RADID Rada Electronics Industries Limited (MM)

NETANYA, Israel, March 6 /PRNewswire-FirstCall/ -- RADA Electronic Industries Ltd. (NASDAQ:RADID) today reported its financial results for the three months and the year ended December 31, 2006. The company reported a net loss of $2 million or $0.23 per share. This compares with a net loss of $2.3 million or $0.31 per share, for the year ended December 31, 2005. Revenues in 2006 were $13 million, a decrease of 3% from 2005. The gross margin on sales increased to 16% in 2006 from 10% in 2005. Operating loss for the year was $1.25 million compared with an operating loss of $1.8 million in 2005. The company reported revenues for the three months ended December 31, 2006 of $5.6 million, compared to revenues of $4.2 million for the same period in 2005. For the three months ended December 31, 2006 cost of revenues decreased to $3.7 million from $3.9 million in the comparable period in 2005 and operating expenses increased to $1.17 million from $0.77 million in the comparable period in 2005. As a result, the company reported a net profit of $534,000 for the three months ended December 31, 2006 compared to a net loss of $544,000 for the same period in 2005. Commenting on the results, Major General (Ret.) Herzle Bodinger, RADA's CEO said, "The improvement in our financials is a result of our investments over the past two years. Although the company reported a loss in fiscal 2006, in the second half of 2006 we showed an improvement and reported a net profit of $550,000, after six quarters of losses. We are continuing with our marketing efforts and are continuing to focus on our main markets in Israel, U.S., and India. In our target markets we are working closely with our customers in order to develop the next generation of products. We believe that these development efforts, together with increasing sales of our existing state-of-the-art products, will result in continued financial improvement." About RADA RADA Electronic Industries Ltd. is an Israel based company involved in the military and commercial aerospace industries. The Company specializes in Avionics systems (Digital Video Recorders, Ground Debriefing Stations, Stores Management Systems, Flight Data Recorders, Inertial Navigation Systems), Trainers Upgrades, Avionics systems for the UAV market, and Electro optic cameras for airplanes and armored vehicles. 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 BALANCE SHEETS U.S. dollars in thousands, except share and per share data December 31, 2006 2005 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 990 $ 350 Restricted cash 704 1,017 Trade receivables (net of allowance for doubtful accounts of $ 34 and $ 6 at December 31, 2006 and 2005, respectively) 4,296 4,920 Other accounts receivable and prepaid expenses 200 156 Costs and estimated earnings in excess of billings on uncompleted contracts 668 1,396 Inventories 2,468 1,942 Total current assets 9,326 9,781 LONG-TERM RECEIVABLES AND DEPOSITS: Long-term receivables 983 983 Leasing deposits 78 72 Severance pay fund 1,624 1,614 Total long-term receivables and deposits 2,685 2,669 PROPERTY, PLANT AND EQUIPMENT, NET 3,359 3,931 OTHER ASSETS: Intangible assets, net and goodwill 2,072 2,469 Deferred charges, net 13 40 Total other assets 2,085 2,509 Total assets $ 17,455 $ 18,890 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short-term bank credit and current maturities of long-term loans $ 559 $ 877 Trade payables 1,611 1,671 Other accounts payable and accrued expenses 3,419 3,217 Deferred revenues 84 50 Billings in excess of costs and estimated earnings on uncompleted contracts 285 391 Total current liabilities 5,958 6,206 LONG-TERM LIABILITIES: Long-term loan 142 Convertible note 2,858 2,560 Accrued severance pay 2,026 2,009 Total long-term liabilities 5,026 4,569 MINORITY INTERESTS 397 380 SHAREHOLDERS' EQUITY (see note below) Share capital - Ordinary shares of NIS 0.015 par value - Authorized: 16,333,333 and 15,833,333 shares at December 31, 2006 and 2005, respectively; Issued and outstanding: 8,728,509 and 8,714,676 shares at December 31, 2006 and 2005, respectively 116 116 Additional paid-in capital 67,239 66,900 Accumulated deficit (61,281) (59,281) Total shareholders' equity 6,074 7,735 Total liabilities and shareholders' equity $ 17,455 $ 18,890 CONSOLIDATED STATEMENTS OF OPERATIONS U.S. dollars in thousands, except per share data Year ended Three months ended December 31, December 31, 2006 2005 2006 2005 (unaudited) Revenues: Products $ 10,984 $ 11,303 $ 4,974 $ 3,887 Services 2,053 2,118 607 363 13,037 13,421 5,581 4,250 Cost of revenues: Products 9,517 10,601 3,246 3,514 Services 1,482 1,481 494 387 10,999 12,082 3,740 3,901 Gross profit 2,038 1,339 1,841 349 Operating expenses: Research and development 181 - 42 - Marketing and selling expenses 1,316 1,155 377 271 General and administrative expenses 1,794 1,939 753 498 Total operating expenses 3,291 3,094 1,172 769 Operating income (loss) (1,253) (1,755) 669 (420) Financial expenses, net (775) (624) (125) (160) Other income, net 45 33 - 33 (1,983) (2,346) 544 (547) Minority interests in losses (gains) of subsidiary (17) 17 (10) 3 Net income (loss) $ (2,000) $ (2,329) $ 534 $ (544) Net income (loss) per share: Basic and diluted net income (loss) per share $ (0.23) $ (0.31) $ 0.06 $ (0.08) No. of shares used in computing basic net income (loss) per share 8,723 7,504 8,725 7,194 No. of shares used in computing fully diluted net income (loss) per share 8,723 7,504 8,745 7,194 NOTE: In February 2007, the Company effected a 3 to 1 reverse stock split with respect to its Ordinary shares. All shares, stock options, warrants and net loss per share amounts in these financial statements have been restated for all prior periods to reflect the reverse stock split. DATASOURCE: RADA Electronic Industries Ltd. CONTACT: Elan Sigal- C.F.O. of RADA Electronic Industries Ltd., Tel: +972-9-8921111

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