Press-Releases

Gilat Presents Strong Growth and Results for Third Quarter

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Revenue of $60.4 million, up 21% year-over-year, GAAP operating income of $3.4 million versus $0.8 million in Q3 last year, and adjusted EBITDA of $7.3 million, up 88% year-over-year

PETAH TIKVA, Israel, Nov. 14, 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 third quarter ended September 30, 2022.

Third Quarter 2022 Financial Highlights

  • Revenues of $60.4 million,up 21% compared with $49.8 million in Q3 last year;
  • GAAP operating income of $3.4 million versus $0.8 million in Q3 last year;
  • Non-GAAP operating income of $4.4 million versus $1.3 million in Q3 last year;
  • GAAP net income of $2.1 million versus breakeven in Q3 last year;
  • Non-GAAP net income of $3 million versus $0.6 million in Q3 last year;
  • Adjusted EBITDA of $7.3 million versus $3.9 million in Q3 last year;

Forward-Looking Expectations

The Company adjusted and narrowed the range of its 2022 revenue guidance, with expectations of between $240 million and $245 million, representing year-over-year growth of approximately 13%.

The Company also increased and narrowed the GAAP operating income guidance range to between $8 million to $10 million representing significant year-over-year growth versus $2.2 million in 2021.

The Company increased and narrowed the adjusted EBITDA range to between $23 to $25 million, representing year-over-year growth of approximately 56%.

Management Commentary

Adi Sfadia, Gilat’s CEO, commented: “We are very pleased with our strong third quarter results showing continued year-over-year growth and a recovery in all our markets, in particular IFC. We are also very encouraged with the solid and continued improvement in our profitability demonstrating substantial improvement in our gross, operating and net margins with adjusted EBITDA growing by 88% year-over-year.

Strategically we are very excited with the progress of our newly launched, world leading, SkyEdge IV platform. During the third quarter, a leading service provider selected SkyEdge IV, Gilat’s high-performance, multi-orbit platform, to power maritime connectivity. We are confident that this platform will allow us to focus and gain market share in the growing multibillion-dollar market of the next era of satellite communication.

The mobility business continued to pick up, with recent IFC orders of over $12 million. We further solidified our leadership in the cellular backhaul market this quarter, with multimillion-dollar orders from both new customers and mobile operators trusting Gilat’s technology to extend their networks even further. In addition, we received multimillion-dollar orders in the Defense segment, where we see significant potential and have increased our focus, as well as in the Enterprise sector for utility and banking applications.”

Mr. Sfadia concluded, “Our pipeline continues to increase and broaden, and the release of our next generation platform and growth engine – the SkyEdge IV for VHTS & NGSO satellites – is gaining strong traction among new and existing customers. As such, we are increasingly optimistic and expect to maintain our strong momentum ahead. For 2022 as a whole, we are tracking ahead of our profitability targets, and we look forward to continuing the growth trend into 2023.”

Key Recent Announcements

  • World-Leading UAV Manufacturer Selects Gilat in Multi-Year, Multimillion-Dollar Strategic Agreement for UAV Terminals
  • Telefónica Global Solutions Selects Gilat to Extend 4G Cellular Coverage for Mobile Operators in Latin America
  • Antamina Selects Gilat for Multimillion-Dollar E-Learning Project
  • Gilat Awarded Over $10M to Power IFC Applications of Tier-1 Global Aerospace System Integrator
  • Gilat Selected by Sencinet for Petrobras’ Oil and Gas Industry Satellite Connectivity Project
  • SES and Gilat Extend Global Strategic Cooperation with Orders for GEO VHTS and O3b mPOWER NGSO Constellation

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

Date: Monday, November 14, 2022
Start: 09:30 AM EST / 16:30 IST
Dial-in: US: 1-888-407-2553
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/gilatq3-2022 

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, other expenses, income tax effect on adjustments 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 over 30 years of experience, we create and deliver deep technology solutions for satellite, ground and new space connectivity and provide comprehensive end-to-end solutions and services, powered by our innovative technology. We believe in the right of all people to be connected and are united in our resolution to provide communication solutions to all reaches of the world.

