Press Release Archive

Premiere Global Services to Restate Financial Statements to Appropriately Account for Interest Rate Swaps

Non-Cash Expenses Will Not Affect Reported or Future Revenues, Cash Flows, Operating Income or Pro Forma Diluted EPS*; Company Reaffirms Financial Outlook

Sep 15, 2008

ATLANTA, GA , September 15, 2008 - Premiere Global Services, Inc. (NYSE: PGI), a global provider of on-demand, communication technologies-based business process improvement solutions, today announced that it will restate its annual financial statements for the year ended 2007 and interim financial statements for the first and second quarters of 2008 to correct the accounting for interest rate swaps on its revolving credit facility entered into in August 2007. The Company anticipates filing restated financial statements covering these periods with the Securities and Exchange Commission as soon as practicable and prior to the filing of its Quarterly Report on Form 10-Q for the quarter ended September 30, 2008.
 
The Company entered into two interest rate swaps in August 2007 with the intention of hedging the cash flow risk of variable 30-day LIBOR interest rate changes on the interest payments associated with its revolving credit facility. These agreements swapped a total of $200 million of the Company’s floating interest rate debt for a fixed rate. The termination dates of the interest rate swaps are currently August 2009 and August 2010.

These interest rate swaps were disclosed in the Company’s filings with the SEC during the periods covered by the Company’s 2007 annual and first and second quarter 2008 interim financial statements, which were audited and reviewed, respectively, by the Company’s independent registered public accounting firm.

Subsequent to the issuance of the Company’s interim financial statements for the quarter ended June 30, 2008 and as a result of the Company’s own efforts to update documentation surrounding its critical accounting policies, including derivative accounting policies mandated by Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended (SFAS 133), the Company determined that the fair value of the interest rate swaps and the change in their fair value were not properly recorded in the Company’s financial statements for 2007 and the first and second quarters of 2008.

"We believe these interest swap agreements are prudent hedges, consistent with our strategy to minimize, when possible, volatility and economic risks to our business," said Boland T. Jones, Founder, Chairman and CEO of Premiere Global Services, Inc. "Accounting for these types of hedges is very technical and complex. While we are disappointed with today’s announcement, it is important to note that the change in accounting treatment for these interest rate swaps results in non-cash expenses that will not affect our reported or future revenues, cash flows, operating income or pro forma diluted EPS*, which we believe are the primary operating metrics monitored by our investors. We remain committed to maintaining strong internal controls and transparency in our disclosures.

Our business momentum remains solid in the midst of continuing global economic uncertainty, which we believe underscores the value we provide to our enterprise customers that are looking to improve their productivity and efficiency during these challenging times. Consistent with our prior guidance, despite substantial fluctuations in foreign currency exchange rates in recent weeks, we continue to anticipate consolidated revenues in 2008 will increase at least 13% from 2007 totals and that diluted EPS will increase at least 20% this year."

This correction to our previously reported earnings reflects the change in fair value of these interest rate swap agreements and is included in the attached expected financial results, as restated, as "Unrealized gain (loss) on change in fair value of interest rate swaps." Management has excluded this item in its calculation of pro forma diluted EPS*, similar to other non-cash items, in the attached reconciliation of non-GAAP financial measures tables.

The Company believes the interest rate swaps are effective economic hedges against interest rate risk associated with its revolving credit facility, and the accounting correction for these swaps does not affect the favorable risk management characteristics of the swaps themselves. The Company intends to re-designate the interest rate swaps as cash flow hedges utilizing the long-haul method of effectiveness testing and, as a result, anticipates receiving hedge accounting treatment for these swaps in future periods.

* To supplement the Company’s quarterly financial statements presented in accordance with GAAP, it also includes pro forma diluted EPS and other non-GAAP measures of financial performance. Management uses these measures internally as a means of analyzing the Company’s current and future financial performance and identifying trends in the Company’s financial condition and results of operations. The Company provides 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. 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. Financial outlook statements contained in this release are based on Premiere Global Services’ current expectations as of September 15, 2008. These financial outlook statements contain forward-looking statements 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 SEC.

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About Premiere Global Services, Inc.
Premiere Global Services, Inc., formerly Ptek Holdings, Inc., is a leading global provider of innovative business communications and data services. Customers use our ASP platform to conduct traditional and VoIP-based collaboration sessions and to process and deliver large quantities of individualized, business critical information. Premiere Global offers outsourced document delivery, data capture, alerts/notifications and campaign management solutions that automate customers' business processes and improve efficiency levels enterprise-wide. We also offer a full suite of conferencing solutions, including automated, operator-assisted and Web collaboration services that enable customers to communicate real-time via our advanced, open standards global conferencing platform.
 
Premiere Global serves more than 46,000 corporate accounts in nearly every business sector, throughout 18 countries worldwide. Our corporate headquarters is located at 3399 Peachtree Road NE, Suite 700, Atlanta, GA 30326. Additional information can be found at www.pgi.com.
 
Forward-looking and cautionary statements

Statements made in this press release, other than those concerning historical information, should be considered forward-looking and subject to various risks and uncertainties. Such forward-looking statements are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and are made based on management's current expectations or beliefs as well as assumptions made by, and information currently available to, management. A variety of factors could cause actual results to differ materially from those anticipated in Premiere Global Services' forward-looking statements, including, but not limited to, the following factors: competitive pressures, including pricing pressures; technological change; the development of alternatives to our services; market acceptance of our new services and enhancements; integration of acquired companies; service interruptions; increased financial leverage; our dependence on our subsidiaries for cash flow; continued weakness in our legacy broadcast fax business; foreign currency exchange rates; possible adverse results of pending or future litigation or infringement claims; federal or state legislative or regulatory changes, including government regulations applicable to traditional telecommunications service providers; 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 to the "Risk Factors" sections of our Annual Report on Form 10-K for the year ended December 31, 2007 and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2008 and June 30, 2008. All forward-looking statements attributable to us or a person acting on our behalf are expressly qualified in their entirety by this cautionary statement.