6-K

FORM 6 – K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report on Foreign Issuer

Pursuant to Rule 13a - 16 or 15d - 16
of the Securities Exchange Act of 1934

For the Month of August 2008

Gilat Satellite Networks Ltd.
(Translation of Registrant’s Name into English)

Gilat House, Yegia Kapayim Street
Daniv Park, Kiryat Arye, Petah Tikva, Israel
(Address of Principal Corporate Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F x Form 40-F o

Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o No x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A

Attached hereto is Registrant’s press release dated August 25, 2008, announcing that Registrant has informed the Purchasers that they are in breach of the definitive merger agreement and announcing results for the second quarter, 2008.

This report on Form 6-K is being incorporated by reference into the Registration Statements on Form S-8 (Registration Nos. 333-96630, 333-113932, 333-08826, 333-10092, 333-12466 and 333-12988).

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Gilat Satellite Networks Ltd.
(Registrant)

By: /s/ Rachel Prishkolnik
——————————————
Rachel Prishkolnik
Corporate Secretary

Dated: August 28, 2008

Gilat has informed the Purchasers that they are in breach of the definitive merger agreement and that they have 72 hours to fulfill their obligations.

Gilat also announces results for the second quarter, 2008

Petah Tikva, Israel, August 25, 2008 – Gilat Satellite Networks Ltd. (Nasdaq: GILT), a worldwide leader in satellite networking technology, solutions and services, today reported its results for the second quarter ending June 30th, 2008. In addition, Gilat announced that the Purchasers have verbally informed the Company that they will not close the merger transaction at the agreed upon $11.40 share price despite the fact that Gilat informed them on August 5, 2008, that all conditions precedent to closing have been met. The Purchasers made a number of new verbal proposals which were substantially different from the definitive agreement. These proposals were rejected by the Company’s board of directors after finding they were not in the best interest of the Company’s shareholders. The Company has informed the Purchasers that they have 72 hours to complete the definitive merger agreement. If the conditions are not met, Gilat shall seek all remedies at its disposal including legal action.

The definitive agreement, entered into by a consortium of investors, The Gores Group LLC, Mivtach Shamir Holdings Ltd., companies affiliated with Roy Ben-Yami, Ami Lustig and Eytan Stibbe and DGB Investments, Inc. a company affiliated with Doug Bergeron, provides for a termination fee in the amount of $47.3 million, payable to Gilat in the event of an intentional breach of the agreement by the Purchasers.

The Company also announces its results for the second quarter of 2008. Revenues for the second quarter of 2008 were $65.6 million compared to $70.3 million for the same period of 2007. Net income for the second quarter of 2008 was $1.3 million or $0.03 per diluted share, compared to a net income of $5.5 million or $0.13 per diluted share in the second quarter of 2007. Results for the three month period ended June 30, 2008, include expenses related to the merger agreement in the amount of $0.2 million.

Revenues for the six month period ended June 30, 2008 were $136.1 million compared to $138.4 million for the comparable period of 2007. Net income for the six month period ended June 30, 2008 was $5.9 million or $0.14 per diluted share compared to net income of $10.5 million or $0.25 per diluted share in the same period of 2007. Results for the six month period ended June 30, 2008, include expenses related to the merger agreement in the amount of $0.9 million.

For a detailed reconciliation of GAAP to non-GAAP financial information and for more information regarding Gilat’s use of non-GAAP financial measures, please see the table titled “Reconciliation between GAAP and non-GAAP statements of operations” as well as the additional disclosure contained in this press release ⁽¹⁾⁽²⁾.

Gilat's Chief Executive Officer and Chairman of the Board Amiram Levinberg said,
“It is disappointing that the definitive agreement, which was achieved after 11 months of intense due diligence and negotiations, has not been honored by the Purchasers as of yet. The definitive agreement requires the consortium to complete the transaction or pay Gilat a significant break up fee. I hope that the consortium will meet its obligations without delay so we need not take legal actions to enforce the undertakings set forth in the agreement.”

With respect to the quarterly results Amiram Levinberg stated, “Our financial results were mainly affected by the Colombian operations. We are in advanced negotiations with the Colombian government and hope that an agreement can be reached by the end of the third quarter. Our Spacenet business in the United States is experiencing positive trends, evidenced by strong momentum in the second quarter. Gilat’s bookings in the second quarter of this year were more than double the bookings in the first quarter. This healthy profile will have a positive impact on our business beginning with the fourth quarter of 2008.”

Conference Call & Webcast

Gilat will host a conference call today at 9:30 AM Eastern Time. In order to ensure audio access, participants from the U.S. should dial in at (866) 3455-855 and international participants should dial in at (972) 3-918-0692. The live presentation may also be accessed via Webcast through the Company’s website at www.gilat.com prior to the call. A replay of the call will be available beginning at approximately 12:00 PM Eastern Time, August 25, 2008 until August 27, 2008 at 12:00 PM.

