Exhibit 99.1
[GLOBECOMM SYSTEMS LOGO]
GLOBECOMM SYSTEMS ANNOUNCES FISCAL 2006 FOURTH QUARTER AND
RECORD FISCAL YEAR 2006 FINANCIAL RESULTS
o Earnings Per Diluted Share Increased 92.9% in Fiscal 2006 as Compared
to Fiscal 2005, Excluding Non-Recurring Gains
o Earnings Per Diluted Share of $0.10 in the Fourth Quarter of Fiscal
2006 as Compared to Earnings Per Diluted Share of $0.07 in Fourth
Quarter of Fiscal 2005
o Revenues Increased 32.9% in the Fourth Quarter of Fiscal 2006 as
Compared to the Fourth Quarter of Fiscal 2005
HAUPPAUGE, N.Y.--(BUSINESS WIRE)--September 12, 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
fourth quarter and fiscal year ended June 30, 2006.
FISCAL YEAR 2006 FOURTH QUARTER RESULTS
Revenues for the Company's fiscal 2006 fourth quarter increased 32.9% to a
record $35.5 million, compared to $26.7 million in the same period last year.
Revenues from ground segment systems, networks and enterprise solutions
increased by 36.7% to $28.6 million driven primarily by demand in the government
marketplace. Revenues from data communications services increased 19.4% to $6.9
million, driven primarily by increases in both our managed network and life
cycle support services. In particular, in our managed network service offerings
we had increases in telephony, VSAT multi-mode and Internet and data.
Net income for the Company's fiscal 2006 fourth quarter increased to $1.5
million, or $0.10 per diluted share, compared to net income of $1.1 million, or
$0.07 per diluted share, in the fourth quarter of fiscal 2005 on the basis of
generally accepted accounting principles (GAAP). Net income for the fourth
quarter of fiscal 2006 included a non-recurring gain of $0.3 million, or $0.02
per diluted share, which represents a gain on the liquidation of the Globecomm
Systems Europe Limited subsidiary in the United Kingdom. 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, relating to 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 2006 FULL YEAR RESULTS
Revenues for the Company's fiscal year 2006 increased 15.0% to a record $126.0
million, compared to $109.6 million last year. Revenues from data communication
services increased by 48.3% to $28.1 million due to increases in telephony, VSAT
multi-mode, and Internet and data within our managed network services along with
an increase in life cycle support services. Revenues from ground segment
systems, networks and enterprise solutions increased 8.1% to $97.9 million, as
compared to $90.1 million in the same period last year driven primarily by
demand in the government marketplace.
Net income for the Company's fiscal year 2006 was $4.5 million, or $0.29 per
diluted share, compared to net income of $4.8 million, or $0.32 per diluted
share, in fiscal year 2005 on a GAAP basis. Net income for fiscal 2006 included
a $0.3 million gain, or $0.02 per diluted share, relating to a gain on the
liquidation of a foreign subsidiary. 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. Included in this $2.4 million
settlement was a $1.5 million bad debt recovery, which reduced general and
administrative expenses in fiscal 2005.
Excluding these non-recurring gains, net income for the fiscal year 2006 was
$4.2 million, or $0.27 per diluted share compared to net income for fiscal year
2005 of $2.1 million, or $0.14 per diluted share.
FISCAL YEAR 2006 HIGHLIGHTS BY BUSINESS SEGMENT
GROUND SEGMENT SYSTEMS AND NETWORKS
o Awarded an $11 million contract from Harris Corporation (NYSE:HRS) in
support of the Federal Aviation Administration's (FAA)
Telecommunications Infrastructure (FTI) program. Globecomm is
upgrading 42 FAA sites with new satellite communications equipment
through the FTI program.
o Awarded multiple contracts from SES Americom to support the rollout of
Americom's IP-PRIME service, which empowers telcos of all sizes with a
true "triple play" capability, allowing telephone companies to provide
voice, broadband and television into the home via a common
interconnect - quickly and economically.
