GlobeNewswire Inc | Nov 9, 2021 07:19AM EST

November 09, 2021

Revenue up 34% year-over-year to $49.9M, GAAP operating income of $0.9 million andAdjustedEBITDA reached $4.0 million

PETAH TIKVA, Israel, Nov. 09, 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 third quarter of 2021.

ThirdQuarter Financial Highlights

-- Revenues of $49.9 million, a 34% increase from $37.3 million in Q3 2020 and 12% lower than $56.9 million in the previous quarter; -- GAAP operating incomeof$0.9million, a significant improvement compared with an operating loss of $10.9 million in Q3 2020 (which included $8.2 million of Comtech merger and acquisition expenses) and an operating loss of $0.3 million in the previous quarter; -- Non-GAAP operating income of$1.5million, compared with operating loss of $1.9 million in Q3 2020, and an operating income of $0.2 million in the previous quarter; -- GAAP net incomeof $0.2million, or $0.00 per diluted share, compared with a net loss of $11.6 million, or loss of $0.21 per share in Q3 2020 and net loss of $0.1 million in the previous quarter, or $0.00 per share; -- Non-GAAP net incomeof $0.7million, or $0.01 per diluted share, compared with a net loss of $2.6 million, or loss of $0.05 per share in Q3 2020, and compared with a net income of $0.4 million, or $0.01 per diluted share, in the previous quarter; -- Adjusted EBITDA of$4.0million compared with adjusted EBITDA of $0.6 million in Q3 2020; and adjusted EBITDA of $2.5 million in the previous quarter;

Management Commentary

Adi Sfadia, Gilat's CEO, commented: Our revenue this quarter showed significant year over year growth as we continue to increase profitability reaching an Adjusted EBITDA of $4 million. We are especially pleased with our success in signing new deals, some of which are potentially transformable in nature and strategic.

"I am most excited about major progress this quarter in the NGSO and VHTS market segments. Furthermore, we experienced improved performance and significant bookings in our strategic market segments including Cellular Backhaul and IFC where we received several orders from key market players to be delivered over the next few quarters.

"In our Peru operation we have made significant progress with awards of $28 million in multi-year service agreements, and achieved our target goal of approximately $50 million in annual recurring revenue from Peru, well before the stated target date."

Continued Mr. Sfadia, Although the global supply chain presents challenges, so far we have been able to mitigate these issues and we hope that this will continue to be the case. Looking ahead, given the recent wins and awards as well as the strong and improving momentum we are seeing across our business, we are increasingly confident that we will show significant growth in the top line and in the Adjusted EBITDA, both in Q4 of this year and in 2022.

Key Recent Announcements

-- Tier-1 Mobile Operator in Asia Expands 4G Network with Gilats Cellular Backhaul Solution -- Gilat Expands 4G Network with Tier-1 Mobile Operator in North America -- Gilat Signs Service Agreements of Over $16 Million for Operating Transport-Networks to Support Broadband Services in Peru -- Gilat Receives $12 Million Service Agreement for Operation of Transport Network in Cusco, Peru -- Gilat Received $17 Million in Orders for Support of Low Earth Orbit Constellation -- SES Awards Gilat Multi-Million Dollar Contract for Multiple Broadband Applications in Latin America

Conference Call Details

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

Date: Tuesday, November 9, 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/gilatq3-2021

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+1 212 378 8040



GILAT SATELLITE NETWORKS LTD.CONSOLIDATED STATEMENTS OF OPERATIONSU.S. dollars inthousands (except share and pershare data) Three months ended Nine months ended September, 30 September, 30 2021 2020 2021 2020 Unaudited Unaudited Revenues $ 49,911 $ 37,270 $ 151,547 $ 123,258 Cost of 32,306 27,827 104,870 95,341 revenues Gross 17,605 9,443 46,677 27,917 profit Research anddevelopment 7,640 6,442 23,674 20,215 expensesLess - 416 460 790 932 grantsResearch anddevelopment 7,224 5,982 22,884 19,283 expenses, netSelling andmarketing 5,359 3,687 15,827 12,337 expensesGeneral andadministrative 4,104 2,478 11,042 10,269 expensesMerger,acquisition andrelated - 8,198 - 11,149 litigationexpense, net Totaloperating 16,687 20,345 49,753 53,038 expenses Operatingincome 918 (10,902 ) (3,076 ) (25,121 )(loss) Financialexpenses, (701 ) (286 ) (1,458 ) (1,715 )net Income (loss)before taxes 217 (11,188 ) (4,534 ) (26,836 )on income Taxes on 49 363 523 695 income Net income $ 168 $ (11,551 ) $ (5,057 ) $ (27,531 )(loss) Basic andDilutedearnings $ 0.00 $ (0.21 ) $ (0.09 ) $ (0.50 )(loss) pershare Weighted averagenumber of shares used in computing earnings (loss) per share Basic 56,525,177 55,520,197 56,355,020 55,506,266 Diluted 56,958,250 55,520,197 56,355,020 55,506,266

