TAT Technologies Reports First Quarter 2024 Results
May 22, 2024

TAT Technologies Reports First Quarter 2024 Results

NETANYA, Israel, May 22, 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 period ended March 31, 2024.

Financial highlights for the first quarter of 2024:

Revenues for Q1 2024 increased by 35.3% to $34.1 million compared to $25.2 million in Q1 2023.Gross profit for Q1 2024 increased by 65.1% to $7.1 million compared to $4.3 million in Q1 2023.Gross Margin for Q1 2024 improved by 3.8bp to 20.7% of revenues, compared to 16.9% of revenues in Q1 2023.Adjusted EBITDA for Q1 2024 increased by 76.8% to $3.7 million (10.8% of Revenues) compared to $2.08 million (8.25% of revenues) in Q1 2023.Operating Income for Q1 2024 increased by 133% to $2.2 million (6.5% of Revenues) compared to $0.95 million (3.8% of revenues) in Q1 2023.Net income for Q1 2024 increased by 221% to $2.1 million compared to a net Income of $0.6 million in Q1 2023.Cash flow from Operating activities was negative $3.5 million in Q1 2024 compared to positive $1.7 million in Q1 2023.

Mr. Igal Zamir, TAT’s CEO and President commented on the results: “The first quarter of 2024 marked the seventh straight quarter of Revenue and EBITDA growth, demonstrating consistent demand for our solutions and the sustainability of our business model.

As we grow our business and further scale our capacity to meet near-term demand, we are prioritizing operational efficiency to reduce backorders, better navigate industry wide supply chain dynamics, improve customer satisfaction and maximize our profitability.

During the first quarter we secured orders and long-term agreements at a value of over $40 million, increasing our backlog and LTA Value of over $410 million. This strength will drive continued momentum in our business and support our revenue growth plan for the rest of 2024 and for years to come.”

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
[email protected]

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)

March 31,

December 31,

2024

2023

(unaudited)

(audited)

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$        8,973

$       15,979

Accounts receivable, net of allowance for credit losses of $345

   and $345 thousand as of March 31, 2024 and December 31, 2023 respectively 

20,829

20,009

Restricted deposit   

139

661

Other current assets and prepaid expenses

6,578

6,397

Inventory

53,857

51,280

Total current assets

90,376

94,326

NON-CURRENT ASSETS:

 Restricted deposit

161

302

 Investment in affiliates

2,366

2,168

Funds in respect of employee rights upon retirement

659

664

 Deferred income taxes

1,403

994

Property, plant and equipment, net

41,318

42,554

Operating lease right of use assets

2,911

2,746

Intangible assets, net

1,755

1,823

Total non-current assets

50,573

51,251

Total assets

$                  140,949

$                  145,577

LIABILITIES AND EQUITY

CURRENT LIABILITIES:

Current maturities of long-term loans

$                      1,996

$                      2,200

Credit line from bank

8,027

12,138

Accounts payable

9,288

9,988

Accrued expenses

12,381

13,952

Operating lease liabilities

1,134

1,033

Total current liabilities

32,826

39,311

NON CURRENT LIABILITIES:

    Long-term loans

12,547

12,886

Liability in respect of employee rights upon retirement

1,003

1,000

Operating lease liabilities

1,765

1,697

 Total non-current liabilities

15,315

15,583

Total liabilities

$                48,141

$                54,894

EQUITY:

Share capital

3,141

3,140

Additional paid-in capital

76,376

76,335

Treasury stock at cost

(2,088)

(2,088)

Accumulated other comprehensive income

27

Retained earnings

15,379

13,269

Total shareholders’ equity

92,808

90,683

Total liabilities and shareholders’ equity

$                 140,949

$                 145,577

 

 

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,

2024

2023

2023

(Unaudited)

(Unaudited)

(Audited)

Revenues:

Products

$           11,935

$          7,291

$    35,241

Services

22,153

17,926

78,553

34,088

25,217

113,794

Cost of goods:

Products

8,986

6,274

30,517

Services

18,036

14,685

60,809

27,022

20,959

91,326

Gross Profit

7,066

4,258

22,468

Operating expenses:

Research and development, net

277

99

715

Selling and marketing

1,660

1,159

5,523

General and administrative

3,309

2,459

10,588

Other income

(388)

(406)

(433)

4,858

3,311

16,393

Operating income

2,208

948

6,075

Interest expenses

(343)

(366)

(1,683)

Other financial income (expenses), net

(106)

(19)

353

Income before taxes on income (tax benefit)

1,759

563

4,745

Taxes on income (tax benefit)

(153)

(27)

576

Income before share of equity investment

1,912

590

4,169

Profit of equity investment of affiliated companies

198

68

503

 

Net income

$      2,110

$     658

$     4,672

Basic and diluted income per share

Net income per share basic

$     0.20

 

$     0.074

$    0.52

Net income per share diluted

$    0.19

$     0.074

$       0.51

Weighted average number of shares outstanding :

Basic 

10,378,978

8,911,546

8,961,689

Diluted

10,554,351

8,911,546

9,084,022

 

 

TAT TECHNOLOGIES AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

Three months ended

Year ended

March 31,

December 31,

2024

2023

2023

(Unaudited)

