Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2016shares | |
Document And Entity Information [Abstract] | |
Entity Registrant Name | TAT TECHNOLOGIES LTD |
Entity Central Index Key | 808,439 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Non-accelerated Filer |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2016 |
Amendment Flag | false |
Document Fiscal Year Focus | 2,016 |
Document Fiscal Period Focus | FY |
Entity Common Stock, Shares Outstanding | 8,828,444 |
Entity Well-known Seasoned Issuer | No |
Entity Current Reporting Status | Yes |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | |
CURRENT ASSETS: | |||
Cash and cash equivalents | $ 21,433 | $ 18,688 | |
Short-term bank deposits | 964 | 8,122 | |
Accounts receivable, net | 21,572 | 19,151 | |
Other current assets and prepaid expenses | 1,687 | 3,025 | |
Inventory, net | [1] | 39,269 | 36,664 |
Total current assets | 84,925 | 85,650 | |
NON-CURRENT ASSETS: | |||
Investment in affiliates | 1,019 | 169 | |
Funds in respect of employee rights upon retirement | 2,660 | 2,626 | |
Deferred income taxes | 896 | 890 | |
Intangible assets, net | 1,179 | 1,314 | |
Property, plant and equipment, net | 21,298 | 18,934 | |
Total non-current assets | 27,052 | 23,933 | |
Total assets | 111,977 | 109,583 | |
CURRENT LIABILITIES: | |||
Accounts payable | 8,406 | 7,022 | |
Accrued expenses | 9,836 | 7,815 | |
Total current liabilities | 18,242 | 14,837 | |
NON CURRENT LIABILITIES: | |||
Other long-term liabilities | 151 | 189 | |
Liability in respect of employee rights upon retirement | 2,994 | 2,871 | |
Deferred income taxes | 1,938 | 262 | |
Total non-current liabilities | 5,083 | 3,322 | |
COMMITMENTS AND CONTINGENT LIABILITIES (NOTE 11) | |||
Total liabilities | 23,325 | 18,159 | |
EQUITY: | |||
Ordinary shares of NIS 0.9 par value : Authorized: 10,000,000 shares at December 31, 2016 and 2015; Issued: 9,102,917 shares at December 31, 2016 and 9,082,817 shares at December 31, 2015; Outstanding: 8,828,444 shares at December 31, 2016 and 8,808,344 shares at December 31, 2015 | 2,797 | 2,793 | |
Additional paid-in capital | 64,760 | 64,529 | |
Treasury shares, at cost, 274,473 shares at December 31, 2016 and 2015 | (2,088) | (2,088) | |
Accumulated other comprehensive loss | (73) | (4) | |
Retained earnings | 23,256 | 26,194 | |
Total shareholders' equity | 88,652 | 91,424 | |
Total liabilities and shareholders' equity | $ 111,977 | $ 109,583 | |
[1] | The total amount of Rotables included in the company inventory for the years ended December 31, 2016 and 2015 were $8,345 and $7,964, respectively. |
CONSOLIDATED BALANCE SHEETS (PA
CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - ₪ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Ordinary shares, par value per share | ₪ 0.9 | ₪ 0.9 |
Ordinary shares, shares authorized | 10,000,000 | 10,000,000 |
Ordinary shares, shares issued | 9,102,917 | 9,082,817 |
Ordinary shares, shares outstanding | 8,828,444 | 8,808,344 |
Treasury shares, shares | 274,473 | 274,473 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue: | |||
Products | $ 30,431 | $ 31,339 | $ 31,363 |
Services | 65,363 | 54,268 | 49,363 |
Total revenues | 95,794 | 85,607 | 80,726 |
Cost of revenue: | |||
Products | 23,788 | 24,466 | 23,616 |
Services | 52,969 | 47,476 | 40,906 |
Total cost of revenues | 76,757 | 71,942 | 64,522 |
Gross profit | 19,037 | 13,665 | 16,204 |
Operating expenses: | |||
Research and development, net | 1,140 | 890 | 1,070 |
Selling and marketing | 3,876 | 2,903 | 3,203 |
General and administrative | 10,023 | 8,469 | 8,123 |
Other expenses (income) | (138) | 631 | (11) |
Gain on bargain purchase | (4,833) | ||
Total operating expenses | 14,901 | 8,060 | 12,385 |
Operating income | 4,136 | 5,605 | 3,819 |
Financial expenses | (1,139) | (1,262) | (2,510) |
Financial income | 985 | 913 | 1,216 |
Income before taxes on income | 3,982 | 5,256 | 2,525 |
Taxes on income | 3,865 | 644 | 1,360 |
Income before equity investment | 117 | 4,612 | 1,165 |
Share in results of equity investment of affiliated companies | (55) | 1,237 | 267 |
Net income | $ 62 | $ 5,849 | $ 1,432 |
Net income per share basic and diluted | $ 0.01 | $ 0.66 | $ 0.16 |
Weighted average number of shares outstanding: | |||
Basic | 8,828,444 | 8,808,344 | 8,805,495 |
Diluted | 8,830,764 | 8,810,689 | 8,826,542 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 62 | $ 5,849 | $ 1,432 |
Other comprehensive income, net | |||
Currency translation adjustments | 429 | ||
Net unrealized gain (losses) from derivatives | 174 | (5) | |
Reclassification adjustments for gains from derivatives included in net income | (243) | 1 | |
Total other comprehensive income (loss) | (69) | (4) | 429 |
Total comprehensive income (loss) | $ (7) | $ 5,845 | $ 1,861 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY - USD ($) $ in Thousands | Share capital [Member] | Additional paid-in capital [Member] | Accumulated other comprehensive income (loss) [Member] | Treasury shares [Member] | Retained earnings [Member] | Non-controlling interest [Member] | Total |
Balance at Dec. 31, 2013 | $ 2,792 | $ 64,454 | $ (429) | $ (2,088) | $ 20,913 | $ 1,961 | $ 87,603 |
Balance, shares at Dec. 31, 2013 | 9,079,709 | ||||||
Comprehensive income (loss) | 429 | 1,432 | 1,861 | ||||
Share based compensation | 38 | 38 | |||||
Exercise of options | $ 1 | (1) | |||||
Exercise of options, shares | 3,108 | 85,000 | |||||
Dividend distributed | (2,000) | $ (2,000) | |||||
Sale of subsidiary | (1,961) | (1,961) | |||||
Balance at Dec. 31, 2014 | $ 2,793 | 64,491 | (2,088) | 20,345 | 85,541 | ||
Balance, shares at Dec. 31, 2014 | 9,082,817 | ||||||
Comprehensive income (loss) | (4) | 5,849 | 5,845 | ||||
Share based compensation | 38 | 38 | |||||
Balance at Dec. 31, 2015 | $ 2,793 | 64,529 | (4) | (2,088) | 26,194 | 91,424 | |
Balance, shares at Dec. 31, 2015 | 9,082,817 | ||||||
Comprehensive income (loss) | (69) | 62 | (7) | ||||
Share based compensation | 105 | 105 | |||||
Exercise of options | $ 4 | 126 | $ 130 | ||||
Exercise of options, shares | 20,100 | 20,100 | |||||
Dividend distributed | (3,000) | $ (3,000) | |||||
Balance at Dec. 31, 2016 | $ 2,797 | $ 64,760 | $ (73) | $ (2,088) | $ 23,256 | $ 88,652 | |
Balance, shares at Dec. 31, 2016 | 9,102,917 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $ 62 | $ 5,849 | $ 1,432 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 3,636 | 2,781 | 2,069 |
Exchange differentials of loans | (1) | ||
Loss on sale of property, plant and equipment | 12 | 10 | |
Loss (gain) from change in fair value of derivatives | (152) | 10 | |
Interest from short-term bank deposits and restricted deposits | (24) | (33) | (128) |
Change in provision for doubtful accounts | (29) | 206 | |
Share in results and sale of equity investment of affiliated companies | 55 | (1,237) | (267) |
Share based compensation | 105 | 38 | 38 |
Gain on bargain purchase | (4,833) | ||
Liability in respect of employee rights upon retirement | 123 | 28 | (485) |
Deferred income taxes, net | 1,670 | (21) | 1,229 |
Changes in operating assets and liabilities: | |||
Amounts due to related parties, net | 5 | ||
Decrease (increase) in trade accounts receivable | (2,392) | (2,375) | 2,730 |
Decrease (increase) in other current assets and prepaid expenses | 1,487 | (85) | (833) |
Increase in inventory | (2,707) | (571) | (6,009) |
Increase (decrease) in trade accounts payable | 1,192 | 436 | (509) |
Increase (decrease) in accrued expenses | 2,521 | 525 | (715) |
Increase (decrease) in other long-term liabilities | (38) | 15 | (24) |
Net cash provided by (used in) operating activities | 5,521 | 733 | (1,458) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Proceeds from sale of subsidiary (A) | 2,176 | ||
Acquisitions of subsidiary, net of cash acquired in the amount of $1,164 (see note 3a) | (1,796) | ||
Proceeds from sale of equity investment of affiliated company | 3,624 | ||
Investment in affiliated company | (905) | ||
Funds in respect of employee rights upon retirement | 2 | 8 | 352 |
Proceeds from sale of property and equipment | 17 | 9 | 19 |
Purchase of property and equipment | (5,702) | (3,315) | (3,021) |
Investment in short-term deposit | (8,109) | ||
Maturities of short-term deposits | 7,182 | 5,109 | 5,098 |
Net cash provided by (used in) investing activities | 594 | (4,470) | 4,624 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Repayments of long-term loans | (883) | ||
Dividend paid | (3,000) | (2,000) | |
Repayments of short-term loans | (469) | (26) | |
Payment of contingent consideration | (500) | ||
Exercise of options | 130 | ||
Net cash used in financing activities | (3,370) | (469) | (2,909) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 2,745 | (4,206) | 257 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 18,688 | 22,894 | 22,637 |
CASH AND CASH EQUIVALENTS AT END OF YEAR | 21,433 | 18,688 | 22,894 |
SUPPLEMENTARY INFORMATION ON INVESTING ACTIVITIES NOT INVOLVING CASH FLOW: | |||
Purchase of property, plant and equipment on credit | 268 | 76 | 44 |
Supplemental disclosure of cash flow information: | |||
Interest paid | (2) | (4) | (15) |
Income taxes paid | $ (1,473) | $ (1,321) | $ (571) |
CONSOLIDATED STATEMENTS OF CAS8
CONSOLIDATED STATEMENTS OF CASH FLOWS (PARENTHETICAL) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
(A) Proceeds from sale of subsidiary | |||
Assets held for sale (excluding cash in the amount of $2,823) | $ 7,136 | ||
Liabilities held for sale | (3,428) | ||
Non-controlling interest | (1,532) | ||
Proceeds from sale of subsidiary | 2,176 | ||
Assets held for sale, cash amount | $ 2,823 |
GENERAL
GENERAL | 12 Months Ended |
Dec. 31, 2016 | |
GENERAL [Abstract] | |
GENERAL | NOTE 1 - GENERAL a. TAT Technologies Ltd., (“TAT” or the “Company”) an Israeli corporation, incorporated in 1985, is a leading provider of solutions and services to the aerospace and defense industries, focused mainly on the following four segments original equipment through our Gedera facility services for components and OEM of heat transfer solutions through our Limco subsidiary; services for components through our Piedmont subsidiary; and (iv) overhaul and coating of engine components through our Turbochrome subsidiary b. TAT has the following wholly-owned subsidiaries: Limco-Piedmont Inc. (“Limco-Piedmont”), Turbochrome Ltd. (“Turbochrome”) and TAT Gal Inc. (“TAT Gal”). Additionally the Company holds 51% of TAT-Engineering LLC (“TAT-Engineering”), hereinafter collectively referred to as the “Group”. c. On November 25, 2015, we 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, 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 participant rights granted to Engineering. The new entity was established in January 2016 and is currently in the process of ramping up its operations. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES a. Basis of Presentation The Group's financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"). b. Use of estimates in the preparation of financial statement 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 doubtful accounts, purchase price allocation on acquisition, income taxes, impairment of long-lived assets, revenue recognition generated from long-term contracts and contingent consideration. c. Functional currency The majority of the Group revenue are generated in U.S. dollars ("dollars") and a substantial portion of the Group costs are incurred in dollars. In addition, a significant portion of the TAT and Turbochrome financing has been obtained 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. Transactions and balances originally denominated in dollars are presented at their original amounts. Balances in currencies other than the U.S. dollar are translated into dollars using historical and current exchange rates for non-monetary and monetary balances, respectively. For non-dollar transactions and other items in the statements of income (indicated below), the following exchange rates are used: (i) for transactions – exchange rates at transaction dates or average rates; and (ii) for other items (derived from non-monetary balance sheet items such as depreciation and amortization, etc.) – historical exchange rates. Currency transaction gains and losses are carried to financial income or expenses, as appropriate. d. Principles of consolidation The consolidated financial statements include the accounts of TAT and its subsidiaries. Intercompany balances and transactions, including profits from intercompany sales not yet realized outside the Group, have been eliminated upon consolidation. e. Cash and Cash equivalents All highly liquid investments, which include short-term bank deposits and money market accounts, that are not restricted as to withdrawal or use, and short-term debentures, the period to maturity of which do not exceed three months at the time of investment, are considered to be cash equivalents. f. Short-term bank deposits g. 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 doubtful accounts. Accounts outstanding longer than their original contractual payment terms are considered past due. The Group determines its allowance by considering a number of factors, including the length of time accounts receivable are past due, the Group’s previous loss history from such customers, the customer’s current ability to pay its obligation to TAT and the condition of the general economy and the industry as a whole. The Group writes-off accounts receivable when they become uncollectible. Payments subsequently received on such receivables are credited against earnings. The provision for doubtful accounts is determined with respect to specific debts that are doubtful of collection. h. Inventory Inventory is measured at the lower of cost or market value. Inventories include raw materials, parts, work in progress and finished products. Cost of raw material and parts is determined using the “moving average” basis. Cost of work in progress and finished products is calculating based on actual costs. Capitalized production costs components, mainly labor and overhead, is determine on average basis over the production period. If actual market prices are less favorable than those projected by management, inventory write-downs may be required. Once written-down, a new lower cost basis for that inventory is established. Since the Group sells products and services related to airplane accessories for airplanes that can be in service for 20 to 50 years, it must keep a supply of such products and parts on hand while the airplanes are in use. The Group writes down its inventory for estimated obsolescence and unmarketable inventory equal to the difference between the cost of inventory and estimated market value based upon assumptions for future demand and market conditions. i. 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 7 - 39 Machinery and equipment 3 - 17 Motor vehicles 6 - 7 Office furniture and equipment 3 - 17 Software 3-5 Leasehold improvements are included in buildings and amortized using the straight line method over the period of the lease contract, or the estimated useful life of the asset, whichever is shorter. j. Grants from National Authority for Technological Innovation (“NATI”): Grants received from the NATI for approved research and development projects are recognized at the time the Company is entitled to such grants, on the basis of the costs incurred and included as a deduction from research and development expenses. Due the fact that the Company is defined as a "Traditional Industry Company", under the NATI regulations, these grants are non-royalty bearing. k. Investment in companies accounted for using the Equity Method Investment in which the Group exercises significant influence and which is not considered a subsidiary ("affiliate") is accounted for using the equity method, whereby the Group recognizes its proportionate share of the affiliated company's net income or loss after the date of investment. The Group reviews those investments for impairment whenever events indicate the carrying amount may not be recoverable. See notes 1(c) and 3(b). l. Identified intangible assets Identifiable intangible assets are comprised of definite lived intangible assets - customer relationships, which are amortized 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 marketing and selling expenses. m. Impairment of long-lived assets Long-lived assets, including 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 6 and 7). n. Treasury Shares Company shares held by the Company are presented as a reduction of equity at their cost to the Company. 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. Revenues from the sale of products are recognized when persuasive evidence of an arrangement exists, delivery of the product has occurred, provided the collection of the resulting receivable is reasonably assured, the price is fixed or determinable and no significant obligation exists. The Group does not grant a right of return. Revenues from multi-year, fixed price contracts for OEM customers are recognized when a product is shipped (and title passed) to the customer. Management provides for losses as soon as a loss is expected for the remaining portion of such contracts. For the years ended December 31, 2016, 2015 and 2014, no losses have been recognized for such fixed price contracts. Revenues from MRO services are generally recognized when services are completed and the item is shipped back to the customer. In cases in which contracts require exchanging a defective landing gear for a restored gear, the non-refundable minimum amounts from these contracts are recognized on the exchange date (delivery of the product has occurred), and any additional amounts billed to the customer for excess hours of repair, are recognized when the customer approve the price for these additional services Revenues from maintenance contracts are recognized over the contract period in proportion to the costs expected to be incurred in performing services under the contract. The Group estimates the costs that are expected to be incurred based on its historical experience. The costs incurred related to the maintenance contracts are not incurred on a straight-line basis, as the timing to provide the maintenance services is dependent on when parts under these contracts require maintenance. Therefore, the Group accrues revenue as costs are incurred. These contracts are reviewed on a timely basis and adjusted (if required) based on total expected cost. p. Shipping and handling costs Shipping and handling costs billed to customers are included in revenue. The cost of shipping and handling products is included in costs of revenues. 