Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2019shares | |
Document And Entity Information [Abstract] | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2019 |
Entity Registrant Name | GILAT SATELLITE NETWORKS LTD |
Entity Central Index Key | 0000897322 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | FY |
Entity Filer Category | Accelerated Filer |
Entity Shell Company | false |
Entity Emerging Growth Company | false |
Entity Common Stock, Shares Outstanding | 55,493,258 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Incorporation, State or Country Code | IL |
Entity File Number | 0-21218 |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 74,778 | $ 67,381 |
Restricted cash | 27,067 | 32,305 |
Restricted cash held by trustees | 4,372 | |
Trade receivables, net | 47,731 | 47,164 |
Contract assets | 23,698 | 47,760 |
Inventories | 27,203 | 21,109 |
Other current assets | 23,007 | 26,022 |
Total current assets | 223,484 | 246,113 |
LONG-TERM ASSETS: | ||
Restricted cash | 124 | 146 |
Severance pay funds | 6,831 | 6,780 |
Deferred taxes | 18,455 | 4,127 |
Operating lease right-of-use asset | 5,211 | |
Other long term receivables | 10,156 | 7,276 |
Total long-term assets | 40,777 | 18,329 |
PROPERTY AND EQUIPMENT, NET | 82,584 | 84,403 |
INTANGIBLE ASSETS, NET | 1,523 | 2,434 |
GOODWILL | 43,468 | 43,468 |
Total assets | 391,836 | 394,747 |
CURRENT LIABILITIES: | ||
Current maturities of long-term loans | 4,096 | 4,458 |
Trade payables | 20,725 | 24,636 |
Accrued expenses | 54,676 | 67,533 |
Advances from customers and deferred revenues | 27,220 | 29,133 |
Operating lease liability | 1,977 | |
Other current liabilities | 12,261 | 14,588 |
Total current liabilities | 120,955 | 140,348 |
LONG-TERM LIABILITIES: | ||
Long-term loans, net of current maturities | 4,000 | 8,098 |
Accrued severance pay | 7,061 | 6,649 |
Long-term advances from customers | 2,866 | |
Operating lease liability | 3,258 | |
Other long-term liabilities | 108 | 580 |
Total long-term liabilities | 17,293 | 15,327 |
COMMITMENTS AND CONTINGENCIES | ||
SHAREHOLDERS' EQUITY: | ||
Share capital - Ordinary shares of NIS 0.2 par value: Authorized: 90,000,000 shares at December 31, 2019 and 2018; Issued and outstanding: 55,493,258 and 55,176,107 shares at December 31, 2019 and 2018, respectively | 2,643 | 2,625 |
Additional paid-in capital | 927,348 | 924,856 |
Accumulated other comprehensive loss | (5,048) | (5,380) |
Accumulated deficit | (671,355) | (683,029) |
Total shareholders' equity | 253,588 | 239,072 |
Total liabilities and shareholders' equity | $ 391,836 | $ 394,747 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - ₪ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Ordinary shares, par value per share | ₪ 0.2 | ₪ 0.2 |
Ordinary shares, shares authorized | 90,000,000 | 90,000,000 |
Ordinary shares, shares issued | 55,493,258 | 55,176,107 |
Ordinary shares, shares outstanding | 55,493,258 | 55,176,107 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | |||
Total revenues | $ 263,492 | $ 266,391 | $ 282,756 |
Cost of revenues: | |||
Total cost of revenues | 167,615 | 172,354 | 200,261 |
Gross profit | 95,877 | 94,037 | 82,495 |
Operating expenses: | |||
Research and development, net | 30,184 | 33,023 | 28,014 |
Selling and marketing | 21,488 | 22,706 | 23,759 |
General and administrative | 18,633 | 17,024 | 19,861 |
Total operating expenses | 70,305 | 72,753 | 71,634 |
Operating income | 25,572 | 21,284 | 10,861 |
Financial expenses, net | 2,617 | 4,298 | 4,307 |
Net income before taxes on income | 22,955 | 16,986 | 6,554 |
Taxes on income (tax benefit) | (13,583) | (1,423) | (247) |
Net income | $ 36,538 | $ 18,409 | $ 6,801 |
Total earnings per share: | |||
Basic | $ 0.66 | $ 0.34 | $ 0.12 |
Diluted | $ 0.65 | $ 0.33 | $ 0.12 |
Weighted average number of shares used in computing earnings per share: | |||
Basic | 55,368,703 | 54,927,272 | 54,680,822 |
Diluted | 56,030,976 | 55,752,642 | 54,851,967 |
Products [Member] | |||
Revenues: | |||
Total revenues | $ 185,721 | $ 173,966 | $ 214,522 |
Cost of revenues: | |||
Total cost of revenues | 122,071 | 121,147 | 153,167 |
Services [Member] | |||
Revenues: | |||
Total revenues | 77,771 | 92,425 | 68,234 |
Cost of revenues: | |||
Total cost of revenues | $ 45,544 | $ 51,207 | $ 47,094 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 36,538 | $ 18,409 | $ 6,801 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustments | 14 | (1,845) | (95) |
Change in unrealized gain (loss) on hedging instruments, net | 653 | (1,548) | 1,419 |
Less - reclassification adjustments for net loss (gain) realized and included in income (loss) on hedging instruments, net | (335) | 1,059 | (1,146) |
Total other comprehensive income (loss) | 332 | (2,334) | 178 |
Comprehensive income | $ 36,870 | $ 16,075 | $ 6,979 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Ordinary shares [Member] | Additional paid-in capital [Member] | Accumulated other comprehensive income (loss) [Member] | Accumulated deficit [Member] | Total | ||
Balance at Dec. 31, 2016 | $ 2,593 | $ 920,162 | $ (3,224) | $ (709,705) | $ 209,826 | ||
Balance, shares at Dec. 31, 2016 | 54,592,667 | ||||||
Effect of adoption of ASU 2016-09 and ASC 606 | 55 | (55) | |||||
Issuance of restricted share units (RSUs) | [1] | [1] | |||||
Issuance of restricted share units (RSUs), shares | 8,100 | ||||||
Stock-based compensation of options and RSUs | 856 | 856 | |||||
Exercise of stock options | $ 8 | 653 | 661 | ||||
Exercise of stock options, shares | 136,500 | ||||||
Comprehensive income (loss) | 178 | 6,801 | 6,979 | ||||
Balance at Dec. 31, 2017 | $ 2,601 | 921,726 | (3,046) | (702,959) | 218,322 | ||
Balance, shares at Dec. 31, 2017 | 54,737,267 | ||||||
Effect of adoption of ASU 2016-09 and ASC 606 | 1,521 | 1,521 | |||||
Stock-based compensation of options and RSUs | 1,006 | 1,006 | |||||
Exercise of stock options | $ 24 | 2,124 | 2,148 | ||||
Exercise of stock options, shares | 438,840 | ||||||
Comprehensive income (loss) | (2,334) | 18,409 | 16,075 | ||||
Balance at Dec. 31, 2018 | $ 2,625 | 924,856 | (5,380) | (683,029) | $ 239,072 | ||
Balance, shares at Dec. 31, 2018 | 55,176,107 | 55,176,107 | |||||
Stock-based compensation of options and RSUs | 2,135 | $ 2,135 | |||||
Exercise of stock options | $ 18 | 357 | 375 | ||||
Exercise of stock options, shares | 317,151 | ||||||
Dividend distribution | (24,864) | (24,864) | |||||
Comprehensive income (loss) | 332 | 36,538 | 36,870 | ||||
Balance at Dec. 31, 2019 | $ 2,643 | $ 927,348 | $ (5,048) | $ (671,355) | $ 253,588 | ||
Balance, shares at Dec. 31, 2019 | 55,493,258 | 55,493,258 | |||||
[1] | Represents an amount lower than $1. |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||
Net income | $ 36,538 | $ 18,409 | $ 6,801 |
Adjustments required to reconcile net income to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 10,978 | 13,149 | 13,140 |
Capital loss from disposal of property and equipment | 461 | 275 | 245 |
Stock-based compensation of options and RSUs | 2,135 | 1,006 | 856 |
Accrued severance pay, net | 361 | 57 | 118 |
Exchange rate differences on long-term loans | (12) | (34) | 186 |
Deferred income taxes, net | (14,883) | (3,672) | 189 |
Decrease (increase) in trade receivables, net | (1,323) | 2,061 | (2,512) |
Decrease (increase) in contract assets | 24,062 | 11,029 | (17,076) |
Decrease (increase) in other assets and receivables | 1,511 | (4,917) | (9,147) |
Decrease (increase) in inventories | (8,076) | 5,743 | (10,763) |
Increase (decrease) in trade payables | (3,884) | (8,926) | 4,087 |
Increase (decrease) in accrued expenses | (11,671) | (7,206) | 19,633 |
Increase (decrease) in advances from customers and deferred revenues | 1,112 | 12,433 | (20,858) |
Decrease in advances from customers held by trustees | (1,478) | (6,185) | |
Increase (decrease) in other liabilities | (2,527) | (5,912) | 4,063 |
Net cash provided by (used in) operating activities | 34,782 | 32,017 | (17,223) |
Cash flows from investing activities: | |||
Purchase of property and equipment | (7,982) | (10,759) | (3,692) |
Net cash used in investing activities | (7,982) | (10,759) | (3,692) |
Cash flows from financing activities: | |||
Proceeds from exercise of stock option and RSUs | 375 | 2,148 | 661 |
Repayment of long-term loans | (4,447) | (4,469) | (4,673) |
Dividend payment | (24,864) | ||
Net cash used in financing activities | (28,936) | (2,321) | (4,012) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (99) | (1,490) | 51 |
Increase (decrease) in cash, cash equivalents and restricted cash | (2,235) | 17,447 | (24,876) |
Cash, cash equivalents and restricted cash at the beginning of the year | 104,204 | 86,757 | 111,633 |
Cash, cash equivalents and restricted cash at the end of the year | 101,969 | 104,204 | 86,757 |
Cash paid during the year for: | |||
Interest | 509 | 303 | 906 |
Income taxes | 1,580 | 3,900 | 2,410 |
Non-cash transactions: | |||
Purchases of property and equipment that were not paid for and reclassification from inventories to property and equipment | 1,449 | 2,307 | 5,710 |
Reclassification from property and equipment to inventories | $ 680 | $ 343 | $ 129 |
GENERAL
GENERAL | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GENERAL | NOTE 1:- GENERAL a. Organization: Gilat Satellite Networks Ltd. and its subsidiaries (the “Company”) is a global provider of satellite-based broadband communications. The Company designs and manufactures ground-based satellite communications equipment, and provides comprehensive solutions and end-to-end services, powered by its technology. The Company’s portfolio includes a cloud based satellite network platform, very small aperture terminals ("VSATs"), amplifiers, high-speed modems, on-the-move antennas and high power solid-state power amplifiers ("SSPAs"), block up converters (“BUCs”) and Trancievers. The Company’s solutions support multiple applications with a full portfolio of products to address key applications including broadband access, cellular backhaul, enterprise, in-flight connectivity, maritime, trains, defense and public safety. The Company also provides connectivity services, internet access and telephony, to enterprise, government and residential customers utilizing both its own networks, and also other networks that it installs, mainly based on Build Operate Transfer (“BOT”) contracts. The Company also provides managed network services over VSAT networks owned by others. The Company was incorporated in Israel in 1987 and launched its first generation VSAT in 1989. b. The Company operates in three business segments consisting of Fixed Networks, Mobility Solutions and Terrestrial Infrastructure Projects (see Note 15 for additional information). c. On January 29, 2020, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Comtech Telecommunications Corp., a Delaware corporation (“Comtech”), pursuant to which, Comtech will acquire 100% of the Company's shares. The Merger is expected to be completed in the second or third quarters of 2020 (see Note 17 "Subsequent events" for additional information). d. The ongoing Coronavirus pandemic that first surfaced in China and is spreading throughout the world has had an adverse effect on our industry and the markets in which we operate (see Note 17 "Subsequent events" for additional information). e. The Company has three major customers which accounted for 39% of revenues for the year ended December 31, 2019 (see also Note 15(d)). f. The Company depends on major suppliers to supply certain components and services for the production of its products or providing services. If these suppliers fail to deliver or delay the delivery of the necessary components or services, the Company will be required to seek alternative sources of supply. A change in suppliers could result in manufacturing delays or services delays which could cause a possible loss of sales and additional incremental costs and, consequently, could adversely affect the Company's results of operations and financial position. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"), followed on a consistent basis. a. Use of estimates: The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. b. Functional currency: The majority of the revenues of Gilat Satellite Networks Ltd. and certain of its subsidiaries are generated in U.S. dollars ("dollar") or linked to the dollar. In addition, a substantial portion of Gilat Satellite Networks Ltd. and certain of its subsidiaries' costs are incurred in dollars. The Company's management believes that the dollar is the primary currency of the economic environment in which Gilat Satellite Networks Ltd. and certain of its subsidiaries operate. Thus, the functional and reporting currency of Gilat Satellite Networks Ltd. and certain of its subsidiaries is the dollar. Accordingly, monetary accounts maintained in currencies other than the dollar are remeasured into dollars in accordance with ASC 830, "Foreign Currency Matters" ("ASC 830"). All transaction gains and losses of the remeasurement of monetary balance sheet items are reflected in the consolidated statements of income as financial income or expenses, as appropriate. The financial statements of certain foreign subsidiaries, whose functional currency has been determined to be their local currency, have been translated into dollars. Assets and liabilities have been translated using the exchange rates in effect at the balance sheet date. Statements of income amounts have been translated using specific rates. The resulting translation adjustments are reported as a component of shareholders' equity in accumulated other comprehensive income. c. Principles of consolidation: The consolidated financial statements include the accounts of Gilat Satellite Networks Ltd. and its subsidiaries in which the Company has a controlling voting interest and entities consolidated under the variable interest entities ("VIE") provisions of ASC 810, "Consolidation" ("ASC 810"). Inter-company balances and transactions have been eliminated upon consolidation. Most of the activity of the subsidiary in Colombia ("Gilat Colombia") consists of operating subsidized projects for the Colombian Ministry of Information Technologies and Communications ("Ministry of ITC") through its "Dirección de Conectividad", or DirCon (formerly known as Compartel Program). Gilat Colombia was awarded a number of projects from the Ministry of ITC, the latest of which was awarded in 2013, and was further extended several times in 2017 and 2018, and completed during 2019. As required in the bid documents for the Ministry of ITC projects, the Company established trusts (the "Trusts") and entered into governing trust agreements for each project (collectively, the "Trust Agreements"). The Trusts were established for the purpose of holding the network equipment, processing payments to subcontractors, and holding the funds received through the subsidy from the government until they are released in accordance with the terms of the subsidy and paid to Gilat Colombia. The Trusts are a mechanism to allow the Colombian government to review amounts to be paid with the subsidy and verify that such funds are used in accordance with the transaction document and the terms of the subsidy. Gilat Colombia generates revenues both from the subsidy, as well as from the use of the network that it operates. The Trusts are considered VIEs and Gilat Colombia is identified as the primary beneficiary of the Trusts. Under ASC 810, the Company performs ongoing reassessments of whether it is the primary beneficiary of the VIE. The assessment of Company's management is that the Company has the power to direct the activities of a VIE that most significantly impact the VIE's activities (it is responsible for establishing and operating the networks), and the obligation to absorb losses of the VIE that could potentially be significant to the VIE and the right to receive benefits from the VIE that could potentially be significant to the VIE's economic performance. As such, the Trusts were consolidated in the financial statements of the Company since their inception. The cash held by the Trusts is consolidated within the financial statements of the Company and classified as Restricted cash held by trustees. d. Cash equivalents: Cash equivalents are short-term highly liquid investments that are not restricted as to withdrawals or use with maturities of three months or less at the date acquired. e. Short-term and long-term restricted cash: Short-term restricted cash is either invested in bank deposits, which mature within one year, or in short-term highly liquid investments that are restricted to withdrawals or use. As of December 31, 2019, the vast majority of this amount was linked to the dollar. Such deposits are used as collateral for performance and advance payment guarantees to customers, surety bonds and the lease of some of the Company’s offices, and bear weighted average interest rates of 1.74% and 2.36% as of December 31, 2019 and 2018, respectively. Long-term restricted cash is primarily invested in bank deposits, which mature after more than one year. As of December 31, 2019 and 2018, the amount were linked to currencies other than the dollar. It bears annual weighted average interest rates of 6.82% and 6.54% as of December 31, 2019 and 2018, respectively. Such deposits are used as collateral for performance guarantees to customers and the lease of some of the Company's offices. f. Restricted cash held by trustees: As of December 31, 2018, restricted cash held by trustees was invested in a savings bank account linked to the Colombian Peso and was being released based upon performance milestones as stipulated in the agreements with the Ministry of ITC (see Note 2c). As of December 31, 2019, following the completion of the projects in Gilat Colombia, there weren't any restricted cash balances. g. Inventories: Inventories are stated at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Inventory write-offs are provided to cover risks arising from slow-moving items, excess inventories, discontinued products, new products introduction and for market prices lower than cost. Any write-off is recognized in the consolidated statements of income as cost of revenues. In addition, if required, the Company records a liability for firm non-cancelable and unconditional purchase commitments with contract manufacturers for quantities in excess of the Company's future demands forecast consistent with its valuation of excess and obsolete inventory. Cost is determined as follows: Raw materials, parts and supplies - using the weighted average cost method. Work in progress and assembled raw materials - represents the cost of manufacturing with the addition of allocable indirect manufacturing costs, using the weighted average cost method. Finished products - calculated on the basis of raw materials, direct manufacturing costs with the addition of allocable indirect manufacturing costs, using the weighted average cost method. h. Property and equipment, net: Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets as follows: Years Buildings 50 Computers, software and electronic equipment 2 - 10 Office furniture and equipment 3 - 15 Vehicles 3 - 7 Leasehold improvements are amortized by the straight-line method over the term of the lease or the estimated useful life of the improvements, whichever is shorter. Rental income generated from office spaces leased to others is included in general and administrative expenses. Network equipment leased to others under operating leases is carried at cost less accumulated depreciation and depreciated using the straight-line method over the useful life of the assets of between 2 to 5 years. i. Intangible assets: Intangible assets subject to amortization are initially recognized based on the fair value allocated to them, and subsequently stated at amortized cost. The assets are amortized over their estimated useful lives using the straight-line method over an estimated period during which benefits are expected to be received, in accordance with ASC 350, "Intangible - Goodwill and Other" ("ASC 350") as follows: Years Technology 7.9 Customer relationships 6.8 Marketing rights and patents 12.1 j. Impairment of long-lived assets: The Company's long-lived assets and identifiable intangible assets that are subject to amortization are reviewed for impairment in accordance with ASC 360, "Property, Plant and Equipment" ("ASC 360"), whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. Such measurement includes significant estimates. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. However, the carrying amount of a group of assets is not to be reduced below its fair value. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. In the years ended December 31, 2019 and 2018, no impairments of long-lived assets were recorded. k. Goodwill: Goodwill represents the excess of the purchase price in a business combination over the fair value of the net tangible and intangible assets acquired. Under ASC 350, goodwill is not amortized, but rather is subject to an annual impairment test. Goodwill is tested for impairment at the reporting unit level by comparing the fair value of the reporting unit with its carrying value. The Company performs its annual impairment analysis of goodwill in the fourth quarter of the year and whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. ASC 350 allows an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. If the qualitative assessment does not result in a more likely than not indication of impairment, no further impairment testing is required. If it does result in a more likely than not indication of impairment, the two-step impairment test is performed. Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the first step of the goodwill impairment test. In the years ended December 31, 2018 and 2017, following an improvement in the Mobility Solutions segment results, the Company performed a qualitative assessment and concluded that it is not more likely than not that the fair value of the reporting units is less than their carrying amounts and accordingly it is unnecessary to perform the two-step quantitative goodwill impairment test. For the year ended December 31, 2019, as a period of three years has passed since the last quantitative assessment, the Company performed updated assessment to continue to support its conclusion that no impairment of goodwill is required for any of its reporting units. l. Contingencies: The Company is currently subject to involved in various claims and legal proceedings. The Company reviews the status of each matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss. m. Revenue recognition: The Company generates revenues mainly from the sale of products (including construction of networks), satellite-based communication networks services and from providing connectivity, internet access and telephony services. The Company sells its products and services to enterprises, government and residential customers under large-scale contracts that utilize both the Company's networks and other networks that the Company installs, mainly based on BOT contracts. These large‑scale contracts sometimes involve the installation of thousands of VSATs or massive fiber-optic and microwave networks. Sale of products includes mainly the sale of VSATs, hubs, SSPAs, low-profile antennas, on-the-move/on-the-pause terminals, and construction and installation of large-scale networks based on BOT contracts. Sale of services includes access to and communication via satellites ("space segment"), installation of equipment, telephone services, internet services, consulting, on-line network monitoring, network maintenance and repair services. The Company sells its products primarily through its direct sales force and indirectly through resellers or system integrators. Sales consummated by the Company's sales force and sales to resellers or system integrators are considered sales to end-users. The Company recognizes revenue when (or as) it satisfies performance obligations by transferring promised products or services to its customers in an amount that reflects the consideration the Company expects to receive. The Company applies the following five steps: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied. See Note 2z for additional information. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price (“SSP”) basis. The Company establishes SSP based on management judgment, considering internal factors such as margin objectives, pricing practices and historical sales. Consideration from contracts that is assessed as not being probable of collection is not recognized as revenue until the contract is completed and cash is received. Collectability is re-assessed when there is a significant change in facts or circumstances. The Company’s assessment of collectability considers whether it may limit its exposure to credit risk through its right to stop transferring additional service in the event the customer is delinquent as well as certain contract terms such as down payments that reduce its exposure to credit risk. Revenue from the sale of equipment is recognized at a point in time, once the customer has obtained control over the items purchased. When significant acceptance provisions are included in the arrangement, the Company defers recognition of the revenue until the acceptance occurs. The Company generally does not grant a right of return to its customers. Revenue from periodic services is recognized ratably over the term the services are rendered. Revenue from other services is recognized upon their completion. Revenues from contracts under which the Company provides significant construction to the customer's specifications (mostly governmental projects) are generally recognized over time because of continuous transfer of control to the customer. This continuous transfer of control to the customer is supported by clauses in the contract that allow the customer to unilaterally terminate the contract for convenience, pay the Company for costs incurred plus a reasonable profit and take control of any work in process. The Company generally uses the cost-to-cost measure of progress for its contracts because it best depicts the transfer of control to the customer, which occurs as it incurs costs on the contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenues are recorded proportionally as costs are incurred. Costs to fulfill include labor, materials and subcontractors’ costs and other direct and allocated indirect costs. When estimates of total costs to be incurred exceed total estimates of revenue to be earned on the uncompleted contracts, a provision for the entire loss on the contract is recognized in the period the loss is identified. Under the typical payment terms of government fixed-price contracts, the customer pays the Company milestones-based payments. Those payments are based on quantifiable measures of performance or on the achievement of specified events or milestones. Because those payments are due upon completion of those milestones, they may result in revenue recognized in excess of billings and are presented as part of contract assets on the balance sheet. In addition, the Company typically receives interim payments as work progresses, although for some contracts, the company may be entitled to receive an advance payment. The Company recognizes a liability for these payments in excess of revenue recognized and present it as liabilities on the balance sheet. The advance payment typically is not considered a significant financing component because it is used to meet working capital demands that can be higher in the early stages of a contract. Amounts recognized as revenue and which the Company has unconditional right to receive are classified as trade receivables on the balance sheet. Deferred revenue and advances from customers are recorded when the Company receives payments from customers before performance obligations have been performed. Deferred revenue is recognized as revenue as (or when) the Company performs the performance obligation under the contract. For information regarding disaggregated revenues, please refer to Note 15. The Company pays sales commissions to external sales agents and to sales and marketing personnel based on their attainment of certain predetermined sales goals. Sales commissions are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions are capitalized and amortized upon recognition of the related revenue, consistently with the transfer to the customer of the goods or services to which they relate. Amortization expenses related to these costs are mostly included in sales and marketing expenses in the accompanying consolidated statements of operations. Amortization expenses during the year ended December 31, 2019 were $1,643. The capitalized balances related to these costs as of December 31, 2019 and 2018 were $473 and $1,286, respectively. n. Selling and marketing expenses: Selling and marketing expenses include shipping expenses in the amounts of $1,309, $1,303 and $1,225 for the years ended December 31, 2019, 2018 and 2017, respectively. Advertising costs are expensed as incurred. Advertising expenses amounted to $263, $247 and $204 for the years ended December 31, 2019, 2018 and 2017, respectively. o. Warranty costs: Generally, the Company provides product assurance warranties for periods between twelve to twenty four months at no extra charge that cover the compliance of the products with agreed-upon specifications. A provision is recorded for estimated warranty costs based on the Company's experience. Warranty expenses amounted to $119, $591 and $323 for the years ended December 31, 2019, 2018 and 2017, respectively. p. Research and development expenses: Research and development costs are charged to the consolidated statements of income (loss) as incurred and are presented net of government grants. ASC 985, "Software", requires capitalization of certain software development costs subsequent to the establishment of technological feasibility. Based on the Company's product development process, technological feasibility is established upon completion of a working model. Costs incurred by the Company between completion of the working models and the point at which the products are ready for general release have been insignificant. Therefore, all research and development costs have been expensed. q. Research and development grants: The Company receives royalty-bearing and non-royalty-bearing grants from the Government of Israel and from other funding sources, for approved research and development projects. These grants are recognized at the time the Company is entitled to such grants on the basis of the costs incurred or milestones achieved as provided by the relevant agreement and included as a deduction from research and development expenses. Research and development grants deducted from research and development expenses amounted to $2,024, $1,426 and $1,419 for the years ended December 31, 2019, 2018 and 2017, respectively. r. Accounting for stock-based compensation: The Company accounts for stock-based compensation in accordance with ASC 718, "Compensation-Stock Compensation" ("ASC 718"). ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service period in the Company's consolidated statements of income. The Company recognizes compensation expenses for the value of its awards, based on the straight-line method over the requisite service period of each of the awards. Effective as of January 1, 2017, the Company adopted Accounting Standards Update 2016-09, "Compensation-Stock Compensation (Topic 718)" ("ASU 2016-09") on a modified, retrospective basis. ASU 2016-09 permits entities to make an accounting policy election related to how forfeitures will impact the recognition of compensation cost for stock - based compensation: to estimate the total number of awards for which the requisite service period will not be rendered or to account for forfeitures as they occur. Upon adoption of ASU 2016-09, the Company elected to change its accounting policy to account for forfeitures as they occur. The change was applied on a modified, retrospective basis with a cumulative effect adjustment to retained earnings of $55 (which increased the accumulated deficit) as of January 1, 2017. s. Income taxes: The Company accounts for income taxes in accordance with ASC 740, "Income Taxes" ("ASC 740"). ASC 740 prescribes the use of the liability method whereby deferred tax assets and liability account balances are determined based on differences between the financial reporting and the tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value if it is more likely than not that a portion or all of the deferred tax assets will not be realized. ASC 740 contains a two-step approach to recognizing and measuring a liability for uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company classifies interest and penalties on income taxes as financial expenses and general and administrative expenses, respectively. t. Concentrations of credit risks: Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, short-term and long-term restricted cash, restricted cash held by trustees, trade receivables and contract assets. The majority of the Company's cash and cash equivalents are invested in dollars with major banks in Israel, the United States and South America. Generally, these cash and cash equivalents may be redeemed upon demand and therefore, management believes that they bear low risk. The majority of the Company's short-term and long-term restricted cash are invested in dollars with major banks in Israel. The Company is generally entitled to receive the restricted cash based upon actual performance of its projects. The Company also has restricted cash held by trustees, which is invested in Colombian Pesos with major banks in Colombia. As of December 31, 2019 and 2018, restricted cash held by the trustees amounted to $0 and $4,372, respectively. The Company is entitled to receive the restricted cash held by the trustee in stages based upon operational milestones. The cash held in the Trusts is reflected in the Company's consolidated balance sheet as Restricted cash held by trustees. Trade receivables and contract assets of the Company are mainly derived from sales to major customers located in North, South and Central America, Europe and Asia. The Company performs ongoing credit evaluations of its customers and obtains letters of credit and bank guarantees for certain receivables. An allowance for doubtful accounts is determined with respect to specific debts that the Company has determined to be doubtful of collection. As of December 31, 2019 and 2018, the Company has recorded a provision for doubtful accounts in the amounts of $2,327 and $3,202, respectively. The Company has recorded a net expense (income) from bad debts in the amount of ($26), ($376) and $2,231 for the years ended December 31, 2019, 2018 and 2017, respectively. u. Employee related benefits: Severance pay: The Company's liability for severance pay for its Israeli employees is calculated pursuant to the Israeli Severance Pay Law based on the most recent salary of the employees multiplied by the number of years of employment, as of the balance sheet date. Employees whose employment is terminated by the Company or who are otherwise entitled to severance pay in accordance with Israeli law or labor agreements are entitled to one month's salary for each year of employment or a portion thereof. The Company's liability for all of its Israeli employees is partly provided for by monthly deposits for insurance policies and the remainder by an accrual. The value of these policies is recorded as an asset in the Company's consolidated balance sheet. During April and May 2008 (the "transition date"), the Company amended the contracts of most of its Israeli employees so that starting on the transition date, such employees are subject to Section 14 of the Severance Pay Law, 1963 ("Section 14") for severance pay accumulated in periods of employment subsequent to the transition date. In accordance with Section 14, upon termination, the release of the contributed amounts from the fund to the employee will relieve the Company from any further severance liability and no additional payments will be made by the Company to the employee. As a result, the related obligation and amounts deposited on behalf of such obligation are not stated on the consolidated balance sheets, as the Company is legally released from severance obligations to employees once the amounts have been deposited and the Company has no further legal ownership of the amounts deposited. The carrying value for the deposited funds for the Company's employees' severance pay for employment periods prior to the transition date include profits and losses accumulated up to the balance sheet date. The deposited funds may be withdrawn only upon the fulfillment of the obligation pursuant to the Israeli Severance Pay Law or labor agreements. Severance pay expenses for the years ended December 31, 2019, 2018 and 2017, amounted to $3,162, $3,138 and $2,819, respectively. 401(k) profit sharing plans: The Company has a number of savings plans in the United States that qualify under Section 401(k) of the current Internal Revenue Code as a "safe harbor" plan. The Company must make a mandatory contribution to the 401(k) plan to satisfy certain nondiscrimination requirements under the Internal Revenue Code. This mandatory contribution is made to all eligible employees. The contribution costs for all the plans were $526, $479 and $411 for the years ended December 31, 2019, 2018 and 2017, respectively. v. Fair value of financial instruments: The Company applies ASC 820, "Fair Value Measurements and Disclosures" ("ASC 820"). Under this standard, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., "the exit price") in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the inputs as follows: Level 1 - Valuations based on quoted prices in active markets for identical assets thatthe Company has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. Level 2 - Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The availability of observable inputs can vary from investment to investment and is affected by a wide variety of factors, including, for example, the type of investment, the liquidity of markets and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment and the investments are categorized as Level 3. The carrying amounts of cash and cash equivalents, restricted cash, trade receivables, contract assets, other current assets, trade payables, accrued expenses and other current liabilities approximate their fair value due to the short-term maturities of such instruments. Based on the borrowing rates currently available to the Company for bank loans with similar terms and maturities, the Company estimates that the carrying value of its long-term debt approximates their fair value. The Company measured the fair value of the forward contracts in accordance with ASC 820 and classified them as Level 2. Forward contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments. w. Earnings per share: In accordance with ASC 260, "Earnings per Share", basic earnings per share is computed based on the weighted average number of Ordinary shares outstanding during each period. Diluted earnings per share is computed based on the weighted average number of Ordinary shares outstanding during each period, plus dilutive potential Ordin |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 3:- INVENTORIES a. Inventories are comprised of the following: December 31, 2019 2018 Raw materials, parts and supplies $ 6,638 $ 5,885 Work in progress and assembled raw materials 15,409 10,548 Finished products 5,156 4,676 $ 27,203 $ 21,109 b. Inventory write-offs amounted to $2,624, $6,354 and $3,270 for the years ended December 31, 2019, 2018 and 2017, respectively. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 4:- PROPERTY AND EQUIPMENT, NET a. Property and equipment, net consisted of the following: December 31, 2019 2018 Cost: Buildings and land $ 91,823 $ 92,025 Computers, software and electronic equipment 51,745 50,390 Network equipment 27,837 40,502 Office furniture and equipment 3,665 5,317 Vehicles 240 324 Leasehold improvements 3,674 3,556 178,984 192,114 Accumulated depreciation 96,400 107,711 Depreciated cost $ 82,584 $ 84,403 *) The Company recorded a reduction of $18,718, $732 and $46,051 to the cost and accumulated depreciation of fully depreciated propery plant and equipment that are no longer in use for the years ended December 31, 2019, 2018 and 2017, respectively. b. Depreciation expenses amounted to $10,067, $9,874 and $7,465 in the years ended December 31, 2019, 2018 and 2017, respectively. c. During the years ended December 31, 2019, 2018 and 2017, the Company recognized capital losses of $461, $275 and $245, respectively, with respect to disposal of abandoned assets primarily attributed to office and furniture group. d. The Company leases part of its buildings as offices spaces to others. The gross income generated from such leases amounted to approximately $5,770, $6,150 and $5,900 in the years ended December 31, 2019, 2018 and 2017, respectively. These amounts do not include the corresponding offsetting expenses related to this income. e. As for pledges and securities, see also Note 13c. |
DEFERRED REVENUE
DEFERRED REVENUE | 12 Months Ended |
Dec. 31, 2019 | |
Deferred Revenue [Abstract] | |
DEFERRED REVENUE | NOTE 5:- DEFERRED REVENUE Deferred revenue as of December 31, 2019 and 2018 was $7,972 and $8,658, respectively, and primarily relates to revenue that is recognized over time for service contracts. The changes in balance of deferred revenues are related to the satisfaction or partial satisfaction of these contracts. Approximately $6,785 of the December 31, 2018 balance was recognized as revenue during the year ended December 31, 2019. The balance of deferred revenues approximates the aggregate amount of the billed and collected amount allocated to the unsatisfied performance obligations at the end of reporting period. All of the Company’s performance obligations in contracts with customers, other than large scale governmental projects (expected to be recognized over periods of approximately 13-15 years), principally relate to contracts with a duration of less than one year, as such, the Company is not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS, NET | NOTE 6:- INTANGIBLE ASSETS, NET a. Intangible assets, net consisted of the following: December 31, 2019 2018 Original amounts: Technology $ 42,504 $ 42,504 Customer relationships 4,466 4,466 Marketing rights and patents 3,421 3,421 50,391 50,391 Accumulated amortization: Technology 42,002 41,281 Customer relationships 4,466 4,466 Marketing rights and patents 2,400 2,210 48,868 47,957 $ 1,523 $ 2,434 b. Amortization expenses amounted to $911, $3,275 and $5,675 for the years ended December 31, 2019, 2018 and 2017, respectively. c. Estimated amortization expenses for the following years is as follows: Year ending December 31, 2020 $ 441 2021 431 2022 321 2023 330 $ 1,523 |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2019 | |
GOODWILL [Abstract] | |
