0001178913-20-001640.txt : 20200527 0001178913-20-001640.hdr.sgml : 20200527 20200527160347 ACCESSION NUMBER: 0001178913-20-001640 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20200527 FILED AS OF DATE: 20200527 DATE AS OF CHANGE: 20200527 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TAT TECHNOLOGIES LTD CENTRAL INDEX KEY: 0000808439 STANDARD INDUSTRIAL CLASSIFICATION: AIRCRAFT ENGINES & ENGINE PARTS [3724] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-16050 FILM NUMBER: 20915213 BUSINESS ADDRESS: STREET 1: P.O. BOX 80 CITY: GEDERA ISRAEL STATE: L3 ZIP: 70750 BUSINESS PHONE: 2127025962 MAIL ADDRESS: STREET 1: P.O. BOX 80 STREET 2: 445 PARK AVE SUMMIT ROVINS & FELDESMAN CITY: GEDERA 70750 ISRAEL STATE: L3 FORMER COMPANY: FORMER CONFORMED NAME: GALAGRAPH LIMITED DATE OF NAME CHANGE: 19920609 6-K 1 zk2024496.htm 6-K


SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
          


F O R M 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of May 2020

TAT TECHNOLOGIES LTD.
(Name of Registrant)

      P.O.BOX 80, Gedera 70750 Israel
(Address of Principal Executive Office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ☐ No ☒

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ____________



TAT Technologies Ltd.

6-K Items

1.
Press Release dated May 27, 2020 re TAT Technologies Ltd. Reports First Quarter 2020 Results.

2


ITEM 1

Press Release
Source: TAT Technologies Limited

TAT Technologies Reports First Quarter 2020 Results

GEDERA, Israel, May 27, 2020 - TAT Technologies Ltd. (NASDAQ: TATT - News) (“TAT” or the “Company”), a leading provider of products and services to the commercial and military aerospace and ground defense industries, reported today its unaudited results for the three-month period ended March 31, 2020.

Financial highlights for the first quarter of 2020 (unaudited):
 
Revenues for Q1 2020 increased by 9% to $25.4 million, compared with $23.3 million in Q1 2019.

Gross profit for Q1 2020 increased by 36% to $4.5 million (17.8% of revenues), compared with $3.3 million (14% of revenues) in Q1 2019.

EBITDA for Q1 2020 increased by 69% to $2.2 million compared with $1.3 million in Q1 2019.

Net income for Q1 2020 increased to $0.45 million, or $0.05 per diluted share, compared with a net income of $0.1 million, or a net income of $0.01 per diluted share in Q1 2019.

Mr. Igal Zamir, TAT’s CEO and President commented on the results: “During the first quarter of 2020 we continued our growth and improvement trend that started in 2019. However, since mid-March we have been affected by the impact of the COVID 19 pandemic on the global aerospace industry, especially the commercial sector. As a result, we are now facing decline in both our MRO and OEM activity. TAT has taken the necessary measures to adjust its operating expenses to the decline in demand. However, we currently have low visibility on the duration and pace of recovery. We believe that the combination of a strong balance sheet and cash position, our military and cargo customers and the measures that have been taken to reduce expenses, will help us to successfully endure this challenging period”.

COVID-19 Update
In March 2020, the novel strain of coronavirus ("COVID-19") was recognized as a pandemic by the World Health Organization, and the outbreak became increasingly widespread in Israel, the United States and in other countries in which we operate.

TAT is following all guidelines and directives from governmental and regulatory agencies across its global operations in order to continue operating safely and responsibly, while meeting the needs of customers. In efforts to maintain a safe work environment and help contain the spread of COVID-19, the Company has transitioned to a work-from-home policy for those that are able and has suspended all non-essential employee travel and events. The Company will continue to monitor the development of and responses to the COVID-19 pandemic and the impact of COVID-19 on its business and respond accordingly. The full impact of the COVID-19 outbreak on the Company continues to evolve subsequent to the quarter ended March 31, 2020 and as of the date these unaudited financial statements are issued. As such, the full magnitude that the pandemic will have on the Company’s financial condition, liquidity and future results of operations is uncertain. As the pandemic continues to impact operations of businesses across the world, our ability to meet customer demands for products may be impaired or, similarly, our customers (including airlines and maintenance shops)  have experienced and may continue to experience adverse business consequences. Given the evolution of the COVID-19 pandemic and the varied global responses to curb its spread, the Company is not presently able to estimate the effects of the COVID-19 outbreak on its future results of operations, financial condition or liquidity for fiscal year 2020.
3


