TAT Technologies Reports First Quarter 2024 Results
NETANYA, Israel, May 22, 2024 /PRNewswire/ -- TAT Technologies Ltd. (NASDAQ: TATT) (TASE: TATT) ("TAT" or the "Company"), a leading provider of products and services to the commercial and military aerospace and ground defense industries, reported today its unaudited results for the three-month period ended March 31, 2024.
Financial highlights for the first quarter of 2024:
- Revenues for Q1 2024 increased by 35.3% to $34.1 million compared to $25.2 million in Q1 2023.
- Gross profit for Q1 2024 increased by 65.1% to $7.1 million compared to $4.3 million in Q1 2023.
- Gross Margin for Q1 2024 improved by 3.8bp to 20.7% of revenues, compared to 16.9% of revenues in Q1 2023.
- Adjusted EBITDA for Q1 2024 increased by 76.8% to $3.7 million (10.8% of Revenues) compared to $2.08 million (8.25% of revenues) in Q1 2023.
- Operating Income for Q1 2024 increased by 133% to $2.2 million (6.5% of Revenues) compared to $0.95 million (3.8% of revenues) in Q1 2023.
- Net income for Q1 2024 increased by 221% to $2.1 million compared to a net Income of $0.6 million in Q1 2023.
- Cash flow from Operating activities was negative $3.5 million in Q1 2024 compared to positive $1.7 million in Q1 2023.
Mr. Igal Zamir, TAT's CEO and President commented on the results: "The first quarter of 2024 marked the seventh straight quarter of Revenue and EBITDA growth, demonstrating consistent demand for our solutions and the sustainability of our business model.
As we grow our business and further scale our capacity to meet near-term demand, we are prioritizing operational efficiency to reduce backorders, better navigate industry wide supply chain dynamics, improve customer satisfaction and maximize our profitability.
During the first quarter we secured orders and long-term agreements at a value of over $40 million, increasing our backlog and LTA Value of over $410 million. This strength will drive continued momentum in our business and support our revenue growth plan for the rest of 2024 and for years to come."
Non-GAAP Financial Measures
To supplement the consolidated financial statements presented in accordance with GAAP, the Company also presents Adjusted EBITDA. The adjustments to the Company's GAAP results are made with the intent of providing both management and investors a more complete understanding of the Company's underlying operational results, trends and performance. Adjusted EBITDA is calculated as net income excluding the impact of: the Company's share in results of affiliated companies, share-based compensation, taxes on income, financial (expenses) income, net, and depreciation and amortization. Adjusted EBITDA, however, should not be considered as alternative to net income and operating income for the period and may not be indicative of the historic operating results of the Company; nor it is meant to be predictive of potential future results. Adjusted EBITDA is not measure of financial performance under generally accepted accounting principles and may not be comparable to other similarly titled measures for other companies. See reconciliation of Adjusted EBITDA below.
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 ("OEM") of heat transfer solutions and aviation accessories through its Gedera facility; (ii) MRO services for heat transfer components and OEM of heat transfer solutions through its Limco subsidiary; (iii) MRO services for aviation components through its Piedmont subsidiary; and (iv) Overhaul and coating of jet engine components through its Turbochrome subsidiary. TAT controlling shareholders is the FIMI Private Equity Fund.
TAT's activities in the area of OEM of heat transfer solutions and aviation accessories primarily include the design, development and manufacture of (i) broad range of heat transfer solutions, such as pre-coolers heat exchangers and oil/fuel hydraulic heat exchangers, used in mechanical and electronic systems on board commercial, military and business aircraft; (ii) environmental control and power electronics cooling systems installed on board aircraft in and ground applications; and (iii) a variety of other mechanical aircraft accessories and systems such as pumps, valves, and turbine power units.
