zk1618126.htm
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 February 2016

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 x   Form 40-F o

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): o

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): o

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 o                       No x

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 February 24, 2016 re TAT Technologies Ltd. Reports 2015 Results.
 
ITEM 1

Press Release
Source: TAT Technologies Limited

TAT Technologies Reports 2015 Results

GEDERA, Israel, Wednesday, February 24, 2016 - TAT Technologies Ltd. (NASDAQ: TATT - News) (the “Company”), a leading provider of services and products to the commercial and military aerospace and ground defense industries, reported today its unaudited results for the year ended December 31, 2015.

Financial Highlights for the fourth quarter of 2015 (unaudited):
 
·
Total Revenue: $21.7 million compared to $21.4 million in the fourth quarter of 2014.

·
Operating income: $2.9 million compared to $2.2 million in the fourth quarter of 2014.
 
·
Net income: $3 million compared to $1.2 million in the fourth quarter of 2014.
 
·
Earnings per share basic and diluted: $0.34 per share compared to $0.13 per share in the fourth quarter of 2014.

Financial Highlights for 2015 (unaudited):
 
·
Total Revenue:  $85.6 million compared to $80.7 million in 2014.

·
Operating income: $5.6 million compared to $3.8 million in 2014.
 
·
Net income: $5.8 million compared to $1.4 million in 2014.
 
·
Earnings per share basic and diluted: $0.66 per share compared to $0.16 per share in 2014.

·
Cash and cash equivalents and short-term bank deposits: During 2015, the cash balance decreased in $ 1.2 million, from $28 million as of December 31, 2014 to $26.8 million as of December 31, 2015. Net cash provided by operating activities during the period was $0.7 million.

·
Chromalloy Israel Ltd. acquisition: On Oct 19, 2015, the Company announced that it has completed the acquisition of Chromalloy Israel Ltd. The Company has included Chromalloy Israel’s financial results in its consolidated financial statements as of the date of closing.
The transaction resulted in $ 4.8 million gain on bargain purchase.
 
Following the completion of the transaction, Chromalloy Israel has changed its name to Turbochrome Ltd. $1.9 million of the Company's revenue for the fourth quarter of 2015 is due to consolidation of Turbochrome's financial results for the first time following its acquisition by the Company.

 
2
 
·
Long-Term Projects: During a periodic assessment of its long-term projects, the Company updated its estimates of profits expected to be earned from several long-term contracts. This assessment resulted in a decrease in revenues for the year ended December 31, 2015 in an amount of $2.1 million and a decrease of $1.4 million in net income for the same period.

·
New JV in Russia: The Company has recently announced that it has signed an agreement with Engineering Holding of Moscow, Russia, to establish a new maintenance facility for heat exchangers. The new company, TAT-Engineering LLC, will be based in Novosibirsk’s Tolmachevo airport.

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 or “OEM” of Heat Management Solutions (ii) Heat Transfer Services and Products (iii) Maintenance, Repair and Overhaul or “MRO” services of Aviation Components and (iv) overhaul and coating of certain jet engine components.

TAT’s activities in the area of OEM of Heat Management Solutions primarily include the design, development, manufacture and sale of (i) a broad range of heat transfer components (such as heat exchangers, pre-coolers and oil/fuel hydraulic coolers) used in mechanical and electronic systems on-board commercial, military and business aircraft; (ii) environmental control and cooling systems on board aircraft and for ground applications; and (iii) a variety of other electronic and mechanical aircraft accessories and systems such as pumps, valves, power systems and turbines.

TAT’s activities in the area of Heat Transfer Services and Products include the maintenance, repair and overhaul of heat transfer equipment and in a lesser extent, the manufacturing of certain heat transfer products. TAT’s Limco subsidiary operates FAA certified repair station, which provides heat transfer MRO services and products 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 maintenance, repair and overhaul of APUs, Landing Gear 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 jet engine overhaul includes the overhaul and coating of jet engine components, including turbine vanes and blades, fan blades, variable inlet guide vanes, afterburner flaps and other components.

