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home / news releases / GILT - Gilat Reports Strong Revenue & Profitability Growth in Third Quarter 2021

GILT - Gilat Reports Strong Revenue & Profitability Growth in Third Quarter 2021

Gilat Satellite Networks Ltd.

Revenue up 3 4 % year-over-year to $49.9 M , 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 Q uarter Financial Highlights

  • R evenues 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;
  • N on -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;
  • N on-GAAP net income of $ 0. 7 millio n , 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;
  • A djusted 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."

C o n tinued 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 C all D etails

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://veida n .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 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. 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


Stock Information
Company Name: Gilat Satellite Networks Ltd.
Stock Symbol: GILT
Market: NASDAQ
Website: gilat.com
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