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27 Jan 25.  SPX Technologies, Inc. (NYSE:SPXC) has completed the acquisition of Kranze Technology Solutions, Inc. (“KTS”), a leader in digital interoperability and tactical networking solutions. KTS is now a part of SPX Technologies’ Communication Technologies (“CommTech”) platform, within its Detection & Measurement segment. KTS is anticipated to be modestly accretive to adjusted earnings per share from continuing operations in 2025. Management plans to provide 2025 guidance including the impact of KTS on February 25, 2025, when SPX Technologies reports Q4 2024 results.

“We are excited to welcome the KTS team to the SPX Technologies family,” said Gene Lowe, President and CEO of SPX Technologies. “This transaction significantly scales our position in Communication Technologies and expands our value creation opportunities in highly complementary growth markets across our global customer base. KTS’s advanced digital interoperability technology and strong position in U.S. defense platforms are an excellent fit with SPX’s existing tactical datalinks, communications intelligence, and radio frequency (RF) countermeasure offerings.”

Richard Kranze, co-founder of KTS commented, “We are delighted for KTS to be joining SPX Technologies’ CommTech team. Bringing together SPX’s expertise and resources with KTS’s strong technology and customer relationships creates numerous growth opportunities for employees, customers, and shareholders. I look forward to helping the SPX Technologies team to build an even stronger, more valuable platform.”

About KTS: Founded in 2008, KTS is a leading provider of digital interoperability and tactical networking solutions that drive superior situational awareness, interoperability, and increased survivability across multiple platforms and domains.

About SPX Technologies, Inc: SPX Technologies is a supplier of highly engineered products and technologies, holding leadership positions in the HVAC and detection and measurement markets. Based in Charlotte, North Carolina, SPX Technologies has more than 4,100 employees in 15 countries. SPX Technologies is listed on the New York Stock Exchange under the ticker symbol “SPXC.” For more information, please visit www.spx.com.

 

30 Jan 25. Oshkosh Corporation (NYSE: OSK), a leading innovator of purpose-built vehicles and equipment, today reported 2024 fourth quarter net income of $153.1m, or $2.33 per diluted share, compared to net income of $150.8m, or $2.28 per diluted share, for the fourth quarter of 2023. Adjusted1 net income was $169.3m, or $2.58 per diluted share, for the fourth quarter of 2024 compared to $169.4m, or $2.56 per diluted share, for the fourth quarter of 2023. Comparisons in this news release are to the fourth quarter of 2023, unless otherwise noted.

“We delivered another strong quarter as our team grew fourth quarter adjusted earnings per share to $2.58, leading to full year 2024 adjusted earnings per share of $11.74, an increase of 17.6 percent over the prior year”

Consolidated sales in the fourth quarter of 2024 increased $156.6m, or 6.3 percent, to $2.62bn primarily due to higher volumes as well as improved pricing in the Vocational segment.

Consolidated operating income in the fourth quarter of 2024 increased 3.9 percent to $223.9 m, or 8.5 percent of sales, compared to $215.4m, or 8.7 percent of sales, in the fourth quarter of 2023. The increase in operating income was primarily due to higher sales volume and favorable price/cost dynamics, offset partially by the impact of changes in cumulative catch-up adjustments on contracts in the Defense segment. Adjusted1 operating income in the fourth quarter of 2024 increased 2.3 percent to $245.4m, or 9.4 percent of sales, compared to $239.9m, or 9.7 percent of sales, in the fourth quarter of 2023.

“We delivered another strong quarter as our team grew fourth quarter adjusted earnings per share to $2.58, leading to full year 2024 adjusted earnings per share of $11.74, an increase of 17.6 percent over the prior year,” said John Pfeifer, president and chief executive officer of Oshkosh Corporation. “Our impressive fourth quarter performance was driven in particular by revenue growth of nearly 20 percent in our Vocational segment. For the full year, we grew revenue in all three of our segments and delivered solid double-digit operating income and adjusted operating income margins in our Access and Vocational segments.

“In 2024, we began producing and delivering our revolutionary purpose-built Next Generation Delivery Vehicle (NGDV) for the US Postal Service (USPS). We are pleased with early feedback we have received from the nation’s postal carriers as they use NGDVs for daily deliveries. We look forward to ramping up this important program to full rate production this year. Our NGDV program as well as excellent visibility with strong backlogs in our Vocational segment give us confidence that Oshkosh can continue to deliver strong results.

“Our Access team delivered solid results in the fourth quarter despite moderating demand. We are confident that long-term drivers, including infrastructure buildout, mega projects and data center construction, remain strong for our Access business. We expect short-term market softness in the first half of 2025 followed by improved demand in the second half of the year, which we have factored into our expectations for the Access segment in 2025.

“We expect growth for our Vocational and Defense segments in 2025 and we are confident in our team’s ability to navigate through softer market conditions in our Access segment to position Oshkosh Corporation to continue delivering strong results. We are initiating our adjusted earnings per share expectations for 2025 of approximately $11.00. We are also announcing a quarterly cash dividend of $0.51 per share, representing a 10.9 percent increase. This marks the 11th consecutive year in which we have increased our dividend by a double digit percentage,” said Pfeifer.

Factors affecting fourth quarter results for the Company’s business segments included:

Access – Access segment sales for the fourth quarter of 2024 of $1.16 bn were relatively flat with the fourth quarter of 2023 as sales related to the acquisition of AUSA of $32.5m were offset by lower international sales volume.

Access segment operating income in the fourth quarter of 2024 decreased 11.9 percent to $142.9m, or 12.4 percent of sales, compared to $162.2 m, or 14.1 percent of sales, in the fourth quarter of 2023. The decrease was primarily due to unfavorable price/cost dynamics offset in part by favorable product mix.

Adjusted1 operating income in the fourth quarter of 2024 was $151.6m, or 13.1 percent of sales, compared to $165.6m, or 14.4 percent of sales, in the fourth quarter of 2023.

Vocational – Vocational segment sales for the fourth quarter of 2024 increased $145.3 m, or 19.8 percent, to $880.6m due to improved sales volume and improved pricing.

Vocational segment operating income in the fourth quarter of 2024 increased 149.8 percent to $110.9m, or 12.6 percent of sales, compared to $44.4 m, or 6.0 percent of sales, in the fourth quarter of 2023. The increase was primarily due to improved price/cost dynamics and higher sales volume.

Adjusted1 operating income in the fourth quarter of 2024 was $122.9m, or 14.0 percent of sales, compared to $64.2 m, or 8.7 percent of sales, in the fourth quarter of 2023.

Defense – Defense segment sales for the fourth quarter of 2024 of $559.1m were relatively flat with the fourth quarter of 2023 as NGDV production for the USPS was offset by the impact of changes in cumulative catch-up adjustments on contracts. Defense experienced unfavorable cumulative catch-up adjustments in the fourth quarter of 2024 primarily reflecting higher costs to complete units prior to delivery, whereas it experienced favorable cumulative catch-up adjustments on contract awards in the fourth quarter of 2023.

Defense segment operating income and adjusted1 operating income in the fourth quarter of 2024 decreased 75.8 percent to $15.0 m, or 2.7 percent of sales, compared to $62.1m, or 11.1 percent of sales, in the fourth quarter of 2023. The decrease was primarily the result of the impact of changes in cumulative catch-up adjustments and unfavorable product mix, partially offset by higher sales volume.

Corporate and other – Net operating costs for corporate and other in the fourth quarter of 2024 decreased $8.4m to $44.9m primarily due to lower new product development spending as well as improved Pratt Miller results.

Interest Expense Net of Interest Income – Interest expense net of interest income in the fourth quarter of 2024 increased $8.3m to $29.1m due to higher borrowings on the Company’s revolving credit facility.

Provision for Income Taxes – The Company recorded income tax expense in the fourth quarter of 2024 of $45.2m, or 22.7 percent of pre-tax income, compared to $44.2m, or 22.6 percent of pre-tax income, in the fourth quarter of 2023.

Repurchases of common stock – The Company repurchased 494,069 shares of common stock in the fourth quarter of 2024 for $50.4m.

Full-Year Results

The Company reported net sales for 2024 of $10.76bn and net income of $681.4 m, or $10.35 per diluted share. This compares with net sales of $9.66 bn and net income of $598.0m, or $9.08 per diluted share, in the prior year. The increase in net income for 2024 was primarily due to improved price/cost dynamics, higher organic sales volume and favorable mix, partially offset by higher net interest expense, intangible asset impairments, the impact of changes in cumulative catch-up adjustments on contracts in the Defense segment, higher engineering costs and higher production costs.

Adjusted1 net income for 2024 was $772.7m, or $11.74 per diluted share, compared to $657.2m, or $9.98 per diluted share, in 2023.

2025 Expectations

The Company announced its 2025 diluted earnings per share estimate of approximately $10.30 and its adjusted1 earnings per share estimate of approximately $11.00 on projected net sales of approximately $10.6 bn.

(Source: BUSINESS WIRE)

 

31 Jan 25. Cohort plc (AIM: CHRT), the independent technology group, announced that, following the announcements on 21 November 2024 and 20 January 2025, the acquisition of the entire issued share capital of EM Solutions Pty Ltd (“EM Solutions”) has now completed. EM Solutions is based in Brisbane, Australia. Its principal activity is the design, assembly, test, and support of satellite on-the move terminals for defence and government customers. It also provides high-end broadband radio transceivers and other RF subsystems including low noise receivers and solid-state high-power transmitters for defence and commercial customers. EM Solutions will operate as the seventh stand-alone business within the Group, reporting through the Communications and Intelligence Division

Andy Thomis, Cohort Chief Executive, said: “We are delighted to welcome EM Solutions to the Cohort group. This is a significant step for Cohort, broadening the Group’s strong naval systems service offering, bringing new customers and enhancing the global footprint of the combined business. Together, we look forward to serving EM Solutions’ customers, current and future, in the years to come.”

 

30 Jan 25. L3Harris forecasts upbeat annual sales on strong defense demand. L3Harris Technologies (LHX.N), opens new tab forecast 2025 sales above estimates and posted higher-than-expected fourth-quarter results on Thursday, bolstered by strong demand for weapons due to higher defense spending amid global geopolitical tensions. Demand for arms and military equipment has ballooned as a result of the Russia-Ukraine war and ongoing conflicts in the Middle East, benefiting defense contractors such as L3Harris. The company also raised its cost-saving goal to $1.2 billion by the end of 2025, a year ahead of its previously disclosed timeline. L3Harris said it had achieved $800 million in cost savings in 2024. A slower recovery in supply chain issues has led to higher costs, denting margins and leading companies in the sector to look for other ways to cut expenses. Last year, L3Harris cut 5% of its workforce, or about 2,500 employees, as part of a cost-saving measure. (Source: Reuters)

 

29 Jan 25. Searchlight Cyber (or “Searchlight”), today announced that it has acquired Assetnote, a Brisbane-based Attack Surface Management (ASM) company. The acquisition, the first by Searchlight Cyber, will integrate Assetnote’s industry-leading ASM solution with its dark web intelligence and monitoring capabilities, creating a holistic Continuous Threat Exposure Management (CTEM) platform that enables customers to zero in on the highest-priority threats and take action to prevent cyberattacks.

Founded in 2018 by some of the leading minds in offensive security, Assetnote is a pioneer in the Attack Surface Management sector. Assetnote offers customers continuous vulnerability discovery and management, providing businesses with essential insight and control over their changing threat exposure to efficiently manage their security posture. The company boasts an impressive roster of loyal customers such as Linktree, Afterpay, and Canva, as well as one of the most prolific and respected vulnerability research teams in the industry.

Attack Surface Management shifts the focus of security from an internal to an external lens, making it a natural companion to Searchlight Cyber’s existing CTEM capabilities. Assetnote’s ASM technology uses the attacker’s perspective to identify critical vulnerabilities in customers’ infrastructure early on, while Searchlight Cyber provides visibility and context of attackers targeting organisations, allowing cybersecurity teams to focus on the most pressing threats and take mitigating actions before disaster strikes.

This inaugural acquisition marks a key milestone in Searchlight’s growth journey. Following the strategic growth investment announced in January 2024 from Charlesbank Capital Partners, the company has continued to add to its headcount and global network of partners, with the Assetnote integration considerably expanding Searchlight’s customer base and reach globally.

The entire Assetnote team will be joining Searchlight, including founders CEO Michael Gianarakis and CTO Shubham Shah, who will be spearheading the ASM side of the business and the engineering and research teams in Australia.

Ben Jones, Co-Founder and CEO of Searchlight Cyber, said: “ASM was always going to be the next area of expansion for Searchlight, and when we met the Assetnote team we very quickly recognized the opportunity to incorporate one of the best solutions on the market into our company. The expertise within the Assetnote team, its industry-leading research, and its impressive customer base bring huge value to Searchlight and our customers. We are delighted to welcome the Assetnote team into the business and celebrate this critical step in our continued growth.”

Michael Gianarakis, Co-Founder and CEO of Assetnote, commented: “Having built our business from the ground up, the next phase of Assetnote’s journey is all about how we can best expand our options and proposition for our customers. With Searchlight, we found a company that is similar in terms of culture, vision, and opportunities for growth; everything naturally clicked into place. There is real excitement from across the team for the next chapter, and we can’t wait to see the benefits that our shared customers will experience as a result.”

AGC Partners served as exclusive financial advisor to Assetnote. Mintz and Corrs Chambers Westgarth served as legal advisors to Searchlight.

About Searchlight Cyber

Searchlight Cyber provides organizations with relevant and actionable threat intelligence, to help them identify and prevent criminal activity. Originally founded in 2017 with a mission to stop criminals acting with impunity on the dark web, we have been involved in some of the world’s largest dark web investigations and have the most comprehensive dataset based on proprietary techniques and ground-breaking academic research. The company has expanded and evolved, adding external threat management capabilities to create a Continuous Threat Exposure Management platform for organizations. Today we help government and law enforcement, enterprises, and managed security services providers around the world to identify threats and prevent attacks. To find out more visit slcyber.io or follow Searchlight Cyber on LinkedIn and Twitter.

About Assetnote

Founded in 2018, Assetnote was born from the collective expertise of some of the leading minds in offensive security, and has grown to reflect the values and ability of our brain trust. Pioneering the Attack Surface Management category, Assetnote’s Continuous Exposure Management platform closes the gap between the attacker’s and defender’s perspectives with industry leading real-time awareness of your evolving attack surface and the exploitable security exposure identified within. Monitoring ms of assets every hour for our customers, we are proud to be the chosen security platform for a wide array of organizations, from innovative startups to members of the Fortune 500, FTSE 100, and ASX 200. To find out more visit assetnote.io.

About Charlesbank Capital Partners

Based in Boston and New York, Charlesbank Capital Partners is a middle-market private investment firm with approximately $19 bn of assets under management as of 9/30/24. Charlesbank focuses on management-led buyouts, growth capital financings, opportunistic credit, and technology investments. The firm seeks to invest in companies with sustainable competitive advantage and excellent prospects for growth. For more information, please visit www.charlesbank.com. (Source: BUSINESS WIRE)

 

30 Jan 25. The KNDS Group announces that it has entered into exclusive negotiations for the acquisition of Texelis’ defense business. On January 29, 2025, KNDS and Texelis signed a Memorandum of Understanding (MOU) concerning the proposed acquisition by KNDS France of Texelis’ Defense business. Under this agreement, the two parties announce that they are entering into exclusive negotiations with a view to carrying out this transaction, which will require the separation of Texelis into two companies – Texelis Défense and Texelis Transport. Information and consultation of employee representative bodies on this project is scheduled to take place in the next few days. The final completion of this transaction, expected by the end of 2025, remains subject to the finalization of agreements and to the usual conditions precedent for this type of transaction. Texelis is a French company whose Defense business specializes in land mobility and design of cutting-edge solutions for armored land vehicles. Texelis is a major player in the French defense industry, producing numerous parts and mobility components for the French Army armored vehicles. Since winning the SERVAL contract with KNDS France, Texelis has been able to develop, qualify and produce complete mobility solutions for 4×4, 6×6 and 8×8 vehicles. An innovative company, Texelis is at the forefront of hybridization for armored vehicles, as well as energy management applied to mobility. Texelis’ Transport business would remain under the control of its management team, with the support of its investors. Texelis employs 350 people and generated sales of around 110m euros in 2023. In addition to its production site in Limoges, Texelis already has a branch at the KNDS France site in Roanne. This structuring project will enable us to strengthen our growth and increase our skills in the mobility field, with a high-performance French company that we know well and that is already our partner in the temporary business venture Serval,” said Nicolas Chamussy, CEO of KNDS France.

Charles-Antoine de Barbuat, Chairman of Texelis, commented: “The future integration of Texelis’ Defense business into the KNDS group would open up numerous growth prospects, beyond the initial success of the collaboration. In addition, the Transport business has all the assets needed to pursue its development independently”.

 

30 Jan 25. Ricardo shares plunge on profit warning. Shares at Ricardo (RDCO) fell more than 20 per cent this morning after the engineering and environmental consultancy warned full-year results would fall short of market expectations. The shortfall was attributed to order delays in the energy and environment division, where first-half revenue and profits were hit by a phasing of orders due to global elections and a delay in UK water asset management plan cycle spend. The rail division was also impacted by the postponement of the California High Speed project due to the Los Angeles wildfires. The firm reported a 10 per cent increase in order intake for its continuing operations, with a 2 per cent year-on-year rise in the order book. Net debt shrunk from £59.6m at the end of June to £18.5m on 31 December after the £64.3m sale of the defence division. (Source: Investors Chronicle)

 

30 Jan 25. Serco, the international provider of critical government services, has today agreed to acquire Northrop Grumman’s mission training and satellite ground network communications software business (MT&S). Adding to Serco’s existing defence capabilities, the MT&S business provides the US military with advanced mission training services, and software that makes satellite ground networks more efficient.

With expertise in training services and software engineering, and a track record of innovation, it supports programmes across the US Army, Space Force, Air Force, Navy, Combatant Commands and international partners. It has annual revenues of approximately $300m (£242m).

MT&S will add scale to Serco in North America, growing our business there to beyond $2bn of revenue and $200m of profit, and brings new capabilities and access to a broader base of customers.

Mark Irwin, Serco Group Chief Executive said:  “We have approximately doubled revenue and more than trebled profit in Serco’s North America business in recent years through a successful combination of organic growth and strategic acquisitions.  MT&S provides an excellent opportunity to continue that success.

“The acquisition increases our scale, capabilities and growth potential in US defence, the largest defence market in the world, as well as providing solutions we can offer to our customers worldwide.  The acquired capability delivers comprehensive, critical, technology-enabled services fully aligned to the US military’s focus on enhancing warfighting standards and readiness through solutions that are both efficient and effective. We look forward to welcoming nearly 1,000 new colleagues from MT&S to Serco and are excited to add their knowledge and experience to our work supporting the US Department of Defense’s enduring mission to provide the combat-credible military forces needed to protect the security of the nation.”

MT&S will provide further opportunities for Serco to grow organically in both North America and internationally through:

• Increased exposure to defence and US markets: Following the acquisition defence will be our largest sector, representing approximately 40% of Group revenue and North America overall will represent approximately 50% of Group underlying operating profit.
• Enhanced capabilities in large and attractive parts of the US defence market:  MT&S helps to ensure armed forces’ mission-readiness.  It will advance our expertise in synthetic training, exercise simulation, and satellite ground network software services.  Training represents a significant proportion of defence investment and the acquisition materially strengthens our position in this market, providing a strong platform for future growth.
• Increased scale and technology capabilities will benefit Serco’s pipeline of potential new work: MT&S has a strong track record delivering large programmes in training, space and technology services for the US Department of Defense.  The ability to reference this past performance will enhance our ability to win new work in our existing pipeline.  We also expect to be able to expand the pipeline as we explore new opportunities with our combined capabilities.
• Ability to export MT&S’s capabilities outside of the US:  Military training and satellite capability are critical services for armed forces around the world.  MT&S offers best in class solutions in these areas, which have so far been primarily limited to the US.  We see significant applicability to our other existing markets, including the UK, Australia and Europe.

The acquisition, subject to regulatory approvals, is expected to close in mid-2025, at a purchase price of $327m (£264m).

 

29 Jan 25. General Dynamics results beat estimates on defense, bizjet deliveries miss. General Dynamics beat expectations for fourth-quarter results on Wednesday, as strength in the company’s defense businesses offset persistent supply issues holding back jet deliveries.

The Russia-Ukraine war and the escalation of conflicts in the Middle East fueled demand for weapons and military vehicles during the quarter. The company’s three defense segments – combat systems, marine and technologies – posted revenue growth of 1.3%, 16.2% and 2.8%, respectively.

Revenue in the aerospace unit, which makes Gulfstream business jets, jumped 36.4%, even though supply of jet engines has been held up by longer certification times, keeping General Dynamics from completing deliveries on schedule.

The company delivered 136 aircraft during the year, lower than its revised October estimate of 150 aircraft. Its book-to-bill ratio of 0.9-to-1 for the quarter suggests billing was slightly higher than new orders received. (Source: Reuters)

 

29 Jan 25. General Dynamics (NYSE: GD) today reported quarterly net earnings of $1.1bn, up 14.2% from the year-ago quarter, on revenue of $13.3 bn, up 14.3% over the year-ago quarter. Diluted earnings per share (EPS) was $4.15, up 14% from the year-ago quarter.

For the full year, net earnings were $3.8bn, up 14.1% from 2023, on revenue of $47.7bn, up 12.9% from 2023. Diluted EPS for the full year was $13.63, up 13.4% from 2023.

• Fourth-quarter net earnings of $1.1bn, diluted EPS of $4.15, on $13.3bn in revenue
• Full-year net earnings of $3.8bn, diluted EPS of $13.63, on $47.7bn in revenue
• $2.2bn net cash provided by operating activities in the quarter, 188% of net earnings
• Ended the year with $90.6bn in backlog

“We had a solid fourth quarter, capping off a year that saw steady growth in revenue and earnings across all four segments,” said Phebe N. Novakovic, chairman and chief executive officer. “Order activity continued to be very strong, with 1-to-1 book-to-bill for the year, even as revenue grew by 13%, positioning us well for continued growth.”

Gulfstream delivered 47 aircraft in the quarter, of which 42 were large-cabin aircraft. The company delivered a total of 136 aircraft during the year, of which 118 were large-cabin aircraft.

Cash

Net cash provided by operating activities in the quarter totaled $2.2 bn, or 188% of net earnings. For the year, net cash provided by operating activities totaled $4.1bn, or 109% of net earnings.

During the year, the company invested $916 m in capital expenditures, made tax payments of $560m, repaid fixed rate notes of $500 m, and returned $3 bn to shareholders through dividends and share repurchases, ending 2024 with $1.7bn in cash and equivalents on hand.

Backlog

Orders remained strong across the company with a consolidated book-to-bill ratio, defined as orders divided by revenue, of 0.9- to-1 for the quarter and 1-to-1 for the year. The company ended the year with backlog of $90.6 bn and estimated potential contract value, representing management’s estimate of additional value in unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options, of $53.4bn. Total estimated contract value, the sum of all backlog components, was $144bn at year end, up 9.1% from a year earlier.

In the Aerospace segment, orders in the quarter totaled $3.8 bn. Backlog at the end of the year was $19.7bn. Aerospace book-to-bill was 1-to-1 for the quarter and the year.

In the three defense segments, significant awards in the quarter include a U.S. Air Force contract with maximum potential value of $5.6 bn to modernize, integrate and operate the Department of Defense’s Mission Partner Environments (MPEs); a U.S. Space Force contract with maximum potential value of $2.2bn to provide sustainment services for the Mobile User Objective System (MUOS) satellite communications system; $1.9bn from the U.S. Navy for multiple contracts to provide services, materials and parts for Virginia-class submarines; $370 m from the U.S. Army for the production of 155mm artillery projectile metal parts; contracts for various munitions and ordnance with maximum potential value of $820 m; and several key contracts for classified customers with maximum potential value of $1.4bn.

 

30 Jan 25. Northrop posts quarterly profit vs year-ago loss on surge in military equipment demand. U.S. defense company Northrop Grumman (NOC.N), posted a quarterly profit on Thursday, from a year-ago loss, as headwinds from its B-21 Raider stealth bomber program eased and rising geopolitical tensions stoked demand for its military equipment. The ongoing conflicts in the Middle East and the Russia-Ukraine war have increased demand for arms across the world and has benefited U.S. defense contractors. However, a rise in costs owing to a slower recovery in pandemic-related supply chain snags have dented margins for companies in the sector. Northrop expects sales in 2025 to be between $42bn and $42.5bn, slightly short of analysts’ average estimate of $42.8bn according to data compiled by LSEG. It expects an adjusted per-share profit of between $27.85 and $28.25 for the year, the midpoint of which is in line with expectations. (Source: Google/Reuters)

 

30 Jan 25. Northrop Grumman Corporation (NYSE: NOC) reported fourth quarter 2024 sales of $10.7bn were comparable with the fourth quarter of 2023. Sales increased 4 percent to $41.0bn in 2024, as compared with $39.3 bn in 2023. 2024 sales reflect continued strong demand for our products and services. Fourth quarter 2024 net earnings totaled $1.3bn, or $8.66 per diluted share, and 2024 net earnings were $4.2bn, or $28.34 per diluted share.

Results

• Strong 2024 financial results that met or exceeded company-level financial guidance:

◦ Book to bill ratio of 1.23; backlog rises to new record of $91.5bn

◦ Sales increase 4.4 percent to $41.0bn

◦ Operating margin rate of 10.6 percent; segment operating margin rate1 of 11.1 percent

◦ Diluted EPS of $28.34; Mark-to-Market (MTM)-adjusted EPS1 of $26.08

◦ Operating cash flow of $4.4bn; free cash flow1 of $2.6bn

◦ Returned $3.7bn of cash to shareholders through share repurchases and dividends

• 2025 financial guidance in line with prior outlook, including continued organic sales1 growth, margin expansion, and double digit free cash flow1 growth

◦ Includes divestiture of Training Services business, expected to close mid-year

Excluding the after-tax MTM benefit of $332m, fourth quarter 2024 MTM-adjusted net earnings1 totaled $932m, or $6.39 per diluted share, and 2024 MTM-adjusted net earnings1 totaled $3.8bn, or $26.08 per diluted share. “Our team had another outstanding year equipping the U.S. and our allies with the advanced technologies they need to lead globally and maintain peace through strength,” said Kathy Warden, chair, chief executive officer and president. “Our financial results and new record backlog reflect the relevance of our products and the importance of our work. Over the last five years our sales have grown 30% organically and our free cash flow expanded 25% in 2024. Our guidance anticipates continued top line growth, margin expansion, and double digit cash flow growth. Northrop Grumman remains committed to leading the way in technology innovation for national security.”

MTM-adjusted Net Earnings and EPS1 Net earnings for the fourth quarter and full year 2024 were increased by a $332 m aftertax MTM benefit. The MTM benefit relates to pension and other post-retirement benefits (OPB) actuarial gains and losses, which the company recognizes immediately through earnings upon annual remeasurement of the assets and projected benefit obligations of our pension and OPB plans. MTM-adjusted earnings1 and EPS1 are the measures the company uses to compare performance to prior periods and for EPS guidance.

Sales

Fourth quarter 2024 sales were comparable to the prior year period and reflect higher sales at Aeronautics Systems, Defense Systems and Mission Systems, offset by lower sales at Space Systems largely driven by a reduction of $231m associated with wind-down of work on the restricted space and NGI programs, as previously disclosed. 2024 sales increased $1.7bn, or 4 percent, due to a 12 percent growth in sales at Aeronautics Systems and higher sales at Mission Systems and Defense Systems, partially offset by lower sales at Space Systems largely driven by a reduction of $595m associated with wind-down of work on the restricted space and NGI programs, as previously disclosed. Operating Income and Margin Rate Fourth quarter 2024 operating income increased $1.5bn primarily due to higher operating income at Aeronautics Systems largely driven by the prior year $1.56bn charge on the B-21 program, as well as higher operating income at Defense Systems. These increases were partially offset by $122m of higher unallocated corporate expense, largely due to a $127m increase in deferred state tax expense related to the MTM benefit (expense) and prior year B-21 charge. Fourth quarter 2024 operating margin rate increased to 10.2 percent from (3.7) percent reflecting the items above. 2024 operating income increased $1.8bn, or 72 percent, primarily due to higher operating income at Aeronautics Systems, largely driven by the prior year $1.56bn charge on the B-21 program, as well as higher operating income at Space Systems and Defense Systems. 2024 operating income also increased due to a $122m increase in the FAS/CAS operating adjustment, partially offset by $73m of higher unallocated corporate expense, largely due to a $127m increase in deferred state taxes related to the MTM benefit (expense) and prior year B-21 charge and $25m of lower intangible amortization and PP&E step-up depreciation. 2024 operating margin rate increased to 10.6 percent from 6.5 percent reflecting the items above. Segment Operating Income and Margin Rate1 Fourth quarter 2024 segment operating income1 increased $1.6bn primarily due to the prior year B-21 charge at Aeronautics Systems, as well as higher operating income at Defense Systems. Segment operating margin rate1 increased to 11.2 percent reflecting higher operating margin rates at Aeronautics Systems, Space Systems and Defense Systems. 2024 operating margin rate increased to 10.6 percent from 6.5 percent reflecting the items above.

Segment Operating Results Effective July 1, 2024, the company realigned the Strategic Deterrent Systems (SDS) division, which includes the Sentinel program, from Space Systems to Defense Systems. This realignment is reflected in the financial information contained in this report.

Effective January 1, 2025, the company realigned the Strike and Surveillance Aircraft Solutions (SSAS) business unit from Defense Systems to Aeronautics Systems. This realignment is not reflected in the financial information contained in this release (except as it pertains to the company’s 2025 guidance). The realignment will be reflected in the company’s operating results beginning in the first quarter of 2025. Recast financial information reflecting these two realignments for current and certain prior periods is presented in Schedule 6 of this release. AERONAUTICS SYSTEMS

Three Months Ended December 31

Sales

Fourth quarter 2024 sales increased $310m, or 11 percent, primarily due to the continuing transition to production on B-21 driving higher restricted volume and a $134m increase on F-35 production programs largely driven by the timing of materials. 2024 sales increased $1.2bn, or 12 percent, primarily due to the continuing transition to production on B-21 driving higher restricted volume, a $448m increase in F-35 production and sustainment volume due, in part, to the timing of materials, a $134m increase in Triton LRIP production volume, a $134 m increase in E-2 fleet sustainment and modernization work, and higher volume on Global Hawk sustainment activities. Operating Income Fourth quarter 2024 operating income increased $1.6bn due to the prior year $1.56 bn charge on the B-21 program. Operating margin rate increased to 9.1 percent principally due to the prior year B-21 charge, partially offset by sales growth on low margin restricted programs. 2024 operating income increased $1.7bn primarily due to the prior year $1.56bn charge on the B-21 program as well as higher sales. Operating margin rate increased to 9.8 percent principally due to the prior year B-21 charge.

