AIRPORT CITY BUSINESS PARK, Israel, November 10,
2011 /PRNewswire/ --
Third Quarter 2011 Highlights
- Revenues totaled $28.6 million, a
16.1% increase year on year.
- Backlog as of September 30, 2011
at $195 million.
- Increase in 2011 annual revenue guidance to $111-113 million.
RRsat Global Communications Network Ltd. (NASDAQ: RRST),
a leading provider of comprehensive content management and global
distribution services to the television and radio broadcasting
industries, today announced its financial results for the third
quarter ended September 30, 2011.
Third Quarter 2011 Results:
Revenues in the third quarter of 2011 totaled
$28.6 million, an increase of 0.4%
compared with $28.5 million in the
previous quarter and a 16.1% increase compared with $24.7 million in the third quarter of 2010.
Gross Profit in the third quarter of 2011 totaled
$6.4 million, representing a gross
margin of 22.3%, compared with gross profit of $6.6 million in the previous quarter,
representing a gross margin of 23.0%. Gross profit in the
third quarter of 2010 totaled $5.8
million, representing a gross margin of 23.7%.
Operating income for the third quarter of 2011 totaled
$1.8 million, representing an
operating margin of 6.4%, compared with operating income of
$2.5 million in the previous quarter,
representing an operating margin of 8.8%. Operating income in
the third quarter of 2010 totaled $1.8
million, representing an operating margin of 7.4%. The
decline in operating income is partially attributed to a decline in
gross profit as well as higher operating costs.
Backlog of signed agreements, as of September 30, 2011, totaled $195 million, including $25 million of revenues expected to be recognized
during the remainder of 2011, compared to a backlog of $204 million at the end of the previous quarter.
Net loss on a GAAP basis for the third quarter of 2011
was $0.2 million compared with income
of $2.1 million in the previous
quarter and income of $0.6 million in
the third quarter of 2010. Net loss per share on a
fully diluted basis under GAAP for the third quarter of 2011 was
$0.01, compared with net income
per share of $0.12 in the previous
quarter and net income per share of $0.04 in the third quarter of 2010.
Adjusted net income totaled $0.8
million for the third quarter of 2011, compared with
$2.2 million in the previous quarter
and $2.3 million in the third quarter
of 2010. Adjusted net income per share on a fully
diluted basis totaled $0.04 in the
third quarter of 2011, compared with $0.13 in the previous quarter and $0.13 in the third quarter of 2010.
Adjusted EBITDA for the third quarter of 2011
totaled $4.0 million, compared with
$4.5 million in the previous quarter
and $3.6 million in the third quarter
of 2010.
Cash, cash equivalents and marketable securities as of
September 30, 2011 totaled
$28.7 million, compared with
$30.6 million as of June 30, 2011. The net decrease in the cash
balance is mainly attributed to capital expenditures of
$2.1 million and a dividend payment
of $1.6 million, offset by positive
cash flow from operating activities of $2.1
million.
Guidance for revenue in the fourth quarter of 2011 is in
the range of $27 - $29 million and
for full year 2011 the Company is increasing its guidance to the
range of $111 - $113 million from
$108 - $112 million. Guidance
for gross margin in the fourth quarter of 2011 is set at 22-24%.
David Rivel, CEO of RRsat
commented, "The global-economic environment impacted our
results. In addition, our top line did not grow as much as we
would have liked while our operating expenses increased due to our
infrastructure expansion, which we completed this quarter.
Mr. Rivel continued, "Our teleport in Emek HaEla, Israel, is now fully operational. It
is the biggest infrastructure upgrade in our Company's history
and allows us to greatly expand our range of services offered as
well as enhance our uplink and downlink capabilities. This
teleport also houses RRsat's advanced Network Operations Center,
which enables us to connect and manage our customer services across
the entire RRsat Global Network. This is a key development as
it enables us to offer superior services to a larger group of
customers, including major television networks."
Conference Call Information
Conference call scheduled later today, November 10, 2011 at 10:00
am ET (5:00 pm Israel time). On the call, Mr.
David Rivel, Founder & CEO, Mr.
