The net loss for the second quarter of 2003, included charges relating to restructuring charges in the amount of US$2.2 million and impairment of long-lived assets in the amount of US$18.9 million.

Included in the second quarter of 2004 results are US$7.9 million in Depreciation and Amortization expenses as compared to US$7.6 million for the same period last year.

Revenues for the six month period ended June 30, 2004 were US$114.9 million and net loss was US$(8.3) million or US$(0.37) diluted per share. The net loss for the six-month period ended June 30, 2004 includes charges relating to inventory write offs in the amount of US$2.0 million.

By comparison, revenues for the six-month period ended June 30, 2003 were US$103.2 million, and net income was US$114.0 million or US$13.17 diluted per share.

The net income for the six-month period ended June 30, 2003 included a gain from restructuring of debt in the amount of US$181.1 million offset by charges relating to inventory writes offs in the amount of US$3.2 million, restructuring charges in the amount of US$2.2 million and impairment of long-lived assets in the amount of US$23.9 million.

Included in these six months results are US$16.0 million in Depreciation and Amortization expenses in the six-month period ended June 30, 2004 as compared to US$14.2 million for the same period last year.

In accordance with the FASB Interpretation No. 46, Consolidation of Variable Interest Entities ("FIN 46"), Gilat has consolidated the financial results of StarBand Communications beginning from the first quarter of 2004.

As a result of the above, the Company recorded revenues of US$7.3 million, and a net loss of US$0.2 million in the second quarter of 2004 and revenues of US$14.3 million, and a net income of US$0.2 million in the six-month period ended June 30, 2004.

The Company reported total cash balances (including cash and cash equivalents, short-term bank deposits, short- and long-term restricted cash and restricted cash held by trustees less short-term bank credits) of US$105.3 million as of June 30, 2004, an increase of US$10.1 million from the cash balance of US$95.2 million as of March 31, 2004.

The above increase in cash balances includes the effect of restricted cash received from a government for a project in Latin America offset by cash paid for the purpose of acquiring all of the remaining shares of rStar Corporation. This acquisition of shares was concluded on April 7, 2004.

"We are pleased that for the second consecutive quarter we have improving financial indicators," said Shlomo Rodav, Chairman of the Board and CEO of Gilat.

"We have generated positive earnings before interest, taxes, depreciation and amortization (EBITDA) over the past two consecutive quarters and we expect to be EBITDA positive for 2004 as a whole. During the last year and a half, Gilat has been engaged in a comprehensive improvement process to maximize efficiency and we are now beginning to see the fruits."

"Looking forward, our improved financial performance together with the well received introduction of our revolutionary SkyEdge product family, and our first customer's interest in this product, we are poised to grow the Company and to improve our competitive position in the market."

Continued deal funnel - Gilat announced new deals in Africa, Latin America, Asia and the United States:

Spacenet will provide a Connexstar broadband satellite network to a minimum of 250 Wendy's Old Fashioned Hamburger restaurants. The Connexstar VSAT high-speed network will support a range of retail networking applications, including fast credit authorization, PCanywhere remote control solution, Clearview back-office service management application, and point-of-sale polling.

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VSAT NEWS

Gilat, ViaSat, And EMS Choose SkyStream Data-Over-Satellite Solutions
Sunnyvale CA (SPX) Aug 04, 2004
SkyStream Networks, the leader in IP video and data delivery, Tuesday announced that leading VSAT systems providers have integrated SkyStream's data-over-satellite solutions in over 60 percent of the DVB-RCS VSAT (very small aperture terminal) hub systems deployed today.