PETAH TIKVA, Israel, Aug. 08, 2023 (GLOBE NEWSWIRE) -- Gilat Satellite Networks Ltd. (NASDAQ:GILT, TASE: GILT))), a worldwide leader in satellite networking technology, solutions and services, reported today its results for the second quarter, ended June 30, 2023.

Second Quarter 2023 Financial Highlights

Revenues of $67.6 million, up 22% compared with $55.5 million in Q2 2022;
GAAP operating income of $5.4 million, compared with $1.5 million in Q2 2022;
Non-GAAP operating income of $6.1 million, compared with $2.4 million in Q2 2022;
GAAP net income of $4.3 million, or $0.08 earnings per diluted share, compared with $0.5 million, or $0.01 earnings per diluted share in Q2 2022;
Non-GAAP net income of $4.9 million, or $0.09 earnings per diluted share, compared with $1.4 million, or $0.03 earnings per diluted share in Q2 2022;
Adjusted EBITDA of $9.2 million, up 74% compared with $5.3 million in Q2 2022;

Forward-Looking Expectations

The Company today raised its 2023 revenues guidance to between $265 to $285 million, representing year-over-year growth of 15% at the mid-point, as well as increased its GAAP operating income guidance to between $18 to $22 million, representing year-over-year growth of 101% at the mid-point and its adjusted EBITDA guidance to between $33 to $37 million, representing year-over-year growth of 39% at the mid-point.

Adi Sfadia, Gilat's CEO, commented:

"We are very pleased with our strong second quarter results, with solid growth in revenue, which was up 22% year-over-year, and a stronger growth in Adjusted EBITDA, up 74% year-over-year, demonstrating operating leverage in our business model. The revenue growth was broad across most of our business areas, a testimony to the strong market interest in Gilat's solutions as well as growing interest in satellite communications overall.

We are experiencing a significant expansion in our in-flight connectivity (IFC) business with a growing demand for both electronically steered antennas (ESA) and Solid-State Power Amplifiers (SSPA) from existing and new customers.

We signed a significant agreement and received the first orders from Satcom Direct, for the development and supply of new ultra-low profile electronically steered antennas (ESA) to operate over OneWeb's LEO constellation. This ESA project is an important turning point and an important future growth engine as we increase our presence by entering new market segments such as IFC for business jets, as well as connectivity for government and military aviation.

We are progressing in obtaining the necessary regulatory approvals for our acquisition of DataPath Inc., which was announced during the first quarter. Conditioned upon this process's satisfactory conclusion, we anticipate that the closing of the transaction will occur in Q4 2023."

Mr. Sfadia concluded, "Not only did we report strong results in the quarter, but we also had strong bookings and signed some strategic deals this quarter, all of which led us to increase our 2023 guidance and makes me confident about our ability to materialize our long-term growth potential."

Key Recent Announcements

Satcom Direct and Gilat Sign Strategic Agreement for Joint ESA Project to Expand Plane Simple® Portfolio
Tier 1 Telecom Operator Selects Gilat Satellite Connectivity for a Major Western European Utility Company
Gilat Awarded Millions of Dollars in Orders for Cellular Backhaul Over Satellite Project in Mexico

Conference Call Details

Gilat's management will discuss its second quarter 2023 results and business achievements and participate in a question-and-answer session:

Date: Tuesday, August 8, 2023

Start: 09:30 AM EDT / 16:30 IDT

Dial-in: US: 1-888-407-2553

International: +972-3-918-0609

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/gilatq2-2023

The webcast will also be archived for a period of 30 days on the Company's website and through the link above.

Non-GAAP Measures

The 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 gross profit, operating expenses, operating income, income before taxes on income, net income (loss), adjusted EBITDA, and earnings (losses) per share. The adjustments to the Company's GAAP results are made with the intent of providing both management and investors with a more complete understanding of the Company's underlying operational results, trends, and performance. Non-GAAP financial measures mainly exclude, if and when applicable, the effect of non-cash stock-based compensation expenses, amortization of purchased intangibles, amortization of intangible assets related to acquisition transactions, lease incentive amortization, impairment of held for sale asset, income tax effect on adjustments, one-time changes of deferred tax assets, and other operating expenses (income), net.