GOODWILL | NOTE 7:- GOODWILL December 31, 2019 2018 Goodwill *) $ 105,647 $ 105,647 Accumulated impairment losses (62,179 ) (62,179 ) $ 43,468 $ 43,468 *) The carrying amount of the goodwill is associated with the Mobility Solutions segment. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 8:- COMMITMENTS AND CONTINGENCIES a. Commitments with respect to space segment services: The Company provides its customers with space segment capacity services, which are purchased from third parties. Future minimum payments due for space segment services to be rendered subsequent to December 31, 2019, are as follows: Year ending December 31, 2020 $ 8,402 2021 2,877 2022 1,215 $ 12,494 Space segment services expenses during the years ended December 31, 2019, 2018 and 2017 were $9,845, $12,771 and $11,184, respectively. b. In 2019 and 2018, the Company's primary material purchase commitments were with inventory suppliers. The Company's material inventory purchase commitments are based on purchase orders, or on outstanding agreements with some of the Company's suppliers of inventory. As of December 31, 2019 and 2018, the Company's major outstanding inventory purchase commitments amounted to $24,939 and $18,418, respectively, all of which were orders placed or commitments made in the ordinary course of its business. As of December 31, 2019 and 2018, $12,718 and $6,939, respectively, of these orders and commitments, were from suppliers which can be considered sole or limited in number. In addition, for the year ended December 31, 2019, 2018 and 2017 the Company recorded a loss for firm non-cancelable and unconditional purchase commitments with contract manufacturers for quantities in excess of the Company's future demands forecast consistent with its valuation of excess and obsolete inventory in the amount of $1,016, $1,448 and $0, respectively. c. Royalty commitments: 1. The Company is committed to pay royalties to the Israel Innovation Authority ("IIA"), formerly known as the Office of the Chief Scientist of the Ministry of Economy of the Government of Israel on proceeds from sales of products resulting from the research and development projects in which the IIA participated with royalty bearing grants. In the event that development of a specific product in which the IIA participated is successful, the Company will be obligated to repay the grants through royalty payments at the rate of 3% to 5% based on the sales of the Company, up to 100% of the grants received linked to the dollar. Grants are subject to interest at a rate equal to the 12 month LIBOR rate. The obligation to pay these royalties is contingent upon actual sales of the products and, in the absence of such sales, no payment is required. As of December 31, 2019, the Company had a contingent liability to pay royalties in the amount of approximately $1,428. The Company paid royalties in the amount of $68 and $20 during the years ended December 31, 2019 and 2018, respectively. The Company did not pay or accrue any amounts for such royalties during the year ended December 31, 2017. 2. Research and development projects undertaken by the Company were partially financed by the Binational Industrial Research and Development Foundation ("BIRD Foundation"). The Company is committed to pay royalties to the BIRD Foundation at a rate of 5% of sales proceeds generating from projects for which the BIRD Foundation provided funding up to 150% of the sum financed by the BIRD Foundation. The obligation to pay these royalties is contingent on actual sales of the products and in the absence of such sales, no payment is required. As of December 31, 2019, the Company had a contingent liability to pay royalties in the amount of approximately $303. The Company did not pay or accrue any amounts for such royalties during the years ended December 31, 2019, 2018 and 2017. d. Litigation: 1. In 2003, the Brazilian tax authority filed a claim against the Company's inactive subsidiary in Brazil, SPC International Ltda, for the payment of taxes allegedly due from the subsidiary. After numerous hearings and appeals at various appellate levels in Brazil, the Supreme Court ruled against the subsidiary in final non-appealable decisions published in June 2017. As of December 31, 2019, the total amount of this claim, including interest, penalties and legal fees is approximately $8,742, of which approximately $1,002 is the principal. The Brazilian tax authorities initiated foreclosure proceedings against the subsidiary and certain of its former managers. Pursuant to the court’s decision, published in March 2016, the foreclosure proceedings against the former managers were cancelled. The tax authorities appealed such decision which appeal was rejected in July 2017. This court ruling is final and is not appealable. Based on Brazilian external counsel’s opinion, the Company believes that the subsidiary has solid arguments to sustain its position that further collection proceedings and inclusion of any additional co-obligors in the tax foreclosure certificate are barred due to statute of limitation and that the foreclosure procedures cannot legally be redirected to other group entities and managers who were not cited in the foreclosure certificate due to statute of limitation. Accordingly, the Company believes that the chances that such redirection will lead to a loss recognition are remote. 2. In 2014, the Company's Peruvian subsidiary, Gilat To Home Peru ("GTH Peru"), initiated arbitration proceedings in Lima against the Ministry of Transport and Communications of Peru ("MTC"), and PRONATEL. The arbitration was related to the PRONATEL projects awarded to the Company in 2000-2001. Under these projects, GTH Peru provided fixed public telephony services in rural areas of Peru. The subsidiary’s main claim was related to damages caused by the promotion of mobile telephony in such areas by the Peruvian government in the years 2011-2015. In June 2018, the arbitration tribunal issued an arbitration award ordering MTC and PRONATEL to pay the subsidiary approximately $13,500. MTC applied to the Superior Court in Lima to declare such award null and void. In July 2019, the Superior Court rejected the annulment action. MTC filed a protective constitutional action against such ruling. In September 2019, the 11 th th 3. In October 2017, the Temporary Union UGC-FUSA, a former subcontractor that was hired in connection with the Kioskos Project in Colombia, initiated an arbitration proceeding against the Company's local subsidiary for breach of contract. The amount of the claim is approximately $6,300. In July 2018, the subsidiary filed its response and a counterclaim against UGC-Fusa and its insurer, Seguros del Estado. In June 2019, the arbitration was concluded by means of a settlement agreement under which the Company's subsidiary paid UGC-FUSA an amount of $400. The Company had an accrual which it reversed and as a consequence recognized $3,260 as reduction of costs in cost of revenues. 4. In 2018, the subsidiary in Peru, won a government bid for two additional regional projects in Amazonas and Ica regions in Peru for PRONATEL with a value of approximately $154,000. GMC Engineering Solutions and SATEL Comunicaciones y Datos, two of the three entities comprising the losing bidder consortium, applied to the superior court in Lima to cancel the bid and obtained a preliminary injunction against the award. Although the lawsuit did not name the Company’s subsidiary as a defendant, the subsidiary was served as an interested third party in the process and filed its objection and defenses. Currently, following PRONATEL’s request, the Company's subsidiary continues performing these projects. Based on the advice of its legal counsel, the Comapny believes that the chances of success of the proceedings seeking to cancel the bid are remote. 5. In addition, the Company is in the midst of different stages of audits and disputes with various tax authorities in different parts of the world. Further, the Company is the defendant in various other lawsuits, including employment-related litigation claims and may be subject to other legal proceedings in the normal course of its business. While the Company intends to defend the aforementioned matters vigorously, it believes that a loss in excess of its accrued liability with respect to these claims is not probable. e. Pledges and securities, see Note 13c. f. Guarantees: The Company guarantees its performance to certain customers through bank guarantees, surety bonds from insurance companies and corporate guarantees. Guarantees are often required for the Company's performance during the installation and operational periods. The guarantees typically expire when certain operational milestones are met. As of December 31, 2019, the aggregate amount of bank guarantees and surety bonds from insurance companies outstanding in order to secure the Company's various obligations was $106,037, including an aggregate of $102,687 on behalf of its subsidiaries in Peru. In order to secure these guarantees the Company provided a floating charge on its assets as well as other pledges, including a fixed pledge, on certain assets and property. In addition, the Company has $27,191 of restricted cash to secure these guarantees. In accordance with ASC 460, "Guarantees" ("ASC 460"), as the guarantees above are performance guarantees for the Company's own performance, such guarantees are excluded from the scope of ASC 460. The Company has not recorded any liability for such amounts, since the Company expects that its performance will be acceptable. To date, no guarantees have ever been exercised against the Company. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
LEASES | NOTE 9:- LEASES The Company's subsidiaries entered into various non-cancelable operating lease agreements for certain of their offices and facilities, expiring between 2020 and 2027. Components of operating lease expense were as follows: Year ended December 31, 2019 Operating lease cost* $ 2,196 Short- term lease cost 272 Total lease costs $ 2,468 *) Supplemental information related to operating leases was as follows: Year ended December 31, 2019 New operating lease assets obtained in exchange for operating lease liabilities $ 1,469 As of December 31, 2019, our operating leases had a weighted average remaining lease term of 3 years and a weighted average discount rate of 4.5%. Future lease payments under operating leases as of December 31, 2019 were as follows: 2020 $ 2,019 2021 1,775 2022 1,269 2023 517 Thereafter 16 Total future lease payements 5,596 Less imputed interest (361 ) Total lease liability balance $ 5,235 As of December 31, 2019, we have entered into a new lease that has not yet commenced with future lease payments of $3,874, excluding extension options, that is not yet recorded on our consolidated balance sheets. This lease will come into effect in 2020 with a non-cancelable lease term of 5 years. Total lease costs during the year ended December 31, 2018 were $2,578. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | NOTE 10:- DERIVATIVE INSTRUMENTS The following table details the fair value of derivative instruments in the consolidated balance sheets: Fair value of derivative instruments December 31, 2019 2018 Derivative: Foreign exchange forward contracts / options (1) Other current assets (liabilities) - $ (318 ) (1) To protect against changes in value of forecasted foreign currency cash flows resulting from salaries and related payments that are denominated in NIS, the Company has entered into foreign currency forward contracts. These contracts were designated as cash flow hedges, as defined by ASC 815, as amended, and are considered highly effective as hedges of these expenses. As of December 31, 2019 there were no outstanding forward contracts. During the years ended December 31, 2019, 2018 and 2017, the Company recognized net income related to the effective portion of its hedging instruments. The effective portion of the hedged instruments has been included as an offset (addition) of payroll expenses and other operating expenses in the consolidated statement of income amounted to $(335), $(1,056) and $1,114 in the years ended December 31, 2019, 2018 and 2017, respectively. The ineffective portion of the hedged instrument which was recorded during the years ended December 31, 2019, 2018 and 2017, was immaterial and has been recorded as financial income (expenses). As of December 31, 2019 the Company had no outstanding forward contracts. As of December 31, 2018, the Company had outstanding forward contracts in the notional amount of $27,153. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 11:- SHAREHOLDERS' EQUITY a. Share capital: Ordinary shares confer upon their holders voting rights, the right to receive cash dividends and the right to share in excess assets upon liquidation of the Company. b. Stock option plans: Description of plans In October 2008, the compensation stock option committee of the Company's Board of Directors approved the adoption of the 2008 Stock Incentive Plan (the "2008 Plan") with 1,000,000 shares or stock options available for grant and a sub-plan to enable qualified optionees certain tax benefits under the Israeli Income Tax Ordinance. Among the incentives that may be adopted are stock options, performance share awards, performance share unit awards, restricted shares, RSUs awards and other stock-based awards. During the years commencing in 2010 and through December 31, 2019, the Company's Board of Directors approved, in the aggregate, an increase of 6,015,500 shares to the number of shares available for grant under the 2008 Plan, bringing the total number of shares available for grant to 7,015,500. As of December 31, 2019, an aggregate of 77,888 shares are still available for future grants under the 2008 Plan. Options granted under the 2008 Plan vest quarterly over two to four years or 50% at the second anniversary and 25% at the third and fourth anniversary. The options expire after six, seven or ten years from the date of grant. Any options, which are forfeited or canceled before expiration of the 2008 Plan, become available for future grants. All options granted by the Company on or before March 23, 2017 that are unvested and remain outstanding shall become fully vested upon change of control. In addition, options granted to several management members after such date that are unvested and remain outstanding shall also become fully vested upon change of Control. In February 2019, the 2008 Plan was amended to include a dividend adjustment, whereby unless otherwise is resolved by the Board of Directors, the exercise price of each outstanding share option (whether vested or not) (as such term is defined in the 2008 Plan), shall be reduced by an amount equal to the cash dividend per share distributed on the applicable distribution date. The amendment applied to the dividend distributed by the Company’s Board of Directors in April 2019, as described below. In addition, the amendment stipulates that the administrating committee may apply a “net exercise” payment method, whereby a certain number of ordinary shares to which a participant is entitled, may be withheld according to the formula set forth in the amendment. Valuation assumptions: The Company selected the Black-Scholes-Merton option-pricing model as the most appropriate fair value method for its stock options awards. The option-pricing model requires a number of assumptions, of which the most significant are the expected stock price volatility and the expected option term. Expected volatility was calculated based upon actual historical stock price movements. The expected term of options granted is based upon historical experience and represents the period of time that options granted are expected to be outstanding. The risk-free interest rate is based on the yield from U.S. treasury bonds with an equivalent term. The Company has historically not paid dividends. In April 2019 the Company distributed a cash dividend in the amount of $24,864 or $0.45 per share for which a protective adjustment was applied to the outstanding equity awards. This was the first time the Company paid dividend. However, the Company has not adopted a general policy regarding the distribution of dividends and makes no statements as to the distribution of dividends in the foreseeable future. Options granted to employees: The fair value of the Company's stock options granted to employees for the years ended December 31, 2019, 2018 and 2017 was estimated using the following weighted average assumptions: Year ended December 31, 2019 2018 2017 Risk free interest 1.35%-2.51% 2.48%-2.82% 1.66%-2.00% Dividend yields 0% 0% 0% Volatility 33.35%-34.32% 33% 33% Expected term (in years) 4.22-4.26 4.3-4.39 4.52 A summary of employee option balances under the 2008 Plan as of December 31, 2019 and changes during the year then ended are as follows: Number of options Weighted-average exercise price Weighted- average remaining contractual term (in years) Aggregate intrinsic value (in thousands) Outstanding at January 1, 2019 2,883,410 $ 5.6 3.7 $ 9,087 Granted 1,112,500 $ 9.3 Exercised (676,930 ) $ 5.1 Forfeited (150,000 ) $ 7.3 Outstanding at December 31, 2019 3,168,980 $ 6.9 3.8 $ 4,795 Exercisable at December 31, 2019 1,094,772 $ 4.6 2.3 $ 3,590 The weighted-average grant-date fair value of options granted to employees during the year ended December 31, 2019 was $2.6. The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the Company's closing stock price on the last trading day of the year 2019 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2019. These amounts change based on the fair market value of the Company's stock. Total intrinsic value of options exercised for the year ended December 31, 2019 was $2,350. The Company accounted for changes in award terms as a modification in accordance with ASC 718. A modification to the terms of an award should be treated as an exchange of the original award for a new award with total compensation cost equal to the grant-date fair value of the original award plus the incremental value measured at the same date. Under ASC 718, the calculation of the incremental value is based on the excess of the fair value of the new (modified) award based on current circumstances over the fair value of the original award measured immediately before its terms are modified based on current circumstances. The total incremental effect in connection with the modification described above amounted to $970 out of which $803 was recorded during the year ended December 31, 2019. The outstanding and exercisable options granted to employees under the 2008 Plan as of December 31, 2019, have been separated into ranges of exercise price as follows: Options Weighted Options Weighted outstanding average Weighted exercisable average exercise Ranges of as of remaining average as of price of exercise December 31, contractual exercise December 31, exercisable price 2019 life (years) price 2019 options $3.32-4.95 1,067,184 2.2 $ 4.5 925,726 4.5 $5.05-7.41 831,796 3.8 $ 6.5 169,046 5.4 $7.73-9.51 1,270,000 5.2 $ 9.2 - 3,168,980 3.8 $ 6.9 1,094,772 4.6 Additional stock-based compensation data: As of December 31, 2019, there was $3,677 of unrecognized compensation costs related to non-vested stock-based compensation arrangements granted to employees under the 2008 Plan. The cost related to employees is expected to be recognized over a weighted-average period of 3 years. c. Dividends: 1. In the event that cash dividends are declared by the Company, such dividends will be declared and paid in Israeli currency. Under current Israeli regulations, any cash dividend paid in Israeli currency in respect of ordinary shares purchased by non-residents of Israel with non-Israeli currency, may be freely repatriated in such non-Israeli currency, at the exchange rate prevailing at the time of repatriation. 2. In April 2019 the Company distributed a cash dividend for the first time, in the amount of $24,864 or $0.45 per share. However, the Company has not adopted a general policy regarding the distribution of dividends and makes no statements as to the distribution of dividends in the foreseeable future. 3. Pursuant to the terms of a loan from a bank (see also Note 13c), the Company is restricted from paying cash dividends to its shareholders without initial approval from the bank; which was received for the April 2019 dividend. |
TAXES ON INCOME
TAXES ON INCOME | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
TAXES ON INCOME | NOTE 12:- TAXES ON INCOME a. Israeli taxation: 1. Corporate tax rates: Generally, income of Israeli companies is subject to corporate tax. The corporate tax rate in Israel is 23% in 2019 and 2018, compared with 24% in 2017. 2. Tax benefits under the Law for the Encouragement of Capital Investments, 1959 (the "Law"): The Company has been granted an "Approved Enterprise" status, under the Law, for nine investment programs in the alternative program, by the Israeli Government. Certain production facilities of the Company have been granted 'Benefitted Enterprise' status under the provision of the Law. The Company was eligible under the terms of minimum qualifying investment elected 2011 as the Year of Election as defined in the law. Income derived from Benefitted Enterprise is tax exempt for a period of two years out of the period of benefits. Based on the percentage of foreign shareholding in the Company, income derived during the remaining years of benefits is taxable at the rate of 10%-25%. The period of benefits of the Benefitted Enterprises under the 2011 election will expire in 2023. As of December 31, 2019, the Company did not generate income from the Benefitted Enterprises. In the event of distribution of dividends from the above mentioned tax exempt income, the amount distributed would be taxed at a corporate tax rate of 10% to 25%, depending on the level of foreign investment in the Company. Income from sources other than a "Benefitted Enterprise" during the benefit period is subject to tax at the regular corporate tax rate (24% in 2017 and 23% in 2018 and 2019). On January 1, 2011, new legislation that constitutes a major amendment to the Law was enacted (the "Amendment Legislation"). Under the Amendment Legislation, a uniform rate of corporate tax would apply to all qualified income of certain industrial companies, as opposed to the current law's incentives that are limited to income from "Benefitted Enterprises" during their benefits period. According to the Amendment Legislation, the applicable tax rate for 2014 and onwards is set at 9% in geographical areas in Israel designated as Development Zone A and 16% elsewhere in Israel applicable to the company. The profits of these Industrial Companies would be freely distributable as dividends, subject to a 20% withholding tax (or lower, under an applicable tax treaty). The Company is not located in Development Zone A. Under the transitory provisions of the Amendment Legislation, the Company may elect whether to irrevocably implement the new law in its Israeli company while waiving benefits provided under the current law or keep implementing the current law during the next years. Changing from the current law to the new law is permissible at any stage. Amendment from December 2016 prescribes special tax tracks for technological enterprises. The new tax tracks under the Amendment are as follows: Technological preferred enterprise - an enterprise for which total consolidated revenues of its parent company and all subsidiaries are less than NIS 10 billion. A technological preferred enterprise, as defined in the Law, which is located in the center of Israel will be subject to tax at a rate of 12% on profits deriving from intellectual property (in Development Zone A- a tax rate of 7.5%). Special technological preferred enterprise - an enterprise for which total consolidated revenues of its parent company and all subsidiaries exceed NIS 10 billion. Such enterprise will be subject to tax at a rate of 6% on profits deriving from intellectual property, regardless of the enterprise's geographical location. Any dividends distributed to "foreign companies", as defined in the Law, deriving from income from the technological enterprises will be subject to tax at a rate of 4%. b. Income taxes on non-Israeli subsidiaries: Non-Israeli subsidiaries are taxed according to the tax laws in their respective domiciles of residence. The Company has not made any provisions relating to undistributed earnings of the Company's foreign subsidiaries since the Company has no current plans to distribute such earnings. If earnings are distributed to Israel in the form of dividends or otherwise, the Company may be subject to additional Israeli income taxes (subject to an adjustment for foreign tax credits) and foreign withholding taxes. As of December 31, 2019, the amount of undistributed earnings of non-Israeli subsidiaries, which is considered indefinitely reinvested, was $3,229 with a corresponding unrecognized deferred tax liability of $437. In December 2017, the U.S. enacted significant tax reform through the U.S. Tax Cuts & Jobs Acts (“TCJA”). The TCJA enacted significant changes affecting the year ended December 31, 2017, including, but not limited to, (1) reducing the U.S. federal corporate income tax rate from 35% to 21% effective 2018, and (2) imposing a one-time Transition Tax on certain unrepatriated earnings of foreign subsidiaries of U.S. companies that had not been previously taxed in the U.S. The TCJA also established new tax provisions affecting 2018, including, but not limited to, (1) creating a new provision designed to tax global intangible low-tax income (“GILTI”); (2) generally eliminating U.S. federal taxes on dividends from foreign subsidiaries; (3) eliminating the corporate alternative minimum tax (“AMT”); (4) creating the base erosion anti-abuse tax (“BEAT”); (5) establishing a deduction for foreign derived intangible income ("FDII"); (6) repealing the domestic production activity deduction; and (7) establishing new limitations on deductible interest expense and certain executive compensation. c. Carryforward tax losses and credits: As of December 31, 2019, the Company had operating loss carry forwards for Israeli income tax purposes of approximately $89,736 which may be offset indefinitely against future taxable income. As of December 31, 2019, the Company's U.S. subsidiary had approximately $10,614 of carryforward tax losses for state tax purposes. The U.S subsidiary had R&D credits carryforwards for federal tax purposes of approximately $3,200 and for state tax purposes of approximately $2,600. The Company has carryforward tax losses relating to other subsidiaries in Europe and Latin America of approximately $44,870 (which can be utilized within 9 years) and $33,620 ($24,611 can be utilized within 4 years and $9,009 can be utilized indefinitely), as of December 31, 2019, respectively. d. Deferred income taxes: Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax liabilities and assets are as follows: December 31, 2019 2018 1. Provided in respect of the following: Carryforward tax losses and credits *) $ 39,719 $ 41,561 Property, equipment and intangibles 1,466 904 Deferred revenues 1,237 823 Research and development costs 269 804 Other temporary differences 5,775 7,202 Gross deferred tax assets 48,466 51,294 Valuation allowance (26,693 ) (40,943 ) Net deferred tax assets 21,773 10,351 Gross deferred tax liabilities Property, equipment and intangibles (3,343 ) (3,208 ) Subsidy income - (3,574 ) Other temporary differences - (22 ) Gross deferred tax liabilities (3,343 ) (6,804 ) Net deferred tax assets $ 18,430 $ 3,547 *) The amounts are shown after reduction for unrecognized tax benefits of $2,855 and $1,989 as of December 31, 2019 and 2018, respectively. December 31, 2019 2018 2. Deferred taxes are included in the consolidated balance sheets, as follows: Long term assets $ 18,455 $ 4,127 Long term liabilities $ (25 ) $ (580 ) 3. The Peruvian government awarded the Company's subsidiary in Peru ("the Subsidiary") the Regional PRONATEL Projects under six separate bids for the construction of fiber and wireless networks, operation of the networks for a defined period and their transfer to the government. The income derived from the construction of the project is an exempt subsidy, and therefore a significant uncertainty arises about the Subsidiary's eligibility to deduct certain construction costs incurred in generating the exempt income against future taxable income. Accordingly, as of December 31, 2019 and 2018, the Company did not record deferred income taxes to reflect the total net tax effects of the potential temporary differences. 