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:
+972-76-538-6200mrkt@rada.comwww.rada.com
|
Ehud HelftGK Investor & Public RelationsTel: +1 646 688
3559rada@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 EBITDAU.S. dollars in thousands
|
Six months endedJune 30, |
|
Three months endedJune 30, |
|
Year endedDecember 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
endedJune 30,
|
|
Three months
endedJune 30,
|
|
Year
endedDecember 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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