David Aber, 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:
1-888-407-2553
UK Dial-in Number: 0-800-917-5108
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: http://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:
1 888 782 4291 (US) and +972 3 925 5918 (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 FASB ASC Topic
718, the non-cash income (loss) reflecting changes in the fair
value of embedded currency conversion derivatives resulting from
the application of FASB ASC Topic 815 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 uses these non-GAAP financial measures to assess
its operational performance, for financial and operational
decision-making, and as a means to evaluate period-to-period
comparisons on a consistent basis. Management believes that these
non-GAAP financial measures provide meaningful supplemental
information regarding the Company's performance by excluding
certain non-cash expenses that are not directly attributable to its
core operating results. However, such measures should not be
considered in isolation or as substitutes for results prepared in
accordance with GAAP.
Non-GAAP financial measures have limitations as an analytical
tool and should not be considered in isolation from or as a
substitute for the Company's GAAP results. The Company expects to
continue reporting non-GAAP financial measures, adjusting for the
items described above, and the Company expects to continue to incur
expenses similar to the non-cash, non-GAAP adjustments described
above. Accordingly, the exclusion of these and other similar items
in the presentation of non-GAAP financial measures should not be
construed as an inference that these costs are unusual, infrequent
or non-recurring. Moreover, because not all companies use identical
measures and calculations, the presentation of adjusted net income
and adjusted EBITDA may not be comparable to other similarly titled
measures of other companies. These limitations are compensated for
by using adjusted net income and adjusted EBITDA in conjunction
with traditional GAAP financial measures.
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, end-to-end, content management and distribution services to
the rapidly expanding television and radio broadcasting industries,
covering more than 150 countries. Through its RRsat Global Network,
composed of satellite and terrestrial fiber optic capacity and the
public Internet, RRsat provides high-quality and flexible global
distribution services 24/7 to more than 630 channels reaching
multiplatform operators, Internet TV and direct-to-home viewers
worldwide and also offers occasional use services for sports, news
and events with a fleet of flyaways and over 10 transportable
satellite news gathering services (SNG) units. More than 130
television and radio channels use RRsat's advanced production and
playout centers comprising comprehensive media asset management
services. Visit the company's website http://www.rrsat.com
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, (iv) our ability to develop and commercialize the
RRinternetTV service, (v) our expectation to extend the average
length of our contracts in the future, (vi) our ability to develop,
expand and commercialize our HD Platform, (vii) our ability to
report future successes, (viii) our ability to expand our activity
in the American market, and (ix) our intention to distribute
dividends in the future and the size of any dividends declared.
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,
2010 and our Current Reports on Form 6-K.
FINANCIAL TABLES
FOLLOW
RRsat Global Communications Network Ltd. and its
Subsidiaries
Consolidated Statements of
Operations
In thousands, except share data
Nine months ended Three months ended
---------------------- ----------------------
September September September September
30 30 30 30
2011 2010 2011 2010
----------- ---------- ----------- ----------
Revenues $ 84,094 $ 76,187 $ 28,646 $ 24,673
Cost of revenues 64,964 55,593 22,272 18,827
----------- ---------- ----------- ----------
Gross profit 19,130 20,594 6,374 5,846
----------- ---------- ----------- ----------
Operating expenses
Sales and marketing 5,332 4,760 1,878 1,631
General and administrative 7,463 6,480 2,658 2,380
----------- ---------- ----------- ----------
Total operating expenses 12,795 11,240 4,536 4,011
----------- ---------- ----------- ----------
Operating income 6,335 9,354 1,838 1,835
Interest and marketable
securities income 319 434 97 180
Currency fluctuation and
other financing income
(expenses), net (367) (941) (649) 404
Changes in fair value of
embedded currency
