Ladies and gentlemen, thank you for standing by. Welcome to Gilat’s First Quarter 2013 Results Conference Call. All participants are at present in a 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, May 08, 2013. I would now like to turn the call over to Philip Carlson of KCSA to read the Safe Harbor statement. Philip, please go ahead.

Thank you. Good morning and good afternoon everyone. Thank you for joining us today for Gilat’s first quarter 2013 results conference call. A recording of this call will be available beginning at approximately noon Eastern Time today, May 08, until May 10, 2013 at noon. Our earnings press release and website provides details on accessing the archived call. Investors are urged to read the forward-looking statements in our earnings releases, which state that statements made in 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 can be found in our reports filed with the Securities and Exchange Commission. With that said, on the call today is Erez Antebi, Gilat’s Chief Executive Officer, and Yaniv Reinhold, Chief Financial Officer. Erez, please go ahead.

Thank you, Phil, and good day everyone. I would like to begin by providing a high-level overview of the first quarter and then offer a more detailed review of some of the progress we have experienced in each of our business divisions. I will then turn the call over to Yaniv who will walk you through the quarter's financial results. I will then summarize and open the call for questions. The first quarter was highlighted by solid performance across all our divisions, including year-over-year increases in revenue, operating income and EBITDA. Revenue in the first quarter increased by 8% to $82.8 million, our non-GAAP operating income was $1 million compared to an operating loss of $0.3 million, and our EBITDA reached $5.1 million or 6.2% of revenues compared to $3 million or 3.9% of revenues for the same period in 2012. In addition to the increase in revenue and operating income, we also increased our total cash by $3.3 million during the quarter. Operationally, we have continued our cost-cutting efforts, which includes a limited workforce reduction and streamlining of operations, as we continue to integrate Raysat and Wavestream into Gilat. I will now discuss some of our business highlights for the quartet, starting with our Commercial Division. This quarter, our Commercial Division was highlighted by a number of successful implementations of existing contracts, coupled with significant technology advancements in our strategic growth area. To begin, I would like to discuss the advancements we have made during the quarter in the growing segment of providing broadband Internet access via multi-spot beam Ka and Ku-band satellite networks. As an example of broadband services provided over Ku band, we have our implementation at NBN Co. in Australia which is progressing very well. As a reminder, NBN is an Australian government initiative to provide…

Thanks, Erez, and hello 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 non-cash stock-based compensation as per ASC 718, and amortization of intangible assets resulting from the purchase price allocation. 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 first quarter of 2013, revenues for the first quarter of 2013 were $82.8 million compared to $76.6 million for the same period in 2012. The increase in revenue is mainly attributable to our continued delivery of NBN projects in Australia. On a non-GAAP basis, our gross margin this quarter reached approximately 32% compared to approximately 34% in the comparable period last year. As we have mentioned over the past few quarters, our gross margin is affected by the regions in which we operate and the types of deals which we recognize. A decrease in our gross margin this quarter was primarily due to our ongoing installations in Australia at NBN which carries a lower margin than our other projects. On a non-GAAP basis, gross R&D expenses were $7.5 million this quarter compared to $8.2 million in the same quarter of 2012. R&D is becoming more efficient as we shift towards the lower-cost facilities. We are continuing to invest R&D funds in our Commercial Division for SkyEdge II to support features for vertical market such as cellular backhaul and oil and gas. We are also investing in new acceleration technologies and enhancements for Internet access for our SkyEdge II-c Platform and for cost-reduction efforts. On the defense side, we are progressing with the development of the EagleRay 5000 antennas which will be one of…

Thank you, Yaniv. Before we conclude today's call and turn to your questions, I would like to make a few closing remarks. We started the year better than last year as we continue to execute on our strategic plans with both existing projects and new deals. Our expansion into the broadband market has been well received as we have been making significant strides in our Commercial Division with SBBS and are ahead of schedule with our NBN contract. On the defense side, while sequestration is limiting our ability to forecast defense contracts in the U.S., our pipeline in the international markets is growing. We have also seen ongoing sales to defense system integrators as well as integrators in the aviation marketplace. Furthermore, our Services Division continues to perform as we deliver new client wins for our managed services as well as our ongoing execution of existing contracts and the pipeline in Peru. Due to the seasonality of our business, our first quarter results have been historically weak. We anticipate our revenues will continue to grow during the year. As such, we are reaffirming our management objectives that we announced at the beginning of the year and anticipate revenues in the range of $350 million to $360 million with EBITDA margins of 9%. That concludes our review. We would now like to open the floor for questions. Operator, please.

