6-K 1 zk1720798.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 November 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 November 15, 2017 re TAT Technologies Ltd. Reports Third Quarter 2017 Results.


2


ITEM 1

Press Release
Source: TAT Technologies Limited

TAT Technologies Reports Continued Improvement in Q3 2017

The Company is reporting revenue growth of 13% in the nine-month period ended September 30,
2017 compared to the nine-month period ended September 30, 2016 and 12% growth in Q3/17
compared to Q3/16.

Company achieved adjusted EBITDA of $7.8 million for the nine-month period ended September 30, 2017
compared with $4.8 million in the nine-month period ended September 30, 2016, an increase
of 64%

GEDERA, Israel, November 15, 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 three-month and nine-month periods ended September 30, 2017.

Key Financial Highlights:

·
Revenues for the nine-month period that ended on September 30, 2017 were $80.2 million compared with $70.8 million in the nine-month period that ended on September 30, 2016, a 13% growth. Revenues for Q3/17 were $26.6 million compared with $23.6 million in Q3/16, a 12% growth.

·
Adjusted EBITDA for the nine-month period that ended on September 30, 2017 increased to $7.8 million compared with $4.8 million in the nine-month period that ended on September 30, 2016, an increase of 64%. Adjusted EBITDA for Q3/17 was $2.5 million compared with $2.5 million in Q3/16.

·
The Company achieved GAAP net income of $2.7 million, or $0.30 per diluted share in the nine-month period that ended on September 30, 2017 compared with a net loss of $1.6 million, or a loss of $0.18 per diluted share in the nine-month period that ended on September 30, 2016.  GAAP net income for Q3/17 was $0.8 million, or $0.10 per diluted share compared with GAAP net income of $0.9 million, or $0.10 per diluted share in Q3/16.

·
Non-GAAP net income reached $3.0 million, or $0.33 per diluted share in the nine-month period that ended on September 30, 2017, compared with non-GAAP net income of $0.9 million, or $0.10 per diluted share in the nine-month period that ended on September 30, 2016, and non-GAAP net income of $0.9 million, or $0.10 per diluted share in Q3/17 and in Q3/16.
 
Mr. Igal Zamir, CEO and President of TAT Technologies stated, “We continue to see consistent improvement in the company's financial performance. Revenues continue to grow organically due to the company's sales and marketing efforts, its strong position in its markets and the continued strength in the Aerospace industry. The company is expected to start deliveries related to the recently awarded APU MRO contract during Q4/17. Operational improvements that have been implemented resulted in solid and stable profitability. The company continues to pursue growth initiatives, both organic and strategic and further improve its profitability.”

3


 
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 and/or (3) share in results of equity investment of affiliated companies. 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.  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 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.

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.

4


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)

 
September 30,
   
December 31,
 
   
2017
   
2016
 
   
(unaudited)
   
(audited)
 
ASSETS
           
CURRENT ASSETS:
           
    Cash and cash equivalents
 
$
18,315
   
$
21,433
 
    Short-term bank deposits
   
464
     
964
 
    Accounts receivable, net
   
26,004
     
21,572
 
    Other current assets and prepaid expenses
   
3,336
     
1,687
 
    Inventory, net
   
37,623
     
39,269
 
                 
         Total current assets
   
85,742
     
84,925
 
                 
NON-CURRENT ASSETS:
               
 Investment in affiliates
   
1,247
     
1,019
 
Funds in respect of employee rights upon retirement
   
2,889
     
2,660
 
 Deferred income taxes
   
916
     
896
 
Intangible assets, net
   
1,079
     
1,179
 
Property, plant and equipment, net
   
21,108
     
21,298
 
                 
         Total non-current assets
   
27,239
     
27,052
 
                 
       Total assets
 
$
112,981
   
$
111,977
 
                 
LIABILITIES AND EQUITY
               
                 
CURRENT LIABILITIES:
               
    Accounts payable
   
9,882
     
8,406
 
    Accrued expenses
   
8,752
     
9,836
 
                 
         Total current liabilities
   
18,634
     
18,242
 
                 
NON CURRENT LIABILITIES:
               
