Press Release
|
Source: TAT Technologies Limited
|
TAT Technologies Reports
Fourth Quarter 2008 Results
Thursday March 12 , 2009 15:00 pm ET
GEDERA, Israel, March.
12
/PRNewswire-FirstCall/ TAT Technologies Ltd. (NASDAQ:
TATTF
News
), reported today its results for the three and twelve month periods ended
December 31, 2008.
TAT Technologies Ltd. (TAT), directly
and through its subsidiaries, provides a variety of services and products to the aerospace
industry, such as the manufacture, maintenance and repair of 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; other environmental control and cooling systems and a variety of other
electronic and mechanical aircraft accessories.
TAT announced net income of $784,000
on revenues of $31.1 million for the three months ended December 31, 2008 compared to net
income of $1.4 million on revenues of $19.8 million for the three months ended December
31, 2007. For the twelve months ended December 31, 2008, TAT announced net income of $4.3
million on revenues of $103.3 million compared to net income of $32.0 million and revenues
of $88.7 million for the same period ended December 31, 2007.
Whereas the 2008 period benefited
from significant increased revenues offset by declining margins, the 2007 period benefited
from the capital gain of $26.4 million that the company recorded in connection with the
July 2007 IPO of its 62% held subsidiary, Limco-Piedmont Inc.
Revenues from the companys
three principal lines of business for the three and twelve month periods ended December
31, 2008 and 2007 were as follows:
|
Three Months Ended December 31,
|
|
2008
|
2007
|
|
Revenues
|
% of Total Revenues
|
Revenues
|
% of Total Revenues
|
|
In Thousands
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MRO Services
|
|
|
$
|
14,012
|
|
|
44.9
|
%
|
$
|
11,515
|
|
|
58.3
|
%
|
OEM products
|
|
|
|
15,084
|
|
|
48.4
|
%
|
|
6,094
|
|
|
30.8
|
%
|
Parts Services
|
|
|
|
3,929
|
|
|
12.6
|
%
|
|
3,362
|
|
|
17.0
|
%
|
Elimination
|
|
|
|
(1,882
|
)
|
|
(5.9
|
)%
|
|
(1,220
|
)
|
|
(6.1
|
)%
|
Total Revenues
|
|
|
|
31,143
|
|
|
100.0
|
%
|
|
19,751
|
|
|
100.0
|
%
|
|
|
|
|
|
|
Year Ended December 31,
|
|
2008
|
2007
|
|
Revenues
|
% of Total Revenues
|
Revenues
|
% of Total Revenues
|
|
In Thousands
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MRO Services
|
|
|
$
|
54,276
|
|
|
52.5
|
%
|
$
|
49,392
|
|
|
55.7
|
%
|
OEM products
|
|
|
|
37,696
|
|
|
36.4
|
%
|
|
23,489
|
|
|
26.4
|
%
|
Parts Services
|
|
|
|
17,289
|
|
|
16.7
|
%
|
|
20,384
|
|
|
23.0
|
%
|
Elimination
|
|
|
|
(5,973
|
)
|
|
(5.6
|
)%
|
|
(4,561
|
)
|
|
(5.1
|
)%
|
Total Revenues
|
|
|
|
103,288
|
|
|
100.0
|
%
|
|
88,704
|
|
|
100.0
|
%
|
The 58% and 16% increases in revenues
for the three and twelve month periods ended December 31, 2008 compared with the same
periods of December 31, 2007, respectively, reflect increased revenues in the OEM segment
due to organic growth as well as revenues from the consolidation of the companys 70%
controlled subsidiary, Bental Industries Ltd commencing August 18, 2008 ; increased
revenues in the MRO segment offset by a moderate decrease of revenues in the Parts
segment.
The decrease in net income for the
twelve month period ended December 31, 2008 compared with the twelve month period ended
December 31, 2007,is primarily attributable to the $26.4 million capital gain recorded in
connection with the IPO of the companys 62% held subsidiary, Limco-Piedmont Inc. in
July 2007. Also impacting net income was (i) a one time compensation charge of
approximately $1.2 million arising from the previously announced retirement of certain
managers; (ii) the decline in the exchange rate between the U.S. dollar and the Israeli
Shekel that resulted in increased operational expenses; and (iii) the decrease in the net
profit of Limco-Piedmont from $5.2 million in the twelve month periods ended December 31,
2007 to $2.7 million in the twelve month periods ended December 31, 2008. These factors
were offset by improved results for the Companys operations in Israel for the three
and twelve month periods ended December 31, 2008 compared with those of December 31, 2007.
