GlobeNewswire Inc | Nov 3, 2021 06:06AM EDT

November 03, 2021

NETANYA, Israel, Nov. 03, 2021 (GLOBE NEWSWIRE) -- RADA Electronic Industries Ltd. (NASDAQ: RADA, TASE: RADA) announced today its financial results for the three-month and nine-month periods ended September 30, 2021.

Highlights of the third quarter of 2021

-- Quarterly revenues up 57% year-over-year and a sequential 13% increase to $32 million -- Strong gross margin improvement to 41% compared with 38% in the year-ago quarter -- Operating profit more than tripled to $6.3 million compared with $2.0 million in the year-ago quarter -- Net income of $6.0 million, up 184% compared with $2.1 million in the year-ago quarter -- Adjusted EBITDA of $8.2 million, an increase of 162% compared to $3.1 million in the year ago quarter and $6.3 million in the prior quarter -- Adjusted EBITDA margin improved to 26% compared with 15% in the year-ago quarter and 22% in the prior quarter -- Quarter-end net cash position of $86.6 million

Management Comments

Dov Sella, RADA's Chief Executive Officer commented, We are very happy with our record financial performance and strong growth this quarter. The 57% year-over-year growth in revenue as well as the consistent improvement in our gross and operating margins, led to a 162% year-over-year growth in our Adjusted EBITDA and demonstrates the solid operating leverage within our business model.

Continued Mr. Sella, Our pipeline continues to strengthen, becoming deeper and broader. As the world starts to adjust to working under the Covid situation, we expect to be able to penetrate more quickly into new accounts globally. In the US, as has been widely reported, the new federal government has not been able yet to pass the budget and is operating under a continuing resolution of last years budget, leading to delays and lack of certainty in the short-term. While this phase of US budget adjustment is making it more challenging, at RADA, we are accustomed and well positioned to work under short timelines and urgent-need book-and-ship deliveries. Over the past year, we have strategically increased our inventory quite substantially to ensure we can maintain this significant competitive edge. All in all, we reiterate our expectations to surpass $120 million in revenue for 2021, representing a substantial 57% year-over-year revenue growth and with strong operating leverage supporting our ability to grow our EBITDA profitability beyond the current level.

2021 Third Quarter Summary

Revenues totaled $32.0 million in the quarter compared with revenues of $20.4 million in the third quarter of 2020, an increase of 57%.

Gross profit totaled $13.2 million in the quarter (41% of revenues), an increase of 71% compared to gross profit of $7.8 million in the third quarter of 2020 (38% of revenues).

Operating income was $6.3 million in the quarter compared to operating income of $2.0 million in the third quarter of 2020.

Net income was $6.0 million, or $0.12 per share, compared to net income of $2.1 million, or $0.05 per share, in the third quarter of 2020.

Adjusted EBITDA was $8.2 million in the quarter compared to adjusted EBITDA of $3.1 million in the third quarter of 2020.

2021 First nine months Summary

Revenues totaled $85.5 million in the first nine months of 2021 compared with revenues of $52.9 million in the first nine months of 2020, an increase of 61%.

Gross profit totaled $34.5 million in the first nine months (40% of revenues), an increase of 78% compared to gross profit of $19.4 million in the first nine months of 2020 (37% of revenues).

Operating income was $14.3 million in the first nine months of 2021 compared to operating income of $2.7 million in the first nine months of 2020.

Net income in the first nine months was $20.3 million, or $0.42 per share, compared to net income of $3.0 million, or $0.07 per share, in the first nine months of 2020.

Adjusted EBITDA was $19.3 million in the first nine months of 2021 compared to adjusted EBITDA of $5.7 million in the first nine months of 2020.As of September 30, 2021, RADA had net cash and cash equivalents of $86.6 million compared to $35.8 million as of year-end 2020. In line with the Companys previously started strategy, inventory levels were increased significantly reaching $38.1 million as of September 30, 2021 compared with $28.8 million as of year-end 2020.

Investor Conference Call

The Company will host a conference call later today, starting at 9:00 am ET (3pm 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 03-918-0610 and International +972-3-918-0610.

