EX-99.1 2 a5947488ex99_1.htm EXHIBIT 99.1

Exhibit 99.1

Premiere Global Services Reports First Quarter 2009 Results: Revenues Increased to $155.9M, Non-GAAP Diluted EPS $0.25*

Results Driven by 12% Growth in Conferencing Solutions (17% Adjusting for Currency*)

Company Anticipates Continued Growth in Revenues and Profitability in 2009

ATLANTA--(BUSINESS WIRE)--April 23, 2009--Premiere Global Services, Inc. (NYSE: PGI), a global provider of on-demand, applied communication technologies, today announced results for the first quarter ended March 31, 2009. Consolidated net revenues increased 2.0% (7.3% on a constant currency basis*) to $155.9 million in the first quarter of 2009, compared to $152.9 million in the first quarter of 2008. In the first quarter of 2009, operating income totaled $18.0 million, net income totaled $10.2 million and diluted EPS totaled $0.17, compared to $19.6 million, $9.0 million and $0.15, respectively, in the first quarter of 2008. Non-GAAP diluted EPS was flat at $0.25* (increased 12.0% to $0.28 on a constant currency basis*) in the first quarter of 2009, excluding the items set forth on the attached reconciliation of non-GAAP financial measures table.

In the first quarter of 2009, the Company earned nearly 39% of its consolidated net revenues outside of the United States. The Company estimates that changes in foreign currency exchange rates during the first quarter of 2009 negatively impacted its financial results as set forth in the table below and noted on the attached reconciliation of non-GAAP financial measures table:

         
Impact of fluctuations
Q1 - 09 in foreign currency Q1 - 09
(Constant currency*) exchange rates (Actual)
(Unaudited, in thousands, except per share data)
 
Consolidated Net Revenues $164,063 ($8,192) $155,871
Non-GAAP Operating Income* $27,379 ($1,461) $25,918
Non-GAAP Net Income* $16,766 ($1,806) $14,960
Non-GAAP Diluted EPS from Net Income* $0.28 ($0.03) $0.25

“We are pleased with our first quarter performance, as we continued to grow our business despite a worsening global economy,” said Boland T. Jones, Founder, Chairman and CEO of Premiere Global Services, Inc. “While we continue to generate meaningful organic growth in our conferencing solutions, our overall growth is being impacted by the global recession and lower spending on transactional and marketing-related communications, particularly in our email- and fax-based solutions.

We plan to continue our path of focused investment along with prudent expense management in order to build a foundation for accelerated growth as the economy rebounds. Based on the current positive trends in our business and our solid pipeline of new customer opportunities, and assuming no significant changes in today’s foreign currency exchange rates, we continue to believe that we will grow both our revenues and profitability in 2009.”

Revenue Detail

Revenue from the Company’s PGiMeet conferencing and collaboration solutions grew 12.2% (17.0% on a constant currency basis*) to $117.9 million in the first quarter of 2009, compared to $105.1 million in the first quarter of 2008.

In the first quarter of 2009, net revenue in the Company’s reportable segments changed from the comparable prior year quarter as follows:

  • North America grew 5.1% (6.9% on a constant currency basis*) to $99.8 million, versus $95.0 million;
  • Europe decreased 3.7% (increased 14.4% on a constant currency basis*) to $28.9 million, versus $30.0 million; and
  • Asia Pacific decreased 2.9% (increased 1.4% on a constant currency basis*) to $27.1 million, versus $27.9 million.

* 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, non-GAAP diluted EPS and organic growth. The Company has also included these non-GAAP measures, as well as consolidated net revenues, segment net revenue and certain solutions revenue, 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.

Conference Call

The Company will hold a conference call at 5:00 p.m., Eastern Time, 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: (877) 704-5378 (U.S. and Canada) or (913) 312-1294 (International).

The conference call will be simultaneously webcast. Webcast information can be found at www.premiereglobal.com/investors. You may also follow this link for details on the web replay and for the text of the earnings release, including the financial and statistical information to be presented during the call.

A replay will be available following the call at 8:00 p.m., Eastern Time, tonight through midnight, Eastern Time, on May 1, 2009, and can be accessed by calling (888) 203-1112 (U.S. and Canada) or (719) 457-0820 (International). The confirmation code is 1724998. The webcast of this call will be archived on the Company’s web site at www.premiereglobal.com/investors.

About Premiere Global Services, Inc.

Premiere Global Services, Inc. is a global provider of on-demand, applied communication technologies. Our PGi Communications Operating System supports business applications within the following solution sets: PGiMeet, PGiSend, PGiNotify and PGiMarket.

