RRsat Achieves Record Revenue and Operating Income in Fourth Quarter 2008

RRsat Achieves Record Revenue and Operating Income in Fourth Quarter 2008

Annual Revenues Reach a Record $79 Million; Backlog Reaches New $185.7 Million Record

OMER, Israel, January 29/PRNewswire-FirstCall/ --

Fourth Quarter 2008 Highlights (compared to fourth quarter 2007)

- Revenues increase 34% reaching $22.0 million
- Operating income increases 38% to $5.0 million
- Adjusted EBITDA increases 39% to $5.8 million
- Reiterate 2009 revenue guidance of over $100 million
and introduce first quarter 2009 guidance

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 fourth quarter and full year ended December 31,
2008.

Fourth Quarter 2008 Results:

Revenues for the fourth quarter of 2008 totaled $22.0 million, an
increase of 34% compared to $16.3 million in the fourth quarter of 2007.

Backlog of signed agreements, as of December 31, 2008, reached $185.7
million, an increase from the $178.5 million backlog of signed agreements as
of September 30, 2008.

Operating income for the fourth quarter of 2008 totaled $4.5 million, a
38% increase compared to $3.3 million in the fourth quarter of 2007.

Net income on a GAAP basis for the fourth quarter of 2008 was $3.6
million, an increase of 13% compared to $3.2 million in the fourth quarter of
2007. Net income per diluted share on a GAAP basis was $0.21, compared to
$0.18 in the fourth quarter of 2007.

Adjusted EBITDA for the fourth quarter of 2008 totaled $5.7 million, an
increase of 39% compared to $4.2 million in the fourth quarter of 2007.

Adjusted net income for the fourth quarter of 2008 totaled $2.8 million,
compared to $3.6 million in the fourth quarter of 2007. Net income for the
quarter was impacted by higher tax expense incurred following the
strengthening of the US dollar against the Israeli shekel during the period,
resulting in an appreciation of the Company's US dollar cash balance relative
to the shekel. This appreciation in the cash balance is viewed as a taxable
gain by the Israeli tax authorities. Adjusted net income per diluted share,
which was similarly impacted by the higher tax expense, totaled $0.17,
compared to $0.21 in the fourth quarter of 2007.

Cash, cash equivalents and marketable securities as at December 31, 2008
were $46.6 million, compared with $61.9 million as at September 30, 2008.
During the quarter, the Company generated $3.7 million in operating cash
flow, paid out the balance of $12.6 million for the acquisition of the Emek
Ha'ela Teleport and distributed a dividend of $5 million to our shareholders.

Full Year 2008 Results:

Revenues for the full year 2008 totaled a record $79.0 million, an
increase of 33% compared to $59.2 million in 2007. Operating income for 2008
totaled $15.0 million, a 25% increase compared to $12.0 million in 2007. Net
income on a GAAP basis for 2008 was $13.4 million, an increase of 18%
compared to $11.4 million in 2007. Adjusted EBITDA for 2008 totaled $19.3
million, an increase of 26% compared to $15.4 million in 2007. Adjusted net
income for 2008 totaled $12.9 million, an increase of 5% compared to $12.3
million in 2007.

David Rivel, CEO of RRsat commented, "2008 was a year of major
achievements and expansion for RRsat. Throughout the year our revenues
increased to close to $80 million, we presented sequential quarterly
increases in our gross profit and operating income, all, while continuing to
generate cash on a steady and ongoing basis. Throughout 2008 we continued to
expand our business, commencing a total of 60 new contracts, including 21 of
which were follow-on contracts with existing customers, bringing the total
number of channels we broadcast to 500. We culminated the year with a new
record backlog of $185.7 million granting us good visibility well into 2009,
a key asset in the current macro-economic environment. 2008 was also a
milestone year in terms of business expansion. We acquired two important
teleports, expanding our global presence to North America, while further
enhancing our local base by acquiring a major strategically-located
teleport."

"Looking ahead to 2009, we will continue to seek to enhance our customer
base and navigate the current environment by further leveraging our premier
global network, broad and diverse customer base, international reach and
strong cash position. We are reiterating our 2009 annual revenues guidance to
surpass $100 million, with revenues in the first quarter of 2009 expected to
be in the range of $22.8 - $23.3 million." concluded Mr. Rivel.

