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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Gilat Satellite Networks Ltd | NASDAQ:GILT | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.02 | -0.40% | 5.00 | 4.99 | 5.00 | 5.005 | 4.97 | 5.00 | 15,762 | 14:56:30 |
Form 20-F ☒ Form 40-F ☐
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Yes ☐ No ☒
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Gilat Satellite Networks Ltd.
(Registrant)
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|
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Dated August 7, 2024
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By:
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/s/ Doron Kerbel
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Doron Kerbel
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General Counsel & Company Secretary
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Exhibit 99.1
Page | |
F-2 - F-3 | |
F-4 | |
F-5 | |
F-6 | |
F-7 - F-8 | |
F-9 - F-28 |
June 30,
|
December 31,
|
|||||||
2024
|
2023
|
|||||||
Unaudited
|
Audited
|
|||||||
ASSETS
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||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
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$
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||||
Restricted cash
|
|
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||||||
Trade receivables, (net of allowance for credit losses of $
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||||||
Contract assets
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||||||
Inventories
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||||||
Other current assets
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||||||
Total current assets
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||||||
LONG-TERM ASSETS:
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||||||||
Restricted cash
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||||||
Long-term contract assets
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||||||
Severance pay funds
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||||||
Deferred taxes
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||||||
Operating lease right-of-use assets
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||||||
Other long-term assets
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||||||
Total long-term assets
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||||||
PROPERTY AND EQUIPMENT, NET
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||||||
INTANGIBLE ASSETS, NET
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||||||
GOODWILL
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|
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||||||
Total assets
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$
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$
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F - 2
June 30,
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December 31,
|
|||||||
2024
|
2023
|
|||||||
Unaudited
|
Audited
|
|||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Short-term debt
|
$
|
|
$
|
|
||||
Trade payables
|
|
|
||||||
Accrued expenses
|
|
|
||||||
Advances from customers and deferred revenues
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|
||||||
Operating lease liabilities
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|
||||||
Other current liabilities
|
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|
||||||
Total current liabilities
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|
||||||
LONG-TERM LIABILITIES:
|
||||||||
Long-term loan
|
|
|
||||||
Accrued severance pay
|
|
|
||||||
Long-term advances from customers and deferred revenues
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|
||||||
Operating lease liabilities
|
|
|
||||||
Other long-term liabilities
|
|
|
||||||
Total long-term liabilities
|
|
|
||||||
COMMITMENTS AND CONTINGENCIES
|
||||||||
SHAREHOLDERS' EQUITY:
|
||||||||
Share capital -
Ordinary shares of NIS
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Accumulated other comprehensive loss
|
(
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)
|
(
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)
|
||||
Accumulated deficit
|
(
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)
|
(
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)
|
||||
Total shareholders' equity
|
|
|
||||||
Total liabilities and shareholders' equity
|
$
|
|
$
|
|
F - 3
Six months ended
June 30,
|
||||||||
2024
|
2023
|
|||||||
Revenues:
|
||||||||
Products
|
$
|
|
$
|
|
||||
Services
|
|
|
||||||
Total revenues
|
|
|
||||||
Cost of revenues:
|
||||||||
Products
|
|
|
||||||
Services
|
|
|
||||||
Total cost of revenues
|
|
|
||||||
Gross profit
|
|
|
||||||
Operating expenses:
|
||||||||
Research and development expenses, net
|
|
|
||||||
Selling and marketing expenses
|
|
|
||||||
General and administrative expenses
|
|
|
||||||
Other operating income, net
|
(
|
)
|
(
|
)
|
||||
Total operating expenses
|
|
|
||||||
Operating income
|
|
|
||||||
Financial income (expenses), net
|
|
(
|
)
|
|||||
Income before taxes on income
|
|
|
||||||
Taxes on income
|
(
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)
|
(
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)
|
||||
Net income
|
$
|
|
$
|
|
||||
Earnings per share (basic and diluted)
|
$
|
|
$
|
|
||||
Weighted average number of shares used in computing earnings per share:
|
||||||||
Basic
|
|
|
||||||
Diluted
|
|
|
F - 4
Six months ended
June 30,
|
||||||||
2024
|
2023
|
|||||||
Net income
|
$
|
|
$
|
|
||||
Other comprehensive income (loss):
|
||||||||
Foreign currency translation adjustments
|
(
|
)
|
|
|||||
Change in unrealized loss on hedging instruments, net
|
(
|
)
|
(
|
)
|
||||
Less - reclassification adjustments for net loss realized on hedging instruments, net
|
|
|
||||||
Total other comprehensive loss
|
(
|
)
|
(
|
)
|
||||
Comprehensive income
|
$
|
|
$
|
|
F - 5
Number of
Ordinary shares
|
Share
capital
|
Additional
paid-in
capital
|
Accumulated
other
comprehensive
loss
|
Accumulated
deficit
|
Total
shareholders' equity
|
|||||||||||||||||||
Balance as of December 31, 2022
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|||||||||||
Stock-based compensation
|
-
|
|
|
|
|
|
||||||||||||||||||
Exercise of stock options
|
|
*)
|
*)
|
|
|
|
||||||||||||||||||
Comprehensive income (loss)
|
-
|
|
|
(
|
) |
|
|
|||||||||||||||||
Balance as of June 30, 2023
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
Number of
Ordinary shares
|
Share
capital
|
Additional
paid-in
capital
|
Accumulated
other
comprehensive
loss
|
Accumulated
deficit
|
Total
shareholders' equity
|
|||||||||||||||||||
Balance as of December 31, 2023
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|||||||||||
Stock-based compensation
|
-
|
|
|
|
|
|
||||||||||||||||||
Exercise of stock options
|
|
*)
|
*)
|
|
|
|
||||||||||||||||||
Comprehensive income (loss)
|
-
|
|
|
(
|
) |
|
|
|||||||||||||||||
Balance as of June 30, 2024
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
F - 6
Six months ended
June 30,
|
||||||||
2024
|
2023
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
|
$
|
|
||||
Adjustments required to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
|
|
||||||
Stock-based compensation *)
|
|
|
||||||
Accrued severance pay, net
|
|
|
||||||
Deferred taxes, net
|
|
|
||||||
Decrease (increase) in trade receivables, net
|
(
|
)
|
|
|||||
Decrease in contract assets
|
|
|
||||||
Decrease in other assets and other adjustments (including current, long-term and effect of exchange rate changes on cash, cash equivalents and restricted cash)
|
|
|
||||||
Decrease (increase) in inventories, net
|
|
(
|
)
|
|||||
Increase (decrease) in trade payables
|
|
(
|
)
|
|||||
Decrease in accrued expenses
|
(
|
)
|
(
|
)
|
||||
Increase (decrease) in advances from customers and deferred revenues
|
(
|
)
|
|
|||||
Decrease in other liabilities
|
(
|
)
|
(
|
)
|
||||
Net cash provided by operating activities
|
|
|
||||||
Cash flows from investing activities:
|
||||||||
Purchase of property and equipment
|
(
|
)
|
(
|
)
|
||||
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Repayment of credit facility, net
|
(
|
)
|
|
|||||
Repayments of short-term debts
|
(
|
)
|
|
|||||
Proceeds from short-term debts
|
|
|
||||||
Net cash used in financing activities
|
(
|
)
|
|
|||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(
|
)
|
(
|
)
|
||||
Increase (decrease) in cash, cash equivalents and restricted cash
|
(
|
)
|
|
|||||
Cash, cash equivalents and restricted cash at the beginning of the period
|
|
|
||||||
Cash, cash equivalents and restricted cash at the end of the period (a)
|
$
|
|
$
|
|
F - 7
(a) |
The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the condensed interim consolidated balance sheets:
|
June 30,
|
||||||||
2024
|
2023
|
|||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Restricted cash - Current
|
|
|
||||||
Restricted cash - Long-term
|
|
|
||||||
Cash, cash equivalents and restricted cash
|
$
|
|
$
|
|
F - 8
NOTE 1: - |
GENERAL
|
a. |
Organization:
|
b. |
As of June 30, 2024, the Company operates in three operating segments consisting of Satellite Networks, Integrated Solutions and Network Infrastructure and Services. For additional information, including major customers, geographic and segment information, see Note 10.
|
c. |
The Company depends on major suppliers to supply certain components and services for the production of its products or providing services. If these suppliers fail to deliver or delay the delivery of the necessary components or services, the Company will be required to seek alternative sources of supply. A change in suppliers could result in product redesign, manufacturing delays or services delays which could cause a possible loss of sales and additional incremental costs and, consequently, could adversely affect the Company's results of operations and financial position.
|
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands
NOTE 1: -
|
GENERAL (Cont.)
