TAT
Technologies Ltd. (NASDAQ: TATT), 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 six month periods ended
June 30, 2010.
Financial Highlights:
TAT announced revenues of $18.6 million and a net income of $ 0.02
million for the three months ended June 30, 2010 compared to revenues of
$21.4 million with net income of $0.6 million for the three months ended June
30, 2009.
During the second quarter of 2010 revenues were impacted by (i) The
contribution of the Parts services operations to First Aviation Services,
Inc. ("FAvS", see 'Other Highlights' below); (ii) a moderate increase in
revenues in the MRO operations, excluding the Propellers MRO operations
contributed to FAvS (see 'Other Highlights' below) (iii) a decrease in
revenues in the OEM of Heat Transfer Products operations in Israel; and (iv)
an increase in revenues in the OEM of Electric Motion Systems operations in
Israel. Total decrease in revenues was 12.9 %.
Revenue breakdown by the principal operational segments for the
three-month and six-month periods ended June 30, 2010 and 2009, respectively,
was as follows:
Three Months Ended June 30.
2010 2009
Revenues % of Revenues % of
in Total in Total
Thousands Revenues Thousands Revenues
unaudited Unaudited
Revenues
MRO services * $ 9,865 52.9 % $ 11,736 54.8 %
OEM of Heat
Transfer products 5,293 28.3 % 7,018 32.7 %
Parts services ** 2,186 10.2 %
OEM of Electric
Motion Systems 3,672 19.7 % 2,278 10.6 %
Eliminations (181) (0.9) % (1,786) (8.3) %
Total revenues $ 18,649 100.00 % $ 21,432 100.00 %
Six Months Ended June 30.
2010 2009
Revenues % of Revenues % of
in Total in Total
Thousands Revenues Thousands Revenues
unaudited Unaudited
Revenues
MRO services * $ 18,819 50.8 % $ 23,220 50.5 %
OEM of Heat
Transfer products 14,193 38.3 % 14,698 32.0 %
Parts services ** 4,823 10.5 %
OEM of Electric
Motion Systems 5,617 15.2 % 6,014 13.1 %
Eliminations (1,613) (4.3) % (2,780) (6.1) %
Total revenues $ 37,016 100.00 % $ 45,975 100.00 %
* Includes MRO services for Propellers only for the three month and six
month periods of year 2009 in the amount of $2,391 and $4,927 respectively.
On December 4, 2009 this product line was contributed to FAvS.
** Includes results only for the three month and six month periods of
year 2009 in the amount of $2,186 and $4,823, respectively. On December 4,
2009 this operational segment was contributed to FAvS.
For the six months ended June 30, 2010, TAT announced revenues of $37.0
million with net income of $ 0.8 million compared to revenues of $46.0
million with net income of $1.6 million for the same period ended June 30,
2009.
During the first six months of 2010, revenues were impacted by (i) The
contribution of the Parts services operations to FAvS (see 'Other Highlights'
below); (ii) a moderate increase in revenues in the MRO operations, excluding
the Propellers MRO operations contributed to FAvS (see 'Other Highlights'
below); (iii) a return to normal volumes of revenues in OEM of Electric
Motion Systems operations in Israel upon the completion of an extraordinary
project during year 2008 through first quarter of 2009; and (iv) similar
levels of revenues compared to 2009, in the OEM of Heat Transfer Products
operations in Israel. Total decrease in revenues was 19.5 %.
Other Highlights :
On December 4, 2009 the transaction between TAT's subsidiary, Piedmont
Aviation Component Services LLC ("Piedmont"), and First Aviation Services,
Inc. ("FAvS") was consummated. In connection with the transaction, among
other things, Piedmont acquired 37% of FAvS common stock and $750,000 of its
preferred stock, in exchange for the contribution of Piedmont's parts and
propeller businesses. FAvS is a leading supplier of products and services to
the aerospace industry worldwide, including the provisioning of aircraft
parts and components, and supply chain management services. FAvS also
performs overhaul and repair services for wheels, brakes and
starter/generators, and builds custom hose assemblies. Simultaneously, FAvS
acquired all of the assets of Kelly Aerospace Turbine Rotables ("KATR"), a
provider of overhaul and repair services for landing gear, safety equipment,
hydraulic and electrical components, brakes and hose assemblies for
corporate, regional and military aircraft. Piedmont agreed to provide an up
to 2 year guaranty of $7 million of the debt incurred by FAvS in connection
with the KATR acquisition. TAT recorded a capital gain of $4.4 for the
transaction during 2009 fourth quarter.
Dr. Shmuel Fledel, TAT's CEO commented:
"The first six months of year 2010 were a challenging period for TAT and
the whole Aviation industry. We used this period to complete reorganization
steps in our U.S. operations already initiated during 2009. We continued our
lean manufacturing initiatives, improved our yields and effected additional
management changes, including strengthening our marketing team. During this
period we continued to enhance our competitive advantage and we're proud that
Piedmont Aviation, our U.S subsidiary, was awarded the Best APU Overhaul &
Repair Station by the prestigious OneAero Top Shop contest for the third
consecutive year. This award together with our focus on enhancing our
strategic relationships with industry leaders such as Lockheed Martin,
Honeywell, Hamilton and others will impact our future growth. Our goal is to
be a significant player in our MRO and OEM products for the commercial and
military aerospace and ground defense industries. We believe that the latest
strategic steps that we took, and the recent deals we announced, should
assist in improving our results in the next quarters".
