Gilat Satellite Networks Ltd. · NASDAQ:GILT
Gilat Satellite Networks — Q3 2020 Earnings Presentation
32 slides from Gilat Satellite Networks's earnings presentation, Jun 3, 2020
Slide 1: Investor Presentation Q3 Fiscal Year 2020
Investor Presentation Q1 Fiscal Year 20 20 This presentation reflects information as of December 4, 2019 Fix Building Graphic Investor Presentation Q 3 Fiscal Year 20 20 This presentation reflects information as of June 3, 2020
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward - Looking Statements Text 3 Certain information in this presentation contains forward - looking statements, including, but not limited to, information relating to Comtech’s and Gilat’s future performance and financial condition, plans and objectives of Comtech’
Slide 3: Use of Non-GAAP Financial Measures
Use of Non - GAAP Financial Measures Text 3 In order to provide investors with additional information regarding the Company’s and Gilat’s financial results, this presentation contains "Non - GAAP financial measures" under the rules of the SEC . The Company’s and Gilat’s Adjusted EBITDA is a Non - GA
Slide 4: Comtech – Impact of COVID-19
Text Comtech – Impact of COVID - 19 Our third quarter of fiscal 2020 corresponded precisely with the period in which worldwide restrictions on business activities were in force due to the COVID - 19 pandemic. In response to lower sales and delayed orders, we implemented a variety of cost saving
Slide 5: Legacy of Complex Problem Solving
Text Legacy of Complex Problem Solving Innovative Solutions for Commercial and Government Customers Thought Leader in Secure Wireless Communications Comtech - Connections that Matter® Notes See Appendix II of this presentation for the reconciliation from US GAAP to Adjusted EBITDA, which is a Non -
Slide 6: Overview of Q3 FY20 Performance
30.7% 45.0% 24.3% Domestic International U.S. Government Sales by Customer Type Overview of Q3 FY20 Performance Q3 FY 2020 Revenue was $135.1 million GAAP Operating Loss of ($3.1) million includes amortization of $5.5 million, depreciation of $2.7 million, stock - based compensation of $1.0 mill
Slide 7: Comtech Has Transformed Itself into a Wireless Leader
7 Fiscal 2019 $671.8M revenue $93.5M Adjusted EBITDA ~$1B of visibility with backlog and contracts 400+ engineering professionals Global market leader for satellite ground station equipment 50% market share of wireless 911 calls Leader in mission - critical and high - performance transmission techno
Slide 8: Historical Revenue and Adjusted EBITDA Trends
8 $ 48.1M $ 70.7M $ 78.4M $ 93.5M ~ $99.0M 2016A 2017A 2018A 2019A 2020A $ 411.0M $ 550.4M $ 570.6M $ 671.8M > $700.0M 2016A 2017A 2018A 2019A 2020A Historical Revenue and Adjusted EBITDA Trends Heights TM products, Next Generation 911 systems and important contract awards create strong revenue st
Slide 9: Comtech Participates in Growing Markets
9 Comtech Participates in Growing Markets High speed in - flight connectivity is fast becoming a necessity for travelers and an imperative for airlines Increased threats of electronic warfare and demand for high - bandwidth battlefield communications Ultimate transition to 5G will increase data usag
Slide 10: Comtech's Two Segments Have Common Capabilities
10 Comtech’s Two Segments Have Common Capabilities Text We leverage several key competencies, including R&D and engineering, across both segments to deliver superior capabilities to customers Secure Wireless Technology Communications Commercial Solutions Revenue $357.3M 53.2% of Total Adjusted EBITD
Slide 11: Proven Track Record of Acquisitions
11 x Entry into the 911 public safety and location markets and significantly strengthened our U.S. Government business, created scale and diversified earnings x Further expanded presence in growing 911 public safety market and increased recurring revenues x Helped secure a five - year $100.0M contra
Slide 12: Status of UHP and Gilat Acquisitions
12 x In May 2020, we agreed to amend the terms of the agreement, which we originally announced in November 2019. x The aggregate purchase price was reduced by 24% from $50 million to $38 million. x Cash consideration will be $5 million, with the remainder of the consideration to be paid in shares of
Slide 13: Commercial Solutions Segment – Growth Drivers
13 Satellite Ground Station Technologies Public Safety and Location Technologies Notes (1) Northern Sky Research, Wireless Backhaul & 5G via Satellite, 13 th Ed., April 2019. Market size for 2018. (2) Frost & Sullivan, Next Generation 911 (NG911) Market Insight, 2017. Market size forecast by year 20
Slide 14: Government Solutions Segment – Growth Drivers
14 Mission - Critical Technologies High - Performance Transmission Technologies Amplifiers for Identification, Friend or Foe and Electronic Warfare Applications Satellite Ground Station Products and Space Components Notes (1) Research and Markets, The Global C4ISR Market 2018 - 2026 - Market Size an
Slide 15: Financials
15 Financials
Slide 16: We Have Visibility into ~$1.0 Billion of Future Revenue
