SOURCE: RADA Electronic Industries Ltd.

RADA Electronic Industries Ltd.

November 28, 2017 09:11 ET

RADA Electronic Industries Announces Q3 2017 Results: Over 100% Growth in Revenue and Strong Improvement in Profitability; Increasing Revenue Guidance for 2017

Investor conference call to be held today at 10am ET

NETANYA, ISRAEL--(Marketwired - Nov 28, 2017) -  RADA Electronic Industries Ltd. (NASDAQ: RADA) announced today its financial results for the quarter ended September 30, 2017.

Management Comments
Dov Sella, RADA's Chief Executive Officer commented, "We are very pleased with our third quarter results. Driven by our software-defined tactical radar sales, we achieved growing profitability and more than doubled revenues over last year. Furthermore, we attained very strong margins across the board. In the past few months, we have beefed up our investments in infrastructure in order to support our higher level of business and our expectations for long-term future growth. This has allowed us to successfully deliver on our major strategic order of multi-mission hemispheric radars to the US military in record time, providing it with unparalleled on-the-move air surveillance and counter-UAV capabilities. We believe this order marks the initial implementation of our strategy, and see significant further potential for orders in the United States and elsewhere over the coming years."

Continued Mr. Sella, "As we move towards the end of 2017, our balance sheet is strong with $9 million in net cash providing us with the working capital we need to support the growth in our business. Following the successful completion and delivery of our radar sale to the US military, our expectations are for strong positive cash flows into the fourth quarter. Due to the strength we have experienced in our business in the past few months, we are increasing our 2017 revenue guidance to approximately $26 million up from $25 million previously. This represents a year over year growth in revenue of over 100%."

2017 Third Quarter Summary

Revenues totaled $7.1 million in the third quarter of 2017, up 112% compared to revenues of $3.3 million in the third quarter of 2016.

Gross Profit totaled $2.8 million in the third quarter of 2017 (gross margin of 39%) compared to gross profit of $0.4 million (gross margin of 12.4%) in the third quarter of 2016.

Operating income was $1.0 million in the third quarter of 2017 (operating margin of 14.4%) compared to an operating loss of $0.9 million in the third quarter of 2016.

Net income attributable to RADA's shareholders in the third quarter of 2017 was $0.8 million (net margin of 11.3%), or $0.03 per diluted share, compared with a net loss of $1.0 million, or $0.06 loss per share, in the third quarter of 2016.

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.

Dial in numbers are: US 1-888-407-2553; UK 0800-917-5108; Israel 03-918-0610 and International +972-3-918-0610.

For those unable to participate, the teleconference will be available for replay on RADA's website at http://www.rada.com beginning 24 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.

Certain matters discussed in this news release are forward-looking statements that involve a number of risks and uncertainties including, but not limited to statements regarding expected results in future quarters, risks in product and technology development and rapid technological change, product demand, the impact of competitive products and pricing, market acceptance, the sales cycle and changing economic conditions. Any forward-looking statement is not a guarantee of future performance and actual results could differ materially from those contained in the forward-looking statement. These statements speak only as of the date they were made, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. We operate in a changing environment. New risks emerge from time to time and it is not possible for us to predict all risks that may affect us. For more information regarding these risks and uncertainties as well as certain additional risks that we face, you should refer to the Risk Factors detailed in our Annual Report on Form 20-F and subsequent reports and filings made from time to time with the Securities and Exchange Commission.

   
   
CONSOLIDATED BALANCE SHEETS  
U.S. dollars in thousands, except share and per share data  
   
    ASSETS   September 30, 2017     December 31, 2016  
    Unaudited        
CURRENT ASSETS:            
  Cash and cash equivalents   $ 9,282     $ 1,205  
  Restricted cash     586       317  
  Trade receivables (net of allowance for doubtful accounts of $12 at September 30, 2017 and $14 at December 31, 2016)     8,830       5,006  
  Costs and estimated earnings in excess of billings on uncompleted contracts     324       1,096  
  Other receivables and prepaid expenses     779       349  
  Inventories     10,234       7,102  
  Current assets related to discontinued operations     2,363       2,254  
                 
