PETAH TIKVA, Israel, Feb. 17, 2009 (GLOBE NEWSWIRE) -- Gilat Satellite Networks Ltd. (Nasdaq:GILT), a worldwide leader in satellite networking technology, solutions and services, today reported its results for the fourth quarter ending December 31, 2008.
Revenues for the fourth quarter of 2008 were $66.1 million, compared to $72.7 million for the same period in 2007. Net loss for the fourth quarter of 2008 was $6.5 million or $0.16 per diluted share, compared to a net loss of $6.2 million or $0.16 per diluted share in the fourth quarter of 2007. Non-GAAP net loss for the fourth quarter of 2008 was $1.8 million, or $0.04 per diluted share, compared to Non-GAAP net income of $6.2 million, or $0.15 per diluted share, in the fourth quarter of 2007.
Revenues for the twelve month period ended December 31, 2008 were $267.5 million, compared to $282.6 million in the comparable period of 2007. Net loss for the twelve month period ended December 31, 2008 was $1.1 million or $0.03 per diluted share, compared to net income of $10.1 million or $0.24 per diluted share in the same period of 2007. Non-GAAP net income for the twelve month period ended December 31, 2008 was $5.2 million, or $0.12 per diluted share, versus Non-GAAP net income of $23.6 million, or $0.57 per diluted share, in the comparable period of 2007.
At the end of 2008, the Company announced the successful execution of new agreements with the Ministry of Colombia, putting an end to long negotiations and clearing the way for the Company to be able to release $24 million from its restricted cash during 2009 and 2010. The net loss in the 2008 GAAP results includes an impairment of the Company's long lived assets and other charges in an amount of $5 million relating to these new agreements (compared to $12.2 million recorded in 2007 relating to operations in Colombia).
For a detailed reconciliation of GAAP to non-GAAP financial information and for more information regarding Gilat's use of non-GAAP financial measures, please see the table titled "Reconciliation between GAAP and non-GAAP statements of operations" as well as the notes contained in this press release.
Gilat's Chief Executive Officer and Chairman of the Board Amiram Levinberg said, "Entering 2009, our business remains steady and the Company is in a strong financial position, situating us well for both potential acquisition opportunities and ongoing business. Our fourth quarter ended relatively on par with the previous quarter in terms of revenues and down from last year's revenues which was not unexpected in the context of the current economic environment. Our management targets for 2009 are to increase revenues while improving profitability and generating free cash flow."
Recent Announcements:
-- Telecom Fiji Ltd., ("TFL") added Gilat's SkyAbis cellular backhaul solution to its satellite communications network to enhance Fiji's mobile service. The expansion followed TFL's successful deployment and operation of a Gilat SkyEdge network which provides a number of diverse services and applications in the remote Fiji islands. -- Spacenet Inc., announced that its high-performance Connexstar satellite communications services have been deployed to support Command Center Trailers for Michael Waltrip Racing, a NASCAR Sprint Cup Series and Nationwide Series racing organization. -- DCC Satellite & Networks Ltd., is deploying a SkyEdge II network to serve hundreds of Nigerian financial institutions. DCC chose Gilat's SkyEdge II network to provide enhanced voice and data networking services to the banking sector. -- Telecommunications Consultants India Ltd (TCIL), a leading telecommunications consultancy and engineering company, chose Gilat to provide Nepal Telecom with a SkyEdge broadband satellite communications network covering hundreds of sites. Gilat is also providing its SkyAbis cellular backhaul solution for this project. -- H-E-B, one of the nation's largest independently owned food retailers, deployed Spacenet's high-performance Connexstar satellite services to provide an emergency communication network for recent hurricane disaster-relief efforts. -- JSC Kazakhtelecom (KT) has expanded its existing SkyEdge network to serve several hundred additional sites in remote locations nationwide. In addition to providing network connectivity for businesses and consumers, the new expansion will be used to provide telephony and broadband Internet services as part of a Universal Service Obligation (USO). -- Gilat announced the signing of new agreements with the Colombian Ministry of Communications for the provision of services under the Compartel I, Compartel II and Telecentros projects which were awarded to Gilat's Colombian subsidiaries in 1999 and 2002.
