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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): June 10, 1998
PREMIERE TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)
GEORGIA 0-27778 59-307416
(State of Incorporation) (Commission File No.) (I.R.S. Employer
Identification No.)
3399 PEACHTREE ROAD, N.E.
THE LENOX BUILDING
SUITE 600
ATLANTA, GEORGIA 30326
(Address of principal executive offices, including zip code)
(404) 262-8400
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
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On June 10, 1998, Premiere Technologies, Inc. ("Premiere" or the "Company")
issued a press release announcing that the Company anticipated second-quarter
and full-year results to be significantly below market expectations. The Press
Release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
The Press Release contains forward-looking statements concerning the
Company's operations, economic performance and financial condition, including in
particular, the Company's anticipated revenues and earnings per share for the
quarter ending June 30, 1998 and for the full year ending December 31, 1998 and
amounts of anticipated charges. For these statements, the Company claims the
protection of the safe harbor for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995. These statements are based on
a number of assumptions and estimates which are inherently subject to
significant risks and uncertainties, many of which are beyond the control of the
Company, and reflect future business decisions which are subject to change. A
variety of factors could cause actual results to differ materially from those
anticipated in the Company's forward-looking statements, including the following
factors: (a) those set forth under the captions "Special Cautionary Notice
regarding Forward Looking Statements" and "Management's Discussion and Analysis
of Financial Condition and Results of Operation--Factors Affecting Future
Performance" in the Company's most recent Annual Report on Form 10-K, and (b)
those set forth from time to time in the Company's press releases and reports
and other filings made with the Securities and Exchange Commission. The Company
cautions that such factors are not exclusive. Consequently, all of the forward-
looking statements made in the Press Release and incorporated herein are
qualified by these cautionary statements and readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the
date hereof. The Company undertakes no obligation to publicly release the
results of any revisions to such forward-looking statements that may be made to
reflect events or circumstances after the date hereof, or thereof, as the case
may be, or to reflect the occurrence of unanticipated events.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
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(c) Exhibits
99.1 Press release dated June 10, 1998
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PREMIERE TECHNOLOGIES, INC.
(REGISTRANT)
/s/ Harvey A. Wagner
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Harvey A. Wagner
Executive Vice President Finance and
Administration and Chief Financial Officer
Date: June 10, 1998
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EXHIBIT INDEX
Exhibit Number Description
99.1 Press Release dated June 10, 1997
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EXHIBIT 99.1
Contact: Premiere Technologies, Inc.
Media Calls:
Marcia H. Scott
VP Communications
Premiere Technologies
404.262.8462
Investor Calls:
Harvey Wagner
Chief Financial Officer
Premiere Technologies
404.262.8528
For Immediate Release
PREMIERE TECHNOLOGIES SECOND-QUARTER AND FULL-YEAR RESULTS TO BE SIGNIFICANTLY
BELOW ANALYST EXPECTATIONS
ATLANTA, June 10, 1998 -- Premiere Technologies, Inc. (NASDAQ: PTEK)
(www.premtek.com) today announced that because of financial difficulties
experienced by a licensing customer and by a strategic partner in the company's
800-based services unit, revenue shortfalls in its voice messaging business
unit, as well as other unanticipated costs and one-time charges totaling
approximately $17.0 million on a pre-tax basis, or $0.22 per share, the company
expects to report an after-tax loss for the quarter ending June 30, 1998, of
between $0.07 and $0.11 per share. Excluding these charges, the after-tax
earnings for the quarter are anticipated to be in the range of $0.09 to $0.13
per share.
Premiere anticipates that second-quarter revenues will be in the range of $120
million to $125 million, an increase of approximately 25 percent over the same
period last year. In addition to the factors listed above, this anticipated
second quarter revenue range includes the results of the company's decision to
discontinue unprofitable portions of its prepaid calling card business, which
were anticipated to contribute approximately $9.0 million of revenue per
quarter.
For the year, the company currently expects to report an after-tax loss per
share, after special charges, of between $0.13 and $0.17, on total revenue of
$490 million to $500 million, a 25 percent increase in revenue over 1997.
Excluding these charges, after-tax earnings are anticipated to be between $0.50
and $0.54 per share.
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The company said the anticipated shortfall in its 800-based services unit
results largely from reserves for notes and accounts receivable primarily
related to the previously mentioned customers. One recently filed for protection
under Chapter 11 of the Bankruptcy Code and the other initiated a general
creditors' meeting to discuss a restructuring of its business and liabilities
with its creditors. Subsequent to these events, and after further bankruptcy
court proceedings and assessments, the company determined that the financial
prospects for these customers warranted that it take a charge of approximately
$7.5 million, or $0.10 per share, to account for bad debt reserves related to
these two companies. Premiere emphasized that the reserves and other charges
reflect a continued conservative fiscal approach to its business, and that it
will diligently pursue collection of these receivables through all available
legal remedies, in the event these customers are unable to restructure their
businesses and satisfy their financial obligations. The company expects a
revenue shortfall from these customers of approximately $19 million for the
year.
