RADA Electronic Industries Announces Fourth Quarter and Full Year 2018 Results
March 20 2019 - 8:00AM
RADA Electronic Industries Ltd. (NASDAQ: RADA)
announced today its financial results for the year and quarter
ended December 31, 2018.
Highlights of 2018
- Revenues of $28 million, representing highest level in over two
decades;
- US subsidiary established to capitalize on significant
opportunities;
- EBITDA of $1.9 million; Net Loss of $0.2 million;
- Year-end net cash position of $20.8 million.
Management Comments
Dov Sella, RADA's Chief Executive
Officer commented, “We are pleased with our continued top
line growth in 2018. Furthermore, we see strong acceleration in
2019 and beyond, and expect revenues of $40 million – up 43%
year-over-year for 2019. This will be driven primarily by growth in
tactical radars’ sales, with strong contribution from the US
market.”
Continued Mr. Sella, “A major goal in 2019 is to
invest in and grow our US business, which will include a new radar
production line. This is in order to capitalize on the significant
potential we are evidencing, and beginning to realize. We plan to
increase our R&D and sales and marketing investments in order
to maintain and enhance our leadership position in the market
segment of tactical radars for the maneuver force.”
“Furthermore, during 2018, we strengthened our
balance sheet and have adequate working and investment capital to
take advantage of the many opportunities ahead of us. We are very
encouraged with the solid level and stability of our gross margins
as well as our growth potential ahead,” concluded Mr. Sella.
2018 Fourth Quarter Summary
Revenues totaled $8.4 million
in the fourth quarter of 2018, compared with revenues of $9.1
million in the fourth quarter of 2017. Approximately $2.5 million
of deliveries to the United States, which were ready for delivery
by year-end, were delayed to 2019.
Gross profit totaled $3.0 million in the fourth
quarter of 2018 (or 36% of revenues) compared to gross profit of
$2.2 million in the fourth quarter of 2017 (or 24% of
revenues).
Operating income was $1 thousand in the fourth
quarter of 2018 compared to operating income of $0.1 million in the
fourth quarter of 2017.
Net loss attributable to RADA’s shareholders in
the fourth quarter of 2018 was $0.1 million, or $0.00 per share,
compared to a net profit of $0.6 million, or $0.02 per share, in
the fourth quarter of 2017. The loss in the fourth quarter was
mainly due the impact of the Company’s discontinued operations,
including the loss of $159 thousand recorded with respect to the
sale of the Company’s Chinese subsidiary in December 2018.
EBITDA was $0.5 million in the fourth quarter
of 2018, similar to that of the fourth quarter of
2017.
Full Year 2018 Results
SummaryRevenues totaled $28.0
million, compared to revenues of $26.2 million in
2017.Gross profit totaled $10.1 million (or
36% of revenues) compared to gross profit of $8.3 million (or
32% of revenues) in 2017.Operating
income totaled $0.2 million (or 0.6% of revenues)
compared to operating income of $2.0 million
in 2017.Net income
attributable to RADA’s shareholders was $0.2 million, or $0.00 per
share for the year ended December 31, 2018, compared to a net
Income of $2.2 million, or income of $0.09 per share, for the year
ended December 31, 2017.EBITDA totaled $1.9
million compared to EBITDA of $3.5 million in 2017. As
of December 31, 2018, RADA had net cash and cash
equivalents of $20.8 million, compared to $12.4 million as
of year-end 2017. The increase was mainly due to a capital raise of
approximately $12.5 million in 2018.
Investor Conference Call
The Company will host a conference call later today, starting at
10:00 am ET (4pm Israel time). Management will host the call and
will be available to answer questions after presenting the
results.
Dial in numbers are: US 1-888-668-9141; UK 0800-917-5108; Israel
03-918-0609 and International +972-3-918-0609.
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 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.
