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Premiere Global Services, Inc. (NYSE:PGI)

Q2 2013 Earnings Call

July 18, 2013 5:00 pm ET

Executives

Sean O'Brien - Executive Vice President of Strategy & Communications

Boland T. Jones - Founder, Executive Chairman and Chief Executive Officer

Theodore P. Schrafft - President

David E. Trine - Chief Financial Officer, Principal Accounting Officer and Executive Vice President of Finance

Analysts

Barry McCarver - Stephens Inc., Research Division

Tavis C. McCourt - Raymond James & Associates, Inc., Research Division

Michael Latimore - Northland Capital Markets, Research Division

Operator

Good day, everyone, and welcome to the Premiere Global Services, Inc. Second Quarter 2013 Financial Results Conference Call. Today's call is being recorded. This call is also being simultaneously broadcast over the Internet. For details, please visit our website at www.pgi.com, and go to the Investor Relations section. Alternatively, you may listen to the rebroadcast from your telephone, beginning at 8 p.m. Eastern Time today through Friday, July 26, at midnight. The replay numbers are (888) 203-1112 within the United States and Canada, or at (719) 457-0820, worldwide. The passcode to access the replay is 9502327.

[Operator Instructions] At this time, I would like to turn the conference over to the Executive Vice President of Strategy and Communications for PGi, Mr. Sean O'Brien. Mr. O'Brien, please go ahead, sir.

Sean O'Brien

Thank you, and good afternoon, everyone. If you've not received a copy of our second quarter 2013 earnings release, please visit our website at pgi.com, where it is available in the Investor Relations section.

Joining me on the call this afternoon are Boland Jones, Chairman and CEO of Premiere Global Services; Ted Schrafft, President of PGi; and David Trine, our CFO. Following some brief comments by management, we'll open the call to your questions.But before I turn the call over to Boland, I'd like to remind everyone that statements made in this conference call, other than those concerning historical information, should be considered forward-looking and subject to various risks and uncertainties. Such forward-looking statements are based on management's beliefs, assumptions made by management and information currently available to management, pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

Our actual results may differ materially from the results anticipated in these forward-looking statements as a result of a variety of factors, including those we identified on our Annual Report, on Form 10-K for the year ended December 31, 2012, and our other filings with the SEC.

In addition, during this call, we will present non-GAAP financial measures of our business. Please consult both our press release and Form 8-K filings of this afternoon for reconciliation of these non-GAAP financial measures to the most comparable GAAP measures. These materials are also available on our website at pgi.com.

Now at this point, I'll turn the call over to Boland.

Boland T. Jones

Thanks, Sean, and good afternoon, everyone. This is Boland Jones. I'd like to welcome you to our second quarter 2013 earnings call. Let me begin by saying that we are pleased with our second quarter performance as we continue to move closer to our goal of establishing PGi as a global leader in business collaboration software. As many of you know, PGi is a company in transition. Building on our 20-plus years as a leader in audio conferencing, we are transitioning our model towards an emphasis on SaaS-based collaboration applications for the enterprise. Our goal is to enable businesses to innovate faster, to operate more efficiently and to be more competitive by enabling their people to connect and collaborate anywhere, anytime from any device as simply and as effortlessly as browsing the web or launching an app. To accomplish this goal, PGi has built significant expertise in software design and development. In the last few years, we have developed and launched 2 award-winning SaaS applications: iMeet and GlobalMeet, which we designed to be the easiest to use, most versatile, virtual meeting products on the market. We released a first-to-market suite of mobile apps to advance our goals of making our products universally accessible and enabling users to be as productive on the go as they are in the office. And we developed and deployed a global IP cloud with hybrid audio capabilities that is unique in our industry to support the most advanced virtual meeting tools in the world. We believe that transitioning our customers and sales emphasis towards SaaS products will open new market opportunities for us and to position PGi for the next wave of growth.

The collaboration market is undergoing significant change as a result of rampant enterprise adoption of mobile and cloud technologies, as well as asynchronous collaboration tools like social platforms, file-sharing apps and virtual workspaces. These technology trends are creating a growing demand for our current services, and at the same time, they're creating growth opportunities for PGi beyond the traditional realtime collaboration space. We plan to attack these new growth opportunities by extending our iMeet platform and our SaaS capabilities. Today, our foundational audio conferencing business continues to generate modest growth, and we believe that PGi is well positioned to continue to grow our share of this greater-than-$4-billion global market. At the same time, our high-margin SaaS revenue, which we believe targets a much larger addressable market opportunity than audio conferencing, continues to grow at a significant rate. For example, in the second quarter, our SaaS revenue grew approximately 75% year-over-year. We set a new quarterly record for sales of our software and we exited the quarter with the most robust SaaS sales pipeline we have ever had.

