Press Releases

RADA Reports Q2/2022 Results

NETANYA, Israel, Aug. 17, 2022 (GLOBE NEWSWIRE) — RADA Electronic Industries Ltd. (NASDAQ: RADA, TASE: RADA) announced today its financial results for the three and six month periods ended June 30, 2022.

Highlights of the second quarter of 2022

  • Quarterly revenues of $23.0 million;
  • Gross margin of 35%;
  • Previously announced merger with DRS proceeding as expected – merger expenses of $2.6 million incurred in the second quarter;
  • Operating loss of $3.0 million;
  • Net loss of $4.4 million;
  • Adjusted EBITDA of $1.8 million representing margin of 7.7%;
  • Quarter-end net cash position of $55.7 million.

Management Comments

Dov Sella, RADA’s Chief Executive Officer commented, “As we announced a few weeks ago, similar to what is being experienced by many U.S. defense companies, it is taking longer than we originally expected to recover from the pause in revenue in the U.S. as the resumption of normal spending takes time. Nevertheless, I am pleased that we have not lost any opportunities, it is just a timing issue, and we expect that the second half of the year will be better than the first half”.

Continued Mr. Sella, “I am happy to report that the pending merger with U.S.-based DRS is proceeding as planned and we are actively working to identify top-line synergies within our businesses to actualize post-merger close. The merger creates a leading technology defense company in which RADA will continue to play an important role, with capabilities serving a broad range of high growth U.S. and global budget priorities. We see the merger fulfilling the long-term growth goals of RADA as part of a large and growing U.S. defense group.”

2022 Second Quarter Summary

Revenues totaled $23.0 million in the quarter compared with revenues of $28.3 million in the second quarter of 2021, a decrease of 18%.

Gross profit totaled $8.0 million in the quarter (35% of revenues), a decrease of 29% compared to gross profit of $11.3 million in the second quarter of 2021 (40% of revenues).

Other expenses$2.6 million of other expenses related to the RADA-DRS merger were recorded in the second quarter of 2022.

Operating loss was $3.0 million in the quarter compared to operating income of $4.5 million in the second quarter of 2021, principally attributable to the expenses related to the RADA-DRS merger.

Net loss was $4.4 million, or $0.09 per share, compared to net income of $10.4 million, or $0.21 per share, in the second quarter of 2021.

Adjusted EBITDA was $1.8 million in the quarter compared to adjusted EBITDA of $6.3 million in the second quarter of 2021.

2022 First Half Summary

Revenues totaled $45.6 million in the first half of 2022 compared with revenues of $53.5 million in the first half of 2021, a decrease of 15%.

Gross profit totaled $15.3 million in the first half of 2022 (34% of revenues), a decrease of 28% compared to gross profit of $21.2 million in the first half of 2021 (40% of revenues).

Other expenses$2.6 million of expenses related to the RADA-DRS merger were recorded in the second quarter.

Operating loss was $3.9 million in the first half of 2022 compared to operating income of $8.1 million in the first half of 2021. The operating loss was principally attributable to the merger expenses.

Net loss in the first half of 2022 was $5.1 million, or $0.10 per share, compared to net income of $14.2 million, or $0.30 per share, in the first half of 2021.

Adjusted EBITDA was $3.0 million in the first half of 2022 compared to adjusted EBITDA of $11.1 million in the first half of 2021.

As of June 30, 2022, RADA had net cash and cash equivalents of $55.7 million compared to $78.8 million as of year-end 2021. The decrease is mainly attributable to the Company’s inventories increase.

RADA and DRS Merger

On June 21, 2022 RADA and DRS announced an all-stock merger to create a publicly-traded leader in advanced sensing and force protection. Upon completion of the transaction, the combined company expects to be listed on the Nasdaq and on the TASE under the ticker symbol “DRS”.  

Investor Conference Call

The Company will host a conference call today, starting at 09:00 am ET. 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. To participate, please call one of the following telephone numbers a few minutes before the start of the call:

US: 1-888-723-3164 at 9:00 am Eastern Time
Israel: 03-918-0610 at 4:00 pm Israel Time
International: +972-3-918-0610  

A live webcast of the conference call can be accessed on the RADA website at www.rada.com/investors

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.

