EX-99.1 2 a4825250ex991.txt EXHIBIT 99.1 Exhibit 99.1 Premiere Global Services Reports 2004 Results: Revenues $449.4M up 18%; Normalized Operating Income $71.4M up 48%; Cash Flow from Operating Activities $82.7M up 38% ATLANTA--(BUSINESS WIRE)--Feb. 17, 2005-- $117.3M in Revenues and $0.17 Normalized Diluted EPS from Continuing Operations in Q4 Premiere Global Services, Inc. (NYSE: PGI), a provider of innovative ASP-based communication technologies for business process automation, today announced results for the fourth quarter and fiscal year ended December 31, 2004. Revenues were $117.3 million for the quarter, a 16.0% increase from $101.1 million in the fourth quarter of 2003. Operating income grew 30.4% in the fourth quarter of 2004, totaling $19.2 million versus normalized operating income(a) of $14.7 million ($13.4 million GAAP operating income) in the comparable prior year period. Excluding a gain on the prepayment of a note receivable, normalized income from continuing operations(a) was $11.9 million and normalized diluted EPS from continuing operations(a) was $0.17 in the fourth quarter of 2004. Including this item, GAAP income from continuing operations was $17.1 million and GAAP diluted EPS from continuing operations was $0.24 in the fourth quarter. Revenues in 2004 totaled $449.4 million, a 17.9% increase from $381.3 million in 2003. Operating income grew 48.3% in 2004, totaling $71.4 million versus normalized operating income(a) of $48.1 million ($37.2 million GAAP operating income) in the prior year. Normalized income from continuing operations(a) was $43.9 million and normalized diluted EPS from continuing operations(a) was $0.61 in 2004. Including these items, GAAP income from continuing operations was $40.7 million and GAAP diluted EPS from continuing operations was $0.58 in 2004. "I am proud to report another great year for our Company," said Boland T. Jones, Founder, Chairman and CEO of Premiere Global Services, Inc. "We continue to grow our roster of enterprise customers by enabling them to automate components of their critical business processes through our communications platform." 2004 Sales Accomplishments -- Expanded by more than 13,000 the number of enterprise accounts using our communication technologies platform -- Increased Conferencing & Collaboration (Premiere Conferencing) revenue by 28.6% to $202.8 million -- Grew Data Communications (Xpedite) revenue by 10.3% to $246.9 million -- Expanded International Conferencing & Collaboration revenue by 42.5% -- Grew Web-based collaboration revenue by 100.8% -- Increased transactional and new media data communications revenue by 25% -- Expanded revenue from automated voice applications by 83.3% 2004 Financial Accomplishments -- Generated $82.7 million of cash flow from operating activities, up 38.1% from 2003 -- Decreased cost of revenues (excluding depreciation) by 240 basis points through aggressive network cost management -- Repurchased 1.5 million shares of common stock in the open market -- Reduced net debt(a) by 47.8% to $42.3 million -- Doubled shareholders equity to $266.7 million -- Expanded bank line of credit borrowing limit to $120 million (recently increased to $180 million) 2004 Strategic Accomplishments -- Opened access to our communication technologies platform via standard protocols -- Successfully completed accretive tuck-in acquisitions -- Realized significant return on investment in EasyLink debt -- Transitioned to single brand as Premiere Global Services to better reflect business focus -- Transferred common stock listing to the New York Stock Exchange(R) Financial Outlook The following statements are based on Premiere Global's current expectations as of February 17, 2005. These statements are forward-looking statements and actual results may differ materially. The Company assumes no duty to update any forward-looking statements made in this press release. A discussion concerning forward-looking statements is included at the end of this press release and in the Company's filings with the Securities and Exchange Commission. The Company estimates revenues in the first quarter of 2005 will be in the range of $121 to $122 million and that diluted EPS will be approximately $0.17. The Company reiterates its 2005 financial outlook of revenues in the range of $490 to $500 million and diluted EPS in the range of $0.67 to $0.70, not including the impact of the new accounting standard requiring the expensing of stock options that becomes effective July 1, 2005. Included in this outlook is the expectation that the Company's largest customer will account for 2.0% to 3.0% of total revenues in 2005. As previously announced, Premiere Global Services signed a definitive agreement to acquire the conferencing services division of Citizens Communications Company (NYSE: CZN). The Company anticipates the