Adjusted net income up 23% YoY to $3.8 million; Backlog increases
to $171 million RE'EM, Israel, Nov. 12 /PRNewswire-FirstCall/ --
RRsat Global Communications Network Ltd. (NASDAQ:RRST), a rapidly
growing 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, 2009. Third Quarter 2009 Highlights --
Record revenues of $24.1 million, growing 20% over last year. --
Operating income reaches $4.2 million; adjusted EBITDA reaches $5.7
million; -- Net income reaches $2.9 million; adjusted net income
reaches $3.8 million; -- 18 new contracts commenced in the quarter,
12 with new customers and 6 with existing customers; and --
Introduces fourth quarter guidance, forecasts sequential growth
with revenues of $25.1 - $25.6 million. Third Quarter 2009 Results
Revenues for the third quarter of 2009 totaled $24.1 million, an
increase of 20% compared to $20.1 million in the third quarter of
2008. Gross profit for the third quarter of 2009 totaled $7.5
million, an increase of 14% compared to $6.6 million in the third
quarter of 2008. Gross margin for the third quarter of 2009 totaled
31.0% compared to 32.7% in the third quarter of 2008. The main
factors that negatively affected the gross margins were the
appreciation of the Israeli Shekel against the US Dollar during the
quarter, and an increase in available capacity in anticipation of
future demand. Operating income for the third quarter of 2009
totaled $4.2 million, an increase of 5% compared to $4.0 million in
the third quarter of 2008. Operating income was affected by the
lower gross margins as described above and the weakness of the US
Dollar versus the Israeli Shekel, in which a certain portion of
operating expenses are denominated. Net income on a GAAP basis for
the third quarter of 2009 was $2.9 million, compared to $4.0
million in the third quarter of 2008. Net income per diluted share
on a GAAP basis was $0.17, compared to $0.23 in the third quarter
of 2008. Adjusted EBITDA for the third quarter of 2009 totaled $5.7
million, an increase of 12% compared to $5.1 million in the third
quarter of 2008. Adjusted net income for the third quarter of 2009
totaled $3.8 million, an increase of 23% compared to $3.1 million
in the third quarter of 2008. Adjusted net income per diluted
share, totaled $0.22 in the third quarter, compared to $0.18 in the
third quarter of 2008. Backlog of signed contracts: During the
quarter, the increased demand for new services contributed to the
commencement of a net 18 new contracts. Backlog grew slightly to
$171 million as of September 30, 2009 compared to $170 million as
of June 30, 2009. Cash, cash equivalents and marketable securities
as at September 30, 2009 were $44.4 million, compared to $42.8
million as at June 30, 2009. During the quarter, the Company
generated $6.5 million in operating cash flow, invested $2.1
million in capital expenditure, and paid out a dividend of $2.9
million in September 2009. David Rivel, founder and CEO of RRsat
commented, "We are very proud with our 18 new contracts, including
12 contracts with new clients. In addition, we have also more
recently commenced contracts with two major networks, Fox Sports
and Kidsco, a member of the NBC Universal Group. These developments
have broadened and strengthened our customer base, and have
increased our ability to sell additional services. We believe this
growth in new contracts is a testament to the increase in demand
for our services that we are experiencing, some of which is coming
from the increasingly pervasive High-Definition market. To meet the
consumer demand for HD, customers are increasingly looking to
outsource their distribution to us, given our new HD platform
utilizing a state-of-the-art playout facility, built on leading
edge end-to-end technologies." Mr. Rivel added, "We believe that
the market is returning to its normal behavior, as is evident by
the strong pipeline and demand that we see for our services, and
the return to normal contract length. Given the market strength
that we see, we are also stepping up our capacity, in anticipation
of our future utilization requirements over the coming months."
"Based on our good visibility and healthy backlog, we are
forecasting that revenues in the fourth quarter will be between
$25.1-25.6 million," concluded Mr. Rivel. Conference Call
Information Conference call scheduled later today, November 12,
2009 at 9:00 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: 0-800-917-5108 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 Additionally, the call will be
simultaneously webcast live through a link on RRSat's website at
http://www.rrsat.com/, or from the following link:
http://investor.shareholder.com/media/eventdetail.cfm?mediaid=39299&c=RRST
&mediakey=AC34FDD8E43947B82656E3250D2A48BA&e=0 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. 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
877 332 1104 (US) or +972 3 925 5901 (Intl). 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, and other
income (expenses), net, income tax expense and adding non-cash
equity-based compensation charge, and 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 provide these services to more than 500
television and radio channels, covering more than 150 countries.
Visit the company's website http://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, (iv) our ability to develop and commercialize the RRsat
Global Internet TV service, (v) our expectation to extend the
average length of our contracts in the future, (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, 2008 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 ------------------ ------------------ Sep-30 Sep-30
Sep-30 Sep-30 2009 2008 2009 2008 ---- ---- ---- ---- Revenues
$68,903 $57,039 $24,109 $20,075 Cost of revenues 46,572 38,793
16,631 13,501 ------ ------ ------ ------ Gross profit 22,331
18,246 7,478 6,574 ------ ------ ----- ----- Operating expenses
Sales and marketing 4,147 2,818 1,436 970 General and
administrative 5,162 4,902 1,870 1,626 Total operating expenses
9,309 7,720 3,306 2,596 ----- ----- ----- ----- Operating income
13,022 10,526 4,172 3,978 Interest and marketable securities income
387 1,096 112 293 Currency fluctuation and other financing income,
net 514 330 243 (66) Changes in fair value of embedded currency
conversion derivatives (1,996) 154 (1,064) 1,347 Other income, net
25 12 - - -- -- - - Income before taxes on income 11,952 12,118
3,463 5,552 Income taxes (3,077) (2,271) (567) (1,597) Net income
$8,875 $9,847 $2,896 $3,955 ====== ====== ====== ====== 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 ------------------
------------------ Sep-30 Sep-30 Sep-30 Sep-30 2009 2008 2009 2008
---- ---- ---- ---- Income per ordinary share Basic income per
ordinary share $0.51 $0.57 $0.17 $0.23 ===== ===== ===== =====
Diluted income per ordinary share $0.51 $0.57 $0.17 $0.23 =====
===== ===== ===== Weighted average number of ordinary shares used
to compute basic income per ordinary share 17,306,783 17,286,762
17,306,783 17,286,762 ========== ========== ========== ==========
Weighted average number of ordinary shares used to compute diluted
income per ordinary share 17,413,503 17,417,215 17,415,053
17,402,058 ========== ========== ========== ========== 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 -----------------
------------------ Sep-30 Sep-30 Sep-30 Sep-30 2009 2008 2009 2008
---- ---- ---- ---- Reconciliation of Net Income to Adjusted Net
Income: Net income - as reported $8,875 $9,847 $2,896 $3,955
Non-cash equity-based compensation charge 312 312 104 105 Changes
in fair value of embedded currency conversion derivatives 1,996
(154) 1,064 (1,347) Change in deferred tax on embedded derivatives
(519) 40 (277) 350 ---- -- ---- --- Adjusted net income $10,664
$10,045 $3,787 $3,063 ======= ======= ====== ====== Adjusted net
income per diluted ordinary share $0.61 $0.58 $0.22 $0.18
Reconciliation of Net Income to Adjusted EBITDA: Net income - as
reported $8,875 $9,847 $2,896 $3,955 Interest and marketable
securities income (387) (1,096) (112) (293) Currency fluctuation
and other financial income, net (514) (330) (243) 66 Changes in
fair value of embedded currency conversion derivatives 1,996 (154)
1,064 (1,347) Other income, net (25) (12) - - Income tax expense
3,077 2,271 567 1,597 Non-cash equity-based compensation charge 312
312 104 105 Depreciation and amortization 4,105 2,770 1,448 991
----- ----- ----- --- Adjusted EBITDA $17,439 $13,608 $5,724 $5,074
======= ======= ====== ====== RRsat Global Communications Network
Ltd. and its Subsidiaries Consolidated Balance Sheets In thousands
except share data Sep-30 Dec-31 2009 2008 ------- ------- Current
assets Cash and cash equivalents $12,752 $34,749 Short term
deposits 10,200 - Marketable securities 7,171 6,102 Accounts
receivable: Trade (net of provision for doubtful accounts of $2,856
and $2,188 as of September 30, 2009 and December 31, 2008
respectively) 16,897 11,227 Other 693 417 Fair value of embedded
currency conversion derivatives 1,505 2,234 Deferred taxes 1,264
552 Prepaid expenses 1,176 1,390 ------- ------- Total current
assets 51,658 56,671 Deposits and long-term receivables 1,674 1,791
Marketable securities 14,266 5,743 Long term prepaid expenses 7,809
7,897 Assets held for employee severance payments 1,518 1,305 Fixed
assets, at cost, less accumulated depreciation and amortization
28,054 25,993 Goodwill 3,734 3,734 Intangible assets, at cost, less
accumulated amortization 1,296 1,353 ------- ------- Total assets
$110,009 $104,487 RRsat Global Communications Network Ltd. and its
Subsidiaries Consolidated Balance Sheets (cont'd) In thousands
except share data Sep-30 Dec-31 2009 2008 ------- -------
Liabilities and shareholders' equity Current liabilities Accounts
payable: Trade $10,979 $8,709 Other 2,438 1,944 Fair value of
embedded currency conversion derivatives 2,472 1,205 Related
parties 58 25 Deferred income 5,540 5,440 ----- ----- Total current
liabilities 21,487 17,323 ------ ------ Long - term liabilities
Deferred income 6,819 6,689 Liability in respect of employee
severance payments 1,673 1,378 Deferred taxes 815 747 --- --- Total
long - term liabilities 9,307 8,814 ----- ----- Total liabilities
30,794 26,137 ------ ------ 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,
2009 and December 31, 2008; 17,306,783 shares issued and fully paid
as of September 30, 2009 and December 31, 2008) 40 40 Additional
paid in capital 52,418 52,106 Retained earnings 26,704 26,309
Accumulated other comprehensive loss 53 (105) Total shareholders'
equity $79,215 $78,350 ------- ------- Total liabilities and
shareholders' equity $110,009 $104,487 ======== ======== RRsat
Global Communications Network Ltd. and its Subsidiaries
Consolidated Statements of Cash Flows In thousands Nine months
ended Three months ended ------------------ ------------------
Sep-30 Sep-30 Sep-30 Sep-30 2009 2008 2009 2008 ---- ---- ---- ----
Cash flows from operating activities Net income $8,875 $9,847
$2,896 $3,955 Adjustments required to reconcile net income
Depreciation and amortization 4,105 2,770 1,448 991 Provision for
losses in account receivable 668 541 238 172 Deferred taxes (699)
(89) (350) 278 Discount accretion and premium amortization of held-
to- maturity securities, net (264) (565) (174) (180) Discount
accretion and premium amortization of available- for- sale
securities, net 295 (178) 239 (58) Changes in liability for
employee 82 184 (6) 13 Capital gains on sale of fixed assets, net
(25) (12) - - Stock- based compensation 312 312 104 105 Changes in
fair value of embedded 1,996 (154) 1,064 (1,347) currency
conversion derivatives Profit from trading securities, net (320)
(111) (115) 209 Changes in assets and liabilities: Decrease
(increase) in account receivable - trade (6,338) 1,406 (1,703) 76
Decrease (increase) in related parties, net 33 (34) 16 (6) Decrease
(increase) in account receivable - other (276) 290 (133) 616
Decrease (increase) in prepaid expenses 214 (13) 447 358 Increase
(decrease) in deposits and long-term receivables 117 (556) 100 (52)
Increase in account payables 2,723 2,069 1,085 1,203 Increase
(decrease) in deferred income 230 294 1,320 834 Net cash provided
by operating activities $11,728 $16,001 $6,476 $7,167 RRsat Global
Communications Network Ltd. and its Subsidiaries Consolidated
Statements of Cash Flows In thousands Nine months ended Three
months ended ------------------- ------------------ Sep-30 Sep-30
Sep-30 Sep-30 2009 2008 2009 2008 ---- ---- ---- ---- Cash flows
from investing activities Investment in fixed assets $(6,008)
$(9,113) $(2,111) $(1,089) Investment in other assets - (22) - (2)
Investment in short term deposits (10,200) - (2,991) - Payment in
respect of acquisition of activity - (3,525) - (100) Investments in
securities available- for- sale (15,711) (19,188) (4,264) (8,795)
Decrease in trading securities, net 62 2,144 (6) 327 Proceeds from
securities available- for- sale 2,540 4,000 1,470 - Proceeds from
securities held to maturity 4,019 19,507 802 3,047 Proceeds from
sale of fixed assets 53 17 1 - -- -- - - Net cash provided by (used
in) investing activities $(25,245) $(6,180) $(7,099) $(6,612)
-------- ------- ------- ------- Cash flows from financing
activities Dividend paid $(8,480) $(5,532) $(2,942) $- -------
------- ------- -- Net cash used in financing activities $(8,480)
$(5,532) $(2,942) $- ------- ------- ------- -- Increase (decrease)
in cash and cash equivalents $(21,997) $4,289 $(3,565) $555 Balance
of cash and cash equivalents at beginning of period 34,749 28,409
16,317 32,143 ------ ------ ------ ------ Balance of cash and cash
equivalents at end of period $12,752 $32,698 $12,752 $32,698
======= ======= ======= ======= A. Non-cash transactions Investment
in fixed assets $347 $164 $347 $164 ==== ==== ==== ==== B.
Supplementary cash flow information Income taxes paid $4,245 $1,827
$1,334 $385 ====== ====== ====== ==== Company Contact Information:
External Investor Relations Contacts: Gil Efron, CFO Ehud Helft /
Kenny Green Tel: +972 8 861 0000 Tel: 1 646 201 9246 DATASOURCE:
RRSat Global Communications Network Ltd. CONTACT: Gil Efron, CFO of
RRSat Global Communications Network Ltd., +972-8-861-0000, ; or
Investors: Ehud Helft or Kenny Green, both for RRSat Global
Communications Network Ltd., +1-646-201-9246, Web Site:
http://www.rrsat.com/
Copyright