Gilat Announces 2002 First-Quarter Results.Business/High Tech EditorsPETAH TIKVA, Israel--(BUSINESS WIRE)--May 14, 2002 Gilat Satellite Networks Gilat Satellite Networks is a publicly-traded Israeli company (NASDAQ: GILT. TASE) Gilat designs, develops and markets satellite and hybrid networking products, services and solutions to operators in 85 countries. Ltd. (Nasdaq:GILTF) Quarterly Highlights Included European Joint Venture with SES GLOBAL and Alcatel Space, Tata Teleservices Tata Teleservices Limited (TTSL) is part of the Tata Group of Companies, an Indian Conglomerate. It runs the brand name Tata Indicom in India in various telecom circles of India. The company forms part of the Tata Group's prescence in the Telecommunication Industry in India, along with Contract in India and BASF BASF Bar Association of San Francisco (since 1872; San Francisco, California) BASF Badische Anilin und Soda Fabrik (German chemical products company) BASF Builders Association of South Florida , Telesat Contracts in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. Gilat Satellite Networks Ltd. (Nasdaq:GILTF), a worldwide leader in satellite networking technology, today reported its results for the quarter ended March 31, 2002. Revenues for the first quarter were US$72 million. The Company's operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. for the first quarter was US$5.9 million and net loss was US$12.9 million or US$(0.55) per share. On a pro-forma basis, without the consolidation impact of rStar Corporation (Nasdaq:RSTR RSTR Restrict RSTR Request Security Token Response ), the Company reported an operating loss of US$3.4 million. The consolidation of rStar Corporation is expected to have minimal impact on operations going forward in 2002. Gilat Chairman and Chief Executive Officer Yoel Gat said, "Efforts to maintain solid deal flow and to cut our expenses yielded a positive effect on our operating results -- enabling us to meet our operating cost reduction goal for the quarter. We expect that this effort will result in positive cash flow in the second quarter." Gat added, "The quarter also yielded another significant Company milestone, our new partnership with SES GLOBAL and Alcatel Space -- two of Europe's most highly respected companies. This partnership creates a powerful new company in Europe and is an endorsement of Gilat's technology." The Company also announced it is creating a reserve in the amount of US$78 million related to a receivable from StarBand Communications Inc. This first-type event is a non-cash adjustment and will be reflected retroactively ret·ro·ac·tive adj. Influencing or applying to a period prior to enactment: a retroactive pay increase. [French rétroactif, from Latin in results from the fourth quarter of 2001, in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Financial Accounting Standard No. 5, Accounting for Contingencies. Recent developments in StarBand's relationship with one of its shareholders and commercial partners requires this accounting treatment due to the effect on StarBand's marketing efforts and cash flow. Gilat remains committed to the success of StarBand, however, it has eliminated its current balance sheet exposure Balance sheet exposure See: Accounting exposure. . As is required of many publicly traded companies publicly traded company A company whose shares of common stock are held by the public and are available for purchase by investors. The shares of publicly traded firms are bought and sold on the organized exchanges or in the over-the-counter market. this year, the Company is examining its goodwill in accordance with Financial Accounting Standard No. 142. The Company has not yet determined the effect, if any, on its earnings and financial position. Gilat's Spacenet subsidiary announces first wave of contracts for its new Connexstar(SM) business-grade satellite broadband service See broadband and broadband service provider. Gilat's U.S. subsidiary, Spacenet Inc., has signed the first group of contracts for its Connexstar business-grade satellite broadband service, which was introduced in January. With more than a dozen customers and three resellers announced today, Spacenet has firm commitments to deploy Connexstar at nearly 2,000 sites over the coming year -- with many more expected as these customers and resellers fulfill ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. the terms of their three-year Connexstar contracts. This very strong early adoption is a clear indication that Connexstar is well suited to the needs of small to medium-sized, multi-unit businesses and that there is a sizable siz·a·ble also size·a·ble adj. Of considerable size; fairly large. siz  a·ble·ness n. demand for the service.First-quarter highlights included European broadband joint venture and new contracts in North America and India The first three months of 2002 brought a high level of activity in several different business areas for Gilat. In Europe, Gilat joined with SES GLOBAL and Alcatel Space/SkyBridge to form a new company that will provide two-way satellite broadband communications services to enterprises, consumers and small office/home office See SOHO. (SOHO Soho (sōhō`, sə–), district of Westminster, London, England, known for its continental restaurants. Once a fashionable quarter, it became popular among writers and artists in the 19th cent. ) users. Gilat and Alcatel Space also reached an agreement in principle to form a strategic partnership that will