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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended December 31, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number: 000-22839
 Globecomm Systems Inc.
  Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    11-3225567
(I.R.S. Employer
Identification No.)45 Oser Avenue, 
Hauppauge, NY
(Address of principal executive offices)
    
    11788
(Zip Code)
 Registrants telephone number, including area code: (631) 231-9800
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



GLOBECOMM SYSTEMS INC.
  PagePart I  Financial InformationItem 1. Financial Statements
    
    
    3Consolidated Balance Sheets  As of December 31, 2010 (unaudited) and June 30, 2010
    
    
    3Consolidated Statements of Operations (unaudited)  For the three and six months ended
December 31, 2010 and 2009
    
    
    4Consolidated Statement of Changes in Stockholders Equity (unaudited)  For the six
months ended December 31, 2010
    
    
    5Consolidated Statements of Cash Flows (unaudited)  For the six months ended
December 31, 2010 and 2009
    
    
    6Notes to Consolidated Financial Statements (unaudited)
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results
of Operations
    
    
    15Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    23Item 4. Controls and Procedures
    
    
    24Part II  Other InformationItem 1. Legal Proceedings
    
    
    24Item 1A. Risk Factors
    
    
    24Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    33Item 3. Defaults Upon Senior Securities
    
    
    33Item 4. Removed and Reserved
    
    
    33Item 5. Other Information
    
    
    33Item 6. Exhibits
    
    
    33Signatures
    
    
    34EX-31.1EX-31.2EX-32
  2




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PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 GLOBECOMM SYSTEMS INC.
 
 CONSOLIDATED BALANCE SHEETS
 (In thousands, except share data)
 December 31,
    
    
    June 30,2010
    
    
    2010(Unaudited)AssetsCurrent assets:Cash and cash equivalents
    
    $
    40,080
    
    
    $
    42,863Restricted cash
    
    
    5,027
    
    
    
    5,025Accounts receivable, net
    
    
    56,855
    
    
    
    49,222Inventories
    
    
    40,023
    
    
    
    34,486Prepaid expenses and other current assets
    
    
    4,876
    
    
    
    3,100Deferred income taxes
    
    
    1,602
    
    
    
    1,602Total current assets
    
    
    148,463
    
    
    
    136,298Fixed assets, net
    
    
    39,967
    
    
    
    37,839Goodwill
    
    
    40,594
    
    
    
    40,594Intangibles, net
    
    
    15,122
    
    
    
    16,196Deferred income taxes
    
    
    5,444
    
    
    
    7,635Other assets
    
    
    2,345
    
    
    
    2,148Total assets
    
    $
    251,935
    
    
    $
    240,710Liabilities and Stockholders EquityCurrent liabilities:Accounts payable
    
    $
    39,890
    
    
    $
    36,929Deferred revenues
    
    
    4,496
    
    
    
    2,290Accrued payroll and related fringe benefits
    
    
    4,971
    
    
    
    6,390Other accrued expenses
    
    
    10,731
    
    
    
    11,477Current portion of long-term debt
    
    
    2,500
    
    
    
    2,500Total current liabilities
    
    
    62,588
    
    
    
    59,586Other liabilities
    
    
    3,375
    
    
    
    2,443Long term debt
    
    
    8,125
    
    
    
    9,375Deferred income taxes
    
    
    2,203
    
    
    
    2,203Commitments and contingenciesStockholders equity:Series A Junior Participating, shares
authorized, issued and outstanding: none at
December 31, 2010 and June 30, 2010
    
    
    
    
    
    
    Common stock, $.001 par value, 50,000,000
shares authorized, shares issued: 22,719,767
at December 31, 2010 and 22,050,635 at June
30, 2010
    
    
    23
    
    
    
    22Additional paid-in capital
    
    
    193,613
    
    
    
    189,401Accumulated deficit
    
    
    (15,504
    )
    
    
    (19,346
    )Treasury stock, at cost, 465,351 shares at
December 31, 2010 and June 30, 2010
    
    
    (2,781
    )
    
    
    (2,781
    )Accumulated other comprehensive income (loss)
    
    
    293
    
    
    
    (193
    )Total stockholders equity
    
    
    175,644
    
    
    
    167,103Total liabilities and stockholders equity
    
    $
    251,935
    
    
    $
    240,710
  3




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GLOBECOMM SYSTEMS INC.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands, except per share data)
 (Unaudited)
 Three Months Ended
    
