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RADA Reports Record Q2/2020 Results and Increases 2020 Revenue Guidance to $70 Million

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RADA Electronic Industries Ltd. reported a significant 75% year-over-year revenue growth in Q2 2020, totaling $17.5 million. The company achieved a net income of $0.7 million and Adjusted EBITDA of $1.7 million, marking a turnaround from losses in Q2 2019. For the first half of 2020, revenues reached $32.6 million, reflecting a 74% increase. RADA raised its 2020 revenue guidance to over $70 million, driven by strong demand for its radar solutions amid military modernization efforts. The company maintains $30 million in net cash to support future growth.

Positive
  • 75% year-over-year revenue growth in Q2 2020, reaching $17.5 million.
  • Net income of $0.7 million and Adjusted EBITDA of $1.7 million in Q2, a significant improvement from previous year.
  • 2020 revenue guidance increased to over $70 million, implying over 58% growth year-over-year.
  • Net cash level of $30 million supports working capital and R&D needs.
Negative
  • Inventory level increased to $26.5 million from $17.2 million, which could indicate overstocking risks.

NETANYA, Israel, Aug. 11, 2020 /PRNewswire/ -- RADA Electronic Industries Ltd. (NASDAQ: RADA) announced today its financial results for the three and six months periods ended June 30, 2020.

Highlights of the second quarter of 2020

  • Quarterly revenues up 75% year-over-year to a record $17.5 million
  • Net income of $0.7 million and Adjusted EBITDA of $1.75 million10% of revenue
  • 2020 revenue guidance increased to over $70 million, implying over 58% growth year-over-year, with continued sequential revenue growth throughout the remainder of the year
  • US manufacturing facility at full operation to supply US market demand.

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 a significant 75% year-over-year revenue growth and sequential quarterly growth of 16%. Our strong revenue growth, stable gross margins and stabilizing operating expenses are yielding strong EBITDA improvement. We reported Adjusted EBITDA of $1.7 million in the quarter, which was more than double that of the first quarter."

Continued Mr. Sella, "Our radars enable life-saving active protection solutions for advanced military tactical forces and critical infrastructure, and are in the heart of current modernization programs, especially in the USA. The strong demand for our radars is being driven by significant and urgent counter-UAV, SHORAD and C-RAM needs in the US and other geographies. Our orders in-hand have enabled us to increase our 2020 revenue guidance to over $70 million. As our end-markets become mainstream, we expect the growth to continue throughout the remainder of this year and into 2021. Our net cash level of $30 million is sufficient for our working capital and R&D needs to support our expected strong growth."

2020 Second Quarter Summary

Revenues totaled $17.5 million in the quarter compared with revenues of $10 million in the second quarter of 2019, an increase of 75%.

Gross profit totaled $6.2 million in the quarter (36% of revenues), an increase of 73% compared to gross profit of $3.6 million in the second quarter of 2019 (36% of revenues).

Operating income was $0.6 million in the quarter compared to an operating loss of $0.8 million in the second quarter of 2019.

Net income attributable to RADA's shareholders in the quarter was $0.7 million, or $0.02 per share, compared to a net loss of $0.6 million, or $0.01 per share, in the second quarter of 2019.

Adjusted EBITDA was $1.7 million in the quarter compared to adjusted EBITDA loss of $0.3 million in the second quarter of 2019.

2020 First Half Summary

Revenues totaled $32.6 million in the first half of 2020 compared with revenues of $18.7 million in the first half of 2019, an increase of 74%.

Gross profit totaled $11.6 million in the first half (36% of revenues), an increase of 72% compared to gross profit of $6.7 million in the first half of 2019 (36% of revenues).

Operating income was $0.7 million in the first half of 2020 compared to an operating loss of $1.4 million in the first half of 2019.

Adjusted EBITDA was $2.6 million in the first half of 2020 compared to adjusted EBITDA loss of $0.3 million in the first half of 2019.

Net income attributable to RADA's shareholders in the first half was $0.9 million, or $0.02 per share, compared to a net loss of $1 million, or $0.03 per share, in the first half of 2019.

As of June 30, 2020, RADA had net cash and cash equivalents of $29.5 million compared to $13.8 million as of year-end 2019. The inventory level has increased to $26.5 million from $17.2 million as at the end of 2019. RADA management decided to strategically increase the inventory level to support the future expected growth and to ensure full availability of components, given the current 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 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 1-888-281-1167; 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/corp/corporate-ir.html  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: +972-9-892-1111

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



Six months ended
June 30,


Three months ended
June 30,


 Year ended

December 31,


2020

2019


2020

2019


2019


(Unaudited)


Audited









Operating Income (loss)

$     680

$  (1,401)


$      634

$    (843)


$     (2,103)

Depreciation

1,014

540


541

281


1,301

Non-cash stock-based
compensation expense

 

682

 

560


 

401

 

288


 

1,150

Other non-cash
amortization

 

232

 

6


 

169

 

6


 

59









Adjusted EBITDA

$  2,608

$    (295)


$    1,745

$    (268)


