Gilat Satellite Networks Ltd. · NASDAQ:GILT
Gilat Satellite Networks — Merger or Acquisition (February 2020)
39 slides from Gilat Satellite Networks's merger presentation, Feb 18, 2020
Slide 1: Investor Presentation Q1 Fiscal Year 2020
Investor Presentation Q1 Fiscal Year 20 20 This presentation reflects information as of December 4, 2019 Fix Building Graphic Noblecon16 Investor Presentation This presentation reflects quarterly financial information announced December 4, 2019, and other Company events through January 29, 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: 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 III of this presentation for the reconciliation from US GAAP to Adjusted EBITDA, which is a Non -
Slide 5: Comtech Has Transformed Itself into a Wireless Leader
5 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 6: Fiscal 2020 is Expected to be Another Year of Growth
6 $ 48.1M $ 70.7M $ 78.4M $ 93.5M ~ $101.0M 2016A 2017A 2018A 2019A 2020E $ 411.0M $ 550.4M $ 570.6M $ 671.8M > $700.0M 2016A 2017A 2018A 2019A 2020E Fiscal 2020 is Expected to be Another Year of Growth ; Heights TM products, Next Generation 911 systems and important contract awards create strong re
Slide 7: Comtech Participates in Growing Markets
7 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 8: Comtech's Two Segments Have Common Capabilities
8 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 EBITDA
Slide 9: Extensive Acquisition Experience with Successful Integrations
9 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 contrac
Slide 10: Gilat Satellite Networks – Acquisition Announced in January 2020
10 Gilat’s Segments Fixed Networks Mobility Solutions Terrestrial Infrastructure TTM Revenue of $137.2 million A True Market Leader With Highly Complementary Products - Key supplier of VSAT satellite modems & solid - state amplifiers - Deep experience with TDMA & in - flight connectivity technologie
Slide 11: Gilat Acquisition Offers Diversification While Enhancing Margins
11 Government 15% Commercial 85% Government 47% Commercial 53% Government 38% Commercial 62% United States 75% International 25% United States 38% International 62% Gilat Acquisition Offers Diversification While Enhancing Margins R e v enu e by Geography and Comtech Segment ( 3 ) (4) P ro F o r m a
Slide 12: The Combination Allows Comtech To Maximize Long-Term Market Growth Opportunities
12 The Combination Allows Comtech To Maximize Long - Term Market Growth Opportunities Exploiting an Inflection Point in Secure Wireless Markets Mobility / In - Flight (IFC) Complete Solutions Portfolio Deep, Global Market Access R&D and Distribution Scale Wireless Backhaul / 5G Government & Defense
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 at Least $1 Billion of Visibility into Future Revenue
16 We Have at Least $1 Billion of Visibility into Future Revenue Commercial Solutions Government Solutions $474.6M $624.6M $173.7M $343.7M $150.0M $170.0M Backlog Contracts in Place, Not in Backlog Revenue Visibility $648.3M $968.3M $320.0M As of October 31, 2019 As of October 31, 2019 Notes (1) In
Slide 17: Target Goals For Fiscal 2020
Target Goals For Fiscal 2020 – As of December 4, 2019 Text Revenue $712.0M - $732.0M Adjusted EBITDA (1) $99.0M - $103.0M GAAP EPS $1.28 - $1.42 Non GAAP EPS $1.42 - $1.56 FY 2020 Targets Notes (1) Adjusted EBITDA represents earnings (loss) before income taxes, interest (income) and other, write - o
Slide 18: We Believe the Future is Bright for Many Years to Come
18 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 19: Appendix I Historical Data and Trends
19 Appendix I Historical Data and Trends
Slide 20: Overview of Q1 FY20 Performance
40.8% 36.1% 23.1% Domestic International U.S. Government Sales by Customer Type Overview of Q1 FY20 Performance (Reported in December 2019) ; Q1 FY 2020 Revenue was $170.3 million ; GAAP Operating Income of $9.3 million includes amortization of $5.2 million, depreciation of $2.7 million, stock - bas
Slide 21: Recent Quarterly Operating Results
Recent Quarterly Operating Results Text Q1 Q2 Q3 Q4 Q1 2019 2019 2019 2019 2020 Revenue Commercial Solutions 77,973$ 86,735$ 89,600$ 102,985$ 94,314$ Government Solutions 82,871 77,398 80,848 73,387 75,953 Total Revenue 160,844$ 164,133$ 170,448$ 176,372$ 170,267$ Net Income 3,468$ 7,826$ 7,612$ 6,1
