UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission File Number 333-253583 Leonardo DRS, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 13-2632319 (State or Othe ...

Rada Electronic Industries Ltd (RADA) Q1 2022 Earnings Conference Call May 10, 2022 9:00 AM ET Company Participants Ehud Helft - GK Investor Relations Dov Sella - Chief Executive Officer Avi Israel - Chief Financial Officer Conference Call Participants Peter Arment - Baird Scott Forbes - Jefferies Austin Moeller - Canaccord Brian Kinstlinger - Alliance Global Partners Arnold Ursaner - CJS Securities Operator Ladies and gentlemen, thank you for standing by. Welcome to the RADA Electronic Industries' First Qu ...

PART I [Business Overview](index=7&type=section&id=Item%201.%20Business) Leonardo DRS is a leading U.S. defense contractor operating in advanced sensing, computing, and mission systems, with 86% of 2021 revenue from the U.S. government and operations governed by a DoD proxy agreement - DRS is a leading provider of defense products and technologies, organized into **three operating segments: Advanced Sensor Technologies, Network Computing & Communications, and Integrated Mission Systems**[16](index=16&type=chunk)[22](index=22&type=chunk) Key Financial Growth (2017-2021) | Metric | CAGR (2017-2021) | | :--- | :--- | | Company Revenue | 10% | | DoD Budget | 3.8% | | Adjusted EBITDA | 14% | Revenue by Customer (FY 2021) | Customer | Percentage of Total Revenue | | :--- | :--- | | U.S. Government (Direct/Indirect) | 86% | | U.S. Department of Defense (DoD) | 86% | | U.S. Army | 38% | | U.S. Navy | 31% | Revenue by Contract Type (in millions) | Contract Type | 2021 (in millions) | 2020 (in millions) | 2019 (in millions) | | :--- | :--- | :--- | :--- | | Firm fixed price | $2,498 | $2,408 | $2,334 | | Flexibly priced | $381 | $370 | $381 | Backlog (in millions) | Backlog Type | Dec 31, 2021 (in millions) | Dec 31, 2020 (in millions) | Dec 31, 2019 (in millions) | | :--- | :--- | :--- | :--- | | Funded | $2,510 | $2,847 | $2,547 | | Unfunded | $351 | $444 | $297 | | **Total Backlog** | **$2,861** | **$3,291** | **$2,844** | - The company's workforce consists of approximately **6,575 people**, including **1,350 engineers**, with employees maintaining **over 2,000 security clearances** for classified programs[97](index=97&type=chunk)[98](index=98&type=chunk) [Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from its 86% dependence on U.S. defense spending, fixed-price contract cost overruns, FOCI compliance, cybersecurity threats, and supply chain disruptions - The vast majority of revenue depends on U.S. defense spending, with U.S. government contracts accounting for approximately **86%**, **84%**, and **89%** of total revenues in 2021, 2020, and 2019, respectively[113](index=113&type=chunk)[114](index=114&type=chunk) - The COVID-19 pandemic continues to pose risks, with **$6 million** and **$12 million** in safety expenditures incurred in 2021 and 2020, respectively, and potential impacts from federal vaccine mandates[121](index=121&type=chunk)[126](index=126&type=chunk) - A significant portion of revenue, **87%** in 2021, is derived from fixed-price contracts, exposing the company to financial loss from cost overruns or higher inflation[130](index=130&type=chunk)[132](index=132&type=chunk) - As a company under **Foreign Ownership, Control, or Influence (FOCI)**, DRS operates under a **proxy agreement** with the DoD, with non-compliance risking termination of classified U.S. government contracts[138](index=138&type=chunk)[139](index=139&type=chunk)[293](index=293&type=chunk) - The company is susceptible to cybersecurity breaches and must comply with evolving DoD requirements, including the **Cybersecurity Maturity Model Certification (CMMC)**, for future contract eligibility[205](index=205&type=chunk)[209](index=209&type=chunk) [Unresolved Staff Comments](index=55&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - No unresolved staff comments are reported[319](index=319&type=chunk) [Properties](index=56&type=section&id=Item%202.