PGi Reports Fourth Quarter and Fiscal Year 2012 Results: Q4 Organic Revenues Grew Over 6%* to $125.8M, Non-GAAP Diluted EPS from Continuing Operations $0.18* Company Sees Solid Organic Growth and Higher Profitability in 2013 PR Newswire ATLANTA, Feb. 13, 2013 ATLANTA, Feb. 13, 2013 /PRNewswire/ --Premiere Global Services, Inc. (NYSE: PGI), a global leader in virtual meetings for over 20 years, today announced results for the fourth quarter and fiscal year ended December 31, 2012. In the fourth quarter of 2012, net revenues increased nearly 6% to $125.8 million, compared to $118.7 million in the fourth quarter of 2011. Diluted EPS from continuing operations was $0.20 in the fourth quarter of 2012, compared to $0.07 in the fourth quarter of 2011. Non-GAAP diluted EPS from continuing operations was $0.18* in the fourth quarter of 2012, compared to $0.18* in the fourth quarter of 2011. "We are pleased with our solid financial performance in 2012, as we continued to grow across all regions and product lines and to generate operating leverage in our business," said Boland T. Jones, PGi founder, chairman and CEO. "Last year, we also made meaningful strategic progress in transitioning PGi toward a software as a service model, with increasing momentum of our next-generation virtual meeting solutions, iMeet^® and GlobalMeet^®, in the global market." "This year, we plan to continue to enhance our suite of PGi software products that will open new market opportunities and further position PGi as a global leader in business collaboration. We are optimistic in our outlook, and we see 2013 as another year of solid organic growth and higher profitability for PGi." 2012 Financial Results In 2012, net revenues increased 6.6% to $505.3 million, compared to $473.8 million in 2011. Diluted EPS from continuing operations was $0.58 in 2012, compared to diluted EPS from continuing operations of $0.34 in 2011. Non-GAAP diluted EPS from continuing operations increased 17.7% to $0.73* in 2012, compared to non-GAAP diluted EPS from continuing operations of $0.62* in 2011. 2012 Accomplishments oReported our highest annual organic revenue growth in four years, with organic revenue increasing 7.5%* as compared to 2011; oReported non-GAAP diluted EPS from continuing operations growth of nearly 18%* as compared to 2011; oGrew total meetings hosted by nearly 30% as compared to 2011; oMore than doubled the revenue run-rate from iMeet and GlobalMeet, exiting 2012 with an annual revenue run-rate of nearly $23 million from these solutions; oEarned multiple awards and accolades for our product innovation, including: oiMeet awarded Silver for Best New Product by Edison Awards; oPGi awarded the Silver Stevie® Award for Most Innovative Tech Company of the Year by the American Business Awards^SM; oPGi awarded the Bronze Stevie® Award for Most Innovative Company of the Year in Canada and the U.S.A. by the International Business Awards^SM; and oPGi named one of the InformationWeek® Top 250 Innovators of the Year. oAnnounced a multi-year, multi-million dollar strategic alliance with Deutsche Telekom, naming the integrated telecommunications company as the exclusive reseller of iMeet in Germany; oAnnounced a multi-year strategic alliance with eircom, Ireland's leading provider of fixed and mobile telecommunications, who will offer PGi's entire suite of conferencing solutions, including iMeet and GlobalMeet, to its business customers; oEstablished a new open market share repurchase program for up to 5.0 million shares of our common stock; and oRepurchased nearly 3.2 million shares of common stock in the open market under our prior share repurchase plan. Financial Outlook The following statements are based on PGi's current expectations. These statements contain forward-looking statements and company estimates, and actual results may differ materially. PGi assumes no duty to update any forward-looking statements made in this press release. Based on current business trends and current foreign currency exchange rates, PGi anticipates net revenues from continuing operations in 2013 will be in the range of $525-$535 million and non-GAAP diluted EPS from continuing operations will be in the range of $0.81-$0.85*. PGi will host a conference call today at 5:00 p.m., Eastern Time, 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: (888) 278-8475 (U.S. and Canada) or (913) 312-0390 (International). The conference call will simultaneously be webcast. Please visit www.pgi.com for webcast details and conference call replay information, as well as the webcast archive and the text of the earnings release, including the financial and statistical information to be presented during the call. * Non-GAAP Financial Measures To supplement the company's consolidated financial statements presented in accordance with GAAP, we have included the following non-GAAP measures of financial performance: non-GAAP operating income, non-GAAP net income from continuing operations, non-GAAP diluted net income per share (EPS) from continuing operations and organic growth. The company has also included these non-GAAP measures, as well as net revenues and segment net revenues, on a constant currency basis. 