GEDERA, Israel,
Nov. 27, 2015 /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,
2015.
Financial Highlights for the Third quarter of
2015:
- Total Revenue: $22
million compared to $20.3
million in the third quarter of 2014, increase of
8%.
- Operating income: $0.5
million compared to $0.6
million in the third quarter of 2014.
- Net income: $0.2
million compared to $(0.4)
million in the third quarter of 2014.
- Earnings per share basic and diluted: $0.02 per share compared to $(0.05) per share in the third quarter of
2014.
- EBITDA: $1.1 million
compared to $1.2 million in the third
quarter of 2014.
- Cash and cash equivalents and short-term bank
deposits: During the third quarter of 2015, the cash balance
decreased in $ 0.8 million, from
$29.7 million as of June 30, 2015 to $28.9
million as of September 30,
2015.
- Closing of Chromalloy Israel Acquisition: On
October 19, 2015 the Company
completed the acquisition of Chromalloy Israel for approximately US
$3.5 million. In addition, TAT will
pay an earn-out, capped at $2
million, in the event that Chromalloy Israel meets certain
annual revenue targets in 2015 and 2016.
Following
the completion of the transaction, Chromalloy Israel changed its
name to Turbochrome Ltd.
Financial Highlights for the nine months of
2015:
- Total Revenue: $63.9
million compared to $59.3
million in the nine months of 2014.
- Operating income: $2.7
million compared to $1.7
million in the nine months of 2014.
- Net income: $2.8
million compared to $0.3
million in the nine months of 2014.
- EBITDA: $4.6 million
compared to $3.2 million in the nine
months of 2014.
- Earnings per share basic and diluted: $0.32 per share compared to $0.03 per share in the nine months of
2014.
- Cash and cash equivalents and short-term bank
deposits: During the first nine months of 2015, the cash
balance increased in $ 0.9 million,
from $28 million as of December 31, 2014 to $28.9
million as of September 30,
2015.
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 segments: (i)
Original Equipment Manufacturing or "OEM" of Heat Management
Solutions (ii) Heat Transfer Services and Products (iii)
Maintenance, Repair and Overhaul or "MRO" services of Aviation
Components and (iv) overhaul and coating of certain jet engine
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 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's activities in the area of jet engine overhaul includes the
overhaul and coating of jet engine components, including turbine
vanes and blades, fan blades, variable inlet guide vanes,
afterburner flaps and other components.
For more information of TAT Technologies Ltd., please visit our
web-site:
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, the change of control that will occur on the
sale by the receiver of the Company's shares held by our previously
controlling stockholders, 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.
|
TAT TECHNOLOGIES
AND ITS SUBSIDIARIES
|
|
|
CONDENSED
CONSOLIDATED BALANCE SHEET
|
|
(Unaudited, in
thousands)
|
|
|
September
30,
|
|
December
31,
|
|
2015
|
|
2014
|
|
|
|
(Revised)
|
|
ASSETS
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
23,821
|
|
$
22,894
|
|
Short-term bank
deposits
|
5,109
|
|
5,089
|
|
Accounts
receivable-trade (net of allowance for doubtful accounts of
$269 as of September 30, 2015 and $125 as of December 31,
2014)
|
19,416
|
|
15,657
|
|
Other accounts
receivable and prepaid expenses
|
4,668
|
|
4,298
|
|
Inventories,
net
|
35,895
|
|
35,477
|
|
|
|
|
|
Total current
assets
|
88,909
|
|
83,415
|
|
|
|
|
|
Long-term
assets:
|
|
|
|
|
Investment in an
affiliated company
|
-
|
|
2,556
|
|
Investment in investee
company
|
423
|
|
-
|
|
Funds in respect of
employee rights upon retirement
|
2,505
|
|
2,496
|
|
Long-term deferred
tax
|
1,156
|
|
1,550
|
|
Property, plant and
equipment, net
|
12,025
|
|
11,524
|
|
|
|
|
|
Total Long-term
assets
|
16,109
|
|
18,126
|
|
|
|
|
|
Total
assets
|
$
105,018
|
|
$
101,541
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts payables
trade
|
5,041
|
|
5,886
|
|
Other accounts
payable and accrued expenses
|
