FORM 6 - K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report on Foreign Issuer
Pursuant to Rule 13a - 16 or 15d -16
of the Securities Exchange Act of 1934
For the Month of January 2003
Gilat Satellite Networks Ltd.
(Translation of Registrant's Name into English
Gilat House, Yegia Kapayim Street
Daniv Park, Kiryat Arye, Petah Tikva, Israel
(Address of Principal Corporate Offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
| Form 20-F ___X___ | Form 40-F _______ |
Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
| Yes _______ | No ___X___ |
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A
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Attached hereto and incorporated by reference herein is Registrant's press release dated January 6, 2003 announcing Registrant's third quarter financial results.
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Gilat Satellite Networks Ltd. (Registrant) By: /s/Yoav Leibovitch Yoav Leibovitch Chief Financial Officer |
Dated: January 6, 2003
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Gilat reports third-quarter 2002 results
Recent major wins in Latin America, Africa lead to significant increase in backlog
Petah Tikva, Israel, January 6, 2003 - Gilat Satellite Networks Ltd. (Nasdaq: GILTF), a worldwide leader in satellite networking technology, today reported its results for the quarter ended September 30, 2002. The Company also announced a significant increase in backlog as a result of several major new contracts within the past two months.
Revenues for the third quarter were US$43 million and year-end backlog is expected to increase to approximately US$250 million. Net loss for the third quarter was US$108 million, which included write-offs associated with a partial impairment of GVT notes, inventory adjustment related to current sales level, adjustment for doubtful accounts, final costs associated with the closing of the rStar transaction, and certain transponder termination costs associated with StarBand Communications. Without these impacts and without our share in equity losses in Satlynx and Starband, net loss was US$26.9 million for the quarter.
Gilat Chairman and Chief Executive Officer Yoel Gat said, "Although our top line has been impacted over the past two quarters due to temporary delays in signing certain contracts, we have recently signed several large deals over the past few weeks as we moved to finalize the details of our debt restructuring plan. These major wins are expected to increase backlog to approximately US$250 million, which is comparably higher than 2001 year-end backlog. This increase in backlog is expected to have a positive effect on our revenue and business as we move forward in 2003."
Major new contracts lead to significant increase in backlog -- Major telecommunications companies and governments continue to adopt Gilat's technology and communications solutions
Gilat recently reported several major core-business wins, leading to an expected increase in year-end backlog to approximately US$250 million. From this backlog amount, the Company expects that approximately over US$120 million will turn into revenue during 2003, thus providing a stable base on which to grow revenue from during the upcoming year. Recent new contracts currently in backlog include:
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Restructuring plan nears closing and date is set for meeting with bondholders and bank lenders to approve plan
Last month, Gilat announced that it has reached agreement with its major bank and holders of a majority of bonds on the details of its debt restructuring plan. The Company is moving forward in anticipation of completing the restructuring plan in first quarter 2003.
"The closing of our debt restructuring plan will be a major milestone for Gilat, positioning the Company on a path of growth in 2003 and beyond, with a significantly improved balance sheet and operating structure," added Gat.
The Company has set a date of February 5, 2003, to hold a final meeting of bondholders and bank lenders to approve its debt restructuring plan as filed with the Israeli District Court in Tel Aviv. The Company also commenced the mailing of proxy information on January 6, 2003, in connection with the upcoming meetings.
About Gilat Satellite Networks Ltd.
Gilat Satellite Networks Ltd., with its global subsidiaries Spacenet Inc. and Gilat Latin America, is a leading provider of telecommunications solutions based on Very
Small Aperture Terminal (VSAT) satellite network technology - with nearly 400,000 VSATs shipped worldwide. Gilat markets the Skystar Advantage, DialAw@y IP, FaraWay,
Skystar 360E and SkyBlaster* 360 VSAT products in more than 70 countries around the world. 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 in SATLYNX, a
provider of two-way satellite broadband services in Europe, with SES GLOBAL. Skystar Advantage(R), Skystar 360(TM), DialAw@y IP(TM) and FaraWay(TM) are trademarks or
registered trademarks of Gilat Satellite Networks Ltd. or its subsidiaries. Visit Gilat at www.gilat.com. (*SkyBlaster is marketed in the United States by StarBand
Communications Inc. under its own brand name.)
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 Investor Contacts:
Tim Perrott, Vice President, Investor Relations
Gilat Satellite Networks Ltd.
(703) 848-1515; tim.perrott@spacenet.com
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Gilat Satellite Networks Ltd.
