TAT Technologies Reports Year 2013 Third Quarter Results

Nov 25, 2013, 14:35 ET from TAT Technologies

GEDERA, Israel, Nov. 25, 2013 /PRNewswire/ -- TAT Technologies Ltd. (NASDAQ: TATT) ("the Company"), 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 nine month periods ended September 30, 2013.

Financial Highlights:

TAT announced revenues of $21.1 million with a net income of $0.8 million for the three months ended September 30, 2013, compared to revenues of $22.1 million with a net income of $1.8 million for the three months ended September 30, 2012, a decrease of 4.2% in revenues along with a decrease of $1.0 million in net income.

During the Third quarter of 2013, revenues were impacted by (i) the decrease in revenues in the OEM of Heat Management Solutions operating segment; (ii) the decrease in revenues in the MRO Services for Aviation Components operating segment; (iii) the decrease in revenues in the OEM of Electric Motion Systems operating segment; partially offset by (iv) the increase in revenues in the Heat Transfer Services and Products operating segment.

Revenue breakdown by operating segments for the three month and nine month periods ended September 30, 2013 and 2012 was as follows:

 

Three Months Ended September 30,

2013

2012

% of Change Between Periods

Revenues in Thousands

% of Total Revenues

Revenues in Thousands

% of Total Revenues

Unaudited

Revenues:

OEM of Heat Management Solutions

$          7,250

34.3%

$         8,001

36.2%

(9.4)%

Heat Transfer Services and Products

7,634

36.1%

6,655

30.2%

14.7%

MRO services for Aviation Components

5,489

26.0%

6,027

27.3%

(8.9)%

OEM of Electric Motion Systems

2,188

10.3%

2,436

11.0%

(10.2)%

Eliminations

(1,416)

(6.7)%

(1,040)

(4.7)%

36.2%

Total revenues

$         21,145

100.0%

$       22,079

100.0%

(4.2)%

 

 

Nine Months Ended September 30,

2013

2012

% of Change Between Periods

Revenues in Thousands

% of Total Revenues

Revenues in Thousands

% of Total Revenues

Unaudited

Revenues:

OEM of Heat Management Solutions

$        20,972

32.5%

$       22,721

35.0%

(7.7)%

Heat Transfer Services and Products

22,241

34.5%

20,542

31.7%

8.3%

MRO services for Aviation Components

17,460

27.0%

16,666

25.7%

4.8%

OEM of Electric Motion Systems

6,180

9.6%

6,915

10.6%

(10.6)%

Eliminations

(2,318)

(3.6)%

(1,961)

(3.0)%

18.2%

Total revenues

$         64,535

100.0%

$       64,883

100.0%

(0.5)%

 

For the nine months ended September 30, 2013, TAT announced revenues of $64.5 million with a net income of $3.5 million compared to revenues of $64.9 million with a net loss of $1.8 million for the nine months ended September 30, 2012. The net loss reported for the nine month period ended September 30, 2012 was the result of a $1.0 million impairment charge of goodwill in TAT's OEM for Electric Motion Systems operating segment and a $3.3 million impairment charge with respect to TAT's investment in FAvS. Excluding the impairment charges recorded during 2012, net income for the nine months ended September 30, 2013 increased by $1.0 million compared to the same period in 2012.

During the nine months ended September 30, 2013, revenues were impacted by (i) the increase in revenues in the Heat Transfer Services and Products operating segment; (ii) the increase in revenues in the MRO Services for Aviation Components operating segment; offset by (iii) the decrease in revenues in the OEM of Heat Management Solutions operating segment; and (iv) the decrease in revenues in the OEM of Electric Motion Systems operating segment, which is a continuation of the decrease in revenues this segment had experienced during 2012 and 2011.

 

TAT TECHNOLOGIES AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

(In thousands, except share data)

September 30,

September 30,

December 31,

2013

2012

(unaudited)

(audited)

ASSETS

Current Assets:

Cash and cash equivalents

$              21,732

$             15,250

$            16,581

Short-term bank deposits

10,107

10,100

10,048

Marketable securities at fair value

-

1,800

-

Short-term restricted deposits

-

2,907

2,307

Trade accounts receivable (net of allowance for doubtful accounts of  $398 and $ 346 as of September 30, 2013 and 2012, respectively)

18,044

19,076

20,930

Other accounts receivable and prepaid expenses

3,671

4,719

4,587

Inventories, net

33,523

33,835

33,031

Total current assets

87,077

87,687

87,484

Long-term assets:

Investment in affiliated company

2,380

1,804

1,264

Funds in respect of employee right upon retirement

3,620

3,092

3,318

Long-term deferred tax

1,247

3,076

2,535

Property, plant and equipment, net

13,060

12,637

12,910

Total Long-term assets

20,307

20,609

20,027

Total assets

$            107,384

$           108,296

$          107,511

 

LIABILITIES AND EQUITY

Current Liabilities:

Short term bank loan and current maturities of long-term loans

$                1,305

$                4,168

$              3,274

Trade accounts payables

5,598

7,210

5,373

Other accounts payable and accrued expenses

6,413

6,139

7,407

Total current liabilities

13,316

17,517

16,054

Long-term liabilities:

Long-term loans, net of current maturities

-

1,176

1,116

Other accounts payable

64

85

-

Liability in respect of employee rights upon retirement

4,202

3,599

3,815

Long-term deferred tax liability

943

1,428

1,490

Total long-term liabilities

5,209

6,288

6,421

 