We are especially pleased that over half of our SaaS growth is coming from our traditional audio customers adopting iMeet and GlobalMeet, which we believe validates our strategy to upsell and attract our customer base to these higher-value applications. It is clear to us that our customers see the value of these products and have a desire to adopt them. While we are currently generating significant growth and margins from our SaaS products, their contribution to our overall results is not yet great enough to overcome the slower growth and lower margins of our foundational audio conferencing business. However, we believe that ultimately, our business model will improve as our SaaS revenue becomes a greater percentage of our overall revenue. In order to accelerate growth of our SaaS revenue, we have a multipronged strategy. First, we will continue to invest in growing our global distribution, including our direct sales headcount, our strategic partners and our technology integration partners. Second, we will continue to invest in enhancing and expanding our SaaS products suite. For example, we will continue to evolve our products, especially iMeet, to meet the daily needs of specific business professionals such as sales, human resources, training and the like.

We will also extend the capacity and capabilities of iMeet and GlobalMeet to address large growing market opportunities like webinars, webcasting and personal business communications, just to name a few.

And our third strategy to accelerate the growth of our SaaS revenue is to take advantage of our underlevered balance sheet and strong cash flows to seek strategic acquisitions, both SaaS-based companies, as well as more traditional conference providers, where we can upgrade customers to our SaaS products: iMeet and GlobalMeet. Based on our current pipeline of potential opportunities, we believe we will have an active acquisition program this year. We're confident that continuing to build our SaaS product portfolio and transitioning our company towards a SaaS model will position PGi to deliver higher value to our customers, partners and shareholders around the world. And we look forward to updating you on all this progress on our future calls.

Now in closing, let me again thank all of our associates around the world for their hard work and dedication to our success. And let me also thank our customers and shareholders for their continued support of PGi.

And at this point, I'll turn the call over to our President, Ted Schrafft. Ted?

Theodore P. Schrafft

Good afternoon, everyone, and thank you for joining our second quarter 2013 earnings call. As Boland mentioned, we are pleased with our second quarter performance as our strategy of investing in our SaaS products continues to be validated in the market. With 75% year-over-year growth in PGi software sales in the second quarter, our best quarter ever, and exiting the quarter with a robust sales pipeline of these products.

Our investment priorities continue to be in R&D, product development and sales and marketing, all in support of our priority of growing revenue from these high-value, high-margin products.

As we continue to enhance and expand our suite of SaaS applications and to grow our global sales distribution of these products, we believe it will have meaningful positive impact on our business model and our financial results.

Now let me turn to our second quarter 2013 financial performance.

Beginning with revenues. As reported, net revenues totaled $132.2 million in the second quarter. Excluding the impact of changes in foreign currency exchange rates during the period, second quarter organic revenue increased approximately 5% as compared to the second quarter 2012. Since we have provided our 2013 financial outlook in April, there have been negative movements in several key foreign currencies in countries where we do business, which we anticipate will negatively affect our reported results for the remainder of the year. In addition, over the last several weeks, as you've seen from many other technology and business service companies, we've witnessed a slowing trend in our business in Europe. Specifically, our year-over-year organic growth in Europe has slowed from double digits to mid-single-digit rates. We believe we were late to feel the effects of a slowdown in Europe, and we're confident that these trends are a result of general economic conditions and that we maintain a strong competitive position in the European region. To reflect the impact of these items, we have updated our financial outlook for 2013.

Based on foreign currency exchange rates and assuming our current global business trends remain the same, we project that net revenues in 2013 will be in the range of $517 million to $523 million.

Turning to profitability, our gross margin was 57% in the second quarter, in line with recent quarters. While gross margin trends continue to be negatively affected by high growth in our global accounts channel, we continue to anticipate that our gross margins will increase over time as we grow sales of our SaaS-based products which carry higher gross margins than our current corporate average.

Non-GAAP diluted EPS from continuing operations was $0.20 in the second quarter, up from $0.19 in the second quarter of 2012. Based on current business trends and current foreign currency exchange rates, we now project that non-GAAP diluted EPS from continuing operations in 2013 will be in the range of $0.78 to $0.81.

