Edgar Filing: GILAT SATELLITE NETWORKS LTD

zk1516311.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 February, 2015

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 February 18, 2015, announcing Gilat’s Fourth Quarter and year end 2014 results.

We consent to the incorporation by reference of the GAAP financial information included herein, in the Registration Statements on Form F-3 (registration nos. 333-195680 and 333-174142) and registration statements on form S-8 (registration nos. 333-96630, 333-113932, 333-123410, 333-132649, 333-158476, 333-180552 and 333-187021).

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 February 18, 2015	By:	/s/ Yael Shofar
		Yael Shofar
		Corporate Secretary

Gilat Reports Significant Improvement in Results for the Fourth

Quarter and Full Year 2014

Significant improvement on all major operational parameters

2014 EBITDA grows 43% to $23.4 million

Continued growth in revenue and profitability expected for 2015

Petah Tikva, Israel – February 18, 2015 – Gilat Satellite Networks Ltd. (NASDAQ, TASE: GILT), a worldwide leader in satellite networking technology, solutions and services, today reported its results for the fourth quarter and year ended December 31, 2014.

Key Financial Updates:

Revenue for 2014 was $235.1 million compared to $234.9 million in 2013

EBITDA increased by 43% in 2014 to $23.4 million from $16.3 million in 2013

Non-GAAP operating income increased by 200% to $13.1 million in 2014, from $4.4 million in 2013

GAAP operating income was $5.0 million as compared to a loss of $4.1 million in 2013

Management objectives for 2015: continued growth to revenues between $250 to $260 million and EBITDA between $26 to $28 million

Revenues for the fourth quarter of 2014 were $73.1 million, compared to $55.7 million for the same period in 2013. Revenues for the year ended December 31, 2014 were $235.1 million, compared to $234.9 million in the year ended December 31, 2013.

On a non-GAAP basis, operating income was $7.5 million in the fourth quarter of 2014 as compared to an operating loss of $0.1 million in the comparable quarter of 2013. Operating income for 2014 on a non-GAAP basis was $13.1 million compared to operating income of $4.4 million in 2013.

On a GAAP basis, operating income was $5.5 million in the fourth quarter of 2014 as compared to an operating loss of $2.7 million in the comparable quarter of 2013. Operating income for 2014 on a GAAP basis was $5 million compared to operating loss of $4.1 million in 2013.

On a non-GAAP basis, net income for the quarter was $4.4 million or $0.1 per diluted share compared to net loss of $1.0 million or $0.02 per diluted share in the same quarter of 2013. Net income for 2014 on a non-GAAP basis was $7.4 million or $0.17 per diluted share compared to net loss of $1.1 million or $0.03 per diluted share in 2013.

On a GAAP basis, net income for the quarter was $2.4 million or $0.06 per diluted share compared to net loss from continuing operations of $3.6 million or $0.09 per diluted share in the same quarter of 2013. Net loss from continuing operations for 2014 on a GAAP basis was $0.7 million or $0.02 per diluted share compared to net loss from continuing operations of $9.6 million or $0.23 per diluted share in 2013.

EBITDA for the fourth quarter of 2014 reached $10.4 million compared with $2.5 million in the comparable period in 2013. EBITDA for the twelve months of 2014 reached $23.4 million compared with $16.3 million in the comparable period in 2013.

“2014 was a good year for Gilat, with significant improvement in all major operational parameters, most of all: profitability,” said Erez Antebi, CEO of Gilat. “Looking forward, we begin 2015 with a growth focused strategy and a strong product portfolio that enables us to position ourselves successfully in the growing markets, such as HTS, Mobility and Cellular Backhaul. We expect continued improvements in 2015, and our management objectives are to reach revenues between $250 and $260 million and EBIDTA between $26 to $28 million for the year. As in 2014, we expect the second half of 2015 to be significantly stronger than the first half.”

