UNITED STATES
Washington D.C. 20549
☐
☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR
☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
2023
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report ………………
_____________
☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event requiring this shell company report .................... |
(Exact name of Registrant as specified in its charter
and translation of Registrant’s name into English)
(Jurisdiction of incorporation or organization)
Giborei Israel 7,
(Address of principal executive offices)
7 Giborei
Natanya4250407, Israel
Title of each class | Trading Symbol | Name of each exchange on which registered |
| TATT |
|
share............... 10,102,612
2023)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Large accelerated filer ☐ | Accelerated filer ☐ | Non-accelerated filer ☒ |
|
U.S. GAAP ☒ | International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ | Other ☐ |
Page | |||||
1 | |||||
A. | Selected Financial Data | ||||
B. | Capitalization and Indebtedness | ||||
C. | Reasons for the Offer and Use of Proceeds | ||||
D. | Risk Factors | ||||
A. | Business Overview | ||||
B. | Government Regulations | ||||
C. | Property, Plants and Equipment | ||||
A. | Research and Development, Patents and Licenses | ||||
B. | Trend Information | ||||
C. | Off-Balance Sheet Arrangements | ||||
D. | Tabular Disclosure of Contractual Obligations | ||||
A. | Directors and Senior Management | ||||
B. | |||||
C. | |||||
D. | Employees | 64 | |||
E. | Share Ownership | ||||
F. | Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation | 66 | |||
A. | Major Shareholders | ||||
B. | Related Party Transactions | ||||
C. | Interests of Experts and Counsel | ||||
A. | Consolidated Statements and Other Financial Information | ||||
B. | Significant Changes | ||||
A. | Offer and Listing Details | ||||
B. | Plan of Distribution | ||||
C. | Markets | ||||
D. | Selling Shareholders | ||||
E. | Dilution | ||||
F. | Expense of the Issue | ||||
A. | Share Capital | ||||
B. | Memorandum and Articles of Association | ||||
C. | |||||
D. | |||||
E. | |||||
F. | |||||
G. | |||||
H. | Documents on Display | 81 | |||
I. | Subsidiary Information |
87 | |||
87 | |||
87 | |||
TAT TECHNOLOGIES LTD.
The accompanying notes are an integral part of the consolidated financial statements. F - 5 TAT TECHNOLOGIES LTD.
The accompanying notes are an integral part of the consolidated financial statements. F - 6 TAT TECHNOLOGIES LTD.
The accompanying notes are an integral part of the consolidated financial statements. F - 7 TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
The accompanying notes are an integral part of the consolidated financial statements. F - 8
The accompanying notes are an integral part of the consolidated financial statements. F - 9 TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
The accompanying notes are an integral part of the consolidated financial statements. F - 10
The accompanying notes are an integral part of the consolidated financial statements. F - 11
The accompanying notes are an integral part of the consolidated financial statements. F - 12
In March 2021, the Company announced
The intensity and duration of Israel’s current war against Hamas is difficult to predict, as are such war’s economic implications on our business and operations and on Israel's economy in general. F - 13 TAT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
On November 25, 2015, the Company signed an agreement with Russian-based Engineering Holding of Moscow (“Engineering”), to establish a new facility for the provision of services for heat transfer products. The
The Group's financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP").
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclose the nature of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting years. Actual results could differ from those estimates. As applicable to these financial statements, the most significant estimates and assumptions relate to: recoverability of inventory, provision for current expected credit loss, and income taxes. F - 14 TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands
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NOTE 2 -SIGNIFICANT ACCOUNTING POLICIES (CONT)
c.Functional currency
The majority revenues of the revenues of each subsidiary in the Groupcompany and subsidiaries are generated in U.S. dollars ("dollars") and a substantial portion of the costs of the company and each subsidiary in the Group are incurred in dollars. Accordingly, the dollar is the currency of the primary economic environment in which the Group operates and accordingly its functional and reporting currency is the dollar.
d. | Principles of consolidation |
The consolidated financial statements include the accounts of TAT and its subsidiaries.
e. | Cash and Cash equivalents |
All highly liquid investments, which include short-term bank deposits, that are not restricted as to withdrawal or use, and short-term debentures, theuse. The period to maturity of which do not exceed three months at the time of investment, are considered to be cash equivalents.
2023 | 2022 | |||||||
Cash and cash equivalents | $ | 15,979 | $ | 7,722 | ||||
Restricted deposit short term | 661 | - | ||||||
Restricted deposit long term | 302 | 304 | ||||||
Total cash and cash equivalents and restricted cash equivalents | $ | 16,942 | $ | 8,026 |
F - 14
15
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
| SIGNIFICANT ACCOUNTING POLICIES (CONT) |
Accounts receivable, net | ||
NOTE 2 -SIGNIFICANT ACCOUNTING POLICIES (CONT)
f.Accounts receivable, net
The Group’s accounts receivable balances are due from customers primarily in the airline and defense industries. Credit is extended based on evaluation of a customer’s financial condition and generally, collateral is not required. Trade accounts receivable from sales of services and products are typically due from customers within 30 - 90 days. Trade accounts receivable balances are stated at amounts due from customers net of a provision for current expected losses. Accounts outstanding longer than their original contractual payment terms are considered past due.
Accounts receivables are stated at their net realizable value. The allowance against gross accounts receivables reflects the best estimate of losses inherent in the receivable’s portfolio determined based on historical experience, specific allowances for known troubled accounts and other currently available information. An allowance for doubtful debts is reflected in net accounts receivables. Account’s receivables are written off after all reasonable means to collect the full amount have been exhausted.
The Company’s accounts receivables accounting policy from January 1, 2020, following the adoption of the new CECL standard
Accounts receivable have been reduced by an allowance for current expected losses. The Company maintains the allowance for estimated losses resulting from the inability of the Company’s customers to make required payments. The allowance represents the current estimate of lifetime expected credit losses over the remaining duration of existing accounts receivable considering current market conditions and supportable forecasts when appropriate. The estimate is a result of the Company’s ongoing evaluation of collectability, customer creditworthiness, historical levels of credit losses, and future expectations.
F - 15
Inventory | ||
U.S. dollars in thousands
NOTE 2 -SIGNIFICANT ACCOUNTING POLICIES (CONT)
g.Inventory
Inventory is measured at the lower of cost and net realizable value.
If actual market prices are less favorable than those projected by management, inventory write-downs may be required. When inventory written-down, a new lower cost basis for that inventory is established.
F - 16
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
| SIGNIFICANT ACCOUNTING POLICIES (CONT) |
Property, plant and equipment | ||
NOTE 2 -SIGNIFICANT ACCOUNTING POLICIES (CONT)
h.Property, plant and equipment
Property, plant and equipment are stated at cost, after deduction of the related investment grants, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, as follows:
Years | ||
Buildings | ||
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25 – 39 | |
Leasehold improvements | 3 - 20 | |
Machinery and equipment | 15 | |
Motor vehicles | 7 | |
Office furniture and equipment | 3 | |
Internal use software | 7 |
consolidated balance sheet.
i. | Government grants: |
Grants received from the IIA for approved research and development projects are recognized at the time the Company is reasonably assured that it will be entitled to such grants, on the basis of the costs incurred and included as a deduction from research and development expenses. Due to the fact that the Company is defined as a "Traditional Industry Company", under the IIA regulations, the majority of grants are non-royalty bearing.
j. | Investment in affiliates and share in results of equity investment of affiliated companies |
F - 17
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
| SIGNIFICANT ACCOUNTING POLICIES (CONT) |
Leases | ||
NOTE 2 -SIGNIFICANT ACCOUNTING POLICIES (CONT)
k.Leases
The Company determines if an arrangement is a lease at inception. Balances related to operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities in the consolidated balance sheets.
l. | Identified intangible assets |
Identifiable intangible assets are comprised of definite lived intangible assets - customer relationships and– commercial license which are amortized over 7 and 10 years respectively, using the straight-line method over their estimated period of useful life as determined by identifying the period in which substantially all of the cash flows are expected to be generated. Amortization of customer relationships is recorded under selling and marketing expenses (this intangible asset was fully impaired during the year ended December 31, 2020, see note 8) and theThe amortization of the commercial license is recorded in the cost of sales.
m. | Impairment of long-lived assets |
Long-lived assets, including property, plant and equipment, operating lease right of use assets and definite life intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets (or asset group) may not be recoverable. In the event that the sum of the expected future cash flows (undiscounted and without interest charges) of the long-lived assets (or asset group) is less than the carrying amount of such assets, an impairment charge would be recognized and the assets (or asset group) would be written down to their estimated fair values (see also notes 6Notes 6,7 and 7)8).
n.F - 18Treasury Shares
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
NOTE 2 - | SIGNIFICANT ACCOUNTING POLICIES (CONT) |
n. | Treasury Shares |
o. | Revenue Recognition |
F - 18
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NOTE 2 -SIGNIFICANT ACCOUNTING POLICIES (CONT)
o.Revenue recognition
The Group generates its revenues from the sale of OEM products and systems, providing MRO services (remanufacture, maintenance, repair and overhaul services and long - term service contracts) and parts services.
sales.
Other major provisions include capitalization of certain contract costs, consideration of the time value of money in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances.
F - 19
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
| SIGNIFICANT ACCOUNTING POLICIES (CONT) |
Revenue recognition (cont.) | ||
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p.Revenue recognition (cont.)
The Company has adopted the following exemptions and accounting policies:
The group recognizes revenuesRevenues from the sale of OEM products when it satisfiesis recognized at a performance obligation, i.e.point in time when or as the customer obtains control of the product, typically upon product shipment. The Group does not grant a rightInvoices are issued based on the customer's approved PO and payment terms are due net 30 to net 90 from invoice date.
The Group recognizes revenues from MRO services over time as it satisfies its performance obligations. The Group satisfies its performance, accordingis recognized upon meeting all revenue recognition criteria, which involve receiving customers' purchase orders, completing the service, and fulfilling inspection quality assurance obligations at the company's production site. Payment are due upon net 30 to required milestones.
net 45 from invoice date.
F - 20
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
| SIGNIFICANT ACCOUNTING POLICIES (CONT) |
p. | Warranty costs | |
U.S. dollars in thousands
NOTE 2 -SIGNIFICANT ACCOUNTING POLICIES (CONT)
q.Warranty costs
The Group provides warranties for its products and services ranging from one to three years, which vary with respect to each contract and in accordance with the nature of each specific product. According to company'sCompany's experience, most of the warranty costs incur during the first year of the contract.
q. | Research and development |
Research and development costs, net of grants, are charged to expenses as incurred.
incurred and consist primarily of personnel and related expenses for research and development activities.
r. | Fair value measurement |
The Group measures fair value and discloses fair value measurements for financial assets and liabilities. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
F - 21
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
| SIGNIFICANT ACCOUNTING POLICIES (CONT) |
r. | Fair value measurement (cont.) | |
| ||
|
s.Fair value measurement (cont.)
Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.
s. | Concentrations of credit risk |
Financial instruments that potentially subject the Group to concentrations of credit risk consist principally of cash and cash equivalents, derivatives and accounts receivable.
