UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM 8-K
CURRENT
REPORT Pursuant
to
Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of report (Date of earliest event reported): February 17, 2015
PREMIERE
GLOBAL SERVICES, INC.
(Exact Name of Registrant as Specified in Its
Charter)
GEORGIA
(State
or Other Jurisdiction of Incorporation)
001-13577 |
59-3074176 |
(Commission File Number) |
(IRS Employer Identification No.) |
3280 Peachtree Road, NE, Suite 1000, Atlanta, Georgia 30305 |
(Address of Principal Executive Offices) |
(Zip Code) |
404-262-8400
(Registrant’s
Telephone Number, Including Area Code)
(Former
Name or Former Address, if Changed Since Last Report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2. below):
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On February 17, 2015,
Premiere Global Services, Inc., or PGi, issued a press release reporting its financial results for the quarter and year ended December
31, 2014. The press release also reaffirms PGi’s financial outlook for 2015. A copy of the press release is attached as Exhibit
99.1 to this current report on Form 8-K and is incorporated herein by reference.
In accordance with General
Instruction B.2 of Form 8-K, the information included or incorporated in Item 2.02 of this current report, including Exhibit 99.1,
is being furnished to the Securities and Exchange Commission and shall not be deemed “filed” for purposes of Section
18 of the Securities and Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under
the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
99.1 |
Press Release dated February 17, 2015. |
SIGNATURE
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
|
PREMIERE GLOBAL SERVICES, INC. |
|
|
|
Date: February 17, 2015 |
By: |
/s/ David E. Trine |
|
|
David E. Trine |
|
|
Chief Financial Officer |
|
|
(principal financial and accounting officer) |
EXHIBIT 99.1
|
|
Media and Investor Contact: |
|
Sean O’Brien |
|
(404) 262-8462 |
|
sean.obrien@pgi.com |
|
PGi Strategic Transition Continues to
Accelerate:
SaaS Revenue Up 58% in 2014 to Over 12% of Fourth Quarter Net Revenue;
2014 Normalized Free Cash Flow Per Share Grows to $1.15*
4Q14 Results: Non-GAAP Revenue $139.6M*, Non-GAAP Diluted EPS from Continuing Ops $0.22*; Company Reiterates 2015 Financial
Outlook
ATLANTA – February 17, 2015 – Premiere
Global Services, Inc. (NYSE: PGI), the world’s largest pure-play provider of collaboration software and
services, today announced final results for the fourth quarter and fiscal year ended December 31, 2014.
Fourth Quarter 2014 Financial Results
In the fourth quarter of 2014, net revenue increased to $139.2
million, compared to $134.6 million in the fourth quarter of 2013. Non-GAAP revenue totaled $139.6 million* in the fourth quarter
of 2014. SaaS revenue grew 79% year-over-year, totaling $17.4 million in the fourth quarter of 2014, compared to $9.7 million in
the fourth quarter of 2013. Diluted EPS from continuing operations was $0.07 in the fourth quarter of 2014, compared to diluted
EPS from continuing operations of $(0.03) in the fourth quarter of 2013. Non-GAAP diluted EPS from continuing operations was $0.22*
in the fourth quarter of 2014, compared to non-GAAP diluted EPS from continuing operations of $0.20* in the fourth quarter of 2013.
Fourth
Quarter 2014 Results*
($ in millions, except per share data) |
|
4Q13 |
|
|
4Q14 |
|
|
Constant
Currency ** |
|
|
Adjusted
Growth ** |
|
Non-GAAP revenue |
|
$ |
134.6 |
|
|
$ |
139.6 |
|
|
$ |
142.2 |
|
|
|
6 |
% |
SaaS revenue |
|
$ |
9.7 |
|
|
$ |
17.4 |
|
|
$ |
17.7 |
|
|
|
82 |
% |
Gross margin |
|
|
57.3 |
% |
|
|
59.7 |
% |
|
|
59.7 |
% |
|
|
240 |
BPs |
Adjusted EBITDA |
|
$ |
24.1 |
|
|
$ |
24.4 |
|
|
$ |
24.7 |
|
|
|
2 |
% |
Non-GAAP diluted EPS from continuing operations |
|
$ |
0.20 |
|
|
$ |
0.22 |
|
|
$ |
0.22 |
|
|
|
10 |
% |
“We had another strong year of performance in 2014, with
accelerating sales of our next-generation cloud products and increasing momentum in our strategic transition to a SaaS model, while
at the same time generating higher normalized free cash flow of $1.15* per share,” said Boland T. Jones, PGi founder, chairman
and CEO. “We continue to make meaningful enhancements to our collaboration software and services portfolio through both our
internal development and acquisition efforts, which we believe positions us well for growth in 2015 and beyond.”
