SOURCE: RR Media

RR Media

March 02, 2016 09:37 ET

RR Media Reports Record Revenues of $140.3 Million for the Full-Year 2015

4Q 2015 Revenues Increased 19% to $39 Million; GAAP EPS for 4Q 2015 of $0.20 per Diluted Share, Compared to $0.09 per Diluted Share for 4Q 2014; Pending Merger With SES Platform Services Expected to Be Completed During Q2/Q3 2016

AIRPORT CITY BUSINESS PARK, ISRAEL--(Marketwired - Mar 2, 2016) -  RR Media (NASDAQ: RRM), a leading provider of global digital media services to the broadcast and media industries, today announced financial results for the fourth quarter and year ended December 31, 2015.

Avi Cohen, CEO of RR Media, commented, "In 2015, we significantly scaled our business by expanding our service offerings including the introduction of our unique service platform -- solaRR and entering new territories. We are already seeing the benefits of this expansion reflected in our full year financial results, with record revenues of $140.3 million and Adjusted EBITDA of $18.5 million. As a result, we generated $19.7 million in cash for the year, finishing the period with $18.8 million in cash and cash equivalents, providing a solid foundation from which to fuel future growth."

Mr. Cohen continued, "The fourth quarter saw nearly the full financial benefit of the Satlink and ESS acquisitions, including improved margins, as we completed the integration of both companies during the quarter within the expected time frame. These acquisitions complement the investments we made in our proprietary technologies."

"We are receiving positive market feedback for solaRR, our virtualized and scalable open services platform launched in 2015, which positions us as a first-class provider of a wide range of digital media services provided on premises as well as in the cloud. To augment this, we expanded our solaRR capabilities with the launch of solaRR Active which caters to the fast-growing sports market, a key focus area for RR Media. This revolutionary technology platform not only further distinguishes us from our competition, but also positions us to better service upper-tier customers, thereby generating higher volume orders and better margins. In the fourth quarter, two of these upper-tier customers started using solaRR. As a result of our new capabilities and increased market presence, we are attracting a greater number of larger customers, which provide even greater growth opportunities."

"Our recently announced merger with SES Platform Services highlights the value we have built in our business by providing RR Media shareholders a 52% premium to the share price prior to announcing the agreement. We expect to complete the merger during Q2/Q3 2016," concluded Mr. Cohen.

Fourth Quarter 2015 Highlights

  • Partnered with Pi Telecom to provide a new value-added online sports platform for sports organizations
  • Unveiled solaRR Active, a customized sports media service platform, which enables sports organizations to maximize exposure and increase revenues through a full range of media services
  • Integration of Satlink Communications and ESS completed and expected to positively impact margins in 2016
  • Strong positive cash flows from operations of $9.3 million, compared to $2.7 million in Q4 2014
  • Repaid $0.75 million of debt under the credit facilities this quarter, strengthening the balance sheet by reducing total debt to $13.5 million
  • Board declared a cash dividend of $0.07 per share, an aggregate amount of approximately $1.2 million, representing an annual dividend yield of 3.3%
     
(In Thousands) Q4 2015 Q4 2014
  Content Mgmt. & Distribution Services MSS   Total Content Mgmt. & Distribution Services MSS   Total
Revenues $35,990 $3,039   $39,029 $29,913 $2,889   $32,802
Gross profit $9,094 $401   $9,495 $7,559 $304   $7,863
Gross margin 25.3% 13.2%   24.3% 25.3% 10.5%   24.0%
                 

Fourth Quarter Financial Results

Revenues for the fourth quarter of 2015 were $39.0 million, an increase of 19% compared with $32.8 million in the fourth quarter of 2014. Revenues for the fourth quarter of 2015 benefited from the recently acquired businesses, ESS and Satlink Communications.

The Company reported $36 million of Content Management and Distribution Services revenue, excluding non-core revenue from MSS, an increase of 20% from $29.9 million in the fourth quarter last year. The Company reported $3.0 million of Mobile Satellite Services ("MSS") revenue, up from $2.9 million in the fourth quarter in the prior year.

