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Gilat Announces Second Quarter 2015 Results

Gilat reiterates Revenue management objectives
and modifies down EBITDA management objectives for 2015

Petah Tikva, Israel – August 12, 2015 – Gilat Satellite Networks Ltd. (NASDAQ, TASE: GILT), a worldwide leader in satellite networking technology, solutions and services, today reported its results for the second quarter ended June 30, 2015.

Key Financial Updates:

  • Revenues for the second quarter of 2015 were $44.3 million compared to $45.2 million in the first quarter of 2015 and $54.1 million in the comparable period of 2014.
  • EBITDA for the second quarter of 2015 was a loss of $2.5 million compared to an income of $0.2 million in the first quarter of 2015 and an income of $3.9 million in the comparable period of 2014.
  • Cash balances, including restricted cash, net of short-term bank credits, increased by $42.4 million compared to December 31, 2014, resulting in a cash balance of $95.9 million as of June 30, 2015.
  • Modified management objectives for 2015: reiterated revenues objective to between $250 to $260 million and modified EBITDA objective to between $20 to $21 million.

Revenues for the second quarter of 2015 were $44.3 million, compared to $54.1 million for the same period in 2014.

On a non-GAAP basis, operating loss was $5.2 million in the second quarter of 2015 as compared to an operating income of $1.5 million in the comparable quarter of 2014.

On a GAAP basis, operating loss was $7.2 million in the second quarter of 2015 as compared to an operating loss of $0.5 million in the comparable quarter of 2014.

On a non-GAAP basis, net loss for the quarter was $7.1 million or $0.16 per diluted share compared to net income of $0.6 million or $0.01 per diluted share in the same quarter of 2014.

On a GAAP basis, net loss for the quarter was $9.1 million or a loss of $0.21 per diluted share compared to a net loss of $1.4 million or a loss of $0.03 per diluted share in the same quarter of 2014.

EBITDA for the second quarter of 2015 was a loss of $2.5 million compared with an income of $3.9 million in the comparable period in 2014.

“The second quarter and the remainder of 2015 are negatively impacted by two main factors. The first is the weaker than expected performance of our Defense sector, mainly resulting from delayed orders from the US DOD and other clients, coupled with lower than expected margins. The second factor is the lower than expected performance of the Colombia Kioscos project, coupled with the sharp devaluation of the Colombian Peso.

“However, we see a stronger second half which will accelerate in Q4 due to growth in all sectors, mainly in our projects in Peru,” said Dov Baharav, Interim CEO and Chairman of the Board of Gilat.

“I am very proud to announce a key development in our HTS business. Gilat is partnering with leading China Satellite Communication Companies to provide multiple network segments and VSAT terminals for the first Ka HTS multi-spot beam satellite ChinaSat 16. This agreement presents a major opportunity to develop a long term substantial relationship with our new partners in China to drive further potential business,” Mr. Baharav highlighted.

“With the reassurance of our growth drivers’ strength, namely HTS, Cellular Backhaul, airborne mobility and the exceptionally large funnel of deals we have, we are optimistic about the business outlook for 2016 and beyond for Gilat,” concluded Mr. Baharav

Key Recent Announcements:

  • Bolivian Space Agency Selects Gilat for its National VSAT Platform Enabling Comprehensive Connectivity Capabilities
  • Fixed VSAT operators can now take advantage of Inmarsat’s wholesale service, powered by Gilat Satellite Networks and Global Xpress
  • Gilat Presents Compelling Business Case for MNOs to Deploy Satellite Backhaul for their LTE Networks
  • Gilat Delivers Mission-Critical UAV Connectivity and Maximizes Payload with Comprehensive BLoS SATCOM Solutions

Conference Call and Webcast Details:
Gilat management will host a conference call today at 13:30 GMT / 09:30 EDT / 16:30 IDT to discuss the results. International participants are invited to access the call at (972)3-918-0664, and US-based participants are invited to access the call by dialing (1)888-281-1167. A replay of the conference call will be available beginning at approximately 16:00 GMT/ 12:00 EDT/ 19:00 IDT today, until 16:00 GMT/ 12:00 EDT/ 19:00 IDT August 15, 2015. International participants are invited to access the call at (972)3-925-5921, and US-based participants are invited to access the call by dialing (1)877-456-0009. A replay of the call may also be accessed as a webcast via Gilat’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 are unaudited. To supplement the consolidated financial 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, operating 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
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 Peru and Colombia.

With over 25 years of experience, and over a million products shipped to more than 90 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. Gilat’s controlling shareholders are the FIMI Private Equity Funds. 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.

Contact:

Gilat Satellite Networks
Joelle Inowlocki
JoelleI@gilat.com

KCSA Strategic Communications
Phil Carlson, Vice President
(212) 896-1233
pcarlson@kcsa.com