Premiere Global Services Reports Second Quarter Results; $125.6M in Revenues; $0.13 Normalized Diluted EPS from Continuing Operations(a); $0.18 Pro Forma Diluted EPS from Continuing Operations(a).ATLANTA Atlanta (ətlăn`tə, ăt–), city (1990 pop. 394,017), state capital and seat of Fulton co., NW Ga., on the Chattahoochee R. and Peachtree Creek, near the Appalachian foothills; inc. 1847. -- Premiere Global Services, Inc. (NYSE NYSE See: New York Stock Exchange : PGI PGI Protected Geographical Indication PGI Progiciel de Gestion Intégré (French: Enterprise Resource Planning) PGI Phosphoglucose Isomerase PGI Polish Geological Institute (Warsaw, Poland) ), a global outsource outsource verb To assign specific work to a 3rd party for a specific length of time at an set price and service level Managed care To use outside labor to perform functions–billing and collections, accounting, janitorial services, ER provider of business process solutions, today announced results for the second quarter of 2006. Revenues Revenues in the second quarter of 2006 were $125.6 million compared to $132.1 million in the second quarter of 2005. Excluding revenue contributions from the Company's largest conferencing See teleconferencing. customer and its legacy broadcast fax business in both periods, revenues increased 7.4%.(a) Conferencing & Collaboration Working together on a project. See collaborative software. revenue totaled $68.6 million compared to $66.6 million in the comparable prior year quarter. Excluding revenue contribution from the Company's largest customer in both quarters, Conferencing & Collaboration revenue increased 16.1% in the second quarter of 2006 versus the second quarter of 2005.(a) Data Communications data communications, application of telecommunications technology to the problem of transmitting data, especially to, from, or between computers. In popular usage, it is said that data communications make it possible for one computer to "talk" with another. revenue totaled $57.0 million compared to $65.5 million in the comparable prior year quarter. Revenue from legacy broadcast fax services declined $6.1 million dollars, totaling $25.3 million versus $31.4 million in the second quarter of 2005. Normalized Earnings Normalized Earnings 1. Earnings adjusted for cyclical ups and downs in the economy. 2. On the balance sheet, earnings adjusted to remove unusual or one-time influences. Notes: An example would be removing a land sale in which a large capital gain was realized. Excluding restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs, normalized operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. totaled $15.9 million, and excluding restructuring costs and the elimination of a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. state income tax adjustment, normalized income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the totaled $8.8 million and normalized diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. from continuing operations was $0.13 in the second quarter of 2006, versus $23.4 million, $13.6 million and $0.19, respectively, in the second quarter of 2005.(a) Pro Forma Earnings pro forma earnings Income not necessarily calculated in accordance with generally accepted accounting principles. For example, a company might report pro forma earnings that exclude depreciation expense and nonrecurring expenses such as restructuring costs. In the second quarter of 2006, excluding restructuring costs, the elimination of a one-time state income tax adjustment, equity based compensation and amortization charges, pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma diluted EPS from continuing operations totaled $0.18.(a) GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). Earnings In the second quarter of 2006 in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP, operating income totaled $13.8 million, income from continuing operations totaled $6.0 million and diluted EPS from continuing operations totaled $0.09, compared to $23.3 million, $13.5 million and $0.19, respectively, in the second quarter of 2005. Second Quarter 2006 Accomplishments --Generated record daily and quarterly conferencing volumes --Grew revenue from DocuManager IP fax services by greater than 36% from the second quarter of 2005 --Grew revenue from Marketing Automation services by greater than 120% year-over-year --Repurchased nearly 2.4 million shares of common stock in the open market --Secured new Board-authorized share repurchase plan share repurchase plan A corporation's plan for buying back a predetermined number of its own shares in the open market. Institution of a share repurchase plan derives from management's view that the company has limited outside investment opportunities and for up to 7 million shares, approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 10% of total shares outstanding --Expanded bank revolving line of credit Revolving line of credit A bank line of credit on which the customer pays a commitment fee and can take and repay funds at will. Normally a revolving LOC involves a firm commitment from the bank for a period of several years. limit to $300 million from $180 million "We are pleased with our revenue performance during the second quarter and believe we are well on our way to delivering the kind of steady, quarterly revenue growth we are committed to in 2007 and beyond," said Boland T. Jones, Founder, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Premiere Global Services, Inc. "We are continuing to evolve Evolve may refer to several terms:
