RR Media Reports First Quarter Results; ESS Acquisition Closed
Revenues of $30.5 Million and Adjusted EBITDA of $3.6 Million, Consistent With April 10 Update
Tweet
Share
E-mailAIRPORT CITY BUSINESS PARK, ISRAEL -- (Marketwired) -- 05/11/15 -- RR Media (NASDAQ: RRM), a leading provider of global digital media services to the broadcast industry, today announced financial results for the first quarter ended March 31, 2015.
First Quarter Highlights
- ESS acquisition closed on April 29th and integration is underway
- Revenues of $30.5 million, down 7.1% year-over-year including a negative impact of approximately $492,000 due to the Euro/Dollar exchange rate. Main decline in revenue due to economic issues in Russia, impacting RRM customers
- Gross margin of 23.6%, down from 24.4% in Q1 2014 due to decline in revenue
- Non-GAAP net income of $0.07 per basic and diluted share
- GAAP net income of $0.05 per basic and diluted share
- Board declared a cash dividend of $0.07 per share, an aggregate amount of approximately $1.2 million, representing an annual dividend yield of 3.9%.
(In Thousands) Q1 2015 Q1 2014
Content Content
Mgmt. & Mgmt. &
Distribution MSS Total Distribution MSS Total
Services Services
Revenues $27,567 $2,963 $30,530 $29,980 $2,877 $32,857
Gross profit $6,876 $315 $7,191 $7,577 $458 $8,035
Gross margin 24.9% 10.6% 23.6% 25.3% 15.9% 24.4%
Avi Cohen, CEO of RR Media, commented, "We continued our aggressive efforts to diversify our revenues, especially geographic diversification, with the acquisition of Eastern Space Systems (ESS) in Romania, a combination which will expand our access to a rapidly growing and strategically important region with more than 17 million TV households in Central, Eastern and Nordic Europe. The importance of this diversification was underscored by the issues in Russia, as the rapid decline in the value of the Ruble created significant issues for our Russian customers, impacting our first quarter revenue and backlog. We are taking specific steps to address this issue, including decreasing relevant satellite capacity commitments. While this event and the continued foreign exchange rate headwinds, created short-term challenges, we are increasingly confident that we are on the right path strategically and the ESS acquisition will only accelerate our efforts."
"We continue to move upstream with customers, further penetrating our customers with higher value-added services and acquiring additional business with our new and broader offering," continued Mr. Cohen. "In the last few weeks, we have signed new multi-year agreements with several major tier one customers for content management services. In addition, we have added new customers for OTT delivery of 10's of linear channels including a major U.S. Pay-TV provider, all of which is serving as the foundation for predictable growth in the future."
First Quarter 2015 Financial Results
Revenues: First quarter 2015 revenues were $30.5 million down 7.1% from $32.9 million in the first quarter of 2014. Content Management and Distribution Services revenue, excluding non-core revenue from MSS, was $27.6 million, down 8.0% from $30.0 million in the first quarter last year. First quarter 2015 revenues were reduced by approximately $492,000 related to the impact of the Euro/U.S. Dollar exchange rate, and geopolitical issues, primarily in the Russia, negatively impacted revenues.
Gross profit: First quarter 2015 gross profit and gross margin were $7.2 million and 23.6% respectively, compared to $8.0 million and 24.4%, respectively, for the first quarter of 2014. Content Management and Distribution Services gross margin was 24.9%, compared to 25.3% last year.
Non-GAAP operating income & operating margin, excluding non-cash stock based compensation, amortization of acquisition-related intangibles, acquisition related expenses and amortization of acquisition related prepaid compensation expenses, but inclusive of foreign currency impact was $1.7 million and 5.5% respectively during the first quarter of 2015, compared to $2.8 million and 8.5% respectively in the first quarter of 2014.
Non-GAAP net income for the first quarter was $1.2 million, compared to $2.1 million in the first quarter of 2014. Non-GAAP net income per share on a fully diluted basis was $0.07 for the first quarter of 2015, compared to $0.12 in first quarter last year.
