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home / news releases / GILT - Gilat Reports Strong Second Quarter 2022 Results

GILT - Gilat Reports Strong Second Quarter 2022 Results

Gilat Satellite Networks Ltd.

R evenue of $55.5 m illion, o perating p rofit $1.5 million and Adjusted EBITDA of $5.3 m illion ; R eiterates 2022 guidance

PETAH TIKVA, Israel, Aug. 09, 2022 (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 ended June 30, 2022.

Second Quarter 2022 Financial Highlights

  • Revenues of $55.5 million,up 1.2% compared with Q2 of last year;

  • GAAP o perating i ncome of $1.5 million versus operating loss of $0.4 million in Q2 last year;

  • Non-GAAP o perating i ncome of $2.4 million versus Non-GAAP operating income of $0.1 million in Q2 last year;

  • GAAP n et i ncome of $0.5 million versus loss of $0.2 million in Q2 last year;

  • Non-GAAP n et i ncome of $1.4 million versus Non-GAAP income of $0.3 million in Q2 last year;

  • Adjusted EBITDA of $5.3 million versus Adjusted EBITDA of $2.4 million in Q2 last year;

  • Reiterate s and on - track with 2022 financial guidance ;

Forward-Looking Expectations

The Company reiterates its 2022 guidance issued in 2022, of revenues between $245 to $265 million, representing year-over-year growth of between 14% and 23%, GAAP operating income of between $5 to $9 million and Adjusted EBITDA of between $20 to $24 million, representing year-over-year growth of Adjusted EBITDA between 30% to 56%.

Management Commentary

Adi Sfadia, Gilat's CEO, commented: "We are pleased with our strong results, especially with the solid improvement in our profitability. We continue to successfully capitalize on the opportunities in our pipeline, and we see increasing growth potential in our end-markets for the coming years. Looking out to the rest of the year, we feel increasingly comfortable and remain on target to meet our goals.

This was an exceptional quarter with significant multimillion dollar orders for Gilat's next generation platform, SkyEdge IV. We expanded the global strategic relationships with our partners, the satellite operators, SES and Intelsat, and are competing on important GEO VHTS opportunities in our pipeline with additional major satellite operators. Furthermore, our SSPA business for this new and exciting market is progressing as planned, and as such, we believe we are well positioned to seize opportunities in the multibillion market of the next era of satellite communication.

We received more than $10 million in new Cellular Backhaul orders this quarter as we continue to expand our global leadership. We are encouraged with the progress in our strategic markets of Inflight Connectivity and Maritime as well as with our growing business in Defense and Enterprise, and we see a growing set of additional opportunities."

Mr. Sfadia concluded , “Given our ongoing strong performance, we reiterate our 2022 guidance and expect a year of solid growth in revenue and improved profitability."

Key Recent Announcements

  • Internet Para Todos Expands Services Contract with Gilat
  • Gilat Signs Agreement to Enable a Central Asian Government to Provide Digital Services over Satellite
  • Gilat and Intelsat Expand Their Strategic In-Flight Connectivity Partnership in Japan
  • Tier-1 MNO Awards Multimillion-Dollar Order to Gilat for 4G Cellular Backhaul Network Expansion in Latin America
  • Gilat Awarded Order of Over $7M from Tier-1 Mobile Network Carrier in APAC for 4G Cellular Backhaul Network Expansion
  • Gilat Awarded Follow-On Orders to Expand Defense Force SATCOM Network in an Asian Nation
  • Gilat Receives Over $8 Million Follow-On Order for Support of Low Earth Orbit Constellation

Conference C all D etails

Gilat’s management will discuss its second quarter 2022 results and business achievements and participate in a question and answer session:

Date:              Tuesday, August 9, 2022
Start:              09:30 AM EDT / 16:30 IDT
Dial-in:            US: 1-866-744-5399
International: +972-3-918-0609

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/gilatq2-2022

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), impairment of held for sale asset, and one-time changes of deferred tax assets.