16 We Have Visibility into ~ $1.0 Billion of Future Revenue Commercial Solutions Government Solutions $456.5M $604.5M $184.2M $521.2M $148.0M $337.0M Backlog Contracts in Place, Not in Backlog Revenue Visibility $640.7 $1,125.7M $485.0M As of April 30, 2020 As of April 30, 2020 (1) Notes (1) Example
Slide 17: The Future is Bright for Many Years to Come
17 Strong Visibility with Growing Markets History of Long - Term Capital Return to Stockholders Commitment to Innovation and Engineering Experienced Management Team Market Leadership Positions We Believe the Future is Bright for Many Years to Come
Slide 18: Appendix I Historical Data and Trends
18 Appendix I Historical Data and Trends
Slide 19: Recent Quarterly Operating Results
Recent Quarterly Operating Results Text Q3 Q4 Q1 Q2 Q3 2019 2019 2020 2020 2020 Revenue Commercial Solutions 89,600$ 102,985$ 94,314$ 96,122$ 78,311$ Government Solutions 80,848 73,387 75,953 65,532 56,810 Total Revenue 170,448$ 176,372$ 170,267$ 161,654$ 135,121$ Net Income (Loss) 7,612$ 6,135$ 6,3
Slide 20: Recent Annual Operating Results
Recent Annual Operating Results Text 2016 2017 2018 2019 Revenue Commercial Solutions 248,955$ 330,867$ 345,076$ 357,293$ Government Solutions 162,049 219,501 225,513 314,504 Total Revenue 411,004$ 550,368$ 570,589$ 671,797$ Net Income (Loss) (7,738)$ 15,827$ 29,769$ 25,041$ Adjusted EBITDA 48,062$
Slide 21: Historical Revenue Results by Segment
2016 2017 2018 2019 YTD 2020 $162,049 $219,501 $225,513 $314,504 $198,295 Government Solutions Historical Revenue Results Text Note (1) Comtech’s fiscal year end is July 31 . 2016 2017 2018 2019 YTD 2020 $248,955 $330,867 $345,076 $357,293 $268,747 Commercial Solutions $ in 000s $ in 000s 21 2016 20
Slide 22: Our Customer Base
Our Customer Base Text Notes (1) Comtech’s fiscal year end is July 31. (2) Totals may not foot due to rounding . 2016 2017 2018 2019 YTD 2020 41% 33% 36% 40% 38% 29% 39% 39% 35% 39% 30% 28% 26% 25% 23% U.S. Government Domestic International 22
Slide 23: Historical Bookings & Backlog
Historical Bookings & Backlog Text Note (1) Comtech’s fiscal year end is July 31 . $ in 000s $ in 000s Bookings Total Backlog 23 2016 2017 2018 2019 YTD 2020 $451,278 $512,593 $755,054 $724,056 $424,789 2016 2017 2018 2019 YTD 2020 $484,005 $446,230 $630,695 $682,954 $640,702
Slide 24: Total Research and Development Expense
Total Research and Development Expense Text $ in 000s Notes (1) Research and development expense includes company - funded and customer - funded. (2) Comtech’s fiscal year end is July 31. 2016 2017 2018 2019 YTD 2020 $59,622 $81,310 $70,793 $71,086 $49,160 $ in 000s Research and Development Expense
Slide 25: Recent Balance Sheet Trends
Recent Balance Sheet Trends Text Balance Sheet Notes (1) As defined in our Credit Facility, as amended. (2) Comtech’s fiscal year end is July 31. $ in 000s Apr. 30, Jul. 31, Oct. 31, Jan. 31, Apr. 30, 2019 2019 2019 2020 2020 Cash and Cash Equivalents 45,152$ 45,576$ 46,873$ 46,471$ 50,634$ Working
Slide 26: Market Data
Market Data Text General Market Information Nasdaq Symbol: CMTL Institutional Holders (2) : 227 52 - Week Range (1) : $11.70 - $37.79 Analyst Coverage: 6 Source: Nasdaq Analysts Notes (1) 52 - week range indicates the high and low closing prices during the period of May 1, 2019 through April 30, 202
Slide 27: Appendix II Reconciliation of GAAP to Non-GAAP Financial Measures
27 Appendix II Reconciliation of GAAP to Non - GAAP Financial Measures
Slide 28: Reconciliation of CMTL GAAP to Non-GAAP Financial Measures
Reconciliation of CMTL GAAP to Non - GAAP Financial Measures Text Adjusted EBITDA Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Reported net income (loss) 7,612$ 6,135$ 6,388$ 3,495$ (3,989)$ Income tax expense (benefit) 1,547 2,078 1,145 1,117 (759) Net interest expense & other 2,137 2,192 1,727 1,622 1,
Slide 29: Reconciliation of CMTL GAAP to Non-GAAP Financial Measures (cont'd)
Reconciliation of CMTL GAAP to Non - GAAP Financial Measures (cont’d) Text Adjusted EBITDA 2016 2017 2018 2019 YTD 2020 Reported net (loss) income (7,738)$ 15,827$ 29,769$ 25,041$ 5,894$ Income tax (benefit) expense (454) 9,654 (5,143) 3,869 1,503 Write-off of deferred financing costs - - - 3,217 -
Slide 30: Reconciliation of CMTL GAAP to Non-GAAP Financial Measures (cont'd)
Reconciliation of CMTL GAAP to Non - GAAP Financial Measures (cont’d) Text Earnings (Loss) per Diluted Share Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY19 Q1 2020 Q2 2020 Q3 2020 YTD FY20 GAAP earnings (loss) per diluted share 0.14$ 0.32$ 0.31$ 0.25$ 1.03$ 0.26$ 0.14$ (0.16)$ 0.24$ Acquisition plan expenses
Slide 31: Additional Information and Where to Find It
Additional Information and Where to Find It Text This presentation contains information in respect of a proposed business combination involving Comtech and Gilat . This document does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities or a solicitat
Slide 32: Additional Information and Where to Find It
In addition, will be able to obtain a free copy of the proxy statement/prospectus (when they become available) and other documents filed with the SEC by Comtech on Comtech’s Investor Relations page on Comtech’s web site at or by writing to Comtech, Investor Relations, (for documents filed with the S
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