Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
FOR IMMEDIATE RELEASE
RADA Reports Record Q2/2021 Results
Revenues of $28.3 million, up 61% year-over-year and continued
improvement in profitability
Netanya, Israel, August 2, 2021 – RADA Electronic Industries Ltd. (NASDAQ: RADA, TASE: RADA) announced today its financial results for the three and six month periods ended June 30, 2021.
Highlights of the second quarter of 2021
| • | Quarterly revenues up 61% year-over-year and a 12% increase from the previous quarter to $28.3 million |
| • | Gross margin improved to 40% compared with 36% in the year-ago quarter |
| • | A $6.0 million deferred tax asset was recorded in Q2 in view of RADA’s continued profitability. |
| • | Net income of $10.4 million compared with $0.7 million in the year-ago quarter |
| • | Adjusted EBITDA of $6.3 million, margin improved to 22% compared with 10% in the year-ago quarter and 19% in the previous quarter |
| • | Quarter-end net cash position of $95.7 million |
Management Comments
Dov Sella, RADA's Chief Executive Officer commented, “We are happy with our ongoing financial performance and growth, and 2021 is proceeding according to our plans. In particular, the strong improvement in our EBITDA margin demonstrates the operating leverage in our business model. Given the current global shortage of components and the ongoing need to mitigate against any Covid-19 pandemic impact on our supply chains, we took the decision to strategically increase inventory levels to ensure availability of components for our ongoing production plans. We look forward to continued growth driven by the positive trends in our markets, especially in the USA.”
2021 Second Quarter Summary
Revenues totaled $28.3 million in the quarter compared with revenues of $17.5 million in the second quarter of 2020, an increase of 61%.
Gross profit totaled $11.3 million in the quarter (40% of revenues), an increase of 81% compared to gross profit of $6.2 million in the second quarter of 2020 (36% of revenues).
Operating income was $4.5 million in the quarter compared to operating income of $0.6 million in the second quarter of 2020.
Income tax – A $6.0 million deferred tax asset was recorded in the second quarter in view of RADA’s continued profitability.
Net income was $10.4 million, or $0.21 per share, compared to a net income of $0.7 million, or $0.02 per share, in the second quarter of 2020.
Adjusted EBITDA was $6.3 million in the quarter compared to adjusted EBITDA of $1.7 million in the second quarter of 2020.
2021 First Half Summary
Revenues totaled $53.5 million in the first half of 2021 compared with revenues of $32.6 million in the first half of 2020, an increase of 64%.
Gross profit totaled $21.2 million in the first half (40% of revenues), an increase of 83% compared to gross profit of $11.6 million in the first half of 2020 (36% of revenues).
Operating income was $8.1 million in the first half of 2021 compared to operating income of $0.7 million in the first half of 2020.
Income tax – A deferred tax asset of $6 million was recorded in view of RADA’s continued profitability.
Net income in the first half was $14.2 million, or $0.30 per share, compared to net income of $0.9 million, or $0.02 per share, in the first half of 2020.
Adjusted EBITDA was $11.1 million in the first half of 2021 compared to adjusted EBITDA of $2.6 million in the first half of 2020.
As of June 30, 2021, RADA had net cash and cash equivalents of $95.7 million compared to $35.8 million as of year-end 2020.
Investor Conference Call
The Company will host a conference call later today, starting at 9:00 am ET (4pm Israel time). Management will host the call and will be available to answer questions after presenting the results.
Dial in numbers are: US 1-888-723-3164; 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 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: +1 646 688 3559 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
| | | Six months ended
June 30, | | | Three months ended
June 30, | | | Year ended December 31, | |
| | | 2021 | | | 2020 | | | 2021 | | | 2020 | | | 2020 | |
| | | (Unaudited) | | | Audited | |
| | | | | | | | | | | | | | | | |
| Income from operations before tax | | $ | 8,177 | | | $ | 877 | | | $ | 4,405 | | | $ | 707 | | | $ | 5,640 | |
| Financial income (expenses), net | | | (122 | ) | | | (197 | ) | | | 97 | | | | (73 | ) | | | (167 | ) |
| Depreciation | | | 1,599 | | | | 1,014 | | | | 843 | | | | 541 | | | | 2,289 | |
| Employees non-cash option compensation | | | 1,327 | | | | 682 | | | | 855 | | | | 401 | | | | 1,436 | |
| Other non-cash amortization | | | 135 | | | | 232 | | | | 127 | | | | 169 | | | | 476 | |
| | | | | | | | | | | | | | | | | | | | | |
| Adjusted EBITDA | | $ | 11,116 | | | $ | 2,608 | | | $ | 6,327 | | | $ | 1,745 | | | $ | 9,674 | |
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share data
| ASSETS | | June 30, 2021 | | | December 31, 2020 | |
