PGI

 

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): October 29, 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 October 29, 2015, Premiere Global Services, Inc., or PGi, issued a press release reporting its financial results for the quarter ended September 30, 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 October 29, 2015.

 

 

Exhibit 99.1

 

 

 

Media and Investor Contact:

Sean O’Brien

(404) 262-8462

sean.obrien@pgi.com

 

PGi Announces Third Quarter 2015 Results:
Non-GAAP Revenue $141.1M*, Non-GAAP Diluted EPS from Continuing Ops $0.23*,
UC&C SaaS Non-GAAP Revenue Up 71% to $89M* Annual Revenue Run-Rate

 

ATLANTA – October 29, 2015 – Premiere Global Services, Inc. (NYSE: PGI), the world’s largest dedicated provider of collaboration software and services, today announced results for the third quarter ended September 30, 2015.

 

In the third quarter of 2015, net revenue totaled $141.0 million, including an estimated negative impact of $6 million from year-over-year changes in foreign currency exchange rates. Non-GAAP revenue totaled $141.1 million* in the third quarter of 2015. Unified communications and collaboration (UC&C) SaaS non-GAAP revenue grew 71%, totaling $22.3 million* in the third quarter of 2015, compared to $13.0 million* in the third quarter of 2014. Diluted EPS from continuing operations was $0.08 in the third quarter of 2015, compared to $0.06 in the third quarter of 2014. Non-GAAP diluted EPS from continuing operations was $0.23* in the third quarter of 2015, compared to non-GAAP diluted EPS from continuing operations of $0.21* in the third quarter of 2014.

 

Third Quarter 2015 Results* ($ in millions, except per share data)		3Q14				3Q15				Constant Currency **				Adjusted Growth **
Non-GAAP revenue		$	140.4			$	141.1			$	146.6				4.4	%
UC&C SaaS non-GAAP revenue		$	13.0			$	22.3			$	23.0				76.6	%
Non-GAAP gross margin			58.7	%			60.1	%			60.0	%			130 BPs
Adjusted EBITDA		$	24.9			$	26.4			$	27.2				9.1	%
Non-GAAP diluted EPS from continuing operations		$	0.21			$	0.23			$	0.24				14.0	%

 

“We are pleased to report our continuing strong strategic and financial performance, with 71% growth in our UC&C SaaS non-GAAP revenue and record incremental annual contract value (ACV) bookings of $7.6 million sold during the third quarter,” said Boland T. Jones, PGi founder, chairman and CEO. “We believe the increase in momentum in our transition to a SaaS model is a result of growing customer demand for our end-to-end suite of iMeet® collaboration applications that help businesses grow, save money and drive productivity.”

 

Nine Month Results
In the first nine months of 2015, net revenue totaled $427.6 million, including an estimated negative impact of $17 million from year-over-year changes in foreign currency exchange rates. Non-GAAP revenue totaled $428.5 million* in the first nine months of 2015. UC&C SaaS non-GAAP revenue grew 73%, totaling $62.0 million* in the first nine months of 2015, compared to $35.8 million* in the first nine months of 2014. Diluted EPS from continuing operations was $0.22 in the first nine months of 2015, compared to $0.30 in the first nine months of 2014. Non-GAAP diluted EPS from continuing operations was $0.72* in the first nine months of 2015, compared to non-GAAP diluted EPS from continuing operations of $0.67* in the first nine months of 2014.

 

 

In light of the proposed acquisition by funds managed or advised by Siris Capital Group, LLC (Siris), PGi will not hold a conference call to discuss third quarter earnings.

 

