TAT Technologies Grows Revenue by 36%, Increases Net Income by 78% and increased adjusted EBITDA by 69%, for the Second Quarter of 2024
Company Delivers 7th Consecutive Quarter of Expanding Revenues and Profits
Management Reviews Financial Results and Provides Business Update on Quarterly Webcast
CHARLOTTE, N.C., Aug. 28, 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 and six-month period ended June 30, 2024.
Financial Highlights for the Second Quarter and First Six Months of 2024:
-- Revenues increased by 36.2% to $36.5 million compared to $26.8 million
for the second quarter of 2024. For the first half of 2024 revenues
increased by 36% to 70.6$ million compared to $52 million in the first
half of 2023.
-- Gross profit increased by 47.1% to $8.0 million compared to $5.4 million
for the second quarter of 2023 (21.9% of revenues in Q2\24 compared to
20.2% of revenues in Q2\23). For the first half of 2024 gross profit
increase by 55.4% to $15.1 million compared to $9.7 million in the first
half of 2023 (20.9% of revenues in H1\24 compared to 18.6% of revenues
in H1\23)
-- Operating Income increased by 78.5% to $2.7 million compared to $1.5
million in Q2\23, (7.5% of revenues in Q2\24 compared to 6.5% of
revenues in Q2\23). For the first half of 2024 operating income
increased by 99% to $4.9 million compared to $2.5 million in the first
half of 2023 (7% of revenues in H1\24 compared to 4.8% of revenues in
H1\23).
-- Net Income increased by 78% to $2.6 million compared to $1.5 million in
the second quarter of 2023. For the first half of 2024 net income
increased by 122% to $4.7 million compared to $2.1 million in the first
half of 2023.
-- Adjusted EBITDA increased by 69.4% to $4.3 million (11.9% of revenues)
compared to $2.6 million (9.6% of revenues) in the second quarter of
2023. Adjusted EBITDA for the first half of 2024 increased by 73% to $8
million compared $4.6 in the first half of 2023 (11.4% of revenues in
H1\24 compared to 9% in H1\23).
-- Cash flow from operating activities was negative $(4.1) million compared
to positive cash flow of $2.5 million in the second half of 2023. Cash
flow from operating activities for the first half of 2024 was negative
$(7.7) million compared to positive cash flow of $4.2 million in the
first half of 2023.
Mr. Igal Zamir, TAT's CEO and President commented: "We are very proud to report another record quarter marked by revenue growth, margin expansion, and profitability improvement. Our results demonstrate increasing demand for our products and services, which are aligned with our growth strategy. This was the seventh consecutive quarter of growth in revenue and EBITDA, and given our growing momentum and backlog, we expect this trend to continue."
"During the second quarter, we secured orders of more than $40 million, resulting in a record backlog and LTA Value of over $414 million," continued Mr. Zamir. "These new orders give us significant visibility into revenue potential over the coming quarters and bolster our confidence in continued success. On top of the continued revenue growth, we invest efforts in improving our operational efficiency and cost structure. This resulted in an improved Gross margin and EBITDA margin."
"During the first six months of 2024 we started serving APU of the newly certified 131 and 331-500 which serves a fleet of close to 20,000 aircraft (with a total addressable annual market of about $2 billion)," added Mr. Zamir. "The revenue obtained during the first half of 2024 is mainly driven from TAT's historical products and services. The revenue from these new engines' capabilities is insignificant. We are very excited about our future revenue growth and profits, as we start leveraging the potential of this new market. We will continue to expand our customer base for those engines MRO services according to our growth strategy"
Shareholder Webcast
Igal Zamir and Ehud Ben-Yeir, TAT's CEO and CFO, have posted a webcast reviewing the financial results and to provide a business update. Investors interested in accessing the webcast can visit the investor relations section of the Company's website at https://tat-technologies.com/investors/. The webcast will remain accessible on the website for at least 90 days.
