UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 6-K
 
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
 
For the month of
March 2020
 
RADA ELECTRONIC INDUSTRIES LIMITED
(Name of Registrant)
 
7 Giborei Israel Street, Netanya 4250407, Israel
(Address of Principal Executive Office)
 
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
 
Form 20-F ☒ Form 40-F ☐
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
 
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
 
Yes ☐ No ☒
 
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ____________
 
This Form 6-K and its exhibits are being incorporated by reference into the Registrant’s Form F-3 Registration Statements (File Nos. 333-212643, 333-216973, 333-220304, 333-226387) and Form S-8 (File No. 333-213284). 
 


RADA ELECTRONIC INDUSTRIES LTD.
 
EXPLANATORY NOTE
 
The following exhibits are attached:
 
99.1
Press release: RADA Electronic Industries Announces FY 2019 and Q4 2019 Results
 



SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
Rada Electronic Industries Ltd.
 
 
(Registrant)
 
 
 
 
 
 
By:
/s/ Dov Sella
 
 
 
Dov Sella
 
 
 
Chief Executive Officer
 
 
Date: March 10, 2020
 

 
EXHIBIT INDEX
 
EXHIBIT NO.
 
DESCRIPTION

 
 
 
 
99.1




Exhibit 99.1


FOR IMMEDIATE RELEASE

RADA Electronic Industries Announces
Record Fourth Quarter and Full Year 2019 Results

Revenues in 2019 reach $44.3 million, up 58% year-over-year; strong continued
revenue growth expected in 2020 to over $65 million;

Netanya, Israel, March 10, 2020 – RADA Electronic Industries Ltd. (NASDAQ: RADA) announced today its financial results for the year and quarter, ended December 31, 2019.

Highlights of 2019

Record revenues of $44.3 million up 58% year-over-year;
Full year gross margin of 36%;
Net loss of $2.0 million and positive EBITDA of $0.4 million;
Year-end net cash position of $13.8 million; secondary offering in January 2020 adds an additional $23.5 million to the cash position.

Management Comment
 
Dov Sella, RADA's Chief Executive Officer commented, “We are exceptionally pleased with our performance in 2019, growing our top line by 58% to an all-time record of $44.3 million. Furthermore, even while making the significant investments in our infrastructure and in establishing a new production line and a presence in the United States, our EBITDA was positive in the second half of the year.”
 
Continued Mr. Sella, “Our strong order momentum since mid-2019, which continued into this year, has increased our confidence that we will exceed revenues of $65 million in 2020. We expect that throughout 2020, we will grow our top line sequentially each quarter and reach profitability during the year. Our growth will be driven primarily by the growth in sales of tactical radars, with strong contribution from both the US and global markets. Furthermore, as the current programs to which we are supplying our radars mature, we expect the growth trend of our revenues to continue into 2021.”
 

 
2019 Fourth Quarter Summary

Revenues totaled $14.4 million in the fourth quarter of 2019, an increase of 71% compared with revenues of $8.4 million in the fourth quarter of 2018.

Gross profit totaled $5.1 million in the fourth quarter of 2019 (or 36% of revenues) compared to gross profit of $3.0 million in the fourth quarter of 2018 (or 36% of revenues).

Operating Loss was $209,000 in the fourth quarter of 2019 compared to an operating loss of $102,000 in the fourth quarter of 2018.

Net loss attributable to RADA’s shareholders in the fourth quarter of 2019, was $295,000, or $0.01 per share, compared to a net loss of $86,000, or $0.00 per share, in the fourth quarter of 2018.

The loss in the fourth quarter was impacted in part by loss of $115,000 recorded in 2019 with respect to the sale of the Company’s Chinese subsidiary (a discontinued operation) in December 2018.

The Company’s EBITDA was $587,000 in the fourth quarter of 2019, compared to EBITDA of $401,000 in the fourth quarter of 2018. 

Full Year 2019 Results Summary
 
Revenues totaled $44.3 million, an increase of 58% compared to revenues of $28.0 million in 2018.  
 