Company. As of December 31, 2023 the Company has a single customer which represents 17.5% of the Company's accounts receivable. As of December 2022, no individual customer represented 10% or more of the Company's accounts receivable.
t. | Income taxes |
Income taxes are accounted for in accordance with ASC 740 "Income Taxes". This statement prescribes the use of the asset and liability method, whereby deferred tax assets and liabilities account balances are determined based on temporary differences between financial reporting and tax basis of assets and liabilities and for tax loss carry-forwards. Deferred taxes are measured using the enacted laws and tax rates that will be in effect when the differences are expected to reverse. The Group provides a valuation allowance, if it is more likely than not that a portion of the deferred income tax assets will not be realized, see note 17(h)Note 19(h).
Taxes which would apply in the event of distribution of earnings from foreign subsidiaries of the Company, have been taken into account in computing the deferred taxes, when there is a possibility of future distribution of earnings from such foreign subsidiaries.
F - 22
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
| SIGNIFICANT ACCOUNTING POLICIES (CONT) |
t. | Income taxes (cont.) | |
| ||
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u.Income taxes (cont.)
The Group did not provide for deferred taxes attributable to dividend distribution out of retained tax-exempt earnings from "Approved/Benefited Enterprise" plans (see note 13(a)Note 19(a)), since it intends to permanently reinvest them and has no intention to declare dividends out of such tax exempttax-exempt income in the foreseeable future. Management considers such retained earnings to be essentially permanent in duration.
u. | Earnings per share |
Basic earnings (loss) per share are computed by dividing net income (loss) by the weighted average number of shares of the Company's Ordinary Shares, par value NIS 0.9 per share outstanding for each period.
period, net of treasury shares.
v. | Share-based compensation |
The Group applies ASC 718 "Stock Based Compensation" with respect to employees and directors’ options, which requires awards classified as equity awards to be accounted for using the grant-date fair value method. The fair value of share-based awards is estimated using the Black-Scholes valuation model, the payment transaction is recognized as expense over the requisite service period, net of estimated forfeitures. The Company estimates forfeitures based on historical experience and anticipated future conditions.
F - 23
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|
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NOTE 2 -SIGNIFICANT ACCOUNTING POLICIES (CONT)
w.Share-based compensation (cont)
The Group recognizes compensation cost for an award with only service conditions that has a graded vesting schedule using the accelerated method over the requisite service period for the entire award.period.
x.F - 23Comprehensive income (loss)
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
NOTE 2 - | SIGNIFICANT ACCOUNTING POLICIES (CONT) |
w. | Comprehensive income (loss) |
x. | Contingencies |
F - 24
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NOTE 2 -SIGNIFICANT ACCOUNTING POLICIES (CONT)
y.Contingencies
Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Group but which will only be resolved when one or more future events occur or fail to occur. The Group’s management assesses such contingent liabilities and estimated legal fees, if any, and accrues for these costs.fees. Such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Group or unasserted claims that may result in such proceedings, the Group’s management evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought.
y. | Derivatives and hedging |
The Company carries out transactions involving foreign currency exchange derivative financial instruments. The transactions are designed to hedge the Company’s exposure in currencies other than the U.S. dollar. Derivatives are recognized at fair value as either assets or liabilities in the consolidated balance sheets in accordance with ASC Topic 815, “Derivatives and Hedging”.
If a derivative does not meet the definition of a cash flow hedge, the changes in the fair value are included in "financial expense (income), net".
F - 25
24
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
| SIGNIFICANT ACCOUNTING POLICIES (CONT) |
Restructuring Costs | ||
NOTE 2 -SIGNIFICANT ACCOUNTING POLICIES (CONT)
aa.Restructuring Costs
Restructuring costs have been recorded in connection with TAT’s restructuring plan announced in March 2021. Following this decision and in anticipation of ongoing efficiency measures in our business, TAT’s management has made estimates and judgments regarding future plans, mainly related to employee termination benefit costs. Management also assesses the recoverability of long-lived assets employed in the business. In certain instances, asset lives have been shortened based on changes in the expectedestimated useful lives of the affected assets. Asset-related impairments and employee's severance and other related costs are reflected within asset impairments of fixed assets, provision for restructuring plan and restructuring expenses.
aa. | Recently Issued Accounting Principles: |
Recently adoptedNew accounting pronouncements:pronouncements effective in future periods:
(1)
In addition, this Update also simplify the accounting for income taxes in certain topics as follows: 1. Requiring that an entity recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax; 2. Requiring that an entity evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction;3. Specifying that an entity can elect (rather than required to) allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements;4. Requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computationreconciliation and income taxes paid information. This guidance requires disclosure of specific categories in the interim period that includeseffective tax rate reconciliation and further information on reconciling items meeting a quantitative threshold. In addition, the enactment date.
amended guidance requires disaggregating income taxes paid (net of refunds received) by federal, state, and foreign taxes. It also requires disaggregating individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received). The amendments in this Update areamended guidance is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2020.2024. The new standard does notguidance can be applied either prospectively or retrospectively. We are evaluating the impact this amended guidance may have a material effect on the Company'sfootnotes to our consolidated financial statements.
Accounting pronouncements issued but not yet adopted:
(1)In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832), which increases the transparency of government assistance including disclosure of the type of assistance, an entity’s accounting for the assistance, and the effect of the assistance on an entity’s financial statements. ASU 2021-10 is effective for all entities for financial statements issued for annual periodsfiscal years beginning after December 15, 2021. An entity should apply2023, and interim periods in fiscal years beginning after December 15, 2024, with early adoption permitted. We are evaluating the amendments either prospectivelyimpact this amended guidance may have on the footnotes to all transactions within the scope of the ASU that are reflected in theour consolidated financial statements at the date of initial application and that are entered into after that date or retrospectively to those transactions.
F - 26
25
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
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NOTE 3 - | FAIR VALUE MEASUREMENT |
Recurring Fair Value Measurements
December 31, 2021 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | ||||||||||||||||
Derivative financial instruments | 0- | $ | 51 | 0- | $ | 51 |
December 31, 2020 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | ||||||||||||||||
Derivative financial instruments | 0- | $ | 128 | 0- | $ | 128 |
December 31, 2023 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Liability (Accrued expenses and other): | ||||||||||||||||
- | $ | (22 | ) | - | $ | (22 | ) |
December 31, 2022 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Liability (Accrued expenses and other): | ||||||||||||||||
- | $ | (31 | ) | - | $ | (31 | ) |
a. | Derivative financial instruments: |
The companyCompany hedges the foreign currency risk arising from probable forecasted Israeli Shekel ("ILS") expenses as part of its risk management policy. The risk management objective is to hedge the foreign currency exchange rate fluctuations associated with ILS denominated forecasted probable expenses according to the company'sCompany's hedging policy. The majority of the ILS exposure arises from expected related salary expenses. The Company enters into contracts for derivative financial instruments forward contracts in order to execute its policy. Such derivatives are recognized at fair value. The fair value of forward contracts is calculated as the difference between the forward rate on valuation date and the forward rate on the original forward contract, multiplied by the transaction's notional amount. At the inception of a hedge relationship, the Company formally designates and documents the hedge relationship to which the Company wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. The hedge effectiveness is assessed at the end of each reporting period.
The effective portion" as of December 31, 2023 that is determined by looking into changes in spot exchange rate.
The change in fair value attributableexpected to changes other than those due to fluctuations in the spot exchange rate are excluded from the assessment of hedge effectiveness and are recognized in the statement of income under financial expenses-net.
F - 27
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NOTE 3 -FAIR VALUE MEASUREMENT (CONT)
For derivative instruments that are designated and qualify as a cash-flow hedge, the gain or loss on the derivative instrument is reported as a component of other comprehensive income andbe reclassified into earnings within the next 12 months is immaterial.
F - 26
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in the same line item associated with the anticipated transaction in the same period or periods during which the hedged transaction affects earnings.thousands
For derivative instruments that qualify for hedge accounting, the cash flows associated with these derivatives are reported in the consolidated statements of cash flows consistently with the classification of the cash flows from the underlying hedged items that these derivatives are hedging.
NOTE 3 - | FAIR VALUE MEASUREMENT (CONT) |
NOTE 4 - | INVENTORY |
Inventory is composed of the following:
December 31, | ||||||||
2021 | 2020 | |||||||
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Raw materials and components | $ | 13,741 | $ | 11,281 | ||||
Work in progress | 11,985 | 15,432 | ||||||
Spare parts | 13,462 | 13,147 | ||||||
Finished goods | 1,815 | 1,363 | ||||||
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Total inventory (**) | $ | 41,003 | $ | 41,223 |
December 31, | ||||||||
2023 | 2022 | |||||||
Raw materials and components | $ | 36,934 | $ | 30,410 | ||||
Work in progress | 13,493 | 14,525 | ||||||
Finished goods | 853 | 824 | ||||||
Total inventory (**) | $ | 51,280 | $ | 45,759 |
F - 28
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TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
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NOTE 5 - | INVESTMENT IN AFFILIATES |
On November 25, 2015, the Company signed an agreement with Russian-based Engineering Holding of Moscow (“Engineering”), to establish a new facility for the provision of services for heat transfer products. The new company,Company, TAT-Engineering LLC, is based in Novosibirsk’s Tolmachevo airport. TAT-Engineering, LLC shall provide services for heat transfer products. 51% of TAT-Engineering LLC's shares are held by TAT and the remaining 49% are held by Engineering. The accounting treatment of the joint venture is based on the equity method due to variable participating rights granted to Engineering. The new entity was established in January 2016.
2016.
December 31, | ||||||||
2021 | 2020 | |||||||
Balance sheets: | ||||||||
Current assets | $ | 358 | $ | 320 | ||||
Non-current assets | 1,091 | 1,211 | ||||||
Current liabilities | 1,154 | 1,088 |
December 31, | ||||||||
2023 | 2022 | |||||||
Balance sheets: | ||||||||
Current assets | $ | 2,048 | $ | 913 | ||||
Non-current assets | 922 | 1,168 | ||||||
Current liabilities | 1,395 | 1,426 |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Statements of operation: | ||||||||||||
Revenues | $ | 2,702 | $ | 1,277 | $ | 501 | ||||||
Gross profit (loss) | 1,739 | 605 | (22 | ) | ||||||||
Net income (loss) | 987 | 365 | (148 | ) | ||||||||
Net income (losses) attributable to the Company | 503 | 184 | (76 | ) |
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Statements of operation: | ||||||||||||
Revenues | $ | 501 | $ | 413 | $ | 877 | ||||||
Gross loss | (22 | ) | (153 | ) | (228 | ) | ||||||
Net loss | (148 | ) | (365 | ) | (291 | ) | ||||||
Net losses attributable to the Company | (76 | ) | (185 | ) | (132 | ) |
NOTE 6 - | PROPERTY, PLANT AND EQUIPMENT, NET |
Composition of assets, grouped by major classifications, is as follows:
December 31, | ||||||||
2023 | 2022 | |||||||
Cost: | ||||||||
Land and buildings | $ | 10,739 | $ | 10,739 | ||||
Leasehold improvements | 9,164 | 6,391 | ||||||
Machinery and equipment | 76,664 | 75,518 | ||||||
Motor vehicles | 273 | 302 | ||||||
Office furniture and equipment | 1,378 | 2,362 | ||||||
Internal use software | 3,768 | 2,610 | ||||||
101,986 | 97,922 | |||||||
Less: Accumulated depreciation | 59,432 | 54,499 | ||||||
Depreciated cost | $ | 42,554 | $ | 43,423 |
December 31, | ||||||||
2021 | 2020 | |||||||
Cost: | ||||||||
Land and buildings | $ | 18,031 | $ | 15,762 | ||||
Machinery and equipment | 63,875 | 57,245 | ||||||
Motor vehicles | 302 | 313 | ||||||
Office furniture and equipment | 1,906 | 1,895 | ||||||
Software | 2,123 | 2,048 | ||||||
86,237 | 77,263 | |||||||
| ||||||||
Less: Accumulated depreciation | 55,775 | 51,526 | ||||||
Depreciated cost | $ | 30,462 | $ | 25,737 |
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TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
NOTE 6 - | PROPERTY, PLANT AND EQUIPMENT, NET (CONT) |
$1.2 million In addition, in 2021 $1,200 recognized in cost of sales as an acceleration of amortization due to change in useful life of leasehold improvements assets.