Contact Information
Company
Contact:
Avi Israel (CFO)Tel:
+972-9-892-1111mrkt@rada.comwww.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 |
U.S. dollars in thousands |
|
|
Year ended December 31, |
Three months endedDecember 31, |
|
2018 |
2017 |
2018 |
2017 |
|
|
|
|
|
Operating Income (loss) |
$165 |
$1,983 |
$1 |
$104 |
Depreciation |
|
799 |
|
638 |
|
250 |
|
184 |
Employees Option Compensation |
|
898 |
|
559 |
|
253 |
|
168 |
Other
non-cash amortization |
|
33 |
|
325 |
|
- |
|
84 |
|
|
|
|
|
EBITDA |
$1,895 |
$3,505 |
$504 |
$540 |
|
|
|
|
|
|
|
|
|
CONSOLIDATED
BALANCE SHEETS |
|
U.S. dollars in thousands, except share
and per share data |
|
|
December 31, |
|
2018 |
|
2017 |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
Cash and cash
equivalents |
$ |
20,814 |
|
$ |
12,417 |
Restricted deposits |
|
422 |
|
|
322 |
Trade
receivables (net of allowance for doubtful accounts of $2 at
December 31, 2018 14 at December 31, 2017) |
|
13,382 |
|
|
7,286 |
Contract
Asset |
|
899 |
|
|
1,140 |
Other
accounts receivable and prepaid expenses |
|
506 |
|
|
330 |
Inventories, net |
|
11,244 |
|
|
7,910 |
Current
assets related to discontinued operations |
|
1,524 |
|
|
2,468 |
|
|
|
|
Total current assets |
|
48,791 |
|
|
31,873 |
|
|
|
|
LONG-TERM ASSETS: |
|
|
|
|
|
|
|
|
|
Long-term receivables and other deposits |
|
79 |
|
|
68 |
Property, plant and equipment, net |
|
4,632 |
|
|
3,915 |
Long-term assets related to discontinued operations |
|
- |
|
|
319 |
|
|
|
|
|
|
Total assets |
$ |
53,502 |
|
$ |
36,175 |
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEETS |
|
U.S. dollars in thousands, except share and per share
data |
|
|
December 31, |
|
2018 |
|
2017 |
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
Trade payables |
$ |
5,650 |
|
|
$ |
2,904 |
|
Other
accounts payable and accrued expenses |
|
3,842 |
|
|
|
2,814 |
|
Advances
from customers |
|
727 |
|
|
|
41 |
|
Contract
Liabilities |
|
366 |
|
|
|
145 |
|
Current
liabilities related to discontinued operations |
|
366 |
|
|
|
328 |
|
|
|
|
|
Total current liabilities |
|
10,951 |
|
|
|
6,232 |
|
|
|
|
|
LONG-TERM LIABILITIES: |
|
|
|
|
|
|
|
Accrued
severance pay and other long term liability |
|
690 |
|
|
|
758 |
|
|
|
|
|
Total long-term liabilities |
|
690 |
|
|
|
758 |
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY: |
|
|
|
Share
capital - |
|
|
|
Ordinary
shares of NIS 0.03 par value - Authorized: 100,000,000 shares and
37,500,000 shares at December 31, 2018 and December 31, 2017
respectively; Issued and outstanding: 37,516,891 and 31,392,040 at
December 31, 2018 and at December 31, 2017 respectively. |
|
386 |
|
|
|
335 |
|
Additional paid-in capital |
|
118,568 |
|
|
|
104,923 |
|
Accumulated other comprehensive income |
|
220 |
|
|
|
392 |
|
Accumulated deficit |
|
(76,961 |
) |
|
|
(77,124 |
) |
|
|
|
|
Total
RADA Electronic Industries shareholders' equity |
|
42,213 |
|
|
|
28,526 |
|
Non-controlling interest |
|
(352 |
) |
|
|
659 |
|
|
|
|
|
Total equity |
|
41,861 |
|
|
|
29,185 |
|
|
|
|
|
Total liabilities and equity |
$ |
53,502 |
|
|
$ |
36,175 |
