PETAH TIKVA, Israel, Aug. 13, 2014 (GLOBE NEWSWIRE) -- Gilat Satellite Networks Ltd. (Nasdaq:GILT) (TASE:GILT), a worldwide leader in satellite networking technology, solutions and services, today reported its results for the second quarter ended June 30, 2014.
Key Financial Highlights:
- Revenues for the second quarter increased to $54.1 million compared to $50.9 million in the first quarter of 2014.
- Non-GAAP operating income was $1.5 million, compared to operating income of $0.5 million in the first quarter of 2014. GAAP operating loss was $0.5 million compared to a loss of $1.5 million in the first quarter of 2014
- Management reaffirms 2014 objectives for annual revenues of $240-$245 million and EBITDA margin levels of approximately 9%
Revenues for the second quarter were $54.1 million, compared to $50.9 million in the first quarter of 2014 and to $61.9 million for the comparable period in 2013. The difference between the second quarter of 2014 and the comparable quarter in 2013 is mostly attributed to the decrease in revenues in our Services Division.
On a non-GAAP basis, operating income was $1.5 million in the second quarter as compared to operating income of $0.5 million in the first quarter of 2014 and of $1.9 million in the comparable quarter of 2013. On a non-GAAP basis, net income for the quarter was $0.6 million or an income of $0.01 per diluted share compared to a net loss of $0.6 million or a loss of $0.01 per diluted share in the first quarter of 2014 and to a net loss of $0.9 million or $0.02 per diluted share in the comparable period in 2013.
GAAP operating loss for the second quarter was $0.5 million as compared to an operating loss of $1.5 million in the first quarter of 2014 and of $0.1 million in the comparable period in 2013. GAAP net loss from continuing operations for the quarter was $1.4 million, or a loss of $0.03 per diluted share, compared to a net loss from continuing operations of $2.6 million, or a loss of $0.06 per diluted share for the first quarter of 2014 and compared to a net loss from continuing operations of $2.9 million, or a loss of $0.07 per diluted share in the comparable period in 2013.
EBITDA for the second quarter was $3.9 million compared to $2.8 million in the first quarter of 2014 and to $5.3 million in the comparable period in 2013.
Erez Antebi, Chief Executive Officer of Gilat stated, "Our improved results in the second quarter come from both of our Commercial and Defense Divisions, as well as from the cost-reduction measures we took last year. Our Defense business continued to grow, with increase in demand for both On-The-Pause as well as On-The-Move solutions."
Antebi concluded, "We anticipate the second half of 2014 to be stronger than the first half thanks to significant revenues to be generated by projects in Peru and Colombia as well as growth in the commercial and defense activities. We are confident that we are on track to meet our previously stated 2014 management objectives."
Key Recent Announcements:
- Gilat Announces a Breakthrough in LTE Backhauling using its Capricorn TDMA VSAT
- Gilat Upgrades Wireless Nation's Broadband Services for Consumers and Businesses
- Gilat's Low-profile Maritime Terminals Deployed
The GAAP financial results include the effect of non-cash stock options expenses, amortization of intangible assets resulting from the purchase price allocation, restructuring costs and net income (loss) from discontinued operations.
Conference Call and Webcast Details:
Gilat management will host a conference call today at 13:30 GMT/ 09:30 EDT/ 16:30 IDT (Israel Daylight Time) to discuss the results. International participants are invited to access the call at (972) 3-918-0644, and US-based participants are invited to access the call by dialing (888) 407-2553. A replay of the conference call will be available beginning at approximately 16:00 GMT/ 12:00 EDT/ 19:00 IDT today, until 16:00 GMT/ 12:00 EDT/ 19:00 IDT August 15, 2014. International participants are invited to access the replay at (972) 3-925-5900 and US-based participants are invited to access the replay by dialing (888) 326-9310. A replay of the call may also be accessed as a webcast via Gilat's website at www.gilat.com and will be archived for 30 days.
Notes:
(1) The attached summary financial statements were prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP). The attached summary financial statements are unaudited. To supplement the consolidated financial information and statements presented in accordance with GAAP, the Company presents its EBITDA before the impact of non-cash stock based compensation, depreciation and amortization, other income and other costs related to acquisition transactions. Non-GAAP presentations of net income, EBITDA and earnings per share are provided to enhance the understanding of the Company's historical financial performance and comparability between periods.
We regularly use supplemental non-GAAP financial measures internally to understand manage and evaluate our business and make operating decisions. We believe these non-GAAP financial measures provide consistent and comparable measures to help investors understand our current and future operating cash flow performance. These non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies.
