RRSat Continues Strong Growth With 43% Revenue Increase In Second Quarter 2007

RRSat Continues Strong Growth With 43% Revenue Increase In Second Quarter 2007

- Highest Backlog Level in Company History; Updating Annual Guidance

- Second Quarter Highlights

- Record Second Quarter Revenues of $14.7 Million

- Achieved Highest Backlog in Company's History, Reaching $132.1 Million at End of Second Quarter

- Strong Quarterly Operating Cash Flow

- 37% Increase in Adjusted Net Income Reaching $2.7 Million, or $0.16 Per Share

OMER, Israel, July 31 /PRNewswire-FirstCall/ -- 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 June 30, 2007.

Revenues for the second quarter of 2007 totaled $14.7 million, an increase of 42.6% compared to $10.3 million in the second quarter of 2006.

Operating income for the second quarter of 2007 totaled $3.2 million, a 23.0% increase compared to $2.6 million in the second quarter of 2006.

Adjusted net income for the second quarter of 2007 totaled $2.7 million, an increase of 36.7% compared to $2.0 million in the second quarter of 2006. Adjusted net income per diluted share totaled $0.16, compared to $0.15 in the second quarter of 2006.

Adjusted EBITDA for the second quarter of 2007 totaled $4.0 million, an increase of 27.4% compared to $3.1 million in the second quarter of 2006.

Net income on a GAAP basis for the second quarter of 2007 was $2.6 million, an increase of 29.3% compared to $2.0 million, in the second quarter of 2006. Net income per diluted share on a GAAP basis was $0.15, compared with $0.15 in the second quarter of 2006.

Cash, cash equivalents and marketable securities as at June 30, 2007 were $57.4 million, compared with $54.7 million as at March 31, 2007. During the quarter, the Company generated $4.6 million in operating cash flow, excluding the $1.5 million invested in marketable securities, and presented as an outflow under the GAAP operating cash flow.

David Rivel, CEO of RRSat commented, "This quarter we continued to generate excellent financial performance, while setting new records in several key financial parameters. We ended the quarter with our highest backlog in history, reaching $132.1 million, our revenues are at record levels, and, consequently we presented an increase in profits and a strong cash flow. Altogether, 2007 is evolving into a very exciting year for RRSat on all fronts."

Mr. Rivel added, "Looking ahead, we believe 2007 offers many opportunities for the company. We are generating substantial organic growth, and have identified several potential acquisition targets in the US, which we believe will complement our product offering, further driving performance. We hope to finalize such an acquisition by the end of 2007" concluded Mr. Rivel, "As a result of our strong performance and record backlog, we are increasing our annual 2007 revenue guidance to the range of $57.0 - $57.5 million, with third quarter revenues expected to be in the range of $14.7 - $14.9 million."

Conference Call Information

Conference call scheduled later today, July 31, 2007 at 10:00 am EDT (07:00 am PDT; 03:00 pm UK Time; 05:00 pm Israel Time). 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 Number: +44-(0)-800-917-5108   Israel Dial-in Number: +972-(0)-3-918-0609   International Dial-in Number: +972-3-918-0609   

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 will be available for two days following the call. To access the replay dial one of the following: +1-888-254-7270 (US); +44(0)-800-028-6837 (UK) and +972-3-925-5940 (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.

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 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 provide these services to more than 385 television and radio channels, covering more than 150 countries. Visit the company's website www.rrsat.com for more information.

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) the growth of our business and the television and radio broadcasting industries, (ii) our expectation to expand our client base and 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, please refer to our SEC filings and the amendments thereto, including our Annual Report on Form 20-F for the year ended December 31, 2006 and our Current Reports on Form 6-K.

