GlobeNewswire Inc | Aug 2, 2021 04:55AM EDT

August 02, 2021

NETANYA, Israel, Aug. 02, 2021 (GLOBE NEWSWIRE) -- 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 RADAs 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 $7.5 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 $.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 RADAs 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 RADAs 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 RADAs website atwww.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 RADAs 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) Ehud HelftTel: +972-76-538-6200 GK Investor & Public Relationsmrkt@rada.com Tel: +1 646 688 3559www.rada.com 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, 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. RADAs 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 ended Three months ended Year ended June 30, June 30, December 31, 2021 2020 2021 2020 2020 (Unaudited) Audited Income fromoperations $ 8,177 $ 4,405 $ 707 $ 5,640 before tax $ 877Financialincome (122 ) (197 ) 97 (73 ) (167 )(expenses),netDepreciation 1,599 843 2,289 1,014 541Employeesnon-cash 1,327 855 401 1,436 option 682compensationOther non-cash 135 232 127 169 476 amortization Adjusted $ 11,116 $ 2,608 $ 6,327 $ 1,745 $ 9,674 EBITDA



CONSOLIDATED BALANCE SHEETSU.S. dollars in thousands, except share and per share data ASSETS June 30, 2021 December 31, 2020

Unaudited Audited

CURRENT ASSETS:

Cash and cash $ 95,655 $ 36,289equivalents

Restricted cash 576 567

Trade receivables 20,161 14,095

Contract assets 157 756

Other receivables and 1,273 1,637prepaid expenses

Inventories 31,593 28,783

Total current assets 149,415 82,127

LONG-TERM ASSETS:

Investment in 3,000 -subsidiary

Long-term receivables 245 230and other deposits

Property, plant and 16,473 13,968equipment, net

Deferred tax 6,038 -assets

Operating lease 11,947 10,581right-of-use assets

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 9,725 9,855and accrued expenses

Advances from customers 4,360 2,323

Contract liabilities 172 232

Operating lease 2,276 1,885short-term liabilities

Total current 33,181 25,352liabilities

LONG-TERM LIABILITIES:

Accrued severance payand other long-term 775 789 liabilities

Operating lease 9,651 8,732long-term liabilities

Total long-term 10,426 9,521liabilities

RADA SHAREHOLDERS' EQUITY

Share capital -

Ordinary shares of NIS0.03 par value -Authorized: 100,000,000shares at June 30, 2021and December 31, 2020; 488 440 Issued and outstanding:49,253,171 at June 30,2021 and 43,724,446 atDecember 31, 2020respectivelyAdditional paid-in 202,159 144,944capital

Accumulated deficit (59,136 ) (73,351 )

Total equity 143,511 72,033



$ 187,118 $ 106,906 Total liabilities andequity

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

Six months ended Three months ended Year ended June 30, June 30, December 31,

2021 2020 2021 2020 2020

(Unaudited) Audited



Revenues $ 53,472 $ 32,577 $ 28,255 $ 17,506 $ 76,217



Cost of 32,243 20,980 16,990 11,288 47,882revenues



Gross profit 21,229 11,597 11,265 6,218 28,335



Operating expenses:

Research and 4,993 4,239 2,555 2,186 8,846development

Marketing and 2,956 2,385 1,530 1,225 5,017selling

General and 5,225 4,293 2,678 2,173 8,972administrative

Net loss from sale of fixed - - - - 27asset

Totaloperating 13,174 10,917 6,763 5,584 22,862expenses:

Operating 8,055 680 4,502 634 5,473income

Otherfinancial income (97 ) 73 167(expenses), 122 197net

Income before 8,177 877 4,405 707 5,640taxes

Income tax 6,038 - 6,038 - -

Net income 14,215 877 10,443 707 5,640

Basic netincome per $ 0.30 $ 0.02 $ 0.21 $ 0.02 $ 0.13ordinary share

Diluted netincome per $ 0.29 $ 0.02 $ 0.20 $ 0.02 $ 0.13Ordinary share

Weighted average number of Ordinary shares used for computing 49,129,699 43,403,276 43,321,058basic net income per share 47,145,784 43,041,405

Weightedaverage numberof Ordinary shares used 49,123,135 44,002,634 51,065,274 44,302,325 44,412,391for computing diluted netincome pershare