Delivering high value solutions, our portfolio is comprised of a cloud-based platform and high performance satellite terminals designed to work in harmony with satellite constellations, including Very High Throughput Satellites (VHTS) and Software-Defined Satellites (SDS) in multiple orbits; high performance Satellite On-the-Move (SOTM) antennas; and highly efficient, high-power Solid State Power 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, mobility, cellular backhaul, military, government, and enterprise, 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
[email protected]

Ehud Helft
EK Global Investor Relations
[email protected]
+1 212 378 8040

GILAT SATELLITE NETWORKS LTD.                
CONSOLIDATED STATEMENTS OF INCOME (LOSS)              
U.S. dollars in thousands (except share and per share data)              
         Nine months ended
   Three months ended
         September 30,
   September 30,
          2022       2021       2022       2021  
            As Restated (1)       As Restated (1)
        Unaudited   Unaudited
                     
Revenues     $ 167,213     $ 147,947     $ 60,350     $ 49,778  
Cost of revenues       108,021       101,376       37,315       32,306  
                     
Gross profit       59,192       46,571       23,035       17,472  
                     
Research and development expenses, net     25,542       22,884       9,156       7,224  
Selling and marketing expenses     15,724       15,827       5,414       5,359  
General and administrative expenses     13,325       11,042       4,770       4,104  
Impairment of held for sale asset     718             279        
                     
Total operating expenses       55,309       49,753       19,619       16,687  
                     
Operating income (loss)       3,883       (3,182 )     3,416       785  
                     
Financial expenses, net       (2,716 )     (1,458 )     (1,053 )     (701 )
                     
Income (loss) before taxes on income     1,167       (4,640 )     2,363       84  
                     
Taxes on income       1,075       523       243       49  
                     
Net income (loss)     $ 92     $ (5,163 )   $ 2,120     $ 35  
                     
Earnings (loss) per share (basic and diluted)   $ 0.00     $ (0.09 )   $ 0.04     $ 0.00  
                     
Weighted average number of shares used in computing earning (loss) per share                
  Basic       56,585,858       56,355,020       56,608,981       56,525,177  
  Diluted       56,604,854       56,355,020       56,626,283       56,958,250  
                     
 (1) The Company restated its previously issued condensed interim consolidated financial statements for the three and nine months ended September 30, 2021.
 For additional information, see Note 2 and Note 17 to the audited consolidated financial statements included in Part III, Item 18 of our 2021 Form 20-F/A filed with the U.S. Securities and Exchange Commission on September 14, 2022.
               
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
    September 30, 2022   September 30, 2021
    GAAP   Adjustments (*)   Non-GAAP   GAAP   Adjustments (*)   Non-GAAP
                As Restated (1)       As Restated (1)
    Unaudited   Unaudited
                         
Gross profit $ 23,035     74     $ 23,109   $ 17,472     96     $ 17,568
Operating expenses   19,619     (879 )     18,740     16,687     (448 )     16,239
Operating income   3,416     953       4,369     785     544       1,329
Income before taxes on income   2,363     953       3,316     84     544       628
Net income $ 2,120     911     $ 3,031   $ 35     544     $ 579
                         
Earning per share (basic and diluted) $ 0.04   $ 0.02     $ 0.06   $ 0.00   $ 0.01     $ 0.01
                         
                         
Weighted average number of shares used in computing earning per share                      
        Basic         56,608,981         56,608,981     56,525,177         56,525,177
        Diluted         56,626,283         56,652,855     56,958,250         57,227,810
                         
                         
 (*) Adjustments reflect the effect of non-cash stock-based compensation as per ASC 718, amortization of intangible assets related to acquisition transactions, impairment of held for sale asset, other expenses and income tax effect on adjustments which is calculated using the blended effective tax rate on the adjustments, based on the statutory tax rates applicable to the adjustments.
                         
                         
          Three months ended             Three months ended    
          September 30, 2022             September 30, 2021    
                    As Restated (1)    
        Unaudited           Unaudited    
                         
GAAP net income     $ 2,120             $ 35      
                         
Gross profit                      
Non-cash stock-based compensation expenses     74               91      
Amortization of intangible assets related to acquisition transactions                       5      
          74               96      
Operating expenses                      
Non-cash stock-based compensation expenses     498               398      
Amortization of intangible assets related to acquisition transactions         51               50      
Impairment of held for sale asset       279                    
Other       51                    
          879               448      
                         
Income tax effect on adjustments       (42 )                  
                         
Non-GAAP net income     $ 3,031             $ 579      
                         
(1) The Company restated its previously issued condensed interim consolidated financial statements for the three and nine months ended September 30, 2021.
 For additional information, see Note 2 and Note 17 to the audited consolidated financial statements included in Part III, Item 18 of our 2021 Form 20-F/A   filed with the U.S. Securities and Exchange Commission on September 14, 2022. 
                         