(2) Operating income before depreciation, amortization, non-cash stock based compensation as per ASC 718 and other costs related to acquisition transactions ('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 or net income 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. . A reconciliation of specific adjustments to GAAP results is provided in the tables below.
About Gilat
Gilat Satellite Networks Ltd (Nasdaq:GILT) (TASE:GILT) is a leading provider of products and services for satellite-based broadband communications. Gilat develops and markets a wide range of high-performance satellite ground segment equipment and VSATs, with an increasing focus on the consumer and Ka-band market. In addition, Gilat enables mobile SOTM (Satellite-on-the-Move) solutions providing low-profile antennas, next generation solid-state power amplifiers and modems. Gilat also provides managed network and satellite-based services for rural telephony and Internet access via its subsidiaries in Peru and Colombia.
With over 25 years of experience, and over a million products shipped to more than 85 countries, Gilat has provided enterprises, service providers and operators with efficient and reliable satellite-based connectivity solutions, including cellular backhaul, banking, retail, e-government and rural communication networks. Gilat also enables leading defense, public security and news organizations to implement advanced, on-the-move tactical communications on board their land, air and sea fleets using Gilat's high-performance SOTM solutions. For more information, please visit us at www.gilat.com
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 | ||
| June 30, | December 31, | |
| 2014 | 2013 | |
| Unaudited | ||
| ASSETS | ||
| CURRENT ASSETS: | ||
| Cash and cash equivalents | 33,400 | 58,424 |
| Restricted cash | 32,197 | 18,891 |
| Restricted cash held by trustees | 877 | 3,221 |
| Trade receivables, net | 64,828 | 56,466 |
| Inventories | 24,700 | 27,141 |
| Other current assets | 17,759 | 10,143 |
| Total current assets | 173,761 | 174,286 |
| LONG-TERM INVESTMENTS AND RECEIVABLES: | ||
| Long-term restricted cash | 304 | 6,279 |
| Severance pay funds | 9,454 | 9,856 |
| Other long term receivables and deferred charges | 5,267 | 278 |
| Total long-term investments and receivables | 15,025 | 16,413 |
| PROPERTY AND EQUIPMENT, NET | 93,311 | 85,369 |
| INTANGIBLE ASSETS, NET | 25,900 | 28,830 |
| GOODWILL | 63,870 | 63,870 |
| TOTAL ASSETS | 371,867 | 368,768 |
| GILAT SATELLITE NETWORKS LTD. | ||
| CONDENSED CONSOLIDATED BALANCE SHEET | ||
| US dollars in thousands | ||
| June 30, | December 31, | |
| 2014 | 2013 | |
| Unaudited | ||
| LIABILITIES AND EQUITY | ||
| CURRENT LIABILITIES: | ||
| Short-term bank credit | 7,518 | -- |
| Current maturities of long-term loans | 4,664 | 4,665 |
| Trade payables | 20,991 | 20,900 |
| Accrued expenses | 21,037 | 16,748 |
| Short-term advances from customers, held by trustees | 3,596 | -- |
| Other current liabilities | 45,146 | 54,666 |
| Total current liabilities | 102,952 | 96,979 |
| LONG-TERM LIABILITIES: | ||
| Accrued severance pay | 9,123 | 9,628 |
| Long-term loans, net of current maturities | 26,888 | 31,251 |
| Other long-term liabilities | 8,936 | 4,877 |
| Total long-term liabilities | 44,947 | 45,756 |
| COMMITMENTS AND CONTINGENCIES | ||
| EQUITY: | ||
| Share capital - ordinary shares of NIS 0.2 par value | 1,957 | 1,932 |
| Additional paid-in capital | 874,986 | 873,045 |
| Accumulated other comprehensive income | 1,670 | 1,591 |
| Accumulated deficit | (654,645) | (650,535) |
| Total equity | 223,968 | 226,033 |
| TOTAL LIABILITIES AND EQUITY | 371,867 | 368,768 |
| 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) | ||||||
| Three months ended | Three months ended | |||||
| 30 June 2014 | 30 June 2013 | |||||
| GAAP | Adjustments (1) | Non-GAAP | GAAP | Adjustments (1) | Non-GAAP | |
| Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | |
| Revenues | 54,050 | -- | 54,050 | 61,916 | -- | 61,916 |
| Cost of revenues | 34,730 | (1,248) | 33,482 | 41,930 | (1,244) | 40,686 |
| Gross profit | 19,320 | 1,248 | 20,568 | 19,986 | 1,244 | 21,230 |
| 36% | 38% | 32% | 34% | |||
| Research and development expenses: | ||||||
| Expenses incurred | 6,878 | (119) | 6,759 | 7,145 | (112) | 7,033 |
| Less - grants | 594 | -- | 594 | 532 | -- | 532 |
| 6,284 | (119) | 6,165 | 6,613 | (112) | 6,501 | |
| Selling and marketing expenses | 8,677 | (350) | 8,327 | 7,774 | (313) | 7,461 |
| General and administrative expenses | 4,841 | (290) | 4,551 | 5,672 | (273) | 5,399 |
| Operating income (loss) | (482) | 2,007 | 1,525 | (73) | 1,942 | 1,869 |
| Financial expenses, net | (515) | -- | (515) | (2,396) | -- | (2,396) |
| Income (loss) before taxes on income | (997) | 2,007 | 1,010 | (2,469) | 1,942 | (527) |
| Taxes on income | 434 | -- | 434 | 381 | -- | 381 |
| Net income (loss) from continuing operations | (1,431) | 2,007 | 576 | (2,850) | 1,942 | (908) |
| Net income (loss) from discontinued operations | 8 | (8) | -- | (1,126) | 1,126 | -- |
| Net income (loss) | (1,423) | 1,999 | 576 | (3,976) | 3,068 | (908) |
| Basic net earnings (loss) per share from continuing operations | (0.03) | (0.07) | ||||
| Basic net earnings (loss) per share from discontinued operations | 0.00 | (0.03) | ||||
| Basic net earnings (loss) per share | (0.03) | 0.01 | (0.10) | (0.02) | ||
| Diluted net earnings (loss) per share from continuing operations | (0.03) | (0.07) | ||||
| Diluted net earnings (loss) per share from discontinued operations | 0.00 | (0.03) | ||||
| Diluted net earnings (loss) per share | (0.03) | 0.01 | (0.10) | (0.02) | ||
| Weighted average number of shares used in | ||||||
| computing net earnings (loss) per share | ||||||
| Basic | 42,358 | 42,358 | 41,932 | 41,932 | ||
| Diluted | 42,358 | 43,579 | 41,932 | 41,932 | ||
| (1) Adjustments reflect the effect of non-cash stock based compensation as per ASC 718, amortization of intangible assets related to acquisition transactions, and net income (loss) from discontinued operations. | ||||||
| Three months ended | Three months ended | |||||
| 30 June 2014 | 30 June 2013 | |||||
| Unaudited | Unaudited | |||||
| Non-cash stock-based compensation expenses: | ||||||
| Cost of revenues | 60 | 46 | ||||
| Research and development | 119 | 112 | ||||
| Selling and marketing | 138 | 102 | ||||
| General and administrative | 290 | 273 | ||||
| 607 | 533 | |||||
| Amortization of intangible assets related to acquisition transactions: | ||||||
| Cost of revenues | 1,188 | 1,198 | ||||
| Selling and marketing | 212 | 211 | ||||
| 1,400 | 1,409 | |||||
| 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) | ||||||
| Six months ended | Six months ended | |||||
| 30 June 2014 | 30 June 2013 | |||||
| GAAP | Adjustments (1) | Non-GAAP | GAAP | Adjustments (1) | Non-GAAP | |
| Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | ||
| Revenues | 104,901 | -- | 104,901 | 127,336 | -- | 127,336 |
| Cost of revenues | 65,606 | (2,515) | 63,091 | 84,569 | (2,482) | 82,087 |
| Gross profit | 39,295 | 2,515 | 41,810 | 42,767 | 2,482 | 45,249 |
| 37% | 40% | 34% | 36% | |||
| Research and development expenses: | ||||||
| Expenses incurred | 14,117 | (241) | 13,876 | 14,776 | (211) | 14,565 |
| Less - grants | 948 | -- | 948 | 864 | -- | 864 |
| 13,169 | (241) | 12,928 | 13,912 | (211) | 13,701 | |
| Selling and marketing expenses | 18,367 | (692) | 17,675 | 16,760 | (614) | 16,146 |
| General and administrative expenses | 9,753 | (593) | 9,160 | 11,117 | (535) | 10,582 |
| Operating income (loss) | (1,994) | 4,041 | 2,047 | 978 | 3,842 | 4,820 |
| Financial expenses, net | (1,549) | -- | (1,549) | (3,147) | -- | (3,147) |
| Income (loss) before taxes on income | (3,543) | 4,041 | 498 | (2,169) | 3,842 | 1,673 |
