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 November, 2016
 
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  ☒  Form 40-F ☐
 
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 ☐  No  ☒
 
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 November 15, 2016, announcing Gilat’s Third Quarter 2016 results.


We consent to the incorporation by reference of the GAAP financial information included herein, in the Registration Statements on Form F-3 (Registration No. 333-195680) and the Registration Statements on Form S-8 (Registration Nos.  333-113932, 333-123410, 333-132649, 333-158476, 333-180552, 333-187021, 333-204867 and 333-210820).
 
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 November 15, 2016
By:
/s/ Yael Shofar  
    Yael Shofar  
   
General Counsel
 
       

2

Gilat Announces Third Quarter 2016 Results

Third Quarter revenues rise 16% over the previous quarter with
significantly improved operating profitability

Petah Tikva, Israel – November 15, 2016 – Gilat Satellite Networks Ltd. (NASDAQ, TASE: GILT), a worldwide leader in satellite networking technology, solutions and services, today reported its results for the third quarter ended September 30, 2016.

Key Financial Highlights:
·
Revenues for Q3 2016 increased 95% to $78.6 million from $40.3 million in the comparable period of 2015. Revenues rose 16% compared with Q2 2016.
·
The Company noted that operating profitability significantly improved in Q3 2016:
o
On a GAAP basis, the operating loss decreased to $0.2 million compared to an operating loss of $29.1 million in Q3 2015, and an operating loss of $2.5 million in Q2 2016.
o
Non-GAAP operating profit increased to $3.3 million in the third quarter of 2016 compared to an operating loss of $5.5 million in Q3 2015 and a $0.5 million operating profit in Q2 2016.
·
On a GAAP basis, the loss for Q3 2016 decreased to $2.2 million compared to a loss of $32.4 million in Q3 2015 and a loss of $3.7 million in Q2 2016.
·
On a non-GAAP basis, net income for Q3 2016 increased to $1.4 million compared to a loss of $8.6 million in Q3 2015 and a loss of $0.6 million in Q2 2016.
·
Adjusted EBITDA for Q3 2016 increased to $5.2 million from an Adjusted EBITDA loss of $3.1 million in Q3 2015 and Adjusted EBITDA of $2.4 million in Q2 2016.
·
Management objectives for 2016: revenues between $290 to $310 million and Adjusted EBITDA of between $18 to $24 million. In 2015, revenues totaled $197.5 million and Adjusted EBITDA was $6.1million.
 
The Company noted that the significant improvement in profitability during the third quarter was achieved despite an accrual for bad debt of approximately $4.6 million attributable to the Company's governmental customer in Venezuela arising from the worsening economic situation and the recent credit downgrade in that country.

3

“Two major growth engines are especially exciting for Gilat this quarter,” said Yona Ovadia, CEO of Gilat. “Satellite-based 4G cellular backhaul and mobility, both in In-Flight Connectivity (IFC) and on-the-move connectivity for trains.  We have made important progress in both markets. Especially noteworthy are our recent announcements of the LTE cellular backhaul with Sprint and the broadband connectivity for Spain’s Renfe high speed trains:

-
Sprint is our first such deal in the U.S. and the third with a tier-1 telecom, representing a major endorsement of our technology, which makes satellite connectivity competitive with terrestrial solutions, even in metro edge and other urban areas.

-
Gilat’s On-the-Move antenna was chosen to enable Internet broadband connectivity to passengers on Renfe’s high-speed trains throughout Spain. This represents another major milestone for us in the mobility for trains market, where Gilat is the established leader.

"On the technology side, Gilat is committed to continued innovation in support of our strategy of broadband-for-all. This quarter Gilat announced the first-to-market all-outdoor, easy-to-install VSAT-in-a-Box for high speed consumer broadband, that addresses the consumer broadband market, as well as our ground-breaking small-cell-over-satellite solution that expands 3G and 4G cellular coverage to rural areas.

"We are focused on all five of our strategic growth pillars, as well as our journey to improve profitability, and we are pleased to see progress in both,” concluded Yona Ovadia, CEO of Gilat.

