RE'EM, Israel, May 10 /PRNewswire-FirstCall/ -- RRsat Global
Communications Network Ltd. (Nasdaq: RRST), a growing provider
of comprehensive content management and global distribution
services to the television and radio broadcasting industries, today
announced its financial results for the first quarter of 2010.
First Quarter 2010 Results:
Revenues for the first quarter of 2010 totaled
$25.9 million, an increase of 15.8%
compared to $22.3 million in the
first quarter of 2009.
Backlog of signed agreements, as of March 31, 2010, was at $165.2 million, including $63.7 million of revenues expected to be
recognized in the remainder of 2010, compared to a backlog of
$167.6 at the end of the previous
quarter. The decrease is mainly attributed to the weakness of
the Euro versus the US Dollar during the quarter, which was
partially offset by an increase in new contracts and the extension
of existing contracts.
Operating income for the first quarter of 2010 totaled
$3.8 million compared to $4.6 million in the first quarter of 2009 and to
$2.2 million in the previous
quarter.
Net income on a GAAP basis for the first quarter of 2010
was $4.3 million, a 42% increase from
$3.0 million in the first quarter of
2009. Adjusted Net Income was $2.6 million for the quarter, compared to
$2.8 million in the first quarter of
2009. Net income per diluted share on a GAAP basis for the
quarter was $0.24, compared to
$0.17 in the first quarter of 2009.
Adjusted net income per diluted share, totaled
$0.15, compared to $0.16 in the first quarter of 2009.
Adjusted EBITDA for the first quarter of 2010 totaled
$5.4 million, compared to
$6.0 million in the first quarter of
2009.
Cash, cash equivalents and marketable securities as at
March 31, 2010 was $40.1 million, compared with $47.5 million as at December 31, 2009. The difference in the
cash balance was mainly attributed to the $4
million the company paid out in dividends to its
shareholders during the first quarter, $3.5
million invested in capital expenditures and a negative
operating cash flow of $0.3
million.
Guidance for second quarter revenue is in the range of
$26.4 - $27.4 million. For
2010, revenue guidance remains unchanged in the range of
$107 - $110 million.
David Rivel, CEO of RRsat
commented, "We are pleased with our results and believe that
our strategy -- to become the largest broadcasting and play-out
service provider for content providers -- will produce further
positive developments. We have identified four key areas to
support our strategy: 1) further strengthen our position in our
legacy market of mid and small sized customers/broadcasters; 2)
increase our penetration into the major broadcasters' market, which
we have already started in 2009 and in the first quarter of 2010;
3) continue to evaluate M&A possibilities to compliment our
business; and 4) further enhance our infrastructure."
Mr. Rivel continued, "So far, we have seen significant advances
to support our strategy. We signed a distribution agreement
with FOX Sports to distribute FOX Sports' content to Europe, the Middle
East and North Africa via
the Eurobird-9 satellite. We also signed an agreement to
distribute Nickelodeon, part of the MTV Network, to Central and
Eastern Europe. This
represents only the initial stages of our penetration strategy,
which we believe provides significant growth potential. We
are seeking to continue expanding our services and to add new
channels for these customers, as well as other major broadcasters
with whom we are in the process of building and expanding
relationships," concluded Mr. Rivel.
Conference Call Information
Conference call scheduled later today, May 10, 2010 at 9:00 am
ET. On the call, Mr. David
Rivel, Founder & CEO, Mr. Gil
Efron, CFO, and Mr. Lior
Rival, VP Sales and Marketing 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: 1 888 668 9141
UK Dial-in Number: 0 800 917 5108
Israel Dial-in Number: 03 918 0609
International Dial-in Number: +972 3 918 0609
at:
9:00 am ET; 6:00 am PT; 2:00 pm
UK time; 4:00 pm Israel Time
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: www.rrsat.com. To access the telephone replay dial one
of the following numbers: 1-888-782-4291 (US) and +972 3 925 5900
(International).
Use of Non- GAAP Financial Measures
RRsat uses two financial measures, adjusted net income and
adjusted EBITDA, which are non-GAAP financial measures. RRsat
believes that both non-GAAP financial measures are principal
indicators of the operating and financial performance of its
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, the
non-cash income (loss) reflecting changes in the fair value of
embedded currency conversion derivatives resulting from the
application of SFAS 133 and the resulting income tax (increase)
decrease. Adjusted EBITDA is calculated by deducting
from 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, and adding non-cash equity-based
compensation charge, depreciation and amortization.
Management believes the non-GAAP financial measures (adjusted
net income and adjusted EBITDA) provided are useful to investors'
understanding and assessment of RRsat's on-going core operations
and prospects for the future. Management uses these non-GAAP
financial measures in order to evaluate the performance of the
company. However, such measures should not be considered in
isolation or as substitutes for results prepared in accordance with
GAAP. In addition, RRsat's adjusted EBITDA may not be
comparable to adjusted EBITDA as reported by other companies.