GAAP net income for the first quarter of 2015 was $0.9 million, compared to $1.7 million in the first quarter of 2014. GAAP net income per share on a fully diluted basis was $0.05 for the first quarter of 2015 compared to $0.10 in the first quarter of 2014.
Adjusted EBITDA for the first quarter of 2015 was $3.6 million compared to $5.1 million in the first quarter of 2014.
Backlog to be delivered in the next 12 months decreased to $76 million, down from $94 million in the first quarter of 2014 and down from $86 Million in the end of the fourth quarter of 2014.
Cash, cash equivalents and marketable securities as of March 31, 2015 totaled $19.5 million compared with $22 million as of December 31, 2014.
Quarterly Dividend
In accordance with the Company's dividend policy, the Board of Directors declared a cash dividend in the amount of $0.07 per ordinary share and in the aggregate amount of approximately $1.2 million, representing an annual dividend yield of 3.9%. The dividend is payable on June 10, 2015 to all of the Company's shareholders of record at the end of the trading day on NASDAQ on May 25, 2015.
Full Year 2015 Guidance On February 23, 2015, management issued full-year 2015 expectations of total revenues of $135 million to $139 million, with Adjusted EBITDA of $19.5 million to $20.5 million. At this time, the Company is not changing its guidance. Management will continue to evaluate its financial performance and pipeline, and expects to provide updates to its full-year outlook, accounting for acquisitions, as the year progresses.
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.
Conference Call Information
Management will host a conference call to discuss the results at 9 a.m. ET and 4 p.m. in Israel on Monday, May 11, 2015.
Details are as follows:
- Dial-in number from within the United States: 1-877-857-6149
- Dial-in number from Israel: 1 80 925 8243
- Dial-in number from the UK: 0 808 101 7162
- Dial-in number (other international): 1-719-325-4805
- Playback, available until May 18, 2015 by calling 1-877-870-5176 (United States) or 1-858-384-5517 (international). Please use pin number 9969156 for the replay.
- A live webcast is accessible at http://public.viavid.com/index.php?id=113925.
About RR Media
RR Media (NASDAQ: RRM) works in partnership with the world's leading media players to create the richest possible media and entertainment experiences for the world's consumers. RR Media's complete ecosystem of digital media services maximize the potential of media and entertainment content, covering four main areas: smart global content distribution network with an optimized combination of satellite, fiber and the internet; content management and channel origination; sports, news & live events; and online video services. RR Media provides scalable, converged digital media services to more than 650 channels and to leagues and right holders of over 100,000 hours of sports and live events yearly. The company delivers content to 95% of the world's population reaching viewers of multiplatform operators, VOD platforms, online video and direct-to-home services. Visit the company's website www.rrmedia.com
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. 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. We undertake no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in our 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, 2014 and our Current Reports on Form 6-K.
