PETAH TIKVA, Israel, May 04, 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 first quarter of 2021.
First Quarter Financial Highlights
Management Commentary
Adi Sfadia, Gilat’s CEO, commented: �We continue to see strong momentum across all our business units, with the exception of the IFC market segment, which is yet to show a recovery. We believe that this growth trend will continue during 2021 and expect to show sequential quarterly growth throughout the year and increasing profitability. Looking further out, 2022 is expected to show significant improvement both in revenue and profitability with the pick-up in IFC, Cellular Backhaul and NGSO.
“As a testament to the strong momentum we are seeing, I am very pleased to report that we entered a mega strategic agreement valued at tens of millions of dollars, including a potential for significant project expansions, with a large government corporation in Asia Pacific. I believe that we will see additional large strategic transactions in the near future.
In light of the many opportunities we see ahead of us, we are investing significant R&D efforts in order to capture these opportunities and accelerate our future growth. We expect that NGSO, IFC and Cellular Backhaul will be the main market segments that will drive this growth during 2021 and beyond, and we also see strong potential for the defense business to support our growth in a more meaningful way than it has done in the past.
“We made positive progress during the first quarter in our strategic growth areas of NGSO and Cellular Backhaul. We received additional orders for a LEO constellation, where our gateway Solid State Power Amplifiers (SSPAs) have been selected as the solution of choice. On the Cellular Backhaul front, we received a multi-million-dollar expansion and follow-on orders from Tier-1 mobile operators around the globe including in Japan, Australia, Europe and South America.
“In addition, we have made great progress in Peru with the government’s acceptance for the operational phase in the Cusco region, bringing us significantly closer to our goal of recurring revenue of over $50M in Peru.”
Key Recent Announcements
Conference Call Details
Gilats management will discuss its first quarter 2021 results and business achievements and participate in a questions and answers session:
Date: | Tuesday, May 4, 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: www.veidan-stream.com/gilatq1-2021.html
The webcast will also be archived for a period of 30 days on the Companys 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 Companys GAAP results are made with the intent of providing both management and investors a more complete understanding of the Companys 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 Companys performance to that of prior periods and evaluate the Companys financial and operating results on a consistent basis from period to period. The Company also believes this measure, when viewed in combination with the Companys 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 Gilats 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).
Gilats 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, 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) | |||||||
Three months ended | |||||||
March 31, | |||||||
2021 | 2020 | ||||||
Unaudited | |||||||
Revenues | $ | 44,713 | $ | 47,673 | |||
Cost of revenues | 32,356 | 38,787 | |||||
Gross profit | 12,357 | 8,886 | |||||
Research and development expenses | 8,111 | 7,634 | |||||
Less – grants | 184 | 272 | |||||
Research and development expenses, net | 7,927 | 7,362 | |||||
Selling and marketing expenses | 5,004 | 5,066 | |||||
General and administrative expenses | 3,083 | 4,818 | |||||
Merger, acquisition and related litigation expenses | – | 2,405 | |||||
Total operating expenses | 16,014 | 19,651 | |||||
Operating loss | (3,657 | ) | (10,765 | ) | |||
Financial expenses, net | (1,192 | ) | (972 | ) | |||
Loss before taxes on income | (4,849 | ) | (11,737 | ) | |||
Taxes on income | 247 | 18 | |||||