Reconciliations of the non-GAAP measures (adjusted net income
and adjusted EBITDA) to net income, the most comparable GAAP
measure, are provided in the schedules attached to this
release.
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 its 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. RRsat's comprehensive content management services
include producing and playing out TV content as well as providing
satellite newsgathering services (SNG). RRsat concurrently provides
these services to more than 545 television and radio channels,
covering more than 150 countries. Visit the company's website
www.RRsat.com for more information.
Safe Harbor Statement
This press release contains forward looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, including statements regarding (i) the growth of
our business and the television and radio broadcasting industries,
(ii) our expectation to expand our client base and sell
additional services to our existing client base, (iii) our ability
to successfully integrate the teleports we acquired, and (iv) our
ability to report future successes. These forward-looking
statements involve known and unknown risks and uncertainties and
are based on current expectations, assumptions, estimates and
projections about the companies and the industry as of the date of
this press release. The company undertakes no obligation to update
forward-looking statements to reflect subsequent occurring events
or circumstances, or to changes in its expectations, except as may
be required by law. Forward-looking statements are subject to risks
and uncertainties that may cause actual results to differ
materially from those contemplated by the forward-looking
statements, including the risks indicated in our filings with the
Securities and Exchange Commission (SEC). For more details, please
refer to our SEC filings and the amendments thereto, including our
Annual Report on Form 20-F for the year ended December 31, 2009 and our Current Reports on Form
6-K.
|
|
Company Contact Information:
Gil Efron, CFO
Tel: +972 8 861 0000
investors@rrsat.com
|
External Investor Relations Contacts:
Ehud Helft / Kenny Green
Tel: 1 646 201 9246
rrsat@ccgisrael.com
|
|
|
|
|
|
RRsat Global
Communications Network Ltd.
and its Subsidiaries
Consolidated
Statements of Operations
|
|
In thousands, except share
data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Year
ended
|
|
|
|
|
March
31
|
|
March
31
|
|
December 31
|
|
|
|
|
2010
|
|
2009
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
25,858
|
|
$
22,321
|
|
$
93,687
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
18,577
|
|
14,767
|
|
64,548
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
7,281
|
|
7,554
|
|
29,139
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
1,570
|
|
1,367
|
|
5,554
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
1,941
|
|
1,610
|
|
8,391
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
3,511
|
|
2,977
|
|
13,945
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
3,770
|
|
4,577
|
|
15,194
|
|
|
|
|
|
|
|
|
|
|
Interest and marketable
|
|
|
|
|
|
|
securities income
|
|
157
|
|
249
|
|
639
|
|
|
|
|
|
|
|
|
|
|
Currency fluctuation and
|
|
|
|
|
|
|
other financing income, net
|
(679)
|
|
(133)
|
|
299
|
|
|
|
|
|
|
|
|
|
|
Changes in fair value of
|
|
|
|
|
|
|
embedded currency
|
|
|
|
|
|
|
|
conversion derivatives
|
2,277
|
|
443
|
|
(1,326)
|
|
|
|
|
|
|
|
|
|
|
Other income, net
|
|
-
|
|
22
|
|
26
|
|
|
|
|
|
|
|
|
|
|
Income before taxes on
|
|
|
|
|
|
|
income
|
|
|
5,525
|
|
5,158
|
|
14,832
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
(1,279)
|
|
(2,164)
|
|
(3,254)
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
4,246
|
|
$ 2,994
|
|
$
11,578
|
|
|
|
|
|
|
|
|
|
|
|
RRsat Global Communications Network Ltd. and its
subsidiaries
Reconciliation of Adjusted Net Income and Adjusted
EBITDA
|
|
|
|
in thousands
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
|
March
31
|
|
March
31
|
|
|
|
|
2010
|
|
2009
|
|
Reconciliation of
Net Income to Adjusted Net Income:
|
|
|
|
|
Net income - as
reported
|
$
4,246
|
|
$ 2,994
|
|
Non-cash equity-based compensation