* Non-GAAP Financial Measures

The company’s non-GAAP revenue, UC&C SaaS non-GAAP revenue and non-GAAP gross margin include the deferred revenue from software licenses and related support contracts from recent acquisitions and 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/divesture-related costs, foreign exchange transaction gains and losses and the impact of purchase accounting adjustments related to deferred revenue. 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 (Q3-14) 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 dedicated provider of collaboration software and services. We created iMeet^®, an expanding portfolio of purpose-built applications designed to meet the daily collaboration and communications needs of business professionals, with solutions for web, video and audio conferencing, smart calendar management, webcasting, project management and sales acceleration. PGi’s award-winning UC&C solutions help nearly 50,000 businesses grow faster and operate more efficiently. To learn more, visit us 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: relevant risks and uncertainties relating to the proposed transaction with Siris, including (i) the risk that the merger agreement may be terminated in circumstances that require PGi to pay Siris a termination fee; (ii) risks related to the diversion of management’s attention from PGi’s ongoing business operations; (iii) risks regarding the failure of Siris to obtain the necessary financing to complete the merger; (iv) the effect of the merger on PGi’s business relationships (including, without limitation, customers, strategic alliance partners and suppliers), operating results and business generally; (v) risks related to satisfying the conditions to the merger, including the failure of PGi’s shareholders to approve the merger, timing (including possible delays) and receipt of regulatory approvals from various governmental entities (including any conditions, limitations or restrictions placed on these approvals); and (vi) the nature, cost and outcome of any future litigation and other legal proceedings, including any potential proceedings related to the proposed merger; competitive pressures, including pricing pressures; technological changes and the development of alternatives to our services; market acceptance of PGi's UC&C SaaS solutions, including our iMeet® and GlobalMeet® solutions; our ability to attract, retain and expand the products and services we provide to existing customers; our ability to establish and maintain strategic reseller and distribution relationships; risks associated with global economic or market 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, 2014. All forward-looking statements attributable to us or a person acting on our behalf are expressly qualified in their entirety by these cautionary statements. We undertake no obligation to publicly update or revise these forward-looking statements for any reason.

 

 

Additional Information and Where to Find It

 

This communication may be deemed to be solicitation material in respect of the proposed merger among PGi, Pangea Private Holdings II, LLC, a Delaware limited liability company (Parent), and Pangea Merger Sub Inc., a Georgia corporation (Merger Sub). Parent and Merger Sub are affiliates of Siris. In connection with the proposed merger, PGi has filed a definitive proxy statement with the Securities and Exchange Commission (SEC) on Schedule 14A on October 26, 2015 and may file other relevant documents concerning the proposed merger. The definitive proxy statement was mailed to shareholders of PGi on or about October 27, 2015. PGi’s SHAREHOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE MERGER THAT PGi WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT PGi AND THE PROPOSED MERGER. PGi’s shareholders will be able to obtain, without charge, a copy of the definitive proxy statement and other relevant materials in connection with the proposed merger (when they become available), and any other documents filed by PGi with the SEC from the SEC’s website at sec.gov and on PGi’s website at pgi.com. PGi’s shareholders will also be able to obtain, without charge, a copy of the proxy statement and other relevant documents (when available) by directing a request by mail or telephone to Premiere Global Services, Inc., c/o Sean O’Brien, 3280 Peachtree Road, NE, The Terminus Building, Suite 1000, Atlanta, Georgia 30305, by emailing investors@pgi.com or by calling 1-800-749-9111, extension 8462.

 

PGi and its directors and officers may be deemed to be participants in the solicitation of proxies from PGi’s shareholders with respect to the special meeting of shareholders that will be held to consider the proposed merger. Information about PGi’s directors and executive officers and their ownership of PGi’s common stock is set forth in the definitive proxy statement. Shareholders may obtain additional information regarding the interests of PGi and its directors and executive officers in the proposed merger, which may be different than those of PGi’s shareholders generally, by reading the definitive proxy statement and other relevant documents regarding the proposed merger (when they become available).

 

 

PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share data)

 

