Exhibit 99.1 [GLOBECOMM LOGO OMITTED] GLOBECOMM SYSTEMS ANNOUNCES RECORD REVENUES FOR FISCAL 2006 THIRD QUARTER AND NINE MONTH FINANCIAL RESULTS o Diluted Earnings Per Share of $0.08 in the Third Quarter of Fiscal 2006 as Compared to Diluted Earnings Per Share of $0.04 in the Third Quarter of Fiscal 2005 o Network Services Revenues Increase 54% from the Prior Year's Quarter o Eighth Consecutive Quarter of Profitability HAUPPAUGE, N.Y.--(BUSINESS WIRE)--May 3, 2006--Globecomm Systems Inc. (NASDAQ: GCOM-News), a global provider of end-to-end satellite-based communications solutions, today announced financial results for the fiscal 2006 third quarter and nine months ended March 31, 2006. FISCAL 2006 THIRD QUARTER RESULTS Revenues for the Company's fiscal 2006 third quarter increased 10.1% to a record $31.0 million, compared to $28.2 million in the same period last year. Revenues from data communications services increased 54.1% to $7.3 million, driven primarily by growth in voice over Internet Protocol minutes, coupled with the addition of multiple new customers in the current period. Revenues from ground segment systems, networks and enterprise solutions remained relatively flat, increasing by 1.2% to $23.7 million. Net income for the Company's fiscal 2006 third quarter was $1.2 million, or $0.08 per diluted share, compared to net income of $0.6 million, or $0.04 per diluted share, in the third quarter of fiscal 2005. The increase in net income was driven by the increase in revenues from data communication services, which was partially offset by an increase in sales and marketing expenses, primarily resulting from a marketing campaign the Company has recently adopted. FISCAL 2006 NINE MONTH RESULTS Revenues for the Company's fiscal 2006 nine months ended March 31, 2006 increased 9.2% to a record $90.5 million, compared to $82.9 million in the same period last year. The increase was primarily driven by a 61.0% increase in revenues from data communications services due to a significant increase in voice over Internet Protocol minutes, coupled with the addition of multiple new customers in the current year. Revenues from ground segment systems, networks and enterprise solutions decreased slightly to $69.4 million, as compared to $69.7 million in the same period last year. Net income for the Company's first nine months of fiscal 2006 was $3.0 million, or $0.19 per diluted share, compared to net income of $3.7 million, or $0.25 per diluted share, in the same period last year on the basis of generally accepted accounting principles. However, the Company's net income for the first nine months of fiscal 2005 included a non-recurring gain of $2.4 million ($0.16 per diluted share) relating to a recovery from a client, 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. Excluding this non-recurring gain, net income for the first nine months of fiscal 2005 was $1.3 million, or $0.09 per diluted share. MANAGEMENT'S REVIEW OF RESULTS "For the first time in the Company's history Globecomm surpassed the $30 million revenue mark in a single quarter and completed our eighth consecutive quarter of profitability. We feel comfortable that we will finish this fiscal year on a strong note breaking revenue records, continuing profitability and achieving our top and bottom line financial guidance once again. There are a few major programs, which we plan on completing near the end of the fourth quarter. Since revenue recognition for these programs is not within our control, we felt prudent maintaining our current financial guidance at this time. If completed, these projects could provide some upside," said David Hershberg, Chairman and CEO. "In the third quarter the Company hired new engineers in Broadcast Engineering, Internet Protocol Networking, Product Engineering and Software Engineering to build expertise in markets we are actively pursuing as part of our growth strategy. We added to our sales staff in Washington D.C., as government market trends continue to favor the Company and made investments in outfitting our state-of-the-art broadcast laboratory to capitalize on trends in the IPTV space. We also focused our strategy on four major product/service areas; Pre-Engineered Systems, Systems Design and Integration, Managed Network Services and Life Cycle Support Services. This new focus is being communicated to customers, employees and shareholders this quarter as part of our marketing strategy in the four markets we serve; Government, Broadcast, Service Provider and Enterprise. The Company finished the quarter with a solid pipeline of contract prospects, and we hope to be announcing new contracts based on this pipeline throughout the remainder of the year." 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 in 2005. These expectations reflect the Company's results for the nine months ended March 31, 2006 and management's current view of the next three 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 recognize revenue on 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 - ------------------------- www.globecommsystems.com. - ------------------------ SOURCE: Globecomm Systems Inc. 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, 2006 2005 2006 2005 --------------------------------- ------------------------------- Revenues from ground segment systems, networks and enterprise solutions $23,735 $23,443 $69,358 $69,722 Revenues from data communications services 7,306 4,741 21,171 13,149 --------------------------------- ------------------------------- Total revenues 31,041 28,184 90,529 82,871 --------------------------------- ------------------------------- Costs and operating expenses: Costs from ground segment systems, networks and enterprise solutions 19,616 19,520 57,842 58,595 Costs from data communications 5,873 4,186 17,584 11,094 services Selling and marketing 1,871 1,476 5,000 4,028 Research and development 268 231 538 703 General and administrative 2,379 2,463 7,187 5,165 --------------------------------- ------------------------------- Total costs and operating expenses 30,007 27,876 88,151 79,585 --------------------------------- ------------------------------- Income from operations 1,034 308 2,378 3,286 Interest income 247 121 703 286 Gain on sale of investment -- -- -- 40 Gain on sale of available-for-sale securities -- 132 -- 132 --------------------------------- ------------------------------- Income before income taxes 1,281 561 3,081 3,744 Provision for income taxes 42 -- 92 -- --------------------------------- ------------------------------- Net income $ 1,239 $ 561 $ 2,989 $ 3,744 ================================= =============================== Basic net income per common share $ 0.08 $ 0.04 $ 0.20 $ 0.26 ================================= =============================== Diluted net income per common share $ 0.08 $ 0.04 $ 0.19 $ 0.25 ================================= =============================== Weighted-average shares used in the calculation of basic net income per common share 15,098 14,517 14,940 14,363 ================================= =============================== Weighted-average shares used in the calculation of diluted net income per common share 15,682 15,143 15,547 14,938 ================================= =============================== GLOBECOMM SYSTEMS INC. CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS) MARCH 31, JUNE 30, 2006 2005 ------------------------------- (UNAUDITED) ASSETS Current assets: Cash and cash equivalents $ 25,680 $ 25,609 Accounts receivable, net 21,779 22,700 Inventories 16,872 12,886 Prepaid expenses and other current assets 984 858 Deferred income taxes 38 38 ------------------------------- Total current assets 65,353 62,091 Fixed assets, net 15,091 16,050 Goodwill 7,204 7,204 Other assets 960 1,033 ------------------------------- Total assets $ 88,608 $ 86,378 =============================== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities $ 22,514 $ 25,571 Deferred liabilities, less current portion 432 670 Total stockholders' equity 65,662 60,137 ------------------------------- Total liabilities and stockholders' equity $ 88,608 $ 86,378 ===============================
Globecomm Systems (GCOM) Inactive
Filed: 3 May 06, 12:00am