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)                    
        Nine months ended   Nine months ended
        September 30, 2022   September 30, 2021
        GAAP   Adjustments (*) Non-GAAP   GAAP   Adjustments (*) Non-GAAP
                    As Restated (1)       As Restated (1)
        Unaudited   Unaudited
                             
Gross profit     $ 59,192     230     $ 59,422   $ 46,571       226     $ 46,797  
Operating expenses       55,309     (2,394 )     52,915     49,753       (735 )     49,018  
Operating income (loss)       3,883     2,624       6,507     (3,182 )     961       (2,221 )
Income (loss) before taxes on income       1,167     2,624       3,791     (4,640 )     961       (3,679 )
Net income (loss)       92     2,582       2,674     (5,163 )     961       (4,202 )
                             
Earning (loss) per share (basic and diluted) $ 0.00   $ 0.05     $ 0.05   $ (0.09 )   $ 0.02     $ (0.07 )
                             
                             
Weighted average number of shares used in computing earning (loss) per share                          
        Basic          56,585,858         56,585,858     56,355,020           56,355,020  
        Diluted          56,604,854         56,659,298     56,355,020           56,355,020  
                             
                             
(*) Adjustments reflect the effect of non-cash stock-based compensation as per ASC 718, amortization of intangible assets related to acquisition transactions, impairment of held for sale asset, other expenses and income tax effect on adjustments which is calculated using the blended effective tax rate on the adjustments, based on the statutory tax rates applicable to the adjustments.
                             
                             
              Nine months ended
                Nine months ended
       
              September 30, 2022
                September 30, 2021
       
                        As Restated (1)    
            Unaudited           Unaudited    
                             
GAAP net income (loss)         $ 92             $ (5,163 )    
                             
Gross profit                          
Non-cash stock-based compensation expenses       220               211      
Amortization of intangible assets related to acquisition transactions             10               15      
              230               226      
Operating expenses                          
Non-cash stock-based compensation expenses       1,413               584      
Amortization of intangible assets related to acquisition transactions             152               151      
Impairment of held for sale asset           718                    
Other           111                    
              2,394               735      
                             
Income tax effect on adjustments           (42 )                  
                             
Non-GAAP net income (loss)         $ 2,674             $ (4,202 )    
                             
(1) The Company restated its previously issued condensed interim consolidated financial statements for the three and nine months ended September 30, 2021.
For additional information, see Note 2 and Note 17 to the audited consolidated financial statements included in Part III, Item 18 of our 2021 Form 20-F/A  filed with the U.S. Securities and Exchange Commission on September 14, 2022.
             
GILAT SATELLITE NETWORKS LTD.                
SUPPLEMENTAL INFORMATION                
U.S. dollars in thousands                  
                       
ADJUSTED EBITDA:                  
                       
           Nine months ended
   Three months ended
           September 30,
   September 30,
            2022     2021       2022     2021
              As Restated (1)       As Restated (1)
          Unaudited   Unaudited
                       
GAAP net income (loss)     $ 92   $ (5,163 )   $ 2,120   $ 35
Adjustments:                    
Financial expenses, net           2,716     1,458       1,053     701
Taxes on income           1,075     523       243     49
Non-cash stock-based compensation expenses   1,633     795       572     489
Impairment of held for sale asset       718           279    
Other         111           51    
Depreciation and amortization (*)     8,770     7,365       2,978     2,608
                       
Adjusted EBITDA       $ 15,115   $ 4,978     $ 7,296   $ 3,882
                       
(*) Including amortization of lease incentive                
                       
SEGMENT REVENUES:                  
                     
           Nine months ended     Three months ended 
           September 30,     September 30, 
            2022     2021       2022     2021
              As Restated (1)       As Restated (1)
          Unaudited   Unaudited
                       
Satellite Networks       $ 83,993   $ 83,157     $ 32,366   $ 23,182
Integrated Solutions         45,047     33,540       15,650     14,704
Network Infrastructure and Services     38,173     31,250       12,334     11,892
                       
Total revenues       $ 167,213   $ 147,947     $ 60,350   $ 49,778
                       
(1) The Company restated its previously issued condensed interim consolidated financial statements for the three and nine months ended September 30, 2021.
For additional information, see Note 2 and Note 17 to the audited consolidated financial statements included in Part III, Item 18 of our 2021 Form 20-F/A  filed with the U.S. Securities and Exchange Commission on September 14, 2022.
             
           
  GILAT SATELLITE NETWORKS LTD.        
  CONSOLIDATED BALANCE SHEETS        
  U.S. dollars in thousands        
           
      September 30,   December 31,
        2022       2021  
      Unaudited   Audited
           
  ASSETS        
           
  CURRENT ASSETS:        
  Cash and cash equivalents   $ 68,439     $ 81,859  
  Short-term deposits           2,159  
  Restricted cash     1,425       2,592  
  Trade receivables, net     51,677       39,161  
  Contract assets     29,688       26,008  
  Inventories     33,925       28,432  
  Other current assets     24,808       14,607  
  Held for sale asset     3,997       4,587  
           
     Total current assets     213,959       199,405  
           
  LONG-TERM ASSETS:        
  Restricted cash     12       12  
  Long- term contract assets     11,149       12,539  
  Severance pay funds     5,884       6,795  
  Deferred taxes     15,816       17,551  
  Operating lease right-of-use assets     3,857       4,478  
  Other long term assets     10,654       10,456  
           
