TAT Technologies Delivers 23.6% Revenue Growth, 80.7% Increase in Net Profit, and 56.2% Increase in adjusted EBITDA, and Continued Margin Expansion for the First Quarter of 2025
NETANYA, Israel, May 19, 2025 /PRNewswire/ -- TAT Technologies Ltd. (NASDAQ: TATT) (TASE: TATT) ("TAT" or the "Company"), a leading provider of products and services to the commercial and military aerospace and ground defense industries, reported today its unaudited results for the three months ended March 31, 2025.
Financial Highlights for the First Quarter of 2025:
Revenue for the first quarter of 2025 increased by 23.6% to $42.1 million compared to $34.1 million in the first quarter of 2024.
Gross profit for the first quarter of 2025 increased by 40.9% to $10.0 million compared to $7.1 million in the first quarter of 2024.
Gross margin for the first quarter of 2025 improved by 290bp to 23.6% of revenue compared to 20.7% of revenue in the first quarter of 2024.
Adjusted EBITDA for the first quarter of 2025 increased by 56.2% to $5.7 million (13.6% of revenue) compared to $3.7 million (10.8% of revenue) in the first quarter of 2024.
Operating income for the first quarter of 2025 increased by 89.0% to $4.2 million (9.9% of revenue) compared to $2.2 million (6.5% of revenue) in the first quarter of 2024.
Net income for the first quarter of 2025 increased by 80.7% to $3.8 million compared to a net income of $2.1 million in the first quarter of 2024.
Cash flow from operating activities was negative ($4.9) million in the first quarter of 2025 compared to negative ($3.5) million in the first quarter of 2024.
Mr. Igal Zamir, TAT's CEO and President, commented: "Driven by strong execution and robust market demand, TAT Technologies continues to demonstrate its earnings power. During the first quarter, we delivered revenue growth of 23.6% and an increase of 56.2% in adjusted EBITDA, compared to the same period in 2024, expanding our bottom line even more rapidly than our top line. TAT has developed a multi-year track record of consistent profitability, delivering double-digit year-over-year growth for the last three years, while expanding profit margins."
"Our strategic growth initiatives, implemented over the past few years, have significantly expanded our addressable market and diversified our revenue streams," continued Mr. Zamir. "Despite industry wide supply chain challenges, our 'Customer First' initiative, which includes bolstering parts and rotatable inventory in key areas, enabled us to achieve our financial goals, fulfill customer demand, and strengthen our market position. While we expanded inventory levels and utilized additional cash, these strategic investments enhance our resilience and position us to capture market share in a dynamic supply environment."
"In the first quarter, we secured over $52 million in new orders and long-term agreements, bringing our total backlog to $439 million. This provides us with strong visibility and confidence in our continued growth and profitability. While broader market dynamics may influence near-term order flow, the demand for our expertise and capacity remains robust, positioning us well to further expand our backlog throughout the year."
"To mitigate the evolving trade policy landscape, we're closely monitoring recent tariff changes and taking measured steps to minimize any impact on our operations. Our teams are in active, solution-focused discussions with key suppliers to ensure material flow remains uninterrupted and cost increases are controlled. At the same time, we're working closely with our customers to align expectations, adjust planning as needed, and maintain the high service levels they rely on."
Non-GAAP Financial Measures
To supplement the consolidated financial statements presented in accordance with GAAP, the Company also presents Adjusted EBITDA. The adjustments to the Company's GAAP results are made with the intent of providing both management and investors with a more complete understanding of the Company's underlying operational results, trends, and performance. The Adjusted EBITDA is calculated as net income, excluding the impact of: the Company's share in profit of equity investment of affiliated companies, share-based compensation, provision for income taxes, financial (expenses) income, net, and depreciation and amortization. The Adjusted EBITDA, however, should not be considered as an alternative to net income and operating income for the period and may not be indicative of the historic operating results of the Company; nor is it meant to be predictive of potential future results. The Adjusted EBITDA is not a measure of financial performance under generally accepted accounting principles and may not be comparable to other similarly titled measures for other companies. See reconciliation of Adjusted EBITDA below.
Investor Call Information
TAT Technologies will host a webcast to review the quarterly results on Tuesday, May 20, 2025, at 8:30 a.m. ET. Interested investors can register for the webcast at the link below or visit the investor relations section of the Company's website at https://tat-technologies.com/investors/.
TAT Technologies Ltd. is a leading provider of services and products to the commercial and military aerospace and ground defense industries. TAT operates under four segments: (i) Original equipment manufacturing ("OEM") of heat transfer solutions and aviation accessories through its Gedera facility; (ii) MRO services for heat transfer components and OEM of heat transfer solutions through its Limco subsidiary; (iii) MRO services for aviation components through its Piedmont subsidiary; and (iv) Overhaul and coating of jet engine components through its Turbochrome subsidiary. TAT's controlling shareholder is the FIMI Private Equity Fund.
