zk1008270.htm
FORM 6 – K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report on Foreign Issuer

Pursuant to Rule 13a – 16 or 15d – 16
of the Securities Exchange Act of 1934
 
For the Month of May 2010

Gilat Satellite Networks Ltd.
(Translation of Registrant’s Name into English)
 
Gilat House, Yegia Kapayim Street
Daniv Park, Kiryat Arye, Petah Tikva, Israel
(Address of Principal Corporate Offices)
 
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
 
Form 20-F  x   Form 40-F  o
 
Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
 
Yes o   No  x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):   N/A

 
 
 
 
Attached hereto is Registrant’s press release dated May 11, 2010, announcing Registrant’s financial results for the quarter ending March 31, 2010.
 
This report on Form 6-K is being incorporated by reference into the Registration Statement on Form F-3 (Registration No. 333-160683) and the Registration Statements on Form S-8 (Registration Nos. 333- 158476, 333-96630, 333-132649, 333-123410, 333-113932, 333-08826, 333-10092, 333-12466 and 333-12988).
 
Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
Gilat Satellite Networks Ltd.
  
 
(Registrant)
  
     
Dated May 12, 2010
By: /s/ Rachel Prishkolnik
  
 
        Rachel Prishkolnik
  
 
        Corporate Secretary
  

 
 
 

Gilat Announces First Quarter 2010 Results
 
Petah Tikva, Israel, May 11, 2010 – 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, 2010.

Revenues for the first quarter of 2010 were $57.1 million compared to $60.8 million for the same period of 2009.  Net income for the first quarter of 2010 was $0.6 million or $0.02 per diluted share compared to a net income of $0.2 million, or $0.01 per diluted share in the first quarter of 2009.

Gilat’s Chief Executive Officer and Chairman of the Board Amiram Levinberg said, "The quarter was highlighted by signing the definitive agreement to acquire Raysat Antenna Systems.  This acquisition is part of our focus on the defense and military markets and we hope to be able to close it by the beginning of the third quarter."
 
Recent Announcements:

 
-
Kazakhstan’s ASTEL is deploying a Gilat SkyEdge II broadband satellite network for corporate and government agency sites.  The new network includes two SkyEdge II satellite hub stations and several hundred SkyEdge II Access VSATs, in addition to the recently announced Gilat NetEdge Gateways.

 
-
Gilat is supplying a multinational broadband satellite network in Africa that will be used to provide gaming and lottery services to an initial 2,500 sites in several countries in West Africa, including, the Ivory Coast, DRC and Senegal.

 
-
Ethiopia’s ETC has chosen Gilat’s satellite network to provide broadband services to hundreds of sites.  The network will be used for enterprise applications and includes Gilat's SkyAbis cellular backhaul solution to extend the range of cellular services to remote regions.

 
-
Gilat was chosen by a major homeland security agency in Latin America to provide a turnkey broadband communications solution. The new network will be used for border control applications.

 
-
Gilat announced the appointment of Jaron Lotan to serve as Chief Operating Officer.  As COO Lotan will oversee all day-to-day business operations, from sales to implementation, for all of the Company’s businesses other than Spacenet Inc.

 
-
Gilat entered into a definitive agreement to acquire Raysat Antenna Systems, a leading SatCom On The Move antenna company.  The acquisition is part of Gilat's strategy to enter new military and defense markets.

 
-
Gilat and GVF announced a new VSAT installation training program for Gilat SkyEdge II broadband satellite networks.

 
 
 
 
 
-
Gilat announced integrated SatCom On The Move solutions with Orbit Technology Group.  The integrated solutions have already been successfully deployed, meeting the demanding requirements of customers.

 
-
Gilat is providing a SkyEdge II network to telecom services provider, Satcom Systems, which will be used for broadband Internet connectivity in Africa.  The network comprising a SkyEdge II hub located in Germany and hundreds of VSATs, will enable Satcom Systems to expand its services in West Africa.

 
-
Brazil’s Amazonian Protection System (SIPAM) is deploying a Gilat SkyEdge II broadband satellite communications network at more than 1,000 remote sites.  The SkyEdge II VSAT network will enable SIPAM to more effectively disseminate critical information to Amazonian states and cities and the dozens of institutions and isolated sites.

 
-
Spacenet and EchoStar provided satellite service and communications equipment to the American Red Cross for Haiti relief efforts following the devastating earthquake.

