6-K 1 zk1923135.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 2019

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 23, 2019 re TAT Technologies Ltd. Reports First Quarter 2019 Results.
 
2
 
ITEM 1

Press Release
Source: TAT Technologies Limited

TAT Technologies Reports First Quarter 2019 Results

GEDERA, Israel, May 23, 2019 - 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, 2019.

Financial highlights for the first quarter of 2019 (unaudited):
 
·
Revenues for the three-month period that ended on March 31, 2019 were $23.3 million compared with $24.4 million in the three-month period that ended on March 31, 2018.

·
Adjusted EBITDA for the three-month period that ended on March 31, 2019 increased to $1.3 million compared with $0.4 million in the three-month period that ended on March 31, 2018.

·
GAAP net income of $0.1 million, or $0.01 per diluted share in the three-month period that ended on March 31, 2019 compared with a net loss of $0.7 million, or a net loss of $0.08 per diluted share in the three-month period that ended on March 31, 2018.

·
Non-GAAP net income of $0.2 million, or $0.02 per diluted share in the three-month period that ended on March 31, 2019, compared with non-GAAP net loss of $0.7 million, or a net loss of $0.08 per diluted share in the three-month period that ended on March 31, 2018.
 
Mr. Igal Zamir, TAT’s CEO and President commented on the results: “We are pleased with the improved results of the first quarter. During the second half of 2018 we took several steps to cut expenses and improve operational efficiency. These actions are reflected in improved profitability metrics in the first quarter of 2019. We plan to continue executing our strategic plan to become a leader in the heat exchange OEM and MRO as well as in the power and actuation segment”.

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) 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.
 
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

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.
 
4

TAT TECHNOLOGIES AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)

 
March 31,
    
December 31,
  
   
2019
    
2018
  
   
(unaudited)
    
(audited)
  
ASSETS
            
CURRENT ASSETS:
            
Cash and cash equivalents
  
$
14,254
    
$
15,950
  
Accounts receivable, net
    
20,947
      
19,277
  
Other current assets and prepaid expenses
    
3,352
      
3,627
  
Inventory, net
    
41,194
      
38,605
  
                 
Total current assets
    
79,747
      
77,459
  
                 
NON-CURRENT ASSETS:
                
  Investment in affiliates
    
1,059
      
1,078
  
Funds in respect of employee rights upon retirement
    
2,087
      
2,253
  
  Deferred income taxes
    
821
      
162
  
Intangible assets, net
    
877
      
911
  
Property, plant and equipment, net
    
21,021
      
21,424
  
Operating lease right of use assets
    
7,016
      
-
  
                 
Total non-current assets
    
32,881
      
25,828
  
Total assets
  
$
112,628
    
$
103,287
  
                 
LIABILITIES AND EQUITY
                
                 
CURRENT LIABILITIES:
                
Accounts payable
  
$
9,293
    
$
8,270
  
Accrued expenses
    
7,413
      
6,411
  
Operating lease liabilities
    
1,271
      
-
  
                 
Total current liabilities
    
17,977
      
14,681
  
                 
NON CURRENT LIABILITIES:
                
    Other long-term liabilities
    
122
      
180
  
Liability in respect of employee rights upon retirement
    
2,457
      
2,648
  
Deferred income taxes
    
1,513
      
1,484
  
Operating lease liabilities
    
5,887
      
-
  
                 
 Total non-current liabilities
    
9,979
      
4,312
  
Total liabilities
    
27,956
      
18,993
  
                 
EQUITY:
                
Share capital
    
2,809
      
2,809
  
Additional paid-in capital
    
65,607
      
65,535
  
Treasury stock at cost
    
(2,088
)
    
(2,088
)
Accumulated other comprehensive income (loss)
    
40
      
(206
)
Retained earnings
    
18,304
      
18,244
  
Total shareholders' equity
    
84,672
      
84,294
  
                 
Total liabilities and shareholders' equity
  
$
112,628
    
$
103,287
  
 
5
 
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,
  
   
2019
    
2018
    
2018
  
   
(Unaudited)
    
(Unaudited)
    
(Audited)
  
                   
Revenues:
                  
Products
  
$
5,900
    
$
6,836
    
$
23,151
  
Services
    
17,396
      
17,521
      
70,027
  
     
23,296
      
24,357
      
93,178
  
                         
Cost of goods:
                        
Products
    
5,096
      
6,530
      
23,807
  
Services
    
14,950
      
14,655
      
60,980
  
     
20,046
      
21,185
      
84,787
  
Gross Profit
    
3,250
      
3,172
      
8,391
  
                         
Operating expenses:
                        
