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Gilat Announces Results for the Third Quarter, 2009(GlobeNewswire Via Acquire Media NewsEdge) PETAH TIKVA, Israel, Nov. 16, 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 third quarter ending September 30, 2009. Revenues for the third quarter of 2009 were $54.6 million, compared to $65.3 million for the same period in 2008. Net income for the third quarter of 2009 was $2.5 million, or $0.06 per diluted share, compared to a net loss $0.5 million, or $0.01 per diluted share, for the third quarter of 2008. Revenues for the nine month period ended September 30, 2009 were $171.5 million, compared to $201.4 million for the comparable period of 2008. Net income for the nine month period ended September 30, 2009 was $1.5 million or $0.04 per diluted share, compared to $5.3 million or $0.13 per diluted share, for the same period of 2008. Gilat's Chief Executive Officer and Chairman of the Board, Amiram Levinberg, said, "This quarter, our financial results continued to show stability and we continued to increase our cash position by maintaining our cost control measures. We are pleased to announce today that Ms. Susan Miller has joined Spacenet as CEO of Spacenet Integrated Government Solutions (SIGS). SIGS will focus on expanding our reach to new customers including the Department of Defense, Homeland Security, the Intelligence community and government related agencies. Ms. Miller brings to us over 20 years of industry experience and previously served as President and Chairman of the Board for Intelsat General Corporation where she grew its business from $80 million to just under $300 million in annual revenue during her tenure. I am confident that Ms. Miller's vast experience will contribute significantly to Spacenet's expansion to this growing market." Recent Announcements -- A government defense agency in Asia has awarded Gilat a multi-million dollar contract to deliver a turnkey broadband communications solution. Gilat's turnkey solution will integrate a variety of technology platforms and will include its SkyEdge II high performance platform, enabling the delivery of high-speed data, video and voice applications to serve the different units within the organization. -- Kazakhtelecom JSC, (KT), Kazakhstan's largest telecommunications operator, has added Gilat's cellular backhaul solution to its satellite communications network. Gilat integrated its SkyAbis cellular backhaul solution with Huawei's native IP 3G base stations to enable KT's expansion of communications services to regions where it was not economically feasible before. -- Cable & Wireless Panama, Panama's largest telecommunications operator, chose Gilat to provide a SkyEdge II high-performance network that will be used to deliver broadband Internet to hundreds of schools in remote areas nationwide. -- Gilat announced the successful deployment of a broadband satellite Internet service for passengers of Kazakhstan Temir Zholy, the national railway company of Kazakhstan. Transtelecom, a government-owned telco established to meet the railway's communications needs, selected Gilat as the satellite equipment provider for this pioneering deployment. -- China Unicom is deploying Gilat's SkyAbis cellular backhaul solution to enhance GSM mobile connectivity in China's Xinjiang region. Remote areas of the Xinjiang region are now able to receive high-quality mobile voice and data services similar to those offered in other developed regions in China. -- Telespazio Brasil, one of Brazil's largest satellite service providers, chose Gilat to provide a 1,200-site SkyEdge II broadband satellite communications network. The network will be used by Sicredi Bank for both primary enterprise networking connectivity as well as back-up. Conference Call & Webcast Gilat will host a conference call today at 9:30 AM Eastern Time. In order to ensure audio access, participants from the U.S. should dial in at (866) 860-9642 and international participants should dial in at (972) 3-918-0644. The live presentation may also be accessed via Webcast through the Company's website at www.gilat.com prior to the call. A replay of the call will be available beginning at approximately 12:00 PM Eastern Time, November 16, 2009 until November 18, 2009 at 12:00 PM. To listen to the replay, U.S. participants should call (888) 269-0005 and international participants should call (972) 3-925-5927. The call will also be available for replay as a Webcast on the Company's website at www.gilat.com and will be archived for 30 days. About Gilat Satellite Networks Ltd. Gilat Satellite Networks Ltd. 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 //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. 