2 Driving the Satellite Industry for Over 25 Years Leading provider of satellite-based communication products and servicesDesigner and manufacturer of ground segment and networking communication equipment, including…VSAT systems (Very Small Aperture Terminals = modems)Small mobility terminals#1 or #2 worldwide VSAT market share outside of North America#1 (or #2) Satcom provider in all satellite segmentsShipped over 1.2M terminals to dateGrowth StrategyBroadband driven by High Throughput Satellites (HTS) with low cost bandwidthSatellite On-The-Move (SOTM); Commercial and Defense2015 Management Objectives Update:Revenue: between $250 and $260 millionEBITDA: between $26 and $28million
3 Global Presence, Local Support 930 Employees Worldwide5 R&D Centers 3 NOCs (Network Operation Centers) 21 Sales Offices 90 Countries500 + active networksR&D CenterNOCSales officeRevenue By Geographies 2013
4 Among Our Diverse Customer Base and Partners Satellite CompaniesTelcos / MNOsSatcom Operators and ISPsSystem integratorsGovernments
8 Partnering with HTS Providers Agreements in place with SES, Thaicom, Inmarsat and O3BValue Proposition:Multiple applications on same platform (Broadband, Enterprise, Cellular Backhaul, Mobility,..)Strategic position as technology partnerOpen System: Multiple ISPs can configure own business offeringFlexible business models: Risk sharing OPEX modelGround equipment, VSATs, HUBs, Gateways and Network OperationsCollaborative sales and distributionActively pursuing creative partnerships with other leading satellite providersJCP
10 Ka Band Leaders - Gilat and SES SBBS ProjectOur SkyEdge II-c hubs and consumer equipment support SES’s Ka-band service20Mbps 30 euros/monthTens of thousands of Consumer Premise Equipment already delivered (and more on the way)"Gilat's advanced VSAT technology allows us to optimize our service proposition and increase our competitive advantage.”Patrick BiewerManaging Director of SES Broadband Service
11 CellEdge: Small Cell Coverage for Unserved Areas Fully integrated 2G/3G solution: VSAT and energy solution optimized for low-cost, rapid deploymentValue proposition to MNOs: “Tell us where you want coverage and within a few months you will have it.”Example: TIM BrasilTurnkey solution for 20 remote sites in under 2 months, including site survey and acquisition, equipment delivery, installation and activation of the networkRepeat order for additional 30 sitesRuralCom CanadaSites running along the Canada – Alaska highway
12 Super-fast LTE Backhaul Made Possible With Capricorn SkyEdge II-c Capricorn: 200Mbps – the world’s fastest TDMA VSATEnable MNOs to connect to LTE network via satelliteValue proposition to MNOs:“Rapid deployment of LTE in suburbs to capture market share”Initial orders received for Tier-1 Asian operator
14 Airborne Connectivity - Today Ka-Band AeroStream™ Transceiver“The combination of field experience and innovative technology was a critical factor in our selection of Wavestream’s Ka-band transceivers for integration into our Global Xpress antenna system.”Chris WebsterHoneywell Aerospace
20 Services Division - Gilat Peru and Gilat Colombia Markets & Applications: Developing countries, Broadband and communications coverageCustomers: Government USO entitiesDriving Growth: Bridging the digital divide
21 Services Division: Gilat Peru Awarded $285 Million BOT Regional Telecommunications Infrastructure project by Fitel in Peru. 3 bids won for 3 regionsFiber-optic Transport Network - Build and operate for 1 yearWireless Access Network - Build and operate for 10 yearsBringing high quality connectivity to rural villages in need of broadband services. Connecting more than 600 government institutionsAdditional revenues expected from selling capacity on new network to Telco’s and MNO’sIAL project operationalProviding telephony and internet services to 9,000 villagesGovernment expected to issue more projects like this over next 2 years
22 Services Division: Gilat Colombia $99m project from Colombia’s MINTIC:Deployment finished and operational3 years’ service (2 quarters of service in 2014)Internet and educational services to 1,900 rural communities and schools
24 Annual Financial Indicators ($M) Annual RevenuesEBITDAOperating Income (loss)GAAPNon GAAP24
25 Quarterly Financial Indicators ($M) Quarterly RevenuesEBITDAOperating Income (loss)Non GAAP25
26 Profit and Loss Highlights - Non GAAP* US$ millions, except per share dataThree months endedDecember 31,Year endedRevenues73.155.7235.1234.9Gross Profit27.021.588.784.6Gross Margin37.0%38.5%37.7%36.0%R&D net6.07.424.727.4S&M22.214.171.124.9G&A6.619.721.9Operating Income (loss)7.5(0.1)13.14.4Net income (loss)(1.0)(1.1)Diluted EPS0.10(0.02)0.17(0.03)EBITDA10.42.523.416.3* Adjustments reflect the effect of non-cash stock options expenses as per ASC 718, amortization of intangible assets related to share acquisition transactions and net income (loss) from discontinued operations.
27 Balance Sheet Highlights – Quarter to Quarter US$ millionsDecember 31,2014September 30,Cash Balances *53.546.7Total Assets364.9352.1Total Debt30.931.1Shareholders’ equity225.1222.6* Including cash and cash equivalents, restricted cash and net of short term bank credits.
28 2015 Management Objectives Revenues between $250M to $260MEBITDA between $26M to $28MH2 expected to be significantly stronger than H1
29 SummarySatellite communication needs will significantly increase in the near futureHTSMobilityCellularSignificant opportunities in Government funded rural telecom infrastructure projectsGilat is well-positioned to take advantage of these marketsFinancial situationSignificant improvement in profitabilityHealthy balance sheetContinued growth expected
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