RADA Rada Electronics Industries Limited

RADA Electronic Industries Ltd. (NASDAQ:RADA) announced today its financial results for the quarter ended March 31, 2018.

Management Comments

Dov Sella, RADA's Chief Executive Officer commented, “We are pleased with the results of the first quarter, showing a very strong 29% growth in revenues over the first quarter of last year, with an improved level of gross margins. Looking ahead, we expect to maintain our growth momentum into the second quarter, with revenues of approximately $6.5 million, compared to $5.3 million in the second quarter of 2017, up approximately 22% over last year.”

Continued Mr. Sella, “We recently opened a new subsidiary in the United States and we have already received initial new orders from some US customers. Our pipeline is deep and strong, with significant revenue potential over the coming years. We are targeting active protection systems (APS) for the US Army and others, Mobile Short-Range Air Defense (M-SHORAD) for the US army and US Marine Corps, as well as SHORAD and C-UAV/Drones globally. These are all operational solutions with significant potential for incorporating our tactical radars which work On-The-Move (OTM). As we move through 2018, I am confident that our continuous and long-term investments in software-defined, multi-mission tactical radars for the maneuver force will reap rewards in the quarters and years to come. Beyond the growth engines, we are also pleased with the stability of our digital video recorders business, where we are developing our next-generation solutions to various aircraft manufacturers globally.”

2018 First Quarter Summary

Revenues totaled $6.0 million in the first quarter of 2018, up 29% compared to revenues of $4.7 million in the first quarter of 2017.

Gross Profit totaled $2.2 million in the first quarter of 2018 (gross margin of 36.2%) up 31% compared to gross profit of $1.7 million (gross margin of 35.7%) in the first quarter of 2017.

Operating expenses totaled $2.0 million in the first quarter of 2018 (32.8% of revenues) compared with $1.3 million (28.2% of revenues) in the first quarter of 2017. The primary factor in the increase was higher R&D expenses, which amounted to 10% of revenues compared with 4% in the first quarter of last year. On an absolute basis, marketing and sales as well as G&A expenses also increased. Sales and marketing expenses increased to 11% of revenues from 9% in the same quarter last year, while G&A expenses decreased to 12% of revenues from 15% in the same quarter of last year.  

Operating income totaled $0.2 million in the first quarter of 2018 compared to operating income of $0.3 million in the first quarter of 2017.

Net income attributable to RADA’s shareholders in the first quarter of 2018 was $0.2 million, or $0.01 per share, compared to net income of $0.4 million, or $0.02 per share, in the first quarter of 2017.

In terms of liquidity and capital resources, as of March 31, 2018, the Company had cash and cash equivalents, of $13.4 million or $0.41 per share, compared with $12.4 million or $0.40 per share as of December 31, 2017. As of March 31, 2018, the Company did not have any financial liabilities. Cash flow from operations for the quarter was a positive $0.4 million.

Investor Conference Call

The Company will host a conference call later today, starting at 10:00 am ET (5pm 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 1-888-281-1167; UK 0800-917-9141; Israel 03-918-0685 and International +972-3-918-0685.

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. 

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.

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

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

ASSETS	March 31,2018				December 31,2017
	Unaudited
CURRENT ASSETS:
Cash and cash equivalents	$	13,415			$	12,417
Restricted cash		322				322
Trade receivables (net of allowance for doubtful accounts of $14 at March 31, 2018 and December 31, 2017)		6,095				7,286
Costs and estimated earnings in excess of billings on uncompleted contracts		1,126				995
Other receivables and prepaid expenses		459				330
Inventories		7,782				7,910
Current assets related to discontinued operations		2,333				2,468
Total current assets		31,532				31,728
LONG-TERM ASSETS:
Long-term receivables and other deposits		71				68
Property, plant and equipment, net		3,820				3,915
Long-term assets related to discontinued operations		356				319
Total long term assets		4,247				4,302
Total assets	$	35,779			$	36,030
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables	$	1,758			$	2,904
Other accounts payable and accrued expenses		2,678				2,814
Advances from customers, net		-				41
Current liabilities related to discontinued operations		369				328
Total current liabilities		4,805				6,087
LONG-TERM LIABILITIES:
Accrued severance pay and other long-term liabilities		786				758
Total long-term liabilities		786				758
RADA SHAREHOLDERS' EQUITY
Share capital -
Ordinary shares of NIS 0.03 par value - Authorized: 37,500,000 shares at March 31, 2018 and December 31, 2017; Issued and outstanding: 32,882,914 at March 31, 2018 and 31,392,040 at December 31, 2017.		348				335
Additional paid-in capital		105,842				104,923
Accumulated other comprehensive income		286				392
Accumulated deficit		(76,904	)			(77,124	)
Total RADA shareholders’ equity		29,572				28,526
Non-controlling interest		616				659
Total equity		30,188				29,185
Total liabilities and equity	$	35,779			$	36,030

CONSOLIDATED STATEMENTS OF OPERATIONS U.S. dollars in thousands, except share and per share data

		Three months ended March 31,									Year endedDecember 31,
			2018					2017				2017
		Unaudited
Revenues		$	6,020				$	4,675			$	26,182
Cost of revenues			3,841					3,006				17,919
Gross profit			2,179					1,669				8,263
Operating expenses:
Research and development			592					198				1,575
Marketing and selling			634					436				2,137
General and administrative			748					686				2,568
Total operating expenses			1,974					1,320				6,280
Operating income			205					349				1,983
Amortization of shareholders' convertible loans discount and beneficial conversion feature			-					10				103
Other financial expenses (income), net			(8		)			(39	)			53
Net income from continuing operations			213					378				1,827
Net income (loss) from discontinued operations			(9		)			12				515
Net income		$	204				$	390			$	2,342
Net income (loss) attributable to non-controlling interest			(16		)			2				103
Net income attributable to RADA Electronic Industries' shareholders		$	220				$	388			$	2,239
Basic net income from continuing operations per Ordinary share		$	0.01				$	0.02			$	0.07
Diluted net income from continuing operations per Ordinary share		$	0.01				$	0.02			$	0.06
Basic and diluted net income from discontinued operations per Ordinary share		$	0.00				$	0.00			$	0.02
Basic net income per Ordinary share		$	0.01				$	0.02			$	0.09
Diluted net income per Ordinary share		$	0.01				$	0.02			$	0.08
Weighted average number of Ordinary shares used for computing basic net income per share				32,604,550				21,666,124				24,956,915
Weighted average number of Ordinary shares used for computing diluted net income per share				33,202,955				24,641,207				28,126,509