Gilat Restructures, Changes Leadership
Petah Tikva, Israel-based Gilat Satellite Networks [Nasdaq: GILTF], a satellite networking technology services provider, is undergoing a major restructuring and leadership change aimed at helping it firm up its financial footing.
The company last week notched slightly improved revenues for the second quarter, reaching $52.1 million, up from $51.6 million for the same quarter in 2002 and $51.1 in the first quarter of 2003. However, Gilat’s operating loss for the second quarter hit $31.5 million, while the quarter’s net loss totaled $36.2 million, or a loss of $2.79 a share.
The results included $21 million in accounting write-offs and restructuring charges. One encouraging sign is that the company only decreased its total cash and cash equivalents during the quarter by $2.5 million, keeping it in a “stable cash position,” Gilat officials said.
The second quarter also ushered in significant changes among the company’s senior management and board of directors. Shlomo Rodav has taken over as chairman, while Oren Most is the new president and CEO. In addition, Erez Antebi is stepping down as COO effective Sept. 15 and Doron Steiger has left the company’s board.
With its financial restructuring process completed, Gilat now is streamlining operations to boost efficiency and reduce costs. The effort includes a variety of measures, such as organizational and structural changes and office consolidation. The intent is to increase efficiency, as well as cut its workforce by 13 percent and its labor costs by 30 percent.
Spacenet, a Gilat subsidiary, was highlighted for winning a number of new contracts during the second quarter. Deals were signed between Spacenet and Arby’s restaurant franchisee RTM Restaurant Group (see box), rental store chain Rent-Way, grocery store chains such as The Kroger Co. as well as other companies.
(Tim Perrott, Gilat, 703/848-1515)