Gilat Reports Strong Results in Second Quarter 2021

PETAH TIKVA, Israel, Aug. 10, 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 second quarter of 2021.

Second Quarter Financial Highlights

  • Revenues of $56.9 million, a 49% increase from $38.3 million in Q2 2020 and up 27% from $44.7 million in the previous quarter.
  • GAAP operating loss of $0.3 million, an improvement compared with an operating loss of $3.5 million in Q2 2020 and an operating loss of $3.7 million in Q1 2021.
  • Non-GAAP operating income of $0.2 million, compared with an operating loss of $2.6 million in Q2 2020 and an operating loss of $3.8 million in the previous quarter.
  • GAAP net loss of $0.1 million, or zero per share, compared with a net loss of $4.2 million, or a loss of $0.08 per share in Q2 2020 and a net loss of $5.1 million, or a loss of $0.09 per share in the previous quarter.
  • Non-GAAP net income of $0.4 million, which is $0.01 per share, compared with a net loss of $3.3 million, or a loss of $0.06 per share in Q2 2020, and compared with a net loss of $5.2 million, or a loss of $0.09 per share, in the previous quarter.
  • Adjusted EBITDA of $2.5 million compared with adjusted EBITDA of $0.1 million in Q2 2020; and an adjusted EBITDA loss of $1.4 million in the previous quarter.

Management Commentary

Adi Sfadia, Gilat's CEO, commented: “I am very pleased with the improvement in our second quarter results which showed very strong revenue growth and a return to Non-GAAP profitability.

"We are experiencing strong business momentum in nearly all our end markets and have secured several significant awards. In our Mobility segment we solidified our leadership position in maritime with a multi-million-dollar award from SES, and our leading position in NGSO with orders for more than $15 million from a leading satellite operator for support of a Low Earth Orbit Constellation. Very importantly, we are most pleased with the rapid growth in our Defense segment in which we secured deals for over $10 million in Asia, Latin America and the US.

"Further to the many opportunities we see ahead of us, we continue investing heavily in our R&D efforts in order to capture these opportunities and accelerate our future growth. Given the improving momentum and strong backlog, we expect to continue with our high revenue and profitability growth through the second half of 2021. We expect this growth to increase even further in 2022, as the inflight connectivity sector recovers, in addition to continued growth expected from the Maritime, Cellular Backhaul, NGSO and Defense market segments, as well as our operations in Peru.”

Key Recent Announcements

  • Tier-1 US Terminal Provider Awards Gilat over $5M for Solid State Amplifiers Powering Militaries Worldwide
  • Gilat’s Global Mobility Platform Selected by SES in Multi-Million Dollar Order
  • Gilat Receives Multi-Million Dollar Award from US Army to Supply High Performance BUCs for Tactical Communications
  • Gilat Signed a Strategic Agreement Estimated at Over $5 Million with Pacific Dataport for Delivery of Ubiquitous Broadband Coverage in Alaska
  • Gilat Received $2 Million in Orders for Support of Low Earth Orbit Constellation
  • Gilat Awarded Multi-Million Dollar Contract to Provide Satellite Communication Equipment for Defense Forces in Asia
  • Gilat Awarded $9 Million in Orders for Support of Low Earth Orbit Constellation
  • Gilat Awarded Multiple Projects for Armed Forces in Latin America
  • Gilat Awarded Contract to Supply Satellite Communication Equipment for Military Usage
  • Gilat Awarded $13M Contract by Pronatel for Delivery of Internet Services to Hundreds of Sites in Peru
  • Gilat Extends Multi-Million Dollar IoT Project in Latin America
  • Gilat Awarded Over $4 Million in Orders for Support of Low Earth Orbit Constellation
  • Telefonica Global Solutions (TGS) Selects Gilat to Equip Strategic Teleport in Arica, Chile

Conference Call Details

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

Date:Tuesday, August 10, 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/gilatq2-2021

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
+1 646 688 3559


        
GILAT SATELLITE NETWORKS LTD.       
CONSOLIDATED STATEMENTS OF OPERATIONS       
U.S. dollars in thousands (except share and per share data)       
   Six months ended
  Three months ended
   June, 30
  June, 30
   2021   2020   2021   2020 
  Unaudited Unaudited
         
Revenues$101,636  $85,988  $56,923  $38,315 
Cost of revenues 72,564   67,514   40,208   28,727 
         
Gross profit 29,072   18,474   16,715   9,588 
         
Research and development expenses 16,034   13,773   7,923   6,139 
Less - grants 374   472   190   200 
Research and development expenses, net 15,660   13,301   7,733   5,939 
Selling and marketing expenses 10,468   8,650   5,464   3,584 
General and administrative expenses 6,938   7,518   3,855   2,973 
Restructuring costs -   273   -   - 
Merger, acquisition and related litigation expense, net -   2,951   -   546 
         
Total operating expenses 33,066   32,693   17,052   13,042 
         
Operating loss (3,994)  (14,219)  (337)  (3,454)
         
Financial income (expenses), net (757)  (1,429)  435   (457)
         
Income (loss) before taxes on income (4,751)  (15,648)  98   (3,911)
         
