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
as of December 31, 2023 and December 31, 2022 respectively
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
December 31, 2022; Issued: 10,377,085 and 9,186,019 shares at
December 31, 2023 and at December 31, 2022 respectively;
Outstanding: 10,102,612 and 8,911,546 shares at December 31, 2023
and at December 31, 2022 respectively
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