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RADA ELECTRONIC INDUSTRIES LTD.

(RADA)
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RADA Reports Adjusted EBITDA growth of 162% YoY Reaching $8.2 million in its Record Q3/2021 Results - Form 6-K

11/03/2021 | 05:14am EST
RADA Reports Adjusted EBITDA growth of 162% YoY Reaching $8.2 million in its Record Q3/2021 Results

Revenues of $32 million, up 57% YoY and net income of $6 million, up 184% YoY

Netanya, Israel, November 3, 2021 - RADA Electronic Industries Ltd. (NASDAQ: RADA, TASE: RADA) announced today its financial results for the three-month and nine-month periods ended September 30, 2021.

Highlights of the third quarter of 2021

Quarterly revenues up 57% year-over-year and a sequential 13% increase to $32 million

Strong gross margin improvement to 41% compared with 38% in the year-ago quarter

Operating profit more than tripled to $6.3 million compared with $2.0 million in the year-ago quarter

Net income of $6.0 million, up 184% compared with $2.1 million in the year-ago quarter

Adjusted EBITDA of $8.2 million, an increase of 162% compared to $3.1 million in the year ago quarter and $6.3 million in the prior quarter

Adjusted EBITDA margin improved to 26% compared with 15% in the year-ago quarter and 22% in the prior quarter

Quarter-end net cash position of $86.6 million

Management Comments
Dov Sella, RADA's Chief Executive Officer commented, "We are very happy with our record financial performance and strong growth this quarter. The 57% year-over-year growth in revenue as well as the consistent improvement in our gross and operating margins, led to a 162% year-over-year growth in our Adjusted EBITDA and demonstrates the solid operating leverage within our business model."
Continued Mr. Sella, "Our pipeline continues to strengthen, becoming deeper and broader. As the world starts to adjust to working under the Covid situation, we expect to be able to penetrate more quickly into new accounts globally. In the US, as has been widely reported, the new federal government has not been able yet to pass the budget and is operating under a continuing resolution of last year's budget, leading to delays and lack of certainty in the short-term. While this phase of US budget adjustment is making it more challenging, at RADA, we are accustomed and well positioned to work under short timelines and urgent-need book-and-ship deliveries. Over the past year, we have strategically increased our inventory quite substantially to ensure we can maintain this significant competitive edge. All in all, we reiterate our expectations to surpass $120 million in revenue for 2021, representing a substantial 57% year-over-year revenue growth and with strong operating leverage supporting our ability to grow our EBITDA profitability beyond the current level."
2021 Third Quarter Summary

Revenues totaled $32.0 million in the quarter compared with revenues of $20.4 million in the third quarter of 2020, an increase of 57%.

Gross profit totaled $13.2 million in the quarter (41% of revenues), an increase of 71% compared to gross profit of $7.8 million in the third quarter of 2020 (38% of revenues).

Operating income was $6.3 million in the quarter compared to operating income of $2.0 million in the third quarter of 2020.

Net income was $6.0 million, or $0.12 per share, compared to net income of $2.1 million, or $0.05 per share, in the third quarter of 2020.

Adjusted EBITDA was $8.2 million in the quarter compared to adjusted EBITDA of $3.1 million in the third quarter of 2020.

2021 First nine months Summary

Revenues totaled $85.5 million in the first nine months of 2021 compared with revenues of $52.9 million in the first nine months of 2020, an increase of 61%.

Gross profit totaled $34.5 million in the first nine months (40% of revenues), an increase of 78% compared to gross profit of $19.4 million in the first nine months of 2020 (37% of revenues).

Operating income was $14.3 million in the first nine months of 2021 compared to operating income of $2.7 million in the first nine months of 2020.

Net income in the first nine months was $20.3 million, or $0.42 per share, compared to net income of $3.0 million, or $0.07 per share, in the first nine months of 2020.

Adjusted EBITDA was $19.3 million in the first nine months of 2021 compared to adjusted EBITDA of $5.7 million in the first nine months of 2020.
As of September 30, 2021, RADA had net cash and cash equivalents of $86.6 million compared to $35.8 million as of year-end 2020. In line with the Company's previously started strategy, inventory levels were increased significantly reaching $38.1 million as of September 30, 2021 compared with $28.8 million as of year-end 2020.
Investor Conference Call

The Company will host a conference call later today, starting at 9:00 am ET (3pm Israel time). Management will host the call and will be available to answer questions after presenting the results.
Dial in numbers are: US 1-888-723-3164; 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 www.rada.com beginning 48 hours after the call.

A live webcast of the conference call will be available. Please register for the webcast a 5-10 minutes prior to the call at RADA's website: https://www.rada.com/investors following which a link to the live webcast will be sent to you within a short period.

About RADA Electronic Industries Ltd.

RADA is a global defense technology company focused on proprietary radar solutions and legacy avionics systems. The Company is a leader in mini-tactical radars, serving attractive, high-growth markets, including critical infrastructure protection, border surveillance, active military protection and counter-drones applications.

