RADA Electronic Industries Ltd.

Ladies and gentlemen, thank you for standing by. Welcome to the RADA Electronic Industries first quarter 2021 results conference call. All participants are at 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 gkinvestorandpublicrelations at 1- Call 646-688-3559 or view it in the news section of the company's website, www.rada.com. I would now like to hand over the call to Mr. Ehud Helf of GK Investor Relations. Mr. Helf, would you like to begin, please?

Yeah, thank you, operator. I would like to welcome all of you to this conference call to discuss RADA's first quarter 2021 results. I would like to thank RADA management for hosting this call. With us today on the call 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 question 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 Rada's CEO, Mr. Dov Sela.

Good day to all our call participants. We believe that our financial results speak for themselves, and Avi will detail them later in his part. The highlights are the following. Our revenues were over $25 million. It's a growth of 67% year over year and up 8%. compared to last quarter, and we expect our sequential quarterly revenues to grow along the year. Gross margins improved to 40%, which is in line with our target model. Our adjusted EBITDA in this quarter is 4.8 million, or 19% of our revenues, and we feel comfortable with the current level of gross and operating margins and believe there is some room for improvement in the next quarters. We gave revenue guidance of over $120 million for the full year of 2021, which is more than 60% compared to last year, and we believe that this guidance is valid and we continue to stand by this guidance. We have a strong balance sheet with $96 million in net cash at the end of the quarter. This follows a very successful capital raise of $56 million which we did in March, which also added a group of long-term focused and leading institutional investors from the U.S. and Israel to our shareholders' portfolio. It also tightened the connection between RADA and some of the Wall Street leading investment banks, which are focused on technology and defense companies. And we are now covered by four or five analysts. Our current cash levels support our current inventory plans and our needs to secure the supply chain. It enables us efficient manufacturing and enables us to continue to invest in our growth. While our U.S. production is operating with good efficiencies and satisfying our U.S. market needs, we are doubling our manufacturing capacity both in Israel and the U.S., and increasing our inventories to accommodate the semiconductor global crisis, which we all hear about. This cash level of ours also allows us to focus on maintaining our R&D edge, as I will describe a bit later, and to capitalize on some opportunities as we identify them. Let's discuss our markets. In general, the positive trends in our markets, mainly around Shorad, counter UAS and base defense continue to develop both in the US and more recently on global basis. We recently see a growing attraction from European and Middle Eastern markets, which are now emerging for us, and our pipeline continues to broaden. Beyond what we have already delivered to customers, we anticipate significant upside from follow-on orders to the initial orders we have satisfied so far and are in production. Specifically to U.S. and other programs, the USMC GBAT program is a program of record with steady annual deliveries of dozens of radars. The U.S. Army M-SHORAD program is a funded OTA The U.S. Army awarded General Dynamics the expected framework of $1.2 billion of contract, covering four brigades and 144 systems by mid-2023. The initial production portion is 28 Stryker vehicles, each of which integrates four radars of ours. This portion will be delivered by mid-year. And we expect additional production order for 59 vehicles, to be received this spring and delivered this year. Additional base defense and counter UAS potential programs in the USA are incubating into OTAs or programs of record after satisfying significant urgent needs to the US Air Force and SOCOM through various integrators along 2020 and undergoing continuous testing It should support our growth in 2022 and onwards. In terms of APS programs for fighting vehicles, active protection systems for fighting vehicles, as you probably may know, we are part of the Elbitz Iron Fist solution currently. And the Israeli ATAN AFV development is ongoing. Serial production will commence in 2022. And the scope of this program is over 2,000 radars over a few years. The U.S. Army's Bradley IFV testing will spread over 2021 and 2022. And serial production expected to commence in 2023. The scope of the 1st Brigade is over 600 radars. while we believe that the potential is higher than one brigade. There are several additional APS programs in our pipeline requiring potentially thousands of radars with deliveries to start in 2023 and onwards. We are on the verge of launching a few new products this year. In addition to the ICHR for the Eitan AFV, we shall start field testing two new radars towards the end of this year. The first is the NMHR, the next MHR. It's an evolution of the MHR family. Advanced tactical radar with high accuracy, wide frequency band, advanced digital processing, multi-emission capabilities, and all the goodies that make our radar and the year furthermore uniquely adapted and adequate to the tactical radar for the maneuver force, all these unique features that make it an ideal component for near-term protection solutions such as direct energy weapon systems and others. The other radar is the extended MHR or XMHR, which enhances the ranges of our MHR family of radars to better address new threats such as cruise missiles detection and fire control and capabilities such as point defense and gap filling. All these radars should maintain our global leadership in the market of tactical radars for the maneuver force and increasing our total addressable market and ensuring growth in the coming years. In summary, We are performing according to our plans and expectations and experience significant and sustainable growth. Based on our visibility of 2021, we reiterate our revenue guidance at over $120 million for this year with continued sequential quarterly growth. And our profit margins are now at the level we aimed at and feel comfortable about. We expect our growth to continue for the foreseeable future. And finally, while reporting our best-ever quarterly results, it is clear that our upcoming quarters will continue to be better. I'd like at this point to hand the discussion over to Avi Israel, our CFO. Avi, please.