  Total long-term assets     47,372       51,831  
           
  PROPERTY AND EQUIPMENT, NET     73,312       72,391  
           
  INTANGIBLE ASSETS, NET     364       640  
           
  GOODWILL     43,468       43,468  
           
  TOTAL ASSETS   $ 378,475     $ 367,735  
           
  GILAT SATELLITE NETWORKS LTD.        
  CONSOLIDATED BALANCE SHEETS (Cont.)        
  U.S. dollars in thousands        
           
      September 30,   December 31,
        2022       2021  
      Unaudited   Audited
           
  LIABILITIES AND SHAREHOLDERS’ EQUITY        
           
  CURRENT LIABILITIES:        
  Trade payables   $ 24,880     $ 19,776  
  Accrued expenses     46,207       49,202  
  Advances from customers and deferred revenues     31,192       24,373  
  Operating lease liabilities     1,813       1,818  
  Other current liabilities     15,430       13,339  
           
     Total current liabilities     119,522       108,508  
           
  LONG-TERM LIABILITIES:        
  Accrued severance pay     6,473       7,292  
  Long-term advances from customers     1,838       1,209  
  Operating lease liabilities     1,945       2,283  
  Other long-term liabilities     127       120  
           
     Total long-term liabilities     10,383       10,904  
           
  SHAREHOLDERS’ EQUITY:        
  Share capital – ordinary shares of NIS 0.2 par value     2,711       2,706  
  Additional paid-in capital     931,500       929,871  
  Accumulated other comprehensive loss     (7,836 )     (6,357 )
  Accumulated deficit     (677,805 )     (677,897 )
           
  Total shareholders’ equity     248,570       248,323  
           
  TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 378,475     $ 367,735  
           
GILAT SATELLITE NETWORKS LTD.                
CONSOLIDATED STATEMENTS OF CASH FLOWS                
U.S. dollars in thousands                
                   
       Nine months ended
   Three months ended
       September 30,
   September 30,
        2022       2021       2022       2021  
          As Restated (1)       As Restated (1)
      Unaudited   Unaudited
Cash flows from operating activities:                
Net income (loss)   $ 92     $ (5,163 )   $ 2,120     $ 35  
Adjustments required to reconcile net income (loss)                
 to net cash provided by (used in) operating activities:                
Depreciation and amortization     8,604       7,202       2,921       2,556  
Impairment of held for sale asset     718             279        
Stock-based compensation of options     1,633       795       572       489  
Accrued severance pay, net     92       (177 )     (22 )     (49 )
Deferred taxes, net     1,823       (47 )     159       (232 )
Decrease (increase) in trade receivables, net     (12,270 )     (2,490 )     (387 )     4,867  
Decrease (increase) in contract assets     (2,290 )     21,334       318       (313 )
Increase in other assets (including short-term, long-term                
   and deferred charges)     (8,652 )     (5,485 )     (889 )     (1,476 )
Increase in inventories     (6,030 )     (347 )     (1,955 )     (2,121 )
Increase (decrease) in trade payables     4,315       (2,719 )     110       (1,929 )
Decrease in accrued expenses     (1,767 )     (2,344 )     (77 )     (542 )
Increase in advance from customers and deferred revenue     7,397       4,473       387       4,811  
Increase (decrease) in other liabilities     365       (1,301 )     1,175       (1,107 )
Net cash provided by (used in) operating activities     (5,970 )     13,731       4,711       4,989  
                   
Cash flows from investing activities:                
Purchase of property and equipment     (9,225 )     (5,024 )     (4,710 )     (1,452 )
Repayment of short term deposits     2,159                   2,159  
Investment in financial instrument     (1,536 )           (1,536 )      
Net cash provided by (used in) investing activities     (8,602 )     (5,024 )     (6,246 )     707  
                   
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     (15 )     (252 )     (47 )     (91 )
                   
Increase (decrease) in cash, cash equivalents and restricted cash     (14,587 )     (30,548 )     (1,582 )     5,605  
                   
Cash, cash equivalents and restricted cash at the beginning of the period     84,463       115,958       71,458       79,805  
                   
Cash, cash equivalents and restricted cash at the end of the period   $ 69,876     $ 85,410     $ 69,876     $ 85,410  
                   
 (1) The Company restated its previously issued condensed interim consolidated financial statements for the three and nine months ended September 30, 2021.    
 For additional information, see Note 2 and Note 17 to the audited consolidated financial statements included in Part III, Item 18 of our 2021 Form 20-F/A filed with the U.S. Securities and Exchange Commission on September 14, 2022.
                   
                   

Gilat Satellite Networks Ltd

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