%20Properties) The company operates a mix of owned and leased properties across 17 U.S. states, D.C., and Canada, including its Arlington, Virginia headquarters, supporting its three segments Selected Significant Facilities | Location | Segment | Approx. Square Footage | Owned/Leased | | :--- | :--- | :--- | :--- | | Milwaukee, WI | Integrated Mission Systems | 610,800 | Leased | | West Plains, MO | Integrated Mission Systems | 447,067 | Owned | | Menomonee Falls, WI | Integrated Mission Systems | 372,856 | Leased | | Melbourne, FL | Network Computer & Communications | 311,287 | Leased | [Legal Proceedings](index=59&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in ordinary legal proceedings, including a notable CERCLA investigation by the NPS regarding a site operated by an alleged predecessor over 50 years ago - The company is a potentially responsible party in a **CERCLA investigation** by the **National Park Service (NPS)** for a site operated by an alleged predecessor over 50 years ago[329](index=329&type=chunk)[330](index=330&type=chunk) [Mine Safety Disclosures](index=59&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company - This item is not applicable[331](index=331&type=chunk) PART II [Market for the Company's Common Equity, Related Stockholder Matters](index=60&type=section&id=Item%205.%20Market%20for%20the%20Company%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters) There is no public trading market for the company's common stock, with 100% owned by Leonardo US Holding, Inc., and no anticipated near-term cash dividends - There is no established public trading market for the company's common stock, with US Holding owning **100%** of the outstanding shares[333](index=333&type=chunk) [Selected Historical Consolidated Financial Data](index=61&type=section&id=Item%206.%20Selected%20Historical%20Consolidated%20Financial%20Data) This item is reserved in the report - This item is marked as **'RESERVED'**[335](index=335&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=62&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2021, Leonardo DRS achieved revenue growth and significant increases in operating earnings and Adjusted EBITDA, driven by the Integrated Mission Systems segment, and announced the sale of its Global Enterprise Solutions business Consolidated Financial Performance (in millions, except percentages) | Metric | 2021 (in millions) | 2020 (in millions) | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $2,879 | $2,778 | 3.6% | | Gross Profit | $547 | $494 | 10.7% | | Operating Earnings | $236 | $181 | 30.4% | | Net Earnings | $154 | $85 | 81.2% | | Adjusted EBITDA | $310 | $268 | 15.7% | | Adjusted EBITDA Margin | 10.8% | 9.6% | +1.2% | Key Operating Metrics (in millions) | Metric | 2021 (in millions) | 2020 (in millions) | | :--- | :--- | :--- | | Bookings | $2,595 | $3,055 | | Backlog | $2,861 | $3,291 | | Free Cash Flow | $118 | $74 | Segment Revenue Performance (in millions) | Segment | 2021 Revenue (in millions) | 2020 Revenue (in millions) | % Change | | :--- | :--- | :--- | :--- | | Advanced Sensor Technologies (AST) | $970 | $940 | 3.2% | | Network Computing & Communications (NC&C) | $972 | $1,026 | (5.3)% | | Integrated Mission Systems (IMS) | $959 | $834 | 15.1% | Segment Adjusted EBITDA Performance (in millions) | Segment | 2021 Adj. EBITDA (in millions) | 2020 Adj. EBITDA (in millions) | % Change | | :--- | :--- | :--- | :--- | | Advanced Sensor Technologies (AST) | $125 | $123 | 1.7% | | Network Computing & Communications (NC&C) | $95 | $90 | 5.9% | | Integrated Mission Systems (IMS) | $90 | $55 | 62.7% | - The company agreed on March 21, 2022, to sell its **Global Enterprise Solutions (GES)** business to SES Government Solutions, Inc. for **$450 million** in cash[395](index=395&type=chunk) Consolidated Cash Flow Summary (in millions) | Cash Flow Activity | 2021 (in millions) | 2020 (in millions) | 2019 (in millions) | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $178 | $125 | $157 | | Net cash provided by (used in) investing activities | $39 | $(70) | $(151) | | Net cash used in financing activities | $(38) | $(80) | $(1) | [Quantitative and Qualitative Disclosure of Market Risks](index=95&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosure%20of%20Market%20Risks) The company's primary market risks include interest rate fluctuations, limited foreign currency exposure to the Canadian dollar, and inflation risk, particularly from supply chain cost pressures - The company is exposed to **interest rate risk** on **variable-rate borrowings** under its revolving credit facilities, with no outstanding amounts as of December 31, 2021[530](index=530&type=chunk) - Foreign currency risk is limited, primarily to the **Canadian dollar**, with **$54 million** in receivables as of December 31, 2021[531](index=531&type=chunk) - The company has experienced **inflationary pressures** on **supply chain costs** for micro-electronics and commodities, which