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 August 2018

 

(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 ☒          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 ☒

 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):   N/A

Attached hereto is Registrant’s press release dated August 7, 2018, announcing Gilat’s Second Quarter 2018 results.

 

We consent to the incorporation by reference of the GAAP financial information included herein, in the Registration Statements on Form S-8 (Registration Nos. 333-180552, 333-187021, 333-204867, 333-210820, 333-221546 and 333-223839).

 

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 Reports Continued Strong Growth in Profitability in Q2 2018

Company achieves GAAP operating income of $4.1 million (up 121.0% year over year)

and Adjusted EBITDA of $8.1 million (up 37.6% year over year)

Petah Tikva, Israel – August 7, 2018 – Gilat Satellite Networks Ltd. (NASDAQ, TASE: GILT), a worldwide leader in satellite networking technology, solutions and services, today reported its results for the second quarter ended June 30, 2018.

 

Key Financial Highlights:

 

·	Revenues for Q2 2018 were $66.5 million, compared with $66.2 million in Q2 2017.

 

·	Continued strong profitability:

 

o

Q2 2018 GAAP operating income increased to $4.1 million, up 121.0% from Q2 2017.

 

o

Q2 2018 Non-GAAP operating income rose to $5.7 million, up 37.1% year over year.

 

o

Q2 2018 GAAP net income was $2.2 million, or $0.04 per diluted share, compared with $2.1 million, or $0.04 per diluted share, in Q2 2017.

 

o

Q2 2018 non-GAAP net income was $3.7 million, or $0.07 per diluted share, versus $4.6 million, or $0.08 per diluted share, in Q2 2017.

 

o

Q2 2018 Adjusted EBITDA increased 37.6% year over year to $8.1 million, or 12.2 % of revenues.

 

·	Reiterated management objectives for 2018: revenue range between $285 million to $305 million, GAAP operating income between $17 million and $21 million, and Adjusted EBITDA between $30 million and $34 million.

 

Yona Ovadia, CEO of Gilat, commented:

 

“I am pleased to report that the second quarter of 2018 was another strong quarter for Gilat. We continued the trend of improvement in profitability as well as continued growth momentum in our business, as evidenced with the following achievements:

 

“In our strategic area of LTE cellular backhaul we have secured two additional wins, one with Telstra in Australia and the other with a major MNO in Latin America. In both these areas of the globe, Gilat was selected for its recognized global leadership in large, efficient and reliable LTE networks, which is what the businesses and residents in the remote locations of these countries expect and are willing to pay for.

 

“The win in LATAM is joined by the announcement on an expansion of our relationships with Hispasat for the delivery of affordable high quality broadband services to consumers and enterprises in the vast areas of Brazil that currently do not have this service, which marks our continued efforts and recovery of the business in this key part of the world.

 

“Finally, we also announced the win of two new regional telecommunications infrastructure projects for Fitel in Peru, bringing Gilat’s awarded regions to six out of the 13 regions. Gilat’s long term goal in Peru is for multi-year high margin recurring revenues from services, which is the motivation for these projects rather than the construction dollars.”

 

 

Mr. Ovadia concluded: “We remain committed to our target of improving the bottom line, and are confident that as capacity prices continue to decrease and demand grows, new opportunities will continue to be generated. This, together with our ongoing significant investment in R&D will drive further momentum in our strategic growth engines.”

Key Recent Announcements:

 

·	Hispasat and Gilat Partner to Commercialize High Throughput Satellite (HTS) Capacity of Amazonas 3 and 5 Satellites over Brazil

 

·	Tier-1 Mobile Network Operator in Latin America Selects Gilat for LTE Satellite Backhaul

 

·	Telstra Selects Gilat’s Satellite-based Cellular Backhaul Solution for 4G Mobile Service Expansion to Remote Locations Across Australia

 

·	Telesat and Gilat Join Forces to Develop Broadband Communication Modem Technology for Low Earth Orbit (LEO) Satellites

 

·	Gilat Awarded $153.6 Million by Fitel Peru for Regional Telecommunications Projects

Conference Call and Webcast Details:

 

Gilat management will host a conference call today, Tuesday, August 7, to discuss the second quarter results.  The details are as follows:

 

Conference Call and Webcast

 

Following the release, Yona Ovadia, Chief Executive Officer, and Adi Sfadia, Chief Financial Officer, will discuss Gilat’s second quarter 2018 results and participate in a question and answer session: 

 

Date:	Tuesday, August 7, 2018
Start:	09:30 AM EST / 16:30 IST
Dial-in:	US: 1-888-407-2553 International: (972) 3-918-0610

 

A simultaneous Webcast of the conference call will be available on the Gilat website at www.gilat.com and through this link: www.veidan-stream.com/gilatq2-2018.html

The webcast will also be archived for a period of 30 days on the Company’s website and through the link above.