Net loss | $ | (5,096 | ) | $ | (11,755 | ) | |
Basic loss per share | $ | (0.09 | ) | $ | (0.21 | ) | |
Diluted loss per share | $ | (0.09 | ) | $ | (0.21 | ) | |
Weighted average number of shares used in computing loss per share | |||||||
Basic | 56,031,343 | 55,493,258 | |||||
Diluted | 56,031,343 | 55,493,258 | |||||
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 | |||||||||||||||||||||||
March 31, 2021 | March 31, 2020 | |||||||||||||||||||||||
GAAP | Adjustments | Non-GAAP | GAAP | Adjustments | Non-GAAP | |||||||||||||||||||
Unaudited | Unaudited | |||||||||||||||||||||||
Gross profit | $ | 12,357 | 66 | $ | 12,423 | $ | 8,886 | 62 | $ | 8,948 | ||||||||||||||
Operating expenses | 16,014 | 169 | 16,183 | 19,651 | (3,106 | ) | 16,545 | |||||||||||||||||
Operating loss | (3,657 | ) | (103 | ) | (3,760 | ) | (10,765 | ) | 3,168 | (7,597 | ) | |||||||||||||
Loss before taxes on income | (4,849 | ) | (103 | ) | (4,952 | ) | (11,737 | ) | 3,168 | (8,569 | ) | |||||||||||||
Net loss | (5,096 | ) | (103 | ) | (5,199 | ) | (11,755 | ) | 3,168 | (8,587 | ) | |||||||||||||
Basic loss per share | $ | (0.09 | ) | $ | – | $ | (0.09 | ) | $ | (0.21 | ) | $ | 0.06 | $ | (0.15 | ) | ||||||||
Diluted loss per share | $ | (0.09 | ) | $ | – | $ | (0.09 | ) | $ | (0.21 | ) | $ | 0.06 | $ | (0.15 | ) | ||||||||
Weighted average number of shares used in computing loss per share | ||||||||||||||||||||||||
Basic | 56,031,343 | 56,031,343 | 55,493,258 | 55,493,258 | ||||||||||||||||||||
Diluted | 56,031,343 | 56,031,343 | 55,493,258 | 55,493,258 | ||||||||||||||||||||
Three months ended | Three months ended | |||||||||||||||||||||||
March 31, 2021 | March 31, 2020 | |||||||||||||||||||||||
Unaudited | Unaudited | |||||||||||||||||||||||
GAAP net loss | $ | (5,096 | ) | $ | (11,755 | ) | ||||||||||||||||||
Gross profit | ||||||||||||||||||||||||
Non-cash stock-based compensation expenses | 61 | 57 | ||||||||||||||||||||||
Amortization of intangible assets related to acquisition transactions | 5 | 5 | ||||||||||||||||||||||
66 | 62 | |||||||||||||||||||||||
Operating expenses (income) | ||||||||||||||||||||||||
Non-cash stock-based compensation expenses | (220 | ) | 366 | |||||||||||||||||||||
Amortization of intangible assets related to acquisition transactions | 51 | 51 | ||||||||||||||||||||||
Trade secrets and other litigation expenses | – | 11 | ||||||||||||||||||||||
Merger, acquisition and related litigation expenses | – | 2,405 | ||||||||||||||||||||||
Restructuring and re-organization costs | – | 273 | ||||||||||||||||||||||
(169 | ) | 3,106 | ||||||||||||||||||||||
Non-GAAP net loss | $ | (5,199 | ) | $ | (8,587 | ) | ||||||||||||||||||
GILAT SATELLITE NETWORKS LTD. | |||||||
SUPPLEMENTAL INFORMATION | |||||||
U.S. dollars in thousands | |||||||
ADJUSTED EBITDA: | |||||||
Three months ended | |||||||
March 31, | |||||||
2021 | 2020 | ||||||
Unaudited | |||||||
GAAP operating loss | $ | (3,657 | ) | $ | (10,765 | ) | |
Add (deduct): | |||||||
Non-cash stock-based compensation expenses | (159 | ) | 423 | ||||
Trade secrets and other litigation expenses | – | 11 | |||||
Restructuring and re-organization costs | – | 273 | |||||
Merger, acquisition and related litigation expenses | – | 2,405 | |||||
Depreciation and amortization (*) | 2,385 | 2,664 | |||||
Adjusted EBITDA | $ | (1,431 | ) | $ | (4,989 | ) | |
(*) Including amortization of lease incentive | |||||||
SEGMENT REVENUE: | |||||||
Three months ended | |||||||
March 31, | |||||||
2021 | 2020 | ||||||
Unaudited | |||||||
Fixed Networks | $ | 25,302 | $ | 23,011 | |||
Mobility Solutions | 11,079 | 19,201 | |||||
Terrestrial Infrastructure Projects | 8,332 | 5,461 | |||||
Total revenue | $ | 44,713 | $ | 47,673 | |||
GILAT SATELLITE NETWORKS LTD. | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
U.S. dollars in thousands | |||||||
March 31, | December 31, | ||||||
2021 | 2020 | ||||||
Unaudited | Audited | ||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 48,905 | $ | 88,754 | |||
Restricted cash | 26,642 | 27,162 | |||||
Trade receivables, net | 27,820 | 27,976 | |||||
