TAT Technologies Ltd.

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 Schessler with FNKIR, a U.S.-based investor relations firm supporting Iran Younger, TAT's internal head of investor relations. Joining me today are Egal Zamir, TAT's president and CEO, and Ehud Ben-Yeir, 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 20F. 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 yesterday and in our form 6K filed with the SEC. With that, I'd like to turn the call over to Egal.

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 portability, and significant growth in the value of our long-term agreements. We're especially pleased that we accomplished this performance amidst a 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, multi-product aviation platform, and our performance continues to outpace the border 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 70%, 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. Postability during the quarter was affected by ongoing supplying volatility, particularly within our APU and lending year segments, yet it was still a record for TAT. Importantly, backlog and long-term agreements continue strengthening 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 continuing supply chain challenges in Q1, overall we remain very optimistic about the outlook for 2026. In terms of 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 remain structurally very strong. Moving to heat exchangers, which remains the largest and most stable segment, the business continues 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 board install base of aircraft platforms. While we experienced some time-related impacts 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 convergence 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 lending 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 units 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, 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 delivering of new aircraft are leading airlines to keep exiting or 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 interval due to parts availability, while in other periods demand accelerated as deferred maintenance returned to the system. Our diversification and operational agility remains an important competitive advantage in navigating this environment, although they do not eliminate these 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 lending you services turnaround time. Our teams are working intensively with the suppliers and the 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 team executes 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 said, we do expect some operational challenges during the first part of the year, preliminary related to ongoing supply chain environment. But based on the increased backlog and the intake levels we are seeing over the past three 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 the 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 more details review of our financial results.

Thank you, Gerhard. And good morning, everyone. As I review the financial results, I would highlight that 2025 reflects the continued strength of our operation 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 years represent another record year for T18. 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 businesses line, as well as continued market share gains. The growth in revenue was contributed from all four strategic product lines, with high 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 efficiencies 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 to 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 non-cash 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 a short-term bank deposit. 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 banks and 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. That 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 50 million dollar 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 the 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 viability 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 lending year 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 four 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, TAC has released results after the Nasdaq market closed and had the earning 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 US 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 result. And with that, I will return the call back to Igal.

Thank you, Ehud. Closing 2025 was a landmark year for TAT. It marked our third consecutive year of record results with improvement across every key metric. including revenue, margin, backlog value of long-term agreement, and profitability. And as I would mention, 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.

Thank you, Igor. So we're now going to open up the call to the Q&A session. From Zoom, there are two ways where you can participate. The first is to use the raise your hand icon, which is at the bottom of the screen. Clicking this will alert us that you want to be called on to ask a live question, and then you'll be placed into queue and called upon. Just note, you're going to be on mute until you're called upon. The second way to participate in Q&A is to use the Q&A widget, which will allow you to type in and text the question in. We'll then select questions from there as well, but just note, if we do run into a time constraint, someone from the IR team will get back to you if your question is not asked on the call. With that, we'll now begin and pause for a moment to begin the queue. The first question is going to be from Ben Cleave from Benchmark. Ben, we're going to unmute your line and then please go ahead. Operator, please go ahead and unmute Ben's line. Thank you.

There we go. All right. Success? Success. You're live. All right. Thanks, guys. 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 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 deferred revenue that wasn't realized from the supply chain disruptions, or was there some notable long-term contract wins that were within that that drove that backlog number?

So the vast majority of the increase that we see in Q4 comes from a new contract that was signed, long-term agreements. As a general saying, the backlog or 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 four or five weeks, We did see a huge increase in intake towards really at the end of the year going into Q1. Those of you who were in our facility in Greensboro saw the amount of engines that we have. 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. Okay.

Okay, that's helpful. And then for my follow-up question, I'm going to get back in queue, is related to this. And you noted that the increase in the facility here in early February was pretty substantial. And so I'm wondering about the turnaround time for these facilities. 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?

So, you know, 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 still don't see the light at the end of the tunnel, but we did notice 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 lending gear, and dramatically extended lead times with no advance 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 repair. 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 turnaround time. Okay.

Very good. Thank you for taking my questions. I'll get back in queue.

Thank you, Ben. The next question is from Jonathan Siegman at Stevo. Jonathan, please go ahead.

Your line is open.

Can you hear me? Good morning.

Hey, good morning.

Thank you for taking my question. 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 Mideast. 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? Thank you.

So, you know, so far, I say 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 to our shops and across all business lines. Relating to your second part of the question, I really don't know how to answer it. 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.