|
d. |
The military conflict between Russia and Ukraine and the rising tensions between the U.S. and other countries, on the one hand, and Russia, on the other hand, caused major economic sanctions and export controls restrictions on Russia and various Russian entities were imposed by the U.S., European Union, and the United Kingdom commencing February 2022, and additional sanctions and restrictions may be imposed in the future. These sanctions and restrictions restrict the Company’s business in Russia, which mainly includes exports to Russia, and may delay or prevent the Company from collecting funds and performing money transfers from Russia. While the Company’s business in Russia is limited in scope, these restrictions may cause a reduction in the Company’s sales and financial results. Accordingly, given the continuous war and the restrictions described, the Company decided to wind down its activities in the Russian market. The costs associated with winding down our activities in the Russian market have been included in "Other operating income, net" and “Cost of revenues” in our Condensed Interim Consolidated Statements Of Income. There is no assurance that negative developments in the area in the future will not disrupt the Company’s business and materially adversely affect it.
|
e. |
On March 8, 2023, the Company signed a definitive agreement to acquire
|
f. |
On June 17, 2024, the Company signed a definitive agreement to acquire
|
NOTE 2: -
|
SIGNIFICANT ACCOUNTING POLICIES
|
a. |
Unaudited condensed interim consolidated financial statements:
|
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands
NOTE 2: -
|
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
b. |
Use of estimates:
|
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands
NOTE 2:-
|
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
c. |
Principles of consolidation:
|
d. |
Recently issued accounting pronouncements – not yet adopted:
|
NOTE 3:- |
INVENTORIES
|
|
June 30,
|
December 31,
|
||||||
2024
|
2023
|
|||||||
Unaudited
|
Audited
|
|||||||
Raw materials, parts and supplies
|
$
|
|
$
|
|
||||
Work in progress and assembled raw materials
|
|
|
||||||
Finished products
|
|
|
||||||
$
|
|
$
|
|
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands
NOTE 4:- |
PROPERTY AND EQUIPMENT, NET
|
June 30,
|
December 31,
|
|||||||
2024
|
2023
|
|||||||
Unaudited
|
Audited
|
|||||||
Cost:
|
||||||||
Buildings and land
|
$ |
|
$
|
|
||||
Computers, software and electronic equipment
|
|
|
||||||
Network equipment
|
|
|
||||||
Office furniture and equipment
|
|
|
||||||
Vehicles
|
|
|
||||||
Leasehold improvements
|
|
|
||||||
|
|
|||||||
Accumulated depreciation
|
|
|
||||||
Depreciated cost
|
$
|
|
$
|
|
NOTE 5:- |
DEFERRED REVENUES
|
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands
NOTE 5:- |
DEFERRED REVENUES (Cont.)
|
NOTE 6:- |
COMMITMENTS AND CONTINGENCIES
|
a. |
Litigations: |
1. |
In 2003, the Brazilian tax authority filed a claim against the Company’s inactive subsidiary in Brazil, SPC International Ltda., for the payment of taxes allegedly due from the subsidiary. After numerous hearings and appeals at various appellate levels in Brazil, the Supreme Court ruled against the subsidiary in final non-appealable decisions published in June 2017.
|
2. |
In 2014, the Company’s Peruvian subsidiary, Gilat To Home Peru S.A. (“GTH”), initiated arbitration proceedings in Lima against the Ministry of Transport and Communications of Peru, (or MTC), and the Programa Nacional de Telecomunicaciones (or Pronatel). The arbitration was related to the Pronatel projects awarded to the Company in 2000-2001. Under these projects, GTH provided fixed public telephony services in rural areas of Peru. GTH’s main claim was related to damages caused by the promotion of mobile telephony in such areas by the Peruvian government in the years 2011-2015. In June 2018, the arbitration tribunal issued an arbitration award ordering MTC and Pronatel to pay GTH approximately $
|
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands
NOTE 6:- |
COMMITMENTS AND CONTINGENCIES (Cont.)
|
3. |
In October 2019, GTH initiated additional arbitration proceedings against MTC and Pronatel based on similar grounds for the years 2015-2019. In June 2022, the arbitration tribunal issued an arbitration award ordering MTC and Pronatel to pay GTH approximately $
|
4. |
The Company is in the midst of different stages of audits and disputes with various tax authorities in different parts of the world. Further, the Company is the defendant in various other lawsuits, including employment-related litigation claims and may be subject to other legal proceedings in the normal course of its business. While the Company intends to defend the aforementioned matters vigorously, it believes that a loss in excess of its accrued liability with respect to these claims is not probable.
|
b. |
Guarantees: |
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands
NOTE 6:- |
COMMITMENTS AND CONTINGENCIES (Cont.)
|
NOTE 7:- |
DERIVATIVE INSTRUMENTS
|
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share and per share data)
NOTE 8:- |
SHAREHOLDERS’ EQUITY
|
a. |
Share capital:
|
b. |
Stock option plans:
|
Six months ended June 30,
|
||||
2024
|
2023
|
|||
Risk free interest
|
|
|
||
Dividend yields
|
|
|
||
Volatility
|
|
|
||
Expected term (in years)
|
|
|
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share and per share data)
NOTE 8:- |
SHAREHOLDERS’ EQUITY (Cont.)
|
Number of options
|
Weighted-
average
exercise
price
|
Weighted-
average
remaining
contractual
term
(in years)
|
Aggregate
intrinsic value
(in thousands)
|
|||||||||||||
Outstanding at January 1, 2024
|
|
$
|
|
|
$
|
|
||||||||||
Granted
|
|
$
|
|
|||||||||||||
Exercised
|
(
|
)
|
$
|
|
||||||||||||
Forfeited and cancelled
|
(
|
)
|
$
|
|
||||||||||||
Outstanding as of June 30, 2024
|
|
$
|
|
|
$
|
|
||||||||||
Exercisable as of June 30, 2024
|
|
$
|
|
|
$
|
|
c. |
During the six months ended June 30, 2024 and 2023, the stock-based compensation expenses, including with respect to the Service Based Earn-Out and the Bonus Amount as defined in Note 15, were recognized in the condensed interim consolidated statement of income in the following line items:
|
Six months ended
|
||||||||
June 30,
|
||||||||
2024
|
2023
|
|||||||
Cost of revenue of products
|
$
|
|
$
|
|
||||
Cost of revenue of services
|
|
|
||||||
Research and development expenses, net
|
|
|
||||||
Selling and marketing expenses
|
|
|
||||||
General and administrative expenses
|
|
|
||||||
$
|
|
$
|
|
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands
NOTE 8:- |
SHAREHOLDERS’ EQUITY (Cont.)
|
d. |
Dividends:
|
1. |
In the event that cash dividends are declared by the Company, such dividends will be declared and paid in Israeli currency. Under current Israeli regulations, any cash dividend paid in Israeli currency in respect of ordinary shares purchased by non-residents of Israel with non-Israeli currency, may be freely repatriated in such non-Israeli currency, at the exchange rate prevailing at the time of repatriation.
|
2. |
The Company has not adopted a policy regarding the distribution of dividends.
|
3. |
Pursuant to the terms of a bank agreement, the Company is restricted from paying cash dividends to its shareholders without initial approval from the bank.
|
NOTE 9:- |
OTHER COMPERHENSIVE INCOME (LOSS)
|
Six months ended
June 30, 2024
|
||||||||||||
Foreign
currency
translation
adjustments
|
Unrealized
losses on
cash flow
hedges
|
Total
|
||||||||||
Beginning balance
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||
Other comprehensive loss before reclassifications
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Amounts reclassified from accumulated other comprehensive loss
|
|
|
|
|||||||||
Net current-period other comprehensive loss
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Ending balance
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands
NOTE 10:- |
CUSTOMERS, GEOGRAPHIC AND SEGMENT INFORMATION
|
a. |
The Company applies ASC 280, “Segment Reporting” (“ASC 280”). Operating segments are defined as components of an enterprise for which separate financial information is available and is evaluated regularly by the chief operating decision maker ("CODM"). The CODM is the Company’s Chief Executive Officer. The Company’s CODM does not regularly review asset information by segments and, therefore, the Company does not report asset information by segment.
|
b. |
The Company operates in three operating segments, as follows:
|
• |
Satellite Networks is focused on developing and supplying networks that are used as the platform that enables the latest satellite constellations of HTS, VHTS and NGSO opportunities worldwide. The segment provides advanced broadband satellite communication networks and associated professional services and comprehensive turnkey solutions and managed satellite network services solutions. Segment’s customers are service providers, satellite operators, MNOs, Telcos, large enterprises, system integrators, defense, homeland security organizations and governments worldwide. Principal applications include In-Flight Connectivity, cellular backhaul, maritime, social inclusion solutions, government, defense and enterprise networks and are driving meaningful partnerships with satellite operators to leverage the segment’s technology and breadth of services to deploy and operate the ground-based satellite communication networks. The segment’s product portfolio includes a leading satellite network platform with high-speed VSATs, high performance on-the-move antennas, BUCs and transceivers, as well as multi-band deployable Ku/Ka/X Earth Terminal, or DKET terminals (a family of transportable terminal hubs), and durable, ultra-portable terminals for quick connectivity in remote locations.
