EXHIBIT 99.1
Premiere Global Reports Fourth Quarter and 2006 Results
$127.1M in Revenues, $32.3M in Cash Flows Provided by Operating
Activities from Continuing Operations, $0.17 Pro Forma Diluted EPS
from Continuing Operations(a) in Q4
ATLANTA--(BUSINESS WIRE)--Feb. 22, 2007--Premiere Global Services,
Inc. (NYSE: PGI), a global provider of on-demand business
communication solutions, today announced results for the fourth
quarter and year ended December 31, 2006.
Revenues
Revenues in the fourth quarter of 2006 increased 8.4% to $127.1
million compared to $117.2 million in the fourth quarter of 2005.
Excluding revenue from legacy broadcast fax in both periods, aggregate
revenues from the Company's six core solution sets increased 16.0%.(a)
Revenue from Conferencing solutions grew 23.3% to $75.5 million in
the fourth quarter of 2006 compared to $61.2 million in the comparable
prior year quarter. Revenue from legacy broadcast fax services totaled
$20.2 million in the fourth quarter of 2006, a decline of $4.9 million
as compared to $25.1 million in the fourth quarter of 2005. Legacy
broadcast fax represented 15.9% of consolidated revenues in the fourth
quarter of 2006, as compared to 21.4% of consolidated revenues in the
comparable prior year quarter.
GAAP Earnings
In the fourth quarter of 2006 in accordance with GAAP, operating
income totaled $6.4 million, income from continuing operations totaled
$5.1 million and diluted EPS from continuing operations totaled $0.08,
compared to $12.5 million, $12.5 million and $0.17, respectively, in
the fourth quarter of 2005. These results include the following items
on a pre-tax basis: $4.4 million of restructuring costs, a $0.1
million asset impairment, proxy-related costs of $0.1 million, $0.6
million in net legal settlements and related expenses, $2.5 million of
equity-based compensation and $3.5 million of amortization.
Pro Forma Earnings
In the fourth quarter of 2006, excluding restructuring costs,
asset impairments, proxy-related costs, net legal settlements and
related expenses, the elimination of certain income tax adjustments,
equity based compensation and amortization charges, pro forma diluted
EPS from continuing operations totaled $0.17.(a)
2006 Accomplishments
The Company believes it made measurable progress against its
primary objectives in 2006. Specifically, during the year PGI:
-- Consolidated management of its former Conferencing &
Collaboration and Data Communications business units under its
One Company theme;
-- Aligned the Company's operations under a newly appointed
President, Ted Schrafft, who reports directly to the CEO;
-- Refined its market strategy to focus on six core solution sets
- Conferencing, Desktop Fax, Document Delivery, Accounts
Receivable Management, Notifications and Reminders and
eMarketing;
-- Launched micro-sites for online customer self-service,
provisioning, support and account management, with nearly
6,000 enterprise customers and nearly 13,000 active users
today;
-- Began development of a new universal Web portal to bring all
of PGI's capabilities online;
-- Proactively managed a $25.2 million revenue loss from its
legacy broadcast fax business;
-- Grew Conferencing solutions revenue 11.2% year-over-year,
despite a $17.3 million decline in revenue from its largest
Conferencing customer;
-- Expanded its credit facility to $300 million to augment its
access to capital;
-- Repurchased nearly 3.9 million shares, or greater than 5% of
its total shares outstanding, in the open market; and
-- Secured Board authorization for a new share repurchase plan
for up to 7 million shares, or approximately 10% of total
shares outstanding.
"2006 was a milestone year for PGI, as we largely completed our
evolution to One Company - a process that we began more than two years
ago," said Boland T. Jones, Founder, Chairman and CEO of Premiere
Global Services, Inc. "Today, as a unified Company, we can more fully
deliver on the promise of an on-demand Communications Operating System
for enterprise customers around the world."
2006 Results
Revenues for the year ended December 31, 2006 were $496.5 million,
compared to $497.5 million in the year ended December 31, 2005. In
2006 in accordance with GAAP, operating income totaled $46.4 million,
income from continuing operations totaled $25.5 million and diluted
EPS from continuing operations totaled $0.37, versus $75.3 million,
$48.7 million and $0.67, respectively, in 2005. In 2006, excluding
restructuring costs, asset impairments, proxy-related costs, net legal
settlements, the elimination of certain income tax adjustments, equity
based compensation and amortization charges, pro forma diluted EPS
from continuing operations totaled $0.68.(a)
Change in Segment Reporting
Beginning in the fourth quarter of 2006, the Company has realigned
its reporting segments to be consistent with the way it is now
managing its operations on a geographic regional basis, with
reportable segments in North America, Europe and Asia Pacific. The
Company will no longer report results under its former Conferencing &
Collaboration and Data Communications segments, consistent with the
completion of its One Company initiative.