DEFENSE SYSTEMS

Three Months Ended December 31

Sales

Fourth quarter 2024 sales increased $271m, or 3 percent, primarily due to a $182m increase on Sentinel as that program continues to ramp, a $163m increase on certain military ammunition programs, a $124m increase on Stand-in Attack Weapon (SiAW) as the program ramps and higher volume from timing of materials and increased order quantities on the Guided Multiple Launch Rocket System (GMLRS) program. These increases were partially offset by a $262m decrease due to the completion of an international training program and lower volume on the Special Electronic Mission Aircraft (SEMA) program as it nears completion. Operating Income Fourth quarter 2024 operating income increased $28m, or 13 percent, due to a higher operating margin rate and higher sales. Operating margin rate increased to 10.8 percent from 10.0 percent principally due to higher net EAC adjustments. 2024 operating income increased $37m, or 4 percent, primarily due to higher sales. Operating margin rate was comparable to the prior period. MISSION SYSTEMS

Three Months Ended December 31

Sales

Fourth quarter 2024 sales increased $81m, or 3 percent, primarily due to higher volume on restricted advanced microelectronics and technology programs, as well as higher volume on communications, electronic warfare self-protection and targeting systems programs. These increases were partially offset by lower sales on restricted airborne radar programs. 2024 sales increased $504m, or 5 percent, primarily due to higher volume on restricted advanced microelectronics and technology programs, increased marine systems sales due, in part, to the timing of materials, and higher Ground/Air Task Oriented Radar (G/ATOR) volume due to continued ramp-up on full-rate production (FRP) awards. These increases were partially offset by lower sales on restricted airborne radar programs and the Scalable Agile Beam Radar (SABR) program. Operating Income Fourth quarter 2024 operating income increased $7m, or 2 percent, primarily due to higher sales. Operating margin rate decreased to 14.9 percent from 15.1 percent principally driven by lower margin rates on certain airborne radar programs and changes in contract mix toward more cost-type content, which more than offset higher net EAC adjustments. 2024 operating income decreased $11m, or 1 percent, due to a lower operating margin rate, partially offset by higher sales. Operating margin rate decreased to 14.0 percent from 14.8 percent primarily due to lower net EAC adjustments on certain airborne radar production programs due, in part, to production inefficiencies that have driven higher labor costs, as well as changes in contract mix toward more cost-type content. These decreases were partially offset by sales growth on higher margin advanced microelectronics programs.

SPACE SYSTEMS

Sales

Fourth quarter 2024 sales decreased $388m, or 13 percent, primarily due to wind-down of work on the restricted space and NGI programs, which reduced sales by $231m, as well as lower volume on a restricted program and Next-Gen OPIR and the Glide Phase Interceptor program, largely due to timing. 2024 sales decreased $142m, or 1 percent, primarily due to wind-down of work on the restricted space and NGI programs, which reduced sales by $595 m. This reduction was partially offset by a $302m increase on Space Development Agency (SDA) satellite programs and a $130m increase on the Habitation and Logistics Outpost (HALO) program. Operating Income Fourth quarter 2024 operating income decreased $15m, or 5 percent, due to a higher operating margin rate, partially offset by lower sales. Operating margin rate increased to 10.1 percent from 9.4 percent principally due to an improvement in net EAC adjustments largely driven by the prior year including a $42m unfavorable EAC adjustment on the HALO program. 2024 operating income increased $124m, or 11 percent, primarily due to a higher operating margin rate. Operating margin rate increased to 10.7 percent from 9.5 percent primarily due to higher net EAC adjustments largely driven by the HALO program as previously disclosed.

 

29 Jan 25. RTX finishes 2024 strong, eyes continued growth in 2025. RTX saw strong performance in 2024 and anticipates further growth in 2025, Christopher Calio, president and CEO of RTX, said in an earnings call on 28 January. The company recorded USD80.8bn in adjusted sales, 11% organic growth over 2023, driven by 14% growth in commercial original equipment, 13% in commercial aftermarket, and 9% in defence, he added.

Demand remains robust, with the company recording USD112 bn in new awards in 2024 and ending the year with a backlog of more than USD218 bn, up 11% year on year, Calio said. Commercial backlog reached USD125 bn, while defence totalled a “record USD93bn”, he added.

In the fourth quarter of 2024, RTX achieved adjusted sales of USD21.6 bn or 9% adjusted growth. Growth was led by commercial aftermarket, up 15%, and defence, which was up 10% organically, Neil Mitchill Jr, chief financial officer for RTX, said during the call. Commercial original equipment saw 10% growth.

Free cash flow totalled USD492m, bringing the total for the year to USD4.5bn. The figure was affected by USD2.6bn in costs related to legal matters, powder metal issues with Pratt & Whitney engines, and a previously disclosed contract issue, Mitchill added.

Segment results

In the fourth quarter, Collins Aerospace recorded USD7.5 bn in adjusted sales for 8% growth, including 13% growth in defence, attributed to higher volume over several programmes, Nathan Ware, vice-president of investor relations at RTX, said during the call. Over 2024 Collins Aerospace generated USD28.3bn of adjusted sales. (Source: Janes)

 

28 Jan 25. RTX (NYSE: RTX) reports fourth quarter 2024 results and announces 2025 outlook.

Fourth quarter 2024

• Sales of $21.6bn, up 9 percent versus prior year, and up 11 percent organically* excluding divestitures
• GAAP EPS was $1.10 and included $0.30 of acquisition accounting adjustments and $0.14 of restructuring and other net significant and/or non-recurring charges
• Adjusted EPS* of $1.54, up 19 percent versus prior year
• Operating cash flow of $1.6bn; free cash flow* of $0.5bn
• Company backlog of $218bn; including $125bn of commercial and $93 bn of defense
• Returned $852m of capital to shareowners

Full year 2024

• Reported sales of $80.7bn
• Adjusted sales* of $80.8bn, up 9 percent versus prior year, and up 11 percent organically* excluding divestitures
• GAAP EPS was $3.55 and included $1.20 of acquisition accounting adjustments and $0.98 of restructuring and other net significant and/or non-recurring charges
• Adjusted EPS* of $5.73, up 13 percent versus prior year
• Operating cash flow of $7.2bn; free cash flow* of $4.5 bn
• Returned $3.7bn of capital to shareowners, returning over $33 bn since the merger

Outlook for full year 2025

• Adjusted sales* of $83.0 – $84.0bn, including 4 to 6 percent organic growth*
• Adjusted EPS* of $6.00 – $6.15
• Free cash flow* of $7.0 – $7.5bn

“RTX delivered a very strong year of performance in 2024 with 11 percent organic sales growth* and 13 percent adjusted EPS growth*, including segment margin expansion* in all three businesses,” said RTX President and CEO Chris Calio.

“We have strong momentum heading into 2025 with a $218bn backlog and unprecedented demand for our products and solutions. We remain focused on advancing our strategic priorities of executing on our commitments, innovating for growth and harnessing the breadth and scale of RTX, giving us confidence in our 2025 financial outlook.”

Fourth quarter 2024

RTX reported fourth quarter sales of $21.6bn, up 9 percent over the prior year. GAAP EPS of $1.10 included $0.30 of acquisition accounting adjustments, $0.05 of restructuring, and $0.09 of other net significant and/or non-recurring charges. Adjusted EPS* of $1.54 was up 19 percent versus the prior year.

The company reported net income attributable to common shareowners in the fourth quarter of $1.5bn which included $408m of acquisition accounting adjustments, $61m of restructuring, and $120m of other net significant and/or non-recurring charges. Adjusted net income* of $2.1bn was up 18 percent versus the prior year driven by growth in adjusted segment operating profit*, partially offset by higher taxes and lower pension income. Operating cash flow in the fourth quarter was $1.6bn. Capital expenditures were $1.1bn, resulting in free cash flow* of $0.5bn.

Collins Aerospace had fourth quarter 2024 reported sales of $7,537m, up 6 percent versus the prior year. The increase in sales was driven by a 13 percent increase in defense and a 12 percent increase in commercial aftermarket, partially offset by a 6 percent decrease in commercial OE. The increase in defense sales was driven by higher volume across multiple programs and platforms, including new programs awarded in 2024. The increase in commercial aftermarket sales was driven by continued growth in commercial air traffic, and the decrease in commercial OE sales was driven by lower narrow-body volume. Adjusted sales* of $7,537m, were up 8 percent versus the prior year.

Collins Aerospace reported operating profit of $1,106m, down 2 percent versus the prior year. This included a $155m charge related to the impairment of contract fulfillment costs which was partially offset by a $99m gain on the sale of the Hoist & Winch business. Q4 2023 included a benefit of $112m from a customer settlement. On an adjusted basis, operating profit* of $1,207m was up 17 percent versus the prior year. Operationally, the increase was driven by drop through on higher commercial aftermarket and defense volume, which was partially offset by lower commercial OE volume and unfavorable commercial OE mix.

Pratt & Whitney

Pratt & Whitney had fourth quarter 2024 reported and adjusted sales of $7,569m, up 18 percent versus the prior year. The increase was driven by a 31 percent increase in commercial OE, a 17 percent increase in commercial aftermarket, and an 8 percent increase in military. The increase in commercial sales was driven by increased deliveries and favorable OE mix in Large Commercial Engines, and higher commercial aftermarket volume. The increase in military sales was driven by higher volume on F135 production, the F135 Engine Core Upgrade program, and F135 sustainment, which was partially offset by lower sustainment volume across legacy platforms, including the F100 and F117.

Pratt & Whitney reported operating profit of $504m, up 32 percent versus the prior year. The increase was driven by favorable volume and mix in Large Commercial Engines OE, favorable mix in Pratt Canada aftermarket, and drop through on higher commercial aftermarket and military volume. Pratt & Whitney also benefited from an approximately $70m insurance recovery. Reported operating profit included a $157m charge related to a customer bankruptcy. On an adjusted basis, operating profit* of $717m, was up 77 percent versus the prior year.

Raytheon had fourth quarter 2024 reported and adjusted sales of $7,157m, up 4 percent versus the prior year. The increase in sales was driven by higher volume on land and air defense systems, including Global Patriot, NASAMS and counter-UAS programs, as well as higher volume from the restart of contracts with a Middle East customer. This was partially offset by the impact from the divestiture of the Cybersecurity, Intelligence and Services business completed in the first quarter of 2024 and lower volume on air and space defense systems. Excluding the impact of the divestiture, sales were up 10 percent versus the prior year*.

Raytheon reported operating profit of $824m, up 36 percent versus the prior year. The increase was driven by drop through on higher volume, improved net productivity, and favorable mix which was partially offset by the impact from the divestiture of the Cybersecurity, Intelligence and Services business. Reported operating profit included a $102 m benefit related to reserve adjustments associated with the restart of contracts with a Middle East customer. On an adjusted basis, operating profit* of $728m was up 18 percent versus the prior year.

 

30 Jan 25. Avon Protection: Will re-built order book be enough to take this stock higher?

I’m afraid you really have to hunt around for a good healthcare/defence play in the London market at the moment, but Avon Protection LON:AVON might fit the bill. The only problem is its extremely high PE ratio. This does not seem to be deterring investors however, who have driven the stock up by 55% in the last year.

The big question for investors in Avon is whether it can keep this up?

I call Avon a healthcare company, but it has a wider reach than that, providing protective equipment to the military and first responders across Europe and the US. This includes escape hoods and thermal imaging cameras, supplied air, underwater systems and even radiological protection.

Investors were pleased with the company’s last set of results, which saw growth in revenue of 15.9%. There was also a very significant increase in earnings per share at +135.2% versus the same quarter in 2023. EBITDA margins are also up and should provide some support for Avon Protection shares this year. Revenues are now up to where they were in 2022.

Record order book with big US interest

In its last set of full year results management was keen to draw attention to its FY 24 closing order book of £225.2m which it said was a record. Strong order intake is being driven by US Department of Defence helmet orders. The company also reported a lower than expected effective tax rate, driven by one-off items it does not expect to recur in 2025.

Effiectively, Avon’s order book has doubled with demand also picking up for its re-breathers from the US DoD. The order book has been “re-built” in Avon’s words.

Debt is also coming down again, which is a good sign, but it could be lower. Book value per share is 5.61 at the moment. I also note that there is a marked increase of cash on the books which makes it no surprise then to see that the company has said it is increasing dividends.

Avon has also revised its earnings guidance for fiscal year 2024, saying that overall trading has continued to be strong in the second half of FY24. Management say they are seeing good momentum across a number of their strategic and financial KPIs. Revenue growth is now forecast at around 11% for the next financial year.

Prospective investors should also note that the shareholder register is heavily institutionally dominated. A total of eight investors currently control 52% of the share ownership. Hedge funds own about 18% of the stock.

What’s not to like about Avon Protection?

There’s a lot to like about the stock. My key concern would be the relatively expensive share price. This is the one thing making me shy away from the shares unfortunately. The financials as reported in December make the company look very solid and it is not surprise to see so many fund managers holding it.

The shares are well off their ATH but volumes have been dropping as we move through January and we have seen some share price slippage as a result. Shore Capital currently has Avon as a Hold (reiteration 19 November). Jefferies issued a Buy on the stock in May last year, although at that point the shares were well south of its target price.

(Source: https://www.thearmchairtrader.com/)

 

30 Jan 25. Kromek Group plc (“Kromek” or the “Group”) Interim Results.

Multi-year agreements signed with Siemens Healthineers post period will deliver profitability in the current financial year

Kromek Group plc (AIM: KMK), a leading developer of radiation and bio-detection technology solutions for the advanced imaging and CBRN detection segments, announces its interim results for the six months ended 31 October 2024.

Multi-year Agreements with Siemens Healthineers

Post period, as also announced today, Kromek has signed agreements with Siemens Medical Solutions USA, Inc. (“Siemens Healthineers”) to enable the production of cadmium zinc telluride (“CZT”) detectors for single photon emission computed tomography (“SPECT”) application pursuant to which:

• Under the Enablement Agreement, the Group will be paid a total of $37.5m in cash in four installments over a four-year period, with the first installment of $25.0m to be received in the current financial year, of which a material amount will be recognised as revenue
• Over a four-year period, Kromek will:

o transfer 15 of its existing 174 furnaces for CZT production to Siemens Healthineers

o provide Siemens Healthineers with all know-how, IP and related services for CZT-based SPECT detector production

• All know-how and IP will be provided and licensed on a non-exclusive basis. Accordingly, Kromek is unencumbered from continuing to utilise its know-how and IP and supplying other OEMs in SPECT or other advanced imaging markets
• In addition, Kromek is expected to supply Siemens Healthineers with CZT-based detector tiles over the four-year period, which the Directors believe will make a material contribution to advanced imaging revenue from the second year of the agreement onwards

Impact on Kromek of Agreements with Siemens Healthineers

• The Group expects to become profitable from the current financial year, with profit for FY 2025 significantly ahead of market expectations
• Debt will be reduced and the balance sheet will be significantly strengthened
• Kromek intends to continue producing CZT for the SPECT and computed tomography (“CT”) markets utilising the remaining 159 furnaces it owns
• As the largest independent producer and supplier of CZT, and with a significantly strengthened balance sheet, Kromek is strategically positioned for sustained revenue growth and profitability

Financial Summary for H1 2025

• Revenue was £3.7m (H1 2024: £7.1m)
• Gross margin improved to 56.9% (H1 2024: 54.2%)
• Adjusted EBITDA loss of £2.3m (H1 2024: £0.1m loss)*
• Loss before tax was £5.7m (H1 2024: £3.5m loss)
• Cash and cash equivalents at 31 October 2024 were £0.6m (30 April 2024: £0.5m)

*A reconciliation of adjusted EBITDA can be found in the Financial Review.