|
• |
Integrated Solutions is focused on developing, manufacturing and supplying products and solutions for mission-critical defense and broadcast satellite communications systems, advanced on-the-move and on-the-pause satellite communications equipment, systems and solutions, including airborne, ground-mobile satellite systems and solutions. The integrated solutions product portfolio comprises of leading high-efficiency, high-power SSPAs, BUCs and transceivers with a field-proven, high-performance variety of frequency bands. The segment’s customers are satellite operators, In-Flight Connectivity service providers, defense and homeland security system integrators, and NGSO satellite operators, and gateway integrators.
|
• |
Network Infrastructure and Services is focused on telecom operation and implementation of large-scale network projects in Peru. The segment provides terrestrial (fiber optic and wireless network) and satellite network construction and operation. The segment serves the Company’s customers through technology integration, managed networks and services, connectivity services, internet access and telephony over the segment’s networks. The segment implements projects using various technologies (including the Company’s equipment), mainly based on BOT and BOO contracts.
|
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands
NOTE 10:-
|
CUSTOMERS, GEOGRAPHIC AND SEGMENT INFORMATION (Cont.)
|
c. |
Information on the reportable operating segments:
|
1. |
The measurement of operating income (loss) in the reportable operating segments is based on the same accounting principles applied in these condensed interim consolidated financial statements and includes certain corporate overhead allocations.
|
2. |
Financial information relating to reportable operating segments:
|
Six months ended
June 30, 2024
|
||||||||||||||||
Satellite Networks
|
Integrated
Solutions
|
Network
Infrastructure and Services *)
|
Total
|
|||||||||||||
Revenues
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Operating income (loss)
|
|
(
|
)
|
|
|
|||||||||||
Financial income, net
|
|
|||||||||||||||
Income before taxes on income
|
|
|||||||||||||||
Taxes on income
|
(
|
)
|
||||||||||||||
Net income
|
|
|||||||||||||||
Depreciation and amortization
Expenses
|
$
|
|
$
|
|
$
|
|
$
|
|
Six months ended
June 30, 2023
|
||||||||||||||||
Satellite Networks
|
Integrated
Solutions
|
Network
Infrastructure and Services *)
|
Total
|
|||||||||||||
Revenues
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Operating income (loss)
|
|
(
|
)
|
|
|
|||||||||||
Financial expenses, net
|
(
|
)
|
||||||||||||||
Income before taxes on income
|
|
|||||||||||||||
Taxes on income
|
(
|
)
|
||||||||||||||
Net income
|
|
|||||||||||||||
Depreciation and amortization
Expenses
|
$
|
|
$
|
|
$
|
|
$
|
|
*) |
|
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands
NOTE 10:- CUSTOMERS, GEOGRAPHIC AND SEGMENT INFORMATION (Cont.)
d. |
Geographic information:
|
Six months ended
|
||||||||
June 30,
|
||||||||
2024
|
2023
|
|||||||
United States
|
$
|
|
$
|
|
||||
Peru
|
|
|
||||||
Israel
|
|
|
||||||
Others
|
|
|
||||||
$
|
|
$
|
|
e. |
The table below represents the revenues from major customers and their operating segments:
|
Six months ended
June 30,
|
||||||||
2024
|
2023
|
|||||||
Customer A – Network Infrastructure and Services
|
|
%
|
|
%
|
||||
Customer B – Satellite Networks
|
|
%
|
|
)
|
||||
Customer C – Satellite Networks
|
|
)
|
|
%
|
NOTE 11:- |
TAXES ON INCOME
|
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share and per share data)
NOTE 12:-
|
EARNINGS PER SHARE
|
1. |
Numerator:
|
Six months ended
June 30,
|
||||||||
2024
|
2023
|
|||||||
Net income available to holders of ordinary shares
|
$
|
|
$
|
|
2. |
Denominator:
|
Six months ended
June 30,
|
||||||||
2024
|
2023
|
|||||||
Weighted average number of shares
|
|
|
||||||
Add – stock options
|
|
|
||||||
Denominator for diluted earnings per share – adjusted weighted average shares assuming exercise of stock options
|
|
|
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands
NOTE 13:- |
SUPPLEMENTARY CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS INFORMATION
|
a. |
Other current assets:
|
June 30,
2024
|
December 31,
2023
|
|||||||
Unaudited
|
Audited
|
|||||||
Governmental authorities *)
|
$
|
|
$
|
|
||||
Prepaid expenses
|
|
|
||||||
Deferred charges
|
|
|
||||||
Advance payments to suppliers
|
|
|
||||||
Other
|
|
|
||||||
|
$
|
|
b. |
Other current liabilities:
|
June 30,
2024
|
December 31,
2023
|
|||||||
Unaudited
|
Audited
|
|||||||
Payroll and related employee accruals
|
$
|
|
$
|
|
||||
Governmental authorities
|
|
|
||||||
Holdback Amount (see Note 15)
|
|
|
||||||
Deferred rent
|
|
|
||||||
Other
|
|
|
||||||
$
|
|
$
|
|
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands
NOTE 13:- |
SUPPLEMENTARY CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS INFORMATION (Cont.)
|
c. |
Credit facility:
|
Interest rate
|
Maturity
|
June 30,
2024
|
||||||||||
Credit facility from bank
|
|
$
|
|
|||||||||
d.
|
Long-term loan:
|
Interest rate
|
Maturity
|
June 30,
2024
|
||||||||||
Other loan
|
|
|
$
|
|
||||||||
e.
|
Other long-term liabilities:
|
June 30,
2024
|
December 31,
2023
|
|||||||
Unaudited
|
Audited
|
|||||||
Earn-Out Consideration, Holdback Amount and Bonus Amount (see Note 15)
|
$
|
|
$
|
|
||||
Other
|
|
|
||||||
|
$
|
|
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands
NOTE 14:- |
OTHER OPERATING INCOME, NET
|
Six months ended
|
||||||||
June 30,
|
||||||||
2024
|
2023
|
|||||||
Mergers and acquisitions related expenses
|
$
|
|
$
|
|
||||
Income from arbitrations, net
|
(
|
)
|
(
|
)
|
||||
Others, net
|
(
|
)
|
|
|||||
$
|
(
|
)
|
(
|
)
|
NOTE 15:-
|
BUSINESS COMBINATION
|
i. |
A closing payment totaling $
|
ii. |
A deferred payment of $
|
iii. |
$
|
iv. |
$
|
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands
NOTE 15:-
|
BUSINESS COMBINATION (Cont.)
|
NOTE 16:- |
FAIR VALUE MEASURMENTS
|
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands
NOTE 16:- |
FAIR VALUE MEASURMENTS (Cont.)
|
June 30, 2024
|
||||||||||||||||
Unaudited
|
||||||||||||||||
Fair value measurements using input type
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Assets:
|
||||||||||||||||
|
|
|
|
|
||||||||||||
Total financial assets
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Liabilities:
|
||||||||||||||||
Holdback Amount
|
|
|
|
|
||||||||||||
Earn-Out Consideration
|
|
|
|
|
||||||||||||
Total financial liabilities
|
$
|
|
$
|
|
$
|
|
$
|
|
December 31, 2023
|
||||||||||||||||
Audited
|
||||||||||||||||
Fair value measurements using input type
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Assets:
|
||||||||||||||||
|
|
|
|
|
||||||||||||
Total financial assets
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Liabilities:
|
||||||||||||||||
Holdback Amount
|
|
|
|
|
||||||||||||
Earn-Out Consideration
|
|
|
|
|
||||||||||||
Total financial liabilities
|
$
|
|
$
|
|
$
|
|
$
|
|
Fair value at the beginning of the period
|
$
|
|
||
Income from changes in fair value
|
(
|
)
|
||
Fair value at the end of the period
|
$
|
|
A. |
Operating Results
|
• |
Managed satellite network services solutions, including services over our own networks (which may include satellite capacity);
|
• |
Network planning and optimization;
|
• |
Remote network operation;
|
• |
Call center support;
|
• |
Hub and field operations;
|
• |
End-to-end solutions for mission-critical operations; and
|
• |
Construction and installation of communication networks, typically on a Build, Operate and Transfer (“BOT”), or Build, Operate and Own (“BOO”), contract basis. In these projects, we build telecommunication infrastructure, typically using
fiber-optic and wireless technologies for broadband connectivity. We also provide managed network services over VSAT networks owned by others.
