Premiere Global Services Reports Third Quarter Revenues of $121M and $0.15 Diluted EPS from Continuing Operations, Excluding Restructuring Charge
Company Provides 2006 Financial Outlook
ATLANTA, GA, October 25, 2005 -
Premiere Global Services, Inc. (NYSE: PGI), a global outsource provider of business process solutions, today announced results for the third quarter ended September 30, 2005. Revenues were $120.9 million, up 5.0% from $115.2 million in the third quarter of 2004. Excluding a $2.7 million pre-tax restructuring charge, normalized operating income totaled $19.8 million, normalized income from continuing operations totaled $11.2 million and normalized diluted EPS from continuing operations totaled $0.15.* Including this pre-tax restructuring charge, operating income totaled $17.1 million, income from continuing operations totaled $9.5 million and diluted EPS from continuing operations totaled $0.13.
In the third quarter of 2004, operating income totaled $18.9 million, income from continuing operations totaled $14.9 million and diluted EPS from continuing operations totaled $0.21. Normalized operating income totaled $18.9 million, normalized income from continuing operations totaled $11.5 million and normalized diluted EPS from continuing operations was $0.16 in the third quarter of 2004.*
Third Quarter Revenue Detail
Conferencing & Collaboration revenue totaled $62.1 million, up 15.4% from $53.8 million in the comparable prior year quarter. As expected, revenue from the Company’s largest customer declined by $7.3 million dollars, totaling $4.7 million versus $12.0 million in the third quarter of 2004. Excluding revenue contribution from this customer in both quarters, Conferencing & Collaboration revenue increased 37.3% in the third quarter of 2005 versus the third quarter of 2004.*
Data Communications revenue totaled $58.9 million, down 4.3% from $61.5 million in the comparable prior year quarter. Revenue from legacy broadcast fax services declined $4.2 million dollars, totaling $28.1 million versus $32.3 million in the third quarter of 2004. Excluding revenue contribution from legacy broadcast fax services in both quarters, Data Communications revenue increased 5.3% in the third quarter of 2005 versus the third quarter of 2004.*
Nine Month Results
Revenues totaled $380.3 million for the nine months ended September 30, 2005, up 14.5% from $332.1 million in the comparable prior year period. Excluding pre-tax restructuring charges of $3.3 million, normalized operating income totaled $66.0 million, normalized income from continuing operations totaled $38.1 million and normalized diluted EPS from continuing operations totaled $0.53.* Including these pre-tax restructuring charges, operating income totaled $62.8 million, income from continuing operations totaled $36.1 million and diluted EPS from continuing operations totaled $0.50.
In the first nine months of 2004, operating income was $52.2 million, income from continuing operations was $23.6 million and diluted EPS from continuing operations was $0.35. In the first nine months of 2004, normalized operating income was $52.2 million, normalized income from continuing operations was $32.0 million and normalized diluted EPS from continuing operations was $0.45.*
The following statements are based on Premiere Global Services' current expectations as of October 25, 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 projects that revenues and diluted EPS from continuing operations in 2005 will be within its previous guidance of $494 to $498 million and $0.66 to $0.67, respectively, excluding pre-tax restructuring charges of $3.3 million during the year.
Revenues in 2006 are projected to be in the range of $480 million to $500 million. The Company expects that its core services will continue to grow in 2006 and beyond. However, anticipated growth in core services next year will largely be offset by a projected decline in revenue from the Company's legacy broadcast fax business of approximately $20 million and a projected decline in revenue from its largest customer of approximately $20 million during the year.
The Company projects that cash flows from operating activities will be in the range of $90 to $95 and capital expenditures will total approximately $26 million in 2006. The Company expects free cash flow in 2006 will be in the range of $64 to $69 million, or $0.88 to $0.95 per share.* Cash taxes paid in 2006 are expected to equal the Company's effective tax rate of 37% to 38% due the expiration of its domestic net operating loss carry-forwards.
Excluding equity based compensation and amortization, pro forma diluted EPS from continuing operations in 2006 is expected to be in the range of $0.77 to $0.82.* GAAP diluted EPS from continuing operations in 2006 is projected to be in the range of $0.58 to $0.63, including equity based compensation of approximately $10.7 million, which includes an estimate for the expensing of stock options as required under SFAS 123(R).
"I am excited about the momentum in our core services of Conferencing & Collaboration, Document Management, Notifications Management and Marketing Automation," said Boland T. Jones, Founder, Chairman and CEO of Premiere Global Services, Inc. "Our profile in the market and value to our customers has increased dramatically this year with the introduction of a number of communication technologies-based solutions aimed at simplifying business processes.
Despite significant operational accomplishments, we believe our stock remains undervalued, which is why we repurchased nearly 800,000 shares of our common stock in the open market during the third quarter. We plan to continue to use our cash flow and liquidity to retire additional shares in the future. In addition, our Company has historically generated significant returns on invested capital, and we plan to continue to reinvest for growth by further consolidating the industries in which we compete.
Looking ahead, we believe our core solutions, coupled with innovation, will generate solid, consistent organic growth that will more than overcome the expected revenue decline from our largest conferencing customer and our legacy broadcast fax business. To that end, our focus in the year ahead will be to continue to improve our customer experience by automating more of our service delivery and to constantly improve the effectiveness of our global selling efforts. We believe the benefits of our development efforts will be improved operating efficiencies and that our sales productivity initiatives will increase revenue growth and lower overall selling and marketing expenses over time.
I strongly believe that our Company has the people, platform, solutions, distribution and operating initiatives in place to become more valuable to our customers and shareholders."
*To supplement the Company's consolidated financial statements presented in accordance with GAAP, we have included the following non-GAAP measures of financial performance: normalized operating income, normalized income from continuing operations, normalized diluted EPS from continuing operations, proforma diluted EPS from continuing operations and free cash flow. 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. In addition, we present certain business segment revenue growth statistics that are derived from non-GAAP financial measures. 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.
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) 565-5442 (US & Canada) or (913) 312-1298 (International). The conference call will be simultaneously broadcast over the Internet via SoundCast®, 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 November 4, 2005, and can be accessed by calling (888) 203-1112 (US & Canada) or (719) 457-0820 (International). The confirmation code is 2057724. 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., is a leading global provider of innovative business communications and data services. Customers use our ASP platform to conduct traditional and VoIP-based collaboration sessions and to process and deliver large quantities of individualized, business critical information. Premiere Global offers outsourced document delivery, data capture, alerts/notifications and campaign management solutions that automate customers' business processes and improve efficiency levels enterprise-wide. We also offer a full suite of conferencing solutions, including automated, operator-assisted and Web collaboration services that enable customers to communicate real-time via our advanced, open standards global conferencing platform.
Premiere Global serves more than 46,000 corporate accounts in nearly every business sector, throughout 18 countries worldwide. Our corporate headquarters is located at 3399 Peachtree Road NE, Suite 700, Atlanta, GA 30326. Additional information can be found at www.pgi.com.
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Forward-looking and cautionary statements
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; continued weakness in our legacy broadcast fax business; foreign currency exchange rates; possible adverse results of pending or future litigation or infringement claims; federal or state 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.