TAT Technologies Reports Second Quarter 2025 Results

, /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-month and six-month period ended June 30, 2025. Financial highlights for the second quarter of 2025: Revenues increased by 18.0% to $43.1 million compared to $36.5 million for the second quarter of 2024. For the first half of 2025 revenues increased by 20.7% to $85.2 million compared to $70.6 million in the first half of 2024. Gross profit increased by 35.6% to $10.8 million compared to $8.0 million for the second quarter of 2024 (25.1% of revenues in Q2\25 compared to 21.9% of revenues in Q2\24). For the first half of 2025 gross profit increased by 38.1% to $20.8 million compared to $15.1 million in the first half of 2024 (24.4% of revenues in H1\25 compared to 21.3% of revenues in H1\24) Operating Income increased by 62.2% to $4.4 million compared to $2.7 million for the second quarter of 2024, (10.3% of revenues in Q2\25 compared to 7.5% of revenues in Q2\24). For the first half of 2025 operating income increased by 74.1% to $8.6 million compared to $4.9 million in the first half of 2024 (10.1% of revenues in H1\25 compared to 7.0% of revenues in H1\24). Net Income increased by 31.5% to $3.4 million compared to $2.6 million for the second quarter of 2024. For the first half of 2025 net income increased by 53.5% to $7.2 million compared to $4.7 million in the first half of 2024.Adjusted EBITDA increased by 39.2% to $6.1 million (14.0% of revenues) compared to $4.3 million (11.9% of revenues) for the second quarter of 2024. Adjusted EBITDA for the first half of 2025 increased by 47.1% to $11.8 million compared to $8.0 million in the first half of 2024 (13.9% of revenues in H1\25 compared to 11.4% in H1\24). Cash flow provided by operating activities for the three and six months ended June 30, 2025, was $6.9 million and $1.9 million, respectively, compared to cash flows used in operating activities of $(4.1) million and $(7.6) million for the three and six months ended June 30, 2024, respectively. Mr. Igal Zamir, TAT's CEO and President, commented: "TAT Technologies delivered another quarter of organic growth and improved profitability, with second quarter revenue growing 18% year over year, adjusted EBITDA increasing 39%, and $7 million in cash generated from operations. We continue to outpace the industry, despite certain slowdowns in MRO activity, by leveraging the diversification of our business across trading and MRO\OEM segments. Over the last month, MRO intake began to re-accelerate, providing greater visibility and reinforcing our confidence in continued year-over-year growth." "In addition to the double-digit revenue growth, the value of our LTA and backlog grew by approximately $85 million to $524 million, which will flow into revenue over the coming years," added Mr. Zamir. "The broad-based growth was driven by winning several new contracts, including some for the 777APU, and also by increasing the volume of activity from existing contracts for both OEM and MRO." Mr. Zamir continued, "This quarter, we successfully completed a capital raise of $45 million, further strengthening our balance sheet. From this position of increased strength, we are continuing to evolve in alignment with the significant opportunities in front of us. Our diversified offering has positioned us to perform well relative to the broader market, and we are now beginning to explore accretive strategic opportunities to further enhance our growth prospects. As we scale, we are also taking steps to strengthen our Board of Directors with capabilities to support the next phase of the Company's development. We remain focused on scaling the business and creating tangible, long-term value for our shareholders." With the growing LTA value and backlog, strong order intake, and the ramp up in MRO activity, we are confident in our ability to sustain growth and expand profit margins through 2026," concluded Mr. Zamir. 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. 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. 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. 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. About TAT Technologies LTD We are a leading provider of solutions and services to the aerospace and defense industries. We operate four operational units: (i) original equipment manufacturing ("OEM") of heat transfer solutions and aviation accessories through our Kiryat Gat facility (TAT Israel); (ii) maintenance repair and overhaul ("MRO") services for heat transfer components and OEM of heat transfer solutions through our subsidiary Limco Airepair Inc. ("Limco"); (iii) MRO services for aviation components through our subsidiary, Piedmont Aviation Component Services LLC ("Piedmont") (mainly Auxiliary Power Units ("APUs") and landing gear); and (iv) overhaul and coating of jet engine components through our subsidiary, Turbochrome Ltd. ("Turbochrome"). TAT's activities in the area of OEM of heat transfer solutions and aviation accessories through TAT Israel primarily include the design, development and manufacture of (i) a 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 and ground applications; and (iii) a variety of mechanical aircraft accessories and systems such as pumps, valves, and turbine power units. TAT's activities in the area of MRO and OEM of heat transfer solutions include the MRO of heat transfer components and to a lesser extent, the manufacturing of certain heat transfer solutions. TAT's Limco subsidiary operates a Federal Aviation Administration ("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 and landing gear. 