EQUITY:

Share capital

Ordinary shares of NIS 0.9 par value – Authorized and Issued: 10,000,000 shares and 9,073,043 shares, respectively, at September 30, 2013 and 2012; Outstanding: 8,798,570 and 8,805,270 shares at September 30, 2013 and 2012, respectively

2,790

2,790

2,790

Additional paid-in capital

64,414

64,402

64,410

Treasury stock, at cost, 274,473 and 267,773 shares at September 30, 2013 and 2012, respectively

(2,088)

(2,059)

(2,088)

Accumulated other comprehensive loss

(559)

(1,196)

(897)

Retained earnings

21,535

17,888

18,018

Total TAT Technologies shareholders' equity

86,092

81,825

82,233

Non controlling interest

2,767

2,666

2,803

Total equity:

88,859

84,491

85,036

Total liabilities and equity

$            107,384

$           108,296

$          107,511

 

 

 

TAT TECHNOLOGIES AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except share and per share data)

Three months ended

Nine months ended

Year ended

September 30,

September 30,

December 31,

2013

2012

2013

2012

2012

(unaudited)

(audited)

Revenues:

OEM of Heat Management Solutions

$       7,250

$       8,001

$     20,972

$    22,721

$         31,032

Heat Transfer Services and Product

7,634

6,655

22,241

20,542

27,709

MRO services for Aviation Components

5,489

6,027

17,460

16,666

22,442

OEM of Electric Motion Systems

2,188

2,436

6,180

6,915

10,007

Eliminations

(1,416)

(1,040)

(2,318)

(1,961)

(3,268)

21,145

22,079

64,535

64,883

87,922

Cost and operating expenses:

OEM of Heat Management Solutions

6,207

5,859

16,790

16,849

23,105

Heat Transfer Services and Products

5,217

4,697

15,621

14,746

19,671

MRO services for Aviation Components

4,781

5,161

14,550

13,698

19,044

OEM of Electric Motion Systems

1,595

1,580

5,268

5,579

8,043

Eliminations

(1,317)

(1,018)

(2,488)

(2,069)

(3,281)

16,483

16,279

49,741

48,803

66,582

Gross Profit

4,662

5,800

14,794

16,080

21,340

Research and development, net

179

164

682

839

1,152

Selling and marketing expenses

858

783

2,672

2,596

3,426

General and administrative expenses

2,486

2,504

7,944

8,254

11,487

Other expenses (income)

4

-

(3)

10

9

Impairment of  goodwill

-

-

-

1,015

1,015

3,527

3,451

11,295

12,714

17,089

Operating income

1,135

2,349

3,499

3,366

4,251

Financial expenses

(225)

(439)

(849)

(1,652)

(2,229)

Financial income

163

399

755

1,488

2,048

Income before income taxes

1,073

2,309

3,405

3,202

4,070

Taxes on income

250

565

1,185

1,896

2,086

Net income after income taxes

823

1,744

2,220

1,306

1,984

Share in results of affiliated company and impairment of share in affiliated company

18

136

1,116

(3,216)

(3,756)

Net income (loss)

841

1,880

3,336

(1,910)

(1,772)

Net loss (income) attributable to Non controlling interest

(51)

(108)

181

66

58

Net income (loss) attributable to TAT Technologies shareholders

$          790

$       1,772

$       3,517

$   (1,844)

$        (1,714)

Earning per share

Basic and diluted net income (loss) per share attributable to controlling interest

$         0.09

$         0.20

$       0.40

$     (0.21)

$     (0.19)

Weighted average number of shares – basic and diluted

8,798,570

8,805,270

8,798,570

8,808,591

8,808,075

 

Seasonality

In the OEM industry in general and in TAT's OEM businesses in particular, the majority of customers operate based on annual budgets and tend to utilize during the fiscal fourth quarter the remaining balance of any un-used budgets. This trend is more typical with customers from the defense industry. Accordingly, TAT is more likely to generate increased revenues in the OEM businesses (such as TAT's OEM of Heat Management Solutions and OEM of Electric Motion Systems) during the fiscal fourth quarter. The aviation industry is known for its highest traffic in the third quarter, primarily attributable to summer vacations. As a result, during the fiscal third quarter, airlines tend to postpone, to the extent possible, maintenance and repair of their aircraft to minimize aircraft grounding. Accordingly, TAT is more likely to notice decreased revenues in the MRO businesses (such as TAT's MRO for Aviation Components and Heat Transfer Services and Products) during the fiscal third quarter with recovery during subsequent quarters. 

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 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.

TAT's activities in the area of OEM of Heat Management Solutions primarily include 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.

TAT's activities in the area of OEM of Electric Motion Systems primarily include the design, development, manufacture and sale of a broad range of electrical motor applications for airborne and ground systems.

TAT's activities in the area of Heat Transfer Services and Products include 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 FAA certified repair station, which provides heat transfer MRO services and products for airlines, air cargo carriers, maintenance service centers and the military.

TAT's activities in the area of MRO services for Aviation Components include 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 approximately 30% of the equity of First Aviation Services, 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.

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

Yaron Shalem – CFO TAT Technologies Ltd. Tel: 972-8-862-8500 yarons@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.

SOURCE TAT Technologies



RELATED LINKS

http://www.tat-technologies.com