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. The Group estimates the costs that may be incurred under its warranty and records a liability in the amount of such costs at the time revenue is recognized. The Group periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. r. Research and development Research and development costs, net of grants, are charged to expenses as incurred. s. Fair value measurement The Group measures fair value and discloses fair value measurements for financial and non-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. The accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data or active market data for similar but not identical assets or liabilities. 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. In determining fair value, the Group utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers credit risk in its assessment of fair value. t. 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. Cash and cash equivalents are deposited with major banks in Israel and the United States. Such deposits in the United States may be in excess of insured limits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Group's cash and cash equivalents are financially sound. Accordingly, minimal credit risk exists with respect to these financial instruments. The Group's accounts receivable are derived mainly from sales to customers in the United States, Israel and Europe. The Group generally does not require collateral; however, in certain circumstances the Group may require letters of credit. Management believes that credit risks relating to accounts receivable are minimal since the majority of the Group's customers are world-leading manufacturers of aviation systems and aircrafts, international airlines, governments and air-forces, and world-leading manufacturers and integrators of defense and ground systems. In addition, the Group has relatively a large number of customers with wide geographic spread which mitigates the credit risk. The Group performs ongoing credit evaluation of its customers' financial condition. u. 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 necessary, to reduce deferred tax assets to their estimated realizable value, see note 14(h). Taxes which would apply in the event of disposal of investments in foreign subsidiaries have not been taken into account in computing the deferred taxes, when the Group’s intention is to hold, and not to realize the investments. 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 14(a)), since it intends to permanently reinvest them and has no intention to declare dividends out of such tax exempt income in the foreseeable future. Management considers such retained earnings to be essentially permanent in duration. The payment of dividend in 2016 and 2014 was paid from foreign subsidiaries earnings of the Company and earnings from regular income of the Israeli company, respectively. Results for tax purposes for TAT’s Israeli subsidiaries are measured and reflected in NIS and for TAT’s U.S. subsidiaries are measured and reflected in U.S. dollars. As explained in (c) above, the consolidated financial statements are measured and presented in U.S. dollars. In accordance with ASC 740, TAT has not provided deferred income taxes on the differences resulting from changes in exchange rate and indexation. The Group follows a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate resolution. The Group’s policy is to include interest and penalties related to unrecognized tax benefits within financial income (expense). Such liabilities are classified as long-term, unless the liability is expected to be resolved within twelve months from the balance sheet date. v. Earnings per share Basic earnings per share are computed by dividing net income by the weighted average number of shares of the Company's Ordinary Shares, par value NIS 0.9 per share outstanding for each period. Diluted earnings per share are calculated by dividing the net income by the fully-diluted weighted-average number of ordinary shares outstanding during each period. Potentially dilutive shares include outstanding options granted to employees and directors. w. 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 Group estimates forfeitures based on historical experience and anticipated future conditions. 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. For an award with performance conditions that has a graded vesting schedule, compensation cost is recognized upon meeting such conditions, using the accelerated method over the requisite service period for the entire award. x. Comprehensive income Comprehensive income in 2016 and 2015 includes, in addition to net income or loss, gains and losses of derivatives (net of related taxes where applicable). In 2014, comprehensive income includes, currency translation adjustments that were related to the subsidiary that was sold in 2014. Reclassification adjustments for gain or loss of derivatives are included in the relevant line item in the statement of income. See also note 2 (aa). y. Business Combinations When the Company acquires a business, the purchase price is allocated based on the fair value of tangible assets and identifiable intangible assets acquired, and liabilities assumed. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Goodwill as of the acquisition date is measured as the residual of the excess of the consideration transferred, plus the fair value of any non-controlling interest in the acquire at the acquisition date, over the fair value of the identifiable net assets acquired. If the fair value of the net assets acquired exceeds the purchase price, the resulting bargain purchase is recognized as a gain in the consolidated statement of operations. The Company generally engages independent, third-party appraisal firms to assist in determining the fair value of assets acquired and liabilities assumed. Such a valuation requires management to make significant estimates, especially with respect to intangible assets. These estimates are based on historical experience and information obtained from the management of the acquired companies. These estimates are inherently uncertain. For all acquisitions, operating results are included in the consolidated statement of operations from the date of acquisition. z. 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. 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. Management applies the guidance in ASC 450-20-25 when assessing losses resulting from contingencies. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability is recorded as accrued expenses in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material are disclosed. aa. 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. The Company recognizes derivative instruments as either assets or liabilities and measures those instruments at fair value. For derivative instruments that are designated and qualify as a cash-flow hedge, the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same line item associated with the anticipated transaction in the same period or periods during which the hedged transaction affects earnings. The ineffective portion of a derivative designated as a cash flow hedge is recognized in "financial expense (income), net". 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". bb. Recently Issued Accounting Principles: (1) In November 2016, the Financial Accounting Standards Board (“FASB”) issued guidance on the treatment of restricted cash in the statements of cash flows. Amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The guidance will be effective for the fiscal year beginning on January 1, 2018, including interim periods within that year (early adoption is permitted). The Company does not anticipate a material impact on its consolidated financial statements. (2) In October 2016, the FASB issued guidance on income taxes on intra-entity transfers. The guidance eliminates the exception to the recognition requirements under the standard for intra-entity transfers of an asset other than inventory. As a result, an entity should recognize the income tax consequences when the transfer of assets other than inventory occurs. The guidance will be effective for the fiscal year beginning on January 1, 2018, including interim periods within that year (early adoption is permitted). The Company is currently evaluating the potential effect of the guidance on its consolidated financial statements. (3) In August 2016, the FASB issued guidance on statements of cash flows. The guidance addresses eight specific issues: debt prepayment or debt extinguishment costs; settlement of certain debt instruments; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies; distributions received from equity method investees; beneficial interest in securitization transactions; separately identifiable cash flows and application of predominance principle. The guidance will be effective for the fiscal year beginning on January 1, 2018, including interim periods within that year (early adoption is permitted). The Company is currently evaluating the potential effect of the guidance on its consolidated financial statements. (4) In June 2016, the FASB issued guidance on financial instruments. The guidance replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance will be effective for the fiscal year beginning on January 1, 2020, including interim periods within that year. The Company is currently evaluating the potential effect of the guidance on its consolidated financial statements. (5) In February 2016, the FASB issued ASU 2016-02 – Leases (ASC 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less may be accounted for similar to existing guidance for operating leases today. ASC 842 supersedes the previous leases standard, ASC 840 Leases. The standard is effective on January 1, 2019, with early adoption permitted. The Company is in the process of evaluating the impact of this new guidance on its financial statements. (6) In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718). ASU No. 2016-09 identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. The amendments are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted but all of the guidance must be adopted in the same period. The Company is in the process of evaluating the impact of this new guidance on its financial statements. (7) In July 2015, the FASB issued guidance on current accounting for inventory measurement. The new guidance requires entities to measure inventory at the lower of cost or net realizable value. Net realizable value is defined by the guidance as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The guidance is effective for the interim and annual periods beginning on or after December 15, 2016 (early adoption is permitted). The Company is currently evaluating the impact of the new guidance on its consolidated financial statements. The Company does not anticipate a material impact on its consolidated financial statements. (8) In May 2014, FASB issued Accounting Standards Update No. 2014-09 (ASU 2014-09) "Revenue from Contracts with Customers." ASU 2014-09 will supersede most current revenue recognition guidance, including industry-specific guidance. The underlying principle is that an entity will recognize revenue upon the transfer of goods or services to customers in an amount that the entity expects to be entitled to in exchange for those goods or services. The guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. 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. The guidance also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. The guidance is effective for the interim and annual periods beginning on or after December 15, 2017 (early adoption is permitted in annual periods beginning after December 15, 2016). The guidance permits the use of either a retrospective or cumulative effect transition method. The Company is currently evaluating the impact of the amended guidance on its consolidated financial statements. |
BUSINESS COMBINATION AND INVEST
BUSINESS COMBINATION AND INVESTMENT IN AN AFFILIATED COMPANY | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATION AND INVESTMENT IN AN AFFILIATED COMPANY | NOTE 3 - BUSINESS COMBINATION AND INVESTMENT IN AN AFFILIATED COMPANY a. Turbochrome 1. In August, 2015 the company entered into a definitive agreement to acquire Turbochrome Ltd. On October 19, 2015, the company completed the share acquisition for approximately $3,500 (subject to certain price adjustments). The acquisition was funded through cash on hand. TAT shall pay additional amounts of up to $2,000 in the event that Turbochrome Ltd. meets certain annual revenue targets in 2015 and 2016 (See Note 11 (g) for additional information regarding the contingent consideration associated with this acquisition). The earn-out payment was based on the actual revenues of Turbochrome during the calendar years 2015 and 2016. To date the Company has paid $ 0.5 million for the earn-out payment. Turbochrome Ltd., located in Israel, specializes in overhaul and coating of jet engine components, including turbine vanes and blades, fan blades, variable inlet guide vanes, afterburner flaps and other components. In connection with the acquisition, the company recognized a bargain purchase gain of $4.8 million in the consolidated statement of operations for the year ended December 31, 2015. The bargain purchase gain was primarily related to the fair market value of certain property, plant and equipment, in relation to replacement costs, and to the Company's expectation regarding its ability to increase the services that can be provided to Turbochrome's existing customers and to its own customers. As part of the purchase agreement the company assumed a committed to continue the engagement with Turbochrome’s CEO for 12 months from the day of closing. In December 2015, the company decided to terminate this employment agreement. The total termination expenses the company included in the financial statements for 2015 were in the amount of approximately $300. Turbochrome Ltd. results of operations and balance sheet were included in Company's consolidated financial statements commencing October 19, 2015. 2. Under the acquisition method of accounting, the total purchase price is allocated to the net tangible and intangible assets of Turbochrome, based on their fair values at the acquisition date. The table below summarizes the fair value of assets acquired, liabilities assumed, intangible assets and resulting bargain purchase in Turbochrome – Asset Fair value Cash and cash equivalents $ 1,164 Inventories 616 Other current assets 2,169 Property, plant and equipment 6,825 Identifiable intangible assets - Customers relationships 1,342 Current liabilities (2,857 ) Deferred Taxes (271 ) Accrued severance pay (15 ) Net Identifiable assets acquired 8,973 Gain from bargain purchase (4,833 ) Total consideration (including contingent consideration in amount of $640) $ 4,140 An amount of $1,342 of the purchase price was allocated to customer relationships. As part of the acquisition, the Company acquired all existing customers of Turbochrome. Customer’s relationship is amortized over a period of 10 years. Total transactions costs were approximately $303 and were recognized in earnings as other expenses. The actual Turbochrome Ltd. net sales and net income included in the Company's consolidated statements of operations and comprehensive income for the year ended December 31, 2015 (for the period from October 19, 2015 acquisition date through December 31 ,2015) are as follows: U.S. dollars in thousands Actual Turbochrome results of operations included in the consolidated results of operations: Revenue 1,905 Net loss attributable by Turbochrome (163 ) 3. Below are certain unaudited pro forma condensed consolidated statements of operations data for the years ended December 31, 2015 and 2014, as if the acquisition of Turbochrome Ltd. had occurred at the beginning of the year 2014, after giving effect to purchase accounting adjustments. Including amortization of identifiable intangible assets and the gain on bargain purchase. The gain on bargain purchase and transaction costs were included in net income for the year ended December 31, 2014 This unaudited pro forma financial information is not necessarily indicative of the combined results that would have been attained as if the acquisition takes place at the beginning of 2014 nor is it necessarily indicative of future results. Year ended December 31 2015 2014 Revenue 92,230 87,598 Net income 801 1,463 Earnings per share: Basic and Diluted 0.09 0.17 b. FAvS As of December 31, 2016 and 2015, the company has 4.9% of First Aviation Services ordinary shares, a provider of repair and overhaul, rotables management and related engineering services to the aviation industry worldwide. On March 11, 2015, Piedmont Aviation Component Services, LLC , an indirect subsidiary of TAT, entered into an agreement to sell 237,932 shares of Class B Common Stock of FAvS representing 23.18% of FAvS' share capital and its entire holdings (16,253) of FAvS' Series A Preferred stock. The purchase price for the Class B Shares was $8.40 per Class B Shares, for an aggregate purchase price of $1,999, and the purchase price for the Series A Preferred stock was $100 per Preferred Share, for an aggregate purchase price of $1,625. The total gain from the sale of FAvS' stock was $1,198. After the transaction the company owns 4.9% of FAvS’ ($169 at cost basis). From March 11, 2015 FAVS' investment is based on the cost method. Financial information Year ended December 31, 2014 Net sales $ 24,442 Gross profit 7,342 Income from continuing operations 827 Net income 727 Income attributable to common stockholders $ 336 A reconciliation of the share in results of FAVS for the year ended December 31, 2014: Year ended December 31, 2014 Share in income related to common stockholders $ 49 Share in income related to preferred stock 218 Net income $ 267 |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENT | NOTE 4 - FAIR VALUE MEASUREMENT Recurring Fair Value Measurements 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. The Company's financial assets and liabilities measured at fair value on a recurring basis, consisted of the following types of instruments: December 31, 2016 Level 1 Level 2 Level 3 Total Liabilities: Derivative financial instruments $ - $ 74 $ - $ 74 December 31, 2015 Level 1 Level 2 Level 3 Total Liabilities: Contingent liability (see also note 11 (g)) $ - $ - $ 640 $ 640 Derivative financial instruments $ - $ 14 $ - $ 14 a. Contingent consideration: The contingent consideration liability in the acquisition of Turbochrome shares was computed on expected revenue to be generated by Turbochrome using a binomial tree model income approach. The fair value of the contingent liability as of December 31, 2015 was estimated using the following assumptions: 2015 Volatility 16.6 % Expected life (in years) 1.25 Risk free interest rate 0.08 % The following table summarizes the activity for those financial assets and liabilities where fair value measurements are estimated utilizing Level 3 inputs. December 31, 2016 2015 Fair value at the beginning of the period $ 640 $ - Additional resulting from Turbochrome acquisition - 640 Adjustments to the provision resulting from Turbochrome acquisition (640 ) - Fair value at the end of the period $ - $ 640 b. Derivative financial instruments: The company 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's hedging policy. The majority of the ILS exposure arises from expected related salary expenses. The company enters into contracts for derivative financial instruments such as 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 of the gain or loss on the hedging instrument is recognized as other comprehensive income (loss), while any ineffective portion is recognized immediately in profit or loss through finance income (expenses), net. Amounts recognized as other comprehensive income (loss) are reclassified to profit or loss when the hedged transaction affects profit or loss, such as when the hedged expense is recognized. If the forecast expense is no longer expected to occur, amounts previously recognized in equity are reclassified to profit or loss. If the hedging instrument expires or is sold, terminated or exercised, or if its designation as a hedge is revoked, amounts previously recognized in equity remain in equity until the forecast expense occurs. As of December 31, 2016 and 2015, the company has open forward contracts with a notional total amount of $12,399 and $3,638, respectively. The carrying amounts of financial instruments include cash and cash equivalents, short-term bank deposits, accounts receivable, accounts payable and accrued liabilities, approximate fair value because of their short maturities. |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 5 - INVENTORY Inventory is composed of the following: December 31, 2016 2015 Raw materials and components $ 10,715 $ 9,823 Work in progress 21,618 19,798 Spare parts 5,743 6,340 Finished goods 1,193 703 Total inventory (*) $ 39,269 $ 36,664 (*) The total amount of Rotables included in the company inventory for the years ended December 31, 2016 and 2015 were $8,345 and $7,964, respectively. |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | NOTE 6 - PROPERTY, PLANT AND EQUIPMENT, NET Composition of assets, grouped by major classifications, is as follows: December 31, 2016 2015 Cost: Land and buildings $ 11,966 $ 11,112 Machinery and equipment 46,129 41,378 Motor vehicles 362 334 Office furniture and equipment 1,926 1,789 Software 1,354 1,259 61,737 55,872 Less: Accumulated depreciation 40,439 36,938 Depreciated cost $ 21,298 $ 18,934 Depreciation expenses amounted to $3,501, $2,753 and $2,069 for the years ended December 31, 2016, 2015 and 2014, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 7 - INTANGIBLE ASSETS Intangible assets: December 31, 2016 2015 Customer relationships Cost $ 1,342 $ 1,342 Accumulated amortization (163 ) (28 ) Amortized cost $ 1,179 $ 1,314 |
OTHER BALANCE SHEETS SUPPLEMENT
OTHER BALANCE SHEETS SUPPLEMENTAL INFORMATION | 12 Months Ended |
Dec. 31, 2016 | |
OTHER BALANCE SHEETS SUPPLEMENTAL INFORMATION [Abstract] | |
OTHER BALANCE SHEETS SUPPLEMENTAL INFORMATION | NOTE 8 - OTHER BALANCE SHEETS SUPPLEMENTAL INFORMATION Accrued expenses: December 31, 2016 2015 Employees and payroll accruals $ 3,386 $ 2,657 Accrued expenses 838 1,081 Authorities 1,722 952 Advances from customers 1,861 1,295 Deferred income 441 240 Warranty provision 338 324 Contingent consideration - 500 Accrued royalties 1,176 752 Hedge instruments 74 14 $ 9,836 $ 7,815 |
TRANSACTIONS WITH RELATED PARTI
TRANSACTIONS WITH RELATED PARTIES | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
TRANSACTIONS WITH RELATED PARTIES | NOTE 9 - TRANSACTIONS WITH RELATED PARTIES Transactions with related parties: Year ended December 31, 2016 2015 2014 Compensation and benefits to senior management, including benefit component of option grants $ 1,464 $ 1,236 $ 1,213 Number of individuals to which this benefit related 5 5 5 Compensation and benefits to the chairman of the Board $ 167 $ 173 $ 188 Number of individuals to which this benefit related 1 1 1 Compensation and benefits to directors $ 161 $ 161 $ 131 Number of individuals to which this benefit related 6 5 5 |
LONG-TERM EMPLOYEE-RELATED OBLI
LONG-TERM EMPLOYEE-RELATED OBLIGATIONS | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
LONG-TERM EMPLOYEE-RELATED OBLIGATIONS | NOTE 10 - LONG-TERM EMPLOYEE-RELATED OBLIGATIONS Severance pay: The Company and its Israeli subsidiary are required to make severance payments upon dismissal of an employee or upon termination of employment in certain circumstances. The severance payment liability to the employees (based upon length of service and the latest monthly salary - According to Section 14 of the Israeli Severance Pay Law, the Israeli company’s liability for certain employees, according to their employment agreements, make regular deposits with certain insurance companies for accounts controlled by each applicable employee in order to secure the employee’s retirement benefit obligation. The Company and its Israeli subsidiary are fully relieved from any severance pay liability with respect to each such employee after it makes the payments on behalf of the employee. The liability accrued in respect of these employees and the amounts funded, as of the respective agreement dates, are not reflected in the Company balance sheet, as the amounts funded are not under the control and management of the Company and the pension or severance pay risks have been irrevocably transferred to the applicable insurance companies (the “Contribution Plan”). With regard to the employees that are not under the “Contribution Plan”, the liability is funded in part from the purchase of insurance policies or by the establishment of pension funds with dedicated deposits in the funds. The amounts used to fund these liabilities are included in the balance sheets under “Funds in respect of employee rights upon retirement.” These policies are the Company’s assets. In the years ended December 31, 2016 and 2015, the Company deposited $228 and $389, respectively, with pension funds and insurance companies in connection with its severance payment obligations. The amounts of severance payment expenses for the Israeli companies were $777, $554 and $555 for the years ended December 31, 2016, 2015 and 2014, respectively. Limco-Piedmont sponsors a 401(K) safe harbor profit sharing plan covering substantially all of its employees. The plan requires the employer to contribute a match which is currently done on a payroll period basis, matching 100% of the first 2% and 50% of the next three percent. In addition, the plan allows for a discretionary qualified non-elective contribution for the plan year. Contributions to the plan by Limco-Piedmont were $344, $261 and $251 for the years ended December 31, 2016, 2015 and 2014, respectively. The Group expects to contribute approximately $800 in 2017 to the pension funds and insurance companies in respect of their severance and pension pay obligations. The amounts of severance payments, actually paid to retired employees, by TAT were $230, $166 and $568 for the years ended December 31, 2016, 2015 and 2014. TAT expects to pay $1,220 in future benefits to their employees during 2017 through 2026 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 company before their normal retirement age. Year Amount 2017 $ 106 2018 195 2019 314 2020 175 2021 47 Thereafter (through 2026) 383 $ 1,220 |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | NOTE 11 - COMMITMENTS AND CONTINGENT LIABILITIES a. Commissions arrangements: The Group is committed to pay marketing commissions ranging between 2% to 10% to sale agents of total sales contracts. Commission expenses were $774, $678 and $701 for the years ended December 31, 2016, 2015 and 2014, 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 through 2016, ranging from 12% to 17% of sales of products developed by the third parties. Royalty expenses were $216, $273 and $270 for the years ended December 31, 2016, 2015 and 2014, respectively. The royalties were recorded as part of the cost of revenues. (2) Limco-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 Limco-Piedmont provides MRO services. In addition, Limco-Piedmont is committed to pay said third party royalties of 20%, on parts reclaimed to use in MRO services or sold to our customers when they are manufactured by the third party. Royalty expenses were $1,561, $1,248 and $680 for the years ended December 31, 2016, 2015 and 2014, respectively. The royalties were recorded as part of the cost of revenues. c. 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 2025. Certain leases contain renewal options as defined in the agreements. Lease expense totaled $454, $419 and $271 for the years ended December 31, 2016, 2015, and 2014 respectively. TAT leases its factory from TAT Industries until the end of 2024. Lease expense totaled $681, $667 and $427 for the years ended December 31, 2016, 2015, and 2014 respectively. As of December 31, 2016, future minimum rental payments under non-cancelable operating leases are as follows: Year Amount 2017 $ 1,019 2018 1,033 2019 1,047 2020 1,078 2021 and after 4,708 Total $ 8,885 d. Legal claims contingencies: TAT is aware that in 2016, a case was The case alleges this matter it e. Guarantees: (1) In order to secure TAT's liability to the Israeli customs, the Company provided a bank guarantee in the amount of $165. The guarantee is linked to the consumer price index and is valid until June 2017. (2) In order to secure the TAT's liability to the lessor of its premises, the Company provided a bank guarantee in the amount of $668. The guarantee is linked to the consumer price index in Israel and is valid until June 2017. (3) In order to secure Turbochrome liability to the Israeli customs, the Company provided a bank guarantee in the amount of $260. The guarantee is linked to the consumer price index in Israel and was valid until December 2016. Starting 2017 the guarantee amount has been reduced to $130. Validity has been extended until June 2017. No change has been made to other terms of the guarantee. f. Vehicle Lease The Company entered into several three-year leases for vehicles. The current monthly lease fees aggregate approximately $33. The expected lease payments for the years ending December 31, 2017, 2018 and 2019 are approximately $253, $110 and $19, respectively. g. Contingent consideration On October 19, 2015, the company acquired 100% of Turbochrome Ltd. shares for approximately US$ 3.5 million (subject to certain price adjustments). The acquisition was funded through cash on hand and an earn-out payment (up to $2 million). The earn-out Payment is based on the actual revenues of Turbochrome during the calendar years 2015 and 2016. The contingent consideration liability was computed on expected revenue to be generated by the acquired company using a binomial tree model income approach. The Company reassessed the fair value of the contingent consideration on a quarterly basis and recorded any applicable adjustments to earnings in the period they were determined. The adjustments were classified as other income. As of December 31, 2016 and 2015, the fair value of the contingent considerations was zero and $640 ($500 in accrued expenses and $140 in other long-term liabilities), respectively. According to the results of Turbochrome for the year 2015, Turbochrome met the revenue target for 2015 and, subject to the terms of the share purchase agreement, TAT paid to Chromalloy American LLC (the previous shareholder of Turbochrome), $500 as an earn out payment with respect to fiscal year 2015 revenues, in 2016. According to the results of Turbochrome for the year 2016, Turbochrome did not meet the revenue target set forth in the share purchase agreement, and therefore, pursuant to the terms of such agreement, TAT is not required to pay Chromalloy American LLC any earn out payment with respect to fiscal year 2016 revenues or for the accumulated revenue for the years 2016 and 2015, thus the remaining liability of $140 was reversed to other income. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 12 - 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. b. Stock option plans: (1) Following the approval of TAT's Audit Committee and Board of Directors, on June 28, 2012, the Company’s shareholders approved the 2012 stock option plan (the “2012 Plan”) to grant up to 380,000 options to purchase Ordinary shares, 0.9 NIS par value, of the Company to senior executives and certain members of the Board of Directors, at an exercise price as determined in the stock option plan. The option pool was increased in 2016 by 300,000 to an aggregate option pool of 680,000 options following the approvals of the Company's Audit Committee, Board of Directors and shareholders. In general, the Options vest over a period of 4 years as follows: 25% of the Options vest upon the lapse of 12 months following the date of grant and the remaining 75% vest on a quarterly basis over the remaining 3-year period. In addition, certain Options that were previously granted vest over a three-year period (one-third each year) and the vesting of 50% of such Options is subject, in addition, to certain minimum shareholders' equity during a period of 4 years from the grant date. The grant of options to Israeli employees under the Plan is subject to the terms stipulated by Sections 102 and 102A of the Israeli Income Tax Ordinance. Each option grant is subject to the track chosen by the Company, either Section 102 or Section 102A of the Israeli Income Tax Ordinance, and pursuant to the terms thereof, the Company is not allowed to claim as an expense for tax purposes the amounts credited to employees as benefits, including amounts recorded as salary benefits in the Company’s accounts, in respect of options granted to employees under the Plan, with the exception of the work income benefit component, if any, determined on grant date. For nonemployees and for non-Israeli employees, the share option plan is subject to Section 3(i) of the Israeli Income Tax Ordinance. (2) On March 19, 2014, pursuant to the 2012 Plan, TAT’s Board of Directors approved the grant of 195,000 Options, at an exercise price of $8.79 per share, to senior executives, which were granted on June 23, 2014 (which is also considered the grant date). (3) On November 30, 2014, pursuant to the 2012 Plan, TAT’s Board of Directors approved the grant of 20,000 Options, at an exercise price of $7.34 per share, to senior executives. (4) On July 1, 2015, pursuant to the 2012 Plan, TAT’s Board of Directors approved the grant of 80,000 Options, at an exercise price of $7.15 per share, to senior executives. (5) On October 1, 2015, pursuant to the 2012 Plan, TAT’s Board of Directors approved the grant of 40,000 Options, at an exercise price of $7.15 per share, to senior executives. (6) On March 29, 2016, pursuant to the 2012 Plan, TAT’s Board of Directors approved the grant of 40,000 Options, at an exercise price of $7.63 per share, to senior executives. (7) On June 23, 2016, pursuant to the 2012 Plan, TAT’s Shares Holders meeting approved the grant of 100,000 Options, at an exercise price of $7.54 per share, to senior executives. (8) On November 3, 2016, pursuant to the 2012 Plan, TAT’s Shares Holders meeting approved the grant of 50,000 Options, at an exercise price of $7.34 per share, to the chairman of the board. (9) On December 28, 2016, pursuant to the 2012 Plan, TAT’s Board of Directors approved the grant of 60,000 Options, at an exercise price of $10 per share, to senior executives. The fair value of the Company’s stock options granted under the 2012 plan for the years ended December 31, 2016, 2015 and 2014 was estimated using the following assumptions: 2016 2015 2014 Expected stock price volatility 37.7% – 40.3% 35.07% – 38.97% 37.23% – 39.14% Expected option life (in years) 3 – 5.5 3 – 4 2.87 – 4 Risk free interest rate 0.92% – 1.79% 0.92% – 1.39% 0.48% – 1.34% Dividend yield 5% 5% 5% – 4.6% The Company uses the Black-Scholes option pricing model to determine the weighted average fair value of options. The volatility factor used in the Black-Scholes option pricing model is based on historical stock price fluctuations. The expected term of options is based on the simplified method. The Company is able to use the simplified method as the options qualify as “plain vanilla” options as defined by ASC 718-10-S99 and since the Company does not have sufficient historical exercise data to provide a reasonable basis to estimate expected term. Expected dividend yield is based upon historical and projected dividend activity and the risk-free interest rate assumption is based on observed interest rates appropriate for the expected term of the stock options granted. (10) 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, 2016 2015 2014 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 277,500 $ 7.60 235,000 $ 8.28 145,000 $ 6.50 Granted 250,000 8.10 120,000 7.15 215,000 8.66 Forfeited (177,400 ) 7.56 (77,500 ) 8.67 (40,000 ) 8.79 Exercised (20,100 ) 6.50 - - (85,000 ) 6.50 Outstanding at the end of the year 330,000 $ 7.97 277,500 $ 7.60 235,000 8.28 Exercisable options 20,000 $ 7.15 30,000 $ 6.50 20,000 $ 6.50 The weighted-average grant-date fair value of options granted was $1.42 in 2016, $1.25 in 2015 and $1.13 in 2014. The aggregate intrinsic value for the options outstanding as of December 31, 2016, 2015 and 2014 was $332, $27 and $0, respectively. As of December 31, 2016 total unrecognized compensation cost was $306 and is expected to be recognized over a weighted-average period of 1.14 years. c. Dividends (1) On March 19, 2014, TAT’s Board declared a cash dividend in the total amount of $2 million (approximately NIS 6.9 million), or $0.22 per share (approximately NIS 0.76 per share), for all of the shareholders of TAT. The dividend was paid on May 7, 2014 to shareholders of record on April 21, 2014. (2) On June 28, 2016, TAT’s Board declared a cash dividend in the total amount of $3 million (approximately NIS 11.5 million), or $0.34 per share (approximately NIS 1.3 per share), for all of the shareholders of TAT. The dividend was paid on August 9, 2016 to shareholders of record on July 28, 2016. |
