Exhibit 99.1
[GRAPHIC OMITTED]
GLOBECOMM SYSTEMS ANNOUNCES RECORD REVENUES FOR FISCAL
2007 SECOND QUARTER AND SIX-MONTH FINANCIAL RESULTS
o Earnings Per Diluted Share increased 83% to $0.11 in the Second Quarter of
Fiscal 2007 as Compared to Earnings Per Diluted Share of $0.06
in the Second Quarter of Fiscal 2006
o Revenues Increased 22.8 % in the Second Quarter of Fiscal 2007
as Compared to the Second Quarter of Fiscal 2006
HAUPPAUGE, N.Y.--(BUSINESS WIRE)--February 6, 2007--Globecomm Systems Inc.
(NASDAQ: GCOM-News), a global provider of end-to-end satellite-based
communications solutions, today announced financial results for the Company's
fiscal 2007 second quarter and six-months ended December 31, 2006.
FISCAL YEAR 2007 SECOND QUARTER RESULTS
Revenues for the Company's fiscal 2007 second quarter increased 22.8% to a
record $36.7 million, compared to $29.9 million in the same period last year.
Revenues from ground segment systems, networks and enterprise solutions
increased by 25.4% to $28.4 million driven by continued success in the
government marketplace. Revenues from data communications services increased
14.5% to $8.4 million revenue mainly in life cycle support services in the
government marketplace. Overall, revenues in the government marketplace as a
percentage of total revenues increased to 62% for the three-months ended
December 31, 2006 from 56% in the same period last year.
Net income for the Company's fiscal 2007 second quarter increased 92.7% to $1.8
million, or $0.11 per diluted share, compared to net income of $0.9 million, or
$0.06 per diluted share, in the second quarter of fiscal 2006. The increased
revenue and increase in gross margin percentage drove the increase in net
income. The increase in gross margin was mainly driven by the ground segment
systems, networks and enterprise solutions' pre-engineered systems product line
in the government marketplace.
FISCAL YEAR 2007 SIX-MONTH RESULTS
Revenues for the Company's fiscal 2007 six-months ended December 31, 2006
increased 5.0% to a record $62.4 million, compared to $59.5 million in the same
period last year. The increase in revenues was driven by a 19.9% increase in
revenues by the data communications services business segment primarily driven
by increased life cycle support services, along with an increase in telephony
service revenue. Revenue for ground segment systems, networks and enterprise
solutions remained relatively consistent compared to the same period last year.
Overall, revenues in the government marketplace as a percentage of total
revenues increased to 62% for the six-months ended December 31, 2006 from 52% in
the same period last year.
Net income for the Company's first six-months of fiscal 2007 increased 55.5% to
$2.7 million, or $0.17 per diluted share, compared to net income of $1.8
million, or $0.11 per diluted share, in the same period last year. The increased
revenue and an increase in the overall gross margin percentage of the Company
drove the increase in net income. The increase in gross margin was due to
increased revenue in the government marketplace in both the life cycle support
services and pre-engineered systems product line in the data communications
services and ground segment systems, networks and enterprise solutions business
segments, respectively.
MANAGEMENT'S REVIEW OF RESULTS
David Hershberg, Chairman and CEO of the Company, said, "Globecomm continues to
gain traction in the government marketplace in both the ground segment systems,
networks and enterprise solutions, and the data communications services business
segments, which is a result of our ability to provide turnkey systems and
related services under one roof. For example, in the second quarter, the Company
announced a multi-year life cycle support services contract from Harris
Corporation to sustain the Federal Aviation Administration FTI-SAT program by
supporting equipment previously deployed by Globecomm at forty-three sites
across the United States. We are increasingly seeing requests for these types of
turnkey services and have the infrastructure in place to rapidly respond to such
requirements." Mr. Hershberg continued, "During the quarter, the Company
received a contract for multi-band Auto-Explorer terminals, which allow for ease
of operation on both commercial and military satellites. This is a very
important contract as it sets the foundation for the development of future
multi-band terminals, including Ka-Band to support communications to and from
the next generation of military satellites slated for launch in the next
eighteen months. Additionally, the Company received a follow-on contract from
NATO to provide additional systems in support of a multi-national global
positioning satellite-based friendly force tracking system (FTS). We are hopeful
that there will be additional FTS requirements in the future and look to expand
the Company's current relationship with NATO."
MANAGEMENT'S CURRENT EXPECTATIONS FOR THE FISCAL YEAR ENDING JUNE 30, 2007
Globecomm continues to expect 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, excluding a
net non-recurring gain in fiscal 2006 in the amount of $0.02 of earnings per
diluted share.
These expectations reflect actual results for the Company's six-months ended
December 31, 2006 and management's current view of the next six 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
- -------------------------
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 SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
2006 2005 2006 2005
------------------------------------ --------------------------------------
Revenues from ground segment systems,
networks and enterprise solutions $ 28,351 $ 22,604 $ 45,812 $ 45,623
Revenues from data communications services 8,370 7,308 16,628 13,865
------------------------------------ -------------------------------------
Total revenues 36,721 29,912 62,440 59,488
------------------------------------ -------------------------------------
Costs and operating expenses:
Costs from ground segment systems,
networks and enterprise solutions 23,202 18,701 37,277 38,226
Costs from data communications 6,976 6,143 13,563 11,711
services
Selling and marketing 1,766 1,615 3,541 3,129
Research and development 323 161 523 270
General and administrative 2,951 2,552 5,365 4,808
------------------------------------ -------------------------------------
Total costs and operating expenses 35,218 29,172 60,269 58,144
------------------------------------ -------------------------------------
Income from operations 1,503 740 2,171 1,344
Interest income 348 227 616 456
------------------------------------ -------------------------------------
Income before income taxes 1,851 967 2,787 1,800
Provision for income taxes 45 30 65 50
------------------------------------ -------------------------------------
Net income $ 1,806 $ 937 $ 2,722 $ 1,750
==================================== =====================================
Basic net income per common share $ 0.12 $ 0.06 $ 0.18 $ 0.12
==================================== =====================================
Diluted net income per common share $ 0.11 $ 0.06 $ 0.17 $ 0.11
==================================== =====================================
Weighted-average shares used in the
calculation of basic net income
per common share 15,601 15,005 15,409 14,860
==================================== =====================================
Weighted-average shares used in the
calculation of diluted net income
per common share 16,489 15,606 16,181 15,477
==================================== =====================================
GLOBECOMM SYSTEMS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
DECEMBER 31, JUNE 30,
2006 2006
-----------------------------------------
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents $ 26,009 $ 24,512
Accounts receivable, net 37,977 30,837
Inventories 14,925 13,058
Prepaid expenses and other current assets 1,449 1,131
Deferred income taxes 22 22
-----------------------------------------
Total current assets 80,382 69,560
Fixed assets, net 19,640 15,510
Goodwill 7,204 7,204
Other assets 967 960
-----------------------------------------
Total assets $ 108,193 $ 93,234
=========================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 33,617 $ 25,865
Other liabilities 960 353
Total stockholders' equity 73,616 67,016
-----------------------------------------
Total liabilities and stockholders' equity $ 108,193 $ 93,234
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