Gilat Reports Strong Revenue & Profitability Growth in Third Quarter 2021


Revenue up 34% year-over-year to $49.9M, GAAP operating income of $0.9 million and Adjusted EBITDA reached $4.0 million

PETAH TIKVA, Israel, Nov. 09, 2021 (GLOBE NEWSWIRE) -- Gilat Satellite Networks Ltd. (NASDAQ: GILT, TASE: GILT), a worldwide leader in satellite networking technology, solutions and services, today reported its results for the third quarter of 2021.

Third Quarter Financial Highlights

  • Revenues of $49.9 million, a 34% increase from $37.3 million in Q3 2020 and 12% lower than $56.9 million in the previous quarter;
  • GAAP operating income of $0.9 million, a significant improvement compared with an operating loss of $10.9 million in Q3 2020 (which included $8.2 million of Comtech merger and acquisition expenses) and an operating loss of $0.3 million in the previous quarter;
  • Non-GAAP operating income of $1.5 million, compared with operating loss of $1.9 million in Q3 2020, and an operating income of $0.2 million in the previous quarter;
  • GAAP net income of $0.2 million, or $0.00 per diluted share, compared with a net loss of $11.6 million, or loss of $0.21 per share in Q3 2020 and net loss of $0.1 million in the previous quarter, or $0.00 per share;
  • Non-GAAP net income of $0.7 million, or $0.01 per diluted share, compared with a net loss of $2.6 million, or loss of $0.05 per share in Q3 2020, and compared with a net income of $0.4 million, or $0.01 per diluted share, in the previous quarter;  
  • Adjusted EBITDA of $4.0 million compared with adjusted EBITDA of $0.6 million in Q3 2020; and adjusted EBITDA of $2.5 million in the previous quarter;

Management Commentary

Adi Sfadia, Gilat's CEO, commented: “Our revenue this quarter showed significant year over year growth as we continue to increase profitability reaching an Adjusted EBITDA of $4 million. We are especially pleased with our success in signing new deals, some of which are potentially transformable in nature and strategic.

"I am most excited about major progress this quarter in the NGSO and VHTS market segments. Furthermore, we experienced improved performance and significant bookings in our strategic market segments including Cellular Backhaul and IFC where we received several orders from key market players to be delivered over the next few quarters.

"In our Peru operation we have made significant progress with awards of $28 million in multi-year service agreements, and achieved our target goal of approximately $50 million in annual recurring revenue from Peru, well before the stated target date."

Continued Mr. Sfadia, “Although the global supply chain presents challenges, so far we have been able to mitigate these issues and we hope that this will continue to be the case. Looking ahead, given the recent wins and awards as well as the strong and improving momentum we are seeing across our business, we are increasingly confident that we will show significant growth in the top line and in the Adjusted EBITDA, both in Q4 of this year and in 2022.”

Key Recent Announcements

  • Tier-1 Mobile Operator in Asia Expands 4G Network with Gilat’s Cellular Backhaul Solution
  • Gilat Expands 4G Network with Tier-1 Mobile Operator in North America
  • Gilat Signs Service Agreements of Over $16 Million for Operating Transport-Networks to Support Broadband Services in Peru
  • Gilat Receives $12 Million Service Agreement for Operation of Transport Network in Cusco, Peru
  • Gilat Received $17 Million in Orders for Support of Low Earth Orbit Constellation
  • SES Awards Gilat Multi-Million Dollar Contract for Multiple Broadband Applications in Latin America

Conference Call Details

Gilat’s management will discuss its third quarter 2021 results and business achievements and participate in a questions and answers session:

Date: Tuesday, November 9, 2021
Start: 9:30 AM ET / 4:30 PM IT
Dial-in: US: 1-866-744-5399
International: +972-3-918-0610

A simultaneous webcast of the conference call will be available on the Gilat website at www.gilat.com and through this link: https://veidan.activetrail.biz/gilatq3-2021

The webcast will also be archived for a period of 30 days on the Company’s website and through the link above.