TAT's activities in the area of MRO Services for heat transfer components and OEM of heat transfer solutions primarily include the MRO of heat transfer components and to a lesser extent, the manufacturing of certain heat transfer solutions. TAT's Limco subsidiary operates an FAA-certified repair station, which provides heat transfer MRO services 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 MRO of APUs, landing gears 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's activities in the area of overhaul and coating of jet engine components includes the overhaul and coating of jet engine components, including turbine vanes and blades, fan blades, variable inlet guide vanes and afterburner flaps.
For more information of TAT Technologies Ltd., please visit our web-site:
Contact:
Mr. Eran Yunger
Director of IR
[email protected]
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, [LTAs] and backlog, 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. Shareholders 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.
TAT TECHNOLOGIES AND ITS SUBSIDIARIES | ||||
CONDENSED CONSOLIDATED BALANCE SHEET | ||||
(In thousands) | ||||
March 31, | December 31, | |||
2024 | 2023 | |||
(unaudited) | (audited) | |||
ASSETS | ||||
CURRENT ASSETS: | ||||
Cash and cash equivalents | $ 8,973 | $ 15,979 | ||
Accounts receivable, net of allowance for credit losses of $345 and $345 thousand as of March 31, 2024 and December 31, 2023 respectively | 20,829 | 20,009 | ||
Restricted deposit | 139 | 661 | ||
Other current assets and prepaid expenses | 6,578 | 6,397 | ||
Inventory | 53,857 | 51,280 | ||
Total current assets | 90,376 | 94,326 | ||
NON-CURRENT ASSETS: | ||||
Restricted deposit | 161 | 302 | ||
Investment in affiliates | 2,366 | 2,168 | ||
Funds in respect of employee rights upon retirement | 659 | 664 | ||
Deferred income taxes | 1,403 | 994 | ||
Property, plant and equipment, net | 41,318 | 42,554 | ||
Operating lease right of use assets | 2,911 | 2,746 | ||
Intangible assets, net | 1,755 | 1,823 | ||
Total non-current assets | 50,573 | 51,251 | ||
Total assets | $ 140,949 | $ 145,577 | ||
LIABILITIES AND EQUITY | ||||
CURRENT LIABILITIES: | ||||
Current maturities of long-term loans | $ 1,996 | $ 2,200 | ||
Credit line from bank | 8,027 | 12,138 | ||
Accounts payable | 9,288 | 9,988 | ||
Accrued expenses | 12,381 | 13,952 | ||
Operating lease liabilities | 1,134 | 1,033 | ||
Total current liabilities | 32,826 | 39,311 | ||
NON CURRENT LIABILITIES: | ||||
Long-term loans | 12,547 | 12,886 | ||
Liability in respect of employee rights upon retirement | 1,003 | 1,000 | ||
Operating lease liabilities | 1,765 | 1,697 | ||
Total non-current liabilities | 15,315 | 15,583 | ||
Total liabilities | $ 48,141 | $ 54,894 | ||
EQUITY: | ||||
Share capital | 3,141 | 3,140 | ||
Additional paid-in capital | 76,376 | 76,335 | ||
Treasury stock at cost | (2,088) | (2,088) | ||
Accumulated other comprehensive income | 27 | |||
Retained earnings | 15,379 | 13,269 | ||
Total shareholders' equity | 92,808 | 90,683 | ||
Total liabilities and shareholders' equity | $ 140,949 | $ 145,577 | ||
TAT TECHNOLOGIES AND ITS SUBSIDIARIES | ||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||
(In thousands, except share and per share data) | ||||
Three months ended | Year ended | |||
March 31, | December 31, | |||
2024 | 2023 | 2023 | ||
(Unaudited) | (Unaudited) | (Audited) | ||
Revenues: | ||||
Products | $ 11,935 | $ 7,291 | $ 35,241 | |
Services | 22,153 | 17,926 | 78,553 | |
