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Gilat Reports First Quarter 2022 Results with Strong Revenue Growth

Reiterates 2022 guidance

PETAH TIKVA, Israel, May 23, 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 first quarter, ended March 31, 2022.

First Quarter 2022 Financial Highlights

  • Revenues of $51.4 million up 19% year-over-year;
  • GAAP operating loss of $1.0 million versus loss of $3.5 million in Q1 last year;
  • Non-GAAP operating loss of $0.3 million versus loss of $3.6 million in Q1 last year;
  • GAAP net loss of $2.5 million versus loss of $5.0 million in Q1 last year;
  • Non-GAAP net loss of $1.8 million versus loss of $5.1 million in Q1 last year;
  • Adjusted EBITDA of $2.5 million versus Adjusted EBITDA loss of $1.3 million in Q1 last year;

Forward-Looking Expectations
The company today reiterated its guidance for 2022. Expectations are for revenues of between $245 to $265 million, representing year-over-year growth of between 14% and 23%. 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 30% to 56%.

Adi Sfadia, Gilat's CEO, commented: "We are pleased with our results showing ongoing revenue growth and EBITDA improvement. Our performance shows that we are successfully capturing market share and capitalizing on the opportunities in our end-markets.

"During this quarter we continued to solidify our presence with additional orders and a broadening pipeline in the next generation satellite communication multi-billion market opportunity. Both our next generation platform, SkyEdge IV that we recently launched, and our SSPA business for this market are progressing as planned. Furthermore, I am pleased with our growth in our target markets, namely: Mobility, Cellular Backhaul, Enterprise and Defense, as well as with the growing opportunities ahead of us."

Mr. Sfadia concluded"I am encouraged with our progress, and despite challenges such as the global supply chain crisis, we feel comfortable with our targets for 2022, and expect to enjoy another year of solid growth in revenue and profitability."

Key Recent Announcements

  • Gilat Announces Filing of 2021 Annual Report
  • Intelsat Selects Gilat in Multimillion-Dollar Deal to Provide Satellite Cellular Backhaul Solution to a Leading Mobile Telecom in the DRC
  • Gilat’s Electronically Steerable Antenna (ESA) for IFC Achieves Breakthrough During Airbus Flight Tests Operating on Spacecom’s Advanced Satellite
  • Intelsat Expands In-Flight Connectivity Capabilities with Strategic Multimillion-Dollar Order for Gilat’s SkyEdge IV Taurus Modems
  • TIM Brasil Reaches Over 1,000 Sites Leveraging Gilat’s Platform to Build the Largest 4G Satellite Cellular Backhaul Network in Latin America

Conference Call Details

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

Date:    Monday, May 23, 2022
Start:     09:30 AM EDT / 16:30 IDT
Dial-in:  US: 1-866-744-5399
 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/gilatq1-2022

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, 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. 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 Gilats products, inability to timely develop and introduce new technologies, products and applications, rapid changes in the market for Gilats 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 Companys proprietary technology and risks associated with Gilats international operations and its location in Israel. For additional information regarding these and other risks and uncertainties associated with Gilats business, reference is made to Gilats 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
GK Investor & Public 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)   
   Three months ended 
   March 31, 
  2022   2021 
        
 Unaudited
    
Revenues$51,409  $43,371 
Cost of revenues 35,021   30,891 
    
Gross profit  16,388     12,480  
    
Research and development expenses, net 7,668   7,927 
Selling and marketing expenses 5,350   5,004 
General and administrative expenses 4,184   3,083 
Impairment of held for sale asset 210   - 
    
Total operating expenses   17,412     16,014  
    
Operating loss   (1,024)   (3,534)
    
Financial expenses, net (1,195)  (1,192)
    
Loss before taxes on income  (2,219)   (4,726)
    
Taxes on income 315   247 
    
Net loss$ (2,534) $ (4,973)
    
Basic and Diluted loss per share$ (0.04) $ (0.09)
    
Weighted average number of shares used in    
computing loss per share   
 Basic 56,551,070    56,031,343  
 Diluted 56,551,070    56,031,343  
    

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
  March 31, 2022 March 31, 2021
  GAAP Adjustments (1) Non-GAAP GAAP Adjustments (1) Non-GAAP
  Unaudited Unaudited
             
Gross profit$16,388   75  $16,463  $12,480   66  $12,546 
Operating expenses 17,412   (683)  16,729   16,014   169   16,183 
Operating loss  (1,024)  758   (266)  (3,534)  (103)  (3,637)
Loss before taxes on income (2,219)  758   (1,461)  (4,726)  (103)  (4,829)
Net loss$ (2,534)  758  $ (1,776) $ (4,973)  (103) $ (5,076)
             
Basic loss per share$ (0.04) $0.01  $ (0.03) $ (0.09) $-  $ (0.09)
             
Diluted loss per share$ (0.04) $0.01  $ (0.03) $ (0.09) $-  $ (0.09)
             
             
Weighted average number of shares used in           
computing loss per share           
 Basic 56,551,070     56,551,070   56,031,343     56,031,343 
 Diluted 56,551,070     56,551,070   56,031,343     56,031,343 
             
             
(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 impairment of held for sale asset.
             