The company also stated that it has experienced difficulty in achieving its
anticipated revenue and earnings from its voice messaging business unit, due to
difficulties in consolidating and integrating its sales function. Revenue from
this division is anticipated to be significantly below company expectations for
the quarter and the year. The company has reorganized its sales structure to
combine direct and wholesale sales in order to address this shortfall.
In addition to the $7.5 million charge above, the remainder of the $17.0 million
charge consists of the unanticipated costs and one-time charges of approximately
$9.5 million, or $ 0.12 per share, related to Premiere's previously announced
new subsidiary, Orchestrate.com, as well as costs associated with the Xpedite
acquisition and the write-down of certain assets to anticipated net realizable
value.
"While we are clearly disappointed with the impact that our two financially
troubled customers have had on our 800-based services unit and the slower than
anticipated growth in our voice messaging unit, our other businesses continue to
perform well," said Premiere Chairman and Chief Executive Officer Boland T.
Jones. "We are confident that our strategy to create an integrated suite of
Internet-based and other enhanced communications services continues to be the
correct formula to build value for our customers and other business partners
and, in turn, to build long-term value for our shareholders."
Mr. Jones said the company has made the realization of the synergies in its
global voice and data network its number-one priority over the past year and
that management is pleased with the results of these focused efforts. Expansion
of the network continues on schedule, with plans to enter eight new countries
this year. Moreover, Premiere has achieved this success while sustaining average
gross margins in excess of 65 percent.
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Mr. Jones noted that the company is continuing its focus toward consolidating
reducing selling, general and administrative (SG&A) costs. Due to Premiere's
dramatic internal and acquisition-related growth in revenues and employee base,
including the costs necessary to build the larger centralized infrastructure
needed to support this growth, these costs have remained above targeted levels.
The company is committed to reducing SG&A as a percentage of revenue over time.
As part of this process, the company will implement a shared services structure
in which all administrative services are consolidated under CFO Harvey Wagner.
This will allow the company to grow without adding significant costs.
"We are aggressively addressing the current challenge and are determined to
achieve our goal of making Premiere the world's best enhanced communications
company. The actions we are announcing today, while obviously painful in the
near term, reflect Premiere's financial conservatism and our determination to
build a solid foundation for profitable growth," Mr. Jones stated.
Mr. Jones added that the company is very proud of the strategic acquisitions
that have allowed it to grow from 1996 annual revenues of approximately $52
million to a 1998 run rate of approximately $500 million. "Now is the time to
complete our plan by adding experienced key players to Premiere's world class
management team, whose talents will helps us integrate our businesses and
realize the benefits of these exceptional acquisitions," said Mr. Jones.
To achieve these goals, the company engaged a national management consulting
firm several months ago to help define a management structure commensurate with
Premiere's current and anticipated growth. In addition, Mr. Jones recently
commenced a search for a President and Chief Operating Officer to assist him in
managing day-to-day operations in close cooperation with the other members of
Premiere's senior management team. The company is also seeking to hire a
treasurer who will assist the CFO in implementing the company's tightened credit
control program.
These additions will complement several other key management positions that have
been filled in the past few months. In April, Harvey A. Wagner joined Premiere
as its Executive Vice President Finance and Administration and Chief Financial
Officer. In addition, the company appointed Max Slifer, previously Executive
Vice President of Sales and Marketing for Xpedite Systems, Inc., to the newly
created position of Senior Vice President Sales, North America for all Premiere
business units other than Orchestrate.com. Mr. Slifer has extensive national
sales experience and has already implemented a number of initiatives to
integrate the company's global sales force. On May 26, the company announced the
appointment of William Porter "Billy" Payne, currently vice chairman of
NationsBank and the driving force behind the 1996 Centennial Olympic Games, to
head up Premiere's newly-formed subsidiary, Orchestrate.com. Mr. Payne brings
significant management and international business experience to the Premiere
management team.
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Atlanta-based Premiere Technologies, Inc. is a leading provider of the enhanced
communications services that business professionals rely on every day. The
company does this by integrating the Internet with voice mail, fax, e-mail,
conference calling and mobile communications. Premiere is the first single-
source provider and integrator of all these communications services through both
the Internet and the telephone. The company was founded in 1991. In addition to
Orchestrate.com, the Company's principal operations include WORLDLINK (800-based
services), Voice-Tel and VoiceCom (voice messaging), Xpedite (enhanced fax and
document distribution) and American Teleconferencing Services (conference
calling and enhanced group communications services).
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 based on
management's belief as well as assumptions made by, and information currently
available to, management pursuant to the 'safe harbor' provisions of the Private
Securities Litigation Reform Act of 1995. Premiere's actual results may differ
materially from the results anticipated in these forward-looking statements as a
result of a variety of factors, including those identified in Premiere's Annual
Report on Form 10-K for the fiscal year ended December 31, 1997, and its
Quarterly Reports on Form 10-Q filed with the Securities and Exchange
Commission.
