Exhibit 99.1
Ptek Reports $115.2 Million in Revenues;
$0.16 Normalized Diluted EPS from Continuing Operations;
Cash Flow from Operations Up 50% to $24.7 Million
ATLANTA--(BUSINESS WIRE)--Oct. 27, 2004--Ptek Holdings, Inc.
(NASDAQ: PTEK)(www.ptek.com), a leading provider of innovative
business, data and group communications services, today announced
results for the third quarter ended September 30, 2004. Revenues were
$115.2 million for the quarter, a 19.9% increase from $96.1 million in
the third quarter of 2003. Operating income grew 70.5% in the third
quarter of 2004, totaling $18.9 million versus $11.1 million,
excluding restructuring charges, in the comparable prior year period.
Excluding a positive adjustment to income tax estimates and the
benefit of the discounted early retirement of an acquisition payable,
normalized income from continuing operations was $11.5 million and
normalized diluted EPS from continuing operations was $0.16 in the
third quarter of 2004 (see table attached for calculation of these
non-GAAP financial measures). Including these positive adjustments,
GAAP income from continuing operations was $14.9 million in the third
quarter, and GAAP diluted EPS from continuing operations was $0.21.
Revenue at Premiere Conferencing grew 33.3% in the third quarter,
totaling $53.8 million versus $40.3 million in the comparable prior
year period. Revenue at Xpedite grew 10.1% during the third quarter of
2004, totaling $61.5 million versus $55.8 million in the third quarter
of 2003.
"We are pleased with our Company's overall performance in the
third quarter, an historically soft period due to seasonality," said
Boland T. Jones, Founder, Chairman and CEO of Ptek Holdings, Inc. "Our
sales engine, product innovation, profitability, cash generation and
balance sheet all remain strong."
Revenues for the nine months ended September 30, 2004 were $332.1
million compared to $280.2 million in the nine months ended September
30, 2003. Excluding the non-recurring charge for the early retirement
of the Company's convertible notes due 2008 realized in the second
quarter of 2004 and the positive adjustment to income tax estimates
and the benefit of the discounted early retirement of an acquisition
payable realized in the third quarter of 2004, normalized income from
continuing operations was $32.0 million and diluted EPS from
continuing operations was $0.45 for the first nine months of 2004 (see
table attached for calculation of these non-GAAP financial measures).
Including these items, GAAP income from continuing operations for the
nine months ended September, 30 2004 totaled $23.6 million and GAAP
diluted EPS from continuing operations was $0.35.
Third Quarter 2004 Accomplishments
-- Hosted 497 million minutes of group meetings
-- Delivered 852 million data communications
-- Increased revenue from transactional and new media data
communications by 20.5% from the comparable prior year period
-- Increased revenue from Web-based conferencing services by 125%
from the third quarter of 2003
-- Grew international conferencing revenue by 33% from the
comparable prior year period
-- Generated $24.7 million of cash flow from operating
activities, an increase of 50% from the third quarter of 2003
-- Repurchased 1,000,000 shares of Ptek common stock in the open
market
Financial Outlook
The following statements are based on Ptek's current expectations
as of October 27, 2004. 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 estimates revenues and income from continuing
operations will increase in the fourth quarter from the third quarter
of 2004, excluding the positive adjustment to income tax estimates and
the benefit of the discounted early retirement of an acquisition
payable realized in the third quarter.
The Company estimates revenues in 2005 will be in the range of
$490 to $500 million and diluted EPS will be in the range of $0.67 to
$0.70. The Company expects that its largest customer will account for
2.0% to 3.0% of total revenues in 2005.
Conference Call
The Company will hold a conference call at 5:00 Eastern this
afternoon 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) 810-0924 (US & Canada) or (913) 981-4900
(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 8:00 p.m.
Eastern, through midnight Eastern November 5 and may be accessed by
calling (888) 203-1112 (US & Canada) or (719) 457-0820
(International). The confirmation code is 865655. 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 innovative business,
data and group communications services for global enterprises.
Companies use our audio and data conferencing solutions to conduct
group meetings and presentations over the phone or Web. We also enable
our customers to process and deliver large quantities of
individualized, business critical information, such as electronic
statements and invoices, financial transaction and travel
confirmations, and drug prescriptions, via our global ASP platform.
Ptek serves companies in nearly every business sector, including
healthcare, technology, publishing, financial services, travel and
hospitality. Our services are marketed under the Premiere Conferencing
and Xpedite(R) brand names.
