GEDERA, Israel, May 13, 2021 /PRNewswire/ -- TAT
Technologies Ltd. (NASDAQ: 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, 2021.
Financial highlights for the first quarter of 2021
(unaudited):
- Revenues for Q1 2021 increased by 11% to
$18.3 million compared to revenues of
$16.5 million in Q4 2020 and decreased by 25% compared
to $24.6 million in Q1 2020.
- Gross profit for Q1 2021 increased by
259% to $3.4 million
compared to $0.9 million in Q4 2020 and
decreased by 26% compared to $4.6
million in Q1 2020.
- Gross margin for Q1 2021 improved to 18.6% compared to 5.7% in
Q4 2020 and compared to 18.5% in Q1 2020.
- Adjusted EBITDA for Q1 2021 increased by $2.7 million to $1.6
million compared to a loss of $1.1
million in Q4 2020 and decreased by 36% compared to
$2.5 million in Q1 2020.
- Net income for Q1 2021 increased to $0.6 million compared to a loss of
$1.9 million in Q4 2020 and compared
to net income of $0.4 million in Q1
2020.
The Company is proceeding with its recently announced plan to
improve its cost structure, and in that respect has recently begun
executing on its plan to consolidate the Company's operations in
Kiryat Gat, Israel and
Tulsa, Oklahoma. Among other
things, such actions will enable the Company to concentrate its
heat exchanges cores activity in the
United States allowing for better operational flow, getting
closer to the Company's customer base and cutting fixed costs. To
support this process, the Company successfully continued to obtain
loans from banks in Israel and the
US and has continued in improving its working capital. In
connection with such plan, the Company incurred expenses of
$0.5 million and capital expenditures
of $0.5 million in Q1 2021.
As part of the consolidation of certain of the Company's
operations in the US, the Company secured grants and incentives
from the State of Oklahoma in an
amount of approximately $11 million
(subject to the terms of such grants) which will be utilized to
finance investments and employee-related expenses of the Company's
operations in Oklahoma.
Mr. Igal Zamir, TAT's CEO and
President commented on the results: "In Q1 we increased our
revenues and gross margin, improved our working capital and stabled
the Company's operational cash flow. In Q1 of 2021 we already
started enjoying the fruits of our strategic lease deal with
Honeywell that was signed at the end of 2020 as well as a PPP loan
forgiveness of $1.44 million. We
continue with the plan to streamline our operations and expect our
cost structure to improve by 2022."
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 in pages 13 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:
www.tat-technologies.com
Contact:
Mr. Ehud
Ben-Yair
Chief Financial Officer
Tel.: +972-8-862-8503
ehudb@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
(In thousands)
|
March
31,
|
|
December
31,
|
2021
|
|
2020
|
|
(unaudited)
|
|
(audited)
|
ASSETS
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$
21,709
|
|
$
24,128
|
Accounts receivable,
net
|
12,862
|
|
11,355
|
Inventory,
net
|
40,406
|
|
41,223
|
Other current assets
and prepaid expenses
|
2,856
|
|
2,737
|
|
|
|
|
Total current
assets
|
77,833
|
|
79,443
|
|
|
|
|
NON-CURRENT
ASSETS:
|
|
|
|
Restricted
deposit
|
320
|
|
176
|
Investment in
affiliates
|
759
|
|
771
|
Funds in respect of
employee rights upon retirement
|
1,133
|
|
1,186
|
Deferred income
taxes
|
702
|
|
566
|
Intangible assets,
