GEDERA, Israel, Nov. 13 /PRNewswire-FirstCall/ -- TAT Technologies Limited , reported today its results for the three and nine month periods ended September 30, 2008.
TAT Technologies Limited (TAT), directly and through its subsidiaries, provides a variety of services and products to the aerospace industry, such as the manufacture, maintenance and repair of 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; other environmental control and cooling systems and a variety of other electronic and mechanical aircraft accessories.
TAT announced net income of $679,120 on revenues of $26,702,134 for the three months ended September 30, 2008 compared to net income of $26,080,046 on revenues of $20,862,079 for the three months ended September 30, 2007. The 2007 period benefited from the capital gain of $26.4 million that the company recorded in connection with the July 2007 IPO of its 62% held subsidiary, Limco-Piedmont Inc.
For the nine months ended September 30, 2008 TAT announced net income of $3,582,221 on revenues of $72,145,103 compared to net income of $30,588,308 and revenues of $68,983,537 for the same period ended September 30, 2007.
Revenues from the company's three principal lines of business for the three and nine month periods ended September 30, 2008 and 2007 were as follows:
Three Months Ended September 30, 2008 2007 Revenues % of Total Revenues % of Total Revenues Revenues In Thousands Revenues: MRO Services 14,054 52.6% 12,821 61.5% OEM products 9,153 34.3% 5,377 25.8% Parts Services 4,773 17.9% 3,813 18.3% Elimination (1,278) (4.8%) (1,149) (5.6%) Total Revenues 26,702 100.0% 20,862 100.0% Nine Months Ended September 30, 2008 2007 Revenues % of Total Revenues % of Total Revenues Revenues In Thousands Revenues: MRO Services 40,264 55.8% 37,877 54.9% OEM products 22,599 31.3% 17,395 25.2% Parts Services 13,360 18.5% 17,022 24.7% Elimination (4,078) (5.6%) (3,311) (4.8%) Total Revenues 72,145 100.0% 68,983 100.0%
The 28% and 5% increases in revenues for the three and nine month periods ended September 30, 2008 compared with those of September 30, 2007, respectively, reflect increased revenues in all three segments of the company in addition to the consolidation of the company's 70% owned subsidiary, Bental Industries Ltd. commencing August 18, 2008. Bental contributed revenues of $3,066 thousands during the third quarter.
The decrease in net income for both the three and nine month periods ended September 30, 2008 compared with those of September 30, 2007, is primarily attributable to the $26.4 million capital gain recorded in connection with the IPO of the company's 62% held subsidiary, Limco-Piedmont Inc. in July 2007. Also impacting net income was the decrease in the net profits of the company's operations in Israel from $1.7 million in the nine months ended September 30, 2007 to $ 911,000 in the nine months ended September 30, 2008, primarily resulting from the decline in the exchange rate between the U.S. dollar and the Israeli Shekel that resulted in increased operational expenses and decreased net profit. Other factors impacting net income was a one time compensation charge of $930,000 arising from the previously announced retirement of certain managers and the decrease in the net profit of Limco-Piedmont from $4.4 million in the nine months ended September 30, 2007 to $2.6 million in the nine months ended September 30, 2008. The third quarter of 2008 results also reflect the positive addition of $ 989,000 of net income attributable to Bental Industries Ltd.
Since the end of the second quarter, TAT, directly and through its subsidiaries, has entered into a number of long-term agreements with customers for the provision of products and services. Among such agreements, are agreements for the provision of Heat Exchangers commencing in 2010, pursuant to which revenues may reach approximately $20 to 35 million over a 5 to 15 years period. We also entered into agreements to provide cooling systems commencing in 2009, pursuant to which revenues may reach approximately $10 to 20 million over a 5 to 15 years period.
Dr. Shmuel Fledel, TAT's CEO commented: "The third quarter of 2008 saw encouraging revenue growth for the TAT group, versus the third quarter of last year and second quarter of this year. We have experienced a decrease in our gross margins, and consequently we are taking aggressive actions to manage costs through the weakness that is developing in the aviation industries.
We are pursuing initiatives with new customers for 2009 and looking positively towards the fourth quarter of 2008 and 2009. We believe that our business opportunities, along with consistent expense control and improvement in operational performance give us the ability to realize an improved fourth quarter and 2009."
