RNS Number:6713T
Gilat Satcom Limited
06 May 2008
GILAT SATCOM LTD.
FINANCIAL RESULTS FOR THE QUARTER March 31, 2008
Quarterly revenues of $13.1 million; $1.3 million profit before tax;
Key points:
+-----------------+--------+------+------+------+-------+----------+
|Figures in | Q1 | Q4 | Q3 | Q2 | Q1 |Year ended|
|US$000s | 2008 | 2007 | 2007 | 2007 | 2007 | 31 |
| | | | | | | December |
| | | | | | | 2007 |
+-----------------+--------+------+------+------+-------+----------+
|Revenues | 13,090 |12,653|9,378 |9,038 | 8,710 | 39,779 |
+-----------------+--------+------+------+------+-------+----------+
|Gross profit | 3,958 |3,669 |2,343 |1,917 | 1,789 | 9,718 |
+-----------------+--------+------+------+------+-------+----------+
|Gross margin (%) | 30.2 | 29.0 | 25.0 | 21.2 | 20.5 | 24.4 |
+-----------------+--------+------+------+------+-------+----------+
|Operating profit | 1,424 |1,320 | 279 |(139) | (798) | 662 |
|(loss) | | | | | | |
+-----------------+--------+------+------+------+-------+----------+
|Operating margin | 11 | 10 | 3 | (2) | (9) | 1.7 |
|(%) | | | | | | |
+-----------------+--------+------+------+------+-------+----------+
|EBITDA | 2,939 |2,909 |1,837 |1,402 | 731 | 6,878 |
+-----------------+--------+------+------+------+-------+----------+
|Profit (loss) | 1,284 |1,125 | 58 |(385) |(1,133)| (335) |
|before tax | | | | | | |
+-----------------+--------+------+------+------+-------+----------+
|Net profit | 961 | 885 | 265 |(438) | (704) | 8 |
+-----------------+--------+------+------+------+-------+----------+
Financial Highlights
First quarter of 2008 continued to reflect the trend started in the second half
of 2007 with increased sales and growth, which resulted in revenues of $13.1
million and profit before tax of $1.3 million.
* Revenues in the first quarter of 2008 increased 3.5% compared to the
previous quarter and 50.3% compared to the first quarter of 2007
* Gross profit was $4.0 million or 30% of revenues compared to $3.7
million or 29% in the previous quarter and compared to $1.8 million or 21%
in the first quarter of 2007
* Operating profit for the first quarter was $1.4 million or 11% of
revenues compared to operating profit of $1.3 million or 10% in the previous
quarter and compared to operating loss of $798 thousands in the first
quarter of 2007
* EBITDA for the first quarter was $2.9 million, the same as in the
previous quarter and 300% increase compared to the first quarter of 2007
* Net Debt (bank loans less cash) decreased to $1.1 million compared to
$3.6 million in December 2007.
CEO Statement:
The first quarter reflects the continuation of the trend started last year with
growth in revenues and profit. We are focused on increasing our revenues, mainly
in our core business of internet backbone connectivity.
New deals during the first quarter:
* In March 2008 we announced renewal of capacity agreement over the Middle
East and Central Asia. During the first quarter we succeeded to sell most of
this capacity.
* New contract to provide connectivity to a large international customer
with branches across Africa for an annual value of $400 thousands.
* New order from an existing customer in West Africa for an upgrade with
an annual value of $400 thousands
* During Q1 we also started deployment of a multi country deal with a
leading African ISP. Expected annual value is approximately $600 thousands
These deals were partially recognized in Q1 and we expect full impact of them in
Q2.
Other business developments during the first quarter include:
* First quarter results included a significant increase in sales of NetApp
products. Following changes in Netapp reseller organization we will not
continue to be a direct reseller of NetApp in East Africa at the beginning
of Q3. We are evaluating the continuation of this line of products based on
the expected profit in the new business model and in other territories.
* In March 2008 we announced our intention to invest in a fiber optic
cable project in Kenya, "TEAMS". Due to changes in Kenyan regulations we
will not hold shares directly in the Kenyan fiber cable and we are
evaluating alternatives to purchase future capacity in TEAMS.