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 Investor RelationsContact: Contact: Ehud HelftAvi Israel (CFO) GK Investor & PublicTel: +972-76-538-6200 Relationsmrkt@rada.com Tel: +1 212 378 8040www.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 MeasuresThe 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

Nine months ended Three months ended Year ended September 30, September 30, December 31 , 2021 2020 2021 2020 2020 (Unaudited) Audited Income fromoperations $ 14,487 $ 3,002 $ 6,310 $ 2,126 $ 5,640 before taxFinancialexpenses (140 ) (311 ) (18 ) (116 ) (167 )(income),netDepreciation 2,600 1,612 1,001 598 2,289 Employeesnon-cash 2,212 1,022 885 340 1,436 optioncompensationOthernon-cash 135 409 - 178 476 amortization Adjusted $ 19,294 $ 5,734 $ 8,178 $ 3,126 $ 9,674 EBITDA

CONSOLIDATED BALANCE SHEETS

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

ASSETS September 30, December 31, 2021 2020 Unaudited Audited CURRENT ASSETS: Cash and cash equivalents $ 86,641 $ 36,289 Restricted cash 492 567 Trade receivables 28,944 14,095 Contract assets 349 756 Other receivables and prepaid expenses 2,311 1,637 Inventories 38,108 28,783 Total current assets 156,845 82,127 LONG-TERM ASSETS: Investment in affiliated company 3,000 - Long-term receivables and other deposits 251 230 Property, plant and equipment, net 16,898 13,968 Deferred tax assets 5,767 - Operating lease right-of-use assets 12,108 10,581 Total long-term assets 38,024 24,779 Total assets $ 194,869 $ 106,906 CURRENT LIABILITIES: Short term loan $ - $ 454 Trade payables 19,070 10,603 Other accounts payable and accrued 11,012 9,855 expensesAdvances from customers 817 2,323 Contract liabilities 620 232 Operating lease short-term liabilities 2,294 1,885 Total current liabilities 33,813 25,352 LONG-TERM LIABILITIES: Accrued severance-pay and other long-term 787 789 liabilitiesOperating lease long-term liabilities 9,834 8,732 Total long-term liabilities 10,621 9,521 RADA SHAREHOLDERS' EQUITY Share capital - Ordinary shares of NIS 0.03 par value -Authorized: 100,000,000 shares onSeptember 30, 2021 and December 31, 2020; 488 440 Issued and outstanding: 49,365,136 onSeptember 30, 2021 and 43,724,446 atDecember31, 2020 respectivelyAdditional paid-in capital 203,044 144,944 Accumulated deficit (53,097 ) (73,351 ) Total equity 150,435 72,033 Total liabilities and equity $ 194,869 $ 106,906

CONSOLIDATED STATEMENTS OF OPERATIONS

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

Nine months ended Three months ended Year ended September 30, September 30, December 31, 2021 2020 2021 2020 2020 (Unaudited) Audited Revenues $ 85,476 $ 52,936 $ 32,004 $ 20,359 $ 76,217 Cost of 50,992 33,580 18,749 12,598 47,882revenues Gross profit 34,484 19,356 13,255 7,761 28,335 Operating expenses:Research and 7,478 6,468 2,485 2,230 8,846developmentMarketing and 4,609 3,671 1,653 1,286 5,017sellingGeneral and 8,050 6,526 2,825 2,235 8,972administrativeNet loss fromsale of fixed - - - - 27assetTotaloperating 20,137 16,665 6,963 5,751 22,862expenses:Operating 14,347 2,691 6,292 2,010 5,473income Otherfinancialincome 140 311 18 116 167(expenses),net Income before 14,487 3,002 6,310 2,126 5,640taxes Tax income / 5,767 - (271 ) - -(expense) Net income 20,254 3,002 6,039 2,126 5,640 Basic netincome per $ 0.42 $ 0.07 $ 0.12 $ 0.05 $ 0.13ordinary share Diluted netincome per $ 0.41 $ 0.07 $ 0.12 $ 0.05 $ 0.13Ordinary share Weightedaverage numberof Ordinaryshares used 47,874,320 43,209,153 49,307,039 43,541,002 43,321,058for computingbasic netincome pershare Weightedaverage numberof Ordinaryshares used 49,778,631 44,297,058 51,025,170 44,849,311 44,565,379for computingdiluted netincome pershare