4. As of December 31, 2019, the Company decreased the valuation allowance by $14,250, resulting mainly from changes in temporary differences relating to carryforward tax losses. The Company provided valuation allowance for a portion of the deferred tax regarding the carryforwards losses and other temporary differences that management believes are not expected to be realized in the foreseeable future. During the year ended December 31, 2019, the Company released valuation allowance against the deferred tax assets primarily related to carryforward tax losses in Israel. 5. The functional and reporting currency of the Company and certain of its subsidiaries is the dollar. The difference between the annual changes in the NIS/dollar exchange rate causes a further difference between taxable income and the income before taxes shown in the financial statements. In accordance with ASC 740, the Company has not provided deferred income taxes on the difference between the functional currency and the tax basis of assets and liabilities. e. Reconciling items between the statutory tax rate of the Company and the actual taxes on income (tax benefit): Year ended December 31, 2019 2018 2017 Income before taxes on income from continuing operations, as reported in the consolidated statements of income $ 22,955 $ 16,986 $ 6,554 Statutory tax rate 23.0 % 23.0 % 24.0 % Theoretical taxes on income 5,279 $ 3,907 $ 1,573 Currency differences (1,908 ) 3,089 (3,225 ) Tax adjustment in respect of different tax rates and "Benefitted Enterprise" status 241 345 2,849 Changes in valuation allowance (14,250 ) (3,939 ) (3,343 ) Loss from liquidation of subsidiaries *) - (8,930 ) - Expiration of carryforward tax losses 923 - 622 Exempt subsidy loss (income) (3,813 ) 394 (2,646 ) U.S. Tax Cuts and Jobs Acts effect - 56 2,138 Nondeductible expenses and other differences (55 ) 3,655 1,785 $ (13,583 ) $ (1,423 ) $ (247 ) *) In 2018 the Company’s Dutch subsidiary liquidated some of its subsidiaries and consequently recognized losses for tax purposes. These losses can be offset from taxable income in future periods under the tax regulations in the Netherlands. The Company does not expect these losses to be realized in the foreseeable future and respectively provided a full valuation allowance. f. Taxes on income (tax benefit) included in the consolidated statements of income: Year ended December 31, 2019 2018 2017 Current $ 1,300 $ 2,249 $ (436 ) Deferred (14,883 ) (3,672 ) 189 $ (13,583 ) $ (1,423 ) $ (247 ) Year ended December 31, 2019 2018 2017 Domestic $ (14,472 ) $ 610 $ 768 Foreign 889 (2,033 ) (1,015 ) $ (13,583 ) $ (1,423 ) $ (247 ) g. Income before taxes on income (tax benefit) from operations: Year ended December 31, 2019 2018 2017 Domestic $ 12,851 $ 6,596 $ 1,289 Foreign 10,104 10,390 5,265 $ 22,955 $ 16,986 $ 6,554 h. Unrecognized tax benefits: A reconciliation of the beginning and ending gross amount of unrecognized tax benefits is as follows: December 31, 2019 2018 Balance at beginning of year $ 2,234 $ 129 Additions for prior years' tax position (19 ) 1,809 Additions for current years' tax position 975 296 Balance at the end of year *) $ 3,190 $ 2,234 *) The amounts for the years ended December 31, 2019 and 2018 includes $2,855 and $1,989, respectively, of unrecognized tax benefits which are presented as a reduction from deferred tax assets, see Note 12d. The unrecognized tax benefits include accrued penalties and interest of $295 and $193 as of December 31, 2019 and 2018, respectively. During the years ended December 31, 2019 and 2018, the Company recorded an expense of $102 accrued on the unrecognized tax benefits and $86, respectively. The Company and its subsidiaries file income tax returns in Israel and in other jurisdictions of its subsidiaries. The Company's tax assessments through 2014 are considered final. As of December 31, 2019, the tax returns of the Company and its main subsidiaries are still subject to audits by the tax authorities for the tax years 2014 through 2018. |
SUPPLEMENTARY CONSOLIDATED BALA
SUPPLEMENTARY CONSOLIDATED BALANCE SHEET INFORMATION | 12 Months Ended |
Dec. 31, 2019 | |
SUPPLEMENTARY BALANCE SHEET INFORMATION [Abstract] | |
SUPPLEMENTARY CONSOLIDATED BALANCE SHEET INFORMATION | NOTE 13:- SUPPLEMENTARY CONSOLIDATED BALANCE SHEET INFORMATION a. Other current assets: December 31, 2019 2018 Governmental authorities $ 8,388 $ 6,264 Prepaid expenses 6,060 6,612 Deferred charges 2,868 9,446 Advance payments to suppliers 3,912 2,651 Other 1,779 1,049 $ 23,007 $ 26,022 b. Other current liabilities: Payroll and related employee accruals $ 11,500 $ 13,229 Derivative instruments - 320 Governmental authorities 651 506 Other 110 533 $ 12,261 $ 14,588 c. Long-term loans: Interest rate for December 31, Linkage 2019 2018 Maturity 2019 2018 % Loans from banks: (a) U.S. dollars 4.77 4.77 2021 $ 8,000 $ 12,000 (b) Euro EURIBOR +2.75 EURIBOR +2.75 2020 96 556 8,096 12,556 Less - current maturities 4,096 4,458 $ 4,000 $ 8,098 (a) The Company entered into a loan agreement with an Israeli bank secured by a floating charge on the assets of the Company, and which is further secured by a fixed pledge (mortgage) on the Company's real estate in Israel. In addition, there are financial covenants associated with the loan. As of December 31, 2019 the Company is in compliance with these covenants. (b) A Dutch subsidiary of the Company entered into a mortgage and loan agreement with a German bank. The amount of the mortgage is collateralized by the subsidiary's facilities in Germany. Long-term debt maturities for loans after December 31, 2019, are as follows: Year ending December 31, 2021 4,000 $ 4,000 Interest expenses on the long-term loans amounted to $395, $614 and $822 for the years ended December 31, 2019, 2018 and 2017, respectively. d. Other long-term liabilities: December 31, 2019 2018 Long-term deferred taxes $ 25 $ 580 Other 83 - $ 108 $ 580 |
SELECTED CONSOLIDATED STATEMENT
SELECTED CONSOLIDATED STATEMENTS OF INCOME (LOSS) DATA | 12 Months Ended |
Dec. 31, 2019 | |
SELECTED STATEMENTS OF OPERATIONS DATA [Abstract] | |
SELECTED CONSOLIDATED STATEMENTS OF INCOME (LOSS) DATA | NOTE 14:- SELECTED CONSOLIDATED STATEMENTS OF INCOME (LOSS) DATA a. Financial expenses, net: Year ended December 31, 2019 2018 2017 Income: Interest on cash equivalents, bank deposits and restricted cash $ 1,472 $ 981 $ 447 Other 18 29 355 1,490 1,010 802 Expenses: Interest with respect to bank credit, loans and other 395 614 844 Exchange rate differences, net 103 1,074 226 Bank charges including guarantees 3,552 3,560 3,857 Other 57 60 182 4,107 5,308 5,109 Total financial expenses, net $ 2,617 $ 4,298 $ 4,307 b. Earnings per share: The following table sets forth the computation of basic and diluted net earnings per share: 1. Numerator: Year ended December 31, 2019 2018 2017 Numerator for basic and diluted earnings per share - Net income available to holders of Ordinary shares $ 36,538 $ 18,409 $ 6,801 2. Denominator (number of shares in thousands): Year ended December 31, 2019 2018 2017 Denominator for basic net loss per share - Weighted average number of shares 55,369 54,927 54,681 Add-employee stock options 662 826 171 Denominator for diluted net earnings per share - adjusted weighted average shares assuming exercise of options 56,031 55,753 54,852 |
CUSTOMERS, GEOGRAPHIC AND SEGME
CUSTOMERS, GEOGRAPHIC AND SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
CUSTOMERS, GEOGRAPHIC AND SEGMENT INFORMATION | NOTE 15:- CUSTOMERS, GEOGRAPHIC AND SEGMENT INFORMATION The Company applies ASC 280, "Segment Reporting" ("ASC 280"). Operating segments are defined as components of an enterprise for which separate financial information is available and is evaluated regularly by the chief operating decision maker. Segments are managed separately as follows: Fixed Networks Mobility Solutions Terrestrial Infrastructure Projects a. Information on the reportable segments: 1. The measurement of the reportable operating segments is based on the same accounting principles applied in these financial statements which includes certain corporate overhead allocations. 2. The above changes in the Company's reportable segments had no effect on the goodwill assignment among the divisions. 3. Financial data relating to reportable operating segments: Year ended December 31, 2019 Fixed Networks Mobility Solutions Terrestrial Infrastructure Projects Total Revenues $ 127,265 $ 104,665 $ 31,562 $ 263,492 Cost of revenues 80,038 53,263 34,314 167,615 Gross profit (loss) 47,227 51,402 (2,752 ) 95,877 Research and development, net 10,919 19,265 - 30,184 Selling and marketing 14,955 6,485 48 21,488 General and administrative 11,363 5,948 1,322 18,633 Operating income (loss) 9,990 19,704 (4,122 ) 25,572 Financial expenses, net 2,617 Income before taxes 22,955 Taxes on income (benefit) (13,583 ) Net income $ 36,538 Depreciation and amortization expenses $ 7,032 $ 3,871 $ 75 $ 10,978 Year ended December 31, 2018 Fixed Networks Mobility Solutions Terrestrial Infrastructure Projects Total Revenues $ 144,208 $ 97,180 $ 25,003 $ 266,391 Cost of revenues 93,745 47,995 30,614 172,354 Gross profit (loss) 50,463 49,185 (5,611 ) 94,037 Research and development, net 11,764 21,259 - 33,023 Selling and marketing 16,106 6,421 179 22,706 General and administrative 11,302 4,436 1,286 17,024 Operating income (loss) 11,291 17,069 (7,076 ) 21,284 Financial expenses, net 4,298 Income before taxes 16,986 Taxes on income (benefit) (1,423 ) Net income $ 18,409 Depreciation and amortization expenses $ 6,811 $ 6,128 $ 210 $ 13,149 Year ended December 31, 2017 Fixed Networks Mobility Solutions Terrestrial Infrastructure Projects Total Revenues $ 116,105 $ 88,397 $ 78,254 $ 282,756 Cost of revenues 81,920 46,493 71,848 200,261 Gross profit 34,185 41,904 6,406 82,495 Research and development, net 12,172 15,842 - 28,014 Selling and marketing 17,782 5,782 195 23,759 General and administrative 10,987 6,326 2,548 19,861 Operating income (loss) (6,756 ) 13,954 3,663 10,861 Financial expenses, net 4,307 Income before taxes 6,554 Taxes on income (benefit) (247 ) Net income $ 6,801 Depreciation and amortization expenses $ 5,046 $ 7,902 $ 192 $ 13,140 b. Geographic information: Following is a summary of revenues by geographic areas. Revenues attributed to geographic areas, based on the location of the end customers and in accordance with ASC 280, are as follows: Year ended December 31, 2019 2018 2017 Latin America $ 81,622 $ 94,707 $ 132,134 Asia Pacific 44,181 39,381 34,586 North America 107,520 97,122 73,921 Europe, the Middle East and Africa 30,169 35,181 42,115 $ 263,492 $ 266,391 $ 282,756 c. The Company's long-lived assets (property and equipment, net) are located as follows: December 31, 2019 2018 Israel $ 62,531 $ 64,018 Latin America 3,828 4,564 United States 6,159 5,620 Europe 9,025 9,117 Other 1,041 1,084 $ 82,584 $ 84,403 d. The table below represents the revenues from major customers: Year ended December 31, 2019 2018 2017 Customer A 16 % 10 % 28 % Customer B 12 % 15 % * ) Customer C 11 % * ) * ) Customer D * ) 13 % * ) *) Less than 10% Customer A is located in Peru, Customers B and C are located in North America and Customer D is located in Colombia. |
RELATED PARTY BALANCES AND TRAN
RELATED PARTY BALANCES AND TRANSACTIONS | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY BALANCES AND TRANSACTIONS | NOTE 16:- RELATED PARTY BALANCES AND TRANSACTIONS a. The Company entered into a number of agreements for the purchase of infrastructure, construction and services from C. Mer Industries Ltd. ("C. Mer"), a publicly traded company in Israel (TASE). The Company's controlling shareholder, FIMI Opportunity Funds ("FIMI"), holds approximately 36.6% of C. Mer's share capital. b. In December 2015 the Company entered into a memorandum of understanding with Orbit Communication Systems, ("Orbit"), a publicly traded company in Israel (TASE), for development and manufacture of antenna for an aggregate amount of approximately $1,750. The memorandum specifies prices per additional product units ordered in the future by the Company. In August 2017, FIMI acquired approximately 33.4% of Orbit's share capital and representatives of FIMI serve on Orbit's board of directors. Transactions with Orbit are presented for the period starting August 2017. As of December 31, 2019, FIMI holds approximately 41.8% of Orbit share capital. c. Transactions with the related parties: Year ended December 31, 2019 2018 2017 Cost of revenues of products $ 2,048 $ 764 $ 3,770 Research and development - $ 346 $ 61 Purchase of property and equipment and inventory - $ 101 $ 100 d. Balances with the related parties: December 31, 2019 2018 Advance payments $ 344 $ 144 Trade payables $ 109 $ 125 Accrued expenses $ 1,761 $ 1,797 |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 17:- SUBSEQUENT EVENT 1. On January 29, 2020, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Comtech Telecommunications Corp., a Delaware corporation (“Comtech”), and Convoy Ltd., a company organized under the laws of the State of Israel and a wholly-owned subsidiary of Comtech (“Merger Sub”), pursuant to which, among other things, Comtech will acquire Gilat by way of the merger of Merger Sub with and into Gilat (the “Merger”), with Gilat surviving the Merger as a wholly-owned subsidiary of Comtech. The Merger is structured as a statutory merger pursuant to Sections 314-327 of the Companies Law, 5759-1999, of the State of Israel. Pursuant to the terms and subject to the conditions of the Merger Agreement each ordinary share, nominal value NIS 0.20, of Gilat (the “Gilat Shares”), issued and outstanding immediately prior to the effective time of the Merger (the “Effective Time”) will be cancelled and extinguished and automatically converted into the right to receive (the “Merger Consideration”) of a combination of (A) $7.18 in cash, without interest, plus (B) 0.08425 of a validly issued, fully paid and nonassessable share of the common stock of Comtech, par value $0.10 per share (the “Comtech Common Stock”), with cash payable in lieu of fractional shares of Comtech Common Stock, implying a total consideration of approximately $10.25 per Gilat Share on the date we entered into the Merger Agreement. In addition, during the year ended December 31, 2019 the Company had expenses related to the Merger which amounted to $118 and were recorded as part of its G&A expenses. The Boards of Directors of Comtech and Gilat have unanimously approved the Merger and the Merger Agreement. The Merger is subject to customary closing conditions of transactions between public United States and Israeli companies. The consummation of the Merger is not subject to any financing condition. Various legal proceedings have been initiated by purported shareholder plaintiffs against the Company and its directors and against Comtech and its principal executive officer with respect to the Merger and the disclosure contained in the proxy statement/registration statement on Form S-4 that was filed with the SEC on March 2, 2020 seeking approval of the merger and certain other matters and registering the shares of Comtech Common Stock to be issued in connection with the Merger. The results of any such potential legal proceedings are difficult to predict and could delay or prevent the Merger from becoming effective in a timely manner. The Merger is expected to be completed in the second or third quarters of 2020. 2. The ongoing Coronavirus pandemic that first surfaced in China and is spreading throughout the world has had an adverse effect on the Company's industry and the markets in which its operates. The Coronavirus outbreak has significantly impacted the travel and aviation markets in which the Company’s significant IFC customers operate and has resulted in a slowdown of the Company's business with some of these customers. The Company has experienced postponed orders and suspended decision making in other markets that are likely to be negatively affected by the Coronavirus. As a result, during the first quarter of 2020, the Company has experienced a significant reduction in business and expects to record a loss for the quarter. Further, the guidance of social distancing and the requirements to work from home in key territories such as Israel, Peru, China, California, Colombia, Australia, Bulgaria and other countries, in addition to greatly reduced travel globally, has resulted in a substantial curtailment of business activities, which has affected and is likely to continue to affect the Company's ability to conduct fieldwork as well as deliver products and services. While the majority of the Company's products are manufactured outside of China, certain components and materials are manufactured or procured in China and the Company also has other operations in Asia. The Company is unable at this time to estimate the extent of the effect of the Coronavirus on its business. In order to mitigate the impact of the decline in business, the Company adopted a plan to reduce expenses, including a reduction in its headcount as well as other cost savings measures. This public health threat is likely to continue to adversely impact the Company by its negative impact on the Company's ability to generate revenues due to reduced end-market demand from governments, enterprises and consumers, leading to order delays and cancellations. In addition, certain of the Company's sales and support teams are unable to travel or meet with customers and the threat has caused operating, manufacturing, supply chain and project development delays and disruptions, labor shortages, travel and shipping disruption and shutdowns (including as a result of government regulation and prevention measures). Given the potential impact on the Company's businesses as a result of the outbreak, the values or the recoverable amounts of certain assets subsequent to the reporting date may be less than their carrying amounts as of December 31, 2019. The potential decline in value is determined to be a non-adjusting event as management concluded that the cause of the shut down in the series of events that led to the disruptions in operations is not the outbreak itself, but rather the measures taken by the government after the reporting date. Because the outbreak may also result in uncertainties in relation to the assumptions and estimations associated with the measurement of various assets and liabilities in the financial statements that the Company may not have previously recognized or disclosed, the occurrence of the outbreak has certainly added additional risks that the carrying amounts of assets and liabilities may require certain adjustments within the next financial year which financial effect cannot be reasonably estimated at this stage. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Use of estimates | a. Use of estimates: The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Functional currency | b. Functional currency: The majority of the revenues of Gilat Satellite Networks Ltd. and certain of its subsidiaries are generated in U.S. dollars ("dollar") or linked to the dollar. In addition, a substantial portion of Gilat Satellite Networks Ltd. and certain of its subsidiaries' costs are incurred in dollars. The Company's management believes that the dollar is the primary currency of the economic environment in which Gilat Satellite Networks Ltd. and certain of its subsidiaries operate. Thus, the functional and reporting currency of Gilat Satellite Networks Ltd. and certain of its subsidiaries is the dollar. Accordingly, monetary accounts maintained in currencies other than the dollar are remeasured into dollars in accordance with ASC 830, "Foreign Currency Matters" ("ASC 830"). All transaction gains and losses of the remeasurement of monetary balance sheet items are reflected in the consolidated statements of income as financial income or expenses, as appropriate. The financial statements of certain foreign subsidiaries, whose functional currency has been determined to be their local currency, have been translated into dollars. Assets and liabilities have been translated using the exchange rates in effect at the balance sheet date. Statements of income amounts have been translated using specific rates. The resulting translation adjustments are reported as a component of shareholders' equity in accumulated other comprehensive income. |
