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UNITEDSTATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM10-Q

(MARK ONE)

[X] QUARTERLY REPORTPURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934

For the quarterly period ended March 31, 2005

OR

[   ] TRANSITION REPORT PURSUANT TOSECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from           to          

Commissionfile number: 000-22839

Globecomm Systems Inc.

(Exact name of Registrant as specified in itscharter)

|                                                                    |  |                                   |  |  |  |  |
|--------------------------------------------------------------------|--|-----------------------------------|--|--|--|--|
| Delaware                                                           |  | 11-3225567                        |
| (Stateor other jurisdiction ofincorporation ororganization)        |  | (I.R.S.EmployerIdentificationNo.) |
| 45 OserAvenue,Hauppauge, NY(Address of principal executiveoffices) |  | 11788(ZipCode)                    |
|                                                                    |

Registrant's telephonenumber, including area code: (631) 231-9800

Indicate by checkmark whether the registrant (1) has filed all reports required to befiled by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that theRegistrant was required to file such reports), and (2) has been subjectto such filing requirements for the past 90 days. Yes [X]   No  [   ]

Indicate by check mark whether the Registrant is an acceleratedfiler (as defined in Rule 12b-2 of the Act). Yes [   ]No [X]

As of May 11, 2005, there were 14,592,907shares of the Registrant's common stock, $0.001 par value,outstanding.

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GLOBECOMM SYSTEMSINC.

Index to the March 31, 2005 Form 10-Q

|                                        |  |                                                                                                                     |        |        |        |        |  |  |  |  |
|----------------------------------------|--|---------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--|--|--|--|
|                                   |  |                                                                                                                |        | Page   |
| **PartI — FinancialInformation** |  |                                                                                                                |   |   |
|                                   |  |                                                                                                                |        |   |   |   |
| Item1.                                 |  | FinancialStatements                                                                                                 |        |   | 3      |   |
|                                   |  |                                                                                                                |        |   |   |   |
|                                   |  | ConsolidatedBalance Sheets — As of March 31, 2005 (unaudited) and June 30,2004                                |        |   | 3      |   |
|                                   |  |                                                                                                                |        |   |   |   |
|                                   |  | ConsolidatedStatements of Operations (unaudited) — For the three and ninemonths ended March 31, 2005 and2004  |        |   | 4      |   |
|                                   |  |                                                                                                                |        |   |   |   |
|                                   |  | ConsolidatedStatement of Changes in Stockholders' Equity (unaudited) —For the nine months ended March 31,2005 |        |   | 5      |   |
|                                   |  |                                                                                                                |        |   |   |   |
|                                   |  | ConsolidatedStatements of Cash Flows (unaudited) — For the nine months endedMarch 31, 2005 and2004            |        |   | 6      |   |
|                                   |  |                                                                                                                |        |   |   |   |
|                                   |  | Notesto Consolidated Financial Statements(unaudited)                                                                |        |   | 7      |   |
|                                   |  |                                                                                                                |        |   |   |   |
| Item2.                                 |  | Management's Discussion and Analysis of FinancialCondition and Results ofOperations                                 |        |   | 13     |   |
|                                   |  |                                                                                                                |        |   |   |   |
| Item3.                                 |  | Quantitative and Qualitative Disclosures about MarketRisk                                                           |        |   | 27     |   |
|                                   |  |                                                                                                                |        |   |   |   |
| Item4.                                 |  | Controls andProcedures                                                                                              |        |   | 28     |   |
|                                   |  |                                                                                                                |        |   |   |   |
| **PartII — OtherInformation**    |
|                                   |  |                                                                                                                |        |   |   |   |
| Item1.                                 |  | LegalProceedings                                                                                                    |        |   | 29     |   |
|                                   |  |                                                                                                                |        |   |   |   |
| Item2.                                 |  | Unregistered Sales of Equity Securities and Use ofProceeds                                                          |        |   | 29     |   |
|                                   |  |                                                                                                                |        |   |   |   |
| Item3.                                 |  | Defaults Upon SeniorSecurities                                                                                      |        |   | 29     |   |
|                                   |  |                                                                                                                |        |   |   |   |
| Item4.                                 |  | Submission of Matters to a Vote of SecurityHolders                                                                  |        |   | 29     |   |
|                                   |  |                                                                                                                |        |   |   |   |
| Item5.                                 |  | OtherInformation                                                                                                    |        |   | 29     |   |
|                                   |  |                                                                                                                |        |   |   |   |
| Item6.                                 |  | Exhibits                                                                                                            |        |   | 29     |   |
|                                   |  |                                                                                                                |        |   |   |   |
|                                   |  | Signatures                                                                                                          |        |   | 30     |   |
|                                        |

2

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PART I — FINANCIALINFORMATION

Item 1. Financial Statements

GLOBECOMMSYSTEMS INC. CONSOLIDATED BALANCE SHEETS (In thousands,except sharedata)

|                                                                                                                                                                                         |  |              |         |             |  |        |         |         |  |  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--------------|---------|-------------|--|--------|---------|---------|--|--|
|                                                                                                                                                                                    |  | March31,2005 |         | June30,2004 |
|                                                                                                                                                                                    |  | (Unaudited)  |         |        |
| **Assets**                                                                                                                                                                              |  |         |    |        |  |   |    |    |
| Currentassets:                                                                                                                                                                          |  |         |    |        |  |   |    |    |
| Cash andcashequivalents                                                                                                                                                                 |  | $            | 22,433  |        |  | $      | 28,252  |    |
| Restrictedcash                                                                                                                                                                          |  |         | 3,856   |        |  |   | 1,903   |    |
| Accountsreceivable,net                                                                                                                                                                  |  |         | 23,430  |        |  |   | 14,318  |    |
| Inventories                                                                                                                                                                             |  |         | 9,239   |        |  |   | 3,904   |    |
| Prepaidexpenses and other currentassets                                                                                                                                                 |  |         | 892     |        |  |   | 1,274   |    |
| Deferred incometaxes                                                                                                                                                                    |  |         | 83      |        |  |   | 83      |    |
| Totalcurrent assets                                                                                                                                                                     |  |         | 59,933  |        |  |   | 49,734  |    |
| Fixedassets,net                                                                                                                                                                         |  |         | 15,442  |        |  |   | 15,441  |    |
| Goodwill                                                                                                                                                                                |  |         | 7,204   |        |  |   | 7,204   |    |
| Otherassets                                                                                                                                                                             |  |         | 1,026   |        |  |   | 1,096   |    |
| Totalassets                                                                                                                                                                             |  | $            | 83,605  |        |  | $      | 73,475  |    |
| **Liabilitiesand Stockholders'Equity**                                                                                                                                                  |  |         |    |        |  |   |    |    |
| Currentliabilities:                                                                                                                                                                     |  |         |    |        |  |   |    |    |
| Accountspayable                                                                                                                                                                         |  | $            | 18,034  |        |  |   | 15,453  |    |
| Deferredrevenues                                                                                                                                                                        |  |         | 2,429   |        |  |   | 1,083   |    |
| Accrued payrolland related fringebenefits                                                                                                                                               |  |         | 1,334   |        |  |   | 1,154   |    |
| Other accruedexpenses                                                                                                                                                                   |  |         | 2,117   |        |  |   | 1,676   |    |
| Deferredliabilities                                                                                                                                                                     |  |         | 316     |        |  |   | 316     |    |
| Totalcurrentliabilities                                                                                                                                                                 |  |         | 24,230  |        |  |   | 19,682  |    |
| Deferredliabilities, less currentportion                                                                                                                                                |  |         | 749     |        |  |   | 987     |    |
| Commitmentsandcontingencies                                                                                                                                                             |  |         |    |        |  |   |    |    |
| Stockholders'equity:                                                                                                                                                                    |  |         |    |        |  |   |    |    |
| Series A JuniorParticipating, shares authorized, issued and outstanding: none at March31, 2005 and June 30,2004                                                                         |  |         | — |        |  |   | — |    |
| Common stock,$.001 par value, shares authorized: 50,000,000 at March 31, 2005 and22,000,000 at June 30, 2004; shares issued: 15,041,258 at March 31,2005 and 14,628,574 at June 30,2004 |  |         | 15      |        |  |   | 15      |    |
| Additional paid-incapital                                                                                                                                                               |  |         | 132,569 |        |  |   | 130,503 |    |
| Accumulateddeficit                                                                                                                                                                      |  |         | (71,454 | )      |  |   | (75,198 | )  |
| Accumulatedother comprehensiveincome                                                                                                                                                    |  |         | 277     |        |  |   | 267     |    |
| Treasury stock, atcost, 465,351 shares at March 31, 2005 and June 30,2004                                                                                                               |  |         | (2,781  | )      |  |   | (2,781  | )  |
| Totalstockholders'equity                                                                                                                                                                |  |         | 58,626  |        |  |   | 52,806  |    |
| Totalliabilities and stockholders'equity                                                                                                                                                |  | $            | 83,605  |        |  | $      | 73,475  |    |
|                                                                                                                                                                                         |

Seeaccompanying notes.

3

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GLOBECOMM SYSTEMS INC. CONSOLIDATEDSTATEMENTS OF OPERATIONS (In thousands, except per sharedata)(Unaudited)

|                                                                                             |  |                   |         |                  |  |              |         |               |  |        |        |        |  |        |         |         |  |  |
|---------------------------------------------------------------------------------------------|--|-------------------|---------|------------------|--|--------------|---------|---------------|--|--------|--------|--------|--|--------|---------|---------|--|--|
|                                                                                        |  | ThreeMonths Ended |         | Nine MonthsEnded |
|                                                                                        |  | March31,2005      |         | March 31,2004    |  | March31,2005 |         | March 31,2004 |
| Revenuesfrom ground segment systems, networks and enterprisesolutions                       |  | $                 | 23,443  |             |  | $            | 18,956  |          |  | $      | 69,722 |   |  | $      | 55,878  |    |
| Revenuesfrom data communicationsservices                                                    |  |              | 4,741   |             |  |         | 3,305   |          |  |   | 13,149 |   |  |   | 10,544  |    |
| Totalrevenues                                                                               |  |              | 28,184  |             |  |         | 22,261  |          |  |   | 82,871 |   |  |   | 66,422  |    |
| Costsand operatingexpenses:                                                                 |  |              |    |             |  |         |    |          |  |   |   |   |  |   |    |    |
| Costsfrom ground segment systems, networks and enterprisesolutions                          |  |              | 19,520  |             |  |         | 16,180  |          |  |   | 58,595 |   |  |   | 49,282  |    |
| Costsfrom data communicationsservices                                                       |  |              | 4,186   |             |  |         | 3,138   |          |  |   | 11,094 |   |  |   | 9,611   |    |
| Sellingandmarketing                                                                         |  |              | 1,476   |             |  |         | 1,219   |          |  |   | 4,028  |   |  |   | 3,461   |    |
| Researchanddevelopment                                                                      |  |              | 231     |             |  |         | 242     |          |  |   | 703    |   |  |   | 953     |    |
| Generalandadministrative                                                                    |  |              | 2,463   |             |  |         | 2,118   |          |  |   | 5,165  |   |  |   | 5,115   |    |
| Totalcosts and operatingexpenses                                                            |  |              | 27,876  |             |  |         | 22,897  |          |  |   | 79,585 |   |  |   | 68,422  |    |
| Income(loss) fromoperations                                                                 |  |              | 308     |             |  |         | (636    | )        |  |   | 3,286  |   |  |   | (2,000  | )  |
| Otherincome:                                                                                |  |              |    |             |  |         |    |          |  |   |   |   |  |   |    |    |
| Interestincome                                                                              |  |              | 121     |             |  |         | 63      |          |  |   | 286    |   |  |   | 191     |    |
| Gainon sale ofinvestment                                                                    |  |              | — |             |  |         | — |          |  |   | 40     |   |  |   | — |    |
| Gainon sale of available-for-salesecurities                                                 |  |              | 132     |             |  |         | — |          |  |   | 132    |   |  |   | 91      |    |
| Netincome(loss)                                                                             |  | $                 | 561     |             |  | $            | (573    | )        |  | $      | 3,744  |   |  | $      | (1,718  | )  |
|                                                                                        |  |              |    |             |  |         |    |          |  |   |   |   |  |   |    |    |
| Basicnet income (loss) per commonshare                                                      |  | $                 | 0.04    |             |  | $            | (0.04   | )        |  | $      | 0.26   |   |  | $      | (0.13   | )  |
| Dilutednet income (loss) per commonshare                                                    |  | $                 | 0.04    |             |  | $            | (0.04   | )        |  | $      | 0.25   |   |  | $      | (0.13   | )  |
|                                                                                        |  |              |    |             |  |         |    |          |  |   |   |   |  |   |    |    |
| Weighted-averageshares used in the calculation of basic net income (loss) per commonshare   |  |              | 14,517  |             |  |         | 14,100  |          |  |   | 14,363 |   |  |   | 13,080  |    |
| Weighted-averageshares used in the calculation of diluted net income (loss) per commonshare |  |              | 15,143  |             |  |         | 14,100  |          |  |   | 14,938 |   |  |   | 13,080  |    |
|                                                                                             |

Seeaccompanying notes.