Taxes on income 474   332   227   314 
         
Net loss$ (5,225) $ (15,980) $ (129) $ (4,225)
         
Basic and Diluted loss per share$ (0.09) $ (0.29) $ (0.00) $ (0.08)
         
Weighted average number of shares used in        
 computing earnings (loss) per share       
 Basic and Diluted 56,269,941   55,499,300   56,508,539   55,505,342 
         


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
  June 30, 2021 June 30, 2020
  GAAP Adjustments (1) Non-GAAP GAAP Adjustments (1) Non-GAAP
  Unaudited Unaudited
             
Gross profit$16,715   64  $16,779 $9,588   54  $9,642 
Operating expenses (income) 17,052   (456)  16,596  13,042   (831)  12,211 
Operating income (loss) (337)  520   183  (3,454)  885   (2,569)
Income (loss) before taxes on income 98   520   618  (3,911)  885   (3,026)
Net income (loss) (129)  520   391  (4,225)  885   (3,340)
             
Earnings (loss) per share (basic and diluted)$ (0.00) $0.01  $ 0.01 $ (0.08) $0.02  $ (0.06)
             
             
Weighted average number of shares used in           
   computing earnings per share           
     Basic 56,508,539     56,508,539  55,505,342     55,505,342 
     Diluted 56,508,539     57,328,088  55,505,342     55,505,342 
             
             
 (1) Adjustments reflect the effect of non-cash stock-based compensation as per ASC 718, amortization of intangible assets related to shares acquisition transactions and merger and acquisition and related litigation, net.
                 
             
  Three months ended Three months ended
  June 30, 2021 June 30, 2020
    Unaudited     Unaudited  
             
GAAP net loss  $(129)     $(4,225)  
             
Gross profit           
Non-cash stock-based compensation expenses   59       49   
Amortization of intangible assets related to acquisition transactions   5       5   
     64       54   
Operating expenses           
Non-cash stock-based compensation expenses   406       235   
Amortization of intangible assets related to acquisition transactions   50       50   
Merger and acquisition and related litigation, net   -       546   
     456       831   
             
Non-GAAP net income (loss)  $391      $(3,340)  
             


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)           
  Six months ended Six months ended
  June 30, 2021 June 30, 2020
  GAAP Adjustments (1) Non-GAAP GAAP Adjustments (1) Non-GAAP
  Unaudited Unaudited
             
Gross profit$29,072   130  $29,202  $18,474   116  $18,590 
Operating expenses (income) 33,066   (287)  32,779   32,693   (3,937)  28,756 
Operating income (loss) (3,994)  417   (3,577)  (14,219)  4,053   (10,166)
Income (loss) before taxes on income (4,751)  417   (4,334)  (15,648)  4,053   (11,595)
Net income (loss) (5,225)  417   (4,808)  (15,980)  4,053   (11,927)
             
Earnings (loss) per share (basic and diluted)$ (0.09) $0.01  $ (0.08) $ (0.29) $0.08  $ (0.21)
             
             
Weighted average number of shares used in           
   computing earnings per share           
     Basic and Diluted 56,269,941     56,269,941   55,499,300     55,499,300 
             
             
(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 costs.    
              
             
  Six months ended Six months ended
  June 30, 2021 June 30, 2020
    Unaudited     Unaudited  
             
GAAP net loss  $(5,225)     $(15,980)  
             
Gross profit           
Non-cash stock-based compensation expenses   120       106   
Amortization of intangible assets related to acquisition transactions   10       10   
     130       116   
Operating expenses           
Non-cash stock-based compensation expenses   186       601   
Amortization of intangible assets related to acquisition transactions   101       101   
Trade secrets and other litigation expenses   -       11   
Merger, acquisition and related litigation expense, net   -       2,951   
Restructuring costs   -       273   
     287       3,937   
             
Non-GAAP net loss  $(4,808)     $(11,927)  
             


GILAT SATELLITE NETWORKS LTD.       
SUPPLEMENTAL INFORMATION       
U.S. dollars in thousands       
        
        
ADJUSTED EBITDA:       
        
  Six months ended
  Three months ended
  June 30,
  June 30,
  2021   2020   2021   2020 
    
 Unaudited Unaudited
        
GAAP operating loss$(3,994) $(14,219) $(337) $(3,454)
Add:       
Non-cash stock-based compensation expenses 306   707   465   284 
Trade secrets and other litigation expenses -   11   -   - 
Restructuring and re-organization costs -   273   -   - 
Merger, acquisition and related litigation expense, net -   2,951   -   546 
Depreciation and amortization (*) 4,758   5,382   2,373   2,718 
        
Adjusted EBITDA$ 1,070  $ (4,895) $ 2,501  $ 94 
        
(*) Including amortization of lease incentive       
        
SEGMENT REVENUE:       
        
  Six months ended   Three months ended 
  June 30,   June 30, 
  2021   2020   2021   2020 
    
 Unaudited Unaudited
        
Fixed Networks$56,127  $44,790  $30,825  $21,779 
Mobility Solutions 31,002   33,207   19,923   14,006 
Terrestrial Infrastructure Projects 14,507   7,991   6,175   2,530 
        