For more information of TAT Technologies Ltd., please visit our web-site:
www.tat-technologies.com

Guy Nathanzon – CFO
TAT Technologies Ltd.
Tel: 972-8-862-8500
guyn@tat-technologies.com

 
3
 
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)

   
December 31,
    
December 31,
  
   
2015
    
2014
  
   
(unaudited)
    
(Revised)
  
ASSETS
            
Current Assets:
            
Cash and cash equivalents
   $ 18,688     $ 22,894  
Short-term bank deposits
     8,122       5,089  
Accounts receivable-trade (net of allowance for doubtful accounts
   of  $331 as of December 31, 2015 and $125 as of December 31, 2014)
     19,151       15,657  
Other accounts receivable and prepaid expenses
     3,025       2,604  
Inventories, net
     36,664       35,477  
                 
Total current assets
     85,650       81,721  
                 
Long-term assets:
                
Investment in an affiliated company
     -       2,556  
Investment in investee company
     169       -  
Funds in respect of employee rights upon retirement
     2,626       2,496  
Long-term deferred tax
     890       879  
Property, plant and equipment, net
     18,934       11,524  
Intangible assets, net
     1,314       -  
                 
Total Long-term assets
     23,933       17,455  
                 
Total assets
   $ 109,583     $ 99,176  
                 
LIABILITIES AND EQUITY
                
                 
Current Liabilities:
                
Accounts payables trade
     7,022       5,886  
Other accounts payable and accrued expenses
     7,815       5,060  
Total current liabilities
     14,837       10,946  
                 
Long-term liabilities:
                
      Other accounts payable
     189       34  
Liability in respect of employee rights upon retirement
     2,871       2,655  
Long-term deferred tax liability
     262       -  
                 
Total long-term liabilities
     3,322       2,689  
                 
Total liabilities
     18,159       13,635  
                 
EQUITY:
                
Share capital
     2,793       2,793  
Additional paid-in capital
     64,529       64,491  
Treasury stock at cost
     (2,088 )     (2,088 )
Accumulated other comprehensive loss
     (4 )     -  
Retained earnings
     26,194       20,345  
Total equity
     91,424       85,541  
                 
Total liabilities and equity
   $ 109,583     $ 99,176  

 
5
 
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share data)

   
Three months ended
    
Twelve months ended
  
   
December 31,
  
   
2015
    
2014
    
2015
    
2014
  
   
(unaudited)
    
(unaudited)
    
(unaudited)
        
         
(Revised)
          
(Revised)
  
Revenues:
  
 
                    
Products
   $ 8,359     $ 8,348     $ 31,339     $ 31,363  
Services
     13,344       13,037       54,268       49,363  
      21,703       21,385       85,607       80,726  
                                 
Cost  of goods:
                                
Products
     5,875       5,891       24,466       23,616  
Services
     13,530       10,329       47,476       40,906  
      19,405       16,220       71,942       64,522  
Gross Profit
     2,298       5,165       13,665       16,204  
                                 
Operating expenses:
                                
Research and development, net
     320       185       890       1,070  
Selling and marketing
     773       788       2,903       3,203  
General and administrative
     2,488       2,024       8,469       8,123  
Other expenses (income)
     631       -       631       (11 )
Gain on bargain purchase
     (4,833 )     -       (4,833 )     -  
      (621 )     2,997       8,060       12,385  
Operating income
     2,919       2,168       5,605       3,819  
                                 
Financial expenses, net
     (117 )     (511 )     (349 )     (1,294 )
                                 
Income before taxes on income
     2,802       1,657       5,256       2,525  
                                 
Taxes on income
     (455 )     550       644       1,360  
                                 
Net income after taxes on income
     3,257       1,107       4,612       1,165  
Share in results and sale of equity investment of affiliated company
     (254 )     45       1,237       267  
                                 
Net income
   $ 3,003     $ 1,152     $ 5,849     $ 1,432  
                                 
Basic and diluted income per share
                                
                                 
Net income  per share
   $ 0.34     $ 0.13     $ 0.66     $ 0.16  
                                 
Weighted average number of shares outstanding
                                
Basic
     8,808,344       8,808,344       8,808,344       8,808,344  
Diluted
     8,813,533       8,811,824       8,810,689       8,826,542  

 
6
 
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
 
   
Three months ended
    
Twelve months ended
  
   
December 31,
  
   
2015
    
2014
    
2015
    
2014
  
   
(unaudited)
    
(unaudited)
    
(unaudited)
        
         
(Revised)
          
(Revised)
  
Net income
   $ 3,003     $ 1,152     $ 5,849     $ 1,432  
Other comprehensive income
                                
Foreign currency translation adjustments
     -       -       -       429  
Net unrealized losses from derivatives
     (4 )     -       (4 )     -  
Total other comprehensive income
   $ 2,999     $ 1,152     $ 5,845     $ 1,861  
 
 
7
 
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
    
Non-controlling interest
    
Total equity
  
                                                 
BALANCE AT DECEMBER 31, 2012 (audited)
     9,073,043     $ 2,790     $ 64,410     $ (897 )   $ (2,088 )   $ 18,111     $ 2,803     $ 85,129  
CHANGES DURING THE YEAR ENDED DECEMBER 31, 2013 (audited):
                                                                
