Exhibit 99.1
Premiere Global Services Reports 2004 Results: Revenues $449.4M up 18%;
Normalized Operating Income $71.4M up 48%;
Cash Flow from Operating Activities $82.7M up 38%
ATLANTA--(BUSINESS WIRE)--Feb. 17, 2005--
$117.3M in Revenues and $0.17 Normalized Diluted EPS from Continuing
Operations in Q4
Premiere Global Services, Inc. (NYSE: PGI), a provider of
innovative ASP-based communication technologies for business process
automation, today announced results for the fourth quarter and fiscal
year ended December 31, 2004. Revenues were $117.3 million for the
quarter, a 16.0% increase from $101.1 million in the fourth quarter of
2003. Operating income grew 30.4% in the fourth quarter of 2004,
totaling $19.2 million versus normalized operating income(a) of $14.7
million ($13.4 million GAAP operating income) in the comparable prior
year period. Excluding a gain on the prepayment of a note receivable,
normalized income from continuing operations(a) was $11.9 million and
normalized diluted EPS from continuing operations(a) was $0.17 in the
fourth quarter of 2004. Including this item, GAAP income from
continuing operations was $17.1 million and GAAP diluted EPS from
continuing operations was $0.24 in the fourth quarter.
Revenues in 2004 totaled $449.4 million, a 17.9% increase from
$381.3 million in 2003. Operating income grew 48.3% in 2004, totaling
$71.4 million versus normalized operating income(a) of $48.1 million
($37.2 million GAAP operating income) in the prior year. Normalized
income from continuing operations(a) was $43.9 million and normalized
diluted EPS from continuing operations(a) was $0.61 in 2004. Including
these items, GAAP income from continuing operations was $40.7 million
and GAAP diluted EPS from continuing operations was $0.58 in 2004.
"I am proud to report another great year for our Company," said
Boland T. Jones, Founder, Chairman and CEO of Premiere Global
Services, Inc. "We continue to grow our roster of enterprise customers
by enabling them to automate components of their critical business
processes through our communications platform."
2004 Sales Accomplishments
-- Expanded by more than 13,000 the number of enterprise accounts
using our communication technologies platform
-- Increased Conferencing & Collaboration (Premiere Conferencing)
revenue by 28.6% to $202.8 million
-- Grew Data Communications (Xpedite) revenue by 10.3% to $246.9
million
-- Expanded International Conferencing & Collaboration revenue by
42.5%
-- Grew Web-based collaboration revenue by 100.8%
-- Increased transactional and new media data communications
revenue by 25%
-- Expanded revenue from automated voice applications by 83.3%
2004 Financial Accomplishments
-- Generated $82.7 million of cash flow from operating
activities, up 38.1% from 2003
-- Decreased cost of revenues (excluding depreciation) by 240
basis points through aggressive network cost management
-- Repurchased 1.5 million shares of common stock in the open
market
-- Reduced net debt(a) by 47.8% to $42.3 million
-- Doubled shareholders equity to $266.7 million
-- Expanded bank line of credit borrowing limit to $120 million
(recently increased to $180 million)
2004 Strategic Accomplishments
-- Opened access to our communication technologies platform via
standard protocols
-- Successfully completed accretive tuck-in acquisitions
-- Realized significant return on investment in EasyLink debt
-- Transitioned to single brand as Premiere Global Services to
better reflect business focus
-- Transferred common stock listing to the New York Stock
Exchange(R)
Financial Outlook
The following statements are based on Premiere Global's current
expectations as of February 17, 2005. 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 in the first quarter of 2005 will
be in the range of $121 to $122 million and that diluted EPS will be
approximately $0.17. The Company reiterates its 2005 financial outlook
of revenues in the range of $490 to $500 million and diluted EPS in
the range of $0.67 to $0.70, not including the impact of the new
accounting standard requiring the expensing of stock options that
becomes effective July 1, 2005. Included in this outlook is the
expectation that the Company's largest customer will account for 2.0%
to 3.0% of total revenues in 2005.
As previously announced, Premiere Global Services signed a
definitive agreement to acquire the conferencing services division of
Citizens Communications Company (NYSE: CZN). The Company anticipates
the acquisition will be accretive to revenues and diluted EPS in 2005.
