TAT Technologies signs a 5-year contract extension with a global air carrier for APU MRO services with an estimated revenues of $50 million

Rhea-AI Summary

TAT Technologies Ltd. (NASDAQ: TATT) announced a contract extension worth $50 million with a major air carrier, reflecting a successful 5-year partnership. The extension involves MRO services for the airline's GTCP331 model APUs, estimated to generate $10 million annually. TAT's subsidiary, Piedmont Aviation, has recently completed necessary facility upgrades to support this collaboration. The CEO emphasized this contract as a significant milestone in enhancing TAT's market position and profitability, particularly following strategic agreements with Honeywell over the past two years.

Positive

• Contract extension with estimated revenues of $50 million over 5 years ($10 million annually).
• Successful partnership with a major air carrier enhances market credibility.
• Completion of facility upgrades to support MRO operations for key APUs.

Negative

• None.

NETANYA, Israel, Feb. 6, 2023 /PRNewswire/ -- TAT Technologies Ltd. (TASE: TATT) (NASDAQ: TATT), a leading supplier of products and services for the commercial and military aviation industries and the ground defense industries, announces a significant contract expansion with a global air carrier.

This contract extension is a result of a very successful partnership between the companies over the last 5 years. As part of this contract, TAT will provide MRO services to the airline's GTCP331 model APUs. TAT estimates revenues from this contract to be $50 million ($10 million per year).

In 2020 and 2021, TAT (through its fully owned subsidiary Piedmont Aviation components from Greensboro North Carolina) signed several strategic contracts with the aviation giant Honeywell. Under these contracts, TAT was awarded a 10-year license for repair and overhaul of APUs for Boeing and Airbus's key platforms, including B737, B777, B767/757 and A320 aircrafts and the C17 which is used for military purposes. The Company is also engaged in APUs leases to airlines, mainly for B777 aircraft, under an exclusive 10-year contract with Honeywell.  Piedmont has completed its facility upgrades required to start MRO operations for the GTCP331-500 (B777) and expects to complete the same for the GTCP131-9 (A320/B737) within the coming months.

Igal Zamir, CEO of TAT: "We are extremely happy with the extension of this contract. Following a very comprehensive bid process, the customer awarded us with this contract which speaks to our price strategy, proven high level of service and great relationship. The contract is a significant milestone in realizing the strategic value of the contracts signed with Honeywell over the past 24 months and a testimony to TAT's ability to serve large fleets. By extending this contract, TAT Piedmont is now clearly the global market leader in MRO for the 331-series APU to the leading air carriers. This contract will further improve the profitability and operating efficiency of our subsidiary Piedmont and will significantly contribute to TAT's group consolidated results for following years to come".

About TAT Technologies LTD

TAT Technologies Ltd. is a leading provider of services and products to the commercial and military aerospace and ground defense industries. TAT operates under four segments: (i) Original equipment manufacturing ("OEM") of heat transfer solutions and aviation accessories through its Gedera facility; (ii) MRO services for heat transfer components and OEM of heat transfer solutions through its Limco subsidiary; (iii) MRO services for aviation components through its Piedmont subsidiary; and (iv) Overhaul and coating of jet engine components through its Turbochrome subsidiary. TAT controlling shareholders is the FIMI Private Equity Fund.

TAT's activities in the area of OEM of heat transfer solutions and aviation accessories primarily include the design, development and manufacture of (i) broad range of heat transfer solutions, such as pre-coolers heat exchangers and oil/fuel hydraulic heat exchangers, used in mechanical and electronic systems on board commercial, military and business aircraft; (ii) environmental control and power electronics cooling systems installed on board aircraft in and ground applications; and (iii) a variety of other mechanical aircraft accessories and systems such as pumps, valves, and turbine power units.

TAT's activities in the area of MRO Services for heat transfer components and OEM of heat transfer solutions primarily include the MRO of heat transfer components and to a lesser extent, the manufacturing of certain heat transfer solutions. TAT's Limco subsidiary operates an FAA-certified repair station, which provides heat transfer MRO services for airlines, air cargo carriers, maintenance service centers and the military.

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 activities in the area of overhaul and coating of jet engine components includes the overhaul and coating of jet engine components, including turbine vanes and blades, fan blades, variable inlet guide vanes and afterburner flaps.

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

Contact:
Mr. Ehud Ben-Yair
Chief Financial Officer
Tel: 972-8-862-8503
ehudb@tat-technologies.com

Safe Harbor for Forward-Looking Statements

This press release contains forward-looking statements which include, without limitation, statements regarding possible or assumed future operation results. These statements are hereby identified as "forward-looking statements" for purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that could cause our results to differ materially from management's current expectations. Actual results and performance can also be influenced by other risks that we face in running our operations including, but are not limited to, general business conditions in the airline industry, changes in demand for our services and products, the timing and amount or cancellation of orders, the price and continuity of supply of component parts used in our operations, the change of control that will occur on the sale by the receiver of the Company's shares held by our previously controlling stockholders, and other risks detailed from time to time in the Company's filings with the Securities Exchange Commission, including, its annual report on form 20-F and its periodic reports on form 6-K. These documents contain and identify other important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update publicly or revise any forward-looking statement.

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SOURCE TAT Technologies Ltd

FAQ

What is the value of the new contract signed by TAT Technologies (TATT)?

The new contract signed by TAT Technologies is valued at $50 million.

How much revenue is expected annually from TAT Technologies' new contract?

TAT Technologies expects to generate $10 million annually from the new contract.

What services will TAT Technologies provide under the new contract?

TAT Technologies will provide MRO (Maintenance, Repair, Overhaul) services for the GTCP331 model APUs.

When was the contract extension for TAT Technologies announced?

The contract extension was announced on February 6, 2023.

What is the significance of the contract extension for TAT Technologies?

The contract extension enhances TAT's market position and profitability, affirming the success of its strategic partnerships.