TAT Technologies Reports results for the Second Quarter of 2022 USA – English – USA – English – PR Newswire
Searching for your content…
In-Language News
Contact Us
888-776-0942
from 8 AM – 10 PM ET
News provided by
Aug 30, 2022, 10:10 ET
Share this article
NETANYA, Israel, Aug. 30, 2022 /PRNewswire/ — TAT Technologies Ltd. (NASDAQ: 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 three month and six-month periods ended June 30, 2022.
Key Financial Highlights:
Thousands USD
Q222
Q221
H122
H121
Revenues
20,775
21,585
40,730
39,945
COGS
16,743
19,847
33,652
34,990
Gross Profit
4,032
1,738
7,078
4,955
GM
19.4 %
8.1 %
17.4 %
12.4 %
R&D & SG&M
4,191
4,258
7,884
7,221
EBITDA
886
(1,330)
1,393
69
Mr. Igal Zamir, TAT’s CEO and President commented on the results: "The financial results of the second quarter of 2022 represent a continuous improvement in our results compared to the previous quarter and compared to the same period in 2021. During Q2 of 2022 we managed to increase revenues, improve our gross profit and gross margin and improve our operational cash flow compared to Q1 of 2022. Part of this improvement is a result of cost cutting measures that are part of our restructuring plan. Global supply chain issues continue to affect our business and results. We continue to make enormous efforts to meet our customers’ needs at a time when demand post the COVID-19 pandemic is picking up, but materials and components availability is still problematic". Mr. Zamir continued: "During this quarter we signed a five-year agreement with one of the world’s largest cargo companies with expected revenues of $50 million over this period. This agreement already contributes revenues and will be part of our growth plan for Q322. We continue to work on other opportunities that may result from the strategic agreements that we signed with Honeywell last year".
Non-GAAP Financial Measures
To supplement the consolidated financial statements presented in accordance with GAAP, the Company also presents 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. 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, discontinued operation, financial (expenses) income, net, depreciation and amortization. Adjusted EBITDA, however, should not be considered as alternative to net income and operating income for the period and may not be indicative of the historic operating results of the Company; nor it is meant to be predictive of potential future results. Adjusted EBITDA is not measure of financial performance under generally accepted accounting principles and may not be comparable to other similarly titled measures for other companies. See reconciliation of Adjusted EBITDA in pages 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.
For more information of TAT Technologies Ltd., please visit our web-site:
www.tat-technologies.com
Contact:
Mr. Ehud Ben-Yair
Chief Financial Officer
Tel: 972-8-862-8503
[email protected]
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)
June 30,
December 31,
2022
2021
(unaudited)
(audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$ 8,336
$ 12,872
Accounts receivable, net
14,490
13,887
Inventory, net
44,220
41,003
Other current assets and prepaid expenses
4,659
4,219
Total current assets
71,705
71,981
NON-CURRENT ASSETS:
Restricted deposit
307
343
Investment in affiliates
1,571
695
Funds in respect of employee rights upon retirement
824
1,157
Deferred income taxes
1,333
1,252
Intangible assets, net
1,727
1,829
Property, plant and equipment, net
35,991
30,462
Operating lease right of use assets
2,954
3,114
Total non-current assets
44,707
38,852