2014 Financial Results
In 2014, net revenue total $567.1 million, compared to $526.9
million in 2013. Non-GAAP revenue totaled $567.5 million* in 2014. SaaS revenue grew 58% year-over-year, totaling $53.2 million
in 2014, compared to $33.6 million in 2013. Diluted EPS from continuing operations was $0.38 in 2014, compared to diluted EPS from
continuing operations of $0.40 in 2013. Non-GAAP diluted EPS from continuing operations totaled $0.88* in 2014, compared to non-GAAP
diluted EPS from continuing operations of $0.78* in 2013.
2014 Results* ($ in millions, except per share data) | |
2013 | | |
2014 | | |
Constant
Currency
** | | |
Adjusted
Growth ** | |
Non-GAAP revenue | |
$ | 526.9 | | |
$ | 567.5 | | |
$ | 568.7 | | |
| 8 | % |
SaaS revenue | |
$ | 33.6 | | |
$ | 53.2 | | |
$ | 53.0 | | |
| 58 | % |
Gross margin | |
| 57.1 | % | |
| 59.0 | % | |
| 58.9 | % | |
| 180 BPs | |
Adjusted EBITDA | |
$ | 92.5 | | |
$ | 101.6 | | |
$ | 101.4 | | |
| 10 | % |
Non-GAAP diluted EPS from continuing operations | |
$ | 0.78 | | |
$ | 0.88 | | |
$ | 0.88 | | |
| 13 | % |
2015 Financial Outlook
The following statements are based on PGi’s current expectations.
These statements contain forward-looking statements and company estimates and anticipated results, 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 prevailing foreign currency
exchange rates, and assuming no additional acquisitions, PGi continues to anticipate that results in 2015 will be within the following
ranges: non-GAAP revenue is projected to be in the range of $575-$585 million* and non-GAAP diluted EPS from continuing operations
are projected to be in the range of $0.89-$0.92*. These ranges include an estimated negative year-over-year impact from changes
in foreign currency exchange rates of approximately $19 million and $0.03* to non-GAAP revenue and non-GAAP diluted EPS from continuing
operations, respectively. PGi anticipates that its SaaS revenue will increase over 50% in 2015 compared to 2014.
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) 244-2417 (U.S. and Canada) or (913) 312-1446 (International), participant passcode 9632989. 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
The company’s non-GAAP revenue excludes the impact of
purchase accounting adjustments related to deferred revenue. Adjusted EBITDA and non-GAAP diluted earnings per share (EPS) from
continuing operations and projections of these items also exclude equity-based compensation, amortization expenses, non-recurring
tax adjustments and related interest, restructuring costs, excise and sales tax expense and related interest, asset impairments,
net legal settlements and related expenses, acquisition-related costs, foreign exchange transaction gains and losses and the impact
of purchase accounting adjustments related to deferred revenue. Normalized free cash flow is net cash provided by operating activities
from continuing operations before payments for restructuring costs and cash paid for acquisition-related costs less capital expenditures.
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. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are
included in the attached financial tables. 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.
** Constant Currency
These constant currency adjustments convert current period results
using prior period (Q4-13 or FY-2013) average exchange rates calculated in the same manner as in footnote 5 to the Reconciliation
of Non-GAAP Financial Measures table.