During the second quarter, we generated net cash provided by operating activities from continuing operations of $17.5 million. Capital expenditures were approximately $8.5 million in the second quarter, and we continue to anticipate that capital expenditures will be approximately $33 million in 2013. We ended the second quarter with significant room on our credit facility and with the lowest net debt, as defined by total debt less cash and equivalents, our company has had in over 6 years. We believe we will have access to significant capital through our credit facility and our continuing strong cash flow to fund an aggressive investment and acquisition strategy.

Consistent with our ongoing investment strategy, we anticipate that we will continue to be opportunistic buyers of our common stock. In addition, as Boland discussed, we plan to pursue a number of potential acquisition opportunities to enhance PGi's market share to accelerate our SaaS revenue and to broaden our technology portfolio.

In conclusion, let me say that we are pleased with our second quarter performance. While we continue to actively monitor the health of our global business trends, we remain excited about the growing market opportunity for PGi and our products, which we believe offer great value to PGi's customers, our associates and our shareholders. We are optimistic of our ability to transition PGi to higher, more predictable revenue growth and greater profitability through our continuing focus on growing our SaaS-based product revenue. We look forward to updating you on our progress in future calls. Until then, let me join Boland in thanking our customers and all of our associates for their continuing support and their commitment to our success. At this point, we will open up the call to your questions.

Question-and-Answer Session

Operator

[Operator Instructions] And for our first question, we go to Barry McCarver with Stephens Incorporated.

Barry McCarver - Stephens Inc., Research Division

So Boland, you mentioned in your comments about the slowing trends in Europe. Can you give us just a little bit more detail on that? Was that something that happened early in the quarter or late in the quarter? Have you seen any recovery there? Was it specifically on traditional services or did it affect the business all around?

Boland T. Jones

It's not in a specific area. And it didn't happen early in the quarter, it developed later in the quarter. And between that and their summer starting and just the downturn, just across the board, we've talked to other service providers, and just the lack of activity in the business day over there, I guess we attributed to what everybody else has been talking about the last 2 quarters in other service sectors and other businesses about the European economy. We didn't have that same look, Q1, or the beginning of Q2. But the latter half of Q2, that's when it started appearing, and so that's when we saw it.

Theodore P. Schrafft

And Barry, this is Ted. Just a quick follow-on. Again, we've had a very, very solid performance in Europe. We're growing in Europe. So basically, we're taking double digit, what's been double-digit growth, and we're just moderating it to single-digit growth. That's right.

Barry McCarver - Stephens Inc., Research Division

And to that point, Ted, I mean, clearly in this quarter, major, major foreign currency fluctuations. It seems like the majority of your tweaking of guidance for the rest of the year really has to do, or at least the big portion of it, has to do more with FX than with a slow down. Is that a good way to look at it?

Theodore P. Schrafft

Yes. It's a major chunk, a major chunk. But they're probably about pretty equal. We're just looking at Europe -- using the current trends, we're looking at Europe for the rest of the year and we're saying, okay, if these trends continue, this is where we're going to be for the rest of the year. Now, the trends could turn back up or they could get worse, who knows. But we're just looking at those current trends. But it's about 50-50 between foreign exchange and the European trends.

Barry McCarver - Stephens Inc., Research Division

Okay. And then just secondly, if I can, Boland, you mentioned a lot of initiatives going on this year. One of them being acquisitions and you still think you could have some activity there this year. We've talked in the past and I think you identified several nice opportunities that would fit in well with the next-generation services. But in the past, it sounds like that those have been pretty pricey, pretty pricey opportunities. Have you seen a change in pricing from some of these small businesses or networks? Or has something new come up?

Boland T. Jones

Well, first of all, we look at -- definitely more pricey than 1x revenue if they're in the SaaS business, and I hope that our SaaS business carries the same kind of millions, [ph] same kind of value. And I think as you see our SaaS business get closer to $50 million, I hope that we'll see that same kind of value come through there, but they're definitely more expensive. Some of those SaaS opportunities are more expensive than what we're trading, but that doesn't put them out of reach of whatsoever. So we're seeing both sides, we're seeing in the traditional side and in the SaaS side. And specifically in the SaaS side, we're starting to narrow in on things that we think would fit very, very nicely with our iMeet platform and our GlobalMeet platform that would compliment them in great ways. So I think we will see and I'm hoping that we will see some hard evidence of activity in our company before the end of this year. We've got several things working, and you just work on them and you work on them and you see if it gets down to due diligence. And if something looks funny there, you work on negotiation on value. And that's where we are with several things. So we're excited and we're looking at both sides of the business. If we buy the -- Barry, if we buy the SaaS part of the business, we'd love that, but it's got to fit in to GlobalMeet and iMeet strategy. And if we buy the traditional side of the business, it's got to be something that we feel like we've got a great upgrade path to iMeet and GlobalMeet. And as I said in my opening remarks, almost 50%, a little over 50% actually of our sales of iMeet and GlobalMeet are coming from our base. So we think we've got a decent handle on how to upgrade our current customer base.