|
Six Months Ended
|
Six Months Ended
|
|||||||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||||||
|
2024
|
2023
|
2024
|
2023
|
||||||||||||||||
|
U.S. dollars in thousands
|
Percentage change
|
Percentage of revenues
|
|||||||||||||||||
Unaudited
|
Unaudited
|
Unaudited
|
||||||||||||||||||
|
||||||||||||||||||||
Satellite Networks
|
97,378
|
74,273
|
31.1
|
%
|
63.8
|
%
|
58.7
|
%
|
||||||||||||
Integrated Solutions
|
24,619
|
25,619
|
(3.9
|
)%
|
16.1
|
%
|
20.2
|
%
|
||||||||||||
Network Infrastructure and Services
|
30,712
|
26,659
|
15.2
|
%
|
20.1
|
%
|
21.1
|
%
|
||||||||||||
Total
|
152,709
|
126,551
|
20.7
|
%
|
100.0
|
%
|
100.0
|
%
|
|
Six Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2024
|
2023
|
2024
|
2023
|
||||||||||||
U.S. dollars in thousands
|
Percentage of revenues
|
|||||||||||||||
Unaudited
|
Unaudited
|
|||||||||||||||
Satellite Networks
|
42,019
|
38,739
|
43.2
|
%
|
52.2
|
%
|
||||||||||
Integrated Solutions
|
6,285
|
7,511
|
25.5
|
%
|
29.3
|
%
|
||||||||||
Network Infrastructure and Services
|
6,323
|
3,971
|
20.6
|
%
|
14.9
|
%
|
||||||||||
Total
|
54,627
|
50,221
|
35.8
|
%
|
39.7
|
%
|
|
Six Months Ended
|
|||||||||||
|
June 30,
|
|||||||||||
|
2024
|
2023
|
||||||||||
|
U.S. dollars in thousands
|
Percentage change
|
||||||||||
Unaudited
|
Unaudited
|
|||||||||||
|
||||||||||||
Operating expenses:
|
||||||||||||
Research and development expenses, net
|
18,547
|
19,003
|
(2.4)
|
%
|
||||||||
Selling and marketing expenses
|
14,109
|
11,941
|
18.2
|
%
|
||||||||
General and administrative expenses
|
14,514
|
9,155
|
58.5
|
%
|
||||||||
Other operating income, net
|
(725
|
)
|
(2,340
|
)
|
(69.0)
|
%
|
||||||
Total operating expenses
|
46,445
|
37,759
|
23.0
|
%
|
Six months ended June 30,
|
||||||||
2024
|
2023
|
|||||||
U.S. dollars in thousands
|
||||||||
Unaudited
|
||||||||
Net cash provided by operating activities
|
692
|
8,217
|
||||||
Net cash used in investing activities
|
(2,650
|
)
|
(6,556
|
)
|
||||
Net cash used in financing activities
|
(7,324
|
)
|
-
|
|||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(718
|
)
|
(1,010
|
)
|
||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
(10,000
|
)
|
651
|
|||||
Cash, cash equivalents and restricted cash at beginning of the period
|
104,751
|
87,145
|
||||||
Cash, cash equivalents and restricted cash at end of the period...
|
94,751
|
87,796
|
Document and Entity Information |
6 Months Ended |
---|---|
Jun. 30, 2024 | |
Document And Entity Information [Abstract] | |
Entity Registrant Name | Gilat Satellite Networks Ltd. |
Entity Central Index Key | 0000897322 |
Current Fiscal Year End Date | --12-31 |
Document Type | 6-K |
Amendment Flag | false |
Document Period End Date | Jun. 30, 2024 |
Document Fiscal Period Focus | Q2 |
Document Fiscal Year Focus | 2024 |
Entity Address, Address Line One | Gilat House, Yegia Kapayim Street |
Entity Address, Address Line Two | Daniv Park, Kiryat Arye |
Entity Address, City or Town | Petah Tikva |
Entity Address Country | IL |
Entity Address, Postal Zip Code | 4913020 |
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Thousands |
Jun. 30, 2024
₪ / shares
|
Jun. 30, 2024
USD ($)
shares
|
Dec. 31, 2023
₪ / shares
|
Dec. 31, 2023
USD ($)
shares
|
---|---|---|---|---|
Statement of Financial Position [Abstract] | ||||
Trade receivables, allowance for credit losses | $ | $ 437 | $ 492 | ||
Ordinary shares, par value per share | ₪ / shares | ₪ 0.2 | ₪ 0.2 | ||
Ordinary shares, shares authorized | 90,000,000 | 90,000,000 | ||
Ordinary shares, shares issued | 57,017,032 | 57,016,086 | ||
Ordinary shares, shares outstanding | 57,017,032 | 57,016,086 |
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 6,266 | $ 9,905 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | (591) | 264 |
Change in unrealized loss on hedging instruments, net | (675) | (1,596) |
Less - reclassification adjustments for net loss realized on hedging instruments, net | 138 | 1,224 |
Total other comprehensive loss | (1,128) | (108) |
Comprehensive income | $ 5,138 | $ 9,797 |
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands |
Ordinary shares [Member] |
Additional paid-in capital [Member] |
Accumulated other comprehensive loss [Member] |
Accumulated deficit [Member] |
Total |
||||
---|---|---|---|---|---|---|---|---|---|
Balance at Dec. 31, 2022 | $ 2,711 | $ 932,086 | $ (6,847) | $ (683,825) | $ 244,125 | ||||
Balance, shares at Dec. 31, 2022 | 56,610,404 | ||||||||
Stock-based compensation of options | $ 0 | 1,114 | 0 | 0 | 1,114 | ||||
Exercise of stock options | $ 0 | [1] | 0 | [1] | 0 | 0 | 0 | ||
Exercise of stock options, shares | 11,264 | ||||||||
Comprehensive income (loss) | $ 0 | 0 | (108) | 9,905 | 9,797 | ||||
Balance at Jun. 30, 2023 | $ 2,711 | 933,200 | (6,955) | (673,920) | 255,036 | ||||
Balance, shares at Jun. 30, 2023 | 56,621,668 | ||||||||
Balance at Dec. 31, 2023 | $ 2,733 | 937,591 | (5,315) | (660,321) | $ 274,688 | ||||
Balance, shares at Dec. 31, 2023 | 57,016,086 | 57,016,086 | |||||||
Stock-based compensation of options | $ 0 | 2,929 | 0 | 0 | $ 2,929 | ||||
Exercise of stock options | $ 0 | [1] | 0 | [1] | 0 | 0 | 0 | ||
Exercise of stock options, shares | 946 | ||||||||
Comprehensive income (loss) | $ 0 | 0 | (1,128) | 6,266 | 5,138 | ||||
Balance at Jun. 30, 2024 | $ 2,733 | $ 940,520 | $ (6,443) | $ (654,055) | $ 282,755 | ||||
Balance, shares at Jun. 30, 2024 | 57,017,032 | 57,017,032 | |||||||
|
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Statement of Cash Flows [Abstract] | ||
Cash and cash equivalents | $ 93,667 | $ 87,408 |
Restricted cash - Current | 1,030 | 374 |
Restricted cash - Long-Term | 54 | 14 |
Cash, cash equivalents and restricted cash | 94,751 | $ 87,796 |
Service Based Earn-Out and the Bonus Amount | $ 2,166 |
GENERAL |
6 Months Ended | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | |||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||
GENERAL |
Gilat Satellite Networks Ltd. and its subsidiaries (the "Company") is a leading global provider of satellite-based broadband communications. The Company designs and manufactures ground-based satellite communications equipment, and provides comprehensive secure end-to-end solutions, end-to-end services for mission-critical operations, powered by its innovative technology. The Company’s portfolio includes a cloud-based satellite network platform, Very Small Aperture Terminals ("VSATs"), amplifiers, high-speed modems, high-performance on-the-move antennas, and high efficiency, high power Solid State Power Amplifiers ("SSPAs"), Block Upconverters ("BUCs") and Transceivers, furthermore, following the acquisition of DataPath Inc. (see Note 1(e) and Note 15), the Company’s newly owned subsidiary, it’s portfolio also includes defense ground systems and field services. The Company’s comprehensive solutions support multiple applications with a full portfolio of products to address key applications including broadband internet access, cellular backhaul over satellite, enterprise, social inclusion solutions, In-Flight Connectivity, maritime, trains, defense and public safety, all while meeting the most stringent service level requirements. The Company also provides connectivity services, internet access and telephony, to enterprise, government and residential customers utilizing both its own networks, and other networks that it installs, mainly based on Build Operate Transfer ("BOT") and Build Own Operate ("BOO") contracts. In these projects, the Company builds telecommunication infrastructure typically using fiber-optic and wireless technologies for the broadband connectivity. The Company also provides managed network services over VSAT networks owned by others.
The Company was incorporated in Israel in 1987 and launched its first generation VSAT in 1989.
The acquisition was accounted for by the purchase method of accounting, and, accordingly, the purchase price consideration has been allocated to the assets acquired and liabilities assumed (see Note 15).
|
SIGNIFICANT ACCOUNTING POLICIES |
6 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | |||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||
SIGNIFICANT ACCOUNTING POLICIES |
The accompanying unaudited condensed interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information. In the opinion of management, the unaudited condensed interim consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair presentation of the Company's condensed interim consolidated financial statements.
The balance sheets as of December 31, 2023 have been derived from the audited consolidated financial statements of the Company at that date but does not include all information and footnotes required by U.S. GAAP for complete financial statements.
The accompanying unaudited condensed interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2023 (the “Annual Financial Statements”), included in the Company’s Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission ("SEC") on March 20, 2024.
The significant accounting policies applied in the Company’s audited 2023 consolidated financial statements and notes thereto included in the Annual Report are applied consistently in these unaudited condensed interim consolidated financial statements. The Company’s interim period results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year.