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. 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
EK Global Investor Relations
gilat@ekgir.com
+1 212 378 8040

GILAT SATELLITE NETWORKS LTD.
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
U.S. dollars in thousands (except share and per share data)
Six months ended
Three months ended
June 30,
June 30,
2022
2021
2022
2021
As Restated (1)
As Restated (1)
Unaudited
Unaudited
Revenues
$
106,863
$
98,169
$
55,454
$
54,798
Cost of revenues
70,706
69,070
35,685
38,179
Gross profit
36,157
29,099
19,769
16,619
Research and development expenses, net
16,386
15,660
8,718
7,733
Selling and marketing expenses
10,310
10,468
4,960
5,464
General and administrative expenses
8,555
6,938
4,371
3,855
Impairment of held for sale asset
439
-
229
-
Total operating expenses
35,690
33,066
18,278
17,052
Operating income (loss)
467
(3,967
)
1,491
(433
)
Financial income (expenses), net
(1,663
)
(757
)
(468
)
435
Income (loss) before taxes on income
(1,196
)
(4,724
)
1,023
2
Taxes on income
832
474
517
227
Net income (loss)
$
(2,028
)
$
(5,198
)
$
506
$
(225
)
Earnings (loss) per share (basic and diluted)
$
(0.04
)
$
(0.09
)
$
0.01
$
(0.00
)
Weighted average number of shares used in
computing earning (loss) per share

Basic
56,574,296
56,269,941
56,597,523
56,508,539
Diluted
56,574,296
56,269,941
56,637,208
56,508,539
(1)  The Company restated its previously issued condensed interim consolidated financial statements for the three and six months ended June 30, 2021.
For additional information, see Item 5 of our 2021 Form 20-F and Notes 2 and 13 of our Condensed Interim Consolidated Financial Statements filed
with the U.S. Securities and Exchange Commission on May 16, 2022 and August 9, 2022, respectively.


GILAT SATELLITE NETWORKS LTD.
RECONCILIATION BETWEEN GAAP AND NON-GAAP CONSOLIDATED STATEMENTS OF INCOME (LOSS)
FOR COMPARATIVE PURPOSES
U.S. dollars in thousands (except share and per share data)
Three months ended
Three months ended
June 30, 2022
June 30, 2021
GAAP
Adjustments (*)
Non-GAAP
GAAP
Adjustments (*)
Non-GAAP
As Restated (1)
As Restated (1)
Unaudited
Unaudited
Gross profit
$
19,769
81
$
19,850
$
16,619
64
$
16,683
Operating expenses
18,278
(832
)
17,446
17,052
(456
)
16,596
Operating income (loss)
1,491
913
2,404
(433
)
520
87
Income before taxes on income
1,023
913
1,936
2
520
522
Net income (loss)
$
506
913
$
1,419
$
(225
)
520
$
295
Earnings (loss) per share (basic and diluted)
$
0.01
$
0.02
$
0.03
$
(0.00
)
$
0.01
$
0.01
Weighted average number of shares used in
computing earning (loss) per share
Basic
56,597,523
56,597,523
56,508,539
56,508,539
Diluted
56,637,208
56,773,970
56,508,539
57,328,088
(*) Adjustments reflect the effect of non-cash stock-based compensation as per ASC 718, amortization of intangible assets related to shares acquisition transactions and
impairment of held for sale asset.
Three months ended
Three months ended
June 30, 2022
June 30, 2021
As Restated (1)
Unaudited
Unaudited
GAAP net income (loss)
$
506
$
(225
)
Gross profit
Non-cash stock-based compensation expenses
75
59
Amortization of intangible assets related to acquisition transactions
55
5
130
64
Operating expenses
Non-cash stock-based compensation expenses
494
406
Amortization of intangible assets related to acquisition transactions
60
50
Impairment of held for sale asset
229
-
783
456
Non-GAAP net income
$
1,419
$
295
(1)  The Company restated its previously issued condensed interim consolidated financial statements for the three and six months ended June 30, 2021.
For additional information, see Item 5 of our 2021 Form 20-F and Notes 2 and 13 of our Condensed Interim Consolidated Financial Statements filed
with the U.S. Securities and Exchange Commission on May 16, 2022 and August 9, 2022, respectively.