F - 29
| LEASES |
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Lease commitments:
Limco-Piedmont leases some of its operating and office facilities for various terms under long-term, non-cancelable operating lease agreements. The leases expire at various dates through 20302029, certain leases contain renewal options as defined in the agreements.
Year ended December 31, 2021 | Year ended December 31, 2020 | |||||||
Operating lease expenses | 2,080 | 2,158 |
Year ended December 31, 2023 | Year ended December 31, 2022 | |||||||
Operating lease expenses | 1,173 | 1,316 |
F - 29
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
NOTE 7 - | LEASES (CONT) |
Year ended December 31, 2021 | Year ended December 31, 2020 | |||||||
Operating cash flows from operating leases | 2,226 | 2,158 | ||||||
Right-of-use assets obtained in exchange for lease obligations (non-cash) | 399 | 1,756 |
During 2021 the company established a new business unit which provided to the company’s customers leasing services of APU engines. The result of this business unit is reported as part of the company's activity in MRO services for aviation components.
F - 30
| |||||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||||
|
NOTE 7 -LEASES (CONT)
Supplemental balance sheet information related to operating leases is as follows:
December 31, 2023 | December 31, 2022 | |||||||
Operating Leases | ||||||||
Operating lease right-of-use assets | 2,746 | 2,477 | ||||||
Current operating lease liabilities | 1,033 | 904 | ||||||
Non-current operating lease liabilities | 1,697 | 1,535 | ||||||
Total operating lease liabilities | 2,730 | 2,439 | ||||||
Weighted Average Remaining Lease Term | ||||||||
Operating leases - Israel | 5 years | 2 years | ||||||
Operating leases – United States | 3 years | 4 years | ||||||
Weighted Average discount rate | ||||||||
Operating leases - Israel | 5 | % | 4.5 | % | ||||
Operating leases – United States | 4.84 | % | 4.84 | % |
December 31, 2021 | December 31, 2020 | |||||||
Operating Leases | ||||||||
Operating lease right-of-use assets | 3,114 | 6,767 | ||||||
| ||||||||
Current operating lease liabilities | 1,169 | 1,614 | ||||||
Non-current operating lease liabilities | 1,989 | 5,758 | ||||||
Total operating lease liabilities | 3,158 | 7,372 | ||||||
| ||||||||
Weighted Average Remaining Lease Term | ||||||||
Operating leases - Israel | 2 years | 4 years | ||||||
Operating leases – United States | 5 years | 5 years | ||||||
| ||||||||
Weighted Average discount rate | ||||||||
Operating leases - Israel | 4.5 | % | 4.5 | % | ||||
Operating leases – United States | 4.84 | % | 4.84 | % |
F - 30
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
NOTE 7 - | LEASES (CONT) |
Year | Amount | |||
2022 | $ | 1,221 | ||
2023 | 757 | |||
2024 | 643 | |||
2025 | 241 | |||
2026 | 241 | |||
2027 and after | 182 | |||
Total lease payments | 3,285 | |||
Less imputed interest | (127 | ) | ||
Total | $ | 3,158 |
F - 31
Year | Amount | |||
2024 | 1,056 | |||
2025 | 810 | |||
2026 | 385 | |||
2027 | 281 | |||
2028 and after | 472 | |||
Total lease payments | 3,004 | |||
Less imputed interest | (274 | ) | ||
Total | $ | 2,730 |
|
|
|
NOTE 8 -INTANGIBLE ASSETS
Intangible assets:
December 31, | ||||||||
2023 | 2022 | |||||||
Commercial license | ||||||||
Cost | $ | 2,509 | $ | 2,030 | ||||
Accumulated amortization | (686 | ) | (407 | ) | ||||
Amortized cost | $ | 1,823 | $ | 1,623 |
December 31, | ||||||||
2021 | 2020 | |||||||
Customer relationships | ||||||||
Cost | $ | 0- | $ | 671 | ||||
Impairment | 0- | (298 | ) | |||||
Accumulated amortization | 0- | (373 | ) | |||||
Amortized cost | $ | 0- | $ | 0- |
The COVID-19 pandemic and the significant reduction in the reconditioning and coating segment (“Turbochrome”) business during 2020 were a trigger event for impairment of the customer relationships asset. The Company believes there will be no future economic benefits that will be derived from the customers attributed to this intangible asset. Therefore, the Company wrote off the amortized cost related to the customer relationships. The write off expenses recorded in 2020 P&L under Other Expenses.
December 31, | ||||||||
2021 | 2020 | |||||||
Commercial license | ||||||||
Cost | $ | 2,030 | $ | 1,513 | ||||
Accumulated amortization | (201 | ) | (38 | ) | ||||
Amortized cost | $ | 1,829 | $ | 1,475 |
OnIn September 2020, Piedmont signed a 10 years10-year agreement for the commercial MRO services for aviation components. Under this contract Honeywell licensed Piedmont as an authorized MRO station of APU 331-20X.
Estimated amortization expenses for the five succeeding years is $160$279 thousands per year.
F - 32
31
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
|
|
|
NOTE 9 - | RESTRUCTURING COST |
In March 2021,2022, the Company announced acompleted the restructuring plan announced in 2021, pursuant to which, the Company will transfer the Company'stransferred its operations from its leased facility in Gedera to its facilityfacilities in Tulsa, Oklahoma and to its facility in Kiryat Gat.
During 2021 the company started executing the plan which will mature during 2022.
Restructuring Items | December 31, 2021 | |||
| ||||
Balance sheet | ||||
Provision for employee’s termination expenses | $ | 657 | ||
Investment in building and infrastructures | $ | 2,382 | ||
Investment in machineries (**) | $ | 3,478 | ||
Total | $ | 6,517 | ||
| ||||
Profit and loss | ||||
Restructuring expenses, net | ||||
Employee’s termination cost | $ | 686 | ||
Restructuring income from lease modification | $ | (1,315 | ) | |
Restructuring expenses from asset’s impairment | $ | 1,800 | ||
Other restructuring expenses | $ | 584 | ||
Cost of sales | ||||
Acceleration of assets depreciation expenses | $ | 1,200 | ||
Total | $ | 2,955 | ||
Restructuring Items | December 31, 2023 | December 31, 2022 | ||||||
Balance sheet | ||||||||
Other Provisions | $ | - | $ | 190 | ||||
Investment in building and infrastructures | - | 4,571 | ||||||
Investment in machinery (**) | - | 7,799 | ||||||
Total | $ | - | $ | 12,560 | ||||
Profit and loss | ||||||||
Restructuring expenses, net | ||||||||
Forfeited guarantee | ||||||||
Employee’s termination cost | - | 975 | ||||||
Restructuring income from lease modification | - | - | ||||||
Restructuring expenses from asset’s impairment | - | - | ||||||
Other restructuring expenses | - | 740 | ||||||
$ | - | $ | 1,715 | |||||
Cost of sales | ||||||||
Acceleration of assets depreciation expenses | - | - | ||||||
Total | $ | - | $ | 1,715 |
$0 and $1.7 million respectively.
F - 33
32
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
| LONG-TERM LOANS AND |
| |
|
During 2021,In March 2022, TAT received a loan from a commercial bank in the amount of $3.7 million. The loan bears annual interest rate of 6.65% (Prime Rate +0.9%) and paid in equal monthly installment as of April 2022 through March 2029. This new loan is in addition to four previous loans from commercial banksreceived during 2020 and 2021 in an aggregate amount of $3 million. These new loans are in addition to three previous loans received in 2020 in an aggregate amount of $3.3 million. An amount of $691 was classified to short-term loan as of December 31, 2021. These loans$6.3 million and are guaranteed by the Israeli government. The loans bear annual interest of 3.1%7.25% (Prime Rate+1.5%Rate +1.5%) which are paid in equal monthly instalmentsinstallments as of April 2021 through February 2031.Repayment of the principal2031. An amount of $1.2 million was classified to short-term loan as of December 31, 2023.The aforementioned loans were received in NIS.
amount of $7 million with a maturity date of February 2024 carry an interest of WSJP+0.1% .
The grant was recognized as a deduction from cost of revenues and the related operating expenses.
In March 20212022, another TAT subsidiary received a short-term credit line of $3$5 million from a commercial bank in the US. This new credit line is in addition to a previous credit line received in 2020 inbears an aggregate amount of $3 million with the same conditions. The loans bear an annual fixed interest rate of 3.6%2.9% and can be renewed byhas a maturity date of March 2024. In addition, in August 2022, the endsubsidiary received a long-term loan of $5 million from a commercial bank in the year for additional 12-month period.US. This loan bears an annual fixed interest rate of 4.2% and has a maturity date of December 2031. The carrying amounts ofloan is secured with a first-degree lien on the short-term credit line is approximate fair value because of its short maturities.US subsidiary's equipment. The loans havelong term loan has financial covenants such as a) tangible net worthDebt Service Coverage Ratio greater than 1.15, b) Debt to funded debt ratio of notEquity Ratio equal or less than 3 to 1, b) positive EBITDA, and c) minimum eligible accounts receivable1.
By June 2023 TAT secured another short-term line of $6credit from an Israeli bank for $4.5 million. The company satisfied such covenantscompany’s building and land in Kiryat Gat serve as collateral for this loan. As of December 31, 2021 and 2020.2023, the Company has not utilized this credit line.
