EX-99.2 3 a6080422ex992.htm EXHIBIT 99.2

Exhibit 99.2

PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Previous Reporting Format (Includes Email Marketing Business)
(Unaudited, in thousands, except per share data)
                     
        YTD*       YTD*
Q1-08 Q2-08 Q3-08 Q4-08 Q4-08 Q1-09 Q2-09 Q3-09 Q3-09
 
Net revenues $ 152,854 $ 161,565 $ 157,409 $ 152,399 $ 624,228 $ 155,871 $ 154,691 $ 148,851 $ 459,413
Operating expenses:

Cost of revenues (exclusive of

depreciation and

amortization shown

separately below)

61,662 66,202 65,225 63,515 256,606 66,215 66,375 65,105 197,695
Selling and marketing 39,851 40,211 37,701 35,932 153,696 37,642 35,848 34,744 108,234
General and administrative 16,233 16,738 17,004 16,237 66,203 15,711 16,478 16,828 49,017
Research and development 4,059 4,163 4,094 4,564 16,888 4,230 4,395 4,872 13,497
Excise tax expense - 2,890 - - 2,890 - - - -
Depreciation 7,247 8,600 8,274 8,748 32,869 9,091 9,538 9,881 28,510
Amortization 4,243 3,914 4,107 3,465 15,729 3,030 2,828 2,565 8,423
Restructuring costs - 3,339 - - 3,339 1,594 4,686 13,543 19,823
Asset impairments - - 249 4,030 4,279 - - 10,937 10,937

Net legal settlements and

related expenses

- 1,608 784 (162 ) 2,230 - 161 51 212
Acquisition-related costs   -     -     -     -     -     340     231     41     612  
Total operating expenses   133,295     147,665     137,438     136,329     554,729     137,853     140,540     158,567     436,960  
 
Operating income (loss)   19,559     13,900     19,971     16,070     69,499     18,018     14,151     (9,716 )   22,453  
 
Other (expense) income:
Interest expense (4,629 ) (5,532 ) (4,501 ) (4,750 ) (19,411 ) (4,025 ) (3,767 ) (3,286 ) (11,077 )

Unrealized gain (loss) on

change in fair value of

interest rate swaps

(4,592 ) 4,223 629 (366 ) (106 ) 941 1,145 786 2,872
Interest income 213 138 67 505 923 106 74 86 266
Other, net   837     (21 )   (122 )   (201 )   493     62     (153 )   (220 )   (310 )
Total other expense, net   (8,171 )   (1,192 )   (3,927 )   (4,812 )   (18,101 )   (2,916 )   (2,701 )   (2,634 )   (8,249 )
 
Income (loss) before income taxes 11,388 12,708 16,044 11,258 51,398 15,102 11,450 (12,350 ) 14,204
Income tax expense   2,353     4,170     5,286     3,486     15,295     4,878     3,666     266     8,811  
Net income (loss) $ 9,035   $ 8,538   $ 10,758   $ 7,772   $ 36,103   $ 10,224   $ 7,784   $ (12,616 ) $ 5,393  
 
 

BASIC WEIGHTED-AVERAGE

SHARES OUTSTANDING

  59,331     59,419     59,461     59,166     59,356     58,815     58,840     59,049     58,907  
 
Basic net income per share $ 0.15 $ 0.14 $ 0.18 $ 0.13 $ 0.61 $ 0.17 $ 0.13 $ (0.21 ) $ 0.09
 

DILUTED WEIGHTED-AVERAGE

SHARES OUTSTANDING

  60,497     60,603     60,535     59,741     60,477     59,347     59,439     59,049     59,457  
 
Diluted net income per share $ 0.15 $ 0.14 $ 0.18 $ 0.13 $ 0.60 $ 0.17 $ 0.13 $ (0.21 ) $ 0.09
 
*The sum of the quarters may differ from annual results due to rounding and the impact of the difference in weighted shares outstanding for the stand-alone periods.
PAGE 1 OF 4

PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
CONTINUING OPERATIONS (Excludes Email Marketing Business from Continuing Operations)
(Unaudited, in thousands, except per share data)
                     
        YTD*       YTD*
Q1-08 Q2-08 Q3-08 Q4-08 Q4-08 Q1-09 Q2-09 Q3-09 Q3-09
 
Net revenues $ 151,889 $ 160,465 $ 156,532 $ 151,513 $ 620,400 $ 155,082 $ 153,933 $ 148,002 $ 457,017
Operating expenses:

Cost of revenues (exclusive of

depreciation and

amortization shown

separately below)

