RADA Electronic Industries Announces Q2 2018 Results:

24% growth in revenue with strong order momentum and backlog growth

Expects revenues of approximately $27m for FY 2018

 

Investor conference call to be held today at 10am ET   Netanya, Israel, August 15, 2018 – RADA Electronic Industries Ltd. (NASDAQ: RADA) announced today its financial results for the quarter ended June 30, 2018. Management Comments

Dov Sella, RADA's Chief Executive Officer commented, “We are very pleased with our financial performance, especially our growth in revenues and our strongly broadening pipeline of potential orders. Furthermore, the investments we have made in our newly established presence in the United States are enabling us to make some significant strategic progress and has led to increased traction for our radars in the region. We expect our presence will lead to strong growth in orders in the coming quarters.”

Continued Mr. Sella, “For the year 2018, we expect revenues of around $27 million, ahead of last year’s revenue, which itself was one of the strongest years ever for RADA. While last year’s significant step up in revenue was built on the back of one specific order in the second half of the year, in 2018 it is made up of orders from a diverse range of customers. Some of these are initial radar orders from new customers with the possibility of follow-on orders at a ten-fold potential. As we move through 2018, I am increasingly excited with regard to our future and I am very happy that RADA is beginning to realize its large inherent potential“, concluded Mr. Sella.

2018 Second Quarter Summary 

Revenues totaled $6.6 million in the second quarter of 2018, up 24% compared to revenues of $5.3 million in the second quarter of 2017.

Gross Profit totaled $2.4 million in the second quarter of 2018 (gross margin of 36.2%) compared to gross profit of $1.7 million (gross margin of 31.3%) in the second quarter of 2017. Operating income was $104 thousand in the second quarter of 2018 compared to an operating income of $511 thousand in the second quarter of 2017. Operating expenses increased in the quarter to $2.3 million from $1.2 million in the second quarter of last year, primarily due to increased investment in R&D and SG&A, due to RADA’s recently established presence in the United States.  Net income attributable to RADA’s shareholders in the second quarter of 2018 was $51 thousand, compared with net income of $495 thousand in the second quarter of 2017. EBITDA was $546 thousand in the second quarter of 2018 compared to EBITDA of $838 thousand in the second quarter of 2017. In terms of liquidity and capital resources, as of June 30, 2018, the Company had cash and cash equivalents, of $15.6 million or $0.47 per share, compared with $12.4 million or $0.40 per share as of December 31, 2017. As of June 30, 2018, the Company did not have any financial liabilities. Cash flow from operations for the quarter was a positive $2.5 million, mainly due to strong collections from customers. Investor Conference Call The Company will host a conference call later today, starting at 10:00 am ET (5pm Israel time). Dov Sella, Chief Executive Officer and Avi Israel, Chief Financial Officer, will host the call and will be available to answer questions after presenting the results. Dial in numbers are: US 1-888-668-9141; UK 0800-917-5108; Israel 03-918-0609 and International +972-3-918-0609.  

     
     
     
     

For those unable to participate, the teleconference will be available for replay on RADA’s website at http://www.rada.com beginning 48 hours after the call.About RADA Electronic Industries Ltd.

RADA Electronic Industries Ltd. is an Israel-based defense electronics company. The Company specializes in the development, production, and sales of tactical land radar for force and border protection, and avionics systems (including inertial navigation systems) for fighters and UAVs. 

Note: Certain statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. Such risk uncertainties and other factors include, but are not limited to, changes in general economic conditions, risks in product and technology developments, market acceptance of new products and continuing product demand, level of competition and other factors described in the Company's Annual Report on Form 20-F and other filings with the Securities and Exchange Commission.

 

Company Contact:    

Avi Israel - CFO           

RADA Electronic Industries Ltd.

Tel: +972-9-8921111

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Investor Relations Contact:

Ehud Helft/Gavriel Frohwein

GK Investor & Public Relations

Tel: +1 646 688 3559

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Forward Looking Statements  

Certain statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. Such risk uncertainties and other factors include, but are not limited to, changes in general economic conditions, risks in product and technology developments, market acceptance of new products and continuing product demand, level of competition and other factors described in the Company's Annual Report on Form 20-F and other filings with the Securities and Exchange Commission.

Information with Regard to non-GAAP Financial Measures

The Company presents its financial statements in accordance with U.S. GAAP. RADA’s management uses supplemental non-GAAP financial measures internally to understand, manage and evaluate its business and make operating decisions. EBITDA is provided in this press release and the accompanying supplemental information because management believes this non-GAAP measure is useful for investors and financial institutions as it facilitates operating performance comparisons from period to period. As presented in this release, the term EBITDA consists of net profit (loss) according to U.S. GAAP, excluding net financing expenses, taxes, depreciation and amortization and ESOP expenses. EBITDA should not be considered in isolation or as a substitute for net profit (loss) or other statement of operations data prepared in accordance with GAAP as a measure of profitability. Reconciliation between the Company's results on a GAAP and non-GAAP basis is provided in the table below. 