Gilat will host a conference call today with an accompanying slide presentation at 9:30 AM EST. In order to ensure audio access, participants from the U.S. should dial in at (888) 723-3164 and international participants should dial in at (972) 3-918-0650. The presentation may be accessed through the Company's website at www.gilat.com prior to the call. The call will also be available as a Webcast on the Company's website at: www.gilat.com and will be archived for 30 days.
(1) The attached summary financial statements were prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP). The attached summary financial statements for the fourth quarter of 2008 are unaudited. To supplement the consolidated financial statements presented in accordance with GAAP, the Company presents Gilat's net income (loss), EBITDA and earnings (loss) per diluted share, before the impact of impairment of long lived assets and other charges, before expenses related to the merger transaction, before expenses related to cost reduction initiatives, before other income net of tax and before stock based compensation expenses, which is the non-cash stock based compensation expenses as per SFAS 123 (R). Non-GAAP presentations of net income (loss), EBITDA and earnings (loss) per share are provided to enhance the understanding of the Company's historical financial performance and comparability between periods.
(2) Operating income (loss) before depreciation, amortization, non cash stock based compensation expenses as per SFAS 123(R) and exceptional items such as the impact of an impairment of long lived assets and other charges ('EBITDA'), is presented because it is a measure commonly used and is presented solely in order to improve the understanding of the Company's operating results and to provide further perspective on these results. EBITDA, however, should not be considered as an alternative to operating income (loss) or net income (loss) for the period as an indicator of the operating performance of the Company.
Similarly, EBITDA should not be considered as an alternative to cash flows from operating activities as a measure of liquidity. EBITDA is not a measure of financial performance under generally accepted accounting principles and may not be comparable to other similarly titled measures for other companies. EBITDA may not be indicative of the historic operating results of the Company; nor is it meant to be predictive of potential future results. Reconciliation between the Company's Operating income (loss) and EBITDA is presented in the attached summary financial statements.
About Gilat Satellite Networks Ltd.
Gilat Satellite Networks Ltd. (Nasdaq:GILT) is a leading provider of products and services for satellite-based communications networks. The Company operates under three business units: (i) Gilat Network Systems, a provider of network systems and associated professional services to service providers and operators worldwide; (ii) Spacenet Inc., a provider of managed services in North America to the business and government segments; and (iii) Spacenet Rural Communications, a provider of rural telephony and Internet access solutions to remote areas primarily in Latin America.
Gilat was founded in 1987 and has shipped over 750,000 Very Small Aperture Terminals (VSATs) to more than 85 countries across six continents. Gilat's headquarters is located in Petah Tikva, Israel. The Company has 16 sales and service offices worldwide. Gilat markets a full line of high-performance VSATs under the SkyEdge(tm) and SkyEdge II Product Family.
The Gilat Satellite Networks Ltd. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5848
Certain statements made herein that are not historical are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. The words "estimate," "project," "intend," "expect," "believe" and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties. Many factors could cause the actual results, performance or achievements of Gilat to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in general economic and business conditions, inability to maintain market acceptance to Gilat's products, inability to timely develop and introduce new technologies, products and applications, rapid changes in the market for Gilat's products, loss of market share and pressure on prices resulting from competition, introduction of competing products by other companies, inability to manage growth and expansion, loss of key OEM partners, inability to attract and retain qualified personnel, inability to protect the Company's proprietary technology and risks associated with Gilat's international operations and its location in Israel. For additional information regarding these and other risks and uncertainties associated with Gilat's business, reference is made to Gilat's reports filed from time to time with the Securities and Exchange Commission.
