PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2007 AND 2006
(IN THOUSANDS, UNAUDITED, EXCEPT SHARE AND PER SHARE DATA)
         
 
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2007
2006
2007
2006
 
 
Revenues $
146,216
$
127,061
$
559,706
$
496,472
Operating expenses
Cost of revenues (exclusive of depreciation shown separately below)
59,153
53,301
227,259
200,472
Selling and marketing
36,326
34,338
141,322
132,279
General and administrative (exclusive of net legal settlements shown separately below)
16,209
14,594
66,007
58,615
Research and development
3,706
3,284

14,109

12,052
Depreciation
8,453
6,593

30,008

24,567
Amortization
4,433
3,492
15,659
13,018
Restructuring costs
(300
)
4,366
3,447
8,385
Asset impairments
-
111
-
111
Net legal settlements and related expenses  
65
603
349
603
 
Total operating expenses  
128,045
120,682
498,160
450,102
 
Operating income  
18,171
6,379
61,546
46,370
 
Other (Expense) Income:
Interest expense
(4,439
)
(2,692
)
(13,598
)
(9,146
)
Interest income
337
231
780
536
Other, net  
450
1,598
1,418
1,401
 
Total other (expense) income  
(3,652
)
(863
)
(11,400
)
(7,209
)
Income before income taxes
14,519
5,516
50,146
39,161
Income tax expense
4,713
389
16,791
13,652
 
Net Income $
9,806
$
5,127
$
33,355
$
25,509
 
BASIC WEIGHTED AVERAGE SHARES OUTSTANDING:  
59,516
67,621
62,654
68,933
 
Basic earnings per share from net income $
0.16
$
0.08
$
0.53
$
0.37
 
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING:  
60,602
68,421
63,940
69,787
 
Diluted earnings per share from net income $
0.16
$
0.08
$
0.52
$
0.37
 

PREMIERE GLOBAL SERVICES, INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2007 AND DECEMBER 31, 2006
(IN THOUSANDS, UNAUDITED, EXCEPT SHARE DATA)
December 31,
December 31,
2007
2006
 
ASSETS
CURRENT ASSETS
Cash and equivalents $
18,259
$
18,977
Accounts receivable (less allowances of
$4,526 and $7,551, respectively)
89,683
82,875
Prepaid expenses and other current assets
13,066
7,742
Deferred income taxes, net  
5,522
11,972
 
Total current assets
126,530
121,566
PROPERTY AND EQUIPMENT, NET
110,767
88,062
OTHER ASSETS
Goodwill
337,246
295,185
Intangibles, net of amortization
43,115
38,357
Deferred income taxes, net
1,018
-
Other assets  
5,411
6,145
 
$
624,087
$
549,315
 
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $
51,631
$
48,967
Income taxes payable
7,597
878
Accrued taxes
8,076
6,011
Accrued expenses
37,276
28,697
Current maturities of long-term debt and capital lease obligations
1,664
2,044
Accrued restructuring costs  
1,717
4,800
 
Total current liabilities
107,961
91,397
LONG-TERM LIABILITIES
Long-term debt and capital lease obligations
267,817
136,738
Accrued restructuring costs
1,575
2,339
Other accrued expenses
4,527
1,831
Deferred income taxes, net  
-
719
 
Total long-term liabilities
273,919
141,627
SHAREHOLDERS' EQUITY
Common stock $0.01 par value; 150,000,000 shares authorized,
61,755,728 and 70,151,998 shares issued and outstanding in
2007 and 2006, respectively
618
702
Additional paid-in capital
548,418
663,232
Repayment of shareholder notes
(1,702
)
(2,004
)
Cumulative translation adjustment
10,523
2,088
Accumulated deficit  
(315,650
)
(347,727
)
Total shareholders' equity  
242,207
316,291
 
$
624,087
$
549,315
 

PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
TWELVE MONTHS ENDED DECEMBER 31, 2007 AND 2006
(IN THOUSANDS, UNAUDITED)
Twelve Months Ended
December 31,
2007
2006
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $
33,355
$
25,509
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation
30,008
24,567
Amortization
15,659
13,018
Amortization of deferred financing costs
513
492
Net legal settlements and related expenses
349
-
Payments for legal settlements and related expenses
-
(3,099
)
Deferred income taxes, net effect of acquisitions
2,488
2,912
Restructuring costs
3,447
8,385
Payments for restructuring costs
(7,109
)
(5,395
)
Payments for discontinued operations
(650
)
(987
)
Equity-based compensation
10,590
10,370
Excess tax benefits from share-based payment arrangements
3,323
(209
)
Payments for state sales tax
(480
)
(1,365
)
Asset impairment
-
111
Loss on disposal of assets
287
278
Gain on note receivable and other liabilities
Changes in assets and liabilities, net of effect of acquisitions:
Accounts receivable, net
(737
)
701
Prepaid expenses and other current assets
(893
)
(2,448
)
Accounts payable and accrued expenses  
7,433
320
 
Total adjustments  
64,228
47,651
 
Net cash provided by operating activities  
97,583
73,160
 
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures
(46,341
)
(31,926
)
Business acquisitions, net of cash acquired  
(47,749
)
(49,040
)
Net cash used in investing activities  
(94,090
)
(80,966
)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments under borrowing arrangements
(344,388
)
(164,391
)
Principal proceeds under borrowing arrangements
470,099
200,270
Payments of debt issuance costs
(50
)
(1,200
)
Repayment of shareholder notes
413
-
Excess tax benefits from share-based payment arrangements
(3,323
)
209
Purchase of treasury stock, at cost
(136,049
)
(31,691
)
Exercise of stock options  
8,553
2,515
 
Net cash (used in) provided by financing activities  
(4,745
)
5,712