RADA Electronic Industries Announces First Quarter 2019 Results

RADA Electronic Industries Announces First Quarter 2019 Results

RADA Electronic Industries Announces

First Quarter 2019 Results

Continued strong revenue growth: Q1 revenues of $8.7 million, up 44% year-over-year Netanya, Israel, May 21, 2019 – RADA Electronic Industries Ltd. (NASDAQ: RADA) announced today its financial results for the quarter ended March 31, 2019. Highlights of the first quarter of 2019. Past and ongoing investments promoting growth;. Revenues of $8.7 million, up 44% year-over-year;. Net loss of $0.5 million;. Q1-end net cash position of $21.5 million. Management Comments

Dov Sella, RADA’s Chief Executive Officer commented, “We are very pleased with our continued top line growth, based on revenues from our software-defined tactical radars. These are early fruits from the significant and ongoing investments we are making in R&D, and sales and marketing. Anticipating growth in the US, we are establishing an additional radar production line, to become active this year. As 2019 progresses, we anticipate that the radar market will transform from its current emerging phase to a programs-of-record phase, where we will start to see the generation of significant backlog, primarily from the US.”

Continued Mr. Sella, “Our strategy very much remains on track. Considering the strong growth this quarter and looking forward over the remainder of 2019, we continue to expect revenues in excess of $40 million for the year. This represents year-over-year growth of at least 43%, driven primarily by accelerating sales of tactical radars.”

2019 First Quarter Summary

Revenues totaled $8.7 million in the quarter, compared with revenues of $6.0 million in the first quarter of 2018, an increase of 44%.

Gross profit totaled $3.2 million in the quarter (or 36% of revenues), an increase of 45% compared to gross profit of $2.2 million in the first quarter of 2018 (or 36% of revenues). Operating loss was $0.6 million in the quarter compared to operating income of $0.2 million in the first quarter of 2018. Net loss attributable to RADA’s shareholders in the quarter was $0.5 million, or $0.01 per share, compared to a net profit of $0.2 million, or $0.01 per share, in the first quarter of 2018.

As of March 31, 2019, RADA had net cash and cash equivalents of $21.5 million compared to $20.8 million as of year-end 2018.

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 1-888-668-9141; UK 0800-917-5108; Israel 03-918-0610 and International +972-3-918-0610.

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 contractor. The Company specializes in the development, production, and sales of tactical land radar for force and border protection, inertial navigation systems for air and land applications and avionics systems and upgrades.

Contact Information

Company Contact:

Avi Israel (CFO)

Tel: +972-9-892-1111

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www.rada.com

Investor Relations Contact:

Ehud Helft/Gavriel Frohwein

GK Investor & Public Relations

Tel: +1 646 688 3559

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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.

CONSOLIDATED BALANCE SHEETS

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

ASSETS

March 31, 2019

December 31, 2018

Unaudited

Audited

CURRENT ASSETS:

Cash and cash equivalents

$ 21,499

$ 20,814

Restricted cash

422

422

Trade receivables (net of allowance for doubtful accounts of $1.5 at March 31, 2019 and December 31, 2018)

11,439

13,382

Contract assets

1,185

899

Other receivables and prepaid expenses

2,156

506

Inventories

15,459

11,244

Current assets related to discontinued operations

1,524

Total current assets

52,160

48,791

LONG-TERM ASSETS:

Long-term receivables and other deposits

85

79

Property, plant and equipment, net

4,588

4,632

Operating lease right-of-use asset

1,894

Total long-term assets

6,567

4,711

Total assets

$ 58,727

$ 53,502

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:

Trade payables

$ 7,665

$ 5,650

Other accounts payable and accrued expenses

4,166

3,842

Advances from customers, net

866

727

Contract liabilities

515

366

Operating lease short-term liabilities

837

Current liabilities related to discontinued operations

366

Total current liabilities

14,049

10,951

LONG-TERM LIABILITIES:

Accrued severance pay and other long-term liabilities

722

690

Operating lease long-term liabilities

1,057

Total long-term liabilities

1,779

690

RADA SHAREHOLDERS’ EQUITY

Share capital –

Ordinary shares of NIS 0.03 par value – Authorized: 100,000,000 shares at March 31, 2019 and December 31, 2018; Issued and outstanding: 38,067,024 at March 31, 2019 and 37,516,891 at December 31, 2018.

390

386

Additional paid-in capital

120,338

118,568

Accumulated other comprehensive income

220

Accumulated deficit

(77,446)

(76,961)

Total RADA shareholders’ equity

43,282

42,213

Non-controlling interest

(383)

(352)

Total equity

42,899

41,861

Total liabilities and equity

$ 58,727

$ 53,502

CONSOLIDATED STATEMENTS OF OPERATIONS

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

Three months ended

March 31,

Year ended December 31,

2019

2018

2018

Unaudited

Audited

Revenues

$ 8,687

$ 6,020

$ 28,032

Cost of revenues

5,534

3,841

17,914

Gross profit

3,153

2,179

10,118

Operating expenses:

Research and development

1,366

592

3,092

Marketing and selling

882

634

2,860

General and administrative

1,463

748

4,001

Net loss from sale of fixed assets

103

Total operating expenses

3,711

1,974

10,056

Operating income (loss)

(558)

205

62

Financial income, net

42

8

119

Net income (loss) from continuing operations

(516)

213

181

Net income (loss) from discontinued operations

(9)

(404)

Net income (Loss)

(516) $

$ 204

$ (223)

Net income (loss) attributable to non-controlling interest

(31)

(16)

(386)

Net income (loss) attributable to RADA Electronic Industries’ shareholders

$ (485)

$ 220

$ 163

Basic net income (loss) from continuing operations per Ordinary share

$ )0.01 (

$ 0.01

$ 0.02

Diluted net income (loss) from continuing operations per Ordinary share

$ )0.01(

$ 0.01

$ 0.02

Basic and diluted net income (loss) from discontinued operations per Ordinary share

$ –

$ 0.00

$ (0.01)

Basic and diluted net income (loss) per Ordinary share

$ )0.01(

$ 0.01

$ 0.01

Weighted average number of Ordinary shares used for computing basic net income (loss) per share

37,966,987

32,604,550

33,184,570

Weighted average number of Ordinary shares used for computing diluted net income (loss) per share

38,454,861

33,202,955

33,716,931

In February 2016, the FASB established Topic 842, Leases, by issuing ASU 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU 2018-10, Codification Improvements to Topic 842, Leases; and ASU 2018-11, Targeted Improvements. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The Company adopted the new standard on the first day of fiscal 2019. The Company used the modified retrospective transition approach with the effective date as the date of initial application. Consequently, financial information will not be updated, and the disclosures required under the new standard will not be provided for dates and periods before January 2019. The new standard provides several optional practical expedients in transition. The Company elected the ‘package of practical expedients’, which permits us not to reassess under the new standard the prior conclusions about lease identification, lease classification and initial direct costs. The adoption of the standard resulted in a material effect on the Company’s financial statements with a balance sheet recognition of additional lease assets and lease liabilities of approximately $1.9 million as of March 31, 2019.

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