<SEC-DOCUMENT>0001178913-22-003423.txt : 20221103
<SEC-HEADER>0001178913-22-003423.hdr.sgml : 20221103
<ACCEPTANCE-DATETIME>20220914070216
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001178913-22-003423
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20220914

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GILAT SATELLITE NETWORKS LTD
		CENTRAL INDEX KEY:			0000897322
		STANDARD INDUSTRIAL CLASSIFICATION:	RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		C/O GILAT SATELLITE NETWORKS INC
		STREET 2:		1651 OLD MEADOW RD
		CITY:			MCLEAN
		STATE:			VA
		ZIP:			22102
		BUSINESS PHONE:		7037349401

	MAIL ADDRESS:	
		STREET 1:		GILAT HOUSE YEGIA KAPAYIM STREET
		STREET 2:		DANIV PARK
		CITY:			KIRYAT ARYE PETAH TI
		STATE:			L3
		ZIP:			00000
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
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                <div style="line-height: 1.25; font-family: 'Times New Roman', Times, serif;">Re:</div>
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                <div style="line-height: 1.25; font-family: 'Times New Roman', Times, serif; font-weight: bold;">Gilat Satellite Networks LTD</div>
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                <div style="line-height: 1.25; font-family: 'Times New Roman', Times, serif; font-weight: bold;">Form 20-F for the Fiscal Year Ended December 31, 2021 </div>
                <div style="line-height: 1.25; font-family: 'Times New Roman', Times, serif; font-weight: bold;">filed May 16, 2022</div>
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                <div style="line-height: 1.25; font-family: 'Times New Roman', Times, serif; font-weight: bold;">Form 6-K Filed August 9, 2022</div>
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              <td style="width: 35%; vertical-align: top; border-bottom: 2px solid rgb(0, 0, 0);">
                <div style="margin-right: 26.8pt; line-height: 1.25; font-family: 'Times New Roman', Times, serif; font-weight: bold;">File No. 000-21218</div>
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              <td colspan="1" style="width: 40%; vertical-align: top; padding-bottom: 2px;">&#160;</td>
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      </div>
      <div style="line-height: 1.25;">Dale Welcome</div>
      <div style="line-height: 1.25;">Anne McConnell</div>
      <div style="line-height: 1.25;">Securities and Exchange Commission</div>
      <div style="line-height: 1.25;">Washington, D.C.&#160; 20549</div>
      <div style="line-height: 1.25;">United States</div>
      <div style="line-height: 1.25;"><br style="line-height: 1.25;">
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      <div style="text-align: right; text-indent: 36pt; margin-left: 180pt; line-height: 1.25; font-family: 'Times New Roman',Times,serif;"><font style="font-weight: bold;">September 14, 2022</font></div>
      <div style="line-height: 1.25">&#160;</div>
      <div style="line-height: 1.25;">Dear Ladies and Gentlemen:</div>
      <div style="line-height: 1.25">&#160;</div>
      <div style="text-indent: 36pt; line-height: 1.25;">We are submitting this letter in response to your letter dated August 15, 2022 in which the staff of the Division of Corporation Finance (the &#8220;Staff&#8221;) provided comments to the Form 20-F for the year
        ended December 31, 2021 filed on May 16, 2022 and the Form 6-K filed on August 9, 2022 by Gilat Satellite Networks Ltd. (the &#8220;Company&#8221;).</div>
      <div style="line-height: 1.25">&#160;</div>
      <div style="text-align: justify; text-indent: 36pt; line-height: 1.25;">Set forth below are our responses to the comments.&#160; For your convenience, the text of each of such comments are reproduced in bold and italics before our response. Disclosure
        changes made in response to the Staff&#8217;s comments have been made in the amendment No. 1 to the Form 20-F for the year ended December 31, 2021 (the &#8220;Amendment&#8221;), which is being filed with the Commission contemporaneously with the submission of this
        letter.</div>
      <div style="line-height: 1.25;"><br style="line-height: 1.25;">
      </div>
      <div style="text-align: justify; text-indent: 36pt; line-height: 1.25;"><u>Form 20-F for the Fiscal Year Ended December 31, 2021</u></div>
      <div style="text-align: justify; text-indent: 36pt; line-height: 1.25;"><u>Item 15: Controls and Procedures</u></div>
      <div style="text-align: justify; text-indent: 36pt; line-height: 1.25;"><u>Disclosure Controls and Procedures, page 111</u></div>
      <div style="line-height: 1.25;"><br style="line-height: 1.25;">
      </div>
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            <td style="width: 18pt; vertical-align: top; align: right; font-style: italic; font-weight: bold;">1.</td>
            <td style="width: auto; vertical-align: top;">
              <div style="font-style: italic; font-weight: bold;">We note your conclusions that disclosure controls and procedures were effective but that internal controls over financial reporting were not effective as of December 31, 2021. Please tell us
                how management was able to conclude that disclosure controls and procedures were effective given the substantial overlap with internal controls over financial reporting. Refer to SEC Release No. 33-8238. Your response should also address
                how the material weaknesses you identified in internal controls over financial reporting did not impact your disclosure controls and procedures.</div>
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      <div style="margin-left: 36pt; line-height: 1.25; font-style: italic; font-weight: bold;">Alternatively, please revise your Form 20-F to present consistent conclusions for both disclosure controls and procedures and internal controls over financial
