SUBSCRIBE TO TMCnet
TMCnet - World's Largest Communications and Technology Community

TMC NEWS

TMCNET eNEWSLETTER SIGNUP

Gilat Reports Substantial Growth in 2017 Profitability, Tops Adjusted EBITDA Target, Plans Significant Profitability Increase in 2018
[February 13, 2018]

Gilat Reports Substantial Growth in 2017 Profitability, Tops Adjusted EBITDA Target, Plans Significant Profitability Increase in 2018


PETAH TIKVA, Israel, Feb. 13, 2018 /PRNewswire/ -- 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, 2017.

Gilat Logo

Key Financial Highlights:

  • Revenues for Q4 2017 totaled $82.7 million. Full year 2017 revenues of $282.8 million compare with $279.6 million in 2016. 
  • Continued strong profitability:
    • Q4 2017 GAAP operating income was $5.6 million and non-GAAP operating income was $7.0 million.
    • Full year 2017 GAAP operating income climbed substantially to $10.9 million from $0.8 million in 2016.  Non-GAAP operating income for 2017 reached $18.5 million compared to $11.7 million in 2016, an increase of 58.6%.   
    • Q4 2017 GAAP net income was $3.4 million, or $0.06 per diluted share. Q4 2017 non-GAAP net income was $4.7 million, or $0.09 per diluted share. 
    • Full year 2017 GAAP net income increased to $6.8 million, or $0.12 per diluted share, from a loss of $5.3 million, or $0.10 per diluted share, in 2016.  Non-GAAP net income for 2017 more than doubled to $14.6 million, or $0.27 per diluted share, from $5.6 million, or $0.11 per diluted share, in 2016.
    • Q4 2017 Adjusted EBITDA was $9.0 million, or 10.8% of revenues. Full Year 2017 Adjusted EBITDA increased 36.2% to $26.2 million or 9.3% of revenues, from $19.2 million, or 6.9% of revenues in 2016.
  • Management objectives for 2018: revenue range between $285 million to $305 million, GAAP operating income of between $17 million and $21 million, and Adjusted EBITDA between $30 million and $34 million.

 

Yona Ovadia, CEO of Gilat, commented:
"I am very pleased to report that we had a good fourth quarter which concluded a year of significant progress for Gilat, including substantial growth in our full-year profitability as we topped our upwardly revised management objectives for 2017. Our Adjusted EBITDA reached $26.2 million, above our adjusted objective of $24 million to $26 million, which was itself modified upwards mid-year from a range of $20 million to $24 million, and represents an increase of more than 36% from 2016's $19.2 million. Further, for the first time in seven years, we achieved full-year GAAP net income, which totaled $6.8 million, hence delivering on our commitment to GAAP profitability.

"Over the past year we have made substantial progress in executing our strategy, focusing on building a mix of quality and profitable revenues through our strategic growth engines of Mobile Cellular Backhaul and Mobility In-Flight Connectivity (IFC), combined with our efforts to reduce costs.

"We secured several LTE cellular backhauling deals, mainly in North America, and established a strong presence in the IFC market as exemplified by our partnership with Gogo with over 2,000 aircraft according to their backlog. These achievements coupled with our financial performance in 2017, are indicative of the progress we have made on both fronts, and of the solid and healthy foundation on which Gilat stands today, with a growing portion of recurring services.

Mr. Ovadia concluded: "Looking at 2018, we are focused on improving our profitability while growing the top line. We will continue to develop and expand our growth engines of Mobile Cellular Backhaul and Mobility IFC as we see growing reception to our services and solutions. We plan to expand our offering in these areas, and we still see room to improve the efficiency of our operations. Therefore, our management objectives for 2018 are growth in our top line to a range of $285 million to $305 million, and Adjusted EBITDA between $30 million and $34 million, which represents growth of 15% to 30% from 2017's $26.2 million."

