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TAT TECHNOLOGIES LTD

TAT TECHNOLOGIES LTDTATT決算レポート

Nasdaq · 産業 · 航空機エンジン及びエンジン部品

TAT Technologies Ltd. is a publicly traded company, headquartered in the United States, providing environmental control products and services for the commercial and military aviation industries. Its shares are traded on the NASDAQ Capital Market and on the Tel Aviv Stock Exchange.

What changed in TAT TECHNOLOGIES LTD's 20-F — 2023 vs 2024

Top changes in TAT TECHNOLOGIES LTD's 2024 20-F

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Item 2. Properties

Properties — owned and leased real estate

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Item 2. Offer Statistics and Expected Timetable 3 Item 3. Key Information 3 A. Selected Financial Data 3 B. Capitalization and Indebtedness 3 C. Reasons for the Offer and Use of Proceeds 3 D. Risk Factors 3 Item 4. Information on the Company 16 A. Business Overview 17 B. Government Regulations 33 C. Property, Plants and Equipment 34
Item 2. Offer Statistics and Expected Timetable 4 Item 3. Key Information 4 A. Selected Financial Data 4 B. Capitalization and Indebtedness 4 C. Reasons for the Offer and Use of Proceeds 4 D. Risk Factors 4 Item 4. Information on the Company 27 A. Business Overview 27 B. Government Regulations 30 C. Organizational Structure 60 D.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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A foreign private issuer that elects to follow a home country practice instead of such requirements must submit to NASDAQ in advance a written statement from an independent counsel in such issuer’s home country certifying that the issuer’s practices are not prohibited by the home country’s laws.
A foreign private issuer that elects to follow a home country practice instead of NASDAQ requirements must submit to NASDAQ in advance a written statement from an independent counsel in such issuer’s home country certifying that the issuer’s practices are not prohibited by the home country’s laws.
TAT and its subsidiaries may not be able to receive in a timely manner, or at all, all the required permits for which they may apply in the future. Similarly, many countries have laws according to which the export of certain military products, technical designs and spare parts require the prior approval of, or export license from, their governments.
TAT and its subsidiaries may not be able to receive in a timely manner, or at all, all the required permits for which they may apply in the future. 10 Similarly, many countries have laws according to which the export of certain military products, technical designs and spare parts require the prior approval of, or export license from, their governments.
If TAT is unable to overcome these competitive disadvantages, then TAT’s business, financial condition and results of operations would be adversely affected. 6 TAT derives a material share of its revenues from few major customers. If TAT loses any of these customers or they reduce the amount of business they do with TAT, TAT’s revenues may be seriously affected.
If TAT is unable to overcome these competitive disadvantages, then TAT’s business, financial condition and results of operations would be adversely affected. TAT derives a material share of its revenues from few major customers. If TAT loses any of these customers or they reduce the amount of business they do with TAT, TAT’s revenues may be seriously affected.
As a result, any material disruption of TAT’s day-to-day operations could have a material adverse effect on its business, customer relations and profitability. TAT relies on its Kiryat Gat, Israel, Kernersville and Greensboro, North Carolina and Tulsa, Oklahoma facilities for the manufacture of its OEM products and provision of its MRO services.
As a result, any material disruption of TAT’s day-to-day operations could have a material adverse effect on its business, customer relations and profitability. TAT relies on its facilities in Kiryat Gat, Israel, Kernersville and Greensboro, North Carolina and Tulsa, Oklahoma for the manufacture of its OEM products and provision of its MRO services.
Unless we develop new offerings or enhance our existing offerings, we may be susceptible to loss of market share resulting from the introduction of new or enhanced offerings by competitors. 8 TAT may face significant risks in the management of its inventory, while failure to effectively manage its inventory levels may result in supply imbalances that could harm its business We maintain an inventory of exchangeable units of heat transfer solutions, aviation accessories, aviation components, APUs, landing gears, engine blades and coating materials and other spare parts related to our products and services in various locations, including with third party logistics providers.
Unless we develop new offerings or enhance our existing offerings, we may be susceptible to loss of market share resulting from the introduction of new or enhanced offerings by competitors. 12 TAT may face significant risks in the management of its inventory, while failure to effectively manage its inventory levels may result in supply imbalances that could harm its business We maintain an inventory of exchangeable units of heat transfer solutions, aviation accessories, aviation components, APUs, landing gears, engine blades and coating materials and other spare parts related to our products and services in various locations, including with third party logistics providers.
If TAT loses any of these customers or they reduce the amount of business they do with TAT, TAT’s revenues may be seriously affected. A part of the revenues of TAT and its subsidiaries are from contracts with the U.S. and Israeli governments and are subject to special risks.
If TAT loses any of these customers or they reduce the amount of business they do with TAT, TAT’s revenues may be seriously affected. 9 A part of the revenues of TAT and its subsidiaries are from contracts with the U.S. and Israeli governments and are subject to special risks.
To manufacture, sell and service parts used in aircrafts, TAT and its subsidiaries must be certified or accepted by the FAA, EASA, the United States Department of Defense and comparable agencies in other countries and by leading original equipment manufacturers (“OEMs”).
To manufacture, sell and service parts used in aircrafts, TAT and its subsidiaries must be certified, accepted by the FAA, EASA, the United States Department of Defense, comparable agencies in other countries and/or by the original equipment manufacturers (“OEMs”).
This revenue concentration is subject to various risks, including: • Governmental embargoes or foreign trade restrictions; • Changes in U.S. and foreign governmental regulations; • Changes in foreign exchange rates; • Tariffs; • Other trade barriers; • Political, economic and social instability; and • Difficulties collecting accounts receivable.
This revenue concentration is subject to various risks, including: • Governmental embargoes or foreign trade restrictions; 13 • Changes in U.S. and foreign governmental regulations; • Changes in foreign exchange rates; • Tariffs; • Other trade barriers; • Political, economic and social instability; and • Difficulties collecting accounts receivable.
Prior to initiating sales proposals for the export of these products and know-how and to the actual shipment of such products or know-how, TAT and its subsidiaries must obtain permits from the Ministry of Defense.
Prior to initiating sales proposals for the export of these products and know-how and to the actual shipment of such products or know-how, TAT and its subsidiaries must obtain permits from the Israeli Ministry of Defense.
Due to such sanctions, during 2022 and 2023 our joint venture in Russia ceased to purchase heat-exchange cores from Limco, our US subsidiary, and therefore the joint venture had to materially limit the extent of the MRO services it provides to its customers. Rapid technological changes may adversely affect the market acceptance of TAT's products.
Due to such sanctions, during 2024, 2023 and 2022 our joint venture in Russia ceased to purchase heat-exchange cores from Limco, our US subsidiary, and therefore the joint venture had to materially limit the extent of the MRO services it provides to its customers. 15 Rapid technological changes may adversely affect the market acceptance of TAT's products.
In addition, TAT may not be able to pass on increased costs to its customers. • TAT depends on its key executives; it may not be able to hire and retain additional key employees or successfully integrate new members of its team; the loss of key employees could have a material adverse effect on TAT’s business. • TAT depends on its manufacturing and MRO facilities and any material damage to these facilities may adversely impact TAT’s operations. • TAT uses equipment that is not easily repaired or replaced, and therefore material equipment failures could cause TAT or its subsidiaries to be unable to meet quality or delivery expectations of its customers. • TAT may fail to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002. • TAT has potential exposure to liabilities arising under environmental laws and regulations. • TAT is exposed to potential liabilities arising from product liability and warranty claims. • Significant disruptions of TAT’s information technology systems or breaches of its data security could adversely affect TAT’s business. • TAT’s activity in Israel may be adversely affected by a change in the exchange rate of the NIS against the dollar.
In addition, TAT may not be able to pass on increased costs to its customers. 5 • TAT depends on its key executives; it may not be able to hire and retain additional key employees or successfully integrate new members of its team; the loss of key employees could have a material adverse effect on TAT’s business. • TAT depends on its manufacturing and MRO facilities and any material damage to these facilities may adversely impact TAT’s operations. • TAT uses equipment that is not easily repaired or replaced, and therefore material equipment failures could cause TAT or its subsidiaries to be unable to meet quality or delivery expectations of its customers. • TAT may fail to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002. • TAT has potential exposure to liabilities arising under environmental laws and regulations. • TAT is exposed to potential liabilities arising from product liability and warranty claims. • Significant disruptions of TAT’s information technology systems or breaches of its data security could adversely affect TAT’s business. • TAT’s activity in Israel may be adversely affected by a change in the exchange rate of the NIS against the U.S Dollars.
TAT may be subject to requests from customers for cost sharing or pricing adjustments as a part of their commercial relationships, even though the customers had previously agreed to bear these risks. 12 Significant disruptions of our information technology systems or breaches of our data security could adversely affect our business.
TAT may be subject to requests from customers for cost sharing or pricing adjustments as a part of their commercial relationships, even though the customers had previously agreed to bear these risks. 19 Significant disruptions of our information technology systems or breaches of our data security could adversely affect our business.
To date, we are not aware that we have experienced any loss of, or disruption to, material information as a result of any such malware or cyber-attack. TAT’s activity in Israel may be adversely affected by a change in the exchange rate of the NIS against the dollar.
To date, we are not aware that we have experienced any loss of, or disruption to, material information as a result of any such malware or cyber-attack. TAT’s activity in Israel may be adversely affected by a change in the exchange rate of the NIS against the U.S dollar.
TAT’s business operations and facilities are subject to various federal, state, and local laws and regulations related to the environment, including, but not limited to, regulations that govern the discharge of pollutants and hazardous substances into the air and water and the handling, storage and disposal of such materials.
TAT’s business operations and facilities are subject to various federal, state, and local laws and regulations related to the environment, including, but not limited to, regulations that govern the discharge of pollutants and hazardous substances into the air and water, as well as the handling, storage and disposal of such materials.
Risks Relating to Our Location in Israel • Because TAT has significant operations in Israel, TAT may be subject to political, economic and other conditions affecting Israel that could increase TAT’s operating expenses and disrupt TAT’s business. • TAT’s results of operations may be negatively affected by the obligation of its personnel to perform military service. • Your rights and responsibilities as a shareholder are governed by Israeli law and may differ in some respects from the rights and responsibilities of shareholders under U.S. law. • Israeli law may delay, prevent or make difficult an acquisition of TAT, which could prevent a change of control and, therefore, depresses the price of TAT’s shares. • Investors and TAT’s shareholders generally may have difficulties enforcing a U.S. judgment against TAT, TAT’s executive officers and directors or asserting U.S. securities laws claims in Israel. • As a foreign private issuer whose shares are listed on NASDAQ, TAT may follow certain home country corporate governance practices instead of certain NASDAQ requirements.
Risks Relating to Our Location in Israel • Because TAT has significant operations in Israel, TAT may be subject to political, economic and other conditions affecting Israel that could increase TAT’s operating expenses and disrupt TAT’s business. • The war in Israel and other conditions in Israel could materially affect TAT’s business. 6 • TAT’s results of operations may be negatively affected by the obligation of its personnel to perform military service. • Your rights and responsibilities as a shareholder are governed by the Israeli law and may differ in some respects from the rights and responsibilities of shareholders under U.S. law. • Israeli law may delay, prevent or make difficult an acquisition of TAT, which could prevent a change of control and, therefore, depresses the price of TAT’s shares. • Investors and TAT’s shareholders generally may have difficulties enforcing a U.S. judgment against TAT, TAT’s executive officers and directors in Israel or the United States, or asserting U.S. securities laws claims in Israel. • As a foreign private issuer whose shares are listed on the NASDAQ, TAT may follow certain home country corporate governance practices instead of certain NASDAQ requirements.
Our backlog includes purchase orders received from our customers for our products or services and our estimation of the maximum potential revenues that are expected to be derived from frame agreements with our customers over the life of the contract or 10 years – the lowest of the two.
Our backlog includes purchase orders received from our customers for our products or services and our estimation of the maximum potential revenues that are expected to be derived from frame agreements with our customers over the life of the contract or 10 years – the lower of the two.
Our independent registered public accounting firm is not required to perform an audit of our internal controls over financial reporting as of December 31, 2023. TAT has potential exposure to liabilities arising under environmental laws and regulations.
Our independent registered public accounting firm is not required to perform an audit of our internal controls over financial reporting as of December 31, 2024. TAT has potential exposure to liabilities arising under environmental laws and regulations.
Any such disruption in TAT’s operations could adversely affect TAT’s business. Since October 7, 2023, the Israel Defense Force (IDF) has called up more than 350,000 of its reserve forces to serve. A significant number of our management and non-management employees are currently subject to military service in the IDF and many of them have been called to serve.
Any such disruption in TAT’s operations could adversely affect TAT’s business. Since October 7, 2023, the IDF has called up more than 350,000 of its reserve forces to serve. A significant number of our management and non-management employees are currently subject to military service in the IDF and many of them have been called to serve.
Risks Relating to Our Location in Israel Because TAT has significant operations in Israel, TAT may be subject to political, economic and other conditions affecting Israel (including the ongoing war and hostilities with Hamas and Hezbollah) that could increase TAT’s operating expenses and disrupt TAT’s business. TAT is incorporated under the laws of the State of Israel.
Risks Relating to Our Location in Israel Because TAT has significant operations in Israel, TAT may be subject to political, economic and other conditions affecting Israel (including the ongoing war and hostilities with Hamas, Hezbollah, the Houthi Movement and Iran) that could increase TAT’s operating expenses and disrupt TAT’s business TAT is incorporated under the laws of the State of Israel.
Because exchange rates between the NIS and the dollar fluctuate continuously, exchange rate fluctuations, particularly larger periodic devaluations, may have an impact on TAT’s profitability and period to period comparisons of TAT’s results.
Because exchange rates between the NIS and the U.S dollar fluctuate continuously, exchange rate fluctuations, particularly larger periodic devaluations, may have an impact on TAT’s profitability and period to period comparisons of TAT’s results.
TAT’s financial statements are stated in dollars, while a portion of TAT’s expenses in Israel, primarily labor expenses, are incurred in NIS and a portion of its revenues are quoted in NIS and in Euro. Additionally, certain assets, as well as a portion of TAT’s liabilities, are denominated in NIS.
TAT’s financial statements are stated in dollars, while a portion of TAT’s expenses in Israel, primarily labor expenses, are incurred in NIS and a portion of our revenues are quoted in NIS and in Euro. Additionally, certain assets, as well as a portion of TAT’s liabilities, are denominated in NIS.
Because exchange rates between the NIS and the dollar fluctuate continuously, exchange rate fluctuations, particularly larger periodic devaluations, may have an impact on TAT’s profitability and period to period comparisons of TAT’s results.
As exchange rates between the NIS and the dollar fluctuate continuously, exchange rate fluctuations, particularly larger periodic devaluations, may have an impact on TAT’s profitability and period to period comparisons of TAT’s results.
TAT’s ordinary shares have experienced significant market price and volume fluctuations in the past and may experience significant market price and volume fluctuations in the future, in response to factors such as the following, some of which are beyond TAT’s control: • Quarterly variations in TAT’s operating results; • Operating results that vary from the expectations of securities analysts and investors; • Changes in expectations as to TAT’s future financial performance, including financial estimates by securities analysts and investors; • Announcements of technological innovations or new products by TAT or TAT’s competitors; • Announcements by TAT or TAT’s competitors of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments; • Announcements by third parties of significant claims or proceedings against us; • Additions or departures of key personnel; • Future sales of TAT’s ordinary shares by the Company (such as the issuance and sale in December 2023) or by our controlling shareholders or others; • The effects of the war and hostilities between Israel and Hamas and Israel and Hezbollah; • De-listing of TAT’s shares from NASDAQ and/or from the TASE; • Stock market price and volume fluctuation; • Legal proceedings against TAT or its controlling shareholders; and • Regulatory actions by securities authorities which impacts TAT’s interaction with securities analysts and institutional investors. 13 Equity stock markets can undergo extreme price and volume fluctuations.
TAT’s ordinary shares have experienced significant market price and volume fluctuations in the past and may experience significant market price and volume fluctuations in the future, in response to factors such as the following, some of which are beyond TAT’s control: • Quarterly variations in TAT’s operating results; • Operating results that vary from the expectations of securities analysts and investors; • Changes in expectations as to TAT’s future financial performance, including financial estimates by securities analysts and investors; • Announcements of technological innovations or new products by TAT or TAT’s competitors; • Announcements by TAT or TAT’s competitors of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments; • Announcements by third parties of significant claims or proceedings against us; • Additions or departures of key personnel; • Future sales of TAT’s ordinary shares by the Company (such as the issuance and sale in December 2023) or by our controlling shareholders or others; • The effects of the war and hostilities between Israel and Hamas, Hezbollah and Iran; • De-listing of TAT’s shares from NASDAQ and/or from the TASE; • Stock market price and volume fluctuation; • Legal proceedings against TAT or its controlling shareholders; and 21 • Regulatory actions by securities authorities which impacts TAT’s interaction with securities analysts and institutional investors.
If any of our products are defective, we could be required to redesign or recall those products or pay substantial damages or warranty claims. Such an event could result in significant expenses, disrupt sales and damage our reputation and that of our products and services.
If any of our products are defective, we could be required to redesign or recall those products or pay substantial damages or warranty claims. Such an event could result in significant expenses, disrupt sales, and damage both TAT’s reputation and that of its products and services.
TAT’s results may be adversely affected by the devaluation of the NIS in relation to the dollar (or if such devaluation is on a lagging basis), if TAT’s revenues in NIS are higher than TAT’s expenses in NIS and/ or the value of TAT’s assets in NIS are higher than TAT’s liabilities in NIS.
TAT’s results may be adversely affected by the devaluation of the NIS in relation to the U.S dollar (or if such devaluation is on a lagging basis), particularly if TAT’s revenues in NIS are higher than TAT’s expenses in NIS and/or if the value of TAT’s assets in NIS is higher than TAT’s liabilities in NIS.
Israeli law provides that these duties are applicable in shareholder votes on, among other things, amendments to a company’s articles of association, increases in a company’s authorized share capital, mergers and interested party transactions requiring shareholder approval.
The Companies Law provides that these duties are applicable in shareholder votes on, among other things, amendments to a company’s articles of association, increases in a company’s authorized share capital, mergers and interested party transactions requiring shareholder approval.
Your rights and responsibilities as a shareholder are governed by Israeli law and may differ in some respects from the rights and responsibilities of shareholders under U.S. law. TAT is incorporated under Israeli law. The rights and responsibilities of holders of TAT’s ordinary shares are governed by TAT’s memorandum of association, articles of association and by Israeli law.
Your rights and responsibilities as a shareholder are governed by Israeli law and may differ in some respects from the rights and responsibilities of shareholders under U.S. law. TAT is incorporated under Israeli law. The rights and responsibilities of holders of TAT’s ordinary shares are governed by TAT’s articles of association and by the Israeli Companies Law (as defined below).
Future acquisitions by TAT could result in the following, any of which could materially harm TAT’s results of operations or the price of TAT’s ordinary shares: • Issuance of equity securities that would dilute TAT’s shareholders’ percentages of ownership; • Large one-time write-offs; • The incurrence of debt and contingent liabilities; • Difficulties in the assimilation and integration of operations, personnel, technologies, products and information systems of the acquired companies; • Diversion of management’s attention from other business activities and concerns; • Contractual disputes; • Risks of entering geographic and business markets in which TAT has no or only limited prior experience; and • Potential loss of key employees of acquired organizations.
Future acquisitions may require substantial capital resources, which may require TAT to seek additional debt or equity financing. 14 Future acquisitions by TAT could result in the following, any of which could materially harm TAT’s results of operations or the price of TAT’s ordinary shares: • Issuance of equity securities that would dilute TAT’s shareholders’ percentages of ownership; • Large one-time write-offs; • The incurrence of debt and contingent liabilities; • Difficulties in the assimilation and integration of operations, personnel, technologies, products and information systems of the acquired companies; • Diversion of management’s attention from other business activities and concerns; • Contractual disputes; • Risks of entering geographic and business markets in which TAT has no or only limited prior experience; and • Potential loss of key employees of acquired organizations.
TAT may not be able to recoup future increases in the cost of wages and raw materials required for its operations through price increases for its products. We are impacted by inflationary increases in wages and cost of raw materials.
TAT may face increased labor and raw materials costs. TAT may not be able to recoup future increases in the cost of wages and raw materials required for its operations through price increases for its products. We are impacted by inflationary increases in wages and cost of raw materials.
From time to time, we enter into hedging transactions to attempt to limit the impact of foreign currency fluctuations. However, the protection provided by such hedging transactions may be partial and leave certain exchange rate-related losses and risks uncovered. Therefore, our business and profitability may be harmed by such exchange rate fluctuations.
From time to time, we enter into hedging transactions to attempt to limit the impact of foreign currency fluctuations. However, the protection provided by such hedging transactions may be partial and leave certain exchange rate-related losses and risks uncovered.
TAT may not succeed in obtaining customer approval to re-price a particular product and may not be able to recoup previous losses resulting from incomplete or inaccurate engineering data. In addition, as costs increase, TAT may not be able to pass on such increased costs to other customers. This could materially impact TAT’s profitability.
TAT may not succeed in obtaining customer approval to re-price a particular product and may not be able to recoup previous losses resulting from incomplete or inaccurate engineering data. In addition, as costs increase, TAT may not be able to pass on such increased costs to other customers.
Compliance with such laws as they relate to the handling, storage and disposal of hazardous substances is a significant obligation for TAT at each of its facilities.
Compliance with such laws as they relate to the handling, storage and disposal of hazardous substances is a significant obligation for TAT across all of its facilities.
Sales to the U.S. and Israeli governments accounted for approximately 8.3%, 6.3% and 5.6% of TAT’s revenues on a consolidated basis for the years ended December 31, 2023, 2022 and 2021, respectively.
Sales to the U.S. and Israeli governments accounted for approximately 12.4%, 8.3% and 6.3% of TAT’s revenues on a consolidated basis for the years ended December 31, 2024, 2023 and 2022, respectively.
As a foreign private issuer whose shares are listed on NASDAQ, TAT is permitted to follow certain home country corporate governance practices instead of certain requirements of the NASDAQ Marketplace Rules.
As a foreign private issuer whose shares are listed on the NASDAQ Capital Market, we are permitted to follow certain home country corporate governance practices instead of certain requirements of The NASDAQ Marketplace Rules.
A successful claim brought against TAT or its subsidiaries in excess of its available insurance coverage may have a material adverse effect on TAT’s business. In addition, contractual disputes over warranties can arise in the ordinary course of business.
A successful claim brought against TAT or its subsidiaries in excess of its available insurance coverage may have a material adverse effect on TAT’s business. Furthermore, contractual disputes over warranties can occur during ordinary course of business.
TAT faces special risks from international sales operations which may have a material adverse effect on TAT’s business, operating results and financial condition. In the years ending December 31, 2023, 2022 and 2021, approximately 93%, 92% and 89% of TAT’s sales, respectively, resulted from TAT’s operations out of Israel.
TAT faces special risks from international sales operations which may have a material adverse effect on TAT’s business, operating results and financial condition. In the years ending December 31, 2024, 2023 and 2022, approximately 94%, 93% and 92% of TAT’s sales, respectively, resulted from TAT’s international sales (i.e., excluding Israel).
TAT’s major competitors in the area of MRO services for heat transfer components are the service divisions of OEMs, including Honeywell-Lori, Honeywell Secan, Honeywell Singapore, Collins Aerospace Malaysia, Collins Aerospace Maastricht, and Liebherr Aerospace Saline, in addition to the in-house maintenance services of various commercial airlines and other independent service providers, including Triumph Accessory Services, Drake Air – Ametek, American Cooler Service – Aviation Technical Services, Lufthansa Technik and Elite Aerospace, a division of Meggitt.
TAT’s major competitors in the area of MRO services for heat transfer components are the MRO Divisions of OEMs, including Honeywell, Honeywell Secan, Honeywell Singapore, Collins Aerospace Malaysia, Collins Aerospace Maastricht, and Liebherr Aerospace Saline, in addition to the in-house maintenance services of various commercial airlines and other independent service providers, including AAR, Drake Air – Ametek, American Cooler Service – Aviation Technical Services, Lufthansa Technik and Parker Hannifin.
(“FIMI” or the “FIMI Funds”), beneficially own together 52% of TAT’s outstanding shares. If FIMI sells a substantial number of TAT’s ordinary shares or if there is a perception that FIMI may sell a substantial number of TAT’s ordinary shares, the market price of TAT’s ordinary shares may decline.
(“FIMI” or the “FIMI Funds”), beneficially own together approximately 26.6% of TAT’s issued and outstanding shares. If FIMI sells a substantial number of TAT’s ordinary shares or if there is a perception that FIMI may sell a substantial number of TAT’s ordinary shares, the market price of TAT’s ordinary shares may decline.
Failure by TAT to meet the quality or delivery expectations of its customers could lead to the loss of one or more of its significant customers. TAT may fail to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002. The Sarbanes-Oxley Act of 2002 imposes certain duties on TAT and its executives and directors.
Failure by TAT to meet the quality or delivery expectations of its customers could lead to the loss of one or more of its significant customers. 17 TAT may fail to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002.
Market fluctuations, as well as political and economic conditions, such as a recession, interest rate or currency rate fluctuations and political events or hostilities in or surrounding Israel, could adversely affect the market price of TAT’s ordinary shares.
