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.
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 email@example.com firstname.lastname@example.org
SOURCE TAT Technologies Ltd