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07 Feb 25. Investors are growing increasingly concerned about the finances of two of Europe’s largest satellite operators as the rapid rise of Elon Musk’s Starlink deepens the pressure on the continent’s ailing incumbents. The cost of buying insurance against France’s Eutelsat and SES of Luxembourg defaulting on their bonds has soared to record highs, as investors fear the two will struggle to repay their debts, which together amount to about €7bn. Legacy satellite operators have struggled to adapt to the rise of new communication services from low Earth orbit, as their traditional, higher- orbit broadcasting businesses decline. In just five years Musk has expanded Starlink to more than 6,000 satellites, more than 60 per cent of the spacecraft in orbit, serving some 130 countries. His company is also increasingly taking market share in the lucrative market for in-flight connectivity with airlines, including beating Eutelsat to win a contract with Air France. Pressure on Eutelsat and SES is expected to intensify when Amazon’s Project Kuiper launches its broadband satellite service, expected later this year. “Europe’s incumbents are in danger of being left behind,” said one high-yield credit investor who has recently sold out of Eutelsat’s bonds, citing Starlink’s technological advances. Musk’s relentless expansion of Starlink, alongside with the European duo’s sluggish response to the new low Earth orbit challenge, have driven down their share prices to record lows. In response to the emerging competition, Eutelsat and SES have sought to consolidate, with Eutelsat snapping up the UK’s OneWeb in 2022 and SES buying Intelsat for $3.1bn last year. Credit investors have bought credit default swaps, derivatives that act like insurance contracts that pay out if a company reneges on its debts. Spreads on five-year CDS on Eutelsat, which has debts of almost €2bn, have climbed more than 800 basis points to 1,220bp in the past six months. That implies that investors now give Eutelsat a 65 per cent chance of defaulting on its bonds. The equivalent CDS spreads for SES, which has about €5bn worth of debt made up mostly of euro-denominated bonds, has also hit an all-time high in recent weeks. On Thursday it touched 309bp compared with 100bp at the start of 2024, giving it a probability of default of 22 per cent. Eutelsat said its low Earth orbit product “is a highly competitive global offering” and said it was “uniquely positioned” in the market. SES did not respond to a request for comment. (Source: FT.com)

 

07 Feb 25. Unusual Machines to Acquire Aloft Technologies for $14.5m. Unusual Machines has announced the signing of a binding agreement to acquire of Aloft Technologies, Inc., an FAA-approved provider of unmanned aerial system (UAS) services to enterprise, public safety, and government customers. The acquisition is almost all in stock, valued at $14.5m. The proposed acquisition brings together companies that share commitment to strengthening the U.S. drone industry. Aloft Technologies has long been recognized as the leader in the drone fleet and airspace management sector, powering more than 70% of all FAA-approved Low Altitude Authorization and Notification Capability (LAANC) airspace authorizations in the United States. Aloft has provided more than more than 1.6 million authorizations in total, with 400,000 authorizations provided in 2024. Aloft has been able to leverage the data collected through millions of safe flights and airspace interactions to launch Air Boss, their new real-time UAS air traffic management (UTM) software. With the FAA forecasting more than 3 million drones in the airspace by 2028, outnumbering traditional aircraft more than 10-to-1, the coordination and integration of all aircraft is critical to national security and the national economy. The closing of the acquisition is contingent on satisfaction of customary closing conditions by the parties including Aloft obtaining stockholder approval, the delivery by Aloft of its audited financials acceptable to Unusual Machines, the receipt of certain third party consents and the holders of no more than 10% of Aloft common stock have asserted appraisal rights.

“With the transition away from China, we need to care as much about our drone data as we do our drone parts. Aloft is the market leader and the answer to how we provide American software to complement our hardware,” said Allan Evans, CEO of Unusual Machines. “Air Boss is the culmination of their years of work in fleet and airspace management. It will unlock airspace collaboration between governments, business, and consumers in a way that could prevent the confusion of what happened in New Jersey from ever being an issue again.”

“Aloft’s mission has always been to enable flight through better technology and data-driven insights,” said Jonathan Hegranes, CEO and Co-Founder of Aloft. “Joining Unusual Machines will accelerate our ability to achieve this mission at a larger scale while continuing to prioritize cybersecurity and American-made software solutions.”

The acquisition is expected to close in the coming months, with both companies working closely to ensure a seamless transition for customers and stakeholders.

About Aloft Technologies: Founded by Jon Hegranes and Joshua Ziering in 2015, Aloft Technologies is the leading provider of drone airspace and fleet management solutions in the United States. Powering millions of safe flights through its proprietary software, Aloft is trusted and beloved by government, public safety, enterprise, and recreational pilots alike. Aloft’s focus on cybersecurity, data intelligence, and American-made software has positioned it as a critical player in the evolving drone ecosystem.

About Unusual Machines: Unusual Machines manufactures and sells drone components and drones across a diversified brand portfolio, which includes Fat Shark, the leader in FPV (first-person view) ultra-low latency video goggles for drone pilots. The Company also retails small, acrobatic FPV drones and equipment directly to consumers through the curated Rotor Riot e-commerce store. With a changing regulatory environment, Unusual Machines seeks to be a dominant Tier-1 parts supplier to the fast-growing multi-billion-dollar U.S. drone industry. According to Fact.MR, the global drone accessories market is currently valued at $17.5 billion and is set to top $115 billion by 2032. (Source: UAS VISION)

 

06 Feb 25.  COPT Defense Properties (“COPT Defense” or the “Company”) (NYSE: CDP) announced results for the fourth quarter and full year ended December 31, 2024.

Management Comments

Stephen E. Budorick, COPT Defense’s President & Chief Executive Officer, commented, “Our Defense/IT investment strategy, which concentrates our portfolio near priority U.S. defense installations, continued to generate excellent results in 2024. The success of our differentiated strategy is evident in our occupancy rate of 93.6%, which is roughly 700 basis points higher than the Office sector, while occupancy in our Defense/IT Portfolio is even higher at 95.6%. We generated FFO per share growth of 6.2%, our second highest annual growth rate since 2015, which was driven by record performance in our Same Property portfolio, placing highly leased developments into service, and achieving our highest tenant retention rate in over 20 years of 86%.

We achieved a milestone in 2024 as we executed on our first acquisitions since 2015. We leveraged our investment-grade rated balance sheet to execute on several strategic and opportunistic investments, which serve to strengthen our relationship with the U.S. Government and top defense contractors, and will be accretive to shareholder value. The operating assets were acquired at significant discounts to replacement cost and provide strong going-in cash yields, while the development land provides an opportunity to expand our data center shell portfolio over the medium to long term.

