zk1516817.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 May, 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 May 20, 2015, announcing Gilat’s First Quarter 2015 results.
 
We consent to the incorporation by reference of the GAAP financial information included herein, in the Registration Statements on Form F-3 (Registration No. 333-195680) and the Registration Statements on Form S-8 (Registration Nos.  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 May 20, 2015
By:
/s/ Ran Tal  
   
Ran Tal
  
   
VP General Counsel
  
 
 
2
 
 
Gilat Announces First Quarter 2015 Results
Management reiterates financial objectives for FY2015
with a strong second half of the year expected, in comparison to a slow first half
 
Petah Tikva, Israel – May 20, 2015 – Gilat Satellite Networks Ltd. (NASDAQ, TASE: GILT), a worldwide leader in satellite networking technology, solutions and services, today reported its results for the first quarter ended March 31, 2015.
 
Key Financial Updates:
 
·
Revenues for the first quarter of 2015 were $45.2 million compared to $50.9 million in the comparable period of 2014.
 
·
EBITDA for the first quarter of 2015 was $0.2 million compared to $2.8 million in the comparable period of 2014.
 
·
Management objectives for 2015: continued growth to revenues between $250 to $260 million and EBITDA between $26 to $28 million
 
Revenues for the first quarter of 2015 were $45.2 million, compared to $50.9 million for the same period in 2014.
 
On a non-GAAP basis, operating loss was $2.1 million in the first quarter of 2015 as compared to an operating income of $0.5 million in the comparable quarter of 2014.

On a GAAP basis, operating loss was $4.0 million in the first quarter of 2015 as compared to an operating loss of $1.5 million in the comparable quarter of 2014.

On a non-GAAP basis, net loss for the quarter was $3.7 million or $0.09 per diluted share compared to net loss of $0.6 million or $0.01 per diluted share in the same quarter of 2014.
 
On a GAAP basis, net loss for the quarter was $5.6 million or a loss of $0.13 per diluted share compared to a net loss of $2.7 million or a loss of $0.06 per diluted share in the same quarter of 2014.

EBITDA for the first quarter of 2015 reached $0.2 million compared with $2.8 million in the comparable period in 2014.
 
“We reiterate our management objectives for FY2015 of a revenue target of $250 - $260 million and an EBITDA target of $26 - $28 million. As we expect, the second half of 2015 will be significantly stronger than the first half,” said Dov Baharav, Interim CEO and Chairman of the Board of Gilat.

“We were pleased to see progress in our strategy of extending broadband internet in rural areas in the first quarter, with the significant award of Peru’s Fitel project. We expect this project to contribute to our growth in 2015 and even more so in 2016. Moreover, we see positive momentum in HTS with a number of new deals, such as JCP in Brazil and in Cellular Backhaul with RuralCom in Canada and others.”

“Looking forward, I am confident that we will see top- and bottom-line growth in 2015, and, given our recent wins, we can expect additional growth in 2016,” Dov Baharav added.

 
3
 
Key Recent Announcements:
 
·
Gilat Awarded $285 Million Regional Telecommunications Infrastructure Project by Peru’s Fitel
 
·
Gilat's HTS VSAT Network Goes Live at JCP, BRASTRADING’s Telecommunications Subsidiary in Brazil
 
·
Gilat Partners with Intelsat to Enable Rapid Deployment and High Quality 2G/3G Cellular Connectivity to Underserved Regions of the World
 
·
Cellular Carrier RuralCom Selects Gilat as Prime Network Contractor for its Alaska Highway and BC Coast Networks
 
Conference Call and Webcast Details:
Gilat management will host a conference call today at 13:30 GMT / 09:30 EDT / 16:30 IDT to discuss the results. International participants are invited to access the call at (972)3-925-5943, and US-based participants are invited to access the call by dialing (1)866-500-4953. A replay of the conference call will be available beginning at approximately 16:00 GMT/ 12:00 EDT/ 19:00 IDT today, until 16:00 GMT/ 12:00 EDT/ 19:00 IDT May 22, 2015.  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.

 
4
 
With over 25 years of experience, and over a million products shipped to more than 90 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. Gilat’s controlling shareholders are the FIMI Private Equity Funds. 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
 
 
5
 
           
GILAT SATELLITE NETWORKS LTD.        
CONDENSED CONSOLIDATED BALANCE SHEET        
US dollars in thousands        
 
   
March 31,
    
December 31,
  
   
2015
    
2014
  
   
Unaudited
        
ASSETS
            
             
CURRENT ASSETS:
            
Cash and cash equivalents
     30,365       27,726  
Restricted cash
     13,900       25,983  
Restricted cash held by trustees
     3,680       15,441  
Trade receivables, net
     55,900       57,728  
Inventories
     29,003       25,112  
Other current assets
     12,324       14,760  
Total current assets
     145,172       166,750  
                 
LONG-TERM INVESTMENTS AND RECEIVABLES:
                