Key Recent Announcements:
·
Gilat’s Satellite On-the-Move Antenna Selected to Deliver Broadband Connectivity for Spain’s High-Speed Trains
·
Gilat First to Deliver Layer 2 with GTP Acceleration to Provide True LTE Speeds over Satellite for Large-Scale Networks
·
Gilat Satellite Networks Joins Telecom Infra Project, Founded by Facebook, Deutsche Telekom, SK Telecom and Others
·
Gilat Unveils Revolutionary Small-Cell-Over-Satellite Solution for 3G and 4G Coverage
·
Gilat’s Satellite-based Cellular Backhaul Solution Selected by Sprint to Extend LTE Services to Metro Edge and Rural Areas in the US
·
Gilat First to Market with a Complete VSAT-in-a-Box for High-Speed Consumer Broadband
·
Optus Selects Gilat’s Cellular Solution to Extend 3G Coverage to Rural Areas in Australia
·
Intelsat General Reports Unprecedented Performance Using Gilat’s Small Airborne Flat-Panel Antenna
 
Conference Call and Webcast Details:
Gilat management will host a conference call today, November 15, at 14:30 GMT / 09:30 AM EST / 16:30 IST to discuss the third quarter 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 (1) 888-668-9141.

4

A simultaneous Webcast of the conference call will be available on the Gilat website at www.gilat.com and through this link: http://www.veidan-stream.com/?con=Gilat_Satellite_Networks_Q3_2016_Results

The webcast will also be archived for a period of 30 days on the Company’s website and through the link above.
 
Conference Call Replay
A replay of the conference call will be available beginning approximately 17:00 GMT/ 12:00 PM EST/ 19:00 IST today, until 17:00 GMT/ 12:00 PM EST/ 19:00 IST on November 17, 2016.

International participants are invited to access the replay of the call at (972)3-925-5904, and US-based participants are invited to access the call by dialing (1)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.
 
Non-GAAP Measures

The attached summary unaudited financial statements were prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP). To supplement the consolidated financial statements presented in accordance with GAAP, the Company presents Non-GAAP presentations of net income, operating income, Adjusted EBITDA and earnings per share. The adjustments to the company’s GAAP results are made with the intent of providing both management and investors a more complete understanding of the company’s underlying operational results, trends and performance. Gilat is presenting Adjusted EBITDA (operating income before depreciation, amortization, non-cash stock option expenses and other costs related to acquisition transactions, restructuring cost, goodwill impairment and trade secrets litigation expenses) for the first time due to a significant increase in litigation expense relating to an ongoing trade secrets litigation in the U.S. against former employees, which commenced in 2015. Adjusted EBITDA excludes the abovementioned litigation expense of $2.0 million in Q3 2016 and $0.3 million in Q3 2015 and $1.4 million in Q2 2016.

Adjusted EBITDA is presented to compare the company’s performance to that of prior periods and evaluate the company’s financial and operating results on a consistent basis from period to period. The company also believes this measure, when viewed in combination with the company’s financial results prepared in accordance with GAAP, provides useful information to investors to evaluate ongoing operating results and trends. Adjusted EBITDA, however, should not be considered as an alternative to operating income or net income for the period and may not be indicative of the historic operating results of the Company; nor is it meant to be predictive of potential future results. Adjusted 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. Reconciliation between the Company's Operating income and Adjusted EBITDA is presented in the attached summary financial statements.

Non-GAAP presentations of net income, operating income, Adjusted EBITDA and earnings per share should not be considered in isolation or as a substitute for any of the consolidated statements of operations prepared in accordance with GAAP, or as an indication of Gilat’s operating performance or liquidity.
 
5

About Gilat
Gilat Satellite Networks Ltd (NASDAQ, 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 Peru and Colombia.

With over 25 years of experience, and over a million products shipped to more than 90 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. Gilat controlling shareholders are the FIMI Private Equity Funds. 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. We undertake no obligation to update or revise any forward-looking statements for any reason. 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.