We have generated FFO per share growth in each of the past six years, which amounts to a compound annual growth rate of 4.8% between 2019 to 2024. Looking forward, our guidance implies continued growth in 2025, with FFO per share growth of 3.5% at the midpoint, generated by continued strong performance of our portfolio.”

Financial Highlights

4th Quarter Financial Results:

> Diluted earnings per share (“EPS”) was $0.31 for the quarter ended December 31, 2024, compared to $0.30 for the quarter ended December 31, 2023.

> Diluted funds from operations per share (“FFOPS”), as calculated in accordance with Nareit’s definition was $0.64 for the quarter ended December 31, 2024, compared to $0.62 for the quarter ended December 31, 2023.

> FFOPS, as adjusted for comparability, was $0.65 for the quarter ended December 31, 2024, compared to $0.62 for the quarter ended December 31, 2023.

Full Year 2024 Financial Results:

> EPS for the year ended December 31, 2024 was $1.23 as compared to $(0.67) for 2023.

> Per Nareit’s definition, FFOPS for 2024 was $2.57 as compared to $2.41 for 2023.

> FFOPS, as adjusted for comparability, for 2024 was $2.57 as compared to $2.42 for 2023.

Operating Performance Highlights

Operating Portfolio Summary:

> At December 31, 2024, the Company’s 24.5 m square foot total portfolio was 93.6% occupied and 95.1% leased, which includes the 22.4 m square foot Defense/IT Portfolio that was 95.6% occupied and 96.8% leased.

> During the quarter and year ended December 31, 2024, the Company placed into service 225,000 and 399,000 square feet, respectively, of developments that were 100% and 83% leased, respectively, as of year end.

Same Property Performance:

> At December 31, 2024, the Company’s 22.2 m square foot Same Property portfolio was 94.1% occupied and 95.4% leased.

> The Company’s Same Property cash NOI increased 10.0% and 9.1% for the three months and year ended December 31, 2024, respectively, compared to the same periods in 2023.

Leasing:

> Total Square Feet Leased: For the quarter ended December 31, 2024, the Company leased 709,000 square feet, including 561,000 square feet of renewals, 114,000 square feet of vacancy leasing, and 34,000 square feet of investment leasing. For the year ended December 31, 2024, the Company executed 3.2 m square feet of total leasing, including 2.6 m square feet of renewals, 500,000 square feet of vacancy leasing, and 124,000 square feet of investment leasing.

> Tenant Retention Rates: During the quarter and year ended December 31, 2024, the Company renewed 93.0% and 86.0%, respectively, of expiring square feet in its total portfolio and renewed 95.9% and 88.6%, respectively, of expiring square feet in its Defense/IT Portfolio.

> Rent Spreads and Average Escalations on Renewing Leases: For the quarter and year ended December 31, 2024, straight-line rents on renewals increased 5.5% and 8.6%, respectively, and cash rents on renewed space decreased 0.2% and increased 0.6%, respectively, while annual escalations on renewing leases averaged 2.7% and 2.4%, respectively.

> Lease Terms: In the quarter ended December 31, 2024, lease terms averaged 3.5 years on renewing leases, 7.4 years on vacancy leasing, and 5.9 years on investment leasing. For the year ended December 31, 2024, lease terms averaged 3.9 years on renewing leases, 7.7 years on vacancy leasing, and 8.2 years on investment leasing.

Investment Activity Highlights

> Development Pipeline: The Company’s development pipeline consists of four properties totaling 606,000 square feet that were 75% leased as of December 31, 2024. These projects represent a total estimated investment of $252.9 m, of which $67.4 m was spent.

Balance Sheet and Capital Transaction Highlights

> For the quarter ended December 31, 2024, the Company’s adjusted EBITDA fixed charge coverage ratio was 4.7x.

> At December 31, 2024, the Company’s net debt to in-place adjusted EBITDA ratio was 6.0x and its net debt adjusted for fully-leased investment properties to in-place adjusted EBITDA ratio was 5.9x.

> At December 31, 2024, and including the effect of interest rate swaps, the Company’s weighted average effective interest rate on its consolidated debt portfolio was 3.3% with a weighted average maturity of 4.7 years, and 100% of the Company’s debt was subject to fixed interest rates. (Source: BUSINESS WIRE)

 

06 Feb 25. Applied Intuition acquires AI software firm EpiSci. Software company Applied Intuition announced Thursday it acquired Silicon Valley autonomy firm EpiSci, whose technology has supported a slew of Pentagon programs aimed at integrating AI with military platforms. The move positions Applied, which has until now focused largely on dual-use autonomous technology for land systems, to expand its portfolio into other domains.

“We’ve done a lot of on-the-ground, land autonomy,” Applied’s CEO Qasar Younis told Defense News. “And we thought one area we could augment its portfolio is in other domains — in the air and on the sea … and space as well.”

EpiSci, founded in 2012, builds AI software for a number of defense applications, including surface warfare, maritime tracking, space-based missile tracking satellites and uncrewed aircraft. Last year, the Air Force used the company’s software to stage the first-ever dogfights between an F-16 and an experimental fighter jet, the X-62A VISTA.

Meanwhile, Applied has developed a suite of simulation, validation and data management software. The firm’s technology is used by a range of industries — from automotive, trucking and agriculture to defense. In 2022, the Army and the Defense Innovation Unit selected the firm to provide a platform to develop and test autonomous software for the Robotic Combat Vehicle program.

And last month, the Pentagon’s Chief Digital and AI Office awarded the company a production contract worth up to $171 million for its software development and testing platform.

Jason Brown, general manager of Applied’s defense business, said the Defense Department’s focus on uncrewed systems — specifically through the Replicator initiative to field thousands of low-cost expendable drones — is driving significant growth in the autonomy market. That growth means more opportunities not only for drone manufacturing firms, but for companies like Applied and EpiSci, that can equip both new and legacy systems with autonomy software.

“We want to be a part of that,” Brown said in the same interview with Younis. “This is potentially retrofitting a lot of existing legacy systems. This is a big market that is about to explode. We’re going to be able to take advantage of all of it.”

(Source: Defense News)

 

06 Feb 25. Honeywell International has announced plans to break up, heralding the end of one of America’s last big industrial conglomerates and handing a victory to US activist investor Elliott Management. The company, which makes everything from aeroplane engines to warehouse robots and has a market valuation of $145bn, said on Thursday it would spin off its aerospace division from its automation business and progress plans to separate its advanced-materials operations.   Honeywell shares reversed pre-market gains on Thursday after the company separately announced a worse than expected outlook for the year. Shares in the company were down 5.6 per cent at $209.82. Vimal Kapur, chief executive of the 119-year-old conglomerate since June 2023, said the decision was the culmination of a comprehensive review of the businesses, one that would “unlock significant value for shareholders and customers”. Kapur said it had become clear during the review process that the strategies for the automotive and aerospace businesses were “diverging”. While aerospace required attention on capacity expansion, supply chain changes electrification, the automotive business needed to focus on AI, digital transformation and energy security, he told investors.