GILAT SATELLITE NETWORKS LTD. CONDENSED CONSOLIDATED BALANCE SHEET US dollars in thousands December 31, December 31, ------------ ------------ 2008 2007 ------------ ------------ Unaudited ------------ ------------ ASSETS CURRENT ASSETS: Cash and cash equivalents 73,916 122,807 Short-term bank deposits and held to maturity marketable securities 63,033 45,578 Short-term restricted cash 8,581 7,091 Restricted cash held by trustees 24,169 7,450 Trade receivables, (net of allowance for doubtful accounts) 59,038 43,746 Inventories 20,719 24,794 Other current assets 22,036 24,748 -------- -------- Total current assets 271,492 276,214 -------- -------- LONG-TERM INVESTMENTS AND RECEIVABLES: Long-term restricted cash 5,692 6,321 Long-term restricted cash held by trustees -- 16,544 Severance pay fund 11,085 11,835 Long-term trade receivables, receivables in respect of capital leases and other receivables 8,937 9,170 -------- -------- Total long-term investments and receivables 25,714 43,870 -------- -------- PROPERTY AND EQUIPMENT, NET 109,369 105,247 -------- -------- INTANGIBLE ASSETS AND DEFERRED CHARGES, NET 4,064 4,771 -------- -------- TOTAL ASSETS 410,639 430,102 ======== ======== GILAT SATELLITE NETWORKS LTD CONDENSED CONSOLIDATED BALANCE SHEET US dollars in thousands December 31, December 31, ------------ ------------ 2008 2007 ------------ ------------ Unaudited ------------ ------------ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short-term bank credit 6,500 5,823 Current maturities of long-term loans 4,346 5,354 Trade payables 23,317 25,954 Accrued expenses 25,761 20,275 Short-term advances from customer held by trustees 24,169 15,005 Other current liabilities 34,593 52,436 -------- -------- Total current liabilities 118,686 124,847 -------- -------- LONG-TERM LIABILITIES: Accrued severance pay 12,297 11,723 Long-term advances from customer held by trustees -- 8,989 Long-term loans, net 14,003 18,704 Accrued interest related to restructured debt 1,838 2,493 Convertible subordinated notes 16,315 16,315 Other long-term liabilities 17,276 19,221 -------- -------- Total long-term liabilities 61,729 77,445 -------- -------- COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY: Share capital - ordinary shares of NIS 0.2 par value 1,821 1,796 Additional paid in capital 862,390 859,207 Accumulated other comprehensive income 2,106 1,776 Accumulated deficit (636,093) (634,969) -------- -------- Total shareholders' equity 230,224 227,810 -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 410,639 430,102 ======== ========
GILAT SATELLITE NETWORKS LTD. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS U.S. dollars in thousands (except share and per share data) Year ended Three months ended December 31, December 31, ------------------ ------------------ 2008 2007 2008 2007 -------- -------- -------- -------- Unaudited Unaudited Unaudited -------- -------- -------- -------- Revenues 267,526 282,619 66,101 72,704 Cost of revenues 181,574 180,774 45,817 46,495 -------- -------- -------- -------- Gross profit 85,952 101,845 20,284 26,209 -------- -------- -------- -------- Research and development expenses: Expenses incurred 18,702 17,270 5,409 4,424 Less - grants 1,760 2,240 380 484 -------- -------- -------- -------- 16,942 15,030 5,029 3,940 -------- -------- -------- -------- Selling and marketing, general and administrative expenses 65,602 69,426 17,032 17,872 Impairment of long lived assets and other charges 5,020 12,218 5,020 12,218 -------- -------- -------- -------- Operating income (loss) (1,612) 5,171 (6,797) (7,821) -------- -------- -------- -------- Financial income (expenses), net 1,300 5,882 (961) 2,024 Expenses related to merger transaction (2,350) -- (378) -- Other