TAT Technologies Reports Year 2013 Third Quarter Results

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



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http://www.tat-technologies.com

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