Monday November 13, 9:43 am Eastern Time
Press Release
Gilat Reports Record Results for the
Third Quarter and First Nine Months
of 2000
PETAH TIKVA, Israel--(BUSINESS WIRE)--Nov. 13, 2000--Gilat Satellite Networks Ltd.
(Nasdaq: GILTF - news), a worldwide leader in satellite networking technology, today reported
its third quarter results for the period ending September 30, 2000.
Revenues for the third quarter were US$135.4 million, an increase of 53 percent over revenues of
US$88.5 million for the third quarter 1999. Net income was US$14.0 million (US$0.57 per
share).
Revenues for the nine months ended September 30, 2000 were US$329.9 million, an increase of
44 percent over the same period in 1999, when the company had revenues of US$229.0 million.
Net income was US$29.7 million (US$1.23 per share).
Gilat Chairman and Chief Executive Officer Yoel Gat remarked, ``The Company's solid financial
performance continues to be driven by our technology leadership and focus on developing ever
larger markets for our products. With the continued growth of satellite enterprise networks and
rural telephony - as well as the large-scale rollout of high-speed consumer Internet satellite
systems - there is increased focus on our industry and our Company.''
Gilat Presents Vision and Strategy
``The Internet has impacted our company across the board, from the enterprise markets'
increased adoption of IP-based applications, to developing markets' requirements for both
telephony and Internet solutions in a single platform, to the opening of the consumer market
through the StarBand Communications joint venture,'' said Gat. ``Gilat is a satellite technology
company with a leadership position in end-to-end broadband access networking. We intend to
leverage this valuable position as we continue to build our company.''
Gilat is introducing new technology for each of its key markets, including new hybrid Ku/Ka
satellite designs, Internet-optimized user hardware, and enhanced quality of service network
software which will position the company for the future and provide differentiation from
competitors. The Company intends to implement new content delivery technology which will
broaden the scope of the services to be offered to business and consumer markets. Lastly, the
Company will continue its efforts to expand the market for its products, to new vertical and global
consumer segments, to create additional value for its shareholders.
Gilat Signs Letter of Intent with Telefonos De Mexico
Gilat has signed a letter of intent with Telefonos de Mexico (TelMex) to provide a nearly
2,000-site, satellite-based rural telephony network for use in public call offices throughout
Mexico. The network, based on Gilat's FaraWay(TM) Very Small Aperture Terminal (VSAT)
product is expected to begin deployment immediately following execution of a binding contract.
There can be no assurance that this letter of intent will result in a contract, or as to the terms of any
such contract, nor whether the anticipated orders will be placed or implemented in the time
estimated.
First SkyBlaster Internet Contract in China
The Gilat China office today confirmed the sale of a 1,000-site satellite network to Shanghai
Jianhua Satellite Networks Corp. The SkyBlaster(TM) network, Gilat's two-way PC-based
satellite solution for broadband Internet applications, is presently in deployment. Jianhua intends to
serve as a network operator and to use the SkyBlaster network to provide satellite-based Internet
services to Chinese consumers and businesses.
Spacenet Announces Contract Awards
Gilat's Spacenet subsidiary will soon begin the rollout of a 500-site network for a prominent
non-profit organization, whose name is withheld at their request. Under the recently signed
contract, the network, which is expandable to 1,000 sites, will provide a private data network for
administrative and other communications needs across the continental United States. Spacenet will
provide an end-to-end networking solution, including network design, system installation and
ongoing operations and maintenance. The network is expected to be deployed by the fourth
quarter of 2001.
Spacenet also announced its selection by CHSI Corporation to provide a Skystar Advantage
VSAT network to 500 independent and small-chain pharmacies nationwide. CHSI is an
Application Service Provider that provides integrated technology solutions that enable small-chain
and independent pharmacies to obtain certain functionality, such as adjudication and Internet
access, enjoyed by large pharmacy chains. Network implementation is expected to begin in early
2001.
StarBand Communications Market Launch Underway
Using the tag line ``Just Look Up'', StarBand Communications Inc., America's first consumer
two-way, high-speed satellite Internet service provider, formally launched its nationwide service
on November 6, 2000. In the retail service offering, initially available through select EchoStar
DISH Network retailers nationwide, StarBand will sell customers a StarBand modem, which Gilat
has delivered a full quarter ahead of schedule. StarBand is a joint venture of Gilat Satellite
Networks, Microsoft Corp., EchoStar Communications Corp. and ING Furman Selz
Investments.
Gilat will be discussing its third quarter results on a conference call today, beginning at 10:30 AM
EST. The event will also be broadcast live over the Internet, and can be accessed by all interested
parties at gilat.com where there will also be a link for downloading the necessary
software (Real Player 5).
