PETAH TIKVA, Israel, May 11, 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 quarter ending March 31, 2009.
Revenues for the first quarter of 2009 were $60.8 million compared to $70.5 million for the same period of 2008. Net income for the first quarter of 2009 was $0.2 million, or $0.01 per diluted share, compared to a net income of $4.6 million, or $0.11 per diluted share in the first quarter of 2008.
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, "In the first quarter of 2009, we were able to maintain profitability despite the challenging economical environment, predominantly due to the steps we took to adjust our cost structure. We have started to release money from the restricted cash held by trustees in Colombia and once again are able to recognize revenues from our Colombian operations."
Recent Announcements:
-- Spacenet Rural Communications deployed a SkyEdge II
high-performance broadband satellite network to serve Banco de la
Nacion and other customers in Peru. With the migration to the new
network, these customers will benefit from enhanced voice and
data networking services.
-- NeraTel Group selected Gilat's SkyEdge II broadband satellite
network to serve a government organization in South East Asia.
The network, which incorporates Gilat's newly launched mesh
capabilities, will provide high-performance and advanced
communications that meet the requirements of NeraTel's customer.
-- Netcom Africa selected a SkyEdge II broadband satellite network to
serve West Africa's corporate, energy and financial sectors.
Netcom chose Gilat's SkyEdge II network to provide VoIP and
high-speed data networking services.
-- Spacenet Inc.'s high-performance Connexstar satellite
communications services have been deployed as part of an incident
response vehicle for Erie Insurance.
-- Spacenet Inc. is providing an upgraded data network to
approximately 500 Cumberland Farms locations across the United
States. The new network combines terrestrial and satellite
technologies to support advanced applications and ensure business
continuity.
Gilat will host a conference call today with an accompanying slide presentation at 9:30 AM ET. In order to ensure audio access, participants from the U.S. should dial in at (888) 723-3163 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.
Notes:
(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 first quarter of 2009 are unaudited. To supplement the consolidated financial statements presented in accordance with GAAP, the Company presents Gilat's net income, EBITDA and earnings per diluted share, before the impact of a non-cash share-based payment charge, which is the non-cash stock option expense as per SFAS 123 (R). 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.
(2) Operating income before depreciation, amortization, non cash stock option expenses as per SFAS 123(R) and exceptional items ('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. Reconciliation between the Company's Operating income and EBIDTA 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
March 31, Dec. 31,
--------- ---------
2009 2008
--------- ---------
Unaudited Audited
--------- ---------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 68,938 73,916
Short-term bank deposits and held-to-maturity
marketable securities 64,483 63,033
Short-term restricted cash 8,432 8,581
Restricted cash held by trustees 21,272 24,169
Trade receivables, net 57,527 59,038
Inventories 19,375 20,719
Other current assets 17,804 22,036
--------- ---------
Total current assets 257,831 271,492
--------- ---------
LONG-TERM INVESTMENTS AND RECEIVABLES:
Long-term restricted cash 5,692 5,692
Severance pay fund 10,336 11,085
Long-term trade receivables, receivables in
respect of capital leases and other
receivables 3,992 8,937
--------- ---------
Total long-term investments and receivables 20,020 25,714
--------- ---------
PROPERTY AND EQUIPMENT, NET 106,930 109,369
--------- ---------
INTANGIBLE ASSETS AND DEFERRED CHARGES, NET 3,836 4,064
--------- ---------
TOTAL ASSETS 388,617 410,639
------------ ========= =========
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
US dollars in thousands
March 31, Dec. 31,
--------- ---------
2009 2008
--------- ---------
Unaudited Audited
--------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank credit 6,500 6,500
Current maturities of long-term loans 4,335 4,346
Trade payables 16,958 23,317
Accrued expenses 24,054 25,761
Short-term advances from customer,
held by trustees 21,272 24,169
Other current liabilities 28,868 34,593
--------- ---------
Total current liabilities 101,987 118,686
--------- ---------
LONG-TERM LIABILITIES:
Accrued severance pay 11,255 12,297
Long-term loans, net 13,648 14,003
Accrued interest related to restructured debt 1,512 1,838
Convertible subordinated notes 16,315 16,315
Other long-term liabilities 16,051 17,276
--------- ---------
Total long-term liabilities 58,781 61,729
--------- ---------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Share capital - ordinary shares of
NIS 0.2 par value 1,824 1,821
Additional paid in capital 862,618 862,390
Accumulated other comprehensive income (loss) (738) 2,106
Accumulated deficit (635,855) (636,093)
--------- ---------
Total shareholders' equity 227,849 230,224
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 388,617 410,639
