Exhibit 99.1
Ptek Holdings Reports Third Quarter 2003 Revenue of $96.1 Million and
GAAP Diluted EPS from Continuing Operations of $0.13
ATLANTA--(BUSINESS WIRE)--Oct. 29, 2003--
Company Continues Cost Cutting Initiatives and Balance Sheet
Improvements; Company Provides 2004 Financial Guidance
Ptek Holdings, Inc. (NASDAQ: PTEK)(www.ptek.com), a leading
provider of business communications services, today announced results
for the third quarter ended September 30, 2003. Revenue from
continuing operations was $96.1 million for the quarter compared to
$86.0 million in the third quarter of 2002. GAAP income from
continuing operations increased to $8.1 million in the third quarter
of 2003 from $2.8 million in the comparable prior year period. GAAP
diluted EPS from continuing operations increased to $0.13 in the third
quarter of 2003 from $0.05 in the third quarter of 2002. Diluted
shares outstanding averaged 63.9 million for the quarter, an 11.9%
increase from the third quarter of 2002.
During the third quarter of 2003, Ptek continued to lower its
overall cost structure by reducing headcount, office lease obligations
and the outstanding balance of its 5 3/4% convertible notes due 2004.
These actions are expected to yield annual cost savings in excess of
$4 million.
Cost Cutting Impact Offset by Tax Gain
As a result of the cost cutting initiatives, the Company recorded
severance, lease termination and bond redemption expenses that
negatively affected GAAP diluted EPS from continuing operations by
$0.10 per share. The Company also recorded an additional expense of
$0.01 per share resulting from an increase in non-cash equity based
compensation associated with certain outstanding stock options subject
to variable accounting due to the approximately 65% appreciation in
the Company's share price during the period.
Conversely, due to a positive adjustment to income tax estimates
during the third quarter of 2003, GAAP diluted EPS from continuing
operations during the third quarter benefited by $0.14 per share.
"We remain focused on our mission to deliver superior business
communications solutions to our enterprise customers, and to do so in
the most cost effective manner possible," said Boland T. Jones,
Founder, Chairman and CEO of Ptek Holdings, Inc. "As we look ahead to
next year, we believe our new product innovation, enterprise customer
base and improving operating efficiency will spur continued solid
financial performance."
Balance Sheet Improvements
During the quarter, the Company issued $85.0 million of 5.0%
convertible notes due 2008 and used the net proceeds to repurchase and
redeem $83.0 million face value of its 5 3/4% convertible notes due
July 2004. The Company had an outstanding balance of $50.0 million of
the 2004 convertible notes as of September 30, 2003.
Ptek recently announced a partial redemption of an additional $10
million principal amount of its convertible notes due 2004. Upon
completion of the pending redemption on November 17, 2003, the
outstanding principal balance of the 2004 convertible notes will be
reduced to $40 million, down from the original issue amount of $172.5
million.
In addition, total cash (cash and cash equivalents and current and
non-current restricted cash) increased during the third quarter of
2003 to $37.5 million, from $35.1 million on June 30, 2003, despite
$15.3 million in cash used for the acquisition of MediaLinq, completed
September 15, 2003.
The Company continued to improve certain leverage measurements, as
net debt to equity decreased to 0.9 to 1.0 on September 30, 2003, from
1.1 to 1.0 on June 30, 2003 (see table attached for a calculation of
this non-GAAP financial measure).
Premiere Conferencing (www.premconf.com)
Premiere Conferencing's third quarter 2003 revenue grew 15.1%,
totaling $40.3 million versus $35.0 million in the same period last
year. Total conferencing minutes grew 40% during the third quarter of
2003 compared to the third quarter of 2002. Automated and new services
accounted for approximately 75% of total revenue at Premiere
Conferencing during the quarter.
Premiere Conferencing continues to invest in new services and in
the fourth quarter of 2003 plans to introduce its own data
conferencing solution, an easy-to-use, integrated audio and Web
collaboration service.