                            FINANCIAL TABLES FOLLOW    RRSat Global Communications Network Ltd. and its Subsidiaries   Consolidated Statements of Operations    In thousands, except share data                                     Six months ended     Three months ended                                  Jun-30        Jun-30  Jun-30        Jun-30                                    2007          2006    2007          2006                                       $             $       $             $   Revenues                       27,935        19,704  14,660        10,281    Cost of revenues               17,918        12,427   9,448         6,514    Gross profit                   10,017         7,277   5,212         3,767    Operating expenses    Sales and marketing             1,370           877     708           387    General and administrative      2,775         1,621   1,340           809    Total operating expenses        4,145         2,498   2,048         1,196    Operating income                5,872         4,779   3,164         2,571    Interest and marketable    securities income              1,403            83     834            28    Currency fluctuation and    other financing income, net     (141)          229    (149)          227    Changes in fair value of    embedded currency    conversion derivatives            16           196     (12)           72    Other income, net                   4             4       4             4    Income before taxes on    income                         7,154         5,291   3,841         2,902    Income taxes                    1,915         1,708   1,227           880     Net income                     $5,239        $3,583  $2,614        $2,022      RRSat Global Communications Network Ltd. and its Subsidiaries   Consolidated Statements of Operations (cont'd)    In thousands, except share data                                      Six months ended     Three months ended                                      Jun-30   Jun-30     Jun-30      Jun-30                                        2007     2006       2007        2006   Income per ordinary share    Basic income per ordinary    share                            0.30        0.27       0.15        0.15    Diluted income per    ordinary share                   0.30        0.27       0.15        0.15    Weighted average number    of ordinary share used to    compute basic income per    ordinary share             17,242,300  13,047,300 17,242,300  13,047,300    Weighted average number    of Ordinary share used to    compute diluted income    per ordinary share         17,368,054  13,129,200 17,395,242  13,129,200      RRSat Global Communications Network Ltd. and its Subsidiaries   Reconciliation of Adjusted Net Income and Adjusted EBITDA    In thousands, except share data                                    Six months ended    Three months ended                                  Jun-30       Jun-30   Jun-30      Jun-30                                    2007         2006     2007        2006   Reconciliation of    Net Income to Adjusted Net    Income:   Net income - as reported      $ 5,239      $ 3,583  $ 2,614     $ 2,022   Non-cash equity-based    compensation charge              206           24      101          21   Changes in fair value    of embedded currency    conversion derivatives           (16)        (196)      12         (72)   Change in deferred tax    on embedded derivatives            5           61       (3)         22    Adjusted net income           $ 5,434      $ 3,472  $ 2,724     $ 1,993   Diluted Adjusted net    income per ordinary shares      0.31         0.26     0.16        0.15    Reconciliation of Net    Income to Adjusted EBITDA:   Net income - as reported      $ 5,239      $ 3,583  $ 2,614     $ 2,022   Interest and marketable    securities (income)           (1,403)         (83)    (834)        (28)   Currency fluctuation and    other financial    (income) expenses, net           141         (229)      149       (227)   Changes in fair value of    embedded currency    conversion derivatives           (16)        (196)      12         (72)   Other expenses (income), net       (4)          (4)      (4)         (4)   Income tax expense              1,915        1,708    1,227         880    Non-cash equity-based    compensation charge              206           24      101          21   Depreciation and amortization   1,387        1,033      717         533   Adjusted EBITDA                $7,465       $5,836   $3,982      $3,125      RRSat Global Communications Network Ltd. and its Subsidiaries   Consolidated Balance Sheets    In thousands, except share data                                                              Jun-30  Dec-31                                                               2007    2006   Current assets                                                                  $       $   Cash and cash equivalents                                 16,979  51,393   Marketable securities                                     24,970   1,454   Accounts receivable:   Trade (net of provision for doubtful account of $ 1,332    and $ 987 as of June 30, 2007 and December 31,    2006, respectively)                                       9,441  10,187   Other                                                        633     797   Fair value of embedded currency conversion derivatives       744     743   Related parties                                              327      64   Deferred taxes                                               151     184   Prepaid expenses                                           1,125     215    Total current assets                                      54,370  65,037    Deposits and long-term receivables                           686   1,018    Marketable securities                                     15,485       -    Assets held for employee severance payments                  729     626    Fixed assets, at cost, less accumulated depreciation    and amortization                                         14,709  12,452     Total assets                                             $85,979 $79,133      RRSat Global Communications Network Ltd. and its Subsidiaries   Consolidated Balance