TAT provides a variety of services and products to the commercial and military
aerospace and defense industries and operates under three segments: (i) Original
Equipment Manufacturing or “OEM” of Heat Management Solutions (ii)
Heat Transfer Services and Products, and (iii) Maintenance, Repair and Overhaul
or “MRO” services for Aviation Components, each with the following
characteristics.
TAT’s activities in the field of OEM of Heat Management Solutions primarily
relate to its Gedera facility and include (i) the design, development, manufacture
and sale of a broad range of heat transfer components such as heat exchangers
used in mechanical and electronic systems on-board commercial, military and
business aircraft; (ii) the manufacture and sale of cooling systems and (iii)
a variety of other aircraft accessories and systems such as pumps, valves, power
systems and turbines.
TAT’s activities in the field of MRO services for heat transfer products
primarily relate to its subsidiary, Limco, and include the maintenance, repair
and overhaul of heat transfer equipment and to a lesser extent, the OEM manufacturing
of certain heat transfer products. TAT’s Limco subsidiary operates an
FAA certified repair station, which provides heat transfer MRO services and
products for airlines, air cargo carriers, maintenance service centers and the
military. Limco is also certified by the European Aviation Safety Agency, or
EASA, the Civil Aviation Administration of Thailand (Thai), the Civil Aviation
Administration of Indonesia and the Civil Aviation Administration of Brazil.
TAT’s activities in the field of MRO services for aviation components
primarily relate to its subsidiary, Piedmont, and includes the maintenance,
repair and overhaul of APUs, landing gear 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 principal strategy is as follows:
Enhancing OEM Capabilities — TAT’s goal through Gedera and Limco
is to capitalize on its technical expertise, experience and reputation in the
markets of heat management solutions, to expand the scope of its OEM offerings
for the commercial and defense industries. TAT also intends to continue the
transition from the development and manufacture of single components to the
development and manufacture of complete systems.
Expand the scope of MRO services - TAT’s goal is to use its technical
expertise, engineering resources and facilities to provide MRO services for
additional types of aircraft and additional aircraft systems, subsystems and
components and intends to develop the required technical expertise to provide
these additional MRO services.
Increasing Market Share — TAT plans to continue its aggressive marketing
efforts for new customers as well as to expand its activities with its flagship
customers. As part of TAT’s efforts to achieve greater penetration in
the international markets, TAT intends to expand its marketing presence in Western
Europe, which is TAT’s second largest market, and to substantially increase
its presence in Asia, South America, East Europe and Africa, which are fast
growing markets where TAT has had limited sales to date.
Effective synergy among group members — TAT plans to enhance the synergies
between its various businesses by, among other things, using Gedera’s
OEM design capabilities to provide Limco enhanced capabilities to repair heat
transfer systems and products, enabling Limco to compete more effectively in
the industry and by supplying to Limco heat transfer components which should
enable Limco to reduce prices on its MRO services.
Organic growth and M&A — In addition to growing the existing businesses
of Gedera and Limco, TAT also believes that additional acquisition opportunities
exist that will complement its OEM and MRO businesses. TAT will continue to
pursue targeted complementary business acquisitions which will broaden the scope
and depth of its OEM and MRO operations and increase its market share.
OEM of Heat Management Solutions
Through its Gedera facility, TAT manufactures a wide range of heat transfer
products used on board aircraft, air conditioning systems, environmental control
systems and cooling systems for electronics for military use. These products/systems
are manufactured in compliance with all of the stringent quality assurance standards
that apply to the manufacture of aircraft parts. Gedera’s quality systems
comply with ISO 9001, AS9100, Boeing quality systems approval D6-82479 and FAR
21.303 (the FAA standard for Parts Manufacturer Approval).
Heat Transfer Products
Gedera manufactures a wide range of heat transfer products. Gedera specializes
in the design and manufacturing of highly efficient, compact and reliable heat
transfer products that are designed to meet stringent constraints such as size,
weight and applicable environmental conditions. Heat transfer products, such
as heat exchangers and cold plates, are integral components of a wide variety
of environmental control systems and mechanical and engine systems, as well
as a wide range of electronic systems. These systems generate heat during operation
that must be removed and dissipated. Heat transfer products facilitate the exchange
of the heat created through the operation of these systems by transmitting the
heat from a hot medium (air, oil or other fluids) to a cold medium for disposal.
In the aerospace industry, there is a constant need for improvements in performance,
weight, cost and reliability. In addition, as electronic systems become smaller
and more densely packed, the need for sophisticated and efficient heat transfer
components used to provide the cooling functions becomes more critical. Using
Gedera’s technological expertise, TAT believes it is well positioned to
respond to these industry demands through continued new product development
and product improvements.
