GAAP Operating Income was $0.8 million; Adjusted EBITDA reached $19.2 Million
PETAH TIKVA, Israel, Feb. 14, 2017 (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 fourth quarter and full year ended December 31, 2016.
Key Financial Highlights:
Revenues for Q4 2016 increased 19% to $80.3 million from $67.7 million in Q4 2015.
Full year 2016 revenues totaled $279.6 million, an increase of 42% from $197.5 million in 2015.
Profitability continued to improve: - Q4 2016 GAAP operating income reached $6.5 million and non-GAAP operating income was $9.0 million. - Full year 2016 GAAP operating income was $0.8 million and non-GAAP operating income was $11.7 million. - GAAP net income for Q4 2016 was $4.5 million, or $0.08 per diluted share, non-GAAP net income was $7.0 million, or $0.13 per diluted share. - GAAP loss for full year 2016 was $5.3 million, or $0.10 per diluted share. Full year 2016 non-GAAP net income was $5.6 million, or $0.11 per diluted share. - Adjusted EBITDA for Q4 2016 was $10.8 million. - Full year 2016 Adjusted EBITDA reached $19.2 million compared with Adjusted EBITDA of $6.1 million in 2015.
Management objectives for 2017: revenues between $280 to $300 million, GAAP operating income between $4 and $8 million, and Adjusted EBITDA of between $20 and $24 million.
“I am pleased to report Gilat's positive results in the fourth quarter and for full year 2016,” said Yona Ovadia, CEO of Gilat. "We made progress in our broadband and In-Flight Connectivity (IFC) growth engines and continued to invest in our technology leadership, while keeping profitability improvement as a high management priority. As a result, we achieved a profitable fourth quarter along with full-year Adjusted EBITDA within the range of our 2016 management objectives, despite ongoing headwinds in Latin America and a slowdown at the end of the year in our Peru project.
“In Q4, as part of our broadband strategy, we are pleased to have made progress also in affordable broadband to consumers, as we recently won Tricolor TV, the largest DTH (Direct-to-Home) provider in Russia, who plans to include our unique world’s first all outdoor Scorpio VSAT. In mobility, our technology continues to be chosen for In-Flight Connectivity (IFC) as reflected in our strategic partnership with Air Esurfing, an Air Media wholly owned subsidiary in China, to deliver broadband connectivity to airlines throughout China. We were also awarded a joint R&D project with Airbus for the development of a fully integrated Electronically Steerable Antenna (ESA) aero terminal based on our leading phased array technology.
“Our management objectives for 2017 are a continuation and acceleration of our achievements in 2016. Our objectives are for revenues between $280 to $300 million, GAAP operating income between $4 and $8 million and Adjusted EBITDA of between $20 and $24 million, which reflect a high management priority on profitability, in parallel with continued focus on our broadband and mobility growth engines, via maintaining product innovation and leadership.”
Key Recent Announcements:
Gilat Awarded a Clean Sky 2 Call to Develop Electronically Steerable Antenna (ESA) for In-Flight Connectivity (IFC) for Airbus Technology Demonstrator
Gilat to Supply Broadband Consumer VSATs for the Joint Service of Tricolor TV and Eutelsat Networks
Gilat and Air Esurfing Announce a Strategic Collaboration to Provide In-Flight Connectivity (IFC) for China’s Domestic Airline Market
Conference Call and Webcast Details: Gilat management will host a conference call today, February 14, at 14:30 GMT / 09:30 AM EST / 16:30 IST to discuss the fourth quarter and full year results. International participants are invited to access the call at (972) 3-918-0610, and US-based participants are invited to access the call by dialing 1-888-407-2553.
The webcast will also be archived for a period of 30 days on the Company’s website and through the link above.
Conference Call Replay A replay of the conference call will be available beginning approximately 17:00 GMT/ 12:00 PM EST/ 19:00 IST today, until 17:00 GMT/ 12:00 PM EST/ 19:00 IST on February 17, 2017.
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.
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 net income, operating income, Adjusted EBITDA and earnings per share. The adjustments to the company’s GAAP results are made with the intent of providing both management and investors a more complete understanding of the company’s underlying operational results, trends and performance. Gilat is presenting Adjusted EBITDA (operating income before depreciation, amortization, non-cash stock option expenses and other costs related to acquisition transactions, restructuring cost, goodwill impairment, impairment of long lived assets and trade secrets litigation expenses) due to a significant increase in litigation expense relating to an ongoing trade secrets litigation in the U.S. against former employees, which commenced in 2015.
