EXHIBIT 99.1
Premiere Global Services Reports Second Quarter Results;
$125.6M in Revenues;
$0.13 Normalized Diluted EPS from Continuing Operations(a);
$0.18 Pro Forma Diluted EPS from Continuing Operations(a)
ATLANTA--(BUSINESS WIRE)--July 26, 2006--Premiere Global Services,
Inc. (NYSE: PGI), a global outsource provider of business process
solutions, today announced results for the second quarter of 2006.
Revenues
Revenues in the second quarter of 2006 were $125.6 million
compared to $132.1 million in the second quarter of 2005. Excluding
revenue contributions from the Company's largest conferencing customer
and its legacy broadcast fax business in both periods, revenues
increased 7.4%.(a)
Conferencing & Collaboration revenue totaled $68.6 million
compared to $66.6 million in the comparable prior year quarter.
Excluding revenue contribution from the Company's largest customer in
both quarters, Conferencing & Collaboration revenue increased 16.1% in
the second quarter of 2006 versus the second quarter of 2005.(a)
Data Communications revenue totaled $57.0 million compared to
$65.5 million in the comparable prior year quarter. Revenue from
legacy broadcast fax services declined $6.1 million dollars, totaling
$25.3 million versus $31.4 million in the second quarter of 2005.
Normalized Earnings
Excluding restructuring costs, normalized operating income totaled
$15.9 million, and excluding restructuring costs and the elimination
of a one-time state income tax adjustment, normalized income from
continuing operations totaled $8.8 million and normalized diluted EPS
from continuing operations was $0.13 in the second quarter of 2006,
versus $23.4 million, $13.6 million and $0.19, respectively, in the
second quarter of 2005.(a)
Pro Forma Earnings
In the second quarter of 2006, excluding restructuring costs, the
elimination of a one-time state income tax adjustment, equity based
compensation and amortization charges, pro forma diluted EPS from
continuing operations totaled $0.18.(a)
GAAP Earnings
In the second quarter of 2006 in accordance with GAAP, operating
income totaled $13.8 million, income from continuing operations
totaled $6.0 million and diluted EPS from continuing operations
totaled $0.09, compared to $23.3 million, $13.5 million and $0.19,
respectively, in the second quarter of 2005.
Second Quarter 2006 Accomplishments
-- Generated record daily and quarterly conferencing volumes
-- Grew revenue from DocuManager IP fax services by greater than
36% from the second quarter of 2005
-- Grew revenue from Marketing Automation services by greater
than 120% year-over-year
-- Repurchased nearly 2.4 million shares of common stock in the
open market
-- Secured new Board-authorized share repurchase plan for up to 7
million shares, approximately 10% of total shares outstanding
-- Expanded bank revolving line of credit limit to $300 million
from $180 million
"We are pleased with our revenue performance during the second
quarter and believe we are well on our way to delivering the kind of
steady, quarterly revenue growth we are committed to in 2007 and
beyond," said Boland T. Jones, Founder, Chairman and CEO of Premiere
Global Services, Inc. "We are continuing to evolve Premiere Global
Services to a uniform, vertically-operated Company with a sole focus
on innovating communication technologies to help our global enterprise
customers simplify and improve their business processes through the
exchange of critical daily information and ideas. We believe that our
unified corporate structure will help us better penetrate our existing
customer base, while giving us a clear competitive edge in acquiring
new accounts. It also establishes the collaborative framework
necessary to take our Company from good to great."
Six Month Results
Revenues for the six months ended June 30, 2006 were $247.3
million, down 4.6% compared to $259.3 million in the six months ended
June 30, 2005. Excluding restructuring costs, normalized operating
income totaled $30.9 million, and excluding restructuring costs and
the elimination of a one-time state income tax adjustment, normalized
income from continuing operations totaled $17.1 million and normalized
diluted EPS from continuing operations was $0.24 in the first half of
2006, versus $46.2 million, $26.9 million and $0.37, respectively, in
the first half of 2005.(a) In the first half of 2006, excluding
restructuring costs, the elimination of a one-time state income tax
adjustment, equity based compensation and amortization charges, pro
forma diluted EPS from continuing operations totaled $0.34.(a) In the
first six months of 2006 in accordance with GAAP, operating income
totaled $27.8 million, income from continuing operations totaled $13.7
million and diluted EPS from continuing operations totaled $0.19,
versus $45.7 million, $26.6 million and $0.37, respectively, in the
first six months of 2005.