------------------------------------------ ========= =========
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except per share data)
Three months ended
March 31,
--------------------
2009 2008
--------- ---------
Unaudited Unaudited
--------- ---------
Revenues 60,826 70,533
Cost of revenues 42,872 45,257
--------- ---------
Gross profit 17,954 25,276
--------- ---------
Research and development expenses:
Expenses incurred 4,009 4,299
Less - grants 235 39
--------- ---------
3,774 4,260
--------- ---------
Selling and marketing, general and
administrative expenses 14,130 17,063
--------- ---------
Operating income 50 3,953
--------- ---------
Financial income, net 341 812
Expenses related to aborted merger transaction -- (722)
Other income 199 1,182
--------- ---------
Income before taxes on income 590 5,225
--------- ---------
Taxes on income 352 635
--------- ---------
Net income 238 4,590
========= =========
Basic net earnings per share 0.01 0.12
========= =========
Diluted net earnings per share 0.01 0.11
========= =========
Weighted average number of shares used in
computing net earnings per share
Basic 40,071 39,703
========= =========
Diluted 41,206 42,207
========= =========
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
March 31,
--------------------
2009 2008
--------- ---------
Unaudited Unaudited
--------- ---------
GAAP operating income 50 3,953
Non-cash stock option expenses (1) 228 209
--------- ---------
Non-GAAP operating income 278 4,162
--------- ---------
GAAP net income 238 4,590
Non-cash stock option expenses (1) 228 209
--------- ---------
Non-GAAP net income 466 4,799
--------- ---------
GAAP Earnings per share (diluted) 0.01 0.11
Non-cash stock option expenses (1) -- --
--------- ---------
Non-GAAP Earnings per share (diluted) 0.01 0.11
--------- ---------
(1)
Non-cash stock option expenses:
Cost of Revenues 40 9
Research and development 19 --
Selling, general, marketing and
administrative 169 200
--------- ---------
228 209
========= =========
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
US dollars in thousands
Three months ended
March 31,
--------- ---------
2009 2008
--------- ---------
Unaudited Unaudited
--------- ---------
Cash flows from operating activities:
Net income 238 4,590
Adjustments required to reconcile net income
to net cash used in operating activities:
Depreciation and amortization 3,455 3,131
Gain from the sale of an investment accounted
for at cost (199) --
Stock-based compensation related to employees 228 209
Accrued severance pay, net (293) 305
Accrued interest and exchange rate
differences on short and long-term
restricted cash, net 263 (451)
Accrued interest and exchange rate
differences on held-to-maturity marketable
securities, net 80 (788)
Exchange rate differences on long-term loans (285) 524
Exchange rate differences on loans to
employees 5 16
Capital loss from disposal of property
and equipment 5 19
Deferred income taxes 34 66
Decrease (increase) in trade receivables, net 1,518 (7,097)
Decrease (increase) in other assets
(including short-term, long-term and
deferred charges) 8,109 (6,798)
Decrease in inventories 1,276 4,343
Increase (decrease) in trade payables (6,686) 1,943
Decrease in accrued expenses (1,707) (858)
Increase (decrease) in advances from
customer, held by trustees, net (2,898) 452
Decrease in other accounts payable and other
long term liabilities (8,717) (6,730)
--------- ---------
Net cash used in operating activities (5,574) (7,124)
--------- ---------
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
US dollars in thousands
Three months ended
March 31,
--------- ---------
2009 2008
--------- ---------
Unaudited Unaudited
--------- ---------
Cash flows from investing activities:
-------------------------------------
Purchase of property and equipment (792) (1,542)
Proceeds from sale of an investment accounted
for at cost 199 --
Other investments -- (195)
Purchase of held to maturity marketable
securities (60,812) (23,906)
Proceeds from held to maturity marketable
securities 59,283 18,662
Proceeds from sale of property and equipment -- 401
Loans to employees, net (3) 2,758
Proceeds from restricted cash held by trustees 2,637 --
Investment in restricted cash (including
long-term) (50) (597)
Proceeds from restricted cash (including
long-term) 197 94
--------- ---------
Net cash provided by (used in) investing
activities 659 (4,325)
--------- ---------
Cash flows from financing activities:
-------------------------------------
Exercise of stock options 3 1,066
Short-term bank credit, net -- (322)
Repayment of long-term loans (81) (101)
--------- ---------
Net cash provided by (used in) financing
activities (78) 643
--------- ---------
Effect of exchange rate changes on cash and
cash equivalents 15 84
--------- ---------
Decrease in cash and cash equivalents (4,978) (10,722)
Cash and cash equivalents at the beginning of
the period 73,916 122,807
--------- ---------
Cash and cash equivalents at the end of
the period 68,938 112,085
========= =========
GILAT SATELLITE NETWORKS LTD.
CONDENSED EBITDA
US dollars in thousands
Three months ended
March 31,
--------- ---------
2009 2008
--------- ---------
Unaudited Unaudited
--------- ---------
Operating income 50 3,953
Add:
Non-cash stock option expenses 228 209
Deprecation and amortization 3,455 3,131
--------- ---------
EBITDA 3,733 7,293
========= =========