Gilat Reports Third Quarter 2020 Results

Petah Tikva, Israel, Nov. 10, 2020--Gilat Satellite Networks Ltd. (NASDAQ, TASE: GILT),  today reported its results for the third quarter ended September 30, 2020. Revenues were US$ 37.3 million; compared to US$ 63.4 million in Q3 2019 and similar to that of the previous quarter.   GAAP operating loss was US$ 10.9 million compared to operating income of US$ 7.0 million in Q3 2019 and an operating loss of US$ 3.5 million in the previous quarter. The GAAP operating loss in the quarter includes $8.2 million in expenses related to the Comtech merger and litigation and their effects.

Other financial highlights include (all amounts are in US$):

• Non-GAAP operating loss in the quarter was $1.9 million compared with operating income of $7.5 million in Q3 2019 and compared to an operating loss of $2.6 million in the previous quarter.
• GAAP net loss was $11.6 million, or loss of $0.21 per share, compared with net income of $6.3 million, or income of $0.11 per diluted share in Q3 2019; GAAP net loss in the previous quarter was $4.2 million, or loss of $0.08 per share.
• Non-GAAP net loss was $2.6 million, or $0.05 per diluted share, compared with net income of $6.8 million, or $0.12 per diluted share, in Q3 2019, and compared with net loss of $3.3 million, or $0.06 per share, as reported in the prior quarter.
• Adjusted EBITDA was $0.6 million compared with adjusted EBITDA of $10.1 million in Q3 2019, and adjusted EBITDA of $0.1 million in the previous quarter.
• Gilat plans to distribute $55 million as a cash dividend, out of which $20 million was declared and will be paid on December 2^nd, 2020 and an additional $35 million to be declared subject to court approval.
• Income from the merger termination and litigation settlement paid by Comtech will be recorded in Q4 2020.

Adi Sfadia, Gilat's Interim CEO, commented, “Albeit our third quarter results were still negatively impacted by the ongoing pandemic’s effect and even more so by the litigation with Comtech, I am very optimistic as we continue to see a recovery in most of our areas of operations. During this quarter we made several significant achievements in our strategic growth engines of Cellular Backhaul, NGSO, and in our business in Peru which have resulted in significant increase in our backlog.

"Gilat continues to lead the market of Cellular Backhaul and we continue to reap the benefits of our cellular backhaul managed service strategy that allows us to enjoy larger contracts with recurring revenue. As an example, in North America we had two such major achievements this quarter. Gilat was awarded $20 Million for a three-year managed-service contract-renewal and expansion from a Tier-1 MNO in the United States and a three-year managed service contract by Southern Linc, for coverage to remote areas as well as emergency response.

"In NGSO and VHTS, we are progressing according to schedule with our partner SES to provide our next generation innovative baseband platform for O3B mPOWER. Throughout the last year, we have been working closely with SES with the joint goal of bringing to market unparalleled customer experience in all target verticals.

Further, we just announced that SES and Gilat expanded the O3b mPower partnership with a multi-million-dollar follow-on order for high-speed modems. The modems will deliver multi Gbps throughput, targeting high-end services over the O3b mPOWER MEO constellation.

Lastly, in Peru, we were awarded this quarter a large contract by IPT, a consortium consisting of Telefonica and Facebook among others," said Sfadia.