-AVERAGE SHARES
OUTSTANDING 45,162 46,313 45,797 46,202
====== ====== ====== ======
Basic net income (loss) per share (1)
Continuing
operations $0.06 $0.10 $0.31 $0.44
Discontinued
operations - - (0.01) (0.01)
Net income
per share $0.06 $0.10 $0.30 $0.43
DILUTED WEIGHTED-AVERAGE SHARES
OUTSTANDING 45,898 46,818 46,485 46,685
====== ====== ====== ======
Diluted net income (loss) per share
Continuing
operations $0.06 $0.10 $0.30 $0.43
Discontinued
operations - - (0.01) (0.01)
Net income
per share $0.06 $0.10 $0.30 $0.42
(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)
September 30, December 31,
2014 2013
---- ----
ASSETS
CURRENT ASSETS
Cash and equivalents $29,505 $44,955
Accounts receivable
(less allowances of
$597 and $760,
respectively) 88,478 78,481
Prepaid expenses and
other current
assets 17,275 22,645
Income taxes
receivable 2,732 2,316
Deferred income
taxes, net 5,251 4,390
Total current assets 143,241 152,787
------- -------
PROPERTY AND EQUIPMENT, NET 101,747 105,724
OTHER ASSETS
Goodwill 369,251 341,382
Intangibles, net of
amortization 97,419 78,637
Deferred income
taxes, net 1,810 1,957
Other assets 18,651 17,621
TOTAL ASSETS $732,119 $698,108
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $56,116 $51,994
Income taxes payable 2,749 2,648
Accrued taxes, other
than income taxes 18,597 11,190
Accrued expenses 34,208 34,402
Current maturities
of long-term debt
and capital lease
obligations 1,781 1,719
Accrued
restructuring costs 424 2,104
Deferred income
taxes, net 37 171
Total current liabilities 113,912 104,228
------- -------
LONG-TERM LIABILITIES
Long-term debt and
capital lease
obligations 310,873 272,467
Accrued
restructuring costs - 77
Accrued expenses 25,754 29,570
Deferred income
taxes, net 21,400 18,881
Total long-term liabilities 358,027 320,995
------- -------
SHAREHOLDERS' EQUITY
Common stock, $0.01
par value;
150,000,000 shares
authorized,
47,082,520 and
48,338,335 shares
issued and
outstanding,
respectively 472 483
Additional paid-in
capital 440,654 457,913
Accumulated other
comprehensive gain 1,968 11,169
Accumulated deficit (182,914) (196,680)
Total shareholders' equity 260,180 272,885
------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $732,119 $698,108
======== ========
PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Nine Months Ended
September 30,
-------------
2014 2013
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $13,766 $19,716
Loss from
discontinued
operations, net
of taxes 283 418
--- ---
Net income from
continuing
operations 14,049 20,134
Adjustments to
reconcile net income
to net cash provided
by operating
activities:
Depreciation 26,248 25,029
Amortization 7,549 1,709
Amortization of
debt issuance
costs 491 450
Net legal
settlements and
related expenses 172 591
Payments for legal
settlements and
related expenses (170) (272)
Deferred income
taxes 1,096 2,182
Restructuring
costs 68 441
Payments for
restructuring
costs (1,816) (1,158)
Asset impairments 4,938 216
Equity-based
compensation 7,544 5,694
Excess tax
benefits from
share-based
payment
arrangements (448) (360)
Provision for
doubtful accounts 203 214
Acquisition-
related costs 5,838 3,044
Cash paid for
acquisition-
related costs (5,411) -
Changes in working
capital, net of
business
acquisitions (6,460) (1,421)
Net cash provided by operating
activities from continuing
operations 53,891 56,493
------ ------
Net cash used in operating
activities from discontinued
operations (259) (493)
---- ----
Net cash provided by operating
activities 53,632 56,000
------ ------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital
expenditures (26,562) (24,794)
Business
acquisitions, net
of cash acquired (55,517) (50,873)
Other investing
activities, net 2,046 (457)
Net cash used in investing
activities from continuing
operations (80,033) (76,124)
------- -------
Net cash used in investing
activities from discontinued
operations - -
--- ---
Net cash used in investing
activities (80,033) (76,124)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments
under borrowing
arrangements (99,509) (55,494)
Proceeds from
borrowing
arrangements 137,000 94,750
Payments of debt
issuance costs (1,060) (1,253)
Excess tax
benefits of
share-based