| Taxes on income | 524 | -- | 524 | 757 | -- | 757 |
| Net income (loss) from continuing operations | (4,067) | 4,041 | (26) | (2,926) | 3,842 | 916 |
| Net income (loss) from discontinued operations | (43) | 43 | -- | (3,406) | 3,406 | -- |
| Net income (loss) | (4,110) | 4,084 | (26) | (6,332) | 7,248 | 916 |
| Basic net earnings (loss) per share from continuing operations | (0.10) | (0.51) | ||||
| Basic net loss per share from discontinued operations | (0.00) | (0.05) | ||||
| Basic net earnings (loss) per share | (0.10) | (0.00) | (0.56) | 0.02 | ||
| Diluted net earnings (loss) per share from continuing operations | (0.10) | (0.51) | ||||
| Diluted net loss per share from discontinued operations | (0.00) | (0.05) | ||||
| Diluted net earnings (loss) per share | (0.10) | (0.00) | (0.56) | 0.02 | ||
| Weighted average number of shares used in | ||||||
| computing net earnings (loss) per share | ||||||
| Basic | 42,267 | 42,267 | 41,849 | 41,849 | ||
| Diluted | 42,267 | 42,267 | 41,849 | 43,906 | ||
| (1) Adjustments reflect the effect of non-cash stock based compensation as per ASC 718, amortization of intangible assets related to acquisition transactions, and net income (loss) from discontinued operations. | ||||||
| Six months ended | Six months ended | |||||
| 30 June 2014 | 30 June 2013 | |||||
| Unaudited | Unaudited | |||||
| Non-cash stock-based compensation expenses: | ||||||
| Cost of revenues | 118 | 86 | ||||
| Research and development | 241 | 211 | ||||
| Selling and marketing | 268 | 191 | ||||
| General and administrative | 593 | 535 | ||||
| 1,220 | 1,023 | |||||
| Amortization of intangible assets related to acquisition transactions: | ||||||
| Cost of revenues | 2,397 | 2,396 | ||||
| Selling and marketing | 424 | 423 | ||||
| 2,821 | 2,819 | |||||
| GILAT SATELLITE NETWORKS LTD. | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| U.S. dollars in thousands (except per share data) | ||||
| Six months ended | Three months ended | |||
| June 30, | June 30, | |||
| 2014 | 2013 | 2014 | 2013 | |
| Unaudited | Unaudited | Unaudited | Unaudited | |
| Revenues | 104,901 | 127,336 | 54,050 | 61,916 |
| Cost of revenues | 65,606 | 84,569 | 34,730 | 41,930 |
| Gross profit | 39,295 | 42,767 | 19,320 | 19,986 |
| Research and development expenses: | ||||
| Expenses incurred | 14,117 | 14,776 | 6,878 | 7,145 |
| Less - grants | 948 | 864 | 594 | 532 |
| 13,169 | 13,912 | 6,284 | 6,613 | |
| Selling and marketing expenses | 18,367 | 16,760 | 8,677 | 7,774 |
| General and administrative expenses | 9,753 | 11,117 | 4,841 | 5,672 |
| Operating income (loss) | (1,994) | 978 | (482) | (73) |
| Financial expenses, net | (1,549) | (3,147) | (515) | (2,396) |
| Income (loss) before taxes on income | (3,543) | (2,169) | (997) | (2,469) |
| Taxes on income | 524 | 757 | 434 | 381 |
| Net loss from continuing operations | (4,067) | (2,926) | (1,431) | (2,850) |
| Net loss from discontinued operations | (43) | (3,406) | 8 | (1,126) |
| Net loss | (4,110) | (6,332) | (1,423) | (3,976) |
| Net loss per share from continuing operations (basic and diluted) | (0.10) | (0.07) | (0.03) | (0.07) |
| Net loss per share from discontinued operations (basic and diluted) | (0.00) | (0.08) | 0.00 | (0.03) |
| Net loss per share (basic and diluted) | (0.10) | (0.15) | (0.03) | (0.10) |
| Weighted average number of shares used in computing net loss per share | ||||
| Basic and diluted | 42,267 | 41,849 | 42,358 | 41,932 |
| GILAT SATELLITE NETWORKS LTD. | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
| US dollars in thousands | ||||
| Six months ended | Three months ended | |||
| June 30, | June 30, | |||
| 2014 | 2013 | 2014 | 2013 | |
| Unaudited | Unaudited | Unaudited | Unaudited | |
| Cash flows from continuing operations | ||||
| Cash flows from operating activities: | ||||
| Net loss from continuing operations | (4,067) | (2,926) | (1,431) | (2,850) |
