Gilat Satellite Networks Ltd. (Nasdaq:GILT) (TASE:GILT), a
worldwide leader in satellite networking technology, solutions and
services, today reported its results for the first quarter ended
March 31, 2014.
Key Financial Highlights:
- Non-GAAP operating income was $0.5 million, compared to a loss
of $0.1 million in the fourth quarter 2013. GAAP operating loss was
$1.5 million compared to a loss of $2.7 million in the fourth
quarter of 2013
- Non-GAAP gross margin was 42%, compared to 39% in the fourth
quarter 2013. GAAP gross margin was 39%, compared to 36% in the
fourth quarter
- Management reaffirms 2014 objectives for annual revenues of
$240-$245 million and EBITDA margin levels of approximately 9%
- Launched new products to market; Capricorn, CellEdge, BlackRay,
Ka-band 50W BUC, and SR 300X-M
- Announced two new Ka-Band and High Throughput Satellite
contracts
Revenues for the first quarter of 2014 were $50.9 million,
compared to $65.4 million for the same period in 2013. The main
reasons for the decline in revenue were completion of past
contracts in Colombia and completion of the installations for NBN
Co in Australia.
On a non-GAAP basis, operating income was $0.5 million in the
first quarter of 2014 as compared to an operating income of $3.0
million in the comparable quarter of 2013. On a non-GAAP basis, net
loss for the quarter was $0.6 million or a loss of $0.01 per
diluted share compared to net income of $1.8 million or $0.04 per
diluted share in the same quarter of 2013.
GAAP operating loss for the first quarter was $1.5 million as
compared to an operating income of $1.1 million in the first
quarter of 2013. GAAP Net loss for the quarter was $2.7 million, or
a loss of $0.06 per diluted share, compared to net loss of $2.4
million, or a loss of $0.05 per diluted share in the first quarter
of 2013.
EBITDA for the first quarter of 2014 was $2.8 million compared
with $6.2 million in the comparable period in 2013.
"The quarter was highlighted by the launch of innovative new
products, which are a result of our continued investment in
technology," said Erez Antebi, Chief Executive Officer of Gilat.
"We also announced this quarter two important partnerships with
high throughput satellite operators, Thaicom and Inmarsat."
Antebi concluded, "Our improved profitability this quarter comes
from our Commercial and Defense Divisions, as well as the
cost-reduction steps we took last year. As we stated previously, we
expect a stronger second half for the year coming from our growing
commercial and defense activity as well as growth in revenues from
projects in Peru and Colombia. We are on track to meet our
previously stated 2014 management objectives."
Corporate updates:
- Amiram Levinberg, one of the founders of the company and
Chairman of the Board, decided to step down from his position.
- Dov Baharav was elected as the new Chairman of the Board of
Gilat.
Key Recent Announcements:
- Gilat Selected by Inmarsat as Global Xpress® Services Partner
for New Fixed Land VSAT Opportunities
- SES Broadband Services (SBBS) and Gilat Expand Consumer Ka-Band
Services to Germany and Italy over SES's recently launched ASTRA 2E
Satellite
- Gilat Announces Availability of SkyEdge II-c Capricorn
Satellite VSAT with Exceptional Throughput Exceeding 200Mbps
- Gilat showcases its new BlackRay terminals for Unmanned
Platforms
- Gilat Introduces StealthRay 300X-M Low-Profile Ultra-Compact
X-Band Satellite-on-the-Move Antenna
- Gilat Announces the Release of Wavestream's 50-Watt Ka-Wideband
BUC
The GAAP financial results include the effect of non-cash stock
options expenses as per ASC 718, amortization of intangible assets
resulting from the purchase price allocation, restructuring costs
and net income (loss) from discontinued operations.
Conference Call and Webcast Details:
Gilat management will host a conference call today at 13:30 GMT/
09:30 EDT/ 16:30 IDT (Israel Daylight Time) to discuss the results.
International participants are invited to access the call at (972)
3-918-0644, and US-based participants are invited to access the
call by dialing (888) 407-2553. A replay of the conference call
will be available beginning at approximately 16:00 GMT/ 12:00 EDT/
19:00 IDT today, until 16:00 GMT/ 12:00 EDT/ 19:00 IDT May 23,
2014. International participants are invited to access the replay
at (972) 3-925-5900 and US-based participants are invited to access
the replay by dialing (888) 326-9310. 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.
Notes:
(1) The attached summary financial statements were prepared in
accordance with U.S. Generally Accepted Accounting Principles
(GAAP). The attached summary financial statements are unaudited. To
supplement the consolidated financial information and statements
presented in accordance with GAAP, the Company presents its EBITDA
before the impact of non-cash stock based compensation,
depreciation and amortization, other income and other costs related
to acquisition transactions. 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.