Gilat will host a conference call today with an accompanying slide presentation at 9:30 AM ET. 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) 3-918-0610. 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 2010 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 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. is a leading provider of products and professional services for satellite-based broadband communications networks worldwide. Gilat was founded in 1987 and has shipped over 750,000 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 a full line of high-performance VSATs under the SkyEdge™ and SkyEdge II Product Family. Gilat's wholly-owned subsidiary, Spacenet Inc., is a leading provider of managed services in North America to the business and government segments. For more information, please visit 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.

Investor Relations Contact:
Tom Watts
Watts Capital Partners, LLC
Tel: +1 (212) 735-8920
twatts@wattscapital.com
 
 
 
 
 
GILAT SATELLITE NETWORKS LTD.
        
CONDENSED CONSOLIDATED BALANCE SHEET
        
US dollars in thousands
        
 
             
   
March 31,
    
December 31,
  
   
2010
    
2009
  
   
Unaudited
        
             
ASSETS
            
             
CURRENT ASSETS:
            
Cash and cash equivalents
     85,401       122,672  
Short-term bank deposits
     54,530       31,729  
Available-for-sale marketable securities
     4,852       -  
Short-term restricted cash
     1,855       1,782  
Restricted cash held by trustees
     857       2,137  
Trade receivables, net
     54,326       45,597  
Inventories
     15,307       13,711  
Other current assets
     18,063       19,068  
   Total current assets
     235,191       236,696  
                 
LONG-TERM INVESTMENTS AND RECEIVABLES:
                
Long-term restricted cash
     5,140       4,896  
Severance pay fund
     10,061       9,912  
Long-term trade receivables, receivables in respect of capital leases and other receivables
     2,683       2,204  
Total long-term investments and receivables
     17,884       17,012  
                 
PROPERTY AND EQUIPMENT, NET
     99,018       100,532  
                 
INTANGIBLE ASSETS AND DEFERRED CHARGES, NET
     2,860       2,988  
                 
TOTAL ASSETS
     354,953       357,228  

 
 
 
 
GILAT SATELLITE NETWORKS LTD.
        
CONDENSED CONSOLIDATED BALANCE SHEET
        
US dollars in thousands
        
 
   
March 31,
    
December 31,
  
   
2010
    
2009
  
   
Unaudited
        
             
LIABILITIES AND EQUITY
            
             
CURRENT LIABILITIES:
            
Current maturities of long-term loans and convertible notes
     5,200       5,220  
Trade payables
     15,816       16,838  
Accrued expenses
     21,266       20,067  
Short-term advances from customer, held by trustees
     857       2,137  
Other current liabilities
     26,822       28,154  
                 
   Total current liabilities
     69,961       72,416  
                 
LONG-TERM LIABILITIES:
                
Accrued severance pay
     10,274       10,011  
Long-term loans, net
     9,343       9,830  
Accrued interest related to restructured debt
     1,176       1,176  
Convertible subordinated notes
     15,219       15,220  
Other long-term liabilities
     15,824       16,280  
                 
   Total long-term liabilities
     51,836       52,517  
                 
COMMITMENTS AND CONTINGENCIES
                
                 
EQUITY:
                
Share capital - ordinary shares of NIS 0.2 par value
     1,837       1,832  
Additional paid in capital
     863,670       863,337  
Accumulated other comprehensive income
     1,222       1,341  
Accumulated deficit
     (633,573 )     (634,215 )
                 
Total equity
     233,156       232,295  
                 
TOTAL LIABILITIES AND EQUITY
     354,953       357,228  
 
 
 
 
 
GILAT SATELLITE NETWORKS LTD.
        
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
      
U.S. dollars in thousands (except per share data)
        
 
   
Three months ended
March 31,
  
   
2010
    
2009
  
   
Unaudited
    
Unaudited
  
             
Revenues
     57,112       60,826  
Cost of revenues
     37,475       42,872  
Gross profit
     19,637       17,954  
Research and development expenses:
                
Expenses incurred
     4,723       4,009  
Less - grants
     215       235  
      4,508       3,774  
Selling, marketing, general and administrative expenses
     15,073       14,130  
Operating income
     56       50  
Financial income, net
     69       341  
Other income
     -       199  
Income before taxes on income
     125       590  
Taxes on income (tax benefit)
     (517 )     352  
Net income
     642       238  
                 
Basic net earnings per share
     0.02       0.01  
Diluted net earnings per share
     0.02       0.01  
                 
Weighted average number of shares used in computing net earnings per share
                
Basic
     40,309       40,071  
Diluted
     41,969       41,206  
 
 
 
