Gilat Satellite Networks Ltd.

Earnings Release • Feb 16, 2021

FORM 6 – K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report on Foreign Issuer

Pursuant to Rule 13a – 16 or 15d – 16 of the Securities Exchange Act of 1934

For the Month of February, 2021

Gilat Satellite Networks Ltd.

(Translation of Registrant's Name into English)

Gilat House, Yegia Kapayim Street Daniv Park, Kiryat Arye, Petah Tikva, Israel (Address of Principal Corporate Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F ☒ Form 40-F ☐

Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ☐ No ☒

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A

Attached hereto is Registrant's press release dated February 16, 2021, announcing Gilat's Fourth Quarter and Full Year 2020 Results.

We consent to the incorporation by reference of the GAAP financial information included herein, in the Registration Statements on Form S-8 (Registration Nos. 333-180552, 333-187021, 333- 204867, 333-210820, 333-217022, 333-221546, 333-223839, 333-231442 and 333-236028) and on Form F-3 (Registration No. 333-232597).

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated February 16, 2021 By: /s/ Yael Shofar

Gilat Satellite Networks Ltd. (Registrant)

Yael Shofar General Counsel

Gilat Reports Fourth Quarter and Full Year 2020 Results

Fourth Quarter GAAP Net Profit of \$62.4 million and Adjusted EBITDA of \$1.1 million Net Profit includes termination fees, net of costs

Dov Baharav, Chairman of the Board, Announced His Plans to Step Down During 2021

Petah Tikva, Israel – February 16, 2021 – 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 full year ended December 31, 2020.

Fourth Quarter Financial Highlights

• Revenues of \$42.6 million versus \$78.3 million in Q4 2019 and improved from \$37.3 million in the previous quarter;
• GAAP operating income of \$62.7 million versus \$9.2 million in Q4 2019 and an operating loss of \$10.9 million in Q3 2020; GAAP operating income includes income related to the settlement with Comtech, net of related expenses, of \$64.8 million;
• Non-GAAP operating loss of \$1.6 million, compared with operating income of \$9.9 million in Q4 2019, improved compared with an operating loss of \$1.9 million in the previous quarter;
• GAAP net income of \$62.4 million, or income of \$1.12 per diluted share, compared with net income of \$24.0 million, or income of \$0.43 per diluted share in Q4 2019 and net loss in the previous quarter of \$11.6 million, or loss of \$0.21 per share; GAAP net income includes \$64.8 million income related to the settlement with Comtech, net of related expenses, while GAAP net income in Q4 2019 includes a \$15.5 million tax benefit;
• Non-GAAP net loss of \$1.9 million, or loss of \$0.03 per diluted share, compared with net income of \$9.1 million, or income of \$0.16 per diluted share in Q4 2019, and an improvement compared with a net loss of \$2.6 million, or loss of \$0.05 per share, as reported in the previous quarter;
• Adjusted EBITDA of \$1.1 million compared with adjusted EBITDA of \$13.1 million in Q4 2019; and improved compared with adjusted EBITDA of \$0.6 million in the previous quarter;
• Received \$70 million in merger cancellation fees from Comtech;
• Cash dividend of \$20 million paid to shareholders during the quarter; additional cash dividend of \$35 million declared in the quarter and paid in January 2021;

Full year 2020 Financial Highlights

• Revenue of \$165.9 million, compared with \$263.5 million in 2019;
• GAAP operating income of \$37.6 million compared to \$25.6 million in 2019; GAAP operating income includes income of \$53.6 million related to the settlement with Comtech, net of related expenses;
• Non-GAAP operating loss of \$13.7 million compared with non-GAAP operating income of \$29.2 million in 2019;
• GAAP net income of \$34.9 million or \$0.63 per diluted share compared with \$36.5 million in 2019 or \$0.65 per diluted share; GAAP net income includes income of \$53.6 million related to the settlement with Comtech, net of related expenses, while GAAP net income in 2019 includes a \$15.5 million tax benefit;
• Non-GAAP net loss of \$16.4 million or loss of \$0.30 per diluted share compared to non-GAAP net income of \$24.7 million or income of \$0.44 per diluted share in 2019;
• Adjusted EBITDA was \$3.3 million loss compared with adjusted EBITDA of \$40.2 million in 2019;

Management Commentary

Adi Sfadia, Gilat's CEO, commented: "During 2020, and specifically during the second half of the year, we made major technological achievements and closed some very significant deals, all of which position us very well for 2021 and onward. In particular, we saw wins in most of our growth areas, mainly Cellular Backhaul and NGSO.