Operator

And for our next question, we go to Tavis McCourt with Raymond James.

Tavis C. McCourt - Raymond James & Associates, Inc., Research Division

First, a housekeeping question. Mike, I wonder if you could talk about what we should expect for cash flow from operations for the year? Is there a range that would be reasonable?

Boland T. Jones

Well, we're expecting the free cash flow to be around $43 million, and our CapEx to be somewhere around the $33 million. So you just add the 2 together.

Tavis C. McCourt - Raymond James & Associates, Inc., Research Division

Yes. Then, Boland, in terms of the acquisitions, what should we think about in terms of kind of financial constraints, not size, but whether it's EPS accretion or if there is dilution? Because if it's a technology, you think is a -- specifically a good fit? What should we be prepared for in terms of your willingness to be flexible on an accretion metric?

Boland T. Jones

Well, if you -- first of all, we always look for accretive deals. I mean, that's the first choice. And the second choice is we don't want to bet the farm on a deal. We do have, as we said, and as you guys follow us, follow our financial statements, our balance sheet, we do have quite a bit of capacity available. But let me say this, about that, and you can see from my past, I've been here for a while, you could see from my past, I usually deal in certain terms as I can and in terms that are more on the conservative side than the far-reached side. But we are determined to transition our business more towards the SaaS business, more towards predictable, subscription-based software revenue. And we're excited about the opportunities there. So there's a lot to choose from, there's a lot out there. It's doesn't mean -- to get a good SaaS deal doesn't mean it has to dilutive. There's -- we have choices out there more than you think or maybe not more than you think, but maybe more on one thing. So we've got some near-term pipeline that we're pretty excited about and we've got more pipeline coming. And as we get into the pipeline and as we look at everything, we say, "God, there's even more opportunity out here than we thought to look at." So we're trying to be somewhat plotted and somewhat careful. As I said earlier to Barry, to make sure that it makes a lot of sense to accelerate what we get as well as iMeet and GlobalMeet. And so -- but we lean towards the accretive side on anything we do.

Tavis C. McCourt - Raymond James & Associates, Inc., Research Division

Yes. And then, Ted, I presume the slowdown in the Europe region is mostly kind of volume on existing business. But, kind of talk about the pricing trends on new business? Any change in that through the quarter as the economy weakens?

Theodore P. Schrafft

Tavis, no, no. I mean, it continues to be competitive. It continues to be aggressive. So I don't think any -- the price points that we're seeing as we're competing for new business, I think, continue to be pretty much in-band, I'm just going to say. We're always -- we're looking at any size of deals, small deal, big deal, mid-sized deal. We know that some of the larger deals put some -- a little pressure on the gross margin number. But what we are getting, again, what we are seeing, which I like, is just we're seeing some traction on PGi clearly differentiating itself through our software. So that is if we could really get any message through on this call, we're just continuing to get good contraction, good growth. We haven't hit the tipping point where yet where it's enough. But the types of numbers we're putting out there on the software growth, that's what's exciting to us. It's the traction, the performance we have this quarter, as well as, on Boland's opening comments, the pipeline that we're seeing. So -- but the base, I'll say traditional business pricing, Tavis, has remained competitive. I don't think it's [indiscernible] in any way, and it's very competitive. But like -- as Ted was saying, Tavis, that software not only sells the SaaS stuff, but also sells the other stuff too. So it just brings us to a more important moment at the customer's presence.

David E. Trine

And, Tavis, one other thing. Just to follow on to your first question, too. But I'll make sure that we're clear, too. We are, like I said, the acquisition opportunities for us are big because we are getting, as Boland said, a good part of our SaaS growth from our base, okay? So obviously, if we extend and get a larger base, as far as I'm concerned, it just gives us more market and more opportunity for us to grow our SaaS business. But the things that we are looking at, I'm going to say, on the near term, let me be clear and as bold to say, are clearly accretive on both revenue and EPS. I mean, just from a -- just a planning standpoint.