could negatively affect future financial results if not mitigated[532](index=532&type=chunk) [Financial Statements and Supplementary Data](index=96&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2019-2021, with an unqualified opinion from KPMG LLP, highlighting long-term contract cost estimation as a critical audit matter - KPMG LLP issued an **unqualified opinion** on the consolidated financial statements, identifying the **estimation of costs to complete** certain long-term contracts as a **critical audit matter**[536](index=536&type=chunk)[539](index=539&type=chunk)[543](index=543&type=chunk) Consolidated Statement of Earnings (in millions) | Line Item | 2021 (in millions) | 2020 (in millions) | 2019 (in millions) | | :--- | :--- | :--- | :--- | | Total Revenues | $2,879 | $2,778 | $2,714 | | Gross Profit | $547 | $494 | $459 | | Operating Earnings | $236 | $181 | $163 | | Net Earnings | $154 | $85 | $75 | | Basic and Diluted EPS | $1.06 | $0.59 | $0.52 | Consolidated Balance Sheet Summary (in millions) | Line Item | Dec 31, 2021 (in millions) | Dec 31, 2020 (in millions) | | :--- | :--- | :--- | | **Assets** | | | | Total Current Assets | $1,389 | $1,263 | | Total Noncurrent Assets | $1,680 | $1,693 | | **Total Assets** | **$3,069** | **$2,956** | | **Liabilities & Equity** | | | | Total Current Liabilities | $989 | $975 | | Total Noncurrent Liabilities | $487 | $554 | | Total Shareholder's Equity | $1,593 | $1,427 | | **Total Liabilities & Equity** | **$3,069** | **$2,956** | - Company-funded R&D costs charged to cost of revenues totaled **$48 million**, **$41 million**, and **$31 million** in 2021, 2020, and 2019, respectively[581](index=581&type=chunk) - In March 2022, the company agreed to sell its **Global Enterprise Solutions (GES)** business for **$450 million** in cash[799](index=799&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=143&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - No changes in or disagreements with accountants are reported[801](index=801&type=chunk) [Controls and Procedures](index=143&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of December 31, 2021, with no material changes to internal control over financial reporting during Q4 2021 - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of the end of the reporting period[802](index=802&type=chunk) - The Annual Report omits a management report on internal control over financial reporting due to a **transition period** for **newly public companies** under SEC rules[806](index=806&type=chunk) [Other Information](index=144&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - No other information is reported for this item[807](index=807&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=145&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This section is not applicable to the company - This item is not applicable[809](index=809&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=145&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section outlines the company's nine-member board of directors and executive officers, whose structure and committee functions are influenced by a DoD proxy agreement requiring independent proxy holders Board of Directors and Executive Officers (as of Dec 31, 2021) | Name | Age | Title | | :--- | :--- | :--- | | William J. Lynn III | 68 | Chief Executive Officer and Chairman | | David W. Carey | 77 | Lead Independent Director | | John A. Baylouny | 60 | Executive Vice President, Chief Operating Officer | | Michael D. Dippold | 41 | Executive Vice President, Chief Financial Officer | - The board comprises **nine directors**, with its composition governed by a **proxy agreement** with the DoD requiring **five independent proxy holders** to mitigate **Foreign Ownership, Control, or Influence (FOCI)**[848](index=848&type=chunk)[849](index=849&type=chunk) - The board maintains **four committees: Audit, Compensation, Nominating and Corporate Governance, and a Government Security Committee**, with the latter required by the proxy agreement for classified information safeguarding[851](index=851&type=chunk)[859](index=859&type=chunk) [Executive Compensation](index=154&type=section&id=Item%2011.