PRIMUS Telecommunications Reports Second Quarter 2009 Financial Results

MCLEAN, VA--(Marketwire - August 13, 2009) - PRIMUS Telecommunications Group, Incorporated
(PRIMUS) (OTCBB: PMUG)

-- Company Emerges From Bankruptcy; Reduces Debt 55% to $256.3 Million
-- Q2 Net Revenue of $196.7 Million, up 1.2% Sequentially
-- Q2 Income from Operations of $14.2 million, up 3.9% Sequentially
-- Q2 Adjusted EBITDA of $20.4 Million, up 3.9% Sequentially

PRIMUS Telecommunications Group, Incorporated (PRIMUS) (OTCBB: PMUG), a
global, facilities-based integrated communications services provider,
announced results for the second quarter 2009. Net revenue was $196.7
million; Income from Operations was $14.2 million; Adjusted EBITDA was
$20.4 million; and Net Income was $25.4 million.

Chairman and Chief Executive Officer K. Paul Singh stated, "On July 1, we
successfully exited our expedited prearranged Chapter 11 restructuring with
a significantly strengthened capital structure and no major disruption to
our operating units around the world as, by design, they were excluded from
the proceedings. Our debt has been reduced by over 55% to $256.3 million
and, to date, we are tracking ahead of the 2009 Adjusted EBITDA projection
of $66.0 million contained in our Plan of Reorganization."

Mr. Singh continued, "Second quarter 2009 results were stable despite the
challenging economy and our conservative approach to sales and marketing
spend during the preceding two quarters. Our operating units around the
world executed within our expectations, and this execution, combined with
aggressive cost management and favorable currency translation, delivered
sequential growth in Adjusted EBITDA and generated $14.2 million in free
cash flow. We look forward to discussing our post-Chapter 11 business
plan, our outlook for the remainder of 2009 and our longer-term strategy on
our September 23, 2009 strategic update call."

Second Quarter 2009 Financial Results

Second quarter 2009 results reflect operations recorded during the Chapter
11 proceedings from which PRIMUS emerged on July 1, 2009. PRIMUS will
adopt the "fresh start" provisions of SOP No. 90-7 in the third quarter of
2009, which requires that all assets and liabilities be restated to their
fair value. Certain of these fair values may differ materially from the
values recorded on the accompanying Consolidated Condensed Balance Sheets.
Additionally, the Company must also adopt any changes in generally accepted
accounting principles (GAAP) that it is otherwise required to adopt within
twelve months of such date. For these reasons, the Company's financial
statements for periods subsequent to July 1, 2009, the Effective Date of
the emergence from bankruptcy, will not be comparable to previous periods.

Average Exchange Rates

Approximately 80% of the Company's net revenue is derived from sales and
operations outside the United States. The table below presents the average
exchange rates used to translate second quarter 2009 results and the
historical currency rates used in previous quarters presented.

Second Quarter First Quarter Second Quarter
(in $US) 2009 2009 2008
--------------- --------------- ---------------
Australian Dollar 0.758 0.664 0.943
--------------- --------------- ---------------
Canadian Dollar 0.857 0.805 0.990
--------------- --------------- ---------------
United Kingdom Pound 1.547 1.434 1.971
--------------- --------------- ---------------
Euro 1.360 1.304 1.563
--------------- --------------- ---------------

Net revenue, exclusive of the currency effect, decreased $11.1 million, or
5.7%, from the first quarter of 2009. Reported net revenue, inclusive of a
favorable currency impact of $13.4 million, increased $2.2 million to
$196.7 million in the second quarter of 2009 from $194.5 million in the
first quarter of 2009. On a year-over-year basis, exclusive of the
currency effect, net revenue decreased $6.1 million, or 2.6%. Inclusive of
an unfavorable currency effect of $33.1 million, net revenue decreased
$39.2 million to $196.7 million from $235.9 million in the year ago
quarter.

Net Revenue by Major Operating Segment

The following details second quarter 2009 and sequential and year-ago
comparisons by major operating segment.

Canada Second Quarter 2009 First Quarter 2009 Second Quarter 2008
------------------- ------------------ -------------------
($US in 000s) $55,061 $53,245 $68,989
------------------- ------------------ -------------------
Summary Variance Exclusive of Currency Effect
Net revenue declined $1.5 million and $5.3 million, sequentially and
year-over-year, respectively. The sequential decline is comprised of
$1.0 million from voice services and $0.8 million from prepaid services,
partially offset by $0.3 million of growth in internet, data and hosting
services. The year-over-year decline is comprised of declines in voices
services of $6.0 million partially offset by $0.7 million of growth in data
and hosting services net revenue. The effect of foreign currency was a
favorable $3.3 million on a sequential basis and an unfavorable $8.6
million year-over-year.