Gross profit for the fourth quarter of 2015 was $9.5 million compared to $7.9 million for the fourth quarter of 2014. Gross margin for the fourth quarter of 2015 remained relatively flat at 24% compared to the fourth quarter of 2014. Gross margin for Content Management and Distribution Services remained flat at 25.3% compared to the same period last year, despite the contributions of Satlink and ESS, which historically have lower gross margins.

Net income attributable to shareholders for the fourth quarter of 2015 was $3.6 million, or $0.20 per fully diluted share, compared to $1.5 million, or $0.09 per fully diluted share, for the same period of 2014.

Adjusted EBITDA for the fourth quarter of 2015 was $6.1 million compared to $4.3 million in the fourth quarter of 2014. Adjusted EBITDA for the fourth quarter of 2015 and 2014 excludes non-cash equity-based compensation charge, amortization of acquired intangible assets, cost of sales related changes in fair value of currency conversion derivatives, acquisition related expenses and amortization of acquisition related prepaid compensation expenses, contingent consideration in respect of acquisition; and include the impact of fluctuations in foreign currency exchange rates.

Cash, cash equivalents and marketable securities as of December 31, 2015 was $18.8 million, compared with $22 million as of December 31, 2014. This reduction in cash reflects the acquisitions of Satlink Communications and ESS earlier in the year.

Full Year Financial Results

Revenues for the full year 2015 were $140.3 million, an increase of 6.9% compared with $131.2 million in the year 2014. Revenues for the full year of 2015 benefited from the acquisitions of ESS, which was completed on April 29, 2015, and acquisition of Satlink Communications which was completed on June 5, 2015.

The Company reported $128.1 million of Content Management and Distribution Services revenue, excluding non-core revenue from MSS, an increase of 6.9% from $119.8 million in the prior year period. The Company reported $12.3 million of Mobile Satellite Services ("MSS") revenue, up from $11.5 million in the year 2014.

Gross profit for the full year 2015 was $32.2 million compared to $30.1 million for the full year 2014. Gross margin for the full year 2015 remained flat year over year at 22.9%.

Net income attributable to shareholders for the full year 2015 was $7.8 million, or $0.44 per fully diluted share, compared to $5.1 million, or $0.29 per fully diluted share, for the same period of 2014.

Adjusted EBITDA for the full year 2015 was $18.5 million compared to $17.2 million in the full year 2014. Adjusted EBITDA for the years 2015 and 2014 excludes non-cash equity-based compensation charge, amortization of acquired intangible assets, cost of sales related changes in fair value of currency conversion derivatives, acquisition related expenses and amortization of acquisition related prepaid compensation expenses, contingent consideration in respect of acquisition; and include the impact of fluctuations in foreign currency exchange rates.

Backlog to be delivered in the next 12 months as of December 31, 2015 remained flat at $101 million compared with $104 million in September 30, 2015. Total back log is at $244 million.

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 3.3%. The dividend is payable on March 30, 2016 to all of the Company's shareholders of record at the end of the trading day on NASDAQ on March 14, 2016.

Merge with SES Platform Services
On February 26, 2016, RR Media announced that it has agreed to be acquired by SES (NYSE Euronext Paris and Luxembourg Stock Exchange: SESG) and will merge its activities with SES Platform Services ("SES PS") to form a new world-leading provider of media solutions.

SES will acquire a 100% ownership of RR Media, paying $13.291 per share, or a 52% premium to the closing price of the Company's shares on February 25, 2016. This corresponds to an Enterprise Value of $242 million. The acquisition of RR Media by SES S.A. has been approved by the Boards of Directors of both companies, and is subject, among others, to regulatory approvals and the approval by the general meeting of shareholders of RR Media, which are expected to be completed in the second or third quarter of 2016.