Equity stock markets can undergo extreme price and volume fluctuations. Market fluctuations, as well as political and economic conditions, such as a recession, interest rate or currency rate fluctuations and political events or hostilities in or surrounding Israel, could adversely affect the market price of TAT’s ordinary shares.
Any major hostilities involving Israel, a full or partial mobilization of reserve forces of the Israeli army, the interruption or curtailment of trade between Israel and its present trading partners, or a significant downturn in the economic or financial condition of Israel could have a material adverse effect on TAT’s business, financial condition and results of operations.
Any major hostilities involving Israel, a full or partial mobilization of reserve forces of the Israeli army, the interruption or curtailment of trade between Israel and its present trading partners, or a significant downturn in the economic or financial condition of Israel could have a material adverse effect on TAT’s business, financial condition and results of operations. 22 Since its establishment in 1948, Israel and its Arab neighbors have engaged in a number of armed conflicts.
In that case, the value of our ordinary shares could decline, and you could lose all or part of your investment. 3 Risks Related to Our Business and Our Industry • The aerospace industry is subject to significant regulation and oversight, and TAT and its subsidiaries may incur significant fines, penalties and costs if TAT and its subsidiaries do not comply with these regulations. • TAT competes with a number of established companies in all aspects of TAT’s business, many of which have significantly greater resources or capabilities than TAT. • TAT derives a material share of its revenues from few major customers.
Risks Related to Our Business and Our Industry • The aerospace industry is subject to significant regulation and oversight, and TAT and its subsidiaries may incur significant fines, penalties and costs if TAT and its subsidiaries do not comply with these regulations. • TAT competes with a number of established companies in all aspects of TAT’s business, many of which have significantly greater resources or capabilities than TAT. 4 • TAT derives a material share of its revenues from few major customers.
TAT’s major competitors in the area of overhaul and coating of jet engine components are the service divisions of OEMs, the in-house maintenance services of various commercial airlines and other independent service providers, including Safran, General Electric, GKN, PAS MCT Japan and others. With respect to masking materials, TAT's major competitors are APV Coatings, Praxair, Saint-Gobain and others.
TAT’s major competitors in the area of overhaul and coating of jet engine components are the service divisions of OEMs, the in-house maintenance services of various commercial airlines and other independent service providers, including Safran, General Electric, GKN, PAS MCT Japan and others.
Many of TAT’s service and manufacturing processes are dependent on equipment that is not easily repaired or replaced. As a result, unexpected equipment failures could result in production delays or the manufacture of defective products. TAT’s ability to meet its customers’ expectations with respect to on-time delivery of repaired components or quality OEM products is critical.
As a result, unexpected equipment failures could result in production delays or the manufacture of defective products. TAT’s ability to meet its customers’ expectations with respect to on-time delivery of repaired components or quality OEM products is critical.
There can be no assurance that TAT will not experience material product liability losses in the future, that it will not incur significant costs to defend such claims, that, although TAT maintains product liability insurance, its insurance coverage will be adequate if claims were to arise or that it would be able to maintain insurance coverage in the future at an acceptable cost.
In addition, although TAT maintains product liability insurance, there can be no assurance that its insurance coverage will be adequate if claims arise or that it would be able to maintain insurance coverage in the future at an acceptable cost.
Risk Factors Related to Our Ordinary Shares TAT’s share price has been volatile in the past and may decline in the future.
Risk Factors Related to Our Ordinary Shares • TAT’s share price has been volatile in the past and may decline in the future. • Substantial future sales of TAT’s ordinary shares by TAT’s principal shareholders may depress TAT’s share price.
TAT depends on its key executives; it may not be able to hire and retain additional key employees or successfully integrate new members of its team; the loss of key employees could have a material adverse effect on TAT’s business. TAT’s success depends to a large extent on the experience and expertise of its senior management.
This could materially impact TAT’s profitability. 16 TAT depends on its key executives; it may not be able to hire and retain additional key employees or successfully integrate new members of its team; the loss of key employees could have a material adverse effect on TAT’s business.
If TAT and its subsidiaries or its partners and suppliers are unable to receive all the required permits and/or licenses in a timely manner, or at all, TAT’s revenues may decrease. 7 TAT depends on a limited number of suppliers of components for certain of its products and if TAT or any of its subsidiaries are unable to obtain these components when needed, they would experience delays in manufacturing their products and TAT’s financial results could be adversely affected.
TAT depends on a limited number of suppliers of components for certain of its products and if TAT or any of its subsidiaries are unable to obtain these components when needed, they would experience delays in manufacturing their products and TAT’s financial results could be adversely affected.
In the future, new and more demanding government regulations may be adopted or industry oversight may be increased. TAT and its subsidiaries may have to incur significant additional costs to achieve compliance with new regulations or to reacquire a revoked or suspended license or approval, which could materially reduce profitability.
TAT and its subsidiaries may have to incur significant additional costs to achieve compliance with new regulations or to reacquire a revoked or suspended license or approval, which could materially reduce profitability.
As a result of the current geopolitical tensions and conflict between Russia and Ukraine, and the invasion by Russia of Ukraine, the governments of the United States, EU, Japan and other jurisdictions have announced the imposition of sanctions on certain industry sectors and parties in Russia and certain impacted regions, as well as enhanced export controls on certain products and industries.
As a result of the Russia’s invasion to the Ukraine, governments of the United States, EU, Japan and other jurisdictions have announced the imposition of sanctions on specific industry sectors and entities in Russia and certain affected regions, as well as enhanced export controls on certain products and industries.
Furthermore, once integrated, acquisitions may not achieve comparable levels of revenues, profitability or productivity as TAT’s existing business or otherwise perform as expected. The occurrence of any of these events could harm TAT’s business, financial condition or results of operations. Future acquisitions may require substantial capital resources, which may require TAT to seek additional debt or equity financing.
Furthermore, once integrated, acquisitions may not achieve comparable levels of revenues, profitability or productivity as TAT’s existing business or otherwise perform as expected. The occurrence of any of these events could harm TAT’s business, financial condition or results of operations.
As a result of the current geopolitical tensions and conflict between Russia and Ukraine, and the invasion by Russia of Ukraine, the governments of the United States, EU, Japan and other jurisdictions have announced the imposition of sanctions on certain industry sectors and parties in Russia and certain impacted regions, as well as enhanced export controls on certain products and industries.
As a result of Russia’s invasion to the Ukraine, governments in the United States, EU, Japan and other jurisdictions have announced the imposition of sanctions on specific industry sectors and entities in Russia and certain affected regions, as well as enhanced export controls on certain products and industries.
We also compete with the in-house service divisions of large commercial airlines where there is a strong incentive for an airline to fully-utilize the services of its maintenance employees and facilities.
For example, we compete with the service divisions of large OEMs which are able to derive significant brand recognition from their OEM manufacturing activities. We also compete with the in-house service divisions of large commercial airlines where there is a strong incentive for an airline to fully-utilize the services of its maintenance employees and facilities.
Furthermore, strategic partnerships in emerging markets are accompanied by risks inherent to those markets, such as an increased probability of a partner defaulting on obligations or losing a partner with important insights in that region.
If one of our strategic partners becomes subject to investigation, sanctions or liability, TAT might be adversely affected. Furthermore, strategic partnerships in emerging markets are accompanied by risks inherent to those markets, such as an increased probability of a partner defaulting on obligations or losing a partner with important insights in that region.
Any member of TAT’s senior management may choose to end his or her employment with TAT and seek employment with others for any reason.
TAT’s success depends to a large extent on the experience and expertise of its senior management. Any member of TAT’s senior management may choose to end his or her employment with TAT and seek employment with others for any reason.
Restrictive laws or policies directed towards Israel or Israeli companies may have an adverse impact on TAT’s operations, TAT’s financial results or the expansion of TAT’s business. TAT’s results of operations may be negatively affected by the obligation of its personnel to perform military service.
Restrictive laws or policies directed towards Israel or Israeli companies may have an adverse impact on TAT’s operations, TAT’s financial results or the expansion of TAT’s business.
TAT’s efforts to comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (“SOX”) governing internal controls and procedures for financial reporting have resulted in increased general and administrative expenses and a diversion of management time and attention. TAT expects these efforts to require the continued commitment of significant resources.
The Sarbanes-Oxley Act of 2002 (“SOX”) imposes certain duties on TAT and its executives and directors. TAT’s efforts to comply with the requirements of Section 404 of the SOX, governing internal controls and procedures for financial reporting, have led to increased general and administrative expenses and a diversion of management time and attention.
These include: (i) Manufacturers based in the United States, such as the Hughes-Treitler division of Ametek Inc., Boyd Corporation, Collins Aerospace, Honeywell International, and Triumph Thermal Systems; (ii) Manufacturers based in Europe such as HS Marston Aerospace Ltd., a subsidiary of Collins Aerospace, Secan and Liebherr-Aerospace Toulouse S.A.; and (iii) Manufacturers based in Asia such as Sumitomo Precision Products from Japan. 5 Many of TAT’s competitors are far larger, have substantially greater resources than TAT, including technical, financial, research and development, marketing and distribution capabilities, and enjoy greater market recognition.
These include: (i) Manufacturers based in the United States, such as the Hughes-Treitler division of Ametek Inc., Boyd Corporation, Collins Aerospace, Honeywell International, and Triumph Thermal Systems; 7 (ii) Manufacturers based in Europe such as HS Marston Aerospace Ltd., a subsidiary of Collins Aerospace, Secan and Liebherr-Aerospace Toulouse S.A.; and (iii) Manufacturers based in Asia such as Sumitomo Precision Products from Japan.
Since its establishment in 1948, Israel and its Arab neighbors have engaged in a number of armed conflicts. A state of hostility, varying from time to time in intensity and degree, has led to security and economic challenges for Israel. Major hostilities between Israel and its neighbors may hinder Israel’s international trade and lead to economic downturn.
A state of hostility, varying from time to time in intensity and degree, has led to security and economic challenges for Israel. Major hostilities between Israel and its neighbors may hinder Israel’s international trade and lead to economic downturn. This, in turn, could have a material adverse effect on TAT’s operations and business.
TAT competes with a number of established companies in all aspects of TAT’s business, many of which have significantly greater resources or capabilities than TAT. TAT’s major competitors in the area of OEM heat transfer solutions and aviation accessories, are other OEMs who manufacture heat transfer solutions.
TAT faces competition from several well-established companies, many of which possess greater resources and capabilities than TAT’s major competitors in the area of OEM heat transfer solutions and aviation accessories, are other OEMs who manufacture heat transfer solutions.
In addition, a foreign private issuer must disclose in its annual reports filed with the SEC or on its website each such requirement that it does not follow and describe the home country practice followed by the issuer instead of any such requirement.
In addition, a foreign private issuer must disclose in its annual reports filed with the SEC each such requirement that it does not follow and describe the home country practice followed by the issuer instead of any such requirement. Accordingly, our shareholders may not be afforded the same protection as provided under NASDAQ’s corporate governance rules. 26
Following the attack, Israel’s security cabinet declared war against Hamas and a military campaign against these terrorist organizations commenced in parallel to their continued rocket and terror attacks. Following the attack by Hamas on Israel’s southern border, Hezbollah in Lebanon has also launched missile, rocket, and shooting attacks against Israeli military sites, troops, and Israeli towns in northern Israel.
Following the attack by Hamas on Israel’s southern border, Hezbollah in Lebanon has also launched missile, rocket, and shooting attacks against Israeli military sites, troops, and Israeli towns in northern Israel. In response to these attacks, the Israeli army has carried strikes on sites belonging to Hezbollah in Lebanon.
If any of our material certifications, authorizations or approvals are revoked or suspended, then the operations of TAT or its subsidiaries, as the case may be, will be significantly curtailed and TAT and its subsidiaries could be subjected to significant fines and penalties.
If any of our material certifications, authorizations or approvals are revoked or suspended, the operations of TAT or its subsidiaries, could be subjected to significant fines and penalties. In the future, new and more demanding government regulations may be adopted or industry oversight may be increased.
Hamas also launched extensive rocket attacks on Israeli population and industrial centers located along Israel’s border with the Gaza Strip and in other areas within the State of Israel. These attacks resulted in extensive deaths, injuries and kidnapping of civilians and soldiers.
In October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Hamas also launched extensive rocket attacks on Israeli population and industrial centers located along Israel’s border with the Gaza Strip and in other areas within the State of Israel.
TAT may identify material weaknesses or significant deficiencies in its assessments of its internal controls over financial reporting.
TAT expects these compliance efforts will continue to require commitment of significant resources. As part of these efforts, TAT may identify material weaknesses or significant deficiencies in its assessments of its internal controls over financial reporting.
Our business, prospects, financial condition and results of operations could be adversely affected due to any of the following risks.
Our business, prospects, financial condition and results of operations could be adversely affected due to any of the following risks. In that case, the value of our ordinary shares could decline, and you could lose all or part of your investment.
A war or terrorist act, fire, flood, earthquake or other disaster or condition that significantly damaged or destroyed any of these facilities would have a material adverse effect on the operations of TAT. 11 TAT uses equipment that is not easily repaired or replaced, and therefore material equipment failures could cause TAT or its subsidiaries to be unable to meet quality or delivery expectations of its customers.
A war or terrorist act, fire, flood, earthquake or other disaster or condition that significantly damaged or destroyed any of these facilities would have a material adverse effect on the operations of TAT.
The adoption of new laws and regulations, stricter enforcement of existing laws and regulations, the discovery of previously unknown contamination or the imposition of new cleanup requirements could require TAT to incur costs and become subject to new or increased liabilities that could increase TAT’s operating costs and adversely affect the manner in which we conduct our business.
The adoption of new laws and regulations, stricter enforcement of existing laws and regulations, discovery of previously unknown contamination or the imposition of new cleanup requirements could require TAT to incur costs and become subject to new or increased liabilities that could increase TAT’s operating costs and adversely affect the manner in which we conduct our business. 18 Under certain environmental laws, liability associated with an investigation or remediation of hazardous substances can arise from a broad range of properties, including properties currently or formerly operated by TAT or any of its predecessors, as well as properties to which TAT sent hazardous substances or wastes for treatment, storage, or disposal.
Our business, financial condition, results of operations and prospects may be materially harmed if disagreements develop with our partners. Our ability to withdraw funds and dividends from these entities may depend on the consent of partners. If one of our strategic partners becomes subject to investigation, sanctions or liability, TAT might be adversely affected.
Our actions with respect to these affiliated companies may be partially restricted by shareholders agreements entered into with our strategic partners. Our business, financial condition, results of operations and prospects may be materially harmed if disagreements arise with our partners. Additionally, our ability to withdraw funds and dividends from these entities may depend on the consent of such partners.
For example, in November 2015, we signed a joint venture agreement with Russian-based Engineering, to establish a new facility for the provision of MRO services for heat transfer components in Russia and the Commonwealth of Independent States (“CIS”). 10 Our actions with respect to these affiliated companies may be restricted to some degree by shareholder agreements entered into with our strategic partners.
Our strategic partnerships and relationships carry inherent business risks. We may participate in strategic partnerships and joint ventures in a various countries. For example, we have signed a joint venture agreement with the Russian-based company engineering, to establish a new facility for the provision of MRO services for heat transfer components in Russia and the Commonwealth of Independent States (“CIS”).
Under certain environmental laws, such liability may be imposed jointly and severally, so TAT may be responsible for more than its proportionate share and may even be responsible for the entire liability at issue. The extent of any such liability can be difficult to predict. TAT is exposed to potential liabilities arising from product liability and warranty claims.
Under certain environmental laws, such liability may be imposed jointly and severally, meaning that TAT could be held responsible for more than its proportionate share of liability, and, in some cases, may even be responsible for the entire liability at issue.
In addition, Israel faces threats from more distant neighbors, in particular, Iran which has threatened to attack Israel, may be developing nuclear weapons and has targeted cyber-attacks against Israeli entities, and terrorist groups in Yemen, which are threatening to limit the movement of marine shipments to Israel through the Red Sea. 14 Currently TAT’s continues its business and operations but the intensity and duration of Israel’s current war against Hamas is difficult to predict, as are such war’s economic implications on our business and operations and on Israel's economy in general.
In addition, Israel faces threats from more distant neighbors, in particular, Iran which attacked Israel, may be developing nuclear weapons and has targeted cyber-attacks against Israeli entities, and terrorist groups in Yemen, which attached Israel and limited the movement of marine shipments to Israel through the Red Sea.
Increased costs associated with supplied materials or components could increase TAT’s costs and reduce TAT’s profitability if TAT is unable to pass these cost increases on to its customers. TAT may face increased labor and raw materials costs.
Increased costs associated with supplied materials or components could increase TAT’s costs and reduce TAT’s profitability if TAT is unable to pass these cost increases on to its customers. 11 TAT may be affected by changes in government trade policies and international trade disputes that result in tariffs and other protectionist measures could adversely affect our business in the future.
Five customers accounted for approximately 28.46%, 26.4% and 27.8% of TAT’s revenues for the years ended December 31, 2023, 2022 and 2021, respectively. TAT’s major customers may not maintain the same volume of business with TAT in the future.
Five customers accounted for approximately 29.9%, 28.46% and 26.4% of TAT’s revenues for the years ended December 31, 2024, 2023 and 2022, respectively. TAT has a single customer of MRO that accounted for approximately 12.8%, 12.6% and 8.4% of TAT’s revenues for the years ended December 31, 2024, 2023 and 2022, respectively.
For example, Israel’s corporate governance or laws require that TAT obtain shareholder approval for certain dilutive events, such as for the establishment or amendment of certain equity-based compensation plans, an issuance that will result in a change of control of TAT, certain transactions other than a public offering involving issuances of a 20% or more interest in TAT and certain acquisitions of the stock or assets of another company, which are not required by NASDAQ.
As a foreign private issuer listed on the NASDAQ Capital Market, we may also follow home country practice with regard to, among other things, the requirement to obtain shareholder approval for certain dilutive events (such as for an issuance that will result in a change of control of the company, certain transactions other than a public offering involving issuances of a 20% or more interest in the company and certain acquisitions of the stock or assets of another company).
However, Israeli law currently does not define the substance of this duty of fairness. Because Israeli corporate law has undergone extensive revision in recent years, there is relatively little case law available to assist in understanding the implications of these provisions that govern shareholder behavior.
Because Israeli corporate law has undergone extensive revision in recent years, there is relatively little case law available to assist in understanding the implications of these provisions that govern shareholder behavior. 24 Israeli law may delay, prevent or make difficult an acquisition of TAT, which could prevent a change of control and, therefore, depresses the price of TAT’s shares.
Because exchange rates between the NIS and the dollar fluctuate continuously, exchange rate fluctuations, particularly larger periodic devaluations, may have an impact on TAT’s profitability and period to period comparisons of TAT’s results. 4 Risk Factors Related to Our Ordinary Shares • TAT’s share price has been volatile in the past and may decline in the future. • Substantial future sales of TAT’s ordinary shares by TAT’s principal shareholders may depress TAT’s share price.
As exchange rates between the NIS and the U.S dollar fluctuate continuously, such fluctuations, particularly larger periodic devaluations, may have an impact on TAT’s profitability and period-to-period comparisons of TAT’s results.
Due to such sanctions, our subsidiary Limco, has ceased selling its products to customers in Russia.
Due to such sanctions, our subsidiary Limco, has ceased selling its products to customers in Russia. Although our business in Russia is limited in scope, these restrictions may lead to a reduction of our sales and adversely impact our financial results.
These competitors may be able to achieve greater economies of scale and may be less vulnerable to price competition than TAT. In addition, some of those companies are considered to be tier one suppliers offering customers a wider range of systems and products, in addition to heat transfer solutions, as a bundle.
Additionally, some of these companies are recognized as tier one suppliers, offering the customers a broader range of systems and products, alongside heat transfer solutions, as a complete package. TAT may struggle to provide its products as part of integrated systems to the same degree as its competitors.
Competition in the MRO market is based on price, quality, engineering solutions, breadth of services, and the ability to perform repairs and overhauls rapidly. A number of our competitors have inherent competitive advantages. For example, we compete with the service divisions of large OEMs which are able to derive significant brand recognition from their OEM manufacturing activities.
With respect to masking materials, TAT's major competitors are APV Coatings, Praxair, Saint-Gobain and others. 8 Competition in the MRO market is based on turn-around-time, price, capacity, quality, engineering solutions, and breadth of services. A number of our competitors have inherent competitive advantages.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Further, Turbochrome’s competitors may have additional competitive advantages, such as: • The ability to adapt faster to changes in customer requirements and industry conditions or trends; • Better name recognition; • Ability to bundle jet engine and other aircraft components; • Stronger relationships with customers, OEMs and suppliers; • Lower cost structure; • Regional support near customers’ location; • Access to greater marketing resources; • Access to superior technology; • Greater access to capital; and • Greater resources which allow for better turnaround time Competitive Strengths We believe that TAT’s success can be attributed to several critical factors, including the following: • Engaging in Pro-active Account Management efforts to preserve its customer base in existing projects, while working to broaden and increase its involvement with such clients. • Conducting marketing activities aimed at penetrating new geographical markets and winning new customers, while taking advantage of the unique knowledge and expertise that TAT and its subsidiaries have gained in various areas. • Entering into additional related operating segments that will enable TAT and its subsidiaries to fulfill their growth potential. • Providing customers with the best value, including competitive prices, by tailoring comprehensive service packages that combine the design and planning of an OEM component, the manufacture of such component, and the provision of maintenance services. • Extending MRO capabilities in order to establish a ‘one-stop-shop’ center for comprehensive MRO services for the types of aircraft Limco and/or Piedmont and/or Turbochrome target. • Enhancing our engineering capabilities in order to support customer needs related to new projects and in order to certify MRO services that differ from processes previously approved by the FAA, EASA or other regulatory authorities.
Further, Turbochrome’s competitors may have additional competitive advantages, such as: • The ability to adapt faster to changes in customer requirements and industry conditions or trends; • Better name recognition; • Ability to bundle jet engine and other aircraft components; • Stronger relationships with customers, OEMs and suppliers; • Lower cost structure; • Regional support near customers’ location; • Access to greater marketing resources; • Access to superior technology; • Greater access to capital; and • Greater resources which allow for better turnaround time Competitive Strengths We believe that TAT’s success can be attributed to several critical factors, including the following: • Engaging in Pro-active Account Management efforts to preserve its customer base in existing projects, while working to broaden and increase its involvement with such clients. 52 • Conducting marketing activities aimed at penetrating new geographical markets and winning new customers, while taking advantage of the unique knowledge and expertise that TAT and its subsidiaries have gained in various areas. • Entering into additional related operating segments that will enable TAT and its subsidiaries to fulfill their growth potential. • Providing customers with the best value, including competitive prices, by tailoring comprehensive service packages that combine the design and planning of an OEM component, the manufacture of such component, and the provision of maintenance services. • Extending MRO capabilities in order to establish a ‘one-stop-shop’ center for comprehensive MRO services for the types of aircraft Limco and/or Piedmont and/or Turbochrome target. • Enhancing our engineering capabilities in order to support customer needs related to new projects and in order to certify MRO services that differ from processes previously approved by the FAA, EASA or other regulatory authorities.
MRO contracts with these types of customers are generally long-term engagements and may have terms of one to five years or more. 18 Limco enjoys a strong reputation among customers for its competitive pricing and fast turnaround time. It is recognized by leading OEMs of aerospace products to provide MRO services for their heat transfer solutions.
MRO contracts with these types of customers are generally long-term engagements and may have terms of one to five years or more. Limco enjoys a strong reputation among customers for its competitive pricing and fast turnaround time. It is recognized by leading OEMs of aerospace products to provide MRO services for their heat transfer solutions.
We believe that establishing and maintaining customer relationships with our MPG shop is an important factor in achieving sustainable success as an independent MRO service provider and creates a competitive advantage. 24 Overhaul and Coating of Jet Engine Components Through its subsidiary, Turbochrome, TAT provides MRO services for jet engine components to the aerospace industry.
We believe that establishing and maintaining customer relationships with our MPG shop is an important factor in achieving sustainable success as an independent MRO service provider and creates a competitive advantage. Overhaul and Coating of Jet Engine Components Through its subsidiary, Turbochrome, TAT provides MRO services for jet engine components to the aerospace industry.
As previously mentioned, the demand for MRO services is driven by the size and age of the aircraft fleet, aircraft utilization and regulations by the FAA and other governmental authorities. Due to increased maintenance costs of their aging fleets many carriers are seeking ways to reduce costs, minimize down-time, increase aircraft reliability and extend time between overhauls.
As previously mentioned, the demand for MRO services is driven by the size and age of the aircraft fleet, aircraft utilization and regulations by the FAA and other governmental authorities. 41 Due to increased maintenance costs of their aging fleets many carriers are seeking ways to reduce costs, minimize down-time, increase aircraft reliability and extend time between overhauls.
Many of TAT’s military contracts are awarded on a competitive basis based on technical merit, personnel qualifications, experience and price. TAT also receives some contract awards involving special technical capabilities on a negotiated, noncompetitive basis due to TAT’s technical capabilities. 26 TAT provides products under government contracts that usually require performance over a period of several months to several years.