   Other long-term liabilities
   
163
     
151
 
    Liability in respect of employee rights upon retirement
   
3,354
     
2,994
 
    Deferred income taxes
   
2,015
     
1,938
 
                 
 Total non-current liabilities
   
5,532
     
5,083
 
                 
Total liabilities
   
24,166
     
23,325
 
                 
EQUITY:
               
    Share capital
   
2,802
     
2,797
 
    Additional paid-in capital
   
65,050
     
64,760
 
    Treasury stock at cost
   
(2,088
)
   
(2,088
)
    Accumulated other comprehensive loss
   
142
     
(73
)
    Retained earnings
   
22,909
     
23,256
 
         Total shareholders' equity
   
88,815
     
88,652
 
                 
       Total liabilities and shareholders' equity
 
$
112,981
   
$
111,977
 

6

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


   
Three months ended
   
Nine months ended
   
Year ended
 
   
September 30,
   
December 31,
 
   
2017
   
2016
   
2017
   
2016
   
2016
 
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Audited)
 
                               
Revenues:
                             
Products
 
$
8,985
   
$
6,940
   
$
27,904
   
$
22,950
   
$
30,431
 
Services
   
17,596
     
16,705
     
52,326
     
47,859
     
65,363
 
     
26,581
     
23,645
     
80,230
     
70,809
     
95,794
 
                                         
Cost of goods:
                                       
     Products
   
7,557
     
5,147
     
22,000
     
18,179
     
23,788
 
     Services
   
13,930
     
13,605
     
42,536
     
39,407
     
52,969
 
     
21,487
     
18,752
     
64,536
     
57,586
     
76,757
 
Gross Profit
   
5,094
     
4,893
     
15,694
     
13,223
     
19,037
 
                                         
Operating expenses:
                                       
     Research and development, net
   
215
     
213
     
620
     
951
     
1,140
 
     Selling and marketing
   
1,205
     
911
     
3,643
     
2,868
     
3,876
 
     General and administrative
   
2,182
     
2,300
     
6,688
     
7,392
     
10,023
 
     Other loss (income)
   
(1
)
   
(18
)
   
27
     
(21
)
   
(138
)
     
3,601
     
3,406
     
10,978
     
11,190
     
14,901
 
Operating income
   
1,493
     
1,487
     
4,716
     
2,033
     
4,136
 
                                         
     Financial income (expenses), net
   
21
     
(60
)
   
(251
)
   
(92
)
   
(154
)
                                         
Income before taxes on income
   
1,514
     
1,427
     
4,465
     
1,941
     
3,982
 
                                         
Taxes on income
   
623
     
537
     
1,656
     
3,445
     
3,865
 
                                         
Income (loss) before equity investment
   
891
     
890
     
2,809
     
(1,504
)
   
117
 
                                         
Share in results of affiliated companies
   
(50
)
   
(37
)
   
(156
)
   
(51
)
   
(55
)
                                         
Net income (loss)
 
$
841
   
$
853
   
$
2,653
   
$
(1,555
)
 
$
62
 
                                         
Basic and diluted income (loss) per share
                                       
                                         
Net income (loss) per  share (basic and diluted)
 
$
0.10
   
$
0.10
   
$
0.30
   
$
(0.18
)
 
$
0.01
 
                                         
Weighted average number of shares outstanding
                                       
Basic
   
8,848,028
     
8,828,444
     
8,848,028
     
8,828,444
     
8,828,444
 
Diluted
   
8,924,358
     
8,837,714
     
8,920,054
     
8,829,894
     
8,830,764
 

7

 
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
 
   
Three months ended
   
Nine months ended
   
Year ended
 
   
September 30,
   
December 31,
 
   
2017
   
2016
   
2017
   
2016
   
2016
 
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Audited)
 
                               
Net income (loss)
 
$
841
   
$
853
   
$
2,653
   
$
(1,555
)
 
$
62
 
Other comprehensive income
                                       
Net unrealized gains (losses) from derivatives
   
(221
)
   
181
     
(545
)
   