Australia Second Quarter 2009 First Quarter 2009 Second Quarter 2008
------------------- ------------------ -------------------
($US in 000s) $58,475 $52,027 $75,992
------------------- ------------------ -------------------
Summary Variance Exclusive of Currency Effect
Net revenue declined $0.8 million and $3.2 million sequentially and
year-over-year, respectively. The sequential decline is comprised of $0.3
million from residential voice services, $0.4 million from business voice
services and $0.3 million from internet, data and hosting services,
partially offset by $0.2 million growth in wireless services. The
year-over-year decline is comprised of $5.5 million from residential
voice, broadband and dial-up services, partially offset by growth of $2.3
million in services to commercial customers. The effect of foreign
currency was a favorable $7.3 million on a sequential basis and an
unfavorable $14.3 million year-over-year.

Wholesale Second Quarter 2009 First Quarter 2009 Second Quarter 2008
------------------- ------------------ -------------------
($US in 000s) $50,279 $54,203 $48,866
------------------- ------------------ -------------------
Summary Variance Exclusive of Currency Effect
Sequential net revenue declined $5.8 million while year-over-year net
revenue increased $8.4 million. The effect of foreign currency was a
favorable $1.9 million on a sequential basis and an unfavorable $7.0
million year-over-year.

United States Second Quarter 2009 First Quarter 2009 Second Quarter 2008
------------------- ------------------ -------------------
($US in 000s) $16,918 $18,095 $22,445
------------------- ------------------ -------------------
Summary Variance
Net revenue decreased sequentially and year-over-year through residential
and small business customer losses and usage declines. Revenue decreased
$1.2 million, or 6.5%, sequentially and $5.5 million, or 24.6%,
year-over-year.

Europe Second Quarter 2009 First Quarter 2009 Second Quarter 2008
------------------- ------------------ -------------------
($US in 000s) $13,031 $13,637 $16,925
------------------- ------------------ -------------------
Summary Variance Exclusive of Currency Effect
Net revenue declined $1.2 million and $1.5 million sequentially and
year-over-year, respectively. The sequential decline is primarily
attributable to the loss of $1.4 million in UK-based dial-around services
partially offset by continued growth of $0.2 million in retail services in
Primus France. The year-over-year decline is comprised of the loss of
$1.6 million in UK-based dial-around services and $0.9 million of retail
voice services partially offset by continued growth of $1.0 million in
retail services in Primus France. The effect of foreign currency was a
favorable $0.6 million on a sequential basis and an unfavorable $2.4
million year-over-year.

Net revenue less cost of revenue was $70.8 million, or 36.0% of net
revenue, compared to $65.1 million, or 33.5% of net revenue, in the prior
quarter and $93.4 million, or 39.6% of net revenue, in the year-ago
quarter. The sequential margin percentage improvement reflects the
continued efforts to contain costs, a shift in product mix including less
low-margin wholesale revenue and the benefit of a $1.5 million cost of
sales dispute settlement. The year-over-year margin percentage decline is
reflective of a second quarter 2008 non-recurring reduction to cost of
revenue of $5.8 million from a favorable Australian regulatory ruling.

Selling, general and administrative (SG&A) expense was $50.4 million, or
25.6% of net revenue, compared to expense of $45.4 million, or 23.4% of net
revenue in the prior quarter, and $70.0 million, or 29.7% of net revenue,
in the year-ago quarter. The sequential increase in SG&A expense reflects a
$3.2 million increase from foreign currency translation and a $1.4 million
increase in advertising, sales and marketing and a $1.3 million increase in
compensation and severance accruals, partially offset by a $0.8 million
decrease in other SG&A. The year-over-year decrease in SG&A reflects a $7.5
million decrease from foreign currency translation, a $5.4 million decrease
in advertising, sales and marketing costs, a $5.8 million decrease in
salaries and general and administrative expenses, and a $0.9 million
reduction in occupancy and professional fees.

Income from operations was $14.2 million, an increase of $0.6 million from
$13.6 million in the prior quarter and a decrease of $1.0 million from
$15.2 million in the year-ago quarter.