conversion derivatives (2,359) 802 (1,168) (2,025)
Other expenses, net (6) - (6) -
----------- ---------- ----------- ----------
Income before taxes on
income 3,922 9,649 112 394
Income taxes (1,153) (2,296) (292) 255
----------- ---------- ----------- ----------
Net income (loss) $ 2,769 $ 7,353 $ (180) $ 649
=========== ========== =========== ==========
RRsat Global Communications Network
Ltd. and its Subsidiaries
Consolidated Statements of Operations(cont'd)
In thousands, except share data
Nine months ended Three months ended
----------------------- ----------------------
September September September September
30 30 30 30
2011 2010 2011 2010
----------- ----------- ----------- -----------
Income (loss) per
ordinary share
Basic income (loss)
per ordinary
share $0.16 $0.42 $(0.01) $0.04
=========== =========== =========== ===========
Diluted income (loss) per
ordinary share $0.16 $0.42 $(0.01) $0.04
=========== =========== =========== ===========
Weighted average number
of ordinary shares used to
compute basic income per
ordinary share 17,346,561 17,326,716 17,346,561 17,326,716
=========== =========== =========== ===========
Weighted average number
of ordinary shares used to
compute diluted income
per ordinary share 17,346,561 17,400,793 17,346,561 17,370,905
=========== =========== =========== ===========
RRsat Global Communications Network Ltd. and its
subsidiaries
Reconciliation of Adjusted Net Income
and Adjusted EBITDA
in thousands except share data
Nine months ended Three months ended
---------------------- ----------------------
September September September September
30 30 30 30
2011 2010 2011 2010
----------- ---------- ----------- ----------
Reconciliation of Net
Income to Adjusted Net
Income:
Net income (loss)
- as reported $ 2,769 $ 7,353 $ (180) $ 649
Non-cash equity-based
compensation charge 73 321 45 107
Changes in fair value
of embedded currency
conversion derivatives 2,359 (802) 1,168 2,025
Change in deferred tax
on embedded derivatives (566) 200 (280) (506)
----------- ---------- ----------- ----------
Adjusted net income $ 4,635 $ 7,072 $ 753 $ 2,275
=========== ========== =========== ==========
Adjusted net income per
diluted ordinary share $ 0.27 $ 0.41 $ 0.04 $ 0.13
Reconciliation of Net
Income to Adjusted EBITDA:
Net income (loss)
- as reported $ 2,769 $ 7,353 $ (180) $ 649
Interest and marketable
securities income (319) (434) (97) (180)
Currency fluctuation and
other financial income
(expenses), net 367 941 649 (404)
Changes in fair value
of embedded currency
conversion derivatives 2,359 (802) 1,168 2,025
Income tax expense 1,153 2,296 292 (255)
Non-cash equity-based
compensation charge 73 321 45 107
Depreciation and
amortization 6,089 4,713 2,102 1,650
Other expenses, net 6 - 6 -
----------- ---------- ----------- ----------
Adjusted EBITDA $12,497 $14,388 $3,985 $3,592
=========== ========== =========== ==========
RRsat Global Communications Network Ltd. and its
Subsidiaries
Consolidated Balance Sheets
In thousands except share data
September December
30 31
2011 2010
---------- ---------
Current assets
Cash and cash equivalents $ 9,259 $ 13,091
Marketable securities 19,438 22,516
Accounts receivable:
Trade (net of provision for doubtful accounts of $6,793
and $5,641 as of September 30, 2011 and
December 31, 2010 respectively) 20,751 19,860
Other 412 1,312
Fair value of embedded currency conversion derivatives 323 893
Deferred taxes 2,320 1,657
Prepaid expenses 2,328 2,145
---------- ---------
Total current assets 54,831 61,474
Fair value of embedded currency conversion
derivatives 715 1,185
Deposits and long-term receivables 2,020 2,201
Long- term and prepaid expenses 7,660 7,709
Deferred taxes 23 501
Assets held for employee severance payments 1,790 2,015
Fixed assets, at cost, less accumulated
depreciation and amortization 45,415 40,779
Goodwill 3,734 3,734
Intangible Assets, at cost, less
accumulated depreciation
and amortization 658 897
---------- ---------
Total assets $ 116,846 $ 120,495
========== =========
RRsat Global Communications Network Ltd. and its
Subsidiaries
Consolidated Balance Sheets
(cont'd)
In thousands except share data
September December
30 31
2011 2010
---------- ---------
Liabilities and shareholders' equity
Current liabilities
Accounts payable:
Trade $ 11,143 $ 13,194
Other 2,685 2,455
Fair value of embedded currency
conversion derivatives 1,094 349
Related parties 26 55
Deferred income 6,369 8,456
---------- ---------
Total current liabilities 21,317 24,509
---------- ---------
Long - term liabilities
Deferred income 8,131 7,619
Fair value of embedded currency
conversion derivatives 1,346 772
