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Gilat Announces First Quarter 2013 Results

Stocks in this article: GILT

(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. 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

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,
  2013 2012
  Unaudited  
     
ASSETS    
     
CURRENT ASSETS:    
Cash and cash equivalents  71,517  66,968
Short-term restricted cash  4,369  3,794
Restricted cash held by trustees  12  1,664
Trade receivables, net  55,086  60,991
Inventories  28,432  24,973
Other current assets  29,209  29,140
Total current assets  188,625  187,530
     
LONG-TERM INVESTMENTS AND RECEIVABLES:    
Long-term restricted cash  1,457  1,151
Severance pay fund  9,671  9,703
Long-term trade receivables, receivables in respect of capital leases and other receivables  19,422  19,781
Total long-term investments and receivables  30,550  30,635
     
PROPERTY AND EQUIPMENT, NET  93,311  94,727
     
INTANGIBLE ASSETS, NET  34,343  35,991
     
GOODWILL  65,760  65,760
     
TOTAL ASSETS  412,589  414,643
     
     
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
US dollars in thousands
  March 31, December 31,
  2013 2012
  Unaudited  
     
LIABILITIES AND EQUITY    
     
CURRENT LIABILITIES:    
Short-term bank credit  4,034  3,517
Current maturities of long-term loans  7,945  7,963
Trade payables   24,049  23,240
Accrued expenses   23,739  24,353
Short-term advances from customer, held by trustees  219  4,448
Other current liabilities  37,024  40,336
     
Total current liabilities  97,010  103,857
     
LONG-TERM LIABILITIES:    
Accrued severance pay  9,495  9,513
Long-term loans, net   35,646  40,747
Other long-term liabilities  30,270  18,569
     
Total long-term liabilities  75,411  68,829
     
COMMITMENTS AND CONTINGENCIES    
     
EQUITY:    
Share capital - ordinary shares of NIS 0.2 par value   1,917  1,909
Additional paid in capital  870,929  869,822
Accumulated other comprehensive income  2,316  2,864
Accumulated deficit  (634,994)  (632,638)
     
Total equity  240,168  241,957
     
TOTAL LIABILITIES AND EQUITY  412,589  414,643
 
 
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   
    March 31, 2013     March 31, 2012  
  GAAP Adjustments (1) Non-GAAP GAAP Adjustments (1) Non-GAAP
  Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
             
Revenues  82,827  --   82,827  76,607  --   76,607
Cost of revenues  57,286  (1,288)  55,998  52,318  (1,638)  50,680
Gross profit  25,541  1,288  26,829  24,289  1,638  25,927
  31%   32% 32%   34%
Research and development expenses:            
Expenses incurred  7,631  (99)  7,532  8,220  (54)  8,166
Less - grants  332  --   332  457  --   457
   7,299  (99)  7,200  7,763  (54)  7,709
Selling and marketing expenses  11,195  (320)  10,875  11,154  (314)  10,840
General and administrative expenses  8,043  (333)  7,710  7,952  (292)  7,660
Operating income (loss)  (996)  2,040  1,044  (2,580)  2,298  (282)
Financial expenses, net   (934)  --   (934)  (458)  --   (458)
Income (loss) before taxes on income  (1,930)  2,040  110  (3,038)  2,298  (740)
Taxes on income  426  --   426  23  --   23
Net loss  (2,356)  2,040  (316)  (3,061)  2,298  (763)
             
Basic net loss per share  (0.06)    (0.01)  (0.07)    (0.02)
Diluted net loss per share  (0.06)    (0.01)  (0.07)    (0.02)
             
Weighted average number of shares used in computing net loss per share:             
 Basic  41,766    41,766  41,230    41,230
 Diluted  41,766    41,766  41,230    41,230
             
(1) Adjustments reflect the effect of non-cash stock based compensation as per ASC 718 and amortization of intangible assets related to acquisition transactions.
             