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 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 generally accepted accounting principles 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 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 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).
Gilat’s 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, 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.
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GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share and per share data)
Year ended
Three months ended
December 31,
December 31,
2016
2015
2016
2015
Unaudited
Audited
Unaudited
Unaudited
Revenues
$
279,551
$
197,543
$
80,345
$
67,682
Cost of revenues
204,061
143,318
56,147
47,181
Impairment of long lived assets
-
10,137
-
10,137
Gross profit
75,490
44,088
24,198
10,364
Research and development expenses
26,477
24,952
7,103
5,709
Less - grants
1,624
2,540
616
1,977
Research and development, net
24,853
22,412
6,487
3,732
Selling and marketing expenses
23,411
24,823
6,187
6,098
General and administrative expenses
26,471
18,644
5,036
3,418
Restructuring costs
-
1,508
-
522
Goodwill impairment
-
20,402
-
-
Total operating expenses
74,735
87,789
17,710
13,770
Operating income (loss)
755
(43,701
)
6,488
(3,406
)
Financial expenses, net
(4,843
)
(7,243
)
(1,668
)
(1,393
)
Income (loss) before taxes on income
(4,088
)
(50,944
)
4,820
(4,799
)
Taxes on income
1,252
1,190
285
450
Income (loss) from continuing operations
(5,340
)
(52,134
)
4,535
(5,249
)
Loss from discontinued operations
-
(200
)
-
-
Income (loss)
$
(5,340
)
$
(52,334
)
$
4,535
$
(5,249
)
Income (loss) per share from continuing operations (basic and diluted)
(0.10
)
(1.19
)
0.08
(0.12
)
Loss per share from discontinued operations (basic and diluted)
-
(0.00
)
-
-
Income (loss) per share (basic and diluted)
$
(0.10
)
$
(1.19
)
$
0.08
$
(0.12
)
Weighted average number of shares used in computing income (loss) per share
Basic
51,970,458
43,655,309
54,591,346
44,311,825
Diluted
51,970,458
43,655,309
54,615,092
44,311,825
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
December 31, 2016
December 31, 2015
GAAP
Adjustments (1)
Non-GAAP
GAAP
Adjustments (1)
Non-GAAP
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Gross profit
$
24,198
1,204
$
25,402
$
10,364
11,387
$
21,751
Operating expenses
17,710
(1,264
)
16,446
13,770
(989
)
12,781
Operating income (loss)
6,488
2,468
8,956
(3,406
)
12,376
8,970
Income (loss) before taxes on income
4,820
2,468
7,288
(4,799
)
12,376
7,577
Income (loss)
$
4,535
2,468
$
7,003
$
(5,249
)
12,376
$
7,127
Basic income (loss) per share
$
0.08
0.05
$
0.13
$
(0.12
)
0.28
$
0.16
Diluted income (loss) per share
$
0.08
0.05
$
0.13
$
(0.12
)
0.28
$
0.16
Weighted average number of shares used in computing income (loss) per share
Basic
54,591,346
54,591,346
44,311,825
44,311,825
Diluted
54,615,092
54,652,640
44,311,825
44,567,776
(1) Adjustments reflect the effect of non-cash stock-based compensation as per ASC 718, amortization of intangible assets related to shares acquisition transactions, impairment of goodwill and long lived assets, trade secrets litigation expenses, restructuring costs and loss from discontinued operations.
