RRsat Presents 63% Increase in Adjusted Net Income in Third Quarter 2007

RRsat Presents 63% Increase in Adjusted Net Income in Third Quarter 2007

Backlog Increases Further Reaching New Level of $137.3 Million

Third Quarter Highlights (compared to third quarter 2006) - Revenue continues to increase, up 29.6% reaching $15.0 million; Adjusted net income up 63.1% reaching record $3.2 million

Increasing 2007 annual revenue guidance; expected to surpass $58 million in revenues; Cash & marketable securities further increased to $59.9 million

OMER, Israel, November 1/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 September 30, 2007.

Revenues for the third quarter of 2007 totaled $15.0 million, an increase of 29.6% compared to $11.5 million in the third quarter of 2006.

Backlog of signed agreements, as of September 30, 2007, reached a record $137.3 million, a further increase of $5.2 million from the $132.1 million backlog of signed agreements as of June 30, 2007.

Operating income for the third quarter of 2007 totaled $2.9 million, a 6.3% increase compared to $2.7 million in the third quarter of 2006.

Adjusted net income for the third quarter of 2007 totaled $3.2 million, an increase of 63.1% compared to $2.0 million in the third quarter of 2006. Adjusted net income per diluted share totaled $0.19, compared to $0.15 in the third quarter of 2006.

Net income on a GAAP basis for the third quarter of 2007 was $3.0 million, an increase of 49.5% compared to $2.0 million, in the third quarter of 2006. Net income per diluted share on a GAAP basis was $0.17, compared with $0.15 in the third quarter of 2006.

Adjusted EBITDA for the third quarter of 2007 totaled $3.8 million, an increase of 13.3% compared to $3.3 million in the third quarter of 2006.

Cash, cash equivalents and marketable securities as at September 30, 2007 were $59.9 million, compared with $57.4 million as at June 30, 2007. During the quarter, the Company generated $4.3 million in operating cash flow, excluding the $1.8 million generated from marketable securities, and presented as an inflow under the GAAP operating cash flow.

David Rivel, CEO of RRsat commented, "Once again we generated record top and bottom line performance this quarter, fueled by the steady increase in orders for our premier end-to-end distribution and content management services. This strong growth compared to the third quarter last year was especially significant as the results last year included a large component of high-margin, non-recurring revenues incurred due to media interest in the regional hostilities in 2006. We reached new levels with our backlog, ending the quarter with a backlog of $137.3 million, a healthy net increase of $5.2 million during the quarter."

Mr. Rivel added, "We continue to develop our strong product offering, signing new partnerships with premier global satellite operators. Furthermore, we continue to invest resources in laying additional infrastructure increasing our fiber optic capacity to key European cities, while steadily signing new and existing customers for our broad product offering. Looking ahead to the remainder of 2007 and 2008, we are holding initial discussions with several potential acquisition targets in the US. We hope to announce such a transaction 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 $58.3 - $58.7 million, implying fourth quarter revenues in the range of $15.4 - $15.8 million."

Conference Call Information

Conference call scheduled later today, November 1, 2007 at 10:00 am EDT (07:00 am PDT; 02:00 pm UK Time; 04:00 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: 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: http://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) 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 400 television and radio channels, covering more than 150 countries. Visit the company's website http://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.

          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  

FINANCIAL TABLES FOLLOW

RRsat Global Communications Network Ltd. and its Subsidiaries

Consolidated Statements of Operations

          In thousands, except share data                                   Nine months ended         Three months ended                                 Sep-30         Sep-30      Sep-30      Sep-30                                  2007           2006        2007        2006       Revenues                  $ 42,889     $ 31,243     $ 14,954    $ 11,539       Cost of revenues            27,650       19,753        9,732       7,326       Gross profit                15,239       11,490        5,222       4,213       Operating expenses       Sales and marketing          2,175        1,401          805         524       General and administrative   4,301        2,590        1,526         969       Total operating expenses     6,476        3,991        2,331       1,493       Operating income             8,763        7,499        2,891       2,720       Interest and marketable     securities income            1,911          122          508          39        Currency fluctuation and     other financing income, net    118          227          259          (2)       Changes in fair value of     embedded currency     conversion derivatives        (226)         222         (242)         26                                                                      Other income, net                4            4            -           -       Income before taxes on     income                      10,570        8,074        3,416       2,783      Income taxes                 2,379        2,516          464         808       Net income                 $ 8,191      $ 5,558      $ 2,952     $ 1,975  