“We are aiming here for higher value by earnings growth and by delivering a more compelling proposition,” Kapur added. Honeywell had been on a dealmaking spree under Kapur, signing off on more than $9bn worth of acquisitions last year. It had also shed assets that were not focused on three “megatrends” identified by Kapur: automation, aviation and the transition to green energy. The group had already announced plans to spin off its advanced materials division in October. The decision to split into three is nevertheless a victory for Elliott, which had called on Honeywell to end its conglomerate structure and split itself into two. Shares in the company had been underperforming the broader market and it emerged in November that the activist investor had taken a $5bn stake in Honeywell. It argued that the group should follow the examples of General Electric, 3M and Johnson Controls, which had split into separate businesses, unlocking value for shareholders. Honeywell subsequently announced in December that it was exploring a spin-off of its aerospace business, adding that it was also “evaluating more transformational changes”.   Elliott welcomed the announcement on Thursday, saying that the separation would lead to “enhanced focus, alignment and strategic agility”, and would allow Honeywell to improve its operations and achieve a better valuation for the businesses. The company’s high-margin aerospace business, which counts Boeing and Airbus among its customers and generated $15bn in revenues in 2024, makes up 40 per cent of the group’s annual revenues but has traded at a discount to pure aerospace competitors such as TransDigm.  Analysts have pointed to the re-rating of GE’s aerospace business since it listed as a standalone company. Honeywell, which employs some 95,000 people, said the separation of the aerospace and automation businesses should be completed by the second half of 2026 and would not result in a tax bill for its shareholders. It has yet to announce who will lead the different businesses or whether any will be led by Kapur. The company’s automation business reported revenues of $18bn last year. The smaller advanced materials division notched up about $4bn in revenues. Honeywell’s break-up will cap an eventful two decades during which it twice held merger talks with another former conglomerate, United Technologies. A bid by General Electric to take over Honeywell in 2001 was blocked by the European Commission on competition grounds. Honeywell on Thursday separately forecast adjusted earnings of $10.10 to $10.50 a share for 2025, up 2 per cent to 6 per cent, but falling short of analyst estimates. Its organic sales growth and free cash flow guidance also missed expectations. (Source: FT.com)

 

07 Feb 25. Patria Group’s Financial Review for 2024 – preliminary data

Patria’s growth continued in 2024: net sales grew significantly and order stock developed strongly

Financial review of 2024

• Patria Group’s operating profit was EUR 81.8m (EUR 68.9m) and net sales EUR 825.7m (EUR 733.8m).
• Value of new orders received was EUR 1,258.2m (EUR 948.4m).
• Equity ratio was 33.9% (40.0%) and net gearing 104.3% (67.5%).
• Equity ratio and net gearing were affected by investments in production capacity as well as net working capital tied up in the production ramp-up.
• Patria’s growth continued in 2024. Patria’s net sales grew and order stock developed strongly driven especially by vehicle programmes. Profitability was at the expected level.
• A major part of operational focus has been on building production capacity for the new vehicle orders as well as developing and enhancing productivity of internal operating model. Production growth was impacted by some ramp-up phase hick-ups during the year, but the performance improved towards the year-end.
• Millog and Nammo performed in line with the expectations.

Highlights of 2024

• The development of customer-centricity, operational efficiency and productivity and joint ways of working continued in 2024, according to Patria’s Horizon 2025 strategy.
• Patria’s renewed operating model came into force in the beginning of 2024.The focus of the development has been on Patria’s Operations unit, responsible for company’s production and supply chains, and Portfolio unit, responsible for Patria’s products and services and their development.
• Patria’s success in 6×6 and 8×8 vehicle programmes has continued, which supports the development of other business operations and Group’s internationalization. By the end of the year, Patria had received orders for over 800 Patria 6×6 vehicles through Common Armoured Vehicle System (CAVS) programme, led by Finland and joined by Latvia, Sweden and Germany.
• In January 2024, the strategic partnership agreement between Patria and the Finnish Defence Forces was updated.
• Announced also in January, the Finnish Defence Forces purchased 40 Patria 6×6 armoured vehicles more by redeeming the additional purchase option as part of CAVS agreement.
• Patria published two agreements in February 2024 on supplying Patria ARIS electronic intelligence systems (ELINT) to European NATO member countries.
• Kicked off in early 2024, Patria-led eALLIANCE programme, partly funded by Business Finland, will amplify collaboration with the Finnish civilian and defence sector companies. The aim is to develop disruptive digital capabilities for enhanced data sharing and prosessing as well as building a holistic metaverse.
• In February Patria, DSL (part of KNDS group) and FFG announced that they are teaming up to offer the German design, production, and sustainment of variants of Patria’s 6×6 armoured personnel carrier, which could replace the German FUCHS-fleet.
• In March the Swedish Defence Procurement Agency (FMV) signed a contract to buy 321 Patria 6×6 vehicles.
• In March Patria signed a contract with Kongsberg Defence & Aerospace (‘Kongsberg’) for the delivery of PROTECTOR remote weapon stations to more than 300 Sweden’s and Finland’s Patria 6×6 vehicles within the CAVS programme.
• It was announced in March that Patria and Lockheed Martin signed their second Memorandum of Agreement (MoA) for direct work within Finland´s F-35 industrial participation programme. This MoA provides the contractual framework for the stand-up and qualification of a landing gear doors production line at Patria’s Halli facility in Jämsä, Finland.
• Change negotiations were held in Patria’s Pilot Training operations during the second quarter on the possible termination of the function during 2025. Alternatively, efforts were being made to find an external successor for the business or part of it. The plan will not have an impact on Patria’s military pilot training activities.
• Patria’s Valmiera armoured vehicle production facility was opened in May. This marked the start of full-cycle production of Patria 6×6 armoured vehicles in Latvia.
• It was announced in May that Germany proceeded to the research and development agreement phase of the CAVS programme.
• In June, it was announced that Patria and Pratt & Whitney, an RTX business, signed a Memorandum of Agreement (MoA) that covers the contractual framework for Pratt & Whitney F135 engine production and sustainment projects in Finland by Patria.
• Patria signed in June a bill of sale for the acquisition of the entire share capital of Nordic Drones Oy (‘Nordic Drones’), a Finnish leading drone pilot trainer and manufacturer of drones designed for professional use.
• In June at Eurosatory in Paris, All Terrain Vehicle (ATV) concept vehicle developed within European Future Highly Mobile Augmented Armoured Systems (FAMOUS) programme was revealed in Patria’s stand.
• In August, Patria, Finland and Latvia signed a Life Cycle Management (LCM) contract related to the CAVS programme.
• In September, Patria announced that it acquired an open-source data collection product and business related to its cyber business area from WithSecure. As a result of the transaction, Patria has opened an office in Oulu, Finland.
• In September, the Finnish Defence Forces redeemed the last 29 Patria 6×6 vehicles that were part of the additional procurement reservation, which were already included in the previously signed series agreement as part of the CAVS programme.
• Patria launched Patria TREMOS in October, the robust and cost-effective mortar system that increases the mobility and accuracy of trusted, traditional high firepower mortars. The Finnish Defence Forces acquired a modular 120 mm mortar system from Patria. The procurement involves a pre-series of the new mortar system, set for delivery in 2025.
• In November, Patria and Latvia agreed on the manufacturing and delivery of 56 additional armoured Patria 6×6 vehicles, on top of the already ongoing deliveries as part of joint CAVS programme.

