Gilat Satellite Networks
Reports Record Results for
the First Quarter of 2000
PETAH TIKVA, Israel--(BUSINESS WIRE)--May 15, 2000--Gilat Satellite
Networks Ltd. (NASDAQ: GILTF - news) today announced revenues of US$86
million for the first quarter ended March 31, 2000, an increase of 30 percent over
revenues of US$66.1 million for the same period in 1999. Net income was US$6.5
million ($0.28 per share).
Gilat Chairman and Chief Executive Officer Yoel Gat said, ``Gilat continues to deliver
solid results while providing its shareholders with participation in the tremendous
growth opportunity of Gilat-To-Home.''
COMSYS report names Gilat market share leader
COMSYS, the world's leading telecommunications consultancy specializing in satellite
markets, recently announced its 1999 research update on VSAT market trends. The
report named Gilat market share leader with a 51 percent share in the interactive data
segment, and an overall market growth of 30 percent. This is the fourth consecutive
year of market share growth for Gilat, and the first time in the Company's history to
claim the number one position.
Chairman Gat stated, ``It is an outstanding achievement for the company to have
attained market leadership after many years of progressive success. We are proud to
be #1 in our core business, and are confident that our satellite-based consumer
broadband activities will benefit from our leadership in this competitive industry.''
Gilat announces new contracts
New York-based On Site Networks, Inc. (OSN) has chosen Gilat's Spacenet Inc.
subsidiary to deliver its Women's Supermarket Network (WSN) custom television
programming to 2,000 supermarkets nationwide. Television personality Joan Lunden
serves as President and on-air host of WSN, which will use the Company's products
and services for an interactive platform for custom content and advertising to the point
of sale. One thousand sites are scheduled to be implemented by Fall 2000.
OSN Chairman Bob Jacobs called the relationship significant to the WSN launch.
``We selected Spacenet because of its technology and infrastructure, which we
believe is well suited to manage the rapid rollout of WSN,'' he said.
The Gilat Florida Inc. subsidiary will provide a 2,000-site VSAT network to Equus
Gaming Company, L.P. (NASDAQ: EQUUS - news). Equus is a partnership with
thoroughbred horseracing and entertainment interests in Latin America and the
Caribbean. Equus will use Gilat's Skystar Advantage© VSAT network for interactive
data applications at its four racetracks and its extensive network of off-track betting
agencies. The network is already well into the deployment phase.
Gilat also announced it is providing GTECH Brazil with 1,900 Skystar Advantage
VSAT terminals and satellite hub equipment. GTECH Brazil will use the equipment to
support the expansion of CAIXA Economica Federal, the operator of the Brazilian
national lottery. The new equipment is expected to be installed next month.
Gilat-To-Home market activities
Gilat-To-Home Inc. (GTH) continues to execute on its first-to-market consumer
broadband strategy. At present, GTH has over 1,500 pilot consumer sites installed
and enjoying always-on broadband Internet connections.
Separately, Spacenet has begun the rollout of the RadioShack demo network, which
will serve as GTH's initial retail channel. GTH expects to have 3,000 RadioShack
stores capable of providing live customer demos when the consumer broadband
service is officially launched in October 2000.
The Gilat shareholders' meeting is being scheduled for August 17, 2000. The meeting
will be asked to consider, among other things, the report of the financials of the
Company, the election of directors, the share split announced earlier, an increase in
the shares authorized under the Company's stock option plan and such other matters
as may be brought before the shareholders. The notice of meeting will be given in due
course.
Gilat's teleconference to the financial community, scheduled today at 10:30 AM EST
in the United States, will also be broadcast live over the Internet. The event can be
accessed at gilat.com where there will also be a links for downloading the
necessary software (Windows Media and Real Media).
About Gilat Satellite Networks Ltd.