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 related to the pending merger with DRS, 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,
  2022 2021   2022 2021   2021
  (Unaudited)
  Audited
               
Net income (loss) $ (5,080 ) $ 14,215     $ (4,395 ) $ 10,443     $ 25,074  
Tax expenses (income), net   719     (6,038 )     882     (6,038 )     (4,875 )
Financial (income) expenses, net   482     (122 )     494     97       159  
Depreciation   2,448     1,599       1,257     843       3,660  
Employees non-cash option compensation   1,775     1,327       908     855       3,022  
Other expenses   2,628           2,628            
Other non-cash amortization   81     135           127       247  
               
Adjusted EBITDA $ 3,053   $ 11,116     $ 1,774   $ 6,327     $ 27,287  
               

CONSOLIDATED BALANCE SHEETS          
U.S. dollars in thousands, except share and per share data          
ASSETS  
June 30, 2022
  December 31, 2021  
    Unaudited   Audited  
CURRENT ASSETS:          
Cash and cash equivalents   $ 55,656     $ 78,746    
Restricted deposits     748       492    
Trade receivables     28,026       32,747    
Contract assets     864       930    
Other accounts receivables and prepaid expenses     2,967       1,946    
Inventories, net     64,860       48,882    
           
Total current assets     153,121       163,743    
           
LONG-TERM ASSETS:          
Equity investment in privately-held company     3,000       3,000    
Long-term receivables and other deposits     136       244    
Property, plant and equipment, net     20,664       19,888    
Deferred tax assets     5,291       5,681    
Operating lease right-of-use assets     14,396       11,287    
Total long-term assets     43,487       40,100    
           
Total assets   $ 196,608     $ 203,843    
CURRENT LIABILITIES:          
Trade payables     12,627       19,890    
Other accounts payable and accrued expenses     13,359       13,445    
Advances from customers     1,582       1,763    
Contract liabilities     259       474    
Operating lease short-term liabilities     2,793       2,262    
           
Total current liabilities     30,620       37,834    
           
LONG-TERM LIABILITIES:          
Accrued severance pay and other long-term liabilities     724       783    
Deferred tax liabilities     908          
Operating lease long-term liabilities     11,595       9,160    
Total long-term liabilities     13,227       9,943    
RADA SHAREHOLDERS’ EQUITY        
Share capital –          
Ordinary shares of NIS 0.03 par value – Authorized: 100,000,000 shares at June 30, 2022 and December 31, 2021; Issued and outstanding: 49,718,045 at June 30, 2022 and 49,402,847 at December 31, 2021 respectively     497       489    
Additional paid-in capital     205,621       203,854    
Accumulated deficit     (53,357 )     (48,277 )  
Total equity     152,761       156,066    
           
Total liabilities and equity   $ 196,608     $ 203,843    
                   

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,
  2022 2021   2022 2021   2021
  (Unaudited)
  Audited
               
Revenues $ 45,568   $ 53,472   $ 23,061   $ 28,255     $ 117,236  
               
Cost of revenues   30,245     32,243     15,081     16,990       69,691  
               
Gross profit   15,323     21,229     7,980     11,265       47,545  
               
Operating expenses:              
Research and development   5,795     4,993     2,941     2,555       10,014  
Marketing and selling   3,813     2,956     1,930     1,530       6,235  
General and administrative   6,966     5,225     3,500     2,678       10,933  
Other expenses   2,628         2,628            
Net loss from sale of fixed asset                     5  
Total operating expenses   19,202     13,174     10,999     6,763       27,187  
Operating income (loss)   (3,879 )   8,055     (3,019 )   4,502       20,358  
Other financial income (expenses), net   (482 )   122     (494 )   (97 )     (159 )
Income (loss) before taxes   (4,361 )   8,177     (3,513 )   4,405       20,199  
Tax Income (expenses), net   (719 )   6,038     (882 )   6,038       4,875  
Net income (loss) $ (5,080 ) $ 14,215   $ (4,395 ) $ 10,443     $ 25,074  
Basic net income (loss) per ordinary share $ (0.10 ) $ 0.30   $ (0.09 ) $ 0.21     $ 0.52  
Diluted net income (loss) per Ordinary share $ (0.10 ) $ 0.29   $ (0.09 ) $ 0.20     $ 0.50  
Weighted average number of Ordinary shares used for computing basic net income (loss) per share  

49,592,329

   

47,145,784

    49,710,730     49,129,699       48,255,097  
Weighted average number of Ordinary shares used for computing diluted net income (loss) per share   51,120,644     49,123,135     51,173,263     51,065,274       50,077,416  

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