6-K 1 zk1719647.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 March 2017

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 March 7, 2017 re TAT Technologies Ltd. Reports Fourth Quarter and Full Year 2016 Results.

2

ITEM 1

Press Release
Source: TAT Technologies Limited

TAT Technologies Reports Fourth Quarter and Full Year 2016 Results

GEDERA, Israel, March 7, 2017 - 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 year ended December 31, 2016.

Financial Highlights for the fourth quarter of 2016 (unaudited):
 
Total Revenue: $ 25 million compared to $ 21.7 million in the fourth quarter of 2015, growth of 15.2% in revenues compared to the fourth quarter of 2015.

Adjusted EBITDA: $ 3.1 million compared to negative adjusted EBITDA of $ (1) million in the fourth quarter of 2015.
 
Net income: $ 1.6 million compared to $ 3 million in the fourth quarter of 2015
 
Net income / Loss (Non-GAAP): $ 1.8 million compared to net loss of $ (1) million in the fourth quarter of 2015. The net income (Non GAAP) of the fourth quarter of 2015 includes several adjustments, as detailed in the appendix in page 9 below, including $ 4.8 million gain on bargain purchase.
 
Earnings per share basic and diluted: $ 0.18 per share compared to $ 0.34 per share in the fourth quarter of 2015.
 
Earnings (loss) per share basic and diluted (Non-GAAP): $ 0.20 per share compared to a loss of $ (0.11) in the fourth quarter of 2015.
 
Net cash provided by operating activities: $ 4.8 million compared to $ 0.9 million in the fourth quarter of 2015.

Financial Highlights for 2016 (unaudited):
 
Total Revenue: $ 95.8 million compared to $ 85.6 million in 2015, growth of 11.9% in revenues compared to fiscal year 2015.
 
Adjusted EBITDA: $ 7.9 million compared to $ 3.6 million in 2015.
 
Net income: $ 0.1 million compared to $ 5.8 million in 2015.
 
Net Income (Non-GAAP): $ 2.8 million compare to $ 0.4 million in 2015.
The net income (Non GAAP) for 2015 includes several adjustments, as detailed in the appendix in page 9 below, including $ 4.8 million gain on bargain purchase.
 
Taxes on income: include $ 2.7 million related to a deferred tax liability due to actual distribution of earnings from foreign subsidiaries of the Company and due to the possibility of future distribution of earnings from such foreign subsidiaries.
 
Earnings per share basic and diluted: $ 0.01 per share compared to $ 0.66 per share in 2015.
 
3

Earnings per share basic and diluted (Non-GAAP): $ 0.32 per share compared to $ 0.04 in 2015.
 
Net cash provided by operating activities: $ 5.5 million compared to $ 0.7 million in 2015.
 
Dividend distribution: During August 2016, the company distributed to shareholders a cash dividend in the total amount of $3.0 million.
 
Mr. Igal Zamir, TAT's President and CEO commented on the results: "Our fourth quarter 2016 results reflect the impact of our operational efficiency and cost cutting measures, with another consecutive improvement in profitability. Relatively strong sales of heat exchangers contributed to the growth in revenues in the current quarter. We continue to implement operational efficiency and cost cutting measures. Our strong balance sheet and cash position allowed us to pay a $3 million dividend in 2016 and will enable us to pursue business opportunities as part of our ongoing efforts to strengthen our business".
 
Non-GAAP Financial Measures

To supplement the consolidated financial statements presented in accordance with GAAP, the Company also presents a Non-GAAP presentation of Net Income and 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.  Non-GAAP Net Income excludes changes, income or losses, as applicable, related to one or more of the following: (1) share-based compensation expenses and/or (2) certain tax impact and/or (3) acquisition related expenses and/or (4) share in results of equity investment of affiliated companies. 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, and depreciation and amortization.  Non-GAAP Net Income and 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 Net Income and Adjusted EBITDA are not measures 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 Net Income to Non-GAAP Net Income and Adjusted EBITDA in pages 9 and 13 below.