Total current assets     32,398       17,329  
                 
LONG-TERM ASSETS:                
Long-term receivables and other deposits     753       742  
Property, plant and equipment, net     3,442       2,650  
Long-term assets related to discontinued operations     33       266  
Total long term assets     4,228       3,658  
                 
Total assets   $ 36,626     $ 20,987  
                 
    LIABILITIES AND SHAREHOLDERS' EQUITY                
                 
CURRENT LIABILITIES:                
  Bank credit   $ 424     $ 575  
  Trade payables     5,026       2,557  
  Other accounts payable and accrued expenses     2,601       1,987  
  Advances from customers, net     -       839  
  Current liabilities related to discontinued operations     326       265  
                 
Total current liabilities     8,377       6,223  
                 
LONG-TERM LIABILITIES:                
  Convertible note and loans from shareholders, net     -       3,072  
  Accrued severance pay and other long-term liabilities     744       663  
Total long-term liabilities     744       3,735  
                 
RADA SHAREHOLDERS' EQUITY                
  Share capital -                
    Ordinary shares of NIS 0.03 par value - Authorized: 37,500,000 shares at September 30, 2017 and December 31, 2016; Issued and outstanding: 29,982,127 at September 30, 2017 and 21,246,502 at December 31, 2016.     323       250  
  Additional paid-in capital     103,997       89,407  
  Accumulated other comprehensive income     325       222  
  Accumulated deficit     (77,679 )     (79,363 )
                 
Total RADA shareholders' equity     26,966       10,516  
Non-controlling interest     539       513  
Total equity     27,505       11,029  
Total liabilities and equity   $ 36,626     $ 20,987  
                 
                 
                 
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except share and per share data
 
    Nine months ended
September 30,
  Three months ended
September 30,
  Year ended December
31
,
    2017   2016   2017   2016   2016
        (Unaudited)    
                     
Revenues   $ 17,063   $ 8,518   $ 7,071   $ 3,330   $ 12,821
                               
Cost of revenues     10,975     7,896     4,316     2,916     11,379
                               
Gross profit     6,088     622     2,755     415     1,442
                               
Operating expenses:                              
Research and development     886     534     480     218     758
Marketing and selling     1,484     1,653     629     593     2,269
General and administrative     1,839     1,293     627     458     1,814
Goodwill impairment                              
Total operating expenses:     4,209     3,480     1,736     1,269     4,841
Operating Income (loss)     1,879     (2,858)     1,019     (855)     (3,399)
Amortization of shareholders' convertible loans discount and beneficial conversion feature    

102
   

1,106
   

83
   

10
   

 1,116
Other financial expenses (income), net    

95
   

413
   

105
   

109
   

 405
Net income (loss) from continuing operations    

1,682
   

(4,377)
   

831
   

(974)
   

(4,920)
Net income (loss) from discontinued operations    
3
   
(44)
   
(37)
   
(22)
   
13
Net income (loss)    
1,685
   
(4,421)
   
794
   
(996)
   
 (4,907)
Net income (loss) attributable to non-controlling interest    
1
   
(9)
   
(7)
   
(4)
   
 3
Net income (loss) attributable to RADA Electronic Industries' shareholders    

 $ 1,684
  $

(4,413)
  $

801
  $

(992)
   

 $ (4,910)
Basic net income (loss) from continuing operations   $
0.07
  $
(0.36)
   
 $ 0.03
  $
(0.06)
   
 $ (0.35)
Basic net income (loss) from discontinued operations per Ordinary share   $ 0.00   $ 0.00   $ (0.00)   $ 0.00   $ (0.00)
Basic and diluted net income (loss)   $ 0.07   $ (0.36)   $ 0.03   $ (0.06)   $ (0.35)
Weighted average number of Ordinary shares used for computing basic and diluted net income (loss) per share     22,915,032     12,244,643     25,146,803     16,719,929     14,029,346
                               

Contact Information

  • Company Contact:
    Avi Israel
    CFO
    RADA Electronic Industries Ltd.
    Tel: +972-9-892 1111
    mrkt@rada.com

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