   Three months ended   Three months ended
  March 31, 2022 March 31, 2021
    Unaudited     Unaudited  
             
GAAP net loss  $(2,534)     $(4,973)  
             
Gross profit           
Non-cash stock-based compensation expenses      70           61   
Amortization of intangible assets related to acquisition transactions      5           5   
     75       66   
Operating expenses           
Non-cash stock-based compensation expenses      422           (220)  
Amortization of intangible assets related to acquisition transactions      51           51   
Impairment of held for sale asset   210       -   
     683       (169)  
             
Non-GAAP net loss  $(1,776)     $(5,076)  

    
GILAT SATELLITE NETWORKS LTD.   
SUPPLEMENTAL INFORMATION   
U.S. dollars in thousands   
     
     
ADJUSTED EBITDA:   
    
   Three months ended 
   March 31, 
  2022   2021 
        
 Unaudited
    
GAAP operating profit$(1,024) $(3,534)
Add:   
Non-cash stock-based compensation expenses 492   (159)
Impairment of held for sale asset 210   - 
Depreciation and amortization (*) 2,851   2,385 
    
Adjusted EBITDA$ 2,529   $ (1,308)
    
(*) Including amortization of lease incentive   
    
SEGMENT REVENUE:   
    
   Three months ended 
  March 31, 
  2022   2021 
        
 Unaudited
    
Satellite Networks$24,770  $25,623 
Integrated Solutions 13,706   6,709 
Network Infrastructure and Services 12,933   11,039 
    
Total revenues$ 51,409   $ 43,371  
    

GILAT SATELLITE NETWORKS LTD.   
CONSOLIDATED BALANCE SHEETS   
U.S. dollars in thousands   
    
 March 31, December 31,
  2022   2021 
 Unaudited Audited
    
ASSETS   
    
CURRENT ASSETS:   
Cash and cash equivalents$73,611  $81,859 
Short-term deposits 2,159   2,159 
Restricted cash 1,516   2,592 
Trade receivables, net 45,909   39,161 
Contract assets 28,587   26,008 
Inventories 30,642   28,432 
Other current assets 18,959   14,607 
Held for sale asset 4,377   4,587 
    
Total current assets 205,760   199,405 
    
LONG-TERM ASSETS:   
Restricted cash 13   12 
Long- term contract assets 11,989   12,539 
Severance pay funds 6,485   6,795 
Deferred taxes 17,245   17,551 
Operating lease right-of-use assets 3,652   4,478 
Other long term receivables 11,076   10,456 
    
Total long-term assets 50,460   51,831 
    
PROPERTY AND EQUIPMENT, NET 71,975   72,391 
    
INTANGIBLE ASSETS, NET 530   640 
    
GOODWILL 43,468   43,468 
    
TOTAL ASSETS$372,193  $367,735 
    
    
GILAT SATELLITE NETWORKS LTD.   
CONSOLIDATED BALANCE SHEETS (Cont.)   
U.S. dollars in thousands   
    
 March 31, December 31,
  2022   2021 
 Unaudited Audited
    
LIABILITIES AND SHAREHOLDERS' EQUITY   
    
CURRENT LIABILITIES:   
Trade payables$21,482  $19,776 
Accrued expenses 49,799   49,202 
Advances from customers and deferred revenues 27,265   24,373 
Operating lease liabilities 1,728   1,818 
Other current liabilities 15,201   13,339 
    
Total current liabilities 115,475   108,508 
    
LONG-TERM LIABILITIES:   
Accrued severance pay 6,919   7,292 
Long-term advances from customers 730   1,209 
Operating lease liabilities 1,981   2,283 
Other long-term liabilities 141   120 
    
Total long-term liabilities 9,771   10,904 
    
SHAREHOLDERS' EQUITY:   
Share capital - ordinary shares of NIS 0.2 par value 2,709   2,706 
Additional paid-in capital 930,361   929,871 
Accumulated other comprehensive loss (5,692)  (6,357)
Accumulated deficit (680,431)  (677,897)
    
Total shareholders' equity 246,947   248,323 
    
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$372,193  $367,735 

    
GILAT SATELLITE NETWORKS LTD.   
CONSOLIDATED STATEMENTS OF CASH FLOWS   
U.S. dollars in thousands   
    
  Three months ended 
  March 31, 
  2022   2021 
        
 Unaudited
Cash flows from operating activities:   
Net loss$(2,534) $(4,973)
Adjustments required to reconcile net loss   
to net cash provided by operating activities:   
Depreciation and amortization 2,796   2,330 
Stock-based compensation of options 492   (159)
Accrued severance pay, net (63)  (10)
Deferred taxes, net 306   518 
Increase in trade receivables, net (6,412)  (1,933)
Increase in contract assets (2,009)  (3,179)
Increase in other assets (including short-term, long-term   
and deferred charges) (3,716)  (220)
Increase in inventories (2,344)  (2,212)
Increase in trade payables 1,672   950 
Increase (decrease) in accrued expenses 752   (498)
Increase in advance from customers and deferred revenue 2,310   7,724 
Increase in current and non current liabilities 1,375   2,003 
Net cash provided by (used in) operating activities  (7,375)   341  
    
Cash flows from investing activities:   
Purchase of property and equipment (2,201)  (1,483)
Net cash used in investing activities  (2,201)   (1,483)
    
Cash flows from financing activities:   
Dividend payment -   (35,003)
Repayment of long-term loans -   (4,000)
Net cash used in financing activities  -     (39,003)
    
Effect of exchange rate changes on cash, cash equivalents and restricted cash  253     (254)
    
Decrease in cash, cash equivalents and restricted cash  (9,323)   (40,399)
    
Cash, cash equivalents and restricted cash at the beginning of the period  84,463     115,958  
    
Cash, cash equivalents and restricted cash at the end of the period$ 75,140   $ 75,559  
    

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