EXHIBIT 99.1
Premiere Global Services Reports Third Quarter Revenues of $121M and $0.15
Diluted EPS from Continuing Operations, Excluding Restructuring Charge; Company
Provides 2006Financial Outlook
ATLANTA--(BUSINESS WIRE)--Oct. 25, 2005--Premiere Global Services,
Inc. (NYSE: PGI), a global outsource provider of business process
solutions, today announced results for the third quarter ended
September 30, 2005. Revenues were $120.9 million, up 5.0% from $115.2
million in the third quarter of 2004. Excluding a $2.7 million pre-tax
restructuring charge, normalized operating income totaled $19.8
million, normalized income from continuing operations totaled $11.2
million and normalized diluted EPS from continuing operations totaled
$0.15.(a) Including this pre-tax restructuring charge, operating
income totaled $17.1 million, income from continuing operations
totaled $9.5 million and diluted EPS from continuing operations
totaled $0.13.
In the third quarter of 2004, operating income totaled $18.9
million, income from continuing operations totaled $14.9 million and
diluted EPS from continuing operations totaled $0.21. Normalized
operating income totaled $18.9 million, normalized income from
continuing operations totaled $11.5 million and normalized diluted EPS
from continuing operations was $0.16 in the third quarter of 2004.(a)
Third Quarter Revenue Detail
Conferencing & Collaboration revenue totaled $62.1 million, up
15.4% from $53.8 million in the comparable prior year quarter. As
expected, revenue from the Company's largest customer declined by $7.3
million dollars, totaling $4.7 million versus $12.0 million in the
third quarter of 2004. Excluding revenue contribution from this
customer in both quarters, Conferencing & Collaboration revenue
increased 37.3% in the third quarter of 2005 versus the third quarter
of 2004.(a)
Data Communications revenue totaled $58.9 million, down 4.3% from
$61.5 million in the comparable prior year quarter. Revenue from
legacy broadcast fax services declined $4.2 million dollars, totaling
$28.1 million versus $32.3 million in the third quarter of 2004.
Excluding revenue contribution from legacy broadcast fax services in
both quarters, Data Communications revenue increased 5.3% in the third
quarter of 2005 versus the third quarter of 2004.(a)
Nine Month Results
Revenues totaled $380.3 million for the nine months ended
September 30, 2005, up 14.5% from $332.1 million in the comparable
prior year period. Excluding pre-tax restructuring charges of $3.3
million, normalized operating income totaled $66.0 million, normalized
income from continuing operations totaled $38.1 million and normalized
diluted EPS from continuing operations totaled $0.53.(a) Including
these pre-tax restructuring charges, operating income totaled $62.8
million, income from continuing operations totaled $36.1 million and
diluted EPS from continuing operations totaled $0.50.
In the first nine months of 2004, operating income was $52.2
million, income from continuing operations was $23.6 million and
diluted EPS from continuing operations was $0.35. In the first nine
months of 2004, normalized operating income was $52.2 million,
normalized income from continuing operations was $32.0 million and
normalized diluted EPS from continuing operations was $0.45.(a)
Financial Outlook
The following statements are based on Premiere Global Services'
current expectations as of October 25, 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 projects that revenues and diluted EPS from continuing
operations in 2005 will be within its previous guidance of $494 to
$498 million and $0.66 to $0.67, respectively, excluding pre-tax
restructuring charges of $3.3 million during the year.
Revenues in 2006 are projected to be in the range of $480 million
to $500 million. The Company expects that its core services will
continue to grow in 2006 and beyond. However, anticipated growth in
core services next year will largely be offset by a projected decline
in revenue from the Company's legacy broadcast fax business of
approximately $20 million and a projected decline in revenue from its
largest customer of approximately $20 million during the year.
The Company projects that cash flows from operating activities
will be in the range of $90 to $95 and capital expenditures will total
approximately $26 million in 2006. The Company expects free cash flow
in 2006 will be in the range of $64 to $69 million, or $0.88 to $0.95
per share.(a) Cash taxes paid in 2006 are expected to equal the
Company's effective tax rate of 37% to 38% due the expiration of its
domestic net operating loss carry-forwards.
