TATT.TA(TATT.TA)
TATT.TA
Matthew Chesler: Good morning, and thank you for joining the TAT Technologies Fourth Quarter and Full Year 2025 Earnings Conference Call. This call is being recorded. My name is Matt Chesler with FNK IR, a U.S.-based Investor Relations firm supporting Eran Yunger, TAT's Internal Head of Investor Relations. Joining me today are Igal Zamir, TAT's President and CEO; and Ehud Ben-Yair, TAT's CFO. Before we begin, I'd like to remind you that certain statements made on this call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These statements are based on current expectations and assumptions and involve risks and uncertainties that could cause actual results to differ materially. Additional information regarding these risks and uncertainties can be found in our filings with the SEC, including our most recent Form 20-F. TAT assumes no obligation to update forward-looking statements, except as required by law. Investors are cautioned not to place undue reliance on these forward-looking statements. During this call, we may discuss certain non-GAAP measures. Reconciliations of these measures to the most directly comparable GAAP measure are available in our earnings release issued earlier -- issued yesterday and in our Form 6-K filed with the SEC. With that, I'd like to turn the call over to Igal.
Igal Zamir: Thank you, Matt, and good day, everyone, and thanks for joining us. We appreciate the continued interest in TAT, and thanks to our shareholders, analysts and partners for your ongoing support. We are summarizing here 2025, which was another strong year for TAT Technologies. We delivered record revenue, record profitability and significant growth in the value of our long-term agreements. We're especially pleased that we accomplished this performance amidst the backdrop of industry challenges, including tariffs and ongoing supply chain constraints across the aviation ecosystem. Equally important, we continued strengthening the organization itself. Over the past year, we have invested in building the team and operational capabilities needed to support the next phase of growth and scaling the company. We also completed an important corporate milestone transitioning from a controlled company to a widely held public company with a growing base of U.S. institutional investors. This represents a meaningful step in the evolution of TAT and further aligns with our global capital markets. TAT operates as a diversified multiproduct aviation platform, and our performance continued to outpace the broader maintenance, repair and overall market. As we enter 2026, we do so from a position of strength with the right team, the right capability, strong financial position and expanding high-quality backlog. Looking at the results. When I'm looking at the full year 2025, revenue increased in [ 17%, ] while fourth quarter revenue grew 13%, this marked 12 consecutive quarters of double-digit revenue growth for TAT, all organic. Our growth during the year was broad-based across the business and reflects the strength of our diversified portfolio as well as continued market share gains. While the growth rates moderate somewhat in the fourth quarter, overall, it was another very strong year. Profitability during the quarter was affected by ongoing supply volatility, particularly within our APU and Landing gear segments, yet it was still a record for TAT. Importantly, backlog and long-term agreements continue to strengthen in the fourth quarter. The number and the value of contracts with our customers continues to increase, reflecting sustained demand for our services. As a result, the value of our long-term agreements and backlog reached approximately $550 million, up from $520 million at the end of third quarter and significantly higher than the $429 million reported at the end of 2024. While we are facing continuous -- continuing supply chain challenges in Q1, overall, we remain very optimistic about the outlook for 2026. In terms of the -- some comments about the product lines. In our APU business, we delivered a strong year of growth with activity rebounding steadily after the slower start of the year. We made meaningful progress on several strategic contracts and increased our market share in the 500 and the 200 APU categories, further strengthening our position with key customers. Our OEM license capabilities continue to support the competitive turnaround time and a high level of service quality. While intake in this segment can remain somewhat volatile from quarter-to-quarter, as we saw in fourth quarter, the underlying demand fundamentals remained structurally very strong. Moving to heat exchangers, which remains the largest and most stable segment. The business continued to generate consistent recurring demand. This business benefits from more than 60 years of technical expertise and our unique combination of OEM manufacturing and MRO capability. We serve both commercial and defense customers across the broad