6-K 1 zk1822064.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 August 2018

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 August 30, 2018 re TAT Technologies Ltd. Reports Second Quarter 2018 Results.

2



ITEM 1

Press Release
Source: TAT Technologies Limited

TAT Technologies Reports Second Quarter 2018 Results

GEDERA, Israel, August 30, 2018 - 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 six month periods ended June 30, 2018.

Key Financial Highlights:

·
Revenues for Q2 2018 were $24.8 million compared with $26.6 million in Q2 2017.  Revenues for the six-month period that ended on June 30, 2018 were $49.2 million compared with $53.6 million in the six-month period that ended on June 30, 2017.

·
Adjusted EBITDA for Q2 2018 was $(0.3) million compared with $2.4 million in Q2 2017. Adjusted EBITDA for the six-month period that ended on June 30, 2018 was $0.05 million compared with $5.3 million in the six-month period that ended on June 30, 2017.

·
GAAP net loss was $1.4 million, or $0.16 per diluted share in Q2 2018 compared with a net income of $0.6 million, or $0.07 per diluted share in Q2 2017.

·
Non-GAAP net loss of $1.2 million, or $0.14 per diluted share in Q2 2018, compared with non-GAAP net income of $0.8 million, or $0.09 per diluted share in Q2 2017.

Mr. Igal Zamir, CEO and President of TAT Technologies stated, “The first six months of 2018 were challenging. We suffered from delay in order intake. Also, as a preparation for 2018 we invested in employees and machinery which caused an increased level of expenses. Starting Q2 we initiated a plan to increase sales and streamline operations which I expect will improve the results in the second half of 2018. Our increased back-log keeps me optimistic about the future of the company. During the first six months of 2018 we won several long-term strategic contracts with expected revenue over the next few years of approximately USD60M. These contracts position us in the front line of MRO companies both to aircraft manufactures and leading airlines around the world.”
 
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.

3

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.
 
For more information of TAT Technologies Ltd., please visit our web-site:
www.tat-technologies.com
 
Contact:
Ms. Inna Shpringer
MARCOM Manager
Tel: 972-8-862-8594
innas@tat-technologies.com

4

 
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)

 
June 30,
   
December 31,
 
   
2018
   
2017
 
   
(unaudited)
   
(audited)
 
ASSETS
           
CURRENT ASSETS:
           
Cash and cash equivalents
 
$
15,186
   
$
17,514
 
Short-term bank deposits
   
470
     
470
 
Accounts receivable, net
   
22,596
     
25,744
 
Other current assets and prepaid expenses
   
2,797
     
2,363
 
Inventory, net
   
38,560
     
38,630
 
                 
Total current assets
   
79,609
     
84,721
 
                 
NON-CURRENT ASSETS:
               
 Investment in affiliates
   
1,132
     
1,192
 
Funds in respect of employee rights upon retirement
   
2,499
     
2,779
 
 Deferred income taxes
   
623
     
937
 
Intangible assets, net
   
978
     
1,045
 
Property, plant and equipment, net
   
21,636
     
21,321
 
                 
Total non-current assets
   
26,868
     
27,274
 
                 
Total assets
 
$
106,477
   
$
111,995
 
                 
LIABILITIES AND EQUITY
               
                 
CURRENT LIABILITIES:
               
Accounts payable
   
8,423
     
9,348
 
Accrued expenses
   
6,439
     
8,331
 
                 
Total current liabilities
   
14,862
     
17,679
 
                 
NON CURRENT LIABILITIES:
               
   Other long-term liabilities
   
225
     
146
 
Liability in respect of employee rights upon retirement
   
2,932
     
3,235
 
Deferred income taxes
   
1,992
     
2,361
 
                 
 Total non-current liabilities
   
5,149
     
5,742
 
                 
 Total liabilities
   
20,011
     
23,421
 
                 
EQUITY:
               
Share capital
   
2,809
     
2,802
 
Additional paid-in capital
   
65,382
     
65,073
 
Treasury stock at cost
   
(2,088
)
   
(2,088
)
Accumulated other comprehensive income (loss)
   
(171
)
   
135
 
Retained earnings
   
20,534
     
22,652
 
Total shareholders' equity
   
86,466
     
88,574
 
                 
 Total liabilities and shareholders' equity
 
$
106,477
   
$
111,995
 

6

TAT TECHNOLOGIES AND ITS SUBSIDIARIES
 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share and per share data)
 
   
Three months ended
   
Six months ended
   
Year ended
 
   
June 30,
   
December 31,
 
   
2018
   
2017
   
2018
   
2017
   
2017
 
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Audited)
 
                               
Revenues:
                             
Products
 
$
6,160
   
$
9,369
   
$
12,996
   
$
18,919
   
$
36,053
 
Services
   
18,672
     
17,199
     
36,193
     
34,730
     
70,474
 
     
24,832
     
26,568
     
49,189
     
53,649
     
106,527
 
                                         
Cost of goods:
                                       