Financial Outlook
The following statements and projected non-GAAP financial table
are based on Premiere Global Services' current expectations as of July
26, 2006. These statements and non-GAAP financial table 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 confirms its financial outlook for 2006 revenues and
projected normalized and pro forma diluted EPS from continuing
operations as previously provided in its first quarter earnings
release dated April 27, 2006. See the reconciliation of projected
non-GAAP financial measures as set forth below:
PREMIERE GLOBAL SERVICES, INC AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES IN FINANCIAL OUTLOOK
(amounts are estimates) (1)
(UNAUDITED)
Year Ended
December 31, 2006 (1)
--------------------------------
(in millions, except per share
data)
Projected normalized diluted EPS from continuing
operations (2)(a)
Projected diluted EPS from continuing operations $0.45 - $0.53
Excluding one-time state income tax adjustment $0.02
Excluding restructuring costs $0.03
---------------
Projected normalized diluted EPS from continuing
operations $0.50 - $0.58
Projected pro forma diluted EPS from continuing
operations (3)(a)
Projected diluted EPS from continuing operations $0.45 - $0.53
Excluding one-time state income tax adjustment $0.02
Excluding restructuring costs $0.03
Excluding non-cash equity based compensation $0.09
Excluding amortization $0.11
---------------
Projected pro forma diluted EPS from continuing
operations $0.70 - $0.78
Projected normalized cash provided by operating activities from
continuing operations (2)(a)
Projected cash provided by operating activities from
continuing operations $78.0 - $85.0
Payments for restructuring costs $2.5
Payments for legal settlements and related expenses $2.5
---------------
Projected normalized cash provided by operating
activities from continuing operations $83.0 - $90.0
(1) Amounts presented are estimates, and the Company has made a
number of assumptions in preparing our projections, including
assumptions as to the components of these financial metrics.
The reconciliations of projected non-GAAP financial measures
include forward-looking information with respect to the
information identified as a projection. The EPS projections
assume a projected weighed average diluted share count of
approximately 70.5 million shares.
(2) Management believes that normalized operating income,
normalized income from continuing operations, normalized
diluted EPS from continuing operations and normalized cash
provided by operating activities 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.
(3) The Company expects equity based compensation expense to be a
recurring cost and presents pro forma diluted EPS from
continuing operations to exclude this item as well as
restructuring costs and amortization expense to eliminate
these significant non-cash charges to earnings to help
investors better understand the operating performance of our
business.
(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 in this press release:
normalized operating income, normalized income from continuing
operations, normalized diluted EPS from continuing operations, pro
forma diluted EPS from continuing operations and normalized cash
provided by operating activities from continuing operations.
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 consolidated and business segment revenue
growth statistics that are derived from non-GAAP financial measures.
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) 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, 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
through midnight Eastern August 4, 2006, and can be accessed by
calling (888) 203-1112 (US & Canada) or (719) 457-0820
(International). The confirmation code is 6938514. 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. is a global outsource provider of
business process solutions that enable enterprise customers to
automate and simplify their critical business processes and to
communicate more effectively with their constituents.
We innovate communication technologies and deliver solutions in
four core business practices: Conferencing Solutions, Document
Solutions, Marketing Automation Solutions and Alerts & Notifications
Solutions. We deliver these solutions via our global, on-demand
platforms to an established customer base of approximately 60,000
corporate accounts, including a majority of the Fortune 500. Customers
apply our solutions in order to increase efficiency, to improve
productivity and to raise customer satisfaction levels.
