Record Q1 revenues of $15.1 million, up 73% year-over-year  

Netanya, Israel, May 19, 2020 – RADA Electronic Industries Ltd. (NASDAQ: RADA) announced today its financial results for the quarter ended March 31, 2020. Highlights of the first quarter of 2020·       Past and ongoing investments promoting strong growth, with quarterly revenues up 73% year-over-year to a record $15.1 million;·       Gross margin stability at 36%;·       Net income of $170,000 and positive Adjusted EBITDA of $863,000;·       US manufacturing facility ramping production;·       Quarter-end net cash position of $32.1 million.·       Reiterates 2020 revenues guidance of in excess of $65 million, with continued sequential revenue growth throughout the year. Management Comments

Dov Sella, RADA's Chief Executive Officer commented, “Given the very significant opportunities we identified in the emerging business of mini-tactical radars a few years ago, particularly in the United States, we took the decision to invest strongly in our business over the past two years so that we can tap into the potential and meet the demand. These investments have now stabilized and are bearing their fruits. As our ahead-of-schedule profitability and our 73% revenue growth in the first quarter of 2020 demonstrate, the potential is starting to be revealed, and I believe this is only the beginning. Our end-markets are gradually shifting to the serial production phase and we expect that in the coming months we will start to build backlog for deliveries in 2021 and beyond, especially in the US. Our US manufacturing facility is ISO-certified and deliveries to US customers have commenced.”

Concluded Mr. Sella, “Until now, we have not seen any adverse financial impact from the Corona pandemic on our business. While taking every effort to fully protect our workforce globally, our business is considered a critical defense enterprise and we are manufacturing at full operational capacity in both Israel and at our new US manufacturing facility. The steps we have taken to ensure full business continuity, including increasing our inventory of components, have been successful and while the evolution of the pandemic situation is unpredictable, RADA is fully prepared to maintain its deliveries to customers on-time and as-planned. With net cash of over $32 million and maturing end-markets with growing demand, RADA has never been in a stronger position.”  2020 First Quarter Summary 

Revenues totaled $15.1 million in the quarter, compared with revenues of $8.7 million in the first quarter of 2019, an increase of 73%.

Gross profit totaled $5.4 million in the quarter (36% of revenues), an increase of 71% compared to gross profit of $3.2 million in the first quarter of 2019 (36% of revenues).  Operating income was $46,000 in the quarter compared to an operating loss of $558,000 in the first quarter of 2019. Net income attributable to RADA’s shareholders in the quarter was $170,000, or $0.00 per share, compared to a net loss attributable to RADA’s shareholders of $485,000, or $(0.01) per share, in the first quarter of 2019.  Adjusted EBITDA was $863,000 in the quarter compared to adjusted EBITDA of ($26,000) in the first quarter of 2019

As of March 31, 2020, RADA had net cash and cash equivalents of $32.1 million compared to $13.8 million as of year-end 2019.

 Investor Conference Call

The Company will host a conference call later today, starting at 10:00 am ET (5pm Israel time). Management will host the call and will be available to answer questions after presenting the results.

To participate, please call one of the following telephone numbers a few minutes before the start of the call:

US:                                     1-888-668-9141                           at 10:00 am Eastern Time

UK:                                    0-800-917-5108                           at 3:00 pm UK Time

Israel:                               03-918-0609                                 at 5:00 pm Israel Time

International:                +972-3-918-0609

A live webcast of the conference call can be accessed from a link on the RADA website at https://www.rada.com/corp/corporate-ir.html.

 For those unable to participate, the teleconference will be available for replay at the above link on RADA’s website beginning a few hours after the call. 

 
About RADA Electronic Industries Ltd.

RADA is a global defense technology company focused on proprietary radar solutions and legacy avionics systems. The company is a leader in mini-tactical radars, serving attractive, high-growth markets, including critical infrastructure protection, border surveillance, active military protection and counter-drone applications.

 Contact Information

 

Company Contact:                                                                                                                                                                

Avi Israel (CFO)

Tel: +972-9-892-1111

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www.rada.com

Investor Relations Contact:

Ehud Helft

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. Adjusted 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 Adjusted EBITDA consists of net profit (loss) according to U.S. GAAP, excluding net financing expenses, taxes, depreciation and amortization and non-cash stock-based compensation expenses. Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure. Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including net income and our other GAAP results. 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

U.S. dollars in thousands

 

Three months ended

March 31,

 

      2020

     2019

     

Operating Income (loss)

$46

$(558)

Depreciation

473

259

Non-cash stock-based compensation expense

281

273

Other non-cash amortization

63

-

     