GILAT SATELLITE NETWORKS LTD. RECONCILIATION BETWEEN GAAP AND NON-GAAP STATEMENTS OF OPERATIONSFOR COMPARATIVE PURPOSES U.S. dollars in thousands (except share and per share data) Three months Three months ended ended September 30, September 30, 2021 2020 GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP (1) (1) Unaudited Unaudited Gross profit $ 17,605 96 $ 17,701 $ 9,443 28 $ 9,471 Operating expenses 16,687 (448 ) 16,239 20,345 (8,950 ) 11,395 (income)Operating income 918 544 1,462 (10,902 ) 8,978 (1,924 )(loss)Income (loss) before 217 544 761 (11,188 ) 8,978 (2,210 )taxes on incomeNet income (loss) 168 544 712 (11,551 ) 8,978 (2,573 ) Earnings (loss) pershare (basic and $ 0.00 $ 0.01 $ 0.01 $ (0.21 ) $ 0.16 $ (0.05 )diluted) Weighted averagenumber of shares used in computing earningsper shareBasic 56,525,177 56,525,177 55,520,197 55,520,197 Diluted 56,958,250 57,227,810 55,520,197 55,520,197

Adjustments reflect the effect of non-cash stock-based compensation as per ASC(1) 718, amortization of intangible assets related to shares acquisition transactions,merger and acquisition and related litigation, net. and restructuring and re-organization costs

Three months Three months ended ended September September 30, 30, 2021 2020 Unaudited Unaudited GAAP net income (loss) $ 168 $ (11,551 ) Gross profit Non-cash stock-based compensation expenses 91 21 Amortization of intangible assets related to 5 7 acquisition transactions 96 28 Operating expenses Non-cash stock-based compensation expenses 398 259 Amortization of intangible assets related to 50 49 acquisition transactionsMerger and acquisition and related litigation, - 8,198 netRestructuring and re-organization costs - 444 448 8,950 Non-GAAP net income (loss) $ 712 $ (2,573 )

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)

Nine months Nine months ended ended September 30, September 30, 2021 2020 GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP (1) (1) Unaudited Unaudited Gross profit $ 46,677 226 $ 46,903 $ 27,917 144 $ 28,061 Operating 49,753 (735 ) 49,018 53,038 (12,887 ) 40,151 expenses (income)Operating income (3,076 ) 961 (2,115 ) (25,121 ) 13,031 (12,090 )(loss)Income (loss)before taxes on (4,534 ) 961 (3,573 ) (26,836 ) 13,031 (13,805 )incomeNet income (loss) (5,057 ) 961 (4,096 ) (27,531 ) 13,031 (14,500 ) Earnings (loss)per share (basic $ (0.09 ) $ 0.02 $ (0.07 ) $ (0.50 ) $ 0.24 $ (0.26 )and diluted) Weighted averagenumber of shares used incomputingearnings per share Basic 56,355,020 56,355,020 55,506,266 55,506,266 and Diluted Adjustments reflect the effect of non-cash stock-based compensation as per ASC^ 718, amortization of intangible assets related to shares acquisition(1) transactions, merger and acquisition and related litigation, net, trade secrets and other litigation expenses and restructuring and re-organization costs .

Nine months Nine months ended ended September September 30, 30, 2021 2020 Unaudited Unaudited GAAP net loss $ (5,057 ) $ (27,531 ) Gross profit Non-cash stock-based compensation expenses 211 127 Amortization of intangible assets related 15 17 to acquisition transactions 226 144 Operating expenses Non-cash stock-based compensation expenses 584 860 Amortization of intangible assets related 151 150 to acquisition transactionsTrade secrets and other litigation expenses - 11 Merger, acquisition and related litigation - 11,149 expense, netRestructuring and re-organization costs - 717 735 12,887 Non-GAAP net loss $ (4,096 ) $ (14,500 )

GILAT SATELLITE NETWORKS LTD.SUPPLEMENTAL INFORMATIONU.S. dollars in thousandsADJUSTED EBITDA: Three months ended Nine months ended September 30, September 30, 2021 2020 2021 2020 Unaudited Unaudited GAAP operating $ 918 $ (10,902 ) $ (3,076 ) $ (25,121 )profit (loss)Add: Non-cashstock-based 489 280 795 987 compensationexpensesTrade secretsand other - - - 11 litigationexpensesRestructuringand - 444 - 717 re-organizationcostsMerger,acquisition andrelated - 8,198 - 11,149 litigationexpense, netDepreciationand 2,608 2,542 7,365 7,924 amortization(*) Adjusted EBITDA $ 4,015 $ 562 $ 5,084 $ (4,333 ) (*) Includingamortization of lease incentive SEGMENT REVENUE: Three months ended Nine months ended September 30, September 30, 2021 2020 2021 2020 Unaudited Unaudited Fixed Networks $ 22,328 $ 22,797 $ 78,455 $ 67,587 Mobility 21,624 9,210 52,626 42,417 SolutionsTerrestrialInfrastructure 5,959 5,263 20,466 13,254 Projects Total revenue $ 49,911 $ 37,270 $ 151,547 $ 123,258