Financial Outlook
The following statements are based on Premiere Global Services'
current expectations as of February 22, 2007. These statements 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 reaffirms its financial outlook for 2007 as previously
provided in its release dated December 5, 2006, as follows:
Revenues
The Company expects consolidated revenues to increase 5% to 7% in
2007 from 2006 totals.
Earnings
As a result of expected operating efficiencies from the Company's
initiatives to increase automation, to streamline service delivery and
to consolidate its operations, earnings are projected to grow at a
faster rate than revenues in 2007.
Cash Flows and Other
The Company anticipates cash flows provided by operating
activities from continuing operations to grow approximately 20% in
2007 from 2006 totals. Capital expenditures are expected to be in the
range of 6.5% to 7.0% of revenues due to increased investment in
automation initiatives, including the development of PGI's new Web
portal designed to bring the Company's products and services online.
The Company anticipates its effective tax rate to remain in the range
of 34% to 35%.
(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: pro forma operating
income, pro forma income 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 solution 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) 289-0726 (US & Canada) or (913) 981-5545
(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 March 2, 2007, and can be accessed by calling
(888) 203-1112 (US & Canada) or (719) 457-0820 (International). The
confirmation code is 7985514. 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 provider of on-demand
business communication solutions. We develop and market an end-to end
suite of communication technologies-based applications, which we call
the Premiere Global Communications Operating System.
Our applications enable our enterprise customers to automate and
simplify their communication-centric processes. These applications are
grouped into six solution sets: Conferencing, Desktop Fax, Document
Delivery, Accounts Receivable Management, Notifications & Reminders,
and eMarketing.
Today, we deliver our solutions via our global, on-demand
platforms to an established customer base of approximately 60,000
corporate accounts, including nearly 80% of the Fortune 500.
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 Reports on Form 10-Q for the
quarters ended March 31, 2006 and September 30, 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 TWELVE MONTHS ENDED DECEMBER 31, 2006 AND 2005
(IN THOUSANDS, UNAUDITED, EXCEPT SHARE AND PER SHARE DATA)
Three Months Ended Twelve Months Ended
December 31, December 31,
2006 2005 2006 2005
--------- --------- --------- ---------
Revenues $127,061 $117,207 $496,472 $497,473
Operating expenses:
Cost of revenues (exclusive
of depreciation shown
separately below) 53,301 44,331 200,472 180,966
Selling and marketing 34,338 30,846 132,279 128,586
General and administrative 14,594 14,800 58,615 58,514
Research and development 3,284 3,023 12,052 10,824
Depreciation 6,593 6,433 24,567 24,757
Amortization 3,492 3,228 13,018 13,243
Restructuring costs 4,366 (29) 8,385 3,256
Asset impairments 111 - 111 -
Net legal settlements and
related expenses 603 2,048 603 2,048
--------- --------- --------- ---------
Total operating expenses 120,682 104,680 450,102 422,194
--------- --------- --------- ---------
Operating income 6,379 12,527 46,370 75,279
--------- --------- --------- ---------
Other (Expense) Income:
Interest expense (2,692) (1,625) (9,146) (5,552)
Interest income 231 101 536 582
Loss on sale of marketable
securities - - - (116)
Other, net 1,598 (23) 1,401 103
--------- --------- --------- ---------
Total other (expense)
income (863) (1,547) (7,209) (4,983)
--------- --------- --------- ---------
Income from continuing
operations before income
taxes 5,516 10,980 39,161 70,296
Income tax expense (benefit) 389 (1,565) 13,652 21,610
--------- --------- --------- ---------
Income from continuing
operations $ 5,127 $ 12,545 $ 25,509 $ 48,686
========= ========= ========= =========
DISCONTINUED OPERATIONS:
Loss from operations of
Voicecom - - - (1,952)
Income tax benefit - - - (683)
--------- --------- --------- ---------
Loss on discontinued
operations - - - (1,269)
--------- --------- --------- ---------
Net income $ 5,127 $ 12,545 $ 25,509 $ 47,417
========= ========= ========= =========
BASIC AND DILUTED EARNINGS:
Income from continuing
operations $ 5,127 $ 12,545 $ 25,509 $ 48,686
--------- --------- --------- ---------
Net income $ 5,127 $ 12,545 $ 25,509 $ 47,417
--------- --------- --------- ---------