Excluding equity based compensation and amortization, pro forma
diluted EPS from continuing operations in 2006 is expected to be in
the range of $0.77 to $0.82.(a) GAAP diluted EPS from continuing
operations in 2006 is projected to be in the range of $0.58 to $0.63,
including equity based compensation of approximately $10.7 million,
which includes an estimate for the expensing of stock options as
required under SFAS 123(R).
"I am excited about the momentum in our core services of
Conferencing & Collaboration, Document Management, Notifications
Management and Marketing Automation," said Boland T. Jones, Founder,
Chairman and CEO of Premiere Global Services, Inc. "Our profile in the
market and value to our customers has increased dramatically this year
with the introduction of a number of communication technologies-based
solutions aimed at simplifying business processes.
"Despite significant operational accomplishments, we believe our
stock remains undervalued, which is why we repurchased nearly 800,000
shares of our common stock in the open market during the third
quarter. We plan to continue to use our cash flow and liquidity to
retire additional shares in the future. In addition, our Company has
historically generated significant returns on invested capital, and we
plan to continue to reinvest for growth by further consolidating the
industries in which we compete.
"Looking ahead, we believe our core solutions, coupled with
innovation, will generate solid, consistent organic growth that will
more than overcome the expected revenue decline from our largest
conferencing customer and our legacy broadcast fax business. To that
end, our focus in the year ahead will be to continue to improve our
customer experience by automating more of our service delivery and to
constantly improve the effectiveness of our global selling efforts. We
believe the benefits of our development efforts will be improved
operating efficiencies and that our sales productivity initiatives
will increase revenue growth and lower overall selling and marketing
expenses over time.
"I strongly believe that our Company has the people, platform,
solutions, distribution and operating initiatives in place to
become more valuable to our customers and shareholders."
(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: normalized operating
income, normalized income from continuing operations, normalized
diluted EPS from continuing operations, proforma diluted EPS from
continuing operations and free cash flow. 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. In addition, we present certain business
segment revenue growth statistics that are derived from non-GAAP
financial measures. Please see the table 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) 565-5442 (US & Canada) or (913) 312-1298
(International). The conference call will be simultaneously broadcast
over the Internet via SoundCast(R), a Premiere Global service, and can
be accessed at http://ir.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 November 4, 2005, and can be accessed by
calling (888) 203-1112 (US & Canada) or (719) 457-0820
(International). The confirmation code is 2057724. The Webcast of this
call will be archived on the Company's Website at
http://ir.premiereglobal.com.
About Premiere Global Services, Inc.
Premiere Global Services, Inc. provides business process solutions
that enable enterprise customers to automate and simplify components
of their critical business processes and to communicate more
effectively with their constituents.
We offer data management and delivery solutions and conferencing
and collaboration services on an outsource-basis, hosted on our global
proprietary platforms. Customers apply our communication
technologies-based solutions to a number of business processes, such
as receivables collections, continuing education, alerts and
notifications, investor calls, statement and invoice delivery,
international collaboration, document automation, and other
applications, in order to increase efficiency, to improve productivity
and to raise customer satisfaction levels.
