OREANDA-NEWS. 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 ended June 30, 2016.

Key Financial Updates:

  • Revenues for Q2 2016 increased 53% to $67.9 million from $44.3 million in the comparable period of 2015. Revenues rose 29% compared with Q1 2016.
  • Loss on a GAAP basis for Q2 2016 decreased to $3.7 million compared to a loss of $9.1 million in the second quarter of 2015.
  • EBITDA for Q2 2016 increased to $1.0 million compared to a loss of $2.5 million in the comparable period of 2015.
  • Reiterated management objectives for 2016: revenues between $290 to $310 million, and EBITDA of between $18 to $24 million. In 2015, revenues totaled $197.5 million and EBITDA was $5.3 million.

On a GAAP basis, operating loss was $2.5 million in the second quarter of 2016 as compared to an operating loss of $7.2 million in the comparable quarter of 2015.

On a non-GAAP basis, operating loss was $0.8 million in the second quarter of 2016 as compared to an operating loss of $5.2 million in the comparable quarter of 2015.

On a GAAP basis, the loss for the second quarter of 2016 was $3.7 million or $0.07 per diluted share compared to a loss of $9.1 million or $0.21 per diluted share in the same quarter of 2015.

On a non-GAAP basis, the loss for the second quarter of 2016 was $2.0 million or $0.04 per diluted share compared to a loss of $7.1 million or $0.16 per diluted share in the same quarter of 2015.

EBITDA for the second quarter of 2016 improved to $1.0 million, compared to a loss of $2.5 million in the comparable period in 2015.

"We are pleased with our second quarter results,” said Yona Ovadia, CEO of Gilat. "We continue to make progress with our strategy across all segments, especially in In-Flight Connectivity (IFC) and broadband networks."

Mr. Ovadia continued: "Gilat's five-pillar strategy is focused on winning the markets unlocked by the global demand for broadband and the increasingly-abundant HTS capacity, based on our advanced solutions and our ongoing investment in technological innovation.

“Indeed, this quarter we are pleased to announce a significant win in broadband networks, one of our growth pillars. The recent choice of our X-Architecture for UK-based EE's (Everything Everywhere) LTE network testifies to our leadership in this area.  This win adds to our momentum in cellular backhaul that began with our success with SoftBank earlier in the year. With these achievements, Gilat is solidifying its leadership in the markets of satellite backhauling for LTE cellular networks and broadband access services.

"Looking forward, we are reiterating our management objectives for full year 2016: revenues of $290 to $310 million and EBITDA of between $18 to $24 million. These objectives represent a sizeable stepping up of revenues and a target of positive operating income in the second half of 2016, based on our strong backlog in Peru and China as well as additional revenues from projects won as part of our strategy, and despite a challenging business environment in Latin America.”

Key Recent Announcements:

  • Avanti Selects Gilat’s X-Architecture to Enhance Reach and Resilience of EE’s LTE Network in the UK
  • Brazilian ISP Ruralweb Deploys Gilat’s Solution for its Rural Broadband VSAT Network
  • Dizengoff Ghana Selects Gilat for Turnkey Delivery of Broadband for Rural Schools and Cellular Services
  • Gilat Satellite Networks Shares Included in the TA-100 Index of the Tel Aviv Stock Exchange
  • Sky Net Selects Gilat’s Network for Cellular Backhaul in Myanmar
  • SES and Gilat to Launch Hybrid Broadband Solution in Asia
  • Gilat’s Market-Leading SkyEdge II-c Platform is DVB-S2X Ready

 

Notes:
(1) The attached summary financial statements were prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP). The attached summary financial statements are unaudited. To supplement the consolidated financial statements presented in accordance with GAAP, the Company presents Gilat's EBITDA before the impact of non-cash share-based payment charges, depreciation and amortization, other income and other costs related to acquisition transactions. Non-GAAP presentations of net income, operating income, EBITDA and earnings per share are provided to enhance the understanding of the Company's historical financial performance and comparability between periods.

(2) Operating income before depreciation, amortization, non-cash stock option expenses as per ASC 718 (formerly SFAS 123(R)) and other costs related to acquisition transactions ('EBITDA') is presented because it is a measure commonly used and is presented solely in order to improve the understanding of the Company's operating results and to provide further perspective on these results. EBITDA, however, should not be considered as an alternative to operating income or net income for the period as an indicator of the operating performance of the Company.

Similarly, EBITDA should not be considered as an alternative to cash flows from operating activities as a measure of liquidity. EBITDA is not a measure of financial performance under generally accepted accounting principles and may not be comparable to other similarly titled measures for other companies. EBITDA may not be indicative of the historic operating results of the Company; nor is it meant to be predictive of potential future results. Reconciliation between the Company's Operating income and EBITDA is presented in the attached summary financial statements.

