Exhibit 99.1
[GLOBECOMM LOGO]
GLOBECOMM SYSTEMS ANNOUNCES FISCAL 2005 FOURTH QUARTER AND
RECORD FISCAL YEAR 2005 FINANCIAL RESULTS
o Revenues Increased 28.3 % in the Fourth Quarter of Fiscal 2005 as
Compared to the Fourth Quarter of Fiscal 2004
o Diluted Earnings Per Share of $0.07 in the Fourth Quarter of Fiscal
2005 as Compared to Diluted Earnings Per Share of $0.03 in Fourth
Quarter of Fiscal 2004
o Record Revenues and Profits for Fiscal Year 2005
HAUPPAUGE, N.Y.--(BUSINESS WIRE)--September 8, 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
fourth quarter and fiscal year ended June 30, 2005.
FISCAL 2005 FOURTH QUARTER RESULTS
Revenues for the Company's fiscal 2005 fourth quarter increased 28.3% to $26.7
million, compared to $20.8 million in the same period last year. The increase in
revenues was primarily the result of increased infrastructure sales activity in
the U.S. Government and governmental agencies marketplace.
Net income for the Company's fiscal 2005 fourth quarter increased to $1.1
million, or $0.07 per diluted share, compared to net income of $0.4 million, or
$0.03 per diluted share, in the fourth quarter of fiscal 2004. Net income for
the fourth quarter of fiscal 2005 included a net non-recurring gain of $0.3
million, or $0.02 per diluted share, which represents a $0.4 million reversal of
previously recorded fixed asset depreciation, offset by a $0.1 million charge
for the accelerated vesting of options.
FISCAL YEAR 2005
Revenues for the Company's fiscal year 2005 increased 25.6% to a record $109.6
million, compared to $87.2 million last year. The increase in revenues was
primarily the result of increased infrastructure sales in the U.S. Government
and governmental agencies marketplace, coupled with a general overall
improvement in the telecommunications industry segments the Company serves.
Net income for the Company's fiscal year 2005 increased to a record $4.8
million, or $0.32 per diluted share, compared to a net loss of $1.3 million, or
$0.10 per diluted share, in fiscal year 2004. Net income for fiscal year 2005
includes $2.4 million, or $0.16 per diluted share, in non-recurring gains
relating to the settlement with a major customer announced July 7, 2004 and a
net non-recurring gain of $0.3 million, or $0.02 per diluted share. The net loss
for fiscal year 2004 was reduced by a non-recurring gain of $1.0 million, or
$0.08 per diluted share.
Throughout fiscal 2005, Globecomm and its wholly owned subsidiary, Globecomm
Network Services Corporation (GNSC), made significant strides in positioning the
Company for future growth, including major contracts, new technology platforms
and strategic relationships. Some of the highlights by segment included the
following:
Globecomm Systems
o Increased the Company's working capital line of credit from $10.5
million to $16.5 million providing greater financial flexibility
supporting the current growth phase.
o Introduced a new line of rapidly deployable, compact, Internet
Protocol based, satellite communication terminals for secure broadband
communications. The 0.77m Auto Explorer satellite terminal meets the
requirements for airline overhead cabin baggage and can be set up in
less than 15 minutes.
o Selected to participate in a U.S. Government Department of Defense
(DOD) blanket purchase agreement program. The purpose of the program
is to satisfy all commercial satellite communications terminal
requirements for the DOD and other governmental agencies.
o Selected by SES AMERICOM to provide design and integration services in
support of its new state-of-the-art MPEG-4 Internet Protocol
Television (IPTV) based broadcast center, an innovative, centralized
IPTV distribution solution enabling telephone companies to deliver
high-end video, along with voice and broadband services over a single
DSL line to the home.
o Launched a new managed mobile network services platform utilizing the
Company's award winning (patent-pending) Internet Protocol network
architecture. Existing cellular operators can now outsource parts of
their network infrastructure to Globecomm in areas where it is not
cost effective to serve small user groups.
Globecomm Network Services Corporation
The development of GNSC's service lines remains the focal point of GNSC's
evolving strategy. The following are highlights:
o The broadcast service line continued to grow in fiscal 2005. GNSC
launched new products to support DTH, cable head end distribution and
turnaround services. Currently GNSC is broadcasting over 40 channels
of content globally.
o The VoIP service line continued to grow. With network expansion, which
now includes Hong Kong, GNSC was able to grow voice-generated revenue
over 100% in fiscal 2005.
o As part of its complex VSAT solutions offerings GNSC teamed with IPIX
Corporation, a leader in immersive imaging technology, to offer
satellite and wireless surveillance solutions on a global basis to the
government, enterprise observation and surveillance network markets.
GNSC also launched a worldwide two-way high-speed Internet Protocol
platform utilizing iDirect Technologies satellite-based broadband
access solutions, positioning the Company for future networking
opportunities with the U.S. Government.
o GNSC's field services capability continues to grow, supporting over
4000 sites on a 24/7 basis in the U.S. GNSC also now offers global
services for both the government and commercial sectors.
o As part of GNSC's Skyborne content delivery service line it continues
to strengthen its relationship with Scientific Atlanta enabling GNSC
to be a key solution provider of next generation network solutions for
the U.S. enterprise market.
