Gilat Announces Results for the Fourth Quarter and Year Ended
December 31, 2009
GlobeNewswire
2010-02-16
PETAH TIKVA, Israel, Feb. 16, 2010 (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 and year ended December 31, 2009.
Revenues for the fourth quarter of 2009 were $56.6 million, compared to
$66.1 million for the same period in 2008. Net income for the fourth
quarter of 2009 was $0.3 million or $0.01 per diluted share, compared
to a net loss of $6.5 million or $0.16 per diluted share in the fourth
quarter of 2008.
Revenues for the twelve month period ended December 31, 2009 were
$228.1 million, compared to $267.5 million in the comparable period of
2008. Net income for the twelve month period ended December 31, 2009
was $1.9 million or $0.04 per diluted share, compared to a net loss of
$1.1 million or $0.03 per diluted share, in the same period of 2008.
Gilat's Chief Executive Officer and Chairman of the Board Amiram
Levinberg said, "While 2009 was characterized by a lower level of
revenues, we were able to offset the reduction by implementing expense
cuts which helped us improve profitability. Strong bookings in the
fourth quarter enabled us to finish the year with a healthy backlog. We
look at 2010 with cautious optimism: Our strong product line will
support us in strengthening our market position. In addition, we are
making inroads in important new markets and in 2010 we have budget
expenditures for our entry into the government defense market which we
believe will allow us to achieve growth in future years."
Recent Announcements:
-- Costa Rica's national telecommunications operator, Instituto
Costarricense de Electricidad (ICE) will provide broadband services to
approximately 1,000 new sites through Gilat's VSAT platforms. This
includes an expansion of ICE's SkyEdge network as part of its Universal
Service Obligation, in addition to a new SkyEdge II network to serve
the country's corporate sector.
-- The Ministry of Communications in Colombia extended and amended the
agreements for the provision of services under the Rural Communitarian
Telephony (Compartel II) and Telecentros projects for an additional
one-year term, through December 2010.
-- Gilat's SkyEdge II DVB-RCS VSAT has received the SatLabs Group
Certificate of Compliance. Gilat is the first vendor to receive the
latest version 1.3 certification, which comprises an enhanced feature
set, including DVB-S2 at the forward channel, as well as advanced
Quality of Service for interactive prioritization of voice, video and
data.
-- Gilat's Spacenet Inc. subsidiary has been selected to provide its
Prysm Pro network appliance, which enables a fully PCI compliant
managed network services solution, to over 7,000 Regis Corporation
North American locations.
-- Gilat was chosen by STL Ghana to provide a SkyEdge II broadband
satellite network that will serve its customers throughout West Africa.
The network, comprising two SkyEdge II hub stations and close to 1,000
VSATs, will be used to serve the complex networking requirements of
West African enterprises, health care organizations and financial
services firms.
-- Gilat is providing a SkyEdge II broadband satellite communications
network covering more than 3,500 rural sites nationwide to Telefonica
del Peru. The new network is part of a Universal Service Obligation to
deliver broadband Internet services to remote areas of Peru.
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 (888) 668-9141 and international participants should dial in at
(972) 3-918-0609. The 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, February 16, 2010 until February 18, 2010 at 12:00 PM.
To listen to the replay, U.S. participants should call (888) 269-0005
and international participants should call (972) 3-925-5921. 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
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.
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 twelve
months ending December 31, 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
U.S. dollars in thousands
December December
31, 31,
--------- --------
2009 2008
--------- --------
Unaudited
---------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 122,672 73,916
Short-term bank deposits and
held-to-maturity marketable
securities 31,729 63,033
Short-term restricted cash 1,782 8,581
Restricted cash held by
trustees 2,137 24,169
Trade receivables, net 45,597 59,038
Inventories 13,711 20,719
Other current assets 19,068 22,036
--------- --------
Total current assets 236,696 271,492
--------- --------
LONG-TERM INVESTMENTS AND
RECEIVABLES:
Long-term restricted cash 4,896 5,692
Severance pay fund 9,912 11,085
Long-term trade receivables,
receivables in respect of
capital
leases and other receivables 2,204 8,937
--------- --------
Total long-term investments
and receivables 17,012 25,714
--------- --------
PROPERTY AND EQUIPMENT, NET 100,532 109,369
--------- --------
INTANGIBLE ASSETS AND DEFERRED
CHARGES, NET 2,988 4,064
--------- --------
