PGi Reports Fourth Quarter and Fiscal Year 2012 Results: Q4 Organic Revenues Grew Over 6%* to $125.8M, Non-GAAP Diluted EPS from
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
o Reported our highest annual organic revenue growth in four years, with
organic revenue increasing 7.5%* as compared to 2011;
o Reported non-GAAP diluted EPS from continuing operations growth of nearly
18%* as compared to 2011;
o Grew total meetings hosted by nearly 30% as compared to 2011;
o More 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;
o Earned multiple awards and accolades for our product innovation,
including:
o iMeet awarded Silver for Best New Product by Edison Awards;
o PGi awarded the Silver Stevie® Award for Most Innovative Tech Company
of the Year by the American Business Awards^SM;
o PGi 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
o PGi named one of the InformationWeek® Top 250 Innovators of the Year.
o Announced a multi-year, multi-million dollar strategic alliance with
Deutsche Telekom, naming the integrated telecommunications company as the
exclusive reseller of iMeet in Germany;
o Announced 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;
o Established a new open market share repurchase program for up to 5.0
million shares of our common stock; and
o Repurchased 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 EPS from
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.
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