TAT Technologies Reports Record Results for Fiscal Year 2017

TAT Technologies Reports Record Results for Fiscal Year 2017

Annual Revenue of $106.5 Million Represent an All Time High and Adjusted EBITDA of $9.4 Million Represent the Highest Recorded Since 2009

Revenues grew 5% and 11% in the quarter and year ended December 31, 2017 compared to the comparable period in 2016, respectively

Adjusted EBITDA grew 19% in the year ended December 31, 2017, compared to the year ended December 31, 2016

PR Newswire

GEDERA, Israel, March 27, 2018 /PRNewswire/ -- TAT Technologies Ltd. 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 fourth quarter and year ended December 31, 2017.

Key Financial Highlights:

  • Record revenues of $106.5 million for the year ended December 31, 2017, compared with $95.8 million in the year ended December 31, 2016, an 11% growth. Revenues for the fourth quarter were $26.3 million compared with $25.0 million in the comparable quarter last year, a 5% growth.
  • Adjusted EBITDA for the year ended December 31, 2017 increased to $9.4 million compared with $7.9 million in the year ended December 31, 2016, an increase of 19%. 2017 adjusted EBITDA is the highest recorded adjusted EBITDA since 2009. Adjusted EBITDA for fourth quarter was $1.6 million compared with $3.1 million in the comparable quarter last year.
  • GAAP net income reached $2.4 million, or $0.27 per diluted share in the year ended December 31, 2017, compared with a net income of $0.1 million, or $0.01 per diluted share in the year ended December 31, 2016. GAAP net loss for the fourth quarter was $0.3 million, or $0.03 per diluted share compared with GAAP net income of $1.6 million, or $0.18 per diluted share in fourth quarter of 2016.
  • Non-GAAP net income totaled $2.8 million, or $0.31 per diluted share in the year ended December 31, 2017, compared with non-GAAP net income of $2.8 million, or $0.32 per diluted share in the year ended December 31, 2016, and non-GAAP net loss of $0.2 million, or $0.02 per diluted share in the fourth quarter of 2017 compared with non-GAAP net income of $1.8 million, or $0.20 per diluted share in the fourth quarter of 2016.

Mr. Igal Zamir, CEO and President of TAT Technologies stated, "2017 was a record year for TAT Technologies. Our revenues which grew 11% year over year, reached a record high, while adjusted EBITDA grew 19%, the highest recorded adjusted EBITDA since 2009.  These strong record results serve as yet another proof point of our successful growth strategy and effective operational improvement plan.  We are well positioned in our markets and have a strong balance sheet which together serve as the foundation for our long-term growth. We continue to pursue new growth initiatives, both organic and strategic, which we expect will drive our growth in 2018 and beyond."

Mr. Zamir added, "I would like to take this opportunity to thank all of TAT's employees around the world. Their talent, hard work and dedication are key to our ability to successfully implement our growth strategy and create long term value for 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) share in results of equity investment of affiliated companies. 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.  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 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.

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)





December 31,



December 31,

2017



2016



(unaudited)



(audited)

ASSETS







CURRENT ASSETS:







Cash and cash equivalents

$                   17,514



$                   21,433

Short-term bank deposits

470



964

Accounts receivable, net

25,744



21,572

Other current assets and prepaid expenses

2,363



1,687

Inventory, net

38,630



39,269









Total current assets

84,721



84,925









NON-CURRENT ASSETS:







 Investment in affiliates

1,192



1,019

Funds in respect of employee rights upon retirement

2,779



2,660

 Deferred income taxes

937



896

Intangible assets, net

1,045



1,179

Property, plant and equipment, net

21,321



21,298









Total non-current assets

27,274



27,052









Total assets

$                 111,995



$                 111,977









LIABILITIES AND EQUITY















CURRENT LIABILITIES:







Accounts payable

9,348



8,406

Accrued expenses

8,331



9,836









Total current liabilities

17,679



18,242









NON CURRENT LIABILITIES:







   Other long-term liabilities

146



151

Liability in respect of employee rights upon retirement

3,235



2,994

Deferred income taxes

2,361



1,938









 Total non-current liabilities

5,742



5,083









Total liabilities

23,421



23,325









EQUITY:







