TAT Technologies Delivers 23.6% Revenue Growth, 80.7% Increase in Net Profit, and 56.2% Increase in adjusted EBITDA, and Continued Margin Expansion for the First Quarter of 2025
NETANYA, Israel, May 19, 2025 /PRNewswire/ -- TAT Technologies Ltd. (NASDAQ: TATT) (TASE: 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 unaudited results for the three months ended March 31, 2025.
Financial Highlights for the First Quarter of 2025:
-- Revenue for the first quarter of 2025 increased by 23.6% to $42.1 million
compared to $34.1 million in the first quarter of 2024.
-- Gross profit for the first quarter of 2025 increased by 40.9% to $10.0
million compared to $7.1 million in the first quarter of 2024.
-- Gross margin for the first quarter of 2025 improved by 290bp to 23.6% of
revenue compared to 20.7% of revenue in the first quarter of 2024.
-- Adjusted EBITDA for the first quarter of 2025 increased by 56.2% to $5.7
million (13.6% of revenue) compared to $3.7 million (10.8% of revenue) in
the first quarter of 2024.
-- Operating income for the first quarter of 2025 increased by 89.0% to $4.2
million (9.9% of revenue) compared to $2.2 million (6.5% of revenue) in
the first quarter of 2024.
-- Net income for the first quarter of 2025 increased by 80.7% to $3.8
million compared to a net income of $2.1 million in the first quarter of
2024.
-- Cash flow from operating activities was negative ($4.9) million in the
first quarter of 2025 compared to negative ($3.5) million in the first
quarter of 2024.
Mr. Igal Zamir, TAT's CEO and President, commented: "Driven by strong execution and robust market demand, TAT Technologies continues to demonstrate its earnings power. During the first quarter, we delivered revenue growth of 23.6% and an increase of 56.2% in adjusted EBITDA, compared to the same period in 2024, expanding our bottom line even more rapidly than our top line. TAT has developed a multi-year track record of consistent profitability, delivering double-digit year-over-year growth for the last three years, while expanding profit margins."
"Our strategic growth initiatives, implemented over the past few years, have significantly expanded our addressable market and diversified our revenue streams," continued Mr. Zamir. "Despite industry wide supply chain challenges, our 'Customer First' initiative, which includes bolstering parts and rotatable inventory in key areas, enabled us to achieve our financial goals, fulfill customer demand, and strengthen our market position. While we expanded inventory levels and utilized additional cash, these strategic investments enhance our resilience and position us to capture market share in a dynamic supply environment."
"In the first quarter, we secured over $52 million in new orders and long-term agreements, bringing our total backlog to $439 million. This provides us with strong visibility and confidence in our continued growth and profitability. While broader market dynamics may influence near-term order flow, the demand for our expertise and capacity remains robust, positioning us well to further expand our backlog throughout the year."
"To mitigate the evolving trade policy landscape, we're closely monitoring recent tariff changes and taking measured steps to minimize any impact on our operations. Our teams are in active, solution-focused discussions with key suppliers to ensure material flow remains uninterrupted and cost increases are controlled. At the same time, we're working closely with our customers to align expectations, adjust planning as needed, and maintain the high service levels they rely on."
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 with a more complete understanding of the Company's underlying operational results, trends, and performance. The Adjusted EBITDA is calculated as net income, excluding the impact of: the Company's share in profit of equity investment of affiliated companies, share-based compensation, provision for income taxes, financial (expenses) income, net, and depreciation and amortization. The Adjusted EBITDA, however, should not be considered as an alternative to net income and operating income for the period and may not be indicative of the historic operating results of the Company; nor is it meant to be predictive of potential future results. The 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 Adjusted EBITDA below.
Investor Call Information
TAT Technologies will host a webcast to review the quarterly results on Tuesday, May 20, 2025, at 8:30 a.m. ET. Interested investors can register for the webcast at the link below or visit the investor relations section of the Company's website at https://tat-technologies.com/investors/.
-- Conference call
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's controlling shareholder 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.
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 about TAT Technologies Ltd., please visit our website:
www.tat-technologies.com.