Contact:
Gilat Satellite Networks
Doreet Oren
DoreetO@gilat.com

Comm-Partners LLC
June Filingeri, President
203-972-0186
junefil@optonline.net
 
6


GILAT SATELLITE NETWORKS LTD.
               
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
             
U.S. dollars in thousands (except share and per share data)
               
 
   
Nine months ended
   
Three months ended
 
   
September 30,
   
September 30,
 
   
2016
   
2015
   
2016
   
2015
 
   
Unaudited
   
Unaudited
   
Unaudited
   
Unaudited
 
                         
Revenues
 
$
199,206
   
$
129,861
   
$
78,643
   
$
40,347
 
Cost of revenues
   
147,914
     
96,137
     
54,930
     
30,865
 
Gross profit
   
51,292
     
33,724
     
23,713
     
9,482
 
                                 
Research and development expenses
   
19,374
     
19,243
     
6,781
     
6,115
 
Less - grants
   
1,008
     
563
     
370
     
151
 
Research and development, net
   
18,366
     
18,680
     
6,411
     
5,964
 
Selling and marketing expenses
   
17,224
     
18,725
     
6,248
     
6,050
 
General and administrative expenses
   
21,435
     
15,226
     
11,283
     
5,164
 
Restructuring Costs
   
-
     
986
     
-
     
986
 
Goodwill Impairment
   
-
     
20,402
     
-
     
20,402
 
Total operating expenses
   
57,025
     
74,019
     
23,942
     
38,566
 
Operating loss
   
(5,733
)
   
(40,295
)
   
(229
)
   
(29,084
)
Financial expenses, net
   
(3,175
)
   
(5,850
)
   
(1,572
)
   
(2,940
)
Loss before taxes
   
(8,908
)
   
(46,145
)
   
(1,801
)
   
(32,024
)
Taxes on income
   
967
     
740
     
398
     
173
 
Loss from continuing operations
   
(9,875
)
   
(46,885
)
   
(2,199
)
   
(32,197
)
Loss from discontinued operations
   
-
     
(200
)
   
-
     
(200
)
Loss
 
$
(9,875
)
 
$
(47,085
)
 
$
(2,199
)
 
$
(32,397
)
                                 
Loss per share from continuing operations (basic and diluted)
   
(0.19
)
   
(1.08
)
   
(0.04
)
   
(0.73
)
Loss per share from discontinued operations (basic and diluted)
   
-
     
(0.00
)
   
-
     
(0.00
)
Loss per share (basic and diluted)
 
$
(0.19
)
 
$
(1.08
)
 
$
(0.04
)
 
$
(0.73
)
                                 
Weighted average number of shares used in
                               
computing loss per share (basic and diluted)
   
51,096,829
     
43,436,470
     
54,523,585
     
44,030,805
 
 
 
7

 
GILAT SATELLITE NETWORKS LTD.
     
RECONCILIATION BETWEEN GAAP AND NON-GAAP STATEMENTS OF OPERATIONS
     
FOR COMPARATIVE PURPOSES
U.S. dollars in thousands (except share and per share data) 
             
 
    
Three months ended
   
Three months ended
 
    
September 30, 2016
   
September 30, 2015
 
   
GAAP
   
Adjustments (1)
   
Non-GAAP
   
GAAP
   
Adjustments (1)
   
Non-GAAP
 
    
Unaudited
   
Unaudited
   
Unaudited
   
Unaudited
   
Unaudited
   
Unaudited
 
                                     
Gross profit
 
$
23,713
     
1,204
   
$
24,917
   
$
9,482
     
1,278
   
$
10,760
 
Operating expenses
   
23,942
     
(2,357
)
   
21,585
     
38,566
     
(22,319
)
   
16,247
 
Operating income (loss)
   
(229
)
   
3,561
     
3,332
     
(29,084
)
   
23,597
     
(5,487
)
Income (loss) before taxes on income
   
(1,801
)
   