Operator

And for our next question, we go to Mike Latimore with Northland Capital.

Michael Latimore - Northland Capital Markets, Research Division

Do you have the annual run rate of your Software-as-a-Service business?

Sean O'Brien

Yes. Mike, this is Sean. We ended the quarter at approximately $29 million run rate, up just over $3 million from Q1.

Michael Latimore - Northland Capital Markets, Research Division

All right. And how much is it in terms of maybe meetings per day or revenue per day trends in the quarter? How does that trend throughout the quarter? How does that compare to the prior quarter?

David E. Trine

Mike, this is David Trine. If you look at business days, we're up slightly in Q2 over Q2 of last year. But if you still do the adjustment, we're still at 4%, around some 4%. So still a very good quarter year-over-year.

Michael Latimore - Northland Capital Markets, Research Division

And how about percent growth in meetings year-over-year? I know you have that for kind of the full year last year. Do you guys have the quarter range now?

Boland T. Jones

Ted, go ahead.

Boland T. Jones

Yes. Mike, it was high teens percentage growth in meetings year-over-year.

Michael Latimore - Northland Capital Markets, Research Division

And because it relates to the gross margin, I mean, how big does the SaaS business have to get so that you can kind of clearly see gross margins consistently increasing, let's say?

Boland T. Jones

I mean, this -- you must listen to what we talk about every day, because that's about all I -- the question is -- that's the question of the day, every time I pour my coffee and walk into Ted's office in the morning. Depending on -- the denominator keeps growing, okay, so the audio business keeps growing. So that's one of the issues. But if we stand still right here, right now where we are right now, we think in about the $50 million to $60 million level that really starts infecting our gross margin. Now as we convert current customers -- let me just give you some outlook, if we convert current customers, they're on one gross margin to another, that speeds it up in the denominator, as I said, as far as our base business. And as we get more of our base business to convert over to on-net strategies and so forth, which we're doing and we're having a lot of good progress with right now due to some great management of our larger accounts, that helps a lot too. So we can alter the denominator slightly maybe and work on the numerator at the same time. But right now, if you were to ask us mathematically, it looks like somewhere around the $50 million mark.

Michael Latimore - Northland Capital Markets, Research Division

Okay, good. And then how about number of days. What kind of -- what number of days do you expect to have -- number of business days you expect to have in the third quarter versus the second quarter?

David E. Trine

Mike, this is David again. It should be pretty consistent right around the 63 days.

Michael Latimore - Northland Capital Markets, Research Division

All right, got it. And last question, I guess, the tax rate in the next couple of quarters, what should we model?

David E. Trine

The normalized rate for the first 2 quarters has been 29.5%, and we expect it to stay right there.

Operator

And with a follow-up question, we return to Barry McCarver.

Barry McCarver - Stephens Inc., Research Division

Just a couple of questions. I guess, on that last question regarding margin, can you give us at least a range of where your traditional business is and gross margin? And my real question there is, are you starting to see a little bit of cannibalization of that business as you sell next-gen solutions into that group?

Boland T. Jones

Well, there's 2 ways that group's buying it. I'll answer the last question first and then I'll let the financial people address the other question about gross margin. We either add our services to a current account, and they're using somebody else or they're not using anybody and we add the services to the account. So in the beginning here, our current strategy is to try to take a -- and I don't want to say too much because it's a hypercompetitive market. But let's just say, for instance, we had a $10 customer on audio, we try to add our iMeet abilities to our GlobalMeet abilities to make it a $25 customer. That's the current strategy. However, sometimes, it turns into a bundle, which we really like, whereby we have a higher margin but we make cap revenue in that instance with the subscription bundle. And then it falls clearly into an area where it could be a $30 customer and we make it a $25 customer, but we got a $25 customer for 3 years. So it goes both ways. But so far, the majority of it has probably gone the way of additive revenue to the current account. We'll stay like that. We'll take it either way, to be honest with you. Some people, on certain days, I'd like it to be a subscription deal for the next 3 years. And on other days, it's just dictated by the customer, what they want to do with it.

Barry McCarver - Stephens Inc., Research Division

Okay, fair enough. And the gross margin question?

David E. Trine

Yes. Barry, this is David again. If you look at our base audio business, it's accretive to the 57%. Our office, it is right around that debt amount. What -- if you look at our third-party web, it's significantly lower. And then, of course, our SaaS business is significantly higher than the 57%, talking about 85% range.