About Gilat
Gilat Satellite Networks Ltd (NASDAQ:GILT) (TASE:GILT) is a leading provider of products and services for satellite-based broadband communications. Gilat develops and markets a wide range of high-performance satellite ground segment equipment and VSATs, with an increasing focus on the consumer and Ka-band market. In addition, Gilat enables mobile SOTM (Satellite-on-the-Move) solutions providing low-profile antennas, next generation solid-state power amplifiers and modems. Gilat also provides managed network and satellite-based services for rural telephony and Internet access via its subsidiaries in Peru and Colombia.

With over 25 years of experience, and over a million products shipped to more than 90 countries, Gilat has provided enterprises, service providers and operators with efficient and reliable satellite-based connectivity solutions, including cellular backhaul, banking, retail, e-government and rural communication networks. Gilat also enables leading defense, public security and news organizations to implement advanced, on-the-move tactical communications on board their land, air and sea fleets using Gilat's high-performance SOTM solutions. Gilat controlling shareholders are the FIMI Private Equity Funds. For more information, please visit us at www.gilat.com

 

   
GILAT SATELLITE NETWORKS LTD.  
CONDENSED 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,
  
          2016       2015       2016       2015    
        Unaudited   Unaudited   Unaudited   Unaudited  
                       
Revenues       $ 120,563     $ 89,514     $ 67,898     $ 44,324    
Cost of revenues         92,984       65,272       52,717       33,274    
Gross profit           27,579         24,242         15,181         11,050    
                       
Research and development expenses         12,593       13,128       6,705       6,594    
Less - grants         638       412       552       222    
Research and development, net         11,955       12,716       6,153       6,372    
Selling and marketing expenses         10,976       12,675       5,853       6,412    
General and administrative expenses         10,152       10,062       5,714       5,471    
Total operating expenses           33,083         35,453         17,720         18,255    
Operating loss           (5,504 )       (11,211 )       (2,539 )       (7,205 )  
Financial expenses, net         (1,603 )     (2,910 )     (860 )     (1,559 )  
Loss before taxes            (7,107 )       (14,121 )       (3,399 )       (8,764 )  
Taxes on income         569       567       251       318    
Loss       $    (7,676 )   $    (14,688 )   $    (3,650 )   $    (9,082 )  
                       
Loss per share (basic and diluted)       $    (0.16 )   $    (0.34 )   $    (0.07 )   $    (0.21 )  
                       
                       
Weighted average number of shares used in computing loss per share (basic and diluted)         49,383,450       43,139,303       54,384,521       42,883,469    
 
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, 2016   June 30, 2015  
              GAAP   Adjustments (1)   Non-GAAP   GAAP   Adjustments (1)   Non-GAAP  
              Unaudited   Unaudited   Unaudited   Unaudited   Unaudited   Unaudited  
                                     
Gross profit             $ 15,181       1,225     $ 16,406     $ 11,050       1,230     $ 12,280    
Operating expenses               17,720       (465 )     17,255       18,255       (794 )     17,461    
Operating loss               (2,539 )     1,690       (849 )     (7,205 )     2,024       (5,181 )  
Loss before taxes               (3,399 )     1,690       (1,709 )     (8,764 )     2,024       (6,740 )  
Loss             $    (3,650 )       1,690     $    (1,960 )   $    (9,082 )       2,024     $    (7,058 )  
                                     
Loss per share (basic and diluted)             $ (0.07 )   $ 0.03     $ (0.04 )   $ (0.21 )   $ 0.05     $ (0.16 )  
                                     
Weighted average number of shares used in computing loss per share (basic and diluted)               54,384,521           54,384,521       42,883,469           42,883,469    
                                     
(1) Adjustments reflect the effect of non-cash stock-based compensation as per ASC 718 and amortization of intangible assets related to shares acquisition transactions.  
                                     
                                     
                 Three months ended         Three months ended     
                 June 30, 2016         June 30, 2015     
                  Unaudited           Unaudited      
                                     
GAAP loss                 $ (3,650 )           $ (9,082 )      
Gross profit:                                    
Non-cash stock-based compensation expenses                   32               54        
Amortization of intangible assets related to acquisition transactions                   1,193               1,176        
                    1,225               1,230        
Operating expenses:                                    
Non-cash stock-based compensation expenses                   270               581        
Amortization of intangible assets related to acquisition transactions                   195               213        
                    465               794        
                                     
Non GAAP loss                 $ (1,960 )           $ (7,058 )      
                                     
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, 2016   June 30, 2015  
              GAAP   Adjustments (1)   Non-GAAP   GAAP   Adjustments (1)   Non-GAAP  
              Unaudited   Unaudited   Unaudited   Unaudited   Unaudited   Unaudited  
                                     