Premiere Global is headquartered in Atlanta, Georgia. We have a global presence in 24 countries and nearly one million users from our established base of over 50,000 customers, which includes nearly 90% of the Fortune 500. 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 Inc.'s forward-looking statements, including, but not limited to, the following factors: competitive pressures, including pricing pressures; technological changes; 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; customer consolidations, bankruptcies or payment defaults; possible adverse results of pending or future litigation or infringement claims; federal or state legislative or regulatory changes, including government regulations applicable to traditional telecommunications service providers; general domestic and international economic, business or political conditions; a global economic slowdown or changes in the cost or availability of financing; and other factors described from time to time in our press releases, reports and other filings with the SEC, including but not limited to the "Risk Factors" sections of our Annual Report on Form 10-K for the year ended December 31, 2008. 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
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
       
 
Three Months Ended
March 31,
  2009     2008  
(Unaudited)
 
Net revenues $ 155,871 $ 152,854
Operating expenses:
Cost of revenues (exclusive of depreciation and amortization shown
separately below) 66,215 61,662
Selling and marketing 37,642 39,851
General and administrative 15,711 16,233
Research and development 4,230 4,059
Depreciation 9,091 7,247
Amortization 3,030 4,243
Restructuring costs 1,594 -
Acquisition-related costs   340     -  
Total operating expenses   137,853     133,295  
 
Operating income   18,018     19,559  
 
Other (expense) income:
Interest expense (4,025 ) (4,629 )
Unrealized gain (loss) on change in fair value of interest rate swaps 941 (4,592 )
Interest income 106 213
Other, net   62     837  
Total other (expense)   (2,916 )   (8,171 )
 
Income before income taxes 15,102 11,388
Income tax expense   4,878     2,353  
Net income $ 10,224   $ 9,035  
 
 
BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING   58,815     59,331  
 
Basic earnings per share from net income $ 0.17   $ 0.15  
 
DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING   59,347     60,497  
 
Diluted earnings per share from net income $ 0.17   $ 0.15  
PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
     
 
March 31, December 31,
  2009     2008  
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and equivalents $ 29,775 $ 27,535
Accounts receivable (less allowances of $1,830 and $2,069, respectively) 101,248 94,469
Prepaid expenses and other current assets 11,791 12,623
Deferred income taxes, net   10,931     11,184  
Total current assets   153,745     145,811  
 
PROPERTY AND EQUIPMENT, NET 131,460 129,077
 
OTHER ASSETS
Goodwill 347,136 343,954
Intangibles, net of amortization 30,843 32,080
Restricted cash 299 306
Other assets   9,462     9,779  
$ 672,945   $ 661,007  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 52,696 $ 52,710
Income taxes payable 4,344 3,063
Accrued taxes, other than income taxes 8,022 9,818
Accrued expenses 32,030 33,787
Current maturities of long-term debt and capital lease obligations 2,314 2,455
Accrued restructuring costs   2,155     1,082  
Total current liabilities   101,561     102,915  
 
LONG-TERM LIABILITIES
Long-term debt and capital lease obligations 277,352 269,034
Accrued restructuring costs 568 771
Accrued expenses 19,091 20,150
Deferred income taxes, net   13,676     14,303  
Total long-term liabilities   310,687     304,258  
 
SHAREHOLDERS' EQUITY
Common stock, $0.01 par value; 150,000,000 shares authorized,
60,604,244 and 60,792,441 shares issued and outstanding in 2009 and 2008, respectively 606 608
Additional paid-in capital 546,232 545,801
Notes receivable, shareholder (1,829 ) (1,803 )
Accumulated other comprehensive (loss) income (12,076 ) (8,312 )
Accumulated deficit   (272,236 )   (282,460 )
Total shareholders' equity   260,697     253,834  
$ 672,945   $ 661,007  
 
PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
         
 
Three Months Ended
March 31,
  2009     2008  
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 10,224 $ 9,035

 

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 9,091 7,247

 

Amortization 3,030 4,243

 

Amortization of deferred financing costs 141 141
Deferred income taxes, net of effect of acquisitions (783 ) (1,429 )
Restructuring costs 1,594 -

 

Payments for restructuring costs (726 ) (929 )
Equity-based compensation 2,936 3,462
Excess tax benefits from share-based payment arrangements (126 ) (23 )
Unrealized (gain) loss on change in fair value of interest rate swaps (941 ) 4,592

 

Provision (recovery) for doubtful accounts 118 (442 )
Loss on disposal of assets 7 -
Changes in assets and liabilities, net of effect of acquisitions:
Accounts receivable, net (8,096 ) (10,222 )
Prepaid expenses and other assets 624 51
Accounts payable and accrued expenses   1,552     153  
Total adjustments   8,421     6,844  
Net cash provided by operating activities   18,645     15,879  
 
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (12,571 ) (13,692 )
Business acquisitions, net of cash acquired   (7,484 )   (138 )
Net cash used in investing activities   (20,055 )   (13,830 )
 