About TAT Technologies LTD
 
TAT Technologies Ltd. is a leading provider of products and services to the commercial and military aerospace and ground defense industries. TAT operates under four segments:  (i) Original Equipment Manufacturing or "OEM" of Heat Management Solutions (ii) Heat Transfer Services and Products (iii) Maintenance, Repair and Overhaul or "MRO" services of Aviation Components; and (iv) overhaul and coating of jet engine blades and components

TAT's activities in the area of OEM Heat Management Solutions are focused on the design, development, manufacture, and sale of the following: (i) a broad range of heat transfer components including heat exchangers, pre-coolers and oil/fuel hydraulic coolers used in mechanical and electronic systems on-board commercial, military and business aircraft; (ii) environmental control and cooling systems on board aircraft and for ground applications; and (iii) a variety of other electronic and mechanical aircraft accessories and systems such as pumps, valves, power systems and turbines.

4

TAT's activities in the area of Heat Transfer Services and Products include the maintenance, repair and overhaul of heat transfer equipment and to a lesser extent, the manufacture of certain heat transfer product parts. TAT's Limco subsidiary operates an FAA certified repair station, which provides heat transfer MRO services and products 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 maintenance, repair and overhaul 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 jet engine overhaul includes the overhaul and coating of jet engine components such as turbine vanes and blades, fan blades, variable inlet guide vanes, afterburner flaps and other components.

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

Guy Nathanzon – CFO
TAT Technologies Ltd.
Tel: 972-8-862-8500
guyn@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)

 
December 31,
   
December 31,
 
   
2016
   
2015
 
   
(unaudited)
   
(audited)
 
ASSETS
           
CURRENT ASSETS:
           
Cash and cash equivalents
 
$
21,433
   
$
18,688
 
Short-term bank deposits
   
964
     
8,122
 
Accounts receivable, net
   
21,572
     
19,151
 
Other current assets and prepaid expenses
   
1,687
     
3,025
 
Inventory, net
   
39,269
     
36,664
 
                 
Total current assets
   
84,925
     
85,650
 
                 
NON-CURRENT ASSETS:
               
Investment in affiliates
   
1,019
     
169
 
Funds in respect of employee rights upon retirement
   
2,660
     
2,626
 
Deferred income taxes
   
896
     
890
 
Intangible assets, net
   
1,179
     
1,314
 
Property, plant and equipment, net
   
21,298
     
18,934
 
                 
Total non-current assets
   
27,052
     
23,933
 
                 
Total assets
 
$
111,977
   
$
109,583
 
                 
LIABILITIES AND EQUITY
               
                 
CURRENT LIABILITIES:
               
Accounts payable
   
8,406
     
7,022
 
Accrued expenses
   
9,836
     
7,815
 
                 
Total current liabilities
   
18,242
     
14,837
 
                 
NON CURRENT LIABILITIES:
               
Other long-term liabilities
   
151
     
189
 
Liability in respect of employee rights upon retirement
   
2,994
     
2,871
 
Deferred income taxes
   
1,938
     
262
 
                 
Total non-current liabilities
   
5,083
     
3,322
 
                 
Total liabilities
   
23,325
     
18,159
 
                 
EQUITY:
               
Share capital
   
2,797
     
2,793
 
Additional paid-in capital
   
64,760
     
64,529
 
Treasury stock at cost
   
(2,088
)
   
(2,088
)
Accumulated other comprehensive loss
   
(73
)
   
(4
)
Retained earnings
   
23,256
     
26,194
 
Total shareholders' equity
   
88,652
     
91,424
 
                 
Total liabilities and shareholders' equity
 
$
111,977
   
$
109,583
 

6

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

   
Three months ended
   
Twelve months ended
 
   
December 31,
 
   
2016
   
2015
   
2016
   
2015
 
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Audited)
 
Revenues:
                       
Products
 
$
7,481
   
$
8,359
   
$
30,431
   
$
31,339
 
Services
   
17,504
     
13,344
     
65,363
     
54,268
 
     
24,985
     
21,703
     
95,794
     
85,607
 
                                 
Cost of goods:
                               
