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Gilat Announces First Quarter 2013 Results

Gilat Satellite Networks Logo

PETAH TIKVA, Israel, May 8, 2013 (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 first quarter ended March 31, 2013.

Key Financial Highlights:

  • Quarterly revenues of $82.8 million, up 8% compared to $76.6 million in the first quarter of 2012
  • EBITDA increased to $5.1 million, up 74% compared to $3.0 million in the first quarter of 2012
  • Total Cash increased by $3.3 million

Revenues for the first quarter of 2013 were $82.8 million, compared to $76.6 million for the same period in 2012.

On a non-GAAP basis, operating income for the first quarter of 2013 was $1.0 million compared to an operating loss of $0.3 million in the first quarter of 2012. Net loss for the period on a non-GAAP basis was $0.3 million, or $0.01 per diluted share, compared to net loss of $0.8 million, or $0.02 per diluted share, in the comparable period in 2012.

EBITDA for the first quarter of 2013 reached $5.1 million compared with $3.0 million in the comparable period in 2012, representing a margin of 6.2%.

"We are pleased with our results for the first quarter of 2013 as we achieved year-over-year improvement in revenue and EBITDA," said Erez Antebi, Chief Executive Officer of Gilat. "Our Commercial division continues to be a significant source of revenue as we executed well on existing projects while closing new deals.

In addition to securing various enterprise deals, in the area of broadband internet access we have continued our progress with implementation ahead of schedule at NBN Co. with over 30,000 CPEs installed, over 6,000 CPEs delivered in support of the SBBS service and a major win in our Services division with the Peruvian Ministry of Education to connect thousands of schools nationwide."

"In our Defense division, although Sequestration has limited our overall visibility," continued Antebi, "we continue to deliver on new and existing projects with defense and aviation system integrators. We are confident in our ability to increase service to international defense markets and believe this will offset to some degree, the uncertainty in the U.S."

Key Recent Announcements:

  • NordNet Deploys Gilat's SkyEdge II-c VSATs for High-end Broadband-Over-Satellite Service in France;
  • Gilat to Equip IDF with SatTrooper-1000 Military Manpack for Advanced Tactical Communications;
  • HISPASAT Expands Broadband Satellite-based Network With Additional SkyEdge II System from Gilat;
  • Gilat Peru Wins $12.8 Million Contract with Peruvian Ministry of Education to Connect Thousands of Schools Nationwide;
  • Gilat Launches the New Scalable SkyEdge II-c Platform For Ka and Ku-band Internet Access.

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) 3-918-0610, 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 May 10, 2013. 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) 782-4291. 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.

(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. Reconciliation between the Company's Operating income and EBITDA is presented in the attached summary financial statements.

About Gilat Satellite Networks Ltd.

