GlobeNewswire Inc | Feb 10, 2021 05:28AM EST

February 10, 2021

Revenues in Q4/20 reach $23.3 million, up 62% YoY with EBITDA margins of 17%

Re-iterates 2021 revenue guidance to exceed $120million

NETANYA, Israel, Feb. 10, 2021 (GLOBE NEWSWIRE) -- RADA Electronic Industries Ltd. (NASDAQ: RADA) announced today its financial results for the year and quarter, ended December 31, 2020.

Highlights of Full Year2020

-- Record revenues of $76.2 million, up 72% year-over-year; -- Gross margin of 37%, up from 36% in 2019; -- Net income of $5.6 million, compared to $2.3 million net loss in 2019; -- EBITDA of $9.7 million, compared to $0.4 million in 2019; -- Year-end net cash position of $35.8 million.

Highlights of Q4 2020

-- Record quarterly revenues of $23.3 million, up 62% year-over-year; -- Gross margin of 39%, up from 36% in Q4 of 2019; -- Net income of $ 2.6 million, compared to $0.3 million net loss in 2019; -- EBITDA of $3.9 million, representing EBITDA margin of 17%.

Management Comment

Dov Sella, RADA's Chief Executive Officer commented, We are exceptionally pleased with our performance in 2020, growing our top line by 72% to an all-time record of $76.2 million. Furthermore, even while making the significant investments in our infrastructure, including establishing a new production line and a presence in the United States, we generated EBITDA of almost $10 million for the year. Given our increased scale and that our large investments are now behind us, we look forward to continued strong revenue growth, with higher profit margins.

Continued Mr. Sella, Today we are announcing the signing of an LOI to invest $3 million for a 12% stake in RADSee Technologies Ltd., an early-stage and advanced radar technology company, targeting the commercial vehicle market, both current and autonomous. We see many technological synergies through this investment which has the potential to expand our addressable markets in the future. We retain an option to increase our stake should we see that their solution is maturing. At this point, we are taking a minority stake so that we may remain focused on the massive growth potential in our current end-markets.

Concluded Mr. Sella, Our strong order momentum since mid-2019, which continued into 2020, has increased our confidence that we will exceed revenues of $120 million in 2021. We expect that as the current programs to which we are supplying our radars mature, the growth trend of our revenues will continue beyond 2021.

2020Fourth Quarter Summary

Revenues totaled $23.3 million in the fourth quarter of 2020, an increase of 62% compared with revenues of $14.4 million in the fourth quarter of 2019.

Gross Profit totaled $9.0 million in the fourth quarter of 2020 (or 39% of revenues) compared to gross profit of $5.1 million in the fourth quarter of 2019 (or 36% of revenues).

Operating Profit was $2.8 million in the fourth quarter of 2020 compared to an operating loss of $0.2 million in the fourth quarter of 2019.

Net Income attributable to RADAs shareholders in the fourth quarter of 2020, was $2.6 million, or $0.06 per share, compared to a net loss of $0.3 million, or $0.01 per share, in the fourth quarter of 2019.

The Companys EBITDA was $3.9 million (or 17% of revenues) in the fourth quarter of 2020 compared to EBITDA of $0.6 million (or 4% of revenues) in the fourth quarter of 2019.

Full Year 2020Results Summary

Revenues totaled $76.2 million, an increase of 72% compared to revenues of $44.3 million in 2019.

Gross Profittotaled $28.3 million (or 37% of revenues) comparedto gross profit of $15.9 million (or 36% of revenues) in 2019.

Operating Profit totaled $5.5 million compared to an operating loss of $2.1 million in2019.

Netincome attributable to RADAs shareholders was $5.6 million, or $0.13 per share for the year ended December 31, 2020, compared to a net loss of $2.0 million, or $0.05 per share, for the year ended December 31, 2019.

The Companys EBITDA was $9.7 million (or 13% of revenues) in 2020 compared to EBITDA of $0.4 million (or 1% of revenues) in 2019.

As of December 31, 2020, RADA had net cash and cash equivalents of $35.8 million, compared to $13.8 million as of year-end 2019.

Investor Conference Call

The Company will host a conference call later today, starting at 10:00 am ET (5pm 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 RADAs website atwww.rada.com beginning 48 hours after the call.

A live webcast of the conference call will be available. Please register for the webcast 5-10 minutes prior to the call at RADAs website: https://www.rada.com/investors following which, a link to the live webcast will be sent to you.

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 active military protection, counter-UAS, critical infrastructure protection and border surveillance.