installed base of aircraft platforms. While we experienced some timing-related impact on fourth quarter, these do not change the long-term growth trajectory of the business, which continues to be supported by new aircraft platform and fleet conversion program. On the landing gear side, the segment continues to show growth as the aviation industry enters major MRO maintenance cycle. While supply chain constraints across the industry, particularly related to parts availability and material lead times remains a challenge that we continue to actively manage. Demand for our landing gear and maintenance remains strong. Our in-house machining and plating capabilities provide airline customers with significant advantage in both cost efficiency and turnaround time. Finally, our trading and leasing services remains as an important strategic component to our core MRO operation. This business helps customers manage supply chain constraints while improving fleet availability. Our APU leasing pool, in particular, benefits from our in-house maintenance capabilities that allow us to keep unit service ready. As expected, quarterly results in this business can vary significantly depending on trading activity and parts availability. But on a full year basis, the performance remains very strong and continues to support our broader customer solution offering. Another key highlight for the year was the continued strengthening of our financial position. We generated positive operational cash flow and maintained a strong cash conversion across the business. During the year, we successfully raised capital in the public market and expanded our credit facility, positioning us well to support the next phase of growth. This financial foundation provides both flexibility and discipline. Our objective is clear: to maintain the financial strength needed to pursue strategic acquisition while continuing to invest in organic growth opportunities across the business. When I'm looking at the industry and the broader industry environment, global aviation demand continues to grow and with it the need for MRO services. At the same time, constraints in delivery of new aircraft are leading airlines to keep existing fleets in service longer, further supporting maintenance demand across the industry. That said, supply chain constraints remain one of the primary challenges affecting the MRO ecosystem, and this dynamic continues throughout 2025. We continue to see normal fluctuation in maintenance intake as airlines sometimes extend service intervals due to parts availability, while in other periods, demand accelerated as deferred maintenance returns to the system. Our diversification and operational agility remains important competitive advantage in navigating this environment, although they do not eliminate the industry-wide pressures. In fourth quarter, we started experiencing another wave of supply chain disruptions that are continuing into the first quarter of '26. Especially, we're seeing parts availability delays from a major supplier that are slowing certain APUs and landing gear services' turnaround time. Our teams are working intensively with the suppliers and customers to address these issues, although we do not yet see a broad recovery in overall supply chain performance. All being said, underlying demand across the aviation market remains very strong, and our teams executed extremely well during the year, delivering another set of record results for TAT. Strategic outlook and inorganic growth. Looking ahead, we believe 2026 will be another strong year for TAT. This outlook is supported by new long-term agreements that we already signed and additional opportunities in our pipeline. And our record backlog, along with the sustained demand for the aviation MRO services, that says -- we do expect some operational challenges during the first part of the year, [ primarily ] related to ongoing supply chain environment. Based on the -- based on the increased backlog and the intake levels we are seeing over the past 3 months, we remain extremely confident in our overall trajectory for the business. M&A is also a clear strategic priority for us in 2026. Our balance sheet and cash position provide the financial capacity to act. Over the past year, we have further defined our acquisition strategy and developed a pipeline of opportunities that could expand our capabilities and market presence. Our focus is on accretive bolt-on acquisitions that expand our addressable market and natural adjacencies to our existing operations and deepen the value that we provide to our customers. Scale is increasingly important in MRO sector as a larger platform enables better inventory management, greater diversification and stronger customer relationships. Overall, we remain confident in our ability to drive revenue growth and margin expansion throughout 2026 and beyond. With that, I will now turn the call over to Ehud for a more detailed review of our financial results.