acquisition will be accretive to revenues and diluted EPS in 2005. The acquisition is expected to close late in the first quarter of 2005, and the Company anticipates raising its financial outlook at that time. (a) Indicates a non-GAAP financial measure. See table attached for reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures. Conference Call The Company will hold a conference call at 5:00 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) 289-0569 (US & Canada) or (913) 981-5542 (International). The conference call will be simultaneously broadcast over the Internet via SoundCast(R), a Premiere Global service, and can be found at http://www.premiereglobal.com. You may also follow this link for details on the Internet replay and for the text of the earnings release, including the financial and statistical information to be presented in the call. A replay will be available following the call at 8:00 p.m. Eastern, through midnight Eastern February 25 and may be accessed by calling (888) 203-1112 (US & Canada) or (719) 457-0820 (International). The confirmation code is 4898889. The Webcast of this call will be archived on the Company's Website at http://www.premiereglobal.com. About Premiere Global Services, Inc. Premiere Global Services, Inc., formerly Ptek Holdings, Inc., innovates and markets communication technologies on our proprietary platform that automate and enhance our enterprise customers' critical business processes. With approximately 2,200 employees in 18 countries around the world, Premiere Global Services(SM) has an established customer base of greater than 45,000 corporate accounts, including a majority of the Fortune 500. Customers use our services for a variety of business processes, including investor calls, receivables collections, Web-based continuing education, confirmations of securities trades and travel reservations, electronic statements and invoices, local-access international conferencing, document capture and automation, e-mail campaign marketing, mobile access and printing of documents, automated prescription renewals and other applications. Our corporate headquarters is located at 3399 Peachtree Road NE, Suite 700, Atlanta, GA 30326. Additional information can be found at www.premiereglobal.com. Statements made in this press release, other than those concerning historical information, should be considered forward-looking and subject to various risks and uncertainties. Such forward-looking statements are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and are made based on management's current expectations or beliefs as well as assumptions made by, and information currently available to, management. A variety of factors could cause actual results to differ materially from those anticipated in Premiere Global Services' forward-looking statements, including, but not limited to, the following factors: technological change; the development of alternatives to our services; our ability to manage our growth; integration of acquired companies; possible adverse effects on our financial condition if we are unable to retain IBM as a customer at the levels currently forecasted; possible adverse results of pending or future litigation or infringement claims; service interruptions; competitive pressures, including pricing pressures; general domestic and international economic, business or political conditions; legislative or regulatory changes; increased financial leverage; our dependence on our subsidiaries for cash flow; and other factors described from time to time in our press releases, reports and other filings with the SEC, including but not limited the "Risk Factors Affecting Future Performance" section of our Annual Report on Form 10-K for the year ended December 31, 2003. 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, 2004 AND 2003 (IN THOUSANDS, EXCEPT PER SHARE DATA) Three Months Ended Twelve Months Ended ------------------------- ---------------------- December 31, December 31, 2004 2003 2004 2003 ------------ ------------ ------------ --------- (Unaudited) (Unaudited) (Unaudited) REVENUES $117,266 $101,108 $449,371 $381,280 OPERATING EXPENSES: Cost of revenues (exclusive of depreciation shown separately below) 40,558 38,835 160,690 145,549 Selling and marketing 30,619 25,335 117,711 101,300 General and administrative 13,230 11,586 50,082 44,474 Research and development 2,816 2,009 10,970 8,569 Depreciation 7,070 6,322 26,372 23,575 Amortization 2,660 1,698 8,891 6,746 Restructuring costs - 1,309 - 10,947 Equity based compensation 1,078 584 3,261 2,921 ------------ ------------ ------------ --------- Total operating expenses 98,031 87,678 377,977 344,081 ------------ ------------ ------------ --------- OPERATING INCOME 19,235 13,430 71,394 37,199 ------------ ------------ ------------ --------- OTHER INCOME (EXPENSE): Interest