SatixFy Announces First Quarter 2023 Results

REHOVOT, Israel--(BUSINESS WIRE)-- SatixFy Communications Ltd. (“SatixFy”) (NYSE AMERICAN: SATX), a leader in next-generation satellite communication systems based on in-house developed chipsets, today announced its consolidated financial results for the first quarter of 2023.

Ido Gur, CEO of SatixFy, commented: “SatixFy’s first quarter results demonstrate that SatixFy is moving in the right direction. We have taken steps to reduce expenses while continuing our investment in R&D to maintain our edge and advance our satellite communication systems and chipsets. Our results demonstrate that we remain on track for revenue growth in 2023, with an associated improvement in the bottom line.”

First Quarter 2023 Results

Total revenues for the first quarter of 2023 were $2.4 million, an increase of 12% compared to $2.1 million in the first quarter of 2022. The vast majority of the revenues were from development services and pre-production.

Gross profit for the first quarter of 2023 was $1.0 million (at a gross margin of 41.0%), a 16% decline compared with $1.2 million (at a gross margin of 54.7%) in the first quarter of 2022. The decline in gross margin was attributed to the revenue mix, which favored a higher level of development services and preproduction that has a higher cost of services and sales.

Operating expenses declined to $7.0 million in the first quarter of 2023 from $7.6 million in the first quarter of 2022, reflecting a steady level of research and development (R&D) expenses, a $0.3 million increase in selling and marketing expenses, and a $1.0 million decrease in general and administrative (G&A) expenses, reflecting the impact in the first quarter of 2022 of a $2.0 million special management bonus, partially offset by public company costs following our business combination with Endurance Acquisition Corp. and listing on the NYSE in the first quarter of 2023.

Operating loss was $6.0 million in the first quarter of 2023, down from $6.4 million in the first quarter of 2022.

Finance expenses, net for the first quarter of 2023 were $26.3 million, reflecting expense of $43.7 million derived from the valuation of the Forward Purchase Agreement, based on a decrease in the market price of the Company’s ordinary shares, partially offset by $19.6 million in finance income derived from the valuation of Price Adjustment Shares, based on the same reason.

Net loss on an IFRS basis for the first quarter of 2023 was $32.4 million, or $0.40 per basic and diluted share, compared with a net loss of $10.0 million, or $0.52 per basic and diluted share, in the first quarter of 2022.

Adjusted net loss on a non-IFRS basis for the first quarter of 2023 was $6.1 million, or $0.08 per basic and diluted share compared with a non-IFRS adjusted net loss of $6.5 million, or $0.34 per basic and diluted share, in the first quarter of 2022.

Cash and cash equivalents as of March 31, 2023 totaled $14.1 million, compared to $11.9 million as of December 31, 2022.

About SatixFy

SatixFy develops end-to-end next-generation satellite communications systems, including satellite payloads, user terminals and modems, based on powerful chipsets that it develops in house.

SatixFy’s products include modems that feature Software Defined Radio (SDR) and Fully Electronically Steered Multi Beam Antennas (ESMA) that support the advanced communications standard DVB-S2X. SatixFy’s innovative ASICs improve the overall performance of satellite communications systems, reduce the weight and power requirements of terminals and payloads, and save real estate for gateway equipment. SatixFy’s advanced VSATs and multi-beam fully electronically steered antenna arrays are optimized for a variety of mobile applications and services, using LEO, MEO and GEO satellite communications systems, for aero/in-flight connectivity systems, communications-on-the-move applications, satellite-enabled Internet-of-Things, and consumer user terminals.

SatixFy is headquartered in Rehovot, Israel with additional offices in the U.S., U.K. and Bulgaria. For more information, please visit www.SatixFy.com.

Non-IFRS Financial Measures:

Non-IFRS adjusted net loss is defined as IFRS net loss after excluding depreciation and amortization and finance expenses, net (including the impact or revaluation of derivatives).

