TAT Technologies Reports Year 2010 Second Quarter Results

GEDERA, Israel, August 12, 2010 /PRNewswire-FirstCall/ -- TAT Technologies Ltd. (NASDAQ: TATT), a leading provider of services and products to the commercial and military aerospace and ground defense industries, reported today its results for the three month and six month periods ended June 30, 2010.

Financial Highlights:

TAT announced revenues of $18.6 million and a net income of $ 0.02 million for the three months ended June 30, 2010 compared to revenues of $21.4 million with net income of $0.6 million for the three months ended June 30, 2009.

During the second quarter of 2010 revenues were impacted by (i) The contribution of the Parts services operations to First Aviation Services, Inc. ("FAvS", see 'Other Highlights' below); (ii) a moderate increase in revenues in the MRO operations, excluding the Propellers MRO operations contributed to FAvS (see 'Other Highlights' below) (iii) a decrease in revenues in the OEM of Heat Transfer Products operations in Israel; and (iv) an increase in revenues in the OEM of Electric Motion Systems operations in Israel. Total decrease in revenues was 12.9 %.

    Revenue breakdown by the principal operational segments for the
three-month and six-month periods ended June 30, 2010 and 2009, respectively,
was as follows:

                                  Three Months Ended June 30.
                                2010                        2009
                      Revenues         % of       Revenues         % of
                         in           Total          in           Total
                     Thousands       Revenues    Thousands       Revenues
                            unaudited                   Unaudited
    Revenues
    MRO services *  $      9,865         52.9 % $     11,736         54.8 %
    OEM of Heat
    Transfer products      5,293         28.3 %        7,018         32.7 %
    Parts services **                                  2,186         10.2 %
    OEM of Electric
    Motion Systems         3,672         19.7 %        2,278         10.6 %
    Eliminations            (181)        (0.9) %      (1,786)        (8.3) %
    Total revenues  $     18,649       100.00 % $     21,432       100.00 %


                                 Six Months Ended June 30.
                              2010                        2009
                    Revenues         % of      Revenues            % of
                       in           Total         in               Total
                   Thousands       Revenues    Thousands         Revenues
                          unaudited                     Unaudited
    Revenues
    MRO services *   $  18,819     50.8 %     $ 23,220            50.5 %
    OEM of Heat
    Transfer products   14,193     38.3 %       14,698            32.0 %
    Parts services **                            4,823            10.5 %
    OEM of Electric
    Motion Systems       5,617     15.2 %        6,014            13.1 %
    Eliminations        (1,613)    (4.3) %      (2,780)           (6.1) %
    Total  revenues  $  37,016   100.00 % $     45,975           100.00 %

* Includes MRO services for Propellers only for the three month and six month periods of year 2009 in the amount of $2,391 and $4,927 respectively. On December 4, 2009 this product line was contributed to FAvS.

** Includes results only for the three month and six month periods of year 2009 in the amount of $2,186 and $4,823, respectively. On December 4, 2009 this operational segment was contributed to FAvS.

For the six months ended June 30, 2010, TAT announced revenues of $37.0 million with net income of $ 0.8 million compared to revenues of $46.0 million with net income of $1.6 million for the same period ended June 30, 2009.

During the first six months of 2010, revenues were impacted by (i) The contribution of the Parts services operations to FAvS (see 'Other Highlights' below); (ii) a moderate increase in revenues in the MRO operations, excluding the Propellers MRO operations contributed to FAvS (see 'Other Highlights' below); (iii) a return to normal volumes of revenues in OEM of Electric Motion Systems operations in Israel upon the completion of an extraordinary project during year 2008 through first quarter of 2009; and (iv) similar levels of revenues compared to 2009, in the OEM of Heat Transfer Products operations in Israel. Total decrease in revenues was 19.5 %.

Other Highlights :

On December 4, 2009 the transaction between TAT's subsidiary, Piedmont Aviation Component Services LLC ("Piedmont"), and First Aviation Services, Inc. ("FAvS") was consummated. In connection with the transaction, among other things, Piedmont acquired 37% of FAvS common stock and $750,000 of its preferred stock, in exchange for the contribution of Piedmont's parts and propeller businesses. FAvS is a leading supplier of products and services to the aerospace industry worldwide, including the provisioning of aircraft parts and components, and supply chain management services. FAvS also performs overhaul and repair services for wheels, brakes and starter/generators, and builds custom hose assemblies. Simultaneously, FAvS acquired all of the assets of Kelly Aerospace Turbine Rotables ("KATR"), a provider of overhaul and repair services for landing gear, safety equipment, hydraulic and electrical components, brakes and hose assemblies for corporate, regional and military aircraft. Piedmont agreed to provide an up to 2 year guaranty of $7 million of the debt incurred by FAvS in connection with the KATR acquisition. TAT recorded a capital gain of $4.4 for the transaction during 2009 fourth quarter.