Non-GAAP Measures
The attached summary unaudited financial statements were prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP). To supplement the consolidated financial statements presented in accordance with GAAP, the Company presents Non-GAAP presentations of net income, operating income, Adjusted EBITDA and earnings per share. The adjustments to the Company’s GAAP results are made with the intent of providing both management and investors a more complete understanding of the Company’s underlying operational results, trends and performance. Non-GAAP financial measures mainly exclude the effect of stock based compensation, amortization of purchased intangibles, lease incentive amortization, litigation expenses, income related to trade secrets claims, restructuring and reorganization costs, merger, acquisition and related litigation expense (income), net and initial recognition of deferred tax asset with respect to carry-forward losses.

Adjusted EBITDA is presented to compare the Company’s performance to that of prior periods and evaluate the Company’s financial and operating results on a consistent basis from period to period. The Company also believes this measure, when viewed in combination with the Company’s financial results prepared in accordance with GAAP, provides useful information to investors to evaluate ongoing operating results and trends. Adjusted EBITDA, however, should not be considered as an alternative to operating income or net income for the period and may not be indicative of the historic operating results of the Company; nor is it meant to be predictive of potential future results. Adjusted EBITDA is not a measure of financial performance under GAAP and may not be comparable to other similarly titled measures for other companies. Reconciliation between the Company's Operating income and Adjusted EBITDA is presented in the attached summary financial statements.

Non-GAAP presentations of net income, operating income, Adjusted EBITDA and earnings per share should not be considered in isolation or as a substitute for any of the consolidated statements of operations prepared in accordance with GAAP, or as an indication of Gilat’s operating performance or liquidity.

About Gilat

Gilat Satellite Networks Ltd. (NASDAQ: GILT, TASE: GILT) is a leading global provider of satellite-based broadband communications. With 30 years of experience, we design and manufacture cutting-edge ground segment equipment, and provide comprehensive solutions and end-to-end services, powered by our innovative technology. Delivering high value competitive solutions, our portfolio comprises of a cloud based VSAT network platform, high-speed modems, high performance on-the-move antennas and high efficiency, high power Solid-State Amplifiers (SSPA) and Block Upconverters (BUC).

Gilat’s comprehensive 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, all while meeting the most stringent service level requirements. Gilat controlling shareholders are the FIMI Private Equity Funds. For more information, please visit: www.gilat.com

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, risks associated with the outbreak and global spread of the coronavirus (COVID-19) pandemic; changes in general economic and business conditions, inability to maintain market acceptance to Gilats products, inability to timely develop and introduce new technologies, products and applications, rapid changes in the market for Gilats 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 Companys proprietary technology and risks associated with Gilats international operations and its location in Israel. For additional information regarding these and other risks and uncertainties associated with Gilats business, reference is made to Gilats reports filed from time to time with the Securities and Exchange Commission. We undertake no obligation to update or revise any forward-looking statements for any reason.

Contact:
Gilat Satellite Networks
Doreet Oren, Senior Director Corporate Communications
DoreetO@gilat.com

Ehud Helft
GK Investor & Public Relations
gilat@gkir.com
+1 212 378 8040

 

GILAT SATELLITE NETWORKS LTD.    
CONSOLIDATED STATEMENTS OF OPERATIONS          
U.S. dollars in thousands (except share and per share data)       
        
     Three months ended
 Nine months ended
     September, 30
  September, 30
     2021   2020   2021   2020 
    Unaudited Unaudited
           
Revenues  $49,911  $37,270  $151,547  $123,258 
Cost of revenues   32,306   27,827   104,870   95,341 
           
Gross profit   17,605   9,443   46,677   27,917 
           
Research and development expenses  7,640   6,442   23,674   20,215 
Less - grants   416   460   790   932 
Research and development expenses, net  7,224   5,982   22,884   19,283 
Selling and marketing expenses  5,359   3,687   15,827   12,337 
General and administrative expenses  4,104   2,478   11,042   10,269 
Merger, acquisition and related litigation expense, net -   8,198   -   11,149 
           