34,088 | 25,217 | 113,794 | ||
Cost of goods: | ||||
Products | 8,986 | 6,274 | 30,517 | |
Services | 18,036 | 14,685 | 60,809 | |
27,022 | 20,959 | 91,326 | ||
Gross Profit | 7,066 | 4,258 | 22,468 | |
Operating expenses: | ||||
Research and development, net | 277 | 99 | 715 | |
Selling and marketing | 1,660 | 1,159 | 5,523 | |
General and administrative | 3,309 | 2,459 | 10,588 | |
Other income | (388) | (406) | (433) | |
4,858 | 3,311 | 16,393 | ||
Operating income | 2,208 | 948 | 6,075 | |
Interest expenses | (343) | (366) | (1,683) | |
Other financial income (expenses), net | (106) | (19) | 353 | |
Income before taxes on income (tax benefit) | 1,759 | 563 | 4,745 | |
Taxes on income (tax benefit) | (153) | (27) | 576 | |
Income before share of equity investment | 1,912 | 590 | 4,169 | |
Profit of equity investment of affiliated companies | 198 | 68 | 503 | |
Net income | $ 2,110 | $ 658 | $ 4,672 | |
Basic and diluted income per share | ||||
Net income per share basic | $ 0.20 |
$ 0.074 | $ 0.52 | |
Net income per share diluted | $ 0.19 | $ 0.074 | $ 0.51 | |
Weighted average number of shares outstanding : | ||||
Basic | 10,378,978 | 8,911,546 | 8,961,689 | |
Diluted | 10,554,351 | 8,911,546 | 9,084,022 | |
TAT TECHNOLOGIES AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
(In thousands) | |||
Three months ended | Year ended | ||
March 31, | December 31, | ||
2024 | 2023 | 2023 | |
(Unaudited) | (Unaudited) | (Audited) | |
Net income | $ 2,110 | $ 658 | $ 4,672 |
Other comprehensive income (loss) | |||
Net unrealized losses from derivatives | (27) | - | 53 |
Total comprehensive income | $ 2,083 | $ 658 | $ 4,725 |
TAT TECHNOLOGIES AND ITS SUBSIDIARIES | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | |||||||
(In thousands, except share data) | |||||||
Share capital | Accumulated | ||||||
Number of shares issued | Amount | Additional paid-in capital | other comprehensive income (loss) | Treasury shares | Retained earnings | Total equity | |
BALANCE AT DECEMBER 31, 2021 | 9,149,169 | $ 2,809 | $ 65,871 | $ 33 | $ (2,088) | $ 10,159 | $ 76,784 |
CHANGES DURING THE YEAR ENDED | |||||||
Comprehensive loss | - | - | - | (59) | - | (1,562) | (1,621) |
Exercise of option | 36,850 | 33 | 156 | - | - | - | 189 |
Share based compensation | - | - | 218 | - | - | - | 218 |
BALANCE AT DECEMBER 31, 2022 | 9,186,019 | $ 2,842 | $ 66,245 | $ (26) | $ (2,088) | $ 8,597 | $ 75,570 |
CHANGES DURING THE YEAR ENDED DECEMBER 31, 2023: | |||||||
Comprehensive loss | - | - | - | 53 | - | 4,672 | 4,725 |
Exercise of option | 32,466 | 8 | 157 | - | - | - | 165 |
Issuance of common shares net of issuance costs of $141 | 1,158,600 | 290 | 9,774 | - | - | - | 10,064 |
Share based compensation | - | - | 159 | - | - | - | 159 |
BALANCE AT DECEMBER 31, 2023 | 10,377,085 | $ 3,140 | $ 76,335 | $ 27 | $ (2,088) | $ 13,269 | $ 90,683 |
CHANGES DURING THE PERIOD ENDED | |||||||
Comprehensive profit | - | - | - | (27) | - | 2,110 | 2,083 |
Exercise of option | 5,552 | 1 | - | - | - | - | 1 |
Share based compensation | - | - | 41 | - | - | - | 41 |
BALANCE AT MARCH 31, 2024 (unaudited) | 10,382,637 | $ 3,141 | $ 76,376 | $ 0 | $ (2,088) | $ 15,379 | $ 92,808 |
TAT TECHNOLOGIES AND ITS SUBSIDIARIES | |||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||
(In thousands) | |||
Three months ended | Year ended | ||
March 31, | December 31, | ||
2024 | 2023 | 2023 | |
(Unaudited) | (Unaudited) | (audited) | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income (loss) from continued operations | $ 2,110 | $ 658 | $ 4,672 |