The preparation of the unaudited condensed interim consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the dates of the unaudited condensed interim consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period.
Main areas that require significant estimates and assumptions by the Company’s management include contract costs, revenues (including variable consideration, determination of contracts duration, establishing stand-alone selling price for performance obligations) and profits or losses, application of percentage-of-completion accounting, provisions for uncollectible receivables and customer claims, impairment of inventories, impairment and useful life of long-lived assets, goodwill impairment, valuation allowance in respect of deferred tax assets, uncertain tax positions, accruals for estimated liabilities, including litigation and insurance reserves, contingent considerations and intangibles from business combination transaction and stock-based compensation. Actual results could differ from those estimates.
The unaudited condensed interim consolidated financial statements include the accounts of Gilat Satellite Networks Ltd. and its subsidiaries in which the Company has a controlling voting interest. Inter-company balances and transactions have been eliminated upon consolidation.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Taxes Disclosures, which requires greater disaggregation of income tax disclosures. The new standard requires additional information to be disclosed with respect to the income tax rate reconciliation and income taxes paid disaggregated by jurisdiction. This ASU should be applied prospectively for fiscal years beginning after December 15, 2024, with retrospective application permitted. The Company is evaluating the impacts of this guidance on the Company’s consolidated financial statements.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires companies to enhance the disclosures about segment expenses. The new standard requires the disclosure of the Company’s Chief Operating Decision Maker (CODM), expanded incremental line-item disclosures of significant segment expenses used by the CODM for decision-making, and the inclusion of previous annual only segment disclosure requirements on a quarterly basis. This ASU should be applied retrospectively for fiscal years beginning after December 15, 2023, and early adoption is permitted. The Company is evaluating the impacts of this guidance on the Company’s consolidated financial statements.
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INVENTORIES |
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Jun. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES |
Inventories are comprised of the following:
Inventory net write-offs amounted to $1,113 and $1,455 during the six months ended June 30, 2024 and 2023, respectively.
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PROPERTY AND EQUIPMENT, NET |
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Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY AND EQUIPMENT, NET |
Property and equipment, net is comprised of the following:
Depreciation expenses amounted to $5,393 and $6,122 during the six months ended June 30, 2024 and 2023, respectively.
The Company leases part of its buildings as office space to others. The gross income generated from such leases amounted to approximately $2,649 and $2,790 for the six months ended June 30, 2024 and 2023, respectively. These amounts do not include the corresponding offsetting expenses related to this income.
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DEFERRED REVENUES |
6 Months Ended | ||
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Jun. 30, 2024 | |||
Deferred Revenue [Abstract] | |||
DEFERRED REVENUES |
Deferred revenues as of June 30, 2024 and December 31, 2023 were $11,969 and $15,700, respectively, and primarily relate to revenues that are recognized over time for service contracts. Approximately $5,373 of the balance as of December 31, 2023 was recognized as revenues during the six months ended June 30, 2024.
The balance of deferred revenues approximates the aggregate amount of the billed and collected amount allocated to the unsatisfied performance obligations at the end of reporting period.
The aggregate estimated amount of the transaction price allocated to performance obligations from contracts with customers that have an original expected duration of more than one year and that are unsatisfied (or partially unsatisfied) as of June 30, 2024 is approximately $305,662. Such unsatisfied performance obligations, other than for large scale governmental projects (expected to be recognized over periods of approximately 5-11 years), principally relate to contracts in which the Company is committed to provide customer care services, extended warranty on equipment delivered to its customers or other services for an original period of more than one year.
The Company elected to use the exemption of not disclosing the prices allocated to performance obligations that are unsatisfied (or partially unsatisfied) as of the end of the reporting period, that are part of contracts that have an original expected duration of one year or less.
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COMMITMENTS AND CONTINGENCIES |
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Jun. 30, 2024 | |||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES |
As of June 30, 2024, the total amount of this claim, including interest, penalties and legal fees is approximately $6,895, of which approximately $727 is the principal. The Brazilian tax authorities initiated foreclosure proceedings against the subsidiary and certain of its former managers. The foreclosure proceedings against the former managers were cancelled by court in a final and non-appealable decision issued in July 2017. While foreclosure and other collection proceedings are pending against the subsidiary, based on Brazilian external counsel’s opinion, the Company believes that the subsidiary has solid arguments to sustain its position that further collection proceedings and inclusion of any additional co-obligors in the tax foreclosure certificate are barred due to statute of limitation and that the foreclosure procedures cannot legally be redirected to other group entities and managers who were not initially cited in the foreclosure proceeding due to the passage of the statute of limitation. Accordingly, the Company believes that the chances that such redirection will lead to a loss recognition are remote.
The Company guarantees its performance to, and, occasionally, advance payments from, certain of its customers, mainly through bank guarantees and corporate guarantees. Guarantees are often required for the Company’s performance during the installation and operational periods. The guarantees typically expire when certain operational milestones are met.
As of June 30, 2024, the aggregate amount of bank guarantees outstanding in order to secure the Company’s various obligations was approximately $78,300, including an aggregate of approximately $73,700 on behalf of its subsidiaries in Peru. In order to secure these guarantees the Company provided a floating charge on its assets as well as other pledges, including a fixed pledge, on certain assets and property. In addition, the Company has approximately $1,070 of restricted cash to secure some of those guarantees.
Under the arrangements with banks that provide credit line for guarantees, the Company is required to observe certain conditions. As of June 30, 2024, the Company follows these conditions. The Company’s credit and guarantee agreements also contain various restrictions and limitations that may impact the Company. These restrictions and limitations relate to incurrence of indebtedness, contingent obligations, negative pledges, liens, mergers and acquisitions, change of control, asset sales, dividends and distributions, redemption or repurchase of equity interests and certain debt payments. The agreements also stipulate a floating charge on Company’s assets to secure the fulfillment of Company’s obligations to banks as well as other pledges, including a fixed pledge, on certain assets and property.
All of the above guarantees are performance guarantees for the Company’s own performance, in accordance with ASC 460, “Guarantees” (“ASC 460”), such guarantees are excluded from the scope of ASC 460. The Company has not recorded any liability for such amounts, since the Company expects that its performance will be acceptable. To date, no guarantees have been exercised against the Company.
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DERIVATIVE INSTRUMENTS |
6 Months Ended | ||
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Jun. 30, 2024 | |||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
DERIVATIVE INSTRUMENTS |
The Company has entered into several foreign currency hedging contracts to protect against changes in value of forecasted foreign currency cash flows resulting from salaries and related payments that are denominated in NIS. These contracts were designated as cash flow hedges, as defined by ASC 815, as amended, are considered highly effective as hedges of these expenses and generally mature within twelve months.
The Company recognized losses related to derivative instruments, within payroll expenses, included under Cost of revenues and Operating expenses in the condensed interim consolidated statements of income of $138 and $1,224 for the six months ended June 30, 2024 and 2023, respectively. The notional amounts of hedging contracts were $23,970 and $24,267 as of June 30, 2024 and December 31, 2023, respectively.
The fair value of derivative instruments in the condensed interim consolidated balance sheets, which are presented under Other current assets, amounted to $143 and $680 as of June 30, 2024 and December 31, 2023, respectively.
The estimated net amount of the existing profit that is reported in accumulated other comprehensive loss as of June 30, 2024 that is expected to be reclassified into the condensed interim consolidated statement of income within the next twelve months is $143.
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SHAREHOLDERS' EQUITY |
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Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHAREHOLDERS' EQUITY |
Ordinary shares confer upon their holders voting rights, the right to receive cash dividends and the right to share in excess assets upon liquidation of the Company.
Description of plans:
In October 2008, the Company’s Board of Directors adopted the 2008 Stock Incentive Plan (the “2008 Plan”) with 1,000,000 shares or stock options available for grant and a sub-plan to enable qualified optionees certain tax benefits under the Israeli Income Tax Ordinance. Among the incentives that may be adopted are stock options, performance share awards, performance share unit awards, restricted shares, RSUs awards and other stock-based awards. During the years commencing in 2010 and through June 30, 2024, the Company’s Board of Directors approved, in the aggregate, an increase of 10,466,761 shares to the number of shares available for grant under the 2008 Plan, bringing the total number of shares available for grant to 11,466,761. As of June 30, 2024, an aggregate of 82,875 shares were available for future grants under the 2008 Plan.
The options granted under the 2008 Plan during the six months ended June 30, 2024 have vesting restrictions, valuations and contractual lives in similar nature to those described in Note 11 of the Notes to the Company’s consolidated annual financial statements for the year ended December 31, 2023.
Options granted to employees and directors:
The fair value of the Company’s stock options granted in the six months ended June 30, 2024 and 2023 was estimated using the following weighted average assumptions:
A summary of employees’ and directors’ option balances under the 2008 Plan as of June 30, 2024 and changes during the six months then ended are as follows:
The weighted-average grant-date fair value of options granted during the six months ended June 30, 2024 and 2023 were $2.22 and $2.43, respectively. The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the Company’s closing stock price and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on that date. These amounts changed based on the fair market value of the Company’s stock. Total intrinsic value of options exercised for the six months ended June 30, 2024 was $6.