net
|
1,716
|
|
1,475
|
Property, plant and
equipment, net
|
25,959
|
|
25,737
|
Operating lease right
of use assets
|
6,461
|
|
6,767
|
|
|
|
|
Total non-current
assets
|
37,050
|
|
36,678
|
Total
assets
|
$
114,883
|
|
$
116,121
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
Current maturities of
long-term loans
|
$
773
|
|
$
1,477
|
Credit line from
bank
|
6,012
|
|
3,000
|
Accounts
payable
|
5,998
|
|
12,222
|
Accrued
expenses
|
7,247
|
|
6,691
|
Operating lease
liabilities
|
1,589
|
|
1,614
|
Provision for
restructuring plan
|
470
|
|
-
|
Liabilities belong to
discontinued operation
|
43
|
|
179
|
|
|
|
|
Total current
liabilities
|
22,132
|
|
25,183
|
|
|
|
|
NON CURRENT
LIABILITIES:
|
|
|
|
Long-term loans
|
5,625
|
|
3,489
|
Liability in respect
of employee rights upon retirement
|
1,283
|
|
1,410
|
Operating lease
liabilities
|
5,092
|
|
5,758
|
|
|
|
|
Total
non-current liabilities
|
12,000
|
|
10,657
|
Total
liabilities
|
34,132
|
|
$
35,840
|
|
|
|
|
EQUITY:
|
|
|
|
Share
capital
|
2,809
|
|
2,809
|
Additional paid-in
capital
|
65,737
|
|
65,711
|
Treasury stock at
cost
|
(2,088)
|
|
(2,088)
|
Accumulated other
comprehensive income (loss)
|
(15)
|
|
128
|
Retained
earnings
|
14,308
|
|
13,721
|
Total shareholders'
equity
|
80,751
|
|
80,281
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
114,883
|
|
$
116,121
|
*Reclassified due to discontinued
operation.
|
|
|
|
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,
|
|
2021
|
|
2020(*)
|
|
2020
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
Products
|
$
4,154
|
|
$
7,257
|
|
$
22,739
|
Services
|
14,206
|
|
17,393
|
|
52,620
|
|
18,360
|
|
24,650
|
|
75,359
|
|
|
|
|
|
|
Cost of
goods:
|
|
|
|
|
|
Products
|
3,610
|
|
5,794
|
|
20,751
|
Services
|
11,352
|
|
14,273
|
|
46,173
|
|
14,962
|
|
20,067
|
|
66,924
|
Gross
Profit
|
3,398
|
|
4,583
|
|
8,435
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
Research and
development, net
|
136
|
|
37
|
|
185
|
Selling and
marketing
|
1,205
|
|
1,157
|
|
4,369
|
General and
administrative
|
1,622
|
|
2,048
|
|
7,612
|
Restructuring and
other expenses
|
520
|
|
-
|
|
315
|
|
3,483
|
|
3,242
|
|
12,481
|
|
|
|
|
|
|
Operating income
(loss)
|
(85)
|
|
1,341
|
|
(4,046)
|
|
|
|
|
|
|
Financial income
(expenses), net
|
397
|
|
160
|
|
(770)
|
|
|
|
|
|
|
Income (loss) before
taxes on
income (tax benefit)
|
312
|
|
1,501
|
|
(4,816)
|
|
|
|
|
|
|
Taxes on income (tax
benefit)
|
(131)
|
|
642
|
|
(1,517)
|
|
|
|
|
|
|
Income (loss) before
equity
investment
|
443
|
|
859
|
|
(3,299)
|
|
|
|
|
|
|
Share in results of
affiliated
companies
|
(12)
|
|
(98)
|
|
(185)
|
Net income (loss)
from continued
operation
|
$
431
|
|
$
761
|
|
$
(3,484)
|
Net profit (loss)
from discontinued
operation
|
156
|
|
(315)
|
|
$
(1,845)
|
Net income
(loss)
|
$
587
|
|
$
446
|
|
$
(5,329)
|
|
|
|
|
|
|
Basic and diluted
income per share
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share basic
and diluted from continued
operation
|
$
0.05
|
|
$
0.09
|
|
$
(0.39)
|
Net income (loss) per
share basic
and diluted from discontinued
operation
|
$
0.02
|
|
$
(0.04)
|
|
$
(0.21)
|
Net income (loss) per
share basic
and diluted
|
$
0.07
|
|
$
0.05
|
|
$
(0.6)
|
|
|
|
|
|
|
Weighted average
number of shares
outstanding
|
|
|
|
|
|
Basic
|
8,874,696
|
|
8,874,696
|
|
8,874,696
|
Diluted
|
8,874,696
|
|
8,874,696
|
|
8,874,696
|
|
|
|
|
|
|
*Reclassified due to
discontinued operation.