| | | Unaudited | | | Audited | |
| CURRENT ASSETS: | | | | | | |
| Cash and cash equivalents | | $ | 95,655 | | | $ | 36,289 | |
| Restricted cash | | | 576 | | | | 567 | |
| Trade receivables | | | 20,161 | | | | 14,095 | |
| Contract assets | | | 157 | | | | 756 | |
| Other receivables and prepaid expenses | | | 1,273 | | | | 1,637 | |
| Inventories | | | 31,593 | | | | 28,783 | |
| | | | | | | | | |
Total current assets | | | 149,415 | | | | 82,127 | |
| | | | | | | | | |
| LONG-TERM ASSETS: | | | | | | | | |
| Investment in subsidiary | | | 3,000 | | | | - | |
| Long-term receivables and other deposits | | | 245 | | | | 230 | |
| Property, plant and equipment, net | | | 16,473 | | | | 13,968 | |
| Deferred tax assets | | | 6,038 | | | | - | |
| Operating lease right-of-use assets | | | 11,947 | | | | 10,581 | |
Total long-term assets | | | 37,703 | | | | 24,779 | |
| | | | | | | | | |
Total assets | | $ | 187,118 | | | $ | 106,906 | |
| CURRENT LIABILITIES: | | | | | | | | |
| Short term loan | | $ | - | | | $ | 454 | |
| Trade payables | | | 16,648 | | | | 10,603 | |
| Other accounts payable and accrued expenses | | | 9,725 | | | | 9,855 | |
| Advances from customers | | | 4,360 | | | | 2,323 | |
| Contract liabilities | | | 172 | | | | 232 | |
| Operating lease short-term liabilities | | | 2,276 | | | | 1,885 | |
| | | | | | | | | |
Total current liabilities | | | 33,181 | | | | 25,352 | |
| | | | | | | | | |
| LONG-TERM LIABILITIES: | | | | | | | | |
| Accrued severance pay and other long-term liabilities | | | 775 | | | | 789 | |
| Operating lease long-term liabilities | | | 9,651 | | | | 8,732 | |
Total long-term liabilities | | | 10,426 | | | | 9,521 | |
| | | | | | | | | |
| RADA SHAREHOLDERS' EQUITY | | | | | | | | |
| Share capital - | | | | | | | | |
| Ordinary shares of NIS 0.03 par value - Authorized: 100,000,000 shares at June 30, 2021 and December 31, 2020; Issued and outstanding: 49,253,171 at June 30, 2021 and 43,724,446 at December 31, 2020 respectively | | | 488 | | | | 440 | |
| Additional paid-in capital | | | 202,159 | | | | 144,944 | |
| Accumulated deficit | | | (59,136 | ) | | | (73,351 | ) |
| | | | | | | | | |
Total equity | | | 143,511 | | | | 72,033 | |
| | | | | | | | | |
Total liabilities and equity | | $ | 187,118 | | | $ | 106,906 | |
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except share and per share data
| | | Six months ended
June 30, | | | Three months ended
June 30, | | | Year ended December 31, | |
| | | 2021 | | | 2020 | | | 2021 | | | 2020 | | | 2020 | |
| | | (Unaudited) | | | Audited | |
| | | | | | | | | | | | | | | | |
| Revenues | | $ | 53,472 | | | $ | 32,577 | | | $ | 28,255 | | | $ | 17,506 | | | $ | 76,217 | |
| | | | | | | | | | | | | | | | | | | | | |
| Cost of revenues | | | 32,243 | | | | 20,980 | | | | 16,990 | | | | 11,288 | | | | 47,882 | |
| | | | | | | | | | | | | | | | | | | | | |
| Gross profit | | | 21,229 | | | | 11,597 | | | | 11,265 | | | | 6,218 | | | | 28,335 | |
| | | | | | | | | | | | | | | | | | | | | |
| Operating expenses: | | | | | | | | | | | | | | | | | | | | |
| Research and development | | | 4,993 | | | | 4,239 | | | | 2,555 | | | | 2,186 | | | | 8,846 | |
| Marketing and selling | | | 2,956 | | | | 2,385 | | | | 1,530 | | | | 1,225 | | | | 5,017 | |
| General and administrative | | | 5,225 | | | | 4,293 | | | | 2,678 | | | | 2,173 | | | | 8,972 | |
| Net loss from sale of fixed asset | | | - | | | | - | | | | - | | | | - | | | | 27 | |
| Total operating expenses: | | | 13,174 | | | | 10,917 | | | | 6,763 | | | | 5,584 | | | | 22,862 | |
| Operating income | | | 8,055 | | | | 680 | | | | 4,502 | | | | 634 | | | | 5,473 | |
| | | | | | | | | | | | | | | | | | | | | |
| Other financial income (expenses), net | | | 122 | | | | 197 | | | | (97 | ) | | | 73 | | | | 167 | |
| | | | | | | | | | | | | | | | | | | | | |
| Income before taxes | | | 8,177 | | | | 877 | | | | 4,405 | | | | 707 | | | | 5,640 | |
| | | | | | | | | | | | | | | | | | | | | |
| Income tax | | | 6,038 | | | | - | | | | 6,038 | | | | - | | | | - | |
| | | | | | | | | | | | | | | | | | | | | |
| Net income | | | 14,215 | | | | 877 | | | | 10,443 | | | | 707 | | | | 5,640 | |
| | | | | | | | | | | | | | | | | | | | | |
| Basic net income per ordinary share | | $ | 0.30 | | | $ | 0.02 | | | $ | 0.21 | | | $ | 0.02 | | | $ | 0.13 | |
| | | | | | | | | | | | | | | | | | | | | |
| Diluted net income per Ordinary share | | $ | 0.29 | | | $ | 0.02 | | | $ | 0.20 | | | $ | 0.02 | | | $ | 0.13 | |
| | | | | | | | | | | | | | | | | | | | | |
| Weighted average number of Ordinary shares used for computing basic net income per share | | | 47,145,784 | | | | 43,041,405 | | | | 49,129,699 | | | | 43,403,276 | | | | 43,321,058 | |
| | | | | | | | | | | | | | | | | | | | | |
| Weighted average number of Ordinary shares used for computing diluted net income per share | | | 49,123,135 | | | | 44,002,634 | | | | 51,065,274 | | | | 44,302,325 | | | | 44,412,391 | |
