NETANYA, Israel, Sept. 1, 2015 (GLOBE NEWSWIRE) -- RADA Electronic Industries Ltd. (NASDAQ:RADA) today announced its financial results for the second quarter and the six months ended June 30, 2015.
2015 Second Quarter Results
Revenues totaled $4.1 million, a 37% decrease compared to $6.4 million in the second quarter of 2014.
Gross Profit totaled $0.7 million, a 67% decrease compared to $2.04 million in the second quarter of 2014.
Operating Expenses totaled $1.2 million, a 12% decrease compared to $1.4 million in the second quarter of 2014.
Financial Expenses totaled $1,452,000, a 454% increase compared to financial expenses of $262,000 in the second quarter of 2014. Financial expenses in the second quarter of 2015 include approximately $1.2 million of non-cash amortization of a beneficial conversion feature applicable to our outstanding debt due to shareholders.
Net loss for the second quarter was $2,001,000, or ($0.22) per share on a basic and diluted basis compared to earnings of $385,000, or $0.04 per share on basic and diluted basis, for the second quarter of 2014. The net loss for the second quarter of 2015 includes a non-cash amortization expense of approximately $1,223,000.
2015 First Half Results
Revenues totaled $7.7 million, a 34% decrease compared to $11.8 million for the same period in 2014.
Gross profit totaled $1.3 million, a 64% decrease compared to $3.7 million for the same period in 2014.
Operating Expenses totaled $2.3 million, a 10% decrease compared to $2.6 million for the same period in 2014.
Financial Expenses totaled $1,782,000, a 221% increase compared to financial expenses of $555,000 for the same period in 2014. Financial expenses in the first half of 2015 also includes approximately $1.2 million of non-cash amortization of a beneficial conversion feature applicable to our outstanding debt.
Net loss for the first six months of 2015 was $2,778,000, or ($0.31) per share on a basic and diluted basis, compared with earnings of $542,000, or $0.06 per share on a basic and diluted basis, for the comparable period in 2014. The net loss for the first six months of 2015 includes a non-cash amortization expense of approximately $1,223,000.
Management Comment
Commenting on the results, Zvika Alon, RADA's Chief Executive Officer said, "On July 30 we announced the closing of a public offering of our ordinary shares which resulted in $8,500,000 in gross proceeds to our company. As approved by our shareholders in April 16 2015, the net proceeds of this offering was applied in reduction of debt owed to shareholders and enabled the company to repay approximately 70% of such outstanding debt shortly after the closing. The reduction of our debt significantly improved our balance sheet. The transaction structure that was approved by RADA's shareholders, also included the contingent right of certain shareholders of the company to convert the outstanding balance of loans provided by them into ordinary shares at a discount to market, and results in a significant amount of non-cash financing expenses to the company. Such non-cash amortization expenses will continue until the shareholders may choose to convert all of the remaining debt held by them (which cannot be predicted by the company), or through August 2016 when the remaining debts are due to be repaid, whichever is earlier.
"The delays in production deliveries indicated in our first quarter 2015 earnings report, were almost fully recovered during the second quarter. However our total revenues during this second quarter are still low as some orders expected to be placed during the first half of 2015 did not occur. Although we continue to expect to receive these orders in the next months, the timing of deliveries for such orders is now uncertain. The low total revenues during the second quarter has reduced our gross margin as well as our operating income as we maintain a similar level of engineering, operating expenses and R&D as we did during 2014. We are encouraged by the previously announced initial orders we have received for our radar products; including from the Israeli MOD for multiple radars to enhance Israel's national alert capability for its southern border and the orders for testing and evaluation purposes received from a branch of the U.S. military and a number of other major military contractors."
About RADA
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.
