Gilat Reports Strong Results in Second Quarter 2021

Revenue is up 49% year-over-year and 27% sequentially with a return
to Non-GAAP profitability

Petah Tikva, Israel - August 10, 2021 - 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

•
Revenues of $56.9 million, a 49% increasefrom $38.3 million in Q2 2020 and up 27% from $44.7 million in the previous quarter.
•
GAAP operating loss of $0.3 million, an improvement compared with an operating loss of $3.5 million in Q2 2020 and an operating loss of $3.7 million in Q1 2021.
•
Non-GAAP operating income of $0.2 million, compared with an operating loss of $2.6 million in Q2 2020 and an operating loss of $3.8 million in the previous quarter.
•
GAAP net loss of $0.1 million, or zero per share, compared with a net loss of $4.2 million, or a loss of $0.08 per share in Q2 2020 and a net loss of $5.1 million, or a loss of $0.09 per share in the previous quarter.
•
Non-GAAP net income of $0.4 million, which is $0.01 per share, compared with a net loss of $3.3 million, or a loss of $0.06 per share in Q2 2020, and compared with a net loss of $5.2 million, or a loss of $0.09 per share, in the previous quarter.
•
Adjusted EBITDA of $2.5 million compared with adjusted EBITDA of $0.1 million in Q2 2020; and an adjusted EBITDA loss of $1.4 million in the previous quarter.
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.'
3

Key Recent Announcements

•
Tier-1 US Terminal Provider Awards Gilat over $5M for Solid State Amplifiers Powering Militaries Worldwide
•
Gilat's Global Mobility Platform Selected by SES in Multi-Million Dollar Order
•
Gilat Receives Multi-Million Dollar Award from US Army to Supply High Performance BUCs for Tactical Communications
•
Gilat Signed a Strategic Agreement Estimated at Over $5 Million with Pacific Dataport for Delivery of Ubiquitous Broadband Coverage in Alaska
•
Gilat Received $2 Million in Orders for Support of Low Earth Orbit Constellation
•
Gilat Awarded Multi-Million Dollar Contract to Provide Satellite Communication Equipment for Defense Forces in Asia
•
Gilat Awarded $9 Million in Orders for Support of Low Earth Orbit Constellation
•
Gilat Awarded Multiple Projects for Armed Forces in Latin America
•
Gilat Awarded Contract to Supply Satellite Communication Equipment for Military Usage
•
Gilat Awarded $13M Contract by Pronatel for Delivery of Internet Services to Hundreds of Sites in Peru
•
Gilat Extends Multi-Million Dollar IoT Project in Latin America
•
Gilat Awarded Over $4 Million in Orders for Support of Low Earth Orbit Constellation
•
Telefonica Global Solutions (TGS) Selects Gilat to Equip Strategic Teleport in Arica, Chile

Conference Call Details

Gilat's 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 Company's website and through the link above.

4

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
5
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
+1 646 688 3559

6
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

7
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
)
8
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
)

9

GILAT SATELLITE NETWORKS LTD.
SUPPLEMENTAL INFORMATION
U.S. dollars in thousands
ADJUSTED EBITDA:

Six months ended
June 30,
Three months ended
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
June 30,
Three months ended
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

10
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

11

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

12
GILAT SATELLITE NETWORKS LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands

Six months ended
June 30,
Three months ended
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

13


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Gilat Satellite Networks Ltd. published this content on 10 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 August 2021 11:13:11 UTC.