Awesome revenue growth:
biz.yahoo.com
Monday February 28, 9:20 am Eastern Time
Company Press Release
Gilat Announces Record Results for 1999 and Proposes
Three-for-One Stock Split
PETAH TIKVA, Israel--(BUSINESS WIRE)--February 28, 2000--Gilat Satellite Networks Ltd. (NASDAQ: GILTF - news) reported
revenues for the year ended December 31, 1999 of US$337.9 million, an increase of 118 percent over 1998 sales of US$155.3 million.
As announced on February 16, 2000, Gilat has recognized one-time charges to 1999 earnings in accordance with the November 1999
publication of Staff Accounting Bulletin No. 100 (SAB 100) of the Securities and Exchange Commission. After a one-time charge of
US$38.8 million, Gilat reported net income of US$19.6 million, or US$0.92 per share. Excluding these charges, net income would have
been US$58.4 million, or US$2.73 per share, an increase of 136 percent over the US$24.8 million (US$2.14 per share) reported for
1998.
Revenues for the fourth quarter ended December 31, 1999 were US$108.9 million, an increase of 119 percent over the US$49.7 million
result for the same period in 1998. Fourth-quarter earnings reflect the one-time charges required by SAB100, resulting in a loss of
US$(15.8) million, or US$(0.75) per share. Excluding these charges, earnings were US$23.0 million (US$1.00 per share), an increase of
152 percent over the US$9.2 million figure (US$0.77 per share) for the final quarter of 1998.
The Company also announced its intention to split its stock at a ratio of three-to-one thereby replacing each share outstanding with three
new Ordinary Shares of the Company. The Company intends to carry out the stock split immediately on receipt of approval of its
shareholders which is expected to take place within the next 90 days.
Gilat Chairman and CEO Yoel Gat remarked, ``In 1999 Gilat's core business grew at an unprecedented pace, and the company has
strengthened its position as the leader in VSAT technology. The opportunity in each segment of our business is immense and we are
moving aggressively with the Gilat-To-Home initiative into international markets.'
Gilat introduces Gilat-To-Home Latin America, focuses Global Village Telecom operations on broadband
Gilat today announced the establishment of Gilat-To-Home Latin America (GTH-LA), a satellite-based broadband Internet access
business. The venture intends to focus on providing satellite-based Internet access and other premium services to small businesses and
on-line homes throughout Latin America beginning in late 2000. Gilat is now in discussions with a number of financial and strategic
investors which may participate in this venture.
The on-ground telephony networks of Global Village Telecom N.V. (GVT) in Chile, Peru and Colombia will be leveraged to provide a
quick access ramp for GTH-LA to the Latin American market, with key licenses, operations centers, and field service operations in place
today. Servicio Satelital, S.A., Gilat's majority-owned Argentine operation, will also contribute to the rapid entry to the market.
Under a recently signed agreement with the other shareholders of GVT, Gilat will receive 100% control of GVT's ventures in Chile, Peru
and Colombia. In exchange, the other shareholders will receive all of GVT's controlling shares in the Brazilian company that holds a
license for telephone and other telecommunications services in south central Brazil. The transaction is expected to close in mid April of this
year, at which time the other shareholders will have the rights to the GVT brand name.
The Brazilian company, which expects to install telephone and other telecommunications services in urban and suburban Brazil over the
next two to three years, is principally focused on applications other than the fixed rural telephony applications in which Gilat has built its
reputation. Gilat will grant a $40 million convertible loan to the Brazilian urban telephony project, which, subject to certain regulatory
approval, will be convertible into up to a 9.09% interest in that project. This investment provides Gilat with a continuing interest in this
high-growth proposition and right of first refusal to provide Gilat's hardware for the small cities where its satellite-based solutions are
appropriate.
