First quarter revenues grew 17% over the
comparable period last year. Based on our backlog and
promising market prospects, management reiterates financial
objectives for FY2016
Gilat Satellite Networks Ltd. (NASDAQ:GILT) (TASE:GILT), a
worldwide leader in satellite networking technology, solutions and
services, today reported its results for the first quarter ended
March 31, 2016.
Key Financial Updates:
- Revenue for Q1 2016 was $52.7 million compared to $45.2 million
in comparable period of 2015, an increase of 17%.
- EBITDA for Q1 2016 increased to $0.5 million compared to $0.2
million in comparable period of 2015.
- Reiterated management objectives for 2016: continued growth
with revenues between $290 and $310 million and EBITDA between $18
and $24 million.
On a GAAP basis, operating loss was $3.0 million in the first
quarter of 2016 as compared to an operating loss of $4.0 million in
the comparable quarter of 2015.
On a non-GAAP basis, operating loss was $1.4 million in the
first quarter of 2016 as compared to an operating loss of $2.1
million in the comparable quarter of 2015.
On a GAAP basis, loss for the quarter was $4.0 million or $0.09
per diluted share compared to a loss of $5.6 million or $0.13 per
diluted share in the same quarter of 2015.
On a non-GAAP basis, the loss for the quarter was $2.4 million
or $0.05 per diluted share compared to a loss of $3.7 million or
$0.09 per diluted share in the same quarter of 2015.
EBITDA for the first quarter of 2016 reached $0.5 million,
compared to $0.2 million in the comparable period in 2015.
"I am pleased to report a good first quarter, which was in-line
with our plans,” said Yona Ovadia, CEO of Gilat. “Our first quarter
results are a strong testament to the validity of our strategy.
Our one-platform/multi-application X-Architecture continued
to gain wide acceptance as the most advanced HTS ground equipment
technology. In the first quarter, Eutelsat chose our X-Architecture
platform to connect to RSCC's Express AMU1/EUTELSAT 36C satellite
for the delivery of broadband services to users throughout western
Russia. SES and Facebook also selected the platform for Facebook’s
initiative to deliver broadband Internet access throughout
Africa.
“In the Mobility market, our In-Flight Connectivity strategy
gained momentum when Gogo, the global leader in providing broadband
connectivity solutions and wireless entertainment to the aviation
industry, selected our next-generation airborne IP network modem
system.
“Our positive first quarter results were achieved despite the
economic slowdown witnessed in the Latin American and CIS markets.
We have more than compensated for these difficult market conditions
with significant achievements in our strategic focus areas,” added
Mr. Ovadia.
“Based on our solid first quarter business progress and results,
our backlog and the prospects we continue to see, we reiterate our
management objectives for FY2016 of a revenue target of $290 to
$310 million and an EBITDA target of $18 to $24 million," concluded
Mr. Ovadia.
Key Recent Announcements:
- Telefonica del Peru Selects Gilat to Extend Cellular and
Broadband Coverage to Rural Areas Nationwide
- Eutelsat Selects Gilat Technology to Power Satellite Broadband
Services in Western Russia
- Gilat Partners with Austria’s Diamond Aircraft to Deliver
Airborne Broadband Connectivity via Satellite
- Gogo Selects Gilat to Provide its Next-Generation Airborne IP
Network Modem System
- SoftBank to Provide High-Speed LTE Services Using Gilat’s
Satellite-Based Cellular Backhaul Technology
Conference Call and Webcast Details: Gilat
management will host a conference call today at 14:30 GMT / 09:30
EST / 16:30 IST to discuss the results. International participants
are invited to access the call at (972)3-918-0644, and US-based
participants are invited to access the call by dialing
(1)888-281-1167. Webcast ReplayA replay of the
conference call will be available beginning approximately 17:00
GMT/ 12:00 EST/ 19:00 IST today, until 17:00 GMT/ 12:00 EST/ 19:00
IST May 21, 2016. International participants are invited to
access the replay of the call at (972)3-925-5901, and US-based
participants are invited to access the call by dialing
(1)888-782-4291.
A replay of the call may also be accessed as a webcast via
Gilat’s website at www.gilat.com and will be archived for 30
days.