intr.v. col·lab·o·rat·ed, col·lab·o·rat·ing, col·lab·o·rates 1. To work together, especially in a joint intellectual effort. 2. framework necessary to take our Company from good to great." Six Month Results Revenues for the six months ended June June: see month. 30, 2006 were $247.3 million, down 4.6% compared to $259.3 million in the six months ended June 30, 2005. Excluding restructuring costs, normalized operating income totaled $30.9 million, and excluding restructuring costs and the elimination of a one-time state income tax adjustment, normalized income from continuing operations totaled $17.1 million and normalized diluted EPS from continuing operations was $0.24 in the first half of 2006, versus $46.2 million, $26.9 million and $0.37, respectively, in the first half of 2005.(a) In the first half of 2006, excluding restructuring costs, the elimination of a one-time state income tax adjustment, equity based compensation and amortization charges, pro forma diluted EPS from continuing operations totaled $0.34.(a) In the first six months of 2006 in accordance with GAAP, operating income totaled $27.8 million, income from continuing operations totaled $13.7 million and diluted EPS from continuing operations totaled $0.19, versus $45.7 million, $26.6 million and $0.37, respectively, in the first six months of 2005. Financial Outlook The following statements and projected non-GAAP financial table are based on Premiere Global Services' current expectations as of July July: see month. 26, 2006. These statements and non-GAAP financial table contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. and Company estimates, 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 confirms its financial outlook for 2006 revenues and projected normalized and pro forma diluted EPS from continuing operations as previously provided in its first quarter earnings release dated April 27, 2006. See the reconciliation of projected non-GAAP financial measures as set forth below:
PREMIERE GLOBAL SERVICES, INC AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES IN FINANCIAL OUTLOOK
(amounts are estimates) (1)
(UNAUDITED)
Year Ended
December 31, 2006 (1)
--------------------------------
(in millions, except per share
data)
Projected normalized diluted EPS from continuing
operations (2)(a)
Projected diluted EPS from continuing operations $0.45 - $0.53
Excluding one-time state income tax adjustment $0.02
Excluding restructuring costs $0.03
---------------
Projected normalized diluted EPS from continuing
operations $0.50 - $0.58
Projected pro forma diluted EPS from continuing
operations (3)(a)
Projected diluted EPS from continuing operations $0.45 - $0.53
Excluding one-time state income tax adjustment $0.02
Excluding restructuring costs $0.03
Excluding non-cash equity based compensation $0.09
Excluding amortization $0.11
---------------
Projected pro forma diluted EPS from continuing
operations $0.70 - $0.78
Projected normalized cash provided by operating activities from
continuing operations (2)(a)
Projected cash provided by operating activities from
continuing operations $78.0 - $85.0
Payments for restructuring costs $2.5
Payments for legal settlements and related expenses $2.5
---------------
Projected normalized cash provided by operating
activities from continuing operations $83.0 - $90.0
A[paragraph] (1) Amounts presented are estimates, and the Company has made a
number of assumptions in preparing our projections, including
assumptions as to the components of these financial metrics.
The reconciliations of projected non-GAAP financial measures
include forward-looking information with respect to the
information identified as a projection. The EPS projections
assume a projected weighed average diluted share count of
approximately 70.5 million shares.
A[paragraph] (2) Management believes that normalized operating income,
normalized income from continuing operations, normalized
diluted EPS from continuing operations and normalized cash
provided by operating activities from continuing operations
provide useful information regarding underlying trends in our
continuing operations by excluding non-recurring items that
are unrelated to our ongoing operations.