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OTHER COMPREHENSIVE INCOME (LOSS) |
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Comprehensive Income [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER COMPERHENSIVE INCOME (LOSS) |
The following table shows the changes of accumulated other comprehensive loss, for the six months ended June 30, 2024:
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CUSTOMERS, GEOGRAPHIC AND SEGMENT INFORMATION |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CUSTOMERS, GEOGRAPHIC AND SEGMENT INFORMATION |
Revenues attributed to geographic areas, based on the location of the end customers and in accordance with ASC 280, are as follows:
*) Less than 10%
Customer A is located in Peru, Customer B is located in the European Union and customer C is located in the United States of America.
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TAXES ON INCOME |
6 Months Ended | ||
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Jun. 30, 2024 | |||
Income Tax Disclosure [Abstract] | |||
INCOME TAXES |
The Company’s six months tax provision and estimates of its annual effective tax rate, is subject to variation due to several factors, including variability in pre-tax income (or loss), the mix of jurisdictions to which such income relates, tax law developments, as well as non-deductible expenses, such as share-based compensation, and changes in its valuation allowance. Taxes on income were $2,695 and $1,822 for the six months ended June 30, 2024 and 2023, respectively. Taxes on income for the six months ended June 30, 2024 were primarily related to the Company’s utilization of deferred tax assets in Israel.
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EARNINGS PER SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE |
The following table sets forth the computation of basic and diluted earnings per share:
The total number of potential shares related to the outstanding options excluded from the calculations of diluted earnings per share, as they would have been anti-dilutive, were 5,545,025 and 3,821,128 for the six months ended June 30, 2024 and 2023, respectively.
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SUPPLEMENTARY CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS INFORMATION |
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SUPPLEMENTARY CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS INFORMATION |
*) Under the provisions of the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") the Company was eligible for a refundable Employee Retention Credit subject to certain criteria. As of December 31, 2023, the Company had a $952 receivable balance from the United States government related to the CARES Act. During the six months ended June 30, 2024 the entire outstanding amount was collected by the Company.
As of December 31, 2023, one of the Company’s subsidiaries had a revolving credit facility agreement with a U.S. based bank. During the six months ended June 30, 2024, the entire credit facility from bank was repaid.
One of the Company’s subsidiaries has a loan agreement with one of its former shareholders.
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OTHER OPERATING INCOME, NET |
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OTHER OPERATING INCOME, NET |
Other operating income, net is comprised of the following:
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BUSINESS COMBINATION |
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Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |||||||||||||||
BUSINESS COMBINATION |
In November 2023, the Company acquired DPI, a U.S. based expert systems integrator with a strong focus on the U.S. Department of Defense and the U.S. government sectors. In accordance with the acquisition method of accounting, the total estimated purchase price consideration for the DPI acquisition was $19,231, subject to working capital adjustments. For further details, see Note 17 in the Annual Financial Statements.
Under the preliminary purchase price consideration allocation, the Company allocated the purchase price consideration to tangible and identified intangible assets acquired and liabilities assumed based on the preliminary estimates of their fair values (with the exception of exceptions in the purchase method such as contract assets, lease liabilities and assets, tax balances etc.), which were determined using generally accepted valuation techniques based on estimates and assumptions made by management at the time of the acquisition. Such estimates are subject to change during the measurement period which is limited to up to one year from the acquisition date. Any adjustments to the preliminary purchase price consideration allocation identified during the measurement period will be recognized in the period in which the adjustments are determined.
The total purchase price consideration for the acquisition was $19,231, comprising:
The Earn-out Consideration, contingent upon DPI's financial performance for the years ending December 31, 2024, 2025, and 2026, has a maximum potential issuance of 2,419,755 of the Company’s ordinary shares.
Additionally, the Company has committed to issuing up to 705,245 of the Company’s ordinary shares over approximately three years post-acquisition, contingent on continued service and achieving specified financial results (“Service Based Earn-Out”), alongside a potential one-time bonus of $9,000 payable in the Company’s ordinary shares or cash (“Bonus Amount”) if all earn-outs are fully achieved. During the six months ended June 30, 2024, the Company has partially amended the Bonus Amount conditions under the purchase agreement with the former shareholders of DPI, modifying it to an amount in the range of $2,000-$9,000, conditioned upon meeting certain financial results.
For the six months ended June 30, 2024, the Company recognized $2,166 of expenses related to the Service Based Earn-Out and the Bonus Amount.
As of June 30, 2024, there was $8,206 of unrecognized compensation cost related to the Service Based Earn-Out and the Bonus Amount. This amount is expected to be recognized over a period of two and a half years.
The Company is evaluating the impact of potential synergies across its reporting units and, as a result, have not allocated goodwill to its other reporting units as of June 30, 2024. The Company will complete its evaluation and allocate goodwill, as applicable, by the end of the measurement period.
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FAIR VALUE MEASURMENTS |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASURMENTS |
The Company measured the Holdback Amount fair value by multiplying the closing market share price of the Company in the held-back number of ordinary shares and classified it within Level 1. Hedging contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments. The Earn-Out Consideration is classified within Level 3, as this liability is valued using valuation techniques.
In 2022, the Company invested in a convertible debt of a Canadian company. The Company has elected to measure the convertible debt at fair value with changes in fair value recognized in finance income (expenses), net in the condensed interim consolidated statement of income. The fair value of the convertible debt is classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments. As of June 30, 2024 and December 31, 2023, the fair value of the convertible debt was determined to be zero. The Company recorded a loss in the amounts of $0 and $1,396 for the six months ended June 30, 2024 and 2023, respectively, related to the revaluation of the convertible debt.
The table below presents the changes in the Earn-Out Consideration which was classified as Level 3 and measured at fair value on a recurring basis, in the six months ended June 30, 2024:
The Company estimated the fair value of the Earn-out Consideration by utilizing a Monte Carlo simulation. The significant assumptions used in the model mainly relate to the projected revenues and adjusted EBITDA in the forecasted years, including revenue growth rate range of 15.2%-28.3% and adjusted EBITDA margin range of 4.2%-16.9%. Changes in the Earn-out Consideration’s fair value were recorded in the condensed interim consolidated statements of income for the six months ended June 30, 2024 under Other operating income, net.
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SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Jun. 30, 2024 | ||||
Accounting Policies [Abstract] | ||||
Unaudited condensed interim consolidated financial statements |
The accompanying unaudited condensed interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information. In the opinion of management, the unaudited condensed interim consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair presentation of the Company's condensed interim consolidated financial statements.
The balance sheets as of December 31, 2023 have been derived from the audited consolidated financial statements of the Company at that date but does not include all information and footnotes required by U.S. GAAP for complete financial statements.
The accompanying unaudited condensed interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2023 (the “Annual Financial Statements”), included in the Company’s Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission ("SEC") on March 20, 2024.
The significant accounting policies applied in the Company’s audited 2023 consolidated financial statements and notes thereto included in the Annual Report are applied consistently in these unaudited condensed interim consolidated financial statements. The Company’s interim period results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year.
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Use of estimates: |
The preparation of the unaudited condensed interim consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the dates of the unaudited condensed interim consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period.
Main areas that require significant estimates and assumptions by the Company’s management include contract costs, revenues (including variable consideration, determination of contracts duration, establishing stand-alone selling price for performance obligations) and profits or losses, application of percentage-of-completion accounting, provisions for uncollectible receivables and customer claims, impairment of inventories, impairment and useful life of long-lived assets, goodwill impairment, valuation allowance in respect of deferred tax assets, uncertain tax positions, accruals for estimated liabilities, including litigation and insurance reserves, contingent considerations and intangibles from business combination transaction and stock-based compensation. Actual results could differ from those estimates.
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Principles of consolidation: |
The unaudited condensed interim consolidated financial statements include the accounts of Gilat Satellite Networks Ltd. and its subsidiaries in which the Company has a controlling voting interest. Inter-company balances and transactions have been eliminated upon consolidation.
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Recently issued accounting pronouncements – not yet adopted |
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Taxes Disclosures, which requires greater disaggregation of income tax disclosures. The new standard requires additional information to be disclosed with respect to the income tax rate reconciliation and income taxes paid disaggregated by jurisdiction. This ASU should be applied prospectively for fiscal years beginning after December 15, 2024, with retrospective application permitted. The Company is evaluating the impacts of this guidance on the Company’s consolidated financial statements.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires companies to enhance the disclosures about segment expenses. The new standard requires the disclosure of the Company’s Chief Operating Decision Maker (CODM), expanded incremental line-item disclosures of significant segment expenses used by the CODM for decision-making, and the inclusion of previous annual only segment disclosure requirements on a quarterly basis. This ASU should be applied retrospectively for fiscal years beginning after December 15, 2023, and early adoption is permitted. The Company is evaluating the impacts of this guidance on the Company’s consolidated financial statements.