EARNINGS PER SHARE (EPS)
EARNINGS PER SHARE (EPS) | 12 Months Ended |
Dec. 31, 2016 | |
Weighted average number of shares outstanding: | |
EARNINGS (LOSS) PER SHARE ("EPS") | NOTE 13 - EARNINGS PER SHARE (“EPS”) Basic and diluted earnings per share are based on the weighted average number of ordinary shares outstanding. 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, 2016 2015 2014 Numerator for EPS: Net income $ 62 $ 5,849 $ 1,432 Denominator for EPS: Weighted average shares outstanding – basic 8,828,444 8,808,344 8,805,495 Dilutive shares 2,320 2,345 21,047 Weighted average shares outstanding – diluted 8,830,764 8,810,689 8,826,542 EPS: Basic and diluted $ 0.01 $ 0.66 $ 0.16 Diluted income per share does not include 220,000, 295,000 and 175,000 options, for the years ended December 31, 2016, 2015 and 2014 respectively because the options are anti-dilutive. Dilutive shares are calculated using the treasury stock method and include dilutive shares from share-based employee compensation plans. |
TAXES ON INCOME
TAXES ON INCOME | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 14 - 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. Pursuant to such Law, the income derived from those enterprises will be exempt from Israeli corporate tax for a specified benefit period (except to the extent that dividends are distributed during the tax-exemption period other than upon liquidation) and subject to reduced corporate tax rates for an additional period. In the event of distribution of a dividend from income which was tax exempt as above, the company would have to pay a regular corporate tax rate in respect of the amount distributed. Preferred Enterprises Additional amendments to the Law became effective in January 2011 (the “2011 Amendment”). Under the 2011 Amendment, income derived by ‘Preferred Companies’ from ‘Preferred Enterprises’ (both as defined in the 2011 Amendment) would be subject to a uniform rate of corporate tax as opposed to the current incentives that are limited to income from Approved or Benefiting Enterprises during their benefits period. According to the 2011 Amendment, the uniform tax rate on such income, referred to as ‘Preferred Income’, would be 10% in areas in Israel that are designated as Development Zone A and 15% elsewhere in Israel during 2011-2012, 7% and 12.5%, respectively, in 2013-2014, and 6% and 12%, respectively, Thereafter. As with dividends distributed from taxable income derived from an Approved or Benefited Enterprises during the applicable benefits period, dividends distributed from Preferred Income would be subject to a 15% tax (or lower, if so provided under an applicable tax treaty), which would generally be withheld by the distributing company. While the Company may incur additional tax liability in the event of distribution of dividends from tax exempt income generated from its Approved and Benefiting Enterprises, no additional tax liability will be incurred by the Company in the event of distribution of dividends from income taxed in accordance with the 2011 Amendment. Under the transitional provisions of the 2011 Amendment, the Company elected to irrevocably implement the 2011 Amendment, commencing 2011 and thereafter, and be regarded as a "Preferred Enterprise" with respect to its existing Approved and Benefited Enterprises while waiving benefits provided under the legislation prior to the 2011 Amendment. 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% elsewhere (instead of the 6% and 12%, respectively). TAT is located in an area in Israel that is designated as elsewhere and as such entitled to reduce tax rates of 15% during 2011-2012, 12.5% in 2013, and 16% in 2014, 2015 and 2016. Turbochrome is located in an area in Israel that is designated as Zone A and as such entitled to reduce tax rates of 10% during 2011-2012, 7% in 2013, and 9% in 2014, 2015 and 2016. The uniform tax rate for Development Zone A, as of January 1, 2017, is 7.5% (as part of changes enacted in Amendment 73). b. Corporate tax rate in Israel The income of the Israeli companies is taxed in Israel at the regular corporate tax rates which were 26.5% for 2014 and 2015. In January 2016, the Law for the Amendment of the Income Tax Ordinance (No.216) was published, enacting a reduction of corporate tax rate beginning in 2016 and thereafter, from 26.5% to 25%. In December 2016, additional legislation was enacted, reducing the corporate tax rate to 24% for 2017 and to 23% for 2018 and onwards. There is no impact on the financial statements of the Company as a result of the changes in the Israeli corporate tax rate. Capital gain is subject to capital gain tax according to corporate tax rate in the year which the assets are sold. c. U.S. subsidiaries U.S. subsidiaries are taxed based on federal and state tax laws. The statutory tax rate for 2016, 2015 and 2014 was 38%. d. Tax assessments TAT’s income tax assessments are considered final through 2014. Turbochrome income tax assessments are considered final through 2013. Limco-Piedmont income tax assessments are considered final through 2012. TAT-GAL which was incorporated in 2012 has not received final tax assessment yet. e. 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, 2016 2015 2014 Income before taxes on income as reported in the statements of income $ 3,982 $ 5,256 $ 2,525 Statutory tax rate in Israel 25 % 26.5 % 26.5 % Theoretical taxes on income $ 996 $ 1,393 $ 669 Increase (decrease) in taxes on income resulting from: Tax adjustment for foreign subsidiaries subject to a different tax rate 618 224 457 Reduced tax rate on income derived from "Preferred Enterprises" plans 75 146 156 Exempt income (Bargain purchase) - (1,281 ) - Earnings from foreign subsidiaries (1) 2,685 - - Valuation allowance (40 ) (75 ) (100 ) Tax in respect of prior years (151 ) (12 ) (44 ) Other adjustments (200 ) 130 - Permanent differences (118 ) 119 222 Taxes on income as reported in the statements of income $ 3,865 $ 644 $ 1,360 (1) During 2016, the Company recorded an accrual that related to a tax liability due to actual distribution of earnings from foreign subsidiaries of the Company and due to the possibility of future distribution of earnings from such foreign subsidiaries. f. Income before taxes on income is comprised as follows: Year ended December 31, 2016 2015 2014 Domestic (Israel) $ (650 ) $ 3,840 $ (1,659 ) Foreign (United States) 4,632 1,416 4,184 $ 3,982 $ 5,256 $ 2,525 g. Taxes on income (tax benefit) included in the statements of income: Year ended December 31, 2016 2015 2014 Current: Domestic (Israel) $ 334 $ 225 $ (94 ) Foreign (United States) 1,792 452 237 2,126 677 143 Deferred: Domestic (Israel) 2,135 (170 ) (36 ) Foreign (United States) (245 ) 149 1,297 1,890 (21 ) 1,261 Previous years: Foreign (United States) (151 ) (12 ) (44 ) (151 ) (12 ) (44 ) $ 3,865 $ 644 $ 1,360 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, 2016 2015 Deferred tax assets (liabilities): Provision for doubtful accounts $ 102 $ 100 Unrealized gains 138 140 Provisions for employee benefits 476 300 Inventory 1,608 1,114 Goodwill and intangible assets 360 462 Tax credits carryforward 347 693 Capital and state tax losses carryforward 3,409 3,449 Net operating losses carryforward 817 553 Other 237 240 Deferred tax assets, before valuation allowance $ 7,494 $ 7,051 Valuation allowance (3,409 ) (3,449 ) Deferred tax assets, net $ 4,085 $ 3,602 Property, plant and equipment and intangible assets (2,643 ) (2,473 ) Earnings from foreign subsidiaries (1) (2,259 ) - Other temporary differences deferred tax liabilities (225 ) (501 ) Deferred tax liabilities $ (5,127 ) $ (2,974 ) Net $ (1,042 ) $ 628 (1) During 2016, the Company recorded an accrual that related to a deferred tax liability due to the possibility of future distribution of earnings from foreign subsidiaries of the company. The following table summarizes the changes in the valuation allowance for deferred tax assets: Balance, December 31, 2013 $ 3,306 Addition charged to expenses 268 Balance, December 31,2014 3,574 Deductions charged to expenses (125 ) Balance, December 31,2015 3,449 Deductions charged to expenses (40 ) Balance, December 31,2016 $ 3,409 Valuation allowance 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 $ 1,454. That amount is expected to expire gradually starting from 2024 and (ii) Capital losses attributed to the company in the amount of $ 1,495. TAT does not intend to distribute tax-exempt earnings deriving from its Approved Enterprise aggregating approximately $1,746 as of December 31, 2016, and accordingly, no deferred tax liability has been established related to these earnings. If such tax-exempt income is distributed, it would be taxed at the reduced corporate tax rate applicable to such profits (23%) and an income tax liability of up to approximately $402 would be incurred as of December 31, 2016. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 15 - SEGMENT INFORMATION a. Segment Activities Disclosure: TAT operates under four segments: (i) Original its for heat transfer components its its Overhaul its - OEM of heat transfer solutions and aviation accessories primarily include and , pre-coolers heat exchangers, power electronics installed in and turbine units - MRO Services for MRO components to - - MRO services for aviation components MRO gears - - 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 ). 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. b. Segments statement operations disclosure: The following financial information is the information that management uses for analyzing the segment results. The figures are presented in consolidated method as presented to management. The following financial information is a summary of the operating income of each operational segment: Year ended December 31, 2016 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 Overhaul and coating of jet engine components Other Elimination of inter-company sales Consolidated Revenues Sale of products and services $ 23,515 $ 31,440 $ 31,630 $ 9,209 $ - $ - $ 95,794 Intersegment revenues 4,740 989 - - - (5,729 ) - Total revenues 28,255 32,429 31,630 9,209 (5,729 ) 95,794 Cost of revenues 24,028 23,440 27,423 7,610 - (5,744 ) 76,757 Gross profit 4,227 8,989 4,207 1,599 - 15 19,037 Research and development 758 210 29 143 - - 1,140 Selling and marketing 1,544 1,105 792 435 - - 3,876 General and administrative 2,539 2,915 3,473 1,096 - - 10,023 Other expenses (income) - - - - (138 ) - (138 ) Operating income (loss) $ (614 ) $ 4,759 $ (87 ) $ (75 ) $ 138 $ 15 $ 4,136 Year ended December 31, 2015 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 Overhaul and coating of jet engine components Other Elimination of inter-company sales Consolidated Revenues Sale of products and services $ 23,511 $ 30,526 $ 29,665 $ 1,905 $ - $ - $ 85,607 Intersegment revenues 3,840 475 - - - (4,315 ) - Total revenues 27,351 31,001 29,665 1,905 - (4,315 ) 85,607 Cost of revenues 23,887 22,541 28,474 1,485 - (4,445 ) 71,942 Gross profit 3,464 8,460 1,191 420 - 130 13,665 Research and development 619 264 - 7 - - 890 Selling and marketing 1,270 961 608 64 - - 2,903 General and administrative 1,880 3,000 3,303 286 - - 8,469 Other expenses - - - - 631 - 631 Gain on bargain purchase - - - - (4,833 ) - (4,833 ) Operating income (loss) $ (305 ) $ 4,235 $ (2,720 ) $ 63 $ (4,202 ) $ 130 $ 5,605 Year ended December 31, 2014 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 Elimination of inter-company sales Consolidated Revenues Sale of products and services $ 22,871 $ 30,121 $ 27,734 $ - $ 80,726 Intersegment revenues 5,314 229 - (5,543 ) - Total revenues 28,185 30,350 27,734 (5,543 ) 80,726 Cost of revenues 23,249 23,101 23,502 (5,330 ) 64,522 Gross profit 4,936 7,249 4,232 (213 ) 16,204 Research and development 841 229 - - 1,070 Selling and marketing 1,538 1,058 607 - 3,203 General and administrative 2,717 2,417 2,989 - 8,123 Other income (11 ) - - - (11 ) Operating income (loss) $ (149 ) $ 3,545 $ 636 $ (213 ) $ 3,819 c. The following financial information identifies the assets, depreciation and amortization, and capital expenditures to segments: Year ended December 31, 2016 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 Overhaul and coating of jet engine components Amounts not allocated to segments Consolidated Total assets 28,885 34,729 27,246 11,616 9,500 111,976 Depreciation and amortization 1,199 898 542 997 - 3,636 Expenditure for segment assets 1,437 1,266 2,686 505 - 5,894 Year ended December 31, 2015 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 Overhaul and coating of jet engine components Amounts not allocated to segments Consolidated Total assets 29,440 28,400 24,170 11,635 15,938 109,583 Depreciation and amortization 1,127 789 669 196 - 2,781 Expenditure for segment assets 1,075 1,400 821 51 - 3,347 Year ended December 31, 2014 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 Amounts not allocated to segments Consolidated Depreciation and amortization 1,027 675 367 - 2,069 Expenditure for segment assets 1,126 810 539 - 2,475 |
ENTITY-WIDE DISCLOSURE
ENTITY-WIDE DISCLOSURE | 12 Months Ended |
Dec. 31, 2016 | |
Segments, Geographical Areas [Abstract] | |
ENTITY-WIDE DISCLOSURE | NOTE 16 - ENTITY-WIDE DISCLOSURE a. Total revenues - by geographical location were as follows: Year ended December 31, 2016 2015 2014 Total revenues Total revenues Total revenues Sale of products Israel $ 5,005 $ 4,102 $ 4,807 United states 18,350 20,013 18,886 France 2,495 3,720 3,642 Other 4,581 3,504 4,028 $ 30,431 $ 31,339 $ 31,363 Year ended December 31, 2016 2015 2014 Total revenues Total revenues Total revenues Sale of Services Israel $ 2,665 $ 814 $ 834 United states 39,596 32,738 31,267 Other 23,102 20,716 17,262 $ 65,363 $ 54,268 $ 49,363 b. Total long-lived assets - by geographical location were as follows: December 31, 2016 2015 Israel $ 12,349 $ 12,481 United states 8,949 6,453 Total $ 21,298 $ 18,934 c. Major Customers No single customer accounted for 10% or more of Group's total net revenue in any year presented. |
SUPPLEMENTAL CONSOLIDATED BALAN
SUPPLEMENTAL CONSOLIDATED BALANCE SHEETS INFORMATION | 12 Months Ended |
Dec. 31, 2016 | |
Valuation and Qualifying Accounts [Abstract] | |
SUPPLEMENTAL CONSOLIDATED BALANCE SHEETS INFORMATION | NOTE 17 - SUPPLEMENTAL CONSOLIDATED BALANCE SHEETS INFORMATION Warranty provision Provision for doubtful Accounts Balance, as of December 31, 2013 $ 229 $ 123 Additions 286 107 Deductions (264 ) (105 ) Balance, as of December 31, 2014 251 125 Additions 294 206 Deductions (221 ) - Balance, as of December 31, 2015 324 331 Additions 216 112 Deductions (202 ) (141 ) Balance, as of December 31, 2016 $ 338 $ 302 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 18 - SUBSEQUENT EVENTS On March 6, 2017, subsequent to the balance sheet date, TAT’s board of directors approved the grant of 30,000 options, at an exercise price of $8.9 per share, to senior executives. |
SIGNIFICANT ACCOUNTING POLICI27
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | a. Basis of Presentation The Group's financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"). |
Use of estimates in the preparation of financial statement | b. Use of estimates in the preparation of financial statement 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 doubtful accounts, purchase price allocation on acquisition, income taxes, impairment of long-lived assets, revenue recognition generated from long-term contracts and contingent consideration. |
