Skip to main content

Gilat Announces Strong Q3 Results: Revenues Reached $71.5 Million; Net Income Totaled $5.9 Million

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, 2007.

Revenues for the third quarter of 2007 were $71.5 million, up from $63.8 million in the same period of 2006. Net income for the third quarter of 2007 was $5.9 million or $0.14 per diluted share, compared to a net income of $2.7 million or $0.11 per diluted share in the third quarter of 2006. Non-GAAP net income (1) for the third quarter of 2007 was $6.1 million, or $0.15 per diluted share, versus a net income of $3.5 million or $0.13 per diluted share in the same quarter of 2006.

Revenues for the nine month period ended September 30, 2007 were $209.9 million, up from $183.4 million in the comparable period of 2006. Net income for the nine month period ended September 30, 2007 was $16.3 million or $0.39 per diluted share, compared to a net income of $6 million or $0.25 per diluted share in the same period of 2006. Non-GAAP net income for the nine month period ended September 30, 2007 was $17.4 million, or $0.42 per diluted share, versus a net income of $9.2 million or $0.37 per diluted share in the comparable period of 2006.

Gilats Chief Executive Officer and Chairman of the Board Amiram Levinberg said, "During the third quarter we continued to experience strong growth in revenues and profits with revenues increasing by 12% year over year. The quarter was highlighted by enhanced activity in the government sector -- one of our major areas of focus."

"We just announced the availability of our new flagship product, SkyEdge II, an advanced VSAT platform based on next generation technology, with higher efficiencies and full adaptivity for both the inbound and outbound channels. Designed for diverse environments including enterprises, rural networks, cellular backhaul and government network applications, Gilat's SkyEdge II is an excellent solution for broadband IP networks with high-speed inbound requirements, providing inbound data rates of up to 4Mbps. We have already received first orders for SkyEdge II from leading service providers in Asia, Europe, Latin America and Africa."

Recent Announcements

  • The availability of SkyEdge II, an advanced VSAT platform based on next generation technology, with higher efficiencies and full adaptivity for both the inbound and outbound channels.
  • Spacenet Inc. expands its presence in the government market through contracts with new government customers and the recent award of a five-year GSA Schedule Contract.
  • North-West Telecom, one of Russia's largest telecommunications companies, is expanding its Gilat SkyEdge satellite network to bring telephony and broadband Internet services to a growing number of remote communities in North Western Russia.
  • Gilat is deploying a SkyEdge broadband satellite communications network for Russia's largest electric utility company, FSK. FSK will use the SkyEdge VSAT network for supervisory control and data acquisition (SCADA) and satellite telephony applications at an initial 650 locations nationwide
  • Gilat's business unit, Spacenet Rural Communications, contributed to Peru's disaster recovery efforts by deploying a SkyEdge VSAT network and offering free telephony services in the aftermath of the August 16th earthquake.
  • Gilat's wholly-owned subsidiary, Spacenet Inc., is working with Verizon Business to deploy a custom satellite network for the U.S. Postal Service. The satellite network will provide high performance broadband communications for over 5,000 Postal Service sites in the continental United States, Hawaii, Alaska and Puerto Rico.
  • Russia's leading satellite service provider, Closed Joint-Stock Company (CJSC) Global-Teleport, is deploying a broadband satellite communications network for the Russian Ministry of Education based on Gilat's SkyEdge systems.

Gilat will host a conference call today at 10:00 AM EST. In order to ensure audio access, participants from the U.S. should dial in at (888) 281-1167, and international participants should dial in at (972) 3-918-0650. The presentation may be accessed through the Companys website at www.gilat.com prior to the call. The call will also be available as a Webcast on the Companys website at: www.gilat.com and will be archived for 30 days.

About Gilat Satellite Networks Ltd.

Gilat Satellite Networks Ltd. (Nasdaq:GILT) is a leading provider of products and services for satellite-based communications networks. The Company operates under three business units: (i) Gilat Network Systems ("GNS"), which is a provider of network systems and associated professional services to service providers and operators worldwide; (ii) Spacenet Inc., which provides managed services in North America for businesses and governments through its Connexstar service brand and for consumers through its StarBand service brand; (iii) Spacenet Rural Communications, which offers rural telephony and Internet access solutions to remote areas primarily in Latin America.

Gilat was founded in 1987 and has shipped over 670,000 Very Small Aperture Terminals (VSATs) to more than 85 countries across six continents. Gilats headquarters is located in Petah Tikva, Israel. The Company has 16 sales and service offices worldwide. Gilat markets the SkyEdge Product Family which includes the SkyEdge Pro, SkyEdge IP, SkyEdge Call, SkyEdge DVB-RCS and SkyEdge Gateway. In addition, the Company markets numerous other legacy products.

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 Gilats products, inability to timely develop and introduce new technologies, products and applications, rapid changes in the market for Gilats 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 Companys proprietary technology and risks associated with Gilats international operations and its location in Israel. For additional information regarding these and other risks and uncertainties associated with Gilats business, reference is made to Gilats 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. GAAP. The attached summary financial statements for Q3 2007 are unaudited. To supplement the consolidated financial statements presented in accordance with GAAP, the Company presents Gilats net income, EBITDA and earnings per diluted share, before the share-based payment charge, which is the non-cash stock option expense as per SFAS 123 (R). This non-GAAP presentation of net income, EBITDA and earnings per share is provided to enhance the understanding of the Companys historical financial performance and comparability between periods.

(2) Operating income before depreciation, amortization, non cash stock option expenses as per SFAS 123(R) and exceptional items, ('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 Companys Operating income and EBIDTA is presented in the attached summary financial statements.

GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
US dollars in thousands
September 30,December 31,
20072006
Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 108,257 149,545
Short-term bank deposits and Held to maturity marketable securities 44,174 -
Short-term restricted cash 6,139 5,137
Restricted cash held by trustees 7,223 7,113
Trade receivables (net of allowance for doubtful accounts) 43,484 29,612
Inventories 20,630 26,368
Other current assets 33,302 40,428
Total current assets 263,209 258,203
LONG-TERM INVESTMENTS AND RECEIVABLES:
Long term Held to maturity marketable securities 5,145 -
Long-term restricted cash 7,467 6,337
Long-term restricted cash held by trustees 16,544 15,646
Severance pay fund 11,177 10,534

Long-term trade receivables, receivables in respect of capital leases and other receivables, net

12,996 19,241
53,329 51,758
PROPERTY AND EQUIPMENT, NET 114,297 121,366
INTANGIBLE ASSETS AND DEFERRED CHARGES, NET 7,118 8,887
TOTAL ASSETS 437,953 440,214
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
US dollars in thousands
September 30,December 31,
20072006
Unaudited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank credit 5,823 1,200
Current maturities of long-term loans 4,865 6,537
Trade payables 18,679 21,258
Accrued expenses 19,342 21,400
Short-term advances from customer held by trustees 15,437 15,045
Other accounts payable 66,609 72,129
Total current liabilities 130,755 137,569
LONG-TERM LIABILITIES:
Accrued severance pay 11,264 10,640
Long-term advances from customer held by trustees 8,330 16,863
Long-term loans, net 19,545 22,318
Accrued interest related to restructured debt 2,819 3,147
Convertible subordinated notes 16,315 16,333
Other long-term liabilities 16,817 21,285
Total long-term liabilities 75,090 90,586
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Share capital - Ordinary shares of NIS 0.2 par value 1,783 1,757
Additional paid in capital 857,542 853,350
Accumulated other comprehensive income 1,537 702
Accumulated deficit (628,754 ) (643,750 )
Total shareholders' equity 232,108 212,059
Total liabilities and shareholders' equity 437,953 440,214
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except per share data)
Nine months endedThree months ended
September 30,September 30,
2007200620072006
UnauditedUnauditedUnauditedUnaudited
Revenues 209,915 183,354 71,548 63,786
Cost of Revenues 134,279 117,118 45,750 41,281
Gross profit75,63666,23625,79822,505
Research and development expenses:
Expenses incurred 12,846 11,282 4,109 3,938
Less - grants 1,756 1,327 481 704
11,090 9,955 3,628 3,234
Selling and marketing, general and administrative expenses 51,554 47,103 17,372 15,614
Operating income12,9929,1784,7983,657
Financial income (expenses), net and other 3,858 (1,549 ) 1,136 57
Income before taxes on income16,8507,6295,9343,714
Taxes on income 545 1,622 81 1,006
Net income16,3056,0075,8532,708
Basic net earnings per share 0.42 0.26 0.15 0.12
Diluted net earnings per share 0.39 0.25 0.14 0.11
Shares used in net earnings per share computation
Basic39,02622,94039,22823,417
Diluted41,39824,44141,67225,382
GILAT SATELLITE NETWORKS LTD.
RECONCILIATION BETWEEN GAAP AND NON-GAAP STATEMENT OF INCOME
FOR COMPARATIVE PURPOSES
U.S. dollars in thousands (except per share data)
Nine months endedThree months ended
September 30,September 30,
2007200620072006
UnauditedUnauditedUnauditedUnaudited
GAAP operating income 12,992 9,178 4,798 3,657
Non-cash stock options expenses (1) 1,064 3,183 288 747
Non-GAAP operating income

14,056

12,361

5,086

4,404
GAAP net income 16,305 6,007 5,853 2,708
Non-cash stock options expenses (1) 1,064 3,183 288 747
Non-GAAP net income

