TAT Technologies Reports Year 2013 Second Quarter Results

          TAT Technologies Reports Year 2013 Second Quarter Results

PR Newswire

GEDERA, Israel, Aug. 27, 2013

GEDERA, Israel, Aug. 27, 2013 /PRNewswire/ --TAT Technologies Ltd. (NASDAQ:
TATT) ("the Company"), 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,
2013.

Financial Highlights:

TAT announced revenues of $21.9 million with a net income of $1.0 million for
the three months ended June 30, 2013, compared to revenues of $22.1 million
with a net loss of $4.2 million for the three months ended June 30, 2012. The
net loss reported for 2012 second quarter was the result of a $1.0 million
impairment charge of goodwill in TAT's OEM for Electric Motion Systems
operating segment and a $3.3 million impairment charge with respect to TAT's
investment in First Aviation Services Inc. ("FAvS"). Excluding the impairment
charges recorded in the second quarter of 2012, net income for the three
months ended June 30, 2013 increased by $0.9 million compared to the same
period in 2012.

During the Second quarter of 2013, revenues were impacted by (i) the increase
in revenues in the MRO Services for Aviation Components operating segment;
(ii) the increase in revenues in the Heat Transfer Services and Products
operating segment; (iii) similar revenues in the OEM of Heat Management
Solutions operating segment; offset by (iv) the decrease in revenues in the
OEM of Electric Motion Systems operating segment. This decrease is a
continuation of the decrease in revenues this segment had experienced during
2012 and 2011.

Revenue breakdown by operating segments for the three month and six month
periods ended June 30, 2013 and 2012, respectively, was as follows:



                             Three Months Ended June 30,
                             2013                 2012                 % of
                             Revenues   % of      Revenues   % of      Change
                             in         Total     in         Total     Between
                             Thousands  Revenues  Thousands  Revenues  Periods
                             Unaudited
Revenues
OEM of Heat Management       $      32.0%     $      31.8%     (0.4)%
Solutions                    7,006               7,036
Heat Transfer Services and   7,466      34.2%     7,104      32.1%     5.1%
Products
MRO services for Aviation    6,168      28.2%     5,636      25.5%     9.4%
Components
OEM of Electric Motion       2,042      9.4%      2,677      12.1%     (23.7)%
Systems
Eliminations                 (821)      (3.8)%    (326)      (1.5)%    151.8%
Total revenues               $      100.0%    $       100.0%    (1.2)%
                             21,861               22,127



                             Six Months Ended June 30,
                             2013                 2012                 % of
                             Revenues   % of      Revenues   % of      Change
                             in         Total     in         Total     Between
                             Thousands  Revenues  Thousands  Revenues  Periods
                             Unaudited            Unaudited
Revenues
OEM of Heat Management       $       31.6%     $       34.4%     (6.8)%
Solutions                    13,722              14,720
Heat Transfer Services and   14,607     33.7%     13,887     32.4%     5.2%
Products
MRO services for Aviation    11,971     27.6%     10,639     24.9%     12.5%
Components
OEM of Electric Motion       3,992      9.2%      4,479      10.5%     (10.9)%
Systems
Eliminations                 (902)      (2.1)%    (921)      (2.2)%    (2.1)%
Total revenues               $      100.0%    $       100.0%    1.4%
                             43,390               42,804



For the six months ended June 30, 2013, TAT announced revenues of $43.4
million with a net income of $2.7 million compared to revenues of $42.8
million with a net loss of $3.6 million for the six months ended June 30,
2012. The net loss reported for the six month period ended June 30, 2012 was
the result of a $1.0 million impairment charge of goodwill in TAT's OEM for
Electric Motion Systems operating segment and a $3.3 million impairment charge
with respect to TAT's investment in FAvS. Excluding the impairment charges
recorded in the second quarter of 2012, net income for the six months ended
June 30, 2013 increased by $2.0 million compared to the same period in 2012.

During the six months ended June 30, 2013, revenues were impacted by (i) the
increase in revenues in the MRO Services for Aviation Components operating
segment; (ii) the increase in revenues in the Heat Transfer Services and
Products operating segment; partially offset by (iii) the decrease in revenues
in the OEM of Heat Management Solutions operating segment; and (iv) the
decrease in revenues in the OEM of Electric Motion Systems operating segment -
As mentioned above, this decrease is a continuation of the decrease in
revenues this segment had experienced during 2012 and 2011.