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2015				2014				2015				2014
Net revenue		$	140,967			$	140,383			$	427,593			$	427,909
Operating expenses:
Cost of revenue (exclusive of depreciation and amortization shown separately below)			56,302				57,965				170,343				176,508
Selling and marketing			37,000				36,813				111,125				112,242
General and administrative (exclusive of expenses shown separately below)			19,336				17,810				60,509				54,815
Research and development			5,793				5,534				16,385				14,655
Excise and sales tax expense			331				-				331				-
Depreciation			8,886				8,697				26,350				26,248
Amortization			3,962				2,582				12,399				7,549
Restructuring costs			49				68				4,195				68
Asset impairments			1				4,938				151				4,938
Net legal settlements and related expenses			(10	)			172				(21	)			172
Acquisition/divestiture-related costs			2,421				2,147				6,021				5,838
Total operating expenses			134,071				136,726				407,788				403,033
Operating income			6,896				3,657				19,805				24,876
Other (expense) income:
Interest expense			(2,975	)			(2,133	)			(8,478	)			(6,618	)
Interest income			2				5				16				25
Other, net			(1,018	)			741				(616	)			996
Total other expense, net			(3,991	)			(1,387	)			(9,078	)			(5,597	)
Income from continuing operations before income taxes			2,905				2,270				10,727				19,279
Income tax (benefit) expense			(553	)			(376	)			1,002				5,230
Net income from continuing operations			3,458				2,646				9,725				14,049
Loss from discontinued operations, net of taxes			(119	)			(100	)			(453	)			(283	)
Net income		$	3,339			$	2,546			$	9,272			$	13,766
BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING			44,133				45,162				44,365				45,797
Basic net income (loss) per share (1)
Continuing operations		$	0.08			$	0.06			$	0.22			$	0.31
Discontinued operations			-				-				(0.01	)			(0.01	)
Net income per share		$	0.08			$	0.06			$	0.21			$	0.30
DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING			45,002				45,898				45,028				46,485
Diluted net income (loss) per share (1)
Continuing operations		$	0.08			$	0.06			$	0.22			$	0.30
Discontinued operations			-				-				(0.01	)			(0.01	)
Net income per share		$	0.07			$	0.06			$	0.21			$	0.30

 

(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)

 

		September 30,				December 31,
		2015				2014
ASSETS
CURRENT ASSETS
Cash and equivalents		$	19,317			$	40,220
Accounts receivable (less allowances of $740 and $557, respectively)			89,347				77,334
Prepaid expenses and other current assets			17,616				13,536
Income taxes receivable			707				1,897
Deferred income taxes, net			10,148				10,447
Total current assets			137,135				143,434
PROPERTY AND EQUIPMENT, NET			100,647				100,954
OTHER ASSETS
Goodwill			410,000				386,416
Intangibles, net of amortization			96,411				102,350
Deferred income taxes, net			2,511				2,342
Other assets			13,810				20,734
TOTAL ASSETS		$	760,514			$	756,230
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable		$	48,418			$	57,211
Income taxes payable			1,346				2,217
Accrued taxes, other than income taxes			14,177				17,562
Accrued expenses			51,420				37,807
Current maturities of long-term debt and capital lease obligations			2,199				1,971
Accrued restructuring costs			431				958
Deferred income taxes, net			16				17
Total current liabilities			118,007				117,743
LONG-TERM LIABILITIES
Long-term debt and capital lease obligations			335,811				332,825
Accrued expenses			34,198				23,219
Deferred income taxes, net			24,824				27,453
Total long-term liabilities			394,833				383,497
SHAREHOLDERS' EQUITY
Common stock, $0.01 par value; 150,000,000 shares authorized, 46,753,585 and 47,378,794 shares issued and outstanding, respectively			470				475
Additional paid-in capital			436,060				442,585
Accumulated other comprehensive loss			(16,603	)			(6,545	)
Accumulated deficit			(172,253	)			(181,525	)
Total shareholders' equity			247,674				254,990
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	760,514			$	756,230

 

 

PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

 

		Nine Months Ended
		September 30,
		2015				2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net income		$	9,272			$	13,766
Loss from discontinued operations, net of taxes			453				283
Net income from continuing operations			9,725				14,049
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation			26,350				26,248
Amortization			12,399				7,549
Amortization of debt issuance costs			546				491
Net legal settlements and related expenses			(21	)			172
Payments for legal settlements and related expenses			(116	)			(170	)
Deferred income taxes			(1,598	)			1,096
Restructuring costs			4,195				68
Payments for restructuring costs			(4,559	)			(1,816	)
Asset impairments			151				4,938
Equity-based compensation			9,821				7,544
Excess tax benefits from share-based payment arrangements			(215	)			(448	)
Provision for doubtful accounts			467				203
Acquisition/divestiture-related costs			6,021				5,838
Cash paid for acquisition/divestiture-related costs			(5,056	)			(5,411	)
Changes in working capital, net of business acquisitions			(16,556	)			(6,460	)
Net cash provided by operating activities from continuing operations			41,554				53,891
Net cash used in operating activities from discontinued operations			(508	)			(259	)
Net cash provided by operating activities			41,046				53,632
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures			(27,997	)			(26,562	)
Business acquisitions, net of cash acquired			(16,109	)			(55,517	)
Other investing activities, net			(301	)			2,046
Net cash used in investing activities from continuing operations			(44,407	)			(80,033	)
Net cash used in investing activities from discontinued operations			-				-
Net cash used in investing activities			(44,407	)			(80,033	)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments under borrowing arrangements			(81,971	)			(99,509	)
Proceeds from borrowing arrangements			83,500				137,000
Payments of debt issuance costs			-				(1,060	)
Payment of earn-out liability			(1,841	)			-
Excess tax benefits of share-based payment arrangements			215				448
Purchases and retirement of treasury stock, at cost			(15,605	)			(25,844	)
Exercise of stock options			-				963
Net cash (used in) provided by financing activities from continuing operations			(15,702	)			11,998
Net cash (used in) provided by financing activities from discontinued operations			-				-
Net cash (used in) provided by financing activities			(15,702	)			11,998
Effect of exchange rate changes on cash and equivalents			(1,840	)			(1,047	)
NET DECREASE IN CASH AND EQUIVALENTS			(20,903	)			(15,450	)
CASH AND EQUIVALENTS, beginning of period			40,220				44,955
CASH AND EQUIVALENTS, end of period		$	19,317			$	29,505

