Printer Friendly
The Free Library
23,375,127 articles and books


Gilat Announces 2002 First-Quarter Results.

Business/High Tech Editors

PETAH TIKVA, Israel--(BUSINESS WIRE)--May 14, 2002

Gilat Satellite Networks Ltd. (Nasdaq:GILTF)

Quarterly Highlights Included European Joint Venture with SES

GLOBAL and Alcatel Space, Tata Teleservices Contract in India and

BASF, Telesat Contracts in North America

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 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), 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 in results from the fourth quarter of 2001, in accordance 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.

As is required of many publicly traded companies 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

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 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 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 (SOHO) 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, Gilat's Spacenet subsidiary was selected by BASF Corporation to provide a Gilat 360E broadband VSAT 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 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 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 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 network to serve communities throughout the southern Indian state of Andhra Pradesh.

Gilat will discuss its first-quarter 2002 results on a conference call today, beginning at 10:30 a.m. EST. The event will also be broadcast live over the Internet and can be accessed by all interested parties, using either Windows Media or Real Media software, at www.gilat.com. The Gilat web site contains a link for downloading 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, is a leading provider of telecommunications solutions based on Very Small Aperture Terminal (VSAT) satellite network technology -- with nearly 400,000 VSATs shipped worldwide. The Company provides satellite-based, end-to-end enterprise networking and rural telephony solutions to customers across six continents, 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. StarBand is based in McLean, Va. Skystar Advantage(R), DialAw@y IP(TM) and FaraWay(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 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 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.
COPYRIGHT 2002 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2002, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

 Reader Opinion

Title:

Comment:



 

Article Details
Printer friendly Cite/link Email Feedback
Publication:Business Wire
Date:May 14, 2002
Words:1774
Previous Article:WUNI-TV Signs On For Nielsen People Meter Service In Boston.
Next Article:FlexTrade Systems Opens London Office; HSBC Investment Bank, London, Deploys FlexTRADER.
Topics:



Related Articles
Gilat Satellite Networks Announces Revenues and Gross Margin Substantially in Line with Guidance and Provides Information on Second Quarter...
Gilat Reports Results for the Second Quarter and First Half of 2001.
Gilat Satellite Networks Announces Revenues Below Guidance for the Third Quarter, Provides Information on Charges and Revises Guidance for the Fourth...
Gilat's Spacenet Subsidiary to Serve 700 Long John Silver's Restaurants Nationwide With Broadband, Two-Way Satellite Communications Network.
Gilat Reports Third-Quarter 2001 Results.
Gilat Announces 2001 Fourth-quarter, Full-year Results.
Milberg Weiss Announces Class Action Suit Against Gilat Satellite Networks, Ltd.
Gilat Responds to Filing of Class Action Lawsuits.
Stull, Stull & Brody Announces Class Action Against Gilat Satellite Networks, Ltd.
India's Tata Teleservices Selects Gilat to Provide 1,000-Site Satellite Telephony Network; DialAw@y IP Network Will Provide Voice and Fax Services to...

Terms of use | Copyright © 2014 Farlex, Inc. | Feedback | For webmasters