19 March 2014
RRsat Global Communications Network Ltd., a leading provider of digital content management and global content distribution services to the broadcasting industry, announced today the opening of RRsat America’s corporate office to locally support the U.S. media market with a comprehensive array of end-to-end digital media services.
Consumer demand for the highest-quality entertainment experience at home and on every screen is growing rapidly, complicating the production and distribution operations of media content owners and distributors. To answer this challenge, RRsat is expanding its services, fortifying operations in the U.S. with an experienced management team and overhauling key infrastructure, especially its New York Metro teleport and broadcast facility.
“Enhancing our presence and local solutions in the U.S. market is an important strategic initiative and a key part of our global expansion program,” commented Avi Cohen, Chief Executive Officer of RRsat. “We are excited about this move, as it puts RRsat right at the center of one of the world’s most innovative digital media markets, with a comprehensive offering which meets the complex needs of today’s content owners and distributors. RRsat has a strong global presence with upper tier customers throughout the world and we are well-equipped to handle America’s content distribution needs.”
RRsat America benefits from the robust infrastructure and capabilities of its corporate branch, including the RRsat’s leading global network that reaches 95% of the world’s population and offers worldwide, flexible, distribution solutions. This enables
RRsat America to offer new business opportunities for content monetization by providing innovative media management, monetization and global content distribution services to more places, in more ways, on more devices – now locally from the U.S.
RRsat America’s complete end-to-end offering includes:
· Global content acquisition and distribution
· Local access to our global content management and preparation services
· Sports and live event solutions
· Online video solutions
Leading the U.S. team is Ohad Har-Lev, President of RRsat America, who previously served as Managing Director of RRsat’s Mobile Satellite Services. The rest of the RRsat America management team is comprised of industry veterans, including
Douglas Parrish, former EVP Global Operations at Ascent Media Group, EVP/ CTO at the Walt Disney Internet Group, and SVP Operations at Move Networks; as well as Susanna Mandel-Mantello, who founded SM2 Sports & Media Solutions, after serving as the Director of International Broadcasting for the NHL.
“Our services have already proven to meet the rigorous demands of delivering some of the most popular live events in America to viewers worldwide, such as the past few NFL seasons, including the Super Bowl and Pro Bowl,” said Mr. Har-Lev. “The expansion of our already substantial U.S. presence will enable us to offer extended capabilities and value-added services to meet the ever-growing demand in the American market.” (Source: press release)
5 March 2014
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
Full-Year Highlights
· 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.”
Quarterly Dividend
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.
5 February 2014
RRsat Global Communications Network Ltd., a leading provider of comprehensive digital content management and global content distribution services to the broadcasting industry, today announced that the World Teleport Association named Avi Cohen, CEO of RRsat, as its 2014 Teleport Executive of the Year. Mr. Cohen will be honored during WTA’s Teleport Awards for Excellence luncheon on March 11 during SATELLITE 2014. The Teleport Executive of the Year award is presented to an individual for demonstrated entrepreneurship, leadership and innovation in the development or operation of a teleport-based business.
Mr. Cohen was named the CEO of RRsat in July 2012. His challenge was to take RRsat – already a global player – to the next level of business success and value creation. Over the last 18 months, Mr. Cohen has led RRsat in its “Glocal” strategy – become a global leader with local footprints in key markets around the world. Part of this strategy included two acquisitions: SM2 Sports & Media Solutions and JCA TV. RRsat also consolidated two sites at its Israeli headquarters into a new state-of-the-art Broadcast Center in Emek Haela. Financially, Mr. Cohen as led RRsat to all-time record results, including expectation of full-year 2013 growth in revenues in the range of 6% to 10% year-over-year growth from 2012.
“Only a handful of teleport operating companies have grown to significant size,” said WTA executive director Robert Bell. “It is a highly competitive, capital-intensive business that is also built on personal relationships and service excellence. That is a high bar for any company to pass, and we salute Mr. Cohen for continuing the work of his predecessor, another Teleport Executive of the Year, and taking RRsat to the next level.”
“On behalf of the entire RRsat team, I am extremely proud to accept this prestigious reward,” commented Avi Cohen, CEO of RRsat. “Over the past two years, RRsat has worked tirelessly to transform the organization to meet the needs of today’s broadcasters, creating a global company with more robust offerings and talented personnel in key broadcasting markets. I believe this award speaks to the progress we have made. Our industry is changing quickly, as consumers are now watching content in new ways, on new devices, in an increasingly mobile society. RRsat is proud to play a part in this evolution, and we look forward to what the future will bring for our industry.”
3 September 2013
RRsat Global Communications Network Ltd., leading provider of comprehensive digital content management and global content distribution services to the television and radio broadcasting industry, today announced the acquisition of JCA, a London-based provider of content management services. This acquisition is fully aligned with RRsat’s growth strategy of becoming a global company with local presence in key locations. The acquisition is expected to be accretive to RRsat’s earnings within the first full operational quarter post acquisition.
“This acquisition and the formation of RRsat Europe Ltd. are important milestones in the implementation of our strategy to become a global company with local presence, closer to our clients,” commented Avi Cohen, RRsat CEO. “There are two major aspects to our business: content management and content distribution. While the content distribution aspect involves our state-of-the-art facilities in the U.S. and Israel, content preparation and management requires a local presence working closely with our customers. The addition of JCA’s sophisticated local operation in London will enable RRsat to leverage local talent and provide services specifically for content preparation and content management to customers in Europe. This is an important asset that will expand our scope of services and we are confident that it will enhance our leadership position in the market.”
