Gilat Announces Second Quarter Results

VSAT NEWS

Israel (SPX) Aug 06, 2004
Gilat Satellite Networks Thursday reported its results for the quarter ended June 30, 2004. Revenues for the second quarter of 2004 were US$57.5 million, and net loss was US$(1.8) million or US$(0.08) diluted per share. By comparison, revenues for the second quarter of 2003 were US$52.1 million, and net loss was US$(36.2) million or US$(2.79) diluted per share.

The net loss for the second quarter of 2003, included charges relating to restructuring charges in the amount of US$2.2 million and impairment of long-lived assets in the amount of US$18.9 million.

Included in the second quarter of 2004 results are US$7.9 million in Depreciation and Amortization expenses as compared to US$7.6 million for the same period last year.

Revenues for the six month period ended June 30, 2004 were US$114.9 million and net loss was US$(8.3) million or US$(0.37) diluted per share. The net loss for the six-month period ended June 30, 2004 includes charges relating to inventory write offs in the amount of US$2.0 million.

By comparison, revenues for the six-month period ended June 30, 2003 were US$103.2 million, and net income was US$114.0 million or US$13.17 diluted per share.

The net income for the six-month period ended June 30, 2003 included a gain from restructuring of debt in the amount of US$181.1 million offset by charges relating to inventory writes offs in the amount of US$3.2 million, restructuring charges in the amount of US$2.2 million and impairment of long-lived assets in the amount of US$23.9 million.

Included in these six months results are US$16.0 million in Depreciation and Amortization expenses in the six-month period ended June 30, 2004 as compared to US$14.2 million for the same period last year.

In accordance with the FASB Interpretation No. 46, Consolidation of Variable Interest Entities ("FIN 46"), Gilat has consolidated the financial results of StarBand Communications beginning from the first quarter of 2004.

As a result of the above, the Company recorded revenues of US$7.3 million, and a net loss of US$0.2 million in the second quarter of 2004 and revenues of US$14.3 million, and a net income of US$0.2 million in the six-month period ended June 30, 2004.

The Company reported total cash balances (including cash and cash equivalents, short-term bank deposits, short- and long-term restricted cash and restricted cash held by trustees less short-term bank credits) of US$105.3 million as of June 30, 2004, an increase of US$10.1 million from the cash balance of US$95.2 million as of March 31, 2004.

The above increase in cash balances includes the effect of restricted cash received from a government for a project in Latin America offset by cash paid for the purpose of acquiring all of the remaining shares of rStar Corporation. This acquisition of shares was concluded on April 7, 2004.

"We are pleased that for the second consecutive quarter we have improving financial indicators," said Shlomo Rodav, Chairman of the Board and CEO of Gilat.

"We have generated positive earnings before interest, taxes, depreciation and amortization (EBITDA) over the past two consecutive quarters and we expect to be EBITDA positive for 2004 as a whole. During the last year and a half, Gilat has been engaged in a comprehensive improvement process to maximize efficiency and we are now beginning to see the fruits."

"Looking forward, our improved financial performance together with the well received introduction of our revolutionary SkyEdge product family, and our first customer's interest in this product, we are poised to grow the Company and to improve our competitive position in the market."

Continued deal funnel - Gilat announced new deals in Africa, Latin America, Asia and the United States:

Gilat will supply Koochi Communications Ltd. an additional 300 Skystar 360E terminals to deliver broadband communications to SOHO and SME users in Nigeria and West Africa. A rollout of 50 terminals was completed in Q4 of 2003, with shipment of the additional 300 terminals currently in process.

Gilat announced the signing of a contract with the leading Angolan ISP and a telecom operator, MSTelcom. The agreement initially calls for the deployment of up to 1,000 sites of the satellite-based DialAw@y IP and FaraWay VSAT networks.

While the DialAw@y IP network will service rural telephony applications throughout the country, the FaraWay network will provide data and telephony services to MSTelcom's ministerial and corporate clients.

Gilat was among several companies chosen to partake in a large-scale project for transferring voter information in the upcoming presidential referendum in Venezuela. The network, based on Gilat's Skystar 360E platform, includes a hub in Caracas and 4,000 remote terminals at polling stations throughout the country.

Gilat was selected by Telikom Papua New Guinea to provide a hub and 500 DialAw@y IP VSATs for rural telephony services across the island country. The network is expected to expand to 2,000 sites and will provide support for IP, education and health applications.

Gilat signed an agreement with the Korean management and control services company, Taegwang E&C Co. for the supply of a Skystar 360E satellite hub and remote VSAT terminals. The satellite-based VSAT network was successfully installed and will be operated by, the leading Korean telecom operator, Korea Telecom.

Gilat's subsidiary Spacenet has been chosen to provide Connexstar broadband satellite networks to several American hospitality companies:

Spacenet will deploy its Connexstar service at 150 Fazoli's corporate restaurant sites in 33 states nationwide. The network will support a range of retail networking applications, including point-of-sale polling, fast credit authorization, Xcellenet remote systems management tools and corporate intranet applications.

Spacenet will deploy a Connexstar broadband satellite network in 120 Frisch's Big Boy and Golden Corral restaurants in Ohio, Indiana and Kentucky.

Spacenet will provide a Connexstar broadband satellite network to a minimum of 250 Wendy's Old Fashioned Hamburger restaurants. The Connexstar VSAT high-speed network will support a range of retail networking applications, including fast credit authorization, PCanywhere remote control solution, Clearview back-office service management application, and point-of-sale polling.

VSAT NEWS

Gilat, ViaSat, And EMS Choose SkyStream Data-Over-Satellite Solutions

Sunnyvale CA (SPX) Aug 04, 2004
SkyStream Networks, the leader in IP video and data delivery, Tuesday announced that leading VSAT systems providers have integrated SkyStream's data-over-satellite solutions in over 60 percent of the DVB-RCS VSAT (very small aperture terminal) hub systems deployed today.

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