Globecomm Systems Inc. (GCOM)
F1Q10 Earnings Call
November 05, 2009; 10:00 am ET
David Hershberg - Chairman & Chief Executive Officer
Keith Hall - President & Chief Operating Officer
Andrew Melfi - Chief Financial Officer
Matthew Byron - Corporate Vice President
Steve Ferranti - Stephens Inc.
James McIlree - Collins Stewart
Matthew Crews - Noble financial
Rich Valera - Needham & Co.
Dick Ryan - Dougherty
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Thank you, [Tasha]. Good morning everyone and welcome to the Globecomm Systems fiscal 2010 first quarter earnings conference call. Joining me today from the company are Chairman and CEO, David Hershberg; President and COO, Keith Hall and our Chief Financial Officer, Andrew Melfi.
Last night after the closing bell, Globecomm issued its fiscal 2010 first quarter earnings press release. Including in the release is management’s expectation for the fiscal year ended June 30, 2010, which includes first quarter actual results and the company’s current expectations for the next three quarters.
In the event, you have not received or not seen a copy of the release, it is posted on the Globecomm Systems’ website at www.globecommsystems.com, or you can contact me at 631-457-1301 and I will send a copy to you.
Comments made during this conference call may contain projections or other forward-looking statements regarding future events or the future financial performance of Globecomm Systems. These statements are only projections and reflect the current beliefs and expectations of the company. Actual events or results may differ materially. With that said, it is routine for internal projections and expectations to change as quarters progress.
All forward-looking statements are based on information available to the company on the date hereof and the company assumes no obligation to update such statements. Please refer to the documents the company files from time to time with the SEC, specifically the company’s Annual Report on Form 10-K, its quarterly reports on Form 10-Q, its current reports on Form 8-K and the Safe Harbor language contained in the company’s press releases.
These documents contain and identify important factors that could cause the company’s actual results to differ materially from those contained in its projections or forward-looking statements, which the company urges all investors to consider. Globecomm undertakes no obligation to publicly release the revisions to such forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Please note that this call is being recorded on Thursday, November 05, 2009, contains time-sensitive information, and will be available as a webcast replay for at least nine months on the Investor Relations section of the Globecomm Systems website and as a phone replay at 1-888-203-1112 for domestic callers, or 719-457-0820 for international callers with an access code of 7604430.
At this point, I’d like to turn the call over to our Chairman and CEO, Dave Hershberg. Dave.
Thank you Matt and welcome to our fiscal 2010 first quarter earnings conference call. As you know over the years we’ve been talking about increasing our service revenue and I’m happy to report that we had record services revenues for the first quarter, that help the company achieve its 22 consecutive profitable quarter and meeting our fiscal 2010 plan.
We finished the quarter with approximately $50 million and no debt. We continue to see record consolidated revenues of $215 million to $225 million for this fiscal year and service revenues of approximately $125 million and a record EBITDA of approximately $20 million.
Andy will walk through the financial details later in the call. The company continues to identify certain vertical markets that we believe the company’s suite of products and services conserved very well today and in the future. Our acquisition team is busy continually building a pipeline of perpetual targets mostly in the service area.
We’re looking at deals that would be easily absorbed through our existing cash position and will give company an immediate footprint in the vertical and we are adding management now have and also we are hoping these companies will also be accretive immediately after repurchase them.
As we have been reporting, our infrastructure business was down last fiscal year, but as you can see from recent press releases, we’re beginning to see improvement in our infrastructure bookings. With some programs that we’ve been bidding where now things funded.
Some of the larger service base, we are making also have significant infrastructure content. Recently, our government group finished development on new came and experienced satellite terminals to address the recently launched WTS system. This goes well going forward with our robust service business allowing us to provide improved guidance to share comparing with last year.
Keith Hall, our President will now give an overview of the business outlook. Keith.
Thanks Dave, good morning all. It’s been a busy and exciting few months since we last spoke and I’ve enjoyed working closely with the Globecomm management team on the execution of our Managed Network Services strategy. The team executed very well in achieving our first quarter objectives and in setting the stage to continue the positive trends.
Q1 consolidated revenues, were up year-over-year to $47.7 million and services revenues increased to a record $28.6 million. As Dave highlighted, we’ve remain on target for a record year revenue and EBITDA. The increase in service revenue was driven in part, by the company’s acquisitions of Mach 6 and Telaurus, with a combined full quarter revenue contribution of approximately $8 million. Infrastructure revenues were down in Q1 year-over-year, but we had a strong bookings quarter and we continued to see opportunities over back up on the commercial side of the business including in the Global Broadcast Market.