Israel May 22, 2012
March 31, 2012
$20.7 million $0.6 million March 31, 2012 $21.4 million $1.5 million March 31, 2011
During the first quarter of 2012, revenues were impacted by (i) the increase in revenues in the Heat Transfer Services and Products operating segment and the MRO Services for Aviation Components operating segment; and (ii) the significant decrease in revenues in the OEM of Electric Motion Systems due to growing weakness in the relevant markets. This decrease is a continuation of the decrease in revenues this segment had experienced during 2011.
March 31, 2012
Three Months Ended March 31, % of Change Between 2012 2011 Periods Revenues % of Revenues % of in Total in Total Thousands Revenues Thousands Revenues Unaudited Unaudited Revenues OEM of Heat Management Solutions $ 7,684 37.2% $ 7,640 35.7% 0.6% Heat Transfer Services and Products 6,783 32.8% 6,467 30.2% 4.9% MRO services for Aviation Components 5,003 24.2% 4,799 22.4% 4.3% OEM of Electric Motion Systems 1,802 8.7% 3,570 16.7% (49.5)% Eliminations (595) (2.9)% (1,074) (5.0)% (44.6)% Total revenues $ 20,677 100.0% $ 21,402 100.0% (3.4)%
"The results of 2012 first quarter reflect the continuation of the improving trend in our dominant operating segments – the OEM of Heat Management Solutions and Heat Transfer Services and Products, as well as in our MRO for Aviation Components operating segment. In each of these segments we continued to increase revenues compared to the first quarter of 2011. These improvements are attributed to the increase in our marketing and sales activities during 2010 and 2011 as well as to our rigorous and continuing activity to improve our production flow and yields.
During the first quarter we experienced a notable decrease in revenues and margins in the OEM of Electric Motion Systems compared to the same period in 2011, resulting from growing weakness in the defense markets relevant to this segment. This decrease is a continuation of the decrease in revenues this segment had experienced during 2011.
We are continuing to preserve a strong balance sheet with limited liabilities, impressive working capital and sufficient financial assets to support the growth of our operations.
We are encouraged by global trends of increased traffic reported by airlines around the world. We are witnessing a steady demand for MRO services, as well as positive indications from OEMs in the aerospace and defense industries, which impact our businesses
We continue to focus on our core capabilities while expanding our business offerings worldwide.
We believe that our efforts along with continued improvement in the global aviation industry, will sustain the improved trend line of our performance further in 2012".
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except share data)
March 31, March 31, 2012 2011 ASSETS Current Assets: Cash and cash equivalents $ 19,593 $ 28,820 Short-term bank deposits 10,000 - Marketable securities at fair value 1,900 2,547 Short-term restricted deposits 1,255 5,081 Trade accounts receivable (net of allowance for doubtful accounts of $456 and $ 2,527 as of March 31, 2012 and 2011, respectively) 19,516 20,072 Other accounts receivable and prepaid expenses 5,818 7,583 Inventories, net 31,754 33,152 Total current assets 89,836 97,255 Long-term assets: Long-term restricted deposits 2,000 - Investment in affiliated company 4,980 4,535 Funds in respect of employee right upon retirement 3,082 2,959 Long-term deferred tax 3,474 1,128 Property, plant and equipment, net 12,659 14,356 Intangible assets, net - 1,736 Goodwill, net 1,072 1,144 Total Long-term assets 27,267 25,858 Total assets $ 117,103 $ 123,113 LIABILITIES AND EQUITY Current Liabilities: Current maturities of long-term loans 5,550 9,556 Trade accounts payables 5,817 7,796 Other accounts payable and accrued expenses 6,367 7,371 Total current liabilities 17,734 24,723 Long-term liabilities: Long-term loans, net of current maturities 4,381 798 Other accounts payable 86 129 Liability in respect of employee rights upon retirement 3,628 3,531 Long-term deferred tax liability 1,368 775 Total long-term liabilities 9,463 5,233 EQUITY: Share capital Ordinary shares of NIS 0.9 par value - Authorized: 10,000,000 shares at March 31, 2012 and 2011; Issued and outstanding: 9,073,043 and 8,815,003 shares, respectively at March 31, 2012 and 2011 2,790 2,790 Additional paid-in capital 64,402 64,449 Treasury stock, at cost, 258,040 shares at March 31, 2012 and 2011, respectively (2,018) (2,018) Accumulated other comprehensive loss (823) (249) Retained earnings 22,816 24,964 Total TAT Technologies shareholders' equity 87,167 89,936 Non controlling interest 2,739 3,221 Total equity: 89,906 93,157 Total liabilities and equity $ 117,103 $ 123,113
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, in thousands, except share and per share data)
Three months ended March 31, 2012 2011 Revenues: OEM of Heat Management Solutions $ 7,684 $ 7,640 Heat Transfer Services and Product 6,783 6,467 MRO services for Aviation Components 5,003 4,799 OEM of Electric Motion Systems 1,802 3,570 Eliminations (595) (1,074) 20,677 21,402 Cost and operating expenses: OEM of Heat Management Solutions 5,586 5,392 Heat Transfer Services and Products 5,029 4,698 MRO services for Aviation Components 4,374 4,067 OEM of Electric Motion Systems 1,711 2,487 Eliminations (597) (952) 16,103 15,692 Gross Profit 4,574 5,710 Research and development, net 174 265 Selling and marketing expenses 889 882 General and administrative expenses 2,995 2,469 Other expenses 14 - 4,072 3,616 Operating income 502 2,094 Financial expense (556) (308) Financial income 816 517 Income before income taxes 762 2,303 Taxes on income 268 780 Net income after income taxes 494 1,523 Share in results of affiliated company (40) 86 Net income 454 1,609 Net loss (income) attributable to Non controlling interest 130 (107) Net income attributable to TAT Technologies shareholders $ 584 $ 1,502 Earning per share Basic and diluted net income per share attributable to controlling interest $ 0.06 $ 0.17 Weighted average number of shares - basic and diluted 8,815,003 8,815,003
TAT operates under four operating 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 for Aviation Components; and (iv) OEM of Electric Motion Systems.
OEM of Heat Management Solutions
Heat Transfer Services and Products
MRO services for Aviation Components
OEM of Electric Motion Systems
Liquidity and Capital Resources
March 31, 2012 $29.6 million $1.9 million $3.3 million $34.8 million $28.8 million $2.5 million $5.1 million $36.4 million March 31, 2011
March 31, 2012
In the OEM industry in general and in TAT’s OEM businesses in particular, the majority of customers operate based on annual budgets and tend to utilize during the fiscal fourth quarter the remaining balance of any un-used budgets. This trend is more typical with customers from the defense industry. Accordingly, TAT is more likely to generate increased revenues in the OEM businesses (such as TAT’s OEM of Heat Management Solutions and OEM of Electric Motion Systems) during the fiscal fourth quarter. The aviation industry is known for its highest traffic in the third quarter, primarily attributable to summer vacations. As a result, during the fiscal third quarter, airlines tend to postpone, to the extent possible, maintenance and repair of their aircraft to minimize aircraft grounding. Accordingly, TAT is more likely to notice decreased revenues in the MRO businesses (such as TAT’s MRO for Aviation Components and Heat Transfer Services and Products) during the fiscal third quarter with recovery during subsequent quarters.
April 22, 2012 $2.5 million NIS9.4 million $0.283 NIS1.065 May 17, 2012 May 3, 2012
May 21, 2012 $0.5 million February 21, 2012
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Bnei Ayish Israel
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.
SOURCE TAT Technologies Ltd