Navigate

Gilat Reports Third Quarter 2023 Results

Revenues Grew 6% to $63.9 million;
GAAP Operating Income of $12.7 million and Adjusted EBITDA of $9.5 million, 30% Growth Year-over-Year;

PETAH TIKVA, Israel, Nov. 07, 2023 (GLOBE NEWSWIRE) — Gilat Satellite Networks Ltd. (NASDAQ: GILT, TASE: GILT), a worldwide leader in satellite networking technology, solutions and services, reported today its results for the third quarter, ended September 30, 2023.

Third Quarter 2023 Financial Highlights

  • Revenues of $63.9 million, up 6% compared with $60.4 million in Q3 2022;
  • GAAP operating income of $12.7 million compared with $3.4 million in Q3 2022;
    GAAP operating income in this quarter includes a one-time other income, net, of $7.4 million, that was recorded with respect to a settlement of legal proceedings in the Philippines and a real estate sale in Bulgaria;
  • Non-GAAP operating income of $6.1 million, up 40% compared with $4.4 million in Q3 2022;
  • GAAP net income of $10.2 million, or $0.18 per diluted share, compared with $2.1 million, or $0.04 per diluted share in Q3 2022; GAAP net income in Q3 2023 excluding the one-time other income, net, mentioned above and its relevant tax effect, was $3.8 million, or $0.07 per diluted share;
  • Non-GAAP net income of $4.6 million, or $0.08 per diluted share, up 51% compared with $3 million, or $0.06 per diluted share in Q3 2022;
  • Adjusted EBITDA of $9.5 million, up 30% compared with $7.3 million in Q3 2022;

Forward-Looking Expectations

The Company narrowed the range of its 2023 revenue guidance, with expectations of between $265 million to $275 million, representing year-over-year growth of 13% at the mid-point. The Company increased the range of its GAAP operating income guidance range to between $29 million to $31 million representing significant year-over-year growth compared with $10 million in 2022. The Company also narrowed the range of its Adjusted EBITDA guidance to between $35 to $37 million, representing year-over-year growth of 43% at the mid-point.

Adi Sfadia, Gilat’s CEO, commented:

“We are deeply saddened by the tragic events of October 7th in Israel. Our thoughts and prayers are with the victims and families of this horrific attack – the murdered, the hostages, the wounded and their families. We are very proud of our employees’ response to this crisis and their dedication to the company during these times. We also want to thank our customers and suppliers and the world community at large for their full hearted support. 

As a strong global company with operation and development centers worldwide, our operation remains unaffected by recent events in Israel. We continue to closely monitor the situation and have implemented relevant measures, and refreshed our business continuity plans to minimize any potential effect, if at all, to our business.”

Mr. Sfadia continued, ”We are pleased with our results, particularly the continued revenue growth combined with the solid improvement in our profitability. We reported significantly improved profitability including Adjusted EBITDA, demonstrating the operating leverage inherent in our business. The ongoing good performance was due to the continued growing interest in our solutions as well as advancements in the satellite communications space in general.”

Mr. Sfadia concluded, “Our strong performance in 2023 to date, has generated Adjusted EBITDA of $27 million in the nine months ended September 30, 2023 which already exceeds the Adjusted EBITDA from the whole of 2022. Given our leading position in the market and the opportunities we see ahead, we look forward to continuing our growth into 2024 and beyond.”

Key Recent Announcements

  • Gilat Awarded Approximately $20 Million in Contract Renewal and Extension from Tier-1 MNO in the USA
  • Gilat Awarded Contract for Satellite Network Modernization at Ethio Telecom

Conference Call Details
Gilat’s management will discuss its third quarter 2023 results and business achievements and participate in a question-and-answer session:

Date: Tuesday, November 7, 2023
Start: 09:30 AM EST / 16:30 IST
Dial-in: US: 1-888-407-2553
 International: +972-3-918-0609
 Â

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/gilatq3-2023

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 gross profit, operating expenses, operating income, income before taxes on income, net 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 with a more complete understanding of the Company’s underlying operational results, trends, and performance. Non-GAAP financial measures mainly exclude, if and when applicable, the effect of non-cash stock-based compensation expenses, amortization of purchased intangibles, amortization of intangible assets related to acquisition transactions, lease incentive amortization, impairment of held for sale asset, income tax effect on adjustments, one-time changes of deferred tax assets, and other operating expenses (income), net.