Contact Information

Company Contact: Investor Relations Contact:Avi Israel (CFO) Ehud HelftTel: +972-765-386-200 GK Investor & Public Relationsmrkt@rada.com Tel: +1 646 688 3559www.rada.com 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, the impact of COVID-19 on our company and our industry, 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. RADAs 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 GAAP TO NON-GAAP RESULTS

U.S. dollars in thousands

Three months Year ended December 31, ended December 31, 2020 2019 2020 2019 Net Income (loss) from continued $ 5,640 $ (2,224 ) $ 2,638 $ (180 )operationsFinancial expenses (income), net (167 ) 121 144 (29 )Depreciation 2,289 1,223 677 454 Employees Option Compensation 1,436 1,148 415 313 Other non-cash amortization 476 139 67 29 EBITDA $ 9,674 $ 407 $ 3,941 $ 587



CONSOLIDATED BALANCE SHEETSU.S. dollars in thousands, except share and per share data

December 31, 2020 2019 ASSETS CURRENT ASSETS: Cash and cash $ 36,289 $ 13,754equivalentsRestricted deposits 567 380Trade receivables 14,095 13,765Contract asset 756 1,269Other accountsreceivable and 1,637 1,673prepaid expensesInventories, net 28,783 17,196 Total current assets 82,127 48,037 LONG-TERM ASSETS: Long-termreceivables and 230 97other depositsProperty, plant and 13,968 9,127equipment, netOperating lease 10,581 7,654right-of-use assetsTotal long-term-assets 24,779 16,878 Total ASSETS $ 106,906 $ 64,915

CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands, except share and per share data December 31, 2020 2019 LIABILITIES AND EQUITY CURRENT LIABILITIES: Short term loan $ 454 $ -Trade payables 10,603 7,661Other accounts payable and accrued expenses 9,855 5,572Advances from customers 2,323 1,563Contract Liabilities 232 196Operating lease short term liabilities 1,885 1,240 Total current liabilities 25,352 16,232 LONG-TERM LIABILITIES: Operating lease long-term liabilities 8,732 6,499Accrued severance-pay and other long-term liability 789 764 Total long-term liabilities 9,521 7,263 EQUITY: Share capital - Ordinary shares of NIS 0.03 par value - Authorized:100,000,000 shares and 100,000,000 shares atDecember 31, 2020 and December 31, 2019; Issued and 440 394outstanding: 43,724,446 and 38,456,693 at December31, 2020 and at December31, 2019 respectively.Additional paid-in capital 144,944 120,017Accumulated deficit (73,351) (78,991) Total RADA Electronic Industries shareholders' 72,033 41,420equity Total equity 72,033 41,420 Total LIABILITIES AND EQUITY $ 106,906 $ 64,915

CONSOLIDATEDSTATEMENTS OF OPERATIONSU.S. dollars inthousands, except pershare data Year ended December 31, Three months ended December 31, 2020 2019 2020 2019 Revenues: 76,217 44,331 23,281 14,356 Cost of 47,882 28,394 14,302 9,250 revenues Gross profit 28,335 15,937 8,979 5,106 Operating expenses:Research anddevelopment, 8,846 6,912 2,378 1,987 netMarketing and 5,017 4,044 1,346 1,253 sellingGeneral and 8,972 7,084 2,446 2,075 administrativeNet loss fromsale of fixed 27 - 27 - assetTotal operating 22,862 18,040 6,197 5,315 expenses:Operating 5,473 (2,103 ) 2,782 (209 )Income (Loss)Financialexpenses (167 ) 121 144 (29 )(income), net Net income(loss) from 5,640 (2,224 ) 2,638 (180 )continuingoperations Net Income(loss) from - (115 ) - (115 )discontinuedoperations Net income 5,640 (2,339 ) 2,638 (295 )(loss) Net income(loss)attributable to - (309 ) - - non-controllinginterestNet income(loss)attributable to $ 5,640 $ (2,030 ) $ 2,638 $ (295 )RADA ElectronicIndustries'shareholders Basic netincome (loss)from continuing $ 0.13 $ (0.05 ) $ 0.06 $ ( 0.01 )operations perOrdinary shareDiluted netincome (loss)from continuing $ 0.13 $ (0.05 ) $ 0.06 $ (0.01 )operations perOrdinary shareBasic anddiluted netincome (loss)from $ 0.00 $ (0.00 ) $ 0.00 $ (0.00 )discontinuedoperations perOrdinary shareBasic netincome (loss) $ 0.13 $ (0.05 ) $ 0.06 $ (0.01 )per OrdinaryshareDiluted netincome (loss) $ 0.13 $ (0.05 ) $ 0.06 $ (0.01 )per Ordinaryshare Weightedaverage numberof Ordinaryshares used for 43,321,058 38,148,756 43,654,343 38,439,848 computing basicnet income(loss) pershareWeightedaverage numberof Ordinaryshares used for 44,412,391 38,841,866 44,922,736 39,491,610 computingdiluted netincome (loss)per share