        reporting.</div>
      <div style="line-height: 1.25;"><br style="line-height: 1.25;">
      </div>
      <div style="text-align: justify; margin-left: 36pt; line-height: 1.25;">The Company respectfully acknowledges the Staff&#8217;s comment, and after reconsidering the implications of the identified and reported material weaknesses in internal controls over
        financial reporting, we determined that our disclosure controls and procedures were ineffective as of December 31, 2021. Accordingly, we have revised Item 15 in the Amendment and refer to the material weaknesses disclosures.</div>
      <div style="line-height: 1.25;"><br style="line-height: 1.25;">
      </div>
      <div style="text-align: justify; text-indent: 36pt; line-height: 1.25;"><u>Item 18: Financial Statements</u></div>
      <div style="text-align: justify; text-indent: 36pt; line-height: 1.25;"><u>Report of Independent Registered Public Accounting Firm, page F-2</u></div>
      <div style="line-height: 1.25;"><br style="line-height: 1.25;">
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            <td style="width: 18pt; vertical-align: top; align: right; font-style: italic; font-weight: bold;">2.</td>
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              <div style="font-style: italic; font-weight: bold;">We note the second sentence of the first paragraph of the auditors' report states that &#8220;in our opinion, the consolidated financial statements present fairly, in all material respects, the
                financial position of the Company at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020&#8221;. Please revise your Form 20-F to include an audit
                report from your registered public accounting firm that opines on the audited financial statements for the three years in the period ended December 31, 2021.</div>
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      </div>
      <div style="text-align: justify; margin-left: 36pt; line-height: 1.25;">The Company respectfully acknowledges the Staff&#8217;s comment and has included an updated audit report from our registered public accounting firm in the Amendment, that opines on the
        audited financial statements for the three years in the period ended December 31, 2021.</div>
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      <div style="line-height: 1.25">&#160;</div>
      <div style="text-align: justify; text-indent: 36pt; line-height: 1.25;"><u>Notes to Consolidated Financial Statements</u></div>
      <div style="text-align: justify; text-indent: 36pt; line-height: 1.25;"><u>Note 2: Significant Accounting Policies l.</u></div>
      <div style="text-align: justify; text-indent: 36pt; line-height: 1.25;"><u>Revenue recognition, page F-23</u></div>
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            <td style="width: 18pt; vertical-align: top; align: right; font-style: italic; font-weight: bold;">3.</td>
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              <div style="font-style: italic; font-weight: bold;">We note the following disclosures related to when and how you recognize revenue:</div>
              <div style="font-style: italic; font-weight: bold;"> <br>
              </div>
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            <td style="width: 36pt; vertical-align: top; align: right;">&#8226;</td>
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              <div style="font-style: italic; font-weight: bold;">revenue from long term contracts is recognized over time because of continuous transfer of control to the customer using the cost to cost measure of progress;</div>
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            <td style="width: 36pt; vertical-align: top; align: right;">&#8226;</td>
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              <div style="font-style: italic; font-weight: bold;">revenue from the sale of equipment is recognized at a point in time when the customer obtains control or when acceptance occurs;</div>
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            <td style="width: 36pt; vertical-align: top; align: right;">&#8226;</td>
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              <div style="font-style: italic; font-weight: bold;">products revenue includes construction of networks; and</div>
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              <td style="width: 36pt; vertical-align: top; align: right;">&#8226;</td>
              <td style="width: auto; vertical-align: top; text-align: justify;">
                <div style="font-style: italic; font-weight: bold;">revenue from periodic services are recognized ratably over the term services are provided.</div>
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        <div>&#160;</div>
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      <div style="text-align: justify; margin-left: 54pt; line-height: 1.25; font-style: italic; font-weight: bold;">Please tell us what consideration you have given to providing disaggregated revenue disclosures based on contract type and/or the timing of
        the transfer of products and services since it appears those factors would impact how economic factors affect the nature, amount, timing, and uncertainty of revenue and cash flows. Refer to ASC 606-10-55-90 and 91. We also note your auditors'
        report includes a CAM related to revenue from long term contracts; however, it is not clear how much of your revenue relates to such contracts.</div>
      <div style="line-height: 1.25;"><br style="line-height: 1.25;">
      </div>
      <div style="text-align: justify; margin-left: 36pt; line-height: 1.25;">The Company respectfully acknowledges the Staff&#8217;s comment.&#160; In accordance with&#160; ASC 606-10-55-90 through 55-91, when selecting the type of category (or categories) to use to
