RRSat Sets Record Results With 41% Increase Revenues and 83% Increase in Adjusted Net Income in First Quarter 2007

RRSat Sets Record Results With 41% Increase Revenues and 83% Increase in Adjusted Net Income in First Quarter 2007

Highest Quarter Performance in Company History

OMER, Israel, May 8/PRNewswire-FirstCall/ --

Main Highlights (compared to first quarter 2006)

- Revenues increased 41% to $13.3 million

- Adjusted net income up 83% to $2.7 million, or $0.16 per share

- GAAP net income up 68% to $2.6 million, or $0.15 per share

- Adjusted EBITDA up 28% reaching $3.5 million

RRSat Global Communications Network Ltd. (NASDAQ: RRST), a rapidly growing provider of comprehensive content management and global distribution services to the television and radio broadcasting industries, today announced its financial results for the three months ended March 31, 2007.

Revenues for the first quarter of 2007 totaled $13.3 million, an increase of 40.9% compared to $9.4 million in the first quarter of 2006.

Operating income for the first quarter of 2007 totaled $2.7 million, a 22.6% increase compared to $2.2 million, as reported in the first quarter of 2006.

Adjusted net income for the first quarter of 2007 totaled $2.7 million, or 20.4% of revenues, an increase of 83.2% compared to $1.5 million, or 15.7% of revenues, in the first quarter of 2006. Adjusted net income per diluted share totaled $0.16, compared to $0.11 in the first quarter of 2006. Adjusted EBITDA for the first quarter of 2007 totaled $3.5 million, an increase of 28.4% compared to $2.7 million in the first quarter of 2006.

Net income on a GAAP basis for the first quarter of 2007 was $2.6 million, or 19.8% of revenues, an increase of 68.2% compared to $1.6 million, or 16.6% of revenues, in the first quarter of 2006. Net income per diluted share on a GAAP basis was $0.15, compared with $0.12 in the first quarter of 2006.

David Rivel, CEO of RRSat commented, "We start 2007 with another strong quarter for the company in terms of record top and bottom line performance, and the best in the company's history. We experienced strong double digit growth and healthy cash generation, which provide us with the necessary resources to continue to grow and take the company to the next level."

Mr. Rivel added, "During the first quarter we commenced 17 new contracts - 8 of which were with new customers that chose RRSat to extend their global reach, and 9 with existing customers that expanded service offerings to take advantage of our broad global satellite network to transmit their channels to new regions and households spanning the globe. This quarter was also a key quarter in terms of further enhancing and broadening our offering as we signed several new partnerships with leading satellite organizations in Europe, the US and Asia, and laid additional fiber infrastructure in key locations such as Moscow, New York and Washington DC."

"Looking ahead, we expect the remainder of 2007 to continue to be an exciting year for RRSat in terms of strong organic growth, as well as potential for new and diverse complementary growth opportunities in the US and Europe, through potential acquisitions and partnerships. We are increasing our annual 2007 revenue guidance to the range of $55.5 - $56.0 million, with second quarter revenues expected to be in the range of $13.5 - $13.8 million," concluded Mr. Rivel

Conference Call Information

Conference call scheduled later today, May 8, 2007 at 10am EST. On the call, Mr. David Rivel, Founder & CEO and Mr. Gil Efron, CFO will review and discuss the results and will be available to answer investor questions.

To participate, please call one of the following teleconferencing numbers. Please begin placing your calls at least 10 minutes before the conference call commences. If you are unable to connect using the toll-free numbers, please try the international dial-in number.

US Dial-in Number: +1-888-668-9141

UK Dial-in Numbers: 0-800-917-5108

Israel Dial-in Number: 03-918-0610

International Dial-in Number: +972-3-918-0610

A replay of the call will be available from the day after the call. The link to the replay will be accessible from RRSat's website at: www.rrsat.com. In addition, a telephone replay of the call will be available for two days following the call. The replay numbers are: +1-888-254-7270 (US); 0-800-917-4256 (UK) and +972-3-925-5927 (International).

Use of Non- GAAP Financial Measures

RRSat uses two financial measures, adjusted net income and adjusted EBITDA, which are non-GAAP financial measures. RRSat believes that both non-GAAP financial measures are principal indicators of the operating and financial performance of its business. Adjusted net income is calculated based on the net income in our financial statements excluding non-cash equity-based compensation charges recorded in accordance with SFAS 123R, the non-cash income (loss) reflecting changes in the fair value of embedded currency conversion derivatives resulting from the application of SFAS 133 and the resulting income tax (increase) decrease, and one-time expenses in the fourth quarter of 2006 relating to the IPO.

Adjusted EBITDA is calculated by deducting from net income interest and marketable securities income, currency fluctuation and other financial income (expenses), net, changes in fair value of embedded currency conversion derivatives, other income (expenses), net, and adding income taxes and one-time expenses in the fourth quarter of 2006 relating to the IPO, non-cash equity-based compensation charge, and depreciation and amortization. Management believes the non-GAAP financial measures (adjusted net income and adjusted EBITDA) provided are useful to investors' understanding and assessment of RRSat's on-going core operations and prospects for the future. Management uses these non-GAAP financial measures in order to evaluate the performance of the company. However, such measures should not be considered in isolation or as substitutes for results prepared in accordance with GAAP. In addition, RRSat's adjusted EBITDA may not be comparable to adjusted EBITDA as reported by other companies.