 

Conference Call Replay

 

 

Non-GAAP Measures

 

The attached summary unaudited financial statements were prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP). To supplement the consolidated financial statements presented in accordance with GAAP, the Company presents Non-GAAP presentations of net income, operating income, Adjusted EBITDA and earnings per share. The adjustments to the Company’s GAAP results are made with the intent of providing both management and investors a more complete understanding of the Company’s underlying operational results, trends and performance.

Adjusted EBITDA (operating income before depreciation, amortization, non-cash stock option expenses, costs related to acquisition transactions, restructuring cost, goodwill impairment, impairment of long lived assets, trade secrets litigation expenses and expenses under amnesty program) is presented to compare the Company’s performance to that of prior periods and evaluate the Company’s financial and operating results on a consistent basis from period to period. The Company also believes this measure, when viewed in combination with the Company’s financial results prepared in accordance with GAAP, provides useful information to investors to evaluate ongoing operating results and trends. Adjusted EBITDA, however, should not be considered as an alternative to operating income or net income for the period and may not be indicative of the historic operating results of the Company; nor is it meant to be predictive of potential future results. Adjusted EBITDA is not a measure of financial performance under GAAP and may not be comparable to other similarly titled measures for other companies. Reconciliation between the Company's Operating income and Adjusted EBITDA is presented in the attached summary financial statements.

This news release also contains a forward-looking estimate of Adjusted EBITDA projected to be generated by Gilat in 2018. A forward-looking estimate of net income and reconciliations of the forward-looking estimates of Adjusted EBITDA to net income are not provided because the items necessary to estimate net income are not estimable at this time. Non-GAAP presentations of net income, operating income, Adjusted EBITDA and earnings per share should not be considered in isolation or as a substitute for any of the consolidated statements of operations prepared in accordance with GAAP, or as an indication of Gilat’s operating performance or liquidity.

 

About Gilat

 

Gilat Satellite Networks Ltd. (NASDAQ: GILT, TASE: GILT) is a leading global provider of satellite-based broadband communications. With 30 years of experience, we design and manufacture cutting-edge ground segment equipment, and provide comprehensive solutions and end-to-end services, powered by our innovative technology. Delivering high value competitive solutions, our portfolio comprises of a cloud based VSAT network platform, high-speed modems, high performance on-the-move antennas and high efficiency, high power Solid State Amplifiers (SSPA) and Block Upconverters (BUC).

 

Gilat’s comprehensive solutions support multiple applications with a full portfolio of products to address key applications including broadband access, cellular backhaul, enterprise, in-flight connectivity, maritime, trains, defense and public safety, all while meeting the most stringent service level requirements. Gilat controlling shareholders are the FIMI Private Equity Funds. For more information, please visit: 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. We undertake no obligation to update or revise any forward-looking statements for any reason. 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.

Contact:

Gilat Satellite Networks

Doreet Oren, Director Corporate Communications

Comm-Partners LLC

June Filingeri, President

GILAT SATELLITE NETWORKS LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share and per share data)

 

		Six months ended								Three months ended
		June 30,								June 30,
		2018				2017				2018				2017
		Unaudited								Unaudited
Revenues		$	133,882			$	130,168			$	66,508			$	66,237
Cost of revenues			90,053				93,258				44,066				46,668
Gross profit			43,829				36,910				22,442				19,569
Research and development expenses			16,730				13,467				8,284				6,712
Less - grants			810				523				343				476
Research and development expenses, net			15,920				12,944				7,941				6,236
Selling and marketing expenses			11,716				11,350				6,303				5,555
General and administrative expenses			8,389				10,723				4,054				5,903
Total operating expenses			36,025				35,017				18,298				17,694
Operating income			7,804				1,893				4,144				1,875
Financial expenses, net			(2,188	)			(2,046	)			(1,605	)			(1,242	)
Income (loss) before taxes on income			5,616				(153	)			2,539				633
Taxes on income (tax benefit)			1,154				(1,501	)			388				(1,499	)
Net income		$	4,462			$	1,348			$	2,151			$	2,132
Earnings per share (basic and diluted)		$	0.08			$	0.02			$	0.04			$	0.04
Weighted average number of shares used in
computing earnings per share
Basic			54,811,893				54,649,863				54,858,330				54,676,042
Diluted			55,614,782				54,690,930				55,639,202				54,701,316

GILAT SATELLITE NETWORKS LTD.
RECONCILIATION BETWEEN GAAP AND NON-GAAP STATEMENTS OF OPERATIONS
FOR COMPARATIVE PURPOSES
U.S. dollars in thousands (except share and per share data)

 