Principles of consolidation | c. Principles of consolidation: The consolidated financial statements include the accounts of Gilat Satellite Networks Ltd. and its subsidiaries in which the Company has a controlling voting interest and entities consolidated under the variable interest entities ("VIE") provisions of ASC 810, "Consolidation" ("ASC 810"). Inter-company balances and transactions have been eliminated upon consolidation. Most of the activity of the subsidiary in Colombia ("Gilat Colombia") consists of operating subsidized projects for the Colombian Ministry of Information Technologies and Communications ("Ministry of ITC") through its "Dirección de Conectividad", or DirCon (formerly known as Compartel Program). Gilat Colombia was awarded a number of projects from the Ministry of ITC, the latest of which was awarded in 2013, and was further extended several times in 2017 and 2018, and completed during 2019. As required in the bid documents for the Ministry of ITC projects, the Company established trusts (the "Trusts") and entered into governing trust agreements for each project (collectively, the "Trust Agreements"). The Trusts were established for the purpose of holding the network equipment, processing payments to subcontractors, and holding the funds received through the subsidy from the government until they are released in accordance with the terms of the subsidy and paid to Gilat Colombia. The Trusts are a mechanism to allow the Colombian government to review amounts to be paid with the subsidy and verify that such funds are used in accordance with the transaction document and the terms of the subsidy. Gilat Colombia generates revenues both from the subsidy, as well as from the use of the network that it operates. The Trusts are considered VIEs and Gilat Colombia is identified as the primary beneficiary of the Trusts. Under ASC 810, the Company performs ongoing reassessments of whether it is the primary beneficiary of the VIE. The assessment of Company's management is that the Company has the power to direct the activities of a VIE that most significantly impact the VIE's activities (it is responsible for establishing and operating the networks), and the obligation to absorb losses of the VIE that could potentially be significant to the VIE and the right to receive benefits from the VIE that could potentially be significant to the VIE's economic performance. As such, the Trusts were consolidated in the financial statements of the Company since their inception. The cash held by the Trusts is consolidated within the financial statements of the Company and classified as Restricted cash held by trustees. |
Cash equivalents | d. Cash equivalents: Cash equivalents are short-term highly liquid investments that are not restricted as to withdrawals or use with maturities of three months or less at the date acquired. |
Short-term and long-term restricted cash | e. Short-term and long-term restricted cash: Short-term restricted cash is either invested in bank deposits, which mature within one year, or in short-term highly liquid investments that are restricted to withdrawals or use. As of December 31, 2019, the vast majority of this amount was linked to the dollar. Such deposits are used as collateral for performance and advance payment guarantees to customers, surety bonds and the lease of some of the Company’s offices, and bear weighted average interest rates of 1.74% and 2.36% as of December 31, 2019 and 2018, respectively. Long-term restricted cash is primarily invested in bank deposits, which mature after more than one year. As of December 31, 2019 and 2018, the amount were linked to currencies other than the dollar. It bears annual weighted average interest rates of 6.82% and 6.54% as of December 31, 2019 and 2018, respectively. Such deposits are used as collateral for performance guarantees to customers and the lease of some of the Company's offices. |
Restricted cash held by trustees | f. Restricted cash held by trustees: As of December 31, 2018, restricted cash held by trustees was invested in a savings bank account linked to the Colombian Peso and was being released based upon performance milestones as stipulated in the agreements with the Ministry of ITC (see Note 2c). As of December 31, 2019, following the completion of the projects in Gilat Colombia, there weren't any restricted cash balances. |
Inventories | g. Inventories: Inventories are stated at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Inventory write-offs are provided to cover risks arising from slow-moving items, excess inventories, discontinued products, new products introduction and for market prices lower than cost. Any write-off is recognized in the consolidated statements of income as cost of revenues. In addition, if required, the Company records a liability for firm non-cancelable and unconditional purchase commitments with contract manufacturers for quantities in excess of the Company's future demands forecast consistent with its valuation of excess and obsolete inventory. Cost is determined as follows: Raw materials, parts and supplies - using the weighted average cost method. Work in progress and assembled raw materials - represents the cost of manufacturing with the addition of allocable indirect manufacturing costs, using the weighted average cost method. Finished products - calculated on the basis of raw materials, direct manufacturing costs with the addition of allocable indirect manufacturing costs, using the weighted average cost method. |
Property and equipment, net | h. Property and equipment, net: Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets as follows: Years Buildings 50 Computers, software and electronic equipment 2 - 10 Office furniture and equipment 3 - 15 Vehicles 3 - 7 Leasehold improvements are amortized by the straight-line method over the term of the lease or the estimated useful life of the improvements, whichever is shorter. Rental income generated from office spaces leased to others is included in general and administrative expenses. Network equipment leased to others under operating leases is carried at cost less accumulated depreciation and depreciated using the straight-line method over the useful life of the assets of between 2 to 5 years. |
Intangible assets | i. Intangible assets: Intangible assets subject to amortization are initially recognized based on the fair value allocated to them, and subsequently stated at amortized cost. The assets are amortized over their estimated useful lives using the straight-line method over an estimated period during which benefits are expected to be received, in accordance with ASC 350, "Intangible - Goodwill and Other" ("ASC 350") as follows: Years Technology 7.9 Customer relationships 6.8 Marketing rights and patents 12.1 |
Impairment of long-lived assets | j. Impairment of long-lived assets: The Company's long-lived assets and identifiable intangible assets that are subject to amortization are reviewed for impairment in accordance with ASC 360, "Property, Plant and Equipment" ("ASC 360"), whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. Such measurement includes significant estimates. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. However, the carrying amount of a group of assets is not to be reduced below its fair value. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. In the years ended December 31, 2019 and 2018, no impairments of long-lived assets were recorded. |
Goodwill | k. Goodwill: Goodwill represents the excess of the purchase price in a business combination over the fair value of the net tangible and intangible assets acquired. Under ASC 350, goodwill is not amortized, but rather is subject to an annual impairment test. Goodwill is tested for impairment at the reporting unit level by comparing the fair value of the reporting unit with its carrying value. The Company performs its annual impairment analysis of goodwill in the fourth quarter of the year and whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. ASC 350 allows an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. If the qualitative assessment does not result in a more likely than not indication of impairment, no further impairment testing is required. If it does result in a more likely than not indication of impairment, the two-step impairment test is performed. Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the first step of the goodwill impairment test. In the years ended December 31, 2018 and 2017, following an improvement in the Mobility Solutions segment results, the Company performed a qualitative assessment and concluded that it is not more likely than not that the fair value of the reporting units is less than their carrying amounts and accordingly it is unnecessary to perform the two-step quantitative goodwill impairment test. For the year ended December 31, 2019, as a period of three years has passed since the last quantitative assessment, the Company performed updated assessment to continue to support its conclusion that no impairment of goodwill is required for any of its reporting units. |
Contingencies | l. Contingencies: The Company is currently subject to involved in various claims and legal proceedings. The Company reviews the status of each matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss. |
Revenue recognition | m. Revenue recognition: The Company generates revenues mainly from the sale of products (including construction of networks), satellite-based communication networks services and from providing connectivity, internet access and telephony services. The Company sells its products and services to enterprises, government and residential customers under large-scale contracts that utilize both the Company's networks and other networks that the Company installs, mainly based on BOT contracts. These large‑scale contracts sometimes involve the installation of thousands of VSATs or massive fiber-optic and microwave networks. Sale of products includes mainly the sale of VSATs, hubs, SSPAs, low-profile antennas, on-the-move/on-the-pause terminals, and construction and installation of large-scale networks based on BOT contracts. Sale of services includes access to and communication via satellites ("space segment"), installation of equipment, telephone services, internet services, consulting, on-line network monitoring, network maintenance and repair services. The Company sells its products primarily through its direct sales force and indirectly through resellers or system integrators. Sales consummated by the Company's sales force and sales to resellers or system integrators are considered sales to end-users. The Company recognizes revenue when (or as) it satisfies performance obligations by transferring promised products or services to its customers in an amount that reflects the consideration the Company expects to receive. The Company applies the following five steps: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied. See Note 2z for additional information. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price (“SSP”) basis. The Company establishes SSP based on management judgment, considering internal factors such as margin objectives, pricing practices and historical sales. Consideration from contracts that is assessed as not being probable of collection is not recognized as revenue until the contract is completed and cash is received. Collectability is re-assessed when there is a significant change in facts or circumstances. The Company’s assessment of collectability considers whether it may limit its exposure to credit risk through its right to stop transferring additional service in the event the customer is delinquent as well as certain contract terms such as down payments that reduce its exposure to credit risk. Revenue from the sale of equipment is recognized at a point in time, once the customer has obtained control over the items purchased. When significant acceptance provisions are included in the arrangement, the Company defers recognition of the revenue until the acceptance occurs. The Company generally does not grant a right of return to its customers. Revenue from periodic services is recognized ratably over the term the services are rendered. Revenue from other services is recognized upon their completion. Revenues from contracts under which the Company provides significant construction to the customer's specifications (mostly governmental projects) are generally recognized over time because of continuous transfer of control to the customer. This continuous transfer of control to the customer is supported by clauses in the contract that allow the customer to unilaterally terminate the contract for convenience, pay the Company for costs incurred plus a reasonable profit and take control of any work in process. The Company generally uses the cost-to-cost measure of progress for its contracts because it best depicts the transfer of control to the customer, which occurs as it incurs costs on the contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenues are recorded proportionally as costs are incurred. Costs to fulfill include labor, materials and subcontractors’ costs and other direct and allocated indirect costs. When estimates of total costs to be incurred exceed total estimates of revenue to be earned on the uncompleted contracts, a provision for the entire loss on the contract is recognized in the period the loss is identified. Under the typical payment terms of government fixed-price contracts, the customer pays the Company milestones-based payments. Those payments are based on quantifiable measures of performance or on the achievement of specified events or milestones. Because those payments are due upon completion of those milestones, they may result in revenue recognized in excess of billings and are presented as part of contract assets on the balance sheet. In addition, the Company typically receives interim payments as work progresses, although for some contracts, the company may be entitled to receive an advance payment. The Company recognizes a liability for these payments in excess of revenue recognized and present it as liabilities on the balance sheet. The advance payment typically is not considered a significant financing component because it is used to meet working capital demands that can be higher in the early stages of a contract. Amounts recognized as revenue and which the Company has unconditional right to receive are classified as trade receivables on the balance sheet. Deferred revenue and advances from customers are recorded when the Company receives payments from customers before performance obligations have been performed. Deferred revenue is recognized as revenue as (or when) the Company performs the performance obligation under the contract. For information regarding disaggregated revenues, please refer to Note 15. The Company pays sales commissions to external sales agents and to sales and marketing personnel based on their attainment of certain predetermined sales goals. Sales commissions are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions are capitalized and amortized upon recognition of the related revenue, consistently with the transfer to the customer of the goods or services to which they relate. Amortization expenses related to these costs are mostly included in sales and marketing expenses in the accompanying consolidated statements of operations. Amortization expenses during the year ended December 31, 2019 were $1,643. The capitalized balances related to these costs as of December 31, 2019 and 2018 were $473 and $1,286, respectively. |
Selling and marketing expenses | n. Selling and marketing expenses: Selling and marketing expenses include shipping expenses in the amounts of $1,309, $1,303 and $1,225 for the years ended December 31, 2019, 2018 and 2017, respectively. Advertising costs are expensed as incurred. Advertising expenses amounted to $263, $247 and $204 for the years ended December 31, 2019, 2018 and 2017, respectively. |
Warranty costs | o. Warranty costs: Generally, the Company provides product assurance warranties for periods between twelve to twenty four months at no extra charge that cover the compliance of the products with agreed-upon specifications. A provision is recorded for estimated warranty costs based on the Company's experience. Warranty expenses amounted to $119, $591 and $323 for the years ended December 31, 2019, 2018 and 2017, respectively. |
Research and development expenses | p. Research and development expenses: Research and development costs are charged to the consolidated statements of income (loss) as incurred and are presented net of government grants. ASC 985, "Software", requires capitalization of certain software development costs subsequent to the establishment of technological feasibility. Based on the Company's product development process, technological feasibility is established upon completion of a working model. Costs incurred by the Company between completion of the working models and the point at which the products are ready for general release have been insignificant. Therefore, all research and development costs have been expensed. |
Research and development grants | q. Research and development grants: The Company receives royalty-bearing and non-royalty-bearing grants from the Government of Israel and from other funding sources, for approved research and development projects. These grants are recognized at the time the Company is entitled to such grants on the basis of the costs incurred or milestones achieved as provided by the relevant agreement and included as a deduction from research and development expenses. Research and development grants deducted from research and development expenses amounted to $2,024, $1,426 and $1,419 for the years ended December 31, 2019, 2018 and 2017, respectively. |
Accounting for stock-based compensation | r. Accounting for stock-based compensation: The Company accounts for stock-based compensation in accordance with ASC 718, "Compensation-Stock Compensation" ("ASC 718"). ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service period in the Company's consolidated statements of income. The Company recognizes compensation expenses for the value of its awards, based on the straight-line method over the requisite service period of each of the awards. Effective as of January 1, 2017, the Company adopted Accounting Standards Update 2016-09, "Compensation-Stock Compensation (Topic 718)" ("ASU 2016-09") on a modified, retrospective basis. ASU 2016-09 permits entities to make an accounting policy election related to how forfeitures will impact the recognition of compensation cost for stock - based compensation: to estimate the total number of awards for which the requisite service period will not be rendered or to account for forfeitures as they occur. Upon adoption of ASU 2016-09, the Company elected to change its accounting policy to account for forfeitures as they occur. The change was applied on a modified, retrospective basis with a cumulative effect adjustment to retained earnings of $55 (which increased the accumulated deficit) as of January 1, 2017. |
Income taxes | s. Income taxes: The Company accounts for income taxes in accordance with ASC 740, "Income Taxes" ("ASC 740"). ASC 740 prescribes the use of the liability method whereby deferred tax assets and liability account balances are determined based on differences between the financial reporting and the tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value if it is more likely than not that a portion or all of the deferred tax assets will not be realized. ASC 740 contains a two-step approach to recognizing and measuring a liability for uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company classifies interest and penalties on income taxes as financial expenses and general and administrative expenses, respectively. |
Concentrations of credit risks | t. Concentrations of credit risks: Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, short-term and long-term restricted cash, restricted cash held by trustees, trade receivables and contract assets. The majority of the Company's cash and cash equivalents are invested in dollars with major banks in Israel, the United States and South America. Generally, these cash and cash equivalents may be redeemed upon demand and therefore, management believes that they bear low risk. The majority of the Company's short-term and long-term restricted cash are invested in dollars with major banks in Israel. The Company is generally entitled to receive the restricted cash based upon actual performance of its projects. The Company also has restricted cash held by trustees, which is invested in Colombian Pesos with major banks in Colombia. As of December 31, 2019 and 2018, restricted cash held by the trustees amounted to $0 and $4,372, respectively. The Company is entitled to receive the restricted cash held by the trustee in stages based upon operational milestones. The cash held in the Trusts is reflected in the Company's consolidated balance sheet as Restricted cash held by trustees. Trade receivables and contract assets of the Company are mainly derived from sales to major customers located in North, South and Central America, Europe and Asia. The Company performs ongoing credit evaluations of its customers and obtains letters of credit and bank guarantees for certain receivables. An allowance for doubtful accounts is determined with respect to specific debts that the Company has determined to be doubtful of collection. As of December 31, 2019 and 2018, the Company has recorded a provision for doubtful accounts in the amounts of $2,327 and $3,202, respectively. The Company has recorded a net expense (income) from bad debts in the amount of ($26), ($376) and $2,231 for the years ended December 31, 2019, 2018 and 2017, respectively. |