4

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GLOBECOMM SYSTEMS INC. CONSOLIDATEDSTATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE NINEMONTHS ENDED MARCH 31, 2005 (In thousands)(Unaudited)

|                                                                        |  |                                           |        |                          |  |                    |        |                                     |  |               |         |                          |  |        |         |         |  |        |        |        |  |        |        |        |  |        |        |         |  |        |        |        |  |  |
|------------------------------------------------------------------------|--|-------------------------------------------|--------|--------------------------|--|--------------------|--------|-------------------------------------|--|---------------|---------|--------------------------|--|--------|---------|---------|--|--------|--------|--------|--|--------|--------|--------|--|--------|--------|---------|--|--------|--------|--------|--|--|
|                                                                   |  |      CommonStock |        | AdditionalPaid-inCapital |  | AccumulatedDeficit |        | AccumulatedOtherComprehensiveIncome |  | TreasuryStock |         | TotalStockholders'Equity |
|                                                                   |  | Shares                                    |        | Amount                   |  | Shares             |        | Amount                              |  |
| Balanceat June 30,2004                                                 |  |                                      | 14,629 |                     |  | $                  | 15     |                                |  | $             | 130,503 |                     |  | $      | (75,198 | )  |  | $      | 267    |   |  |   | 465    |   |  | $      | (2,781 | )  |  | $      | 52,806 |   |
| Proceedsfrom exercise of stockoptions                                  |  |                                      | 157    |                     |  |               |   |                                |  |          | 676     |                     |  |   |    |    |  |   |   |   |  |   |   |   |  |   |   |    |  |   | 676    |   |
| Proceedsfrom exercise ofwarrants                                       |  |                                      | 237    |                     |  |               |   |                                |  |          | 1,306   |                     |  |   |    |    |  |   |   |   |  |   |   |   |  |   |   |    |  |   | 1,306  |   |
| Issuanceof common stock in connection with employee stock purchaseplan |  |                                      | 18     |                     |  |               |   |                                |  |          | 78      |                     |  |   |    |    |  |   |   |   |  |   |   |   |  |   |   |    |  |   | 78     |   |
| Issuanceof stock options forservices                                   |  |                                      |   |                     |  |               |   |                                |  |          | 6       |                     |  |   |    |    |  |   |   |   |  |   |   |   |  |   |   |    |  |   | 6      |   |
| Comprehensiveincome:                                                   |  |                                      |   |                     |  |               |   |                                |  |          |    |                     |  |   |    |    |  |   |   |   |  |   |   |   |  |   |   |    |  |   |   |   |
| Netincome                                                              |  |                                      |   |                     |  |               |   |                                |  |          |    |                     |  |   | 3,744   |    |  |   |   |   |  |   |   |   |  |   |   |    |  |   | 3,744  |   |
| Gainfrom foreign currencytranslation                                   |  |                                      |   |                     |  |               |   |                                |  |          |    |                     |  |   |    |    |  |   | 10     |   |  |   |   |   |  |   |   |    |  |   | 10     |   |
| Totalcomprehensiveincome                                               |  |                                      |   |                     |  |               |   |                                |  |          |    |                     |  |   |    |    |  |   |   |   |  |   |   |   |  |   |   |    |  |   | 3,754  |   |
| Balanceat March 31,2005                                                |  |                                      | 15,041 |                     |  | $                  | 15     |                                |  | $             | 132,569 |                     |  | $      | (71,454 | )  |  | $      | 277    |   |  |   | 465    |   |  | $      | (2,781 | )  |  | $      | 58,626 |   |
|                                                                        |

Seeaccompanying notes.

5

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GLOBECOMM SYSTEMS INC. CONSOLIDATEDSTATEMENTS OF CASH FLOWS (In thousands)(Unaudited)

|                                                                                    |  |                  |         |               |  |        |         |         |  |  |
|------------------------------------------------------------------------------------|--|------------------|---------|---------------|--|--------|---------|---------|--|--|
|                                                                               |  | Nine MonthsEnded |
|                                                                               |  | March 31,2005    |         | March 31,2004 |
| **OPERATINGACTIVITIES:**                                                           |  |             |    |          |  |   |    |    |
| Net income(loss)                                                                   |  | $                | 3,744   |          |  | $      | (1,718  | )  |
| Adjustmentsto reconcile net income (loss) to net cash used in operatingactivities: |  |             |    |          |  |   |    |    |
| Depreciationandamortization                                                        |  |             | 2,257   |          |  |   | 2,346   |    |
| Allowancefor doubtful accounts, net ofrecovery                                     |  |             | (1,413  | )        |  |   | (901    | )  |
| Changes indeferredliabilities                                                      |  |             | (238    | )        |  |   | (443    | )  |
| Stockcompensation expense                                                          |  |             | 6       |          |  |   | 8       |    |
| Gain onsale of available-for-salesecurities                                        |  |             | (132    | )        |  |   | (91     | )  |
| Gain on saleofinvestment                                                           |  |             | (40     | )        |  |   | — |    |
| Changesin operating assets andliabilities:                                         |  |             |    |          |  |   |    |    |
| Accountsreceivable                                                                 |  |             | (7,664  | )        |  |   | (4,859  | )  |
| Inventories                                                                        |  |             | (5,473  | )        |  |   | 3,200   |    |
| Prepaidexpenses and other currentassets                                            |  |             | 385     |          |  |   | 39      |    |
| Otherassets                                                                        |  |             | 71      |          |  |   | 414     |    |
| Accountspayable                                                                    |  |             | 2,517   |          |  |   | 5,827   |    |
| Deferredrevenue                                                                    |  |             | 1,343   |          |  |   | (5,840  | )  |
| Accruedpayroll and related fringebenefits                                          |  |             | 179     |          |  |   | 341     |    |
| Other accruedexpenses                                                              |  |             | 439     |          |  |   | 370     |    |
| Netcash used in operatingactivities                                                |  |             | (4,019  | )        |  |   | (1,307  | )  |
|                                                                               |  |             |    |          |  |   |    |    |
| **INVESTINGACTIVITIES:**                                                           |  |             |    |          |  |   |    |    |
| Purchases of fixedassets                                                           |  |             | (2,256  | )        |  |   | (1,033  | )  |
| Restrictedcash                                                                     |  |             | (1,953  | )        |  |   | (433    | )  |
| Proceeds fromsale of available-for-salesecurities                                  |  |             | 330     |          |  |   | 391     |    |
| Repayment ofpromissory note from a relatedparty                                    |  |             | — |          |  |   | 300     |    |
| Netcash used in investingactivities                                                |  |             | (3,879  | )        |  |   | (775    | )  |
|                                                                               |  |             |    |          |  |   |    |    |
| **FINANCINGACTIVITIES:**                                                           |  |             |    |          |  |   |    |    |
| Proceeds fromexercise ofwarrants                                                   |  |             | 1,306   |          |  |   | — |    |
| Proceeds fromexercise of stockoptions                                              |  |             | 676     |          |  |   | 419     |    |
| Proceeds from saleof common stock in connection with employee stock purchaseplan   |  |             | 78      |          |  |   | 54      |    |
| Proceeds from privateplacement                                                     |  |             | — |          |  |   | 6,170   |    |
| Purchase oftreasurystock                                                           |  |             | — |          |  |   | (333    | )  |
| Netcash provided by financingactivities                                            |  |             | 2,060   |          |  |   | 6,310   |    |
| Effectof foreign currency translation oncash                                       |  |             | 19      |          |  |   | 73      |    |
| Net(decrease) increase in cash and cashequivalents                                 |  |             | (5,819  | )        |  |   | 4,301   |    |
| Cash andcash equivalents at beginning ofperiod                                     |  |             | 28,252  |          |  |   | 22,016  |    |
| Cashand cash equivalents at end ofperiod                                           |  | $                | 22,433  |          |  | $      | 26,317  |    |
|                                                                                    |

Seeaccompanying notes.

6

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GLOBECOMMSYSTEMS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH31, 2005 (Unaudited)

1.    Basis of Presentation

The accompanying unaudited consolidated financial statements havebeen prepared in accordance with accounting principles generallyaccepted in the United States for interim financial information and inaccordance with the instructions to Form 10-Q and Article 10 ofRegulation S-X. Accordingly, they do not include all of the informationand footnotes required by accounting principles generally accepted inthe United States for complete financial statements. In the opinion ofmanagement, all material adjustments (consisting of normal recurringadjustments) considered necessary for a fair presentation of theresults for such periods have been included. The consolidated balancesheet at June 30, 2004 has been derived from the audited consolidatedfinancial statements at that date but does not include all of theinformation and footnotes required by accounting principles generallyaccepted in the United States for complete financial statements. Theresults of operations for the three and nine months ended March 31,2005, are not necessarily indicative of the results that may beexpected for the full fiscal year ending June 30, 2005, or for anyfuture period.

The accompanying consolidated financialstatements should be read in conjunction with the audited consolidatedfinancial statements of the Company for the fiscal year ended June 30,2004 and the accompanying notes thereto contained in theCompany's Annual Report on Form 10-K, filed with the Securitiesand Exchange Commission on September 28, 2004.

Principles of Consolidation

The consolidatedfinancial statements include the accounts of the Company and itswholly-owned subsidiaries, Globecomm Network Services Corporation(formerly named NetSat Express, Inc.) and Globecomm Systems EuropeLimited (collectively, the "Company"). Allsignificant intercompany balances and transactions have been eliminatedin consolidation.

Accounting Estimates

The preparation of financial statements in conformity withaccounting principles generally accepted in the United States requiresmanagement to make estimates and assumptions that affect the amountsreported in the consolidated financial statements and accompanyingnotes. Actual results could differ from those estimates.

Revenue Recognition

The Company recognizesrevenue in accordance with Staff Accounting Bulletin No. 104("SAB 104"), Revenue Recognition, for itsproduction-type contracts that are sold separately as standardsatellite ground segment systems when persuasive evidence of anarrangement exists, the selling price is fixed or determinable,collectibility is reasonably assured, delivery has occurred and thecontractual performance specifications have been met. TheCompany's standard satellite ground segment systems produced inconnection with these contracts are typically short-term (less thantwelve months in term) and manufactured using a standard modularproduction process. Such systems require less engineering, drafting anddesign efforts than the Company's long-term complexproduction-type projects. Revenue is recognized on the Company'sstandard satellite ground segment systems upon shipment and acceptanceof factory performance testing which is when title transfers to thecustomer. The amount of revenues recorded on each standardproduction-type contract is reduced by the customers' contractualholdback amount, which typically requires 10% to 30% ofthe contract value to be retained by the customer until installationand final acceptance is complete. The customer generally becomesobligated to pay 70% to 90% of the contract value uponshipment and acceptance of factory performance testing. Installation isnot deemed to be essential to the functionality of the system sinceinstallation does not require significant changes to the features orcapabilities of the system, does not require complex softwareintegration and interfacing and the Company has not experienced any

7

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difficulties installing such equipment. Inaddition, the customer or other third party vendors can install thesystem. The estimated relative fair value of the installation servicesis determined by management, which is typically less than thecustomer's contractual holdback percentage. If the holdback isless than the fair value of installation, the Company will deferrecognition of revenues, determined on a contract-by-contract basisequal to the fair value of the installation services. Payments receivedin advance by customers are deferred until shipment and are presentedas deferred revenues in the accompanying consolidated balancesheets.