Products
   
5,609
     
5,875
     
23,788
     
24,466
 
Services
   
13,562
     
13,530
     
52,969
     
47,476
 
     
19,171
     
19,405
     
76,757
     
71,942
 
Gross Profit
   
5,814
     
2,298
     
19,037
     
13,665
 
                                 
Operating expenses:
                               
Research and development, net
   
189
     
320
     
1,140
     
890
 
Selling and marketing
   
1,008
     
773
     
3,876
     
2,903
 
General and administrative
   
2,631
     
2,488
     
10,023
     
8,469
 
Other loss (income)
   
(117
)
   
631
     
(138
)
   
631
 
Gain on bargain purchase
   
-
     
(4,833
)
   
-
     
(4,833
)
     
3,711
     
(621
)
   
14,901
     
8,060
 
Operating income
   
2,103
     
2,919
     
4,136
     
5,605
 
                                 
Financial expenses, net
   
(62
)
   
(117
)
   
(154
)
   
(349
)
                                 
Income before taxes on income
   
2,041
     
2,802
     
3,982
     
5,256
 
                                 
Taxes on income
   
420
     
(455
)
   
3,865
     
644
 
                                 
Income before equity investment
   
1,621
     
3,257
     
117
     
4,612
 
                                 
Share in results and sale of equity investment of affiliated companies
   
(4
)
   
(254
)
   
(55
)
   
1,237
 
                                 
Net income
 
$
1,617
   
$
3,003
   
$
62
   
$
5,849
 
                                 
Basic and diluted income per share
                               
                                 
Net income per share
 
$
0.18
   
$
0.34
   
$
0.01
   
$
0.66
 
                                 
Weighted average number of shares outstanding
                               
Basic
   
8,828,444
     
8,808,344
     
8,828,444
     
8,808,344
 
Diluted
   
8,833,226
     
8,813,533
     
8,830,764
     
8,810,689
 

7

 
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
 
   
Three months ended
   
Twelve months ended
 
   
December 31,
 
   
2016
   
2015
   
2016
   
2015
 
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Audited)
 
                         
Net income
 
$
1,617
   
$
3,003
   
$
62
   
$
5,849
 
Other comprehensive income
                               
Net unrealized gains (losses) from derivatives
   
(199
)
   
-
     
174
     
-
 
Reclassification adjustments  for gains included in net income and inventory
   
(29
)
   
(4
)
   
(243
)
   
(4
)
Total other comprehensive income (loss)
 
$
1,389
   
$
2,999
   
$
(7
)
 
$
5,845
 

8

 
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
 
 RECONCILIATION OF GAAP TO NON-GAAP RESULTS (UNAUDITED)
(In thousands, except share and per share data)

   
Three months ended
   
Twelve months ended
 
   
December 31,
 
   
2016
   
2015
   
2016
   
2015
 
                         
Reported net income on GAAP basis
 
$
1,617
   
$
3,003
   
$
62
   
$
5,849
 
Adjustments:
                               
Gain on bargain purchase
   
-
     
(4,833
)
   
-
     
(4,833
)
Tax adjustments re non-GAAP adjustments (1)
   
198
     
-
     
2,685
     
-
 
Other expenses (Acquisition related expenses)
   
(105
)
   
553
     
(105
)
   
553
 
Share in results of equity investment of affiliated company
   
4
     
254
     
55
     
(1,237
)
Share based compensation
   
41
     
12
     
105
     
38
 
Non-GAAP net income (loss)
 
$
1,755
   
$
(1,011
)
 
$
2,802
   
$
370
 
                                 
Non-GAAP net income (loss) per share
 
$
0.20
   
$
(0.11
)
 
$
0.32
   
$
0.04
 
                                 
Weighted average number of shares outstanding
                               
Basic
   
8,828,444
     
8,808,344
     
8,828,444
     
8,808,344
 
Diluted
   
8,833,226
     
8,813,533
     
8,830,764
     
8,810,689
 
 
(1)
During 2016 the Company distributed dividend from its foreign subsidiaries earnings. As a result the company accrued deferred tax liability due to actual distribution of earnings from foreign subsidiaries of the Company and due to the possibility of future distribution of earnings from such foreign subsidiaries.