Dr. Shmuel Fledel, TAT's CEO commented:

"The first six months of year 2010 were a challenging period for TAT and the whole Aviation industry. We used this period to complete reorganization steps in our U.S. operations already initiated during 2009. We continued our lean manufacturing initiatives, improved our yields and effected additional management changes, including strengthening our marketing team. During this period we continued to enhance our competitive advantage and we're proud that Piedmont Aviation, our U.S subsidiary, was awarded the Best APU Overhaul & Repair Station by the prestigious OneAero Top Shop contest for the third consecutive year. This award together with our focus on enhancing our strategic relationships with industry leaders such as Lockheed Martin, Honeywell, Hamilton and others will impact our future growth. Our goal is to be a significant player in our MRO and OEM products for the commercial and military aerospace and ground defense industries. We believe that the latest strategic steps that we took, and the recent deals we announced, should assist in improving our results in the next quarters".

                        TAT TECHNOLOGIES AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                  (Unaudited, in thousands, except share data)

                                               June 30,   June 30,
                                                 2010       2009
                      ASSETS
    Current Assets:
    Cash and cash equivalents                   $ 26,735   $19,108
    Marketable securities                          3,454    21,773
    Restricted deposit                             5,068         -
    Trade accounts receivable (net of
      allowance for doubtful accounts of $2,453
      and $198 at June 30, 2010 and June 30,
      2009, respectively)                         16,390    18,317
    Inventories                                   34,995    34,660
    Other accounts receivable and prepaid
      expenses                                     6,673     5,424

    Total current assets                          93,315    99,282

    Investment in affiliate                        9,319         -
    Funds in respect of employee right upon
      retirement                                   2,551     3,550
    Long-term deferred tax                           162        --
    Property, plant and equipment, net            14,123    14,877
    Intangible assets, net                         2,615     1,897
    Goodwill                                       5,251     5,829

    Total assets                                $127,336  $125,435

              LIABILITIES AND EQUITY

    Current Liabilities:
    Current maturities of long-term loans          3,136       154
    Trade accounts payables                        7,032     5,783
    Other accounts payable and accrued expenses    5,912     6,413

    Total current liabilities                     16,080    12,350

    LONG-TERM LIABILITIES:
                                                  --
    Long-term loans, net of current maturities     7,186     6,353
    Liability in respect of employee rights
      upon retirement                              3,125     4,226
    Long-term deferred tax liability               2,737     1,016

                                                  13,048    11,595

    EQUITY:
    Share capital
    Ordinary shares of NIS 0.9 par value -
      Authorized: 10,000,000 shares at June 30,
      2010 and 2009; Issued and outstanding:
      9,073,043 and 8,815,003 shares
      respectively at June 30, 2010; 6,552,671
      and 6,548,021 shares respectively at June
      30, 2009.                                    2,790     2,204
    Additional paid-in capital                    64,420    39,730
    Accumulated other comprehensive loss          (1,149)   (1,307)
    Treasury stock, at cost, 258,040 and 4,650
      shares at June 30, 2010 and 2009,
      respectively                                (2,018)      (26)
    Retained earnings                             31,405    33,150
    Total shareholders equity                     95,448    73,751
    Noncontrolling interest                        2,760    27,739

    Total equity:                                 98,208   101,490

    Total liabilities and equity                $127,336  $125,435




                        TAT TECHNOLOGIES AND SUBSIDIARIES

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME

           (Unaudited, in thousands, except share and per share data)

                              Three months ended       Six months ended
                                   June 30,                 June 30
                              2010         2009         2010         2009

    Revenues:
    MRO services              $ 9,865     $ 11,736     $ 18,819     $ 23,220
    OEM - Heat Transfer
      products                  5,293        7,018       14,193       14,698
    OEM - Electric Motion
      Systems                   3,672        2,278        5,617        6,014
    Parts services                           2,186            -        4,823
    Eliminations                 (181)      (1,786)      (1,613)      (2,780)
                               18,649       21,432       37,016       45,975

