RRsat Reports Second Quarter 2012 Revenues
August 9, 2012
RRsat Global Communications Network Ltd. announced its financial results for the quarter ended June 30, 2012.
Second Quarter 2012 Results
Revenues in the second quarter of 2012 totaled $28.1 million, compared with $28.5 million in the second quarter of 2011 and a sequential increase of 2.2% compared with $27.5 million in the previous quarter. The strengthening of the US Dollar versus the Euro during the 12 months period ended June 2012 had a negative impact of approximately $1 million to the Company's revenue in the quarter compared to the second quarter of 2011.
Gross profit in the second quarter of 2012 totaled $6.7 million, compared with $6.6 million in the second quarter of 2011 and $6.1 million in the previous quarter. Gross margin in the second quarter of 2012 was 23.8%, compared with 23.0% in the second quarter of 2011 and 22.3% in the previous quarter.
Operating income for the second quarter of 2012 totaled $2.5 million, compared with $2.5 million in the second quarter of 2011 and $2.0 million in the previous quarter. Operating margin in the second quarter of 2012 was 8.8%, compared with 8.7% in the second quarter of 2011 and 7.1% in the previous quarter.
Net income on a GAAP basis for the second quarter of 2012 was $1.1 million, compared with $2.1 million in the second quarter of 2011 and $2.3 million in the previous quarter. Net income per share on a fully diluted basis under GAAP for the second quarter of 2012 was $0.07, compared with $0.12 in the second quarter of 2011 and $0.13 in the previous quarter. Net income was negatively affected by the strengthening of the US Dollar versus the Euro and Israeli shekel which increased financial expenses and income tax during the second quarter.
Adjusted net income totaled $1.5 million for the second quarter of 2012, compared with $2.3 million in the second quarter of 2011 and $1.9 million in the previous quarter. Adjusted net income per share on a fully diluted basis totaled $0.08 in the second quarter of 2012, compared with $0.13 in the second quarter of 2011 and $0.11 in the previous quarter. Adjusted net income was negatively affected by the strengthening of the US Dollar versus the Euro and Israeli shekel which increased financial expenses and income tax during the second quarter.
Adjusted EBITDA for the second quarter of 2012 totaled $4.8 million, compared with $4.5 million in the second quarter of 2011 and $4.2 million in the previous quarter.
Cash, cash equivalents and marketable securities as of June 30, 2012 totaled $34.2 million compared with $34.4 million as of March 31, 2012. The change in cash position during the quarter was mainly attributable to a positive operating cash flow of $4.6 million, capital expenditure of $0.9 million and a dividend payment to shareholders of $4.0 million.
Backlog of signed agreements, as of June 30, 2012, totaled $193 million, compared with a backlog of $194 million at the end of the previous quarter. Exchange rates changes in the second quarter had a negative impact of $3 million on the backlog level.
Guidance
Guidance for the third quarter of 2012 calls for sequential revenue growth, with revenues coming in the range of $28.2 - $29.2 million. For the full year of 2012, revenues are expected to be in the range of $112 - $115 million. Management expects similar gross margin in the third quarter.
Dividend Distribution
On August 8, 2012, the Board of Directors declared a cash dividend in the amount of $0.10 per ordinary share, and in the aggregate amount of approximately $1.7 million. The dividend will be payable on September 5, 2012 to all of the Company's shareholders of record at the end of the trading day on the NASDAQ on August 20, 2012.
In accordance with Israeli tax law, the Company will withhold 25% of the dividend amount payable to each shareholder at source, subject to applicable exemptions. The Company's dividend policy is described in detail in its most recent Annual Report on Form 20-F for the year ended December 31, 2011.
Management Comment
Shlomo Shamir, Chairman of RRsat commented, "The second quarter showed improvement in many parameters, particularly in the margins which reached their highest levels in two years. We met our top line targets in the quarter and we grew our revenues sequentially, despite significant negative currency effects. Most significantly our capital expenditures have substantially declined compared with last year. This has had a very positive impact and has allowed us to generate almost $10 million in free cash flow in the past 9 months since our major infrastructure investments ended. Given our strong backlog, we maintain good visibility into the coming quarters even against the background of a weaker global economy. Finally, after the close of the second quarter, we welcomed Avi Cohen to RRsat as the new CEO, replacing David Rivel. I very much look forward to Avi's contributions in the coming quarters and I would like to thank David for leading RRsat's growth and development over the many years."
Avi Cohen, CEO of RRsat commented, "I am privileged to join RRsat and impressed by the people, technical capabilities and state-of-the-art infrastructure. While there are always business challenges, I believe RRsat is in a strong position to leverage its infrastructure to capture and develop new business. I look forward to working with this talented team, at a company with such potential."