expense (810) (2,252) (4,687) (9,603) Interest income 149 282 633 874 Debt conversion costs - - (17,027) - Gain (loss) on sale of marketable securities 71 971 (16) 1,600 Gain on prepayment of note receivable 8,520 - 8,520 - Gain on repurchase of bonds - (376) - 41 Other, net 606 (37) 2,433 81 ------------ ------------ ------------ --------- Total other income (expense) 8,536 (1,412) (10,144) (7,007) ------------ ------------ ------------ --------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 27,771 12,018 61,250 30,192 INCOME TAX EXPENSE 10,654 4,688 20,565 3,279 ------------ ------------ ------------ --------- INCOME FROM CONTINUING OPERATIONS $17,117 $7,330 $40,685 $26,913 ============ ============ ============ ========= DISCONTINUED OPERATIONS: Gain (loss) from operations from Voicecom - - 1,956 (1,597) Income tax expense (benefit) - - 761 (621) ------------ ------------ ------------ --------- Gain (loss) on discontinued operations - - 1,195 (976) ------------ ------------ ------------ --------- NET INCOME $17,117 $7,330 $41,880 $25,937 ============ ============ ============ ========= BASIC EARNINGS (LOSS) PER SHARE: Income from continuing operations $17,117 $7,330 $40,685 $26,913 ------------ ------------ ------------ --------- Net Income $17,117 $7,330 $41,880 $25,937 ------------ ------------ ------------ --------- BASIC WEIGHTED AVERAGE SHARES OUTSTANDING: 69,226 56,181 63,818 53,767 ============ ============ ============ ========= Basic earnings (loss) per share: Continuing operations $0.25 $0.13 $0.64 $0.50 Discontinued operations $0.00 $0.00 $0.02 $(0.02) ------------ ------------ ------------ --------- Net Income $0.25 $0.13 $0.66 $0.48 ============ ============ ============ ========= DILUTED EARNINGS (LOSS) PER SHARE: Income from continuing operations for purposes of computing diluted net income per share $17,117 $7,978 $42,071 $27,886 ------------ ------------ ------------ --------- Net Income for purposes of computing diluted net income per share $17,117 $7,978 $43,266 $26,910 ------------ ------------ ------------ --------- DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING: 71,564 72,437 72,012 61,301 ============ ============ ============ ========= Diluted earnings (loss) per share: Continuing operations $0.24 $0.11 $0.58 $0.45 Discontinued operations $0.00 $0.00 $0.02 $(0.01) ------------ ------------ ------------ --------- Net Income $0.24 $0.11 $0.60 $0.44 ============ ============ ============ ========= PREMIERE GLOBAL SERVICES, INC AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2004 AND 2003 (IN THOUSANDS, EXCEPT SHARE DATA) December 31, December 31, 2004 2003 ------------- ------------ (Unaudited) ASSETS CURRENT ASSETS Cash and equivalents $25,882 $23,946 Marketable securities, available for sale 576 575 Accounts receivable (less allowances of $5,706 and $4,451, respectively) 72,055 57,760 Prepaid expenses and other 5,148 6,348 Deferred income taxes, net 17,706 20,938 ------------- ------------ Total current assets 121,367 109,567 PROPERTY AND EQUIPMENT, NET 74,050 63,563 OTHER ASSETS Goodwill 192,147 123,066 Intangibles, net 40,590 24,553 Deferred income taxes, net 3,461 10,521 Notes receivable - employees - 1,808 Other assets 3,861 6,219 ------------- ------------ $435,476 $339,297 ============= ============ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $37,337 $36,621 Accrued taxes 15,668 10,984 Accrued expenses 40,456 33,891 Current maturities of long term debt and capital lease obligations 37 15,000 Accrued restructuring costs 1,071 4,445 ------------- ------------ Total current liabilities 94,569 100,941 LONG-TERM LIABILITIES Convertible subordinated notes - 85,000 Long-term debt and capital lease obligations 68,147 5,000 Other accrued expenses 6,094 14,638 ------------- ------------ Total long term liabilities 74,241 104,638 SHAREHOLDERS' EQUITY Common stock $0.01 par value; 150,000,000 shares authorized, 70,740,243 and 57,289,895 shares issued and outstanding at December 31, 2004 and 2003, respectively 708 572 Unrealized loss on marketable securities (6) (110) Additional paid-in capital 689,851 602,452 Unearned restricted stock compensation - (813) Note receivable, shareholder (5,662) (5,343) Cumulative translation adjustment 2,427 (507) Accumulated deficit (420,652) (462,533) ------------- ------------ Total shareholders' equity 266,666 133,718 ------------- ------------ $435,476 $339,297 ============= ============ PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS TWELVE MONTHS ENDED DECEMBER 31, 2004 AND 2003 (IN THOUSANDS) Twelve Months Ended December 31, 2004 2003 ----------- -------- (unaudited) CASH FLOWS FROM OPERATING ACTIVITIES Net Income 41,880 25,937 Adjustments to reconcile net income to net cash provided by operating activities: (Gain) loss on discontinued operation (1,195) 976 Debt conversion