The acquisition is expected to close late in the first quarter of
2005, and the Company anticipates raising its financial outlook at
that time.
(a) Indicates a non-GAAP financial measure. See table attached for
reconciliation of these non-GAAP financial measures to the most
directly comparable GAAP financial measures.
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 5-10 minutes prior to the scheduled
start time: (800) 289-0569 (US & Canada) or (913) 981-5542
(International). The conference call will be simultaneously broadcast
over the Internet via SoundCast(R), a Premiere Global service, and can
be found at http://www.premiereglobal.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 February 25 and may be accessed by
calling (888) 203-1112 (US & Canada) or (719) 457-0820
(International). The confirmation code is 4898889. The Webcast of this
call will be archived on the Company's Website at
http://www.premiereglobal.com.
About Premiere Global Services, Inc.
Premiere Global Services, Inc., formerly Ptek Holdings, Inc.,
innovates and markets communication technologies on our proprietary
platform that automate and enhance our enterprise customers' critical
business processes.
With approximately 2,200 employees in 18 countries around the
world, Premiere Global Services(SM) has an established customer base
of greater than 45,000 corporate accounts, including a majority of the
Fortune 500. Customers use our services for a variety of business
processes, including investor calls, receivables collections,
Web-based continuing education, confirmations of securities trades and
travel reservations, electronic statements and invoices, local-access
international conferencing, document capture and automation, e-mail
campaign marketing, mobile access and printing of documents, automated
prescription renewals and other applications.
Our corporate headquarters is located at 3399 Peachtree Road NE,
Suite 700, Atlanta, GA 30326. Additional information can be found at
www.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: 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.
PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2004 AND 2003
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended Twelve Months Ended
------------------------- ----------------------
December 31, December 31,
2004 2003 2004 2003
------------ ------------ ------------ ---------
(Unaudited) (Unaudited) (Unaudited)
REVENUES $117,266 $101,108 $449,371 $381,280
OPERATING EXPENSES:
Cost of revenues
(exclusive of
depreciation shown
separately below) 40,558 38,835 160,690 145,549
Selling and marketing 30,619 25,335 117,711 101,300
General and
administrative 13,230 11,586 50,082 44,474
Research and
development 2,816 2,009 10,970 8,569
Depreciation 7,070 6,322 26,372 23,575
Amortization 2,660 1,698 8,891 6,746
Restructuring costs - 1,309 - 10,947
Equity based
compensation 1,078 584 3,261 2,921
------------ ------------ ------------ ---------
Total operating
expenses 98,031 87,678 377,977 344,081
------------ ------------ ------------ ---------
OPERATING INCOME 19,235 13,430 71,394 37,199
------------ ------------ ------------ ---------
OTHER INCOME
(EXPENSE):
Interest expense (810) (2,252) (4,687) (9,603)
Interest income 149 282 633 874
Debt conversion costs - - (17,027) -
Gain (loss) on sale of
marketable securities 71 971 (16) 1,600
Gain on prepayment of
note receivable 8,520 - 8,520 -
Gain on repurchase of
bonds - (376) - 41
Other, net 606 (37) 2,433 81
------------ ------------ ------------ ---------
Total other income
(expense) 8,536 (1,412) (10,144) (7,007)
------------ ------------ ------------ ---------
INCOME FROM CONTINUING
OPERATIONS BEFORE
INCOME TAXES 27,771 12,018 61,250 30,192
INCOME TAX EXPENSE 10,654 4,688 20,565 3,279
------------ ------------ ------------ ---------
INCOME FROM CONTINUING
OPERATIONS $17,117 $7,330 $40,685 $26,913
============ ============ ============ =========
DISCONTINUED
OPERATIONS:
Gain (loss) from
operations from
Voicecom - - 1,956 (1,597)
Income tax expense
(benefit) - - 761 (621)
------------ ------------ ------------ ---------
Gain (loss) on
discontinued
operations - - 1,195 (976)
------------ ------------ ------------ ---------
