The Tactical Radar Systems Rescued RADA
24 May, 2017
Dov Sella, RADA's CEO: "We are increasing our full year revenue guidance towards $20 million for 2017, representing a year over year growth of over 50%". NASDAQ shares jumped 14.6%
RADA Electronic Industries (NASDAQ:RADA) from Netanya, Israel begins to fulfill its promises: Two months ago it published gloomy annual 2016 report with of total revenues of $12.8 million compared with revenues of $14.0 million in 2015. Gross profit totaled $1.4 million compared with gross profit of $2.4 million in 2015, and the company’s Operating loss reached $3.4 million in 2016, compared with operating loss of $2.7 million in 2015.
But those numbers didn’t prevent the company to send a positive message to its investors and clients. “Given its current backlog of orders in hand, for tactical radars and avionics, it expects significant revenue growth in 2017.” Now the message is backed by numbers: Revenues totaled $4.7 million in the first quarter of 2017, up 91% compared to $2.5 million in the first quarter of 2016. Gross Profit totaled $1.7 million in the quarter (gross margin of 35.7%), compared $6,000 (gross margin of 0.2%) in the first quarter of 2016.
Annual Growth of 50%
Dov Sella, RADA’s Chief Executive Officer said the results reflects the success of the turnaround of the company, “focused towards sales of our radar technology. Looking ahead and given the timing of certain orders, we expect the second quarter to be strong. On the back of our expectations of a particularly strong first half of 2017, we are increasing our full year revenue guidance towards $20 million for 2017, representing a year over year growth of over 50%. Furthermore, we expect to return to profitability in 2017 on a full-year basis.”
The investors were fully convinced: following the report, RADA’s share price in NASDAQ jumped more than 14.5%, from $1.24 to $1.41, and gave the company a market value of approximately $33 million. If Dov Sella predictions are valid – it seems only the beginning – from the market point of view.
Tactical Radar is an Engine of Growth
“Strategically, we have also made significant progress with our growth engine, the Software Defined Tactical Radars. At the end of the quarter, we signed a strategic distribution agreement with a leading Western-European defense systems provider, to integrate our radars into their Very Short Range Air Defense (VSHORAD) systems. Furthermore, our cooperation with DRS Technologies continues. We see opportunities with great potential for our technology, especially in the U.S. market.”
Detecting Drones and RPG’s
RADA Electronic Industries Ltd. is an Israel-based defense electronics company. The Company specializes in the development, production, and sales of tactical land radar for force and border protection, and avionics systems (including inertial navigation systems) for fighters and UAVs. The company believes that its future will be determined by its tactical radar technology: Multi-Mission Hemispheric Radar (MHR) and the Compact Hemispheric Radar (CHR) perfectly adapted to the growing market of Active Protection Systems (APS) on armored vehicles. The APS provides armored vehicles the needed protection against rocket-propelled grenades (RPG), anti-tank guided missiles (ATGM) and tank shells.
RADA’s MHR and CHR radars are S-band, software-defined, pulse-Doppler, active electronically scanned array radars. They introduce beam forming capabilities and advanced signal processing, which can provide various missions on each radar platform. The radars are compact and mobile, enabling multi-missions on each radar. So far, RADA has sold over 150 radar systems to various global customers.