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
======== ======== ======== ========