Employee related benefits | u. Employee related benefits: Severance pay: The Company's liability for severance pay for its Israeli employees is calculated pursuant to the Israeli Severance Pay Law based on the most recent salary of the employees multiplied by the number of years of employment, as of the balance sheet date. Employees whose employment is terminated by the Company or who are otherwise entitled to severance pay in accordance with Israeli law or labor agreements are entitled to one month's salary for each year of employment or a portion thereof. The Company's liability for all of its Israeli employees is partly provided for by monthly deposits for insurance policies and the remainder by an accrual. The value of these policies is recorded as an asset in the Company's consolidated balance sheet. During April and May 2008 (the "transition date"), the Company amended the contracts of most of its Israeli employees so that starting on the transition date, such employees are subject to Section 14 of the Severance Pay Law, 1963 ("Section 14") for severance pay accumulated in periods of employment subsequent to the transition date. In accordance with Section 14, upon termination, the release of the contributed amounts from the fund to the employee will relieve the Company from any further severance liability and no additional payments will be made by the Company to the employee. As a result, the related obligation and amounts deposited on behalf of such obligation are not stated on the consolidated balance sheets, as the Company is legally released from severance obligations to employees once the amounts have been deposited and the Company has no further legal ownership of the amounts deposited. The carrying value for the deposited funds for the Company's employees' severance pay for employment periods prior to the transition date include profits and losses accumulated up to the balance sheet date. The deposited funds may be withdrawn only upon the fulfillment of the obligation pursuant to the Israeli Severance Pay Law or labor agreements. Severance pay expenses for the years ended December 31, 2019, 2018 and 2017, amounted to $3,162, $3,138 and $2,819, respectively. 401(k) profit sharing plans: The Company has a number of savings plans in the United States that qualify under Section 401(k) of the current Internal Revenue Code as a "safe harbor" plan. The Company must make a mandatory contribution to the 401(k) plan to satisfy certain nondiscrimination requirements under the Internal Revenue Code. This mandatory contribution is made to all eligible employees. The contribution costs for all the plans were $526, $479 and $411 for the years ended December 31, 2019, 2018 and 2017, respectively. |
Fair value of financial instruments | v. Fair value of financial instruments: The Company applies ASC 820, "Fair Value Measurements and Disclosures" ("ASC 820"). Under this standard, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., "the exit price") in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the inputs as follows: Level 1 - Valuations based on quoted prices in active markets for identical assets thatthe Company has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. Level 2 - Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The availability of observable inputs can vary from investment to investment and is affected by a wide variety of factors, including, for example, the type of investment, the liquidity of markets and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment and the investments are categorized as Level 3. The carrying amounts of cash and cash equivalents, restricted cash, trade receivables, contract assets, other current assets, trade payables, accrued expenses and other current liabilities approximate their fair value due to the short-term maturities of such instruments. Based on the borrowing rates currently available to the Company for bank loans with similar terms and maturities, the Company estimates that the carrying value of its long-term debt approximates their fair value. The Company measured the fair value of the forward contracts in accordance with ASC 820 and classified them as Level 2. Forward contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments. |
Earnings per share | w. Earnings per share: In accordance with ASC 260, "Earnings per Share", basic earnings per share is computed based on the weighted average number of Ordinary shares outstanding during each period. Diluted earnings per share is computed based on the weighted average number of Ordinary shares outstanding during each period, plus dilutive potential Ordinary shares considered outstanding during the period. The total weighted average number of shares related to the outstanding options excluded from the calculations of diluted earnings per share, as they would have been anti-dilutive, was 1,467,849, 573,552 and 1,627,552 for the years ended December 31, 2019, 2018 and 2017, respectively. |
Derivatives and hedging activities | x. Derivatives and hedging activities: ASC 815, "Derivatives and Hedging" ("ASC 815"), as amended, requires the Company to recognize all derivatives on the balance sheet at fair value. Derivatives that are not hedges must be adjusted to fair value through income (loss). If the derivative is a hedge, depending on the nature of the hedge, changes in the fair value of derivatives are either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income (loss) until the hedged item is recognized in earnings. As a result of adopting new accounting guidance discussed in Note 2, " Recently adopted accounting pronouncements," beginning January 1, 2019, gains and losses on the derivatives instruments that are designated and qualify as a cash flow hedge are recorded in accumulated other comprehensive income (loss) and reclassified into in the same accounting period in which the designated forecasted transaction or hedged item affects earnings. Prior to January 1, 2019, cash flow hedge ineffectiveness was separately measured and reported immediately in earnings. Cash flow hedge ineffectiveness was immaterial during 2018 and 2017. The Company measured the fair value of the forward contracts in accordance with ASC 820 (classified as Level 2). The Company entered into forward and cylinder option contracts to hedge against part of the risk of changes in future cash flow from payments of payroll and related expenses denominated in New Israeli Shekels ("NIS"). |
Comprehensive income (loss) | y. Comprehensive income (loss): The Company accounts for comprehensive income (loss) in accordance with ASC 220, "Comprehensive Income". Comprehensive income (loss) generally represents all changes in shareholders' equity during the period except those resulting from investments by, or distributions to, shareholders. The Company determined that its items of other comprehensive income (loss) relate to unrealized gains and losses on forward contracts and foreign currency translation adjustments. The following tables shows the components of accumulated other comprehensive income (loss), as of December 31, 2019 and 2018: December 31, 2019 Foreign currency translation adjustments Unrealized gains (losses) on cash flow hedges Total Beginning balance $ (5,062 ) $ (318 ) $ (5,380 ) Other comprehensive income before reclassifications 14 653 667 Amounts reclassified from accumulated other comprehensive loss - (335 ) (335 ) Net current-period other comprehensive income 14 318 332 Ending balance $ (5,048 ) $ - $ (5,048 ) December 31, 2018 Foreign currency translation adjustments Unrealized gains (losses) on cash flow hedges Total Beginning balance $ (3,217 ) $ 171 $ (3,046 ) Other comprehensive loss before reclassifications (1,845 ) (1,548 ) (3,393 ) Amounts reclassified from accumulated other comprehensive income - 1,059 1,059 Net current-period other comprehensive loss (1,845 ) (489 ) (2,334 ) Ending balance $ (5,062 ) $ (318 ) $ (5,380 ) |
Recently adopted accounting pronouncements | z. Recently adopted accounting pronouncements: 1. On January 1, 2018, the Company adopted Topic 606 using the modified retrospective method for contracts which were not completed as of January 1, 2018. Under the modified retrospective method, the Company recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of accumulated deficit. This adjustment did not have a material impact on the Company’s consolidated financial statements. The Standard requires the deferral and amortization of “incremental” costs incurred to obtain a contract. The primary contract acquisition costs for the Company are sales commissions. Under Topic 605, the Company expensed sales commissions as incurred while under Topic 606 such costs are classified as a contract asset and amortized over a period that approximates the timing of revenue recognition on the underlying contracts. The cumulative effect of the changes made to the consolidated balance sheet as of January 1, 2018 for the adoption of Topic 606-10 was as follows: December 31, 2017 Impact of adoption January 1, 2018 Condensed consolidated balance sheet: Other current assets $ 19,415 $ 2,004 $ 21,419 Accrued expenses $ 75,270 $ 483 $ 75,753 Accumulated deficit $ (702,959 ) $ 1,521 $ (701,438 ) Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting under Revenue Recognition (“Topic 605”). 2. In February 2016, the FASB issued ASU 2016-02, Leases (“Topic 842” or “ASC 842”). The standard requires lessees to recognize almost all leases on the balance sheet as a right-of-use asset and a lease liability and requires leases to be classified as either an operating or a finance type lease. The standard excludes leases of intangible assets or inventory. Leases with a term of 12 months or less will be accounted for in a manner similar to the accounting under existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. ASC 842 supersedes the previous leases standard, ASC 840, "Leases". The Company adopted ASC 842 on January 1, 2019, using the modified retrospective approach, by applying the new standard to all leases existing at the date of initial application. Results and disclosure requirements for reporting periods beginning after January 1, 2019 are presented under ASC 842, while prior period amounts have not been adjusted and continue to be reported in accordance with ASC 840. The Company leases real estate and storage areas, which are all classified as operating leases. In addition to rent payments, the leases may require the Company to pay for insurance, maintenance and other operating expenses. The Company determines if an arrangement is a lease at inception. Lease classification is governed by five criteria in ASC 842-10-25-2. If any of these five criteria is met, the Company classifies the lease as a finance lease. Otherwise, the Company classifies the lease as an operating lease. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities in the consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating and finance lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at the commencement date to determine the present value of the lease payments. Operating lease expenses are recognized on a straight-line basis over the lease term. Several of the Company’s leases include options to extend the lease. For purposes of calculating lease liabilities, lease terms include options to extend the lease when it is reasonably certain that the Company will exercise such options. The Company’s lease agreements do not contain any material residual value guarantees. The Company's ROU assets are reviewed for impairment in accordance with ASC 360, "Property, Plant and Equipment" ("ASC 360"), whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The new standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption for all leases with a term shorter than 12 months. This means that for those leases, the Company does not recognize ROU assets or lease liabilities, including not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition, but recognizes lease expenses over the lease term on a straight-line basis. The Company also elected the practical expedient to not separate lease and non-lease components for all of the Company’s leases. The new lease standard does not have a notable impact on the Company’s financial covenant compliance under its credit lines. The Company recorded upon adoption as of January 1, 2019, right-of-use leased assets and corresponding liabilities of $5,581. See Note 9 for further information on leases. 3. The Company adopted Accounting Standards Update (“ASU”) No. 2017- 12, “Derivatives and Hedging” (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which amended the eligibility criteria for hedged items and transactions to expand an entity’s ability to hedge nonfinancial and financial risk components. The new guidance eliminates the requirement to separately measure and present hedge ineffectiveness and aligns the presentation of hedge gains and losses with the underlying hedge item. The new guidance also simplifies the hedge documentation and hedge effectiveness assessment requirements. The amended presentation and disclosure requirements were adopted on a prospective basis, while any amendments to cash flow and net investment hedge relationships which existed on the date of adoption were applied on a “modified retrospective” basis, meaning a cumulative effect adjustment to the opening balance of retained earnings as of the beginning of the year of adoption. The new guidance was effective for the Company on January 1, 2019 and the adoption did not have a material impact on the Company’s consolidated financial statements.. |
Recently issued accounting pronouncements | aa. Recently issued accounting pronouncements: 1. In June 2016, the FASB issued No. 2016-13 (ASU 2016-13) “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2019. The Company does not expect that this new guidance will have a material impact on the Company’s consolidated financial statements. 2. In January 2017, the FASB issued No. 2017-04 (ASU 2017-04) “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” ASU 2017-04 eliminates step two of the goodwill impairment test and specifies that goodwill impairment should be measured by comparing the fair value of a reporting unit with its carrying amount. Additionally, the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets should be disclosed. ASU 2017-04 is effective for annual or interim goodwill impairment tests performed in fiscal years beginning after December 15, 2019. The Company does not expect that this new guidance will have a material impact on the Company’s consolidated financial statements. 3. In December 2019, the FASB issued No. 2019-12, Income Taxes (Topic 740): “Simplifying the Accounting for Income Taxes” (ASU 2019-12), which simplifies the accounting for income taxes. This guidance will be effective for us in the first quarter of 2021 on a prospective basis, and early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Property and Equipment Useful Lives | Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets as follows: Years Buildings 50 Computers, software and electronic equipment 2 - 10 Office furniture and equipment 3 - 15 Vehicles 3 - 7 |
Schedule of Intangible Assets Estimated Useful Life | The assets are amortized over their estimated useful lives using the straight-line method over an estimated period during which benefits are expected to be received, in accordance with ASC 350, "Intangible - Goodwill and Other" ("ASC 350") as follows: Years Technology 7.9 Customer relationships 6.8 Marketing rights and patents 12.1 |
Schedule of Accumulated Other Comprehensive Income, Net | The following tables shows the components of accumulated other comprehensive income (loss), as of December 31, 2019 and 2018: December 31, 2019 Foreign currency translation adjustments Unrealized gains (losses) on cash flow hedges Total Beginning balance $ (5,062 ) $ (318 ) $ (5,380 ) Other comprehensive income before reclassifications 14 653 667 Amounts reclassified from accumulated other comprehensive loss - (335 ) (335 ) Net current-period other comprehensive income 14 318 332 Ending balance $ (5,048 ) $ - $ (5,048 ) December 31, 2018 Foreign currency translation adjustments Unrealized gains (losses) on cash flow hedges Total Beginning balance $ (3,217 ) $ 171 $ (3,046 ) Other comprehensive loss before reclassifications (1,845 ) (1,548 ) (3,393 ) Amounts reclassified from accumulated other comprehensive income - 1,059 1,059 Net current-period other comprehensive loss (1,845 ) (489 ) (2,334 ) Ending balance $ (5,062 ) $ (318 ) $ (5,380 ) |
Schedule of Cumulative Effects of Applying New Accounting Pronouncement ASU 2014-09 | The cumulative effect of the changes made to the consolidated balance sheet as of January 1, 2018 for the adoption of Topic 606-10 was as follows: December 31, 2017 Impact of adoption January 1, 2018 Condensed consolidated balance sheet: Other current assets $ 19,415 $ 2,004 $ 21,419 Accrued expenses $ 75,270 $ 483 $ 75,753 Accumulated deficit $ (702,959 ) $ 1,521 $ (701,438 ) |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories are comprised of the following: December 31, 2019 2018 Raw materials, parts and supplies $ 6,638 $ 5,885 Work in progress and assembled raw materials 15,409 10,548 Finished products 5,156 4,676 $ 27,203 $ 21,109 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment, net consisted of the following: December 31, 2019 2018 Cost: Buildings and land $ 91,823 $ 92,025 Computers, software and electronic equipment 51,745 50,390 Network equipment 27,837 40,502 Office furniture and equipment 3,665 5,317 Vehicles 240 324 Leasehold improvements 3,674 3,556 178,984 192,114 Accumulated depreciation 96,400 107,711 Depreciated cost $ 82,584 $ 84,403 *) The Company recorded a reduction of $18,718, $732 and $46,051 to the cost and accumulated depreciation of fully depreciated propery plant and equipment that are no longer in use for the years ended December 31, 2019, 2018 and 2017, respectively. |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets, net consisted of the following: December 31, 2019 2018 Original amounts: Technology $ 42,504 $ 42,504 Customer relationships 4,466 4,466 Marketing rights and patents 3,421 3,421 50,391 50,391 Accumulated amortization: Technology 42,002 41,281 Customer relationships 4,466 4,466 Marketing rights and patents 2,400 2,210 48,868 47,957 $ 1,523 $ 2,434 |
Schedule of Estimated Amortization Expenses | Estimated amortization expenses for the following years is as follows: Year ending December 31, 2020 $ 441 2021 431 2022 321 2023 330 $ 1,523 |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
GOODWILL [Abstract] | |
Schedule of Goodwill | December 31, 2019 2018 Goodwill *) $ 105,647 $ 105,647 Accumulated impairment losses (62,179 ) (62,179 ) $ 43,468 $ 43,468 *) The carrying amount of the goodwill is associated with the Mobility Solutions segment. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Space Segment Services [Member] | |
Operating Leases Segment [Line Items] | |
Schedule of Future Minimum Payments | Future minimum payments due for space segment services to be rendered subsequent to December 31, 2019, are as follows: Year ending December 31, 2020 $ 8,402 2021 2,877 2022 1,215 $ 12,494 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule of Components of Operating Lease Expense | The Company's subsidiaries entered into various non-cancelable operating lease agreements for certain of their offices and facilities, expiring between 2020 and 2027. Components of operating lease expense were as follows: Year ended December 31, 2019 Operating lease cost* $ 2,196 Short- term lease cost 272 Total lease costs $ 2,468 *) Operating lease cost were paid in cash during the year ended December 31,2019 |
Schedule of Supplemental Information Related to Operating Leases | Supplemental information related to operating leases was as follows: Year ended December 31, 2019 New operating lease assets obtained in exchange for operating lease liabilities $ 1,469 |
Schedule of Future Lease Payments Under Operating Leases | Future lease payments under operating leases as of December 31, 2019 were as follows: 2020 $ 2,019 2021 1,775 2022 1,269 2023 517 Thereafter 16 Total future lease payements 5,596 Less imputed interest (361 ) Total lease liability balance $ 5,235 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair value of derivative instruments | The following table details the fair value of derivative instruments in the consolidated balance sheets: Fair value of derivative instruments December 31, 2019 2018 Derivative: Foreign exchange forward contracts / options (1) Other current assets (liabilities) - $ (318 ) (1) To protect against changes in value of forecasted foreign currency cash flows resulting from salaries and related payments that are denominated in NIS, the Company has entered into foreign currency forward contracts. These contracts were designated as cash flow hedges, as defined by ASC 815, as amended, and are considered highly effective as hedges of these expenses. As of December 31, 2019 there were no outstanding forward contracts. |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Assumptions Used to Estimate Fair Value | The fair value of the Company's stock options granted to employees for the years ended December 31, 2019, 2018 and 2017 was estimated using the following weighted average assumptions: Year ended December 31, 2019 2018 2017 Risk free interest 1.35%-2.51% 2.48%-2.82% 1.66%-2.00% Dividend yields 0% 0% 0% Volatility 33.35%-34.32% 33% 33% Expected term (in years) 4.22-4.26 4.3-4.39 4.52 |
Employee [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Stock Option Activity | A summary of employee option balances under the 2008 Plan as of December 31, 2019 and changes during the year then ended are as follows: Number of options Weighted-average exercise price Weighted- average remaining contractual term (in years) Aggregate intrinsic value (in thousands) Outstanding at January 1, 2019 2,883,410 $ 5.6 3.7 $ 9,087 Granted 1,112,500 $ 9.3 Exercised (676,930 ) $ 5.1 Forfeited (150,000 ) $ 7.3 Outstanding at December 31, 2019 3,168,980 $ 6.9 3.8 $ 4,795 Exercisable at December 31, 2019 1,094,772 $ 4.6 2.3 $ 3,590 |
Schedule of Stock Option Activity by Exercise Price | The outstanding and exercisable options granted to employees under the 2008 Plan as of December 31, 2019, have been separated into ranges of exercise price as follows: Options Weighted Options Weighted outstanding average Weighted exercisable average exercise Ranges of as of remaining average as of price of exercise December 31, contractual exercise December 31, exercisable price 2019 life (years) price 2019 options $3.32-4.95 1,067,184 2.2 $ 4.5 925,726 4.5 $5.05-7.41 831,796 3.8 $ 6.5 169,046 5.4 $7.73-9.51 1,270,000 5.2 $ 9.2 - 3,168,980 3.8 $ 6.9 1,094,772 4.6 |
TAXES ON INCOME (Tables)
TAXES ON INCOME (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Income Taxes | Significant components of the Company's deferred tax liabilities and assets are as follows: December 31, 2019 2018 1. Provided in respect of the following: Carryforward tax losses and credits *) $ 39,719 $ 41,561 Property, equipment and intangibles 1,466 904 Deferred revenues 1,237 823 Research and development costs 269 804 Other temporary differences 5,775 7,202 Gross deferred tax assets 48,466 51,294 Valuation allowance (26,693 ) (40,943 ) Net deferred tax assets 21,773 10,351 Gross deferred tax liabilities Property, equipment and intangibles (3,343 ) (3,208 ) Subsidy income - (3,574 ) Other temporary differences - (22 ) Gross deferred tax liabilities (3,343 ) (6,804 ) Net deferred tax assets $ 18,430 $ 3,547 *) The amounts are shown after reduction for unrecognized tax benefits of $2,855 and $1,989 as of December 31, 2019 and 2018, respectively. |