        disaggregate revenue, an entity should consider how information about the entity&#8217;s revenue has been presented for other purposes, including all of the following:</div>
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            <td style="width: 18pt; vertical-align: top; align: right;">a)</td>
            <td style="width: auto; vertical-align: top; text-align: justify;">
              <div>Disclosures presented outside the financial statements (for example, in earnings releases, annual reports, or investor presentations)</div>
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            <td style="width: 18pt; vertical-align: top; align: right;">b)</td>
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              <div>Information regularly reviewed by the chief operating decision maker for evaluating the financial performance of operating segments</div>
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            <td style="width: 18pt; vertical-align: top; align: right;">c)</td>
            <td style="width: auto; vertical-align: top; text-align: justify;">
              <div>Other information that is similar to the types of information identified in (a) and (b) and that is used by the entity or users of the entity&#8217;s financial statements to evaluate the entity&#8217;s financial performance or make resource
                allocation decisions.</div>
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      <div style="text-align: justify; margin-left: 36pt; line-height: 1.25;">The Company has evaluated its revenue streams in accordance with ASC 606 and determined that disaggregation of revenue based on type (i.e., long-term contracts versus other
        contracts) or based on timing of the transfer of products and services (i.e., at a point in time versus over time) is not applicable. The Company does not present revenue breakdowns by&#160;type and by the timing of the transfer of products and services
        for any purpose, including:</div>
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            <td style="width: 18pt; vertical-align: top; align: right;">a)</td>
            <td style="width: auto; vertical-align: top; text-align: justify;">
              <div>earnings releases, annual reports, investor presentations;</div>
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            <td style="width: 18pt; vertical-align: top; align: right;">b)</td>
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              <div>information regularly reviewed by the Company&#8217;s CEO, which was identified as the chief operating decision maker;</div>
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            <td style="width: 18pt; vertical-align: top; align: right;">c)</td>
            <td style="width: auto; vertical-align: top; text-align: justify;">
              <div>other information that is similar to the types of information identified in (a) and (b) and that is used by the entity or users of the entity&#8217;s financial statements, such as management meetings, presentations to the board of directors
                and its committees, transaction approval processes, compensation plans for employees etc.</div>
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      </div>
      <div style="text-align: justify; margin-left: 36pt; line-height: 1.25;">In addition, the Company's disclosure regarding its material revenue streams, as provided in note 2(1) to its consolidated financial statements for the year ended December 31,
        2021 (the "Note"), were provided in accordance with the requirements of ASC 606-10-50-12. These requirements include, among other things, a description of when the Company satisfies its performance obligations and the nature of the Company's
        services that it transfers to its customers. This disclosure includes:</div>
      <div style="text-align: justify; margin-left: 36pt; line-height: 1.25;"> <br>
      </div>
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            <td style="width: 18pt; vertical-align: top; align: right;">&#8226;</td>
            <td style="width: auto; vertical-align: top; text-align: justify;">
              <div>&#8220;long-term contracts&#8221;, which represent, as mentioned in the Note,<font style="font-style: italic;">&#8220;contracts under which the Company provides significant construction to the customer's specifications and networks operation and
                  maintenance&#8221;</font>, as well as <font style="font-style: italic;">&#8220;contracts relating to the design, development or manufacture of complex equipment or technology platforms to a buyer&#8217;s specification (or to provide services related to
                  the performance of such contracts)&#8221;. </font>Revenues from these two types of performance obligations, although not similar in their business substance, are recognized over time based on a cost-to-cost measure of progress.</div>
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            <td style="width: 18pt; vertical-align: top; align: right;">&#8226;</td>
            <td style="width: auto; vertical-align: top; text-align: justify;">
              <div><font style="font-style: italic;">&#8220;sale of equipment&#8221;</font>, which according to the Note,<font style="font-style: italic;"> &#8220;recognized at a point in time, once the customer has obtained control over the items purchased&#8221;. </font>It
                should be noted that the Company sells different and diverse types of equipments, with different business essence.</div>
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            <td style="width: 18pt; vertical-align: top; align: right;">&#8226;</td>
            <td style="width: auto; vertical-align: top; text-align: justify;">