6,984
|
|
5,651
|
|
Total current
liabilities
|
12,025
|
|
11,537
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
Other accounts
payable
|
59
|
|
34
|
|
Liability in respect
of employee rights upon retirement
|
2,708
|
|
2,655
|
|
Long-term deferred
tax liability
|
1,812
|
|
1,774
|
|
|
|
|
|
Total long-term
liabilities
|
4,579
|
|
4,463
|
|
|
|
|
|
Total
liabilities
|
16,604
|
|
16,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY:
|
|
|
|
|
Share
capital
|
2,793
|
|
2,793
|
|
Additional paid-in
capital
|
64,517
|
|
64,491
|
|
Treasury stock at
cost
|
(2,088)
|
|
(2,088)
|
|
Accumulated other
comprehensive loss
|
1
|
|
-
|
|
Retained
earnings
|
23,191
|
|
20,345
|
|
Total
equity
|
88,414
|
|
85,541
|
|
|
|
|
|
Total liabilities and
equity
|
$
105,018
|
|
$
101,541
|
|
|
|
|
|
TAT TECHNOLOGIES
AND ITS SUBSIDIARIES
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
|
(Unaudited, in
thousands, except share data)
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
Year
ended
|
|
September
30,
|
|
December
31,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2014
|
|
|
|
(Revised)
|
|
|
|
(Revised)
|
|
(Revised)
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
Products
|
$ 8,254
|
|
$ 7,483
|
|
$ 22,980
|
|
$ 23,015
|
|
$
31,363
|
|
Services
|
13,694
|
|
12,841
|
|
40,924
|
|
36,326
|
|
49,363
|
|
21,948
|
|
20,324
|
|
63,904
|
|
59,341
|
|
80,726
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
goods:
|
|
|
|
|
|
|
|
|
|
|
Products
|
7,003
|
|
5,976
|
|
18,591
|
|
17,725
|
|
23,616
|
|
Services
|
11,547
|
|
10,621
|
|
33,946
|
|
30,577
|
|
40,906
|
|
18,550
|
|
16,597
|
|
52,537
|
|
48,302
|
|
64,522
|
|
Gross
Profit
|
3,398
|
|
3,727
|
|
11,367
|
|
11,039
|
|
16,204
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
Research and
development, net
|
247
|
|
324
|
|
570
|
|
885
|
|
1,070
|
|
Selling and
marketing
|
647
|
|
776
|
|
2,130
|
|
2,415
|
|
3,203
|
|
General and
administrative
|
2,033
|
|
1,999
|
|
5,981
|
|
6,099
|
|
8,123
|
|
Other
income
|
(1)
|
|
(4)
|
|
-
|
|
(11)
|
|
(11)
|
|
2,926
|
|
3,095
|
|
8,681
|
|
9,388
|
|
12,385
|
|
Operating
income
|
472
|
|
632
|
|
2,686
|
|
1,651
|
|
3,819
|
|
|
|
|
|
|
|
|
|
|
|
Financial income
(expenses), net
|
17
|
|
(812)
|
|
(232)
|
|
(783)
|
|
(1,294)
|
|
Loss from dilution of
interests in affiliated company
|
-
|
|
-
|
|
-
|
|
(45)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
taxes on income
|
489
|
|
(180)
|
|
2,454
|
|
823
|
|
2,525
|
|
|
|
|
|
|
|
|
|
|
|
Taxes on
income
|
317
|
|
315
|
|
1,099
|
|
810
|
|
1,360
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
after taxes on income
|
172
|
|
(495)
|
|
1,355
|
|
13
|
|
1,165
|
|
Share in results and
sale of equity investment of affiliated company
|
-
|
|
48
|
|
1,491
|
|
267
|
|
267
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$ 172
|
|
$ (447)
|
|
$ 2,846
|
|
$ 280
|
|
$
1,432
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
income (loss) per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share
|
$ 0.02
|
|
$ (0.05)
|
|
$ 0.32
|
|
$ 0.03
|
|
$
0.16
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding
|
|
|
|
|
|
|
|
|
|
|
Basic
|
8,808,344
|
|
8,805,236
|
|
8,808,344
|
|
8,805,236
|
|
8,805,495
|
|
Diluted
|
8,810,824
|
|
8,805,236
|
|
8,809,844
|
|
8,830,610
|
|
8,826,542
|
|
|
|
|
|
|
|
|
|
|
|
TAT TECHNOLOGIES
AND ITS SUBSIDIARIES
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(Unaudited, in
thousands)
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
Year
ended
|
|
|
September
30,
|
|
December
31,
|
|
|
2015
|
|
2014
|
|
2015
|
2014
|
|
2014
|
|
|
|
|
(Revised)
|
|
|
(Revised)
|
|
(Revised)
|
|
CASH FLOWS FROM
OPERATING
ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$ 172
|
|
$ (447)
|
|
$ 2,846
|
$ 280
|
|
$ 1,432
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
675
|
|
527
|
|
1,890
|
1,543
|
|
2,069
|
|
Exchange differentials
of loans
|
|
-
|
|
-
|
|
-
|
(1)
|
|
(1)
|
|
Gain (loss) on sale of
property and equipment
|
|
-
|
|
-
|
|
-
|
(7)
|
|
10
|
|
Interest from
short-term bank deposits and restricted deposits
|
|
(5)
|
|
-
|
|
(20)
|
(69)
|
|
(128)