9


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
   
Non-controlling
interest
   
Total
equity
 
                                                 
BALANCE AT DECEMBER 31, 2013 (audited)
   
9,079,709
   
$
2,792
   
$
64,454
   
$
(429
)
 
$
(2,088
)
 
$
20,913
   
$
1,961
   
$
87,603
 
CHANGES DURING THE YEAR ENDED DECEMBER 31, 2014 (audited):
                                                               
Comprehensive income
   
-
     
-
     
-
     
429
     
-
     
1,432
     
-
     
1,861
 
Share based compensation expenses
   
-
     
-
     
38
     
-
     
-
     
-
     
-
     
38
 
 Exercise of option
   
3,108
     
1
     
(1
)
   
-
     
-
     
-
     
-
     
-
 
 Dividend distributed
   
-
     
-
     
-
     
-
     
-
     
(2,000
)
   
-
     
(2,000
)
 Sale of subsidiary
   
-
     
-
     
-
     
-
     
-
     
-
     
(1,961
)
   
(1,961
)
BALANCE AT DECEMBER 31, 2014 (audited)
   
9,082,817
   
$
2,793
   
$
64,491
   
$
-
   
$
(2,088
)
 
$
20,345
   
$
-
   
$
85,541
 
CHANGES DURING THE YEAR ENDED DECEMBER 31, 2015 (audited):
                                                               
Comprehensive income (loss)
   
-
     
-
     
-
     
(4
)
   
-
     
5,849
     
-
     
5,845
 
Share based compensation expenses
   
-
     
-
     
38
     
-
     
-
     
-
     
-
     
38
 
BALANCE AT DECEMBER 31, 2015 (audited)
   
9,082,817
   
$
2,793
   
$
64,529
   
$
(4
)
 
$
(2,088
)
 
$
26,194
   
$
-
   
$
91,424
 
CHANGES DURING THE YEAR ENDED DECEMBER 31, 2016 (unaudited):
                                                               
Comprehensive income (loss)
   
-
     
-
     
-
     
(69
)
   
-
     
62
     
-
     
(7
)
Share based compensation expenses
   
-
     
-
     
105
     
-
     
-
     
-
     
-
     
105
 
 Exercise of option
   
20,100
     
4
     
126
     
-
     
-
     
-
     
-
     
130
 
 Dividend distributed
   
-
     
-
     
-
     
-
     
-
     
(3,000
)
   
-
     
(3,000
)
BALANCE AT DECEMBER 31, 2016 (unaudited)
   
9,102,917
   
$
2,797
   
$
64,760
   
$
(73
)
 
$
(2,088
)
 
$
23,256
   
$
-
   
$
88,652
 


10

 
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 
   
Three months ended
   
Twelve months ended
 
   
December 31,
 
   
2016
   
2015
   
2016
   
2015
 
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Audited)
 
                         
CASH FLOWS FROM OPERATING ACTIVITIES:
                       
Net income
 
$
1,617
   
$
3,003
   
$
62
   
$
5,849
 
                                 
Adjustments to reconcile net income to net cash provided by operating activities:
                               
                                 
Depreciation and amortization
   
976
     
891
     
3,636
     
2,781
 
Loss on sale of  property, plant and equipment
   
30
     
-
     
12
     
-
 
Interest from short-term bank deposits and restricted deposits
   
(13
)
   
(13
)
   
(24
)
   
(33
)
Loss (gain) from change in fair value of derivatives
   
18
     
10
     
(152
)
   
10
 
Provision for doubtful accounts
   
(82
)
   
62
     
(29
)
   
206
 
Share in results and sale of equity investment of affiliated Company
   
4
     
254
     
55
     
(1,237
)
Share based compensation
   
41
     
12
     
105
     
38
 
Gain on bargain purchase
   
-
     
(4,833
)
   
-
     
(4,833
)
Liability in respect of employee rights upon retirement
   
63
     
(25
)
   
