Gilat Satellite Networks Ltd.
|
||
(Registrant)
|
||
Dated November 10, 2020
|
By: /s/ Yael Shofar
|
|
Yael Shofar
|
||
General Counsel
|
• |
Revenues were $37.3 million; compared to $63.4 million in Q3 2019 and similar to that of the previous quarter.
|
• |
GAAP operating loss was $10.9 million compared to operating income of $7.0 million in Q3 2019 and an operating loss of $3.5 million in the previous quarter. The GAAP operating loss in
the quarter includes $8.2 million in expenses related to the Comtech merger and litigation and their effects.
|
• |
Non-GAAP operating loss in the quarter was $1.9 million compared with operating income of $7.5 million in Q3 2019 and compared to an operating loss of $2.6 million in the previous
quarter.
|
• |
GAAP net loss was $11.6 million, or loss of $0.21 per share, compared with net income of $6.3 million, or income of $0.11 per diluted share in Q3 2019; GAAP net loss in the previous
quarter was $4.2 million, or loss of $0.08 per share.
|
• |
Non-GAAP net loss was $2.6 million, or $0.05 per diluted share, compared with net income of $6.8 million, or $0.12 per diluted share, in Q3 2019, and compared with net loss of $3.3
million, or $0.06 per share, as reported in the prior quarter;
|
• |
Adjusted EBITDA was $0.6 million compared with adjusted EBITDA of $10.1 million in Q3 2019, and adjusted EBITDA of $0.1 million in the previous quarter.
|
• |
Gilat plans to distribute $55 million as a cash dividend, out of which $20 million was declared and will be paid on December 2nd, 2020 and an additional $35 million
to be declared subject to court approval.
|
• |
Income from the merger termination and litigation settlement paid by Comtech will be recorded in Q4 2020.
|
• |
SES and Gilat Expand Partnership with Multi-Million-Dollar Follow-on Order for High-Speed Modems
|
• |
Gilat Hires BG (Res.) Eyal Zelinger as Global Defense Vice President and General Manager
|
• |
Gilat Plans to Distribute $55 Million in Dividends to Shareholders
|
• |
Gilat Successfully Demonstrates Carrying 5G Traffic with Outstanding Performance over Thaicom's GEO HTS Satellite
|
• |
US Department of Defense Awards Gilat Multi-Million-Dollar Orders for Military Communications Program
|
• |
Gilat Awarded $20 Million Cellular Backhaul Managed Service Contract Renewal and Expansion from Tier-1 MNO in the United States
|
• |
Gilat Satellite Networks Chosen by Southern Linc for 4G Cellular Backhaul Services
|
• |
Comtech Telecommunications Corp. and Gilat Satellite Networks Ltd. Terminate Merger Agreement and Settle Litigation
|
Date:
|
Tuesday, November 10, 2020
|
Start:
|
09:30 AM EST / 16:30 IST
|
Dial-in:
|
US: 1-866-744-5399
|
International: (972) 3-918-0609 |
Start:
|
November 10, 2020 at 12:00 PM EST / 19:00 IST
|
End:
|
November 13, 2020 at 12:00 PM EST / 19:00 IST
|
Dial-in:
|
US: 1-888-326-9310
|
|
International: (972) 3-925-5904
|
GILAT SATELLITE NETWORKS LTD.