NET INCOME $17,117 $7,330 $41,880 $25,937
============ ============ ============ =========
BASIC EARNINGS (LOSS)
PER SHARE:
Income from continuing
operations $17,117 $7,330 $40,685 $26,913
------------ ------------ ------------ ---------
Net Income $17,117 $7,330 $41,880 $25,937
------------ ------------ ------------ ---------
BASIC WEIGHTED AVERAGE
SHARES OUTSTANDING: 69,226 56,181 63,818 53,767
============ ============ ============ =========
Basic earnings (loss)
per share:
Continuing operations $0.25 $0.13 $0.64 $0.50
Discontinued
operations $0.00 $0.00 $0.02 $(0.02)
------------ ------------ ------------ ---------
Net Income $0.25 $0.13 $0.66 $0.48
============ ============ ============ =========
DILUTED EARNINGS
(LOSS) PER SHARE:
Income from continuing
operations for purposes
of computing diluted
net income per share $17,117 $7,978 $42,071 $27,886
------------ ------------ ------------ ---------
Net Income for purposes
of computing diluted
net income per share $17,117 $7,978 $43,266 $26,910
------------ ------------ ------------ ---------
DILUTED WEIGHTED
AVERAGE SHARES
OUTSTANDING: 71,564 72,437 72,012 61,301
============ ============ ============ =========
Diluted earnings (loss)
per share:
Continuing operations $0.24 $0.11 $0.58 $0.45
Discontinued
operations $0.00 $0.00 $0.02 $(0.01)
------------ ------------ ------------ ---------
Net Income $0.24 $0.11 $0.60 $0.44
============ ============ ============ =========
PREMIERE GLOBAL SERVICES, INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2004 AND 2003
(IN THOUSANDS, EXCEPT SHARE DATA)
December 31, December 31,
2004 2003
------------- ------------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and equivalents $25,882 $23,946
Marketable securities, available for sale 576 575
Accounts receivable (less allowances of
$5,706 and $4,451, respectively) 72,055 57,760
Prepaid expenses and other 5,148 6,348
Deferred income taxes, net 17,706 20,938
------------- ------------
Total current assets 121,367 109,567
PROPERTY AND EQUIPMENT, NET 74,050 63,563
OTHER ASSETS
Goodwill 192,147 123,066
Intangibles, net 40,590 24,553
Deferred income taxes, net 3,461 10,521
Notes receivable - employees - 1,808
Other assets 3,861 6,219
------------- ------------
$435,476 $339,297
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $37,337 $36,621
Accrued taxes 15,668 10,984
Accrued expenses 40,456 33,891
Current maturities of long term debt and
capital lease obligations 37 15,000
Accrued restructuring costs 1,071 4,445
------------- ------------
Total current liabilities 94,569 100,941
LONG-TERM LIABILITIES
Convertible subordinated notes - 85,000
Long-term debt and capital lease obligations 68,147 5,000
Other accrued expenses 6,094 14,638
------------- ------------
Total long term liabilities 74,241 104,638
SHAREHOLDERS' EQUITY
Common stock $0.01 par value; 150,000,000
shares authorized, 70,740,243 and 57,289,895
shares issued and outstanding at December 31, 2004
and 2003, respectively 708 572
Unrealized loss on marketable securities (6) (110)
Additional paid-in capital 689,851 602,452
Unearned restricted stock compensation - (813)
Note receivable, shareholder (5,662) (5,343)
Cumulative translation adjustment 2,427 (507)
Accumulated deficit (420,652) (462,533)
------------- ------------
Total shareholders' equity 266,666 133,718
------------- ------------
$435,476 $339,297
============= ============
PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
TWELVE MONTHS ENDED DECEMBER 31, 2004 AND 2003
(IN THOUSANDS)
Twelve Months Ended
December 31,
2004 2003
----------- --------
(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income 41,880 25,937
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 26,372 23,575
Amortization 8,891 6,746
Amortization of deferred financing costs 659 -
Loss (gain) on sale of marketable securities,
available for sale 16 (1,600)
Gain on repurchase of bonds - (41)
Deferred income taxes 10,087 (1,638)
Loss on disposal of assets 118 -
Gain on note receivable and other liabilities (10,968) -
Restructuring costs, net (3,974) 6,368
Payments for discontinued operations (2,081) (1,001)
Equity based compensation 3,261 2,921
Changes in assets and liabilities: - -