Key Recent Announcements:

Delnet International Corp. taps Gilat to provide cellular backhaul solution for SMART

Gilat Announces Appointment of Yuval Ronen as Chief Financial Officer

O3b Certifies Gilat’s meoEdge TDMA/SCPC Terminal

LATAM Telco Selects Gilat's High-Throughput Satellite Platform

Delnet Philippines Selects Gilat to Provide Enterprise VSAT Network Solution for PLDT

Uruguay's OpenSky Orders Gilat VSATs for ANTEL

Azercosmos and Gilat Sign Partnership Agreement to Offer Managed Services on Azerspace-1

Gilat Reports SkyEdge II-c Orders for SES’s Astra Connect Service

Conference Call and Webcast Details:

Gilat management will host a conference call today at 14:30 GMT / 09:30 EST / 16:30 IST (Israel Standard Time) to discuss the results. International participants are invited to access the call at (972) 3-918-0609, and US-based participants are invited to access the call by dialing (888) 668-9141. A replay of the conference call will be available beginning at approximately 17:00 GMT/ 12:00 EST/ 19:00 IST today, until 17:00 GMT/ 12:00 EST/ 19:00 IST February 20, 2015. International participants are invited to access the replay at (972) 3-925-5904, and US-based participants are invited to access the replay by dialing (888) 326-9310. A replay of the call may also be accessed as a webcast via Gilat’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 are unaudited. To supplement the consolidated financial statements presented in accordance with GAAP, the Company presents Gilat's EBITDA before the impact of non-cash share-based payment charges, depreciation and amortization, other income and other costs related to acquisition transactions. Non-GAAP presentations of net income, operating 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 ASC 718 (formerly SFAS 123(R)) and other costs related to acquisition transactions ('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 EBITDA is presented in the attached summary financial statements.

About Gilat

Gilat Satellite Networks Ltd (NASDAQ, TASE: GILT) is a leading provider of products and services for satellite-based broadband communications. Gilat develops and markets a wide range of high-performance satellite ground segment equipment and VSATs, with an increasing focus on the consumer and Ka-band market. In addition, Gilat enables mobile SOTM (Satellite-on-the-Move) solutions providing low-profile antennas, next generation solid-state power amplifiers and modems. Gilat also provides managed network and satellite-based services for rural telephony and Internet access via its subsidiaries in Peru and Colombia.

With over 25 years of experience, and over a million products shipped to more than 85 countries, Gilat has provided enterprises, service providers and operators with efficient and reliable satellite-based connectivity solutions, including cellular backhaul, banking, retail, e-government and rural communication networks. Gilat also enables leading defense, public security and news organizations to implement advanced, on-the-move tactical communications on board their land, air and sea fleets using Gilat's high-performance SOTM solutions. For more information, please visit us at 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.

Contact:

Gilat Satellite Networks

Joelle Inowlocki

JoelleI@gilat.com

KCSA Strategic Communications

Phil Carlson, Vice President

(212) 896-1233

pcarlson@kcsa.com

Thomas Mei, Account Executive

(212) 896-1208

tmei@kcsa.com

GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
US dollars in thousands

	December 31,		December 31,
	2014		2013
	Unaudited
ASSETS

CURRENT ASSETS:
Cash and cash equivalents		27,726		58,424
Restricted cash		25,983		18,891
Restricted cash held by trustees		15,441		3,221
Trade receivables, net		57,728		56,466
Inventories		25,112		27,141
Other current assets		14,760		10,143
Total current assets		166,750		174,286

LONG-TERM INVESTMENTS AND RECEIVABLES:
Long-term restricted cash		216		6,279
Severance pay funds		8,085		9,856
Other long term receivables and deferred charges		12,124		278
Total long-term investments and receivables		20,425		16,413

PROPERTY AND EQUIPMENT, NET		90,893		85,369

INTANGIBLE ASSETS, NET		22,970		28,830

GOODWILL		63,870		63,870

TOTAL ASSETS		364,908		368,768

GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
US dollars in thousands

	December 31,			December 31,
	2014			2013
	Unaudited
LIABILITIES AND EQUITY

CURRENT LIABILITIES:
Short-term bank credit and loans		15,857			-
Current maturities of long-term loans		4,595			4,665
Trade payables		22,850			20,900
Accrued expenses		22,475			16,748
Short-term advances from customers, held by trustees		12,858			-
Other current liabilities		21,527			54,666

Total current liabilities		100,162			96,979

LONG-TERM LIABILITIES:
Accrued severance pay		8,157			9,628
Long-term loans, net of current maturities		26,271			31,251
Other long-term liabilities		5,179			4,877