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 jet engine overhaul through its Turbochrome facility includes the overhaul and coating of jet engine components, including turbine vanes and blades, fan blades, variable inlet guide vanes and afterburner flaps. Contact:Mr. Eran YungerDirector of IR[email protected] Safe Harbor for Forward-Looking Statements This press release and/or this report contains "forward-looking statements" within the meaning of the United States federal securities laws. These forward-looking statements 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. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands June 30, December 31, 2025 2024 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 43,126 $ 7,129 Short-term bank deposits 57 - Accounts receivable, net of allowance for credit losses of $425 and $400 as of June 30, 2025, and December 31, 2024, respectively 32,266 29,697 Inventory 76,414 68,540 Prepaid expenses and other current assets 6,610 7,848 Total current assets 158,473 113,214 NON-CURRENT ASSETS: Property, plant and equipment, net 44,646 41,576 Operating lease right of use assets 3,475 2,282 Intangible assets, net 1,558 1,553 Investment in affiliates 4,188 2,901 Funds in respect of employee rights upon retirement 709 654 Deferred income taxes 295 877 Restricted deposit 291 305 Total non-current assets 55,162 50,148 Total assets $213,635 $ 163,362 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of long-term loans $ 2,088 $ 2,083 Short-term loans - 4,350 Accounts payable 15,564 12,158 Accrued expenses and other 15,273 18,594 Current maturities of operating lease liabilities 993 939 Total current liabilities 33,918 38,124 NON-CURRENT LIABILITIES: Long-term loans 10,310 10,938 Liability in respect of employee rights upon retirement 1,098 986 Operating lease liabilities 2,528 1,345 Total non-current liabilities 13,936 13,269 COMMITMENTS AND CONTINGENCIES (NOTE 4) - - Total liabilities 47,854 51,393 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS U.S dollars in thousands SHAREHOLDERS' EQUITY: Ordinary shares of NIS 0 par value at June 30, 2025 and at December 31, 2024 respectively Authorized: 15,000,000 shares at June 30, 2025 and 13,000,000 at December 31, 2024; Issued: 13,161,762 and 11,214,831 shares at June 30, 2025 and at December 31, 2024, respectively; Outstanding: 12,887,289 and 10,940,358 shares at June 30, 2025 and at December 31, 2024, respectively - - Additional paid-in capital 135,578 89,697 Treasury stock at cost (2,088) (2,088) Accumulated other comprehensive income (loss) 600 (76) Retained earnings 31,691 24,436 Total shareholders' equity 165,781 111,969 Total liabilities and shareholders' equity $ 213,635 $ 163,362 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME U.S. dollars in thousands Three months ended Six months ended June 30, June 30, 2025 2024 2025 2024 Revenues: Products $ 12,463 $ 11,732 $25,187 $ 23,667 Services 30,641 24,793 60,059 46,946 43,104 36,525 85,246 70,613 Cost of goods: Products 9,112 7,673 17,443 16,659 Services 23,167 20,868 47,024 38,904 32,279 28,541 64,467 55,563 Gross profit 10,825 7,984 20,779 15,050 Operating expenses: Research and development, net 240 343 564 620 Selling and marketing 2,185 1,993 4,113 3,653 General and administrative 3,965 2,916 7,497 6,225 Other income - (2) - (390) 6,390 5,250 12,174 10,108 Operating income 4,435 2,734 8,605 4,942 Interest expenses (324) (413) (659) (763) Other financial income (expenses), net (776) 106 (499) 7 Income before taxes on income (taxes benefit) 3,335 2,427 7,447 4,186 Provision for taxes on income (taxes benefit) 211 44 803 (109) Profit before share of equity investment 3,124 2,383 6,644 4,295 Share in profits of equity investment of affiliated companies 318 234 611 432 Net income $ 3,442 $ 2,617 $ 7,255 $ 4,727 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME U.S. dollars in thousands, except share and per share data Earnings per share Basic $ 0.30 $ 0.26 $ 0.65 $ 0.46 Diluted $ 0.30 $ 0.25 $ 0.64 $ 0.44 Weighted average number of shares outstanding Basic 11,447,986 10,394,654 11,196,992 10,386,859 Diluted 11,666,309 10,561,420 11,409,488 10,722,153 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME U.S. dollars in thousands Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Net income $ 3,442 $ 2,617 $ 7,255 $ 4,727 Other comprehensive income (loss), net Net unrealized losses from derivatives - - - (27) Change in foreign currency translation adjustments 148 164 676 164 Total comprehensive income $ 3,590 $ 2,781 $ 7,931 $ 4,864 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY U.S. dollars 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 