We regularly use supplemental non-GAAP financial measures
internally to understand manage and evaluate our business and make
operating decisions. We believe these non-GAAP financial measures
provide consistent and comparable measures to help investors
understand our current and future operating cash flow performance.
These non-GAAP financial measures may differ materially from the
non-GAAP financial measures used by other companies.
(2) Operating income before depreciation, amortization, non-cash
stock based compensation as per ASC 718 and other costs related to
acquisition transactions ('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. . A
reconciliation of specific adjustments to GAAP results is provided
in the tables below.
About Gilat
Gilat Satellite Networks Ltd (Nasdaq:GILT) (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 85 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. 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. 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.
GILAT SATELLITE NETWORKS
LTD. |
CONDENSED CONSOLIDATED
BALANCE SHEET |
US dollars in
thousands |
|
|
|
|
March 31, |
December 31, |
|
2014 |
2013 |
|
Unaudited |
|
|
|
|
ASSETS |
|
|
|
|
|
CURRENT ASSETS: |
|
|
Cash and cash equivalents |
48,579 |
58,424 |
Restricted cash |
24,813 |
18,891 |
Restricted cash held by trustees |
4,385 |
3,221 |
Trade receivables, net |
58,676 |
56,466 |
Inventories |
26,377 |
27,141 |
Other current assets |
18,282 |
10,143 |
Total current
assets |
181,112 |
174,286 |
|
|
|
LONG-TERM INVESTMENTS AND
RECEIVABLES: |
|
|
Long-term restricted cash |
296 |
6,279 |
Severance pay funds |
9,646 |
9,856 |
Other long term receivables |
217 |
278 |
Total long-term investments and
receivables |
10,159 |
16,413 |
|
|
|
PROPERTY AND EQUIPMENT,
NET |
83,779 |
85,369 |
|
|
|
INTANGIBLE ASSETS, NET |
27,365 |
28,830 |
|
|
|
GOODWILL |
63,870 |
63,870 |
|
|
|
TOTAL ASSETS |
366,285 |
368,768 |
|
|
|
|
|
|
GILAT SATELLITE NETWORKS
LTD. |
CONDENSED CONSOLIDATED
BALANCE SHEET |
US dollars in
thousands |
|
March 31, |
December 31, |
|
2014 |
2013 |
|
Unaudited |
|
|
|
|
LIABILITIES AND
EQUITY |
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
Short-term bank credit |
1,652 |
-- |
Current maturities of long-term
loans |
4,669 |
4,665 |
Trade payables |
18,881 |
20,900 |
Accrued expenses |
18,410 |
16,748 |
Short-term advances from customers, held
by trustees |
4,228 |
-- |
Other current liabilities |
48,459 |
54,666 |
|
|
|
Total current
liabilities |
96,299 |
96,979 |
|
|
|
LONG-TERM LIABILITIES: |
|
|
Accrued severance pay |
9,296 |
9,628 |
Long-term loans, net of current
maturities |
27,088 |
31,251 |
Other long-term liabilities |
9,397 |
4,877 |
|
|
|
Total long-term
liabilities |
45,781 |
45,756 |
|
|
|
COMMITMENTS AND
CONTINGENCIES |
|
|
|
|
|
EQUITY: |
|
|
Share capital - ordinary shares of NIS
0.2 par value |
1,939 |
1,932 |
Additional paid in capital |
873,944 |
873,045 |
Accumulated other comprehensive
income |
1,544 |
1,591 |
Accumulated deficit |
(653,222) |
(650,535) |
|
|
|
Total equity |
224,205 |
226,033 |
|
|
|
TOTAL LIABILITIES AND
EQUITY |
366,285 |
368,768 |
|
|
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) |
|
|
Three months
ended |
|
|
Three months
ended |
|
|
|
31 March 2014 |
|
|
31 March 2013 |
|
|
GAAP |
Adjustments (1) |
Non-GAAP |
GAAP |
Adjustments (1) |
Non-GAAP |
|
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
|
|
|
|
|
|
|
Revenues |
50,851 |
-- |
50,851 |
65,420 |
-- |
65,420 |
Cost of revenues |
30,876 |
(1,267) |
29,609 |
42,639 |
(1,238) |
41,401 |
Gross profit |
19,975 |
1,267 |
21,242 |
22,781 |
1,238 |
24,019 |
|
39% |
|
42% |
35% |
|
37% |