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INVENTORIES (Tables) |
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Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory |
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PROPERTY AND EQUIPMENT, NET (Tables) |
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Schedule of Property and Equipment |
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SHAREHOLDERS' EQUITY (Tables) |
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Schedule of Stock Option Activity |
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Share-Based Payment Arrangement, Option, Exercise Price Range [Table Text Block] |
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OTHER COMPREHENSIVE INCOME (LOSS) (Tables) |
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Comperhensive Income Tables Abstract | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Loss |
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CUSTOMERS, GEOGRAPHIC AND SEGMENT INFORMATION (Tables) |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Data for Reportable Operating Segments |
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Schedule of Revenue by Geographic Area |
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Schedule of Revenue from Major Customers |
*) Less than 10%
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EARNINGS PER SHARE (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Computation of Basic and Diluted Earnings (Loss) Per Share |
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SUPPLEMENTARY CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS INFORMATION (Tables) |
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Schedule of Other Current Assets |
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Schedule of Other Current Liabilities |
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Schedule of Line of Credit Facilities |
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Schedule of Long-Term Loan |
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Schedule of Other Long-Term Liabilities |
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OTHER OPERATING INCOME, NET (Tables) |
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Other Income and Expenses [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Operating Income |
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FAIR VALUE MEASURMENTS (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value Measurements Input |
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Schedule of Fair Value Measured On Recurring Basis |
|
GENERAL (Narrative) (Details) - USD ($) $ in Thousands |
Mar. 08, 2023 |
Jun. 17, 2024 |
---|---|---|
Datapath Inc [Member] | ||
General [Line Items] | ||
Percentage of shares acquire | 100.00% | |
Estimated purchase price consideration | $ 19,231 | |
Stellar Blu Solutions LLC [Member] | ||
General [Line Items] | ||
Percentage of shares acquire | 100.00% |
INVENTORIES (Narrative) (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Inventory Disclosure [Abstract] | ||
Inventory write-offs | $ 1,113 | $ 1,455 |
INVENTORIES (Schedule of Inventory) (Details) - USD ($) $ in Thousands |
Jun. 30, 2024 |
Dec. 31, 2023 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials, parts and supplies | $ 14,991 | $ 11,993 |
Work in progress and assembled raw materials | 8,763 | 9,392 |
Finished products | 13,020 | 17,140 |
Inventory, Net | $ 36,774 | $ 38,525 |
PROPERTY AND EQUIPMENT, NET (Narrative) (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Property, Plant and Equipment [Abstract] | ||
Depreciation expenses | $ 5,393 | $ 6,122 |
Gross income from lease | $ 2,649 | $ 2,790 |
PROPERTY AND EQUIPMENT, NET (Schedule of Property and Equipment) (Details) - USD ($) $ in Thousands |
Jun. 30, 2024 |
Dec. 31, 2023 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 195,771 | $ 194,701 |
Accumulated depreciation | 124,603 | 120,386 |
Depreciated cost | 71,168 | 74,315 |
Buildings and land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 83,796 | 83,775 |
Computers, software and electronic equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 65,508 | 64,262 |
Network equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 39,230 | 39,473 |
Office furniture and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 4,102 | 4,108 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 299 | 299 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,836 | $ 2,784 |
DEFERRED REVENUES (Narrative) (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Dec. 31, 2023 |
|
Deferred revenue | $ 11,969 | $ 15,700 | |
Revenue | 152,709 | $ 126,551 | |
Unsatisfied performance obligations | $ 305,662 | ||
Minimum [Member] | |||
Expected to be recognized over periods performance obligations | 5 years | ||
Maximum [Member] | |||
Expected to be recognized over periods performance obligations | 11 years | ||
Recognized over time for service [Member] | |||
Revenue | $ 5,373 |
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($) $ in Thousands |
1 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2018 |
Jun. 30, 2023 |
Dec. 31, 2023 |
Jun. 30, 2024 |
|
Guarantor Obligations [Line Items] | |||||
Amount of claim, including interest, penalties and legal fees | $ 6,895 | ||||
Principle amount of claim | 727 | ||||
Aggregate amount of guarantees | 78,300 | ||||
Restricted cash collateral | 1,070 | ||||
Collection of first payment for arbitration-award | $ 3,213 | ||||
Legal success fees | $ 251 | ||||
Peru [Member] | |||||
Guarantor Obligations [Line Items] | |||||
Aggregate amount of guarantees | $ 73,700 | ||||
Arbitration award amount | $ 15,000 | $ 13,500 |
DERIVATIVE INSTRUMENTS (Narrative) (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Dec. 31, 2023 |
|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Income loss recognized in income related to the effective portion of its hedging instruments | $ 138 | $ 1,224 | |
Fair value of derivative instruments | 143 | $ 680 | |
Derivative notional amount | 23,970 | $ 24,267 | |
Estimated existing losses expected to be reclassified to income (loss) | $ 143 |
SHAREHOLDERS' EQUITY (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands |
6 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Dec. 31, 2010 |
Oct. 31, 2008 |
|
Employee [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted-average grant-date fair value of options granted | $ 2.22 | $ 2.43 | ||
Intrinsic value of options exercised | $ 6 | |||
Two Thousand Eight Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total number of shares authorized | 10,466,761 | |||
Shares available for grant | 82,875 | 11,466,761 | 1,000,000 |
SHAREHOLDERS' EQUITY (Schedule of Assumptions Used to Estimate Fair Value) (Details) - Employee [Member] |
6 Months Ended | |
---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dividend yields | 0.00% | 0.00% |
Expected term (in years) | 3 years 9 months 29 days | |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk free interest | 4.35% | 3.57% |
Volatility | 47.90% | 52.77% |
Expected term (in years) | 3 years 10 months 17 days | |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk free interest | 4.56% | 4.08% |
Volatility | 49.00% | 53.71% |
Expected term (in years) | 3 years 11 months 1 day |
SHAREHOLDERS' EQUITY (Schedule of Stock Option Activity) (Details) - Employee and director [Member] - USD ($) $ / shares in Units, $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Number of options | ||
Outstanding at January 1, 2024 | 5,679,775 | |
Granted | 280,000 | |
Exercised | (76,875) | |
Forfeited and cancelled | (337,875) | |
Outstanding as of June 30, 2024 | 5,545,025 | |
Exercisable as of June 30, 2024 | 2,219,608 | |
Weighted-average exercise price | ||
Outstanding at January 1, 2024 | $ 6.9 | |
Granted | 5.8 | |
Exercised | 6.4 | |
Forfeited and cancelled | 10.5 | |
Outstanding as of June 30, 2024 | 6.7 | |
Exercisable as of June 30, 2024 | $ 7 | |
Weighted-average remaining contractual term (in years) | ||
Outstanding at End | 4 years | 4 years 2 months 12 days |
Exercisable as of June 30, 2024 | 3 years 1 month 6 days | |
Aggregate intrinsic value | ||
Outstanding at January 1, 2024 | $ 817 | |
Outstanding as of June 30, 2024 | 0 | |
Exercisable as of June 30, 2024 | $ 6 |
SHAREHOLDERS' EQUITY (Schedule of Stock-Based Compensation Expenses) (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expenses | $ 3,888 | $ 1,114 |
Cost of revenues of products [Member] | ||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expenses | 136 | 76 |
Cost of revenues of services [Member] | ||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expenses | 164 | 94 |
Research and development, net [Member] | ||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expenses | 356 | 312 |
Selling and marketing [Member] | ||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expenses | 305 | 163 |
General and administrative [Member] | ||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expenses | $ 2,927 | $ 469 |
OTHER COMPREHENSIVE INCOME (LOSS) (Schedule of Accumulated Other Comprehensive Loss, Net) (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | $ (5,315) | |
Other comprehensive loss before reclassifications | (1,266) | |
Amounts reclassified from accumulated other comprehensive income | 138 | |
Net current-period other comprehensive loss | (1,128) | $ (108) |
Ending balance | (6,443) | |
Foreign currency translation adjustments [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | (5,995) | |
Other comprehensive loss before reclassifications | (591) | |
Amounts reclassified from accumulated other comprehensive income | 0 | |
Net current-period other comprehensive loss | (591) | |
Ending balance | (6,586) | |
