TAT TECHNOLOGIES LTD. GEDERA, Israel, Feb. 24, 2016 /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 unaudited results for the year ended December 31, 2015.
Financial Highlights for the fourth quarter of 2015 (unaudited):
-- Total Revenue: $21.7 million compared to $21.4 million in the fourth
quarter of 2014.
-- Operating income: $2.9 million compared to $2.2 million in the fourth
quarter of 2014.
-- Net income: $3 million compared to $1.2 million in the fourth quarter of
2014.
-- Earnings per share basic and diluted: $0.34 per share compared to $0.13
per share in the fourth quarter of 2014.
Financial Highlights for 2015 (unaudited):
-- Total Revenue: $85.6 million compared to $80.7 million in 2014.
-- Operating income: $5.6 million compared to $3.8 million in 2014.
-- Net income: $5.8 million compared to $1.4 million in 2014.
-- Earnings per share basic and diluted: $0.66 per share compared to $0.16
per share in 2014.
-- Cash and cash equivalents and short-term bank deposits: During 2015, the
cash balance decreased in $ 1.2 million, from $28 million as of December
31, 2014 to $26.8 million as of December 31, 2015. Net cash provided by
operating activities during the period was $0.7 million.
-- Chromalloy Israel Ltd. acquisition: On Oct 19, 2015, the Company
announced that it has completed the acquisition of Chromalloy Israel
Ltd. The Company has included Chromalloy Israel's financial results in
its consolidated financial statements as of the date of closing.The
transaction resulted in $ 4.8 million gain on bargain purchase.Following
the completion of the transaction, Chromalloy Israel has changed its
name to Turbochrome Ltd. $1.9 million of the Company's revenue for the
fourth quarter of 2015 is due to consolidation of Turbochrome's
financial results for the first time following its acquisition by the
Company.
-- Long-Term Projects: During a periodic assessment of its long-term
projects, the Company updated its estimates of profits expected to be
earned from several long-term contracts. This assessment resulted in a
decrease in revenues for the year ended December 31, 2015 in an amount
of $2.1 million and a decrease of $1.4 million in net income for the
same period.
-- New JV in Russia: The Company has recently announced that it has signed
an agreement with Engineering Holding of Moscow, Russia, to establish a
new maintenance facility for heat exchangers. The new company,
TAT-Engineering LLC, will be based in Novosibirsk's Tolmachevo airport.
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) Heat Transfer Services and Products (iii) Maintenance, Repair and Overhaul or "MRO" services of Aviation Components and (iv) overhaul and coating of certain jet engine 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 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's activities in the area of jet engine overhaul includes the overhaul and coating of jet engine components, including turbine vanes and blades, fan blades, variable inlet guide vanes, afterburner flaps and other components.
For more information of TAT Technologies Ltd., please visit our web-site:
www.tat-technologies.com
Guy Nathanzon - CFO
TAT Technologies Ltd.