Functional currency | c. Functional currency The majority of the Group revenue are generated in U.S. dollars ("dollars") and a substantial portion of the Group costs are incurred in dollars. In addition, a significant portion of the TAT and Turbochrome financing has been obtained 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. Transactions and balances originally denominated in dollars are presented at their original amounts. Balances in currencies other than the U.S. dollar are translated into dollars using historical and current exchange rates for non-monetary and monetary balances, respectively. For non-dollar transactions and other items in the statements of income (indicated below), the following exchange rates are used: (i) for transactions – exchange rates at transaction dates or average rates; and (ii) for other items (derived from non-monetary balance sheet items such as depreciation and amortization, etc.) – historical exchange rates. Currency transaction gains and losses are carried to financial income or expenses, as appropriate. |
Principles of consolidation | d. Principles of consolidation The consolidated financial statements include the accounts of TAT and its subsidiaries. Intercompany balances and transactions, including profits from intercompany sales not yet realized outside the Group, have been eliminated upon consolidation. |
Cash and Cash equivalents | e. Cash and Cash equivalents All highly liquid investments, which include short-term bank deposits and money market accounts, that are not restricted as to withdrawal or use, and short-term debentures, the period to maturity of which do not exceed three months at the time of investment, are considered to be cash equivalents. |
Short-term bank deposits | f. Short-term bank deposits |
Accounts receivable, net | g. 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 doubtful accounts. Accounts outstanding longer than their original contractual payment terms are considered past due. The Group determines its allowance by considering a number of factors, including the length of time accounts receivable are past due, the Group’s previous loss history from such customers, the customer’s current ability to pay its obligation to TAT and the condition of the general economy and the industry as a whole. The Group writes-off accounts receivable when they become uncollectible. Payments subsequently received on such receivables are credited against earnings. The provision for doubtful accounts is determined with respect to specific debts that are doubtful of collection. |
Inventory | h. Inventory Inventory is measured at the lower of cost or market value. Inventories include raw materials, parts, work in progress and finished products. Cost of raw material and parts is determined using the “moving average” basis. Cost of work in progress and finished products is calculating based on actual costs. Capitalized production costs components, mainly labor and overhead, is determine on average basis over the production period. If actual market prices are less favorable than those projected by management, inventory write-downs may be required. Once written-down, a new lower cost basis for that inventory is established. Since the Group sells products and services related to airplane accessories for airplanes that can be in service for 20 to 50 years, it must keep a supply of such products and parts on hand while the airplanes are in use. The Group writes down its inventory for estimated obsolescence and unmarketable inventory equal to the difference between the cost of inventory and estimated market value based upon assumptions for future demand and market conditions. |
Property, plant and equipment | i. 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 7 - 39 Machinery and equipment 3 - 17 Motor vehicles 6 - 7 Office furniture and equipment 3 - 17 Software 3-5 Leasehold improvements are included in buildings and amortized using the straight line method over the period of the lease contract, or the estimated useful life of the asset, whichever is shorter. |
Grants from National Authority for Technological Innovation (?NATI?) | j. Grants from National Authority for Technological Innovation (“NATI”): Grants received from the NATI for approved research and development projects are recognized at the time the Company is entitled to such grants, on the basis of the costs incurred and included as a deduction from research and development expenses. Due the fact that the Company is defined as a "Traditional Industry Company", under the NATI regulations, these grants are non-royalty bearing. |
Investment in company accounted for using the Equity Method | k. Investment in companies accounted for using the Equity Method Investment in which the Group exercises significant influence and which is not considered a subsidiary ("affiliate") is accounted for using the equity method, whereby the Group recognizes its proportionate share of the affiliated company's net income or loss after the date of investment. The Group reviews those investments for impairment whenever events indicate the carrying amount may not be recoverable. See notes 1(c) and 3(b). |
Identified intangible assets | l. Identified intangible assets Identifiable intangible assets are comprised of definite lived intangible assets - customer relationships, which are amortized 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 marketing and selling expenses. |
Impairment of long-lived assets | m. Impairment of long-lived assets Long-lived assets, including 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 6 and 7). |
Treasury Shares | n. Treasury Shares Company shares held by the Company are presented as a reduction of equity at their cost to the Company. |
Revenue recognition | 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. Revenues from the sale of products are recognized when persuasive evidence of an arrangement exists, delivery of the product has occurred, provided the collection of the resulting receivable is reasonably assured, the price is fixed or determinable and no significant obligation exists. The Group does not grant a right of return. Revenues from multi-year, fixed price contracts for OEM customers are recognized when a product is shipped (and title passed) to the customer. Management provides for losses as soon as a loss is expected for the remaining portion of such contracts. For the years ended December 31, 2016, 2015 and 2014, no losses have been recognized for such fixed price contracts. Revenues from MRO services are generally recognized when services are completed and the item is shipped back to the customer. In cases in which contracts require exchanging a defective landing gear for a restored gear, the non-refundable minimum amounts from these contracts are recognized on the exchange date (delivery of the product has occurred), and any additional amounts billed to the customer for excess hours of repair, are recognized when the customer approve the price for these additional services Revenues from maintenance contracts are recognized over the contract period in proportion to the costs expected to be incurred in performing services under the contract. The Group estimates the costs that are expected to be incurred based on its historical experience. The costs incurred related to the maintenance contracts are not incurred on a straight-line basis, as the timing to provide the maintenance services is dependent on when parts under these contracts require maintenance. Therefore, the Group accrues revenue as costs are incurred. These contracts are reviewed on a timely basis and adjusted (if required) based on total expected cost. |
Shipping and handling costs | p. Shipping and handling costs Shipping and handling costs billed to customers are included in revenue. The cost of shipping and handling products is included in costs of revenues. |
Warranty costs | 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. The Group estimates the costs that may be incurred under its warranty and records a liability in the amount of such costs at the time revenue is recognized. The Group periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. |
Research and development | r. Research and development Research and development costs, net of grants, are charged to expenses as incurred. |
Fair value measurement | s. Fair value measurement The Group measures fair value and discloses fair value measurements for financial and non-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. The accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data or active market data for similar but not identical assets or liabilities. 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. In determining fair value, the Group utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers credit risk in its assessment of fair value. |
Concentrations of credit risk | t. 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. Cash and cash equivalents are deposited with major banks in Israel and the United States. Such deposits in the United States may be in excess of insured limits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Group's cash and cash equivalents are financially sound. Accordingly, minimal credit risk exists with respect to these financial instruments. The Group's accounts receivable are derived mainly from sales to customers in the United States, Israel and Europe. The Group generally does not require collateral; however, in certain circumstances the Group may require letters of credit. Management believes that credit risks relating to accounts receivable are minimal since the majority of the Group's customers are world-leading manufacturers of aviation systems and aircrafts, international airlines, governments and air-forces, and world-leading manufacturers and integrators of defense and ground systems. In addition, the Group has relatively a large number of customers with wide geographic spread which mitigates the credit risk. The Group performs ongoing credit evaluation of its customers' financial condition. |
Income taxes | u. 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 necessary, to reduce deferred tax assets to their estimated realizable value, see note 14(h). Taxes which would apply in the event of disposal of investments in foreign subsidiaries have not been taken into account in computing the deferred taxes, when the Group’s intention is to hold, and not to realize the investments. 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 14(a)), since it intends to permanently reinvest them and has no intention to declare dividends out of such tax exempt income in the foreseeable future. Management considers such retained earnings to be essentially permanent in duration. The payment of dividend in 2016 and 2014 was paid from foreign subsidiaries earnings of the Company and earnings from regular income of the Israeli company, respectively. Results for tax purposes for TAT’s Israeli subsidiaries are measured and reflected in NIS and for TAT’s U.S. subsidiaries are measured and reflected in U.S. dollars. As explained in (c) above, the consolidated financial statements are measured and presented in U.S. dollars. In accordance with ASC 740, TAT has not provided deferred income taxes on the differences resulting from changes in exchange rate and indexation. The Group follows a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate resolution. The Group’s policy is to include interest and penalties related to unrecognized tax benefits within financial income (expense). Such liabilities are classified as long-term, unless the liability is expected to be resolved within twelve months from the balance sheet date. |
Earnings per share | v. Earnings per share Basic earnings per share are computed by dividing net income by the weighted average number of shares of the Company's Ordinary Shares, par value NIS 0.9 per share outstanding for each period. Diluted earnings per share are calculated by dividing the net income by the fully-diluted weighted-average number of ordinary shares outstanding during each period. Potentially dilutive shares include outstanding options granted to employees and directors. |
Share-based compensation | w. 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 Group estimates forfeitures based on historical experience and anticipated future conditions. 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. For an award with performance conditions that has a graded vesting schedule, compensation cost is recognized upon meeting such conditions, using the accelerated method over the requisite service period for the entire award. |
Comprehensive income | x. Comprehensive income Comprehensive income in 2016 and 2015 includes, in addition to net income or loss, gains and losses of derivatives (net of related taxes where applicable). In 2014, comprehensive income includes, currency translation adjustments that were related to the subsidiary that was sold in 2014. Reclassification adjustments for gain or loss of derivatives are included in the relevant line item in the statement of income. See also note 2 (aa). |
Business Combinations | y. Business Combinations When the Company acquires a business, the purchase price is allocated based on the fair value of tangible assets and identifiable intangible assets acquired, and liabilities assumed. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Goodwill as of the acquisition date is measured as the residual of the excess of the consideration transferred, plus the fair value of any non-controlling interest in the acquire at the acquisition date, over the fair value of the identifiable net assets acquired. If the fair value of the net assets acquired exceeds the purchase price, the resulting bargain purchase is recognized as a gain in the consolidated statement of operations. The Company generally engages independent, third-party appraisal firms to assist in determining the fair value of assets acquired and liabilities assumed. Such a valuation requires management to make significant estimates, especially with respect to intangible assets. These estimates are based on historical experience and information obtained from the management of the acquired companies. These estimates are inherently uncertain. For all acquisitions, operating results are included in the consolidated statement of operations from the date of acquisition. |
Contingencies | z. 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. 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. Management applies the guidance in ASC 450-20-25 when assessing losses resulting from contingencies. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability is recorded as accrued expenses in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material are disclosed. |
Derivatives and hedging | aa. 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. The Company recognizes derivative instruments as either assets or liabilities and measures those instruments at fair value. For derivative instruments that are designated and qualify as a cash-flow hedge, the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same line item associated with the anticipated transaction in the same period or periods during which the hedged transaction affects earnings. The ineffective portion of a derivative designated as a cash flow hedge is recognized in "financial expense (income), net". 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". |
Recently Issued Accounting Principles: | bb. Recently Issued Accounting Principles: (1) In November 2016, the Financial Accounting Standards Board (“FASB”) issued guidance on the treatment of restricted cash in the statements of cash flows. Amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The guidance will be effective for the fiscal year beginning on January 1, 2018, including interim periods within that year (early adoption is permitted). The Company does not anticipate a material impact on its consolidated financial statements. (2) In October 2016, the FASB issued guidance on income taxes on intra-entity transfers. The guidance eliminates the exception to the recognition requirements under the standard for intra-entity transfers of an asset other than inventory. As a result, an entity should recognize the income tax consequences when the transfer of assets other than inventory occurs. The guidance will be effective for the fiscal year beginning on January 1, 2018, including interim periods within that year (early adoption is permitted). The Company is currently evaluating the potential effect of the guidance on its consolidated financial statements. (3) In August 2016, the FASB issued guidance on statements of cash flows. The guidance addresses eight specific issues: debt prepayment or debt extinguishment costs; settlement of certain debt instruments; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies; distributions received from equity method investees; beneficial interest in securitization transactions; separately identifiable cash flows and application of predominance principle. The guidance will be effective for the fiscal year beginning on January 1, 2018, including interim periods within that year (early adoption is permitted). The Company is currently evaluating the potential effect of the guidance on its consolidated financial statements. (4) In June 2016, the FASB issued guidance on financial instruments. The guidance replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance will be effective for the fiscal year beginning on January 1, 2020, including interim periods within that year. The Company is currently evaluating the potential effect of the guidance on its consolidated financial statements. (5) In February 2016, the FASB issued ASU 2016-02 – Leases (ASC 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less may be accounted for similar to existing guidance for operating leases today. ASC 842 supersedes the previous leases standard, ASC 840 Leases. The standard is effective on January 1, 2019, with early adoption permitted. The Company is in the process of evaluating the impact of this new guidance on its financial statements. (6) In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718). ASU No. 2016-09 identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. The amendments are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted but all of the guidance must be adopted in the same period. The Company is in the process of evaluating the impact of this new guidance on its financial statements. (7) In July 2015, the FASB issued guidance on current accounting for inventory measurement. The new guidance requires entities to measure inventory at the lower of cost or net realizable value. Net realizable value is defined by the guidance as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The guidance is effective for the interim and annual periods beginning on or after December 15, 2016 (early adoption is permitted). The Company is currently evaluating the impact of the new guidance on its consolidated financial statements. The Company does not anticipate a material impact on its consolidated financial statements. (8) In May 2014, FASB issued Accounting Standards Update No. 2014-09 (ASU 2014-09) "Revenue from Contracts with Customers." ASU 2014-09 will supersede most current revenue recognition guidance, including industry-specific guidance. The underlying principle is that an entity will recognize revenue upon the transfer of goods or services to customers in an amount that the entity expects to be entitled to in exchange for those goods or services. The guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. 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. The guidance also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. The guidance is effective for the interim and annual periods beginning on or after December 15, 2017 (early adoption is permitted in annual periods beginning after December 15, 2016). The guidance permits the use of either a retrospective or cumulative effect transition method. The Company is currently evaluating the impact of the amended guidance on its consolidated financial statements. |