The Company recognizes revenue using thepercentage-of-completion method of accounting upon the achievement ofcertain contractual milestones in accordance with Statement of Position81-1 ("SOP 81-1"), Accounting for Performanceof Construction-Type and Certain Production-Type Contracts, for itsnon-standard, complex production-type contracts for the production ofsatellite ground segment systems and equipment that are generallyintegrated into the customers' satellite ground segment network.The equipment and systems produced in connection with these contractsare typically long-term (in excess of twelve months in term) andrequire significant customer-specific engineering, drafting and designeffort in order to effectively integrate all of the customizable earthstation equipment into the customers' ground segment network.These contracts generally have larger contract values, greater economicrisks and substantive specific contractual performance requirements dueto the engineering and design complexity of such systems and relatedequipment. Progress payments received in advance by customers arenetted against the inventory balances in the accompanying consolidatedbalance sheets.

Contract costs generally include purchasedmaterial, direct labor, overhead and other indirect costs. Anticipatedcontract losses are recognized, as they become known.

Revenuesfrom data communications services are derived primarily from Internetaccess service fees. Service revenues from Internet access arerecognized ratably over the period in which services are provided.Payments received in advance of providing Internet access services aredeferred until the period such services are provided and are presentedas deferred revenues in the accompanying consolidated balancesheets.

Costs from Ground Segment Systems, Networks andEnterprise Solutions

Costs related to our production-typecontracts and our non-standard, complex production-type contracts relyon estimates based on total expected contract costs. These costsconsist primarily of the costs of purchased materials (includingshipping and handling costs), direct labor and related overheadexpenses, project-related travel and living costs and subcontractorsalaries. We use estimates of the costs applicable to various elements,which we believe are reasonable. Since these contract costs depend onestimates, which are assessed continually during the term of thesecontracts, costs are subject to revisions as the contract progresses tocompletion. Revision in cost estimates are reflected in the period inwhich they become known. In the event an estimate indicates that a losswill be incurred at completion, we record the costs in the periodidentified.

Costs from Data Communications Services

Costs from data communications services relating to Internet accessservice fees consist primarily of satellite space segment charges,Internet connectivity fees and network operations expenses. Satellitespace segment charges consist of the costs associated with obtainingsatellite bandwidth (the measure of capacity) used in the transmissionof services to and from the satellite leased from operators. Networkoperations expenses consist primarily of costs associated with theoperation of the network operation center, on a twenty-four hour a day,seven-day a week basis, including personnel and related costs anddepreciation.

Research and Development

Researchand development expenditures are expensed as incurred.

Stock-Based Compensation

The Company accounts forstock option grants using the intrinsic value method prescribed inAccounting Principles Board Opinion No. 25, Accounting for Stock Issuedto Employees ("APB No. 

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25"), and complies with thedisclosure provisions of Statement of Financial Accounting Standards("SFAS") No. 123, Accounting for Stock-BasedCompensation ("SFAS No. 123"), as amended bySFAS No. 148, Accounting for Stock-Based Compensation-Transition andDisclosure ("SFAS No. 148").

Interimpro-forma information regarding net income and net loss per commonshare is required by SFAS No. 148, if the Company accounts for itsstock options granted under the intrinsic value method. The fair valueof options granted under the Company's Amended and Restated 1997Stock Incentive Plan was estimated at the date of grant using aBlack-Scholes option pricing model.

The Black-Scholes optionvaluation model was developed for use in estimating the fair value oftraded options, which have no vesting restrictions and are fullytransferable. In addition, option valuation models require the input ofhighly subjective assumptions, including the expected stock pricevolatility. The Company's stock options have characteristicssignificantly different from those of traded options, and becausechanges in the subjective input assumptions can materially affect thefair value estimate, in management's opinion, the existing modelsdo not necessarily provide a reliable single measure of the fair valueof the Company's stock options under the Black-Scholes optionvaluation model.

For purposes of pro-forma disclosures, theestimated fair value of the options is amortized to expense over theoptions' vesting period. The Company's pro-formainformation is as follows:

|                                                    |  |                                      |      |                  |  |              |        |              |  |        |        |         |  |        |        |         |  |  |
|----------------------------------------------------|--|--------------------------------------|------|------------------|--|--------------|--------|--------------|--|--------|--------|---------|--|--------|--------|---------|--|--|
|                                               |  | ThreeMonths Ended                    |      | Nine MonthsEnded |
|                                               |  | March31,2005                         |      | March 31,2004    |  | March31,2005 |        | March31,2004 |
|                                               |  | (Unaudited)                          |
|                                               |  | (Inthousands, except per share data) |
| Reported netincome(loss)                           |  | $                                    | 561  |             |  | $            | (573   | )       |  | $      | 3,744  |    |  | $      | (1,718 | )  |
| Pro-formastock compensationexpense                 |  |                                 | (536 | )           |  |         | (492   | )       |  |   | (1,318 | )  |  |   | (1,773 | )  |
| Pro-formanet income(loss)                          |  | $                                    | 25   |             |  | $            | (1,065 | )       |  | $      | 2,426  |    |  | $      | (3,491 | )  |
| Reportedbasic net income (loss) per commonshare    |  | $                                    | 0.04 |             |  | $            | (0.04  | )       |  | $      | 0.26   |    |  | $      | (0.13  | )  |
| Reporteddiluted net income (loss) per commonshare  |  | $                                    | 0.04 |             |  | $            | (0.04  | )       |  | $      | 0.25   |    |  | $      | (0.13  | )  |
| Pro-formabasic net income (loss) per commonshare   |  | $                                    | 0.00 |             |  | $            | (0.08  | )       |  | $      | 0.17   |    |  | $      | (0.27  | )  |
| Pro-formadiluted net income (loss) per commonshare |  | $                                    | 0.00 |             |  | $            | (0.08  | )       |  | $      | 0.16   |    |  | $      | (0.27  | )  |
|                                                    |

Duringthe three and nine months ended March 31, 2005, compensation expenserelated to stock options of $0 and $6,000 was included in the reportednet income, respectively. During the three and nine months ended March31, 2004, compensation expense related to stock options of $5,000 and$8,000 was included in the reported net loss.

In December 2004,the Financial Accounting Standards Board (FASB) issued SFAS No. 123(revised 2004), Share-Based Payment, which is a revision of SFAS 123("SFAS 123R"). SFAS 123R eliminates theability to account for share-based compensation under the intrinsicvalue method permitted by APB 25. This will require the Company toadopt the fair value model for recognizing compensation expense foremployee stock options, and would have the effect of reducing theCompany's reported net income and net income per share. SFAS 123Ris required to be adopted by the Company on July 1, 2005. In May 2005,in response to FAS 123R, the Board of Directors of the Company, uponrecommendation of its Compensation Committee, approved an accelerationof all unvested options granted to employees and directors under theCompany's Amended and Restated 1997 Stock Incentive Plan. As aresult of the acceleration, options to acquire 863,165 shares of theCompany's common stock became immediately exercisable. In orderto prevent unintended personal benefit to directors and executiveofficers, the Board of Directors, upon recommendation of its

9

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Compensation Committee, imposed restrictionson any shares received through the exercise of accelerated options heldby those individuals. These restrictions prevent their sale of stockobtained through exercise of an accelerated option prior to the earlierof the original vesting date or the individual's termination ofemployment. The restrictions apply to 306,220 options.

As aresult of the acceleration, the Company is not expected to be requiredto recognize anticipated stock option expense of approximately $0.6million in fiscal 2006, $0.4 million in fiscal 2007 and $0.1 million infiscal 2008. A one-time non-cash compensation charge of $0.1 millionwill be recorded in the fourth quarter of fiscal 2005 as a result ofthe acceleration. The Compensation Committee took this action with thebelief that it is in the best interest of the shareholders, as it wouldreduce the compensation expense in future periods.

Indetermining the equity component of its future compensation structure,the Company will take into account the impact of FAS 123R on itsoperating results.

Goodwill

Goodwillrepresents the excess of the purchase price of businesses over the fairvalue of the identifiable net assets acquired. In accordance with SFASNo. 142, Goodwill and Other Intangible Assets, goodwill and otherindefinite life intangible assets are no longer amortized, but insteadtested for impairment at least annually. The impairment test forgoodwill uses a two-step approach, which is performed at the reportingunit level. Step one compares the fair value of the reporting unit(calculated using a discounted cash flow method) to its carrying value.If the carrying value exceeds the fair value, there is a potentialimpairment and step two must be performed. Step two compares thecarrying value of the reporting unit's goodwill to its impliedfair value (i.e., fair value of the reporting unit less the fair valueof the unit's assets and liabilities, including identifiableintangible assets). If the carrying value of goodwill exceeds itsimplied fair value, the excess is required to be recorded as animpairment. There have been no events during the nine months endedMarch 31, 2005 that would result in any goodwill impairment.

Inventories

Inventories consist primarily ofwork-in-progress from costs incurred in connection with specificcustomer contracts, which are stated at the lower of cost or marketvalue. In assessing the realizability of inventories, we are requiredto make estimates of the total contract costs based on the variouselements of the work-in-progress. It is possible that changes to theseestimates could cause a reduction in the net realizable value of ourinventories.

Restricted Cash

Restrictedcash includes certificates of deposit used as cash collateral for bidproposals and contract performance guarantees.

Comprehensive Income

Comprehensive incomefor the three and nine months ended March 31, 2005 includes a foreigncurrency translation (loss) gain of approximately ($74,000) and$10,000, and the reversal of an unrealized loss on available-for-salesecurities of approximately $3,000 in the three months ended March 31,2005. Comprehensive loss for the three and nine months ended March 31,2004 includes a foreign currency translation gain of approximately$53,000 and $110,000 and an unrealized gain on available-for-salesecurities of approximately $195,000 for the nine months ended March31, 2004.

Accounting for Derivative Instrumentsand Hedging Activities

SFAS No. 133, Accounting for DerivativeInstruments and Hedging Activities, as amended by SFAS No. 138,Accounting for Certain Derivative Instruments and Certain HedgingActivities – an Amendment to SFAS No. 133, requires that allderivative instruments be recognized on the balance sheet at fairvalue. In addition, the standard specifies criteria for designation andeffectiveness of hedging relationships and establishes accounting rulesfor reporting changes in the fair value of a derivative instrumentdepending on the designated type of hedge.

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The Company, at times, enters into foreigncurrency exchange contracts (forward contracts) to manage its exposureto currency rate fluctuations on anticipated sales and purchases. Thesetypes of exchange contracts generally qualify for accounting asdesignated hedges. The realized and unrealized gains and losses onqualified contracts are deferred and included as components of therelated transactions. Any contracts that do not qualify as hedges foraccounting purposes are marked to market with the resulting gains andlosses recognized in other income or expense. At March 31, 2005 andJune 30, 2004 the Company had no outstanding foreign exchangecontracts.

Income Taxes

In assessing therealizability of deferred tax assets, management considers whether itis more likely than not that some portion or all of the deferred taxassets will be realized. The ultimate realization of the net deferredtax assets is dependent upon the generation of future taxable incomeprior to the expiration of any net operating loss carryforwards. Forthe nine months ended March 31, 2005 and the year ended June 30, 2004,due to the uncertainty regarding the Company's ability to utilizeits net operating losses in the future, the Company provided avaluation allowance against its previously recorded deferred tax assetsexcept for approximately $83,000, representing state investment taxcredit carryforwards that will be utilized to offset state capitaltaxes on the Company's combined state tax return. The Company hasused net operating loss carryforwards to offset the net income for thethree and nine months ended March 31, 2005.

Product Warranties

The Company offerswarranties on its contracts, the specific terms and conditions of whichvary depending upon the contract and work performed. Generally, a basiclimited warranty, including parts and labor, is provided to customersfor one year. The Company can recoup certain of these costs throughproduct warranties it holds with its original equipment manufacturers,which typically are one year in term. Historically, warranty expensehas been minimal, however, management periodically assesses the needfor any additional warranty reserve.