Adjusted EBITDA

$863

$(26)

     

CONSOLIDATED BALANCE SHEETS

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

ASSETS

 

March 31, 2020

 

December 31, 2019

 
   

Unaudited

 

Audited

 

CURRENT ASSETS:

         

Cash and cash equivalents

 

$       32,071

 

$      13,754

 

Restricted cash

 

       480

 

        380

 

Trade receivables

 

   17,518

 

   13,765

 

Contract assets

 

        1,114

 

     1,269  

 

Other receivables and prepaid expenses

 

     1,935

 

     1,673

 

Inventories

 

   19,987

 

    17,196

 
           

Total current assets

 

   73,105

 

    48,037

 
           

LONG-TERM ASSETS:

         

Long-term receivables and other deposits

 

         93

 

         97

 

Property, plant and equipment, net

 

   10,382

 

   9,127

 

Operating lease right-of-use asset

 

    7,764

 

   7,654

 

Total long-term assets

 

   18,239

 

  16,878

 
           

Total assets

 

$    91,344

 

$      64,915

 
           

LIABILITIES AND SHAREHOLDERS' EQUITY

         

 

         

CURRENT LIABILITIES:

         

Trade payables

 

     10,001  

 

  7,661

 

Other accounts payable and accrued expenses

 

  6,114

 

5,572

 

Advances from customers, net

 

     1,355

 

1,563

 

Contract liabilities

 

          21

 

196

 

Operating lease short-term liabilities

 

         1,401

 

1,240

 
           

Total current liabilities

 

     18,892

 

 16,232

 
           

LONG-TERM LIABILITIES:

         

Accrued severance pay and other long-term liabilities

 

        645

 

764

 

Operating lease long-term liabilities

 

     6,400

 

6,499

 

 Total long-term liabilities

 

7,045       

 

7,263

 

 

       

RADA SHAREHOLDERS' EQUITY

       

Share capital -

         

Ordinary shares of NIS 0.03 par value - Authorized: 100,000,000 shares at March 31, 2020 and December 31, 2019; Issued and outstanding: 43,388,870 at March 31, 2020 and 37,516,891 at December 31, 2019.

           

           436

 

394

 

Additional paid-in capital

 

     144,987

 

121,212

 

Accumulated other comprehensive income

 

       (1,195)

 

(1,195)

 

Accumulated deficit

 

(78,821)

 

(78,991)

 

Total equity

 

       65,407

 

41,420

 

 

 

Total liabilities and equity

 

$     91,344

 

$     64,915

 

CONSOLIDATED STATEMENTS OF OPERATIONS

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

 

 

Three months ended

March 31,

 

 

Year ended December 31,

 

2020

 

2019

 

 

2019

 

Unaudited

 

 

Audited

             

Revenues

  $   15,071

 

   $     8,687 

   

$   44,331

             

Cost of revenues

 9,692

 

5,534

   

28,394

             

Gross profit

       5,379

 

      3,153

   

15,937

             

Operating expenses:

           

   Research and development

  2,053

 

     1,366

   

6,912

   Marketing and selling

        1,160

 

882

   

4,044

   General and administrative

  2,120

 

1,463

   

7,084

             

Total operating expenses

       5,333

 

3,711

   

18,040

             

Operating income (loss)

           46

 

(558)

   

(2,103)

Financial (Expenses) income, net

         124

 

42

   

(121)

             

Net income (loss) from continuing operations

         170

 

(516)

   

(2,224)

Net income (loss) from discontinued operations

-

 

-

   

(115)

             

Net income (Loss)

$       170

 

$        (516)

   

    $  (2,339)

Net income (loss) attributable to non-controlling interest

              -

 

(31)         

   

(309)

Net income (loss) attributable to RADA Electronic Industries' shareholders

  $      170

 

  $      (485)

   

    $  (2,030)

Basic net income (loss) from continuing operations per Ordinary share

$     0.00

 

    $     (0.01)

   

    $    (0.05)

Diluted net income (loss) from continuing operations per Ordinary share

$     0.00

 

$     (0.01)

   

    $    (0.05)

Basic and diluted net income (loss) from discontinued operations per Ordinary share

$     0.00

 

$     (0.01)

   

    $    (0.05)

Basic and diluted net income (loss) per Ordinary share

$     0.00

 

$     (0.01)

   

    $    (0.05)

Weighted average number of Ordinary shares used for computing basic net income (loss) per share

 

42,679,754

 

37,966,987

 

     38,148,756

Weighted average number of Ordinary shares used for computing diluted net income (loss) per share

 

43,646,623

 

38,454,861

 

     38,841,866