Events after the period

• In early January 2025 it was announced that Patria had signed an agreement with Airways Aviation Group (‘Airways Aviation’) on them acquiring the entire share capital of its subsidiary Patria Pilot Training Oy (‘Patria’s Pilot Training’). As of 1 February, 2025, all employees, operations and ongoing training courses of Patria’s Pilot Training were transferred to Airways Aviation.
• Announced on 21 January, Patria will deliver an operational border security information system to the Finnish Border Guard together with Solita.
• Announced on 22 January, Patria and Babcock had agreed partnership on 6×6 vehicle for the UK armed forces.
• It was announced on 29 January that Patria acquires the 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 standard of digital services.
• On 30 January it was announced that Germany took final step to full member of CAVS programme.
• Related to this, on 31 January it was announced that Germany and Patria had signed work package for CAVS Patria 6×6 programme-related mortar variants development.

Operational focus areas for 2025

Patria continues to strengthen its operational efficiency and productivity and seeks profitable growth in line with its Horizon 2025 strategy in the fourth year of the strategy period. Patria’s reliable and cost-effective lifecycle support services and top-notch products have a key role also in the future in maintaining required performance of customer fleets in all conditions. The development of digitalization of lifecycle support services will be strengthened in 2025

Following Finland’s decision in December 2021 to acquire F-35 fighter jets, negotiations concerning industrial participation of the selected aircraft will continue also in 2024. Preparations to kick off production in 2026 are under way, the resourcing needs are being analysed and the relevant recruiting has commenced.

The multinational joint CAVS programme of the Patria 6×6 vehicle is proceeding as planned. The deliveries of Latvian, Finnish and Swedish vehicles are ongoing and the vehicles are in operational use. Also Germany is a full member of the programme. The development of production capacity for new vehicle orders will continue in 2025. The joint programme has raised interest and is open also for other countries to join by mutual consent of the participating countries.

In 2023, Patria and Japan Steel Works Ltd. signed a relating license agreement on manufacturing Patria AMV XP 8×8 vehicles in Japan and the preparations for kicking off manufacturing are ongoing. The start of serial production of Japan’s and Slovakia’s 8×8 vehicle projects has been slower than expected, which may affect the outlook for the rest of the year.

Outlook for 2025

Patria expects continued growth in 2025 which is supported by strong order stock. Majority of the growth is expected to come from vehicle business, but the outlook for other business areas is also positive.

 

06 Feb 25. Saab year-end report 2024: Making steady progress on our profitable growth journey. Saab presents the full-year results for 2024.

“I am pleased to report that Saab ended 2024 in a strong way. We delivered a better-than-expected organic sales growth, improved our operational performance and generated a positive cash flow. We achieved all this while investing significantly in expansion to meet higher customer demand and strengthening our market position.  In the wake of the global geopolitical uncertainty, Saab is committed to being a reliable partner, supporting countries in building their defence capabilities and contributing to increased European defence capacity,” says Micael Johansson, President and CEO, Saab.

Key highlights Q4 2024

• Order bookings for the fourth quarter amounted to SEK 17,556m (31,501), driven by small and medium-sized orders, resulting in an order backlog amounting to SEK 187bn (153).
• Sales in the quarter amounted to SEK 20,850m (16,122) with an organic growth of 29%, driven by all business areas.
• Sales and sales growth for the quarter and the full year was in line with the Q4 update provided on January 17, 2025.
• EBITDA increased to SEK 2,734m (2,032) with an EBITDA margin of 13.1% (12.6) in the quarter.
• EBIT increased 38% and amounted to SEK 1,953m (1,420), corresponding to a margin of 9.4% (8.8).
• Net income increased to SEK 1,442m (1,254) and earnings per share amounted to SEK 2.66 (2.27), an increase of 17%.
• Operational cash flow amounted to SEK 3,558m (3,691) and was driven by large customer payments in the quarter.
• Net liquidity position at the end of the period was SEK 2,211m compared to SEK 2,343m at year-end 2023.
• The Board proposes a dividend for 2024 of SEK 2.00 (1.60).
• Outlook for 2025: an organic sales growth between 12-16%, an EBIT growth higher than the organic sales growth and a positive operational cash flow.
• Updated medium-term targets 2023-2027: an organic sales growth of around 18% (CAGR), an EBIT growth higher than the organic sales growth and a cumulative cash conversion of minimum 60%.

 

05 Feb 25. Embraer reached an all-time US$ 26.3bn backlog record in the last quarter of 2024.

• The company wide backlog value expanded 40%+ year-on-year in 4Q24
•  Commercial Aviation finished 2024 with a US$10.2bn backlog (15% year-on-year) and a strong 1.6x book-to-bill ratio
• Executive Jets recorded a new US$7.4bn all-time high backlog (65%+ quarter-on-quarter) supported by a marquee deal with Flexjet
• Services & Support posted a new all-time high US$4.6bn backlog during the quarter, up 50%+ compared to 4Q23
• Defense & Security registered a 67% year-on-year backlog increase to US$4.2bn, with a record share from global clients

Embraer (NYSE: ERJ / B3: EMBR3), one of the global leaders in the aerospace industry, reports that its organization-wide backlog reached US$26.3bn in 4Q24. The value is the largest ever recorded by the company in its history, and more than 40% higher year-on-year and 16% higher quarter-on-quarter. Embraer finished 2024 with an industry leading 2.2 book-to-bill ratio based on financial values1.

Embraer delivered 75 aircraft in the last quarter of the year, 27% more than the 59 aircraft in the previous quarter (3Q24), and equal to the number in the same period a year ago (4Q23). Meanwhile, the company delivered a total of 206 aircraft in 2024 – a 14% increase compared to the 181 aircraft in 2023.