Gedera’s principal heat transfer products include heat exchangers and
cold parts. Typically, air-to-air heat exchangers cool a jet engine’s
bleed air which, when cooled, is then used in the aircraft’s air conditioning,
pressurization and pneumatic systems. The liquid-to-air heat exchangers cool
liquids such as engine oil, hydraulic oil and others used in other systems.
Gedera provides one stop shop to all of the different types of heat transfer
products in certain aircraft. Gedera’s heat exchangers are generally sold
for between $2,000 and $20,000 per unit. A significant portion of Gedera’s
heat transfer products are sold to customers in connection with the original
manufacture or retrofitting of particular aircraft equipment. Gedera generally
enters into long-term supply contracts with its customers, which require Gedera
to supply heat transfer products as part of a larger project.
Gedera also manufactures other heat transfer equipment, such as cooling chassis,
heat sinks and cold walls (which may be air-to-air, liquid-to-air or liquid-to-liquid),
which control and dispose of heat emitted by the operation of various electronic
systems. Such products are currently utilized mainly in radar systems, avionics,
electronic warfare systems and various pods for targeting, navigation and night
vision.
Gedera’s customers for heat transfer products/systems include: Liebherr,
Boeing, IAI, Cessna, Bell Helicopter, Raytheon Aircraft Company, as well as
the United States Air Force and Navy. As a result of the specialized nature
of the systems in which Gedera’s parts are included, spare and replacement
parts for the original heat transfer products/systems are usually provided by
Gedera.
Aviation And Flow Control Accessories
Gedera is also engaged in the design, development and manufacture of aviation
and flow control accessories. These accessories include components such as valves
and pumps. Gedera’s customers for the design, development and manufacture
of aviation and flow control accessories include Lockheed-Martin, Boeing, Teledyne,
the Israeli Air Force, IAI, as well as the U.S. Air Force and Navy.
Cooling And Air-Conditioning Systems
Gedera is also engaged in the design, development and manufacture of complete
environmental control systems and cooling systems. This product line includes
ground cooling systems used in military facilities, tents, vehicles and other
military applications. It also includes Vapor Cycle air conditioning systems
(or ECS — Environmental Cooling Systems) used in light aircraft. Gedera
offers mobile cooling and air conditioning solutions for military applications
such as mobile command and control units, command and control vehicles, armored
vehicles, mobile broadcast units, mobile hospitals, etc. In addition, Gedera
designs, develops and manufactures power electronics cooling systems based on
customer specifications, while providing a complete engineering solution in
compliance with strict military and civil aviation standards. Gedera’s
systems are used in Israel and abroad and are tested under strict standards.
Heat Transfer Services and Products
MRO Services For Heat Transfer Products
Through its Limco subsidiary in the U.S., TAT provides MRO services for heat
transfer products. 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 the 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. One of the ways they are accomplishing these
goals is through the outsourcing of more of their maintenance and support functions
to reliable third parties. Limco also believes that commercial carriers who
have made the decision to outsource their MRO requirements are searching for
MRO service providers with a wide-range of service capabilities. These 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. Recent military
operations around the world have significantly increased usage of the global
military aircraft fleet and resulted in a higher rate of maintenance activity.
Limco believes that an aging military fleet and the increased use of upgrade
programs aimed at extending the useful life of aircraft will provide continued
MRO growth opportunities.
Limco specializes in the repair and overhaul of heat transfer products. These
products are heat exchangers including oil coolers, pre-coolers, re-heaters,
condensers, water separators, fuel heaters and evaporators.
Limco is continually increasing its MRO capabilities based upon market need
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, Gulfstream, British Aerospace
and others.
One of Limco’s operational strengths and competitive advantages is the
close cooperation with TAT’s Gedera facility. Through Gedera’s core
manufacturing capabilities and engineering expertise, Limco enjoys a constant
supply source of cores of the highest quality necessary in order to perform
its MRO services for heat transfer products. In addition, Limco benefits from
Gedera’s varying engineering and development capabilities relevant to
Limco’s services in the field of heat transfer.
Limco performs MRO services at its repair station in Tulsa, Oklahoma which is
ISO9000 and AS9100 certified and licensed by the FAA and EASA, as well as by
the Civil Aviation Administration of Thailand (Thai), the Civil Aviation Administration
of Indonesia and the Civil Aviation Administration of Brazil, to provide MRO
services. Limco’s Oklahoma facilities provided MRO services for heat transfer
products.
