TAT Technologies Reports Year 2011 First Quarter Results

GEDERA, Israel, May 19, 2011 /PRNewswire-FirstCall/ -- TAT Technologies Ltd. (NASDAQ: TATT - News), 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 period ended March 31, 2011.

Financial Highlights:

TAT announced revenues of $21.4 million and a net income of $1.5 million for the three months ended March 31, 2011, compared to revenues of $18.4 million with net income of $0.7 million for the three months ended March 31, 2010 an increase of 17% in revenues and of 103% in net profit

During the first quarter of 2011, revenues were impacted by (i) the increase in revenues in the OEM of Electric Motion Systems segment; (ii) the increase in revenues in the Heat Transfer Services and Products segment; and (iii) the increase in revenues in the MRO Services for Aviation Components segment; (iv) partially offset by the decrease in revenues in the OEM of Heat Management Solutions segment.

    Revenue breakdown by the principal operational segments for the
three-month period ended March 31, 2011 and 2010, respectively, was as
follows:

                                 Three Months Ended December 31.
                                2011                         2010
                      Revenues            % of       Revenues         % of
                         in              Total          in           Total
                     Thousands          Revenues    Thousands       Revenues
                             Unaudited                     Unaudited
    Revenues
    OEM of Heat
    Management
    Solutions       $  7,640            35.7 %      $ 8,900         48.5 %
    Heat Transfer
    Services and
    Products *         6,467            30.2 %        5,170         28.1 %
    MRO services
    of Aviation
    Components *       4,799            22.4 %        3,784         20.6 %
    OEM of
    Electric
    Motion Systems     3,570            16.7 %        1,945         10.6 %
    Eliminations      (1,074)           (5.0)%       (1,432)        (7.8)%
    Total revenues  $ 21,402          100.00 %     $ 18,367       100.00 %

* As of January 1, 2011, TAT began reporting its operations based on four operating segments, after dividing its MRO Services operating segment into two separate segments: Heat Transfer Services and Products; and MRO services for Aviation Components. Accordingly, the revenues and costs reported for the three months ended March 31, 2010 for MRO Services operating segment were divided between these two new operating segments. Additionally, the operating segment name of 'OEM of Heat Transfer Products' was changed to OEM of Heat Management Solutions.

Dr. Shmuel Fledel, TAT's CEO commented:

"The first quarter of year 2011 was a successful period for TAT during which we increased our revenues and improved our margins, compared to the same period in 2010. This improvement is attributable to the efforts we made during year 2010 in expanding our marketing and sales activities as well as in working rigorously to improve our production flow and yields. We continue to focus on our core capabilities while expanding our business offerings worldwide.

"We are encouraged by global trends of increased traffic reported by airlines and we believe we are witnessing a steady recovery in the demand for MRO services, as well as positive indications from OEMs in the aerospace and defense industries, which impact our businesses.

"We believe that our efforts along with continuing improvement in the global aviation industry, will sustain the improved trend line of our performances in 2011."


                        TAT TECHNOLOGIES AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                  (Unaudited, in thousands, except share data)


                                          March 31,   March 31,
                                            2011         2010
                   ASSETS
    Current Assets:
    Cash and cash equivalents              $ 28,820      $ 25,874
    Marketable securities                     2,547         2,934
    Restricted deposit                        5,081         5,065
    Trade accounts receivable (net of
    allowance for doubtful accounts of
    $2,527 and $ 2,402 as of March 31,
    2011 and March 31, 2010,
    respectively)                            20,072        16,171
    Inventories                              33,152        34,478
    Other accounts receivable and prepaid
    expenses                                  7,583         8,229

    Total current assets                     97,255        92,751

    Investment in affiliate                   4,535         9,105
    Funds in respect of employee right
    upon retirement                           2,959         2,681
    Long-term deferred tax                    1,128           158
    Property, plant and equipment, net       14,356        14,202
    Intangible assets, net                    1,736         2,801
    Goodwill                                  1,144         5,296

    Total assets                           $123,113      $126,994

           LIABILITIES AND EQUITY

    Current Liabilities:
    Current maturities of long-term loans     9,556         1,828
    Trade accounts payables                   7,796         7,935
    Other accounts payable and accrued
    expenses                                  7,371         5,260

    Total current liabilities                24,723        15,023

    LONG-TERM LIABILITIES:

    Long-term loans, net of current
    maturities                                  798         7,300
    Other accounts payable                      129             -
    Liability in respect of employee
    rights upon retirement                    3,531         3,227
    Long-term deferred tax liability            775         2,905

                                              5,233        13,432

    EQUITY:
    Share capital
    Ordinary shares of NIS 0.9 par value
    - Authorized:

