Gilat Announces 2003 Second-Quarter Results.Business Editors/High-Tech Writers PETAH TIKVA, Israel--(BUSINESS WIRE)--Aug. 14, 2003 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): -- Reports quarterly revenues of US$52 Million -- Company streamlines organization and improves cost efficiency -- Solid deal flow during first half of year Gilat Satellite Networks Ltd. (Nasdaq:GILTF), a worldwide leader in satellite networking technology, today reported its results for the quarter ended June June: see month. 30, 2003. Revenues were US$52.1 million for the second quarter of 2003, an increase of US$0.5 million over the US$51.6 million result for the same period in 2002, as well as an increase of US$1.0 million over the US$51.1 in the first quarter of 2003. 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 second quarter was US$31.5 million and net loss was US$36.2 million or US$2.79 per share. The results above include a total of US$21 million in write-offs associated with Statement of Accounting Standard #144 "Accounting for the Impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. or Disposal of Lived Assets" - SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System #144, (US$18.9 million), and charges relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the company's restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). process (US$2.1 million). The total cash and cash equivalents during the quarter decreased by US$2.5 million leaving the Company with a stable cash position. During the quarter, a new management team and Board of Directors was elected, headed by Shlomo Shlomo, meaning peace, is a common Hebrew male given name. The following individuals are often referred to only by the name Shlomo:
Management is optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that the combination of the new strategy it is currently finalizing and putting into place, as well as the steps taken to streamline the Company's cost structure and improve operations, together with leveraging Gilat's strong technology and competitive position in the global marketplace, will lead to improved economies and strengthen the Company's position as one of the industry leaders. The Company announces that Erez Antebi, COO (Cell Of Origin) See mobile positioning. of the Company, has resigned effective September 15, 2003. The Company also announces the resignation of board member, Mr. Doron Steiger. Second Quarter Events Gilat announces Alcatel subsidiaries join SATLYNX, R&D agreement with SES Global, a major agreement in Bulgaria, an important deployment in Australia and a continued strong deal flow for its Spacenet subsidiary. During the quarter, the Company announced a series of agreements that contributed to the Company's continued strong deal flow and demonstrated the growing confidence in the Company and in its technology. -- In June, Gilat and SES Global, the joint founding shareholders of SATLYNX, Europe's premier 2-way satellite broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). services provider, announced that Alcatel Space and SkyBridge LP, subsidiaries of Alcatel, have joined the company and made an investment which will yield up to a 17.9% stake in the venture. -- Separately, SES Global and Gilat also executed an agreement to fund the development of a low cost, Ka-band version of Gilat's popular Skystar 360E family product line. -- Also in Europe, Gilat signed an important agreement with the Bulgarian company TRANSAT to deploy a Skystar 360E hub and 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 with sites throughout Bulgaria. The network will provide data connectivity to 450 gas stations, 17 corporate regional branches, 30 bank branches and other applications. -- Australia's major telecom Optus, was hired to run an IDL (1) (Interface Definition Language) A language used to describe the interface to a routine or function. For example, objects in the CORBA distributed object environment are defined by an IDL, which describes the services performed by the object and how the data network for the Australian Australian pertaining to or originating in Australia. Australian bat lyssavirus disease see Australian bat lyssavirus disease. Australian cattle dog a medium-sized, compact working dog used for control of cattle. government initiative to deliver education to small rural towns, isolated schools, and remote homesteads in New South Wales New South Wales, state (1991 pop. 5,164,549), 309,443 sq mi (801,457 sq km), SE Australia. It is bounded on the E by the Pacific Ocean. Sydney is the capital. The other principal urban centers are Newcastle, Wagga Wagga, Lismore, Wollongong, and Broken Hill. and the Northern Territory, using Gilat's Skystar 360E VSAT platform. Gilat is providing a 310-site, two-way satellite communications network The transmission channels interconnecting all client and server stations as well as all supporting hardware and software. to deliver broadband Internet See broadband. services to these rural communities, plus 540 more VSATs to Australia's world renowned 'School of the Air'. Spacenet Continues Strong Deal Flow -- Gilat's subsidiary, Spacenet, has been awarded a five-year contract by Rent-Way, Inc. to provide a two-way satellite-based IP network to all of Rent-Way's 750+ stores. Rent-Way is one of the nation's largest operators of rental-purchase stores. Rent-Way's Connexstar Enterprise