To listen to the replay, U.S. participants should call (888) 326-9310 and international participants should call (972) 3-925-5947. The call will also be available for replay as a Webcast on the Company’s website at www.gilat.com and will be archived for 30 days.

About Gilat Satellite Networks Ltd.

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

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

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

Notes:
(1) The attached summary financial statements were prepared in accordance with U.S. GAAP. The attached summary financial statements for Q2 2008 are unaudited. To supplement the consolidated financial statements presented in accordance with GAAP, the Company presents Gilat’s net income, EBITDA and earnings per diluted share, before the share-based payment charge, which is the non-cash stock option expense as per SFAS 123 (R). This non-GAAP presentation of net income, EBITDA and earnings per share is provided to enhance the understanding of the Company’s historical financial performance and comparability between periods.

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

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

Investor Relations Contact:
Andrea Costa
Grayling Global
Phone: 1 (646) 284-9400
acosta@hfgcg.com

Media Relations Contact:
Kim Kelly
Phone: + (972) 3 925-2406
kimk@gilat.com

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


	June 30,		December 31,

	2008		2007

	Unaudited


ASSETS

CURRENT ASSETS:
Cash and cash equivalents		52,692		122,807
Short-term bank deposits and held to maturity marketable securities		96,701		45,578
Short-term restricted cash		8,404		7,091
Restricted cash held by trustees		7,599		7,450
Trade receivables, net of allowance for doubtful accounts		58,101		43,746
Inventories		24,521		24,794
Other current assets		23,530		24,748


Total current assets		271,548		276,214


LONG-TERM INVESTMENTS AND RECEIVABLES:
Long-term restricted cash		5,434		6,321
Long-term restricted cash held by trustees		16,891		16,544
Severance pay fund		13,944		11,835
Long-term trade receivables, receivables in respect of capital leases and other receivables		10,872		9,170


Total long-term investments and receivables		47,141		43,870


PROPERTY AND EQUIPMENT, NET		106,285		105,247


INTANGIBLE ASSETS AND DEFERRED CHARGES, NET		4,142		4,771


TOTAL ASSETS		429,116		430,102

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


	June 30,			December 31,

	2008			2007

	Unaudited


LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:
Short-term bank credit		5,500			5,823
Current maturities of long-term loans		5,379			5,354
Trade payables		27,518			25,954
Accrued expenses		19,682			20,275
Short-term advances from customer, held by trustees		15,501			15,005
Other current liabilities		46,183			58,686


Total current liabilities		119,763			131,097


LONG-TERM LIABILITIES:
Accrued severance pay		14,048			11,723
Long-term advances from customer, held by trustees		8,989			8,989
Long-term loans, net		18,991			18,704
Accrued interest related to restructured debt		2,165			2,493
Convertible subordinated notes		16,315			16,315
Other long-term liabilities		11,128			12,971


Total long-term liabilities		71,636			71,195


COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS’ EQUITY:
Share capital - Ordinary shares of NIS 0.2 par value		1,814			1,796
Additional paid in capital		861,434			859,207
Accumulated other comprehensive income		3,558			1,776
Accumulated deficit		(629,089	)		(634,969	)


Total shareholders’ equity		237,717			227,810


TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		429,116			430,102

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


	Six months ended					Three months ended
	June 30,					June 30,

	2008			2007		2008			2007

	Unaudited			Unaudited		Unaudited			Unaudited


Revenues		136,130			138,367		65,597			70,329
Cost of Revenues		89,840			88,529		44,583			45,306

Gross profit		46,290			49,838		21,014			25,023

Research and development expenses:
Expenses incurred		8,934			8,737		4,635			4,420
Less - grants		776			1,275		737			927

		8,158			7,462		3,898			3,493

SMG&A		33,437			34,182		16,374			17,087

Operating income		4,695			8,194		742			4,443

Financial income, net and other		1,684			2,722		872			1,266
Expenses related to merger transaction		(933	)		–		(211	)		–
Other income		1,182			–		–			–

Income before taxes on income		6,628			10,916		1,403			5,709

Taxes on income		748			464		113			170

Net income		5,880			10,452		1,290			5,539


Basic net earnings per share		0.15			0.27		0.03			0.14

Diluted net earnings per share		0.14			0.25		0.03			0.13


Weighted average number of shares used in computing net earnings per share
Basic		39,783			38,925		39,864			38,996