TAT's activities in the area of OEM of heat transfer solutions and aviation accessories primarily include the design, development and manufacture of (i) broad range of heat transfer solutions, such as pre-coolers heat exchangers and oil/fuel hydraulic heat exchangers, used in mechanical and electronic systems on board commercial, military and business aircraft; (ii) environmental control and power electronics cooling systems installed on board aircraft in and ground applications; and (iii) a variety of other mechanical aircraft accessories and systems such as pumps, valves, and turbine power units.
TAT's activities in the area of MRO Services for heat transfer components and OEM of heat transfer solutions primarily include the MRO of heat transfer components and to a lesser extent, the manufacturing of certain heat transfer solutions. TAT's Limco subsidiary operates an FAA-certified repair station, which provides heat transfer MRO services for airlines, air cargo carriers, maintenance service centers and the military.
TAT's activities in the area of MRO services for aviation components include the MRO of APUs, landing gears and other aircraft components. TAT's Piedmont subsidiary operates an FAA-certified repair station, which provides aircraft component MRO services for airlines, air cargo carriers, maintenance service centers and the military.
TAT's activities in the area of overhaul and coating of jet engine components includes the overhaul and coating of jet engine components, including turbine vanes and blades, fan blades, variable inlet guide vanes and afterburner flaps.
For more information about TAT Technologies Ltd., please visit our website: www.tat-technologies.com.
This press release contains forward-looking statements which include, without limitation, statements regarding possible or assumed future operation results. These statements are hereby identified as "forward-looking statements" for purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that could cause our results to differ materially from management's current expectations. Actual results and performance can also be influenced by other risks that we face in running our operations including, but are not limited to, general business conditions in the airline industry, changes in demand for our services and products, the timing and amount or cancellation of orders, [LTAs] and backlog, the price and continuity of supply of component parts used in our operations, and other risks detailed from time to time in the Company's filings with the Securities Exchange Commission, including, its annual report on form 20-F and its periodic reports on form 6-K. These documents contain and identify other important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update publicly or revise any forward-looking statement.
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
March 31,
December 31,
2025
2024
(unaudited)
(audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$ 5,020
$ 7,129
Accounts receivable, net of allowance for credit losses of $350
and $400 thousand as of March 31, 2025 and December 31, 2024,
respectively
33,223
29,697
Inventory
72,980
68,540
Prepaid expenses and other current assets
8,375
7,848
Total current assets
119,598
113,214
NON-CURRENT ASSETS:
Property, plant and equipment, net
42,474
41,576
Operating lease right of use assets
2,115
2,282
Intangible assets, net
1,633
1,553
Investment in affiliates
3,722
2,901
Funds in respect of employee rights upon retirement
641
654
Deferred income taxes
358
877
Restricted deposit
315
305
Total non-current assets
51,258
50,148
Total assets
$ 170,856
$ 163,362
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term loans
$ 1,976
$ 2,083
Short-term loans
10,719
4,350
Accounts payable
12,592
12,158
Accrued expenses and other
15,572
18,594
Current maturities of operating lease liabilities
839
939
Total current liabilities
41,698
38,124
NON-CURRENT LIABILITIES:
Long-term loans
10,391
10,938
Liability in respect of employee rights upon retirement
966
986
Operating lease liabilities
1,269
1,345
Total non-current liabilities
12,626
13,269
Total liabilities
54,324
51,393
STOCKHOLDERS' EQUITY:
Share capital, no par value
-
-
Additional paid-in capital
89,919
89,697
Treasury stock at cost
(2,088)
(2,088)
Accumulated other comprehensive income (loss)
452
(76)
Retained earnings
28,249
24,436
Total shareholders' equity
116,532
111,969
Total liabilities and stockholders' equity
$ 170,856
$ 163,362
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share and per share data)
Three months ended
Year ended
March 31,
December 31,
2025
2024
2024
(Unaudited)
(Unaudited)
(Audited)
Revenues:
Products
$ 12,724
$ 11,935
$ 47,710
Services
29,418
22,153
104,406
42,142
34,088
152,116
Cost of goods:
Products
8,331
8,986
33,986
Services
23,857
18,036
85,116
32,188
27,022
119,102
Gross profit
9,954
7,066
33,014
