– Gilat has been selected by Synterra, one of Russia’s largest telecommunications operators, to provide a 1,000-site SkyEdge broadband satellite network for use by Russian Post. Gilat was chosen for the second phase of Russian Post’s VSAT network following the successful deployment of an initial SkyEdge network which covers approximately 750 Russian Post sites.

– Gilat has begun deployment of a 1,500-site SkyEdge II broadband satellite network for Axesat, one of Latin America’s leading satellite service providers. Axesat will use the Gilat SkyEdge II VSATs to provide enterprises in Latin America with private networking services including interactive data, broadband Internet access, and Voice over Internet Protocol (VoIP). Axesat is a long time customer of Gilat, having deployed Gilat 360e and SkyEdge networks in the past.

– Spacenet signed a contract to provide IHG (InterContinental Hotels Group) an upgraded satellite data network and managed network services to 2,500 locations across the United States and Canada. IHG is one of the world’s largest hotel groups by number of rooms and operates seven hotel brands including InterContinental Hotels & Resorts, Crowne Plaza, Hotel Indigo, Holiday Inn, Holiday Inn Express, Staybridge Suites and Candlewood Suites.

– Gilat provided Petróleo Brasileiro S.A. (Petrobras) a 500-site Gilat SkyEdge broadband network platform for enterprise and offshore maritime applications. Petrobras is a Brazilian-based international energy company, and is one of the fifteen largest oil companies in the world. Petrobras is using the SkyEdge VSAT network for a variety of interactive web, video, SCADA, and telephony applications.

Gilat will host a conference call today with an accompanying slide presentation at 9:00 AM EST. In order to ensure audio access, participants from the U.S. should dial in at (888) 281-1167 and international participants should dial in at (972) 3-918-0692. The presentation may be accessed through the Company’s website at www.gilat.com prior to the call. The call will also be available as a Webcast on the Company’s website at: www.gilat.com and will be archived for 30 days.

Notes:

(1) The attached summary financial statements were prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP). The attached summary financial statements for the first quarter of 2008 are unaudited. To supplement the consolidated financial statements presented in accordance with GAAP, the Company presents Gilat’s net income, EBITDA and earnings per diluted share, before the impact of a non-cash impairment of long lived assets and before share-based payment charge, which is the non-cash stock option expense as per SFAS 123 (R). Non-GAAP presentations of net income, EBITDA and earnings per share are provided to enhance the understanding of the Company’s historical financial performance and comparability between periods.

(2) Operating income before depreciation, amortization, non cash stock option expenses as per SFAS 123(R) and exceptional items (‘EBITDA’) is presented because it is a measure commonly used and is presented solely in order to improve the understanding of the Company’s operating results and to provide further perspective on these results. EBITDA, however, should not be considered as an alternative to operating income or net income for the period as an indicator of the operating performance of the Company.

Similarly, EBITDA should not be considered as an alternative to cash flows from operating activities as a measure of liquidity. EBITDA is not a measure of financial performance under generally accepted accounting principles and may not be comparable to other similarly titled measures for other companies. EBITDA may not be indicative of the historic operating results of the Company; nor is it meant to be predictive of potential future results. Reconciliation between the Company’s Operating income and EBIDTA is presented in the attached summary financial statements.

About Gilat Satellite Networks Ltd.

Gilat Satellite Networks Ltd. (NasdaqGM: GILT) is a leading provider of products and services for satellite-based communications networks. The Company operates under three business units: (i) Gilat Network Systems (“GNS”), which is a provider of network systems and associated professional services to service providers and operators worldwide; (ii) Spacenet Inc., which provides managed services in North America for businesses and governments through its Connexstar service brand and for consumers through its StarBand service brand; (iii) Spacenet Rural Communications, which offers rural telephony and Internet access solutions to remote areas primarily in Latin America.