Gross profit             $ 27,579       2,409     $ 29,988     $ 24,242       2,481     $ 26,723    
Operating expenses               33,083       (870 )     32,213       35,453       (1,482 )     33,971    
Operating loss               (5,504 )     3,279       (2,225 )     (11,211 )     3,963       (7,248 )  
Loss before taxes               (7,107 )     3,279       (3,828 )     (14,121 )     3,963       (10,158 )  
Loss             $    (7,676 )       3,279     $    (4,397 )   $    (14,688 )       3,963     $    (10,725 )  
                                     
Loss per share (basic and diluted)             $ (0.16 )   $ 0.07     $ (0.09 )   $ (0.34 )   $ 0.09     $ (0.25 )  
                                     
Weighted average number of shares used in computing loss per share (basic and diluted)               49,383,450           49,383,450       43,139,303           43,139,303    
                                     
(1) Adjustments reflect the effect of non-cash stock-based compensation as per ASC 718 and amortization of intangible assets related to shares acquisition transactions.   
                                     
                                     
              Six months ended   Six months ended  
              June 30, 2016    June 30, 2015   
                   Unaudited             Unaudited       
                                     
GAAP loss                 $ (7,676 )           $ (14,688 )      
Gross profit:                                    
Non-cash stock-based compensation expenses                   21               106        
Amortization of intangible assets related to acquisition transactions                   2,388               2,375        
                    2,409               2,481        
Operating expenses:                                    
Non-cash stock-based compensation expenses                   482               1,057        
Amortization of intangible assets related to acquisition transactions                   388               425        
                    870               1,482        
                                     
Non GAAP loss                 $ (4,397 )           $ (10,725 )      
                                     
GILAT SATELLITE NETWORKS LTD.  
CONDENSED EBITDA  
U.S. dollars in thousands  
        Six months ended   Three months ended  
        June 30,   June 30,  
          2016       2015       2016       2015    
        Unaudited   Unaudited   Unaudited   Unaudited  
                       
GAAP operating loss       $ (5,504 )   $ (11,211 )   $ (2,539 )   $ (7,205 )  
Add:                      
Non-cash stock-based compensation expenses         503       1,163       302       635    
Depreciation and amortization         6,525       7,699       3,224       4,041    
EBITDA       $    1,524     $    (2,349 )   $    987     $    (2,529 )  
                       
  GILAT SATELLITE NETWORKS LTD.  
  CONDENSED CONSOLIDATED BALANCE SHEETS  
  U.S. dollars in thousands  
             
      June 30,   December 31,  
        2016       2015    
      Unaudited   Audited  
             
  ASSETS          
             
  CURRENT ASSETS:          
  Cash and cash equivalents   $ 50,760     $ 18,435    
  Restricted cash     72,539       100,779    
  Restricted cash held by trustees     6,617       8,524    
  Trade receivables, net     48,106       50,984    
  Inventories     26,856       25,358    
  Other current assets     16,674       16,223    
  Total current assets     221,552       220,303    
             
  LONG-TERM INVESTMENTS AND RECEIVABLES:          
  Long-term restricted cash     205       179    
  Severance pay funds     7,827       7,545    
  Other long term receivables     224       221    
  Total long-term investments and receivables     8,256       7,945    
             
  PROPERTY AND EQUIPMENT, NET     81,436       81,963    
             
  INTANGIBLE ASSETS, NET     14,268       17,154    
             
  GOODWILL     43,468       43,468    
             
  TOTAL ASSETS   $ 368,980     $ 370,833    
             
  GILAT SATELLITE NETWORKS LTD.  
  CONDENSED CONSOLIDATED BALANCE SHEETS  
  U.S. dollars in thousands  
      June 30,   December 31,  
        2016       2015    
      Unaudited   Audited  
             
  LIABILITIES AND EQUITY          
             
  CURRENT LIABILITIES:          
  Short-term bank credit and loans   $ -     $ 7,000    
  Current maturities of long-term loans     4,558       4,542    
  Trade payables     20,386       17,210    
  Accrued expenses     38,080       23,481    
  Advances from customers     46,549       82,813    
  Advances from customers held by trustees     6,852       8,515    
  Other current liabilities     17,768       16,213    
  Total current liabilities     134,193       159,774    
             
  LONG-TERM LIABILITIES:          
  Accrued severance pay       7,691         7,506    
  Long-term loans, net of current maturities       17,248         21,493    
  Other long-term liabilities       3,207         3,978    
  Total long-term liabilities       28,146         32,977    
             
  EQUITY:          
  Share capital - ordinary shares of NIS 0.2 par value        2,587         2,048    
  Additional paid-in capital       919,530         884,126    
  Accumulated other comprehensive loss       (3,435 )       (3,727 )  
  Accumulated deficit       (712,041 )       (704,365 )  
  Total equity       206,641         178,082    
             
  TOTAL LIABILITIES AND EQUITY   $   368,980     $   370,833