F - 33
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
NOTE 10 - | LONG-TERM LOANS AND CREDIT LINES (CONT) |
Israel | Line of Credit | Gov guaranteed loans | Machinary finance loans | Commercial loans | ||||||||
Total balance amount | $4,710 | $2,612 | ||||||||||
Rate(*) | 7.25% | 6.65% | ||||||||||
Duration | 5-10 | 7 | ||||||||||
USA | ||||||||||||
Total balance amount | $12,138 | $702 | $7,066 | |||||||||
Rate | 2.9%-7.75% | 6.5% | 3.75%-4.2% | |||||||||
Duration (Years) | Revolving | 5 | 7-10 |
Year | Amount | |||
2024 | 2,200 | |||
2025 | 2,146 | |||
2026 | 2,164 | |||
2027 | 2,277 | |||
2028 and after | 6,299 | |||
$ | 15,086 |
Fair value | Carrying Amount | |||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Citi Bank Loan | $ | 4,486 | $ | 4,876 | $ | 4,412 | $ | 4,856 | ||||||||
Bank Leumi Loan | $ | 2,473 | $ | 2,834 | $ | 2,447 | $ | 2,834 |
F - 34
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
Year | Amount | |||
2022 | $ | 691 | ||
2023 | 877 | |||
2024 | 877 | |||
2025 | 738 | |||
2026 and after | 3,487 | |||
$ | 6,670 |
U.S. dollars in thousands
NOTE 11 - | GOVERNMENT GRANTS |
During
NOTE 12 - | ACCRUED EXPENSES AND OTHER |
December 31, | ||||||||
2023 | 2022 | |||||||
Employees and payroll accruals | $ | 5,179 | $ | 3,951 | ||||
Accrued expenses | 1,072 | 971 | ||||||
Authorities | 116 | 200 | ||||||
*Contract liabilities | 5,239 | 2,778 | ||||||
Warranty provision | 325 | 243 | ||||||
Accrued royalties | 1,736 | 1,448 | ||||||
Provision for restructuring plan | 63 | 190 | ||||||
Other | 222 | 95 | ||||||
13,952 | $ | 9,876 |
December 31, | ||||||||
2023 | 2022 | |||||||
Opening balance | 2,778 | 1,147 | ||||||
Revenue recognized | (2,080 | ) | (148 | ) | ||||
Additions | 4,541 | 1,779 | ||||||
Closing balance | 5,239 | 2,778 |
F - 34
35
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
|
|
|
NOTE 12 -ACCRUED EXPENSES
December 31, | ||||||||
2021 | 2020 | |||||||
| ||||||||
Employees and payroll accruals | $ | 3,463 | $ | 2,714 | ||||
Accrued expenses | 315 | 716 | ||||||
Authorities | 327 | 415 | ||||||
Advances from customers | 1,739 | 1,263 | ||||||
Warranty provision | 243 | 250 | ||||||
Accrued royalties and rebate sales commissions | 421 | 1,200 | ||||||
Other | 451 | 133 | ||||||
| ||||||||
$ | 6,959 | $ | 6,691 |
NOTE 13 - | RELATED PARTIES’ TRANSACTIONS AND BALANCES |
The amounts in the table below refer to TAT-Engineering joint venture and affiliates.
venture.
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
| ||||||||||||
Revenue - | ||||||||||||
Sales to related-party company (*) | $ | 88 | $ | 173 | $ | 596 | ||||||
Cost and expenses - | ||||||||||||
Supplies from related party (*) | $ | 654 | $ | 362 | $ | 552 |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Revenue - | ||||||||||||
Sales to related-party Company (*) | - | $ | 17 | $ | 88 | |||||||
Cost and expenses - | ||||||||||||
Supplies from related party (*) | - | - | $ | 654 |
December 31, | ||||||||
2021 | 2020 | |||||||
| ||||||||
Trade receivables and other receivables (*) | $ | 799 | $ | 740 | ||||
Trade payables and other payables (*) | $ | 95 | $ | 122 |
December 31, | ||||||||
2023 | 2022 | |||||||
Trade receivables and other receivables (*) | - | - | ||||||
Trade payables and other payables (*) | - | - |
F - 35
|
|
|
NOTE 14 - | LONG-TERM EMPLOYEE-RELATED OBLIGATIONS |
Severance pay:
F - 36
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
NOTE 14 - | LONG-TERM EMPLOYEE-RELATED OBLIGATIONS (CONT) |
F - 36
|
|
|
NOTE 14 -LONG-TERM EMPLOYEE-RELATED OBLIGATIONS (CONT)
TAT expects to pay $1,504$722 in future benefits to their employees during 20222024 through 20312033 upon their normal retirement age. The amount was determined based on the employee’s current salary rates and the number of service years that will be accumulated upon the retirement date. These amounts do not include amounts that might be paid to employees that will cease working for the Israeli companyCompany before their normal retirement age.
Year | Amount | |||
2024 | 80 | |||
2025 | - | |||
2026 | 99 | |||
2027 | 134 | |||
2028 | 59 | |||
Thereafter (through 2032) | 349 | |||
Total | $ | 721 |
Year | Amount | |||
2022 | $ | 215 | ||
2023 | 63 | |||
2024 | 49 | |||
2025 | 55 | |||
2026 | 77 | |||
Thereafter (through 2030) | 1,045 | |||
Total | $ | 1,504 |
F - 37
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
NOTE 15 - | COMMITMENTS AND CONTINGENCIES |
a. | Commissions arrangements: |
a.Commissions arrangements:
The Group is committed to pay marketing commissions ranging 1% to 10% to sale agents of total sales contracts. Commission expenses were $423, $528$361, $412 and $694$423 for the years ended December 31, 2021, 20202023, 2022 and 2019,2021, respectively. The commissions were recorded as part of the selling and marketing expenses.
b. | Royalty commitments: |
(1) | TAT is committed to pay royalties to third parties, ranging from 10% to 15% of sales of products developed by the third parties. Royalty expenses were $43, $47 and $95 for the years ended December 31, 2023, 2022 and 2021, respectively. The royalties were recorded as part of the cost of revenues. |
(2) | Piedmont is committed to pay royalties to a third party, ranging 5% to 13% of sales of products purchased from the third party. That third party is the exclusive manufacturer of the products for which Piedmont provides MRO services. |
(1)TAT is committed to pay royalties to third parties, ranging from 12% to 20% of sales of products developed by the third parties. Royalty expenses were $95, $174 and $42 for the years ended December 31, 2021, 2020 and 2019, respectively. The royalties were recorded as part of the cost of revenues.
(2)Piedmont is committed to pay royalties to a third party, ranging 5% to 13% of sales of products purchased from the third party. That third party is the exclusive manufacturer of the products for which Piedmont provides MRO services.
In addition, Piedmont is committed to pay another third party royaltiesthird-party royalty of 10%5% to 20%25%, on parts reclaimed to use in MRO services or sold to our customers when they are manufactured by the third party. Royalty expenses were $2,245, $1,648$3,255, $1,747 and $2,310$2,245 for the years ended December 31, 2021, 20202023, 2022 and 2019,2021, respectively. The royalties were recorded as part of the cost of revenues.
c. | Guarantees: |
(1) | In order to secure TAT's liability to the Israeli customs, the Company provided bank guarantees in amounts of 151 thousands NIS (approximately 42 thousands dollar). The guarantees are linked to the consumer price index and will expire from December 2023 through December 2024. |
d. | Litigation: |
(1) | On December 29, 2022, a customer filed a suit against Limco in the Northern District of Oklahoma. Limco filed a counter claim with complaints each against the other on the business relationship in the last five years. The parties reached a final settlement agreement on October 19, 2023, pursuant to which Limco paid $220 thousands to the customer. This fully resolved all matters at issue in the lawsuit. |
(2) | On July 12, 2022 TAT filed a suit against TAT Industries Ltd. In the District Court of Tel Aviv. TAT had leased the Gedera facility from TAT Industries Ltd. until the termination of the lease agreement in 2022. TAT asserts that TAT Industries Ltd. has unlawfully forfeited a bank guarantee that was granted for the benefit TAT Industries Ltd. in connection with the lease in Gedera in the amount of $750 thousands. On December 28, 2022, TAT Industries Ltd. filed a counterclaim against TAT asserting damages caused by TAT in connection with the lease in Gedera. TAT intends to vigorously defend the counterclaim by TAT Industries Ltd. which is in a preliminary stage, and TAT cannot estimate at this stage what impact, if any, the litigation may have on its results of operations, financial condition, or cash flows. |
c. Guarantees:
(1)In order to secure TAT's liability to the Israeli customs, the Company provided bank guarantees in amounts of $40, $64 and $32. The guarantees are linked to the consumer price index and is valid until January 2022, March 2022 and January 2023, respectively.
(2)To secure TAT's liability to the lessor of its premises, the Company provided a bank guarantee in the amount of $930. The guarantee is linked to American US dollar and it's valid until June 2022.
F - 37
38
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
|
|
|
NOTE 16 - | SHAREHOLDERS' EQUITY |
a. | TAT's Ordinary shares confer upon their holders' voting rights, the right to receive dividends, if declared, and any amounts payable upon the dissolution, liquidation or winding up of the affairs of TAT. |
TAT's Treasuretreasury shares have no rights.
FollowingOn December 21, 2023, TAT completed the approvalissuance and sale of TAT's Audit Committee1,158,600 Ordinary Shares of the Company in a private placement to Israeli institutional and Boardaccredited investors (as defined under Israel’s Securities Law, 5728-1968), for a purchase price of Directors,NIS 31.70 per share (which equaled $8.77 per share based on June 28, 2012,the exchange rate published by the Bank of Israel at such time),, resulting in net proceeds to the Company, after deducting offering expenses, of approximately NIS 36.2 million (or approximately $10.0 million*). The newly issued shares represent approximately 11.5% of the Company’s shareholdersissued and outstanding Ordinary Shares after the consummation of such sale. The private offering expenses totaled to $141 thousands.
b. | Stock option plans: |
F - 39
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
NOTE 16 - | SHAREHOLDERS' EQUITY (CONT) |
b. | Stock option plans (cont.): |
(1) | On March 30, 2021, pursuant to the 2012 Plan, TAT’s Board of Directors approved the grant of 25,000 Options, at an exercise price of $5.91 per share, to senior executive. |
(2) | On March 30, 2021, pursuant to the 2012 Plan, TAT’s Board of Directors approved the grant of 25,000 Options, at an exercise price of $5.91 per share, to senior executive. |
(3) | On March 30, 2021, pursuant to the 2012 Plan, TAT’s Board of Directors approved the grant of 25,000 Options, at an exercise price of $5.91 per share, to senior executive. |
(4) | On March 30, 2021, pursuant to the 2012 Plan, TAT’s Board of Directors approved the grant of 25,000 Options, at an exercise price of $5.91 per share, to senior executive. |
(5) | On July 25, 2021, pursuant to the 2012 Plan, TAT’s Board of Directors approved the grant of 20,000 Options, at an exercise price of $6.41 per share, to senior executive. |
(6) | On August 30, 2021, pursuant to the 2012 Plan, TAT’s Board of Directors approved the grant of 100,000 Options, at an exercise price of $7 per share, to senior executive. |
(7) | On March 22, 2022, pursuant to the 2012 Plan, TAT’s Board of Directors approved the grant of 50,000 Options, at an exercise price of $6.59 per share, to senior executive. |
(8) | On May 1, 2022, pursuant to the 2012 Plan, TAT’s Board of Directors approved the grant of 20,000 Options, at an exercise price of $6.42 per share, to senior executive. |
(9) | On May 22, 2022, pursuant to the 2012 Plan, TAT’s Board of Directors approved the grant of 50,000 Options, at an exercise price of $6.56 per share, to senior executive. |
(10) | On December 1, 2022, pursuant to the 2022 Plan, TAT’s Board of Directors approved the grant of 50,000 Options, at an exercise price of $6.42 per share, to senior executive. |
(11) | On January 9, 2023, pursuant to the 2022 Plan, TAT’s Board of Directors approved the grant of 50,000 Options, at an exercise price of $6.31 per share, to senior executive. |
(12) | On February 10, 2023, pursuant to the 2022 Plan, TAT’s Board of Directors approved the grant of 35,000 Options, at an exercise price of $6.31 per share, to senior executive. |
(13) | On March 29, 2023, pursuant to the 2022 Plan, TAT’s Board of Directors approved the grant of 35,000 Options, at an exercise price of $6.07 per share, to senior executive. | |
(14) | On May 30, 2023, pursuant to the 2022 Plan, TAT’s Board of Directors approved the grant of 30,000 Options, at an exercise price of $6.45 per share, to senior executive. | |
(15) | On August 28, 2023, pursuant to the 2022 Plan, TAT’s Board of Directors approved the grant of 40,000 Options, at an exercise price of $8.00 per share, to senior executive. |
F - 38
40
|
|
|
NOTE 16 -SHAREHOLDERS' EQUITY (CONT)
b.Stock option plans (cont.):
On August 30, 2018 the Company's compensation committee, followed by the Board of Directors, approved the amended and restated company's 2012 Plan. On October 4, 2018 the company's amended and restated 2012 stock plan was approved at the annual general meeting of shareholders.