Accounts receivable, net (1,761) (1,875)
Prepaid expenses and other current assets 2,898 2,868
Accounts payable and accrued expenses (8,575) (3,402)
----------- --------
Total adjustments 40,775 33,897
----------- --------
Total cash provided by operating
activities 82,655 59,834
----------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (24,783) (18,455)
Business acquisitions (98,227) (23,340)
Increase in restricted cash for acquisitions - -
Sale of marketable securities 422 2,942
Purchase of marketable securities (250) (1,580)
Purchase of notes receivable - (2,227)
Proceeds from note receivable 11,720 800
----------- --------
Net cash used in investing activities (111,118) (41,860)
----------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal proceeds (payments) under borrowing
arrangements 47,993 (77,245)
Make whole interest payment - convertible notes (16,255) -
Purchase of treasury stock, at cost (12,811) (627)
Exercise of stock options 11,553 15,298
----------- --------
Total cash provided by (used in) financing
activities 30,480 (62,574)
----------- --------
Effect of exchange rate changes on cash and
equivalents (81) (231)
----------- --------
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS 1,936 (44,831)
----------- --------
CASH AND EQUIVALENTS, beginning of period $23,946 $68,777
----------- --------
CASH AND EQUIVALENTS, end of period $25,882 $23,946
=========== ========
PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS, UNAUDITED)
Three Twelve Three Twelve
Months Months Months Months
Ended Ended Ended Ended
December 31, 2004 December 31, 2003
------------------ -----------------
Normalized Operating Income
Operating Income as reported $19,235 $71,394 $13,430 $37,199
Add back restructuring charges - - 1,309 10,947
-------- -------- -------- --------
Normalized operating income $19,235 $71,394 $14,739 $48,146
Normalized Income from continuing
operations
Income from continuing operations
for purposes of computing
diluted income per share 17,117 $42,071 $7,978 $27,886
Elimination of one time tax
adjustments - (3,086) - (9,026)
Elimination of restructuring
charges (tax effected at 40%) - - 524 4,379
Elimination of gain on prepayment
of note receivable (tax effected
at 38.4%) (5,248) (5,248) - -
Elimination of gain on Cable &
Wireless (tax effected at 38.9%) - (260) - -
Debt conversion costs (tax
effected at 38.9%) - 10,403 - -
-------- -------- -------- --------
Normalized income from continuing
operations $11,869 $43,880 $8,502 $23,239
-------- -------- -------- --------
Normalized Diluted EPS from
continuing operations
From continuing operations $0.24 $0.58 $0.11 $0.45
Elimination of one time tax
adjustments - (0.04) - (0.14)
Elimination of restructuring
charges (tax effected at 40%) - - 0.01 0.07
Elimination of gain on prepayment
of note receivable (tax effected
at 38.4%) (0.07) (0.07) - -
Elimination of gain on Cable &
Wireless (tax effected at 38.9%) - (0.00) - -
Debt conversion costs (tax
effected at 38.9%) - 0.14 - -
-------- -------- -------- --------
Normalized diluted EPS from
continuing operations $0.17 $0.61 $0.12 $0.38
December 31,
2004 2003
-------- --------
Net Debt
Current maturities of long-term
debt and capital lease
obligations $37 $15,000
Long-term debt and capital lease
obligations 68,147 5,000
Convertible subordinated notes - 85,000
-------- --------
Total debt 68,184 105,000
Cash and equivalents 25,882 23,946
-------- --------
Total cash 25,882 23,946
-------- --------
Net debt $42,302 $81,054
-------- --------
Normalized operating income, normalized income from continuing
operations, normalized diluted EPS from continuing operations and net
debt 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. Management believes that net debt
provides useful information regarding the level of our indebtedness by
reflecting cash and cash equivalents that would be used to repay debt.
These non-GAAP measures are not a substitute for GAAP measures of
financial performance and should not be construed as an inference that
our future results will be unaffected by unusual or non-recurring
items.
CONTACT: Premiere Global Services, Inc., Atlanta
Investor Calls
Sean O'Brien, 404-262-8462