60,886 65,328 64,185 62,739 253,140 65,370 65,628 64,471 195,469
Selling and marketing 39,272 39,492 37,044 35,369 151,178 36,988 35,727 34,540 107,255
General and administrative 16,080 16,532 16,867 16,056 65,526 15,551 16,308 16,655 48,514
Research and development 3,759 3,813 3,793 4,324 15,697 3,878 4,105 4,575 12,558
Excise tax expense - 2,890 - - 2,890 - - - -
Depreciation 7,058 8,331 7,934 8,364 31,687 8,631 9,091 9,458 27,180
Amortization 4,093 3,764 3,957 3,315 15,129 2,980 2,777 2,515 8,272
Restructuring costs - 3,339 - - 3,339 1,594 4,686 13,304 19,585
Asset impairments - - 249 3,197 3,446 - - 3,615 3,615

Net legal settlements and

related expenses

- 1,608 784 (162 ) 2,230 - 161 51 212
Acquisition-related costs   -     -     -     -     -     340     231     41     612  
Total operating expenses   131,148     145,097     134,813     133,202     544,262     135,332     138,714     149,225     423,272  
 
Operating income (loss)   20,741     15,368     21,719     18,311     76,138     19,750     15,219     (1,223 )   33,745  
 
Other (expense) income:
Interest expense (4,629 ) (5,532 ) (4,501 ) (4,750 ) (19,411 ) (4,025 ) (3,767 ) (3,286 ) (11,077 )

Unrealized gain (loss) on

change in fair value of

interest rate swaps

(4,592 ) 4,223 629 (366 ) (106 ) 941 1,145 786 2,872
Interest income 213 138 67 505 923 106 74 86 266
Other, net   837     (21 )   (122 )   (201 )   493     62     (153 )   (220 )   (310 )
Total other expense, net   (8,171 )   (1,192 )   (3,927 )   (4,812 )   (18,101 )   (2,916 )   (2,701 )   (2,634 )   (8,249 )
 

Income (loss) from continuing

operations before income taxes

12,570 14,176 17,792 13,499 58,037 16,834 12,518 (3,857 ) 25,496
Income tax expense   2,790     4,713     5,933     4,007     17,443     5,519     4,062     699     10,279  

Net income (loss) from

continuing operations

$ 9,780   $ 9,463   $ 11,859   $ 9,492   $ 40,594   $ 11,315   $ 8,456   $ (4,556 ) $ 15,217  
 

Loss on discontinued operations,

net of taxes

$ (745 ) $ (925 ) $ (1,101 ) $ (1,720 ) $ (4,491 ) $ (1,091 ) $ (672 ) $ (8,060 ) $ (9,824 )
                 
Net income (loss) $ 9,035   $ 8,538   $ 10,758   $ 7,772   $ 36,103   $ 10,224   $ 7,784   $ (12,616 ) $ 5,393  
 

BASIC WEIGHTED-AVERAGE

SHARES OUTSTANDING

  59,331     59,419     59,461     59,166     59,356     58,815     58,840     59,049     58,907  
 
Basic net income (loss) per share
Continuing operations $ 0.16 $ 0.16 $ 0.20 $ 0.16 $ 0.68 $ 0.19 $ 0.14 $ (0.08 ) $ 0.26
Discontinued operations   (0.01 )   (0.02 )   (0.02 )   (0.03 )   (0.08 )   (0.02 )   (0.01 )   (0.14 )   (0.17 )
Net income (loss) per share $ 0.15   $ 0.14   $ 0.18   $ 0.13   $ 0.61   $ 0.17   $ 0.13   $ (0.21 ) $ 0.09  
 

DILUTED WEIGHTED-AVERAGE

SHARES OUTSTANDING

  60,497     60,603     60,535     59,741     60,477     59,347     59,439     59,049     59,457  
 

Diluted net income

(loss) per share

Continuing operations $ 0.16 $ 0.16 $ 0.20 $ 0.16 $ 0.67 $ 0.19 $ 0.14 $ (0.08 ) $ 0.26
Discontinued operations   (0.01 )   (0.02 )   (0.02 )   (0.03 )   (0.07 )   (0.02 )   (0.01 )   (0.14 )   (0.17 )
Net income (loss) per share $ 0.15   $ 0.14   $ 0.18   $ 0.13   $ 0.60   $ 0.17   $ 0.13   $ (0.21 ) $ 0.09  
 
*The sum of the quarters may differ from annual results due to rounding and the impact of the difference in weighted shares outstanding for the stand-alone periods.
PAGE 2 OF 4
PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
DISCONTINUED OPERATIONS (Email Marketing Business)
(Unaudited, in thousands, except per share data)
                     