About Premiere Global Services, Inc. │ PGi
PGi is the world’s largest pure-play provider of collaboration
software and services. PGi’s unified collaboration platform empowers business users and teams to connect, share ideas and
manage projects with the simplicity and everywhere-access of the latest cloud technologies. PGi has a global presence in 25 countries,
and its award-winning solutions provide a collaborative advantage to nearly 50,000 enterprise customers, including 75% of the
Fortune 100™. In the last five years, PGi has helped over a billion people worldwide connect, collaborate and get work done—in
teams, large groups and one-on-one. 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 | | |
Twelve Months Ended | |
| |
December 31, | | |
December 31, | |
| |
2014 | | |
2013 | | |
2014 | | |
2013 | |
| |
| | |
| | |
| | |
| |
Net revenue | |
$ | 139,162 | | |
$ | 134,625 | | |
$ | 567,071 | | |
$ | 526,865 | |
Operating expenses: | |
| | | |
| | | |
| | | |
| | |
Cost of revenue (exclusive of depreciation and amortization shown separately below) | |
| 56,055 | | |
| 57,428 | | |
| 232,563 | | |
| 225,994 | |
Selling and marketing | |
| 36,956 | | |
| 32,502 | | |
| 149,198 | | |
| 134,426 | |
General and administrative (exclusive of expenses shown separately below) | |
| 19,429 | | |
| 17,935 | | |
| 74,244 | | |
| 65,219 | |
Research and development | |
| 5,712 | | |
| 4,875 | | |
| 20,367 | | |
| 16,574 | |
Depreciation | |
| 8,978 | | |
| 8,729 | | |
| 35,226 | | |
| 33,758 | |
Amortization | |
| 3,686 | | |
| 1,787 | | |
| 11,235 | | |
| 3,496 | |
Excise and sales tax expense | |
| 385 | | |
| 1,891 | | |
| 385 | | |
| 1,969 | |
Restructuring costs | |
| 675 | | |
| 3,065 | | |
| 743 | | |
| 3,506 | |
Asset impairments | |
| 40 | | |
| 980 | | |
| 4,978 | | |
| 1,196 | |
Net legal settlements and related expenses | |
| 8 | | |
| 7 | | |
| 180 | | |
| 598 | |
Acquisition-related costs | |
| 2,324 | | |
| 2,348 | | |
| 8,162 | | |
| 5,392 | |
Total operating expenses | |
| 134,248 | | |
| 131,547 | | |
| 537,281 | | |
| 492,128 | |
| |
| | | |
| | | |
| | | |
| | |
Operating income | |
| 4,914 | | |
| 3,078 | | |
| 29,790 | | |
| 34,737 | |
| |
| | | |
| | | |
| | | |
| | |
Other (expense) income: | |
| | | |
| | | |
| | | |
| | |
Interest expense | |
| (2,760 | ) | |
| (2,225 | ) | |
| (9,378 | ) | |
| (7,152 | ) |
Interest income | |
| 4 | | |
| 24 | | |
| 29 | | |
| 117 | |
Other, net | |
| 302 | | |
| 84 | | |
| 1,298 | | |
| 214 | |
Total other expense, net | |
| (2,454 | ) | |
| (2,117 | ) | |
| (8,051 | ) | |
| (6,821 | ) |
| |
| | | |
| | | |
| | | |
| | |
Income from continuing operations before income taxes | |
| 2,460 | | |
| 961 | | |
| 21,739 | | |
| 27,916 | |
Income tax (benefit) expense | |
| (934 | ) | |
| 2,241 | | |
| 4,296 | | |
| 9,062 | |
Net income (loss) from continuing operations | |
| 3,394 | | |
| (1,280 | ) | |
| 17,443 | | |
| 18,854 | |
| |
| | | |
| | | |
| | | |
| | |
Loss from discontinued operations, net of taxes | |
| (96 | ) | |
| (120 | ) | |
| (379 | ) | |
| (538 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net income (loss) | |
$ | 3,298 | | |
$ | (1,400 | ) | |
$ | 17,064 | | |
$ | 18,316 | |
| |
| | | |
| | | |
| | | |
| | |
BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING | |
| 44,986 | | |
| 46,328 | | |
| 45,593 | | |
| 46,214 | |
| |
| | | |
| | | |
| | | |
| | |
Basic net income (loss) per share (1) | |