TOTAL ASSETS 357,228 410,639
------------------------------- ========= ========
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED BALANCE
SHEET
U.S. dollars in thousands
December December
31, 31,
---------- ----------
2009 2008
---------- ----------
Unaudited
----------
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES:
Short-term bank credit -- 6,500
Current maturities of long-term
loans and convertible notes 5,220 4,346
Trade payables 16,838 23,317
Accrued expenses 20,067 25,761
Short-term advances from
customer, held by trustees 2,137 24,169
Other current liabilities 28,154 34,593
---------- ----------
Total current liabilities 72,416 118,686
---------- ----------
LONG-TERM LIABILITIES:
Accrued severance pay 10,011 12,297
Long-term loans, net 9,830 14,003
Accrued interest related to
restructured debt 1,176 1,838
Convertible subordinated notes 15,220 16,315
Other long-term liabilities 16,280 17,276
---------- ----------
Total long-term liabilities 52,517 61,729
---------- ----------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Share capital - ordinary shares
of NIS 0.2 par value 1,832 1,821
Additional paid in capital 863,337 862,390
Accumulated other comprehensive
income 1,341 2,106
Accumulated deficit (634,215) (636,093)
---------- ----------
Total shareholders' equity 232,295 230,224
---------- ----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 357,228 410,639
-------------------------------- ========== ==========
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
U.S. dollars in thousands (except per
share data)
Year ended Three months ended
December 31, December 31,
------------------- --------------------
2009 2008 2009 2008
--------- -------- --------- ---------
Unaudited Unaudited Unaudited
--------- --------- ---------
Revenues 228,059 267,526 56,590 66,101
Cost of revenues 157,628 181,574 37,788 45,817
--------- -------- --------- ---------
Gross profit 70,431 85,952 18,802 20,284
--------- -------- --------- ---------
Research and development expenses:
Expenses incurred 16,281 18,702 4,016 5,409
Less - grants 2,311 1,760 591 380
--------- -------- --------- ---------
13,970 16,942 3,425 5,029
--------- -------- --------- ---------
Selling, marketing, general and
administrative expenses 57,125 65,602 15,216 17,032
Impairment of long lived assets and
other charges -- 5,020 -- 5,020
--------- -------- --------- ---------
Operating income (loss) (664) (1,612) 161 (6,797)
--------- -------- --------- ---------
Financial income (expenses), net 1,050 1,300 391 (961)
Expenses related to aborted merger
transaction -- (2,350) -- (378)
Other income 2,396 2,983 -- 1,801
--------- -------- --------- ---------
Income (loss) before taxes on income 2,782 321 552 (6,335)
--------- -------- --------- ---------
Taxes on income 904 1,445 203 123
--------- -------- --------- ---------
Net income (loss) 1,878 (1,124) 349 (6,458)
========= ======== ========= =========
Basic net earnings (loss) per share 0.05 (0.03) 0.01 (0.16)
========= ======== ========= =========
Diluted net earnings (loss) per share 0.04 (0.03) 0.01 (0.16)
========= ======== ========= =========
Weighted average number of shares used
in
computing net earnings (loss) per
share
Basic 40,159 39,901 40,245 40,049
========= ======== ========= =========
Diluted 41,474 39,901 41,664 40,049
========= ======== ========= =========
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,
-------------------- --------------------
2009 2008 2009 2008
--------- --------- --------- ---------
Unaudited Unaudited Unaudited Unaudited
--------- --------- --------- ---------
GAAP operating income (loss) (664) (1,612) 161 (6,797)
Impairment of long lived assets and other charges -- 5,020 -- 5,020
Non-cash stock-based compensation expenses (1) 937 692 263 174
--------- --------- --------- ---------
Non-GAAP operating income (loss) 273 4,100 424 (1,603)
--------- --------- --------- ---------
GAAP net income (loss) 1,878 (1,124) 349 (6,458)
Impairment of long lived assets and other charges -- 5,020 -- 5,020
Non-cash stock-based compensation expenses (1) 937 692 263 174
--------- --------- --------- ---------
Non-GAAP net income (loss) 2,815 4,588 612 (1,264)
--------- --------- --------- ---------
GAAP Earnings (loss) per share (diluted) 0.04 (0.03) 0.01 (0.16)
Impairment of long lived assets and other charges -- 0.12 -- 0.13
Non-cash stock-based compensation expenses (1) 0.02 0.02 0.00 0.00
--------- --------- --------- ---------
Non-GAAP Earnings (loss) per share (diluted) 0.06 0.11 0.01 (0.03)
--------- --------- --------- ---------
(1) Non-cash stock-based compensation expenses:
Cost of Revenues 173 51 53 30
Research and development 80 9 24 8
Selling, general, marketing and administrative 684 632 186 136
--------- --------- --------- ---------
937 692 263 174
========= ========= ========= =========
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Year ended Three months ended
December 31, December 31,
-------------------- --------------------