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 net income and adjusted EBITDA is presented in the attached summary financial statements.

Non-GAAP presentations of gross profit, operating expenses, operating income, income before taxes on income, net 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 over 35 years of experience, we create and deliver deep technology solutions for satellite, ground and new space connectivity and provide comprehensive end-to-end solutions and services, powered by our innovative technology. We believe in the right of all people to be connected and are united in our resolution to provide communication solutions to all reaches of the world.

Delivering high value solutions, our portfolio is comprised of a cloud-based platform and high performance satellite terminals designed to work in harmony with satellite constellations, including Very High Throughput Satellites (VHTS) and Software-Defined Satellites (SDS) in multiple orbits; high performance Satellite On-the-Move (SOTM) antennas; and highly efficient, high-power Solid State Power 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, mobility, cellular backhaul, military, government, and enterprise, 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 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

Gilat Satellite Networks
Mayrav Sher, Head of Finance and Investor Relations
MayravS@gilat.com

EK Global IR
Ehud Helft, Managing Partner
ehud@ekgir.com

 

GILAT SATELLITE NETWORKS LTD. Â Â Â Â Â Â Â Â
CONSOLIDATED STATEMENTS OF INCOME Â Â Â Â Â Â Â Â
U.S. dollars in thousands (except share and per share data) Â Â Â Â Â Â Â
  Nine months ended
 		Â Three months ended
  September 30,
 		Â September 30,
   2023   2022   2023   2022
  Unaudited  Unaudited
        Â
Revenues  $ 190,478   $ 167,213  $ 63,927   $ 60,350
Cost of revenues   114,453    108,021   38,123    37,315
        Â
Gross profit   76,025    59,192   25,804    23,035
        Â
Research and development expenses, net   29,549    25,542   10,546    9,156
Selling and marketing expenses   18,124    15,724   6,183    5,414
General and administrative expenses   12,903   *) 13,214   3,748   *) 4,719
Impairment of held for sale asset   –    718   –    279
Other operating expenses (income), net   (9,757 )  *) 111   (7,417 )  *) 51
        Â
Total operating expenses   50,819    55,309   13,060    19,619
        Â
Operating income   25,206    3,883   12,744    3,416
        Â
Financial expenses, net   1,087    2,716   352    1,053
        Â
Income before taxes on income   24,119    1,167   12,392    2,363
        Â
Taxes on income   4,062    1,075   2,240    243
        Â
Net income  $ 20,057   $ 92  $ 10,152   $ 2,120
        Â
Earnings per share (basic and diluted) Â $ 0.35 Â Â $ 0.00 Â $ 0.18 Â Â $ 0.04
        Â
Weighted average number of shares used in computing earnings per share        Â
Basic   56,618,407    56,585,858   56,623,793    56,608,981
Diluted   56,623,125    56,604,854   56,624,966    56,626,283
        Â
*) Reclassified        Â
        Â

