Revenue of $60.4 million, up 21% year-over-year, GAAP operating income of $3.4 million versus $0.8 million in Q3 last year, and adjusted EBITDA of $7.3 million, up 88% year-over-year

PETAH TIKVA, Israel, Nov. 14, 2022 (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 third quarter ended September 30, 2022.

Third Quarter 2022 Financial Highlights

Revenues of $60.4 million,up 21% compared with $49.8 million in Q3 last year;
GAAP operating income of $3.4 million versus $0.8 million in Q3 last year;
Non-GAAP operating income of $4.4 million versus $1.3 million in Q3 last year;
GAAP net income of $2.1 million versus breakeven in Q3 last year;
Non-GAAP net income of $3 million versus $0.6 million in Q3 last year;
Adjusted EBITDA of $7.3 million versus $3.9 million in Q3 last year;

Forward-Looking Expectations

The Company adjusted and narrowed the range of its 2022 revenue guidance, with expectations of between $240 million and $245 million, representing year-over-year growth of approximately 13%.

The Company also increased and narrowed the GAAP operating income guidance range to between $8 million to $10 million representing significant year-over-year growth versus $2.2 million in 2021.

The Company increased and narrowed the adjusted EBITDA range to between $23 to $25 million, representing year-over-year growth of approximately 56%.

Management Commentary

Adi Sfadia, Gilat's CEO, commented: "We are very pleased with our strong third quarter results showing continued year-over-year growth and a recovery in all our markets, in particular IFC. We are also very encouraged with the solid and continued improvement in our profitability demonstrating substantial improvement in our gross, operating and net margins with adjusted EBITDA growing by 88% year-over-year.

Strategically we are very excited with the progress of our newly launched, world leading, SkyEdge IV platform. During the third quarter, a leading service provider selected SkyEdge IV, Gilat's high-performance, multi-orbit platform, to power maritime connectivity. We are confident that this platform will allow us to focus and gain market share in the growing multibillion-dollar market of the next era of satellite communication.

The mobility business continued to pick up, with recent IFC orders of over $12 million. We further solidified our leadership in the cellular backhaul market this quarter, with multimillion-dollar orders from both new customers and mobile operators trusting Gilat's technology to extend their networks even further. In addition, we received multimillion-dollar orders in the Defense segment, where we see significant potential and have increased our focus, as well as in the Enterprise sector for utility and banking applications."

Mr. Sfadia concluded, "Our pipeline continues to increase and broaden, and the release of our next generation platform and growth engine – the SkyEdge IV for VHTS & NGSO satellites – is gaining strong traction among new and existing customers. As such, we are increasingly optimistic and expect to maintain our strong momentum ahead. For 2022 as a whole, we are tracking ahead of our profitability targets, and we look forward to continuing the growth trend into 2023."

Key Recent Announcements

World-Leading UAV Manufacturer Selects Gilat in Multi-Year, Multimillion-Dollar Strategic Agreement for UAV Terminals
Telefónica Global Solutions Selects Gilat to Extend 4G Cellular Coverage for Mobile Operators in Latin America
Antamina Selects Gilat for Multimillion-Dollar E-Learning Project
Gilat Awarded Over $10M to Power IFC Applications of Tier-1 Global Aerospace System Integrator
Gilat Selected by Sencinet for Petrobras' Oil and Gas Industry Satellite Connectivity Project
SES and Gilat Extend Global Strategic Cooperation with Orders for GEO VHTS and O3b mPOWER NGSO Constellation

Conference Call Details

Gilat's management will discuss its third quarter 2022 results and business achievements and participate in a question and answer session:

Date: Monday, November 14, 2022

Start: 09:30 AM EST / 16:30 IST

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/gilatq3-2022

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 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. Non-GAAP financial measures mainly exclude the effect of stock-based compensation, amortization of purchased intangibles, lease incentive amortization, litigation expenses, income related to trade secrets claims, restructuring and reorganization costs, merger, acquisition and related litigation expense (income), impairment of held for sale asset, other expenses, income tax effect on adjustments and one-time changes of deferred tax assets.

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 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.