Contact:
Mr. Eran Yunger
Director of IR
erany@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, [LTAs] and backlog, 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. 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 LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
March 31, December 31,
2025 2024
----------- --------------
(unaudited) (audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 5,020 $ 7,129
Accounts receivable, net of allowance for
credit losses of $350 and $400 thousand as
of March 31, 2025 and December 31, 2024,
respectively 33,223 29,697
Inventory 72,980 68,540
Prepaid expenses and other current assets 8,375 7,848
Total current assets 119,598 113,214
----------- --------------
NON-CURRENT ASSETS:
Property, plant and equipment, net 42,474 41,576
Operating lease right of use assets 2,115 2,282
Intangible assets, net 1,633 1,553
Investment in affiliates 3,722 2,901
Funds in respect of employee rights upon
retirement 641 654
Deferred income taxes 358 877
Restricted deposit 315 305
Total non-current assets 51,258 50,148
----------- --------------
Total assets $ 170,856 $ 163,362
=========== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term loans $ 1,976 $ 2,083
Short-term loans 10,719 4,350
Accounts payable 12,592 12,158
Accrued expenses and other 15,572 18,594
Current maturities of operating lease
liabilities 839 939
Total current liabilities 41,698 38,124
----------- --------------
NON-CURRENT LIABILITIES:
Long-term loans 10,391 10,938
Liability in respect of employee rights upon
retirement 966 986
Operating lease liabilities 1,269 1,345
Total non-current liabilities 12,626 13,269
----------- --------------
Total liabilities 54,324 51,393
----------- --------------
STOCKHOLDERS' EQUITY:
Share capital, no par value - -
Additional paid-in capital 89,919 89,697
Treasury stock at cost (2,088) (2,088)
Accumulated other comprehensive income (loss) 452 (76)
Retained earnings 28,249 24,436
----------- --------------
Total shareholders' equity 116,532 111,969
Total liabilities and stockholders' equity $ 170,856 $ 163,362
=========== ==============
TAT TECHNOLOGIES LTD. 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,
---------------------------------- -------------------
2025 2024 2024
----------------- --------------- -------------------
(Unaudited) (Unaudited) (Audited)
Revenues:
Products $ 12,724 $ 11,935 $ 47,710
Services 29,418 22,153 104,406
----------------- --------------- -------------------
42,142 34,088 152,116
----------------- --------------- -------------------
Cost of goods:
Products 8,331 8,986 33,986
Services 23,857 18,036 85,116
----------------- --------------- -------------------
32,188 27,022 119,102
----------------- --------------- -------------------
Gross profit 9,954 7,066 33,014
----------------- --------------- -------------------
Operating
expenses:
Research and
development,
net 324 277 1,248
Selling and
marketing, net 1,928 1,660 7,746
General and
administrative,
net 3,532 3,309 11,901
Other income - (388) (383)
----------------- --------------- -------------------
5,784 4,858 20,512
----------------- --------------- -------------------
Operating income 4,170 2,208 12,502
Interest expenses (335) (343) (1,472)
Other financial
income
(expenses), net 277 (106) (477)
----------------- --------------- -------------------
Income before
taxes on income
(taxes
benefit) 4,112 1,759 10,553
Provision for
taxes on income
(taxes
benefit) 592 (153) 195
----------------- --------------- -------------------
Profit before
share of equity
investment 3,520 1,912 10,358
Share in profits
of equity
investment of
affiliated
companies 293 198 809
Net income $ 3,813 $ 2,110 $ 11,167
===================
Basic and diluted
earnings per
share:
Basic $ 0.35 $ 0.20 $ 1.08
================= =============== ===================
Diluted $ 0.34 $ 0.19 $ 1.00
================= =============== ===================
Weighted average
number of shares
outstanding:
Basic 10,940,358 10,378,978 10,363,978
================= =============== ===================
Diluted 11,211,271 10,554,351 11,215,827
================= =============== ===================
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
Three months ended Year ended
March 31, December 31,
--------------------------- ------------
2025 2024 2024
----------- ------------
(Unaudited) (Unaudited) (Audited)
Net income $ 3,813 $ 2,110 $ 11,167
Other comprehensive income
(loss), net
Net unrealized losses from
derivatives - (27) (27)
Change in foreign currency
translation adjustments 528 - (76)
----------- -------------- ------------
Total comprehensive income $ 4,341 $ 2,083 $ 11,064
=========== ============== ============
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands, except share data)
Share capital Accumulated
-------------------
other
Number of Additional comprehensive
shares paid-in income Treasury Retained Total
issued Amount capital (loss) shares earnings equity
