GEDERA, Israel, March 9, 2022 /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 audited results for the twelve months ended December 31, 2021.
Key Financial Highlights:
- Total revenues for the twelve months ended December 31, 2021, were $78 million compared to $75.3 million for the twelve months ended December 31, 2020, an increase of 3.6%.
- Gross profit for the twelve months ended December 31, 2021, were $11.3 million (14.5% of revenues) compared to $8.4 million (11.2% of revenues) for the twelve months ended December 31, 2020, an increase of 35%. The Gross margin for 2021 without a onetime impact of the restructuring plan was $12.5 million (16% out of revenues). The improvement in gross margin is mainly attribute to government grants that the company received during the year and to cost cutting measures that were taken during the year.
- Adjusted EBITDA for the twelve months ended December 31, 2021, was $3.3 million compared to $1.1 million for the twelve months ended December 31, 2020. An improvement of 296%.
- GAAP net loss from continued operations for the twelve months ended December 31, 2021, was $4 million ($2.2 million without a onetime impact of our restructuring plan) compared to GAAP net loss from continued operations of $3.5 million for the twelve months ended December 31, 2020. A decrease of 62% in net loss from continued operations without a onetime impact of our restructuring plan.
- Cash net of debt for December 31, 2021, was $0.5 million compared to $16.2 million for December 31, 2020. During the years 2020 and 2021, the Company made significant capital investments related to the three large strategic agreements with Honeywell and the restructuring plan.
Mr. Igal Zamir, CEO and President of TAT Technologies stated, "2021 was a unique and challenging year for the aerospace industry and for TAT. While volumes and prospects improved during 2021, volatility and uncertainty continued to be part of our business environment". Mr. Zamir continues: " during 2021 we closed additional two strategic deals with Honeywell for the MRO and lease activity of APU331-500 (which are mainly used in the Boeing 777 fleet) and APU131 (which are mainly used in the Boeing 737 and the Airbus 320 fleets). We are already benefiting from the fruit of the lease activity, and we are building the production infrastructure to be able to provide MRO services for these APUs during 2022. We believe that these deals will consist of a major growth factor for TAT as the aerospace industry will shape up. In parallel we are in the final phase of closing a production facility in Israel reducing our operational foot print to three major facilities with significant cost savings. We continue to ramp up our Heat Exchange capabilities in our Limco facility in Tulsa Oklahoma. We are expecting to see the impact of these strategic transaction in our financial results starting from the second half of 2022".
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, depreciation and amortization, inventory impairment from exit and dismissal activity and customers relationship write off. 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 page 11.
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 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 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.
TAT TECHNOLOGIES AND ITS SUBSIDIARIES | |||||
CONDENSED CONSOLIDATED BALANCE SHEET | |||||
(In thousands) | |||||
December 31, | |||||
2021 | 2020 | ||||
ASSETS | |||||
CURRENT ASSETS: | |||||
Cash and cash equivalents | $ 12,872 | $ 24,128 | |||
Accounts receivable, net of allowance for credit losses of $389 | 13,887 | 11,355 | |||
