zk1008648.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 August 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 August 10, 2010, announcing Registrant’s financial results for the quarter ending June 30, 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 August 10, 2010
By: /s/ Rachel Prishkolnik
 
        Rachel Prishkolnik
 
        Corporate Secretary

 
 
 

Gilat Announces Second Quarter 2010 Results

Petah Tikva, Israel, August 10, 2010 - Gilat Satellite Networks Ltd. (Nasdaq:GILT), a worldwide leader in satellite networking technology, solutions and services, today reported its results for the quarter ending June 30, 2010.

Revenues for the second quarter of 2010 were $51.8 million compared to $56.0 million in the same period of 2009. Net loss for the second quarter of 2010 was $1.3 million or $0.03 per diluted share compared to a net loss of $1.2 million, or $0.03 per diluted share in the second quarter of 2009.

Revenues for the six month period ended June 30, 2010 were $108.9 million compared to $116.8 million in the same period of 2009. Net loss for the six month period ended June 30, 2010 was $0.7 million, or $0.02 per diluted share compared to net loss of $1 million or $0.02 per diluted share in the same period of 2009.

Gilat's Chief Executive Officer and Chairman of the Board Amiram Levinberg said, "Q2 was highlighted by the completion of our acquisition of RaySat Antenna Systems and the signing of a definitive agreement to acquire the antenna research and design center in Bulgaria. These acquisitions are part of our focus on the defense and military markets. In the second quarter we were able to increase our cash, and our bookings grew sequentially compared to Q1 2010 and to the comparable quarter of 2009, which leads us to be cautiously optimistic for the second half of the year".

Regarding the announcement on the settlement with the purchasers who were to close on a Merger Agreement in 2008 Mr. Levinberg commented, "With this legal dispute behind us, we can focus our full management attention on implementing our strategy and on our ongoing business".

LINK TO THE FINANCIAL STATEMENTS

Recent Announcements:
- Gilat announces settlement of litigation related to the termination of the 2008 Merger Agreement. The settlement agreements will result in the termination of all court proceedings filed by Gilat against each of the defendants, as well as general mutual waivers and releases provided by all parties, including the entities formed by the defendants to purchase Gilat.
 - Gilat chosen to provide broadband satellite networks for homeland security in Asia. The networks are being used to deliver data, video and voice applications for homeland security and border patrol forces in addition to other defense requirements. The networks incorporate a video surveillance application and various quick-deploy transportable units.

 - Vietnam Telecom International (VTI) selects Gilat for broadband satellite network deployment. The new SkyEdge II system will operate via VINASAT-1, the first Vietnamese communications satellite, and will combine both C-band and Ku-band capacity within the same network using the SkyEdge II multi-transponder capability.

 - Gilat to provide satellite communications equipment for SchoolNet project expansion in Ethiopia. SchoolNet is a satellite-based network which provides Internet connectivity as well as TV- broadcast educational content to secondary schools across Ethiopia. The network has successfully enabled students in hundreds of rural schools to enjoy equal learning opportunities like those of their colleagues in urban schools throughout the country.

 
 
 
 
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) 407-2553 and international participants should dial in at (972) 3-918-0610. The presentation may be accessed through the Company's website at http://www.gilat.com/ prior to the call. The call will also be available as a Webcast on the Company's website at http://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 second 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 SkyEdgeTM 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 http://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.

###

Gilat Media Contact:
Robert Bell
Phone: +972-3-925-2472
email: robert@gilat.com
 
 
 
 
 
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
US dollars in thousands
 
   
June 30,
    
December 31,
  
   
2010
    
2009
  
   
Unaudited
        
             
   ASSETS
            
             
CURRENT ASSETS:
            
   Cash and cash equivalents
     127,309       122,672  
   Short-term bank deposits
     22,593       31,729  
   Available-for-sale marketable securities
     4,674       -  
   Short-term restricted cash
     1,377       1,782  
   Restricted cash held by trustees
     6,669       2,137  
   Trade receivables, net
     43,925       45,597  
   Inventories
     13,721       13,711  
   Other current assets
     21,389       19,068  
   Total current assets
     241,657       236,696  
                 
LONG-TERM INVESTMENTS AND RECEIVABLES:
                
   Long-term restricted cash
     4,392       4,896  
   Severance pay fund
     9,435       9,912  
   Long-term trade receivables, receivables in respect of capital
                
      leases and other receivables
     1,101       2,204  
Total long-term investments and receivables
     14,928       17,012  
                 
PROPERTY AND EQUIPMENT, NET
     99,201       100,532  
                 
INTANGIBLE ASSETS AND DEFERRED CHARGES, NET
     2,651       2,988  
                 
TOTAL ASSETS
     358,437       357,228  
 
 
 
