Revenue is up 49% year-over-year and 27% sequentially with a return to Non-GAAP profitability
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
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
Conference Call Details
Gilats 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 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, 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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