About TAT Technologies Ltd.
TAT Technologies Limited provides a variety of services and products to the aerospace industry under three operational segments: (i) OEM products (ii) MRO services and (iii) parts, each with the following characteristics:
Our OEM activities primarily relate to the manufacture and sale of 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. We also manufacture and sell other environmental control and cooling systems and a variety of other electronic and mechanical aircraft accessories and systems such as pumps, valves, power systems and turbines.
Our MRO services include the remanufacture, overhaul and repair of heat transfer equipment and other aircraft components, APUs, propellers and landing gear. Our Limco-Piedmont subsidiary operates four FAA certified repair stations, which provide aircraft component MRO services for airlines, air cargo carriers, maintenance service centers and the military.
Our parts segment focuses on the sale of APU parts propellers and landing gear. We offer parts services for commercial, regional and charter airlines and business aircraft owners.
Safe Harbor for Forward-Looking Statements
This press release contains forward-looking statements that are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these forward-looking statements include, 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 and Exchange Commission. 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.
TAT TECHNOLOGIES AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) September 30, December 31, 2008 2007 ASSETS Current Assets: Cash and cash equivalents $23,201 $15,114 Short-term investments 21,110 28,806 Accounts receivable (net of allowance for doubtful accounts of $202 and $140 at September 30, 2008 and December 31, 2007, respectively) 21,445 14,679 Inventories 37,736 28,189 Other accounts receivable and prepaid expenses 5,966 4,047 Total current assets 109,458 90,835 Funds in respect of employee right upon retirement 4,424 4,156 Property, plant and equipment, net 15,263 11,927 Intangible assets, net 2,307 1,709 Goodwill 6,501 4,780 Total assets $137,953 $113,407 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Current maturities of long-term loans 165 - Accounts payables 11,885 7,067 Other accounts payable and accrued expenses 7,710 4,310 Total current liabilities 19,760 11,377 LONG-TERM LIABILITIES: fair value of Call options to minority 2,408 - Long-term loans, net of current maturities 5,247 - Liability in respect of employee rights upon retirement 5,030 4,175 Long-term deferred tax liability 1,000 581 13,685 4,756 Minority interest 28,586 24,481 SHAREHOLDERS' EQUITY: Share capital Ordinary shares of NIS 0.9 par value - Authorized: 10,000,000 shares at September 30, 2008 and December 31, 2007; Issued and outstanding: 6,547,671 shares and 6,542,671 shares at September 30, 2008 and December 31, 2007, respectively 2,202 2,201 Additional paid-in capital 39,468 39,308 Accumulated other comprehensive loss (308) - Retained earnings 34,560 31,284 SHAREHOLDERS' EQUITY: 75,922 72,793 Total liabilities and shareholders' equity $137,953 $113,407 TAT TECHNOLOGIES AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data) Three months ended Nine months ended September 30, September 30, 2008 2007 2008 2007 Revenues MRO services 14,054 12,821 40,264 37,877 OEM products 7,875 4,228 18,521 14,084 Parts services 4,773 3,813 13,360 17,022 26,702 20,862 72,145 68,983 Cost and operating expenses Cost of revenue 20,684 15,816 55,354 50,035 Selling and marketing 1,329 967 3,468 2,817 General and administrative 3,085 2,348 8,718 8,037 Operating income 1,604 1,731 4,605 8,094 Interest income(expense) net 195 305 844 194 Other income, net - 26,374 - 26,393 Income before taxes and minority interest 1,799 28,410 5,449 34,681 Provision for income taxes 818 1,862 1,375 3,625 Income before minority interest 981 26,548 4,074 31,056 Share in result of affiliated company prior to its consolidation 252 - 686 - Minority interest income (554) (468) (1,178) (468) Net income $679 $26,080 $3,582 $30,588 Basic net income per share $0.10 $3.99 $0.55 $4.74 Diluted net income per share $0.10 $3.98 $0.55 $4.68 Weighted average number Of shares - basic 6,547,671 6,542,671 6,544,338 6,450,078 Weighted average number of shares - diluted 6,557,559 6,558,362 6,559,186 6,530,396