2.    Basicand Diluted Net Income (Loss) Per Common Share

The Companycomputes net income (loss) per common share in accordance with theprovisions of SFAS No. 128, Earnings Per Share. Basic and diluted netincome (loss) per common share is computed by dividing the net income(loss) for the period by the weighted-average number of commonequivalent shares outstanding for the period. Common equivalent sharesconsist of the incremental common shares issuable upon the conversionof preferred stock (using an if-converted method) and incrementalcommon shares issuable upon the exercise of stock options and warrants(using the treasury stock method). Incremental common equivalent shareswere excluded from the calculation of diluted net loss per common sharefor the three and nine months ended March 31, 2004, as their effect wasanti-dilutive. Diluted net loss per common share for the three and ninemonths ended March 31, 2004 excludes the effect of approximately491,000 and 268,000 stock options, respectively, and approximately33,000 warrants for the three months ended March 31, 2004, as theireffect would have been anti-dilutive.

3.    Inventories

Inventories consist of thefollowing:

|                                  |
|----------------------------------|
|                                  |  |  |  |  |  |  |  |  |  |  |
|                             |  | March31, 2005 |  | June 30,2004 |
|                             |  | (Unaudited) |  |   |
|                             |  | (Inthousands) |
| Raw materials and componentparts |  | $ | 129 |   |  | $ | 163 |   |
| Work-in-progress                 |  |   | 12,498 |   |  |   | 7,362 |   |
|                             |  |   | 12,627 |   |  |   | 7,525 |   |
| Lessprogresspayments             |  |   | (3,388 | )  |  |   | (3,621 | )  |
|                             |  | $ | 9,239 |   |  | $ | 3,904 |   |
|                                  |

4.    SegmentInformation

The Company operates through two business segments.Its ground segment systems, networks and enterprise solutions segment,through Globecomm Systems Inc. and Globecomm Systems Europe

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Limited, is engaged in the design, assemblyand installation of ground segment systems and networks. Its datacommunications services segment, through Globecomm Network ServicesCorporation, provides satellite communication servicescapabilities.

The Company's reportable segments arebusiness units that offer different products and services. Thereportable segments are each managed separately because they providedistinct products and services.

The following is theCompany's business segment information for the three and ninemonths ended March 31, 2005 and 2004 and as of March 31, 2005 and June30,2004:

|                                                         |  |                   |         |                  |  |              |         |              |  |        |        |         |  |        |         |         |  |  |
|---------------------------------------------------------|--|-------------------|---------|------------------|--|--------------|---------|--------------|--|--------|--------|---------|--|--------|---------|---------|--|--|
|                                                    |  | ThreeMonths Ended |         | Nine MonthsEnded |
|                                                    |  | March31,2005      |         | March 31,2004    |  | March31,2005 |         | March31,2004 |
|                                                    |  | (Unaudited)       |
|                                                    |  | (Inthousands)     |
| Revenues:                                               |  |              |    |             |  |         |    |         |  |   |   |    |  |   |    |    |
| Groundsegment systems, networks and enterprisesolutions |  | $                 | 23,443  |             |  | $            | 18,956  |         |  | $      | 69,722 |    |  | $      | 55,878  |    |
| Datacommunicationsservices                              |  |              | 4,741   |             |  |         | 3,305   |         |  |   | 13,149 |    |  |   | 10,544  |    |
| Totalrevenues                                           |  | $                 | 28,184  |             |  | $            | 22,261  |         |  | $      | 82,871 |    |  | $      | 66,422  |    |
| Income(loss) fromoperations:                            |  |              |    |             |  |         |    |         |  |   |   |    |  |   |    |    |
| Groundsegment systems, networks and enterprisesolutions |  | $                 | 577     |             |  | $            | (89     | )       |  | $      | 3,579  |    |  | $      | (1,826  | )  |
| Datacommunicationsservices                              |  |              | (275    | )           |  |         | (551    | )       |  |   | (307   | )  |  |   | (186    | )  |
| Interestincome                                          |  |              | 121     |             |  |         | 63      |         |  |   | 286    |    |  |   | 191     |    |
| Gainon sale ofinvestment                                |  |              | — |             |  |         | — |         |  |   | 40     |    |  |   | — |    |
| Gainon sale of available-for-salesecurities             |  |              | 132     |             |  |         | — |         |  |   | 132    |    |  |   | 91      |    |
| Intercompanyeliminations                                |  |              | 6       |             |  |         | 4       |         |  |   | 14     |    |  |   | 12      |    |
| Netincome(loss)                                         |  | $                 | 561     |             |  | $            | (573    | )       |  | $      | 3,744  |    |  | $      | (1,718  | )  |
| Depreciationandamortization:                            |  |              |    |             |  |         |    |         |  |   |   |    |  |   |    |    |
| Groundsegment systems, networks andenterprisesolutions  |  | $                 | 271     |             |  | $            | 314     |         |  | $      | 879    |    |  | $      | 1,068   |    |
| Datacommunicationsservices                              |  |              | 503     |             |  |         | 430     |         |  |   | 1,392  |    |  |   | 1,290   |    |
| Intercompanyeliminations                                |  |              | (6      | )           |  |         | (4      | )       |  |   | (14    | )  |  |   | (12     | )  |
| Totaldepreciation andamortization                       |  | $                 | 768     |             |  | $            | 740     |         |  | $      | 2,257  |    |  | $      | 2,346   |    |
| Expendituresfor long-livedassets:                       |  |              |    |             |  |         |    |         |  |   |   |    |  |   |    |    |
| Groundsegment systems, networks andenterprisesolutions  |  | $                 | 86      |             |  | $            | 174     |         |  | $      | 279    |    |  | $      | 306     |    |
| Datacommunicationsservices                              |  |              | 693     |             |  |         | 330     |         |  |   | 2,019  |    |  |   | 730     |    |
| Intercompanyeliminations                                |  |              | (42     | )           |  |         | 22      |         |  |   | (42    | )  |  |   | (3      | )  |
| Totalexpenditures for long-livedassets                  |  | $                 | 737     |             |  | $            | 526     |         |  | $      | 2,256  |    |  | $      | 1,033   |    |
|                                                         |

|                                                         |  |               |         |             |  |        |         |         |  |  |
|---------------------------------------------------------|--|---------------|---------|-------------|--|--------|---------|---------|--|--|
|                                                    |  | March31,2005  |         | June30,2004 |
|                                                    |  | (Unaudited)   |         |        |
|                                                    |  | (Inthousands) |
| Assets:                                                 |  |          |    |        |  |   |    |    |
| Groundsegment systems, networks and enterprisesolutions |  | $             | 136,658 |        |  | $      | 125,534 |    |
| Datacommunicationsservices                              |  |          | 14,844  |        |  |   | 11,501  |    |
| Intercompanyeliminations                                |  |          | (67,897 | )      |  |   | (63,560 | )  |
| Totalassets                                             |  | $             | 83,605  |        |  | $      | 73,475  |    |
|                                                         |

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5.    Settlement Agreement

TheCompany reached a $4.0 million settlement in July 2004 relating toamounts due under a contract with a major customer. The Company hadrecorded a $4.5 million charge in the fourth quarter of fiscal 2003 ofwhich $1.5 million and $3.0 million was included in general andadministrative expenses and costs from ground segment systems,networks, and enterprise solutions, respectively. This settlementresulted in a $0.9 million cost recovery to costs from ground segmentsystems, networks and enterprise solutions and a $1.5 million bad debtrecovery included in general and administrative expenses, both of whichreversed a portion of the previous charge. The balance of $1.6 millionrelated to a $1.2 million account receivable due to the Company, whichwas not subject to the charge, and covered $0.4 million in costs tocomplete the program.

6.    Related Party Transaction

In January 2003, the Company entered into a letter agreement with anindividual who is a former executive officer and current employee ofthe Company, pursuant to which the Company consolidated the thenoutstanding loans and advances receivable from such individual into apromissory note of approximately $321,000. Under the terms of theletter agreement the Company agreed to forgive the outstandingprincipal and interest amounts due on the promissory note in fiveannual installments, so long as the former executive officer remains anemployee. In March 2005, the Company forgave the second installment ofapproximately $71,000.

Item 2.    Management'sDiscussion and Analysis of Financial Condition and Results ofOperations.

You should read the following discussion of ourfinancial condition and results of operations with the consolidatedfinancial statements and related notes included elsewhere in thisQuarterly Report on Form 10-Q. This discussion contains, in addition tohistorical information, forward-looking statements, within the meaningof the Private Securities Litigation Reform Act of 1995, based on ourcurrent expectations, assumptions, estimates and projections. Theseforward-looking statements involve risks and uncertainties. Our actualresults could differ materially from those anticipated in theseforward-looking statements as a result of certain factors, such as,among others, uncertain demand for our services and products due toeconomic and industry-specific conditions, the risks associated withoperating in international markets and our dependence on a limitednumber of contracts for a high percentage of our revenues. These risksand others are more fully described in the "RiskFactors" section of this Quarterly Report and in our otherfilings with the Securities and Exchange Commission, including ourAnnual Report on Form 10-K and Quarterly Reports on Form 10-Q. Weundertake no obligation to update publicly any forward-lookingstatements for any reason, even if new information becomes available orother events occur in the future.

Overview

Since ourinception, a majority of our revenues have been generated by our groundsegment systems, networks and enterprise solutions business. Contractsfor the ground segment systems, networks and enterprise solutions anddata communications services have been fixed-price contracts in amajority of cases. Profitability of such contracts is subject toinherent uncertainties as to the cost of performance. In addition topossible errors or omissions in making initial estimates, cost overrunsmay be incurred as a result of unforeseen obstacles, including bothphysical conditions and unexpected problems encountered in engineeringdesign and testing. Since our business is frequently concentrated in alimited number of large contracts, a significant cost overrun on anycontract could have a material adverse effect on our business,financial condition and results of operations.

Contract costsgenerally include purchased material, direct labor, overhead and otherdirect costs. Anticipated contract losses are recognized in the periodidentified. Costs from ground segment systems, networks and enterprisesolutions consist primarily of the costs of purchased materials(including shipping and handling costs), direct labor and relatedoverhead expenses, project-related travel and living costs andsubcontractor salaries. Costs from data communications services consistprimarily of satellite space segment charges, Internet connectivityfees and network operations 

13

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expenses. Satellite space segment chargesconsist of the costs associated with obtaining satellite bandwidth (themeasure of capacity) used in the transmission of services to and fromthe satellite leased from operators. Network operations expensesconsist primarily of costs associated with the operation of the networkoperations center on a twenty-four hour a day, seven-day a week basis,including personnel and related costs and depreciation. Selling andmarketing expenses consist primarily of salaries, travel and livingcosts for sales and marketing personnel. Research and developmentexpenses consist primarily of salaries and related overhead expenses.General and administrative expenses consist of expenses associated withour management, finance, contract and administrative functions.

Our business had been adversely affected by the global economicslowdown and, in particular, the significant challenges facing thetelecommunications industry worldwide. Recently, we have seenimprovement in the segments we serve, in particular within the U.S.Government and government related entities marketplace. However, someof the adverse consequences of the downturn continue to impact ourbusiness based upon the inability of some of our customers andprospects to raise capital to fund projects, particularly, indeveloping countries.

We currently have two significantcontracts with the Ministry of Communication of the IslamicTransitional State of Afghanistan, and derived 34% of ourrevenues in the three months ended March 31, 2005 from these contracts.Further hostilities in Afghanistan, or in connection with any armedconflict affecting areas where our customers are located may impact ourperformance on these contracts, which may impact our results ofoperations.

Critical Accounting Policies

Certain of ouraccounting policies require judgment by management in selecting theappropriate assumptions for calculating financial estimates. By theirnature, these judgments are subject to an inherent degree ofuncertainty. These judgments are based on our historical experience,terms of existing contracts, our observance of trends in the industry,information provided by our customers and information available fromother outside sources, as appropriate. Actual results may differ fromthese judgments under different assumptions or conditions. Ouraccounting policies that require management to apply significantjudgment include:

Revenue Recognition

We recognizerevenue in accordance with SAB 104, Revenue Recognition, for ourproduction-type contracts that are sold separately as standardsatellite ground segment systems when persuasive evidence of anarrangement exists, the selling price is fixed or determinable,collectibility is reasonably assured, delivery has occurred and thecontractual performance specifications have been met. Our standardsatellite ground segment systems produced in connection with thesecontracts are typically short-term (less than twelve months in term)and manufactured using a standard modular production process. Suchsystems require less engineering, drafting and design efforts than ourlong-term complex production-type projects. Revenue is recognized onour standard satellite ground segment systems upon shipment andacceptance of factory performance testing which is when title transfersto the customer. The amount of revenues recorded on each standardproduction-type contract is reduced by the customer's contractualholdback amount, which typically requires 10% to 30% ofthe contract value to be retained by the customer until installationand final acceptance is complete. The customer generally becomesobligated to pay 70% to 90% of the contract value uponshipment and acceptance of factory performance testing. Installation isnot deemed to be essential to the functionality of the system sinceinstallation does not require significant changes to the features orcapabilities of the equipment, does not require complex softwareintegration and interfacing and we have not experienced anydifficulties installing such equipment. In addition, the customer orother third party vendors can install the equipment. The estimatedrelative fair value of the installation services is determined bymanagement, which is typically less than the customer'scontractual holdback percentage. If the holdback is less than the fairvalue of installation, we will defer recognition of revenues,determined on a contract-by-contract basis equal to the fair value ofthe installation services. Payments received in advance by customersare deferred until shipment and are presented as deferred revenues.