Many of TAT’s military contracts are awarded on a competitive basis based on technical merit, personnel qualifications, experience and price. TAT also receives some contract awards involving special technical capabilities on a negotiated, noncompetitive basis due to TAT’s technical capabilities. TAT provides products under government contracts that usually require performance over a period of several months to several years.
This allows shortening the long and complex approval process, streamlining the design and certification process and reducing costs. • Leveraging operational efficiencies to achieve shorter delivery times and reduce costs. • Investing in new technologies and manufacturing techniques in the heat transfer solutions product line. • Investing in innovations and improvements aimed at enhancing the quality and performance of our existing solutions and services as well as the development of new products in an effort to strengthen our market position and enter into more advanced platforms. 30 Engineering We believe that our engineering capabilities is a strategic core competency and key competitive advantage, which allows us to effectively compete in the market with companies which, in many cases, have better name recognition and greater resources than we do.
This allows shortening the long and complex approval process, streamlining the design and certification process and reducing costs. • Leveraging operational efficiencies to achieve shorter delivery times and reduce costs. • Investing in new technologies and manufacturing techniques in the heat transfer solutions product line. • Investing in innovations and improvements aimed at enhancing the quality and performance of our existing solutions and services as well as the development of new products in an effort to strengthen our market position and enter into more advanced platforms. 53 Engineering We believe that our engineering capabilities is a strategic core competency and key competitive advantage, which allows us to effectively compete in the market with companies which, in many cases, have better name recognition and greater resources than we do.
Currently, TAT’s focus is on two main markets: thermal management solutions and services and Power and Actuation solutions and services. 20 Execution of TAT’s strategy is based on the following principles: • Enhancing OEM capabilities — capitalizing on our technical expertise, experience and reputation in the market of heat transfer solutions to expand the scope of our OEM offerings to new aircrafts or to new platforms in the existing aircrafts. • Expand the scope of MRO services — leveraging our technical expertise, engineering resources and facilities to broaden MRO services to additional types of aircraft and additional aircraft systems, subsystems and components while developing the required technical expertise to provide these additional MRO services. • Increasing market share — continuing aggressive marketing efforts to win new customers as well as to expand activities with existing customers, partly by focusing on cross selling opportunities between our different businesses.
Currently, TAT’s focus is on two main markets: thermal management solutions and services and Power and Actuation solutions and services. 36 Execution of TAT’s strategy is based on the following principles: • Enhancing OEM capabilities - capitalizing on our technical expertise, experience and reputation in the market of heat transfer solutions to expand the scope of our OEM offerings to new aircrafts or to new platforms in the existing aircrafts. • Expand the scope of MRO services - leveraging our technical expertise, engineering resources and facilities to broaden MRO services to additional types of aircraft and additional aircraft systems, subsystems and components while developing the required technical expertise to provide these additional MRO services. • Increasing market share - continuing aggressive marketing efforts to win new customers as well as to expand activities with existing customers, partly by focusing on cross selling opportunities between our different businesses.
Further, Limco’s competitors may have additional competitive advantages, such as: • Ability to bundle heat transfer and other aircraft components; • Access to greater marketing resources; • Access to superior technology; and • Greater resources which allow for better turnaround time. MRO Services for Aviation Components The market for MRO services in which Piedmont operates is highly competitive.
Further, Limco’s competitors may have additional competitive advantages, such as: • Ability to bundle heat transfer and other aircraft components; • Access to greater marketing resources; • Access to superior technology; and • Greater resources which allow for better turnaround time. 50 MRO Services for Aviation Components The market for MRO services in which Piedmont operates is highly competitive.
Limco’s quality systems are ISO9001, AS9110, AS9100 and NADCAP for non-destructive testing, welding and heat treating and FAR 21.303 (the FAA standard for Parts Manufacturer Approval). 23 MRO Services for Aviation Components Through its Piedmont subsidiary, TAT provides MRO services for aviation components, including APUs and landing gear.
Limco’s quality systems are ISO9001, AS9110, AS9100 and NADCAP for non-destructive testing, welding and heat treating and FAR 21.303 (the FAA standard for Parts Manufacturer Approval). MRO Services for Aviation Components Through its Piedmont subsidiary, TAT provides MRO services for aviation components, including APUs and landing gear.
Such supply contracts are generally long-term engagements that may have terms of ten years or more. As part of its OEM activities, TAT Israel is also engaged in the design, development and manufacture of complete cooling systems.
Such supply contracts are generally long-term engagements that may have terms of ten years or more. 31 As part of its OEM activities, TAT Israel is also engaged in the design, development and manufacture of complete cooling systems.
TAT-Engineering LLC In November 2015, we signed an agreement with Russian-based Engineering Holdings Ltd, of Moscow (“Engineering”), to establish a new facility for the provision of MRO services for heat transfer components. The company, TAT-Engineering LLC, is based in Novosibirsk’s Tolmachevo airport.
TAT-Engineering LLC In November 2015, TAT signed an agreement with Russian-based Engineering Holdings Ltd, of Moscow (“Engineering”), to establish a new facility for the provision of MRO services for heat transfer components. The company, TAT-Engineering LLC, is based in Novosibirsk’s Tolmachevo airport.
The rent for building #5 is $4,100 per month plus the annual percentage increase in the CPI-W. The lease on building #6 expires on March 31, 2032. The lessee or lessor may terminate the lease by giving the lessee or lessor 6 months advance written notice.
The lease on building #5 expires on March 31, 2025 The lessee or lessor may terminate the lease by giving the lessee or lessor 6 months advance written notice. The rent for building #5 is $4,100 per month plus the annual percentage increase in the CPI-W. The lease on building #6 expires on March 31, 2032.
Piedmont has a long history in providing landing gear MRO services for regional airliners, including aircraft manufactured by the French-Italian ATR (42/72), Gulfstream (G4), Lockheed Martin (P3/C130) and the Brazilian Embraer (E170/E190).
Piedmont has a long history in providing landing gear MRO services for regional airliners, including aircraft manufactured by the French-Italian ATR (42/72), Gulfstream (G4), Lockheed Martin (P3/C130) and the Brazilian Embraer (E170).
The nature of the projects in the commercial and military aviation OEM industry, which are often time consuming and complex, also require long-term supplier relationships and customer loyalty in order to succeed. 27 TAT’s competitors in the global OEM aerospace and defense industries can be divided into two main groups: • Complete system manufacturers that either independently or through subcontractors, design, develop and manufacture complete systems (such as a manufacturer of aircraft hydraulic systems) directly for the platform manufacturer (i.e., for business jets).
The nature of the projects in the commercial and military aviation OEM industry, which are often time consuming and complex, also require long-term supplier relationships and customer loyalty in order to succeed. 47 TAT’s competitors in the global OEM aerospace and defense industries can be divided into two main groups: • Complete system manufacturers that either independently or through subcontractors, design, develop and manufacture complete systems (such as a manufacturer of aircraft hydraulic systems) directly for the platform manufacturer (i.e., for business jets).
Further, Piedmont’s competitors may have additional competitive advantages, such as: • Better name recognition; • Ability to bundle aviation and other aircraft components; • Stronger relationships with customers and suppliers; • Lower cost structure; • Regional support near customers’ location; • Access to greater marketing resources; • Access to superior technology • Greater access to capital; and • Greater resources which allow for better turnaround time. 29 Overhaul and Coating of Jet Engine Components The market for MRO services in which Turbochrome operates is highly competitive.
Further, Piedmont’s competitors may have additional competitive advantages, such as: • Better name recognition; • Ability to bundle aviation and other aircraft components; • Stronger relationships with customers and suppliers; • Lower cost structure; • Regional support near customers’ location; • Access to greater marketing resources; • Access to superior technology • Greater access to capital; and • Greater resources which allow for better turnaround time. 51 Overhaul and Coating of Jet Engine Components The market for MRO services in which Turbochrome operates is highly competitive.
Major Customers OEM Customers TAT, primarily through TAT Israel, sells its OEM solutions and systems to commercial and military aircraft manufacturers and defense contractors and to the U.S. and Israeli governments. 25 Partial lists of OEM customers are set in the following table: Aircraft manufacturers Boeing, Textron, Pilatus, Embraer, Lockheed Martin, Honda Aircraft, Cirrus, Gulfstream, Raytheon-Collins System manufacturers/integrators and defense contractors Liebherr, , Rafael, Elbit, IAI, Parker, , Eaton Aerospace, Safran.
Major Customers OEM Customers TAT, primarily through TAT Israel, sells its OEM solutions and systems to commercial and military aircraft manufacturers and defense contractors and to the U.S. and Israeli governments. 44 Partial lists of OEM customers are set in the following table: Aircraft manufacturers Boeing, Textron, Pilatus, Embraer, Lockheed Martin, Honda Aircraft, Cirrus, Gulfstream, Raytheon-Collins System manufacturers/integrators and defense contractors Liebherr, Rafael, Elbit, IAI, Parker, Eaton Aerospace, Safran.
Our customers include commercial manufacturers of military equipment, commercial airlines, aircraft manufacturers, military forces, the defense industry, and other manufacturers of electronic systems, aviation units and machinery in the United States, Europe, CIS, Asia, Latin America and Israel. During 2023, TAT had revenues generated by more than 500 customers worldwide.
Our customers include commercial manufacturers of military equipment, commercial airlines, aircraft manufacturers, military forces, the defense industry, and other manufacturers of electronic systems, aviation units and machinery in the United States, Europe, CIS, Asia, Latin America and Israel. During 2024, TAT had revenues generated by more than 500 customers worldwide.
While governments reserve the right to conduct further audits, audits conducted for periods through fiscal year 2022 and 2023 have resulted in no material cost recovery disallowances for TAT. TAT’s eligibility to perform under its government contracts requires us to maintain adequate security measures.
While governments reserve the right to conduct further audits, audits conducted for periods through fiscal year 2023 and 2024 have resulted in no material cost recovery disallowances for TAT. TAT’s eligibility to perform under its government contracts requires us to maintain adequate security measures.
Product and Service Warranties TAT provides warranties for its products and services ranging from one to three years, depending on the nature of the specific product. To date, TAT’s warranty costs have not been substantial. As of December 31, 2023, the combined warranty reserve for TAT was $0.3 million.
Product and Service Warranties TAT provides warranties for its products and services ranging from one to three years, depending on the nature of the specific product. To date, TAT’s warranty costs have not been substantial. As of December 31, 2024, the combined warranty reserve for TAT was $0.3 million.
However, due to sanctions imposed by the United States, EU, Japan and other jurisdictions on certain industry sectors and parties in Russia and certain impacted regions, as well as enhanced export controls on certain products and industries, during 2022 and 2023 our joint venture in Russia ceased to purchase heat-exchange cores from Limco, our US subsidiary, and therefore the joint venture had to materially limit the extent of the MRO services it provides to its customers.
However, due to sanctions imposed by the United States, EU, Japan and other jurisdictions on certain industry sectors and entities in Russia and certain impacted regions, as well as enhanced export controls on certain products and industries, during the years of 2022, 2023 and 2024, our joint venture in Russia ceased to purchase heat-exchange cores from Limco, our US subsidiary, and therefore the joint venture had to materially limit the extent of the MRO services it provides to its customers.
In 2021, the Company continued with the fade out plan of the JT8D engine blade reconditioning activity and as of 2022 and 2023 this activity is immaterial for TAT’s financial statements reporting.
In 2022, the Company continued with the fade out plan of the JT8D engine blade reconditioning activity and as of 2023 and 2024 this activity is immaterial for TAT’s financial statements reporting.
Customers for TAT Israel aviation accessories include Lockheed Martin Corporation (“Lockheed Martin”), Boeing, Continental Motors (“Continental”), the Israel Air Force (“IAF”), IAI, Elbit Systems (“Elbit”), Rafael Advanced Defense Systems (“Rafael”), as well as the U.S. Air Force and U.S. Navy and other air forces from around the world.
Customers for TAT Israel aviation accessories include Lockheed Martin Corporation, Boeing, Continental Motors , the Israel Air Force (“IAF”), IAI, Elbit Systems (“Elbit”), Rafael Advanced Defense Systems (“Rafael”), as well as the U.S. Air Force and U.S. Navy and other air forces from around the world.
Piedmont has two options to extend the lease for the terms of 1 year each. The rentable facility is approximately 49,203 square feet and the rent expense will be $180 thousand for each year.. 35 Item 4A. Unresolved Staff Comments Not applicable.
Piedmont has two options to extend the lease for additional successive terms of 1 year each. The rentable facility is approximately 49,203 square feet and the rent expense will be $180 thousand for each year. Item 4A. Unresolved Staff Comments Not applicable.
In the second half of 2015, Piedmont leased approximately 82,000 square feet in Greensboro, North Carolina, for its new landing gear component and overhaul repair station as well as the MPG operation. The lease expires on June 30, 2025. In 2023, 2022 and 2021 the rental expense was $357 thousand, respectively, for each one of these years.
In the second half of 2015, Piedmont leased approximately 82,000 square feet in Greensboro, North Carolina, for its new landing gear component and overhaul repair station as well as the MPG operation. The lease expires on June 30, 2025. In 2024, 2023 and 2022 the rental expense was $372, $357, and $357 thousand, respectively, for each of these years.
Israeli Regulations TAT’s operations in Israel are subject to supervision by the Israeli Ministry of Defense and Civil Aviation Administration of Israel. TAT Israel is certified by the IAF and the Israeli Ministry of Defense for both manufacturing and maintenance. TAT Israel is also licensed as a repair station for certain components by the Civil Aviation Administration of Israel.
Israeli Regulations TAT’s operations in Israel are subject to supervision by the Israeli Ministry of Defense and the Civil Aviation Administration of Israel (“CAAI”). TAT Israel is certified by the IAF and the Israeli Ministry of Defense for both manufacturing and maintenance. In addition, TAT Israel is also licensed as a repair station for certain components by the CAAI.
The rent for building #2 is $4,000 per month plus the annual percentage increase in the CPI-W. Building #3 lease expired on January 31, 2014, however, the lease has renewed automatically from year to year since that date. Either party has the right to cancel the lease with 30 days’ advance notice prior to the annual expiration of the term.
Building #3 lease expired on January 31, 2014, however, the lease has renewed automatically from year to year since that date. Either party has the right to cancel the lease with 30 days’ advance notice prior to the annual expiration of the term. The rent for building #3 is $1,505 per month plus the annual percentage increase in the CPI-W.
Aircraft components typically require MRO services, including repairs and installation of replacement units, after three to ten years of service or sooner if required. Aircraft manufacturers typically provide warranties on new aircraft and their components and subsystems, which may range from one to five years. Warranty claims are generally the responsibility of the OEM during the warranty period.
Aircraft heat transfer components typically require MRO services, including repairs and installation of replacement units, after two to five years of service or sooner if required. Aircraft manufacturers typically provide warranties on new aircraft and their components and subsystems, which may range from one to five years. Warranty claims are generally the responsibility of the OEM during the warranty period.
TAT plans to expand its Piedmont operations in the MRO segment by using Piedmont’s experience and reputation to develop MRO capabilities for additional types of APU and landing gears applications as well as other aircraft systems/components with significant commercial potential and by offering additional supplementary services such as machining, plating, and grinding (“MPG”).
TAT plans to expand its Piedmont operations in the MRO segment by using Piedmont’s experience and reputation to develop MRO capabilities for additional types of APU and landing gears applications as well as other aircraft systems/components with significant commercial potential and by offering additional supplementary services such as MPG.
TAT’s activities in the area of MRO services for aviation components include the MRO of APUs, landing gears and other aircraft components. TAT’s Piedmont subsidiary operates an FAA-certified repair station, which provides aircraft component MRO services for airlines, air cargo carriers, maintenance service centers and the military.
TAT’s Limco subsidiary operates an FAA-certified repair station, which provides heat transfer MRO services for airlines, air cargo carriers, maintenance service centers and the military. TAT’s activities in the area of MRO services for aviation components include the MRO of APUs, landing gears and other aircraft components.
TAT’s activities in the area of OEM of heat transfer solutions and aviation accessories through its TAT Israel primarily include the design, development and manufacture of (i) a broad range of heat transfer solutions, such as pre-coolers heat exchangers and oil/fuel hydraulic heat exchangers, used in mechanical and electronic systems on board commercial, military and business aircraft; (ii) environmental control and power electronics cooling systems installed on board aircraft and ground applications; and (iii) a variety of other mechanical aircraft accessories and systems such as pumps, valves, and turbine power units.
TAT’s activities in the area of OEM of heat transfer solutions and aviation accessories through TAT Israel primarily include the design, development and manufacture of (i) a broad range of heat transfer solutions, such as pre-coolers heat exchangers and oil/fuel hydraulic heat exchangers, used in mechanical and electronic systems on board commercial, military and business aircraft; (ii) environmental control and power electronics cooling systems installed on board aircraft and ground applications; and (iii) a variety of other mechanical aircraft accessories and systems such as pumps, valves, and turbine power units. 30 TAT’s activities in the area of MRO and OEM of heat transfer solutions include the MRO of heat transfer components and to a lesser extent, the manufacturing of certain heat transfer solutions.
Generally, manufacturer specifications, government regulations and military maintenance regimens require that aircraft components undergo MRO servicing at regular intervals or as necessary. Aircraft heat transfer components typically require MRO services, including repairs and installation of replacement units, after two to five years of service or sooner if required.
Generally, manufacturer specifications, government regulations and military maintenance regimens require that aircraft components undergo MRO servicing at regular intervals or as necessary. Aircraft components typically require MRO services, including repairs and installation of replacement units, after three to ten years of service or sooner if required.
Aircraft manufacturers typically provide warranties on new aircraft and their components and subsystems, which may range from one to five years depending on the bargaining power of the purchaser. Warranty claims are generally the responsibility of the OEM during the warranty period. Limco’s business opportunity usually begins upon the conclusion of the warranty period for these components and subsystems.
Aircraft manufacturers typically provide warranties on new aircraft and their components and subsystems, which may range from one to five years. Warranty claims are generally the responsibility of the OEM during the warranty period. Piedmont’s business opportunity usually begins upon the conclusion of the warranty period for these components and subsystems.
In addition, TAT Israel export of certain products and/or know-how is subject to approval by the Defense Export Controls Agency (“DECA”) of the Israeli Ministry of Defense. DECA permits are required prior to submitting sales proposals with regard to such exports, as well as for the actual export of such products.
Furthermore, the export of certain products and/or know-how by TAT Israel is subject to approval by the Defense Export Controls Agency (“DECA”) of the Israeli Ministry of Defense. DECA permits are required prior to submitting sales proposals involving such exports, as well as for the actual export of such products.
OEMs generally grant very few authorizations and maintain tight controls over their authorized MRO service providers in order to maintain high quality of service to their customers. Obtaining OEM authorization requires sophisticated technological capabilities, experience-based industry knowledge and substantial capital investment.
OEMs grant independent MRO service providers authorization to perform repair and overhaul services on their behalf. OEMs generally grant very few authorizations and maintain tight controls over their authorized MRO service providers in order to maintain high quality of service to their customers. Obtaining OEM authorization requires sophisticated technological capabilities, experience-based industry knowledge and substantial capital investment.
Although TAT seeks to maintain its operations and facilities in compliance with applicable environmental laws, there can be no assurance that TAT has no violations, or that change in such laws, regulations or interpretations of such laws, will not require TAT to make significant additional expenditures to ensure compliance in the future. C.
Although TAT seeks to maintain its operations and facilities in compliance with applicable environmental laws, there can be no assurance that violations do not exist or that future change to such laws, regulations or their interpretations will not require TAT to make significant additional expenditures to ensure compliance.
As of December 31, 2023, our backlog included: (i) outstanding purchase orders representing an aggregate amount of $85 million, and (ii) sales that we expect to generate from long-term agreements (the longest of which is until 2033) for which we have not yet received actual purchase orders in an aggregate amount of $349 million.
As of December 31, 2024, our backlog included: (i) outstanding purchase orders representing an aggregate amount of $42 million, and (ii) sales that we expect to generate from long-term agreements (the longest of which is until 2035) for which we have not yet received actual purchase orders in an aggregate amount of $429 million.
These competitors may enjoy competitive advantages over TAT Israel, such as: • The ability to adapt faster to changes in customer requirements and industry conditions or trends; • Greater access to capital; • Stronger relationships with customers and suppliers; • Greater name recognition; • Access to superior technology and greater marketing resources; • Ability to offer complete systems in addition to components; and • The ability to bundle heat transfer solutions and other aircraft components.
These competitors may enjoy competitive advantages over TAT , such as: • The ability to adapt faster to changes in customer requirements and industry conditions or trends; • Greater access to capital; • Stronger relationships with customers and suppliers; • Greater name recognition; • Access to superior technology and greater marketing resources; • Ability to offer complete systems in addition to components; and • The ability to bundle heat transfer solutions and other aircraft components. 49 MRO Services for Heat Transfer Components The market for MRO services in the field of heat transfer components is highly competitive.
The rent for building #4 is $3,200 per month plus the annual percentage increase in the CPI-W. The lease on building #5 expires on March 31, 2025. The lessee or lessor may terminate the lease by giving the lessee or lessor 6 months advance written notice.
The lease on building #4 expires on March 31, 2029. The lessee or lessor may terminate the lease by giving the lessee or lessor 6 months advance written notice. The rent for building #4 is $2,800 per month plus the annual percentage increase in the CPI-W.
In addition, OSHA provides special procedures and measures for the handling of certain hazardous and toxic substances. TAT believes that its operations are in compliance with OSHA’s requirements. TAT believes that it is in material compliance with U.S., European and other governmental regulations affecting the aerospace and defense industries.
OSHA mandates general requirements for safe workplaces across the U.S., and provides special procedures and measures for handling certain hazardous and toxic substances. TAT believes that its operations are in compliance with OSHA’s requirements. TAT also believes that it is in material compliance with applicable U.S., European and other governmental regulations affecting the aerospace and defense industries.
For example, Limco competes with the service divisions of large OEMs which in some cases have design authority with respect to their OEM solutions and are able to derive significant pricing advantages from their OEM manufacturing activities.
As an independent MRO service provider, Limco’s competitors have inherent competitive advantages. For example, Limco competes with the service divisions of large OEMs which in some cases have design authority with respect to their OEM solutions and are able to derive significant pricing advantages from their OEM manufacturing activities.
In July 2007, Limco-Piedmont completed an initial public offering of its common stock and Limco-Piedmont’s shares were listed on the NASDAQ Global Market (symbol: LIMC) until July 2, 2009, when TAT acquired all of the publicly held shares of Limco-Piedmont (approximately 32% of Limco-Piedmont’s total shares) in a stock for stock merger.
In July 2007, Limco-Piedmont completed an initial public offering of its common stock and Limco-Piedmont’s shares were listed on the NASDAQ Global Market (symbol: LIMC) until July 2, 2009, when TAT acquired all of the publicly held shares of Limco-Piedmont in a stock-for-stock merger. As a result of such merger, Limco-Piedmont again became a wholly-owned subsidiary of TAT.
In 2023, 2022 and 2021, the rental expense for this property was $48 thousand for each year respectively. The lease is in effect until May 2025. In December 2023, Piedmont signed an additional lease agreement for a facility in Kernersville, North Carolina, USA, The term of this lease is 3 years and will expire on December 31, 2026.
In 2023 and 2022, the rental expense for this property was $48 thousand for each year. The lease has been terminated in 2024. 61 In December 2023, Piedmont signed an additional lease agreement for a facility in Kernersville, North Carolina, USA. The term of this lease is 3 years and will expire on December 31, 2026.
According to the agreement, Piedmont was issued 288,334 shares of Class B common stock of FAvS, representing 37% of FAvS' then share capital (total number of shares acquired was subsequently adjusted as result of a 1 for 20 reverse stock split) and $750,000 of FAvS preferred shares (entitled to cash dividends at an annual rate of 12% payable quarterly or to additional preferred shares at an annual rate of 15%) in return for Piedmont's propeller and parts businesses. 16 On March 11, 2015, Piedmont sold 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 for an insignificant amount.
According to the agreement, Piedmont was issued 288,334 shares of Class B common stock of FAvS, representing 37% of FAvS’ then share capital (total number of shares acquired was subsequently adjusted as result of a 1 for 20 reverse stock split) and $750,000 of FAvS preferred shares (entitled to cash dividends at an annual rate of 12% payable quarterly or to additional preferred shares at an annual rate of 15%) in return for Piedmont's propeller and parts businesses.
Turbochrome’s business opportunity usually begins upon the conclusion of the warranty period for these components. Turbochrome offers its customers DER (Designated Engineering Representatives) and DOA (Design Organization Approval) repairs approved by the FAA and EASA. Turbochrome’s customers include U.S. domestic and international airlines, maintenance service centers and the military.
Turbochrome’s business opportunity usually begins upon the conclusion of the warranty period for these components. Turbochrome offers its customers DER (Designated Engineering Representatives) and DOA (Design Organization Approval) repairs approved by the FAA and EASA.
TAT must also satisfy the requirements of its customers, including OEMs and airlines that are subject to FAA regulations and to evolving industry standards, and provide these customers with products that comply with the government regulations applicable to commercial flight operations. TAT believes it currently satisfies or exceeds these FAA maintenance standards in its repair and overhaul activities.