Inventory, net | 41,003 | 41,223 | |||
Other current assets and prepaid expenses | 4,219 | 2,737 | |||
Total current assets | 71,981 | 79,443 | |||
NON-CURRENT ASSETS: | |||||
Restricted deposit | 343 | 176 | |||
Investment in affiliates | 695 | 771 | |||
Funds in respect of employee rights upon retirement | 1,157 | 1,186 | |||
Deferred income taxes | 1,252 | 566 | |||
Property, plant and equipment, net | 30,462 | 25,737 | |||
Operating lease right of use assets | 3,114 | 6,767 | |||
Intangible assets, net | 1,829 | 1,475 | |||
Total non-current assets |
38,852 |
36,678 | |||
Total assets | $ 110,833 | $ 116,121 | |||
December 31, | ||||||
2021 | 2020 | |||||
LIABILITIES AND EQUITY | ||||||
CURRENT LIABILITIES: | ||||||
Current maturities of long-term loans | $ 691 | $ 1,477 | ||||
Credit line from bank | 6,008 | 3,000 | ||||
Accounts payable | 9,093 | 12,222 | ||||
Accrued expenses | 6,959 | 6,691 | ||||
Operating lease liabilities | 1,169 | 1,614 | ||||
Provision for restructuring plan | 657 | - | ||||
Liabilities belong to discontinued operation | - | 179 | ||||
Total current liabilities | 24,577 | 25,183 | ||||
NON-CURRENT LIABILITIES: | ||||||
Long-term loans | 5,979 | 3,489 | ||||
Liability in respect of employee rights upon retirement | 1,504 | 1,410 | ||||
Operating lease liabilities | 1,989 | 5,758 | ||||
Total non-current liabilities | 9,472 | 10,657 | ||||
COMMITMENTS AND CONTINGENCIES LIABILITIES (NOTE 15) | ||||||
Total liabilities | 34,049 | 35,840 | ||||
EQUITY: | ||||||
Ordinary shares of NIS 0.9 par value: Authorized: 13,000,000 shares at December 31, 2021 and at December | 2,809 | 2,809 | ||||
Additional paid-in capital | 65,871 | 65,711 | ||||
Treasury shares, at cost, 274,473 shares at December 31, 2021 and 2020 | (2,088) | (2,088) | ||||
Accumulated other comprehensive income | 33 | 128 | ||||
Retained earnings | 10,159 | 13,721 | ||||
Total shareholders' equity | 76,784 | 80,281 | ||||
Total liabilities and shareholders' equity | $ 110,833 | $ 116,121 | ||||
TAT TECHNOLOGIES AND ITS SUBSIDIARIES | ||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||
(In thousands, except share and per share data) | ||||||||||||
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Revenue: | ||||||||||||
Products | $ 25,870 | $ 22,739 | $ 25,019 | |||||||||
Services | 52,103 | 52,620 | 72,460 | |||||||||
77,973 | 75,359 | 97,479 | ||||||||||
Cost of revenue: | ||||||||||||
Products | 23,761 | 20,751 | 21,557 | |||||||||
Services | 42,942 | 46,173 | 60,622 | |||||||||
66,703 | 66,924 | 82,179 | ||||||||||
Gross profit | 11,270 | 8,435 | 15,300 | |||||||||
Operating expenses: | ||||||||||||
Research and development, net | 517 | 185 | 113 | |||||||||
Selling and marketing | 5,147 | 4,369 | 4,929 | |||||||||
General and administrative | 8,354 | 7,612 | 7,654 | |||||||||
Other (income) expenses | (468) | 315 | - | |||||||||
Restructuring expenses, net | 1,755 | - | - | |||||||||
15,305 | 12,481 | 12,696 | ||||||||||
Operating income (loss) | (4,035) | (4,046) | 2,604 | |||||||||
Financial expenses | (683) | (999) | (1,270) | |||||||||
Financial income | 143 | 229 | 848 | |||||||||
Income (loss) before taxes on income (tax benefit) | (4,575) | (4,816) | 2,182 | |||||||||
Taxes on income (tax benefit) | (662) | (1,517) | 589 | |||||||||
Income (loss) before share of equity investment | (3,913) | (3,299) | 1,593 | |||||||||
Share in results of equity investment of affiliated companies | (76) | (185) | (132) | |||||||||
Net income (loss) from continued operation | $ (3,989) | $ (3,484) | $ 1,461 | |||||||||
Year ended December 31, | |||||||