With global presence in 19 countries, Premiere Global Services'
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" section of our Annual Report on Form 10-K for the year
ended December 31, 2005 and our Quarterly Report on Form 10-Q for the
quarter ended March 31, 2006. 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 SIX MONTHS ENDED JUNE 30, 2006 AND 2005
Three Months Ended Six Months Ended
------------------- -------------------
June 30, June 30,
2006 2005 2006 2005
--------- --------- --------- ---------
REVENUES $125,566 $132,053 $247,293 $259,316
OPERATING EXPENSES:
Cost of revenues (exclusive of
depreciation shown separately
below) 49,199 47,637 97,603 93,496
Selling and marketing 33,823 34,010 66,558 66,743
General and administrative 14,852 14,798 28,579 28,438
Research and development 2,844 2,492 5,651 5,059
Depreciation 5,839 6,373 11,766 12,925
Amortization 3,150 3,364 6,246 6,450
Restructuring costs 2,037 126 3,090 541
--------- --------- --------- ---------
Total operating expenses 111,744 108,800 219,493 213,652
OPERATING INCOME 13,822 23,253 27,800 45,664
--------- --------- --------- ---------
OTHER (EXPENSE) INCOME:
Interest expense (2,059) (1,267) (3,902) (2,249)
Interest income 70 108 231 420
Loss on sale of marketable
securities - - - (116)
Other, net 260 (27) 27 66
--------- --------- --------- ---------
Total other (expense) income (1,729) (1,186) (3,644) (1,879)
--------- --------- --------- ---------
INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES 12,093 22,067 24,156 43,785
INCOME TAX EXPENSE 6,087 8,568 10,492 17,167
--------- --------- --------- ---------
INCOME FROM CONTINUING
OPERATIONS $6,006 $13,499 $13,664 $26,618
========= ========= ========= =========
DISCONTINUED OPERATIONS:
(Loss) gain from operations of
Voicecom - (1,952) - (1,952)
Income tax (benefit) expense - (683) - (683)
--------- --------- --------- ---------
(Loss) gain on discontinued
operations - (1,269) - (1,269)
--------- --------- --------- ---------
NET INCOME $6,006 $12,230 $13,664 $25,349
========= ========= ========= =========
BASIC EARNINGS PER SHARE:
Income from continuing
operations $6,006 $13,499 $13,664 $26,618
========= ========= ========= =========
Net income $6,006 $12,230 $13,664 $25,349
========= ========= ========= =========
BASIC WEIGHTED-AVERAGE SHARES
OUTSTANDING: 69,765 70,532 70,114 70,494
========= ========= ========= =========
Basic earnings per share:
Continuing operations $0.09 $0.19 $0.19 $0.38
========= ========= ========= =========
Discontinued operations $- $(0.02) $- $(0.02)
--------- --------- --------- ---------
Net income $0.09 $0.17 $0.19 $0.36
========= ========= ========= =========
DILUTED EARNINGS PER SHARE:
Income from continuing
operations $6,006 $13,499 $13,664 $26,618
--------- --------- --------- ---------
Net income $6,006 $12,230 $13,664 $25,349
--------- --------- --------- ---------
DILUTED WEIGHTED-AVERAGE SHARES
OUTSTANDING: 70,465 72,683 70,859 72,352
========= ========= ========= =========
Diluted earnings per share:
Continuing operations $0.09 $0.19 $0.19 $0.37
========= ========= ========= =========
Discontinued operations $- $(0.02) $- $(0.02)
--------- --------- --------- ---------
Net income $0.09 $0.17 $0.19 $0.35
========= ========= ========= =========
PREMIERE GLOBAL SERVICES, INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2006 AND DECEMBER 31, 2005
(IN THOUSANDS, EXCEPT SHARE DATA)
June 30, Dec. 31,
2006 2005
----------- ---------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and equivalents $21,673 $20,508
Accounts receivable (less allowances of
$5,250 and $7,560, respectively) 87,864 79,417
Prepaid expenses and other current assets 7,901 5,209
Deferred income taxes, net 12,624 12,392
----------- ---------
Total current assets 130,062 117,526
PROPERTY AND EQUIPMENT, NET 82,202 75,742
OTHER ASSETS
Goodwill 272,246 257,565
Intangibles, net of amortization 37,080 39,662
Deferred income taxes, net - 837
Other assets 4,607 3,958
----------- ---------
$526,197 $495,290
=========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $42,522 $37,745
Income taxes payable 4,513 4,394