GILAT SATELLITE NETWORKS LTD.
RECONCILIATION BETWEEN GAAP AND NON-GAAP CONSOLIDATED STATEMENTS OF INCOME
FOR COMPARATIVE PURPOSES
U.S. dollars in thousands (except share and per share data)
  Three months ended  Three months ended
  September 30, 2023  September 30, 2022
  GAAP  Adjustments(*)  Non-GAAP  GAAP  Adjustments(*)  Non-GAAP
  Unaudited  Unaudited
            Â
Gross profit $ 25,804 Â $ 108 Â Â $ 25,912 Â $ 23,035 Â $ 74 Â Â $ 23,109
Operating expenses  13,060   6,753    19,813   19,619   (879 )   18,740
Operating income  12,744   (6,645 )   6,099   3,416   953    4,369
Income before taxes on income  12,392   (6,645 )   5,747   2,363   953    3,316
Net income $ 10,152 Â $ (5,568 ) Â $ 4,584 Â $ 2,120 Â $ 911 Â Â $ 3,031
            Â
Earnings per share (basic and diluted) $ 0.18 Â $ (0.10 ) Â $ 0.08 Â $ 0.04 Â $ 0.02 Â Â $ 0.06
            Â
            Â
Weighted average number of shares used in computing earnings per share           Â
            Â
 Basic  56,623,793     56,623,793   56,608,981     56,608,981
 Diluted  56,624,966     56,906,057   56,626,283     56,652,855
            Â
            Â
(*) Adjustments reflect the effect of non-cash stock-based compensation expenses as per ASC 718, amortization of intangible assets related to acquisition transactions, impairment of held for sale asset, other operating expenses (income), net and income tax effect on adjustments which is calculated using the relevant effective tax rate.
            Â
            Â
  Three months ended  Three months ended
  September 30, 2023  September 30, 2022
    Unaudited      Unaudited  Â
            Â
GAAP net income   $ 10,152       $ 2,120   Â
            Â
Gross profit           Â
Non-cash stock-based compensation expenses     108        74   Â
     108        74   Â
Operating expenses           Â
Non-cash stock-based compensation expenses     614        498   Â
Amortization of intangible assets related to acquisition transactions    50        51   Â
Impairment of held for sale asset    –        279   Â
Other operating expenses (income), net    (7,417 )       51   Â
     (6,753 )       879   Â
            Â
Income tax effect on adjustments    1,077        (42 )  Â
            Â
Non-GAAP net income   $ 4,584       $ 3,031   Â
            Â

GILAT SATELLITE NETWORKS LTD.
RECONCILIATION BETWEEN GAAP AND NON-GAAP CONSOLIDATED STATEMENTS OF INCOME
FOR COMPARATIVE PURPOSES
U.S. dollars in thousands (except share and per share data)
  Nine months ended  Nine months ended
  September 30, 2023  September 30, 2022
  GAAP  Adjustments(*)
 		Â Non-GAAP Â GAAP Â Adjustments(*)
 		Â Non-GAAP
  Unaudited  Unaudited
            Â

Gross profit		 $ 76,025 Â $ 278 Â Â $ 76,303 Â $ 59,192 Â $ 230 Â Â $ 59,422
Operating expenses  50,819   8,049    58,868   55,309   (2,394 )   52,915
Operating income  25,206   (7,771 )   17,435   3,883   2,624    6,507
Income before taxes on income  24,119   (7,771 )   16,348   1,167   2,624    3,791
Net income $ 20,057 Â $ (6,694 ) Â $ 13,363 Â $ 92 Â $ 2,582 Â Â $ 2,674
            Â
Earnings per share (basic and diluted) $ 0.35 Â $ (0.11 ) Â $ 0.24 Â $ 0.00 Â $ 0.05 Â Â $ 0.05
            Â
            Â
Weighted average number of shares used in computing earnings per share           Â
 Basic  56,618,407     56,618,407   56,585,858     56,585,858
 Diluted  56,623,125     56,716,822   56,604,854     56,659,298
            Â
            Â
(*)  Adjustments reflect the effect of non-cash stock-based compensation expenses as per ASC 718, amortization of intangible assets related to acquisition transactions, impairment of held for sale asset, other operating expenses (income), net and income tax effect on adjustments which is calculated using the relevant effective tax rate.
Â
            Â
            Â
  Nine months ended  Nine months ended
  September 30, 2023  September 30, 2022
    Unaudited      Unaudited  Â
            Â
GAAP net income   $ 20,057       $ 92   Â
            Â

Gross profit		 Â Â Â Â Â Â Â Â Â Â Â
Non-cash stock-based compensation expenses    278        220   Â

Amortization of intangible assets related to acquisition transactions 		    –        10   Â
     278        230   Â
Operating expenses           Â
Non-cash stock-based compensation expenses    1,558        1,413   Â
Amortization of intangible assets related to acquisition transactions     150        152   Â
Impairment of held for sale asset    –        718   Â
Other operating expenses (income), net    (9,757 )       111   Â
     (8,049 )       2,394   Â
            Â
Income tax effect on adjustments    1,077        (42 )  Â
            Â
Non-GAAP net income   $ 13,363       $ 2,674   Â
            Â

GILAT SATELLITE NETWORKS LTD. Â Â Â Â Â Â Â
SUPPLEMENTAL INFORMATION Â Â Â Â Â Â Â
U.S. dollars in thousands       Â
       Â
ADJUSTED EBITDA: Â Â Â Â Â Â Â
       Â
 Nine months ended
 		Â Three months ended
 September 30,
 		Â September 30,
  2023   2022   2023   2022
 Unaudited  Unaudited
       Â
GAAP net income $ 20,057 Â Â $ 92 Â $ 10,152 Â Â $ 2,120
Adjustments: Â Â Â Â Â Â Â
Financial expenses, net  1,087    2,716   352    1,053
Taxes on income  4,062    1,075   2,240    243
Non-cash stock-based compensation expenses  1,836    1,633   722    572
Impairment of held for sale asset  –    718   –    279
Other operating expenses (income), net  (9,757 )   111   (7,417 )   51
Depreciation and amortization (*) Â 9,765 Â Â Â 8,770 Â Â 3,430 Â Â Â 2,978
       Â
Adjusted EBITDA $ 27,050 Â Â $ 15,115 Â $ 9,479 Â Â $ 7,296
       Â
(*) Including amortization of lease incentive       Â
       Â
SEGMENT REVENUES: Â Â Â Â Â Â Â
     Â
 Nine months ended  Three months ended
 September 30,  September 30,
  2023   2022   2023   2022
 Unaudited  Unaudited
       Â
Satellite Networks $ 115,010 Â Â $ 83,993 Â $ 40,737 Â Â $ 32,366
Integrated Solutions  36,630    45,047   11,011    15,650
Network Infrastructure and Services  38,838    38,173   12,179    12,334
       Â
Total revenues $ 190,478 Â Â $ 167,213 Â $ 63,927 Â Â $ 60,350
       Â

GILAT SATELLITE NETWORKS LTD. Â Â Â Â
CONSOLIDATED BALANCE SHEETS Â Â Â Â
U.S. dollars in thousands    Â
    Â
  September 30,  December 31,
   2023    2022 Â
  Unaudited  Audited
    Â
ASSETS Â Â Â Â
    Â
CURRENT ASSETS: Â Â Â Â
Cash and cash equivalents  $ 99,530   $ 86,591 Â
Restricted cash   749    541 Â
Trade receivables, net   46,966    50,644 Â
Contract assets   20,522    24,971 Â
Inventories   37,673    33,024 Â
Other current assets   20,407    19,283 Â
    Â
Total current assets   225,847    215,054 Â
    Â
LONG-TERM ASSETS: Â Â Â Â
Restricted cash   14    13 Â
Long-term contract assets   9,283    11,149 Â
Severance pay funds   5,407    5,947 Â
Deferred taxes   14,500    18,265 Â
Operating lease right-of-use assets   3,609    3,891 Â
Other long-term assets   8,920    10,737 Â
    Â
Total long-term assets   41,733    50,002 Â
    Â
PROPERTY AND EQUIPMENT, NET Â Â 73,697 Â Â Â 76,578 Â
    Â
INTANGIBLE ASSETS, NET Â Â 165 Â Â Â 309 Â
    Â
GOODWILL Â Â 43,468 Â Â Â 43,468 Â
    Â
TOTAL ASSETS Â $ 384,910 Â Â $ 385,411 Â
    Â
GILAT SATELLITE NETWORKS LTD. Â Â Â Â
CONSOLIDATED BALANCE SHEETS (Cont.) Â Â Â Â
U.S. dollars in thousands    Â
    Â
  September 30,  December 31,
   2023    2022 Â
  Unaudited  Audited
    Â
LIABILITIES AND SHAREHOLDERS’ EQUITY    Â
    Â
CURRENT LIABILITIES: Â Â Â Â
Trade payables  $ 13,884   $ 20,668 Â
Accrued expenses   45,534    50,356 Â
Advances from customers and deferred revenues   33,108    30,531 Â
Operating lease liabilities   2,128    1,941 Â
Other current liabilities   15,745    22,291 Â
    Â
   Total current liabilities   110,399    125,787 Â
    Â
LONG-TERM LIABILITIES: Â Â Â Â
Accrued severance pay   6,195    6,580 Â
Long-term advances from customers and deferred revenues   1,123    1,041 Â
Operating lease liabilities   1,403    1,890 Â
Other long-term liabilities   279    5,988 Â
    Â
Total long-term liabilities   9,000    15,499 Â
    Â
SHAREHOLDERS’ EQUITY:    Â
Share capital – ordinary shares of NIS 0.2 par value   2,712    2,711 Â
Additional paid-in capital   933,921    932,086 Â
Accumulated other comprehensive loss   (7,354 )   (6,847 )
Accumulated deficit   (663,768 )   (683,825 )
    Â
Total shareholders’ equity   265,511    244,125 Â
    Â
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 384,910   $ 385,411 Â
    Â