Products
   
6,451
     
7,532
     
12,981
     
14,443
     
28,096
 
Services
   
15,784
     
13,993
     
30,439
     
28,606
     
57,987
 
     
22,235
     
21,525
     
43,420
     
43,049
     
86,083
 
Gross Profit
   
2,597
     
5,043
     
5,769
     
10,600
     
20,444
 
                                         
Operating expenses:
                                       
Research and development, net
   
176
     
176
     
495
     
405
     
731
 
Selling and marketing
   
1,265
     
1,296
     
2,635
     
2,438
     
4,974
 
General and administrative
   
2,576
     
2,239
     
4,746
     
4,506
     
9,409
 
Other loss
   
-
     
-
     
-
     
28
     
53
 
     
4,017
     
3,711
     
7,876
     
7,377
     
15,167
 
Operating income (loss)
   
(1,420
)
   
1,332
     
(2,107
)
   
3,223
     
5,277
 
                                         
Financial income (expenses), net
   
21
     
(100
)
   
19
     
(272
)
   
(338
)
                                         
Income (loss) before taxes on income
   
(1,399
)
   
1,232
     
(2,088
)
   
2,951
     
4,939
 
                                         
Taxes on income
   
(95
)
   
535
     
(30
)
   
1,033
     
2,333
 
                                         
Income (loss) before equity investment
   
(1,304
)
   
697
     
(2,058
)
   
1,918
     
2,606
 
                                         
Share in results of affiliated company
   
(70
)
   
(86
)
   
(60
)
   
(106
)
   
(210
)
                                         
Net income (loss)
 
$
(1,374
)
 
$
611
   
$
(2,118
)
 
$
1,812
   
$
2,396
 
                                         
Basic and diluted income (loss) per share
                                       
                                         
Net income (loss) per share
 
$
(0.16
)
 
$
0.07
   
$
(0.24
)
 
$
0.21
   
$
0.27
 
                                         
Weighted average number of shares outstanding
                                       
Basic
   
8,862,473
     
8,828,444
     
8,855,251
     
8,828,444
     
8,848,028
 
Diluted
   
8,876,232
     
8,832,080
     
8,887,641
     
8,892,756
     
8,909,072
 

7

TAT TECHNOLOGIES AND ITS SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)

   
Three months ended
   
Six months ended
   
Year ended
 
   
June 30,
   
December 31,
 
   
2018
   
2017
   
2018
   
2017
   
2017
 
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Audited)
 
                               
Net income (loss)
 
$
(1,374
)
 
$
611
   
$
(2,118
)
 
$
1,812
   
$
2,396
 
Other comprehensive income
                                       
Net unrealized losses from derivatives
   
(288
)
   
(227
)
   
(348
)
   
(324
)
   
(686
)
Reclassification adjustments for gains included in net income and inventory
   
128
     
336
     
42
     
873
     
894
 
Total other comprehensive income (loss)
 
$
(1,534
)
 
$
720
   
$
(2,424
)
 
$
2,361
   
$
2,604
 

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
 
   
June 30,
 
   
2018
   
2017
 
             
Reported net income (loss) on GAAP basis
 
$
(1,374
)
 
$
611
 
Adjustments:
               
Share in results of affiliated company
   
70
     
86
 
Share based compensation
   
64
     
58
 
Non-GAAP net income (loss)
 
$
(1,240
)
 
$
755
 
                 
Non-GAAP net income per share (loss)
 
$
(0.14
)
 
$
0.09
 
                 
Weighted average number of shares outstanding
               
 Basic
   
8,862,473
     
8,828,444
 
 Diluted
   
8,876,232
     
8,832,080
 

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, 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 YEAR ENDED DECEMBER 31, 2017 (audited):
                                                       
Comprehensive income
   
-
     
-
     
-
     
208
     
-
     
2,396
     
2,604
 
 Share based compensation expenses
   
-
     
-
     
174
     
-
     
-
     
-
     
174
 
 Exercise of options
   
19,584
     
5
     
139
     
-
     
-
     
-
     
144
 
 Dividend distributed
   
-
     
-
     
-
     
-
     
-
     
(3,000
)
   
(3,000
)
BALANCE AT DECEMBER 31, 2017 (audited)
   
9,122,501
   
$
2,802
   
$
65,073
   
$
135
   
$
(2,088
)
 
$
22,652
   
$
88,574
 
CHANGES DURING THE SIX MONTHS ENDED JUNE 30, 2018 (unaudited):
                                                       
Comprehensive loss
   
-
     
-
     
-
     
(306
)
   
-
     
(2,118
)
   
(2,424
)
Share based compensation expenses
   
-
     
-
     
119
     
-
     
-
     
-
     
119
 
 Exercise of options
   
26,668
     
7
     
190
     
-
     
-
     
-
     
197
 
BALANCE AT JUNE 30, 2018 (unaudited)
   
9,149,169
   
$
2,809
   
$
65,382
   
$
(171
)
 
$
(2,088
)
 
$
20,534
   
$
86,466
 

10

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

   
Three months ended
   
Six months ended
   
Year ended
 
   
June 30,
   
December 31,
 
   
2018
   
2017
   
2018
   
2017
   
2017
 
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Audited)
 
