TAT Technologies Reports Year 2013 Third Quarter Results

           TAT Technologies Reports Year 2013 Third Quarter Results

PR Newswire

GEDERA, Israel, Nov. 25, 2013

GEDERA, Israel, Nov. 25, 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 nine month periods ended September
30, 2013.

Financial Highlights:

TAT announced revenues of $21.1 million with a net income of $0.8 million for
the three months ended September 30, 2013, compared to revenues of $22.1
million with a net income of $1.8 million for the three months ended September
30, 2012, a decrease of 4.2% in revenues along with a decrease of $1.0 million
in net income.

During the Third quarter of 2013, revenues were impacted by (i) the decrease
in revenues in the OEM of Heat Management Solutions operating segment; (ii)
the decrease in revenues in the MRO Services for Aviation Components operating
segment; (iii) the decrease in revenues in the OEM of Electric Motion Systems
operating segment; partially offset by (iv) the increase in revenues in the
Heat Transfer Services and Products operating segment.

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



                            Three Months Ended September 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      $      34.3%      $      36.2%     (9.4)%
Solutions                   7,250                8,001
Heat Transfer Services and  7,634      36.1%      6,655      30.2%     14.7%
Products
MRO services for Aviation   5,489      26.0%      6,027      27.3%     (8.9)%
Components
OEM of Electric Motion      2,188      10.3%      2,436      11.0%     (10.2)%
Systems
Eliminations                (1,416)    (6.7)%     (1,040)    (4.7)%    36.2%
Total revenues              $      100.0%     $       100.0%    (4.2)%
                            21,145                22,079





                            Nine Months Ended September 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      $       32.5%      $       35.0%     (7.7)%
Solutions                   20,972               22,721
Heat Transfer Services and  22,241     34.5%      20,542     31.7%     8.3%
Products
MRO services for Aviation   17,460     27.0%      16,666     25.7%     4.8%
Components
OEM of Electric Motion      6,180      9.6%       6,915      10.6%     (10.6)%
Systems
Eliminations                (2,318)    (3.6)%     (1,961)    (3.0)%    18.2%
Total revenues              $      100.0%     $       100.0%    (0.5)%
                            64,535                64,883



For the nine months ended September 30, 2013, TAT announced revenues of $64.5
million with a net income of $3.5 million compared to revenues of $64.9
million with a net loss of $1.8 million for the nine months ended September
30, 2012. The net loss reported for the nine month period ended September 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 during 2012, net income for the nine months ended
September 30, 2013 increased by $1.0 million compared to the same period in
2012.

During the nine months ended September 30, 2013, revenues were impacted by (i)
the increase in revenues in the Heat Transfer Services and Products operating
segment; (ii) the increase in revenues in the MRO Services for Aviation
Components operating segment; 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, which is a
continuation of the decrease in revenues this segment had experienced during
2012 and 2011.



TAT TECHNOLOGIES AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except share data)
                                 September 30,    September 30,  December 31,
                                 2013             2012
                                 (unaudited)                     (audited)
ASSETS
Current Assets:
Cash and cash equivalents        $          $        $     
                                 21,732          15,250         16,581
Short-term bank deposits         10,107           10,100         10,048
Marketable securities at fair    -                1,800          -
value
Short-term restricted deposits   -                2,907          2,307
Trade accounts receivable (net
of allowance for doubtful
accounts of $398 and $ 346 as   18,044           19,076         20,930
of September 30, 2013 and 2012,
respectively)
Other accounts receivable and    3,671            4,719          4,587
prepaid expenses
Inventories, net                 33,523           33,835         33,031
Total current assets             87,077           87,687         87,484
Long-term assets:
Investment in affiliated company 2,380            1,804          1,264
Funds in respect of employee     3,620            3,092          3,318
right upon retirement
Long-term deferred tax           1,247            3,076          2,535
Property, plant and equipment,   13,060           12,637         12,910
net
Total Long-term assets           20,307           20,609         20,027
Total assets                     $           $         $    
                                 107,384         108,296        107,511