Share capital

2,802



2,797

Additional paid-in capital

65,073



64,760

Treasury stock at cost

(2,088)



(2,088)

Accumulated other comprehensive loss

135



(73)

Retained earnings

22,652



23,256

Total shareholders' equity

88,574



88,652









Total liabilities and shareholders' equity

$                 111,995



$                 111,977









 

 

TAT TECHNOLOGIES AND ITS SUBSIDIARIES







CONDENSED CONSOLIDATED STATEMENTS OF INCOME



(In thousands, except share and per share data)









Three months ended



Twelve months ended





December 31,





2017



2016



2017



2016





(Unaudited)



(Unaudited)



(Unaudited)



(Audited)





















Revenues:

















Products

$           8,149



$     7,481



$    36,053



$      30,431



Services

18,148



17,504



70,474



65,363





26,297



24,985



106,527



95,794





















Cost of goods:

















Products

6,096



5,609



28,096



23,788



Services

15,451



13,562



57,987



52,969





21,547



19,171



86,083



76,757



Gross Profit

4,750



5,814



20,444



19,037





















Operating expenses:

















Research and development, net

111



189



731



1,140



Selling and marketing

1,331



1,008



4,974



3,876



General and administrative

2,721



2,631



9,409



10,023



Other loss (income)

26



(117)



53



(138)





4,189



3,711



15,167



14,901



Operating income

561



2,103



5,277



4,136





















Financial expenses, net

(87)



(62)



(338)



(154)





















Income before taxes on income

474



2,041



4,939



3,982





















Taxes on income

677



420



2,333



3,865





















Income (loss) before equity investment

(203)



1,621



2,606



117





















Share in results of affiliated companies

(54)



(4)



(210)



(55)





















Net income (loss)

$           (257)



$          1,617



$      2,396



$      62





















Basic and diluted income (loss) per 

     share



































Net income (loss) per  share (basic and

      diluted)

$        (0.03)



$    0.18



$    0.27



$    0.01





















Weighted average number of shares 

     outstanding

















Basic

8,848,028



8,828,444



8,848,028



8,828,444



Diluted

8,926,023



8,833,226



8,919,912



8,830,764





















 

 

TAT TECHNOLOGIES AND ITS SUBSIDIARIES



CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME



(In thousands)









Three months ended



Twelve months ended





December 31,





2017



2016



2017



2016





(Unaudited)



(Unaudited)



(Unaudited)



(Audited)







































Net income (loss)

$           (257)



$       1,617



$      2,396



$          62



Other comprehensive income

















Net unrealized gains (losses) from derivatives

(141)



(199)



(686)



174



   Reclassification adjustments for gains

       included in net income and inventory

134



(29)



894



(243)



       Total other comprehensive income (loss)

$         (264)



$      1,389



$      2,604



$          (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

Twelve months ended



December 31,



2017

2016

2017



2016

























Reported net income (loss) on GAAP basis

$           (257)

$          1,617

$          2,396



$                     62

Adjustments:











Tax adjustments re non-GAAP

adjustments (1)

-

198

-



2,685

Other expenses (Acquisition related

expenses) 

-

(105)

-



(105)

Share in results of equity investment of

affiliated company

54

4

210



55

  Share based compensation

23

41

174



105

Non-GAAP net income (loss)

$      (180)

$      1,755

$      2,780



$      2,802













Non-GAAP net income (loss) per share

(basic and diluted)

$        (0.02)

$        0.20

$        0.31



$        0.32













Weighted average number of shares

     outstanding











 Basic

8,848,028

8,828,444

8,848,028



8,828,444

 Diluted

8,926,023

8,833,226

8,919,912



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 (audited):































Comprehensive income (loss)



-



-



-



(69)



-



62



(7)



Share based compensation expenses



-



-



105



-



-



-



105



 Exercise of options



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 YEAR ENDED DECEMBER 31, 2017 (unaudited):































Comprehensive income



-



-



-



208



-



2,396



2,604



 Share based compensation expenses



-



-



174



-



-



-



174



 Exercise of options



19,584



5



139



-



-



-



144



 Dividend distributed



-



-



-



-



-



(3,000)