Ptek Holdings' corporate headquarters is located at 3399 Peachtree
Road NE, 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, but not
limited to, the following factors: technological change; the
development of alternatives to our services; our ability to manage our
growth; integration of acquired companies; possible adverse effects on
our financial condition if we are unable to retain IBM as a customer
at the levels currently forecasted; possible adverse results of
pending or future litigation or infringement claims; service
interruptions; competitive pressures, including pricing pressures;
general domestic and international economic, business or political
conditions; legislative or regulatory changes; increased financial
leverage; our dependence on our subsidiaries for cash flow; 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 Affecting Future Performance" section of our Annual Report on
Form 10-K for the year ended December 31, 2003. 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, 2004 AND 2003
(UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Nine Months
Ended Ended
------------------ -------------------
September 30, September 30,
2004 2003 2004 2003
--------- -------- --------- ---------
REVENUES $115,198 $96,101 $332,105 $280,172
OPERATING EXPENSES:
Cost of revenues (exclusive
of depreciation shown
separately below) 37,157 34,381 109,773 97,987
Selling and marketing 31,475 24,856 87,091 75,965
General and administrative 16,140 14,571 47,210 41,616
Research and development 2,723 2,378 8,154 6,560
Depreciation 6,469 5,980 19,302 17,253
Amortization 2,419 1,632 6,232 5,047
Restructuring costs - 9,638 - 9,638
Equity based compensation (96) 1,213 2,182 2,338
--------- -------- --------- ---------
Total operating expenses 96,287 94,649 279,944 256,404
--------- -------- --------- ---------
OPERATING INCOME 18,911 1,452 52,161 23,768
-------- ------- -------- --------
OTHER INCOME (EXPENSE):
Interest expense (728) (2,092) (3,875) (7,352)
Interest income 136 153 484 593
Debt conversion costs - - (17,027) -
Gain (loss) on sale of
marketable securities - 128 (87) 629
Gain on repurchase of bonds - (980) - 417
Other, net 998 (288) 1,827 118
--------- -------- --------- ---------
Total other income (expense) 406 (3,079) (18,678) (5,595)
--------- -------- --------- ---------
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES 19,317 (1,627) 33,483 18,173
INCOME TAX EXPENSE (BENEFIT) 4,427 (9,677) 9,911 (1,409)
--------- -------- --------- ---------
INCOME FROM CONTINUING
OPERATIONS $ 14,890 $ 8,050 $ 23,572 $ 19,582
========= ======== ========= =========
DISCONTINUED OPERATIONS:
Gain (loss) from operations
from Voicecom - (1,465) 1,956 (1,597)
Income tax expense (benefit) - (570) 761 (621)
--------- -------- --------- ---------
Gain (loss) on
discontinued operations - (895) 1,195 (976)
--------- -------- --------- ---------
NET INCOME $ 14,890 $ 7,155 $ 24,767 $ 18,606
========= ======== ========= =========
BASIC EARNINGS PER SHARE:
Income from continuing
operations $ 14,890 $ 8,050 $ 23,572 $ 19,582
--------- -------- --------- ---------
Net Income $ 14,890 $ 7,155 $ 24,767 $ 18,606
--------- -------- --------- ---------
BASIC WEIGHTED AVERAGE SHARES
OUTSTANDING: 69,709 53,709 62,003 52,953
========= ======== ========= =========
Basic earnings per share:
Continuing operations $ 0.21 $ 0.15 $ 0.38 $ 0.37
Discontinued operations $ - $ (0.02) $ 0.02 $ (0.02)
--------- -------- --------- ---------
Net Income $ 0.21 $ 0.13 $ 0.40 $ 0.35
========= ======== ========= =========
DILUTED EARNINGS PER SHARE:
Income from continuing
operations for purposes of
computing diluted net income
per share $ 14,890 $ 8,375 $ 24,954 $ 19,907
--------- -------- --------- ---------
Net Income for purposes of
computing diluted net income
per share $ 14,890 $ 7,480 $ 26,149 $ 18,931
--------- -------- --------- ---------
DILUTED WEIGHTED AVERAGE
SHARES OUTSTANDING: 71,996 63,865 71,975 57,561
========= ======== ========= =========
Diluted earnings per share:
Continuing operations $ 0.21 $ 0.13 $ 0.35 $ 0.35
Discontinued operations $ - $ (0.01) $ 0.01 $ (0.02)
--------- -------- --------- ---------
Net Income $ 0.21 $ 0.12 $ 0.36 $ 0.33
========= ======== ========= =========
PTEK HOLDINGS, INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2004 AND DECEMBER 31, 2003
(IN THOUSANDS, EXCEPT SHARE DATA)
September 30, December 31,
2004 2003
-------------- --------------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and equivalents $ 15,467 $ 23,946
Marketable securities, available for
sale 219 575
Accounts receivable (less allowances of
$4,197 and $4,451, respectively) 68,946 57,760
Prepaid expenses and other current
assets 6,370 6,348
Deferred income taxes, net 20,177 20,938
-------------- --------------
Total current assets 111,179 109,567
PROPERTY AND EQUIPMENT, NET 69,637 63,563
OTHER ASSETS
Goodwill 160,653 123,066
Intangibles, net of amortization 34,385 24,553
Deferred income taxes, net 4,666 10,521
Notes receivable - employees 1,276 1,808
Other assets 3,657 6,219
-------------- --------------
$ 385,453 $ 339,297