|
||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||||
U.S. dollars in thousands (except share and per share data)
|
||||||||||||||||
Nine months ended
|
Three months ended
|
|||||||||||||||
September, 30
|
September, 30
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Unaudited
|
Unaudited
|
|||||||||||||||
Revenues
|
$
|
123,258
|
$
|
185,178
|
$
|
37,270
|
$
|
63,384
|
||||||||
Cost of revenues
|
95,341
|
116,369
|
27,827
|
40,130
|
||||||||||||
Gross profit
|
27,917
|
68,809
|
9,443
|
23,254
|
||||||||||||
Research and development expenses
|
20,215
|
24,088
|
6,442
|
7,596
|
||||||||||||
Less - grants
|
932
|
1,610
|
460
|
516
|
||||||||||||
Research and development expenses, net
|
19,283
|
22,478
|
5,982
|
7,080
|
||||||||||||
Selling and marketing expenses
|
12,337
|
16,332
|
3,687
|
5,044
|
||||||||||||
General and administrative expenses
|
10,269
|
13,666
|
2,478
|
4,139
|
||||||||||||
Merger, acquisition and related litigation
|
11,149
|
-
|
8,198
|
-
|
||||||||||||
Total operating expenses
|
53,038
|
52,476
|
20,345
|
16,263
|
||||||||||||
Operating income (loss)
|
(25,121
|
)
|
16,333
|
(10,902
|
)
|
6,991
|
||||||||||
Financial expenses, net
|
(1,715
|
)
|
(1,940
|
)
|
(286
|
)
|
(540
|
)
|
||||||||
Income (loss) before taxes on income
|
(26,836
|
)
|
14,393
|
(11,188
|
)
|
6,451
|
||||||||||
Taxes on income
|
695
|
1,876
|
363
|
163
|
||||||||||||
Net income (loss)
|
$
|
(27,531
|
)
|
$
|
12,517
|
$
|
(11,551
|
)
|
$
|
6,288
|
||||||
Basic earnings (loss) per share
|
$
|
(0.50
|
)
|
$
|
0.23
|
$
|
(0.21
|
)
|
$
|
0.11
|
||||||
Diluted earnings (loss) per share
|
$
|
(0.50
|
)
|
$
|
0.22
|
$
|
(0.21
|
)
|
$
|
0.11
|
||||||
Weighted average number of shares used in computing earnings (loss) per share
|
||||||||||||||||
Basic
|
55,506,266
|
55,329,617
|
55,520,197
|
55,463,945
|
||||||||||||
Diluted
|
55,506,266
|
56,029,698
|
55,520,197
|
56,059,239
|
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
|
|||||||||||||||||||||||
September 30, 2020
|
September 30, 2019
|
|||||||||||||||||||||||
GAAP
|
Adjustments (1)
|
Non-GAAP
|
GAAP
|
Adjustments (1)
|
Non-GAAP
|
|||||||||||||||||||
Unaudited
|
Unaudited
|
|||||||||||||||||||||||
Gross profit
|
$
|
9,443
|
28
|
$
|
9,471
|
$
|
23,254
|
68
|
$
|
23,322
|
||||||||||||||
Operating expenses
|
20,345
|
(8,950
|
)
|
11,395
|
16,263
|
(433
|
)
|
15,830
|
||||||||||||||||
Operating income (loss)
|
(10,902
|
)
|
8,978
|
(1,924
|
)
|
6,991
|
501
|
7,492
|
||||||||||||||||
Net income (loss)
|
(11,551
|
)
|
8,978
|
(2,573
|
)
|
6,288
|
501
|
6,789
|
||||||||||||||||
Earnings (loss) per share (basic and diluted)
|
$
|
(0.21
|
)
|
$
|
0.16
|
$
|
(0.05
|
)
|
$
|
0.11
|
$
|
0.01
|
$
|
0.12
|
||||||||||
Weighted average number of shares used in computing earnings per share
|
||||||||||||||||||||||||
Basic
|
55,520,197
|
55,520,197
|
55,463,945
|
55,463,945
|
||||||||||||||||||||
Diluted
|
55,520,197
|
55,520,197
|
56,059,239
|
56,179,331
|
|
September 30, 2020
|
|
September 30, 2019
|
|||||||||||||||||||||
Unaudited
|
Unaudited
|
|||||||||||||||||||||||
GAAP net income (loss)
|
$
|
(11,551
|
)
|
$
|
6,288
|
|||||||||||||||||||
Gross profit
|
