Exhibit 99.1
Premiere Global Reports Fourth Quarter and 2007 Results: Revenues
up 15% to $146.2M, Pro Forma Diluted EPS up 35% to $0.23(a) in Q4
ATLANTA--(BUSINESS WIRE)--Premiere Global Services, Inc. (NYSE: PGI), a global provider of on-demand business process improvement solutions, today announced results for the fourth quarter and year ended December 31, 2007.
Revenues increased 15.1% to $146.2 million in the fourth quarter of 2007, compared to $127.1 million in the fourth quarter of 2006. In the fourth quarter of 2007, operating income totaled $18.2 million, net income totaled $9.8 million and diluted EPS totaled $0.16, compared to $6.4 million, $5.1 million and $0.08, respectively, in the fourth quarter of 2006.
In the fourth quarter of 2007, pro forma diluted EPS totaled $0.23(a), excluding equity-based compensation of $2.7 million, amortization of $4.4 million and other insignificant items.
“Our continuing solid performance, we believe, is being driven by a growing use of our applied communication technologies by enterprises to improve their business processes,” said Boland T. Jones, Founder, Chairman and CEO of Premiere Global Services, Inc. “The momentum in our business tells us that our PGi Communications Operating System is meeting a large and growing need in the market. The enhanced value we provide with our broad suite of applications continues to be a real advantage when we compete with single product vendors.”
2007 Results
Revenues in 2007 increased 12.7% to $559.7 million, compared to $496.5 million in 2006. In 2007, operating income totaled $61.5 million, net income totaled $33.4 million and diluted EPS totaled $0.52, compared to $46.4 million, $25.5 million and $0.37, respectively, in 2006. In 2007, pro forma diluted EPS totaled $0.86, an increase of 26.5% compared to $0.68 in 2006.(a)
Revenue Detail
Revenue from Conferencing & Collaboration Solutions grew 28.7% to $97.2 million in the fourth quarter of 2007 compared to $75.5 million in the comparable prior year quarter. Revenue from legacy broadcast fax services totaled $18.0 million in the fourth quarter of 2007, a decline of 10.9% from $20.2 million in the fourth quarter of 2006.
In the fourth quarter of 2007, revenue in the Company’s reportable segments increased from the comparable prior year quarter as follows:
- North America grew 11.8% to $90.9 million, versus $81.3 million;
- Europe increased 22.6% to $28.6 million, versus $23.3 million and;
- Asia Pacific grew 19.2% to $26.8 million, versus $22.5 million.
Financial Outlook
The following statements are based on Premiere Global Services’ current expectations as of February 21, 2008. These statements contain forward-looking statements and Company estimates, and actual results may differ materially. The Company assumes no duty to update any forward-looking statements made in this press release. A discussion concerning forward-looking statements is included at the end of this press release and in the Company’s filings with the Securities and Exchange Commission.
The Company anticipates revenue growth in 2008 will be greater than 10%. As a result of expected efficiencies from the Company’s operating initiatives, gross margins are expected to increase from 2007 levels in 2008. Diluted EPS is projected to grow at least 20% in 2008 compared to 2007. Capital expenditures are expected to decline as a percentage of revenues from 2007 levels.
(a) To supplement the Company’s consolidated financial statements presented in accordance with GAAP, we have included the following non-GAAP measures of financial performance: pro forma operating income, pro forma net income and pro forma diluted EPS. 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.
Conference Call
The Company will hold a conference call at 5:00 p.m. Eastern this afternoon 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) 730-9234 (US & Canada) or (719) 457-2086 (International). The conference call will be simultaneously broadcast over the Internet via SoundCast®, a Premiere Global service, and can be accessed at PremiereGlobal.com/IR. You may also follow this link for details on the Internet replay, podcast and for the text of the earnings release, including the financial and statistical information to be presented in the call.
A replay will be available following the call at 8:00 p.m. Eastern tonight through midnight Eastern February 29, 2008, and can be accessed by calling (888) 203-1112 (US & Canada) or (719) 457-0820 (International). The confirmation code is 4419425. The Webcast of this call will be archived on the Company’s Website at PremiereGlobal.com/IR.
About Premiere Global Services, Inc.
Premiere Global Services, Inc. is a global provider of on-demand business process improvement solutions. Our Premiere Global Communications Operating System offers business applications within the following solution sets: Conferencing & Collaboration, Desktop Document Solutions, Enterprise Document Solutions, Notifications & Reminders, and eMarketing.
Headquartered in Atlanta, Georgia, and with presence in 23 countries worldwide, Premiere Global delivers solutions to an established customer base of over 50,000 companies, including nearly 95% of the Fortune 500. Additional information can be found at PremiereGlobal.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' forward-looking statements, including, but not limited to, the following factors: competitive pressures, including pricing pressures; technological change; the development of alternatives to our services; market acceptance of our new services and enhancements; integration of acquired companies; service interruptions; increased financial leverage; our dependence on our subsidiaries for cash flow; continued weakness in our legacy broadcast fax business; foreign currency exchange rates; possible adverse results of pending or future litigation or infringement claims; federal or state legislative or regulatory changes; general domestic and international economic, business or political conditions; and other factors described from time to time in our press releases, reports and other filings with the SEC, including but not limited the "Risk Factors" sections of our Annual Report on Form 10-K for the year ended December 31, 2006 and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2007 and June 30, 2007. All forward-looking statements attributable to us or a person acting on our behalf are expressly qualified in their entirety by this cautionary statement.
| PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES | |||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||
| THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2007 AND 2006 | |||||||||||||||||
| (IN THOUSANDS, UNAUDITED, EXCEPT SHARE AND PER SHARE DATA) | |||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||
| December 31, | December 31, | ||||||||||||||||
| 2007 | 2006 | 2007 | 2006 | ||||||||||||||
| Revenues | $ | 146,216 | $ | 127,061 | $ | 559,706 | $ | 496,472 | |||||||||
| Operating expenses | |||||||||||||||||
| Cost of revenues (exclusive of depreciation shown separately below) | 59,153 | 53,301 | 227,259 | 200,472 | |||||||||||||
| Selling and marketing | 36,326 | 34,338 | 141,322 | 132,279 | |||||||||||||
| General and administrative (exclusive of net legal settlements shown separately below) | 16,209 | 14,594 | 66,007 | 58,615 | |||||||||||||
| Research and development | 3,706 | 3,284 | 14,109 | 12,052 | |||||||||||||
| Depreciation | 8,453 | 6,593 | 30,008 | 24,567 | |||||||||||||
| Amortization | 4,433 | 3,492 | 15,659 | 13,018 | |||||||||||||
| Restructuring costs | (300 | ) | 4,366 | 3,447 | 8,385 | ||||||||||||
| Asset impairments | - | 111 | - | 111 | |||||||||||||
| Net legal settlements and related expenses | 65 | 603 | 349 | 603 | |||||||||||||
| Total operating expenses | 128,045 | 120,682 | 498,160 | 450,102 | |||||||||||||
| Operating income | 18,171 | 6,379 | 61,546 | 46,370 | |||||||||||||
| Other (Expense) Income: | |||||||||||||||||
| Interest expense | (4,439 | ) | (2,692 | ) | (13,598 | ) | (9,146 | ) | |||||||||
| Interest income | 337 | 231 | 780 | 536 | |||||||||||||
| Other, net | 450 | 1,598 | 1,418 | 1,401 | |||||||||||||
| Total other (expense) income | (3,652 | ) | (863 | ) | (11,400 | ) | (7,209 | ) | |||||||||
| Income before income taxes | 14,519 | 5,516 | 50,146 | 39,161 | |||||||||||||
| Income tax expense | 4,713 | 389 | 16,791 | 13,652 | |||||||||||||
| Net Income | $ | 9,806 | $ | 5,127 | $ | 33,355 | $ | 25,509 | |||||||||
| BASIC WEIGHTED AVERAGE SHARES OUTSTANDING: | 59,516 | 67,621 | 62,654 | 68,933 | |||||||||||||
| Basic earnings per share from net income | $ | 0.16 | $ | 0.08 | $ | 0.53 | $ | 0.37 | |||||||||
| DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING: | 60,602 | 68,421 | 63,940 | 69,787 | |||||||||||||
| Diluted earnings per share from net income | $ | 0.16 | $ | 0.08 | $ | 0.52 | $ | 0.37 | |||||||||
| PREMIERE GLOBAL SERVICES, INC AND SUBSIDIARIES | |||||||||
| CONSOLIDATED BALANCE SHEETS | |||||||||
| DECEMBER 31, 2007 AND DECEMBER 31, 2006 | |||||||||
| (IN THOUSANDS, UNAUDITED, EXCEPT SHARE DATA) | |||||||||
| December 31, | December 31, | ||||||||
| 2007 | 2006 | ||||||||
| ASSETS | |||||||||
| CURRENT ASSETS | |||||||||
| Cash and equivalents | $ | 18,259 | $ | 18,977 | |||||
| Accounts receivable (less allowances of | |||||||||
| $4,526 and $7,551, respectively) | 89,683 | 82,875 | |||||||
| Prepaid expenses and other current assets | 13,066 | 7,742 | |||||||
| Deferred income taxes, net | 5,522 | 11,972 | |||||||
| Total current assets | 126,530 | 121,566 | |||||||
| PROPERTY AND EQUIPMENT, NET | 110,767 | 88,062 | |||||||
| OTHER ASSETS | |||||||||
| Goodwill | 337,246 | 295,185 | |||||||
| Intangibles, net of amortization | 43,115 | 38,357 | |||||||
| Deferred income taxes, net | 1,018 | - | |||||||
| Other assets | 5,411 | 6,145 | |||||||
| $ | 624,087 | $ | 549,315 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||
| CURRENT LIABILITIES | |||||||||
| Accounts payable | $ | 51,631 | $ | 48,967 | |||||
| Income taxes payable | 7,597 | 878 | |||||||
| Accrued taxes | 8,076 | 6,011 | |||||||
| Accrued expenses | 37,276 | 28,697 | |||||||
| Current maturities of long-term debt and capital lease obligations | 1,664 | 2,044 | |||||||
| Accrued restructuring costs | 1,717 | 4,800 | |||||||
| Total current liabilities | 107,961 | 91,397 | |||||||
| LONG-TERM LIABILITIES | |||||||||
| Long-term debt and capital lease obligations | 267,817 | 136,738 | |||||||
| Accrued restructuring costs | 1,575 | 2,339 | |||||||
| Other accrued expenses | 4,527 | 1,831 | |||||||
| Deferred income taxes, net | - | 719 | |||||||
| Total long-term liabilities | 273,919 | 141,627 | |||||||
| SHAREHOLDERS' EQUITY | |||||||||
| Common stock $0.01 par value; 150,000,000 shares authorized, | |||||||||
| 61,755,728 and 70,151,998 shares issued and outstanding in | |||||||||
| 2007 and 2006, respectively | 618 | 702 | |||||||
| Additional paid-in capital | 548,418 | 663,232 | |||||||
| Repayment of shareholder notes | (1,702 | ) | (2,004 | ) | |||||
| Cumulative translation adjustment | 10,523 | 2,088 | |||||||
| Accumulated deficit | (315,650 | ) | (347,727 | ) | |||||
| Total shareholders' equity | 242,207 | 316,291 | |||||||
| $ | 624,087 | $ | 549,315 | ||||||
| PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES | |||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||
| TWELVE MONTHS ENDED DECEMBER 31, 2007 AND 2006 | |||||||||||||||
| (IN THOUSANDS, UNAUDITED) | |||||||||||||||
| Twelve Months Ended | |||||||||||||||
| December 31, | |||||||||||||||
| 2007 | 2006 | ||||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||||||
| Net income | $ | 33,355 | $ | 25,509 | |||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
| Depreciation | 30,008 | 24,567 | |||||||||||||
| Amortization | 15,659 | 13,018 | |||||||||||||
| Amortization of deferred financing costs | 513 | 492 | |||||||||||||
| Net legal settlements and related expenses | 349 | - | |||||||||||||
| Payments for legal settlements and related expenses | - | (3,099 | ) | ||||||||||||
| Deferred income taxes, net effect of acquisitions | 2,488 | 2,912 | |||||||||||||
| Restructuring costs | 3,447 | 8,385 | |||||||||||||
| Payments for restructuring costs | (7,109 | ) | (5,395 | ) | |||||||||||
| Payments for discontinued operations | (650 | ) | (987 | ) | |||||||||||
| Equity-based compensation | 10,590 | 10,370 | |||||||||||||
| Excess tax benefits from share-based payment arrangements | 3,323 | (209 | ) | ||||||||||||
| Payments for state sales tax | (480 | ) | (1,365 | ) | |||||||||||
| Asset impairment | - | 111 | |||||||||||||
| Loss on disposal of assets | 287 | 278 | |||||||||||||
| Gain on note receivable and other liabilities | |||||||||||||||
| Changes in assets and liabilities, net of effect of acquisitions: | |||||||||||||||
| Accounts receivable, net | (737 | ) | 701 | ||||||||||||
| Prepaid expenses and other current assets | (893 | ) | (2,448 | ) | |||||||||||
| Accounts payable and accrued expenses | 7,433 | 320 | |||||||||||||
| Total adjustments | 64,228 | 47,651 | |||||||||||||
| Net cash provided by operating activities | 97,583 | 73,160 | |||||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||||||
| Capital expenditures | (46,341 | ) | (31,926 | ) | |||||||||||
| Business acquisitions, net of cash acquired | (47,749 | ) | (49,040 | ) | |||||||||||
| Net cash used in investing activities | (94,090 | ) | (80,966 | ) | |||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||||||