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:
www.tat-technologies.com
Contact:
Mr. Eran Yunger
Director of IR
erany@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, [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)
J
un 30, December 31,
2024 2023
(unaudited)
(audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $8,058 $15,979
Accounts receivable, net of allowance for credit losses of $305 20,009
and $345 thousand as of Jun 30, 2024 and December 31, 2023 26,197
respectively
Restricted deposit - 661
Other current assets and prepaid expenses 6,722 6,397
Inventory 56,763 51,280
Total current assets 97,740 94,326
NON-CURRENT ASSETS:
Restricted deposit 294 302
Investment in affiliates 2,763 2,168
Funds in respect of employee rights upon retirement 644 664
Deferred income taxes 1,097 994
Property, plant and equipment, net 40,934 42,554
Operating lease right of use assets 2,656 2,746
Intangible assets, net 1,687 1,823
Total non-current assets 50,075 51,251
Total assets $147,815 $145,577
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities of long-term loans $1,937 $2,200
Short term loans 12,547 12,138
Accounts payable 9,079 9,988
Accrued expenses 12,907 13,952
Operating lease liabilities 1,155 1,033
Total current liabilities 37,625 39,311
NON CURRENT LIABILITIES:
Long-term loans 11,970 12,886
Liability in respect of employee rights upon retirement 998 1,000
Operating lease liabilities 1,486 1,697
Total non-current liabilities 14,454 15,583
Total liabilities $52,079 $54,894
EQUITY:
Share capital 3,152 3,140
Translation reserves 164
Additional paid-in capital 76,512 76,335
Treasury shares at cost (2,088) (2,088)
Accumulated other comprehensive income 27
Retained earnings 17,996 13,269
Total shareholders' equity 95,736 90,683
Total liabilities and shareholders' equity 147,815 $145,577
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
---
(In thousands, except share and per share data)
Three months ended Six months ended Year ended
June 30, December 31,
2024 2023 2024 2023 2023
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)
Revenues:
Products $11,732 $8,167 $23,667 $15,458 $35,241
Services 24,793 18,637 46,946 36,564 78,553
36,525 26,804 70,613 52,022 113,794
Cost of goods:
Products 7,673 5,548 16,659 11,822 30,517
Services 20,868 15,830 38,904 30,515 60,809
28,541 21,378 55,563 42,337 91,326
Gross Profit 7,984 5,426 15,050 9,685 22,468
Operating expenses:
Research and development, net 343 157 620 256 715
Selling and marketing 1,993 1,298 3,653 2,457 5,523
General and administrative 2,916 2,474 6,225 4,933 10,588
Other income (2) (35) (390) (441) (433)
5,250 3,894 10,108 7,205 16,393
Operating income (Loss) 2,734 1,532 4,942 2,480 6,075
Interest expenses (413) (440) (763) (806) (1,683)
Other financial income (expenses), Net 106 167 7 148 353
Income before taxes on income (tax benefit) 2,427 1,259 4,186 1,822 4,745
Taxes on income (tax benefit) 44 (63) (109) (90) 576
Income before share of equity investment 2,383 1,322 4,295 1,912 4,169
Profit of equity investment of affiliated 234 153 432 221 503
companies
Net Income $2,617 $1,475 $4,727 $2,133 $4,672
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
---
(In thousands)
Basic and diluted income per share
Net income per share $0.26 $0.16 $0.46 $0.24 $0.52
Net income per diluted shares $0.25 $0.15 $0.44 $0.23 $0.51
Weighted average number of shares
outstanding
Basic 10,394,654 8,942,423 10,386,859 8,942,423 8,961,689
Diluted 10,561,420 9,052,163 10,722,153 9,052,163 9,084,022
Three months ended Six months ended Year ended
June 30, December 31,
2024 2023 2024 2023 2023
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)
Net income $2,617 $1,475 $4,727 $2,133 $4,672
Other comprehensive income , net
Change in foreign currency translation 164 164
adjustments
Net unrealized income from derivatives 26 (27) 26 53
Total comprehensive income 2,781 $1,501 $4,864 $2,159 $4,725
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
---
(In thousands, except share data)
Share capital Accumulated
Number of Amount Additional Translation other Treasury Retained Total equity
shares issued paid-in reserves comprehensive shares earnings
capital income (loss)
BALANCE AT DECEMBER 31, 202
2 9,186,019 $2,842 $66,245 $(26) $(2,088) $8,597 $75,570
CHANGES DURING THE YEAR ENDED
DECEMBER 31, 202
3
:
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
thousands
Share based compensation 159 159
BALANCE AT DECEMBER 31, 20
2
3 10,377,085 $3,140 $76,335 $27 $(2,088) $13,269 $90,683