============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 39,371 $ 36,621
Accrued taxes 8,579 10,984
Accrued expenses 34,171 33,891
Current maturities of long-term debt and
capital lease obligations 37 15,000
Accrued restructuring costs 1,160 4,445
-------------- --------------
Total current liabilities 83,318 100,941
LONG-TERM LIABILITIES
Convertible subordinated notes - 85,000
Long-term debt and capital lease
obligations 54,754 5,000
Other accrued expenses 7,162 14,638
-------------- --------------
Total long-term liabilities 61,916 104,638
SHAREHOLDERS' EQUITY
Common stock $0.01 par value;
150,000,000 shares authorized,
70,357,327 and 57,289,895 shares
issued and outstanding at
September 30, 2004 and December 31,
2003, respectively 704 572
Unrealized loss on marketable
securities, available for sale (44) (110)
Additional paid-in-capital 682,970 602,452
Unearned restricted stock compensation (203) (813)
Note receivable, shareholder (5,583) (5,343)
Cumulative translation adjustment 144 (507)
Accumulated deficit (437,769) (462,533)
-------------- --------------
Total shareholders' equity 240,219 133,718
-------------- --------------
$ 385,453 $ 339,297
============== ==============
PTEK HOLDINGS, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTMBER 30, 2004 AND 2003
(IN THOUSANDS, UNAUDITED)
2004 2003
----------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income 24,767 18,606
Adjustments to reconcile net income to
net cash provided by operating activities:
(Gain) loss on discontinued operation (1,195) 976
Debt conversion costs 17,027 -
Depreciation 19,302 17,253
Amortization 6,232 5,047
Amortization of deferred financing costs 559 -
Loss (gain) on sale of marketable
securities, available for sale 87 (629)
Gain on repurchase of bonds - (417)
Deferred income taxes 5,110 (5,462)
Loss on disposal of assets 118
Gain on note receivable (1,223) -
Restructuring costs, net (3,721) 9,638
Payments for discontinued operations (1,697) (2,177)
Equity based compensation 2,182 2,338
Changes in assets and liabilities:
Accounts receivable, net (6,038) (5,010)
Prepaid expenses and other current assets (723) 937
Accounts payable and accrued expenses (5,410) (4,740)
----------- ----------
Total adjustments 30,610 17,754
----------- ----------
Total cash provided by
operating activities 55,377 36,360
----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (19,487) (12,524)
Business acquisitions (62,386) (22,798)
Increase in restricted cash for acquisitions - (4,375)
Sale of marketable securities 422 813
Purchase of Marketable securities (46) -
Proceeds from note receivable 2,400 -
----------- ----------
Net cash used in investing
activities (79,097) (38,884)
----------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal proceeds (payments) under
borrowing arrangements 34,600 (41,905)
Make whole interest payment - convertible
notes (16,255) -
Purchase of treasury stock, at cost (12,811) (627)
Exercise of stock options 10,015 10,003
----------- ----------
Total cash provided by
(used in) financing
activities 15,549 (32,529)
----------- ----------
Effect of exchange rate changes on cash and
equivalents (308) (601)
----------- ----------
NET DECREASE IN CASH AND EQUIVALENTS (8,479) (35,654)
----------- ----------
CASH AND EQUIVALENTS, beginning of period $ 23,946 $ 68,777
----------- ----------
CASH AND EQUIVALENTS, end of period $ 15,467 $ 33,123
=========== ==========
PTEK HOLDINGS, INC AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Nine
Months Months
Ended Ended
-----------------------
September 30, 2004
-----------------------
Normalized Income from continuing operations
(1)
Income from continuing operations for
purposes of computing diluted income per
share $ 14,890 $ 24,954
Elimination of one time tax adjustments (3,086) (3,086)
Elimination of discounted early retirement
of an acquisition payable (tax effected
at 38.9%) (260) (260)
Debt conversion costs (tax effected at
38.9%) - 10,403
----------- -----------
Normalized income from continuing
operations $ 11,544 $ 32,011
----------- -----------
Normalized Diluted EPS (1)
From continuing operations $ 0.21 $ 0.35
Elimination of one time tax adjustments (0.05) (0.04)
Elimination of discounted early retirement
of an acquisition payable (tax effected
at 38.9%) - -
Debt conversion costs (tax effected at
38.9%) - 0.14
----------- -----------
Normalized income from continuing
operations $ 0.16 $ 0.45
Three
Months
Ended
September 30,
2003
-----------
Operating income excluding restructuring
costs (1)
Operating Income 1,452
Restrucutring costs 9,638
-----------
Operating income excluding restructuring
costs $ 11,090
-----------
(1) Normalized income from continuing operations, normalized
diluted EPS and operating income excluding restructuring costs are
non- GAAP financial measures. Management believes that these measures
provide useful information regarding underlying trends in our
continuing operations by excluding non-recurring items that are
unrelated to our ongoing operations.
CONTACT: Ptek Holdings, Inc., Atlanta
Investor Relations
Sean O'Brien, 404/262-8462