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 GilatGilat 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
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, changes
in general economic and business conditions, inability to maintain
market acceptance to Gilat's products, inability to timely develop
and introduce new technologies, products and applications, rapid
changes in the market for Gilat's 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 Company's
proprietary technology and risks associated with Gilat's
international operations and its location in Israel. We undertake
no obligation to update or revise any forward-looking statements
for any reason. For additional information regarding these and
other risks and uncertainties associated with Gilat's business,
reference is made to Gilat's reports filed from time to time with
the Securities and Exchange Commission.
|
|
|
|
GILAT SATELLITE
NETWORKS LTD. |
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS |
|
|
|
U.S. dollars in
thousands (except share and per share data) |
|
|
|
|
Three months ended |
|
|
March 31, |
|
|
|
2016 |
|
|
2015 |
|
|
|
Unaudited |
Unaudited |
|
|
|
|
|
Revenues |
|
52,665 |
|
|
45,190 |
|
|
Cost of revenues |
|
40,267 |
|
|
31,998 |
|
|
Gross
profit |
|
12,398 |
|
|
13,192 |
|
|
|
|
|
|
Research and
development expenses |
|
5,888 |
|
|
6,534 |
|
|
Less - grants |
|
86 |
|
|
190 |
|
|
Research and
development expenses, net |
|
5,802 |
|
|
6,344 |
|
|
Selling and marketing
expenses |
|
5,123 |
|
|
6,263 |
|
|
General and
administrative expenses |
|
4,438 |
|
|
4,591 |
|
|
Total operating
expenses |
|
15,363 |
|
|
17,198 |
|
|
Operating
loss |
|
(2,965 |
) |
|
(4,006 |
) |
|
Financial expenses,
net |
|
(743 |
) |
|
(1,351 |
) |
|
Loss before
taxes on income |
|
(3,708 |
) |
|
(5,357 |
) |
|
Taxes on income |
|
318 |
|
|
249 |
|
|
Loss |
|
(4,026 |
) |
|
(5,606 |
) |
|
|
|
|
|
Loss per share
(basic and diluted) |
|
(0.09 |
) |
|
(0.13 |
) |
|
|
|
|
|
Weighted
average number of shares used in computing loss per share (basic
and diluted) |
|
44,382,379 |
|
|
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 |
|
|
March 31, 2016 |
March 31, 2015 |
|
|
GAAP |
Adjustments 1 |
Non-GAAP |
GAAP |
Adjustments 1 |
Non-GAAP |
|
|
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
|
|
|
|
|
|
|
|
|
Gross profit |
|
12,398 |
|
|
1,184 |
|
|
13,582 |
|
|
13,192 |
|
|
1,251 |
|
|
14,443 |
|
|
Operating expenses |
|
15,363 |
|
|
(405 |
) |
|
14,958 |
|
|
17,198 |
|
|
(688 |
) |
|
16,510 |
|
|
Operating loss |
|
(2,965 |
) |
|
1,589 |
|
|
(1,376 |
) |
|
(4,006 |
) |
|
1,939 |
|
|
(2,067 |
) |
|
Loss before taxes on
income |
|
(3,708 |
) |
|
1,589 |
|
|
(2,119 |
) |
|
(5,357 |
) |
|
1,939 |
|
|
(3,418 |
) |
|
Loss |
|
(4,026 |
) |
|
1,589 |
|
|
(2,437 |
) |
|
(5,606 |
) |
|
1,939 |
|
|
(3,667 |
) |
|
|
|
|
|
|
|
|
|
Loss per share (basic
and diluted) |
|
(0.09 |
) |
|
0.04 |
|
|
(0.05 |
) |
|
(0.13 |
) |
|
0.04 |
|
|
(0.09 |
) |
|
|
|
|
|
|
|
|
|
Weighted average number
of shares used in |
|
|
|
|
|
|
|
computing loss per share (basic and
diluted) |
|
44,382,379 |
|
|
|
44,382,379 |
|
|
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 |
|
|
|
|
March 31, 2016 |
|
|
March 31, 2015 |
|
|
|
|
Unaudited |
|
|
Unaudited |
|
|
|
|
|
|
|
|
|
|
GAAP loss |
|
|
(4,026 |
) |
|
|
|
(5,606 |
) |
|
|
Gross profit: |
|
|
|
|
|
|
|
Non-cash stock-based
compensation expenses (income) |
|
|
(11 |
) |
|
|
|
52 |
|
|
|
Amortization of