Accrued taxes 7,837 6,148
Accrued expenses 29,860 34,439
Current maturities of long-term debt and capital
lease obligations 1,087 799
Accrued restructuring costs 3,419 1,800
----------- ---------
Total current liabilities 89,238 85,325
LONG-TERM LIABILITIES
Long-term debt and capital lease obligations 122,925 99,675
Accrued expenses 5,127 6,540
Deferred income taxes, net 191 -
----------- ---------
Total long-term liabilities 128,243 106,215
SHAREHOLDERS' EQUITY
Common stock $0.01 par value; 150,000,000 shares authorized,
71,009,618 and 71,703,933 shares issued and outstanding at
June 30, 2006 and December 31, 2005, respectively 710 717
Additional paid-in capital 690,036 694,304
Unearned restricted stock compensation (20,915) (12,585)
Notes receivable, shareholder (1,950) (1,896)
Cumulative translation adjustment 407 (3,554)
Accumulated deficit (359,572) (373,236)
----------- ---------
Total shareholders' equity 308,716 303,750
----------- ---------
$526,197 $495,290
=========== =========
PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2006 AND 2005
(IN THOUSANDS, UNAUDITED)
Six Months Ended
June 30,
2006 2005
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income 13,664 25,349
Adjustments to reconcile net income to net cash provided by operating
activities:
Loss on discontinued operation - 1,269
Depreciation 11,766 12,925
Amortization 6,246 6,450
Amortization of deferred financing costs 240 224
Loss on sale of marketable securities, available for
sale - 116
Payments for legal settlements and related expenses (1,496) -
Deferred income taxes 65 4,854
Restructuring costs 3,090 541
Payments for restructuring costs (1,821) (599)
Equity based compensation 5,103 3,880
Loss (gain) on disposal of assets 256 (45)
Changes in assets and liabilities:
Accounts receivable, net (6,778) (10,092)
Prepaid expenses and other current assets (954) (1,917)
Accounts payable and accrued expenses 1,855 10,993
-------- --------
Total adjustments 17,572 28,599
-------- --------
Total cash provided by operating activities from
continuing operations 31,236 53,948
-------- --------
Payments for discontinued operations (489) (541)
-------- --------
Net cash provided by operating activities 30,747 53,407
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (18,826) (14,264)
Sale of marketable securities - 755
Purchase of marketable securities - (306)
Business acquisitions, net of cash acquired (15,660) (53,379)
-------- --------
Net cash used in investing activities (34,486) (67,194)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments under borrowing arrangements (37,976) (28,378)
Principal proceeds under borrowing arrangements 60,100 50,700
Payments received on shareholder note - 3,953
Purchase of treasury stock, at cost (19,020) (16,010)
Exercise of stock options 1,309 6,439
-------- --------
Net cash provided by financing activities 4,413 16,704
-------- --------
Effect of exchange rate changes on cash and
equivalents 491 (3,070)
-------- --------
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS 1,165 (153)
-------- --------
CASH AND EQUIVALENTS, beginning of period $20,508 $25,882
-------- --------
CASH AND EQUIVALENTS, end of period $21,673 $25,729
======== ========
PREMIERE GLOBAL SERVICES, INC AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS, UNAUDITED, EXCEPT SHARE DATA)
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
--------- --------- --------- ---------
Segment Revenues Excluding
Certain Items (1)
Revenues, as reported
Conferencing & Collaboration $68,595 $66,567 $135,369 $128,577
Data Communications 56,971 65,518 111,923 130,739
--------- --------- --------- ---------
$125,566 $132,085 $247,292 $259,316
Conferencing & Collaboration $68,595 $66,567 $135,369 $128,577
Excluding largest customer
revenue 2,771 9,894 21,346 21,346
--------- --------- --------- ---------
Conferencing & Collaboration
excluding largest customer
revenue $65,824 $56,673 $114,023 $107,231
--------- --------- --------- ---------
Data Communications $56,971 $65,518 $111,923 $130,739
Excluding legacy broadcast fax
revenue 25,260 31,401 49,933 63,622
