NETANYA, Israel, Nov. 14, 2018 (GLOBE NEWSWIRE) -- RADA Electronic Industries Ltd. (NASDAQ: RADA) announced today its financial results for the quarter ended September 30, 2018.
Management Comments
Dov Sella, RADA's Chief Executive Officer commented, “2018 represents a year of solid progress for RADA, globally and also in the United States where we established and continue to invest in our presence and capabilities this year. We have already built positive momentum, winning some highly strategic initial orders with key customers, as well as some early follow-on orders from certain of those customers. Looking out over the coming quarters, we believe that follow-on orders will dominate, with significant potential over the initial orders. We expect to see the fruits of our investments to truly begin to accrue to RADA, next year and beyond.”
Continued Mr. Sella, “From a revenue perspective, 2018 has been strong and based on our increased guidance of $30 million which we are announcing today, we will end the year with record revenue, up around 15% over those of last year, one of the strongest years ever for RADA. Furthermore, we achieved last year’s record revenue on the back of one specific large order, while in 2018 our revenue base is much more diversified. 2018 has shaped up to be a very good year for RADA, but our real excitement is as we begin to realize on our significant potential in 2019 and beyond,” concluded Mr. Sella.
Updated Guidance
RADA’s management is increasing its guidance for 2018, expecting revenues of approximately $30 million, up from the former expectation of $27 million.
2018 Third Quarter Summary
Revenues totaled $7.05 million in the third quarter of 2018, at a similar level compared to revenues of $7.07 million in the third quarter of 2017.
Gross Profit totaled $2.5 million in the third quarter of 2018 (gross margin of 35.6%) compared to gross profit of $2.8 million (gross margin of 38.9%) in the third quarter of 2017.
Operating Loss was $145 thousand in the third quarter of 2018 compared to operating income of $1.0 million in the third quarter of 2017. Operating expenses increased in the quarter to $2.7 million from $1.7 million in the third quarter of last year, primarily due to increased investment in R&D and in SG&A due to RADA’s recently established presence in the United States.
Net Income (Loss) attributable to RADA’s shareholders in the third quarter of 2018 was a loss of $21 thousand compared to net income of $801 thousand in the third quarter of 2017.
Non-GAAP EBITDA was $308 thousand in the third quarter of 2018 compared to EBITDA of $1.4 million in the third quarter of 2017.
In terms of liquidity and capital resources, as of September 30, 2018, the Company had cash and cash equivalents, of $13.2 million or $0.40 per share compared with $12.4 million or $0.40 per share as of December 31, 2017. As of September 30, 2018, the Company did not have any financial liabilities.
Nine months 2018 Results
Revenues totaled $19.6 million in the nine months of 2018, an increase of more than 15% compared to revenues of $17.1 million in the nine months of 2017.
Gross Profit totaled $7.1 million in the nine months of 2018 (gross margin of 36%) compared to gross profit of $6.1 million (gross margin of 36%) in the nine months of 2017.
Operating income was $165 thousand in the nine months of 2018 compared to operating income of $1.9 million in the nine months of 2017. Operating expenses increased in the nine months to $6.9 million from $4.2 million in the nine months of last year, primarily due to increased investment in R&D and SG&A, due to RADA’s recently established presence in the United States.
Net Income attributable to RADA’s shareholders in the nine months of 2018 was $250 thousand, compared with net income of $1.7 million in the nine months of 2017.
Cash flow from operations for the nine months ended September 30, 2018 was $0.7 million, mainly due to strong collections from customers.
Investor Conference Call
The Company will host a conference call later today, starting at 09:00 am ET (4pm Israel time). Dov Sella, Chief Executive Officer and Avi Israel, Chief Financial Officer, will host the call and will be available to answer questions after presenting the results.
Dial in numbers are: US 1-888-407-2553; 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 company. The Company specializes in the development, production, and sales of tactical land radar for force and border protection, and avionics systems (including inertial navigation systems) for fighters and UAVs.
