Gilat Satellite Networks Ltd. · NASDAQ:GILT
Gilat Satellite Networks — Q1 2007 Earnings Presentation
34 slides from Gilat Satellite Networks's earnings presentation, May 14, 2007
Slide 1: 1st Quarter 2007 Results
Boundless Communications 1st Quarter 2007 Results Amiram Levinberg, CEO and Chairman of the Board Tal Payne, CFO May 14, 2007
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements that are subject to a number of risks and uncertainties, many of which are outside our control. These forward-looking statements include statements about our business strategy, objectives, and expectations, our future o
Slide 3: Q1 2007 Highlights
Q1 2007 Highlights Continued improvement in financial indicators: solid top- line growth & enhanced profitability Emerging markets: Continued demand for USO/USF projects Developed markets: Broadband Satellite Network for major European retail chain Business Continuity and Disaster Recovery Growth in
Slide 4: Sequential Improvement in Key Financial Indicators
Sequential Improvement in Key Financial Indicators Quarterly Revenue ($M) $68.0 $70.0 $63.8 $65.4 $58.6 $61.0 $60.0 $50.0 $40.0 $30.0 $20.0 Quarterly Net Income ($M) $10.0 $4.9 $5.0 $4.5 $0.0 Q106 Q206 Q306 Q406 Q107 $4.0 $3.0 $2.7 $2.1 $2.0 $1.2 $1.0 $0.0 Q106 Q206 Q306 Q406 Q107
Slide 5: Complementary Business Units
Complementary Business Units Satellite equipment to operators world- wide Telephony and Internet operator in Latin America Broadband satellite service provider in the US
Slide 6: Gilat Enters the WiMAX Market
Gilat Enters the WiMAX Market As part of Gilat’s strategy to expand its product portfolio, Gilat will provide WiMAX networks for emerging markets Satellite and WiMAX Customers in emerging market often require both satellite and WiMAX solutions (depends on proximity to Internet PoP) Satellite and WiM
Slide 7: Emerging Markets
Emerging Markets Continued demand for USO/USF projects Strong market demand in East Europe Strong market demand in Africa: Nigeria, Ethiopia, Tanzania
Slide 8: Developed Markets
Developed Markets Broadband Satellite Network for major European retail chain New SkyEdge embedded IPTV based multi-media capabilities Enables advanced and efficient digital signage applications Business Continuity and Disaster Recovery Several projects for state & local government institutions
Slide 9: Profit and Loss Highlights
Profit and Loss Highlights In US$ millions, except per share data Three months ended March 31, 2007 2006 Revenues 68.0 58.6 Gross Profit 24.8 21.7 Gross Margin % 36% 37% R&D net 4.0 3.6 R&D Net % 6% 6% SG&A 17.1 15.9 SG&A % 25% 27% Operating income 3.8 2.2 Operating Income % 6% 4% GAAP Net income 4.
Slide 10: Balance Sheet Highlights
Balance Sheet Highlights In US$ millions March 31, 2007 December 31, 2006 Total cash * 189.8 182.6 Total debt 44.4 45.2 Trade receivables 33.7 29.6 Inventory 22.4 26.4 Shareholders’ equity 216.8 212.1 • Including cash and cash equivalents, short and long-term held to maturity marketable securities,
Slide 11: Summary
Summary Strong first quarter- financials & projects Continued demand in emerging and developed markets Entrance into the WiMAX market Well positioned for future growth
Slide 12: Q&A
Q&A
Slide 13: Corporate Presentation
Boundless Communications Corporate Presentation May 2007
Slide 14: Gilat at a Glance
Gilat at a Glance Our Business: A leading global provider of broadband satellite communication, networking products and services Global Presence: 16 sales and service offices worldwide Over 670,000 units shipped to over 85 countries Revenues: 249M annual 2006, 258M LTM Employees: Approximately 1000
Slide 15: Our Business - VSAT Satellite Network
Our Business - VSAT Satellite Network Typical Applications Broadband Internet Access Credit Card Validation ATM/Pay at the Pump Inventory Control Electronic Pricing Network HUB Virtual Private Networks Oil and Gas Pipeline Monitoring Internet Café Telephony and VoIP Wireless Backhaul Internet Teleph
Slide 16: VSAT Satellite Network Value Chain
VSAT Satellite Network Value Chain Satellite Operators Communication End Service Providers Users Enterprises Government Rural telecom Ground Stations Consumers Equipment Providers Vertically Vertically integrated integrated company company with with aa diversified diversified revenue revenue stream
Slide 17: Gilat's Worldwide Presence
Gilat’s Worldwide Presence • More than 330 operating networks • 85 countries on 6 continents • Over 670,000 VSATs shipped • 16 offices
Slide 18: Complementary Business Units
Complementary Business Units • Satellite equipment to operators world-wide • Turnkey projects 46% of Revenues • Telephony and Internet operator in Latin America • Build-Operate for Governments • Build-Operate-Transfer for other carriers • Broadband satellite 16% of Revenues service provider in the U
