RE'EM, Israel, Aug. 5 /PRNewswire-FirstCall/ --
Second Quarter 2010 Highlights
- Revenues for the second quarter increased 14.2% reaching
$25.7 million
- Gross margins reached 29.1% and operating margins totaled
14.6%
- Third quarter revenue guidance of $25 -
$26 million
- Ten year strategic alliance announced with BT's media and
broadcast division
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 second quarter of 2010.
Second Quarter 2010 Results:
Revenues for the second quarter of 2010 totaled
$25.7 million, an increase of 14.2%
compared to $22.5 million in the
second quarter of 2009.
Gross Profit for the second quarter of 2010 totaled
$7.5 million representing gross
margins of 29.1%, rising 2.7% from $7.3
million in the second quarter of the previous year.
Operating income for the second quarter of 2010 totaled
$3.7 million, representing operating
margins of 14.6%, compared to $4.3
million in the second quarter of 2009.
Backlog of signed agreements, as of June 30, 2010, was at $166.9 million, including $41.1 million of revenues expected to be
recognized in the remainder of 2010, compared to a backlog of
$165.2 at the end of the previous
quarter. The weakness of the Euro versus the US Dollar
resulted in a decrease of $5.2
million, which was offset by an increase of new contracts
and an extension of existing contracts.
Net income on a GAAP basis for the second quarter of 2010
was $2.5 million compared to
$3.0 million in the second quarter of
2009. Adjusted Net Income was $2.2 million for the quarter, compared to
$4.1 million in the second quarter of
2009. Net income per diluted share on a GAAP basis for the
quarter was $0.14, compared to
$0.17 in the second quarter of 2009.
Adjusted net income per diluted share, totaled
$0.12, compared to $0.24 in the second quarter of 2009.
Adjusted EBITDA for the second quarter of 2010 totaled
$5.4 million, compared to
$5.7 million in the second quarter of
2009.
Cash, cash equivalents and marketable securities as at
June 30, 2010 was $40.8 million, compared with $40.1 million as at March
31, 2010. The difference in the cash balance was
mainly attributed to a positive operating cash flow of $4.5m and $3.7
million invested in capital expenditures.
Dividend Distribution: On August
4, 2010, the Company's Board of Directors declared a cash
dividend in the amount of $0.15 per
ordinary share, and in the aggregate amount of approximately
$2.6 million. The dividend will be
payable on September 1, 2010 to all
of the Company's shareholders of record at the end of the trading
day on the NASDAQ on August 16, 2010.
According to the Israeli tax law, the Company will withhold at
source, 20% of the dividend amount payable to each shareholder,
subject to applicable exemptions. The Company's dividend policy is
described in detail in the Company's Annual Report on Form 20-F for
the year ended December 31, 2009.
Guidance for third quarter revenue is in the range of
$25 - $26 million. For 2010,
guidance has been adjusted to reflect the weakness of the Euro and
is in the range of $102 - $105
million.
David Rivel, CEO of RRsat,
commented, "This quarter we reported solid results and
profitability despite external factors such as weakness in the
Euro. We also made some significant advances in our strategy to
expand into key markets. We recently signed a ten-year
strategic alliance agreement with BT's media and broadcast
division. This exciting partnership will enable both
companies to grow their global media business by leveraging RRsat's
world-class content management and global distribution services
with BT's Global brand and fiber optic network. In addition,
we have succeeded in further penetrating the US market by adding 13
US television channels for US-targeted broadcasting using our
Galaxy 19 satellite platform. Many of these channels were
existing customers for their international broadcasting services
that expanded their services with us.
Mr. Rivel added, "As we continue to pursue our strategy of
becoming the largest distribution and play-out service for content
providers, we intend to continue to demonstrate solid results while
producing positive developments to achieve our goals."
