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 email@example.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
TAT Technologies Reports Year 2013 Third Quarter Results
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