Israel's RADA, producer of tactical radars, announces record Q2 results

The defense company took in revenues of $17.5 million during the three-month period and increased full-year revenue guidance to over $70 million 

A U.S. military all-terrain vehicle equipped with one of the company's tactical radars. Photo: RADA

Israel's RADA Electronic Industries Ltd. announced Tuesday its financial results for the three-month and six-month periods ended June 30, 2020.

Revenues of RADA, a global defense technology company focused on proprietary radar solutions and legacy avionics systems, totaled $17.5 million in the quarter compared with revenues of $10 million in the second quarter of 2019, an increase of 75%.

Gross profit totaled $6.2 million in the quarter (36% of revenues), an increase of 73% compared to gross profit of $3.6 million in the second quarter of 2019 (36% of revenues).
Operating income was $0.6 million in the quarter compared to an operating loss of $0.8 million in the second quarter of 2019.

Net income attributable to RADA’s shareholders in the quarter was $0.7 million, or $0.02 per share, compared to a net loss of $0.6 million, or $0.01 per share, in the second quarter of 2019.

Adjusted EBITDA was $1.7 million in the quarter compared to adjusted EBITDA loss of $0.3 million in the second quarter of 2019.

Meanwhile, revenues totaled $32.6 million in the first half of 2020 compared with revenues of $18.7 million in the first half of 2019, an increase of 74%.

Gross profit totaled $11.6 million in the first half (36% of revenues), an increase of 72% compared to gross profit of $6.7 million in the first half of 2019 (36% of revenues).

Operating income was $0.7 million in the first half of 2020 compared to an operating loss of $1.4 million in the first half of 2019.

Adjusted EBITDA was $2.6 million in the first half of 2020 compared to adjusted EBITDA loss of $0.3 million in the first half of 2019.

Net income attributable to RADA’s shareholders in the first half was $0.9 million, or $0.02 per share, compared to a net loss of $1 million, or $0.03 per share, in the first half of 2019. 

As of June 30, 2020, RADA had net cash and cash equivalents of $29.5 million compared to $13.8 million as of year-end 2019.  The inventory level has increased to $26.5 million from $17.2 million as at the end of 2019. RADA management decided to strategically increase the inventory level to support the future expected growth and to ensure full availability of components, given the current environment and the need to mitigate against any negative influence of the COVID-19 pandemic on the supply chain.

The company is a leader in mini-tactical radars, serving high-growth markets including active military protection, counter-UAS, critical infrastructure protection and border surveillance.

Dov Sella, RADA's CEO, commented, “We are very pleased with our results and the positive momentum in our business, which led to a significant 75% year-over-year revenue growth and sequential quarterly growth of 16%. Our strong revenue growth, stable gross margins and stabilizing operating expenses are yielding strong EBITDA improvement. We reported Adjusted EBITDA of $1.7 million in the quarter, which was more than double that of the first quarter.”

“Our radars enable life-saving active protection solutions for advanced military tactical forces and critical infrastructure, and are in the heart of current modernization programs, especially in the USA. The strong demand for our radars is being driven by significant and urgent counter-UAV, SHORAD and C-RAM needs in the US and other geographies.  Our orders in-hand have enabled us to increase our 2020 revenue guidance to over $70 million. As our end-markets become mainstream, we expect the growth to continue throughout the remainder of this year and into 2021. Our net cash level of $30 million is sufficient for our working capital and R&D needs to support our expected strong growth,” Sella said.