SATX SatixFy Communications Ltd

SatixFy Communications Ltd. (“SatixFy”) (NYSE AMERICAN: SATX), a leader in next-generation satellite communication systems based on in-house developed chipsets, today announced its consolidated financial results for the first quarter of 2023.

Ido Gur, CEO of SatixFy, commented: “SatixFy’s first quarter results demonstrate that SatixFy is moving in the right direction. We have taken steps to reduce expenses while continuing our investment in R&D to maintain our edge and advance our satellite communication systems and chipsets. Our results demonstrate that we remain on track for revenue growth in 2023, with an associated improvement in the bottom line.”

First Quarter 2023 Results

Total revenues for the first quarter of 2023 were $2.4 million, an increase of 12% compared to $2.1 million in the first quarter of 2022. The vast majority of the revenues were from development services and pre-production.

Gross profit for the first quarter of 2023 was $1.0 million (at a gross margin of 41.0%), a 16% decline compared with $1.2 million (at a gross margin of 54.7%) in the first quarter of 2022. The decline in gross margin was attributed to the revenue mix, which favored a higher level of development services and preproduction that has a higher cost of services and sales.

Operating expenses declined to $7.0 million in the first quarter of 2023 from $7.6 million in the first quarter of 2022, reflecting a steady level of research and development (R&D) expenses, a $0.3 million increase in selling and marketing expenses, and a $1.0 million decrease in general and administrative (G&A) expenses, reflecting the impact in the first quarter of 2022 of a $2.0 million special management bonus, partially offset by public company costs following our business combination with Endurance Acquisition Corp. and listing on the NYSE in the first quarter of 2023.

Operating loss was $6.0 million in the first quarter of 2023, down from $6.4 million in the first quarter of 2022.

Finance expenses, net for the first quarter of 2023 were $26.3 million, reflecting expense of $43.7 million derived from the valuation of the Forward Purchase Agreement, based on a decrease in the market price of the Company’s ordinary shares, partially offset by $19.6 million in finance income derived from the valuation of Price Adjustment Shares, based on the same reason.

Net loss on an IFRS basis for the first quarter of 2023 was $32.4 million, or $0.40 per basic and diluted share, compared with a net loss of $10.0 million, or $0.52 per basic and diluted share, in the first quarter of 2022.

Adjusted net loss on a non-IFRS basis for the first quarter of 2023 was $6.1 million, or $0.08 per basic and diluted share compared with a non-IFRS adjusted net loss of $6.5 million, or $0.34 per basic and diluted share, in the first quarter of 2022.

Cash and cash equivalents as of March 31, 2023 totaled $14.1 million, compared to $11.9 million as of December 31, 2022.

About SatixFy

SatixFy develops end-to-end next-generation satellite communications systems, including satellite payloads, user terminals and modems, based on powerful chipsets that it develops in house.

SatixFy’s products include modems that feature Software Defined Radio (SDR) and Fully Electronically Steered Multi Beam Antennas (ESMA) that support the advanced communications standard DVB-S2X. SatixFy’s innovative ASICs improve the overall performance of satellite communications systems, reduce the weight and power requirements of terminals and payloads, and save real estate for gateway equipment. SatixFy’s advanced VSATs and multi-beam fully electronically steered antenna arrays are optimized for a variety of mobile applications and services, using LEO, MEO and GEO satellite communications systems, for aero/in-flight connectivity systems, communications-on-the-move applications, satellite-enabled Internet-of-Things, and consumer user terminals.

SatixFy is headquartered in Rehovot, Israel with additional offices in the U.S., U.K. and Bulgaria. For more information, please visit www.SatixFy.com.

Non-IFRS Financial Measures:

Non-IFRS adjusted net loss is defined as IFRS net loss after excluding depreciation and amortization and finance expenses, net (including the impact or revaluation of derivatives).

