PETAH TIKVA, Israel, Feb. 15, 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 fourth quarter and full year ended December 31, 2021.

Fourth Quarter Financial Highlights

  • Revenues of $67.3 million, up 58% compared with $42.6 million in Q4 2020 and up 35% compared with $49.9 million in the previous quarter;
  • GAAP operating income of $5.6 million compared with $62.7 million in Q4 2020 which included a one-time net income of $64.8 million related to the settlement with Comtech. Excluding this item, Q4 2020 operating loss would have been $2.1 million. GAAP operating income in the previous quarter was $0.9 million;
  • Non-GAAP operating income of $6.8 million, compared with Non-GAAP operating loss of $1.6 million in Q4 2020, and Non-GAAP operating income of $1.5 million in the previous quarter;
  • GAAP net income of $2.4 million, or $0.04 per diluted share, compared with net income of $62.4 million, or $1.12 per diluted share in Q4 2020.  GAAP net income for Q4 2020 included the above-mentioned net income from the Comtech settlement; GAAP net income in the previous quarter was $0.2 million, or $0.00 per diluted share;
  • Non-GAAP net income of $5.9 million, or $0.10 per diluted share, compared with Non-GAAP net loss of $1.9 million, or loss of $0.03 per share in Q4 2020 and Non-GAAP net income of $0.7 million, or $0.01 per diluted share, in the previous quarter; 
  • Adjusted EBITDA of $10.6 million, compared with $1.1 million in Q4 2020 and $4.0 million in the previous quarter;

Full year 2021 Financial Highlights 

  • Revenue of $218.9 million, up by 32% compared with $165.9 million in 2020;
  • GAAP operating income of $2.5 million compared to $37.6 million in 2020; GAAP operating income in 2020 includes net income of $53.6 million related to the settlement with Comtech;
  • Non-GAAP operating income of $4.7 million compared with Non-GAAP operating loss of $13.7 million in 2020;
  • GAAP net loss of $2.7 million, or $0.05 per share, compared with GAAP net income of $34.9 million in 2020, or $0.63 per diluted share; GAAP net income in 2020 includes the above-mentioned Comtech settlement net income;
  • Non-GAAP net income of $1.8 million, or $0.03 per diluted share, compared to Non-GAAP net loss of $16.4 million, or $0.30 per share, in 2020;
  • Adjusted EBITDA was $15.7 million compared with adjusted EBITDA loss of $3.3 million in 2020;

Forward-Looking Expectations

Guidance for 2022 is for revenues of between $245 to $265 million, representing year-over-year growth of between 12% and 21%, GAAP operating income of between $5 to $9 million and adjusted EBITDA of between $20 to $24 million, representing year-over-year growth of between 27% to 53%.

Management Commentary

Adi Sfadia, Gilat's CEO, commented: “Our results in the quarter showed significant revenue growth of 58% year-over-year which translated into adjusted EBITDA of over $10 million, 10 times our levels in Q4 last year, an impressive achievement in a challenging year. These results, among others, reflect the opportunities and trends we are witnessing and have mentioned several times over the past year.”

"We recently launched SkyEdge IV, Gilat's next-generation multi-orbit, software-centric platform, that will improve operational efficiencies. I am proud to report that we recently closed major deals on this new platform with both Intelsat and SES, of which a significant portion were software licenses. We expect that with SkyEdge IV we will further increase our market share and strengthen our leadership position in our major focus areas of Mobility, 4G/5G Cellular Backhaul, Enterprise and Defense.

“Looking back at 2021, it was a remarkable year due to four major accomplishments. First, in the NGSO and VHTS segments we had two outstanding achievements: we were awarded a sizeable deal for a multi-year contract with the potential of hundreds of millions of dollars, to customize and provide our leading technology for NGSO constellations. Upon signing this contract, we received the first multi-million-dollar purchase order for initial units. We also received more than $40 million dollars in orders from a leading satellite operator to support a Low Earth Orbit Constellation.

"The second major accomplishment in 2021 was in fortifying our Mobility leadership in a multimillion dollar deal for SkyEdge IV, which provides Gilat access to top cruise lines and maritime service providers that will use SES’s O3b mPOWER as well as their geostationary fleet. 

"The third major accomplishment during the year was in Peru, where we reached, ahead of our stated objectives, our goal of a $50 million run rate in annual recurring revenue. We expect that in 2022 we will turn the corner in Peru and our business there will become significantly profitable.

"And finally, we expanded our strategic relationship with Intelsat for commercial aviation in North America and Asia, demonstrating continued IFC market recovery."

Mr. Sfadia concluded, “As we enter 2022, I am very encouraged by our strong backlog, solid visibility and the pipeline we see ahead of us. We therefore feel confident in resuming our annual objectives which show strong growth in revenues and significant improvement in profitability for 2022.”

