RADA Electronic Industries Announces 2016 Q3 Results
November 28 2016 - 12:00PM
RADA Electronic Industries Ltd. (NASDAQ:RADA)
announced today its financial results for the quarter ended
September 30, 2016.
Management Comments
Dov Sella, RADA's Chief Executive
Officer commented, “Reporting first time as RADA's CEO, I
am happy to indicate that performance in the third quarter improved
compared to the first half of 2016 as our backlog continued to
grow, especially in our radar business. We anticipate that our
operating results will continue to improve in the next quarter and
throughout 2017. Our recent capital raise of $3 million from our
controlling shareholder, DBSI, and the Phoenix Insurance Company
Ltd., one of Israel’s largest insurance companies, significantly
strengthened our balance sheet and will enables us to move full
speed ahead in executing our growth strategy."
Added Yossi Ben Shalom, RADA’s
chairman, “We are very happy to welcome Phoenix, a leading
Israel-based and long-term focused institutional investor, as one
of our major shareholders, joining DBSI. This represents a vote of
confidence from an important player in the capital markets of our
vision for the future and management’s potential to create
significant shareholder value."
2016 Third Quarter Compared with Prior
Quarter Summary
Net loss attributable to RADA’s
shareholders in the third quarter of 2016 was $1.0 million, or
$0.06 per share, an improvement representing a 41% reduction, when
compared to a net loss of $1.7 million, or $0.14 per share, in the
second quarter of 2016.
Revenues in the third quarter
of 2016 totaled $3.5 million, a 20% increase when compared to
revenues of $2.9 million in the second quarter of 2016.
Gross Profit
was $0.4 million in the third quarter of 2016 and $0.3 million in
the second quarter of 2016. Operating loss was
$0.9 million in the third quarter of 2016 compared to an operating
loss of $1.0 million in the second quarter of 2016.
2016 Third Quarter Results
Summary
Revenues totaled $3.5 million
in the third quarter of 2016 compared to revenues of $3.3 million
in the third quarter of 2015.
Gross Profit
totaled $0.4 million in the third quarter of 2016 compared to gross
profit of $0.6 million in the third quarter of 2015.
Operating loss was $0.9 million in the third
quarter of 2016 compared to an operating loss of $0.7 million in
the third quarter of 2015.
Financial Expenses totaled $0.1
million in the third quarter of 2016 compared to financial expenses
of $1.1 million in the third quarter of 2015. The financial
expenses in the third quarter of 2015 included a non-cash
amortization expense of approximately $0.9 million. The non-cash
amortization expense was associated with the debt discount
resulting from the beneficial conversion feature applicable to a
previously outstanding loan from RADA’s former principal
shareholder. The Company recorded this non-cash amortization
expense until the repayment of the loan on June 16, 2016. On that
date RADA obtained a $3.2 million loan from DBSI, which was used to
repay the loan from the former principal shareholder. The loan from
DBSI has a beneficial conversion feature that would result in a
non-cash amortization expense throughout the term of the loan of
approximately $0.1 million.
Net loss attributable to RADA’s
shareholders in the third quarter of 2016, was $1.0 million or
$0.06 per share, an improvement when compared with a net loss of
$1.7 million or $0.25 per share in the third quarter of 2015.
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.
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
STATEMENTS OF OPERATIONS |
U.S. dollars in thousands (except share and per share
data) |
|
|
|
ASSETS |
|
September 30, 2016 |
|
December 31, 2015 |
|
|
Unaudited |
|
Audited |
CURRENT
ASSETS: |
|
|
|
|
Cash and cash equivalents |
|
$ |
1,511 |
|
|
$ |
1,754 |
|
Restricted cash |
|
|
602 |
|
|
|
609 |
|
Trade receivables (net of allowance
for doubtful accounts of $13 and $10 at September 30, 2016 and
December 31, 2015 respectively) |
|
|
3,885 |
|
|
|
4,038 |
|