123
     
28
 
Deferred income taxes, net
   
(143
)
   
(693
)
   
1,670
     
(21
)
Changes in operating assets and liabilities:
                               
Decrease (increase) in trade accounts receivable
   
1,149
     
1,528
     
(2,392
)
   
(2,375
)
Decrease (increase) in other current assets and prepaid expenses
   
1,456
     
191
     
1,487
     
(85
)
Increase in inventory
   
(1,340
)
   
(153
)
   
(2,707
)
   
(571
)
Increase (decrease) in trade accounts payable
   
(187
)
   
1,237
     
1,192
     
436
 
Increase (decrease) in  accrued expenses
   
1,163
     
(527
)
   
2,521
     
525
 
Increase (decrease) in other long-term liabilities
   
85
     
(10
)
   
(38
)
   
15
 
Net cash provided by operating activities
 
$
4,837
   
$
934
   
$
5,521
   
$
733
 
                                 
  CASH FLOWS FROM INVESTING ACTIVITIES:
                               
Acquisitions of subsidiary, net of cash acquired
   
-
     
(1,796
)
   
-
     
(1,796
)
Investment in affiliated company
   
(516
)
   
-
     
(905
)
   
-
 
Proceeds from sale of equity investment of affiliated Company
   
-
     
-
     
-
     
3,624
 
Funds in respect of employee rights upon retirement
   
(73
)
   
69
     
2
     
8
 
Proceeds from sale of property and equipment
   
(1
)
   
-
     
17
     
9
 
Purchase of property and equipment
   
(1,041
)
   
(871
)
   
(5,702
)
   
(3,315
)
Maturities of short-term deposits
   
-
     
-
     
7,182
     
-
 
 Investments in short-term deposits
   
-
     
(3,000
)
   
-
     
(3,000
)
Cash flows provided by (used in) investing activities
 
$
(1,631
)
 
$
(5,598
)
 
$
594
   
$
(4,470
)
                                 
 CASH FLOWS FROM FINANCING ACTIVITIES:
                               
Repayments of short-term loans
   
-
     
(469
)
   
-
     
(469
)
Realization of contingency
   
-
     
-
     
(500
)
   
-
 
Payment of cash dividend
   
-
     
-
     
(3,000
)
   
-
 
 Exercise of options
   
-
     
-
     
130
     
-
 
Cash flows used in financing activities
 
$
-
   
$
(469
)
 
$
(3,370
)
 
$
(469
)
                                 
Net increase (decrease) in cash and cash equivalents
   
3,206
     
(5,133
)
   
2,745
     
(4,206
)
                                 
Cash and cash equivalents at beginning of period
   
18,227
     
23,821
     
18,688
     
22,894
 
                                 
Cash and cash equivalents at end of period
 
$
21,433
   
$
18,688
   
$
21,433
   
$
18,688
 

11

TAT TECHNOLOGIES AND ITS SUBSIDIARIES
 
 RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA (NON-GAAP) (UNAUDITED)
(In thousands)
 
   
Three months ended
   
Twelve months ended
 
   
December 31,
 
   
2016
   
2015
   
2016
   
2015
 
                         
Net income
 
$
1,617
   
$
3,003
   
$
62
   
$
5,849
 
Adjustments:
                               
Share in results and sale of equity investment of affiliated companies
   
4
     
254
     
55
     
(1,237
)
Taxes on income
   
420
     
(455
)
   
3,865
     
644
 
Financial expenses, net
   
62
     
117
     
154
     
349
 
Gain on bargain purchase
   
-
     
(4,833
)
   
-
     
(4,833
)
Depreciation and amortization
   
976
     
891
     
3,636
     
2,781
 
Share based compensation
   
41
     
12
     
105
     
38
 
Adjusted EBITDA
 
$
3,120
   
$
(1,011
)
 
$
7,877
   
$
3,591
 

12

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/ Guy Nathanzon  
    Guy Nathanzon  
    Chief Financial Officer  
       
Date: March 7, 2017
 
13