RADA Reports Q3/2020 Results: Record Performance, 2020 Revenues Projected to exceed $75 Million
NETANYA, Israel, Nov. 10, 2020 /PRNewswire/ -- RADA Electronic Industries Ltd. (NASDAQ: RADA) announced today its financial results for the three and nine-months periods ended September 30, 2020.
Highlights of the third quarter of 2020
-- Quarterly revenues up 81% year-over-year to a record $20.4 million;
-- Gross margin increases to 38% from 36%;
-- Net income of $2.1 million and adjusted EBITDA of $3.1 million - 15% of
revenues, compared to adjusted EBITDA of $1.7 million and 10% of
revenues in previous quarter;
-- 2020 revenue guidance increased to over $75 million, implying over 70%
growth year-over-year.
Management Comments
Dov Sella, RADA's Chief Executive Officer commented, "We are very pleased with our results and the positive momentum in our business, which led to unprecedented improvement across all financial parameters. The increased production volumes and manufacturing efficiencies are yielding higher gross margins, currently at 38%. Our strong revenue growth, improved gross margins and stabilizing operating expenses are yielding strong EBITDA growth which reached 15% of revenues this quarter."
Continued Mr. Sella, "Our orders in-hand have enabled us to increase our 2020 revenue guidance to over $75 million. Our recent orders are starting to build significant backlog for 2021, substantiating our growth outlook. We expect our financial parameters to continue to improve throughout the remainder of 2020 and into 2021."
2020 Third Quarter Summary
Revenues totaled $20.4 million in the quarter compared with revenues of $11.3 million in the third quarter of 2019, an increase of 81%.
Gross profit totaled $7.8 million (38% of revenues) in the quarter, an increase of 90% compared to gross profit of $4.1 million (36% of revenues) in the third quarter of 2019.
Operating income was $2.0 million in the quarter compared to an operating loss of $0.5 million in the third quarter of 2019.
Net income attributable to RADA's shareholders in the quarter was $2.1 million, or $0.05 per share, compared to a net loss of $0.7 million, or $(0.02) per share, in the third quarter of 2019.
Adjusted EBITDA was $3.1 million in the quarter compared to adjusted EBITDA of $0.1 million in the third quarter of 2019.
2020 First Nine months Summary
Revenues totaled $52.9 million in the first nine months compared with revenues of $30.0 million in the first nine months of 2019, an increase of 77%.
Gross profit totaled $19.4 million (37% of revenues) in the first nine months, an increase of 79% compared to gross profit of $10.8 million (36% of revenues) in the first nine months of 2019.
Operating income was $2.7 million in the first nine months compared to an operating loss of $1.9 million in the first nine months of 2019.
Adjusted EBITDA was $5.7 million in the first nine months compared to adjusted EBITDA loss of $0.2 million in the first nine months of 2019.
Net income attributable to RADA's shareholders in the first nine months was $3.0 million, or $0.07 per share compared to a net loss of $1.7 million, or $(0.05) per share, in the first nine months of 2019.
As of September 30, 2020, RADA had net cash and cash equivalents of $23.7 million compared to $13.8 million as of year-end 2019. The inventory level has increased to $29.3 million from $17.2 million as at the end of 2019. RADA management decided to strategically increase the inventory level to support the expected future growth and to ensure ongoing full availability of components, given the current economic environment and the need to mitigate against any negative influence of the Covid-19 pandemic on the supply chain.
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 1-888-723-3164; Israel 03-918-0644 and International +972-3-918-0644.
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 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.
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 active military protection, counter-UAS, critical infrastructure protection and border surveillance.