Slide 19: Equipment Market Size
Equipment Market Size ($m) 1000 Equipment Market 800 600 $900m in 2006 400 CAGR=10% 200 0 Gilat Market Position 2006 2004 2005 2006 #1 in rural telephony VSAT Market Size (kVSATs shipped) VSAT market (VSATs 800 shipped) 600 #2 in enterprise VSAT market 28% (VSATs 400 shipped) 200 0 2004 2005 2006 20
Slide 20: Broad Range of Solutions and Applications
Broad Range of Solutions and Applications SkyEdge family of products Delivers broadband, Internet, voice, data and video Models for different applications Broadband IP Multi-service VSAT - telephony/IP/video All-Outdoor VSAT Rural telephony and trunking Cisco’s router plug in - VSAT NM Pre-packaged
Slide 21: Service Market Size
Service Market Size ($m) 6000 5000 Service Market 4000 $4.8B in 2006 3000 2000 CAGR=9% 1000 0 Gilat Market Position 2006 2004 2005 2006 #2 in NA enterprise NA Service Market market 21% (VSAT sites) Others Providing service to ViaSat Spacenet Cisco’s VSAT NM Telesat Hughes 2004/2005 based on Comsys 2
Slide 22: Blue Chip Customers
~ SPACENET INC. Blue Chip Custom Enterprise Prodticts Partners LP. PRISE Q) INTERCONTINENTAL ein) (Conoco) (Q INTERCONTINENTAL ‘ cS es *“Goonsy EAR Do it Best Wenoys AMP Farms \ALERO ENERGY OHIO CROOK — (Oyas] E_ MA Suit TS ma REALS UMTED STA INDUSTRIES INC
Slide 23: Rural Telecom Market
Rural Telecom Market Universal Service Funds 1% 2% 3% 4% 5% USF Government levies to 7 subsidize universal 6 services 5 4 Unallocated 32 countries with USF $4.38B 3 2 Collected $6B by 15 Distributed countries worldwide 1 $1.62B 0 USO Government mandate for universal services from incumbent operators
Slide 24: Expanding Coverage in Latin America
Expanding Coverage in Latin America Colombia Peru 7,450 telephony and 1,220 6,000 telephony sites, Internet sites 600 Internet sites 7 million connected 6 million connected individuals individuals $104 million in subsidies $45 million in subsidies Panama Venezuela BOT project with Cable & Providing
Slide 25: 2007 and Beyond - Growth Engines
2007 and Beyond - Growth Engines Existing Markets Increasing Increasing demand demand for for Universal Universal Services Services Emerging Emerging markets markets Solutions Solutions and and turnkey turnkey projects projects Developed Developed Markets Markets Business Business Continuity Continu
Slide 26: 2007 Management Financial Objectives
2007 Management Financial Objectives Double-digit revenue growth in 2007 Increase our net R&D, sales and customer support expenses to focus on our growth strategy Operating income growth while maintaining operating margins Increase our net income margins as a result of a decrease in financial expens
Slide 27: Summary
Summary Established market leader in the satellite communications industry Partnership – focusing on long term relationships Complementary Business Units Global presence and focus Strong financial profile Satellite market is growing Gilat is growing within the market Gilat is expanding to new market
Slide 28: 2006 Financial Highlights
~ 2006 Financial Highlights
Slide 29: Consistent Revenue Growth
Consistent Revenue Growth In US$ millions Quarterly Revenues Year Ended Dec. 31 $248.7 $250.0 $209.4 $70.0 $65.4 $63.8 $200.0 19% $61.0 $58.6 $60.0 $56.0 $160.0 $50.0 $40.0 $120.0 $30.0 $80.0 $20.0 $40.0 $10.0 $0.0 $0.0 4Q05 1Q06 2Q06 3Q06 4Q06 2005 2006
Slide 30: Financial Highlights
Financial Highlights In US$ millions Quarterly Non-GAAP Net Income (1) Quarterly Net Income $6.0 $5.0 $5.1 $4.5 $5.0 $4.0 $4.0 $3.5 $3.0 $2.7 $3.1 $3.0 $2.7 $2.1 $2.0 $2.0 $1.2 $1.0 $1.0 $1.0 $1.0 $0.0 $0.0 Q405 Q106 Q206 Q306 Q406 Q405 Q106 Q206 Q306 Q406 Non-GAAP Net Income Net Income for Year End
Slide 31: Profit and Loss Highlights
Profit and Loss Highlights In US$ millions, except per share data Year ended December 31, 2006 2005 Revenues 248.7 209.4 Gross Profit 90.4 76.2 Gross Margin % 36% 36% R&D net 13.6 14.0 R&D Net % 5% 7% SG&A 63.3 60.8 SG&A % 25% 29% Operating income 13.4 1.4 Operating Income % 5% 1% GAAP Net income (l
Slide 32: Geographic Revenue Distribution
Geographic Revenue Distribution In US$ millions Year Ended Year Ended December 31, 2005 December 31, 2006 Europe Europe Africa 5% Africa 7% 6% 7% $18.3M $10.8 M $13.2 M` $18.6 M $86.5 M USA $94.0 M USA 41% 39% $ 62.0 M $79.6 M L. America L. America 30% 32% $36.9 M $38.2 M Asia Asia 18% 15% Year-over
Slide 33: Balance Sheet Highlights
Balance Sheet Highlights In US$ millions December 31, December 31, 2006 2005 Total cash * 182.6 112.9 Total debt 45.2 119.8 Trade receivables 29.6 33.7 Inventory 26.4 23.3 Shareholders’ equity 212.1 85.5 • Including cash and cash equivalents, short-term bank deposits, short and long-term restricted
Slide 34: Gilat Satellite Networks
™ a ™ Gilat Satellite Networks Boundless Communications
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