RADA Ends 2021 with 54% Revenue Growth, Strong Profitability and Growing Margins
NETANYA, Israel, Feb. 09, 2022 (GLOBE NEWSWIRE) -- RADA Electronic Industries Ltd. (NASDAQ:RADA, TASE: RADA))) announced today its financial results for the year and quarter ended December 31, 2021.
Highlights of Full Year 2021
- Record revenues of $117.2 million, up 54% year-over-year;
- Gross margin of 41% up from 37% in 2020;
- Net income of $25.1 million compared to $5.6 million net income in 2020;
- Adjusted EBITDA of $27.3 million (23% margin) compared to $9.7 million (13% margin) in 2020;
- Year-end net cash position of $78.8 million.
Highlights of Q4 2021
- Quarterly revenues of $31.8 million, up 36% year-over-year;
- Gross margin of 41%, up from 39% in Q4 of 2020;
- Net income of $4.9 million compared to $2.6 million net income in Q4 of 2020;
- Adjusted EBITDA of $8.0 million (25% margin) compared to $3.9 million (17% margin) in Q4 of 2020.
Management Comment
Dov Sella, RADA's Chief Executive Officer commented, "2021 was RADA's best year ever with top line growth of 54%, higher margins across the board and our Adjusted EBITDA almost tripled. As our guidance implies, we expect strong revenue growth to continue into 2022 and accelerate thereafter with our forecast to organically reach $250 million in three to four years. Beyond that, M&A is expected to become an accretive part of our overall growth strategy, which is aimed at enhancing our medium-term organic growth."
Concluded Mr. Sella, "With the large investments in operations and capacity behind us, and given the expected revenue growth, we look forward to enjoying the leverage in our operating model and accelerated profit growth over the years ahead."
2021 Fourth Quarter Summary
Revenues totaled $31.8 million in quarter, an increase of 36% compared with revenues of $23.3 million in the fourth quarter of 2020.
Gross Profit totaled $13.0 million in quarter (or 41% of revenues) compared to gross profit of $9.0 million in the fourth quarter of 2020 (or 39% of revenues).
Operating Profit was $6.0 million in the quarter compared to operating profit of $2.8 million in the fourth quarter of 2020.
Net Income in the quarter, was $4.9 million, or $0.11 per share, compared to net income of $2.6 million, or $0.06 per share, in the fourth quarter of 2020.
Adjusted EBITDA was $8.0 million (or 25% of revenues) in the quarter compared to Adjusted EBITDA of $3.9 million (or 17% of revenues) in the fourth quarter of 2020.
Full Year 2021 Results Summary
Revenues totaled $117.2 million, an increase of 54% compared to revenues of $76.2 million in 2020.
Gross Profit totaled $47.5 million (or 41% of revenues) compared to gross profit of $28.3 million (or 37% of revenues) in 2020.
Operating Profit totaled $20.3 million compared to operating profit of $5.5 million in 2020.
Net Income was $25.1 million, or $0.52 per share for the year ended December 31, 2021, compared to net income of $5.6 million, or $0.13 per share, for the year ended December 31, 2020.
Adjusted EBITDA was $27.3 million (or 23% of revenues) in 2021 compared to Adjusted EBITDA of $9.7 million (or 13% of revenues) in 2020.
As of December 31, 2021, RADA had net cash and cash equivalents of $78.8 million, compared to $35.8 million as of year-end 2020.
Investor Conference Call
The Company will host a conference call later today, starting at 09:00 am ET (4pm 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 03-918-0610 and International +972-3-918-0610.
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.
