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Gilat Satellite Networks Ltd.

Investor Presentation Feb 13, 2018

6810_rns_2018-02-13_4fe97d58-2270-4004-b56a-a8a671d478fb.pdf

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FORM 6 –K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report on Foreign Issuer

Pursuant to Rule 13a – 16 or 15d – 16 of the Securities Exchange Act of 1934

For the Month of February, 2018

Gilat Satellite Networks Ltd

(Translation of Registrant's Name into English)

Gilat House, Yegia Kapayim Street Daniv Park, Kiryat Arye, Petah Tikva, Israel(Address of Principal Corporate Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F ☒Form 40-F ☐

Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ☐No ☒

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A Attached hereto is Registrant's IR presentation as posted on Registrant's website.

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Gilat Satellite Networks Ltd. (Registrant)

Dated February 13, 2018

By: /s/ Yael Shofar

Yael Shofar General Counsel

GILAT SATELLITE NETWORKS COMPANY OVERVIEW

6

February 2018

NASDAQ, TASE: GILT

FORWARD LOOKING STATEMENTS DISCLAIMER

Certain statements made in this presentation are forward-looking within the meaning of the Private Securities Ligation Reform Act of 1995. The words "estimate", "intend", "expect", "believe" and similar expressions are intended to identify forwardlooking statements. These forward-looking statements involve risks and uncertainties. Many factors could cause the actual results, performance or achievements of Gifterent from any future results, performance or achievements hat may be expressed or implied by such forward-looking statements, including, among others, changes in general economic and business conditions, inability to maintain market acceptance to Gild's to obtain financing and/or timely develop and introduce new technologies, products and applications. rapid changes in the market for Glat's products. Ioss of market share and prices resulting from competition, introduction of companies, inability to manage growth and expansion, loss of key OEM partners, inability to attract and retain qualified protect the Company's proprietary technology and risks associated with Gilat's international operation in Israel. Gilat undertakes no obligation to update or revise any forwardlooking statements for any reason. For additional information regarding these and uncertainies associated with Gial's business, reference is made to Gilat's reports filed from time to time with the Securities and Exchange Commission.

Unaudited/Non-GAAP Financial Measures

This presentation includes financial data that is not and financial data that was not prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP). Non-GARP financial measures appearing in this presentation consist of GAAP financial measures adjusted to exclude, non cash share-bases, imparment of goodwill and long lived assets, amortization of acquired intangible assets, restructuring, trade secrets litigation expenses under amnesty program and other non-recurring expenses and net income or loss from discontinued operations. Gilat believes these non-GAAP financial measures provide consistent and comparable measures to help investors understand future operating performance. However, our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read in conjunction with Gilat's consolidated financialstatements prepared in accordance with GAAP financial measures may differmaterially from the non-GAAP financial measures used by other companies.

OBAL FOOTPRINT - EXPANDING A DIVERSE CUSTOMER BASE

BOOMING CAPACITY - GEO + LEO/MEO (0)

Global HTS Bandwidth Supply, Demand and Price per Mbps

ABUNDANCE OF CAPACITY UNLOCKS NEW MARKETS

MOBILE

MOBILE - LEADING THE FAST GROWING SATELLITE BACKHAUL MARKET

Satellite Backhaul Market \$2,900M (2026) \$720M (2016)

"Gilat is the fastest growing player in the vertical. It recently won large projects, boosting its market share ... "

Source: NSR, March 2017

MOBILE - ENABLING "TERRESTRIAL-GRADE" USER EXPERIENCE

Affordable true LTE Backhaul

  • · Delivering "terrestrial-grade" User Experience
  • · Rapid network deployment

  • · Expanding coverage to: rural, highways, islands, tourist centers, campuses, metro-edge and metro areas
  • · Replacing leased lines and upgrading T1s/E1s

Global End-to-End Services

  • · Delivering comprehensive services
  • · Expertise in integrating ground and sat networks
  • 0 Experience with tier-1 MNOs worldwide
  • · Generating recurring revenues

T-MOBILE CELLULAR BACKHAUL PROJECT

(8)

  • o 70 Million subscribers, 308 million POP
  • o 50,000 employees
  • 2016 revenues: \$37.2 Billion
  • · Over 1M net adds per quarter, 17 quarters in a row

MULTI-YEAR MANAGED SATELLITE-BASED LTE BACKHAUL SERVICE

  • · Scope:
    • · Expanding T-Mobile's 4G/LTE coverage throughout the US
    • · Rural areas, destinations and highways where fiber delivery is challenging
    • · Emergency response and disaster recovery Miami, Puerto Rico
  • · Selection criteria
    • · Technology leadership Successfully passing T-Mobile's rigorous performance and high standards of customer experience
    • · Service leadership Providing an end-to-end satellite-based backhaul service, that meets T-Mobile's integration tests with its core network

