Revenues in 2019 reach $44.3 million, up 58% year-over-year; strong continued revenue growth expected in 2020 to over $65 million; Netanya, Israel, March 10, 2020 – RADA Electronic Industries Ltd. (NASDAQ: RADA) announced today its financial results for the year and quarter, ended December 31, 2019. Highlights of 2019·       Record revenues of $44.3 million up 58% year-over-year;·       Full year gross margin of 36%;·       Net loss of $2.0 million and positive EBITDA of $0.4 million;  ·       Year-end net cash position of $13.8 million; secondary offering in January 2020 adds an additional $23.5 million to the cash position. Management Comment

Dov Sella, RADA's Chief Executive Officer commented, “We are exceptionally pleased with our performance in 2019, growing our top line by 58% to an all-time record of $44.3 million. Furthermore, even while making the significant investments in our infrastructure and in establishing a new production line and a presence in the United States, our EBITDA was positive in the second half of the year.”

Continued Mr. Sella, “Our strong order momentum since mid-2019, which continued into this year, has increased our confidence that we will exceed revenues of $65 million in 2020. We expect that throughout 2020, we will grow our top line sequentially each quarter and reach profitability during the year. Our growth will be driven primarily by the growth in sales of tactical radars, with strong contribution from both the US and global markets. Furthermore, as the current programs to which we are supplying our radars mature, we expect the growth trend of our revenues to continue into 2021.”

2019 Fourth Quarter Summary 

Revenues totaled $14.4 million in the fourth quarter of 2019, an increase of 71% compared with revenues of $8.4 million in the fourth quarter of 2018.

Gross profit totaled $5.1 million in the fourth quarter of 2019 (or 36% of revenues) compared to gross profit of $3.0 million in the fourth quarter of 2018 (or 36% of revenues).  Operating Loss was $209,000 in the fourth quarter of 2019 compared to an operating loss of $102,000 in the fourth quarter of 2018. Net loss attributable to RADA’s shareholders in the fourth quarter of 2019, was $295,000, or $0.01 per share, compared to a net loss of $86,000, or $0.00 per share, in the fourth quarter of 2018.  The loss in the fourth quarter was impacted in part by loss of $115,000 recorded in 2019 with respect to the sale of the Company’s Chinese subsidiary (a discontinued operation) in December 2018. The Company’s EBITDA was $587,000 in the fourth quarter of 2019, compared to EBITDA of $401,000 in the fourth quarter of 2018.    

Full Year 2019 Results Summary

Revenues totaled $44.3 million, an increase of 58% compared to revenues of $28.0 million in 2018.  

Gross profit totaled $15.9 million (or 36% of revenues) compared to gross profit of $10.2 million (or 36% of revenues) in 2018.

Operating loss totaled $2.1 million compared to operating income of $0.1 million in 2018.  

Net loss attributable to RADA’s shareholders was $2.0 million, or $0.05 per share for the year ended December 31, 2019, compared to net income of $163,000, or $0.00 per share, for the year ended December 31, 2018.

The Company’s EBITDA was $407,000 in 2019 compared to EBITDA of $1.8 million in 2018.  

As of December 31, 2019, RADA had net cash and cash equivalents of $13.8 million, compared to $20.8 million as of year-end 2018. Following the balance sheet date on January 10, 2020, the Company raised approximately $23.5 million from investors, after expenses, in a secondary offering in the United States.

 Investor Conference Call 

The Company will host a conference call later today, March 10, 2020, starting at 10:00 am ET. 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. 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 2:00 pm UK Time

Israel:                                03-918-0609                     at 4:00 pm Israel Time

International:                  +972-3-918-0609

 

     
     
     
     

For those unable to participate, the teleconference will be available for replay on RADA’s website at www.rada.com beginning 48 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/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

U.S. dollars in thousands

 

 

Year ended December 31,

Three months ended

December 31,

 

          2019

    2018

      2019

     2018

         

Operating Income (loss)

$(2,103)

$62

$(209)

$(102)

Depreciation

1,301

799

454

250

Employees Option Compensation

1,150

898

313

253

Other non-cash amortization

59

33

29

-

         

EBITDA

$407

$1,792

$587

$401

         
           

 

 

CONSOLIDATED BALANCE SHEETS

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

 

 

December 31,

 

 

2019

 

2018

         

ASSETS

       
         

CURRENT ASSETS:

       

Cash and cash equivalents

 

$     13,754

 

$     20,814

Restricted deposits

 

380

 