SIGNIFICANT ACCOUNTING POLICI28
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Property, Plant and Equipment Estimated Useful Lives | Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, as follows: Years Buildings 7 - 39 Machinery and equipment 3 - 17 Motor vehicles 6 - 7 Office furniture and equipment 3 - 17 Software 3-5 |
BUSINESS COMBINATION AND INVE29
BUSINESS COMBINATION AND INVESTMENT IN AN AFFILIATED COMPANY (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Summary of fair value of assets acquired, liabilities assumed, intangible assets and resulting bargain purchase | The table below summarizes the fair value of assets acquired, liabilities assumed, intangible assets and resulting bargain purchase in Turbochrome – Asset Fair value Cash and cash equivalents $ 1,164 Inventories 616 Other current assets 2,169 Property, plant and equipment 6,825 Identifiable intangible assets - Customers relationships 1,342 Current liabilities (2,857 ) Deferred Taxes (271 ) Accrued severance pay (15 ) Net Identifiable assets acquired 8,973 Gain from bargain purchase (4,833 ) Total consideration (including contingent consideration in amount of $640) $ 4,140 |
Schedule of actual net sales and net income | The actual Turbochrome Ltd. net sales and net income included in the Company's consolidated statements of operations and comprehensive income for the year ended December 31, 2015 (for the period from October 19, 2015 acquisition date through December 31 ,2015) are as follows: U.S. dollars in thousands Actual Turbochrome results of operations included in the consolidated results of operations: Revenue 1,905 Net loss attributable by Turbochrome (163 ) |
Schedule of pro forma financial information | Year ended December 31 2015 2014 Revenue 92,230 87,598 Net income 801 1,463 Earnings per share: Basic and Diluted 0.09 0.17 |
Schedule of Summarized Statement of Operations Financial Information for Equity Method Investment | Financial information Year ended December 31, 2014 Net sales $ 24,442 Gross profit 7,342 Income from continuing operations 827 Net income 727 Income attributable to common stockholders $ 336 |
Reconciliation of the Share in Income (Loss), Impairment of Investment in FAvS and Gain from Dilution | A reconciliation of the share in results of FAVS for the year ended December 31, 2014: Year ended December 31, 2014 Share in income related to common stockholders $ 49 Share in income related to preferred stock 218 Net income $ 267 |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | The Company's financial assets and liabilities measured at fair value on a recurring basis, consisted of the following types of instruments: December 31, 2016 Level 1 Level 2 Level 3 Total Liabilities: Derivative financial instruments $ - $ 74 $ - $ 74 December 31, 2015 Level 1 Level 2 Level 3 Total Liabilities: Contingent liability (see also note 11 (g)) $ - $ - $ 640 $ 640 Derivative financial instruments $ - $ 14 $ - $ 14 |
Schedule of Assumptions used in Estimation of Fair Value | The fair value of the contingent liability as of December 31, 2015 was estimated using the following assumptions: 2015 Volatility 16.6 % Expected life (in years) 1.25 Risk free interest rate 0.08 % |
Schedule of Reconciliation of Financial Assets and Liabilities Estimated Utilizing Level 3 Inputs | The following table summarizes the activity for those financial assets and liabilities where fair value measurements are estimated utilizing Level 3 inputs. December 31, 2016 2015 Fair value at the beginning of the period $ 640 $ - Additional resulting from Turbochrome acquisition - 640 Adjustments to the provision resulting from Turbochrome acquisition (640 ) - Fair value at the end of the period $ - $ 640 |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Net | Inventory is composed of the following: December 31, 2016 2015 Raw materials and components $ 10,715 $ 9,823 Work in progress 21,618 19,798 Spare parts 5,743 6,340 Finished goods 1,193 703 Total inventory (*) $ 39,269 $ 36,664 (*) The total amount of Rotables included in the company inventory for the years ended December 31, 2016 and 2015 were $8,345 and $7,964, respectively. |
PROPERTY, PLANT AND EQUIPMENT32
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Composition of assets, grouped by major classifications, is as follows: December 31, 2016 2015 Cost: Land and buildings $ 11,966 $ 11,112 Machinery and equipment 46,129 41,378 Motor vehicles 362 334 Office furniture and equipment 1,926 1,789 Software 1,354 1,259 61,737 55,872 Less: Accumulated depreciation 40,439 36,938 Depreciated cost $ 21,298 $ 18,934 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets: December 31, 2016 2015 Customer relationships Cost $ 1,342 $ 1,342 Accumulated amortization (163 ) (28 ) Amortized cost $ 1,179 $ 1,314 |
OTHER BALANCE SHEETS SUPPLEME34
OTHER BALANCE SHEETS SUPPLEMENTAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
OTHER BALANCE SHEETS SUPPLEMENTAL INFORMATION [Abstract] | |
Schedule of Other Account Payable and Accrued Expenses | Accrued expenses: December 31, 2016 2015 Employees and payroll accruals $ 3,386 $ 2,657 Accrued expenses 838 1,081 Authorities 1,722 952 Advances from customers 1,861 1,295 Deferred income 441 240 Warranty provision 338 324 Contingent consideration - 500 Accrued royalties 1,176 752 Hedge instruments 74 14 $ 9,836 $ 7,815 |
TRANSACTIONS WITH RELATED PAR35
TRANSACTIONS WITH RELATED PARTIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Schedule of Transactions with Related Parties | Transactions with related parties: Year ended December 31, 2016 2015 2014 Compensation and benefits to senior management, including benefit component of option grants $ 1,464 $ 1,236 $ 1,213 Number of individuals to which this benefit related 5 5 5 Compensation and benefits to the chairman of the Board $ 167 $ 173 $ 188 Number of individuals to which this benefit related 1 1 1 Compensation and benefits to directors $ 161 $ 161 $ 131 Number of individuals to which this benefit related 6 5 5 |
LONG-TERM EMPLOYEE-RELATED OB36
LONG-TERM EMPLOYEE-RELATED OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Expected Future Benefits | Year Amount 2017 $ 106 2018 195 2019 314 2020 175 2021 47 Thereafter (through 2026) 383 $ 1,220 |
COMMITMENTS AND CONTINGENT LI37
COMMITMENTS AND CONTINGENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Operating Leases | As of December 31, 2016, future minimum rental payments under non-cancelable operating leases are as follows: Year Amount 2017 $ 1,019 2018 1,033 2019 1,047 2020 1,078 2021 and after 4,708 Total $ 8,885 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stock Options Assumptions | The fair value of the Company’s stock options granted under the 2012 plan for the years ended December 31, 2016, 2015 and 2014 was estimated using the following assumptions: 2016 2015 2014 Expected stock price volatility 37.7% – 40.3% 35.07% – 38.97% 37.23% – 39.14% Expected option life (in years) 3 – 5.5 3 – 4 2.87 – 4 Risk free interest rate 0.92% – 1.79% 0.92% – 1.39% 0.48% – 1.34% Dividend yield 5% 5% 5% – 4.6% |
Schedule of Stock Option Activity | 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, 2016 2015 2014 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 277,500 $ 7.60 235,000 $ 8.28 145,000 $ 6.50 Granted 250,000 8.10 120,000 7.15 215,000 8.66 Forfeited (177,400 ) 7.56 (77,500 ) 8.67 (40,000 ) 8.79 Exercised (20,100 ) 6.50 - - (85,000 ) 6.50 Outstanding at the end of the year 330,000 $ 7.97 277,500 $ 7.60 235,000 8.28 Exercisable options 20,000 $ 7.15 30,000 $ 6.50 20,000 $ 6.50 |
EARNINGS PER SHARE (EPS) (Table
EARNINGS PER SHARE (EPS) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Weighted average number of shares outstanding: | |
Schedule of Earnings per Share | Year ended December 31, 2016 2015 2014 Numerator for EPS: Net income $ 62 $ 5,849 $ 1,432 Denominator for EPS: Weighted average shares outstanding – basic 8,828,444 8,808,344 8,805,495 Dilutive shares 2,320 2,345 21,047 Weighted average shares outstanding – diluted 8,830,764 8,810,689 8,826,542 EPS: Basic and diluted $ 0.01 $ 0.66 $ 0.16 |
TAXES ON INCOME (Tables)
TAXES ON INCOME (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Reconciliation of Tax Provisions to the Domestic and Effective Tax Rate | 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, 2016 2015 2014 Income before taxes on income as reported in the statements of income $ 3,982 $ 5,256 $ 2,525 Statutory tax rate in Israel 25 % 26.5 % 26.5 % Theoretical taxes on income $ 996 $ 1,393 $ 669 Increase (decrease) in taxes on income resulting from: Tax adjustment for foreign subsidiaries subject to a different tax rate 618 224 457 Reduced tax rate on income derived from "Preferred Enterprises" plans 75 146 156 Exempt income (Bargain purchase) - (1,281 ) - Earnings from foreign subsidiaries (1) 2,685 - - Valuation allowance (40 ) (75 ) (100 ) Tax in respect of prior years (151 ) (12 ) (44 ) Other adjustments (200 ) 130 - Permanent differences (118 ) 119 222 Taxes on income as reported in the statements of income $ 3,865 $ 644 $ 1,360 |
Schedule of Income (Loss) from Continuing Operations Before Income Tax Domestic and Foreign | Income before taxes on income is comprised as follows: Year ended December 31, 2016 2015 2014 Domestic (Israel) $ (650 ) $ 3,840 $ (1,659 ) Foreign (United States) 4,632 1,416 4,184 $ 3,982 $ 5,256 $ 2,525 |
Schedule of Components of Income Tax Provision | Taxes on income (tax benefit) included in the statements of income: Year ended December 31, 2016 2015 2014 Current: Domestic (Israel) $ 334 $ 225 $ (94 ) Foreign (United States) 1,792 452 237 2,126 677 143 Deferred: Domestic (Israel) 2,135 (170 ) (36 ) Foreign (United States) (245 ) 149 1,297 1,890 (21 ) 1,261 Previous years: Foreign (United States) (151 ) (12 ) (44 ) (151 ) (12 ) (44 ) $ 3,865 $ 644 $ 1,360 |
Schedule of Deferred Tax Assets and Liabilities | 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, 2016 2015 Deferred tax assets (liabilities): Provision for doubtful accounts $ 102 $ 100 Unrealized gains 138 140 Provisions for employee benefits 476 300 Inventory 1,608 1,114 Goodwill and intangible assets 360 462 Tax credits carryforward 347 693 Capital and state tax losses carryforward 3,409 3,449 Net operating losses carryforward 817 553 Other 237 240 Deferred tax assets, before valuation allowance $ 7,494 $ 7,051 Valuation allowance (3,409 ) (3,449 ) Deferred tax assets, net $ 4,085 $ 3,602 Property, plant and equipment and intangible assets (2,643 ) (2,473 ) Earnings from foreign subsidiaries (1) (2,259 ) - Other temporary differences deferred tax liabilities (225 ) (501 ) Deferred tax liabilities $ (5,127 ) $ (2,974 ) Net $ (1,042 ) $ 628 (1) During 2016, the Company recorded an accrual that related to a deferred tax liability due to the possibility of future distribution of earnings from foreign subsidiaries of the company. |
Schedule of changes in valuation allowance for deferred tax assets | The following table summarizes the changes in the valuation allowance for deferred tax assets: Balance, December 31, 2013 $ 3,306 Addition charged to expenses 268 Balance, December 31,2014 3,574 Deductions charged to expenses (125 ) Balance, December 31,2015 3,449 Deductions charged to expenses (40 ) Balance, December 31,2016 $ 3,409 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Operating Income by Segment | The following financial information is a summary of the operating income of each operational segment: Year ended December 31, 2016 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 Overhaul and coating of jet engine components Other Elimination of inter-company sales Consolidated Revenues Sale of products and services $ 23,515 $ 31,440 $ 31,630 $ 9,209 $ - $ - $ 95,794 Intersegment revenues 4,740 989 - - - (5,729 ) - Total revenues 28,255 32,429 31,630 9,209 (5,729 ) 95,794 Cost of revenues 24,028 23,440 27,423 7,610 - (5,744 ) 76,757 Gross profit 4,227 8,989 4,207 1,599 - 15 19,037 Research and development 758 210 29 143 - - 1,140 Selling and marketing 1,544 1,105 792 435 - - 3,876 General and administrative 2,539 2,915 3,473 1,096 - - 10,023 Other expenses (income) - - - - (138 ) - (138 ) Operating income (loss) $ (614 ) $ 4,759 $ (87 ) $ (75 ) $ 138 $ 15 $ 4,136 Year ended December 31, 2015 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 Overhaul and coating of jet engine components Other Elimination of inter-company sales Consolidated Revenues Sale of products and services $ 23,511 $ 30,526 $ 29,665 $ 1,905 $ - $ - $ 85,607 Intersegment revenues 3,840 475 - - - (4,315 ) - Total revenues 27,351 31,001 29,665 1,905 - (4,315 ) 85,607 Cost of revenues 23,887 22,541 28,474 1,485 - (4,445 ) 71,942 Gross profit 3,464 8,460 1,191 420 - 130 13,665 Research and development 619 264 - 7 - - 890 Selling and marketing 1,270 961 608 64 - - 2,903 General and administrative 1,880 3,000 3,303 286 - - 8,469 Other expenses - - - - 631 - 631 Gain on bargain purchase - - - - (4,833 ) - (4,833 ) Operating income (loss) $ (305 ) $ 4,235 $ (2,720 ) $ 63 $ (4,202 ) $ 130 $ 5,605 Year ended December 31, 2014 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 Elimination of inter-company sales Consolidated Revenues Sale of products and services $ 22,871 $ 30,121 $ 27,734 $ - $ 80,726 Intersegment revenues 5,314 229 - (5,543 ) - Total revenues 28,185 30,350 27,734 (5,543 ) 80,726 Cost of revenues 23,249 23,101 23,502 (5,330 ) 64,522 Gross profit 4,936 7,249 4,232 (213 ) 16,204 Research and development 841 229 - - 1,070 Selling and marketing 1,538 1,058 607 - 3,203 General and administrative 2,717 2,417 2,989 - 8,123 Other income (11 ) - - - (11 ) Operating income (loss) $ (149 ) $ 3,545 $ 636 $ (213 ) $ 3,819 |
Schedule of Assets, Depreciation and Amortization, and Capital Expenditures by Segment | The following financial information identifies the assets, depreciation and amortization, and capital expenditures to segments: Year ended December 31, 2016 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 Overhaul and coating of jet engine components Amounts not allocated to segments Consolidated Total assets 28,885 34,729 27,246 11,616 9,500 111,976 Depreciation and amortization 1,199 898 542 997 - 3,636 Expenditure for segment assets 1,437 1,266 2,686 505 - 5,894 Year ended December 31, 2015 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 Overhaul and coating of jet engine components Amounts not allocated to segments Consolidated Total assets 29,440 28,400 24,170 11,635 15,938 109,583 Depreciation and amortization 1,127 789 669 196 - 2,781 Expenditure for segment assets 1,075 1,400 821 51 - 3,347 Year ended December 31, 2014 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 Amounts not allocated to segments Consolidated Depreciation and amortization 1,027 675 367 - 2,069 Expenditure for segment assets 1,126 810 539 - 2,475 |
ENTITY-WIDE DISCLOSURE (Tables)
ENTITY-WIDE DISCLOSURE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segments, Geographical Areas [Abstract] | |
Schedule of total revenues by geographical location | Total revenues - by geographical location were as follows: Year ended December 31, 2016 2015 2014 Total revenues Total revenues Total revenues Sale of products Israel $ 5,005 $ 4,102 $ 4,807 United states 18,350 20,013 18,886 France 2,495 3,720 3,642 Other 4,581 3,504 4,028 $ 30,431 $ 31,339 $ 31,363 Year ended December 31, 2016 2015 2014 Total revenues Total revenues Total revenues Sale of Services Israel $ 2,665 $ 814 $ 834 United states 39,596 32,738 31,267 Other 23,102 20,716 17,262 $ 65,363 $ 54,268 $ 49,363 |
Schedule of long-lived assets by geographical location | Total long-lived assets - by geographical location were as follows: December 31, 2016 2015 Israel $ 12,349 $ 12,481 United states 8,949 6,453 Total $ 21,298 $ 18,934 |
SUPPLEMENTAL CONSOLIDATED BAL43
SUPPLEMENTAL CONSOLIDATED BALANCE SHEETS INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule of Supplemental Consolidated Balance Sheets Information | Warranty provision Provision for doubtful Accounts Balance, as of December 31, 2013 $ 229 $ 123 Additions 286 107 Deductions (264 ) (105 ) Balance, as of December 31, 2014 251 125 Additions 294 206 Deductions (221 ) - Balance, as of December 31, 2015 324 331 Additions 216 112 Deductions (202 ) (141 ) Balance, as of December 31, 2016 $ 338 $ 302 |