RECONCILIATION FROM GAAP TO NON-GAAP RESULTS

 

Three months ended

June 30,

 

2018

2017

     

Operating Income

104

511

Depreciation

174

157

Employees Option Compensation

268

  42

Other non-cash amortization

---

128

     

EBITDA

546

838

     

 

CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands, except share and per share data

ASSETS

 

June 30, 2018

 

December 31, 2017

   

Unaudited

 

Audited

CURRENT ASSETS:

       

Cash and cash equivalents

 

$     15,558

 

$    12,417

Restricted cash

 

   422       

 

   322

Trade receivables (net of allowance for doubtful accounts of $2 at June 30, 2018 and $14 at December 31, 2017)

 

5,051

 

7,286

Costs and estimated earnings in excess of billings on uncompleted contracts

 

757

 

   995

Other receivables and prepaid expenses

 

491

 

   330

Inventories

 

7,037

 

7,910

Current assets related to discontinued operations

 

2,130

 

2,468

         

Total current assets

 

31,446

 

31,728

         

LONG-TERM ASSETS:

       

Long-term receivables and other deposits

 

72

 

68

Property, plant and equipment, net

 

4,232

 

3,915

Long-term assets related to discontinued operations

 

281

 

319

Total long term assets

 

4,585

 

4,302

         

Total assets

 

$     36,031

 

$     36,030

         

LIABILITIES AND SHAREHOLDERS' EQUITY

       

 

       

CURRENT LIABILITIES:

       

Trade payables

 

$      2,227

 

$      2,904

Other accounts payable and accrued expenses

 

2,276

 

2,814

Advances from customers, net

 

116

 

41

Current liabilities related to discontinued operations

 

  411

 

328

         

Total current liabilities

 

5,030

 

6,087

         

LONG-TERM LIABILITIES:

       

Accrued severance pay and other long-term liabilities

 

760

 

758

Total long-term liabilities

 

760

 

758

 

       

RADA SHAREHOLDERS' EQUITY

       

Share capital -

       

Ordinary shares of NIS 0.03 par value - Authorized: 100,000,000 shares at June 30, 2018 and 37,500,000 at December 31, 2017; Issued and outstanding: 32,895,576 at June 30, 2018 and 31,392,040 at December 31, 2017.

 

348

 

335

Additional paid-in capital

 

106,110

 

104,923

Accumulated other comprehensive income

 

105

 

392

Accumulated deficit

 

(76,854)

 

(77,124)

 

       

Total RADA shareholders’ equity

 

29,709

 

28,526

Non-controlling interest

 

532

 

659

 

Total equity

 

30,241

 

29,185

 

Total liabilities and equity

 

$     36,031

 

$     36,030

CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. dollars in thousands, except share and per share data

 

 

 

Six months ended
June 30,

 

 

 

Three months ended
June 30,

 

 

 

Year ended

December 31,

 

2018

2017

 

2018

2017

 

2017

 

(Unaudited)

Audited

               

Revenues

$  12,596

$  9,992

 

$  6,576

$  5,317

 

   $  26,182 

               

Cost of revenues

  8,037

    6,659

 

    4,196

    3,653

 

   17,919

               

Gross profit

 4,559

    3,333

 

   2,380

   1,664

 

    8,263

               

Operating expenses:

             

Research and development

 1,284

    406

 

      692

     208

 

     1,575

Marketing and selling

 1,284

    855

 

      650

     419

 

2,137

General and administrative

 1,682

  1,212

 

      934

     526

 

2,568

Total operating expenses:

 4,250

  2,473

 

   2,276

   1,153

 

6,280

Operating Income

   309

    860

 

     104

      511

 

1,983

Amortization of shareholders' convertible loans discount and beneficial conversion feature

      -

    19

 

        -

        8

 

103

Other financial expenses (income), net

     (3)

    (10)

 

       4

      30

 

53

Net income from continuing operations

     312

  851

 

    100

    473

 

    1,827

Net income (loss) from discontinued operations

     (97)

   40

 

    (88)

     28

 

515

Net income

     215

 891

 

    12

    501

 

2,342

Net income (loss) attributable to non-controlling interest

     (55)

    8

 

   (39)

      6

 

103

Net income attributable to RADA Electronic Industries' shareholders

  $   270

   $   883

 

$   51

   $   495

 

$ 2,239

Basic net income from continuing operations per ordinary shares

  $    0.01

  $   0.04

 

$ 0.00

$   0.02

 

$   0.07

Diluted net income  from continuing operations per Ordinary share

$    0.01

 $    0.04

 

$ 0.00

$   0.02

 

$   0.06

Basic and diluted net income from discontinued operations per ordinary share

$    0.00

 $    0.00

 

$ 0.00

$   0.00

 

$   0.02

               
               

Basic net income per ordinary share

 $    0.01

 $   0.04

 

$ 0.00

$   0.02

 

$   0.09

               

Diluted net income per ordinary share

 $    0.01

 $   0.04

 

$ 0.00

$   0.02

 

$   0.08

Weighted average number of ordinary shares used for computing basic net income per share

32,745,620

21,780,651

 

32,885,141

21,893,919

 

24,956,915

Weighted average number of ordinary shares used for computing diluted net income per share

33,269,376

21,780,651

 

33,314,361

21,893,919

   28,126,509