BASIC WEIGHTED AVERAGE SHARES
OUTSTANDING: 67,621 70,241 68,933 70,392
========= ========= ========= =========
Basic earnings per share:
Continuing operations $ 0.08 $ 0.18 $ 0.37 $ 0.69
Discontinued operations $ - $ - $ - $ (0.02)
--------- --------- --------- ---------
Net income $ 0.08 $ 0.18 $ 0.37 $ 0.67
========= ========= ========= =========
DILUTED WEIGHTED AVERAGE
SHARES OUTSTANDING: 68,361 71,948 69,758 72,366
========= ========= ========= =========
Diluted earnings per share:
Continuing operations $ 0.08 $ 0.17 $ 0.37 $ 0.67
Discontinued operations $ - $ - $ - $ (0.01)
--------- --------- --------- ---------
Net income $ 0.08 $ 0.17 $ 0.37 $ 0.66
========= ========= ========= =========
PREMIERE GLOBAL SERVICES, INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2006 AND DECEMBER 31, 2005
(IN THOUSANDS, UNAUDITED, EXCEPT SHARE DATA)
December 31, December 31,
2006 2005
------------ ------------
ASSETS
CURRENT ASSETS
Cash and equivalents $ 18,977 $ 20,508
Accounts receivable (less allowances of
$4,944 and $7,560, respectively) 82,875 79,417
Prepaid expenses and other current assets 7,742 5,209
Deferred income taxes, net 11,972 12,392
------------ ------------
Total current assets 121,566 117,526
PROPERTY AND EQUIPMENT, NET 88,062 75,742
OTHER ASSETS
Goodwill 295,185 257,565
Intangibles, net of amortization 38,357 39,662
Deferred income taxes, net - 837
Other assets 6,145 3,958
------------ ------------
$ 549,315 $ 495,290
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 48,967 $ 37,745
Income taxes payable 878 4,394
Accrued taxes 6,011 6,148
Accrued expenses 28,697 34,439
Current maturities of long-term debt and
capital lease obligations 2,044 799
Accrued restructuring costs 4,800 1,800
------------ ------------
Total current liabilities 91,397 85,325
LONG-TERM LIABILITIES
Long-term debt and capital lease
obligations 136,738 99,675
Other accrued expenses 4,170 6,540
Deferred income taxes, net 719 -
------------ ------------
Total long-term liabilities 141,627 106,215
SHAREHOLDERS' EQUITY
Common stock $0.01 par value; 150,000,000
shares authorized,
70,151,998 and 71,703,933 shares
issued and outstanding at
December 31, 2006 and 2005,
respectively 702 717
Additional paid-in capital 663,232 681,719
Note receivable, shareholder (2,004) (1,896)
Cumulative translation adjustment 2,088 (3,554)
Accumulated deficit (347,727) (373,236)
------------ ------------
Total shareholders' equity 316,291 303,750
------------ ------------
$ 549,315 $ 495,290
============ ============
PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
TWELVE MONTHS ENDED DECEMBER 31, 2006 AND 2005
(IN THOUSANDS, UNAUDITED)
Twelve Months Ended
December 31,
2006 2005
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net
income $ 25,509 $ 47,417
Adjustments to reconcile net income to net
cash provided by operating activities:
Loss on discontinued operations - 1,269
Depreciation 24,567 24,757
Amortization 13,018 13,243
Amortization of deferred financing costs 492 453
Loss on sale of marketable securities,
available for sale - 116
Payments for legal settlements and related
expenses (3,099) 2,048
Deferred income taxes 2,912 8,746
Restructuring costs 8,384 3,256
Payments for restructuring costs (5,395) (3,214)
Equity based compensation 10,370 7,484
Excess tax benefits from share-based payment
arrangements (209) -
Payments for state sales tax (1,365) -
Asset impairment 112 -
Loss (gain) on disposal of assets 278 (45)
Changes in assets and liabilities:
Accounts receivable, net 701 (3,834)
Prepaid expenses and other current assets (2,448) 317
Accounts payable and accrued expenses 320 (9,431)
---------- ----------
Total adjustments 48,638 45,165
---------- ----------
Net cash provided by operating activities
from continuing operations 74,147 92,582
---------- ----------
Payments for discontinued operations (987) (2,025)
---------- ----------
Net cash provided by operating
activities 73,160 90,557
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (31,926) (28,174)
Sale of marketable securities, net of cash
acquired - 755
Purchase of marketable securities - (306)
Business acquisitions, net of cash acquired (49,040) (79,915)
---------- ----------
Net cash used in investing
activities (80,966) (107,640)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments under borrowing
arrangements (165,591) (74,676)
Principal proceeds under borrowing
arrangements 200,270 104,100
Payments received on shareholder note - 3,953
Excess tax benefits from share-based payment
arrangements 209 -
Purchase of treasury stock, at cost (31,691) (26,451)
Exercise of stock options 2,515 8,521
---------- ----------
Net cash provided by financing
activities 5,712 15,447