Dr.
Shmuel Fledel, TATs CEO commented: The fourth quarter and Year ended
December 31, 2008 saw encouraging revenue growth for the TAT group, compared to
the same periods ended December 31, 2007. We have experienced a decrease in our
gross margins, and consequently we are taking aggressive actions to manage costs
through the weakness that is developing in the aviation industries.
We are pursuing initiatives
with new customers for 2009 and looking positively towards the coming years. The expense
control measures we have taken, including the consolidation of our two US based operating
entities in one location, will contribute to improved earnings going forward. We believe
that our business opportunities, along with anticipated expense control and improvement in
operational performance should give us the ability to realize an improved 2009.
About TAT Technologies
Ltd.
TAT Technologies Limited provides a
variety of services and products to the aerospace industry under three operational
segments: (i) OEM products (ii) MRO services and (iii) parts, each with the following
characteristics:
Our OEM activities primarily relate
to the (i) design, development, manufacture and sale of 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) manufacture and sell other environmental control and cooling systems and a variety of
other electronic and mechanical aircraft accessories and systems such as pumps, valves,
power systems and turbines; and (iii) design, development, manufacture and sale of a broad
range of electrical motor applications for airborne and ground systems
Our MRO services include the
remanufacture, overhaul and repair of heat transfer equipment and other aircraft
components, APUs, propellers and landing gear. Our Limco-Piedmont subsidiary operates four
FAA certified repair stations, which provide aircraft component MRO services for airlines,
air cargo carriers, maintenance service centers and the military.
Our parts segment focuses on the sale
of APU parts propellers and landing gear. We offer parts services for commercial, regional
and charter airlines and business aircraft owners.
Safe Harbor for
Forward-Looking Statements
This press release contains
forward-looking statements that are subject to risks and uncertainties. Factors that could
cause actual results to differ materially from these forward-looking statements include,
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 Companys filings with the Securities and Exchange
Commission. 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. Shareholders 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
SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
|
December 31,
2008
|
December 31,
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
Cash and cash equivalents
|
|
|
$
|
33,908
|
|
$
|
15,114
|
|
Short-term investments
|
|
|
|
11,300
|
|
|
28,806
|
|
|
|
|
Accounts receivable (net of allowance for doubtful accounts
|
|
|
of $154 and $155 at December 31, 2008 and December 31, 2007, respectively)
|
|
|
|
22,086
|
|
|
14,679
|
|
Inventories
|
|
|
|
34,884
|
|
|
28,189
|
|
Other accounts receivable and prepaid expenses
|
|
|
|
6,536
|
|
|
4,047
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
|
108,714
|
|
|
90,835
|
|
|
|
|
Funds in respect of employee right upon retirement
|
|
|
|
3,705
|
|
|
4,156
|
|
Property, plant and equipment, net
|
|
|
|
15,187
|
|
|
11,927
|
|
Intangible assets, net
|
|
|
|
2,195
|
|
|
1,709
|
|
Goodwill
|
|
|
|
5,998
|
|
|
4,780
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
$
|
135,799
|
|
$
|
113,407
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
Current Liabilities:
|
|
|
Current maturities of long-term loans
|
|
|
|
150
|
|
Accounts payables
|
|
|
|
10,585
|
|
|
7,067
|
|
Other accounts payable and accrued expenses
|
|
|
|
7,363
|
|
|