Costs and estimated earnings in
excess of billings on uncompleted contracts |
|
|
1,881 |
|
|
|
2,207 |
|
Other accounts receivables and
prepaid expenses |
|
|
283 |
|
|
|
206 |
|
Inventories, net |
|
|
7,519 |
|
|
|
6,565 |
|
|
|
|
|
|
Total current assets |
|
|
15,681 |
|
|
|
15,379 |
|
|
|
|
|
|
|
|
|
|
|
LONG-TERM RECEIVABLES AND OTHER DEPOSITS |
|
|
34 |
|
|
|
119 |
|
|
|
|
|
|
|
|
|
|
|
PROPERTY, PLANT AND EQUIPMENT, NET |
|
|
3,138 |
|
|
|
3,078 |
|
Total assets |
|
$ |
18,853 |
|
|
$ |
18,576 |
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
Bank Credit |
|
$ |
2,270 |
|
|
$ |
2,416 |
|
Trade payables |
|
|
2,065 |
|
|
|
1,961 |
|
Convertible note and Loans from
shareholders, net |
|
|
- |
|
|
|
1,634 |
|
Other accounts payable and accrued
expenses |
|
|
2,140 |
|
|
|
2,846 |
|
|
|
|
|
|
Total current liabilities |
|
|
6,475 |
|
|
|
8,857 |
|
|
|
|
|
|
LONG-TERM LIABILITIES: |
|
|
|
|
Convertible Note and Loans from
shareholders, net |
|
|
3,063 |
|
|
|
- |
|
Accrued severance pay and other
long term liability |
|
|
713 |
|
|
|
660 |
|
|
|
|
|
|
Total long-term liabilities |
|
|
3,776 |
|
|
|
660 |
|
|
|
|
|
|
|
|
|
|
|
RADA SHAREHOLDERS' EQUITY |
|
|
|
Share capital - |
|
|
|
|
Ordinary shares of NIS 0.03 par
value - Authorized: 37,500,000 and 15,000,000 shares at September
30, 2016 and at December 31, 2015 respectively; Issued and
outstanding: 17,214,119 and 7,949,482 at September 30, 2016 and at
December 31, 2015 respectively. |
|
|
219 |
|
|
|
146 |
|
Additional paid-in capital |
|
|
86,403 |
|
|
|
82,427 |
|
Accumulated other comprehensive
income |
|
|
320 |
|
|
|
387 |
|
Accumulated deficit |
|
|
(78,866 |
) |
|
|
(74,453 |
) |
|
|
|
|
|
Total
RADA shareholders’ equity |
|
|
8,076 |
|
|
|
8,507 |
|
Non-controlling interest |
|
|
526 |
|
|
|
552 |
|
Total equity |
|
|
8,602 |
|
|
|
9,059 |
|
Total liabilities and equity |
|
$ |
18,853 |
|
|
$ |
18,576 |
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS |
U.S. dollars in thousands (except share and per share
data) |
|
Nine months ended September 30, |
Three months ended
September 30, |
|
Year endedDecember
31, |
|
|
2016 |
|
|
2015 |
|
2016 |
2015 |
|
2015 |
|
(Unaudited) |
Audited |
|
|
|
|
|
|
|
|
|
Revenues |
$ |
9,093 |
|
$ |
11,045 |
|
$ |
3,512 |
|
$ |
3,321 |
|
$ |
14,864 |
|
|
|
|
|
|
|
Cost of
revenues |
|
8,365 |
|
|
9,173 |
|
|
3,088 |
|
|
2,767 |
|
|
12,291 |
|
|
|
|
|
|
|
Gross
profit |
|
728 |
|
|
1,872 |
|
|
424 |
|
|
554 |
|
|
2,573 |
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
Research
and development |
|
534 |
|
|
543 |
|
|
218 |
|
|
144 |
|
|
693 |
|
Marketing and selling |
|
1,653 |
|
|
1,740 |
|
|
593 |
|
|
653 |
|
|
2,358 |
|
General
and administrative |
|
1,440 |
|
|
1,274 |
|
|
490 |
|
|
442 |
|
|
1,858 |
|
Goodwill
impairment |
|
|
|
|
|
587 |
|
Total
operating expenses: |
|
3,627 |
|
|
3,557 |
|
|
1,301 |
|
|
1,239 |
|
|
5,496 |
|
|
|
|
|
|
|
Operating loss |
|
(2,899 |
) |
|
(1,685 |
) |
|
(877 |
) |
|
(685 |
) |
|
(2,923 |
) |
Financial expenses related to extinguishment and amortization of a
beneficial conversion feature |
|
1,106 |
|
|
2,104 |
|
|
10 |
|
|
881 |
|
|
2,684 |
|
Financial expenses, net |
|
416 |
|
|
739 |
|
|
111 |
|
|
179 |
|
|
890 |
|
Consolidated loss |
|
(4,421 |
) |
|
(4,528 |
) |
|
(998 |
) |
|
(1,745 |
) |
|
(6,497 |
) |
|
|
|
|
|
|
Less: Net
loss attributable to Non-controlling interest |
|
8 |
|
|
23 |
|
|
4 |
|
|
19 |
|
|
36 |
|
|
|
|
|
|
|
Net income (loss) attributable to RADA's shareholders |
$ |
(4,413 |
) |
$ |
(4,505 |
) |
$ |
(994 |
) |
$ |
(1,726 |
) |
$ |
(6,461 |
) |
|
|
|
|
|
|
|
|
|
Earnings
(loss) per share: |
|
|
|
|
|
Basic
and diluted earnings (loss) per share |
$ |
(0.36 |
) |
$ |
(0.85 |
) |
$ |
(0.06 |
) |
$ |
(0.25 |
) |
$ |
(1.09 |
) |
Weighted
average number of Ordinary shares used for computing basic and
diluted loss per share |
|
12,244,643 |
|
|
5,281,800 |
|
|
16,719,929 |
|
|
6,848,348 |
|
|
5,952,044 |
|
Contact:
Shiri Lazarovich- C.F.O
RADA Electronic Industries Ltd.
Tel: +972-9-8921111
Shiri.Lazarovich@rada.com
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