Comprehensive income (loss)
     -       -       -       468       -       2,802       (842 )     2,428  
Share based compensation expenses
     -       -       3       -       -       -       -       3  
Exercise of options
     6,666       2       41       -       -       -       -       43  
BALANCE AT DECEMBER 31, 2013 (audited)
     9,079,709     $ 2,792     $ 64,454     $ (429 )   $ (2,088 )   $ 20,913     $ 1,961     $ 87,603  
CHANGES DURING THE YEAR ENDED DECEMBER 31, 2014 (audited):
                                                                
Comprehensive income
     -       -       -       429       -       1,432       -       1,861  
Share based compensation expenses
     -       -       38       -       -       -       -       38  
Exercise of option
     3,108       1       (1 )     -       -       -       -       -  
Dividend distributed
     -       -       -       -       -       (2,000 )     -       (2,000 )
Sale of subsidiary
     -       -       -       -       -       -       (1,961 )     (1,961 )
BALANCE AT DECEMBER 31, 2014 (audited)
     9,082,817     $ 2,793     $ 64,491     $ -     $ (2,088 )   $ 20,345     $ -     $ 85,541  
CHANGES DURING THE YEAR ENDED DECEMBER 31, 2015 (unaudited):
                                                                
Comprehensive income (loss)
     -       -       -       (4 )     -       5,849       -       5,845  
Share based compensation expenses
     -       -       38       -       -       -       -       38  
BALANCE AT DECEMBER 31, 2015 (unaudited)
     9,082,817     $ 2,793     $ 64,529     $ (4 )   $ (2,088 )   $ 26,194     $ -     $ 91,424  

 
8
 
TAT TECHNOLOGIES AND ITS SUBSIDIARIES
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 
   
Three months ended
    
Twelve months ended
  
   
December 31,
  
   
2015
    
2014
    
2015
    
2014
  
   
(unaudited)
    
(unaudited)
    
(unaudited)
        
         
(Revised)
          
(Revised)
  
CASH FLOWS FROM OPERATING ACTIVITIES:
                        
Net income
   $ 3,003     $ 1,152     $ 5,849     $ 1,432  
                                 
Adjustments to reconcile net income to net cash provided by operating activities:
                                
                                 
Depreciation
     891       526       2,781       2,069  
Exchange differentials of loans
     -       -       -       (1 )
Gain on sale of property and equipment
     -       17       -       10  
Interest from short-term bank deposits and restricted deposits
     (13 )     (59 )     (33 )     (128 )
Loss from change in fair value of derivatives
     10       -       10       -  
Provision for doubtful accounts
     62       -       206       -  
Share in results and sale of equity investment of affiliated company
     254       (45 )     (1,237 )     (267 )
Share based compensation expenses
     12       10       38       38  
Gain on bargain purchase
     (4,833 )     -       (4,833 )     -  
Liability in respect of employee rights upon retirement
     (25 )     (373 )     28       (485 )
Deferred income taxes, net
     (693 )     1,496       (21 )     1,229  
Changes in operating assets and liabilities:
                                
    Amounts due to related parties, net
     -       -       -       5  
    Decrease (increase) in trade accounts receivable
     1,528       (1,352 )     (2,375 )     2,730  
    Decrease (increase) in other accounts receivable, prepaid expenses and other
     191       1,505       (85 )     (833 )
Increase in inventories, net
     (153 )     (4,605 )     (571 )     (6,009 )
    Increase (decrease) in trade accounts payable
     1,237       1,606       436       (509 )
    Increase (decrease) in other accounts payable and accrued expenses
     (527 )     (1,972 )     525       (715 )
    Increase (decrease) in other long-term liabilities
     (10 )     (6 )     15       (24 )
                                 
Net cash provided by (used in) operating activities
   $ 934     $ (2,100 )   $ 733     $ (1,458 )
                                 
CASH FLOWS FROM INVESTING ACTIVITIES:
                                
Proceeds from sale of subsidiary (A)
     -       -       -       2,176  
Acquisitions of subsidiary, net of cash acquired (B)
     (1,796 )     -       (1,796 )     -  
Proceeds from sale of equity investment of affiliated company
             -       3,624       -  
Funds in respect of employee rights upon retirement
     69       272       8       352  
Proceeds from sale of property and equipment
             12       9       19  
Purchase of property and equipment
     (871 )     (787 )     (3,315 )     (3,021 )
Investments in short-term deposits
     (3,000 )     -       (3,000 )     -  
Maturities of short-term deposits
     -       5,098       -       5,098  
Cash flows provided by (used in) investing activities
   $ (5,598 )   $ 4,595     $ (4,470 )   $ 4,624  
                                 