costs 17,027 - Depreciation 26,372 23,575 Amortization 8,891 6,746 Amortization of deferred financing costs 659 - Loss (gain) on sale of marketable securities, available for sale 16 (1,600) Gain on repurchase of bonds - (41) Deferred income taxes 10,087 (1,638) Loss on disposal of assets 118 - Gain on note receivable and other liabilities (10,968) - Restructuring costs, net (3,974) 6,368 Payments for discontinued operations (2,081) (1,001) Equity based compensation 3,261 2,921 Changes in assets and liabilities: - - Accounts receivable, net (1,761) (1,875) Prepaid expenses and other current assets 2,898 2,868 Accounts payable and accrued expenses (8,575) (3,402) ----------- -------- Total adjustments 40,775 33,897 ----------- -------- Total cash provided by operating activities 82,655 59,834 ----------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (24,783) (18,455) Business acquisitions (98,227) (23,340) Increase in restricted cash for acquisitions - - Sale of marketable securities 422 2,942 Purchase of marketable securities (250) (1,580) Purchase of notes receivable - (2,227) Proceeds from note receivable 11,720 800 ----------- -------- Net cash used in investing activities (111,118) (41,860) ----------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Principal proceeds (payments) under borrowing arrangements 47,993 (77,245) Make whole interest payment - convertible notes (16,255) - Purchase of treasury stock, at cost (12,811) (627) Exercise of stock options 11,553 15,298 ----------- -------- Total cash provided by (used in) financing activities 30,480 (62,574) ----------- -------- Effect of exchange rate changes on cash and equivalents (81) (231) ----------- -------- NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS 1,936 (44,831) ----------- -------- CASH AND EQUIVALENTS, beginning of period $23,946 $68,777 ----------- -------- CASH AND EQUIVALENTS, end of period $25,882 $23,946 =========== ======== PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (IN THOUSANDS, UNAUDITED) Three Twelve Three Twelve Months Months Months Months Ended Ended Ended Ended December 31, 2004 December 31, 2003 ------------------ ----------------- Normalized Operating Income Operating Income as reported $19,235 $71,394 $13,430 $37,199 Add back restructuring charges - - 1,309 10,947 -------- -------- -------- -------- Normalized operating income $19,235 $71,394 $14,739 $48,146 Normalized Income from continuing operations Income from continuing operations for purposes of computing diluted income per share 17,117 $42,071 $7,978 $27,886 Elimination of one time tax adjustments - (3,086) - (9,026) Elimination of restructuring charges (tax effected at 40%) - - 524 4,379 Elimination of gain on prepayment of note receivable (tax effected at 38.4%) (5,248) (5,248) - - Elimination of gain on Cable & Wireless (tax effected at 38.9%) - (260) - - Debt conversion costs (tax effected at 38.9%) - 10,403 - - -------- -------- -------- -------- Normalized income from continuing operations $11,869 $43,880 $8,502 $23,239 -------- -------- -------- -------- Normalized Diluted EPS from continuing operations From continuing operations $0.24 $0.58 $0.11 $0.45 Elimination of one time tax adjustments - (0.04) - (0.14) Elimination of restructuring charges (tax effected at 40%) - - 0.01 0.07 Elimination of gain on prepayment of note receivable (tax effected at 38.4%) (0.07) (0.07) - - Elimination of gain on Cable & Wireless (tax effected at 38.9%) - (0.00) - - Debt conversion costs (tax effected at 38.9%) - 0.14 - - -------- -------- -------- -------- Normalized diluted EPS from continuing operations $0.17 $0.61 $0.12 $0.38 December 31, 2004 2003 -------- -------- Net Debt Current maturities of long-term debt and capital lease obligations $37 $15,000 Long-term debt and capital lease obligations 68,147 5,000 Convertible subordinated notes - 85,000 -------- -------- Total debt 68,184 105,000 Cash and equivalents 25,882 23,946 -------- -------- Total cash 25,882 23,946 -------- -------- Net debt $42,302 $81,054 -------- -------- Normalized operating income, normalized income from continuing operations, normalized diluted EPS from continuing operations and net debt are non-GAAP financial measures. Management believes that these measures provide useful information regarding underlying trends in our continuing operations by excluding non-recurring items that are unrelated to our ongoing operations. Management believes that net debt provides useful information regarding the level of our indebtedness by reflecting cash and cash equivalents that would be used to repay debt. These non-GAAP measures are not a substitute for GAAP measures of financial performance and should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. CONTACT: Premiere Global Services, Inc., Atlanta Investor Calls Sean O'Brien, 404-262-8462