$         407










 

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


ASSETS


June 30,
2020


December 31,
2019



Unaudited


Audited

CURRENT ASSETS:





Cash and cash equivalents


$    29,908


$     13,754

Restricted cash


495


380

   Trade receivables


18,933


13,765

Contract assets


1,045


1,269

Other receivables and prepaid expenses


2,412


1,673

Inventories


26,474


17,196






Total current assets


79,267


48,037






LONG-TERM ASSETS:





  Long-term receivables and other deposits 


63


97

  Property, plant and equipment, net


11,282


9,127

  Operating lease right-of-use asset


7,585


7,654

Total long-term assets


18,930


16,878






Total assets


$   98,197


$            64,915

LIABILITIES AND SHAREHOLDERS' EQUITY





CURRENT LIABILITIES:





Short term loan


$        455


$             -

Trade payables


15,756


7,661

Other accounts payable and accrued expenses


6,378


5,572

Advances from customers, net


751


1,563

Contract liabilities


6


196

Operating lease short-term liabilities


1,594


1,240






Total current liabilities


24,940


16,232






LONG-TERM LIABILITIES:





Accrued severance pay and other long-term liabilities


668


764

Operating lease long-term liabilities


6,073


6,499

 Total long-term liabilities


6,741


7,263

 

RADA SHAREHOLDERS' EQUITY





Share capital -





Ordinary shares of NIS 0.03 par value - Authorized: 100,000,000 shares at June
30, 2020 and December 31, 2019; Issued and outstanding: 
     
43,485,065 at June 30, 2020 and 38,456,693 at December 31, 2019.


437


394

Additional paid-in capital


145,388


121,212

Accumulated other comprehensive income


(1,195)


(1,195)

Accumulated deficit


(78,114)


(78,991)






Total RADA shareholders' equity


66,516


41,420






Total liabilities and equity


$     98,197


$            64,915


 

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



 

Six months ended
June 30,


 

Three months ended
June 30,


 

Year ended
December 31
,


2020

2019


2020

2019


2019


(Unaudited)


Audited









Revenues

$    32,577

$    18,714


$   17,506

$   10,027


$  44,331









Cost of revenues

20,980

11,975


11,288

6,441


28,394









Gross profit

11,597

6,739


6,218

3,586


15,937









Operating expenses:








Research and development

4,239

3,040


2,186

1,674


6,912

Marketing and selling

2,385

1,870


1,225

988


4,044

General and administrative

4,293

3,230


2,173

1,767


7,084

Total operating expenses:

10,917

8,140


5,584

4,429


18,040

Operating income (loss)

680

(1,401)


634

(843)


(2,103)

 

Other financial (expenses) income, net

 

197

 

43


73

 

1


(121)

Net income (loss) from continuing
operations

877

 

(1,358)


707

 

(842)


(2,224)

 

Net loss from discontinued operations

-

 

-


-

 

-


(115)

Net income (loss)

877

 

(1,358)


707

 

(842)


(2,339)

 

Net loss attributable to non-controlling
interest

-

 

 

309


-

 

 

278


309

 

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

$     877

 

 

$  (1,049)


$     707

 

 

$    (564)


$    (2,030)

 

Basic and diluted net income (loss) 
from continuing operations per
ordinary share

$    0.02

 

 

 

$   (0.03)


$    0.02

 

 

 

$   (0.01)


$      (0.05)

Basic and diluted net loss from
discontinued operations per ordinary
share

$    0.00

$     0.00


$    0.00

$     0.00


$      (0.05)

Basic net income (loss) per ordinary
share

$    0.02

$   (0.03)


$    0.02

$   (0.01)


$      (0.05)

Diluted net income (loss) per ordinary
share

$    0.02

 

$   (0.03)


$    0.02

 

$   (0.01)


$      (0.05)

Weighted average number of ordinary
shares used for computing basic net
income per share

 

 

43,041,405

 

 

38,017,281


43,403,276

 

 

38,067,024


 

 

38,148,756

Weighted average number of ordinary
shares used for computing diluted net
income per share

44,002,634

 

 

38,570,290


44,302,325

 

 

38,680,072


38,841,866

 

Cision View original content:http://www.prnewswire.com/news-releases/rada-reports-record-q22020-results-and-increases-2020-revenue-guidance-to-70-million-301109885.html

SOURCE RADA

FAQ

What were RADA's Q2 2020 revenues and growth rate?

RADA's Q2 2020 revenues were $17.5 million, reflecting a 75% year-over-year growth.

What is RADA's Adjusted EBITDA for the second quarter of 2020?

RADA reported an Adjusted EBITDA of $1.7 million for Q2 2020.

What is the updated revenue guidance for RADA in 2020?

RADA increased its 2020 revenue guidance to over $70 million.

How did RADA perform in the first half of 2020?

In the first half of 2020, RADA generated revenues of $32.6 million, a 74% increase compared to the same period in 2019.

What was RADA's net income for the second quarter of 2020?

RADA's net income for Q2 2020 was $0.7 million.

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