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Gilat Reports Full Year 2015 Results With a Good Fourth Quarter and Forecasted Profitable Growth for 2016

PETAH TIKVA, Israel, Feb. 17, 2016 (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 year ended December 31, 2015.

Key Financial Updates:

  • Revenues for the fourth quarter of 2015 were $67.7 million compared to $40.3 million in the third quarter of 2015 and $73.1 million in the comparable period of 2014.

  • Revenue for 2015 was $197.5 million compared to $235.1 million in 2014.

  • EBITDA for the fourth quarter of 2015 was of $11.1 million compared to a loss of $3.4 million in the third quarter of 2015 and EBITDA of $10.4 million in the comparable period of 2014.

  • EBITDA for 2015 was $5.3 million compared to EBITDA of $23.4 million in 2014.

  • Cash balances, including restricted cash, net of short-term bank credits, increased by $32.5 million compared to September 30, 2015, resulting in a cash balance of $120.9 million as of December 31, 2015.

  • Company recorded $10.1 million impairment of long-lived assets related to the Kioscos project in Colombia.

  • Management objectives for 2016 of revenues between $290 and $310 million and EBITDA between $18 and $24 million.

“I am pleased with the results of Q4 2015, in which we demonstrated strong revenue, profit and wins, providing a positive ending to a challenging year,” said Dov Baharav, Gilat’s Interim CEO and Chairman of the Board. “We made very encouraging progress in the In-Flight Connectivity (IFC) market, further penetration to the Chinese market, with sales to Synertone, and an additional win of a $108 million project in Peru, together with high acceptance of Gilat’s HTS X-Architecture for mobility and fixed applications including cellular backhaul.

“A prime example is SoftBank, which selected Gilat’s satellite-based cellular backhaul technology for the provision of LTE services to remote sites in Japan. Gilat’s SkyEdge II-c Capricorn platform is the first satellite solution to deliver a 4G handset user experience on par with terrestrial networks.

“The positive developments of Q4 vindicate our strategy and give us confidence in our projected growth for 2016 and beyond,” Mr. Baharav added.

Revenues for the fourth quarter of 2015 were $67.7 million, compared to $73.1 million for the same period in 2014. Revenues for the year ended December 31, 2015 were $197.5 million, compared to $235.1 million in the year ended December 31, 2014. Revenues in the fourth quarter were below the updated management objectives, mainly due to temporary delays resulting from some regulatory issues relating to the Fitel projects in Peru.

On a non-GAAP basis, the operating income was $8.9 million in the fourth quarter of 2015 as compared to the operating income of $7.5 million in the comparable quarter of 2014. The operating loss for 2015 on a non-GAAP basis was $4.2 million compared to the operating income of $13.1 million in 2014.

On a GAAP basis, the operating loss was $3.4 million in the fourth quarter of 2015 as compared to the operating income of $5.5 million in the comparable quarter of 2014. The operating loss for 2015 on a GAAP basis was $43.7 million compared to the operating income of $5 million in 2014.

On a non-GAAP basis, the net income for the quarter was $7 million or $0.16 per diluted share compared to the net income of $4.4 million or $0.1 per diluted share in the same quarter of 2014. The net loss for 2015 on a non-GAAP basis was $12.6 million or $0.29 per diluted share compared to the net income of $7.4 million or $0.17 per diluted share in 2014.

On a GAAP basis, the net loss for the quarter was $5.2 million or $0.12 per diluted share compared to the net income from continuing operations of $2.4 million or $0.06 per diluted share in the same quarter of 2014. The net loss from continuing operations for 2015 on a GAAP basis was $52.1 million or $1.19 per diluted share compared to the net loss from continuing operations of $0.7 million or $0.02 per diluted share in 2014.

EBITDA for the fourth quarter of 2015 reached $11.1 million compared with $10.4 million in the comparable period in 2014. EBITDA for the twelve months of 2015 was $5.3 million compared with $23.4 million in the comparable period in 2014.