||||||||||||||||||||||||
Non-cash stock-based compensation expenses
|
21
|
55
|
||||||||||||||||||||||
Amortization of intangible assets related to acquisition transactions
|
7 |
13 |
||||||||||||||||||||||
28
|
68
|
|||||||||||||||||||||||
Operating expenses
|
||||||||||||||||||||||||
Non-cash stock-based compensation expenses
|
259
|
382
|
||||||||||||||||||||||
Amortization of intangible assets related to acquisition transactions
|
49 |
51
|
||||||||||||||||||||||
Merger, acquisition and related litigation
|
8,198
|
-
|
||||||||||||||||||||||
Restructuring and re-organization costs
|
444
|
-
|
||||||||||||||||||||||
8,950
|
433
|
|||||||||||||||||||||||
Non-GAAP net income (loss)
|
$
|
(2,573
|
)
|
$
|
6,789
|
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)
|
||||||||||||||||||||||||
Nine months ended
|
Nine months ended
|
|||||||||||||||||||||||
September 30, 2020
|
September 30, 2019
|
|||||||||||||||||||||||
GAAP
|
Adjustments (1)
|
Non-GAAP
|
GAAP
|
Adjustments (1)
|
Non-GAAP
|
|||||||||||||||||||
Unaudited
|
Unaudited
|
|||||||||||||||||||||||
Gross profit
|
$
|
27,917
|
144
|
$
|
28,061
|
$
|
68,809
|
706
|
$
|
69,515
|
||||||||||||||
Operating expenses
|
53,038
|
(12,887
|
)
|
40,151
|
52,476
|
(2,339
|
)
|
50,137
|
||||||||||||||||
Operating income (loss)
|
(25,121
|
)
|
13,031
|
(12,090
|
)
|
16,333
|
3,045
|
19,378
|
||||||||||||||||
Net income (loss)
|
(27,531
|
)
|
13,031
|
(14,500
|
)
|
12,517
|
3,045
|
15,562
|
||||||||||||||||
Basic earnings (loss) per share
|
$
|
(0.50
|
)
|
$
|
0.24
|
$
|
(0.26
|
)
|
$
|
0.23
|
$
|
0.05
|
$
|
0.28
|
||||||||||
Diluted earnings (loss) per share
|
$
|
(0.50
|
)
|
$
|
0.24
|
$
|
(0.26
|
)
|
$
|
0.22
|
$
|
0.06
|
$
|
0.28
|
||||||||||
Weighted average number of shares used in computing earnings per share
|
||||||||||||||||||||||||
Basic
|
55,506,266
|
55,506,266
|
55,329,617
|
55,329,617
|
||||||||||||||||||||
Diluted
|
55,506,266
|
55,506,266
|
56,029,698
|
56,180,242
|
|
Nine months ended
|
|
Nine months ended
|
|||||||||||||||||||||
|
September 30, 2020
|
|
September 30, 2019
|
|||||||||||||||||||||
Unaudited
|
Unaudited
|
|||||||||||||||||||||||
GAAP net income (loss)
|
$
|
(27,531
|
)
|
$
|
12,517
|
|||||||||||||||||||
Gross profit
|
||||||||||||||||||||||||
Non-cash stock-based compensation expenses
|
127
|
198
|
||||||||||||||||||||||
Amortization of intangible assets related to acquisition transactions
|
17 |
479
|
||||||||||||||||||||||
Restructuring and re-organization costs
|
-
|
29
|
||||||||||||||||||||||
144
|
706
|
|||||||||||||||||||||||
Operating expenses
|
||||||||||||||||||||||||
Non-cash stock-based compensation expenses
|
860
|
1,532
|
||||||||||||||||||||||
Amortization of intangible assets related to acquisition transactions
|
150 |
152
|
||||||||||||||||||||||
Trade secrets and other litigation expenses
|
11
|
100
|
||||||||||||||||||||||
Merger, acquisition and related litigation
|
11,149
|
-
|
||||||||||||||||||||||
Restructuring and re-organization costs
|
717
|
555
|
||||||||||||||||||||||
12,887
|
2,339
|
|||||||||||||||||||||||
Non-GAAP net income (loss)
|
$
|
(14,500
|
)
|
$
|
15,562
|
GILAT SATELLITE NETWORKS LTD.