373
     
174
 
Reclassification adjustments for gains 
       included in net income and inventory
   
(113
)
   
(93
)
   
760
     
(214
)
   
(243
)
Total other comprehensive income (loss)
 
$
507
   
$
941
   
$
2,868
   
$
(1,396
)
 
$
(7
)


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
    Nine months ended  
   
September 30,
 
   
2017
   
2016
   
2017
   
2016
 
                         
                         
Reported net income (loss) on GAAP basis
 
$
841
   
$
853
   
$
2,653
   
$
(1,555
)
Adjustments:
                               
Tax adjustments re non-GAAP adjustments (1)
   
-
     
-
     
-
     
2,360
 
Share in results of equity investment of affiliated company
   
50
     
37
     
156
     
51
 
Share based compensation
   
36
     
37
     
151
     
64
 
 Non-GAAP net income
 
$
927
   
$
927
   
$
2,960
   
$
920
 
                                 
 Non-GAAP net income per share (basic and diluted)
 
$
0.10
   
$
0.10
   
$
0.33
   
$
0.10
 
                                 
Weighted average number of shares outstanding
                               
 Basic
   
8,848,028
     
8,828,444
     
8,848,028
     
8,828,444
 
 Diluted
   
8,924,358
     
8,837,714
     
8,920,054
     
8,829,894
 
 
(1)
During the second quarter of 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
   
Total equity
 
                                           
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 (audited):
                                                       
Comprehensive income (loss)
   
-
     
-
     
-
     
(69
)
   
-
     
62
     
(7
)
Share based compensation expenses
   
-
     
-
     
105
     
-
     
-
     
-
     
105
 
 Exercise of options
   
20,100
     
4
     
126
     
-
     
-
     
-
     
130
 
 Dividend distributed
   
-
     
-
     
-
     
-
     
-
     
(3,000
)
   
(3,000
)
BALANCE AT DECEMBER 31, 2016 (audited)
   
9,102,917
     
2,797
     
64,760
     
(73
)
   
(2,088
)
   
23,256
     
88,652
 
CHANGES DURING THE NINE MONTHS ENDED SEPTEMBER 30, 2017 (unaudited):
                                                       
Comprehensive income
   
-
     
-
     
-
     
215
     
-
     
2,653
     
2,868
 
 Exercise of options
   
19,584
     
5
     
139
     
-
     
-
     
-
     
144
 
 Dividend distributed
   
-
     
-
     
-
     
-
     
-
     
(3,000
)
   
(3,000
)
 Share based compensation expenses
   
-
     
-
     
151
     
-
     
-
     
-
     
151
 
BALANCE AT SEPTEMBER 30, 2017 (unaudited):
   
9,122,501
   
$
2,802
   
$
65,050
   
$
142
   
$
(2,088
)
 
$
22,909
   
$
88,815
 


10


TAT TECHNOLOGIES AND ITS SUBSIDIARIES
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 
   
Three months ended
   
Nine months ended
   
Year ended
 
   
September 30,
   
December 31,
 
   
2017
   
2016
   
2017
   
2016
   
2016
 
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Audited)
 
                               
CASH FLOWS FROM OPERATING ACTIVITIES:
                             
Net income (loss) attributable to TAT Technologies Ltd. shareholders
 
$
841
   
$
853
   
$
2,653
   
$
(1,555
)
 
$
62
 
                                         
Adjustments to reconcile net income to net cash provided by operating activities:
                                       
                                         
Depreciation and amortization
   
987
     
929
     
2,936
     
2,660
     
3,636
 
Loss (gain) on sale of  property, plant and equipment
   
-
     
(19
)
   
28
     
(18
)
   
12
 
Interest from short-term bank deposits and restricted deposits
   
-
     
-
     
-
     
(11
)
   
(24
)
 Gain from change in fair value of derivatives
   
(40
)
   
(122
)
   
(100
)
   
(170
)
   