"We won multiple managed service deals providing us with significant recurring revenue. In 5G backhaul - another growth engine for us, we are making solid headway and during the year, we successfully demonstrated the transport of 5G traffic with outstanding performance over Thaicom's GEO HTS satellite. We also solidified our position, as a front-runner in providing the groundsegment for NGSO constellations, with an award in the fourth quarter with a potential of over \$50M in support of a LEO constellation.

"In addition, given that IFC is and will continue to play a major role in attracting air travelling customers, I am confident that as air travel resumes its recovery, we will see a significant rise in demand for our IFC products and solutions."

Mr. Sfadia concluded, "I am very encouraged by our strong bookings in the second half of 2020 which have continued into 2021, as well as the enormous investments targeting our industry. Despite my belief that the pandemic may still effect our 2021 operation to some extent, I am confident that our 2021 operating results will be materially better than those of 2020."

Dov Baharav stated: "Today I announced my plan to step down from my position as chairman of Gilat's Board of Directors during 2021 and retire, following a seven year tenure. I will retain my position until a new Chariman is appointed. I conclude my period with great pride and with a feeling of satisfaction. In the last seven years the company reached extraordinary technological and business achievements, and is extremely well positioned to take advantage of the robust opportunities we are currently seeing in the market."

Key Recent Announcements

• o Gilat Shipped Initial Aero Modems Out of a Multi-Million-Dollar Potential in China
• o CORPAC Awards Gilat Multi-Million-Dollar Contract to Provide Mission Critical Telecom Systems for Peru's Airports
• o Gilat Awarded Contract with a Potential of Over \$50 Million to Supply Wavestream's Gateway Solid State Power Amplifiers for Low Earth Orbit Constellation
• o Gilat's Proven ESA Technology Successfully Demonstrated over Inmarsat's Global Xpress
• o AXESS Awards Gilat Multi-Million Dollars to Expand Cellular Coverage for Two Key Mobile Operators in Mexico o Globe Awards Gilat Multi-Million US Dollar Managed Service Contract for Significant Expansion of Cellular Backhaul Project
• o Gilat Declares \$35 Million Cash Dividend to Shareholders
• o Hispasat Awards Gilat a Multi-Million Dollar Order for Cellular Backhaul over Satellite to Extend Altan La Red Compartida Service to Rural Mexico
• o Gilat Equips Hundreds of Boats, Vessels and Cruise Ships with Satellite Communication
• o Gilat Receives Multi-Million-Dollar Order for a US Department of Defense Tactical Communications Program
• o United States Government Awards Gilat Additional Multi-Million-Dollar Contract for Military Communications Program

Conference Call Details

Gilat's management will discuss its fourth quarter and full year 2020 results and business achievements and participate in a question and answer session:

Date: Tuesday, February 16, 2021 Start: 09:30 AM EST / 16:30 IST Dial-in: US: 1-866-744-5399 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: www.veidan-stream.com/gilatq4-2020.html

The webcast will also be archived for a period of 30 days on the Company's website and through the link above.

Conference Call Replay

Start: February 16, 2021 at 12:00 PM EST / 19:00 IST End: February 19, 2021 at 12:00 PM EST / 19:00 IST Dial-in: US: 1-888-326-9310; International: (+972) 3-925-5904

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, trade secrets and other litigation expenses, restructuring and reorganization costs, merger, acquisition and related litigation expense (income), net and initial recognition of deferred tax asset with respect to carryforward losses.

