Gilat Reports 3Q Loss
Petah Tikva, Israel, Nov. 13, 2013 —Gilat Satellite Networks Ltd. reported a loss of US$ 1.3 million for the third quarter of 2013 compared to an operating income of US$ 5.7 million in the corresponding period in 2012 as revenues fell on account of delays in two of the company's divisions and lesser revenue from Compartel in Colombia.
Gilat said revenue for the third quarter of 2013 dropped to US$ 71.3 million, compared to US$ 89.0 million for the same period in 2012, while EBITDA for the third quarter of reached US$ 2.1 million compared with US$ 9.8 million in the comparable period in 2012.
The lackluster performance has prompted Gilat to slash its revenue guidance for 2013.
“We have taken immediate action to cut costs reducing our global headcount and fixed expenses by approximately US$ 9 million annually,” said Erez Antebi, CEO of Gilat.
“The shortfall in Q3 was mainly attributed to two deals which were delayed in our Commercial Division, reduced revenue from Compartel in Colombia and a delayed project implementation in our Services Division,” said Antebi.
“We expect to see most of the impact of the reductions beginning in the first quarter of 2014. It is important to note that we have taken care not to reduce our sales teams or our research and development investments in our strategic growth areas.”
He admitted that the last quarter had been difficult but they have already taken appropriate measures to significantly cut costs and further streamline the company. He said Gilat continues to close deals in their Commercial Division with new and existing customers. He added that their Defense Division is stable and they see growing interest and need for their products.
In August this year Gilat announced that it entered into a definitive agreement to sell Spacenet to SageNet, subject to regulatory approval and the satisfaction of customary closing conditions. Last week, Gilat received the required FCC regulatory approval, and immediately notified SageNet that to complete the sale. However, SageNet has indicated it wanted further negotiations, delaying further the closure of the sale.
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