Xpedite (www.xpedite.com)
Revenue at the Xpedite operating unit grew 9.5% during the third
quarter of 2003, totaling $55.8 million versus $51.0 million in the
same period last year. Excluding revenue from MediaLinq, Xpedite's
revenue for the third quarter 2003 increased 5.5% from the comparable
prior year period.
Xpedite delivered more than 760 million messages during the third
quarter of 2003. messageREACH(R) volume increased 86% and
voiceREACH(SM) volume increased 238% over the third quarter of 2002.
Revenue from these new services grew 59% in the third quarter of 2003
from the same period last year and represented approximately 18% of
Xpedite's total revenue.
Xpedite continues to invest in new services and in the fourth
quarter of 2003 plans to launch its new fax to e-mail solution
designed to enable large clients to better manage their fax delivery
and receipt through their existing enterprise e-mail system.
Nine Month Financial Performance
Revenue from continuing operations for the nine months ended
September 30, 2003, was $280.2 million compared to $256.7 million in
the same period last year. Premiere Conferencing revenue for the nine
month period ended September 30, 2003, totaled $116.6 million, up
12.8% from the comparable prior year period. Revenue at the Xpedite
business unit for the first nine months of 2003 grew 6.7% to $163.7
million from $153.4 million in the comparable prior year period. GAAP
income from continuing operations during the first nine months of 2003
increased to $19.6 million from $7.7 million in the first nine months
of 2002. GAAP diluted EPS from continuing operations for the first
nine months of 2003 was $0.35, up from $0.14 in the first nine months
of 2002.
Financial Guidance
The following statements are based on Ptek's current expectations
as of October 29, 2003. These statements are forward-looking
statements 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 believes revenue in the fourth quarter of 2003 will be
in the range of $97.5 to $99.5 million. Diluted EPS from continuing
operations for the fourth quarter is expected to be approximately
$0.10. Diluted shares outstanding are expected to total 73.2 million
in the fourth quarter of 2003, a 14.7% increase from the preceding
quarter and a 31.2% increase from the fourth quarter of 2002.
The Company estimates revenue for 2004 will be in the range of
$405 to $420 million. Diluted EPS from continuing operations for 2004
is expected to be in the range of $0.46 to $0.51. Diluted shares
outstanding are expected to total approximately 75.0 million in 2004,
a 22.2% increase from the estimated 61.4 million average diluted
shares outstanding in 2003.
Conference Call
The Company will hold a conference call at 8:30 a.m. ET on
Thursday, October 30, 2003, to discuss these results. To participate
in the call, please dial-in to the appropriate number below 5-10
minutes prior to the scheduled start time: (800) 289-0468 (US &
Canada) or (913) 981-5517 (International). The conference call will be
simultaneously broadcast over the Internet via SoundCast(R), a
Premiere Conferencing service, and can be found at
http://www.ptek.com. You may also follow this link for details on the
Internet replay 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 11:30 a.m. ET on
October 30, 2003, through midnight November 7, 2003, and may be
accessed by calling (888) 203-1112 (US & Canada) or (719) 457-0820
(International). The confirmation code is 360283. The Webcast of this
call will be archived on the Company's Website at www.ptek.com.
About Ptek Holdings, Inc.
Ptek Holdings, Inc. is a leading provider of business
communications services that enable global enterprises to better
communicate with constituents, acquire and retain customers and
automate business processes. These solutions, which include
conferencing, Web collaboration and messaging, are marketed under the
Premiere Conferencing and Xpedite(R) brand names.