Mr. Itsik Maaravi, TAT's President & CEO commented:

"2013 Second quarter's trends in the Aerospace and Defense markets were
similar to the trends shown in the beginning of the year. The commercial
airlines markets continue to show an increase in passengers and to a lesser
extent, in cargo air traffic while airlines profitability remains a challenge
due to competitive environment and relatively high fuel prices. In addition,
the MRO business shows steady flow with modest growth and commercial aerospace
OEMs continue to report increasing revenues and backlog. On the other hand
defense companies continue to show weakness and are waiting to understand
uncertainties following budget constraints and sequestration which went into
effect on March 1, 2013.

For TAT, the results of 2013 second quarter reflect the continuation of the
trend of improvement as we increased revenues, gross margins and operating
margins compared to the first quarter of 2013. On a year-to-date basis, the
first half of 2013 reflects higher revenues compared to the first half of 2012
while gross and operating margins were similar. We continue to increase our
marketing and sales efforts and put an emphasis on strengthening our relations
with leading players in the relevant markets, successfully develop new
products for new customers and improving our production efficiency, the
quality of our products and the responsiveness and support to our customers."



TAT TECHNOLOGIES AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except share data)
                                    June 30,       June 30,       December 31,
                                    2013           2012
ASSETS
Current Assets:
Cash and cash equivalents           $        $        $     
                                    21,945        14,158        16,581
Short-term bank deposits            10,013         10,000         10,048
Marketable securities at fair value -              1,900          -
Short-term restricted deposits      -              3,206          2,307
Trade accounts receivable (net of
allowance for doubtful
accounts                            17,969         20,111         20,930
of $368 and $ 436 as of June
30, 2013 and 2012,
respectively)
Other accounts receivable and       3,771          5,207          4,587
prepaid expenses
Inventories, net                    33,494         31,711         33,031
Total current assets                87,192         86,293         87,484
Long-term assets:
Investment in affiliated company    2,362          1,668          1,264
Funds in respect of employee right
upon                                3,514          2,965          3,318
retirement
Long-term deferred tax              1,435          2,787          2,535
Property, plant and equipment, net  13,160         12,141         12,910
Total Long-term assets              20,471         19,561         20,027
Total assets                        $         $          $    
                                    107,663       105,854        107,511


LIABILITIES AND EQUITY
Current Liabilities:
Short term bank loan and current    1,883          3,731          3,274
maturities of long-term loans
Trade accounts payables             6,156          6,649          5,373
Other accounts payable and accrued  6,725          6,021          7,407
expenses
Total current liabilities           14,764         16,401         16,054
Long-term liabilities:
Long-term loans, net of current     82             1,883          1,116
maturities
Other accounts payable              73             85             -
Liability in respect of employee
rights                              4,069          3,540          3,815
upon retirement
Long-term deferred tax liability    863            1,344          1,490
Total long-term liabilities         5,087          6,852          6,421


EQUITY:
Share capital
Ordinary shares of NIS 0.9 par
value –
Authorized: 10,000,000 shares
at
June 30, 2013 and 2012;
Issued:
9,073,043 shares at June 30,   2,790          2,790          2,790
2013
and 2012; Outstanding:
8,798,570 and
8,810,366 shares at June 30,
2013
and 2012, respectively
Additional paid-in capital          64,412         64,402         64,410
Treasury stock, at cost, 274,473
and
262,677 shares at June 30,     (2,088)        (2,038)        (2,088)
2013 and
2012, respectively
Accumulated other comprehensive     (702)          (1,218)        (897)
loss
Retained earnings                   20,745         16,116         18,018
Total TAT Technologies              85,157         80,052         82,233
shareholders' equity
Non controlling interest            2,655          2,549          2,803
Total equity:                       87,812         82,601         85,036
Total liabilities and equity        $         $         $    
                                    107,663       105,854       107,511



