PGi SaaS Products Revenue Up Over 50% in Second Quarter 2014; Total Revenues Up Over 9% to $144.3M, Non-GAAP Diluted EPS from Continuing Ops $0.23* - MyFoxTallahassee.com

PGi SaaS Products Revenue Up Over 50% in Second Quarter 2014; Total Revenues Up Over 9% to $144.3M, Non-GAAP Diluted EPS from Continuing Ops $0.23*

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SOURCE PGi

Company Reiterates 2014 Financial Outlook, Including Accelerated SaaS Growth Investments; Projects 2014 Free Cash Flow to Exceed $1.00 Per Share*

ATLANTA, July 17, 2014 /PRNewswire/ -- Premiere Global Services, Inc. (NYSE: PGI), a leading global provider of collaboration software and services for over 20 years, today announced results for the second quarter ended June 30, 2014.

In the second quarter of 2014, net revenues increased 9.2% to $144.3 million, compared to $132.2 million in the second quarter of 2013. Diluted EPS from continuing operations was $0.13 in the second quarter of 2014, compared to diluted EPS from continuing operations of $0.17 in the second quarter of 2013. Non-GAAP diluted EPS from continuing operations was $0.23* in the second quarter of 2014, compared to non-GAAP diluted EPS from continuing operations of $0.20* in the second quarter of 2013. 

"We are pleased with the continuing solid trends in our global business and, in particular, the increasing momentum in sales of our SaaS-based collaboration products," said Boland T. Jones, PGi founder, chairman and CEO. "We generated SaaS revenue of approximately $12 million in the second quarter, representing over 50% year-over-year growth and our highest sequential increase ever in this important revenue category. We ended the quarter with strong sales pipelines and an annual revenue run-rate of over $48 million from these high-value, high-margin products. Consistent with our ongoing strategy, we plan to accelerate our investments in driving higher sales of these next-generation collaboration products this year, as we work to further accelerate the positive transition in our business toward a SaaS model."

Six Month Results

In the first six months of 2014, net revenues grew nearly 10% to $287.5 million, compared to $261.7 million in the first six months of 2013. Diluted EPS from continuing operations was $0.24 in the first six months of 2014, compared to diluted EPS from continuing operations of $0.33 in the first six months of 2013. Non-GAAP diluted EPS from continuing operations was $0.45* in the first six months of 2014, compared to non-GAAP diluted EPS from continuing operations of $0.39* in the first six months of 2013. 

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, and assuming no additional acquisitions, PGi continues to anticipate that results for 2014 will be within the financial outlook ranges it provided on April 24, 2014-net revenues from continuing operations are projected to be in the range of $565-$575 million and non-GAAP diluted EPS from continuing operations is projected to be in the range of $0.85-$0.88-and free cash flow is projected to exceed $1.00 per share*. The Company continues to anticipate that it will reinvest excess earnings this year in product, sales and marketing initiatives designed to accelerate sales of its collaboration software applications and its transition to a SaaS model.

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) 205-6705 (U.S. and Canada) or (913) 312-0726 (International), participant passcode 9783896. The conference call will simultaneously be webcast. Please visit 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, free cash flow and organic growth. Management defines "free cash flow" as net cash provided by operating activities from continuing operations, less capital expenditures. 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 leading global provider of collaboration software and services for over 20 years. PGi's cloud-based software applications empower business users to connect, collaborate and share ideas and information from their desktop, tablet or smartphone, enabling greater productivity in the office or on the go. PGi has a global presence in 25 countries, and its award-winning solutions provide a collaborative advantage to over 45,000 enterprise customers, including 75% of the Fortune 100™. In the last five years, PGi has hosted more than 1.1 billion people from 137 countries in over 250 million virtual meetings. For more information, visit PGi at 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, many of which are beyond our control. 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 PGi'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 PGi's SaaS products, including iMeet® and GlobalMeet®; our ability to attract new customers and to retain and further penetrate our existing customers; our ability to establish and maintain strategic reseller and distribution relationships; risks associated with challenging global economic conditions; price increases from our telecommunications service providers; service interruptions and network downtime, including undetected errors or defects in our software; technological obsolescence and our ability to upgrade our equipment or increase our network capacity; concerns regarding the security and privacy of our customers' confidential information; future write-downs of goodwill or other intangible assets; greater than anticipated tax and regulatory liabilities; restructuring and cost reduction initiatives and the market reaction thereto; our level of indebtedness; risks associated with acquisitions and divestitures; indemnification claims from 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 made 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, 2013. All forward-looking statements attributable to us or a person acting on our behalf are expressly qualified in their entirety by this cautionary statement. We do not undertake any obligation to update or to release publicly any revisions to forward-looking statements contained in this press release to reflect events or circumstances occurring after the date of this press release or the date of the statement, if a different date, or to reflect the occurrence of unanticipated events.

PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share data)



























 Three Months Ended  


 Six Months Ended  





 June 30, 


 June 30, 





2014


2013


2014


2013























Net revenues

$ 144,287


$ 132,178


$ 287,526


$ 261,670

Operating expenses: 









Cost of revenues (exclusive of depreciation and amortization shown

  separately below)









59,001


56,856


118,543


112,363


Selling and marketing

37,593


34,382


75,429


68,545


General and administrative (exclusive of expenses
 
shown separately below)

19,070


16,186


37,005


31,679


Research and development

4,616


3,831


9,121


7,554


Excise and sales tax expense

-


77


-


77


Depreciation

8,885


8,331


17,551


16,570


Amortization

2,484


392


4,967


854


Restructuring costs

-


131


-


201


Asset impairments

-


54


-


198


Net legal settlements and related expenses

-


220


-


313


Acquisition-related costs

1,786


212


3,691


239



Total operating expenses

133,435


120,672


266,307


238,593











Operating income

10,852


11,506


21,219


23,077











Other (expense) income:









Interest expense

(2,385)


(1,527)


(4,485)


(3,328)


Interest income

11


50


20


71


Other, net

(36)


188


255


218



Total other expense

(2,410)


(1,289)


(4,210)


(3,039)











Income from continuing operations before income taxes

8,442


10,217


17,009


20,038

Income tax expense

2,309


2,109


5,606


4,749

Net income from continuing operations

6,133


8,108


11,403


15,289











Loss from discontinued operations, net of taxes

(118)


(133)


(183)


(236)











Net income

$     6,015


$     7,975


$   11,220


$   15,053











BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING

45,859


46,204


46,121


46,146











Basic net income (loss) per share (1)









Continuing operations

$       0.13


$       0.18


$       0.25


$       0.33


Discontinued operations

-


-


-


(0.01)


Net income per share

$       0.13


$       0.17


$       0.24


$       0.33











DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING

46,550


46,720


46,784


46,618











Diluted net income (loss) per share









Continuing operations

$       0.13


$       0.17


$       0.24


$       0.33


Discontinued operations

-


-


-


(0.01)


Net income per share

$       0.13


$       0.17


$       0.24


$       0.32











(1)

Column totals may not sum due to the effect of rounding on EPS.















 

 


PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands, except per share data)
















June 30, 


December 31, 




2014


2013







ASSETS




CURRENT ASSETS





Cash and equivalents

$          31,926


$           44,955


Accounts receivable (less allowances of $768 and $760, respectively)