Total operating expenses  16,687   20,345   49,753   53,038 
           
Operating income (loss)   918   (10,902)  (3,076)  (25,121)
           
Financial expenses, net   (701)  (286)  (1,458)  (1,715)
           
Income (loss) before taxes on income  217   (11,188)  (4,534)  (26,836)
           
Taxes on income   49   363   523   695 
           
Net income (loss)  $ 168  $ (11,551) $ (5,057) $ (27,531)
           
Basic and Diluted earnings (loss) per share $ 0.00  $ (0.21) $ (0.09) $ (0.50)
           
Weighted average number of shares used in        
 computing earnings (loss) per share        
 Basic   56,525,177   55,520,197   56,355,020   55,506,266 
 Diluted   56,958,250   55,520,197   56,355,020   55,506,266 
           


GILAT SATELLITE NETWORKS LTD.        
RECONCILIATION BETWEEN GAAP AND NON-GAAP STATEMENTS OF OPERATIONS
FOR COMPARATIVE PURPOSES      
U.S. dollars in thousands (except share and per share data)    
     
      Three months ended
        Three months ended    
      September 30, 2021        September 30, 2020
    
  GAAP Adjustments (1) Non-GAAP GAAP Adjustments (1) Non-GAAP
      Unaudited         Unaudited     
             
Gross profit $17,605  96  $17,701 $9,443   28  $9,471 
Operating expenses (income)  16,687  (448)  16,239  20,345   (8,950)  11,395 
Operating income (loss)  918  544   1,462  (10,902)  8,978   (1,924)
Income (loss) before taxes on income  217  544   761  (11,188)  8,978   (2,210)
Net income (loss)  168  544   712  (11,551)  8,978   (2,573)
             
Earnings (loss) per share (basic and diluted) $ 0.00 $0.01  $ 0.01 $ (0.21) $0.16  $ (0.05)
             
Weighted average number of shares used in computing earnings per share           
     Basic     56,525,177   56,525,177     55,520,197   55,520,197 
     Diluted    56,958,250   57,227,810     55,520,197   55,520,197 
             
 
(1)Adjustments reflect the effect of non-cash stock-based compensation as per ASC 718, amortization of intangible assets related to shares acquisition transactions, merger and acquisition and related litigation, net. and restructuring and re-organization costs              


  Three months ended Three months ended
  September 30, 2021 September 30, 2020
  Unaudited Unaudited
     
GAAP net income (loss) $168 $(11,551)
     
Gross profit    
Non-cash stock-based compensation expenses  91  21 
Amortization of intangible assets related to acquisition transactions  5  7 
   96  28 
Operating expenses    
Non-cash stock-based compensation expenses  398  259 
Amortization of intangible assets related to acquisition transactions  50  49 
Merger and acquisition and related litigation, net  -  8,198 
Restructuring and re-organization costs  -  444 
   448  8,950 
     
Non-GAAP net income (loss) $712 $(2,573)
     


GILAT SATELLITE NETWORKS LTD.         
RECONCILIATION BETWEEN GAAP AND NON-GAAP STATEMENTS OF OPERATIONS     
FOR COMPARATIVE PURPOSES
U.S. dollars in thousands (except share and per share data)
 
      Nine months ended
         Nine months ended
    
      September 30, 2021
         September 30, 2020
    
  GAAP Adjustments (1) Non-GAAP GAAP Adjustments (1) Non-GAAP
       Unaudited           Unaudited     
             
Gross profit$46,677   226  $46,903  $27,917   144  $28,061 
Operating expenses (income) 49,753   (735)  49,018   53,038   (12,887)  40,151 
Operating income (loss) (3,076)  961   (2,115)  (25,121)  13,031   (12,090)
Income (loss) before taxes on income (4,534)  961   (3,573)  (26,836)  13,031   (13,805)
Net income (loss) (5,057)  961   (4,096)  (27,531)  13,031   (14,500)
             