* During the last quarter of 2007 we received an order for a turn-key
project to establish an international satellite based communication network
with coverage over 4 continents. The contract is from a customer in Asia for
a total consideration of $3.5 million for a turnkey project including
ongoing service and network operation for two years. We expect major part of
the installations to end during Q2 (approximately $2.0 million recognized
revenues).
We are confident that our continues focus on profit will bring further results,
and will build a solid ground for the company to fulfil its strategic goals.
Roy Hess, CEO
6 May 2008
Contacts:
Gilat Satcom Ltd.: +972 3 925 5015
Liat Helman, CFO
Seymour Pierce +44 20 7107 8000
Stuart Lane or John Depasquale
GILAT SATCOM LTD.
CONSOLIDATED BALANCE SHEETS
IN THOUSAND U.S. DOLLARS
(UNAUDITED)
March 31, December 31,
2 0 0 8 2 0 0 7
Unaudited Audited
ASSETS
CURRENT ASSETS
Cash and cash equivalents 5,073 3,439
Short-term deposits 13 12
Trade receivables 1,667 (*) 1,681
Other receivables 2,327 2,025
Inventories 2,610 1,491
Total current assets 11,690 8,648
NON-CURRENT ASSETS
Property and equipment 17,426 17,443
Intangible assets 5,965 6,245
Deferred income taxes 1,462 1,751
Financial assets available for sale 660 660
Other 745 1,011
Total non-current assets 26,258 27,110
37,948 35,758
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Current maturities of long term loans from banks and 1,900 1,900
others
Current maturities of obligations under finance leases 7,851 7,469
Trade accounts payable 4,681 4,102
Other payables and current liabilities 2,634 (*) 2,428
Total current liabilities 17,066 15,899
NON-CURRENT LIABILITIES
Long-term credit from banks and others 4,275 4,750
Obligations under finance leases 427 -
Liabilities for severance pay, net 191 76
Total non-current liabilities 4,893 4,826
COMMITMENTS AND CONTINGENT LIABILITIES
SHAREHOLDERS EQUITY
Share capital 39 39
Capital reserves 15,321 15,321
Accumulated deficit 629 (327)
15,989 15,033
37,948 35,758
(*) Reclassified
The financial statements were approved by the board of directors and authorized
for issue on May 5, 2008
They were signed on its behalf by:
AMIKAM SHORER-Chairman ROY HESS-C.E.O LIAT HELLMAN-C.F.O
GILAT SATCOM LTD.
CONSOLIDATED INCOME STATMENTS
IN THOUSAND U.S. DOLLARS
(UNAUDITED)
Three months ended
March 31,
2 0 0 8 2 0 0 7
Revenues 13,090 8,710
Cost of revenues 9,132 6,921
Gross profit 3,958 1,789
Operating expenses:
Selling and marketing, net 1,079 962
General and administrative 1,457 1,625
Total operating expenses 2,536 2,587
Profit (loss) from operations 1,422 (798)
Financial income 71 16
Financial expenses (214) (351)
Profit (loss) before tax 1,279 (1,133)
Income Tax benefit (expenses) (323) 429
Profit (loss) for the period 956 (704)
Basic earnings (loss) per share (in dollars) 0.054 (0.040)
Diluted earning (loss) per share (in dollars) 0.054 (0.040)
Number of shares used in computing basic earnings 17,692 17,692
per share (in thousand)
Number of shares used in computing diluted earnings 17,692 17,692
per share (in thousand)
GILAT SATCOM LTD.