Chairman and CEO Yoel Gat commented, ``The success of Gilat is dependent upon our ability to focus on and exploit our areas of
unique expertise. The conversion to Gilat control of the Chile, Peru and Colombian ventures will continue our emphasis on fixed rural
telephony while providing Gilat-To-Home Latin America the basis for fast access to a market where our satellite-based technology and
services can provide an appealing solution to meeting broadband demand. This will allow management to focus on areas with the best
overall return to Gilat.'
Spacenet announces new contracts
Gilat's Spacenet subsidiary announced two new contracts. Cumberland Farms, Inc., headquartered in Canton, MA, will deploy a Skystar
Advantage© VSAT satellite communications network to a minimum of 600 Cumberland Farms gas station/convenience stores throughout
the Northeastern United States and Florida. Cumberland Farms expects to use the network for inventory management, and IP
multicasting of software and price file updates to stores to facilitate accurate and consistent pricing.
Spacenet has been selected by Creative Resource Solutions (CRS) to provide a 1,000-site Skystar Advantage network for restaurants
throughout the United States. CRS, headquartered in Charlotte, NC, provides a wide range of technology and support solutions to the
restaurant industry. CRS will initially roll out VSATs to its existing customers, including one of the nation's largest Wendy's franchisees, to
support data warehousing and inventory management applications that enable restaurants to use just-in-time stocking techniques to
respond to market demand.
Chairman Gat stated, ``The coming year will require focus as our core business expands and we execute the Gilat-To-Home strategy in
the U.S. and international markets. The prospects for the company are outstanding and we look forward to the potential of another
record year.'
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
About Gilat Satellite Networks Ltd.
Gilat Satellite Networks Ltd., with its global subsidiaries Spacenet Inc., Spacenet Services Europe GmbH and Gilat Florida Inc., is a
leader in very small aperture terminal (VSAT) technology, manufacturing and service. 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 currently
markets nationwide interactive broadband data services for U.S.-based corporations and service providers. Skystar Advantage©,
Clearlink©, E-Trunk(TM), OneWay(TM), TwoWay(TM)-Ready Receiver, SkyWay(TM), DialAway©, FaraWay(TM), SkySurfer©
and SkyBlaster(TM) are trademarks or registered trademarks of Gilat Satellite Networks Ltd. or its subsidiaries. Web users can visit
Gilat 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.
Gilat Satellite Networks Ltd.
An Israeli Corporation
Condensed Consolidated Balance Sheets
(Audited)
US dollars in thousands December 31 December 31
1999 1998
Assets
Current assets:
Cash and cash equivalents 33,381 7,564
Short-term bank deposits 61,540
Short-term loan to an associated company -(a)
Accounts receivable:
Trade 125,201 71,853
Other 55,893 27,378(a)
Inventories 81,060 72,594
Total current assets 357,075 179,389
Investments and non-current receivables:
Long-term bank deposits 50,000 40,701
Investments in companies
and non-current receivables 69,275 18,901(a)
119,275 59,602
Property, plant and equipment:
Cost 197,303 118,357
Less - accumulated depreciation &
amortization 38,742 23,446
158,561 94,911
Other assets and deferred charges - net 50,875 55,382(b)
685,786 389,284
============ ===========
Liabilities and shareholders' equity
Current liabilities:
Short-term bank credit 6,986 23,158
Accounts payable and accruals:
Trade 39,488 25,102
Accrued expenses 32,170 27,642(b)
Other 16,295 14,544
Total current liabilities 94,939 90,446
Convertible subordinated notes 75,000 75,000
Accrued severance pay 1,868 1,218
Other long-term liabilities 14,156
Total liabilities 185,963 166,664
Shareholders' equity:
Share capital and additional paid
in capital 527,116 266,967
Capital fund (2,557)
Accumulated deficit (24,736) (44,347)(b)
499,823 222,620
685,786 389,284
============ ===========
(a) reclassified
(b) restated
Gilat Satellite Networks Ltd.
