The increasing fuel costs continue to impact the Commercial Airlines business environment by reducing airlines' profitability and offsetting the positive impact of growing air traffic. As a result, airlines defer MRO activities and utilizing existing stock (destocking) rather than maintaining inventory levels. On the other hand, we continue to witness positive indications from commercial OEMs in the aerospace industry that increase backlog of new airplanes and/or airborne platforms/systems. The defense market however shows growing weakness and is impacted by budget constraints.
We are encouraged by our ability to maintain a steady growth in our key businesses while all of the above impacts our businesses. The weakness in the defense market which is mostly relevant to the OEM of Electric Motion Systems operating segment, resulted in a decrease of our revenues in this segment compared to 2011.
We continue to focus on our core capabilities and believe that our efforts will sustain the trend of improved performance for the remainder of 2012 and in 2013.
We are continuing to preserve a strong balance sheet with limited liabilities, strong working capital and sufficient financial assets to support the growth of our operations".TAT TECHNOLOGIES AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in thousands, except share data)
September 30, September 30, 2012 2011 ASSETS Current Assets: Cash and cash equivalents $ 15,250 $ 28,452 Short-term bank deposits 10,100 - Marketable securities at fair value 1,800 2,469 Short-term restricted deposits 2,907 4,485 Trade accounts receivable (net of allowance for doubtful accounts of $346 and $ 2,447 as of September 30, 2012 and 2011, respectively) 19,076 17,180 Other accounts receivable and prepaid expenses 4,719 7,814 Inventories, net 33,835 33,436 Total current assets 87,687 93,836 Long-term assets: Investment in affiliated company 1,804 5,139 Funds in respect of employee right upon retirement 3,092 2,879 Long-term deferred tax 3,076 2,094 Property, plant and equipment, net 12,637 12,745 Goodwill, net - 1,073 Total Long-term assets 20,609 23,930 Total assets $ 108,296 $ 117,766 LIABILITIES AND EQUITY Current Liabilities: Current maturities of long-term loans 4,168 6,371 Trade accounts payables 7,210 6,465 Other accounts payable and accrued expenses 6,139 5,656 Total current liabilities 17,517 18,492 Long-term liabilities: Long-term loans, net of current maturities 1,176 5,240 Other accounts payable 85 115 Liability in respect of employee rights upon retirement 3,599 3,481 Long-term deferred tax liability 1,428 1,011 Total long-term liabilities 6,288 9,847 EQUITY: Share capital Ordinary shares of NIS 0.9 par value - Authorized: 10,000,000 shares at September 30, 2012 and 2011; Issued: 9,073,043 shares at September 30, 2012 and 2011; Outstanding: 8,805,270 and 8,815,003 shares at September 30, 2012 and 2011, respectively 2,790 2,790 Additional paid-in capital 64,402 64,460 Treasury stock, at cost, 267,773 and 258,040 shares at September 30 2012 and 2011, respectively (2,059) (2,018) Accumulated other comprehensive loss (1,196) (768) Retained earnings 17,888 22,110 Total TAT Technologies shareholders' equity 81,825 86,574 Non controlling interest 2,666 2,853 Total equity: 84,491 89,427 Total liabilities and equity $ 108,296 $ 117,766TAT TECHNOLOGIES AND ITS SUBSIDIARIES