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 30 years of experience, we design and manufacture cutting-edge ground segment equipment, and provide comprehensive solutions and end-to-end services, powered by our innovative technology. Delivering high value competitive solutions, our portfolio comprises of a cloud based VSAT network platform, high-speed modems, high performance on-the-move antennas and high efficiency, high power Solid-State 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, cellular backhaul, enterprise, in-flight connectivity, maritime, trains, defense and public safety, all while meeting the most stringent service level requirements. Gilat controlling shareholders are the FIMI Private Equity Funds. 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 forwardlooking statements for any reason.

Contact: Gilat Satellite Networks Doreet Oren, Director Corporate Communications DoreetO@gilat.com

Ehud Helft GK Investor & Public Relations gilat@gkir.com +1 646 688 3559

GILAT SATELLITE NETWORKS LTD. CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. dollars in thousands (except share and per share data)

	Twelve months ended December 31,					Three months ended December 31,
		2020		2019		2020		2019
	Unaudited			Audited				Unaudited
Revenues	\$	165,885	\$	263,492	\$	42,627	\$	78,314
Cost of revenues		124,670		167,615		29,329		51,246
Gross profit		41,215		95,877		13,298		27,068
Research and development expenses		27,689		32,208		7,474		8,120
Less - grants		1,386		2,024		454		414
Research and development expenses, net		26,303		30,184		7,020		7,706
Selling and marketing expenses		16,871		21,488		4,534		5,156
General and administrative expenses		14,063		18,515		3,794		4,849
Merger, acquisition and related litigation expenses (income), net		(53,633)		118		(64,782)		118
Total operating expenses (income)		3,604		70,305		(49,434)		17,829
Operating income		37,611		25,572		62,732		9,239
Financial expenses, net		1,907		2,617		192		677
Income before taxes on income		35,704		22,955		62,540		8,562
Taxes on income (tax benefit)		793		(13,583)		98		(15,459)
Net income	\$	34,911	\$	36,538	\$	62,442	\$	24,021
Basic earnings per share	\$	0.63	\$	0.66	\$	1.12	\$	0.43
Diluted earnings per share	\$	0.63	\$	0.65	\$	1.12	\$	0.43
Weighted average number of shares used in computing earnings per share
Basic		55,516,113		55,368,703		55,545,654		55,485,961
Diluted		55,583,474		56,030,976		55,815,099		56,034,744

GILAT SATELLITE NETWORKS LTD.

RECONCILIATION BETWEEN GAAP AND NON-GAAP STATEMENTS OF OPERATIONS

FOR COMPARATIVE PURPOSES

Operating expenses (income)

U.S. dollars in thousands (except share and per share data)

		Three months ended December 31, 2020					Three months ended December 31, 2019
	Adjustments GAAP			Non-GAAP GAAP			Adjustments			Non-GAAP
		Unaudited							Unaudited
Gross profit	\$ 13,298		42	\$	13,340	\$	27,068		70	\$	27,138
Operating expenses (income)	(49,434)		64,389		14,955		17,829		(550)		17,279
Operating income (loss)	62,732		(64,347)		(1,615)		9,239		620		9,859
Income (loss) before taxes on income	62,540		(64,347)		(1,807)		8,562		620		9,182
Net income (loss)	62,442		(64,347)		(1,905)		24,021		(14,908)		9,113
Basic earnings (loss) per share	\$ 1.12	\$	(1.15)	\$	(0.03)	\$	0.43	\$	(0.27)	\$	0.16
Diluted earnings (loss) per share	\$ 1.12	\$	(1.15)	\$	(0.03)	\$	0.43	\$	(0.27)	\$	0.16
Weighted average number of shares used in computing earnings per share
Basic	55,545,654				55,545,654		55,485,961				55,485,961
Diluted	55,815,099				55,545,654		56,034,744				56,122,960
		Three months ended December 31, 2020 Unaudited							Three months ended December 31, 2019 Unaudited
GAAP net income		\$	62,442					\$	24,021
Gross profit
Non-cash stock-based compensation expenses			39						58
Amortization of intangible assets related to acquisition transactions			3						12