Adjustments to reconcile net income (loss) to net cash provided | |||
Depreciation and amortization | 1,374 | 1,041 | 4,710 |
Loss (gain) from change in fair value of derivatives | 22 | - | (9) |
Change in funds in respect of employee rights upon retirement | 5 | 70 | 116 |
Change in operating right of use asset and operating leasing liability | 4 | (6) | 22 |
Non-cash financial expenses | (214) | (115) | (172) |
Decrease in restructuring plan provision | (20) | (58) | (126) |
Change in allowance for credit losses | - | (3) | (182) |
Share in results of affiliated companies | (198) | (68) | (503) |
Share based compensation | 41 | 90 | 159 |
Liability in respect of employee rights upon retirement | 3 | (79) | (148) |
Capital gain from sale of property, plant and equipment | (354) | (456) | (530) |
Deferred income taxes, net | (409) | 22 | 235 |
Changes in operating assets and liabilities: | |||
Increase in trade accounts receivable | (820) | (2,012) | (4,205) |
Decrease (increase) in other current assets and prepaid expenses | (181) |
1,135 | (341) |
Decrease (increase) in inventory | (2,637) | 2,959 | (5,400) |
Decrease in trade accounts payable | (700) | (1,121) | (245) |
Increase (decrease) in accrued expenses and other | (1,573) | (290) | 4,202 |
Net cash provided by (used in) operating activities from | $ (3,547) | $ 1,767 | $ 2,255 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Proceeds from sale of property and equipment | 1,306 | 1,560 | 2,002 |
Purchase of property and equipment | (989) | (1,433) | (5,102) |
Purchase of intangible assets | - | - | (479) |
Net cash used in investing activities from continued operations | $ 317 | $127 | $ (3,579) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Repayments of long-term loans | (440) | (422) | (1,701) |
Short-term credit received (repayment) from banks | (4,000) | - | 1,000 |
Proceeds from long-term loans received | - | - | 712 |
Proceeds from issuance of common shares, net | - | - | 10,064 |
Exercise of options | 1 | - | 165 |
Net cash provided by financing activities from continued operations | $ (4,439) | $ (422) | $ 10,240 |
Net increase (decrease) in cash and cash equivalents and
| (7,669) |
1,472 | 8,916 |
Cash and cash equivalents and restricted cash at beginning of period | 16,942 | 8,026 | 8,026 |
Cash and cash equivalents and restricted cash at the end of period | $ 9,273 | $ 9,498 | $ 16,942 |
SUPPLEMENTARY INFORMATION ON INVESTING | |||
Additions of operating lease right-of-use assets and operating lease liabilities | 345 | - | 1,345 |
Reclassification of inventory to property, plant and equipment | 60 | - | 68 |
Supplemental disclosure of cash flow information: | |||
Interest paid | (442) | - | (1,438) |
TAT TECHNOLOGIES AND ITS SUBSIDIARIES | ||||
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA (NON-GAAP) (UNAUDITED) | ||||
(In thousands) | ||||
Three months ended | Year ended | |||
March 31, | December 31, | |||
2024 | 2023 | 2023 | ||
Net income (Loss) | $ 2,110 | $ 658 | $ 4,672 | |
Adjustments: | ||||
Taxes on income (tax benefit) | (153) | (27) | 576 | |
Financial expense/ (income), net | 449 | 385 | 1,330 | |
Depreciation and amortization | 1,428 | 1,041 | 4,902 | |
Share based compensation | 41 | 90 | 159 | |
Share in results and sale of equity | (198) | (68) | (503) | |
Adjusted EBITDA | $ 3,677 | $ 2,079 | $ 11,136 | |
SOURCE TAT Technologies Ltd.
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