Key Recent Announcements:

  • NBN Co and Speedcast Select Gilat for Business and Enterprise Satellite Service in Australia; Valued at Tens of Millions of Dollars
  • KDDI Selects Gilat's Satellite Based LTE Cellular Backhaul Solution for Nationwide LTE Network in Japan

Conference Call and Webcast Details:
Gilat management will host a conference call today, Tuesday, February 13, to discuss the fourth quarter and full year results.  The details are as follows:

Conference Call and Webcast
Following the announcement, Yona Ovadia, Chief Executive Officer, and Adi Sfadia, Chief Financial Officer, will discuss Gilat's 2017 fourth quarter and full year results and participate in a question and answer session: 





Date:              

Tuesday, February 13, 2018

Start:              

09:30 AM EST / 16:30 IST

Dial-in:            

US: 1-888-407-2553


International: (972) 3-918-0610


A simultaneous Webcast of the conference call will be available on the Gilat website at www.gilat.com and through this link: www.veidan-stream.com/gilatq4-2017.html

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

Start:              

February 13, 2018 at 12:00 PM EST / 19:00 IST

End:               

February 16, 2018 at 12:00 PM EST / 19:00 IST

Dial-in:           

US: 1-888-326-9310


International: (972) 3-925-5901

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.

Adjusted EBITDA (operating income before depreciation, amortization, non-cash stock option expenses, costs related to acquisition transactions, restructuring cost, goodwill impairment, impairment of long lived assets, trade secrets litigation expenses and tax expenses under amnesty program) 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 GAAP 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.

This news release also contains a forward-looking estimate of Adjusted EBITDA projected to be generated by Gilat in 2018. A forward-looking estimate of net income and reconciliations of the forward-looking estimates of Adjusted EBITDA to net income are not provided because the items necessary to estimate net income are not estimable at this time. 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.

 

GILAT SATELLITE NETWORKS LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. dollars in thousands (except share and per share data)





Twelve months ended


Three months ended





December 31,


December 31,





2017


2016


2017


2016





Unaudited


Audited


Unaudited












Revenues


$     282,756


$     279,551


$      82,652


$      80,345

Cost of revenues


200,261


204,061


57,416


56,147












Gross profit


82,495


75,490


25,236


24,198












Research and development expenses


29,433


26,477


8,785


7,103

Less - grants


1,419


1,624


599


616

Research and development expenses, net


28,014


24,853


8,186


6,487

Selling and marketing expenses


23,759


23,411


6,572


6,187

General and administrative expenses


19,861


26,471


4,835


5,036












Total operating expenses


71,634


74,735


19,593


17,710












Operating income


10,861


755


5,643


6,488












Financial expenses, net 


(4,307)


(4,843)


(1,138)


(1,668)












Income (loss) before taxes on income


6,554


(4,088)


4,505


4,820












Taxes on income (tax benefit)


(247)


1,252


1,102


285












Net income (loss)


$       6,801


$     (5,340)


$       3,403


$       4,535












Earnings (loss) per share (basic and diluted)


$         0.12


$       (0.10)


$         0.06


$         0.08












Weighted average number of shares used in 










computing earnings (loss) per share










Basic


54,680,822


51,970,458


54,719,903


54,591,346


Diluted


54,851,967


51,970,458


55,237,923


54,615,092

 

 

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, 2017


December 31, 2016



GAAP


Adjustments (1)


Non-GAAP


GAAP


Adjustments (1)


Non-GAAP



Unaudited


Unaudited














Gross profit

$       25,236


1,212


$       26,448


$       24,198


1,204


$       25,402

Operating expenses

19,593


(160)


19,433


17,710


(1,264)


16,446

Operating income

5,643


1,372


7,015


6,488


2,468


8,956

Income before taxes on income

4,505


1,318


5,823


4,820


2,468


7,288

Net income 

$        3,403


1,318


$        4,721


$        4,535


2,468


$        7,003














Earnings per share (basic and diluted)

$          0.06


0.03


$          0.09


$          0.08


0.05


$          0.13



























Weighted average number of shares used in 












   computing earnings per share













    Basic

54,719,903




54,719,903


54,591,346




54,591,346


    Diluted

55,237,923




55,507,634


54,615,092




54,652,640




























(1) Adjustments reflect the effect of non-cash stock-based compensation as per ASC 718, amortization of intangible assets related to


      shares acquisition transactions, trade secrets litigation expenses and tax benefit under amnesty program.
















