RADA Electronic Industries Ltd.

Ladies and gentlemen, thank you for standing by. Welcome to the Radha Electronics Industry's fourth quarter and full year 2020 result conference call. All participants are present in listen-only mode. Following management's formal presentation, instructions will be given for the question and answer session. As a reminder, this conference is being recorded. You should have all received by now the company's press release. If you have not received it, please contact RADA's Investor Relations Team at GK Investor and Public Relations at 1-646-688-3559 or view it in the news section of the company's website at www.rada.com. I would now like to hand over the call to Mr. Ehud Helft of GK Investor Relations. Mr. Helft, would you like to begin, please?

Thank you, Operator. I would like to welcome all of you to this conference call to discuss RADA's fourth quarter and full year 2020 results. I would like to thank RADA Management for hosting this call. With us on the call today are Mr. Dov Sela, Chief Executive Officer, and Mr. Avi Israel, Chief Financial Officer. Dov will summarize the key highlights of the quarter, followed by Avi, who will provide a summary of the financials. We will then open the call for the questions and answer session. Before we start, I'd like to point out that the safe harbor published in today's press release also pertains to the content of this conference call. And with that, I would now like to introduce Radha's CEO, Mr. Dorf Sellas. Dorf, go ahead, please.

Thanks, Eod, and welcome everybody to our full year and fourth quarter earning call. Let's start with the results summary. As you can imagine, we are very pleased with our record financial results, both in the quarter and for the full year. We are... happy with both the top line, the revenues, and the bottom line, the profitability. Our revenues grew 72% year over year for the full year of 2020 compared to 2019, and 62% quarterly when you compare it to the fourth quarter of 2019. Our gross margins in Q4 reached 39% after growing to 38% in Q3. from a very stable 36%, which sustained for about 10 consecutive quarters before that. Our US production is operating at high capacity now and better efficiency. And as we grow sales further, we expect to continue to improve our manufacturing efficiencies. Our operating expenses are stabilizing, taking into account the significant growth in the top line, The growth in the OPEX is at a much lower rate. And when looking through 2021, we expect OPEX to be stable. And it means that there is a strong operating leverage in our business. And going forward, we can bring much of the revenue growth down to the bottom line. Our EBITDA, of $3.9 million in this quarter, or 17% of our revenues, shows that we are enjoying the fruits of our investments. We expect profitability to further increase in the coming quarters. We gave revenue guidance of over $120 million for the year of 2021. Our guidance represents approximately 60% and more year-over-year growth compared to 2020. As our backlog grows and new orders come in at a faster rate than originally expected, our visibility is the best that we ever had been, and we are increasingly confident about this guidance. We have a strong balance sheet of over $36 million in net cash at the end of the quarter. The current cash level supports our current inventory plans and enables efficient manufacturing, especially under the COVID environment. It enables us to continue to invest in our growth. It allows us to focus on maintaining our R&D edge and to capitalize on some opportunities as we identify them. Let's talk about one of the opportunities that we have identified and actually implemented in the recent days. We are starting to inorganically broaden our business. One of such opportunities that we are taking advantage of is an investment in Rad-C Technologies Limited, an early stage Israeli startup company introducing a very interesting and relevant radar technology with whom we have signed an investment term sheet. Radzi makes radars for the automated driver assistance system or ADAS market. The solutions are relevant for both the future autonomous vehicles as well as the current non-autonomous vehicles. There are many technological similarities between the way Radzi works and the way we at Radda do. yet they focus on the commercial current and future mobility markets as opposed to us focusing on the defense. Hence, we see strong potential synergies down the road. We are currently investing $3 million and purchased 12% of their equity, while our investment carries an option to further increase our stake. For now, our involvement will be via board membership, We will remain focused on the execution of our current business under the significant growth opportunities we are experiencing. As may be known to all, Israel has a vibrant and innovative technology ecosystem, also nicknamed as the Startup Nation, with quite a few interesting and relevant radar technologies companies addressing attractive and growing markets. Our vision around that is to create a synergetic radar technology hub broadening to commercial and lucrative markets, and later widen it to other geographies where we have advantage at. RADC is the first step towards this goal. Again, our business focus right now is to cater for our massively emerging defense and markets. We made only an initial investment to have access to RADC's technologies, But importantly, we do not want to take our eyes off the ball and we continue to work towards our current goals. Let's summarize. We are outperforming our already high expectations. 2020 revenues grew 70% year over year to a record of over 76 million in revenues in a year which the business environment was a bit difficult for everybody. Our gross margins are increasing. Our OPEX is stabilizing, and we are increasingly benefiting from the leverage in the business. We have become solidly profitable with EBITDA of 17% in the last quarter and potential to improve this even further. Based on our visibility for 2021, we reiterate and are optimistic about our revenue guidance of over $120 million this year. And our current leading and mature radar technology addresses the demanding needs of our growing markets for the near term, and we expect our growth to continue for the foreseeable future. We have taken the first step in broadening our vision to become leaders in the wider radar arena with our initial investment in RADC, a very promising early stage radar technology company. And finally, While reporting our best-ever quarterly results, we believe that our upcoming quarters will be even better. At this point, I'd like to hand over the discussion to our CFO, Avi Israel. Avi, please go ahead.