Israel-based specialist satellite communications company Gilat, which had hoped to see itself merged by now with Comtech Telecommunications, has reported its Q3 numbers saying its revenue was negatively impacted by the ongoing pandemic, and even more so by the litigation with Comtech.
Comtech has agreed to pay Gilat $70 million for terminating its merger commitment. Gilat says it plans to distribute $55 million as a cash dividend, out of which $20 million was declared and will be paid on December 2nd 2020, and an additional $35 million to be declared subject to court approval. Revenue from the Comtech termination will be declared in Q4.
Gilat’s revenues were $37.3 million; compared to $63.4 million in Q3 2019 and similar to that of the previous quarter. GAAP operating loss was $10.9 million compared to operating income of $7 million in Q3 2019 and an operating loss of $3.5 million in the previous quarter. The GAAP operating loss in the quarter includes $8.2 million in expenses related to the Comtech merger and litigation and their effects.
Adi Sfadia, Gilat’s Interim CEO, commented: “I am very optimistic as we continue to see a recovery in most of our areas of operations. During this quarter we made several significant achievements in our strategic growth engines of Cellular Backhaul, Non-GSO, and in our business in Peru which have resulted in significant increase in our backlog.”
“Gilat continues to lead the market of Cellular Backhaul and we continue to reap the benefits of our cellular backhaul managed service strategy that allows us to enjoy larger contracts with recurring revenue. As an example, in North America we had two such major achievements this quarter. Gilat was awarded $20 Million for a three-year managed-service contract-renewal and expansion from a Tier-1 MNO in the United States and a three-year managed service contract by Southern Linc, for coverage to remote areas as well as emergency response,” he added.