Non-GAAP Financial Measures

To supplement the consolidated financial statements presented in accordance with GAAP, the Company also presents 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 excluding the impact of: the Company's share in results of affiliated companies, share-based compensation, taxes on income, financial (expenses) income, net, and depreciation and amortization. Adjusted EBITDA, however, should not be considered as alternative to net income and operating income for the period and may not be indicative of the historic operating results of the Company; nor it is meant to be predictive of potential future results. Adjusted EBITDA is not 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 Adjusted EBITDA in pages 11 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 the area of 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.

4

TAT’s activities in the area of 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.

For more information of TAT Technologies Ltd., please visit our web-site:
www.tat-technologies.com

Contact:
Mr. Ehud Ben-Yair
Chief Financial Officer
Tel: 972-8-862-8503
ehudb@tat-technologies.com

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 change of control that will occur on the sale by the receiver of the Company’s shares held by our previously controlling stockholders, 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.

5

TAT TECHNOLOGIES AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)

 
March 31,
   
December 31,
 
   
2020
   
2019
 
   
(unaudited)
   
(audited)
 
ASSETS
           
CURRENT ASSETS:
           
Cash and cash equivalents
 
$
16,375
   
$
15,959
 
Accounts receivable, net
   
20,445
     
21,167
 
Inventory, net
   
44,309
     
43,907
 
Other current assets and prepaid expenses
   
1,883
     
2,605
 
                 
Total current assets
   
83,012
     
83,638
 
                 
NON-CURRENT ASSETS:
               
 Investment in affiliates
   
858
     
956
 
Funds in respect of employee rights upon retirement
   
1,205
     
1,404
 
 Deferred income taxes
   
236
     
228
 
Intangible assets, net
   
743
     
777
 
Property, plant and equipment, net
   
20,983
     
21,008
 
Operating lease right of use assets
   
8,155
     
6,664
 
                 
Total non-current assets
   
32,180
     
31,037
 
Total assets
 
$
115,192
   
$
114,675
 
                 
LIABILITIES AND EQUITY
               
                 
CURRENT LIABILITIES:
               
Accounts payable
 
$
8,896
   
$
11,981
 
Accrued expenses
   
9,171
     
7,393
 
Operating lease liabilities
   
1,654
     
1,330
 
                 
Total current liabilities
   
19,721
     
20,704
 
                 
NON CURRENT LIABILITIES:
               
   Other long-term liabilities
   
49
     
62
 
Liability in respect of employee rights upon retirement
   
1,623
     
1,751
 
Deferred income taxes
   
1,420
     
1,100
 
Operating lease liabilities
   
6,626
     
5,688
 
                 
 Total non-current liabilities
   
9,718
     
8,601
 
Total liabilities
   
29,439
   
$
29,305
 
                 
EQUITY:
               
Share capital
   
2,809
     
2,809
 
Additional paid-in capital
   
65,613
     
65,573
 
Treasury stock at cost
   
(2,088
)
   
(2,088
)
Accumulated other comprehensive income (loss)
   
(77
)
   
26
 
Retained earnings
   
19,496
     
19,050
 
Total shareholders' equity
   
85,753
     
85,370
 
                 
Total liabilities and shareholders' equity
 
$
115,192
   
$
114,675
 

6


TAT TECHNOLOGIES AND ITS SUBSIDIARIES
 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share and per share data)

   
Three months ended
   
Year ended
 
   
March 31,
   
December 31,
 
   
2020
   
2019
   
2019
 
   
(Unaudited)
   
(Unaudited)
   
(Audited)
 
                   
Revenues:
                 