Adjusted EBITDA is presented to compare the Company's performance to that of prior periods and evaluate the Company's financial and operating results on a consistent basis from period to period. The Company also believes this measure, when viewed in combination with the Company's 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 (loss) 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 net income (loss) and adjusted EBITDA is presented in the attached summary financial statements.

Non-GAAP presentations of gross profit, operating expenses, operating income, income before taxes on income, net income (loss), adjusted EBITDA and earnings (losses) 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 Gilat's 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 over 35 years of experience, we create and deliver deep technology solutions for satellite, ground and new space connectivity and provide comprehensive end-to-end solutions and services, powered by our innovative technology. We believe in the right of all people to be connected and are united in our resolution to provide communication solutions to all reaches of the world.

Delivering high value solutions, our portfolio is comprised of a cloud-based platform and high performance satellite terminals designed to work in harmony with satellite constellations, including Very High Throughput Satellites (VHTS) and Software-Defined Satellites (SDS) in multiple orbits; high performance Satellite On-the-Move (SOTM) antennas; and highly efficient, high-power Solid State Power Amplifiers (SSPA) and Block Upconverters (BUC).

Gilat's comprehensive solutions support multiple applications with a full portfolio of products to address key applications including broadband access, mobility, cellular backhaul, military, government, and enterprise, all while meeting the most stringent service level requirements. 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 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. 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. We undertake no obligation to update or revise any forward-looking statements for any reason.

Contact:

Gilat Satellite Networks

Doreet Oren, Senior Director Corporate Communications

DoreetO@gilat.com

Gilat Satellite Networks

Mayrav Sher, Head of Finance and Investor Relations

MayravS@gilat.com

EK Global IR

Ehud Helft, Managing Partner

ehud@ekgir.com

GILAT SATELLITE NETWORKS LTD.
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
U.S. dollars in thousands (except share and per share data)
		Six months ended							Three months ended
		June 30,							June 30,
			2023				2022			2023			2022
		Unaudited							Unaudited

Revenues		$	126,551		$		106,863		$	67,589	$		55,454
Cost of revenues			76,330				70,706			42,053			35,685

Gross profit			50,221				36,157			25,536			19,769

Research and development expenses, net			19,003				16,386			9,384			8,718
Selling and marketing expenses			11,941				10,310			5,932			4,960
General and administrative expenses			9,155			*)	8,495			4,724		*)	4,311
Impairment of held for sale asset			-				439			-			229
Other operating expenses (income), net			(2,340	)		*)	60			47		*)	60

Total operating expenses			37,759				35,690			20,087			18,278

Operating income			12,462				467			5,449			1,491

Financial expenses, net			735				1,663			586			468

Income (loss) before taxes on income			11,727				(1,196	)		4,863			1,023

Taxes on income			1,822				832			538			517

Net income (loss)		$	9,905		$		(2,028	)	$	4,325	$		506

Earnings (losses) per share (basic and diluted)		$	0.17		$		(0.04	)	$	0.08	$		0.01

Weighted average number of shares used in computing earnings (losses) per share
	Basic		56,615,714				56,574,296			56,617,943			56,597,523
	Diluted		56,622,204				56,574,296			56,620,977			56,637,208

*) Reclassified

GILAT SATELLITE NETWORKS LTD.
RECONCILIATION BETWEEN GAAP AND NON-GAAP CONSOLIDATED STATEMENTS OF INCOME
FOR COMPARATIVE PURPOSES
U.S. dollars in thousands (except share and per share data)
	Three months ended							Three months ended
	June 30, 2023							June 30, 2022
	GAAP		*Adjustments()**			Non-GAAP		GAAP		*Adjustments()**			Non-GAAP
	Unaudited							Unaudited

Gross profit	$	25,536		95		$	25,631	$	19,769		81		$	19,850
Operating expenses		20,087		(513	)		19,574		18,278		(832	)		17,446
Operating income		5,449		608			6,057		1,491		913			2,404
Income before taxes on income		4,863		608			5,471		1,023		913			1,936
Net income	$	4,325		608		$	4,933	$	506		913		$	1,419

Earnings per share (basic and diluted)	$	0.08	$	0.01		$	0.09	$	0.01	$	0.02		$	0.03


Weighted average number of shares used in computing earnings per share
Basic		56,617,943					56,617,943		56,597,523					56,597,523
Diluted		56,620,977					56,620,977		56,637,208					56,773,970