Conference Call Information
Conference call scheduled later today, August 5, 2010 at 10:00 am
ET. 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: 0-800-
917-9141
|
|
Israel Dial-in Number: 03-
918-0644
|
|
International Dial-in Number:
+972-3-918-0644
|
|
at:
|
|
10:00 am Eastern Time; 7:00 am
Pacific Time; 3:00 pm UK Time; 5:00 pm Israel Time
|
|
|
Replay
A replay of the call will be available from the day after the
call. A link to the replay will be accessible from RRsat's website
at: www.rrsat.com. In addition, a telephone replay will be
available for two days following the call. To access the telephone
replay dial one of the following numbers:
1 888 295 2634 (US) and +972 3 925 5929 (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 550 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.
RRsat Global Communications
Network Ltd. and its Subsidiaries
Consolidated Statements of
Operations
|
|
In thousands, except share
data
|
|
|
|
|
Six months ended
|
|
Three months
ended
|
|
|
June 30
|
|
June 30
|
|
June 30
|
|
June 30
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$ 51,514
|
|
$ 44,794
|
|
$ 25,656
|
|
$ 22,473
|
|
Cost of revenues
|
36,766
|
|
29,941
|
|
18,189
|
|
15,174
|
|
Gross profit
|
14,748
|
|
14,853
|
|
7,467
|
|
7,299
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
Sales and marketing
|
3,129
|
|
2,711
|
|
1,559
|
|
1,344
|
|
General and
administrative
|
4,100
|
|
3,292
|
|
2,159
|
|
1,682
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
7,229
|
|
6,003
|
|
3,718
|
|
3,026
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
7,519
|
|
8,850
|
|
3,749
|
|
4,273
|
|
|
|
|
|
|
|
|
|
|
Interest and
marketable
securities
income
|
254
|
|
275
|
|
97
|
|
26
|
|
Currency fluctuation
and
other financing income,
net
|
(1,345)
|
|
271
|
|
(666)
|
|
404
|
|
Changes in fair value
of
embedded
currency
conversion
derivatives
|
2,827
|
|
(932)
|
|
550
|
|
(1,375)
|
|
Other income, net
|
-
|
|
25
|
|
-
|
|
3
|
|
Income before taxes
on
income
|
9,255
|
|
8,489
|
|
3,730
|
|
3,331
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
(2,551)
|
|
(2,510)
|
|
(1,272)
|
|
(346)
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$ 6,704
|
|
$ 5,979
|
|
$ 2,458
|
|
$ 2,985
|
|
|
|
|
|
|
|
|
|
RRsat Global Communications
Network Ltd. and its Subsidiaries
Consolidated Statements of
Operations (cont'd)
|
|
In thousands, except share
data
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
|
|
Three months
ended
|
|
|
Jun-30
|
|
Jun-30
|
|
Jun-30
|
|
Jun-30
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
Income per ordinary
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per
ordinary
share
|
$0.39
|
|
$0.35
|
|
$0.14
|
|
$0.17
|
|
|
|
|
|
|
|
|
|
|
Diluted income per
ordinary share
|
$0.38
|
|
$0.34
|
|
$0.14
|
|
$0.17
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number
of ordinary shares used
to
compute basic income
per
ordinary share
|
17,326,716
|
|