Ptek Holdings' corporate headquarters is located at 3399 Peachtree
Road NE, The Lenox Building, Suite 700, Atlanta, GA 30326. Additional
information can be found at www.ptek.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 Ptek's forward-looking statements, including the
following factors: our ability to respond to rapid technological
change, the development of alternatives to our products and services
and the risk of obsolescence of our products, services and technology;
market acceptance of new products and services; our ability to manage
our growth; costs or difficulties related to the integration of
businesses and technologies, if any, acquired or that may be acquired
by us may be greater than expected; expected cost savings from past or
future mergers and acquisitions may not be fully realized or realized
within the expected time frame; revenues following past or future
mergers and acquisitions may be lower than expected; operating costs
or customer loss and business disruption following past or future
mergers and acquisitions may be greater than expected; the success of
our strategic relationships, including the amount of business
generated and the viability of the strategic partners, may not meet
expectations; possible adverse results of pending or future litigation
or adverse results of current or future infringements claims; our
ability to service or repay all or a portion of our convertible notes
issued to the public, which mature on July 1, 2004, and on August 15,
2008; our ability to repurchase or refinance our existing convertible
notes due 2004 if so required or desired; the failure of the purchaser
to pay the liabilities assumed in, or incurred after, the sale or our
former Voicecom business unit; our services may be interrupted due to
failure of the platforms and network infrastructure utilized in
providing our services; our services may be interrupted and our costs
may increase due to the filing by MCI and Global Crossing for
protection under Chapter 11 of the United States Bankruptcy Code;
competitive pressures among communications services providers,
including pricing pressures, may increase significantly, particularly
after the emergence of MCI and Global Crossing from protection under
Chapter 11 of the United States Bankruptcy Code; domestic and
international terrorist activity, war and political instability may
adversely affect the level of services utilized by our customers and
the ability of those customers to pay for services utilized; risks
associated with expansion of our international operations; general
economic or business conditions, internationally, nationally or in the
local jurisdiction in which we are doing business, may be less
favorable than expected; legislative or regulatory changes, such as
the recent Federal Communications Commission's revisions to the rules
interpreting the Telephone Consumer Protection Act of 1991, may
adversely affect the businesses in which we are engaged; changes in
the securities markets may negatively impact us; increased leverage in
the future may harm our financial condition and results of operations;
our dependence on our subsidiaries for cash flow may negatively affect
our business and our ability to pay amounts due under our
indebtedness; and other factors described from time to time in our
press releases, reports and other filings with the SEC. These and
other factors may cause our actual results to differ materially from
any of our forward-looking statements. All forward-looking statements
attributable to us or a person acting on our behalf are expressly
qualified in their entirety by this cautionary statement.
PTEK HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Three Months Ended Nine Months Ended
------------------------- -------------------------
September 30, September 30, September 30, September 30,
2003 2002 2003 2002
------------ ------------ ------------ ------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
REVENUES $96,101 $86,012 $280,172 $256,742
TELECOMMUNICATIONS
COSTS 20,471 16,390 57,271 50,269
------------ ------------ ------------ ------------
GROSS PROFIT 75,630 69,622 222,901 206,473
DIRECT OPERATING
COSTS 13,910 13,544 40,716 40,003
------------ ------------ ------------ ------------
CONTRIBUTION MARGIN 61,720 56,078 182,185 166,470
------------ ------------ ------------ ------------
OTHER OPERATING EXPENSES:
Selling and
marketing 24,856 21,456 75,965 66,454