17,369

9,1906,1413,455
GAAP Earnings per share (diluted) 0.39 0.25 0.14 0.11
Non-cash stock options expenses (1) 0.03 0.12 0.01 0.02
Non-GAAP Earnings per share (diluted) 0.420.370.150.13
(1) Non-cash stock options expenses:
Cost of Revenues 8 135 4 28
Research and development 6 118 1 25
Selling, general, marketing and administrative 1,050 2,930 283 694
1,0643,183288747
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
US dollars in thousands
Nine months endedThree months ended
September 30,September 30,
2007200620072006
UnauditedUnauditedUnauditedUnaudited
Cash flows from operating activities:
Net income 16,305 6,007 5,853 2,708

Adjustments required to reconcile net income to net cash provided by (used in) operating activities:

Depreciation and amortization 14,963 15,791 4,786 5,579
Gain from disposal of a subsidiary - (60 ) - -
Stock compensation relating options 1,064 3,183 288 747
Accretion of discount - 504 - 164
Accrued severance pay, net (20 ) 467 (161 ) (49 )
Interest accrued on short and long-term restricted cash (1,099 ) (586 ) (363 ) (443 )
Interest on Held to maturity marketable securities (1,608 ) - (671 ) -
Exchange rate differences on long-term loans 503 507 363 30
Exchange rate differences on loans to employees (128 ) (240 ) (169 ) (112 )
Capital loss from disposal of property and equipment 153 52 78 4
Deferred tax liabilities (595 ) (535 ) (247 ) (18 )
Decrease (increase) in trade receivables, net (13,795 ) (1,128 ) (6,531 ) 4,344

Decrease (increase) in other assets (including short-term, long-term and deferred charges)

15,151 (1,979 ) 10,783 1,997
Decrease (increase) in inventories 4,503 (15,228 ) 454 (4,266 )
Increase (decrease) in trade payables (2,640 ) 2,080 (2,765 ) (1,833 )
Decrease in accrued expenses (2,088 ) (1,648 ) (138 ) (1,016 )

Decrease in advances from customer held by trustees, net (including long-term)

(8,141 ) (7,669 ) (619 ) (2,080 )

Increase (decrease) in other accounts payable and other long term liabilities mainly deferred revenue

(12,502 ) 36,125 (11,019 ) 14,115
Net cash provided by (used in) operating activities10,02635,643(78)19,871
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
US dollars in thousands
Nine months endedThree months ended
September 30,September 30,
2007200620072006
UnauditedUnauditedUnauditedUnaudited
Cash flows from investing activities:
Purchase of property and equipment (5,714 ) (4,491 ) (2,760 ) (1,993 )
Investment in held to maturity marketable securities (67,645 ) - (4,285 ) -
Proceeds from held to maturity marketable securities 19,934 - 14,459 -
Proceeds from short-term bank deposits - 3,300 - -
Loans to employees - Net 845 272 398 18
Investment in restricted cash held by trustees - (3,520 ) - (1,682 )
Proceeds from restricted cash held by trustees 92 1,479 - 251
Investment in restricted cash (including long-term) (5,952 ) (3,291 ) (1,483 ) (38 )
Proceeds from restricted cash (including long-term) 3,824 14,596 3 2,708
Investment in other assets - (6 ) - -
Net cash provided by (used in) investing activities(54,616)8,3396,332(736)
Cash flows from financing activities:
Exercise of options, net 3,092 3,348 1,467 1,096
Issuance expenses of ordinary shares (262 ) - (3 ) -
Short-term bank credit, net 4,623 (8,172 ) (5 ) (332 )
Proceeds from long-term loans 1,000 - 1,000 -
Repayment of long-term loans (5,949 ) (7,936 ) (4,556 ) (4,801 )

Net cash provided by (used in) financing activities2,504(12,760)(2,097)(4,037)
Effect of exchange rate changes on cash and cash equivalents798252259(16)
Increase (decrease) in cash and cash equivalents(41,288)31,4744,41615,082
Cash and cash equivalents at the beginning of the period149,54574,929103,84191,321
Cash and cash equivalents at the end of the period108,257106,403108,257106,403
GILAT SATELLITE NETWORKS LTD.
CONDENSED EBITDA
US dollars in thousands
Nine months endedThree months ended
September 30,September 30,
2007200620072006
UnauditedUnauditedUnauditedUnaudited
Operating income 12,992 9,178 4,798 3,657
Add:
Non-cash stock option expenses 1,064 3,183 288 747
Deprecation and amortization 14,963 15,791 4,786 5,579
EBITDA29,01928,1529,8729,983

Contacts:

Gilat Satellite Networks Ltd.
Ayelet Shaked, +972 2 925 2598
Director of IR
ayelets@gilat.com
or
The Global Consulting Group (GCG)
Rachel Levine, +1-646-284-9439 (Investors) (USA)
rlevine@hfgcg.com

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.