Once the transaction is completed, RR Media and SES PS will join forces to create a new, stand-alone world-leading media services provider. The new organisation will offer full continuity and enhanced service to SES PS and RR Media's existing customers.

Conference Call Cancelled
In light of the pending merger with SES PS, RR Media has cancelled the conference call to discuss its fourth quarter 2015 results and the outlook for its business.

About RR Media

RR Media (NASDAQ: RRM) works in partnership with the world's leading media players to transform content into valuable media assets. 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 1,000 broadcasters, content owners, sports leagues and right holders. Every day, the company manages and delivers over 24,000 hours of broadcast content, over 4,000 hours of online video and VOD content and over 350 hours of premium sports and live events. 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 include, but are not limited to, statements about the expected timing of the transaction, the satisfaction or waiver of any conditions to the proposed transaction, anticipated benefits, growth opportunities and other events relating to the proposed transaction, projections about RR Media's business and its future revenues, expenses and profitability. 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 (1) RR Media may be unable to obtain required regulatory approvals or satisfy other conditions to the closing of the proposed transaction; (2) the proposed transaction may involve unexpected costs, liabilities or delays; (3) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; (4) the ability to recognize benefits of the proposed transaction; (5) risks that the proposed transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the proposed transaction; (6) impact of the transaction on relationships with customers, distributors and suppliers and (7) other risks to consummation of the transaction, including the risk that the transaction will not be consummated within the expected time period or at all, as well as 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.

ADDITIONAL INFORMATION

In connection with the proposed transaction, RR Media intends to mail a proxy statement to its shareholders and furnish a copy of the proxy statement with the SEC on Form 6-K. Shareholders of RR Media are urged to read the proxy statement and the other relevant material when they become available because they will contain important information about RR Media, SES, the proposed transaction and related matters. Shareholders are urged to carefully read the proxy statement and other relevant materials when they become available before making any voting or investment decision with respect to the proposed transaction. The proxy statement (when available) may be obtained for free at the SEC's website at www.sec.gov. In addition, the proxy statement will be available, without charge, at RR Media's website at www.rrmedia.com.

This press release is neither a solicitation of proxy, an offer to purchase nor a solicitation of an offer to sell shares of RR Media.

 
 
RR Media Ltd
Interim Condensed Consolidated Statements of Income
In thousands, except share data
 
  Three months ended       Twelve months ended  
    December 31       December 31       December 31       December 31  
    2015       2014       2015       2014  
    (unaudited)       (unaudited)       (unaudited)       (unaudited)  
Revenues                              
Content Mgmt. & distribution services   35,990       29,913       128,093       119,750  
Mobile satellite services   3,039       2,889       12,252       11,476  
Total revenues $ 39,029     $ 32,802     $ 140,345     $ 131,226  
                               
Cost of revenues                              
Content Mgmt. & distribution services   26,896       22,354       97,462       91,215  
Mobile satellite services   2,638       2,585       10,719       9,961  
Total cost of revenues $ 29,534     $ 24,939     $ 108,181     $ 101,176  
                               
Gross profit $ 9,495     $ 7,863     $ 32,164     $ 30,050  
                               
Operating expenses                              
                               
Sales and marketing   3,763       3,671       15,032       13,329  
General and administrative   2,511       1,846       9,575       9,308  
Other expenses (income)   (599 )     236       (1,749 )     236  
                               
Total operating expenses $ 5,675     $ 5,753     $ 22,858     $ 22,873  
                               
Operating income $ 3,820     $ 2,110     $ 9,306     $ 7,177  
                               
Financial expenses, net and other   (464 )     (180 )     (1,137 )     (541 )
                               
Income before taxes on                              
income $ 3,356     $ 1,930     $ 8,169     $ 6,636  
                               
Income taxes   (271 )     373       383       1,581  
                               
Net income $ 3,627     $ 1,557       7,786     $ 5,055  
                               
Net loss attributable to non- controlling interest   16       46       (22 )     (95 )
Net income attributable to shareholders $ 3,611     $ 1,511     $ 7,808     $ 5,150  
                               
