Exhibit 99.1
[GSI GLOBECOMM SYSTEMS LOGO]
GLOBECOMM SYSTEMS ANNOUNCES FISCAL 2007 FIRST QUARTER FINANCIAL RESULTS
o Earnings Per Diluted Share of $0.06 in the First Quarter of Fiscal
2007 as Compared to Earnings Per Diluted Share of $0.05 in the First
Quarter of Fiscal 2006
o Increased Revenue Guidance for Fiscal 2007 to Greater than $145
Million from Greater than $140 Million
o Increased Earnings Guidance for Fiscal 2007 to Greater than $0.45 from
Greater than $0.40 Per Diluted Share
HAUPPAUGE, N.Y.--(BUSINESS WIRE)--November 2, 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 2007
first quarter ended September 30, 2006.
FISCAL YEAR 2007 FIRST QUARTER RESULTS
Revenues for the Company's fiscal 2007 first quarter decreased 13.0% to $25.7
million, compared to $29.6 million in the same period last year. Revenues from
ground segment systems, networks and enterprise solutions decreased by 24.1% to
$17.5 million resulting from a delay in the booking of certain major contracts
late in fiscal 2006, which were ultimately awarded in the first quarter of
fiscal 2007. Revenues from data communications services increased 25.9% to $8.3
million driven by increased life cycle support services sales in the government
marketplace and equipment and services sales to a major U.S. enterprise
customer.
Net income for the Company's fiscal 2007 first quarter increased 12.7% to $0.9
million, or $0.06 per diluted share, compared to net income of $0.8 million, or
$0.05 per diluted share, in the first quarter of fiscal 2006. The increase in
earnings per share was a direct result of significantly increased gross margins,
as a result of the projects mix in both the data communication services and
ground segment systems and networks business segments. The gross margin
percentage experienced in the first quarter of fiscal 2007 is greater than the
gross margin percentage expected for the remainder of fiscal year 2007.
MANAGEMENT'S REVIEW OF RESULTS
Globecomm's $78 million in first quarter contract announcements, with the
potential to reach $90 million with follow-on options, represents the strongest
quarterly contract activity in the Company's history and provides Globecomm with
solid momentum and visibility entering the second quarter. As a result, the
Company has increased previously issued annual revenue and earnings guidance.
David Hershberg, Chairman and CEO of the Company, indicated, "In particular, we
are excited to have been selected for inclusion in two significant Indefinite
Delivery / Indefinite Quantity (IDIQ) U.S. Government contract vehicles: 1) The
Department of The Navy Space and Naval Warfare Systems Center to provide
portable satellite communications terminals and 2) government agencies with
turnkey commercial satellite systems and associated support services for
satellite terminals, including all hardware, software, services and data to
operate terminals. The
Company is now included in five IDIQ programs and on a GSA schedule. These
contracting vehicles are critical to Globecomm's continued success in the
government marketplace."
During the quarter, Globecomm also announced a significant contract award with a
major media production and entertainment company. The Company is currently
expanding the Long Island International Teleport and designing and constructing
a state-of-the-art media operations center for the customer inside the Globecomm
world headquarters. "This is a critical contract in positioning Globecomm as an
evolving leader in the satellite-based broadcasting marketplace," said Mr.
Hershberg. He concluded, "The first quarter business mix included projects with
greater gross margins than traditionally experienced by the Company. With that
said, the revenue level achieved in the first quarter was in line with internal
expectations. The future is bright for the Company and we look forward to an
exciting year."
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 $145 million, or at least a 15% increase over fiscal 2006, and record
earnings per diluted share in excess of $0.45 per share, representing at least a
67% increase over fiscal 2006 earnings per diluted share, which excluded a net
non-recurring gain in the amount of $0.02 of earnings per diluted share.
These expectations reflect actual results for the Company's three months ended
September 30, 2006 and management's current view of the next nine months. 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
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 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)
(UNAUDITED)
THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2006 2005
---------------------- ------------------------
Revenues from ground segment systems, networks
and enterprise solutions $ 17,461 $ 23,019
Revenues from data communications services 8,258 6,557
---------------------- ------------------------
Total revenues 25,719 29,576
---------------------- ------------------------
Costs and operating expenses:
Costs from ground segment systems, networks
and enterprise solutions 14,075 19,525
Costs from data communications services 6,587 5,568
Selling and marketing 1,775 1,514
Research and development 200 109
General and administrative 2,414 2,256
---------------------- ------------------------
Total costs and operating expenses 25,051 28,972
---------------------- ------------------------
Income from operations 668 604
Interest income 268 229
---------------------- ------------------------
Income before income taxes 936 833
Provision for income taxes 20 20
---------------------- ------------------------
Net income $ 916 $ 813
====================== ========================
Basic net income per common share $ 0.06 $ 0.06
====================== ========================
Diluted net income per common share $ 0.06 $ 0.05
====================== ========================
Weighted-average shares used in the
calculation of basic net income
per common share 15,219 14,719
====================== ========================
Weighted-average shares used in the
calculation of diluted net income
per common share 15,834 15,336
====================== ========================
GLOBECOMM SYSTEMS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
SEPTEMBER 30, JUNE 30,
2006 2006
-------------------- ------------------
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents $ 25,773 $ 24,512
Accounts receivable, net 25,182 30,837
Inventories 14,982 13,058
Prepaid expenses and other current assets 1,012 1,131
Deferred income taxes 22 22
-------------------- ------------------
Total current assets 66,971 69,560
Fixed assets, net 16,410 15,510
Goodwill 7,204 7,204
Other assets 961 960
-------------------- ------------------
Total assets $ 91,546 $ 93,234
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 21,589 $ 25,865
Other liabilities 1,027 353
Total stockholders' equity 68,930 67,016
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Total liabilities and stockholders' equity $ 91,546 $ 93,234
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