MOBILITY

MOBILITY - SUPERIOR PASSENGER EXPERIENCE DRIVES DEMAND

3 MOBILITY - DELIVERING SUPERIOR PASSENGER EXPERIENCE

World's Fastest Speed In-Flight Connectivity

DOWNLOAD
(V 112.67 Mbps
Data Used: 92.0 MB
UPLOAD
6.61 Mbps
Data Used: 6.0 MB
PING
812 ms
SERVER LOCATION
Arlington Heights, IL
CLIENT LOCATION
LAT: 40.911 - LON: - 74.907
External IP: 12.130.118.0

~2,000 aircrafts
Aer Lingus AEROMEXICO AIR CANADA AIRFRANCE /
American & BRITISHAIRWAYS - ADELTA CO
IBERIA @ @JTA ﺎ ﺗﺄﻟﻴﻔﺎ ﻓﻲ ﺃﻭﺭﻭﺑﺎ ﻓﻲ ﺍﻟﻤﺪﻳﻨﺔ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ KL.MI virginatlantic a virginatlantic

Leading Performance Solutions for All In-Flight Connectivity Modules

RURAL BROADBAND

Broadband to unserved & underserved Large governmental projects in Peru and Colombia
· Bridging the digital divide · Peru - FITEL projects
o A \$2B+ program to build terrestrial networks
o Connecting communities and individuals
to the world via broadband
across Peru
o 8 Regional Projects awarded so far - 4 to Gilat (~\$400M)
- \$230M construction revenue
- \$170M operational revenue over 10 years
• Innovating to deliver affordable
Consumer and Enterprise solutions

Growing service revenues

Target:

Recurring revenues >\$50M / year, profitable, starting 2019

21 | Proprietary and Confidential

NATIONAL BROADBAND NETWORK (NBN) ENTERPRISE PROJECT

(S)

NBN Co and Speedcast Select Gilat for Business and Enterprise Satellite Service in Australia; Valued at Tens of Millions of Dollars

February 5, 2018

Gilat to deliver the satellite platform for NBN Co to serve nationwide business in regional and rural Australia

NBN - NATIONAL BROADBAND NETWORKS AUSTRALIA

  • · Established in 2009, government-owned, budget of \$49B
  • Objective is to extend broadband to rural Australia
  • © Launched 2 satellites (Skymuster 1A and 1B) 135 Gbps over 202 beams in 2016
  • · Active service to approximately 70,000 consumers

  • · Extending broadband connectivity to enterprises and government entities in rural Australia (agriculture businesses, banks, government service offices etc.)
  • · Speedcast (Australian service provider) as the prime vendor to provide full managed services, including: installations, maintenance of remote sites, BSS/OSS, program management
    • o Per Speedcast PR initial deal size of \$107M AUD (\$84M USD) expected to grow up to \$184M USD)
  • Gilat as a key supplier, providing: network design, technology, equipment and 10 years of network management (NOC)

  • · Solution is based on our cloud-based distributed X-architecture
  • · Single platform for multi-applications, giving satellite operators the flexibility to expand customer-base according to market demand (Enterprise, Cellular Backhaul, Consumer, Mobility)
  • · High spectral efficiency (meaning: more capacity per user or more customers on same capacity), enabling satellite operators to better monetize their investment

2017 SUMMARY

(8)

2016 2017
targets
2017
modified targets
2017
actual
Revenue \$280M \$280M-\$300M \$280M-\$290M \$283M
Adjusted EBITDA \$19.2M \$20M-\$24M \$22M-\$26M \$26.2M

FINANCIAL INDICATORS AND ANALYSIS

(0)

YEARLY PROFIT AND LOSS HIGHLIGHTS US\$ MILLIONS

Revenues
\$282.8M (\$279.6M)
1% YoY
Revenues
wo Terrestrial Infra
\$204.5M (\$188M)
9% YoY
Gross Profit
GAAP 29% (27%)
Non GAAP 31% (29%)
OPEX
GAAP \$71.6M (\$74.7M)
Non GAAP \$68.8M (\$68.6M)
Mobility Revenues
Mainly IFC
\$88.4M (\$62.9M)
41% YoY
Operating Profit
GAAP \$10.9M (\$0.8M)
Non GAAP \$18.5M (\$11.7M)
Operating Margin
GAAP 4% (0%)
Non GAAP 7% (4%)
Net Profit
GAAP \$6.8M (\$5.3M loss)
Non GAAP \$14.6M (\$5.6M)
Adjusted EBITDA
\$26.2M (\$19.2M)