|
|
Provision for doubtful
accounts
|
|
144
|
|
-
|
|
144
|
-
|
|
-
|
|
Share in results and
sale of equity investment of affiliated company
|
|
-
|
|
(48)
|
|
(1,491)
|
(222)
|
|
(267)
|
|
Share based
compensation expenses
|
|
11
|
|
17
|
|
26
|
28
|
|
38
|
|
Liability in respect of
employee rights upon retirement
|
|
(68)
|
|
(115)
|
|
53
|
(112)
|
|
(485)
|
|
Deferred income taxes,
net
|
|
30
|
|
(19)
|
|
672
|
(267)
|
|
1,229
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
Amounts due to (from) related parties, net
|
|
-
|
|
-
|
|
-
|
5
|
|
5
|
|
Decrease (increase) in trade accounts receivable
|
|
(1,261)
|
|
643
|
|
(3,903)
|
4,082
|
|
2,730
|
|
Decrease (increase) in
other accounts receivable, prepaid expenses and other
|
|
35
|
|
(1,568)
|
|
(276)
|
(2,338)
|
|
(833)
|
|
Decrease (increase) in inventories, net
|
|
779
|
|
(770)
|
|
(418)
|
(1,404)
|
|
(6,009)
|
|
Increase (decrease) in trade accounts payable
|
|
(396)
|
|
(940)
|
|
(801)
|
(2,115)
|
|
(509)
|
|
Increase (decrease) in other accounts payable and accrued
expenses
|
|
(236)
|
|
1,121
|
|
1,052
|
1,257
|
|
(715)
|
|
Increase (decrease) in other long-term liabilities
|
|
39
|
|
(7)
|
|
25
|
(18)
|
|
(24)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
|
$ (81)
|
|
$ (1,606)
|
|
$ (201)
|
$ 642
|
|
$ (1,458)
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
Proceeds from sale of
subsidiary (A)
|
|
-
|
|
-
|
|
-
|
2,176
|
|
2,176
|
|
Proceeds from sale of
equity investment of affiliated company
|
|
-
|
|
-
|
|
3,624
|
-
|
|
-
|
|
Funds in respect of
employee rights upon retirement
|
|
76
|
|
97
|
|
(61)
|
80
|
|
352
|
|
Proceeds from sale of
property and equipment
|
|
3
|
|
-
|
|
9
|
7
|
|
19
|
|
Purchase of property
and equipment
|
|
(745)
|
|
(350)
|
|
(2,444)
|
(2,234)
|
|
(3,021)
|
|
Maturities of
short-term deposits
|
|
-
|
|
-
|
|
-
|
-
|
|
5,098
|
|
Cash flows provided
by (used in) investing activities
|
|
$ (666)
|
|
$ (253)
|
|
$ 1,128
|
$ 29
|
|
$ 4,624
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows used in
financing activities
|
|
-
|
|
-
|
|
-
|
$ (2,909)
|
|
$ (2,909)
|
|
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
(747)
|
|
(1,859)
|
|
927
|
(2,238)
|
|
257
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at beginning of period
|
|
24,568
|
|
22,258
|
|
22,894
|
22,637
|
|
22,637
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at end of period
|
|
$ 23,821
|
|
$ 20,399
|
|
$ 23,821
|
$ 20,399
|
|
$ 22,894
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A) Proceeds
from sale of subsidiary
|
|
-
|
|
-
|
|
-
|
7,136
|
|
7,136
|
|
Assets held for sale
(excluding cash in the amount of $2,823)
|
|
-
|
|
-
|
|
-
|
(3,428)
|
|
(3,428)
|
|
Liabilities held for
sale
|
|
-
|
|
-
|
|
-
|
(1,532)
|
|
(1,532)
|
|
Non-controlling
interest
|
|
-
|
|
-
|
|
-
|
$ 2,176
|
|
$ 2,176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revision of financial statements
During Q3 2015, the Company identified an error related to the
classification of US employees' social benefits expenses.
Previously, the Company classified these expenses in 'general and
administrative expenses' instead of classifying a part of them in
'Cost of goods' (product and services) for employees allocated to
this line item. This change in classification also impacted the
capitalization of inventory balances. There was no material impact
on the statement of cash flows.
The error only impacts one segment of the Company, Heat Transfer
Services and Products. The Company will revise previously reported
segment information in its Annual Report on Form 20-F for the year
ended December 31, 2015.
The Company assessed the materiality of this error in accordance
with the SEC's Staff Accounting Bulletin 99 and Accounting
Standards Codification Topic 250, Accounting Changes and Error
Corrections, and concluded that the previously issued financial
statements were not materially misstated. In accordance with
the SEC's Staff Accounting Bulletin, the Company will correct these
errors by revising the affected financial statements in the
Company's 2015 Annual Report on Form 20-F.