Products
 
$
7,257
   
$
5,900
   
$
25,019
 
Services
   
18,093
     
17,396
     
77,013
 
     
25,350
     
23,296
     
102,032
 
                         
Cost of goods:
                       
Products
   
5,794
     
5,096
     
21,557
 
Services
   
15,043
     
14,950
     
64,913
 
     
20,837
     
20,046
     
86,470
 
Gross Profit
   
4,513
     
3,250
     
15,562
 
                         
Operating expenses:
                       
Research and development, net
   
60
     
23
     
74
 
Selling and marketing
   
1,234
     
1,053
     
5,259
 
General and administrative
   
2,193
     
2,057
     
8,251
 
     
3,487
     
3,133
     
13,584
 
                         
Operating income
   
1,026
     
117
     
1,978
 
                         
Financial income (expenses), net
   
160
     
(226
)
   
(451
)
                         
Income (loss) before taxes on income (tax benefit)
   
1,186
     
(109
)
   
1,527
 
                         
Taxes on income (tax benefit)
   
642
     
(188
)
   
589
 
                         
Income before equity investment
   
544
     
79
     
938
 
                         
Share in results of affiliated companies
   
(98
)
   
(19
)
   
(132
)
                         
Net income
 
$
446
   
$
60
   
$
806
 
                         
Basic and diluted income per share
                       
                         
Net income per share
 
$
0.05
   
$
0.01
   
$
0.1
 
                         
Weighted average number of shares outstanding
                       
Basic
   
8,874,696
     
8,874,696
     
8,874,696
 
Diluted
   
8,874,696
     
8,874,696
     
8,874,696
 

7


TAT TECHNOLOGIES AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)

   
Three months ended
   
Year ended
 
   
March 31,
   
December 31,
 
   
2020
   
2019
   
2019
 
   
(Unaudited)
   
(Unaudited)
   
(Audited)
 
                   
Net income
 
$
446
   
$
60
   
$
806
 
Other comprehensive income (loss)
                       
Net unrealized incomes (losses) from derivatives
   
(108
)
   
230
     
372
 
       Reclassification adjustments for gains included in net     income and inventory
   
5
     
16
     
(140
)
Total other comprehensive income
 
$
343
   
$
306
   
$
1,038
 

8


TAT TECHNOLOGIES AND ITS SUBSIDIARIES
 
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands, except share data)

   
TAT Technologies Ltd. Shareholders
       
   
Share capital
         
Accumulated
                   
   
Number of shares issued
   
Amount
   
Additional paid-in capital
   
other comprehensive income (loss)
   
Treasury shares
   
Retained earnings
   
Total equity
 
                                           
BALANCE AT DECEMBER 31, 2017
   
9,122,501
   
$
2,802
   
$
65,073
   
$
135
   
$
(2,088
)
 
$
22,652
   
$
88,574
 
CHANGES DURING THE YEAR ENDED DECEMBER 31, 2018:
                                                       
Comprehensive income
   
-
     
-
     
-
     
(341
)
   
-
     
(4,408
)
   
(4,749
)
 Share based compensation
   
-
     
-
     
272
     
-
     
-
     
-
     
272
 
 Exercise of options
   
26,668
     
7
     
190
     
-
     
-
     
-
     
197
 
BALANCE AT DECEMBER 31, 2018
   
9,149,169
   
$
2,809
   
$
65,535
   
$
(206
)
 
$
(2,088
)
 
$
18,244
   
$
84,294
 
CHANGES DURING THE YEAR ENDED DECEMBER 31, 2019:
                                                       
Comprehensive income
   
-
     
-
     
-
     
232
     
-
     
806
     
1,038
 
Share based compensation
   
-
     
-
     
38
     
-
     
-
     
-
     
38
 
BALANCE AT DECEMBER 31, 2019
   
9,149,169
   
$
2,809
   
$
65,573
   
$
26
   
$
(2,088
)
   
19,050
   
$
85,370
 
                                                         
CHANGES DURING THE THREE MONTHS ENDED MARCH 31, 2020 (unaudited):
                                                       
Comprehensive income (loss)
   
-
     
-
     
-
     
(103
)
   