Interim Condensed Consolidated Statements of Income
----------------------------------------------------------------------------
In thousands, except share data
Three months ended Year ended
--------------------------- -------------
March 31 March 31 December 31
2015 2014 2014
------------- ------------- -------------
(unaudited) (unaudited) (audited)
------------- ------------- -------------
Revenues
Content Mgmt. & distribution
services 27,567 29,980 119,750
Mobile satellite services 2,963 2,877 11,476
------------- ------------- -------------
Total revenues $ 30,530 $ 32,857 $ 131,226
Cost of revenues
Content Mgmt. & distribution
services 20,691 22,403 91,215
Mobile satellite services 2,648 2,419 9,961
------------- ------------- -------------
Total cost of revenues 23,339 24,822 101,176
------------- ------------- -------------
Gross profit 7,191 8,035 30,050
------------- ------------- -------------
Operating expenses
Sales and marketing 3,629 2,995 13,329
General and administrative 2,252 2,531 9,308
Reorganization expenses - - 236
------------- ------------- -------------
Total operating expenses 5,881 5,526 22,873
------------- ------------- -------------
Operating income 1,310 2,509 7,177
Financial expenses, net 109 170 541
------------- ------------- -------------
Income before taxes on
Income 1,201 2,339 6,636
Income taxes 289 615 1,581
------------- ------------- -------------
Net Income 912 1,724 5,055
Net Profit (loss) attributable to
non-controlling interest
(14) (72) (95)
------------- ------------- -------------
Net income attributable to
shareholders $ 926 $ 1,796 $ 5,150
============= ============= =============
Earnings per ordinary share
attributable to shareholders
Basic earnings per share 0.05 0.10 0.30
============= ============= =============
Diluted earnings per share 0.05 0.10 0.29
============= ============= =============
Weighted average number of shares
used to compute:
Basic earnings per share 17,392,072 17,346,561 17,365,608
============= ============= =============
Diluted earnings per share 17,657,516 17,645,977 17,671,975
============= ============= =============
Interim Condensed Consolidated Statements of Income
---------------------------------------------------------------------------
In thousands
Three months ended Year ended
--------------------------- -------------
March 31 March 31 December 31
2015 2014 2014
------------- ------------- -------------
(unaudited) (unaudited) (audited)
------------- ------------- -------------
Reconciliation of GAAP Net Income
to Non-GAAP Net Income:
GAAP Net income attributable to
shareholders $ 926 $ 1,796 $ 5,150
Adjustments to reconcile GAAP net
income
to non-GAAP net income:
Non-cash equity-based compensation
charge 175 163 694
Amortization of acquisition
related intangible assets 148 197 671
Changes in fair value of currency
conversion derivatives - 41 (345)
Amortization of acquisition
related prepaid
compensation expenses 42 42 168
Income tax effect of non-GAAP
adjustments (58) (81) (160)
Contingent consideration in
respect of acquisition - - (270)
Reorganization expenses - - 236
------------- ------------- -------------
Non-GAAP net income attributable
to shareholders $ 1,233 $ 2,158 $ 6,144
Three months ended Year ended
--------------------------- -------------
March 31 March 31 December 31
2015 2014 2014
------------- ------------- -------------
(unaudited) (unaudited) (audited)
------------- ------------- -------------
Reconciliation of GAAP Operating
Income
to non GAAP operating income:
Operating income $ 1,310 $ 2,509 $ 7,177
Adjustments to reconcile GAAP
operating
income to non-GAAP operating
income:
Non-cash equity-based compensation
charge 175 163 694
Amortization of acquisition
related intangible assets 148 197 671
Cost of sales related changes in
fair value of
embedded currency conversion
derivatives - (113) (239)
Amortization of acquisition
related prepaid
compensation expenses 42 42 168
Contingent consideration in
respect of acquisition - (530)
Reorganization expenses - - 236
------------- ------------- -------------
Non-GAAP operating income
attributable to shareholders $ 1,675 $ 2,798 $ 8,177
Interim Condensed Consolidated Statement of Income
In thousands
Three months ended Year ended
--------------------------- -------------
March 31 March 31 December 31
2015 2014 2014
------------- ------------- -------------