| Adjustments required to reconcile net loss | ||||
| to net cash generated provided by (used in) operating activities: | ||||
| Depreciation and amortization | 7,428 | 9,512 | 3,744 | 4,815 |
| Stock-based compensation | 1,220 | 1,023 | 607 | 533 |
| Accrued severance pay, net | (103) | 64 | 19 | 50 |
| Accrued interest and exchange rate differences on short and long-term restricted cash, net | (32) | 392 | (118) | 353 |
| Exchange rate differences on long-term loans | (34) | (46) | (40) | 86 |
| Capital loss from disposal of property and equipment | 60 | 12 | 43 | -- |
| Deferred income taxes | (47) | 1,117 | (11) | 1,133 |
| Increase in trade receivables, net | (8,034) | (2,205) | (5,994) | (6,385) |
| Decrease (increase) in other assets (including short-term, long-term and deferred charges) | (12,535) | 3,802 | (4,752) | 4,422 |
| Decrease (increase) in inventories | 699 | (4,450) | 29 | (538) |
| Increase (decrease) in trade payables | (52) | 3,026 | 1,998 | 2,769 |
| Increase (decrease) in accrued expenses | 4,176 | (3,443) | 2,501 | (2,611) |
| Increase (decrease) in advances from customers, held by trustees | 3,451 | (3,923) | (777) | 306 |
| Increase (decrease) in other current liabilities and other long term liabilities | (5,842) | (4,491) | (3,599) | 644 |
| Net cash provided by (used in) operating activities | (13,712) | (2,536) | (7,781) | 2,727 |
| GILAT SATELLITE NETWORKS LTD. | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
| US dollars in thousands | ||||
| Six months ended | Three months ended | |||
| June 30, | June 30, | |||
| 2014 | 2013 | 2014 | 2013 | |
| Unaudited | Unaudited | Unaudited | Unaudited | |
| Cash flows from investing activities: | ||||
| Purchase of property and equipment | (10,319) | (1,820) | (9,794) | (887) |
| Investment in restricted cash held by trustees | (4,228) | (11,236) | -- | (9,454) |
| Proceeds from restricted cash held by trustees | 6,588 | 9,771 | 3,638 | 6,364 |
| Investment in restricted cash (including long-term) | (7,516) | (2,365) | (7,516) | (202) |
| Proceeds from restricted cash (including long-term) | 176 | 2,021 | 100 | 1,956 |
| Purchase of intangible assets | -- | (16) | -- | -- |
| Net cash used in investing activities | (15,299) | (3,645) | (13,572) | (2,223) |
| Cash flows from financing activities: | ||||
| Issuance of restricted stock units and exercise of stock options | 746 | 562 | 453 | 9 |
| Payment of obligation related to the purchase of intangible assets | -- | (500) | -- | (500) |
| Short-term bank credit, net | 7,216 | (458) | 5,564 | (975) |
| Repayment of long-term loans | (4,330) | (5,975) | (165) | (988) |
| Net cash provided by (used in) financing activities | 3,632 | (6,371) | 5,852 | (2,454) |
| Cash flows from discontinued operations | ||||
| Net cash used in operating activities | -- | (3,336) | -- | (3,254) |
| Net cash provided by investing activities | -- | 1,170 | -- | 160 |
| Net cash provided by (used in) financing activities | -- | 13,818 | -- | (442) |
| -- | 11,652 | -- | (3,536) | |
| Effect of exchange rate changes on cash and cash equivalents | 355 | (227) | 322 | (190) |
| Decrease in cash and cash equivalents | (25,024) | (1,127) | (15,179) | (5,676) |
| Cash and cash equivalents at the beginning of the period | 58,424 | 66,968 | 48,579 | 71,517 |
| Cash and cash equivalents at the end of the period | 33,400 | 65,841 | 33,400 | 65,841 |
| GILAT SATELLITE NETWORKS LTD. | ||||
| CONDENSED EBITDA | ||||
| US dollars in thousands | ||||
| Six months ended | Three months ended | |||
| June 30, | June 30, | |||
| 2014 | 2013 | 2014 | 2013 | |
| Unaudited | Unaudited | Unaudited | Unaudited | |
| Operating income (loss) | (1,994) | 978 | (482) | (73) |
| Add: | ||||
| Non-cash stock-based compensation expenses | 1,220 | 1,023 | 607 | 533 |
| Depreciation and amortization | 7,428 | 9,512 | 3,744 | 4,815 |
| EBITDA | 6,654 | 11,513 | 3,869 | 5,275 |