intangible assets related to acquisition transactions |
|
|
1,195 |
|
|
|
|
1,199 |
|
|
|
|
|
|
1,184 |
|
|
|
|
1,251 |
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
Non-cash stock-based
compensation expenses |
|
|
212 |
|
|
|
|
476 |
|
|
|
Amortization of
intangible assets related to acquisition transactions |
|
|
193 |
|
|
|
|
212 |
|
|
|
|
|
|
405 |
|
|
|
|
688 |
|
|
|
|
|
|
|
|
|
|
|
Non GAAP loss |
|
|
(2,437 |
) |
|
|
|
(3,667 |
) |
|
|
|
|
|
|
|
|
|
|
GILAT SATELLITE
NETWORKS LTD. |
|
|
|
CONDENSED
EBITDA |
|
|
|
US dollars in
thousands |
|
|
|
|
Three months ended |
|
|
March
31, |
|
|
|
2016 |
|
|
2015 |
|
|
|
Unaudited |
Unaudited |
|
|
|
|
|
GAAP operating
loss |
|
(2,965 |
) |
|
(4,006 |
) |
|
Add: |
|
|
|
Non-cash stock-based
compensation expenses |
|
201 |
|
|
528 |
|
|
Depreciation and
amortization |
|
3,301 |
|
|
3,658 |
|
|
EBITDA |
|
537 |
|
|
180 |
|
|
|
GILAT SATELLITE
NETWORKS LTD. |
|
|
|
CONDENSED
CONSOLIDATED BALANCE SHEET |
|
|
|
US dollars in
thousands |
|
|
|
|
|
|
|
|
March 31, |
December 31, |
|
|
|
2016 |
|
|
2015 |
|
|
|
Unaudited |
Audited |
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
CURRENT
ASSETS: |
|
|
|
Cash and cash equivalents |
|
33,160 |
|
|
18,435 |
|
|
Restricted cash |
|
87,707 |
|
|
100,779 |
|
|
Restricted cash held by
trustees |
|
5,279 |
|
|
8,524 |
|
|
Trade receivables, net |
|
52,806 |
|
|
50,984 |
|
|
Inventories |
|
28,072 |
|
|
25,358 |
|
|
Other current assets |
|
18,432 |
|
|
16,223 |
|
|
Total current
assets |
|
225,456 |
|
|
220,303 |
|
|
|
|
|
|
LONG-TERM
INVESTMENTS AND RECEIVABLES: |
|
|
|
Long-term restricted cash |
|
188 |
|
|
179 |
|
|
Severance pay funds |
|
7,904 |
|
|
7,545 |
|
|
Other long term receivables and
deferred charges |
|
223 |
|
|
221 |
|
|
Total long-term investments
and receivables |
|
8,315 |
|
|
7,945 |
|
|
|
|
|
|
PROPERTY AND
EQUIPMENT, NET |
|
81,220 |
|
|
81,963 |
|
|
|
|
|
|
INTANGIBLE
ASSETS, NET |
|
15,711 |
|
|
17,154 |
|
|
|
|
|
|
GOODWILL |
|
43,468 |
|
|
43,468 |
|
|
|
|
|
|
TOTAL
ASSETS |
|
374,170 |
|
|
370,833 |
|
|
|
|
|
|
GILAT SATELLITE
NETWORKS LTD. |
|
|
|
CONDENSED
CONSOLIDATED BALANCE SHEET |
|
|
|
US dollars in
thousands |
|
|
|
|
|
|
|
|
March 31, |
December 31, |
|
|
|
2016 |
|
|
2015 |
|
|
|
Unaudited |
Audited |
|
|
|
|
|
LIABILITIES AND
EQUITY |
|
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
Short-term bank credit and
loans |
|
4,250 |
|
|
7,000 |
|
|
Current maturities of long-term
loans |
|
4,568 |
|
|
4,542 |
|
|
Trade payables |
|
21,176 |
|
|
17,210 |
|
|
Accrued expenses |
|
31,022 |
|
|
23,481 |
|
|
Advances from customers |
|
71,008 |
|
|
82,813 |
|
|
Advances from customers, held by
trustees |
|
4,578 |
|
|
8,515 |
|
|
Other current liabilities |
|
17,631 |
|
|
16,213 |
|
|
|
|
|
|
Total current
liabilities |
|
154,233 |
|
|
159,774 |
|
|
|
|
|
|
LONG-TERM LIABILITIES: |
|
|
|
Accrued severance pay |
|
7,742 |
|
|
7,506 |
|
|
Long-term loans, net of current
maturities |
|
17,418 |
|
|
21,493 |
|
|
Other long-term liabilities |
|
3,744 |
|
|
3,978 |
|
|
|
|
|
|
Total long-term
liabilities |
|
28,904 |
|
|
32,977 |
|
|
|
|
|
|
EQUITY: |
|
|
|
Share capital - ordinary shares of
NIS 0.2 par value |
|
2,578 |
|
|
2,048 |
|
|
Additional paid-in capital |
|
899,376 |
|
|
884,126 |
|
|
Accumulated other comprehensive
loss |
|
(2,530 |
) |
|
(3,727 |
) |
|
Accumulated deficit |
|
(708,391 |
) |
|
(704,365 |
) |
|
|
|
|
|
Total equity |
|
191,033 |
|
|
178,082 |
|