This non-IFRS measure is not a measure of the Company’s financial performance under IFRS and is presented for supplemental information purposes only and should be considered in addition to, and not as a substitute for, the comparable IFRS measures. The Company urges investors to treat this measure with caution and review the reconciliation of its non-IFRS financial measure to the most closely comparable IFRS measure included below together with the Company’s financial information presented in accordance with IFRS. The Company is providing non-IFRS adjusted net income because it believes it presents a better measure of the Company's core business activities, excluding certain non-cash and non-recurring items, and management uses this non-IFRS measure internally to evaluate the Company's ongoing performance. Accordingly, the Company believes they are useful to investors in enhancing an understanding of the Company's operating performance. However, the Company’s calculation and presentation of non-IFRS adjusted net income may differ materially from similar measures presented by other companies, including in the Company’s industry and in other industries.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements include information concerning possible or assumed future results of operations and descriptions of our business plan and strategies and may be identified by the use of words such as “estimate,” “plan,” “project,” “forecast,” “intend,” “will,” “expect,” “anticipate,” “believe,” “seek,” “target” or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of SatixFy’s management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. The forward-looking statements are subject to and involve risks, uncertainties and assumptions and you should not place undue reliance on these forward-looking statements. Important factors that could cause such differences include, but are not limited to, the matters described in our SEC filings and Annual Report on Form 20-F, in particular in the section “Risk Factors.” Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of SatixFy. Forward-looking statements set forth herein speak only as of the date of this press release. SatixFy has no obligation to revise forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs. In the event that any forward-looking statement is updated, no inference should be made that SatixFy will make additional updates with respect to that statement, related matters, or any other forward-looking statements. Any corrections or revisions and other important assumptions and factors that could cause actual results to differ materially from forward-looking statements, including discussions of significant risk factors, may appear in SatixFy’s public filings with the SEC, which are or will be (as appropriate) accessible at www.sec.gov, and which you are advised to consult.

SATIXFY COMMUNICATIONS LTD. UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in thousands of USD)
		March 31,		March 31,		December 31,
		2023		2022		2022
ASSETS:
CURRENT ASSETS:
Cash and cash equivalents		14,138		28,658		11,934
Trade accounts receivable		704		165		1,295
Contract assets		4,185		4,665		5,035
Prepaid expenses and other		4,738		2,689		3,648
Government departments and agencies receivables		5,471		3,431		6,156
Related parties		82		85		157
Derivatives FPA		531		-		12,775
Inventory		1,156		631		831
Total current assets		31,005		40,324		41,831
NON-CURRENT ASSETS:
Right-of-use assets, net		2,736		2,868		2,794
Property, plant and equipment, net		1,590		930		1,643
Investment in Jet Talk		1,665		2,029		1,777
Long term deposits		218		273		203
Derivatives FPA		-		-		28,077
Total non-current assets		6,209		6,100		34,494
TOTAL ASSETS		37,214		46,424		76,325

SATIXFY COMMUNICATIONS LTD. UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in thousands of USD)
		March 31,		March 31,		December 31,
		2023		2022		2022
LIABILITIES AND SHAREHOLDERS’ DEFICIT:
CURRENT LIABILITIES:
Trade payables		2,365		5,377		1,459
Contract liabilities		408		358		622
ESA advance payments		4,920		11,385		5,800
Prepayment from customer		12,686		11,156		12,176
Lease liabilities		1,021		985		1,021
Other accounts payable and accrued expenses		5,136		5,359		7,843
Related parties		381		517		408
Total current liabilities		26,917		35,137		29,329
NON-CURRENT LIABILITIES:
Long term loans from financial institutions		56,621		50,200		54,926
Lease liabilities		2,181		2,618		2,280
Derivatives instruments liabilities		728		1,392		20,305
Liability for royalties payable		1,153		1,423		1,107
Derivatives FPA		13,423		-		-
Total non-current liabilities		74,106		55,633		78,618
SHAREHOLDERS’ DEFICIT:
Share Capital		-		-		-
Share Premium		446,761		48,403		446,488
Capital reserves		3,445		1,056		3,498
Accumulated deficit		(514,015)		(93,805)		(481,608)
Total shareholders’ deficit		(63,809)		(44,346)		(31,622)
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT		37,214		46,424		76,325