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We recognize revenue using thepercentage-of-completion method of accounting upon the achievement ofcertain contractual milestones in accordance with SOP 81-1, Accountingfor Performance of Construction-Type and Certain Production-TypeContracts, for our non-standard, complex production-type contracts forthe production of satellite ground segment systems and equipment thatare generally integrated into the customers' satellite groundsegment network. The equipment and systems produced in connection withthese contracts are typically long-term (in excess of twelve months interm) and require significant customer-specific engineering, draftingand design effort in order to effectively integrate all of thecustomizable earth station equipment into the customers' groundsegment network. These contracts generally have larger contract values,greater economic risks and substantive specific contractual performancerequirements due to the engineering and design complexity of suchsystems and related equipment. Progress payments received in advance bycustomers are netted against the inventory balance.

Costsfrom Ground Segment Systems, Networks and Enterprise Solutions

Costs related to our production-type contracts and our non-standard,complex production-type contracts rely on estimates based on totalexpected contract costs. We use estimates of the costs applicable tovarious elements which we believe are reasonable. Since these contractcosts depend on estimates, which are assessed continually during theterm of these contracts, costs are subject to revisions as the contractprogresses to completion. Revision in cost estimates are reflected inthe period in which they become known. In the event an estimateindicates that a loss will be incurred at completion, we record thecosts in the period identified.

Goodwill

Goodwillrepresents the excess of the purchase price of businesses over the fairvalue of the identifiable net assets acquired. In accordance with SFASNo. 142, Goodwill and Other Intangible Assets, goodwill and otherindefinite life intangible assets are no longer amortized, but insteadtested for impairment at least annually. The impairment test forgoodwill uses a two-step approach, which is performed at the reportingunit level. Step one compares the fair value of the reporting unit(calculated using a discounted cash flow method) to its carrying value.If the carrying value exceeds the fair value, there is a potentialimpairment and step two must be performed. Step two compares thecarrying value of the reporting unit's goodwill to its impliedfair value (i.e., fair value of the reporting unit less the fair valueof the unit's assets and liabilities, including identifiableintangible assets). If the carrying value of goodwill exceeds itsimplied fair value, the excess is required to be recorded as animpairment charge. There have been no events during the nine monthsended March 31, 2005 that would result in any goodwill impairment.

Allowances for Doubtful Accounts

We maintainallowances for doubtful accounts for estimated losses resulting fromthe inability of our customers to make required payments. We assess thecustomer's ability to pay based on a number of factors, includingour past transaction history with the customer and the creditworthinessof the customer. An assessment of the inherent risks in conducting ourbusiness with foreign customers is also made since a significantportion of our revenues is international. Management specificallyanalyzes accounts receivable, historical bad debts, customerconcentrations, customer creditworthiness and current economic trends.If the financial condition of our customers were to deteriorate in thefuture, resulting in an impairment of their ability to make payments,additional allowances may be required.

The allowance fordoubtful accounts at March 31, 2005 and June 30, 2004 was $0.8 millionand $2.6 million, respectively. The decrease in the allowance primarilyrelated to a bad debt recovery of approximately $1.5 million under asettlement reached with a major customer in July 2004.

Inventories

Inventories consist primarily ofwork-in-progress from costs incurred in connection with specificcustomer contracts, which are stated at the lower of cost or marketvalue. In assessing the realizability of inventories, we are requiredto make estimates of the total contract costs based on the various

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elements of the work-in-progress. It ispossible that changes to these estimates could cause a reduction in thenet realizable value of our inventories.

Results ofOperations

Three and Nine Months Ended March 31, 2005and 2004

Revenues from Ground Segment Systems, Networks andEnterprise Solutions.    Revenues increased by $4.5 million, or23.7%, to $23.4 million for the three months ended March 31,2005 and increased by $13.8 million, or 24.8%, to $69.7 millionfor the nine months ended March 31, 2005, compared to $19.0 million and$55.9 million for the three and nine months ended March 31, 2004,respectively. The increases in revenue were primarily the result ofincreased infrastructure sales in the U.S. Government and governmentrelated entities marketplace, primarily driven by sales to Ministry ofCommunication of the Islamic Transitional State of Afghanistan, coupledwith increased sales due to an overall improvement in thetelecommunications industry segments we serve and the achievement ofshipment milestones associated with projects currently in progressoffset by a decrease in sales at Globecomm Systems Europe Limited.

Revenues from Data Communication Services.    Revenuesincreased by $1.4 million, or 43.4%, to $4.7 million for thethree months ended March 31, 2005 and increased by $2.6 million, or24.7%, to $13.1 million for the nine months ended March 31,2005, compared to $3.3 million and $10.5 million for the three and ninemonths ended March 31, 2004, respectively. The increase was due to theincrease in Video Broadcast service offerings and the Voice OverInternet Protocol (VOIP) service.

Costs from Ground SegmentSystems, Networks and Enterprise Solutions.    Costs from groundsegment systems, networks and enterprise solutions increased by $3.3million, or 20.6%, to $19.5 million for the three months endedMarch 31, 2005 and increased by $9.3 million, or 18.9% to $58.6million for the nine months ended March 31, 2005, compared to $16.2million and $49.3 million for the three and nine months ended March 31,2004, respectively. Costs as a percentage of related revenues decreasedto 83.3% and 84.0% for the three and nine months endedMarch 31, 2005, respectively, compared to 85.4% and 88.2%for the three and nine months ended March 31, 2004, respectively. Thedecrease was mainly attributable to a non-recurring cost recoveryrelated to a settlement with a large customer of $0.9 million for thenine months ended March 31, 2005 and increased margin on revenuesrelated to the U.S. Government and government related entities projectsin the three and nine months ended March 31, 2005.

Costs fromData Communications Services.    Costs from data communicationsservices increased by $1.0 million, or 33.4%, to $4.2 millionfor the three months ended March 31, 2005 and increased by $1.5million, or 15.4%, to $11.1 million for the nine months endedMarch 31, 2005, compared to $3.1 million and $9.6 million for the threeand nine months ended March 31, 2004, respectively. The increase is aresult of additional space segment costs required for the VideoBroadcast service offerings and the minutes cost for the Voice OverInternet Protocol (VOIP) service.

Selling andMarketing.    Selling and marketing expenses increased by $0.3million, or 21.1%, to $1.5 million for the three months endedMarch 31, 2005 and increased by $0.6 million, or 16.4%, to $4.0million for the nine months ended March 31, 2005, compared to $1.2million and $3.5 million for the three and nine months ended March 31,2004, respectively. The increase in selling and marketing costs is aresult of increased salary and salary related expenses for additionalmarketing personnel.

Research andDevelopment.    Research and development expenses remainedconstant at $0.2 million for the three months ended March 31, 2005 andMarch 31, 2004 and decreased by $0.3 million, or 26.2%, to $0.7million for the nine months ended March 31, 2005, compared to $1.0million for the nine months ended March 31, 2004. The decrease wasprincipally due to non-recurrence of costs associated with productresearch and development associated with projects in process in thenine months ended March 31, 2004.

General andAdministrative.    General and administrative expenses increasedby $0.3 million, or 21.1%, to $2.5 million for the three monthsended March 31, 2005 and increased by $0.1 million, or 

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1.0%, to $5.2 million for the ninemonths ended March 31, 2005, compared to $2.1 million and $5.1 millionfor the three and nine months ended March 31, 2004, respectively. Theincrease in general and administrative expenses for the three monthsended March 31, 2005 was primarily due to an increase in the accountsreceivable allowance at our data communication services business, anincrease in accounting fees related to the implementation of Section404 of the Sarbanes-Oxley Act of 2002, and termination costscollectively. Although, general and administrative expenses wereconsistent for the nine months ended March 31, 2005 and 2004, generaland administrative expenses included a bad debt recovery of $1.5million as a result of a settlement reached with a customer offset byan increase of $0.5 million in the accounts receivable allowance at ourdata communication services business, an increase in accounting feesrelated to the implementation of Section 404 of the Sarbanes-Oxley Actof 2002, and termination costs collectively as compared to the $1.0million recovery in the nine months ended March 31, 2004.

Gain on Sale of Available-for-Sale Securities.    The gainon sale of available-for-sale securities of $0.1 million for the threeand nine months ended March 31, 2005, related to the sale of aninvestment that resulted in proceeds of $0.3 million in the nine monthsended March 31, 2005.

Interest Income.    Interestincome increased for the three and nine months ended March 31, 2005 ascompared to March 31, 2004 due to increased interest rates coupled withan increase in the balance of cash and cash equivalents.

Liquidity and Capital Resources

At March 31, 2005, we hadworking capital of $35.7 million, including cash and cash equivalentsof $22.4 million, restricted cash of $3.9 million, net accountsreceivable of $23.4 million, inventories of $9.2 million, prepaidexpenses and other current assets of $0.9 million, offset by $18.0million in accounts payable, $2.4 million in deferred revenues and $3.8million in accrued expenses and other current liabilities.

Netcash used in operating activities during the nine months ended March31, 2005 was $4.0 million, which primarily related to an increase inaccounts receivable of $7.7 million relating to the increase inrevenues, an increase in inventory of $5.5 million due to timing ofshipments of certain jobs, a decrease in the provision for doubtfulaccounts, due to a bad debt recovery of $1.4 million, offset in part bynet income of $3.7 million, an increase in accounts payable of $2.5million relating to the increase in revenues and the timing of vendorpayments, an increase in deferred revenue of $1.3 million due to timingdifferences between project billings and revenue recognition milestonesresulting from specific customer contracts, and a non-cash itemrepresenting depreciation and amortization expense of $2.3 millionprimarily related to the network operations center and satellite earthstation equipment.

Net cash used in investing activities duringthe nine months ended March 31, 2005 was $3.9 million, which related tothe purchase of $2.3 million of fixed assets primarily for our networkoperations center, specifically related to the Video Broadcast and VOIPplatforms, an increase in restricted cash of $2.0 million based oncertificates of deposit issued as collateral for performance andpayment guarantees offset by proceeds received of $0.3 million from thesale of available-for-sale securities.

Net cash provided byfinancing activities during the nine months ended March 31, 2005 was$2.1 million which primarily related to $1.3 million of proceeds fromthe exercise of warrants issued in connection with our privateplacement in December 2003 and $0.7 million of proceeds from theexercise of stock options.

We have a credit agreement in placewhich provides for a working capital credit facility of up to $16.5million, which expires in October 2005. We may be advanced up to80% of eligible accounts receivable and 100% ofunrestricted cash and cash equivalents at the bank. The line of creditbears interest at the greater of 6.0% per annum or the primerate plus 1.5% per annum, and is collateralized by a firstsecurity interest on all of our personal property. The credit agreementallows us to borrow and apply letters of credit against theavailability under the line of credit. In addition, the credit

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agreement contains certain financial andother covenants, deposit requirements, monthly reporting provisions andother requirements, as defined in the credit agreement, with which wewere in compliance at March 31, 2005. As of March 31, 2005, noborrowings were outstanding under this credit facility, however, therewere standby letters of credit of approximately $15.3 million, whichwere applied against and reduced the amounts available under thiscredit facility.

We lease satellite space segment services andother equipment under various operating lease agreements, which expirein various years through 2009. Future minimum lease payments due onthese leases through March 31, 2006 are approximately $9.5 million.