17,306,783
|
|
17,326,716
|
|
17,306,783
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number
of ordinary shares used
to
compute diluted
income
per ordinary
share
|
17,413,515
|
|
17,412,806
|
|
17,406,807
|
|
17,418,707
|
|
|
|
|
|
|
|
|
|
RRsat Global Communications
Network Ltd, and its subsidiaries
Reconciliation of Adjusted Net
Income and Adjusted EBITDA
|
|
in thousands except share
data
|
|
|
Six months ended
|
|
Three months
ended
|
|
|
Jun-30
|
|
Jun-30
|
|
Jun-30
|
|
Jun-30
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
Reconciliation of Net Income to
Adjusted
Net Income:
|
|
|
|
|
|
|
|
|
Net income - as
reported
|
$ 6,704
|
|
$ 5,979
|
|
$ 2,458
|
|
$ 2,985
|
|
Non-cash equity-based
compensation charge
|
214
|
|
208
|
|
108
|
|
104
|
|
Changes in fair value of
embedded currency
conversion
derivatives
|
(2,827)
|
|
932
|
|
(550)
|
|
1,375
|
|
Change in deferred tax on
embedded
derivatives
|
707
|
|
(242)
|
|
138
|
|
(357)
|
|
Adjusted net
income
|
$ 4,798
|
|
6,877
|
|
$ 2,154
|
|
$ 4,107
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income per diluted
ordinary share
|
$ 0.28
|
|
$ 0.39
|
|
$ 0.12
|
|
$ 0.24
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income to
Adjusted
EBITDA:
|
|
|
|
|
|
|
|
|
Net income - as
reported
|
$ 6,704
|
|
$ 5,979
|
|
$ 2,458
|
|
$ 2,985
|
|
Interest and marketable
securities income
|
(254)
|
|
(275)
|
|
(97)
|
|
(26)
|
|
Currency fluctuation and other
financial
income, net
|
1,345
|
|
(271)
|
|
666
|
|
(404)
|
|
Changes in fair value of
embedded currency
conversion
derivatives
|
(2,827)
|
|
932
|
|
(550)
|
|
1,375
|
|
Other income, net
|
-
|
|
(25)
|
|
-
|
|
(3)
|
|
Income tax expense
|
2,551
|
|
2,510
|
|
1,272
|
|
346
|
|
|
|
|
|
|
|
|
|
|
Non-cash equity-based
compensation charge
|
214
|
|
208
|
|
108
|
|
104
|
|
Depreciation and
amortization
|
3,063
|
|
2,657
|
|
1,562
|
|
1,345
|
|
Adjusted EBITDA
|
$10,796
|
|
$11,715
|
|
$5,419
|
|
$5,722
|
|
|
|
|
|
|
|
|
|
RRsat Global Communications
Network Ltd. and its Subsidiaries
Consolidated Balance
Sheets
|
|
In thousands except share
data
|
|
|
June 30
|
|
December 31
|
|
|
2010
|
|
2009
|
|
Current assets
|
|
|
|
|
Cash and cash
equivalents
|
$ 12,178
|
|
$ 14,941
|
|
Short term deposits
|
7,980
|
|
9,900
|
|
Marketable securities
|
20,621
|
|
22,708
|
|
Accounts receivable:
|
|
|
|
|
Trade (net of
provision for doubtful accounts of $4,725
and $4,484
as of June 30, 2010 and December 31, 2009 respectively)
|
18,070
|
|
16,765
|
|
Other
|
703
|
|
559
|
|
Fair value of embedded currency
conversion derivatives
|
4,570
|
|
1,703
|
|
Deferred taxes
|
938
|
|
1,507
|
|
Prepaid expenses
|
1,297
|
|
1,984
|
|
Total current
assets
|
66,357
|
|
70,067
|
|
|
|
|
|
|
Deposits and long-term
receivables
|
1,543
|
|
1,030
|
|
|
|
|
|
|
Long term prepaid
expenses
|
7,752
|
|
7,787
|
|
|
|
|
|
|
Deferred taxes
|
615
|
|
505
|
|
|
|
|
|
|
Assets held for employee
severance payments
|
1,695
|
|
1,664
|
|
