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RADA Reports Record Q2/2021 Results

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RADA Electronic Industries reported a strong financial performance for Q2 2021, with revenues of $28.3 million, marking a 61% year-over-year increase. Gross margin rose to 40% from 36% in Q2 2020. Net income surged to $10.4 million, significantly up from $0.7 million the previous year. Adjusted EBITDA improved to $6.3 million, reflecting a margin of 22%. The company's cash position strengthened with $95.7 million in net cash. A deferred tax asset of $6 million was recorded, underscoring ongoing profitability.

Positive
  • Revenues increased by 61% year-over-year to $28.3 million.
  • Gross margin improved to 40%, a significant increase from 36% in Q2 2020.
  • Net income rose sharply to $10.4 million compared to $0.7 million in the prior year.
  • Adjusted EBITDA of $6.3 million, with a margin increase to 22%.
Negative
  • None.

Revenues of $28.3 million, up 61% year-over-year and continued improvement in profitability

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 RADA’s 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 $17.5 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 $6.2 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 RADA’s 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 RADA’s 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 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 a 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 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)
Tel: +972-76-538-6200
mrkt@rada.com
www.rada.com

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, 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 OPERATING INCOME TO ADJUSTED EBITDA
U.S. dollars in thousands

 Six months ended
June 30,
 Three months ended
June 30,
 Year ended
December 31,
  2021  2020   2021  2020   2020 
                (Unaudited) Audited
        
Income from operations before tax$8,177 

$


877
  $4,405 $707  $5,640 
Financial income (expenses), net (122) (197)  97  (73)  (167)
Depreciation 1,599       1,014   843           541   2,289 
Employees non-cash option compensation 1,327        682   855     401   1,436 
Other non-cash amortization 135        232   127          169                 476 
        
Adjusted EBITDA$11,116 $2,608  $6,327 $1,745  $9,674 
        

 

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


 


 


ASSETS

 

June 30, 2021

 

December 31, 2020

  

Unaudited

 

Audited

CURRENT ASSETS:

    

Cash and cash equivalents

 

$

95,655

  

$

36,289

 

Restricted cash

  

576

   

      567

 

Trade receivables

  

20,161

   

14,095

 

Contract assets

  

157

   

      756

 

Other receivables and prepaid expenses

  

1,273

   

      1,637

 

Inventories

  

31,593

   

28,783

 
     

Total current assets

  

149,415

   

82,127

 
     

LONG-TERM ASSETS:

    

Investment in subsidiary

  

3,000

   

-

 

Long-term receivables and other deposits

  

245

   

230

 

Property, plant and equipment, net

  

16,473

   

13,968

 

   Deferred tax assets

  

6,038

   

-

 

Operating lease right-of-use assets

  

11,947

   

10,581

 

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 and accrued expenses

  

9,725

   

9,855

 

Advances from customers

  

4,360

   

2,323

 

Contract liabilities

  

172

   

232

 

Operating lease short-term liabilities

  

2,276

   

1,885

 
     

Total current liabilities

  

33,181

   

25,352

 
     

LONG-TERM LIABILITIES:

    

Accrued severance pay and other long-term liabilities

  

775

   

789

 

Operating lease long-term liabilities

  

9,651

   

8,732

 

Total long-term liabilities

  

10,426

   

9,521

 

 

RADA SHAREHOLDERS' EQUITY

    

Share capital -

    
Ordinary shares of NIS 0.03 par value - Authorized: 100,000,000 shares at June 30, 2021 and December 31, 2020; Issued and outstanding: 49,253,171 at June 30, 2021 and 43,724,446 at December 31, 2020 respectively  488   440 

Additional paid-in capital

  

202,159

   

144,944

 

Accumulated deficit

  

(59,136

)

  

(73,351

)

     

Total equity

  

143,511

   

72,033

 
     

 

Total liabilities and equity

 

$

187,118

  

$

        106,906

 


 
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,

  

2021

  

2020

 

 

2021

  

2020

 

 

2020

 

(Unaudited)


Audited

   

 

  

 

 

Revenues

$

    53,472


$

    32,577

 

$

   28,255

 

$

   17,506

 

$

      76,217

 

 

 

 

 

 

 

 

Cost of revenues

 

   32,243

  

      20,980

 

 

    16,990

  

    11,288


 

        47,882

 

 

 

 

 

 

 

 

Gross profit

 

      21,229

  

      11,597

 

 

    11,265

  

      6,218

 

 

        28,335

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

       4,993

  

       4,239

 

 

      2,555

  

      2,186

 

 

         8,846

Marketing and selling

 

       2,956

  

       2,385

 

 

      1,530

  

      1,225

 

 

         5,017

General and administrative

 

       5,225

  

       4,293

 

 

      2,678

  

      2,173

 

 

         8,972

Net loss from sale of fixed asset

 

             -

  

             -

 

 

            -

  

            -

 

 

             27

Total operating expenses:

 

     13,174

  

     10,917

 

 

      6,763

  

      5,584

 

 

       22,862

Operating income

 

       8,055

  

         680

 

 

      4,502

  

        634

 

 

  5,473

Other financial income (expenses), net

 

 

         122

  

 

         197

 

 

        (97

)

 

          73

 

 

            167

Income before taxes

 

      8,177

  

         877

 

 

      4,405

  

        707

 

 

    5,640

Income tax

 

   6,038

  

          -

 

 

   6,038

  

            -

 

 

               -

Net income

 

     14,215

  

         877

 

 

    10,443

  

        707

 

 

5,640

Basic net income per ordinary share

$

      0.30


$

      0.02

 

$

      0.21

 

$

      0.02

 

$

         0.13 

Diluted net income per Ordinary share

$

      0.29


$

     0.02

 

$

      0.20

 

$

      0.02

 

$

         0.13

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

 

 

 

 

47,145,784

  

 

 

 

 

43,041,405


 

49,129,699

  

43,403,276


 

43,321,058


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

 

49,123,135

  

44,002,634

 

 

51,065,274

  

44,302,325

 

 

 

  
 44,412,391


FAQ

What were RADA's revenues in Q2 2021?

RADA's revenues in Q2 2021 were $28.3 million, a 61% increase year-over-year.

How much did RADA's net income increase in Q2 2021?

RADA's net income increased to $10.4 million in Q2 2021, compared to $0.7 million in Q2 2020.

What was RADA's gross margin in Q2 2021?

RADA's gross margin in Q2 2021 was 40%, up from 36% in the same quarter of 2020.

What is RADA's adjusted EBITDA for Q2 2021?

RADA's adjusted EBITDA for Q2 2021 was $6.3 million, representing a margin of 22%.

What is RADA's cash position as of June 30, 2021?

As of June 30, 2021, RADA had a net cash position of $95.7 million.

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