SATIXFY COMMUNICATIONS LTD. UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (in thousands of USD)
		Three months ended
		March 31,
		2023		2022
Revenues:
Development services and preproduction		2,387		1,840
Sale of products		-		297
Total revenues		2,387		2,137
Cost of sales and services:
Development services and preproduction		1,408		832
Sale of products		-		137
Total cost of sales and services		1,408		969
Gross profit		979		1,168
Research and development expenses, net		4,184		4,159
Selling and marketing expenses		780		483
General and administrative expenses		2,018		2,956
Loss from operations		6,003		6,430
Finance income		2		54
Finance expenses		(2,154)		(3,498)
Derivatives revaluation		(24,141)		-
Company's share in the loss of a company accounted by equity method, net		(111)		(108)
Loss before income taxes		(32,407)		(9,982)
Income taxes		-		-
Loss for the period		(32,407)		(9,982)
Other comprehensive income (loss) net of tax:
Items that will or may be reclassified to profit or loss:
Exchange gain (loss) arising on translation of foreign operations		(53)		827
Total comprehensive loss for the period		(32,460)		(9,155)
Basic and diluted loss per share (in dollars)		(0.40)		(0.52)
Basic and diluted weighted average ordinary shares outstanding		80,684		19,260

SATIXFY COMMUNICATIONS LTD. UNAUDITED INTERIM CONDENSED statements of cash flows (in thousands of USD)
		Three months ended
		March 31,
		2023		2022
Cash flows from operating activities:
Loss for the year		(32,407)		(9,982)
Adjustments to reconcile net profit to net cash provided by operating activities:
Depreciation and amortization		293		346
Company's share in the loss of a company accounted by equity method, net		113		108
Finance expenses on loans		1,027		1,222
Change in the fair value of derivatives		24,141		-
Share based payments		246		158
Decrease (Increase) in trade accounts receivable		613		649
Decrease (Increase) in contract assets		958		1,242
Increase in inventory		(325)		54
Increase (Decrease) in other current assets		(181)		(2,852)
Increase in trade payables		871		(3,162)
Increase in ESA prepayments		(1,014)		(3,205)
Increase in other accounts payable and accrued expenses		(2,992)		(2,907)
Increase in prepayments from customers		241		9,652
Increase (decrease) in liability for royalties payable		47		103
Net cash used in operating activities		(8,369)		(8,574)
Cash flows from investing activities
Decrease (Increase) in long-term bank deposit		(19)		(2)
Net cash used in investing activities		(19)		(2)
Cash flows from financing activities
Receipt of long-term loans from a financial institution		1,424		52,837
Repayment of loan to shareholder		-		(5,000)
Repayment of loans from banks		-		(13,818)
Repayment of royalty liability		-		(48)
Payments of lease liabilities		(1,029)		(402)
Issuance of shares (FPA)		10,026		-
Option exercises to shares by employees		26		20
Net cash provided by financing activities		10,447		33,589
Increase (decrease) in cash and cash equivalents		2,059		25,013
Cash and cash equivalents balance at the beginning of the year		11,934		3,854
Effect of changes in foreign exchange rates on cash and cash equivalents		145		(209)
Cash and cash equivalents balance at the end of the year		14,138		28,658
Appendix A - Cash paid and received during the year for:
Interest paid		44		35
Appendix B - Non Cash transactions during the year for:
Issuance of shares against loan		-		1,978

SATIXFY COMMUNICATIONS LTD. RECONCILIATION OF NON-IFRS ADJUSTED NET LOSS TO IFRS NET LOSS (in thousands of USD)
		Three months ended
		March 31,
		2023		2022
IFRS Net Loss		(32,407)		(9,982)
Depreciation and amortization		58		44
Finance Expenses, net		26,293		3,444
Non-IFRS Adjusted Net Loss(1)		(6,056)		(6,494)
IFRS Basic and diluted loss per share		(0.40)		(0.52)
Non-IFRS Adjusted Basic and diluted loss per share		(0.08)		(0.34)
Basic and diluted weighted average ordinary shares outstanding		80,684		19,260
(1) The Company did not record income tax benefit or expense in the periods and the adjustments above had no income tax effect.

SAT-FIN

View source version on businesswire.com: https://www.businesswire.com/news/home/20230526005011/en/

Media Contacts:

Helena Itzhak, SatixFy, info@satixfy.com

Investor Contacts:

Ehud Helft, EK Global IR, satixfy@ekglobal.com

Source: SatixFy