General and
administrative 14,571 14,029 41,616 39,807
Research and
development 2,378 1,589 6,560 5,625
Depreciation 5,980 5,554 17,253 16,569
Amortization 1,632 2,362 5,047 8,515
Restructuring costs 9,638 - 9,638 -
Equity based
compensation 1,213 315 2,338 1,641
Legal settlements, net - 4,050 - 7,325
------------ ------------ ------------ ------------
Total operating
expenses 60,268 49,355 158,417 145,936
------------ ------------ ------------ ------------
OPERATING INCOME 1,452 6,723 23,768 20,534
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSE):
Interest expense (2,092) (2,994) (7,352) (8,898)
Interest income 153 - 593 248
Gain on sale of
marketable securities 128 - 629 789
(Loss) Gain on
repurchase of bonds (980) - 417 -
Other, net (288) (25) 118 (108)
------------ ------------ ------------ ------------
Total other income
(expense) (3,079) (3,019) (5,595) (7,969)
------------ ------------ ------------ ------------
INCOME (LOSS) FROM
CONTINUING OPERATIONS
BEFORE INCOME TAXES (1,627) 3,704 18,173 12,565
INCOME TAX
(BENEFIT) EXPENSE (9,677) 944 (1,409) 4,827
------------ ------------ ------------ ------------
INCOME FROM
CONTINUING
OPERATIONS $8,050 $2,760 $19,582 $7,738
============ ============ ============ ============
DISCONTINUED OPERATIONS:
Loss from operations from
Voicecom (including loss
on disposal of $13,887
for the nine months ended
September 30, 2002) (1,465) - (1,597) (19,716)
Income tax benefit (570) - (621) (6,901)
------------ ------------ ------------ ------------
Loss on discontinued
operations (895) - (976) (12,815)
------------ ------------ ------------ ------------
NET INCOME (LOSS) $7,155 $2,760 $18,606 $(5,077)
============ ============ ============ ============
BASIC EARNINGS (LOSS) PER SHARE:
Income from continuing
operations $8,050 $2,760 $19,582 $7,738
------------ ------------ ------------ ------------
Net Income (loss) $7,155 $2,760 $18,606 $(5,077)
------------ ------------ ------------ ------------
BASIC WEIGHTED AVERAGE
SHARES OUTSTANDING: 53,709 54,265 52,953 53,623
============ ============ ============ ============
Basic earnings (loss) per share:
Continuing operations $0.15 $0.05 $0.37 $0.14
Discontinued
operations $(0.02) $ - $(0.02) $(0.24)
------------ ------------ ------------ ------------
Net Income (loss) $0.13 $0.05 $0.35 $(0.10)
============ ============ ============ ============
DILUTED EARNINGS (LOSS) PER SHARE:
Income from continuing
operations for purposes of
computing diluted net
income per share $8,375 $2,760 $19,907 $7,738
------------ ------------ ------------ ------------
Net Income (loss) for
purposes of computing
diluted net income
per share $7,480 $2,760 $18,931 $(5,077)
------------ ------------ ------------ ------------
DILUTED WEIGHTED
AVERAGE SHARES
OUTSTANDING: 63,865 57,064 57,561 56,116
============ ============ ============ ============
Diluted earnings (loss) per share:
Continuing operations $0.13 $0.05 $0.35 $0.14
Discontinued
operations $(0.01) $ - $(0.02) $(0.23)
------------ ------------ ------------ ------------
Net Income (loss) $0.12 $0.05 $0.33 $(0.09)
============ ============ ============ ============
PTEK HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2003 AND DECEMBER 31, 2002
(IN THOUSANDS, EXCEPT SHARE DATA)
September 30, December 31,
2003 2002
------------ -----------
(unaudited)
ASSETS
CURRENT ASSETS
Cash and equivalents $33,123 $68,777
Restricted cash, current 1,250 -
Marketable securities, available for sale - 641
Accounts receivable (less allowances of
$7,055 and $7,074, respectively) 60,896 51,909
Prepaid expenses and other 7,051 8,872
Deferred income taxes, net 16,098 15,801
----------- ---------
Total current assets 118,418 146,000
----------- ---------
PROPERTY AND EQUIPMENT, NET 62,911 63,148
OTHER ASSETS
Goodwill 123,066 123,066
Intangibles, net 26,062 7,802
Deferred income taxes, net 12,577 6,648
Notes receivable - employees 1,730 2,083
Restricted cash, non-current 3,125 -
Other assets 6,069 3,346
----------- ---------
$353,958 $352,093
=========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $37,612 $37,110
Accrued taxes 8,388 8,250
Accrued expenses 34,381 32,319
Current maturities of long term debt & capital
lease obligations 53,255 4,320
Accrued restructuring costs 5,266 1,898
----------- ---------
Total current liabilities 138,902 83,897
----------- ---------
LONG TERM LIABILITIES
Convertible subordinated notes 85,000 172,500