Ehud Ben-Yair: Thank you, Igal, and good morning, everyone. As I review the financial results, I would highlight that 2025 reflects the continued strength of our operating model. We delivered strong revenue growth, expanded margins and generated strong cash flow while continuing to invest in the capabilities needed to support the company's next phase of growth. The results of the fourth quarter of 2025 and the full year represent another record year for TAT. Fourth quarter revenue increased by 13% to $46.5 million, up from $41.1 million in the same period last year. For the full year, revenue grew more than 17%, driven by strong demand across our core business lines as well as continued market share gains. The growth in revenue was contributed from all 4 strategic product lines with higher growth in the APU, landing gear and trading, offset by lower growth for the heat transfer solutions, both on the OEM and MRO side. This is fully aligned with our growth expectation for 2025. During 2025, the MRO side of business grew to a level of 71.4% of the total revenue compared to 68.6% in 2024. This is again aligned with the revenue growth that was planned for MRO and less for the OEM side of business as these are mainly dependent on the aircraft manufacturer scale of capacity. Our gross profit for the quarter increased by 23.6% and gross margin expanded by 210 basis points to the level of 25.2% compared to 23.1% in the fourth quarter last year. This improvement reflects our continued focus on optimizing our cost structure, improving operational efficiencies and benefiting from a favorable product and service mix. This is the third consecutive quarter that we are achieving a gross margin level above 25% as previously communicated and was expected for the second half of 2025. During 2025, we implemented part of our cost saving and efficiency improvement initiative. This resulted in an improved gross margin for the MRO side of business by 430 basis points, while gross margin for the OEM improved by 80 basis points. Operating income for the quarter reached the level of $4.9 million, an increase of 20.2% year-over-year, demonstrating the operating leverage in our model as higher volumes translate into improved profitability. For the full year, operating income was $18.8 million compared to $12.5 million in 2024, representing a growth of 50.4%. During the fourth quarter of 2025, we hired several key executives that will be taking an important part in our growth strategy execution.The salaries and benefits were recorded during the end of Q3 and in full in Q4, which caused a slight increase in OpEx for this quarter. Net income for the quarter was $4.7 million compared to $3.6 million a year ago. And for the full year, net income was $16.8 million compared to $11.2 million in 2024. This is an increase of 50.6%. Please note that while tax expenses are booked, these are mainly noncash movement between deferred tax assets and tax liabilities. The new bill allowed us to defer tax payment in the United States toward the end of 2026, while previously expected to start in Q1 of 2026. And in Israel, we have enough past losses that will carry forward until Q4 of 2026. On the net financial expenses, during June 2025, immediately after the equity round, we decided to use some of the proceeds to reduce the amount of short-term loans and the remaining of the funds were deposited in short-term bank deposits. However, in the second half of the year, there was a negative impact on the exchange rate between the Israeli shekel and the U.S. dollar. This had over 10% impact on the long-term loans taken from Israeli banking institutions. Adjusted EBITDA for the quarter increased by 24% to $6.9 million, translating to an adjusted EBITDA margin of 14.8%, a notable improvement from 13.5% margin in the same period last year. For the full year, adjusted EBITDA was $25.5 million, which are 14.3% of revenue compared to [ $18.6 ] million, which were 12.2% of revenue in 2024. The adjusted EBITDA grew by 37% and EBITDA margin improved by 210 basis points year-over-year. TAT continued to deliver operating leverage as a result of our disciplined expense management and healthy revenue growth. For the cash flow, cash flow from operations in the quarter was $5.6 million positive and $15 million positive for the full year compared to a negative cash flow of $5.8 million in the previous period. The improvement was driven by higher profits and better working capital management, cash flow for the full year of 2025, representing a 60% operating cash flow conversion from the adjusted EBITDA, another notable achievement. Turning to the balance sheet. Following the equity round in June 2025 and the strong operational cash flow management, cash went up to the level of $51.6 million and loans decreased to $11.7 million in total debt, resulting in a low debt-to-EBITDA ratio of 0.46. Shareholders' equity stood at $176.4 million, supporting a strong equity-to-asset ratio of 78%. The cash position and the overall balance of the company gives us the flexibility to finance future acquisitions and investments for a position of strength. To sum it up, we are entering 2026 with a record level of backlog, long-term agreement and a very strong balance sheet. These factors should support the growth that we are expecting for this year and support our strategic priorities. At the same time, as mentioned, we continue to operate in an environment where external elements can create some variability in the timing of maintenance activity and revenue recognition from quarter-to-quarter. We are currently managing parts availability issues from several suppliers in the APU and landing gear segment, as noted, which may affect the revenue recognition in the near term. However, based on the backlog and the level of current intake, we remain confident in the underlying demand for our services and the long-term growth trajectory for all 4 strategic product segments. Overall, TAT enters the year with a strong financial foundation, disciplined cost management and the flexibility to continue investing in both organic growth and strategic opportunity. Now before I conclude, I would like to note a small change to our reporting schedule beginning next quarter. Historically, TAT has released results after the NASDAQ market close and held the earnings call the following morning. Starting with our first quarter of 2026 results. We plan to release the financial reports in the morning before opening markets in the U.S. and host a call shortly thereafter. We believe this format will make it easier for our covering analysts and our increasingly global shareholder base to engage with the results. And with that, I will return the call back to Igal.