(Operator Instructions) The first question is from Michael of Sidoti and Company. Please go ahead.

If possible, can you shed some additional color on your efforts in the oil and gas vertical? Did this segment represented a significantly growing portion of your revenue, and if so, can you shed some color on where it lies within your strategic growth plan?

I think that the two major areas that we consider our growth areas are broadband Internet access and satellite-on-the-move. So, obviously oil and gas does not make it that high up the list. It is a segment in our regular enterprise business. We are seeing some business in that for quite a few years. There may be some additional growth but I don't think that that's a segment that I would specify as something that is a significant growth driver for us.

The next question is from Gunther Karger of Discovery Group. Please go ahead.

I just wanted to say that you guys are on a good track, congratulations and keep it moving. Have a pleasant day.

Thank you very much.

The next question is from Andrew Uerkwitz of Oppenheimer. Please go ahead.

One quick one here on the commercial side. What do you consider the size of the market there? As you guys continue to get good wins, how much more is there or how much should we expect there over the next couple of years?

I think that I would – I will rephrase this. I think that I would define the market or divide the market I think into two parts. One would be the traditional enterprise market, connectivity to banks, businesses, et cetera, which has been a traditional business of what is now the commercial segment for quite a few years, and I think that we are not going to see any significant growth in that. However, in the broadband Internet access, I think we are going to see significant growth because what's happening in this market is we are seeing more and more plans to launch multi-spot beam satellites, primarily in Ka but also in Ku, and these satellites will bring about an abundance of space segment on one hand. On the other hand, it will be space segment that will come at a significantly lower cost point than the traditional Ku and C-Band space segment is. And from another perspective, because it's a spot beam, these are spot beam satellites, then they will be more attuned towards the Internet broadband and not like the current traditional satellites towards video distribution. All of these factors put together, and as these satellites come up, I think we're going to see a lot more demand for broadband over satellite Internet access and there will be a significantly growing demand for ground segment. And that's where we see most of the growth in the Commercial Segment, that's the reason we have invested heavily in developing the platform that's geared towards that, which is the SkyEdge II-c that I discussed, and we are starting to see the first implementation of that network. So I think we are going to see a lot more growth over there.

(Operator Instructions) The next question is from Louis DiPalma of William Blair. Please go ahead.

This is Louis DiPalma in for Jim Breen. I was wondering what percentage of VSATs shipped for the quarter were Ka-band versus Ku-band?

The majority is still Ku I think even by far, but Ka is now picking up. Really the SBBS network that I talked about is our first Ka implementation, it's not our first multi-spot beam implementation but it's our first Ka implementation. So this is now picking up but the majority is still Ku.

And when do you expect for Ka to hit an inflection point? Are there any significant events or deployments in the pipeline that you think that Ka-band will pick up?

What I can say on that is that there are more and more multi-spot beam satellites, and I'll refer to them as multi-spot beam because I think that's the key factor, most of them will be Ka but some of them will be Ku as well. And as they come up and decisions are being made on the ground segment, we'll see a growing number of terminals ship for those. How fast will that happen, when is there an inflection point, that's harder for me to say. It's still, for now, this is still primarily a Ku market.

Great. And as a follow-up to the last question and answer, are the economics generally more favorable for the multi-spot Ka-band versus the Ku?

Are you asking, I just want to clarify the question, are you asking, are the economics more favorable for multi-spot Ka versus multi-spot Ku?

Yes.

Okay. No, I think that generally the economics of those should be about the same.

Okay, great. Thank you very much.

There are no further questions at this time. Before I ask Mr. Erez Antebi 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 1-888-782-4291. In Israel, please call, 03-925-5900. Internationally, please call 972-3-925-5900. Mr. Antebi, would you like to make your concluding statement?

Just want to thank everyone for joining the call and listening to us, and I'd like to wish you all a good day. Thank you very much.

Thank you. This concludes Gilat’s first quarter 2013 results conference call. Thank you for your participation. You may go ahead and disconnect.