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments under borrowing arrangements (56,848 ) (167,880 )
Proceeds from borrowing arrangements 64,445 170,896
Excess tax benefits from share-based payment arrangements 126 23
Purchase of treasury stock, at cost (3,391 ) (1,027 )
Exercise of stock options   307     219  
Net cash provided by financing activities   4,639     2,231  
 
Effect of exchange rate changes on cash and equivalents   (989 )   214  
 
NET INCREASE IN CASH AND EQUIVALENTS   2,240     4,494  
CASH AND EQUIVALENTS, beginning of period   27,535     18,259  
CASH AND EQUIVALENTS, end of period $ 29,775   $ 22,753  
 
PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)
     
Three Months Ended
March 31,
  2009     2008  
(Unaudited)
Non-GAAP Operating Income (1)
Operating income, as reported $ 18,018 $ 19,559
Restructuring costs 1,594 -
Equity-based compensation 2,936 3,462
Acquisition-related costs 340 -
Depreciation - (663 )
Amortization   3,030     4,243  
Non-GAAP operating income $ 25,918   $ 26,601  
 
Non-GAAP Net Income (1)
Net income, as reported $ 10,224 $ 9,035
Elimination of tax adjustments - (1,395 )
Unrealized (gain) loss on change in fair value of interest rate swaps (612 ) 2,985
Restructuring costs 1,079 -
Equity-based compensation 1,988 2,285
Acquisition-related costs 230 -
Depreciation - (438 )
Amortization   2,051     2,800  
Non-GAAP net income $ 14,960   $ 15,272  
 
Non-GAAP Diluted EPS from Net Income (1)
Diluted EPS from net income, as reported $ 0.17 $ 0.15
Elimination of tax adjustments - (0.02 )
Unrealized (gain) loss on change in fair value of interest rate swaps (0.01 ) 0.05
Restructuring costs 0.02 -
Equity-based compensation 0.03 0.04
Acquisition-related costs - -
Depreciation - (0.01 )
Amortization   0.04     0.04  
Non-GAAP diluted EPS from net income $ 0.25   $ 0.25  
 
 

(1)

 

Management believes that presenting non-GAAP operating income, non-GAAP income and non-GAAP diluted earnings per share (EPS) provide useful information regarding underlying trends in our continuing operations. Management expects equity-based compensation and amortization expenses to be recurring costs and presents non-GAAP diluted EPS to exclude these non-cash items as well as non-recurring items that are unrelated to our ongoing operations, including tax adjustments, unrealized (gain) loss on change in fair value of interest rate swaps, restructuring costs, and acquisition-related costs. These non-cash and non-recurring items are presented net of taxes for non-GAAP net income and non-GAAP diluted EPS. The portion of depreciation expense excluded from non-GAAP operating income, and excluded from non-GAAP net income and non-GAAP diluted EPS net of taxes, reflects management's review and adjustment of the useful economic lives of depreciable assets.
PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP
CONSTANT CURRENCY ADJUSTMENTS AND ORGANIC GROWTH
Constant Currency Adjustments (2)            
    Impact of fluctuations
Q1 - 09 in foreign currency Q1 - 09
(Constant currency) exchange rates (Actual)
(Unaudited, in thousands, except per share data)
Consolidated Net Revenues $164,063 ($8,192) $155,871
North America Net Revenue $101,518 ($1,682) $99,836
Europe Net Revenue $34,265 ($5,358) $28,907
Asia Pacific Net Revenue $28,280 ($1,152) $27,128
PGiMeet Solutions Revenue $122,964 ($5,104) $117,860
Non-GAAP Operating Income $27,379 ($1,461) $25,918
Non-GAAP Net Income $16,766 ($1,806) $14,960
Non-GAAP Diluted EPS from Net Income $0.28 ($0.03) $0.25
 
(2) Management also presents these non-GAAP financial measures, as well as consolidated net revenues, segment net revenue and certain solutions revenue, on a constant currency basis 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 our financial results without the distortion of these fluctuations. These constant currency adjustments exclude any fluctuations in foreign currency exchange rates using the average exchange rates from the current year period and applying them to prior period results.
 
Organic Growth (3)
 
Impact of fluctuations Organic net
Consolidated net revenues in foreign currency Impact of Organic net revenue Consolidated net revenues revenue
2008 exchange rates acquisitions growth 2009 growth rate

(Unaudited, in thousands, except percentages)

 
Three Months Ended March 31, $152,854 ($8,192) $3,401 $7,808 $155,871 5.1%
 
(3) Management defines "organic growth" as revenue changes excluding the 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 our ongoing core operations or underlying growth, such as acquisitions.

CONTACT:
Premiere Global Services, Inc.
Investor Calls
Sean O’Brien, 404-262-8462
Senior Vice President
Strategic Planning & IR