    
    Six Months EndedDecember 31,
    
    
    December 31,
    
    
    December 31,
    
    
    December 31,2010
    
    
    2009
    
    
    2010
    
    
    2009Revenues from services
    
    $
    47,264
    
    
    $
    33,570
    
    
    $
    90,196
    
    
    $
    62,178Revenues from infrastructure solutions
    
    
    22,980
    
    
    
    23,512
    
    
    
    33,251
    
    
    
    42,580Total revenues
    
    
    70,244
    
    
    
    57,082
    
    
    
    123,447
    
    
    
    104,758Costs and operating expenses:Costs from services
    
    
    33,718
    
    
    
    25,483
    
    
    
    64,077
    
    
    
    46,085Costs from infrastructure solutions
    
    
    19,091
    
    
    
    19,838
    
    
    
    27,207
    
    
    
    35,633Selling and marketing
    
    
    4,639
    
    
    
    3,671
    
    
    
    8,677
    
    
    
    6,873Research and development
    
    
    910
    
    
    
    762
    
    
    
    2,009
    
    
    
    1,513General and administrative
    
    
    6,875
    
    
    
    5,216
    
    
    
    12,986
    
    
    
    10,731Earn-out fair value adjustments
    
    
    2,012
    
    
    
    
    
    
    
    2,149
    
    
    
    Total costs and operating expenses
    
    
    67,245
    
    
    
    54,970
    
    
    
    117,105
    
    
    
    100,835Income from operations
    
    
    2,999
    
    
    
    2,112
    
    
    
    6,342
    
    
    
    3,923Interest income
    
    
    42
    
    
    
    133
    
    
    
    100
    
    
    
    268Interest expense
    
    
    (70
    )
    
    
    
    
    
    
    (149
    )
    
    
    Income before income taxes
    
    
    2,971
    
    
    
    2,245
    
    
    
    6,293
    
    
    
    4,191Provision for income taxes
    
    
    1,262
    
    
    
    844
    
    
    
    2,451
    
    
    
    1,549Net income
    
    $
    1,709
    
    
    $
    1,401
    
    
    $
    3,842
    
    
    $
    2,642Basic net income per common share
    
    $
    0.08
    
    
    $
    0.07
    
    
    $
    0.18
    
    
    $
    0.13Diluted net income per common share
    
    $
    0.08
    
    
    $
    0.07
    
    
    $
    0.18
    
    
    $
    0.13Weighted-average shares used in the
calculation of basic net income
per common share
    
    
    21,218
    
    
    
    20,437
    
    
    
    21,126
    
    
    
    20,400Weighted-average shares used in the
calculation of diluted net income
per common share
    
    
    21,827
    
    
    
    20,840
    
    
    
    21,689
    
    
    
    20,812
  4




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GLOBECOMM SYSTEMS INC.
 
 CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY
 FOR THE SIX MONTHS ENDED DECEMBER 31, 2010
 (In thousands)
 (Unaudited)
 AccumulatedAdditional
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    TotalCommon Stock
    
    
    Paid-in
    
    
    Accumulated
    
    
    Comprehensive
    
    
    Treasury Stock
    
    
    StockholdersShares
    
    
    Amount
    
    
    Capital
    
    
    Deficit
    
    
    Income (Loss)
    
    
    Shares
    
    
    Amount
    
    
    EquityBalance at June 30, 2010
    
    
    22,051
    
    
    $
    22
    
    
    $
    189,401
    
    
    $
    (19,346
    )
    
    $
    (193
    )
    
    
    465
    
    
    $
    (2,781
    )
    
    $
    167,103Proceeds from exercise of stock options
    
    
    140
    
    
    
    
    
    
    
    921
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    921Stock compensation expense
    
    
    
    
    
    
    
    
    
    
    1,716
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,716Grant of restricted shares
    
    
    416Tax benefit from stock compensation
plan
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4Grant of shares for Telaurus earn-out
    
    
    113
    
    
    
    1
    
    
    
    895
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    896Grant of warrants for Telaurus earn-out
    
    
    
    
    
    
    
    
    
    
    676
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    676Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,842
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,842Gain from foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    486
    
    
    
    
    
    
    
    
    
    
    
    486Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,328Balance at December 31, 2010
    
    
    22,720
    
    
    $
    23
    
    
    $
    193,613
    
    
    $
    (15,504
    )
    