network is designed to support a wide variety of services, including point-of-sale and inventory control applications, as well as Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the and intranet access. -- Spacenet has been selected by RTM (1) (RealTime Model) Refers to a system or architecture that performs operations in real time. See real time. (2) (Release/Released To M Restaurant Group Inc. to provide a broadband VSAT network to their Arby's restaurants and other quick service restaurant locations. The five-year commitment calls for Spacenet's Connexstar Enterprise service to be deployed at 825 restaurant locations for a range of applications including credit authorization The right or permission to use a system resource; the process of granting access. See access control. , point-of-sale and store polling as well as intranet-based back office applications. -- Spacenet signed an agreement with The Kroger Co. to provide remote VSAT and base-band hub technology for a nationwide two-way satellite network. The network will initially link multiple video studios with Fred Meyer grocery store locations through a broadband connection See broadband and wireless broadband. allowing high-speed Video on Demand (VoD) delivery and Voice over IP (VoIP) return for Interactive Distance Learning (IDL) and videoconferencing A real time video session between two or more users or between two or more locations. Although the first videoconferencing was done with traditional analog TV and satellites, inhouse room systems became popular in the early 1980s after Compression Labs pioneered digitized video systems applications. -- Spacenet has been chosen by Golden Corral Golden Corral is a family-style restaurant chain that features a large buffet and grill offering 150 hot and cold items, a carving station and their Brass Bell Bakery. It is a privately-held company headquartered in Raleigh, North Carolina, USA. Corporation to deploy the Connexstar CX-500 commercial-grade, broadband satellite service to its chain of Golden Corral family restaurants. This service will be used by Golden Corral to run a broad range of IP-based applications including high-speed credit authorization, point-of-sale polling and web-based, back-office applications. -- Spacenet has signed an agreement with leading auto parts Auto parts are components of automobiles. They mainly are, in alphabetic order (only car specific articles or articles with car section):
retailer Genuine Parts Company Genuine Parts Company (NYSE: GPC) is a Fortune 1000 company that was founded in 1928. Based in Georgia and Alabama, the company employees 31,700 people. [1] (GPC (1) A PC that uses the Linux-based gOS operating system. See gOS. (2) (GPC Group) Originally the Graphics Performance Characterization committee of the NCGA, the GPC Group is now part of Standard Performance Evaluation Corporation (SPEC) and oversees the following ) to provide a high-speed satellite communications network for its NAPA auto parts retail stores. GPC's network will utilize Connexstar Enterprise, a new variant variant /var·i·ant/ (var´e-ant) 1. something that differs in some characteristic from the class to which it belongs. 2. exhibiting such variation. var·i·ant adj. of Spacenet's popular Connexstar service. The agreement calls for Spacenet's VSAT service to be deployed at a minimum of 750 of GPC's more than 5,000 locations. -- Spacenet has also been selected by International Dairy Queen Dairy Queen (also known as DQ) is an ice-cream shop and fast-food restaurant franchise based in the United States and founded in 1940. For many years the franchise's slogan was "We treat you right!" In recent years, it has been changed to "DQ something different. , Inc. as its exclusive provider of satellite-based broadband connectivity for its restaurant brands, including Dairy Queen/Brazier(R) restaurants, throughout 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. . The Connexstar service is a key component of Dairy Queen's plans to enhance point-of-sale applications and link all franchise locations to corporate headquarters. About Gilat Satellite Networks Ltd. Gilat Satellite Networks Ltd., with its global subsidiaries Spacenet Inc., 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. and rStar Corporation (RSTRC), 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. Gilat, headquartered in Petah Tikva, Israel, markets the Skystar Advantage(R), DialAw@y IP(TM), FaraWay far·a·way adj. 1. Very distant; remote. 2. Abstracted; dreamy: a faraway look. faraway Adjective 1. very distant 2. (TM), Skystar 360E(TM) and SkyBlaster (a) 360 VSAT products in more than 70 countries around the world. Gilat provides satellite-based, end-to-end end-to-end a pattern of anastomosis in which severed ends are matched and united, in contrast with other patterns such as end-to-side or side-to-side. Usually applied to anastomosis of the intestine. 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 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. 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 SES GLOBAL, and Alcatel Space and SkyBridge LP, subsidiaries of Alcatel, in SATLYNX, a provider of two-way satellite broadband services See broadband and broadband service provider. in Europe. Skystar Advantage, Skystar 360E, DialAw@y IP and FaraWay are trademarks or registered trademarks of Gilat Satellite Networks Ltd. or its subsidiaries. Visit Gilat at www.gilat.com. ((a) SkyBlaster is marketed in the United States by StarBand Communications Inc. under its own brand name.) 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 Sheet