2021 | 2020 | 2019 | |||||
Net income (loss) from discontinued operation | $ 427 | $ (1,845) | $ (655) | ||||
Net income (loss) | $ (3,562) | $ (5,329) | $ 806 | ||||
Net income (loss) per sharebasic and diluted from | $ (0.45) | $ (0.39) | $ 0.17 | ||||
Net income (loss) per sharebasic and diluted from | $ 0.05 | $ (0.21) | $ (0.07) | ||||
Net income (loss) per share basic and diluted | $ (0.4) | $ (0.6) | $ 0.1 | ||||
Weighted average number of shares outstanding: | |||||||
Basic and diluted | 8,874,696 | 8,874,696 | 8,874,696 | ||||
TAT TECHNOLOGIES AND ITS SUBSIDIARIES | |||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||
(In thousands) | |||||||||
Year ended December 31, | |||||||||
2021 | 2020 | 2019 | |||||||
Net income (loss) | $ (3,562) | $ (5,329) | $ 806 | ||||||
Other comprehensive income (loss), net | |||||||||
Net unrealized gains (losses) from derivatives | (76) | 232 | 372 | ||||||
Reclassification adjustments for gains from | (19) | (130) | (140) | ||||||
Total other comprehensive income (loss) | $ (95) | $ 102 | $ 232 | ||||||
Total comprehensive income (loss) | $ (3,657) | $ (5,227) | $ 1,038 | ||||||
TAT TECHNOLOGIES AND ITS SUBSIDIARIES | |||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | |||||||||||||||||||||||
(In thousands, except share data) | |||||||||||||||||||||||
Ordinary shares | Accumulated | ||||||||||||||||||||||
Number of | Amount | Additional | other | Treasury | Retained | Total equity | |||||||||||||||||
BALANCE AT DECEMBER 31, 2018 | 9,122,501 | $ 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 | ||||||||||||||||
CHANGES DURING THE YEAR ENDED DECEMBER 31, 2020: | |||||||||||||||||||||||
Comprehensive income (loss) | - | - | - | 102 | - | (5,329) | (5,227) | ||||||||||||||||
Share based compensation | - | - | 138 | - | - | - | 138 | ||||||||||||||||
BALANCE AT DECEMBER 31, 2020 | 9,149,169 | $ 2,809 | $ 65,711 | $ 128 | $ (2,088) | 13,721 | $ 80,281 | ||||||||||||||||
CHANGES DURING THE YEAR ENDED DECEMBER 31, 2021: | |||||||||||||||||||||||
Comprehensive loss | - | - | - | (95) | - | (3,562) | (3,657) | ||||||||||||||||
Share based compensation | - | - | 160 | - | - | - | 160 | ||||||||||||||||
BALANCE AT DECEMBER 31, 2021 | 9,149,169 | $ 2,809 | $ 65,871 | $ 33 | $ (2,088) | 10,159 | $ 76,784 | ||||||||||||||||
TAT TECHNOLOGIES AND ITS SUBSIDIARIES | ||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||
(In thousands) | ||||||
Year ended December 31, | ||||||
2021 | 2020 | 2019 | ||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
Net income (loss) from continued operations | $ (3,989) | $ (3,484) | $ 1,461 | |||
Adjustments to reconcile net income(loss) to net cash provided by (used in) | ||||||
Depreciation and amortization | 4,881 | 4,065 | 4,292 | |||
Gain from change in fair value of derivatives | (19) | (34) | (311) | |||
Non cash finance expense | (73) | 566 | 354 | |||
Lease modification | (1,315) | - | - | |||
Provision for restructuring expenses | 657 | - | - | |||
Change in provision for doubtful accounts | 248 | (8) | 38 | |||
Share in results of affiliated companies | 76 | 185 | 132 | |||
Share based compensation | 160 | 138 | 38 | |||
Liability in respect of employee rights upon retirement | 94 | (341) | (897) | |||
Impairment of intangible assets | - | 298 | - | |||
Impairment of fixed assets | 1,820 | - | - | |||
Capital gain from sale of fixed assets | (468) | - | - | |||
Deferred income taxes, net | (686) | (1,438) | (450) | |||
Government loan forgiveness | (1,442) | - | - | |||
Changes in operating assets and liabilities: | ||||||
