Fourth quarter highlights: Revenue growth of 9% over third quarter 2012, EBITDA margin of 11% and $18.1 million cash generated from operating activities
Petah Tikva, Israel – February 13, 2013 – Gilat Satellite Networks Ltd. (NASDAQ, TASE: GILT), a worldwide leader in satellite networking technology, solutions and services, today reported its results for the fourth quarter and year ended December 31, 2012.
Revenues for the fourth quarter of 2012 were $97.4 million, compared to $93.6 million for the same period in 2011. Revenues for the year ended December 31, 2012 were $348.4 million, compared to $339.2 million in the year ended December 31, 2011.
On a GAAP basis, the Company had an operating loss in the fourth quarter of 2012 of $28.1 million compared to an operating loss of $15.2 million in the fourth quarter of 2011. On a GAAP basis, the Company had an operating loss for the year 2012 of $25.1 million, compared with an operating loss of $12.3 million in the prior year. The Company’s GAAP operating loss was mainly affected by a non-cash impairment of goodwill and other intangible assets in the amount of $31.9 million relating to Wavestream.
On a non-GAAP basis, operating income for the fourth quarter of 2012 was $6.6 million similar to the operating income in the fourth quarter of 2011. On a non-GAAP basis, operating income for the year ended December 31, 2012 was $16.8 million compared to $17.5 million in the full year 2011.
On a non-GAAP basis, net income for the fourth quarter was $7.7 million, or $0.18 per diluted share, compared to net income of $8.4 million, or $0.20 per diluted share, in the comparable period in 2011. Non-GAAP net income for 2012 was $16.0 million or $0.37 per diluted share, compared to net income of $15.9 million, or $0.37 per diluted share, in the comparable period in 2011.
EBITDA for the fourth quarter of 2012 reached $10.7 million compared with $10.8 million in the comparable period in 2011. EBITDA for the twelve months of 2012 reached $32.1 million compared with $33.5 million in the comparable period in 2011. Cash generated from operating activities was $18.1 million in the fourth quarter of 2012.
“We are very pleased with our overall numbers for the fourth quarter as well as year-end 2012, and our prospects going forward,” said Erez Antebi, Chief Executive Officer of Gilat. “This quarter was highlighted by a 9% revenue growth from the third quarter of 2012, EBITDA margin of 11% and over $18 million of cash generation from operating activities. With regards to Wavestream, we believe they will continue to grow in the future, as it has done over the last three quarters, both in revenue and profitability. However, the continuing pressure and ongoing uncertainties surrounding future spending on DoD budgets in the U.S., as well as other elements, have led us to extend our anticipated timeframe and moderate the forecasted pace of growing the Wavestream business. Therefore in accordance with ASC 350, we are taking this quarter a non-cash impairment of goodwill and other intangible assets charge related to Wavestream.”
“On the commercial side of the business, we continue to see a strong rate of implementation at NBN Co. in Australia, and new orders for our Ka CPE from several European ISPs as the SES Broadband Services consumer rollout was launched in mid-December. We closed several new Defense deals in the quarter and continue to expand our position as a leader in Satellite-on-the-Move technology as exemplified by our recent wins in the avionics industry. We have also closed several significant contracts in our Services Division with new and existing customers.”
Antebi concluded, “Looking forward into 2013, we will continue to focus on achieving revenue targets, increased profitability and improved cash generation. Our management objectives for 2013 are to generate revenues in the range of $350 million to $360 million with EBITDA margins of 9%, similar to what we achieved in 2012.”
Key Recent Announcements:
Conference Call and Webcast Details:
Gilat management will host a conference call today at 14:30 GMT/ 09:30 EST/ 16:30 IST (Israel Standard Time) to discuss the results. International participants are invited to access the call at (972) 3-918-0609, and US-based participants are invited to access the call by dialing (888) 668-9141. A replay of the conference call will be available beginning at approximately 17:00 GMT/ 12:00 EST/ 19:00 IST today, until 17:00 GMT/ 12:00 EST/ 19:00 IST February 15, 2013. 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) 295-2634. A replay of the call may also be accessed as a webcast via Gilat’s website at gilat.com and will be archived for 30 days.
(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 Gilat’s EBITDA before the impact of non-cash share-based payment charges, 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.
(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, 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 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.
David Leichner, Gilat Satellite Networks Ltd.
(972) 3 925 2321