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.
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|
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.
Avi Israel (CFO)
Investor Relations Contact:
GK Investor & Public Relations
Tel: +1 646 688 3559
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
|Three months ended|
|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|
|Employees non-cash option compensation||1,775||1,327||908||855||3,022|
|Other non-cash amortization||81||135||-||127||247|
|CONSOLIDATED BALANCE SHEETS|
|U.S. dollars in thousands, except share and per share data|
June 30, 2022
|December 31, 2021|
|Cash and cash equivalents||$||55,656||$||78,746|
|Other accounts receivables and prepaid expenses||2,967||1,946|
|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|
|Other accounts payable and accrued expenses||13,359||13,445|
|Advances from customers||1,582||1,763|
|Operating lease short-term liabilities||2,793||2,262|
|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|
|Totalliabilities and equity||$||196,608||$||203,843|
|CONSOLIDATED STATEMENTS OF OPERATIONS|
|U.S. dollars in thousands, except share and per share data|
Six months ended
|Three months ended|
|Cost of revenues||30,245||32,243||15,081||16,990||69,691|
|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|
|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
Income (loss) before taxes
Tax Income (expenses), net
Net income (loss)
Basic net income (loss) per ordinary share
Diluted net income (loss) per Ordinary share
Weighted average number of Ordinary shares used for computing basic net income (loss) per share
Weighted average number of Ordinary shares used for computing diluted net income (loss) per share
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