focus on significant enhancements to and further development of the Gilat 360 broadband satellite platform. In the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Gilat's Spacenet subsidiary was selected by BASF Corporation to provide a Gilat 360E broadband VSAT (Very Small Aperture satellite Terminal) A small earth station for satellite transmission that handles up to 56 Kbits/sec of digital transmission. VSATs that handle the T1 data rate (up to 1.544 Mbits/sec) are called "TSATs. network at up to 3,000 sites to serve agricultural retailers and distributors nationwide. The satellite network will power a new BASF service to be called Harvest Partners Network(TM), which will bring high-speed Internet See broadband. access to rural locations that until now have had limited access to broadband connectivity. Harvest Partners Network subscribers will have nearly immediate access to in-depth market, weather, news and agronomy agronomy (əgrŏn`əmē), branch of agriculture dealing with various physical and biological factors—including soil management, tillage, crop rotation, breeding, weed control, and climate—related to crop production. information on the Harvest Partners Network web site. Those subscribers will also be able to use the satellite network for a wide range of retail back-office applications, such as credit authorization The right or permission to use a system resource; the process of granting access. See access control. and inventory management. Spacenet was also selected to provide Gilat 360E VSAT technology to power Telesat's new High Speed Internet Service in the United States and Canada. In India, Tata Teleservices selected Gilat to provide a 1,000-site DialAw@y IP(TM) fixed rural satellite telephony Meaning "sound over distance," it refers to electronically transmitting the human voice. In the beginning, telephony dealt only with analog signals in the circuit-switched networks of the telephone companies. network to serve communities throughout the southern Indian state of Andhra Pradesh Andhra Pradesh (än`drə prä`dāsh), state (2001 provisional pop. 75,727,541), 106,052 sq mi (275,608 sq km), SE India, on the Bay of Bengal. The capital is Hyderabad. . Gilat will discuss its first-quarter 2002 results on a conference call today, beginning at 10:30 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy . The event will also be broadcast live over the Internet and can be accessed by all interested parties, using either Windows Media Microsoft's audio and video framework for Windows, which embraces playback, encoding and streaming. Windows Media Player is the digital jukebox and media player that comes with every version of Windows. or Real Media software, at www.gilat.com. The Gilat web site contains a link for downloading downloading - download Real Player 8 software. About Gilat Satellite Networks Ltd. Gilat Satellite Networks Ltd., with its global subsidiaries Spacenet Inc., Gilat Europe and Gilat Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. , is a leading provider of telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. solutions based on Very Small Aperture Terminal (communications) Very Small Aperture Terminal - (VSAT) A kind of ground station used to contact a communications satellite such as INMARSAT. (VSAT) satellite network technology -- with nearly 400,000 VSATs shipped worldwide. The Company provides satellite-based, end-to-end enterprise networking The networking infrastructure in a large enterprise with multiple computer systems and networks of different types is extraordinarily complex. Due to the myriad of interfaces that are required, much of what goes on has little to do with the real data processing of the payroll and orders. and rural telephony solutions to customers across six continents Six Continents is a large retail PLC in UK which split into Six Continents Retail known as Mitchells and Butlers plc. The hotels and soft drinks business of Six Continents PLC is now known as InterContinental Hotels Group PLC. , and markets interactive broadband data services. Gilat is a joint venture partner, with EchoStar Communications Corp., Microsoft Corp. and ING Furman Selz Investments, in StarBand Communications Inc., America's first consumer, nationwide, always-on, two-way, high-speed satellite Internet service provider Internet service provider (ISP) Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. . StarBand is based in McLean, Va. Skystar Advantage(R), DialAw@y IP(TM) and FaraWay far·a·way adj. 1. Very distant; remote. 2. Abstracted; dreamy: a faraway look. faraway Adjective 1. very distant 2. (TM) are trademarks or registered trademarks of Gilat Satellite Networks Ltd. or its subsidiaries. Visit Gilat at www.gilat.com and StarBand at www.starband.com. Certain statements made herein that are not historical are forward-looking within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. The words "estimate", "project", "intend", "expect", "believe" and similar expressions are intended to identify forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . 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 (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and partners, inability to attract and retain qualified personnel, inability to protect the Company's proprietary technology and risks associated with Gilat's international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. 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 Satellite Networks Ltd.
