UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Month of November, 2014
Commission File Number 001-33085
RRsat Global Communications Network Ltd.
(Translation of registrant’s name into English)
RRsat Building
Hanegev Street
POB 1056
Airport City 70100
Israel
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-_
RRsat Global Communications Network Ltd.
On November 04, 2014, the registrant issued a press release "RR Media Reports Record Revenues of $33.1 Million for the Third Quarter 2014; Up 8.2% Year-Over-Year ". A copy of the press release is attached as Exhibit 99.1 to this report and is incorporated herein by reference.
On November 04, 2014, the registrant also issued a press release “RR Media Names Tim Richards to Board of Directors”. A copy of the press release is attached as Exhibit 99.2 to this report and is incorporated herein by reference.
Exhibit
Exhibit 99.1. Press release of the registrant, dated November 04, 2014, "RR Media Reports Record Revenues of $33.1 Million for the Third Quarter 2014; Up 8.2% Year-Over-Year".
Exhibit 99.2. Press release of the registrant, dated November 04, 2014, “RR Media Names Tim Richards to Board of Directors”.
Exhibit 99.3. RRsat Global Communications Network Ltd and its Subsidiaries Interim Condensed Consolidated Financial Statements as of September 30, 2014 (incorporated herein by reference to Exhibit 99.3 to the Registrant’s Form 6-K)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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RRSAT GLOBAL COMMUNICATIONS NETWORK LTD.
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Title:
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General Counsel and Company Secretary
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Date: November 04, 2014
Exhibit 99.1. Press release of the registrant, dated November 04, 2014, "RR Media Reports Record Revenues of $33.1 Million for the Third Quarter 2014; Up 8.2% Year-Over-Year".
Exhibit 99.2. Press release of the registrant, dated November 04, 2014, “RR Media Names Tim Richards to Board of Directors”.
Exhibit 99.3. RRsat Global Communications Network Ltd and its Subsidiaries Interim Condensed Consolidated Financial Statements as of September 30, 2014 (incorporated herein by reference to Exhibit 99.3 to the Registrant’s Form 6-K)
4
Exhibit 99.1
For Immediate Distribution
RR Media Reports Record Revenues of $33.1 Million for the
Third Quarter 2014; Up 8.2% Year-Over-Year
Quarterly Gross and Operating Margins Improve Sequentially;
Management Reiterates Full-Year Revenue Guidance
Airport City Business Park, Israel – November 4, 2014 - RR Media (NASDAQ: RRST), a leading provider of global digital media services to the broadcast industry, announced today financial results for the third quarter ended September 30, 2014.
Third Quarter Highlights
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·
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Record revenues of $33.1 million, up 8.2% year-over-year despite of a negative impact of $384,000 due to the Euro/Dollar exchange rate
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·
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Gross margin of 22%, down from 24.5% in Q3 2013 and an improvement over previous quarter as the company is in the process of resolving the lower utilization of satellite capacity on the company’s global network, further improvement is expected next quarter
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·
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Non-GAAP net income of $0.07 per share
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·
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GAAP net income of $0.07 per share, up from $0.06 in Q3 2013
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|
·
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Board declared a cash dividend of $0.07 per share, an aggregate amount of approximately $1.1 million, representing an annual dividend yield of 3.8%
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·
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Company announced its rebranding initiative on September 8th and launched at IBC later that week
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(In Thousands)
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Q3 2014
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Q3 2013
|
|
| |
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Content Mgmt. &
Distribution Services
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|
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MSS
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Total
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Content Mgmt. &
Distribution Services
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MSS
|
|
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Total
|
|
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Revenues
|
|
$ |
30,193 |
|
|
$ |
2,877 |
|
|
$ |
33,070 |
|
|
$ |
27,844 |
|
|
$ |
2,731 |
|
|
$ |
30,575 |
|
|
Gross profit
|
|
$ |
6,845 |
|
|
$ |
412 |
|
|
$ |
7,257 |
|
|
$ |
6,974 |
|
|
$ |
514 |
|
|
$ |
7,488 |
|
|
Gross margin
|
|
|
22.7 |
% |
|
|
14.3 |
% |
|
|
22.0 |
% |
|
|
25.3 |
% |
|
|
18.8 |
% |
|
|
24.5 |
% |
“RR Media continues to grow at approximately twice the rate of the industry resulting in a revenue growth of 10.2% during first 9 months of 2014, validating our growth strategy and reinforcing our confidence that we have the right solutions for today’s market,” commented Avi Cohen, CEO of RRsat. “Our strategy continues to benefit from the industry trends. Content owners need to reach viewers through new and emerging channels and RR Media is uniquely positioned to meet these growing needs with our robust content management services and our Global Media Services Platform which 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. I am increasingly confident that RR Media is in the right place within the industry, with a strategically valuable, global, comprehensive and converged offering and a proven team of local professionals in close proximity to key customer concentrations.”
“During the quarter, we announced our rebranding initiative in order to better reflect the significant expansion of our global service offering and clearly convey how the Company is aligned with the dynamics of the market,” continued Mr. Cohen. “This new branding, which reflects our increased focus on content management services, was unveiled at the International Broadcasting Convention (IBC) in Amsterdam during September, the most important trade show in the industry. This was the most-successful trade show appearance in our Company’s history, as we experienced significant traffic from some of the industry’s leading content owners throughout the show. Customer feedback about RR Media’s offering and strategic positioning was highly positive. We have experienced increased interaction with prospective customers following this show, and we firmly believe this will facilitate growth in our customer base as well as the level of business from our existing customers and ultimately our revenue in the quarters to come.”
Quarterly Dividend and Share Repurchase
In accordance with the Company’s new fixed cash 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 $1.1 million and representing an annual dividend yield of 3.8%. The dividend is payable on December 3, 2014 to all of the Company's shareholders of record at the end of the trading day on the NASDAQ on November 17, 2014.
In addition, as announced on October 23, 2014 the Board authorized a share repurchase program of up to $5 million of ordinary shares. At the current valuation, the board believes that a share repurchase program reflects a solid opportunity to create shareholder value and demonstrate attractive returns. Share purchases will take place in open market transactions or in privately negotiated transactions and may be made from time to time depending on market conditions, share price, trading volume and other factors. Such purchases will be made in accordance with all applicable securities laws and regulations.
Third Quarter 2014 Financial Results
Revenues: Third quarter 2014 revenues were $33.1 million up 8.2% from $30.6 million in the third quarter of 2013 and up 1.8% from $32.5 million in the second quarter of 2014. Content Management and Distribution Services revenue, excluding non-core revenue from MSS, was $30.2 million, up 8.4% from $27.8 million in the third quarter last year. Third quarter 2014 revenues were reduced by approximately $384,000 related to the impact of the Euro/US Dollar exchange rate, and geopolitical issues, primarily in the Asia/Pacific region, negatively impacted revenues by approximately $320,000. In addition and as previously disclosed, RR Media canceled several contracts for smaller customers during the second quarter of 2014 due to continued business issues for these customers, and this had an impact of approximately $420,000 during the third quarter.
Gross profit: Third quarter 2014 gross profit and gross margin were $7.3 million and 22% respectively, compared to $7.5 million and 24.5%, respectively, for the third quarter of 2013. Content Management and Distribution Services gross margin was 22.7%, compared to 25.3% last year. Gross and operating margins in the quarter were impacted by an increase in the satellite capacity managed on the company’s global network. During the second quarter, RR Media acquired additional capacity to serve new customers coming online in the third and fourth quarters and also expanded the Company’s fiber infrastructure to support sports and other live events, including the 2014-2015 National Football League season which started in September. Revenue from new customers and the contribution from sports contracts, including the NFL, began to partially offset the added costs in the third quarter, resulting in a 70 basis point sequential improvement in gross margins. Management expects additional sequential improvement during the fourth quarter and expects margins to return to historical levels by the end of the fourth quarter.
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 $1.9 million and 5.7% respectively during the third quarter of 2014, compared to $2.7 million and 8.9% respectively in the third quarter of 2013. The year-over-year decrease in operating margin is primarily due to the lower capacity utilization reported last quarter. Sequentially, operating margins improved by 42.5%, or 170 basis points compared to the 4.0% in the second quarter of 2014.
“As we expected, we delivered significant improvement in our gross and operating margins on a sequential basis and we continue to work to put the short-term capacity utilization issue behind us and return margins to historical levels,” commented Shmulik Koren, RR Media’s Chief Financial Officer. “We expect additional sequential improvement during the fourth quarter.”
Inclusive of the capacity utilization issue, non-GAAP net income for the third quarter was $1.3 million, compared to $2.1 million in the third quarter of 2013. Non-GAAP net income per share on a fully diluted basis was $0.07 for the third quarter of 2014, compared to $0.12 in third quarter last year.
GAAP net income for the third quarter of 2014 was $1.2 million, compared to $1.1 million in the third quarter of 2013. GAAP net income per share on a fully diluted basis was $0.07 for the third quarter of 2014 compared to $0.06 in the third quarter of 2013.
Adjusted EBITDA for the third quarter of 2014 was $4.2 million compared to $5.0 million in the third quarter of 2013.