|
|
|
|
|
Fixed assets, at cost, less
accumulated
depreciation and
amortization
|
34,073
|
|
29,119
|
|
|
|
|
|
|
Goodwill
|
3,734
|
|
3,734
|
|
|
|
|
|
|
Intangible assets, at
cost, less accumulated amortization
|
1,057
|
|
1,215
|
|
|
|
|
|
|
Total assets
|
$ 116,826
|
|
$ 115,121
|
|
|
|
|
|
RRsat Global Communications
Network Ltd. and its Subsidiaries
Consolidated Balance Sheets
(cont'd)
|
|
In thousands except share
data
|
|
|
June 30
|
|
December 31
|
|
|
2010
|
|
2009
|
|
Liabilities and shareholders'
equity
|
|
|
|
|
Current liabilities
|
|
|
|
|
Accounts payable:
|
|
|
|
|
Trade
|
$ 11,563
|
|
$ 11,275
|
|
Other
|
2,396
|
|
2,255
|
|
Fair value of embedded currency
conversion derivatives
|
2,040
|
|
2,000
|
|
Related parties
|
11
|
|
4
|
|
Deferred income
|
7,064
|
|
8,326
|
|
Total current
liabilities
|
23,074
|
|
23,860
|
|
|
|
|
|
|
Long - term
liabilities
|
|
|
|
|
Deferred income
|
6,067
|
|
6,731
|
|
Liability in respect of employee
severance payments
|
1,834
|
|
1,699
|
|
Deferred taxes
|
924
|
|
888
|
|
|
|
|
|
|
Total long - term
liabilities
|
8,825
|
|
9,318
|
|
|
|
|
|
|
Total liabilities
|
31,899
|
|
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 June 30,
2010 and December 31, 2009; 17,326,716
shares issued and fully
paid as of June 30, 2010
and December 31,
2009)
|
40
|
|
40
|
|
Additional paid in
capital
|
52,735
|
|
52,521
|
|
Retained earnings
|
32,148
|
|
29,407
|
|
Accumulated other comprehensive
income ( loss)
|
4
|
|
(25)
|
|
Total shareholders'
equity
|
$ 84,927
|
|
$ 81,943
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$ 116,826
|
|
$ 115,121
|
|
|
|
|
|
RRsat Global Communications
Network Ltd. and its Subsidiaries
Consolidated Statements of Cash
Flows
|
|
In thousands
|
|
|
Six months ended
|
|
Three months
ended
|
|
|
June 30
|
|
June 30
|
|
June 30
|
|
June 30
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating
activities
|
|
|
|
|
|
|
|
|
Net income
|
$ 6,704
|
|
$5,979
|
|
$ 2,458
|
|
$ 2,985
|
|
Adjustments required to
reconcile net income
to net cash provided by
operating activities
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
3,063
|
|
2,657
|
|
1,562
|
|
1,345
|
|
Provision for losses in account
receivable
|
241
|
|
430
|
|
114
|
|
256
|
|
Deferred taxes
|
487
|
|
(349)
|
|
(44)
|
|
(345)
|
|
Discount accretion and premium
amortization
of held- to- maturity
securities, net
|
(18)
|
|
(90)
|
|
(9)
|
|
(137)
|
|
Discount accretion and premium
amortization
of available- for- sale
securities, net
|
(180)
|
|
56
|
|
(87)
|
|
145
|
|
Changes in liability for
employee
severance payments,
net
|
104
|
|
88
|
|
(12)
|
|
3
|
|
Capital gains on sale of fixed
assets, net
|
-
|
|
(25)
|
|
-
|
|
(3)
|
|
Stock- based
compensation
|
214
|
|
208
|
|
108
|
|
104
|
|
Changes in fair value of
embedded
currency conversion
derivatives
|
(2,827)
|
|
932
|
|
(550)
|
|
1,375
|
|
Profit from trading securities,
net
|
39
|
|
(205)
|
|
88
|
|
(109)
|
|
|
|
|
|