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 over 30 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

Ehud Helft

EK Global Investor Relations

ehud@ekgir.com

+1 212 378 8040

GILAT SATELLITE NETWORKS LTD.
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
U.S. dollars in thousands (except share and per share data)
		Nine months ended						Three months ended
		September 30,						September 30,
			2022			2021			2022			2021
					As Restated (1)						As Restated (1)
		Unaudited						Unaudited

Revenues		$	167,213		$	147,947		$	60,350		$	49,778
Cost of revenues			108,021			101,376			37,315			32,306

Gross profit			59,192			46,571			23,035			17,472

Research and development expenses, net			25,542			22,884			9,156			7,224
Selling and marketing expenses			15,724			15,827			5,414			5,359
General and administrative expenses			13,325			11,042			4,770			4,104
Impairment of held for sale asset			718			-			279			-

Total operating expenses			55,309			49,753			19,619			16,687

Operating income (loss)			3,883			(3,182	)		3,416			785

Financial expenses, net			(2,716	)		(1,458	)		(1,053	)		(701	)

Income (loss) before taxes on income			1,167			(4,640	)		2,363			84

Taxes on income			1,075			523			243			49

Net income (loss)		$	92		$	(5,163	)	$	2,120		$	35

Earnings (loss) per share (basic and diluted)		$	0.00		$	(0.09	)	$	0.04		$	0.00

Weighted average number of shares used in computing earning (loss) per share
	Basic		56,585,858			56,355,020			56,608,981			56,525,177
	Diluted		56,604,854			56,355,020			56,626,283			56,958,250

(1) The Company restated its previously issued condensed interim consolidated financial statements for the three and nine months ended September 30, 2021.
For additional information, see Note 2 and Note 17 to the audited consolidated financial statements included in Part III, Item 18 of our 2021 Form 20-F/A filed with the U.S. Securities and Exchange Commission on September 14, 2022.

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)
	Three months ended							Three months ended
	September 30, 2022							September 30, 2021
	GAAP		*Adjustments ()**			Non-GAAP		GAAP		*Adjustments ()**			Non-GAAP
								As Restated (1)					As Restated (1)
	Unaudited							Unaudited

Gross profit	$	23,035		74		$	23,109	$	17,472		96		$	17,568
Operating expenses		19,619		(879	)		18,740		16,687		(448	)		16,239
Operating income		3,416		953			4,369		785		544			1,329
Income before taxes on income		2,363		953			3,316		84		544			628
Net income	$	2,120		911		$	3,031	$	35		544		$	579

Earning per share (basic and diluted)	$	0.04	$	0.02		$	0.06	$	0.00	$	0.01		$	0.01


Weighted average number of shares used in computing earning per share
Basic		56,608,981					56,608,981		56,525,177					56,525,177
Diluted		56,626,283					56,652,855		56,958,250					57,227,810


(*) 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, other expenses and income tax effect on adjustments which is calculated using the blended effective tax rate on the adjustments, based on the statutory tax rates applicable to the adjustments.


			Three months ended							Three months ended
			September 30, 2022							September 30, 2021
										As Restated (1)
			Unaudited							Unaudited

GAAP net income			$	2,120						$	35

Gross profit
Non-cash stock-based compensation expenses				74							91
Amortization of intangible assets related to acquisition transactions				-							5
				74							96
Operating expenses
Non-cash stock-based compensation expenses				498							398
Amortization of intangible assets related to acquisition transactions				51							50
Impairment of held for sale asset				279							-
Other				51							-
				879							448

Income tax effect on adjustments				(42	)						-

Non-GAAP net income			$	3,031						$	579

(1) The Company restated its previously issued condensed interim consolidated financial statements for the three and nine months ended September 30, 2021.
For additional information, see Note 2 and Note 17 to the audited consolidated financial statements included in Part III, Item 18 of our 2021 Form 20-F/A filed with the U.S. Securities and Exchange Commission on September 14, 2022.

