Exhibit 99.1
GLOBECOMM SYSTEMS ANNOUNCES FISCAL 2005 THIRD QUARTER AND
NINE MONTH FINANCIAL RESULTS
o Revenue Increase of 26.6% in the Third Quarter of Fiscal 2005
as Compared to Third Quarter of Fiscal 2004
o Earnings Per Share of $0.04 in the Third Quarter of Fiscal 2005 as
Compared to Loss Per Share of $0.04 in Third Quarter of Fiscal 2004
o Fourth Consecutive Quarter of Profitability
HAUPPAUGE, N.Y.--(BUSINESS WIRE)--May 11, 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 third quarter
and nine months ended March 31, 2005.
Fiscal 2005 Third Quarter Results
Revenues for the Company's fiscal 2005 third quarter ended March 31, 2005
increased 26.6% to $28.2 million, compared to $22.3 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 third quarter increased to $0.6
million, or $0.04 per diluted share, compared to a net loss of $0.6 million, or
$0.04 per diluted share, in the third quarter of fiscal 2004. 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 Nine Month Results
Revenues for the Company's fiscal 2005 nine months ended March 31, 2005
increased 24.8% to a record $82.9 million, compared to $66.4 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 nine months of the Company's fiscal 2005 period ended
March 31, 2005 increased to $3.7 million, or $0.25 per diluted share, compared
to a net loss of $1.7 million, or $0.13 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 nine months ended March 31, 2005
included $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 was
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 nine months ended March 31, 2004 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 was reflected as a reduction in general and administrative
expenses.
Management's Review of Results
Commenting on the third quarter financial results, David Hershberg, Chairman and
Chief Executive Officer of Globecomm said, "Globecomm capped off the third
quarter with the Company's fourth consecutive quarter of profitability and a
solid balance sheet. During the quarter, Globecomm launched two new exciting
technology platforms. The managed mobile network services platform, based on the
Company's award winning patent-pending network architecture, which can be
utilized for many different applications as recently demonstrated during the
Homeland Security Exercise and Evaluation Program. Our two-way high speed
Internet Protocol ("IP") platform based upon the iDirect broadband access
solutions, affords us yet another robust IP platform to market on a global
basis. The Company also entered into a new vertical market with the recently
announced aviation contract award in Egypt. This contract is further evidence of
the broad deployment of state-of-the-art IP-based platforms, which provide much
more flexibility and speed than legacy networks."
Mr. Hershberg continued, "With the backdrop of a strong balance sheet, Globecomm
is well positioned to invest in new platforms, execute our business plan and
capitalize on the communications convergence we are witnessing. IP as a common
standard continues to become the dominant transmission medium in the marketplace
and is transforming many legacy business models."
Management's Current Expectations for the Full Year Ending June 30, 2005
Globecomm currently expects 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, even excluding the net non-recurring
gains totaling $2.4 million reflected in the Company's results for the nine
months ended March 31, 2005.
These expectations reflect the Company's results for the nine months ended March
31, 2005 and management's current view of the next three 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, including, but 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 and 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 the government marketplace 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 NINE MONTHS ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2005 2004 2005 2004
------------- -------------- -------------- --------------
Revenues from ground segment systems,
networks and enterprise solutions $ 23,443 $ 18,956 $ 69,722 $ 55,878
Revenues from data communications services 4,741 3,305 13,149 10,544
-------- -------- -------- --------
Total revenues 28,184 22,261 82,871 66,422
-------- -------- -------- --------
Costs and operating expenses:
Costs from ground segment systems,
networks and enterprise solutions 19,520 16,180 58,595 49,282
Costs from data communications 4,186 3,138 11,094 9,611
services
Selling and marketing 1,476 1,219 4,028 3,461
Research and development 231 242 703 953
General and administrative 2,463 2,118 5,165 5,115
-------- -------- -------- --------
Total costs and operating expenses 27,876 22,897 79,585 68,422
-------- -------- -------- --------
Income (loss) from operations 308 (636) 3,286 (2,000)
Other income:
Interest income 121 63 286 191
Gain on sale of investment - - 40 -
Gain on sale of
available-for-sale securities 132 - 132 91
-------- -------- -------- --------
Net income (loss) $ 561 $ (573) $ 3,744 $ (1,718)
======== ======== ======== ========
Basic net income (loss) per common share 0.04 $ (0.04) $ 0.26 $ (0.13)
======== ======== ======== ========
Diluted net income (loss) per common share $ 0.04 $ (0.04) $ 0.25 $ (0.13)
======== ======== ======== ========
Weighted-average shares used in the
calculation of basic net income (loss)
per common share 14,517 14,100 14,363 13,080
======== ======== ======== ========
Weighted-average shares used in the
calculation of diluted net income (loss)
per common share 15,143 14,100 14,938 13,080
======== ======== ======== ========
GLOBECOMM SYSTEMS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
MARCH 31, JUNE 30,
2005 2004
----------- -----------
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents $22,433 $28,252
Restricted cash 3,856 1,903
Accounts receivable, net 23,430 14,318
Inventories 9,239 3,904
Prepaid expenses and other current assets 892 1,274
Deferred income taxes 83 83
------- -------
Total current assets 59,933 49,734
Fixed assets, net 15,442 15,441
Goodwill 7,204 7,204
Other assets 1,026 1,096
------- -------
Total assets $83,605 $73,475
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $24,230 $19,682
Deferred liabilities, less current portion 749 987
Total stockholders' equity 58,626 52,806
------- -------
Total liabilities and stockholders' equity $83,605 $73,475
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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.