TAT TECHNOLOGIES AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, in thousands, except share and per share data)
                        Three months ended    Six months ended      Year ended
                        June 30,              June 30,              December
                                                                    31,
                        2013       2012       2013       2012       2012
Revenues:
OEM of Heat Management  $       $       $        $         $    
Solutions               7,006      7,036      13,722     14,720    31,032
Heat Transfer Services  7,466      7,104      14,607     13,887     27,709
and Product
MRO services for        6,168      5,636      11,971     10,639     22,442
Aviation Components
OEM of Electric Motion  2,042      2,677      3,992      4,479      10,007
Systems
Eliminations            (821)      (326)      (902)      (921)      (3,268)
                        21,861     22,127     43,390     42,804     87,922
Cost and operating
expenses:
OEM of Heat Management  5,498      5,404      10,583     10,990     23,105
Solutions
Heat Transfer Services  5,293      5,020      10,404     10,049     19,671
and Products
MRO services for        5,053      4,163      9,769      8,537      19,044
Aviation Components
OEM of Electric Motion  1,712      2,288      3,673      3,999      8,043
Systems
Eliminations            (862)      (454)      (1,171)    (1,051)    (3,281)
                        16,694     16,421     33,258     32,524     66,582
Gross Profit            5,167      5,706      10,132     10,280     21,340
Research and            215        501        503        675        1,152
development, net
Selling and marketing   928        924        1,814      1,813      3,426
expenses
General and             2,794      2,755      5,458      5,750      11,487
administrative expenses
Other expenses (income) -          (4)        (7)        10         9
Impairment of goodwill -          1,015      -          1,015      1,015
                        3,937      5,191      7,768      9,263      17,089
Operating income        1,230      515        2,364      1,017      4,251
Financial expenses      (262)      (811)      (623)      (1,094)    (2,229)
Financial income        262        428        591        970        2,048
Income before income    1,230      132        2,332      893        4,070
taxes
Taxes on income         452        1,063      935        1,331      2,086
Net income (loss) after 778        (931)      1,397      (438)      1,984
income taxes
Share in results of
affiliated company and  187        (3,312)    1,098      (3,352)    (3,756)
impairment of share in
affiliated company
Net income (loss)       965        (4,243)    2,495      (3,790)    (1,772)
Net loss attributable
to Non controlling      54         44         232        174        58
interest
Net income (loss)
attributable to TAT     $       $        $       $         $   
Technologies            1,019      (4,199)    2,727      (3,616)    (1,714)
shareholders
Earning per share
Basic and diluted net
income (loss) per share $       $       $       $        $  
attributable to         0.12       (0.48)     0.31       (0.41)     (0.19)
controlling interest
Weighted average number
of shares – basic and   8,798,570  8,815,003  8,798,570  8,815,003  8,808,075
diluted

Resignation and Election of Chairman of the Board of Directors

At the meeting of the Board of Directors of the Company, held on August 26,
2013, Mr. Zeev Birnboim has resigned as Chairman of the Board of Directors of
the Company effective immediately. Mr. Birnboim advised the Board that his
resignation was not as a result of any disagreement with the Company. At that
meeting, the Board of Directors of the Company has elected Mr. Samual
Vlodinger as the new Chairman of the Board of Directors, effective
immediately. Mr. Vlodinger is a senior partner with FIMI Opportunity Funds,
the new controlling shareholder of TAT.

Seasonality

In the OEM industry in general and in TAT's OEM businesses in particular, the
majority of customers operate based on annual budgets and tend to utilize
during the fiscal fourth quarter the remaining balance of any un-used budgets.
This trend is more typical with customers from the defense industry.
Accordingly, TAT is more likely to generate increased revenues in the OEM
businesses (such as TAT's OEM of Heat Management Solutions and OEM of Electric
Motion Systems) during the fiscal fourth quarter. The aviation industry is
known for its highest traffic in the third quarter, primarily attributable to
summer vacations. As a result, during the fiscal third quarter, airlines tend
to postpone, to the extent possible, maintenance and repair of their aircraft
to minimize aircraft grounding. Accordingly, TAT is more likely to notice
decreased revenues in the MRO businesses (such as TAT's MRO for Aviation
Components and Heat Transfer Services and Products) during the fiscal third
quarter with recovery during subsequent quarters.

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 or
"OEM" of Heat Management Solutions (ii) OEM of Electric Motion Systems (iii)
Heat Transfer Services and Products and (iv) Maintenance, Repair and Overhaul
or "MRO" services of Aviation Components.

TAT's activities in the area of OEM of Heat Management Solutions primarily
include the design, development, manufacture and sale of (i) 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; (ii) environmental control and
cooling systems on board aircraft and for ground applications; 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
include the design, development, manufacture and sale of a broad range of
electrical motor applications for airborne and ground systems.

TAT's activities in the area of Heat Transfer Services and Products include
the maintenance, repair and overhaul of heat transfer equipment and in a
lesser extent, the manufacturing of certain heat transfer products. TAT's
Limco subsidiary operates FAA certified repair station, which provides heat
transfer MRO services and products 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 maintenance, repair and overhaul of APUs, Landing Gear 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 also holds approximately 30% of the equity of First Aviation Services, 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.

For more information of TAT Technologies, please visit our web-site:
www.tat-technologies.com

Yaron Shalem – CFO
TAT Technologies Ltd.
Tel: 972-8-862-8500
yarons@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, 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.

SOURCE TAT Technologies Ltd.

Website: http://www.tat-technologies.com
 
Press spacebar to pause and continue. Press esc to stop.