Cash flows used in financing activities
   $ (469 )   $ -     $ (469 )   $ (2,909 )
                                 
Net increase (decrease) in cash and cash equivalents
     (5,133 )     2,495       (4,206 )     257  
                                 
Cash and cash equivalents at beginning of period
     23,821       20,399       22,894       22,637  
                                 
Cash and cash equivalents at end of period
   $ 18,688     $ 22,894     $ 18,688     $ 22,894  
                                 
(A)  Proceeds from sale of subsidiary
                        
Assets held for sale (excluding cash in the amount of $2,823)
     -       -       -       7,136  
Liabilities held for sale
     -       -       -       (3,428 )
Non-controlling interest
     -       -       -       (1,532 )
    $ -     $ -     $ -     $ 2,176  
                         
(B)  Acquisitions of subsidiary
                        
           Assets (excluding cash in the amount of $1,164)
     (10,876 )     -       (10,876 )     -  
           Liabilities
     4,247       -       4,247       -  
           Gain on bargain purchase
     4,833       -       4,833       -  
    $ (1,796 )   $ -     $ (1,796 )   $ -  
 
 
9
 
 
Additional comments:

 
1.
During November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, which simplifies the presentation of deferred income taxes. ASU 2015-17 provides presentation requirements to classify deferred tax assets and liabilities as noncurrent in a classified statement of financial position. The standard is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is permitted for any interim and annual financial statements that have not yet been issued. We early adopted ASU 2015-17 effective October 31, 2015, retrospectively. Adoption resulted in a $1.7 million decrease in other accounts receivable and prepaid expenses, a $0.6 million decrease in other accounts payable and accrued expenses, a $0.7 million decrease in Long-term deferred tax assets, net, and a $1.8 million decrease in Long-term deferred tax liability, net in our Consolidated Balance Sheets at December 31, 2014. Adoption had no impact on our results of operations and cash flow.

 
2.
During the three months period ended December 31, 2015 the company adjusted the gain from the sale of equity investment of affiliated company reported in the three months period ended March 31, 2015.
 
 
3.
During Q3 2015, the Company identified an error related to the classification of US employees' social benefits expenses. Previously, the Company classified these expenses in ‘general and administrative expenses’ instead of classifying a part of them in ‘Cost of goods’ (product and services) for employees allocated to this line item. This change in classification also impacted the capitalization of inventory balances. There was no material impact on the statement of cash flows.
 
 
The error only impacts one segment of the Company, Heat Transfer Services and Products. The Company will revise previously reported segment information in its Annual Report on Form 20-F for the year ended December 31, 2015.
 
The Company assessed the materiality of this error in accordance with the SEC’s Staff Accounting Bulletin 99 and Accounting Standards Codification Topic 250, Accounting Changes and Error Corrections, and concluded that the previously issued financial statements were not materially misstated.  In accordance with the SEC’s Staff Accounting Bulletin, the Company will correct these errors by revising the affected financial statements in the Company’s 2015 Annual Report on Form 20-F.
 
 
10
 
 
Following is the effect of the revision on the Company’s previously reported results:
 
Statements of income per share:
 
For the three and twelve months periods ended December 31, 2014:
 
   
Three months ended
    
twelve months ended
  
   
December 31, 2014
    
December 31, 2014
  
   
As reported
previously
    
Adjustment
    
As revised
    
As reported
previously
    
Adjustment
    
As revised
  
Cost  of goods:
                                    
   Products
     5,829       62       5,891       23,340       276       23,616  
   Services
     10,172       157       10,329       40,286       620       40,906  
Gross profit
     5,384       (219 )     5,165       17,100       (896 )     16,204  
General and administrative
     2,248       (224 )     2,024       9,019       (896 )     8,123  
Operating income
     2,163       5       2,168       3,819       *       3,819  
Net (loss) income
     1,147       5       1,152       1,432       *       1,432  
Net income per share
     0.13       *       0.13       0.16       *       0.16  
 
*Represents an amount less than $1.
 
Balance sheets and shareholders' capital
 
As of December 31, 2014:
 
   
As reported
Previously
    
Adjustment
    
As revised
  
Inventories, net
     35,404       73       35,477  
Total current assets
     83,342       73       83,415  
Total assets
     101,468       73       101,541  
Retained earnings
     20,272       73       20,345  
Total equity
     85,468       73       85,541  

 
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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/ Guy Nathanzon  
   
Guy Nathanzon
  
   
Chief Financial Officer
  
       
Date: February 24, 2016
 
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