EX-99.1 2 a4939950ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Premiere Global Services Reports Q2 Results: Revenues $132.1 up 18%, Operating Income $23.3M up 32%, Diluted EPS $0.19; Company Lowers 2005 Revenue Outlook Primarily Due to Foreign Exchange Rates; Maintains Earnings Guidance ATLANTA--(BUSINESS WIRE)--July 27, 2005--Premiere Global Services, Inc. (NYSE: PGI), a global outsource provider of business communications services and business process solutions, today announced results for the second quarter ended June 30, 2005. Revenues were $132.1 million for the quarter, an increase of 18.4% from $111.6 million in the second quarter of 2004. Operating income grew 32.5% in the second quarter of 2005, totaling $23.3 million versus $17.6 million in the comparable prior year period. Income from continuing operations totaled $13.5 million and diluted EPS from continuing operations was $0.19 in the second quarter of 2005, versus breakeven income from continuing operations and diluted EPS from continuing operations of $0.01 in the second quarter of 2004.(1) Revenues totaled $259.3 million for the six months ended June 30, 2005, a 19.6% increase from $216.9 million in the comparable prior year period. Operating income grew 37.3% in the first half of 2005, totaling $45.7 million versus $33.3 million in the first half of 2004. Income from continuing operations totaled $26.6 million and diluted EPS from continuing operations totaled $0.37 in the first half of 2005, versus $8.7 million in income from continuing operations and $0.14 in diluted EPS from continuing operations in the comparable prior year period.(1) Second Quarter 2005 Accomplishments -- Increased Conferencing & Collaboration revenue by 34.1% to $66.6 million -- Grew Data Communications revenue by 5.7% to $65.5 million -- Generated $32.3 million of cash flows from operating activities up 48.8% -- Repurchased 502,500 shares of our common stock in the open market "I am proud to report another quarter of solid performance," said Boland T. Jones, Founder, Chairman and CEO of Premiere Global Services, Inc. "Growth in our new business process solutions remains on track, as the value of these solutions begins to prove itself in the market, and I remain enthusiastic about our growth prospects. However, the dramatic negative change in foreign currency exchange rates combined with an acceleration in the decline of our legacy broadcast fax business in North America will negatively impact our revenues in the second half of the year resulting in the lowering of our forecast. In light of these recent developments, we are aggressively lowering costs in order to maintain profitability and cash flow generation in-line with our previous guidance." Financial Outlook The following statements are based on Premiere Global Services' current expectations as of July 27, 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 has lowered its revenue outlook for the remainder of the year, principally due to adverse movements in foreign currency exchange rates and also due to an acceleration in the decline of revenues generated by the Company's legacy broadcast fax business in North America. Premiere Global now anticipates revenues in 2005 will be in the range of $505 to $510 million, including projected revenue contribution of approximately $5 million from the pending acquisition of Netspoke, which the Company anticipates closing effective early August 2005. Premiere Global believes diluted EPS from continuing operations in 2005 will be in the range of $0.70 to $0.73, as previously guided. The Company plans to discuss its financial guidance on its earnings call this afternoon at 5:00 p.m. Eastern. (1)Results in the second quarter and six months ended 2004 were negatively impacted by a charge of approximately $17.0 million associated with the conversion of the Company's subordinated convertible notes due 2008. 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) 289-0493 (US & Canada) or (913) 981-5510 (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 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 5, 2005, and can be accessed by calling (888) 203-1112 (US & Canada) or (719) 457-0820 (International). The confirmation code is 3805459. 