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. 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. About Premiere Global Services, Inc. │PGi PGi has been a global leader in virtual meetings for over 20 years. Our cloud-based solutions deliver multi-point, real-time virtual collaboration using video, voice and file sharing technologies. PGi solutions are available via desktops, tablets or mobile devices, helping businesses worldwide be more productive, mobile and green. PGi has a global presence in 25 countries and an established base of over 40,000 enterprise customers, including 75% of the Fortune 100^™. In the last five years, PGi has hosted nearly one billion people from 137 countries in over 200 million meetings. For more information, visit PGi at http://www.pgi.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, Inc.'s forward-looking statements, including, but not limited to, the following factors: competitive pressures, including pricing pressures; technological changes and the development of alternatives to our services; market acceptance of new cloud-based, virtual meeting services, including our iMeet® and GlobalMeet® services; our ability to attract new customers and to retain and further penetrate our existing customers; risks associated with challenging global economic conditions; price increases from our telecommunications service providers; service interruptions and network downtime; technological obsolescence and our ability to upgrade our equipment or increase our network capacity; concerns regarding the security of transactions; future write-downs of goodwill or other intangible assets; greater than anticipated tax liabilities; restructuring and cost reduction initiatives and the market reaction thereto; our level of indebtedness; risks associated with acquisitions and divestitures; the impact of the sale of our PGiSend business; our ability to protect our intellectual property rights, including possible adverse results of litigation or infringement claims; regulatory or legislative changes, including further government regulations applicable to traditional telecommunications service providers and data privacy; risks associated with international operations and market expansion, including fluctuations in foreign currency exchange rates; and other factors described from time to time in our press releases, reports and other filings with the Securities and Exchange Commission, including but not limited to the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2011. All forward-looking statements attributable to us or a person acting on our behalf are expressly qualified in their entirety by this cautionary statement. Investor Calls Sean O'Brien Executive Vice President Strategy & Communications (404) 262-8462 PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Three Months Ended Twelve Months Ended December 31, December 31, 2012 2011 2012 2011 (Unaudited) (Unaudited) Net revenues $ 125,771 $ $ 505,281 $ 118,735 473,834 Operating expenses: Cost of revenues (exclusive of depreciation and amortization shown separately below) 54,110 49,227 215,154 195,822 Selling and marketing 31,875 31,492 130,631 134,018 General and administrative (exclusive of expenses shown separately 16,342 14,767 63,412 57,176 below) Research and development 3,741 2,784 14,349 11,521 Excise and sales tax 203 - 321 352 expense Depreciation 8,275 7,659 32,482 30,831 Amortization 742 1,304 3,981 6,365 Restructuring costs (91) 809 612 847 Asset impairments 138 340 879 456 Net legal settlements 183 375 2,034 490 and related expenses Total operating 115,518 108,757 463,855 437,878 expenses Operating income 10,253 9,978 41,426 35,956 Other (expense) income: Interest expense (1,763) (3,573) (7,167) (9,954) Interest income 30 12 49 46 Other, net (277) (339) (808) (574) Total other (2,010) (3,900) (7,926) (10,482) expense Income from continuing operations before income 8,243 6,078 33,500 25,474 taxes Income tax (benefit) expense (1,173) 2,797 5,445 8,586 Net income from continuing 9,416 3,281 28,055 16,888 operations (Loss) income from discontinued operations, net (131) (2,194) (465) 4,546 of taxes Net income $ $ $ 27,590 $ 9,285 1,087 21,434 BASIC WEIGHTED-AVERAGE 46,546 48,540 47,596 49,619 SHARES OUTSTANDING Basic net income (loss) per share (1) Continuing operations $ $ $ 0.59 $ 0.20 0.07 0.34 Discontinued operations - (0.05) (0.01) 0.09 Net income per share $ $ $ 0.58 $ 0.20 0.02 0.43 DILUTED WEIGHTED-AVERAGE 47,103 48,970 48,092 49,971 SHARES OUTSTANDING Diluted net income (loss) per share (1) Continuing operations $ $ $ 0.58 $ 0.20 0.07 0.34 Discontinued operations - (0.04) (0.01) 0.09 Net income per share $ $ $ 0.57 $ 0.20 0.02 0.43 (1) Column totals may not sum due to the effect of rounding on EPS. PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data) December 31, December 31, 2012 2011 (Unaudited) ASSETS CURRENT ASSETS Cash and equivalents $ 20,976 $ 32,033 Accounts