Welcome to Gilat's Second Quarter 2015 Results Conference Call. All participants are at present in listen-only mode. Following the management’s formal presentation, instructions will be given for the question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded, August 12, 2015. I would now like to turn the call over to Phil Carlson of KCSA to read the Safe Harbor statement. Phil, please go ahead.

Okay. Good morning and good afternoon everyone. Thank you for joining us today for Gilat's second quarter results conference call. A recording of this call will be available beginning at approximately noon Eastern Time today, August 12, until August 14 at noon. Our earnings press release and web site provide details on accessing the archived call. Investors are urged to read the forward-looking statements in our earnings releases, which state that statements made on this earnings call which are not historical facts may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All forward-looking statements, including statements regarding future financial operating results, involve risks, uncertainties, and contingencies, many of which are beyond the control of Gilat and which may cause actual results to differ materially from anticipated results. Gilat is under no obligation to update or alter our forward-looking statements whether as a result of new information, future events or otherwise. We expressly disclaim any obligation to do so. More detailed information about risk factors could be found in our reports filed with the Securities and Exchange Commission. With that said, on the call today is Dov Baharav, Gilat's Interim CEO and Chairman of the Board; and Yuval Ronen, Chief Financial Officer. Dov, please go ahead.

Thank you, Phil, and good day everyone. I would like to provide a business summary for the first quarter and discuss our future business for 2015 and beyond. And then Yuval will discuss our financial results. I would then conclude and open the call for questions. Our second quarter results, a bit weaker than expected. We reiterate our management objective to revenue target of $250 million to $260 million, but modified down our EBITDA target to $20 million to $21 million for fiscal year 2015. The result of this quarter and of 2015 are negatively impacted by two manufacturers, the first is the weaker than expected performance of our defense sector, mainly resulting from delayed order from the US DOD and other clients, coupled with lower than expected margins. The second factor is the weaker than expected performance of Colombia Kioscos project, to which we remain committed due to number of factors, mainly additional planed revenue leveraging our network, which will not materialize coupled with the sharp devaluation of the Colombian Peso. As we shift to second half of the year, we expect improvement in our business, which will accelerate in Q4 due to the growth in all sectors, mainly in our projects in Peru and in alignment with our strategy and growth driver. As the market turns to High Throughput Satellite, HTS, Gilat is well placed to become a strategic partner of satellite operators. In addition, we are seeing a growing market interest of our Cellular Backhaul offering that includes our SkyEdge II-c Capricorn and Satellite Solution, similarly bringing broadband internet to rural areas to present promising opportunities. Finally, our F-14 airborne mobility started to generate good results with the Wavestream offering and we anticipate even further growth with the wall house of full terminal in the future. I…

Thank you, Dov, and hello everyone. I would like to remind everyone that our financial results are presented both on a GAAP and a non-GAAP basis. The GAAP financial result include the effect of non-cash stock options expenses as per ASC 718, amortization of intangible assets resulting from the purchase price allocation and net income and loss from discontinued operations. The reconciliation table in our press release highlights this data and our non-GAAP information is presented excluding these items. Now moving to our financial highlights for the second quarter of 2015, our revenues for the second quarter of 2015 were $44.3 million compared to $54.1 million in the second quarter of 2014. The decrease is mainly due to weaker performance of our defense sector and delayed orders in our commercial division. In the second quarter, we saw a decrease in our GAAP gross margin to 24.9%, down from 35.7% in the same period of 2014. The decrease in profitability is mainly due to reduced revenue and to lower profitability in the Columbia kiosk project as well as in some defense related order. Gross R&D expenses on a GAAP basis were $6.6 million this quarter compared to $6.9 million in the same quarter of 2014. Moving to selling, marketing, general and administrative, on a GAAP basis, expenses for the quarter decreased to $11.9 million compared to $13.5 million for the same quarter last year. Selling, marketing, general and administrative were lower due to reduced variable expenses. We regularly use supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decision. We believe these non-GAAP financial measures provide consistent and comparable measures to help investors understand our current and future operating cash flow performance. On a non-GAAP basis, operating loss was $5.2 million in the second quarter of 2015 compared to operating income of $1.5 million in the comparable quarter of 2014. Our GAAP operating loss for the second quarter was $7.2 million as compared to an operating loss of $0.5 million for the same period in 2014. On a GAAP basis, net loss for the quarter was $9.1 million or a loss of $0.21 per diluted share compared to net loss of $1.4 million or a loss of $0.03 per diluted share in the same quarter of 2014. EBITDA for the second quarter of 2015 was a loss of $2.5 million compared to an income of $3.9 million in the comparable quarter of 2014. The decrease is mainly due to lower revenues and gross margin, partially offset by lower operating expenses. As of June 30, 2015, our total cash balances including restricted cash net of short-term bank credits increased to $95.9 million compared to $53.5 million as of December 31, 2014. This increase is mainly due to payment received for the Fitel project. Shareholder equity at the end of the quarter totaled $215 million. That concludes our financial review for the quarter and now I would like to turn the call back to Dov. Dov?

Thank you, Yuval. We expect to see growth in profitability and in revenue in the second half of the year which would accelerate in Q4. Our bid in China which substantiate our strategy as well as the issuance of our growth driver performance give us the confidence in Gilat’s profitable growth during 2016 and beyond. That concludes our review and we would like to open the floor for Q&A.

Thank you. Ladies and gentlemen, at this time, we will begin the question-and-answer session. [Operator Instructions] The first question is from Gunther Karger of Discovery Group. Please go ahead.

Yes. Good morning or good afternoon. What is the basic reason for the shortfall in business from the United States Department of Defense?

Okay, it’s Dov. We work usually as a subcontractor to major integrator. We will advice and notified by some of our system integrator that some of the orders from the DoD have been delayed. So why they have been delayed? Whether they will reappear, we don’t know. So the only information that we have is that, they have been delayed.

Thank you.

[Operator Instructions] There are no further questions at this time. Before I ask Mr. Dov Baharav to go ahead with his closing statement, I would like to remind participants that a replay of this call is scheduled to begin two hours after the conference. In the U.S., please call 1-877-456-0009. In Israel, please call 039255921. Internationally, please call 972-3-9255921. Mr. Baharav, would you like to make your concluding statement?

Yes. Thank you for everyone participating in this call and listening to us, and hope to see you and talk to you next quarter. Thank you.

Thank you. This concludes Gilat’s second quarter 2015 results conference call. Thank you for your participation. You may go ahead and disconnect.