Slide 22: 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 23: Historical Revenue Results
2016 2017 2018 2019 YTD 2020 $162,049 $219,501 $225,513 $314,504 $75,953 Government Solutions Historical Revenue Results Text Notes (1) Comtech’s fiscal year end is July 31 . 2016 2017 2018 2019 YTD 2020 $248,955 $330,867 $345,076 $357,293 $94,314 Commercial Solutions $ in 000s $ in 000s 23 2016 201
Slide 24: 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% 41% 29% 39% 39% 35% 36% 30% 28% 26% 25% 23% U.S. Government Domestic International 24
Slide 25: Historical Bookings & Backlog
Historical Bookings & Backlog Text Notes (1) Comtech’s fiscal year end is July 31 . $ in 000s $ in 000s Bookings Total Backlog 25 2016 2017 2018 2019 YTD 2020 $451,278 $512,593 $755,054 $724,056 $135,656 2016 2017 2018 2019 YTD 2020 $484,005 $446,230 $630,695 $682,954 $648,343
Slide 26: 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 $17,586 $ in 000s Research and Development Expense
Slide 27: 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 Oct. 31, Jan. 31, Apr. 30, Jul. 31, Oct. 31, 2018 2019 2019 2019 2019 Cash and Cash Equivalents 42,943$ 45,997$ 45,152$ 45,576$ 46,873$ Workin
Slide 28: Market Data
Market Data Text General Market Information Nasdaq Symbol: CMTL Institutional Holders (2) : 240 52 - Week Range (1) : $21.15 - $34.97 Analyst Coverage: 5 Source: Nasdaq Analysts Notes (1) 52 - week range indicates the high and low closing prices during the period of November 1, 2018 through October
Slide 29: Appendix II Supplemental Acquisition Information
Appendix II Supplemental Acquisition Information
Slide 30: Gilat Transaction Summary
30 Gilat Transaction Summary Overview ; Comtech to acquire Gilat for $10.25 per share (70% in cash and 30% in stock) ; The Gilat acquisition is highly strategic and significantly expands Comtech’s existing capabilities and provides new channels for growth against a very favorable satellite communica
Slide 31: Drives Global Market Access By Creating a World Leader
31 + Drives Global Market Access By Creating a World Leader • Complemen ts Comtech’s global market footprint , establishing a presence within key international markets with sales approaching nearly $1.0 billion annually • Substantially enhances Gilat’s access to key markets including the U.S. Govern
Slide 32: Clear Path To Driving Future Shareholder Value
32 Clear Path To Driving Future Shareholder Value Year 1 Rapid changes and growth in the satellite industry require business scale and strength Both Gilat’s and Comtech’s management and talented global workforce are expected to remain in place, with industry - leading R&D Drive industry leading inno
Slide 33: Appendix III Reconciliation of GAAP to Non-GAAP Financial Measures
33 Appendix III Reconciliation of GAAP to Non - GAAP Financial Measures
Slide 34: Reconciliation of CMTL GAAP to Non-GAAP Financial Measures
Reconciliation of CMTL GAAP to Non - GAAP Financial Measures Text Quarterly Adjusted EBITDA Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Reported net income 3,468$ 7,826$ 7,612$ 6,135$ 6,388$ Income tax expense (benefit) (2,127) 2,371 1,547 2,078 1,145 Net interest expense & other 2,735 2,216 2,137 2,192
Slide 35: Reconciliation of CMTL GAAP to Non-GAAP Financial Measures (cont'd)
Reconciliation of CMTL GAAP to Non - GAAP Financial Measures (cont’d) Text Annual Adjusted EBITDA 2016 2017 2018 2019 Reported net (loss) income (7,738)$ 15,827$ 29,769$ 25,041$ Income tax expense (benefit) (454) 9,654 (5,143) 3,869 Write-off of deferred financing costs - - - 3,217 Net interest expe
Slide 36: 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 FY 19 Q1 2020 GAAP earnings (loss) per diluted share 0.14$ 0.32$ 0.31$ 0.25$ 1.03$ 0.26$ Acquisition plan expenses 0.04 0.06 0.05 0.04 0.19 0.07 Estimated cont
Slide 37: Reconciliation of CMTL and GILT GAAP to Non-GAAP Financial Measures
37 Reconciliation of CMTL and GILT GAAP to Non - GAAP Financial Measures Notes (1) See statement regarding the use of Non - GAAP financial measures in the front of this presentation. (2) Totals may not foot due to rounding. (3) Pro forma combined results exclude all expenses resulting from the acqui
Slide 38: 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
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