×

Gilat Announces Second Quarter 2013 Results

Gilat Satellite Networks Logo

- EBITDA Up 6% to $5.4 Million as Compared to Q1 2013

- Non-GAAP Operating Income Increased 20% as Compared to Q1 2013

PETAH TIKVA, Israel, Aug. 14, 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 second quarter ended June 30, 2013.

Key Financial Highlights:

  • Non-GAAP operating income increased by 20% to $1.3 million compared to $1.0 million in the first quarter of 2013
  • EBITDA increased to $5.4 million, up 6% compared to $5.1 million in the first quarter of 2013

Revenues for the second quarter of 2013 were $80.2 million, compared to $82.8 million in the first quarter of 2013 and $85.3 million in the second quarter of 2012.

On a non-GAAP basis, operating income for the second quarter of 2013 was $1.3 million compared to an operating income of $1.0 million in the first quarter of 2013 and $4.8 million in the second quarter of 2012. Net loss for the period on a non-GAAP basis was $1.9 million, or $0.05 per diluted share, compared to net loss of $0.3 million, or $0.01 per diluted share, in the first quarter of 2013 and a net income of $3.2 million, or $0.07 per diluted share in the second quarter of 2012.

EBITDA for the second quarter of 2013 reached $5.4 million, representing a margin of 6.8%, compared with $5.1 million in the first quarter of 2013 and $8.6 million in the second quarter of 2012.

"We were able to gain traction across our businesses this quarter, particularly in our Commercial Division, which was highlighted by new client wins, continued execution on existing projects and a significant partnership agreement with THAICOM," commented Erez Antebi, Gilat's Chief Executive Officer. "In our Defense Division, though we felt the effects this quarter of the budget cuts and purchasing slowdowns in the United States, we believe strongly in our long term prospects and the strategic nature of the programs of record that we are targeting."

"Looking forward to the second half of 2013 and beyond, we continue to focus on our long-term strategic plan providing products and solutions to enable broadband internet access via high throughput satellite networks and on-the-move applications. We strongly believe these growth engines will provide a solid base for our company in the years to come," added Antebi.

Key Recent Announcements:

  • Gilat's Spacenet Introduces Enhanced Wi-Fi Solutions Suite;
  • RESCUE Consortium Demonstrates Technologies for First Responders;
  • THAICOM and Gilat Satellite Networks Announce Partnership Agreement;
  • Gilat Awarded $6.75M Contract Extension to Continue the Provision of Internet Connectivity Services to Schools in Colombia;
  • Gilat's SkyEdge II HUB and VSATs to Deliver Education to Around 2,500 Schools in Southeast Asia;
  • Gilat Satellite Networks Wins 'VSAT Provider of the Year Award' at SatCom Africa 2013;
  • Gilat Satellite Networks to Introduce Enhanced Forward and Return Channel Technology in SkyEdge II-c for Increased Performance.

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) 3-918-0609, and US-based participants are invited to access the call by dialing (888) 668-9141. 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 16, 2013. International participants are invited to access the replay at (972) 3-925-5927 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
June 30, December 31,
2013 2012
Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 65,841 66,968
Short-term restricted cash 2,316 3,794
Restricted cash held by trustees 2,827 1,664
Trade receivables, net 62,929 60,991
Inventories 29,384 24,973
Other current assets 21,353 29,140
Total current assets 184,650 187,530
LONG-TERM INVESTMENTS AND RECEIVABLES:
Long-term restricted cash 1,184 1,151
Severance pay fund 9,562 9,703
Long-term trade receivables, receivables in respect of capital leases and other receivables 20,268 19,781
Total long-term investments and receivables 31,014 30,635
PROPERTY AND EQUIPMENT, NET 92,139 94,727
INTANGIBLE ASSETS, NET 32,772 35,991
GOODWILL 65,760 65,760
TOTAL ASSETS 406,335 414,643
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
US dollars in thousands
June 30, December 31,
2013 2012
Unaudited
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term bank credit 3,060 3,517
Current maturities of long-term loans 7,959 7,963
Trade payables 26,758 23,240
Accrued expenses 21,698 24,353
Short-term advances from customer, held by trustees 524 4,448
Other current liabilities 41,408 40,336
Total current liabilities 101,407 103,857
LONG-TERM LIABILITIES:
Accrued severance pay 9,436 9,513
Long-term loans, net 34,728 40,747
Other long-term liabilities 24,676 18,569
Total long-term liabilities 68,840 68,829
COMMITMENTS AND CONTINGENCIES
EQUITY:
Share capital - ordinary shares of NIS 0.2 par value 1,926 1,909
Additional paid in capital 871,540 869,822
Accumulated other comprehensive income 1,592 2,864
Accumulated deficit (638,970) (632,638)
Total equity 236,088 241,957
TOTAL LIABILITIES AND EQUITY 406,335 414,643
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
30 June 2013 30 June 2012

