Exhibit 99.1
FOR IMMEDIATE RELEASE
RADA Electronic Industries Announces Q2 2018 Results:
24% growth in revenue with strong order momentum and backlog growth
Expects revenues of approximately $27m for FY 2018
Investor conference call to be held today at 10am ET
Netanya, Israel, August 15, 2018 – RADA Electronic Industries Ltd. (NASDAQ: RADA)announced today its financial results for the quarter ended June 30, 2018.
Management Comments
Dov Sella, RADA’s Chief Executive Officer commented, “We are very pleased with our financial performance, especially our growth in revenues and our strongly broadening pipeline of potential orders. Furthermore, the investments we have made in our newly established presence in the United States are enabling us to make some significant strategic progress and has led to increased traction for our radars in the region. We expect our presence will lead to strong growth in orders in the coming quarters.”
Continued Mr. Sella, “For the year 2018, we expect revenues of around $27 million, ahead of last year’s revenue, which itself was one of the strongest years ever for RADA. While last year’s significant step up in revenue was built on the back of one specific order in the second half of the year, in 2018 it is made up of orders from a diverse range of customers. Some of these are initial radar orders from new customers with the possibility of follow-on orders at a ten-fold potential. As we move through 2018, I am increasingly excited with regard to our future and I am very happy that RADA is beginning to realize its large inherent potential”, concluded Mr. Sella.
2018 Second Quarter Summary
Revenuestotaled $6.6 million in the second quarter of 2018, up 24% compared to revenues of $5.3 million in the second quarter of 2017.
Gross Profit totaled $2.4 million in the second quarter of 2018 (gross margin of 36.2%) compared to gross profit of $1.7 million (gross margin of 31.3%) in the second quarter of 2017.
Operating income was $104 thousand in the second quarter of 2018 compared to an operating income of $511 thousand in the second quarter of 2017. Operating expenses increased in the quarter to $2.3 million from $1.2 million in the second quarter of last year, primarily due to increased investment in R&D and SG&A, due to RADA’s recently established presence in the United States.
Net incomeattributable to RADA’s shareholders in the second quarter of 2018 was $51 thousand, compared with net income of $495 thousand in the second quarter of 2017.
EBITDAwas $546 thousand in the second quarter of 2018 compared to EBITDA of $838 thousand in the second quarter of 2017.
In terms of liquidity and capital resources, as of June 30, 2018, the Company had cash and cash equivalents, of $15.6 million or $0.47 per share, compared with $12.4 million or $0.40 per share as of December 31, 2017. As of June 30, 2018, the Company did not have any financial liabilities. Cash flow from operations for the quarter was a positive $2.5 million, mainly due to strong collections from customers.
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 1-888-668-9141; 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 athttp://www.rada.combeginning 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: | Investor Relations Contact: |
Avi Israel – CFO RADA Electronic Industries Ltd. Tel: +972-9-8921111 mrkt@rada.com | Ehud Helft/Gavriel Frohwein 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. 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
| | | Three months ended
June 30, | |
| | | 2018 | | | 2017 | |
| | | | | | | |
| Operating Income | | | 104 | | | | 511 | |
| Depreciation | | | 174 | | | | 157 | |
| Employees Option Compensation | | | 268 | | | | 42 | |
| Other non-cash amortization | | | — | | | | 128 | |
| | | | | | | | | |
| EBITDA | | | 546 | | | | 838 | |
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share data
| | | June 30, 2018 | | | December 31, 2017 | |
| | | Unaudited | | | Audited | |
| ASSETS | | | | | | | | |
| CURRENT ASSETS: | | | | | | | | |
| Cash and cash equivalents | | $ | 15,558 | | | $ | 12,417 | |
| Restricted cash | | | 422 | | | | 322 | |
| Trade receivables (net of allowance for doubtful accounts of $2 at June 30, 2018 and $14 at December 31, 2017) | | | 5,051 | | | | 7,286 | |
| Costs and estimated earnings in excess of billings on uncompleted contracts | | | 757 | | | | 995 | |
| Other receivables and prepaid expenses | | | 491 | | | | 330 | |
| Inventories | | | 7,037 | | | | 7,910 | |
| Current assets related to discontinued operations | | | 2,130 | | | | 2,468 | |
| | | | | | | | | |
| Totalcurrent assets | | | 31,446 | | | | 31,728 | |
| | | | | | | | | |
| LONG-TERM ASSETS: | | | | | | | | |
| Long-term receivables and other deposits | | | 72 | | | | 68 | |