Earnings (loss) per share (basic and diluted)$ (0.09) $0.02  $ (0.07) $ (0.50) $0.24  $ (0.26)
             
             
Weighted average number of shares used in           
   computing earnings per share           
     Basic and Diluted    56,355,020   56,355,020      55,506,266   55,506,266 
             
             
(1) Adjustments reflect the effect of non-cash stock-based compensation as per ASC 718, amortization of intangible assets related to shares acquisition transactions, merger and acquisition and related litigation, net, trade secrets and other litigation expenses and restructuring and re-organization costs .        


  Nine months ended  Nine months ended
  September 30, 2021  September 30, 2020
  Unaudited  Unaudited
      
GAAP net loss $(5,057)  $(27,531)
      
Gross profit     
Non-cash stock-based compensation expenses  211    127 
Amortization of intangible assets related to acquisition transactions  15    17 
   226    144 
Operating expenses     
Non-cash stock-based compensation expenses  584    860 
Amortization of intangible assets related to acquisition transactions  151    150 
Trade secrets and other litigation expenses  -    11 
Merger, acquisition and related litigation expense, net  -    11,149 
Restructuring and re-organization costs  -    717 
   735    12,887 
      
Non-GAAP net loss $(4,096)  $(14,500)
      


GILAT SATELLITE NETWORKS LTD.        
SUPPLEMENTAL INFORMATION        
U.S. dollars in thousands        
ADJUSTED EBITDA:        
         
   Three months ended   Nine months ended
   September 30,   September 30,
   2021  2020   2021   2020 
  Unaudited Unaudited
         
GAAP operating profit (loss) $918 $(10,902) $(3,076) $(25,121)
Add:        
Non-cash stock-based compensation expenses  489  280   795   987 
Trade secrets and other litigation expenses  -  -   -   11 
Restructuring and re-organization costs  -  444   -   717 
Merger, acquisition and related litigation expense, net  -  8,198   -   11,149 
Depreciation and amortization (*)  2,608  2,542   7,365   7,924 
         
Adjusted EBITDA $ 4,015 $ 562  $ 5,084  $ (4,333)
         
(*) Including amortization of lease incentive        
         
SEGMENT REVENUE:        
         
   Three months ended    Nine months ended 
   September 30,   September 30, 
   2021  2020   2021   2020 
  Unaudited Unaudited
         
Fixed Networks $22,328 $22,797  $78,455  $67,587 
Mobility Solutions  21,624  9,210   52,626   42,417 
Terrestrial Infrastructure Projects  5,959  5,263   20,466   13,254 
         
Total revenue $ 49,911 $ 37,270  $ 151,547  $ 123,258 
         

 

 GILAT SATELLITE NETWORKS LTD.    
 CONSOLIDATED BALANCE SHEETS    
 U.S. dollars in thousands    
      
   September 30, December 31,
    2021   2020 
   Unaudited Audited
      
 ASSETS    
      
 CURRENT ASSETS:    
 Cash and cash equivalents $63,774  $88,754 
 Restricted cash  21,624   27,162 
 Trade receivables, net  29,705   27,976 
 Contract assets  24,469   41,573 
 Inventories  31,577   31,304 
 Other current assets  24,189   16,637 
      
    Total current assets  195,338   233,406 
      
 LONG-TERM ASSETS:    
 Restricted cash  12   42 
 Severance pay funds  6,524   6,665 
 Deferred taxes  19,343   19,295 
 Operating lease right-of-use assets  4,129   4,879 
 Other long term receivables  6,474   7,797 
      
 Total long-term assets  36,482   38,678 
      
 PROPERTY AND EQUIPMENT, NET  75,631   77,172 
      
 INTANGIBLE ASSETS, NET  750   1,082 
      
 GOODWILL  43,468   43,468 
      
 TOTAL ASSETS $351,669  $393,806 
      
      
 GILAT SATELLITE NETWORKS LTD.    
 CONSOLIDATED BALANCE SHEETS (Cont.)    
 U.S. dollars in thousands    
      