Research and development
expenses: |
|
|
|
|
|
|
Expenses incurred |
7,239 |
(122) |
7,117 |
7,631 |
(99) |
7,532 |
Less - grants |
354 |
-- |
354 |
332 |
-- |
332 |
|
6,885 |
(122) |
6,763 |
7,299 |
(99) |
7,200 |
Selling and marketing expenses |
9,690 |
(342) |
9,348 |
8,986 |
(301) |
8,685 |
General and administrative expenses |
4,912 |
(303) |
4,609 |
5,445 |
(262) |
5,183 |
Operating income (loss) |
(1,512) |
2,034 |
522 |
1,051 |
1,900 |
2,951 |
Financial expenses, net |
(1,034) |
-- |
(1,034) |
(751) |
-- |
(751) |
Income (loss) before taxes on
income |
(2,546) |
2,034 |
(512) |
300 |
1,900 |
2,200 |
Taxes on income |
90 |
-- |
90 |
376 |
-- |
376 |
Net income (loss) from continuing
operations |
(2,636) |
2,034 |
(602) |
(76) |
1,900 |
1,824 |
Net income (loss) from discontinued
operations |
(51) |
51 |
-- |
(2,280) |
2,280 |
-- |
Net income (loss) |
(2,687) |
2,085 |
(602) |
(2,356) |
4,180 |
1,824 |
|
|
|
|
|
|
|
Basic net earnings (loss) per share
from continuing operations |
(0.06) |
|
|
(0.00) |
|
|
Basic net earnings (loss) per share
from discontinued operations |
(0.00) |
|
|
(0.05) |
|
|
Basic net earnings (loss) per
share |
(0.06) |
|
(0.01) |
(0.05) |
|
0.04 |
|
|
|
|
|
|
|
Diluted net earnings (loss) per share
from continuing operations |
(0.06) |
|
|
(0.00) |
|
|
Diluted net earnings (loss) per share
from discontinued operations |
(0.00) |
|
|
(0.05) |
|
|
Diluted net earnings (loss) per
share |
(0.06) |
|
(0.01) |
(0.05) |
|
0.04 |
|
|
|
|
|
|
|
Weighted average number of shares
used in computing net earnings (loss) per share |
|
|
|
|
|
|
Basic |
42,176 |
|
42,176 |
41,766 |
|
41,766 |
Diluted |
42,176 |
|
42,176 |
41,766 |
|
43,860 |
|
|
|
|
|
|
|
(1) Adjustments reflect the
effect of non-cash stock based compensation as per ASC 718,
amortization of intangible assets related to acquisition
transactions, and net income (loss) from discontinued
operations. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended |
|
|
Three months
ended |
|
|
|
31 March 2014 |
|
|
31 March 2013 |
|
|
|
Unaudited |
|
|
Unaudited |
|
Non-cash stock-based compensation
expenses: |
|
|
|
|
|
|
Cost of revenues |
|
59 |
|
|
40 |
|
Research and development |
|
122 |
|
|
99 |
|
Selling and marketing |
|
129 |
|
|
89 |
|
General and administrative |
|
303 |
|
|
262 |
|
|
|
613 |
|
|
490 |
|
|
|
|
|
|
|
|
Amortization of intangible assets
related to acquisition transactions: |
|
|
|
|
|
|
Cost of revenues |
|
1,208 |
|
|
1,198 |
|
Selling and marketing |
|
213 |
|
|
212 |
|
|
|
1,421 |
|
|
1,410 |
|
|
GILAT SATELLITE NETWORKS
LTD. |
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS |
U.S. dollars in thousands
(except per share data) |
|
Three months
ended |
|
March
31 |
|
2014 |
2013 |
|
Unaudited |
Unaudited |
|
|
|
Revenues |
50,851 |
65,420 |
Cost of revenues |
30,876 |
42,639 |
Gross profit |
19,975 |
22,781 |
Research and development
expenses: |
|
|
Expenses incurred |
7,239 |
7,631 |
Less - grants |
354 |
332 |
|
6,885 |
7,299 |
Selling and marketing expenses |
9,690 |
8,986 |
General and administrative expenses |
4,912 |
5,445 |
Operating income (loss) |
(1,512) |
1,051 |
Financial expenses, net |
(1,034) |
(751) |
Income (loss) before taxes on
income |
(2,546) |
300 |
Taxes on income |
90 |
376 |
Net loss from continuing
operations |
(2,636) |
(76) |
Net loss from discontinued
operations |
(51) |
(2,280) |
Net loss |
(2,687) |
(2,356) |
|
|
|
Net loss per share from continuing
operations (basic and diluted) |
(0.06) |
(0.00) |
Net loss per share from discontinued
operations (basic and diluted) |
(0.00) |
(0.05) |
Net loss per share (basic and
diluted) |
(0.06) |
(0.05) |
|
|
|
Weighted average number of shares