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)
	Nine months ended							Nine months ended
	September 30, 2022							September 30, 2021
	GAAP		*Adjustments ()**			Non-GAAP		GAAP			*Adjustments ()**			Non-GAAP
								As Restated (1)						As Restated (1)
	Unaudited							Unaudited

Gross profit	$	59,192		230		$	59,422	$	46,571			226		$	46,797
Operating expenses		55,309		(2,394	)		52,915		49,753			(735	)		49,018
Operating income (loss)		3,883		2,624			6,507		(3,182	)		961			(2,221	)
Income (loss) before taxes on income		1,167		2,624			3,791		(4,640	)		961			(3,679	)
Net income (loss)		92		2,582			2,674		(5,163	)		961			(4,202	)

Earning (loss) per share (basic and diluted)	$	0.00	$	0.05		$	0.05	$	(0.09	)	$	0.02		$	(0.07	)


Weighted average number of shares used in computing earning (loss) per share
Basic		56,585,858					56,585,858		56,355,020						56,355,020
Diluted		56,604,854					56,659,298		56,355,020						56,355,020


(*) 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, other expenses and income tax effect on adjustments which is calculated using the blended effective tax rate on the adjustments, based on the statutory tax rates applicable to the adjustments.


			Nine months ended								Nine months ended
			September 30, 2022								September 30, 2021
											As Restated (1)
			Unaudited								Unaudited

GAAP net income (loss)			$	92							$	(5,163	)

Gross profit
Non-cash stock-based compensation expenses				220								211
Amortization of intangible assets related to acquisition transactions				10								15
				230								226
Operating expenses
Non-cash stock-based compensation expenses				1,413								584
Amortization of intangible assets related to acquisition transactions				152								151
Impairment of held for sale asset				718								-
Other				111								-
				2,394								735

Income tax effect on adjustments				(42	)							-

Non-GAAP net income (loss)			$	2,674							$	(4,202	)

(1) The Company restated its previously issued condensed interim consolidated financial statements for the three and nine months ended September 30, 2021.
For additional information, see Note 2 and Note 17 to the audited consolidated financial statements included in Part III, Item 18 of our 2021 Form 20-F/A filed with the U.S. Securities and Exchange Commission on September 14, 2022.

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

ADJUSTED EBITDA:

	Nine months ended					Three months ended
	September 30,					September 30,
		2022		2021			2022		2021
			As Restated (1)					As Restated (1)
	Unaudited					Unaudited

GAAP net income (loss)	$	92	$	(5,163	)	$	2,120	$	35
Adjustments:
Financial expenses, net		2,716		1,458			1,053		701
Taxes on income		1,075		523			243		49
Non-cash stock-based compensation expenses		1,633		795			572		489
Impairment of held for sale asset		718		-			279		-
Other		111		-			51		-
Depreciation and amortization (*)		8,770		7,365			2,978		2,608

Adjusted EBITDA	$	15,115	$	4,978		$	7,296	$	3,882

(*) Including amortization of lease incentive

SEGMENT REVENUES:

	Nine months ended					Three months ended
	September 30,					September 30,
		2022		2021			2022		2021
			As Restated (1)					As Restated (1)
	Unaudited					Unaudited

Satellite Networks	$	83,993	$	83,157		$	32,366	$	23,182
Integrated Solutions		45,047		33,540			15,650		14,704
Network Infrastructure and Services		38,173		31,250			12,334		11,892

Total revenues	$	167,213	$	147,947		$	60,350	$	49,778

(1) The Company restated its previously issued condensed interim consolidated financial statements for the three and nine months ended September 30, 2021.
For additional information, see Note 2 and Note 17 to the audited consolidated financial statements included in Part III, Item 18 of our 2021 Form 20-F/A filed with the U.S. Securities and Exchange Commission on September 14, 2022.


