Exhibit 99.1
[GSI GLOBECOMM SYSTEMS LOGO]
o Revenues Increased 16.2 % in the First Quarter of Fiscal 2006 as Compared
to the First Quarter of Fiscal 2005
o Diluted Earnings Per Share of $0.05 in the First Quarter of Fiscal 2006 as
Compared to Diluted Earnings Per Share of $0.02 in the First Quarter of
Fiscal 2005, Excluding a $0.13 Non-Recurring Gain
o Sixth Consecutive Quarter of Profitability
HAUPPAUGE, N.Y.--(BUSINESS WIRE)--November 2, 2005--Globecomm Systems Inc.
(NASDAQ: GCOM-News), a global provider of end-to-end satellite-based
communications solutions, today announced financial results, including record
revenues for the fiscal 2006 first quarter ended September 30, 2005.
FISCAL 2006 FIRST QUARTER RESULTS
Revenues for the Company's fiscal 2006 first quarter increased 16.2% to a record
$29.6 million, compared to $25.5 million in the same period last year. The
increase in revenues continues to be driven by increased infrastructure sales
activity in the U.S. Government and governmental agencies marketplace.
Net income for the Company's fiscal 2006 first quarter was $0.8 million, or
$0.05 per diluted share, compared to net income of $2.2 million, or $0.15 per
diluted share, in the first quarter of fiscal 2005 on the basis of generally
accepted accounting principles. However, the Company's net income for the first
quarter of fiscal 2005 included a non-recurring gain of $1.9 million relating to
a recovery from a client, which was reflected as a $1.5 million reduction in
general and administrative expense and a $0.4 million reduction in costs from
ground segment systems, networks and enterprise solutions. Excluding this
non-recurring gain, net income in the first quarter of fiscal 2005 was $0.3
million, or $0.02 per diluted share.
MANAGEMENT'S REVIEW OF RESULTS
Commenting on these financial results, David Hershberg, Chairman and Chief
Executive Officer of Globecomm said, "We are proud of our first quarter results,
which included record revenues and the Company's sixth consecutive quarter of
profitability. Strong order flow in the quarter positions Globecomm for
continued growth and profitability. During the quarter Globecomm announced some
very exciting contracts, including a multi-year agreement with Raytheon to
support NOAA's Advanced Weather Interactive Processing Systems for a period of
up to ten years. The Company was also awarded a contract from SES AMERICOM, the
largest satellite services provider in the U.S., to provide design and
integration services in support of its new state-of-the-art MPEG-4 Internet
Protocol Television based broadcast center, positioning Globecomm as one of the
first companies to participate in the design and delivery of an all IP-based
MPEG-4, satellite-based IPTV video distribution facility."
Mr. Hershberg continued, "Contracts of these types are important to the success
of Globecomm over the long term. The ability to collaborate with world-class
companies is what will keep Globecomm on the cutting edge of emerging
technologies and applications. These relationships, coupled with Globecomm's
ability to stay nimble in the fast moving technology marketplace and a solid
balance sheet has set the stage for the Company's entrance into many new markets
for the foreseeable future."
MANAGEMENT'S CURRENT EXPECTATIONS FOR THE FISCAL YEAR ENDING JUNE 30, 2006
Globecomm continues to expect 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, representing a 79%
increase over fiscal 2005 diluted earnings per share, excluding net
non-recurring gains.
These expectations reflect the Company's results for the three months ended
September 30, 2005 and management's current view of the next nine months. Actual
results for fiscal year 2006 will remain susceptible to factors in certain areas
of the world. These may include, but are not limited to, major disruptions in
the marketplaces 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 the 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, 2005, 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.
GLOBECOMM SYSTEMS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2005 2004
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Revenues from ground segment systems, networks
and enterprise solutions $23,019 $21,586
Revenues from data communications services 6,557 3,873
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Total revenues 29,576 25,459
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Costs and operating expenses:
Costs from ground segment systems, networks
and enterprise solutions 19,525 18,062
Costs from data communications services 5,568 3,194
Selling and marketing 1,514 1,169
Research and development 109 298
General and administrative 2,256 628
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Total costs and operating expenses 28,972 23,351
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Income from operations 604 2,108
Interest income 229 73
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Income before income taxes 833 2,181
Provision for income taxes 20 --
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Net income $ 813 $ 2,181
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Basic net income per common share $ 0.06 $ 0.15
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Diluted net income per common share $ 0.05 $ 0.15
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Weighted-average shares used in the
calculation of basic net income
per common share 14,719 14,180
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Weighted-average shares used in the
calculation of diluted net income
per common share 15,336 14,705
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GLOBECOMM SYSTEMS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
SEPTEMBER 30, JUNE 30,
2005 2005
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(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents $24,790 $25,609
Accounts receivable, net 21,278 22,700
Inventories 15,814 12,886
Prepaid expenses and other current assets 753 858
Deferred income taxes 38 38
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Total current assets 62,673 62,091
Fixed assets, net 15,929 16,050
Goodwill 7,204 7,204
Other assets 1,034 1,033
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Total assets $86,840 $86,378
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $23,853 $25,571
Deferred liabilities, less current portion 591 670
Total stockholders' equity 62,396 60,137
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Total liabilities and stockholders' equity $86,840 $86,378
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