used in computing net loss per share |
|
|
Basic and diluted |
42,176 |
41,766 |
|
|
|
GILAT SATELLITE NETWORKS
LTD. |
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS |
US dollars in
thousands |
|
|
|
|
Three months
ended |
|
March
31, |
|
2014 |
2013 |
|
Unaudited |
Unaudited |
Cash flows from continuing
operations |
|
|
Cash flows from operating
activities: |
|
|
Net loss from continuing
operations |
(2,636) |
(76) |
Adjustments required to reconcile net
loss to net cash generated used in operating
activities: |
|
|
Depreciation and amortization |
3,684 |
4,697 |
Stock-based compensation |
613 |
490 |
Accrued severance pay, net |
(122) |
14 |
Accrued interest and exchange rate
differences on short and long-term restricted cash, net |
86 |
39 |
Exchange rate differences on long-term
loans |
6 |
(132) |
Capital loss from disposal of property and
equipment |
17 |
12 |
Deferred income taxes |
(36) |
(16) |
Decrease (increase) in trade receivables,
net |
(2,040) |
4,180 |
Increase in other assets (including
short-term, long-term and deferred charges) |
(7,783) |
(620) |
Decrease (increase) in inventories |
670 |
(3,912) |
Increase (decrease) in trade payables |
(2,050) |
257 |
Increase (decrease) in accrued expenses |
1,675 |
(832) |
Increase (decrease) in advances from
customers, held by trustees, net |
4,228 |
(4,229) |
Decrease in other accounts payable and other
long term liabilities |
(2,243) |
(5,135) |
Net cash used in operating
activities |
(5,931) |
(5,263) |
|
|
|
GILAT SATELLITE NETWORKS
LTD. |
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS |
US dollars in
thousands |
|
|
|
|
Three months
ended |
|
March
31, |
|
2014 |
2013 |
|
Unaudited |
Unaudited |
Cash flows from investing
activities: |
|
|
Purchase of property and equipment |
(525) |
(933) |
Investment in restricted cash held by
trustees |
(4,228) |
(1,782) |
Proceeds from restricted cash held by
trustees |
2,950 |
3,407 |
Investment in restricted cash (including
long-term) |
-- |
(2,163) |
Proceeds from restricted cash (including
long-term) |
76 |
65 |
Purchase of intangible assets |
-- |
(16) |
|
|
|
Net cash used in investing
activities |
(1,727) |
(1,422) |
|
|
|
|
|
|
Cash flows from financing
activities: |
|
|
Issuance of restricted stock units and
exercise of stock options |
293 |
553 |
Short-term bank credit, net |
1,652 |
517 |
Repayment of long-term loans |
(4,165) |
(4,987) |
|
|
|
Net cash used in financing
activities |
(2,220) |
(3,917) |
|
|
|
Cash flows from discontinued
operations |
|
|
Net cash used in operating
activities |
-- |
(82) |
Net cash provided by investing
activities |
-- |
1,010 |
Net cash provided by financing
activities |
-- |
14,260 |
|
-- |
15,188 |
|
|
|
Effect of exchange rate changes on
cash and cash equivalents |
33 |
(37) |
|
|
|
Increase (decrease) in cash and cash
equivalents |
(9,845) |
4,549 |
|
|
|
Cash and cash equivalents at the
beginning of the period |
58,424 |
66,968 |
|
|
|
Cash and cash equivalents at the end
of the period |
48,579 |
71,517 |
|
|
GILAT SATELLITE NETWORKS
LTD. |
CONDENSED
EBITDA |
US dollars in
thousands |
|
Three months
ended |
|
March
31, |
|
2014 |
2013 |
|
Unaudited |
Unaudited |
|
|
|
Operating income (loss) |
(1,512) |
1,051 |
Add: |
|
|
Non-cash stock-based compensation
expenses |
613 |
490 |
Depreciation and amortization |
3,684 |
4,697 |
EBITDA |
2,785 |
6,238 |
|
|
|
CONTACT: Gilat Satellite Networks
Doron Elinav
doronE@gilat.com
KCSA Strategic Communications
Phil Carlson - Vice President
(212) 896-1233
pcarlson@kcsa.com
Vincent G. Piazza- Account Executive
(212) 896-1289
vpiazza@kcsa.com
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