Backlog to be delivered in the next 12 months decreased to $86 million, down from $88 million in the year-ago period and down from $89 million in the second quarter of 2014. This reduction is primarily due to the Euro/US Dollar exchange rate, which caused a $2 million reduction, and partially due to terminating some contracts as part of the effort to upgrade the customer mix also reported last quarter.
Cash, cash equivalents and marketable securities as of September 30, 2014 totaled $23.5 million compared with $24.2 million as of December 31, 2013.
Year-To-Date Financial Results
Revenues for the nine months ended September 30, 2014 were $98.4 million, up 10.2% compared to $89.3 million for the nine months ended September 30, 2013. Content Management and Distribution Services revenue, excluding non-core revenue from MSS, was $90 million, up 10.5% from $81 million in the prior year period.
Gross profit for the nine months ended September 30, 2014 was $22.2 million compared to $21.9 million for the nine months ended September 30, 2013. Gross margin was 22.5% compared to 24.5% in the prior year period.
Non-GAAP operating income, 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 and increased investment in sales and marketing, was $6.0 million for the nine months compared to $7.8 million for the nine months ended September 30, 2013. Non-GAAP operating margin for the nine months was 6.0% versus 8.7% in 2013.
GAAP operating income was $5.1 million compared to $6.2 million in the same period in 2013. GAAP operating margin was 5.1% compared to 7.0% in 2013.
Non-GAAP net income, inclusive of the foreign currency impact and increased sales and marketing investments, was $4.5 million compared to $5.9 million in 2013. Non-GAAP net income per share on a fully diluted basis was $0.25 compared to $0.33 in 2013.
GAAP net income was $3.5 million compared to $4.4 million in 2013. GAAP net income per share on a fully diluted basis was $0.21 compared to $0.25 in 2013.
Adjusted EBITDA, inclusive of the foreign currency impact and the capacity utilization impact in the first half of 2014, was $12.9 million, compared with $14.2 million in 2013.
Full Year 2014 Guidance
The Company reiterates its full year 2014 guidance. Management expects total revenues to be in the range of $129 million to $134 million.
Management believes that annual revenue guidance is more reflective of the business than quarterly estimates due to the seasonal nature of content management and live sports and events. 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 Tuesday, November 4, 2014. Details are as follows:
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Dial-in number from within the United States: 1-877-857-6144
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Dial-in number from Israel: 1 80 925 8243
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·
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Dial-in number from the UK: 0 808 101 7162
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·
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Dial-in number (other international): 1-719-325-4767
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·
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Playback, available until November 11, 2014 by calling 1-877-870-5176 (United States) or 1-858-384-5517 (international). Please use pin number 8703162 for the replay.
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·
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A live webcast is accessible at http://public.viavid.com/index.php?id=111461.
|
ENDS
About RR Media
RR Media* (NASDAQ: RRST) 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
* RR Media currently operates under the corporate name of RRsat Global Communications Network Ltd. The company is in the process of changing its corporate name to RR Media Ltd., which is scheduled to be completed in November 2014.
Use of Non-GAAP Financial Measures
In addition to reporting results in accordance with generally accepted accounting principles, or GAAP, RRsat has also included in this press release non-GAAP measurements of net income, operating income, operating margin, fully diluted net income per share and adjusted EBITDA. RRsat believes that these non-GAAP financial measures are principal indicators of the operating and financial performance of its business. We have provided these non-GAAP measurements to help investors better understand our core operating performance and enhance comparisons of core operating performance from period to period.
Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude: non-cash stock based compensation, amortization of acquisition-related intangibles, acquisition-related expenses, amortization of acquisition related prepaid compensation expenses, non-cash income (loss) reflecting changes in the fair value of currency conversion derivatives resulting from the application of FASB ASC Topic 815 and the resulting income tax (increase) decrease of the above items.
Adjusted EBITDA is calculated by adding to operating income, non-cash equity-based compensation charge, depreciation and amortization and amortization of acquisition related prepaid compensation expenses.
Management uses these non-GAAP financial measures to assess its operational performance, for financial and operational decision-making, and as a means to evaluate period-to-period comparisons on a consistent basis. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding the Company’s performance by excluding certain non-cash expenses that are not directly attributable to its core operating results.
The non-GAAP measurements are intended only as a supplement to the comparable GAAP measurements and the company compensates for the limitations inherent in the use of non-GAAP measurements by using GAAP measures in conjunction with the non-GAAP measurements. As a result, investors should consider these non- GAAP measurements in addition to, and not in substitution for, or as superior to, measurements of financial performance prepared in accordance with GAAP.
The Company expects to continue reporting non-GAAP financial measures, adjusting for the items described above, and the Company expects to continue to incur expenses similar to the non-GAAP adjustments described above. Accordingly, the exclusion of these and other similar items in the presentation of non-GAAP financial measures should not be construed as an inference that these costs are unusual, infrequent or non- recurring. Moreover, because not all companies use identical measures and calculations, the presentation of non-GAAP measurements of net income, operating income, operating margin and fully diluted net income per share and adjusted EBITDA may not be comparable to other similarly titled measures of other companies. These limitations are compensated for by using non-GAAP measures and adjusted EBITDA in conjunction with traditional GAAP financial measures.
Reconciliations of the non-GAAP measures (non-GAAP net income, non-GAAP operating income and adjusted EBITDA) to the most comparable GAAP measures (net income and operating income respectively), are provided in the schedules attached to this release.
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) guidance for revenue and margins for 2014 or any other future periods; (ii) our expectations and ability to strengthen our offering and capabilities in order to allow us to accelerate our growth; (iii) our expectations to generate higher margins from our sports and events business compared to our other businesses ; (iv) our expectation that our sports and events business will be a major contributor to our growth and that the demand for this type of content will continue to increase globally; (v) our expectation and ability to further improve our margins over time by changing our product mix, coupled with more value-added services and better utilization of our infrastructure; (vi) our ability to continue to experience strong interest in our services, leading to new customer wins for our digital media broadcasting services and to report future successes; (vii) our expectation that our backlog will materialize into revenue on the projected timeline and (viii) our ability to continue to benefit from a strong business model, featuring a notable percentage of recurring revenues, long-term contracts, high renewal rate, a multi-year backlog, and strong free cash flow. 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, 2013 and our Current Reports on Form 6-K.
Investor Contact:
Hayden/ MS - IR
Brett Maas/ Miri Segal-Scharia
Tel: 646-536-7331 / 917-607-8654
RRsat Global Communications Network Ltd. and its subsidiaries
Interim Condensed Consolidated Statements of Income
In thousands, except share data
| |
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|
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| |
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September 30
|
|
|
September 30
|
|
|
September 30
|
|
|
September 30
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$ |
33,070 |
|
|
$ |
30,575 |
|
|
$ |
98,424 |
|
|
$ |
89,318 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
|
25,813 |
|
|
|
23,087 |
|
|
|
76,237 |
|
|
|
67,416 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
7,257 |
|
|
|
7,488 |
|
|
|
22,187 |
|
|
|
21,902 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
3,384 |
|
|
|
2,410 |
|
|
|
9,658 |
|
|
|
6,940 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
2,325 |
|
|
|
3,546 |
|
|
|
7,462 |
|
|
|
8,745 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
5,709 |
|
|
|
5,956 |
|
|
|
17,120 |
|
|
|
15,685 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
1,548 |
|
|
|
1,532 |
|
|