charge
|
106
|
|
104
|
|
Changes in fair
value of embedded currency conversion derivatives
|
(2,277)
|
|
(443)
|
|
Change in deferred
tax on embedded derivatives
|
569
|
|
115
|
|
Adjusted net
income
|
$
2,644
|
|
$ 2,770
|
|
|
|
|
|
|
|
|
Adjusted net income per diluted
ordinary share
|
$
0.15
|
|
$ 0.16
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Income to Adjusted EBITDA:
|
|
|
|
|
Net income - as
reported
|
$
4,246
|
|
$ 2,994
|
|
Interest and
marketable securities income
|
(157)
|
|
(249)
|
|
Currency fluctuation and other
financial expenses, net
|
679
|
|
133
|
|
Changes in fair value of embedded
currency conversion derivatives
|
(2,277)
|
|
(443)
|
|
Income tax expense
|
1,279
|
|
2,164
|
|
Non-cash equity-based compensation
charge
|
106
|
|
104
|
|
Depreciation and
amortization
|
1,501
|
|
1,312
|
|
Adjusted EBITDA
|
$ 5,377
|
|
$ 6,015
|
|
|
|
|
|
|
|
|
RRsat Global
Communications Network Ltd. and its Subsidiaries
Consolidated
Balance Sheets
|
|
In thousands except share
data
|
|
|
|
|
|
|
|
|
|
|
March
31
|
|
December 31
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
Cash and cash equivalents
|
$
16,376
|
|
$
14,941
|
|
Short term deposits
|
3,000
|
|
9,900
|
|
Marketable securities
|
20,745
|
|
22,708
|
|
Accounts receivable:
|
|
|
|
|
Trade (net of provision for doubtful
accounts of $4,611
|
|
|
|
|
and $4,484 as of March 31, 2010 and
December 31, 2009 respectively)
|
19,414
|
|
16,765
|
|
Other
|
818
|
|
559
|
|
Fair value of embedded currency
conversion derivatives
|
2,480
|
|
1,703
|
|
Deferred taxes
|
983
|
|
1,507
|
|
Prepaid expenses
|
1,550
|
|
1,984
|
|
Total current assets
|
65,366
|
|
70,067
|
|
|
|
|
|
|
Deposits and long-term
receivables
|
1,471
|
|
1,030
|
|
|
|
|
|
|
Long term prepaid
expenses
|
7,763
|
|
7,787
|
|
|
|
|
|
|
Deferred taxes
|
505
|
|
505
|
|
|
|
|
|
|
Assets held for employee severance
payments
|
1,736
|
|
1,664
|
|
|
|
|
|
|
Fixed assets, at cost, less
accumulated
|
|
|
|
|
depreciation and
amortization
|
31,498
|
|
29,119
|
|
|
|
|
|
|
Goodwill
|
3,734
|
|
3,734
|
|
|
|
|
|
|
Intangible assets, at cost, less
accumulated amortization
|
1,137
|
|
1,215
|
|
|
|
|
|
|
Total assets
|
$
113,210
|
|
$
115,121
|
|
|
|
|
|
|
|
RRsat Global
Communications Network Ltd. and its Subsidiaries
Consolidated
Balance Sheets (cont'd)
|
|
In thousands except share
data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31
|
|
December 31
|
|
|
|
|
|
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and shareholders'
equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
Accounts payable:
|
|
|
|
|
|
|
|
|
|
Trade
|
|
|
|
|
|
|
|
$
12,945
|
|
$
11,275
|
|
Other
|
|
|
|
|
|
|
|
1,740
|
|
2,255
|
|
Fair value of embedded
currency
|
|
|
|
|
|
|
|
|
conversion derivatives
|
|
|
|
|
|
500
|
|
2,000
|
|
Related parties
|
|
|
|
|
|
|
-
|
|
4
|
|
Deferred income
|
|
|
|
|
|
6,986
|
|
8,326
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
|
|
|
22,171
|
|
23,860
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long - term liabilities
|
|
|
|
|
|
|
|
|
|
Deferred income
|
|
|
|
|
|
5,777
|
|
6,731
|
|
Liability in respect of employee
severance payments
|
|
|
|
1,887
|
|
1,699
|
|
Deferred taxes
|
|
|
|
|
|
932
|
|
888
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total long - term
liabilities
|
|
|
|
|
|
8,596
|
|
9,318
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
|
|
|
|
30,767
|
|
33,178
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments, contingent liabilities
and liens
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity
|
|
|
|
|
|
|
|
|
|
Share capital:
|
|
|
|
|
|
|
|
|
|
Ordinary share NIS 0.01 par value each
(20,000,000 shares
|
|
|
|
|
|
|
authorized as of March 31, 2010 and
December 31, 2009; 17,326,716
|
|
|
|
|
|
shares issued and fully paid as of
March 31, 2010
|
|
|
|
|
|
|
|
and December 31, 2009)
|
|
|
|
40
|
|
40
|
|
Additional paid in capital
|
|
|
|
|
|
52,627
|
|
52,521
|
|
Retained earnings
|
|
|
|
|
|
|
29,690
|
|
29,407
|
|
Accumulated other comprehensive income
(loss)
|
|
|
|
|
86
|
|
(25)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders'
equity
|
|
|
|
|
|
$
82,443
|
|
$
81,943