Additionally, TAT must meet the requirements of its customers, including OEMs and airlines that are subject to FAA regulations and evolving industry standards, by providing these customers with products that comply with the regulatory requirements applicable to commercial flight operations. 58 TAT believes it currently meets or exceeds FAA maintenance standards in its repair and overhaul activities.
Item 4. Information on the Company History and Development of TAT TAT was incorporated under the laws of the State of Israel in April 1985 under the name Galaxy Graphics Ltd. TAT changed its name to Galagraph Ltd. in August 1986 and to TAT Technologies Ltd. in May 1992.
Item 4. Information on the Company History and Development of TAT A. Business Overview TAT was incorporated under the laws of the State of Israel in April 1985 under the name Galaxy Graphics Ltd. TAT underwent several name changes, becoming Galagraph Ltd. in August 1986 and TAT Technologies Ltd. in May 1992.
Turbochrome’s customers include domestic and international airlines, maintenance service centers and the military. Turbochrome also specializes in the manufacturing of coating powders (for pack cementation aluminide coatings) and masking materials (for the prevention of coating in defined areas) used in the aviation industry. Turbochrome provides these materials to OEMs and to maintenance service centers.
Turbochrome’s business opportunity usually begins upon the conclusion of the warranty period for these components. Turbochrome’s customers include domestic and international airlines, maintenance service centers and the military. Turbochrome also specializes in the manufacturing of coating powders (for pack cementation aluminide coatings) and masking materials (for the prevention of coating in defined areas) used in the aviation industry.
Israeli law also regulates the export of “dual use” items (items that are typically sold for civilian uses or purposes but that may also have military purposes). While we have been successful in obtaining export permits in the past, we may not be able to obtain the necessary export permits or licenses in the future.
Israeli law also governs the export of “dual use” items - items that are typically intended for civilian purposes but may also serve military purposes. 57 While we have been successful in obtaining export permits in the past, there is no insurance that we will be able to obtain the necessary export permits or licenses in the future.
Limco designs and develops these customized remanufactured units as a cost-effective alternative to new part replacement. In the event of less severe damage, Limco will either overhaul or repair the unit as necessary. Re-manufactured units carry warranties which are often equal or better than those provided to new units.
Limco designs and develops these customized remanufactured units as a cost-effective alternative to new part replacement. In the event of less severe damage, Limco will either overhaul or repair the unit as necessary.
Limco’s customers include major U.S. domestic and international airlines, air cargo carriers, maintenance service centers, OEMs such as commercial and military aircraft manufacturers and defense contractors, and the U.S. Armed Forces (Army, Air Force, Navy and Coast Guard).
Limco’s business opportunity usually begins upon the conclusion of the warranty period for these components and subsystems. Limco’s customers include major U.S. domestic and international airlines, air cargo carriers, maintenance service centers, OEMs such as commercial and military aircraft manufacturers and defense contractors, and the U.S. Armed Forces (Army, Air Force, Navy and Coast Guard).
In March 1987, TAT completed the initial public offering of its securities in the United States. TAT was listed on the NASDAQ Global Market (then known as the NASDAQ National Market) from its initial public offering until July 1998 when the listing of TAT’s ordinary shares was transferred to the NASDAQ Capital Market.
TAT was listed on the NASDAQ Global Market (then known as the NASDAQ National Market) from its initial public offering until July 1998 when the listing of TAT’s ordinary shares was transferred to the NASDAQ Capital Market. On June 24, 2009, TAT’s ordinary shares resumed trading on the NASDAQ Global Market.
During 2021, Piedmont entered into the APU leasing activity with a purchase of eighteen 331-500APU engines from Honeywell, under which Honeywell is the main customer for leasing these engines (pursuant to this agreement Piedmont is Honeywell's sole source for engines for lease purposes). In 2022 Piedmont increased the lease pool by adding six 131-9A/B APU’s and five 331-200/250 APU’s.
During 2021, Piedmont entered into the APU leasing activity with a purchase of eighteen 331-500APU engines from Honeywell, under which Honeywell is the main customer for leasing these engines (pursuant to this agreement Piedmont is Honeywell's sole source for engines for lease purposes).
We believe that an aging military fleet and the increased use of upgrade programs aimed at extending the useful life of military aircraft will provide continued MRO growth opportunities. Limco specializes in the repair and overhaul of heat transfer components.
We believe that an aging military fleet and the increased use of upgrade programs aimed at extending the useful life of military aircraft will provide continued MRO growth opportunities. Limco specializes in the repair and overhaul of heat transfer components. These components include heat exchangers, oil coolers, pre-coolers, reheaters, condensers, water separators, fuel heaters, evaporators and ozone converters.
TAT estimates the size of the markets in which Turbochrome operates to be significant based on the number of jet engines requiring MRO services. Turbochrome plans to expand its operations in the MRO segment by using Turbochrome’s experience and reputation to develop MRO capabilities for additional types of jet engine components with significant commercial potential.
Turbochrome plans to expand its operations in the MRO segment by using Turbochrome’s experience and reputation to develop MRO capabilities for additional types of jet engine components with significant commercial potential.
MRO Services for Heat Transfer Components and OEM of Heat Transfer Solutions MRO Services for Heat Transfer Components Through its Limco subsidiary in the U.S., TAT provides MRO services for heat transfer components.
TAT Israel's systems are used globally and are tested under strict standards. MRO Services for Heat Transfer Components and OEM of Heat Transfer Solutions MRO Services for Heat Transfer Components Through its Limco subsidiary in the U.S., TAT provides MRO services for heat transfer components.
Backlog and Long-Term Agreements Our backlog includes the following: (i) actual purchase orders, and (ii) the estimated sales we expect to generate from long-term agreements during the life of the contract or 10 years the lower of the two, for which we do not have actual purchase orders.
TAT has implemented security procedures that it believes adequately satisfies the requirements of its current government contracts. 46 Backlog and Long-Term Agreements Our backlog includes the following: (i) actual purchase orders, and (ii) the estimated sales we expect to generate from long-term agreements during the life of the contract or 10 years the lower of the two, for which we do not have actual purchase orders.
TAT plans to expand its TAT Israel operations in the OEM segment, among other things, by increasing the scope of work with its existing strategic customers, establishing relationships with new customers, increasing its capabilities in complete systems/subsystems manufacturing, and by targeting strategic territories with high commercial potential.
TAT plans to expand its TAT Israel operations in the OEM segment, among other things, by increasing the scope of work with its existing strategic customers, establishing relationships with new customers, increasing its capabilities in complete systems/subsystems manufacturing, and by targeting strategic territories with high commercial potential. 32 MRO Services for Heat Transfer Components and OEM of Heat Transfer Solutions (Limco) Through its Limco subsidiary TAT provides MRO services and OEM services to the aerospace and ground defense industries in the field of heat transfer.
Environmental Matters TAT’s operations are subject to a number of stringent federal, state and local environmental laws in the United States and Israel, as well as to regulation set or promulgated by government agencies, including the U.S. Environmental Protection Agency.
Environmental Matters TAT’s operations are subject to certain stringent environmental laws and regulations at the federal, state and local levels in the United States and Israel, as well as to requirements established by government agencies, including the U.S. Environmental Protection Agency.
The facility in Kiryat Gat is approximately 138,000 square feet, and the land on which the facility is located is leased from the ILA. The leasehold rights are for a period ending in 2045 and are recorded in Turbochrome's name.
The facility in Kiryat Gat is approximately 138,000 square feet, and the land on which the facility is located is leased from the ILA. The leasehold rights are for a period ending in 2045 and are recorded in Turbochrome's name. Turbochrome paid the entire lease payments due until 2045 in a one-time payment (discounted to present value).
Limco’s capabilities include heat transfer components used in aircraft and systems manufactured by Airbus, Boeing, Bombardier, Cessna, Embraer, Lockheed Martin, Fokker, Liebherr-Aerospace, Collins Aerospace, Honeywell Aerospace and others.
Limco is continually expanding its MRO capabilities based on market need and/or customer request. Limco’s capabilities include heat transfer components used in aircraft and systems manufactured by Airbus, Boeing, Bombardier, Cessna, Embraer, Lockheed Martin, Fokker, Liebherr-Aerospace, Collins Aerospace, Honeywell Aerospace and others.
MRO Services for Aviation Components (Piedmont) Through its subsidiary Piedmont, TAT provides MRO services for aviation components to the aerospace industry. Piedmont’s FAA- and EASA-certified repair station provides aircraft component MRO services for commercial airlines, business jets, air cargo carriers, maintenance service providers as well as governments and military forces worldwide.
Piedmont’s FAA- and EASA-certified repair station provides aircraft component MRO services for commercial airlines, business jets, air cargo carriers, maintenance service providers as well as governments and military forces worldwide. Piedmont specializes in MRO services for aircraft components, including APUs, landing gears and MPG.
Piedmont believes that service providers that have OEM authorizations and licenses gain a competitive advantage as they typically receive discounts on parts, technical information, OEM warranty support and use of the OEM name in marketing. Piedmont is an authorized repair station licensed by Honeywell, the largest manufacturer of APUs, for several of its APU models.
Piedmont believes that service providers that have OEM authorizations and licenses gain a competitive advantage as they typically receive discounts on parts, technical information, OEM warranty support and use of the OEM name in marketing.
In November 2015, TAT entered into an agreement with Engineering to establish a new MRO facility in Russia. The company, TAT-Engineering LLC, is based in Novosibirsk’s Tolmachevo airport and is provides services of minor repair, overhaul and recore for heat transfer components in Russia and the CIS.
The company, TAT-Engineering LLC, is based in Novosibirsk’s Tolmachevo airport and is provides services of minor repair, overhaul and recore for heat transfer components in Russia and the CIS.
Military Contracts Direct sales to the U.S. government, our largest government customer, accounted for approximately 6.6% of TAT’s revenues for the year ended December 31, 2023, approximately 5.2% of our revenues for the year ended December 31, 2022 and approximately 5.6% of our revenues for the year ended December 31, 2021.
Navy; Israeli Ministry of Defense, Israeli Air Force; Belgium Air Force, Polish Air Force, Portuguese Air Force, Japan Air Force. 45 Military Contracts Direct sales to the U.S. government, our largest government customer, accounted for approximately 9.3% of TAT’s revenues for the year ended December 31, 2024, approximately 6.6% of our revenues for the year ended December 31, 2023 and approximately 5.2% of our revenues for the year ended December 31, 2022.
The rent for building #6 is $9,364 per month plus the annual percentage increase in the CPI-W. In 2023, 2022 and 2021, the rental expense for this property was $253 thousand, $271 thousand and $158 thousand, respectively.
The lessee or lessor may terminate the lease by giving the lessee or lessor 6 months advance written notice. The rent for building #6 is $9,364 per month plus the annual percentage increase in the CPI-W. In 2024, 2023 and 2022, the rental expense for this property was $247 thousand, $253 thousand and $271 thousand, respectively.
Furthermore, we believe that commercial carriers making the decision to outsource their MRO requirements are searching for MRO service providers with a wide-range of service capabilities. Such MRO service providers allow the carriers to concentrate their outsourcing of MRO services to a select group of third-party providers. The global military aircraft fleet also presents similar opportunities for MRO service providers.
Such MRO service providers allow the carriers to concentrate their outsourcing of MRO services to a select group of third-party providers. The global military aircraft fleet also presents similar opportunities for MRO service providers.
During the years 2020-2021, the Israeli Water Authority requested that TAT perform sampling of certain groundwater wells in TAT’s facility in Gedera. During March 2022 TAT has terminated its lease agreement in Gedera facility and has no further requests from the water authority.
This extensive regulatory framework imposes significant compliance burdens and risks. 59 During the years 2020-2021, the Israeli Water Authority requested that TAT conduct sampling of certain groundwater wells in its facility in Gedera. In March 2022, TAT terminated its lease agreement for the Gedera facility and has not received further requests from the Israeli Water Authority.
Piedmont specializes in MRO services for aircraft components, including APUs, landing gears and Machining and Plating services (MPG). Generally, manufacturer specifications, government regulations and military maintenance regimens require that aircraft components undergo MRO servicing at regular intervals or as necessary.
Limco specializes in MRO services for components of aircraft, such as heat transfer components and ozone converters. Generally, manufacturer specifications, government regulations and military maintenance regimens require that aircraft components undergo MRO servicing at regular intervals or as necessary.
Although some of the component manufacturers have the capabilities to design, develop and manufacture a complete system (i.e., environmental control system for a business jet) for a certain platform, these companies usually do not compete on projects for complete systems in which their manufactured component constitutes a small part of the complete system, mainly due to the high barriers to entry and to the difficulty to move up the “value chain” from a component supplier to a whole system manufacturer.
Although some of the component manufacturers have the capabilities to design, develop and manufacture a complete system (i.e., environmental control system for a business jet) for a certain platform, these companies usually do not compete on projects for complete systems in which their manufactured component constitutes a small part of the complete system, mainly due to the high barriers to entry and to the difficulty to move up the “value chain” from a component supplier to a whole system manufacturer. 48 The major competitors of TAT in the area of OEM of heat transfer solutions and aviation accessories include manufacturers in the United States such as the Hughes-Treitler division of Ametek, Lytron, Niagara Thermal, Collins Aerospace, Honeywell International and AAR Corp; manufacturers based in Europe such as I.M.I.
Engine manufacturers typically provide warranties on new engines and their components and subsystems, which may range from one to five years depending on the bargaining power of the purchaser. Warranty claims are generally the responsibility of the OEM during the warranty period. Turbochrome’s business opportunity usually begins upon the conclusion of the warranty period for these components.
Commercial engine components typically require MRO services after three to five years of service or sooner if required. Engine manufacturers typically provide warranties on new engines and their components and subsystems, which may range from one to five years depending on the bargaining power of the purchaser. Warranty claims are generally the responsibility of the OEM during the warranty period.
MRO Services for Heat Transfer Components The market for MRO services in the field of heat transfer components is highly competitive. Competition in this market is based on price, turnaround time, quality and breadth of services.
Competition in this market is based on price, turnaround time, quality and breadth of services.
The information on TAT’S website is not incorporated by reference into this annual report. The Company’s agent for service of process in the United States is the Company’s subsidiary, Limco-Piedmont, Inc., 5304 S. Lawton Avenue, Tulsa, Oklahoma 74107. TAT was founded in 1985 to develop the computerized systems business of its then parent company, TAT Industries Ltd.
The information on TAT’S website, or that can be accessed through the website, is not incorporated by reference into this annual report. The Company’s agent for service of process in the United States is the Company’s subsidiary, Limco-Piedmont, Inc., 5304 S. Lawton Avenue, Tulsa, Oklahoma 74107.
Service divisions of OEMs may also acquire capabilities to service products of other OEMs to further expand their MRO services. • Service centers – which often provide MRO services for a broad range of components and systems. These service centers can be either the in-house maintenance services of commercial airlines or other independent service providers, such as TAT or Limco.
Service divisions of OEMs may also acquire capabilities to service products of other OEMs to further expand their MRO services. • Service centers – which often provide MRO services for a broad range of components and systems.
According to the joint venture agreement, TAT owns 51% of TAT-Engineering's shares and the remaining 49% are held by Engineering. A. Business Overview Overview TAT Technologies Ltd. is a leading provider of solutions and services to the commercial and military aerospace and ground defense industries focused mainly on two product areas and services: Thermal Management and Power and Actuation.
Business Overview TAT Technologies Ltd. is a leading provider of solutions and services to the commercial and military aerospace and ground defense industries focused mainly on three product areas and services: Thermal Management, Power and Actuation and Maintenance, Repair and Overhaul.
Source and Availability of Raw Materials and Spare Parts TAT and its subsidiaries acquire most of the components for the manufacture of their products and provision of their services from a limited number of suppliers and subcontractors, the majority located in Israel and the United States.
By staying ahead of technological advancements and embracing a proactive, collaborative approach, TAT strengthens its leadership in the dynamic aerospace market, delivering superior value and innovation for customers worldwide. 56 Source and Availability of Raw Materials and Spare Parts TAT and its subsidiaries acquire most of the components for the manufacture of their products and provision of their services from a limited number of suppliers and subcontractors, the majority located in Israel and the United States.
In 2005, Limco acquired Piedmont, a company certified by the FAA to perform MRO services of APUs and landing gears. Located in Greensboro, North Carolina, Piedmont’s FAA-certified repair station provides MRO services for airlines, air cargo carriers, maintenance service centers and the military, especially for landing gears and APUs.
Piedmont’s FAA-certified repair station provides MRO services for airlines, air cargo carriers, maintenance service centers and the military, especially for landing gears and APUs.
In 2021 Piedmont began providing its customers with APU engine leasing services with respect to the APU 331-250 and 331-500 models. TAT estimates the size of the markets in which Piedmont operates to be significant based on the number of aircraft requiring MRO services provided by Piedmont.
TAT estimates the size of the markets in which Piedmont operates to be significant based on the number of aircraft requiring MRO services provided by Piedmont.
Machining, Plating and Grinding, or MPG Services Piedmont has extended its services to include the provision of MPG services, either as supplementary to its traditional MRO services or as stand-alone services.
Piedmont is an authorized repair station licensed by Honeywell, the largest manufacturer of APUs, for several of its APU models. 42 Machining, Plating and Grinding, or MPG Services Piedmont has extended its services to include the provision of MPG services, either as supplementary to its traditional MRO services or as stand-alone services.
TAT’s activities in the area of jet engine overhaul through its Turbochrome facility includes the overhaul and coating of jet engine components, including turbine vanes and blades, fan blades, variable inlet guide vanes and afterburner flaps. 17 OEM of Heat Transfer Solutions and Aviation Accessories (TAT Israel) TAT is an OEM of heat transfer solutions and aviation accessories to the commercial and military aerospace and ground defense industries, primarily through its TAT Israel.
TAT’s activities in the area of jet engine overhaul through its Turbochrome facility includes the overhaul and coating of jet engine components, including turbine vanes and blades, fan blades, variable inlet guide vanes and afterburner flaps.
TAT estimates the size of the markets in which Limco operates to be significant based on the number of aircraft requiring MRO services provided by Limco along with the customer loyalty Limco enjoys. TAT plans to expand its Limco operations, among other things, by developing OEM and MRO capabilities for additional types of heat transfer products with significant commercial potential.
TAT estimates the size of the markets in which Limco operates to be significant based on the number of aircraft requiring MRO services provided by Limco along with the customer loyalty Limco enjoys.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Item 5. Operating and Financial Review and Prospects Operating Results The following discussion of our results of operations should be read together with our consolidated financial statements and the related notes, which appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our current plans, estimates and beliefs and involve risks and uncertainties.
Item 5. Operating and Financial Review and Prospects The following discussion of our results of operations should be read together with our consolidated financial statements and the related notes, which appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our current plans, estimates and beliefs and involve risks and uncertainties.
Although TAT hedges a portion of its exchange rate risk through the use of forward contracts and other derivative instruments, there is no certainty that future results of operations may not be materially adversely affected by currency fluctuations. Corporate Tax Rate Israeli companies are generally subject to corporate tax on their taxable income (including capital gains).
Although TAT hedges a portion of its exchange rate risk through the use of forward contracts and other derivative instruments, there is no certainty that future results of operations may not be materially adversely affected by currency fluctuations. 75 Corporate Tax Rate Israeli companies are generally subject to corporate tax on their taxable income (including capital gains).
Commercial carriers remain committed to their efforts to reduce cost of MRO activities and increase efficiencies. C. Off-Balance Sheet Arrangements We are not a party to any material off-balance sheet arrangements. In addition, we have no unconsolidated special purpose financing or partnership entities that are likely to create material contingent obligations. D.
Commercial carriers remain committed to their efforts to reduce cost of MRO activities and increase efficiencies. C. Off-Balance Sheet Arrangements We are not a party to any material off-balance sheet arrangements. In addition, we have no unconsolidated special purpose financing or partnership entities that are likely to create material contingent obligations. 83 D.
Our actual results may differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include those discussed below and elsewhere in this annual report. Overview TAT is reliant on the robustness of the commercial and military aerospace and ground defense industries.
Our actual results may differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include those discussed below and elsewhere in this annual report. Company Overview TAT is reliant on the robustness of the commercial and military aerospace and ground defense industries.
These policies are those that are both most important to the portrayal of TAT’s financial condition and results of operations and require management’s most difficult, subjective and complex judgments and estimates. Actual results could differ from those estimates. In many cases, the accounting treatment of a particular transaction is specifically dictated by U.S.
These policies are those that are both most important to the portrayal of TAT’s financial condition and results of operations and require management’s most difficult, subjective and complex judgments and estimates. Actual results could differ from those estimates. 65 In many cases, the accounting treatment of a particular transaction is specifically dictated by U.S.
Net cash used in operating activities for the year ended December 31, 2022 was principally derived from the following adjustments of non-cash line items: an upward adjustment of $3.7 million for depreciation and amortization; a upward adjustment of $1.1 million for an increase in trade accounts payable; an upward adjustment of $2.7 million for accrued expenses.
Net cash used in operating activities for the year ended December 31, 2022 was principally derived from the following adjustments of non-cash line items: an upward adjustment of $3.7 million for depreciation and amortization; an upward adjustment of $1.1 million for an increase in trade accounts payable; an upward adjustment of $2.7 million for accrued expenses.
General and administrative expenses consist of compensation and related expenses for executive, finance and administrative personnel, professional fees such as legal, audit, SOX, internal audit, other general corporate expenses and related costs for facilities and equipment. 38 Other income (expense). Other income (expense) results from capital gain on sale of property and equipment and onetime expenses. Financial income (expense), net.
General and administrative expenses consist of compensation and related expenses for executive, finance and administrative personnel, professional fees such as legal, audit, SOX, internal audit, other general corporate expenses and related costs for facilities and equipment. Other income (expense). Other income (expense) results from capital gain on sale of property and equipment and onetime expenses. Financial income (expense), net.
Liquidity and Capital Resources On December 21, 2023, TAT completed the issuance and sale of 1,158,600 Ordinary Shares of the Company in a private placement to Israeli institutional and accredited investors (as defined under Israel’s Securities Law, 5728-1968), for a purchase price of NIS 31.70 per share (which equaled $8.77 per share based on the exchange rate published by the Bank of Israel at such time), resulting in net proceeds to the Company, after deducting offering expenses, of approximately NIS 36.2 million (or approximately $10.0 million).
Liquidity and Capital Resources In December 21, 2023, TAT completed the issuance and sale of 1,158,600 ordinary shares of the Company in a private placement to Israeli institutional and accredited investors (as defined under Israel’s Securities Law, 5728-1968) (the “Investors” and the “Israeli Securities Law”, respectively), for a purchase price of NIS 31.70 per share (which equaled $8.77 per share based on the exchange rate published by the Bank of Israel at such time), resulting in net proceeds to the Company, after deducting offering expenses, of approximately NIS 36.2 million (or approximately $10.0 million).
The regular corporate tax rate for Israel was 23% for the year ended December 31, 2021, December 31, 2022 and December 31, 2023. However, the rate is effectively reduced for income derived from Approved and Beneficiary Enterprises, as defined by the Law for the Encouragement of Capital Investments, 1959, as amended.
The regular corporate tax rate for Israel was 23% for the year ended December 31, 2022, December 31, 2023 and December 31, 2024. However, the rate is effectively reduced for income derived from Approved and Beneficiary Enterprises, as defined by the Law for the Encouragement of Capital Investments, 1959, as amended.
Net cash used in operating activities for the year ended December 31, 2023 was principally derived from the following adjustments of non-cash line items: an upward adjustment of $4.7 million for depreciation and amortization; an upward adjustment of $4.2 million for an increase in trade accrued expenses other; an offset adjustment of $5.4 million for inventory .; a downward adjustment of $4.2 million for increase in trade accounts receivable.
Net cash used in operating activities for the year ended December 31, 2024 was principally derived from the following adjustments of non-cash line items: an upward adjustment of $5.5 million for depreciation and amortization; an upward adjustment of $4.7 million for an increase in trade accrued expenses other; an offset adjustment of $17.1 million for inventory; and a downward adjustment of $9.7 million for increase in trade accounts receivable. 81 Net cash used in operating activities for the year ended December 31, 2023 was principally derived from the following adjustments of non-cash line items: an upward adjustment of $4.7 million for depreciation and amortization; an upward adjustment of $4.2 million for an increase in trade accrued expenses other; an offset adjustment of $5.4 million for inventory; and a downward adjustment of $4.2 million for increase in trade accounts receivable.
In the year ended December 31, 2022, net cash used by investing activities was $16.1 million, out of which approximately $12.3 million was attributed to investment in new machinery and buildings due to the company's restructuring plan.
In the year ended December 31, 2022, net cash used by investing activities was $16.1 million, out of which approximately $12.3 million was attributed to investment in new machinery and buildings due to the Company's restructuring plan. 82 In the year ended December 31, 2024, net cash used by financing activities was $0.1 million.
Additionally, certain assets, as well as a portion of its liabilities, are denominated in NIS. Therefore, the dollar cost of its operations is influenced by the extent to which any inflation in Israel is offset on a lagging basis or is not offset by the devaluation of the NIS in relation to the U.S. dollar.
Additionally, certain assets, as well as a portion of its liabilities, are denominated in NIS. Therefore, the dollar cost of TAT’s operations is influenced by the extent to which inflation in Israel is offset, either partially or fully, on a lagging basis or is not offset by the devaluation of the NIS in relation to the U.S. dollar.