|
5,067 |
|
|
|
6,217 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(expenses), net
|
|
|
9 |
|
|
|
(57 |
) |
|
|
(361 |
) |
|
|
(326 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes on
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
income
|
|
|
1,557 |
|
|
|
1,475 |
|
|
|
4,706 |
|
|
|
5,891 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
413 |
|
|
|
374 |
|
|
|
1,208 |
|
|
|
1,486 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
1,144 |
|
|
|
1,101 |
|
|
|
3,498 |
|
|
|
4,405 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to non- controlling interest
|
|
|
(24 |
) |
|
|
- |
|
|
|
(141 |
) |
|
|
- |
|
|
Net income attributable to shareholders
|
|
$ |
1,168 |
|
|
$ |
1,101 |
|
|
$ |
3,639 |
|
|
$ |
4,405 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings per ordinary share attributable to shareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
$ |
0.07 |
|
|
$ |
0.06 |
|
|
$ |
0.21 |
|
|
$ |
0.25 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
$ |
0.07 |
|
|
$ |
0.06 |
|
|
$ |
0.21 |
|
|
$ |
0.25 |
|
|
Weighted average number
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of shares used to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
compute basic earnings per share
|
|
|
17,381,517 |
|
|
|
17,346,561 |
|
|
|
17,358,213 |
|
|
|
17,346,561 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of shares used to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
compute diluted earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
per share
|
|
|
17,603,603 |
|
|
|
17,630,824 |
|
|
|
17,627,655 |
|
|
|
17,625,722 |
|
RRsat Global Communications Network Ltd. and its Subsidiaries
Interim Condensed Consolidated Statements of Income
In thousands
| |
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP Net Income to Non-GAAP Net Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net income attributable to shareholders
|
|
$ |
1,168 |
|
|
$ |
1,101 |
|
|
$ |
3,639 |
|
|
$ |
4,405 |
|
|
Adjustments to reconcile GAAP net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to non-GAAP net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash equity-based compensation charge
|
|
|
178 |
|
|
|
144 |
|
|
|
521 |
|
|
|
424 |
|
|
Amortization of acquisition related intangible
|
|
|
152 |
|
|
|
124 |
|
|
|
516 |
|
|
|
235 |
|
|
Changes in fair value of currency conversion derivatives
|
|
|
(265 |
) |
|
|
42 |
|
|
|
(215 |
) |
|
|
150 |
|
|
Acquisition related expenses
|
|
|
- |
|
|
|
900 |
|
|
|
- |
|
|
|
900 |
|
|
Amortization of acquisition related prepaid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
compensation expenses
|
|
|
42 |
|
|
|
42 |
|
|
|
126 |
|
|
|
126 |
|
|
Income tax effect of non-GAAP adjustments
|
|
|
13 |
|
|
|
(284 |
) |
|
|
(135 |
) |
|
|
(377 |
) |
|
Non-GAAP net income attributable to shareholders
|
|
$ |
1,288 |
|
|
$ |
2,069 |
|
|
$ |
4,452 |
|
|
$ |
5,863 |
|
| |
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP Operating Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to non GAAP operating income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$ |
1,548 |
|
|
$ |
1,532 |
|
|
$ |
5,067 |
|
|
$ |
6,217 |
|
|
Adjustments to reconcile GAAP operating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
income to non-GAAP operating income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash equity-based compensation charge
|
|
|
178 |
|
|
|
144 |
|
|
|
521 |
|
|
|
424 |
|
|
Amortization of acquisition related intangible
|
|
|
152 |
|
|
|
124 |
|
|
|
516 |
|
|
|
235 |
|
|
Acquisition related expenses
|
|
|
- |
|
|
|
900 |
|
|
|
- |
|
|
|
900 |
|
|
Cost of sales related changes in fair value of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
embedded currency conversion derivatives
|
|
|
(35 |
) |
|
|
(48 |
) |
|
|
(234 |
) |
|
|
(124 |
) |
|
Amortization of acquisition related prepaid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
compensation expenses
|
|
|
42 |
|
|
|
42 |
|
|
|
126 |
|
|
|
126 |
|
| |
|
$ |
1,885 |
|
|
$ |
2,694 |
|
|
$ |
5,996 |
|
|
$ |
7,778 |
|
RRsat Global Communications Network Ltd. and its subsidiaries
Interim Condensed Consolidated Statements of Income
In thousands
| |
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP Operating Income to adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$ |
1,548 |
|
|
$ |
1,532 |
|
|
$ |
5,067 |
|
|
$ |
6,217 |
|
|
Adjustments to reconcile GAAP operating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
income to Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash equity-based compensation charge
|
|
|
178 |
|
|
|
144 |
|
|
|
521 |
|
|
|
424 |
|
|
Depreciation and amortization
|
|
|
2,492 |
|
|
|
2,390 |
|
|
|
7,381 |
|
|
|
6,684 |
|
|
Acquisition related expenses
|
|
|
- |
|
|
|
900 |
|
|
|
- |
|
|
|
900 |
|
|
Cost of sales related changes in fair value of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
embedded currency conversion derivatives
|
|
|
(35 |
) |
|
|
(48 |
) |
|
|
(234 |
) |
|
|
(124 |
) |
|
Amortization of acquisition related prepaid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
compensation expenses
|
|
|
42 |
|
|
|
42 |
|
|
|
126 |
|
|
|
126 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$ |
4,225 |
|
|
$ |
4,960 |
|
|
$ |
12,861 |
|
|
$ |
14,227 |
|
RRsat Global Communications Network Ltd. and its subsidiaries
Interim Condensed Consolidated Statements of Income (non – GAAP results)
In thousands, except share data
| |
|
|
|
|
|
|
| |
|
September 30
|
|
|
September 30
|
|
|
September 30
|
|
|
September 30
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$ |
33,070 |
|
|
$ |
30,575 |
|
|
$ |
98,424 |
|
|
$ |
89,318 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
|
25,831 |
|
|
|
23,126 |
|
|
|
76,428 |
|
|
|
67,512 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
7,239 |
|
|
|
7,449 |
|
|
|
21,996 |
|
|
|
21,806 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
3,177 |
|
|
|
2,224 |
|
|
|
8,962 |
|
|
|
6,519 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
2,177 |
|
|
|
2,531 |
|
|
|
7,038 |
|
|
|
7,509 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
5,354 |
|
|
|
4,755 |
|
|
|
16,000 |
|
|
|
14,028 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
1,885 |
|
|
|
2,694 |
|
|
|
5,996 |
|
|
|
7,778 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(expenses), net
|
|
|
(219 |
) |
|
|
33 |
|
|
|
(342 |
) |
|
|
(52 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes on
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
income
|
|
|
1,666 |
|
|
|
2,727 |
|
|
|
5,654 |
|
|
|
7,726 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
402 |
|
|
|
658 |
|
|
|
1,343 |
|
|
|
1,863 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$ |
1,264 |
|
|
|
2,069 |
|
|
$ |
4,311 |
|
|
|
5,863 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to non- controlling interest
|
|
|
(24 |
) |
|
|
- |
|
|
|
(141 |
) |
|
|
- |
|
|
Net income attributable to shareholders
|
|
$ |
1,288 |
|
|
$ |
2,069 |
|
|
$ |
4,452 |
|
|
$ |
5,863 |
|
|
Earnings per ordinary share attributable to shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
$ |
0.07 |
|
|
$ |
0.12 |
|
|
$ |
0.26 |
|
|
$ |
0.34 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
$ |
0.07 |
|
|
$ |
0.12 |
|
|
$ |
0.25 |
|
|
$ |
0.33 |
|
|
Weighted average number
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of shares used to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
compute basic earnings per share
|
|
|
17,381,517 |
|
|
|
17,346,561 |
|
|
|
17,358,213 |
|
|
|
17,346,561 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of shares used to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
compute diluted earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
per share
|
|
|
17,603,603 |
|
|
|
17,630,824 |
|
|
|
17,627,655 |
|
|
|
17,625,722 |
|
Interim Condensed Consolidated Balance Sheets
In thousands, except share data
| |
|
September 30
|
|
|
December 31
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$ |
14,333 |
|
|
$ |
14,165 |
|
|
Marketable securities and short term investments
|
|
|
9,190 |
|
|
|
9,998 |
|
|
Accounts receivable:
|
|
|
|
|
|
|
|
|
|
Trade,(net of provision for doubtful accounts of
|
|
|
|
|
|
|
|
|
|
$6,411 and $6,938 as of September 30, 2014 and
|
|
|
|
|
|
|
|
|
|
December 31, 2013, respectively)
|
|
|
23,611 |
|
|
|
20,731 |
|
|
Other
|
|
|
1,624 |
|
|
|
2,163 |
|
|
Deferred taxes
|
|
|
2,580 |
|
|
|
2,095 |
|
|
Prepaid expenses
|
|
|
2,913 |
|
|
|
2,868 |
|
| |
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
54,251 |
|
|
|
52,020 |
|
| |
|
|
|
|
|
|
|
|
|
Long-term prepaid expenses
|
|
|
2,938 |
|
|
|
3,045 |
|
|
Long-term land lease prepaid expenses
|
|
|
7,416 |
|
|
|
7,469 |
|
|
Assets held for employee severance payments
|
|
|
2,070 |
|
|
|
2,120 |
|
|
Fixed assets, net
|
|
|
45,531 |
|
|
|
46,444 |
|
|
Goodwill
|
|
|
11,526 |
|
|
|
11,277 |
|
|
Intangible assets, at cost, less accumulated amortization
|
|
|
5,891 |
|
|
|
6,203 |
|
| |
|
|
|
|
|
|
|
|
|
Total long term assets
|
|
|
75,372 |
|
|
|
76,558 |
|
|
Total assets
|
|
$ |
129,623 |
|
|
$ |
128,578 |
|
RRsat Global Communications Network Ltd. and its subsidiaries
Interim Condensed Consolidated Balance Sheets (cont’d)
| |
|
September 30
|
|
|
December 31
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Liabilities and shareholders’ equity
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
Account payable:
|
|
|
|
|
|
|
|
Trade
|
|
$ |
18,371 |
|
|
$ |
17,181 |
|
|
Other
|
|
|
5,209 |
|
|
|
4,815 |
|
|
Deferred income
|
|
|
4,848 |
|
|
|
6,037 |
|
| |
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
28,428 |
|
|
|
28,033 |
|
| |
|
|
|
|
|
|
|
|
|
Long-term liabilities
|
|
|
|
|
|
|
|
|
|
Deferred income
|
|
|
9,075 |
|
|
|
9,076 |
|
|