Key Recent Announcements

  • Intelsat Makes Strategic Selection with a Significant Initial Order of Gilat's New SkyEdge IV Platform for Its Newest High Throughput Satellite
  • SES and Gilat Expand Strategic Partnership with the Selection of Gilat's SkyEdge IV Platform for SES-17
  • Gilat Announces Launch of SkyEdge IV, Next Generation SATCOM Ground System, Aiming to Capture a Leading Position of the Multibillion-Dollar Emerging VHTS Market Opportunity
  • Gilat and Intelsat Expand Their Strategic Partnership in Commercial Aviation
  • Gilat Captures Greater Maritime Market Share in New Deal with Eurasian Satellite Service Provider
  • Leading Mobile Operator in Mexico Extends 4G Cellular Backhaul Recurring Revenue Managed Services Project with Gilat
  • Tier-1 Mobile Network Carrier in Japan Expanding Their 4G Cellular Network with Gilat’s Backhaul over Satellite
  • One of World’s Largest MNOs to Deploy Gilat’s 4G Cellular Backhaul over Satellite Technology
  • Gilat Signs Multi-Million Dollar Deal to Modernize and Expand Satellite Communications in Eurasia for Multiple Applications
  • Tier-1 US Global Military Terminal Provider Places Order of Over $5M with Gilat for Solid State Amplifiers
  • Africa’s Largest Satellite Cellular Backhaul Network Extends Coverage with Gilat’s Technology to a Dozen Countries in Africa

Conference Call Details

Gilat’s management will discuss its fourth quarter and full year 2021 results and business achievements and participate in a question and answer session:

Date:Tuesday, February 15, 2022
Start:09:30 AM EST / 16:30 IST
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/gilatq4-2021

The webcast will also be archived for a period of 30 days on the Company’s website and through the link above.

Unaudited Results
The attached summary unaudited financial statements represent the most current information available to management. Audited results will be reported in our annual report on Form 20-F.

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 assets, 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 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 
  Twelve months ended
   December 31, 
  December 31,
   2021 2020 2021 2020
   Unaudited Unaudited Audited
          
Revenues $67,271 $42,627  $218,818  $165,885 
Cost of revenues  42,328  29,329   147,198   124,670 
          
Gross profit  24,943   13,298    71,620    41,215  
          
Research and development expenses  9,357  7,474   33,031   27,689 
Less - grants  905  454   1,695   1,386 
Research and development expenses, net  8,452  7,020   31,336   26,303 
Selling and marketing expenses  5,685  4,534   21,512   16,871 
General and administrative expenses  4,545  3,794   15,587   14,063 
Merger, acquisition and related litigation expenses (income), net -  (64,782)  -   (53,633)
Impairment of held for sale asset  651  -   651   - 
          
Total operating expenses (income)  19,333   (49,434)  69,086    3,604  
          
Operating income   5,610   62,732    2,534    37,611  
          
Financial expenses, net  264  192   1,722   1,907 
          
Income before taxes on income  5,346   62,540    812    35,704  
          
Taxes on income  2,969  98   3,492   793 
          
Net income (loss) $2,377  $62,442   $(2,680) $34,911  
          
Basic and Diluted earnings (loss) per share $0.04  $1.12   $(0.05) $0.63  
          
Weighted average number of shares used in         
 computing earnings (loss) per share        
 Basic  56,539,237   55,545,654    56,401,074   55,516,113 
 Diluted  56,627,907   55,815,099    56,401,074    55,583,474  
          


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 
  December 31, 2021 December 31, 2020
  GAAP Adjustments (1) Non-GAAP GAAP Adjustments (1) Non-GAAP
  Unaudited Unaudited
             
Gross profit$24,943  71  $25,014 $13,298   42  $13,340 
Operating expenses (income) 19,333  (1,147)  18,186  (49,434)  64,389   14,955 
Operating income (loss) 5,610  1,218   6,828  62,732   (64,347)  (1,615)
Income (loss) before taxes on income 5,346  1,218   6,564  62,540   (64,347)  (1,807)
Net income (loss)$2,377   3,517  $5,894  $62,442    (64,347) $(1,905)
             
Earnings (loss) per share (basic and diluted)$0.04  $0.06  $0.10  $1.12   $(1.15) $(0.03)
             
             
Weighted average number of shares used in           
    computing earnings per share           
 Basic 56,539,237    56,539,237  55,545,654     55,545,654 
 Diluted 56,627,907    56,928,169  55,815,099     55,545,654 
             
             
 (1) Adjustments reflect the effect of non-cash stock-based compensation as per ASC 718, amortization of intangible assets related to shares acquisition transactions, trade secrets and other litigation expenses, merger, acquisition and related litigation expenses (income), net , impairment of held for sale asset and one-time   changes to deferred tax assets.
             