3,561
     
1,760
     
(32,024
)
   
23,597
     
(8,427
)
Net income (loss) from continuing operations
   
(2,199
)
   
3,561
     
1,362
     
(32,197
)
   
23,597
     
(8,600
)
Loss from discontinued operations
   
-
     
-
     
-
     
(200
)
   
200
     
-
 
Net income (loss)
   
(2,199
)
   
3,561
     
1,362
     
(32,397
)
   
23,797
     
(8,600
)
                                                 
Net income (loss) per share from continuing operations (basic and diluted)
   
(0.04
)
   
0.06
     
0.02
     
(0.73
)
   
0.53
     
(0.20
)
Net income (loss) per share from discontinued operations (basic and diluted)
   
-
     
-
     
-
     
(0.00
)
   
(0.00
)
   
-
 
Net income (loss) per share (basic and diluted)
 
$
(0.04
)
   
0.06
   
$
0.02
   
$
(0.73
)
   
0.53
   
$
(0.20
)
                                                 
Weighted average number of shares used in
                                               
   computing income (loss) per share (basic and diluted)
                                               
Basic
   
54,523,585
             
54,523,585
     
44,030,805
             
44,030,805
 
Diluted
   
54,523,585
             
54,614,252
     
44,030,805
             
44,030,805
 
 
(1)
Adjustments reflect the effect of non-cash stock-based compensation as per ASC 718, amortization of intangible assets related to shares acquisition transactions, goodwill impairment, trade secrets litigation expenses, restructuring costs and loss from discontinued operations.
 
         
Three months ended
               
Three months ended
       
         
September 30, 2016
               
September 30, 2015
       
         
Unaudited
               
Unaudited
       
                                     
GAAP loss
   
 
   
$
(2,199
)
         
 
   
$
(32,397
)
   
 
 
Gross profit:
   
 
             
 
     
 
             
 
 
Non-cash stock-based compensation expenses
   
 
     
9
     
 
     
 
     
59
     
 
 
Amortization of intangible assets related to acquisition transactions
   
 
     
1,195
     
 
     
 
     
1,219
     
 
 
     
 
     
1,204
     
 
     
 
     
1,278
     
 
 
Operating expenses:
   
 
             
 
     
 
             
 
 
Non-cash stock-based compensation expenses
   
 
     
180
     
 
     
 
     
443
     
 
 
Amortization of intangible assets related to acquisition transactions
   
 
     
194
     
 
     
 
     
190
     
 
 
Goodwill impairment
   
 
     
-
     
 
     
 
     
20,402
       
Trade secrets litigation expenses
   
 
     
1,983
     
 
     
 
     
298
     
 
 
Restructuring costs
   
 
     
-
     
 
     
 
     
986
     
 
 
Loss from discontinued operations
   
 
     
-
     
 
     
 
     
200
     
 
 
     
 
     
2,357
     
 
     
 
     
22,519
     
 
 
     
 
             
 
     
 
               
Non GAAP net income (loss)
   
 
   
$
1,362
     
 
     
 
   
$
(8,600
)
     
 
 
8

 
GILAT SATELLITE NETWORKS LTD.
                           
RECONCILIATION BETWEEN GAAP AND NON-GAAP STATEMENTS OF OPERATIONS
               
FOR COMPARATIVE PURPOSES
                           
U.S. dollars in thousands (except share and per share data)
                     
 
   
Nine months ended
   
Nine months ended
 
   
September 30, 2016
   
September 30, 2015
 
   
GAAP
   
Adjustments (1)
   
Non-GAAP
   
GAAP
   
Adjustments (1)
   
Non-GAAP
 
   
Unaudited
   
Unaudited
   
Unaudited
   
Unaudited
   
Unaudited
   
Unaudited
 
                                     
Gross profit
 
$
51,292
     
3,614
   
$
54,906
   
$
33,724
     
3,759
   
$
37,483
 
Operating expenses
   
57,025
     
(4,826
)
   
52,199
     
74,019
     
(24,211
)
   