                               
CASH FLOWS FROM OPERATING ACTIVITIES:
                             
Net income (loss) attributable to TAT Technologies Ltd. shareholders
 
$
(1,374
)
 
$
611
   
$
(2,118
)
 
$
1,812
   
$
2,396
 
                                         
Adjustments to reconcile net income to net cash provided by operating activities:
                                       
                                         
Depreciation and amortization
   
1,029
     
980
     
2,037
     
1,949
     
3,941
 
Loss on sale of  property, plant and equipment
   
-
     
-
     
-
     
28
     
54
 
Interest from short-term bank deposits and restricted deposits
   
-
     
-
     
-
     
-
     
(6
)
Loss (gain) from change in fair value of derivatives
   
174
     
(43
)
   
386
     
(60
)
   
(490
)
Provision for doubtful accounts
   
127
     
19
     
127
     
38
     
321
 
Share in results of affiliated company
   
70
     
86
     
60
     
106
     
210
 
Share based compensation
   
64
     
58
     
119
     
115
     
174
 
Liability in respect of employee rights upon retirement
   
(120
)
   
68
     
(303
)
   
170
     
241
 
Deferred income taxes, net
   
(231
)
   
(342
)
   
(55
)
   
(284
)
   
382
 
Changes in operating assets and liabilities:
                                       
   Decrease (increase) in trade accounts receivable
   
3,334
     
(1,820
)
   
3,022
     
(1,285
)
   
(4,493
)
   Decrease (increase) in other current assets and prepaid expenses
   
(848
)
   
324
     
(748
)
   
(618
)
   
488
 
Decrease in inventory
   
2,352
     
1,407
     
88
     
2,672
     
210
 
    Increase (decrease) in trade accounts payable
   
(3,117
)
   
67
     
(1,032
)
   
(1,371
)
   
578
 
    Decrease in accrued expenses
   
(2,058
)
   
(1,613
)
   
(1,892
)
   
(383
)
   
(1,505
)
    Increase (decrease) in other long-term liabilities
   
101
     
(11
)
   
79
     
25
     
(5
)
Net cash provided by (used in) operating activities
 
$
(497
)
 
$
(209
)
 
$
(230
)
 
$
2,914
   
$
2,496
 
                                         
CASH FLOWS FROM INVESTING ACTIVITIES:
                                       
Investment in affiliated company
   
-
     
(164
)
   
-
     
(251
)
   
(383
)
Funds in respect of employee rights upon retirement
   
(65
)
   
(35
)
   
(22
)
   
(71
)
   
(156
)
Proceeds from sale of property and equipment
   
-
     
-
     
7
     
-
     
-
 
Purchase of property and equipment
   
(735
)
   
(809
)
   
(2,185
)
   
(1,429
)
   
(3,520
)
Maturities of short-term deposits
   
-
     
500
     
-
     
500
     
500
 
Cash flows used in investing activities
 
$
(800
)
 
$
(508
)
 
$
(2,200
)
 
$
(1,251
)
 
$
(3,559
)
11

 
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(In thousands)
 
 
   
Three months ended
   
Six months ended
   
Year ended
 
   
June 30,
   
December 31,
 
   
2018
   
2017
   
2018
   
2017
   
2017
 
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Audited)
 
CASH FLOWS FROM FINANCING ACTIVITIES:
                             
Payment of cash dividend
   
-
     
(3,000
)
   
-
     
(3,000
)
   
(3,000
)
 Exercise of options
   
102
     
-
     
102
     
-
     
144
 
Cash flows  provided by (used in) financing activities
 
$
102
   
$
(3,000
)
 
$
102
   
$
(3,000
)
 
$
(2,856
)
                                         
Net decrease in cash and cash equivalents
   
(1,195
)
   
(3,717
)
   
(2,328
)
   
(1,337
)
   
(3,919
)
                                         
Cash and cash equivalents at beginning of period
   
16,381
     
23,813
     
17,514
     
21,433
     
21,433
 
                                         
Cash and cash equivalents at end of period
 
$
15,186
   
$
20,096
   
$
15,186
   
$
20,096
   
$
17,514
 

12

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

   
Three months ended
   
Six months ended
   
Year ended
 
   
June 30,
   
June 30,
   
December 31,
 
   
2018
   
2017
   
2018
   
2017
   
2017
 
                               
Net income (loss)
 
$
(1,374
)
 
$
611
   
$
(2,118
)
 
$
1,812
   
$
2,396
 
Adjustments:
                                       
                                         
Share in results of affiliated company
   
70
     
86
     
60
     
106
     
210
 
Taxes on income
   
(95
)
   
535
     
(30
)
   
1,033
     
2,333
 
Financial expenses (income), net
   
(21
)
   
100
     
(19
)
   
272
     
338
 
Depreciation and amortization
   
1,029
     
980
     
2,037
     
1,949
     
3,941
 
Share based compensation
   
64
     
58
     
119
     
115
     
174
 
Adjusted EBITDA
 
$
(327
)
 
$
2,370
   
$
49
   
$
5,287
   
$
9,392
 

13

 
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: August 30, 2018
 
14