Three months ended
Three months ended
December 31, 2016
December 31, 2015
Unaudited
Unaudited
GAAP income (loss)
$
4,535
$
(5,249
)
Gross profit
Non-cash stock-based compensation expenses
9
52
Amortization of intangible assets related to acquisition transactions
1,195
1,198
Impairment of long lived assets
-
10,137
1,204
11,387
Operating expenses
Non-cash stock-based compensation expenses
207
184
Amortization of intangible assets related to acquisition transactions:
193
190
Trade secrets litigation expenses
864
93
Restructuring costs
-
522
1,264
989
Non GAAP income
$
7,003
$
7,127
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)
Year ended
Year ended
31 December 2016
31 December 2015
GAAP
Adjustments (1)
Non-GAAP
GAAP
Adjustments (1)
Non-GAAP
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Gross profit
$
75,490
4,817
$
80,307
$
44,088
15,146
$
59,234
Operating expenses
74,735
(6,091
)
68,644
87,789
(25,200
)
62,589
Operating income (loss)
755
10,908
11,663
(43,701
)
40,346
(3,355
)
Income (loss) before taxes on income
(4,088
)
10,908
6,820
(50,944
)
40,346
(10,598
)
Income (loss) from continuing operations
(5,340
)
10,908
5,568
(52,134
)
40,346
(11,788
)
Loss from discontinued operations
-
-
-
(200
)
200
-
Income (loss)
$
(5,340
)
10,908
$
5,568
$
(52,334
)
40,546
$
(11,788
)
Income (loss) per share from continuing operations (basic and diluted)
(0.10
)
0.21
0.11
(1.19
)
0.92
(0.27
)
Loss per share from discontinued operations (basic and diluted)
-
-
-
(0.00
)
0.00
-
Income (loss) per share (basic and diluted)
$
(0.10
)
0.21
$
0.11
$
(1.19
)
0.92
$
(0.27
)
Weighted average number of shares used in computing net income (loss) per share
Basic
51,970,458
51,970,458
43,655,309
43,655,309
Diluted
51,970,458
52,123,677
43,655,309
43,655,309
(1) Adjustments reflect the effect of non-cash stock-based compensation as per ASC 718, amortization of intangible assets related to shares acquisition transactions, impairment of goodwill and long lived assets, trade secrets litigation expenses, restructuring costs and loss from discontinued operations.
Year ended
Year ended
31 December 2016
31 December 2015
Unaudited
Unaudited
GAAP loss
$
(5,340
)
$
(52,334
)
Gross profit
Non-cash stock-based compensation expenses
41
217
Amortization of intangible assets related to acquisition transactions
4,776
4,792
Impairment of long lived assets
-
10,137
4,817
15,146
Operating expenses
Non-cash stock-based compensation expenses
867
1,684
Amortization of intangible assets related to acquisition transactions:
777
805
Goodwill impairment
-
20,402
Trade secrets litigation expenses
4,447
801
Restructuring costs
-
1,508
6,091
25,200
Loss from discontinued operations
-
200
Non GAAP income (loss)
$
5,568
$
(11,788
)
GILAT SATELLITE NETWORKS LTD.
CONDENSED ADJUSTED EBITDA
U.S. dollars in thousands
Year ended
Three months ended
December 31,
December 31,
2016
2015
2016
2015
Unaudited
Unaudited
Unaudited
Unaudited
GAAP operating income (loss)
$
755
$
(43,701
)
$
6,488
$
(3,406
)
Add:
Non-cash stock-based compensation expenses
908
1,901
216
236
Restructuring costs
-
1,508
-
522
Impairment of goodwill and long lived assets
-
30,539
-
10,137
Trade secrets litigation expenses
4,447
801
864
93
Depreciation and amortization
13,108
15,072
3,277
3,613
Adjusted EBITDA
$
19,218
$
6,120
$
10,845
$
11,195
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
U.S. dollars in thousands
December 31,
December 31,
2016
2015
Unaudited
Audited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
40,133
$
18,435
Restricted cash
62,229
100,779
Restricted cash held by trustees
9,058
8,524
Trade receivables, net
89,377
50,984
Inventories
21,469
25,358
Other current assets
17,017
16,223
Total current assets
239,283
220,303
LONG-TERM INVESTMENTS AND RECEIVABLES:
Long-term restricted cash
213
179
Severance pay funds
7,791
7,545
Other long term receivables
223
221
Total long-term investments and receivables
8,227
7,945
PROPERTY AND EQUIPMENT, NET
80,837
81,963
INTANGIBLE ASSETS, NET
11,383
17,154
GOODWILL
43,468
43,468
TOTAL ASSETS
$
383,198
$
370,833
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
U.S. dollars in thousands