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders'
equity
|
|
|
|
$
113,210
|
|
$
115,121
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RRsat
Global Communications
Network Ltd. and its Subsidiaries
Consolidated
Statements of Cash Flows
|
|
In thousands
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Year ended
|
|
|
|
March
31
|
|
March
31
|
|
December 31
|
|
|
|
2010
|
|
2009
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating
activities
|
|
|
|
|
|
|
|
Net income
|
|
$
4,246
|
|
$ 2,994
|
|
$
11,578
|
|
Adjustments required to reconcile net
income to
net
cash provided by operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
1,501
|
|
1,312
|
|
5,584
|
|
Provision for losses in account
receivable
|
|
127
|
|
174
|
|
2,421
|
|
Deferred taxes
|
|
531
|
|
(4)
|
|
(1,346)
|
|
Discount accretion and premium
amortization
|
|
|
|
|
|
|
|
of held- to- maturity securities,
net
|
|
(9)
|
|
47
|
|
299
|
|
Discount accretion and premium
amortization
|
|
|
|
|
|
|
|
of available- for- sale securities,
net
|
|
(93)
|
|
(89)
|
|
(396)
|
|
Changes in
liability for employee severance payments, net
|
|
116
|
|
85
|
|
(38)
|
|
Capital gains on sale of fixed assets,
net
|
|
-
|
|
(22)
|
|
(26)
|
|
Stock- based compensation
|
|
106
|
|
104
|
|
415
|
|
Changes in fair
value of embedded currency conversion derivatives
|
|
(2,277)
|
|
(443)
|
|
1,326
|
|
Profit from
trading securities, net
|
|
(49)
|
|
(96)
|
|
(340)
|
|
|
|
|
|
|
|
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
Increase in account receivable -
trade
|
|
(2,776)
|
|
(2,427)
|
|
(7,959)
|
|
Increase in related parties,
net
|
|
(4)
|
|
(8)
|
|
(21)
|
|
Increase in account receivable -
other
|
|
(259)
|
|
(164)
|
|
(142)
|
|
Decrease (increase) in prepaid
expenses
|
|
434
|
|
(176)
|
|
(594)
|
|
Increase (decrease) in deposits
and long-term receivables
|
|
(441)
|
|
1
|
|
761
|
|
Increase in account
payables
|
|
809
|
|
2,322
|
|
2,504
|
|
Increase (decrease) in deferred
income
|
|
(2,294)
|
|
(1,121)
|
|
2,928
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in)
operating activities
|
|
$
(332)
|
|
$
2,489
|
|
$
16,954
|
|
|
|
|
|
|
|
|
|
|
RRsat
Global Communications
Network Ltd. and its Subsidiaries
Consolidated
Statements of Cash Flows (cont'd)
|
|
In thousands
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Year ended
|
|
|
|
|
|
|
March
31
|
|
March
31
|
|
December 31
|
|
|
|
|
|
|
2010
|
|
2009
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
Investment in
fixed assets
|
|
$
(3,432)
|
|
$
(2,209)
|
|
$
(7,955)
|
|
Investment in
other assets
|
|
-
|
|
-
|
|
(161)
|
|
Proceeds
(investment) in short term deposits
|
|
6,900
|
|
(3,909)
|
|
(9,900)
|
|
Investments in
securities available- for- sale
|
|
(316)
|
|
(5,542)
|
|
(16,804)
|
|
Decrease
(increase) in trading securities, net
|
|
11
|
|
50
|
|
(13)
|
|
Proceeds from
securities available- for- sale
|
|
2,539
|
|
-
|
|
1,846
|
|
Proceeds from
securities held to maturity
|
|
28
|
|
3,198
|
|
4,652
|
|
Proceeds from sale
of fixed assets
|
|
-
|
|
51
|
|
53
|
|
|
|
|
|
|
|
|
|
Net cash provided
by (used in) investing activities
|
|
$
5,730
|
|
$
(8,361)
|
|
$
(28,282)
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
Dividend paid
|
|
|
|
$
(3,963)
|
|
$
-
|
|
$
(8,480)
|
|
Net cash used in
financing activities
|
|
$
(3,963)
|
|
$
-
|
|
$
(8,480)
|
|
|
|
|
|
|
|
|
|
Increase
(decrease) in
|
|
|
|
|
|
|
|
cash and cash
equivalents
|
|
$
1,435
|
|
$
(5,872)
|
|
$
(19,808)
|
|
|
|
|
|
|
|
|
|
Balance of cash
and cash equivalents at beginning of period
|
|
14,941
|
|
34,749
|
|
34,749
|
|
|
|
|
|
|
|
|
|
Balance of cash
and cash equivalents at end of period
|
|
$
16,376
|
|
$
28,877
|
|
$
14,941
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A. Non-cash
transactions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in
fixed assets
|
|
$
1,025
|
|
$ 390
|
|
$ 679
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
B. Supplementary
cash flow information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
paid
|
|
$
1,050
|
|
$ 1,585
|
|
$ 5,208
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE RRSat Global Communications Network Ltd.