1 Calculated as the (delta in Embraer backlog plus Embraer revenues) divided by Embraer revenues.

In Commercial Aviation, the backlog reached US$10.2bn in 4Q24 – 15% higher year-on-year but 8% lower quarter-on-quarter – because of the seasonally strong period of aircraft deliveries. The business unit delivered 31 new aircraft in the last quarter of 2024 and 73 in the full year (at the ceiling of revised estimates of 70-73 for the year and within the original estimates of 72-80). Consequently, Commercial Aviation finished 2024 with a strong 1.6 book-to-bill ratio based on financial values2.

Luxair formalized an order for 2 E195-E2s, which will complement the airline’s fleet of larger aircraft already requested. By exercising 2 secured options on its 2023 firm order for 4 aircraft, Luxair now has a total of 6 E195-E2 jets requested. Thus, Embraer currently has 179 firm orders for the E2 Jets family and 164 for the E1-175 Jet aircraft.

Finally, it is important to highlight the company’s production leveling initiative, which the company wants to make progress in 2025.

2 Calculated as the (delta in Com. Av. backlog plus Com. Av. revenues) divided by Com. Av. revenues.

In Executive Aviation, the backlog soared to US$ 7.4bn in 4Q24 – 70% higher year-on-year and 67% higher quarter-on-quarter – and a new all-time high for the business unit supported by a marquee contract with Flexjet. The deal includes 182 firm orders for Phenom 300E, Praetor 500, and Praetor 600 aircraft with deliveries from 2026 to 2030, and up to 30 additional Praetor options.

The division delivered 44 jets in the last quarter of 2024, and a total of 130 for the year (at the midpoint of the original guidance for 2024, and a 14-year high). Consequently, Executive Aviation finished 2024 with an industry leading 2.7 book-to-bill ratio based on financial values3.

The mid and super-mid-sized Praetor 500 and Praetor 600 represented half of the segment deliveries (22 jets) during the quarter, supported by the solid thrust forward of the aircraft family. Meanwhile, the Phenom 300, the best-selling aircraft in its category for 12 consecutive years worldwide, was the top performer (19 jets) over the period.

It is important to highlight the progress observed in the company’s production leveling initiative in 2024. Management managed to reduce how deliveries were skewed towards Q4 and better distribute them throughout the quarters. In 2024, Q4 deliveries accounted for 34% of the yearly total while that number was 45% on average for the previous five years. The company achieved significant results during the year and expects additional gains supported by supply chain improvements in the near future.

3 Calculated as the (delta in Exec. Av. backlog plus Exec. Av. revenues) divided by Exec. Av. revenues.

In Services & Support, the backlog rose to US$4.6bn in 4Q24 – 50% higher year-on-year and more than 30% higher quarter-on-quarter – propped by long-term contracts with Flexjet in Executive Aviation, and Air Serbia, LOT Polish Airlines and CommuteAir in Commercial Aviation. These contracts for the latter group are for the Pool and Part Exchange Plus Programs whose objectives are to support these companies’ fleet of E-Jets with a wide range of repair components, services and customized inventory. Additionally, contributions from spares/exchange parts, technical publications, technical services, training, and modifications have played a key role in this result. Services & Support finished 2024 with an industry leading 1.9 book-to-bill ratio based on financial values4.

In Defense & Security, the backlog climbed to US$4.2bn in 4Q24 – 67% higher year-on-year and 15% higher quarter-on-quarter – supported by new orders for the C-390 Millennium (4) and the A-29 Super Tucano (10). Embraer currently has 32 firm orders for our military transport and 17 for our light attack aircraft. Meanwhile, Defense & Security continued to ramp up production with the delivery of 3 new C-390 Millennium jets in 2024 versus 2 in 2023. Consequently, the business unit finished 2024 with an industry leading 3.3 book-to-bill ratio based on financial values5.

The division signed firm contracts in the last quarter of 2024 with the Czech Ministry of Defense and an undisclosed client for 2 C-390 Millennium aircraft each – these aircraft entered the backlog. Moreover, this military transport plane was selected by Slovakia (3) and Sweden (undisclosed) during the period – no contracts were signed yet and thus not recorded in the backlog.

The business unit also signed a firm contract with an undisclosed client for 6 A-29 Super Tucano aircraft in the last quarter of 2024, and another with an undisclosed client from Africa for 4 additional planes. Meanwhile, the Portuguese Air Force became the launch customer for the NATO version of the light attack aircraft (12) – but its contract was not effective at the end of 2024 – and the Uruguayan Air Force firmed their options (5) in early 2025. Therefore, these 17 aircraft were not recorded in the backlog yet.

 

06 Feb 25. Avibras in talks with Saudi firm as it seeks financial recovery.  Brazilian missiles and rockets specialist Avibras Indústria Aeroespacial is working on a new deal for its financial recovery. On 31 January the company announced that it is in advanced discussions with Black Storm Military Industries of the Kingdom of Saudi Arabia (KSA) to facilitate a potential investment aimed at the financial recovery of Avibras. The terms and conditions of the investment are being finalised, according to Avibras. This partnership aims to maintain Avibras’ manufacturing facilities in Brazil, enabling them to resume operations as soon as possible, and ensuring the fulfilment of the company’s obligations with the Brazilian government and other clients, its creditors, and its workforce, the company said. Avibras declined to comment further, citing a non-disclosure agreement, the company told Janes on 4 February. Little is known about Black Storm. The company’s website said it is active in the defence, environment, energy, and industrial solutions markets. In 2024 Avibras held talks with Australian company DefendTex and a national investor, but no deal was reached. Chinese state-owned defence conglomerate China North Industries Corporation (Norinco) has reportedly submitted a proposal to Brazilian authorities to acquire a 49% stake in Avibras. The financial situation of Avibras remains a concern for the Brazilian Army as the company is jointly developing the MTC-300 (Míssil Tático de Cruzeiro) tactical cruise missile with the Army Technological Centre for the Avibras Astros II Mk 3M and Mk 6 multiple launch rocket systems (MLRSs) of Army Artillery Command. The missile has a maximum range of 300 km. (Source: Janes)

 

05 Feb 25. TCFIII Spaceco Holdings LLC (d/b/a) Karman Space and Defense (“Karman” or the “Company”), a company specializing in the upfront design, testing, manufacturing, and sale of mission-critical systems for existing and emerging missile and defense, and space programs, today announced the commencement of its initial public offering of 21,052,632 shares of its common stock (the “Common Stock”). The offering consists of 8,421,053 shares of Common Stock being offered by Karman and 12,631,579 shares of Common Stock being offered by certain selling stockholders. The selling stockholders also expect to grant the underwriters a 30-day option to purchase up to an additional 3,157,894 shares (solely to cover over-allotments, if any) of Common Stock at the initial public offering price, less underwriting discounts and commissions. Karman will not receive any proceeds from any sale of shares by the selling stockholders.