income 2,983 -- 1,801 -- -------- -------- -------- -------- Income (loss) before taxes on income 321 11,053 (6,335) (5,797) -------- -------- -------- -------- Taxes on income 1,445 963 123 418 -------- -------- -------- -------- Net income (loss) (1,124) 10,090 (6,458) (6,215) ======== ======== ======== ======== Basic net earnings (loss) per share (0.03) 0.26 (0.16) (0.16) ======== ======== ======== ======== Diluted net earnings (loss) per share (0.03) 0.24 (0.16) (0.16) ======== ======== ======== ======== Weighted average number of shares used in computing net earnings (loss) per share Basic 39,901 39,141 40,049 39,484 ======== ======== ======== ======== Diluted 39,901 41,576 40,049 39,484 ======== ======== ======== ========
GILAT SATELLITE NETWORKS LTD RECONCILIATION BETWEEN GAAP AND NON-GAAP STATEMENTS OF OPERATIONS FOR COMPARATIVE PURPOSES U.S. dollars in thousands (except per share data) Year ended Three months ended December 31, December 31, ------------------ ------------------ 2008 2007 2008 2007 -------- -------- -------- -------- Unaudited Unaudited Unaudited Unaudited -------- -------- -------- -------- GAAP operating income (loss) (1,612) 5,171 (6,797) (7,821) Impairment of long lived assets and other charges 5,020 12,218 5,020 12,218 Non-cash stock based compensation(1) 692 1,303 174 238 Employees retirement benefits(2) 911 -- 911 -- -------- -------- -------- -------- Non-GAAP operating income (loss) 5,011 18,692 (692) 4,635 ======== ======== ======== ======== GAAP net income (loss) (1,124) 10,090 (6,458) (6,215) Impairment of long lived assets and other charges 5,020 12,218 5,020 12,218 Non-cash stock based compensation(1) 692 1,303 174 238 Employees retirement benefits(2) 911 -- 911 -- Expenses related to merger transaction 2,350 -- 378 -- Other income net of tax (2,687) -- (1,801) -- -------- -------- -------- -------- Non-GAAP net income (loss) 5,162 23,611 (1,776) 6,241 ======== ======== ======== ======== GAAP earnings (loss) per share (diluted) (0.03) 0.24 (0.16) (0.16) Impairment of long lived assets and other charges 0.12 0.30 0.12 0.30 Non-cash stock based compensation(1) 0.02 0.03 0.00 0.01 Employees retirement benefits(2) 0.02 -- 0.02 -- Expenses related to merger transaction 0.05 -- 0.01 -- Other income net of tax (0.06) -- (0.03) -- -------- -------- -------- -------- Non-GAAP earnings (loss) per share (diluted) 0.12 0.57 (0.04) 0.15 ======== ======== ======== ======== (1) Non-cash stock based compensation: Cost of revenues 51 12 30 4 Research and development 9 6 8 -- Selling marketing, general and administrative 632 1,285 136 234 -------- -------- -------- -------- 692 1,303 174 238 ======== ======== ======== ======== (2) Employees retirement benefits: Cost of revenues 234 -- 234 -- Research and development 403 -- 403 -- Selling marketing, general and administrative 274 -- 274 -- -------- -------- -------- -------- 911 -- 911 -- ======== ======== ======== ========
GILAT SATELLITE NETWORKS LTD. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS US dollars in thousands Year ended Three months December 31, ended December 31, ------------------ ------------------- 2008 2007 2008 2007 ------- ------- ------- ------- Unaudited Unaudited Unaudited --------- --------- --------- Cash flows from operating activities: ------------------------- Net income (loss) (1,124) 10,090 (6,458) (6,215) Adjustments required to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 13,132 17,715 3,507 2,752 Impairment of long lived assets and other charges 5,020 12,218 5,020 12,218 Stock based compensation 692 1,303 174 238 Accrued severance pay, net 1,324 (218) 936 (198) Accrued interest on short and long-term restricted cash (189) (1,326) 15 (227) Accrued interest on