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. Thank you again.

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.

Thank you.

Thanks, Jonathan. The next question here is going to be Josh Sullivan at Jones Trading. Josh, please go ahead and ask your question.

Hey, good morning. Good morning, Josh.

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?

Are you asking about the bid environment?

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?

I don't think that, you know, I'm looking at it differently from my experience, and I may be wrong, but airlines have contracts for each type of, you know, component that they have in their fleet. And they typically, in the vast majority of the cases, they don't open contracts in the middle of the term. 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 a few months before they open an RFP. So the RFPs are coming on a steady pace. I would say even when there are challenges, it's rarely that an airline will decide to break a contract. 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 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 APOs, 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 here, 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 to give or take in the same pace.

Okay, got it. And then just, you know, supply chain constraints impacting margin, you guys are still at records. Can you just help us frame, you know, what margins are going to look like once the constraints are resolved? You know, what are we playing for with TAT on the margin side once we get past these constraints?

I would say, you know, for years I was talking about the 25 and 15, the 25 cross 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 few points, you know, without committing to anything. We believe that we can be what I consider to be, you know, 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 a timeline, but we definitely aspire to be there, and I think that we have a roadmap 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 per lending yield. If your contractual vendor is struggling and you have to buy... 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 affects profitability is the lack of 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 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 the engine itself. So you save a lot of money by buying an as-removed engine from an old aircraft. and overhauling the parts. The challenge over the last two 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, you know, old aircraft retirement, which will increase the availability of engines in the market, and then we will be able to use more gas-removed parts after overall, which definitely helps to further improve the margin.

Great. Appreciate the time.

Thanks, Josh. The next question is from Sergey Glynianov from Freedom Capital Markets. Sergey, go ahead, please.

Good day, gentlemen. So I hope that you are all staying safe in this time of uncertainty. And my question is about this increasing of demands on your defense products and services. Are you able to catch some orders for new platforms for example?

Sergei, I'm not sure that I understood. Are you asking about the impact of the global situation on our defense orders?

Partially yes, but I'm interested in your ability to cash some new orders for your defense programs to supply defense products and services.

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, you know, where we are the component supplier to the system. So we see a very nice increase. We need to remember, though, that it's still a small portion of the overall portfolio of TAT. Most of our business is commercial, I'm sorry.

Yeah, got it. And any thoughts about M&A? What areas are you interested in currently?

On the M&A activity, as we mentioned in the last quarter, 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.

Okay. Thank you for taking my question.

This time, let's move to a question that was submitted to us directly. And it's from Michael Ciaramoli 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 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?

and yes so i think first of all the answer is yes we are expecting to see growth uh from the from the 131 um i think it was discussed those of you who visited our facility in greensboro for the investor day we spoke about it back then um you know when we look across the businesses on the 200 engine and we are doing extremely well we are gaining more and more market share We are in a great position to continue and grow the market share this year. 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 we have less competitors, if you will, comparing to the 131. And I think that we are in a very strong position in terms of our performance and whatever. 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 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 a nice list of opportunities and leads that we are going to build on. So, you know, 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 mid-sized airlines and smaller airlines and chasing these opportunities. So I think in just a matter of time we are expecting to see deals coming.

Egal, 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? Did they indicate anything for you? the coming quarters, and what's your basis for optimism regarding 2026?

So, I don't know who of you, any of you that participated in third quarter, 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 softened 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 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 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 MROB segment of TAT were less related to intake on a specific quarter, and we were less exposed to the quarterly fluctuation, because we had all this 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 a walk 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 almost zero 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 their entire spare pool of heat exchangers is in operational condition because this is where they see more events. And so they over-flood 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 TAT, nothing surprised. Going into fourth quarter this year, we just, knowing it, we placed way more focus on trading. And, you know, making sure that we will have assets available for exchanges on the trading side and to compensate for the expected softness on the MRO. And it worked very well for us. I'm happy to see that, you know, 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 line. I think on the APU side, we never saw the amount of engines when... When we visited Greensboro, 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.

Okay. Thank you for that, Igor. I'm going to now turn the call back over to you for concluding remarks.

So, again, you know, 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, you know, if you think about the last two years' messages that I've been conveying, we started with just recovery from COVID. Then it was about 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 happened. So if you think about, if we go back a year and a half, and the plans that we shared and focused, 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 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.

Thank you, everyone, for joining us today. You may now disconnect your lines.