RRST (MM)

RRSat Presents Record Revenue and Strong Growth in Profit OMER, Israel, November 15 /PRNewswire-FirstCall/ -- - Financial Highlights for the Third Quarter of 2006: - Revenues of $11.5 million, a year-over-year increase of 47%. - Adjusted net income of $2 million, a year-over-year increase of 65%. - Adjusted EBITDA of $3.3 million, a year-over-year increase of 57%. RRSat Global Communications Network Ltd. (NASDAQ:RRST), today announced its financial results for the third quarter and nine month period ended September 30, 2006. Total Revenues were $11.5 million, an increase of 46.9% compared with $7.9 million in the third quarter of 2005 and an increase of 12.2% compared to $10.3 million in the second quarter of 2006. Revenues from 'occasional and SNG services' contributed $1.5 million, an increase of $700 thousand over the amount recorded in the previous quarter. This increase was mainly attributed to the additional media that was present in Israel due to the war in the northern part of the country during the quarter, which contributed to increased demand for the Company's services. This additional demand level is unlikely to be replicated in the coming quarters. Operating Income was $2.7 million, or 23.6% of revenues. This is compared with $1.7 million, or 21.2% of revenues, as reported in the third quarter of 2005 and $2.6 million, or 24.9% of revenues, as reported in the prior quarter. Net Income on a GAAP basis was $2.0 million, or 17.1% of revenues, an increase of 70.1% compared to $1.2 million as reported in the third quarter of 2005. Net income in the second quarter of 2006 was $2.0 million, representing 19.5% of revenues. Earnings per Diluted Share on a GAAP basis was $0.15, compared with $0.09 in the third quarter of 2005 and $0.16 in the prior quarter. Adjusted net income and EBITDA are provided on a non-GAAP basis as the company believes these are a better measure of the Company's actual performance and enables better comparison of the performance of the core business between periods on an on-going basis. Adjusted Net Income was $2.0 million, or 17.1% of revenues, an increase of 70.1% compared to $1.2 million as reported in the third quarter of 2005. Adjusted net income in the second quarter of 2006 was $2.0 million, representing 19.5% of revenues. Adjusted Earnings per Diluted Share was $0.15, compared with $0.09 in the third quarter of 2005 and $0.16 in the prior quarter. Adjusted EBITDA was $3.3 million, an increase of 57.3% compare to $2.1 million in the third quarter of 2005 and an increase of 6.9% compare to $3.1 million in the second quarter of 2006. David Rivel, CEO of RRSat commented, "We are proud to provide our first quarterly results as a publicly listed NASDAQ company, and we are pleased that we have provided a strong set of results. Our top line grew by 47% over last year and our business continues the strong growth we have seen over the last few quarters." Mr. Rivel concluded, "I would like to provide a warm welcome to all our new investors and I hope we will be able to share the rewards of our success with you for a long time. We remain very much committed to continually growing our profitability and maximizing value for our shareholders." Conference Call and Webcast Information Conference Call Scheduled later today, November 15, 2006 at 9am EST. On the call, Mr. David Rivel, Founder & CEO and Mr. Gil Efron, CFO will review and discuss the results and will be available to answer investor questions. To participate, please call one of the following teleconferencing numbers. Please begin placing your calls at least 10 minutes before the conference call commences. If you are unable to connect using the toll-free numbers, please try the international dial-in number. US Dial-in Number: 1-888-281-1167 UK Dial-in Number: 0800-917-9141 ISRAEL Dial-in Number: 03-918-0610 INTERNATIONAL Dial-in Number: +972-3-918-0610 A replay of the call will be available from the day after the call. The link to the replay will be accessible from RRSat's website at: http://www.rrsat.com/. In addition, there will be a telephone replay available for two days following the call. The replay numbers are: 1-866-276-1002 (US); 0800-051-8913 (UK) and +972-3-925-5927 (International). Use of Non- GAAP Financial Information RRSat use two financial measures, adjusted net income and adjusted EBITDA, which are not GAAP financial measures. RRSat believe that both measures are principal indicators of the operating and financial performance of our business. Adjusted net income is calculated based on the net income in our financial statements excluding non-cash equity-based compensation charges recorded in accordance with SFAS 123R and the net effect of embedded derivative income/expenses according to SFAS 133. EBITDA is a non-GAAP financial measure generally defined as earnings before interest, taxes, depreciation and amortization. RRSat use the non-GAAP financial measure adjusted EBITDA by adding to net income interest and marketable securities income, currency fluctuation and other financial income (expenses), net, changes in fair value of embedded currency conversion derivatives, other income (expenses), net, income taxes, non-cash equity-based compensation charge and depreciation and amortization. Management believes the non-GAAP financial information (adjusted net income and adjusted EBITDA) provided is useful to investors' understanding and assessment of our on-going core operations and prospects for the future.Reconciliations of comparable GAAP measurements to the non-GAAP measurements (adjusted net income and adjusted EBITDA) are provided within the schedules attached to this release. Forward Looking Statements This press release may contain statements that qualify as "forward-looking statements" under the Private Securities Litigation Reform Act of 1995, including statements made by Mr. Rivel concerning the strength of our business and its growth and profitability. Factors which may affect future operating results are discussed under "Risk