30 | Proprietary and Cr

YEARLY PROFIT AND LOSS HIGHLIGHTS

US\$ MILLIONS, EXCEPT PER SHARE DATA

GAAP 2015 2016 2017
Revenues 197.5 279.6 282.8
Gross Profit 44.1 75.5 82.5
Gross Margin 22% 27% 29%
R&D net 22.4 24.9 28.0
ട&M 24.8 23.4 23.8
G&A 17.8 22.0 18.5
Other expenses* 22.7 4.4 1.3
Operating income (loss) (43.7) 0.8 10.9
Net income (loss) (52.3) (5.3) 6.8
Diluted EPS (1.16) (0.10) 0.12
Non-GAAP**
Gross Margin 30% 29% 31%
Operating Income (loss) (3.4) 11.7 18.5
Net income (loss) (11.8) 5.6 14.6
Adjusted EBITDA 6.1 19.2 26.2

@ QUARTERLY PROFIT AND LOSS HIGHLIGHTS

US\$ MILLIONS, EXCEPT PER SHARE DATA

GAAP Q4 16 01 17 02 17 03 17 Q4 17
Revenues 80.3 63.9 66.2 69.9 82.7
Gross Profit 24.2 17.3 19.6 20.3 25.2
Gross Margin 30% 27% 30% 29% 31%
R&D net 6.5 6.7 6.2 6.9 8.2
ട&M 6.2 5.8 5.6 5.8 6.6
G&A 4.2 4.0 5.3 4.3 5.0
Other expenses (income)* 0.9 0.8 0.7 - (0.2)
Operating income 6.5 0.0 1.9 3.3 5.6
Net income (loss) 4.5 (0.8) 2.1 2.1 3.4
Diluted EPS 0.08 (0.01) 0.04 0.04 0.06
Non-GAAP**
Gross Margin 32% 29% 31% 31% 32%
Operating Income 9.0 2.5 4.1 4.9 7.0
Net income 7.0 1.7 4.6 3.6 4.7
Adjusted EBITDA 10.8 4.2 5.9 7.1 9.0

* Include tax amnesty and trade secrets litigation expenses

** Adjustments reflect the effect of non-cash stock based compensation as per ASC 718, amortization of intangible assets related to shares

acquisition transactions, impairnents, restructuring costs, trade secrets litigation expense under amnesty program

GILAT REVENUES & TERRESTRIAL INFRASTRUCTURE BREAKDOWN তি US\$ MILLIONS

* Data excludes construction of the terrestrial infrastructure in Peru

Cash and equivalents1 DSO2 Total Assets
\$86.8 (\$111.6) 75 days (89 days) \$386.8 (\$383.2)
Cash From Operation Total Debt Shareholders equity
\$20.8M (\$10.8M) \$17.1 (\$21.5) \$218.3M (\$209.8M)

1) Including cash and cash equivalents, restricted cash and net of short term bank credits 2) DSO calculation excludes services segment revenues and AR

3 2018 GUIDELINES AND OUTLOOK - INCREASED PROFITABILITY US\$ MILLIONS

Revenues
\$285M-\$305M (\$282.8M)
Revenues
wo Terrestrial Infra
\$247M-\$263M (\$204.5M)
21%-29% YoY
>60%
1%-8% YoY Mobility Revenues
Mainly IFC
\$98M-\$103M (\$88.4M)
11%-17% YoY
of 2018 revenues
from current backlog
Adjusted EBITDA
\$30M-\$34M (\$26.2M)
15%-30% YoY
Operating Margin
GAAP 4% (4%)
Non GAAP 7% (7%)
Operating Profit
GAAP \$17M-\$21M (\$10.9M)
Non GAAP \$21M-\$25M (\$18.5M )

EXECUTING PROFITABLE GROWTH STRATEGY

2018 Management Objectives (US\$ millions)

Annual Revenues

Adjusted EBITDA

Revenues: \$285M - \$305M

GAAP Operating Profit: \$17M - \$21M

Adjusted EBITDA: \$30M - \$34M

IN SUMMARY - UNIQUELY POSITIONED FOR UNLOCKING OPPORTUNITIES

Oversupply of capacity unlocks new markets

Demand for plentiful affordable broadband, anywhere anytime, is soaring

Leading in the main growth areas -Mobile Backhaul & IFC Mobility

Focused on strategy execution and profitability

THANK YOU

Gilat Satellite Networks | [email protected] | www.gilat.com

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