Gross profit totaled $15.9 million (or 36% of revenues) compared to gross profit of $10.2 million (or 36% of revenues) in 2018.
 
Operating loss totaled $2.1 million compared to operating income of $0.1 million in 2018.  
 
Net loss attributable to RADA’s shareholders was $2.0 million, or $0.05 per share for the year ended December 31, 2019, compared to net income of $163,000, or $0.00 per share, for the year ended December 31, 2018.
 
The Company’s EBITDA was $407,000 in 2019 compared to EBITDA of $1.8 million in 2018.
 
As of December 31, 2019, RADA had net cash and cash equivalents of $13.8 million, compared to $20.8 million as of year-end 2018. Following the balance sheet date on January 10, 2020, the Company raised approximately $23.5 million from investors, after expenses, in a secondary offering in the United States.
 

Investor Conference Call
 
The Company will host a conference call later today, March 10, 2020, starting at 10:00 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:
1-888-668-9141
at 10:00 am Eastern Time
 
UK:
0-800-917-5108
at 2:00 pm UK Time
 
Israel:
03-918-0609
at 4:00 pm Israel Time
 
International:
+972-3-918-0609
   

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-drone applications.

Contact Information

Company Contact:

Avi Israel (CFO)
Tel: +972-9-892-1111
mrkt@rada.com
www.rada.com
Investor Relations Contact:
 
Ehud Helft/Gavriel Frohwein
GK Investor & Public Relations
Tel: +1 646 688 3559
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, 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. 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 EBITDA consists of net profit (loss) according to U.S. GAAP, excluding net financing expenses, taxes, depreciation and amortization and ESOP expenses. EBITDA should not be considered in isolation or as a substitute for net profit (loss) or other statement of operations data prepared in accordance with GAAP as a measure of profitability. 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
 
   
Year ended December 31,
   
Three months ended
December 31,
 
   
2019
   
2018
   
2019
   
2018
 
                         
Operating Income (loss)
 
$
(2,103
)
 
$
62
   
$
(209
)
 
$
(102
)
Depreciation
   
1,301
     
799
     
454
     
250
 
Employees Option Compensation
   
1,150
     
898
     
313
     
253
 
Other non-cash amortization
   
59
     
33
     
29
     
-
 
                                 
EBITDA
 
$
407
   
$
1,792
   
$
587
   
$
401
 



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

   
December 31,
 
   
2019
   
2018
 
             
ASSETS
           
             
CURRENT ASSETS:
           
Cash and cash equivalents
 
$
13,754
   
$
20,814
 
Restricted deposits
   
380
     
422
 
Trade receivables (net of allowance for doubtful accounts of 2 at December 31, 2019 2 at December 31, 2018)
   
13,765
     
13,382
 
Contract Asset
   
1,269
     
899
 
Other accounts receivable and prepaid expenses
   
1,673
     
506
 
Inventories, net
   
17,196
     
11,244
 
Current assets related to discontinued operations
   
-
     
1,524
 
                 
Total current assets
   
48,037
     
48,791
 
                 
LONG-TERM ASSETS:
               
                 
Long-term receivables and other deposits
   
97
     
79
 
Property, plant and equipment, net
   
9,127
     
4,632
 
Operating lease right-of-use asset
   
7,654
     
-
 
Total LONG-TERM ASSETS
   
16,878
      4,711  
     
     

 
Total assets
 
$
64,915
   
$
53,502
 


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


 
 
December 31,
 
   
2019
   
2018
 
LIABILITIES AND EQUITY
           
             
CURRENT LIABILITIES:
           
Trade payables
 
$
7,661
   
$
5,650
 
Other accounts payable and accrued expenses
   
5,572
     
3,842
 
Advances from customers
   
1,563
     
727
 
Contract Liabilities
   
196
     
366
 
Operating lease short term liabilities
   
1,240
         
Current liabilities related to discontinued operations
   
-
     
366
 
                 
Total current liabilities
   
16,232
     
10,951
 
                 
LONG-TERM LIABILITIES:
               
                 
Operating lease long term liabilities
   
6,499
     
-
 
Accrued severance pay and other long term liability
   
764
     
690
 
                 
Total long-term liabilities
   
7,263
     
690
 
                 
EQUITY:
               
Share capital -
               
Ordinary shares of NIS 0.03 par value - Authorized: 100,000,000 shares and 100,000,000 shares at December 31, 2019 and December 31, 2018 respectively; Issued and outstanding: 38,456,693 and 37,516,891 at December 31, 2019 and at December 31, 2018 respectively.
   