 
 
 
 
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
US dollars in thousands
 
   
June 30,
    
December 31,
  
   
2010
    
2009
  
   
Unaudited
        
             
   LIABILITIES AND EQUITY
            
             
CURRENT LIABILITIES:
            
   Current maturities of long-term loans and convertible notes
     5,174       5,220  
   Trade payables
     16,918       16,838  
   Accrued expenses
     19,742       20,067  
   Short-term advances from customer, held by trustees
     6,669       2,137  
   Other current liabilities
     28,576       28,154  
                 
   Total current liabilities
     77,079       72,416  
                 
LONG-TERM LIABILITIES:
                
   Accrued severance pay
     9,775       10,011  
   Long-term loans, net
     8,795       9,830  
   Accrued interest related to restructured debt
     871       1,176  
   Convertible subordinated notes
     14,799       15,220  
   Other long-term liabilities
     15,387       16,280  
                 
   Total long-term liabilities
     49,627       52,517  
                 
COMMITMENTS AND CONTINGENCIES
                
                 
EQUITY:
                
   Share capital - ordinary shares of NIS 0.2 par value
     1,842       1,832  
   Additional paid in capital
     864,072       863,337  
   Accumulated other comprehensive income
     723       1,341  
   Accumulated deficit
     (634,906 )     (634,215 )
                 
Total equity
     231,731       232,295  
                 
TOTAL LIABILITIES AND EQUITY
     358,437       357,228  
 
 
 
 
 
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except per share data)
 
    Six months ended     Three months ended  
    June 30,     June 30,  
   
2010
    
2009
    
2010
    
2009
  
   
Unaudited
    
Unaudited
    
Unaudited
    
Unaudited
  
                         
Revenues
     108,903       116,829       51,791       56,003  
Cost of revenues
     72,413       81,851       34,938       38,979  
Gross profit
     36,490       34,978       16,853       17,024  
Research and development expenses:
                                
Expenses incurred
     9,472       8,095       4,749       4,086  
Less - grants
     1,485       1,185       1,270       950  
      7,987       6,910       3,479       3,136  
Selling, marketing, general and administrative expenses
     29,856       28,510       14,783       14,380  
Operating loss
     (1,353 )     (442 )     (1,409 )     (492 )
Financial income (expenses), net
     10       (227 )     (59 )     (568 )
Other income
     -       199       -       -  
Loss before taxes on income
     (1,343 )     (470 )     (1,468 )     (1,060 )
Taxes on income (tax benefit)
     (652 )     495       (135 )     143  
Net loss
     (691 )     (965 )     (1,333 )     (1,203 )
                                 
Basic net loss per share
     (0.02 )     (0.02 )     (0.03 )     (0.03 )
Diluted net loss per share
     (0.02 )     (0.02 )     (0.03 )     (0.03 )
                                 
Weighted average number of shares used in
                                
computing net loss per share
                                
Basic
     40,356       40,102       40,403       40,133  
Diluted
     40,356       40,102       40,403       40,133  
 
 
 
 
 
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)
 
 
    Six months ended     Three months ended  
    June 30,     June 30,  
   
2010
    
2009
    
2010
    
2009
  
   
Unaudited
    
Unaudited
    
Unaudited
    
Unaudited
  
                         
GAAP operating loss
     (1,353 )     (442 )     (1,409 )     (492 )
Non-cash stock-based compensation expenses (1)
     734       449       402       221  
Non-GAAP operating income (loss)
     (619 )     7       (1,007 )     (271 )
                                 
GAAP net loss
     (691 )     (965 )     (1,333 )     (1,203 )
Non-cash stock-based compensation expenses (1)
     734       449       402       221  
Non-GAAP net income (loss)
     43       (516 )     (931 )     (982 )
                                 
GAAP Loss per share (diluted)
     (0.02 )      (0.02 )      (0.03 )      (0.03 ) 
Non-cash stock-based compensation expenses (1)
     0.02       0.01       0.01       0.01  
Non-GAAP Loss per share (diluted)
     -       (0.01 )     (0.02 )      (0.02 ) 
                                 
Non-cash stock-based compensation expenses:
                                
Cost of Revenues
     134       77       67       37  
Research and development
     78       37       43       18  
Selling, general, marketing and administrative
     522       335       292       166  
      734       449       402       221  
 
 
 
 
 
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
US dollars in thousands
 
    Six months ended     Three months ended  
    June 30,     June 30,  
   
2010
    
2009
    
2010
    
2009
  
   
Unaudited
    
Unaudited
    
Unaudited
    
Unaudited
  
                         
Cash flows from operating activities:
                        