---------- ----------
Effect of exchange rate changes on cash and
equivalents 563 (3,738)
NET DECREASE IN CASH AND EQUIVALENTS (1,531) (5,374)
---------- ----------
CASH AND EQUIVALENTS, beginning of period $ 20,508 $ 25,882
---------- ----------
CASH AND EQUIVALENTS, end of period $ 18,977 $ 20,508
========== ==========
PREMIERE GLOBAL SERVICES, INC AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS, UNAUDITED, EXCEPT PER SHARE DATA)
Three Months Ended Twelve Months Ended
December 31, December 31,
2006 2005 2006 2005
--------- --------- --------- ---------
Revenues Excluding Legacy
Broadcast Fax Revenue (1)
Revenues, as reported $127,061 $117,207 $496,472 $497,473
Excluding legacy
broadcast fax revenue 20,207 25,085 91,549 116,780
--------- --------- --------- ---------
Revenues, Excluding
Legacy Broadcast
Fax Revenue $106,854 $ 92,122 $404,923 $380,693
--------- --------- --------- ---------
Pro Forma Operating Income (2)
Operating income, as
reported $ 6,379 $ 12,527 $ 46,370 $ 75,279
Restructuring costs 4,366 (29) 8,385 3,256
Net legal settlements
and related fees 603 2,048 603 2,048
Asset impairments 111 - 111 -
Proxy-related costs 80 - 80 -
Equity based
compensation 2,540 2,391 10,370 7,484
Amortization 3,492 3,228 13,018 13,243
--------- --------- --------- ---------
Pro Forma Operating
Income $ 17,571 $ 20,165 $ 78,937 $101,310
--------- --------- --------- ---------
Pro Forma Income from
Continuing Operations (2)
Income from continuing
operations, as
reported $ 5,127 $ 12,545 $ 25,509 $ 48,686
Elimination of certain
tax adjustments (1,247) (4,693) 263 (3,826)
Restructuring costs,
net of taxes 3,083 (18) 5,551 2,022
Net legal settlements
and related fees, net
of taxes 425 1,272 399 1,272
Asset impairment, net
of taxes 79 - 74 -
Proxy-related costs,
net of taxes 56 - 53 -
Equity based
compensation, net of
tax 1,788 1,324 6,865 4,648
Amortization, net of
tax 2,458 2,004 8,618 8,224
--------- --------- --------- ---------
Pro Forma Income
from Continuing
Operations $ 11,769 $ 12,434 $ 47,332 $ 61,026
========= ========= ========= =========
Pro Forma Diluted EPS from
Continuing Operations (2)
Diluted EPS from
continuing operations $ 0.08 $ 0.17 $ 0.37 $ 0.67
Elimination of certain
tax adjustments (0.02) (0.07) 0.00 (0.05)
Restructuring costs,
net of taxes 0.05 (0.00) 0.08 0.03
Net legal settlements
and related fees, net
of taxes 0.00 0.02 0.01 0.02
Asset impairment, net
of taxes 0.00 - 0.00 -
Proxy-related costs,
net of taxes 0.00 - 0.00 -
Equity based
compensation, net of
tax 0.02 0.02 0.10 0.06
Amortization, net of
tax 0.04 0.03 0.12 0.11
--------- --------- --------- ---------
Pro Forma Diluted
EPS from Continuing
Operations $ 0.17 $ 0.17 $ 0.68 $ 0.84
========= ========= ========= =========
Normalized Cash Provided by
Operating Activities from
Continuing Operations (3)
Net cash provided by
operating activities
from continuing
operations $ 32,324 $ 17,930 $ 74,147 $ 92,582
Payments for
restructuring costs 1,861 1,611 5,395 3,214
Payments for legal
settlements and
related expenses 603 - 3,099 -
Payments for state
sales tax 161 - 1,365 -
--------- --------- --------- ---------
Normalized Cash
Provided by
Operating Activities
from Continuing
Operations $ 34,949 $ 19,541 $ 84,006 $ 95,796
--------- --------- --------- ---------
(1) Management has previously announced the decline of revenue
generated by its legacy broadcast fax services. Management has
presented revenues excluding this item because management
believes that events or trends particular to these services may
be deemed to be so significant to obscure patterns and trends
of our core solutions sets in total.
(2) Management believes that pro forma operating income, pro forma
income from continuing operations and pro forma diluted EPS
from continuing operations provide useful information regarding
underlying trends in our continuing operations. Management
expects equity based compensation and amortization expenses to
be recurring costs and presents pro forma diluted EPS from
continuing operations to exclude these items as well as non-
recurring items that are unrelated to our ongoing operations,
including certain tax adjustments, restructuring costs, net
legal settlements and related expenses, asset impairments and
proxy-related costs.
(3) Management believes that normalized cash provided by operating
activities from continuing operations provides useful
information regarding underlying trends in our continuing
operations by excluding payments relating to non-recurring
items that are unrelated to our ongoing operations.
CONTACT: Premiere Global Services, Inc.
Investor Calls
Sean O'Brien
Senior Vice President
Strategic Planning & IR
404-262-8462