RRsat Global Communications Network Ltd. and its Subsidiaries

Consolidated Statements of Operations (cont'd)

          In thousands, except share data                                       Nine months ended    Three months ended                                      Sep-30     Sep-30     Sep-30    Sep-30                                       2007       2006       2007       2006     Income per ordinary share       Basic income per ordinary      share                             0.48       0.42       0.17       0.15                               Diluted income per      ordinary share                    0.47       0.42       0.17       0.15                               Weighted average number     of ordinary shares 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 shares used to     compute diluted income     per ordinary share          17,392,233 13,047,300 17,441,490 13,047,300                    

          RRSat Global Communications Network Ltd and its subsidiaries       Reconciliation of Adjusted Net Income and Adjusted EBITDA     In thousands                                Nine months ended            Three months ended                                Sep-30      Sep-30      Sep-30          Sep-30                                 2007        2006        2007            2006     Reconciliation of Net     Income to Adjusted Net        Income:      Net income - as reported $ 8,191     $ 5,558     $ 2,952         $ 1,975      Non-cash equity-based      compensation charge          309          45         103              21      Changes in fair value of      embedded currency     conversion derivatives       226        (222)        242             (26)      Change in deferred tax      on embedded derivatives      (66)         69         (70)              8      Adjusted net income      $ 8,660     $ 5,450     $ 3,227         $ 1,978       Adjusted net income per      diluted ordinary share    $ 0.50      $ 0.42      $ 0.19          $ 0.15       Reconciliation of Net      Income to Adjusted EBITDA:     Net income - as reported $ 8,191     $ 5,558     $ 2,952         $ 1,975      Interest and marketable      securities income         (1,911)       (122)       (508)            (39)      Currency fluctuation and     other financial     (income) expenses, net      (118)       (227)       (259)              2      Changes in fair value of     embedded currency     conversion derivatives       226        (222)        242             (26)      Other income, net             (4)         (4)          -               -      Income tax expense         2,379       2,516         464             808      Non-cash equity-based     compensation charge          309          45         103              21      Depreciation and      amortization               2,169       1,624         782             591      Adjusted EBITDA           11,241       9,168       3,776           3,332    

RRSat Global Communications Network Ltd. and its Subsidiaries

Consolidated Balance Sheets

          In thousands, except share data                                                          Sep-30      Dec-31                                                           2007        2006     Current assets      Cash and cash equivalents                         $ 21,064    $ 51,393      Marketable securities                               26,998       1,454      Accounts receivable:     Trade (net of provision      for doubtful account of     $ 1,596     and $ 987 as of September      30, 2007 and December 31,     2006, respectively)                                  9,310      10,187      Other                                                1,086         797      Fair value of embedded      currency conversion      derivatives                                          1,117         743      Related parties                                         75          64      Deferred taxes                                         453         184      Prepaid expenses                                     1,086         215       Total current assets                                61,189      65,037       Deposits and long-term     receivables                                            812       1,018       Marketable securities                               11,798           -       Assets held for employee      severance payments                                     789         626       Fixed assets, at cost,      less accumulated depreciation     and amortization                                    15,531      12,452       Total assets                                      $ 90,119    $ 79,133    

RRSat Global Communications Network Ltd. and its Subsidiaries

Consolidated Balance Sheets (cont'd)