GILAT SATELLITE NETWORKS LTD.
RECONCILIATION BETWEEN GAAP AND NON-GAAP CONSOLIDATED STATEMENTS OF INCOME (LOSS)
FOR COMPARATIVE PURPOSES
U.S. dollars in thousands (except share and per share data)
Six months ended
Six months ended
June 30, 2022
June 30, 2021
GAAP
Adjustments (*)
Non-GAAP
GAAP
Adjustments (*)
Non-GAAP
As Restated (1)
As Restated (1)
Unaudited
Unaudited
Gross profit
$
36,157
156
$
36,313
$
29,099
130
$
29,229
Operating expenses
35,690
(1,515
)
34,175
33,066
(287
)
32,779
Operating income (loss)
467
1,671
2,138
(3,967
)
417
(3,550
)
Income (loss) before taxes on income
(1,196
)
1,671
475
(4,724
)
417
(4,307
)
Net loss
(2,028
)
1,671
(357
)
(5,198
)
417
(4,781
)
Loss per share (basic and diluted)
$
(0.04
)
$
0.03
$
(0.01
)
$
(0.09
)
$
0.01
$
(0.08
)
Weighted average number of shares used in
computing loss per share
Basic
56,574,296
56,574,296
56,269,941
56,269,941
Diluted
56,574,296
56,574,296
56,269,941
56,269,941
(*) Adjustments reflect the effect of non-cash stock-based compensation as per ASC 718, amortization of intangible assets related to shares acquisition transactions and
impairment of held for sale asset.
Six months ended
Six months ended
June 30, 2022
June 30, 2021
As Restated (1)
Unaudited
Unaudited
GAAP net loss
$
(2,028
)
$
(5,198
)
Gross profit
Non-cash stock-based compensation expenses
145
120
Amortization of intangible assets related to acquisition transactions
60
10
205
130
Operating expenses
Non-cash stock-based compensation expenses
916
186
Amortization of intangible assets related to acquisition transactions
111
101
Impairment of held for sale asset
439
-
1466
287
Non-GAAP net loss
$
(357
)
$
(4,781
)
(1)  The Company restated its previously issued condensed interim consolidated financial statements for the three and six months ended June 30, 2021.
For additional information, see Item 5 of our 2021 Form 20-F and Notes 2 and 13 of our Condensed Interim Consolidated Financial Statements filed
with the U.S. Securities and Exchange Commission on May 16, 2022 and August 9, 2022, respectively.


GILAT SATELLITE NETWORKS LTD.
SUPPLEMENTAL INFORMATION
U.S. dollars in thousands
ADJUSTED EBITDA:
Six months ended
Three months ended
June 30,
June 30,
2022
2021
2022
2021
As Restated (1)
As Restated (1)
Unaudited
Unaudited
GAAP net income (loss)
$
(2,028
)
$
(5,198
)
$
506
$
(225
)
Adjustments:
Financial expenses (income), net
1,663
757
468
(435
)
Taxes on income
832
474
517
227
Non-cash stock-based compensation expenses
1,061
306
569
465
Impairment of held for sale asset
439
-
229
-
Other
60
-
60
-
Depreciation and amortization (*)
5,792
4,758
2,941
2,373
Adjusted EBITDA
$
7,819
$
1,097
$
5,290
$
2,405
(*) Including amortization of lease incentive
SEGMENT REVENUE:
Six months ended
Three months ended
June 30,
June 30,
2022
2021
2022
2021
As Restated (1)
As Restated (1)
Unaudited
Unaudited
Satellite Networks
$
51,627
$
59,975
$
26,857
$
34,351
Integrated Solutions
29,397
18,836
15,691
12,127
Network Infrastructure and Services
25,839
19,358
12,906
8,320
Total revenues
$
106,863
$
98,169
$
55,454
$
54,798
(1) The Company restated its previously issued condensed interim consolidated financial statements for the three and six months ended June 30, 2021.
For additional information, see Item 5 of our 2021 Form 20-F and Notes 2 and 13 of our Condensed Interim Consolidated Financial Statements filed
with the U.S. Securities and Exchange Commission on May 16, 2022 and August 9, 2022, respectively.