%20Executive%20Compensation) The company's executive compensation program is performance-based, with a significant portion 'at risk', comprising base salary, annual cash incentives (ICP), and a cash-based long-term incentive plan (LTIP) with performance and retention components - The executive compensation philosophy emphasizes **pay-for-performance**, with **81%** of CEO target compensation and **69%** for other NEOs being 'at risk'[869](index=869&type=chunk)[877](index=877&type=chunk) 2021 Summary Compensation Table (Select NEOs) | Name and Principal Position | Fiscal Year | Salary ($) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | :--- | | William Lynn, CEO | 2021 | 1,156,439 | 5,067,533 | 99,632 | 6,323,603 | | John Baylouny, COO | 2021 | 515,584 | 1,441,400 | 52,865 | 2,009,849 | | Michael Dippold, CFO | 2021 | 468,341 | 1,198,567 | 51,904 | 1,718,811 | - The 2021 Annual Incentive Compensation (ICP) was based **75%** on **financial metrics** and **25%** on **individual strategic, operational, and ESG goals**[902](index=902&type=chunk)[905](index=905&type=chunk) - The Long-Term Incentive Plan (LTIP) is a **cash-based plan**, with **50%** as a **performance component** over a three-year cycle and **50%** as a **time-based retention component** for 2021 and future awards[934](index=934&type=chunk)[936](index=936&type=chunk) - The company's **Executive Severance Plan** provides benefits for termination without cause, with change in control benefits requiring a **'double trigger'**[963](index=963&type=chunk)[965](index=965&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=184&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) As of March 28, 2022, **100%** of the company's common stock is owned by Leonardo US Holding, Inc., a subsidiary of Leonardo S.p.A., with no beneficial ownership by directors or executive officers Security Ownership | Name | Number of Shares Owned | Percent of Class (%) | | :--- | :--- | :--- | | Leonardo S.p.A. | 145,000,000 | 100.0 | | All directors and executive officers as a group (13 persons) | — | — | [Certain Relationships and Related Party Transactions, and Director Independence](index=186&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Party%20Transactions%2C%20and%20Director%20Independence) The company's relationship with its parent, Leonardo S.p.A., is governed by a DoD Proxy Agreement to mitigate FOCI, alongside other agreements like a Tax Allocation Agreement and financing arrangements with US Holding - The company operates under a **Proxy Agreement** with the DoD to mitigate **FOCI**, granting **five independent, security-cleared proxy holders** voting rights over shares owned by its parent, US Holding[1031](index=1031&type=chunk)[1032](index=1032&type=chunk)[1036](index=1036&type=chunk) - The Proxy Agreement **restricts the ability** of Leonardo S.p.A. and US Holding to **control operations**, **share facilities and personnel**, and **regulates communications** between the entities[1034](index=1034&type=chunk)[1035](index=1035&type=chunk) - The company has a **Tax Allocation Agreement** with US Holding and affiliates to allocate consolidated U.S. federal and state tax liabilities[1059](index=1059&type=chunk) - Financing from US Holding includes a **7.5% Term Loan ($139M outstanding)** and a **5.0% Daylight Term Loan ($78M outstanding)** as of year-end 2021, following **$300 million** of debt forgiveness in 2020[1074](index=1074&type=chunk)[1075](index=1075&type=chunk) [Principal Accountant Fees and Services](index=195&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) KPMG LLP serves as the company's independent auditor, with total fees of approximately **$4.7 million** in 2021, a decrease from **$7.9 million** in 2020 due to lower audit-related fees Fees Paid to KPMG LLP (in thousands) | Fee Category | 2021 (in thousands) | 2020 (in thousands) | | :--- | :--- | :--- | | Audit Fees | $3,870,549 | $5,554,293 | | Audit-related services | $65,000 | $2,351,440 | | Tax Services | $— | $— | | All Other Services | $811,097 | $— | | **Total Fees** | **$4,746,646** | **$7,905,733** | [Exhibits and Financial Statement Schedules](index=196&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements and exhibits filed with the Form 10-K, including key documents like the Amended and Restated Proxy Agreement and the Tax Allocation Agreement

Rada Electronic Industries Ltd (RADA) Q4 2021 Earnings Conference Call February 9, 2022 9:00 AM ET Company Participants Ehud Helft - GK Investor Relations Dov Sella - CEO Avi Israel - CFO Conference Call Participants Gregory Konrad - Jefferies Peter Arment - Robert W. Baird & Co. Brian Kinstlinger - Alliance Global Partners Austin Moeller - Canaccord Genuity Operator Ladies and gentlemen, thank you for standing by. Welcome to the RADA Electronic Industries Fourth Quarter 2021 Results Conference Call. [Opera ...