(unaudited) (unaudited) (audited)
------------- ------------- -------------
Reconciliation of GAAP Operating
Income to EBITDA:
Operating income $ 1,310 $ 2,509 $ 7,177
Adjustments to reconcile GAAP
operating
income to EBITDA:
Non-cash equity-based compensation
charge 175 163 694
Depreciation and amortization 2,109 2,425 9,675
Acquisition related expenses - - -
Cost of sales related changes in
fair value of
currency conversion derivatives - (113) (239)
Amortization of acquisition
related prepaid
compensation expenses 42 42 168
------------- ------------- -------------
EBITDA $ 3,636 $ 5,026 $ 17,475
============= ============= =============
Three months ended Year ended
--------------------------- -------------
March 31 March 31 December 31
2015 2014 2014
------------- ------------- -------------
(unaudited) (unaudited) (audited)
------------- ------------- -------------
Reconciliation of Non-GAAP
operating income to adjusted
EBITDA:
Non-GAAP operating income $ 1,675 $ 2,798 $ 8,177
Adjustments to reconcile Non-GAAP
operating
income to EBITDA:
Depreciation and amortization 1,961 2,228 9,004
------------- ------------- -------------
Adjusted EBITDA $ 3,636 $ 5,026 $ 17,181
============= ============= =============
Interim Condensed Consolidated Statements of Income (non-GAAP results)
---------------------------------------------------------------------------
In thousands, except share data
Three months ended Year ended
--------------------------- -------------
March 31 March 31 December 31
2015 2014 2014
------------- ------------- -------------
(unaudited) (unaudited) (audited)
------------- ------------- -------------
Revenues
Content Mgmt. & distribution
services 27,567 29,980 119,750
Mobile satellite services 2,963 2,877 11,476
------------- ------------- -------------
Total revenues $ 30,530 $ 32,857 $ 131,226
Cost of revenues
Content Mgmt. & distribution
services 20,677 22,508 91,397
Mobile satellite services 2,648 2,419 9,961
------------- ------------- -------------
Total cost of revenues 23,324 24,927 101,358
------------- ------------- -------------
Gross profit 7,206 7,930 29,868
------------- ------------- -------------
Operating expenses
Sales and marketing 3,405 2,735 12,416
General and administrative 2,126 2,397 9,275
------------- ------------- -------------
Total operating expenses 5,531 5,132 21,691
------------- ------------- -------------
Operating income 1,675 2,798 8,177
------------- ------------- -------------
Financial expenses, net 109 16 387
Income before taxes on 1,566 2,782 7,790
------------- ------------- -------------
income
Income taxes 347 696 1,741
Net income $ 1,219 $ 2,086 $ 6,049
------------- ------------- -------------
Net Profit (loss) attributable to
non-controlling interest (14) (72) (95)
Net income attributable to
shareholders $ 1,233 $ 2,158 $ 6,144
============= ============= =============
Earnings per ordinary share
attributable to shareholders
Basic earnings per share 0.07 0.12 0.35
============= ============= =============
Diluted earnings per share 0.07 0.12 0.35
============= ============= =============
Weighted average number of shares
used to compute:
Basic earnings per share 17,392,072 17,346,561 17,365,608
============= ============= =============
Diluted earnings per share 17,657,516 17,645,977 17,671,975
============= ============= =============
Interim Condensed Consolidated Balance Sheets
---------------------------------------------------------------------------
In thousands
March 31 March 31 December 31
2015 2014 2014
------------- ------------- -------------
(unaudited) (unaudited) (audited)
------------- ------------- -------------
Current assets
Cash and cash equivalents $ 10,517 $ 15,004 $ 13,001
Marketable securities and short
term investments 9,015 9,416 8,970
Trade receivable,(net of provision
for doubtful accounts Of $5,173,
$6,785 and $6,423 as of March 31,
2015, 2014 and December 31, 2014,
respectively)
24,689 24,103 23,457
Other receivable 2,365 2,919 2,343
Deferred taxes 2,006 2,170 2,038
Prepaid expenses 2,730 2,772 2,839
------------- ------------- -------------
Total current assets 51,322 56,384 52,648
------------- ------------- -------------
Long-term assets
Long-term prepaid expenses 2,489 2,490 3,156
Long-term land lease prepaid
expenses 7,358 7,398 7,380
Assets held for employee severance
payments 1,671 2,150 1,892