(*) Adjustments reflect the effect of non-cash stock-based compensation as per ASC 718, amortization of intangible assets related to acquisition transactions, impairment of held for sale asset and other operating expenses


	Three months ended							Three months ended
	June 30, 2023							June 30, 2022
			Unaudited							Unaudited

GAAP net income			$	4,325						$	506

Gross profit
Non-cash stock-based compensation expenses				95							76
Amortization of intangible assets related to acquisition transactions				-							5
				95							81
Operating expenses
Non-cash stock-based compensation expenses				417							493
Amortization of intangible assets related to acquisition transactions				49							50
Impairment of held for sale asset				-							229
Other operating expenses				47							60
				513							832

Non-GAAP net income			$	4,933						$	1,419

GILAT SATELLITE NETWORKS LTD.
RECONCILIATION BETWEEN GAAP AND NON-GAAP CONSOLIDATED STATEMENTS OF INCOME (LOSS)
FOR COMPARATIVE PURPOSES
U.S. dollars in thousands (except share and per share data)
	Six months ended							Six months ended
	June 30, 2023							June 30, 2022
	GAAP		*Adjustments()**			Non-GAAP		GAAP			*Adjustments()**			Non-GAAP
	Unaudited							Unaudited

Gross profit	$	50,221		170		$	50,391	$	36,157			156		$	36,313
Operating expenses		37,759		1,296			39,055		35,690			(1,515	)		34,175
Operating income		12,462		(1,126	)		11,336		467			1,671			2,138
Income (loss) before taxes on income		11,727		(1,126	)		10,601		(1,196	)		1,671			475
Net income (loss)		9,905		(1,126	)		8,779		(2,028	)		1,671			(357	)

Earnings (losses) per share (basic and diluted)	$	0.17	$	(0.01	)	$	0.16	$	(0.04	)	$	0.03		$	(0.01	)


Weighted average number of shares used in computing earnings (losses) per share
Basic		56,615,714					56,615,714		56,574,296						56,574,296
Diluted		56,622,204					56,622,204		56,574,296						56,574,296


(*) Adjustments reflect the effect of non-cash stock-based compensation as per ASC 718, amortization of intangible assets related to acquisition transactions, impairment of held for sale asset and other operating expenses (income), net



	Six months ended							Six months ended
	June 30, 2023							June 30, 2022
			Unaudited								Unaudited

GAAP net income (loss)			$	9,905							$	(2,028	)

Gross profit
Non-cash stock-based compensation expenses				170								145
Amortization of intangible assets related to acquisition transactions				-								11
				170								156
Operating expenses
Non-cash stock-based compensation expenses				944								916
Amortization of intangible assets related to acquisition transactions				100								100
Impairment of held for sale asset				-								439
Other operating expenses (income), net				(2,340	)							60
				(1,296	)							1,515

Non-GAAP net income (loss)			$	8,779							$	(357	)

GILAT SATELLITE NETWORKS LTD.
SUPPLEMENTAL INFORMATION
U.S. dollars in thousands


ADJUSTED EBITDA:

	Six months ended						Three months ended
	June 30,						June 30,
		2023			2022			2023		2022
	Unaudited						Unaudited

GAAP net income (loss)	$	9,905		$	(2,028	)	$	4,325	$	506
Adjustments:
Financial expenses, net		735			1,663			586		468
Taxes on income		1,822			832			538		517
Non-cash stock-based compensation expenses		1,114			1,061			512		569
Impairment of held for sale asset		-			439			-		229
Other operating expenses (income), net		(2,340	)		60			47		60
Depreciation and amortization (*)		6,335			5,792			3,172		2,941

Adjusted EBITDA	$	17,571		$	7,819		$	9,180	$	5,290

(*) Including amortization of lease incentive

SEGMENT REVENUES:

	Six months ended						Three months ended
	June 30,						June 30,
		2023			2022			2023		2022
	Unaudited						Unaudited

Satellite Networks	$	74,273		$	51,627		$	40,727	$	26,857
Integrated Solutions		25,619			29,397			12,700		15,691
Network Infrastructure and Services		26,659			25,839			14,162		12,906

Total revenues	$	126,551		$	106,863		$	67,589	$	55,454


	GILAT SATELLITE NETWORKS LTD.
	CONSOLIDATED BALANCE SHEETS
	U.S. dollars in thousands