Tel: 972-8-862-8500
guyn@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, 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)
-------------
December 31, December 31,
2015 2014
---- ----
(unaudited) (Revised)
ASSETS
Current Assets:
Cash and cash equivalents $18,688 $22,894
Short-term bank deposits 8,122 5,089
Accounts receivable-trade
(net of allowance for
doubtful accounts of $331
as of December 31, 2015 and
$125 as of December 31,
2014) 19,151 15,657
Other accounts receivable
and prepaid expenses 3,025 2,604
Inventories, net 36,664 35,477
------ ------
Total current assets 85,650 81,721
------ ------
Long-term assets:
Investment in an affiliated
company - 2,556
Investment in investee
company 169 -
Funds in respect of employee
rights upon retirement 2,626 2,496
Long-term deferred tax 890 879
Property, plant and
equipment, net 18,934 11,524
Intangible assets, net 1,314 -
----- ---
Total Long-term assets 23,933 17,455
------ ------
Total assets $109,583 $99,176
======== =======
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payables trade 7,022 5,886
Other accounts payable and
accrued expenses 7,815 5,060
----- -----
Total current liabilities 14,837 10,946
Long-term liabilities:
Other accounts payable 189 34
Liability in respect of
employee rights upon
retirement 2,871 2,655
Long-term deferred tax
liability 262 -
Total long-term liabilities 3,322 2,689
----- -----
Total liabilities 18,159 13,635
------ ------
EQUITY:
Share capital 2,793 2,793
Additional paid-in capital 64,529 64,491
Treasury stock at cost (2,088) (2,088)
Accumulated other
comprehensive loss (4) -
Retained earnings 26,194 20,345
------ ------
Total equity 91,424 85,541
Total liabilities and equity $109,583 $99,176
======== =======
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share data)
Three months ended Twelve months ended
------------------ -------------------
December 31,
------------
2015 2014 2015 2014
---- ---- ---- ----
(unaudited) (unaudited) (unaudited)
(Revised) (Revised)
Revenues:
Products $8,359 $8,348 $31,339 $31,363
Services 13,344 13,037 54,268 49,363
------ ------ ------ ------
21,703 21,385 85,607 80,726
------ ------ ------ ------
Cost of goods:
Products 5,875 5,891 24,466 23,616
Services 13,530 10,329 47,476 40,906
------ ------ ------ ------
19,405 16,220 71,942 64,522
------ ------ ------ ------
Gross Profit 2,298 5,165 13,665 16,204
----- ----- ------ ------
Operating expenses:
Research and
development, net 320 185 890 1,070
Selling and
marketing 773 788 2,903 3,203
General and
administrative 2,488 2,024 8,469 8,123
Other expenses
(income) 631 - 631 (11)
Gain on bargain
purchase (4,833) - (4,833) -
------ --- ------ ---
(621) 2,997 8,060 12,385
---- ----- ----- ------
Operating income 2,919 2,168 5,605 3,819
----- ----- ----- -----
Financial expenses,
net (117) (511) (349) (1,294)
---- ---- ---- ------
Income before taxes
on income 2,802 1,657 5,256 2,525
Taxes on income (455) 550 644 1,360
---- --- --- -----
Net income after
taxes on income 3,257 1,107 4,612 1,165
Share in results and
sale of equity
investment of
affiliated company (254) 45 1,237 267
Net income $3,003 $1,152 $5,849 $1,432
====== ====== ====== ======
Basic and diluted income per share
Net income per
share $0.34 $0.13 $0.66 $0.16
===== ===== ===== =====
Weighted average number of shares outstanding
Basic 8,808,344 8,808,344 8,808,344 8,808,344
Diluted 8,813,533 8,811,824 8,810,689 8,826,542
========= ========= ========= =========
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
Three months ended Twelve months ended
------------------ -------------------
December 31,
------------
2015 2014 2015 2014
---- ---- ---- ----
(unaudited) (unaudited) (unaudited)
(Revised) (Revised)
Net income $3,003 $1,152 $5,849 $1,432
Other comprehensive income
Foreign currency translation
adjustments - - - 429
Net unrealized losses from
derivatives (4) - (4) -
--- --- --- ---
Total other comprehensive income $2,999 $1,152 $5,845 $1,861
------ ------ ------ ------
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 Amount Additional other Treasury Retained