Operational Summary for H1 2025

Advanced Imaging

• Sustained delivery under landmark collaboration contracts and other component supply agreements, with customers including recognised Tier 1 OEMs, Analogic and Spectrum Dynamics
• Continued to make progress under the ultra-low dose molecular breast imaging programme funded by Innovate UK

CBRN Detection

• Awarded a contract worth £2.0m from the UK Ministry of Defence for the supply of the Group’s D5 RIID along with its Alpha Beta probe attachment and ancillary products
• Selected under two new UK Government frameworks, each lasting four years, designed to enhance the UK’s systems and capabilities for ensuring public safety and security:

o Kromek’s D3M detector was named as the Personal Radiation Detector under the UK Government Resilience Framework, with a first order already received under this framework

o Selected as a supplier under the UK Government’s Radiological Nuclear Detection Framework

Biological-Threat Detection

• Continued to progress the development of biological-threat detection systems under contracts with a UK Government department and the US Department of Homeland Security

Manufacturing and IP

• Continued to execute on programmes for the expansion of production capacity and process automation, particularly at its US facility, resulting in greater manufacturing productivity and cost efficiency
• Applied for three new patents during the period

Dr Arnab Basu, CEO of Kromek, said: “As we stated at the time of the full year results in October last year, Kromek was actively engaged with OEMs to drive delivery of products and monetisation of the valuable intellectual property the Group has developed in the advanced imaging area. We also said we were confident that these initiatives would benefit the Group and drive a significant increase in both revenue and cash generation in the second half of FY 2025. Today’s announcement is an exciting moment as both Siemens Healthineers and Kromek are aligned in our vision to enhance healthcare through technological advancements.

“The initial $25.0m payment from Siemens Healthineers will be used to support the delivery of various milestones under the agreements, significantly reduce our debt and strengthen our balance sheet, ultimately enhancing our operational capabilities. These significant agreements enable us to deliver profitability in FY 2025, significantly ahead of market expectations and lay the groundwork for further growth in revenues and sustainable profitability beyond that period.

“Looking beyond FY 2025, we expect to deliver growth in revenues for the fifth year in a row in FY 2026 and remain profitable as we continue to deliver on our agreement with Siemens Healthineers and our other OEM customers as well as the CBRN contracts won with governmental agencies in UK and abroad. Consequently, the Board looks to the future with confidence.”

Kromek Signs Agreements with Siemens Healthineers

Non-exclusive IP licensing and CZT production enablement agreements to generate $37.5m

Kromek expected to become profitable for FY 2025

Kromek Group plc (AIM: KMK), a leading developer of radiation and bio-detection technology solutions for the advanced imaging and CBRN detection segments, is pleased to announce that it has entered into multi-year agreements with Siemens Medical Solutions USA, Inc. (“Siemens Healthineers”) to provide know-how and use rights of IP on a non-exclusive basis, as well as furnaces and related services, under an Enablement Agreement and Patent Licensing Agreement, and also for the Group to supply CZT-based detector tiles (the “Supply Agreement”) (together with the Enablement and Patent Licensing Agreements, the “Agreements”) to enable the production of CZT detectors for SPECT application (single-photon emission computed tomography).

Under the Enablement Agreement, the Group will be paid a total of $37.5m in cash in four installments over a four-year period, with the first installment of $25.0m to be received in the current financial year, a material amount of which will be recognised as revenue. In addition, the Directors believe the Supply Agreement will make a material contribution to Advanced Imaging revenue from the second year of the agreement onwards.

Summary

• Over a four-year period, Kromek will:

o transfer 15 of its existing 174 furnaces for CZT production to Siemens Healthineers

o provide Siemens Healthineers with all know-how, IP and related services for CZT-based SPECT detector production

• The Group has licensed to Siemens Healthineers its patents related to CZT production for SPECT applications
• All know-how and IP will be provided and licensed on a non-exclusive basis. Accordingly, Kromek is unencumbered from continuing to utilise its know-how and IP and supplying other OEMs in SPECT or other advanced imaging markets
• Kromek is expected to supply Siemens Healthineers with CZT-based detector tiles over the four-year period under the Supply Agreement
• The Group expects to report revenue growth for the current financial year and profit significantly ahead of market expectations, with a much strengthened balance sheet

Enablement and Patent Licensing Agreements

Kromek will transfer title of 15 of its furnaces (the “Transfer Furnaces”) for the production of CZT, which are currently sited in the Group’s UK facility, to Siemens Healthineers. The Group will enable the physical relocation of the Transfer Furnaces to a Siemens Healthineers facility, which is expected to occur at the end of the four-year period of the Enablement Agreement. Prior to the relocation, the Group will use the Transfer Furnaces to deliver the CZT-based detector tiles under the Supply Agreement.

Over a four-year period, commencing immediately, the Group will provide Siemens Healthineers with its know-how and IP regarding the production of CZT-based detector tiles for SPECT applications and services required to enable such production. Kromek has licensed in perpetuity its patents relevant for producing CZT-based detectors for SPECT applications on a non-exclusive basis. Kromek retains ownership of the patents. Under the terms of the Agreements, the Group is entitled to continue to exercise all its know-how and IP and to serve the global SPECT market for CZT-based detectors.

Supply Agreement

Kromek is set to supply its CZT-based detector tiles to Siemens Healthineers for the duration of the Enablement Agreement, which may be extended for an additional year at Siemens Healthineers’ discretion. This multi-year agreement is projected to significantly contribute to revenue, complementing the $37.5m to be received under the Enablement Agreement for the Advanced Imaging Division, throughout the agreement period.

Under the terms of the Supply Agreement, Kromek will manufacture the CZT-based detector tiles and will be responsible for providing all necessary capital equipment, engineering, manufacturing technology, as well as the equipment and facilities required to fulfil the agreement.

Benefit to Kromek

Kromek plans to utilise the initial $25.0m installment to support delivery under the Enablement Agreement, reduce its debt and significantly strengthen its balance sheet. As a result of the Agreements and recognising a material amount of the first installment under the Enablement Agreement as revenue in FY 2025, the Group expects to become profitable in the current year, with profit significantly ahead of market expectations. The Group also expects to achieve further revenue growth beyond FY 2025 while delivering sustainable profits.

Additionally, the Enablement Agreement does not restrict Kromek from seeking other potential collaborations, including similar ventures with other OEMs in advanced imaging markets. As the largest independent producer and supplier of CZT, Kromek intends to continue producing CZT for the SPECT and CT (computed tomography) markets, utilising the remaining 159 furnaces it owns.

Arnab Basu, Chief Executive Officer of Kromek, said: “We are delighted to have entered into these agreements with Siemens Healthineers, a move that underscores Kromek’s position as the largest independent producer of CZT and CZT-based detectors. We both have an ongoing commitment to innovation that is critical for developing superior detector solutions that play a vital role in the early detection of serious illnesses. Both Siemens Healthineers and Kromek are aligned in our vision to enhance healthcare through technological advancements, and we eagerly anticipate collaborating to bring this vision to fruition.

“The initial $25.0m payment will be used to support the delivery of various milestones under the agreements, significantly reduce our debt and strengthen our balance sheet, ultimately enhancing our operational capabilities. These significant agreements enable Kromek to report FY 2025 profit ahead of market expectations and lay the groundwork for further growth in revenues and sustainable profitability beyond that period. These agreements also enable Kromek to continue its leadership in CZT production for SPECT and CT markets, as we maintain the flexibility to explore further collaborations with other OEMs in advanced imaging.”

 

30 Jan 25. Kromek – A new tie-up will extract value from this chemical stock. A radiation detection technology specialist has signed a major agreement with the German medical giant, and one that brings the undervaluation of its IP into sharp focus

Sedgefield-based Kromek (KMK:6.75p) has signed a company transformational agreement with Siemens Medical Solutions that has propelled the radiation detection technology specialist into sustainable profit and significantly strengthened its balance sheet.

Under the four-year agreement, Kromek will transfer 15 of its 174 furnaces for cadmium zinc telluride (CZT) production to Siemens Medical. The company will also provide the German group with all know-how, IP and related services (licensed on a non-exclusive basis) for next-generation single-photon emission CZT-based SPECT-detector applications in advanced medical imaging.

Importantly, Kromek will retain ownership of the patents, so it is able to serve and enter agreements with other original equipment manufacturers (OEM) in SPECT or other advanced imaging markets. These companies are also advancing medical imaging technology that is playing a vital role in the early detection of serious illnesses.

Under the Siemens Medical agreement, Kromek will receive $37.5mn (£30.1mn) over the course of four years, of which $25mn will be received in the current financial year ending 30 April 2025. In addition, the company will manufacture and supply CZT-based detector tiles to Siemens Medical during the agreement, which will boost revenue further.

It’s undoubtedly a vote of confidence in the UK company’s technology and highlights Kromek’s unique position as the largest independent producer and supplier of CZT. The initial cash injection from the agreement prompted analysts at Cavendish to upgrade their net cash forecast to £1.1m (from net debt of £6.4m) and pencil in a full-year pre-tax profit of £4.9m on 24 per cent higher revenue to £24.1mn, thus ending years of losses. On this basis, the shares are rated on a price/earnings (PE) ratio of 9.

It represents a significant financial reset for the company and means Kromek will be able to pay down expensive borrowings including a £5.5m secured term loan due for repayment in March 2025. The company will not only make material saving on finance costs, but it should now have sufficient working capital to grow the business, which mitigates funding risk. Although Cavendish pencil in a lower pre-tax profit of £2.1m on 12 per cent higher revenue of £27.1m in the 2025-26 financial year, there is clear scope for upside.

In the chemical, biological, radiological, and nuclear (CBRN) detection segment, demand continues to be driven by global geopolitical insecurity and the need for solutions that help provide public safety and security.

For instance, Kromek has been selected as a supplier under the UK government’s radiological nuclear detection framework for the procurement of equipment and supporting services for the Home Office. The company is pre-qualified to be selected for orders in three categories, covering the supply of handheld, wearable and large volume static radiation detectors, which have a combined maximum procurement value of £84mn over the four-year term of the framework. In addition, Kromek has contracts with both UK and US government agencies to develop and supply biological detection systems, and is pursuing several other engagements in this area.

So, having last rated the shares a speculative buy, at 5.65p (‘There’s value in these volatile shares’, 28 October 2024), I continue to see multi-bagger potential in the £43m market capitalisation company as it enters deals with other medial OEMs. Analysts at Cavendish value Kromek’s shares at 26p using a discounted cash flow method, or four times the current share price. Buy. (Source: Investors Chronicle)

 

29 Jan 25. European defence stocks surge as Nato spending rises.

Disquiet about future Pentagon policy has weighed on US military contractors

• UK defence spending could be constrained
• Lockheed Martin singled out by Musk

European defence shares have outperformed their US counterparts since Trump’s election, and pressure from across the Atlantic for Nato member states to ramp up spending could push valuations sharply higher.

Since 5 November, continental defence players such as Rheinmetall (DE:RHM), Leonardo (IT:LDO) and Dassault Aviation (FR:AM) have surged at the same time as US stalwarts such as Lockheed Martin (US:LMT), Northrop Grumman (US:NOC) and General Dynamics (US:GD) have fallen amid uncertainty about the direction of policy at the Pentagon.

A new landscape for European defence spending has raised the potential for a sharp re-rating of sector valuations in the medium term. Analysts at Citi estimate that valuations would be boosted by 30 per cent if Nato states’ spending rises to 3 per cent of GDP. However, they cautioned that such a material increase is “optimistic”.

Nato spending rising

Trump has called for Nato states to spend 5 per cent of GDP on defence and reduce their reliance on the US. While only 23 out of 32 countries hit the military alliance’s 2 per cent target in 2024, that was more than double the number the year before as spending increased following Russia’s invasion of Ukraine.

Nato has also urged much higher spending under secretary general Mark Rutte, who said in a speech in Brussels before Christmas that member states are “going to need a lot more than 2 per cent” of GDP budgeted for defence. He argued that “it is time to shift to a wartime mindset and turbo-charge our defence production and defence spending”.

While Trump’s 5 per cent call should be seen as a pressuring tactic to induce movement towards a higher rate, some nations have already responded to the call. Lithuania and Estonia – which border Russia – have already confirmed they will raise spending to 5 per cent, while Poland’s spend of more than 4 per cent of GDP is the highest amongst Nato states. But fiscal and political pressures across Europe mean that, for many states, getting spending towards 3-3.5 per cent would be a huge challenge.

Read more from Investors’ Chronicle

What Trump’s first moves mean for investors

The UK-listed ‘magic formula’ stocks for 2025

Why shipbrokers Braemar and Clarkson are defying pay norms

The black sheep of the FTSE 250 deserve a second look

In the UK, which delivers around a fifth of European defence spending, a second strategic defence review in four years is expected from the government in the first half of 2025. Investors in stocks such as BAE Systems (BAE), which was awarded a £285mn Royal Navy warship combat systems contract this week, and Babcock International (BAB) are waiting keenly for signs of greater budgetary support.

They may be disappointed. Citi “would not expect to hear significant near-term increases in defence spending” in the UK or France – where Thales (FR:HO) and Safran (FR:SAF) are key players – given fiscal challenges. Analysts at Bank of America said BAE Systems and QinetiQ (QQ.) have the weakest outlook for margin growth over the next two years of the European defence shares in their coverage. QinetiQ has blamed domestic economic conditions for softer than expected UK orders, although highlighted better performance in its UK defence unit than the UK intelligence unit, which it has had to “resize”.

European defence shares climbed quickly in the aftermath of the Ukraine invasion. Operators are set to benefit further even if there is an end to the conflict in the short term, with rearmament and restocking pressures at the fore in a new geopolitical landscape.

A new Pentagon

While the wider US market has risen since Trump’s election – the S&P 500 is up around 4 per cent – investors are unclear about the new administration’s plans for defence policy and contracts.

Bank of America analysts prefer exposure to European Union and Nato-linked defence shares rather than those in the US, where “a growing focus on budget efficiency could weigh on sentiment”.

The Elon Musk-led Department for Government Efficiency could spell big changes for the $850bn (£684bn) defence budget. Musk has described leading defence contractor Lockheed Martin’s F-35 fighter jets as “the worst military value for money in history”.

Lockheed’s shares were knocked this week by an earnings miss driven by losses on aeronautics and missile programmes. Fellow top contractor Boeing’s (US:BA) annual losses at its defence, space and security arm widened from $1.76bn to $5.41bn, year on year, as delivery numbers dropped.

Legacy operators are uncertain about new US defence secretary Pete Hegseth, with sector challengers such as Palantir Technologies (US:PLTR) well placed to benefit from a new direction on military tech. After being confirmed in a narrow vote in the Senate, Hegseth spoke of “reviving our defence industrial base, reforming our acquisition process, passing a financial audit, and rapidly fielding emerging technologies”.

Analysts at Morningstar expect the revenue share of the top eight US contractors to decline, with “upside potential for smaller contractors to capture a higher relative share of the budget” over the long term as the Pentagon moves to reduce the concentration at the top of the industry.