Note: 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 SHEET | ||
| U.S. dollars in thousands, except per share data | ||
| ASSETS | June 30, 2015 | December 31, 2014 |
| Unaudited | Audited | |
| Cash and cash equivalents | $1,575 | $1,786 |
| Restricted cash | 382 | 349 |
| Trade receivables (net of allowance for doubtful accounts of $ 12 and $ 24 at June 30, 2015 and at December 31, 2014, respectively) | 4,450 | 3,455 |
| Costs and estimated earnings in excess of billings on uncompleted contracts | 1,780 | 2,657 |
| Other accounts receivables and prepaid expenses | 599 | 428 |
| Inventories | 6,439 | 6,651 |
| Total current assets | 15,225 | 15,326 |
| LONG-TERM RECEIVABLES AND OTHER DEPOSITS | 1,374 | 1,394 |
| PROPERTY, PLANT AND EQUIPMENT, NET | 2,874 | 2,790 |
| OTHER ASSET - GOODWILL | 587 | 587 |
| Total assets | $20,060 | $20,097 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| CURRENT LIABILITIES: | ||
| Bank credit | $1,930 | $1,589 |
| Trade payables | 2,033 | 1,315 |
| Convertible shareholders' loans | -- | 8,120 |
| Other accounts payable and accrued expenses | 4,664 | 4,267 |
| Total current liabilities | 8,627 | 15,291 |
| LONG-TERM LIABILITIES: | ||
| Convertible shareholders' loans, net | 1,223(*) | -- |
| Accrued severance pay and other long term liabilities | 681 | 634 |
| Total long-term liabilities | 1,904 | 634 |
| RADA SHAREHOLDERS' EQUITY | ||
| Share capital - | ||
| Ordinary shares of NIS 0.015 par value - Authorized: 30,000,000 shares at June 30, 2015 and 16,333,333 shares at December 31, 2014; Issued and outstanding: 8,918,647 at June 30, 2015 and at December 31, 2014 respectively. | 119 | 119 |
| Additional paid-in capital | 79,004 | 70,884 |
| Accumulated other comprehensive income | 551 | 536 |
| Accumulated deficit | (70,770) | (67,992) |
| Total RADA shareholders' equity | 8,904 | 3,547 |
| Non-controlling interest | 625 | 625 |
| Total equity | 9,529 | 4,172 |
| Total liabilities and equity | $20,060 | $20,097 |
| (*) Convertible shareholders loans is presented net of loan discount derived of beneficial conversion feature in the amount of $6,981 as of June 30, 2015. | ||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||
| U.S. dollars in thousands, except per share data | |||||
| Six months ended | Three months ended | Year ended | |||
| June 30, | June 30, | December 31, | |||
| 2015 | 2014 | 2015 | 2014 | 2014 | |
| (Unaudited) | Audited | ||||
| Revenues | $7,724 | $11,784 | $4,076 | $6,437 | $22,481 |
| Cost of revenues | 6,407 | 8,132 | 3,394 | 4,398 | 15,944 |
| Gross profit | 1,317 | 3,652 | 682 | 2,039 | 6,537 |
| Operating expenses: | |||||
| Research and development | 399 | 380 | 227 | 150 | 789 |
| Marketing and selling | 1,086 | 1,206 | 556 | 737 | 2,392 |
| General and administrative | 832 | 977 | 441 | 510 | 1,901 |
| Total operating expenses: | 2,317 | 2,563 | 1,224 | 1,397 | 5,082 |
| Operating profit (loss) | (1,000) | 1,089 | (542) | 642 | 1,455 |
| Financial expenses, net | 559 | 555 | 229 | 262 | 1,254 |
| Financial expenses related to amortization of a beneficial conversion feature | 1,223 | -- | 1,223 | -- | -- |
| Consolidated profit (loss) | (2,782) | 534 | (1,994) | 380 | 201 |
| Less: Net (income)loss attributable to Non-controlling interest | 4 | 8 | (7) | 5 | 7 |
| Net income (loss) attributable to RADA's shareholders | ($2,778) | $542 | ($2,001) | $385 | $208 |
| Earnings (loss) per share: | |||||
| Basic and diluted earnings (loss) per share | ($0.31) | $0.06 | ($0.22) | $0.04 | $0.02 |
| Weighted average number of Ordinary shares used for computing basic and diluted loss per share | 8,988,396 | 8,918,647 | 8,988,396 | 8,918,647 | 8,944,803 |