PR Newswire | Nov 10, 2020 06:27AM EST

exceed $75 Million

11/10 05:26 CST

RADA Reports Q3/2020 Results: Record Performance, 2020 Revenues Projected to exceed $75 MillionRecord Q3 revenues of $20.4 million, up 81% year-over-yearIncreased full year revenue guidance from over $70 million to over $75 million NETANYA, Israel, Nov. 10, 2020

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 incomeattributable 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 incomeattributable 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 (5pmIsrael 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



Year Nine months ended Three months ended 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 $ $ 13,754 24,171

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 atSeptember 30, 2020 and December 31, 2019; Issued and 439 394outstanding: 43,613,663 at September 30, 2020 and 38,456,693 atDecember 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 $ $ 64,915 98,990

CONSOLIDATED STATEMENTS OF OPERATIONS

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

Year ended Nine months ended Three months 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 6,468 4,924 2,230 1,884 6,912 development

Marketing and 3,671 2,791 1,286 921 4,044 selling

General and 6,526 5,010 2,235 1,780 7,084 administrative

Total operating 16,665 12,725 5,751 4,585 18,040 expenses:

Operating income 2,691 (1,895) 2,010 (494) (2,103) (loss)

Other financial 116 (192) (121) income (expenses), 311 (149) net

Net income (loss) from continuing 3,002 (2,044) 2,126 (686) (2,224) operations

Net loss from discontinued - - - - (115) operations

3,002 (2,044) 2,126 (686) (2,339) Net income (loss)

Net loss (income) attributable to - 309 - 309 non- controlling - interest

Net income (loss) attributable to $ 3,002$ (1,735) $ 2,126 $ RADA (2,030) Electronic $ (686) Industries' shareholders

Basic and diluted $ net income (loss) $ 0.07 $ 0.05 (0.05) from continuing operations per ordinary share $ (0.05) $ (0.02)

Basic and diluted net loss from $ discontinued $ 0.00$ 0.00 $ 0.00$ 0.00(0.05) operations per ordinary share

Basic and diluted net income (loss) $ 0.07$ (0.05) $ 0.05$ (0.02)$ per (0.05) ordinary share

Diluted net income $ (loss) per ordinary$ 0.07 $ 0.05 (0.05) share $ (0.05) $ (0.02)

Weighted average number of ordinary shares used for computing basic net income (loss) per 43,209,15338,050,446 43,541,00238,115,51738,148,756share

Weighted average number of ordinary shares used for computing diluted 44,297,058 44,849,311 38,841,866net income (loss) per 38,678,430 38,969,469 share

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SOURCE RADA