TAT Technologies Reports 2019 Results
GEDERA, Israel, March 19, 2020 /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 audited results for the twelve months ended December 31, 2019.
Key Financial Highlights:
-- Total revenues grew by $8.8M to $102 million for the twelve months ended
December 31, 2019, compared to $93.2 million for the twelve months ended
December 31, 2018, an increase of 9.5%. MRO and OEM segments contributed
to the growth.
-- Gross profit for the twelve months ended December 31, 2019 increased by
85.5% to $15.6 million (15.3% of revenues) compared with $8.4 million
(9% of revenues) for the twelve months ended December 31, 2018. This was
achieved due to the cost decrease and efficiency increase program
started at the end of 2018.
-- EBITDA for the twelve months ended December 31, 2019 increased by $7.7M
to $6.5 million compared with a negative EBITDA of $1.2 million for the
twelve months ended December 31, 2018.
-- Net income increased by $5.2M to $0.8 million, or $0.1 per diluted share
for the twelve months ended December 31, 2019 compared with a loss of
$4.4 million, or ($0.5) per diluted share for the twelve months ended
December 31, 2018.
-- Cash stay stable at the level of $16M year over year.
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 12 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:
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
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(In thousands)
December 31,
2019 2018
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $15,959 $15,950
Accounts receivable, net 21,167 19,277
Inventory, net 43,907 38,605
Other current assets and prepaid expenses 2,605 3,627
Total current assets 83,638 77,459
NON-CURRENT ASSETS:
Investment in affiliates 956 1,078
Funds in respect of employee rights upon retirement 1,404 2,253
Deferred income taxes 228 162
Property, plant and equipment, net 21,008 21,424
Operating lease right of use assets 6,664
Intangible assets, net 777 911
Total non-current assets 31,037 25,828
Total assets $114,675 $103,287
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable $11,981 $8,270
Accrued expenses 7,393 6,411
Operating lease liabilities 1,330
Total current liabilities 20,704 14,681
NON CURRENT LIABILITIES:
Other long-term liabilities 62 180
Liability in respect of employee rights upon retirement 1,751 2,648
Deferred income taxes 1,100 1,484
Operating lease liabilities 5,688
Total non-current liabilities 8,601 4,312
Total liabilities 29,305 18,993
EQUITY:
Share capital 2,809 2,809
Additional paid-in capital 65,573 65,535
Treasury shares, at cost, 274,473 shares at December 31, 2019 and 2018 (2,088) (2,088)
Accumulated other comprehensive income (loss) 26 (206)
Retained earnings 19,050 18,244
Total shareholders' equity 85,370 84,294
Total liabilities and shareholders' equity $114,675 $103,287
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
---
(In thousands, except share and per share data)
2019 2018
Revenue:
Products $25,019 $23,151
Services 77,013 70,027
102,032 93,178
Cost of revenue:
Products 21,557 23,807
Services 64,913 60,980
86,470 84,787
Gross profit 15,562 8,391
Operating expenses:
Research and development, net 74 553
Selling and marketing 5,259 4,913
General and administrative 8,251 8,559
Other expenses (income) (4)
13,584 14,021
Operating income (loss) 1,978 (5,630)
Financial expenses (1,299) (1,569)
Financial income 848 1,467
Income (loss) before taxes on
income (tax benefit) 1,527 (5,732)
Taxes on income (tax benefit) 589 (1,464)
Income (loss) before share of
equity investment 938 (4,268)
Share in results of equity
investment of affiliated (132) (140)
companies
Net income (loss) $806 $(4,408)
Basic and diluted loss per
share
Net income (loss) per share
basic and diluted $0.1 $(0.5)
Weighted average number of
shares outstanding:
Basic 8,874,696 8,864,885
Diluted 8,874,696 8,864,885
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
---
(In thousands)
2019 2018
Net income (loss) $806 $(4,408)
Other comprehensive income (loss), net
Net unrealized gains (losses) from derivatives 372 (672)
Reclassification adjustments for gains from derivatives included in net (140) 331
income
Total other comprehensive income (loss) 232 (341)
Total comprehensive income (loss) $1,038 $(4,749)
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
---
(In thousands, except share data)
Share capital
Accumulated
Additional
other
Number of
paid-in
comprehensive
Treasury Retained
shares issued
Amount
capital
income (loss)
shares earnings Total equity
BALANCE AT DECEMBER 31, 2017 9,122,501 $2,802 $65,073 $135 $(2,088) $22,652 $88,574
CHANGES DURING THE YEAR ENDED
DECEMBER 31, 2018:
Comprehensive income (341) (4,408) (4,749)
Share based compensation 272 272
Exercise of options 26,668 7 190 197
BALANCE AT DECEMBER 31, 2018 9,149,169 $2,809 $65,535 $(206) $(2,088) $18,244 $84,294
CHANGES DURING THE YEAR ENDED
DECEMBER 31, 2019:
Comprehensive income 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
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
---
(In thousands)
2019 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $806 $(4,408)
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
Depreciation and amortization 4,372 4,185
Loss on sale of property, plant and equipment
Loss (gain) from change in fair value of derivatives (311) 382
Interest from short-term bank deposits and restricted deposits
Change in provision for doubtful accounts 38 (347)
Share in results of affiliated companies 132 140
Share based compensation 38 272
Exchange differences for lease liabilities 354
Liability in respect of employee rights upon retirement (897) (587)
Deferred income taxes, net (450) (102)
Changes in operating assets and liabilities:
Decrease (increase) in trade accounts receivable (1,928) 6,814
Decrease (increase) in other current assets and prepaid expenses 2,500 (1,575)
Decrease (increase) in inventory (5,388) 161
Increase (decrease) in trade accounts payable 3,292 (969)
Increase (decrease) in accrued expenses 982 (1,920)
Increase (decrease) in other long-term liabilities (118) 34
Net cash provided by operating activities $3,422 $2,080
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in affiliated company (10) (26)
Funds in respect of employee rights upon retirement (22)
Proceeds from sale of property and equipment 7
Purchase of property and equipment (3,403) (4,270)
Maturities of short-term deposits 470
Net cash used in investing activities $(3,413) $(3,841)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividend paid
Exercise of options 197
Net cash provided by (used in) financing activities 197
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 9 (1,564)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 15,950 17,514
CASH AND CASH EQUIVALENTS AT END OF YEAR $15,959 $15,950
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA (NON-GAAP)
---
(UNAUDITED)
---
(In thousands)
2019 2018
Net income (loss) $806 $(4,408)
Adjustments:
Share in results and sale of equity 132 140
investment of affiliated companies
Taxes on income (tax benefit) 589 (1,464)
Financial expenses, net 451 102
Depreciation and amortization 4,516 4,185
Share based compensation 38 272
Adjusted EBITDA $6,532 $(1,173)
Contact:
Mr. Ehud Ben-Yair
Chief Financial Officer
Tel: 972-8-862-8503
ehudb@tat-technologies.com
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SOURCE TAT Technologies Ltd
