Gilat Satellite Networks Ltd.
|
|||
(Registrant)
|
|||
Dated August 31, 2020
|
By: /s/ Yael Shofar
|
||
Yael Shofar
|
|||
General Counsel
|
•
|
Revenues for Q2 2020 totaled $38.3 million compared with $59.7 million for Q2 2019.
|
•
|
Q2 2020 - GAAP operating loss was $3.5 million compared to operating income of $4.9 million in Q2 2019. Q2 2020 Non-GAAP operating loss was $2.6 million compared to Non-GAAP operating income of $6.3 in
Q2 2019.
|
•
|
Q2 2020 GAAP net loss was $4.2 million, or loss of $0.08 per diluted share, compared with net income of $3.4 million, or income of $0.06 per diluted share in Q2 2019. Q2 2020 non-GAAP net
loss was $3.3 million, or $0.06 per diluted share, compared with net income of $4.8 million, or $0.09 per diluted share, in Q2 2019.
|
•
|
Q2 2020 Adjusted EBITDA was $0.1 million compared with Adjusted EBITDA of $8.9 million in Q2 2019.
|
•
|
Gilat Awarded Over $10 Million for a Five-Year Service Project for 4G Backhaul Services in Latin America
|
•
|
US Tier-1 Mobile Operator Awards Gilat a Multi-Million Dollar Service Contract for Cellular Backhaul
|
•
|
Africa Mobile Networks (AMN) Extends Gilat’s Contract of Powering Africa’s Largest Satellite Cellular Backhaul Network
|
•
|
Gilat Awarded Cellular Backhaul Project for Kcell, Kazakhstan’s Largest Mobile Network Operator
|
•
|
Gilat Selected to Extend and Expand Managed Service Cellular Backhaul Project by a Leading Mobile Operator in Mexico
|
•
|
Telefonica International Wholesale Services (TIWS) Selects Gilat for Broadband and Cellular Backhaul Project in Argentina
|
•
|
Gilat’s Airborne Technology Enables Opening-up of the Chinese Ka-Band IFEC Market and Driving a Multi-Million Dollar Market Opportunity
|
•
|
Gilat Announces Availability of its Flagship VSAT, Achieving Half a Gigabit of Concurrent Speeds
|
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
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Unaudited
|
Unaudited
|
|||||||||||||||
Revenues
|
$
|
85,988
|
$
|
121,794
|
$
|
38,315
|
$
|
59,685
|
||||||||
Cost of revenues
|
67,514
|
76,239
|
28,727
|
37,700
|
||||||||||||
Gross profit
|
18,474
|
45,555
|
9,588
|
21,985
|
||||||||||||
Research and development expenses
|
13,773
|
16,492
|
6,139
|
7,635
|
||||||||||||
Less - grants
|
472
|
1,094
|
200
|
539
|
||||||||||||
Research and development expenses, net
|
13,301
|
15,398
|
5,939
|
7,096
|
||||||||||||
Selling and marketing expenses
|
8,650
|
11,288
|
3,584
|
5,417
|
||||||||||||
General and administrative expenses (*)
|
7,791
|
9,527
|
2,973
|
4,585
|
||||||||||||
Merger and acquisition costs
|
2,951
|
-
|
546
|
-
|
||||||||||||
Total operating expenses
|
32,693
|
36,213
|
13,042
|
17,098
|
||||||||||||
Operating income (loss)
|
(14,219
|
)
|
9,342
|
(3,454
|
)
|
4,887
|
||||||||||
Financial expenses, net
|
(1,429
|
)
|
(1,400
|
)
|
(457
|
)
|
(579
|
)
|
||||||||
Income (loss) before taxes on income
|
(15,648
|
)
|
7,942
|
(3,911
|
)
|
4,308
|
||||||||||
Taxes on income
|
332
|
1,713
|
314
|
903
|
||||||||||||
Net income (loss)
|
$
|
(15,980
|
)
|
$
|
6,229
|
$
|
(4,225
|
)
|