With over 2,230 employees in 19 countries around the world,
Premiere Global Services(SM) has an established customer base of
approximately 60,000 corporate accounts, including a majority of the
Fortune 500. 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: 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 Affecting Future Performance" section of our Annual
Report on Form 10-K for the year ended December 31, 2004. 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 NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(IN THOUSANDS, UNAUDITED, EXCEPT PER SHARE DATA)
Three Months Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
-------- -------- -------- --------
REVENUES $120,949 $115,198 $380,266 $332,105
OPERATING EXPENSES:
Cost of revenues (exclusive
of depreciation shown
separately below) 43,069 40,620 136,459 120,359
Selling and marketing 30,756 31,475 97,005 87,091
General and administrative 14,434 12,677 39,596 36,624
Research and development 2,681 2,723 7,736 8,154
Depreciation 5,400 6,469 18,325 19,302
Amortization 3,565 2,419 10,015 6,232
Restructuring costs 2,745 - 3,285 -
Equity based compensation 1,213 (96) 5,093 2,182
-------- -------- -------- --------
Total operating expenses 103,863 96,287 317,514 279,944
-------- -------- -------- --------
OPERATING INCOME 17,086 18,911 62,752 52,161
-------- -------- -------- --------
OTHER INCOME (EXPENSE):
Interest expense (1,677) (728) (3,926) (3,875)
Interest income 61 136 481 484
Debt conversion costs - - (17,027)
Loss on sale of marketable
securities - - (116) (87)
Other, net 60 998 126 1,827
-------- -------- -------- --------
Total other income (expense) (1,556) 406 (3,435) (18,678)
-------- -------- -------- --------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 15,530 19,317 59,317 33,483
INCOME TAX EXPENSE 6,008 4,427 23,175 9,911
-------- -------- -------- --------
INCOME FROM CONTINUING OPERATIONS $ 9,522 $ 14,890 $ 36,142 $ 23,572
======== ======== ======== ========
DISCONTINUED OPERATIONS:
(Loss) gain from operations of
Voicecom - - (1,952) 1,956
Income tax (benefit) expense - - (683) 761
-------- -------- -------- --------
(Loss) gain on discontinued
operations - - (1,269) 1,195
-------- -------- -------- --------
NET INCOME $ 9,522 $ 14,890 $ 34,873 $ 24,767
======== ======== ======== ========
BASIC EARNINGS PER SHARE:
Income from continuing
operations $ 9,522 $ 14,890 $ 36,142 $ 23,572
-------- -------- -------- --------
Net income $ 9,522 $ 14,890 $ 34,873 $ 24,767
-------- -------- -------- --------
BASIC WEIGHTED AVERAGE SHARES
OUTSTANDING: 70,326 69,709 70,437 62,003
======== ======== ======== ========
Basic earnings per share:
Continuing operations $ 0.14 $ 0.21 $ 0.51 $ 0.38
Discontinued operations $ - $ - $ (0.01)$ 0.02
-------- -------- -------- --------
Net income $ 0.14 $ 0.21 $ 0.50 $ 0.40
======== ======== ======== ========
DILUTED EARNINGS PER SHARE:
Income from continuing operations
for purposes of computing
diluted net income per share $ 9,522 $ 14,890 $ 36,142 $ 24,954
-------- -------- -------- --------
Net income for purposes of
computing diluted net income per
share $ 9,522 $ 14,890 $ 34,873 $ 26,149
-------- -------- -------- --------
DILUTED WEIGHTED AVERAGE SHARES
OUTSTANDING: 72,417 71,996 72,457 71,975
======== ======== ======== ========
Diluted earnings per share:
Continuing operations $ 0.13 $ 0.21 $ 0.50 $ 0.35
Discontinued operations $ - $ - $ (0.02)$ 0.01
-------- -------- -------- --------
Net income $ 0.13 $ 0.21 $ 0.48 $ 0.36
======== ======== ======== ========
PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2005 AND DECEMBER 31, 2004
(IN THOUSANDS, EXCEPT SHARE DATA)
September 30, December 31,
2005 2004
----------- ------------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and equivalents $ 26,264 $ 25,882
Marketable securities, available for sale - 576
Accounts receivable (less allowances of
$7,940 and $5,706, respectively) 83,935 72,055
Prepaid expenses and other 6,764 5,148
Deferred income taxes, net 6,989 17,706
---------- ----------
Total current assets 123,952 121,367
PROPERTY AND EQUIPMENT, NET 77,242 74,050
OTHER ASSETS
Goodwill 255,179 192,147
Intangibles, net 43,373 40,590
