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
August 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. 333-216973, 333-220304, 333-226387 and 333-226845) and Form S-8 (File No. 333-213284 and 333-238502). 

RADA ELECTRONIC INDUSTRIES LTD.
 
The following exhibit is attached:
 
99.1
Press release: RADA Electronic Industries Announces Q2 2020 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: August 11, 2020
 
EXHIBIT INDEX
 
EXHIBIT NO.
 
DESCRIPTION
 
 
 

 
 


EXHIBIT 99.1


FOR IMMEDIATE RELEASE

RADA Reports Record Q2/2020 Results and
Increases 2020 Revenue Guidance to $70 Million


 •
Record Q2 revenues of $17.5 million, up 75% year-over-year

•
Increased full year revenue guidance from over $65 million to over $70 million

Netanya, Israel, August 11, 2020 – RADA Electronic Industries Ltd. (NASDAQ: RADA) announced today its financial results for the three and six months periods ended June 30, 2020.

Highlights of the second quarter of 2020

 •
Quarterly revenues up 75% year-over-year to a record $17.5 million

•
Net income of $0.7 million and Adjusted EBITDA of $1.75 million – 10% of revenue

•
2020 revenue guidance increased to over $70 million, implying over 58% growth year-over-year, with continued sequential revenue growth throughout the remainder of the year

•
US manufacturing facility at full operation to supply US market demand.

Management Comments
 
Dov Sella, RADA's Chief Executive Officer 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.”
 
Continued Mr. Sella, “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.”
 

2020 Second Quarter Summary

Revenues 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.

2020 First Half Summary

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.
 

Investor Conference Call

The Company will host a conference call later today, starting at 9:00 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 1-888-281-1167; Israel 03-918-0644 and International +972-3-918-0644.
 
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/corp/corporate-ir.html  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: +972-9-892-1111
mrkt@rada.com
www.rada.com
Investor Relations Contact:
 
Ehud Helft
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, 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. 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 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
 
   
Six months ended
June 30,
    
Three months ended
June 30,
    
Year ended
December 31,
  
   
2020
    
2019
    
2020
    
2019
    
2019
  
   
(Unaudited)
    
Audited
  
                               
Operating Income (loss)
  
$
680
    
$
(1,401
)
  
$
634
    
$
(843
)
  
$
(2,103
)
Depreciation
    
1,014
      
540
      
541
      
281
      
1,301
  
Non-cash stock-based compensation expense
    
682
      
560
      
401
      
288
      
1,150
  
Other non-cash amortization
    
232
      
6
      
169
      
6
      
59
  
                                         
Adjusted EBITDA
  
$
2,608
    
$
(295
)
  
$
1,745
    
$
(268
)
  
$
407
  


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


  
June 30,
2020
    
December 31,
2019
  
   
Unaudited
    
Audited
  
ASSETS
            
             
CURRENT ASSETS:
            
Cash and cash equivalents
  
$
29,908
    
$
13,754
  
Restricted cash
    
495
      
380
  
   Trade receivables
    
18,933
      
13,765
  
Contract assets
    
1,045
      
1,269
  
Other receivables and prepaid expenses
    
2,412
      
1,673
  
Inventories
    
26,474
      
17,196
  
                 
Total current assets
    
79,267
      
48,037
  
                 
LONG-TERM ASSETS:
                
  Long-term receivables and other deposits
    
63
      
97
  
  Property, plant and equipment, net
    
11,282
      
9,127
  
  Operating lease right-of-use asset
    
7,585
      
7,654
  
Total long-term assets
    
18,930
      
16,878
  
                 
Total assets
  
$
98,197
    
$
64,915
  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
                
CURRENT LIABILITIES:
                
Short term loan
  
$
455
    
$
-
  
Trade payables
    
15,756
      
7,661
  
Other accounts payable and accrued expenses
    
6,378
      
5,572
  
Advances from customers, net
    
751
      
1,563
  
Contract liabilities
    
6
      
196
  
Operating lease short-term liabilities
    
1,594
      
1,240
  
                 
Total current liabilities
    
24,940
      
16,232
  
                 
LONG-TERM LIABILITIES:
                
