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 | 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 | 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 | 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
[email protected]
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SOURCE TAT Technologies Ltd.