Phil Carlson - Investor Relations Dov Baharav - Interim Chief Executive Officer and Chairman Adi Sfadia - Chief Financial Officer

Ladies and gentlemen, thank you for standing by. Welcome to Gilat’s Fourth Quarter and Year End 2015 Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded, February 17, 2016. I would now like to turn the call over to Phil Carlson of KCSA to read the Safe Harbor statement. Phil, please go ahead.

Thank you. Good morning and good afternoon everyone. Thank you for joining us today for Gilat’s fourth quarter and year end 2015 results conference call. Recording of this call will be available beginning at approximately noon Eastern Time today, February 17 until February 20 at noon. Our earnings press release and website 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 maybe 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 can 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 Adi Sfadia, Chief Financial Officer. Dov, Please go ahead.

Thank you, Phil and good day everyone. I would like to begin with the word about our financial results followed by high level business overview. Following my remarks, Adi will discuss our quarterly and yearly results in greater detail. I will then conclude and open the call for questions. From a financial perspective, 2015 was a challenging year for Gilat. However, the year ended with a strong fourth quarter, demonstrated in wins, revenue and profit. 2015 was also characterized by successfully laying down the infrastructure for the future profitable growth of the company by adapting a new strategy. In the second half of 2015, this strategy was translated into major wins in our core growth areas as I will explain later. Looking at the full year, 2015 ended with revenue of $197.6 million, 16% lower than 2014 revenue with reduced profitability. Revenues for the fourth quarter of 2015 were $67.7 million by far higher than the first three quarters of 2015 and compared to $73.1 million for the same period in 2014. EBITDA for the quarter was $11.1 million compared to $10.4 million for the same period in 2014. The revenue for the fourth quarter were lower than estimated as Adi will elaborate later. We entered 2016 with high backlog. And as such, we have set our management revenue objectives for 2016 to range between $290 million to $310 million with EBITDA between $18 million to $24 million. Let me now elaborate regarding our wins in the fourth quarter, which are in line with our strategic direction. Our impact on activity initiatives, a major pillar of our strategy took off in 2015 and accelerated in the fourth quarter. Our Wavestream transceivers are second to standout for ISP as evidenced by growing number of orders from Honeywell. Earlier in the year,…

Thank you, Dov and good morning everyone. I would like to remind everyone that our financial results are presented both on a GAAP and non-GAAP basis. The GAAP financial results include the effect of stock-based compensation, amortization of purchased intangibles, impairment of goodwill and long-lived assets, restructuring costs and net income or loss from discontinued operations. Reconciliation table in our press release highlights this data and our non-GAAP information is presented, excluding these items. I will start with some brief highlights of our 2015 full year results. Total 2015 revenues were $197.5 million, 16% lower than previous year. On a GAAP basis, we are reporting yearly operating loss of $43.7 million, a net loss of $52.3 million or a loss of $1.19 per diluted share. This compares with operating income of $5 million, a net loss of $1.5 million or a loss of $0.04 per diluted share in the previous year. On a non-GAAP basis, we are reporting yearly operating loss of $4.2 million and net loss of $12.6 million or a loss of $0.29 per diluted share. This compares with operating income of $13.1 million and net income of $7.4 million or $0.17 per diluted share in 2014. Moving to our financial highlights for the fourth quarter of 2015, revenues for the fourth quarter of 2015 were $67.7 million compared to $73.1 million in the same quarter last year and $40.3 million in the previous quarter. In the fourth quarter, we had better than expected revenues both in mobility and commercial segments, offset by lower than expected revenues in the Fitel projects in Peru mainly due to temporary delays resulting from some regulatory issues. During the fourth quarter, we recorded impairment of long-lived assets of $10.1 million related to our Colombia Kioscos project due to expected future losses from…

Thank you, Adi. Before we turn to your question and our answers, I would like to summarize, with a few closing remarks. We ended the year with a good fourth quarter, demonstrating strong profitability and significant wins. Our five strategic pillars IFC, China, rural broadband, HTS and managed services with the strong backlog accumulated as of December 31 give us the confidence that we can generate profitable growth in 2016. As such, we have set our management revenue objectives for 2016 to be between $290 million to $310 million with EBITDA between $18 million to $24 million. That concludes our review. And we would now like to open the floor for questions. Operator, please.

I would like to thank everyone for joining us on this call. Thank you very much and have a good day.

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