Year ended December 31, 2023 compared with Year ended December 31, 2022 Please see Item 5 on Form 20-F for the Year ended December 31, 2022 filed on March 29, 2023 for this comparison.
Year ended December 31, 2023 compared with Year ended December 31, 2022 Please see Item 5 on Form 20-F for the Year ended December 31, 2023 filed on March 6, 2024 for this comparison.
In November 1995, Israel entered into a new agreement with the European Union, which includes a redefinition of rules of origin and other improvements, such as allowing Israel to become a member of the Research and Technology programs of the European Union.
In November 1995, Israel entered into a new agreement with the European Union, which includes a redefinition of rules of origin and additional benefits, such as allowing Israel to become a member of the Research and Technology programs of the European Union.
Employees are entitled to one month’s salary for each year of employment or a portion thereof. As of December 31, 2023, our severance pay liability, net was $ 336 thousand. TAT expects to pay $722 thousand in future benefits to their employees during 2024 through 2033 upon their normal retirement age.
Employees are entitled to one month’s salary for each year of employment or a portion thereof. As of December 31, 2024, our severance pay liability, net was $ 332 thousand. TAT expects to pay $656 thousand in future benefits to their employees during 2025 through 2033 upon their normal retirement age.
Research and development expenses as a percentage of revenues were 0.6% for the twelve months ended December 31, 2023 compared to 0.6% for the twelve months ended December 31, 2022. Selling and marketing. Selling and marketing expenses were $5.5 million for the twelve months ended December 31, 2023, compared to $5.6 million for the twelve months ended December 31, 2022.
Research and development expenses as a percentage of revenues were 0.8% for the twelve months ended December 31, 2024 compared to 0.6% for the twelve months ended December 31, 2023. Selling and marketing. Selling and marketing expenses were $7.7 million for the twelve months ended December 31, 2024, compared to $5.5 million for the twelve months ended December 31, 2023.
TAT’s U.S. subsidiaries are taxed based on federal and state tax laws. The U.S. federal statutory flat tax rate for tax years 2022 and 2023 is 21%. 46 Recently Issued Accounting Standards Recently adopted accounting pronouncements: 1 In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures.
TAT’s U.S. subsidiaries are taxed based on federal and state tax laws. The U.S. federal statutory flat tax rate for tax years 2023 and 2024 is 21%. Recently Issued Accounting Standards In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures.
Share in results of equity investment of affiliated companies for the twelve months ended December 31, 2023, amounted to a gain of $0.5 million compared to a gain of $0.2 million for the twelve months ended December 31, 2022.
Share in results of equity investment of affiliated companies for the twelve months ended December 31, 2024, amounted to a gain of $0.8 million compared to a gain of $0.5 million for the twelve months ended December 31, 2023.
TAT’s management believes the significant accounting policies which affect management’s more significant judgments and estimates used in the preparation of TAT’s consolidated financial statements and which are the most critical to aid in fully understanding and evaluating the reported financial results include the following: • Inventory valuation • Income taxes • Allowance for current expected credit losses (CECL) Inventory valuation Inventories are stated at the lower of cost and net realizable value.
TAT’s management believes the significant accounting policies which affect management’s more significant judgments and estimates used in the preparation of TAT’s consolidated financial statements and which are the most critical to aid in fully understanding and evaluating the reported financial results include the following: • Inventory valuation; • Income taxes; and • Allowance for current expected credit losses (CECL).
The decrease is primarily due to the increase in revenue in a higher percentage compared to the increase in our fixed costs and due to better employees utilizations in some segment. Cost of revenues for OEM of heat transfer solutions and aviation accessories .
The decrease is primarily due to the increase in revenue in a higher percentage compared to the increase in our fixed costs. Cost of revenues for OEM of heat transfer solutions and aviation accessories .
Impact of Currency Fluctuation and of Inflation TAT reports its financial results in dollars and receives payment primarily in dollars or dollar-linked NIS for all of its sales while it incurs a portion of its expenses, principally salaries and related personnel expenses in Israel, in NIS.
Impact of Currency Fluctuation and of Inflation TAT reports its financial results in US dollars and receives payment primarily in dollars or dollar-linked to NIS for all of its sales. However, a portion of its expenses, principally salaries and related personnel expenses in Israel, in NIS.
In the year ended December 31, 2023, net cash provided by financing activities was primarily attributable to an amount of $10.2million from issuance of common shares during 2023.
In the year ended December 31, 2023, net cash provided by financing activities was primarily attributable to an amount of $10.2 million from issuance of ordinary shares during 2023.
In management’s opinion, adequate provisions for income taxes have been made for all years. Although management believes that its estimates are reasonable, no assurance can be given that the final tax outcome of these issues will not be different than those reflected in its historical income tax provisions. TAT uses the liability method of accounting for income taxes.
Although management believes that its estimates are reasonable, no assurance can be given that the final tax outcome of these issues will not be different than those reflected in its historical income tax provisions. TAT uses the liability method of accounting for income taxes.
Cost of revenues for overhaul and coating of jet engine components . Cost of revenues for the overhaul and coating of jet engine components segment increased to $4.1 million for the year ended December 31, 2023 from $35. million for the year ended December 31, 2022, an increase of 17.6%.
Cost of revenues for the overhaul and coating of jet engine components segment increased to $4.8 million for the year ended December 31, 2024 from $4.1 million for the year ended December 31, 2023, an increase of 17.3%.
Revenues from MRO services for aviation components operating segment increased to $50.7 million for the year ended December 31, 2023, from $35.9 million for the year ended December 31, 2022, an increase of 41.5%. Revenues from overhaul and coating of jet engine components.
Revenues from MRO services for aviation components operating segment increased to $67.5 million for the year ended December 31, 2024, from $50.7 million for the year ended December 31, 2023, an increase of 32.9%. 71 Revenues from overhaul and coating of jet engine components.
Revenues from overhaul and coating of jet engine components segment increased to $6.8 million for the year ended December 31, 2023, from $5.8 million for the year ended December 31, 2022 an increase of 18.8%. Cost of revenues.
Revenues from overhaul and coating of jet engine components segment increased to $7.4 million for the year ended December 31, 2024, from $6.8 million for the year ended December 31, 2023, an increase of 7.8%. Cost of revenues.
Research and development expenses increased to $0.7 million for the twelve months ended December 31, 2023, from $0.5 million for the twelve months ended December 31, 2022, ,an increase of 50%.
Research and development expenses increased to $1.2 million for the twelve months ended December 31, 2024, from $0.7 million for the twelve months ended December 31, 2023, an increase of 74.5%.
Cash Flows The following table summarizes TAT’s cash flows for the periods presented: Year Ended December 31, (in thousands) 2023 2022 2021 Net cash provided by (used in) operating activities $ 2,255 $ (4,867 ) $ (2,269 ) Net cash used in investing activities (3,579 ) (16,120 ) (5,407 ) Net cash provided by financing activities 10,240 15,798 7,652 Net cash provided by (used in) discontinued activities - - 153 Net increase (decrease) in cash and cash equivalents 8,916 (5,189 ) 8,345 Cash and cash equivalents at beginning of the year 8,026 13,215 15,959 Cash and cash equivalents at end of the year $ 16,942 $ 8,026 $ 24,304 48 Net cash provided in operating activities for the year ended December 31, 2023, amounted to approximately $2.2 million, compared to net cash used in operating activities of ($4.9) million for the year ended December 31, 2022 and net cash used in by operating activities of ($2.3) million for the year ended December 31, 2021.
Cash Flows The following table summarizes TAT’s cash flows for the periods presented: Year Ended December 31, (in thousands) 2024 2023 2022 Net cash provided by (used in) operating activities $ (5,818 ) $ 2,255 $ (4,867 ) Net cash used in investing activities (3,851 ) (3,579 ) (16,120 ) Net cash provided by financing activities 161 10,240 15,798 Net increase (decrease) in cash and cash equivalents (9,508 ) 8,916 (5,189 ) Cash and cash equivalents at beginning of the year 16,942 8,026 13,215 Cash and cash equivalents at end of the year $ 7,434 $ 16,942 $ 8,026 Net cash used in operating activities for the year ended December 31, 2024, amounted to approximately $(5.8) million, compared to net cash provided in operating activities of $2.2 million for the year ended December 31, 2023 and net cash used in by operating activities of ($4.9) million for the year ended December 31, 2022.
Cost of revenues for MRO services for aviation components operating segment increased to $41.8 million for the year ended December 31, 2023 from $28.9 million for the year ended December 31, 2022, an increase of 44.6%.
Cost of revenues for MRO services for aviation components . Cost of revenues for MRO services for aviation components operating segment increased to $56.8 million for the year ended December 31, 2024 from $41.8 million for the year ended December 31, 2023, an increase of 35.9%.
General and administrative expenses as a percentage of revenues were 9.3% for the twelve months ended December 31, 2023, compared to 11.8% for the twelve months ended December 31, 2022. Other expenses (income).
General and administrative expenses as a percentage of revenues were 7.8% for the twelve months ended December 31, 2024, compared to 9.3% for the twelve months ended December 31, 2023. Other expenses (income). Other expenses (income) were ($0.4) million for the twelve months ended December 31, 2024, compared to ($0.4) million for the twelve months ended December 31, 2023.
General and administrative expenses were $106. million for the twelve months ended December 31, 2023, compared to $10 million for the twelve months ended December 31, 2022, an increase of 6%.
General and administrative expenses were $119. million for the twelve months ended December 31, 2024, compared to $10.6 million for the twelve months ended December 31, 2023, an increase of 12.7%.
TAT also has the following guarantees as of December 31, 2023: In order to secure TAT's liability to the Israeli customs, TAT provided bank guarantees in the amount of $42 thousand. The guarantees are linked to the consumer price index and will expire from December 2023 through December 2024. 50
TAT also has the following guarantees as of December 31, 2024: In order to secure TAT's liability to the Israeli customs, TAT provided bank guarantees in the amount of $28.6 thousand. The guarantees are linked to the consumer price index and will expire on2025. 84
Revenues from the MRO services for heat transfer components and OEM of heat transfer solutions operating segment increased to $33 million for the year ended December 31, 2023, from $24.8 million for the year ended December 31, 2022, an increase of 33.1%. Revenues from MRO services for aviation components.
Revenues from the MRO services for heat transfer components and OEM of heat transfer solutions operating segment increased to $43.9 million for the year ended December 31, 2024, from $33 million for the year ended December 31, 2023, an increase of 32.9%. Revenues from MRO services for aviation components.
Cost of revenues as a percentage of revenues in this segment decreased to 60 % in the year ended December 31, 2023 from 60.6% in the year ended December 31, 2022. Research and development, net.
Cost of revenues as a percentage of revenues in this segment increase to 65.2 % in the year ended December 31, 20234 from 60 % in the year ended December 31, 2023. Research and development, net.
Revenues from OEM of heat transfer solutions and aviation components. Revenues from this operating segment increased to $27.6 million for the year ended December 31, 2023, from $21.8 million for the year ended December 31, 2022, an increase of 26.1%. Revenues from MRO services for heat transfer components and OEM of heat transfer solutions.
Revenues from OEM of heat transfer solutions and aviation components. Revenues from this operating segment increased to $36.5 million for the year ended December 31, 2024, from $27.6 million for the year ended December 31, 2023, an increase of 32.3%. Revenues from MRO services for heat transfer components and OEM of heat transfer solutions.
Net cash provided by operating activities for the year ended December 31, 2023 was impacted by the company’s working capital needs.
Net cash used in operating activities for the year ended December 31, 2024 was impacted by the Company’s growing working capital needs.
Cost of raw material and parts is determined using the moving average basis. Cost of work in progress and finished products is calculated based on actual costs and the capitalized production costs, mainly labor and overhead and is determined based on the average basis.
Inventory Valuation Inventories are stated at the lower of cost and net realizable value. Cost of raw material and parts is determined using the moving average basis. Cost of work in progress and finished products is calculated based on actual costs and the capitalized production costs, mainly labor and overhead and is determined based on the average basis.
Cost of revenues for the MRO services for heat transfer components and OEM of heat transfer solutions operating segment increased to $30.1 million for the year ended December 31, 2023 from $20.8 million for the year ended December 31, 2022, an increase of 45.4%.
Cost of revenues for the MRO services for heat transfer components and OEM of heat transfer solutions operating segment increased to $35.9 million for the year ended December 31, 2024 from $30.1 million for the year ended December 31, 2023, an increase of 19.2%.
Management believes that anticipated cash flow from operations and its current cash balances will be sufficient to meet its cash requirements for at least 12 months from the financial statement issuance date.
TAT expects that its available cash and cash equivalents and cash flow generated from operations will be sufficient to fund its capital expenditures. 80 TAT’s management believes that anticipated cash flow from operations and its current cash balances will be sufficient to meet its cash requirements for at least 12 months from the financial statement issuance date.
These key performance indicators are primarily affected by the competitive landscape in which TAT operates and its ability to meet the challenges posed. 40 The following table presents, for the periods indicated, information concerning TAT’s results of operations: Year Ended December 31 2023 2022 2021 (in thousands) Revenues OEM of heat transfer solutions and aviation accessories $ 27,555 $ 21,844 $ 25,977 MRO services for heat transfer components and OEM of heat transfer solutions 32,995 24,796 18,846 MRO services for aviation components 50,760 35,879 33,232 Overhaul and coating of jet engine components 6,854 5,770 3,834 Eliminations (4,370 ) (3,733 ) (3,916 ) Total revenues 113,794 84,556 77,973 Cost of revenues OEM of heat transfer solutions and aviation accessories 20,193 18,778 24,044 MRO services for heat transfer components and OEM of heat transfer solutions 30,176 20,750 16,922 MRO services for aviation components 41,788 28,890 26,444 Overhaul and coating of jet engine components 4,110 3,495 2,978 Eliminations (4,941 ) (3,285 ) (3,685 ) Total cost of revenues 91,326 68,628 66,703 Gross profit 22,468 15,928 11,270 Research and development costs, net 715 479 517 Selling and marketing 5,523 5,629 5,147 General and administrative 10,558 9,970 8,354 Other expenses (income) (433 ) (90 ) (468 ) Restructuring expenses, net - 1,715 1,755 Operating income (loss) 6,075 (1,775 ) (4,035 ) Financial income (expense), net (1,330 ) 127 (540 ) Income (loss) before taxes on income (tax benefit) 4,745 (1,648 ) (4,575 ) Taxes on income (tax benefit) 576 98 (662 ) income (loss) before equity investment 4,169 (1,746 ) (3,913 ) Share in results of affiliated company and impairment of share in affiliated companies 503 184 (76 ) Net income (loss) from continued operation $ 4,672 $ (1,562 ) $ (3,989 ) Net income (loss) from discontinued operation - - 427 Net income (loss) $ 4,672 $ (1,562 ) $ (3,562 ) 41 The following table presents, for the periods indicated, information concerning TAT’s results of operations as a percentage of revenues: Year Ended December 31, 2023 2022 2021 Revenues OEM of heat transfer solutions and aviation components 24.2 % 25.8 % 33.3 % MRO services for heat transfer components and OEM of heat transfer solutions 29 29.3 24.2 MRO services for aviation components 44.5 42.4 42.6 Overhaul and coating of jet engine components 6 6.8 4.9 Eliminations (3.7 ) (4.4 ) (5 ) Total revenues 100 100 100 Cost of revenues OEM of heat transfer solutions and aviation components 17.4 22.2 30.8 MRO services for heat transfer components and OEM of heat transfer solutions 26.5 24.5 21.7 MRO services for aviation components 36.7 34.2 33.9 Overhaul and coating of jet engine components 3.6 4.1 3.8 Eliminations (4 ) (3.9 ) (4.7 ) Cost of revenues 80.2 81.2 85.5 Gross profit 19.7 18.8 14.5 Research and development costs, net 0.6 0.6 0.7 Selling and marketing 4.8 6.7 6.6 General and administrative 9.3 11.8 10.7 Other expenses (income) (0.4 ) (0.1 ) (0.6 ) Restructuring expenses, net 0 2 2.2 14.3 21 19.6 Operating income (loss) 5.3 (2.1 ) (5.1 ) Financial income (expense), net (1.2 ) 0.2 (0.7 ) Income (loss) before taxes on income (tax benefit) 4.2 (1.9 ) (5.8 ) Taxes on income (tax benefit) 0.5 0.1 (0.8 ) income (loss) before equity investment 3.7 (2.1 ) (5 ) Share in results of affiliated company and impairment of share in affiliated companies 0.4 0.2 (0.1 ) Net income (loss) from continued operation 4.1 (1.8 ) (5.1 ) Net income (loss) from discontinued operation - - 0.5 Net income (loss) 4.1 % (1.8 )% (4.6 )% ________________________ * Less than 0.1 percent 42 Year ended December 31, 2023 compared with Year ended December 31, 2022 Revenues.
These key performance indicators are primarily affected by the competitive landscape in which TAT operates and its ability to meet the challenges posed. 68 The following table presents, for the periods indicated, information concerning TAT’s results of operations: Year Ended December 31 2024 2023 2022 (in thousands) Revenues OEM of heat transfer solutions and aviation accessories $ 36,466 $ 27,555 21,844 MRO services for heat transfer components and OEM of heat transfer solutions 43,863 32,995 24,796 MRO services for aviation components 67,475 50,760 35,879 Overhaul and coating of jet engine components 7,392 6,854 5,770 Eliminations (3,080 ) (4,370 ) (3,733 ) Total revenues 152,116 113,794 84,556 Cost of revenues OEM of heat transfer solutions and aviation accessories 24,965 20,193 18,778 MRO services for heat transfer components and OEM of heat transfer solutions 35,978 30,176 20,750 MRO services for aviation components 56,798 41,788 28,890 Overhaul and coating of jet engine components 4,823 4,110 3,495 Eliminations (3,462 ) (4,941 ) (3,285 ) Total cost of revenues 119,102 91,326 68,628 Gross profit 33,014 22,468 15,928 Research and development costs, net 1,248 715 479 Selling and marketing 7,746 5,523 5,629 General and administrative 11,901 10,558 9,970 Other expenses (income) (383 ) (433 ) (90 ) Restructuring expenses, net - - 1,715 Operating income (loss) 12,502 6,075 (1,775 ) Financial income (expense), net (1,949 ) (1,330 ) 127 Income (loss) before taxes on income (tax benefit) 10,553 4,745 (1,648 ) Taxes on income (tax benefit) 195 576 98 income (loss) before equity investment 10,358 4,169 (1,746 ) Share in results of affiliated company and impairment of share in affiliated companies 809 503 184 Net income (loss) $ 11,167 $ 4,672 $ (1,562 ) 69 The following table presents, for the periods indicated, information concerning TAT’s results of operations as a percentage of revenues: Year Ended December 31, 2024 2023 2022 Revenues OEM of heat transfer solutions and aviation components 24.0 % 24.2 % 25.8 % MRO services for heat transfer components and OEM of heat transfer solutions 28.8 29 29.3 MRO services for aviation components 44.3 44.5 42.4 Overhaul and coating of jet engine components 4.9 6 6.8 Eliminations (2.0 ) (3.7 ) (4.4 ) Total revenues 100 100 100 Cost of revenues OEM of heat transfer solutions and aviation components 16.4 17.4 22.2 MRO services for heat transfer components and OEM of heat transfer solutions 23.7 26.5 24.5 MRO services for aviation components 37.3 36.7 34.2 Overhaul and coating of jet engine components 3.2 3.6 4.1 Eliminations (2.3 ) (4 ) (3.9 ) Cost of revenues 78.3 80.2 81.2 Gross profit 21.7 19.7 18.8 Research and development costs, net 0.8 0.6 0.6 Selling and marketing 5.1 4.8 6.7 General and administrative 7.8 9.3 11.8 Other expenses (income) (0.3 ) (0.4 ) (0.1 ) Restructuring expenses, net 0 0 2 13.4 14.3 21 Operating income (loss) 8.2 5.3 (2.1 ) Financial income (expense), net (1.3 ) (1.2 ) 0.2 Income (loss) before taxes on income (tax benefit) 6.9 4.2 (1.9 ) Taxes on income (tax benefit) 0.1 0.5 0.1 income (loss) before equity investment 6.8 3.7 (2.1 ) Share in results of affiliated company and impairment of share in affiliated companies 0.5 0.4 0.2 Net income (loss) 7.3 % 4.1 % (1.8 )% ________________________ * Less than 0.1 percent 70 Year ended December 31, 2024 compared with Year ended December 31, 2023 Revenues.
Cost of revenues was $91.3 million for the twelve months ended December 31, 2023, compared to $68.6 million for the twelve months ended December 31, 2022, an increase of 33.1%. Cost of revenues as a percentage of revenues decreased to 80.2% for the twelve months ended December 31, 2023, from 81.2% for the twelve months ended December 31, 2022.
Cost of revenues was $119.1 million for the twelve months ended December 31, 2024, compared to $91.3 million for the twelve months ended December 31, 2023, an increase of 30.4%. Cost of revenues as a percentage of revenues decreased to 78.3% for the twelve months ended December 31, 2024, from 80.2% for the twelve months ended December 31, 2023.
In the year ended December 31, 2022, net cash provided by financing activities was primarily attributable to an amount of $16.7 million in commercial loans and lines of credit extended to the company during 2022. See Note 10 in the company's financial statements.
In the year ended December 31, 2022, net cash provided by financing activities was primarily attributable to an amount of $16.7 million in commercial loans and lines of credit extended to the Company during 2022. For more information on the Company’s cash flow, see Note 8 in the Company's financial statements. A. Research and Development, Patents and Licenses Not applicable.
The principal factors that affect the operating income of TAT’s four segments, in addition to their gross profit, is the expenditure on selling and marketing expenses and general and administrative expenses.
TAT’s gross margin is affected by the proportion of its revenues generated from each of its operational segments. 62 The principal factors that affect the operating income of TAT’s four segments, in addition to their gross profit, is the expenditure on selling and marketing expenses and general and administrative expenses.
Cost of revenues for this operating segment was $20.2 million for the year ended December 31, 2023, compared to $18.8 million for the year ended December 31, 2022, an increase of 7.5%.
Cost of revenues for this operating segment was $25 million for the year ended December 31, 2024, compared to $20.2 million for the year ended December 31, 2023, an increase of 23.6%.
Other expenses (income) were ($0.4) million for the twelve months ended December 31, 2023, compared to ($0.1) million for the twelve months ended December 31, 2022, an increase of 480%. 44 Other income as a percentage of revenues were 0.4% for the twelve months ended December 31, 2023, compared to 0.1% for the twelve months ended December 31, 2022.
Other income as a percentage of revenues were 0.3% for the twelve months ended December 31, 2024, compared to 0.4% for the twelve months ended December 31, 2023. Financial expenses, net. Financial income, net for the twelve months ended December 31, 2024 were $1.9 million, compared to $1.3 million of financial expenses for the twelve months ended December 31, 2023.
TAT writes down obsolete or slow-moving inventory in an amount equal to the difference between the cost of inventory and the net realizable value based upon assumptions about future demand, market conditions and sale forecasts.
TAT writes down obsolete or slow-moving inventory in an amount equal to the difference between the cost of inventory and the net realizable value based upon assumptions about future demand, market conditions and sale forecasts. 66 If actual market conditions are less favorable than TAT anticipates, additional inventory write-downs may be required.
Selling and marketing expenses as a percentage of revenues were 4.8% for the twelve months ended December 31, 2023, compared to 6.7% for the twelve months ended December 31, 2022, a decrease of 1.9 %. General and administrative.
Selling and marketing expenses as a percentage of revenues were 5.1% for the twelve months ended December 31, 2024, compared to 4.8% for the twelve months ended December 31, 2023, an increase of 0.3 %. General and administrative.
Total revenues were $113.8 million for the twelve months ended December 31, 2023, compared to $84.5 million for the twelve months ended December 31, 2022, an increase of 34.5%.
Total revenues were $152.1 million for the twelve months ended December 31, 2024, compared to $113.8 million for the twelve months ended December 31, 2023, an increase of 33.7%.
Tabular Disclosure of Contractual Obligations The following table summarizes our minimum contractual obligations and commercial commitments as of December 31, 2023, and the effect we expect them to have on our liquidity and cash flow in future periods : Contractual Obligations Payments due by Period (Amounts in Thousands of US$) Total Less than 1 year 1-3 Years 3-5 Years More than 5 years Operating lease obligations 2,730 1,033 1,147 550 - Purchase commitments 24,927 10,732 4,195 - - Total $ 27,657 $ 21,765 $ 4,342 $ 550 $ - In addition, we have long-term liabilities for severance pay that are calculated pursuant to Israeli severance pay law generally based on the most recent salary of the employees multiplied by the number of years of employment, as of the balance sheet date.
Tabular Disclosure of Contractual Obligations The following table summarizes our minimum contractual obligations and commercial commitments as of December 31, 2024, and the effect we expect them to have on our liquidity and cash flow in future periods : Contractual Obligations Payments due by Period (Amounts in Thousands of US$) Total Less than 1 year 1-3 Years 3-5 Years More than 5 years Operating lease obligations 2,285 939 916 276 154 Purchase commitments 38,219 33,578 4,241 400 - Total $ 40,504 34,517 5,157 676 154 _________________ In addition, with respect to certain employees we have long-term liabilities for severance pay that are calculated pursuant to Israeli severance pay law generally based on the most recent salary of the employees multiplied by the number of years of employment, as of the balance sheet date.
