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Gilat Reports Continued Profitability Growth in Q2 2019

August 6, 2019

Gilat Satellite Networks Ltd. today reported its results for the second quarter ended June 30, 2019.

Key Financial Highlights:

Revenues for Q2 2019 totaled $59.7 million compared with $66.5 million for Q2 2018.

Continued strong profitability:

Q2 2019 GAAP operating income increased 17.9% to $4.9 million from $4.1 million in Q2 2018. Q2 2019 Non-GAAP operating income rose to $6.3 million, or by 10.8% from Q2 2018.

Q2 2019 GAAP net income increased 58.3% to $3.4 million, or $0.06 per diluted share, compared with $2.2 million, or $0.04 per diluted share in Q2 2018.  Q2 2019 non-GAAP net income increased 30.7% to $4.8 million, or $0.09 per diluted share, compared with $3.7 million, or $0.07 per diluted share, in Q2 2018.

Q2 2019 Adjusted EBITDA increased 10.0% year over year to $8.9 million, or 14.9% of revenues.

Reiterated management objectives for 2019: revenue range between $275 million to $295 million, GAAP operating income of between $23 million and $27 million, and Adjusted EBITDA between $38 million and $42 million.

 

Yona Ovadia, CEO of Gilat, commented:

“I am pleased to report that aside from Gilat’s continued positive results and solid profitability in the second quarter, this has been a strong quarter as we executed our strategy to build high quality revenues through our growth engines of Broadband, Mobile Cellular Backhaul and Mobility IFC.

“We achieved two major milestones in the quarter that will be important drivers of our future growth.

“The first is in the area of Inflight Connectivity.  We have now entered into the Business Aviation market with a multi-million-dollar award from an Aviation Service Provider for our tail-mount antenna.  This milestone not only complements our leading IFC position in Commercial Aviation, it also expands our IFC product portfolio with an airborne tail-mount antenna in addition to our leading airborne modem.

“Second, we have reached a critical milestone in Peru with approval to enter the operational phase of the three-region telecom project awarded in 2015 by Fitel.  Entering this phase enables Gilat to unlock access to revenue of approximately $12 million per annum of operations fees, for a period of ten years, as well as to start selling services over the network which yield higher margins.  In fact, we already have efforts underway to sell network services over the infrastructure we have built and recently started to operate. We expect to report progress with these efforts in the coming weeks and months.

“In addition, we were awarded a three-year multi-million-dollar broadband expansion project further to our managed services cellular backhaul project with Globe Telecom, the leading telco in the Philippines. This expansion demonstrates once again our conviction that the declining price of satellite capacity along with strong ground segment equipment, provides Telcos worldwide an additional legitimate cost-effective tool for quality broadband to their customers.”

Mr. Ovadia concluded: “Overall, Gilat achieved important milestones in the second quarter, particularly in our Peru projects and our IFC business, while attaining solid profitability.  We plan to press forward with these and our other growth engines for the remainder of 2019, and to focus on further improving profitability.”