$
|
3,405
|
||||||
Basic and Diluted earnings (loss) per share
|
$
|
(0.29
|
)
|
$
|
0.11
|
$
|
(0.08
|
)
|
$
|
0.06
|
||||||
Weighted average number of shares used in
|
||||||||||||||||
computing earnings (loss) per share
|
||||||||||||||||
Basic
|
55,499,300
|
55,262,453
|
55,505,342
|
55,327,318
|
||||||||||||
Diluted
|
55,499,300
|
56,014,927
|
55,505,342
|
56,070,351
|
||||||||||||
(*) Including restructuring cost
|
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, 2020
|
June 30, 2019
|
|||||||||||||||||||||||
GAAP
|
Adjustments (1)
|
Non-GAAP
|
GAAP
|
Adjustments (1)
|
Non-GAAP
|
|||||||||||||||||||
Unaudited
|
Unaudited
|
|||||||||||||||||||||||
Gross profit
|
$
|
9,588
|
54
|
$
|
9,642
|
$
|
21,985
|
312
|
$
|
22,297
|
||||||||||||||
Operating expenses
|
13,042
|
(831
|
)
|
12,211
|
17,098
|
(1,077
|
)
|
16,021
|
||||||||||||||||
Operating income (loss)
|
(3,454
|
)
|
885
|
(2,569
|
)
|
4,887
|
1,389
|
6,276
|
||||||||||||||||
Income (loss) before taxes on income
|
(3,911
|
)
|
885
|
(3,026
|
)
|
4,308
|
1,389
|
5,697
|
||||||||||||||||
Net income (loss)
|
(4,225
|
)
|
885
|
(3,340
|
)
|
3,405
|
1,389
|
4,794
|
||||||||||||||||
Earnings (loss) per share (basic and diluted)
|
$
|
(0.08
|
)
|
$
|
0.02
|
$
|
(0.06
|
)
|
$
|
0.06
|
$
|
0.03
|
$
|
0.09
|
||||||||||
Weighted average number of shares used in
|
||||||||||||||||||||||||
computing earnings per share
|
||||||||||||||||||||||||
Basic
|
55,505,342
|
55,505,342
|
55,327,318
|
55,327,318
|
||||||||||||||||||||
Diluted
|
55,505,342
|
55,505,342
|
56,070,351
|
56,218,672
|
||||||||||||||||||||
(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 costs, trade secrets and other litigation expenses and restructuring
and re-organization costs.
|
Three months ended
|
Three months ended
|
|||||||
June 30, 2020
|
June 30, 2019
|
|||||||
Unaudited
|
Unaudited
|
|||||||
GAAP net income (loss)
|
$
|
(4,225
|
)
|
$
|
3,405
|
|||
Gross profit
|
||||||||
Non-cash stock-based compensation expenses
|
49
|
49
|
||||||
Amortization of intangible assets related to acquisition transactions
|
5
|
234
|
||||||
Restructuring and re-organization costs
|
-
|
29
|
||||||
54
|
312
|
|||||||
Operating expenses
|
||||||||
Non-cash stock-based compensation expenses
|
235
|
373
|
||||||
Amortization of intangible assets related to acquisition transactions
|
50
|
49
|
||||||
Trade secrets and other litigation expenses
|
-
|
100
|
||||||
Merger and acquisition costs
|
546
|
-
|
||||||
Restructuring and re-organization costs
|
-
|
555
|
||||||
831
|
1,077
|
|||||||
Non-GAAP net income (loss)
|
$
|
(3,340
|
)
|
$
|
4,794
|
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, 2020
|
June 30, 2019
|
|||||||||||||||||||||||
GAAP
|
Adjustments (1)
|
Non-GAAP
|
GAAP
|
Adjustments (1)
|
Non-GAAP
|
|||||||||||||||||||
Unaudited
|
Unaudited
|
|||||||||||||||||||||||
Gross profit
|
$
|
18,474
|
116
|
$
|
18,590
|
$
|
45,555
|
638
|
$
|
46,193
|
||||||||||||||
Operating expenses
|
32,693
|
(3,937
|
)
|
28,756
|
36,213
|
(1,906
|
)
|
34,307
|
||||||||||||||||
Operating income (loss)
|
(14,219
|
)
|
4,053