A[paragraph] (3) The Company expects equity based compensation expense to be a
recurring cost and presents pro forma diluted EPS from
continuing operations to exclude this item as well as
restructuring costs and amortization expense to eliminate
these significant non-cash charges to earnings to help
investors better understand the operating performance of our
business.
(a) To supplement the Company's consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge presented in accordance with GAAP we have included the following non-GAAP measures of financial performance in this press release: normalized operating income, normalized income from continuing operations, normalized diluted EPS from continuing operations, pro forma diluted EPS from continuing operations and normalized cash provided by operating activities from continuing operations. 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 consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: and business segment revenue growth statistics that are derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from non-GAAP financial measures. Please see the tables 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 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 Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of ) or (913) 312-1298 (International). The conference call will be simultaneously si·mul·ta·ne·ous adj. 1. Happening, existing, or done at the same time. See Synonyms at contemporary. 2. Mathematics broadcast over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the via SoundCast(R), 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, podcast (iPOD broadCAST) An audio broadcast that has been converted to an MP3 file or other audio file format for playback in a digital music player or computer. The "pod" in podcast was coined from "iPod," the predominant portable, digital music player, and although podcasts are 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 August 4, 2006, and can be accessed by calling (888) 203-1112 (US & Canada) or (719) 457-0820 (International). The confirmation code is 6938514. 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. is a global outsource provider of business process solutions that enable enterprise customers to automate To turn a set of manual steps into an operation that goes by itself. See automation. and simplify their critical business processes and to communicate more effectively with their constituents. We innovate in·no·vate v. in·no·vat·ed, in·no·vat·ing, in·no·vates v.tr. To begin or introduce (something new) for or as if for the first time. v.intr. To begin or introduce something new. communication technologies and deliver solutions in four core business practices: Conferencing Solutions, Document Solutions, Marketing Automation Solutions and Alerts & Notifications Solutions. We deliver these solutions via our global, on-demand On-Demand refers to a service or feature which addresses the user's need for instant gratification and immediacy of use. In most cases the value proposition for an on-demand service is wrapped up in the fact that the user or consumer of the service avoids a significant up-front platforms to an established customer base of approximately 60,000 corporate accounts, including a majority of the Fortune 500. Customers apply our solutions in order to increase efficiency, to improve productivity and to raise customer satisfaction levels. With global presence in 19 countries, Premiere Global Services' corporate headquarters is located at 3399 Peachtree Peachtree can be several things:
Statements made in this press release, other than those concerning historical information, should be considered forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. and subject to various risks and uncertainties. Such forward-looking statements are made pursuant to the "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. or infringement The encroachment, breach, or violation of a right, law, regulation, or contract. The term is most frequently used in reference to the invasion of rights secured by Copyright, patent, or trademark. claims; federal or state legislative or regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. 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" section of our Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December December: see month. 31, 2005 and our Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended March 31, 2006. All forward-looking statements attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to us or a person acting on our behalf are expressly qualified in their entirety The whole, in contradistinction to a moiety or part only. When land is conveyed to Husband and Wife, they do not take by moieties, but both are seised of the entirety. by this cautionary statement.
PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 2006 AND 2005
Three Months Ended Six Months Ended
------------------- -------------------
June 30, June 30,
2006 2005 2006 2005
--------- --------- --------- ---------
REVENUES $125,566 $132,053 $247,293 $259,316
OPERATING EXPENSES:
Cost of revenues (exclusive of
depreciation shown separately
below) 49,199 47,637 97,603 93,496
Selling and marketing 33,823 34,010 66,558 66,743
General and administrative 14,852 14,798 28,579 28,438
Research and development 2,844 2,492 5,651 5,059
Depreciation 5,839 6,373 11,766 12,925
Amortization 3,150 3,364 6,246 6,450
Restructuring costs 2,037 126 3,090 541
--------- --------- --------- ---------
Total operating expenses 111,744 108,800 219,493 213,652
OPERATING INCOME 13,822 23,253 27,800 45,664
--------- --------- --------- ---------
OTHER (EXPENSE) INCOME:
Interest expense (2,059) (1,267) (3,902) (2,249)
Interest income 70 108 231 420
Loss on sale of marketable
securities - - - (116)
Other, net 260 (27) 27 66
--------- --------- --------- ---------
Total other (expense) income (1,729) (1,186) (3,644) (1,879)
--------- --------- --------- ---------
INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES 12,093 22,067 24,156 43,785
INCOME TAX EXPENSE 6,087 8,568 10,492 17,167
--------- --------- --------- ---------
INCOME FROM CONTINUING
OPERATIONS $6,006 $13,499 $13,664 $26,618
========= ========= ========= =========
DISCONTINUED OPERATIONS:
(Loss) gain from operations of
Voicecom - (1,952) - (1,952)
Income tax (benefit) expense - (683) - (683)
--------- --------- --------- ---------
(Loss) gain on discontinued
operations - (1,269) - (1,269)
--------- --------- --------- ---------
NET INCOME $6,006 $12,230 $13,664 $25,349
========= ========= ========= =========
BASIC EARNINGS PER SHARE:
Income from continuing
operations $6,006 $13,499 $13,664 $26,618
========= ========= ========= =========
Net income $6,006 $12,230 $13,664 $25,349
========= ========= ========= =========
BASIC WEIGHTED-AVERAGE SHARES
OUTSTANDING: 69,765 70,532 70,114 70,494
========= ========= ========= =========
Basic earnings per share:
Continuing operations $0.09 $0.19 $0.19 $0.38
========= ========= ========= =========
Discontinued operations $- $(0.02) $- $(0.02)
--------- --------- --------- ---------
Net income $0.09 $0.17 $0.19 $0.36
========= ========= ========= =========
DILUTED EARNINGS PER SHARE:
Income from continuing
operations $6,006 $13,499 $13,664 $26,618
--------- --------- --------- ---------
Net income $6,006 $12,230 $13,664 $25,349
--------- --------- --------- ---------
DILUTED WEIGHTED-AVERAGE SHARES
OUTSTANDING: 70,465 72,683 70,859 72,352
========= ========= ========= =========
Diluted earnings per share:
Continuing operations $0.09 $0.19 $0.19 $0.37
========= ========= ========= =========
Discontinued operations $- $(0.02) $- $(0.02)
--------- --------- --------- ---------
Net income $0.09 $0.17 $0.19 $0.35
========= ========= ========= =========
PREMIERE GLOBAL SERVICES, INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2006 AND DECEMBER 31, 2005
(IN THOUSANDS, EXCEPT SHARE DATA)
June 30, Dec. 31,
2006 2005
----------- ---------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and equivalents $21,673 $20,508
Accounts receivable (less allowances of
$5,250 and $7,560, respectively) 87,864 79,417
Prepaid expenses and other current assets 7,901 5,209
Deferred income taxes, net 12,624 12,392
----------- ---------
Total current assets 130,062 117,526
PROPERTY AND EQUIPMENT, NET 82,202 75,742
OTHER ASSETS
Goodwill 272,246 257,565
Intangibles, net of amortization 37,080 39,662
Deferred income taxes, net - 837
Other assets 4,607 3,958
----------- ---------
$526,197 $495,290
=========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $42,522 $37,745
Income taxes payable 4,513 4,394
Accrued taxes 7,837 6,148
Accrued expenses 29,860 34,439
Current maturities of long-term debt and capital
lease obligations 1,087 799
Accrued restructuring costs 3,419 1,800
----------- ---------
Total current liabilities 89,238 85,325
LONG-TERM LIABILITIES
Long-term debt and capital lease obligations 122,925 99,675