Condensed Consolidated Balance Sheets
US dollars in thousands September 30 December 31
2002 2001
Assets
Current assets:
Cash and cash equivalents* 64,340 97,325
Short-term bank deposits and current maturities of
long-term bank deposits 3,376 12,900
Restricted cash 3,613 3,520
Accounts receivable:
Trade 70,220 125,059
Other 41,836 46,091
Inventories 88,583 123,372
------- -------
Total current assets 271,968 408,267
------- -------
Investments and non-current receivables:
Restricted cash 8,959 9,521
Severance pay fund 6,860 5,784
Investments in companies
and non-current receivables 63,869 95,891
------- -------
79,688 111,196
------- -------
Property, plant and equipment:
Cost 328,877 346,826
Less - accumulated depreciation & amortization 116,189 99,627
------- -------
212,688 247,199
------- -------
Other assets and deferred charges - net 88,750 91,961
------- -------
653,094 858,623
======== =======
Liabilities and Shareholders' Equity
Current liabilities:
Short-term bank credit 1,858 4,664
Current maturities of long term loans 87,989 25,224
Accounts payable and accruals:
Trade 30,775 46,927
Accrued expenses 37,007 51,737
Other 27,940 30,142
------- -------
Total current liabilities 185,569 158,694
Convertible subordinated notes 350,000 350,000
Accrued severance pay 8,103 8,831
Long term loans - net of current maturities 64,253 136,073
Other long-term liabilities 14,413 17,066
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Total liabilities 622,338 670,664
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Minority interest 4,538 10,639
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Shareholders' equity:
Share capital and additional paid in capital 623,567 617,443
Currency translation adjustment -5,850 (5,710)
Accumulated deficit -591,499 (434,413)
------- -------
26,218 177,320
------- -------
653,094 858,623
======== =======
* Including rStar's cash and cash equivalents of $12.6 million and $31.0 million as of September 30, 2002
and December 31, 2001, respectively.
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Gilat Satellite Networks Ltd.
Condensed Consolidated Income (Loss) Statements
rStar consolidated rStar in the equity method
Nine Months ended Three Months ended Nine Months ended Three Months ended
US dollars in thousands September 30 September 30 September 30 September 30
2002 2001 2002 2001 2002 2001 2002 2001
Revenues 166,984 300,001 43,326 81,360 166,930 300,001 43,318 81,360
Cost of revenues 124,983 226,224 37,409 63,926 124,831 226,224 37,409 63,926
Inventory write off 17,808 62,224 17,321 62,224 17,808 62,224 17,321 62,224
--------- --------- --------- --------- --------- --------- --------- ---------
24,193 11,553 (11,404) (44,790) 24,291 11,553 (11,412) (44,790)
--------- --------- --------- --------- --------- --------- --------- ---------
Research and development costs: -
Expenses incurred 22,815 37,107 7,453 11,424 22,315 34,892 7,328 10,733
Less - grants 3,060 6,670 1,048 2,499 3,060 6,670 1,048 2,499
--------- --------- --------- --------- --------- --------- --------- ---------
19,755 30,437 6,405 8,925 19,255 28,222 6,280 8,234
--------- --------- --------- --------- --------- --------- --------- ---------
Selling, general and administrative expenses 61,088 96,004 22,066 32,685 52,899 80,533 18,073 26,822
Provision for doubtful accounts 32,082 58,537 19,472 37,064 32,082 58,537 19,472 37,064
Impairment of intangible and tangible asstes 6,862 93,561 6,862 93,561 93,561 93,561
Restructuring charges and other charges - 30,284 20,290 - 30,284 - 20,290
--------- --------- --------- --------- --------- --------- --------- ---------
Operating loss (95,594) -297,270 (66,209) -237,315 (79,945) (279,584) (55,237) (230,761)
--------- --------- --------- --------- --------- --------- --------- ---------
Financial expenses - net (15,331) -18,164 (5,501) -4,365 (15,116) (17,610) (5,467) (4,410)
Impairment of investments (20,271) (27,521) (20,271) (25,521) (19,865) (27,521) (19,865) (25,521)
--------- --------- --------- --------- --------- --------- --------- ---------
Loss before taxes on income (131,196) (342,955) (91,981) (267,201) (114,926) (324,715) (80,569) (260,692)
--------- --------- --------- --------- --------- --------- --------- ---------
Taxes on income (expenses) (367) (974) - (693) (338) (974) 29 (693)
--------- --------- --------- --------- --------- --------- --------- ---------
Loss after taxes on income (131,563) (343,929) (91,981) (267,894) (115,264) (325,689) (80,540) (261,385)
--------- --------- --------- --------- --------- --------- --------- ---------
Share in losses of associated companies (28,382) (252) (17,573) - (41,822) (14,508) (27,890) (5,454)
Minority Share in losses of a subsidiary 2,859 3,984 1,124 1,055 - - -
--------- --------- --------- --------- --------- --------- --------- ---------
Net loss (157,086) (340,197) (108,430) (266,839) (157,086) (340,197) (108,430) (266,839)
--------- --------- --------- --------- --------- --------- --------- ---------
Earnings per share (in US dollars) Basic and Diluted -6.69 -14.56 -4.58 -11.42 -6.69 -14.56 -4.58 -11.42
========= ========= ========= ========= ========= ========= ========= =========
Weighted average number of shares
used in computation of earnings
per share (in thousands) Basic and Diluted 23,491 23,360 23,689 23,364 23,491 23,360 23,689 23,364
========= ========= ========= ========= ========= ========= ========= =========
* Consolidated according to US GAAP
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