UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2004.
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
For the transition period from to
COMMISSION FILE NUMBER: 0-27778
PTEK HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
GEORGIA
(State or other jurisdiction of incorporation or organization)
59-3074176
(I.R.S. Employer Identification No.)
3399 PEACHTREE ROAD NE
THE LENOX BUILDING, SUITE 700
ATLANTA, GEORGIA 30326
(Address of principal executive offices, including zip code)
(404) 262-8400
(Registrant’s telephone number including area code)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| Class |
Outstanding at May 6, 2004 | |
| Common Stock, $0.01 par value | 58,068,815 Shares |
PTEK HOLDINGS, INC. AND SUBSIDIARIES
INDEX TO FORM 10-Q
PTEK HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
| March 31, 2004 |
December 31, 2003 |
|||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS |
||||||||
| Cash and cash equivalents |
$ | 21,993 | $ | 23,946 | ||||
| Marketable securities, available for sale |
— | 575 | ||||||
| Accounts receivable (less allowance of $4,789 and $4,451, respectively) |
62,633 | 57,760 | ||||||
| Prepaid expenses and other current assets |
6,037 | 6,348 | ||||||
| Deferred income taxes, net |
20,938 | 20,938 | ||||||
| Total current assets |
111,601 | 109,567 | ||||||
| PROPERTY AND EQUIPMENT, NET |
65,041 | 63,563 | ||||||
| OTHER ASSETS |
||||||||
| Goodwill |
123,066 | 123,066 | ||||||
| Intangibles, net of amortization |
23,553 | 24,553 | ||||||
| Deferred income taxes, net |
6,297 | 10,521 | ||||||
| Notes receivable - employees |
2,013 | 1,808 | ||||||
| Other assets |
6,478 | 6,219 | ||||||
| $ | 338,049 | $ | 339,297 | |||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES |
||||||||
| Accounts payable |
$ | 37,145 | $ | 36,621 | ||||
| Accrued taxes |
10,044 | 10,984 | ||||||
| Accrued expenses |
33,018 | 33,891 | ||||||
| Current maturities of long-term debt |
15,000 | 15,000 | ||||||
| Accrued restructuring costs |
2,634 | 4,445 | ||||||
| Total current liabilities |
97,841 | 100,941 | ||||||
| LONG-TERM LIABILITIES |
||||||||
| Convertible subordinated notes |
85,000 | 85,000 | ||||||
| Long-term debt |
— | 5,000 | ||||||
| Accrued expenses |
11,850 | 14,638 | ||||||
| Total long-term liabilities |
96,850 | 104,638 | ||||||
| COMMITMENTS AND CONTINGENCIES (Note 9) |
||||||||
| SHAREHOLDERS’ EQUITY |
||||||||
| Common stock, $0.01 par value; 150,000,000 shares authorized, and 57,615,668 and, 57,289,895 shares issued and outstanding at March 31, 2004 and December 31, 2003, respectively |
575 | 572 | ||||||
| Unrealized loss on marketable securities, available for sale |
— | (110 | ) | |||||
| Additional paid-in capital |
603,038 | 602,452 | ||||||
| Unearned restricted share compensation |
(610 | ) | (813 | ) | ||||
| Note receivable, shareholder |
(5,423 | ) | (5,343 | ) | ||||
| Cumulative translation adjustment |
(409 | ) | (507 | ) | ||||
| Accumulated deficit |
(453,813 | ) | (462,533 | ) | ||||
| Total shareholders’ equity |
143,358 | 133,718 | ||||||
| $ | 338,049 | $ | 339,297 | |||||
Accompanying notes are integral to these condensed consolidated financial statements.