88,465


78,481


Prepaid expenses and other current assets

15,895


22,645


Income taxes receivable

3,712


2,316


Deferred income taxes, net

692


4,390



Total current assets

140,690


152,787







PROPERTY AND EQUIPMENT, NET

105,894


105,724







OTHER ASSETS





Goodwill

341,524


341,382


Intangibles, net of amortization

75,041


78,637


Deferred income taxes, net

2,403


1,957


Other assets

17,382


17,621



TOTAL ASSETS

$        682,934


$          698,108







LIABILITIES AND SHAREHOLDERS' EQUITY




CURRENT LIABILITIES





Accounts payable

$         62,554


$            51,994


Income taxes payable

2,423


2,648


Accrued taxes, other than income taxes

9,271


11,190


Accrued expenses

34,348


34,402


Current maturities of long-term debt and capital lease obligations 

1,821


1,719


Accrued restructuring costs

544


2,104


Deferred income taxes, net

28


171



Total current liabilities

110,989


104,228







LONG-TERM LIABILITIES





Long-term debt and capital lease obligations 

251,937


272,467


Accrued restructuring costs

-


77


Accrued expenses

29,587


29,570


Deferred income taxes, net

19,334


18,881



Total long-term liabilities

300,858


320,995







SHAREHOLDERS' EQUITY





Common stock, $0.01 par value; 150,000,000 shares authorized,





47,375,315 and 48,338,335 shares issued and outstanding, respectively

479


483


Additional paid-in capital

444,691


457,913


Accumulated other comprehensive gain

11,377


11,169


Accumulated deficit

(185,460)


(196,680)



Total shareholders' equity

271,087


272,885



TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$        682,934


$          698,108







 

 

PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (Unaudited, in thousands)































Six Months Ended









June 30, 









2014


2013












CASH FLOWS FROM OPERATING ACTIVITIES









Net income 




$ 11,220


$ 15,053



Loss from discontinued operations, net of taxes




183


236




 Net income from continuing operations 




11,403


15,289


Adjustments to reconcile net income to net cash provided by operating activities:








Depreciation




17,551


16,570



Amortization




4,967


854



Amortization of debt issuance costs 




322


296



Net legal settlements and related expenses




-


313



Payments for legal settlements and related expenses




-


(91)



Deferred income taxes




908


1,741



Restructuring costs




-


201



Payments for restructuring costs 




(1,659)


(922)



Asset impairments




-


198



Equity-based compensation




4,884


3,636



Excess tax benefits from share-based payment arrangements




(395)


(358)



Provision for doubtful accounts




362


360



Acquisition-related costs




3,691


-



Cash paid for acquisition-related costs




(3,779)


-



Changes in working capital




812


(8,189)





Net cash provided by operating activities from continuing operations



39,067


29,898





Net cash used in operating activities from discontinued operations



(165)


(257)





Net cash provided by operating activities




38,902


29,641












CASH FLOWS FROM INVESTING ACTIVITIES









Capital expenditures




(15,520)


(17,307)



Other investing activities, net




2,052


(625)



Business acquisitions, net of cash acquired 




66


-





Net cash used in investing activities from continuing operations



(13,402)


(17,932)





Net cash used in investing activities from discontinued operations



-


-





Net cash used in investing activities




(13,402)


(17,932)























CASH FLOWS FROM FINANCING ACTIVITIES









Principal payments under borrowing arrangements




(83,447)


(31,164)



Proceeds from borrowing arrangements




62,000


26,000



Excess tax benefits of share-based payment arrangements




395


358



Purchases and retirement of treasury stock, at cost




(18,988)


(1,758)



Exercise of stock options




963


-





Net cash used in financing activities from continuing operations



(39,077)


(6,564)





Net cash used in financing activities from discontinued operations



-


-





Net cash used in financing activities




(39,077)


(6,564)












Effect of exchange rate changes on cash and equivalents




548


(830)












NET (DECREASE) INCREASE IN CASH AND EQUIVALENTS




(13,029)


4,315

CASH AND EQUIVALENTS, beginning of period




44,955


20,976

CASH AND EQUIVALENTS, end of period




$ 31,926


$ 25,291













 


 

 


PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Unaudited, in thousands, except per share data)















Three Months Ended 


Six Months Ended 



June 30,


June 30,



2014


2013


2014


2013






Non-GAAP Operating Income (1)









Operating income, as reported 

$ 10,852


$ 11,506


$ 21,219


$ 23,077


Restructuring costs 

-


131


-


201


Excise and sales tax expense

-


77


-


77


Asset impairments

-


54


-


198


Net legal settlements and related expenses

-


220


-


313


Acquisition-related costs

1,786


212


3,691


239


Equity-based compensation

2,657


1,962


4,884


3,636


Amortization


2,484


392


4,967


854


    Non-GAAP operating income

$ 17,779


$ 14,554


$ 34,761


$ 28,595











Non-GAAP Net Income from Continuing Operations (1)