Liability in respect of employee severance payments
|
|
|
2,807 |
|
|
|
2,854 |
|
|
Contingent consideration in respect of acquisition
|
|
|
4,030 |
|
|
|
3,820 |
|
|
Deferred taxes
|
|
|
4,288 |
|
|
|
4,312 |
|
| |
|
|
|
|
|
|
|
|
|
Total long-term liabilities
|
|
|
20,200 |
|
|
|
20,062 |
|
| |
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
48,628 |
|
|
|
48,095 |
|
| |
|
|
|
|
|
|
|
|
|
Shareholders’ equity
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
|
|
|
|
|
|
|
Ordinary share NIS 0.01 par value each (27,000,000 authorized as
|
|
|
|
|
|
|
|
|
|
of September 30, 2014 and December 31, 2013. 17,396,735 shares
|
|
|
|
|
|
|
|
|
|
issued and fully paid as of September 30, 2014, and 17,346,561
|
|
|
|
|
|
|
|
|
|
as of December 31, 2013)
|
|
|
41 |
|
|
|
40 |
|
|
Additional paid in capital
|
|
|
54,399 |
|
|
|
53,879 |
|
|
Retained earnings
|
|
|
27,107 |
|
|
|
25,723 |
|
|
Accumulated other comprehensive income
|
|
|
(411 |
) |
|
|
841 |
|
| |
|
|
|
|
|
|
|
|
|
Total shareholders’ equity
|
|
|
81,136 |
|
|
|
80,483 |
|
| |
|
|
|
|
|
|
|
|
|
Non-controlling interest
|
|
|
(141 |
) |
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
80,995 |
|
|
|
80,483 |
|
| |
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
$ |
129,623 |
|
|
$ |
128,578 |
|
RRsat Global Communications Network Ltd. and its subsidiaries
Interim Condensed Consolidated Statements of Cash Flows
In thousands
| |
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$ |
1,144 |
|
|
$ |
1,101 |
|
|
$ |
3,498 |
|
|
$ |
4,405 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments required to reconcile net income to net cash provided by operating activities
|
|
|
3,550 |
|
|
|
3,788 |
|
|
|
8,922 |
|
|
|
12,662 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in assets and liabilities
|
|
|
(1,136 |
) |
|
|
(1,340 |
) |
|
|
(4,635 |
) |
|
|
528 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
3,558 |
|
|
|
2,448 |
|
|
|
7,785 |
|
|
|
13,190 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in fixed assets
|
|
|
(1,969 |
) |
|
|
(1,420 |
) |
|
|
(6,206 |
) |
|
|
(7,996 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other investing activities
|
|
|
548 |
|
|
|
(5,911 |
) |
|
|
972 |
|
|
|
(2,432 |
) |
|
Cash flows from investing activities
|
|
|
(1,421 |
) |
|
|
(7,331 |
) |
|
|
(5,234 |
) |
|
|
(10,428 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
(347 |
) |
|
|
(1,735 |
) |
|
|
(2,255 |
) |
|
|
(4,510 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Translation adjustment on cash and cash equivalents
|
|
|
(155 |
) |
|
|
41 |
|
|
|
(128 |
) |
|
|
41 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash Equivalents
|
|
|
1,635 |
|
|
|
(6,577 |
) |
|
|
168 |
|
|
|
(1,707 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance of cash and cash equivalents at beginning of period
|
|
|
12,698 |
|
|
|
17,003 |
|
|
|
14,165 |
|
|
|
12,133 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance of cash and cash equivalents at end of period
|
|
$ |
14,333 |
|
|
$ |
10,426 |
|
|
$ |
14,333 |
|
|
$ |
10,426 |
|
14
Exhibit 99.2
For Immediate Distribution
RR Media Names Tim Richards to Board of Directors
Proven Media Industry Veteran Strengthens Board
Airport City Business Park, Israel – November 4, 2014 - RR Media (NASDAQ: RRST), a leading provider of global digital media services to the broadcast industry, today announced that Tim Richards, a proven and well-respected world expert on media operations and business practices, was named to the Board of Directors, effective immediately.
Avi Cohen, the Company’s Chief Executive Officer commented, “Tim brings exceptional media and operational expertise, as well as great insights from his more than two decades of working with blue chip global media businesses. His breadth and depth of experience across multiple clients and geographies, coupled with his more than 10 years in C-level and board roles in the media industry, brings additional strategic and operational depth to our board.”
“RR Media is well-positioned within this industry, with a compelling, end-to-end solution which is perfectly aligned with the major trends in the space,” added Mr. Richards. “Content owners are seeking new channels for engaging viewers, and new geographies to target. RR Media’s platform not only makes this possible, it does so in a converged and straightforward way that I believe the industry will continue to embrace.”
Mr. Richards has spent the last 25 years in blue chip global media businesses such as The Walt Disney Company, as well as successful smaller private equity-funded ventures and start-ups. Since 2007, he has served as a Senior Partner of Ravensbeck, a business improvement consultancy firm focusing on the media to create long-term value for clients, business partners and shareholders. The Ravensbeck team has worked successfully in all aspects of the media industry, building Walt Disney TV International into a market-leading $1.6 billion business with profit over $0.5 billion, leading Warner Brothers’ Global Digital Distribution business, purchasing Hallmark Channel International to turn it around and sell it less than three years later, delivering over 30% investor returns. The firm has also built two successful marketing oriented software companies and has launched over 100 TV channels and new media services. Mr. Richards has worked diligently to restructure the business operations of several Ravensbeck clients, helping them to achieve dramatic improvements in cost-effectiveness, while increasing focus on competing successfully in complex multi-media environments.
Most recently, Mr. Richards was appointed to the role of Chairman of the Partnership Board of IBC, the premier annual event for professionals engaged in the creation, management and delivery of entertainment and news content worldwide.
In addition, Mr. Richards currently serves as Chairman of Clusters, a market research and segmentation specialist. In this role, he oversees Clusters’ business growth strategy and financial performance as the firm applies advanced research techniques and data analytics programs, notably bespoke and superior segmentation techniques and software, to enable clients to target for business growth more precisely and effectively.
Prior to Ravensbeck, Mr. Richards co-founded Sparrowhawk Media, which employed more than 200 people in eight cities around the world. As chief operating officer, he was responsible for all business operations, systems and processes, logistics, technology, IT, European programming, business development initiatives, human resources, foreign language dubbing and broadcasting operations. Subsequently, Sparrowhawk was successfully sold to NBC Universal.
Earlier in his career, Mr. Richards worked for Walt Disney Television International, ultimately as Executive Vice President, Operations. He sat on the boards of a number of Disney’s International media investments and was Chairman of Disney’s Global Media Technology Board. As Head of Broadcasting for QVC, Tim was instrumental in establishing home shopping in the UK in 1993. Mr. Richards began his career as an independent producer and has worked extensively in the TV news business.
Mr. Richards has also provided consulting and other services from time to time to RR Media.
ENDS
About RR Media
RR Media* (NASDAQ: RRST) 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
* RR Media currently operates under the corporate name of RRsat Global Communications Network Ltd. The company is in the process of changing its corporate name to RR Media Ltd., which is scheduled to be completed in November 2014.
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, 2013 and our Current Reports on Form 6-K.
Company Contact:
Shmulik Koren, CFO
Tel: +972 3 928 0777
Email: investors@rrmedia.com
Investor Contact:
Hayden/ MS - IR
Brett Maas/ Miri Segal-Scharia
Tel: 646-536-7331 / 917-607-8654
3
Exhibit 99.3
|
RRsat Global Communications Network Ltd.
and its Subsidiaries
Interim Condensed
Consolidated Financial
Statements
As of September 30, 2014
(Unaudited)
|
Index to the Interim Condensed Consolidated Financial Statements as of September 30, 2014 (unaudited)
Contents
RRSat Global Communications Network Ltd.
Dear Sirs,
Review of the unaudited interim consolidated as of September 30, 2014 and financial statements for the nine-month and three-month periods ended September 30, 2014
Introduction
We have reviewed the accompanying financial information of RRsat Global Communications Network Ltd and its subsidiaries (“the Group”) comprising of the condensed consolidated interim balance sheet as of September 30, 2014 and the related statements of income, changes in equity and comprehensive income and cash flows for the nine-month and three-month periods then ended. The Board of Directors and Management are responsible for the preparation and fair presentation of this interim financial information in accordance with generally accepted accounting principles in the United States. Our responsibility is to express a conclusion on this interim financial information based on our review.
Scope of review
We conducted our review in accordance with Standard on Review Engagements 1, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity of Certified Public Accountants in Israel." A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards in Israel and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review nothing has come to our attention that causes us to believe that the accompanying interim financial information was not prepared, in all material respects, in accordance with generally accepted accounting principles in the United States.
Sincerely yours,
Somekh Chaikin
Certified Public Accountants (Isr.)
