HAUPPAUGE, N.Y.--(BUSINESS WIRE)--Sept. 11, 2007--Globecomm
Systems Inc. (NASDAQ: GCOM), a leading provider of satellite-based
communications infrastructure solutions and services on a global
basis, today announced final financial results for the fiscal 2007
fourth quarter and fiscal year ended June 30, 2007. The Company
previously announced preliminary full year financial results on August
3, 2007. Globecomm reports its financial results on a generally
accepted accounting principles (GAAP) basis and also provides
pro-forma results excluding certain non-cash items. In an attached
table the Company provides a detailed reconciliation of GAAP earnings
to earnings excluding certain non-cash items.
- Record GAAP earnings per diluted share of $0.50 in fiscal 2007
as compared to GAAP earnings per diluted share of $0.29 in
fiscal 2006.
- Record pro-forma earnings per diluted share of $0.53,
excluding certain non-cash items, in fiscal 2007 as compared
to pro-forma earnings per diluted share of $0.28 in fiscal
2006, excluding certain non-cash items.
- Record fiscal 2007 revenues of $150.7 million as compared to
$126.0 million in fiscal 2006.
- Record fiscal 2007 fourth quarter revenues of $49.2 million,
including $5.1 million related to the acquisition of
GlobalSat, as compared to $35.5 million in the fourth quarter
of fiscal 2006.
Fiscal Year 2007 Fourth Quarter Results
Revenues for the Company's fiscal 2007 fourth quarter increased
38.5% to a record $49.2 million, compared to $35.5 million in the same
period last year. Revenues from infrastructure solutions increased by
29.3% to $37.0 million driven primarily by the pre-engineered systems
product line due to continued demand in the government marketplace.
Revenues from services increased 76.9% to $12.2 million, driven
primarily by the acquisition of GlobalSat, which contributed $5.1
million. Overall, revenues in the government marketplace as a
percentage of total revenues increased to 68% for the fiscal 2007
fourth quarter from 65% in the same period last year.
Net income for the Company's fiscal 2007 fourth quarter increased
to $3.3 million, or $0.19 per diluted share, compared to net income of
$1.5 million, or $0.10 per diluted share, in the fourth quarter of
fiscal 2006 on a GAAP basis. Excluding certain non-cash items,
pro-forma earnings per diluted share was $0.20 for the fourth quarter
of 2007 as compared to $0.08 for the fourth quarter of 2006. The
increase in net income was driven by the increase in revenues, coupled
with an increase in the overall gross margin resulting from a greater
mix of pre-engineered systems than the same period last year.
Fiscal Year 2007 Full Year Results
Revenues for the Company's fiscal year 2007 increased 19.6% to a
record $150.7 million, compared to $126.0 million last year.
Infrastructure solutions revenues increased 17.0% to $114.6 million,
as compared to $98.0 million in the same period last year driven
primarily by the pre-engineered systems product line due to continued
demand in the government marketplace. Services revenues increased by
28.6% to $36.1 million due to the acquisition of GlobalSat, which
contributed $5.1 million and an increase in life cycle support
services. Overall, revenues in the government marketplace as a
percentage of total revenues increased to 68% for the fiscal year
ended 2007 from 55% last year.
Net income for the Company's fiscal year 2007 was $8.3 million, or
$0.50 per diluted share, compared to net income of $4.5 million, or
$0.29 per diluted share, in fiscal year 2006 on a GAAP basis.
Excluding certain non-cash items, pro-forma earnings per diluted share
was $0.53 for fiscal 2007 as compared to $0.28 for fiscal 2006. The
increase in net income was driven by the increase in revenues, coupled
with an increase in infrastructure solutions gross margin in the
pre-engineered systems sold.
Fiscal Year 2007 Highlights
Infrastructure Solutions
- One of six contractors selected to participate in the U.S.
Army's $5 Billion Worldwide Satellite Systems Program (WWSS)
for the next five years. WWSS will bring Government agencies
turnkey commercial satellite systems and associated support
services for satellite terminals, including all hardware,
software, services and data to operate terminals.
- Received $13.1 million contract from NATO to provide
additional systems in support of a multi-national global
positioning satellite-based friendly force tracking system
(FTS). The FTS provides NATO with high levels of tracking data
and messaging traffic. It enables NATO to identify where its
personnel are located at all times, identify other
multi-national forces and have the ability to do so in routine
and operational situations. This is critical in assisting with
the identification of friendly versus enemy forces and helps
prevent fratricide or "blue-on-blue" incidents.
- Awarded $19.6 million in contracts, including an expansion
option valued at $6.7 million, which if exercised would bring
the project value to $26.3 million, from a leading provider of
telecommunications services in Asia to design and install a
next generation media-processing-center (MPC). Once completed,
Globecomm will have created a first of its kind MPC. The
center will have the capacity to provide content distribution
for Direct-To-Home (DTH), IPTV and mobile TV and eventually
could provide interactive and personal television services to
the customer's subscribers. The MPC will have the capability
of distributing content DTH via satellite and/or fiber, or to
a mobile device by terrestrial transmission through the
generation of DTH and IPTV content.
- Awarded $20.7 million contract from General Communication Inc.
(Nasdaq: GNCMA), an Alaska-based company providing voice,
video and data communication services to residential,
commercial and government customers, to provide wireless phone
services to 200 rural villages throughout Alaska. The key
design attribute is that all services will make use of common
hardware platforms initially deployed for GSM. Upgrades to
CDMA, 3G, Wi-Max or other broadband capabilities are performed
remotely via software, which significantly minimizes
operational expenses and additional capital investment as the
operator does not need to physically go back to the site while
increasing their offered services as technology advances.
- Introduced AxxSys Orion, the next generation of the Company's
popular AxxSys satellite network management system. A robust,
scalable platform, AxxSys Orion monitors and controls all of
the terrestrial elements of a satellite communications
network. This includes the ability to manage other network
elements such as routers, microwave, fiber and wireless
subsystems. Deployed over an industry-standard IP network, it
is capable of monitoring and controlling from dozens to
thousands of devices. This standards-based, distributed
architecture delivers high quality of service,
state-of-the-art security and high reliability with a low
total cost of ownership.
Services
- Successfully launched a state-of-the-art broadcast operations
center for Showtime Networks Inc, which service began on July
1, 2007. Globecomm designed and built a state-of-the-art 6,000
square foot custom master and control facility at the
Company's Long Island International Teleport. The facility
supports the transmission of 25 standard-definition, 3
high-definition and 1 analog channel to satellites serving the
United States. Now in service, Globecomm is providing all
technical operations supporting content origination,
scheduling, transmission and monitoring required for delivery
of Showtime programming to viewers nationwide.
- Awarded a five-year Life Cycle Support services contract from
Harris Corporation valued at $5.5 million to sustain the
Federal Aviation Administration (FAA) FTI-SAT program. The
contract includes six one-year options following the five-year
initial term, valued at $7.2 million, if fully exercised,
which would bring the total contract value to $12.7 million.
The Life Cycle Support contract sustains 43 sites previously
deployed by Harris and Globecomm as part of the U.S. FAA
FTI-SAT program. Life Cycle Support provides turnkey
operations and maintenance responsibility including 24/7 help
desk and problem resolution, 24/7 dispatch field services and
provision of spares. FTI-SAT replaced legacy satellite
equipment at remote FAA sites to support radar, weather, and
air/ground communications. The new FTI-SAT network enables the
FAA to utilize satellite, microwave or telecommunications
technologies.
- Received contract extensions from Afghan Telecom valued at
$2.1 million. Afghan Telecom is the only basic telecom service
provider in Afghanistan. It aims to provide superior
connectivity solutions to the people of Afghanistan. Afghan
Telecom has coverage in 144 cities, towns and districts of
Afghanistan, representing the largest network coverage in the
region. This is made possible largely in part through their
District Communications Network and the Government
Communication Network, which were designed, installed and
maintained by Globecomm and its partners in the region.
Corporate
- The Company entered into a secured credit facility with
Citibank, N.A. comprised of credit lines of: (1) a $25 million
borrowing base line of credit, which is available for standby
letters of credit, commercial letters of credit and loans; (2)
a bridge line of credit in the amount of $7 million, which is
to support equipment purchases; and (3) a foreign exchange
line in the amount of $10 million.
- Acquired assets of the GlobalSat division of Lyman Bros., Inc.
for $18.5 million. GlobalSat is a global provider of
satellite-based telecommunications services. Headquartered in
metropolitan Washington D.C., it employs approximately 70 U.S.
Government cleared staff worldwide and has a high
concentration of recurring service revenues in the government
marketplace. The purchase price was partially funded through a
$16 million acquisition term loan provided by Citibank, N.A.
- In August 2007, the Company completed a public offering of
3,000,000 shares of its common stock at $11.25 per share,
yielding estimated net proceeds of approximately $31.9
million, after underwriting discounts and estimated offering
expenses. The underwriters have an option to purchase up to an
additional 450,000 shares of common stock from the company at
$11.25 to cover over-allotments, if any. Needham & Company,
LLC and Stephens Inc. acted as joint book-running managers in
the offering and Susquehanna Financial Group, LLLP acted as
co-manager.
Management's Review of Results
David Hershberg, Chairman and CEO of the Company, said, "Record
revenues and net income for the fourth quarter were fueled by sales in
the government marketplace and the contribution of our GlobalSat
acquisition. The Company's inclusion in multiple IDIQ contract buying
vehicles on both the infrastructure solutions and services segments
enabled record shipments of pre-engineered systems and increased
recurring monthly services revenues. The Company anticipates that this
trend will continue throughout fiscal 2008 resulting in record
revenues and net income for the full fiscal year." Mr. Hershberg
continued, "The Company's acquisition of GlobalSat capped off a very
progressive year for the Company. GlobalSat is anticipated to nearly
double Globecomm's existing data communication segment revenues and
provide the Company with an opportunity to cross-sell system
integration capabilities into GlobalSat's existing customer base. The
Company also witnessed traction in the broadcast marketplace in 2007
as demonstrated by the 6,000 square foot custom build-out of a master
and control facility at the Globecomm's Long Island International
Teleport for Showtime Networks Inc. and the $19.6 million in contracts
from a leading provider of telecommunications services in Asia for a
next generation media processing center. The Company entered fiscal
2008 with record backlog and a solid balance sheet. We look forward to
another record year and are excited about the prospects for our
business."
Ken Miller, Globecomm's President said, "Fiscal 2007 was an
important year for Globecomm with our government, service provider and
broadcast market strategies resulting in new offerings, major new
programs and new opportunities for growth in fiscal 2008 and beyond.
In the government market we developed new pre-engineered systems, one
of which is a military certified tri-band satellite terminal. In the
service provider market we expanded our reach with the development of
a new generation of satellite based Soft Switch solutions for General
Communication Inc. and others. In the broadcast market we brought
innovation to the development of next generation media centers, and
were awarded a contract to design and build what we believe is the
first of a new generation of such centers. Our capability to offer
both infrastructure solutions and services continues to be a growth
driver as we develop more opportunities to build and then service the
communications systems and networks needed by our customers to meet
their business and mission needs. In short, Globecomm is positioned to
leverage the accomplishments of fiscal 2007 as we seek new
opportunities for growth in fiscal 2008."
Management's Current Expectations for the Fiscal Year Ending June
30, 2008
Globecomm expects consolidated revenues for fiscal year 2008 to be
between $190 million and $200 million. GAAP earnings per diluted share
are expected to be approximately $0.70 per share, which includes $0.05
of non-cash amortization of intangibles relating to the GlobalSat
acquisition or approximately $0.75 pro-forma earnings per diluted
share excluding this non-cash charge. The backlog for fiscal year
ended June 30, 2007 is $141.2 million, a Company record, as compared
to $90.9 million for the fiscal year ended June 30, 2006.
These expectations reflect management's current view. Actual
results for fiscal year 2008 will remain susceptible to factors in
certain areas of the world. This may include, but is not limited to,
major disruptions in the marketplaces in which the Company operates
due to political unrest, local violence, global economic recession and
changes in United States Government foreign policy. Results will also
remain susceptible to possible cost overruns on projects, unfavorable
product mix and timing of or failure to book and turn certain projects
included in management's projections.
About Globecomm Systems
Globecomm Systems Inc. is a leading provider of satellite-based
communications infrastructure solutions and services on a global
basis. Our goal is to provide our customers with a comprehensive suite
of design, engineering, installation and integration solutions,
managed network services and lifecycle support services, by employing
our expertise in emerging satellite-based communication technologies.
By offering both infrastructure solutions and services, we provide our
customers with a complete end-to-end solution for their
satellite-based communications requirements. We believe our integrated
approach of combining in-house design and engineering expertise with
world-class teleport and network operating centers is a competitive
advantage and enables us to meet our customers' needs in a timely and
cost-effective manner.
Based in Hauppauge, New York, Globecomm Systems also maintains
offices in Washington, DC, Maryland, Hong Kong, the United Kingdom,
the United Arab Emirates and Afghanistan.
This press release contains forward-looking statements made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are
based on management's current expectations and observations. You
should not place undue reliance on our forward-looking statements
because the matters they describe are subject to certain risks,
uncertainties and assumptions that are difficult to predict. Our
forward-looking statements are based on the information currently
available to us and speak only as of the date of this press release.
Over time, our actual results, performance or achievements may differ
from those expressed or implied by our forward-looking statements, and
such difference might be significant and materially adverse to our
security holders. We undertake no obligation to update publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise.
We have identified some of the important factors that could cause
future events to differ from our current expectations and they are
described in our most recent Annual Report on Form 10-K and Quarterly
Report on Form 10-Q, including without limitation under the captions
''Risk Factors'' and ''Management's Discussion and Analysis of
Financial Condition and Results of Operations,'' and in other
documents that we may file with the SEC, all of which you should
review carefully. Please consider our forward-looking statements in
light of those risks as you read this press release
Globecomm Systems Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended Years Ended
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
--------- -------- --------- --------
Revenues from infrastructure
solutions $ 36,982 $ 28,609 $ 114,612 $ 97,967
Revenues from services 12,206 6,898 36,133 28,069
--------- -------- --------- --------
Total revenues 49,188 35,507 150,745 126,036
--------- -------- --------- --------
Costs and operating expenses:
Costs from infrastructure
solutions 29,695 23,568 92,197 81,410
Costs from services 9,358 6,021 29,052 23,605
Selling and marketing 2,545 2,029 8,376 7,029
Research and development 488 514 1,451 1,052
General and administrative 3,899 2,402 12,297 9,589
--------- -------- --------- --------
Total costs and operating
expenses 45,985 34,534 143,373 122,685
--------- -------- --------- --------
Income from operations 3,203 973 7,372 3,351
Other income (expense):
Interest income 363 262 1,370 965
Interest expense (205) -- (205) --
Gain on liquidation of foreign
subsidiary -- 264 -- 264
--------- -------- --------- --------
Income before income taxes 3,361 1,499 8,537 4,580
Provision (benefit) for income
taxes 89 (4) 211 88
--------- -------- --------- --------
Net income $ 3,272 $ 1,503 $ 8,326 $ 4,492
========= ======== ========= ========
Basic net income per common
share $ 0.20 $ 0.10 $ 0.53 $ 0.30
========= ======== ========= ========
Diluted net income per common
share $ 0.19 $ 0.10 $ 0.50 $ 0.29
========= ======== ========= ========
Weighted-average shares used in
the calculation of basic net
income per common share 16,324 15,184 15,795 15,001
========= ======== ========= ========
Weighted-average shares used in
the calculation of diluted net
income per common share 17,332 15,791 16,672 15,608
========= ======== ========= ========
Globecomm Systems Inc.
Reconciliation of Net Income to Pro-forma Diluted Net Income per
Common Share, excluding certain non-cash items
(In thousands, except per share data)
(Unaudited)
Three Months Ended Years Ended
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
--------- -------- --------- --------
Net Income $ 3,272 $ 1,503 $ 8,326 $ 4,492
Adjustments:
Amortization of intangibles (A) 226 -- 226 --
Stock compensation expense 43 10 214 115
Gain on liquidation of foreign
subsidiary -- (264) -- (264)
--------- -------- --------- --------
Pro-forma net income, excluding
certain non-cash items $ 3,541 $ 1,249 $ 8,766 $ 4,343
========= ======== ========= ========
Pro-forma diluted net income per
common share, excluding certain
non-cash items $ 0.20 $ 0.08 $ 0.53 $ 0.28
========= ======== ========= ========
Diluted net income per common
share $ 0.19 $ 0.10 $ 0.50 $ 0.29
========= ======== ========= ========
Weighted-average shares used in
the calculation of pro-forma
diluted net income per common
share, excluding certain non-
cash items 17,332 15,791 16,672 15,608
========= ======== ========= ========
(A) Amount represents the amortization of intangibles related to
the acquisition of GlobalSat
Globecomm Systems Inc.
Condensed Consolidated Balance Sheets
(In thousands)
June 30, June 30,
2007 2006
-------- --------
Assets
Current assets:
Cash and cash equivalents $ 25,558 $ 24,512
Accounts receivable, net 38,378 30,837
Inventories 16,294 13,058
Prepaid expenses and other current assets 2,823 1,131
Deferred income taxes -- 22
-------- --------
Total current assets 83,053 69,560
Fixed assets, net 33,238 15,510
Goodwill 22,197 7,204
Other assets 921 960
Intangibles 3,474 --
======== ========
Total assets $142,883 $ 93,234
======== ========
Liabilities and Stockholders' Equity
Current liabilities $ 45,802 $ 25,865
Other liabilities 1,035 353
Long Term Debt 12,533 --
Total stockholders' equity 83,513 67,016
-------- --------
Total liabilities and stockholders' equity $142,883 $ 93,234
======== ========
CONTACT: Globecomm Systems Inc.
David Hershberg, 631-231-9800
or
Investor Relations:
Matthew Byron, 631-457-1301
or
Fax: 631-231-1557
info@globecommsystems.com
www.globecommsystems.com.
SOURCE: Globecomm Systems Inc.