Total long-term liabilities		39,607			45,756

COMMITMENTS AND CONTINGENCIES

EQUITY:
Share capital - ordinary shares of NIS 0.2 par value		1,966			1,932
Additional paid-in capital		876,624			873,045
Accumulated other comprehensive income		(1,420	)		1,591
Accumulated deficit		(652,031	)		(650,535	)

Total equity		225,139			226,033

TOTAL LIABILITIES AND EQUITY		364,908			368,768

GILAT SATELLITE NETWORKS LTD.
RECONCILIATION BETWEEN GAAP AND NON-GAAP STATEMENTS OF OPERATIONS
FOR COMPARATIVE PURPOSES
U.S. dollars in thousands (except share and per share data)
	Three months ended									Three months ended
	31 December 2014									31 December 2013
	GAAP			Adjustments (1)			Non-GAAP			GAAP			Adjustments (1)			Non-GAAP
	Unaudited			Unaudited			Unaudited			Unaudited			Unaudited			Unaudited

Revenues		73,097			-			73,097			55,728			-			55,728
Cost of revenues		47,325			(1,251	)		46,074			35,519			(1,256	)		34,263
Gross profit		25,772			1,251			27,023			20,209			1,256			21,465
		35	%					37	%		36	%					39	%
Research and development expenses:
Expenses incurred		6,804			(112	)		6,692			7,627			(129	)		7,498
Less - grants		675			-			675			142			-			142
		6,129			(112	)		6,017			7,485			(129	)		7,356
Selling and marketing expenses		7,257			(346	)		6,911			8,535			(344	)		8,191
General and administrative expenses		6,892			(283	)		6,609			6,341			(312	)		6,029
Restructuring Costs		-			-			-			564			(564	)		-
Operating income (loss)		5,494			1,992			7,486			(2,716	)		2,605			(111	)
Financial income (expenses), net		(1,939	)		-			(1,939	)		(1,602	)		-			(1,602	)
Income (loss) before taxes on income		3,555			1,992			5,547			(4,318	)		2,605			(1,713	)
Taxes on income		1,118			-			1,118			(708	)		-			(708	)
Net income (loss) from continuing operations		2,437			1,992			4,429			(3,610	)		2,605			(1,005	)
Net income (loss) from discontinued operations		-			-			-			(3,911	)		3,911			-
Net income (loss)		2,437			1,992			4,429			(7,521	)		6,516			(1,005	)

Basic net earnings (loss) per share from continuing operations		0.06									(0.09	)
Basic net earnings (loss) per share from discontinued operations		-									(0.09	)
Basic net earnings (loss) per share		0.06						0.10			(0.18	)					(0.02	)

Diluted net earnings (loss) per share from continuing operations		0.06									(0.09	)
Diluted net earnings (loss) per share from discontinued operations		-									(0.09	)
Diluted net earnings (loss) per share		0.06						0.10			(0.18	)					(0.02	)

Weighted average number of shares used in
computing net earnings (loss) per share
Basic		42,664,812						42,664,812			42,098,075						42,098,075
Diluted		43,165,834						43,640,235			42,098,075						42,098,075

(1) Adjustments reflect the effect of non-cash stock based compensation as per ASC 718, amortization of intangible assets related to Shares acquisition transactions, and net income (loss) from discontinued operations.

	Three months ended		Three months ended
	31 December 2014		31 December 2013
	Unaudited		Unaudited
Non-cash stock-based compensation expenses:
Cost of revenues		53		58
Research and development		112		129
Selling and marketing		134		131
General and administrative		283		312
		582		630

Amortization of intangible assets related to acquisition transactions:
Cost of revenues		1,198		1,198
Selling and marketing		212		213
		1,410		1,411

GILAT SATELLITE NETWORKS LTD.
RECONCILIATION BETWEEN GAAP AND NON-GAAP STATEMENTS OF OPERATIONS
FOR COMPARATIVE PURPOSES
U.S. dollars in thousands (except share and per share data)
	Year ended									Year ended
	31 December 2014									31 December 2013
	GAAP			Adjustments (1)			Non-GAAP			GAAP			Adjustments (1)			Non-GAAP
	Unaudited			Unaudited			Unaudited						Unaudited			Unaudited