Reconciliations of the non-GAAP measures (adjusted net income and adjusted EBITDA) to net income, the most comparable GAAP measure, are provided in the schedules attached to this release.

About RRSat Global Communications Network Ltd.

RRSat Global Communications Network Ltd. (NASDAQ: RRST) provides global, comprehensive, content management and distribution services to the rapidly expanding television and radio broadcasting industries. Through its proprietary "RRSat Global Network," composed of satellite and terrestrial fiber optic transmission capacity and the public Internet, RRSat is able to offer high-quality and flexible global distribution services for content providers. RRSat's comprehensive content management services include producing and playing out TV content as well as providing satellite newsgathering services (SNG). RRSat concurrently provides these services to more than 365 television and radio channels, covering more than 150 countries. Visit the company's website www.rrsat.com for more information.

Forward Looking Statements

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) the growth of our business and the television and radio broadcasting industries, (ii) our expectation to sell additional services to our existing client base, and (iii) our ability to report future successes. 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, refer to our SEC filings and the amendments thereto, including our Registration Statement on Form F-1 filed on October 31, 2006 and our Current Reports on Form 6-K.

          RRSat Global Communications Network Ltd. and its subsidiary company,      Consolidated Statements of Operations      In thousands, except share data                                         Three months ended       Year ended                                      March 31,    March 31,   December 31,                                           2007        2006           2006                                    (Unaudited)  (Unaudited)      (Audited)       Revenues                          $ 13,275     $ 9,423       $ 43,284       Cost of revenues                     8,470       5,913         27,451       Gross profit                         4,805       3,510         15,833       Operating expenses       Sales and marketing                    662         490          1,831       General and administrative           1,435         812          3,588       One time fees associated     with the IPO                             -           -          1,000       Total operating expenses             2,097       1,302          6,419       Operating income                     2,708       2,208          9,414       Interest and marketable     securities income                      569          55            450       Currency fluctuation and     other financing income, net              8           2            374       Changes in fair value of     embedded currency     conversion derivatives                  28         124            243       Other income, net                        -           -              4       Income before taxes on income        3,313       2,389         10,485       Income taxes                           688         828          3,180       Net income                         $ 2,625     $ 1,561        $ 7,305         Income per ordinary share        Basic income per ordinary shares      0.15        0.12           0.53       Diluted income per ordinary     share                                 0.15        0.12           0.53       Weighted average number of     ordinary     shares used to compute basic     income per     ordinary share                  17,242,300  13,047,300     13,746,467       Weighted average number of     ordinary     shares used to compute diluted     income     per ordinary share               17,313,715  13,129,200    13,793,694       RRSat Global Communications Network Ltd and its subsidiary company,      Reconciliation of Adjusted Net Income and Adjusted EBITDA      Unaudited, in thousands                                       Three months ended Year ended                                        March     March   December                                           31,       31,        31,                                         2007      2006       2006       Reconciliation of Net Income      to Adjusted Net Income:     Net income - as                       reported                         $ 2,625   $ 1,561    $ 7,305     Non-cash equity-based      compensation charge                  105         3        117     Changes in fair value of      embedded currency conversion     derivatives                          (28)     (124)      (243)     Change in deferred tax      on embedded derivatives                8        38         71     One time Management fees              -         -       1,000     Taxes on one time      management fees                       -         -        (155)     Adjusted net       income                             2,710     1,478      8,095                                              Three months ended  Year ended                                             March    March    December                                             31,         31,         31,                                           2007        2006        2006       Reconciliation of Net Income      to Adjusted EBITDA:     Net income - as                         reported                           $ 2,625     $ 1,561     $ 7,305     Interest and marketable      securities (income)                   (569)        (55)       (450)     Currency fluctuation and      other financial (income) expenses,      net                                     (8)         (2)       (374)     Changes in fair value of      embedded currency conversion     derivatives                            (28)       (124)       (243)     Other expenses (income), net             -           -          (4)     Income tax     expense                                688         828       3,180     One time Management fees                 -           -       1,000     Non-cash equity-based      compensation charge                    105           3         117     Depreciation and amortization          670         500       2,274     Adjusted     EBITDA                               3,483       2,711      12,805         RRSat Global Communications Network Ltd. and its subsidiary company,      Consolidated Balance Sheets      In thousands, except share data                                                       March 31, December 31,                                                          2007         2006                                                    (Unaudited)    (Audited)        Current assets     Cash and cash equivalents                        $ 24,812     $ 51,393     Marketable securities                              13,335        1,454     Accounts receivable:     Trade (net of provision for doubtful     account of $ 1,228     and $ 987 as of March 31, 2007 and     December 31,     2006, respectively)                                 9,450       10,187     Other                                                 964          797     Fair value of embedded currency conversion                 derivatives                                           704          743     Related parties                                       145           64     Deferred taxes                                        245          184     Prepaid expenses                                      