Adjusted EBITDA was $20.4 million, or 10.4% of net revenue, compared to
$19.7 million, or 10.1% of net revenue, in the prior quarter and $23.5
million, or 10.0% of net revenue, in the year-ago quarter. The sequential
improvement reflects a $1.8 million increase from currency translation and
the variances described above. The year-over-year decline includes the $5.8
million benefit from the Australian regulatory ruling recorded in the prior
year quarter. Adjusted EBITDA is a non-GAAP measure -- see non-GAAP
measure reconciliations and descriptions below.

Interest expense was $3.4 million, a decrease of $7.4 million from $10.8
million in the prior quarter and a $10.2 million decrease from $13.6
million in the year-ago quarter. The sequential and year-over-year
decreases are attributable to debt obligations that are subject to
compromise as a consequence of the Chapter 11 restructuring process; and,
therefore, not accruing interest from the Chapter 11 Petition Date to the
Effective Date. Liabilities subject to compromise include the 8% Senior
Notes, 141/4% Senior Secured Notes, 33/4% Convertible Notes, 5%
Exchangeable Senior Notes, 123/4% Senior Notes and the Step Up Convertible
Subordinated Debentures. Interest expense in each of the third and fourth
quarters of 2009 is anticipated to be in the $8.0 million range.

Net income was $25.4 million, or $0.15 per diluted share, compared to $14.0
million, or $0.08 per diluted share, in the prior quarter and $46.5
million, or $0.25 per diluted share in the year-ago quarter. Net income for
the second quarter of 2009 includes a $24.2 million foreign currency
transaction gain and a $8.3 million expense from reorganization items,
reflecting professional fees related to the Chapter 11 cases. Net income in
the first quarter 2009 reflected a $16.6 million gain from reorganization
items as a result of the Chapter 11 filing and a loss of $3.0 million in
foreign currency transactions. Net income for the second quarter 2008
included a $32.2 million gain on the early extinguishment or restructuring
of debt and an $8.1 million foreign currency transaction gain.

The number of shares outstanding used to calculate diluted earnings per
share in the second quarter of 2009 was 173.1 million. This amount will
decrease significantly in future quarters based upon the current number of
basic shares outstanding of 9.6 million and the effect of dilutive common
stock equivalents upon the Company's emergence from Chapter 11.

Balance Sheet, Liquidity and Capital Resources

As previously announced, on July 1, 2009, PRIMUS emerged from Chapter 11
with a strengthened capital structure and significantly reduced debt
obligations. Under the terms of the Plan of Reorganization, PRIMUS reduced
its debt by 55% to $256.3 million from $572.4 million, reduced interest
payments by approximately 50% and extended certain debt maturities. PRIMUS
exited bankruptcy with the following debt and equity instruments:

-- $123.5 million of 141/4% Senior Subordinated Secured Notes with an
extended maturity until May 2013;
-- $95.8 million variable rate Term Loan due February 2011 (reinstated
and amended);
-- $29.5 million variable rate Canadian Credit Facility due May 2011
(amended);
-- $7.6 million of capital lease / vendor financing agreements;
-- Newly issued Class A warrants to certain former debt holders to
purchase up to an aggregate of 3,000,000 shares of new common stock at
strike prices ranging from $12.22 to $20.50 per share, subject to
adjustment;
-- Newly issued Class B warrants to certain former debt holders to
purchase up to an aggregate of 1,500,000 shares of new common stock at a
strike price of $26.01 per share, subject to adjustment;
-- Contingent Value Rights to holders of old common stock representing
the right to receive up to 2,665,000 shares of new common stock after the
Company's equity value reaches a certain threshold;
-- 9,600,000 shares of new common stock to certain former debt holders;
-- 400,000 performance based restricted stock units granted to Company
management;
-- 400,000 service based stock options granted to Company management and
employees with a strike price of $12.22 per share, subject to adjustment;
-- 100,000 performance based stock options granted to Company management

PRIMUS ended the second quarter 2009 with $41.5 million in unrestricted
cash and cash equivalents up from $32 million at March 31, 2009. Cash uses
during the quarter were comprised of $2.9 million in capital expenditures,
$5.3 million for debt reduction, $3.8 million for interest, $0.5 million
for taxes and $0.8 million for payment of reorganization costs. These uses
were offset by $20.4 million of Adjusted EBITDA, $1.3 million from
favorable working capital movements and $1.1 million from currency
movements. During the second half of 2009 the Company expects to make
approximately $16 million in cash payments for previously accrued
reorganization fees and income and indirect taxes, which would bring our
"adjusted" cash balance at June 30, 2009 to $25 million.