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

	September 30,			December 31,
		2022			2021
	Unaudited			Audited

ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	68,439		$	81,859
Short-term deposits		-			2,159
Restricted cash		1,425			2,592
Trade receivables, net		51,677			39,161
Contract assets		29,688			26,008
Inventories		33,925			28,432
Other current assets		24,808			14,607
Held for sale asset		3,997			4,587

Total current assets		213,959			199,405

LONG-TERM ASSETS:
Restricted cash		12			12
Long- term contract assets		11,149			12,539
Severance pay funds		5,884			6,795
Deferred taxes		15,816			17,551
Operating lease right-of-use assets		3,857			4,478
Other long term assets		10,654			10,456

Total long-term assets		47,372			51,831

PROPERTY AND EQUIPMENT, NET		73,312			72,391

INTANGIBLE ASSETS, NET		364			640

GOODWILL		43,468			43,468

TOTAL ASSETS	$	378,475		$	367,735

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

	September 30,			December 31,
		2022			2021
	Unaudited			Audited

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Trade payables	$	24,880		$	19,776
Accrued expenses		46,207			49,202
Advances from customers and deferred revenues		31,192			24,373
Operating lease liabilities		1,813			1,818
Other current liabilities		15,430			13,339

Total current liabilities		119,522			108,508

LONG-TERM LIABILITIES:
Accrued severance pay		6,473			7,292
Long-term advances from customers		1,838			1,209
Operating lease liabilities		1,945			2,283
Other long-term liabilities		127			120

Total long-term liabilities		10,383			10,904

SHAREHOLDERS' EQUITY:
Share capital - ordinary shares of NIS 0.2 par value		2,711			2,706
Additional paid-in capital		931,500			929,871
Accumulated other comprehensive loss		(7,836	)		(6,357	)
Accumulated deficit		(677,805	)		(677,897	)

Total shareholders' equity		248,570			248,323

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	378,475		$	367,735

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

	Nine months ended						Three months ended
	September 30,						September 30,
		2022			2021			2022			2021
				As Restated (1)						As Restated (1)
	Unaudited						Unaudited
Cash flows from operating activities:
Net income (loss)	$	92		$	(5,163	)	$	2,120		$	35
Adjustments required to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Depreciation and amortization		8,604			7,202			2,921			2,556
Impairment of held for sale asset		718			-			279			-
Stock-based compensation of options		1,633			795			572			489
Accrued severance pay, net		92			(177	)		(22	)		(49	)
Deferred taxes, net		1,823			(47	)		159			(232	)
Decrease (increase) in trade receivables, net		(12,270	)		(2,490	)		(387	)		4,867
Decrease (increase) in contract assets		(2,290	)		21,334			318			(313	)
Increase in other assets (including short-term, long-term
and deferred charges)		(8,652	)		(5,485	)		(889	)		(1,476	)
Increase in inventories		(6,030	)		(347	)		(1,955	)		(2,121	)
Increase (decrease) in trade payables		4,315			(2,719	)		110			(1,929	)
Decrease in accrued expenses		(1,767	)		(2,344	)		(77	)		(542	)
Increase in advance from customers and deferred revenue		7,397			4,473			387			4,811
Increase (decrease) in other liabilities		365			(1,301	)		1,175			(1,107	)
Net cash provided by (used in) operating activities		(5,970	)		13,731			4,711			4,989

Cash flows from investing activities:
Purchase of property and equipment		(9,225	)		(5,024	)		(4,710	)		(1,452	)
Repayment of short term deposits		2,159			-			-			2,159
Investment in financial instrument		(1,536	)		-			(1,536	)		-
Net cash provided by (used in) investing activities		(8,602	)		(5,024	)		(6,246	)		707

Cash flows from financing activities:
Dividend payment		-			(35,003	)		-			-
Repayment of long-term loan		-			(4,000	)		-			-
Net cash used in financing activities		-			(39,003	)		-			-

Effect of exchange rate changes on cash, cash equivalents and restricted cash		(15	)		(252	)		(47	)		(91	)

Increase (decrease) in cash, cash equivalents and restricted cash		(14,587	)		(30,548	)		(1,582	)		5,605

Cash, cash equivalents and restricted cash at the beginning of the period		84,463			115,958			71,458			79,805

Cash, cash equivalents and restricted cash at the end of the period	$	69,876		$	85,410		$	69,876		$	85,410

(1) The Company restated its previously issued condensed interim consolidated financial statements for the three and nine months ended September 30, 2021.
For additional information, see Note 2 and Note 17 to the audited consolidated financial statements included in Part III, Item 18 of our 2021 Form 20-F/A filed with the U.S. Securities and Exchange Commission on September 14, 2022.

Gilat Presents Strong Growth and Results for Third Quarter 2022