Barry McCarver - Stephens Inc., Research Division

And that, the third-party business, can you breakout what type of -- is that -- how much revenue is in that bucket?

David E. Trine

It's pretty much -- it's somewhere around $60 million, $60 million range.

Barry McCarver - Stephens Inc., Research Division

Okay. And then Boland, you mentioned a couple of things in your prepared remarks that I thought were interesting. You mentioned, I think, some improvements or upgrades in GlobalMeet and iMeet set for the second half of the year. Did I catch -- I couldn't write down everything you we're saying, did I catch that correctly?

Boland T. Jones

Yes. I sort of guided towards some roadmap stuff to be specific, and I'll put some specifics on it. I talked about GlobalMeet and iMeet addressing new market innovation. So, for instance, you'll see a piece of news soon from us where GlobalMeet will enter the webinar space with a larger meeting format and registration engines and so forth, and that's on the very-near term horizon. And then, iMeet will enter a larger meeting format space. Right now, you can with 15 people on iMeet, and that will very-near term go to 125 people. It'll also take form in 3 or 4 different offerings. And it'll have an in-application upgrade capability, where you'll be able to use the free iMeet. And then at some point, either stay on a free iMeet perpetually or upgrade into a paid subscription, which we think will be a huge improvement and big opportunity for us to increase our sign-ups and increase our activity on the web and from e-commerce areas and so forth, so we're pretty excited about that. And our partners are pretty excited about those upgrades as well, so that's where we're going to get a lot of bump as well.

Barry McCarver - Stephens Inc., Research Division

Okay. And then you also mentioned, I think, just some increases to -- I'm paraphrasing here. But increases to sales and increasing to the install and integration teams, are we at a point in the activity levels of your SaaS products where you think those 2 areas need to be addressed in terms of additional bodies?

Boland T. Jones

Yes. Well, I talked about distribution in general. And we've been talking about -- and I'm using the word distribution for the last year, and I've been talking about with our company. We've been working hard at PGi in figuring out how we can increase our ultimate distribution everyday. I mean, it's not unlike any other company you'd talk to that's trying to grow their sales revenue. But we're trying to encourage more partners. We're trying to incur infrastructure partners, marketing partners and so forth and so on. And throughout the year, we'll continue to augment our own direct sales forces as well, and our channel partner sales forces as well. So distribution is still where we're taking every extra dollar and putting it besides product innovation. It's distribution and product innovation, and that's where we take every spare penny we got and pumping it into it.

David E. Trine

And Barry, let me follow-on to that. Listen, we've always been, as you guys know, we've been a direct sales org. We have strong direct sales organization, we continue to, we always -- we'll we've added to that sales organization in terms of headcount. In the last year, you also know that we've been retooling and upgrading and enhancing that sales organization over the past year as we've been working through the transition to software in terms of the type of sales people. But one of the things that we're also very excited about that probably is where, maybe, we're underappreciated there is, we have massive set of partners, distribution partners, that are extremely excited about. And I want to say we probably have one of the more significant kind of partner distribution channels in this industry. And we're taking a hard look at that and looking at how do we really better take advantage and accelerate what we're doing there. Because we're doing something very good in those partnerships are excited about the new products. So we're looking at ways to accelerate the distribution of the products through the existing partners as well as how do we continue to add to these significant partnerships. As Boland said, it's all about distribution. So we'll always be direct sales, but we're looking hard, too, about how do we enhance a big asset in terms of distribution partners around the world.

Barry McCarver - Stephens Inc., Research Division

And then lastly, I guess, it relates to that. I noticed that, I guess, about 10 days ago, you announced availability, iMeet availability, with S&P. Is that a new relationship, or they've been working with iMeet for a while? Or is that a new distribution partner altogether?

Boland T. Jones

That's -- in their cloud is a new distribution opportunity for us altogether. Obviously, we're proud to associate ourselves with that brand anyway we can, and this is a new way we're associating ourselves with the brand in the cloud there.

Operator

And with that, ladies and gentlemen, we have no further questions on our roster. Therefore, Mr. O'Brien, I will turn the conference back over to you for any closing remarks.

Sean O'Brien

Thanks, Rufus. Thank you, all, for dialing in today. We appreciate your interest in PGi. If you have any follow-up questions, feel free to give me a call on (404) 262-8462. Thanks very much.

Operator

And ladies and gentlemen, this will conclude today's conference. Thank you for your participation.

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