        YTD*       YTD*
Q1-08 Q2-08 Q3-08 Q4-08 Q4-08 Q1-09 Q2-09 Q3-09 Q3-09
 
Net revenues $ 965 $ 1,100 $ 877 $ 886 $ 3,828 $ 789 $ 758 $ 849 $ 2,396
Operating expenses:

Cost of revenues (exclusive of

depreciation and

amortization shown

separately below)

776 874 1,040 776 3,466 845 747 634 2,226
Selling and marketing 579 719 657 563 2,518 654 121 204 979
General and administrative 153 206 137 181 677 160 170 173 503
Research and development 300 350 301 240 1,191 352 290 297 939
Depreciation 189 269 340 384 1,182 460 447 423 1,330
Amortization 150 150 150 150 600 50 51 50 151
Restructuring costs - - - - - - - 239 239
Asset impairments   -     -     -     833     833     -     -     7,322     7,322  
Total operating expenses   2,147     2,568     2,625     3,127     10,467     2,521     1,826     9,342     13,689  
 
Operating loss   (1,182 )   (1,468 )   (1,748 )   (2,241 )   (6,639 )   (1,732 )   (1,068 )   (8,493 )   (11,293 )
 

Loss before income taxes from

discontinued operations

(1,182 ) (1,468 ) (1,748 ) (2,241 ) (6,639 ) (1,732 ) (1,068 ) (8,493 ) (11,293 )
Income tax benefit   (437 )   (543 )   (647 )   (521 )   (2,148 )   (641 )   (396 )   (433 )   (1,469 )

Loss from discontinued

operations, net of taxes

$ (745 ) $ (925 ) $ (1,101 ) $ (1,720 ) $ (4,491 ) $ (1,091 ) $ (672 ) $ (8,060 ) $ (9,824 )
 
 

BASIC WEIGHTED-AVERAGE

SHARES OUTSTANDING

  59,331     59,419     59,461     59,166     59,356     58,815     58,840     59,049     58,907  
 

Basic net loss per share from

discontinued operations

$ (0.01 ) $ (0.02 ) $ (0.02 ) $ (0.03 ) $ (0.08 ) $ (0.02 ) $ (0.01 ) $ (0.14 ) $ (0.17 )
 

DILUTED WEIGHTED-AVERAGE

SHARES OUTSTANDING

  60,497     60,603     60,535     59,741     60,477     59,347     59,439     59,049     59,457  
 

Diluted net loss per share from

discontinued operations

$ (0.01 ) $ (0.02 ) $ (0.02 ) $ (0.03 ) $ (0.07 ) $ (0.02 ) $ (0.01 ) $ (0.14 ) $ (0.17 )
 
*The sum of the quarters may differ from annual results due to rounding and the impact of the difference in weighted shares outstanding for the stand-alone periods.
PAGE 3 OF 4

PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
AS ADJUSTED
(Unaudited, in thousands)
                       
        YTD*       YTD*
Q1-08 Q2-08 Q3-08 Q4-08 Q4-08 Q1-09 Q2-09 Q3-09 Q3-09
 
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 9,035 $ 8,538 $ 10,758 $ 7,772 $ 36,103 $ 10,224 $ 7,784 $ (12,616 ) $ 5,393
Loss from discontinued operations, net of taxes $ 745   $ 925   $ 1,101   $ 1,720   $ 4,491   $ 1,091   $ 672   $ 8,060   $ 9,824  
Income from continuing operations 9,780 9,463 11,859 9,492 40,594 11,315 8,456 (4,556 ) 15,217

Adjustments to reconcile net income to net cash

provided by operating activities:

Depreciation 7,058 8,331 7,934 8,364 31,687 8,631 9,091 9,458 27,180
Amortization 4,093 3,764 3,957 3,315 15,129 2,980 2,777 2,515 8,272
Amortization of deferred financing costs 141 141 141 141 564 141 155 159 455
Net legal settlements and related expenses - 1,608 784 (162 ) 2,230 - 161 51 212
Payments for legal settlements and related expenses - - (1,613 ) (641 ) (2,254 ) - - - -
Deferred income taxes, net of effect of acquisitions (1,429 ) 256 10,668 4,638 14,133 (783 ) 577 (4,262 ) (4,468 )
Restructuring costs - 3,339 - - 3,339 1,594 4,686 13,304 19,585
Payments for restructuring costs (929 ) (709 ) (2,205 ) (371 ) (4,214 ) (726 ) (1,470 ) (2,594 ) (4,790 )
Asset impairments - - 249 3,197 3,446 - - 3,615 3,615
Equity-based compensation 3,462 3,000 2,940 3,071 12,473 2,936 2,873 2,515 8,324

