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Gilat Announces Fourth Quarter And Full Year 2012 Results

Stocks in this article: GILT

(2) Operating income before depreciation, amortization, non-cash stock option expenses as per ASC 718 (formerly SFAS 123(R)) 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. Reconciliation between the Company's Operating income and EBITDA is presented in the attached summary financial statements.

About Gilat Satellite Networks Ltd.

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 the United States, 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

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.

GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
US dollars in thousands
 
  December 31, December 31,
  2012 2011
  Unaudited  
     
ASSETS    
     
CURRENT ASSETS:    
Cash and cash equivalents  66,968  56,231
Short-term restricted cash  3,794  7,034
Restricted cash held by trustees  1,664  1,549
Trade receivables, net  60,991  51,654
Inventories  24,973  31,933
Other current assets  29,140  25,767
Total current assets  187,530  174,168
     
LONG-TERM INVESTMENTS AND RECEIVABLES:    
Long-term restricted cash  1,151  2,025
Severance pay fund  9,703  9,722
Long-term trade receivables, receivables in respect of capital leases and other receivables  19,781  20,219
Total long-term investments and receivables  30,635  31,966
     
PROPERTY AND EQUIPMENT, NET  94,727  100,926
     
INTANGIBLE ASSETS, NET  35,991  49,927
     
GOODWILL  65,760  89,691
     
TOTAL ASSETS  414,643  446,678
     
     
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
US dollars in thousands
  December 31, December 31,
  2012 2011
  Unaudited  
     
LIABILITIES AND EQUITY    
     
CURRENT LIABILITIES:    
Short-term bank credit  3,517  2,971
Current maturities of long-term loans and convertible notes  7,963  19,092
Trade payables   23,240  25,477
Accrued expenses   24,353  25,609
Short-term advances from customer, held by trustees  4,448  1,551
Other current liabilities  40,336  36,764
     
Total current liabilities  103,857  111,464
     
LONG-TERM LIABILITIES:    
Accrued severance pay  9,513  9,445
Long-term loans, net   40,747  40,353
Other long-term liabilities  18,569  25,341
     
Total long-term liabilities  68,829  75,139
     
COMMITMENTS AND CONTINGENCIES    
     
EQUITY:    
Share capital - ordinary shares of NIS 0.2 par value   1,909  1,882
Additional paid in capital  869,822  867,098
Accumulated other comprehensive income  2,864  541
Accumulated deficit  (632,638)  (609,446)
     
Total equity  241,957  260,075
     
TOTAL LIABILITIES AND EQUITY  414,643  446,678
             
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   
    December 31, 2012     December 31, 2011  
  GAAP Adjustments (1) Non-GAAP GAAP Adjustments (1) Non-GAAP
  Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
             
Revenues  97,428  --   97,428  93,604  --   93,604
Cost of revenues  64,567  (1,742)  62,825  59,943  (1,699)  58,244
Gross profit  32,861  1,742  34,603  33,661  1,699  35,360
  34%   36% 36%   38%
Research and development expenses:            
Expenses incurred  8,022  (111)  7,911  8,963  (48)  8,915
Less - grants  710  --   710  635  --   635
   7,312  (111)  7,201  8,328  (48)  8,280
Selling and marketing expenses  12,534  (362)  12,172  11,776  (325)  11,451
General and administrative expenses  8,961  (354)  8,607  9,270  (263)  9,007
Impairment of goodwill and Intangible assets and restructuring costs  32,194  (32,194)  --   19,478  (19,478)  -- 
Operating income (loss)  (28,140)  34,763  6,623  (15,191)  21,813  6,622
Financial expenses, net   (215)  --   (215)  (113)  --   (113)
Other income  2,729  (2,729)  --   1,863  (1,863)  -- 
Income (loss) before taxes on income  (25,626)  32,034  6,408  (13,441)  19,950  6,509
Tax benefit  (1,324)  --   (1,324)  (1,911)  --   (1,911)
Net income (loss)  (24,302)  32,034  7,732  (11,530)  19,950  8,420
             
Basic net earnings (loss) per share  (0.58)    0.19  (0.28)    0.20
Diluted net earnings (loss) per share  (0.58)    0.18  (0.28)    0.20
             
Weighted average number of shares used in computing net earnings (loss) per share:             
Basic  41,603    41,603  41,111    41,111
Diluted  41,603    43,556  41,111    42,782
             
(1) Adjustments reflect the effect of non-cash stock options expenses as per ASC 718, amortization of intangible assets related to acquisition transactions,
Costs related to acquisition transactions, impairment of goodwill and intangible assets and restructuring costs and other income.
             