|
TAT TECHNOLOGIES AND ITS
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME
(In thousands)
|
Three months
ended
|
|
Year
ended
|
|
March
31,
|
|
December
31,
|
|
2021
|
|
2020
|
|
2020
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
|
|
|
Net income
|
$
587
|
|
$
446
|
|
$
(5,329)
|
Other comprehensive
income (loss)
|
|
|
|
|
|
Net unrealized
incomes (losses) from derivatives
|
(143)
|
|
(108)
|
|
232
|
Reclassification
adjustments for gains included in net
income and
inventory
|
-
|
|
5
|
|
(130)
|
Total other
comprehensive income
|
$
444
|
|
$
343
|
|
$
(5,227)
|
|
|
|
|
|
|
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, 2018
|
|
9,122,501
|
|
$
2,802
|
|
$
65,535
|
|
$
(206)
|
|
$
(2,088)
|
|
$
18,244
|
|
$
84,294
|
|
CHANGES DURING THE
YEAR ENDED
DECEMBER 31, 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
(loss)
|
|
-
|
|
-
|
|
-
|
|
232
|
|
-
|
|
806
|
|
1,038
|
|
Share based
compensation
|
|
-
|
|
-
|
|
38
|
|
-
|
|
-
|
|
-
|
|
38
|
|
BALANCE AT DECEMBER
31, 2019
|
|
9,149,169
|
|
$
2,809
|
|
$
65,573
|
|
$
26
|
|
$
(2,088)
|
|
$
19,050
|
|
$
85,370
|
|
CHANGES DURING THE
YEAR ENDED
DECEMBER 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income
|
|
-
|
|
-
|
|
-
|
|
102
|
|
-
|
|
(5,329)
|
|
(5,227)
|
|
Share based
compensation
|
|
-
|
|
-
|
|
138
|
|
-
|
|
-
|
|
-
|
|
138
|
|
BALANCE AT DECEMBER
31, 2020
|
|
9,149,169
|
|
$
2,809
|
|
$
65,711
|
|
$
128
|
|
$
(2,088)
|
|
$
13,721
|
|
$
80,281
|
|
CHANGES DURING THE
YEAR ENDED MARCH
31, 2021 (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
(loss)
|
|
-
|
|
-
|
|
-
|
|
(143)
|
|
-
|
|
587
|
|
444
|
|
Share based
compensation
|
|
-
|
|
-
|
|
26
|
|
-
|
|
-
|
|
-
|
|
26
|
|
BALANCE AT MARCH
31, 2021 (unaudited)
|
|
9,149,169
|
|
$
2,809
|
|
$
65,737
|
|
$
(15)
|
|
$
(2,088)
|
|
14,308
|
|
$
80,751
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In
thousands)
|
|
Three months
ended
|
|
Year
ended
|
|
|
|
March
31,
|
|
December
31,
|
|
|
|
2021
|
|
2020
|
|
2020
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(audited)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
587
|
|
$
446
|
|
$
(5,329)
|
|
Net income (loss) from
continued operations
|
|
431
|
|
761
|
|
(3,484)
|
|
Adjustments to
reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
1,056
|
|
1,035
|
|
4,065
|
|
Loss (gain) from
change in fair value of derivatives
|
|
(9)
|
|
109
|
|
(34)
|
|
Provision for doubtful
accounts
|
|
-
|
|
205
|
|
(8)
|
|
Share in results of
affiliated Company
|
|
12
|
|
98
|
|
185
|
|
Share based
compensation
|
|
26
|
|
40
|
|
138
|
|
Non cash
finance expense
|
|
(397)
|
|
(229)
|
|
566
|
|
Provision for
restructuring expenses
|
|
533
|
|
-
|
|
-
|
|
Liability in respect of
employee rights upon retirement
|
|
(127)
|
|
(128)
|
|
(341)
|
|
Impairment of
intangible assets
|
|
-
|
|
-
|
|
298
|
|
