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RADA Electronic Industries Announces Q1 2018 Results: Strong Revenue Growth of 29% Year-over-Year

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NETANYA, Israel, May 23, 2018 (GLOBE NEWSWIRE) -- RADA Electronic Industries Ltd. (NASDAQ:RADA) announced today its financial results for the quarter ended March 31, 2018.

Management Comments

Dov Sella, RADA's Chief Executive Officer commented, "We are pleased with the results of the first quarter, showing a very strong 29% growth in revenues over the first quarter of last year, with an improved level of gross margins. Looking ahead, we expect to maintain our growth momentum into the second quarter, with revenues of approximately $6.5 million, compared to $5.3 million in the second quarter of 2017, up approximately 22% over last year."

Continued Mr. Sella, "We recently opened a new subsidiary in the United States and we have already received initial new orders from some US customers. Our pipeline is deep and strong, with significant revenue potential over the coming years. We are targeting active protection systems (APS) for the US Army and others, Mobile Short-Range Air Defense (M-SHORAD) for the US army and US Marine Corps, as well as SHORAD and C-UAV/Drones globally. These are all operational solutions with significant potential for incorporating our tactical radars which work On-The-Move (OTM). As we move through 2018, I am confident that our continuous and long-term investments in software-defined, multi-mission tactical radars for the maneuver force will reap rewards in the quarters and years to come. Beyond the growth engines, we are also pleased with the stability of our digital video recorders business, where we are developing our next-generation solutions to various aircraft manufacturers globally."

2018 First Quarter Summary

Revenues totaled $6.0 million in the first quarter of 2018, up 29% compared to revenues of $4.7 million in the first quarter of 2017.

Gross Profit totaled $2.2 million in the first quarter of 2018 (gross margin of 36.2%) up 31% compared to gross profit of $1.7 million (gross margin of 35.7%) in the first quarter of 2017.

Operating expenses totaled $2.0 million in the first quarter of 2018 (32.8% of revenues) compared with $1.3 million (28.2% of revenues) in the first quarter of 2017. The primary factor in the increase was higher R&D expenses, which amounted to 10% of revenues compared with 4% in the first quarter of last year. On an absolute basis, marketing and sales as well as G&A expenses also increased. Sales and marketing expenses increased to 11% of revenues from 9% in the same quarter last year, while G&A expenses decreased to 12% of revenues from 15% in the same quarter of last year.  

Operating income totaled $0.2 million in the first quarter of 2018 compared to operating income of $0.3 million in the first quarter of 2017.

Net income attributable to RADA's shareholders in the first quarter of 2018 was $0.2 million, or $0.01 per share, compared to net income of $0.4 million, or $0.02 per share, in the first quarter of 2017.

In terms of liquidity and capital resources, as of March 31, 2018, the Company had cash and cash equivalents, of $13.4 million or $0.41 per share, compared with $12.4 million or $0.40 per share as of December 31, 2017. As of March 31, 2018, the Company did not have any financial liabilities. Cash flow from operations for the quarter was a positive $0.4 million.

Investor Conference Call

The Company will host a conference call later today, starting at 10:00 am ET (5pm Israel time). Dov Sella, Chief Executive Officer and Avi Israel, Chief Financial Officer, will host the call and will be available to answer questions after presenting the results.

Dial in numbers are: US 1-888-281-1167; UK 0800-917-9141; Israel 03-918-0685 and International +972-3-918-0685.

For those unable to participate, the teleconference will be available for replay on RADA's website at http://www.rada.com beginning 48 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. 

Note: 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.