   Three months ended   Three months ended 
  December 31, 2021 December 31, 2020
    Unaudited     Unaudited  
             
GAAP net income  $2,377      $62,442   
             
Gross profit           
Non-cash stock-based compensation expenses  66       39   
Amortization of intangible assets related to acquisition transactions 5       3   
     71       42   
Operating expenses           
Non-cash stock-based compensation expenses  445       254   
Amortization of intangible assets related to acquisition transactions 51       54   
Merger, acquisition and related litigation expenses (income), net  -       (64,782)  
Impairment of held for sale asset   651       -   
Trade secrets and other litigation expenses   -       85   
     1,147       (64,389)  
             
One-time changes to deferred tax assets   2,299       -   
             
Non-GAAP net income (loss)  $5,894      $(1,905)  
                 


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)        
    Twelve months ended   Twelve months ended 
   December 31, 2021 December 31, 2020
   GAAP Adjustments (1) Non-GAAP GAAP Adjustments (1) Non-GAAP
   Unaudited Audited Unaudited
              
Gross profit $71,620   297  $71,917 $41,215  186  $41,401 
Operating expenses  69,086   (1,882)  67,204  3,604  51,502   55,106 
Operating income (loss)  2,534   2,179   4,713  37,611  (51,316)  (13,705)
Income (loss) before taxes on income  812   2,179   2,991  35,704  (51,316)  (15,612)
Net income (loss)  (2,680)  4,478   1,798   34,911   (51,316)  (16,405)
              
Earnings (loss) per share (basic and diluted)$(0.05) $0.08  $0.03  $0.63  $(0.93) $(0.30)
              
              
Weighted average number of shares used in           
      computing earnings per share            
 Basic  56,401,074     56,401,074  55,516,113    55,516,113 
 Diluted  56,401,074     56,878,852  55,583,474    55,516,113 
              
              
 (1) Adjustments reflect the effect of non-cash stock-based compensation as per ASC 718, amortization of intangible assets related to shares acquisition transactions, trade secrets and other litigation expenses, merger, acquisition and related litigation expenses (income), net, impairment of held for sale asset, restructuring and re-organization costs and one-time changes to deferred tax assets.
              
    Twelve months ended   Twelve months ended 
   December 31, 2021 December 31, 2020
     Unaudited     Unaudited  
              
GAAP net income (loss)   $(2,680)     $34,911   
              
Gross profit            
Non-cash stock-based compensation expenses   277       166   
Amortization of intangible assets related to acquisition transactions 20       20   
      297       186   
Operating expenses            
Non-cash stock-based compensation expenses   1,029       1,114   
Amortization of intangible assets related to acquisition transactions 202       204   
Merger, acquisition and related litigation expenses (income), net  -       (53,633)  
Impairment of held for sale asset    651       -   
Trade secrets and other litigation expenses   -       96   
Restructuring and re-organization costs    -       717   
      1,882       (51,502)  
              
One-time changes to deferred tax assets    2,299       -   
              
Non-GAAP net income (loss)   $1,798      $(16,405)  
              


GILAT SATELLITE NETWORKS LTD.   
SUPPLEMENTAL INFORMATION    
U.S. dollars in thousands    
         
         
ADJUSTED EBITDA:    
         
   Three months ended
 Twelve months ended
  December 31,
  December 31,
  2021 2020 2021 2020
  Unaudited Unaudited
         
GAAP operating profit $5,610 $62,732  $2,534 $37,611 
Add:        
Non-cash stock-based compensation expenses  511  293   1,306  1,280 
Trade secrets and other litigation expenses  -  85   -  96 
Restructuring and re-organization costs  -  -   -  717 
Merger, acquisition and related litigation expenses (income), net -  (64,782)  -  (53,633)
Impairment of held for sale asset  651  -   651  - 
Depreciation and amortization (*)  3,848  2,729   11,214  10,653 
         
Adjusted EBITDA $10,620  $1,057   $15,705  $(3,276)
         
(*) Including amortization of lease incentive        
         
SEGMENT REVENUE:        
         
  Three months ended
 Twelve months ended
  December 31,
 December 31,
  2021 2020 2021 2020
  Unaudited Unaudited Audited
         
Fixed Networks $36,994 $25,085  $115,449 $92,671 
Mobility Solutions  24,988  11,751   77,614  54,169 
Terrestrial Infrastructure Projects  5,289  5,791   25,755  19,045 
         
Total revenue $67,271  $42,627   $218,818  $165,885  
         


     
GILAT SATELLITE NETWORKS LTD.    
CONSOLIDATED BALANCE SHEETS    
U.S. dollars in thousands    
     
  December 31, December 31,
  2021 2020
  Unaudited Audited
     
ASSETS    
     
CURRENT ASSETS:    
Cash and cash equivalents $81,859  $88,754 
Short-term deposits  2,159   - 
Restricted cash  2,592   27,162 
Trade receivables, net  38,744   27,976 
Contract assets  24,220   41,573 
Inventories  28,432   31,304 
Other current assets  14,607   16,637 
Held for sale asset  4,587   - 
     