                                                       Sep-30                Dec-31                                                   2007                  2006     Liabilities and shareholders' equity       Current liabilities      Short term credit                            $ 177                   $ -      Account payable:      Trade                                        4,337                 4,488      Other                                        1,660                 1,845      Fair value of embedded currency     conversion derivatives                       1,010                   410      Related parties                                 27                    27      Deferred income                              5,300                 3,992      Total current liabilities                   12,511                10,762        Long-term liabilities        Deferred income                              4,299                 3,945      Liability in respect of employee      severance payments                             934                   660      Deferred taxes                                 530                   421       Total long-term liabilities                  5,763                 5,026       Total liabilities                           18,274                15,788       Shareholders' equity      Share capital      Ordinary share NIS 0.01 par      value each (20,000,000     authorized as of September      30, 2007 and     December 31, 2006,     17,242,300 shares issued and     fully paid as of     September 30, 2007 and December      31, 2006)                                       40                    40      Additional paid in capital                  51,589                51,280      Retained earnings                           20,216                12,025      Total shareholders' equity                  71,845                63,345       Total liabilities and      shareholders' equity                      $ 90,119              $ 79,133    

RRSat Global Communications Network Ltd. and its Subsidiaries

Consolidated Statements of Cash Flows

          In thousands                                       Nine months ended   Three months ended                                        Sep-30   Sep-30     Sep-30    Sep-30                                         2007     2006       2007      2006       Cash flows from operating     activities      Net income                       $ 8,191  $ 5,558    $ 2,952   $ 1,975      Adjustments required to      reconcile net income to net     cash provided by operating     activities       Depreciation and      amortization                       2,169    1,624        782       591      Provision for losses      in account receivable                609      173        264       (21)      Deferred taxes                      (160)      (1)      (247)      (24)      Changes in liability for     employee severance      payments, net                        111      106         32        19      Capital gains on sale      of fixed assets, net                  (4)      (4)         -         -      Interest and amortization     of held-to-maturity      securities                          (945)       -       (389)        -      Expenses in relation of     options granted                      309       45        103        21      Changes in fair value of     embedded currency      conversion derivatives               226     (222)       242       (26)       Changes in assets and      liabilities:      Decrease (increase)      in marketable securities, net     (2,857)    (154)     1,764       (91)      Decrease (increase)      in account receivable - trade        268   (4,259)      (133)   (1,215)      Decrease (increase)      in related parties, net              (11)       -        267         -      Decrease (increase)     in account receivable     - other                             (289)    (232)      (454)     (322)      Decrease (increase)     in prepaid expenses                 (871)    (105)        39      (254)      Decrease (Increase)     in deposits and      long-term receivables                206     (236)      (126)       33      Increase (decrease)     in account payables                 (549)   1,384        101     1,204      Increase in deferred      income                             1,662    1,540        910       137       Net cash provided      by operating activities          $ 8,065  $ 5,217    $ 6,107   $ 2,027   

RRSat Global Communications Network Ltd. and its Subsidiaries Consolidated Statements of Cash Flows (cont'd)

          In thousands                                      Nine months ended   Three months ended                                    Sep-30        Sep-30    Sep-30    Sep-30                                     2007          2006      2007      2006       Cash flows from     investing activities     Investment in fixed     assets                      $ (5,043)     $ (4,406) $ (2,417) $ (1,188)      Investments in      securities held to      maturity                     (35,131)            -    (1,307)        -      Proceeds from      securities held to     maturity                       1,591             -     1,591         -      Proceeds from sale      of fixed assets                   12             5         4         -       Net cash used in     investing activities       $ (38,571)     $ (4,401) $ (2,129) $ (1,188)       Cash flows from      financing activities      Dividend paid                    $ -      $ (1,975)      $ -    $ (740)      Increase in Short     term credit                      177             -       107         -      Stock issuance costs               -          (261)        -      (173)       Net cash provided      by (used in)     financing activities           $ 177      $ (2,236)    $ 107    $ (913)       Increase (decrease) in     cash and cash equivalents  $ (30,329)     $ (1,420)  $ 4,085     $ (74)       Balance of cash and cash     equivalents at beginning     of period                     51,393         2,060    16,979       714       Balance of cash and cash     equivalents at end      of period                   $ 21,064         $ 640  $ 21,064     $ 640      A. Non-cash transactions       Investment in fixed assets     $ 213           $ -     $ 213       $ -       B. Supplementary cash     flow information       Income taxes paid            $ 2,939       $ 2,540   $ 1,047   $ 1,212    

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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