Long-term restricted cash
     191       216  
Severance pay funds
     7,900       8,085  
Other long term receivables
     10,450       12,124  
Total long-term investments and receivables
     18,541       20,425  
                 
PROPERTY AND EQUIPMENT, NET
     89,046       90,893  
                 
INTANGIBLE ASSETS, NET
     21,505       22,970  
                 
GOODWILL
     63,870       63,870  
                 
TOTAL ASSETS
     338,134       364,908  
 
 
6
 
           
GILAT SATELLITE NETWORKS LTD.        
CONDENSED CONSOLIDATED BALANCE SHEET        
US dollars in thousands        
 
   
March 31,
    
December 31,
  
   
2015
    
2014
  
   
Unaudited
        
LIABILITIES AND EQUITY
            
             
CURRENT LIABILITIES:
            
Short-term bank credit and loans
     4,720       15,857  
Current maturities of long-term loans
     4,528       4,595  
Trade payables
     22,321       22,850  
Accrued expenses
     19,816       22,475  
Short-term advances from customers, held by trustees
     6,989       12,858  
Other current liabilities
     25,410       21,527  
                 
Total current liabilities
     83,784       100,162  
                 
LONG-TERM LIABILITIES:
                
Accrued severance pay
     7,872       8,157  
Long-term loans, net of current maturities
     21,875       26,271  
Other long-term liabilities
     4,937       5,179  
                 
Total long-term liabilities
     34,684       39,607  
                 
COMMITMENTS AND CONTINGENCIES
                
                 
EQUITY:
                
Share capital - ordinary shares of NIS 0.2 par value
     1,982       1,966  
Additional paid-in capital
     877,932       876,624  
Accumulated other comprehensive loss
     (2,611 )     (1,420 )
Accumulated deficit
     (657,637 )     (652,031 )
                 
Total equity
     219,666       225,139  
                 
TOTAL LIABILITIES AND EQUITY
     338,134       364,908  
 
7
 
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 March 2015     31 March 2014  
     
GAAP
    
Adjustments (1)
    
Non-GAAP
    
GAAP
    
Adjustments (1)
    
Non-GAAP
  
     
Unaudited
    
Unaudited
    
Unaudited
    
Unaudited
    
Unaudited
    
Unaudited
  
                                       
Revenues
       45,190       -       45,190       50,851       -       50,851  
Cost of revenues
     31,998       (1,251 )     30,747       30,876       (1,267 )     29,609  
Gross profit
       13,192       1,251       14,443       19,975       1,267       21,242  
        29 %             32 %     39 %             42 %
Research and development expenses:
                                                
Expenses incurred
     6,534       (110 )     6,424       7,239       (122 )     7,117  
Less - grants
       190       -       190       354       -       354  
        6,344       (110 )     6,234       6,885       (122 )     6,763  
Selling and marketing expenses
     6,263       (337 )     5,926       9,690       (342 )     9,348  
General and administrative expenses
     4,591       (241 )     4,350       4,912       (303 )     4,609  
Operating income (loss)
     (4,006 )     1,939       (2,067 )     (1,512 )     2,034       522  
Financial expenses, net
     (1,351 )     -       (1,351 )     (1,034 )     -       (1,034 )
Loss before taxes on income
     (5,357 )     1,939       (3,418 )     (2,546 )     2,034       (512 )
Taxes on income
     249       -       249       90       -       90  
Net loss from continuing operations
     (5,606 )     1,939       (3,667 )     (2,636 )     2,034       (602 )
Net loss from discontinued operations
     -       -       -       (51 )     51       -  
Net loss
       (5,606 )     1,939       (3,667 )     (2,687 )     2,085       (602 )
                                                   
Basic net loss per share from continuing operations
     (0.13 )                     (0.06 )                
Basic net loss per share from discontinued operations
     -                       (0.00 )                
Basic net loss per share
     (0.13 )             (0.09 )     (0.06 )             (0.01 )
                                                   
Diluted net loss per share from continuing operations
     (0.13 )                     (0.06 )                
Diluted net loss per share from discontinued operations
     -                       (0.00 )                
Diluted net loss per share
     (0.13 )             (0.09 )     (0.06 )             (0.01 )
                                                   
Weighted average number of shares used in
                                                
   computing net loss per share
                                                
                              Basic     42,883,469               42,883,469       42,175,937               42,175,937  
                              Diluted     42,883,469               42,883,469       42,175,937               42,175,937  
 
(1)
Adjustments reflect the effect of non-cash stock based compensation as per ASC 718, amortization of intangible assets related toShares acquisition transactions, and net income (loss) from discontinued operations.
 
         
Three months ended
                
Three months ended
        
         
31 March 2015
                
31 March 2014
        
         
Unaudited
                
Unaudited
        
Non-cash stock-based compensation expenses:
                                    
Cost of revenues
             52                       58          
Research and development
             110                       122          
Selling and marketing
             125                       130          
General and administrative
             241                       303          
              528                       613          
Amortization of intangible assets related to acquisition transactions:
                                                
Cost of revenues
             1,199                       1,209          
Selling and marketing
             212                       212          
              1,411                       1,421          
 
8
 
GILAT SATELLITE NETWORKS LTD.
      
