NETANYA, Israel, March 6, 2024 /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 audited results for the twelve months ended December 31, 2023.

Key Financial Highlights:

  • Total revenues for the twelve months ended December 31, 2023, were $113.8 million compared to $84.6 million for the twelve months ended December 31, 2022, an increase of 35%.
  • Gross profit for the twelve months ended December 31, 2023, were $22.5 million (19.7% of revenues) compared to $15.9 million (18.8% of revenues) for the twelve months ended December 31, 2022, an increase of 41%.
  • Adjusted EBITDA for the twelve months ended December 31, 2023, was $11.2 million compared to $4 million for the twelve months ended December 31, 2022, an increase of 176%.
  • GAAP net profit from continued operations for the twelve months ended December 31, 2023, was $4.7 million ($0.51 per share on a fully diluted basis) compared to GAAP net loss from continued operations of $1.6 million (net profit of $0.1 million without a onetime impact of our restructuring plan) ($0.175 loss per share on a fully diluted basis) for the twelve months ended December 31, 2022.
  • Net debt as of December 31, 2023, was $10.3 million compared to net debt of $19.4 million as of December 31, 2022.
  • In December 2023 the Company raised $10.1 million (net from all related expenses) in a private placement sale to Israelis  institutional investors.

Mr. Igal Zamir, CEO and President of TAT Technologies stated "We are very pleased to present the results of 2023. Since Q4 of 2022 we are in constant growth mode. This as a result of the increasing demand to our products and services as well as our new line of services and operation ramp up. The demand continues to grow while our industry is ramping up from the COVID crisis. During 2023 we managed to improve our margins leading to a record year in all relevant aspects of revenue, gross margin and EBITDA. We saw our backlog increase to a record number of over $400 million. We are pleased to see that the strategic shift the Company made over the last 3 years is starting to bear fruit, enabling the Company to compete and win large strategic deals and enjoy improved margin. We ended 2023 with positive operational cash flow despite the revenue increase and the need for working capital to support the growth. The industry supply chain challenges force us to hold much more inventory than what we used to pre COVID".

Mr Zamir continue: "We remain optimistic for 2024 as we see our increase in backlog and its coverage for the year, new contracts that we believe will yield additional revenue, and the large potential from the new APU MRO capabilities. Various operational initiatives keep us optimistic that our margins will continue to improve." 

Non-GAAP Financial Measures

To supplement the consolidated financial statements presented in accordance with GAAP, the Company also presents a Non-GAAP presentation of 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 before the Company's share in results and sale of equity investment of affiliated companies, share-based compensation, taxes on income, financial (expenses) income, net, depreciation and amortization, inventory impairment from exit and dismissal activity and customers relationship write off. Non-GAAP Adjusted EBITDA, however, should not be considered as alternatives to net income and operating income for the period and may not be indicative of the historic operating results of the Company; nor they are meant to be predictive of potential future results.  Non-GAAP Adjusted EBITDA is not a 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 GAAP Adjusted EBITDA 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 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 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.

 

 

TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES 

CONSOLIDATED BALANCE SHEETS 

U.S dollars in thousands, except share data 





December 31,




2023


2022







ASSETS









CURRENT ASSETS:





   Cash and cash equivalents



$       15,979


$       7,722

   Accounts receivable, net of allowance for credit losses of $345 and $527 thousand
   as of December 31, 2023 and December 31, 2022 respectively



20,009


15,622

    Restricted deposit



661


-

   Other current assets and prepaid expenses



6,397


6,047

   Inventory



51,280


45,759







   Total current assets



94,326


75,150







NON-CURRENT ASSETS:






   Restricted deposit



302


304

   Investment in affiliates



2,168


1,665

   Funds in respect of employee rights upon retirement



664


780

   Deferred income taxes



994


1,229

Property, plant and equipment, net



42,554


43,423

Operating lease right of use assets



2,746


2,477

Intangible assets, net



1,823


1,623

    Total non-current assets



51,251


 

51,501







   Total assets



$    145,577


$     126,651








 

 

TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES 


CONSOLIDATED BALANCE SHEETS 

U.S dollars in thousands, except share data 

 










December 31,





2023


2022









LIABILITIES AND EQUITY














CURRENT LIABILITIES:







  Current maturities of long-term loans



$          2,200


$        1,876


  Credit line from bank



12,138


6,101


   Accounts payable



9,988


10,233


   Accrued expenses and other



13,952


9,876


   Operating lease liabilities



1,033


904
















   Total current liabilities



39,311


28,990









NON-CURRENT LIABILITIES:







   Long-term loans



12,886


19,408


   Liability in respect of employee rights upon retirement



1,000


1,148


   Operating lease liabilities



1,697


1,535









   Total non-current liabilities



15,583


22,091
















COMMITMENTS AND CONTINGENCIES (NOTE 15)