941          215       Total current assets                               50,596       65,037       Deposits and long-term receivables                    848        1,018       Marketable securities                              16,575            -       Assets held for employee severance                         payments                                              678          626       Fixed assets, at cost, less accumulated     depreciation     and amortization                                   12,553       12,452       Total assets                                     $ 81,250     $ 79,133        RRSat Global Communications Network Ltd. and its subsidiary company,      Consolidated Balance Sheets (cont'd)      In thousands, except share data                                                       March 31, December 31,                                                          2007         2006                                                    (Unaudited)    (Audited)      Liabilities and shareholders' equity       Current liabilities     Account payable:     Trade                                             $ 4,257      $ 4,488     Other                                               1,857        1,845     Fair value of embedded currency conversion                 derivatives                                           343          410     Related parties                                        30           27     Deferred income                                     3,444        3,992       Total current liabilities                           9,931       10,762       Long-term liabilities     Deferred income                                     3,985        3,945     Liability in respect of employee severance                 payments                                              820          660     Deferred taxes                                        439          421       Total long-term liabilities                         5,244        5,026       Total liabilities                                  15,175       15,788       Shareholders' equity     Share capital     Ordinary share NIS 0.01 par value each     (20,000,000     authorized as of March 31, 2007 and December     31, 2006,     17,242,300 shares issued and fully paid as     of     March 31, 2007 and December 31, 2006)                  40           40     Additional paid in capital                         51,385       51,280     Retained earnings                                  14,650       12,025       Total shareholders' equity                       $ 66,075     $ 63,345       Total liabilities and shareholders' equity       $ 81,250     $ 79,133        RRSat Global Communications Network Ltd. and its subsidiary company,      Consolidated Statements of Cash Flows      In thousands                                                 Three months ended  Year ended                                                 March 31,  March 31, December                                                                       31,2006                                                    2007       2006                                                      (Unaudited) (Unaudited) (Audited)         Cash flows from operating activities     Net income                                   $ 2,625   $ 1,561   $ 7,305     Adjustments required to reconcile net     income to net cash     provided by operating activities       Depreciation and amortization                    670       500     2,274     Provision for losses in account receivable       241         -       618     Deferred taxes                                   (43)      (24)       32     Changes in liability for employee severance           payments, net                                    108        68        23     Capital gains on sale of fixed assets, net         -         -        (1)     Interest on securities held to maturity         (154)     Expenses in relation of options granted          105         3       117     Changes in fair value of embedded currency     conversion     derivatives                                      (28)     (124)     (243)       Changes in assets and liabilities:     Decrease (increase) in marketable                  securities, net                               (3,124)        32     (232)     Decrease (increase) in account receivable -           trade                                            496       (652)  (5,180)     Increase in related parties, net                 (78)         -      (37)     Decrease (increase) in account receivable -          other                                           (167)        16       25     Decrease (increase) in prepaid expenses         (726)      (47)      127     Increase (decrease) in deposits and                   long-term receivables                            170         2      (227)     Increase (decrease) in account payables         (219)     2,342     1,912     Increase (decrease) in deferred income          (508)    (1,191)    3,306       Net cash (used in) provided by operating      activities                                    $ (632)   $ 2,486   $ 9,819         RRSat Global Communications Network Ltd. and its subsidiary company,      Consolidated Statements of Cash Flows (cont'd)      In thousands                                          Three months ended     Year ended                                       March 31.   March 31.  December 31.                                           2007        2006          2006                                     (Unaudited) (Unaudited)     (Audited)       Cash flows from investing      activities     Investment in fixed assets          $ (771)   $ (2,123)     $ (5,903)     Investment in securities held      to maturity                        (25,178)          -             -     Proceeds from sale of      fixed assets                             -           -             1       Net cash used in investing      activities                         (25,949)     (2,123)       (5,902)       Cash flows from financing      activities     Dividend paid                          $ -         $ -      $ (1,975)     Proceeds from issuance of      ordinary shares,     net of     offering costs of $ 5,046                -           -        47,391       Net cash provided by      financing                                   activities                             $ -         $ -      $ 45,416       Increase (decrease) in     cash and cash equivalents        $ (26,581)      $ 363      $ 49,333       Balance of cash and cash      equivalents at     beginning     of period                           51,393       2,060         2,060       Balance of cash and cash      equivalents at     end     of period                         $ 24,812     $ 2,423      $ 51,393       A. Supplementary cash flow      information       Interest paid                            -           -             1     Income taxes paid                  $ 1,008       $ 753       $ 2,941  

          Company Contact Information:      Gil Efron, CFO,      Tel: +972-8-861-0000,      investors@rrsat.com;       External Investor Relations Contacts:      Ehud Helft / Kenny Green,      Tel: +1-646-201-9246,      info@gkir.com  

Source: RRSat Global Communications Network Ltd

Company Contact Information: Gil Efron, CFO, Tel: +972-8-861-0000, investors@rrsat.com; External Investor Relations Contacts: Ehud Helft / Kenny Green, Tel: +1-646-201-9246, info@gkir.com

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