The initial public offering price is expected to be between $18.00 and $20.00 per share. Karman currently intends to use the net proceeds it receives from this offering, together with its existing cash, cash equivalents and short-term investments, for general corporate purposes, including additional development efforts, working capital and operating expenses.

Karman has applied to list its Common Stock on the New York Stock Exchange under the ticker symbol “KRMN.”

Citigroup and Evercore ISI are acting as book-running managers for the proposed offering and as representatives of the underwriters for the proposed offering. RBC Capital Markets and William Blair are acting as joint bookrunners for the proposed offering. Baird is acting as co-manager for the proposed offering.

The proposed offering will be made only by means of a prospectus. Copies of the preliminary prospectus relating to the proposed offering may be obtained from: Citigroup, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by telephone: (800) 831-9146 and Evercore Group L.L.C., Attention: Equity Capital Markets, 55 East 52nd Street, 35th Floor, New York, New York 10055, by telephone: (888) 474-0200, or by email: .

A registration statement on Form S-1, including a prospectus, relating to the proposed offering of Common Stock has been filed with the U.S. Securities and Exchange Commission but has not yet become effective. Accordingly, the Common Stock 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 a solicitation of an offer to buy the Common Stock, nor shall there be any sale of the Common Stock in any state or 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 jurisdiction.

About Karman

We specialize in the upfront design, testing, manufacturing, and sale of mission-critical systems for existing and emerging missile and defense, and space programs. Our integrated payload protection, propulsion, and interstage system solutions are deployed across a wide variety of existing and emerging programs supporting important Department of Defense and space sector initiatives.  (Source: PR Newswire)

 

05 Feb 25. Standex International Corporation (NYSE:SXI) today announced that it has acquired privately-held, California-based McStarlite Co., a leading provider of complex sheet metal aerospace components, for approximately $56.5m in cash, financed from Standex’s existing revolver. In its first year of ownership, the Company expects the acquisition to be accretive to its earnings. McStarlite Co. will be reported as part of Standex’s Engineering Technologies Group business segment. In calendar year 2024, McStarlite revenue was approximately $33 m with an adjusted EBITDA margin above 20%.

“We are very pleased to have acquired McStarlite, a great strategic fit, expanding our product breadth and forming capabilities in commercial aviation, space and defense applications. Its customer base, product line and technologies are highly complementary to our existing Spincraft business with the potential to capitalize on technical exchanges and cross selling opportunities. McStarlite also brings a strong engineering and customer-focused team that aligns with Standex’s commitment to customer intimacy,” commented President and Chief Executive Officer David Dunbar.

With four facilities in Harbor City, CA, McStarlite is a premier sheet metal specialist in the forming of some of the largest, most complex sheet metal components. It designs and manufactures cold deep draw and bulge-formed aviation components, including segmented and single piece lipskins, nozzles, complex sheet metal assemblies, and tooling to support production hardware. Commenting on the transaction, John Basso, President, Chairman and CEO of McStarlite Co., stated “We are excited to join a global leader that provides a strong foundation for our continued growth. Standex’s ownership offers us the opportunity to leverage a much broader geographical and industry presence, additional engineering expertise, complementary product offerings, and enhanced customer relationships.”

“With today’s announcement, we have strengthened our competitive advantage by adding both scale and additional capabilities to our Engineering Technologies platform. The addition of McStarlite furthers our portfolio strategy of building our growth business segments into more significant platforms. We look forward to welcoming the entire McStarlite team to our company,” concluded Dunbar.

McStarlite was advised by investment banking firm Janes Capital Partners and Procopio, Cory, Hargreaves & Savitch LLP as legal counsel.

About Standex

Standex International Corporation is a global multi-industry manufacturer in five broad business segments: Electronics, Engraving, Scientific, Engineering Technologies, and Specialty Solutions with operations in the United States, Europe, Canada, Japan, Singapore, Mexico, Turkey, India, and China.  For additional information, visit the Company’s website standex.com.

About McStarlite

Basmat, Inc. d/b/a McStarlite Co. (“McStarlite Co.”), founded in 1955, designs and manufactures segmented and single piece lipskins, nozzles, complex sheet metal assemblies, and tooling to support production hardware for products focused on commercial aviation and military end markets. For additional information, visit the Company’s website at http://www.mcstarlite.com. (Source: PR Newswire)

 

05 Feb 25. Canadian shipyard in talks to buy US shipbuilder amid trade war talk. Davie, a Quebec shipbuilder set to play a key role in a joint icebreaker production agreement between Canada, the United States and Finland, is moving forward with plans to expand its operations south of the border despite a looming trade war threatening the continent. As part of the expansion, the Canada-based multinational shipbuilder has set out to acquire an American shipyard, which would secure an initial and important footprint in the U.S. for the company.

“Right now it’s business as usual with our U.S. entry plans. … We are also making progress with the acquisition of an established U.S. shipbuilder – if we are successful, we plan to upgrade as we are at the Quebec site,” Davie spokesman Paul Barrett told Defense News.

Davie has envisioned transforming its Lévis, Quebec, shipyard into North America’s largest, most versatile shipbuilding center.

In 2024, it signed two contracts to this end, one with the American firm Pearlson & Pearlson Inc., and another with the Canadian construction leader Dinamo, to modernize the site in order to deliver seven heavy icebreakers and two hybrid ferries under Canada’s National Shipbuilding Strategy.

The project is supported by nearly CAD $519 m in investments from the Quebec government and will deliver in part six new buildings and machinery, a new assembly hall and launch pad, and waterfront upgrades.

Davie has positioned itself as a crucial industry partner in the trilateral Icebreaker Collaboration Effort, or ICE Pact. The agreement, signed last summer, seeks to bring together Finnish, Canadian and U.S. know-how, resources and expertise to build best-in-class ice boats capable of operating year-round in the Arctic.

Recent remarks made by U.S. President Donald Trump suggesting that Canada and Greenland could become American states as well as the imposition of 25% tariffs on Canadian imports – tabled, for now – have casted doubts on the future of partnerships like the ICE Pact.

However, both the Canadian and Finnish government have told Defense News that the tense climate witnessed as of late between the two neighboring countries has not compromised cooperation amongst the parties involved.

“We continue implementing it as planned and look forward to cooperating with our allies and partners, the U.S. and Canada – we believe all parties are committed to Ice Pact efforts, as there is a need to strengthen the capabilities,” Reko-Antti Suojanen, senior ministerial adviser and ICE Pact coordinator at the Ministry of Economic Affairs and Employment of Finland, said.

All three countries are in relatively urgent need of bolstering their icebreaker fleets, as many are outdated or will soon be, while China and Russia have ramped up their shipbuilding efforts.