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. (formerly Ptek Holdings, Inc.) provides business communications services and business process solutions that enable enterprise customers to automate and simplify components of their critical business processes and to communicate more effectively with their constituents. We offer data management and delivery solutions and conferencing and collaboration services on an outsource-basis, hosted on our global proprietary platforms. Customers apply our communication technologies-based solutions to a number of business processes, such as receivables collections, continuing education, alerts and notifications, investor calls, statement and invoice delivery, international collaboration, document automation, and other applications, in order to increase efficiency, to improve productivity and to raise customer satisfaction levels. With over 2,230 employees in 19 countries around the world, Premiere Global Services(SM) has an established customer base of approximately 54,000 corporate accounts, including a majority of the Fortune 500. 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: 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; foreign currency exchange rates; possible adverse results of pending or future litigation or infringement claims; 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 Affecting Future Performance" section of our Annual Report on Form 10-K for the year ended December 31, 2004. 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, 2005 AND 2004 (IN THOUSANDS, UNAUDITED, EXCEPT PER SHARE DATA) Three Months Ended Six Months Ended -------------------- -------------------- June 30, June 30, June 30, June 30, 2005 2004 2005 2004 --------- --------- -------------------- REVENUES $132,053 $111,553 $259,316 $216,907 OPERATING EXPENSES: Cost of revenues (exclusive of depreciation shown seperately below) 47,567 40,225 93,391 79,738 Selling and marketing 33,813 28,695 66,249 55,616 General and administrative 13,152 12,511 25,162 23,948 Research and development 2,488 2,925 5,054 5,431 Depreciation 6,373 6,257 12,925 12,834 Amortization 3,364 2,058 6,450 3,812 Restructuring costs 126 - 541 - Equity based compensation 1,917 1,332 3,880 2,278 -------- -------- -------- -------- Total operating expenses 108,800 94,003 213,652 183,657 -------- -------- -------- -------- OPERATING INCOME 23,253 17,550 45,664 33,250 -------- -------- -------- -------- OTHER INCOME (EXPENSE): Interest expense (1,267) (1,530) (2,249) (3,150) Interest income 108 181 420 348 Debt conversion costs - (17,027) - (17,027) Loss on sale of marketable securities - - (116) (87) Other, net (27) 813 66 829 -------- -------- -------- -------- Total other income (expense) (1,186) (17,563) (1,879) (19,087) -------- -------- -------- -------- INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 22,067 (13) 43,785 14,163 INCOME TAX EXPENSE (BENEFIT) 8,568 27 17,167 5,484 -------- -------- -------- -------- INCOME (LOSS) FROM CONTINUING OPERATIONS $ 13,499 $ (40) $ 26,618 $ 8,679 ======== ======== ======== ======== DISCONTINUED OPERATIONS: (Loss) gain from operations of Voicecom (1,952) 1,956 (1,952) 1,956 Income tax (benefit) expense (683) 761 (683) 761 -------- -------- -------- -------- (Loss) gain on discontinued operations (1,269) 1,195 (1,269) 1,195 -------- -------- -------- -------- NET INCOME $ 12,230 $ 1,155 $ 25,349 $ 9,874 ======== ======== ======== ======== BASIC EARNINGS PER SHARE: Income (loss) from continuing operations $ 13,499 $ (40) $ 26,618 $ 8,679 Net Income $ 12,230 $ 1,155 $ 25,349 $ 9,874 BASIC WEIGHTED AVERAGE SHARES OUTSTANDING: 70,532 59,426 70,494 57,776 ======== ======== ======== ======== Basic earnings per share: Continuing operations $ 0.19 $ (0.00) $ 0.38 $ 0.15 Discontinued operations$ (0.02) $ 0.02 $ (0.02) $ 0.02 -------- -------- -------- -------- Net Income $ 0.17 $ 0.02 $ 0.36 $ 0.17 ======== ======== ======== ======== DILUTED EARNINGS PER SHARE: Income from continuing operations for purposes of computing diluted net income per share $ 13,499 $ 582 $ 26,618 $ 10,064 Net Income for purposes of computing diluted net income per share $ 12,230 $ 1,777 $ 25,349 $ 11,259 DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING: 72,683 72,278 72,352 71,756 ======== ======== ======== ======== Diluted earnings per share: Continuing operations $ 0.19 $ 0.01 $ 0.37 $ 0.14 Discontinued