Accrued severance pay and other long-term liabilities
    
668
      
764
  
Operating lease long-term liabilities
    
6,073
      
6,499
  
 Total long-term liabilities
    
6,741
      
7,263
  
                 
RADA SHAREHOLDERS' EQUITY
                
Share capital -
                
Ordinary shares of NIS 0.03 par value - Authorized: 100,000,000 shares at June 30, 2020 and December 31, 2019; Issued and outstanding:
              43,485,065 at June 30, 2020 and 38,456,693 at December 31, 2019.
    
437
      
394
  
Additional paid-in capital
    
145,388
      
121,212
  
Accumulated other comprehensive income
    
(1,195
)
    
(1,195
)
Accumulated deficit
    
(78,114
)
    
(78,991
)
                 
Total RADA shareholders’ equity
    
66,516
      
41,420
  
                 
Total liabilities and equity
  
$
98,197
    
$
64,915
  


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

   
Six months ended
June 30,
    
Three months ended
June 30,
    
Year ended
December 31,
  
   
2020
    
2019
    
2020
    
2019
    
2019
  
   
(Unaudited)
    
Audited
  
                               
Revenues
  
$
32,577
    
$
18,714
    
$
17,506
    
$
10,027
    
$
44,331
  
                                         
Cost of revenues
    
20,980
      
11,975
      
11,288
      
6,441
      
28,394
  
                                         
Gross profit
    
11,597
      
6,739
      
6,218
      
3,586
      
15,937
  
                                         
Operating expenses:
                                        
Research and development
    
4,239
      
3,040
      
2,186
      
1,674
      
6,912
  
Marketing and selling
    
2,385
      
1,870
      
1,225
      
988
      
4,044
  
General and administrative
    
4,293
      
3,230
      
2,173
      
1,767
      
7,084
  
Total operating expenses:
    
10,917
      
8,140
      
5,584
      
4,429
      
18,040
  
Operating income (loss)
    
680
      
(1,401
)
    
634
      
(843
)
    
(2,103
)
                                         
Other financial (expenses) income, net
    
197
      
43
      
73
      
1
      
(121
)
Net income (loss) from continuing operations
    
877
      
(1,358
)
    
707
      
(842
)
    
(2,224
)
                                         
Net loss from discontinued operations
    
-
      
-
      
-
      
-
      
(115
)
                                         
Net income (loss)
    
877
      
(1,358
)
    
707
      
(842
)
    
(2,339
)
                                         
Net loss attributable to non-controlling interest
    
-
      
309
      
-
      
278
      
309
  
                                         
Net income (loss) attributable to RADA Electronic Industries' shareholders
  
$
877
    
$
(1,049
)
  
$
707
    
$
(564
)
  
$
(2,030
)
                                         
Basic and diluted net income (loss) from continuing operations per ordinary share
  
$
0.02
    
$
(0.03
)
  
$
0.02
    
$
(0.01
)
  
$
(0.05
)
Basic and diluted net loss from discontinued operations per ordinary share
  
$
0.00
    
$
0.00
    
$
0.00
    
$
0.00
    
$
(0.05
)
Basic net income (loss) per ordinary share
  
$
0.02
    
$
(0.03
)
  
$
0.02
    
$
(0.01
)
  
$
(0.05
)
Diluted net income (loss) per ordinary share
  
$
0.02
    
$
(0.03
)
  
$
0.02
    
$
(0.01
)
  
$
(0.05
)
Weighted average number of ordinary shares used for computing basic net income per share
    
43,041,405
      
38,017,281
      
43,403,276
      
38,067,024
      
38,148,756
  
Weighted average number of ordinary shares used for computing diluted net income per share
    
44,002,634
      
38,570,290
      
44,302,325
      
38,680,072
      
38,841,866