8

Non-cash stock-based compensation expenses 254 347 Amortization of intangible assets related to acquisition transactions 54 49 Trade secrets and other litigation expenses 85 36 Merger, acquisition and related litigation expenses (income), net (64,782) 118

Tax benefit - (15,528) Non-GAAP net income (loss) \$ (1,905) \$ 9,113

42 70

(64,389) 550

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)

		Twelve months ended December 31, 2020				Twelve months ended December 31, 2019
	GAAP	Adjustments	Non-GAAP	GAAP		Adjustments		Non-GAAP
		Unaudited		Audited				Unaudited
Gross profit	\$ 41,215	186	\$ 41,401	\$ 95,877		776	\$	96,653
Operating expenses	3,604	51,502	55,106	70,305		(2,890)		67,415
Operating income (loss)	37,611	(51,316)	(13,705)	25,572		3,666		29,238
Income (loss) before taxes on income	35,704	(51,316)	(15,612)	22,955		3,666		26,621
Net income (loss)	34,911	(51,316)	(16,405)	36,538		(11,862)		24,676
Basic earnings (loss) per share	\$ 0.63	\$ (0.93)	\$ (0.30)	\$ 0.66	\$	(0.21)	\$	0.45
Diluted earnings (loss) per share	\$ 0.63	\$ (0.93)	\$ (0.30)	\$ 0.65	\$	(0.21)	\$	0.44
Weighted average number of shares used in computing earnings per share
Basic	55,516,113		55,516,113	55,368,703				55,368,703
Diluted	55,583,474		55,516,113	56,030,976				56,165,945
		Twelve months ended December 31, 2020 Unaudited				Twelve months ended December 31, 2019 Unaudited
GAAP net income		\$ 34,911			\$	36,538
Gross profit
Non-cash stock-based compensation expenses		166				257
Amortization of intangible assets related to acquisition transactions		20				490
Restructuring and re-organization costs		-				29
		186				776
Operating expenses (income)
Non-cash stock-based compensation expenses		1,114				1,878
Amortization of intangible assets related to acquisition transactions		204				203
Trade secrets and other litigation expenses		96				136
Merger, acquisition and related litigation expenses (income), net		(53,633)				118
Restructuring and re-organization costs		717				555
		(51,502)				2,890
Tax benefit		-				(15,528)

9

Non-GAAP net income (loss) \$ (16,405) \$ 24,676

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

ADJUSTED EBITDA:

	Twelve months ended December 31,			Three months ended December 31,
	2020		2019		2020		2019
	Unaudited			Unaudited
GAAP operating income	\$ 37,611	\$	25,572	\$	62,732	\$	9,239
Add (deduct):
Non-cash stock-based compensation expenses	1,280		2,135		293		405
Trade secrets and other litigation expenses	96		136		85		36
Restructuring and re-organization costs	717		584		-		-
Merger, acquisition and related litigation expenses (income), net	(53,633)		118		(64,782)		118
Depreciation and amortization (*)	10,653		11,676		2,729		3,263
Adjusted EBITDA	\$ (3,276)	\$	40,221	\$	1,057	\$	13,061

(*) Including amortization of lease incentive

SEGMENT REVENUE:

	Twelve months ended December 31,				Three months ended December 31,
	2020			2019		2020		2019
		Unaudited		Audited			Unaudited
Fixed Networks	\$	92,671	\$	127,265	\$	25,085	\$	33,161
Mobility Solutions		54,169		104,665		11,751		34,050
Terrestrial Infrastructure Projects		19,045		31,562		5,791		11,103
Total revenue	\$	165,885	\$	263,492	\$	42,627	\$	78,314