Igal Zamir: Thank you, Ehud. In closing, 2025 was a landmark year for TAT. It marked our third year -- consecutive year of record results with improvement across every key metric, including revenue, margin, backlog value of long-term agreement and profitability. And as Ehud mentioned, as well as the cash flow and strengthening the balance sheet. We entered 2026 in the strongest financial and operational position in the company history. I would like to thank our employees around the world. Their dedication and professionalism are what makes these achievements possible. This performance reflects the resilience and commitment of our employees across the organization to success. I'd like to open the call for questions. Matt?
Matthew Chesler: Thank you, Igal. So we're now going to open up the call to the Q&A session. [Operator Instructions] The first question is going to be from Ben Klieve from Benchmark.
Benjamin Klieve: So first question here is regarding the dynamic you noted throughout the prepared remarks on the supply chain. And I'm curious about that in the context of the backlog increase, particularly the -- it looks like task order increase that came in year-over-year. Can you really just talk about that dynamic? Was that backlog increase largely a function of kind of deferred revenue that wasn't realized from the supply chain disruptions? Or was there some notable contract -- long-term contract wins that were within there that drove that backlog number?
Igal Zamir: Yes. So the vast majority of the increase that we see in Q4 comes from a new contract that was signed, long-term agreements. We are -- as a general thing, the backlog or the intake, what we call of MRO work during the fourth quarter, as expected, is softening. If you recall, I mentioned it several times in the last 4, 5 quarters. We did see a huge increase in intake towards the -- really at the end of the year going into Q1. Those of you who were in our facility in Greensboro, so the amount of engines that we have, it's just getting -- it's increasing every day that goes by. But this is mostly in Q1 of this year. So going back to your question, the vast majority of the increase comes from new contracts that were signed and OEM POs that we received for later this year. And a small portion that started showing up at the end of the year is only a small portion, if I may say, is the backlog of MRO.
Benjamin Klieve: Okay. That's helpful. And then for my follow-up question, let me get back in the queue is related to this. And you noted that those -- that the increase in the facility here in early February was pretty substantial. And so I'm wondering about the turnaround time for these orders that came in late in '25 in the context of the supply chain dynamic. Are you seeing a significant extension here of the turnaround time and just kind of creating a logjam in those facilities? Or are you able to kind of manage the turnaround time in the context of the supply chain disruptions?
Igal Zamir: I'll give a slightly longer answer here because during 2025, I was asked several times about my view of supply chain, and I was mentioning that while the disruption is very much in place, we see improvement. And we don't know -- we still don't see the light at the end of the tunnel, but we did notice a constant improvement. In the last quarter of last year, it completely reversed. And all of a sudden, we are facing challenges again, especially in APUs and landing gear, dramatically extended lead times with no advanced warning or just lack of supply and whatever. You need to remember that when it comes to an engine, there are hundreds of different parts that we need to repair or replace per engine. All it takes is one bolt or one seal or one screw that we need to replace, and we cannot send the engine. So potentially, theoretically, the supply chain challenges can definitely impact the turnaround time.
Matthew Chesler: The next question is from Jonathan Siegmann at Stifel.
