TAT Technologies Reports Year 2011 First Quarter Results
GEDERA, Israel, May 19, 2011 /PRNewswire-FirstCall/ -- TAT Technologies Ltd. (NASDAQ: TATT - News), 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 period ended March 31, 2011.
Financial Highlights:
TAT announced revenues of $21.4 million and a net income of $1.5 million for the three months ended March 31, 2011, compared to revenues of $18.4 million with net income of $0.7 million for the three months ended March 31, 2010 an increase of 17% in revenues and of 103% in net profit
During the first quarter of 2011, revenues were impacted by (i) the increase in revenues in the OEM of Electric Motion Systems segment; (ii) the increase in revenues in the Heat Transfer Services and Products segment; and (iii) the increase in revenues in the MRO Services for Aviation Components segment; (iv) partially offset by the decrease in revenues in the OEM of Heat Management Solutions segment.
Revenue breakdown by the principal operational segments for the
three-month period ended March 31, 2011 and 2010, respectively, was as
follows:
Three Months Ended December 31.
2011 2010
Revenues % of Revenues % of
in Total in Total
Thousands Revenues Thousands Revenues
Unaudited Unaudited
Revenues
OEM of Heat
Management
Solutions $ 7,640 35.7 % $ 8,900 48.5 %
Heat Transfer
Services and
Products * 6,467 30.2 % 5,170 28.1 %
MRO services
of Aviation
Components * 4,799 22.4 % 3,784 20.6 %
OEM of
Electric
Motion Systems 3,570 16.7 % 1,945 10.6 %
Eliminations (1,074) (5.0)% (1,432) (7.8)%
Total revenues $ 21,402 100.00 % $ 18,367 100.00 %
* As of January 1, 2011, TAT began reporting its operations based on four operating segments, after dividing its MRO Services operating segment into two separate segments: Heat Transfer Services and Products; and MRO services for Aviation Components. Accordingly, the revenues and costs reported for the three months ended March 31, 2010 for MRO Services operating segment were divided between these two new operating segments. Additionally, the operating segment name of 'OEM of Heat Transfer Products' was changed to OEM of Heat Management Solutions.
Dr. Shmuel Fledel, TAT's CEO commented:
"The first quarter of year 2011 was a successful period for TAT during which we increased our revenues and improved our margins, compared to the same period in 2010. This improvement is attributable to the efforts we made during year 2010 in expanding our marketing and sales activities as well as in working rigorously to improve our production flow and yields. We continue to focus on our core capabilities while expanding our business offerings worldwide.
"We are encouraged by global trends of increased traffic reported by airlines and we believe we are witnessing a steady recovery in the demand for MRO services, as well as positive indications from OEMs in the aerospace and defense industries, which impact our businesses.
"We believe that our efforts along with continuing improvement in the global aviation industry, will sustain the improved trend line of our performances in 2011."
TAT TECHNOLOGIES AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except share data)
March 31, March 31,
2011 2010
ASSETS
Current Assets:
Cash and cash equivalents $ 28,820 $ 25,874
Marketable securities 2,547 2,934
Restricted deposit 5,081 5,065
Trade accounts receivable (net of
allowance for doubtful accounts of
$2,527 and $ 2,402 as of March 31,
2011 and March 31, 2010,
respectively) 20,072 16,171
Inventories 33,152 34,478
Other accounts receivable and prepaid
expenses 7,583 8,229
Total current assets 97,255 92,751
Investment in affiliate 4,535 9,105
Funds in respect of employee right
upon retirement 2,959 2,681
Long-term deferred tax 1,128 158
Property, plant and equipment, net 14,356 14,202
Intangible assets, net 1,736 2,801
Goodwill 1,144 5,296
Total assets $123,113 $126,994
LIABILITIES AND EQUITY
Current Liabilities:
Current maturities of long-term loans 9,556 1,828
Trade accounts payables 7,796 7,935
Other accounts payable and accrued
expenses 7,371 5,260
Total current liabilities 24,723 15,023
LONG-TERM LIABILITIES:
Long-term loans, net of current
maturities 798 7,300
Other accounts payable 129 -
Liability in respect of employee
rights upon retirement 3,531 3,227
Long-term deferred tax liability 775 2,905
5,233 13,432
EQUITY:
Share capital
Ordinary shares of NIS 0.9 par value
- Authorized:
10,000,000 shares at March 31, 2011
and 2010; Issued
and outstanding: 8,815,003 shares at
March 31, 2011 and
2010 2,790 2,790
Additional paid-in capital 64,449 64,407
Accumulated other comprehensive loss (249) (808)
Treasury stock, at cost, 258,040
shares at March 31, 2011 and 2009,
respectively (2,018) (2,018)