|
|
|
|
|
TOTAL LIABILITIES AND EQUITY |
|
374,170 |
|
|
370,833 |
|
|
|
|
|
|
|
|
|
|
|
|
GILAT SATELLITE
NETWORKS LTD. |
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
|
|
US dollars in
thousands |
|
|
|
|
|
|
|
|
Three months ended |
|
|
March
31, |
|
|
|
2016 |
|
|
2015 |
|
|
|
Unaudited |
Unaudited |
|
Cash flows from operating activities: |
|
|
|
Loss from continuing operations |
|
(4,026 |
) |
|
(5,606 |
) |
|
Adjustments required to reconcile loss |
|
|
|
to net cash provided by (used in) operating
activities: |
|
|
|
Depreciation and
amortization |
|
3,301 |
|
|
3,658 |
|
|
Stock-based
compensation |
|
201 |
|
|
528 |
|
|
Accrued severance pay,
net |
|
(123 |
) |
|
(101 |
) |
|
Accrued interest and
exchange rate differences on |
|
|
|
short and long-term restricted
cash, net |
|
(409 |
) |
|
43 |
|
|
Exchange rate
differences on long-term loans |
|
90 |
|
|
(329 |
) |
|
Deferred income taxes,
net |
|
- |
|
|
(41 |
) |
|
Decrease (increase) in
trade receivables, net |
|
(1,394 |
) |
|
721 |
|
|
Decrease (increase) in
other assets (including short-term, long-term |
|
|
|
and deferred charges) |
|
(2,154 |
) |
|
2,934 |
|
|
Increase in
inventories |
|
(2,685 |
) |
|
(4,182 |
) |
|
Decrease in restricted
cash directly related to operating activities, net |
|
6,304 |
|
|
- |
|
|
Increase (decrease) in
trade payables |
|
4,089 |
|
|
(195 |
) |
|
Increase (decrease) in
accrued expenses |
|
7,408 |
|
|
(2,173 |
) |
|
Decrease in advance
from customers |
|
(11,823 |
) |
|
(767 |
) |
|
Decrease in advances
from customers, held |
|
|
|
by trustees |
|
(4,063 |
) |
|
(5,178 |
) |
|
Increase in other
current liabilities and other long term liabilities |
|
1,221 |
|
|
5,017 |
|
|
Net cash used
in operating activities |
|
(4,063 |
) |
|
(5,671 |
) |
|
|
|
|
|
GILAT SATELLITE
NETWORKS LTD. |
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
|
|
US dollars in
thousands |
|
|
|
|
|
|
|
|
Three months ended |
|
|
March
31, |
|
|
|
2016 |
|
|
2015 |
|
|
|
Unaudited |
Unaudited |
|
Cash flows from
investing activities: |
|
|
|
Purchase of property
and equipment |
|
(1,104 |
) |
|
(741 |
) |
|
Proceeds from
restricted cash held by trustees |
|
3,675 |
|
|
10,922 |
|
|
Investment in
restricted cash (including long-term) |
|
(179 |
) |
|
(10,052 |
) |
|
Proceeds from
restricted cash (including long-term) |
|
7,347 |
|
|
22,117 |
|
|
Net cash
provided by investing activities |
|
9,739 |
|
|
22,246 |
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
Capital lease
payments |
|
(51 |
) |
|
(102 |
) |
|
Issuance of shares in a
rights offering |
|
15,243 |
|
|
- |
|
|
Issuance of restricted
stock units and exercise of stock options |
|
336 |
|
|
793 |
|
|
Short term bank credit,
net |
|
(2,750 |
) |
|
(10,007 |
) |
|
Repayment of long-term
loans |
|
(4,139 |
) |
|
(4,135 |
) |
|
Net cash
provided by (used in) financing activities |
|
8,639 |
|
|
(13,451 |
) |
|
|
|
|
|
Effect of
exchange rate changes on cash and cash equivalents |
|
410 |
|
|
(485 |
) |
|
|
|
|
|
Increase in
cash and cash equivalents |
|
14,725 |
|
|
2,639 |
|
|
|
|
|
|
Cash and cash
equivalents at the beginning of the period |
|
18,435 |
|
|
27,726 |
|
|
|
|
|
|
Cash and cash
equivalents at the end of the period |
|
33,160 |
|
|
30,365 |
|
|
|
|
|
|
Contact:
Gilat Satellite Networks
Doreet Oren
DoreetO@gilat.com
Comm-Partners LLC
June Filingeri, President
203-972-0186
junefil@optonline.net
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