Exhibit 99.1
[GLOBECOMM LOGO]
GLOBECOMM SYSTEMS ANNOUNCES RECORD REVENUES FOR FISCAL 2005
SECOND QUARTER AND SIX-MONTH FINANCIAL RESULTS
o Revenue Increase of 23.3% in the Second Quarter of Fiscal 2005
as Compared to Second Quarter of Fiscal 2004
o Earnings Per Share of $0.07 in the Second Quarter of Fiscal
2005, or $0.03 Excluding Non-Recurring Gain, as Compared
to Loss Per Share of $0.05 in Second Quarter of Fiscal 2004
HAUPPAUGE, N.Y.--(BUSINESS WIRE)--February 2, 2005--Globecomm Systems Inc.
(NASDAQ: GCOM-News), a global provider of end-to-end satellite-based
communications solutions, today announced financial results for the fiscal 2005
second quarter and six-months ended December 31, 2004.
Fiscal 2005 Second Quarter Results
Revenues for the Company's fiscal 2005 second quarter ended December 31, 2004
increased 23.3% to a record $29.2 million, compared to $23.7 million in the same
period last year. The increase in revenues was primarily the result of increased
infrastructure sales activity in the government marketplace, coupled with a
general overall improvement in the telecommunications industry segments that the
Company serves.
Net income for the Company's fiscal 2005 second quarter increased 252% to $1.0
million, or $0.07 per diluted share, compared to a net loss of $0.7 million, or
$0.05 per diluted share, in the second quarter of fiscal 2004. Net income for
the second quarter of fiscal 2005 included a $0.5 million non-recurring gain
relating to a settlement with a major customer announced on July 7, 2004, or
$0.04 per diluted share, which is reflected as a reduction in costs from ground
segment systems, networks and enterprise solutions.
The turnaround in the Company's net loss to a net profit was primarily driven by
an increase in revenues and an improvement in the overall gross margin of the
Company.
Fiscal 2005 Six-Month Results
Revenues for the Company's fiscal 2005 six-months ended December 31, 2004
increased 23.8% to a record $54.7 million, compared to $44.2 million in the same
period last year. The increase in revenues was primarily the result of increased
infrastructure sales activity in the government marketplace, coupled with a
general overall improvement in the telecommunications industry segments that the
Company serves.
Net income for the first six-months of the Company's fiscal 2005 period ended
December 31, 2004 increased 378.0% to $3.2 million, or $0.21 per diluted share,
compared to a net loss of $1.1 million, or $0.09 per diluted share, in the same
period last year. The turnaround in the Company's net loss to a net profit was
primarily driven by an increase in revenues and an improvement in the overall
gross margin of the Company. Net income for the six-months ended December 31,
2004 includes $2.4 million ($0.16 per diluted share) in non-recurring gains
relating to a settlement with a major customer announced on July 7, 2004, which
is reflected as a $1.5 million reduction in general and administrative expenses
and a $0.9 million reduction in costs from ground segment systems, networks and
enterprise solutions. The net loss for the six-months ended December 31, 2003
was reduced by a $1.0 million ($0.08 per diluted share) cash recovery in
connection with a previously announced termination of services by a major
customer in the Middle East, which is reflected as a reduction in general and
administrative expenses.
Management's Review of Results
David Hershberg, Chairman and Chief Executive Officer of Globecomm said, "With
our third consecutive quarter of profitability, the breadth and diversity of
Globecomm's product and service offerings are beginning to be reflected in the
Company's financial results. We see end-user demand for products and services
designed around Internet Protocol ("IP") continuing to grow. Satellite and
terrestrial networks ranging from requirements for the battlefield, homeland
security initiatives, next generation networks and voice over the Internet,
amongst other IP applications, open up an array of opportunities to the Company
in the future. As we explore these opportunities, the Company remains committed
to our core customer base in providing the best-of-breed infrastructure
integration and service capabilities in the marketplace."
Mr. Hershberg continued, "Globecomm entered the third quarter with $30 million
of cash, no debt and no amounts outstanding under the new $16.5 million credit
facility announced during the second quarter other than secured letters of
credit. The strength of our balance sheet should support the Company's current
growth phase for the foreseeable future. We are better positioned to benefit
from the macro trends that we are witnessing in the marketplace than ever before
and are excited about our future prospects."
Management's Current Expectations for the Full Year Ending June 30, 2005
Globecomm continues to expect consolidated revenues for the full year ending
June 30, 2005 to be in excess of $105 million. The Company anticipates achieving
full year profitability at this revenue level, excluding the non-recurring gains
totaling $2.4 million reflected in the Company's results for the six-months
ended December 31, 2004. The Company further anticipates quarterly income
statement fluctuations resulting from the nature of the business and the size of
certain contracts in backlog.