This non-IFRS measure is not a measure of the Company’s financial performance under IFRS and is presented for supplemental information purposes only and should be considered in addition to, and not as a substitute for, the comparable IFRS measures. The Company urges investors to treat this measure with caution and review the reconciliation of its non-IFRS financial measure to the most closely comparable IFRS measure included below together with the Company’s financial information presented in accordance with IFRS. The Company is providing non-IFRS adjusted net income because it believes it presents a better measure of the Company's core business activities, excluding certain non-cash and non-recurring items, and management uses this non-IFRS measure internally to evaluate the Company's ongoing performance. Accordingly, the Company believes they are useful to investors in enhancing an understanding of the Company's operating performance. However, the Company’s calculation and presentation of non-IFRS adjusted net income may differ materially from similar measures presented by other companies, including in the Company’s industry and in other industries.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements include information concerning possible or assumed future results of operations and descriptions of our business plan and strategies and may be identified by the use of words such as “estimate,” “plan,” “project,” “forecast,” “intend,” “will,” “expect,” “anticipate,” “believe,” “seek,” “target” or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of SatixFy’s management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. The forward-looking statements are subject to and involve risks, uncertainties and assumptions and you should not place undue reliance on these forward-looking statements. Important factors that could cause such differences include, but are not limited to, the matters described in our SEC filings and Annual Report on Form 20-F, in particular in the section “Risk Factors.” Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of SatixFy. Forward-looking statements set forth herein speak only as of the date of this press release. SatixFy has no obligation to revise forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs. In the event that any forward-looking statement is updated, no inference should be made that SatixFy will make additional updates with respect to that statement, related matters, or any other forward-looking statements. Any corrections or revisions and other important assumptions and factors that could cause actual results to differ materially from forward-looking statements, including discussions of significant risk factors, may appear in SatixFy’s public filings with the SEC, which are or will be (as appropriate) accessible at www.sec.gov, and which you are advised to consult.

SATIXFY COMMUNICATIONS LTD.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(in thousands of USD)

 

March 31,

March 31,

December 31,

2023

2022

2022

   

ASSETS:

CURRENT ASSETS:

Cash and cash equivalents

14,138

28,658

 

11,934

Trade accounts receivable

704

165

 

1,295

Contract assets

4,185

4,665

 

5,035

Prepaid expenses and other

4,738

2,689

 

3,648

Government departments and agencies receivables

5,471

3,431

 

6,156

Related parties

82

85

 

157

Derivatives FPA

531

-

 

12,775

Inventory

1,156

631

 

831

Total current assets

31,005

40,324

 

41,831

 

 

 

 

 

 

 

 

NON-CURRENT ASSETS:

 

 

 

 

Right-of-use assets, net

2,736

2,868

 

2,794

Property, plant and equipment, net

1,590

930

 

1,643

Investment in Jet Talk

1,665

2,029

 

1,777

Long term deposits

218

273

 

203

Derivatives FPA

 

-

 

-

 

28,077

Total non-current assets

 

6,209

 

6,100

 

34,494

 

 

 

 

 

 

 

TOTAL ASSETS

 

37,214

 

46,424

 

76,325

SATIXFY COMMUNICATIONS LTD.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(in thousands of USD)

 

March 31,

March 31,

December 31,

2023

2022

2022

 

LIABILITIES AND SHAREHOLDERS’ DEFICIT:

CURRENT LIABILITIES:

Trade payables

2,365

5,377

 

1,459

Contract liabilities

408

358

 

622

ESA advance payments

4,920

11,385

 

5,800

Prepayment from customer

12,686

11,156

 

12,176

Lease liabilities

1,021

985

 

1,021

Other accounts payable and accrued expenses

5,136

5,359

 

7,843

Related parties

381

517

 

408

Total current liabilities

26,917

35,137

 

29,329

 

 

 

 

NON-CURRENT LIABILITIES:

 

 

 

 

Long term loans from financial institutions

56,621

50,200

 

54,926

Lease liabilities

2,181

2,618

 

2,280

Derivatives instruments liabilities

728

1,392

 

20,305

Liability for royalties payable

1,153

1,423

 

1,107

Derivatives FPA

 

13,423

 

-

 

-

Total non-current liabilities

74,106

55,633

 

78,618

 

 

 

 

SHAREHOLDERS’ DEFICIT:

 

 

 

 

 

 

Share Capital

 

-

 

-

 

-

Share Premium

 

446,761

 

48,403

 

446,488

Capital reserves

 

3,445

 

1,056

 

3,498

Accumulated deficit

 

(514,015)

 

(93,805)

 

(481,608)

Total shareholders’ deficit

 

(63,809)

 

(44,346)

 

(31,622)

 

 

 

 

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT

 

37,214

 

46,424

 

76,325

SATIXFY COMMUNICATIONS LTD.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands of USD)

 

Three months ended

March 31,

2023

2022

Revenues:

Development services and preproduction

2,387

1,840

Sale of products

-

297

Total revenues

2,387

2,137

 

 

 

Cost of sales and services:

 

 

Development services and preproduction

1,408

832

Sale of products

-

137

Total cost of sales and services

1,408

969

 

 

 

Gross profit

979

1,168

 

 

 

 

 