US dollars in thousands
-----------------------
June 30 December 31
--------- -----------
2003 2002
--------- -----------
Unaudited Audited
--------- -----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 44,858 48,072
Short-term bank deposits 1,894 1,663
Short-term restricted cash 13,659 12,151
Restricted cash held in trustees 18,241
Trade receivables, (net of allowance for
doubtful accounts) 42,420 55,459
Inventories 54,074 74,978
Other accounts receivable and prepaid expenses 33,061 47,113
--------- -----------
Total current assets 208,207 239,436
-------------------- --------- -----------
LONG-TERM INVESTMENTS AND RECEIVABLES:
Long-term restricted cash 9,411 10,733
Severance pay fund 9,260 7,664
Long-term trade receivables and other
receivables, net 43,973 32,427
--------- -----------
62,644 50,824
--------- -----------
PROPERTY AND EQUIPMENT, NET 143,701 162,905
--------- -----------
INTANGIBLE ASSETS AND DEFERRED CHARGES, NET 10,458 21,049
--------- -----------
Total assets 425,010 474,214
------------ ========= ===========
June 30 December 31
--------- -----------
2003 2002
LIABILITIES AND SHAREHOLDERS' EQUITY --------- -----------
(DEFICIENCY) Unaudited Audited
--------- -----------
CURRENT LIABILITIES:
Short-term bank credit 332 1,826
Current maturities of long-term loans 2,510 8,197
Trade payables 29,178 26,507
Accrued expenses 48,090 37,592
Short-term advances from customer held in
trustees 6,819
Other current liabilities 38,156 37,787
--------- -----------
Total current liabilities 125,085 111,909
------------------------- --------- -----------
LONG-TERM LIABILITIES:
Accrued severance pay 9,878 8,412
Long-term advances from customer held in
trustees 11,815
Long-term loans, net of current maturities 115,769 145,140
Accrued interest related to restructured debt 50,154
Other long-term liabilities 20,298 19,193
Convertible subordinated notes 90,529 358,648
--------- -----------
Total long-term liabilities 298,443 531,393
--------------------------- --------- -----------
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST 5,048 3,827
--------- -----------
SHAREHOLDERS' EQUITY (DEFICIENCY):
Share capital - Ordinary shares of NIS 0.01
par value 570
Additional paid in capital 671,074 617,867
Accumulated other comprehensive loss (6,607) (8,165)
Accumulated deficit (668,603) (782,617)
--------- -----------
Total shareholders' equity (deficiency) (3,566) (172,915)
--------------------------------------- --------- -----------
Total liabilities and shareholders' equity
(deficiency) 425,010 474,214
------------------------------------------ ========= ===========
Gilat Satellite Networks Ltd.
Condensed Consolidated Income (Loss) Statements
US dollars in thousands
-----------------------
Six months ended Three months ended
June 30 June 30
------------------- -------------------
2003 2002 2003 2002
---------- -------- ---------- --------
Unaudited Unaudited
------------------- -------------------
Revenues 103,205 123,659 52,103 51,612
Cost of Revenues 81,955 86,061 39,347 36,069
Inventory write off 3,185 0
---------- -------- ---------- --------
Gross profit 18,065 37,598 12,756 15,543
---------- -------- ---------- --------
Research and
development costs:
Expenses incurred 12,035 14,989 6,051 7,631
Less - grants 2,010 2,012 982 728
---------- -------- ---------- --------
10,025 12,977 5,069 6,903
---------- -------- ---------- --------
Selling, general and
administrative expenses 37,014 39,956 17,997 19,593
Provision for
doubtful accounts 1,659 12,610 140 12,000
Restructuring charges 2,164 2,164
Impairment of tangible and
intangible assets 23,851 18,851
---------- -------- ---------- --------
Operating income (loss) (56,648) (27,945) (31,465) (22,953)
---------- -------- ---------- --------
Financial (income) expenses -
net 3,620 9,830 720 4,962
Gain from
restructuring of debt (181,093)
---------- -------- ---------- --------
Income (loss) before
taxes on income 120,825 (37,775) (32,185) (27,915)
---------- -------- ---------- --------
Taxes on (income)
expenses 7,952 367 2,424
---------- -------- ---------- --------
Income (loss) after
taxes on income 112,873 (38,142) (34,609) (27,915)
---------- -------- ---------- --------
Share in losses (profits) of
associated companies (2,332) 10,809 68 8,067
Minority Share in losses of a
subsidiary 1,191 (1,735) 1,557 (747)
---------- -------- ---------- --------
Net income (loss) from
continuing operations 114,014 (47,216) (36,234) (35,235)
---------- -------- ---------- --------
Loss from discontinued
operations 1,439 509
---------- -------- ---------- --------
Net income (loss) 114,014 (48,655) (36,234) (35,744)
========== ======== ========== ========
Earnings per share (in US dollars)
----------------------------------
Basic 13.90 (40.37) (2.79) (30.13)
========== ======== ========== ========
Fully
Diluted 13.17 (40.37) (2.79) (30.13)
========== ======== ========== ========
Weighted average number
of shares used in
computation of earnings
per share (in thousands)
------------------------
Basic 8,204 1,169 12,988 1,169
========== ======== ========== ========
Fully
Diluted 8,721 1,169 12,988 1,169
========== ======== ========== ========
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