Gilat Satellite Networks Ltd. (NasdaqGM:GILT), a worldwide leader
in satellite networking technology, solutions and services, today
reported its results for the quarter ending March 31, 2008.
Revenues for the first quarter of 2008 were $70.5 million, up from $68.0
million in the same period of 2007. Net income for the first quarter of
2008 was $4.6 million or $0.11 per diluted share, compared to a net
income of $4.9 million or $0.12 per diluted share in the first quarter
of 2007. These results include expenses related to the merger agreement
in the amount of $0.7 million.
For a detailed reconciliation of GAAP to non-GAAP financial information
and for more information regarding Gilat's use of non-GAAP financial
measures, please see the table titled “Reconciliation
between GAAP and non-GAAP statements of operations”
as well as the notes contained in this press release.
Gilat’s Chief Executive Officer and Chairman
of the Board Amiram Levinberg said, "Our first quarter results,
excluding expenses relating to the merger transaction, show an
improvement in year over year revenues and net income. Our new advanced
SkyEdge II platform is gaining market traction and has been chosen by
customers worldwide."
“On March 31, we entered into a definitive
merger agreement for the Company to be acquired by a consortium of
private equity investors. Under the terms of the agreement, Gilat
shareholders will receive $11.40 per share in cash. It is currently
anticipated that the transaction will be consummated by September 2008,
pending certain approvals. We believe that this transaction recognizes
the value of Gilat's strong market position and product portfolio, while
providing our shareholders with an attractive cash offer."
Recent Announcements
-- Gilat will provide Incomnet with a Gilat SkyEdge broadband satellite
communications network to serve end users throughout Mongolia. Incomnet
will use the new VSAT network to provide toll-quality telephony to rural
citizens, meeting its Universal Service Obligations.
-- Gilat has been selected by Synterra, one of Russia's largest
telecommunications operators, to provide a 1,000-site SkyEdge broadband
satellite network for use by Russian Post. Gilat was chosen for the
second phase of Russian Post's VSAT network following the successful
deployment of an initial SkyEdge network which covers approximately 750
Russian Post sites.
-- Gilat has begun deployment of a 1,500-site SkyEdge II broadband
satellite network for Axesat, one of Latin America's leading satellite
service providers. Axesat will use the Gilat SkyEdge II VSATs to provide
enterprises in Latin America with private networking services including
interactive data, broadband Internet access, and Voice over Internet
Protocol (VoIP). Axesat is a long time customer of Gilat, having
deployed Gilat 360e and SkyEdge networks in the past.
-- Spacenet signed a contract to provide IHG (InterContinental Hotels
Group) an upgraded satellite data network and managed network services
to 2,500 locations across the United States and Canada. IHG is one of
the world's largest hotel groups by number of rooms and operates seven
hotel brands including InterContinental Hotels & Resorts, Crowne Plaza,
Hotel Indigo, Holiday Inn, Holiday Inn Express, Staybridge Suites and
Candlewood Suites.
-- Gilat provided Petróleo Brasileiro S.A.
(Petrobras) a 500-site Gilat SkyEdge broadband network platform for
enterprise and offshore maritime applications. Petrobras is a
Brazilian-based international energy company, and is one of the fifteen
largest oil companies in the world. Petrobras is using the SkyEdge VSAT
network for a variety of interactive web, video, SCADA, and telephony
applications.
Gilat will host a conference call today with an accompanying slide
presentation at 9:00 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) 3-918-0692. The
presentation may be accessed through the Company’s
website at www.gilat.com prior to the
call. The call will also be available as a Webcast on the Company’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 for the first quarter of 2008
are unaudited. To supplement the consolidated financial statements
presented in accordance with GAAP, the Company presents Gilat’s
net income, EBITDA and earnings per diluted share, before the impact of
a non-cash impairment of long lived assets and before share-based
payment charge, which is the non-cash stock option expense as per SFAS
123 (R). 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.
(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 Company’s
Operating income and EBIDTA is presented in the attached summary
financial statements.
About Gilat Satellite Networks Ltd.
Gilat Satellite Networks Ltd. (NasdaqGM: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. Gilat’s 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 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.