Gilat Satellite Networks Ltd., with its global subsidiaries Spacenet Inc., Spacenet
Europe and Gilat Florida Inc., is a leading provider of telecommunications solutions
based on VSAT satellite network technology. The Company, based in Petah Tikva,
Israel, provides satellite-based, end-to-end enterprise networking and rural telephony
solutions to customers across six continents, and markets interactive broadband data
services. The Company is a joint venture partner, with Microsoft Corp., EchoStar
Communications Corp. and ING Furman Selz Investments, in Gilat-To-Home Inc.,
America's first consumer two-way satellite broadband Internet service provider.
Gilat-To-Home is based in McLean, Va. SkyBlaster(TM), Skystar Advantage©,
SkyWay(TM), DialAway© and FaraWay(TM) are trademarks or registered
trademarks of Gilat Satellite Networks Ltd. or its subsidiaries. Visit Gilat at
www.gilat.com and Gilat-To-Home at www.gilat2home.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.
An Israeli Corporation
Condensed Consolidated Income Loss Statements
(Unaudited)
Three months ended
------------------
US dollars in thousands March 31
----------------------- ------------------
2000 1999
---- ----
Revenues 85,944 66,122
--------
Cost of revenues 52,425 37,282
---------------- ------ ------
Gross profit 33,519 28,840
------------ ------ ------
Research and development costs:
-------------------------
Expenses incurred 7,675 5,685
Less - grants 512 181
---- ----- -----
Net research and development costs 7,163 5,504
---------------------------------- ----- -----
Selling, general and administrative expenses 19,270 14,434
-------------------------------------------- ------ ------
Operating Income (Loss) 7,086 8,902
-----------------------
Financial income (expenses) - net 63 (381)
--------------------------- ------ ------
Income before taxes on income 7,149 8,521
-----------------------------
Taxes on income 97 285
--------------- ------ ------
Income after taxes on income 7,052 8,236
----------------------------
Share in losses of associated companies 530 220
--------------------------------------- ------ ------
Net income 6,522 8,016
---------- ====== ======
Earnings per share (in US dollars)
------------------------------------
Basic $0.31 $0.43
====== ======
Diluted $0.28 $0.41
====== ======
Weighted average number of shares
used in computation of earnings
per share (in Thousands)
-------------------------------
Basic 21,192 18,738
====== ======
Diluted 23,573 19,606
====== ======
Gilat Satellite Networks Ltd.
An Israeli Corporation
Condensed Consolidated Balance Sheets
(Unaudited)
US dollars in thousands March 31 December 31
----------------------- --------- -------------
2000 1999
--------- ---------
Assets
Current assets:
Cash and cash equivalents 97,163 33,381
Short-term bank deposits and current
maturities 314,672 61,540
Accounts receivable:
Trade 128,667 111,417(a)
Other 76,458 69,766(a)
Inventories 97,902 81,060
--------- -----------
Total current assets 714,862 357,164
----- --------- -----------
Investments and non-current receivables:
----------------------------------------
Long-term bank deposits 50,000
Investments in companies
and non-current receivables 104,041 67,396
--------- -----------
104,041 117,396
--------- -----------
Property, plant and equipment:
Cost 220,136 198,555
Less - accumulated depreciation & amortization 44,971 38,742
---- --------- -----------
175,165 159,813
--------- -----------
Other assets and deferred charges - net 59,937 51,126
--------------------------------- --------- -----------
1,054,005 685,499
========= ===========
Liabilities and shareholders' equity
Current liabilities:
Short-term bank credit 803 6,986
Accounts payable and accruals:
Trade 52,207 39,488
Accrued expenses 20,796 27,833(a)
Other 19,737 20,345(a)
--------- ----------
Total current liabilities 93,543 94,652
-----
Convertible subordinated notes 425,000 75,000
------------------------------
Accrued severance pay 2,019 1,868
---------------------
Other long-term liabilities 15,566 14,156
--------------------------- --------- ----------
Total liabilities 536,128 185,676
----- --------- ----------
Shareholders' equity:
--------------------
Share capital and additional paid in capital 539,469 527,116
Capital fund (3,378) (2,557)
Accumulated deficit (18,214) (24,736)
--------- ----------
517,877 499,823
--------- ----------
1,054,005 685,499
========= ==========
(a) reclassified |