Key Recent Announcements:

  • Avanti Deploys HTS VSAT Networks from Gilat for Broadband Connectivity Across the UK
  • Gilat Wins Bid of $108 Million for a New Project in Peru
  • Gilat Announces Phased-Array Antenna (PAA) Program Following the Signing of a Development Agreement with an Aerospace Systems Integrator
  • Synertone, a leading Chinese satellite solutions provider, selects Gilat to enable its fixed and mobile offerings throughout China in a $12 million deal
  • CRRC, the World’s Largest Railway Transportation Supplier, Selects Gilat to Bring Satellite Connectivity to all its Trains, Worldwide
  • Gilat Launches its Revolutionary Distributed X-Architecture to Address the Growing Demands of High-Throughput Satellites (HTS) in a Single Platform

Conference Call and Webcast Details:
Gilat management will host a conference call today at 14:30 GMT / 09:30 EST / 16:30 IST (Israel Standard Time) to discuss the results. International participants are invited to access the call on (972) 3-918-0644, and US-based participants are invited to access the call by dialing (888) 281-1167. A replay of the conference call will be available beginning at approximately 17:00 GMT/ 12:00 EST/ 19:00 IST today, until 17:00 GMT/ 12:00 EST/ 19:00 IST February 20, 2016. International participants are invited to access the replay on (972) 3-925-5900, and US-based participants are invited to access the replay by dialing (888) 326-9310. 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 Gilat
Gilat 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)
Year endedThree months ended
December 31,December 31,
2015 2014 2015 2014
UnauditedAuditedUnauditedUnaudited
Revenues 197,543 235,133 67,682 73,097
Cost of revenues 143,318 151,498 47,181 47,325
Impairment of long lived assets 10,137 - 10,137 -
Gross profit 44,088 83,635 10,364 25,772
Research and development expenses:
Expenses incurred 24,952 27,635 5,709 6,804
Less - grants 2,540 2,477 1,977 675
22,412 25,158 3,732 6,129
Selling and marketing expenses 24,823 32,537 6,098 7,257
General and administrative expenses 18,644 20,903 3,418 6,892
Restructuring costs 1,508 - 522 -
Goodwill impairment 20,402 - - -
Total operating expenses 87,789 78,598 13,770 20,278
Operating income (loss) (43,701) 5,037 (3,406) 5,494
Financial expenses, net (7,243) (3,837) (1,393) (1,939)
Income (loss) before taxes on income (50,944) 1,200 (4,799) 3,555
Taxes on income 1,190 1,901 450 1,118
Income (loss) from continuing operations (52,134) (701) (5,249) 2,437
Loss from discontinued operations (200) (795) - -
Net income (loss) (52,334) (1,496) (5,249) 2,437
Net income (loss) per share from continuing operations (basic and diluted) (1.19) (0.02) (0.12) 0.06
Loss per share from discontinued operations (basic and diluted) (0.00) (0.02) - -
Net Income (loss) per share (basic and diluted) (1.19) (0.04) (0.12) 0.06
Weighted average number of shares used in computing net income (loss) per share
Basic 43,655,309 42,444,482 44,311,825 42,664,812
Diluted 43,655,309 42,444,482 44,311,825 43,165,834