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 the United States, 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
March 31, December 31,
2013 2012
Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 71,517 66,968
Short-term restricted cash 4,369 3,794
Restricted cash held by trustees 12 1,664
Trade receivables, net 55,086 60,991
Inventories 28,432 24,973
Other current assets 29,209 29,140
Total current assets 188,625 187,530
LONG-TERM INVESTMENTS AND RECEIVABLES:
Long-term restricted cash 1,457 1,151
Severance pay fund 9,671 9,703
Long-term trade receivables, receivables in respect of capital leases and other receivables 19,422 19,781
Total long-term investments and receivables 30,550 30,635
PROPERTY AND EQUIPMENT, NET 93,311 94,727
INTANGIBLE ASSETS, NET 34,343 35,991
GOODWILL 65,760 65,760
TOTAL ASSETS 412,589 414,643
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
US dollars in thousands
March 31, December 31,
2013 2012
Unaudited
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term bank credit 4,034 3,517
Current maturities of long-term loans 7,945 7,963
Trade payables 24,049 23,240
Accrued expenses 23,739 24,353
Short-term advances from customer, held by trustees 219 4,448
Other current liabilities 37,024 40,336
Total current liabilities 97,010 103,857
LONG-TERM LIABILITIES:
Accrued severance pay 9,495 9,513
Long-term loans, net 35,646 40,747
Other long-term liabilities 30,270 18,569
Total long-term liabilities 75,411 68,829
COMMITMENTS AND CONTINGENCIES
EQUITY:
Share capital - ordinary shares of NIS 0.2 par value 1,917 1,909
Additional paid in capital 870,929 869,822
Accumulated other comprehensive income 2,316 2,864
Accumulated deficit (634,994) (632,638)
Total equity 240,168 241,957
TOTAL LIABILITIES AND EQUITY 412,589 414,643
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
March 31, 2013 March 31, 2012
GAAP Adjustments (1) Non-GAAP GAAP Adjustments (1) Non-GAAP
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
Revenues 82,827 -- 82,827 76,607 -- 76,607
Cost of revenues 57,286 (1,288) 55,998 52,318 (1,638) 50,680
Gross profit 25,541 1,288 26,829 24,289 1,638 25,927
31% 32% 32% 34%
Research and development expenses:
Expenses incurred 7,631 (99) 7,532 8,220 (54) 8,166
Less - grants 332 -- 332 457 -- 457
7,299 (99) 7,200 7,763 (54) 7,709
Selling and marketing expenses 11,195 (320) 10,875 11,154 (314) 10,840
General and administrative expenses 8,043 (333) 7,710 7,952 (292) 7,660
Operating income (loss) (996) 2,040 1,044 (2,580) 2,298 (282)
Financial expenses, net (934) -- (934) (458) -- (458)
Income (loss) before taxes on income (1,930) 2,040 110 (3,038) 2,298 (740)
Taxes on income 426 -- 426 23 -- 23
Net loss (2,356) 2,040 (316) (3,061) 2,298 (763)
Basic net loss per share (0.06) (0.01) (0.07) (0.02)
Diluted net loss per share (0.06) (0.01) (0.07) (0.02)
Weighted average number of shares used in computing net loss per share:
Basic 41,766 41,766 41,230 41,230
Diluted 41,766 41,766 41,230 41,230
(1) Adjustments reflect the effect of non-cash stock based compensation as per ASC 718 and amortization of intangible assets related to acquisition transactions.
Three months ended Three months ended
March 31, 2013 March 31, 2012
Unaudited Unaudited
Non-cash stock-based compensation expenses:
Cost of Revenues 40 66
Research and development 99 54
Selling and marketing 91 85
General and administrative 333 292
563 497
Amortization of intangible assets related to acquisition transactions:
Cost of Revenues 1,248 1,572
Selling and marketing 229 229
1,477 1,801
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except per share data)
Three months ended
March 31,
2013 2012
Unaudited Unaudited
Revenues 82,827 76,607
Cost of revenues 57,286 52,318
Gross profit 25,541 24,289
Research and development expenses:
Expenses incurred 7,631 8,220
Less - grants 332 457
7,299 7,763
Selling and marketing expenses 11,195 11,154
General and administrative expenses 8,043 7,952
Operating loss (996) (2,580)
Financial expenses, net (934) (458)
Loss before taxes on income (1,930) (3,038)
Taxes on income 426 23
Net loss (2,356) (3,061)
Basic net loss per share (0.06) (0.07)
Diluted net loss per share (0.06) (0.07)
Weighted average number of shares used in computing net loss per share:
Basic 41,766 41,230
Diluted 41,766 41,230
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
US dollars in thousands
Three months ended
March 31,
2013 2012
Unaudited Unaudited
Cash flows from operating activities:
Net loss (2,356) (3,061)
Adjustments required to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 5,560 5,038
Stock-based compensation 563 497
Accrued severance pay, net 14 (99)
Accrued interest and exchange rate differences on short and long-term restricted cash, net 39 (247)
Exchange rate differences on long-term loans (132) 160
Capital loss (gain) from disposal of property and equipment 12 (6)
Deferred income taxes (16) (178)
Decrease (increase) in trade receivables, net 5,999 (7,925)
Decrease (increase) in other assets (including short-term, long-term and deferred charges) (1,207) 270
Increase in inventories (3,824) (3,264)
Increase (decrease) in trade payables 797 (2,186)
Decrease in accrued expenses (613) (3,906)
Increase (decrease) in advances from customer, held by trustees, net (4,229) 5,655
Increase (decrease) in other accounts payable and other long term liabilities (5,952) 962
Net cash used in operating activities (5,345) (8,290)
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
US dollars in thousands
Three months ended
March 31,
2013 2012
Unaudited Unaudited
Cash flows from investing activities:
Purchase of property and equipment (1,131) (1,035)
Investment in restricted cash held by trustees (1,782) (13,238)
Proceeds from restricted cash held by trustees 3,407 4,059
Investment in restricted cash (including long-term) (8,703) (5,749)
Proceeds from restricted cash (including long-term) 7,813 8,128
Purchase of intangible asset (16) (9)
Net cash used in investing activities (412) (7,844)
Cash flows from financing activities:
Issuance of restricted stock units and exercise of stock options 553 6
Proceeds from financing contract 14,472 --
Short-term bank credit, net 517 (417)
Repayment according to financing contract (212) --
Repayment of long-term loans (4,987) (4,248)
Net cash generated from (used in) financing activities 10,343 (4,659)
Effect of exchange rate changes on cash and cash equivalents (37) 131
Increase (decrease) in cash and cash equivalents 4,549 (20,662)
Cash and cash equivalents at the beginning of the period 66,968 56,231
Cash and cash equivalents at the end of the period 71,517 35,569
GILAT SATELLITE NETWORKS LTD.
CONDENSED EBITDA
US dollars in thousands
Three months ended
March 31,
2013 2012
Unaudited Unaudited
Operating loss (996) (2,580)
Add:
Non-cash stock-based compensation expenses 563 497
Depreciation and amortization 5,560 5,038
EBITDA 5,127 2,955

CONTACT: Phil Carlson / Josh Dver, KCSA pcarlson@kcsa.com / jdver@kcsa.com 1 (212) 896 1233 / 1239 David Leichner, Gilat Satellite Networks Ltd. davidle@gilat.com (972) 3 925 2321

Source:Gilat Satellite Networks Ltd.