| | | |
| | | |
| | | |
| | |
Continuing operations | |
$ | 0.08 | | |
$ | (0.03 | ) | |
$ | 0.38 | | |
$ | 0.41 | |
Discontinued operations | |
| - | | |
| - | | |
| (0.01 | ) | |
| (0.01 | ) |
Net income (loss) per share | |
$ | 0.07 | | |
$ | (0.03 | ) | |
$ | 0.37 | | |
$ | 0.40 | |
| |
| | | |
| | | |
| | | |
| | |
DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING | |
| 45,762 | | |
| 46,328 | | |
| 46,303 | | |
| 46,727 | |
| |
| | | |
| | | |
| | | |
| | |
Diluted net income (loss) per share | |
| | | |
| | | |
| | | |
| | |
Continuing operations | |
$ | 0.07 | | |
$ | (0.03 | ) | |
$ | 0.38 | | |
$ | 0.40 | |
Discontinued operations | |
| - | | |
| - | | |
| (0.01 | ) | |
| (0.01 | ) |
Net income (loss) per share | |
$ | 0.07 | | |
$ | (0.03 | ) | |
$ | 0.37 | | |
$ | 0.39 | |
| (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)
| |
December 31, | | |
December 31, | |
| |
2014 | | |
2013 | |
| |
| | |
| |
ASSETS | |
| | | |
| | |
CURRENT ASSETS | |
| | | |
| | |
Cash and equivalents | |
$ | 40,220 | | |
$ | 44,955 | |
Accounts receivable (less allowances of $557 and $760, respectively) | |
| 77,334 | | |
| 78,481 | |
Prepaid expenses and other current assets | |
| 13,536 | | |
| 22,645 | |
Income taxes receivable | |
| 1,897 | | |
| 2,316 | |
Deferred income taxes, net | |
| 10,518 | | |
| 4,390 | |
Total current assets | |
| 143,505 | | |
| 152,787 | |
| |
| | | |
| | |
PROPERTY AND EQUIPMENT, NET | |
| 100,954 | | |
| 105,724 | |
| |
| | | |
| | |
OTHER ASSETS | |
| | | |
| | |
Goodwill | |
| 386,416 | | |
| 341,382 | |
Intangibles, net of amortization | |
| 102,350 | | |
| 78,637 | |
Deferred income taxes, net | |
| 2,342 | | |
| 1,957 | |
Other assets | |
| 20,734 | | |
| 17,621 | |
TOTAL ASSETS | |
$ | 756,301 | | |
$ | 698,108 | |
| |
| | | |
| | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |
| | | |
| | |
CURRENT LIABILITIES | |
| | | |
| | |
Accounts payable | |
$ | 57,211 | | |
$ | 51,994 | |
Income taxes payable | |
| 2,217 | | |
| 2,648 | |
Accrued taxes, other than income taxes | |
| 17,562 | | |
| 11,190 | |
Accrued expenses | |
| 37,807 | | |
| 34,402 | |
Current maturities of long-term debt and capital lease obligations | |
| 1,971 | | |
| 1,719 | |
Accrued restructuring costs | |
| 958 | | |
| 2,104 | |
Deferred income taxes, net | |
| 17 | | |
| 171 | |
Total current liabilities | |
| 117,743 | | |
| 104,228 | |
| |
| | | |
| | |
LONG-TERM LIABILITIES | |
| | | |
| | |
Long-term debt and capital lease obligations | |
| 332,825 | | |
| 272,467 | |
Accrued restructuring costs | |
| - | | |
| 77 | |
Accrued expenses | |
| 26,906 | | |
| 29,570 | |
Deferred income taxes, net | |
| 23,837 | | |
| 20,790 | |
Total long-term liabilities | |
| 383,568 | | |
| 322,904 | |
| |
| | | |
| | |
SHAREHOLDERS' EQUITY | |
| | | |
| | |
Common stock, $0.01 par value; 150,000,000 shares authorized, 47,378,794 and 48,338,335 shares issued and outstanding, respectively | |
| 475 | | |
| 483 | |
Additional paid-in capital | |
| 442,585 | | |
| 457,913 | |
Accumulated other comprehensive gain (loss) | |
| (6,545 | ) | |
| 11,169 | |
Accumulated deficit | |
| (181,525 | ) | |
| (198,589 | ) |
Total shareholders' equity | |
| 254,990 | | |
| 270,976 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | |
$ | 756,301 | | |
$ | 698,108 | |
PREMIERE GLOBAL SERVICES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
(Unaudited, in thousands)
| |
Twelve Months Ended | |