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
      
U.S. dollars in thousands (except share and per share data)
      
 
    Three months ended  
    March 31,  
   
2015
    
2014
  
   
Unaudited
    
Unaudited
  
             
Revenues
     45,190       50,851  
Cost of revenues
     31,998       30,876  
Gross profit
     13,192       19,975  
                 
Research and development expenses:
                
Expenses incurred
     6,534       7,239  
Less - grants
     190       354  
      6,344       6,885  
Selling and marketing expenses
     6,263       9,690  
General and administrative expenses
     4,591       4,912  
Operating loss
     (4,006 )     (1,512 )
Financial expenses, net
     (1,351 )     (1,034 )
Loss before taxes on income
     (5,357 )     (2,546 )
Taxes on income
     249       90  
Net loss from continuing operations
     (5,606 )     (2,636 )
Net loss from discontinued operations
     -       (51 )
Net loss
     (5,606 )     (2,687 )
                 
Net loss per share from continuing operations (basic and diluted)
     (0.13 )     (0.06 )
Net loss per share from discontinued operations (basic and diluted)
     -       (0.00 )
Net loss per share (basic and diluted)
     (0.13 )     (0.06 )
                 
Weighted average number of shares used in
                
computing net loss per share
                
Basic
     42,883,469       42,175,937  
Diluted
     42,883,469       42,175,937  
 
9
 
GILAT SATELLITE NETWORKS LTD.
            
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
            
US dollars in thousands
            
 
    Three months ended  
    March 31,  
   
2015
    
2014
  
   
Unaudited
    
Unaudited
  
Cash flows from continuing operations
            
Cash flows from operating activities:
            
Net loss
     (5,606 )     (2,687 )
Net loss from discontinued operations
     -       (51 )
Net loss from continuing operations
     (5,606 )     (2,636 )
Adjustments required to reconcile net loss to net cash generated provided by (used in) operating activities:
                
Depreciation and amortization
     3,658       3,684  
Stock-based compensation
     528       613  
Accrued severance pay, net
     (101 )     (122 )
Accrued interest and exchange rate differences on short and long-term restricted cash, net
     43       86  
Exchange rate differences on long-term loans
     (329 )     6  
Capital loss from disposal of property and equipment
     -       17  
Deferred income taxes
     (41 )     (36 )
Decrease (increase) in trade receivables, net
     721       (2,040 )
Decrease (increase) in other assets (including short-term, long-term and deferred charges)
     2,934       (7,783 )
Decrease (increase) in inventories
     (4,182 )     670  
Decrease in trade payables
     (195 )     (2,050 )
Increase (decrease) in accrued expenses
     (2,173 )     1,675  
Increase (decrease) in advances from customers, held by trustees
     (5,178 )     4,228  
Increase (decrease) in other current liabilities and other long term liabilities
     4,250       (2,243 )
Net cash used in operating activities
     (5,671 )     (5,931 )
 
 
10
 
GILAT SATELLITE NETWORKS LTD.
            
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
            
US dollars in thousands
            
 
    Three months ended  
    March 31,  
   
2015
    
2014
  
   
Unaudited
    
Unaudited
  
Cash flows from investing activities:
            
Purchase of property and equipment
     (741 )     (525 )
Investment in restricted cash held by trustees
     -       (4,228 )
Proceeds from restricted cash held by trustees
     10,922       2,950  
Investment in restricted cash (including long-term)
     (10,052 )     -  
Proceeds from restricted cash (including long-term)
     22,117       76  
                 
Net cash Provided by (used in) investing activities
     22,246       (1,727 )
                 
Cash flows from financing activities:
                
Capital lease payments
     (102 )     -  
Issuance of restricted stock units and exercise of stock options
     793       293  
Short term bank credit, net
     (10,007 )     1,652  
Repayment of long-term loans
     (4,135 )     (4,165 )
                 
Net cash used in financing activities
     (13,451 )     (2,220 )
                 
Effect of exchange rate changes on cash and cash equivalents
     (485 )     33  
                 
Increase (decrease) in cash and cash equivalents
     2,639       (9,845 )
                 
Cash and cash equivalents at the beginning of the period
     27,726       58,424  
                 
Cash and cash equivalents at the end of the period
     30,365       48,579  
 
11
 
GILAT SATELLITE NETWORKS LTD.
          
CONDENSED EBITDA
            
US dollars in thousands
            
 
    Three months ended  
    March 31,  
   
2015
    
2014
  
   
Unaudited
    
Unaudited
  
             
Operating loss
     (4,006 )     (1,512 )
Add:
                
Non-cash stock-based compensation expenses
     528       613  
Depreciation and amortization
     3,658       3,684  
EBITDA
     180       2,785  
 
12