AIRPORT CITY BUSINESS PARK, Israel, May 17,
2012 /PRNewswire/ --
2012 First Quarter Highlights
- Revenues totaled $27.5 million,
increasing by 2% year over year.
- Adjusted Fully diluted earnings per share of $0.11 compared to $0.10 last year.
- Adjusted EBITDA of $4.2 million,
increasing by 5.7% from last year.
- Backlog as of March 31, 2012 at
$194 million.
- Second quarter revenue guidance of $28.0
- $29.0 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 first
quarter ended March 31, 2012.
First Quarter 2012 Results:
Revenues in the first quarter of 2012 totaled
$27.5 million, a 2.0% increase
compared with $26.9 million in the
first quarter of 2011 and a decrease of 4.7% compared with
$28.8 million in the previous
quarter.
Gross profit in the first quarter of 2012
totaled $6.1 million, compared with
$6.2 million in the first quarter of
2011 and $6.9 million in the previous
quarter. Gross margin in the first quarter of 2012 was
22.3%, compared with 23.0% in the same quarter last year and 23.8%
in the previous quarter.
Operating income for the first quarter of 2012 totaled
$2.0 million, representing an
operating margin of 7.1%, compared with $2.0
million in the first quarter of 2011, representing an
operating margin of 7.4%. Operating income in the previous
quarter totaled $2.4 million,
representing an operating margin of 8.5%.
Net income on a GAAP basis for
the first quarter of 2012 was $2.3
million, compared with $0.9
million in the first quarter of 2011 and $1.6 million in the previous quarter.
Fully diluted earnings per
share on a GAAP basis for the first quarter of 2012
was $0.13, compared with $0.05 in the first quarter of 2011 and
$0.09 in the previous quarter.
Adjusted net income totaled $1.9
million for the first quarter of 2012, compared with
$1.7 million in the first quarter of
2011 and $1.5 million in the previous
quarter. Adjusted fully diluted earnings per
share totaled $0.11 in the first
quarter of 2012, compared with $0.10
in the first quarter of 2011 and $0.09 in the previous quarter.
Adjusted EBITDA for the first quarter of 2012 totaled
$4.2 million, compared with
$4.0 million in the first quarter of
2011 and $4.9 million in the previous
quarter.
Cash, cash equivalents and marketable securities as of
March 31, 2012 totaled $34.4 million, an increase of $1.2 million compared with $33.2 million as of December 31, 2011. The net increase in the
cash balance is mainly attributable to a positive cash flow from
operating activities of $3.1 million
less capital expenditures of $2.3
million.
Backlog of signed agreements, as of March 31, 2012, totaled $194 million, including $69.1 million of revenues expected to be
recognized during the remainder of 2012, compared with a backlog of
$194 million at the end of the
previous quarter.
Guidance for revenue in the second quarter of 2012 is in
the range of $28.0 - $29.0 million,
and for full year 2012 remains in the range of $115 - $121 million. Guidance for gross
margin in the second quarter of 2012 is in the range of 22.5 -
23.5%.
David Rivel, CEO of RRsat
commented, "As we noted in the fourth quarter 2011 conference
call, our first quarter results were mainly impacted by the ending
of a large TV project which reduced our revenues compared with the
previous quarter and resulted in excess capacity that had a
negative impact on our margins. However, we are seeing a
healthy contract pipe line and expect to be back to sequential
growth and better gross margins by the second quarter. As
anticipated, we are also seeing a reduction in our capital
expenditures level and this will continue to have a positive impact
on our free cash flow."
Mr. Rivel continued, "We otherwise had some positive
activities at the Company during the quarter including the
activation of five new services, with each contract worth over
one million dollars. We also
announced the extension of our contract with the Vietnam TV channel
for global distribution, as well as signing a contract with ETV,
one of India's largest networks of
satellite TV channels. We are expanding our presence in the
ever growing sports market, having signed an agreement with
international sports broadcaster, Setanta, for the distribution of
a Russian version of its sports channel across Russian speaking
countries. And finally, we extended our contract with Baby
TV, which is part of FOX International, a major broadcaster.
Looking ahead to 2012, I believe we are on track with our
strategy and goal of offering superior services to a larger group
of customers, including major television networks."
Conference Call Information
Conference call scheduled later today, May 17, 2012 at 9:00 am
ET (4:00 pm Israel time). On the call, Mr.
David Rivel, Founder & CEO, Dr.
Shlomo Shamir, Chairman, Mr.
Itzhak Zion, 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 Eastern Time; 6:00 am Pacific Time; 2:00
pm UK Time; 4:00 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 3-925-5904 (International).
Use of Non-GAAP Financial Measures
In addition to the GAAP results included in this press release,
RRsat has also included non-GAAP measurements of results. RRsat
uses three financial measures, adjusted net income, adjusted net
income per share and adjusted EBITDA, which are non-GAAP financial
measures. RRsat believes that these non-GAAP financial measures are
principal indicators of the operating and financial performance of
its business. We have provided these non-GAAP measurements to help
investors better understand our core operating performance and
enhance comparisons of core operating performance from period to
period.