 
 
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
March 31,
  
       
2010
    
2009
  
       
Unaudited
    
Unaudited
  
                 
   
GAAP operating income
     56       50  
   
Non-cash stock-based compensation expenses (1)
     332       228  
   
Non-GAAP operating income
     388       278  
                     
   
GAAP net income
     642       238  
   
Non-cash stock-based compensation expenses (1)
     332       228  
   
Non-GAAP net income
     974       466  
                     
   
GAAP Earnings per share (diluted)
     0.02       0.01  
   
Non-cash stock-based compensation expenses (1)
     -       -  
   
Non-GAAP Earnings per share (diluted)
     0.02       0.01  
                     
(1)  
Non-cash stock-based compensation expenses:
                
   
Cost of Revenues
     67       40  
   
Research and development
     35       19  
   
Selling, general, marketing and administrative
     230       169  
          332       228  
 
 
 
 
 
GILAT SATELLITE NETWORKS LTD.
              
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  
US dollars in thousands
              
 
   
Three months ended
March 31,
  
   
2010
    
2009
  
   
Unaudited
    
Unaudited
  
             
Cash flows from operating activities:
            
Net income
     642       238  
Adjustments required to reconcile net income to net cash used in operating activities:
                
Depreciation and amortization
     3,013       3,455  
Gain from the sale of an investment accounted for at cost
     -       (199 )
Stock-based compensation related to employees
     332       228  
Accrued severance pay, net
     114       (293 )
Accrued interest and exchange rate differences on short and long-term restricted cash, net
     (149 )     263  
Accrued interest and exchange rate differences on held-to-maturity marketable securities and short term bank deposits, net
     (61 )     80  
Exchange rate differences on long-term loans
     (420 )     (285 )
Exchange rate differences on loans to employees
     -       5  
Capital loss from disposal of property and equipment
     7       5  
Deferred income taxes
     11       34  
Decrease (increase) in trade receivables, net
     (8,782 )     1,518  
Decrease in other assets (including short-term, long-term and deferred charges)
     213       8,109  
Decrease (increase) in inventories
     (1,907 )     1,276  
Decrease in trade payables
     (1,014 )     (6,686 )
Increase (decrease) in accrued expenses
     1,201       (1,707 )
Decrease in advances from customer, held by trustees, net
     (1,281 )     (2,898 )
Decrease in other accounts payable and other long term liabilities
     (1,577 )     (8,717 )
Net cash used in operating activities
     (9,658 )     (5,574 )
 
 
 
 
 
GILAT SATELLITE NETWORKS LTD.
              
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  
US dollars in thousands
 
   
Three months ended
March 31,
  
   
2010
    
2009
  
   
Unaudited
    
Unaudited
  
Cash flows from investing activities:
            
Purchase of property and equipment
     (993 )     (792 )
Proceeds from sale of an investment accounted for at cost
     -       199  
Purchase of held-to-maturity marketable securities and deposits
     (30,693 )     (60,812 )
Proceeds from held-to-maturity marketable securities and deposits
     7,953       59,283  
Loans to employees, net
     (1 )     (3 )
Investment in restricted cash held by trustees
     (1,404 )     -  
Proceeds from restricted cash held by trustees
     2,787       2,637  
Investment in restricted cash (including long-term)
     (387 )     (50 )
Proceeds from restricted cash (including long-term)
     70       197  
Purchase of available-for-sale marketable securities
     (4,804 )     -  
Net cash provided by (used in) investing activities
     (27,472 )     659  
                 
Cash flows from financing activities:
                
Issuance of restricted stock units
     5       3  
Repayment of long-term loans
     (87 )     (81 )
Net cash used in financing activities
     (82 )     (78 )
                 
Effect of exchange rate changes on cash and cash equivalents
     (59 )     15  
                 
Decrease in cash and cash equivalents
     (37,271 )     (4,978 )
                 
Cash and cash equivalents at the beginning of the period
     122,672       73,916  
                 
Cash and cash equivalents at the end of the period
     85,401       68,938  
 
 
 
 
 
GILAT SATELLITE NETWORKS LTD.
    
CONDENSED EBITDA
    
US dollars in thousands
    
 
   
Three months ended
March 31,
  
   
2010
    
2009
  
   
Unaudited
    
Unaudited
  
             
Operating income
     56       50  
Add:
                
Non-cash stock-based compensation exepnses
     332       228  
Deprecation and amortization
     3,013       3,455  
EBITDA
     3,401       3,733