Sheets (cont'd)    In thousands, except share data                                                              Jun-30  Dec-31                                                               2007    2006   Liabilities and shareholders' equity    Current liabilities   Short term credit                                           $ 70     $ -   Account payable:   Trade                                                      5,368   4,488   Other                                                      1,337   1,845   Fair value of embedded currency conversion derivatives       395     410   Related parties                                               13      27   Deferred income                                            4,491   3,992    Total current liabilities                                 11,674  10,762    Long-term liabilities   Deferred income                                            4,198   3,945   Liability in respect of employee severance payments          842     660   Deferred taxes                                               475     421    Total long-term liabilities                                5,515   5,026    Total liabilities                                         17,189  15,788    Shareholders' equity   Share capital   Ordinary share NIS 0.01 par value each    (20,000,000 authorized as of June 30,    2007 and December 31, 2006, 17,242,300    shares issued and fully paid as of June    30, 2007 and December 31, 2006)                              40      40   Additional paid in capital                                51,486  51,280   Retained earnings                                         17,264  12,025    Total shareholders' equity                                68,790  63,345    Total liabilities and shareholders' equity               $85,979 $79,133      RRSat Global Communications Network Ltd. and its Subsidiaries   Consolidated Statements of Cash Flows    In thousands                                         Six months ended   Three months ended                                       Jun-30      Jun-30    Jun-30  Jun-30                                         2007        2006      2007    2006    Cash flows from operating    activities   Net income                         $ 5,239     $ 3,583   $ 2,614 $ 2,022   Adjustments required to reconcile    net income to net cash provided by    operating activities   Depreciation and amortization        1,387       1,033       717     533   Provision for losses in account    receivable                            345         194       104     135   Deferred taxes                          87          23       130      47   Changes in liability for employee    severance payments, net                79          87       (29)     19   Capital gains on sale of fixed    assets, net                            (4)         (4)       (4)     (4)   Interest and amortization on held to    maturity securities                  (556)          -      (402)      -   Expenses in relation of options    granted                               206          24       101      21   Changes in fair value of embedded    currency conversion derivatives       (16)       (196)       12     (72)    Changes in assets and liabilities:   Increase in marketable securities,    net                                (4,621)        (63)   (1,497)    (95)   Decrease (increase) in    account receivable - trade            401      (3,044)      (95) (2,333)   Increase in related parties, net      (278)          -      (200)      -   Decrease in account receivable    - other                               165          90       332      74   Decrease (increase) in prepaid    expenses                             (910)        149      (184)    196   Decrease (Increase) in deposits    and long-term receivables             332        (269)      162    (271)   Increase (decrease) in account    payables                             (139)        180        80  (2,162)   Increase in deferred income            752       1,403     1,260   2,594    Net cash provided by operating    activities                        $ 2,469     $ 3,190   $ 3,101   $ 704      RRSat Global Communications Network Ltd. and its Subsidiaries   Consolidated Statements of Cash Flows (cont'd)    In thousands                                    Six months ended     Three months ended                                   Jun-30      Jun-30     Jun-30     Jun-30                                     2007        2006       2007       2006    Cash flows from    investing activities   Investment in fixed    assets                      $ (3,137)   $ (3,218)   $ (2,366) $ (1,095)   Investment in securities    held to maturity             (33,824)          -      (8,646)        -   Proceeds from sale of    fixed assets                       8           5           8         5     Net cash used in investing    activities                  $(36,953)   $ (3,213)   $(11,004)  $ (1,090)    Cash flows from financing    activities   Dividend paid                     $ -    $ (1,235)        $ -   $ (1,235)   Increase in Short term credit      70           -          70          -   Stock issuance costs                -         (88)          -        (88)     Net cash provided by (used in)    financing activities             $70    $ (1,323)       $ 70   $ (1,323)     Increase (decrease) in    cash and cash equivalents    $(34,414)  $ (1,346)   $ (7,833)  $ (1,709)    Balance of cash and cash    equivalents at beginning    of period                      51,393      2,060      24,812      2,423    Balance of cash and cash    equivalents at end of period $ 16,979      $ 714    $ 16,979      $ 714    A. Non-cash transaction    Investment in fixed assets      $ 511        $ -        $511        $ -    B. Supplementary cash flow    information    Income taxes paid              $1,892     $1,328        $884       $575    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.

CONTACT: Company Contact Information: Gil Efron, CFO, +972-8-861-0000,
investors@rrsat.com; or External Investor Relations: Ehud Helft or Kenny
Green, +1-646-201-9246, info@gkir.com, both of RRSat Global Communications
Network Ltd.

Web site: http://www.rrsat.com/

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