Deferred income taxes, net 3,461 3,461
Other assets 4,103 3,861
---------- ----------
$ 507,310 $ 435,476
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 38,745 $ 37,337
Income taxes payable 11,874 8,968
Accrued taxes 6,350 6,700
Accrued expenses 37,010 40,192
Current maturities of long-term debt and
capital lease obligations 770 37
Accrued restructuring costs 3,268 1,071
---------- ----------
Total current liabilities 98,017 94,305
LONG-TERM LIABILITIES
Long-term debt and capital lease obligations 113,822 68,147
Other accrued expenses 6,316 6,094
---------- ----------
Total long-term liabilities 120,138 74,241
SHAREHOLDERS' EQUITY
Common stock $0.01 par value; 150,000,000
shares authorized, 71,625,863 and 71,301,577
shares issued and outstanding at September
30, 2005 and December 31, 2004, respectively 716 713
Unrealized loss on marketable securities - 6
Additional paid-in capital 691,815 694,284
Unearned restricted stock compensation (13,765) (4,187)
Note receivable, shareholder (1,870) (5,662)
Cumulative translation adjustment (1,961) 2,429
Accumulated deficit (385,780) (420,653)
---------- ----------
Total shareholders' equity 289,155 266,930
---------- ----------
$ 507,310 $ 435,476
========== ==========
PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(IN THOUSANDS, UNAUDITED)
2005 2004
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 34,873 $ 24,767
Adjustments to reconcile net income to net
cash provided by operating activities:
Loss (gain) on discontinued operation 1,269 (1,195)
Debt conversion costs - 17,027
Depreciation 18,325 19,302
Amortization 10,015 6,232
Amortization of deferred financing costs 338 559
Loss on sale of marketable securities,
available for sale 116 87
Deferred income taxes 8,712 5,110
Gain on disposal of assets (45) 118
Gain on note receivable and other
liabilities - (1,223)
Restructuring costs, net 1,686 (3,697)
Equity based compensation 5,093 2,182
Changes in assets and liabilities:
Accounts receivable, net (8,445) (6,038)
Prepaid expenses and other current
assets (1,230) (723)
Accounts payable and accrued
expenses 3,689 (5,434)
--------- ---------
Total adjustments 39,523 32,307
--------- ---------
Total cash provided by operating
activities from continuing operations 74,396 57,074
--------- ---------
Payments for discontinued
operations (1,771) (1,697)
--------- ---------
Total cash provided by
operating activities 72,625 55,377
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (22,544) (19,487)
Business acquisitions (78,097) (62,386)
Sale of marketable securities 755 667
Purchase of marketable securities (306) (291)
Proceeds from note receivable - 2,400
--------- ---------
Net cash used in investing
activities (100,192) (79,097)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal proceeds under borrowing
arrangements 96,300 39,600
Principal payments under borrowing
arrangements (52,757) (5,000)
Payments received on shareholder note 3,953
Make whole interest payment -
convertible notes - (16,255)
Purchase of treasury stock, at cost (24,383) (12,811)
Exercise of stock options 7,888 10,015
--------- ---------
Total cash provided by
financing activities 31,001 15,549
--------- ---------
Effect of exchange rate changes on cash and
equivalents (3,052) (308)
--------- ---------
NET INCREASE (DECREASE) IN CASH AND
EQUIVALENTS 382 (8,479)
--------- ---------
CASH AND EQUIVALENTS, beginning of period $ 25,882 $ 23,946
--------- ---------
CASH AND EQUIVALENTS, end of period $ 26,264 $ 15,467
========= =========
PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS EXCEPT SHARE DATA, UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
Normalized operating income (1)
Operating income, as reported $ 17,086 $ 18,911 $62,752 $52,161
Restructuring costs 2,745 - 3,285 -
-------- -------- ------- -------
Normalized operating
income $ 19,831 $ 18,911 $66,037 $52,161
-------- -------- ------- -------
Normalized income from continuing
operations (1)
Income from continuing
operations for purposes of
computing diluted income per
share $ 9,522 $ 14,890 $36,142 $24,954
Elimination of one-time tax
adjustments - (3,086) - (3,086)
Restructuring costs 1,682 2,001 -
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 $ 11,204 $ 11,544 $38,143 $32,011