GAAP

Adjustments (1)
Non-GAAP
GAAP

Adjustments (1)
Non-GAAP
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
Revenues 80,206 -- 80,206 85,319 -- 85,319
Cost of revenues 56,084 (1,295) 54,789 57,890 (1,649) 56,241
Gross profit 24,122 1,295 25,417 27,429 1,649 29,078
30% 32% 32% 34%
Research and development expenses:
Expenses incurred 7,145 (112) 7,033 8,355 (75) 8,280
Less - grants 532 -- 532 1,227 -- 1,227
6,613 (112) 6,501 7,128 (75) 7,053
Selling and marketing expenses 9,827 (334) 9,493 9,597 (314) 9,283
General and administrative expenses 8,518 (347) 8,171 8,322 (344) 7,978
Operating income (loss) (836) 2,088 1,252 2,382 2,382 4,764
Financial expenses, net (2,515) -- (2,515) (1,557) -- (1,557)
Income (loss) before taxes on income (3,351) 2,088 (1,263) 825 2,382 3,207
Taxes on income (tax benefit) 625 -- 625 (25) -- (25)
Net income (loss) (3,976) 2,088 (1,888) 850 2,382 3,232
Basic net earnings (loss) per share (0.09) (0.05) 0.02 0.08
Diluted net earnings (loss) per share (0.09) (0.05) 0.02 0.07
Weighted average number of shares used in computing net earnings (loss) per share
Basic 41,932 41,932 41,347 41,347
Diluted 41,932 41,932 42,243 43,420
(1) Adjustments reflect the effect of non-cash stock options expenses as per SFAS123R and amortization of intangible assets related to acquisition transactions.
Three months ended Three months ended
30 June 2013 30 June 2012
Unaudited Unaudited
Non-cash stock-based compensation expenses:
Cost of revenues 46 76
Research and development 112 75
Selling and marketing 105 84
General and administrative 347 344
610 579
Amortization of intangible assets related to acquisition transactions:
Cost of revenues 1,249 1,573
Selling and marketing 229 230
1,478 1,803
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 2013 30 June 2012