Liability in respect of employee severance payments 1,842 2,058
Deferred taxes 1,224 1,125
---------- ---------
Total long - term liabilities 12,543 11,574
---------- ---------
Total liabilities 33,860 36,083
---------- ---------
Commitments, contingent liabilities and liens
Shareholders' equity
Share capital:
Ordinary share NIS 0.01 par value each (20,000,000 shares
authorized as of September 30, 2011 and
December 31, 2010; 17,346,561 shares issued and
fully paid as of
September 30, 2011 and December 31, 2010) 40 40
Additional paid in capital 52,966 52,893
Retained earnings 30,161 31,555
Accumulated other comprehensive loss (181) (76)
---------- ---------
Total shareholders' equity $ 82,986 $ 84,412
---------- ---------
Total liabilities and shareholders' equity $ 116,846 $ 120,495
========== =========
RRsat Global Communications Network Ltd. and its
Subsidiaries
Consolidated Statements of Cash
Flows
In thousands
Nine months ended Three months ended
---------------------- ----------------------
September September September September
30 30 30 30
2011 2010 2011 2010
----------- ---------- ----------- ----------
Cash flows from operating
activities
Net income (loss) $ 2,769 $ 7,353 $ (180) $ 649
Adjustments required to
reconcile net income
to net cash provided by
operating activities
Depreciation and
amortization 6,089 4,713 2,102 1,650
Provision for losses in
account receivable 1,152 1,125 51 884
Deferred taxes (55) (177) (176) (664)
Discount accretion and
premium amortization
of held- to- maturity
securities, net - (15) - 3
Discount accretion and
premium amortization
of available- for- sale
securities, net (338) (310) (115) (130)
Changes in liability
for employee
severance payments, net 9 98 48 (6)
Stock- based compensation 73 321 45 107
Changes in fair value
of embedded
currency conversion
derivatives 2,359 (802) 1,168 2,025
Loss (Profit) from
trading securities, net 138 (91) 157 (130)
Capital loss on sale
of fixed assets, net 6 - 6 -
Changes in assets and
liabilities:
Decrease (increase) in
account receivable - trade (2,043) (4,997) (787) (3,451)
Increase in related
parties, net (29) (5) (59) (12)
Decrease (increase) in
account receivable - other 900 (68) 171 76
Decrease (increase) in
prepaid expenses (183) 549 91 (138)
Decrease (increase) in
deposits and long-term
receivables 181 (654) (37) (141)
Increase (decrease) in
accounts payable 587 (1,354) (1,069) (1,124)
Increase (decrease) in
deferred income (1,575) (509) 685 1,417
----------- ---------- ----------- ----------
Net cash provided by
operating activities $ 10,040 $ 5,177 $ 2,101 $ 1,015
----------- ---------- ----------- ----------
RRsat Global Communications Network Ltd. and its
Subsidiaries
Consolidated Statements of Cash Flows
(cont'd)
In thousands
Nine months ended Three months ended
---------------------- ----------------------
September September September September
30 30 30 30
2011 2010 2011 2010
----------- ---------- ----------- ----------
Cash flows from investing
activities
Investment in fixed assets $(12,853) $ (10,426) $ (2,083) $ (3,261)
Investment in long term
prepaid expenses (22) - (9) -
Proceeds (Investment) in
short term deposits - 5,900 - 3,980
Investments in securities
available- for- sale (4,781) (4,126) (641) (3,603)
Increase in trading
securities, net (21) (21) (20) 4
Proceeds from securities
available- for- sale 7,944 5,120 2,105 2,317
Proceeds from securities
held to maturity - 780 - 752
Proceeds from sale of
fixed assets 24 - 24 -
----------- ---------- ----------- ----------
Net cash provided by (used
in) investing activities $ (9,709) $ (2,773) $ (624) $ 189
----------- ---------- ----------- ----------
Cash flows from financing
activities
Dividend paid $ (4,163) $ (6,562) $ (1,561) $ (2,599)
----------- ---------- ----------- ----------
Net cash used in
financing activities $ (4,163) $ (6,562) $ (1,561) $ (2,599)
----------- ---------- ----------- ----------
Decrease in cash and
cash equivalents $ (3,832) $ (4,158) $ (84) $(1,395)
Balance of cash and cash
equivalents
at beginning of period 13,091 14,941 9,343 12,178
----------- ---------- ----------- ----------
Balance of cash and cash
equivalents at
end of period $ 9,259 $ 10,783 $ 9,259 $ 10,783
=========== ========== =========== ==========
A. Non-cash transactions
Investment in fixed assets $ 724 $ 1,932 $ 724 $ 1,770
=========== ========== =========== ==========
B. Supplementary cash flow
information
Income taxes paid $ 1,104 $ 2,636 $ 402 $ 941
=========== ========== =========== ==========
Company Contact Information:
David Aber, CFO
Tel: +972-3-928-0777
Email: 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