zk1007952.htm
 
FORM 6 – K
 
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report on Foreign Issuer

Pursuant to Rule 13a – 16 or 15d – 16
of the Securities Exchange Act of 1934
 
For the Month of February 2010

Gilat Satellite Networks Ltd
(Translation of Registrant’s Name into English)
 
Gilat House, Yegia Kapayim Street
Daniv Park, Kiryat Arye, Petah Tikva, Israel
(Address of Principal Corporate Offices)
 
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
 
Form 20-F x   Form 40-F o
 
Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
 
Yes o   No x
 
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):   N/A

 
Attached hereto is Registrant’s press release dated February 16, 2010, announcing Registrant’s financial results for the quarter ending December 31, 2010.
 
This report on Form 6-K is being incorporated by reference into the Registration Statement on Form F-3 (Registration No. 333-160683) and the Registration Statements on Form S-8 (Registration Nos. 333- 158476, 333-96630, 333-132649, 333-123410, 333-113932, 333-08826, 333-10092, 333-12466 and 333-12988).
 
Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
Gilat Satellite Networks Ltd.
  
 
(Registrant)
  
     
Dated February 22, 2010
By: /s/ Rachel Prishkolnik
  
 
        Rachel Prishkolnik
  
 
        Corporate Secretary
  
 
 
Gilat Announces Results for the Fourth Quarter and Year Ended December 31, 2009

Petah Tikva, Israel, February 16, 2010 –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 $56.6million, 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 Telefónica 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 inPetah Tikva, Israel. The Company has 16 sales and service offices worldwide. Gilat markets a full line of high-performance VSATs under the SkyEdge™ and SkyEdge II Product Family.

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.
 
####

Investor Relations Contact:
Tom Watts
Watts Capital Partners, LLC
Tel: +1 (212) 879 0954
twatts@wattscapital.com
 
 
GILAT SATELLITE NETWORKS LTD.
        
CONDENSED CONSOLIDATED BALANCE SHEET
        
US dollars in thousands
        
 
   
December 31,
    
December 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
          
US dollars in thousands
          
 
   
December 31,
    
December 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
                  
US 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 asstes 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
                  
US 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 )
                                 
Increas (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
                  
US 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 exepnses
     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