ATLANTA, GA, July 30, 2003 - Ptek Holdings, Inc. (NASDAQ: PTEK) announced today that it intends to offer, subject to market and other conditions, $75 million of five-year convertible subordinated notes due 2008 in an unregistered offering solely to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and to certain persons in offshore transactions in reliance on Regulation S under the Securities Act (the "Offering"). These notes will be convertible into the Company's common stock at a price to be determined. The Company also intends to grant the initial purchasers of the notes an option to purchase an additional $10 million principal amount of the notes. Ptek Holdings intends to use the net proceeds of the Offering to repurchase in the open market or redeem a portion of its existing 5¾% convertible notes due 2004.
Ptek's Recent Accomplishments Include:
Xpedite continued its successful migration to transactional and new services revenue, which grew 23% in the second quarter of 2003 from the same period last year and now account for more than 40% of total Xpedite revenue.
To further accelerate the move to new services revenue, Xpedite launched secureMAIL. This new service utilizes encrypted e-mail and enables companies to securely deliver large volumes of sensitive data such as credit card and bank statements to customers, replacing the costly method of overnight delivery or postal services. secureMAIL is deployed using an ASP format on Xpedite's existing worldwide platform.
Premiere Conferencing continued to experience strong growth in international revenue, which more than doubled in the second quarter of 2003 from the same period last year and contributed 16% of total Premiere Conferencing revenue.
To further accelerate growth in international revenue, Premiere Conferencing launched VisionCast® and PremiereCall AuditoriumSM in the Asia/Pacific region.
During the second quarter Ptek repurchased $39.5 million face value of the Company's convertible notes at a discount to par, leaving an outstanding balance of $133.0 million.
Absent the repurchase of a portion of its convertible notes during the second quarter, the Company's total cash and equivalents at June 30, 2003, would have been $73.8 million, or $16.0 million more than at March 31, 2003. Ptek reduced outstanding accounts receivables despite the growth in revenue, with DSOs totaling 54 days, down 3 days from the first quarter of 2003.
The Company continued to improve certain leverage measurements, as net debt to equity(b) declined to 1.1 to 1 at June 30, 2003, from 1.4 to 1 at March 31, + As part of a continuing effort to reduce expenses, the Company has terminated its commitment to the lease obligation of a private airplane, which should yield cost savings beginning in the fourth quarter of 2003.
"We are pleased with our continued solid performance in the second quarter, especially in light of sustained weakness in the overall economy," stated Boland T. Jones, Founder, Chairman and CEO of Ptek Holdings. "Our recent new product introductions, along with the services being developed by our R&D group, should continue to generate meaningful contributions to our revenue growth and enhance our market leadership position."
Premiere Conferencing's second quarter 2003 revenue grew 13.4%, totaling $39.7 million versus $35.0 million in the same period last year. Revenue for the six months ended June 30, 2003, totaled $76.3 million, up 11.6% from the comparable year ago period.
Total conferencing minutes grew 41% during the second quarter of 2003 compared to the second quarter of 2002. Automated and new services accounted for 75% of total revenue at Premiere Conferencing. Web collaboration revenue increased 92% year-over-year and revenue from the Auditorium service increased 51% sequentially from the first quarter of 2003.
Revenue at the Xpedite operating unit grew 5.3% during the second quarter of 2003, totaling $55.2 million versus $52.4 million in the same period last year. Revenue for the first six months of 2003 grew 5.4% to $107.9 million from $102.4 million in the prior year period.
Xpedite delivered almost 700 million messages during the second quarter of 2003. messageREACHSM volume increased 74% and voiceREACHSM volume increased 131% over the same quarter last year. Revenue from these new services grew 58% in the second quarter of 2003 from the same period last year and represented 17% of Xpedite's total revenue.
The following statements are based on Ptek's current expectations as of July 30, 2003. These statements are forward-looking statements and actual results may differ materially. The company assumes no duty to update any forward-looking statements made in this press release. A discussion concerning forward-looking statements is included at the end of this press release and in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2002.
Based on the Company's year-to-date performance, Ptek remains comfortable with its current 2003 financial guidance.
The Company will hold a conference call to discuss this release at 8:30 a.m. EDT on July 31, 2003. To participate, please call the following numbers 5-10 minutes prior to the scheduled start time: 800-289-0544 (U.S. & Canada) or 913-981-5533 (International). The call will be simultaneously broadcast over the Internet via SoundCast®, a Premiere Conferencing service, and can be found at www.ptek.com/invest/invest.cfm. A replay of the conference call will be available following the call at 11:30 a.m. through midnight August 8, and may be accessed by following the above link or by dialing 888-203-1112 (U.S. & Canada) or 719-457-0820 (International). The confirmation code is 674155. The Webcast of this call will be archived on the Company's Website at www.ptek.com.
(a) EBITDA is defined as income from continuing operations before interest, taxes, depreciation and amortization. EBITDA is a non-GAAP financial measure. A reconciliation of this non-GAAP financial measure to what management believes to be the most directly comparable GAAP financial measure, operating cash flows, is attached.
(b) Net debt is a non-GAAP financial measure. A calculation of the net debt to equity leverage ratio is attached.
About Ptek Holdings, Inc.
Ptek Holdings, Inc. is a leading provider of innovative business, data and group communications services for global enterprises. Companies use our audio and data conferencing solutions to conduct group meetings and presentations over the phone or Web. We also enable our customers to process and deliver large quantities of individualized, business critical information, such as electronic statements and invoices, financial transaction and travel confirmations, and drug prescriptions, via our global ASP platform. Ptek serves companies in nearly every business sector, including healthcare, technology, publishing, financial services, travel and hospitality. Our services are marketed under the Premiere Conferencing and Xpedite® brand names.
Ptek Holdings' corporate headquarters is located at 3399 Peachtree Road NE, Suite 700, Atlanta, GA 30326. Additional information can be found at www.ptek.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 Ptek's forward-looking statements, including, but not limited to, the following factors: technological change; the development of alternatives to our services; our ability to manage our growth; integration of acquired companies; possible adverse effects on our financial condition if we are unable to retain IBM as a customer at the levels currently forecasted; possible adverse results of pending or future litigation or infringement claims; service interruptions; competitive pressures, including pricing pressures; general domestic and international economic, business or political conditions; legislative or regulatory changes; increased financial leverage; our dependence on our subsidiaries for cash flow; and other factors described from time to time in our press releases, reports and other filings with the SEC, including but not limited the "Risk Factors Affecting Future Performance" section of our Annual Report on Form 10-K for the year ended December 31, 2003. All forward-looking statements attributable to us or a person acting on our behalf are expressly qualified in their entirety by this cautionary statement.