Research and development, net
    
23
      
319
      
553
  
Selling and marketing
    
1,053
      
1,370
      
4,913
  
General and administrative
    
2,057
      
2,170
      
8,559
  
Other income
    
-
      
-
      
(4
)
     
3,133
      
3,859
      
14,021
  
Operating income (loss)
    
117
      
(687
)
    
(5,630
)
                         
Financial expenses, net
    
(226
)
    
(2
)
    
(102
)
                         
Loss before taxes on income (tax benefit)
    
(109
)
    
(689
)
    
(5,732
)
                         
Taxes on income (tax benefit)
    
(188
)
    
65
      
(1,464
)
                         
Income (loss) before equity investment
    
79
      
(754
)
    
(4,268
)
                         
Share in results of affiliated companies
    
(19
)
    
10
      
(140
)
                         
Net income (loss)
  
$
60
    
$
(744
)
  
$
(4,408
)
                         
Basic and diluted loss per share
                        
                         
Net income (loss) per share
  
$
0.01
    
$
(0.08
)
  
$
(0.5
)
                         
Weighted average number of shares outstanding
                        
Basic
    
8,874,696
      
8,848,028
      
8,864,885
  
Diluted
    
8,874,696
      
8,848,028
      
8,864,885
  


6

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

   
Three months ended
    
Year ended
  
   
March 31,
    
December 31,
  
   
2019
    
2018
    
2018
  
   
(Unaudited)
    
(Unaudited)
    
(Audited)
  
                   
Net income (loss)
  
$
60
    
$
(744
)
  
$
(4,408
)
Other comprehensive income (loss)
                        
Net unrealized incomes (losses) from derivatives
    
230
      
(60
)
    
(672
)
Reclassification adjustments for gains included in net income and inventory
    
16
      
(86
)
    
331
  
Total other comprehensive income (loss)
  
$
306
    
$
(890
)
  
$
(4,749
)

 
7
 
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
 
 RECONCILIATION OF GAAP TO NON-GAAP RESULTS (UNAUDITED)
(In thousands, except share and per share data)

   
Three months ended
    
Year ended
  
   
March 31,
    
December 31,
  
   
2019
    
2018
    
2018
  
                   
Reported net income (loss) on GAAP basis
  
$
60
    
$
(744
)
  
$
(4,408
)
Adjustments:
                        
Share in results of equity investment of affiliated company
    
19
      
(10
)
    
140
  
Share based compensation
    
72
      
55
      
272
  
 Non-GAAP net income (loss)
  
$
151
    
$
(699
)
  
$
(3,996
)
                         
 Non-GAAP net income (loss) per share
  
$
0.02
    
$
(0.08
)
  
$
(0.45
)
                         
Weighted average number of shares outstanding
                        
 Basic
    
8,874,696
      
8,848,028
      
8,864,885
  
 Diluted
    
8,874,696
      
8,848,028
      
8,864,885
  


8
 
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
 
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands, except share data)

   
TAT Technologies Ltd. Shareholders
        
                  
Additional paid-in capital
      
Accumulated
other comprehensive income (loss)
                    
   
Share capital
                            
   
Number of shares issued
    
Amount
            
Treasury shares
    
Retained earnings
    
Total equity
  
                                           
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 option
    
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 YEAR ENDED DECEMBER 31, 2018 (audited):
                                                        
Comprehensive loss
    
-
      
-
      
-
      
(341
)
    
-
      
(4,408
)
    
(4,749
)
 Share based compensation expenses
    
-
      
-
      
272
      
-
      
-
      
-
      
272
  
 Exercise of options
    
26,668
      
7
      
190
      
-
      
-
      
-
      
197
  
BALANCE AT DECEMBER 31, 2018 (audited)
    
9,149,169
    
$
2,809
    
$
65,535
    
$
(206
)
  
$
(2,088
)
  
$
18,244
    
$
84,294
  
CHANGES DURING THE THREE MONTHS ENDED MARCH 31, 2019 (unaudited):
                                                        
Comprehensive income
    
-
      
-
      
-
      
246
      
-
      
60
      
306
  
 Share based compensation expenses
    
-
      
-
      
72
      
-
      
-
      
-
      
72
  
BALANCE AT MARCH 31, 2019 (unaudited)
    
9,149,169
    
$
2,809
    
$
65,607
    
$
40
    
$
(2,088
)
  
$
18,304
    
$
84,672
  


9
 
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

   
Three months ended
    
Year ended
  
   
March 31,
    
December 31,
  
   
2019
    
2018
    
2018
  
   
(Unaudited)
    
(Unaudited)
    
(audited)
  
