RRsat Presents Record Revenue of $25.9 Million and Record Net Income of $4.3 Million in First Quarter 2010

RE'EM, Israel, May 10 /PRNewswire-FirstCall/ -- RRsat Global Communications Network Ltd. (Nasdaq: RRST), a growing provider of comprehensive content management and global distribution services to the television and radio broadcasting industries, today announced its financial results for the first quarter of 2010.

First Quarter 2010 Results:

Revenues for the first quarter of 2010 totaled $25.9 million, an increase of 15.8% compared to $22.3 million in the first quarter of 2009.

Backlog of signed agreements, as of March 31, 2010, was at $165.2 million, including $63.7 million of revenues expected to be recognized in the remainder of 2010, compared to a backlog of $167.6 at the end of the previous quarter.  The decrease is mainly attributed to the weakness of the Euro versus the US Dollar during the quarter, which was partially offset by an increase in new contracts and the extension of existing contracts.

Operating income for the first quarter of 2010 totaled $3.8 million compared to $4.6 million in the first quarter of 2009 and to $2.2 million in the previous quarter.

Net income on a GAAP basis for the first quarter of 2010 was $4.3 million, a 42% increase from $3.0 million in the first quarter of 2009.  Adjusted Net Income was $2.6 million for the quarter, compared to $2.8 million in the first quarter of 2009. Net income per diluted share on a GAAP basis for the quarter was $0.24, compared to $0.17 in the first quarter of 2009.  Adjusted net income per diluted share, totaled $0.15, compared to $0.16 in the first quarter of 2009.

Adjusted EBITDA for the first quarter of 2010 totaled $5.4 million, compared to $6.0 million in the first quarter of 2009.

Cash, cash equivalents and marketable securities as at March 31, 2010 was $40.1 million, compared with $47.5 million as at December 31, 2009.  The difference in the cash balance was mainly attributed to the $4 million the company paid out in dividends to its shareholders during the first quarter, $3.5 million invested in capital expenditures and a negative operating cash flow of $0.3 million.

Guidance for second quarter revenue is in the range of $26.4 - $27.4 million.  For 2010, revenue guidance remains unchanged in the range of $107 - $110 million.

David Rivel, CEO of RRsat commented, "We are pleased with our results and believe that our strategy -- to become the largest broadcasting and play-out service provider for content providers -- will produce further positive developments.  We have identified four key areas to support our strategy: 1) further strengthen our position in our legacy market of mid and small sized customers/broadcasters; 2) increase our penetration into the major broadcasters' market, which we have already started in 2009 and in the first quarter of 2010; 3) continue to evaluate M&A possibilities to compliment our business; and 4) further enhance our infrastructure."

Mr. Rivel continued, "So far, we have seen significant advances to support our strategy.  We signed a distribution agreement with FOX Sports to distribute FOX Sports' content to Europe, the Middle East and North Africa via the Eurobird-9 satellite.  We also signed an agreement to distribute Nickelodeon, part of the MTV Network, to Central and Eastern Europe.  This represents only the initial stages of our penetration strategy, which we believe provides significant growth potential.  We are seeking to continue expanding our services and to add new channels for these customers, as well as other major broadcasters with whom we are in the process of building and expanding relationships," concluded Mr. Rivel.

Conference Call Information

Conference call scheduled later today, May 10, 2010 at 9:00 am ET. On the call, Mr. David Rivel, Founder & CEO, Mr. Gil Efron, CFO, and Mr. Lior Rival, VP Sales and Marketing will review and discuss the results and will be available to answer investor questions.

To participate, please call one of the following teleconferencing numbers. Please begin placing your calls at least 10 minutes before the conference call commences. If you are unable to connect using the toll-free numbers, please try the international dial-in number.

US Dial-in Number: 1 888 668 9141

UK Dial-in Number: 0 800 917 5108

Israel Dial-in Number: 03 918 0609

International Dial-in Number:  +972 3 918 0609

at:  

9:00 am ET; 6:00 am PT; 2:00 pm UK time; 4:00 pm Israel Time

A replay of the call will be available from the day after the call. The link to the replay will be accessible from RRsat's website at: www.rrsat.com. To access the telephone replay dial one of the following numbers: 1-888-782-4291 (US) and +972 3 925 5900 (International).

Use of Non- GAAP Financial Measures

RRsat uses two financial measures, adjusted net income and adjusted EBITDA, which are non-GAAP financial measures. RRsat believes that both non-GAAP financial measures are principal indicators of the operating and financial performance of its business. Adjusted net income is calculated based on the net income in our financial statements excluding non-cash equity-based compensation charges recorded in accordance with SFAS 123R, the non-cash income (loss) reflecting changes in the fair value of embedded currency conversion derivatives resulting from the application of SFAS 133 and the resulting income tax (increase) decrease.  Adjusted EBITDA is calculated by deducting from net income interest and marketable securities income, currency fluctuation and other financial income (expenses), net, changes in fair value of embedded currency conversion derivatives, other income (expenses), net, and adding non-cash equity-based compensation charge, depreciation and amortization.  Management believes the non-GAAP financial measures (adjusted net income and adjusted EBITDA) provided are useful to investors' understanding and assessment of RRsat's on-going core operations and prospects for the future. Management uses these non-GAAP financial measures in order to evaluate the performance of the company. However, such measures should not be considered in isolation or as substitutes for results prepared in accordance with GAAP.  In addition, RRsat's adjusted EBITDA may not be comparable to adjusted EBITDA as reported by other companies.

Reconciliations of the non-GAAP measures (adjusted net income and adjusted EBITDA) to net income, the most comparable GAAP measure, are provided in the schedules attached to this release.

About RRsat Global Communications Network Ltd.

RRsat Global Communications Network Ltd. (Nasdaq: RRST) provides global, comprehensive, content management and distribution services to the rapidly expanding television and radio broadcasting industries. Through its proprietary "RRsat Global Network," composed of satellite and terrestrial fiber optic transmission capacity and the public Internet, RRsat is able to offer high-quality and flexible global distribution services for content providers. RRsat's comprehensive content management services include producing and playing out TV content as well as providing satellite newsgathering services (SNG). RRsat concurrently provides these services to more than 545 television and radio channels, covering more than 150 countries. Visit the company's website www.RRsat.com for more information.

Safe Harbor Statement

This press release contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding (i) the growth of our business and the television and radio broadcasting industries, (ii) our expectation to expand our client base and sell additional services to our existing client base, (iii) our ability to successfully integrate the teleports we acquired, and (iv) our ability to report future successes. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the companies and the industry as of the date of this press release. The company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in its expectations, except as may be required by law. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking statements, including the risks indicated in our filings with the Securities and Exchange Commission (SEC). For more details, please refer to our SEC filings and the amendments thereto, including our Annual Report on Form 20-F for the year ended December 31, 2009 and our Current Reports on Form 6-K.

SOURCE RRSat Global Communications Network Ltd.