operations$ (0.02) $ 0.01 $ (0.02) $ 0.02 -------- -------- -------- -------- Net Income $ 0.17 $ 0.02 $ 0.35 $ 0.16 ======== ======== ======== ======== PREMIERE GLOBAL SERVICES, INC AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS JUNE 30, 2005 AND DECEMBER 31, 2004 (IN THOUSANDS, EXCEPT SHARE DATA) June 30, Dec. 31, 2005 2004 ---------- ---------- (Unaudited) ASSETS CURRENT ASSETS Cash and equivalents $ 25,729 $ 25,882 Marketable securities, available for sale - 576 Accounts receivable (less allowances of $5,863 and $5,706, respectively) 83,895 72,055 Prepaid expenses and other 6,933 5,148 Deferred income taxes, net 12,856 17,706 ---------- ---------- Total current assets 129,413 121,367 PROPERTY AND EQUIPMENT, NET 75,095 74,050 OTHER ASSETS Goodwill 234,331 192,147 Intangibles, net 42,181 40,590 Deferred income taxes, net 3,461 3,461 Other assets 4,169 3,861 ---------- ---------- $ 488,650 $ 435,476 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 44,318 $ 37,337 Accrued taxes 6,215 6,700 Accrued expenses 40,139 40,192 Income taxes payable 12,905 8,968 Current maturities of long-term debt and capital lease obligations 665 37 Accrued restructuring costs 1,353 1,071 ---------- ---------- Total current liabilities 105,595 94,305 LONG-TERM LIABILITIES Long-term debt and capital lease obligations 92,244 68,147 Other accrued expenses 6,281 6,094 ---------- ---------- Total long-term liabilities 98,525 74,241 SHAREHOLDERS' EQUITY Common stock $0.01 par value; 150,000,000 shares authorized, 72,107,593 and 71,301,577 shares issued and outstanding at June 30, 2005 and December 31, 2004, respectively 721 713 Unrealized loss on marketable securities - 6 Additional paid-in capital 698,449 694,284 Unearned restricted stock compensation (15,768) (4,187) Note receivable, shareholder (1,844) (5,662) Cumulative translation adjustment (1,724) 2,429 Accumulated deficit (395,304) (420,653) ---------- ---------- Total shareholders' equity 284,530 266,930 ---------- ---------- $ 488,650 $ 435,476 ========== ========== PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 2005 AND 2004 (IN THOUSANDS, UNAUDITED) Six Months Ended June 30, 2005 2004 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES Net Income 25,349 9,874 Adjustments to reconcile net income to net cash provided by operating activities: Loss (gain) on discontinued operation 1,269 (1,195) Debt conversion costs - 17,027 Depreciation 12,925 12,834 Amortization 6,450 3,812 Amortization of deferred financing costs 224 434 Loss on sale of marketable securities, available for sale 116 87 Deferred income taxes 4,854 1,679 Gain on disposal of assets (45) - Gain on note receivable and other liabilities - (423) Restructuring costs, net (58) (2,974) Payments for discontinued operations (541) (1,142) Equity based compensation 3,880 2,278 Changes in assets and liabilities: Accounts receivable, net (10,092) (3,621) Prepaid expenses and other current assets (1,917) (3,024) Accounts payable and accrued expenses 10,640 (5,011) --------- --------- Total adjustments 27,705 20,761 --------- --------- Total cash provided by operating activities 53,054 30,635 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (14,264) (12,119) Business acquisitions (53,379) (28,552) Sale of marketable securities 755 667 Purchase of marketable securities (306) (245) Proceeds from note receivable - 1,600 --------- --------- Net cash used in investing activities (67,194) (38,649) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Principal proceeds under borrowing arrangements 50,700 20,900 Principal payments under borrowing arrangements (28,378) (5,000) Payments received on shareholder note 3,953 - Make whole interest payment - convertible notes - (16,255) Purchase of treasury stock, at cost (15,657) (4,495) Exercise of stock options 6,439 8,218 --------- --------- Total cash provided by financing activities 17,057 3,368 --------- --------- Effect of exchange rate changes on cash and equivalents (3,070) (423) --------- --------- NET DECREASE IN CASH AND EQUIVALENTS (153) (5,069) --------- --------- CASH AND EQUIVALENTS, beginning of period $ 25,882 $ 23,946 --------- --------- CASH AND EQUIVALENTS, end of period $ 25,729 $ 18,877 ========= ========= CONTACT: Premiere Global Services, Inc., Atlanta Investor Calls Sean O'Brien, 404-262-8462