Conference Call Information

Conference call scheduled later today, January 29, 2009 at 9:00 am ET. 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: 1-866-345-5855
UK Dial-in Number: 0-800-404-8418
Israel Dial-in Number: 03-918-0609
International Dial-in Number: +972-3918-0609

at: 9:00 am Eastern Time; 6:00 am Pacific Time; 2:00 pm UK Time; 4:00 pm
Israel Time

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:
1-888-782-4291 (US) and +972-3-925-5925 (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, 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 500 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,(iii) our ability to
successfully integrate the teleports we acquired, and (iv) 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, 2007 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
Year ended Three months ended
Dec-31 Dec-31 Dec-31 Dec-31
2008 2007 2008 2007

Revenues $ 78,993 $ 59,221 $ 21,954 $ 16,332
Cost of revenues 53,499 38,419 14,706 10,769

Gross profit 25,494 20,802 7,248 5,563
Operating expenses
Sales and marketing 3,892 3,017 1,074 842
General and administrative 6,582 5,767 1,680 1,466

Total operating expenses 10,474 8,784 2,754 2,308

Operating income 15,020 12,018 4,494 3,255
Interest and marketable
securities income 1,111 2,631 15 720
Currency fluctuation and
other financing
income (expenses), net 177 329 (153) 211
Changes in fair value of
embedded currency
conversion derivatives 1,342 (646) 1,188 (420)
Other income, net 10 4 (2) -
Income before taxes on
income 17,660 14,336 5,542 3,766
Income taxes 4,228 2,932 1,957 553
Net income $ 13,432 $ 11,404 $ 3,585 $ 3,213

Income per Ordinary Share
Basic income per Ordinary
Share 0.78 0.66 0.21 0.19

Diluted income per Ordinary
Share 0.77 0.65 0.21 0.18

Weighted average number of
Ordinary Shares used to compute
basic income per
Ordinary Share 17,290,099 17,249,710 17,300,109 17,271,941

Weighted average number of
Ordinary Shares used to compute
diluted income per
Ordinary Share 17,399,375 17,418,180 17,350,765 17,472,282

RRsat Global Communications Network Ltd. and its Subsidiaries
Reconciliation of Adjusted Net Income and Adjusted EBITDA

In thousands except per share data
Year ended Three months ended
Dec-31 Dec-31 Dec-31 Dec-31
2008 2007 2008 2007
Reconciliation of Net Income
to Adjusted Net
Income:
Net income - as reported $ 13,432 $ 11,404 $ 3,585 $ 3,213
Non-cash equity-based
compensation charge 415 411 103 102
Changes in fair value
of embedded currency
conversion derivatives (1,342) 646 (1,188) 420
Change in deferred tax on
embedded derivatives 362 (181) 320 (115)
Adjusted net income $ 12,867 $ 12,280 $ 2,820 $ 3,620

Adjusted net income per
diluted ordinary share $ 0.74 $ 0.71 $ 0.16 $ 0.21

Reconciliation of Net
Income to Adjusted EBITDA:
Net income - as reported $ 13,432 $ 11,404 $ 3,585 $ 3,213
Interest and marketable
securities income (1,111) (2,631) (15) (720)
Currency fluctuation and
other financial
(income) expenses, net (177) (329) 153 (211)
Changes in fair value of
embedded currency
conversion derivatives (1,342) 646 (1,188) 420
Other income, net (10) (4) 2 -
Income tax expense 4,228 2,932 1,957 553
Non-cash equity-based
compensation charge 415 411 103 102
Depreciation and amortization 3,971 2,979 1,201 810
Adjusted EBITDA $ 19,406 $15,408 $ 5,798 $ 4,167

RRsat Global Communications Network Ltd. and its Subsidiaries
Consolidated Balance Sheets

In thousands except share data

As of As of
Dec-31 Dec-31
2008 2007

Current assets

Cash and cash equivalents $ 34,749 $ 28,409
Marketable securities 6,102 28,291
Accounts receivable:
Trade (net of provision for doubtful
accounts of $1,882 and $2,188 as of
December 31, 2007 and 2008 respectively) 11,227 10,421
Other 417 518
Related parties - 14
Fair value of embedded currency
conversion derivatives 2,234 1,303
Deferred taxes 552 711
Prepaid expenses 1,390 919

Total current assets 56,671 70,586

Deposits and long-term receivables 1,791 1,104

Marketable securities 5,743 6,722

Other assets and prepaid expenses 7,897 1,025

Assets held for employee severance
payments 1,305 987

Fixed assets, at cost, less accumulated
amortization 25,971 14,966

Goodwill 3,734 -

Intangible Assets, at cost, less
accumulated depreciation
and amortization 1,375 -

Total assets $ 104,487 $ 95,390

RRsat Global Communications Network Ltd. and its Subsidiaries
Consolidated Balance Sheets (cont'd)