Contact Information
Company Contact:
Avi Israel (CFO)
Tel: +972-765-386-200
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, the impact of COVID-19 on our company and our industry, 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
Nine months ended Three months ended Year ended
September 30, September 30,
December 31,
---
2020 2019 2020 2019 2019
---
(Unaudited) Audited
Operating income
(loss) $2,691 $(1,895) $2,010 $(494) $(2,103)
Depreciation 1,612 847 598 307 1,301
Non-cash stock-based compensation expense
1,022 830 340 270 1,150
Other non-cash amortization
409 29 178 23 59
Adjusted EBITDA $5,734 $(189) $3,126 $106 $407
===
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share data
---
ASSETS September December
30, 2020
31, 2019
Unaudited Audited
CURRENT ASSETS:
Cash and cash equivalents $24,171 $13,754
Restricted cash 567 380
Trade receivables 20,767 13,765
Contract assets 1,082 1,269
Other receivables and prepaid expenses 2,307 1,673
Inventories 29,310 17,196
Total
current assets 78,204 48,037
---
LONG-TERM ASSETS:
Long-term receivables and other deposits 219 97
Property, plant and equipment, net 12,614 9,127
Operating lease right-of-use assets 7,953 7,654
Total
long-term assets 20,786 16,878
---
Total
assets $98,990 $64,915
---
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short term loan $454
$ -
Trade payables 12,223 7,661
Other accounts payable and accrued expenses 7,669 5,572
Advances from customers, net 888 1,563
Contract liabilities 6 196
Operating lease short-term liabilities 1,720 1,240
Total
current liabilities 22,960 16,232
---
LONG-TERM LIABILITIES:
Accrued severance pay and other long-term
liabilities 726 764
Operating lease long-term liabilities 6,323 6,499
Total long-term liabilities 7,049 7,263
---
RADA SHAREHOLDERS' EQUITY
Share capital -
Ordinary shares of NIS 0.03 par value -Authorized:
100,000,000 shares at 439 394
September 30, 2020 and December 31, 2019; Issued
and outstanding:
43,613,663 at September 30, 2020 and 38,456,693 at
December 31, 2019
Additional paid-in capital 145,726 121,212
Accumulated other comprehensive income (loss) (1,195) (1,195)
Accumulated deficit (75,989) (78,991)
Total RADA shareholders' equity 68,981 41,420
Total
liabilities and
equity $98,990 $64,915
---
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except share and per share data
---
Nine months ended Three months ended Year ended
September 30, September 30,
December 31,
---
2020 2019 2020 2019 2019
---
(Unaudited) Audited
Revenues $52,936 $29,974 $20,359 $11,260 $44,331
Cost of revenues 33,580 19,144 12,598 7,169 28,394
---
Gross profit 19,356 10,830 7,761 4,091 15,937
---
Operating expenses:
Research and
development 6,468 4,924 2,230 1,884 6,912
Marketing and
selling 3,671 2,791 1,286 921 4,044
General and
administrative 6,526 5,010 2,235 1,780 7,084
Total operating
expenses: 16,665 12,725 5,751 4,585 18,040
---
Operating income
(loss) 2,691 (1,895) 2,010 (494) (2,103)
116 (192) (121)
Other financial
income (expenses),
net 311 (149)
Net income (loss)
from continuing
operations 3,002 (2,044) 2,126 (686) (2,224)
Net loss from
discontinued
operations (115)
3,002 (2,044) 2,126 (686) (2,339)
Net income (loss)
===
309 309
Net loss (income) attributable to non-
controlling interest
$3,002 $(1,735) $2,126 $(2,030)
Net income (loss) attributable to RADA
Electronic Industries' shareholders
$(686)
$0.07 $0.05 $(0.05)
Basic and diluted net income (loss)
from continuing operations per
ordinary share
$(0.05) $(0.02)
Basic and diluted
net loss from $0.00 $0.00 $0.00 $0.00 $(0.05)
discontinued operations per
ordinary share
Basic and diluted
net income (loss)
per $0.07 $(0.05) $0.05 $(0.02) $(0.05)
ordinary share
Diluted net income
(loss) per
ordinary share $0.07 $0.05 $(0.05)
$(0.05) $(0.02)
Weighted average number of ordinary shares
used for computing basic net
income (loss) per share
43,209,153 38,050,446 43,541,002 38,115,517 38,148,756
Weighted average
number of ordinary 44,297,058 44,849,311 38,841,866
shares used for computing
diluted net
income (loss) per share
38,678,430 38,969,469
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SOURCE RADA