   Total current assets  197,200   233,406 
     
LONG-TERM ASSETS:    
Restricted cash  12   42 
Severance pay funds  6,795   6,665 
Deferred taxes  17,551   19,295 
Operating lease right-of-use assets  4,478   4,879 
Other long term receivables  10,456   7,797 
     
Total long-term assets  39,292   38,678 
     
PROPERTY AND EQUIPMENT, NET  72,391   77,172 
     
INTANGIBLE ASSETS, NET  640   1,082 
     
GOODWILL  43,468   43,468 
     
TOTAL ASSETS $352,991  $393,806 
     
GILAT SATELLITE NETWORKS LTD.    
CONSOLIDATED BALANCE SHEETS (Cont.)    
U.S. dollars in thousands    
     
  December 31, December 31,
  2021 2020
  Unaudited Audited
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
     
CURRENT LIABILITIES:    
Current maturities of long-term loans $-  $4,000 
Trade payables  19,776   20,487 
Accrued expenses  49,202   46,387 
Advances from customers and deferred revenues  25,472   26,244 
Operating lease liabilities  1,818   1,911 
Dividend payable  -   35,003 
Other current liabilities  13,339   13,322 
     
   Total current liabilities  109,607   147,354 
     
LONG-TERM LIABILITIES:    
Accrued severance pay  7,292   7,136 
Long-term advances from customers  1,595   1,890 
Operating lease liabilities  2,283   2,985 
Other long-term liabilities  120   631 
     
   Total long-term liabilities  11,290   12,642 
     
SHAREHOLDERS' EQUITY:    
Share capital - ordinary shares of NIS 0.2 par value  2,706   2,647 
Additional paid-in capital  929,871   928,626 
Accumulated other comprehensive loss  (6,357)  (6,017)
Accumulated deficit  (694,126)  (691,446)
     
Total shareholders' equity  232,094   233,810 
     
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $352,991  $393,806 
     


GILAT SATELLITE NETWORKS LTD.        
CONSOLIDATED STATEMENTS OF CASH FLOWS        
U.S. dollars in thousands        
         
  Three months ended
 Twelve months ended
  December 31,
 December 31,
  2021 2020 2021 2020
  Unaudited Unaudited Audited
Cash flows from operating activities:        
Net income (loss) $2,377  $62,442  $(2,680) $34,911 
Adjustments required to reconcile net income (loss)        
   to net cash provided by operating activities:        
Depreciation and amortization  3,789   2,534   10,991   10,291 
Capital loss from disposal of property and equipment and impairment of held for sale asset  651   147   651   181 
Stock-based compensation of options  511   293   1,306   1,282 
Accrued severance pay, net  203   205   26   242 
Deferred taxes, net  1,694   (966)  1,647   (867)
Decrease (increase) in trade receivables, net  (9,032)  (1,520)  (10,789)  19,332 
Decrease (increase) in contract assets  249   (3,471)  17,353   (17,875)
Decrease (increase) in other assets (including short-term, long-term        
   and deferred charges)  5,238   1,021   (247)  8,941 
Decrease (increase) in inventories  2,796   100   2,449   (5,050)
Increase (decrease) in trade payables  2,007   3,178   (712)  (157)
Increase (decrease) in accrued expenses  861   (7,356)  2,012   (7,549)
Increase (decrease) in advance from customers and deferred revenue  (5,491)  2,218   (1,122)  (1,898)
Increase (decrease) in current and non current liabilities  (681)  1,596   (1,982)  1,376 
Net cash provided by operating activities  5,172    60,421    18,903    43,160  
         
Cash flows from investing activities:        
Purchase of property and equipment  (3,909)  (1,976)  (8,933)  (4,716)
Investment in short term deposits  (2,159)  -   (2,159)  - 
Net cash used in investing activities  (6,068)  (1,976)  (11,092)  (4,716)
         
Cash flows from financing activities:        
Dividend payment  -   (19,999)  (35,003)  (19,999)
Repayment of long-term loans  -   -   (4,000)  (4,096)
Net cash used in financing activities  -   (19,999)  (39,003)  (24,095)
         
Effect of exchange rate changes on cash, cash equivalents and restricted cash  (51)  270    (303)  (360)
         
Increase (decrease) in cash, cash equivalents and restricted cash  (947)  38,716    (31,495)  13,989  
         
Cash, cash equivalents and restricted cash at the beginning of the period  85,410    77,242    115,958    101,969  
         
Cash, cash equivalents and restricted cash at the end of the period $84,463   $115,958   $84,463   $115,958  
         

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Source: Gilat Satellite Networks Ltd.

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