   
Company Contact: 
Avi Israel - CFO 
RADA Electronic Industries Ltd.
Tel: +972-9-8921111
mrkt@rada.com
Investor Relations Contact:
Ehud Helft/Gavriel Frohwein
GK Investor & Public Relations
Tel: +1 646 688 3559
rada@gkir.com
   


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

ASSETS March 31,
2018
  December 31,
2017
  Unaudited    
CURRENT ASSETS:      
Cash and cash equivalents $   13,415     $    12,417  
Restricted cash   322          322  
Trade receivables (net of allowance for doubtful accounts of $14 at March 31, 2018
 and December 31, 2017)
  6,095       7,286  
Costs and estimated earnings in excess of billings on uncompleted contracts   1,126         995  
Other receivables and prepaid expenses   459        330  
Inventories   7,782       7,910  
Current assets related to discontinued operations   2,333       2,468  
       
Total current assets   31,532       31,728  
       
LONG-TERM ASSETS:      
       
Long-term receivables and other deposits   71       68  
Property, plant and equipment, net   3,820       3,915  
Long-term assets related to discontinued operations   356       319  
Total long term assets   4,247       4,302  
       
Total assets $   35,779     $   36,030  
       
LIABILITIES AND SHAREHOLDERS' EQUITY      
       
CURRENT LIABILITIES:      
Trade payables $   1,758     $   2,904  
Other accounts payable and accrued expenses   2,678       2,814  
Advances from customers, net   -       41  
Current liabilities related to discontinued operations   369       328  
       
Total current liabilities   4,805       6,087  
       
LONG-TERM LIABILITIES:      
Accrued severance pay and other long-term liabilities   786       758  
Total long-term liabilities   786       758  
       
RADA SHAREHOLDERS' EQUITY      
Share capital -      
Ordinary shares of NIS 0.03 par value - Authorized: 37,500,000 shares at March 31,
 2018 and December 31, 2017; Issued and outstanding: 32,882,914 at March 31,
 2018 and 31,392,040 at December 31, 2017.
  348       335  
Additional paid-in capital   105,842       104,923  
Accumulated other comprehensive income   286       392  
Accumulated deficit   (76,904 )     (77,124 )
       
Total RADA shareholders' equity   29,572       28,526  
Non-controlling interest   616       659  
               
Total equity   30,188       29,185  
               
Total liabilities and equity $   35,779     $   36,030  
               


CONSOLIDATED STATEMENTS OF OPERATIONS 
U.S. dollars in thousands, except share and per share data

  Three months ended
March 31,
  Year ended
December 31,
 
    2018       2017       2017  
  Unaudited      
             
Revenues $    6,020      $    4,675      $      26,182   
             
Cost of revenues     3,841       3,006         17,919  
             
Gross profit   2,179       1,669         8,263  
             
Operating expenses:            
  Research and development   592       198       1,575  
  Marketing and selling   634       436       2,137  
  General and administrative   748       686       2,568  
             
Total operating expenses   1,974       1,320       6,280  
             
Operating income   205       349       1,983  
Amortization of shareholders' convertible loans discount and beneficial conversion feature   -       10       103  
Other financial expenses (income), net   (8 )     (39 )     53  
             
Net income from continuing operations   213       378       1,827  
Net income (loss) from discontinued operations    (9 )     12       515  
             
Net income $    204     $      390     $    2,342  
Net income (loss) attributable to non-controlling interest      (16 )        2       103  
                       
Net income attributable to RADA Electronic Industries' shareholders $    220     $      388     $    2,239  
Basic net income from continuing operations per Ordinary share $      0.01     $     0.02     $      0.07  
Diluted net income from continuing operations per Ordinary share $    0.01     $     0.02     $      0.06  
Basic and diluted net income from discontinued operations per Ordinary share $    0.00     $     0.00     $      0.02  
Basic net income per Ordinary share $     0.01     $     0.02     $      0.09  
Diluted net income per Ordinary share $     0.01     $     0.02     $     0.08  
Weighted average number of Ordinary shares used for computing basic net income per share   32,604,550       21,666,124       24,956,915  
Weighted average number of Ordinary shares used for computing diluted net income per share   33,202,955       24,641,207       28,126,509  
 

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