Contact Information

Company Contact:

Avi Israel (CFO)
Tel: +972-76-538-6200
mrkt@rada.com
www.rada.com
Investor Relations Contact:
Ehud Helft
GK Investor & Public Relations
Tel: +1 212 378 8040
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. Adjusted 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 Adjusted EBITDA consists of net profit (loss) according to U.S. GAAP, excluding net financing expenses, taxes, depreciation and amortization and non-cash stock-based compensation expenses. Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure. Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including net income and our other GAAP results. Reconciliation between the Company's results on a GAAP and non-GAAP basis is provided in the table below.
RECONCILIATION FROM OPERATING INCOME TO ADJUSTED EBITDA
U.S. dollars in thousands
Nine months ended
September 30,
Three months ended
September 30,
Year ended
December 31,
2021
2020
2021
2020
2020
(Unaudited)
Audited
Income from operations before tax
$
14,487
$
3,002
$
6,310
$
2,126
$
5,640
Financial expenses (income), net
(140
)
(311
)
(18
)
(116
)
(167
)
Depreciation
2,600
1,612
1,001
598
2,289
Employees non-cash option compensation
2,212
1,022
885
340
1,436
Other non-cash amortization
135
409
-
178
476
Adjusted EBITDA
$
19,294
$
5,734
$
8,178
$
3,126
$
9,674

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


September 30, 2021
December 31, 2020
Unaudited
Audited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
86,641
$
36,289
Restricted cash
492
567
Trade receivables
28,944
14,095
Contract assets
349
756
Other receivables and prepaid expenses
2,311
1,637
Inventories
38,108
28,783
Total current assets
156,845
82,127
LONG-TERM ASSETS:
Investment in affiliated company
3,000
-
Long-term receivables and other deposits
251
230
Property, plant and equipment, net
16,898
13,968
Deferred tax assets
5,767
-
Operating lease right-of-use assets
12,108
10,581
Total long-term assets
38,024
24,779
Total assets
$
194,869
$
106,906
CURRENT LIABILITIES:
Short term loan
$
-
$
454
Trade payables
19,070
10,603
Other accounts payable and accrued expenses
11,012
9,855
Advances from customers
817
2,323
Contract liabilities
620
232
Operating lease short-term liabilities
2,294
1,885
Total current liabilities
33,813
25,352
LONG-TERM LIABILITIES:
Accrued severance-pay and other long-term liabilities
787
789
Operating lease long-term liabilities
9,834
8,732
Total long-term liabilities
10,621
9,521
RADA SHAREHOLDERS' EQUITY
Share capital -
Ordinary shares of NIS 0.03 par value - Authorized: 100,000,000 shares on September 30, 2021 and December 31, 2020; Issued and outstanding: 49,365,136 on September 30, 2021 and 43,724,446 at December 31, 2020 respectively
488
440
Additional paid-in capital
203,044
144,944
Accumulated deficit
(53,097
)
(73,351
)
Total equity
150,435
72,033
Total liabilities and equity
$
194,869
$
106,906


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 ended
December 31,
2021
2020
2021
2020
2020
(Unaudited)
Audited
Revenues
$
85,476
$
52,936
$
32,004
$
20,359
$
76,217
Cost of revenues
50,992
33,580
18,749
12,598
47,882
Gross profit
34,484
19,356
13,255
7,761
28,335
Operating expenses:
Research and development
7,478
6,468
2,485
2,230
8,846
Marketing and selling
4,609
3,671
1,653
1,286
5,017
General and administrative
8,050
6,526
2,825
2,235
8,972
Net loss from sale of fixed asset
-
-
-
-
27
Total operating expenses:
20,137
16,665
6,963
5,751
22,862
Operating income
14,347
2,691
6,292
2,010
5,473
Other financial income (expenses), net
140
311
18
116
167
Income before taxes
14,487
3,002
6,310
2,126
5,640
Tax income / (expense)
5,767
-
(271
)
-
-
Net income
20,254
3,002
6,039
2,126
5,640
Basic net income per ordinary share
$
0.42
$
0.07
$
0.12
$
0.05
$
0.13
Diluted net income per Ordinary share
$
0.41
$
0.07
$
0.12
$
0.05
$
0.13
Weighted average number of Ordinary shares used for computing basic net income per share
47,874,320
43,209,153
49,307,039
43,541,002
43,321,058
Weighted average number of Ordinary shares used for computing diluted net income per share
49,778,631
44,297,058
51,025,170
44,849,311
44,565,379

Disclaimer

Rada Electronic Industries Limited published this content on 03 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 November 2021 10:11:39 UTC.


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Sales 2021 117 M - -
Net income 2021 26,5 M - -
Net cash 2021 80,0 M - -
P/E ratio 2021 18,3x
Yield 2021 -
Capitalization 475 M 475 M -
EV / Sales 2021 3,38x
Capi. / Sales 2022 3,38x
Nbr of Employees 244
Free-Float -
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Last Close Price 9,63 $
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Managers and Directors
Dov Sella Chief Executive Officer
Avi Israel Chief Financial Officer
Yossi Ben-Shalom Executive Chairman
Oleg Kiperman Chief Technology Officer
Yaniv Dorani Chief Operating Officer