receivable (less allowances of 75,149 72,518 $834 and $613, respectively) Prepaid expenses and other current assets 18,245 13,906 Income taxes receivable 1,272 1,739 Deferred income taxes, net 2,566 1,090 Total current assets 118,208 121,286 PROPERTY AND EQUIPMENT, NET 104,613 103,449 OTHER ASSETS Goodwill 297,773 295,690 Intangibles, net of amortization 7,384 10,906 Deferred income taxes, net 5,848 3,474 Other assets 7,942 8,016 TOTAL ASSETS $ 541,768 $ 542,821 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 48,166 $ 42,589 Income taxes payable 1,116 962 Accrued taxes, other than income taxes 4,333 3,611 Accrued expenses 32,093 28,999 Current maturities of long-term debt and 3,137 3,845 capital lease obligations Accrued restructuring costs 1,040 2,287 Deferred income taxes, net 15 386 Total current liabilities 89,900 82,679 LONG-TERM LIABILITIES Long-term debt and capital lease 179,832 195,963 obligations Accrued restructuring costs 117 1,410 Accrued expenses 19,661 17,249 Deferred income taxes, net 54 1,783 Total long-term liabilities 199,664 216,405 SHAREHOLDERS' EQUITY Common stock, $0.01 par value; 150,000,000 shares authorized, 47,745,592 and 50,144,703 shares issued and 477 501 outstanding, respectively Additional paid-in capital 453,621 475,013 Accumulated other comprehensive gain 13,102 10,809 Accumulated deficit (214,996) (242,586) Total shareholders' equity 252,204 243,737 TOTAL LIABILITIES AND SHAREHOLDERS' $ 541,768 $ EQUITY 542,821 PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Twelve Months Ended December 31, 2012 2011 (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 27,590 $ 21,434 Loss (income) from discontinued operations, 465 (4,546) net of taxes Net income from continuing operations 28,055 16,888 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 32,482 30,831 Amortization 3,981 6,365 Amortization of debt issuance costs 592 926 Write-off of unamortized debt issuance costs - 743 Net legal settlements and related expenses 2,034 399 Payments for legal settlements and related (1,512) (246) expenses Deferred income taxes (5,333) 2,388 Restructuring costs 612 847 Payments for restructuring costs (3,213) (6,779) Asset impairments 879 456 Equity-based compensation 8,074 6,757 Excess tax benefits from share-based payment (367) - arrangements Provision for doubtful accounts 1,089 626 Changes in assets and liabilities, net of effect of acquisitions and dispositions: Accounts receivable, net (3,581) (8,937) Other assets and liabilities (2,404) 3,900 Accounts payable and accrued expenses 9,133 3,565 Net cash provided by operating activities from continuing 70,521 58,729 operations Net cash used in operating activities from discontinued (672) (792) operations Net cash provided by operating 69,849 57,937 activities CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (32,338) (30,100) Other investing activities (1,273) (1,709) Business dispositions - 1,902 Net cash used in investing activities from continuing (33,611) (29,907) operations Net cash used in investing activities from discontinued (60) (276) operations Net cash used in investing (33,671) (30,183) activities CASH FLOWS FROM FINANCING ACTIVITIES Principal payments under borrowing (94,655) (70,793) arrangements Proceeds from borrowing arrangements 75,929 85,971 Payments of debt issuance costs (23) (1,469) Excess tax benefits of share-based payment 367 - arrangements Purchase of treasury stock, at cost (29,915) (23,852) Exercise of stock options 932 614 Net cash used in financing activities from continuing (47,365) (9,529) operations Net cash used in financing activities from discontinued - (140) operations Net cash used in financing (47,365) (9,669) activities Effect of exchange rate changes on cash and 130 (1,153) equivalents NET (DECREASE) INCREASE IN CASH AND (11,057) 16,932 EQUIVALENTS CASH AND EQUIVALENTS, beginning of period 32,033 15,101 CASH AND EQUIVALENTS, end of period $ 20,976 $ 32,033 PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (in thousands, except per share data) Three Months Ended Twelve Months Ended December 31, December 31, 2012 2011 2012 2011 (Unaudited) (Unaudited) Non-GAAP Operating Income (1) Operating income, as $ $ $ $ reported 10,253 9,978 41,426 35,956 Restructuring costs (91) 809 612 847 Excise and sales tax 203 - 321 352 expense Asset impairments 138 340 879 456 Net legal settlements and 183 375 2,034 490 related expenses Equity-based compensation 1,961 1,548 8,074 6,757 Amortization 742 1,304 3,981 6,365 Non-GAAP operating $ $ $ $ income 13,389 14,354 57,327 51,223 Non-GAAP Net Income from Continuing Operations (1) Net income from continuing $ $ $ $ operations, as reported 9,416 3,281 28,055 16,888 Elimination of non-recurring tax (3,376) 1,217 (4,354) 1,672 adjustments Restructuring costs (67) 599 433 617 Excise and sales tax 149 - 227 256 expense Excise and sales tax - - - 117 interest Asset impairments 101 252 622 332 Net legal settlements and 134 278 1,439 357 related expenses Equity-based compensation 1,437 1,146 5,712 4,923 Amortization 544 965 2,817 4,638 Debt