These expectations reflect the Company's results for the six-months ended
December 31, 2004 and management's current view of the next six-months. Actual
results for the fiscal year ending June 30, 2005 will remain susceptible to
factors beyond our control in certain areas of the world. These may include, but
are not limited to, major disruptions in the marketplaces in which we operate
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.
About Globecomm Systems
Globecomm Systems Inc. provides end-to-end value-added satellite-based
communication solutions by leveraging its core satellite ground segment systems
and network capabilities, with satellite communication services capabilities.
The solutions Globecomm offers include general contracted complex communications
networks, militarized commercial off the shelf products and services and voice
over Internet Protocol (VOIP), video broadcast, business recovery,
satellite-based terrestrial restoral, content delivery and other networks on a
global basis. Globecomm's customers include communications service providers,
commercial enterprises, Internet Service Providers, content providers and
government entities.
Based in Hauppauge, New York, Globecomm Systems also maintains offices in
Washington D.C., Hong Kong, the United Kingdom and the United Arab Emirates.
This press release contains projections or other forward-looking statements
regarding future events or the future financial performance of Globecomm Systems
Inc., including, but not limited to, the information contained within the
sections entitled "Management's Review of Results" and "Management's Current
Expectations for the Full Year Ending June 30, 2005." These statements reflect
the current beliefs and expectations of the Company. Some matters addressed in
this press release, involve a number of risks and uncertainties. Among the
factors that could cause actual results to differ materially from these
statements include risks and other factors detailed, from time to time, in the
Company's reports filed with the Securities and Exchange Commission, including,
but not limited to, the Company's Annual Report on Form 10-K for the year ended
June 30, 2004, its Quarterly Reports on Form 10-Q and its Current Reports on
Form 8-K, which the Company urges investors to consider. These risks and other
factors include, but are not limited to general political and economic
instability in the United States and abroad, including the hostilities in Iraq
and Afghanistan, reliance on a small number of contracts for a large portion of
the Company's revenue, increasing reliance on Government contracts and the
Company's ability to penetrate emerging markets. The Company undertakes no
obligation to publicly release the revisions to such forward-looking statements
that may be made to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
GLOBECOMM SYSTEMS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
2004 2003 2004 2003
---------------------------------- -----------------------------------
Revenues from ground segment systems,
networks and enterprise solutions $ 24,693 $ 19,891 $ 46,279 $ 36,922
Revenues from data communications services 4,535 3,809 8,408 7,239
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Total revenues 29,228 23,700 54,687 44,161
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Costs and operating expenses:
Costs from ground segment systems,
networks and enterprise solutions 21,013 17,798 39,075 33,102
Costs from data communications 3,714 3,255 6,908 6,473
services
Selling and marketing 1,383 1,126 2,552 2,242
Research and development 174 236 472 711
General and administrative 2,074 2,103 2,702 2,997
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Total costs and operating expenses 28,358 24,518 51,709 45,525
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Income (loss) from operations 870 (818) 2,978 (1,364)
Other income:
Interest income 92 66 165 128
Gain on sale of investment 40 - 40 -
Gain on sale of
available-for-sale - 91 - 91
securities
---------------------------------- -----------------------------------
Net income (loss) $ 1,002 $ (661) $ 3,183 $ (1,145)
================================== ===================================
Basic net income (loss) per common share $ 0.07 $ (0.05) $ 0.22 $ (0.09)
================================== ===================================
Diluted net income (loss) per common share $ 0.07 $ (0.05) $ 0.21 $ (0.09)
================================== ===================================
Weighted-average shares used in the
calculation of basic net income (loss)
per common share 14,396 12,575 14,289 12,576
================================== ===================================
Weighted-average shares used in the
calculation of diluted net income (loss)
per common share 14,975 12,575 14,842 12,576
================================== ===================================
GLOBECOMM SYSTEMS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
DECEMBER 31, JUNE 30,
2004 2004
----------------------------------------
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents $ 27,040 $ 28,252
Restricted cash 2,484 1,903
Accounts receivable, net 20,642 14,318
Inventories 11,014 3,904
Prepaid expenses and other current assets 1,025 1,274
Deferred income taxes 83 83
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Total current assets 62,288 49,734
Fixed assets, net 15,475 15,441
Goodwill 7,204 7,204
Other assets 1,097 1,096
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Total assets $ 86,064 $ 73,475
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 27,751 $ 19,682
Deferred liabilities, less current portion 828 987
Total stockholders' equity 57,485 52,806
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Total liabilities and stockholders' equity $ 86,064 $ 73,475
========================================
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
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www.globecommsystems.com.
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SOURCE: Globecomm Systems Inc.