|
|
|
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease (increase) in account
receivable - trade
|
(1,546)
|
|
(4,635)
|
|
1,230
|
|
(2,208)
|
|
Increase (decrease) in related
parties, net
|
7
|
|
17
|
|
11
|
|
25
|
|
Decrease (increase) in account
receivable - other
|
(144)
|
|
(143)
|
|
115
|
|
(673)
|
|
Decrease (increase) in prepaid
expenses
|
687
|
|
(233)
|
|
253
|
|
(57)
|
|
Decrease (increase) in
deposits
and long-term
receivables
|
(513)
|
|
17
|
|
(72)
|
|
16
|
|
Increase (decrease) in
account payables
|
(230)
|
|
1,638
|
|
(1,039)
|
|
10
|
|
Increase (decrease) in deferred
income
|
(1,926)
|
|
(1,090)
|
|
368
|
|
31
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating
activities
|
$ 4,162
|
|
$ 5,252
|
|
$ 4,494
|
|
$ 2,763
|
|
|
|
|
|
|
|
|
|
RRsat Global Communications
Network Ltd. and its Subsidiaries
Consolidated Statements of Cash
Flows
|
|
In thousands
|
|
|
Six months ended
|
|
Three months
ended
|
|
|
June 30
|
|
June 30
|
|
June 30
|
|
June 30
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
Cash flows from investing
activities
|
|
|
|
|
|
|
|
|
Investment in fixed
assets
|
$
(7,165)
|
|
$ (3,897)
|
|
$ (3,733)
|
|
$(1,688)
|
|
Proceeds (Investment) in short
term deposits
|
1,920
|
|
(7,209)
|
|
(4,980)
|
|
(3,300)
|
|
Investments in securities
available- for- sale
|
(523)
|
|
(11,447)
|
|
(207)
|
|
(5,905)
|
|
|
|
|
|
|
|
|
|
|
Decrease (increase) in trading
securities, net
|
(25)
|
|
68
|
|
(36)
|
|
18
|
|
Proceeds from securities
available- for- sale
|
2,803
|
|
1,070
|
|
264
|
|
1,070
|
|
Proceeds from securities held to
maturity
|
28
|
|
3,217
|
|
-
|
|
19
|
|
Proceeds from sale of fixed
assets
|
-
|
|
52
|
|
-
|
|
1
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing
activities
|
$
(2,962)
|
|
$(18,146)
|
|
$ (8, 692)
|
|
$(9,785)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
|
|
|
|
|
Dividend paid
|
$
(3,963)
|
|
$
(5,538)
|
|
$
-
|
|
$ (5,538)
|
|
Net cash used in financing
activities
|
$
(3,963)
|
|
$ (5,538)
|
|
$
-
|
|
$(5,538)
|
|
|
|
|
|
|
|
|
|
|
Decrease in cash and cash
equivalents
|
$ (2,763)
|
|
$(18,432)
|
|
$(4,198)
|
|
$(12,560)
|
|
|
|
|
|
|
|
|
|
|
Balance of cash and cash
equivalents
at beginning of
period
|
14,941
|
|
34,749
|
|
16,376
|
|
28,877
|
|
|
|
|
|
|
|
|
|
|
Balance of cash and cash
equivalents at
end of
period
|
$ 12,178
|
|
$ 16,317
|
|
$ 12,178
|
|
$16,317
|
|
|
|
|
|
|
|
|
|
|
A. Non-cash
transactions
|
|
|
|
|
|
|
|
|
Investment in fixed
assets
|
$ 1,338
|
|
$ 451
|
|
$ 1,338
|
|
$ 451
|
|
|
|
|
|
|
|
|
|
|
B. Supplementary cash flow
information
|
|
|
|
|
|
|
|
|
Income taxes paid
|
$ 1,695
|
|
$ 2,911
|
|
$ 670
|
|
$ 1,326
|
|
|
|
|
|
|
|
|
|
Company Contact
Information:
Gil Efron, CFO
Tel: +972 8 861 0000
investors@rrsat.com
|
External Investor Relations
Contacts:
Ehud Helft / Porat
Saar
Tel: 1 646 233 2161
rrsat@ccgisrael.com
|
|
|
|
SOURCE RRSat Global Communications Network Ltd
Copyright g. 5 PR Newswire