(3,000)



BALANCE AT DECEMBER 31, 2017 (unaudited):



9,122,501



$  2,802



$       65,073



$                     135



$      (2,088)



$     22,652



$      88,574





































 

 

TAT TECHNOLOGIES AND ITS SUBSIDIARIES







CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



(In thousands)











Three months ended



Twelve months ended







December 31,







2017



2016



2017

2016







(Unaudited)



(Unaudited)



(Unaudited)

(Audited)





















CASH FLOWS FROM OPERATING 

     ACTIVITIES:

















Net income (loss) attributable to TAT 

     Technologies Ltd. shareholders



$      (257)



$      1,617



$      2,396

$      62





















Adjustments to reconcile net income to net cash 

     provided by operating activities:



































Depreciation and amortization



1,005



976



3,941

3,636



Loss on sale of  property, plant and equipment



26



30



54

12



Interest from short-term bank deposits and 

     restricted deposits



(6)



(13)



(6)

(24)



 Loss (gain) from change in fair value of

derivatives



(387)



18



(490)

(152)



Provision for doubtful accounts



283



(82)



321

(29)



Share in results of equity investment of affiliated 

     Company 



54



4



210

55



Share based compensation



23



41



174

105



Liability in respect of employee rights upon 

     retirement



(119)



63



241

123



Deferred income taxes, net



325



(143)



382

1,670



Changes in operating assets and liabilities:

















   Decrease (increase) in trade accounts receivable



(23)



1,149



(4,493)

(2,392)



   Decrease in other current assets and prepaid 

     expenses



1,626



1,456



488

1,487



Decrease (increase) in inventory



(1,109)



(1,340)



210

(2,707)



    Increase (decrease) in trade accounts payable



(857)



(187)



578

1,192



    Increase (decrease) in  accrued expenses



(421)



1,163



(1,505)

2,521



    Increase (decrease) in other long-term liabilities



(17)



85



(5)

(38)



Net cash provided by operating activities



$      146



$      4,837



$      2,496

$      5,521





















CASH FLOWS FROM INVESTING 

     ACTIVITIES:

















Investment in affiliated company



-



(516)



(383)

(905)



Funds in respect of employee rights upon 

     retirement



(59)



(73)



(156)

2



Proceeds from sale of property and equipment



-



(1)



-

17



Purchase of property and equipment



(888)



(1,041)



(3,520)

(5,702)



Maturities of short-term deposits



-



-



500

7,182



Cash flows provided by (used in) investing 

     activities



$   (947)



$   (1,631)



$   (3,559)

$         594





















CASH FLOWS FROM FINANCING 

     ACTIVITIES:

















Realization of contingency



-



-



-

(500)



Payment of cash dividend



-



-



(3,000)

(3,000)



 Exercise of options



-



-



144

130



Cash flows used in financing activities



$             -



$             -



$   (2,856)

$   (3,370)





















Net increase (decrease) in cash and cash 

     equivalents



(801)



3,206



(3,919)

2,745





















Cash and cash equivalents at beginning of 

     period



18,315



18,227



21,433

18,688





















Cash and cash equivalents at end of period



$    17,514



$    21,433



$    17,514

$    21,433





















 

 

TAT TECHNOLOGIES AND ITS SUBSIDIARIES







RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA (NON-GAAP) 



(UNAUDITED)



(In thousands)









Three months ended

Twelve months ended







December 31,







2017

2016

2017

2016



























Net income (loss)

$         (257)

$         1,617

$         2,396

$             62



Adjustments:











Share in results of equity investment 

     of affiliated companies

54

4

210

55



Taxes on income

677

420

2,333

3,865



Financial expenses, net

87

62

338

154



Depreciation and amortization

1,005

976

3,941

3,636



Share based compensation

23

41

174

105



Adjusted EBITDA

$         1,589

$         3,120

$       9,392

$      7,877















 

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

 

 

 

Cision View original content:http://www.prnewswire.com/news-releases/tat-technologies-reports-record-results-for-fiscal-year-2017-300620530.html

SOURCE TAT Technologies Ltd

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