Following is the effect of the revision on the Company's
previously reported results:
|
Statements of
income per share:
|
|
|
For the three and
six months periods ended June 30, 2015:
|
|
|
Three months
ended
|
Six months
ended
|
|
June 30,
2015
|
June 30,
2015
|
|
As
reported
previously
|
Adjustment
|
As
revised
|
As
reported
previously
|
Adjustment
|
As
revised
|
|
Cost of
goods:
|
|
|
|
|
|
|
|
Products
|
5,964
|
70
|
6,034
|
11,444
|
144
|
11,588
|
|
Services
|
11,153
|
168
|
11,321
|
22,046
|
353
|
22,399
|
|
Gross
profit
|
4,353
|
(238)
|
4,115
|
8,466
|
(497)
|
7,969
|
|
General and
administrative
|
2,261
|
(237)
|
2,024
|
4,428
|
(480)
|
3,948
|
|
Operating
income
|
1,149
|
(1)
|
1,148
|
2,231
|
(17)
|
2,214
|
|
Net income
|
734
|
(1)
|
733
|
2,691
|
(17)
|
2,674
|
|
Net income per
share
|
0.08
|
*
|
0.08
|
0.31
|
(0.01)
|
0.30
|
|
*Represents an amount
less than $1.
|
|
For the three
periods ended March 31, 2015:
|
|
|
Three months
ended
|
|
March 31,
2015
|
|
As
reported
previously
|
Adjustment
|
As
revised
|
|
Cost of
goods:
|
|
|
|
|
Products
|
5,480
|
74
|
5,554
|
|
Services
|
10,893
|
185
|
11,078
|
|
Gross
profit
|
4,113
|
(259)
|
3,854
|
|
General and
administrative
|
2,167
|
(243)
|
1,924
|
|
Operating
income
|
1,082
|
(16)
|
1,066
|
|
Net income
|
1,957
|
(16)
|
1,941
|
|
Net income per
share
|
0.22
|
*
|
0.22
|
|
*Represents an amount
less than $1.
|
|
For the three and
nine months periods ended September 30, 2014:
|
|
|
Three months
ended
|
Nine months
ended
|
|
September 30,
2014
|
September 30,
2014
|
|
As
reported
previously
|
Adjustment
|
As
revised
|
As
reported
previously
|
Adjustment
|
As
revised
|
|
Cost of
goods:
|
|
|
|
|
|
|
|
Products
|
5,911
|
65
|
5,976
|
17,511
|
214
|
17,725
|
|
Services
|
10,458
|
163
|
10,621
|
30,114
|
463
|
30,577
|
|
Gross
profit
|
3,955
|
(228)
|
3,727
|
11,716
|
(677)
|
11,039
|
|
General and
administrative
|
2,216
|
(217)
|
1,999
|
6,771
|
(672)
|
6,099
|
|
Operating
income
|
643
|
(11)
|
632
|
1,656
|
(5)
|
1,651
|
|
Net (loss)
income
|
(436)
|
(11)
|
(447)
|
285
|
(5)
|
280
|
|
Net income per
share
|
(0.05)
|
*
|
(0.05)
|
0.03
|
*
|
0.03
|
|
*Represents an amount
less than $1.
|
|
For the year ended
December 31, 2014:
|
|
As
reported
previously
|
Adjustment
|
As
revised
|
|
Cost of
goods:
|
|
|
|
|
Products
|
23,340
|
276
|
23,616
|
|
Services
|
40,286
|
620
|
40,906
|
|
Gross
profit
|
17,100
|
(896)
|
16,204
|
|
General and
administrative
|
9,019
|
(896)
|
8,123
|
|
Operating
income
|
3,819
|
*
|
3,819
|
|
Net income
|
1,432
|
*
|
1,432
|
|
Net income per
share
|
0.16
|
*
|
0.16
|
|
*Represents an amount
less than $1.
|
|
Balance sheets and
shareholders' capital
|
|
As of December 31,
2014:
|
|
|
As
reported
Previously
|
Adjustment
|
As
revised
|
|
Inventories,
net
|
35,404
|
73
|
35,477
|
|
Total current
assets
|
83,342
|
73
|
83,415
|
|
Total
assets
|
101,468
|
73
|
101,541
|
|
Retained
earnings
|
20,272
|
73
|
20,345
|
|
Total
equity
|
85,468
|
73
|
85,541
|
Contact:
Guy Nathanzon – CFO
TAT Technologies Ltd.
Tel: 972-8-862-8500
guyn@tat-technologies.com
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/tat-technologies-reports-third-quarter-2015-results-300184952.html
SOURCE TAT Technologies Ltd