(152
)
Provision for doubtful accounts
   
-
     
10
     
38
     
53
     
(29
)
Share in results of equity investment of affiliated Company
   
50
     
37
     
156
     
51
     
55
 
Share based compensation
   
36
     
37
     
151
     
64
     
105
 
Liability in respect of employee rights upon retirement
   
190
     
47
     
360
     
60
     
123
 
Deferred income taxes, net
   
341
     
(287
)
   
57
     
1,813
     
1,670
 
Changes in operating assets and liabilities:
                                       
    Increase in trade accounts receivable
   
(3,185
)
   
(44
)
   
(4,470
)
   
(3,541
)
   
(2,392
)
    Decrease (increase) in other current assets and prepaid expenses
   
(521
)
   
(913
)
   
(1,138
)
   
31
     
1,487
 
Decrease (increase) in inventory
   
(1,353
)
   
(862
)
   
1,319
     
(1,367
)
   
(2,707
)
    Increase in trade accounts payable
   
2,805
     
1,503
     
1,433
     
1,379
     
1,192
 
    Increase (decrease) in  accrued expenses
   
(701
)
   
1,013
     
(1,084
)
   
1,358
     
2,521
 
    Increase (decrease) in other long-term liabilities
   
(13
)
   
(1
)
   
12
     
(123
)
   
(38
)
Net cash provided by (used in) operating activities
 
$
(563
)
 
$
2,181
   
$
2,351
   
$
684
   
$
5,521
 
                                         
CASH FLOWS FROM INVESTING ACTIVITIES:
                                       
Investment in affiliated company
   
(133
)
   
(376
)
   
(384
)
   
(389
)
   
(905
)
Funds in respect of employee rights upon retirement
   
(26
)
   
98
     
(97
)
   
75
     
2
 
Proceeds from sale of property and equipment
   
-
     
17
     
-
     
18
     
17
 
Purchase of property and equipment
   
(1,203
)
   
(1,078
)
   
(2,632
)
   
(4,661
)
   
(5,702
)
Maturities of short-term deposits
   
-
     
5,182
     
500
     
7,182
     
7,182
 
Cash flows provided by (used in) investing activities
 
$
(1,362
)
 
$
3,843
   
$
(2,613
)
 
$
2,225
   
$
594
 
                                         
CASH FLOWS FROM FINANCING ACTIVITIES:
                                       
Realization of contingency
   
-
     
(500
)
   
-
     
(500
)
   
(500
)
Payment of cash dividend
   
-
     
(3,000
)
   
(3,000
)
   
(3,000
)
   
(3,000
)
 Exercise of options
   
144
             
144
     
130
     
130
 
Cash flows  provided by (used in) financing activities
 
$
144
   
$
(3,500
)
 
$
(2,856
)
 
$
(3,370
)
 
$
(3,370
)
                                         
Net increase (decrease) in cash and cash equivalents
   
(1,781
)
   
2,524
     
(3,118
)
   
(461
)
   
2,745
 
                                         
Cash and cash equivalents at beginning of period
   
20,096
     
15,703
     
21,433
     
18,688
     
18,688
 
                                         
Cash and cash equivalents at end of period
 
$
18,315
   
$
18,227
   
$
18,315
   
$
18,227
   
$
21,433
 

11

TAT TECHNOLOGIES AND ITS SUBSIDIARIES
 
 RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA (NON-GAAP)
(UNAUDITED)
(In thousands)
 
   
Three months ended
   
Nine months ended
 
   
September 30,
   
September 30,
 
   
2017
   
2016
   
2017
   
2016
 
                         
Net income (loss)
 
$
841
   
$
853
   
$
2,653
   
$
(1,555
)
Adjustments:
                               
Share in results of equity investment of affiliated companies
   
50
     
37
     
156
     
51
 
Taxes on income
   
623
     
537
     
1,656
     
3,445
 
Financial expenses (income), net
   
(21
)
   
60
     
251
     
92
 
Depreciation and amortization
   
987
     
929
     
2,936
     
2,660
 
Share based compensation
   
36
     
37
     
151
     
64
 
Adjusted EBITDA
 
$
2,516
   
$
2,453
   
$
7,803
   
$
4,757
 


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: November 15, 2017
 
13