Contract assets | 46,060 | 41,573 | |||||
Inventories | 33,339 | 31,304 | |||||
Other current assets | 18,832 | 16,637 | |||||
Total current assets | 201,598 | 233,406 | |||||
LONG-TERM ASSETS: | |||||||
Long-term restricted cash | 12 | 42 | |||||
Severance pay funds | 6,414 | 6,665 | |||||
Deferred taxes | 18,778 | 19,295 | |||||
Operating lease right-of-use assets | 4,478 | 4,879 | |||||
Other long term receivables | 8,339 | 7,797 | |||||
Total long-term assets | 38,021 | 38,678 | |||||
PROPERTY AND EQUIPMENT, NET | 76,612 | 77,172 | |||||
INTANGIBLE ASSETS, NET | 971 | 1,082 | |||||
GOODWILL | 43,468 | 43,468 | |||||
TOTAL ASSETS | $ | 360,670 | $ | 393,806 | |||
GILAT SATELLITE NETWORKS LTD. | |||||||
CONSOLIDATED BALANCE SHEETS (Cont.) | |||||||
U.S. dollars in thousands | |||||||
March 31, | December 31, | ||||||
2021 | 2020 | ||||||
Unaudited | Audited | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
CURRENT LIABILITIES: | |||||||
Current maturities of long-term loans | $ | – | $ | 4,000 | |||
Trade payables | 21,428 | 20,487 | |||||
Accrued expenses | 47,465 | 46,387 | |||||
Advances from customers and deferred revenues | 35,404 | 26,244 | |||||
Operating lease liabilities | 1,678 | 1,911 | |||||
Dividend payable | – | 35,003 | |||||
Other current liabilities | 16,161 | 13,322 | |||||
Total current liabilities | 122,136 | 147,354 | |||||
LONG-TERM LIABILITIES: | |||||||
Accrued severance pay | 6,875 | 7,136 | |||||
Long-term advances from customers | 307 | 1,890 | |||||
Operating lease liabilities | 2,847 | 2,985 | |||||
Other long-term liabilities | 396 | 631 | |||||
Total long-term liabilities | 10,425 | 12,642 | |||||
SHAREHOLDERS’ EQUITY: | |||||||
Share capital – ordinary shares of NIS 0.2 par value | 2,704 | 2,647 | |||||
Additional paid-in capital | 928,410 | 928,626 | |||||
Accumulated other comprehensive loss | (6,463 | ) | (6,017 | ) | |||
Accumulated deficit | (696,542 | ) | (691,446 | ) | |||
Total shareholders’ equity | 228,109 | 233,810 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 360,670 | $ | 393,806 | |||
GILAT SATELLITE NETWORKS LTD. | |||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
U.S. dollars in thousands | |||||||
Three months ended | |||||||
March 31, | |||||||
2021 | 2020 | ||||||
Unaudited | |||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (5,096 | ) | $ | (11,755 | ) | |
Adjustments required to reconcile net income | |||||||
to net cash provided by (used in) operating activities: | |||||||
Depreciation and amortization | 2,330 | 2,604 | |||||
Capital loss from disposal of property and equipment | – | (33 | ) | ||||
Stock-based compensation of options | (159 | ) | 423 | ||||
Accrued severance pay, net | (10 | ) | 43 | ||||
Deferred income taxes, net | 518 | 634 | |||||
Decrease (increase) in trade receivables, net | (1,933 | ) | 13,607 | ||||
Increase in contract assets | (4,487 | ) | (4,851 | ) | |||
Decrease (increase) in other assets (including short-term, long-term | |||||||
and deferred charges) | (220 | ) | 1,673 | ||||
Increase in inventories | (2,212 | ) | (6,635 | ) | |||
Increase in trade payables | 950 | 2,375 | |||||
Increase (decrease) in accrued expenses | 969 | (1,652 | ) | ||||
Increase (decrease) in advance from customer and deferred revenues | 7,688 | (2,827 | ) | ||||
Increase in current and non current liabilities | 2,003 | 2,811 | |||||
Net cash provided by (used in) operating activities | 341 | (3,583 | ) | ||||
Cash flows from investing activities: | |||||||
Purchase of property and equipment | (1,483 | ) | (951 | ) | |||
Net cash used in investing activities | (1,483 | ) | (951 | ) | |||
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 | (254 | ) | (695 | ) | |||
Decrease in cash, cash equivalents and restricted cash | (40,399 | ) | (9,325 | ) | |||
Cash, cash equivalents and restricted cash at the beginning of the period | 115,958 | 101,969 | |||||
Cash, cash equivalents and restricted cash at the end of the period | $ | 75,559 | $ | 92,644 | |||
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