 

 

PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Unaudited, in thousands, except per share data)

 

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2015				2014				2015				2014
Non-GAAP Revenue (1)
Net revenue, as reported		$	140,967			$	140,383			$	427,593			$	427,909
Impact of purchase accounting adjustments related to deferred revenue (2)			143				-				891				-
Non-GAAP revenue		$	141,110			$	140,383			$	428,484			$	427,909
Non-GAAP Gross Margin (1)
Gross margin, as calculated		$	84,665			$	82,418			$	257,250			$	251,401
Impact of purchase accounting adjustments related to deferred revenue (2)			143				-				891				-
Non-GAAP gross margin		$	84,808			$	82,418			$	258,141			$	251,401
As a percentage of Non-GAAP revenue			60.1	%			58.7	%			60.2	%			58.8	%
Non-GAAP Operating Income & Adjusted EBITDA (1)
Operating income, as reported		$	6,896			$	3,657			$	19,805			$	24,876
Impact of purchase accounting adjustments related to deferred revenue (2)			143				-				891				-
Equity-based compensation			3,756				2,660				9,821				7,544
Amortization			3,962				2,582				12,399				7,549
Excise and sales tax expense			331				-				331				-
Restructuring costs			49				68				4,195				68
Asset impairments			1				4,938				151				4,938
Net legal settlements and related expenses			(10	)			172				(21	)			172
Acquisition/divestiture-related costs			2,421				2,147				6,021				5,838
Non-GAAP operating income		$	17,549			$	16,224			$	53,593			$	50,985
Depreciation			8,886				8,697				26,350				26,248
Adjusted EBITDA		$	26,435			$	24,921			$	79,943			$	77,233
Non-GAAP Net Income from Continuing Operations (1)
Net income from continuing operations, as reported		$	3,458			$	2,646			$	9,725			$	14,049
Impact of purchase accounting adjustments related to deferred revenue (2)			103				-				642				-
Elimination of non-recurring tax adjustments and related interest			(1,355	)			(1,158	)			(1,903	)			(683	)
Equity-based compensation			2,704				1,835				7,071				5,205
Amortization			2,852				1,782				8,927				5,209
Excise and sales tax expense			238				-				238				-
Restructuring costs			35				47				3,020				47
Asset impairments			1				3,407				109				3,407
Net legal settlements and related expenses			(7	)			119				(15	)			119
Acquisition/divestiture-related costs			1,743				1,481				4,335				4,028
Foreign exchange transaction (gain) loss (3)			710				(495	)			439	#			(350	)
Non-GAAP net income from continuing operations		$	10,482			$	9,664			$	32,588			$	31,031
Non-GAAP Diluted EPS from Continuing Operations (1) (4)
Diluted net income per share from continuing operations, as reported		$	0.08			$	0.06			$	0.22			$	0.30
Impact of purchase accounting adjustments related to deferred revenue (2)			-				-				0.01				-
Elimination of non-recurring tax adjustments and related interest			(0.03	)			(0.03	)			(0.04	)			(0.01	)
Equity-based compensation			0.06				0.04				0.16				0.11
Amortization			0.06				0.04				0.20				0.11
Excise and sales tax expense			0.01				-				0.01				-
Restructuring costs			-				-				0.07				-
Asset impairments			-				0.07				-				0.07
Net legal settlements and related expenses			-				-				-				-
Acquisition/divestiture-related costs			0.04				0.03				0.10				0.09
Foreign exchange transaction gain (3)			0.02				(0.01	)			0.01				(0.01	)
Non-GAAP diluted EPS from continuing operations		$	0.23			$	0.21			$	0.72			$	0.67