At March 31, 2005 we had contractual obligations and commercialcommitments as follows (in thousands):

|                                 |  |                      |        |                |  |           |        |           |  |             |        |        |  |        |         |        |  |        |                     |        |  |  |
|---------------------------------|--|----------------------|--------|----------------|--|-----------|--------|-----------|--|-------------|--------|--------|--|--------|---------|--------|--|--------|---------------------|--------|--|--|
|                            |  | PaymentsDue byPeriod |
|                            |  | Total                |        | Lessthan 1year |  | 1-3 years |        | 4-5 years |  | After5years |
| **ContractualObligations**      |  |                 |   |           |  |      |   |      |  |        |   |   |  |   |    |   |  |   |                |   |
| Operatingleases                 |  | $                    | 18,970 |           |  | $         | 9,524  |      |  | $           | 8,455  |   |  | $      | 991     |   |  | $      |   — |   |
| Total contractualobligations    |  | $                    | 18,970 |           |  | $         | 9,524  |      |  | $           | 8,455  |   |  | $      | 991     |   |  | $      | —             |   |
| **Other CommercialCommitments** |  |                 |   |           |  |      |   |      |  |        |   |   |  |   |    |   |  |   |                |   |
| Standbyletters ofcredit         |  | $                    | 15,338 |           |  | $         | 10,865 |      |  | $           | 4,473  |   |  | $      | — |   |  | $      | —             |   |
| Total commercialcommitments     |  | $                    | 15,338 |           |  | $         | 10,865 |      |  | $           | 4,473  |   |  | $      | — |   |  | $      | —             |   |
|                                 |

On November 7, 2001, theBoard of Directors authorized a stock repurchase program whereby we canrepurchase up to $2.0 million of our outstanding stock, representingapproximately 3.7% of the total shares outstanding on that date.Since November 2001, we have repurchased an aggregate of 317,606 sharesfor approximately $1.7 million. The timing, price, quantity and mannerof future purchases will be at the discretion of management, dependingon market conditions and other factors, subject to compliance with theapplicable securities laws.

We expect that our cash and workingcapital requirements for operating activities will continue to increaseas we continue to implement our business strategy. Managementanticipates additional working capital requirements for work inprogress for orders as obtained and that we may experience negativecash flows due to quarter-to-quarter operating performance.

Globecomm Network Services Corporation has had, and we expect itwill continue to have, working capital and additional capitalexpenditure requirements, which have, and may continue to put increasedpressure on our capital resources.

Our future capitalrequirements will depend upon many factors, including the success ofour marketing efforts in the ground segment systems, networks and datacommunications services business, the nature and timing of customerorders and the level of capital requirements related to the expansionof our service offerings. Based on current plans, we believe that ourexisting capital resources will be sufficient to meet working capitalrequirements at least through March 31, 2006. However, we cannot assureyou that there will be no unforeseen events or circumstances that wouldconsume available resources significantly before that time. Forexample, future events occurring in response to the hostilities in Iraqand Afghanistan, or in connection with any armed conflict, including,without limitation, future terrorist attacks against the United Statesor its allies or military or trade or travel disruptions impacting ourability to sell and market our products and services in the UnitedStates and internationally may impact our results of operations. Inparticular, we currently have two significant contracts with theMinistry of Communication of the Islamic Transitional State ofAfghanistan. Unexpected events negatively impacting internationalcommerce, including additional conflicts in the Middle East, coulddefer our ability to close contracts with international customers.Additional funds may not be available when needed and, even ifavailable, additional funds may be raised through financingarrangements and/or the issuance of preferred or common stock orconvertible securities on terms and prices significantly more favorablethan those of the currently outstanding common stock, which could havethe effect of diluting or adversely affecting the holdings or rights ofour existing stockholders. If adequate funds are unavailable, we may berequired to delay, 

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scale back or eliminate some of ouroperating activities, including, without limitation, the timing andextent of our marketing programs, capital expenditures, research anddevelopment activities and we may be required to reduce headcount. Wecannot assure you that additional financing will be available to us onacceptable terms, or at all.

Risk Factors

We have hada history of operating losses and negative cash flow. Our negative cashflows may increase as we pursue our business plan and our losses mayreoccur, which may strain our capital resources.

Although,recently we have had profitable quarters, we have incurred significantnet losses since we began operating in August 1994. We incurred netlosses of $1.3 million during the fiscal year ended June 30, 2004,$19.6 million during the fiscal year ended June 30, 2003, and $17.3million during the fiscal year ended June 30, 2002. As of March 31,2005 our accumulated deficit was $71.5 million. Our ability to achieveand maintain profitability will depend upon our ability to generatesignificant revenues through new profitable customer contracts and theexpansion of our existing products and services, including our datacommunications services. We cannot assure you that we will be able toobtain new profitable customer contracts or generate significantadditional revenues from those contracts or any new products orservices that we introduce. We may not be able to sustain or increaseour profits on a quarterly or annual basis in the future, which willnegatively impact our operating cash flows.

Since sales ofsatellite communications equipment are dependent on the growth ofcommunications networks, if market demand for these networks declines,our revenue and profitability are likely to decline.

We derive,and expect to continue to derive, a significant amount of revenues fromthe sale of satellite ground segment systems and networks. If thelong-term growth in demand for communications networks does notcontinue to return from recent depressed levels, the demand for oursatellite ground segment systems and networks may decline or grow moreslowly than we expect. As a result, we may not be able to grow ourbusiness, our revenues may decline from current levels and our resultsof operations may be harmed. The demand for communications networks andthe products used in these networks is affected by various factors,many of which are beyond our control. For example, the uncertaingeneral economic conditions have affected the overall rate of capitalspending by many of our customers. Also, many companies have found itdifficult to raise capital to finish building their communicationsnetworks and, therefore, have placed fewer orders. The economicslowdown resulted in a softening of demand from our customers. Wecannot predict the extent to which demand will increase. Further,increased competition among satellite ground segment systems andnetworks manufacturers has increased pricing pressures. Recently, wehave seen improvement in the segments we serve, in particular withinthe U.S. Government and government related entities marketplace. Afuture reduction in opportunities from U.S. Government and governmentrelated agencies will negatively impact our results of operations.

We derive a substantial portion of our revenues from fixed-priceprojects, under which we assume greater financial risk if we fail toaccurately estimate the costs of the projects.

We derive asubstantial portion of our revenues from fixed-price projects. Weassume greater financial risks on a fixed-price project than on atime-and-expense based project. If we miscalculate the resources ortime we need for these fixed-price projects, the costs of completingthese projects may exceed our original estimates, which wouldnegatively impact our results of operations.

Risks associatedwith operating in international markets could restrict our ability toexpand globally and harm our business and prospects.

We marketand sell our products and services in the United States andinternationally. We anticipate that international sales will continueto account for a significant portion of our total 

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revenues for the foreseeable future with asignificant portion of the international revenue coming from developingcountries, including countries in areas of conflict like Afghanistan.There are a number of risks inherent in conducting our businessinternationally, including:

|              |                                                                                                                                                                                                                                    |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | generalpolitical and economic instability in international markets, includingthe hostilities in Iraq and Afghanistan, could impede our ability todeliver our products and services to customers and harm our results ofoperations; |

|              |                                                                                                                 |
|--------------|-----------------------------------------------------------------------------------------------------------------|
| •  | changes in regulatoryrequirements could restrict our ability to deliver services to ourinternational customers; |

|              |                                                                                                                                  |
|--------------|----------------------------------------------------------------------------------------------------------------------------------|
| •  | exportrestrictions, tariffs, licenses and other trade barriers could preventus from adequately equipping our network facilities; |

|              |                                                                                                                                           |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------|
| •  | differing technology standards acrosscountries may impede our ability to integrate our products and servicesacross international borders; |

|              |                                                                                                                                                                                                               |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | protectionist laws and business practicesfavoring local competition may give unequal bargaining leverage to keyvendors in countries where competition is scarce, significantlyincreasing our operating costs; |

|              |                                                                                                               |
|--------------|---------------------------------------------------------------------------------------------------------------|
| •  | increased expenses associated withmarketing services in foreign countries could affect our ability tocompete; |

|              |                                                                                                                                              |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------|
| •  | relying on localsubcontractors for installation of our products and services couldadversely impact the quality of our products and services; |

|              |                                                                                              |
|--------------|----------------------------------------------------------------------------------------------|
| •  | difficulties in staffing and managingforeign operations could affect our ability to compete; |

|              |                                                                  |
|--------------|------------------------------------------------------------------|
| •  | potentially adverse taxes could affect ourresults of operations; |

|              |                                                                           |
|--------------|---------------------------------------------------------------------------|
| •  | complex foreignlaws and treaties could affect our ability to compete; and |

|              |                                                                                                 |
|--------------|-------------------------------------------------------------------------------------------------|
| •  | difficulties in collecting accountsreceivable could adversely affect our results of operations. |

These and other risks could impede our ability to manage ourinternational operations effectively, limit the future growth of ourbusiness, increase our costs and require significant managementattention.

If Globecomm Network Services Corporation does notexecute its business strategy or if the market for its services failsto develop or develops more slowly than it expects, our results ofoperations will be harmed.

Globecomm Network ServicesCorporation's future revenues and results of operations aredependent on its execution of its business strategy and development ofthe market for its current and future services. Despite the settlementagreements which modified and reduced our satellite bandwidthobligations, we cannot assure you that the transponder space will beefficiently and substantially utilized or that an increase in orderswill be realized. Globecomm Network Services Corporation has had, andwe expect will continue to have, cash requirements, which have and willdecrease our cash resources. If Globecomm Network Services Corporationdoes not efficiently and substantially utilize its transponder spacecapacity and increase its level of orders, its cash requirements mayincrease and our results of operations will be harmed. In addition,significant capital expenditures have been required as we have builtour VOIP and Video Broadcast service offerings. If our VOIP and VideoBroadcast service offerings are not accepted, or if the market fails togrow, we cannot assure you that we will be able to realize anappropriate return on these capital expenditures.

You shouldnot rely on our quarterly operating results as an indication of ourfuture results because they are subject to significant fluctuations,and if we fail to meet the expectations of public market analysts orinvestors, our stock price could decline significantly.

Ourfuture revenues and results of operations may significantly fluctuatedue to a combination of factors, including:

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|              |                                                          |
|--------------|----------------------------------------------------------|
| •  | delays and/or adecrease in the booking of new contracts; |

|              |                                                                                                                         |
|--------------|-------------------------------------------------------------------------------------------------------------------------|
| •  | general political and economic conditionsin the United States and abroad, including hostilities in Iraq andAfghanistan; |

|              |                                                                       |
|--------------|-----------------------------------------------------------------------|
| •  | the length of time neededto initiate and complete customer contracts; |

|              |                                                                     |
|--------------|---------------------------------------------------------------------|
| •  | the demand for and acceptance of ourexisting products and services; |

|              |                                                                                                                                      |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------|
| •  | thecost of providing our products and services, including the ability toship and install our products and services in hostile areas; |

|              |                                                  |
|--------------|--------------------------------------------------|
| •  | the cost of performance on fixed pricecontracts; |

|              |                                                |
|--------------|------------------------------------------------|
| •  | market acceptance of newproducts and services; |

|              |                                                                                                        |
|--------------|--------------------------------------------------------------------------------------------------------|
| •  | the mix ofrevenue between our standard products, custom-built products and ourcommunications services; |

|              |                                              |
|--------------|----------------------------------------------|
| •  | the timing ofsignificant marketing programs; |

|              |                                                     |
|--------------|-----------------------------------------------------|
| •  | ourability to hire and retain additional personnel; |

|              |                                     |
|--------------|-------------------------------------|
| •  | the competition in our markets; and |

|              |                                                                                                                                                                                     |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | difficult global economic conditions andthe currency devaluations in international markets, which haveadversely impacted and may continue to adversely impact our quarterlyresults. |

Accordingly, you should not rely on quarter-to-quartercomparisons of our results of operations as an indication of our futureperformance. It is possible that in future periods our results ofoperations may be below market expectations, which could cause thetrading price of our common stock to decline.

Our markets arehighly competitive and we have many established competitors, and we maylose market share as a result.

The markets in which we operateare highly competitive and this competition could harm our ability tosell our products and services on prices and terms favorable to us. Ourprimary competitors in the satellite ground segment systems andnetworks market generally fall into two groups: (1) system integrators,like Spacelink, ITT, Data Path, and Global Communication Solutions, and(2) equipment manufacturers which also provide integrated systems, likeAndrew Corporation, General Dynamics, Alcatel and ND Satcom AG.