PART I. [Financial Information](index=5&type=section&id=PART%20I.%20Financial%20Information) This section provides the company's unaudited financial statements and management's discussion and analysis [Financial Statements (Unaudited)](index=5&type=section&id=ITEM%201.%20Financial%20Statements%20%28Unaudited%29) Unaudited financial statements for September 30, 2021, reveal significant net earnings growth and improved operating cash flow [Consolidated Statements of Earnings](index=5&type=section&id=Consolidated%20Statements%20of%20Earnings) Presents consolidated earnings for the three and nine months ended September 30, detailing revenues, gross profit, and net earnings Consolidated Statements of Earnings (Three Months Ended Sep 30) | Indicator (in millions) | 2021 | 2020 | | :--- | :--- | :--- | | Total revenues | $720 | $719 | | Gross profit | $131 | $122 | | Operating earnings | $53 | $37 | | Net earnings | $35 | $15 | | Basic and diluted EPS | $0.24 | $0.10 | Consolidated Statements of Earnings (Nine Months Ended Sep 30) | Indicator (in millions) | 2021 | 2020 | | :--- | :--- | :--- | | Total revenues | $2,059 | $1,952 | | Gross profit | $394 | $337 | | Operating earnings | $155 | $102 | | Net earnings | $96 | $38 | | Basic and diluted EPS | $0.66 | $0.26 | - For the nine months ended September 30, 2021, net earnings increased by **153% to $96 million** from $38 million in the prior year, and EPS grew to **$0.66** from $0.26[18](index=18&type=chunk) [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) Outlines the company's financial position, detailing assets, liabilities, and equity, as of September 30, 2021, and December 31, 2020 Consolidated Balance Sheet Highlights | Indicator (in millions) | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $78 | $61 | | Total current assets | $1,225 | $1,263 | | Goodwill | $1,071 | $1,057 | | Total assets | $2,886 | $2,956 | | **Liabilities & Equity** | | | | Total current liabilities | $832 | $975 | | Long-term debt | $372 | $374 | | Total liabilities | $1,356 | $1,529 | | Total shareholder's equity | $1,530 | $1,427 | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Details the sources and uses of cash from operating, investing, and financing activities for the nine months ended September 30 Consolidated Statements of Cash Flows (Nine Months Ended Sep 30) | Indicator (in millions) | 2021 | 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(111) | $(230) | | Net cash provided by investing activities | $58 | $62 | | Net cash provided by financing activities | $70 | $181 | | Net change in cash and cash equivalents | $17 | $12 | - Net cash used in operating activities significantly improved, decreasing to **$(111) million** for the nine months ended Sep 30, 2021, from $(230) million in the prior-year period[29](index=29&type=chunk) [Notes to Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Details the company's segments, major customer, revenue recognition, recent acquisition, and total backlog - The company operates through three reportable segments: **Advanced Sensor Technologies (AST)**, **Network Computing & Communications (NC&C)**, and **Integrated Mission Systems (IMS)**[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk) - The U.S. Department of Defense (DoD) is the largest customer, accounting for approximately **84%** and **85%** of total revenues for the third quarter and nine months of 2021, respectively[39](index=39&type=chunk) - On July 28, 2021, the company acquired substantially all assets of Ascendant Engineering Solutions (AES) for a purchase price of **$11 million** with an additional **$5 million** of contingent consideration, adding **$14 million** to goodwill in the AST segment[91](index=91&type=chunk)[135](index=135&type=chunk) - Total backlog, representing the value of remaining performance obligations, was **$3.152 billion** as of September 30, 2021, with approximately **28%** expected to be recognized as revenue over the next three months[115](index=115&type=chunk)[119](index=119&type=chunk) [Management's Discussion and Analysis (MD&A)](index=36&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's strong financial performance for the nine months ended September 30, 2021, highlighting growth in revenue, net earnings, and Adjusted EBITDA, and improved cash flow - For the nine months ended Sep 30, 2021, revenue grew **5.5% to $2,059 million**, operating earnings grew **52% to $155 million**, and net earnings grew **152% to $96 million** compared to the prior year period[258](index=258&type=chunk) - Adjusted EBITDA for the nine months ended Sep 30, 2021 increased by **35% to $210 million**, and Adjusted EBITDA margin expanded by **270 basis points to 10.2%**[258](index=258&type=chunk) - The company is taking steps to comply with the federal executive order requiring U.S. based federal contractors' employees to be vaccinated by January 4, 2022[205](index=205&type=chunk) Key Financial and Operating Data (Nine Months Ended Sep 30) | Indicator (in millions) | 2021 | 2020 | | :--- | :--- | :--- | | Total revenues | $2,059 | $1,952 | | Bookings | $1,919 | $2,542 | | Backlog | $3,152 | $3,454 | | Adjusted EBITDA | $210 | $156 | | Adjusted EPS | $0.73 | $0.34 | | Free Cash Flow | $(153) | $(267) | [Results from Operations](index=44&type=section&id=Results%20from%20Operations) Analyzes the company's operational performance for the nine months ended September 30, 2021, detailing revenue, gross profit, and the impact of reduced interest expense on net earnings - Revenue for the nine months ended Sep 30, 2021 increased by **$107 million (5.5%)**, driven by growth in the **AST segment ($75 million)** and **IMS segment ($31 million)**[260](index=260&type=chunk) - Gross profit for the nine-month period increased by **$57 million (17%)** due to higher revenue and improved program performance, including cost savings from the APEX operational excellence program[261](index=261&type=chunk)[262](index=262&type=chunk) - Interest expense for the nine-month period decreased by **45% to $27 million**, primarily due to the forgiveness of **$300 million** of principal on a term loan in December 2020[268](index=268&type=chunk) - Backlog decreased by **8.8% to $3.15 billion**, and bookings decreased by **24.5% to $1.92 billion** for the nine-month period, reflecting the burn-down of significant multi-year awards received in 2020[278](index=278&type=chunk)[279](index=279&type=chunk) [Review of Operating Segments](index=50&type=section&id=Review%20of%20Operating%20Segments) Examines the performance of AST, NC&C, and IMS segments for the nine months ended September 30, 2021, highlighting revenue and Adjusted EBITDA trends, and key profitability drivers Segment Performance (Nine Months Ended Sep 30, 2021 vs 2020) | Segment | Revenue (M) | Revenue % Chg | Adj. EBITDA (M) | Adj. EBITDA % Chg | | :--- | :--- | :--- | :--- | :--- | | AST | $743 | 11.3% | $99 | 23.4% | | NC&C | $747 | (0.3%) | $72 | 20.0% | | IMS | $584 | 5.6% | $39 | 168.3% | - AST revenue growth was driven by the transition to production for next-generation soldier sensing programs and increased deliveries of ground vehicle sensing systems[286](index=286&type=chunk) - NC&C's Adjusted EBITDA margin improved from **8.0% to 9.6%** due to better program performance across its naval computing portfolio[285](index=285&type=chunk)[292](index=292&type=chunk) - IMS profitability surged due to improved performance on key design programs like submarine electric propulsion and increased revenue from force protection programs[296](index=296&type=chunk) [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's liquidity and capital resources, highlighting improved cash, reduced operating cash outflow, and enhanced free cash flow for the nine months ended September 30, 2021 Cash Flow Summary (Nine Months Ended Sep 30) | Indicator (in millions) | 2021 | 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(111) | $(230) | | Net cash provided by investing activities | $58 | $62 | | Net cash provided by financing activities | $70 | $181 | | Free cash flow | $(153) | $(267) | - The improvement in operating cash flow was primarily due to higher net income and a decrease in cash used to fund working capital[302](index=302&type=chunk) - Net cash from financing activities decreased by **$111 million**, mainly due to lower net borrowings under the revolving credit facility as profitability and working capital management improved[304](index=304&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=54&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Details the company's limited market risk exposure, primarily focusing on interest rate risk from variable-rate debt and minimal foreign currency risk from Canadian dollar receivables - Interest rate risk is limited to variable-rate borrowings under revolving credit facilities, with an outstanding balance of **$75 million** as of September 30, 2021[307](index=307&type=chunk) - Foreign currency exposure is primarily with the Canadian dollar, limited to receivables of **$33 million** as of September 30, 2021, with a 10% exchange rate fluctuation not having a material impact[308](index=308&type=chunk) [Controls and Procedures](index=56&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of September 30, 2021, with no material changes to internal control over financial reporting - Management concluded that as of September 30, 2021, the company's disclosure controls and procedures were effective[312](index=312&type=chunk) - No changes in internal control over financial reporting occurred during the third quarter of 2021 that materially affected, or are reasonably likely to materially affect, internal controls[314](index=314&type=chunk) PART II. [Other Information](index=57&type=section&id=PART%20II.%20Other%20Information) This section covers legal proceedings, updated risk factors, equity security sales, and exhibits [Legal Proceedings](index=57&type=section&id=ITEM%201.%20Legal%20Proceedings) Information regarding legal proceedings is detailed in Note 13 to the unaudited Consolidated Financial Statements - For details on legal proceedings, refer to Note 13 of the financial statements[317](index=317&type=chunk) [Risk Factors](index=58&type=section&id=ITEM%201A.