Total assets
$ 116,412
$ 110,833
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities of long-term loans
1,463
$ 691
Credit line from bank
3,017
6,008
Accounts payable
8,062
9,093
Accrued expenses
7,014
6,959
Operating lease liabilities
774
1,169
Provision for restructuring plan
1,114
657
Total current liabilities
21,444
24,577
NON CURRENT LIABILITIES:
Long-term loans
16,533
5,979
Liability in respect of employee rights upon retirement
1,178
1,504
Operating lease liabilities
2,137
1,989
Total non-current liabilities
19,848
9,472
Total liabilities
$ 41,292
$ 34,049
EQUITY:
Share capital
2,820
2,809
Additional paid-in capital
66,038
65,871
Treasury stock at cost
(2,088)
(2,088)
Accumulated other comprehensive income
(115)
33
Retained earnings
8,465
10,159
Total shareholders’ equity
75,120
76,784
Total liabilities and shareholders’ equity
$ 116,412
$ 110,833
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share and per share data)
Three months ended
Six months ended
Year ended
June 30,
December 31,
2022
2021
2022
2021
2021
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Audited)
Revenues:
Products
$ 7,144
$ 8,801
$ 13,463
$ 12,954
$ 25,870
Services
13,631
12,784
27,267
26,991
52,103
20,775
21,585
40,730
39,945
77,973
Cost of goods:
Products
5,826
7,527
11,569
11,138
23,761
Services
10,917
10,905
22,083
22,257
42,942
16,743
18,432
33,652
33,395
66,703
Gross Profit
4,032
3,153
7,078
6,550
11,270
Operating expenses:
Research and development, net
180
136
153
271
517
Selling and marketing
1,517
1,458
2,852
2,663
5,147
General and administrative
2,494
2,309
4,879
3,932
8,354
Other income
(9)
–
(90)
–
(468)
Restructuring expenses
775
1,897
1,703
2,417
1,755
4,957
5,800
9,497
9,283
15,305
Operating loss
(925)
(2,647)
(2,419)
(2,733)
(4,035)
Financial income (expenses), net
508
(257)
574
140
(540)
Income (loss) before taxes on income (tax benefit)
(417)
(2,904)
(1,845)
(2,593)
(4,575)
Taxes on income (tax benefit)
(170)
(140)
(63)
(272)
(662)
Income (loss) before share of equity investment
(247)
(2,764)
(1,782)
(2,321)
(3,913)
Share in results of affiliated companies
115
(26)
88
(38)
(76)
Net income (loss) from continued operation
$ (132)
$ (2,790)
$ (1,694)
$ (2,359)
$ (3,989)
Net income from discontinued operation
–
$ 307
–
$ 463
$ 427
Net loss
$ (132)
$ (2,483)
$ (1,694)
$ (1,896)
$ (3,562)
Basic and diluted income per share
Net income (loss) per share basic and diluted from continued operation
$ (0. 01)
$ (0.31)
$ (0.19)
$ (0.26)
$ (0.45)
Net income per share basic and diluted from discontinued
$ –
$ 0.03
$ –
$ 0.05
$ 0.05
Net income (loss) per share basic and diluted
$ (0.01)
$ (0.28)
$ (0.19)
$ (0.21)
$ (0.4)
Weighted average number of shares outstanding
Basic
8,886,546
8,874,696
8,886,546
8,874,696
8,874,696
Diluted
8,886,546
8,874,696
8,886,546
8,874,696
8,874,696
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
Three months ended
Six months ended
Year ended
June 30,
December 31,
2022
2021
2022
2021
2021
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Audited)
Net loss
$ (132)
$ (2,483)
$ (1,694)
$ (1,896)
$ (3,562)
Other comprehensive income
Net unrealized income from derivatives
(116)
15
(148)
(128)
(76)
Reclassification adjustments for gains (losses)
included in net income and inventory
–
–
–
–
(19)
Total comprehensive income (loss)
$ (248)
$ (2,468)
$ (1,842)
$ (2,024)
$ (3,657)
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, 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
CHANGES DURING THE PERIOD ENDED JUNE
30, 2022 (unaudited):
Comprehensive loss
–
–
–
(148)
–
(1,694)
(1,842)
Exercise of option
11,850
11
56
–
–
–
67