Schedule of Deferred Taxes Included in Consolidated Balance Sheets | December 31, 2019 2018 2. Deferred taxes are included in the consolidated balance sheets, as follows: Long term assets $ 18,455 $ 4,127 Long term liabilities $ (25 ) $ (580 ) |
Reconciliation of Statutory Tax Rate to Effective Tax Rate | Reconciling items between the statutory tax rate of the Company and the actual taxes on income (tax benefit): Year ended December 31, 2019 2018 2017 Income before taxes on income from continuing operations, as reported in the consolidated statements of income $ 22,955 $ 16,986 $ 6,554 Statutory tax rate 23.0 % 23.0 % 24.0 % Theoretical taxes on income 5,279 $ 3,907 $ 1,573 Currency differences (1,908 ) 3,089 (3,225 ) Tax adjustment in respect of different tax rates and "Benefitted Enterprise" status 241 345 2,849 Changes in valuation allowance (14,250 ) (3,939 ) (3,343 ) Loss from liquidation of subsidiaries *) - (8,930 ) - Expiration of carryforward tax losses 923 - 622 Exempt subsidy loss (income) (3,813 ) 394 (2,646 ) U.S. Tax Cuts and Jobs Acts effect - 56 2,138 Nondeductible expenses and other differences (55 ) 3,655 1,785 $ (13,583 ) $ (1,423 ) $ (247 ) *) In 2018 the Company’s Dutch subsidiary liquidated some of its subsidiaries and consequently recognized losses for tax purposes. These losses can be offset from taxable income in future periods under the tax regulations in the Netherlands. The Company does not expect these losses to be realized in the foreseeable future and respectively provided a full valuation allowance. |
Schedule of Taxes on Income | Taxes on income (tax benefit) included in the consolidated statements of income: Year ended December 31, 2019 2018 2017 Current $ 1,300 $ 2,249 $ (436 ) Deferred (14,883 ) (3,672 ) 189 $ (13,583 ) $ (1,423 ) $ (247 ) Domestic $ (14,472 ) $ 610 $ 768 Foreign 889 (2,033 ) (1,015 ) $ (13,583 ) $ (1,423 ) $ (247 ) |
Schedule of Income (Loss) Before Taxes on Income | Income before taxes on income (tax benefit) from operations: Year ended December 31, 2019 2018 2017 Domestic $ 12,851 $ 6,596 $ 1,289 Foreign 10,104 10,390 5,265 $ 22,955 $ 16,986 $ 6,554 |
Reconciliation of Beginning and Ending Balances of Unrecognized Tax Benefits | A reconciliation of the beginning and ending gross amount of unrecognized tax benefits is as follows: December 31, 2019 2018 Balance at beginning of year $ 2,234 $ 129 Additions for prior years' tax position (19 ) 1,809 Additions for current years' tax position 975 296 Balance at the end of year *) $ 3,190 $ 2,234 *) The amounts for the years ended December 31, 2019 and 2018 includes $2,855 and $1,989, respectively, of unrecognized tax benefits which are presented as a reduction from deferred tax assets, see Note 12d. |
SUPPLEMENTARY CONSOLIDATED BA_2
SUPPLEMENTARY CONSOLIDATED BALANCE SHEET INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SUPPLEMENTARY BALANCE SHEET INFORMATION [Abstract] | |
Schedule of Other Current Assets | Other current assets: December 31, 2019 2018 Governmental authorities $ 8,388 $ 6,264 Prepaid expenses 6,060 6,612 Deferred charges 2,868 9,446 Advance payments to suppliers 3,912 2,651 Other 1,779 1,049 $ 23,007 $ 26,022 |
Schedule of Other Current Liabilities | Other current liabilities: Payroll and related employee accruals $ 11,500 $ 13,229 Derivative instruments - 320 Governmental authorities 651 506 Other 110 533 $ 12,261 $ 14,588 |
Schedule of Long-Term Loans | Long-term loans: Interest rate for December 31, Linkage 2019 2018 Maturity 2019 2018 % Loans from banks: (a) U.S. dollars 4.77 4.77 2021 $ 8,000 $ 12,000 (b) Euro EURIBOR +2.75 EURIBOR +2.75 2020 96 556 8,096 12,556 Less - current maturities 4,096 4,458 $ 4,000 $ 8,098 (a) The Company entered into a loan agreement with an Israeli bank secured by a floating charge on the assets of the Company, and which is further secured by a fixed pledge (mortgage) on the Company's real estate in Israel. In addition, there are financial covenants associated with the loan. As of December 31, 2019 the Company is in compliance with these covenants. (b) A Dutch subsidiary of the Company entered into a mortgage and loan agreement with a German bank. The amount of the mortgage is collateralized by the subsidiary's facilities in Germany. |
Schedule of Long-Term Debt Maturities | Long-term debt maturities for loans after December 31, 2019, are as follows: Year ending December 31, 2021 4,000 $ 4,000 |
Schedule of Other Long-Term Liabilities | Other long-term liabilities: December 31, 2019 2018 Long-term deferred taxes $ 25 $ 580 Other 83 - $ 108 $ 580 |
SELECTED CONSOLIDATED STATEME_2
SELECTED CONSOLIDATED STATEMENTS OF INCOME (LOSS) DATA (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SELECTED STATEMENTS OF OPERATIONS DATA [Abstract] | |
Reconciliation of Allowance for Doubtful Accounts | Financial expenses, net: Year ended December 31, 2019 2018 2017 Income: Interest on cash equivalents, bank deposits and restricted cash $ 1,472 $ 981 $ 447 Other 18 29 355 1,490 1,010 802 Expenses: Interest with respect to bank credit, loans and other 395 614 844 Exchange rate differences, net 103 1,074 226 Bank charges including guarantees 3,552 3,560 3,857 Other 57 60 182 4,107 5,308 5,109 Total financial expenses, net $ 2,617 $ 4,298 $ 4,307 |
Schedule of Earnings (loss) per share | The following table sets forth the computation of basic and diluted net earnings per share: 1. Numerator: Year ended December 31, 2019 2018 2017 Numerator for basic and diluted earnings per share - Net income available to holders of Ordinary shares $ 36,538 $ 18,409 $ 6,801 2. Denominator (number of shares in thousands): Denominator for basic net loss per share - Weighted average number of shares 55,369 54,927 54,681 Add-employee stock options 662 826 171 Denominator for diluted net earnings per share - adjusted weighted average shares assuming exercise of options 56,031 55,753 54,852 |
CUSTOMERS, GEOGRAPHIC AND SEG_2
CUSTOMERS, GEOGRAPHIC AND SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Financial Data for Reportable Operating Segments | Financial data relating to reportable operating segments: Year ended December 31, 2019 Fixed Networks Mobility Solutions Terrestrial Infrastructure Projects Total Revenues $ 127,265 $ 104,665 $ 31,562 $ 263,492 Cost of revenues 80,038 53,263 34,314 167,615 Gross profit (loss) 47,227 51,402 (2,752 ) 95,877 Research and development, net 10,919 19,265 - 30,184 Selling and marketing 14,955 6,485 48 21,488 General and administrative 11,363 5,948 1,322 18,633 Operating income (loss) 9,990 19,704 (4,122 ) 25,572 Financial expenses, net 2,617 Income before taxes 22,955 Taxes on income (benefit) (13,583 ) Net income $ 36,538 Depreciation and amortization expenses $ 7,032 $ 3,871 $ 75 $ 10,978 Year ended December 31, 2018 Fixed Networks Mobility Solutions Terrestrial Infrastructure Projects Total Revenues $ 144,208 $ 97,180 $ 25,003 $ 266,391 Cost of revenues 93,745 47,995 30,614 172,354 Gross profit (loss) 50,463 49,185 (5,611 ) 94,037 Research and development, net 11,764 21,259 - 33,023 Selling and marketing 16,106 6,421 179 22,706 General and administrative 11,302 4,436 1,286 17,024 Operating income (loss) 11,291 17,069 (7,076 ) 21,284 Financial expenses, net 4,298 Income before taxes 16,986 Taxes on income (benefit) (1,423 ) Net income $ 18,409 Depreciation and amortization expenses $ 6,811 $ 6,128 $ 210 $ 13,149 Year ended December 31, 2017 Fixed Networks Mobility Solutions Terrestrial Infrastructure Projects Total Revenues $ 116,105 $ 88,397 $ 78,254 $ 282,756 Cost of revenues 81,920 46,493 71,848 200,261 Gross profit 34,185 41,904 6,406 82,495 Research and development, net 12,172 15,842 - 28,014 Selling and marketing 17,782 5,782 195 23,759 General and administrative 10,987 6,326 2,548 19,861 Operating income (loss) (6,756 ) 13,954 3,663 10,861 Financial expenses, net 4,307 Income before taxes 6,554 Taxes on income (benefit) (247 ) Net income $ 6,801 Depreciation and amortization expenses $ 5,046 $ 7,902 $ 192 $ 13,140 |
Schedule of Revenues by Geographic Area | Following is a summary of revenues by geographic areas. Revenues attributed to geographic areas, based on the location of the end customers and in accordance with ASC 280, are as follows: Year ended December 31, 2019 2018 2017 Latin America $ 81,622 $ 94,707 $ 132,134 Asia Pacific 44,181 39,381 34,586 North America 107,520 97,122 73,921 Europe, the Middle East and Africa 30,169 35,181 42,115 $ 263,492 $ 266,391 $ 282,756 |
Schedule of Long-Lived Assets by Geographic Area | The Company's long-lived assets (property and equipment, net) are located as follows: December 31, 2019 2018 Israel $ 62,531 $ 64,018 Latin America 3,828 4,564 United States 6,159 5,620 Europe 9,025 9,117 Other 1,041 1,084 $ 82,584 $ 84,403 |
Schedule of Revenues from Major Customers | The table below represents the revenues from major customers: Year ended December 31, 2019 2018 2017 Customer A 16 % 10 % 28 % Customer B 12 % 15 % * ) Customer C 11 % * ) * ) Customer D * ) 13 % * ) *) Less than 10% |
RELATED PARTY BALANCES AND TR_2
RELATED PARTY BALANCES AND TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of transactions with related parties | Transactions with the related parties: Year ended December 31, 2019 2018 2017 Cost of revenues of products $ 2,048 $ 764 $ 3,770 Research and development - $ 346 $ 61 Purchase of property and equipment and inventory - $ 101 $ 100 |
Schedule of balances with related parties | Balances with the related parties: December 31, 2019 2018 Advance payments $ 344 $ 144 Trade payables $ 109 $ 125 Accrued expenses $ 1,761 $ 1,797 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure Of Accounting Policies [Line Items] | |||
Advertising expenses | $ 263 | $ 247 | $ 204 |
Research and development expenses | 2,024 | 1,426 | $ 1,419 |
Amortization of sales commission | 1,643 | ||
Capitalized balances related to sales commission | $ 473 | $ 1,286 | |
The total weighted average number of shares related to the outstanding options excluded from the calculations of diluted earnings per share | 1,467,849 | 573,552 | 1,627,552 |
Warranty expenses | $ 119 | $ 591 | $ 323 |
Increase decrease in accumulated deficit | 55 | ||
Bad debt expense | (26) | (376) | 2,231 |
Contract assets | 23,698 | 47,760 | |
Provision for doubtful accounts | $ 2,327 | 3,202 | |
Right-of-use leased assets and corresponding liabilities | 5,581 | ||
Network equipment [Member] | Minimum [Member] | |||
Disclosure Of Accounting Policies [Line Items] | |||
Property and equipment, estimated useful life | 2 years | ||
Network equipment [Member] | Maximum [Member] | |||
Disclosure Of Accounting Policies [Line Items] | |||
Property and equipment, estimated useful life | 5 years | ||
Shipping Expenses [Member ] | |||
Disclosure Of Accounting Policies [Line Items] | |||
Shipping expenses | $ 1,309 | $ 1,303 | $ 1,225 |
Short-term Debt [Member] | |||
Disclosure Of Accounting Policies [Line Items] | |||
Restricted cash weighted average interest rate | 1.74% | 2.36% | |
Long-term Debt [Member] | |||
Disclosure Of Accounting Policies [Line Items] | |||
Restricted cash weighted average interest rate | 6.82% | 6.54% |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Property and Equipment Useful Lives) (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Buildings [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful life | 50 years |
Computers, software and electronic equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful life | 2 years |
Computers, software and electronic equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful life | 10 years |
Office furniture and equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful life | 3 years |
Office furniture and equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful life | 15 years |
Vehicles [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful life | 3 years |
Vehicles [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful life | 7 years |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Intangible Assets Estimated Useful Lives) (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Technology [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Amortization period | 7 years 10 months 25 days |
Customer relationships [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Amortization period | 6 years 9 months 18 days |
Marketing rights and patents [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Amortization period | 12 years 1 month 6 days |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES (Employee Related Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | |||
Severance expenses | $ 3,162 | $ 3,138 | $ 2,819 |
Contributions to employee benefits plan | $ 526 | $ 479 | $ 411 |
SIGNIFICANT ACCOUNTING POLICI_8
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Accumulated Other Comprehensive Income, Net) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | $ (5,380) | $ (3,046) |
Other comprehensive income (loss) before reclassifications | 667 | (3,393) |
Amounts reclassified from accumulated other comprehensive income (loss) | (335) | 1,059 |
Net current-period other comprehensive income (loss) | 332 | (2,334) |
Ending balance | (5,048) | (5,380) |
Foreign currency translation adjustments [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | (5,062) | (3,217) |
Other comprehensive income (loss) before reclassifications | 14 | (1,845) |
Amounts reclassified from accumulated other comprehensive income (loss) | ||
Net current-period other comprehensive income (loss) | 14 | (1,845) |
Ending balance | (5,048) | (5,062) |
Unrealized gains (losses) on cash flow hedges [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | (318) | 171 |
Other comprehensive income (loss) before reclassifications | 653 | (1,548) |
Amounts reclassified from accumulated other comprehensive income (loss) | (335) | 1,059 |
Net current-period other comprehensive income (loss) | 318 | (489) |
Ending balance | $ (318) |
SIGNIFICANT ACCOUNTING POLICI_9
SIGNIFICANT ACCOUNTING POLICIES (Cumulative Balance Sheet Adjustments - Adoption of ASC No. 606-10) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Other current assets | $ 23,007 | $ 26,022 | $ 19,415 |
Accrued expenses | 54,676 | 67,533 | 75,270 |
Accumulated deficit | $ (671,355) | $ (683,029) | (702,959) |
Impact of Adoption [Member] | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Other current assets | 2,004 | ||
Accrued expenses | 483 | ||
Accumulated deficit | 1,521 | ||
Amounts under Topic 606-10 [Member] | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Other current assets | 21,419 | ||
Accrued expenses | 75,753 | ||
Accumulated deficit | $ (701,438) |
INVENTORIES (Narrative) (Detail
INVENTORIES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |||
Inventory write-offs | $ 2,624 | $ 6,354 | $ 3,270 |
INVENTORIES (Schedule of Invent
INVENTORIES (Schedule of Inventory) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials, parts and supplies | $ 6,638 | $ 5,885 |
Work in progress and assembled raw materials | 15,409 | 10,548 |
Finished products | 5,156 | 4,676 |
Inventory, Net | $ 27,203 | $ 21,109 |
PROPERTY AND EQUIPMENT, NET (Na
PROPERTY AND EQUIPMENT, NET (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |||
Reduction to fully depreciated equipment and leasehold improvements that are no longer in use | $ 18,718 | $ 732 | $ 46,051 |
Depreciation expenses | 10,067 | 9,874 | 7,465 |
Capital losses on disposal of abandoned assets primarily attributed to office and furniture group | 461 | 275 | 245 |
Lease gross income | $ 5,770 | $ 6,150 | $ 5,900 |
PROPERTY AND EQUIPMENT, NET (Sc
PROPERTY AND EQUIPMENT, NET (Schedule of Property and Equipment) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 178,984 | $ 192,114 |
Accumulated depreciation | 96,400 | 107,711 |
Depreciation cost | 82,584 | 84,403 |
Buildings and Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 91,823 | 92,025 |
Computers, software and electronic equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 51,745 | 50,390 |
Network Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 27,837 | 40,502 |
Office furniture and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,665 | 5,317 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 240 | 324 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 3,674 | $ 3,556 |
DEFERRED REVENUE (Details)
DEFERRED REVENUE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Deferred Revenue Arrangement [Line Items] | |||
Deferred revenue | $ 7,972 | $ 8,658 | |
Amount recognized as revenue | 263,492 | $ 266,391 | $ 282,756 |
Recognized over time for service [Member] | |||
Deferred Revenue Arrangement [Line Items] | |||
Amount recognized as revenue | $ 6,785 | ||
Minimum [Member] | |||
Deferred Revenue Arrangement [Line Items] | |||
Expected to be recognized over periods performance obligations | 13 years | ||
Maximum [Member] | |||
Deferred Revenue Arrangement [Line Items] | |||
Expected to be recognized over periods performance obligations | 15 years |
INTANGIBLE ASSETS, NET (Narrati
INTANGIBLE ASSETS, NET (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expenses | $ 911 | $ 3,275 | $ 5,675 |
INTANGIBLE ASSETS, NET (Schedul
INTANGIBLE ASSETS, NET (Schedule of Intangible Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Original amounts | $ 50,391 | $ 50,391 |
Accumulated amortization | 48,868 | 47,957 |
Amortized cost | 1,523 | 2,434 |
Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Original amounts | 42,504 | 42,504 |
Accumulated amortization | 42,002 | 41,281 |
Customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Original amounts | 4,466 | 4,466 |
Accumulated amortization | 4,466 | 4,466 |
Marketing rights and patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Original amounts | 3,421 | 3,421 |
Accumulated amortization | $ 2,400 | $ 2,210 |
INTANGIBLE ASSETS, NET (Sched_2
INTANGIBLE ASSETS, NET (Schedule of Estimated Amortization Expenses) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2020 | $ 441 | |
2021 | 431 | |
2022 | 321 | |
2023 | 330 | |
Amortized cost | $ 1,523 | $ 2,434 |
GOODWILL (Details)
GOODWILL (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | |
GOODWILL [Abstract] | |||
Goodwill | [1] | $ 105,647 | $ 105,647 |
Accumulated impairment losses | (62,179) | (62,179) | |
Goodwill net | $ 43,468 | $ 43,468 | |
[1] | The carrying amount of the goodwill is associated with the Mobility segment. |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Oct. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Oct. 31, 2017 | |
Guarantor Obligations [Line Items] | ||||||
Outstanding inventory purchase commitments | $ 24,939 | $ 18,418 | ||||
Inventory purchase commitments, sole or limited suppliers | 12,718 | 6,939 | ||||
Amount of claim, including interest, penalties and legal fees | 8,742 | |||||
Principal Amount of Claim | 1,002 | $ 6,300 | ||||
Amount of reduction of costs in cost of sales | 3,260 | |||||
Aggregate amount of guarantees | 106,037 | |||||
Restricted cash collateral | 27,191 | |||||
Settlement amount of arbitration | $ 400 | |||||
Loss for firm non-cancelable and unconditional purchase commitments | 1,016 | 1,448 | $ 0 | |||
Subsidiary [Member] | ||||||
Guarantor Obligations [Line Items] | ||||||
Arbitration award amount | $ 13,500 | |||||
Period of claim collection | 5 years | |||||
Period of occurrence | 2015-2019 | |||||
Peru [Member] | ||||||
Guarantor Obligations [Line Items] | ||||||
Aggregate amount of guarantees | 102,687 | |||||
Aggregate amount | 154,000 | |||||
Spacenet Inc. [Member] | ||||||
Guarantor Obligations [Line Items] | ||||||
Service expenses | $ 9,845 | 12,771 | $ 11,184 | |||
OCS [Member] | ||||||
Guarantor Obligations [Line Items] | ||||||
Percentage of amount funded for research and development projects | 100.00% | |||||
Accrued royalties | $ 1,428 | |||||
Royalties paid | $ 68 | $ 20 | ||||
OCS [Member] | Minimum [Member] | ||||||
Guarantor Obligations [Line Items] | ||||||
Royalty fee (as a percent) | 3.00% | |||||
OCS [Member] | Maximum [Member] | ||||||
Guarantor Obligations [Line Items] | ||||||
Royalty fee (as a percent) | 5.00% | |||||
BIRD [Member] | ||||||
Guarantor Obligations [Line Items] | ||||||
Royalty fee (as a percent) | 5.00% | |||||
Percentage of amount funded for research and development projects | 150.00% | |||||
Accrued royalties | $ 303 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Schedule of Future Minimum Payments) (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 | $ 8,402 |
2021 | 2,877 |
2022 | 1,215 |
Gross space segments services | $ 12,494 |
LEASES (Narrative) (Details)
LEASES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Leases [Abstract] | ||
Weighted average remaining lease term | 3 years | |
Weighted average discount rate | 4.50% | |
Future lease payments | $ 3,874 | |
Lease term | 5 years | |
Total lease costs | $ 2,468 | $ 2,578 |
LEASES (Schedule of Components
LEASES (Schedule of Components of Operating Lease Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
Leases [Abstract] | |||
Operating lease cost | [1] | $ 2,196 | |
Short- term lease cost | 272 | ||
Total lease costs | $ 2,468 | $ 2,578 | |
[1] | Operating lease cost were paid in cash during the year ended December 31,2019 |
LEASES (Schedule of Supplementa
LEASES (Schedule of Supplemental Information Related to Operating Leases) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
New operating lease assets obtained in exchange for operating lease liabilities | $ 1,469 |
LEASES (Schedule of Future Leas
LEASES (Schedule of Future Lease Payments Under Operating Leases) (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Operating leases | |
Year one | $ 2,019 |
Year two | 1,775 |
Year three | 1,269 |
Year four | 517 |
Thereafter | 16 |
Total future lease payements | 5,596 |
Less imputed interest | (361) |
Total lease liability balance | $ 5,235 |
DERIVATIVE INSTRUMENTS (Schedul
DERIVATIVE INSTRUMENTS (Schedule of Fair Value of Derivative Instruments) (Details) - Foreign Exchange [Member] - Forward Contracts [Member] - Other current assets (liabilities) [Member] - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative [Line Items] | |||
Fair value of derivative instruments, assets | [1] | ||
Fair value of derivative instruments, liabilities | [1] | $ (318) | |
[1] | To protect against changes in value of forecasted foreign currency cash flows resulting from salaries and related payments that are denominated in NIS, the Company has entered into foreign currency forward contracts. These contracts were designated as cash flow hedges, as defined by ASC 815, as amended, and are considered highly effective as hedges of these expenses. As of December 31, 2019 there were no outstanding forward contracts. |
