TAT Technologies Reports First Quarter 2017 Results and Declares a $3 Million Cash Dividend
GEDERA, Israel, May 17, 2017 /PRNewswire/ -- TAT Technologies Ltd. (NASDAQ: TATT - News) ("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, 2017. The Company also declared a cash dividend of $3 million payable on June 21, 2017 to shareholders of record on June 7, 2017.
Financial highlights for the first quarter of 2017 (unaudited):
Total Revenue: $27.1 million compared to $23.6 million in the first quarter of 2016, growth of 14.8% in revenues compared to the first quarter of 2016.
Adjusted EBITDA: $2.9 million compared to adjusted EBITDA of $1.1 million in the first quarter of 2016.
Net income: $1.2 million compared to $0.04 million in the first quarter of 2016.
Net income (Non-GAAP): $1.3 million compared to $0.1 million in the first quarter of 2016.
Earnings per share basic and diluted: $0.14 per share compared to $0.01 per share in the first quarter of 2016.
Earnings per share basic and diluted (Non-GAAP): $0.14 per share compared to $0.01 in the first quarter of 2016.
Net cash provided by (used in) operating activities: $3.1 million compared to $ (0.2) million in the first quarter of 2016.
Long-Term Projects: Following a periodic assessment of its long-term projects, the Company updated its estimates of profits expected to be earned from certain long-term contract. This assessment resulted in a decrease in revenues for the first quarter of 2017 in an amount of $0.5 million and a decrease of $0.4 million in net income.
Declaration of dividend
: The Board of Directors approved a distribution of cash dividend in the total amount of $3 million (approximately NIS 10.8 million), or $0.33981 per share (approximately NIS 1.22672 per share), for all of the shareholders of TAT Technologies. The dividend will be paid to shareholders of record on June 7, 2017. TAT Technologies will pay the dividend on June 21, 2017.
Mr. Igal Zamir, TAT's CEO and President commented on the results: "We had a strong first quarter with sales growing 14.8% compared to the first quarter of 2016, mainly due to strong results in our heat exchangers, landing gear and jet engine blades businesses. In addition, our efficiency and cost reduction measures continue to bear fruit. We are also working to improve cash flow and during the quarter our cash and short term bank deposits have increased by $2.4 million. All this enabled us to declare a $3 million dividend and return value to our shareholders."
Non-GAAP Financial Measures
To supplement the consolidated financial statements presented in accordance with GAAP, the Company also presents a Non-GAAP presentation of Net Income and 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. Non-GAAP Net Income excludes changes, income or losses, as applicable, related to one or more of the following: (1) share-based compensation expenses and/or (2) certain tax impact and/or (3) acquisition related expenses and/or (4) share in results of equity investment of affiliated companies. Adjusted EBITDA is calculated as net income before the Company's share in results and sale of equity investment of affiliated companies, share-based compensation, taxes on income, financial (expenses) income, net, and depreciation and amortization. Non-GAAP Net Income and Adjusted EBITDA, however, should not be considered as alternatives to net income and operating income for the period and may not be indicative of the historic operating results of the Company; nor they are meant to be predictive of potential future results. Non-GAAP Net Income and Adjusted EBITDA are not measures of financial performance under generally accepted accounting principles and may not be comparable to other similarly titled measures for other companies. See reconciliation of GAAP Net Income to Non-GAAP Net Income and Adjusted EBITDA in pages 9 and 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'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
Guy Nathanzon, CFO
TAT Technologies Ltd.