4,310
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
|
18,098
|
|
|
11,377
|
|
|
|
|
|
|
|
|
|
LONG-TERM LIABILITIES:
|
|
|
Fair value of Call options to minority
|
|
|
|
2,183
|
|
|
-
|
|
Long-term loans, net of current maturities
|
|
|
|
5,188
|
|
|
-
|
|
Liability in respect of employee rights upon retirement
|
|
|
|
4,468
|
|
|
4,175
|
|
Long-term deferred tax liability
|
|
|
|
1,087
|
|
|
581
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,926
|
|
|
4,756
|
|
|
|
|
|
|
|
|
|
Minority interest
|
|
|
|
28,700
|
|
|
24,481
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY:
|
|
|
Share capital
|
|
|
Ordinary shares of NIS 0.9 par value - Authorized: 10,000,000
|
|
|
shares at December 31, 2008 and 2007; Issued and outstanding:
|
|
|
6,552,671 shares and 6,542,671 shares at December 31, 2008 and 2007, respectively
|
|
|
2007, respectively
|
|
|
|
2,204
|
|
|
2,201
|
|
Additional paid-in capital
|
|
|
|
39,476
|
|
|
39,308
|
|
Accumulated other comprehensive loss
|
|
|
|
(763
|
)
|
|
-
|
|
Retained earnings
|
|
|
|
35,158
|
|
|
31,284
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY:
|
|
|
|
76,075
|
|
|
72,793
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity
|
|
|
$
|
135,799
|
|
$
|
113,407
|
|
|
|
|
|
|
TAT TECHNOLOGIES AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
(in thousands, except per share data)
|
Three months ended
December 31,
|
Year ended
December 31,
|
|
2008
|
2007
|
2008
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MRO services
|
|
|
$
|
14,012
|
|
$
|
11,515
|
|
$
|
54,276
|
|
$
|
49,392
|
|
OEM products
|
|
|
|
13,202
|
|
|
4,874
|
|
|
31,723
|
|
|
18,928
|
|
Parts services
|
|
|
|
3,929
|
|
|
3,362
|
|
|
17,289
|
|
|
20,384
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31,143
|
|
|
19,751
|
|
|
103,288
|
|
|
88,704
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost and operating expenses
|
|
|
|
|
|
Cost of revenue
|
|
|
|
25,209
|
|
|
15,058
|
|
|
80,563
|
|
|
65,207
|
|
Selling and marketing
|
|
|
|
901
|
|
|
902
|
|
|
4,369
|
|
|
3,719
|
|
General and administrative
|
|
|
|
3,689
|
|
|
2,958
|
|
|
12,407
|
|
|
10,995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
1,344
|
|
|
833
|
|
|
5,949
|
|
|
8,783
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income(expense) net
|
|
|
|
318
|
|
|
506
|
|
|
1,173
|
|
|
701
|
|
Loss on sale of investments
|
|
|
|
(236
|
)
|
|
-
|
|
|
(236
|
)
|
|
|
|
Other income, net
|
|
|
|
|
|
|
(57
|
)
|
|
-
|
|
|
26,478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes and minority
|
|
|
interest
|
|
|
|
1,426
|
|
|
1,282
|
|
|
6,886
|
|
|
35,962
|
|
|
|
|
Provision for income taxes
|
|
|
|
421
|
|
|
(412
|
)
|
|
1,794
|
|
|
3,212
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before minority interest
|
|
|
|
1,005
|
|
|
1,694
|
|
|
5,092
|
|
|
32,750
|
|
|
|
|
Share in result of affiliated company
|
|
|
prior to its consolidation
|
|
|
|
|
|
|
-
|
|
|
674
|
|
|
-
|
|
Minority interest income
|
|
|
|
(221
|
)
|
|
(303
|
)
|
|
(1,500
|
)
|
|
(771
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
784
|
|
$
|
1,391
|
|
$
|
4,266
|
|
$
|
31,979
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per share
|
|
|
$
|
0.12
|
|
$
|
0.21
|
|
$
|
0.65
|
|
$
|
5.041
|
|
|
|
|
Diluted net income per share
|
|
|
$
|
0.12
|
|
$
|
0.21
|
|
$
|
0.65
|
|
$
|
4.99
|
|
|
|
|
Weighted average number of shares -
|
|
|
basic
|
|
|
|
6,554,504
|
|
|
6,542,671
|
|
|
6,546,055
|
|
|
6,344,041
|
|
|
|
|
Weighted average number of shares -
|
|
|
diluted
|
|
|
|
6,559,587
|
|
|
6,558,689
|
|
|
6,566,249
|
|
|
6,407,504
|
|
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
TAT TECHNOLOGIES LTD.
(Registrant)
By: /s/ Shmuel Fledel
Shmuel Fledel
Chief Executive Officer
|
Date: March 12, 2009
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