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF
OPERATIONS |
U.S. dollars in thousands, except per share
data |
|
Year ended December
31, |
Three months endedDecember 31, |
|
2018 |
2017 |
2018 |
2017 |
Revenues: |
|
|
|
|
Products |
$ |
26,909 |
|
$ |
25,010 |
|
$ |
8141 |
|
$ |
8,845 |
|
Services |
|
1,123 |
|
|
1,172 |
|
|
250 |
|
|
274 |
|
|
|
|
|
|
|
|
28,032 |
|
|
26,182 |
|
|
8,391 |
|
|
9,119 |
|
Cost of revenues: |
|
|
|
|
Products |
|
17,771 |
|
|
17,807 |
|
|
5,306 |
|
|
6,922 |
|
Services |
|
143 |
|
|
112 |
|
|
36 |
|
|
22 |
|
|
|
|
|
|
|
|
17,914 |
|
|
17,919 |
|
|
5,342 |
|
|
6,944 |
|
|
|
|
|
|
Gross profit |
|
10,118 |
|
|
8,263 |
|
|
3,049 |
|
|
2,175 |
|
Operating expenses: |
|
|
|
|
Research and development, net |
|
3,092 |
|
|
1,575 |
|
|
1,016 |
|
|
689 |
|
Marketing and selling |
|
2,860 |
|
|
2,137 |
|
|
847 |
|
|
653 |
|
General and administrative |
|
4,001 |
|
|
2,568 |
|
|
1,185 |
|
|
729 |
|
Total
operating expenses: |
|
9,953 |
|
|
6,280 |
|
|
3,048 |
|
|
2,071 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
165 |
|
|
1,983 |
|
|
1 |
|
|
104 |
|
Amortization of shareholders' convertible loans discount and
beneficial conversion feature (BCF) |
|
- |
|
|
103 |
|
|
- |
|
|
- |
|
Other
financial expenses (income), net |
|
(119 |
) |
|
53 |
|
|
(72 |
) |
|
(41 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
financial expenses (Income), net |
|
(119 |
) |
|
156 |
|
|
(72 |
) |
|
(41 |
) |
|
|
|
|
|
Net Loss from sale of fixed asset |
|
103 |
|
|
- |
|
|
103 |
|
|
- |
|
Net income (loss) from continuing operations |
|
181 |
|
|
1,827 |
|
|
(30 |
) |
|
145 |
|
|
|
|
|
|
Net
Income (loss) from discontinued operations |
|
(404 |
) |
|
515 |
|
|
(233 |
) |
|
512 |
|
|
|
|
|
|
Net
income (loss) |
|
(223 |
) |
|
2,342 |
|
|
(263 |
) |
|
657 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) attributable to non-controlling interest |
|
(386 |
) |
|
103 |
|
|
(177 |
) |
|
102 |
|
Net income
(loss) attributable to RADA Electronic Industries'
shareholders |
$ |
163 |
|
$ |
2,239 |
|
|
$ |
(86 |
) |
$ |
555 |
|
|
|
|
|
|
|
|
|
|
Basic
net income from continuing operations per Ordinary share |
$ |
0.02 |
|
$ |
0.07 |
|
|
$ |
0.00 |
|
$ |
0.00 |
|
Diluted net income from continuing operations per Ordinary
share |
$ |
0.02 |
|
$ |
0.06 |
|
|
$ |
0.00 |
|
$ |
0.00 |
|
Basic
and diluted net income (loss) from discontinued operations per
Ordinary share |
$ |
(0.01 |
) |
$ |
0.02 |
|
|
$ |
(0.01 |
) |
$ |
0.02 |
|
Basic
net income per Ordinary share |
$ |
0.00 |
|
$ |
0.09 |
|
|
$ |
0.00 |
|
$ |
0.02 |
|
Diluted net income per Ordinary share |
$ |
0.00 |
|
$ |
0.08 |
|
|
$ |
0.00 |
|
$ |
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of Ordinary shares used for computing basic
net income (loss) per share |
|
33,184,570 |
|
|
24,956,915 |
|
|
|
34,324,897 |
|
|
31,027,341 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
Ordinary shares used for computing diluted net income (loss) per
share |
|
33,716,931 |
|
|
28,126,509 |
|
|
|
|
34,823,139 |
|
|
33,155,420 |
|
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