STATEMENT OF CHANGES IN EQUITY
IN THOUSAND U.S. DOLLARS
(UNAUDITED)
Share Capital Accumulated
Capital reserves Deficit Total
Balance as of January 1, 2008 39 15,321 (327) 15,033
Net profit for the period - - 956 956
Balance as of March 31, 2008 39 15,321 629 15,989
Share Capital Accumulated
Capital reserves Deficit Total
Balance as of January 1, 2007 39 15,321 (335) 15,025
Net loss for the period - - (704) (704)
Balance as of January 1, 2007 39 15,321 (1,039) 14,321
GILAT SATCOM LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
IN THOUSAND U.S. DOLLARS
(UNAUDITED)
Three months ended
March 31,
2 0 0 8 2 0 0 7
Cash flows from operating activities:
Net Profit (loss) for the period 956 (704)
Adjustments to reconcile net profit to net
cash provided by operating activities:
Depreciation of property and equipment 1,513 1,530
and amortization of intangible assets
Appreciation of finance lease 101 102
Appreciation of bank deposits (1) (10)
Decrease (Increase) in trade receivables 14 895
Decrease in other receivables (36) 161
Decrease (Increase) in inventories (1,119) 128
Increase (decrease) in trade accounts payable 579 (272)
Decrease in other payables and current liabilities 205 (422)
Decrease (Increase) in deferred income taxes 289 (434)
Increase in liabilities for severance pay, net 115 25
Net cash provided by operating activities 2,616 999
Cash flows from investing activities:
Purchases of property and equipment (351) (394)
Purchases of intangible assets - (196)
Investment in short-term bank deposit, net - (3,000)
Net cash used in investing activities (351) (3,590)
(156) (156)
Cash flows from financing activities:
Repayment of finance lease
Repayments of loans from banks (475) (650)
Net cash used in financing activities (631) (806)
Increase (decrease) in cash and cash equivalents 1,634 (3,397)
Cash and cash equivalents at the beginning of the period 3,439 5,916
Cash and cash equivalents at the end of the period 5,073 2,519
Appendix A - Non-cash transactions
Purchase of property and equipment under finance lease (864) -
Additional information regarding cash flows
Interest payments
Tax payments
Note 1 - Basis Of Preparation
The condensed financial statements have been prepared in conformity with
International Accounting Standards (IAS) 34, interim Financial Reporting.
Note 2 - Significant Accounting Policies
The accounting policies adopted are consistent with those followed in the
preparation of the company's annual Financial Statements for the year ended 31
December 2007.
The consolidated interim financial statements of Gilat Satcom Ltd. ("the
Company"), have been prepared as of march 31, 2008 and for the three months then
ended. These financial statements should be read in conjunction with the
Company's 2007 annual financial statements, including their accompanying notes.
Adoption of new and revised Standards
* IFRIC 11 - IFRS 2 - Group and Treasury Share Transactions - Effective
for annual periods beginning on or after 1 January 2008.
* IFRIC 12 - Service Concession Arrangement - Effective for annual periods
beginning on or after 1 January 2008.
* IFRIC 14 - IAS 19 - Effective for annual periods beginning on or after 1
January 2008.
At the date of authorisation of these financial statements, the following
Standards and Interpretations were in issue but not yet effective:
* IAS1 - Presentation of Financial Statements - Effective for periods
beginning on or after 1 January 2009.
* IAS 23 - Borrowing costs - Effective for annual periods beginning on or
after 1 January 2009.
* IFRS 8 - Operating Segments - Effective for annual periods beginning
on or after 1 January 2009.
* IAS 27 - Consolidated and Separate Financial Statements - Effective for
annual periods beginning on or after 1 January 2010.
* IFRS 3 - Business Combinations - Effective for business combinations
for which the acquisition date is on or after the beginning of the first
annual reporting period beginning on or after 1 July 2009.
* IFRIC 13 - Customer Loyalty Programmes - Effective for annual periods
beginning on or after 1 January 2009.
* Amendments to IFRS 2 Share-based Payment: Vesting Conditions and
Cancellations - Effective for annual periods beginning on or after 1 January
2009.
Note 3 - Exchange rates and linkage basis:
Assets and liabilities in or linked to the Israeli currency, New Israeli Shekel
("NIS"), are included in the financial statements according to the
representative exchange rate as published by the Bank of Israel at the balance
sheet date.
Data regarding exchange rates of NIS in relation to U.S. dollar are as follows:
Exchange rate
of one U.S.
dollar
31 March 2008 3.553
31 March 2007 4.155
31 December 2007 3.846
Note 4 - Business Segments
The communication services provided by the Company are divided into three main
communication sectors: VSAT private network services, Internet backbone
connectivity and International voice services.
Segment information about these businesses is presented below:
Three months ended March 31, 2008
VSAT Private Internet International
Network Backbone Voice
Services Connectivity Services Total
REVENUE
External sales 947 9,954 2,189 13,090
RESULT
Segment result 511 2,143 256
Three months ended March 31, 007
VSAT Private Internet International
Network Backbone Voice
Services Connectivity Services Total
REVENUE
External sales 726 6,625 1,359 8,710
RESULT
Segment result 293 442 124
This information is provided by RNS
The company news service from the London Stock Exchange
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