| |
December 31, | |
| |
2014 | | |
2013 | |
| |
| | |
| |
CASH FLOWS FROM OPERATING ACTIVITIES | |
| | | |
| | |
Net income | |
$ | 17,064 | | |
$ | 18,316 | |
Loss from discontinued operations, net of taxes | |
| 379 | | |
| 538 | |
Net income from continuing operations | |
| 17,443 | | |
| 18,854 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |
| | | |
| | |
Depreciation | |
| 35,226 | | |
| 33,758 | |
Amortization | |
| 11,235 | | |
| 3,496 | |
Amortization of debt issuance costs | |
| 673 | | |
| 611 | |
Net legal settlements and related expenses | |
| 180 | | |
| 598 | |
Payments for legal settlements and related expenses | |
| (249 | ) | |
| (510 | ) |
Deferred income taxes | |
| 1,827 | | |
| 3,068 | |
Restructuring costs | |
| 743 | | |
| 3,506 | |
Payments for restructuring costs | |
| (1,916 | ) | |
| (2,469 | ) |
Asset impairments | |
| 4,978 | | |
| 1,196 | |
Equity-based compensation | |
| 10,460 | | |
| 7,872 | |
Excess tax benefits from share-based payment arrangements | |
| (588 | ) | |
| (525 | ) |
Provision for doubtful accounts | |
| 456 | | |
| 514 | |
Acquisition-related costs | |
| 8,162 | | |
| 5,392 | |
Cash paid for acquisition-related costs | |
| (7,581 | ) | |
| (3,863 | ) |
Changes in working capital, net of business acquisitions | |
| (2,149 | ) | |
| 4,178 | |
Net cash provided by operating activities from continuing operations | |
| 78,900 | | |
| 75,676 | |
Net cash used in operating activities from discontinued operations | |
| (313 | ) | |
| (554 | ) |
Net cash provided by operating activities | |
| 78,587 | | |
| 75,122 | |
| |
| | | |
| | |
CASH FLOWS FROM INVESTING ACTIVITIES | |
| | | |
| | |
Capital expenditures | |
| (35,195 | ) | |
| (31,774 | ) |
Business acquisitions, net of cash acquired | |
| (80,402 | ) | |
| (101,963 | ) |
Other investing activities, net | |
| 1,700 | | |
| (452 | ) |
Net cash used in investing activities from continuing operations | |
| (113,897 | ) | |
| (134,189 | ) |
Net cash used in investing activities from discontinued operations | |
| - | | |
| - | |
Net cash used in investing activities | |
| (113,897 | ) | |
| (134,189 | ) |
| |
| | | |
| | |
| |
| | | |
| | |
CASH FLOWS FROM FINANCING ACTIVITIES | |
| | | |
| | |
Principal payments under borrowing arrangements | |
| (146,040 | ) | |
| (78,847 | ) |
Proceeds from borrowing arrangements | |
| 205,000 | | |
| 166,750 | |
Payments of debt issuance costs | |
| (1,060 | ) | |
| (1,258 | ) |
Excess tax benefits of share-based payment arrangements | |
| 588 | | |
| 525 | |
Purchases and retirement of treasury stock, at cost | |
| (27,138 | ) | |
| (4,066 | ) |
Exercise of stock options | |
| 963 | | |
| - | |
Net cash provided by financing activities from continuing operations | |
| 32,313 | | |
| 83,104 | |
Net cash provided by financing activities from discontinued operations | |
| - | | |
| - | |
Net cash provided by financing activities | |
| 32,313 | | |
| 83,104 | |
| |
| | | |
| | |
Effect of exchange rate changes on cash and equivalents | |
| (1,738 | ) | |
| (58 | ) |
| |
| | | |
| | |
NET (DECREASE) INCREASE IN CASH AND EQUIVALENTS | |
| (4,735 | ) | |
| 23,979 | |
CASH AND EQUIVALENTS, beginning of period | |
| 44,955 | | |
| 20,976 | |
CASH AND EQUIVALENTS, end of period | |
$ | 40,220 | | |
$ | 44,955 | |
PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
(Unaudited, in thousands, except per
share data)
| |
Three Months Ended | | |