| Property, plant and equipment, net | | | 4,232 | | | | 3,915 | |
| Long-term assets related to discontinued operations | | | 281 | | | | 319 | |
| Totallong term assets | | | 4,585 | | | | 4,302 | |
| | | | | | | | | |
| Totalassets | | $ | 36,031 | | | $ | 36,030 | |
| | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
| | | | | | | | | |
| CURRENT LIABILITIES: | | | | | | | | |
| Trade payables | | $ | 2,227 | | | $ | 2,904 | |
| Other accounts payable and accrued expenses | | | 2,276 | | | | 2,814 | |
| Advances from customers, net | | | 116 | | | | 41 | |
| Current liabilities related to discontinued operations | | | 411 | | | | 328 | |
| | | | | | | | | |
| Totalcurrent liabilities | | | 5,030 | | | | 6,087 | |
| | | | | | | | | |
| LONG-TERM LIABILITIES: | | | | | | | | |
| Accrued severance pay and other long-term liabilities | | | 760 | | | | 758 | |
| Totallong-term liabilities | | | 760 | | | | 758 | |
| | | | | | | | | |
| RADA SHAREHOLDERS’ EQUITY | | | | | | | | |
| Share capital - | | | | | | | | |
| Ordinary shares of NIS 0.03 par value - Authorized: 100,000,000 shares at June 30, 2018 and 37,500,000 at December 31, 2017; Issued and outstanding: 32,895,576 at June 30, 2018 and 31,392,040 at December 31, 2017. | | | 348 | | | | 335 | |
| Additional paid-in capital | | | 106,110 | | | | 104,923 | |
| Accumulated other comprehensive income | | | 105 | | | | 392 | |
| Accumulated deficit | | | (76,854 | ) | | | (77,124 | ) |
| | | | | | | | | |
| Total RADA shareholders’ equity | | | 29,709 | | | | 28,526 | |
| Non-controlling interest | | | 532 | | | | 659 | |
| Totalequity | | | 30,241 | | | | 29,185 | |
| Totalliabilities and equity | | $ | 36,031 | | | $ | 36,030 | |
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, | |
| | | 2018 | | | 2017 | | | 2018 | | | 2017 | | | 2017 | |
| | | | | | (Unaudited) | | | Audited | |
| | | | | | | | | | | | | | | | |
| Revenues | | $ | 12,596 | | | $ | 9,992 | | | $ | 6,576 | | | $ | 5,317 | | | $ | 26,182 | |
| | | | | | | | | | | | | | | | | | | | | |
| Cost of revenues | | | 8,037 | | | | 6,659 | | | | 4,196 | | | | 3,653 | | | | 17,919 | |
| | | | | | | | | | | | | | | | | | | | | |
| Gross profit | | | 4,559 | | | | 3,333 | | | | 2,380 | | | | 1,664 | | | | 8,263 | |
| | | | | | | | | | | | | | | | | | | | | |
| Operating expenses: | | | | | | | | | | | | | | | | | | | | |
| Research and development | | | 1,284 | | | | 406 | | | | 692 | | | | 208 | | | | 1,575 | |
| Marketing and selling | | | 1,284 | | | | 855 | | | | 650 | | | | 419 | | | | 2,137 | |
| General and administrative | | | 1,682 | | | | 1,212 | | | | 934 | | | | 526 | | | | 2,568 | |
| Total operating expenses: | | | 4,250 | | | | 2,473 | | | | 2,276 | | | | 1,153 | | | | 6,280 | |
| Operating Income | | | 309 | | | | 860 | | | | 104 | | | | 511 | | | | 1,983 | |
| Amortization of shareholders’ convertible loans discount and beneficial conversion feature | | | - | | | | 19 | | | | - | | | | 8 | | | | 103 | |
| Other financial expenses (income), net | | | (3 | ) | | | (10 | ) | | | 4 | | | | 30 | | | | 53 | |
| Net income from continuing operations | | | 312 | | | | 851 | | | | 100 | | | | 473 | | | | 1,827 | |
| Net income (loss) from discontinued operations | | | (97 | ) | | | 40 | | | | (88 | ) | | | 28 | | | | 515 | |
| Net income | | | 215 | | | | 891 | | | | 12 | | | | 501 | | | | 2,342 | |
| Net income (loss) attributable to non-controlling interest | | | (55 | ) | | | 8 | | | | (39 | ) | | | 6 | | | | 103 | |
| Net income attributable to RADA Electronic Industries’ shareholders | | $ | 270 | | | $ | 883 | | | $ | 51 | | | $ | 495 | | | $ | 2,239 | |
| Basic net income from continuing operations per ordinary shares | | $ | 0.01 | | | $ | 0.04 | | | $ | 0.00 | | | $ | 0.02 | | | $ | 0.07 | |
| Diluted net income from continuing operations per Ordinary share | | $ | 0.01 | | | $ | 0.04 | | | $ | 0.00 | | | $ | 0.02 | | | $ | 0.06 | |
| Basic and diluted net income from discontinued operations per ordinary share | | $ | 0.00 | | | $ | 0.00 | | | $ | 0.00 | | | $ | 0.00 | | | $ | 0.02 | |
| | | | | | | | | | | | | | | | | | | | | |
Basic net income per ordinary share
| | $ | 0.01 | | | $ | 0.04 | | | $ | 0.00 | | | $ | 0.02 | | | $ | 0.09 | |
| | | | | | | | | | | | | | | | | | | | | |
| Diluted net income per ordinary share | | $ | 0.01 | | | $ | 0.04 | | | $ | 0.00 | | | $ | 0.02 | | | $ | 0.08 | |
| Weighted average number of ordinary shares used for computing basic net income per share | | | 32,745,620 | | | | 21,780,651 | | | | 32,885,141 | | | | 21,893,919 | | | | 24,956,915 | |
| | | | | | | | | | | | | | | | | | | | | |
| Weighted average number of ordinary shares used for computing diluted net income per share | | | 33,269,376 | | | | 21,780,651 | | | | 33,314,361 | | | | 21,893,919 | | | | 28,126,509 | |