%20Risk%20Factors) Highlights updated risk factors, primarily focusing on the potential adverse impacts of the federal executive order mandating COVID-19 vaccination for federal contractor employees - A key risk factor update relates to the COVID-19 pandemic and the federal vaccine mandate for contractor employees[319](index=319&type=chunk) - The executive order requiring U.S. based federal contractors' employees to be vaccinated by January 4, 2022, could materially and adversely affect the company's financial condition, results of operations, and cash flows, including through employee attrition[320](index=320&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=58&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds during the period - None[322](index=322&type=chunk) [Exhibits](index=59&type=section&id=ITEM%206.%20Exhibits) Lists exhibits filed with the Form 10-Q, including certifications by principal executive and financial officers, and XBRL data files - The report includes required certifications from the CEO and CFO, as well as XBRL interactive data files[326](index=326&type=chunk)

RADA Electronic Industries Ltd. (RADA) Q3 2021 Earnings Conference Call November 3, 2021 9:00 AM ET Company Participants Kenny Green - GK Investor & Public Relations Dov Sella - CEO Avi Israel - CFO Conference Call Participants Greg Konrad - Jefferies Peter Arment - Baird Brian Kinstlinger - Alliance Global Partners Austin Moeller - Canaccord Jeff Bernstein - Cowan Operator Ladies and gentlemen, thank you for standing by. Welcome to the RADA Third Quarter 2021 Results Conference Call. All participants are a ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission File Number 333-253583 Leonardo DRS, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 13-2632319 (State or Other ...

Financial Data and Key Metrics Changes - The company reported revenues of $28 million for Q2 2021, representing a 61% year-over-year increase and a 12% sequential quarter increase [4] - Gross margins improved to 40%, up 4.35% or 435 basis points from the same quarter last year [4] - Adjusted EBITDA was $6.3 million, accounting for 22% of revenues, compared to an EBITDA margin of 10% in the same quarter last year [5][18] - The company has a strong balance sheet with over $96 million in net cash and zero financial debt [6][19] Business Line Data and Key Metrics Changes - The U.S. market remains the primary driver of growth, with established programs like SHORAD and Marine Corps GBAD contributing significantly [22] - The company is experiencing strong demand for its counter-UAS solutions, with a broadening pipeline of opportunities [9][10] - The inventory level increased to $31.6 million from $28.8 million at the end of 2020, with plans for further increases [20] Market Data and Key Metrics Changes - The U.S. market is showing real strength, with military modernization priorities driving demand despite budget concerns [23] - The European market is opening up gradually, with expectations for significant growth in 2023 [24] - The Middle East market has shown clear demand, although COVID-19 has slowed some opportunities [24] Company Strategy and Development Direction - The company plans to double its manufacturing capacity in both Israel and the U.S. to support growth [7] - There is a focus on maintaining high R&D investment and exploring acquisition opportunities [7] - The company anticipates further growth in the U.S. and global markets for its products in the coming years [14][15] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving over $120 million in revenues for the full year, representing around 60% year-over-year growth [5][15] - The company is strategically increasing inventory levels to mitigate supply chain risks due to global component shortages [6][19] - Management believes that the demand for their products will continue to grow, driven by military modernization efforts [23][25] Other Important Information - The company recorded a deferred tax asset of $6 million due to recent profitability, leading to a net income of $10.4 million for the quarter [18] - The company is launching three new radar systems this year, which are expected to enhance total addressable market and annual revenues [27] Q&A Session Summary Question: What drove the growth in the quarter? - The growth was primarily driven by the U.S. market, with established programs like SHORAD and Marine Corps GBAD contributing significantly [22] Question: How is the company thinking about capital deployment given the increase in cash? - The company is increasing inventory levels due to semiconductor market conditions and is preparing for growth beyond 2024 [26][27] Question: What is the status of the European market penetration? - The European market is emerging but slower than anticipated, with significant growth expected in 2023 [29] Question: Are the new Multi-Mission Hemispheric Radars on track for shipment? - The company is on track to ship the new radars by the end of the year, with no cannibalization of existing products expected [31] Question: Will the company maintain its gross margin? - The company expects to maintain a gross margin of around 40% going forward, which is not seen as temporary [41]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission File Number 333-253583 Leonardo DRS, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 13-2632319 (State or Othe ...