394
     
386
 
Additional paid-in capital
   
120,017
     
118,568
 
Accumulated other comprehensive income
   
-
     
220
 
Accumulated deficit
   
(78,991
)
   
(76,961
)
                 
Total RADA Electronic Industries shareholders' equity
   
41,420
     
42,213
 
Non-controlling interest
   
-
     
(352
)
                 
Total equity
   
41,420
     
41,861
 
                 
Total liabilities and equity
 
$
64,915
   
$
53,502
 



CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except per share data

   
Year ended December 31,
   
Three months ended
December 31,
 
   
2019
   
2018
   
2019
   
2018
 
Revenues:
                       
Products
 
$
43,597
   
$
26,909
   
$
14,230
   
$
8,141
 
Services
   
734
     
1,123
     
126
     
250
 
                                 
     
44,331
     
28,032
     
14,356
     
8,391
 
Cost of revenues:
                               
Products
   
28,272
     
17,674
     
9,244
     
5,297
 
Services
   
122
     
143
     
6
     
36
 
                                 
     
28,394
     
17,817
     
9,250
     
5,333
 
                                 
Gross profit
   
15,937
     
10,215
     
5,106
     
3,058
 
Operating expenses:
                               
Research and development, net
   
6,912
     
3,189
     
1,987
     
1,025
 
Marketing and selling
   
4,044
     
2,860
     
1,253
     
847
 
General and administrative
   
7,084
     
4,001
     
2,075
     
1,185
 
Net Loss from sale of fixed asset
   
-
     
103
     
-
     
103
 
Total operating expenses:
   
18,040
     
10,153
     
5,315
     
3,160
 
Operating Income (Loss)
   
(2,103
)
   
62
     
(209
)
   
(102
)
financial expenses (income), net
   
121
     
(119
)
   
(29
)
   
(72
)
                                 
Net income (loss) from continuing operations
   
(2,224
)
   
181
     
(180
)
   
(30
)
                                 
Net Income (loss) from discontinued operations
   
(115
)
   
(404
)
   
(115
)
   
(233
)
                                 
Net income (loss)
   
(2,339
)
   
(223
)
   
(295
)
   
(263
)
                                 
Net income (loss) attributable to non-controlling interest
   
(309
)
   
(386
)
   
-
     
(177
)
Net income (loss) attributable to RADA Electronic Industries' shareholders
 
$
(2,030
)
 
$
163
   
$
(295
)
 
$
(86
)
                                 
Basic net income (Loss) from continuing operations per Ordinary share
 
$
(0.05
)
 
$
0.02
   
$
( 0.01
)
 
$
( 0.00
)
Diluted net income (Loss) from continuing operations per Ordinary share
 
$
( 0.05
)
 
$
0.02
   
$
(0.01
)
 
$
(0.00
)
Basic and diluted net income (loss) from discontinued operations per Ordinary share
 
$
(0.00
)
 
$
(0.01
)
 
$
(0.00
)
 
$
(0.01
)
Basic net income (Loss) per Ordinary share
 
$
(0.05
)
 
$
0.00
   
$
(0.01
)
 
$
(0.00
)
Diluted net income (Loss) per Ordinary share
 
$
(0.05
)
 
$
0.00
   
$
(0.01
)
 
$
(0.00
)
                                 
Weighted average number of Ordinary shares used for computing basic net income (loss) per share
   
38,148,756
     
33,184,570
     
38,439,848
     
34,324,897
 

Weighted average number of Ordinary shares used for computing diluted net income (loss) per share
   
38,841,266
     
33,716,931
     
39,491,610
     
34,823,139