    10,000,000 shares at March 31, 2011
    and 2010; Issued

    and outstanding: 8,815,003 shares at
    March 31, 2011 and

    2010                                      2,790         2,790
    Additional paid-in capital               64,449        64,407
    Accumulated other comprehensive loss       (249)         (808)
    Treasury stock, at cost, 258,040
    shares at March 31, 2011 and 2009,
    respectively                             (2,018)       (2,018)
    Retained earnings                        24,964        31,385
    Total TAT Technologies shareholders'
    equity                                   89,936        95,756
    Noncontrolling interest                   3,221         2,783

    Total equity:                            93,157        98,539

    Total liabilities and equity           $123,113      $126,994




                        TAT TECHNOLOGIES AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
           (Unaudited, in thousands, except share and per share data)


                                   Three months ended
                                       March 31,
                                      2011         2010

    Revenues:
    OEM of Heat Management
    Solutions                       $7,640       $8,900
    Heat Transfer Services and
    Products *                       6,467        5,170
    MRO services for Aviation
    Components *                     4,799        3,784
    OEM of Electric Motion
    Systems                          3,570        1,945
    Eliminations                    (1,074)      (1,432)
                                    21,402       18,367

    Cost and operating expenses:
    OEM of Heat Management
    Solutions                        5,392        5,961
    Heat Transfer Services and
    Products                         4,698        4,089
    MRO services for Aviation
    Components                       4,067        3,605
    OEM of Electric Motion
    Systems                          2,487        1,528
    Eliminations                      (952)      (1,204)
                                    15,692       13,979
    Gross Profit                     5,710        4,388

    Research and development
    costs                              265          141
    Selling and marketing
    expenses                           882          706
    General and administrative
    expenses                         2,469        2,941
                                     3,616        3,788
    Operating income                 2,094          600

    Financial expense                 (308)        (388)
    Financial income                   517          341

    Income before income taxes       2,303          553

    Taxes on income                    780           26

    Net income                       1,523          527
    Share in results of
    affiliated company                  86          206
    Net loss (income)
    attributable to Non
    controlling interest              (107)           5
    Net income attributable to
    TAT Technologies
    shareholders                   $ 1,502         $738
    Earning per share
    Basic net income per share       $0.17        $0.08
    Diluted net income per share     $0.17        $0.08

    Weighted average number of
    shares - basic               8,815,003    8,815,003
    Weighted average number of
    shares - diluted             8,815,003    8,815,003

* As of January 1, 2011, TAT began reporting its operations based on four operating segments, after dividing its MRO Services operating segment into two separate segments: Heat Transfer Services and Products; and MRO services for Aviation Components. Accordingly, the revenues and costs reported for the three months ended March 31, 2010 for MRO Services operating segment were divided between these two new operating segments. Additionally, the operating segment name of 'OEM of Heat Transfer Products' was changed to OEM of Heat Management Solutions.

Operating Segments

TAT operates under four segments: (i) Original Equipment Manufacturing or "OEM" of Heat Management Solutions (ii) OEM of Electric Motion Systems (iii) Heat Transfer Services and Products and (iv) Maintenance, Repair and Overhaul or "MRO" services of Aviation Components.

Until December 31, 2010, TAT operated under three segments. As of January 1, 2011, TAT began reporting its operations based on four operating segments, after dividing its MRO Services operating segment into two separate segments: Heat Transfer Services and Products; and MRO services for Aviation Components. Accordingly, the revenues and costs reported for the three months ended March 31, 2010 for MRO Services operating segment were divided between these two new operating segments. Additionally, the operating segment name of 'OEM of Heat Transfer Products' was changed to OEM of Heat Management Solutions.

OEM of Heat Management Solutions primarily includes the design, development, manufacture and sale of (i) 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; (ii) environmental control and cooling systems on board aircraft and for ground applications; and (iii) a variety of other electronic and mechanical aircraft accessories and systems such as pumps, valves, power systems and turbines.

OEM of Electric Motion Systems primarily includes the design, development, manufacture and sale of a broad range of electrical motor applications for airborne and ground systems.

Heat Transfer Services and Products includes the maintenance, repair and overhaul of heat transfer equipment and in a lesser extent, the manufacturing of certain heat transfer products. TAT's Limco subsidiary operates an FAA certified repair station, which provides heat transfer MRO services and products for airlines, air cargo carriers, maintenance service centers and the military.

MRO services for Aviation Components includes the maintenance, repair and overhaul of APUs, landing gear and other aircraft components. TAT's Piedmont subsidiary operates an FAA certified repair station, which provides 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.

Entry into Consulting Agreement with Avi Ortal

In April 2011, Avi Ortal, the Chief Executive Officer of the Company's subsidiary, Limco-Piedmont, Inc., advised TAT's Board of his intention to terminate his employment on July 31, 2011. On May 18, 2011, Mr. Ortal entered into a Consulting Agreement with TAT, effective for a period of eight months following the termination of his employment, to provide part-time consulting services to TAT with respect to its U.S. based subsidiaries. Mr. Ortal will receive consulting fees of $20,000 per month for such services.

Subsequent Event

None

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.

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

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.

    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




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