As part of the company's 2012 Plan’s amendments it was determined that if the Company declares a cash dividend to its shareholders, and the distribution date of such dividend will precede the exercise date of an Option, including for the avoidance of doubt, Options that have yet to become vested and Options which have been granted prior to the adoption of such amendment to the plan, the exercise price of the Option shall be reduced in the amount equal to the cash dividend per share distributed by the Company. The result of the modification was an incremental cost of $74 in the financial statement for 2018.
During 2018 the option pool was increased by 300,000 to an aggregate option pool of 980,000(*) options following the approvals of the Company's Audit Committee, Board of Directors and shareholders of the company.
(1)On August 29, 2019, pursuant to the 2012 Plan, TAT’s Board of Directors approved the grant of 50,000 Options, at an exercise price of $5.65 per share, to senior executives.
(2)On September 22, 2019, pursuant to the 2012 Plan, TAT’s Board of Directors approved the grant of 50,000 Options, at an exercise price of $5.32 per share, to senior executive.
(3)On September 26, 2019, pursuant to the 2012 Plan, TAT’s Board of Directors approved the grant of 50,000 Options, at an exercise price of $5.26 per share, to senior executive.
(4)On October 15, 2020, pursuant to the 2012 Plan, TAT’s Board of Directors approved the grant of 50,000 Options, at an exercise price of $4.58 per share, to senior executive.
(5)On March 30, 2021, pursuant to the 2012 Plan, TAT’s Board of Directors approved the grant of 25,000 Options, at an exercise price of $5.91 per share, to senior executive.
(6)On March 30, 2021, pursuant to the 2012 Plan, TAT’s Board of Directors approved the grant of 25,000 Options, at an exercise price of $5.91 per share, to senior executive.
(7)On March 30, 2021, pursuant to the 2012 Plan, TAT’s Board of Directors approved the grant of 25,000 Options, at an exercise price of $5.91 per share, to senior executive.
(8)On March 30, 2021, pursuant to the 2012 Plan, TAT’s Board of Directors approved the grant of 25,000 Options, at an exercise price of $5.91 per share, to senior executive.
(9)On July 25, 2021, pursuant to the 2012 Plan, TAT’s Board of Directors approved the grant of 20,000 Options, at an exercise price of $6.41 per share, to senior executive.
(10)On August 30, 2021, pursuant to the 2012 Plan, TAT’s Board of Directors approved the grant of 100,000 Options, at an exercise price of $7 per share, to senior executive.
F - 39TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
| SHAREHOLDERS' EQUITY (CONT) |
b. | Stock option plans (cont.): | |
U.S. dollars in thousands
NOTE 16 -SHAREHOLDERS' EQUITY (CONT)
b.Stock option plans (cont.):
The fair value of the Company’s stock options granted under the 2012 and 2022 plan for the years ended December 31, 2021, 20202023, 2022 and 20192021 was estimated using the following assumptions:
2021 | 2020 | 2019 | ||||
| ||||||
Expected stock price volatility | 45.6% – 52% | 44.7% – 43.5% | 34.2% – 36.8% | |||
Expected option life (in years) | 3.5-5 | 3.5-5 | 3.5-5 | |||
Risk free interest rate | 0.1% – 0.64% | 0.12% – 0.25% | 1.44% – 1.63% | |||
Dividend yield | 0% | 0% | 0% |
2023 | 2022 | 2021 | |||||||
Expected stock price volatility | 48% – 54.8% | 48.4% – 54.48% | 45.6% – 52% | ||||||
Expected option life (in years) | 4.6 | 1-5 | 3.5-5 | ||||||
Risk free interest rate | 3.71% – 4.54% | 0.63% – 4.04% | 0.1% – 0.64% | ||||||
Dividend yield | 0% | 0% | 0% |
F - 40
|
|
|
NOTE 16 -SHAREHOLDERS' EQUITY (CONT)
b.Stock option plans (cont.):
The following table is a summary of the activity of TAT's Stock Option plan:
Year ended December 31, | Year ended December 31, | Year ended December 31, | ||||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||||||
Number of options | Weighted average exercise price | Number of options | Weighted average exercise price | Number of options | Weighted average exercise price | |||||||||||||||||||
| ||||||||||||||||||||||||
Outstanding at the beginning of the year | 621,460 | $ | 7.26 | 571,460 | $ | 7.53 | 528,268 | $ | 9.03 | |||||||||||||||
Granted | 220,000 | 6.45 | 50,000 | 4.58 | 170,000 | 5.44 | ||||||||||||||||||
Forfeited | (121,460 | ) | 8.9 | 0- | 0- | (126,808 | ) | 11.19 | ||||||||||||||||
Exercised | 0- | 0- | 0- | 0- | 0- | 0- | ||||||||||||||||||
| ||||||||||||||||||||||||
Outstanding at the end of the year | 720,000 | 6.8 | 621,460 | 7.26 | 571,460 | 7.53 | ||||||||||||||||||
| ||||||||||||||||||||||||
Exercisable at the end of the year | 379,375 | $ | 7.44 | 381,629 | $ | 7.91 | 264,389 | $ | 7.74 |
Year ended December 31, | Year ended December 31, | Year ended December 31, | ||||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||||||
Number of options | Weighted average exercise price | Number of options | Weighted average exercise price | Number of options | Weighted average exercise price | |||||||||||||||||||
Outstanding at the beginning of the year | 675,000 | $ | 7.17 | 720,000 | $ | 6.8 | 621,460 | $ | 7.26 | |||||||||||||||
Granted | 190,000 | 6.63 | 170,000 | 6.56 | 220,000 | 6.45 | ||||||||||||||||||
Forfeited | (196,614 | ) | 6.52 | (178,150 | ) | 5.63 | (121,460 | ) | 8.9 | |||||||||||||||
Exercised | *(43,386 | ) | 5.68 | (36,850 | ) | 5.25 | - | - | ||||||||||||||||
Outstanding at the end of the year | 625,000 | 7.31 | 675,000 | 7.17 | 720,000 | 6.8 | ||||||||||||||||||
Exercisable at the end of the year | 373,438 | 7.91 | 412,813 | $ | 7.54 | 379,375 | $ | 7.44 |
F - 41
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
| EARNINGS PER SHARE (“EPS”) |
| |
|
Basic and diluted earnings per share are based on the weighted average number of ordinary shares outstanding.outstanding, net of treasury shares. Diluted EPS is based on those shares used in basic EPS plus shares that would have been outstanding assuming issuance of ordinary shares for all dilutive potential ordinary shares outstanding.
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Numerator for EPS: | ||||||||||||
Net income (loss) | $ | (3,562 | ) | $ | (5,329 | ) | $ | 806 | ||||
Denominator for EPS: | ||||||||||||
Weighted average shares outstanding – basic | 8,874,696 | 8,874,696 | 8,874,696 | |||||||||
Dilutive shares | 0- | 0- | 0- | |||||||||
Weighted average shares outstanding – diluted | 8,874,696 | 8,874,696 | 8,874,696 | |||||||||
EPS: | ||||||||||||
Basic and diluted | $ | (0.4 | ) | $ | (0.6 | ) | $ | 0.1 |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Numerator for EPS: | ||||||||||||
Net Income (loss) from continuing operations | $ | 4,672 | $ | (1,562 | ) | $ | (3,562 | ) | ||||
Denominator for EPS: | ||||||||||||
Weighted average shares outstanding – basic | 8,961,689 | 8,911,546 | 8,874,696 | |||||||||
Dilutive shares | 122,333 | - | - | |||||||||
Weighted average shares outstanding – diluted | 9,084,022 | 8,911,546 | 8,874,696 | |||||||||
EPS: | ||||||||||||
Basic and diluted | $ | 0.52 | $ | (0.175 | ) | $ | (0.4 | ) | ||||
Diluted | $ | 0.51 | $ | (0.175 | ) | $ | (0.4 | ) |
NOTE 18F - 42DISCONTINUED OPERATION
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
NOTE 18 - | DISCONTINUED OPERATION |
2021 | 2020 | |||||||||
Assets: | ||||||||||
Account receivables | $ | 0- | $ | 0- | ||||||
Inventory | 0- | 0- | ||||||||
Fixed assets, net | 0- | 0- | ||||||||
Costumers’ relationship | 0- | 0- | ||||||||
Total Assets | $ | 0- | $ | 0- | ||||||
Liability: | ||||||||||
Account payables | $ | 0- | $ | 179 | ||||||
| ||||||||||
Total Liabilities | $ | 0- | $ | 179 |
F - 42
2021 | ||||
Revenue: | ||||
Services | $ | 440 | ||
Cost of revenue: | ||||
Services | 429 | |||
Gross profit (loss) | 11 | |||
Operating expenses: | ||||
Research and development, net | 16 | |||
Selling and marketing | 29 | |||
General and administrative | 68 | |||
113 | ||||
Operating income (loss) | (102 | ) | ||
Financial expenses (income) | - | |||
Income (loss) on disposal of discontinued operation (1) | 529 | |||
Net Income (loss) | $ | 427 |
|
|
|
NOTE 18 -DISCONTINUED OPERATION (CONT)
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
| ||||||||||||
Revenue: | ||||||||||||
Services | $ | 440 | $ | 955 | $ | 4,553 | ||||||
| ||||||||||||
Cost of revenue: | ||||||||||||
Services | 429 | 1,062 | 4,291 | |||||||||
| ||||||||||||
Gross profit (loss) | 11 | (107 | ) | 262 | ||||||||
| ||||||||||||
Operating expenses: | ||||||||||||
Research and development, net | 16 | 42 | (39 | ) | ||||||||
Selling and marketing | 29 | 90 | 330 | |||||||||
General and administrative | 68 | 191 | 598 | |||||||||
| ||||||||||||
113 | 323 | 889 | ||||||||||
| ||||||||||||
Operating income (loss) | (102 | ) | (430 | ) | (627 | ) | ||||||
| ||||||||||||
Financial expenses (income) | 0- | 0- | 28 | |||||||||
Income (loss) on disposal of discontinued operation (1) | 529 | (1,415 | ) | 0- | ||||||||
| ||||||||||||
Net Income (loss) | $ | 427 | $ | (1,845 | ) | $ | (655 | ) |
| (1) | During 2020, the Company wrote off |
F - 43
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
| TAXES ON INCOME |
a. | Tax benefits under the Law for the Encouragement of Capital Investments, 1959 ("the Law"): | |
U.S. dollars in thousands
NOTE 19 -TAXES ON INCOME
a.Tax benefits under the Law for the Encouragement of Capital Investments, 1959 ("the Law"):
Until December 31, 2010, TAT and Turbochrome has elected to participate in the alternative package of tax benefits for its approved and benefited enterprise under the law.