Member Firm of KPMG International
Tel-Aviv, Israel
November 3, 2014
RRsat Global Communications Network Ltd and its subsidiaries
Interim Condensed Consolidated Balance Sheets
In thousands, except share data
| |
|
September 30
|
|
|
December 31
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$ |
14,333 |
|
|
$ |
14,165 |
|
|
Marketable securities and short term investments
|
|
|
9,190 |
|
|
|
9,998 |
|
|
Accounts receivable:
|
|
|
|
|
|
|
|
|
|
Trade,(net of provision for doubtful accounts of
|
|
|
|
|
|
|
|
|
|
$6,411 and $6,938 as of September 30, 2014 and
|
|
|
|
|
|
|
|
|
|
December 31, 2013, respectively)
|
|
|
23,611 |
|
|
|
20,731 |
|
|
Other
|
|
|
1,624 |
|
|
|
2,163 |
|
|
Deferred taxes
|
|
|
2,580 |
|
|
|
2,095 |
|
|
Prepaid expenses
|
|
|
2,913 |
|
|
|
2,868 |
|
| |
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
54,251 |
|
|
|
52,020 |
|
| |
|
|
|
|
|
|
|
|
|
Long-term prepaid expenses
|
|
|
2,938 |
|
|
|
3,045 |
|
|
Long-term land lease prepaid expenses
|
|
|
7,416 |
|
|
|
7,469 |
|
|
Assets held for employee severance payments
|
|
|
2,070 |
|
|
|
2,120 |
|
|
Fixed assets, net
|
|
|
45,531 |
|
|
|
46,444 |
|
|
Goodwill
|
|
|
11,526 |
|
|
|
11,277 |
|
|
Intangible assets, at cost, less accumulated amortization
|
|
|
5,891 |
|
|
|
6,203 |
|
| |
|
|
|
|
|
|
|
|
|
Total long term assets
|
|
|
75,372 |
|
|
|
76,558 |
|
|
Total assets
|
|
$ |
129,623 |
|
|
$ |
128,578 |
|
| |
|
|
|
Avi Cohen
|
|
Shmuel Koren
|
|
CEO
|
|
CFO
|
|
November 3, 2014
|
|
|
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
RRsat Global Communications Network Ltd. and its subsidiaries
Interim Condensed Consolidated Balance Sheets (cont’d)
| |
|
September 30
|
|
|
December 31
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Liabilities and shareholders’ equity
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
Account payable:
|
|
|
|
|
|
|
|
Trade
|
|
$ |
18,371 |
|
|
$ |
17,181 |
|
|
Other
|
|
|
5,209 |
|
|
|
4,815 |
|
|
Deferred income
|
|
|
4,848 |
|
|
|
6,037 |
|
| |
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
28,428 |
|
|
|
28,033 |
|
| |
|
|
|
|
|
|
|
|
|
Long-term liabilities
|
|
|
|
|
|
|
|
|
|
Deferred income
|
|
|
9,075 |
|
|
|
9,076 |
|
|
Liability in respect of employee severance payments
|
|
|
2,807 |
|
|
|
2,854 |
|
|
Contingent consideration in respect of acquisition
|
|
|
4,030 |
|
|
|
3,820 |
|
|
Deferred taxes
|
|
|
4,288 |
|
|
|
4,312 |
|
| |
|
|
|
|
|
|
|
|
|
Total long-term liabilities
|
|
|
20,200 |
|
|
|
20,062 |
|
| |
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
48,628 |
|
|
|
48,095 |
|
| |
|
|
|
|
|
|
|
|
|
Shareholders’ equity
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
|
|
|
|
|
|
|
Ordinary share NIS 0.01 par value each (27,000,000 authorized as
|
|
|
|
|
|
|
|
|
|
of September 30, 2014 and December 31, 2013. 17,396,735 shares
|
|
|
|
|
|
|
|
|
|
issued and fully paid as of September 30, 2014, and 17,346,561
|
|
|
|
|
|
|
|
|
|
as of December 31, 2013)
|
|
|
41 |
|
|
|
40 |
|
|
Additional paid in capital
|
|
|
54,399 |
|
|
|
53,879 |
|
|
Retained earnings
|
|
|
27,107 |
|
|
|
25,723 |
|
|
Accumulated other comprehensive income (loss)
|
|
|
(411 |
) |
|
|
841 |
|
| |
|
|
|
|
|
|
|
|
|
Total shareholders’ equity
|
|
|
81,136 |
|
|
|
80,483 |
|
| |
|
|
|
|
|
|
|
|
|
Non-controlling interest
|
|
|
(141 |
) |
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
80,995 |
|
|
|
80,483 |
|
| |
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
$ |
129,623 |
|
|
$ |
128,578 |
|
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
RRsat Global Communications Network Ltd. and its subsidiaries
Interim Condensed Consolidated Statements of Income
In thousands, except share data
| |
|
|
|
|
|
|
|
Year ended
|
|
| |
|
September 30
|
|
|
September 30
|
|
|
September 30
|
|
|
September 30
|
|
|
December 31
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$ |
98,424 |
|
|
$ |
89,318 |
|
|
$ |
33,070 |
|
|
$ |
30,575 |
|
|
$ |
121,795 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
|
76,237 |
|
|
|
67,416 |
|
|
|
25,813 |
|
|
|
23,087 |
|
|
|
92,313 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
22,187 |
|
|
|
21,902 |
|
|
|
7,257 |
|
|
|
7,488 |
|
|
|
29,482 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
9,658 |
|
|
|
6,940 |
|
|
|
3,384 |
|
|
|
2,410 |
|
|
|
9,517 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
7,462 |
|
|
|
8,745 |
|
|
|
2,325 |
|
|
|
3,546 |
|
|
|
12,003 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
17,120 |
|
|
|
15,685 |
|
|
|
5,709 |
|
|
|
5,956 |
|
|
|
21,520 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
5,067 |
|
|
|
6,217 |
|
|
|
1,548 |
|
|
|
1,532 |
|
|
|
7,962 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(expenses), net
|
|
|
(361 |
) |
|
|
(326 |
) |
|
|
9 |
|
|
|
(57 |
) |
|
|
(153 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes on
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
income
|
|
|
4,706 |
|
|
|
5,891 |
|
|
|
1,557 |
|
|
|
1,475 |
|
|
|
7,809 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
1,208 |
|
|
|
1,486 |
|
|
|
413 |
|
|
|
374 |
|
|
|
1,287 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
3,498 |
|
|
|
4,405 |
|
|
|
1,144 |
|
|
|
1,101 |
|
|
|
6,522 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
non-controlling interest
|
|
|
(141 |
) |
|
|
- |
|
|
|
(24 |
) |
|
|
- |
|
|
|
- |
|
|
Net income attributable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to shareholders
|
|
$ |
3,639 |
|
|
$ |
4,405 |
|
|
$ |
1,168 |
|
|
$ |
1,101 |
|
|
$ |
6,522 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per ordinary share attributable to shareholders
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
$ |
0.21 |
|
|
$ |
0.25 |
|
|
$ |
0.07 |
|
|
$ |
0.06 |
|
|
$ |
0.38 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
$ |
0.21 |
|
|
$ |
0.25 |
|
|
$ |
0.07 |
|
|
$ |
0.06 |
|
|
$ |
0.37 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of shares used to compute
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
basic earnings per share
|
|
|
17,358,213 |
|
|
|
17,346,561 |
|
|
|
17,381,517 |
|
|
|
17,346,561 |
|
|
|
17,346,561 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of shares used to compute
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
diluted earnings per share
|
|
|
17,627,655 |
|
|
|
17,625,722 |
|
|
|
17,603,603 |
|
|
|
17,630,824 |
|
|
|
17,571,188 |
|
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
RRsat Global Communications Network Ltd. and its subsidiaries
Interim Condensed Consolidated Statements of Comprehensive Income
In thousands
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$ |
3,498 |
|
|
$ |
4,405 |
|
|
$ |
1,144 |
|
|
$ |
1,101 |
|
|
$ |
6,522 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments
|
|
|
167 |
|
|
|
71 |
|
|
|
(580 |
) |
|
|
71 |
|
|
|
170 |
|
|
Unrealized change in investment securities,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
net of tax effect
|
|
|
(42 |
) |
|
|
(49 |
) |
|
|
(37 |
) |
|
|
19 |
|
|
|
(58 |
) |
|
Reclassification adjustments for losses (profit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of investment securities, net of tax effect
|
|
|
17 |
|
|
|
(62 |
) |
|
|
2 |
|
|
|
(11 |
) |
|
|
(66 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow hedging derivatives, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
effect
|
|
|
(1,070 |
) |
|
|
861 |
|
|
|
(1,064 |
) |
|
|
402 |
|
|
|
1,060 |
|
|
Reclassification adjustments for Loss (income)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of hedging derivatives, net of tax effect
|
|
|
(324 |
) |
|
|
(489 |
) |
|
|
(64 |
) |
|
|
(216 |
) |
|
|
(633 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other comprehensive income (loss),
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
net of tax
|
|
|
(1,252 |
) |
|
|
332 |
|
|
|
(1,743 |
) |
|
|
265 |
|
|
|
473 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income (loss)
|
|
$ |
2,246 |
|
|
$ |
4,737 |
|
|
$ |
(599 |
) |
|
$ |
1,366 |
|
|
$ |
6,995 |
|
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
RRsat Global Communications Network Ltd. and its subsidiaries
Interim Condensed Consolidated Statements of Changes in Equity
In thousands, except share data
| |
|
Attributable to owners of the Company
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
other
|
|
|
Non-
|
|
|
|
|
| |
|
Number of
|
|
|
|
|
|
paid-in
|
|
|
Retained
|
|
|
comprehensive
|
|
|
controlling
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2014 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at January 1,2014
|
|
|
17,346,561 |
|
|
$ |
40 |
|
|
$ |
53,879 |
|
|
$ |
25,723 |
|
|
$ |
841 |
|
|
|
- |
|
|
$ |
80,483 |
|
|
Stock-based compensation
|
|
|
- |
|
|
|
- |
|
|
|
521 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
521 |
|
|
Dividend paid $ 0.06 per share
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,041 |
) |
|
|
- |
|
|
|
- |
|
|
|
(1,041 |
) |
|
Dividend paid $ 0.05 per share
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(867 |
) |
|
|
- |
|
|
|
- |
|
|
|
(867 |
) |
|
Dividend paid $0.02 per share
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(347 |
) |
|
|
- |
|
|
|
- |
|
|
|
(347 |
) |
|
Net income
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
3,639 |
|
|
|
- |
|
|
|
(141 |
) |
|
|
3,498 |
|
|
Exercise of options
|
|
|
50,174 |
|
|
|
1 |
|
|
|
(1 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Other comprehensive loss
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,252 |