Financial Data and Key Metrics Changes - Revenues for Q1 2021 were over $25 million, representing a 67% year-over-year growth and an 8% increase compared to the previous quarter [6][19] - Gross margin improved to 40%, aligning with the company's target model [6] - Adjusted EBITDA for the quarter was $4.8 million, or 19% of revenues, compared to $0.9 million or 6% of revenues in Q1 2020 [20] - Net income for Q1 2021 was $3.8 million, up from $170,000 in the same quarter last year [20] - The company has a strong balance sheet with $96 million in net cash and zero financial debt at the end of the quarter [21] Business Line Data and Key Metrics Changes - Significant deliveries in Q1 included the IM-SHORAD program, with expectations to complete deliveries of 28 systems by midyear [26] - The company reported new business of $60 million in 2020, with significant contributions from the fourth quarter [24] Market Data and Key Metrics Changes - Positive trends in markets related to counter-UAS and base defense are developing in the U.S. and globally, with growing traction in European and Middle Eastern markets [11] - The U.S. Army awarded General Dynamics a framework of $1.2 billion covering multiple systems, with initial production expected to start soon [12] Company Strategy and Development Direction - The company is doubling manufacturing capacity in both Israel and the U.S. to address the semiconductor supply crisis and support growth [10] - New products are set to launch, including advanced tactical radars that enhance capabilities for near-term protection solutions [15][16] - The company aims to maintain a gross margin of around 40%, with potential for slight improvements [51] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving revenue guidance of over $120 million for 2021, reflecting more than 60% growth compared to the previous year [7][17] - The company is well-positioned to handle supply chain challenges due to proactive inventory management [23][43] - Management believes that the demand for their products will continue to grow despite potential budget pressures from the new U.S. administration [46] Other Important Information - The company successfully raised $56 million in March, enhancing its shareholder portfolio with long-term institutional investors [8] - The company is part of the Elbit Iron Fist solution for active protection systems, with serial production expected to commence in 2022 [13] Q&A Session Summary Question: Are there any delays in defense orders? - Management noted prolonged delivery dates from suppliers but emphasized that their inventory strategy has mitigated production hiccups [23] Question: What drove the growth in Q1? - Growth was driven by new business secured in 2020, with significant deliveries to the IM-SHORAD program [24][26] Question: What is the outlook for the total addressable market? - The total addressable market was increased by $1 billion, driven by new radar offerings addressing emerging defense needs [29] Question: Will the company be cash flow positive this year? - Management indicated strong cash flow performance in Q1 and expects to maintain a positive cash flow trajectory [32][33] Question: What is the status of the supply chain? - The company does not foresee issues affecting gross margins due to proactive inventory management and sourcing strategies [43] Question: Are there any new APS programs won recently? - The company is part of the Elbit APS program and has seen some new initiatives but expects significant revenues from these programs only in 2023 and beyond [45] Question: How does the new U.S. administration affect demand? - Management believes that the demand for their products will remain strong despite potential budget constraints, as they address new and emerging needs [46]