Long term debt & capital lease obligations 1,192 3,407
Other accrued expenses 13,966 7,951
----------- ---------
Total long term liabilities 100,158 183,858
----------- ---------
SHAREHOLDERS' EQUITY
Common stock $0.01 par value; 150,000,000
shares authorized, 56,381,426 and 58,733,628
shares issued in 2003 and 2002 and 56,381,426
and 53,540,828 shares outstanding in 2003 and
2002, respectively 564 587
Unrealized gain on marketable securities - 276
Additional paid-in capital 592,550 603,883
Unearned restricted stock compensation (1,016) (1,913)
Treasury stock, at cost - (22,112)
Note receivable, shareholder (5,268) (5,042)
Cumulative translation adjustment (2,068) (2,810)
Accumulated deficit (469,864) (488,531)
----------- ---------
Total shareholders' equity 114,898 84,338
----------- ---------
$353,958 $352,093
----------- ---------
PTEK HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS, UNAUDITED)
Sept. 30, June 30,
2003 2003
----------- ---------
NET DEBT TO EQUITY(1)
Current maturities of long-term debt and capital
lease obligations 53,255 4,002
Long-term debt and capital lease obligations 1,192 1,534
Convertible subordinated notes 85,000 133,000
----------- ---------
TOTAL DEBT 139,447 138,536
Cash and cash equivalents(2) 33,123 30,453
----------- ---------
TOTAL CASH 33,123 30,453
----------- ---------
NET DEBT (TOTAL DEBT LESS CASH) 106,324 108,083
----------- ---------
EQUITY 114,898 97,043
----------- ---------
NET DEBT TO EQUITY 0.93 1.11
=========== =========
(1) Net debt is a non-GAAP financial measure. Management believes
that net debt provides useful information regarding the level of the
Company's indebtedness by reflecting cash and cash equivalents that
could be used to pay debt.
(2) Excludes current and non-current restricted cash.
PTEK HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(IN THOUSANDS, UNAUDITED)
Nine Months Ended
September 30,
2003 2002
------- -------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) 18,606 (5,077)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Loss on discontinued operation 976 12,815
Depreciation 17,253 16,569
Amortization 5,047 8,515
Gain on sale of marketable securities, available
for sale (629) (789)
Gain on repurchase of bonds (417) -
Deferred income taxes (5,462) 2,099
Restructuring costs 9,638 -
Payments for restructuring costs (2,339) (2,228)
Non-cash portion of legal settlement - 3,075
Equity based compensation 2,338 1,641
Changes in assets and liabilities: -
Accounts receivable, net (5,010) (7,427)
Prepaid expenses and other current assets 937 4,566
Accounts payable and accrued expenses (4,890) (19,431)
-------- ---------
Total adjustments 17,442 19,405
-------- ---------
Net cash provided by operating activities from
continuing operations 36,048 14,328
-------- ---------
Net cash used in operating activities from
discontinued operations - (5,804)
-------- ---------
Total cash provided by operating activities 36,048 8,524
-------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (12,524) (11,159)
Proceeds from sale of business - 7,248
Business acquisitions (22,486) -
Increase in restricted cash for acquisitions (4,375) -
Sale of marketable securities 813 875
Other - (526)
-------- ---------
Net cash used in investing activities from
continuing operations (38,572) (3,562)
-------- ---------
Net cash used in investing activities from
discontinued operations - (155)
-------- ---------
Net cash used in investing activities (38,572) (3,717)
-------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments under borrowing arrangements (124,576) (2,497)
Proceeds from long term borrowing arrangements 82,671 4,000
Purchase of treasury stock, at cost (627) (537)
Exercise of stock options 10,003 270
-------- ---------
Net cash (used in) provided by financing
activities from continuing operations (32,529) 1,236
-------- ---------
Net cash used in financing activities from
discontinued operations - (1,086)
-------- ---------
Total cash (used in) provided by financing
activities (32,529) 150
-------- ---------
Effect of exchange rate changes on cash and
equivalents (601) 2,031
-------- ---------
NET DECREASE IN CASH AND EQUIVALENTS (35,654) 6,988
-------- ---------
CASH AND EQUIVALENTS, beginning of period 68,777 48,023
-------- ---------
CASH AND EQUIVALENTS, end of period $33,123 $55,011
-------- ---------
CONTACT: Ptek Holdings, Inc., Atlanta
Investor Relations
Sean O'Brien, 404-262-8462