o Awarded a $7.8 million contract from NATO to provide a Multi-National
global positioning satellite-based friendly force tracking system
(FTS). The FTS will assist NATO with the monitoring, command and
control of deployed forces, which will assist with the identification
of friendly versus enemy forces and help prevent fratricide or
"blue-on-blue". Once deployed, NATO will have the ability to identify
where its personnel are located at all times, identify other
multi-national forces and have the ability both to do so in routine
and operational situations.
o Awarded an indefinite-delivery/indefinite-quantity contract from The
Department of The Navy Space and Naval Warfare Systems Center to
provide portable satellite communications terminals.
o Awarded a Multiple Award Schedule contract by the U.S. General
Services Administration (GSA), enhancing the Company's ability to
offer its satellite communications solutions directly to authorized
civilian and defense agencies. GSA schedules give federal contracting
officers a convenient method to procure products and services, while
giving private companies greater access to federal decision makers.
o Adopted a new branding strategy focused 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 as part of
Globecomm's marketing strategy in the four major markets we serve;
Government, Broadcast, Service Provider and Enterprise.
DATA COMMUNICATION SERVICES
o Awarded a five-year contract, with a five-year option, from Raytheon
Company (NYSE:RTN) to support the National Weather Service's Advanced
Weather Interactive Processing System. Raytheon selected Globecomm as
a key contractor to support the satellite broadcast network, which
includes satellite datacasting operations and National Weather Office
site satellite equipment maintenance.
o Teamed with Samacom, the leading provider of satellite communication
services in the Middle East, to launch a new Middle East service
operation. The hub for operations is located at the Samacom teleport
facility in Dubai, UAE. The agreement between the two companies
facilitates the launch of VSAT services, utilizing iDirect technology
to support voice, Internet and data solutions throughout the region.
o Awarded $22 million five-year contract, $32 million if options are
exercised, from a major media and production company. Pursuant to the
agreement, Globecomm will provide origination, monitoring and
uplinking services for the media company's channel portfolio.
Globecomm will also design and construct a state-of-the-art network
operations center and dedicated uplink facility (the facility) at its
world
headquarters in Hauppauge, NY, which will be utilized to broadcast the
media company's content to authorized sites throughout the United
States.
o Expanded its Broadcast Lab, a test facility for leading-edge video
applications, to integrate test capabilities for the many technologies
involved in the delivery of IPTV. The expansion equips Globecomm to
conduct research and development, both for customers and for its own
products and services, in areas that include MPEG-4, standardizing
head-end systems, integrating video-on-demand capability into regional
head-ends and adapting advertising insertion systems for operation
with IPTV content streams.
o Added two key government customers to a growing life cycle support
base of over 4,000 sites managed throughout the US for Enterprise and
Government owned facilities.
o Increased revenues 48.3% in fiscal 2006 as compared to fiscal 2005.
MANAGEMENT'S REVIEW OF RESULTS
"Fiscal 2006 was another record year for Globecomm both in terms of revenues and
profits. Excluding non-recurring gains, the Company doubled net income, nearly
doubled earnings per diluted share and capped off the year with the first $35
million revenue quarter in the Company's twelve-year history. The Company was
awarded key contracts from Harris Corporation and Raytheon, and recently
announced a key strategic multi-year award from a major media and production
company positioning Globecomm for continued success in the broadcast
marketplace. The execution of Globecomm's one-stop-shop strategy was showcased
in fiscal 2006 more than ever. The ability to design, install, maintain and
service mission critical networks was the driving force behind these contract
wins as many companies are beginning to outsource strategic core components of
major networks. These types of awards provide steady revenue streams and
validate the Company's ability to effectively execute mission critical programs
on a long term basis," said David Hershberg, Chairman and CEO. "Globecomm enters
fiscal 2007 anticipating record revenues and profits. We are excited about our
future and intend to continue to build the Company for the long-term to continue
providing value to our stakeholders."
Ken Miller, Globecomm's President said, "Our plans for this year are centered on
leveraging the know-how we have developed through our Expert Teams who are
focused on Internet Protocol Networking, Broadcast Technology, Pre-Engineered
Systems, Network Management Systems and Network Services. These Expert Teams
provide the value to Globecomm's products, services and solutions. Through this
know-how we are expanding the markets we serve and improving the attractiveness
of our offerings. We look forward to translating our ever increasing base of
know-how into improved performance over this year and the coming years."
