- The BBC saving over £50 million a year
- £30 million of that going into drama on BBC One
- BBC Three being reinvented as a new and innovative online service
- The freed up spectrum being used to extend CBBC by an hour a night and to provide a BBC1 +1 service
Record Full-Year Revenues of $121.8 Million, Up 7.4% from Year-Ago Period;
Record High Next 12-Month Backlog of $92 Million
RRsat Global Communications Network Ltd. (NASDAQ: RRST), a leading provider of digital media services including content management and global distribution services to the broadcasting industry, announced today financial results for the fourth quarter and year ended December 31, 2013.
Fourth Quarter Highlights
· Record revenues of $32.5 million, up 10.5% year-over-year
· Gross margin for the quarter was 23.3%, down from 25.1% in Q4 2012 due to revenue mix and the impact of foreign currency fluctuations
· Non-GAAP net income of $0.14 per share, unchanged from Q4 2012 despite of the negative effect of foreign currency
· Cash flow from operations was $8.1 million in comparison to $2.8 million in Q4 2012
· Board announces a cash dividend of $0.06 per share, representing an annual dividend yield of 2.6%, in line with previously adopted quarterly dividend policy
· Record revenues of $121.8 million, up 7.4% year-over-year
· Gross margin for the year was 24.2%, up from 23.9% in 2012 despite foreign currency impact
· Non-GAAP net income per share was $0.48, compared to $0.46 per share in 2012, reflecting a $1.6 million foreign currency impact and higher sales and marketing spending in 2013 resulting from the continuous investment in our geographic presence, to expand our future growth opportunities.
· Cash flow from operations was $21.3 million in comparison to $15.9 million in 2012;
“We generated record revenue and solid growth in the fourth quarter as well as full year 2013, continuing the momentum we saw throughout the year,” commented Avi Cohen, CEO of RRsat. “Our efforts to transform the Company into a global leader with local services, leveraging local talent in key markets around the world and expanding our capabilities, are driving record revenue, accelerating growth and generated our highest next 12months backlog in the Company’s history.”
Mr. Cohen continued, “The integration of JCA Content Preparation services, following our recent acquisition, into our existing infrastructure and service platform has facilitated the establishment of our ‘Global Media Services Platform.’ This powerful platform offers our customers a global single point of contact for handling any media, preparing it, and delivering it to any screen, anywhere in the world, in any form of video consumption, from linear TV to video-on-demand, streaming, pay-per-view and TV-Everywhere. These expanded capabilities are helping us reach a higher tier of potential customers, including global broadcasters and leading content owners.”
In accordance with the Company’s dividend policy, on March 5, 2014, the Board of Directors declared a cash dividend in the amount of $0.06 per ordinary share, and in the aggregate amount of approximately $1.0 million, representing 50% of RRsat’s net income for the fourth quarter of 2013. The dividend will be payable on April 9, 2014 to all of the Company’s shareholders of record at the end of the trading day on the NASDAQ on March 19, 2014.
Fourth Quarter 2013 Financial Results
Revenues: Fourth quarter 2013 revenues were a record of $32.5 million up 10.5% from $29.4 million in the fourth quarter of 2012 and up 6.2% from $30.6 million in the third quarter of 2013.
Gross profit: Fourth quarter 2013 gross profit and gross margin were $7.6 million and 23.3% respectively, compared to $7.4 million and 25.1%, respectively, for the fourth quarter of 2012. The gross profit in the fourth quarter was mainly impacted by expenses increase related to foreign currency fluctuation, and by the impact of the revenue mix in the quarter. Excluding the foreign currency impact, gross margin would have increased compared to the fourth quarter last year. Although management continues to expect quarterly fluctuations in gross margin due to revenue mix, going forward, excluding any additional foreign currency impact, management believes gross margins should return to historical levels.