Tel: +972-8-862-8500
guyn@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,
2017 2016
---- ----
(unaudited) (audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $23,813 $21,433
Short-term bank deposits 964 964
Accounts receivable, net 21,019 21,572
Other current assets and prepaid
expenses 3,109 1,687
Inventory, net 37,944 39,269
------ ------
Total current assets 86,849 84,925
------ ------
NON-CURRENT ASSETS:
Investment in affiliates 1,086 1,019
Funds in respect of employee rights
upon retirement 2,732 2,660
Deferred income taxes 1,032 896
Intangible assets, net 1,146 1,179
Property, plant and equipment, net 20,927 21,298
------ ------
Total non-current assets 26,923 27,052
------ ------
Total assets $113,772 $111,977
======== ========
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable 6,941 8,406
Accrued expenses 11,066 9,836
------ -----
Total current liabilities 18,007 18,242
------ ------
NON CURRENT LIABILITIES:
Other long-term liabilities 187 151
Liability in respect of employee
rights upon retirement 3,096 2,994
Deferred income taxes 2,132 1,938
Total non-current liabilities 5,415 5,083
----- -----
Total liabilities 23,422 23,325
------ ------
EQUITY:
Share capital 2,797 2,797
Additional paid-in capital 64,817 64,760
Treasury stock at cost (2,088) (2,088)
Accumulated other comprehensive loss 367 (73)
Retained earnings 24,457 23,256
------ ------
Total shareholders' equity 90,350 88,652
Total liabilities and shareholders'
equity $113,772 $111,977
======== ========
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,
--------- ------------
2017 2016 2016
(Unaudited) (Unaudited) (Audited)
Revenues:
Products $9,550 $8,069 $30,431
Services 17,531 15,565 65,363
------ ------ ------
27,081 23,634 95,794
------ ------ ------
Cost of goods:
Products 6,911 6,691 23,788
Services 14,613 13,008 52,969
------ ------ ------
21,524 19,699 76,757
------ ------ ------
Gross Profit 5,557 3,935 19,037
----- ----- ------
Operating expenses:
Research and
development, net 229 264 1,140
Selling and
marketing 1,142 1,010 3,876
General and
administrative 2,267 2,410 10,023
Other loss (income) 28 1 (138)
--- --- ----
3,666 3,685 14,901
Operating income 1,891 250 4,136
----- --- -----
Financial expenses,
net (172) (19) (154)
---- --- ----
Income before taxes
on income 1,719 231 3,982
Taxes on income 498 186 3,865
--- --- -----
Income before equity
investment 1,221 45 117
Share in results of
affiliated
companies (20) - (55)
Net income $1,201 $45 $62
Basic and diluted income per share
Net income per share $0.14 $0.01 $0.01
===== ===== =====
Weighted average number of shares outstanding
Basic 8,828,444 8,828,444 8,828,444
Diluted 8,865,808 8,828,444 8,830,764
========= ========= =========
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
-----------------------------------------------
(In thousands)
Three months ended Year ended
March 31, December 31,
2017 2016 2016
---- ----
(Unaudited) (Unaudited) (Audited)
Net income $1,201 $45 $62
Other comprehensive income
Net unrealized gains (losses) from
derivatives (97) 365 174
Reclassification adjustments for
gains included in net income and
inventory 537 (47) (243)
--- --- ----
Total other comprehensive income
(loss) $1,641 $363 $(7)
====== ==== ===
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP RESULTS (UNAUDITED)
-----------------------------------------------------
(In thousands, except share and per share data)
Three months ended Year ended
------------------ ----------
March 31, December 31,
--------- ------------
2017 2016 2016
---- ---- ----
Reported net income on GAAP
basis $1,201 $45 $62
Adjustments:
Tax adjustments re non-GAAP
adjustments (1) - - 2,685
Other expenses (Acquisition
related expenses) - - (105)
Share in results of equity
investment of affiliated
company 20 - 55
Share based compensation 57 14 105
--- --- ---
Non-GAAP net income $1,278 $59 $2,802
====== === ======
Non-GAAP net income per share $0.14 $0.01 $0.32
===== ===== =====
Weighted average number of shares outstanding
Basic 8,828,444 8,828,444 8,828,444
Diluted 8,865,808 8,828,444 8,830,764
========= ========= =========
(1) During the second quarter of 2016 the Company distributed dividend from its foreign subsidiaries earnings. As a result, the company accrued deferred tax liability due to actual distribution of earnings from foreign subsidiaries of the Company and due to the possibility of future distribution of earnings from such foreign subsidiaries.