held- to-maturity marketable securities (1,778) (2,102) (1) (494) Exchange rate differences on long-term loans (348) 766 (314) 263 Exchange rate differences on loans to employees 28 (250) 7 (122) Capital loss from disposal of property and equipment 89 167 38 14 Deferred income taxes (265) (891) (45) (296) Increase in trade receivables, net (15,979) (14,037) (4,351) (242) Decrease (increase) in other assets (including short-term, long-term and deferred charges) (4,336) 28,529 (2,196) 13,378 Decrease (increase) in inventories 36 (207) 1,128 (4,710) Increase (decrease) in trade payables (3,185) 4,619 4,478 7,260 Increase (decrease) in accrued expenses 3,640 (1,455) (364) 633 Increase (decrease) in advances from customer held by trustees, net 176 (7,914) (28) 227 Increase (decrease) in other accounts payable and other long term liabilities, mainly deferred revenue (16,553) (24,232) (1,558) (11,730) -------- ------- -------- -------- Net cash provided by (used in) operating activities (19,620) 22,775 (12) 12,749 -------- ------- -------- -------- GILAT SATELLITE NETWORKS LTD. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS US dollars in thousands Year ended Three months December 31, ended December 31, ------------------ ------------------- 2008 2007 2008 2007 ------- ------- ------- ------- Unaudited Unaudited Unaudited --------- --------- --------- Cash flows from investing activities: ------------------------- Purchase of property and equipment (13,799) (9,269) (5,071) (3,557) Proceeds from sale of investment 1,801 -- 1,801 -- Other investments (195) (223) -- (223) Purchase of held to maturity marketable securities (143,572) (73,791) (43,197) (6,146) Proceeds from held to maturity marketable securities 127,895 30,315 9,767 10,381 Proceeds from sale of property and equipment 426 33 -- 33 Loans to employees, net 2,798 946 6 101 Proceeds from restricted cash held by trustees -- 90 -- -- Investment in restricted cash (including long-term) (1,630) (6,196) (1,028) (244) Proceeds from restricted cash (including long-term) 769 4,259 598 435 -------- ------- -------- -------- Net cash provided by (used in) investing activities (25,507) (53,836) (37,124) 780 -------- ------- -------- -------- Cash flows from financing activities: ------------------------- Exercise of stock options 2,516 4,571 -- 1,478 Issuance expenses -- (324) -- (62) Short-term bank credit, net 678 4,623 1,000 -- Proceeds from long-term loans -- 1,000 -- -- Repayment of long-term loans (5,362) (6,563) (1,084) (614) -------- ------- -------- -------- Net cash provided by (used in) financing activities (2,168) 3,307 (84) 802 -------- ------- -------- -------- Effect of exchange rate changes on cash and cash equivalents (1,596) 1,016 (1,162) 219 -------- ------- -------- -------- Increase (decrease) in cash and cash equivalents (48,891) (26,738) (38,382) 14,550 Cash and cash equivalents at the beginning of the period 122,807 149,545 112,298 108,257 -------- ------- -------- -------- Cash and cash equivalents at the end of the period 73,916 122,807 73,916 122,807 ======== ======== ======== ========
GILAT SATELLITE NETWORKS LTD. CONDENSED EBITDA US dollars in thousands Year ended Three months ended December 31, December 31, ------------------ ------------------ 2008 2007 2008 2007 -------- -------- -------- -------- Unaudited Unaudited Unaudited Unaudited -------- -------- -------- -------- Operating income (loss) (1,612) 5,171 (6,797) (7,821) Add: Non-cash stock option expenses 692 1,303 174 238 Depreciation and amortization 13,132 17,715 3,507 2,752 Impairment of long lived assets and other charges 5,020 12,218 5,020 12,218 -------- -------- -------- -------- EBITDA 17,232 36,407 1,904 7,387 ======== ======== ======== ========