OREANDA-NEWS. RADA Electronic Industries Ltd. (NASDAQ:RADA) announced today its financial results for the quarter ended September 30, 2016.

Management Comments

Dov Sella, RADA's Chief Executive Officer commented, "Reporting first time as RADA's CEO, I am happy to indicate that performance in the third quarter improved compared to the first half of 2016 as our backlog continued to grow, especially in our radar business. We anticipate that our operating results will continue to improve in the next quarter and throughout 2017. Our recent capital raise of $3 million from our controlling shareholder, DBSI, and the Phoenix Insurance Company Ltd., one of Israel’s largest insurance companies, significantly strengthened our balance sheet and will enables us to move full speed ahead in executing our growth strategy."

Added Yossi Ben Shalom, RADA’s chairman, "We are very happy to welcome Phoenix, a leading Israel-based and long-term focused institutional investor, as one of our major shareholders, joining DBSI. This represents a vote of confidence from an important player in the capital markets of our vision for the future and management’s potential to create significant shareholder value."

2016 Third Quarter Compared with Prior Quarter Summary

Net loss attributable to RADA’s shareholders in the third quarter of 2016 was $1.0 million, or $0.06 per share, an improvement representing a 41% reduction, when compared to a net loss of $1.7 million, or $0.14 per share, in the second quarter of 2016.

Revenues in the third quarter of 2016 totaled $3.5 million, a 20% increase when compared to revenues of $2.9 million in the second quarter of 2016.

Gross Profit was $0.4 million in the third quarter of 2016 and $0.3 million in the second quarter of 2016. Operating loss was $0.9 million in the third quarter of 2016 compared to an operating loss of $1.0 million in the second quarter of 2016.

2016 Third Quarter Results Summary

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

Gross Profit totaled $0.4 million in the third quarter of 2016 compared to gross profit of $0.6 million in the third quarter of 2015. Operating loss was $0.9 million in the third quarter of 2016 compared to an operating loss of $0.7 million in the third quarter of 2015.

Financial Expenses totaled $0.1 million in the third quarter of 2016 compared to financial expenses of $1.1 million in the third quarter of 2015. The financial expenses in the third quarter of 2015 included a non-cash amortization expense of approximately $0.9 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 until the repayment of the loan on June 16, 2016. On that date RADA obtained a $3.2 million loan from DBSI, which was used to repay the loan from the former principal shareholder. The loan from DBSI has a beneficial conversion feature that would result in a non-cash amortization expense throughout the term of the loan of approximately $0.1 million.

Net loss attributable to RADA’s shareholders in the third quarter of 2016, was $1.0 million or $0.06 per share, an improvement when compared with a net loss of $1.7 million or $0.25 per share in the third quarter of 2015.

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.