1
PTEK HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
| Three Months Ended March 31, |
||||||||
| 2004 |
2003 |
|||||||
| (Unaudited) | ||||||||
| Revenues |
$ | 105,354 | $ | 89,220 | ||||
| Operating Expenses |
||||||||
| Cost of revenues (exclusive of depreciation shown separately below) |
36,097 | 30,672 | ||||||
| Selling and marketing |
26,922 | 24,264 | ||||||
| General and administrative |
14,853 | 13,496 | ||||||
| Research and development |
2,506 | 2,004 | ||||||
| Depreciation |
6,577 | 5,533 | ||||||
| Amortization |
1,753 | 1,999 | ||||||
| Equity based compensation |
945 | 584 | ||||||
| Total operating expenses |
89,653 | 78,552 | ||||||
| Operating Income |
15,701 | 10,668 | ||||||
| Other (Expense) Income |
||||||||
| Interest expense |
(1,619 | ) | (2,809 | ) | ||||
| Interest income |
167 | 244 | ||||||
| Loss on sale of marketable securities |
(87 | ) | — | |||||
| Other, net |
16 | 281 | ||||||
| Total other (expense) income |
(1,523 | ) | (2,284 | ) | ||||
| Income From Continuing Operations Before Income Taxes |
14,178 | 8,384 | ||||||
| Income Tax Expense |
5,458 | 3,605 | ||||||
| Income from Continuing Operations |
$ | 8,720 | $ | 4,779 | ||||
| Net Income |
$ | 8,720 | $ | 4,779 | ||||
| BASIC EARNINGS PER SHARE: |
||||||||
| Income from continuing operations |
$ | 8,720 | $ | 4,779 | ||||
| Net income |
$ | 8,720 | $ | 4,779 | ||||
| BASIC WEIGHTED AVERAGE SHARES OUTSTANDING |
56,916 | 52,711 | ||||||
| Basic earnings per share: |
||||||||
| Continuing operations |
$ | 0.15 | $ | 0.09 | ||||
| Net income |
$ | 0.15 | $ | 0.09 | ||||
| DILUTED EARNINGS PER SHARE: |
||||||||
| Income from continuing operations |
$ | 9,481 | $ | 4,779 | ||||
| Net income |
$ | 9,481 | $ | 4,779 | ||||
| DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING |
73,194 | 54,871 | ||||||
| Diluted earnings per share: |
||||||||
| Continuing operations |
$ | 0.13 | $ | 0.09 | ||||
| Net income |
$ | 0.13 | $ | 0.09 | ||||
Accompanying notes are integral to these condensed consolidated financial statements.
2
PTEK HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
| Three Months Ended March 31, |
||||||||
| 2004 |
2003 |
|||||||
| (Unaudited) | ||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
| Net income |
$ | 8,720 | $ | 4,779 | ||||
| Adjustments to reconcile net income to cash provided by operating activities: |
||||||||
| Depreciation |
6,577 | 5,533 | ||||||
| Amortization |
1,753 | 1,999 | ||||||
| Loss on sale of marketable securities |
87 | — | ||||||
| Amortization of deferred financing costs |
213 | — | ||||||
| Deferred income taxes |
3,846 | 2,266 | ||||||
| Payments for restructuring costs |
(2,081 | ) | (290 | ) | ||||
| Equity based compensation |
945 | 584 | ||||||
| Changes in assets and liabilities: |
||||||||
| Accounts receivable, net |
(4,317 | ) | (4,841 | ) | ||||
| Prepaid expenses and other |
(1,164 | ) | (559 | ) | ||||
| Accounts payable and accrued expenses |
(5,631 | ) | (9,101 | ) | ||||
| Total adjustments |
228 | (4,409 | ) | |||||
| Net cash provided by operating activities |
8,948 | 370 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
| Capital expenditures |
(5,905 | ) | (2,723 | ) | ||||
| Business acquisitions |
(1,896 | ) | (6,382 | ) | ||||
| Increase in restricted cash for acquisitions |
— | (5,000 | ) | |||||
| Sale of marketable securities |
667 | — | ||||||
| Proceeds received on note receivable |
800 | — | ||||||
| Net cash used in investing activities |
(6,334 | ) | (14,105 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||
| Principal payments under borrowing arrangements |
(5,000 | ) | (1,133 | ) | ||||
| Purchase of treasury stock, at cost |
||||||||