              <div><font style="font-style: italic;">&#8220;revenue from periodic services&#8221;, </font>which according to the Note, <font style="font-style: italic;">&#8220;recognized ratably over the term the services are rendered&#8221;</font>. It should be noted that the
                Company provides different and diverse &#8220;periodic services&#8221;, with different business essence, which are recognized as revenue ratabely over time.</div>
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      <div style="line-height: 1.25;"><br style="line-height: 1.25;">
      </div>
      <div style="line-height: 1.25;"><u>Note 15: Customers, Geographic and Segment Information, page F-58</u></div>
      <div style="line-height: 1.25">&#160;</div>
      <table cellspacing="0" cellpadding="0" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;" class="DSPFListTable" id="zcb64c142b5934c83872216020c59b1cf">

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            <td style="width: 18pt; vertical-align: top; align: right; font-style: italic; font-weight: bold;">4.</td>
            <td style="width: auto; vertical-align: top;">
              <div style="font-style: italic; font-weight: bold;">In future filings, please separately disclose revenue by individual country, including revenue related to the US and/or Canada, to the extent material, as required by ASC 280-10-50-41.</div>
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      <div style="line-height: 1.25;"><br style="line-height: 1.25;">
      </div>
      <div style="text-align: justify; margin-left: 36pt; line-height: 1.25;">The Company respectfully acknowledges the Staff&#8217;s comment and advises the Staff that in future filings, the Company will adjust its disclosure of revenues by geographic areas, to
        include a disclosure of revenues by material individual countries (including revenue related to the US and/or Canada, to the extent material).</div>
      <div style="line-height: 1.25;"><br style="line-height: 1.25;">
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      <div style="line-height: 1.25">&#160;</div>
      <div style="text-align: justify; line-height: 1.25;"><u>Form 6-K Filed August 9, 2022</u></div>
      <div style="text-align: justify; line-height: 1.25;"><u>Reconciliation Between GAAP and Non-GAAP Consolidated Statements of Income (Loss), page 8</u></div>
      <div style="line-height: 1.25;"><br style="line-height: 1.25;">
      </div>
      <table cellspacing="0" cellpadding="0" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;" class="DSPFListTable" id="zdab30e8fd9e34e098ce5d646c4cd31af">

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            <td style="width: 18pt; vertical-align: top; align: right; font-style: italic; font-weight: bold;">5.</td>
            <td style="width: auto; vertical-align: top;">
              <div style="font-style: italic; font-weight: bold;">We note that the individual adjustments to non-GAAP gross profit and non-GAAP operating expenses for the three-month and six-month periods ended June 30, 2022 do not appear to reconcile to
                the adjustment totals presented in the summary tables. Please provide us explanations for the differences and revise future filings as appropriate. In addition, please explain to us if/how you determine the tax effects of non-GAAP
                adjustments to Non-GAAP net income as required by Question 102.11 of the C&amp;D is related to Non-GAAP Financial Measures.</div>
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      </table>
      <div style="line-height: 1.25;"><br style="line-height: 1.25;">
      </div>
      <div style="text-align: justify; margin-left: 36pt; line-height: 1.25;">The Company respectfully acknowledges the Staff&#8217;s comment, and advises the Staff that:</div>
      <div style="text-align: justify; margin-left: 36pt; line-height: 1.25;"> <br>
      </div>
      <table cellspacing="0" cellpadding="0" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;" class="DSPFListTable" id="z67a0629eac8440ae967919d07fcfc189">

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            </td>
            <td style="width: 18pt; vertical-align: top; align: right;">a)</td>
            <td style="width: auto; vertical-align: top; text-align: justify;">
              <div>the Company unintentionally shifted an amount of USD 49 thousand in the individual adjustment tables, between the gross profit adjustments and the operating expenses adjustments.</div>
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      </table>
      <div style="text-align: justify; margin-left: 90pt; line-height: 1.25;">Accordingly, the Company will revise future filings as appropriate.</div>
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            <td style="width: 18pt; vertical-align: top; align: right;">b)</td>
            <td style="width: auto; vertical-align: top; text-align: justify;">
              <div>the Company assesses the income tax effect in accordance with Question 102.11 of the C&amp;D, and such adjustments were not found to be material in the six and three months ended June 30, 2022.</div>
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      </table>
      <div style="line-height: 1.25;"><br style="line-height: 1.25;">
      </div>
      <div style="line-height: 1.25;">If you have any further questions, please do not hesitate to contact our counsel, Mr Steven Glusband of Carter Ledyard &amp; Milburn LLP at 212-238-8605.</div>
      <div style="line-height: 1.25">&#160;</div>
      <div style="line-height: 1.25;">Very truly yours,</div>
      <div style="line-height: 1.25">&#160;</div>
      <div style="line-height: 1.25;">Gil Benyamini</div>
      <div style="line-height: 1.25">&#160;</div>
      <div style="line-height: 1.25;">Chief Financial Officer</div>
      <div style="line-height: 1.25">&#160;</div>
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