Amendment
F - 44
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
| TAXES ON INCOME (CONT) |
a. | Tax benefits under the Law for the Encouragement of Capital Investments, 1959 ("the Law") (cont.): | |
U.S. dollars in thousands
NOTE 19 -TAXES ON INCOME (CONT)
a.Tax benefits under the Law for the Encouragement of Capital Investments, 1959 ("the Law") (cont.):
Under a recent amendment, announced in August 2013, beginning in 2014, dividends paid out of income attributed to a Preferred Enterprise will be subject to a withholding tax rate of 20% (instead of 15%). In addition, tax rates under the Preferred Enterprise were also raised effective as of January 1, 2014 to 9% in Zone A and 16%.
b. | Corporate tax rate in Israel |
The taxable income of TAT, not subject to benefits as detailed above, is taxed at the standard Israeli corporate tax rate, which was 23% for all years included in these financial statements.
sold.
c. | U.S. subsidiaries |
U.S. subsidiaries are taxed based on federal and state tax laws. The Federal statutory tax rate for 2021, 20202023, 2022 and 20192021 was 21% plus 3%-6% for state taxes.
F - 45
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
| TAXES ON INCOME (CONT) |
d. | Tax assessments | |
U.S. dollars in thousands
NOTE 19 -TAXES ON INCOME (CONT)
d.Tax assessments
TAT’s income tax assessments are considered final through 2016.
Turbochrome income tax assessments are considered final through 2016.
Limco-Piedmont income tax assessments are considered final through 2017.
Turbochrome income tax assessments are considered final through 2017. |
Limco-Piedmont income tax assessments are considered final through 2018. |
e. | Income tax reconciliation: |
A reconciliation of the theoretical tax expense assuming all income is taxed at the statutory rate to taxes on income (tax benefit) as reported in the statements of income:
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Income (loss) before taxes on income (tax benefit) from continued operationas reported in the statements of income | $ | (4,575 | ) | $ | (4,816 | ) | $ | 2,182 | ||||
| ||||||||||||
Statutory tax rate in Israel | 23 | % | 23 | % | 23 | % | ||||||
| ||||||||||||
Theoretical taxes on income (tax benefit) | $ | (1,052 | ) | $ | (1,108 | ) | $ | 501 | ||||
| ||||||||||||
Increase (decrease) in taxes on income resulting from: | ||||||||||||
Tax adjustment for foreign subsidiaries subject to a different tax rate | 75 | 50 | (26 | ) | ||||||||
Reduced tax rate on income derived from "Preferred Enterprises" plans | 149 | 580 | 204 | |||||||||
Earnings from foreign subsidiaries (1) | 0- | (2,338 | ) | 91 | ||||||||
Valuation allowance for exchange rates differences on deferred taxes not recorded on capital losses | 0- | 0- | (125 | ) | ||||||||
Deferred tax assets from discontinued operation profit (loss) | 98 | (138 | ) | (49 | ) | |||||||
Reduced deferred tax asset from expecting utilization of carryforward losses | 0- | 1,984 | 0- | |||||||||
Tax in respect of prior years | 24 | (345 | ) | 0- | ||||||||
Temporary differences for which no deferred taxes were recorded | 0- | (377 | ) | (55 | ) | |||||||
Permanent differences | 71 | 24 | 55 | |||||||||
Other adjustments | (27 | ) | 151 | (7 | ) | |||||||
Taxes on income (tax benefit) as reported in the statements of income | $ | (662 | ) | $ | (1,517 | ) | $ | 589 |
(1)The Company record an accrual that related to a deferred tax liability due to the possibility of future distribution of earnings from foreign subsidiaries of the Company.
During 2020 and 2021, the Company received loans from commercial banks in the US and Israel in total amount of $6 million. As part of the loan terms, the company cannot distribute dividends to its shareholders during the next five years. Therefore, the company wrote off the differed tax liability in 2020.
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Income (loss) before taxes on income (tax benefit) from continued operations reported in the statements of income | $ | 4,745 | $ | (1,648 | ) | $ | (4,575 | ) | ||||
Statutory tax rate in Israel | 23 | % | 23 | % | 23 | % | ||||||
Theoretical taxes on income (tax benefit) | 1,091 | $ | (379 | ) | $ | (1,052 | ) | |||||
Increase (decrease) in taxes on income resulting from: | ||||||||||||
Tax adjustment for foreign subsidiaries subject to a different tax rate | (36 | ) | (13 | ) | 75 | |||||||
Reduced tax rate on income derived from "Preferred Enterprises" plans | (484 | ) | (48 | ) | 149 | |||||||
Deferred tax assets from discontinued operation profit (loss) | - | 98 | ||||||||||
Reduced deferred tax asset from expecting utilization of carryforward losses | 183 | - | - | |||||||||
Tax in respect of prior years | 59 | 24 | ||||||||||
Temporary differences for which no deferred taxes were recorded | - | 238 | - | |||||||||
Permanent differences | - | 77 | 71 | |||||||||
Other adjustments | (178 | ) | 164 | (27 | ) | |||||||
Taxes on income (tax benefit) as reported in the statements of income | $ | 576 | $ | 98 | $ | (662 | ) |
F - 46
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
NOTE 19 - | TAXES ON INCOME (CONT) |
f. | Income (loss) before taxes on income (tax benefit) is comprised as follows: |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Domestic (Israel) | $ | 4,639 | $ | (1,201 | ) | $ | (5,139 | ) | ||||
Foreign (United States) | 106 | (447 | ) | 564 | ||||||||
$ | 4,745 | $ | (1,648 | ) | $ | (4,575 | ) |
Taxes on income (tax benefit) included in the statements of income: | ||
| ||
|
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Current: | ||||||||||||
Domestic (Israel) | $ | - | $ | - | $ | - | ||||||
Foreign (United States) | 49 | - | - | |||||||||
49 | - | - | ||||||||||
Deferred: | ||||||||||||
Domestic (Israel) | 358 | 268 | (579 | ) | ||||||||
Foreign (United States) | 169 | (111 | ) | (107 | ) | |||||||
576 | 157 | (686 | ) | |||||||||
Previous years: | ||||||||||||
Domestic (Israel) | - | - | - | |||||||||
Foreign (United States) | - | (59 | ) | 24 | ||||||||
$ | 576 | $ | 98 | $ | (662 | ) |
NOTE 19 -TAXES ON INCOME (CONT)
f.Income (loss) before taxes on income (tax benefit) is comprised as follows:
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
| ||||||||||||
Domestic (Israel) | $ | (5,139 | ) | $ | (4,499 | ) | $ | (1,931 | ) | |||
Foreign (United States) | 564 | (317 | ) | 4,113 | ||||||||
| ||||||||||||
| $ | (4,575 | ) | $ | (4,816 | ) | $ | 2,182 |
g.Taxes on income (tax benefit) included in the statements of income:
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Current: | ||||||||||||
Domestic (Israel) | $ | 0- | $ | 0- | $ | 0- | ||||||
Foreign (United States) | 0- | 0- | 181 | |||||||||
| ||||||||||||
0- | 0- | 181 | ||||||||||
Deferred: | ||||||||||||
Domestic (Israel) | (579 | ) | (683 | ) | (397 | ) | ||||||
Foreign (United States) | (107 | ) | (489 | ) | 805 | |||||||
| ||||||||||||
(686 | ) | (1,172 | ) | 408 | ||||||||
Previous years: | ||||||||||||
Domestic (Israel) | 0- | (134 | ) | |||||||||
Foreign (United States) | 24 | (211 | ) | 0- | ||||||||
| ||||||||||||
- | (345 | ) | 0- | |||||||||
| ||||||||||||
$ | (662 | ) | $ | (1,517 | ) | $ | 589 |
F - 47
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
| TAXES ON INCOME (CONT) |
h. | Deferred income taxes: | |
U.S. dollars in thousands
NOTE 19 -TAXES ON INCOME (CONT)
h.Deferred income taxes:
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of TAT's deferred tax liabilities and assets are as follows:
December 31, | ||||||||
2021 | 2020 | |||||||
Deferred tax assets: | ||||||||
Provision for current expected credit losses | $ | 95 | $ | 41 | ||||
Provisions for employee benefits | 495 | 272 | ||||||
Inventory | 1,212 | 987 | ||||||
Capital tax losses carryforward | 3,500 | 3,500 | ||||||
Net operating losses carryforward | 3,084 | 3,017 | ||||||
Other | 326 | 224 | ||||||
Deferred tax assets, before valuation allowance | $ | 8,712 | $ | 8,041 | ||||
Valuation allowance | (5,484 | ) | (5,484 | ) | ||||
Deferred tax assets, net | $ | 3,228 | $ | 2,557 | ||||
| ||||||||
Deferred tax liabilities: | ||||||||
Property, plant and equipment | (1,542 | ) | (1,647 | ) | ||||
Intangible assets | (434 | ) | (318 | ) | ||||
Other temporary differences deferred tax liabilities | 0- | (26 | ) | |||||
Deferred tax liabilities | $ | (1,976 | ) | $ | (1,991 | ) | ||
| ||||||||
Net | $ | 1,252 | $ | 566 |
December 31, | ||||||||
2023 | 2022 | |||||||
Deferred tax assets: | ||||||||
Provisions for employee benefits | $ | 657 | $ | 378 | ||||
Inventory | 1,337 | 1,288 | ||||||
Capital tax losses carryforward | 956 | 2,475 | ||||||
Net operating losses carryforward | 2,368 | 4,040 | ||||||
R&D expenses | 121 | 144 | ||||||
Other | 417 | 331 | ||||||
Deferred tax assets, before valuation allowance | $ | 5,856 | $ | 8,656 | ||||
Valuation allowance | (3,214 | ) | (5,202 | ) | ||||
Deferred tax assets, net | 2,642 | $ | 3,454 | |||||
Deferred tax liabilities: | ||||||||
Property, plant and equipment | (1,348 | ) | (1,884 | ) | ||||
Intangible assets | (300 | ) | (341 | ) | ||||
Other temporary differences deferred tax liabilities | - | |||||||
Deferred tax liabilities | $ | (1,648 | ) | $ | (2,225 | ) | ||
Net | 994 | $ | 1,229 |
F - 48
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
| TAXES ON INCOME (CONT) |
h. | Deferred income taxes (cont.): | |
U.S. dollars in thousands
NOTE 19 -TAXES ON INCOME (CONT)
h.Deferred income taxes (cont.):
The following table summarizes the changes in the valuation allowance for deferred tax assets:
Balance, December 31, 2020 | $ | 5,484 | ||
Deductions during the year | - | |||
Balance, December 31,2021 | $ | 5,484 | ||
Deductions during the year | (282 | ) | ||
Balance, December 31,2022 | $ | 5,202 | ||
Deductions during the year | (1,988 | ) | ||
Balance, December 31,2023 | 3,214 |
Balance, December 31, 2018 | $ | 3,375 | ||
Additions during the year | 125 | |||
Balance, December 31,2019 | $ | 3,500 | ||
Additions during the year | 1,984 | |||
Balance, December 31,2020 | $ | 5,484 | ||
Additions during the year | 0- | |||
Balance, December 31,2021 | $ | 5,484 |
Valuation allowances are
Are mainly related to (i) U.S. subsidiary for which valuation allowance was provided in respect of deferred tax assets resulting from carryforward of State tax losses in the amount of $ 1,519. That amount is expected to expire gradually starting from 2024 and (ii) Capital losses attributed to the Company in the amount of $ 1,502. (iii) corporate956. (ii) Corporate income tax losses carryforward incurred in TAT Gedera in amount of $2,434.$2,258.
