TAT Technologies Reports First Quarter 2025 Results

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 , /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/. Conference call 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'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. Contact:Mr. Eran YungerDirector of IR[email protected] 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, [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) (In thousands) Three months ended Year ended March 31, December 31, 2025 2024 2024 Net income $ 3,813 $ 2,110 $ 11,167 Adjustments: Provision for income taxes (taxes benefit) 592 (153) 195 Financial expense, net 58 449 1,949 Depreciation and amortization 1,353 1,428 5,717 Share based compensation 222 41 395 Share in profits of equity investment of affiliated companies (293) (198) (809) Adjusted EBITDA $ 5,745 $ 3,677 $ 18,614 SOURCE TAT Technologies Ltd WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

TAT Technologies Reports First Quarter 2025 Results

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