Accrued expenses 5,127 6,540
Deferred income taxes, net 191 -
----------- ---------
Total long-term liabilities 128,243 106,215
SHAREHOLDERS' EQUITY
Common stock $0.01 par value; 150,000,000 shares authorized,
71,009,618 and 71,703,933 shares issued and outstanding at
June 30, 2006 and December 31, 2005, respectively 710 717
Additional paid-in capital 690,036 694,304
Unearned restricted stock compensation (20,915) (12,585)
Notes receivable, shareholder (1,950) (1,896)
Cumulative translation adjustment 407 (3,554)
Accumulated deficit (359,572) (373,236)
----------- ---------
Total shareholders' equity 308,716 303,750
----------- ---------
$526,197 $495,290
=========== =========
PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2006 AND 2005
(IN THOUSANDS, UNAUDITED)
Six Months Ended
June 30,
2006 2005
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income 13,664 25,349
Adjustments to reconcile net income to net cash provided by operating
activities:
Loss on discontinued operation - 1,269
Depreciation 11,766 12,925
Amortization 6,246 6,450
Amortization of deferred financing costs 240 224
Loss on sale of marketable securities, available for
sale - 116
Payments for legal settlements and related expenses (1,496) -
Deferred income taxes 65 4,854
Restructuring costs 3,090 541
Payments for restructuring costs (1,821) (599)
Equity based compensation 5,103 3,880
Loss (gain) on disposal of assets 256 (45)
Changes in assets and liabilities:
Accounts receivable, net (6,778) (10,092)
Prepaid expenses and other current assets (954) (1,917)
Accounts payable and accrued expenses 1,855 10,993
-------- --------
Total adjustments 17,572 28,599
-------- --------
Total cash provided by operating activities from
continuing operations 31,236 53,948
-------- --------
Payments for discontinued operations (489) (541)
-------- --------
Net cash provided by operating activities 30,747 53,407
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (18,826) (14,264)
Sale of marketable securities - 755
Purchase of marketable securities - (306)
Business acquisitions, net of cash acquired (15,660) (53,379)
-------- --------
Net cash used in investing activities (34,486) (67,194)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments under borrowing arrangements (37,976) (28,378)
Principal proceeds under borrowing arrangements 60,100 50,700
Payments received on shareholder note - 3,953
Purchase of treasury stock, at cost (19,020) (16,010)
Exercise of stock options 1,309 6,439
-------- --------
Net cash provided by financing activities 4,413 16,704
-------- --------
Effect of exchange rate changes on cash and
equivalents 491 (3,070)
-------- --------
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS 1,165 (153)
-------- --------
CASH AND EQUIVALENTS, beginning of period $20,508 $25,882
-------- --------
CASH AND EQUIVALENTS, end of period $21,673 $25,729
======== ========
PREMIERE GLOBAL SERVICES, INC AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS, UNAUDITED, EXCEPT SHARE DATA)
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
--------- --------- --------- ---------
Segment Revenues Excluding
Certain Items (1)
Revenues, as reported
Conferencing & Collaboration $68,595 $66,567 $135,369 $128,577
Data Communications 56,971 65,518 111,923 130,739
--------- --------- --------- ---------
$125,566 $132,085 $247,292 $259,316
Conferencing & Collaboration $68,595 $66,567 $135,369 $128,577
Excluding largest customer
revenue 2,771 9,894 21,346 21,346
--------- --------- --------- ---------
Conferencing & Collaboration
excluding largest customer
revenue $65,824 $56,673 $114,023 $107,231
--------- --------- --------- ---------
Data Communications $56,971 $65,518 $111,923 $130,739
Excluding legacy broadcast fax
revenue 25,260 31,401 49,933 63,622
--------- --------- --------- ---------
Data Communications excluding
legacy broadcast fax revenue $31,711 $34,117 $61,990 $67,117
--------- --------- --------- ---------
Revenues, as reported $125,566 $132,085 $247,292 $259,316
Excluding Conferencing &
Collaboration largest customer
revenue 2,771 9,894 21,346 21,346