GILAT SATELLITE NETWORKS LTD. Â Â Â Â Â Â Â Â
CONSOLIDATED STATEMENTS OF CASH FLOWS Â Â Â Â Â Â Â Â
U.S. dollars in thousands        Â
        Â
  Nine months ended
 		Â Three months ended
  September 30,
 		Â September 30,
   2023    2022    2023    2022 Â
  Unaudited  Unaudited
Cash flows from operating activities: Â Â Â Â Â Â Â Â
Net income  $ 20,057   $ 92   $ 10,152   $ 2,120 Â
Adjustments required to reconcile net income to net cash provided by (used in) operating activities:        Â
Depreciation and amortization   9,597    8,604    3,375    2,921 Â
Capital gain from sale of property   (2,084 )   –    (2,084 )   – Â
Impairment of held for sale asset   –    718    –    279 Â
Stock-based compensation   1,836    1,633    722    572 Â
Accrued severance pay, net   155    92    (41 )   (22 )
Deferred taxes, net   3,865    1,823    2,045    159 Â
Decrease (increase) in trade receivables, net   3,887    (12,270 )   (5,511 )   (387 )
Decrease (increase) in contract assets   6,110    (2,290 )   (2,268 )   318 Â
Decrease (increase) in other assets and other adjustments (including short-term, long-term and effect of exchange rate changes on cash and cash equivalents)   3,598    (8,652 )   3,355    (889 )
Decrease (increase) in inventories   (6,185 )   (6,030 )   1,710    (1,955 )
Increase (decrease) in trade payables   (5,321 )   4,315    (1,081 )   110 Â
Increase (decrease) in accrued expenses   (2,782 )   (1,767 )   2,257    (77 )
Increase (decrease) in advance from customers and deferred revenues   2,646    7,397    (478 )   387 Â
Increase (decrease) in other liabilities   (13,392 )   365    1,617    1,175 Â
Net cash provided by (used in) operating activities   21,987    (5,970 )   13,770    4,711 Â
        Â
Cash flows from investing activities: Â Â Â Â Â Â Â Â
Purchase of property and equipment   (8,656 )   (9,225 )   (2,100 )   (4,710 )
Proceeds from short term deposits   –    2,159    –    – Â
Investment in financial instrument   –    (1,536 )   –    (1,536 )
Receipts from sale of property   2,168    –    2,168    – Â
Net cash provided by (used in) investing activities   (6,488 )   (8,602 )   68    (6,246 )
        Â
Effect of exchange rate changes on cash, cash equivalents and restricted cash   (2,351 )   (15 )   (1,341 )   (47 )
        Â
Increase (decrease) in cash, cash equivalents and restricted cash   13,148    (14,587 )   12,497    (1,582 )
        Â
Cash, cash equivalents and restricted cash at the beginning of the period   87,145    84,463    87,796    71,458 Â
        Â
Cash, cash equivalents and restricted cash at the end of the period  $ 100,293   $ 69,876   $ 100,293   $ 69,876 Â
        Â

Alex:
Related Post
  1. Gilead Showcases Latest HIV Pipeline Progress and the Impact of Global Collaboration on Health Equity Efforts at IAS 2023
  2. JAMA Oncology Publishes Data from Zai Lab Study Demonstrating Significant Reduction in Disease Progression or Death with ZEJULA (Niraparib) Maintenance Therapy in Broad Population of Advanced Ovarian Cancer Patients
  3. Volume 3 APAC Flavours and Fragrances Market Overview 2022: Players Include IFF, Kerry, Mane SA, Robertet, Sensient and Symrise – ResearchAndMarkets.com

Search