Net income from continuing operations, as reported

$   6,133


$  8,108


$ 11,403


$ 15,289


Elimination of non-recurring tax adjustments and related interest

(167)


(905)


474


(1,162)


Restructuring costs

-


92


-


142


Excise and sales tax expense

-


54


-


54


Asset impairments

-


38


-


140


Net legal settlements and related expenses

-


155


-


221


Acquisition-related costs

1,232


149


2,547


168


Equity-based compensation

1,833


1,383


3,370


2,563


Amortization

1,714


276


3,427


602


    Non-GAAP net income from continuing operations

$ 10,745


$   9,350


$ 21,221


$ 18,017










Non-GAAP Diluted EPS from Continuing Operations (1) (2)









Diluted net income per share from continuing operations, as reported

$     0.13


$     0.17


$     0.24


$     0.33


Elimination of non-recurring tax adjustments and related interest

-


(0.02)


0.01


(0.02)


Restructuring costs

-


-


-


-


Excise and sales tax expense

-


-


-


-


Asset impairments

-


-


-


-


Net legal settlements and related expenses

-


-


-


-


Acquisition-related costs

0.03


-


0.05


-


Equity-based compensation

0.04


0.03


0.07


0.05


Amortization

0.04


0.01


0.07


0.01


    Non-GAAP diluted EPS from continuing operations

$     0.23


$     0.20


$     0.45


$     0.39



















(1)

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 well as non-recurring items that are unrelated to the company's ongoing operations, including non-recurring tax adjustments and related interest, restructuring costs, excise and sales tax expense, asset impairments, net legal settlements and related expenses and acquisition-related costs. 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













Q2 - 14
(Constant
currency)


fluctuations in
foreign currency
exchange rates


Q2 - 14
(Actual)











(Unaudited, in thousands, except per share data)























Net Revenues

$  143,185


$               1,102


$  144,287








North America Net Revenue

$    89,645


$                (253)


$    89,392








Europe Net Revenue

$    36,646


$               1,643


$    38,289








Asia Pacific Net Revenue

$    16,894


$                (288)


$    16,606








Non-GAAP Operating Income

$    17,534


$                  245


$    17,779








Non-GAAP Net Income from Continuing Operations

$    10,803


$                  (58)


$    10,745








Non-GAAP Diluted EPS from Continuing Operations

$        0.23


$                      -


$        0.23






















(3)

Management also presents the non-GAAP financial measures 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 (Q2 - 13) average exchange rates.































Sequential Quarter Constant Currency Adjustments (4)




























Impact of 













Q2 - 14
(Constant
currency)


fluctuations in
foreign currency
exchange rates


Q2 - 14
(Actual)











(Unaudited, in thousands)
























Net Revenues

$  143,785


$                  502


$ 144,287






















(4)

Management also presents net revenues on a constant currency 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 (Q1 - 14) average exchange rates.


















Organic Growth (5)













































Impact of













June 30,
2013


fluctuations in
foreign currency
exchange rates


Acquisitions


Organic net
revenue
growth


June 30,
2014


Organic net
revenue
growth rate





(Unaudited, in thousands, except percentages)



















Net Revenues, Three Months Ended

$  132,178


$                  548


$    16,689


$    (5,128)


$ 144,287


-3.9%


 Net Revenues, Six Months Ended

$  261,670


$                    (9)


$    33,598


$    (7,733)


$ 287,526


-3.0%
















(5)

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 the company's ongoing core operations or underlying growth, such as acquisitions. 


Media and Investor Contact:
Sean O'Brien
(404) 262-8462
sean.obrien@pgi.com

PGi has been a global leader in collaboration and virtual meetings for over 20 years. PGi's cloud-based solutions deliver multi-point, real-time virtual collaboration using video, voice, mobile, web streaming and file sharing technologies.

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