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, non-cash
expense resulting from amortization of acquired intangible assets,
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 of the above items.
The company has excluded intangible assets amortization expense
from its non-GAAP net income measurements, primarily because it
represents a significant non-cash expense and because the company
evaluates its performance excluding intangible assets amortization
expense. Amortization of intangible assets is consistent in amount
and frequency but is significantly affected by the timing and size
of the company's acquisitions. Investors should note that the use
of intangible assets contributed to the Company's revenues earned
during the periods presented and will contribute to the Company's
future period revenues as well. Intangible assets amortization
expense will recur in future periods.
Adjusted EBITDA is calculated by adding to operating income,
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.
The non-GAAP measurements are intended only as a supplement to
the comparable GAAP measurements and the company compensates for
the limitations inherent in the use of non-GAAP measurements by
using GAAP measures in conjunction with the non-GAAP measurements.
As a result, investors should consider these non-GAAP measurements
in addition to, and not in substitution for, or as superior to,
measurements of financial performance prepared in accordance with
GAAP.
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, adjusted net income per
share 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 the most comparable GAAP measures (net
income and operating income respectively), 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) guidance for revenue
for the second quarter of 2012 and full year 2012 and gross margin
in the second quarter of 2012;(ii) our expectations to decrease
capital expenditures in 2012, and the corresponding effect on free
cash flow;(iii) our planned expectations of our direct sales to
North America, Africa Africa and
Asia; (iv) our goal of offering
superior services to a larger group of customers, including major
television networks; (v) our expectation to expand our client base
and sell additional services to our existing client base;
(vi) our ability to report future successes; and (vii) 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, 2011 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
Three months Year
ended ended
---------------------- ---------- March March December
31 31 31
2012 2011 2011
----------- ----------- ----------
Revenues $ 27,459 $ 26,930 $ 112,920
Cost of revenues 21,325 20,737 86,939
----------- ----------- ---------- Gross profit 6,134 6,193 25,981
Operating expenses
Sales and marketing 1,611 1,744 7,067
General and administrative 2,570 2,447 10,130
----------- ----------- ---------- Total operating expenses 4,181 4,191 17,197
----------- ----------- ----------
Operating income 1,953 2,002 8,784
Interest and marketable securities income 154 116 400
Currency fluctuation and other financing
income (expenses), net 160 190 (740)
Changes in fair value of embedded currency
conversion derivatives 627 (1,000) (2,130)
Other expenses, net - - (1)
----------- ----------- ----------- Income before taxes on income 2,894 1,308 6,313
Income taxes (616) (439) (1,978)
----------- ----------- -----------
Net income $ 2,278 $ 869 $ 4,335
=========== =========== ===========
Earning per Ordinary Share
Basic earning per Ordinary Share 0.13 0.05 0.25
=========== =========== ===========
Diluted earning per Ordinary Share 0.13 0.05 0.25
=========== =========== ===========
Weighted average number of Ordinary
Shares used to compute basic earning per
Ordinary Share 17,346,561 17,346,561 17,346,561
=========== =========== ===========
Weighted average number of Ordinary
Shares used to compute diluted earning per
Ordinary Share 17,346,561 17,359,092 17,346,561
=========== =========== ===========
RRsat Global Communications Network Ltd. and its
Subsidiaries
Reconciliation of Adjusted Net Income and Adjusted EBITDA
In thousands except per share data
Three months ended
----------------------
March March
31 31
2012 2011
Reconciliation of Net Income to Adjusted Net --------- ---------
Income:
Net income - as reported $ 2,278 $ 869
Non-cash equity-based compensation charge 43 25
Intangible assets amortization expense 50 60
Changes in fair value of embedded currency
conversion derivatives (627) 1,000
Change in deferred tax on embedded derivatives 157 (240)
--------- ---------
Adjusted net income $ 1,901 $ 1,714
========= =========
Adjusted net income per diluted ordinary share $ 0.11 $ 0.10
Reconciliation of Net Income to Adjusted EBITDA:
Operating income $ 1,953 $ 2,002
Non-cash equity-based compensation charge 43 25
Depreciation and amortization 2,205 1,948
--------- ---------
Adjusted EBITDA $ 4,201 $ 3,975
========= =========
RRsat Global Communications Network Ltd. and its
Subsidiaries
Consolidated Balance Sheets
In thousands except share data
March December
31 31
2012 2011
---------- ----------
Current assets
Cash and cash equivalents $ 17,082 $ 14,443
Marketable securities 17,291 18,764
Accounts receivable:
Trade (net of provision for doubtful accounts of $7,572
and $6,892 as of March 31, 2012 and December 31, 2011
respectively) 20,255 19,402
Other 1,201 686
Fair value of embedded currency conversion derivatives 260 206
Deferred taxes 2,399 2,449
Prepaid expenses 2,375 2,223
---------- ----------
Total current assets 60,863 58,173
Fair value of embedded currency conversion
derivatives 330 591
Deposit and long- term prepaid expenses 2,090 2,043
Long-term land lease prepaid expenses 7,630 7,642
Assets held for employee severance payments 1,854 1,757
Fixed assets, at cost, less accumulated depreciation
and amortization 44,524 45,495
Goodwill 3,734 3,734
Intangible Assets, at cost, less accumulated amortization 519 586
---------- ----------
Total assets $ 121,544 $ 120,021
========== ==========
RRsat Global Communications Network Ltd. and its
Subsidiaries
Consolidated Balance Sheets
(cont'd)
In thousands except share data
March 31 December 31
2012 2011
--------- -----------
Liabilities and shareholders' equity
Current liabilities
Accounts payable:
Trade $ 10,705 $ 11,547
Dividend Payable 3,990 -
Other 2,458 2,335
Fair value of embedded currency
conversion derivatives 536 990
Deferred income 8,817 8,787
---------- ----------
Total current liabilities 26,506 23,659
---------- ----------
Long - term liabilities
Deferred income 7,463 7,192
Fair value of embedded currency
conversion derivatives 600 980
Liability in respect of employee
severance payments 1,931 1,819
Deferred taxes 1,837 1,664
---------- ----------
Total long - term liabilities 11,831 11,655
---------- ----------
Total liabilities 38,337 35,314
---------- ----------
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, 2012 and December 31, 2011;
17,346,561 shares issued and fully
paid as of March 31, 2012 and
December 31, 2011) 40 40
Additional paid in capital 53,053 53,010
Retained earnings 30,015 31,727
Accumulated other comprehensive income (loss) 99 (70)
---------- ----------
Total shareholders' equity $ 83,207 $ 84,707
---------- ----------
Total liabilities and shareholders' equity $ 121,544 $ 120,021
========== ==========
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
2012 2011 2011
Cash flows from operating activities ---------- ------------ ------------
Net income $ 2,278 $ 869 $ 4,335
Adjustments required to reconcile net
income to net cash provided by operating
activities:
Depreciation and amortization 2,205 1,948 8,477
Provision for losses in accounts receivable 680 594 2,217
Deferred taxes 166 234 248
Discount accretion and premium amortization
of available- for- sale securities, net (113) (106) (325)
Changes in liability for employee severance
payments, net 15 11 19
Capital loss on sale of fixed assets, net - - 1
Stock-based compensation 43 25 117
Changes in fair value of embedded currency
conversion derivatives (627) 1,000 2,130
Loss (Profit) from trading securities, net (46) (10) 158
Changes in assets and liabilities:
Increase in account receivable - trade (1,533) (536) (1,759)
Decrease (increase) in account receivable
- other (515) (41) 626
Increase in prepaid expenses (152) (429) (78)
Decrease (increase) in deposits and
long-term prepaid expenses (47) (34) 158
Increase in account payable 438 2,000 17
Increase (decrease) in deferred income 301 (2,056) (96)
--------- --------- ----------
Net cash provided by operating activities $ 3,093 $ 3,469 $ 16,245
--------- --------- ----------
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
2012 2011 2011
---------- ---------- -----------
Cash flows from investing activities
Investment in fixed assets $ (2,330) $ (6,534) $ (14,657)
Investment in long term prepaid expenses (13) (13) (27)
Investment in available-
for- sale securities (2,777) (3,523) (8,005)
Decrease (increase) in trading
securities, net 1,512 30 (231)
Proceeds from sale of securities available-
for- sale 3,123 5,295 12,161
Proceeds from sale of fixed assets 31 - 29
---------- ---------- ----------
Net cash used in investing activities $ (454) $ (4,745) $ (10,730)
---------- ---------- ----------
Cash flows from financing activities
Dividend paid - $ (2,602) $ (4,163)
---------- ---------- ----------
Net cash used in financing activities - $ (2,602) $ (4,163)
---------- ---------- ----------
Increase (decrease) in cash and cash
equivalents $ 2,639 $ (3,878) $ 1,352
Balance of cash and cash equivalents
at beginning of Period $ 14,443 $ 13,091 $ 13,091
---------- ---------- ----------
Balance of cash and cash equivalents
at end of Period $ 17,082 $ 9,213 $ 14,443
========== ========== =========
A. Non-cash transactions
Investment in fixed assets $ 136 $ 2,140 $ 1,293
========== ========== =========
Dividend payable $ 3,990 - -
========== ========== =========
B. Supplementary cash flow information
Income taxes paid $ 610 $ 383 $ 1,694
========== ========== =========
Company Contact Information:
Itzhak Zion, 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