DERIVATIVE INSTRUMENTS (Sched_2
DERIVATIVE INSTRUMENTS (Schedule of Net Income (Loss) Related to Effective Portion of Hedging Instruments) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Gain (loss) recognized in income related to the effective portion of its hedging instruments | $ (335) | $ (1,056) | $ 1,114 |
Derivative, Notional Amount | $ 27,153 |
SHAREHOLDERS' EQUITY (Descripti
SHAREHOLDERS' EQUITY (Description of Plans) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Apr. 11, 2019 | Dec. 31, 2010 | Oct. 31, 2008 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Cash dividend declare per share | $ 0.45 | |||
Dividend payable | $ 24,864 | |||
Second Anniversary [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vested percentage | 50.00% | |||
Third and Fourth Anniversary [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vested percentage | 25.00% | |||
2008 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total number of shares authorized | 6,015,500 | |||
Shares available for grant | 77,888 | 7,015,500 | 1,000,000 | |
Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period for plan | 2 years | |||
Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period for plan | 4 years | |||
Option One [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expiration period | 6 years | |||
Option Two [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expiration period | 7 years | |||
Option Three [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expiration period | 10 years |
SHAREHOLDERS' EQUITY (Schedule
SHAREHOLDERS' EQUITY (Schedule of Assumptions Used to Estimate Fair Value) (Details) - Employee [Member] | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dividend yields | 0.00% | 0.00% | 0.00% |
Volatility | 33.00% | 33.00% | |
Expected term (in years) | 4 years 6 months 7 days | ||
Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk free interest | 1.35% | 2.48% | 1.66% |
Volatility | 33.35% | ||
Expected term (in years) | 4 years 2 months 19 days | 4 years 3 months 19 days | |
Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk free interest | 2.51% | 2.82% | 2.00% |
Volatility | 34.32% | ||
Expected term (in years) | 4 years 3 months 4 days | 4 years 4 months 20 days |
SHAREHOLDERS' EQUITY (Schedul_2
SHAREHOLDERS' EQUITY (Schedule of Stock Option Activity) (Details) - Employee [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Number of options | ||
Outstanding at January 1, 2019 | 2,883,410 | |
Granted | 1,112,500 | |
Exercised | (676,930) | |
Forfeited | (150,000) | |
Outstanding at December 31, 2019 | 3,168,980 | 2,883,410 |
Exercisable at December 31, 2019 | 1,094,772 | |
Weighted-average exercise price | ||
Outstanding at January 1, 2019 | $ 5.6 | |
Granted | 9.3 | |
Exercised | 5.1 | |
Forfeited | 7.3 | |
Outstanding at December 31, 2019 | 6.9 | $ 5.6 |
Exercisable at December 31, 2019 | $ 4.6 | |
Weighted-average remaining contractual term | ||
Outstanding at December 31 | 3 years 9 months 18 days | 3 years 8 months 12 days |
Exercisable at December 31, 2019 | 2 years 3 months 19 days | |
Aggregate intrinsic value | ||
Outstanding at January 1, 2019 | $ 9,087 | |
Outstanding at December 31, 2019 | 4,795 | $ 9,087 |
Exercisable at December 31, 2019 | $ 3,590 |
SHAREHOLDERS' EQUITY (Options G
SHAREHOLDERS' EQUITY (Options Granted to Employees) (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Intrinsic value of options exercised during the period | $ 2,350 |
Amount of incremental effect in connection with modification | 970 |
Amount of incremental effect in connection with modification during period | $ 803 |
Employee [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average fair value of stock options granted | $ / shares | $ 2.6 |
SHAREHOLDERS' EQUITY (Schedul_3
SHAREHOLDERS' EQUITY (Schedule of Stock Option Activity by Exercise Price) (Details) - Employee [Member] | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Options outstanding as of December 31, 2019 | shares | 3,168,980 |
Options outstanding, Weighted average remaining contractual life (years) | 3 years 9 months 18 days |
Options outstanding, Weighted average exercise price | $ 6.9 |
Options exercisable as of December 31, 2019 | shares | 1,094,772 |
Options exercisable, Weighted average exercise price of exercisable options | $ 4.6 |
$3.32-4.95 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, lower limit | 3.32 |
Exercise Price, upper limit | $ 4.95 |
Options outstanding as of December 31, 2019 | shares | 1,067,184 |
Options outstanding, Weighted average remaining contractual life (years) | 2 years 2 months 12 days |
Options outstanding, Weighted average exercise price | $ 4.5 |
Options exercisable as of December 31, 2019 | shares | 925,726 |
Options exercisable, Weighted average exercise price of exercisable options | $ 4.5 |
$5.05-7.41 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, lower limit | 5.05 |
Exercise Price, upper limit | $ 7.41 |
Options outstanding as of December 31, 2019 | shares | 831,796 |
Options outstanding, Weighted average remaining contractual life (years) | 3 years 9 months 18 days |
Options outstanding, Weighted average exercise price | $ 6.5 |
Options exercisable as of December 31, 2019 | shares | 169,046 |
Options exercisable, Weighted average exercise price of exercisable options | $ 5.4 |
$7.73-9.51 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, lower limit | 7.73 |
Exercise Price, upper limit | $ 9.51 |
Options outstanding as of December 31, 2019 | shares | 1,270,000 |
Options outstanding, Weighted average remaining contractual life (years) | 5 years 2 months 12 days |
Options outstanding, Weighted average exercise price | $ 9.2 |
Options exercisable as of December 31, 2019 | shares |
SHAREHOLDERS' EQUITY (Additiona
SHAREHOLDERS' EQUITY (Additional Stock-Based Compensation Data) (Details) - Employee [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized share-based compensation expense, employees | $ 3,677 |
Compensation costs weighted average period to be recognized | 3 years |
TAXES ON INCOME (Narrative) (De
TAXES ON INCOME (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2014 | |
Tax Credit Carryforward [Line Items] | ||||
Statutory tax rate | 23.00% | 23.00% | 24.00% | |
Corporate statutory tax rate on 2018 | 23.00% | |||
Duration of tax benefits limitation, option one minimum | 2 years | |||
Uniform tax rate | 16.00% | |||
Withholding tax | 20.00% | |||
Tax rate for preferred enterprises | 16.00% | |||
Undistributed earnings | $ 3,229 | |||
Unrecognized deferred tax liability | 437 | |||
Unrecognized tax benefits, accrued penalties and interest | 295 | $ 193 | ||
Penalties and interest expense | $ 102 | $ 86 | ||
Minimum [Member] | ||||
Tax Credit Carryforward [Line Items] | ||||
Minimum percentage of income derived from export to receive tax benefits | 10.00% | |||
Distribution of dividends from the above mentioned tax exempt income | 10.00% | |||
Maximum [Member] | ||||
Tax Credit Carryforward [Line Items] | ||||
Minimum percentage of income derived from export to receive tax benefits | 25.00% | |||
Distribution of dividends from the above mentioned tax exempt income | 25.00% | |||
Development Zone A [Member] | ||||
Tax Credit Carryforward [Line Items] | ||||
Uniform tax rate | 9.00% | |||
TCJA [Member] | Minimum [Member] | ||||
Tax Credit Carryforward [Line Items] | ||||
Statutory tax rate | 21.00% | |||
TCJA [Member] | Maximum [Member] | ||||
Tax Credit Carryforward [Line Items] | ||||
Statutory tax rate | 35.00% | |||
Special technological preferred enterprise [Member] | ||||
Tax Credit Carryforward [Line Items] | ||||
Tax rate derving from intellectual property | 6.00% | |||
Technological preferred enterprise[Member] | ||||
Tax Credit Carryforward [Line Items] | ||||
Statutory tax rate | 4.00% | |||
Tax rate derving from intellectual property | 12.00% | |||
Technological preferred enterprise[Member] | Development Zone A [Member] | ||||
Tax Credit Carryforward [Line Items] | ||||
Tax rate derving from intellectual property | 7.50% |
TAXES ON INCOME (Carryforward T
TAXES ON INCOME (Carryforward Tax Losses and Credits and Deferred Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Loss Carryforwards [Line Items] | |||
Changes in valuation allowance | $ 14,250 | $ 3,939 | $ 3,343 |
R & D Credits for FederalTax [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 3,200 | ||
State tax [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 2,600 | ||
Europe [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | $ 44,870 | ||
Operating loss carryforwards utilization period | 9 years | ||
Latin America [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | $ 33,620 | ||
Latin America [Member] | Carryforward Utilization Period - 4 Years [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 24,611 | ||
Latin America [Member] | Carryforward Utilization Period - Indefinitely [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 9,009 | ||
Israeli [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 89,736 | ||
FederalTax [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | $ 10,614 |
TAXES ON INCOME (Schedule of De
TAXES ON INCOME (Schedule of Deferred Income Taxes) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Carryforward tax losses and credits | [1] | $ 39,719 | $ 41,561 |
Property, equipment and intangibles | 1,466 | 904 | |
Deferred revenues | 1,237 | 823 | |
Research and development costs | 269 | 804 | |
Other temporary differences | 5,775 | 7,202 | |
Gross deferred tax assets | 48,466 | 51,294 | |
Valuation allowance | (26,693) | (40,943) | |
Net deferred tax assets | 21,773 | 10,351 | |
Property, equipment and intangibles | (3,343) | (3,208) | |
Subsidy income | (3,574) | ||
Other temporary differences | (22) | ||
Gross deferred tax | (3,343) | (6,804) | |
Net deferred tax assets (liabilities) | $ 18,430 | $ 3,547 | |
[1] | The amounts are shown after reduction for unrecognized tax benefits of $2,855 and $1,989 as of December 31, 2019 and 2018, respectively. |
TAXES ON INCOME (Schedule of _2
TAXES ON INCOME (Schedule of Deferred Taxes Included in Consolidated Balance Sheets) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred taxes are included in the consolidated balance sheets, as follows: | ||
Long term assets | $ 18,455 | $ 4,127 |
Long term liabilities | $ (25) | $ (580) |
TAXES ON INCOME (Reconciliation
TAXES ON INCOME (Reconciliation of Statutory Tax Rate to Effective Tax Rate) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Income Tax Disclosure [Abstract] | ||||
Income before taxes on income from continuing operations, as reported in the consolidated statements of income | $ 22,955 | $ 16,986 | $ 6,554 | |
Statutory tax rate | 23.00% | 23.00% | 24.00% | |
Theoretical taxes on income | $ 5,279 | $ 3,907 | $ 1,573 | |
Currency differences | (1,908) | 3,089 | (3,225) | |
Tax adjustment in respect of different tax rates and "Benefitted Enterprise" status | 241 | 345 | 2,849 | |
Changes in valuation allowance | (14,250) | (3,939) | (3,343) | |
Loss from liquidation of subsidiaries | [1] | (8,930) | ||
Expiration of carryforward tax losses | 923 | 622 | ||
Exempt subsidy loss (income) | (3,813) | 394 | (2,646) | |
U.S. Tax Cuts and Jobs Acts effect | 56 | 2,138 | ||
Nondeductible expenses and other differences | (55) | 3,655 | 1,785 | |
Tax benefit | $ (13,583) | $ (1,423) | $ (247) | |
[1] | In 2018 the Company's Dutch subsidiary liquidated some of its subsidiaries and consequently recognized losses for tax purposes. These losses can be offset from taxable income in future periods under the tax regulations in the Netherlands. The Company does not expect these losses to be realized in the foreseeable future and respectively provided a full valuation allowance. |
TAXES ON INCOME (Schedule of Ta
TAXES ON INCOME (Schedule of Taxes on Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Current | $ 1,300 | $ 2,249 | $ (436) |
Deferred | (14,883) | (3,672) | 189 |
Domestic | (14,472) | 610 | 768 |
Foreign | 889 | (2,033) | (1,015) |
Tax benefit | $ (13,583) | $ (1,423) | $ (247) |
TAXES ON INCOME (Schedule of In
TAXES ON INCOME (Schedule of Income (Loss) Before Taxes on Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 12,851 | $ 6,596 | $ 1,289 |
Foreign | 10,104 | 10,390 | 5,265 |
Net income before taxes on income | $ 22,955 | $ 16,986 | $ 6,554 |
TAXES ON INCOME (Reconciliati_2
TAXES ON INCOME (Reconciliation of Beginning and Ending Balances of Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | |||
Income Tax Disclosure [Abstract] | ||||
Balance at beginning of year | $ 2,234 | [1] | $ 129 | |
Reductions for prior years' tax position | (19) | |||
Additions for prior years' tax position | 1,809 | |||
Additions for current years' tax position | 975 | 296 | ||
Balance at the end of year | [1] | $ 3,190 | $ 2,234 | |
[1] | The amounts for the years ended December 31, 2019 and 2018 includes $2,855 and $1,989, respectively, of unrecognized tax benefits which are presented as a reduction from deferred tax assets, see Note 12d. |
SUPPLEMENTARY CONSOLIDATED BA_3
SUPPLEMENTARY CONSOLIDATED BALANCE SHEET INFORMATION (Schedule of Other Current Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
SUPPLEMENTARY BALANCE SHEET INFORMATION [Abstract] | |||
Governmental authorities | $ 8,388 | $ 6,264 | |
Prepaid expenses | 6,060 | 6,612 | |
Deferred charges | 2,868 | 9,446 | |
Advance payments to suppliers | 3,912 | 2,651 | |
Other | 1,779 | 1,049 | |
Other current assets | $ 23,007 | $ 26,022 | $ 19,415 |
SUPPLEMENTARY CONSOLIDATED BA_4
SUPPLEMENTARY CONSOLIDATED BALANCE SHEET INFORMATION (Schedule of Other Current Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
SUPPLEMENTARY BALANCE SHEET INFORMATION [Abstract] | ||
Payroll and related employee accruals | $ 11,500 | $ 13,229 |
Derivative instruments | 320 | |
Governmental authorities | 651 | 506 |
Other | 110 | 533 |
Other current liabilities | $ 12,261 | $ 14,588 |
SUPPLEMENTARY CONSOLIDATED BA_5
SUPPLEMENTARY CONSOLIDATED BALANCE SHEET INFORMATION (Schedule of Long-Term Loans) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Long-term loans: | ||
Long-term loans | $ 8,096 | $ 12,556 |
Less - current maturities | 4,096 | 4,458 |
Long-term loans, excluding current maturities | $ 4,000 | $ 8,098 |
Loan from bank (a) [Member] | ||
Long-term loans: | ||
Interest rate | 4.77% | 4.77% |
Maturity, maximum | Dec. 31, 2021 | Dec. 31, 2021 |
Long-term loans | $ 8,000 | $ 12,000 |
Loan from bank (b) [Member] | ||
Long-term loans: | ||
Variable interest reference rate | EURIBOR +2.75% | EURIBOR +2.75% |
Interest rate, spread on variable rate | 2.75% | 2.75% |
Maturity, maximum | Dec. 31, 2020 | Dec. 31, 2020 |
Long-term loans | $ 96 | $ 556 |
SUPPLEMENTARY CONSOLIDATED BA_6
SUPPLEMENTARY CONSOLIDATED BALANCE SHEET INFORMATION (Schedule of Long Term Debt Maturities) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
SUPPLEMENTARY BALANCE SHEET INFORMATION [Abstract] | |||
2021 | $ 4,000 | ||
Long-term loans | 4,000 | $ 8,098 | |
Interest expenses | $ 395 | $ 614 | $ 822 |
SUPPLEMENTARY CONSOLIDATED BA_7
SUPPLEMENTARY CONSOLIDATED BALANCE SHEET INFORMATION (Schedule of Other Long-Term Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
SUPPLEMENTARY BALANCE SHEET INFORMATION [Abstract] | ||
Long-term deferred taxes | $ 25 | $ 580 |
Other | 83 | |
Other long-term liabilities | $ 108 | $ 580 |
SELECTED CONSOLIDATED STATEME_3
SELECTED CONSOLIDATED STATEMENTS OF INCOME (LOSS) DATA (Schedule of Financial Expenses, Net) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income: | |||
Interest on cash equivalents, bank deposits and restricted cash | $ 1,472 | $ 981 | $ 447 |
Other | 18 | 29 | 355 |
Total financial income | 1,490 | 1,010 | 802 |
Expenses: | |||
Interest with respect to bank credit, loans and other | 395 | 614 | 844 |
Exchange rate differences, net | 103 | 1,074 | 226 |
Bank charges including guarantees | 3,552 | 3,560 | 3,857 |
Other | 57 | 60 | 182 |
Total financial expenses | 4,107 | 5,308 | 5,109 |
Total financial expenses, net | $ 2,617 | $ 4,298 | $ 4,307 |
SELECTED CONSOLIDATED STATEME_4
SELECTED CONSOLIDATED STATEMENTS OF INCOME (LOSS) DATA (Schedule of Earnings (Loss) Per Share) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
SELECTED STATEMENTS OF OPERATIONS DATA [Abstract] | |||
Net income available to holders of Ordinary shares | $ 36,538 | $ 18,409 | $ 6,801 |
Denominator (number of shares in thousands): | |||
Weighted average number of shares | 55,368,703 | 54,927,272 | 54,680,822 |
Add-employee stock options | 662,000 | 826,000 | 171,000 |
Adjusted weighted average shares assuming exercise of options | 56,030,976 | 55,752,642 | 54,851,967 |
CUSTOMERS, GEOGRAPHIC AND SEG_3
CUSTOMERS, GEOGRAPHIC AND SEGMENT INFORMATION (Schedule of Financial Data for Reportable Operating Segments) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||
Revenues | $ 263,492 | $ 266,391 | $ 282,756 |
Cost of Revenues | 167,615 | 172,354 | 200,261 |
Gross profit (loss) | 95,877 | 94,037 | 82,495 |
Research and development, net | 30,184 | 33,023 | 28,014 |
Selling and marketing | 21,488 | 22,706 | 23,759 |
General and administrative | 18,633 | 17,024 | 19,861 |
Operating income (loss) | 25,572 | 21,284 | 10,861 |
Financial expenses, net | 2,617 | 4,298 | 4,307 |
Income before taxes | 22,955 | 16,986 | 6,554 |
Taxes on income (benefit) | (13,583) | (1,423) | (247) |
Net income | 36,538 | 18,409 | 6,801 |
Depreciation and amortization expenses | 10,978 | 13,149 | 13,140 |
Fixed Networks [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 127,265 | 144,208 | 116,105 |
Cost of Revenues | 80,038 | 93,745 | 81,920 |
Gross profit (loss) | 47,227 | 50,463 | 34,185 |
Research and development, net | 10,919 | 11,764 | 12,172 |
Selling and marketing | 14,955 | 16,106 | 17,782 |
General and administrative | 11,363 | 11,302 | 10,987 |
Operating income (loss) | 9,990 | 11,291 | (6,756) |
Depreciation and amortization expenses | 7,032 | 6,811 | 5,046 |
Mobility Solutions [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 104,665 | 97,180 | 88,397 |
Cost of Revenues | 53,263 | 47,995 | 46,493 |
Gross profit (loss) | 51,402 | 49,185 | 41,904 |
Research and development, net | 19,265 | 21,259 | 15,842 |
Selling and marketing | 6,485 | 6,421 | 5,782 |
General and administrative | 5,948 | 4,436 | 6,326 |
Operating income (loss) | 19,704 | 17,069 | 13,954 |
Depreciation and amortization expenses | 3,871 | 6,128 | 7,902 |
Terrestrial Infrastructure Projects [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 31,562 | 25,003 | 78,254 |
Cost of Revenues | 34,314 | 30,614 | 71,848 |
Gross profit (loss) | (2,752) | (5,611) | 6,406 |
Research and development, net | |||
Selling and marketing | 48 | 179 | 195 |
General and administrative | 1,322 | 1,286 | 2,548 |
Operating income (loss) | (4,122) | (7,076) | 3,663 |
Depreciation and amortization expenses | $ 75 | $ 210 | $ 192 |
CUSTOMERS, GEOGRAPHIC AND SEG_4
CUSTOMERS, GEOGRAPHIC AND SEGMENT INFORMATION (Schedule of Revenue by geographic areas) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 263,492 | $ 266,391 | $ 282,756 |
Latin America [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 81,622 | 94,707 | 132,134 |
Asia Pacific [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 44,181 | 39,381 | 34,586 |
North America [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 107,520 | 97,122 | 73,921 |
Europe the Middle East and Africa [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 30,169 | $ 35,181 | $ 42,115 |
CUSTOMERS, GEOGRAPHIC AND SEG_5
CUSTOMERS, GEOGRAPHIC AND SEGMENT INFORMATION (Schedule of long-lived assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 82,584 | $ 84,403 |
Israel [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 62,531 | 64,018 |
Latin America [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 3,828 | 4,564 |
United States [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 6,159 | 5,620 |
Europe [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 9,025 | 9,117 |
Other [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 1,041 | $ 1,084 |
CUSTOMERS, GEOGRAPHIC AND SEG_6
CUSTOMERS, GEOGRAPHIC AND SEGMENT INFORMATION (Schedule of Revenues from Major Customers) (Details) - Revenues [Member] | 12 Months Ended | |||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||||
Customer A [Member] | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Concentration risk percentage | 16.00% | 10.00% | 28.00% | |||
Customer B [Member] | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Concentration risk percentage | 12.00% | 15.00% | [1] | |||
Customer C [Member] | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Concentration risk percentage | 11.00% | [1] | [1] | |||
Customer D [Member] | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Concentration risk percentage | [1] | 13.00% | [1] | |||
[1] | Less than 10% |
RELATED PARTY BALANCES AND TR_3
RELATED PARTY BALANCES AND TRANSACTIONS (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2019 | Aug. 31, 2017 | |
Related Party Transaction [Line Items] | |||
Ownership Percentage | 33.40% | ||
Aggregate amount of purchase of infrastructure, construction and services | $ 1,750 | ||
C. Mer Industries Ltd [Member] | |||
Related Party Transaction [Line Items] | |||
Ownership Percentage | 36.60% | ||
FIMI holds Orbit share capital [Member] | |||
Related Party Transaction [Line Items] | |||
Ownership Percentage | 41.80% |
RELATED PARTY BALANCES AND TR_4
RELATED PARTY BALANCES AND TRANSACTIONS (Schedule of Transactions with Related Parties) (Details) - C. Mer Industries Ltd [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | |||
Cost of revenues of products | $ 2,048 | $ 764 | $ 3,770 |
Research and development | 346 | 61 | |
Purchase of property and equipment and inventory | $ 101 | $ 100 |
RELATED PARTY BALANCES AND TR_5
RELATED PARTY BALANCES AND TRANSACTIONS (Schedule of Balances with Related Parties) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Related Party Transaction [Line Items] | |||
Accrued expenses | $ 54,676 | $ 67,533 | $ 75,270 |
C. Mer Industries Ltd [Member] | |||
Related Party Transaction [Line Items] | |||
Advance payments | 344 | 144 | |
Trade payables | 109 | 125 | |
Accrued expenses | $ 1,761 | $ 1,797 |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Jan. 29, 2020$ / sharesshares | Dec. 31, 2019USD ($) | Jan. 29, 2020₪ / shares | Dec. 31, 2019₪ / shares | Dec. 31, 2018₪ / shares | |
Subsequent Event [Line Items] | |||||
Nominal value of shares | ₪ / shares | ₪ 0.2 | ₪ 0.2 | |||
Merger related expenses | $ | $ 118 | ||||
Agreement and Plan of Merger [Member] | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Nominal value of shares | ₪ / shares | ₪ 0.20 | ||||
Comtech [Member] | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Nominal value of shares | $ 0.10 | ||||
Share price | $ 7.18 | ||||
Shares issued per share | shares | 0.08425 | ||||
Total consideration per share | $ 10.25 |