GENERAL (Details)
GENERAL (Details) - TAT-Engineering Subsidiary [Member] | Dec. 31, 2016 | Nov. 25, 2015 |
Subsidiary or Equity Method Investee [Line Items] | ||
Ownership percentage | 51.00% | |
TAT-Engineering Parent [Member] | ||
Subsidiary or Equity Method Investee [Line Items] | ||
Ownership percentage | 49.00% |
SIGNIFICANT ACCOUNTING POLICI45
SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - ₪ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Inventories | ||
Short term bank deposit average interest rate | 0.60% | 0.60% |
Earnings Per Share, Basic and Diluted [Abstract] | ||
Ordinary shares, par value per share | ₪ 0.9 | ₪ 0.9 |
Buildings [Member] | Minimum [Member] | ||
Property, plant and equipment | ||
Estimated useful lives, years | 7 years | |
Buildings [Member] | Maximum [Member] | ||
Property, plant and equipment | ||
Estimated useful lives, years | 39 years | |
Machinery and Equipment [Member] | Minimum [Member] | ||
Property, plant and equipment | ||
Estimated useful lives, years | 3 years | |
Machinery and Equipment [Member] | Maximum [Member] | ||
Property, plant and equipment | ||
Estimated useful lives, years | 17 years | |
Motor Vehicles [Member] | Minimum [Member] | ||
Property, plant and equipment | ||
Estimated useful lives, years | 6 years | |
Motor Vehicles [Member] | Maximum [Member] | ||
Property, plant and equipment | ||
Estimated useful lives, years | 7 years | |
Office Furniture and Equipment [Member] | Minimum [Member] | ||
Property, plant and equipment | ||
Estimated useful lives, years | 3 years | |
Office Furniture and Equipment [Member] | Maximum [Member] | ||
Property, plant and equipment | ||
Estimated useful lives, years | 17 years | |
Software [Member] | Minimum [Member] | ||
Property, plant and equipment | ||
Estimated useful lives, years | 3 years | |
Software [Member] | Maximum [Member] | ||
Property, plant and equipment | ||
Estimated useful lives, years | 5 years |
BUSINESS COMBINATION AND INVE46
BUSINESS COMBINATION AND INVESTMENT IN AN AFFILIATED COMPANY (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 19, 2015 | Mar. 11, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||||
Gain on bargain purchase | $ 4,833 | ||||
Aggregate purchase price | $ 3,624 | ||||
FAVs [Member] | |||||
Business Acquisition [Line Items] | |||||
Investee ownership percentage | 4.90% | 4.90% | 4.90% | ||
Cost method investments | $ 169 | ||||
FAVs [Member] | Piedmont Aviation Component Services LLC Subsidiary [Member] | |||||
Business Acquisition [Line Items] | |||||
Ownership percentage before transaction | 23.18% | ||||
Gain from sale of stock | $ 1,198 | ||||
FAVs [Member] | Class B Common Stock [Member] | Piedmont Aviation Component Services LLC Subsidiary [Member] | |||||
Business Acquisition [Line Items] | |||||
Number of shares sold | 237,932 | ||||
Purchase price per share | $ 8.40 | ||||
Aggregate purchase price | $ 1,999 | ||||
FAVs [Member] | Series A Preferred Stock [Member] | Piedmont Aviation Component Services LLC Subsidiary [Member] | |||||
Business Acquisition [Line Items] | |||||
Number of shares sold | 16,253 | ||||
Purchase price per share | $ 100 | ||||
Aggregate purchase price | $ 1,625 | ||||
Turbochrome Ltd. [Member] | |||||
Business Acquisition [Line Items] | |||||
Ownership percentage acquired | 100.00% | ||||
Maximum additional amounts which to be pay if annual revenue targets meet | $ 2,000 | ||||
Gain on bargain purchase | $ 4,800 | ||||
Earn out consideration paid to date | $ 500 | ||||
Period of commitment to continue the engagement with acquiree''s CEO | 12 months | ||||
Termination Expenses | $ 300 | ||||
Transactions costs | $ 303 | ||||
Turbochrome Ltd. [Member] | Customer relationships [Member] | |||||
Business Acquisition [Line Items] | |||||
Amortization period | 10 years |
BUSINESS COMBINATION AND INVE47
BUSINESS COMBINATION AND INVESTMENT IN AN AFFILIATED COMPANY (Summary of Fair Value of Assets Acquired, Liabilities Assumed, Intangible Assets and Resulting Bargain Purchase) (Details) $ in Thousands | Oct. 19, 2016USD ($) |
Business Combinations [Abstract] | |
Cash and cash equivalents | $ 1,164 |
Inventories | 616 |
Other current assets | 2,169 |
Property, plant and equipment | 6,825 |
Identifiable intangible assets: | |
Customers relationships | 1,342 |
Current liabilities | (2,857) |
Deferred Taxes | (271) |
Accrued severance pay | (15) |
Net Identifiable assets acquired | 8,973 |
Gain from bargain purchase | (4,833) |
Total consideration (including contingent consideration in amount of $640) | 4,140 |
Contingent consideration | $ 640 |
BUSINESS COMBINATION AND INVE48
BUSINESS COMBINATION AND INVESTMENT IN AN AFFILIATED COMPANY (Schedule of Actual Net Sales and Net Income) (Details) $ in Thousands | 2 Months Ended |
Dec. 31, 2016USD ($) | |
Actual Turbochrome results of operations included in the consolidated results of operations: | |
Revenue | $ 1,905 |
Net loss attributable by Turbochrome | $ (163) |
BUSINESS COMBINATION AND INVE49
BUSINESS COMBINATION AND INVESTMENT IN AN AFFILIATED COMPANY (Schedule of Pro forma Financial Information) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Business Combinations [Abstract] | ||
Revenue | $ 92,230 | $ 87,598 |
Net income | $ 801 | $ 1,463 |
Earnings per share: | ||
Basic and Diluted | $ 0.09 | $ 0.17 |
BUSINESS COMBINATION AND INVE50
BUSINESS COMBINATION AND INVESTMENT IN AN AFFILIATED COMPANY (Condensed Financial Information From FAvS Consolidated Balance Sheets and Statements of Operations) (Details) - FAVs [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2014USD ($) | |
Condensed financial information, statements of operations: | |
Net sales | $ 24,442 |
Gross profit | 7,342 |
Income from continuing operations | 827 |
Net income | 727 |
Income attributable to common stockholders | $ 336 |
BUSINESS COMBINATION AND INVE51
BUSINESS COMBINATION AND INVESTMENT IN AN AFFILIATED COMPANY (Reconciliation of the Share in Income (Loss), Impairment of Investment in FAvS and Gain from Dilution) (Details) - FAVs [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2014USD ($) | |
Business Acquisition [Line Items] | |
Share in income related to common stockholders | $ 49 |
Share in income related to preferred stock | 218 |
Net income | $ 267 |
FAIR VALUE MEASUREMENT (Schedul
FAIR VALUE MEASUREMENT (Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Oct. 19, 2016 | Dec. 31, 2015 |
Liabilities: | |||
Contingent liability | $ 640 | ||
Fair Value, Measurements, Recurring [Member] | |||
Liabilities: | |||
Contingent liability | $ 640 | ||
Derivative financial instruments | $ 74 | 14 | |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | |||
Liabilities: | |||
Contingent liability | |||
Derivative financial instruments | |||
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | |||
Assets: | |||
Money market | |||
Liabilities: | |||
Contingent liability | |||
Derivative financial instruments | 74 | 14 | |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | |||
Assets: | |||
Money market | |||
Liabilities: | |||
Contingent liability | 640 | ||
Derivative financial instruments |
FAIR VALUE MEASUREMENT (Sched53
FAIR VALUE MEASUREMENT (Schedule of Assumptions Used in Estimation of Fair Value) (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Assumptions used in estimation of the fair value [Abstract] | |
Volatility | 16.60% |
Expected life | 1 year 3 months |
Risk free interest rate | 0.08% |
FAIR VALUE MEASUREMENT (Sched54
FAIR VALUE MEASUREMENT (Schedule of Reconciliation of Financial Assets and Liabilities Utilizing Level 3 Inputs) (Details) - Level 3 [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Fair value at the beginning of the period | $ 640 | |
Additional resulting from Turbochrome acquisition | 640 | |
Adjustments to the provision resulting from Turbochrome acquisition | (640) | |
Fair value at the end of the period | $ 640 |
FAIR VALUE MEASUREMENT (Narrati
FAIR VALUE MEASUREMENT (Narrative) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value Disclosures [Abstract] | ||
Notional amount of open forward contracts | $ 12,399 | $ 3,638 |
INVENTORY (Narrative) (Details)
INVENTORY (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | ||
Total amount of Rotables | $ 8,345 | $ 7,964 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |||
Raw materials and components | $ 10,715 | $ 9,823 | |
Work in progress | 21,618 | 19,798 | |
Spare parts | 5,743 | 6,340 | |
Finished goods | 1,193 | 703 | |
Total inventory | [1] | $ 39,269 | $ 36,664 |
[1] | The total amount of Rotables included in the company inventory for the years ended December 31, 2016 and 2015 were $8,345 and $7,964, respectively. |
PROPERTY, PLANT AND EQUIPMENT58
PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | $ 61,737 | $ 55,872 | |
Less: Accumulated depreciation | 40,439 | 36,938 | |
Depreciated cost | 21,298 | 18,934 | |
Depreciation expenses | 3,501 | 2,753 | $ 2,069 |
Land and Buildings [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | 11,966 | 11,112 | |
Machinery and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | 46,129 | 41,378 | |
Motor Vehicles [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | 362 | 334 | |
Office Furniture and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | 1,926 | 1,789 | |
Software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | $ 1,354 | $ 1,259 |
INTANGIBLE ASSETS (Schedule of
INTANGIBLE ASSETS (Schedule of Intangible Assets) (Details) - Customer relationships [Member] - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 1,342 | $ 1,342 |
Accumulated amortization | (163) | (28) |
Amortized cost | $ 1,179 | $ 1,314 |
OTHER BALANCE SHEETS SUPPLEME60
OTHER BALANCE SHEETS SUPPLEMENTAL INFORMATION (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Other account payable and accrued expenses: | ||
Employees and payroll accruals | $ 3,386 | $ 2,657 |
Accrued expenses | 838 | 1,081 |
Authorities | 1,722 | 952 |
Advances from customers | 1,861 | 1,295 |
Deferred income | 441 | 240 |
Warranty provision | 338 | 324 |
Contingent consideration | 500 | |
Accrued royalties | 1,176 | 752 |
Hedge instruments | 74 | 14 |
Total other account payable and accrued expenses | $ 9,836 | $ 7,815 |
TRANSACTIONS WITH RELATED PAR61
TRANSACTIONS WITH RELATED PARTIES (Schedule of Transactions with Related Parties) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)ITEM | Dec. 31, 2015USD ($)ITEM | Dec. 31, 2014USD ($)ITEM | |
Senior Management [Member] | |||
Related Party Transaction [Line Items] | |||
Compensation and benefits, including benefit component of option grants | $ | $ 1,464 | $ 1,236 | $ 1,213 |
Number of individuals to which this benefit related | ITEM | 5 | 5 | 5 |
Chairman of the Board [Member] | |||
Related Party Transaction [Line Items] | |||
Compensation and benefits, including benefit component of option grants | $ | $ 167 | $ 173 | $ 188 |
Number of individuals to which this benefit related | ITEM | 1 | 1 | 1 |
Directors [Member] | |||
Related Party Transaction [Line Items] | |||
Compensation and benefits, including benefit component of option grants | $ | $ 161 | $ 161 | $ 131 |
Number of individuals to which this benefit related | ITEM | 6 | 5 | 5 |
LONG-TERM EMPLOYEE-RELATED OB62
LONG-TERM EMPLOYEE-RELATED OBLIGATIONS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Severance payments actually paid | $ 230 | $ 166 | $ 568 |
Expected deposits to be made in the next fiscal year for severance and pension payment obligations | 800 | ||
Deposits made for severance payment obligations | 228 | 389 | |
2,017 | 106 | ||
2,018 | 195 | ||
2,019 | 314 | ||
2,020 | 175 | ||
2,021 | 47 | ||
Thereafter (through 2026) | 383 | ||
Total | 1,220 | ||
Limco Piedmont Inc [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
401(K) profit sharing plan contributions made by company | $ 344 | 261 | 251 |
Percentage of employees contribution matched by employer | 100.00% | ||
Percentage of employees contribution | 2.00% | ||
Percentage of employees contribution matched by employer, two | 50.00% | ||
Percentage of employees contribution, two | 3.00% | ||
TAT and Turbochrome [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Severance pay expenses | $ 777 | $ 554 | $ 555 |
COMMITMENTS AND CONTINGENT LI63
COMMITMENTS AND CONTINGENT LIABILITIES (Commissions and Royalty Commitments) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Commissions arrangements: | |||
Commission expenses | $ 774 | $ 678 | $ 701 |
Royalty commitments: | |||
Royalty expense | 216 | 273 | 270 |
Limco Piedmont Inc [Member] | |||
Royalty commitments: | |||
Royalty expense | $ 1,561 | $ 1,248 | $ 680 |
Limco Piedmont Inc [Member] | Minimum [Member] | |||
Royalty commitments: | |||
Royalties percentage rate for sales of products developed by third parties | 5.00% | ||
Royalties percentage rate for sales of additional products developed by third parties | 20.00% | ||
Limco Piedmont Inc [Member] | Maximum [Member] | |||
Royalty commitments: | |||
Royalties percentage rate for sales of products developed by third parties | 13.00% | ||
TAT Technologies Ltd [Member] | Minimum [Member] | |||
Commissions arrangements: | |||
Percentage rate paid to sales agents for marketing commissions | 2.00% | ||
Royalty commitments: | |||
Royalties percentage rate for sales of products developed by third parties | 12.00% | ||
TAT Technologies Ltd [Member] | Maximum [Member] | |||
Commissions arrangements: | |||
Percentage rate paid to sales agents for marketing commissions | 10.00% | ||
Royalty commitments: | |||
Royalties percentage rate for sales of products developed by third parties | 17.00% |
COMMITMENTS AND CONTINGENT LI64
COMMITMENTS AND CONTINGENT LIABILITIES (Lease Commitments) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Lease commitments: | |||
2,017 | $ 1,019 | ||
2,018 | 1,033 | ||
2,019 | 1,047 | ||
2,020 | 1,078 | ||
2021 and after | 4,708 | ||
Total | 8,885 | ||
TAT Industries [Member] | |||
Lease commitments: | |||
Lease expense | $ 681 | $ 667 | $ 427 |
TAT Technologies Ltd [Member] | Maximum [Member] | |||
Lease commitments: | |||
Lease expiration date | Dec. 31, 2020 | ||
Limco Piedmont Inc [Member] | |||
Lease commitments: | |||
Lease expense | $ 454 | $ 419 | $ 271 |
Limco Piedmont Inc [Member] | Maximum [Member] | |||
Lease commitments: | |||
Lease expiration date | Dec. 31, 2025 |
COMMITMENTS AND CONTINGENT LI65
COMMITMENTS AND CONTINGENT LIABILITIES (Guarantees) (Details) - USD ($) $ in Thousands | Jan. 02, 2017 | Dec. 31, 2016 |
TAT Technologies Ltd [Member] | ||
Guarantees: | ||
Bank guarantee to secure liability to Israeli customs | $ 165 | |
Limco Piedmont Inc [Member] | ||
Guarantees: | ||
Bank guarantee to secure liability to lessor | 668 | |
Turbochrome Ltd. [Member] | ||
Guarantees: | ||
Bank guarantee to secure liability to Israeli customs | $ 260 | |
Turbochrome Ltd. [Member] | Subsequent Event [Member] | ||
Guarantees: | ||
Bank guarantee to secure liability reduce to Israeli customs | $ 130 |
COMMITMENTS AND CONTINGENT LI66
COMMITMENTS AND CONTINGENT LIABILITIES (Vehicle Lease) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Operating Leased Assets [Line Items] | |
2,017 | $ 1,019 |
2,018 | 1,033 |
2,019 | $ 1,047 |
Lease Agreements [Member] | Vehicles [Member] | |
Operating Leased Assets [Line Items] | |
Lessee Leasing Arrangements, Operating Leases, Term of Contract | 3 years |
Monthly lease fees | $ 33 |
2,017 | 253 |
2,018 | 110 |
2,019 | $ 19 |
COMMITMENTS AND CONTINGENT LI67
COMMITMENTS AND CONTINGENT LIABILITIES (Contingent Consideration) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Oct. 19, 2016 | Dec. 31, 2015 | Oct. 19, 2015 |
Loss Contingencies [Line Items] | ||||
Fair value of the contingent considerations | $ 640 | |||
Contingent considerations accrued expenses | $ 500 | |||
Turbochrome Ltd. [Member] | ||||
Loss Contingencies [Line Items] | ||||
Ownership percentage acquired | 100.00% | |||
Fair value of the contingent considerations | 640 | $ 640 | ||
Contingent considerations accrued expenses | 500 | |||
Contingent considerations other long-term liabilities | $ 140 | 140 | ||
Earn-out Payment | $ 500 | |||
Turbochrome Ltd. [Member] | Maximum [Member] | ||||
Loss Contingencies [Line Items] | ||||
Excpected earn-out payment | $ 2,000 |
SHAREHOLDERS' EQUITY (Narrative
SHAREHOLDERS' EQUITY (Narrative) (Details) ₪ / shares in Units, $ / shares in Units, ₪ in Millions, $ in Millions | 1 Months Ended | ||||
Jun. 28, 2016USD ($)$ / shares | Mar. 31, 2014 | Jun. 28, 2016ILS (₪)₪ / shares | Mar. 19, 2014USD ($)$ / shares | Mar. 19, 2014ILS (₪)₪ / shares | |
Shareholder Equity [Line Items] | |||||
Cash dividend declared, amount | $ | $ 3 | $ 2 | |||
Cash dividend declared, value per share | $ / shares | $ 0.34 | $ 0.22 | |||
Cash dividend declared, declaration date | Jun. 28, 2016 | Mar. 19, 2014 | |||
Cash dividend declared, record date | Jul. 28, 2016 | Apr. 21, 2014 | |||
Cash dividend declared, payment date | Aug. 9, 2016 | May 7, 2014 | |||
ILS [Member] | |||||
Shareholder Equity [Line Items] | |||||
Cash dividend declared, amount | ₪ | ₪ 11.5 | ₪ 6.9 | |||
Cash dividend declared, value per share | ₪ / shares | ₪ 1.3 | ₪ 0.76 |
SHAREHOLDERS' EQUITY (Stock Opt
SHAREHOLDERS' EQUITY (Stock Option Plans TAT Technology) (Details) $ / shares in Units, $ in Thousands | Nov. 30, 2014$ / sharesshares | Mar. 19, 2014$ / sharesshares | Jun. 30, 2012 | Jun. 28, 2012$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2016₪ / shares | Dec. 28, 2016$ / sharesshares | Nov. 03, 2016$ / sharesshares | Jun. 23, 2016$ / sharesshares | Mar. 29, 2016$ / sharesshares | Dec. 31, 2015₪ / shares | Oct. 01, 2015$ / sharesshares | Jul. 01, 2015$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Ordinary shares, par value per share | ₪ / shares | ₪ 0.9 | ₪ 0.9 | |||||||||||||
Number of options | |||||||||||||||
Options, beginning | shares | 277,500 | 235,000 | 145,000 | ||||||||||||
Options, Granted | shares | 250,000 | 120,000 | 215,000 | ||||||||||||
Options, Forfeited | shares | (177,400) | (77,500) | (40,000) | ||||||||||||
