RADA Electronic Industries Ltd. (NASDAQ: RADA)
announced today its financial results for the quarter ended
September 30, 2018.
Management CommentsDov 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 GuidanceRADA’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: +972-9-8921111mrkt@rada.com |
Investor Relations Contact:Ehud Helft/Gavriel
FrohweinGK Investor & Public RelationsTel: +1 646 688
3559rada@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 endedSep 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
andbeneficial conversion feature |
|
- |
|
|
102 |
|
|
- |
|
|
83 |
|
|
|
103 |
Other
financial expenses (income), net |
|
(48 |
) |
|
95 |
|
|
(45 |
) |
|
105 |
|
|
|
53 |
Net
income (loss) from continuingoperations |
|
213 |
|
|
1,682 |
|
|
(100 |
) |
|
831 |
|
|
|
1,827 |
Net
income (loss) from discontinuedoperations |
|
(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 toRADA 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 continuingoperations per Ordinary
share |
$ |
0.01 |
|
$ |
0.07 |
|
$ |
0.00 |
|
$ |
0.03 |
|
|
$ |
0.06 |
Basic
and diluted net income(loss)from discontinued operations
perordinary 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 ordinaryshares used for computing basic
netincome per share |
|
32,800,284 |
22,915,032 |
|
|
32,907,828 |
|
|
25,146,803 |
|
|
|
24,956,915 |
Weighted average number of ordinaryshares used for computing
diluted netincome per share |
|
33,327,108 |
26,296,106 |
|
|
33,396,519 |
|
|
28,820,589 |
|
|
|
28,126,509 |
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