 Three months ended 


 Three months ended 



December 31, 2017


December 31, 2016





Unaudited






Unaudited
















GAAP net income



$         3,403






$         4,535
















Gross profit












Non-cash stock-based compensation expenses



17






9



Amortization of intangible assets related to acquisition transactions



1,195






1,195







1,212






1,204



Operating expenses












Non-cash stock-based compensation expenses



213






207



Amortization of intangible assets related to acquisition transactions



125






193



Trade secrets litigation expenses



-






864



Tax benefit under amnesty program



(178)






-







160






1,264
















Finance and taxes on income



(54)






-
















Non-GAAP net income



$         4,721






$         7,003
















 

 

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)



 Twelve months ended 


 Twelve months ended 



December 31, 2017


December 31, 2016



GAAP


Adjustments (1)


Non-GAAP


GAAP


Adjustments (1)


Non-GAAP



Unaudited


Unaudited














Gross profit

$       82,495


4,832


$       87,327


$       75,490


4,817


$       80,307

Operating expenses

71,634


(2,802)


68,832


74,735


(6,091)


68,644

Operating income

10,861


7,634


18,495


755


10,908


11,663

Income (loss) before taxes on income

6,554


7,817


14,371


(4,088)


10,908


6,820

Net income (loss)

$        6,801


7,817


$      14,618


$      (5,340)


10,908


$        5,568














Earnings (loss) per share (basic and diluted)

$          0.12


0.15


$          0.27


$        (0.10)


0.21


$          0.11



























Weighted average number of shares used in 












   computing earnings (loss) per share













Basic

54,680,822




54,680,822


51,970,458




51,970,458


Diluted

54,851,967




55,014,640


51,970,458




52,123,677




























(1) Adjustments reflect the effect of non-cash stock-based compensation as per ASC 718, amortization of intangible assets related to


      shares acquisition transactions, trade secrets litigation expenses and tax expenses under amnesty program.
















 Twelve months ended 


 Twelve months ended 



31 December 2017


31 December 2016





 Unaudited 






 Unaudited 
















GAAP net income (loss)



$         6,801






$        (5,340)
















Gross profit












Non-cash stock-based compensation expenses



56






41



Amortization of intangible assets related to
acquisition transactions



4,776






4,776






4,832






4,817



Operating expenses












Non-cash stock-based compensation expenses



800






867



Amortization of intangible assets related to
acquisition transactions



679






777



Trade secrets litigation expenses



873






4,447



Tax expenses under amnesty program



450






-







2,802






6,091
















Finance and taxes on income



183






-
















Non-GAAP net income



$       14,618






$         5,568



 

 

GILAT SATELLITE NETWORKS LTD.

ADJUSTED EBITDA

U.S. dollars in thousands





Twelve months ended


Three months ended





December 31,


December 31,





2017


2016


2017


2016





Unaudited


Unaudited












GAAP operating income

$   10,861


$       755


$     5,643


$     6,488

Add (deduct):








Non-cash stock-based compensation expenses

856


908


230


216

Trade secrets litigation expenses

873


4,447


-


864

Tax expenses (benefit) under amnesty program

450


-


(178)


-

Depreciation and amortization

13,140


13,108


3,256


3,277












Adjusted EBITDA

$ 26,180


$ 19,218


$   8,951


$ 10,845

 

 

GILAT SATELLITE NETWORKS LTD.

CONSOLIDATED BALANCE SHEET

U.S. dollars in thousands








December 31,


December 31,



2017


2016



Unaudited


Audited






ASSETS










CURRENT ASSETS:





Cash and cash equivalents


$           52,957


$          40,133

Restricted cash


29,288


62,229

Restricted cash held by trustees


4,325


9,058

Trade receivables, net


108,842


89,377

Inventories


28,853


21,469

Other current assets


21,970


17,017






   Total current assets


246,235


239,283






LONG-TERM INVESTMENTS:





Severance pay funds


8,188


7,791

Other long term receivables


974


436






Total long-term investments


9,162


8,227






PROPERTY AND EQUIPMENT, NET


82,246


80,837






INTANGIBLE ASSETS, NET


5,709


11,383






GOODWILL


43,468


43,468






TOTAL ASSETS


$         386,820


$        383,198

GILAT SATELLITE NETWORKS LTD.

CONSOLIDATED BALANCE SHEET

U.S. dollars in thousands



December 31,


December 31,



2017


2016



Unaudited


Audited






LIABILITIES AND EQUITY










CURRENT LIABILITIES:





Current maturities of long-term loans


$             4,479


$            4,617

Trade payables 


33,715


29,625

Accrued expenses 


70,534


53,429

Advances from customers and deferred revenues


16,721


37,659

Advances from customers, held by trustees


1,416


7,498

Other current liabilities


20,044


13,846






   Total current liabilities


146,909


146,674






LONG-TERM LIABILITIES:





Accrued severance pay


7,999


7,485

Long-term loans, net of current maturities


12,582


16,932

Other long-term liabilities


1,008


2,281






   Total long-term liabilities


21,589


26,698






EQUITY:





Share capital - ordinary shares of NIS 0.2 par value 


2,601


2,593

Additional paid-in capital


921,726


920,162

Accumulated other comprehensive loss


(3,046)


(3,224)

Accumulated deficit


(702,959)


(709,705)






Total equity


218,322


209,826






TOTAL LIABILITIES AND EQUITY


$         386,820


$        383,198

 

 

GILAT SATELLITE NETWORKS LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands














Twelve months ended


Three months ended




December 31,


December 31,




2017


2016


2017


2016




Unaudited


Audited


Unaudited

Cash flows from operating activities:









Net income (loss)


$     6,801


$    (5,340)


$         3,403


$           4,535

Adjustments required to reconcile net income (loss)









 to net cash provided by (used in) operating activities:









Depreciation and amortization


13,140


13,108


3,256


3,277

Stock-based compensation of options and RSU's


856


908


230


216

Accrued severance pay, net


118


(267)


(11)


(65)

Accrued interest and exchange rate differences on 









   short and long-term restricted cash, net


(239)


(442)


(135)


1,012

Exchange rate differences on long-term loans


186


(43)


35


(99)

Deferred income taxes, net


189


4


489


(1)

Increase in trade receivables, net


(19,588)


(37,586)


(22,421)


(47,695)

Increase in other assets (including short-term, long-term









   and deferred charges)


(4,029)


(3,474)


(400)


(4,593)

Decrease (increase) in inventories


(10,763)


2,221


(1,534)


1,356

Decrease in restricted cash directly related to operating activities, net


38,123


48,519


-


12,991

Increase in trade payables


4,087


12,454


5,169


8,607

Increase in accrued expenses


14,898


30,149


243


4,135

Increase (decrease)  in advances from customers


(18,959)


(53,081)


(7,245)


13,561

Increase (decrease) in advances from customers, held 









   by trustees


(6,185)


(18)


(3,845)


1,010

Increase in other current liabilities and other long term liabilities


2,165


3,666


1,808


2,036

Net cash provided by (used in) operating activities


20,800


10,778


(20,958)


283











Cash flows from investing activities:









Purchase of property and equipment


(3,692)


(4,307)


(283)


(1,485)

Investment in restricted cash held by trustees


(14,218)


(16,200)


(3,416)


(5,275)

Proceeds from restricted cash held by trustees


18,974


16,498


5,586


3,025

Investment in restricted cash (including long-term)


(5,700)


(17,001)


(5,044)


(9,751)

Proceeds from restricted cash (including long-term)


661


7,441


(10)


-

Net cash used in investing activities


(3,975)


(13,569)


(3,167)


(13,486)











Cash flows from financing activities:









Capital lease payments


-


(309)


-


(2)

Issuance of shares in a rights offering


-


35,085


-


(12)

Issuance of restricted stock units and exercise of stock options


661


588


92


63

Short term bank credit, net


-


(7,000)


-


-

Repayment of long-term loans


(4,673)


(4,443)


(145)


(27)

Net cash provided by (used in) financing activities


(4,012)


23,921


(53)


22











Effect of exchange rate changes on cash and cash equivalents


11


568


(99)


(125)











Increase (decrease) in cash and cash equivalents


12,824


21,698


(24,277)


(13,306)











Cash and cash equivalents at the beginning of the period


40,133


18,435


77,234


53,439











Cash and cash equivalents at the end of the period


$  52,957


$  40,133


$      52,957


$        40,133

 

Contact:

Gilat Satellite Networks
Doreet Oren
DoreetO@gilat.com

Comm-Partners LLC
June Filingeri, President
203-972-0186  
junefil@optonline.net

Cision View original content:http://www.prnewswire.com/news-releases/gilat-reports-substantial-growth-in-2017-profitability-tops-adjusted-ebitda-target-plans-significant-profitability-increase-in-2018-300597822.html

SOURCE Gilat Satellite Networks Ltd


[ Back To TMCnet.com's Homepage ]







Technology Marketing Corporation

35 Nutmeg Drive Suite 340, Trumbull, Connecticut 06611 USA
Ph: 800-243-6002, 203-852-6800
Fx: 203-866-3326

General comments: tmc@tmcnet.com.
Comments about this site: webmaster@tmcnet.com.

STAY CURRENT YOUR WAY

© 2018 Technology Marketing Corporation. All rights reserved | Privacy Policy