422

Trade receivables (net of allowance for doubtful accounts of 2 at December 31, 2019 2 at December 31, 2018)

 

13,765

 

13,382

Contract Asset

 

1,269

 

899

Other accounts receivable and prepaid expenses

 

1,673

 

506

Inventories, net

 

17,196

 

11,244

Current assets related to discontinued operations

 

-

 

1,524

         

Total current assets

 

48,037

 

48,791

         

LONG-TERM ASSETS:

       

Long-term receivables and other deposits

 

97

 

79

Property, plant and equipment, net

 

9,127

 

4,632

Operating lease right-of-use asset

 

7,654

 

-

Total LONG-TERM ASSETS

       
   

16,878

 

4,711

Total assets

 

$     64,915

 

$     53,502

CONSOLIDATED BALANCE SHEETS

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

 

December 31,

 

 

2019

 

2018

LIABILITIES AND EQUITY

       
         

CURRENT LIABILITIES:

       

Trade payables

 

$      7,661

 

$      5,650

Other accounts payable and accrued expenses

 

5,572

 

3,842

Advances from customers

 

1,563

 

727

Contract Liabilities

 

196

 

366

Operating lease short term liabilities

 

1,240

   

Current liabilities related to discontinued operations

 

-

 

366

         

Total current liabilities

 

16,232

 

10,951

         

LONG-TERM LIABILITIES:

       
         

Operating lease long term liabilities

 

6,499

 

-

Accrued severance pay and other long term liability

 

764

 

690

         

Total long-term liabilities

 

7,263

 

690

         
         
         
         

EQUITY:

       

Share capital -

       

Ordinary shares of NIS 0.03 par value - Authorized: 100,000,000 shares and 100,000,000 shares at December 31, 2019 and December 31, 2018 respectively; Issued and outstanding: 38,456,693 and 37,516,891 at December 31, 2019 and at December 31, 2018 respectively.

 

394

 

386

Additional paid-in capital

 

120,017

 

118,568

Accumulated other comprehensive income

 

-

 

220

Accumulated deficit

 

(78,991)

 

(76,961)

         

Total RADA Electronic Industries shareholders' equity

 

41,420

 

42,213

Non-controlling interest

 

-

 

(352)

         

Total equity

 

41,420

 

41,861

         

Total liabilities and equity

 

$     64,915

 

$     53,502

CONSOLIDATED STATEMENTS OF OPERATIONS

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

 

Year ended December 31,

          Three months ended

December 31,

 

2019

2018

2019

2018

Revenues:

         

Products

$   43,597

$   26,909

$   14,230

$   8,141

 

Services

734

1,123

126

250

 
           
 

44,331

28,032

14,356

8,391

 

Cost of revenues:

         

Products

28,272

17,674

9,244

5,297

 

Services

122

143

6

36

 
           
 

28,394

17,817

9,250

5,333

 
           

Gross profit

15,937

10,215

5,106

3,058

 

Operating expenses:

         

Research and development, net

6,912

3,189

1,987

1,025

 

Marketing and selling

4,044

2,860

1,253

847

 

General and administrative

7,084

4,001

2,075

1,185

 

Net Loss from sale of fixed asset

-

103

-

103

 

Total operating expenses:

18,040

10,153

5,315

3,160

 

Operating Income (Loss)

(2,103)

62

(209)

(102)

 

financial expenses (income), net

121

(119)

(29)

(72)

 

 

         

Net income (loss) from continuing operations

(2,224)

181

(180)

(30)

 
           

Net Income (loss) from discontinued operations

(115)

(404)

(115)

(233)

 
           

Net income (loss)

(2,339)

(223)

(295)

(263)

 

Net income (loss) attributable to non-controlling interest

(309)

(386)

-

(177)

 

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

$     (2,030)

$     163

$       (295)

$       (86)

 
           

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

$       (0.05)

$       0.02

$    ( 0.01)

$    ( 0.00)

 

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

$      ( 0.05)

$       0.02

$     (0.01)

$     (0.00)

 

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

$       (0.00)

$     (0.01)

$     (0.00)

$     (0.01)

 

Basic net income (Loss) per Ordinary share

$       (0.05)

$       0.00

$    (0.01)

$     (0.00)

 

Diluted net income (Loss) per Ordinary share

$       (0.05)

$       0.00

$    (0.01)

$     (0.00)

 

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

   38,148,756

      

      33,184,570

     38,439,848

          34,324,897

 
                 

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

  

38,841,266

               

      33,716,931             

  

39,491,610

       

          34,823,139