Deferred income taxes,
net
|
|
(136)
|
|
312
|
|
(1,438)
|
|
Government loan
forgiveness
|
|
(1,443)
|
|
-
|
|
-
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Decrease (increase) in trade accounts receivable
|
|
(1,573)
|
|
267
|
|
9,472
|
|
Decrease (increase) in other current assets and prepaid
expenses
|
|
(181)
|
|
710
|
|
310
|
|
Decrease (increase) in
inventory
|
|
798
|
|
(470)
|
|
1,868
|
|
Decrease in trade accounts payable
|
|
(106)
|
|
(3,212)
|
|
(5,336)
|
|
Increase (decrease) in accrued expenses
|
|
560
|
|
1,778
|
|
(252)
|
|
Decrease in other long-term liabilities
|
|
(27)
|
|
(13)
|
|
(62)
|
|
Net cash provided by
(used in) operating activities
|
|
$
(583)
|
|
$
1,263
|
|
$
5,947
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Investment in
affiliated company
|
|
-
|
|
-
|
|
-
|
|
Purchase of property
and equipment
|
|
(7,605)
|
|
-
|
|
(3,894)
|
|
Purchase of intangible
assets
|
|
(285)
|
|
(898)
|
|
(1,513)
|
|
Cash flows used in
investing activities
|
|
$
(7,890)
|
|
$
(898)
|
|
$
(5,407)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Short-term credit
received from banks
|
|
3,000
|
|
-
|
|
3,960
|
|
Proceeds from
long-term loans received
|
|
3,042
|
|
-
|
|
3,692
|
|
Cash flows provided
by financing activities
|
|
$6,042
|
|
$
-
|
|
$
7,652
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
DISCONTINUED ACTIVITIES:
|
|
|
|
|
|
|
|
Net profit (loss) from
discontinued operation
|
|
156
|
|
(315)
|
|
(1,845)
|
|
Net cash provided by
operating activities
|
|
-
|
|
366
|
|
1,998
|
|
Net cash provided by
(used in) discontinued activities
|
|
156
|
|
51
|
|
153
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
(2,275)
|
|
416
|
|
8,345
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at beginning of period
|
|
24,304
|
|
15,959
|
|
15,959
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at end of period
|
|
$
22,029
|
|
$
16,375
|
|
$
24,304
|
|
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,
|
|
|
2021
|
|
2020
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
587
|
|
$
446
|
|
$
(5,329)
|
|
Adjustments:
|
|
|
|
|
|
|
Share in results and
sale of equity
investment of affiliated companies
|
12
|
|
98
|
|
185
|
|
Taxes on income (tax
benefit)
|
(131)
|
|
642
|
|
(1,517)
|
|
Financial (income)
expenses, net
|
(397)
|
|
(160)
|
|
770
|
|
Depreciation and
amortization
|
1,105
|
|
1,103
|
|
4,219
|
|
Provision for
restructuring expenses
|
533
|
|
-
|
|
-
|
|
Exit and disposal
activities
|
-
|
|
-
|
|
805
|
|
Discontinued
operation (income) loss
|
(156)
|
|
315
|
|
1,845
|
|
Share based
compensation
|
26
|
|
40
|
|
138
|
|
Adjusted
EBITDA
|
$
1,579
|
|
$
2,484
|
|
$
1,116
|
|
|
|
|
|
|
|
|
View original
content:http://www.prnewswire.com/news-releases/tat-technologies-reports-first-quarter-2021-results-301291325.html
SOURCE TAT Technologies Ltd