    Cost and operating expenses:
    MRO services                7,488       11,228       15,530       20,721
    OEM - Heat Transfer
      products                  4,809        4,803       10,770        9,795
    OEM - Electric Motion
      Systems                   2,638        1,509        4,166        3,823
    Parts services                  -        1,867            -        3,907
    Eliminations                 (578)      (1,800)      (1,780)      (2,817)
                               14,357       17,607       28,686       35,429
    Gross Profit                4,292        3,825        8,330       10,546

    Research and
      development costs           186          207          327          372
    Selling and marketing
      expenses                    960        1,110        1,666        1,988
    General and
      administrative expenses   2,684        2,762        5,275        5,705
    Relocation Expenses             -          122            -          406
                                3,830        4,201        7,268        8,471
    Operating income (loss)       462         (376)       1,062        2,075

    Financial expense            (699)        (473)      (1,087)      (1,279)
    Financial income              315          634          656        1,144
    Other income, net                          353                       144

    Income before income taxes     78          138          631        2,084

    Income taxes (benefit)        176         (125)         202          616

    Net income (loss)             (98)         263          429        1,468
    Share in results of
      affiliated company          213            -          419            -
    less: Net loss (income)
      attributable to
      noncontrolling interest     (96)         287          (91)         140
    Net income (loss
      attributable to
      controlling interest        $19         $550         $757       $1,608

    Basic net income per
      share attributable to
      controlling interest      $0.01       $0..08        $0.09       $0. 24
    Diluted net income per
      share attributable to
      controlling interest      $0.01        $0.08        $0.09        $0.24

    Weighted average number
      of shares - basic     8,815,003    6,548,021    8,815,003    6,550,346
    Weighted average number
      of shares - diluted   8,815,003    6,549,273    8,816,668    6,551,598

About TAT Technologies LTD

TAT Technologies LTD is a leading provider of services and products to the commercial and military aerospace and ground defense industries.

TAT operates under three operational segments: (i) OEM of Heat Transfer products (ii) OEM of Electric Motion Systems; and (iii) MRO services, each with the following characteristics.

TAT's activities in the area of OEM of Heat Transfer products primarily relate to the (i) design, development, manufacture and sale of a broad range of heat transfer components (such as heat exchangers, pre-coolers and oil/fuel hydraulic coolers) used in mechanical and electronic systems on-board commercial, military and business aircraft; and (ii) manufacture and sale of environmental control and cooling systems and (iii) a variety of other electronic and mechanical aircraft accessories and systems such as pumps, valves, power systems and turbines.

TAT's activities in the area of OEM of Electric Motion Systems primarily relate to the design, development, manufacture and sale of a broad range of electrical motor applications for airborne and ground systems. TAT activities in this segment commenced with the acquisition of Bental in August 2008.

TAT's MRO services include the remanufacture, overhaul and repair of heat transfer equipment and other aircraft components, APUs, propellers and landing gear. TAT's Limco subsidiary operates FAA certified repair stations, which provide aircraft component MRO services for airlines, air cargo carriers, maintenance service centers and the military.

TAT also holds 37% in First Aviation Services, a world-wide distributor of products and services to the aerospace industry and a one-stop-shop for MRO services (wheels, breaks, propellers and landing gear) for the General Aviation Industry.

* * * * *

TAT's executive offices are located in the Re'em Industrial Park, Neta Boulevard, Bnei Ayish, Gedera 70750, Israel, and TAT's telephone number is 972-8-862-8500.

Safe Harbor for Forward-Looking Statements

This press release contains forward-looking statements which include, without limitation, statements regarding possible or assumed future operation results. These statements are hereby identified as "forward-looking statements" for purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that could cause our results to differ materially from management's current expectations. Actual results and performance can also be influenced by other risks that we face in running our operations including, but are not limited to, general business conditions in the airline industry, changes in demand for our services and products, the timing and amount or cancellation of orders, the price and continuity of supply of component parts used in our operations, and other risks detailed from time to time in the company's filings with the Securities Exchange Commission, including, its annual report on form 20-F and its periodic reports on form 6-K. These documents contain and identify other important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update publicly or revise any forward-looking statement.

For more information of TAT Technologies, please visit our web-site: http://www.tat-technologies.com

    Contact:

    Miri Segal-Scharia            Yaron Shalem - CFO
    MS-IR LLC                     TAT Technologies Ltd.
    Tel:1-917-607-8654            Tel: 972-8-862-8500
    msegal@ms-ir.com              yarons@tat-technologies.com

SOURCE TAT Technologies Ltd




Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.