Net loss
     (691 )     (965 )     (1,333 )     (1,203 )
Adjustments required to reconcile net loss to net
cash provided by (used in) operating activities:
                                
Depreciation and amortization
     6,218       7,259       3,205       3,804  
Gain from redemption of convertible notes
     -       (22 )     -       (22 )
Gain from the sale of an investment accounted for at cost
     -       (199 )     -       -  
Stock-based compensation related to employees
     734       449       402       221  
Accrued severance pay, net
     241       (494 )     127       (201 )
Accrued interest and exchange rate differences on
                                
short and long-term restricted cash, net
     19       155       168       (108 )
Accrued interest and exchange rate differences on
                                
    marketable securities and short term bank deposits, net
     110       (277 )     171       (357 )
Exchange rate differences on long-term loans
     (915 )     81       (495 )     366  
Exchange rate differences on loans to employees
     1       -       1       (5 )
Capital loss from disposal of property and equipment
     245       64       238       59  
Deferred income taxes
     6       215       (5 )     181  
Decrease in trade receivables, net
     1,602       8,835       10,384       7,317  
Decrease in other assets (including short-term, long-term
                                
   and deferred charges)
     (2,143 )     7,082       (2,356 )     (1,027 )
Decrease (increase) in inventories
     (871 )     6,152       1,036       4,876  
Increase (decrease) in trade payables
     92       (13,663 )     1,106       (6,977 )
Decrease in accrued expenses
     (626 )     (3,359 )     (1,827 )     (1,652 )
Increase (decrease) in advances from customer, held
                                
   by trustees, net
     4,532       (10,963 )     5,813       (8,065 )
Increase (decrease) in other accounts payable and other long term liabilities
     (274 )     (6,915 )     1,303       1,802  
Net cash provided by (used in) operating activities
     8,280       (6,565 )     17,938       (991 )
 
 
 
 
 
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
US dollars in thousands
 
    Six months ended     Three months ended  
    June 30,     June 30,  
   
2010
    
2009
    
2010
    
2009
  
   
Unaudited
    
Unaudited
    
Unaudited
    
Unaudited
  
Cash flows from investing activities:
                        
Purchase of property and equipment
     (3,725 )     (1,873 )     (2,732 )     (1,081 )
Proceeds from sale of an investment accounted for at cost
     -       199       -       -  
Purchase of held-to-maturity marketable securities and deposits
     (30,693 )     (74,077 )     -       (13,265 )
Proceeds from held-to-maturity marketable securities and deposits
     39,877       73,212       31,924       13,929  
Purchase of available-for-sale marketable securities
     (4,804 )     -       -       -  
Loans to employees, net
     1       12       2       15  
Investment in restricted cash held by trustees
     (11,110 )     -       (9,706 )     -  
Proceeds from restricted cash held by trustees
     6,555       10,848       3,768       8,211  
Investment in restricted cash (including long-term)
     (421 )     (87 )     (34 )     (37 )
Proceeds from restricted cash (including long-term)
     1,332       998       1,262       801  
Net cash provided by (used in) investing activities
     (2,988 )     9,232       24,484       8,573  
                                 
Cash flows from financing activities:
                                
Early redemption and repyament of convertible notes
     (420 )     (45 )     (420 )     (45 )
Issuance of restricted stock units
     10       6       5       3  
Repayment of long-term loans
     (166 )     (167 )     (79 )     (86 )
Net cash used in financing activities
     (576 )     (206 )     (494 )     (128 )
                                 
Effect of exchange rate changes on cash and cash equivalents
     (79 )     503       (20 )     488  
                                 
Increase in cash and cash equivalents
     4,637       2,964       41,908       7,942  
                                 
Cash and cash equivalents at the beginning of the period
     122,672       73,916       85,401       68,938  
                                 
Cash and cash equivalents at the end of the period
     127,309       76,880       127,309       76,880  
 
 
 
 
 
GILAT SATELLITE NETWORKS LTD.
CONDENSED EBITDA
US dollars in thousands
 
    Six months ended     Three months ended  
    June 30,     June 30,  
   
2010
    
2009
    
2010
    
2009
  
   
Unaudited
    
Unaudited
    
Unaudited
    
Unaudited
  
                         
Operating loss
     (1,353 )     (442 )     (1,409 )     (492 )
Add:
                                
Non-cash stock-based compensation expenses
     734       449       402       221  
Deprecation and amortization
     6,218       7,259       3,205       3,804  
EBITDA
     5,599       7,266       2,198       3,533