Gilat was founded in 1987 and has shipped over 670,000 Very Small Aperture Terminals (VSATs) to more than 85 countries across six continents. Gilat’s headquarters is located in Petah Tikva, Israel. The Company has 16 sales and service offices worldwide. Gilat markets the SkyEdge ™ Product Family which includes the SkyEdge™ Pro, SkyEdge™ IP, SkyEdge™ Call, SkyEdge™ DVB-RCS and SkyEdge™ Gateway. In addition, the Company markets numerous other legacy products.

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Certain statements made herein that are not historical are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. The words “estimate”, “project”, “intend”, “expect”, “believe” and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties. Many factors could cause the actual results, performance or achievements of Gilat to be materially different from any future results, performance or achievements that 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 Gilat’s products, inability to timely develop and introduce new technologies, products and applications, rapid changes in the market for Gilat’s products, loss of market share and pressure on prices resulting from competition, introduction of competing products by other companies, inability to manage growth and expansion, loss of key OEM partners, inability to attract and retain qualified personnel, inability to protect the Company’s proprietary technology and risks associated with Gilat’s international operations and its location in Israel. For additional information regarding these and other risks and uncertainties associated with Gilat’s business, reference is made to Gilat’s reports filed from time to time with the Securities and Exchange Commission.

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Gilat IR
Ayelet Shaked
Director of IR, Gilat Satellite Networks Ltd.
Tel: +972 2 925 2598
ayelets@gilat.com

The Global Consulting Group
Erik Knettel
Phone: 1- 646- 284-9415
gilat@hfgcg.com

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GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
US dollars in thousands

			March 31,			December 31,
			2008			2007
			Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents				112,085			122,807
Short- term bank deposits and held to maturity marketable securities				51,610			45,578
Short-term restricted cash				7,574			7,091
Restricted cash held by trustees				7,587			7,450
Trade receivables, net of allowance for doubtful accounts				50,879			43,746
Inventories				20,363			24,794
Other current assets				24,190			24,748
Total current assets				274,288			276,214
LONG-TERM INVESTMENTS AND RECEIVABLES:
Long-term restricted cash				6,340			6,321
Long-term restricted cash held by trustees				16,859			16,544
Severance pay fund				12,794			11,835
Long-term trade receivables, receivables in respect of capital
leases and other receivables				11,309			9,170
Total long-term investments and receivables				47,302			43,870
PROPERTY AND EQUIPMENT, NET				105,074			105,247
INTANGIBLE ASSETS AND DEFERRED CHARGES, NET				4,103			4,771
TOTAL ASSETS				430,767			430,102

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GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
US dollars in thousands

			March 31,			December 31,
			2008			2007
			Unaudited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank credit				5,500			5,823
Current maturities of long-term loans				5,374			5,354
Trade payables				27,902			25,954
Accrued expenses				19,418			20,275
Short-term advances from customer, held by trustees				15,456			15,005
Other current liabilities				51,810			58,686
Total current liabilities				125,460			131,097
LONG-TERM LIABILITIES:
Accrued severance pay				12,987			11,723
Long-term advances from customer, held by trustees				8,989			8,989
Long-term loans, net				19,107			18,704
Accrued interest related to restructured debt				2,493			2,493
Convertible subordinated notes				16,315			16,315
Other long-term liabilities				11,626			12,971
Total long-term liabilities				71,517			71,195
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Share capital - Ordinary shares of NIS 0.2 par value				1,806			1,796
Additional paid in capital				860,472			859,207
Accumulated other comprehensive income				1,891			1,776
Accumulated deficit				(630,379	)		(634,969	)
Total shareholders' equity				233,790			227,810
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY				430,767			430,102

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GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except per share data)

			Three months ended March 31,
			2008			2007
			Unaudited			Unaudited
Revenues				70,533			68,038
Cost of Revenues				45,257			43,223
Gross profit				25,276			24,815
Research and development expenses:
Expenses incurred				4,299			4,317
Less - grants				39			348
				4,260			3,969
Selling and marketing, general and administrative expenses				17,063			17,095
Operating income				3,953			3,751
Financial income				812			1,456
Expenses related to merger transaction				(722	)		-
Other income				1,182			-
Income before taxes on income				5,225			5,207
Taxes on income				635			294
Net income				4,590			4,913
Basic net earnings per share				0.12			0.13
Diluted net earnings per share				0.11			0.12
Weighted average number of shares used in
computing net earnings per share
Basic				39,703			38,855
Diluted				42,207			41,105