Earnings per ordinary share attributable to shareholders
 
Basic earnings per share $ 0.21   $ 0.09   $ 0.45   $ 0.30
                       
Diluted earnings per share $ 0.20   $ 0.09   $ 0.44   $ 0.29
                       
Weighted average number of shares used to compute            
                       
Basic earnings per share   17,401,659     17,387,477     17,401,264     17,365,608
                       
Diluted earnings per share   17,817,126     17,706,736     17,711,095     17,671,975
                       
                       
                       
RR Media Ltd  
Reconciliation of GAAP to Non-GAAP Financial Information  
In thousands  
                         
    Three months ended December 31     Twelve months ended December 31  
    2015     2014     2015     2014  
    (unaudited)     (unaudited)     (unaudited)     (unaudited)  
Reconciliation of GAAP Net Income to Non-GAAP Net Income:                                
GAAP Net income attributable to shareholders   $ 3,611     $ 1,511     $ 7,808     $ 5,150  
Adjustments to reconcile GAAP net income to non-GAAP net income:                                
Non-cash equity-based compensation charge     148       173       686       694  
Amortization of acquired intangible assets     222       155       906       671  
Changes in fair value of currency conversion derivatives             (130 )             (345 )
Acquisition related expenses     901       -       1,801       -  
Amortization of acquisition related prepaid compensation expenses     20       42       146       168  
Reorganization expenses             236               236  
Capital Loss     35       -       35       -  
Contingent consideration in respect of acquisition     (1,500 )     (270 )     (3,550 )     (270 )
Income tax effect of non-GAAP adjustments     (189 )     (25 )     (121 )     (160 )
                                 
Non-GAAP net income attributable to shareholders   $ 3,248     $ 1,692     $ 7,711     $ 6,144  
                                 
    Three months ended December 31     Twelve months ended December 31  
    2015     2014     2015     2014  
    (unaudited)     (unaudited)     (unaudited)     (unaudited)  
                                 
Reconciliation of GAAP Operating Income to Non-GAAP operating income:                                
Operating income   $ 3,820     $ 2,110     $ 9,306     $ 7,177  
Adjustments to reconcile GAAP operating income to Non-GAAP operating income:                                
Non-cash equity-based compensation charge     148       173       686       694  
Amortization of acquired intangible assets     222       155       906       671  
Cost of sales related changes in fair value of                                
currency conversion derivatives             (5 )             (239 )
Acquisition related expenses     901       -       1,801       -  
Reorganization expenses             236               236  
Contingent consideration in respect of acquisition     (1,500 )     (530 )     (3,550 )     (530 )
Amortization of acquisition related prepaid                                
compensation expenses     20       42       146       168  
                                 
Non-GAAP Operating income   $ 3,611     $ 2,181     $ 9,295     $ 8,177  
                                 
                                 
                                 
RR Media Ltd  
Reconciliation of GAAP to Non-GAAP Financial Information  
In thousands  
   
    Three months ended December 31     Twelve months ended December 31  
    2015   2014     2015   2014  
    (unaudited)   (unaudited)     (unaudited)   (unaudited)  
Reconciliation of GAAP Operating Income to EBITDA:                            
                             
Operating income   $ 3,820   $ 2,110     $ 9,306   $ 7,177  
Adjustments to reconcile GAAP Operating                            
Income to EBITDA:                            
Non-cash equity-based compensation charge     148     173       686     694  
Depreciation and amortization     2,735     2,294       10,143     9,675  
Cost of sales related changes in fair value of                            
currency conversion derivatives     -     (5 )           (239 )
Acquisition related expenses     901     -       1,801     -  
Amortization of acquisition related prepaid compensation expenses     20     42       146     168  
                             