Excluding Data Communications
legacy broadcast fax revenue 25,260 31,401 49,933 63,622
--------- --------- --------- ---------
Revenues excluding certain
items $97,535 $90,790 $176,013 $174,348
--------- --------- --------- ---------
Normalized Operating Income (2)
Operating income, as reported $13,822 $23,253 $27,800 $45,664
Restructuring costs 2,037 126 3,090 541
--------- --------- --------- ---------
Normalized operating income $15,859 $23,379 $30,890 $46,205
--------- --------- --------- ---------
Normalized Income from
Continuing Operations (2)
Income from continuing
operations $6,006 $13,499 $13,664 $26,618
Elimination of one-time state
income tax adjustment 1,510 - 1,510 -
Restructuring costs, net of taxes 1,316 78 1,975 326
--------- --------- --------- ---------
Normalized income from
continuing operations $8,832 $13,577 $17,149 $26,944
--------- --------- --------- ---------
Normalized Diluted EPS from
Continuing Operations (2)
Diluted EPS from continuing
operations $0.09 $0.19 $0.19 $0.37
Elimination of one-time state
income tax adjustment 0.02 - 0.02 -
Restructuring costs, net of taxes 0.02 0.00 0.03 0.00
--------- --------- --------- ---------
Normalized diluted EPS from
continuing operations $0.13 $0.19 $0.24 $0.37
========= ========= ========= =========
Pro forma Income from
Continuing Operations (3)
Income from continuing
operations $6,006 $13,499 $13,664 $26,618
Elimination of one-time state
income tax adjustment 1,510 - 1,510 -
Restructuring costs, net of
taxes 1,316 78 1,975 326
Equity based compensation, net
of tax 1,768 1,173 3,169 2,375
Amortization, net of tax 1,956 2,059 3,879 3,947
--------- --------- --------- ---------
Pro forma Income from
Continuing Operations $12,556 $16,809 $24,197 $33,266
========= ========= ========= =========
Pro forma Diluted EPS from
Continuing Operations (3)
Diluted EPS from continuing
operations $0.09 $0.19 $0.19 $0.37
Elimination of one-time state
income tax adjustment 0.02 - 0.02 -
Restructuring costs, net of taxes 0.02 0.00 0.03 0.00
Equity based compensation, net
of tax 0.02 0.02 0.04 0.03
Amortization, net of tax 0.03 0.02 0.06 0.06
--------- --------- --------- ---------
Pro forma Diluted EPS from
Continuing Operations $0.18 $0.23 $0.34 $0.46
========= ========= ========= =========
Normalized cash provided by operating activities
from continuing operations (2)
Total cash provided by
operating activities from
continuing operations $14,393 $32,902 $31,236 $53,948
Payments for restructuring
costs 1,101 322 1,821 599
Payments for legal settlements
and related expenses 124 - 1,496 -
--------- --------- --------- ---------
Normalized cash provided by
operating activities from
continuing operations $15,618 $33,224 $34,553 $54,547
--------- --------- --------- ---------
A[paragraph] (1) The Company has previously announced Conferencing &
Collaboration's largest customer's intention to insource most
of its automated conferencing needs, as well as the
acceleration in the decline of revenue generated by Data
Communications legacy broadcast fax business. Management has
presented consolidated and business segment revenue excluding
these items because management believes that these events or
trends particular to each business segment may be deemed to be
so significant to obscure patterns and trends of our core
business in total.
A[paragraph] (2) Management believes that normalized operating income,
normalized income from continuing operations, normalized
diluted EPS from continuing operations and normalized cash
provided by operating activities from continuing operations
provide useful information regarding underlying trends in our
continuing operations.
A[paragraph] (3) Management expects equity based compensation expense to be a
recurring cost and presents pro forma diluted EPS from
continuing operations to exclude this item as well as one-time
state income tax adjustment, restructuring costs and
amortization expense to eliminate these significant non-cash
charges to earnings to help investors better understand the
operating performance of our business.
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