RADA Reports Record Q2/2021 Results

·9 min read

Revenues of $28.3 million, up 61% year-over-year and continued improvement in profitability

NETANYA, Israel, Aug. 02, 2021 (GLOBE NEWSWIRE) -- RADA Electronic Industries Ltd. (NASDAQ: RADA, TASE: RADA) announced today its financial results for the three and six month periods ended June 30, 2021.

Highlights of the second quarter of 2021

  • Quarterly revenues up 61% year-over-year and a 12% increase from the previous quarter to $28.3 million

  • Gross margin improved to 40% compared with 36% in the year-ago quarter

  • A $6.0 million deferred tax asset was recorded in Q2 in view of RADA’s continued profitability.

  • Net income of $10.4 million compared with $0.7 million in the year-ago quarter

  • Adjusted EBITDA of $6.3 million, margin improved to 22% compared with 10% in the year-ago quarter and 19% in the previous quarter

  • Quarter-end net cash position of $95.7 million

Management Comments

Dov Sella, RADA's Chief Executive Officer commented, “We are happy with our ongoing financial performance and growth, and 2021 is proceeding according to our plans. In particular, the strong improvement in our EBITDA margin demonstrates the operating leverage in our business model. Given the current global shortage of components and the ongoing need to mitigate against any Covid-19 pandemic impact on our supply chains, we took the decision to strategically increase inventory levels to ensure availability of components for our ongoing production plans. We look forward to continued growth driven by the positive trends in our markets, especially in the USA.”

2021 Second Quarter Summary

Revenues totaled $28.3 million in the quarter compared with revenues of $17.5 million in the second quarter of 2020, an increase of 61%.

Gross profit totaled $11.3 million in the quarter (40% of revenues), an increase of 81% compared to gross profit of $6.2 million in the second quarter of 2020 (36% of revenues).

Operating income was $4.5 million in the quarter compared to operating income of $0.6 million in the second quarter of 2020.

Income tax – A $6.0 million deferred tax asset was recorded in the second quarter in view of RADA’s continued profitability.

Net income was $10.4 million, or $0.21 per share, compared to a net income of $0.7 million, or $0.02 per share, in the second quarter of 2020.

Adjusted EBITDA was $6.3 million in the quarter compared to adjusted EBITDA of $1.7 million in the second quarter of 2020.

2021 First Half Summary

Revenues totaled $53.5 million in the first half of 2021 compared with revenues of $32.6 million in the first half of 2020, an increase of 64%.

Gross profit totaled $21.2 million in the first half (40% of revenues), an increase of 83% compared to gross profit of $11.6 million in the first half of 2020 (36% of revenues).

Operating income was $8.1 million in the first half of 2021 compared to operating income of $0.7 million in the first half of 2020.

Income tax – A deferred tax asset of $6 million was recorded in view of RADA’s continued profitability.

Net income in the first half was $14.2 million, or $0.30 per share, compared to net income of $0.9 million, or $0.02 per share, in the first half of 2020.

Adjusted EBITDA was $11.1 million in the first half of 2021 compared to adjusted EBITDA of $2.6 million in the first half of 2020.

As of June 30, 2021, RADA had net cash and cash equivalents of $95.7 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 9:00 am ET (4pm Israel time). Management will host the call and will be available to answer questions after presenting the results.

Dial in numbers are: US 1-888-723-3164; 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 www.rada.com beginning 48 hours after the call.

A live webcast of the conference call will be available. Please register for the webcast a 5-10 minutes prior to the call at RADA’s website: https://www.rada.com/investors following which a link to the live webcast will be sent to you within a short period.

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-drones applications.

Contact Information

Company Contact:

Investor Relations Contact:

Avi Israel (CFO)
Tel: +972-76-538-6200
mrkt@rada.com
www.rada.com

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 OPERATING INCOME TO ADJUSTED EBITDA
U.S. dollars in thousands

Six months ended
June 30,

Three months ended
June 30,

Year ended
December 31,

2021

2020

2021

2020

2020

(Unaudited)

Audited

Income from operations before tax

$

8,177



$



877

$

4,405

$

707

$

5,640

Financial income (expenses), net

(122

)

(197

)

97

(73

)

(167

)

Depreciation

1,599

1,014

843

541

2,289

Employees non-cash option compensation

1,327

682

855

401

1,436

Other non-cash amortization

135

232

127

169

476

Adjusted EBITDA

$

11,116

$

2,608

$

6,327

$

1,745

$

9,674

CONSOLIDATED BALANCE SHEETS

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




ASSETS

June 30, 2021

December 31, 2020

Unaudited

Audited

CURRENT ASSETS:

Cash and cash equivalents

$

95,655

$

36,289

Restricted cash

576

567

Trade receivables

20,161

14,095

Contract assets

157

756

Other receivables and prepaid expenses

1,273

1,637

Inventories

31,593

28,783

Total current assets

149,415

82,127

LONG-TERM ASSETS:

Investment in subsidiary

3,000

-

Long-term receivables and other deposits

245

230

Property, plant and equipment, net

16,473

13,968

Deferred tax assets

6,038

-

Operating lease right-of-use assets

11,947

10,581

Total long-term assets

37,703

24,779

Total assets

$

187,118

$

106,906

CURRENT LIABILITIES:

Short term loan

$

-

$

454

Trade payables

16,648

10,603

Other accounts payable and accrued expenses

9,725

9,855

Advances from customers

4,360

2,323

Contract liabilities

172

232

Operating lease short-term liabilities

2,276

1,885

Total current liabilities

33,181

25,352

LONG-TERM LIABILITIES:

Accrued severance pay and other long-term liabilities

775

789

Operating lease long-term liabilities

9,651

8,732

Total long-term liabilities

10,426

9,521

RADA SHAREHOLDERS' EQUITY

Share capital -

Ordinary shares of NIS 0.03 par value - Authorized: 100,000,000 shares at June 30, 2021 and December 31, 2020; Issued and outstanding: 49,253,171 at June 30, 2021 and 43,724,446 at December 31, 2020 respectively

488

440

Additional paid-in capital

202,159

144,944

Accumulated deficit

(59,136

)

(73,351

)

Total equity

143,511

72,033

Total liabilities and equity

$

187,118

$

106,906


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,

2021

2020

2021

2020

2020

(Unaudited)


Audited

Revenues

$

53,472


$

32,577

$

28,255

$

17,506

$

76,217

Cost of revenues

32,243

20,980

16,990

11,288


47,882

Gross profit

21,229

11,597

11,265

6,218

28,335

Operating expenses:

Research and development

4,993

4,239

2,555

2,186

8,846

Marketing and selling

2,956

2,385

1,530

1,225

5,017

General and administrative

5,225

4,293

2,678

2,173

8,972

Net loss from sale of fixed asset

-

-

-

-

27

Total operating expenses:

13,174

10,917

6,763

5,584

22,862

Operating income

8,055

680

4,502

634

5,473

Other financial income (expenses), net

122

197

(97

)

73

167

Income before taxes

8,177

877

4,405

707

5,640

Income tax

6,038

-

6,038

-

-

Net income

14,215

877

10,443

707

5,640

Basic net income per ordinary share

$

0.30


$

0.02

$

0.21

$

0.02

$

0.13

Diluted net income per Ordinary share

$

0.29


$

0.02

$

0.20

$

0.02

$

0.13

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

47,145,784

43,041,405


49,129,699

43,403,276


43,321,058


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

49,123,135

44,002,634

51,065,274

44,302,325


44,412,391


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