Total revenue$ 101,636  $ 85,988  $ 56,923  $ 38,315 
        


     
 GILAT SATELLITE NETWORKS LTD.   
 CONSOLIDATED BALANCE SHEETS   
 U.S. dollars in thousands   
     
  June 30, December 31,
   2021   2020 
  Unaudited Audited
     
 ASSETS   
     
 CURRENT ASSETS:   
 Cash and cash equivalents$57,882  $88,754 
 Short-term deposits 2,159   - 
 Restricted cash 21,910   27,162 
 Trade receivables, net 33,009   27,976 
 Contract assets 23,830   41,573 
 Inventories 29,644   31,304 
 Other current assets 22,508   16,637 
     
    Total current assets 190,942   233,406 
     
 LONG-TERM ASSETS:   
 Restricted cash 13   42 
 Severance pay funds 6,616   6,665 
 Tax assets 2,489   2,482 
 Deferred taxes 16,621   16,813 
 Operating lease right-of-use assets 4,338   4,879 
 Other long term receivables 8,691   7,797 
     
 Total long-term assets 38,768   38,678 
     
 PROPERTY AND EQUIPMENT, NET 76,584   77,172 
     
 INTANGIBLE ASSETS, NET 861   1,082 
     
 GOODWILL 43,468   43,468 
     
 TOTAL ASSETS$350,623  $393,806 
     
     
     
 GILAT SATELLITE NETWORKS LTD.   
 CONSOLIDATED BALANCE SHEETS (Cont.)   
 U.S. dollars in thousands   
     
  June 30, December 31,
   2021   2020 
  Unaudited Audited
     
 LIABILITIES AND SHAREHOLDERS' EQUITY   
     
 CURRENT LIABILITIES:   
 Current maturities of long-term loans$-  $4,000 
 Trade payables 19,705   20,487 
 Accrued expenses 48,359   46,387 
 Advances from customers and deferred revenues 23,881   26,244 
 Operating lease liabilities 1,800   1,911 
 Dividend payable -   35,003 
 Other current liabilities 14,319   13,322 
     
    Total current liabilities 108,064   147,354 
     
 LONG-TERM LIABILITIES:   
 Accrued severance pay 6,959   7,136 
 Long-term advances from customers 4,184   1,890 
 Operating lease liabilities 2,584   2,985 
 Other long-term liabilities 118   631 
     
    Total long-term liabilities 13,845   12,642 
     
 SHAREHOLDERS' EQUITY:   
 Share capital - ordinary shares of NIS 0.2 par value 2,705   2,647 
 Additional paid-in capital 928,874   928,626 
 Accumulated other comprehensive loss (6,194)  (6,017)
 Accumulated deficit (696,671)  (691,446)
     
 Total shareholders' equity 228,714   233,810 
     
 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$350,623  $393,806 
     


GILAT SATELLITE NETWORKS LTD.       
CONSOLIDATED STATEMENTS OF CASH FLOWS       
U.S. dollars in thousands       
        
  Six months ended
  Three months ended
  June 30,
  June 30,
  2021   2020   2021   2020 
    
 Unaudited Unaudited
Cash flows from operating activities:       
Net loss$(5,225) $(15,980) $(129) $(4,225)
Adjustments required to reconcile net income        
 to net cash provided by operating activities:       
Depreciation and amortization 4,646   5,271   2,316   2,667 
Capital loss from disposal of property and equipment -   23   -   56 
Stock-based compensation of options 306   707   465   284 
Accrued severance pay, net (128)  26   (118)  (17)
Deferred taxes, net 185   140   (333)  (494)
Decrease (increase) in trade receivables, net (7,068)  18,364   (5,135)  4,757 
Decrease (increase) in contract assets 17,743   (8,362)  22,230   (3,511)
Decrease (increase) in other assets (including short-term, long-term and deferred charges) (4,009)  6,710   (3,789)  5,037 
Decrease (increase) in inventories 1,774   (5,698)  3,986   937 
Decrease in trade payables (790)  (510)  (1,740)  (2,885)
Increase (decrease) in accrued expenses 1,693   (5,809)  724   (4,157)
Decrease in advance from customers and deferred revenue (191)  (5,725)  (7,879)  (2,898)
Increase (decrease) in current and non current liabilities (194)  685   (2,197)  (2,126)
Net cash provided by (used in) operating activities 8,742   (10,158)  8,401   (6,575)
        
Cash flows from investing activities:       
Purchase of property and equipment (3,572)  (1,879)  (2,089)  (928)
Investment in short term deposits (2,159)  -   (2,159)  - 
Net cash used in investing activities (5,731)  (1,879)  (4,248)  (928)
        
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 (161)  (539)  93   156 
        
Increase (decrease) in cash, cash equivalents and restricted cash (36,153)  (16,672)  4,246   (7,347)
        
Cash, cash equivalents and restricted cash at the beginning of the period 115,958   101,969   75,559   92,644 
        
Cash, cash equivalents and restricted cash at the end of the period$ 79,805  $ 85,297  $ 79,805  $ 85,297 
        

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