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
------------------------------------------------------
(In thousands, except share data)
TAT Technologies Ltd. Shareholders
----------------------------------
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, 2014
(audited) 9,082,817 $2,793 $64,491 $ - $(2,088) $20,345 $85,541
CHANGES DURING THE YEAR ENDED
DECEMBER 31, 2015 (audited):
Comprehensive income (loss) - - - (4) - 5,849 5,845
Share based compensation expenses - - 38 - - - 38
--- --- --- --- --- --- ---
BALANCE AT DECEMBER 31, 2015
(audited) 9,082,817 2,793 64,529 (4) (2,088) 26,194 91,424
CHANGES DURING THE YEAR ENDED
DECEMBER 31, 2016 (unaudited):
Comprehensive income (loss) - - - (69) - 62 (7)
Share based compensation expenses - - 105 - - - 105
Exercise of option 20,100 4 126 - - - 130
Dividend distributed - - - - - (3,000) (3,000)
--- --- --- --- --- ------ ------
BALANCE AT DECEMBER 31, 2016
(audited) 9,102,917 2,797 64,760 (73) (2,088) 23,256 88,652
CHANGES DURING THE THREE MONTHS
ENDED MARCH 31, 2017 (unaudited):
Comprehensive income 440 1,201 1,641
Share based compensation expenses 57 57
--- ---
BALANCE AT MARCH 31, 2017
(unaudited) 9,102,917 $2,797 $64,817 $367 $(2,088) $24,457 $90,350
--------- ------ ------- ---- ------- ------- -------
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(In thousands)
Three months ended Year ended
------------------ ----------
March 31, December 31,
--------- ------------
2017 2016 2016
---- ---- ----
(Unaudited) (Unaudited) (audited)
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $1,201 $45 $62
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 969 851 3,636
Loss on sale of property,
plant and equipment 28 1 12
Interest from short-term bank
deposits and restricted
deposits (11) (24)
Gain from change in fair value
of derivatives (16) (53) (152)
Provision for doubtful
accounts 18 43 (29)
Share in results of affiliated
Company 20 - 55
Share based compensation 57 14 105
Liability in respect of
employee rights upon
retirement 102 18 123
Deferred income taxes, net 58 (118) 1,670
Changes in operating assets
and liabilities:
Decrease (increase) in trade
accounts receivable 535 (1,437) (2,392)
Decrease (increase) in other
current assets and prepaid
expenses (942) (536) 1,487
Decrease (increase) in
inventory 1,265 172 (2,707)
Increase (decrease) in trade
accounts payable (1,438) 427 1,192
Increase in accrued expenses 1,230 552 2,521
Increase (decrease) in other
long-term liabilities 36 (147) (38)
--- ---- ---
Net cash provided by operating
activities $3,123 $(179) $5,521
CASH FLOWS FROM INVESTING
ACTIVITIES:
Investment in affiliated
company (87) - (905)
Funds in respect of employee
rights upon retirement (36) (140) 2
Proceeds from sale of property
and equipment 1 17
Purchase of property and
equipment (620) (668) (5,702)
Maturities of short-term
deposits 2,000 7,182
----- -----
Cash flows provided by (used
in) investing activities $(743) $1,193 $594
CASH FLOWS FROM FINANCING
ACTIVITIES:
Realization of contingency - - (500)
Payment of cash dividend - - (3,000)
Exercise of options - 130 130
--- --- ---
Cash flows provided by (used
in) financing activities $ - $130 $(3,370)
---------------- ---- -------
Net increase (decrease) in
cash and cash equivalents 2,380 1,144 2,745
Cash and cash equivalents at
beginning of period 21,433 18,688 18,688
Cash and cash equivalents at
end of period $23,813 $19,832 $21,433
------- ------- -------
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,
--------- ------------
2017 2016 2016
---- ---- ----
Net income $1,201 $45 $62
Adjustments:
Share in results and sale of
equity investment of
affiliated companies 20 55
Taxes on income 498 186 3,865
Financial expenses, net 172 19 154
Depreciation and amortization 969 851 3,636
Share based compensation 57 14 105
--- --- ---
Adjusted EBITDA $2,917 $1,115 $7,877
====== ====== ======
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SOURCE TAT Technologies Ltd