Diluted		42,293			41,261		42,380			41,417

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


	Six months ended						Three months ended
	June 30,						June 30,

	2008			2007			2008			2007

	Unaudited			Unaudited			Unaudited			Unaudited


Cash flows from operating activities:
Net income		5,880			10,452			1,290			5,539
Adjustments required to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		6,292			10,177			3,161			5,327
Stock compensation related to employees stock options		380			776			171			351
Accrued severance pay, net		216			141			(89	)		(312	)
Interest accrued on short and long-term restricted cash		(496	)		(736	)		(45	)		(476	)
Interest on held to maturity marketable securities		(1,635	)		(937	)		(847	)		(937	)
Exchange rate differences on long-term loans		504			140			(20	)		63
Exchange rate differences on loans to employees		20			41			4			69
Capital loss (gain) from disposal of property and equipment		51			75			32			(68	)
Deferred income taxes		(226	)		(348	)		(292	)		(304	)
Increase in trade receivables, net		(14,035	)		(7,264	)		(6,938	)		(3,223	)
Decrease (increase) in other assets (including short-term, long-term and deferred charges)		(4,218	)		4,368			2,580			3,631
Decrease (increase) in inventories		(2,437	)		4,049			(5,598	)		559
Increase (decrease) in trade payables		1,184			125			(759	)		1,443
Increase (decrease) in accrued expenses		(596	)		(1,950	)		262			(2,064	)
Increase (decrease) in advances from customer, held by trustees, net		496			(7,522	)		44			(3,761	)
Decrease in other accounts payable and other long term liabilities, mainly deferred revenues		(13,542	)		(1,483	)		(6,812	)		(3,595	)

Net cash provided by (used in) operating activities		(22,162	)		10,104			(13,856	)		2,242

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


	Six months ended June 30,						Three months ended June 30,

	2008			2007			2008			2007

	Unaudited			Unaudited			Unaudited			Unaudited


Cash flows from investing activities:
Purchase of property and equipment		(4,325	)		(2,954	)		(2,783	)		(2,272	)
Return on investment		1,182			–			–			–
Other investments		(195	)		–			–			–
Purchase of held to maturity marketable securities		(80,559	)		(63,360	)		(56,653	)		(4,954	)
Proceeds from held to maturity marketable securities		31,072			5,475			12,410			5,475
Proceeds from sale of property and equipment		426			–			25			–
Loans to employees, net		2,778			447			20			159
Proceeds from restricted cash held by trustees		–			92			–			–
Investment in restricted cash (including long-term)		(597	)		(4,469	)		–			(23	)
Proceeds from restricted cash (including long-term)		171			3,821			77			3,388

Net cash provided by (used in) investing activities		(50,047	)		(60,948	)		(46,904	)		1,773


Cash flows from financing activities:
Exercise of options, net		1,866			1,625			799			1,212
Issuance of shares, net of issuance expenses		–			(259	)		–			–
Short-term bank credit, net		(323	)		4,628			–			328
Repayments of long-term loans		(192	)		(1,393	)		(91	)		(551	)


Net cash provided by financing activities		1,351			4,601			708			989


Effect of exchange rate changes on cash and cash equivalents		743			539			659			360


Increase (decrease) in cash and cash equivalents		(70,115	)		(45,704	)		(59,393	)		5,364

Cash and cash equivalents at the beginning of the period		122,807			149,545			112,085			98,477


Cash and cash equivalents at the end of the period		52,692			103,841			52,692			103,841

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


		Six months ended June 30,				Three months ended June 30,

		2008		2007		2008		2007

		Unaudited		Unaudited		Unaudited		Unaudited


	GAAP operating income		4,695		8,194		742		4,443
	Non-cash stock options expenses (1)		380		776		171		351

	Non-GAAP operating income		5,075		8,970		913		4,794


	GAAP net income		5,880		10,452		1,290		5,539
	Non-cash stock options expenses (1)		380		776		171		351

	Non-GAAP net income		6,260		11,228		1,461		5,890


	GAAP Earnings per share (diluted)		0.14		0.25		0.03		0.13
	Non-cash stock options expenses (1)		0.01		0.02		0.00		0.01

	Non-GAAP Earnings per share (diluted)		0.15		0.27		0.03		0.14


(1)	Non-cash stock options expenses:
	Cost of Revenues		14		4		5		4
	Research and development		1		5		1		2
	Selling, marketing, general and administrative		365		767		165		345

			380		776		171		351

GILAT SATELLITE NETWORKS LTD.
CONDENSED EBITDA
US dollars in thousands

Six months ended
June 30,

Three months ended
June 30,

2008

2007

2008

2007

Unaudited

Operating income

4,695

8,194

742

4,443

Add:

Non-cash stock option expenses

380

776

171

351

Deprecation and amortization

6,292

10,177

3,161

5,327

EBITDA

11,367

19,147

4,074

10,121