Non-GAAP operating income & operating margin, was $2.1 million and 6.5% respectively during the fourth quarter of 2013, compared to $2.9 million and 9.9% respectively in the fourth quarter of 2012. The main change was due to an extraordinary accrual for bad debt expense related to Fashion TV. Subsequent to the end of the quarter, RRsat was forced to take down the services provided to this former customer for non-payment. RRsat filed a $5 million lawsuit in Israel to recoup debt owed as well as damages to RRsat. It is important to note that the Company has been successful in signing a contract with a new customer, also in the fashion industry, utilizing the satellite capacity that was freed up as a result of the forced termination of Fashion TV. This new contract has resulted in an increase to RRsat’s backlog. As a result, management does not expect any negative impact to the Company’s income statement. In aggregate, the foreign currency and extraordinary bad debt expense totaled $0.9 million impact in the fourth quarter.
Inclusive of the extraordinary bad debt expense and the foreign currency impact, Non-GAAP net income for the fourth quarter ended December 31, 2013 was $2.4 million, unchanged compared to $2.4 million in the fourth quarter of 2012 and improved to $2.1 million for the third quarter of 2013. Non-GAAP net income per share on a fully diluted basis was $0.14 for the fourth quarter of 2013, compared to $0.14 in the fourth quarter last year and $0.12 in the third quarter of 2013.
GAAP net income for the fourth quarter of 2013 was $2.1 million, compared to $2.4 million in the fourth quarter of 2012 and $1.1 million in the third quarter of 2013. GAAP net income per share on a fully diluted basis was $0.12 for the fourth quarter of 2013 compared to $0.14 in the fourth quarter of 2012 and $0.06 in the third quarter of 2013.
Adjusted EBITDA for the fourth quarter of 2013 was $4.5 million compared to $5.0 million in the fourth quarter of 2012 and $5.0 million in the third quarter of 2013.
Backlog to be delivered in the next 12 months increased to a record $92 million, up from $87 million in the year-ago period and up from $88 million in the third quarter of 2013.
Full year 2013 Financial Results
Revenues: Full year 2013 revenues were a record $121.8 million up 7.4% compared to $113.4 million for 2012.
Gross profit: Full year 2013 gross profit and gross margin were $29.5 million and 24.2% respectively, compared to $27.1 million and 23.9%, respectively, for 2012. The gross profit in 2013 was mainly impacted by expenses related to foreign currency fluctuation in the amount of $1.6 million.
Non-GAAP operating income & operating margin were $9.9 million and 8.1% respectively during 2013, compared to $10.3 million and 9.1% respectively in 2012. The main change was due to an extraordinary $0.5 million bad debt expense related to a former customer and the effect of foreign currency impact in the amount of $1.6 million. Normalizing for the foreign currency fluctuations and the impact of the bad debt expense operating margin would have increased to $12 million and 9.9% respectively compared to 2012. In aggregate, the foreign currency and extraordinary bad debt expense totaled $2.1million impact for the full year.
GAAP operating income was $8.0 million compared to $9.7 million in 2012. GAAP operating margin was 6.5% compared to 8.5% in 2012.
Non-GAAP net income was $8.3 million, an increase of 4.6% compared to $7.9 million in 2012. Non-GAAP net income per share on a fully diluted basis was $0.47 compared to $0.46 in 2012.
GAAP net income was $6.5 million compared to $8.3 million in 2012. GAAP net income per share on a fully diluted basis was $0.37 compared to $0.48 in 2012.
Adjusted EBITDA was $18.7 million in 2013, down slightly compared with $18.9 million in 2012.
Cash, cash equivalents and marketable securities as of December 31, 2013 totaled $24.2 million compared with $26.4 million as of December 31, 2012. The change in cash position during the period was mainly attributable to the acquisition of JCA in the third quarter investing in CAPEX and the distribution of a cash dividend.
Full Year 2014 Guidance
Full year 2014 total revenues are expected to be in the range of $129 million to $134 million representing 6.2% to 10% year-over-year growth.
Given the increase of RRsat’s revenue outside of the 24/7 services and some level of seasonality associated with that revenue, management believes that an annual revenue guidance is more appropriate than quarterly estimates. Management continues to expect some level of variation in mix from quarter to quarter leading to some fluctuations in revenues and gross margin between quarters. However, management continues to anticipate improvement in gross profit margin, and expects full-year 2014 gross margin to be higher than the margin for the full year 2013.