In thousands except share data
As of As of
Dec-31 Dec-31
2008 2007

Liabilities and shareholders' equity

Current liabilities
Accounts payable:
Trade $ 9,058 $ 5,040
Other 1,944 1,559
Fair value of embedded currency
conversion derivatives 1,205 1,616
Related parties 25 26
Deferred income 5,091 5,191


Total current liabilities 17,323 13,432

Long - term liabilities
Deferred income 6,689 5,169
Liability in respect of employee
severance payments 1,378 1,011
Deferred taxes 747 619

Total long - term liabilities 8,814 6,799

Total liabilities 26,137 20,231

Commitments, contingent liabilities
and liens

Shareholders' equity
Share capital:
Ordinary share NIS 0.01 par value
each (20,000,000 shares
authorized as of December 31, 2007
and 2008; 17,286,762 and
17,306,783 shares issued and fully
paid as of December 31, 2007 and 2008) 40 40
Additional paid in capital 52,106 51,691
Retained earnings 26,309 23,429
Accumulated other comprehensive loss (105) (1)

Total shareholders' equity $ 78,350 $ 75,159

Total liabilities and shareholders'
equity $ 104,487 $ 95,390

RRsat Global Communications Network Ltd. and its Subsidiaries
Consolidated Statements of Cash Flows

In thousands
Year ended Three months ended
Dec-31 Dec-31 Dec-31 Dec-31
2007 2008 2007 2008

Cash flows from operating activities

Net income $ 13,432 $ 11,404 $ 3,585 $ 3,213

Adjustments required to reconcile
net income to net cash provided
by operating activities:

Deprecation and amortization 3,971 2,971 1,201 802
Provision for losses in accounts
receivable 752 1,094 211 485
Deferred taxes 324 (329) 413 (169)
Discount accretion and premium
amortization of held- to- maturity
securities, net (635) (1,361) (70) (416)
Discount accretion and premium
amortization of available- for-
sale securities, net (246) (16) (68) (16)
Changes in liability for employee
severance payments, net 49 (10) (135) (121)
Capital gains on sale of fixed
assets, net (10) (4) 2 -
Expenses in relation to options
granted 415 411 103 102
Changes in fair value of embedded
currency conversion derivatives (1,342) 646 (1,188) 420
Changes in assets and liabilities:
Increase in accounts receivable
- trade (1,558) (1,328) (2,964) (1,596)
Decrease in related
parties, net 13 49 47 60
Decrease (increase) in accounts
receivable - other 101 279 (189) 568
Decrease (increase) in prepaid
expenses (472) (696) (459) 175
Increase in deposits and
long-term receivables (687) (86) (131) (292)
Increase in accounts payable 4,236 128 2,161 677
Increase in deferred income 1,420 2,423 1,126 761


Net cash provided by operating
activities $ 19,763 $ 15,575 $ 3,651 $ 4,653

RRsat Global Communications Network Ltd. and its Subsidiaries
Consolidated Statements of Cash Flows

In thousands
Year ended Three months ended
Dec-31 Dec-31 Dec-31 Dec-31
2008 2007 2008 2007

Cash flows from investing
activities

Investment in fixed assets $ (14,942) $ (5,352) $ (2,304) $ (1,314)
Investment in other assets (11,852) (1,033) (11,830) (28)
Investment in securities
available- for- sale (19,188) (3,048) - (3,048)
Investment in securities
held- to- maturity - (33,989) - 1,142
Decrease (increase) in
trading securities, net 2,427 (2,015) 394 842
Proceeds from securities
available- for- sale 17,980 1,062 13,980 1,062
Proceeds from securities
held- to- maturity 22,689 5,807 3,182 4,216
Proceeds from sale of
fixed assets 15 9 (2) (3)

Net cash used in investing
activities $ (2,871) $ (38,559) $ 3,420 $ (2,869)

Cash flows from financing activities
Increase in short term credit 0 (177)
Dividend paid $ (10,552) $ - $ (5,020) $ -

Net cash provided by (used in)
financing activities $ (10,552) $ - $ (5,020) $ (177)

Increase (decrease) in cash
and cash equivalents $ 6,340 $ (22,984) $ 2,051 $ 7,345

Balance of cash and cash
equivalents at beginning of
Period $ 28,409 $ 51,393 $ 32,698 $ 21,064

Balance of cash and cash
equivalents at end of Period $ 34,749 $ 28,409 $ 34,749 $ 28,409

A. Non-cash transactions
Investment in fixed assets $ 306 $ 138 $ 142 $ (75)

B. Supplementary cash flow
information
Income taxes paid $ 3,392 $ 3,650 $ 1,565 $ 711

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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