About Gilat Satellite Networks Ltd.
Gilat Satellite Networks Ltd., with its global subsidiaries Spacenet Inc., Gilat Europe and Gilat
Florida Inc., is a leading provider of telecommunications solutions based on VSAT satellite
network technology. 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. The Company is a joint venture partner, with Microsoft Corp.,
EchoStar Communications Corp. and ING Furman Selz Investments, in StarBand
Communications Inc., America's first consumer, nationwide, two-way, high-speed satellite Internet
service provider. StarBand is based in McLean, Va. SkyBlaster(TM), Skystar Advantage®,
DialAway® 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.
-0-
Gilat Satellite Networks Ltd.
Condensed Consolidated Balance Sheets
US Dollars in thousands
September 30 December 31
------------- -----------
2000 1999
------------- -----------
(Unaudited) (Audited)
------------- -----------
Assets
Current assets:
Cash and cash equivalents 66,023 33,381
Short-term bank deposits and current
maturities of long-term bank deposits 153,409 61,540
Accounts receivable:
Trade 149,998 111,417
Other 130,321 71,982
Inventories 131,028 81,060
------------- -----------
Total current assets 630,779 359,380
------------- -----------
Investments and non-current receivables:
Long-term bank deposits 50,000
Investments in companies
and non-current receivables 137,782 58,534
------------- -----------
137,782 108,534
------------- -----------
Property, plant and equipment:
Cost 312,129 198,555
Less - accumulated depreciation & amortization 57,639 38,742
------------- -----------
254,490 159,813
------------- -----------
Other assets and deferred charges - net 96,168 51,126
------------- -----------
1,119,219 678,853
============= ===========
Liabilities and shareholders' equity
Current liabilities:
Short-term bank credit 887 6,986
Accounts payable and accruals:
Trade 74,087 39,488
Accrued expenses 26,197 27,833
Other current liabilities 19,707 19,766
------------- -----------
Total current liabilities 120,878 94,073
------------- -----------
Convertible subordinated notes 350,000 75,000
------------- -----------
Accrued severance pay- net 2,125 1,868
------------- -----------
Other long-term liabilities 21,433 8,089
------------- -----------
Total liabilities 494,436 179,030
------------- -----------
Shareholders' equity:
Share capital and additional paid in capital 625,148 527,116
Currency translation adjustments (5,287) (2,557)
Retained earnings (Accumulated deficit) 4,922 (24,736)
------------- -----------
624,783 499,823
------------- -----------
1,119,219 678,853
============= ===========
Gilat Satellite Networks Ltd.
Condensed Consolidated Income (Loss)
Statements
US Dollars in thousands
Nine months ended Three months ended
September 30 September 30
------------------ ------------------
2000 1999 2000 1999
--------- ------- ------- -------
(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Revenues 329,947 229,017 135,400 88,519
Cost of revenues 212,693 129,516 91,049 49,933
--------- ------- ------- -------
Gross profit 117,254 99,501 44,351 38,586
--------- ------- ------- -------
Research and development costs: -
Expenses incurred 25,692 18,712 9,603 7,365
Less - grants 2,646 1,907 1,609 891
--------- ------- ------- -------
23,046 16,805 7,994 6,474
--------- ------- ------- -------
Selling, general and
administrative expenses 63,218 48,404 21,364 17,345
--------- ------- ------- -------
Operating Income 30,990 34,292 14,993 14,767
Financial income (expenses) - net (406) 2,489 400 1,413
Other income - net 89 - 31
--------- ------- ------- -------
Income before taxes on income 30,584 36,870 15,393 16,211
Taxes on income 1,391 1,465 1,190 980
--------- ------- ------- -------
Income after taxes on income 29,193 35,405 14,203 15,231
Share in profits (losses) of
associated companies 188 (21) (184) 51
Minority Share in losses of
a subsidiary 276 -
--------- ------- ------- -------
Net income 29,657 35,384 14,019 15,282
========= ======= ======= =======
Earnings per share (in US dollars)
Basic $1.33 $1.75 $0.61 $0.73
========= ======= ======= =======
Diluted $1.23 $1.68 $0.57 $0.71
========= ======= ======= =======
Weighted average number of shares
used in computation of earnings
per share (in Thousands)
Basic 22,237 20,236 23,113 20,984
========= ======= ======= =======
Diluted 24,200 21,010 24,805 21,663
========= ======= ======= =======
Contact:
Gilat Satellite Networks, McLean
Dianne VanBeber, 703/848-1515
Vice President, Investor Relations
dianne.vanbeber@spacenet.com
or
Ruder Finn, Inc.
Magda Gagliano, 212/593-6319
gaglianom@ruderfinn.com |