    $
    293
    
    
    
    465
    
    
    $
    (2,781
    )
    
    $
    175,644
  5




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GLOBECOMM SYSTEMS INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
 (Unaudited)
 Six Months EndedDecember 31,
    
    
    December 31,2010
    
    
    2009Operating Activities:Net income
    
    $
    3,842
    
    
    $
    2,642Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    4,327
    
    
    
    3,421Provision for doubtful accounts
    
    
    81
    
    
    
    803Deferred income taxes
    
    
    2,191
    
    
    
    1,465Stock compensation expense
    
    
    1,716
    
    
    
    1,064Tax benefit from stock compensation plan
    
    
    4
    
    
    
    Earn-out fair value adjustments
    
    
    2,149
    
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    (7,037
    )
    
    
    5,806Inventories
    
    
    (5,450
    )
    
    
    (7,945
    )Prepaid expenses and other current assets
    
    
    (1,621
    )
    
    
    163Other assets
    
    
    (154
    )
    
    
    8Accounts payable
    
    
    2,551
    
    
    
    1,912Deferred revenue
    
    
    2,206
    
    
    
    1,753Accrued payroll and related fringe benefits
    
    
    (1,465
    )
    
    
    (480
    )Other accrued expenses
    
    
    (84
    )
    
    
    1,036Other liabilities
    
    
    19
    
    
    
    (140
    )Net cash provided by operating activities
    
    
    3,275
    
    
    
    11,508Investing Activities:Purchases of fixed assets
    
    
    (5,332
    )
    
    
    (5,883
    )Cash payment for Telaurus earn-out
    
    
    (586
    )
    
    
    Net cash used in investing activities
    
    
    (5,918
    )
    
    
    (5,883
    )Financing Activities:Proceeds from exercise of stock options
    
    
    921
    
    
    
    27Repayments of debt
    
    
    (1,250
    )
    
    
    Net cash (used in) provided by financing activities
    
    
    (329
    )
    
    
    27Effect of foreign currency translation on cash and cash equivalents
    
    
    189
    
    
    
    8Net (decrease) increase in cash and cash equivalents
    
    
    (2,783
    )
    
    
    5,660Cash and cash equivalents at beginning of period
    
    
    42,863
    
    
    
    44,034Cash and cash equivalents at end of period
    
    $
    40,080
    
    
    $
    49,694Supplemental Disclosure of Cash Flow Information:Cash paid for interest
    
    $
    153
    
    
    $
    Cash paid for income taxes
    
    
    312
    
    
    
    272
  6




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GLOBECOMM SYSTEMS INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2010
(Unaudited)
 1. Basis of Presentation
   Principles of Consolidation
  Accounting Estimates
  Revenue Recognition
  7




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Costs from Services
  Costs from Infrastructure Solutions
  Research and Development
  Stock-Based Compensation
  Goodwill and Other Intangible Assets
  8




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Comprehensive Income
  Income Taxes
      9




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Product Warranties
  Foreign Exchange Contracts
  Restricted Cash
  Recent Accounting Pronouncements
    2. Basic and Diluted Net Income Per Common Share
  10




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3. Inventories
  December 31,2010
    
    
    
    June 30,(Unaudited)
    
    
    
    2010(In thousands)Raw materials and component parts
    
    $
    1,668
    
    
    $
    1,392Work-in-progress
    
    
    39,711
    
    
    
    34,36841,379
    
    
    
    35,760Less progress payments
    
    
    1,356
    
    
    
    1,274$
    40,023
    
    
    $
    34,486
 4. Segment Information
   11




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Three Months Ended
    
    
    Six Months EndedDecember 31,
    
    
    December 31,
    
    
    December 31,
    
    
    December 31,2010
    
    
    2009
    
    
    2010
    
    
    2009(Unaudited)(In thousands)Revenues:Services
    
    $
    49,934
    
    
    $
    37,423
    
    
    $
    95,449
    
    
    $
    66,996Infrastructure solutions
    
    
    23,138
    
    
    
    23,670
    
    
    
    33,409
    
    
    
    43,344Intercompany eliminations
    
    
    (2,828
    )
    
    
    (4,011
    )
    
    
    (5,411
    )
    