“The effort to expand our local presence in key markets began with the acquisition of SM2 in 2012. This gave us an expanded local presence in the United States, content management and distribution of lucrative sports events, as well as access to top-tier North American customers,” added Mr. Cohen. “During 2013, we opened an office in Moscow, augmenting our access to customers in Russia and the Commonwealth of Independent States. Today, we are establishing a strong foothold in Europe, specifically in London, one of the world’s largest centers for media and broadcasting. The continued execution of this strategy will allow RRsat to expand further, effectively leveraging our global distribution infrastructure.”
Strategic benefits of the JCA acquisition include:
- A solid business with impressive track record of growth, exceeding 400% since JCA was acquired by TVP Group in 2004 reaching revenue of just under $10 million (non-GAAP) during the last year as well as gross margins and profit margins that are consistently higher than RRsat’s.
- A talented management team, with over 30 years of industry experience, which strengthens RRsat’s senior management team. JCA’s Managing Directors, Simon Kay and Nick Pannaman, will remain with the organization as Managing Directors of RRsat Europe Ltd., and will join RRsat’s executive management team, reporting directly to RRsat’s CEO.
- A presence in London, a key strategic market and one of the premier broadcasting centers in the world, providing access to customers in continental Europe.
- A top-tier customer base, including BBC Worldwide, Sony DADC, Shine International, Channel 4, Classic Media, DRG, Film4 as well as access to additional higher tier local broadcasting customers in the U.K. and Europe.
- A broadening of RRsat’s content management capabilities, including expanded content preparation capabilities such as film restoration, ingest and transcoding, content re-versioning, digital platform distribution and its bespoke Media Window providing clients with their own on-line platform.
RRsat is acquiring 100% of TVP Group of which JCA is a wholly owned subsidiary. In consideration for the acquisition, RRsat will pay $9 million in net cash. An additional payment of $4.5 million will be deferred, conditional on business results including revenue growth and profitability in the three years following the acquisition. Management expects the acquisition to be accretive during the fourth quarter this year.
“Once we complete the integration of JCA, we plan to increase its core service and expand its global customer base and services,” added Mr. Cohen. “Our existing client base will benefit from additional sophisticated content preparation services. We plan to take advantage of the experienced local management team and their access to top tier clients in the U.K and Western Europe and offer RRsat’s complete set of content management and global distribution services. Financially, we expect this acquisition to improve our overall profitability.”
RRsat management expects to fund this acquisition using cash on hand and through expected operating cash flow of the acquired entity. (Source: RRsat press release)
4 April 2013
RRsat Global Communications Network Ltd., a leading provider of comprehensive content management and global distribution services to the television and radio broadcasting industries today announced several changes to the company’s operational leadership team, designed to support and accelerate growth. The changes include:
On April 1, 2013, Mr. Ohad Har-Lev was appointed president of the company’s U.S.subsidiary, RRsat America Global Communications Network Inc. Mr. Har-Lev most recently served as RRsat’s MSS Managing Director as well as Corporate General Counsel and Company Secretary. The appointment of Mr. Har-Lev, who has extensive experience as a leader in the communications technology field, reflects RRsat’s strong commitment to significantly expand its presence and activities in the US market. Mr. Har-Lev previously held senior positions as VP, Business Development and General Counsel of Kamor Ltd (TASE: KMOR); VP, General Counsel & Business Development fiber optics division of Gilat Satcom (TASE andAIM); and corporate counsel at Amdocs (NASDAQ:DOX).
RRsat also announced the appointment of Ms. Tzurit Golan as VP, Human Resources & Organizational Development. Ms. Golan has held executive HR positions in leading high-tech companies such as AudioCodes , where she served as Head of International HR, and VP HR at Orbit Technologies Ltd (TASE: ORBI).
In addition, RRsat has appointed Mr. Shmulik Koren as CFO as of May 1, 2013. Mr. Koren is an experienced executive leader who served as CFO and CEO of public companies. Prior to joining RRsat, Mr. Koren served as CFO and COO of Orbit Technologies Ltd. (TASE: ORBI) where over the last three years he was responsible for worldwide finance, facility, IT, legal, IR and operations departments. Prior to Orbit, Between 2006 to 2009, Mr. Koren served as President and CEO of Better Online Solutions (B.O.S.) Ltd. (NASDAQ & TASE:BOSC). Previously, from 1999 to 2006, he served as CFO and a director of Visonic Group (London & TASE: “VSC.L” & “VSC.TA”). RRsat’s CEO, Mr. Avi Cohen, and Mr. Koren worked together at Orbit as CEO and CFO for more than three years. Mr. Itzik Zion, who has served as the company’s CFO since December 2011, will be leaving the company in May to pursue personal interests. Mr. Zion will work with Mr. Koren to facilitate a smooth transition.
“We are excited with the appointments of Ohad, Tzurit and Shmulik, three talented and experienced executives,” said Avi Cohen, Chief Executive Officer of RRsat. “Each of these proven executives brings to the job outstanding industry knowledge as well as impressive leadership and professional abilities. Ohad’s new role and the addition of Tzurit and Shmulik, both of whom I had the pleasure of working closely together at Orbit, to the RRsat management team, are among the organizational changes we are implementing toward executing on our growth strategy in general. Specifically, our goal is to increase our North American business, and these appointments will facilitate our efforts to focus on target geographies, particularly the United States, create local leadership, expand our sales organization, and add local origination capabilities. These strategic initiatives will further improve our offerings and make us more attractive to major U.S.customers and support our increased focus on live sports and events, leveraging the SM2 acquisition. We are confident that they are the right people to help drive our successful journey going forward.”