) |
|
|
- |
|
|
|
(1,252 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 (unaudited)
|
|
|
17,396,735 |
|
|
$ |
41 |
|
|
$ |
54,399 |
|
|
$ |
27,107 |
|
|
$ |
(411 |
) |
|
$ |
(141 |
) |
|
$ |
80,995 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2013 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at January 1, 2013
|
|
|
17,346,561 |
|
|
|
40 |
|
|
|
53,312 |
|
|
|
24,231 |
|
|
|
368 |
|
|
|
- |
|
|
|
77,951 |
|
|
Stock-based compensation
|
|
|
- |
|
|
|
- |
|
|
|
424 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
424 |
|
|
Dividend paid $0.16 per share
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(2,775 |
) |
|
|
- |
|
|
|
- |
|
|
|
(2,775 |
) |
|
Dividend paid $0.10 per share
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,735 |
) |
|
|
- |
|
|
|
- |
|
|
|
(1,735 |
) |
|
Net income
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
4,405 |
|
|
|
- |
|
|
|
- |
|
|
|
4,405 |
|
|
Other comprehensive income
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
332 |
|
|
|
- |
|
|
|
332 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 (unaudited)
|
|
|
17,346,561 |
|
|
|
40 |
|
|
|
53,736 |
|
|
|
24,126 |
|
|
|
700 |
|
|
|
- |
|
|
|
78,602 |
|
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
RRsat Global Communications Network Ltd. and its subsidiaries
Interim Condensed Consolidated Statements of Changes in Equity (cont’d)
In thousands, except share data
| |
|
Attributable to owners of the Company
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
other
|
|
|
Non-
|
|
|
|
|
| |
|
Number of
|
|
|
|
|
|
paid-in
|
|
|
Retained
|
|
|
comprehensive
|
|
|
controlling
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30, 2014 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at July 1, 2014
|
|
|
17,346,561 |
|
|
$ |
40 |
|
|
$ |
54,222 |
|
|
$ |
26,286 |
|
|
$ |
1,332 |
|
|
$ |
(117 |
) |
|
$ |
81,763 |
|
|
Stock-based compensation
|
|
|
- |
|
|
|
- |
|
|
|
178 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
178 |
|
|
Dividend paid $0.02 per share
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(347 |
) |
|
|
- |
|
|
|
- |
|
|
|
(347 |
) |
|
Net income
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,168 |
|
|
|
- |
|
|
|
(24 |
) |
|
|
1,144 |
|
|
Exercise of options
|
|
|
50,174 |
|
|
|
1 |
|
|
|
(1 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Other comprehensive loss
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,743 |
) |
|
|
- |
|
|
|
(1,743 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 (unaudited)
|
|
|
17,396,735 |
|
|
$ |
41 |
|
|
$ |
54,399 |
|
|
$ |
27,107 |
|
|
$ |
(411 |
) |
|
$ |
(141 |
) |
|
$ |
80,995 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30, 2013 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at July 1, 2013
|
|
|
17,346,561 |
|
|
|
40 |
|
|
|
53,592 |
|
|
|
24,760 |
|
|
|
435 |
|
|
|
- |
|
|
|
78,827 |
|
|
Stock-based compensation
|
|
|
- |
|
|
|
- |
|
|
|
144 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
144 |
|
|
Dividend paid $0.10 per share
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,735 |
) |
|
|
- |
|
|
|
- |
|
|
|
(1,735 |
) |
|
Net income
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,101 |
|
|
|
- |
|
|
|
- |
|
|
|
1,101 |
|
|
Other comprehensive income
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
265 |
|
|
|
- |
|
|
|
265 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 (unaudited)
|
|
|
17,346,561 |
|
|
|
40 |
|
|
|
53,736 |
|
|
|
24,126 |
|
|
|
700 |
|
|
|
- |
|
|
|
78,602 |
|
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
RRsat Global Communications Network Ltd. and its subsidiaries
Interim Condensed Consolidated Statements of Changes in Equity (cont’d)
In thousands, except share data
| |
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
| |
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
other
|
|
|
|
|
| |
|
Number of
|
|
|
|
|
|
paid-in
|
|
|
Retained
|
|
|
comprehensive
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 1, 2013 (audited)
|
|
|
17,346,561 |
|
|
|
40 |
|
|
|
53,312 |
|
|
|
24,231 |
|
|
|
368 |
|
|
|
77,951 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
|
- |
|
|
|
- |
|
|
|
567 |
|
|
|
- |
|
|
|
- |
|
|
|
567 |
|
|
Dividend paid $0.29 per
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
share
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(5,030 |
) |
|
|
- |
|
|
|
(5,030 |
) |
|
Net income
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
6,522 |
|
|
|
- |
|
|
|
6,522 |
|
|
Other comprehensive income
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
473 |
|
|
|
473 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31, 2013 (audited)
|
|
|
17,346,561 |
|
|
|
40 |
|
|
|
53,879 |
|
|
|
25,723 |
|
|
|
841 |
|
|
|
80,483 |
|
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
RRsat Global Communications Network Ltd. and its subsidiaries
Interim Condensed Consolidated Statements of Cash Flows
In thousands
| |
|
Nine months ended
|
|
|
Three months ended
|
|
|
Year ended
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$ |
3,498 |
|
|
$ |
4,405 |
|
|
$ |
1,144 |
|
|
$ |
1,101 |
|
|
$ |
6,522 |
|
|
Adjustments required to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
7,381 |
|
|
|
6,684 |
|
|
|
2,494 |
|
|
|
2,390 |
|
|
|
9,280 |
|
|
Non cash stock-based compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
expenses
|
|
|
521 |
|
|
|
424 |
|
|
|
178 |
|
|
|
144 |
|
|
|
567 |
|
|
Provision for doubtful account
|
|
|
1,133 |
|
|
|
1,527 |
|
|
|
315 |
|
|
|
453 |
|
|
|
2,436 |
|
|
Deferred taxes
|
|
|
42 |
|
|
|
(120 |
) |
|
|
(14 |
) |
|
|
(145 |
) |
|
|
678 |
|
|
Discount accretion and premium
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
amortization of available-for-sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
securities, net
|
|
|
(194 |
) |
|
|
(184 |
) |
|
|
(49 |
) |
|
|
(48 |
) |
|
|
(226 |
) |
|
Income (loss) on sales of available-for-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
sale securities
|
|
|
24 |
|
|
|
(62 |
) |
|
|
4 |
|
|
|
(11 |
) |
|
|
(87 |
) |
|
Changes in liability for employee
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
severance payments, net
|
|
|
2 |
|
|
|
(68 |
) |
|
|
686 |
|
|
|
(43 |
) |
|
|
340 |
|
|
Changes in fair value of derivatives
|
|
|
(175 |
) |
|
|
62 |
|
|
|
(112 |
) |
|
|
(46 |
) |
|
|
110 |
|
|
Profit (loss) from trading securities, net
|
|
|
(22 |
) |
|
|
(6 |
) |
|
|
(2 |
) |
|
|
(7 |
) |
|
|
(50 |
) |
|
Change in contingent consideration in respect of acquisition
|
|
|
210 |
|
|
|
- |
|
|
|
50 |
|
|
|
- |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease (increase) in account receivable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- trade
|
|
|
(4,816 |
) |
|
|
(1,693 |
) |
|
|
(1,254 |
) |
|
|
(302 |
) |
|
|
(1,028 |
) |
|
Decrease (increase) in account receivable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- other
|
|
|
(178 |
) |
|
|
(418 |
) |
|
|
1,397 |
|
|
|
1 |
|
|
|
(451 |
) |
|
Decrease (increase) in prepaid expenses
|
|
|
(75 |
) |
|
|
410 |
|
|
|
233 |
|
|
|
579 |
|
|
|
14 |
|
|
Decrease (increase) in long-term prepaid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
expenses
|
|
|
100 |
|
|
|
(90 |
) |
|
|
(625 |
) |
|
|
11 |
|
|
|
(880 |
) |
|
Increase (decrease) in account payables
|
|
|
788 |
|
|
|
3,075 |
|
|
|
(1,132 |
) |
|
|
878 |
|
|
|
4,618 |
|
|
Increase (decrease) in deferred income
|
|
|
(454 |
) |
|
|
(756 |
) |
|
|
245 |
|
|
|
(2,507 |
) |
|
|
(542 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
$ |
7,785 |
|
|
$ |
13,190 |
|
|
$ |
3,558 |
|
|
$ |
2,448 |
|
|
$ |
21,301 |
|
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
RRsat Global Communications Network Ltd. and its subsidiaries
Interim Condensed Consolidated Statements of Cash Flows (cont’d)
In thousands
| |
|
Nine months ended
|
|
|
Three months ended
|
|
|
Year ended
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in fixed assets
|
|
$ |
(6,206 |
) |
|
$ |
(7,996 |
) |
|
$ |
(1,969 |
) |
|
$ |
(1,420 |
) |
|
$ |
(10,904 |
) |
|
Business combination
|
|
|
- |
|
|
|
(7,563 |
) |
|
|
- |
|
|
|
(7,563 |
) |
|
|
(7,875 |
) |
|
Decrease (increase) in short-term
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
investments, net
|
|
|
- |
|
|
|
1,178 |
|
|
|
- |
|
|
|
(161 |
) |
|
|
1,339 |
|
|
Investments in securities available-for-sale
|
|
|
(2,976 |
) |
|
|
(3,912 |
) |
|
|
(332 |
) |
|
|
(1,655 |
) |
|
|
(3,912 |
) |
|
Decrease (increase) in trading securities, net
|
|
|
(29 |
) |
|
|
(221 |
) |
|
|
13 |
|
|
|
(221 |
) |
|
|
(358 |
) |
|
Proceeds from sale of fixed assets
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
7 |
|
|
Proceeds from securities available- for -sale
|
|
|
3,977 |
|
|
|
8,086 |
|
|
|
867 |
|
|
|
3,689 |
|
|
|
7,355 |
|
|
Net cash used in investing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
activities
|
|
$ |
(5,234 |
) |
|
$ |
(10,428 |
) |
|
$ |
(1,421 |
) |
|
$ |
(7,331 |
) |
|
$ |
(14,348 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend paid
|
|
$ |
(2,255 |
) |
|
$ |
(4,510 |
) |
|
$ |
(347 |
) |
|
$ |
(1,735 |
) |
|
$ |
(5,030 |
) |
|
Net cash used in financing activities
|
|
$ |
(2,255 |
) |
|
$ |
(4,510 |
) |
|
$ |
(347 |
) |
|
$ |
(1,735 |
) |
|
$ |
(5,030 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of translation adjustments
|
|
|
(128 |
) |
|
|
41 |
|
|
|
(155 |
) |
|
|
41 |
|
|
|
109 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
equivalents
|
|
|
168 |
|