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GILAT SATELLITE NETWORKS LTD.
RECONCILIATION BETWEEN GAAP AND NON-GAAP STATEMENTS OF OPERATIONS
FOR COMPARATIVE PURPOSES
U.S. dollars in thousands (except per share data)

				Three months ended March
				2008			2007
				Unaudited			Unaudited
	GAAP operating income				3,953			3,751
	Non-cash stock options expenses (1)				209			426
	Non-GAAP operating income				4,162			4,177
	GAAP net income				4,590			4,913
	Non-cash stock options expenses (1)				209			426
	Non-GAAP net income				4,799			5,339
	GAAP earnings per share (diluted)				0.11			0.12
	Non-cash stock options expenses (1)				-			0.01
	Non-GAAP earnings per share (diluted)				0.11			0.13
(1)	Non-cash stock options expenses:
	Cost of Revenues				9			-
	Research and development				-			3
	Selling, general, marketing and administrative				200			423
					209			426

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GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
US dollars in thousands

			Three months ended March 31,
			2008			2007
			Unaudited			Unaudited
Cash flows from operating activities:
Net income				4,590			4,913
Adjustments required to reconcile net income
to net cash provided by (used in) operating activities:
Depreciation and amortization				3,131			4,850
Stock compensation related to employees stock options				209			426
Accrued severance pay, net				305			453
Interest accrued on short and long-term restricted cash				(451	)		(260	)
Interest on held to maturity marketable securities				(788	)		-
Exchange rate differences on long-term loans				524			77
Exchange rate differences on loans to employees				16			(28	)
Capital loss from disposal of property and equipment				19			143
Deferred income taxes				66			(44	)
Increase in trade receivables, net				(7,097	)		(4,041	)
Decrease (increase) in other assets (including short-term, long-term
and deferred charges)				(6,798	)		737
Decrease in inventories				3,161			3,490
Increase (decrease) in trade payables				1,943			(1,319	)
Increase (decrease) in accrued expenses				(858	)		114
Increase (decrease) in advances from customer, held
by trustees, net				452			(3,761	)
Increase (decrease) in other accounts payable and other long term liabilities,
mainly deferred revenues				(6,730	)		2,112
Net cash provided by (used in) operating activities				(8,306	)		7,862

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GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
US dollars in thousands

			Three months ended March 31,
			2008			2007
			Unaudited			Unaudited
Cash flows from investing activities:
Purchase of property and equipment				(1,542	)		(682	)
Return on investment				1,182			-
Other investments				(195	)		-
Purchase of held to maturity marketable securities				(23,906	)		(58,406	)
Proceeds from held to maturity marketable securities				18,662			-
Proceeds from sale of property and equipment				401			-
Loans to employees, net				2,758			288
Proceeds from restricted cash held by trustees				-			92
Investment in restricted cash (including long-term)				(597	)		(4,446	)
Proceeds from restricted cash (including long-term)				94			433
Net cash used in investing activities				(3,143	)		(62,721	)
Cash flows from financing activities:
Exercise of options, net				1,066			414
Issuance expenses of ordinary shares				-			(259	)
Short-term bank credit, net				(322	)		4,300
Repayments of long-term loans				(101	)		(842	)
Net cash provided by financing activities				643			3,613
Effect of exchange rate changes on cash and cash equivalents				84			178
Decrease in cash and cash equivalents				(10,722	)		(51,068	)
Cash and cash equivalents at the beginning of the period				122,807			149,545
Cash and cash equivalents at the end of the period				112,085			98,477

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GILAT SATELLITE NETWORKS LTD.
CONDENSED EBITDA
US dollars in thousands

			Three months ended March 31,
			2008			2007
			Unaudited			Unaudited
Operating income				3,953			3,751
Add:
Non-cash stock option expenses				209			426
Deprecation and amortization				3,131			4,850
EBITDA				7,293			9,027

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