CHANGES DURING THE PERIOD ENDED JUN
31, 202
4
(unaudited):
Comprehensive profit 164 (27) 4,727 4,864
Exercise of option 49,109 12 (12)
Change in foreign currency translation adjustments
Share based compensation 189 189
BALANCE AT JUN 30, 202
4
(unaudited) 10,426,194 3,152 76,512 164 (2,088) 17,996 95,736
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
---
(In thousands)
Three months ended Six months ended Year ended
June 30, December 31,
2024 2023 2024 2023 2023
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $2,617 $1,475 $4,727 $2,133 $4,672
Adjustments to reconcile net income (loss) to net cash
provided by (used by) operating activities:
Depreciation and amortization 1,431 901 2,805 1,942 4,710
Loss (gain) from change in fair value of derivatives 22 (9)
Change in funds in respect of employee rights upon 15 (27) 20 (97) 116
retirement
Change in operating right of use asset and operating leasing (3) 1 (6) 22
liability
Non-cash financial expenses (274) (134) (488) (248) (172)
Decrease in restructuring plan provision (43) (32) (63) (90) (126)
Change in allowance for credit losses 40 (2) 40 (5) (182)
Share in results of affiliated companies (233) (153) (431) (221) (503)
Share based compensation 148 30 189 120 159
Liability in respect of employee rights upon retirement (5) (47) (2) (127) (148)
Capital gain from sale of property, plant and equipment (1) (29) (355) (485) (530)
Deferred income taxes, net 306 (98) (103) (76) 235
Changes in operating assets and liabilities:
Decrease (increase) in trade accounts receivable (5,430) 3,137 (6,250) 1,123 (4,205)
Decrease (increase) in other current assets and prepaid (144) 359 (325) 1,634 (341)
expenses
Increase in inventory (2,906) (3,248) (5,543) (285) (5,400)
Decrease in trade accounts payable (209) (1,034) (909) (2,155) (245)
Increase (decrease) in accrued expenses and other 591 1,352 (982) 1,062 4,202
Net cash provided by (used in) operating activities from $(4,100) $2,450 (7,647) $4,219 $2,255
continued operation
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and equipment 375 1,306 1,935 2,002
Purchase of property and equipment (978) (1,021) (1,967) (2,454) (5,102)
Purchase of intangible assets (479)
Cash flows used in investing activities $(978) $(646) $(661) $(519) $(3,579)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term loans (510) (425) (950) (847) (1,701)
Short-term credit received from banks 4,668 668 1,000
Proceeds from long-term loans received 712
Issuance of common shares 12 12
Proceeds from issuance of common shares, net 10,064
Exercise of options (13) 165 (12) 165 165
Cash flows provided by (used in) financing activities $4,157 $(260) $(282) $(682) $10,240
Net increase (decrease) in cash and cash equivalents and (921) 1,546 (8,590) 3,018 8,916
restricted cash
Cash and cash equivalents and restricted cash at 9,273 9,498 16,942 8,026 8,026
beginning of period
Cash and cash equivalents and restricted cash at the end 8,352 11,044 8,352 11,044 16,942
of period
SUPPLEMENTARY INFORMATION ON INVESTING
ACTIVITIES NOT INVOLVING CASH FLOW:
Additions of operating lease right-of-use assets and 245 590 1,345
operating lease liabilities
Reclassification of inventory to property, plant and 60 68
equipment
Supplemental disclosure of cash flow information:
Interest paid (410) (267) (852) (512) (1,438)
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA (NON-GAAP)
---
(UNAUDITED)
---
(In thousands)
Three months ended Six months ended Year ended
June 30, June 30, December 31,
2024 2023 2024 2023 2023
Net income (Loss) $2,617 $1,475 $4,727 $2,133 $4,672
Adjustments:
Share in results and sale of equity (234) (153) (432) (221) (503)
investment of affiliated companies
Taxes on income (tax benefit) 44 (63) (109) (90) 576
Financial expenses (income), net 306 272 755 658 1,330
Depreciation and amortization 1,468 1,006 2,898 2,140 4,902
Share based compensation 148 30 189 120 159
Adjusted EBITDA $4,349 $2,567 $8,028 $4,740 $11,136
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
TAT TECHNOLOGIES LTD.
(Registrant)
By: /s/ Ehud Ben-Yair
Ehud Ben-Yair
Chief Financial Officer
Date: August 28, 2024
Photo - https://mma.prnewswire.com/media/2492171/EBITDA_Q224.jpg
Photo - https://mma.prnewswire.com/media/2492172/revenue_Q224.jpg
View original content to download multimedia:https://www.prnewswire.com/news-releases/tat-technologies-grows-revenue-by-36-increases-net-income-by-78-and-increased-adjusted-ebitda-by-69-for-the-second-quarter-of-2024-302233529.html
SOURCE TAT Technologies Ltd.