In the end-to-end satellite-based communication solutions andcommunications services markets, we compete with other satellitecommunication companies who provide similar services, like Globecast,Americom Government Services and Convergent Media Systems. In addition,we may compete with other communications service providers likeEchostar and MCI, and satellite owners like Panamsat, Loral Skynet, NewSkies Satellites N.V. and Intelsat. We anticipate that our competitorsmay develop or acquire services that provide functionality that issimilar to that provided by our services and that those services may beoffered at significantly lower prices or bundled with other services.These competitors may have the financial resources to withstandsubstantial price competition, may be in a better position to enduredifficult economic conditions in international markets and may be ableto respond more quickly than we can to new or emerging technologies andchanges in customer requirements. Moreover, many of our competitorshave more extensive customer bases, broader customer relationships andbroader industry alliances than we do that they could use to theiradvantage in competitive situations.

The markets in which weoperate have limited barriers to entry, and we expect that we will faceadditional competition from existing competitors and new marketentrants in the future. Moreover, our current and potential competitorshave established or may establish strategic relationships amongthemselves or with third parties to increase the ability of theirproducts and services to address the needs of our current andprospective customers. The potential strategic relationships ofexisting and new competitors may rapidly acquire significant marketshare, which would harm our business and financial condition.

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If the satellite communications industryfails to continue to develop or new technology makes it obsolete, ourbusiness and financial condition will be harmed.

Our businessis dependent on the continued success and development of satellitecommunications technology, which competes with terrestrialcommunications transport technologies like terrestrial microwave,coaxial cable and fiber optic communications systems. Fiber opticcommunications systems have penetrated areas in which we havetraditionally provided services. If the satellite communicationsindustry fails to continue to develop, or if any technologicaldevelopment significantly improves the cost or efficiency of competingterrestrial systems relative to satellite systems, then our businessand financial condition would be materially harmed.

We may beunable to raise additional funds to meet our capital requirements inthe future.

We believe that our available cash resources willbe sufficient to meet our working capital and capital expenditurerequirements through at least March 31, 2006. However, our futureliquidity and capital requirements are difficult to predict, as theydepend on numerous factors, including the success of our existingproduct and service offerings, as well as competing technological andmarket developments. We may need to raise additional funds in order tomeet additional working capital requirements and to support additionalcapital expenditures. Should this need arise, additional funds may notbe available when needed and, even if additional funds are available,we may not find the terms favorable or commercially reasonable. Ifadequate funds are unavailable, we may be required to delay, reduce oreliminate some of our operating activities, including marketingprograms and research and development programs. If we raise additionalfunds by issuing equity securities, our existing stockholders will owna smaller percentage of our capital stock and new investors may payless on average for their securities than, and could have rightssuperior to, existing stockholders.

A limited number ofcustomer contracts account for a significant portion of our revenues,and the inability to replace a key customer contract would adverselyaffect our results of operations, business and financialcondition.

We rely on a small number of customer contracts fora large portion of our revenue. Specifically, we have agreements withfour customers to provide equipment and services, from which we expectto generate a significant portion of our revenues. We derived34% and 10% of our revenues in the three months endedMarch 31, 2005 from the Ministry of Communication of the IslamicTransitional State of Afghanistan and the United Nations, respectively.If any of these customers is unable to implement its business plan, themarket for these customers' services declines, or if all or anyof the customers modifies or terminates its agreement with us, and weare unable to replace these contracts, our results of operations,business and financial condition would be materially harmed.

Ifour products and services are not accepted in developing countries withemerging markets, our revenues will be impaired.

We anticipatethat a substantial portion of the growth in the demand for our productsand services will come from customers in developing countries due to alack of basic communications infrastructure in these countries.However, we cannot guarantee an increase in the demand for our productsand services in developing countries or that customers in thesecountries will accept our products and services at all. Our ability topenetrate emerging markets in developing countries is dependent uponvarious factors including:

|              |                                                                                                                                                                                              |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | the speedat which communications infrastructure, including terrestrialmicrowave, coaxial cable and fiber optic communications systems, whichcompete with satellite-based services, is built; |

|              |                                                                                                                          |
|--------------|--------------------------------------------------------------------------------------------------------------------------|
| •  | the effectiveness of our local resellersand sales representatives in marketing and selling our products andservices; and |

|              |                                                          |
|--------------|----------------------------------------------------------|
| •  | the acceptance of ourproducts and services by customers. |

If our products and servicesare not accepted, or the market potential we anticipate does notdevelop, our revenues will be impaired.

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We depend upon certain key personnel andmay not be able to retain these employees. If we lose the services ofthese individuals or cannot hire additional qualified personnel, ourbusiness will be harmed.

Our success also depends to asubstantial degree on our ability to attract, motivate and retain otherhighly-qualified personnel. There is considerable competition for theservices of highly-qualified technical and engineering personnel. Wemay not be able either to retain our current personnel or hireadditional qualified personnel if and when needed.

Our futureperformance depends on the continued service of our key technical,managerial and marketing personnel; in particular, David Hershberg,Kenneth Miller, Stephen Yablonski and Donald Woodring. The employmentof any of our key personnel could cease at any time.

Unauthorized use of our intellectual property by third parties maydamage our business.

We regard our trademarks, trade secretsand other intellectual property as beneficial to our success.Unauthorized use of our intellectual property by third parties maydamage our business. We rely on trademark, trade secret and patentprotection and contracts, including confidentiality and licenseagreements with our employees, customers, strategic collaborators,consultants and others, to protect our intellectual property rights.Despite our precautions, it may be possible for third parties to obtainand use our intellectual property without our authorization.

Wecurrently have been granted three patents in the United States, one forremote access to the Internet using satellites, one for satellitecommunication with automatic frequency control, and one for a monitorand control system for satellite communications networks and the like.We have two other patents pending in the United States, one forimplementing facsimile and data communications using Internet Protocolsand another for a distributed satellite-based cellular network. Wecurrently have one Patent Cooperation Treaty patent application pendingfor implementing facsimile and data communications using InternetProtocols. We also intend to seek further patents on our technology, ifappropriate. We cannot assure you that patents will be issued for anyof our pending or future patent applications or that any claims allowedfrom such applications will be of sufficient scope, or be issued in allcountries where our products and services can be sold, to providemeaningful protection or any commercial advantage to us. Also, ourcompetitors may be able to design around our patents. The laws of someforeign countries in which our products and services are or may bedeveloped, manufactured or sold may not protect our products andservices or intellectual property rights to the same extent as do thelaws of the United States and thus make the possibility of piracy ofour technology and products and services more likely.

We havefiled applications for trademark registration of Globecomm SystemsInc., Globecomm and GSI in the United States and various othercountries, and have been granted registrations for some of these termsin the United States, Europe and Russia. We have various othertrademarks and service marks registered or pending for registration inthe United States and in other countries and may seek registration ofother trademarks and service marks in the future. We cannot assure youthat registrations will be granted from any of our pending or futureapplications, or that any registrations that are granted will preventothers from using similar trademarks in connection with related goodsand services.

Defending against intellectual propertyinfringement claims could be time consuming and expensive, and if weare not successful, could cause substantial expenses and disrupt ourbusiness.

We cannot be sure that the products, services,technologies and advertising we employ in our business do not or willnot infringe valid patents, trademarks, copyrights or otherintellectual property rights held by third parties. We may be subjectto legal proceedings and claims from time to time relating to theintellectual property of others in the ordinary course of our business.Prosecuting infringers and defending against intellectual propertyinfringement claims could be time consuming and expensive, andregardless of whether we are or are not successful, could causesubstantial expenses and disrupt our business. We may incur substantialexpenses in defending against these third 

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party claims, regardless of their merit.Successful infringement claims against us may result in substantialmonetary liability and/or may materially disrupt the conduct of, ornecessitate the cessation of, segments of our business.

We maynot be able to keep pace with technological changes, which would makeour products and services become non-competitive and obsolete.

The telecommunications industry, including satellite-basedcommunications services, is characterized by rapidly changingtechnologies, frequent new product and service introductions andevolving industry standards. If we are unable, for technological orother reasons, to develop and introduce new products and services orenhancements to existing products and services in a timely manner or inresponse to changing market conditions or customer requirements, ourproducts and services would become non-competitive and obsolete, whichwould harm our business, results of operations and financialcondition.

We depend on our suppliers, some of which are oursole or a limited source of supply, and the loss  of  thesesuppliers would materially adversely affect our business, results ofoperations and financial  condition.

We currently obtainmost of our critical components and services from single or limitedsources and generally do not maintain significant inventories or havelong-term or exclusive supply contracts with our vendors. We have fromtime to time experienced delays in receiving products from vendors dueto lack of availability, quality control or manufacturing problems,shortages of materials or components or product design difficulties. Wemay experience delays in the future and replacement services orproducts may not be available when needed, or at all, or atcommercially reasonable rates or prices. If we were to change some ofour vendors, we would have to perform additional testing procedures onthe service or product supplied by the new vendors, which would preventor delay the availability of our products and services. Furthermore,our costs could increase significantly if we need to change vendors. Ifwe do not receive timely deliveries of quality products and services,or if there are significant increases in the prices of these productsor services, it could have a material adverse effect on our business,results of operations and financial condition.

Our network mayexperience security breaches, which could disrupt our services.

Our network infrastructure may be vulnerable to computer viruses,break-ins, denial of service attacks and similar disruptive problemscaused by our customers or other Internet users. Computer viruses,break-ins, denial of service attacks or other problems caused by thirdparties could lead to interruptions, delays or cessation in service toour customers. There currently is no existing technology that providesabsolute security, and the cost of minimizing these security breachescould be prohibitively expensive. We may face liability to customersfor such security breaches. Furthermore, these incidents could deterpotential customers and adversely affect existing customerrelationships.

Satellites upon which we rely may malfunction orbe damaged or lost.

The damage or loss of any of the satellitesused by us, or the temporary or permanent malfunction of any of thesatellites upon which we rely, would likely result in the interruptionof our satellite-based communications services. This interruption couldhave a material adverse effect on our business, results of operationsand financial condition.

Risks Related to the SecuritiesMarkets and Ownership of Our Common Stock

Our stock price isvolatile.

From April 1, 2004 through March 31, 2005, ourclosing stock price ranged from a low of $4.67 per share to a high of$7.58 per share. The market price of our common stock, like that of thesecurities of many telecommunications and high technology industrycompanies, could be subject to significant fluctuations and is likelyto remain volatile based on many factors, including thefollowing:

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|              |                                          |
|--------------|------------------------------------------|
| •  | quarterlyvariations in operatingresults; |

|              |                                                                                       |
|--------------|---------------------------------------------------------------------------------------|
| •  | announcements of newtechnology, products or services by us or any of our competitors; |

|              |                                                                                                                               |
|--------------|-------------------------------------------------------------------------------------------------------------------------------|
| •  | acceptance of satellite-basedcommunication services and Internet access services in developingcountries and emerging markets; |

|              |                                                                          |
|--------------|--------------------------------------------------------------------------|
| •  | changes in financial estimates orrecommendations by securities analysts; |

|              |                              |
|--------------|------------------------------|
| •  | general market conditions;or |

|              |                                                                          |
|--------------|--------------------------------------------------------------------------|
| •  | domestic and international economicfactors unrelated to our performance. |

Additionally, numerousfactors relating to our business may cause fluctuations or declines inour stock price.

The stock markets in general and the marketsfor telecommunications stocks in particular have experienced extremevolatility that has often been unrelated to the operating performanceof particular companies. These broad market fluctuations may adverselyaffect the trading price of our common stock.

We have not paiddividends in the past and do not expect to pay dividends in the future,and any return on investment may be limited to the value of ourstock.

We have never paid cash dividends on our common stockand do not anticipate paying cash dividends on our common stock in theforeseeable future. The payment of dividends on our common stock willdepend on our future earnings, capital requirements, financialcondition, future prospects and other factors as the board of directorsmight deem relevant. If we do not pay dividends our stock may be lessvaluable because a return on your investment will only occur if ourstock price appreciates

Because our common stock is thinlytraded, it may be difficult to sell shares of our common stock into themarkets without experiencing significant price volatility.

