RRsat Presents 26% Increase in Adjusted Net Income in First Quarter 2008; Backlog Reaches Record $159 Million
Revenues Increase 34% to $17.8 Million; Completes Acquisition of U.S. Teleport
OMER, Israel, May 5 /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 three months ended March 31, 2008.
First Quarter Highlights (compared to first quarter 2007)
- Revenues increased 34%, reaching $17.8 million
- Adjusted net income up 26%, reaching $3.4 million (GAAP net
income, $2.6 million)
- Cash, cash equivalents and marketable securities further
increased to $65.5 million
- Backlog reached record level of $158.8 million as of March
31, 2008
- Completed acquisition of a U.S. teleport
- Signed agreement to acquire Israel's largest teleport
- Board of Directors declared cash dividend of $5.5 million,
or $0.32 per ordinary share
First Quarter 2008 Results:
Revenues for the first quarter of 2008 totaled a record $17.8 million, an increase of 34% compared to $13.3 million in the first quarter of 2007.
Backlog of signed agreements, as of March 31, 2008, reached a record $158.8 million, a further increase of $3.3 million from the $155.5 million backlog of signed agreements as of December 31, 2007.
Operating income for the first quarter of 2008 totaled $3.0 million, a 10% increase compared to $2.7 million in the first quarter of 2007.
Adjusted net income for the first quarter of 2008 totaled $3.4 million, an increase of 26% compared to $2.7 million in the first quarter of 2007. Adjusted net income per diluted share totaled $0.20, compared to $0.16 in the first quarter of 2007.
Net income on a GAAP basis for the first quarter of 2008 was $2.6 million, compared to $2.6 million, in the first quarter of 2007. Net income per diluted share on a GAAP basis was $0.15, compared to $0.15 in the first quarter of 2007.
Adjusted EBITDA for the first quarter of 2008 totaled $4.0 million, an increase of 14% compared to $3.5 million in the first quarter of 2007.
Cash, cash equivalents and marketable securities as at March 31, 2008 were $65.5 million, compared with $63.4 million as at December 31, 2007. During the quarter, the Company generated $3.8 million in operating cash flow.
Acquisition of Hawley Teleport in Pike County, Pennsylvania
On May 1, 2008, RRsat completed the acquisition of the assets of the Hawley Teleport located in Pike County, Pennsylvania, for a purchase price of $4.25 million. RRsat acquired all the property, assets and licenses of the Teleport from Skynet Satellite Corporation. The Hawley Teleport, formerly owned by satellite operator Loral Skynet, includes approximately 200 acres, a communication building on the premises of a size of approximately 40,000 sq. ft, communications equipment and antennas, in which substantial resources have been invested during the teleport's 33 years of operation. The acquisition is expected to contribute to the Company's results from 2009 onwards as the Company leverages the acquisition as well as its global network to generate additional revenues. The impact on 2008 results is expected to be minimal as the revenue contribution and associated expenses are expected to be offset throughout the year.
Dividend Distribution
On May 4, 2008, the Company's Board of Directors declared a cash dividend in the amount of $0.32 per ordinary share, and in the aggregate amount of approximately $5.5 million. The dividend will be payable on June 2, 2008 to all of the Company's shareholders of record at the end of the trading day on NASDAQ on May 19, 2008. According to the Israeli tax law, the Company will deduct 20% of the dividend amount payable to each shareholder, subject to applicable exemptions. The amount of dividend declared does not necessarily reflect dividends for future periods, which may change in accordance with the Company's dividend policy. The dividend policy is described in detail in the Company's Annual Report on Form 20-F for the year ended December 31, 2007.
David Rivel, CEO of RRsat commented, "The first quarter of 2008 has been a true milestone quarter in terms of putting in place the foundations for long term growth and expansion. During the quarter we announced two acquisitions, the first being the Hawley Teleport in Pike County, Pennsylvania, which was completed on May 1st, and the second being the satellite business and the largest teleport in Israel, previously owned by Israel's national telecommunications company, Bezeq, which is expected to close in the third quarter of 2008. Both acquisitions will serve as major building blocks in our growth and expansion strategy. In addition, during the quarter we introduced new and innovative services to our customers with the launch of our new High-Definition playout services center, as well as the offering of new services for television over internet."
"On the financial front, this quarter we continued to generate strong revenue growth with backlog growing further to new record levels offering us visibility in 2008 and beyond. Furthermore, we continued to generate healthy cash flow, which will support our expansion strategy. Looking ahead, 2008 looks to be a truly exciting year for the company in terms of growth, expansion and identifying new opportunities, while constantly leveraging our premier global network to offer advanced and cutting edge solutions to our broad, ever growing, global customer base. We reiterate our 2008 annual revenue guidance of $75 to $76 million, and introduce second quarter revenue guidance of $18.3 - $18.7 million," concluded Mr. Rivel.