After the leap: The Pimi Fund and Mivtach Shamir are realizing $ 75 million in Gilat – the capital market

In the Phimie Foundation and in

Mivtach Shamir
-1.78%

Base:10,650

opening:10,650

High:10,910

low:10,190

change:1,218,041

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, Understand that the value reached by the satellite network company

Gilat
-8.83%

Base:5,200

opening:4,903

High:4,974

low:4,600

change:10,440,055

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It is too inflated (as we have explained here in detail). Phimie, the largest stakeholder in the company, took advantage of the surge in Gilat’s share in the last six months (an increase of about 230%) and especially since the beginning of the year (an increase of 150%) and sold about 7% of its holdings in Gilat for about $ 60 million at a profit of about 249 %. This is a profit of about $ 12 per share, or $ 41 million in total.

Following the transaction, the Pimi Fund is declining from a holding of approximately 33.8% in Gilat to a holding of approximately 26.8% in the company, but even now it continues to have a major stake in Gilat. Phimie sold about 3.9 million shares to US institutional investors at a price of $ 15 per share and received about $ 58.5 million in return.

Updated to 14:20
Mivtach Shamir also announces that it sold about 20% of its holdings in Gilat, or 1.1 million shares, for $ 15 per share, which is $ 16.5 million. Mivtach Shamir continues to hold about 7.7% of Gilat’s shares. As a result of the sale, Mivtach Shamir will post a profit of NIS 30 million (before tax).

At the beginning of January, Gilat distributed a dividend of $ 35 million, which was added to a previous dividend of about $ 20 million. Since the beginning of the year, Gilat has won several contracts worth tens of millions of dollars.

Good company but the value is not justified
As we wrote, Gilat is a good company but the value is not justified. Just less than a year ago, Gilat’s purchase deal worth a third of the current price was canceled – because the buyer was afraid of the Korna crisis. So what happened in Gilat? is nothing. What happened in the market is very simple – investors discovered it when the top investors were Kathy Wood’s ARK fund management company, which marked Gilat as one of the most promising companies in the satellite field and at the same time acquired shares from the satellite funds (and other funds).

Gilat published very lukewarm reports for the last quarter and for the entire year. Given the situation, they are predictable, but these reports do not really explain the value of Gilat, which reported a fall in revenue to $ 42.6 million compared to $ 78.3 million in the fourth quarter of 2019. However, this is an improvement over third quarter 2020 revenue of $ 37.3 million.

GAAP-based operating income was $ 62.7 million, but is upward, compared to $ 9.2 million in the fourth quarter of 2019 and compared to an operating loss of $ 10.9 million in the third quarter of 2020; GAAP-based operating income includes net income less expenses related to the $ 64.8 million settlement with Comtech.
The non-GAAP operating loss in the fourth quarter of 2020 was $ 1.6 million compared to an operating profit of $ 9.9 million in the fourth quarter of 2019, an improvement over an operating loss of $ 1.9 million in the previous quarter.

The net loss on a non-GAAP basis in the fourth quarter of 2020 was $ 1.9 million, or a loss of 3 cents per fully diluted share, compared to net income of $ 9.1 million, or a gain of 16 cents per full diluted share in the fourth quarter of 2019, And an improvement over the $ 2.6 million net loss, or 5 cents loss per share, as reported in the previous quarter.

In the fourth quarter of 2020, adjusted EBITDA amounted to $ 1.1 million, compared to adjusted EBITDA of $ 13.1 million in the fourth quarter of 2019; And an improvement compared to adjusted EBITDA of $ 600,000 in the previous quarter. The company received $ 70 million from Comtech following the cancellation of the merger.

During the quarter, a $ 20 million cash dividend was paid to shareholders; An additional $ 35 million in cash dividend was also paid during the quarter which was paid in January 2021.

Weak 2020 year – what is expected next?
Revenue for 2020 was $ 165.9 million compared to $ 263.5 million in 2019. Non-GAAP operating loss for 2020 was $ 13.7 million compared to non-GAAP operating profit of $ 29.2 million in 2019. Net loss based on Non-GAAP in 2020 totaled $ 16.4 million or a loss of 30 cents per fully diluted share compared to net income on a non-GAAP basis of $ 24.7 million or a gain of 44 cents per fully diluted share in 2019.

The loss on an adjusted EBITDA basis amounted to $ 3.3 million, compared to a profit on an adjusted EBITDA basis of $ 40.2 million in 2019.