December 31,
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
4,617
4,542
Trade payables
29,625
17,210
Accrued expenses
53,429
23,481
Advances from customers
29,751
82,813
Advances from customers, held by trustees
7,498
8,515
Other current liabilities
21,754
16,213
Total current liabilities
146,674
159,774
LONG-TERM LIABILITIES:
Accrued severance pay
7,485
7,506
Long-term loans, net of current maturities
16,932
21,493
Other long-term liabilities
2,281
3,978
Total long-term liabilities
26,698
32,977
EQUITY:
Share capital - ordinary shares of NIS 0.2 par value
2,593
2,048
Additional paid-in capital
920,162
884,126
Accumulated other comprehensive loss
(3,224
)
(3,727
)
Accumulated deficit
(709,705
)
(704,365
)
Total equity
209,826
178,082
TOTAL LIABILITIES AND EQUITY
$
383,198
$
370,833
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Year ended
Three months ended
December 31,
December 31,
2016
2015
2016
2015
Unaudited
Unaudited
Unaudited
Unaudited
Cash flows from continuing operations
Cash Flows from Operating Activities:
Net Income (Loss)
$
(5,340
)
$
(52,334
)
$
4,535
$
(5,249
)
Loss from discontinued operations
-
200
-
-
Net income (loss) from continuing operations
(5,340
)
(52,134
)
4,535
(5,249
)
Adjustments required to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and Amortization
13,108
15,072
3,277
3,613
Goodwill impairment
-
20,402
-
-
Impairment of long lived assets
-
10,137
-
10,137
Capital loss from disposal of property and equipment
(88
)
82
-
-
Stock-Based Compensation
908
1,901
216
236
Accrued severance pay, net
(267
)
(111
)
(65
)
163
Accrued interest and exchange rate differences on short and long-term restricted cash, net
(1,382
)
842
72
635
Exchange rate differences on long-term loans
(43
)
(288
)
(99
)
(67
)
Deferred income taxes, net
4
1
(1
)
(10
)
Decrease (increase) in trade receivables, net
(37,586
)
4,553
(47,695
)
(12,177
)
Decrease (increase) in other assets (including short-term, long-term and deferred charges)
(3,386
)
998
(4,593
)
97
Decrease (increase) in inventories
2,221
(2,821
)
1,356
2,090
Decrease (Increase) in restricted cash directly related to operating activities, net
48,519
(87,004
)
12,991
(34,268
)
Increase (decrease) in trade payables
12,454
(5,133
)
8,607
2,514
Increase in accrued expenses
30,149
2,935
4,135
3,444
Increase (decrease) in advance from customers
(53,081
)
79,884
13,561
24,268
Increase (decrease) in advances from customers, held by trustees
922
(2,243
)
1,950
6,168
Increase (decrease) in other current liabilities and other long term liabilities
3,666
(1,860
)
2,036
(1,454
)
Net cash provided by (used in) operating activities
10,778
(14,787
)
283
140
Cash Flows from Investing Activities:
Purchase of property and equipment
(4,307
)
(3,930
)
(1,485
)
(821
)
Investment in restricted cash held by trustees
(16,200
)
(16,634
)
(5,275
)
(10,525
)
Proceeds from restricted cash held by trustees
16,498
21,501
3,025
2,852
Investment in restricted cash (including long-term)
(17,001
)
(22,717
)
(9,751
)
(306
)
Proceeds from restricted cash (including long-term)
7,441
34,120
-
1,561
Net cash provided by (used in) investing activities
(13,569
)
12,340
(13,486
)
(7,239
)
Cash flows from financing activities:
Capital lease payments
(307
)
(609
)
-
(201
)
Issuance of shares in a rights offering
35,095
-
-
-
Issuance of restricted stock units and exercise of stock options
576
5,683
49
88
Payment of obligation related to the purchase of intangible assets
-
(500
)
-
-
Short term bank credit, net
(7,000
)
(5,897
)
-
(2,086
)
Repayment of long-term loans
(4,443
)
(4,544
)
(27
)
(135
)
Net cash provided by (used in) financing activities
23,921
(5,867
)
22
(2,334
)
Effect of exchange rate changes on cash and cash equivalents
568
(977
)
(125
)
145
Increase (decrease) in cash and cash equivalents
21,698
(9,291
)
(13,306
)
(9,288
)
Cash and Cash Equivalents at the Beginning of the Period
18,435
27,726
53,439
27,723
Cash and Cash Equivalents at the End of the Period
$
40,133
$
18,435
$
40,133
$
18,435
Contact:
Gilat Satellite Networks
Doreet Oren
[email protected]
Comm-Partners LLC
June Filingeri, President
203-972-0186
[email protected]