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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, Aug. 15, 2018 (GLOBE NEWSWIRE) -- 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 have 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

Revenues totaled $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 income attributable 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.

EBITDA was $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 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 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: 
Avi Israel - CFO 
RADA Electronic Industries Ltd.
Tel: +972-9-8921111
mrkt@rada.com
Investor Relations Contact:
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
         
ASSETS   June 30,
2018
  December 31,
2017
    Unaudited   Audited
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  
         
Total current 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  
Total long term assets     4,585       4,302  
         
Total assets   $ 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  
         
Total current liabilities     5,030       6,087  
         
LONG-TERM LIABILITIES:        
Accrued severance pay and other long-term liabilities     760       758  
Total long-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  
Total equity     30,241       29,185  
Total liabilities 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
             


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