		Three months ended												Three months ended
		June 30, 2018												June 30, 2017
		GAAP				Adjustments (1)				Non-GAAP				GAAP				Adjustments (1)				Non-GAAP
		Unaudited												Unaudited
Gross profit		$	22,442				1,230			$	23,672			$	19,569				1,205			$	20,774
Operating expenses			18,298				(288	)			18,010				17,694				(1,049	)			16,645
Operating income			4,144				1,518				5,662				1,875				2,254				4,129
Income before taxes on income			2,539				1,518				4,057				633				2,491				3,124
Net income		$	2,151				1,518			$	3,669			$	2,132				2,491			$	4,623
Earnings per share (basic and diluted)		$	0.04			$	0.03			$	0.07			$	0.04			$	0.04			$	0.08
Weighted average number of shares used in
computing earnings per share
Basic			54,858,330								54,858,330				54,676,042								54,676,042
Diluted			55,639,202								55,854,231				54,701,316								54,735,130

 

 

		Three months ended				Three months ended
		June 30, 2018				June 30, 2017
		Unaudited				Unaudited
GAAP net income		$	2,151			$	2,132
Gross profit
Non-cash stock-based compensation expenses			36				11
Amortization of intangible assets related to acquisition transactions			1,194				1,194
			1,230				1,205
Operating expenses
Non-cash stock-based compensation expenses			238				203
Amortization of intangible assets related to acquisition transactions			50				193
Trade secrets litigation expenses			-				25
Tax expenses under amnesty program			-				628
			288				1,049
Finance and taxes on income under amnesty program			-				237
Non-GAAP net income		$	3,669			$	4,623

GILAT SATELLITE NETWORKS LTD.
RECONCILIATION BETWEEN GAAP AND NON-GAAP STATEMENTS OF OPERATIONS
FOR COMPARATIVE PURPOSES
U.S. dollars in thousands (except share and per share data)

 

		Six months ended												Six months ended
		June 30, 2018												June 30, 2017
		GAAP				Adjustments (1)				Non-GAAP				GAAP				Adjustments (1)				Non-GAAP
		Unaudited												Unaudited
Gross profit		$	43,829				2,430			$	46,259			$	36,910				2,410			$	39,320
Operating expenses			36,025				(551	)			35,474				35,017				(2,285	)			32,732
Operating income			7,804				2,981				10,785				1,893				4,695				6,588
Income (loss) before taxes on income			5,616				2,981				8,597				(153	)			4,932				4,779
Net income		$	4,462				2,981			$	7,443			$	1,348				4,932			$	6,280
Basic income per share		$	0.08			$	0.06			$	0.14			$	0.02			$	0.09			$	0.11
Diluted income per share		$	0.08			$	0.05			$	0.13			$	0.02			$	0.09			$	0.11
Weighted average number of shares used in
computing earnings per share
Basic			54,811,893								54,811,893				54,649,863								54,649,863
Diluted			55,614,782								55,835,134				54,690,930								54,785,783

(1)	Adjustments reflect the effect of non-cash stock-based compensation as per ASC 718, amortization of intangible assets related to shares acquisition transactions, trade secrets litigation expenses and tax expenses under amnesty program.

		Six months ended				Six months ended
		June 30, 2018				June 30, 2017
		Unaudited				Unaudited
GAAP net income		$	4,462			$	1,348
Gross profit
Non-cash stock-based compensation expenses			42				22
Amortization of intangible assets related to acquisition transactions			2,388				2,388
			2,430				2,410
Operating expenses
Non-cash stock-based compensation expenses			450				396
Amortization of intangible assets related to acquisition transactions			101				388
Trade secrets litigation expenses			-				873
Tax expenses under amnesty program			-				628
			551				2,285
Finance and taxes on income under amnesty program			-				237
Non-GAAP net income		$	7,443			$	6,280

GILAT SATELLITE NETWORKS LTD.
SUPPLEMENTAL INFORMATION
U.S. dollars in thousands

ADJUSTED EBITDA:
		Six months ended								Three months ended
		June 30,								June 30,
		2018				2017				2018				2017
		Unaudited								Unaudited
GAAP operating income		$	7,804			$	1,893			$	4,144			$	1,875
Add:
Non-cash stock-based compensation expenses			492				418				274				214
Trade secrets litigation expenses			-				873				-				25
Tax expenses under amnesty program			-				628				-				628
Depreciation and amortization			7,322				6,304				3,672				3,139
Adjusted EBITDA		$	15,618			$	10,116			$	8,090			$	5,881

---

---

---

(*) In November 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”, which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for annual and interim periods beginning after December 15, 2017. The Company adopted this standard during the first quarter of 2018 using the retrospective transition method, as required by the new standard.

 

The following table provides a reconciliation of cash and cash equivalents, restricted cash, restricted cash held by trustees and long term restricted cash reported within the consolidated balance sheets that sum to the total of such amounts in the consolidated statements of cash flows: