GlobeNewswire Inc | Aug 10, 2021 07:09AM EDT

August 10, 2021

PETAH TIKVA, Israel, Aug. 10, 2021 (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 second quarter of 2021.

Second Quarter Financial Highlights

-- Revenues of $56.9 million, a 49% increase from $38.3 million in Q2 2020 and up 27% from $44.7 million in the previous quarter. -- GAAP operating lossof$0.3million, 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 incomeof$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 lossof $0.1million, 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 incomeof $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$2.5million 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.

Key Recent Announcements

-- Tier-1 US Terminal Provider Awards Gilat over $5M for Solid State Amplifiers Powering Militaries Worldwide -- Gilats 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

Gilats management will discuss its second quarter 2021 results and business achievements and participate in a questions and answers session:

Date: Tuesday, August 10, 2021Start: 9:30 AM ET / 4:30 PM ITDial-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 Companys website and through the link above.

Non-GAAP MeasuresThe 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 Companys GAAP results are made with the intent of providing both management and investors a more complete understanding of the Companys 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 Companys performance to that of prior periods and evaluate the Companys financial and operating results on a consistent basis from period to period. The Company also believes this measure, when viewed in combination with the Companys 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 Gilats 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).

Gilats 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

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 NetworksDoreet Oren, Senior Director Corporate CommunicationsDoreetO@gilat.com

Ehud HelftGK Investor & Public Relationsgilat@gkir.com+1 646 688 3559

GILATSATELLITE NETWORKS LTD.CONSOLIDATEDSTATEMENTS OF OPERATIONSU.S. dollarsin thousands(except share and per sharedata) 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 72,564 67,514 40,208 28,727 revenues Gross profit 29,072 18,474 16,715 9,588 Research anddevelopment 16,034 13,773 7,923 6,139 expensesLess - grants 374 472 190 200 Research anddevelopment 15,660 13,301 7,733 5,939 expenses, netSelling andmarketing 10,468 8,650 5,464 3,584 expensesGeneral andadministrative 6,938 7,518 3,855 2,973 expensesRestructuring - 273 - - costsMerger,acquisitionand related - 2,951 - 546 litigationexpense, net Totaloperating 33,066 32,693 17,052 13,042 expenses Operating loss (3,994 ) (14,219 ) (337 ) (3,454 ) Financialincome (757 ) (1,429 ) 435 (457 )(expenses),net Income (loss)before taxes (4,751 ) (15,648 ) 98 (3,911 )on income Taxes on 474 332 227 314 income Net loss $ (5,225 ) $ (15,980 ) $ (129 ) $ (4,225 ) Basic andDiluted loss $ (0.09 ) $ (0.29 ) $ (0.00 ) $ (0.08 )per share Weightedaverage number of shares usedin computing earnings (loss) per share Basic and 56,269,941 55,499,300 56,508,539 55,505,342 Diluted

GILAT SATELLITE NETWORKS LTD.RECONCILIATION BETWEEN GAAP AND NON-GAAP STATEMENTS OF OPERATIONSFOR COMPARATIVE PURPOSESU.S. dollars in thousands (except share and per share data) Three months ended Three months ended June 30, 2021 June 30, 2020 GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP (1) (1) Unaudited Unaudited Gross profit $ 16,715 64 $ 16,779 $ 9,588 54 $ 9,642 Operating expenses 17,052 (456 ) 16,596 13,042 (831 ) 12,211 (income)Operating income (337 ) 520 183 (3,454 ) 885 (2,569 )(loss)Income (loss)before taxes on 98 520 618 (3,911 ) 885 (3,026 )incomeNet income (loss) (129 ) 520 391 (4,225 ) 885 (3,340 ) Earnings (loss)per share (basic $ (0.00 ) $ 0.01 $ 0.01 $ (0.08 ) $ 0.02 $ (0.06 )and diluted) Weighted averagenumber of shares used incomputing 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 asper ASC 718, amortization of intangible assets related to shares acquisitiontransactions andmerger 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-cashstock-based 59 49 compensationexpensesAmortization ofintangible assetsrelated to 5 5 acquisitiontransactions 64 54 Operating expenses Non-cashstock-based 406 235 compensationexpensesAmortization ofintangible assetsrelated to 50 50 acquisitiontransactionsMerger andacquisition and - 546 relatedlitigation, net 456 831 Non-GAAP net $ 391 $ (3,340 ) income (loss)

GILAT SATELLITE NETWORKS LTD.RECONCILIATION BETWEEN GAAP AND NON-GAAP STATEMENTS OF OPERATIONSFOR COMPARATIVE PURPOSESU.S. dollars inthousands(except share and per sharedata) Six months ended Six months ended June 30, 2021 June 30, 2020 GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP (1) (1) Unaudited Unaudited Gross profit $ 29,072 130 $ 29,202 $ 18,474 116 $ 18,590 Operatingexpenses 33,066 (287 ) 32,779 32,693 (3,937 ) 28,756 (income)Operating income (3,994 ) 417 (3,577 ) (14,219 ) 4,053 (10,166 )(loss)Income (loss)before taxes on (4,751 ) 417 (4,334 ) (15,648 ) 4,053 (11,595 )incomeNet income (5,225 ) 417 (4,808 ) (15,980 ) 4,053 (11,927 )(loss) Earnings (loss)per share (basic $ (0.09 ) $ 0.01 $ (0.08 ) $ (0.29 ) $ 0.08 $ (0.21 )and diluted) Weighted averagenumber of shares used incomputingearnings per share Basic 56,269,941 56,269,941 55,499,300 55,499,300 and Diluted (1)Adjustments reflect the effect of non-cash stock-based compensation as perASC 718, amortization of intangible assets related to shares acquisitiontransactions,merger and acquisition and related litigation, net, tradesecrets 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-cashstock-based 120 106 compensationexpensesAmortization ofintangibleassets related 10 10 to acquisitiontransactions 130 116 Operating expensesNon-cashstock-based 186 601 compensationexpensesAmortization ofintangibleassets related 101 101 to acquisitiontransactionsTrade secretsand other - 11 litigationexpensesMerger,acquisition andrelated - 2,951 litigationexpense, netRestructuring - 273 costs 287 3,937 Non-GAAP net $ (4,808 ) $ (11,927 ) loss

GILAT SATELLITE NETWORKS LTD.SUPPLEMENTAL INFORMATIONU.S. dollars in thousands ADJUSTED EBITDA: Six months ended Three months ended June 30, June 30, 2021 2020 2021 2020 Unaudited Unaudited GAAP operating $ (3,994 ) $ (14,219 ) $ (337 ) $ (3,454 )lossAdd: Non-cashstock-based 306 707 465 284 compensationexpensesTrade secretsand other - 11 - - litigationexpensesRestructuringand - 273 - - re-organizationcostsMerger,acquisition andrelated - 2,951 - 546 litigationexpense, netDepreciation and 4,758 5,382 2,373 2,718 amortization (*) Adjusted EBITDA $ 1,070 $ (4,895 ) $ 2,501 $ 94 (*) Includingamortization of lease incentive SEGMENT REVENUE: Six months ended Three months ended June 30, June 30, 2021 2020 2021 2020 Unaudited Unaudited Fixed Networks $ 56,127 $ 44,790 $ 30,825 $ 21,779 Mobility 31,002 33,207 19,923 14,006 SolutionsTerrestrialInfrastructure 14,507 7,991 6,175 2,530 Projects Total revenue $ 101,636 $ 85,988 $ 56,923 $ 38,315

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 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 2,705 2,647 par value 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

GILAT SATELLITE NETWORKS LTD.CONSOLIDATEDSTATEMENTS OF CASH FLOWSU.S. dollars in thousands Six months ended Three months ended June 30, June 30, 2021 2020 2021 2020 Unaudited UnauditedCash flows fromoperating activities:Net loss $ (5,225 ) $ (15,980 ) $ (129 ) $ (4,225 )Adjustmentsrequired to reconcile netincometo net cashprovided by operatingactivities:Depreciation and 4,646 5,271 2,316 2,667 amortizationCapital lossfrom disposal of - 23 - 56 property andequipmentStock-basedcompensation of 306 707 465 284 optionsAccruedseverance pay, (128 ) 26 (118 ) (17 )netDeferred taxes, 185 140 (333 ) (494 )netDecrease(increase) in (7,068 ) 18,364 (5,135 ) 4,757 tradereceivables, netDecrease(increase) in 17,743 (8,362 ) 22,230 (3,511 )contract assetsDecrease(increase) inother assets(including (4,009 ) 6,710 (3,789 ) 5,037 short-term,long-term anddeferredcharges)Decrease(increase) in 1,774 (5,698 ) 3,986 937 inventoriesDecrease in (790 ) (510 ) (1,740 ) (2,885 )trade payablesIncrease(decrease) in 1,693 (5,809 ) 724 (4,157 )accrued expensesDecrease inadvance from (191 ) (5,725 ) (7,879 ) (2,898 )customers anddeferred revenueIncrease(decrease) incurrent and non (194 ) 685 (2,197 ) (2,126 )currentliabilitiesNet cashprovided by(used in) 8,742 (10,158 ) 8,401 (6,575 )operatingactivities Cash flows frominvesting activities:Purchase ofproperty and (3,572 ) (1,879 ) (2,089 ) (928 )equipmentInvestment inshort term (2,159 ) - (2,159 ) - depositsNet cash used ininvesting (5,731 ) (1,879 ) (4,248 ) (928 )activities Cash flows fromfinancing activities:Dividend payment (35,003 ) - - - Repayment of (4,000 ) (4,096 ) - - long-term loansNet cash used infinancing (39,003 ) (4,096 ) - - activities Effect ofexchange ratechanges on cash, (161 ) (539 ) 93 156 cash equivalentsand restrictedcash Increase(decrease) incash, cash (36,153 ) (16,672 ) 4,246 (7,347 )equivalents andrestricted cash Cash, cashequivalents andrestricted cash 115,958 101,969 75,559 92,644 at the beginningof the period Cash, cashequivalents andrestricted cash $ 79,805 $ 85,297 $ 79,805 $ 85,297 at the end ofthe period