TAT’s cost of revenues for OEM operations and MRO services consists of component and material costs, direct labor costs, quality assurance costs, shipping expenses, royalties, overhead related to manufacturing and depreciation of manufacturing equipment. TAT’s gross margin is affected by the proportion of its revenues generated from each of its operational segments.
TAT’s cost of revenues for OEM operations and MRO services consists of component and material costs, direct labor costs, quality assurance costs, shipping expenses, royalties, overhead related to manufacturing and depreciation of manufacturing equipment.
Cost of revenues as a percentage of revenues in this segment increased to 91.4% in the year ended December 31, 2023 from 83.6% for the year ended December 31, 2022.
Cost of revenues as a percentage of revenues in this segment increased to 84.2% in the year ended December 31, 2024 from 82.5% for the year ended December 31, 2023.
Cost of revenues as a percentage of revenues in this segment decreased to 71.9% in the year ended December 31, 2023, from 86% for the year ended December 31, 2022. The decrease is mainly due better direct labor utilization and increase in revenues in percentages which are higher compared to our fixed costs. .
Cost of revenues as a percentage of revenues in this segment decreased to 68.5% in the year ended December 31, 2024, from 71.9% for the year ended December 31, 2023. The decrease is primarily due to the increase in revenue in a higher percentage compared to the increase in our fixed costs.
Taxes on income for the twelve months ended December 31, 2023, amounted to $0.5 million, compared to $0.1 million tax benefits for the twelve months ended December 31, 2022. Share in results of equity investment of affiliated companies .
The increase was mainly due to unfavorable changes in exchange rates USD / ILS. 73 Taxes on income (tax benefit). Taxes on income for the twelve months ended December 31, 2024, amounted to $0.2 million, compared to $0.5 million tax benefits for the twelve months ended December 31, 2023. Share in results of equity investment of affiliated companies .
The loans bear annual interest of 6.65% which are paid in equal monthly installments until 2028 During 2022 TAT subsidiary received a credit line from a US commercial bank in the amount of $7 million with maturity date of February 2024 and carry an interest of WSJP+0.1% .
In February 2022, a TAT US subsidiary received a credit line from a US commercial bank in the amount of $7 million with a maturity date of February 2024 carrying an interest of WSJP+0.1%.
In recent years, Israel has established commercial and trade relations with a number of other nations, including Russia, China, India, Turkey and other nations in Eastern Europe and the Asia-Pacific region.
During the recent years, Israel has expended its commercial and trade relations to include additional nations, such as Russia, China, India, Turkey and other nations in Eastern Europe and the Asia-Pacific region.
In addition, the interpretation requires significant judgment with respect to determining what constitutes an individual tax position as well as assessing the outcome of each tax position. Changes in judgment as to recognition or measurement of tax positions can materially affect the estimate of the effective tax rate and consequently, affect our operating results.
In addition, the interpretation requires significant judgment with respect to determining what constitutes an individual tax position as well as assessing the outcome of each tax position.
On January 1, 1993, an agreement between Israel and the European Free Trade Association, known as the “EFTA,” established a free-trade zone between Israel and the EFTA nations.
In January 1993, Israel entered into a free trade agreement with the European Free Trade Association (“EFTA”) established a free-trade zone between Israel and the EFTA nations.
The amended guidance is effective for fiscal years beginning after December 15, 2024. The guidance can be applied either prospectively or retrospectively. We are evaluating the impact this amended guidance may have on the footnotes to our consolidated financial statements. 2.
The amended guidance is effective for fiscal years beginning after December 15, 2024. The guidance can be applied either prospectively or retrospectively.
In the year ended December 31, 2021, net cash used by investing activities was $15.6 million, out of which approximately $5.8 million was attributed to investment in machinery and buildings due to the Company's restructuring plan.
In the year ended December 31, 2024, net cash used by investing activities was $3.9 million, out of which approximately $5.1 million was attributed to investment mainly in new machinery and equipment and $1 million from sale of machinery and equipment.
TAT’s revenues from its four operational segments for the three years ended December 31, 2023 were as follows: Year Ended December 31, 2023 2022 2021 Revenues in Thousands % of Total Revenues Revenues in Thousands % of Total Revenues Revenues in Thousands % of Total Revenues Revenues OEM of heat transfer solutions and aviation accessories 27,555 24.2 % 21,844 25.8 % 25,997 33.3 % MRO services for heat transfer components and OEM of heat transfer solutions 32,995 29 % 24,796 29.3 % 18,846 24.2 % MRO services for aviation components 50,760 44.5 % 35,879 42.4 % 33,232 42.6 % Overhaul and coating of jet engine components 6,854 6 % 5,770 6.8 % 3,834 4.9 % Eliminations (4,370 ) (3.7 )% (3,733 ) (4.3 )% (3,916 ) (5 )% Total Revenues $ 113,794 100 % $ 84,556 100 % $ 77,973 100 % 37 The following table reflects the geographic breakdown of TAT’s revenues for each of the three years ended December 31, 2023: Years Ended December 31, 2023 2022 2021 Revenues in Thousands % of Total Revenues Revenues in Thousands % of Total Revenues Revenues in Thousands % of Total Revenues United States $ 7,698 7 % $ 56,570 66.9 % $ 47,947 61.5 % Israel 81,999 72 % 7,162 8.5 % 7,745 9.9 % Other 24,097 21 % 20,824 24.6 % 22,281 28.6 % Total $ 113,794 100 % $ 84,556 100.0 % $ 77,973 100.0 % Costs and Expenses Cost of revenues.
Sources of Revenues TAT, directly and through its subsidiaries, provides a variety of solutions and services to the commercial and military aerospace and ground defense industries, including: (i) OEM of heat transfer solutions and aviation components, such as heat exchangers, pre-coolers and oil/fuel hydraulic coolers (through TAT Israel); (ii) MRO services for heat transfer components and OEM of heat transfer solutions (through our Limco subsidiary); (iii) MRO services for aviation components (through our Piedmont subsidiary); and (iv) Overhaul and coating of jet engine components (through our Turbochrome subsidiary). 63 TAT’s revenues from its four operational segments for the three years ended December 31, 2024 were as follows: Year Ended December 31, 2024 2023 2022 Revenues in Thousands % of Total Revenues Revenues in Thousands % of Total Revenues Revenues in Thousands % of Total Revenues Revenues OEM of heat transfer solutions and aviation accessories 36,466 24 % 27,555 24.2 % 21,844 25.8 % MRO services for heat transfer components and OEM of heat transfer solutions 43,863 28.8 % 32,995 29 % 24,796 29.3 % MRO services for aviation components 67,475 44.3 % 50,760 44.5 % 35,879 42.4 % Overhaul and coating of jet engine components 7,392 4.9 % 6,854 6 % 5,770 6.8 % Eliminations (3,080 ) (2 )% (4,370 ) (3.7 )% (3,733 ) (4.3 )% Total Revenues $ 152,116 100 % $ 113,794 100 % $ 84,556 100 % The following table reflects the geographic breakdown of TAT’s revenues for each of the three years ended December 31, 2024: Years Ended December 31, 2024 2023 2022 Revenues in Thousands % of Total Revenues Revenues in Thousands % of Total Revenues Revenues in Thousands % of Total Revenues United States 104,326 68.6 % $ 81,999 72 % $ 56,570 66.9 % Israel 7,868 5.2 % 7,697 7 % 7,162 8.5 % Other 39,922 26.2 % 24,098 21 % 20,824 24.6 % Total $ 152,116 100 % $ 113,794 100 % $ 84,556 100.0 % 64 Costs and Expenses Cost of revenues.
The loan bears annual interest rate of 6.65% (Prime Rate +0.9%) and is repaid in equal monthly installment as of [April 2022] through March 2029.
In March 2022, TAT received a loan from a commercial bank in the amount of $3.7 million. The loan bears annual interest (Prime Rate +0.9%) and paid in equal monthly installment as of April 2022 through March 2029. c.
Cost of revenues as a percentage of revenues in this segment increased to 82.5% in the year ended December 31, 2023 from 80.5% for the year ended December 31, 2022. The increase is mainly due to the increase in the cost of components which increased at a higher rate compared to the increase in selling prices.
Cost of revenues as a percentage of revenues in this segment decreased to 82% in the year ended December 31, 2024 from 91.4% for the year ended December 31, 2023. The decrease is primarily due to the increase in revenue in a higher percentage compared to the increase in our fixed costs.
See “RISK FACTORS” for a description of governmental, economic, fiscal, monetary or political policies or factors (including the ongoing war and hostilities with Hamas and Hezbollah) that have materially affected or could materially affect TAT’s operations. 45 Trade Relations Israel is a member of the United Nations, the International Monetary Fund, the International Bank for Reconstruction and Development and the International Finance Corporation.
Please refer to “ Item 3D – Risk Factors ” for a description of governmental, economic, fiscal, monetary, or political policies or factors (including the ongoing war and hostilities with Hamas, Hezbollah and Iran) that have materially affected or could materially affect TAT’s operations.
If actual market conditions are less favorable than TAT anticipates, additional inventory write-downs may be required. 39 Income Taxes TAT operates within multiple tax jurisdictions and is subject to audits in these jurisdictions. These audits can involve complex issues, which may require an extended period of time to resolve.
Income Taxes TAT operates within multiple tax jurisdictions and is subject to audits in these jurisdictions. These audits can involve complex issues, which may require an extended period of time to resolve. In management’s opinion, adequate provisions for income taxes have been made for all years.
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amended guidance requires incremental reportable segment disclosures, primarily about significant segment expenses. The amendments also require entities with a single reportable segment to provide all disclosures required by these amendments, and all existing segment disclosures.
The Company is currently evaluating this ASU to determine its impact on the Company's disclosures Recently adopted accounting pronouncements: In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amended guidance requires incremental reportable segment disclosures, primarily about significant segment expenses.
Israel is a member of the World Trade Organization and is a signatory to the General Agreement on Tariffs and Trade. In addition, Israel has been granted preferences under the Generalized System of Preferences from the United States, Australia, Canada and Japan. These preferences allow Israel to export the products covered by such programs either duty-free or at reduced tariffs.
In addition, Israel benefits from preferences under the Generalized System of Preferences from countries including the United States, Australia, Canada and Japan, enabling Israel to export the products covered by such programs either duty-free or at reduced tariffs. 74 In July 1975, Israel and the European Union Community (the “European Union”) concluded a Free Trade Agreement, granting certain advantages for Israeli exports to most European countries while requiring Israel to gradually reduce its tariffs on imports from these countries.
The amendments will be applied retrospectively to all prior periods presented in the financial statements and is effective for fiscal years beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024, with early adoption permitted. We are evaluating the impact this amended guidance may have on the footnotes to our consolidated financial statements.
The amendments also require entities with a single reportable segment to provide all disclosures required by these amendments, and all existing segment disclosures. The amendments will be applied retrospectively to all prior periods presented in the financial statements and are effective for fiscal years beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024.
During 2022 TAT received a long-term loan of $5 million from a commercial bank in the US, loan bears an annual fixed interest rate of 2.9% and maturity date of March 2024 During 2023 the company secured another short term line of credit for the amount of $4.5 million from an Israeli bank.
In March 2022, another TAT US subsidiary received a credit line of $5 million from a commercial bank. This credit line bears an initial annual fixed interest of 2.9%. In April 2024, the US subsidiary signed a contract extending the existing line of credit by 2 years. This credit line bears annual fixed interest of 7.25%.
The loans bear annual interest of 3.75% and 4.2% and are repaid in equal monthly installments until 2029 and 2031. In addition, TAT received loans from Machinery Finance Resources in 2023 in the total amount of $0.7 million.
As of December 31, 2024, $1.5 million of this credit line was utilized. e. In 2023 a TAT US subsidiary received loans from Machinery Finance in the total amount of $0.7 million. The loans bear annual interest which are paid in equal monthly installments until 2028. f.
Losses generated prior to January 1, 2018 will still be subject to the 20-year carryforward limitation.
Changes in judgment as to recognition or measurement of tax positions can materially affect the estimate of the effective tax rate and consequently, affect our operating results. 67 Losses generated prior to January 1, 2018 will still be subject to the 20-year carryforward limitation.
This new loan is in addition to four previous loans received during 2020 and 2021 in an aggregate amount of $6.3 million. 47 During 2022, TAT received loans from a commercial bank in the US in an aggregate amount of $7.9 million. These loans are secured with a first degree lien on TAT’s US subsidiaries equipment.
In May 2022, a TAT US subsidiary received a loan from a commercial bank in the US in the amount of $3 million. The loan is secured with a first-degree lien on the US subsidiary’s equipment. The loan bears an annual interest which is paid in equal monthly installments until 2029.
In the year ended December 31, 2021, net cash provided by financing activities was primarily attributable to a $3 million short-term line of credit received from a commercial bank and to loans of $3 million received in connection with a loan guaranteed by Israeli government due to Covid-19 government support. 49 A. Research and Development, Patents and Licenses Not applicable.
In the year ended December 31, 2024, net cash provided by financing activities was primarily attributable to an amount of $9.8 million from issuance of ordinary shares during 2024 net of $9.6 million repayment of short term credit line and repayment of long term loans.
The newly issued shares represent approximately 11.5% of the Company’s issued and outstanding Ordinary Shares after the consummation of such sale. As of December 31, 2023, TAT had cash and cash equivalents of $16.9 million compared to $ 8 million as of December 31, 2022, an increase of $8.9 million primarily due to the private placement.
As of December 31, 2024, TAT had cash and cash equivalents of $7.4 million compared to $ 16.9 million as of December 31, 2023, a decrease of $9.5 million primarily due to an increase in working capital needs (mainly an increase of inventory by $17.1 million and an increase of account receivables by $9.6 million).
TAT’s general and administrative expenses are related to compensation and related expenses for executive, finance and administrative personnel, professional fees such as legal, audit, SOX, internal audit, insurance premiums and general corporate expenses and related costs for facilities and equipment. 36 Sources of Revenues TAT, directly and through its subsidiaries, provides a variety of solutions and services to the commercial and military aerospace and ground defense industries, including: (i) OEM of heat transfer solutions and aviation components, such as heat exchangers, pre-coolers and oil/fuel hydraulic coolers (through TAT Israel); (ii) MRO services for heat transfer components and OEM of heat transfer solutions (through our Limco subsidiary); (iii) MRO services for aviation components (through our Piedmont subsidiary); and (iv) Overhaul and coating of jet engine components (through our Turbochrome subsidiary).
TAT’s general and administrative expenses are related to compensation and related expenses for executive, finance and administrative personnel, professional fees such as legal, audit, SOX, internal audit, insurance premiums and general corporate expenses and related costs for facilities and equipment.
Removed
The increase is primarily due to the transfer of heat exchange cores manufacturing capabilities to Limco in 2022, which increase the labor cost and raw material usage as part of the learning curve in the new operational production line and increase in depreciation for the new production line. 43 Cost of revenues for MRO services for aviation components .
Added
The increase is mainly due to the increase in the cost of components which increased at a higher rate compared to the increase in selling prices. 72 Cost of revenues for overhaul and coating of jet engine components .
Removed
Restructuring expenses. The company completed its restructuring plan by the end of 2022. Restructuring expenses as a percentage of revenues were 2% for the twelve months ended December 31, 2022 Financial expenses, net.
Added
Trade Relations Israel is a member of the United Nations, the International Monetary Fund, the International Bank for Reconstruction and Development, and the International Finance Corporation. Additionally, Israel is a member of the World Trade Organization and is a signatory to the General Agreement on Tariffs and Trade.
Removed
Financial income, net for the twelve months ended December 31, 2023 were $1.3 million, compared to $0.1 million of financial expenses for the twelve months ended December 31, 2022. The increase was mainly due to an increase in the interest rates and loans proceeds in 2023 and lower exchange rate differences.
Added
We are evaluating the impact this amended guidance may have on the footnotes to our consolidated financial statements. 76 In November 2024, the FASB issued ASU No. 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40).

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Igal Zamir was appointed TAT’s Chief Executive Officer and President in April 2016. Prior to joining TAT, from 2009 until 2013, Mr. Zamir served as President at Mapco Express, a wholly-owned subsidiary of Delek US Holdings Inc., a NYSE-listed company which owns and operates 370 convenient stores and gas stations in the southeastern region of the United States.
Igal Zamir was appointed as TAT’s Chief Executive Officer and President in April 2016. Prior to joining TAT, from 2009 until 2013, Mr. Zamir served as President at Mapco Express, a wholly-owned subsidiary of Delek US Holdings Inc., a NYSE-listed company which owns and operates 370 convenient stores and gas stations in the southeastern region of the United States.
We refer to the five individuals for whom disclosure is provided herein as our “Covered Executives.” For purposes of the table and the summary below, and in accordance with the above-mentioned securities regulations, “compensation” includes base salary, bonuses, equity-based compensation, retirement or termination payments, benefits and perquisites such as car, phone and social benefits and any undertaking to provide such compensation.
We refer to the five individuals for whom disclosure is provided herein as our “Covered Executives.” 90 For purposes of the table and the summary below, and in accordance with the above-mentioned securities regulations, “compensation” includes base salary, bonuses, equity-based compensation, retirement or termination payments, benefits and perquisites such as car, phone and social benefits and any undertaking to provide such compensation.
In addition to the majority vote, the shareholder approval must satisfy either of two additional tests: • The majority includes at least a majority of the shares voted by shareholders other than our controlling shareholders or shareholders who have a personal interest in the adoption of the compensation policies; or • The total number of shares held by non-controlling shareholders and disinterested shareholders that voted against the adoption of the compensation policies does not exceed 2% of the aggregate voting rights of our company.
In addition to the majority vote, the shareholder approval must satisfy either of two additional tests: • The majority includes at least a majority of the shares voted by shareholders other than our controlling shareholders or shareholders who have a personal interest in the adoption of the compensation policies; or 100 • The total number of shares held by non-controlling shareholders and disinterested shareholders that voted against the adoption of the compensation policies does not exceed 2% of the aggregate voting rights of our company.
The duty of loyalty requires that an office holder acts in good faith and for the benefit of the company, including (i) avoiding any conflict of interest between the office holder’s position in the company and any other position he holds or his personal affairs, (ii) avoiding any competition with the company’s business, (iii) avoiding exploiting any business opportunity of the company in order to receive personal gain for the office holder or others, and (iv) disclosing to the company any information or documents relating to the company’s affairs that the office holder has received by virtue of his position as an office holder. 58 Disclosure of Personal Interests of an Office Holder; Approval of Transactions with Office Holders The Israeli Companies Law requires that an office holder promptly, and no later than the first board meeting at which such transaction is considered, disclose any personal interest that he or she may have and all related material information known to him or her and any documents in their position, in connection with any existing or proposed transaction by us.
The duty of loyalty requires that an office holder acts in good faith and for the benefit of the company, including (i) avoiding any conflict of interest between the office holder’s position in the company and any other position he holds or his personal affairs, (ii) avoiding any competition with the company’s business, (iii) avoiding exploiting any business opportunity of the company in order to receive personal gain for the office holder or others, and (iv) disclosing to the company any information or documents relating to the company’s affairs that the office holder has received by virtue of his position as an office holder. 97 Disclosure of Personal Interests of an Office Holder; Approval of Transactions with Office Holders The Israeli Companies Law requires that an office holder promptly, and no later than the first board meeting at which such transaction is considered, disclose any personal interest that he or she may have and all related material information known to him or her and any documents in their position, in connection with any existing or proposed transaction by us.
Collective bargaining agreements are signed for specified terms and are renewed from time to time. During 2022, TAT's management and the union of TAT Israel agreed to enter into a new collective bargaining agreement with respect to employees of TAT Israel. The new agreement was signed on September 7, 2022 and will be in effect until April 30, 2025.
Collective bargaining agreements are signed for specified terms and are renewed from time to time. During 2022, TAT's management and the union of TAT Israel agreed to enter into a collective bargaining agreement with respect to employees of TAT Israel. The agreement was signed on September 7, 2022 and will be in effect until April 30, 2025.
Ben Yair is a Certified Public Accountant and holds a B.A. in Economics and Accounting from the Ben-Gurion University in Israel. 51 Mr. Jason Lewandowski was appointed as TAT’s COO in December 2022. Mr. Lewandowski began his professional career as a Surface Warfare Officer in the United States Navy in May of 1997.
Ben Yair is a Certified Public Accountant and holds a B.A. in Economics and Accounting from the Ben-Gurion University in Israel. Mr. Jason Lewandowski was appointed as TAT’s COO in December 2022. Mr. Lewandowski began his professional career as a Surface Warfare Officer in the United States Navy in May of 1997.
Our board of directors has determined that each member of our audit committee qualifies as an audit committee financial expert, as defined by rules of the SEC. The audit committee meets at least once each quarter. Compensation Committee Under the Israeli Companies Law, the board of directors of any public company must establish a compensation committee.
Our board of directors has determined that each member of our audit committee qualifies as an audit committee financial expert, as defined by rules of the SEC. The audit committee meets at least once each quarter. 95 Compensation Committee Under the Israeli Companies Law, the board of directors of any public company must establish a compensation committee.
Active Chairman CEO Other Executives Company Target 100% 75% - 100% 50%-100% Personal KPIs NONE NONE 0%-30% Personal Evaluation NONE 0%-25% 0%-30% The company target shall be determined in accordance with all or part of pre-determined targets of the sales budget, gross profit, o perating profit, EBITDA, net income and net cash from operating activities, all in accordance with TAT’s annual budget.
Active Chairman CEO Other Executives Company Target 100% 75% - 100% 50%-100% Personal KPIs NONE NONE 0%-30% Personal Evaluation NONE 0%-25% 0%-30% The company target shall be determined in accordance with all or part of pre-determined targets of the sales budget, gross profit, operating profit, EBITDA, net income and net cash from operating activities, all in accordance with TAT’s annual budget.
He served as commander of the IDF Ground Forces Command, and later as Head of the Israeli Defense Intelligence, a post he held until his retirement in 2002. Mr. Malka holds B.A. in History from Tel Aviv University, Israel. He also graduated from the IDF Staff & Command College and its National Defense Academy. 52 Mr.
He served as commander of the IDF Ground Forces Command, and later as Head of the Israeli Defense Intelligence, a post he held until his retirement in 2002. Mr. Malka holds B.A. in History from Tel Aviv University, Israel. He also graduated from the IDF Staff & Command College and its National Defense Academy. 88 Mr.
Ronnie Meninger joined TAT's Board of Directors as an independent director in November 2021. Mrs. Meninger brings vast experience in industrial companies, having served as CEO of Chemada Fine Chemicals Ltd. and Algatechnologies Ltd. She also served in other managerial positions in various companies. Mrs. Meninger serves on the Board of Directors of Kafrit, Albaad and Maytronics.
Ronnie Meninger joined TAT's Board of Directors as an independent director in November 2021. Mrs. Meninger brings vast experience in industrial companies, having served as CEO of Chemada Fine Chemicals Ltd. and Algatechnologies Ltd. She also served in other managerial positions in various companies. Mrs. Meninger serves on the Board of Directors of Kafrit, Albaad and Maytronics and OSG Group.
(2) Cash compensation amounts denominated in currencies other than the U.S. dollar were converted into U.S. dollars at the average conversion rate for the year ended December 31, 2023. (3) Amounts reported in this column include benefits and perquisites, including those mandated by applicable law.
(2) Cash compensation amounts denominated in currencies other than the U.S. dollar were converted into U.S. dollars at the average conversion rate for the year ended December 31, 2024. (3) Amounts reported in this column include benefits and perquisites, including those mandated by applicable law.
For the last 6 years she acts as a business consultant for companies and startups. Mrs. Meninger holds a BSc in Life Sciences and an MBA from the Hebrew University of Jerusalem. Mr. Aviram Halevi joined TAT’s Board of Directors as an external director in November 2013. Mr.
For the last 9 years she acts as a business consultant for companies and startups. Mrs. Meninger holds a BSc in Life Sciences and an MBA from the Hebrew University of Jerusalem. Mr. Aviram Halevi joined TAT’s Board of Directors as an external director in November 2013. Mr.
In his final position with Honeywell he was a multi-site Sr. Director of Operations overseeing 2 OEM facilities that manufactured break pads and air foils, and 3 R&O facilities that repaired and tested aircraft engines and APU’s. In 2017 Mr.
In his final position with Honeywell he was a multi-site Sr. Director of Operations overseeing 2 OEM facilities that manufactured brake pads and air foils, and 3 R&O facilities that repaired and tested aircraft engines and APU’s. In 2017 Mr.
Lewandowski holds a Bachelor of Science in Electrical Engineering from Marquette University (1997) and an MBA from Carnegie Mellon’s Tepper School of Business (2005). Mr. Liron Topaz has been with TAT since 2017 and prior to his current role as General Manager of TAT Israel, served as TAT’s Sales and Marketing Executive Vice President. Prior to joining TAT, Mr.
Lewandowski holds a Bachelor of Science in Electrical Engineering from Marquette University (1997) and an MBA from Carnegie Mellon’s Tepper School of Business (2005). 86 Mr. Liron Topaz has been with TAT since 2017 and prior to his current role as General Manager of TAT Israel, he served as TAT’s Sales and Marketing Executive Vice President.