A live webcast of the conference call will be available. Please register for the webcast 5-10 minutes prior to the call at RADA's 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: Avi Israel (CFO) Tel: +972-765-386-200 [email protected] www.rada.com | Investor Relations Contact: Ehud Helft GK Investor & Public Relations Tel: +1 646 688 3559 [email protected] |
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 military budgets, 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. 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 income 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
| Year ended December 31, | Three months ended December 31, | ||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||
| Net income | $ | 25,074 | $ | 5,640 | $ | 4,820 | $ | 2,638 | |||
| Tax expenses (income), net | (4,875 | ) | - | 892 | - | ||||||
| Financial expenses (income), net | 159 | (167 | ) | 299 | 144 | ||||||
| Depreciation | 3,660 | 2,289 | 1,060 | 677 | |||||||
| Employees Option Compensation | 3,022 | 1,436 | 810 | 415 | |||||||
| Other non-cash amortization | 247 | 476 | 112 | 67 | |||||||
| Adjusted EBITDA | $ | 27,287 | $ | 9,674 | $ | 7,993 | $ | 3,941 | |||
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share data
| December 31, | ||||||||
| ASSETS | 2021 | 2020 | ||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 78,746 | $ | 36,289 | ||||
| Restricted cash | 492 | 567 | ||||||
| Trade receivables | 32,747 | 14,095 | ||||||
| Contract asset | 930 | 756 | ||||||
| Other accounts receivable and prepaid expenses | 1,946 | 1,637 | ||||||
| Inventories | 48,882 | 28,783 | ||||||
| Total current assets | 163,743 | 82,127 | ||||||
| LONG-TERM ASSETS: | ||||||||
| Investment in affiliated company Long-term receivables and other deposits | 3,000 244 | - 230 | ||||||
| Property, plant and equipment, net | 19,888 | 13,968 | ||||||
| Deferred tax assets Operating lease right-of-use assets | 5,681 11,287 | - 10,581 | ||||||
| Total long-term-assets | 40,100 | 24,779 | ||||||
Total ASSETS | $ | 203,843 | $ | 106,906 | ||||
| CURRENT LIABILITIES: | ||||||||
| Short term loan | $ | - | $ | 454 | ||||
| Trade payables | 19,890 | 10,603 | ||||||
| Other accounts payable and accrued expenses | 13,445 | 9,855 | ||||||
| Advances from customers | 1,763 | 2,323 | ||||||
| Contract Liabilities | 474 | 232 | ||||||
| Operating lease short term liabilities | 2,262 | 1,885 | ||||||
| Total current liabilities | 37,834 | 25,352 | ||||||
| LONG-TERM LIABILITIES: | ||||||||
| Operating lease long-term liabilities | 9,160 | 8,732 | ||||||
| Accrued severance-pay and other long-term liability | 783 | 789 | ||||||
| Total long-term liabilities | 9,943 | 9,521 | ||||||
| RADA SHAREHOLDERS' EQUITY: | ||||||||
| Share capital - Ordinary shares of NIS 0.03 par value - Authorized: 100,000,000 shares on December 31, 2021 and December 31, 2020; Issued and outstanding: 49,402,847 and 43,724,446 on December 31, 2021 and on December 31, 2020 respectively | 489 | 440 | ||||||
| Additional paid-in capital | 203,854 | 144,944 | ||||||
| Accumulated deficit | (48,277 | ) | (73,351 | ) | ||||
| Total equity | 156,066 | 72,033 | ||||||
| Total LIABILITIES AND EQUITY | $ | 203,843 | $ | 106,906 | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except per share data
| Year ended December 31, | Three months ended December 31, | |||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Revenues: | $ | 117,236 | $ | 76,217 | $ | 31,760 | $ | 23,281 | ||||
| Cost of revenues | 69,691 | 47,882 | 18,699 | 14,302 | ||||||||
| Gross profit | 47,545 | 28,335 | 13,061 | 8,979 | ||||||||
| Operating expenses: | ||||||||||||
| Research and development, net | 10,014 | 8,846 | 2,536 | 2,378 | ||||||||
| Marketing and selling | 6,235 | 5,017 | 1,626 | 1,346 | ||||||||
| General and administrative | 10,933 | 8,972 | 2,883 | 2,446 | ||||||||
| Net loss from sale of fixed asset | 5 | 27 | 5 | 27 | ||||||||
| Total operating expenses: | 27,187 | 22,862 | 7,050 | 6,197 | ||||||||
| Operating Income | 20,358 | 5,473 | 6,011 | 2,782 | ||||||||
| Other Financial income (expenses), net | (159 | ) | 167 | (299 | ) | (144 | ) | |||||
| Income before taxes | 20,199 | 5,640 | 5,712 | 2,638 | ||||||||
Tax income (expenses) | 4,875 | - | (892 | ) | - | |||||||
| Net income | $ | 25,074 | $ | 5,640 | $ | 4,820 | $ | 2,638 | ||||
| Basic net income per Ordinary share | $ | 0.52 | $ | 0.13 | $ | 0.11 | $ | 0.06 | ||||
| Diluted net income per Ordinary share | $ | 0.50 | $ | 0.13 | $ | 0.10 | $ | 0.06 | ||||
Weighted average number of Ordinary shares used for computing basic net income per share | 48,255,097 | 43,321,058 | 49,385,220 | 43,654,343 | ||||||||
| Weighted average number of Ordinary shares used for computing diluted net income per share | 50,077,416 | 44,565,379 | 50,902,399 | 44,922,736 | ||||||||