--------- --------- --------- ---------
Data Communications excluding
legacy broadcast fax revenue $31,711 $34,117 $61,990 $67,117
--------- --------- --------- ---------
Revenues, as reported $125,566 $132,085 $247,292 $259,316
Excluding Conferencing &
Collaboration largest customer
revenue 2,771 9,894 21,346 21,346
Excluding Data Communications
legacy broadcast fax revenue 25,260 31,401 49,933 63,622
--------- --------- --------- ---------
Revenues excluding certain
items $97,535 $90,790 $176,013 $174,348
--------- --------- --------- ---------
Normalized Operating Income (2)
Operating income, as reported $13,822 $23,253 $27,800 $45,664
Restructuring costs 2,037 126 3,090 541
--------- --------- --------- ---------
Normalized operating income $15,859 $23,379 $30,890 $46,205
--------- --------- --------- ---------
Normalized Income from
Continuing Operations (2)
Income from continuing
operations $6,006 $13,499 $13,664 $26,618
Elimination of one-time state
income tax adjustment 1,510 - 1,510 -
Restructuring costs, net of taxes 1,316 78 1,975 326
--------- --------- --------- ---------
Normalized income from
continuing operations $8,832 $13,577 $17,149 $26,944
--------- --------- --------- ---------
Normalized Diluted EPS from
Continuing Operations (2)
Diluted EPS from continuing
operations $0.09 $0.19 $0.19 $0.37
Elimination of one-time state
income tax adjustment 0.02 - 0.02 -
Restructuring costs, net of taxes 0.02 0.00 0.03 0.00
--------- --------- --------- ---------
Normalized diluted EPS from
continuing operations $0.13 $0.19 $0.24 $0.37
========= ========= ========= =========
Pro forma Income from
Continuing Operations (3)
Income from continuing
operations $6,006 $13,499 $13,664 $26,618
Elimination of one-time state
income tax adjustment 1,510 - 1,510 -
Restructuring costs, net of
taxes 1,316 78 1,975 326
Equity based compensation, net
of tax 1,768 1,173 3,169 2,375
Amortization, net of tax 1,956 2,059 3,879 3,947
--------- --------- --------- ---------
Pro forma Income from
Continuing Operations $12,556 $16,809 $24,197 $33,266
========= ========= ========= =========
Pro forma Diluted EPS from
Continuing Operations (3)
Diluted EPS from continuing
operations $0.09 $0.19 $0.19 $0.37
Elimination of one-time state
income tax adjustment 0.02 - 0.02 -
Restructuring costs, net of taxes 0.02 0.00 0.03 0.00
Equity based compensation, net
of tax 0.02 0.02 0.04 0.03
Amortization, net of tax 0.03 0.02 0.06 0.06
--------- --------- --------- ---------
Pro forma Diluted EPS from
Continuing Operations $0.18 $0.23 $0.34 $0.46
========= ========= ========= =========
Normalized cash provided by operating activities
from continuing operations (2)
Total cash provided by
operating activities from
continuing operations $14,393 $32,902 $31,236 $53,948
Payments for restructuring
costs 1,101 322 1,821 599
Payments for legal settlements
and related expenses 124 - 1,496 -
--------- --------- --------- ---------
Normalized cash provided by
operating activities from
continuing operations $15,618 $33,224 $34,553 $54,547
--------- --------- --------- ---------
(1) 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 revenue generated by Data
Communications legacy broadcast fax business. Management has
presented consolidated and 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.
(2) Management believes that normalized operating income,
normalized income from continuing operations, normalized
diluted EPS from continuing operations and normalized cash
provided by operating activities from continuing operations
provide useful information regarding underlying trends in our
continuing operations.
(3) Management expects equity based compensation expense to be a
recurring cost and presents pro forma diluted EPS from
continuing operations to exclude this item as well as one-time
state income tax adjustment, restructuring costs and
amortization expense to eliminate these significant non-cash
charges to earnings to help investors better understand the
operating performance of our business.
CONTACT: Premiere Global Services, Inc., Atlanta
Investor Calls
Sean O'Brien, 404-262-8462