On August 30, 2018 the Company's compensation committee, followed by the Board of Directors, approved the amended and restated company's 2012 Plan. On October 4, 2018 the company's amended and restated 2012 Plan was approved at the annual general meeting of shareholders.
On August 30, 2018 the Company's compensation committee, followed by the Board of Directors, approved the amended and restated company's 2012 Plan (the “2012 Plan”). On October 4, 2018 the Company's amended and restated 2012 Plan was approved at the annual general meeting of shareholders.
Israeli companies listed on certain stock exchanges outside Israel, including The NASDAQ Global Market, such as our company, may appoint an external director for additional terms of not more than three years subject to certain conditions.
Israeli companies listed on certain stock exchanges outside Israel, including NASDAQ, such as our Company, may appoint an external director for additional terms of not more than three years subject to certain conditions.
Glick served as the CEO of Overseas Commerce, a public company traded on the Tel Aviv Stock Exchange. Prior to that Mr. Glick was Vice President of Clal Trading, a public company as well. Mr.Glick is a CPA(ISR) and holds a B.A. Economics from Bar-Elan University. Mrs.
Glick served as the CEO of Overseas Commerce, a public company traded on the Tel Aviv Stock Exchange. Prior to that Mr. Glick was CFO of Clal Trading, a public company as well. Mr.Glick is a CPA (ISR) and holds a B.A. in Economics from Bar-Elan University. Mrs.
(4) Amounts reported in this column refer to variable compensation mainly bonus payments according to the company's incentive plan as recorded in our financial statements for the year ended December 31, 2023 and were paid during 2023 in respect of performance related to fiscal year 2022 results.
(4) Amounts reported in this column refer to variable compensation mainly bonus payments according to the company's incentive plan as recorded in our financial statements for the year ended December 31, 2024 and were paid during 2024 in respect of performance related to fiscal year 2023 and 2022 results and special bonus for the private placements was paid in 2024.
(5) Amounts reported in this column represent the expense recorded in our financial statements for the year ended December 31, 2023 in connection with equity-based compensation granted to the Covered Executive. 54 C. Board Practices Introduction According to the Israeli Companies Law and our articles of association, the management of our business is vested in our board of directors.
(5) Amounts reported in this column represent the expense recorded in our financial statements for the year ended December 31, 2024 in connection with equity-based compensation granted to the Covered Executive. 91 C. Board Practices Introduction Under the Israeli Companies Law and our articles of association, the management of our business is vested in our board of directors.
Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation Not applicable. 66
F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation Not applicable.
Of such employees, 168 were located in Israel and 372 were employed by Limco and Piedmont located in the United States. 64 Employees in Israel are employed under collective or individual employment agreements. Senior employees in special positions and members of management are employed under individual agreements.
Of such employees, 194 were located in Israel and 440 were employed by Limco and Piedmont located in the United States. Employees in Israel are employed under collective or individual employment agreements. Senior employees in special positions and members of management are employed under individual agreements.
According to the 2022 Plan an aggregate of 550,000 options exercisable into up to 550,000 ordinary shares, 0.9 NIS par value, of TAT may be granted to certain members of our board of directors and certain senior executives at an exercise price not less than the fair market value of the shares covered by the option on the date of grant Total aggregate option pool under the Plans is 1,530,000 ordinary share of the company.
According to the 2022 Plan an aggregate of 550,000 options exercisable into up to 550,000 ordinary shares, 0.9 NIS par value, of TAT may be granted to certain members of our board of directors and certain senior executives at an exercise price not less than the fair market value of the shares covered by the option on the date of grant.
In this respect, the compensation committee and the board of directors shall have the right to determine a higher (but not lower) entitlement threshold. 61 Indemnification and Insurance of Directors and Officers Insurance of Office Holders The Israeli Companies Law provides that a company may, if permitted by its articles of association, enter into a contract to insure an office holder for acts or omissions performed by the office holder in such capacity for: • Breach of his or her duty of care to the company or to another person; • Breach of his or her duty of loyalty to the company, provided that the office holder acted in good faith and had reasonable cause to assume that his act would not prejudice the company’s interests; • Monetary liability imposed upon the office holder in favor of another person; • A monetary obligation imposed on the office holder in favor of another person who was injured by a violation, as this term is defined in section 52(54)(a)(1)(a) of the Israeli Securities Law, 1968 (“Israeli Securities Law”); and • Expenses expended by the office holder, including reasonable litigation expenses, and including attorney's fees, in respect of any proceeding under chapters 8-C, 8-D or 9-A of the Israeli Securities Law or in respect to any monetary sanction.
A copy of the Clawback Policy is filed as Exhibit 97 to this Annual Report. 102 Indemnification and Insurance of Directors and Officers Insurance of Office Holders The Israeli Companies Law provides that a company may, if permitted by its articles of association, enter into a contract to insure an office holder for acts or omissions performed by the office holder in such capacity for: • Breach of his or her duty of care to the company or to another person; • Breach of his or her duty of loyalty to the company, provided that the office holder acted in good faith and had reasonable cause to assume that his act would not prejudice the company’s interests; • Monetary liability imposed upon the office holder in favor of another person; • A monetary obligation imposed on the office holder in favor of another person who was injured by a violation, as this term is defined in section 52(54)(a)(1)(a) of the Israeli Securities Law, 1968 (“Israeli Securities Law”); and • Expenses expended by the office holder, including reasonable litigation expenses, and including attorney's fees, in respect of any proceeding under chapters 8-C, 8-D or 9-A of the Israeli Securities Law or in respect to any monetary sanction.
In addition, a private placement of securities that will (i) cause a person to become a controlling shareholder or (ii) increase the relative holdings of a shareholder that holds 5% or more of the company’s outstanding share capital, or (iii) will cause any person to become, as a result of the issuance, a holder of more than 5% of the company’s outstanding share capital in a private placement in which 20% or more of the company’s outstanding share capital prior to the placement are offered, the payment for which (in whole or in part) is not in cash or not under market terms, requires approval by the board of directors and the shareholders of the company.
If such objection is duly and timely submitted, then the transaction or compensation arrangement of the directors will require shareholders’ approval as detailed above. 99 In addition, a private placement of securities that will (i) cause a person to become a controlling shareholder or (ii) increase the relative holdings of a shareholder that holds 5% or more of the company’s outstanding share capital, or (iii) will cause any person to become, as a result of the issuance, a holder of more than 5% of the company’s outstanding share capital in a private placement in which 20% or more of the company’s outstanding share capital prior to the placement are offered, the payment for which (in whole or in part) is not in cash or not under market terms, requires approval by the board of directors and the shareholders of the company.
Indemnification of Office Holders The Israeli Companies Law provides that a company may, if permitted by its articles of association, indemnify an office holder for acts or omissions performed by the office holder in such capacity for: • Monetary liability imposed on the office holder in favor of another person by any judgment, including a settlement or an arbitrator’s award approved by a court; • Reasonable litigation expenses, including attorney’s fees, actually incurred by the office holder as a result of an investigation or proceeding instituted against him or her by a competent authority, provided that such investigation or proceeding concluded without the filing of an indictment against the office holder or the imposition of any monetary liability in lieu of criminal proceedings, or concluded without the filing of an indictment against the office holder and a monetary liability was imposed on the officer holder in lieu of criminal proceedings with respect to a criminal offense that does not require proof of criminal intent; • A monetary obligation imposed on the office holder in favor of another person who was injured by a violation, as this term is defined in section 52(54)(a)(1)(a) of the Israeli Securities Law; • Expenses expended by the office holder, including reasonable litigation expenses, and including attorney's fees, in respect of any proceeding under chapters 8-C, 8-D or 9-A of the Israeli Securities Law or in respect to any monetary sanction; • Reasonable litigation expenses, including attorneys’ fees, incurred by such office holder or which were imposed on him by a court, in proceedings the company instituted against the office holder or that were instituted on the company’s behalf or by another person, or in a criminal charge from which the office holder was acquitted, or in a criminal proceeding in which the office holder was convicted of a crime which does not require proof of criminal intent; or • Any other liability, payment or expense which the company may indemnify its office holders under the Israeli Company Law, the Israeli Securities Law or other Israeli law. 62 In accordance with the Israeli Companies Law, a company’s articles of association may permit the company to: • Undertake in advance to indemnify an office holder, except that with respect to a financial liability imposed on the office holder by any judgment, settlement or court-approved arbitration award, the undertaking must be limited to types of occurrences, which, in the opinion of the company’s board of directors, are, at the time of the undertaking, foreseeable due to the company’s activities and to an amount or standard that the board of directors has determined is reasonable under the circumstances; and • Undertake in advance to indemnify an office holder for reasonable litigation expenses, including attorney’s fees, actually incurred by the office holder as a result of an investigation or proceeding instituted against him or her by a competent authority, provided that such investigation or proceeding concluded without the filing of an indictment against the office holder or the imposition of any monetary liability in lieu of criminal proceedings, or concluded without the filing of an indictment against the office holder and a monetary liability was imposed on the officer holder in lieu of criminal proceedings with respect to a criminal offense that does not require proof of criminal intent. • Undertake in advance to indemnify an office holder for reasonable litigation expenses, including attorneys’ fees, incurred by such office holder or which were imposed on him by a court, in proceedings the company instituted against the office holder or that were instituted on the company’s behalf or by another person, or in a criminal charge from which the office holder was acquitted, or in a criminal proceeding in which the office holder was convicted of a crime which does not require proof of criminal intent. • Retroactively indemnify an office holder of the company.
Indemnification of Office Holders The Israeli Companies Law provides that a company may, if permitted by its articles of association, indemnify an office holder for acts or omissions performed by the office holder in such capacity for: • Monetary liability imposed on the office holder in favor of another person by any judgment, including a settlement or an arbitrator’s award approved by a court; • Reasonable litigation expenses, including attorney’s fees, actually incurred by the office holder as a result of an investigation or proceeding instituted against him or her by a competent authority, provided that such investigation or proceeding concluded without the filing of an indictment against the office holder or the imposition of any monetary liability in lieu of criminal proceedings, or concluded without the filing of an indictment against the office holder and a monetary liability was imposed on the officer holder in lieu of criminal proceedings with respect to a criminal offense that does not require proof of criminal intent; • A monetary obligation imposed on the office holder in favor of another person who was injured by a violation, as this term is defined in section 52(54)(a)(1)(a) of the Israeli Securities Law; • Expenses expended by the office holder, including reasonable litigation expenses, and including attorney's fees, in respect of any proceeding under chapters 8-C, 8-D or 9-A of the Israeli Securities Law or in respect to any monetary sanction; 103 • Reasonable litigation expenses, including attorneys’ fees, incurred by such office holder or which were imposed on him by a court, in proceedings the company instituted against the office holder or that were instituted on the company’s behalf or by another person, or in a criminal charge from which the office holder was acquitted, or in a criminal proceeding in which the office holder was convicted of a crime which does not require proof of criminal intent; or • Any other liability, payment or expense which the company may indemnify its office holders under the Israeli Company Law, the Israeli Securities Law or other Israeli law.
Directors and Senior Management Set forth below are the name, age, principal position and a biographical description of each of our directors and executive officers, as of the date hereof: Name Age Position Amos Malka 71 Chairman of the Board of Directors Igal Zamir 58 Chief Executive Officer and President Ehud Ben - Yair 60 Chief Financial Officer Liron Topaz 42 General Manager of TAT Israel Marty Carvellione 45 General Manager of Piedmont Jason Lewandowski 49 Chief Operational Officer and acting General Manager of Limco Lars Hesbjerg 57 Vice President Sales Gillon Beck 62 Director Moti Glick (1)(2)(3)(4) 71 External Director Ronnie Meninger (1)(3)(4) 67 Independent Director Aviram Halevi (1)(2)(3)(4) 66 External Director (1) “Independent Director” under the applicable SEC and NASDAQ Marketplace Rules (2) “External Director” as required by the Israeli Companies Law (3) Member of the audit committee (4) Member of the compensation committee Management Mr.
Directors and Senior Management Set forth below are the name, age, principal position and a biographical description of each of our directors and executive officers, as of the date hereof: Name Age Position Amos Malka 73 Chairman of the Board of Directors Igal Zamir 60 Chief Executive Officer and President Ehud Ben – Yair 62 Chief Financial Officer Liron Topaz 44 General Manager of TAT Israel Marty Carvellione 47 General Manager of Piedmont Jason Lewandowski 51 Chief Operational Officer Paul Maness 41 General Manager of Limco Lars Hesbjerg 59 Vice President Sales Gillon Beck 64 Director Moti Glick (1)(2)(3)(4) 73 External Director Ronnie Meninger (1)(3)(4) 69 Independent Director Aviram Halevi (1)(2)(3)(4) 68 External Director (1) “Independent Director” under SEC requirements and NASDAQ Marketplace Rules (2) “External Director” as required by the Israeli Companies Law (3) Member of the Company’s Audit Committee (4) Member of the Company’s Compensation Committee 85 Management Mr.
In Turbochrom, a new collective bargaining agreement was signed with Turbochrome’s union on September 18, 2022, and will be in effect until April 30, 2025.
On February 20, 2025, a new agreement was signed that will be in effect until March 31, 2028. In Turbochrom, a collective bargaining agreement was signed with Turbochrome’s union on September 18, 2022, and will be in effect until April 30, 2025. On February 25, 2025, a new agreement was signed that will be in effect until March 31, 2028.
Hesbjerg holds an economics degree from Niels Brock College, a B.A. degree in International Business and an Executive Management Diploma degree from the University of Minnesota. Directors Mr. Amos Malka was elected as Chairman of our Board of Directors in June 2016. Mr.
Between 2006 -2011 he was the Sales Director of the Gas Turbine Group of Donaldson Company. Mr. Hesbjerg holds an economics degree from Niels Brock College, a B.A. degree in International Business and an Executive Management Diploma degree from the University of Minnesota. Directors Mr. Amos Malka was elected as Chairman of our Board of Directors in June 2016. Mr.
In 2023, we adopted a Clawback Policy in compliance with the SEC rules and Nasdaq listing standards to recover any excess incentive-based compensation from current and former executive officers after an accounting restatement. A copy of the policy is filed as an exhibit to this Annual Report.
Clawback Policy In 2023, we adopted a Clawback Policy in compliance with the SEC rules and NASDAQ listing standards to recover any excess incentive-based compensation from current and former executive officers after an accounting restatement. 105 D.
The actual payment of the annual On Target Cash Plan for the active chairman of the board of directors (the “Active Chairman”), the CEO and other executives in a given year shall be capped as determined by our board of directors, but in no event shall exceed the ratio set forth in the table below.
The actual payment of the annual On Target Cash Plan for the active chairman of the board of directors (the “Active Chairman”), the CEO and other executives in a given year shall be capped as determined by our board of directors, but in no event shall exceed the ratio set forth in the table below. 101 The On Target Cash Plans may be composed based on a mix of (i) the company target; (ii) personal targets (KPIs); and (iii) personal evaluation.
Directors’ Service Contracts There are no arrangements or understandings between us and any of our subsidiaries, on the one hand, and any of our directors, on the other hand, providing for benefits upon termination of their employment or service as directors of our company or any of our subsidiaries.
Doron Cohen has served as our internal auditor since December 24, 2008. 96 Directors’ Service Contracts There are no arrangements or understandings between us and any of our subsidiaries, on the one hand, and any of our directors, on the other hand, providing for benefits upon termination of their employment or service as directors of our company or any of our subsidiaries.
In certain limited cases, the compensation of a new Chief Executive Officer who is not a director may be the approved without approval of the shareholders. 60 Variable Cash Incentive The compensation committee and board of directors may adopt, from time to time, a cash incentive plan, which will set forth for each executive certain targets which form such executives on target cash payment (the “On Target Cash Plan”) and the rules or formula for calculation of the On Target Cash Plan payment once actual achievements are known.
Variable Cash Incentive The compensation committee and board of directors may adopt, from time to time, a cash incentive plan, which will set forth for each executive certain targets which form such executives on target cash payment (the “On Target Cash Plan”) and the rules or formula for calculation of the On Target Cash Plan payment once actual achievements are known.
We are exempt from the requirements of the NASDAQ Marketplace Rules with regard to the nomination process of directors since we are a controlled company within the meaning of NASDAQ Marketplace Rule 5615(c)(2). See below in this Item 6.
We are exempt from the requirements of the NASDAQ Marketplace Rules with regard to the nomination process of directors since we are a controlled company within the meaning of NASDAQ Marketplace Rule 5615(c)(2). 92 External and Independent Directors External Directors .
As part of the company's 2012 Plan’s amendments it was determined that if the Company declares a cash dividend to its shareholders, and the distribution date of such dividend will precede the exercise date of an Option, including for the avoidance of doubt, Options that have yet to become vested and Options which have been granted prior to the adoption of such amendment to the Plan, the exercise price of the option shall be reduced in the amount equal to the cash dividend per share distributed by the Company.
As part of the Company's 2012 Plan’s amendments it was determined that if the Company declares a cash dividend to its shareholders, and the distribution date of such dividend will precede the exercise date of an option, including for the avoidance of doubt, options that have yet to become vested and options which have been granted prior to the adoption of such amendment to the 2012 Plan, the exercise price of the option shall be reduced in the amount equal to the cash dividend per share distributed by the Company. 107 Following the approval of TAT's audit committee and board of directors, on November 8, 2022 the Company’s shareholders approved the Company’s 2022 stock option plan (the “2022 Plan”, and together with the 2012 Plan, and the Amended and Restated Company’s 2022 Stock Option Plan (as defined below), “Plans”).
Amos Malka), the fixed medium amounts permitted by law to an external director (within the meaning of the Israeli Companies Law) which was a per meeting attendance fee of NIS 1,275 (approximately $356), plus an annual fee of NIS 49,380 (approximately $13,793). Pursuant to its agreement with Mr.
Amos Malka), the fixed medium amounts permitted by law to an external director (within the meaning of the Israeli Companies Law) which was a per meeting attendance fee of NIS 2,862 (approximately $774), plus an annual fee of NIS 76,860 (approximately $20,772). Pursuant to its agreement with Mr.
In addition to the majority vote, the shareholder approval must satisfy either of two additional tests: • The majority includes at least a majority of the shares voted by shareholders who have no personal interest in the transaction; or • The total number of shares held by disinterested shareholders that voted against the approval of the transaction does not exceed 2% of the aggregate voting rights of our company. 59 According to regulations promulgated under the Israeli Companies Law, certain extraordinary transactions between a public company and its controlling shareholder(s) do not require shareholder approval.
In addition to the majority vote, the shareholder approval must satisfy either of two additional tests: • The majority includes at least a majority of the shares voted by shareholders who have no personal interest in the transaction; or • The total number of shares held by disinterested shareholders that voted against the approval of the transaction does not exceed 2% of the aggregate voting rights of our company.
Salaries, fees, Commissions and bonuses (Amounts in Thousands US$) Other benefits (Amounts in Thousands US$) All directors and executive officers as a group (11 executives) $ 2,202 $ 41 During the year ended December 31, 2023, TAT paid its directors (except for its active chairman of the Board of Directors, Mr.
Compensation of Directors and Executive Officers The following table sets forth all compensation TAT paid to all of its directors and executive officers as a group for the year ended December 31, 2024. 89 Salaries, fees, Commissions and bonuses (Amounts in Thousands US$) Other benefits (Amounts in Thousands US$) All directors and executive officers as a group (12 executives) $ 3,467 $ 108 During the year ended December 31, 2024, TAT paid its directors (except for its active chairman of the Board of Directors, Mr.
Malka was previously granted options to purchase 50,000 ordinary shares of TAT and is not currently entitled to receive any bonus. 53 The table below sets forth the compensation paid to our five most highly compensated senior office holders (as defined in the Israeli Companies Law) during or with respect to the year ended December 31, 2023, in the disclosure format of Regulation 21 of the Israeli Securities Regulations (Periodic and Immediate Reports), 1970.
The table below sets forth the compensation paid to our five most highly compensated senior office holders (as defined in the Israeli Companies Law) during or with respect to the year ended December 31, 2024, in the disclosure format of Regulation 21 of the Israeli Securities Regulations (Periodic and Immediate Reports), 1970.
In accordance with the Israeli Companies Law, the policy must be reviewed and readopted at least once every three years. Approval of the compensation committee, the board of directors and our shareholders, in that order, is required for the adoption of the compensation policy. The shareholders’ approval must include the majority of shares voted at the meeting.
Approval of the compensation committee, the board of directors and our shareholders, in that order, is required for the adoption of the compensation policy. The shareholders’ approval must include the majority of shares voted at the meeting.
Independent Directors . As a controlled company, within the meaning of NASDAQ Marketplace Rule 5615(c)(2), we are exempt from the NASDAQ Marketplace Rule which requires that a majority of our board of directors qualify as independent directors, within the meaning of the NASDAQ Marketplace Rules. See Item 6.
As a controlled company, within the meaning of NASDAQ Marketplace Rule 5615(c)(2), we are exempt from the NASDAQ Marketplace Rule which requires that a majority of our board of directors qualify as independent directors, within the meaning of the NASDAQ Marketplace Rules. 94 Audit Committee Under the Israeli Companies Law, the board of directors of any public company must establish an audit committee.
Our compensation committee consists of our two external directors and an independent director under the respective requirements of the SEC and NASDAQ and complies with the Israeli Companies Law criteria for compensation committee members. 57 Internal Audit The Israeli Companies Law requires the board of directors of a public company to appoint an internal auditor following a recommendation by the audit committee.
Our compensation committee consists of our two external directors and an independent director under the respective requirements of the SEC and NASDAQ and complies with the Israeli Companies Law criteria for compensation committee members.
Topaz served as Vice President at A.L. GROUP and has managed and lead the business development and marketing strategy of the entire group including four manufacturing facilities, five trading companies around the globe and 1500 employees. Mr. Topaz holds a B.A. in Management and Economics from the Open University-Israel, and M.B.A in Business administration from the Peres Academic Center, Israel.
Prior to joining TAT, Mr. Topaz served as Vice President at A.L. GROUP and has managed and lead the business development and marketing strategy of the entire group including four manufacturing facilities, five trading companies around the globe and 1500 employees. Mr.
Furthermore, Israeli employees and employers are required to pay predetermined sums to the National Insurance Institute which is similar to the United States Social Security Administration. These payments amount to approximately 12% of wages, with the employee contributing approximately 43% and the employer approximately 56%.
Furthermore, Israeli employees and employers are required to pay predetermined sums to the National Insurance Institute which is similar to the United States Social Security Administration.
An external director may be removed from office at the initiative of the board of directors at a special general meeting of shareholders, if the board resolves that the statutory requirements for that person’s appointment as external director no longer exist, or that the external director has violated his or her duty of loyalty to the company.
Such conditions include the determination by the audit committee and board of directors, that in view of the director's professional expertise and special contribution to the company's board of directors and its committees, the appointment of the external director for an additional term is in the best interest of the company. 93 An external director may be removed from office at the initiative of the board of directors at a special general meeting of shareholders, if the board resolves that the statutory requirements for that person’s appointment as external director no longer exist, or that the external director has violated his or her duty of loyalty to the company.
Disclosure of Personal Interests of a Controlling Shareholder; Approval of Transactions with Controlling Shareholders The disclosure requirements that apply to an office holder also apply to a transaction in which a controlling shareholder of the company has a personal interest.
In the event the majority of the members of the board of directors or the audit committee have a personal interest, then the approval of the general meeting of shareholders is also required. 98 Disclosure of Personal Interests of a Controlling Shareholder; Approval of Transactions with Controlling Shareholders The disclosure requirements that apply to an office holder also apply to a transaction in which a controlling shareholder of the company has a personal interest.
Between 2011- 2016 he led the Off-Road OEM sales organization as the Sales Director which included large OEMs such as Caterpillar, Bobcat. Between 2010 and 2011 he was the Director of Sales, Global On-Road OEM. Between 2006 -2011 he was the Sales Director of the Gas Turbine Group of Donaldson Company. Mr.
From 2019 to 2021 he served as Global Business Unit Director of Aerospace, and between 2016-2019 as the Global Sales Director of Aerospace and Defense. Between 2011- 2016 he led the Off-Road OEM sales organization as the Sales Director which included large OEMs such as Caterpillar, Bobcat. Between 2010 and 2011 he was the Director of Sales, Global On-Road OEM.
Under the Israeli Companies Law, Israeli companies whose shares have been offered to the public or whose shares are listed in an authorized stock exchange (accordingly, such shares are considered as held by "the public") are required to appoint at least two external directors who meet the independence criteria set by the Israeli Companies Law. 55 A person is qualified to serve as an external director only if he or she has “accounting and financial expertise” or “professional qualifications,” as such terms are defined by the Israeli Companies Regulations (Conditions and Criteria for a Director Who Possesses Accounting Expertise and a Director Who Possesses Professional Competence), 2005.
A person is qualified to serve as an external director only if he or she has “accounting and financial expertise” or “professional qualifications,” as such terms are defined by the Israeli Companies Regulations (Conditions and Criteria for a Director Who Possesses Accounting Expertise and a Director Who Possesses Professional Competence), 2005.
Arrangements regarding the compensation of the Chief Executive Officer and directors require the approval of the compensation committee, the board of directors and our shareholders, in that order.