GILAT SATELLITE NETWORKS LTD.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
June 30,
December 31,
2022
2021
Unaudited
Audited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
70,133
$
81,859
Short-term deposits
-
2,159
Restricted cash
1,313
2,592
Trade receivables, net
51,303
39,161
Contract assets
29,310
26,008
Inventories
32,156
28,432
Other current assets
22,458
14,607
Held for sale asset
4,276
4,587
Total current assets
210,949
199,405
LONG-TERM ASSETS:
Restricted cash
12
12
Long- term contract assets
11,845
12,539
Severance pay funds
5,937
6,795
Deferred taxes
15,885
17,551
Operating lease right-of-use assets
3,845
4,478
Other long term assets
11,225
10,456
Total long-term assets
48,749
51,831
PROPERTY AND EQUIPMENT, NET
72,410
72,391
INTANGIBLE ASSETS, NET
419
640
GOODWILL
43,468
43,468
TOTAL ASSETS
$
375,995
$
367,735
GILAT SATELLITE NETWORKS LTD.
CONSOLIDATED BALANCE SHEETS (Cont.)
U.S. dollars in thousands
June 30,
December 31,
2022
2021
Unaudited
Audited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables
$
24,010
$
19,776
Accrued expenses
47,654
49,202
Advances from customers and deferred revenues
31,932
24,373
Operating lease liabilities
1,747
1,818
Other current liabilities
15,458
13,339
Total current liabilities
120,801
108,508
LONG-TERM LIABILITIES:
Accrued severance pay
6,548
7,292
Long-term advances from customers
722
1,209
Operating lease liabilities
2,056
2,283
Other long-term liabilities
132
120
Total long-term liabilities
9,458
10,904
SHAREHOLDERS' EQUITY:
Share capital - ordinary shares of NIS 0.2 par value
2,711
2,706
Additional paid-in capital
930,927
929,871
Accumulated other comprehensive loss
(7,977
)
(6,357
)
Accumulated deficit
(679,925
)
(677,897
)
Total shareholders' equity
245,736
248,323
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
375,995
$
367,735


GILAT SATELLITE NETWORKS LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Six months ended
Three months ended
June 30,
June 30,
2022
2021
2022
2021
As Restated (1)
As Restated (1)
Unaudited
Unaudited
Cash flows from operating activities:
Net income (loss)
$
(2,028
)
$
(5,198
)
$
506
$
(225
)
Adjustments required to reconcile net loss
to net cash provided by (used in) operating activities:
Depreciation and amortization
5,683
4,646
2,887
2,316
Impairment of held for sale asset
439
-
229
-
Stock-based compensation of options
1,061
306
569
465
Accrued severance pay, net
114
(128
)
177
(118
)
Deferred taxes, net
1,664
185
1,358
(333
)
Increase in trade receivables, net
(11,883
)
(7,357
)
(5,471
)
(5,424
)
Decrease (increase) in contract assets
(2,608
)
21,647
(599
)
24,826
Increase in other assets (including short-term, long-term
and deferred charges)
(7,763
)
(4,009
)
(4,047
)
(3,789
)
Decrease (increase) in inventories
(4,075
)
1,774
(1,731
)
3,986
Increase (decrease) in trade payables
4,205
(790
)
2,533
(1,740
)
Decrease in accrued expenses
(1,690
)
(1,802
)
(2,442
)
(1,304
)
Increase (decrease) in advance from customers and deferred revenue
7,010
(338
)
4,700
(8,062
)
Decrease in other liabilities
(810
)
(194
)
(1,975
)
(2,197
)
Net cash provided by (used in) operating activities
(10,681
)
8,742
(3,306
)
8,401
Cash flows from investing activities:
Purchase of property and equipment
(4,515
)
(3,572
)
(2,314
)
(2,089
)
Repayment of (investment in) short term deposits
2,159
(2,159
)
2,159
(2,159
)
Net cash used in investing activities
(2,356
)
(5,731
)
(155
)
(4,248
)
Cash flows from financing activities:
Dividend payment
-
(35,003
)
-
-
Repayment of long-term loan
-
(4,000
)
-
-
Net cash used in financing activities
-
(39,003
)
-
-
Effect of exchange rate changes on cash, cash equivalents and restricted cash
32
(161
)
(221
)
93
Increase (decrease) in cash, cash equivalents and restricted cash
(13,005
)
(36,153
)
(3,682
)
4,246
Cash, cash equivalents and restricted cash at the beginning of the period
84,463
115,958
75,140
75,559
Cash, cash equivalents and restricted cash at the end of the period
$
71,458
$
79,805
$
71,458
$
79,805
(1)     The Company restated its previously issued condensed interim consolidated financial statements for the three and six months ended June 30, 2021.
For additional information, see Item 5 of our 2021 Form 20-F and Notes 2 and 13 of our Condensed Interim Consolidated Financial Statements filed
with the U.S. Securities and Exchange Commission on May 16, 2022 and August 9, 2022, respectively.

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