EBITDA   $ 7,624   $ 4,614     $ 22,082   $ 17,475  
                             
    Three months ended December 31   Twelve months ended December 31
    2015   2014   2015   2014
    (unaudited)   (unaudited)   (unaudited)   (unaudited)
Reconciliation of Non-GAAP Operating Income to adjusted EBITDA:                        
                         
Non-GAAP Operating income   $ 3,611   $ 2,181   $ 9,295   $ 8,177
Adjustments to reconcile Non-GAAP operating income to Adjusted EBITDA:                        
Depreciation and amortization     2,513     2,139     9,237     9,004
                         
Adjusted EBITDA   $ 6,124   $ 4,320   $ 18,532   $ 17,181
                         
                         
                         
RR Media Ltd  
Interim Condensed Consolidated Statements of Income (Non-GAAP results)  
In thousands, except share data  
   
    Three months ended     Twelve months ended  
    December 31     December 31     December 31     December 31  
    2015     2014     2015     2014  
    (unaudited)     (unaudited)     (unaudited)     (unaudited)  
Revenues                                
Content Mgmt. & distribution services     35,990       29,913       128,093       119,750  
Mobile satellite services     3,039       2,889       12,252       11,476  
Total revenues   $ 39,029     $ 32,802     $ 140,345     $ 131,226  
                                 
Cost of revenues                                
Content Mgmt. & distribution services     26,883       22,345       97,400       91,397  
Mobile satellite services     2,638       2,585       10,719       9,961  
Cost of revenues   $ 29,521     $ 24,930     $ 108,119     $ 101,358  
                                 
Gross profit   $ 9,508     $ 7,872     $ 32,226     $ 29,868  
                                 
Operating expenses                                
                                 
Sales and marketing     3,493       3,454       13,861       12,416  
General and administrative     2,404       2,237       9,070       9,275  
                                 
Total operating expenses   $ 5,897     $ 5,691     $ 22,931     $ 21,691  
                                 
Operating income   $ 3,611     $ 2,181     $ 9,295     $ 8,177  
                                 
Financial income                                
(expenses), net     (429 )     (45 )     (1,102 )     (387 )
                                 
Income before taxes on                                
income   $ 3,182     $ 2,136     $ 8,193     $ 7,790  
                                 
Income taxes     (82 )     398       504       1,741  
                                 
Net income   $ 3,264     $ 1,738     $ 7,689     $ 6,049  
                                 
Net loss attributable to non- controlling interest     16       46       (22 )     (95 )
Net income attributable to shareholders   $ 3,248     $ 1,692       7,711     $ 6,144  
                                 
Earnings per ordinary share attributable to shareholders
 
Basic earnings per share   $ 0.19   $ 0.10   $ 0.44   $ 0.35
                         
Diluted earnings per share   $ 0.18   $ 0.10   $ 0.43   $ 0.35
                         
Weighted average number of shares used to compute
 
             
Basic earnings per share     17,401,659     17,387,477     17,401,264     17,365,608
                         
Diluted earnings per share     17,817,126     17,706,736     17,711,095     17,671,975
                         
                         
                         
RR Media Ltd
Interim Condensed Consolidated Balance Sheets
In thousands, except share data
    December 31   December 31
    2015   2014
    (unaudited)   (unaudited)
Current assets          
Cash and cash equivalents   18,762   $ 13,001
Marketable securities and short term investments   -     8,970
Accounts receivable (net of provision for doubtful accounts of $4,361 and $6,938 and as of December 31, 2015 and December 31, 2014, respectively)   29,795     23,457
Other receivable   3,999     2,343
Deferred taxes   1,888     2,038
Prepaid expenses   3,831     2,839
           
Total current assets   58,275     52,648
           
Long-term prepaid expenses   2,535     3,156
Long-term land lease prepaid expenses   7,299     7,380
Assets held for employee severance payments   1,962     1,892
Fixed assets, net   54,122     45,669
Goodwill   30,044     11,286
Intangible assets, net   9,616     5,528
           
Total long term assets   105,578     74,911
           
Total assets   163,853   $ 127,559
           
           
           