|
|
(1,707 |
) |
|
|
1,635 |
|
|
|
(6,577 |
) |
|
|
2,032 |
|
|
Balance of cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
at beginning of period
|
|
|
14,165 |
|
|
|
12,133 |
|
|
$ |
12,698 |
|
|
|
17,003 |
|
|
|
12,133 |
|
|
Balance of cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
at end of period
|
|
$ |
14,333 |
|
|
$ |
10,426 |
|
|
$ |
14,333 |
|
|
$ |
10,426 |
|
|
$ |
14,165 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A Non-cash transactions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in fixed assets
|
|
|
- |
|
|
|
107 |
|
|
|
- |
|
|
|
107 |
|
|
|
255 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
B . Supplementary cash flow information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes paid, net of refunds
|
|
|
627 |
|
|
|
1,505 |
|
|
|
(311 |
) |
|
|
658 |
|
|
|
1,755 |
|
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
RRsat Global Communications Network Ltd. and its subsidiaries
Notes to the Condensed Consolidated Financial Statements (unaudited)
In thousands
Note 1 - Organization and Basis of Presentation
A. Description of business
RRsat Global Communications Network Ltd. was incorporated in 1981 and it engages in providing global, end-to-end, content distribution and management services to television and radio broadcasting industries through satellite, terrestrial fiber optic and Internet, and mobile communications services through satellites (MSS).
B. Basis of presentation and adoption of new account standards
The interim consolidated financial statements as of September 30, 2014, and for the nine months period then ended were prepared in accordance with Generally Accepted Accounting Principles in the United States (U.S. GAAP). These financial statements were prepared in a condensed format and should be read in conjunction with the Company’s audited financial statements and accompanying notes as at December 31, 2013 (“the annual financial statements”). Results for the interim period presented are not necessarily indicative of the results to be expected for the full year.
C. Recently issued accounting standards
On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2017.
Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.
D. Use of estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the useful lives of fixed assets: impairment of reporting units containing goodwill, allocation of fair value of assets and liabilities in acquisitions, allowances for doubtful accounts, the valuation of derivatives, impairment of fixed and intangible assets, valuation of deferred tax assets, share-based compensation, income tax, uncertainties and other contingencies. The current economic environment has increased the degree of uncertainty inherent in those estimates and assumptions.
RRsat Global Communications Network Ltd. and its subsidiaries
Notes to the Condensed Consolidated Financial Statements (unaudited)
In thousands
Note 2 - Segments Results
The Company’s segments are strategic business units that offer different communication services and are managed accordingly.
The Company analyzes its operating segments based on the segment’s gross profit. The Company has two reportable segments: (1) Content management and distribution services to television and radio broadcasting industries (hereinafter – content management and distribution services), and (2) Mobile satellite communications services.
Management evaluates each segment’s performance based upon revenues and gross profit. Management believes such discussions are the most informative representation of how management evaluates performance. Business segments revenues and gross profit are presented below.
The following Tables show components of results of operations by segment:
Nine months ended September 30, 2014 (unaudited)
| |
|
Mobile Satellite Services
|
|
|
Content management and distribution services
|
|
|
|
|
|
Revenues
|
|
$ |
8,587 |
|
|
$ |
89,837 |
|
|
$ |
98,424 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$ |
1,096 |
|
|
$ |
21,091 |
|
|
$ |
22,187 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
|
|
|
|
|
|
|
|
9,658 |
|
|
General and administration
|
|
|
|
|
|
|
|
|
|
|
7,462 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
|
|
|
|
|
|
$ |
5,067 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial expenses, net
|
|
|
|
|
|
|
|
|
|
|
(361 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes on income
|
|
|
|
|
|
|
|
|
|
$ |
4,706 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
$ |
320 |
|
|
$ |
7,061 |
|
|
$ |
7,381 |
|
Nine months ended September 30, 2013 (unaudited):
| |
|
Mobile Satellite Services
|
|
|
Content management and distribution services
|
|
|
|
|
|
Revenues
|
|
$ |
8,011 |
|
|
$ |
81,307 |
|
|
$ |
89,318 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$ |
1,660 |
|
|
$ |
20,242 |
|
|
$ |
21,902 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
|
|
|
|
|
|
|
|
6,940 |
|
|
General and administration
|
|
|
|
|
|
|
|
|
|
|
8,745 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
|
|
|
|
|
|
$ |
6,217 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial expenses, net
|
|
|
|
|
|
|
|
|
|
|
(326 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes on income
|
|
|
|
|
|
|
|
|
|
$ |
5,891 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
$ |
236 |
|
|
$ |
6,448 |
|
|
$ |
6,684 |
|
RRsat Global Communications Network Ltd. and its subsidiaries
Notes to the Condensed Consolidated Financial Statements (unaudited)
In thousands
Note 2 - Segments Results (cont’d)
Three months ended September 30, 2014 (unaudited)
| |
|
Mobile Satellite Services
|
|
|
Content management and distribution services
|
|
|
|
|
|
Revenues
|
|
$ |
2,877 |
|
|
$ |
30,193 |
|
|
$ |
33,070 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$ |
412 |
|
|
$ |
6,845 |
|
|
$ |
7,257 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
|
|
|
|
|
|
|
|
3,384 |
|
|
General and administration
|
|
|
|
|
|
|
|
|
|
|
2,325 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
|
|
|
|
|
|
$ |
1,548 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial income, net
|
|
|
|
|
|
|
|
|
|
|
9 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes on income
|
|
|
|
|
|
|
|
|
|
$ |
1,557 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
$ |
80 |
|
|
$ |
2,414 |
|
|
$ |
2,494 |
|
Three months ended September 30, 2013 (unaudited):
| |
|
Mobile Satellite Services
|
|
|
Content management and distribution services
|
|
|
|
|
|
Revenues
|
|
$ |
2,731 |
|
|
$ |
27,844 |
|
|
$ |
30,575 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$ |
514 |
|
|
$ |
6,974 |
|
|
$ |
7,488 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
|
|
|
|
|
|
|
|
2,410 |
|
|
General and administration
|
|
|
|
|
|
|
|
|
|
|
3,546 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
|
|
|
|
|
|
$ |
1,532 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial income net
|
|
|
|
|
|
|
|
|
|
|
(57 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes on income
|
|
|
|
|
|
|
|
|
|
$ |
1,475 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
$ |
76 |
|
|
$ |
2,314 |
|
|
$ |
2,390 |
|
RRsat Global Communications Network Ltd. and its subsidiaries
Notes to the Condensed Consolidated Financial Statements (unaudited)
In thousands
Note 2 - Segments Results (cont’d)
Year ended December 31, 2013 (audited)
| |
|
Mobile Satellite Services
|
|
|
Content management and distribution services
|
|
|
|
|
|
Total revenue
|
|
$ |
11,038 |
|
|
$ |
110,757 |
|
|
$ |
121,795 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$ |
1,952 |
|
|
$ |
27,530 |
|
|
$ |
29,482 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
|
|
|
|
|
|
|
|
9,517 |
|
|
General and administration
|
|
|
|
|
|
|
|
|
|
|
12,003 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
|
|
|
|
|
|
$ |
7,962 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial expenses net
|
|
|
|
|
|
|
|
|
|
|
(153 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes on income
|
|
|
|
|
|
|
|
|
|
$ |
7,809 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
$ |
532 |
|
|
$ |
8,748 |
|
|
$ |
9,280 |
|
Revenue by geographic areas
| |
|
Nine months ended
|
|
|
Three months ended
|
|
|
Year ended
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
$ |
27,252 |
|
|
$ |
26,987 |
|
|
$ |
9,219 |
|
|
$ |
9,085 |
|
|
$ |
35,520 |
|
|
Europe
|
|
|
41,630 |
|
|
|
35,805 |
|
|
|
13,698 |
|
|
|
12,615 |
|
|
|
49,962 |
|
|
Asia
|
|
|
11,708 |
|
|
|
9,892 |
|
|
|
3,784 |
|
|
|
3,565 |
|
|
|
13,655 |
|
|
Israel
|
|
|
6,019 |
|
|
|
6,898 |
|
|
|
2,189 |
|
|
|
2,121 |
|
|
|
9,165 |
|
|
Middle East (other than Israel)
|
|
|
7,983 |
|
|
|
6,852 |
|
|
|
3,002 |
|
|
|
2,142 |
|
|
|
8,964 |
|
|
Rest of the world
|
|
|
3,832 |
|
|
|
2,884 |
|
|
|
1,178 |
|
|
|
1,047 |
|
|
|
4,529 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
$ |
98,424 |
|
|
$ |
89,318 |
|
|
$ |
33,070 |
|
|
$ |
30,575 |
|
|
$ |
121,795 |
|
RRsat Global Communications Network Ltd. and its subsidiaries
Notes to the Condensed Consolidated Financial Statements (unaudited)
In thousands
Note 3 - Fair Value of Financial Instruments
The Company’s financial assets and liabilities consist of cash and cash equivalents, short-term investments, trade and other receivables and trade and other payables . The carrying amount of these financial instruments approximate fair value because of the short maturity of these investments. Assets held of severance benefits are recorded at their current cash redemption value.