Fixed assets, net 46,442 45,794 45,669
Goodwill 10,953 11,277 11,286
Intangible assets, at cost, less
accumulated amortization 5,143 6,003 5,528
------------- ------------- -------------
Total long-term assets 74,056 75,112 74,911
------------- ------------- -------------
Total assets $ 125,378 $ 131,496 $ 127,559
============= ============= =============
Interim Condensed Consolidated Balance Sheets (cont'd)
----------------------------------------------------------------------------
In thousands, except share data
March 31 March 31 December 31
2015 2014 2014
------------- ------------- -------------
(unaudited) (unaudited) (audited)
------------- ------------- -------------
Liabilities and shareholders'
equity
Current liabilities
Account payable:
Trade $ 15,938 $ 17,956 $ 18,414
Other 5,066 6,016 5,482
Deferred income 6,463 8,090 4,867
------------- ------------- -------------
Total current liabilities 27,467 32,062 28,763
------------- ------------- -------------
Long-term liabilities
Deferred income 7,846 8,051 7,714
Liability in respect of employee
severance payments and others 2,291 2,327 2,993
Contingent consideration in
respect of acquisition 3,550 3,930 3,550
Deferred taxes 3,769 4,346 3,702
------------- ------------- -------------
Total long-term liabilities 17,456 18,654 17,959
------------- ------------- -------------
Total liabilities 44,923 50,716 46,722
------------- ------------- -------------
Shareholders' equity
Share capital
Ordinary share NIS 0.01 par value
each (27,000,000 authorized as of
March 31, 2015, December 31, 2014
and March 31, 2014, 17,392,072
shares issued and fully paid as
of March 31, 2015, 17,365,608
shares issued and fully paid as
of December 31, 2014 and
17,346,561 shares issued and
fully paid as of March 31, 2014) 40 40 40
Treasury Stock (146) - (146)
Additional paid in capital 54,747 54,042 54,572
Retained earnings 27,109 26,478 27,400
Accumulated other comprehensive
gain (1,186) 292 (934)
------------- ------------- -------------
Total shareholders' equity $ 80,564 $ 80,852 $ 80,932
Non-controlling interest (109) (72) (95)
------------- ------------- -------------
Total equity $ 80,455 $ 80,780 $ 80,837
Total liabilities and equity $ 125,378 $ 131,496 $ 127,559
============= ============= =============
Interim Condensed Consolidated Statements of Cash Flows
----------------------------------------------------------------------------
In thousands
Three months ended Year ended
--------------------------- -------------
March 31 March 31 December 31
2015 2014 2014
------------- ------------- -------------
(unaudited) (unaudited) (audited)
------------- ------------- -------------
Net income $ 912 $ 1,724 $ 5,055
Adjustments required to reconcile
net income to net cash provided
by operating activities 3,404 2,275 11,449
Changes in assets and liabilities (2,289) (2,005) (6,011)
------------- ------------- -------------
Net cash provided by operating
activities 2,027 1,994 10,493
------------- ------------- -------------
Investment in fixed assets (2,909) (1,161) (8,389)
Other investing activities 62 - 1,261
------------- ------------- -------------
Cash flows from investing
activities (2,847) (1,161) (7,128)
Purchase of treasury stock - - (146)
Dividends Paid (1,217) - (3,473)
------------- ------------- -------------
Cash flows from financing
activities (1,217) - (3,619)
Translation adjustment on cash and
cash equivalents (447) 6 (910)
------------- ------------- -------------
Increase (decrease) in cash and
cash (2,484) 839 (1,164)
Equivalents
Balance of cash and cash
equivalents at beginning of
period 13,001 14,165 14,165
------------- ------------- -------------
Balance of cash and cash
equivalents at end of period 10,517 15,004 13,001
------------- ------------- -------------
Company Contact: Shmulik Koren CFO Tel: +972 3 928 0777 Email: Email Contact Investor Contact: Hayden/ MS - IR Brett Maas/ Miri Segal-Scharia Tel: 646-536-7331 / 917-607-8654
Source: RR Media
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Evolution Petroleum closes $16M Midland Basin royalty acquisition
- Real and RE/MAX Holdings set Aug. 24 merger closing date
- Cosmos Health signs Saudi distribution deal for supplement line
Create E-mail Alert Related Categories
Press ReleasesRelated Entities
Dividend, Earnings, Definitive AgreementSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