|
(10,166
|
)
|
9,342
|
2,544
|
11,886
|
||||||||||||||||
Income (loss) before taxes on income
|
(15,648
|
)
|
4,053
|
(11,595
|
)
|
7,942
|
2,544
|
10,486
|
||||||||||||||||
Net income (loss)
|
(15,980
|
)
|
4,053
|
(11,927
|
)
|
6,229
|
2,544
|
8,773
|
||||||||||||||||
Earnings (loss) per share (basic and diluted)
|
$
|
(0.29
|
)
|
$
|
0.08
|
$
|
(0.21
|
)
|
$
|
0.11
|
$
|
0.05
|
$
|
0.16
|
||||||||||
Weighted average number of shares used in
|
||||||||||||||||||||||||
computing earnings per share
|
||||||||||||||||||||||||
Basic
|
55,499,300
|
55,499,300
|
55,262,453
|
55,262,453
|
||||||||||||||||||||
Diluted
|
55,499,300
|
55,499,300
|
56,014,927
|
56,180,698
|
||||||||||||||||||||
(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 costs, trade secrets and other litigation expenses and restructuring and re-organization costs.
|
Six months ended
|
Six months ended
|
|||||||
June 30, 2020
|
June 30, 2019
|
|||||||
Unaudited
|
Unaudited
|
|||||||
GAAP net income (loss)
|
$
|
(15,980
|
)
|
$
|
6,229
|
|||
Gross profit
|
||||||||
Non-cash stock-based compensation expenses
|
106
|
143
|
||||||
Amortization of intangible assets related to acquisition transactions
|
10
|
466
|
||||||
Restructuring and re-organization costs
|
-
|
29
|
||||||
116
|
638
|
|||||||
Operating expenses
|
||||||||
Non-cash stock-based compensation expenses
|
601
|
1,150
|
||||||
Amortization of intangible assets related to acquisition transactions
|
101
|
101
|
||||||
Trade secrets and other litigation expenses
|
11
|
100
|
||||||
Merger and acquisition costs
|
2,951
|
-
|
||||||
Restructuring and re-organization costs
|
273
|
555
|
||||||
3,937
|
1,906
|
|||||||
Non-GAAP net income (loss)
|
$
|
(11,927
|
)
|
$
|
8,773
|
GILAT SATELLITE NETWORKS LTD.
|
SUPPLEMENTAL INFORMATION
|
U.S. dollars in thousands
|
ADJUSTED EBITDA:
|
Six months ended
|
Three months ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Unaudited
|
Unaudited
|
|||||||||||||||
GAAP operating income (loss)
|
$
|
(14,219
|
)
|
$
|
9,342
|
$
|
(3,454
|
)
|
$
|
4,887
|
||||||
Add:
|
||||||||||||||||
Non-cash stock-based compensation expenses
|
707
|
1,293
|
284
|
422
|
||||||||||||
Trade secrets and other litigation expenses
|
11
|
100
|
-
|
100
|
||||||||||||
Restructuring and re-organization costs
|
273
|
584
|
-
|
584
|
||||||||||||
Merger and acquisition costs
|
2,951
|
-
|
546
|
-
|
||||||||||||
Depreciation and amortization (*)
|
5,382
|
5,786
|
2,718
|
2,909
|
||||||||||||
Adjusted EBITDA
|
$
|
(4,895
|
)
|
$
|
17,105
|
$
|
94
|
$
|
8,902
|
|||||||
(*) Including amortization of lease incentive
|
||||||||||||||||
SEGMENT REVENUE:
|
Six months ended
|
Three months ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Unaudited
|
Unaudited
|
|||||||||||||||
Fixed Networks
|
$
|
44,790
|
$
|
66,836
|
$
|
21,779
|
$
|
30,408
|
||||||||
Mobility Solutions
|
33,207
|
43,499
|
14,006
|
22,587
|
||||||||||||
Terrestrial Infrastructure Projects
|
7,991
|
11,459
|
2,530
|
6,690
|
||||||||||||
Total revenue
|
$
|
85,988
|
$
|
121,794
|
$
|
38,315
|
$
|
59,685
|
GILAT SATELLITE NETWORKS LTD.
