GEDERA, Israel, March 12 /PRNewswire-FirstCall/ -- TAT Technologies Ltd. , reported today its results for the three and twelve month periods ended December 31, 2008.
TAT Technologies Ltd. (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 $784,000 on revenues of $31.1 million for the three months ended December 31, 2008 compared to net income of $1.4 million on revenues of $19.8 million for the three months ended December 31, 2007. For the twelve months ended December 31, 2008, TAT announced net income of $4.3 million on revenues of $103.3 million compared to net income of $32.0 million and revenues of $88.7 million for the same period ended December 31, 2007.
Whereas the 2008 period benefited from significant increased revenues offset by declining margins, 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.
Revenues from the company's three principal lines of business for the three and twelve month periods ended December 31, 2008 and 2007 were as follows:
Three Months Ended December 31, 2008 2007 Revenues % of Total Revenues % of Total Revenues Revenues In Thousands Revenues: MRO Services $14,012 44.9% $11,515 58.3% OEM products 15,084 48.4% 6,094 30.8% Parts Services 3,929 12.6% 3,362 17.0% Elimination (1,882) (5.9%) (1,220) (6.1%) Total Revenues 31,143 100.0% 19,751 100.0% Year Ended December 31, 2008 2007 Revenues % of Total Revenues % of Total Revenues Revenues In Thousands Revenues: MRO Services $54,276 52.5% $49,392 55.7% OEM products 37,696 36.4% 23,489 26.4% Parts Services 17,289 16.7% 20,384 23.0% Elimination (5,973) (5.6%) (4,561) (5.1%) Total Revenues 103,288 100.0% 88,704 100.0%
The 58% and 16% increases in revenues for the three and twelve month periods ended December 31, 2008 compared with the same periods of December 31, 2007, respectively, reflect increased revenues in the OEM segment due to organic growth as well as revenues from the consolidation of the company's 70% controlled subsidiary, Bental Industries Ltd commencing August 18, 2008 ; increased revenues in the MRO segment offset by a moderate decrease of revenues in the Parts segment.
The decrease in net income for the twelve month period ended December 31, 2008 compared with the twelve month period ended December 31, 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 (i) a one time compensation charge of approximately $1.2 million arising from the previously announced retirement of certain managers; (ii) the decline in the exchange rate between the U.S. dollar and the Israeli Shekel that resulted in increased operational expenses; and (iii) the decrease in the net profit of Limco-Piedmont from $5.2 million in the twelve month periods ended December 31, 2007 to $2.7 million in the twelve month periods ended December 31, 2008. These factors were offset by improved results for the Company's operations in Israel for the three and twelve month periods ended December 31, 2008 compared with those of December 31, 2007.
Dr. Shmuel Fledel, TAT's CEO commented: "The fourth quarter and Year ended December 31, 2008 saw encouraging revenue growth for the TAT group, compared to the same periods ended December 31, 2007. 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 coming years. The expense control measures we have taken, including the consolidation of our two US based operating entities in one location, will contribute to improved earnings going forward. We believe that our business opportunities, along with anticipated expense control and improvement in operational performance should give us the ability to realize an improved 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 (i) design, development, 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; (ii) 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; and (iii) design, development, manufacture and sale of a broad range of electrical motor applications for airborne and ground systems
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. 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.
TAT TECHNOLOGIES AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) December 31, December 31, 2008 2007 ASSETS Current Assets: Cash and cash equivalents $ 33,908 $15,114 Short-term investments 11,300 28,806 Accounts receivable (net of allowance for doubtful accounts of $154 and $155 at December 31, 2008 and December 31, 2007, respectively) 22,086 14,679 Inventories 34,884 28,189 Other accounts receivable and prepaid expenses 6,536 4,047 Total current assets 108,714 90,835 Funds in respect of employee right upon retirement 3,705 4,156 Property, plant and equipment, net 15,187 11,927 Intangible assets, net 2,195 1,709 Goodwill 5,998 4,780 Total assets $135,799 $113,407 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Current maturities of long-term loans 150 Accounts payables 10,585 7,067 Other accounts payable and accrued expenses 7,363 4,310 Total current liabilities 18,098 11,377 LONG-TERM LIABILITIES: Fair value of Call options to minority 2,183 - Long-term loans, net of current maturities 5,188 - Liability in respect of employee rights upon retirement 4,468 4,175 Long-term deferred tax liability 1,087 581 12,926 4,756 Minority interest 28,700 24,481 SHAREHOLDERS' EQUITY: Share capital Ordinary shares of NIS 0.9 par value - Authorized: 10,000,000 shares at December 31, 2008 and 2007; Issued and outstanding: 6,552,671 shares and 6,542,671 shares at December 31, 2008 and 2007, respectively 2,204 2,201 Additional paid-in capital 39,476 39,308 Accumulated other comprehensive loss (763) - Retained earnings 35,158 31,284 SHAREHOLDERS' EQUITY: 76,075 72,793 Total liabilities and shareholders' equity $135,799 $113,407 TAT TECHNOLOGIES AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data) Three months ended Year ended December 31, December 31, 2008 2007 2008 2007 Revenues MRO services $ 14,012 $11,515 $54,276 $49,392 OEM products 13,202 4,874 31,723 18,928 Parts services 3,929 3,362 17,289 20,384 31,143 19,751 103,288 88,704 Cost and operating expenses Cost of revenue 25,209 15,058 80,563 65,207 Selling and marketing 901 902 4,369 3,719 General and administrative 3,689 2,958 12,407 10,995 Operating income 1,344 833 5,949 8,783 Interest income(expense) net 318 506 1,173 701 Loss on sale of investments (236) - (236) Other income, net (57) - 26,478 Income before taxes and minority interest 1,426 1,282 6,886 35,962 Provision for income taxes 421 (412) 1,794 3,212 Income before minority interest 1,005 1,694 5,092 32,750 Share in result of affiliated company prior to its consolidation - 674 - Minority interest income (221) (303) (1,500) (771) Net income $784 $1,391 $4,266 $31,979 Basic net income per share $0.12 $0.21 $0.65 $5.041 Diluted net income per share $0.12 $0.21 $0.65 $4.99 Weighted average number of shares - basic 6,554,504 6,542,671 6,546,055 6,344,041 Weighted average number of shares - diluted 6,559,587 6,558,689 6,566,249 6,407,504