Fair Value Hierarchy
ASC Topic 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:
|
|
v
|
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
|
|
|
v
|
Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
|
|
|
v
|
Level 3 inputs are unobservable inputs for the asset or liability.
|
The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement.
In accordance with ASC Topic 820 the Company’s available-for-sale and trading securities are classified within level 1 because their value was determined using quoted market prices in active markets. The Company’s currency conversion derivatives are classified as Level 2 as they represent foreign currency forward contracts valued primarily based on observable inputs including forward rates and yield curves.
RRsat Global Communications Network Ltd. and its subsidiaries
Notes to the Condensed Consolidated Financial Statements (unaudited)
In thousands
Note 3 - Fair Value of Financial Instruments (cont’d)
Assets and liabilities measured at fair value at September 30, 2014 are summarized below (unaudited):
| |
|
Quoted prices in Active Markets for Identical Assets (Level 1)
|
|
|
Significant other observable inputs (Level 2)
|
|
|
Significant Unobservable inputs (Level 3)
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
Trading securities
|
|
$ |
672 |
|
|
|
- |
|
|
|
- |
|
|
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debentures
|
|
|
7,883 |
|
|
|
- |
|
|
|
- |
|
|
US government or government
|
|
|
|
|
|
|
|
|
|
|
|
|
|
agencies’ debentures
|
|
|
635 |
|
|
|
- |
|
|
|
- |
|
|
Fair value of derivatives
|
|
|
- |
|
|
|
681 |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total at September 30, 2014
|
|
$ |
9,190 |
|
|
$ |
681 |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent consideration in respect
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of acquisition
|
|
|
- |
|
|
|
- |
|
|
$ |
4,030 |
|
|
Fair value of derivatives
|
|
|
- |
|
|
|
1,786 |
|
|
|
- |
|
|
at September 30, 2014
|
|
|
- |
|
|
$ |
1,786 |
|
|
$ |
4,030 |
|
Assets and liabilities measured at fair value at December 31, 2013 are summarized below (audited):
| |
|
Quoted prices in Active Markets for Identical Assets (Level 1)
|
|
|
Significant other observable
inputs (Level 2)
|
|
|
Significant Unobservable inputs (Level 3)
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
Trading securities
|
|
$ |
622 |
|
|
$ |
- |
|
|
$ |
- |
|
|
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debentures
|
|
|
8,953 |
|
|
|
- |
|
|
|
- |
|
|
US government or government
|
|
|
|
|
|
|
|
|
|
|
|
|
|
agencies’ debentures
|
|
|
423 |
|
|
|
- |
|
|
|
- |
|
|
Fair value of derivatives
|
|
|
- |
|
|
|
1,369 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
- |
|
|
Total at December 31, 2013
|
|
$ |
9,998 |
|
|
$ |
1,369 |
|
|
$ |
- |
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent consideration in respect
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of acquisition
|
|
|
- |
|
|
|
- |
|
|
|
3,820 |
|
|
Fair value of derivatives
|
|
|
- |
|
|
|
713 |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
$ |
- |
|
|
$ |
713 |
|
|
$ |
3,820 |
|
The fair value calculation of the significant unobservable inputs (level 3) based on five possible scenarios according to the management assumption; each scenario was comprised of a performance indicator and a probability. The company recorded expenses in the amount of $210 in the financial expenses.
RRsat Global Communications Network Ltd. and its subsidiaries
Notes to the Condensed Consolidated Financial Statements (unaudited)
In thousands
Note 3 - Fair Value of Financial Instruments (cont’d)
Gross unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position were as follows:
At September 30, 2014 (unaudited)
| |
|
Unrealized losses
(all less than 12 months)
|
|
|
|
|
|
Available for sale:
|
|
|
|
|
|
|
|
Corporate debentures
|
|
|
(27 |
) |
|
|
3,253 |
|
| |
|
|
|
|
|
|
|
|
|
Total at September 30, 2014 (unaudited)
|
|
|
(27 |
) |
|
|
3,253 |
|
At December 31, 2013 (audited)
| |
|
Unrealized losses
(all less than 12 months)
|
|
|
|
|
|
Available for sale:
|
|
|
|
|
|
|
|
Corporate debentures
|
|
|
(57 |
) |
|
|
4,319 |
|
| |
|
|
|
|
|
|
|
|
|
Total at December 31, 2013 (audited)
|
|
|
(57 |
) |
|
|
4,319 |
|
The unrealized losses on investments in U.S. government or government agencies and corporate debt securities were caused mainly by current market conditions. The contractual terms of these investments do not permit the issuer to settle the securities at a price less than the amortized cost of the investment. Since the Company does not plan to sell and is not likely to be required to sell the investments before the expected recovery of the amortization cost basis, these investments are not considered other than temporarily impaired.
RRsat Global Communications Network Ltd. and its subsidiaries
Notes to the Condensed Consolidated Financial Statements (unaudited)
In thousands
Note 4 - Events in Reporting Period
|
|
A.
|
On March 31, 2014 Viola Group acquired additional 6.6% of the Company's shares from Kardan. Following this transaction Viola Group owns approximately 28.6% of the Company's shares.
|
|
|
B.
|
On March 5, 2014, the Company’s Board of Directors declared a cash dividend in the amount of $0.06 per ordinary share, and in aggregate amount of approximately $1.0 million. The dividend has been paid 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.
|
|
|
C.
|
On May 19, 2014, the Board of Directors declared a cash dividend in the amount of $0.05 per ordinary share, and in the aggregate amount of approximately $870 thousand. The dividend paid on June 18, 2014 to all of the Company's shareholders of record at the end of the trading day on the NASDAQ on June 2, 2014.
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D.
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On August 4, 2014, the Board of Directors declared a cash dividend in the amount of $0.02 per ordinary share, and in the aggregate amount of approximately $350 thousand. The dividend paid on September 3, 2014 to all of the Company's shareholders of record at the end of the trading day on the NASDAQ on August 18, 2014.
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Note 5 - Subsequent Events
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A.
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On October 19, 2014 the Board of Directors has adopted a new dividend policy pursuant to which, subject to applicable law requirements and the discretion of the Board of Directors from time to time, it shall distribute a fixed dividend to the shareholders at the end of each calendar quarter equal to $0.07 per share.
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B.
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On October 20, 2014 the Board of Directors approved the change of the company’s name from RRsat Global Communications Network Ltd. or such similar name as determined by the Board of Directors and approved by the Israeli Registrar, and to amend the Articles of Association to reflect the name change.
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C.
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On October 20, 2014 the Board of Directors authorized a share repurchase program of up to $5 million of ordinary shares. It will take place in open market transactions or in privately negotiated transactions and may be made from time to time depending on market conditions, share price, trading volume and other factors. Such purchases will be made in accordance with all applicable securities laws and regulations.
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D.
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On November 3, 2014, 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. The dividend will be payable on December 3, 2014 to all of the Company's shareholders of record at the end of the trading day on the NASDAQ on November 17, 2014.
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19
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