Jonathan Siegmann: Congratulations on the strong end of the year. I was hoping you might be able to comment on what impact, if any, you are expecting to be seeing from your customers absorbing some higher oil prices and the potential for an extended conflict in the Mid East. Any hesitancy on MRO activity? And is there a duration of this conflict that you think could materialize some risks of some interruption in the strong cycle?
Igal Zamir: So far, I said it in the following way. We have -- if we look at Q1 and the intake in Q1 and so far and how it's going, we don't see any impact on the opposite. We see a very strong intake of work coming through our shops across all business lines. Relating to your second part of the question, I really don't know how to answer it. It's -- I feel like it's above my pay grade, the geopolitical environment and what may happen and how long. But so far, we don't see any impact.
Jonathan Siegmann: That's great. And your manufacturing in Israel, just I hope families and everything are safe. But just any comment on continuing to operate in this environment would be helpful.
Igal Zamir: We are extremely -- I would say we are extremely proud in our Israeli team. We never shut down the facility, continuing with major, major challenges, as you can only imagine, continuing to work nonstop and delivering solid results despite everything that is going on over there. So it looks really solid.
Matthew Chesler: The next question here is going to be Josh Sullivan at Jones Trading.
Joshua Sullivan: Can you just comment on maybe what the bid environment looks like this year for APU customer engagements versus last year? What does that demand cyclically look like?
Igal Zamir: Are you asking about the bid environment?
Joshua Sullivan: Yes, as customers look at their APU needs this year versus last year. What are you guys looking at as far as bid engagement this year versus last year?
Igal Zamir: I don't think that -- I'm looking at it differently from my experience, and I may be wrong, but airlines have contracts for each type of component that they have in their fleet. And they typically -- in the vast majority of the cases, they don't open contract in the middle of the term. So there is almost zero calendar impact as far as I see on their decision. So they are under contract, they get to the end of the contract and a few months before they open an RFP. So the RFPs are coming on a steady pace. And even -- I would say, even when there are challenges, it's rarely that an airline will decide to break a contract. And actually, I don't remember ever seeing it breaking a contract at the middle of the contract and opening a new bid. Now from time to time, if you have -- if an airline has a customer that is struggling or a vendor that is struggling, they may choose to send several units without a contract. And that's something that we see from time to time, meaning airlines that are not under contract with TAT and are sending us APUs or gears or thermal components for repairs without a contract. Obviously, this is more related to the existing vendor challenges they have. But even in these cases, even when they have challenges, they don't tend to open RFPs. I think that they have -- if I'm trying to put myself in their shoes, they have much higher priorities on other systems and components. And on the mechanical systems and APUs, they typically don't change. So all in all, it's a steady state. It's a steady flow of new RFPs that are opening with opportunities. When I'm looking at this year, opportunity leads to airlines that are probably going to open RFPs in the next few months and existing RFPs. We just announced -- a week ago, we announced a very nice win of an RFP. So it's continuing, give or take, in the same pace.
Joshua Sullivan: Okay. Got it. And then just supply chain constraints impacting margin, you guys are still at records. Can you just help us frame what margins are going to look like once the constraints are resolved? What are we playing for with that on the margin side once we get past these constraints?
Igal Zamir: I would say, for years, I was talking about the 25% and 15%, the 25% gross and 15% EBITDA. And now that we are there for a couple of quarters in the range, we definitely see more opportunities. Some of them for supply chain, some of them is continuing improvement of efficiencies as the business scales. But definitely, I would say a few points without committing to anything, we believe that we can be -- what I consider to be -- if you look at companies which I consider to be best-in-class and really the top performing companies in the industry in our line of business. You see EBITDA is in the range of 20%, a little bit more. That's where we aspire to be. It's not a forecast, and I'm not providing timeline, but we definitely aspire to be in there. And I think that we have a road map of how to get there. Supply chain challenges is a key component. We need to remember, again, hundreds of parts per APUs and dozens of parts for landing gear, if your contractual vendor is struggling and you have to buy a part in the market to satisfy the customer needs, you typically pay way more than your contractual price. So it has a significant impact on profitability. And the second factor that has -- that affects profitability is the lack of teardowns. The MRO industry on the APUs, especially a big component in managing profit is the ability to buy all the engines from the aircraft teardown and break them into pieces and then repair the pieces and use the pieces. Typically, in most cases, the sum of the pieces, the value of the pieces is much higher than buying -- than the engine itself. So you save a lot of money by buying -- has removed the engine from an old aircraft and overhauling the parts. The challenge over the last 2 years have been that there are barely any engines for sale, very little teardown comparing to the activity the industry used to see before that. So that's another factor as the industry continues to stabilize and airlines want to renew their fleets, I believe that we will see a growing activity of all the aircraft retirement, which will turn -- which will increase the availability of engines in the market and then we will be able to use more -- removed parts after overhaul, which definitely helps to further improve the margin.