Arrangements regarding the compensation of the Chief Executive Officer and directors require the approval of the compensation committee, the board of directors and our shareholders, in that order. In certain limited cases, the compensation of a new Chief Executive Officer who is not a director may be the approved without approval of the shareholders.
Information Regarding Covered Executives (1) (Amounts in Thousands US$) Name and Principal Position (2) Base Salary Benefits and Perquisites (3) Variable Compensation (4) Equity-Based Compensation (5) Total Igal Zamir, CEO and President 350 116 174 11 651 Ehud Ben- Yair, CFO 248 77 75 7 408 Jason Lewandowski, COO 260 40 - 68 368 Lars Hebjerg, VP Sales 187 24 65 - 276 Liron Topaz, GM TAT Israel 161 70 12 17 260 (1) All amounts reported in the table are in terms of cost to TAT, as recorded in our financial statements.
Information Regarding Covered Executives (1) (Amounts in Thousands US$) Name and Principal Position (2) Base Salary Benefits and Perquisites (3) Variable Compensation (4) Equity-Based Compensation (5) Total Igal Zamir, CEO and President 339 130 346 20 835 Ehud Ben- Yair, CFO 324 57 225 96 702 Jason Lewandowski, COO 267 22 152 31 472 Liron Topaz, GM TAT Israel 156 71 68 37 328 Lars Hebjerg, VP Sales 221 23 62 37 323 (1) All amounts reported in the table are in terms of cost to TAT, as recorded in our financial statements.
After 5 years with Proterra, Marty was appointed General Manager of Piedmont in 2023. Marty brings with him over 20 years of operational and supply chain experience in the Aerospace and Electric Vehicle Industries. Marty holds a Bachelor’s Degree from Fordham University and a Master’s Degree in Finance from Hofstra University. Mr.
In January of 2018 Marty left Honeywell and joined Proterra as the Director of Supply Chain and Materials for the Proterra Transit Business. After 5 years with Proterra, Marty was appointed General Manager of Piedmont in 2023. Mr. Cervellione brings with him over 20 years of operational and supply chain experience in the Aerospace and Electric Vehicle Industries. Mr.
Share Ownership Beneficial Ownership of Executive Officers and Directors Except as set forth under ‘Stock Option Plans’ and in Item 7A below, none of our directors and executive officers beneficially owns more than 1% of our outstanding shares. 65 Stock Option Plans In November 2011, our audit committee and board of directors approved a stock option plan (the “2012 Plan”), which was subsequently approved by TAT’s shareholders, on June 28, 2012.
Stock Option Plans In November 2011, our audit committee and board of directors approved a stock option plan (the “2012 Plan”), which was subsequently approved by TAT’s shareholders, on June 28, 2012.
In 2014, after 8 years with Sikorsky, Marty transitioned to Honeywell Aerospace where he led all Material Operations for the OEM and Repair and Overhaul Facilities. In January of 2018 Marty left Honeywell and joined Proterra as the Director of Supply Chain and Materials for the Proterra Transit Business.
In 2006, Marty was hired by Sikorsky Aircraft where he held managerial roles of increasing responsibility in Materials, Programs, Logistics and Distribution. In 2014, after 8 years with Sikorsky, Marty transitioned to Honeywell Aerospace where he led all Material Operations for the OEM and Repair and Overhaul Facilities.
Following the approval of TAT's audit committee and board of directors, on November 8, 2022 the Company’s shareholders approved the 2022 stock option plan (the “2022 Plan”, and together with the 2012 Plan, the “Plans”).
In March 2025, following the approval of TAT's audit committee and board of directors, the Company’s shareholders annual meeting, approved the amended and restated Company’s 2022 Stock Plan (the “Amended and Restated Company’s 2022 Stock Option Plan”).
The role of the internal auditor is to examine, among other things, the company’s compliance with applicable law and orderly business practice. The internal auditor must meet certain statutory requirements of independence. Mr. Doron Cohen has served as our internal auditor since December 24, 2008.
Internal Audit The Israeli Companies Law requires the board of directors of a public company to appoint an internal auditor following a recommendation by the audit committee. The role of the internal auditor is to examine, among other things, the company’s compliance with applicable law and orderly business practice. The internal auditor must meet certain statutory requirements of independence. Mr.
We currently also generally grant senior employees based in Israel participation in a particular insurance product called “management insurance”.
These payments amount to approximately 12% of wages, with the employee contributing approximately 43% and the employer approximately 56%. 106 We currently also generally grant senior employees based in Israel participation in a particular insurance product called “management insurance”.
Lars Hesbjerg was appointed Vice President of Sales in April 2021. Prior joining TAT, Mr. Lars served 18 years with the Donaldson Company, Inc. in various leadership roles. From 2019 he served as Global Business Unit Director of Aerospace, and between 2016-2019 as the Global Sales Director of Aerospace and Defense.
Manes has served in the United States Army for 24 years. Mr. Manes holds a Master's Degree from Webster University and a B.S from Oklahoma State University. 87 Mr. Lars Hesbjerg was appointed as Vice President of Sales in April 2021. Prior joining TAT, Mr. Lars served 18 years with the Donaldson Company, Inc. in various leadership roles.
Mr. Marty Cervellione was appointed General Manager of Piedmont in January 2023. Marty began his career as a Ground Combat Officer in the United States Marine Corps serving from 2000-2006. In 2006, Marty was hired by Sikorsky Aircraft where he held managerial roles of increasing responsibility in Materials, Programs, Logistics and Distribution.
Topaz holds a B.A. in Management and Economics from the Open University-Israel, and M.B.A in Business administration from the Peres Academic Center, Israel. Mr. Marty Cervellione was appointed as General Manager of Piedmont in January 2023. Marty began his career as a Ground Combat Officer in the United States Marine Corps serving from 2000-2006.
Amos Malka, TAT's active chairman of the Board of Directors, TAT paid Mr. Malka a monthly fee of NIS 50,000 plus VAT. Mr.
Amos Malka, TAT's active chairman of the Board of Directors, TAT paid Mr. Malka a monthly fee of NIS 50,000 plus VAT. In March 2025, the Company’s annual shareholders meeting approved the grant of 50,000 options to purchase 50,000 of the Company’s ordinary shares to Mr. Malka (replacing his previous option grant on 2016).
For nonemployees and for non-Israeli employees, the share option plan is subject to Section 3(i) of the Israeli Income Tax Ordinance. As of December 31, 2023, options to purchase 625,000 ordinary shares were outstanding under the Plan, exercisable at an average exercise price of $7.31 per share. F.
For nonemployees and for non-Israeli employees, the share option plan is subject to Section 3(i) of the Israeli Income Tax Ordinance. 108 As of December 31, 2024, under the 2012 Plan there are 491,755 options (of which 200,625 options are outstanding and 291,130 options are unallocated), and under the 2022 Plan there are 485,625 options (of which 285,000 options are outstanding and 200,625 options are unallocated).
The On Target Cash Plans may be composed based on a mix of (i) the company target; (ii) personal targets (KPIs); and (iii) personal evaluation. The weight to be assigned to each of the components per each of the executives shall be as set forth in the table below.
The weight to be assigned to each of the components per each of the executives shall be as set forth in the table below.
We intend to continue to rely on these exemptions provided under Rule 5615(c)(2). D. Employees As of December 31, 2023, TAT and its subsidiaries employed 540 employees, of whom 449 were employed in manufacturing and quality control, 24 were employed in engineering and research and development and 67 were employed in general & administration, sales and marketing.
Employees As of December 31, 2024, TAT and its subsidiaries employed 634 employees, of whom 516 were employed in manufacturing and quality control, 37 were employed in engineering and research and development and 81 were employed in general & administration, sales and marketing.
Limitations on Exculpation, Insurance and Indemnification The Israeli Companies Law provides that neither a provision of the articles of association permitting the company to enter into a contract to insure the liability of an office holder, nor a provision in the articles of association or a resolution of the board of directors permitting the indemnification of an office holder, nor a provision in the articles of association exempting an office holder from duty to the company shall be valid, where such insurance, indemnification or exemption relates to any of the following: • Breach by the office holder of his duty of loyalty, except with respect to insurance coverage or indemnification if the office holder acted in good faith and had reasonable grounds to assume that the act would not prejudice the company; • Breach by the office holder of his duty of care if such breach was committed intentionally or recklessly, unless the breach was committed only negligently; • Any act or omission committed with intent to derive an unlawful personal gain; and • Any fine or forfeiture imposed on the office holder. 63 Pursuant to our articles of association, the total amount of indemnification that we will pay (in addition to amounts received from an insurance company, if any) to all officers of the company, in aggregate, shall not exceed, in all circumstances, more than 25% of the company's shareholders equity as set forth in the company's recent consolidated financial statements prior to the date that the indemnity is paid.
In accordance with the Israeli Companies Law, a company’s articles of association may permit the company to: • Undertake in advance to indemnify an office holder, except that with respect to a financial liability imposed on the office holder by any judgment, settlement or court-approved arbitration award, the undertaking must be limited to types of occurrences, which, in the opinion of the company’s board of directors, are, at the time of the undertaking, foreseeable due to the company’s activities and to an amount or standard that the board of directors has determined is reasonable under the circumstances; and • Undertake in advance to indemnify an office holder for reasonable litigation expenses, including attorney’s fees, actually incurred by the office holder as a result of an investigation or proceeding instituted against him or her by a competent authority, provided that such investigation or proceeding concluded without the filing of an indictment against the office holder or the imposition of any monetary liability in lieu of criminal proceedings, or concluded without the filing of an indictment against the office holder and a monetary liability was imposed on the officer holder in lieu of criminal proceedings with respect to a criminal offense that does not require proof of criminal intent. • Undertake in advance to indemnify an office holder for reasonable litigation expenses, including attorneys’ fees, incurred by such office holder or which were imposed on him by a court, in proceedings the company instituted against the office holder or that were instituted on the company’s behalf or by another person, or in a criminal charge from which the office holder was acquitted, or in a criminal proceeding in which the office holder was convicted of a crime which does not require proof of criminal intent. • Retroactively indemnify an office holder of the company. 104 Limitations on Exculpation, Insurance and Indemnification The Israeli Companies Law provides that neither a provision of the articles of association permitting the company to enter into a contract to insure the liability of an office holder, nor a provision in the articles of association or a resolution of the board of directors permitting the indemnification of an office holder, nor a provision in the articles of association exempting an office holder from duty to the company shall be valid, where such insurance, indemnification or exemption relates to any of the following: • Breach by the office holder of his duty of loyalty, except with respect to insurance coverage or indemnification if the office holder acted in good faith and had reasonable grounds to assume that the act would not prejudice the company; • Breach by the office holder of his duty of care if such breach was committed intentionally or recklessly, unless the breach was committed only negligently; • Any act or omission committed with intent to derive an unlawful personal gain; and • Any fine or forfeiture imposed on the office holder.
Halevi is the founder and CEO of Intel System Ltd., a provider of business intelligence services. Prior to that, from 2007 until 2010, Mr. Halevi served as the CEO of Terrogence Ltd., a producer of intelligence data for commercial markets. Mr. Halevi holds a B.Sc. in Geology from Queens College, CUNY, and an MBA from Tel Aviv University. B.
Halevi is one of the founders and former managing partner of Imprint Social, a technology-based engagement platform that guarantees clients connect with the target audience in the most effective and tailored manner. Prior to that, from 2007 until 2010, Mr. Halevi served as the CEO of Terrogence Ltd., a producer of intelligence data for commercial markets. Mr.
Removed
Compensation The following table sets forth all compensation TAT paid to all of its directors and executive officers as a group for the year ended December 31, 2023.
Added
Cervellione holds a Bachelor’s Degree from Fordham University and a Master’s Degree in Finance from Hofstra University. Mr. Paul Maness was appointed as General Manager of Limco in March 2024. Mr. Manes brings years of experience in operations leadership as well as military leadership as an Army Ranger. Prior to joining Limco, Mr.
Removed
“Directors, Senior Management and Employees - Board Practices - NASDAQ Exemptions for a Controlled Company.” External and Independent Directors External Directors .
Added
Manes worked as a Global Health and Safety Leader for Baker Hughes and prior to that, as a Plant Manager for the same company in Claremore, Oklahoma. Before that, Paul served as the Plant Manager in a machine assembly shop and an operations manager in a steel galvanizing facility. Mr.
Removed
Such conditions include the determination by the audit committee and board of directors, that in view of the director's professional expertise and special contribution to the company's board of directors and its committees, the appointment of the external director for an additional term is in the best interest of the company.
Added
Halevi holds a B.Sc. in Geology from Queens College, CUNY, and an MBA from Tel Aviv University. B.
Removed
“Directors, Senior Management and Employees - Board Practices - NASDAQ Exemptions for a Controlled Company”. 56 Audit Committee Under the Israeli Companies Law, the board of directors of any public company must establish an audit committee.
Added
Additionally, the shareholders meeting approved the amendment to the compensation terms of Mr. Igal Zamir, the Company’s Chief Executive Officer, as follows: Mr. Zamir’s base salary, has changed to a fixed compensation of $470,000 per year, due to his relocation to the United States. It was also approved to grant Mr.
Removed
In the event the majority of the members of the board of directors or the audit committee have a personal interest, then the approval of the general meeting of shareholders is also required.
Added
Zamir 200,000 options to purchase ordinary shares of the Company, and the grant of a one-time special bonus equivalent to two monthly salaries to both Mr. Zamir and Mr. Ehud Ben Yair, the Company’s Chief Financial Officer.
Removed
If such objection is duly and timely submitted, then the transaction or compensation arrangement of the directors will require shareholders’ approval as detailed above.
Added
Under the Israeli Companies Law, Israeli companies whose shares have been offered to the public or whose shares are listed in an authorized stock exchange (accordingly, such shares are considered as held by “the public”) are required to appoint at least two external directors who meet the independence criteria set by the Israeli Companies Law.
Removed
NASDAQ Exemptions for a Controlled Company We are a controlled company within the meaning of NASDAQ Marketplace Rule 5615(c)(2), or Rule 5615(c)(2), because the FIMI Opportunity V, L.P. and FIMI Israel Opportunity FIVE, Limited Partnership (the “FIMI Funds”) beneficially own more than 50% of our voting shares.
Added
According to regulations promulgated under the Israeli Companies Law, certain extraordinary transactions between a public company and its controlling shareholder(s) do not require shareholder approval.
Removed
Under Rule 5615(c)(2), a controlled company is exempt from the following requirements of NASDAQ Marketplace Rules 5605(b)(1), 5605(d) and 5605(e) that would otherwise require that: • The majority of the company’s board of directors qualifies as independent directors, as defined under NASDAQ Marketplace Rules. • The compensation of the chief financial officer and all other executive officers be determined, or recommended to the board of directors for determination, either by (i) a majority of the independent directors or (ii) a compensation committee comprised solely of independent directors. • Director nominees must be selected or recommended for the board of directors, either by (a) a majority of independent directors or (b) a nominations committee comprised solely of independent directors.
Added
In accordance with the Israeli Companies Law, the policy must be reviewed and readopted at least once every three years. On March 2025, the Company’s annual shareholders meeting, approved the renewal and amendment of the Company’s compensation policy for an additional three years. A copy of the Company’s Amended Compensation Policy is attached as an exhibit to this Annual Report.
Removed
In addition, the plan allows for a discretionary qualified non-elective contribution for the plan year. E.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

9 edited+15 added−2 removed3 unchanged
These numbers are not representative of the number of beneficial holders of our shares nor is it representative of where such beneficial holders reside since many of these ordinary shares were held by brokers or other nominees including CEDE & Co., the nominee for the Depositary Trust Company (the central depositary for the U.S. brokerage community), which held approximately 69% of our outstanding ordinary shares as of such date.
These numbers are not representative of the number of beneficial holders of our shares nor is it representative of where such beneficial holders reside since many of these ordinary shares were held by brokers or other nominees including CEDE & Co., the nominee for the Depositary Trust Company (the central depositary for the U.S. brokerage community), which held approximately 74 % of our outstanding ordinary shares as of such date.
Except as indicated by footnote, and subject to community property laws where applicable, the persons named in the table above have sole voting and investment power with respect to all shares shown as beneficially owned by them. (2) The percentages shown are based on 10,102,612 ordinary shares issued and outstanding as of December 31, 2023 (net of 274,473 dormant shares).
Except as indicated by footnote, and subject to community property laws where applicable, the persons named in the table above have sole voting and investment power with respect to all shares shown as beneficially owned by them. (2) The percentages shown are based on 10,940,358 ordinary shares issued and outstanding as of December 31, 2024 (net of 274,473 dormant shares).
Record Holders Based on a review of the information provided to us by our transfer agent, as of December 31, 2023, there were 32 holders of record of our ordinary shares, of which 29 record holders holding less than 1.0% of our ordinary shares had registered addresses in the United States.
Record Holders Based on a review of the information provided to us by our transfer agent, as of December 31, 2024, there were 23 holders of record of our ordinary shares, of which 17 record holders holding less than 1.0% of our ordinary shares had registered addresses in the United States.
The principal business address of each of the above entities and persons is 50 Dizengoff St., Dizengoff Center, Gate 3, Top Tower, 13th floor, Tel Aviv 64332, Israel. 67 Significant Changes in the Ownership of Major Shareholders On December 21, 2023, TAT completed the issuance and sale of 1,158,600 Ordinary Shares of the Company in a private placement to Israeli institutional and accredited investors (as defined under Israel’s Securities Law, 5728-1968), for a purchase price of NIS 31.70 per share (representing approximately $8.77 per share based on the exchange rate issued by the Bank of Israel at such time), resulting in net proceeds to the Company, after deducting offering expenses, of approximately NIS 36.2 million (or approximately $10.0 million).
Significant Changes in the Ownership of Major Shareholders On December 21, 2023, TAT completed the issuance and sale of 1,158,600 Ordinary Shares of the Company in a private placement to Israeli institutional and accredited investors (as defined under Israel’s Securities Law, 5728-1968), for a purchase price of NIS 31.70 per share (representing approximately $8.77 per share based on the exchange rate issued by the Bank of Israel at such time), resulting in net proceeds to the Company, after deducting offering expenses, of approximately NIS 36.2 million (or approximately $10.0 million).
Davidi is c/o FIMI FIVE 2012 Ltd., Electra Tower, 98 Yigal Alon St., Tel Aviv 6789141, Israel.
Davidi is c/o FIMI FIVE 2012 Ltd., Alon Towers 2, 94 Yigal Alon St., Tel-Aviv 6789141, Israel.
The newly issued shares represented approximately 11.5% of the Company’s issued and outstanding Ordinary Shares after the consummation of such sale. Major Shareholders Voting Rights Our major shareholders do not have different voting rights.
The newly issued shares represented approximately 11.5% of the Company’s issued and outstanding Ordinary Shares after the consummation of such sale.
Major Shareholders The following table sets forth certain information as of December 31, 2023, regarding the beneficial ownership by all shareholders known to us to own beneficially 5% or more of our ordinary shares: Name Number of Ordinary Shares Beneficially Owned(1) Percentage of Ownership(2) FIMI Funds (3) 5,254,908 52 % Yelin Lapidot (4) 704,406 7.00 % (1) Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.
Major Shareholders The following table sets forth certain information as of December 31, 2024, regarding the beneficial ownership by all shareholders known to us to own beneficially 5% or more of our ordinary shares: Name Number of Ordinary Shares Beneficially Owned(1) Percentage of Ownership(2) FIMI Funds (3) 2,905,202 26.6 % MEITAV INVESTMENT HOUSE LTD. (4) 1,536,936 14.0 % Y.D.
(4) Based on a Schedule 13G/A filed on January 31, 2024, Dov Yelin, Yair Lapidot, Yelin Lapidot Holdings Management Ltd. and Yelin Lapidot Provident Funds Management Ltd. share voting and dispositive power with respect to the 704,406 shares held by Yelin Lapidot Holdings Management Ltd. and Yelin Lapidot Provident Funds Management Ltd.
(4) Based on a letter sent to the Company dated January 2, 2025, As of December 31, 2024, Meitav Portfolio Management Ltd, Meitav Provident Funds & Pension Ltd. share voting and dispositive power with respect to the 1,536,938 ordinary shares held by Meitav Investment House Ltd.
(3) Based on a Schedule 13D filed on August 14, 2013, and on Schedule 13D/A filed on December 12, 2016, FIMI Funds, FIMI FIVE 2012 Ltd., Shira and Ishay Davidi Management Ltd. and Mr. Ishay Davidi share voting and dispositive power with respect to the 5,254,908 ordinary shares held by the FIMI Funds.
(“FIMI Opportunity V”), FIMI Israel Opportunity Five, Limited Partnership (“FIMI Israel Opportunity V” and together with FIMI Opportunity V, the “FIMI Funds”), FIMI FIVE 2012 Ltd., Shira and Ishay Davidi Management Ltd. and Mr. Ishay Davidi (collectively, the “ Reporting Persons ”) share voting and dispositive power with respect to the 2,905,202 ordinary shares held by the Reporting Persons.
Removed
B. Related Party Transactions The amounts in the table below refer to TAT engineering joint venture and affiliates.
Added
More Investments Ltd. (5) 1,213,859 11.1 % 109 (1) Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.
Removed
Transactions: Year ended December 31, 2023 2022 2021 Income - Sales to related-party company (*) - $ 17 $ 88 Cost and expenses - - Supplies from related party (*) - - $ 654 Balances: December 31, 2023 2022 Trade receivables and other receivables (*) - - Trade payables and other payables (*) - - (*) includes mainly transactions with affiliated companies. 68 C.
Added
(3) Based on Schedule 13D filed on August 14, 2013, on Schedule 13D/A filed on December 12, 2016 and on Schedule 13D/A filed on September 3, 2024, FIMI Opportunity V, L.P.
Added
The principal business address of each of the above entities and persons is 1 Jabotinsky St, Bnie Brak, Israel. 110 (5) Based on a Schedule 13G/A filed on January 23, 2025, Y.D.
Added
More Investments Ltd, More Provident Funds & Pension Ltd., More Mutual Funds Management (2013) Ltd., BYM More Investments Ltd., Eli Levy, Yosef Levy, Benjamin Meirov, Yosef Meirov, Michael Meirov, and Dotan Meirov share voting and dispositive power with respect to the ordinary shares held by Y.D.
Added
More Investments Ltd, More Provident Funds & Pension Ltd. and More Mutual Funds Management (2013) Ltd. The principal business address of each of the above entities and persons is 2 Ben-Gurion Street, Ramat Gan, Israel.
Added
The securities reported herein are held by More Provident for the benefit of beneficiaries of various provident and pension funds, More Mutual for the benefit of various mutual funds, and More Investment for the benefit of various portfolio management clients.
Added
In September 1, 2024, TAT received and accepted commitments from Israeli institutional and accredited investors (as defined under the Israel’s Securities Law, 5728-1968 (the “Investors” and the “Israeli Securities Law”, respectively) to participate in a private placement (the “Private Placement”) of the Company’s ordinary shares.
Added
In September 6, 2024, TAT completed the issuance and sale of 673,340 ordinary shares in a private placement to Israeli institutional and accredited Investors, for a purchase price of NIS 54.95 per share, resulting in the net proceeds to TAT, after deduction offering expenses, of approximately NIS 36.5 million.
Added
In addition, FIMI Israel Opportunity FIVE, Limited Partnership and FIMI Opportunity V, L.P (the “Fimi Funds”), the Company’s largest shareholder, notified the Company that it received and accepted commitments from Israeli institutional and accredited investors to purchase from the FIMI Funds an aggregate of 2,349,706 of the Company’s ordinary shares, for a purchase price of NIS 54.95 per ordinary share, or an aggregate of NIS 129.1 million.
Added
The Company did not receive any proceeds from the sale of the ordinary shares by the FIMI Funds. Following the consummation of the Private Placement and the private sale by the FIMI Funds, the FIMI Funds beneficially own approximately 26.6% of the Company’s issued and outstanding ordinary shares.
Added
The Private Placement and the sale of ordinary shares by the FIMI Funds were being made in Israel only and not to U.S. persons, as defined in Rule 902 of the “Securities Act”, pursuant to a registration exemption afforded by Regulation S promulgated under the Securities Act, and the ordinary shares will be subject to certain transfer restrictions.
Added
The ordinary shares will not be registered under the Securities Act and will not be offered or sold in the United States without registration or applicable exemption from the registration requirements according to the Securities Act. 111 Major Shareholders Voting Rights Our major shareholders do not have different voting rights.
Added
B. Related Party Transactions In March 2025, the Company's annual shareholders meeting approved the grant of 50,000 options to purchase 50,000 of the Company's ordinary shares to Mr. Malka (replacing his previous option grant on 2016). Additionally, the shareholders meeting approved the amendment to the compensation terms of Mr. Igal Zamir, the Company's Chief Executive Officer, as follows: Mr.
Added
Zamir's base salary, has changed to fixed compensation of $470,000 per year, due to his relocation to the United States. It was also approved to grant Mr. Zamir 200,000 options to purchase ordinary shares of the Company, and the grant of and a one-time special bonus equivalent to two monthly salaries to both Mr. Zamir and Mr.
Added
Ehud Ben Yair, the Company's Chief Financial Officer. 112 C. Interests of Experts and Counsel Not applicable.

Other TATT 10-K year-over-year comparisons