RADA’s Q1 2021 Results: Continued Growth and Improved Profitability

Revenues of $25.2 million, Net income of $3.8 million & 19% of Adjusted EBITDA

Netanya, ISRAEL


NETANYA, Israel, May 11, 2021 (GLOBE NEWSWIRE) -- RADA Electronic Industries Ltd. (NASDAQ: RADA & TASE: RADA) announced today its financial results for the quarter ended March 31, 2021.

Highlights of the first quarter of 2021

  • Quarterly revenues up 67% year-over-year and an 8% increase from the previous quarter to $25.2 million
  • Gross margin improved to 40% compared with 36% in the year-ago quarter
  • Net income of $3.8 million compare with $0.2 million in the year-ago quarter
  • Adjusted EBIDTA of $4.8 million: Adjusted EBITDA margin improved to 19%, compared with 6% in the year-ago quarter and 17% in the previous quarter
  • Quarter-end net cash position of $96.2 million
  • Reiterates 2021 revenues guidance of over $120 million with continued sequential revenue growth throughout 2021.

Management Comments

Dov Sella, RADA's Chief Executive Officer commented, “We started 2021 on a positive note, delivering strong growth and improved profitability in line with our expectations. The positive trends in our markets continue to develop quickly, both in the US and more recently on a global basis. In particular, we see growing traction from European and Middle-Eastern markets, which are now materializing for us.“

Concluded Mr. Sella, “Given our solid execution and continued order momentum, our confidence has increased and we reiterate our expectation, that we will exceed revenues of $120 million in 2021, with sequential revenue growth throughout the year. This quarter’s profitability margins demonstrate the leverage in our model and we expect to maintain these levels going forward. As the current programs to which we are supplying our radars mature, with our satisfied customers continuing to order from us in larger quantities, combined with the expected orders from new customers, we anticipate that the growth trend will continue beyond 2021.”

2021 First Quarter Summary

Revenues totaled $25.2 million in the quarter compared with revenues of $15.1 million in the first quarter of 2020, an increase of 67%.

Gross profit totaled $10.0 million in the quarter (40% of revenues), an increase of 85% compared to gross profit of $5.4 million in the first quarter of 2020 (36% of revenues).

Operating income was $3.6 million in the quarter compared to operating income of $0.05 million in the first quarter of 2020.

Net income in the quarter was $3.8 million, or $0.08 per share, compared to net income of $0.2 million or $0.00 per share, in the first quarter of 2020.

Adjusted EBITDA was $4.8 million in the quarter compared to adjusted EBITDA of $0.9 million in the first quarter of 2020.

As of March 31, 2021, RADA had net cash and cash equivalents of $96.2 million compared to $35.8 million as of year-end 2020.

Investor Conference Call

The Company will host a conference call later today, starting at 9am ET (4pm 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: 1-888-723-3164 at 9:00 am Eastern Time
Israel: 03-918-0609 at 4:00 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/investors

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: +972-76-538-6200
mrkt@rada.com
www.rada.com

Investor Relations Contact:
Ehud Helft
GK Investor & Public Relations
Tel: +1 646 688 3559
rada@gkir.com

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,

  

       2021

   

2020

 
   

Net Income from continued operations

$

3,771

 


$

170

 

Financial income, net

 

(218

)

  

(124

)

Depreciation

 

756

   

473

 

Employee non-cash option compensation

 

472

   

281

 

Other non-cash amortization

 

8

   

63

 
   

Adjusted EBITDA

$

4,789

 


$

863

 
   


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

ASSETS

March 31,
2021

 

December 31,
2020

 

Unaudited

 

Audited

CURRENT ASSETS:

   

Cash and cash equivalents

$

        96,222

  

$

     36,289

 

Restricted deposits

 

        567

   

      567

 

    Trade receivables

 

    15,028

   

    14,095

 

Contract assets

 

353

   

    756

 

Other accounts receivables and prepaid expenses

 

1,441

   

   1,637

 

Inventories

 

    26,895

   

   28,783

 
    

Total current assets

 

   140,506

   

   82,127

 
    

LONG-TERM ASSETS:

   

Investment in subsidiary

 

3,000

   

-

 

Long-term receivables and other deposits

 

    220

   

    230

 

Property, plant and equipment, net

 

14,725

   

13,968

 

Operating lease right-of-use assets

 

11,206

   

10,581

 

Total long-term assets

 

   29,151

   

24,779

 
    

Total assets

$

169,657

  

$

             106,906

 
    

LIABILITIES AND SHAREHOLDERS' EQUITY

   
    

CURRENT LIABILITIES:

   

Short term loan

 

-

   

454

 

Trade payables

 

8,352

   

   10,603

 

Other accounts payable and accrued expenses

 

9,491

   

9,855

 

Advances from customers

 

      7,642

   

2,323

 

Contract liabilities

 

        157

   

232

 

Operating lease short-term liabilities

 

1,969

   

1,885

 
    

Total current liabilities

 

27,611

   

25,352

 
    

LONG-TERM LIABILITIES:

   

Accrued severance-pay and other long-term liabilities

 

        751

   

789

 

Operating lease long-term liabilities

 

9,117

   

8,732

 

Total long-term liabilities

 

9,868

   

9,521

 
    

RADA SHAREHOLDERS' EQUITY

   

Share capital -

   

Ordinary shares of NIS 0.03 par value - Authorized: 100,000,000 shares at March 31, 2021 and December 31, 2020; Issued and outstanding: 49,035,041 at March 31, 2021 and 43,724,446 at December 31, 2020 respectively.

 

     488

   

440

 

Additional paid-in capital

 

   201,270

   

144,944

 

Accumulated deficit

 

69,580)

)

  

(73,351

)

Total equity

 

   132,178

   

72,033

 

 

 

Total liabilities and equity

$

169,657

  

$

106,906

 
 


CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except share and per share data
 
 

Three months ended
March 31,

  

Year ended
December 31,

  

2021

  

2020

   

2020

 

Unaudited

  

Audited

       

Revenues

$

25,217

 

$

   15,071  

  

$

         76,217

       

Cost of revenues

 

15,253

  

          9,692

   

47,882

       

Gross profit

 

        9,964

  

       5,379

   

28,335

       

Operating expenses:

      

    Research and development

 

2,438

  

     2,053

   

8,846

    Marketing and selling

 

          1,426

  

1,160

   

5,017

    General and administrative

 

   2,547

  

2,120

   

8,972

    Net loss from sale of fixed asset

 

        -

  

-

   

27

       

Total operating expenses

 

        6,411

  

5,333

   

22,862

       

Operating income

 

        3,553

  

46

   

5,473

 

Financial income, net

 

          218

  

124

   

167

       

Net income

$

3,771

 

$

              170

  

$

5,640

 

 

Basic net income per Ordinary share

$

0.08

 

$

       0.00

  

$

0.13

 

Diluted net income per Ordinary share

$

0.08

 

$

      0.00

  

$

0.13

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


45,139,553

 


42,679,754

  


43,321,058

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

 

47,118,996

  

43,646,623

   

44,565,379