		June 30,			December 31,
			2023			2022
		Unaudited			Audited

	ASSETS

CURRENT ASSETS:
	Cash and cash equivalents	$	87,408		$	86,591
	Restricted cash		374			541
	Trade receivables, net		41,577			50,644
	Contract assets		17,557			24,971
	Inventories		40,049			33,024
	Other current assets		22,744			19,283

	Total current assets		209,709			215,054

LONG-TERM ASSETS:
	Restricted cash		14			13
	Long-term contract assets		9,980			11,149
	Severance pay funds		5,551			5,947
	Deferred taxes		16,445			18,265
	Operating lease right-of-use assets		3,198			3,891
	Other long-term assets		9,086			10,737

	Total long-term assets		44,274			50,002

PROPERTY AND EQUIPMENT, NET			73,895			76,578

INTANGIBLE ASSETS, NET			209			309

GOODWILL			43,468			43,468

TOTAL ASSETS		$	371,555		$	385,411

GILAT SATELLITE NETWORKS LTD.
CONSOLIDATED BALANCE SHEETS (Cont.)
U.S. dollars in thousands

		June 30,			December 31,
			2023			2022
		Unaudited			Audited

	LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
	Trade payables	$	14,662		$	20,668
	Accrued expenses		43,091			50,356
	Advances from customers and deferred revenues		33,240			30,531
	Operating lease liabilities		1,870			1,941
	Other current liabilities		14,353			22,291

	Total current liabilities		107,216			125,787

LONG-TERM LIABILITIES:
	Accrued severance pay		6,381			6,580
	Long-term advances from customers and deferred revenues		1,480			1,041
	Operating lease liabilities		1,261			1,890
	Other long-term liabilities		181			5,988

	Total long-term liabilities		9,303			15,499

SHAREHOLDERS' EQUITY:
	Share capital - ordinary shares of NIS 0.2 par value		2,711			2,711
	Additional paid-in capital		933,200			932,086
	Accumulated other comprehensive loss		(6,955	)		(6,847	)
	Accumulated deficit		(673,920	)		(683,825	)

	Total shareholders' equity		255,036			244,125

	TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	371,555		$	385,411

GILAT SATELLITE NETWORKS LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands

	Six months ended						Three months ended
	June 30,						June 30,
		2023			2022			2023			2022
	Unaudited						Unaudited
Cash flows from operating activities:
Net income (loss)	$	9,905		$	(2,028	)	$	4,325		$	506
Adjustments required to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		6,222			5,683			3,115			2,887
Impairment of held for sale asset		-			439			-			229
Stock-based compensation of options		1,114			1,061			512			569
Accrued severance pay, net		196			114			(101	)		177
Deferred taxes, net		1,820			1,664			694			1,358
Decrease (increase) in trade receivables, net		9,398			(11,883	)		2,907			(5,471	)
Decrease (increase) in contract assets		8,378			(2,608	)		3,461			(599	)
Decrease (increase) in other assets and other adjustments (including short-term, long-term and effect of exchange rate changes on cash and cash equivalents)		243			(7,763	)		3,010			(4,047	)
Increase in inventories		(7,895	)		(4,075	)		(272	)		(1,731	)
Increase (decrease) in trade payables		(4,240	)		4,205			(6,229	)		2,533
Decrease in accrued expenses		(5,039	)		(1,690	)		(2,840	)		(2,442	)
Increase in advance from customers and deferred revenue		3,124			7,010			7,593			4,700
Decrease in other liabilities		(15,009	)		(810	)		(14,161	)		(1,975	)
Net cash provided by (used in) operating activities		8,217			(10,681	)		2,014			(3,306	)

Cash flows from investing activities:
Purchase of property and equipment		(6,556	)		(4,515	)		(3,524	)		(2,314	)
Repayment of short term deposits		-			2,159			-			2,159
Net cash used in investing activities		(6,556	)		(2,356	)		(3,524	)		(155	)

Effect of exchange rate changes on cash, cash equivalents and restricted cash		(1,010	)		32			(433	)		(221	)

Increase (decrease) in cash, cash equivalents and restricted cash		651			(13,005	)		(1,943	)		(3,682	)

Cash, cash equivalents and restricted cash at the beginning of the period		87,145			84,463			89,739			75,140

Cash, cash equivalents and restricted cash at the end of the period	$	87,796		$	71,458		$	87,796		$	71,458