Excess tax benefits from share-based

payment arrangements

(23 ) (809 ) (140 ) (177 ) (1,149 ) (126 ) (182 ) (3 ) (311 )

Unrealized (gain) loss on change in fair value of

interest rate swaps

4,592 (4,223 ) (629 ) 366 106 (941 ) (1,145 ) (786 ) (2,872 )
Provision (recovery) for doubtful accounts (442 ) (25 ) 408 471 412 118 431 158 707
Excise tax expense - 2,890 - - 2,890 - - - -

Changes in assets and liabilities, net of

effect of acquisitions:

Accounts receivable, net (10,222 ) (3,570 ) 3,115 2,796 (7,881 ) (8,096 ) 4,505 5,801 2,210
Prepaid expenses and other assets 51 (1,202 ) (636 ) (2,503 ) (4,290 ) 631 (1,180 ) 2,317 1,768
Accounts payable and accrued expenses   590     2,531     (708 )   484     2,897     2,193     (4,809 )   (1,843 )   (4,462 )

Net cash provided by operating activities

from continuing operations

  16,722     24,785     36,124     32,481     110,112     19,867     24,926     25,849     70,642  

Net cash used in operating activities

from discontinued operations

  (843 )   (1,049 )   (1,258 )   (874 )   (4,024 )   (1,222 )   (570 )   (459 )   (2,251 )
Net cash provided by operating activities   15,879     23,736     34,866     31,607     106,088     18,645     24,356     25,390     68,391  
 
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (12,151 ) (12,065 ) (10,850 ) (9,954 ) (45,020 ) (11,671 ) (11,079 ) (9,350 ) (32,100 )
Other investing activities - - - (681 ) (681 ) - 103 (2 ) 101
Business acquisitions, net of cash acquired   (138 )   (8,305 )   (21,782 )   (191 )   (30,416 )   (7,484 )   (372 )   (295 )   (8,151 )

Net cash used in investing activities

from continuing operations

  (12,289 )   (20,370 )   (32,632 )   (10,826 )   (76,117 )   (19,155 )   (11,348 )   (9,647 )   (40,150 )

Net cash used in investing activities

from discontinued operations

  (1,541 )   (1,034 )   (978 )   (1,052 )   (4,605 )   (900 )   (1,034 )   (682 )   (2,616 )
Net cash used investing activities   (13,830 )   (21,404 )   (33,610 )   (11,878 )   (80,722 )   (20,055 )   (12,382 )   (10,329 )   (42,766 )
 
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments under borrowing arrangements (167,880 ) (130,032 ) (109,077 ) (122,721 ) (529,710 ) (56,848 ) (60,148 ) (50,211 ) (167,207 )
Proceeds from borrowing arrangements 170,896 135,376 111,838 112,731 530,841 64,445 52,462 36,409 153,316
Payments of debt issuance costs - (8 ) - - (8 ) - (5 ) (142 ) (147 )
Repayment of shareholder notes - - - - - - - 93 93

Excess tax benefits from share-based

payment arrangements

23 809 140 177 1,149 126 182 3 311
Purchase of treasury stock, at cost (1,027 ) (8,137 ) (1,142 ) (8,518 ) (18,824 ) (3,391 ) (587 ) (703 ) (4,681 )
Exercise of stock options   219     1,991     86     231     2,527     307     247     -     554  

Net cash provided by (used in)

financing activities

  2,231     (1 )   1,845     (18,100 )   (14,025 )   4,639     (7,849 )   (14,551 )   (17,761 )
 
Effect of exchange rate changes on cash and equivalents 214 (260 ) (1,572 ) (447 ) (2,065 ) (989 ) 1,396 1,282 1,689
 
NET INCREASE IN CASH AND EQUIVALENTS   4,494     2,071     1,529     1,182     9,276     2,240     5,521     1,792     9,553  
CASH AND EQUIVALENTS, beginning of period $ 18,259   $ 22,753   $ 24,824   $ 26,353   $ 18,259   $ 27,535   $ 29,775   $ 35,296   $ 27,535  
CASH AND EQUIVALENTS, end of period $ 22,753   $ 24,824   $ 26,353   $ 27,535   $ 27,535   $ 29,775   $ 35,296   $ 37,088   $ 37,088  
 
*The sum of the quarters may differ from annual results due to rounding.
PAGE 4 OF 4