Globecomm Systems, Inc. reported a 3.2% decline in revenues to $160.9 million for fiscal 2013 six months ended December 31, 2012 compared to $166.2 million in the same period last year.
Globecomm said net income was $6.5 million or $0.28 of diluted net income per common share compared to net income of $18.6 million or $0.82 of diluted net income per common share in the same period last year.
David Hershberg, Globecomm Chairman and CEO, said it’s been a challenging year due to a number of delays and uncertainties in awarding US Government contracts. He said he believes, however, that when the budget is passed, the company will be in a better position to move forward.
“The company’s diversified portfolio is helping to mitigate the effects of the current reduction in Government spending resulting from troop draw downs in Iraq and Afghanistan. While we continue to face some U.S. Government budget and economic headwinds, we remain focused on executing on our overall business plan and vision as we explore strategic alternatives to maximize shareholder value,” he said.
Keith Hall, President and COO, added the company continues to invest in a number of strategic initiatives including Tempo Enterprise Media Platform and the Hosted Switch platforms, as the company continues to increase the value proposition of its global network and our vision as an end to end data management services company.
“We continue to leverage this value proposition to enter new markets, as we diversify our customer base and build our recurring revenue streams,” Hall said. “Most recently we have begun to leverage our capabilities within the Cyber Security arena. As Dave points out, this diversity continues to help mitigate the contraction of our business in Iraq and Afghanistan. Looking forward, I remain excited about our opportunities to grow.”
Globecomm revenues from services decreased by 7.2% to $97.3 million, compared to $104.9 million in the same period last year due to the company’s reduction of services to government in Iraq. Revenues from infrastructure solutions rose by 3.7% to $63.6 million against $61.3 million in the same period last year. Globecomm said the increase was primarily driven by a major government program.
The company also recorded a gain for the change in fair value of the ComSource earn-out as a result of changes in ComSource’s actual results and forecasted performance. Globecomm said the change in the fair value of the earn-out resulted in a $10.6 million ($0.47 per diluted share) gain to net income.
Globecomm said it expects consolidated revenues to be between $320 and $340 million and services segment revenues to be between $200 and $210 million for fiscal year 2013. It added it also expects GAAP diluted net income per common share to be between $0.66 and $0.71 and adjusted EBITDA to be between $40 and $42 million for 2013.