An Israeli Corporation
Condensed Consolidated Income (Loss) Statements
Year ended Three months ended
US dollars in thousands December 31 December 31
1999 1998 1999 1998
Audited Audited Unaudited Unaudited
Revenues 337,873 155,335 108,856 49,659
Cost of revenues 187,760 86,603 58,244 27,540
Cost of revenues associated
with acquisition 37,013 9,495 37,013 9,495
224,773 96,098 95,257 37,035
Gross profit 113,100 59,237 13,599 12,624
Research and development costs:
Expenses incurred 27,159 15,815 8,447 4,654
Less - grants 2,368 3,035 461 292
24,791 12,780 7,986 4,362
Acquired research and
development 0 80,000 0 80,000
Net research and
development costs 24,791 92,780 7,986 84,362
Selling, general and
administrative expenses 67,156 29,077 18,752 7,926
Selling, general and
administrative expenses
associated with acquisition 1,258 1,258 0
68,414 29,077 20,010 7,926
19,895 (62,620) (14,397) (79,664)
Restructuring Charges (356) 11,989(a) (356) 11,989(a)
Operating Income (Loss) 20,251 (74,609) (14,041) (91,653)
Financial income (expenses)
- net 3,267 (1,247) 778 14
Write-off of Investments
Associated with acquisition (896) (2,700) (896) (2,700)
Other income - net 0 162 (89) (135)
Income before taxes
on income 22,622 (78,394) (14,248) (94,474)
Taxes on income 2,475 286 1,010 0
Income after taxes on income 20,147 (78,680) (15,258) (94,474)
Share in profits (losses) of
associated companies (536) (703) (515) (555)
Net income 19,611 (79,383) (15,773) (95,029)
======= ======= ======= =======
Earnings per share
(in US dollars)
Basic $0.96 -$7.18 -$0.75 -$8.53
======= ======= ======= =======
Diluted $0.92 -$7.18 -$0.75 -$8.53
======= ======= ======= =======
Weighted average number of shares
used in computation of earnings
per share (in Thousands)
Basic 20,447 11,059 21,073 11,136
======= ======= ======= =======
Diluted 21,429 11,059 21,073 11,136
======= ======= ======= =======
(a) restated
Earnings per share before expenses associated with the acquisition:
Year ended December 31, 1999 Basic $2.86
=======
Fully Diluted $2.73
=======
Three months ended
December 31, 1999 Basic $1.09
=======
Fully Diluted $1.00
=======
Gilat Satellite Networks Ltd.
An Israeli Corporation
Condensed Consolidated Income (Loss) Statements
Excluding expenses associated with acquisition and restructuring
Year ended Three months ended
US dollars in thousands December 31 December 31
1999 1998 1999 1998
Revenues 337,873 155,335 108,856 49,659
Cost of revenues 187,760 86,603 58,244 27,540
Gross profit 150,113 68,732 50,612 22,119
Research and development costs:
Expenses incurred 27,159 15,815 8,447 4,654
Less - grants 2,368 3,035 461 292
Net research and development
costs 24,791 12,780 7,986 4,362
Selling, general and
administrative expenses 67,156 29,077 18,752 7,926
Operating Income (Loss) 58,166 26,875 23,874 9,831
Financial income (expenses)
- net 3,267 (1,247) 778 14
Other income - net 0 162 (89) (135)
Income before taxes on income 61,433 25,790 24,563 9,710
Taxes on income 2,475 286 1,010 0
Income after taxes on income 58,958 25,504 23,553 9,710
Share in profits (losses) of
associated companies (536) (703) (515) (555)
Net income 58,422 24,801 23,038 9,155
======= ======= ======= =======
Earnings per share
(in US dollars)
Basic $2.86 $2.24 $1.09 $0.82
======= ======= ======= =======
Diluted $2.73 $2.14 $1.00 $0.77
======= ======= ======= =======
Weighted average number of shares
used in computation of earnings
per share (in Thousands)
Basic 20,447 11,059 21,073 11,136
======= ======= ======= =======
Diluted 21,429 11,600 24,467 13,608
======= ======= ======= ======= |