Matthew Chesler: The next question is from Sergey Glinyanov from Freedom Capital Markets.
Sergey Glinyanov: So I hope that you are all staying safe in this time of uncertainty. And my question is about, do you see increasing demand on your defense products and services? Are you able to catch some orders for new platforms, for example?
Igal Zamir: Sergey, I'm not sure that I understood -- are you asking about the impact of the situation -- global situation on our defense orders?
Sergey Glinyanov: Partially yes, but I'm interested in your ability to catch some new orders for your defense programs to supply defense products and services.
Igal Zamir: So we definitely -- I'll split it into two sections. First of all, let's remember that defense is a small portion of TAT overall revenue. So that's one thing that we have to bear in mind. On the MRO side, we definitely see -- actually on both OEM and MRO side, defense sector, we definitely see a substantial increase, both on the MRO side as Air Forces are trying to keep their fleet in operational condition and on the new orders that we are receiving to support the systems that -- where we are the component supplier to the system. So we see a very nice increase. We need to remember, though, that it's not -- it's still a small portion of the overall portfolio of TAT. Most of our business is OEM -- is commercial, I'm sorry.
Sergey Glinyanov: Yes. Got it. And any thoughts about M&A? What areas are you interested in currently?
Igal Zamir: On the M&A activity, as we mentioned in the last quarter, we started -- we launched the effort early fourth quarter. We hired a VP of Corporate Development for the company. We developed a strategy, and we are actively looking for -- we are in active process looking for opportunities and for deals. Obviously, we go about it with lots of discipline and wanting to make sure that we will add value and the deals that we write for TAT and whatever, but very actively working on it. That's what I can say at this point. Obviously, we will share more as we make more progress.
Matthew Chesler: This time, let's move to a question that was submitted to us directly, and it's from Michael Ciarmoli from Truist Securities. And Mike asks, can you give us an update on your expectations for the 131 APU for 2026 and beyond? Should we see -- should we expect to see a growth inflection at some point this year as you start to increase your penetration and grow share with this product line?
Igal Zamir: Yes. So I think, first of all, the answer is yes, we are expecting to see growth from the 131. I think that it was discussed, those of you who visited our facility in Greensboro for the Investor Day, we spoke about it back then. When we look across the businesses on the 200 engine, we are doing extremely well. We are gaining more and more market share. I think that we are in a great position to continue and grow the market share this year. And the 500, we made a huge stride forward last year with contracts, with long-term agreements, with engines and whatever. Over there, we need to remember that there are less -- it was -- we have less competitors, if you will, and comparing to the 131. And I think that we are in a very strong position in terms of our performance and whatever. Going to the -- I'm sorry, on the 500. Going into the 131, we have two things that we are doing this year. First of all, in terms of priorities and as our COO mentioned during the Greensboro visit, this year, we make -- the operational focus is to make us way more efficient and profitable on the 131 to become more competitive in the market. That's one key effort for this year. And in parallel, we are definitely looking at nice -- list of opportunities and leads that we are going to bid on. So we have a new -- we extended our sales team at the end of last year. We hired a new VP of MRO business to run our entire MRO business. And now the team is really focusing on expanding the outreach and behind the large American airliners expanding across the globe into midsized airlines and smaller airlines and chasing these opportunities. So I think it's just a matter of time, we are expecting to see deals coming.