refinance costs and other non-recurring - 978 - 962 interest Non-GAAP net income $ $ $ $ from continuing 8,338 8,716 34,951 30,762 operations Non-GAAP Diluted EPS from Continuing Operations (1) (2) Diluted net income per $ $ $ $ share from continuing 0.20 0.07 0.58 0.34 operations, as reported Elimination of non-recurring tax (0.07) 0.02 (0.09) 0.03 adjustments Restructuring costs - 0.01 0.01 0.01 Excise and sales tax - - - 0.01 expense Excise and sales tax - - - - interest Asset impairments - 0.01 0.01 0.01 Net legal settlements and - 0.01 0.03 0.01 related expenses Equity-based compensation 0.03 0.02 0.12 0.10 Amortization 0.01 0.02 0.06 0.09 Debt refinance costs and other non-recurring - 0.02 - 0.02 interest Non-GAAP diluted EPS $ $ $ $ from continuing 0.18 0.18 0.73 0.62 operations Management believes that presenting non-GAAP operating income, non-GAAP net income from continuing operations and non-GAAP diluted EPSfrom continuing operations provide useful information regarding underlying trends in the company's continuing operations. Management expects equity-based compensation and amortization expenses to be recurring costs and presents non-GAAP net income from continuing operations and non-GAAP diluted EPS from continuing operations to exclude these non-cash items as (1) well as non-recurring items that are unrelated to the company's ongoing operations, including non-recurring tax adjustments, restructuring costs, excise and sales tax expense, excise and sales tax company's ongoing operations, including non-recurring tax adjustments, restructuring costs, excise and sales tax expense, excise and sales tax interest, asset impairments, net legal settlements and related expenses and debt refinance costs and other non-recurring interest. These non-cash and non-recurring items are presented net of taxes for non-GAAP net income from continuing operations and non-GAAP diluted EPS from continuing operations. (2) Column totals may not sum due to the effect of rounding on EPS. PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES CONSTANT CURRENCY ADJUSTMENTS AND ORGANIC GROWTH Prior Year Quarter Constant Currency Adjustments (3) Impact of Q4 - 12 fluctuations (Constant in foreign Q4 - 12 currency) currency (Actual) exchange rates (Unaudited, in thousands, except per share data) Net Revenues $ $ (217) $ 125,988 125,771 North $ $ America Net 82,477 $ 102 82,579 Revenue Europe Net $ $ (302) $ Revenue 27,730 27,428 Asia Pacific $ $ (17) $ Net Revenue 15,781 15,764 Non-GAAP $ $ Operating 13,379 $ 10 13,389 Income Non-GAAP Net Income from $ $ 91 $ Continuing 8,247 8,338 Operations Non-GAAP Diluted EPS $ $ from $ - 0.18 Continuing 0.18 Operations Management also presents the non-GAAP financial measures (3) described under note 1 above, as well as net revenues and segment net revenue, on a constant currency basis compared to the same quarter in the previous year to exclude the effects of foreign currency exchange rates, which are not completely within management's control, in order to facilitate period-to-period comparison of the company's financial results without the distortion of these fluctuations. These constant currency adjustments convert current quarter results using prior period (Q4 - 11) average exchange rates. Sequential Quarter Constant Currency Adjustments (4) Impact of Q4 - 12 fluctuations (Constant in foreign Q4 - 12 currency) currency (Actual) exchange rates (Unaudited, in thousands) Net Revenues $ $ $ 125,313 458 125,771 Management also presents net revenues on a constant currency (4) basis compared to the prior quarter to exclude the effects of foreign currency exchange rates, which are not completely within management's control, in order to facilitate period-to-period comparison of the company's financial results without the distortion of these fluctuations. These constant currency adjustments convert current quarter results using prior period (Q3 - 12) average exchange rates. Organic Growth (5) Impact of Organic Organic net December fluctuations net December 31, in foreign revenue 31, revenue 2011 currency growth 2012 exchange rates growth rate (Unaudited, in thousands, except percentages) Net Revenues, $ $ $ $ Three Months 118,735 7,253 125,771 6.1% Ended (217) Net Revenues, $ $ $ $ 7.5% Twelve Months 473,834 (4,082) 35,529 505,281 Ended Management defines "organic growth" as revenue changes excluding the (5) impact of foreign currency exchange rate fluctuations and acquisitions made during the periods presented and presents this non-GAAP financial measure to exclude the effect of these items that are not completely within management's control, such as foreign currency exchange rate fluctuations, or do not reflect the company's ongoing core operations or underlying growth, such as acquisitions. The Company did not make any acquisitions during the period presented. (Logo: http://photos.prnewswire.com/prnh/20120628/MM33070LOGO ) SOURCE Premiere Global Services, Inc.
PGi Reports Fourth Quarter and Fiscal Year 2012 Results: Q4 Organic Revenues Grew Over 6%* to $125.8M, Non-GAAP Diluted EPS from