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RADA Electronic Industries Announces 2016 Results

NETANYA, Israel, March 27, 2017 (GLOBE NEWSWIRE) -- RADA Electronic Industries Ltd. (NASDAQ:RADA) announced today its financial results for the year and quarter ended December 31, 2016.

Management Comments

Dov Sella, RADA's Chief Executive Officer commented, “We are very pleased with our improved results in the fourth quarter of 2016, as our financial metrics have begun to demonstrate the successful turnaround process that we are undergoing. Following the investments in our company last year by some leading institutional funds, our balance sheet is healthy and we have the working capital to support and invest in our continued growth ahead. We plan to invest further in our growth engine, our software-defined tactical radars, where we currently see significant opportunities globally. In particular, and along with our cooperation with DRS Technologies, we see much potential in the U.S. market for our technology and plan to bolster our presence in the United States to capitalize on these opportunities. Looking ahead, as we announced a few weeks ago, we expect revenues to reach at least $18 million in 2017, representing a year over year growth of 40%.”

Added Yossi Ben Shalom, RADA’s chairman, “We congratulate Dov and his team for the strong improvement in the financial results in the quarter. RADA is a company with a lot of inherent potential in a growing market and we look forward to the improvement in performance in 2017.”

2016 Fourth Quarter Summary

Revenues totaled $4.3 million in the fourth quarter of 2016 compared to revenues of $3.5 million in the fourth quarter of 2015 and $3.3 million in the third quarter of 2016.

Gross Profit totaled $0.8 million in the fourth quarter of 2016 compared to gross profit of $0.6 million in the fourth quarter of 2015 and $0.4 million in the third quarter of 2016 .

Operating loss was reduced to $0.5 million in the fourth quarter of 2016 compared to an operating loss of $1.2 million in the fourth quarter of 2015 and $0.9 million in the third quarter of 2016.

Net loss attributable to RADA’s shareholders in the fourth quarter of 2016, was $0.5 million or $0.03 per share, an improvement when compared with a net loss of $1.9 million or $0.25 per share in the fourth quarter of 2015 and $1.0 million in the third quarter of 2016.

Full Year 2016 Results

Revenues totaled $12.8 million compared with revenues of $14.0 million in 2015.

Gross profit totaled $1.4 million compared with gross profit of $2.4 million in 2015.

Operating loss totaled $3.4 million compared with operating loss of $2.7 million in 2015.

Financial Expenses totaled $1.5 million, a 58% decrease compared to financial expenses of $3.6 million in 2015. The financial expenses in 2016 included a non-cash amortization expense of approximately $1.1 million. The non-cash amortization expense was associated with the debt discount resulting from the beneficial conversion feature applicable to a previously outstanding loan from RADA’s former principal shareholder. The Company recorded this non-cash amortization expense during the period until the repayment of the loan on June 16, 2016. On that date, RADA obtained a $3.2 million loan from institutional investment fund, DBSI, which was used to repay the loan from the former principal shareholder. The loan from DBSI has a small/limited beneficial conversion feature that would result in a non-cash amortization expense of approximately $0.1 million during the term of the loan.

As a result, the Company reported a net loss of $4.9 million, or $0.35 per share for the year ended December 31, 2016, compared with a net loss of $6.5 million, or $0.53 per share, for the for the year ended December 31, 2015.

About RADA Electronic Industries Ltd

RADA Electronic Industries Ltd. is an Israel-based defense electronics contractor. The Company specializes in the development, production, and sales of tactical land radar for force and border protection, inertial navigation systems for air and land applications and avionics systems and upgrades.

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.


CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share data
December 31,
2016 2015
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,205 $ 734
Restricted deposits 317 609
Trade receivables (net of allowance for doubtful accounts of $14 and $2 at December 31, 2016 and 2015) 5,006 3,646
Costs and estimated earnings in excess of billings on uncompleted contracts 1,096 2,207
Other accounts receivable and prepaid expenses 349 204
Inventories, net 7,102 5,691
Current assets related to discontinued operations 2,254 2,288
Total current assets 17,329 15,379
LONG-TERM ASSETS:
Long-term receivables and other deposits 742 119
Property, plant and equipment, net 2,650 2,687
Long-term assets related to discontinued operations 266 391
Total assets $ 20,987 $ 18,576


CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share data December 31,
2016 2015
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Bank credit $ 575 $ 2,416
Trade payables 2,557 1,951
Convertible note and loans from shareholders, net - 1,634
Other accounts payable and accrued expenses 1,987 2,630
Advances from customers, net 839 -
Current liabilities related to discontinued operations 265 226
Total current liabilities 6,223 8,857
LONG-TERM LIABILITIES:
Convertible loan from shareholders, net 3,072 -
Accrued severance pay and other long term liability 663 660
Total long-term liabilities 3,735 660
COMMITMENTS AND CONTINGENT LIABILITIES
EQUITY:
Share capital -
Ordinary shares of NIS 0.03 par value - Authorized: 37,500,000 and 15,000,000 shares at December 31, 2016 and at December 31, 2015 respectively;
Issued and outstanding: 21,246,502 and 7,949,444 at December 31, 2016 and at December 31, 2015 respectively. 250 146
Additional paid-in capital 89,407 82,427
Accumulated other comprehensive income 222 387
Accumulated deficit (79,363) (74,453)
Total RADA Electronic Industries shareholders' equity 10,516 8,507
Non-controlling interest 513 552
Total equity 11,029 9,059
Total liabilities and equity $ 20,987 $ 18,576


CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except per share data
Year ended
December 31,

Three months ended
December 31,
2016 201520162015
AuditedUnaudited
Revenues:
Products$ 11,663 $ 12,375 $ 4,064 $ 3,221
Services 1,158 1,699 239 311
12,821 14,074 4,303 3,532
Cost of revenues:
Products 10,594 11,139 3,376 2,853
Services 785 526 107 94
11,379 11,665 3,483 2,947
Gross profit 1,442 2,409 820 585
Operating expenses:
Research and development, net 758 693 225 150
Marketing and selling 2,269 2,357 615 618
General and administrative 1,814 1,513 521 405
Goodwill impairment - 587 - 587
Total operating expenses: 4,841 5,150 1,361 1,760
Operating loss (3,399) (2,741) (541) (1,175)
Amortization of shareholders' convertible loans discount and beneficial conversion feature (BCF) 1,116 2,684 10 581
Other financial expenses (income), net 405 893 (8) 152
Total financial expenses, net 1,521 3,577 2 733
Net income (loss) from continuing operations (4,920 )
(6,318 )
(543) (1,908
)
Net income (loss) from discontinued operations 13 (179) 57 (62)
Net income (loss) (4,907) (6,497) (486) (1,970)
Net income (loss) attributable to non-controlling interest 3 (36) 11 (12)
Net income (loss) attributable to RADA Electronic Industries' shareholders$ (4,910)$ (6,461)$(497) $ (1,958)
Basic and diluted net income (loss) from continuing operations$ (0.35)$ (0.53)$ (0.03)$ (0.25)
Basic and diluted net income (loss) from discontinued operations per Ordinary share$ 0.00 $ (0.00)$ 0.00 $ (0.00)
Basic and diluted net income (loss)$ (0.35)$ (0.55)$ (0.03)$ (0.25)
Weighted average number of Ordinary shares used for computing basic and diluted net income (loss) per share 14,029,346 11,904,088 19,235,260 7,949,482


Company Contact: Shiri Lazarovich- C.F.O RADA Electronic Industries Ltd. Tel: +972-9-8921111 Shiri.Lazarovich@rada.com Investor Relations Contact: Ehud Helft/Gavriel Frohwein GK Investor & Public Relations Tel: +1 646 688 3559 rada@gkir.com

Source:RADA Electronic Industries Ltd.