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
31 December 2015 31 December 2014
GAAP Adjustments (1) Non-GAAP GAAP Adjustments (1) Non-GAAP
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
Gross profit 10,364 11,387 21,751 25,772 1,251 27,023
Operating expenses 13,770 (896) 12,874 20,278 (741) 19,537
Operating income (loss) (3,406) 12,283 8,877 5,494 1,992 7,486
Income (loss) before taxes on income (4,799) 12,283 7,484 3,555 1,992 5,547
Net income (loss) (5,249) 12,283 7,034 2,437 1,992 4,429
Basic net income (loss) per share (0.12) 0.28 0.16 0.06 0.04 0.10
Diluted net income (loss) per share (0.12) 0.28 0.16 0.06 0.04 0.10
Weighted average number of shares used in computing net income (loss) per share
Basic 44,311,825 44,311,825 42,664,812 42,664,812
Diluted 44,311,825 44,567,776 43,165,834 43,640,235
(1) Adjustments reflect the effect of non-cash stock based compensation as per ASC 718, amortization of intangible assets related to Shares acquisition transactions, impairments, restructuring costs and net income (loss) from discontinued operations.
Three months ended Three months ended
31 December 2015 31 December 2014
Unaudited Unaudited
GAAP net income (loss) (5,249) 2,437
Gross profit:
Non-cash stock-based compensation expenses: 52 53
Amortization of intangible assets related to acquisition transactions 1,198 1,198
Impairment of long lived assets 10,137 -
11,387 1,251
Operating expenses:
Non-cash stock-based compensation expenses 184 529
Amortization of intangible assets related to acquisition transactions 190 212
Restructuring costs 522 -
896 741
Non GAAP net income (loss) 7,034 4,429
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 2015 31 December 2014
GAAP Adjustments (1) Non-GAAP GAAP Adjustments (1) Non-GAAP
Unaudited Unaudited Unaudited Audited Unaudited Unaudited
Gross profit 44,088 15,146 59,234 83,635 5,024 88,659
Operating expenses 87,789 (24,399) 63,390 78,598 (3,043) 75,555
Operating income (loss) (43,701) 39,545 (4,156) 5,037 8,067 13,104
Income (loss) before taxes on income (50,944) 39,545 (11,399) 1,200 8,067 9,267
Income (loss) from continuing operations (52,134) 39,545 (12,589) (701) 8,067 7,366
Loss from discontinued operations (200) 200 - (795) 795 -
Net income (loss) (52,334) 39,745 (12,589) (1,496) 8,862 7,366
Basic loss per share from continuing operations (1.19) (0.02)
Basic loss per share from discontinued operations (0.00) (0.02)
Basic net income (loss) per share (1.19) 0.90 (0.29) (0.04) 0.21 0.17
Diluted loss per share from continuing operations (1.19) (0.02)
Diluted loss per share from discontinued operations (0.00) (0.02)
Diluted net income (loss) per share (1.19) 0.90 (0.29) (0.04) 0.21 0.17
Weighted average number of shares used in computing net income (loss) per share
Basic 43,655,309 43,655,309 42,444,482 42,444,482
Diluted 43,655,309 43,655,309 42,444,482 43,621,979
(1) Adjustments reflect the effect of non-cash stock based compensation as per ASC 718, amortization of intangible assets related to Shares acquisition transactions, impairments, restructuring costs and net income (loss) from discontinued operations.
Year ended Year ended
31 December 2015 31 December 2014
Unaudited Unaudited
GAAP net income (loss) (52,334) (1,496)
Gross profit:
Non-cash stock-based compensation expenses: 217 232
Amortization of intangible assets related to acquisition transactions 4,792 4,792
Impairment of long lived assets 10,137 -
15,146 5,024
Operating expenses:
Non-cash stock-based compensation expenses 1,684 2,193
Amortization of intangible assets related to acquisition transactions 805 850
Goodwill impairment 20,402 -
Restructuring costs 1,508 -
24,399 3,043
Loss from discontinued operations 200 795
Non GAAP net income (loss) (12,589) 7,366


GILAT SATELLITE NETWORKS LTD.
CONDENSED EBITDA
US dollars in thousands
Year ended Three months ended
December 31,
December 31,
2015 2014 2015 2014
UnauditedUnaudited UnauditedUnaudited
Operating income (loss) (43,701) 5,037 (3,406) 5,494
Add:
Non-cash stock-based compensation expenses 1,901 2,425 236 582
Restructuring costs 1,508 - 522 -
Impairment of goodwill and long lived assets 30,539 - 10,137 -
Depreciation and amortization 15,072 15,951 3,613 4,325
EBITDA 5,319 23,413 11,102 10,401


GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
US dollars in thousands
December 31, December 31,
2015 2014
Unaudited Audited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 18,435 27,726
Restricted cash 100,779 25,983
Restricted cash held by trustees 8,524 15,441
Trade receivables, net 50,984 57,728
Inventories 25,358 25,112
Other current assets 16,223 14,760
Total current assets 220,303 166,750
LONG-TERM INVESTMENTS AND RECEIVABLES:
Long-term restricted cash 179 216
Severance pay funds 7,545 8,085
Other long term receivables and deferred charges 221 12,124
Total long-term investments and receivables 7,945 20,425
PROPERTY AND EQUIPMENT, NET 81,963 90,893
INTANGIBLE ASSETS, NET 17,154 22,970
GOODWILL 43,468 63,870
TOTAL ASSETS 370,833 364,908
December 31, December 31,
2015 2014
Unaudited Audited
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term bank credit and loans 7,000 15,857
Current maturities of long-term loans 4,542 4,595
Trade payables 17,210 22,850
Accrued expenses 23,481 22,475
Advances from customers 82,813 2,940
Advances from customers, held by trustees 8,515 12,858
Other current liabilities 16,213 18,587
Total current liabilities 159,774 100,162
LONG-TERM LIABILITIES:
Accrued severance pay 7,506 8,157
Long-term loans, net of current maturities 21,493 26,271
Other long-term liabilities 3,978 5,179
Total long-term liabilities 32,977 39,607
EQUITY:
Share capital - ordinary shares of NIS 0.2 par value 2,048 1,966
Additional paid-in capital 884,126 876,624
Accumulated other comprehensive loss (3,727) (1,420)
Accumulated deficit (704,365) (652,031)
Total equity 178,082 225,139
TOTAL LIABILITIES AND EQUITY 370,833 364,908


GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
US dollars in thousands
Year ended Three months ended
December 31,
December 31,
2015 2014 2015 2014
UnauditedAudited UnauditedUnaudited
Cash flows from operating activities:
Net income (loss) (52,334) (1,496) (5,249) 2,437
Loss from discontinued operations 200 795 - -
Net income (loss) from continuing operations (52,134) (701) (5,249) 2,437
Adjustments required to reconcile net income (loss) to net cash generated provided by (used in) operating activities:
Depreciation and amortization 15,072 15,951 3,613 4,325
Goodwill impairment 20,402 - - -
Impairment of long lived assets 10,137 - 10,137 -
Stock-based compensation 1,901 2,425 236 582
Accrued severance pay, net (111) 301 163 259
Accrued interest and exchange rate differences on short and long-term restricted cash, net 842 858 635 394
Exchange rate differences on long-term loans (288) (416) (67) (105)
Capital loss (gain) from disposal of property and equipment 82 430 (39) 189
Deferred income taxes, net 1 7 (10) 63
Decrease (increase) in trade receivables, net 4,553 (2,457) (12,177) (3,995)
Decrease (increase) in other assets (including short-term, long-term and deferred charges) 998 (20,251) 136 (8,520)
Decrease (increase) in inventories (2,821) (445) 2,090 781
Increase in restricted cash directly related to operating activities, net (87,004) - (34,268) -
Increase (decrease) in trade payables (5,133) 2,226 2,514 6,930
Increase in accrued expenses 2,935 5,401 3,444 3,910
Increase (decrease) in advance from customers 79,884 (25,935) 24,268 (13,511)
Increase (decrease) in advances from customers, held by trustees (2,243) 14,068 6,168 14,133
Decrease in other current liabilities and other long term liabilities (1,860) (7,624) (1,454) (447)
Net cash provided by (used in) operating activities (14,787) (16,162) 140 7,425
GILAT SATELLITE NETWORKS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
US dollars in thousands
Year ended Three months ended
December 31,
December 31,
2015 2014 2015 2014
UnauditedAudited UnauditedUnaudited
Cash flows from investing activities:
Purchase of property and equipment (3,930) (12,630) (821) (435)
Investment in restricted cash held by trustees (16,634) (24,869) (10,525) (18,955)
Proceeds from restricted cash held by trustees 21,501 12,306 2,852 3,681
Investment in restricted cash (including long-term) (22,717) (12,788) (306) (2,207)
Proceeds from restricted cash (including long-term) 34,120 11,228 1,561 10,996
Net cash provided by (used in) investing activities 12,340 (26,753) (7,239) (6,920)
Cash flows from financing activities:
Capital lease payments (609) (234) (201) (148)
Issuance of restricted stock units and exercise of stock options 5,683 1,185 88 437
Payment of obligation related to the purchase of intangible assets (500) (500) - -
Short term bank credit, net (5,897) 16,571 (2,086) 2,394
Repayment of long-term loans (4,544) (4,633) (135) (149)
Net cash provided by (used in) financing activities (5,867) 12,389 (2,334) 2,534
Effect of exchange rate changes on cash and cash equivalents (977) (172) 145 49
Increase (decrease) in cash and cash equivalents (9,291) (30,698) (9,288) 3,088
Cash and cash equivalents at the beginning of the period 27,726 58,424 27,723 24,638
Cash and cash equivalents at the end of the period 18,435 27,726 18,435 27,726


Contact: Gilat Satellite Networks Joelle Inowlocki JoelleI@gilat.com KCSA Strategic Communications Phil Carlson, Vice President (212) 896-1233 pcarlson@kcsa.com

Source:Gilat Satellite Networks Ltd.