Matthew Chesler: Igal, there are several additional questions that are overlapping. So what I'm going to do is I'm going to summarize them and it goes like this. Did Q4 sales compared to Q3 surprise you? Do they indicate anything for the coming quarters? And what's your basis for optimism regarding 2026?
Igal Zamir: So I don't know who of you -- any of you that participated in third quarter call of 2024. This was before fourth quarter of '24. And I took the time and energy to explain back then that fourth quarter is traditionally soften for TAT. We see it across the board and kind of preparing the stage for fourth quarter of '24 that will be soft. And eventually, it wasn't soft at all. It was a very strong quarter. But what -- the only difference is that back then, we still had plenty of back orders, meaning we had work that we accumulated during the years of COVID and whatever that we were -- that helped us as a buffer from a financial standpoint, it helped us as a buffer in quarters that are softened. So up until the end of '24, the results of the MRO business segment of TAT was -- were less related to intake on a specific quarter, and we were less exposed to the quarterly fluctuation. And we were -- because we had all the spare work from the past that every time that the intake was slightly lower, we could use as a buffer. Having said this, needless to say that having a buffer of work is not a good thing because our key concern and my key objective is to provide great service to our customers. I think that this is really differentiating us from competition. Bottom line is that starting Q1, and we reported it, we completely caught up. We have 0 -- almost 0 back orders on MRO. So basically, what we have every month is every quarter to sell is what we get during the quarter, and obviously, it will be more seasonal. So bottom line, there was no surprise in Q4. We expected cargo carriers in Q4 tend to switch only to emergency maintenance. They prefer to keep all their focus on flying during the holiday season. And in our line of businesses, what we see typically, especially in the thermal components during the summer, we see a huge increase in intake. Airlines going into the summer, into the hot season are trying to make sure that they have a very -- that the entire spare pool of heat exchangers is in operational condition because this is where they see more events. And so they overflooded their pool. And then in fourth quarter, they are reducing the size of the pool in order to save money and to improve their annual performance on maintenance expenses. We see it every year since I joined TAT, nothing surprised. We -- going into fourth quarter this year, we just -- knowing it, we placed way more focus on trading and making sure that we will have assets available for exchanges on the trading side and to compensate for the expected softness on the MRO. It worked very well for us. I'm happy to see that it's a counter cycle, so it worked well. Going into this year, and it started in the last 10, 14 days of December, we see -- and again, we see it from time to time, a major increase in the amount of work that we received across all business lines. I think on the APU side, we never saw the amount of engines. When we visited Greensboro, there were -- at the time that we were at Greensboro, there were close to 100 engines in the shop. It's phenomenal numbers, very strong going into this year.
Matthew Chesler: Okay. Thank you for that. I'm going to now turn the call back over to you for concluding remarks.
Igal Zamir: So again, all I can do is just repeat what we just said. We are very pleased with the results. Another amazing year for TAT, very strong. We started by increasing -- if you think about the last 2 years' messages that I've been conveying, we started with just recovery from COVID. And then it was about good growth. And then we added -- we added the layer of improving profitability, and we can see the results now. Then we were challenged more than a year ago about our cash flow, and we explained that cash flow is going to come as we stabilize the business. And now we see the results and the drastic improvement in cash flow. We were asked about inventory. And if you look at our inventory, it's stable and actually going down. So we spoke about M&A and strengthening the organization. And all of this -- all of this happened. So if you think about -- if we go back 1.5 years and the plans that we shared and focus, there is a full alignment, and I'm very happy to see that we achieved all of this. We are going into '26 with a very strong position and expecting and -- to see the growth continuing in 2026, both organically and inorganically. The value of the backlog and the long-term agreement is really encouraging. The pipeline of opportunities that we have ahead of us is just adding to it. So we remain optimistic and looking forward to continue developing the organization. With that, thank you again for joining us today. We appreciate your continued confidence in us and happy to continue the discussion offline.
Matthew Chesler: Thank you, everyone, for joining us today. You may now disconnect your lines.