Twelve Months Ended | |
| |
December 31, | | |
December 31, | |
| |
2014 | | |
2013 | | |
2014 | | |
2013 | |
Non-GAAP Revenue (1) | |
| | | |
| | | |
| | | |
| | |
Net revenue, as reported | |
$ | 139,162 | | |
$ | 134,625 | | |
$ | 567,071 | | |
$ | 526,865 | |
Impact of purchase accounting adjustments related to deferred revenue (2) | |
| 435 | | |
| - | | |
| 435 | | |
| - | |
Non-GAAP revenue | |
$ | 139,597 | | |
$ | 134,625 | | |
$ | 567,506 | | |
$ | 526,865 | |
| |
| | | |
| | | |
| | | |
| | |
Non-GAAP Operating Income & Adjusted EBITDA (1) | |
| | | |
| | | |
| | | |
| | |
Operating income, as reported | |
$ | 4,914 | | |
$ | 3,078 | | |
$ | 29,790 | | |
$ | 34,737 | |
Impact of purchase accounting adjustments related to deferred revenue (2) | |
| 435 | | |
| - | | |
| 435 | | |
| - | |
Equity-based compensation | |
| 2,916 | | |
| 2,178 | | |
| 10,460 | | |
| 7,872 | |
Amortization | |
| 3,686 | | |
| 1,787 | | |
| 11,235 | | |
| 3,496 | |
Excise and sales tax expense | |
| 385 | | |
| 1,891 | | |
| 385 | | |
| 1,969 | |
Restructuring costs | |
| 675 | | |
| 3,065 | | |
| 743 | | |
| 3,506 | |
Asset impairments | |
| 40 | | |
| 980 | | |
| 4,978 | | |
| 1,196 | |
Net legal settlements and related expenses | |
| 8 | | |
| 7 | | |
| 180 | | |
| 598 | |
Acquisition-related costs | |
| 2,324 | | |
| 2,348 | | |
| 8,162 | | |
| 5,392 | |
Non-GAAP operating income | |
$ | 15,383 | | |
$ | 15,334 | | |
$ | 66,368 | | |
$ | 58,766 | |
Depreciation | |
| 8,978 | | |
| 8,729 | | |
| 35,226 | | |
| 33,758 | |
Adjusted EBITDA | |
$ | 24,361 | | |
$ | 24,063 | | |
$ | 101,594 | | |
$ | 92,524 | |
| |
| | | |
| | | |
| | | |
| | |
Non-GAAP Net Income from Continuing Operations (1) | |
| | | |
| | | |
| | | |
| | |
Net income (loss) from continuing operations, as reported | |
$ | 3,394 | | |
$ | (1,280 | ) | |
$ | 17,443 | | |
$ | 18,854 | |
Impact of purchase accounting adjustments related to deferred revenue (2) | |
| 334 | | |
| - | | |
| 308 | | |
| - | |
Elimination of non-recurring tax adjustments and related interest | |
| (1,426 | ) | |
| 1,939 | | |
| (1,927 | ) | |
| 687 | |
Equity-based compensation | |
| 2,242 | | |
| 1,493 | | |
| 7,400 | | |
| 5,510 | |
Amortization | |
| 2,834 | | |
| 1,225 | | |
| 7,949 | | |
| 2,447 | |
Excise and sales tax expense | |
| 296 | | |
| 1,296 | | |
| 272 | | |
| 1,378 | |
Excise and sales tax interest | |
| - | | |
| 127 | | |
| - | | |
| 130 | |
Restructuring costs | |
| 519 | | |
| 2,101 | | |
| 526 | | |
| 2,454 | |
Asset impairments | |
| 31 | | |
| 672 | | |
| 3,522 | | |
| 837 | |
Net legal settlements and related expenses | |
| 6 | | |
| 5 | | |
| 127 | | |
| 419 | |
Acquisition-related costs | |
| 1,787 | | |
| 1,610 | | |
| 5,775 | | |
| 3,774 | |
Foreign exchange transaction (gain)/loss (3) | |
| (140 | ) | |
| (75 | ) | |
| (490 | ) | |
| (268 | ) |
Non-GAAP net income from continuing operations | |
$ | 9,877 | | |
$ | 9,113 | | |
$ | 40,905 | | |
$ | 36,222 | |
| |
| | | |
| | | |
| | | |
| | |
Non-GAAP Diluted EPS from Continuing Operations (1) (4) | |
| | | |
| | | |
| | | |
| | |
Diluted net income (loss) per share from continuing operations, as reported | |
$ | 0.07 | | |
$ | (0.03 | ) | |
$ | 0.38 | | |
$ | 0.40 | |
Impact of purchase accounting adjustments related to deferred revenue (2) | |
| 0.01 | | |
| - | | |
| 0.01 | | |
| - | |
Elimination of non-recurring tax adjustments and related interest | |
| (0.03 | ) | |
| 0.04 | | |