earnings Non- Total equity
shares issued paid-in comprehensive shares controlling
capital income (loss) interest
---
BALANCE AT DECEMBER 31, 2012
(audited) 9,073,043 $2,790 $64,410 $(897) $(2,088) $18,111 $2,803 $85,129
CHANGES DURING THE YEAR ENDED DECEMBER 31, 2013 (audited):
Comprehensive income (loss) - - - 468 - 2,802 (842) 2,428
Share based compensation
expenses - - 3 - - - - 3
Exercise of options 6,666 2 41 - - - - 43
----- --- --- --- --- --- --- ---
BALANCE AT DECEMBER 31, 2013
(audited) 9,079,709 $2,792 $64,454 $(429) $(2,088) $20,913 $1,961 $87,603
CHANGES DURING THE YEAR ENDED DECEMBER 31, 2014 (audited):
Comprehensive income - - - 429 - 1,432 - 1,861
Share based compensation
expenses - - 38 - - - - 38
Exercise of option 3,108 1 (1) - - - - -
Dividend distributed - - - - - (2,000) - (2,000)
Sale of subsidiary - - - - - - (1,961) (1,961)
--- --- --- --- --- --- ------ ------
BALANCE AT DECEMBER 31, 2014
(audited) 9,082,817 $2,793 $64,491 $ - $(2,088) $20,345 $ - $85,541
CHANGES DURING THE YEAR ENDED DECEMBER 31, 2015 (unaudited):
Comprehensive income (loss) - - - (4) - 5,849 - 5,845
Share based compensation
expenses - - 38 - - - - 38
--- --- --- --- --- --- --- ---
BALANCE AT DECEMBER 31, 2015
(unaudited) 9,082,817 $2,793 $64,529 $(4) $(2,088) $26,194 $ - $91,424
========= ====== ======= === ======= ======= ============= =======
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three months ended Twelve months ended
------------------ -------------------
December 31,
------------
2015 2014 2015 2014
---- ---- ---- ----
(unaudited) (unaudited) (unaudited)
(Revised) (Revised)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $3,003 $1,152 $5,849 $1,432
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation 891 526 2,781 2,069
Exchange differentials
of loans - - - (1)
Gain on sale of property
and equipment - 17 - 10
Interest from short-
term bank deposits and
restricted deposits (13) (59) (33) (128)
Loss from change in fair
value of derivatives 10 - 10 -
Provision for doubtful
accounts 62 - 206 -
Share in results and
sale of equity
investment of
affiliated company 254 (45) (1,237) (267)
Share based compensation
expenses 12 10 38 38
Gain on bargain purchase (4,833) - (4,833) -
Liability in respect of
employee rights upon
retirement (25) (373) 28 (485)
Deferred income taxes,
net (693) 1,496 (21) 1,229
Changes in operating assets and liabilities:
Amounts due to related
parties, net - - - 5
Decrease (increase) in
trade accounts
receivable 1,528 (1,352) (2,375) 2,730
Decrease (increase) in
other accounts
receivable, prepaid
expenses and other 191 1,505 (85) (833)
Increase in inventories,
net (153) (4,605) (571) (6,009)
Increase (decrease) in
trade accounts payable 1,237 1,606 436 (509)
Increase (decrease) in
other accounts payable
and accrued expenses (527) (1,972) 525 (715)
Increase (decrease) in
other long-term
liabilities (10) (6) 15 (24)
Net cash provided by
(used in) operating
activities $934 $(2,100) $733 $(1,458)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of
subsidiary (A) - - - 2,176
Acquisitions of
subsidiary, net of cash
acquired (B) (1,796) - (1,796) -
Proceeds from sale of equity investment of affiliated
company - 3,624 -
Funds in respect of
employee rights upon
retirement 69 272 8 352
Proceeds from sale of property and equipment 12 9 19
Purchase of property and
equipment (871) (787) (3,315) (3,021)
Investments in short-
term deposits (3,000) - (3,000) -
Maturities of short-
term deposits - 5,098 - 5,098
--- ----- --- -----
Cash flows provided by
(used in) investing
activities $(5,598) $4,595 $(4,470) $4,624
Cash flows used in
financing activities $(469) $ - $(469) $(2,909)
----- ---------------- ----- -------
Net increase (decrease)
in cash and cash
equivalents (5,133) 2,495 (4,206) 257
Cash and cash
equivalents at
beginning of period 23,821 20,399 22,894 22,637
Cash and cash
equivalents at end of
period $18,688 $22,894 $18,688 $22,894
------- ------- ------- -------
(A) Proceeds from sale of subsidiary
-------------------------------------
Assets held for sale