(Source: Investors Chronicle)

 

28 Jan 25. Onebrief, the leading software for operational planning and military staff workflows, today announced the completion of its Series C funding round. The company raised $50m, bringing its total capital raised to $103m.

“Simply put, transforming operational planning will win the war. This funding and our new partnerships unlock the ability to drive real, powerful change across our institutions.”

The Series C round was led by General Catalyst and Insight Partners, with participation from Caffeinated Capital, 9Yards Capital, and Human Capital. Human Capital also led Onebrief’s Series B round in 2024. Each investor was selected for their deep expertise in global defense markets and commitment to accelerating Onebrief’s mission.

“At General Catalyst, our mission is to help modernize our nation’s defense and industrial resilience. At the core of this resiliency is our military’s ability to make rapid operational decisions in distributed and dynamic environments. We met Grant Demaree and Onebrief over two years ago and were struck by the clarity of their approach. My partners, Lt. Gen. USAF (Ret) Scott Howell and Matt Byington have experienced the military planning process firsthand and quickly noticed the advantages that Onebrief provides at every echelon. We’re excited to partner with Onebrief and help them support warfighters and military staffs to be more efficient and effective in their profession,” said Paul Kwan, Managing Director, General Catalyst.

“At Insight Partners, we are committed to supporting companies that will create lasting impact in the sectors they serve, and Onebrief is a prime example,” said Nick Sinai, Managing Director at Insight Partners. “Their approach to operational planning lays a foundation for transforming military decision-making. Innovation in defense technology is critical for ensuring global stability and security, and Onebrief’s platform can help redefine what is possible.”

Onebrief’s Series C follows a year of consequential growth. Today, the platform is used across U.S. military headquarters worldwide to accelerate planning, provide faster command decisions, and help staffs work efficiently. As a result, Onebrief is now integral to three of the four largest operational plans (OPLANs) globally and is used for even more day-to-day operational plans. With its latest funding, Onebrief will continue that momentum by advancing the platform, expanding teams, and investing in customer development.

Company Growth

Following nearly 130% employee growth year-over-year, the company will continue to expand its product, customer success, and growth teams. This funding has also enabled Onebrief to make significant leadership appointments.

Chris C. Miller, former Acting Secretary of Defense, has agreed to join Onebrief’s Board of Directors. Miller brings 34 years of service in the Army and national security apparatus of the United States. His service culminated as the Acting Secretary of Defense where he successfully led its nearly three m service members and civilian employees. Currently, he is a business strategist and advisor within the defense industry, and the author of Soldier-Secretary: Warnings from the Battlefield & the Pentagon about America’s Most Dangerous Enemies.

“Onebrief is the capability I dreamed of in my early military career, and as a senior civilian official, it’s the tool I wanted to provide our fielded forces and supporting staff to ease their planning and wargaming burdens — work that ultimately determines who lives and dies, and what force wins or loses,” said Miller. “I’m proud to be part of Onebrief’s mission. I have said many times that the genius of America is the vibrancy of our free-market system and the talent of our entrepreneurs and brilliant technologists.”

Lieutenant General (Ret) Lewis Craparotta, USMC, has agreed to join Onebrief’s Board of Directors, having served as a Senior Advisor to Onebrief since 2021. In his military career, Craparotta commanded in the operating forces at every level, notably in Marine Forces Pacific and I Marine Expeditionary Force. He also served on the Joint Staff, at Special Operations Command Europe, and as the Director of Operations at U.S. Northern Command.

“Over the past three years I have been amazed by the vision, drive, and growth of this company as we continuously refined the platform for our customers,” noted Craparotta. “We have a novel opportunity to enable true global collaboration and integration. There is also the potential for application beyond our current scope, and I’m looking forward to continuing this important work.”

Devesh Senapati joins as the new Vice President of Product. Most recently, he served as Product Lead at Stripe, a leading financial infrastructure platform, where he led the development of Terminal, Stripe’s in-person payments product suite. Prior, Senapati worked across multiple early-stage startups and as a software investor at Bain Capital Ventures. He began his career as a consultant at McKinsey & Company. Senapati earned his MBA from Stanford Graduate School of Business and BBA from the University of Michigan’s Ross School of Business.

This raise is also a milestone event for early employees as Onebrief has executed a Tender Offer, allowing them to sell shares on the secondary market. The company aims to ensure employees benefit from the new funding.

Platform and Mission Alignment

Strategic developments within the core platform enable Onebrief to support the evolving and complex needs of tomorrow’s military staffs. These advancements include improvements in deployment solutions, delivering reliable and performant networks; impactful new features, like offline capabilities or an AI Co-planner; and longer-term development of AI-driven wargaming for course-of-action (COA) development. These developments can help redefine military decision-making.

By transforming operational planning and workflows, the opportunity to make a stronger impact with fewer resources becomes a reality. This vision aligns with the new administration’s focus on the implementation of AI to reduce resources and government spending.

“Simply put, transforming operational planning will win the war. This funding and our new partnerships unlock the ability to drive real, powerful change across our institutions,” said Grant Demaree, CEO of Onebrief.

About Onebrief

Onebrief is a transformative platform for operational planning and military staff workflows. Currently live on SIPR, NIPR, and JWICS, the software is designed to enable smarter, real-time decisions. With unparalleled collaboration features, AI-enhanced tools, and customizable workflows, Onebrief enables users to accomplish more with fewer resources. Learn more at onebrief.com. (Source: BUSINESS WIRE)

 

29 Jan 25. Patria acquires ILIAS Solutions to strengthen digital defence capabilities and readiness. Defence and technology company Patria announces acquisition of cutting-edge Belgium-based digital defence platform provider ILIAS Solutions. With the acquisition of the number-one digital defence platform for fleet management, Patria enhances its digital services.

In the complex world of defence operations, keeping fleets ready for action while managing costs effectively is crucial. The power of high-quality data enabling better and faster decision-making is increasingly felt in ‘normal’ circumstances and on the battlefield.

Patria’s strong foothold and expertise in the maintenance and sustainment of military fleets will be empowered by ILIAS’ defence platform. ILIAS’ software will feed into the Patria OPTIME service, offering multi-fleet management for optimal performance across defence forces and ensuring focus on mission success.

“High-end MRO services with data driven solutions and intelligent analytics are becoming increasingly important, if not essential, to provide optimal performance and availability across fleets. We at Patria are excited about acquiring the number-one defence platform and starting our joint journey with the ILIAS Solutions team,” says Pekka Ruutu, Executive Vice President of Patria’s Portfolio unit.

“There are clear synergies between the two companies and benefits for customers of both companies as well as for our European joint programmes when the Patria OPTIME service concept is set to be powered with ILIAS’ defence platform”, Ruutu continues.

To fully optimise depot-level maintenance, fleet management and mission deployment as well as logistics and supply chain management, there is a need for a uniform platform across defence fleets, complying with all modern digital requirements.

“Being part of Patria Group will strengthen ILIAS Solutions’ broadening position as the partner of trust for the defence market, providing our customers with the needed assurance that is essential for a mission-critical information systems provider. The seamless combination of the ILIAS Solutions software suite with Patria’s OPTIME service concept with access to our combined European and global markets provides vast potential for both companies. Furthermore, as a tri-service supplier ILIAS Solutions will especially benefit from Patria’s strong heritage in land systems, extending our solid expertise in military air operations,” says Jean-Pierre Wildschut, Chief Executive Officer of ILIAS Solutions.

Patria’s acquisition leads the way for Europe’s defence digitalization which is necessary for preparedness and the successful management of capability gaps. By harnessing data effectively, Patria OPTIME now better enables predictive maintenance, proactive planning and streamlined supply chain management, ultimately boosting fleet availability and performance.

The transaction will undergo the authority approval process in countries where ILIAS Solutions has offices, including Belgium, the Netherlands, the US, Denmark and Australia. The acquisition price is not disclosed by the parties.

 

29 Jan 25. The boards of AAM and Dowlais announced that they have reached agreement on the terms of a recommended cash and share offer to be made by AAM for the entire issued and to be issued ordinary share capital of Dowlais (the “Combination”).

• The Combined Group will be a larger, diversified global manufacturer well-positioned for long-term profitable growth, value-enhancing investments and sustainable capital returns. The boards of AAM and Dowlais believe the Combination will generate significant value for both sets of shareholders. The Combined Group will have the following characteristics:
• a leading, innovative global driveline and metal forming supplier with significant size and scale;
• an increasingly propulsion-agnostic portfolio of products across a broader range of automotive segments supporting internal combustion engine, hybrid and electric powertrains;
• a diversified customer base with expanded and balanced geographic presence;
• the opportunity to deliver significant cost synergies of $300m across the Combined Group;
• high margins, with strong earnings accretion, cash flow and balance sheet; and
• an experienced and blended management and leadership team, with a proven track record of restructuring, integration and operational excellence.

The Combination

• Under the terms of the Combination, each Dowlais Shareholder will be entitled to receive:

for each Dowlais Share held:

0.0863 New AAM Shares;

42 pence in cash; and up to 2.8 pence in the form of a final cash dividend to be paid (subject to the approval of the Dowlais Board) prior to Completion

• Pursuant to the consideration payable in connection with the Combination, each Dowlais Shareholder will be entitled to receive the payment of a final cash dividend by Dowlais of up to 2.8 pence for each Dowlais Share (the “FY24 Final Dividend”) (to be paid (subject to the approval of the Dowlais Board) in line with Dowlais’ ordinary course 2024 financial year dividend calendar) without any reduction of the consideration payable under the terms of the Combination.
• The terms of the Combination represent a total implied value of 85.2 pence per Dowlais Share, based on the Closing Price of $5.82 for each AAM Share and £/US$ exchange rate of 1.2434 on 28 January 2025 (being the close of business on the last Business Day before the date of this Announcement), and including the FY24 Final Dividend.
• Immediately following Completion, it is expected that the Dowlais Shareholders will own approximately 49 per cent., and AAM Shareholders will own approximately 51 per cent., of the issued and outstanding common stock of the Combined Group, with Dowlais Shareholders benefiting from up-front cash consideration and the opportunity to participate in the anticipated future value accretion of the Combined Group.
• The Combined Group will have an experienced and blended management and leadership team. David C. Dauch will serve as the Chairman and Chief Executive Officer of the Combined Group. In addition, Roberto Fioroni (Chief Financial Officer, Dowlais), Helen Redfern (Chief People, Sustainability and Communications Officer, Dowlais), Markus Bannert (Chief Executive Officer, GKN Automotive), and Jean-Marc Durbuis (Chief Executive Officer, GKN Powder Metallurgy) will be invited to join existing AAM executives as part of the senior executive management team of the Combined Group, in roles to be confirmed. It is also expected that Simon Mackenzie Smith (Chair, Dowlais) and Fiona MacAulay, who currently serve on the Dowlais Board, will join the Board of AAM following completion of the Combination.
• The terms of the Combination (including the FY24 Final Dividend) value the entire issued and to be issued ordinary share capital of Dowlais at approximately £1.16 bn on a fully diluted basis and represent a premium of approximately:
• 25 per cent. to the Closing Price of 68 pence for each Dowlais Share as at the close of business on 28 January 2025 (being the last Business Day before the date of this Announcement);
• 45 per cent. to the volume-weighted average price of 59 pence for each Dowlais Share for the three-month period ended on 28 January 2025 (being the last Business Day before the date of this Announcement); and
• 46 per cent. to the volume-weighted average price of 59 pence for each Dowlais Share for the six-month period ended on 28 January 2025 (being the last Business Day before the date of this Announcement).
• The terms represent an implied enterprise value multiple of approximately 4.1 times Dowlais’ adjusted EBITDA for the 12-month period ended 31 December 2023, and 3.0 times when including full run rate cost Full text: https://otp.tools.investis.com/clients/uk/dowlais_group_plc/rns/regulatory-story.aspx?cid=2849&newsid=1904565&culture=en-GB&val=638737379662119532

 

28 Jan 25. Boeing stock rallies on plane progress despite $11.bn annual loss. 

Boeing reports $11.8bn annual loss after crisis-ridden year

• Summary
• Companies
• Boeing reports largest loss since 2020
• Boeing expects 737 MAX production to reach 38 airplanes a month rate by mid-year, and go higher in second half
• Boeing 787 production rate expected to increase from 5 airplanes a month to 7, with at least 75-80 deliveries this year

Boeing said on Tuesday it was making progress on increasing plane production, and its shares jumped nearly 8%, despite the company recording its biggest annual loss in four years.

The $11.8-bn loss, due to problems at its major units, along with fallout from a crippling strike that shuttered production of most of its jets, demonstrates the challenges facing CEO Kelly Ortberg in turning around the U.S. planemaker.

Boeing has ceded ground to rival Airbus (AIR.PA) in the delivery race and entered the crosshairs of regulators and customers following a series of missteps.

CFO Brian West told analysts the planemaker had delivered 33 of its strongest-selling 737 jets so far in January. West added the company expects to be in position later this year to exceed a cap of 38 per month imposed by U.S. regulators, but would need approval of the Federal Aviation Administration. (Source: Reuters)

 

28 Jan 25. Boeing Reports Fourth Quarter Results.

Fourth Quarter 2024

• Finalized the International Association of Machinists and Aerospace Workers (IAM) agreement and resumed production across the 737, 767 and 777/777X programs
• Financials reflect previously announced impacts of the IAM work stoppage and agreement, charges for certain defense programs, and costs associated with workforce reductions announced last year
• Revenue of $15.2 bn, GAAP loss per share of ($5.46) and core (non-GAAP)* loss per share of ($5.90)
• Operating cash flow of ($3.5)bn; cash and marketable securities of $26.3bn

Full Year 2024

• Delivered 348 commercial airplanes and recorded 279 net orders
• Total company backlog grew to $521 bn, including over 5,500 commercial airplane

The Boeing Company [NYSE: BA] recorded fourth quarter revenue of $15.2bn, GAAP loss per share of ($5.46) and core loss per share (non-GAAP)* of ($5.90) primarily reflecting previously announced impacts of the IAM work stoppage and agreement, charges for certain defense programs, and costs associated with workforce reductions announced last year. Boeing reported operating cash flow of ($3.5)bn and free cash flow of ($4.1)bn (non-GAAP)*.

“We made progress on key areas to stabilize our operations during the quarter and continued to strengthen important aspects of our safety and quality plan,” said Kelly Ortberg, Boeing president and chief executive officer. “My team and I are focused on making the fundamental changes needed to fully recover our company’s performance and restore trust with our customers, employees, suppliers, investors, regulators and all others who are counting on us.”

Operating cash flow was ($3.5)bn in the quarter reflecting lower commercial deliveries, as well as unfavorable working capital timing, primarily driven by the IAM work stoppage.

Cash and investments in marketable securities totaled $26.3bn, compared to $10.5bn at the beginning of the quarter, primarily driven by a $24bn capital raise partially offset by free cash flow usage and debt repayment in the quarter. Debt was $53.9bn, down from $57.7bn at the beginning of the quarter, driven by the early repayment of a $3.5bn bond originally maturing in 2025. The company maintains access to credit facilities of $10.0bn, which remain undrawn.

Total company backlog at quarter end was $521bn.

Segment Results

Commercial Airplanes

Commercial Airplanes fourth quarter revenue of $4.8bn and operating margin of (43.9) percent reflect the previously announced impacts associated with the IAM work stoppage and agreement including lower deliveries and pre-tax charges of $1.1bn on the 777X and 767 programs (Table 4).