MANAGEMENT'S CURRENT EXPECTATIONS FOR THE FISCAL YEAR ENDING JUNE 30, 2007
Globecomm currently expects record consolidated revenues for fiscal year 2007 in
excess of $140 million, or an 11% increase over fiscal 2006, and record earnings
per diluted share in excess of $0.40 per share, representing a 48% increase over
fiscal 2006 earnings per diluted share, excluding the net non-recurring gain.
These expectations reflect management's current view of the next twelve months.
However, the Company anticipates quarterly income statement fluctuations, in
particular in the first quarter of fiscal 2007, resulting from the nature of the
business, the size of certain contracts in backlog and the timing of recognizing
revenues under those contracts. Actual results for fiscal year 2007 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.
ABOUT GLOBECOMM SYSTEMS
Globecomm Systems Inc. provides end-to-end value-added satellite-based
communication products, services and solutions by leveraging its core satellite
ground segment systems and network capabilities, with its satellite
communication services capabilities. The products and services Globecomm offers
include pre-engineered systems, systems design and integration services, managed
network services and life cycle support services. Globecomm's customers include
communications service providers, commercial enterprises, broadcast and other
media and content providers and government and government-related entities.
Based in Hauppauge, New York, Globecomm Systems also maintains offices in
Washington, DC, Hong Kong, the United Kingdom, the United Arab Emirates and
Afghanistan.
Certain of the statements contained in this press release may be deemed
forward-looking statements. Such statements, and other 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 and
matters 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, its Quarterly
Report 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 and political and economic instability in the United States
and abroad, including the hostilities in Iraq and Afghanistan.
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)
THREE MONTHS ENDED YEARS ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2006 2005 2006 2005
-------- -------- -------- --------
Revenues from ground segment systems,
networks and enterprise solutions $ 28,609 $ 20,934 $ 97,967 $ 90,656
Revenues from data communications services 6,898 5,779 28,069 18,928
-------- -------- -------- --------
Total revenues 35,507 26,713 126,036 109,584
-------- -------- -------- --------
Costs and operating expenses:
Costs from ground segment systems,
networks and enterprise solutions 23,568 16,762 81,410 75,357
Costs from data communications
services 6,021 4,433 23,605 15,527
Selling and marketing 2,029 1,793 7,029 5,821
Research and development 514 318 1,052 1,021
General and administrative 2,402 2,431 9,589 7,596
-------- -------- -------- --------
Total costs and operating expenses 34,534 25,737 122,685 105,322
-------- -------- -------- --------
Income from operations 973 976 3,351 4,262
Interest income 262 158 965 444
Gain on sale of investment -- -- -- 40
Gain on sale of available-for-sale
securities -- -- -- 132
Gain on liquidation of foreign subsidiary 264 -- 264 --
-------- -------- -------- --------
Income before income taxes 1,499 1,134 4,580 4,878
(Benefit) provision for income taxes (4) 64 88 64
-------- -------- -------- --------
Net income $ 1,503 $ 1,070 $ 4,492 $ 4,814
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Basic net income per common share $ 0.10 $ 0.07 $ 0.30 $ 0.33
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Diluted net income per common share $ 0.10 $ 0.07 $ 0.29 $ 0.32
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Weighted-average shares used in the
calculation of basic net income
per common share 15,184 14,593 15,001 14,422
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Weighted-average shares used in the
calculation of diluted net income
per common share 15,791 15,048 15,608 14,966
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GLOBECOMM SYSTEMS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, JUNE 30,
2006 2005
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ASSETS
Current assets:
Cash and cash equivalents $24,512 $25,609
Accounts receivable, net 30,837 22,700
Inventories 13,058 12,886
Prepaid expenses and other current assets 1,131 858
Deferred income taxes 22 38
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Total current assets 69,560 62,091
Fixed assets, net 15,510 16,050
Goodwill 7,204 7,204
Other assets 960 1,033
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Total assets $93,234 $86,378
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $25,865 $25,571
Deferred liabilities, less current portion 353 670
Total stockholders' equity 67,016 60,137
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Total liabilities and stockholders' equity $93,234 $86,378
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