Share based compensation
–
–
111
–
–
–
111
BALANCE AT JUNE 30, 2022 (unaudited)
9,161,019
$ 2,820
$ 66,038
$ (115)
$ (2,088)
8,465
$ 75,120
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three months ended
Six months ended
Year ended
June 30,
December 31,
2022
2021
2022
2021
2021
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Audited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)
$ (132)
$ (2,790)
$ (1,694)
$ (2,359)
$ (3,989)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization
926
1,081
1,899
2,137
4,881
Loss (gain) from change in fair value of derivatives
(9)
(6)
8
(15)
(19)
Provision for doubtful accounts
(45)
42
(45)
42
248
Share in results of equity investment of affiliated Company
(115)
26
(88)
38
76
Share based compensation
62
32
111
58
160
Non cash finance (income) expense
(777)
209
(972)
(331)
(65)
Lease modification
–
–
–
–
(1,315)
Increase (decrease) in provision for restructuring expenses
802
(63)
457
470
657
Liability in respect of employee rights upon retirement
(209)
137
(326)
10
94
Impairment of fixed assets
–
1,800
–
1,800
1,820
Capital gain from sale of fixed assets
(9)
–
(90)
(468)
Deferred income taxes, net
(188)
(144)
(81)
(280)
(686)
Government loan forgiveness
–
–
–
(1,443)
(1,442)
Changes in operating assets and liabilities:
Decrease (increase) in trade accounts receivable
(451)
(1,900)
(1,346)
(3,473)
(2,934)
Decrease (increase) in other current assets and prepaid expenses
(81)
(1,202)
(60)
(1,383)
(959)
Decrease (increase) in inventory
(1,143)
651
(3,365)
1,449
(681)
Increase (decrease) in trade accounts payable
(1,428)
1,484
(892)
1,494
2,571
Increase (decrease) in accrued expenses
161
(256)
119
304
(218)
Net cash provided by operating activities
$ (2,636)
$ (899)
$ (6,365)
$ (1,482)
$ (2,269)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and equipment
9
–
93
–
1,163
Purchase of property and equipment
(3,575)
(1,962)
(7,585)
(9,567)
(16,247)
Purchase of intangible assets
–
(259)
–
(544)
(555)
Cash flows used in investing activities
$ (3,566)
$ (2,221)
$(7,492)
$(10,111)
$ (15,639)
CASH FLOWS FROM FINANCING ACTIVITIES:
Loans and credit line received (repayment) from banks
(261)
–
(3,261)
3,000
3,000
Proceeds from long-term loans received
1,976
–
12,480
3,042
3,042
Exercise of options
–
–
67
–
–
Cash flows provided by financing activities
$ 1,715
$ –
$9,286
$6,042
$ 6,042
Cash flows from discontinued Activities:
Net profit (loss) from discontinued operation
$-
$63
$-
$219
$ 777
Net cash provided by (used in) discontinued activities
$ –
$ 63
$ –
$ 219
$ 777
Net increase (decrease) in cash and restricted cash
(4,487)
(3,057)
(4,571)
(5,332)
(11,089)
Cash and restricted cash at beginning of period
13,131
22,029
13,215
24,304
24,304
Cash and restricted cash at end of period
$ 8,644
$ 18,972
$ 8,644
$ 18,972
$ 13,215
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA (NON-GAAP)
(UNAUDITED)
(In thousands)
Three months ended
Six months ended
Year ended
June 30,
June 30,
December 31,
2022
2021
2022
2021
2021
Net loss
$ (132)
$ (2,483)
$ (1,694)
$ (1,896)
$ (3,562)
Adjustments:
Share in results of equity investment of affiliated companies
(115)
26
(88)
38
76
Taxes on income (tax benefit)
(170)
(140)
(63)
(272)
(662)
Financial expenses (income), net
(508)
257
(574)
(140)
540
Depreciation and amortization
974
1,158
1,998
2,265
5,420
Restructuring expenses
775
1,897
1,703
2,430
1,755
Discontinued operation income
–
(307)
–
(463)
(427)
Share based compensation
62
32
111
58
160
Adjusted EBITDA
$ 886
$ 440
$ 1,393
$ 2,020
$ 3,300
SOURCE TAT Technologies Ltd
Cision Distribution 888-776-0942
from 8 AM – 9 PM ET