Condensed Consolidated Balance Sheets
US dollars in thousands March 31 December 31
----------------------- -------------- ---------------
2002 2001
-------------- ---------------
Assets
------
Current assets:
--------------
Cash and cash equivalents(a) 81,978 97,325
Short-term bank deposits
and current maturities of
long-term bank deposits 3,433 12,900
Restricted cash 6,257 3,520
Accounts receivable:
Trade 102,252 105,299
Other 76,372 65,851
Inventories 115,632 123,372
-------------- ---------------
Total current assets 385,924 408,267
-------------------- -------------- ---------------
Investments and non-current
receivables:
--------------------------
Restricted cash 10,221 9,521
Severance pay fund 5,374 5,784
Investments in companies
and non-current receivables 96,616 95,891
-------------- ---------------
112,211 111,196
-------------- ---------------
Property, plant and equipment:
-----------------------------
Cost 348,621 346,826
Less - accumulated
----
depreciation & amortization 112,626 99,627
-------------- ---------------
235,995 247,199
-------------- ---------------
Other assets and
deferred charges - net 91,941 91,961
----------------------- -------------- ---------------
826,071 858,623
============== ===============
Liabilities and Shareholders'
Equity
---------------------------
Current liabilities:
-------------------
Short-term bank credit 4,705 4,664
Current maturities of long
term loans 44,106 25,224
Accounts payable and accruals:
Trade 42,619 46,927
Accrued expenses 42,935 51,737
Other 28,392 30,142
-------------- ---------------
Total current liabilities 162,757 158,694
-------------------------
Convertible subordinated notes 350,000 350,000
Accrued severance pay 8,343 8,831
Long term loans -
net of current maturities 117,639 136,073
Other long-term liabilities 16,355 17,066
Total liabilities 655,094 670,664
----------------- -------------- ---------------
Minority interest 9,698 10,639
----------------- -------------- ---------------
Shareholders' equity:
--------------------
Share capital and additional
paid in capital 617,555 617,443
Currency translation adjustment (8,952) (5,710)
Accumulated deficit (447,324) (434,413)
-------------- ---------------
161,279 177,320
-------------- ---------------
826,071 858,623
============== ===============
(a) Including rStar's cash and cash equivalents of $28.6 million and
$31.0 million as of March 31, 2002 and December 31, 2001,
respectively.
Gilat Satellite Networks Ltd.
Condensed Consolidated Income (Loss) Statements
Three Months ended Three Months ended
US dollars in thousands March 31 March 31
-----------------------
2002 2002 2001 2001
---- ---- ---- ----
Unaudited Unaudited Unaudited Unaudited
(rStar in (rStar (rStar in (rStar
the equity the equity
method)consolidated) method)consolidated)
---------- ------------ ----------- ------------
Pro-forma(b) US GAAP Pro-forma(b) US GAAP
---------- ------------ ----------- ------------
Revenues 72,047 72,047 100,300 100,300
--------
Cost of revenues 49,992 49,992 82,886 82,967
---------------- ---------- ---------- ---------- ----------
22,055 22,055 17,414 17,333
---------- ---------- ---------- ----------
Research and
development costs:
------------------
Expenses incurred 7,350 7,563 12,888 13,783
Less - grants 1,284 1,284 1,874 1,874
---- ---------- ---------- ---------- ----------
6,066 6,279 11,014 11,909
---------- ---------- ---------- ----------
Selling, general and
administrative expenses 19,380 21,698 48,452 51,795
------------------------
Restructuring charges
and other charges - - 9,994 9,994
--------------------- ---------- ---------- ---------- ----------
Operating income (loss) (3,391) (5,922) (52,046) (56,365)
---------------------- ---------- ---------- ---------- ----------
Financial income
(expenses) - net (4,778) (4,868) (2,605) (3,313)
---------------------- ---------- ---------- ---------- ----------
Income (loss) before
taxes on income (8,169) (10,790) (54,651) (59,678)
---------------------- ---------- ---------- ---------- ----------
Taxes on income
(expenses) (367) (367) - -
---------------- ---------- ---------- ---------- ----------
Income (loss) after
taxes on income (8,536) (11,157) (54,651) (59,678)
-------------------- ---------- ---------- ---------- ----------
Share in losses of
associated companies (4,375) (2,742) (3,982) (293)
---------------------
Minority Share in
losses of a subsidiary - 988 - 1,338
---------------------- ---------- ---------- ---------- ----------
Net income (loss) (12,911) (12,911) (58,633) (58,633)
----------------- ---------- ---------- ---------- ----------
Earnings per share
(in US dollars)
--------------
Basic
(0.55) (0.55) (2.51) (2.51)
========== ========== ========== ==========
Fully Diluted (0.55) (0.55) (2.51) (2.51)
========== ========== ========== ==========
Weighted average
number of shares
used in computation
of earnings per share
(in thousands)
---------------------
Basic 23,389 23,389 23,355 23,355
========== ========== ========== ==========
Fully Diluted 23,389 23,389 23,355 23,355
========== ========== ========== ==========
(b) Pro-forma to reflect the accounting for the investment in rStar as if it was in the equity method. |
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