Retained earnings 24,964 31,385
Total TAT Technologies shareholders'
equity 89,936 95,756
Noncontrolling interest 3,221 2,783
Total equity: 93,157 98,539
Total liabilities and equity $123,113 $126,994
TAT TECHNOLOGIES AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, in thousands, except share and per share data)
Three months ended
March 31,
2011 2010
Revenues:
OEM of Heat Management
Solutions $7,640 $8,900
Heat Transfer Services and
Products * 6,467 5,170
MRO services for Aviation
Components * 4,799 3,784
OEM of Electric Motion
Systems 3,570 1,945
Eliminations (1,074) (1,432)
21,402 18,367
Cost and operating expenses:
OEM of Heat Management
Solutions 5,392 5,961
Heat Transfer Services and
Products 4,698 4,089
MRO services for Aviation
Components 4,067 3,605
OEM of Electric Motion
Systems 2,487 1,528
Eliminations (952) (1,204)
15,692 13,979
Gross Profit 5,710 4,388
Research and development
costs 265 141
Selling and marketing
expenses 882 706
General and administrative
expenses 2,469 2,941
3,616 3,788
Operating income 2,094 600
Financial expense (308) (388)
Financial income 517 341
Income before income taxes 2,303 553
Taxes on income 780 26
Net income 1,523 527
Share in results of
affiliated company 86 206
Net loss (income)
attributable to Non
controlling interest (107) 5
Net income attributable to
TAT Technologies
shareholders $ 1,502 $738
Earning per share
Basic net income per share $0.17 $0.08
Diluted net income per share $0.17 $0.08
Weighted average number of
shares - basic 8,815,003 8,815,003
Weighted average number of
shares - diluted 8,815,003 8,815,003
* As of January 1, 2011, TAT began reporting its operations based on four operating segments, after dividing its MRO Services operating segment into two separate segments: Heat Transfer Services and Products; and MRO services for Aviation Components. Accordingly, the revenues and costs reported for the three months ended March 31, 2010 for MRO Services operating segment were divided between these two new operating segments. Additionally, the operating segment name of 'OEM of Heat Transfer Products' was changed to OEM of Heat Management Solutions.
Operating Segments
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.
Until December 31, 2010, TAT operated under three segments. As of January 1, 2011, TAT began reporting its operations based on four operating segments, after dividing its MRO Services operating segment into two separate segments: Heat Transfer Services and Products; and MRO services for Aviation Components. Accordingly, the revenues and costs reported for the three months ended March 31, 2010 for MRO Services operating segment were divided between these two new operating segments. Additionally, the operating segment name of 'OEM of Heat Transfer Products' was changed to OEM of Heat Management Solutions.
OEM of Heat Management Solutions primarily includes 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.
OEM of Electric Motion Systems primarily includes the design, development, manufacture and sale of a broad range of electrical motor applications for airborne and ground systems.
Heat Transfer Services and Products includes 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 an FAA certified repair station, which provides heat transfer MRO services and products for airlines, air cargo carriers, maintenance service centers and the military.
MRO services for Aviation Components includes 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 37% in First Aviation Services, a world-wide distributor of products and services to the aerospace industry and a one-stop-shop for MRO services (wheels, breaks, propellers and landing gear) for the General Aviation Industry.
Entry into Consulting Agreement with Avi Ortal
In April 2011, Avi Ortal, the Chief Executive Officer of the Company's subsidiary, Limco-Piedmont, Inc., advised TAT's Board of his intention to terminate his employment on July 31, 2011. On May 18, 2011, Mr. Ortal entered into a Consulting Agreement with TAT, effective for a period of eight months following the termination of his employment, to provide part-time consulting services to TAT with respect to its U.S. based subsidiaries. Mr. Ortal will receive consulting fees of $20,000 per month for such services.
Subsequent Event
None
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: http://www.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, 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.
Contact:
Miri Segal-Scharia Yaron Shalem - CFO
MS-IR LLC TAT Technologies Ltd.
Tel:+1-917-607-8654 Tel: +972-8-862-8500
[email protected] [email protected]
SOURCE TAT Technologies Ltd
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