                   
CASH FLOWS FROM OPERATING ACTIVITIES:
                  
Net income (loss)
  
$
60
    
$
(744
)
  
$
(4,408
)
Adjustments to reconcile net income to net cash provided by operating activities:
                        
                         
Depreciation and amortization
    
1,070
      
1,008
      
4,185
  
Interest from short-term bank deposits and restricted deposits
    
-
      
-
      
382
  
Loss (gain) from change in fair value of derivatives
    
(234
)
    
212
      
-
  
Provision for doubtful accounts
                    
(347
)
Share in results of affiliated Company
    
19
      
(10
)
    
140
  
Share based compensation
    
72
      
55
      
272
  
 Non cash finance expense
    
142
      
-
      
-
  
Liability in respect of employee rights upon retirement
    
(191
)
    
(183
)
    
(587
)
Deferred income taxes, net
    
(630
)
    
176
      
(102
)
Changes in operating assets and liabilities:
                        
Decrease (increase) in trade accounts receivable
    
(1,670
)
    
(312
)
    
6,814
  
Decrease (increase) in other current assets and prepaid expenses
    
947
      
100
      
(1,575
)
Decrease (increase) in inventory
    
(2,593
)
    
(2,264
)
    
161
  
    Increase (decrease) in trade accounts payable
    
1,337
      
2,085
      
(969
)
Increase (decrease) in accrued expenses
    
1,002
      
166
      
(1,920
)
Increase (decrease) in other long-term liabilities
    
(58
)
    
(22
)
    
34
  
Net cash provided by (used in) operating activities
  
$
(727
)
  
$
267
    
$
2,080
  
                         
CASH FLOWS FROM INVESTING ACTIVITIES:
                        
Investment in affiliated company
    
-
      
-
      
(26
)
Funds in respect of employee rights upon retirement
    
(22
)
    
43
      
(22
)
Proceeds from sale of property and equipment
    
-
      
7
      
7
  
Purchase of property and equipment
    
(947
)
    
(1,450
)
    
(4,270
)
 Maturities of short-term deposits
    
-
      
-
      
470
  
Cash flows used in investing activities
  
$
(969
)
  
$
(1,400
)
  
$
(3,841
)
                         
CASH FLOWS FROM FINANCING ACTIVITIES:
                        
 Exercise of options
    
-
      
-
      
197
  
Cash flows provided by financing activities
 
$
-
    
$
-
    
$
197
  
                         
Net decrease in cash and cash equivalents
    
(1,696
)
    
(1,133
)
    
(1,564
)
                         
Cash and cash equivalents at beginning of period
    
15,950
      
17,514
      
17,514
  
                         
Cash and cash equivalents at end of period
  
$
14,254
    
$
16,381
    
$
15,950
  

 
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,
  
   
2019
    
2018
    
2018
  
                   
Net income (loss)
  
$
60
    
$
(744
)
  
$
(4,408
)
Adjustments:
                        
Share in results and sale of equity investment of affiliated companies
    
19
      
(10
)
    
140
  
Taxes on income (tax benefit)
    
(188
)
    
65
      
(1,464
)
Financial expenses, net
    
226
      
2
      
102
  
Depreciation and amortization
    
1,070
      
1,008
      
4,185
  
Share based compensation
    
72
      
55
      
272
  
Adjusted EBITDA
  
$
1,259
    
$
376
    
$
(1,173
)

11
 
Note to the financial statements
 
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. The new standard establishes a right-of-use (ROU) model that requires a lessee to recognize a ROU assets and lease liabilities on the balance sheet. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations. The Company adopted the new standard on January 1, 2019 using the modified retrospective transition method and did not restate comparative periods. The new standard provides a number of optional practical expedients in transition. The Company recognizes the lease expenses in the consolidated statements of Operations on a straight-line basis over the lease period.
 
Additionally, the Company did not separate lease and non-lease components for all of its leases. The Company elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, the Company will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. Instead, the Company will continue to recognize the lease payments for those leases in profit or loss on a straight-line basis over the lease term.

The most significant effects of adoption relate to (1) the recognition of new ROU assets and lease liabilities on its balance sheet for real estate operating leases; and (2) recording of Non-cash finance expenses on its statement of income.
 
The adoption of the standard resulted in recognition of $7.3 million of lease assets and lease liabilities as of January 1, 2019 on the Company’s consolidated balance sheets. During the three months period ended March 31, 2019 the Company recorded non-cash finance expenses in the amount of $0.14 million.


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/ Ehud Ben-Yair
  
   
Ehud Ben-Yair
  
   
Chief Financial Officer
  

Date: May 23, 2019
 
13