MANAGEMENT'S REVIEW OF RESULTS
Commenting on these financial results, David Hershberg, Chairman and Chief
Executive Officer of Globecomm said, "With our fifth consecutive quarter of
profitability, Globecomm is demonstrating an ability to grow the Company,
innovate new products, and expand into new markets while maintaining
profitability and a strong balance sheet. Globecomm wrapped up fiscal 2005 with
record revenues and profits. We are in new markets and witnessing a
metamorphosis in the convergence of communications towards all IP networks, on
which the Company is poised to capitalize. We are very excited about our future
and look forward to showcasing the array of engineering depth the Company
possesses throughout the upcoming year."
Ken Miller, President of Globecomm said, "Fiscal 2005 was a turning point for
the Company, achieving our first full year of profitability at record revenues.
This accomplishment is a tribute to the employees who met the challenge of the
market downturn from the years 2000 through 2004 and allowed us to come out of
that period a stronger, more competitive, and profitable company in 2005.
Throughout the year, we made significant headway in developing relationships
with new government customers and major government prime contractors;
relationships that are bearing fruit in new contracts for both systems and
network services. We are continuing to leverage our significant engineering,
system product and network service capabilities to serve a growing number of
government requirements. We introduced our new Auto-Explorer satellite terminals
during the year aimed at the growing government market for automatic acquisition
terminals. We began to reap the benefits of these product introductions in new
orders and exposure to new government customers. Our ability to offer government
customers satellite
systems and network service offerings under one roof has proven to be valuable
to major government customers. We expect to see continued interest where
government requirements demand high quality systems and networks, in addition to
on-going support and network services."
MANAGEMENT'S CURRENT EXPECTATIONS FOR THE FISCAL YEAR ENDING JUNE 30, 2006
Globecomm currently expects consolidated revenues for fiscal year 2006 to be in
excess of $125 million, or a 14% increase over fiscal 2005, and diluted earnings
per share to be in excess of $0.25 per share, or a 79% increase over fiscal 2005
diluted earnings per share, excluding net non-recurring gains.
These expectations reflect management's current view of the next twelve months.
Actual results for fiscal year 2006 will remain susceptible to factors in
certain areas of the world. This may include, but is not limited to, major
disruptions in the marketplaces 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, unfavorable product mix and timing of or failure to book and turn
certain projects included in our projections. The Company further anticipates
quarterly income statement fluctuations resulting from the nature of the
business and the size of certain contracts in backlog.
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. 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.
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.
-Financial tables follow-
GLOBECOMM SYSTEMS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
THREE MONTHS ENDED YEARS ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2005 2004 2005 2004
-------- -------- -------- --------
Revenues from ground segment systems,
networks and enterprise solutions $ 20,934 $ 17,427 $ 90,656 $ 73,305
Revenues from data communications services 5,779 3,387 18,928 13,931
-------- -------- -------- --------
Total revenues 26,713 20,814 109,584 87,236
-------- -------- -------- --------
Costs and operating expenses:
Costs from ground segment systems,
networks and enterprise solutions 16,762 14,000 75,357 63,282
Costs from data communications 4,433 3,381 15,527 12,992
services
Selling and marketing 1,793 1,347 5,821 4,808
Research and development 318 375 1,021 1,328
General and administrative 2,431 1,414 7,596 6,529
-------- -------- -------- --------
Total costs and operating expenses 25,737 20,517 105,322 88,939
-------- -------- -------- --------
Income (loss) from operations 976 297 4,262 (1,703)
Other income:
Interest income 158 80 444 271
Gain on sale of investment -- -- 40 --
Gain on sale of
available-for-sale -- -- 132 91
securities
-------- -------- -------- --------
Income (loss) before income taxes 1,134 377 4,878 (1,341)
Provision for income taxes 64 -- 64 --
-------- -------- -------- --------
Net income (loss) $ 1,070 $ 377 $ 4,814 $ (1,341)
======== ======== ======== ========
Basic net income (loss) per common share $ 0.07 $ 0.03 $ 0.33 $ (0.10)
======== ======== ======== ========
Diluted net income (loss) per common share $ 0.07 $ 0.03 $ 0.32 $ (0.10)
======== ======== ======== ========
Weighted-average shares used in the
calculation of basic net income (loss)
per common share 14,593 14,141 14,422 13,346
======== ======== ======== ========
Weighted-average shares used in the
calculation of diluted net income (loss)
per common share 15,048 14,593 14,966 13,346
======== ======== ======== ========
</TABLE>
GLOBECOMM SYSTEMS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
JUNE 30, JUNE 30,
2005 2004
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ASSETS
Current assets:
Cash and cash equivalents $25,609 $28,252
Restricted cash -- 1,903
Accounts receivable, net 22,700 14,318
Inventories 13,317 3,904
Prepaid expenses and other current assets 858 1,274
Deferred income taxes 38 83
------- -------
Total current assets 62,522 49,734
Fixed assets, net 15,619 15,441
Goodwill 7,204 7,204
Other assets 1,033 1,096
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Total assets $86,378 $73,475
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $25,571 $19,682
Deferred liabilities, less current portion 670 987
Total stockholders' equity 60,137 52,806
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Total liabilities and stockholders' equity $86,378 $73,475
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