-------- -------- ------- -------
Normalized diluted EPS from
continuing operations (1)
From continuing operations $ 0.13 $ 0.21 $ 0.50 $ 0.35
Elimination of one-time tax
adjustments - (0.04) - (0.04)
Restructuring costs 0.02 - 0.03 -
Elimination of discounted
early retirement of an
acquisition payable (tax
effected at 38.9%) - (0.00) - (0.00)
Debt conversion costs (tax
effected at 38.9%) - - - 0.14
-------- -------- ------- -------
Normalized diluted EPS
from continuing
operations $ 0.15 $ 0.16 $ 0.53 $ 0.45
Segment revenues excluding certain
items (2)
Revenues, as reported
Conferencing &
Collaboration $ 62,092 $ 53,788
Data Communications 58,857 61,478
Eliminations - (68)
-------- --------
$120,949 $115,198
-------- --------
Conferencing & Collaboration $ 62,092 $ 53,788
Excluding largest customer
revenue 4,750 12,017
-------- --------
Conferencing &
Collaboration excluding
largest customer revenue $ 57,342 $ 41,771
-------- --------
Data Communications $ 58,857 $ 61,478
Excluding legacy broadcast fax
revenue 28,073 32,250
-------- --------
Data Communications
excluding legacy
broadcast fax revenue $ 30,784 $ 29,228
-------- --------
September 30,
2005
--------
Net debt (3)
Current maturities of long-
term debt and capital lease
obligations $ 770
Long-term debt and capital
lease obligations 113,822
--------
Total debt $114,592
Cash and equivalents $ 26,264
--------
Net debt $ 88,328
--------
(1)Management believes that normalized operating income, normalized
income from continuing operations and normalized diluted EPS from
continuing operations provide useful information regarding
underlying trends in our continuing operations by excluding non-
recurring items that are unrelated to our ongoing operations.
(2)The Company has previously announced Conferencing &
Collaboration's largest customer's intention to insource most of
its automated conferencing needs, as well as the acceleration in
the decline of revenues generated by Data Communications legacy
broadcast fax business in North America. The Company has
presented business segment revenue excluding these items because
management believes that these events or trends particular
to each business segment may be deemed to be so significant to
obscure patterns and trends of our core business in total.
(3)Management believes that net debt provides useful information
regarding the level of the Company's indebtedness by reflecting
cash and cash equivalents that would be used to repay debt.
PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES IN FINANCIAL OUTLOOK
(amounts are estimates) (1)
(IN MILLIONS EXCEPT SHARE DATA, UNAUDITED)
Year Ended
December 31,
2006
----------------
Projected free cash flow (2)
Projected net cash provided by operating
activities $90 - $95
Projected capital expenditures $26
----------------
Projected free cash flow $64 - $69
Projected free cash flow per share $0.88 - $0.95
Projected pro forma diluted EPS from continuing
operations (3)
Projected diluted EPS from continuing operations $0.58 - $0.63
Excluding non-cash equity based compensation $0.09
Excluding amortization $0.10
----------------
Projected pro forma diluted EPS from continuing
operations $0.77 - $0.82
(1)The Company has made a number of assumptions in preparing our
projections, including assumptions as to the components of these
financial metrics. The following reconciliations of projected
non-GAAP financial measures include forward-looking information
with respect to the information identified as a projection.
These EPS projections assume a projected weighted average diluted
share count of approximately 72.7 million shares.
(2)Management believes free cash flow is one factor in determining
our liquidity, showing the net cash generated by the Company's
operating activities less capital expenditures required to
operate our business.
(3)The Company presents pro forma diluted EPS from continuing
operations to exclude significant non-cash charges for equity
based compensation and amortization expense in order to help
investors better understand the operating performance of our
business.
CONTACT: Premiere Global Services, Atlanta
Investor Calls
Sean O'Brien, 404-262-8462