F - 49
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
| SEGMENT INFORMATION |
a. | Segment Activities Disclosure: | |
U.S. dollars in thousands
NOTE 20 -SEGMENT INFORMATION
a.Segment Activities Disclosure:
TAT operates under four segments: (i) Original equipment manufacturing (“OEM”) of heat transfer solutions and aviation accessories mainly through our Gedera facility and our Limco subsidiary; (ii) MRO services for heat transfer components and OEM of heat transfer solutions through its Limco subsidiary; (iii) MRO services for aviation components (mainly APU and LG) through its Piedmont subsidiary; and (iv) Overhaul and coating of jet engine components through its Turbochrome subsidiary.
- | 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 of 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. |
- | 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. |
- | MRO services for aviation components include the MRO of APUs, landing gears and other aircraft components, as well as APU lease activity. 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. The discontinued operation in 2021 regarding to the JT8D activity is part of the coating jet engines component segment. |
-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.
-MRO services for aviation components include the MRO of APUs, landing gears and other aircraft components, as well as APU lease activity. 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. The discontinued operation regarding to the JT8D activity is part of the coating jet engines component segment thus the numbers for this segment were reclassified due to discontinued operation for the year 2019.
The Group’s chief operating decision-maker (CEO of the Company) evaluates performance, makes operating decisions and allocates resources based on financial data, consistent with the presentation in the accompanying financial statements. CODM reviews revenue, gross profit, operating income and the following assets: cash and cash equivalents, accounts receivable and inventory.
total assets.
F - 50
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
NOTE 20 - | SEGMENT INFORMATION (CONT) |
b. | Segments statement operations disclosure: |
|
|
|
NOTE 20 -SEGMENT INFORMATION (CONT)
b.Segments statement operations disclosure:
The following financial information is the information that CODM uses for analyzing the segment results. The figures are presented in consolidated method as presented to CODM.
The following financial information is a summary of the operating income of each operational segment:
Year ended December 31, 2021 | ||||||||||||||||||||||||
OEM of Heat Transfer Solutions and Aviation Accessories | MRO Services for heat transfer components and OEM of heat transfer solutions | MRO services for Aviation Components and Lease | Overhaul and coating of jet engine components | Elimination of inter-company sales | Consolidated | |||||||||||||||||||
Revenues | ||||||||||||||||||||||||
Sale of products and services | $ | 22,238 | $ | 18,669 | $ | 33,232 | $ | 3,834 | $ | 0- | $ | 77,973 | ||||||||||||
Intersegment revenues | 3,739 | 177 | 0- | 0- | (3,916 | ) | 0- | |||||||||||||||||
Total revenues | 25,977 | 18,846 | 33,232 | 3,834 | (3,916 | ) | 77,973 | |||||||||||||||||
| ||||||||||||||||||||||||
Cost of revenues | 24,044 | 16,922 | 26,444 | 2,978 | (3,685 | ) | 66,703 | |||||||||||||||||
Gross profit | 1,933 | 1,924 | 6,788 | 856 | (231 | ) | 11,270 | |||||||||||||||||
| ||||||||||||||||||||||||
Research and development | 122 | 80 | 202 | 160 | (47 | ) | 517 | |||||||||||||||||
Selling and marketing | 2,040 | 1,015 | 1,961 | 220 | (89 | ) | 5,147 | |||||||||||||||||
General and administrative | 3,128 | 1,855 | 3,004 | 558 | (191 | ) | 8,354 | |||||||||||||||||
Other expenses (income) | (913 | ) | 0- | (432 | ) | (19 | ) | 896 | (468 | ) | ||||||||||||||
Restructuring expenses, net | 1,338 | 386 | 0- | 31 | 0- | 1,755 | ||||||||||||||||||
| ||||||||||||||||||||||||
Operating income (loss) | $ | (3,782 | ) | $ | (1,412 | ) | $ | 2,053 | $ | (94 | ) | $ | (800 | ) | $ | (4,035 | ) | |||||||
Financial expenses, net | 540 | |||||||||||||||||||||||
Loss before tax benefits | (4,575 | ) |
Year ended December 31, 2023 | ||||||||||||||||||||||||
OEM of Heat Transfer Solutions and Aviation Accessories | MRO Services for heat transfer components and OEM of heat transfer solutions | MRO services for Aviation Components and Lease | Overhaul and coating of jet engine components | Elimination of inter-Company sales | Consolidated | |||||||||||||||||||
Revenues external | $ | 27,555 | $ | 28,625 | $ | 50,760 | $ | 6,854 | $ | 113,794 | ||||||||||||||
Revenues internal | 4,370 | (4,370 | ) | - | ||||||||||||||||||||
Cost of revenues | 20,193 | 30,176 | 41,788 | 4,110 | (4,941 | ) | 91,326 | |||||||||||||||||
Gross profit | 7,362 | 2,819 | 8,972 | 2,744 | 571 | 22,468 | ||||||||||||||||||
Research and development | 159 | 177 | 268 | 111 | 715 | |||||||||||||||||||
Selling and marketing | 1,618 | 1,539 | 2,040 | 326 | 5,523 | |||||||||||||||||||
General and administrative | 2,772 | 3,436 | 3,555 | 825 | 10,588 | |||||||||||||||||||
Other expenses (income) | 9 | (3 | ) | (439 | ) | (423 | ) | 423 | (433 | ) | ||||||||||||||
Operating income (loss) | $ | 2,804 | $ | (2,330 | ) | $ | 3,548 | $ | 1,905 | $ | 148 | $ | 6,075 | |||||||||||
Financial expenses, net | (1,330 | ) | ||||||||||||||||||||||
Loss before tax benefits | 4,745 |
F - 51
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
| SEGMENT INFORMATION (CONT) |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 20 -SEGMENT INFORMATION (CONT)
b.Segments statement operations disclosure (cont.)
Year ended December 31, 2020 | ||||||||||||||||||||||||
OEM of Heat Transfer Solutions and Aviation Accessories | MRO Services for heat transfer components and OEM of heat transfer solutions | MRO services for Aviation Components and lease | Overhaul and coating of jet engine components | Elimination of inter-company sales | Consolidated | |||||||||||||||||||
Revenues | ||||||||||||||||||||||||
Sale of products and services | $ | 20,179 | $ | 20,445 | $ | 31,189 | $ | 3,546 | $ | 0- | $ | 75,359 | ||||||||||||
Intersegment revenues | 2,946 | 195 | 0- | 0- | (3,141 | ) | 0- | |||||||||||||||||
Total revenues | 23,125 | 20,640 | 31,189 | 3,546 | (3,141 | ) | 75,359 | |||||||||||||||||
| ||||||||||||||||||||||||
Cost of revenues | 21,703 | 17,885 | 26,961 | 3,312 | (2,937 | ) | 66,924 | |||||||||||||||||
Gross profit (loss) | 1,422 | 2,755 | 4,228 | 234 | (204 | ) | 8,435 | |||||||||||||||||
| ||||||||||||||||||||||||
Research and development | (3 | ) | (2 | ) | 7 | 183 | 0- | 185 | ||||||||||||||||
Selling and marketing | 1,429 | 1,152 | 1,527 | 261 | 0- | 4,369 | ||||||||||||||||||
General and administrative | 2,183 | 2,054 | 2,732 | 643 | 0- | 7,612 | ||||||||||||||||||
Other expenses (income) | 0- | 21 | 0- | 294 | 0- | 315 | ||||||||||||||||||
Operating income (loss) | $ | (2,187 | ) | $ | (470 | ) | $ | (38 | ) | $ | (1,147 | ) | $ | (204 | ) | $ | (4,046 | ) | ||||||
Financial expenses, net | 770 | |||||||||||||||||||||||
Loss before taxes on income | (4,816 | ) |
Year ended December 31, 2022 | ||||||||||||||||||||||||
OEM of Heat Transfer Solutions and Aviation Accessories | MRO Services for heat transfer components and OEM of heat transfer solutions | MRO services for Aviation Components and Lease | Overhaul and coating of jet engine components | Elimination of inter-Company sales | Consolidated | |||||||||||||||||||
Revenues external | $ | 21,844 | $ | 21,063 | $ | 35,879 | $ | 5,770 | - | $ | 84,556 | |||||||||||||
Revenues internal | - | 3,733 | - | - | (3,733 | ) | - | |||||||||||||||||
Cost of revenues | 18,778 | 20,750 | 28,890 | 3,495 | (3,285 | ) | 68,628 | |||||||||||||||||
Gross profit | 3,066 | 4,046 | 6,989 | 2,275 | (448 | ) | 15,928 | |||||||||||||||||
Research and development | 193 | 54 | 286 | 19 | (74 | ) | 479 | |||||||||||||||||
Selling and marketing | 1,936 | 926 | 2,383 | 330 | 54 | 5,629 | ||||||||||||||||||
General and administrative | 3,226 | 2,462 | 3,686 | 594 | 2 | 9,970 | ||||||||||||||||||
Other expenses (income) | (1,566 | ) | (52 | ) | (18 | ) | - | 1,547 | (90 | ) | ||||||||||||||
Restructuring expenses, net | 975 | 618 | - | 122 | - | 1,715 | ||||||||||||||||||
Operating income (loss) | $ | (1,698 | ) | $ | 38 | $ | 652 | $ | 1,210 | $ | (1,977 | ) | $ | (1,775 | ) | |||||||||
Financial expenses, net | 127 | |||||||||||||||||||||||
Loss before tax benefits | (1,648 | ) |
F - 52
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
| SEGMENT INFORMATION (CONT) |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 20 -SEGMENT INFORMATION (CONT)
b.Segments statement operations disclosure (cont.)
