Gilat Reports Strong Revenue & Profitability Growth in Third Quarter 2021

Rhea-AI Summary

Gilat Satellite Networks Ltd. (NASDAQ: GILT) reported a 34% revenue increase year-over-year to $49.9 million for Q3 2021. The company achieved a GAAP operating income of $0.9 million, reversing a loss of $10.9 million from Q3 2020. Adjusted EBITDA reached $4.0 million, significantly up from $0.6 million in the same quarter last year. Notable achievements include $28 million in multi-year agreements in Peru and strong bookings in strategic markets, despite global supply chain challenges. Management expresses confidence in future growth for both Q4 and 2022.

Positive

• Revenue increased 34% year-over-year to $49.9 million.
• GAAP operating income improved to $0.9 million from a $10.9 million loss in Q3 2020.
• Adjusted EBITDA reached $4.0 million, up from $0.6 million in Q3 2020.
• Signed multi-year service agreements valued at $28 million in Peru.
• Strong bookings in strategic market segments, including Cellular Backhaul.

Negative

• Revenue decreased 12% compared to the previous quarter.
• Operating income fell from $0.2 million in the previous quarter to $0.9 million this quarter, indicating volatility.

Revenue up 34% year-over-year to $49.9M, 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 Quarter Financial Highlights

• Revenues 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;
• Non-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;
• Non-GAAP net income of $0.7 million, 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;  
• Adjusted 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."

Continued 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 Call Details

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://veidan.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

 

FAQ

What was Gilat Satellite Networks' revenue for Q3 2021?

Gilat reported a revenue of $49.9 million for Q3 2021.

How much did Gilat's Adjusted EBITDA grow in Q3 2021?

Adjusted EBITDA grew to $4.0 million in Q3 2021, up from $0.6 million in Q3 2020.

What is the GAAP operating income for Gilat in Q3 2021?

Gilat's GAAP operating income for Q3 2021 was $0.9 million.

Did Gilat experience any significant changes in their revenue from Q2 2021?

Yes, revenue decreased by 12% compared to $56.9 million in the previous quarter.

What major agreements did Gilat secure in Peru?

Gilat secured multi-year service agreements valued at $28 million in Peru.