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 three and nine months ending September 30, 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 and non cash stock option expenses as per SFAS 123(R) ('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. GILAT SATELLITE NETWORKS LTD. CONDENSED CONSOLIDATED BALANCE SHEET US dollars in thousands Sept. 30, Dec. 31, --------- --------- 2009 2008 --------- --------- Unaudited Audited --------- --------- ASSETS CURRENT ASSETS: Cash and cash equivalents 121,695 73,916 Short-term bank deposits and held-to-maturity marketable securities 25,212 63,033 Short-term restricted cash 8,444 8,581 Restricted cash held by trustees 5,411 24,169 Trade receivables, net 46,754 59,038 Inventories 14,959 20,719 Other current assets 19,827 22,036 --------- --------- Total current assets 242,302 271,492 --------- --------- LONG-TERM INVESTMENTS AND RECEIVABLES: Long-term restricted cash 4,895 5,692 Severance pay fund 10,874 11,085 Long-term trade receivables, receivables in respect of capital leases and other receivables 2,354 8,937 --------- --------- Total long-term investments and receivables 18,123 25,714 --------- --------- PROPERTY AND EQUIPMENT, NET 102,189 109,369 --------- --------- INTANGIBLE ASSETS AND DEFERRED CHARGES, NET 3,256 4,064 --------- --------- TOTAL ASSETS 365,870 410,639 ========= ========= GILAT SATELLITE NETWORKS LTD. CONDENSED CONSOLIDATED BALANCE SHEET US dollars in thousands Sept. 30, 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 and convertible notes 4,806 4,346 Trade payables 12,293 23,317 Accrued expenses 23,286 25,761 Short-term advances from customer, held by trustees 5,411 24,169 Other current liabilities 25,567 34,593 --------- --------- Total current liabilities 77,863 118,686 --------- --------- LONG-TERM LIABILITIES: Accrued severance pay 11,271 12,297 Long-term loans, net 10,028 14,003 Accrued interest related to restructured debt 1,505 1,838 Convertible subordinated notes 15,817 16,315 Other long-term liabilities 17,149 17,276 --------- --------- Total long-term liabilities 55,770 61,729 --------- --------- COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY: Share capital - ordinary shares of NIS 0.2 par value 1,829 1,821 Additional paid in capital 863,074 862,390 Accumulated other comprehensive income 1,898 2,106 Accumulated deficit (634,564) (636,093) --------- --------- Total shareholders' equity 232,237 230,224 --------- --------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 365,870 410,639 ------------------------------------------ ========= ========= GILAT SATELLITE NETWORKS LTD. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS U.S. dollars in thousands (except per share data) Nine months ended Three months ended September 30, September 30, -------------------- -------------------- 2009 2008 2009 2008 --------- --------- --------- --------- Unaudited Unaudited Unaudited Unaudited --------- --------- --------- --------- Revenues 171,469 201,425 54,640 65,295 Cost of revenues 119,840 135,757 37,989 45,917 --------- --------- --------- --------- Gross profit 51,629 65,668 16,651 19,378 --------- --------- --------- --------- Research and development expenses: Expenses incurred 12,265 13,293 4,170 4,359 Less - grants 1,720 1,380 535 604 --------- --------- --------- --------- 10,545 11,913 3,635 3,755 --------- --------- --------- --------- Selling, marketing, general and administrative expenses 41,909 48,570 13,399 15,133 --------- --------- --------- --------- Operating income (loss) (825) 5,185 (383) 490 --------- --------- --------- --------- Financial income, net 659 2,261 886 577 Expenses related to aborted merger transaction -- (1,972) -- (1,039) Other income 2,396 1,182 2,197 -- --------- --------- --------- --------- Income before taxes on income 2,230 6,656 2,700 28 --------- --------- --------- --------- Taxes on income 701 1,322 206 574 --------- --------- --------- --------- Net income (loss) 1,529 5,334 2,494 (546) ========= ========= ========= ========= Basic net earnings (loss) per share 0.04 0.13 0.06 (0.01) ========= ========= ========= ========= Diluted net earnings (loss) per share 0.04 0.13 0.06 (0.01) ========= ========= ========= ========= Weighted average number of shares used in computing net earnings (loss) per share Basic 40,131 39,852 40,189 39,989 ========= ========= ========= ========= Diluted 41,410 42,229 41,615 39,989 ========= ========= ========= ========= 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) Nine months ended Three months ended September 30, September 30, -------------------- -------------------- 2009 2008 2009 2008 --------- --------- --------- --------- Unaudited Unaudited Unaudited Unaudited --------- --------- --------- --------- GAAP operating income (loss) (825) 5,185 (383) 490 Non-cash stock-based compensation expenses (1) 674 518 225 138 --------- --------- --------- --------- Non-GAAP operating income (loss) (151) 5,703 (158) 628 --------- --------- --------- --------- GAAP net income (loss) 1,529 5,334 2,494 (546) Non-cash stock-based compensation expenses (1) 674 518 225 138 --------- --------- --------- --------- Non-GAAP net income (loss) 2,203 5,852 2,719 (408) --------- --------- --------- --------- GAAP Earnings (loss) per share (diluted) 0.04 0.13 0.06 (0.01) Non-cash stock-based compensation expenses (1) 0.01 0.01 0.00 0.00 --------- --------- --------- --------- Non-GAAP Earnings (loss) per share (diluted) 0.05 0.14 0.06 (0.01) --------- --------- --------- --------- (1) Non-cash stock-based compensation expenses: Cost of Revenues 120 21 43 7 Research and development 56 1 19 -- Selling, general, marketing and administrative 498 496 163 131 --------- --------- --------- --------- 674 518 225 138 ========= ========= ========= ========= GILAT SATELLITE NETWORKS LTD. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS US dollars in thousands Nine months ended Three months ended September 30, September 30, -------------------- -------------------- 2009 2008 2009 2008 --------- --------- --------- --------- Unaudited Unaudited Unaudited Unaudited --------- --------- --------- --------- Cash flows from operating activities: Net income (loss) 1,529 5,334 2,494 (546) Adjustments required to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 10,864 9,625 3,605 3,333 Gain from redemption of convertible notes (22) -- -- -- Gain from the sale of an investment accounted for at cost (2,597) -- (2,398) -- Stock-based compensation related to employees 674 518 225 138 Accrued severance pay, net (815) 388 (321) 172 Accrued interest and exchange rate differences on short and long-term restricted cash, net 153 (204) (2) 292 Accrued interest and exchange rate differences on held-to- maturity marketable securities, net (332) (1,777) (55) (142) Exchange rate differences on long-term loans 320 (34) 239 (538) Exchange rate differences on loans to employees (4) 21 (4) 1 Capital loss from disposal of property and equipment 137 51 73 -- Deferred income taxes 323 (220) 108 6 Decrease (increase) in trade receivables, net 13,088 (11,628) 4,253 2,407 Decrease (increase) in other assets (including short-term, long-term and deferred charges) 7,390 (2,140) 308 2,078 Decrease (increase) in inventories 7,319 (1,092) 1,167 163 Increase (decrease) in trade payables (11,397) (7,663) 2,266 (8,847) Increase (decrease) in accrued expenses (2,485) 4,004 874 4,600 Increase (decrease) in advances from customer, held by trustees, net (18,758) 204 (7,795) (292) Decrease in other accounts payable and other long term liabilities (11,439) (14,995) (4,524) (1,453) --------- --------- --------- --------- Net cash provided by (used in) operating activities (6,052) (19,608) 513 1,372 --------- --------- --------- --------- GILAT SATELLITE NETWORKS LTD. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS US dollars in thousands Nine months ended Three months ended September 30, September 30, -------------------- -------------------- 2009 2008 2009 2008 --------- --------- --------- --------- Unaudited Unaudited Unaudited Unaudited --------- --------- --------- --------- Cash flows from investing activities: Purchase of property and equipment (2,941) (8,728) (1,068) (4,403) Proceeds from sale of an investment accounted for at cost 2,597 -- 2,398 -- Other investments -- (195) -- -- Purchase of held to maturity marketable securities and deposits (99,270) (100,375) (25,193) (19,816) Proceeds from held to maturity marketable securities and deposits 137,422 118,128 64,210 87,056 Proceeds from sale of property and equipment -- 426 -- -- Loans to employees, net 35 2,792 23 14 Proceeds from restricted cash held by trustees 18,609 -- 7,761 -- Investment in restricted cash (including long-term) (87) (602) -- (5) Proceeds from restricted cash (including long-term) 1,029 171 31 -- --------- --------- --------- --------- Net cash provided by investing activities 57,394 11,617 48,162 62,846 --------- --------- --------- --------- Cash flows from financing activities: Early redemption of convertible notes (45) -- -- -- Exercise of stock options 9 2,516 3 651 Short-term bank credit, net -- (322) -- -- Repayment of long-term loans (4,259) (4,278) (4,092) (4,086) --------- --------- --------- --------- Net cash used in financing activities (4,295) (2,084) (4,089) (3,435) --------- --------- --------- --------- Effect of exchange rate changes on cash and cash equivalents 732 (434) 229 (1,177) --------- --------- --------- --------- Increase (decrease) in cash and cash equivalents 47,779 (10,509) 44,815 59,606 Cash and cash equivalents at the beginning of the period 73,916 122,807 76,880 52,692 --------- --------- --------- --------- Cash and cash equivalents at the end of the period 121,695 112,298 121,695 112,298 ========= ========= ========= ========= GILAT SATELLITE NETWORKS LTD. CONDENSED EBITDA US dollars in thousands Nine months ended Three months ended September 30, September 30, -------------------- -------------------- 2009 2008 2009 2008 --------- --------- --------- --------- Unaudited Unaudited Unaudited Unaudited --------- --------- --------- --------- Operating income (loss) (825) 5,185 (383) 490 Add: Non-cash stock-based compensation expenses 674 518 225 138 Deprecation and amortization 10,864 9,625 3,605 3,333 --------- --------- --------- --------- EBITDA 10,713 15,328 3,447 3,961 ========= ========= ========= ========= CONTACT: Watts Capital Partners, LLC Investor Relations Contact: Tom Watts +1 (212) 879 0954 [email protected] 2009 GlobeNewswire, Inc. |