     Three months ended       Three months ended   
    March 31, 2013     March 31, 2012  
    Unaudited     Unaudited  
Non-cash stock-based compensation expenses:            
Cost of Revenues    40      66  
Research and development    99      54  
Selling and marketing    91      85  
General and administrative    333      292  
     563      497  
             
Amortization of intangible assets related to acquisition transactions:            
Cost of Revenues    1,248      1,572  
Selling and marketing    229      229  
     1,477      1,801  
 
 
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except per share data)
     
  Three months ended
  March 31,
  2013 2012
  Unaudited Unaudited
     
Revenues  82,827  76,607
Cost of revenues  57,286  52,318
Gross profit  25,541  24,289
Research and development expenses:    
Expenses incurred  7,631  8,220
Less - grants  332  457
   7,299  7,763
Selling and marketing expenses  11,195  11,154
General and administrative expenses  8,043  7,952
Operating loss  (996)  (2,580)
Financial expenses, net   (934)  (458)
Loss before taxes on income  (1,930)  (3,038)
Taxes on income  426  23
Net loss  (2,356)  (3,061)
     
Basic net loss per share  (0.06)  (0.07)
Diluted net loss per share  (0.06)  (0.07)
     
Weighted average number of shares used in computing net loss per share:    
Basic 41,766 41,230
Diluted 41,766 41,230
 
 
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
US dollars in thousands
  Three months ended
  March 31,
  2013 2012
  Unaudited Unaudited
     
Cash flows from operating activities:    
Net loss  (2,356)  (3,061)
Adjustments required to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization  5,560  5,038
Stock-based compensation  563  497
Accrued severance pay, net  14  (99)
Accrued interest and exchange rate differences on short and long-term restricted cash, net  39  (247)
Exchange rate differences on long-term loans  (132)  160
Capital loss (gain) from disposal of property and equipment  12  (6)
Deferred income taxes  (16)  (178)
Decrease (increase) in trade receivables, net  5,999  (7,925)
Decrease (increase) in other assets (including short-term, long-term and deferred charges)  (1,207)  270
Increase in inventories  (3,824)  (3,264)
Increase (decrease) in trade payables  797  (2,186)
Decrease in accrued expenses  (613)  (3,906)
Increase (decrease) in advances from customer, held by trustees, net   (4,229)  5,655
Increase (decrease) in other accounts payable and other long term liabilities  (5,952)  962
Net cash used in operating activities  (5,345)  (8,290)
     
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
US dollars in thousands
     
  Three months ended
  March 31, 
  2013 2012
  Unaudited Unaudited
Cash flows from investing activities:    
Purchase of property and equipment  (1,131)  (1,035)
Investment in restricted cash held by trustees  (1,782)  (13,238)
Proceeds from restricted cash held by trustees  3,407  4,059
Investment in restricted cash (including long-term)  (8,703)  (5,749)
Proceeds from restricted cash (including long-term)  7,813  8,128
Purchase of intangible asset  (16)  (9)
Net cash used in investing activities  (412)  (7,844)
     
     
Cash flows from financing activities:    
Issuance of restricted stock units and exercise of stock options  553  6
Proceeds from financing contract  14,472  -- 
Short-term bank credit, net  517  (417)
Repayment according to financing contract  (212)  -- 
Repayment of long-term loans  (4,987)  (4,248)
Net cash generated from (used in) financing activities  10,343  (4,659)
     
Effect of exchange rate changes on cash and cash equivalents  (37)  131
     
Increase (decrease) in cash and cash equivalents  4,549  (20,662)
     
Cash and cash equivalents at the beginning of the period  66,968  56,231
     
Cash and cash equivalents at the end of the period  71,517  35,569
 
 
GILAT SATELLITE NETWORKS LTD.
CONDENSED EBITDA
US dollars in thousands
     
  Three months ended
  March 31,
  2013 2012
  Unaudited Unaudited
     
Operating loss  (996)  (2,580)
Add:    
Non-cash stock-based compensation expenses  563  497
Depreciation and amortization  5,560  5,038
EBITDA  5,127  2,955
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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