 

(1)

Management believes that presenting non-GAAP revenue, non-GAAP gross margin, 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/divestiture-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)

 

		Quarter-to-date												Year-to-date
																		Impact of
		Q3 – 15 (Constant currency)				Impact of fluctuations in foreign currency exchange rates				Q3 - 15 (Actual)				Q3 - 15 (Constant currency)				fluctuations in foreign currency exchange rates				Q3 – 15 (Actual)
		(Unaudited, in thousands, except per share data)												(Unaudited, in thousands, except per share data)
Net Revenue		$	146,568			$	(5,601	)		$	140,967			$	444,640			$	(17,047	)		$	427,593
North America Net Revenue		$	90,312			$	(553	)		$	89,759			$	273,541			$	(1,386	)		$	272,155
Europe Net Revenue		$	39,256			$	(3,242	)		$	36,014			$	121,786			$	(11,213	)		$	110,573
Asia Pacific Net Revenue		$	17,000			$	(1,806	)		$	15,194			$	49,313			$	(4,448	)		$	44,865
Non-GAAP Operating Income		$	17,880			$	(331	)		$	17,549			$	54,801			$	(1,208	)		$	53,593
Adjusted EBITDA		$	27,201			$	(766	)		$	26,435			$	82,142			$	(2,199	)		$	79,943
Non-GAAP Net Income from Continuing Operations		$	10,825			$	(343	)		$	10,482			$	33,559			$	(971	)		$	32,588
Non-GAAP Diluted EPS from Continuing Operations		$	0.24			$	(0.01	)		$	0.23			$	0.74			$	(0.02	)		$	0.72

 

(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 (Q3-14 QTD or YTD) 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 QTD and YTD results using prior period (Q3-14 QTD and YTD) average exchange rates.

 

Sequential Quarter Constant Currency Adjustments (6)

 

						Impact of
		Q3 - 15 (Constant currency)				fluctuations in foreign currency exchange rates				Q3 - 15 (Actual)
		(Unaudited, in thousands)
Net Revenue		$	141,384			$	(417	)		$	140,967

 

(6)

Management also presents net revenue on a constant currency basis compared to the prior quarter (Q2-15) 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 (Q2-15) average exchange rates.

 

Organic Growth (7)

 

								Impact of
				September 30, 2014				fluctuations in foreign currency exchange rates				Acquisitions				Organic net revenue growth				September 30, 2015				Organic net revenue growth rate
				(Unaudited, in thousands, except percentages)
	Net Revenue, Three Months Ended			$	140,383			$	(5,323	)		$	9,984			$	(4,077	)		$	140,967				-2.9	%
	Net Revenue, Nine Months Ended			$	427,909			$	(16,276	)		$	29,470			$	(13,510	)		$	427,593				-3.2	%

 

(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.

 

 

PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Unaudited, in thousands, except per share data)

(continued)

 

UC&C SaaS and Resold Services Revenue (8)

 

		Q1-13				Q2-13				Q3-13				Q4-13				FY 2013				Q1-14				Q2-14				Q3-14				Q4-14				FY 2014				Q1-15				Q2-15				Q3-15
UC&C SaaS revenue, as reported		$	7,149			$	7,827			$	8,901			$	9,706			$	33,583			$	10,733			$	11,996			$	13,029			$	16,977			$	52,735			$	18,746			$	20,469			$	22,188
Adjustment (8)			-				-				-				-				-				-				-				-				435				435				276				201				91
UC&C SaaS non-GAAP revenue			7,149				7,827				8,901				9,706				33,583				10,733				11,996				13,029				17,412				53,170				19,022				20,670				22,279
Resold services revenue		$	16,775			$	16,650			$	16,053			$	15,618			$	65,096			$	16,118			$	15,356			$	15,234			$	14,313			$	61,021			$	13,036			$	12,495			$	10,862

 

(8) Adjusted for the impact of purchase accounting related to deferred revenue. See footnote 2.