RADA Reports Record Q2/2021 Results

NETANYA, Israel, Aug. 02, 2021 (Globalrelease Wire) — 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
[email protected]
www.rada.com

Ehud Helft
GK Investor & Public Relations
Tel: +1 646 688 3559
[email protected]

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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