GAAP

Adjustments (1)
Non-GAAP
GAAP

Adjustments (1)
Non-GAAP
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
Revenues 163,033 -- 163,033 161,926 -- 161,926
Cost of revenues 113,370 (2,583) 110,787 110,208 (3,287) 106,921
Gross profit 49,663 2,583 52,246 51,718 3,287 55,005
30% 32% 32% 34%
Research and development expenses:
Expenses incurred 14,776 (211) 14,565 16,575 (129) 16,446
Less - grants 864 -- 864 1,684 -- 1,684
13,912 (211) 13,701 14,891 (129) 14,762
Selling and marketing expenses 21,022 (654) 20,368 20,751 (628) 20,123
General and administrative expenses 16,561 (680) 15,881 16,274 (636) 15,638
Operating income (loss) (1,832) 4,128 2,296 (198) 4,680 4,482
Financial expenses, net (3,449) -- (3,449) (2,015) -- (2,015)
Income (loss) before taxes on income (5,281) 4,128 (1,153) (2,213) 4,680 2,467
Taxes on income (tax benefit) 1,051 -- 1,051 (2) -- (2)
Net income (loss) (6,332) 4,128 (2,204) (2,211) 4,680 2,469
Basic net earnings (loss) per share (0.15) (0.05) (0.05) 0.06
Diluted net earnings (loss) per share (0.15) (0.05) (0.05) 0.06
Weighted average number of shares used in computing net earnings (loss) per share
Basic 41,849 41,849 41,288 41,288
Diluted 41,849 41,849 41,288 43,129
(1) Adjustments reflect the effect of non-cash stock options expenses as per SFAS123R and amortization of intangible assets related to acquisition transactions.
Six months ended Six months ended
30 June 2013 30 June 2012
Unaudited Unaudited
Non-cash stock-based compensation expenses:
Cost of revenues 86 142
Research and development 211 129
Selling and marketing 196 169
General and administrative 680 636
1,173 1,076
Amortization of intangible assets related to acquisition transactions:
Cost of revenues 2,497 3,145
Selling and marketing 458 459
2,955 3,604
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,
2013 2012 2013 2012
Unaudited Unaudited Unaudited Unaudited
Revenues 163,033 161,926 80,206 85,319
Cost of revenues 113,370 110,208 56,084 57,890
Gross profit 49,663 51,718 24,122 27,429
Research and development expenses:
Expenses incurred 14,776 16,575 7,145 8,355
Less - grants 864 1,684 532 1,227
13,912 14,891 6,613 7,128
Selling and marketing expenses 21,022 20,751 9,827 9,597
General and administrative expenses 16,561 16,274 8,518 8,322
Operating income (loss) (1,832) (198) (836) 2,382
Financial expenses, net (3,449) (2,015) (2,515) (1,557)
Income (loss) before taxes on income (5,281) (2,213) (3,351) 825
Taxes on income (tax benefit) 1,051 (2) 625 (25)
Net income (loss) (6,332) (2,211) (3,976) 850
Basic net earnings (loss) per share (0.15) (0.05) (0.09) 0.02
Diluted net earnings (loss) per share (0.15) (0.05) (0.09) 0.02
Weighted average number of shares used in computing net earnings (loss) per share
Basic 41,849 41,288 41,932 41,347
Diluted 41,849 41,288 41,932 42,243
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
US dollars in thousands
Six months ended Three months ended
June 30, June 30,
2013 2012 2013 2012
Unaudited Unaudited Unaudited Unaudited
Cash flows from operating activities:
Net income (loss) (6,332) (2,211) (3,976) 850
Adjustments required to reconcile net income (loss) to net cash generated from (used in) operating activities:
Depreciation and amortization 11,208 10,698 5,648 5,660
Stock-based compensation 1,173 1,076 610 579
Accrued severance pay, net 64 311 50 410
Accrued interest and exchange rate differences on short and long-term restricted cash, net 392 (69) 353 178
Exchange rate differences on long-term loans (46) (124) 86 (284)
Capital loss from disposal of property and equipment 13 (3) 1 3
Deferred income taxes (45) (330) (29) (152)
Decrease (increase) in trade receivables, net (2,225) (7,114) (8,224) 811
Decrease (increase) in other assets (including short-term, long-term and deferred charges) 4,114 (5,428) 5,321 (5,698)
Decrease (increase) in inventories (5,464) (395) (1,640) 2,869
Increase in trade payables 3,537 5,409 2,740 7,595
Decrease in accrued expenses (2,655) (6,147) (2,042) (2,241)
Increase (decrease) in advances from customer, held by trustees, net (3,923) 5,002 306 (653)
Increase (decrease) in other accounts payable and other long term liabilities (5,683) (5,719) 269 (6,681)
Net cash generated from (used in) operating activities (5,872) (5,044) (527) 3,246
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
US dollars in thousands
Six months ended Three months ended
June 30, June 30,
2013 2012 2013 2012
Unaudited Unaudited Unaudited Unaudited
Cash flows from investing activities:
Purchase of property and equipment (2,231) (2,166) (1,100) (1,131)
Investment in restricted cash held by trustees (11,236) (17,620) (9,454) (4,382)
Proceeds from restricted cash held by trustees 9,771 9,075 6,364 5,016
Investment in restricted cash (including long-term) (18,000) (9,114) (9,297) (3,365)
Proceeds from restricted cash (including long-term) 19,339 14,624 11,526 6,496
Purchase of intangible assets (118) (72) (102) (63)
Net cash generated from (used in) investing activities (2,475) (5,273) (2,063) 2,571
Cash flows from financing activities:
Issuance of restricted stock units and exercise of stock options 562 12 9 6
Payment of obligation related to the purchase of intangible assets (500) -- (500) --
Proceeds from financing contract 14,472 -- -- --
Short-term bank credit, net (458) 1,201 (975) 1,618
Proceeds from long-term loans -- 10,000 -- 10,000
Repayment according to financing contract (654) -- (442) --
Repayment of long-term loans (5,975) (4,423) (988) (175)
Net cash generated from (used in) financing activities 7,447 6,790 (2,896) 11,449
Effect of exchange rate changes on cash and cash equivalents (227) (164) (190) (295)
Increase (decrease) in cash and cash equivalents (1,127) (3,691) (5,676) 16,971
Cash and cash equivalents at the beginning of the period 66,968 56,231 71,517 35,569
Cash and cash equivalents at the end of the period 65,841 52,540 65,841 52,540
GILAT SATELLITE NETWORKS LTD.
CONDENSED EBITDA
US dollars in thousands
Six months ended Three months ended
June 30, June 30,
2013 2012 2013 2012
Unaudited Unaudited Unaudited Unaudited
Operating income (loss) (1,832) (198) (836) 2,382
Add:
Non-cash stock-based compensation expenses 1,173 1,076 610 579
Depreciation and amortization 11,208 10,698 5,648 5,660
EBITDA 10,549 11,576 5,422 8,621

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.