Conference Call Information
The Company will conduct a conference call today, March 5, 2014 at 9 a.m. ET (4 p.m. Israel time). On the call, Mr. Avi Cohen, Chief Executive Officer and Mr. Shmulik Koren, Chief Financial Officer will review and discuss the results and will be available to answer investor questions.
Call time: 9 a.m. Eastern Time; 4 p.m. Israel Time
- Dial-in number from within the United States: 1-877-941-2068
- Dial-in number from Israel: 1809-21-4368
- Dial-in number from the UK: 0800-358-5258
- Dial-in number (other international): 1-480-629-9712
- Playback, available until March 12, 2014 by calling 1-877-870-5176 (United States) or 1-858-384-5517 (international). Please use pin number 4669061 for the replay.
- A live webcast is accessible at http://public.viavid.com/index.php?id=107916.
Eurosport and France Télévisions have announced that in partnership with the French Tennis Federation (FFT) they will continue to broadcast the French Open until 2018. This agreement, which makes Eurosport and France Télévisions the official broadcasters for the five coming editions of the Roland-Garros tournament in the French market, is the result of a tender launched last autumn regarding the commercialisation of the audio-visual rights for the coming editions 2014 until 2018 of the tournament.
France Télévisions will remain domestic broadcaster of the French Open, as they have been since 1987. Eurosport, already broadcaster of the French Open in the rest of Europe until 2021, has acquired with this deal sub-licensed rights in France from France Télévisions.
Jean-Thierry Augustin, CEO of the Eurosport Group, says: “We are very pleased that we are able to continue our collaboration with the FFT thanks to this agreement, with whom we are already partnering in all other European countries to broadcast Roland-Garros until 2021. This new agreement will enable us to offer our subscribers extensive coverage of the tournament, both on our channels (Eurosport and Eurosport 2) and on our various digital offerings, whether on the internet, mobile, tablet or connected TV. The Roland Garros tournament is one of the flagship events in the portfolio rights of the Eurosport Group, and we are very proud to be able to continue, through the various agreements we have now signed, to support the development of tournament in France and internationally in 54 countries.” (Source: press release)
RFE/RL’s Board of Directors has appointed Vice President of Finance, CFO and Treasurer John Giambalvo and Editor-in-Chief for Programming Nenad Pejic to serve as Interim Managers of the Corporation. Their service begins on March 2, following the departure of Kevin Klose as President and CEO, and remains in effect until a new president is appointed. The RFE/RL Board of Directors consists of all of the members of the Broadcasting Board of Governors (BBG).
Commenting on the leadership change at RFE/RL, Broadcasting Board of Governors Chairman Jeffrey Shell said, “Kevin Klose’s leadership in the past year has assured RFE/RL’s place in the forefront of independent journalism in an area of the world where uncensored news and information is in very short supply. I and the entire board have the utmost confidence in John Giambalvo and Nenad Pejic’s ability to further enhance RFE/RL’s reputation and impact as we search for Kevin’s successor.”
Giambalvo joined RFE/RL as Deputy CFO in 2009, after five years on the BBG staff as Policy and Program Coordinator. Giambalvo is a 1997 graduate of the Duke University School of Law, served as an Associate at Hale and Dorr LLP from 2000-2003 and as an Associate at White & Case LLP from 1997-2000. He also holds a Master’s degree from the Terry Sanford Institute of Public Policy at Duke University and has earned a B.S. in Business Administration at the State University of New York at Albany.
Pejic, who was named Editor-in-Chief in December 2013, joined RFE/RL in 1993 as the first Director of RFE/RL’s Balkan Service. Prior to this, Pejic held various positions with Sarajevo Television including head of the news department, Belgrade correspondent, and Program Director. He also served briefly as the Head of Publications and Public Relations at the European Institute for the Media.
The Board has engaged a professional search firm to identify a successor president. (Source: press release)