LIABILITIES AND EQUITY
Current Liabilities:
Short term bank loan and current $         $        $      
maturities of long-term loans    1,305            4,168       3,274
Trade accounts payables          5,598            7,210          5,373
Other accounts payable and       6,413            6,139          7,407
accrued expenses
Total current liabilities        13,316           17,517         16,054
Long-term liabilities:
Long-term loans, net of current  -                1,176          1,116
maturities
Other accounts payable           64               85             -
Liability in respect of employee 4,202            3,599          3,815
rights upon retirement
Long-term deferred tax liability 943              1,428          1,490
Total long-term liabilities      5,209            6,288          6,421


EQUITY:
Share capital
Ordinary shares of NIS 0.9 par
value – Authorized and Issued:
10,000,000 shares and 9,073,043
shares, respectively, at         2,790            2,790          2,790
September 30, 2013 and 2012;
Outstanding: 8,798,570 and
8,805,270 shares at September
30, 2013 and 2012, respectively
Additional paid-in capital       64,414           64,402         64,410
Treasury stock, at cost, 274,473
and 267,773 shares at September  (2,088)          (2,059)        (2,088)
30, 2013 and 2012, respectively
Accumulated other comprehensive  (559)            (1,196)        (897)
loss
Retained earnings                21,535           17,888         18,018
Total TAT Technologies           86,092           81,825         82,233
shareholders' equity
Non controlling interest         2,767            2,666          2,803
Total equity:                    88,859           84,491         85,036
Total liabilities and equity     $           $         $    
                                 107,384         108,296        107,511







TAT TECHNOLOGIES AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share and per share data)
                        Three months ended    Nine months ended     Year ended
                        September 30,         September 30,         December
                                                                    31,
                        2013       2012       2013       2012       2012
                        (unaudited)                                 (audited)
Revenues:
OEM of Heat Management  $       $       $        $         $    
Solutions               7,250      8,001      20,972     22,721    31,032
Heat Transfer Services  7,634      6,655      22,241     20,542     27,709
and Product
MRO services for        5,489      6,027      17,460     16,666     22,442
Aviation Components
OEM of Electric Motion  2,188      2,436      6,180      6,915      10,007
Systems
Eliminations            (1,416)    (1,040)    (2,318)    (1,961)    (3,268)
                        21,145     22,079     64,535     64,883     87,922
Cost and operating
expenses:
OEM of Heat Management  6,207      5,859      16,790     16,849     23,105
Solutions
Heat Transfer Services  5,217      4,697      15,621     14,746     19,671
and Products
MRO services for        4,781      5,161      14,550     13,698     19,044
Aviation Components
OEM of Electric Motion  1,595      1,580      5,268      5,579      8,043
Systems
Eliminations            (1,317)    (1,018)    (2,488)    (2,069)    (3,281)
                        16,483     16,279     49,741     48,803     66,582
Gross Profit            4,662      5,800      14,794     16,080     21,340
Research and            179        164        682        839        1,152
development, net
Selling and marketing   858        783        2,672      2,596      3,426
expenses
General and             2,486      2,504      7,944      8,254      11,487
administrative expenses
Other expenses (income) 4          -          (3)        10         9
Impairment of goodwill -          -          -          1,015      1,015
                        3,527      3,451      11,295     12,714     17,089
Operating income        1,135      2,349      3,499      3,366      4,251
Financial expenses      (225)      (439)      (849)      (1,652)    (2,229)
Financial income        163        399        755        1,488      2,048
Income before income    1,073      2,309      3,405      3,202      4,070
taxes
Taxes on income         250        565        1,185      1,896      2,086
Net income after income 823        1,744      2,220      1,306      1,984
taxes
Share in results of
affiliated company and  18         136        1,116      (3,216)    (3,756)
impairment of share in
affiliated company
Net income (loss)       841        1,880      3,336      (1,910)    (1,772)
Net loss (income)
attributable to Non     (51)       (108)      181        66         58
controlling interest
Net income (loss)
attributable to TAT     $      $       $       $         $   
Technologies            790       1,772      3,517      (1,844)    (1,714)
shareholders
Earning per share
Basic and diluted net
income (loss) per share $      $      $       $        $  
attributable to         0.09       0.20       0.40       (0.21)     (0.19)
controlling interest
Weighted average number
of shares – basic and   8,798,570  8,805,270  8,798,570  8,808,591  8,808,075
diluted



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

Website: http://www.tat-technologies.com
 
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