GILAT SATELLITE NETWORKS LTD. CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands September 30, December 31, 2021 2020 Unaudited Audited ASSETS CURRENT ASSETS: Cash and cash equivalents $ 63,774 $ 88,754 Restricted cash 21,624 27,162 Trade receivables, net 29,705 27,976 Contract assets 24,469 41,573 Inventories 31,577 31,304 Other current assets 24,189 16,637 Total current assets 195,338 233,406 LONG-TERM ASSETS: Restricted cash 12 42 Severance pay funds 6,524 6,665 Deferred taxes 19,343 19,295 Operating lease right-of-use assets 4,129 4,879 Other long term receivables 6,474 7,797 Total long-term assets 36,482 38,678 PROPERTY AND EQUIPMENT, NET 75,631 77,172 INTANGIBLE ASSETS, NET 750 1,082 GOODWILL 43,468 43,468 TOTAL ASSETS $ 351,669 $ 393,806 GILAT SATELLITE NETWORKS LTD. CONSOLIDATED BALANCE SHEETS (Cont.) U.S. dollars in thousands September 30, December 31, 2021 2020 Unaudited Audited LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of long-term loans $ - $ 4,000 Trade payables 17,767 20,487 Accrued expenses 47,722 46,387 Advances from customers and deferred 29,550 26,244 revenues Operating lease liabilities 1,804 1,911 Dividend payable - 35,003 Other current liabilities 13,342 13,322 Total current liabilities 110,185 147,354 LONG-TERM LIABILITIES: Accrued severance pay 6,819 7,136 Long-term advances from customers 3,022 1,890 Operating lease liabilities 2,325 2,985 Other long-term liabilities 120 631 Total long-term liabilities 12,286 12,642 SHAREHOLDERS' EQUITY: Share capital - ordinary shares of NIS 0.2 2,706 2,647 par value Additional paid-in capital 929,359 928,626 Accumulated other comprehensive loss (6,364 ) (6,017 ) Accumulated deficit (696,503 ) (691,446 ) Total shareholders' equity 229,198 233,810 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 351,669 $ 393,806

GILATSATELLITE NETWORKSLTD.CONSOLIDATEDSTATEMENTS OF CASHFLOWSU.S. dollars in thousands Three months ended Nine months ended September 30, September 30, 2021 2020 2021 2020 Unaudited UnauditedCash flowsfrom operatingactivities:Net income $ 168 $ (11,551 ) $ (5,057 ) $ (27,531 )(loss)Adjustmentsrequired to reconcilenet incometo netcashprovided by operatingactivities:Depreciationand 2,556 2,486 7,202 7,757 amortizationCapital lossfromdisposal of - 11 - 34 property andequipmentStock-basedcompensation 489 280 795 987 of optionsAccruedseverance (49 ) 11 (177 ) 37 pay, netDeferred (232 ) (39 ) (47 ) 101 taxes, netDecrease(increase)in trade 5,311 2,488 (1,757 ) 20,852 receivables,netDecrease(increase) (639 ) (6,042 ) 17,104 (14,404 )in contractassetsDecrease(increase)in otherassets (includingshort-term,long-termanddeferred (1,476 ) 1,209 (5,485 ) 7,919 charges)Decrease(increase) (2,121 ) 548 (347 ) (5,150 )ininventoriesDecrease intrade (1,929 ) (2,825 ) (2,719 ) (3,335 )payablesIncrease(decrease) (542 ) 5,616 1,151 (193 )in accruedexpensesIncrease(decrease)in advancefrom 4,560 1,609 4,369 (4,116 )customersand deferredrevenueDecrease incurrent and (1,107 ) (904 ) (1,301 ) (219 )non currentliabilitiesNet cashprovided by(used in) 4,989 (7,103 ) 13,731 (17,261 )operatingactivities Cash flowsfrom investingactivities:Purchase ofproperty and (1,452 ) (861 ) (5,024 ) (2,740 )equipmentProceedsfrom short 2,159 - - - termdepositsNet cashused in 707 (861 ) (5,024 ) (2,740 )investingactivities Cash flowsfrom financingactivities:Dividend - - (35,003 ) - paymentRepayment oflong-term - - (4,000 ) (4,096 )loansNet cashused in - - (39,003 ) (4,096 )financingactivities Effect ofexchangerate changeson cash,cash (91 ) (91 ) (252 ) (630 )equivalentsandrestrictedcash Increase(decrease)in cash,cash 5,605 (8,055 ) (30,548 ) (24,727 )equivalentsandrestrictedcash Cash, cashequivalentsandrestricted 79,805 85,297 115,958 101,969 cash at thebeginning ofthe period Cash, cashequivalentsandrestricted $ 85,410 $ 77,242 $ 85,410 $ 77,242 cash at theend of theperiod