Free Cash Flow for the second quarter 2009 was $14.2 million compared to
$1.9 million in the prior quarter and $5.1 million in the year-ago
quarter. PRIMUS defines Free Cash Flow as net cash provided by operating
activities less cash used in the purchase of property and equipment. Free
Cash Flow is a non-GAAP measure -- see non-GAAP measure reconciliations and
descriptions below.

Thomas R. Kloster, Chief Financial Officer, commented, "During the second
quarter, while Chapter 11 proceedings were underway at the holding company
level, we focused our operating units on serving our customers seamlessly.
Simultaneously, we continued to manage aggressively our cost of sales and
SG&A expenditures to maximize free cash flow generation."

Six Months Results

Net revenue was $391.2 million for the first six months of 2009 compared to
$461.3 million for the first six months of 2008. Adjusted EBITDA was $40.1
million for the first six months of 2009 compared to $38.7 million in the
first six months of 2008. Net income was $39.4 million for the first six
months of 2009 compared to $43.5 million in the first six months of 2008.

Conference Call to Discuss Strategic Update

PRIMUS will hold a conference call on Wednesday, September 23, 2009 at 8:30
A.M. (EST) to discuss its outlook for the remainder of 2009 and its
longer-term strategy. The call can be accessed on the Internet via the
Investor Relations section of PRIMUS' web site at www.primustel.com or by
dialing (866) 305-6438 (domestic) or (706) 679-7161 (international),
Conference ID # 24469714. Please access the call 10-15 minutes prior to the
scheduled start time.

The webcast will also be archived on PRIMUS' website. A telephonic replay
of this conference call will also be available by dialing (706) 645-9291 or
(800) 642-1687 and using the conference ID above from 11:30 A.M. (EST) on
September 23 until 11:59 P.M. (EST) time on September 30.

About PRIMUS Telecommunications Group, Incorporated

PRIMUS Telecommunications Group, Incorporated is a facilities-based
integrated global communications services provider offering international
and domestic voice, voice-over-Internet protocol (VOIP), Internet,
wireless, data and hosting services to business and residential retail
customers and other carriers located primarily in the United States,
Canada, Australia, the United Kingdom and western Europe. PRIMUS provides
services over its global network of owned and leased transmission
facilities, including approximately 500 points-of-presence (POPs)
throughout the world, ownership interests in undersea fiber optic cable
systems, 18 carrier-grade international gateway and domestic switches, and
a variety of operating relationships that allow it to deliver traffic
worldwide. Founded in 1994, PRIMUS is based in McLean, Virginia.

Non-GAAP Financial Measures

This release includes certain non-GAAP financial measures as defined under
SEC rules, which include Adjusted EBITDA, Adjusted Diluted Income (Loss)
Per Common Share, and Free Cash Flow. As required by SEC rules, PRIMUS has
provided a reconciliation of these measures to the most directly comparable
GAAP measures, which is contained in the tables to this release and on our
website at www.primustel.com. Additionally, information regarding the
purpose and use for these non-GAAP financial measures is set forth with
this press release in our Current Report on Form 8-K filed with the SEC on
August 13, 2009 and available on our website.