    
    (5,582
    )Total revenues
    
    $
    70,244
    
    
    $
    57,082
    
    
    $
    123,447
    
    
    $
    104,758Income (loss) from operations:Services
    
    $
    4,345
    
    
    $
    3,481
    
    
    $
    9,844
    
    
    $
    6,917Infrastructure solutions
    
    
    (1,338
    )
    
    
    (1,370
    )
    
    
    (3,490
    )
    
    
    (2,939
    )Interest income
    
    
    42
    
    
    
    133
    
    
    
    100
    
    
    
    268Interest expense
    
    
    (70
    )
    
    
    
    
    
    
    (149
    )
    
    
    Intercompany eliminations
    
    
    (8
    )
    
    
    1
    
    
    
    (12
    )
    
    
    (55
    )Income before income taxes
    
    $
    2,971
    
    
    $
    2,245
    
    
    $
    6,293
    
    
    $
    4,191Depreciation and amortization:Services
    
    $
    1,708
    
    
    $
    1,168
    
    
    $
    3,463
    
    
    $
    2,471Infrastructure solutions
    
    
    430
    
    
    
    483
    
    
    
    875
    
    
    
    967Intercompany eliminations
    
    
    (5
    )
    
    
    (8
    )
    
    
    (11
    )
    
    
    (17
    )Total depreciation and amortization
    
    $
    2,133
    
    
    $
    1,643
    
    
    $
    4,327
    
    
    $
    3,421Expenditures for long-lived assets:Services
    
    $
    2,378
    
    
    $
    2,051
    
    
    $
    5,073
    
    
    $
    5,341Infrastructure solutions
    
    
    217
    
    
    
    250
    
    
    
    259
    
    
    
    542Total expenditures for long-lived assets
    
    $
    2,595
    
    
    $
    2,301
    
    
    $
    5,332
    
    
    $
    5,883
 December 31,2010
    
    
    June 30,(Unaudited)
    
    
    2010(In thousands)Assets:Services
    
    $
    137,860
    
    
    $
    130,866Infrastructure solutions
    
    
    219,185
    
    
    
    207,053Intercompany eliminations
    
    
    (105,110
    )
    
    
    (97,209
    )Total assets
    
    $
    251,935
    
    
    $
    240,710
 5. Long-Term Debt
 Line of Credit
  12




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Acquisition Loan
  2011
    
    $
    1,2502012
    
    
    2,5002013
    
    
    2,5002014
    
    
    2,5002015
    
    
    1,875
 6. Acquisitions
     13




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Three months ended
    
    
    Six months endedDecember 31,
    
    
    December 31,2009
    
    
    2009(in thousands, except per share data)Revenues
    
    $
    62,770
    
    
    $
    115,443Net income
    
    $
    1,611
    
    
    $
    3,256Basic net income per common share
    
    $
    0.08
    
    
    $
    0.16Diluted net income per common share
    
    $
    0.07
    
    
    $
    0.16
   7. Goodwill and Intangibles
  December 31,
    
    
    June 30,2010
    
    
    2010
    
    
    Est. useful life(In thousands)Customer relationships
    
    $
    16,279
    
    
    $
    16,279
    
    
    8-18 yearsSoftware
    
    
    1,287
    
    
    
    1,287
    
    
    5  yearsContracts backlog
    
    
    1,771
    
    
    
    1,771
    
    
    6 months-2 yearsCovenant not to compete
    
    
    125
    
    
    
    125
    
    
    3-4 yearsTrademark
    
    
    82
    
    
    
    82
    
    
    5  years19,544
    
    
    
    19,544Less accumulated amortization
    
    
    4,422
    
    
    
    3,348Intangibles, net
    
    $
    15,122
    
    
    $
    16,196
   2011
    
    $
    1,0122012
    
    
    1,8892013
    
    
    1,6072014
    
    
    1,5822015
    
    
    1,289
 14




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8. Fair Value Measurements
          
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
  Overview
  15




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Critical Accounting Policies
  16




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Revenue Recognition  Infrastructure Solutions
    Costs from Infrastructure Solutions
  Goodwill and Other Intangible Assets Impairment
  17




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Deferred tax assets
    Stock-Based Compensation
   Allowances for Doubtful Accounts
  18




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Inventories
  Valuation of contingent consideration
  Recent Accounting Pronouncements
    19




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Results of Operations
 Three and Six Months Ended December 31, 2010 and 2009
  Revenues from Services.
 Revenues from Infrastructure Solutions.
 Costs from Services.
 Costs from Infrastructure Solutions.
 Selling and Marketing.
 Research and Development
 General and Administrative
 20