| (0.04 | ) | |
| 0.01 | |
Equity-based compensation | |
| 0.05 | | |
| 0.03 | | |
| 0.16 | | |
| 0.12 | |
Amortization | |
| 0.06 | | |
| 0.03 | | |
| 0.17 | | |
| 0.05 | |
Excise and sales tax expense | |
| 0.01 | | |
| 0.03 | | |
| 0.01 | | |
| 0.03 | |
Excise and sales tax interest | |
| - | | |
| - | | |
| - | | |
| - | |
Restructuring costs | |
| 0.01 | | |
| 0.04 | | |
| 0.01 | | |
| 0.05 | |
Asset impairments | |
| - | | |
| 0.01 | | |
| 0.08 | | |
| 0.02 | |
Net legal settlements and related expenses | |
| - | | |
| - | | |
| - | | |
| 0.01 | |
Acquisition-related costs | |
| 0.04 | | |
| 0.03 | | |
| 0.12 | | |
| 0.08 | |
Foreign exchange transaction (gain)/loss (3) | |
| - | | |
| - | | |
| (0.01 | ) | |
| (0.01 | ) |
Non-GAAP diluted EPS from continuing operations | |
$ | 0.22 | | |
$ | 0.20 | | |
$ | 0.88 | | |
$ | 0.78 | |
| (1) | Management believes that presenting non-GAAP revenue, non-GAAP
operating income, adjusted EBITDA, 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 operating income, adjusted EBITDA, 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 the impact of purchase accounting
adjustments related to deferred revenue, non-recurring tax adjustments and related interest, excise and sales tax expense, excise
and sales tax interest, restructuring costs, asset impairments, net legal settlements and related expenses, acquisition-related
costs and foreign exchange transaction gains and losses. 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) | Business combination accounting principles require us to
write-down the deferred revenue associated with software licenses and related support contracts assumed in our acquisitions. The
revenue for these support contracts is deferred and typically recognized over a one-year period, so our GAAP revenue for the one-year
period after an acquisition does not reflect the full amount of revenue that would have been reported if the acquired deferred
revenue was not written down to fair value. The non-GAAP adjustment eliminates the effect of the deferred revenue write-down.
We believe this adjustment to the revenue from these contracts is useful to investors as an additional means to reflect revenue
trends of our business. |
| (3) | Represents the impact of foreign exchange transaction gains
and losses included in the Statements of Operations in "Other, net". |
| (4) | 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
(Unaudited, in thousands, except per
share data)
(continued)
Prior Year Quarter Constant Currency Adjustments (5)
| |
| | |
Impact of | | |
| | |
| | |
Impact of | | |
| |
| |
Q4 - 14 (Constant
currency) | | |
fluctuations in foreign
currency exchange rates | | |
Q4 - 14 (Actual) | | |
2014 (Constant
currency) | | |
fluctuations in foreign
currency exchange rates | | |
2014 (Actual) | |
| |
(Unaudited,
in thousands, except per share data) | | |
(Unaudited,
in thousands, except per share data) | |
| |
| | |
| | |
| | |
| | |
| | |
| |
Net Revenue | |
$ | 141,754 | | |
$ | (2,592 | ) | |
$ | 139,162 | | |
$ | 568,227 | | |
$ | (1,156 | ) | |
$ | 567,071 | |
North America Net Revenue | |
$ | 89,050 | | |
$ | (283 | ) | |
$ | 88,767 | | |
$ | 356,845 | | |
$ | (1,049 | ) | |
$ | 355,796 | |
Europe Net Revenue | |
$ | 37,061 | | |
$ | (1,431 | ) | |
$ | 35,630 | | |
$ | 145,001 | | |
$ | 2,127 | | |
$ | 147,128 | |
Asia Pacific Net Revenue | |
$ | 15,643 | | |
$ | (878 | ) | |
$ | 14,765 | | |
