Gilat Satellite Networks Ltd. (
Q4 2011 Earnings Call
February 22, 2012 9:30 AM ET
Rob Fink – IR, KCSA Strategic Communications
Erez Antebi – CEO
Ari Krashin – CFO
Gunther Karger – Discovery Group
Andrew Uerkwitz – Oppenheimer
James Breen – William Blair & Company
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Ladies and gentlemen, thank you for standing by. Welcome to Gilat’s Fourth Quarter 2011 Results Conference Call. All participants are at present in listen-only mode. Following the management’s formal presentation, instructions will be given for the question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded.
I would now like to turn the call over to Rob Fink of KCSA to read the Safe Harbor statement. Rob, please go ahead.
Thank you. Good morning and good afternoon. Thank you for joining us today for Gilat’s fourth quarter and full-year 2011 results conference call. A recording of this call will be available beginning at approximately noon Eastern Time today, February 22 and will be available until February 24, 2012 at noon. Gilat’s earnings press release and the website provide details on accessing the archived call.
Investors are urged to read the forward-looking statements in our earnings press release which states that statements made on the earnings call which are not historical facts may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All forward-looking statements including statements regarding future financial operating results involve risks, uncertainties, and contingencies, many of which are beyond the control of Gilat and which may cause actual results to differ materially from anticipated results.
Gilat is under no obligation to update or alter forward-looking statements whether as a result of new information, future events, or otherwise and we expressly disclaim any obligation to do so. More detailed information about risk factors can be found in our reports filed with the Securities and Exchange Commission.
With that said, I would now like to turn the call over to Gilat Management. Joining us on the call today are Erez Antebi, Gilat’s Chief Executive Officer; and Ari Krashin, Chief Financial Officer. Erez, the call is yours. Please go ahead.
Thank you, Rob. Good day, everyone. Thank you for joining me for this call, my first as CEO. Well the purpose of today’s call is to review our fourth quarter results and our overall performance in 2011. I would also like to take this opportunity to share with you a few thoughts and perspectives as I begin my role as CEO of Gilat and where I expect the company is heading in the long-term.
First, I will begin today’s call with a snapshot of our fourth quarter and full year results, followed by an update on recent organizational changes and will then provide you with some more detailed review of our business during the quarter. Following my review, Ari will take you through the financial results in more detail. After this, I will summarize 2011 and share with you our objectives for the coming year and then we will open the floor for questions.
The fourth quarter of 2011 was characterized by a very strong financial performance coupled with several important contract wins. Revenues for the fourth quarter were $93.6 million, compared with $83.9 million in the previous quarter and $66.1 million in the comparable quarter of 2010.
For the full year 2011, we recorded revenues of $339.2 million compared to $233 million in 2010. On a GAAP basis, we recorded a net loss of $5.9 million for the year compared to a net income of $30.6 million in 2010. Our loss this year included a onetime not-cash impairment of goodwill related to the acquisition of Wavestream as well as other restructuring charges in the total amount of $19.5 million.
Ari will discuss the impairment and the comparison to this 2010 results in more detail. On a non-GAAP basis our net income for the year 2011 was $15.9 million compared to a non-GAAP net income of $0.7 million in 2010. Our backlog reached $264.6 million at the end of 2011, up from $232.1 million at the end of 2010. In summary, the fourth quarter of 2011 as in previous years and on par with market seasonality has been a strong quarter for Gilat. We are stood by our management objectives set at the beginning of 2011 and I applaud Amiram and the team for their hard work this year.
Before looking at our business this quarter, I would like to start by telling you about the organizational changes we began taking recently, as those changes impact the way we manage and look at our business going forward, specifically the division of Gilat into three separate business activities; Commercial, Defense and Services. The first Commercial Satcom includes broadband satellite network equipment and professional services for enterprises, consumers, and governments worldwide. This business also includes our consumer Ka-band initiative. The second, Defense Satcom provides satellite communication equipment for Defense and Homeland Security customers worldwide.
And finally, our Services business including Spacenet providing managed network services for business, government and residential customers in North America as well as our service businesses in Columbia and Peru. As part of this organizational change, Raysat Antenna Systems has been fully integrated into Gilat taking advantage of synergies in such areas as R&D, managerial, and corporate support function.
I believe the modified structure once fully implemented will allow us to be more efficient in how we conduct our business and attract customer buying. With that in mind, let me give you some highlights of our business activities in Q4. This past quarter we announced several key contract wins for our Commercial Satcom business. Most notably which we already mentioned in our previous quarterly results call is our strategic alliance with Rostelecom’s RTComm and Russian Government Institute NIIR for a Ka-band VSAT network in Russia.