Operating expenses:
Research and development, net
324
277
1,248
Selling and marketing, net
1,928
1,660
7,746
General and administrative, net
3,532
3,309
11,901
Other income
-
(388)
(383)
5,784
4,858
20,512
Operating income
4,170
2,208
12,502
Interest expenses
(335)
(343)
(1,472)
Other financial income
(expenses), net
277
(106)
(477)
Income before taxes on income
(taxes benefit)
4,112
1,759
10,553
Provision for taxes on income
(taxes benefit)
592
(153)
195
Profit before share of equity
investment
3,520
1,912
10,358
Share in profits of equity investment
of affiliated companies
293
198
809
Net income
$ 3,813
$ 2,110
$ 11,167
Basic and diluted earnings per share:
Basic
$ 0.35
$ 0.20
$ 1.08
Diluted
$ 0.34
$ 0.19
$ 1.00
Weighted average number of shares outstanding:
Basic
10,940,358
10,378,978
10,363,978
Diluted
11,211,271
10,554,351
11,215,827
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
Three months ended
Year ended
March 31,
December 31,
2025
2024
2024
(Unaudited)
(Unaudited)
(Audited)
Net income
$ 3,813
$ 2,110
$ 11,167
Other comprehensive income (loss), net
Net unrealized losses from derivatives
-
(27)
(27)
Change in foreign currency translation adjustments
528
-
(76)
Total comprehensive income
$ 4,341
$ 2,083
$ 11,064
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands, except share data)
Share capital
Accumulated
Number of
shares issued
Amount
Additional
paid-in
capital
other
comprehensive
income (loss)
Treasury
shares
Retained
earnings
Total equity
BALANCE AT DECEMBER 31, 2023
10,377,085
3,140
76,335
27
(2,088)
13,269
90,683
CHANGES DURING THE YEAR ENDED
DECEMBER 31, 2024:
Comprehensive income (loss)
-
-
-
(103)
-
11,167
11,064
Exercise of option
164,406
12
(12)
-
-
-
-
Cancel of shares par value
-
(3,152)
3,152
-
-
-
-
Issuance of common shares net of issuance costs of $162
thousands
673,340
-
9,827
-
-
-
9,827
Share based compensation
-
-
395
-
-
-
395
BALANCE AT DECEMBER 31, 2024
11,214,831
-
89,697
(76)
(2,088)
24,436
111,969
CHANGES DURING THE PERIOD ENDED
MARCH 31, 2025 (unaudited):
Comprehensive income
-
-
-
528
-
3,813
4,341
Share based compensation
-
-
222
-
-
-
222
BALANCE AT MARCH 31, 2025 (unaudited)
11,214,831
$ -
$ 89,919
$ 452
$ (2,088)
$ 28,249
$116,532
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three months ended
Year ended
March 31,
December 31,
2025
2024
2024
(Unaudited)
(Unaudited)
(audited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
$ 3,813
$ 2,110
$ 11,167
Adjustments to reconcile net income to net cash used in
operating activities:
Depreciation and amortization
1,305
1,374
5,455
Loss from change in fair value of derivatives
-
22
22
Change in funds in respect of employee rights upon retirement
13
5
10
Net change in operating right of use asset and operating lease
liability
(9)
4
18
Non-cash financial expenses
(83)
(214)
(187)
Decrease in restructuring plan provision
-
(20)
(63)
Change in allowance for credit losses
(50)
-
55
Share in profits of equity investment of affiliated companies
(293)
(198)
(809)
Share based compensation
222
41
395
Liability in respect of employee rights upon retirement
(20)
3
(14)
Gain on disposal of property, plant and equipment
-
(354)
(478)
Deferred income taxes, net
519
(409)
117
Changes in operating assets and liabilities:
Increase in trade accounts receivable
(3,476)
(820)
(9,743)
Increase in prepaid expenses and other current assets
(527)
(181)
(1,473)
Increase in inventory
(3,861)
(2,637)
(17,165)
Increase (decrease) in trade accounts payable
434
(700)
2,170
Increase (decrease) in accrued expenses and other
(3,022)
(1,573)
4,705
Net cash used in operating activities
(5,035)
(3,547)
(5,818)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and equipment
-
1,306
1,275
Purchase of property and equipment
(2,862)
(989)
(5,126)
Purchase of intangible assets
-
-
-
Net cash provided by (used in) investing activities
(2,862)
317
(3,851)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term loans
(571)
(440)
(2,016)
Net change in short term credit from banks
6,369
(4,000)
(7,650)
Proceeds from issuance of common shares, net
-
-
9,827
Exercise of options
-
1
-
Net cash provided by (used in) financing activities
5,798
(4,439)
161
Net decrease in cash and cash equivalents and
restricted cash
(2,099)
(7,669)
(9,508)
Cash and cash equivalents and restricted cash at beginning
of period
7,434
16,942
16,942
Cash and cash equivalents and restricted cash at the end of
period
$ 5,335
$ 9,273
$ 7,434
SUPPLEMENTARY INFORMATION ON INVESTING
ACTIVITIES NOT INVOLVING CASH FLOW:
Additions to operating lease right-of-use assets and operating
lease liabilities
147
345
983
Reclassification between inventory and property, plant and
equipment
579
60
155
Supplemental disclosure of cash flow information:
Interest paid
267
(442)
(1,400)
Income taxes paid
-
-
(39)
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA (NON-GAAP) (UNAUDITED)