Total liabilities



54,894


51,081









EQUITY:







Ordinary shares of NIS 0.9 par value:

Authorized: 13,000,000 shares at December 31, 2023 and at
December 31, 2022; Issued: 10,377,085 and 9,186,019 shares at
December 31, 2023 and at December 31, 2022 respectively;
Outstanding: 10,102,612 and 8,911,546 shares at December 31, 2023
and at December 31, 2022 respectively



3,140


2,842


Additional paid-in capital



76,335


66,245


Treasury shares, at cost, 274,473 shares at December 31, 2023 and 2022



(2,088)


(2,088)


Accumulated other comprehensive income (loss)



27


(26)


Retained earnings



13,269


8,597


Total shareholders' equity



90,683


75,570
















Total liabilities and shareholders' equity



145,577


$     126,651


 

 

TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES 

 

CONSOLIDATED STATEMENTS OF OPERATIONS 

U.S dollars in thousands 



Year ended December 31,




2023

2022

2021







Revenue:






Products



$    35,241


$    25,460


$   25,870


Services



78,553


59,096


52,103





113,794


84,556


77,973











Cost of revenue, net:









Products



30,517


21,631


23,761


Services



60,809


46,997


42,942





91,326


68,628


66,703











Gross profit



22,468


15,928


11,270











Operating expenses:









Research and development, net



715


479


517


Selling and marketing, net



5,523


5,629


5,147


General and administrative, net



10,588


9,970


8,354


Other (income) expenses



(433)


(90)


(468)


Restructuring expenses, net



-


1,715


1,755














16,393


17,703


15,305











Operating income (loss)



6,075


(1,775)


(4,035)











Interest expenses,net



(1,683)


(902)


(250)


Other financial income (expenses), net



353


1,029


(290)











Income profit (loss) before taxes on income (tax benefit)



4,745


(1,648)


(4,575)











Taxes on income (tax benefit)



576


98


(662)











Loss before share of equity investment



4,169


(1,746)


(3,913)











Share in profit (losses) of equity investment of affiliated companies



503


184


(76)











Net income (loss) from continued operation



$    4,672


$    (1,562)


$    (3,989)
























 

 

TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) 

U.S dollars in thousands 





Year ended December 31,




2023


2022

2021

Net income (loss) from discontinued operation



-


-

$  427

Net income (loss)



$    4,672


$   (1,562)

$   (3,562)








Net income (loss) per share from continued operation —basic



$     0.52


$    (0.175)

$    (0.45)

                

Net income (loss) per share from continued operation —diluted



$     0.51


$    (0.175)

$    (0.45)

Net income (loss) per share from discontinued operation - basic and diluted



-


-

$    0.05

Net income (loss) per share — basic



$     0.52


$    (0.175)

$    (0.4)

Net income (loss) per share — diluted



$     0.51


$    (0.175)

$    (0.4)








Weighted average number of shares outstanding:



8,961,689


8,911,546

8,874,696

Basic

 Diluted



9,084,022


8,911,546

8,874,696


























Year ended December 31,




2023


2022

2021


Net loss)



$     4,672


$     (1,562)

$     (3,562)


Other comprehensive income (loss), net








Net unrealized gains (losses) from derivatives



53


(89)

(76)


Reclassification adjustments for loss (gains) from derivatives included in net income



-


30

(19)


Total other comprehensive income (loss)



53


$      (59)

$      (95)


 

Total comprehensive income (loss)



$    4,725


$      (1,621)

$      (3,657)


 

 

 

TAT TECHNOLOGIES LTD.  


CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY 

U.S dollars in thousands, except share data  




















Ordinary shares















Number of shares issued


Amount


Additional paid-in capital


Accumulated
other comprehensive income (loss)


Treasury shares


Retained earnings


Total equity




















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, 2020:
















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 YEAR ENDED DECEMBER 31, 2021:
















Comprehensive loss


-


-


-


(59)


-


(1,562)


(1,621)


Exercise of Options


36,850


33


156


-


-


-


189


Share based compensation


-


-


218


-


-


-


218


BALANCE AT DECEMBER 31, 2022


9,186,019


$            2,842


$       66,245


$            (26)


$            (2,088)


$            8,597


$            75,570


CHANGES DURING THE YEAR ENDED DECEMBER 31, 2022:
















Comprehensive income








53




4,672


4,725


Exercise of Options


32,466


8


157








165


Issuance of common shares net of issuance costs of $141  thousands


1,158,600


290


9,774








10,064


Share based compensation






159








159


BALANCE AT DECEMBER 31, 2023


10,377,085


$            3,140


$     76,335


$              27


$            (2,088)