$ | 66,381 | | |
$ | (2,234 | ) | |
$ | 64,147 | |
Non-GAAP Operating Income | |
$ | 15,588 | | |
$ | (205 | ) | |
$ | 15,383 | | |
$ | 65,995 | | |
$ | 373 | | |
$ | 66,368 | |
Adjusted EBITDA | |
$ | 24,695 | | |
$ | (334 | ) | |
$ | 24,361 | | |
$ | 101,353 | | |
$ | 241 | | |
$ | 101,594 | |
Non-GAAP Net Income from Continuing Operations | |
$ | 9,965 | | |
$ | (88 | ) | |
$ | 9,877 | | |
$ | 40,429 | | |
$ | 476 | | |
$ | 40,905 | |
Non-GAAP Diluted EPS from Continuing Operations | |
$ | 0.22 | | |
$ | - | | |
$ | 0.22 | | |
$ | 0.88 | | |
$ | - | | |
$ | 0.88 | |
| (5) | Management also presents the non-GAAP financial measures
described under note 1 above, as well as net revenue and segment net revenue, on a constant currency basis compared to the same
period in the previous year (Q4-13 or FY-2013) 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 (Q4-13)
average exchange rates and current year results using prior year (FY-2013) average exchange rates. |
Sequential Quarter Constant Currency Adjustments (6)
| |
| | |
Impact of | | |
| |
| |
Q4 - 14 (Constant currency) | | |
fluctuations in foreign currency exchange rates | | |
Q4 - 14 (Actual) | |
| |
(Unaudited, in thousands) | |
| |
| |
Net Revenue | |
$ | 141,562 | | |
$ | (2,400) | | |
$ | 139,162 | |
| (6) | Management also presents net revenue on a constant currency
basis compared to the prior quarter (Q3-14) 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 (Q3-14)
average exchange rates. |
Organic Growth (7)
| |
| | |
Impact of | | |
| | |
| | |
| | |
| |
| |
December
31, 2013 | | |
fluctuations
in foreign currency exchange rates | | |
Acquisitions | | |
Organic
net revenue growth | | |
December
31, 2014 | | |
Organic
net revenue growth rate | |
| |
(Unaudited, in thousands,
except percentages) | | |
| |
| |
| | |
| | |
| | |
| | |
| | |
| |
Net Revenue, Three Months Ended | |
$ | 134,625 | | |
$ | (2,590 | ) | |
$ | 10,586 | | |
$ | (3,459 | ) | |
$ | 139,162 | | |
| -2.6 | % |
Net Revenue, Twelve Months Ended | |
$ | 526,865 | | |
$ | (2,484 | ) | |
$ | 56,165 | | |
$ | (13,475 | ) | |
$ | 567,071 | | |
| -2.6 | % |
| (7) | 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. |
Normalized Free Cash Flow (8) | |
| | |
| |
| |
| | |
| |
| |
Twelve Months Ended | |
| |
December 31, | |
| |
2014 | | |
2013 | |
Net cash provided by operating activities from continuing operations, as reported | |
$ | 78,900 | | |
$ | 75,676 | |
Plus: Payments for restructuring costs, as reported | |
| 1,916 | | |
| 2,469 | |
Plus: Cash paid for acquisition-related costs, as reported | |
| 7,581 | | |
| 3,863 | |
Less: Capital expenditures, as reported | |
| (35,195 | ) | |
| (31,774 | ) |
Free cash flow | |
$ | 53,202 | | |
$ | 50,234 | |
Free cash flow per share | |
$ | 1.15 | | |
$ | 1.08 | |
| (8) | Management defines "normalized free cash flow"
as net cash provided by operating activities from continuing operations, before the impact of payments for restructuring costs
and cash payments for acquisition-related costs, less capital expenditures. Management believes that this non-GAAP measure provides
a relevant measure of the company's liquidity in evaluating its financial performance and ability to generate cash without additional
external financing in order to repay debt obligations, fund acquisitions and repurchase shares. Management utilizes diluted weighted-average
shares outstanding in calculating free cash flow per share. |