Limco offers MRO services for heat transfer components to its customers on multiple
levels. If the damage is significant, Limco will remanufacture the unit, which
generally entails replacing the core matrix of the damaged or old heat transfer
product in lieu of replacing the entire unit with a new one. 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
similar to those provided to new units.
OEM Authorizations And Licenses
Limco believes that establishing and maintaining relationships with OEMs of
aircraft systems and components, is an important factor in achieving sustainable
success as an independent MRO service provider. OEMs grant participants in the
overhaul and repair services market authorizations or licenses to perform repair
and overhaul services on the equipment they manufacture. OEMs maintain tight
controls over their authorized and licensed MRO service providers, in order
to maintain high quality of service to their customers, and generally grant
very few authorizations or licenses. Obtaining OEM authorizations requires sophisticated
technological capabilities, experience-based industry knowledge and substantial
capital investment. Limco believes that service providers that have received
OEM authorizations and licenses gain a competitive advantage because they typically
receive discounts on parts, technical information, OEM warranty support and
use of the OEM name in marketing. Limco is an independent MRO service provider
that is a well-recognized repair center of Hamilton Sundstrand, the largest
heat transfer equipment manufacturer, for its air-to-air heat transfer equipment
in North America.
OEM Capabilities
In addition to its MRO services, Limco also acts as an OEM manufacturer of heat
transfer products used mainly in military aircraft and also in commercial, regional
and business aircraft. Limco specializes in the design and manufacturing of
highly efficient heat transfer components, which are designed to meet stringent
constraints such as size, weight and applicable environmental conditions. These
units include, oil coolers, precoolers, reheaters, condensers, fuel heaters
and evaporators.
Limco also manufactures air conditioning systems, complete environmental control
systems and cooling systems for electronics. Limco currently offers approximately
80 OEM parts to the aerospace industry. These parts are manufactured in compliance
with the stringent quality assurance standards that apply to the manufacture
of aircraft parts.
Limco’s quality systems are ISO9000 and AS9100 certified and Limco has
both Boeing quality systems approval D6-82479 and FAR 21.303 (the FAA standard
for Parts Manufacturer Approval).
MRO Services for Aviation Components
Through its Piedmont subsidiary in the U.S., TAT provides MRO services for aviation
components, APUs and landing gear. 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 the 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. One of the ways they are accomplishing these
goals is through the outsourcing of more of their maintenance and support functions
to reliable third parties. Piedmont also believes that commercial carriers who
have made the decision to outsource their MRO requirements are searching for
MRO service providers with a wide-range of service capabilities. These 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. Piedmont believes
that an aging military fleet and the increased use of upgrade programs aimed
at extending the useful life of aircraft will provide continued MRO growth opportunities.
Piedmont specializes in the repair and overhaul of APUs and landing gear. APUs
are relatively small, self-contained generators used to start jet engines, usually
with compressed air, and to provide electricity, hydraulic pressure and air
conditioning while an aircraft is on the ground. In many aircraft, an APU can
also provide electrical power during in-flight emergency situations. Landing
gear are the structure that support an aircraft on the ground and allow it to
taxi, takeoff and land.
Piedmont performs MRO services at its repair station in North Carolina, which
is AS9001 certified and licensed by the FAA and EASA to provide MRO services.
Piedmont specializes in providing MRO services for APU models manufactured primarily
by Honeywell, and in providing MRO services for landing gear for regional aircraft
manufactured by Bombardier Canadair Regional Jet (CRJ 100/200), ATR (42/72),
Embraer (E170) and Bombardier Dash 8.
OEM Authorizations and Licenses
Piedmont believes that establishing and maintaining relationships with OEMs
of aircraft systems and components is an important factor in achieving sustainable
success as an independent MRO service provider. OEMs grant participants in the
overhaul and repair services market authorizations or licenses to perform repair
and overhaul services on the equipment they manufacture. OEMs maintain tight
controls over their authorized and licensed MRO service providers, in order
to maintain high quality of service to their customers, and generally grant
few authorizations or licenses. Obtaining OEM authorizations requires sophisticated
technological capabilities, experience-based industry knowledge and substantial
capital investment. Piedmont believes that service providers that have received
OEM authorizations and licenses gain a competitive advantage because 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.
Machining, Plating and Grinding, or MPG Services
Piedmont extended the provision of MPG services, either as supplementary to
its traditional MRO services or as stand-alone services. Piedmont believes that
establishing and maintaining relationships with customers to its MPG shop is
an important factor in achieving sustainable success as an independent MRO service
provider and creates a competitive advantage.