   September 30, December 31,
    2021   2020 
   Unaudited Audited
      
 LIABILITIES AND SHAREHOLDERS' EQUITY    
      
 CURRENT LIABILITIES:    
 Current maturities of long-term loans $-  $4,000 
 Trade payables  17,767   20,487 
 Accrued expenses  47,722   46,387 
 Advances from customers and deferred revenues  29,550   26,244 
 Operating lease liabilities  1,804   1,911 
 Dividend payable  -   35,003 
 Other current liabilities  13,342   13,322 
      
    Total current liabilities  110,185   147,354 
      
 LONG-TERM LIABILITIES:    
 Accrued severance pay  6,819   7,136 
 Long-term advances from customers  3,022   1,890 
 Operating lease liabilities  2,325   2,985 
 Other long-term liabilities  120   631 
      
    Total long-term liabilities  12,286   12,642 
      
 SHAREHOLDERS' EQUITY:    
 Share capital - ordinary shares of NIS 0.2 par value  2,706   2,647 
 Additional paid-in capital  929,359   928,626 
 Accumulated other comprehensive loss  (6,364)  (6,017)
 Accumulated deficit  (696,503)  (691,446)
      
 Total shareholders' equity  229,198   233,810 
      
 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$351,669  $393,806 
      


GILAT SATELLITE NETWORKS LTD.        
CONSOLIDATED STATEMENTS OF CASH FLOWS        
U.S. dollars in thousands        
          
   Three months ended  Nine months ended
    September 30,   September 30,
    2021   2020   2021   2020 
   Unaudited  Unaudited
Cash flows from operating activities:        
Net income (loss) $168  $(11,551) $(5,057) $(27,531)
Adjustments required to reconcile net income         
 to net cash provided by operating activities:        
Depreciation and amortization  2,556   2,486   7,202   7,757 
Capital loss from disposal of property and equipment  -   11   -   34 
Stock-based compensation of options  489   280   795   987 
Accrued severance pay, net  (49)  11   (177)  37 
Deferred taxes, net  (232)  (39)  (47)  101 
Decrease (increase) in trade receivables, net  5,311   2,488   (1,757)  20,852 
Decrease (increase) in contract assets  (639)  (6,042)  17,104   (14,404)
Decrease (increase) in other assets (including short-term, long-term        
   and deferred charges)  (1,476)  1,209   (5,485)  7,919 
Decrease (increase) in inventories  (2,121)  548   (347)  (5,150)
Decrease in trade payables  (1,929)  (2,825)  (2,719)  (3,335)
Increase (decrease) in accrued expenses  (542)  5,616   1,151   (193)
Increase (decrease) in advance from customers and deferred revenue  4,560   1,609   4,369   (4,116)
Decrease in current and non current liabilities  (1,107)  (904)  (1,301)  (219)
Net cash provided by (used in) operating activities  4,989   (7,103)  13,731   (17,261)
           
Cash flows from investing activities:        
Purchase of property and equipment  (1,452)  (861)  (5,024)  (2,740)
Proceeds from short term deposits  2,159   -   -   - 
Net cash used in investing activities  707   (861)  (5,024)  (2,740)
          
Cash flows from financing activities:        
Dividend payment  -   -   (35,003)  - 
Repayment of long-term loans  -   -   (4,000)  (4,096)
Net cash used in financing activities  -   -   (39,003)  (4,096)
          
Effect of exchange rate changes on cash, cash equivalents and restricted cash  (91)  (91)  (252)  (630)
          
Increase (decrease) in cash, cash equivalents and restricted cash  5,605   (8,055)  (30,548)  (24,727)
          
Cash, cash equivalents and restricted cash at the beginning of the period  79,805   85,297   115,958   101,969 
          
Cash, cash equivalents and restricted cash at the end of the period $ 85,410  $ 77,242  $ 85,410  $ 77,242