Unrealized losses on cash flow hedges [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | 680 | |
Other comprehensive loss before reclassifications | (675) | |
Amounts reclassified from accumulated other comprehensive income | 138 | |
Net current-period other comprehensive loss | (537) | |
Ending balance | $ 143 |
CUSTOMERS, GEOGRAPHIC AND SEGMENT INFORMATION (Schedule of Financial Data for Reportable Operating Segments) (Details) - USD ($) $ in Thousands |
6 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 152,709 | $ 126,551 | ||
Operating income (loss) | 8,182 | 12,462 | ||
Financial expenses, net | 779 | (735) | ||
Income before taxes on income | 8,961 | 11,727 | ||
Taxes on income | (2,695) | (1,822) | ||
Net income | 6,266 | 9,905 | ||
Depreciation and amortization Expenses | 7,333 | 6,222 | ||
Satellite Networks [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 97,378 | 74,273 | ||
Operating income (loss) | 8,459 | 11,206 | ||
Depreciation and amortization Expenses | 4,817 | 2,706 | ||
Integrated Solutions [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 24,619 | 25,619 | ||
Operating income (loss) | (1,906) | (1,457) | ||
Depreciation and amortization Expenses | 1,419 | 1,622 | ||
Network Infrastructure and Services [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | [1] | 30,712 | 26,659 | |
Operating income (loss) | [1] | 1,629 | 2,713 | |
Depreciation and amortization Expenses | 1,097 | 1,894 | ||
Revenues from construction performance obligations | $ 11,059 | $ 5,558 | ||
|
CUSTOMERS, GEOGRAPHIC AND SEGMENT INFORMATION (Schedule of Revenue by geographic areas) (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenues | $ 152,709 | $ 126,551 |
US [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenues | 61,672 | 55,582 |
Peru [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenues | 30,740 | 26,766 |
Israel [Member | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenues | 8,000 | 1,793 |
Other [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenues | $ 52,297 | $ 42,410 |
CUSTOMERS, GEOGRAPHIC AND SEGMENT INFORMATION (Schedule of Revenue from Major Customers) (Details) - Sales Revenue, Net [Member] - Customer Concentration Risk [Member] |
6 Months Ended | |||||
---|---|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|||||
Customer A – Network Infrastructure and Services [Member] | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Concentration risk percentage | 17.00% | 15.00% | ||||
Customer B – Satellite Networks [Member] | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Concentration risk percentage | 13.00% | [1] | ||||
Customer C – Satellite Networks [Member] | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Concentration risk percentage | [1] | 20.00% | ||||
|
INCOME TAXES (Narrative) (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Income Tax Disclosure [Abstract] | ||
Income tax expense | $ 2,695 | $ 1,822 |
EARNINGS PER SHARE (Narrative) (Details) - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Outstanding options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted earnings (losses) per share | 5,545,025 | 3,821,128 |
EARNINGS PER SHARE (Schedule of computation of basic and diluted earnings (loss) per share) (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Numerator for basic and diluted earnings (losses) per share - | ||
Net income available to holders of ordinary shares | $ 6,266 | $ 9,905 |
Denominator for basic diluted earnings (losses) per share - | ||
Weighted average number of shares | 57,016,808 | 56,615,714 |
Add - stock options | 0 | 6,490 |
Denominator for diluted earnings per share - adjusted weighted average shares assuming exercise of stock options | 57,016,808 | 56,622,204 |
SUPPLEMENTARY CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS INFORMATION (schedule of other current assets) (Details) - USD ($) $ in Thousands |
6 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2024 |
Dec. 31, 2023 |
|||
SUPPLEMENTARY BALANCE SHEET INFORMATION [Abstract] | ||||
Governmental authorities | [1] | $ 3,512 | $ 3,186 | |
Prepaid expenses | 6,509 | 6,227 | ||
Deferred charges | 4,153 | 8,320 | ||
Advance payments to suppliers | 3,054 | 3,716 | ||
Other | 2,788 | 2,850 | ||
Total other current assets | 20,016 | $ 24,299 | ||
Amount Receivable From United States Government Related To Cares Act | $ 952 | |||
|
SUPPLEMENTARY CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS INFORMATION (schedule of other current liabilities) (Details) - USD ($) $ in Thousands |
Jun. 30, 2024 |
Dec. 31, 2023 |
---|---|---|
SUPPLEMENTARY BALANCE SHEET INFORMATION [Abstract] | ||
Payroll and related employee accruals | $ 14,374 | $ 14,017 |
Governmental authorities | 1,842 | 2,301 |
Holdback Amount | 582 | 0 |
Deferred rent | 1,128 | 0 |
Other | 153 | 113 |
Total other current liabilities | $ 18,079 | $ 16,431 |
SUPPLEMENTARY CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS INFORMATION - (schedule of credit facility) (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2024
USD ($)
| |
SUPPLEMENTARY BALANCE SHEET INFORMATION [Abstract] | |
Credit facility from bank Interest rate | U.S. Prime Plus 2.25 |
Credit facility from bank: maturity | 2024 |
Credit facility | $ 0 |
SUPPLEMENTARY CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS INFORMATION - (schedule of long-term loan) (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2024
USD ($)
| |
SUPPLEMENTARY BALANCE SHEET INFORMATION [Abstract] | |
Other loan Interest rate | 14.00% |
Other loan maturity | 2026 |
Other loan | $ 2,000 |
SUPPLEMENTARY CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS INFORMATION-term liabilities) (Details) - USD ($) $ in Thousands |
Jun. 30, 2024 |
Dec. 31, 2023 |
---|---|---|
SUPPLEMENTARY BALANCE SHEET INFORMATION [Abstract] | ||
Earn-Out Consideration, Holdback Amount and Bonus Amount | $ 9,441 | $ 11,982 |
Other | 700 | 934 |
Total other long-term liabilities | $ 10,141 | $ 12,916 |
OTHER OPERATING INCOME, NET (Schedule of other operating income) (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Other Income and Expenses [Abstract] | ||
Mergers and acquisitions related expenses | $ 2,274 | $ 622 |
Income from arbitrations, net | (748) | (2,962) |
Others, net | (2,251) | 0 |
Operating Income (Loss), Total | $ (725) | $ (2,340) |
BUSINESS COMBINATION (Narrative) (Details) - USD ($) $ in Thousands |
1 Months Ended | 6 Months Ended | 12 Months Ended |
---|---|---|---|
Nov. 30, 2023 |
Jun. 30, 2024 |
Dec. 31, 2023 |
|
Business Acquisition [Line Items] | |||
Service Based Earn-Out and the Bonus Amount | $ 2,166 | ||
DPI [Member] | |||
Business Acquisition [Line Items] | |||
Price consideration | $ 19,231 | ||
Value of ordinary shares issued | 2,461 | ||
Deferred payment in ordinary shares | 820 | ||
Cash paid to partially settle DPI's outstanding debt and transaction costs | 4,787 | ||
Contingent earn-out payments | $ 11,163 | ||
Ordinary shares issued | 2,419,755 | 705,245 | |
One time bonus receivable | $ 9,000 | ||
Service Based Earn-Out and the Bonus Amount | 2,166 | ||
Unrecognized compensation cost related to the Service Based Earn | 8,206 | ||
DPI [Member] | Minimum [Member] | |||
Business Acquisition [Line Items] | |||
Amended bonus amount | 2,000 | ||
DPI [Member] | Maximum [Member] | |||
Business Acquisition [Line Items] | |||
Amended bonus amount | $ 9,000 |
FAIR VALUE MEASURMENTS (Narrative) (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revaluation of the convertible debt income (loss) | $ 0 | $ 1,396 |
Minimum [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Margin range | (4.20%) | |
Revenue growth rate | (15.20%) | |
Maximum [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Margin range | (16.90%) | |
Revenue growth rate | (28.30%) |
FAIR VALUE MEASURMENTS (Schedule of Fair Value Measurements Input) (Details) - USD ($) $ in Thousands |
Jun. 30, 2024 |
Dec. 31, 2023 |
---|---|---|
Assets: | ||
Derivative assets | $ 143 | $ 680 |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Derivative assets | Derivative assets |
Total financial assets | $ 143 | $ 680 |
Liabilities: | ||
Holdback Amount | 582 | 795 |
Earn-Out Consideration | 8,123 | 10,826 |
Total financial liabilities | 8,705 | 11,621 |
Fair Value, Inputs, Level 1 [Member] | ||
Assets: | ||
Derivative assets | 0 | 0 |
Total financial assets | 0 | 0 |
Liabilities: | ||
Holdback Amount | 582 | 795 |
Earn-Out Consideration | 0 | 0 |
Total financial liabilities | 582 | 795 |
Fair Value, Inputs, Level 2 [Member] | ||
Assets: | ||
Derivative assets | 143 | 680 |
Total financial assets | 143 | 680 |
Liabilities: | ||
Holdback Amount | 0 | 0 |
Earn-Out Consideration | 0 | 0 |
Total financial liabilities | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Assets: | ||
Derivative assets | 0 | 0 |
Total financial assets | 0 | 0 |
Liabilities: | ||
Holdback Amount | 0 | 0 |
Earn-Out Consideration | 8,123 | 10,826 |
Total financial liabilities | $ 8,123 | $ 10,826 |
FAIR VALUE MEASURMENTS (Schedule of Fair Value Measured On Recurring Basis) (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2024
USD ($)
| |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair value at the beginning of the year | $ 10,826 |
Fair value at the end of the year | 8,123 |
Fair Value, Inputs, Level 3 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair value at the beginning of the year | 10,826 |
Fair value at the end of the year | 8,123 |
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair value at the beginning of the year | 10,826 |
Income from changes in fair value | (2,703) |
Fair value at the end of the year | $ 8,123 |
1 Year Gilat Satellite Networks Chart |
1 Month Gilat Satellite Networks Chart |
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