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

	December 31, 2020 Unaudited	December 31, 2019 Audited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	\$	88,754 \$ 74,778
Restricted cash		27,162 27,067
Trade receivables, net		27,976 47,731
Contract assets		41,573 23,698
Inventories		31,304 27,203
Other current assets		16,637 23,007
Total current assets		233,406 223,484
LONG -TERM ASSETS:
Long -term restricted cash		42 124
Severance pay funds		6,665 6,831
Deferred taxes		19,295 18,455
Operating lease right -of-use assets		4,879 5,211
Other long term receivables		7,797 10,156
Total long -term assets		38,678 40,777
PROPERTY AND EQUIPMENT, NET		77,172 82,584
INTANGIBLE ASSETS, NET		1,082 1,523
GOODWILL		43,468 43,468
TOTAL ASSETS	\$	393,806 \$ 391,836

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

	December 31, 2020 Unaudited	December 31, 2019 Audited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term loans	\$ 4,000	\$ 4,096
Trade payables	20,487	20,725
Accrued expenses	46,387	54,676
Advances from customers and deferred revenues	26,244	27,220
Operating lease liabilities	1,911	1,977
Dividend payable	35,003	-
Other current liabilities	13,322	12,261
Total current liabilities	147,354	120,955
LONG-TERM LIABILITIES:
Long-term loans, net of current maturities	-	4,000
Accrued severance pay	7,136	7,061
Long-term advances from customers	1,890	2,866
Operating lease liabilities	2,985	3,258
Other long-term liabilities	631	108
Total long-term liabilities	12,642	17,293
SHAREHOLDERS' EQUITY:
Share capital - ordinary shares of NIS 0.2 par value	2,647	2,643
Additional paid-in capital	928,627	927,348
Accumulated other comprehensive loss	(6,017)	(5,048)
Accumulated deficit	(691,447)	(671,355)
Total shareholders' equity	233,810	253,588
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	\$ 393,806	\$ 391,836
12

GILAT SATELLITE NETWORKS LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

	Twelve months ended December 31,				Three months ended December 31,
		2020		2019		2020		2019
	Unaudited				Unaudited
Cash flows from operating activities:
Net income	\$	34,911	\$	36,538	\$	62,442	\$	24,021
Adjustments required to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization		10,291		10,978		2,534		2,730
Capital loss from disposal of property and equipment		181		461		147		461
Stock-based compensation of options		1,280		2,135		293		405
Accrued severance pay, net		242		361		205		16
Exchange rate differences on long-term loans		-		(12)		-		(12)
Deferred income taxes, net		(865)		(12,555)		(966)		(13,636)
Decrease (increase) in trade receivables, net		19,332		(1,323)		(1,520)		(1,464)
Decrease (increase) in contract assets		(17,875)		24,062		(3,471)		(1,346)
Decrease (increase) in other assets (including short-term, long-term
and deferred charges)		8,940		(817)		1,021		603
Decrease (increase) in inventories		(5,050)		(8,076)		100		(391)
Decrease (increase) in trade payables		(157)		(3,884)		3,178		631
Decrease in accrued expenses		(7,549)		(11,671)		(7,356)		(2,767)
Increase (decrease) in advance from customers		(1,898)		1,112		2,218		10,019
Increase (decrease) in current and non current liabilities		1,377		(2,527)		1,596		765
Net cash provided by operating activities		43,160		34,782		60,421		20,035
Cash flows from investing activities:
Purchase of property and equipment		(4,716)		(7,982)		(1,976)		(2,333)
Net cash used in investing activities		(4,716)		(7,982)		(1,976)		(2,333)
Cash flows from financing activities:
Exercise of stock options		-		375		-		-
Dividend payment		(19,999)		(24,864)		(19,999)		-
Repayment of long-term loans		(4,096)		(4,447)		-		(94)
Net cash used in financing activities		(24,095)		(28,936)		(19,999)		(94)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(360)		(99)		270		136
Increase (decrease) in cash, cash equivalents and restricted cash		13,989		(2,235)		38,716		17,744
Cash, cash equivalents and restricted cash at the beginning of the period		101,969		104,204		77,242		84,225
Cash, cash equivalents and restricted cash at the end of the period	\$	115,958	\$	101,969	\$	115,958	\$	101,969