|
CONSOLIDATED BALANCE SHEETS
|
U.S. dollars in thousands
|
June 30,
|
December 31,
|
|||||||
2020
|
2019
|
|||||||
Unaudited
|
Audited
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
59,601
|
$
|
74,778
|
||||
Restricted cash
|
25,579
|
27,067
|
||||||
Trade receivables, net
|
28,560
|
47,731
|
||||||
Contract assets
|
32,060
|
23,698
|
||||||
Inventories
|
32,489
|
27,203
|
||||||
Other current assets
|
15,581
|
23,007
|
||||||
Total current assets
|
193,870
|
223,484
|
||||||
LONG-TERM ASSETS:
|
||||||||
Long-term restricted cash
|
117
|
124
|
||||||
Severance pay funds
|
6,425
|
6,831
|
||||||
Deferred taxes
|
18,291
|
18,455
|
||||||
Operating lease right-of-use assets
|
6,353
|
5,211
|
||||||
Other long term receivables
|
9,699
|
10,156
|
||||||
Total long-term assets
|
40,885
|
40,777
|
||||||
PROPERTY AND EQUIPMENT, NET
|
78,781
|
82,584
|
||||||
INTANGIBLE ASSETS, NET
|
1,302
|
1,523
|
||||||
GOODWILL
|
43,468
|
43,468
|
||||||
TOTAL ASSETS
|
$
|
358,306
|
$
|
391,836
|
GILAT SATELLITE NETWORKS LTD.
|
||||
CONSOLIDATED BALANCE SHEETS (Cont.)
|
||||
U.S. dollars in thousands
|
June 30,
|
December 31,
|
|||||||
2020
|
2019
|
|||||||
Unaudited
|
Audited
|
|||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Current maturities of long-term loans
|
$
|
4,000
|
$
|
4,096
|
||||
Trade payables
|
20,129
|
20,725
|
||||||
Accrued expenses
|
48,194
|
54,676
|
||||||
Advances from customers and deferred revenues
|
23,124
|
27,220
|
||||||
Operating lease liabilities
|
2,145
|
1,977
|
||||||
Other current liabilities
|
10,552
|
12,261
|
||||||
Total current liabilities
|
108,144
|
120,955
|
||||||
LONG-TERM LIABILITIES:
|
||||||||
Long-term loans, net of current maturities
|
-
|
4,000
|
||||||
Accrued severance pay
|
6,681
|
7,061
|
||||||
Long-term advances from customers
|
1,180
|
2,866
|
||||||
Operating lease liabilities
|
4,153
|
3,258
|
||||||
Other long-term liabilities
|
1,218
|
108
|
||||||
Total long-term liabilities
|
13,232
|
17,293
|
||||||
SHAREHOLDERS' EQUITY:
|
||||||||
Share capital - ordinary shares of NIS 0.2 par value
|
2,644
|
2,643
|
||||||
Additional paid-in capital
|
928,054
|
927,348
|
||||||
Accumulated other comprehensive loss
|
(6,433
|
)
|
(5,048
|
)
|
||||
Accumulated deficit
|
(687,335
|
)
|
(671,355
|
)
|
||||
Total shareholders' equity
|
236,930
|
253,588
|
||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
358,306
|
$
|
391,836
|
GILAT SATELLITE NETWORKS LTD.