Safe Harbor

Statements in this press release concerning post-restructuring financial
condition, prospects, cash flow and investments, "adjusted" cash balances,
fresh start accounting, second half 2009 financial performance, financial
condition and ongoing impacts on our operations and objectives constitute
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. Such statements are based on current expectations, and are not
strictly historical statements. In some cases, you can identify
forward-looking statements by terminology such as "if," "may," "should,"
"believe," "anticipate," "future," "forward," "potential," "estimate,"
"reinstate," "opportunity," "goal," "objective," "exchange," "growth,"
"outcome," "could," "expect," "intend," "plan," "strategy," "provide,"
"commitment," "result," "seek," "pursue," "ongoing," "include" or the
negative of such terms or comparable terminology. These forward-looking
statements inherently involve certain risks and uncertainties, although
they are based on our current plans or assessments which are believed to be
reasonable as of the date of this filing. Factors and risks that could
cause actual results or circumstances to differ materially from those set
forth or contemplated in forward-looking statements include, without
limitation: (i) the ability to service substantial indebtedness; (ii)
customer, vendor, carrier and third-party responses to our Chapter 11 plan
confirmation; and (iii) the risk factors or uncertainties listed from time
to time in our filings with the Securities and Exchange Commission
(including those listed under captions "MD&A -- Liquidity and Capital
Resources -- Short- and
Long-Term Liquidity Considerations and Risks;" "Special Note Regarding
Forward-Looking Statements;" and "Risk Factors" in our annual report on
Form 10-K and quarterly reports on Form 10-Q) which cover matters and risks
including but not limited to (a) the general fluctuations in the exchange
rates of currencies, particularly any strengthening of the United States
dollar relative to foreign currencies of the countries where we conduct our
foreign operations; (b) the possible inability to raise additional capital
or refinance indebtedness when needed, or at all, whether due to adverse
credit market conditions, our credit profile or otherwise; (c) a
continuation or worsening of turbulent or weak financial and capital market
conditions; (d) a continuation or worsening of global recessionary economic
conditions, including the effects of such conditions on our customers and
our accounts receivables and revenues; (e) fluctuations in prevailing trade
credit terms due to past Chapter 11 filings or uncertainties concerning our
financial position, or otherwise; and (f) adverse regulatory rulings or
changes in the regulatory schemes or requirements and regulatory
enforcement in the markets in which we operate and uncertainty regarding
the nature and degree of regulation relating to certain services. As such,
actual results or circumstances may vary materially from such
forward-looking statements or expectations. Readers are also cautioned not
to place undue reliance on these forward-looking statements which speak
only as of the date these statements were made. We are not necessarily
obligated to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.

(tables follow)

PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)

For the Three Months For the Six Months
Ended Ended
June 30, June 30,
-------------------- --------------------
2009 2008 2009 2008
--------- --------- --------- ---------
NET REVENUE $ 196,742 $ 235,897 $ 391,216 $ 461,331

OPERATING EXPENSES
Cost of revenue (exclusive
of depreciation shown
below) 125,914 142,495 255,288 283,979
Selling, general and
administrative 50,400 69,969 95,836 138,827
Depreciation and
amortization 6,250 8,091 12,346 16,050
(Gain) loss on sale or
disposal of assets 16 115 (43) (2,465)
--------- --------- --------- ---------
Total operating expenses 182,580 220,670 363,427 436,391
--------- --------- --------- ---------

INCOME FROM OPERATIONS 14,162 15,227 27,789 24,940

INTEREST EXPENSE (3,359) (13,554) (14,135) (28,747)
ACCRETION ON DEBT DISCOUNT, NET - 217 189 187
GAIN ON EARLY EXTINGUISHMENT OR
RESTRUCTURING OF DEBT - 32,177 - 34,487
INTEREST AND OTHER INCOME 161 2,127 396 3,189
FOREIGN CURRENCY TRANSACTION
GAIN 24,170 8,134 21,121 9,841
--------- --------- --------- ---------

INCOME FROM CONTINUING
OPERATIONS BEFORE REORGANIZATION
ITEMS AND INCOME TAXES 35,134 44,328 35,360 43,897

REORGANIZATION ITEMS, net (8,271) - 8,297 -
--------- --------- --------- ---------

INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES 26,863 44,328 43,657 43,897

INCOME TAX BENEFIT (EXPENSE) (1,110) 2,382 (3,907) (38)
--------- --------- --------- ---------

INCOME FROM CONTINUING
OPERATIONS 25,753 46,710 39,750 43,859

LOSS FROM DISCONTINUED
OPERATIONS, net of tax (283) (21) (676) (66)
GAIN FROM SALE OF DISCONTINUED
OPERS., net of tax - - 251 -
--------- --------- --------- ---------

NET INCOME 25,470 46,689 39,325 43,793
Less: Net (income) loss
attributable to the
noncontrolling interest (104) (165) 32 (268)
--------- --------- --------- ---------

NET INCOME ATTRIBUTABLE TO
PRIMUS TELECOMMUNICATIONS
GROUP, INCORPORATED $ 25,366 $ 46,524 $ 39,357 $ 43,525
========= ========= ========= =========

BASIC INCOME PER COMMON SHARE:
Income from continuing
operations attributable to
Primus Telecommunications
Group, Incorporated $ 0.18 $ 0.33 $ 0.28 $ 0.31
Loss from discontinued
operations (0.00) (0.00) (0.00) (0.00)
Gain from sale of discontinued
operations - - 0.00 -
--------- --------- --------- ---------
Net income attributable to
Primus Telecommunications
Group, Inc. $ 0.18 $ 0.33 $ 0.28 $ 0.31
========= ========= ========= =========

DILUTED INCOME PER COMMON
SHARE:
Income from continuing
operations attributable t