2009 2008 2009 2008
--------- --------- --------- ---------
Unaudited Unaudited Unaudited
--------- --------- ---------
Cash flows from operating activities:
----------------------------------------------------
Net income (loss) 1,878 (1,124) 349 (6,458)
Adjustments required to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Depreciation and amortization 14,509 13,132 3,645 3,507
Impairment of long lived assets and other charges -- 5,020 -- 5,020
Gain from redemption of convertible notes (78) -- (56) --
Gain from the sale of an investment accounted for at
cost (2,597) -- -- --
Stock-based compensation related to employees 937 692 263 174
Accrued severance pay, net (1,113) 1,324 (298) 936
Accrued interest and exchange rate differences on
short and long-term restricted cash, net 256 (189) 103 15
Accrued interest and exchange rate differences on
held-to-maturity marketable securities and short
term bank deposits, net (349) (1,778) (17) (1)
Exchange rate differences on long-term loans 212 (348) (108) (314)
Exchange rate differences on loans to employees (5) 28 (1) 7
Capital loss from disposal of property and equipment 163 89 26 38
Deferred income taxes 992 (265) 669 (45)
Decrease (increase) in trade receivables, net 14,294 (15,979) 1,206 (4,351)
Decrease (increase) in other assets (including
short-term, long-term and deferred charges) 6,530 (4,336) (860) (2,196)
Decrease in inventories 8,995 36 1,676 1,128
Increase (decrease) in trade payables (6,855) (3,185) 4,542 4,478
Increase (decrease) in accrued expenses (6,034) 3,640 (3,549) (364)
Increase (decrease) in advances from customer, held
by trustees, net (22,032) 176 (3,274) (28)
Increase (decrease) in other accounts payable and
other long term liabilities (9,909) (16,553) 1,530 (1,558)
--------- --------- --------- ---------
Net cash provided by (used in) operating activities (206) (19,620) 5,846 (12)
--------- --------- --------- ---------
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Year ended Three months ended
December 31, December 31,
---------------------- --------------------
2009 2008 2009 2008
---------- ---------- --------- ---------
Unaudited Unaudited Unaudited
---------- --------- ---------
Cash flows from investing activities:
---------------------------------------------------
Purchase of property and equipment (4,485) (13,799) (1,544) (5,071)
Proceeds from sale of an investment accounted for
at cost 2,597 1,801 -- 1,801
Other investments -- (195) -- --
Purchase of held-to-maturity marketable securities
and deposits (130,961) (143,572) (31,691) (43,197)
Proceeds from held-to-maturity marketable
securities and deposits 162,615 127,895 25,193 9,767
Proceeds from sale of property and equipment -- 426 -- --
Loans to employees, net 39 2,798 4 6
Investment in restricted cash held by trustees (3,056) -- (3,056) --
Proceeds from restricted cash held by trustees 24,834 -- 6,225 --
Investment in restricted cash (including long-term) (90) (1,630) (3) (1,028)
Proceeds from restricted cash (including long-term) 7,696 769 6,667 598
---------- ---------- --------- ---------
Net cash provided by (used in) investing activities 59,189 (25,507) 1,795 (37,124)
---------- ---------- --------- ---------
Cash flows from financing activities:
---------------------------------------------------
Early redemption of convertible notes (170) -- (125) --
Exercise of stock options and restricted stock
units 11 2,516 2 --
Short-term bank credit, net (6,500) 678 (6,500) 1,000
Repayment of long-term loans (4,350) (5,362) (91) (1,084)
---------- ---------- --------- ---------
Net cash used in financing activities (11,009) (2,168) (6,714) (84)
---------- ---------- --------- ---------
Effect of exchange rate changes on cash and cash
equivalents 782 (1,596) 50 (1,162)
---------- ---------- --------- ---------
Increase (decrease) in cash and cash equivalents 48,756 (48,891) 977 (38,382)
Cash and cash equivalents at the beginning of the
period 73,916 122,807 121,695 112,298
---------- ---------- --------- ---------
Cash and cash equivalents at the end of the period 122,672 73,916 122,672 73,916
========== ========== ========= =========
GILAT SATELLITE NETWORKS LTD.
CONDENSED EBITDA
U.S. dollars in thousands
Year ended Three months ended
December 31, December 31,
-------------------- --------------------
2009 2008 2009 2008
--------- --------- --------- ---------
Unaudited Unaudited Unaudited Unaudited
--------- --------- --------- ---------
Operating income (loss) (664) (1,612) 161 (6,797)
Add:
Non-cash stock-based compensation
expenses 937 692 263 174
Deprecation and amortization 14,509 13,132 3,645 3,507
Impairment of long lived assets
and other charges -- 5,020 -- 5,020
--------- --------- --------- ---------
EBITDA 14,782 17,232 4,069 1,904
========= ========= ========= =========
CONTACT: Watts Capital Partners, LLC
Investor Relations Contact:
Tom Watts
+1 (212) 879 0954
twatts@wattscapital.com
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