The 737 program resumed production in the quarter and plans to gradually increase production rate. The 787 program exited the year at a production rate of five per month and recently announced plans to expand South Carolina operations. In January, the 777X program resumed FAA certification flight testing, and the company still anticipates first delivery of the 777-9 in 2026.

Commercial Airplanes booked 204 net orders in the quarter, including 100 737-10 airplanes for Pegasus Airlines and 30 787-9 airplanes for flydubai. Commercial Airplanes delivered 57 airplanes during the quarter and backlog included over 5,500 airplanes valued at $435bn.

Defense, Space & Security

Defense, Space & Security fourth quarter revenue of $5.4bn and operating margin of (41.9) percent reflect the previously announced pre-tax charges of $1.7bn on the KC-46A, T-7A, Commercial Crew, VC-25B and MQ-25 programs.

In January, the U.S. Air Force announced an updated acquisition approach for the T-7A Red Hawk that allows the company to provide a production-ready configuration to the customer prior to low-rate initial production, which better supports the operational needs of the customer and reduces future production risk.

During the quarter, Defense, Space & Security captured an award from the U.S. Air Force for 15 KC-46A Tankers, secured an order for seven P-8A Poseidon aircraft from the U.S. Navy, and delivered the final T-7A Red Hawk engineering and manufacturing development aircraft to the U.S. Air Force. Backlog at Defense, Space & Security was $64bn, of which 29 percent represents orders from customers outside the U.S.

Global Services

Global Services fourth quarter revenue of $5.1bn and operating margin of 19.5 percent reflect higher commercial volume and mix.

During the quarter, Global Services secured awards for C-17 sustainment and a contract for F-15 Japan Super Interceptor upgrade services from the U.S. Air Force.

Unallocated items, eliminations and other primarily reflects timing of allocations.

 

28 Jan 25. Lockheed hit by $2bn in charges on 2 classified programs

The world’s largest defense contractor recorded total year end losses of $1.4bn on a classified program in its missiles and fire control (MFC) portfolio as well as $555m overrun on a program in its aeronautics division, Lockheed said in a news release.

Higher than expected engineering costs and other difficulties forced Lockheed Martin to book $2bn in losses on two classified programs in 2024, with a $1.7 bn hit occurring in the final quarter of the year, the company said in results today.

The world’s largest defense contractor recorded total year end losses of $1.4 bn on a classified program in its missiles and fire control (MFC) portfolio as well as a $555m overrun on a program in its aeronautics division, Lockheed said in a news release. Of that sum, the MFC program logged a $1.3bn charge in the fourth quarter, with the aeronautics program incurring a $410m charge during the same period.

The MFC program losses stem from a contract where Lockheed can be reimbursed for costs during the initial phase of the program, but where follow-on contract options are locked under a fixed-price deal that holds Lockheed responsible for paying costs above a certain threshold. Lockheed estimates that all options exercised over the “next several years” would be performed at a loss to the company, with the first $100 m charge occurring in the first quarter of 2024.

“During the fourth quarter of 2024, the company again assessed the likelihood that additional options may be exercised and now believe it is probable that all options will be exercised based on performance to date, future requirements of the program, discussions with the customer and suppliers, and anticipated customer funding, among other factors, resulting in the recognition of additional losses,” Lockheed said in a release.

When Lockheed executives first disclosed the hit to the MFC program in April, CEO Jim Taiclet characterized the program as a long-running franchise that will deliver a strong return on investment after going through a period of teething pains, while Chief Financial Officer Jay Malave said the effort was expected to become profitable on an annual basis around the 2028 timeframe.

Meanwhile, Lockheed described the impacted aeronautics program as a fixed-price incentive fee contract involving “highly complex design and systems integration.” The company conducted a review of the program due to undisclosed near-term milestones and trends experienced in the fourth quarter, and recorded losses based on “higher projected costs in engineering and integration activities that are necessary to achieve those forthcoming milestones,” it said.

Because of the classified program losses, Lockheed’s target earnings per share for 2024 amounted to $22.31. It recorded $5.3bn in free cash flow for 2024. Net sales increased 5% to $71bn.

“2024 was another successful and productive year for Lockheed Martin,” Taiclet said in a statement accompanying results. “Our 5% sales growth and record year-end backlog of $176 bn demonstrate the enduring global demand for our advanced defense technology and systems.”

The company expects net sales of about $73.7bn to $74.7bn in 2025, with a free cash flow target of around $6.6bn to $6.8bn. (Source: glstrade.com/Breaking Defense.com)

 

28 Jan 25. Lockheed Martin Reports Fourth Quarter and Full Year 2024 Financial Results

• 2024 net sales increased 5% to $71.0bn
• Recorded pre-tax losses of $1.7bn and $2.0 bn associated with classified programs in the fourth quarter and full year, which impacted earnings per share by $5.45 and $6.16
• Earnings per share of $2.22 in the fourth quarter and $22.31 in 2024, including impact of classified programs losses
• Cash from operations of $7.0bn and free cash flow of $5.3bn in 2024 after a pension contribution of $990m
• Returned $6.8 bn of cash to shareholders through dividends and share repurchases in 2024
• Record backlog of $176.0bn at end of 2024
• 2025 financial outlook provided

Lockheed Martin Corporation [NYSE: LMT] today reported fourth quarter 2024 net sales of $18.6bn, compared to $18.9bn in the fourth quarter of 2023. Net earnings in the fourth quarter of 2024 were $527m, or $2.22 per share, including $1.7bn ($1.3bn, or $5.45 per share, after-tax) of losses for classified programs, compared to $1.9bn, or $7.58 per share, in the fourth quarter of 2023. Cash from operations was $1.0bn in the fourth quarter of 2024, after a pension contribution of $990m, compared to $2.4bn in the fourth quarter of 2023. Free cash flow was $441m in the fourth quarter of 2024, after a pension contribution of $990m, compared to $1.7bn in the fourth quarter of 2023. Fourth quarter 2024 results included 13 weeks, compared to 14 weeks for fourth quarter 2023, which had an unfavorable impact on sales volume across the company.

Net sales in 2024 were $71.0bn, compared to $67.6bn in 2023. Net earnings in 2024 were $5.3bn, or $22.31 per share, including $2.0bn ($1.5 bn, or $6.16 per share, after-tax) of losses for classified programs, compared to $6.9bn, or $27.55 per share, in 2023. Cash from operations was $7.0bn in 2024, after a pension contribution of $990m, compared to $7.9bn in 2023. Free cash flow was $5.3bn in 2024, after a pension contribution of $990m, compared to $6.2bn in 2023.

“2024 was another successful and productive year for Lockheed Martin. Our 5% sales growth and record year-end backlog of $176bn demonstrate the enduring global demand for our advanced defense technology and systems,” said Jim Taiclet, Lockheed Martin’s Chairman, President and CEO. “In the year, we invested over $3bn in advancing our nation’s security through research and development and capital investment to support our customers’ missions, drive innovation and transform our operations with the latest digital and manufacturing technologies. Our strong and consistent performance also enabled us to again return greater than 100% of free cash flow to our shareholders in 2024.”

“We also continue to drive collaboration across government and all sectors of American industry to accelerate innovation, improve resilience and integrate emerging technologies to deter, and if necessary to win any potential armed conflict,” continued Taiclet.

“Lockheed Martin is committed to developing and delivering the best military capabilities in the world, better than any potential adversary can hope to have. One of our most critical investments in 2024 was in ensuring continued air superiority for the United States and its allies. We are fully committed to developing a combined air power solution set that integrates new 6th generation with current 5th generation and 4th generation aircraft using wingman drones, AI, advanced sensors in space and in the air, and 5G-level, cyber-hardened data links. Our leading technical and manufacturing capabilities, the innovative spirit that originated in our Skunk Works® operation, our incredibly capable workforce, along with the derisking actions we executed in the fourth quarter, position us well for strong performance in 2025. We look forward to working with the incoming administration to best serve our customers with highly reliable, theater-level mission solutions that can win wars while delivering compelling results to our shareholders.”

Earnings Impacts of Classified Program Losses and Other Items

During the fourth quarter of 2024, the company recognized losses associated with existing classified programs at its Aeronautics and Missiles and Fire Control (MFC) business segments.

The company’s Aeronautics business segment has an existing classified fixed-price incentive fee contract that involves highly complex design and systems integration. The program includes a base contract for the initial phase of the program and multiple options for additional phases. The company previously disclosed it continues to monitor the technical requirements and its performance, the remaining work and any future changes in scope or schedule, and estimated costs to complete the program, and it may have to record additional losses in future periods if further performance issues, increases in scope, or cost growth occur. As a result of performance trends experienced in the fourth quarter 2024 and in contemplation of near-term program milestones, the company performed a comprehensive review of the program requirements, technical complexities, schedule, and risks. Based on that review, the company has identified higher projected costs in engineering and integration activities that are necessary to achieve those forthcoming milestones and recognized losses across the program phases of $410m in the fourth quarter of 2024. As of December 31, 2024, losses for the year were approximately $555m, including the fourth quarter loss.

The company’s MFC business segment has an existing classified contract, which includes a cost-reimbursable base contract for the initial phase of the program and multiple fixed-price options for additional phases. The company previously disclosed the options may be exercised over the next several years and if performed expects they would each be at a loss. During the first quarter of 2024, the company concluded it was probable that the first option would be exercised and recognized a loss of approximately $100 m. During the fourth quarter of 2024, the company again assessed the likelihood that additional options may be exercised and now believe it is probable that all options will be exercised based on performance to date, future requirements of the program, discussions with the customer and suppliers, and anticipated customer funding, among other factors, resulting in the recognition of additional losses of approximately $1.3bn, which is consistent with the amount the company previously disclosed. For the year ended Dec. 31, 2024, MFC recognized losses of $1.4bn for this program, including the fourth quarter loss.

Cash Flows and Capital Deployment Activities

The decrease in operating and free cash flows in the quarter and year ended Dec. 31, 2024 compared to the same period in 2023 were primarily due to a pension contribution of $990m.

The company’s cash activities in the quarter and year ended 2024, included the following:

• paying cash dividends of $778m and $3.1bn during the quarter and year ended Dec. 31, 2024;
• paying $1.0bn to repurchase 1.8 m shares and $3.7bn to repurchase 7.5m shares during the quarter and year ended Dec. 31, 2024;
• making a pension contribution of $990 m during the quarter and year ended Dec. 31, 2024;
• making a long-term debt scheduled repayment of $168m during the year ended Dec. 31, 2024; and
• receiving net proceeds from debt issuances of approximately $1.0bn and $3.0bn during the quarter and year ended Dec. 31, 2024.

Segment Results

The company operates in four business segments organized based on the nature of products and services offered: Aeronautics, Missiles and Fire Control (MFC), Rotary and Mission Systems (RMS) and Space. The following table presents summary operating results of the company’s business segments and reconciles these amounts to the company’s consolidated financial results.

RMS’ net sales in the fourth quarter of 2024 decreased $450m, or 10%, compared to the same period in 2023. The decrease was primarily attributable to lower net sales of $170m on Sikorsky helicopter programs due to the sales impact of unfavorable profit rate adjustments and lower production volume on the Seahawk program and lower production volume on the Combat Rescue Helicopter (CRH) program; $150m for integrated warfare systems and sensors (IWSS) programs due to lower volume on Aegis; and $75m for various C6ISR programs due to lower volume.

RMS’ operating profit in the fourth quarter of 2024 decreased $66m, or 11%, compared to the same period in 2023. The decrease in operating profit was attributable to $80 m of lower profit booking rate adjustments. The decrease in profit booking rate adjustments was due to unfavorable profit rate adjustments on the Seahawk production program.

RMS’ net sales in 2024 increased $1.0bn, or 6%, compared to the same period in 2023. The increase was primarily attributable to higher net sales of $750m on IWSS programs due to higher volume on radar programs, the Canadian Surface Combatant (CSC) program and new program ramp up within the laser systems portfolio; $175m for various C6ISR programs due to higher volume; and $140m for Sikorsky helicopter programs due to higher production volume on the CH-53K program, partially offset by lower volume on the VH-92A program.

RMS’ operating profit in 2024 increased $56m, or 3%, compared to the same period in 2023. The increase in operating profit was attributable to $115m from higher volume described above and $85m from favorable contract mix and cost recoveries, partially offset by $155m of lower profit booking rate adjustments. The decrease in profit booking rate adjustments was due to unfavorable profit rate adjustments on the Seahawk production program, partially offset by the net impact in 2023 of both a $100m unfavorable profit rate adjustment on Canadian Maritime Helicopter Program (CMHP) and a $65 m favorable profit rate adjustment on an international surveillance and control program that did not recur in 2024.

Space

Space’s net sales in the fourth quarter of 2024 decreased $439m, or 13%, compared to the same period in 2023. The decrease was primarily attributable to lower net sales of $360m for national security space programs primarily due to lower volume on Next Generation Overhead Persistent Infrared (Next Gen OPIR) and classified programs; and $75m for commercial civil space due to lower volume on the Orion program.

Space’s operating profit in the fourth quarter of 2024 decreased $24m, or 8%, compared to the same period in 2023. The decrease was primarily attributable to $45m of lower profit booking rate adjustments, partially offset by $15m of higher equity earnings driven by higher launch volume from the company’s investment in United Launch Alliance (ULA). The decrease in profit booking rate adjustments was due to lower favorable profit rate adjustments on classified and hypersonics programs.

Space’s net sales in 2024 decreased $126m, or 1%, compared to the same period in 2023. The decrease was primarily attributable to lower net sales of $320m for national security space programs due to lower volume on classified programs and $145m for commercial civil space due to lower volume on the Orion program, partially offset by higher volume on other space exploration programs. These decreases were partially offset by higher net sales of $255m for strategic and missile defense programs due to higher volume on FBM and reentry programs.

Space’s operating profit in 2024 increased $68m, or 6%, compared to the same period in 2023. The increase was primarily attributable to $100 m related to favorable contract mix and cost recoveries across the portfolio, partially offset by $55m of lower profit booking rate adjustments due to lower net favorable profit rate adjustments on the Orion program and $25m of higher equity earnings driven by higher launch volume from the company’s investment in ULA.

Total equity earnings (ULA) represented approximately $15m, or 5% and $45 m, or 4% for the quarter and year ended Dec. 31, 2024. Total equity earnings for the quarter ended Dec. 31, 2023 was not significant and $20 m, or 2% for the year ended Dec. 31, 2023.

Income Taxes

The company’s effective income tax rate was (1.5)% and 13.0% for the quarters ended Dec. 31, 2024 and 2023. The lower effective income tax rate is due to lower pre-tax earnings, as a result of the classified programs losses previously described, which reduced the effective income tax rate by 18.6% for the quarter ended Dec. 31, 2024. The company’s effective income tax rate was 14.2% and 14.5% for the years ended Dec. 31, 2024 and 2023. The classified program losses previously described reduced pre-tax earnings and reduced the effective income tax rate by 2.0% for the year ended Dec. 31, 2024. The rates for all periods benefited from tax deductions for foreign derived intangible income, research and development tax credits, dividends paid to the company’s defined contribution plans with an employee stock ownership plan feature and employee equity awards.

Business segment operating profit

Business segment operating profit represents operating profit from the company’s business segments before unallocated income and expense. This measure is used by the company’s senior management in evaluating the performance of its business segments and is a performance goal in the company’s annual incentive plan. Business segment operating margin is calculated by dividing business segment operating profit by sales. The table below reconciles the non-GAAP measure business segment operating profit with the most directly comparable GAAP financial measure, consolidated operating profit.

