TAT Technologies Reports Third Quarter 2020 Results

GEDERA, Israel, Nov. 12, 2020 /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 nine month periods ended September 30, 2020.

Key Financial Highlights:

• Revenues for Q3 2020 were $16.8 million compared with $24.8 million in Q3 2019. Revenues for the nine-month period that ended on September 30, 2020 were $58.8 million compared with $71.7 million in the nine-month period that ended on September 30, 2019.
• Gross profit for Q3 2020 was $1.4 million (8.3% as a percentage of revenues) compared with $4.1 million (16.8% as a percentage of revenues) in Q3 2019. Gross profit for the nine-month period that ended on September 30, 2020 was $7.5 million (12.7% as a percentage of revenues) compared with $11 million (15.3% as a percentage of revenues) in the nine-month period that ended on September 30, 2019.
• Adjusted EBITDA for Q3 2020 was (0.3) million compared with $2.2 million in Q3 2019. Adjusted EBITDA for the nine-month period that ended on September 30, 2020 was $2.2 million compared with $5.3 million in the nine-month period that ended on September 30, 2019.
• Net loss was ($1.6) million, or loss of ($0.16) per diluted share in Q3 2020 compared with a net income of $0.15 million, or $0.02 per diluted share in Q3 2019. Net loss was ($3.4) million, or loss of ($0.37) per diluted share in the nine-month period that ended on September 30, 2020 compared with a net income of $0.3 million, or $0.04 per diluted share in the nine-month period that ended on September 30, 2019.
• During Q3 2020 and the nine-month period that ended on September 30, 2020 TAT reported losses from discontinued operation of the JT8D engine blades coating in the amount of $0.1 million and $1.8 million, respectively.

Mr. Igal Zamir, CEO and President of TAT Technologies stated, "TAT reacted fast and effectively to the COVID 19 impact on the aerospace industry. In Q2 and Q3 of 2020 we adjusted the company's cost structure to the reduction in revenues during such period. We will continue to proactively monitor our cost structure and cash flow as the industry continues to manage the pandemic and its impact. Our strong balance sheet with net cash of over $19 million provides us the flexibility to serve our customers and in the same time maintain business development activities.

We are pleased that despite the pandemic, the company was able to continue its sales, marketing, and business development efforts with meaningful results. During the third quarter of 2020 we signed a 10- year contract with Honeywell for the repair of APU 331-2xx. This contract represents a substantial opportunity to increase our APU business. In order to support its execution, we will invest in machines and rotatable parts in the coming quarters to better support our clients.

In addition, we are proud that during the last six months we executed new, and renewed existing long-term agreements with MRO and OEM customers with potential aggregate revenues of $38 million for the coming years"

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.

SOURCE TAT Technologies Ltd