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
U.S. dollars in thousands
|
Six months ended
|
Three months ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Unaudited
|
Unaudited
|
|||||||||||||||
Cash flows from operating activities:
|
||||||||||||||||
Net income (loss)
|
$
|
(15,980
|
)
|
$
|
6,229
|
$
|
(4,225
|
)
|
$
|
3,405
|
||||||
Adjustments required to reconcile net income
|
||||||||||||||||
to net cash provided by operating activities:
|
||||||||||||||||
Depreciation and amortization
|
5,271
|
5,681
|
2,667
|
2,859
|
||||||||||||
Capital loss from disposal of property and equipment
|
23
|
-
|
56
|
-
|
||||||||||||
Stock-based compensation of options
|
707
|
1,293
|
284
|
422
|
||||||||||||
Accrued severance pay, net
|
26
|
382
|
(17
|
)
|
97
|
|||||||||||
Deferred income taxes, net
|
140
|
1,385
|
(494
|
)
|
702
|
|||||||||||
Decrease (increase) in trade receivables, net
|
18,364
|
2,506
|
4,757
|
(5,325
|
)
|
|||||||||||
Decrease (increase) in contract assets
|
(8,362
|
)
|
(232
|
)
|
(3,511
|
)
|
198
|
|||||||||
Decrease (increase) in other assets (including short-term, long-term
|
||||||||||||||||
and deferred charges)
|
6,710
|
(29
|
)
|
5,037
|
50
|
|||||||||||
Decrease (increase) in inventories
|
(5,698
|
)
|
(6,137
|
)
|
937
|
(2,478
|
)
|
|||||||||
Increase (decrease) in trade payables
|
(510
|
)
|
3,933
|
(2,885
|
)
|
4,855
|
||||||||||
Decrease in accrued expenses
|
(5,809
|
)
|
(7,076
|
)
|
(4,157
|
)
|
(4,907
|
)
|
||||||||
Decrease in advance from customers
|
(5,725
|
)
|
(8,405
|
)
|
(2,898
|
)
|
(5,318
|
)
|
||||||||
Increase (decrease) in current and non current liabilities
|
685
|
(1,950
|
)
|
(2,126
|
)
|
(2,813
|
)
|
|||||||||
Net cash used in operating activities
|
(10,158
|
)
|
(2,420
|
)
|
(6,575
|
)
|
(8,253
|
)
|
||||||||
Cash flows from investing activities:
|
||||||||||||||||
Purchase of property and equipment
|
(1,879
|
)
|
(3,587
|
)
|
(928
|
)
|
(1,573
|
)
|
||||||||
Net cash used in investing activities
|
(1,879
|
)
|
(3,587
|
)
|
(928
|
)
|
(1,573
|
)
|
||||||||
Cash flows from financing activities:
|
||||||||||||||||
Exercise of stock options
|
-
|
375
|
-
|
37
|
||||||||||||
Dividend payment
|
-
|
(24,864
|
)
|
-
|
(24,864
|
)
|
||||||||||
Repayment of long-term loans
|
(4,096
|
)
|
(4,231
|
)
|
-
|
(108
|
)
|
|||||||||
Net cash used in financing activities
|
(4,096
|
)
|
(28,720
|
)
|
-
|
(24,935
|
)
|
|||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(539
|
)
|
21
|
156
|
(76
|
)
|
||||||||||
Decrease in cash, cash equivalents and restricted cash
|
(16,672
|
)
|
(34,706
|
)
|
(7,347
|
)
|
(34,837
|
)
|
||||||||
Cash, cash equivalents and restricted cash at the beginning of the period
|
101,969
|
104,204
|
92,644
|
104,335
|
||||||||||||
Cash, cash equivalents and restricted cash at the end of the period
|
$
|
85,297
|
$
|
69,498
|
$
|
85,297
|
$
|
69,498
|