---------- ------- -------------- ------------- ----------- ----------- --------
BALANCE AT
DECEMBER 31,
2023 10,377,085 3,140 76,335 27 (2,088) 13,269 90,683
CHANGES DURING
THE YEAR ENDED
DECEMBER 31,
2024:
Comprehensive
income (loss) - - - (103) - 11,167 11,064
Exercise of
option 164,406 12 (12) - - - -
Cancel of
shares par
value - (3,152) 3,152 - - - -
Issuance of
common shares
net of
issuance costs
of $162
thousands 673,340 - 9,827 - - - 9,827
Share based
compensation - - 395 - - - 395
---------- ------- -------------- ------------- ----------- ----------- --------
BALANCE AT
DECEMBER 31,
2024 11,214,831 - 89,697 (76) (2,088) 24,436 111,969
CHANGES DURING
THE PERIOD
ENDED MARCH
31, 2025
(unaudited):
Comprehensive
income - - - 528 - 3,813 4,341
Share based
compensation - - 222 - - - 222
BALANCE AT
MARCH 31, 2025
(unaudited) 11,214,831 $ - $ 89,919 $ 452 $ (2,088) $ 28,249 $116,532
========== ======= ============== ============= =========== =========== ========
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three months ended Year ended
-------------------------- ------------
March 31, December 31,
-------------------------- ------------
2025 2024 2024
------------ ------------ ------------
(Unaudited) (Unaudited) (audited)
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $ 3,813 $ 2,110 $ 11,167
Adjustments to reconcile
net income to net cash
used in operating
activities:
Depreciation and
amortization 1,305 1,374 5,455
Loss from change in fair
value of derivatives - 22 22
Change in funds in respect
of employee rights upon
retirement 13 5 10
Net change in operating
right of use asset and
operating lease
liability (9) 4 18
Non-cash financial
expenses (83) (214) (187)
Decrease in restructuring
plan provision - (20) (63)
Change in allowance for
credit losses (50) - 55
Share in profits of equity
investment of affiliated
companies (293) (198) (809)
Share based compensation 222 41 395
Liability in respect of
employee rights upon
retirement (20) 3 (14)
Gain on disposal of
property, plant and
equipment - (354) (478)
Deferred income taxes, net 519 (409) 117
Changes in operating
assets and liabilities:
Increase in trade
accounts receivable (3,476) (820) (9,743)
Increase in prepaid
expenses and other
current assets (527) (181) (1,473)
Increase in inventory (3,861) (2,637) (17,165)
Increase (decrease) in
trade accounts
payable 434 (700) 2,170
Increase (decrease) in
accrued expenses and
other (3,022) (1,573) 4,705
Net cash used in
operating activities (5,035) (3,547) (5,818)
------------ ------------ ------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Proceeds from sale of
property and equipment - 1,306 1,275
Purchase of property and
equipment (2,862) (989) (5,126)
Purchase of intangible
assets - - -
Net cash provided by
(used in) investing
activities (2,862) 317 (3,851)
------------ ------------ ------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Repayments of long-term
loans (571) (440) (2,016)
Net change in short term
credit from banks 6,369 (4,000) (7,650)
Proceeds from issuance of
common shares, net - - 9,827
Exercise of options - 1 -
------------ ------------ ------------
Net cash provided by
(used in) financing
activities 5,798 (4,439) 161
------------ ------------ ------------
Net decrease in cash and
cash equivalents and
restricted cash (2,099) (7,669) (9,508)
Cash and cash equivalents
and restricted cash at
beginning of period 7,434 16,942 16,942
------------ ------------ ------------
Cash and cash equivalents
and restricted cash at
the end of period $ 5,335 $ 9,273 $ 7,434
============ ============ ============
SUPPLEMENTARY INFORMATION
ON INVESTING ACTIVITIES
NOT INVOLVING CASH FLOW:
Additions to operating
lease right-of-use assets
and operating lease
liabilities 147 345 983
Reclassification between
inventory and property,
plant and equipment 579 60 155
Supplemental disclosure
of cash flow
information:
Interest paid 267 (442) (1,400)
Income taxes paid - - (39)
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA (NON-GAAP) (UNAUDITED)
(In thousands)
Three months ended Year ended
------------------------------------ -------------------
March 31, December 31,
------------------------------------ -------------------
2025 2024 2024
--------------- ------------------- -------------------
Net income $ 3,813 $ 2,110 $ 11,167
Adjustments:
Provision for
income taxes
(taxes
benefit) 592 (153) 195
Financial
expense, net 58 449 1,949
Depreciation and
amortization 1,353 1,428 5,717
Share based
compensation 222 41 395
Share in
profits of
equity
investment of
affiliated
companies (293) (198) (809)
--------------- ------------------- -------------------
Adjusted EBITDA $ 5,745 $ 3,677 $ 18,614
=============== =================== ===================
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SOURCE TAT Technologies Ltd
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May 19, 2025 18:16 ET (22:16 GMT)
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