(excluding cash in the
amount of $2,823) - - - 7,136
Liabilities held for
sale - - - (3,428)
Non-controlling interest - - - (1,532)
--- --- --- ------
$ - $ - $ - $2,176
------------ ------------ ------------ ------
(B) Acquisitions of subsidiary
--------------------------------
Assets (excluding cash
in the amount of
$1,164) (10,876) - (10,876) -
Liabilities 4,247 - 4,247 -
Gain on bargain purchase 4,833 - 4,833 -
----- --- ----- ---
$(1,796) $ - $(1,796) $ -
------- ------------ ------- ------------
Additional comments:
1. During November 2015, the FASB issued ASU 2015-17, Balance Sheet
Classification of Deferred Taxes, which simplifies the presentation of
deferred income taxes. ASU 2015-17 provides presentation requirements to
classify deferred tax assets and liabilities as noncurrent in a
classified statement of financial position. The standard is effective for
fiscal years beginning after December 15, 2016, including interim periods
within that reporting period. Early adoption is permitted for any interim
and annual financial statements that have not yet been issued. We early
adopted ASU 2015-17 effective October 31, 2015, retrospectively. Adoption
resulted in a $1.7 million decrease in other accounts receivable and
prepaid expenses, a $0.6 million decrease in other accounts payable and
accrued expenses, a $0.7 million decrease in Long-term deferred tax
assets, net, and a $1.8 million decrease in Long-term deferred tax
liability, net in our Consolidated Balance Sheets at December 31, 2014.
Adoption had no impact on our results of operations and cash flow.
2. During the three months period ended December 31, 2015 the company
adjusted the gain from the sale of equity investment of affiliated
company reported in the three months period ended March 31, 2015.
3. During Q3 2015, the Company identified an error related to the
classification of US employees' social benefits expenses. Previously, the
Company classified these expenses in 'general and administrative
expenses' instead of classifying a part of them in 'Cost of goods'
(product and services) for employees allocated to this line item. This
change in classification also impacted the capitalization of inventory
balances. There was no material impact on the statement of cash flows.The
error only impacts one segment of the Company, Heat Transfer Services and
Products. The Company will revise previously reported segment information
in its Annual Report on Form 20-F for the year ended December 31, 2015.
The Company assessed the materiality of this error in accordance with the
SEC's Staff Accounting Bulletin 99 and Accounting Standards Codification
Topic 250, Accounting Changes and Error Corrections, and concluded that
the previously issued financial statements were not materially misstated.
In accordance with the SEC's Staff Accounting Bulletin, the Company will
correct these errors by revising the affected financial statements in the
Company's 2015 Annual Report on Form 20-F.
Following is the effect of the revision on the Company's previously reported results:
Statements of income per share:
For the three and twelve months periods ended December 31, 2014:
Three months ended twelve months ended
December 31, 2014 December 31, 2014
As Adjustment As As Adjustment As
reported revised reported revised
previously previously
Cost of goods:
Products 5,829 62 5,891 23,340 276 23,616
Services 10,172 157 10,329 40,286 620 40,906
Gross profit 5,384 (219) 5,165 17,100 (896) 16,204
General and
administrative 2,248 (224) 2,024 9,019 (896) 8,123
Operating income 2,163 5 2,168 3,819 * 3,819
Net (loss) income 1,147 5 1,152 1,432 * 1,432
Net income per
share 0.13 * 0.13 0.16 * 0.16
*Represents an amount less than $1.
Balance sheets and shareholders' capital
As of December 31, 2014:
As Adjustment As
reported revised
Previously
Inventories,
net 35,404 73 35,477
Total
current
assets 83,342 73 83,415
Total
assets 101,468 73 101,541
Retained
earnings 20,272 73 20,345
Total
equity 85,468 73 85,541
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SOURCE TAT Technologies Ltd.