Exercised | shares | (20,100) | (85,000) | |||||||||||||
Options, ending | shares | 330,000 | 277,500 | 235,000 | ||||||||||||
Exercisable at end of year | shares | 20,000 | 30,000 | 20,000 | ||||||||||||
Weighted average exercise price | |||||||||||||||
Options, beginning | $ / shares | $ 7.60 | $ 8.28 | $ 6.50 | ||||||||||||
Options, Granted | $ / shares | 8.10 | 7.15 | 8.66 | ||||||||||||
Options, Forfeited | $ / shares | 7.56 | 8.67 | 8.79 | ||||||||||||
Exercised | $ / shares | 6.50 | 6.50 | |||||||||||||
Options, ending | $ / shares | 7.97 | 7.60 | 8.28 | ||||||||||||
Exercisable at end of year | $ / shares | 7.15 | 6.50 | 6.50 | ||||||||||||
Weighted-average grant-date fair value of options granted | $ / shares | $ 1.42 | $ 1.25 | $ 1.13 | ||||||||||||
2012 Plan [Member] | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Number of shares authorized for the plan | shares | 380,000 | 60,000 | 50,000 | 100,000 | 40,000 | 40,000 | 80,000 | ||||||||
Vesting period for plan | 3 years | 4 years | |||||||||||||
Ordinary shares, par value per share | $ / shares | $ 0.9 | ||||||||||||||
Exercise price | $ / shares | $ 10 | $ 7.34 | $ 7.54 | $ 7.63 | $ 7.15 | $ 7.15 | |||||||||
Dividend yield | 5.00% | 5.00% | |||||||||||||
Number of options | |||||||||||||||
Options, Granted | shares | 20,000 | 195,000 | |||||||||||||
Weighted average exercise price | |||||||||||||||
Options, Granted | $ / shares | $ 7.34 | $ 8.79 | |||||||||||||
Aggregate intrinsic value | $ | $ 332 | $ 27 | $ 0 | ||||||||||||
Unrecognized compensation cost related to non-vested stock options | $ | $ 306 | ||||||||||||||
Unrecognized compensation weighted average period of recognition, years | 1 year 1 month 21 days | ||||||||||||||
Period in which equity exceeds threshold | 4 years | ||||||||||||||
2012 Plan [Member] | Minimum [Member] | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Number of shares authorized for the plan | shares | 300,000 | ||||||||||||||
Expected stock price volatility | 37.70% | 35.07% | 37.23% | ||||||||||||
Expected option life, years | 3 years | 3 years | 2 years 10 months 13 days | ||||||||||||
Risk free interest rate | 0.92% | 0.92% | 0.48% | ||||||||||||
Dividend yield | 5.00% | ||||||||||||||
2012 Plan [Member] | Maximum [Member] | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Number of shares authorized for the plan | shares | 680,000 | ||||||||||||||
Expected stock price volatility | 40.30% | 38.97% | 39.14% | ||||||||||||
Expected option life, years | 5 years 6 months | 4 years | 4 years | ||||||||||||
Risk free interest rate | 1.79% | 1.39% | 1.34% | ||||||||||||
Dividend yield | 4.60% | ||||||||||||||
2012 Plan [Member] | Vest upon the lapse of 12 months [Member] | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Vesting percentage | 25.00% | ||||||||||||||
2012 Plan [Member] | Vest on a quarterly basis [Member] | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Vesting period for plan | 3 years | ||||||||||||||
Vesting percentage | 75.00% |
EARNINGS PER SHARE (EPS) (Detai
EARNINGS PER SHARE (EPS) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Numerator for EPS: | |||
Net income | $ 62 | $ 5,849 | $ 1,432 |
Denominator for EPS: | |||
Weighted average shares outstanding - basic | 8,828,444 | 8,808,344 | 8,805,495 |
Dilutive shares | 2,320 | 2,345 | 21,047 |
Weighted average shares outstanding - diluted | 8,830,764 | 8,810,689 | 8,826,542 |
EPS | |||
Basic and diluted | $ 0.01 | $ 0.66 | $ 0.16 |
Anti-dilutive options excluded from calculation of diluted income (loss) per share | 220,000 | 295,000 | 175,000 |
TAXES ON INCOME (Narrative) (De
TAXES ON INCOME (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Jan. 31, 2017 | Jan. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2012 | Dec. 31, 2011 | |
Income Taxes [Line Items] | |||||||
Preferred Income tax rate not within Development Zone A | 12.00% | 16.00% | 15.00% | 15.00% | |||
Preferred Income tax rate for Development Zone A | 6.00% | 9.00% | 10.00% | 10.00% | |||
Maximum tax rate on dividends distributed from Preferred Income. | 15.00% | ||||||
Corporate tax rate for Israel | 25.00% | 26.50% | 26.50% | ||||
U.S. subsidiaries tax rate, federal and state | 38.00% | 38.00% | 38.00% | ||||
Deferred tax asset, state operating loss carryforward | $ 3,409 | $ 3,449 | |||||
Deferred tax asset, capital loss carryforward | 347 | $ 693 | |||||
Tax Year 2017 [Member] | |||||||
Income Taxes [Line Items] | |||||||
Reduction of corporate tax rate | 24.00% | ||||||
Tax Year 2018 [Member] | |||||||
Income Taxes [Line Items] | |||||||
Reduction of corporate tax rate | 23.00% | ||||||
Subsequent Event [Member] | |||||||
Income Taxes [Line Items] | |||||||
Reduction of corporate tax rate | 25.00% | ||||||
Uniform tax rate for Development Zone A | 7.50% | ||||||
U.S. Subsidiary [Member] | |||||||
Income Taxes [Line Items] | |||||||
Deferred tax asset, state operating loss carryforward | $ 1,454 | ||||||
TAT Technologies Ltd [Member] | |||||||
Income Taxes [Line Items] | |||||||
Preferred Income tax rate not within Development Zone A | 16.00% | 16.00% | 16.00% | 15.00% | 15.00% | ||
Deferred tax asset, capital loss carryforward | $ 1,495 | ||||||
Turbo chrome [Member] | |||||||
Income Taxes [Line Items] | |||||||
Preferred Income tax rate for Development Zone A | 9.00% | 9.00% | 9.00% | 10.00% | 10.00% |
TAXES ON INCOME (Schedule of Re
TAXES ON INCOME (Schedule of Reconciliation of Tax Provisions to the Domestic and Effective Tax Rate) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Income Tax Disclosure [Abstract] | ||||
Income before Income Taxes | $ 3,982 | $ 5,256 | $ 2,525 | |
Statutory tax rate in Israel | 25.00% | 26.50% | 26.50% | |
Theoretical taxes on income | $ 996 | $ 1,393 | $ 669 | |
Increase (decrease) in taxes on income resulting from: | ||||
Tax adjustment for foreign subsidiaries subject to a different tax rate | 618 | 224 | 457 | |
Reduced tax rate on income derived from "Preferred Enterprises" plans | 75 | 146 | 156 | |
Exempt income (Bargain purchase) | (1,281) | |||
Earnings from foreign subsidiaries | [1] | 2,685 | ||
Valuation allowance | (40) | (75) | (100) | |
Tax in respect of prior years | (151) | (12) | (44) | |
Other adjustments | (200) | 130 | ||
Permanent differences | (118) | 119 | 222 | |
Taxes on income as reported in the statements of income | $ 3,865 | $ 644 | $ 1,360 | |
[1] | During 2016, the Company recorded an accrual that related to a deferred tax liability due to actual distribution of earnings from foreign subsidiaries of the Company and due to the possibility of future distribution of earnings from such foreign subsidiaries. |
TAXES ON INCOME (Schedule of In
TAXES ON INCOME (Schedule of Income (Loss) from Continuing Operations Before Income Tax Domestic and Foreign) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Domestic (Israel) | $ (650) | $ 3,840 | $ (1,659) |
Foreign (United States) | 4,632 | 1,416 | 4,184 |
Income before taxes on income | $ 3,982 | $ 5,256 | $ 2,525 |
TAXES ON INCOME (Schedule of Co
TAXES ON INCOME (Schedule of Components of Income Tax Provision) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current: | |||
Domestic (Israel) | $ 334 | $ 225 | $ (94) |
Foreign (United States) | 1,792 | 452 | 237 |
Total current | 2,126 | 677 | 143 |
Deferred: | |||
Domestic (Israel) | 2,135 | (170) | (36) |
Foreign (United States) | (245) | 149 | 1,297 |
Total deferred | 1,890 | (21) | 1,261 |
Previous Years: | |||
Foreign (United States) | (151) | (12) | (44) |
Total previous years | (151) | (12) | (44) |
Taxes on income as reported in the statements of income | $ 3,865 | $ 644 | $ 1,360 |
TAXES ON INCOME (Schedule of De
TAXES ON INCOME (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Deferred tax assets (liabilities): | |||||
Provision for doubtful accounts | $ 102 | $ 100 | |||
Unrealized gains | 138 | 140 | |||
Provisions for employee benefits | 476 | 300 | |||
Inventory | 1,608 | 1,114 | |||
Goodwill and intangible assets | 360 | 462 | |||
Tax credits carryforward | 347 | 693 | |||
Capital and state tax losses carryforward | 3,409 | 3,449 | |||
Net operating losses carryforward | 817 | 553 | |||
Other | 237 | 240 | |||
Deferred tax assets, before valuation allowance | 7,494 | 7,051 | |||
Valuation allowance | (3,409) | (3,449) | $ (3,574) | $ (3,306) | |
Deferred tax assets, net | 4,085 | 3,602 | |||
Property, plant and equipment and intangible assets | (2,643) | (2,473) | |||
Earnings from foreign subsidiaries | [1] | (2,259) | |||
Other temporary differences deferred tax liabilities | (225) | (501) | |||
Deferred tax liabilities | (5,127) | (2,974) | |||
Net | $ (1,042) | $ 628 | |||
[1] | During 2016, the Company recorded an accrual that related to a deferred tax liability due to the possibility of future distribution of earnings from foreign subsidiaries of the company. |
TAXES ON INCOME (Schedule of Ch
TAXES ON INCOME (Schedule of Changes in Valuation Allowance) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Changes in Valuation Allowance | |||
Balance | $ 3,449 | $ 3,574 | $ 3,306 |
Deductions charged to expenses | (40) | (125) | 268 |
Balance | 3,409 | $ 3,449 | $ 3,574 |
Investments In Foreign Subsidiaries And Foreign Corporate Joint Ventures That Are Permanent In Nature [Member] | |||
Changes in Valuation Allowance | |||
Undistributed earnings of foreign subsidiaries | 1,746 | ||
The amount of deferred tax liability that would be recorded if foreign earnings were distributed by cash dividend | $ 402 | ||
Tax rate on recognized foreign earnings dividends | 23.00% |
SEGMENT INFORMATION (Schedule o
SEGMENT INFORMATION (Schedule of Operating Income By Segment) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Revenues | $ 95,794 | $ 85,607 | $ 80,726 |
Cost of revenues | 76,757 | 71,942 | 64,522 |
Gross profit | 19,037 | 13,665 | 16,204 |
Research and development | 1,140 | 890 | 1,070 |
Selling and marketing | 3,876 | 2,903 | 3,203 |
General and administrative | 10,023 | 8,469 | 8,123 |
Other expenses (income) | (138) | 631 | (11) |
Gain on bargain purchase | (4,833) | ||
Operating income | 4,136 | 5,605 | 3,819 |
Oem Of Heat Transfer Solutions And Aviation Accessories [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Revenues | 28,255 | 27,351 | 28,185 |
Cost of revenues | 24,028 | 23,887 | 23,249 |
Gross profit | 4,227 | 3,464 | 4,936 |
Research and development | 758 | 619 | 841 |
Selling and marketing | 1,544 | 1,270 | 1,538 |
General and administrative | 2,539 | 1,880 | 2,717 |
Other expenses (income) | (11) | ||
Operating income | (614) | (305) | (149) |
MRO Services for heat transfer components and OEM of heat transfer solutions [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Revenues | 32,429 | 31,001 | 30,350 |
Cost of revenues | 23,440 | 22,541 | 23,101 |
Gross profit | 8,989 | 8,460 | 7,249 |
Research and development | 210 | 264 | 229 |
Selling and marketing | 1,105 | 961 | 1,058 |
General and administrative | 2,915 | 3,000 | 2,417 |
Other expenses (income) | |||
Operating income | 4,759 | 4,235 | 3,545 |
MRO Services for Aviation Components [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Revenues | 31,630 | 29,665 | 27,734 |
Cost of revenues | 27,423 | 28,474 | 23,502 |
Gross profit | 4,207 | 1,191 | 4,232 |
Research and development | 29 | ||
Selling and marketing | 792 | 608 | 607 |
General and administrative | 3,473 | 3,303 | 2,989 |
Other expenses (income) | |||
Operating income | (87) | (2,720) | 636 |
Overhaul and Coating of Jet Engine Components [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Revenues | 9,209 | 1,905 | |
Cost of revenues | 7,610 | 1,485 | |
Gross profit | 1,599 | 420 | |
Research and development | 143 | 7 | |
Selling and marketing | 435 | 64 | |
General and administrative | 1,096 | 286 | |
Operating income | (75) | 63 | |
Other Segments [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Other expenses (income) | (138) | 631 | |
Gain on bargain purchase | (4,833) | ||
Operating income | 138 | (4,202) | |
Sale of Products and Services [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Revenues | 95,794 | 85,607 | 80,726 |
Sale of Products and Services [Member] | Oem Of Heat Transfer Solutions And Aviation Accessories [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Revenues | 23,515 | 23,511 | 22,871 |
Sale of Products and Services [Member] | MRO Services for heat transfer components and OEM of heat transfer solutions [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Revenues | 31,440 | 30,526 | 30,121 |
Sale of Products and Services [Member] | MRO Services for Aviation Components [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Revenues | 31,630 | 29,665 | 27,734 |
Sale of Products and Services [Member] | Overhaul and Coating of Jet Engine Components [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Revenues | 9,209 | 1,905 | |
Intersegment Revenues [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Revenues | |||
Intersegment Revenues [Member] | Oem Of Heat Transfer Solutions And Aviation Accessories [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Revenues | 4,740 | 3,840 | 5,314 |
Intersegment Revenues [Member] | MRO Services for heat transfer components and OEM of heat transfer solutions [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Revenues | 989 | 475 | 229 |
Intersegment Revenues [Member] | MRO Services for Aviation Components [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Revenues | |||
Intersegment Revenues [Member] | Overhaul and Coating of Jet Engine Components [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Revenues | |||
Intersegment Elimination [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Revenues | (5,729) | (4,315) | (5,543) |
Cost of revenues | (5,744) | (4,445) | (5,330) |
Gross profit | 15 | 130 | (213) |
Research and development | |||
Selling and marketing | |||
General and administrative | |||
Other expenses (income) | |||
Operating income | 15 | 130 | (213) |
Intersegment Elimination [Member] | Sale of Products and Services [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Revenues | |||
Intersegment Elimination [Member] | Intersegment Revenues [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Revenues | $ (5,729) | $ (4,315) | $ (5,543) |
SEGMENT INFORMATION (Schedule78
SEGMENT INFORMATION (Schedule of Assets, Depreciation and Amortization, and Capital Expenditures by Segment) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Assets | $ 111,977 | $ 109,583 | |
Depreciation expenses | 3,636 | 2,781 | $ 2,069 |
Expenditure for segment assets | 5,894 | 3,347 | 2,475 |
Oem Of Heat Transfer Solutions And Aviation Accessories [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Assets | 28,885 | 29,440 | |
Depreciation expenses | 1,199 | 1,127 | 1,027 |
Expenditure for segment assets | 1,437 | 1,075 | 1,126 |
MRO Services for heat transfer components and OEM of heat transfer solutions [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Assets | 34,729 | 28,400 | |
Depreciation expenses | 898 | 789 | 675 |
Expenditure for segment assets | 1,266 | 1,400 | 810 |
MRO Services for Aviation Components [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Assets | 27,246 | 24,170 | |
Depreciation expenses | 542 | 669 | 367 |
Expenditure for segment assets | 2,686 | 821 | 539 |
Overhaul and Coating of Jet Engine Components [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Assets | 11,616 | 11,635 | |
Depreciation expenses | 997 | 196 | |
Expenditure for segment assets | 505 | 51 | |
Segment Reconciling Items [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Assets | $ 9,500 | $ 15,938 | |
Depreciation expenses | |||
Expenditure for segment assets |
ENTITY-WIDE DISCLOSURE (Schedul
ENTITY-WIDE DISCLOSURE (Schedule of Total Revenues by Geographical Location) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenues - sale of products | $ 30,431 | $ 31,339 | $ 31,363 |
Total revenues - sale of services | 65,363 | $ 54,268 | 49,363 |
Number of customers accounting for more than 10% of total net revenue | |||
Israel | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenues - sale of products | 5,005 | $ 4,102 | 4,807 |
Total revenues - sale of services | 2,665 | 814 | 834 |
United states [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenues - sale of products | 18,350 | 20,013 | 18,886 |
Total revenues - sale of services | 39,596 | 32,738 | 31,267 |
France [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenues - sale of products | 2,495 | 3,720 | 3,642 |
Other [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenues - sale of products | 4,581 | 3,504 | 4,028 |
Total revenues - sale of services | $ 23,102 | $ 20,716 | $ 17,262 |
ENTITY-WIDE DISCLOSURE (Sched80
ENTITY-WIDE DISCLOSURE (Schedule of Long-Lived Assets by Geographical Location) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-Lived Assets | $ 21,298 | $ 18,934 |
Israel | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-Lived Assets | 12,349 | 12,481 |
United states [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-Lived Assets | $ 8,949 | $ 6,453 |
SUPPLEMENTAL CONSOLIDATED BAL81
SUPPLEMENTAL CONSOLIDATED BALANCE SHEETS INFORMATION (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Warranty provision [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance, beginning | $ 324 | $ 251 | $ 229 |
Additions | 216 | 294 | 286 |
Deductions | (202) | (221) | (264) |
Balance, ending | 338 | 324 | 251 |
Provision for doubtful Accounts [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance, beginning | 331 | 125 | 123 |
Additions | 112 | 206 | 107 |
Deductions | (141) | (105) | |
Balance, ending | $ 302 | $ 331 | $ 125 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - $ / shares | Mar. 06, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Subsequent Event [Line Items] | ||||
Options, Granted | 250,000 | 120,000 | 215,000 | |
Exercise price | $ 8.10 | $ 7.15 | $ 8.66 | |
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Options, Granted | 30,000 | |||
Exercise price | $ 8.9 |