“The West’s competitors and adversaries are rapidly expanding Arctic ice breaking fleets to exert control in the region – despite ambitious shipbuilding programs, the U.S. and its allies remain far behind,” Barrett, the Davie spokesman, said.

Through the acquisition of Helsinki Shipyard in 2023, Davie gained access to Finland’s leading icebreaker intellectual property, having produced much of the world’s ice boat fleet. It is not yet clear to what extent the knowledge will be shared with the U.S. under the agreement. Barrett noted that Davie company expects to play a lead role in discussions on how their IP will be properly protected and applied within this framework. Once the Canadian manufacturer finalizes the purchase of the American shipbuilder, which the company declined to name, it will become the only one in the ICE Pact with a footprint in all three member nations. (Source: Defense News)

 

06 Feb 25. Babcock International Group PLC (“Babcock” or “the Group”) provides an update on trading for the nine months of the financial year ending 31 March 2025 and upgrade of full year expectations. The strong trading performance reported at HY25 continued throughout the third quarter of the year, and the preliminary view of performance in the month of January is also encouraging. The majority of revenue for the year is now under contract and, having reviewed the delivery forecast for the remainder of the year, the Board now expects both revenue and underlying operating profit to exceed the top end of the range of analyst expectations1. Accordingly, we are upgrading our expectations for FY25 to c.£4.9bn of revenue, with the expected overperformance due to double-digit organic growth in Nuclear and strong growth in Marine. In Nuclear, growth is driven by increased new build and decommissioning work in civil nuclear, as well as increased submarine support activity and higher than originally expected infrastructure revenues. In Marine, the growth is enhanced by higher LGE volumes as well as the ramp-up of the Skynet programme.

Babcock Chief Executive David Lockwood said: “Today’s announcement demonstrates that successful execution of our strategy is continuing to deliver value for all our stakeholders. Our engineering skills and know-how are in ever greater demand and with significant opportunities before us, I look forward to further profitable growth.”

Operational momentum

We continue to make good operational and strategic progress in the UK and internationally.

In January, HMS VICTORIOUS entered our 9-Dock facility in Devonport, marking a major milestone in the £560 m programme to modernise and refit the submarine. HMS VICTORIOUS is the second of the UK’s four Vanguard Class submarines, which play a vital role as part of the UK’s continuous at sea deterrent, to undergo a life extension programme. Moving the submarine into the dock enables us to deliver the work required to return this critical national defence asset back to the Royal Navy to continue operational patrols into the 2030s.

We are progressing the build of the first three ships in the Type 31 Inspiration Class frigate programme. We expect the float-off of the first ship, HMS Venturer, to be in the first half of FY26 and float-off of the second ship, HMS Active, in the second half of FY26.

In January, we were awarded a new 17-year contract (Mentor 2) by the Direction Générale de l’Armement for the provision and support of military air training solutions for the French Air and Space Force and the French Navy. The contract, worth up to c.€800 m, including c.€200 m of options, comprises the provision of aircraft, simulators and initial pilot training as well as the through-life support of the aircraft, and infrastructure2. This agreement represents a significant expansion of our military activity in France, one of our focus countries.

 

03 Feb 25. ASELSAN closed 2024 with over 1bn USD export deals. ASELSAN signed export contracts worth over 1bn USD in 2024, a record high figure in its history. The company also expanded its global footprint with the opening of new offices worldwide, steadily advancing toward its ambitious 2030 goals. ASELSAN, Türkiye’s leading defense company, achieved an outstanding performance in international sales in 2024 and exceeded 1bn dollars of export contracts. Direct exports doubled compared to the previous year, reaching 217m USD, while indirect exports through land, naval, and air platforms totaled 291m USD, leading to an overall export volume of 508m USD, demonstrating ASELSAN’s growing influence in global markets. In 2024, the company signed contracts with seven countries for the first time, bringing the total number of countries, which trust ASELSAN technology to 92. In addition, 31 products were exported for the first time, including ASELFLIR-500 camera, GÖZDE and KGK guidance kits, CENK naval radars, FERSAH anti-submarine sonar, and more. Among them, its new generation electro optical system ASELFLIR-500, notable for its superior performance on UAVs was sold to 16 countries in its first production year. New offices opened in six different countries in 2024 have expanded ASELSAN’s global presence to 20 countries, enhancing its ability to provide better services to the end-users. By supplying the Ku-Band and X-Band LOCUS communication payloads for Türkiye’s first domestic communication satellite, TÜRKSAT-6A, ASELSAN has become capable of providing communication solutions to all platforms, from the depths of the sea to the depths of space. ASELSAN President & CEO Ahmet Akyol evaluated the company’s success: “2024 had been a remarkable year for ASELSAN in terms of new orders and deliveries domestically and internationally. We achieved to become one of the 10 fastest-growing defense companies in the world, making us climbing five places in the Defense News Top 100 list. I see all these achievements as a result of the dedicated work of our young and talented workforce and want to thank each of them for being a part of this amazing team. Looking ahead to 2025, our 50th anniversary, ASELSAN has higher goals to reach in sight, with the motivation to build on the achievements of 2024. We will continue to produce the highest technologies with the most qualified capabilities and the fastest processes, and present them to the world in frame of our strategic vision for 2030, which we call aselsaneXt2030. I strongly believe we will continue to deliver innovative, mission-focused solutions for our customers, while setting new standards for operational efficiency and technological leadership in the defense industrial base.” (Source: ArabianBusiness.com)

 

04 Feb 25. James Fisher and Sons shares jump on profits beat. Shares at James Fisher and Sons (FSJ) jumped by more than 8 per cent this morning after the marine services group said 2024 profits would come in ahead of market expectations. Underlying operating profits are expected to be £29m, which would mark a return to profitability following a £18.6m loss in 2023 thanks to stronger revenues and several non-recurring items. After the sale of two business units last year, net debt at the end of the period is expected to sit within the target range of 1x and 1.5x at less than £60m, down from £144.8m at the end of September. The company will publish its full-year results on 20 March. (Source: Investors Chronicle)

 

04 Feb 25. Amentum Holdings, Inc. (“Amentum” or the “Company”) (NYSE: AMTM), a leading advanced engineering and technology company, today announced results for the first quarter ended December 27, 2024, and reaffirmed its outlook for fiscal year 2025.

“We are off to a strong start as a newly combined company,” said Amentum Chief Executive Officer John Heller. “Our first quarter results were robust and in line with our expectations across all key financial metrics, including organic growth and free cash flow. This solid start to the year, coupled with strong bid volume and growing momentum, position Amentum to meet our fiscal year 2025 commitments and drive long-term value for shareholders.”