| Principal payments under borrowing arrangements | (344,388 | ) | (164,391 | ) | |||||||||||
| Principal proceeds under borrowing arrangements | 470,099 | 200,270 | |||||||||||||
| Payments of debt issuance costs | (50 | ) | (1,200 | ) | |||||||||||
| Repayment of shareholder notes | 413 | - | |||||||||||||
| Excess tax benefits from share-based payment arrangements | (3,323 | ) | 209 | ||||||||||||
| Purchase of treasury stock, at cost | (136,049 | ) | (31,691 | ) | |||||||||||
| Exercise of stock options | 8,553 | 2,515 | |||||||||||||
| Net cash (used in) provided by financing activities | (4,745 | ) | 5,712 | ||||||||||||
| Effect of exchange rate changes on cash and equivalents | 534 | 563 | |||||||||||||
| NET DECREASE IN CASH AND EQUIVALENTS | (718 | ) | (1,531 | ) | |||||||||||
| CASH AND EQUIVALENTS, beginning of period | $ | 18,977 | $ | 20,508 | |||||||||||
| CASH AND EQUIVALENTS, end of period | $ | 18,259 | $ | 18,977 | |||||||||||
| PREMIERE GLOBAL SERVICES, INC AND SUBSIDIARIES | |||||||||||||||||||
| RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | |||||||||||||||||||
| (IN THOUSANDS, UNAUDITED, EXCEPT PER SHARE DATA) | |||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||
| 2007 | 2006 | 2007 | 2006 | ||||||||||||||||
| Pro Forma Operating Income (1) | |||||||||||||||||||
| Operating income, as reported | $ | 18,171 | $ | 6,379 | $ | 61,546 | $ | 46,370 | |||||||||||
| Restructuring costs | (300 | ) | 4,366 | 3,447 | 8,385 | ||||||||||||||
| Net legal settlements and related expenses | 65 | 603 | 349 | 603 | |||||||||||||||
| Asset impairments | - | 111 | - | 111 | |||||||||||||||
| Proxy-related costs | - | 80 | 2,900 | 80 | |||||||||||||||
| Equity-based compensation | 2,682 | 2,540 | 10,370 | 10,370 | |||||||||||||||
| Amortization | 4,433 | 3,492 | 15,659 | 13,018 | |||||||||||||||
| Pro forma operating income | $ | 25,051 | $ | 17,571 | $ | 94,271 | $ | 78,937 | |||||||||||
| Pro Forma Income (1) | |||||||||||||||||||
| Income from net income as reported | $ | 9,806 | $ | 5,127 | $ | 33,355 | $ | 25,509 | |||||||||||
| Elimination of one-time tax adjustments | (223 | ) | (1,247 | ) | (259 | ) | 263 | ||||||||||||
| Restructuring costs, net of taxes | (198 | ) | 3,083 | 2,275 | 5,551 | ||||||||||||||
| Asset impairment, net of taxes | - | 79 | - | 74 | |||||||||||||||
| Net legal settlements and related expenses | 43 | 425 | 231 | 399 | |||||||||||||||
| Proxy-related costs, net of taxes | - | 56 | 1,914 | 53 | |||||||||||||||
| Equity-based compensation, net of taxes | 1,770 | 1,788 | 6,990 | 6,865 | |||||||||||||||
| Amortization, net of taxes | 2,925 | 2,458 | 10,335 | 8,618 | |||||||||||||||
| Pro forma income from net income | $ | 14,123 | $ | 11,769 | $ | 54,841 | $ | 47,332 | |||||||||||
| Pro Forma Diluted EPS (1) | |||||||||||||||||||
| Diluted EPS from net income, as reported | $ | 0.16 | $ | 0.08 | $ | 0.52 | $ | 0.37 | |||||||||||
| Elimination of one-time tax adjustments | - | (0.02 | ) | - | - | ||||||||||||||
| Restructuring costs, net of taxes | - | 0.05 | 0.04 | 0.08 | |||||||||||||||
| Asset impairment, net of taxes | - | - | - | - | |||||||||||||||
| Net legal settlements and related expenses | - | - | - | 0.01 | |||||||||||||||
| Proxy-related costs, net of taxes | - | - | 0.03 | - | |||||||||||||||
| Equity-based compensation, net of taxes | 0.03 | 0.02 | 0.11 | 0.10 | |||||||||||||||
| Amortization, net of taxes | 0.04 | 0.04 | 0.16 | 0.12 | |||||||||||||||
| Pro forma diluted EPS from net income | $ | 0.23 | $ | 0.17 | $ | 0.86 | $ | 0.68 | |||||||||||
| (1) Management believes that pro forma operating income, pro forma income and pro foma diluted EPS provide useful information regarding underlying trends in our operations. Management expects equity-based compensation and amortization expenses to be recurring costs and presents pro forma diluted EPS from continuing operations to exclude these items as well as non-recurring items that are unrelated to our ongoing operations, including one-time tax adjustments, restructuring costs, asset impairments, net legal settlements and related expenses and proxy-related costs. | ||||||||||||||||||
CONTACT:
Premiere Global Services, Inc.
Investor Calls
Sean O’Brien, 404-262-8462
Senior Vice President
Strategic Planning & IR