RADA Electronic Industries Ltd. (Nasdaq: RADA) March 2018

Transcription

1 RADA Electronic Industries Ltd. (Nasdaq: RADA) March 2018

2 DISCLAIMER This presentation is confidential and is being given solely for your information. No part of this presentation or the information contained herein may be reproduced, photocopied, redistributed or passed on, directly or indirectly, to any other person (whether within or outside your organization/firm) orpublished, inwholeorinpart,foranypurpose. 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. This presentation shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities of the Company nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. 2

3 COMPANY OVERVIEW RADA MARKET CAP $75m as of March 7, EMPLOYEES SHAREHOLDERS Defense Electronics company headquartered in Israel DBSI 26% Design, sell & manufacture: Ground-based tactical radars Avionics & Inertial Navigation Systems (INS) Free Float 74% Turnaroundin the business as focus moves from legacy Avionics & INS to GEOGRAPHIC SALES BREAKDOWN (2017) Asia Israel Growth Engine of Tactical Radars for the Maneuver Force: TAM of $5bn Other USA 3

4 PRODUCTS & TECHNOLOGIES Growth Engine 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 COUNTER-DRONE SYSTEM-OF-SYSTEMS Segment expected to proliferate Conducted numerous successful demonstrations in last 2 years Part of the RAFAEL Drone-Dome solution 6

7 COMPETITIVE POSITIONING RADA Positioning for Growth: Exceptional tactical-grade capabilities at significantly lower prices in Radar markets 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 Compact technology, providing high performance and adaptable to multiple applications 7

8 US DEFENCE PRIORITIES At this year s Association of the US Army (AUSA) annual conference, US Army chief of staff, Gen Mark Milley, outlined a list of defense modernization priorities Outlined six key areas for modernization focus: long-range fires, mobility, networking, protection, sustainment and soldier lethality Short-range air defense (SHORAD), lower-tier air defenses, and active protection systems (APS) were seen as protection priorities against threats from newgeneration anti-tank munitions and drones 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 20 On-the-Move C-UAS systems to USMC over 100 radars, towards fielding Active Protection (APS) market is emerging est. at over 15,000 combat vehicles Potential market size for mini tactical radars estimated at ~$3B over next 10 years RADA Technologies LLC US Subsidiary JV with SAZE, will achieve SSA, Americanization Cooperation agreement with DRS Technologies focused on C-UAS and M-VSHORAD markets Performed numerous demonstrations & tests orders received have very significant potential 9

10 SELECTED CUSTOMERS & PARTNERS IDF FACH US NAVY FAP IAF Indian Security Forces 10

11 TURNAROUND AND STRONG REVENUE GROWTH 30 $26.2m revenue achieved in 2017 Driven by significant growth in the radar business % Radars Revenue in US$ millions Avionics Revenue in US millions Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417

12 FINANCIAL STATEMENT SUMMARY US$ thousands Q116 Q216 Q316 Q416 FY 2016 Q117 Q217 Q317 Q417 FY 2017 Total Revenue 2,454 2,734 3,330 4,303 12,821 4,675 5,317 7,071 9,119 26,182 Gross Profit ,442 1,669 1,664 2,755 2,175 8,263 R&D expenses, net ,575 S&M , ,137 G&A , ,568 Operating Income (1,033) (969) (856) (541) (3,399) , ,983 Financial Expenses , (41) 156 Net Income ($1,848) ($1,577) ($996) ($486) ($4,907) $ ,342 EPS ($0.23) ($0.13) ($0.12) ($0.03) ($0.35) $0.02 $0.02 $0.05 $0.02 $0.09 EBITDA (non-gaap) (897) (829) (663) (171) (2,560) ,504 12

13 KEY INVESTMENT HIGHLIGHTS Turnaround Towards Growth Growth Engine Radar Stable Legacy Avionics 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 will bring 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 Profitable avionics product line Discontinuing less profitable products Provides ongoing stable, cash-generating business 13

14 Thank You 14