-
     
446
     
343
 
 Share based compensation expenses
   
-
     
-
     
40
     
-
     
-
     
-
     
40
 
BALANCE AT MARCH 31, 2020 (unaudited)
   
9,149,169
   
$
2,809
   
$
65,613
   
$
(77
)
 
$
(2,088
)
 
$
19,496
   
$
85,753
 

9


TAT TECHNOLOGIES AND ITS SUBSIDIARIES
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

   
Three months ended
   
Year ended
 
   
March 31,
   
December 31,
 
   
2020
   
2019
   
2019
 
   
(Unaudited)
   
(Unaudited)
   
(audited)
 
                   
CASH FLOWS FROM OPERATING ACTIVITIES:
                 
Net income
 
$
446
   
$
60
   
$
806
 
Adjustments to reconcile net income to net cash provided by operating activities:
                       
                         
Depreciation and amortization
   
1,055
     
1,070
     
4,372
 
Loss (gain) from change in fair value of derivatives
   
109
     
(234
)
   
(311
)
Provision for doubtful accounts
   
205
     
-
     
38
 
Share in results of affiliated Company
   
98
     
19
     
132
 
Share based compensation
   
40
     
72
     
38
 
 Non cash finance expense
   
(229
)
   
142
     
354
 
Liability in respect of employee rights upon retirement
   
(128
)
   
(191
)
   
(897
)
Deferred income taxes, net
   
312
     
(630
)
   
(450
)
Changes in operating assets and liabilities:
                       
    Decrease (increase) in trade accounts receivable
   
517
     
(1,670
)
   
(1,928
)
    Decrease in other current assets and prepaid expenses
   
710
     
947
     
2,500
 
Decrease in inventory
   
(402
)
   
(2,593
)
   
(5,388
)
    Increase (decrease) in trade accounts payable
   
(3,184
)
   
1,337
     
3,292
 
    Increase in accrued expenses
   
1,778
     
1,002
     
982
 
    Decrease in other long-term liabilities
   
(13
)
   
(58
)
   
(118
)
Net cash provided by (used in) operating activities
 
$
1,314
   
$
(727
)
 
$
3,422
 
                         
CASH FLOWS FROM INVESTING ACTIVITIES:
                       
Investment in affiliated company
   
-
     
-
     
(10
)
Funds in respect of employee rights upon retirement
   
-
     
(22
)
   
-
 
Purchase of property and equipment
   
(898
)
   
(947
)
   
(3,403
)
Cash flows used in investing activities
 
$
(898
)
 
$
(969
)
 
$
(3,413
)
                         
CASH FLOWS FROM FINANCING ACTIVITIES:
                       
Cash flows provided by financing activities
 
$
-
   
$
-
   
$
-
 
                         
Net increase (decrease) in cash and cash equivalents
   
416
     
(1,696
)
   
9
 
                         
Cash and cash equivalents at beginning of period
   
15,959
     
15,950
     
15,950
 
                         
Cash and cash equivalents at end of period
 
$
16,375
   
$
14,254
   
$
15,959
 

10

TAT TECHNOLOGIES AND ITS SUBSIDIARIES
 
 RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA (NON-GAAP) (UNAUDITED)
(In thousands)

   
Three months ended
   
Year ended
 
   
March 31,
   
December 31,
 
   
2020
   
2019
   
2019
 
                   
Net income
 
$
446
   
$
60
   
$
806
 
Adjustments:
                       
Share in results and sale of equity investment of affiliated companies
   
98
     
19
     
132
 
Taxes on income (tax benefit)
   
642
     
(188
)
   
589
 
Financial income (expenses), net
   
(160
)
   
226
     
451
 
Depreciation and amortization
   
1,103
     
1,070
     
4,516
 
Share based compensation
   
40
     
72
     
38
 
Adjusted EBITDA
 
$
2,169
   
$
1,259
   
$
6,532
 

11


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
TAT TECHNOLOGIES LTD.
 
   
(Registrant)
 
       
 
By:
/s/ Ehud Ben-Yair
 
   
Ehud Ben-Yair
 
   
Chief Financial Officer
 

Date: May 27, 2020

12