Revenues		235,133			-			235,133			234,866			-			234,866
Cost of revenues		151,498			(5,024	)		146,474			155,210			(4,993	)		150,217
Gross profit		83,635			5,024			88,659			79,656			4,993			84,649
		36	%					38	%		34	%					36	%
Research and development expenses:
Expenses incurred		27,635			(474	)		27,161			29,491			(468	)		29,023
Less - grants		2,477			-			2,477			1,591			-			1,591
		25,158			(474	)		24,684			27,900			(468	)		27,432
Selling and marketing expenses		32,537			(1,388	)		31,149			32,214			(1,297	)		30,917
General and administrative expenses		20,903			(1,181	)		19,722			23,071			(1,151	)		21,920
Restructuring Costs		-			-			-			564			(564	)		-
Operating income (loss)		5,037			8,067			13,104			(4,093	)		8,473			4,380
Financial income (expenses), net		(3,837	)		-			(3,837	)		(6,239	)		-			(6,239	)
Income (loss) before taxes on income		1,200			8,067			9,267			(10,332	)		8,473			(1,859	)
Taxes on income		1,901			-			1,901			(755	)		-			(755	)
Net income (loss) from continuing operations		(701	)		8,067			7,366			(9,577	)		8,473			(1,104	)
Net income (loss) from discontinued operations		(795	)		795			-			(8,320	)		8,320			-
Net income (loss)		(1,496	)		8,862			7,366			(17,897	)		16,793			(1,104	)

Basic net earnings (loss) per share from continuing operations		(0.02	)								(0.23	)
Basic net loss per share from discontinued operations		(0.02	)								(0.20	)
Basic net earnings (loss) per share		(0.04	)					0.17			(0.43	)					(0.03	)

Diluted net earnings (loss) per share from continuing operations		(0.02	)								(0.23	)
Diluted net loss per share from discontinued operations		(0.02	)								(0.20	)
Diluted net earnings (loss) per share		(0.04	)					0.17			(0.43	)					(0.03	)

Weighted average number of shares used in
computing net earnings (loss) per share
Basic		42,444,482						42,444,482			41,960,925						41,960,925
Diluted		42,444,482						43,621,979			41,960,925						41,960,925

	Year ended		Year ended
	31 December 2014		31 December 2013
	Unaudited		Unaudited
Non-cash stock-based compensation expenses:
Cost of revenues		232		201
Research and development		474		468
Selling and marketing		538		448
General and administrative		1,181		1,151
		2,425		2,268

Amortization of intangible assets related to acquisition transactions:
Cost of revenues		4,792		4,792
Selling and marketing		850		849
		5,642		5,641

GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share and per share data)
	Year ended						Three months ended
	December 31,						December 31,
	2014			2013			2014			2013
	Unaudited						Unaudited			Unaudited

Revenues		235,133			234,866			73,097			55,728
Cost of revenues		151,498			155,210			47,325			35,519
Gross profit		83,635			79,656			25,772			20,209

Research and development expenses:
Expenses incurred		27,635			29,491			6,804			7,627
Less - grants		2,477			1,591			675			142
		25,158			27,900			6,129			7,485
Selling and marketing expenses		32,537			32,214			7,257			8,535
General and administrative expenses		20,903			23,071			6,892			6,341
Restructuring Costs		-			564			-			564
Operating income (loss)		5,037			(4,093	)		5,494			(2,716	)
Financial expenses, net		(3,837	)		(6,239	)		(1,939	)		(1,602	)
Income (loss) before taxes on income		1,200			(10,332	)		3,555			(4,318	)
Taxes on income (tax benefit)		1,901			(755	)		1,118			(708	)
Net income (loss) from continuing operations		(701	)		(9,577	)		2,437			(3,610	)
Net loss from discontinued operations		(795	)		(8,320	)		-			(3,911	)
Net income (loss)		(1,496	)		(17,897	)		2,437			(7,521	)

Net income (loss) per share from continuing operations (basic and diluted)		(0.02	)		(0.23	)		0.06			(0.09	)
Net loss per share from discontinued operations (basic and diluted)		(0.02	)		(0.20	)		-			(0.09	)
Net income (loss) per share (basic and diluted)		(0.04	)		(0.43	)		0.06			(0.18	)

Weighted average number of shares used in
computing net earnings (loss) per share
Basic		42,444,482			41,960,925			42,664,812			42,098,075
Diluted		42,444,482			41,960,925			43,165,834			42,098,075

GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
US dollars in thousands

	Year ended						Three months ended
	December 31,						December 31,
	2014			2013			2014			2013
	Unaudited						Unaudited			Unaudited
Cash flows from continuing operations
Cash flows from operating activities:
Net income (loss)		(1,496	)		(17,897	)		2,437			(7,521	)
Net loss from discontinued operations		(795	)		(8,320	)		-			(3,911	)
Net income (loss) from continuing operations		(701	)		(9,577	)		2,437			(3,610	)
Adjustments required to reconcile net income (loss)
to net cash generated provided by (used in) operating activities:
Depreciation and amortization		15,951			17,559			4,325			4,049
Stock-based compensation		2,425			2,268			582			630
Accrued severance pay, net		301			(38	)		259			(37	)
Accrued interest and exchange rate differences on
short and long-term restricted cash, net		858			307			394			(1,075	)
Exchange rate differences on long-term loans		(416	)		157			(105	)		65
Capital loss from disposal of property and equipment		430			48			189			35
Deferred income taxes		7			(2,733	)		63			(3,024	)
Increase in trade receivables, net		(2,457	)		(4,228	)		(3,995	)		(4,894	)
Decrease (increase) in other assets (including short-term, long-term
and deferred charges)		(20,251	)		10,740			(8,520	)		9,596
Decrease (increase) in inventories		(445	)		(6,502	)		781			1,289
Increase (decrease) in trade payables		2,226			(1,225	)		6,930			(4,854	)
Increase (decrease) in accrued expenses		5,401			(4,703	)		3,910			(464	)
Increase (decrease) in advances from customers, held
by trustees		14,068			(4,448	)		14,133			-
Increase (decrease) in other current liabilities and other long term liabilities		(33,559	)		18,772			(13,958	)		24,360
Net cash provided by (used in) operating activities		(16,162	)		16,397			7,425			22,066

GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
US dollars in thousands

	Year ended						Three months ended
	December 31,						December 31,
	2014			2013			2014			2013
	Unaudited						Unaudited			Unaudited
Cash flows from investing activities:
Purchase of property and equipment		(12,630	)		(4,063	)		(435	)		(1,246	)
Investment in restricted cash held by trustees		(24,869	)		(17,587	)		(18,955	)		(3,132	)
Proceeds from restricted cash held by trustees		12,306			13,744			3,681			3,461
Investment in restricted cash (including long-term)		(12,788	)		(25,961	)		(2,207	)		(23,480	)
Proceeds from restricted cash (including long-term)		11,228			2,975			10,996			418
Purchase of intangible assets		-			(16	)		-			-

Net cash used in investing activities		(26,753	)		(30,908	)		(6,920	)		(23,979	)


Cash flows from financing activities:
Capital lease payments		(234	)		-			(148	)		-
Issuance of restricted stock units and exercise of stock options		1,185			581			437			2
Payment of obligation related to the purchase of intangible assets		(500	)		(500	)		-			-
Short term bank credit, net		16,571			(3,518	)		2,394			(3,426	)
Repayment of long-term loans		(4,633	)		(12,950	)		(149	)		(146	)

Net cash provided by (used in) financing activities		12,389			(16,387	)		2,534			(3,570	)

Cash flows from discontinued operations
Net cash used in operating activities		-			(5,996	)		-			(4,688	)
Net cash provided by investing activities		-			15,791			-			15,086
Net cash provided by (used in) financing activities		-			12,884			-			(300	)
		-			22,679			-			10,098

Effect of exchange rate changes on cash and cash equivalents		(172	)		(325	)		49			(105	)

Decrease in cash and cash equivalents		(30,698	)		(8,544	)		3,088			4,510

Cash and cash equivalents at the beginning of the period		58,424			66,968			24,638			53,914

Cash and cash equivalents at the end of the period		27,726			58,424			27,726			58,424

GILAT SATELLITE NETWORKS LTD.
CONDENSED EBITDA
US dollars in thousands
	Year ended					Three months ended
	December 31,					December 31,
	2014		2013			2014		2013
	Unaudited		Unaudited			Unaudited		Unaudited

Operating income (loss)		5,037		(4,093	)		5,494		(2,716	)
Add:
Non-cash stock-based compensation expenses		2,425		2,268			582		630
Restructuring costs		-		564			-		564
Depreciation and amortization		15,951		17,559			4,325		4,049
EBITDA		23,413		16,298			10,401		2,527