The wave of layoffs in the economy has reached Gilat Satellite Networks Ltd. (Nasdaq: GILT; TASE: GILT). After Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA), Oil Refineries Ltd. (TASE:ORL), Comverse Inc. (Nasdaq: CNSI) and others, Gilat will fire scores of employees in Israel and overseas in the next few days. Gilat had 1,268 employees at the end of 2012, including 429 employees in Israel, fewer than in 2011.
Gilat said in response that it was streamlining in order to continue to strengthen its strategic focus on its core businesses and main target markets.
More than 200 of Gilat's employees work for Spacenet Inc., the sale of which Gilat has announced. This means that Gilat's workforce will shrink substantially this year.
Gilat supplies very small aperture terminals for satellite communications to military and civilian customers. In recent months, the company's defense unit has been facing delays because of the US budget cuts, which resulted in the company lowering its guidance for 2013.
Gilat has a market cap of $205 million. Its largest shareholders are First Israel Mezzanine Investors Fund (FIMI) and York Capital Management. It posted $163 million revenue in the first half of 2013, similar to the first half of 2012, but its GAAP-based net loss widened to $6.3 million from $2.2 million. It posted a non-GAAP net loss of $2.2 million in the first half, compared with a non-GAAP net profit of $2.5 million in the corresponding half of last year.
In an interview with "Globes" a year ago, Gilat CEO Erez Antebi said, "We are aware that we must achieve substantially higher profits than at present." He added that the path to this goal lay via growth engines that the company had identified and greater efficiencies. It now appears that greater efficiency is to be achieved through layoffs.
Published by Globes [online], Israel business news - www.globes-online.com - on October 21, 2013
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