    Three months ended      Three months ended   
    December 31, 2012     December 31, 2011  
    Unaudited     Unaudited  
Non-cash stock-based compensation expenses:            
Cost of Revenues    70      69  
Research and development    111      48  
Selling and marketing    132      95  
General and administrative    354      263  
     667      475  
             
Amortization of intangible assets related to acquisition transactions:            
Cost of Revenues    1,672      1,630  
Selling and marketing    230      230  
     1,902      1,860  
             
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       Year Ended   
    December 31, 2012     December 31, 2011  
  GAAP Adjustments (1) Non-GAAP GAAP Adjustments (1) Non-GAAP
  Unaudited Unaudited Unaudited   Unaudited Unaudited
             
Revenues  348,363  --   348,363  339,201  --   339,201
Cost of revenues  235,363  (6,690)  228,673  217,574  (7,416)  210,158
Gross profit  113,000  6,690  119,690  121,627  7,416  129,043
  32%   34% 36%   38%
Research and development expenses:            
Expenses incurred  32,296  (354)  31,942  35,076  (222)  34,854
Less - grants  3,055  --   3,055  3,375  --   3,375
   29,241  (354)  28,887  31,701  (222)  31,479
Selling and marketing expenses  42,631  (1,335)  41,296  46,523  (1,379)  45,144
General and administrative expenses  34,075  (1,374)  32,701  36,005  (1,058)  34,947
Costs related to acquisition transactions   --   --   --   256  (256)  -- 
Impairment of goodwill and intangible assets and restructuring costs  32,194  (32,194)  --   19,478  (19,478)  -- 
Operating income (loss)  (25,141)  41,947  16,806  (12,336)  29,809  17,473
Financial expenses, net   (2,642)  --   (2,642)  (1,931)  --   (1,931)
Other income  2,729  (2,729)  --   8,074  (8,074)  -- 
Income (loss) before taxes on income  (25,054)  39,218  14,164  (6,193)  21,735  15,542
Tax benefit  (1,862)  --   (1,862)  (343)  --   (343)
Net income (loss)  (23,192)  39,218  16,026  (5,850)  21,735  15,885
             
Basic net earnings (loss) per share  (0.56)    0.39  (0.14)    0.39
Diluted net earnings (loss) per share  (0.56)    0.37  (0.14)    0.37
             
Weighted average number of shares used in computing net earnings (loss) per share             
Basic  41,410    41,410  40,929    40,929
Diluted  41,410    43,406  40,929    42,889
             
(1) Adjustments reflect the effect of non-cash stock options expenses as per ASC 718, amortization of intangible assets related to acquisition transactions,
 Costs related to acquisition transactions, impairment of goodwill and intangible assets and restructuring costs and other income.
             
     Year Ended       Year Ended   
    December 31, 2012     December 31, 2011  
    Unaudited     Unaudited  
Non-cash stock-based compensation expenses:            
Cost of Revenues    300      295  
Research and development    354      222  
Selling and marketing    417      434  
General and administrative    1,374      1,058  
     2,445      2,009  
             
Amortization of intangible assets related to acquisition transactions:            
Cost of Revenues    6,390      7,121  
Selling and marketing    918      945  
     7,308      8,066  
         
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,
  2012 2011 2012 2011
  Unaudited   Unaudited Unaudited
         
Revenues  348,363  339,201  97,428  93,604
Cost of revenues  235,363  217,574  64,567  59,943
Gross profit  113,000  121,627  32,861  33,661
Research and development expenses:        
Expenses incurred  32,296  35,076  8,022  8,963
Less - grants  3,055  3,375  710  635
   29,241  31,701  7,312  8,328
Selling and marketing expenses  42,631  46,523  12,534  11,776
General and administrative expenses  34,075  36,005  8,961  9,270
Costs related to acquisition transactions   --   256  --   -- 
Impairment of goodwill and Intangible assets and restructuring costs  32,194  19,478  32,194  19,478
Operating loss  (25,141)  (12,336)  (28,140)  (15,191)
Financial expenses, net   (2,642)  (1,931)  (215)  (113)
Other income  2,729  8,074  2,729  1,863
Loss before taxes on income  (25,054)  (6,193)  (25,626)  (13,441)
Tax benefit  (1,862)  (343)  (1,324)  (1,911)
Net loss  (23,192)  (5,850)  (24,302)  (11,530)
         
Basic net loss per share  (0.56)  (0.14)  (0.58)  (0.28)
Diluted net loss per share  (0.56)  (0.14)  (0.58)  (0.28)
         
Weighted average number of shares used in computing net loss per share        
Basic 41,410 40,929 41,603 41,111
Diluted 41,410 40,929 41,603 41,111
         