|
||||||||||||||||
SUPPLEMENTAL INFORMATION
|
||||||||||||||||
U.S. dollars in thousands
|
||||||||||||||||
ADJUSTED EBITDA:
|
||||||||||||||||
Nine months ended
|
Three months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Unaudited
|
Unaudited
|
|||||||||||||||
GAAP operating income (loss)
|
$
|
(25,121
|
)
|
$
|
16,333
|
$
|
(10,902
|
)
|
$
|
6,991
|
||||||
Add:
|
||||||||||||||||
Non-cash stock-based compensation expenses
|
987
|
1,730
|
280
|
437
|
||||||||||||
Trade secrets and other litigation expenses
|
11
|
100
|
-
|
-
|
||||||||||||
Restructuring and re-organization costs
|
717
|
585
|
444
|
-
|
||||||||||||
Merger, acquisition and related litigation
|
11,149
|
-
|
8,198
|
-
|
||||||||||||
Depreciation and amortization (*)
|
7,924
|
8,413
|
2,542
|
2,627
|
||||||||||||
Adjusted EBITDA
|
$
|
(4,333
|
)
|
$
|
27,161
|
$
|
562
|
$
|
10,055
|
(*) Including amortization of lease incentive
|
||||||||||||||||
SEGMENT REVENUE:
|
||||||||||||||||
Nine months ended
|
Three months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Unaudited
|
Unaudited
|
|||||||||||||||
Fixed Networks
|
$
|
67,587
|
$
|
94,104
|
$
|
22,797
|
$
|
27,268
|
||||||||
Mobility Solutions
|
42,417
|
70,615
|
9,210
|
27,116
|
||||||||||||
Terrestrial Infrastructure Projects
|
13,254
|
20,459
|
5,263
|
9,000
|
||||||||||||
Total revenue
|
$
|
123,258
|
$
|
185,178
|
$
|
37,270
|
$
|
63,384
|
GILAT SATELLITE NETWORKS LTD.
|
||||||||
CONSOLIDATED BALANCE SHEETS
|
||||||||
U.S. dollars in thousands
|
||||||||
September 30,
|
December 31,
|
|||||||
2020
|
2019
|
|||||||
Unaudited
|
Audited
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
51,574
|
$
|
74,778
|
||||
Restricted cash
|
25,628
|
27,067
|
||||||
Trade receivables, net
|
26,199
|
47,731
|
||||||
Contract assets
|
38,102
|
23,698
|
||||||
Inventories
|
31,816
|
27,203
|
||||||
Other current assets
|
16,558
|
23,007
|
||||||
Total current assets
|
189,877
|
223,484
|
||||||
LONG-TERM ASSETS:
|
||||||||
Long-term restricted cash
|
40
|
124
|
||||||
Severance pay funds
|
6,227
|
6,831
|
||||||
Deferred taxes
|
18,329
|
18,455
|
||||||
Operating lease right-of-use assets
|
5,665
|
5,211
|
||||||
Other long term receivables
|
7,796
|
10,156
|
||||||
Total long-term assets
|
38,057
|
40,777
|
||||||
PROPERTY AND EQUIPMENT, NET
|
77,618
|
82,584
|
||||||
INTANGIBLE ASSETS, NET
|
1,192
|
1,523
|
||||||
GOODWILL
|
43,468
|
43,468
|
||||||
TOTAL ASSETS
|
$
|
350,212
|
$
|
391,836
|
GILAT SATELLITE NETWORKS LTD.
|
||||||||
CONSOLIDATED BALANCE SHEETS (Cont.)
|
||||||||
U.S. dollars in thousands
|
||||||||
September 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
|
17,302
|
20,725
|
||||||
Accrued expenses
|
54,075
|
54,676
|
||||||
Advances from customers and deferred revenues
|
25,908
|
27,220
|
||||||
Operating lease liabilities
|
1,940
|
1,977
|
||||||
Other current liabilities
|
10,406
|
12,261
|
||||||
Total current liabilities
|
113,631
|
120,955
|
||||||
LONG-TERM LIABILITIES:
|
||||||||
Long-term loans, net of current maturities
|
-
|
4,000
|
||||||
Accrued severance pay
|
6,493
|
7,061
|
||||||
Long-term advances from customers
|
-
|
2,866
|
||||||
Operating lease liabilities
|
3,754
|
3,258
|
||||||
Other long-term liabilities
|
1,069
|
108
|
||||||
Total long-term liabilities
|
11,316
|
17,293
|
||||||
SHAREHOLDERS' EQUITY:
|
||||||||
Share capital - ordinary shares of NIS 0.2 par value
|
2,644
|
2,643
|
||||||
Additional paid-in capital
|
928,337
|
927,348
|
||||||
Accumulated other comprehensive loss
|
(6,830
|
)
|
(5,048
|
)
|
||||
Accumulated deficit
|
(698,886
|
)
|
(671,355
|
)
|
||||
Total shareholders' equity
|
225,265
|
253,588
|
||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
350,212
|
$
|
391,836
|
GILAT SATELLITE NETWORKS LTD.