| Company Contact: Avi Israel - CFO RADA Electronic Industries Ltd. Tel: +972-9-8921111 mrkt@rada.com | Investor Relations Contact: Ehud Helft/Gavriel Frohwein 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. 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 EBITDA consists of net profit (loss) according to U.S. GAAP, excluding net financing expenses, taxes, depreciation and amortization and ESOP expenses. EBITDA should not be considered in isolation or as a substitute for net profit (loss) or other statement of operations data prepared in accordance with GAAP as a measure of profitability. 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
| Three months ended Sep 30, | ||
| 2018 | 2017 | |
| Operating Income (Loss) | (145) | 1,019 |
| Depreciation | 200 | 158 |
| Employees Option Compensation | 245 | 142 |
| Other non-cash amortization | 8 | 61 |
| Non-GAAP EBITDA | 308 | 1,380 |
| CONSOLIDATED BALANCE SHEETS | ||||||||
| U.S. dollars in thousands, except share and per share data | ||||||||
| ASSETS | Sep 30, 2018 | December 31, 2017 | ||||||
| Unaudited | Audited | |||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 13,178 | $ | 12,417 | ||||
| Restricted cash | 422 | 322 | ||||||
| Trade receivables (net of allowance for doubtful accounts of $2 at Sep 30, 2018 and $14 at December 31, 2017) | 8,023 | 7,286 | ||||||
| Contract assets | 994 | 1,140 | ||||||
| Other receivables and prepaid expenses | 869 | 330 | ||||||
| Inventories | 8,185 | 7,910 | ||||||
| Current assets related to discontinued operations | 1,985 | 2,468 | ||||||
| Total current assets | 33,656 | 31,873 | ||||||
| LONG-TERM ASSETS: | ||||||||
| Long-term receivables and other deposits | 74 | 68 | ||||||
| Property, plant and equipment, net | 4,471 | 3,915 | ||||||
| Long-term assets related to discontinued operations | 103 | 319 | ||||||
| Total long term assets | 4,648 | 4,302 | ||||||
| Total assets | $ | 38,304 | $ | 36,175 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Trade payables | $ | 3,201 | $ | 2,904 | ||||
| Other accounts payable and accrued expenses | 2,952 | 2,814 | ||||||
| Advances from customers | 52 | 41 | ||||||
| Contract liabilities | 768 | 145 | ||||||
| Current liabilities related to discontinued operations | 293 | 328 | ||||||
| Total current liabilities | 7,266 | 6,232 | ||||||
| LONG-TERM LIABILITIES: | ||||||||
| Accrued severance pay and other long-term liabilities | 761 | 758 | ||||||
| Total long-term liabilities | 761 | 758 | ||||||
| RADA SHAREHOLDERS' EQUITY | ||||||||
| Share capital - | ||||||||
| Ordinary shares of NIS 0.03 par value - Authorized: 100,000,000 shares at Sep 30, 2018 and 37,500,000 at December 31, 2017; Issued and outstanding: 32,908,836 at Sep 30, 2018 and 31,392,040 at December 31, 2017. | 349 | 335 | ||||||
| Additional paid-in capital | 106,354 | 104,923 | ||||||
| Accumulated other comprehensive income | 77 | 392 | ||||||
| Accumulated deficit | (76,874 | ) | (77,124 | ) | ||||
| Total RADA shareholders’ equity | 29,906 | 28,526 | ||||||
| Non-controlling interest | 371 | 659 | ||||||
Total equity | 30,277 | 29,185 | ||||||
Total liabilities and equity | $ | 38,304 | $ | 36,175 | ||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| U.S. dollars in thousands, except share and per share data | ||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | 2017 | ||||||||||||
| (Unaudited) | Audited | |||||||||||||||
| Revenues | $ | 19,641 | $ | 17,063 | $ | 7,045 | $ | 7,071 | $ | 26,182 | ||||||
| Cost of revenues | 12,571 | 10,975 | 4,535 | 4,316 | 17,919 | |||||||||||
| Gross profit | 7,070 | 6,088 | 2,510 | 2,755 | 8,263 | |||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 2,075 | 886 | 791 | 480 | 1,575 | |||||||||||
| Marketing and selling | 2,013 | 1,484 | 728 | 629 | 2,137 | |||||||||||
| General and administrative | 2,817 | 1,839 | 1,136 | 627 | 2,568 | |||||||||||
| Total operating expenses: | 6,905 | 4,209 | 2,655 | 1,736 | 6,280 | |||||||||||
| Operating Income(Loss) | 165 | 1,879 | (145 | ) | 1,019 | 1,983 | ||||||||||
| Amortization of shareholders' convertible loans discount and beneficial conversion feature | - | 102 | - | 83 | 103 | |||||||||||
| Other financial expenses (income), net | (48 | ) | 95 | (45 | ) | 105 | 53 | |||||||||
Net income (loss) from continuing operations | 213 | 1,682 | (100 | ) | 831 | 1,827 | ||||||||||
| Net income (loss) from discontinued operations | (172 | ) | 3 | (75 | ) | (37 | ) | 515 | ||||||||
| Net income (Loss) | 41 | 1,685 | (175 | ) | 794 | 2,342 | ||||||||||
| Net income (loss) attributable to non- controlling interest | (209 | ) | 1 | (154 | ) | (7 | ) | 103 | ||||||||
| Net income (Loss) attributable to RADA Electronic Industries' shareholders | $ | 250 | $ | 1,684 | $ | (21 | ) | $ | 801 | $ | 2,239 | |||||
| Basic net income from continuing operations per ordinary shares | $ | 0.01 | $ | 0.07 | $ | 0.00 | $ | 0.03 | $ | 0.07 | ||||||
| Diluted net income from continuing operations per Ordinary share | $ | 0.01 | $ | 0.07 | $ | 0.00 | $ | 0.03 | $ | 0.06 | ||||||
| Basic and diluted net income(loss) from discontinued operations per ordinary share | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.02 | ||||||
| Basic net income per ordinary share | $ | 0.01 | $ | 0.07 | $ | 0.00 | $ | 0.03 | $ | 0.09 | ||||||
| Diluted net income per ordinary share | $ | 0.01 | $ | 0.07 | $ | 0.00 | $ | 0.03 | $ | 0.08 | ||||||
| Weighted average number of ordinary shares used for computing basic net income per share | 32,800,284 | 22,915,032 | 32,907,828 | 25,146,803 | 24,956,915 | |||||||||||
| Weighted average number of ordinary shares used for computing diluted net income per share | 33,327,108 | 26,296,106 | 33,396,519 | 28,820,589 | 28,126,509 | |||||||||||