13,269


90,683


























 

 

 

TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES  


CONSOLIDATED STATEMENTS OF CASH FLOWS 

U.S. dollars in thousands 





Year ended December 31,



2023


2022


2021








CASH FLOWS FROM OPERATING ACTIVITIES:







Net income (loss) from continued operations


$     4,672


$   (1,562)


$   (3,989)








Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:







Depreciation and amortization


4,710


3,706


4,881

Loss (gain) from change in fair value of derivatives


(9)


8


(19)

Change in funds in respect of employee rights upon retirement


116


377


76

Change in operating right of use asset and operating leasing liability


22


(82)


(73)

Lease modification


-


-


(1,315)

Non cash financial expenses


(172)


(902)


8

Increase (decrease) in restructuring plan provision


(126)


(467)


657

change in allowance for credit losses


(182)


138


248

Share in results of affiliated companies


(503)


(184)


76

Share based compensation


159


218


160

Liability in respect of employee rights upon retirement


(148)


(356)


94

Impairment of fixed assets


-


-


1,820

Capital gain from sale of property, plant and equipment


(530)


(90)


(468)

Deferred income taxes, net


235


23


(686)

Government loan forgiveness


-


-


(1,442)

Changes in operating assets and liabilities:







    increase in trade accounts receivable


(4,205)


(2,659)


(2,934)

increase in other current assets and prepaid expenses


(341)


(1,836)


(1,035)

    increase in inventory


(5,400)


(5,069)


(681)

    Increase (decrease) in trade accounts payable


(245)


1,143


2,571

    Increase (decrease) in accrued expenses and other


4,202


2,727


(218)








Net cash provided by (used in) operating activities from continued operation


$      2,255


$     (4,867)


$     (2,269)








CASH FLOWS FROM INVESTING ACTIVITIES:







Proceeds from sale of property and equipment


2,002


93


1,163

Purchase of property and equipment


(5,102)


(16,213)


(16,247)

Purchase of intangible assets


(479)


-


(555)

Net cash used in investing activities from continued operations


$  (3,579)


$   (16,120)


$   (15,639)

 

 

TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES 




CONSOLIDATED STATEMENTS OF CASH FLOWS 


U.S. dollars in thousands 






Year ended December 31,




2023


2022


2021


CASH FLOWS FROM FINANCING ACTIVITIES:








Repayments of long-term loans


(1,701)


(1,071)


-

Short-term credit received from banks


1,000


-


3,000


Proceeds from long-term loans received


712


16,680


3,042


Proceeds from issuance of common shares, net


10,064


-


-


Exercise of options


165


189


-

Net cash provided by financing activities from continued operations


$10,240


$     15,798


$     6,042










CASH FLOWS FROM DISCONTINUED ACTIVITIES:








Net cash provided by operating activities


-


-


777


Net cash provided by (used in) discontinued activities


-


-


$       777










NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS


8,916


(5,189)


(11,089)


CASH AND CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS AT BEGINNING OF YEAR


8,026


13,215


24,304


CASH AND CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS AT END OF YEAR


16,942


8,026


13,215


 

SUPPLEMENTARY INFORMATION ON INVESTING ACTIVITIES NOT INVOLVING CASH FLOW:







Purchase of property, plant and equipment on credit


$                -


$           196


$           199

Additions of operating lease right-of-use assets and operating lease liabilities


$        1,345


$           318


$          399

Reclassification of inventory to property, plant and equipment


$             68


$           284


$          829

Capital contribution to equity method investee


$               -


$          787


$                -

 

Supplemental disclosure of cash flow information:







Interest paid


$      (1,438)


$       (796)


$          (251)

Income taxes received (paid), net


-                $


$              -


$             (3)



























 

 

TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES


 RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA (NON-GAAP)  (UNAUDITED)

(In thousands)



December 31,


December 31,

2023


2022





Net income (loss)

$              4,672


$                   (1,562)

Adjustments:




Share in results of equity investment of affiliated companies

(503)


(184)

Taxes on income (tax benefit)

576


98

Financial expenses/ (income), net

1,330


(127)

Depreciation and amortization

4,902


3,878

Share base compensation

159


218

Restructuring expenses

-


1,715





Adjusted EBITDA

11,136


4,036

 

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 war and hostilities between Israel and Hamas and Israel and Hezbollah, 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. 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, except as required by law.

For more information of TAT Technologies Ltd., please visit our web-site:  www.tat-technologies.com

 

Contact:

Mr. Ehud Ben-Yair
Chief Financial Officer
(Principal Accounting Officer)
Tel: 972-8-862-8503
ehudb@tat-technologies.com

 

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SOURCE TAT Technologies Ltd.

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