Factors" in the Prospectus dated October 31, 2006, which RRSat has filed with the Securities and Exchange Commission and which is available on the SEC Web site (http://www.sec.gov/). About RRSat Global Communications Network Ltd RRSat Global Communications Network Ltd. (NASDAQ:RRST) provides global, comprehensive, content management and distribution services to the rapidly expanding television and radio broadcasting industries. Through our proprietary "RRSat Global Network," composed of satellite and terrestrial fiber optic transmission capacity and the public Internet, RRSat is able to offer high-quality and flexible global distribution services for content providers. Our comprehensive content management services include producing and playing out TV content as well as providing satellite newsgathering services (SNG). RRSat concurrently provide these services to more than 265 television channels and more than 80 radio channels, covering more than 150 countries. Visit the company's website http://www.rrsat.com/ for more information. FINANCIAL TABLES FOLLOW RRSat Global Communications Network Ltd, Statements of Operations In thousands, except share data Nine months ended Three months ended Year ended September 30 September September 30 September December 30 30 31 2006 2005 2006 2005 2005 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) Revenues $ 31,243 $ 22,093 $ 11,539 $ 7,853 $ 31,311 Cost of revenues 19,753 13,881 7,326 5,321 19,798 Gross profit 11,490 8,212 4,213 2,532 11,513 Operating expenses Sales and marketing 1,401 1,281 524 343 1,704 General and 2,590 1,717 969 526 2,356 administrative Total operating 3,991 2,998 1,493 869 4,060 expenses Operating income 7,499 5,214 2,720 1,663 7,453 Interest and marketable securities income 122 128 39 73 140 Currency fluctuation and other financing income (expenses), net 227 131 (2) 41 (2) Changes in fair value of embedded currency conversion 222 (1,368) 26 (47) (1,375) derivatives Other income 4 9 - - 36 (expenses), net Income before taxes 8,074 4,114 2,783 1,730 6,252 on income Income taxes 2,516 1,289 808 569 2,007 Net income $ 5,558 $ 2,825 $ 1,975 $ 1,161 $ 4,245 Income per ordinary share Basic income per ordinary share 0.42 0.22 0.15 0.09 0.33 Diluted income per ordinary share 0.42 0.22 0.15 0.09 0.33 Weighted average number of ordinary share used to compute basic income per ordinary share 13,047,300 12,908,700 13,047,300 12,908,700 12,921,300 Weighted average number of Ordinary share used to compute diluted income per ordinary share 13,047,300 13,034,700 13,047,300 13,034,700 13,034,700 Nine months ended Three months ended Year ended September September September September December 30 30 30 30 31 2006 2005 2006 2005 2005 Reconciliation of Net Income to Adjusted Net Income: Net income - as reported $ 5,558 $ 2,825 $ 1,975 $ 1,161 $4,245 ........................................... Non-cash equity-based ..... 44 15 20 5 21 compensation charge Changes in fair value of embedded currency conversion derivatives.......(222) 1,368 (26) 47 1,375 Change in deferred . tax on embedded derivatives 69 (465) 7 (16) (470) Adjusted net income...................... 5,449 3,743 1,976 1,197 5,171 Nine months ended Three months ended Year ended September September September September December 30 30 30 30 31 2006 2005 2006 2005 2005 Reconciliation of Net Income to Adjusted EBITDA: Net income as $ 5,558 $ 2,825 $ 1,975 $ 1,161 $ 4,245 reported.............................................. Interest and marketable securities (income)......... (122) (128) (40) (73) (140) Currency fluctuation and other financial (income) expenses,net.....(227) (131) 2 (41) 2 Changes in fair value of embedded currency .....(222) 1,368 (26) 47 1,375 conversionderivatives Other expenses (income), net....................... (4) (9) (36) Income tax expense...................2,516 1 ,290 808 569 2,007 Non-cash equity-based compensation charge......... 44 15 20 5 21 Depreciation and amortization......... 1,623 1,257 594 444 1,760 Adjusted EBITDA....................9,166 6,487 3,333 2,112 9,234 RRSat Global Communications Network Ltd, Balance Sheets (In thousands, except share data) September 30 December 31 2006 2005 (Unaudited) (Audited) Current assets Cash and cash equivalents $ 640 $ 2,060 Marketable securities 1,376 1,222 Accounts receivable: Trade (net of provision for doubtful account of $ 736 and $ 369 as of September 30, 2006 and December 31, 9,711 5,625 2005, respectively) Other 1,054 822 Fair value of embedded currency conversion 520 279 derivatives Deferred taxes 149 86 Prepaid expenses 447 342 Total current assets 13,897 10,436 Deposits and long-term receivables 1,027 791 Assets held for employee severance 475 359 payments Fixed assets, at cost, less accumulated depreciation and amortization 11,604 8,823 Deferred offering costs 261 - Total assets $ 27,264 $ 20,409 September 30 December 31 2006 2005 (Unaudited) (Audited) Liabilities and shareholders' equity Current liabilities Account payable: Trade $ 4,012 $ 2,739 Other 1,793 1,682 Fair value of embedded currency conversion 208 189 derivatives Deferred income 2,955 1,770 Total current liabilities 8,968 6,380 Long-term liabilities Deferred income 3,216 2,861 Liability in respect of employee severance 592 370 payments Deferred taxes 353 291 Total long-term liabilities 4,161 3,522 Total liabilities 13,129 9,902 Shareholders' equity Share capital Ordinary share NIS 0.01 par value each (20,000,000 authorized as of September 30, 2006 and December 31, 2005, 13,047,300 shares issued and fully paid as of September 30, 2006 and December 31, 2005 - - Additional paid in capital 3,857 3,812 Retained earnings 10,278 6,695 Total shareholders' equity $ 14,135 $ 10,507 Total liabilities and shareholders' equity $ 27,264 $ 20,409 Contact Information: Gil Efron, CFO RRSat Global Communications Network Email: Tel: +972-8-861-0000 DATASOURCE: RRSat Global Communications Network Ltd CONTACT: Contact Information: Gil Efron, CFO, RRSat Global Communications Network, Email: , Tel: +972-8-861-0000

Copyright