Free cash flow is cash from operations less capital expenditures. The company’s capital expenditures are comprised of equipment and facilities infrastructure and information technology (inclusive of costs for the development or purchase of internal-use software that are capitalized). The company uses free cash flow to evaluate its business performance and overall liquidity and it is a performance goal in the company’s annual and long-term incentive plans. The company believes free cash flow is a useful measure for investors because it represents the amount of cash generated from operations after reinvesting in the business and that may be available to return to stockholders and creditors (through dividends, stock repurchases and debt repayments) or available to fund acquisitions or other investments. The entire free cash flow amount is not necessarily available for discretionary expenditures, however, because it does not account for certain mandatory expenditures, such as the repayment of maturing debt and future pension contributions.

 

27 Jan 25. Comply365, LLC (“Comply365”), a leading global provider of operational content, safety and training management solutions for the aviation, rail, defense and space industries, announced today it has executed a definitive agreement to acquire Aviation Safety & Quality Solutions S.à r.l (“ASQS”), a global provider of safety and compliance management systems (“SMS”). This acquisition marks a significant milestone in Comply365’s growth strategy, including acceleration of its investment in safety management and Comply365’s mission to create a best-in-class, integrated offering to elevate safety, training and operational performance for its worldwide aviation, rail, defense and space customers. Comply365 is a portfolio company of Insight Partners and Liberty Hall Capital Partners (“Liberty Hall”).

The acquisition of ASQS will enhance Comply365’s product capabilities, strengthen its service offering in safety management and expand its global customer base. The ASQS team have deep expertise in all areas relating to safety management, including compliance and risk management. Their sophisticated safety management solution, iQSMS, will complement Comply365’s existing SMS product, SafetyNet, positioning the combined business as a key player in the safety management space.

Ilia Kostov, CEO of Comply365 said: “We are delighted to welcome the ASQS team into the Comply365 family. They bring a wealth of talent, specialized knowledge and complementary product strengths to our organization. This acquisition demonstrates our commitment to invest in safety management, a central component of our value proposition and vision to create a best-in-class, integrated offering connecting the mission-critical functions of operational content management, safety management and training management.”

Günther Schindl, CEO of ASQS said: “I am excited to join Ilia and the Comply365 team to support their vision of delivering a safety-focused, integrated operations offering. The acquisition of ASQS by Comply365 is a significant milestone in ASQS’s journey and will allow us to better serve our customers with differentiated and connected safety management capabilities.”

Henry Frankievich, Managing Director at Insight Partners said: “The acquisition of ASQS will enhance Comply365’s position as a key player in the global safety management space. We look forward to accelerating the combined company’s strategy to deliver one interconnected offering to its worldwide customer base.”

James Black, Partner at Liberty Hall added: “With safety management at the core of Comply365’s product strategy, the acquisition of ASQS marks an important milestone in the company’s growth and vision for the future. The addition of the iQSMS solution directly complements our existing product portfolio and demonstrates our steadfast commitment to creating a best-in-class, integrated offering across operational content, safety and training. Alongside our partners at Insight Partners, we look forward to supporting Comply365’s continued growth and delivering even greater value to our customers.”

Completion of the transaction is expected in the second quarter of 2025, subject to applicable regulatory approvals.

Legal advice to Comply365 was provided by Willkie Farr & Gallagher LLP and E+H Rechtsanwälte. The shareholders of ASQS were advised by Lindner Stimmler and E.M.I. Avocat à la Cour.

About Comply365

Comply365 is a leading provider of Operational Content Management, Safety Management and Training Management in the highly regulated industries of aviation, defense, rail and space. Comply365 provides a powerful combination of expertise and products underpinned by unified best practices, empowering its customers to elevate operational excellence, transform safety management and training management, with closer integration of relevant data sets across domains. Comply365 product portfolio ensures its customers’ crews and assets are always geared for peak operational performance, unlocking unparalleled financial and operational gains through more streamlined, robust and agile operations. Comply365 is the trusted technology partner of many of the most progressive aviation, defense, rail and aerospace organizations worldwide. For more information, please visit comply365.com.

About ASQS and iQSMS®

ASQS (Advanced Safety and Quality Solutions) is a leading global provider of aviation safety, quality and risk management software, headquartered in Vienna, Austria, with offices in Bangkok, Thailand and Calgary, Canada. With its core product iQSMS, the company specializes in developing and delivering intuitive, user-friendly solutions that support aviation organizations of all types in their daily operations. Founded in 2009, ASQS has many years of experience in aviation safety and quality management, as well as extensive knowledge of the industry’s regulatory requirements. ASQS believes it is the first global provider to integrate AI technology into an SMS application. The company supports aviation organizations of all sizes worldwide, helping to streamline internal workflows through digitization and automation to maximize efficiency in day-to-day aviation operations. For more information, visit asqs.net.

About Insight Partners

Insight Partners is a global software investor partnering with high-growth technology, software, and Internet startup and ScaleUp companies that are driving transformative change in their industries. As of September 30, 2024, the firm has over $90B in regulatory assets under management. Insight Partners has invested in more than 800 companies worldwide and has seen over 55 portfolio companies achieve an IPO. Headquartered in New York City, Insight has offices in London, Tel Aviv, and the Bay Area. Insight’s mission is to find, fund, and work successfully with visionary executives, providing them with tailored, hands-on software expertise along their growth journey, from their first investment to IPO. For more information on Insight and all its investments, visit insightpartners.com or follow us on X @insightpartners.

About Liberty Hall

Liberty Hall Capital Partners is a private equity firm focused exclusively on investments in businesses serving the global aerospace and defense industry. Liberty Hall’s principals have a 25-plus year history of working together and have led the investment of over $2.5 bn in equity capital in over 25 businesses serving multiple segments of the aerospace and defense industry, including the investment of over $1.0 bn in equity capital since the formation of Liberty Hall. Liberty Hall was founded in July 2011 as the first, and remains the only, private equity firm focused solely on investments in middle market businesses serving the aerospace and defense industry. Liberty Hall executes a proven and repeatable investment strategy designed to transform middle market businesses into larger, more capable and diverse strategic assets. For more information, please visit libertyhallcapital.com.

(Source: PR Newswire)

 

27 Jan 25. OPEXUS, a leading provider of government process management software, and Casepoint, the industry leader in data discovery technology for litigation, investigations, and data compliance, today announced a merger and a majority investment from Thoma Bravo, a leading software investment firm. Casepoint shareholders and OPEXUS’s existing investor Gemspring Capital will both retain minority positions in the combined company.

OPEXUS currently serves over 100,000 government users and 200 public institutions in the U.S. and Canada, providing purpose-built solutions for Freedom of Information Act (FOIA), audit, investigations, workforce management, and procurement teams. Its solutions help customers digitize complex government processes, approvals, and reporting, modernizing their ability to respond to rapidly growing and increasingly challenging requests while adhering to the highest privacy and security standards.

Casepoint’s modern, cloud-native approach to data discovery is the gold standard for highly complex, data-responsive workflows. Casepoint has Department of Defense Impact Level 5 and 6 security certifications and is used by dozens of federal agencies. Its innovative software is widely used by enterprise customers to manage data, enhance efficiency, mitigate risk, and effectively meet reporting and compliance obligations related to litigation, investigations, and Congressional inquiries. Casepoint was established in 2008 by founder and Chief Technology Officer Vishal Rajpara and co-founder and Chief Operating Officer Vipul Rajpara.

This strategic merger and Thoma Bravo’s investment will establish a more comprehensive and innovative process management and discovery platform for government and commercial customers in North America and accelerate the combined company’s growth. The combined company will be led by CEO Howard Langsam and Vishal Rajpara will serve on the executive leadership team. It will be headquartered in Washington, D.C.

“There is a growing need for high-quality data management in the public sector, with government agencies increasingly seeking to be as efficient, transparent, and accountable as possible,” said Howard Langsam, CEO of OPEXUS. “The addition of Casepoint’s data discovery technology and Thoma Bravo’s impressive software and operational expertise will help us meet this demand and accelerate our expansion in the GovTech market, as well as expand our coverage of enterprise customers.”

“Casepoint and OPEXUS share an ambitious vision to drive sustainable, long-term growth and focus on our customers’ missions,” said Haresh Bhungalia, CEO of Casepoint. “As one firm, we are poised to enhance our offerings, scale our operations, and capture the growing demand for enterprise data software. Vishal, Vipul, and I are very grateful for the strong foundation established by our global team’s dedication to innovation and for the trust placed in us by our valued employees and customers.”

“Today, more than ever, government agencies are in need of modern technology that drives efficiency and improves transparency,” said Carl Press, a Partner at Thoma Bravo. “Both Casepoint and OPEXUS have established themselves as trusted partners to nearly all of the largest federal agencies as well as many state and local governments and regulated commercial businesses. We see immense potential in one combined, comprehensive solution provider and are thrilled to partner with the management teams of both businesses under Howard’s leadership to build a truly special franchise.”

“The combination of OPEXUS and Casepoint will create a unique company with the expanded scale and product suite required to meet the increasingly complex needs of their customers with the ultimate goal of making government and corporate workflow processes more efficient,” said Sam Yules, a Vice President at Thoma Bravo. “We are looking forward to working with their teams to reach their full potential in this next chapter.”

Kirkland & Ellis LLP served as legal advisor to Thoma Bravo. Deutsche Bank Securities Inc. served as financial advisor to Thoma Bravo on its investment in Casepoint. Cooley LLP served as legal advisor to Casepoint, and Baird served as financial advisor. McDermott Will & Emery LLP served as legal advisor to OPEXUS. Comvest Credit Partners and HarbourVest Partners provided debt financing for this transaction.

About OPEXUS

OPEXUS is the leader in FedRAMP-certified government process management software with more than 30 years of experience supporting public institutions. The company brings operational excellence to governments’ middle office so agencies can focus on the critical work of mission delivery. OPEXUS empowers 100,000 government users with exceptional technology experiences and a built-for-government product suite, including solutions for audit, investigations, correspondence, Freedom of Information Act (FOIA) requests, and employee & labor. Located in the heart of Washington, D.C., OPEXUS works with more than 200 public institutions in the US and Canada. For more information, visit opexustech.com.

About Casepoint

Casepoint is the trusted data discovery platform for government agencies and regulated corporations. Leveraging the power of AI and advanced analytics, its end-to-end platform empowers teams to seamlessly collect, preserve, and discover vast amounts of data from diverse sources, enabling secure data-responsive workflows at enterprise scale.

From legal hold and data preservation to cloud collections and eDiscovery, Casepoint streamlines everything from litigation, investigations, and compliance to Congressional Inquiries. With unmatched military-grade security, enterprises can manage their data confidently, enhance efficiency, mitigate risk, and meet reporting and compliance obligations with ease. For more information, visit casepoint.com.

About Thoma Bravo

Thoma Bravo is one of the largest software-focused investors in the world, with over $166bn in assets under management as of September 30, 2024. Through its private equity, growth equity and credit strategies, the firm invests in growth-oriented, innovative companies operating in the software and technology sectors. Leveraging Thoma Bravo’s deep sector knowledge and strategic and operational expertise, the firm collaborates with its portfolio companies to implement operating best practices and drive growth initiatives. Over the past 20+ years, the firm has acquired or invested in more than 500 companies representing approximately $265 bn in enterprise value (including control and non-control investments). The firm has offices in Chicago, Dallas, London, Miami, New York and San Francisco. For more information, visit Thoma Bravo’s website at thomabravo.com. (Source: BUSINESS WIRE)

 

28 Jan 25. Leonardo CEO meets Airbus head to discuss satellite alliance. Leonardo Chief Executive Roberto Cingolani said he had met the head of French peer Airbus on Tuesday to discuss possible alliances in the satellite industry which would allow Europe to better face up to global competition.

“We are working (on a satellite alliance) with Airbus and Thales,” Cingolani said on the sidelines of a conference at the Italian parliament after meeting the Airbus CEO early on Tuesday morning at an airport in Rome.

“It is clear that in such a competitive scenario we need European giants … it’s not something you can do in two months, it really needs a lot of work,” he told Reuters.

Cingolani last summer confirmed ongoing discussions between the Italian aerospace and defence group and France’s Airbus and Thales on space alliances to compete with rivals such as the United States and China.

Leonardo manufactures satellites, orbiting infrastructure and sensors and manages satellite services and propulsion and launching systems. It has two joint-ventures with Thales: Thales Alenia Space and Telespazio.

(Source: Reuters)

 

27 Jan 25. Quantum® Corporation (Nasdaq: QMCO) (“Quantum” or the “Company”), a leader in solutions for AI and unstructured data, today announced of its entry into a Standby Equity Purchase Agreement (the “SEPA”) an investment fund managed by Yorkville Advisors Global, LP (“Yorkville”).

Transaction Summary:

• Access to additional equity capital and liquidity with discount fees of 3% and 4%
• Limited initially to 1.15m shares, remainder requires shareholder approval
• Three years to access full amount with 100% at Company’s discretion
• Covenant relief during the process to reduce its debt

“This strategic financial partnership provides Quantum with the flexibility to support our ongoing operations and accelerate our growth initiatives,” said Jamie Lerner, CEO of Quantum. “We have solidified access to significant capital, which, over time, will be used to strengthen our balance sheet and enable us to focus on executing our vision of revolutionizing data management solutions for the AI industry.”

Mr. Lerner continues, “Quantum has made substantial efforts over the last year to improve our operational and financial health through a combination of revenue and margin improvement plans, financial and organizational restructuring, and cost reduction initiatives. In addition, we have been exploring several strategic alternatives to pay down our currently outstanding debt, which would also help to lower our cost structure, including lowering the interest expense and other fees the Company has incurred. These actions combined with improving our operating free cash flow, strengthen Quantum for its future success.”

The Company’s agreement with Yorkville is initially limited to 19.99% of outstanding shares, or no more than 1,157,139 shares of common stock of the Company under the Purchase Agreement until shareholder approval is obtained. The Company intends to strategically use the SEPA to raise capital as desired, drawing on the available amount based on market conditions and business opportunities. Pursuant to the terms of the SEPA, the Company has the right, but not the obligation, to issue up to $200 m of shares of the Company’s common stock at any time during the three-year period following the execution date of the SEPA, subject to certain customary conditions. There is no obligation to utilize any portion available under the SEPA, and the Company retains control over both timing and volume. The SEPA does not impose any material restrictions on the Company’s operational activities. The per share price Yorkville will pay for the shares will be dependent on the one- or three-day pricing period elected by the Company at a discount of either 3% or 4%, as provided for in the SEPA. The Company expects that any proceeds received from such sales to Yorkville will be used for working capital and general corporate purposes, including the repayment of debt.

The securities described herein have not been registered under the Securities Act of 1933, as amended, and may not be sold in the United States absent registration or an applicable exemption from the registration requirements. A registration statement relating to the resale of the securities to be issued under the SEPA will be filed with the Securities and Exchange Commission and these securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or other jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.

About Quantum

Quantum delivers end-to-end data management solutions designed for the AI era. With over four decades of experience, our data platform has allowed customers to extract the maximum value from their unique, unstructured data. From high-performance ingest that powers AI applications and demanding data-intensive workloads, to massive, durable data lakes to fuel AI models, Quantum delivers the most comprehensive and cost-efficient solutions. Leading organizations in life sciences, government, media and entertainment, research, and industrial technology trust Quantum with their most valuable asset – their data. Quantum is listed on Nasdaq (QMCO).