GAAP revenues increased 72% year-over-year primarily as a result of revenues from the combination with Jacobs’ Critical Mission Solutions and Cyber & Intelligence (CMS) businesses. GAAP operating income increased as a result of the contribution from CMS, partially offset by increased intangible amortization expense. GAAP net income and diluted earnings per share improved year-over-year due to the higher operating income and lower interest expense.

Pro Forma and Non-GAAP Results

Pro forma revenues, which include the results of CMS prepared in accordance with the requirements of Article 11 of Regulation S-X, increased 2% year-over-year driven by growth in both Digital Solutions and Global Engineering Solutions. Pro Forma Adjusted EBITDA increased 3% year-over-year primarily due to the higher revenues and improved operating performance. Pro Forma Adjusted Net Income and Adjusted Diluted Earnings Per Share increased due to the higher operating profit partially offset by an increase in interest expense.

Digital Solutions revenues increased 1% year-over-year driven by new contract awards, partially offset by the expected ramp-down of other historical programs. Adjusted EBITDA also increased 1% year-over-year due to the higher revenues.

Global Engineering Solutions revenues increased 3% year-over-year driven by new contract awards and growth on existing programs. Adjusted EBITDA increased 4% year-over-year as a result of the higher revenues and improved operating performance.

Cash Flow Summary

During the quarter ended December 27, 2024, Amentum generated $110 m of net cash provided by operating activities and used $8 m and $16 m in investing and financing activities, respectively. Net cash provided by operating activities was driven by strong cash earnings, disciplined working capital management, and the timing of tax and interest payments. Investing activities included $8m in capital expenditures, which resulted in quarterly free cash flow of $102m. Financing activities consisted primarily of $13m in distributions to non-controlling interests. As of December 27, 2024, Amentum had $522m in cash and cash equivalents and $4.7bn of debt.

Backlog and Contract Awards

As of December 27, 2024, the Company had total backlog of $45.2bn, compared with $27.3bn as of December 29, 2023, an increase of $17.9bn primarily due to the acquisition of CMS. Funded backlog as of December 27, 2024 was $6.6bn.

Notable Q1 Fiscal Year 2025 Awards

• U.S. Department of Energy (DOE) West Valley Demonstration Project (WVDP) – The U.S. DOE awarded WVDP, a $3bn single-award indefinite delivery indefinite quantity contract with a ten-year ordering period, to West Valley Cleanup Alliance, LLC (WVCA). As a part of the joint venture partnership, Amentum will bring advanced environmental capabilities to safely remediate the site in western New York state.
• Air Forces Central Command Global Prepositioned Materiel Services (GPMS) – The U.S. DOD awarded Amentum a seven-year, $447 m contract to deliver smart asset management and sustainment solutions.
• Global Counter Threat Finance (GCTF) – The U.S. DOD awarded a subsidiary of Amentum an eight-year, $248 m contract to leverage mission-driven data analytics solutions to disrupt and degrade adversary financial networks that support transnational criminal organizations.
• Commercial Awards – Amentum was awarded contracts valued at over $400 m in fiscal Q1 2025 to support a variety of Fortune 500 customers in areas including the deployment and optimization of 5G networks and infrastructure modernization. (Source: BUSINESS WIRE)

 

04 Feb 25. TransDigm Group (TDG.N), raised its annual profit forecast on Tuesday, betting on strong demand for aftermarket parts and services from planemakers and carriers. The company, which supplies aircraft components such as cockpit security systems and engine sensors for commercial and military jets, also beat Wall Street estimates for quarterly profit. Demand for aircraft parts has risen as planemakers rush to fulfill expansion plans by airlines looking to cash in on the booming market for air travel. However, delayed deliveries of new planes have pushed airlines to extend the use of older aircraft, boosting orders for profitable aftermarket parts for suppliers such as TransDigm. The Cleveland, Ohio-based company expects its 2025 profit per share to be between $32.27 and $34.19, compared to the previous forecast of $31.47 to $33.39. The company, which counts planemakers Boeing (BA.N) and Airbus (AIR.PA), among its customers, reaffirmed its annual sales forecast of $8.75bn to $8.95bn. (Source: FT.com)

 

04 Feb 25. Filtronic revenues soar on SpaceX demand. The electronic equipment group swung to a profit as space orders took off. Filtronic (FTC) has had a stellar year. The electronic equipment group’s shares are up by an eye-watering 276 per cent over the past 12 months, fuelled by multiple earnings upgrades linked to a swelling order intake from Elon Musk’s Space X. The Aim-traded company supplies the E-band solid state power amplifiers (SSPA) for the ground stations powering the Starlink low earth orbit (LEO) satellite network as part of a five-year partnership agreed in April last year. Less than a year in, the deal is flowing nicely into Filtronics’ top line.  Revenues shot up 201 per cent year on year to £25.6m in the first half, with the space division more than eclipsing the 7 and 39 per cent respective falls in the defence and critical communications segments. This helped the group swing to an operating profit of £6.8m against a loss last year and drive a 30 per cent adjusted Ebitda margin.  The return to profits came despite a 62 per cent rise in the cost base to £9.1m. These were investments for long-term growth and included hiring 30 engineers, recruiting a design team and opening two new production lines to boost capacity. A healthy net cash position of £5.2m provides further firepower. Chief executive Nat Edington told Investors’ Chronicle that more visibility into SpaceX’s plans is providing the confidence to invest, but reducing the heavy revenue concentration on a single customer is becoming a big focus. Filtronic was awarded 12 design wins with nine customers in the first half, with £30m revenues still to be realised.   Of course, this kind of growth comes at a price. Having more than doubled its share price over the past year, the company now trades at 20.2 times 2025 earnings. This is far from cheap, but with the LEO satellite market soaring, the medium-term opportunity remains compelling. Hold.  (Source: Investors Chronicle)

 

03 Feb 25. The Thermal Group (“TTG” or the “Company”), a leading designer and manufacturer of mission-critical and highly engineered components for the defense, aerospace and industrial sectors and a portfolio company of Behrman Capital, today announced the acquisition of Applied Composite Technology Aerospace, LLC (“ACT”), a leading manufacturer of advanced composite structures for the aerospace and defense industry. Financial terms of the transaction were not disclosed. Headquartered in Gunnison, Utah, ACT combines technological innovation with exceptional manufacturing and design expertise, providing their customers with a comprehensive range of composite solutions for both structural and non-structural requirements. ACT’s product capabilities include laminate construction, composite compression molding, resin transfer molding and filament winding, serving a wide variety of high-reliability applications in the defense, aerospace, and business jet marketplaces. ACT also provides complementary services such as design, testing, inspection and engineering, among others.

Harley Kaplan, TTG’s Chief Executive Officer, said: “ACT augments TTG’s established expertise in thermal design and manufacturing by adding advanced composite capabilities to our product portfolio. