Globecomm Systems Announces Fiscal 2008 First Quarter Financial Results
12 November 2007
Globecomm Systems, a leading provider of satellite-based communications infrastructure solutions and services on a global basis, today announced financial results for the fiscal 2008 first quarter ended September 30, 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. Highlights of the company's results are:
- GAAP earnings per diluted share of US$0.16 in the fiscal 2008 first quarter as compared to GAAP earnings per diluted share of US$0.06 in the same period last year.
- Pro-forma earnings per diluted share increased 200% to US$0.18 in the fiscal 2008 first quarter as compared to pro-forma earnings per diluted share of US$0.06 in the same period last year. Excluded from the pro-forma earnings were non-cash charges for share-based compensation and amortization of intangibles relating to an acquisition.
- Consolidated revenues increased 64.6% to US$42.3 million in the first quarter of fiscal 2008 as compared to US$25.7 million in the same period last year.
- Service revenues increased 88.2% to a record US$15.5 million as compared to US$8.3 million in the same period last year.
FISCAL YEAR 2008 FIRST QUARTER RESULTS
Revenues for the company's fiscal 2008 first quarter increased 64.6% to US$42.3 million, compared to US$25.7 million in the same period last year. Revenues from infrastructure solutions increased by 53.5% to US$26.8 million compared to US$17.5 million in the same period last year. Revenues from services increased 88.2% to a record US$15.5 million as compared to US$8.3 million in the same period last year. This service increase includes US$6.4 million related to the acquisition of the GlobalSat business. The overall increase in revenues was primarily driven by continued momentum in the government marketplace for both infrastructure solutions and service. Revenues in the government marketplace as a percentage of total revenues increased to 67% for the fiscal 2008 first quarter from 62% in the same period last year.
Net income for the company's fiscal 2008 first quarter increased to US$3.0 million, or US$0.16 per diluted share, compared to net income of US$0.9 million, or US$0.06 per diluted share, in the first quarter of fiscal 2007 on a GAAP basis. Excluding certain non-cash items, pro-forma earnings per diluted share was US$0.18 for the first quarter of 2008 as compared to US$0.06 in the first quarter of 2007. The increase in net income was primarily driven by the operating leverage the company is currently experiencing resulting from a greater mix of service and pre-engineered systems revenues as a percentage of total revenues as compared to the same period last year.
MANAGEMENT'S REVIEW OF RESULTS
David Hershberg, Chairman and CEO of the company, said: "We are extremely pleased with the operating leverage the company is experiencing in the service segment of our business as evidenced during the first quarter. With the integration of the company's GlobalSat acquisition complete, Globecomm will continue to seek out additional strategic acquisitions in the service segment of our business with the goal of rounding out our portfolio of service offerings in new markets both domestically and internationally." Mr Hershberg continued: "Government infrastructure bookings in the first quarter were strong and provide the company with additional visibility for what we expect to be a record year on both the top and bottom line."
MANAGEMENT'S CURRENT EXPECTATIONS FOR THE FISCAL YEAR ENDING JUNE 30, 2008
Globecomm continues to expect consolidated revenues for fiscal year 2008 to be between US$190 million and US$200 million. GAAP earnings per diluted share are expected to be approximately US$0.70 per share, which includes US$0.05 of certain non-cash charges or approximately US$0.75 pro-forma earnings per diluted share excluding these non-cash charges.
These expectations reflect actual results for the Company's three months ended September 30, 2007 and management's current view of the next nine months. 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.