payment
arrangements 448 360
Purchases and
retirement of
treasury stock,
at cost (25,844) (2,087)
Exercise of stock
options 963 -
Net cash provided by financing
activities from continuing
operations 11,998 36,276
------ ------
Net cash provided by financing
activities from discontinued
operations - -
--- ---
Net cash provided by financing
activities 11,998 36,276
------ ------
Effect of exchange rate changes on cash and equivalents (1,047) (56)
------ ---
NET (DECREASE) INCREASE IN CASH AND EQUIVALENTS (15,450) 16,096
------- ------
CASH AND EQUIVALENTS, beginning of period 44,955 20,976
CASH AND EQUIVALENTS, end of period $29,505 $37,072
======= =======
PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited, in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2014 2013 2014 2013
---- ---- ---- ----
Non-GAAP Operating Income (1)
Operating
income, as
reported $3,657 $8,582 $24,876 $31,659
Restructuring
costs 68 240 68 441
Excise and
sales tax
expense - 1 - 78
Asset
impairments 4,938 18 4,938 216
Net legal
settlements
and related
expenses 172 278 172 591
Acquisition-
related costs 2,147 2,805 5,838 3,044
Equity-based
compensation 2,660 2,058 7,544 5,694
Amortization 2,582 855 7,549 1,709
Non-GAAP operating income $16,224 $14,837 $50,985 $43,432
------- ------- ------- -------
Non-GAAP Net Income from
Continuing Operations (1)
Net income
from
continuing
operations,
as reported $2,646 $4,845 $14,049 $20,134
Elimination of
non-
recurring tax
adjustments
and related
interest (1,158) 31 (683) (1,131)
Restructuring
costs 47 169 47 311
Excise and
sales tax
expense - 1 - 55
Asset
impairments 3,407 13 3,407 152
Net legal
settlements
and related
expenses 119 196 119 417
Acquisition-
related costs 1,481 1,978 4,028 2,146
Equity-based
compensation 1,835 1,451 5,205 4,014
Amortization 1,782 603 5,209 1,205
Non-GAAP net income from
continuing operations $10,159 $9,287 $31,381 $27,303
------- ------ ------- -------
Non-GAAP Diluted EPS from
Continuing Operations (1) (2)
Diluted net
income per
share from
continuing
operations,
as reported $0.06 $0.10 $0.30 $0.43
Elimination of
non-
recurring tax
adjustments
and related
interest (0.03) - (0.01) (0.02)
Restructuring
costs - - - 0.01
Excise and
sales tax
expense - - - -
Asset
impairments 0.07 - 0.07 -
Net legal
settlements
and related
expenses - - - 0.01
Acquisition-
related costs 0.03 0.04 0.09 0.05
Equity-based
compensation 0.04 0.03 0.11 0.09
Amortization 0.04 0.01 0.11 0.03
Non-GAAP diluted EPS from
continuing operations $0.22 $0.20 $0.68 $0.58
===== ===== ===== =====
(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
Q3 - 14 (Constant currency) fluctuations in foreign currency exchange
rates Q3 - 14 (Actual)
-------------------------- ------------------------------------------ ---------------
(Unaudited, in thousands, except per share data)
Net Revenues $139,811 $572 $140,383
North America Net Revenue $87,666 $(159) $87,507
Europe Net Revenue $35,226 $854 $36,080
Asia Pacific Net Revenue $16,919 $(123) $16,796
Non-GAAP Operating Income $16,030 $194 $16,224
Non-GAAP Net Income from Continuing Operations $9,500 $659 $10,159
Non-GAAP Diluted EPS from Continuing Operations $0.21 $0.01 $0.22
(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 - 13) average exchange rates.
Sequential Quarter Constant Currency Adjustments (4)
Impact of
Q3 - 14 (Constant currency) fluctuations in foreign currency exchange
rates Q3 - 14 (Actual)
-------------------------- ------------------------------------------ ---------------
(Unaudited, in thousands)
Net Revenues $141,062 $(679) $140,383
(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 -
14)
average exchange rates.
Organic Growth (5)
Impact of
September 30, fluctuations in foreign currency exchange
rates Acquisitions Organic net revenue growth September 30, Organic net
2013 2014
revenue
growth rate
-----------
(Unaudited, in thousands, except percentages)
Net Revenues, Three Months Ended $130,570 $115 $11,981 $(2,283) $140,383 -1.7%
Net Revenues, Nine Months Ended $392,240 $106 $45,579 $(10,016) $427,909 -2.6%
(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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SOURCE Premiere Global Services, Inc.