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Earn-out
Fair Value Adjustments.
 Interest Income
 Interest Expense.
 Provision for Income Taxes
 Liquidity and Capital Resources
    21




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Payments Due by PeriodContractual Obligations
    
    Total
    
    
    Less than 1 year
    
    
    1-3 years
    
    
    4-5 years
    
    
    More than 5 yearsOperating leases
    
    $
    64,150
    
    
    $
    40,254
    
    
    $
    19,887
    
    
    $
    3,935
    
    
    $
    74Long-term debt
    
    
    10,625
    
    
    
    2,500
    
    
    
    5,000
    
    
    
    3,125
    
    
    
    Total contractual
obligations
    
    $
    74,775
    
    
    $
    42,754
    
    
    $
    24,887
    
    
    $
    7,060
    
    
    $
    74
 Amount of Commitment Expiration Per PeriodOther Commercial Commitments
    
    Total Amounts Committed
    
    
    Less than 1 year
    
    
    1-3 years
    
    
    4-5 years
    
    
    More Than 5 yearsStandby letters of credit
    
    $
    8,418
    
    
    $
    4,803
    
    
    $
    3,139
    
    
    $
    476
    
    
    $
    Total commercial commitments
    
    $
    8,418
    
    
    $
    4,803
    
    
    $
    3,139
    
    
    $
    476
    
    
    $
    
     Off-Balance Sheet Arrangements
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
   23




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Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures.
 Changes in Internal Control Over Financial Reporting.
 
 Part II  Other Information
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
 Risks Related to Our Business
 Reductions in telecommunications equipment and systems spending have negatively affected our
revenues and profitability of our infrastructure solutions segment, which may not be offset by the
growth in our services segment.
  24




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A limited number of customer contracts account for a significant portion of our revenues, and the
inability to replace a key customer contract or the failure of the customer to implement its plans
would adversely affect our results of operations, business and financial condition.
  We derive a substantial portion of our revenues from the government marketplace, and a downturn in
this marketplace would adversely affect us.
   We often act as a subcontractor, particularly in the government marketplace and our results could
be adversely affected by the prime contractors inability to obtain or renew its contracts with the
ultimate customer.
  Risks associated with operating in international markets, including areas of conflict, could
restrict our ability to expand globally and harm our business and prospects.
  
    
    general political and economic instability in international markets, including the
hostilities in Iraq and Afghanistan, could impede our ability to deliver our services
and products to customers;
 
    
    difficulties in collecting accounts receivable could affect our results of
operations;
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
    
    changes in regulatory requirements could restrict our ability to deliver services to
our international customers, including the addition of a country to the list of
sanctioned countries under the International Emergency Economic Powers Act or similar
legislation;
    
    export restrictions, tariffs, licenses and other trade barriers could prevent us
from adequately equipping our network facilities;
    
    differing technology standards across countries may impede our ability to integrate
our services and products across international borders;
    
    protectionist laws and business practices favoring local competition may give
unequal bargaining leverage to key vendors in countries where competition is scarce,
significantly increasing our operating costs;
    
    increased expenses associated with marketing services in foreign countries could
affect our ability to compete;
    
    relying on local subcontractors for installation of our services and products could
adversely impact the quality of our services and products;
    
    difficulties in staffing and managing foreign operations could affect our ability
to compete;
    
    complex foreign laws and treaties could affect our ability to compete; and
    
    potentially adverse taxes could affect our results of operations.
  Our service revenue has increased as a percentage of total revenue and if our service revenue
decreases or margins decrease, our results of operations will be harmed
  We derive a substantial portion of our revenues from fixed-price projects, under which we assume
greater financial risk if we fail to accurately estimate the costs of the projects.
  Future acquisitions and strategic investments may divert our resources and managements attention,
results may fall short of expectations and, as a result, our operating results may be difficult to
forecast and may be volatile.
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
    
    failure of the acquisition or investment to meet
the expectations upon which we made a decision to
proceed;
    
    difficulties in the integration of the operations,
technologies, products and personnel of an acquired
business;
    
    diversion of managements attention from other business concerns;
    
    substantial transaction costs;
    
    the potential of significant goodwill and
intangibles write-offs in the future in the event that
an acquisition or investment does not meet
expectations;
    
    increased expenses associated with the consummation and integration of an acquisition; and
    
    loss of key employees, customers or suppliers of any acquired business.
  In the event of a catastrophic loss affecting our operations in Hauppauge, New York, Laurel,
Maryland or the Netherlands, our results of operations would be harmed.
  Our markets are highly competitive and we have many established competitors, and we may lose market
share as a result.
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If our services and products are not accepted in developing countries with emerging markets, our
revenues will be impaired.
  