|
||||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||||||||||
U.S. dollars in thousands
|
||||||||||||||||
Nine months ended
|
Three months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Unaudited
|
Unaudited
|
|||||||||||||||
Cash flows from operating activities:
|
||||||||||||||||
Net income (loss)
|
$
|
(27,531
|
)
|
$
|
12,517
|
$
|
(11,551
|
)
|
$
|
6,288
|
||||||
Adjustments required to reconcile net income to net cash provided by operating activities:
|
||||||||||||||||
Depreciation and amortization
|
7,757
|
8,247
|
2,486
|
2,565
|
||||||||||||
Capital loss from disposal of property and equipment
|
34
|
-
|
11
|
-
|
||||||||||||
Stock-based compensation of options
|
987
|
1,730
|
280
|
437
|
||||||||||||
Accrued severance pay, net
|
37
|
345
|
11
|
(37
|
)
|
|||||||||||
Deferred income taxes, net
|
101
|
1,081
|
(39
|
)
|
(304
|
)
|
||||||||||
Decrease (increase) in trade receivables, net
|
20,852
|
141
|
2,488
|
(2,365
|
)
|
|||||||||||
Decrease (increase) in contract assets
|
(14,404
|
)
|
25,408
|
(6,042
|
)
|
25,640
|
||||||||||
Decrease (increase) in other assets (including short-term, long-term and deferred charges)
|
7,919
|
(1,419
|
)
|
1,209
|
(1,390
|
)
|
||||||||||
Decrease (increase) in inventories
|
(5,150
|
)
|
(7,685
|
)
|
548
|
(1,548
|
)
|
|||||||||
Decrease in trade payables
|
(3,335
|
)
|
(4,515
|
)
|
(2,825
|
)
|
(8,448
|
)
|
||||||||
Increase (decrease) in accrued expenses
|
(193
|
)
|
(8,904
|
)
|
5,616
|
(1,828
|
)
|
|||||||||
Increase (decrease) in advance from customers
|
(4,116
|
)
|
(9,540
|
)
|
1,609
|
(1,135
|
)
|
|||||||||
Decrease in current and non current liabilities
|
(219
|
)
|
(2,659
|
)
|
(904
|
)
|
(708
|
)
|
||||||||
Net cash provided by (used in) operating activities
|
(17,261
|
)
|
14,747
|
(7,103
|
)
|
17,167
|
||||||||||
Cash flows from investing activities:
|
||||||||||||||||
Purchase of property and equipment
|
(2,740
|
)
|
(5,649
|
)
|
(861
|
)
|
(2,062
|
)
|
||||||||
Net cash used in investing activities
|
(2,740
|
)
|
(5,649
|
)
|
(861
|
)
|
(2,062
|
)
|
||||||||
Cash flows from financing activities:
|
||||||||||||||||
Exercise of stock options
|
-
|
375
|
-
|
-
|
||||||||||||
Dividend payment
|
-
|
(24,864
|
)
|
-
|
-
|
|||||||||||
Repayment of long-term loans
|
(4,096
|
)
|
(4,353
|
)
|
-
|
(122
|
)
|
|||||||||
Net cash used in financing activities
|
(4,096
|
)
|
(28,842
|
)
|
-
|
(122
|
)
|
|||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(630
|
)
|
(235
|
)
|
(91
|
)
|
(256
|
)
|
||||||||
Increase (decrease) in cash, cash equivalents and restricted cash
|
(24,727
|
)
|
(19,979
|
)
|
(8,055
|
)
|
14,727
|
|||||||||
Cash, cash equivalents and restricted cash at the beginning of the period
|
101,969
|
104,204
|
85,297
|
69,498
|
||||||||||||
Cash, cash equivalents and restricted cash at the end of the period
|
$
|
77,242
|
$
|
84,225
|
$
|
77,242
|
$
|
84,225
|