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
US dollars in thousands
 
  Year ended Three months ended
  December 31, December 31,
  2012 2011 2012 2011
  Unaudited   Unaudited Unaudited
         
Cash flows from operating activities:        
Net loss  (23,192)  (5,850)  (24,302)  (11,530)
Adjustments required to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization  22,582  24,121  5,991  6,070
Impairment of goodwill and other intangible assets  31,879  18,043  31,879  18,043
Gain from the sale of an investment accounted for at cost  --   (3,034)  --   -- 
Stock-based compensation related to employees  2,445  2,009  667  475
Accrued severance pay, net  88  (285)  (150)  (21)
Accrued interest and exchange rate differences on short and long-term restricted cash, net  (209)  500  (114)  269
Exchange rate differences on long-term loans  90  (112)  81  (262)
Capital loss from disposal of property and equipment  61  286  14  168
Deferred income taxes  (3,657)  (428)  (2,578)  (1,589)
Decrease (increase) in trade receivables, net  (9,891)  646  733  3,553
Increase in other assets (including short-term, long-term and deferred charges)  (3,054)  (21,062)  (728)  (1,825)
Decrease (increase) in inventories  4,969  (4,889)  2,522  (1,194)
Increase (decrease) in trade payables  (2,176)  7,066  (3,009)  3,912
Increase (decrease) in accrued expenses  (1,265)  11  1,366  575
Increase (decrease) in advances from customer, held by trustees, net   2,897  547  (39)  (1,062)
Increase (decrease) in other accounts payable and other long term liabilities  4  (8,972)  5,748  1,407
Net cash generated from operating activities  21,571  8,597  18,081  16,989
         
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
US dollars in thousands
         
  Year ended Three months ended
  December 31, December 31,
  2012 2011 2012 2011
  Unaudited   Unaudited Unaudited
Cash flows from investing activities:        
Purchase of property and equipment  (4,646)  (8,948)  (1,218)  (2,844)
Proceeds from sale of an investment accounted for at cost  --   3,034  --   -- 
Investment in restricted cash held by trustees  (35,442)  (11,737)  (6,741)  (5,417)
Proceeds from restricted cash held by trustees  35,447  10,660  12,931  6,213
Investment in restricted cash (including long-term)  (24,507)  (23,548)  (9,090)  (8,817)
Proceeds from restricted cash (including long-term)  28,639  23,014  7,762  6,045
Proceeds from working capital adjustment to subsidiary purchase price  --   1,465  --   -- 
Acquisitions of subsidiaries, net of cash acquired  --   (1,867)  --   -- 
Purchase of intangible asset  (89)  (38)  (7)  (12)
Net cash generated from (used in) investing activities  (598)  (7,965)  3,637  (4,832)
         
Cash flows from financing activities:        
Repayment of convertible notes  (14,322)  (835)  (14,322)  (441)
Issuance of restricted stock units and exercise of stock options  254  27  236  7
Short-term bank credit, net  546  842  (644)  200
Proceeds from long-term loans  10,000  --   --   -- 
Repayment of long-term loans  (6,452)  (1,225)  (1,017)  (178)
Net cash used in financing activities  (9,974)  (1,191)  (15,747)  (412)
         
Effect of exchange rate changes on cash and cash equivalents  (262)  (448)  (29)  (9)
         
Increase (decrease) in cash and cash equivalents  10,737  (1,007)  5,942  11,736
         
Cash and cash equivalents at the beginning of the period  56,231  57,238  61,026  44,495
         
Cash and cash equivalents at the end of the period  66,968  56,231  66,968  56,231
         
GILAT SATELLITE NETWORKS LTD.
CONDENSED EBITDA
US dollars in thousands
  Year ended Three months ended
  December 31, December 31,
  2012 2011 2012 2011
  Unaudited Unaudited Unaudited Unaudited
         
Operating loss  (25,141)  (12,336)  (28,140)  (15,191)
Add:        
Non-cash stock-based compensation expenses  2,445  2,009  667  475
Costs related to acquisition transactions  --   256  --   -- 
Impairment of goodwill and Intangible assets and restructuring costs  32,194  19,478  32,194  19,478
Depreciation and amortization  22,582  24,121  5,991  6,070
EBITDA  32,080  33,528  10,712  10,832
CONTACT: Phil Carlson / Josh Dver, KCSA
         pcarlson@kcsa.com / jdver@kcsa.com
         1 (212) 896 1233 / 1239
         
         David Leichner, Gilat Satellite Networks Ltd.
         davidle@gilat.com
         (972) 3 925 2321

Gilat Satellite Networks Logo

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