(Unaudited)

(Audited)

Net income

$         2,110

$        658

$     4,672

Other comprehensive income (loss)

Net unrealized losses from derivatives

(27)

–

53

        Total comprehensive income

$        2,083

$        658

$     4,725

 

 

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, 2021

9,149,169

$ 2,809

$       65,871

$            33

$       (2,088)

$       10,159

$  76,784

CHANGES DURING THE YEAR ENDED
DECEMBER 31, 2022:

Comprehensive loss

–

–

–

(59)

–

(1,562)

(1,621)

Exercise of option

36,850

33

156

–

–

–

189

 Share based compensation

–

–

218

–

–

–

218

BALANCE AT DECEMBER 31, 2022

9,186,019

$  2,842

$       66,245

$            (26)

$       (2,088)

$          8,597

$  75,570

CHANGES DURING THE YEAR ENDED

DECEMBER 31, 2023:

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
thousands

1,158,600

290

9,774

–

–

–

10,064

Share based compensation

–

–

159

–

–

–

159

BALANCE AT DECEMBER 31, 2023

10,377,085

$  3,140

$     76,335

$              27

$       (2,088)

$         13,269

$  90,683

CHANGES DURING THE PERIOD ENDED
MARCH 31, 2024 (unaudited):

Comprehensive profit

–

–

–

(27)

–

2,110

2,083

Exercise of option

5,552

1

–

–

–

–

1

Share based compensation

–

–

41

–

–

–

41

BALANCE AT MARCH 31, 2024 (unaudited)

10,382,637

$  3,141

$     76,376

$              0

$       (2,088)

$         15,379

$  92,808

 

 

TAT TECHNOLOGIES AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Three months ended

Year ended

March 31,

December 31,

2024

2023

2023

(Unaudited)

(Unaudited)

(audited)

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss) from continued operations

$     2,110

$     658

$     4,672

Adjustments to reconcile net income (loss) to net cash provided
by (used in) operating activities:

Depreciation and amortization

1,374

1,041

4,710

Loss (gain) from change in fair value of derivatives

22

–

(9)

Change in funds in respect of employee rights upon retirement

5

70

116

Change in operating right of use asset and operating leasing liability

4

(6)

22

Non-cash financial expenses

(214)

(115)

(172)

 Decrease in restructuring plan provision

(20)

(58)

(126)

Change in allowance for credit losses

–

(3)

(182)

Share in results of affiliated  companies

(198)

(68)

(503)

Share based compensation

41

90

159

Liability in respect of employee rights upon retirement

3

(79)

(148)

Capital gain from sale of property, plant and equipment

(354)

(456)

(530)

Deferred income taxes, net

(409)

22

235

Changes in operating assets and liabilities:

    Increase in trade accounts receivable

(820)

(2,012)

(4,205)

    Decrease (increase) in other current assets and prepaid expenses

(181)

 

1,135

(341)

     Decrease (increase) in inventory

(2,637)

2,959

(5,400)

    Decrease in trade accounts payable

(700)

(1,121)

(245)

    Increase (decrease) in accrued expenses and other

(1,573)

(290)

4,202

Net cash provided by (used in) operating activities from
continued operation

$   (3,547)

$   1,767

$      2,255

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from sale of property and equipment

1,306

1,560

2,002

Purchase of property and equipment

(989)

(1,433)

(5,102)

Purchase of intangible assets

–

–

(479)

Net cash used in investing activities from continued operations

$ 317

$127

$ (3,579)

CASH FLOWS FROM FINANCING ACTIVITIES:

Repayments of long-term loans

(440)

(422)

(1,701)

Short-term credit received (repayment) from banks

(4,000)

–

1,000

Proceeds from long-term loans received

–

–

712

Proceeds from issuance of common shares, net

–

–

10,064

Exercise of options

1

–

165

Net cash provided by financing activities from continued operations

$    (4,439)

$   (422)

$     10,240

Net increase (decrease) in cash and cash equivalents and
restricted cash

 

(7,669)

 

1,472

8,916

Cash and cash equivalents and restricted cash at beginning of period

16,942

8,026

8,026

Cash and cash equivalents and restricted cash at the end of period

$       9,273

$      9,498

$     16,942

SUPPLEMENTARY INFORMATION ON INVESTING
ACTIVITIES NOT INVOLVING CASH FLOW:

Additions of operating lease right-of-use assets and operating lease liabilities

345

–

1,345

Reclassification of inventory to property, plant and equipment

60

–

68

Supplemental disclosure of cash flow information:

Interest paid

(442)

–

(1,438)

 

 

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,

2024

2023

2023

Net income (Loss)

$               2,110

$              658

$               4,672

Adjustments:

Taxes on income (tax benefit)

(153)

(27)

576

Financial expense/ (income), net

449

385

1,330

Depreciation and amortization

1,428

1,041

4,902

Share based compensation

41

90

159

Share in results and sale of equity
investment of affiliated companies

(198)

(68)

(503)

Adjusted EBITDA

$              3,677

$             2,079

$              11,136

 

 

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SOURCE TAT Technologies Ltd.

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