Year ended December 31, 2019 | ||||||||||||||||||||||||
OEM of Heat Transfer Solutions and Aviation Accessories | MRO Services for heat transfer components and OEM of heat transfer solutions | MRO services for Aviation Components and lease | Overhaul and coating of jet engine components | Elimination of inter-company sales | Consolidated | |||||||||||||||||||
Revenues | ||||||||||||||||||||||||
Sale of products and services | $ | 20,552 | $ | 34,183 | $ | 38,687 | $ | 4,057 | $ | 0- | $ | 97,479 | ||||||||||||
Intersegment revenues | 6,037 | 250 | 0- | 0- | (6,287 | ) | 0- | |||||||||||||||||
Total revenues | 26,589 | 34,433 | 38,687 | 4,057 | (6,287 | ) | 97,479 | |||||||||||||||||
| ||||||||||||||||||||||||
Cost of revenues | 23,998 | 27,852 | 33,337 | 3,460 | (6,468 | ) | 82,179 | |||||||||||||||||
Gross profit | 2,591 | 6,581 | 5,350 | 597 | 181 | 15,300 | ||||||||||||||||||
| ||||||||||||||||||||||||
Research and development | 58 | 83 | 7 | (35 | ) | 0- | 113 | |||||||||||||||||
Selling and marketing | 1,530 | 1,638 | 1,334 | 427 | 0- | 4,929 | ||||||||||||||||||
General and administrative | 1,978 | 2,734 | 2,408 | 534 | 0- | 7,654 | ||||||||||||||||||
Operating income (loss) | $ | (975 | ) | $ | 2,126 | $ | 1,601 | $ | (329 | ) | $ | 181 | $ | 2,604 | ||||||||||
| ||||||||||||||||||||||||
Financial expenses, net | 422 | |||||||||||||||||||||||
Income before taxes on income | 2,182 |
Year ended December 31, 2021 | ||||||||||||||||||||||||
OEM of Heat Transfer Solutions and Aviation Accessories | MRO Services for heat transfer components and OEM of heat transfer solutions | MRO services for Aviation Components and lease | Overhaul and coating of jet engine components | Elimination of inter-Company sales | Consolidated | |||||||||||||||||||
Revenues external | $ | 25,977 | $ | 14,930 | $ | 33,232 | $ | 3,834 | - | $ | 77,973 | |||||||||||||
Revenues internal | - | 3,916 | - | - | (3,916 | ) | - | |||||||||||||||||
Cost of revenues | 24,044 | 16,922 | 26,444 | 2,978 | (3,685 | ) | 66,703 | |||||||||||||||||
Gross profit (loss) | 1,933 | 1,924 | 6,788 | 856 | (231 | ) | 11,270 | |||||||||||||||||
Research and development | 122 | 80 | 202 | 160 | (47 | ) | 517 | |||||||||||||||||
Selling and marketing | 2,040 | 1,015 | 1,961 | 220 | (89 | ) | 5,147 | |||||||||||||||||
General and administrative | 3,128 | 1,855 | 3,004 | 558 | (191 | ) | 8,354 | |||||||||||||||||
Other expenses (income) | (913 | ) | - | (432 | ) | (19 | ) | 896 | (468 | ) | ||||||||||||||
Restructuring expenses, net | 1,338 | 386 | - | 31 | - | 1,755 | ||||||||||||||||||
Operating income (loss) | $ | (3,782 | ) | $ | (1,412 | ) | $ | 2,053 | $ | (94 | ) | $ | (800 | ) | $ | (4,035 | ) | |||||||
Financial expenses, net | 540 | |||||||||||||||||||||||
Profit (loss) before taxes on income | (4,575 | ) |
F - 53
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
| SEGMENT INFORMATION (CONT) |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 20 -SEGMENT INFORMATION (CONT)
c.The following financial information identifies the assets, depreciation and amortization, and capital expenditures to segments:
Year ended December 31, 2021 | ||||||||||||||||||||||||||||
OEM of Heat Transfer Solutions and Aviation Accessories | MRO Services for heat transfer components and OEM of heat transfer solutions | MRO services for Aviation Components and Lease | Discontinued operation | Overhaul and coating of jet engine components | Amounts not allocated to segments | Consolidated | ||||||||||||||||||||||
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Total assets | 27,271 | 27,267 | 45,112 | 0- | 7,128 | 4,055 | 110,833 | |||||||||||||||||||||
Depreciation and amortization | 2,174 | 740 | 1,683 | 0- | 284 | 0- | 4,881 | |||||||||||||||||||||
Asset’s impairment | 1,800 | - | - | 0- | - | - | 1,800 | |||||||||||||||||||||
Expenditure for segment assets | 271 | 4,831 | 5,624 | - | 1,604 | 0- | 12,330 |
Year ended December 31, 2023 | ||||||||||||||||||||||||
OEM of Heat Transfer Solutions and Aviation Accessories | MRO Services for heat transfer components and OEM of heat transfer solutions | MRO services for Aviation Components and Lease | Overhaul and coating of jet engine components | Amounts not allocated to segments | Consolidated | |||||||||||||||||||
Total assets | 39,131 | 42,491 | 58,023 | 9,400 | (3,468 | ) | 145,577 | |||||||||||||||||
Depreciation and amortization | 557 | 878 | 3,078 | 268 | (71 | ) | 4,710 | |||||||||||||||||
Expenditure for segment assets | 3,519 | 1,352 | 252 | 458 | 4,390 |
Year ended December 31, 2022 | ||||||||||||||||||||||||
OEM of Heat Transfer Solutions and Aviation Accessories | MRO Services for heat transfer components and OEM of heat transfer solutions | MRO services for Aviation Components and Lease | Overhaul and coating of jet engine components | Amounts not allocated to segments | Consolidated | |||||||||||||||||||
Total assets | 24,251 | 39,193 | 55,616 | 8,846 | (1,255 | ) | 126,651 | |||||||||||||||||
Depreciation and amortization | 690 | 432 | 2,325 | 259 | - | 3,706 | ||||||||||||||||||
Expenditure for segment assets | 1,012 | 9,345 | 5,411 | 2,107 | - | 17,875 |
Year ended December 31, 2020 | ||||||||||||||||||||||||||||
OEM of Heat Transfer Solutions and Aviation Accessories | MRO Services for heat transfer components and OEM of heat transfer solutions | MRO services for Aviation Components and Lease | Discontinued operation | Overhaul and coating of jet engine components | Amounts not allocated to segments | Consolidated | ||||||||||||||||||||||
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Total assets | 32,536 | 21,525 | 41,433 | 0- | 6,073 | 14,554 | 116,121 | |||||||||||||||||||||
Depreciation and amortization | 1,400 | 1,020 | 799 | 0- | 846 | 0- | 4,065 | |||||||||||||||||||||
Expenditure for segment assets | 765 | 556 | 9,410 | 0- | 309 | 0- | 11,040 |
F - 54
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
|
|
|
NOTE 21 - | ENTITY-WIDE DISCLOSURE |
a. | Total revenues - by geographical location were attributed according to customer residential country as follows: |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Total revenues | Total revenues | Total revenues | ||||||||||
Sale of products | ||||||||||||
Israel | $ | 3,527 | $ | 3,249 | $ | 5,532 | ||||||
United States | 23,937 | 15,616 | 13,716 | |||||||||
Other | 7,777 | 6,595 | 6,622 | |||||||||
$ | 35,241 | $ | 25,460 | $ | 25,870 |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Total revenues | Total revenues | Total revenues | ||||||||||
Sale of Services | ||||||||||||
Israel | $ | 4,170 | $ | 3,913 | $ | 2,213 | ||||||
United States | 58,062 | 40,954 | 34,231 | |||||||||
Other | 16,321 | 14,229 | 15,659 | |||||||||
$ | 78,553 | $ | 59,096 | $ | 52,103 |
b. | Total long-lived assets - by geographical location were as follows: |
December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Israel | $ | 11,569 | $ | 10,231 | $ | 8,427 | ||||||
United States | 35,002 | 41,270 | 26,978 | |||||||||
Total | $ | 46,571 | $ | 51,501 | $ | 35,405 |
c. | Major Customers |
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Total revenues | Total revenues | Total revenues | ||||||||||
| ||||||||||||
Sale of products | ||||||||||||
Israel | $ | 5,532 | $ | 3,355 | $ | 3,464 | ||||||
United States | 13,716 | 12,284 | 14,181 | |||||||||
Other | 6,622 | 7,100 | 7,374 | |||||||||
$ | 25,870 | $ | 22,739 | $ | 25,019 |
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Total revenues | Total revenues | Total revenues | ||||||||||
| ||||||||||||
Sale of Services | ||||||||||||
Israel | $ | 2,213 | $ | 3,543 | $ | 3,624 | ||||||
United States | 34,231 | 34,765 | 43,196 | |||||||||
Other | 15,659 | 14,312 | 25,640 | |||||||||
$ | 52,103 | $ | 52,620 | $ | 72,460 |
services for Aviation Components and leaseb.(which his annual sales in 20Total long-lived assets - by geographical location were as follows:23
December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
| ||||||||||||
Israel | $ | 8,427 | $ | 15,071 | $ | 16,692 | ||||||
United States | 26,978 | 18,908 | 11,354 | |||||||||
Total | $ | 35,405 | $ | 33,979 | $ | 28,046 |
constitute c.12.6Major Customers
% from the total group sales. The Company has a single customer which his annual sales in 2022 constitute 8.4% from the total group sales. The company has a single costumercustomer which his annual sales in 2021 constituteconstitutes 12.8% from the total group sales.
F - 55
TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
|
|
|
NOTE 22 -SUPPLEMENTAL CONSOLIDATED BALANCE SHEETS INFORMATION
NOTE 22 - | SUPPLEMENTAL CONSOLIDATED BALANCE SHEETS INFORMATION |
Warranty provision | Provision for current expected credit losses | |||||||
| ||||||||
Balance, as of December 31, 2018 | $ | 285 | $ | 276 | ||||
Additions | 115 | 84 | ||||||
Deductions | (165 | ) | (46 | ) | ||||
| ||||||||
Balance, as of December 31, 2019 | $ | 235 | $ | 314 | ||||
Additions | 80 | 194 | ||||||
Deductions | (65 | ) | (202 | ) | ||||
| ||||||||
Balance, as of December 31, 2020 | $ | 250 | $ | 306 | ||||
Additions | 80 | 269 | ||||||
Deductions | (87 | ) | (186 | ) | ||||
| ||||||||
Balance, as of December 31, 2021 | $ | 243 | $ | 389 |
NOTE 23 -SUBSEQUENT EVENTS
Following the Company's announcement in 2021 regarding to the intention to transfer Company's activity from our leased facility in Gedera to a facility in Tulsa, Oklahoma and to a facility in Kiryat Gat as part of the company restructuring plan, in December 2021 the TAT and the landlord agreed on the settlement conditions which signed on January 10, 2022. TAT will vacate the property on March 31, 2022 and pay the rent fees until this termination date without any exit penalty or additional evacuation cost, see note 7.
Warranty provision | Provision for current expected credit losses | |||||||
Balance, as of December 31, 2020 | $ | 250 | $ | 306 | ||||
Additions | 80 | 269 | ||||||
Deductions | (87 | ) | (186 | ) | ||||
Balance, as of December 31, 2021 | $ | 243 | $ | 389 | ||||
Additions | - | 200 | ||||||
Deductions | - | (62 | ) | |||||
Balance, as of December 31, 2022 | $ | 243 | $ | 527 | ||||
Additions | 79 | 90 | ||||||
Deductions | (272 | ) | ||||||
Balance as of December 31. 2023 | 322 | 345 |
F - 56