49,808
 
Operating income (loss)
   
(5,733
)
   
8,440
     
2,707
     
(40,295
)
   
27,970
     
(12,325
)
Loss before taxes on income
   
(8,908
)
   
8,440
     
(468
)
   
(46,145
)
   
27,970
     
(18,175
)
Loss from continuing operations
   
(9,875
)
   
8,440
     
(1,435
)
   
(46,885
)
   
27,970
     
(18,915
)
Loss from discontinued operations
   
-
     
-
     
-
     
(200
)
   
200
     
-
 
Loss
   
(9,875
)
   
8,440
     
(1,435
)
   
(47,085
)
   
28,170
     
(18,915
)
                                                 
Loss per share from continuing operations (basic and diluted)
   
(0.19
)
   
0.16
     
(0.03
)
   
(1.08
)
   
0.64
     
(0.44
)
Loss per share from discontinued operations (basic and diluted)
   
-
     
-
     
-
     
(0.00
)
   
(0.00
)
   
-
 
Loss per share (basic and diluted)
 
$
(0.19
)
   
0.16
   
$
(0.03
)
 
$
(1.08
)
   
0.64
   
$
(0.44
)
                                                 
Weighted average number of shares used in
                                               
   computing loss per share (basic and diluted)
   
51,096,829
             
51,096,829
     
43,436,470
             
43,436,470
 
 
(1)
Adjustments reflect the effect of non-cash stock-based compensation as per ASC 718, amortization of intangible assets related to shares acquisition transactions, goodwill impairment, trade secrets litigation expenses, restructuring costs and loss from discontinued operations.
 
         
Nine months ended
               
Nine months ended
       
         
September 30, 2016
               
September 30, 2015
       
         
Unaudited
               
Unaudited
       
                                     
GAAP loss
   
 
   
$
(9,875
)
   
 
     
 
   
$
(47,085
)
   
 
 
Gross profit:
   
 
             
 
     
 
             
 
 
Non-cash stock-based compensation expenses
   
 
     
32
     
 
     
 
     
165
     
 
 
Amortization of intangible assets related to acquisition transactions
   
 
     
3,582
     
 
     
 
     
3,594
     
 
 
     
 
     
3,614
     
 
     
 
     
3,759
     
 
 
Operating expenses:
   
 
             
 
     
 
             
 
 
Non-cash stock-based compensation expenses
   
 
     
660
     
 
     
 
     
1,500
     
 
 
Amortization of intangible assets related to acquisition transactions
   
 
     
583
     
 
     
 
     
615
     
 
 
Goodwill impairment
   
 
     
-
     
 
     
 
     
20,402
     
 
 
Trade secrets litigation expenses
   
 
     
3,583
     
 
     
 
     
708
     
 
 
Restructuring costs
   
 
     
-
     
 
     
 
     
986
     
 
 
Loss from discontinued operations
   
 
     
-
     
 
     
 
     
200
     
 
 
     
 
     
4,826
     
 
     
 
     
24,411
     
 
 
     
 
             
 
     
 
             
 
 
Non GAAP loss
   
 
   
$
(1,435
)
   
 
     
 
   
$
(18,915
)
   
 
 
 
 
 
9

 
GILAT SATELLITE NETWORKS LTD.
           
CONDENSED EBITDA
               
U.S. dollars in thousands
               
 
   
Nine months ended
   
Three months ended
 
   
September 30,
   
September 30,
 
   
2016
   
2015
   
2016
   
2015
 
   
Unaudited
   
Unaudited
   
Unaudited
   
Unaudited
 
                         
GAAP operating loss
 
$
(5,733
)
 
$
(40,295
)
 
$
(229
)
 
$
(29,084
)
Add:
                               
Non-cash stock-based compensation expenses
   
692
     
1,665
     
189
     
502
 
Restructuring costs
   
-
     
986
     
-
     
986
 
Goodwill impairment
   
-
     
20,402
     
-
     
20,402
 
Trade secrets litigation expenses
   
3,583
     
708
     
1,983
     
298
 
Depreciation and amortization
   
9,831
     
11,459
     
3,306
     
3,760
 
Adjusted EBITDA
 
$
8,373
   
$
(5,075
)
 
$
5,249
   
$
(3,136
)
 
 
10

 
GILAT SATELLITE NETWORKS LTD.
       
CONDENSED CONSOLIDATED BALANCE SHEETS
       
U.S. dollars in thousands
       
 
             
   
September 30,
   
December 31,
 
   
2016
   
2015
 
   
Unaudited
   
Audited
 
             
ASSETS
           
             
CURRENT ASSETS:
           
Cash and cash equivalents
 
$
53,439
   
$
18,435
 
Restricted cash
   
65,537
     
100,779
 
Restricted cash held by trustees
   
6,970
     
8,524
 
Trade receivables, net
   
41,955
     
50,984
 
Inventories
   
23,064
     
25,358
 
Other current assets
   
14,390
     
16,223
 
Total current assets
   
205,355
     
220,303
 
                 
LONG-TERM INVESTMENTS AND RECEIVABLES:
               
Long-term restricted cash
   
202
     
179
 
Severance pay funds
   
7,925
     
7,545
 
Other long term receivables
   
224
     
221
 
Total long-term investments and receivables
   
8,351
     
7,945
 
                 
PROPERTY AND EQUIPMENT, NET
   
80,748
     
81,963
 
                 
INTANGIBLE ASSETS, NET
   
12,825
     
17,154
 
                 
GOODWILL
   
43,468
     
43,468
 
                 
TOTAL ASSETS
 
$
350,747
   
$
370,833
 
 
11

GILAT SATELLITE NETWORKS LTD.
       
CONDENSED CONSOLIDATED BALANCE SHEETS
       
U.S. dollars in thousands
       
 
   
September 30,
   
December 31,
 
   
2016
   
2015
 
   
Unaudited
   
Audited
 
             
LIABILITIES AND EQUITY
           
             
CURRENT LIABILITIES:
           
Short-term bank credit and loans
 
$
-
   
$
7,000
 
Current maturities of long-term loans
   
4,562
     
4,542
 
Trade payables
   
21,044
     
17,210
 
Accrued expenses
   
49,680
     
23,481
 
Advances from customers
   
16,192
     
82,813
 
Advances from customers held by trustees
   
6,871
     
8,515
 
Other current liabilities
   
19,074
     
16,213
 
Total current liabilities
   
117,423
     
159,774
 
                 
LONG-TERM LIABILITIES:
               
Accrued severance pay
   
7,684
     
7,506
 
Long-term loans, net of current maturities
   
17,112
     
21,493
 
Other long-term liabilities
   
2,840
     
3,978
 
Total long-term liabilities
   
27,636
     
32,977
 
                 
EQUITY:
               
Share capital - ordinary shares of NIS 0.2 par value
   
2,592
     
2,048
 
Additional paid-in capital
   
919,893
     
884,126
 
Accumulated other comprehensive loss
   
(2,557
)
   
(3,727
)
Accumulated deficit
   
(714,240
)
   
(704,365
)
Total equity
   
205,688
     
178,082
 
                 
TOTAL LIABILITIES AND EQUITY
 
$
350,747
   
$
370,833
 
 
 
12

GILAT SATELLITE NETWORKS LTD.
                 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
             
U.S. dollars in thousands
                 
 
                         
   
Nine months ended
   
Three months ended
 
   
September 30,
   
September 30,
 
   
2016
   
2015
   
2016
   
2015
 
   
Unaudited
   
Unaudited
   
Unaudited
   
Unaudited
 
Cash Flows from continuing operations
                       
Cash Flows from Operating Activities:
                       
Loss
 
$
(9,875
)
 
$
(47,085
)
 
$
(2,199
)
 
$
(32,397
)
Loss from discontinued operations
   
-
     
(200
)
   
-
     
(200
)
Loss from continuing operations
   
(9,875
)
   