Quantum and the Quantum logo are registered trademarks of Quantum Corporation and its affiliates in the United States and/or other countries. (Source: BUSINESS WIRE)

 

27 Jan 25. Houlihan Lokey announced the successful placement of a senior secured credit facility to support Agile Defense, LLC’s (Agile) acquisition of IntelliBridge, LLC, both portfolio companies of Enlightenment Capital (Enlightenment). Proceeds from the transaction were used to refinance existing indebtedness, pay transaction-related fees, and effectuate the acquisition. The transaction closed on January 2, 2025.

Founded in 1998, Agile is a leading provider of comprehensive digital transformation, data analytics, and cybersecurity solutions for the Department of Defense and federal civilian sectors. Agile stands at the forefront of innovation, driving advanced capabilities and solutions tailored to the most critical national security and civilian missions. The company’s collaborative and multidisciplinary teams bring creativity and flexibility to developing advanced digital transformation, data analytics, and cyber solutions.

Founded in 2006, IntelliBridge is a pure-play digital transformation business delivering mission-based technology for its customers across the homeland security, federal civilian, law enforcement, and intelligence sectors. Headquartered in McLean, Virginia, with locations and staff nationwide, IntelliBridge makes its customers successful by delivering best-in-class solutions through a combination of deep domain expertise and advanced technology. Known for its customer-first approach and Technology & Innovation Group, IntelliBridge drives impactful results, making it the most trusted partner in achieving mission success.

Through the combination, Agile doubles in size, boasting more than 2,000 highly skilled professionals, and diversifies, supporting an expanding portfolio of defense, national security, and federal civilian missions. IntelliBridge’s dedication to fostering innovation and delivering value aligns with Agile’s commitment to providing its customers with enhanced capabilities and integrated solutions to meet their evolving needs.

Enlightenment, a Washington, D.C.-area-based private investment firm, makes control and strategic, noncontrol investments in middle-market companies in the aerospace, defense, government, and technology sector. The firm partners with businesses that provide vital services, protect critical infrastructure, innovate cyber and data solutions, enhance decision-making capabilities, engineer aerospace and space systems, and safeguard national security.

Houlihan Lokey’s Capital Markets Group served as the exclusive placement agent to Agile, assisting the company in arranging, structuring, and negotiating the financing. The transaction highlights Houlihan Lokey’s ability to leverage its senior relationships with capital providers to deliver favorable outcomes for its clients.

If you would like more information about Houlihan Lokey or have questions regarding the firm’s role in this transaction, please contact one of the team members listed below.

 

27 Jan 25. Airbus sees continued growth in helicopter sales in 2024 Airbus Helicopters logged 455 gross orders (net: 450) in 2024, highlighting a steady market growth with a strong performance this year for its light, light twin-engined, and heavy helicopters. The orders came from 182 customers in 42 countries. The Company delivered 361 helicopters in 2024, resulting in a preliminary 57% share of the civil and parapublic market.

“Airbus Helicopters’ order intake in 2024, with an increase bordering 10 percent in units for the second year in a row, highlights its stable growth in a complex global environment,” said Bruno Even, CEO of Airbus Helicopters. “I would like to thank our customers for continuing to place their trust in Airbus Helicopters in 2024,” he added.

The Super Puma programme performed strongly on both the civil and parapublic and military markets with 58 orders thanks to the German Bundespolizei, the Japan Coast Guard, the Ministry of Defence of the Netherlands, and the Romanian Ministry of National Defence. 2024 saw the launch of a comprehensive upgrade, known as Block 1, for the NH90 as well as the start of flight testing for France’s Special Forces Standard 2 configuration, and the delivery of the first Standard 3 configuration to the Spanish Air Force. The H145 and H145M programme welcomed many new defence and security customers such as the Brunei Air Force, the Belgian Ministry of Defence, the Indonesian Air Force, the Bahraini Police Aviation Command as well as the Irish Ministry of Defence.

“Defence and security is a strategic priority at Airbus Helicopters. We are proud to support our customers with helicopters that enable them to protect and serve their nations as we saw in 2024 with the U.S. National Guard’s Lakota supporting disaster relief efforts after Hurricane Helene and the H135 and NH90 in the flooding in Valencia, Spain. We continue to innovate and expand the mission capabilities that we offer – we integrated Flexrotor into our UAS portfolio, we demonstrated crewed – uncrewed teaming capabilities with the VSR700 and an H130, and we are laying the groundwork for the European Next Generation Rotorcraft through dedicated concept studies,” continued Even.

2024 saw the first flight of Racer and the unique compound helicopter surpassed its 407 KM an hour objective in just seven flights along with the maiden flight of CityAirbus NextGen in Donauwörth. On the civil and parapublic market, the H175 completed its de-icing flight test campaign in Canada and Norway ahead of certification this year and the H160 continued its progressive entry into service around the world with more than 30 helicopters now in service.

“Supporting our customers is essential and our global footprint is a key element to achieving that. We celebrated several milestones in 2024 that attest to that – firstly the 40 years of our facility in Fort Erie, Canada.  This proximity will be important for our landmark contract for the 19 H135s that will be delivered to our first Canadian defence customer. Secondly, we marked fifty years of presence in the UK and inaugurated a brand new facility in Oxford. We will continue to grow our international footprint with the addition of an H125 final assembly line in India in partnership with TATA,” Even continued.

The Company also ramped up the use of sustainable aviation fuel (SAF) for its own development test flights and training flights in Marignane, Albacete, and Donauwörth to nearly 20%, and added the use of SAF at its facility in Oxford, UK.

Airbus’ 2024 full year financial results will be disclosed on 20 February 2025.

 

27 Jan 25. GMB Union has reacted to the completion of Harland and Wolff’s takeover by Spanish firm Navantia, announced today [Monday]

Matt Roberts, GMB National Officer, said:

“Workers across all four yards will breathe a sigh of relief at finally being under stable ownership.

“But at GMB we will remain cautious. Without a steady drum beat of work, these yards will continue to struggle.

“That is what we will keep fighting for – a long-term future for UK sovereign manufacturing.”

 

24 Jan 25. Spain’s Indra to buy Hispasat from Redeia for $679m, El Pais reports. Spanish defence and technology company Indra (IDR.MC) was set to buy satellite operator Hispasat from Redeia (REDE.MC) for 650m euros ($679m) to expand in the space industry, daily newspaper El Pais reported on Friday, citing unnamed sources with knowledge of the situation.

Indra and Redeia are close to a deal and the transaction will be submitted to their respective boards for approval “imminently”, the newspaper said.

Indra is mainly interested in Hispasat’s military unit, according to El Pais. Redeia did not immediately respond to a Reuters request for comment. Indra declined to comment.

Indra, which is 28% owned by the Spanish government, has recently focused on its defence and aerospace businesses to benefit from European countries’ increased military budgets following heightening world tensions. ($1 = 0.9568 euros) (Source: Reuters)

 

23 Jan 25. Moody’s rating agency blames “OneWeb hurts Eutelsat.” Ratings agency Moody’s has again downgraded Eutelsat, and blames its decision on the “disappointing” contribution from Eutelsat’s OneWeb constellation of satellites.

The downgrade, from B2 to Ba3, cites the operational under performance in comparison with Eutelsat’s forecasts for revenues from OneWeb. The report didn’t help Eutelsat’s share price which fell 3.7 per cent on January 21st.

Moody’s said: “This also takes into account Eutelsat’s reduced visibility regarding its ability to return to earnings growth, but also the pressure on its cash flow due to high capital expenditure and the prospect of significant refinancing up to 2027 at a time when borrowing costs are rising significantly”.

However, on the more positive side Eutelsat’s prospects were rated as “stable” which is an improvement on the previous “negative” outlook and adding that it hopes Eutelsat’s operational performance will stabilize in 2026, before a possible turnaround in 2027. (Source: Satnews)

 

21 Jan 25. BNP Paribas Bank: Key debates for satellite sector in 2025. Investment bank BNP Paribas, in a major study of Europe’s media and media-related activity, has also looked at the wider satellite sector. Analyst Sami Kassab said that satellite operators’ shares had a mixed performance in 2024.

That comment might be seen as an understatement

“Incumbent satellite operators (Viasat, Eutelsat, SES, Iridium) have continued to see share price attrition in 2024 as investors doubted that they will be able to maintain let alone drive FCF in the age of mega constellations. New entrants such as AST Space Mobile or Planet Labs have fared much better. Press reports suggest Space X valuation doubled between December 2023 and December 2024,” Kassab suggested. “We note that while investors believe Eutelsat/SES will suffer from competitive pressure in the age of mega-constellations, they have taken a much less sanguine and more favorable view on AST, a seven year old startup in a head-on competition with Starlink in the Direct-to-Device segment.”

After almost a decade of uninterrupted EBITDA decline, the bank expects SES to return to sustainable growth from 2025 onwards as it benefits from the entry into service of its next generation mPower satellite system. The bank also assumes a sustainable return to EBITDA growth for Eutelsat from the second half of calendar year 2025 (FY26) driven by the commercial progress at OneWeb.

Kassab asked, “What impact will the new US administration have on European operators?,” and added: “Another likely key debate is on the impact of the new US administration is likely to have on European satellite operators. IRIS² is a political initiative aimed at ensuring European government communications in space is operated on European satellites. Will the Trump-administration reciprocate and push the US DoD to move away from European spacecrafts? Given the long history of the US DoD using European satellite systems, we think it is unlikely.

Kassab continued, “What impact will Elon Musk as Head of the Department of Government Efficiency have on US space regulation? We believe his role in the current administration increases the chances that the FCC changes regulation on Power Flux Density limits. Changes could result in up to an 8x increase in Starlink capacity and has been a key demand of SpaceX last year. This would mean even more supply of capacity on the US market and in the medium term possibly in other jurisdictions too. This could push prices further down.”

The report added, “Satellite operators have historically operated assets with solid FCF generation and limited volatility. This enabled the industry to sustain high levels of debt (c3x net debt to EBITDA or more). But the industry has changed. Contract length in video is shortening. Structural concerns are high. Competitive pressure is intense. Revenue pressure and high leverage have depressed equity valuations.”

Kassab summarized, “We believe balance sheet risk is now the main driver of share prices, similar to what we witnessed with other structurally challenged highly leveraged industries like yellow pages 10-15 years ago. Management actions that protect the balance sheet (ie Eutelsat disposal of a majority stake in its ground infrastructure) are likely to have a more positive impact on equity valuation than actions that put additional leverage on balance sheets. We note that SES shares are down 46 per cent despite positive EPS consensus revisions. We believe this reflects the stretching of the balance sheet in the context of the Intelsat acquisition.” (Source: Satnews)

 

24 Jan 25. Moog Inc. (NYSE: MOG.A and MOG.B), a worldwide designer, manufacturer and systems integrator of high-performance precision motion and fluid controls and control systems, today reported fiscal first quarter 2025 diluted earnings per share of $1.64 and adjusted diluted earnings per share of $1.78, which includes an out-of-period warranty expense.

“Both pricing and simplification will drive our operating margin expansion this year, while our focus on optimizing our planning and sourcing activities will contribute to our significant cash generation in the back half of the year.”

See the reconciliations of adjusted financial results and free cash flow to reported results included in the financial statements herein for the periods ended December 28, 2024 and December 30, 2023.

(1) Q1 2025 includes 80 basis points for an out-of-period warranty expense.

(2) Q1 2025 includes $0.18 for an out-of-period warranty expense.

Quarter Highlights

• Net sales increased due to growth in aerospace and defense businesses, while sales declined in the Industrial segment, in part due to divestitures.
• Operating margin increased due to benefits of simplification initiatives and improved operations, mostly offset by higher restructuring and other charges. Adjusted operating margin, excluding these charges, expanded across all of our segments.
• Commercial Aircraft operating profit includes an $8m out-of-period warranty expense.
• Diluted earnings per share increased due to the incremental operating profit from higher sales.
• Adjusted diluted earnings per share increased due to the incremental operating profit from both higher sales and margin enhancement across all of our segments.
• Free cash flow use was driven by working capital requirements.
• Bookings of $1.3bn were driven by record orders in Space and Defense and strong orders in Commercial Aircraft.
• Twelve-month backlog remained steady at $2.5 bn, as growth in Space and Defense was offset by declines in Industrial due to the impact of the divestitures and weaker foreign currencies.

“We have delivered a great quarter with strong sales growth, impressive bookings and solid margin enhancement,” said Pat Roche, CEO. “We are delivering value for our customers and are being rewarded with significant program wins. Our operational initiatives will deliver continued margin enhancement and strong free cash flow in the second half of 2025.”

Segment Results

Sales in the first quarter of 2025 increased compared to the first quarter of 2024, driven by defense growth in Space and Defense and in Military Aircraft, and by aftermarket demand in Commercial Aircraft. These increases were partially offset by a sales decline in Industrial. Space and Defense sales increased 8% to $248m, supported by broad-based demand. Military Aircraft sales increased 15% to $213m, driven by the ramp-up of activity on the FLRAA program and new production programs. Commercial Aircraft sales increased 14% to $221m, reflecting strong repair activity and initial provisioning of spares. Industrial sales decreased 7% to $228m, half due to the lost sales associated with our portfolio shaping activities.

Operating margin increased 10 basis points to 11.1% in the first quarter of 2025 compared to the first quarter of 2024. Space and Defense operating margin increased 50 basis points to 11.5% due to sales growth, partially offset by investments to prepare for upcoming major programs. Military Aircraft operating margin increased 20 basis points to 10.7%, driven by increased activity on the FLRAA program and lower research and development expenses, partially offset by an unfavorable sales mix. Commercial Aircraft operating margin increased 40 basis points to 11.0%, driven by higher levels of aftermarket sales, offset by a 340 basis-point out-of-period warranty expense. Excluding this warranty expense, Commercial Aircraft operating margin would have been 14.4% in the first quarter of 2025. Industrial operating margin decreased 60 basis points to 11.2%, due to restructuring and other charges.

Adjusted operating margin excludes $6 m and $2 m in restructuring and other charges in the first quarter of 2025 and 2024, respectively. Industrial adjusted operating margin increased 60 basis points to 13.2% in the first quarter of 2025 compared to the first quarter of 2024, driven by simplification initiatives.

Free Cash Flow Results

Free cash flow in the first quarter was a use of cash of $165m driven by working capital requirements. Physical inventories grew to support future sales growth. In addition, free cash flow was negatively impacted by the timing of collections and compensation payments.

2025 Financial Guidance

“Fiscal year 2025 is shaping up to be another strong year, with growth in sales, continued operating margin expansion and enhanced free cash flow generation,” said Jennifer Walter, CFO. “Both pricing and simplification will drive our operating margin expansion this year, while our focus on optimizing our planning and sourcing activities will contribute to our significant cash generation in the back half of the year.” (Source: BUSINESS WIRE)

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SPX CommTech, part of SPX Technologies Inc, innovates specialised technologies within the Radio Frequency (RF) spectrum to ensure a smarter, more secure future for all. Formed by TCI and ECS, SPX CommTech’s Battlespace portfolio enables defence and security teams to detect, defeat and exploit RF signals to enhance communications intelligence (COMINT) and counter unmanned aerial systems (Counter-UAS). Additionally, its Tactical Data Link portfolio allows intelligence gathering agencies, special forces, emergency response, and security teams to securely and reliably transfer video and data between enabled-aircraft and ground teams over long distances for airborne Intelligence, Surveillance, Reconnaissance (ISR).

For more information visit www.tcibr.com and www.enterprisecontrol.co.uk

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