TAT TECHNOLOGIES AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except share data)
June 30, June 30,
2010 2009
ASSETS
Current Assets:
Cash and cash equivalents $ 26,735 $19,108
Marketable securities 3,454 21,773
Restricted deposit 5,068 -
Trade accounts receivable (net of
allowance for doubtful accounts of $2,453
and $198 at June 30, 2010 and June 30,
2009, respectively) 16,390 18,317
Inventories 34,995 34,660
Other accounts receivable and prepaid
expenses 6,673 5,424
Total current assets 93,315 99,282
Investment in affiliate 9,319 -
Funds in respect of employee right upon
retirement 2,551 3,550
Long-term deferred tax 162 --
Property, plant and equipment, net 14,123 14,877
Intangible assets, net 2,615 1,897
Goodwill 5,251 5,829
Total assets $127,336 $125,435
LIABILITIES AND EQUITY
Current Liabilities:
Current maturities of long-term loans 3,136 154
Trade accounts payables 7,032 5,783
Other accounts payable and accrued expenses 5,912 6,413
Total current liabilities 16,080 12,350
LONG-TERM LIABILITIES:
--
Long-term loans, net of current maturities 7,186 6,353
Liability in respect of employee rights
upon retirement 3,125 4,226
Long-term deferred tax liability 2,737 1,016
13,048 11,595
EQUITY:
Share capital
Ordinary shares of NIS 0.9 par value -
Authorized: 10,000,000 shares at June 30,
2010 and 2009; Issued and outstanding:
9,073,043 and 8,815,003 shares
respectively at June 30, 2010; 6,552,671
and 6,548,021 shares respectively at June
30, 2009. 2,790 2,204
Additional paid-in capital 64,420 39,730
Accumulated other comprehensive loss (1,149) (1,307)
Treasury stock, at cost, 258,040 and 4,650
shares at June 30, 2010 and 2009,
respectively (2,018) (26)
Retained earnings 31,405 33,150
Total shareholders equity 95,448 73,751
Noncontrolling interest 2,760 27,739
Total equity: 98,208 101,490
Total liabilities and equity $127,336 $125,435
TAT TECHNOLOGIES AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, in thousands, except share and per share data)
Three months ended Six months ended
June 30, June 30
2010 2009 2010 2009
Revenues:
MRO services $ 9,865 $ 11,736 $ 18,819 $ 23,220
OEM - Heat Transfer
products 5,293 7,018 14,193 14,698
OEM - Electric Motion
Systems 3,672 2,278 5,617 6,014
Parts services 2,186 - 4,823
Eliminations (181) (1,786) (1,613) (2,780)
18,649 21,432 37,016 45,975
Cost and operating expenses:
MRO services 7,488 11,228 15,530 20,721
OEM - Heat Transfer
products 4,809 4,803 10,770 9,795
OEM - Electric Motion
Systems 2,638 1,509 4,166 3,823
Parts services - 1,867 - 3,907
Eliminations (578) (1,800) (1,780) (2,817)
14,357 17,607 28,686 35,429
Gross Profit 4,292 3,825 8,330 10,546
Research and
development costs 186 207 327 372
Selling and marketing
expenses 960 1,110 1,666 1,988
General and
administrative expenses 2,684 2,762 5,275 5,705
Relocation Expenses - 122 - 406
3,830 4,201 7,268 8,471
Operating income (loss) 462 (376) 1,062 2,075
Financial expense (699) (473) (1,087) (1,279)
Financial income 315 634 656 1,144
Other income, net 353 144
Income before income taxes 78 138 631 2,084
Income taxes (benefit) 176 (125) 202 616
Net income (loss) (98) 263 429 1,468
Share in results of
affiliated company 213 - 419 -
less: Net loss (income)
attributable to
noncontrolling interest (96) 287 (91) 140
Net income (loss
attributable to
controlling interest $19 $550 $757 $1,608
Basic net income per
share attributable to
controlling interest $0.01 $0..08 $0.09 $0. 24
Diluted net income per
share attributable to
controlling interest $0.01 $0.08 $0.09 $0.24
Weighted average number
of shares - basic 8,815,003 6,548,021 8,815,003 6,550,346
Weighted average number
of shares - diluted 8,815,003 6,549,273 8,816,668 6,551,598
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 operational segments: (i) OEM of Heat Transfer
products (ii) OEM of Electric Motion Systems; and (iii) MRO services, each
with the following characteristics.
TAT's activities in the area of OEM of Heat Transfer products primarily
relate to the (i) design, development, manufacture and sale of 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; and (ii) manufacture and
sale of environmental control and cooling systems 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 OEM of Electric Motion Systems primarily
relate to the design, development, manufacture and sale of a broad range of
electrical motor applications for airborne and ground systems. TAT activities
in this segment commenced with the acquisition of Bental in August 2008.
TAT's MRO services include the remanufacture, overhaul and repair of heat
transfer equipment and other aircraft components, APUs, propellers and
landing gear. TAT's Limco subsidiary operates FAA certified repair stations,
which provide aircraft component MRO services for airlines, air cargo
carriers, maintenance service centers and the military.
TAT also holds 37% in First Aviation Services, a world-wide distributor
of products and services to the aerospace industry and a one-stop-shop for
MRO services (wheels, breaks, propellers and landing gear) for the General
Aviation Industry.
* * * * *
TAT's executive offices are located in the Re'em Industrial Park, Neta
Boulevard, Bnei Ayish, Gedera 70750, Israel, and TAT's telephone number is
972-8-862-8500.
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, 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.
For more information of TAT Technologies, please visit our web-site:
http://www.tat-technologies.com
Contact:
Miri Segal-Scharia Yaron Shalem - CFO
MS-IR LLC TAT Technologies Ltd.
Tel:1-917-607-8654 Tel: 972-8-862-8500
msegal@ms-ir.com yarons@tat-technologies.com
SOURCE TAT Technologies Ltd
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