Ourcommon stock is currently traded on the NASDAQ National Market. Becauseof the relatively small number of shares that are traded, it may bedifficult for you to find a purchaser for shares of our common stockwithout experiencing significant price volatility. We cannot guaranteethat an active trading market will develop, that our common stock willhave a higher trading volume than it has historically had or that itwill maintain its current market price. This illiquidity could have amaterial adverse effect on the market price of our stock.

Athird party could be prevented from acquiring shares of our stock at apremium to the market price because of our anti-takeoverprovisions.

Various provisions with respect to votes in theelection of directors, special meetings of stockholders, and advancenotice requirements for stockholder proposals and director nominationsof our amended and restated certificate of incorporation, bylaws andSection 203 of the General Corporation Law of the State of Delawarecould make it more difficult for a third party to acquire us, even ifdoing so might be beneficial to our stockholders. In addition, we havea poison pill in place and employment provisions with our seniorexecutives that have change of control provisions that could make anacquisition of us by a third party more difficult.

RisksRelated to Government Approvals

We are subject to manygovernment regulations, and failure to comply with them will harm ourbusiness.

Operations and Use of Satellites

Weare subject to various federal laws and regulations, which may havenegative effects on our business. We operate FCC licensed earthstations in Hauppauge, New York, subject to the 

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Communications Act of 1934, as amended (the"FCC Act"), and the rules and regulations ofFCC. Pursuant to the FCC Act and rules, we have obtained and arerequired to maintain radio transmission licenses from the FCC for bothdomestic and foreign operations of our earth stations. We have alsoobtained and are required to maintain authorization issued underSection 214 of the FCC Act to act as a telecommunications carrier,which authorization also extends to Globecomm Network ServicesCorporation. These licenses should be renewed by the FCC in the normalcourse as long as we remain in compliance with FCC rules andregulations. However, we cannot guarantee that the FCC will grantadditional licenses when our existing licenses expire, nor are weassured that the FCC will not adopt new or modified technicalrequirements that will require us to incur expenditures to modify orupgrade our equipment as a condition of retaining our licenses. We arealso required to comply with FCC regulations regarding the exposure ofhumans to radio frequency radiation from our earth stations. Theseregulations, as well as local land use regulations, restrict ourfreedom to choose where to locate our earth stations. In addition,prior to a third party acquisition of us, we would need to seekapproval from the FCC to transfer the radio transmission licenses wehave obtained to the third party upon the consummation of theacquisition. However, we cannot assure you that the FCC will permit thetransfer of these licenses. These approvals may make it more difficultfor a third party to acquire us.

Foreign Ownership

We may, in the future, be required to seek FCC approval if foreignownership of our stock exceeds the specified criteria. Failure tocomply with these policies could result in an order to divest theoffending foreign ownership, fines, denial of license renewal and/orlicense revocation proceedings against the licensee by the FCC.

Foreign Regulations

Regulatory schemes in countriesin which we may seek to provide our satellite-delivered datacommunications services may impose impediments on our operations. Somecountries in which we intend to operate have telecommunications lawsand regulations that do not currently contemplate technical advances intelecommunications technology like Internet/intranet transmission bysatellite. We cannot assure you that the present regulatory environmentin any of those countries will not be changed in a manner, which mayhave a material adverse impact on our business. Either we or our localpartners typically must obtain authorization from each country in whichwe provide our satellite-delivered data communications services. Theregulatory schemes in each country are different, and thus there may beinstances of noncompliance of which we are not aware. We cannot assureyou that our licenses and approvals are or will remain sufficient inthe view of foreign regulatory authorities, or that necessary licensesand approvals will be granted on a timely basis in all jurisdictions inwhich we wish to offer our products and services or that restrictionsapplicable thereto will not be unduly burdensome.

Regulation of the Internet

Due to the increasingpopularity and use of the Internet, it is possible that a number oflaws and regulations may be adopted at the local, national orinternational levels with respect to the Internet, covering issuesincluding user privacy and expression, pricing of products andservices, taxation, advertising, intellectual property rights,information security or the convergence of traditional communicationservices with Internet communications. It is anticipated that asubstantial portion of our Internet operations will be carried out incountries that may impose greater regulation of the content ofinformation coming into the country than that which is generallyapplicable in the United States, including but not limited to privacyregulations in numerous European countries and content restrictions incountries such as the People's Republic of China. To the extentthat we provide content as a part of our Internet services, it will besubject to laws regulating content. Moreover, the adoption of laws orregulations may decrease the growth of the Internet, which could inturn decrease the demand for our Internet services or increase our costof doing business or in some other manner have a material adverseeffect on our business, operating results and financial condition. Inaddition, the 

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applicability of existing laws governingissues including property ownership, copyrights and other intellectualproperty issues, taxation, libel, court jurisdiction and personalprivacy to the Internet is uncertain. The vast majority of these lawswere adopted prior to the advent of the Internet and relatedtechnologies and, as a result, do not contemplate or address the uniqueissues of the Internet and related technologies. Changes to these lawsintended to address these issues, including some recently proposedchanges, could create uncertainty in the marketplace which could reducedemand for our products and services, could increase our cost of doingbusiness as a result of costs of litigation or increased productdevelopment costs, or could in some other manner have a materialadverse effect on our business, financial condition and results ofoperations.

Telecommunications Taxation, SupportRequirements, and Access Charges

All telecommunicationscarriers providing domestic services in the United States are requiredto contribute a portion of their gross revenues for the support ofuniversal telecommunications services. Also, some telecommunicationsservices are subject to special taxation and to contributionrequirements to support services to special groups, like persons withdisabilities. Our services may be subject to new or increased taxes andcontribution requirements that could affect our profitability,particularly if we are not able to pass them through to customers foreither competitive or regulatory reasons.

Internet services arecurrently exempt from charges that long distance telephone companiespay for access to the networks of local telephone companies in theUnited States. Efforts have been made from time to time, and may bemade again in the future, to eliminate this exemption. If these accesscharges are imposed on telephone lines used to reach Internet serviceproviders and/or if flat rate telephone services for Internet accessare eliminated or curtailed, the cost to customers who access oursatellite facilities using telephone company-provided facilities couldincrease to an extent that could discourage the demand for ourservices. Likewise, the demand for our services in other countries maybe affected by the availability and cost of local telephone or othertelecommunications facilities to reach our facilities.

Export of Telecommunications Equipment

The sale ofour ground segment systems, networks, and communications servicesoutside the United States is subject to compliance with the regulationsof the United States Export Administration and, in certaincircumstances, with International Traffic in Arms regulations. Theabsence of comparable restrictions on competitors in other countriesmay adversely affect our competitive position. In addition, in order toship our products into and implement our services in some countries,the products must satisfy the technical requirements of that particularcountry. If we were unable to comply with such requirements withrespect to a significant quantity of our products, our sales in thosecountries could be restricted, which could have a material adverseeffect on our business, results of operations and financialcondition.

Item 3.    Quantitative and QualitativeDisclosures About Market Risk

We are subject to a variety ofrisks, including foreign currency exchange rate fluctuations relatingto certain purchases from foreign vendors and our wholly-ownedsubsidiary, Globecomm Systems Europe Limited, which primarily deals inBritish Pounds Sterling. In the normal course of business, we assessthese risks and have established policies and procedures to manage ourexposure to fluctuations in foreign currency values.

Ourobjective in managing our exposure to foreign currency exchange ratefluctuations is to reduce the impact of adverse fluctuations inearnings and cash flows associated with foreign currency exchangerates. Accordingly, we may utilize from time to time foreign currencyforward contracts to hedge our exposure on firm commitments denominatedin foreign currency. At March 31, 2005 and June 30, 2004 the Companyhad no outstanding foreign exchange contracts.

Our results ofoperations and cash flows are subject to fluctuations due to changes ininterest rates primarily from our investment of available cash balancesin money market funds with portfolios 

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of investment grade corporate and governmentsecurities. Under our current positions, we do not use interest ratederivative instruments to manage exposure to interest rate changes.

Item 4.    Controls and Procedures

Quarterly Evaluationof the Company's Disclosure Controls and Internal Controls.

|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)  | As of the end of the period covered by thisQuarterly Report on Form 10-Q, an evaluation was carried out under thesupervision and with the participation of senior management, includingour Chief Executive Officer and Chief Financial Officer, of theeffectiveness of the design and operation of our disclosure controlsand procedures (as defined in Rules 13a- 15(e) and 15d- 15(e) under theSecurities Exchange Act of 1934, as amended)**.** Based upon thatevaluation, our Chief Executive Officer and Chief Financial Officerconcluded that our disclosure controls and procedures are effective (i)for gathering, analyzing and disclosing the information that theCompany is required to disclose in reports filed under the SecuritiesExchange Act of 1934, as amended (the "ExchangeAct") and (ii) to ensure that information required to bedisclosed in the reports that the Company files or submits under theExchange Act is accumulated and communicated to the Company'smanagement, including our Chief Executive Officer and Chief FinancialOfficer, to allow timely decisions regarding required disclosure. |

|           |                                                                                                                                                                                                                                                                                                                                                                                                   |
|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b)  | There have been no significant changes inthe Company's internal controls over financial reporting (asdefined in Exchange Act Rule 13a-15(f) of the Securities Exchange Actof 1934, as amended) or in other factors during the fiscal quarterended March 31, 2005 that materially affected, or are reasonably likelyto materially affect, the Company's internal controls overfinancial reporting. |

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PART II — OTHERINFORMATION

**Item 1.**    LegalProceedings

|        |      |
|--------|------|
|   | None |

|                  |                                                            |
|------------------|------------------------------------------------------------|
| **Item2.**  | Unregistered Sales of Equity Securities andUse of Proceeds |

|        |      |
|--------|------|
|   | None |

|                  |                                 |
|------------------|---------------------------------|
| **Item3.**  | Defaults Upon Senior Securities |

|        |      |
|--------|------|
|   | None |

|                  |                                                    |
|------------------|----------------------------------------------------|
| **Item4.**  | Submission of Matters to a Vote of SecurityHolders |

|        |      |
|--------|------|
|   | None |

|                  |                   |
|------------------|-------------------|
| **Item5.**  | Other Information |

|        |      |
|--------|------|
|   | None |

|                  |          |
|------------------|----------|
| **Item6.**  | Exhibits |

Indexto Exhibits:

Exhibit No.

|            |                                                                                                                                                |
|------------|------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.1  | Chief Executive OfficerCertification required by Rules 13a-14 and 15d-14 under the SecuritiesExchange Act of 1934, as amended (filedherewith). |

|            |                                                                                                                                                   |
|------------|---------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.2  | Chief FinancialOfficer Certification required by Rules 13a- 14 and 15d- 14 under theSecurities Exchange Act of 1934, as amended (filed herewith). |

|          |                                                                                                                                        |
|----------|----------------------------------------------------------------------------------------------------------------------------------------|
| 32  | Certification Pursuant to 18 U.S.C.Section 1350, as adopted pursuant to Section 906 of the Sarbanes-OxleyAct of 2002 (filed herewith). |

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,the Registrant has duly caused this report to be signed on its behalfby the undersigned thereunto duly authorized.

|  | **GLOBECOMM SYSTEMSINC.** (Registrant) |
|--|----------------------------------------|

|                   |  |                                                                                                                                                                                            |  |  |  |  |
|-------------------|--|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| Date:May 16,2005  |  | /s/   DAVIDE. HERSHBERG                                                 |
|              |  | David E. HershbergChairman of the Board and Chief Executive Officer (PrincipalExecutive Officer)                                                                                           |
| Date:May 16, 2005 |  | /s/ ANDREW C.MELFI                             |
|              |  | Andrew C. Melfi Vice President, ChiefFinancial Officer and Treasurer (Principal Financial andAccounting Officer)                                                                           |
|                   |

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Indexto Exhibits:

|            |  |                                                                                                                                                  |  |  |  |  |
|------------|--|--------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| ExhibitNo. |
| 31.1       |  | Chief Executive OfficerCertification required by Rules 13a-14 and 15d-14 under the SecuritiesExchange Act of 1934, as amended (filed herewith).  |
| 31.2       |  | Chief Financial Officer Certification required byRules 13a- 14 and 15d-14 under the Securities Exchange Act of 1934, asamended (filed herewith). |
| 32         |  | CertificationPursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906of the Sarbanes-Oxley Act of 2002 (filedherewith).            |
|            |

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