RADA Electronic Industries Ltd. (Nasdaq: RADA) March 2019

Transcription

1 RADA Electronic Industries Ltd. (Nasdaq: RADA) March 2019

2 DISCLAIMER This presentation contains certain statements that may be deemed to be forward looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. Reference is made in particular to the descriptions of our plans and objectives for future operations, assumptions underlying such plans and objectives and other forward looking terminology such as will, would, may, should, estimates, expects, believes, anticipates, intends, projects, predicts, targets, or similar terms, variations of such terms or the negatives of such terms. Forward looking statements are based on management s current expectations. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors including but not limited to those risks and uncertainties relating to difficulties or delays in development, testing, regulatory approval, production and marketing of the Company s product candidate and those risks and uncertainties associated with the protection of the Company s intellectual property rights. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements. 2

3 COMPANY OVERVIEW RADA MARKET CAP $107m as of Mar 21, EMPLOYEES SHAREHOLDERS Defense Electronics company headquartered in Israel DBSI 25% Design, sell & manufacture: Ground-based tactical radars Avionics & Inertial Navigation Systems (INS) Free Float 75% Turnaround in the business as focus moves from legacy Avionics & INS to Growth Engine of Tactical Radars for the Maneuver Force: TAM of $5bn GEOGRAPHIC SALES BREAKDOWN Europe Asia Israel 3 USA Other

4 Growth Engine PRODUCTS & TECHNOLOGIES TACTICAL RADARS % 60% Mini-Tactical Multi-Mission AESA Radars for the Maneuver Force Applications Counter-drone system of systems; Active protection of combat vehicles; Short-Range hostile fire locators; All-threat air surveillance; 3-D Border surveillance; SALES IN 2017 ($M) Digital recorders, Avionics Systems and Inertial Navigation Systems for Aircraft Applications Mission video & data recordings; Weapon management systems; Avionics for manned platforms & UAVs; AVIONICS % 40% Legacy Leadership 4

5 RADARS: OPERATIONAL MISSIONS 5

6 IN THE HEART OF COUNTER-DRONE SOLUTIONS Conducted numerous successful demonstrations in last 3 years Segment starts to proliferate Part of the RAFAEL Drone-Dome, Elbit ReDrone, AVT/SNC XMADIS, and others 6

7 COMPETITIVE POSITIONING RADA Positioning for Growth: Exceptional tactical-grade capabilities at significantly lower prices in Radar markets Top-notch technology, providing high performance and adaptable to multiple applications Strong partnerships and customer relationships: tailor products to customer requirements Customers procure equivalent-capability systems from RADA versus competitors at dramatically lower prices Technology development targeting a higher price/performance class 7

8 US ARMY MODERNIZATION PRIORITIES 8

9 FOCUS ON THE US MARKET First radar sales were made to US customers as part of HEL R&D programs: US NAVY MARINE CORPS HEL-MD, Silent Strike ADAM, Athena, LLD GBAD DE OTM, MCWL Laser Systems 20 On-the-Move C-UAS systems to USMC over 100 radars, tested & fielded Active Protection (APS) market is emerging est. at over 15,000 combat vehicles Potential market size for mini tactical radars estimated at ~$2.5B over next 10 years RADA Technologies LLC US Subsidiary SSA, Americanization, production Cooperation agreement with Leonardo DRS on C-UAS, M-VSHORAD markets Selected for the US Army IM-SHORAD potential of close to 600 MHR radars 9

10 CHR & MHR ONBOARD US TACTICAL VEHICLES 10

11 SELECTED CUSTOMERS & PARTNERS IDF FACH US NAVY FAP IAF Indian Security Forces 11

12 TURNAROUND AND STRONG REVENUE GROWTH $26.2m revenue in 2017 $28.0m revenue in 2018 Potential growth in the radar business , % Radars 8,000 6,000 4, , Revenue in US$ millions Avionics , Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Total Revenue Operating Income In 000 USD

13 FINANCIAL STATEMENT SUMMARY in 000 USD US$ thousands Q117 Q217 Q317 Q417 FY 2017 Q118 Q218 Q318 Q418 FY 2018 Total Revenue $4,675 $5,317 $7,071 $9,119 $26,182 $6,020 $6,576 $7,045 $8,391 $28,032 Gross Profit 1,669 1,664 2,755 2,175 8,263 2,179 2,380 2,510 3,049 10,118 R&D , ,016 3,092 S&M , ,860 G&A , ,134 1,185 4,001 Operating Income (Loss) Financial Expenses, net Net Income (Loss) , , (145) (29) (41) 156 (8) 4 (43) (72) (119) $390 $501 $794 $657 $2,342 $204 $12 ($176) ($263) ($223) EPS $0.02 $0.02 $0.03 $0.02 $0.09 $0.01 $0.00 $0.00 $0.00 ($0.00) EBITDA (non-gaap) , $3, ($1,895) 13

14 KEY INVESTMENT HIGHLIGHTS Stable Legacy Avionics Business Turnaround Towards Growth Growth Engine Radar Profitable avionics product line Discontinuing less profitable products Provides ongoing stable, cash-generating business Driven by a stable legacy Avionics business combined with Radar growth engine Reached profitability and $26.2m revenue in 2017 from $12.8m in 2016 Strong growth combined with improved margins brings business back to profitability Competitive pricing points underpinned by superior technology, addressing huge markets Radar is emerging with TAM of $5bn+ Initial orders already delivered to key customers which are expected to expand strongly 14

15 Thank You 15