Research and development expenses, net

4,184

4,159

Selling and marketing expenses

780

483

General and administrative expenses

2,018

2,956

Loss from operations

6,003

6,430

 

 

 

Finance income

 

2

 

54

Finance expenses

 

(2,154)

 

(3,498)

Derivatives revaluation

 

(24,141)

 

-

Company's share in the loss of a company accounted by equity method, net

 

(111)

 

(108)

Loss before income taxes

 

(32,407)

 

(9,982)

Income taxes

 

-

 

-

Loss for the period

 

(32,407)

 

(9,982)

 

 

 

 

 

Other comprehensive income (loss) net of tax:

 

 

 

 

Items that will or may be reclassified to profit or loss:

 

 

 

 

Exchange gain (loss) arising on translation of foreign operations

 

(53)

 

827

Total comprehensive loss for the period

 

(32,460)

 

(9,155)

 

 

 

 

 

Basic and diluted loss per share (in dollars)

 

(0.40)

 

(0.52)

Basic and diluted weighted average ordinary shares outstanding

 

80,684

 

19,260

SATIXFY COMMUNICATIONS LTD.

UNAUDITED INTERIM CONDENSED statements of cash flows

(in thousands of USD)

 

Three months ended

March 31,

2023

2022

Cash flows from operating activities:

 

Loss for the year

(32,407)

(9,982)

Adjustments to reconcile net profit to net cash provided by operating activities:

 

Depreciation and amortization

293

346

Company's share in the loss of a company accounted by equity method, net

113

108

Finance expenses on loans

1,027

1,222

Change in the fair value of derivatives

24,141

-

Share based payments

246

158

Decrease (Increase) in trade accounts receivable

613

649

Decrease (Increase) in contract assets

958

1,242

Increase in inventory

(325)

54

Increase (Decrease) in other current assets

(181)

(2,852)

Increase in trade payables

871

(3,162)

Increase in ESA prepayments

(1,014)

(3,205)

Increase in other accounts payable and accrued expenses

(2,992)

(2,907)

Increase in prepayments from customers

241

 

9,652

Increase (decrease) in liability for royalties payable

47

103

Net cash used in operating activities

(8,369)

(8,574)

 

 

 

 

Cash flows from investing activities

 

 

 

Decrease (Increase) in long-term bank deposit

(19)

 

(2)

Net cash used in investing activities

(19)

 

(2)

 

 

 

 

Cash flows from financing activities

 

 

 

Receipt of long-term loans from a financial institution

1,424

 

52,837

Repayment of loan to shareholder

-

 

(5,000)

Repayment of loans from banks

-

 

(13,818)

Repayment of royalty liability

-

 

(48)

Payments of lease liabilities

(1,029)

 

(402)

Issuance of shares (FPA)

10,026

 

-

Option exercises to shares by employees

26

 

20

Net cash provided by financing activities

10,447

 

33,589

Increase (decrease) in cash and cash equivalents

2,059

 

25,013

Cash and cash equivalents balance at the beginning of the year

11,934

 

3,854

Effect of changes in foreign exchange rates on cash and cash equivalents

145

 

(209)

Cash and cash equivalents balance at the end of the year

14,138

 

28,658

 

 

 

 

Appendix A - Cash paid and received during the year for:

 

 

 

Interest paid

44

 

35

 

 

 

 

Appendix B - Non Cash transactions during the year for:

 

 

 

Issuance of shares against loan

-

 

1,978

SATIXFY COMMUNICATIONS LTD.

RECONCILIATION OF NON-IFRS ADJUSTED NET LOSS TO IFRS NET LOSS

(in thousands of USD)

 

Three months ended

March 31,

2023

2022

 

IFRS Net Loss

 

(32,407)

 

(9,982)

Depreciation and amortization

 

58

 

44

Finance Expenses, net

26,293

 

3,444

Non-IFRS Adjusted Net Loss(1)

 

(6,056)

 

(6,494)

 

 

 

 

 

IFRS Basic and diluted loss per share

 

(0.40)

 

(0.52)

Non-IFRS Adjusted Basic and diluted loss per share

 

(0.08)

 

(0.34)

Basic and diluted weighted average ordinary shares outstanding

 

80,684

 

19,260

 

(1) The Company did not record income tax benefit or expense in the periods and the adjustments above had no income tax effect.

SAT-FIN

View source version on businesswire.com: https://www.businesswire.com/news/home/20230526005011/en/

Media Contacts: Helena Itzhak, SatixFy, info@satixfy.com

Investor Contacts: Ehud Helft, EK Global IR, satixfy@ekglobal.com