    
    the speed at which communications infrastructure, including terrestrial microwave,
coaxial cable and fiber optic communications systems, which compete with
satellite-based services, is built;
    
    the effectiveness of our local resellers and sales representatives in marketing and
selling our services and products; and
    
    the acceptance of our services and products by customers.
  Since sales of satellite communications equipment are dependent on the growth of communications
networks, if market demand for these networks does not increase from recent depressed levels, our
revenue and profitability are likely to decline.
  We depend upon certain key personnel and may not be able to retain these employees. If we lose the
services of these individuals or cannot hire additional qualified personnel, our business will be
harmed.
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Satellites upon which we rely may malfunction or be damaged or lost.
  We depend on our suppliers, some of which are our sole or a limited source of supply, and the loss
of these suppliers could materially adversely affect our business, results of operations and
financial condition.
  Our network may experience security breaches, which could disrupt our services.
  If the satellite communications industry fails to continue to develop or new technology makes it
obsolete, our business and financial condition will be harmed.
  We may not be able to keep pace with technological changes, which would make our services and
products become non-competitive and obsolete.
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Unauthorized use of our intellectual property by third parties may damage our business.
    Defending against intellectual property infringement claims could be time consuming and expensive,
and if we are not successful, could cause substantial expenses and disrupt our business.
  Risks Related to the Securities Markets and Ownership of Our Common Stock
 Our stock price is volatile.
  
    
    quarterly variations in operating results;
    
    announcements of new technology, products or services by us or any of our
competitors;
    
    changes in financial estimates or recommendations by securities analysts;
    
    general market conditions, including periods of significant volatility; or
    
    domestic and international economic factors unrelated to our performance.
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Because our common stock is thinly traded, it may be difficult to sell shares of our common stock
into the markets without experiencing significant price volatility.
  A third party could be prevented from acquiring shares of our stock at a premium to the market
price because of our anti-takeover provisions.
  We have not paid dividends 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 our stock.
  Risks Related to Government Approvals
 We are subject to many government regulations, and failure to comply with them will harm our
business.
 Operations and Use of Satellites
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Foreign Regulations
  Regulation of the Internet
  Telecommunications Taxation, Support Requirements, and Access Charges
   Export of Telecommunications Equipment
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Foreign Ownership
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Removed and Reserved
 
 Item 5. Other Information
  
 Item 6. Exhibits
 Exhibit No.
 3.1
    
    Amended and Restated Certificate of Incorporation of the Registrant, filed as Exhibit 3.1 to
the Annual Report on Form 10-K dated September 28, 1998 (Reg. No. 000-22839) (the Annual
Report), and hereby incorporated by reference.3.2
    
    Amended and Restated By-Laws of the Registrant, filed as Exhibit 3.3 to the Annual Report,
and hereby incorporated by reference.31.1
    
    Chief Executive Officer Certification required by Rules 13a-14 and 15d-14 under the
Securities Exchange Act of 1934, as amended (filed herewith).31.2
    
    Chief Financial Officer Certification required by Rules 13a- 14 and 15d- 14 under the
Securities 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-Oxley Act of 2002 (filed herewith).
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SIGNATURES
  GLOBECOMM SYSTEMS INC.                (Registrant)Date: February 9, 2011
    /s/ DAVID E. HERSHBERGDavid E. HershbergChairman of the Board and
Chief Executive Officer
(Principal Executive Officer) Date: February 9, 2011
    /s/ ANDREW C. MELFIAndrew C. MelfiSenior Vice President, Chief Financial
Officer and Treasurer (Principal
Financial and Accounting Officer) 34




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Index to Exhibits:
 Exhibit No.
 31.1
    
    Chief Executive Officer Certification required by Rules 13a-14 and 15d-14 under the
Securities Exchange Act of 1934, as amended (filed herewith).31.2
    
    Chief Financial Officer Certification required by Rules 13a- 14 and 15d- 14 under the
Securities 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-Oxley Act of 2002 (filed herewith).
 35