(46,885
)
   
(2,199
)
   
(32,197
)
Adjustments required to reconcile loss
                               
to cash provided by (used in) operating activities:
                               
Depreciation and amortization
   
9,831
     
11,459
     
3,306
     
3,760
 
Goodwill impairment
   
-
     
20,402
     
-
     
20,402
 
Stock-based compensation
   
692
     
1,665
     
189
     
502
 
Accrued severance pay, net
   
(202
)
   
(274
)
   
(105
)
   
(4
)
Accrued interest and exchange rate differences on
                               
   short and long-term restricted cash, net
   
(1,454
)
   
207
     
106
     
120
 
Exchange rate differences on long-term loans
   
56
     
(221
)
   
8
     
5
 
Deferred income taxes
   
5
     
11
     
5
     
49
 
Decrease in trade receivables, net
   
10,109
     
16,730
     
6,115
     
10,395
 
Decrease in other assets (including short-term, long-term
                               
   and deferred charges)
   
1,119
     
983
     
2,191
     
919
 
Decrease (increase) in inventories
   
865
     
(4,911
)
   
3,324
     
(2,094
)
Decrease (increase) in restricted cash directly related to operating activities
   
28,482
     
(52,736
)
   
6,908
     
1,582
 
Increase (decrease) in trade payables
   
3,847
     
(7,647
)
   
655
     
(2,346
)
Increase (decrease) in accrued expenses
   
26,014
     
(509
)
   
11,531
     
1,251
 
Increase (decrease) in advance from customers
   
(66,642
)
   
55,616
     
(30,357
)
   
(1,716
)
Increase (decrease) in advances from customers, held
                               
   by trustees
   
(1,028
)
   
(8,411
)
   
984
     
(4,253
)
Increase (decrease) in other current liabilities and other long term liabilities
   
1,630
     
(406
)
   
933
     
(2,148
)
Cash provided by (used in) Operating Activities
   
3,449
     
(14,927
)
   
3,594
     
(5,773
)
                                 
Cash Flows from Investing Activities:
                               
Purchase of property and equipment
   
(2,822
)
   
(3,109
)
   
(790
)
   
(1,270
)
Investment in restricted cash held by trustees
   
(10,925
)
   
(6,109
)
   
(5,497
)
   
-
 
Proceeds from restricted cash held by trustees
   
13,473
     
18,649
     
5,315
     
3,997
 
Investment in restricted cash (including long-term)
   
(204
)
   
(22,411
)
   
(18
)
   
(1,209
)
Proceeds from restricted cash (including long-term)
   
7,441
     
32,559
     
15
     
4,283
 
Cash provided by (used in) Investing Activities
   
6,963
     
19,579
     
(975
)
   
5,801
 
                                 
Cash Flows from Financing Activities:
                               
Capital lease payments
   
(307
)
   
(408
)
   
-
     
(204
)
Issuance of shares in a rights offering
   
35,095
     
-
     
-
     
-
 
Issuance of restricted stock units and exercise of stock options
   
527
     
5,595
     
181
     
1,890
 
Payment of obligation related to the purchase of intangible assets
   
-
     
(500
)
   
-
     
(500
)
Short term bank credit, net
   
(7,000
)
   
(3,811
)
   
-
     
1,758
 
Repayment of long-term loans
   
(4,416
)
   
(4,409
)
   
(139
)
   
(137
)
Cash provided by (used in) Financing Activities
   
23,899
     
(3,533
)
   
42
     
2,807
 
                                 
Effect of exchange rate changes on cash and cash equivalents
   
693
     
(1,122
)
   
18
     
(708
)
                                 
Increase (decrease) in cash and cash equivalents
   
35,004
     
(3
)
   
2,679
     
2,127
 
                                 
Cash and cash equivalents at the beginning of the period
   
18,435
     
27,726
     
50,760
     
25,596
 
                                 
Cash and cash equivalents at the end of the period
 
$
53,439
   
$
27,723
   
$
53,439
   
$
27,723
 
 
 
13