RR Media Ltd  
Interim Condensed Consolidated Balance Sheets (cont'd)  
   
    December 31     December 31  
    2015     2014  
    (unaudited)     (unaudited)  
Liabilities and shareholders' equity                
                 
Current liabilities                
Account payable:                
  Trade   $ 30,584     $ 18,414  
  Other     6,819       5,482  
Current maturities of long term loan and short term credit     3,009       -  
Deferred income     11,483       4,867  
                 
Total current liabilities     51,895       28,763  
                 
Long-term liabilities                
Deferred income     8,151       7,714  
Long term loans     10,500       -  
Liabilities in respect of employee severance payments and others     3,419       2,993  
Contingent consideration in respect of acquisition     422       3,550  
Deferred taxes     4,398       3,702  
                 
Total long-term liabilities     26,890       17,959  
                 
Total liabilities     78,785       46,722  
                 
Shareholders' equity                
Share capital                
Ordinary share NIS 0.01 par value each (27,000,000 authorized as of December 31, 2015, abd December 31, 2014. 17,399,939 shares issued and fully paid as of December 31, 201517,392,072 shares issued and fully paid as of December 31, 2014     41       40  
Additional paid in capital     56,030       54,572  
Retained earnings     30,338       27,400  
Treasury stock     (146 )     (146 )
Accumulated other comprehensive income (loss)     (1,078 )     (934 )
                 
Total shareholders' equity     85,185       80,932  
                 
Non - controlling interest     (117 )     (95 )
                 
Total equity     85,068       80,837  
                 
Total liabilities and equity   $ 163,853     $ 127,559  
                 
                 
                 
RR Media Ltd  
Interim Condensed Consolidated Statements of Cash Flows  
In thousands  
                         
    Three months ended December 31     Twelve months ended December 31  
    2015     2014     2015     2014  
    (unaudited)     (unaudited)     (unaudited)     (unaudited)  
                                 
Net income   $ 3,627     $ 1,557     $ 7,786     $ 5,055  
                                 
Adjustments required to reconcile net income to net cash provided by operating activities     1,892       2,527       9,456       11,449  
                                 
Changes in assets and liabilities     3,829       (1,376 )     2,449       (6,011 )
                                 
                                 
Net cash provided by operating activities     9,348       2,708       19,691       10,493  
                                 
Cash flows from investing activities                                
Purchase of fixed assets and intangible assets     (2,224 )     (2,183 )     (9,831 )     (8,389 )
Acquisitions of subsidiaries, net of cash acquired     -       -       (20,726 )     -  
Other investing activities     -       289       9,100       1,261  
Net cash used in investing activities     (2,224 )     (1,894 )     (21,457 )     (7,128 )
                                 
Cash flows from financing activities                                
Dividend paid     (1,218 )     (1,218 )     (4,870 )     (3,473 )
Proceeds for long term loan     -       -       15,000       -  
Purchase of treasury stock     -       (146 )     -       (146 )
Loan payment     (750 )     -       (1,500 )     -  
Bank net credit     (471 )     -       (595 )     -  
Net cash used in financing activities     (2,439 )     (1,364 )     8,035       (3,619 )
                                 
                                 
Translation adjustment on cash and cash equivalents     (195 )     (782 )     (508 )     (910 )
                                 
Increase (decrease) in cash and cash Equivalents     4,490       (1,332 )     5,761       (1,164 )
                                 
Balance of cash and cash equivalents at beginning of period     14,272       14,333       13,001       14,165  
                                 
Balance of cash and cash equivalents at end of period   $ 18,762     $ 13,001     $ 18,762     $ 13,001  

Contact Information

  • Company Contact:
    Shmulik Koren
    CFO
    Tel: +972 3 928 0777
    Email: Email Contact

    Investor Contact:
    KCSA Strategic Communications
    Garth Russell / Elizabeth Barker
    Tel: 212-896-1250 / 212-896-1203
    Email: Email Contact