Decrease (increase) in trade accounts receivable | (2,934) | 9,472 | (2,037) | |||
Decrease (increase) in other current assets and prepaid expenses | (959) | 310 | 2,500 | |||
Decrease (increase) in inventory | (681) | 1,868 | (5,740) | |||
Increase (decrease) in trade accounts payable | 2,571 | (5,336) | 3,349 | |||
Increase (decrease) in accrued expenses | (218) | (252) | 982 | |||
Increase (decrease) in other long-term liabilities | 8 | (62) | (118) | |||
Net cash provided by (used in) operating activities from continued operation | $ (2,269) | $ 5,947 | $ 3,593 | |||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Investment in affiliated company | - | - | (10) | |||
Proceeds from sale of property and equipment | 1,163 | - | - | |||
Purchase of property and equipment | (16,247) | (3,894) | (3,269) | |||
Purchase of intangible assets | (555) | (1,513) | - | |||
Net cash used in continued investing activities | $ (15,639) | $ (5,407) | $ (3,279) | |||
*Reclassified due to discontinued operation | ||||||
The accompanying notes are an integral part of the consolidated financial statements. | ||||||
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
Short-term credit received from banks | 3,000 | 3,960 | - | |||||||||
Proceeds from long-term loans received | 3,042 | 3,692 | ||||||||||
Net cash provided by continued financing activities | $ 6,042 | $ 7,652 | - | |||||||||
CASH FLOWS FROM DISCONTINUED ACTIVITIES: | ||||||||||||
Net income (loss) from discontinued operation | 427 | (1,845) | (655) | |||||||||
Net cash provided by operating activities | 350 | 1,998 | 484 | |||||||||
Net cash used in investing activities | - | - | (134) | |||||||||
Net cash provided by (used in) discontinued activities | $ 777 | $ 153 | $ (305) | |||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND | (11,089) | 8,345 | 9 | |||||||||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT | 24,304 | 15,959 | 15,950 | |||||||||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF | 13,215 | 24,304 | 15,959 | |||||||||
SUPPLEMENTARY INFORMATION ON INVESTING ACTIVITIES | ||||||||||||
Purchase of property, plant and equipment on credit | $ 199 | $ 6,575 | $ 942 | |||||||||
Additions of operating lease right-of-use assets and operating lease liabilities | $ 399 | $ 1,756 | $ 648 | |||||||||
Classification inventory to fixed assets | $ 829 | - | - | |||||||||
Supplemental disclosure of cash flow information: | ||||||||||||
Interest paid | $ (251) | $ (3) | $ (28) | |||||||||
Income taxes received (paid), net | $ - | $ (3) | $ 673 | |||||||||
*Reclassified due to discontinued operation. | ||||||||||||
TAT TECHNOLOGIES AND ITS SUBSIDIARIES | |||
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA (NON-GAAP) (UNAUDITED) | |||
(In thousands) | |||
December 31, | December 31, | ||
2021 | 2020 | ||
(audited) | (audited) | ||
Net income (loss) | $ (3,562) | $ (5,329) | |
Adjustments: | |||
Share in results of equity investment of affiliated companies | 76 | 185 | |
Taxes on income (tax benefit) | (662) | (1,517) | |
Financial expenses, net | 540 | 770 | |
Exit and disposal activity | - | 765 | |
Depreciation and amortization | 5,420 | 4,259 | |
Net loss (income) from discontinued operation | (427) | 1,845 | |
Share base compensation | 160 | 138 | |
Restructuring expenses | 1,755 | - | |
Adjusted EBITDA | 3,300 | 1,116 | |
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.
For more information of TAT Technologies Ltd., please visit our web-site:
Contact:
Mr. Ehud Ben-Yair
Chief Financial Officer
Tel: 972-8-862-8503
ehudb@tat-technologies.com
SOURCE TAT Technologies Ltd.
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