6 MONTHS ENDED JUNE 30, 2024: Comprehensive income - - - 137 - 4,727 4,864 Exercise of option 49,109 12 (12) - - - - Share based compensation - - 189 - - - 189 BALANCE AT JUNE 30, 2024 10,426,194 3,152 76,512 164 (2,088) 17,996 95,736 BALANCE AT DECEMBER 31, 2024 11,214,831 - 89,697 (76) (2,088) 24,436 111,969 CHANGES DURING THE 6 MONTHS ENDED JUNE 30, 2025: Comprehensive income - - - 676 - 7,255 7,931 Exercise of option 79,633 - - - - - - Issuance of common shares on public offering, net of issuance costs of $2,769 1,625,000 - 39,415 - - - 39,415 Exercise of the underwriters' option on public offering, net of issuance costs of $413 242,298 - 5,953 - - - 5,953 Share based compensation - - 513 - - - 513 BALANCE AT JUNE 30, 2025 13,161,762 $ - $ 135,578 $ 600 $ (2,088) $ 31,691 $ 165,781 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY U.S. dollars in thousands, except share data Share capital Accumulated Number of shares issued Amount Additional paid-in capital other comprehensive income Treasury shares Retained earnings Total equity BALANCE AT MARCH 31, 2024 10,382,637 $ 3,141 $ 76,376 $ - $ (2,088) $ 15,379 $ 92,808 CHANGES DURING THE 3 MONTHS ENDED JUNE 30, 2024: Comprehensive income - - - 164 - 2,617 2,781 Exercise of option 43,557 11 (12) - - - (1) Share based compensation - - 148 - - - 148 BALANCE AT JUNE 30, 2024 10,426,194 3,152 76,512 164 (2,088) 17,996 95,736 BALANCE AT MARCH 31, 2025 11,214,831 - 89,919 452 (2,088) 28,249 116,532 CHANGES DURING THE 3 MONTHS ENDED JUNE 30, 2025: Comprehensive income - - - 148 - 3,442 3,590 Exercise of stock option 79,633 - - - - - - Issuance of common shares on public offering, net of issuance costs of $2,769 1,625,000 - 39,415 - - - 39,415 Exercise of the underwriters' option on public offering, net of issuance costs of $413 242,298 - 5,953 - - - 5,953 Share based compensation - - 291 - - - 291 BALANCE AT JUNE 30, 2025 13,161,762 $ - $ 135,578 $ 600 $ (2,088) $ 31,691 $ 165,781 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS U.S. dollars in thousands Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 3,442 $ 2,617 $ 7,255 $ 4,727 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 1,208 1,431 2,513 2,805 Non-cash financial (income) expenses 600 (276) 508 (486) Change in allowance for credit losses 75 40 25 40 Share in profits of equity investment of affiliated companies (318) (234) (611) (432) Share based compensation 291 148 513 189 Gain on disposal of property, plant and equipment - (1) - (355) Deferred income taxes, net 63 306 582 (103) Changes in operating assets and liabilities: Decrease (increase) in trade accounts receivable 882 (5,430) (2,594) (6,250) Decrease (increase) in prepaid expenses and other current assets 1,697 (129) 1,183 (283) Increase in inventory (3,434) (2,906) (7,295) (5,543) Increase (decrease) in trade accounts payable 2,972 (209) 3,406 (909) Decrease (increase) in accrued expenses and other (529) 543 (3,571) (1,047) Net cash provided by (used in) operating activities 6,949 (4,100) 1,914 (7,647) CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of property and equipment - - - 1,306 Purchase of property and equipment (3,305) (978) (6,167) (1,967) Net cash used in investing activities (3,305) (978) (6,167) (661) CASH FLOWS FROM FINANCING ACTIVITIES: Repayments of long-term loans (516) (510) (1,087) (950) Proceeds from issuance of ordinary shares and exercise of the underwriters' option 48,550 (1) 48,550 - Issuance costs of ordinary shares and exercise of the underwriters' option (2,820) - (2,820) - Net change in short term loans from banks (10,719) 4,668 (4,350) 668 Net cash provided by (used in) financing activities 34,495 4,157 40,293 (282) Net increase (decrease) in cash and cash equivalents and restricted cash 38,139 (921) 36,040 (8,590) Cash and cash equivalents and restricted cash at beginning of period 5,335 9,273 7,434 16,942 Cash and cash equivalents and restricted cash at the end of period $ 43,474 $ 8,352 $ 43,474 $ 8,352 Supplementary information on investing and financing activities not involving cash flows: Additions of operating lease right-of-use assets and operating lease liabilities $ 1,688 $ 245 $ 1,835 $ 590 Reclassification between inventory and property, plant and equipment - - 579 60 Unpaid issuance costs of ordinary shares and exercise of the underwriters' option 362 - 362 - Supplemental disclosure of cash flow information: Interest paid 249 410 516 852 TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA (NON-GAAP) (UNAUDITED) (U.S. dollars in thousands) Three months ended Six months ended June 30, June 30, 2025 2024 2025 2024 Net income $ 3,442 $ 2,617 $ 7,255 $4,727 Adjustments: Share in results and sale of equity investment of affiliated companies (318) (234) (611) (432) Taxes on income (tax benefit) 211 44 803 (109) Financial expenses, net 1,100 306 1,158 756 Depreciation and amortization 1,328 1,468 2,691 2,898 Share based compensation 291 148 513 189 Adjusted EBITDA $ 6,054 $ 4,349 $ 11,809 $ 8,029 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 Second Quarter 2025 Results

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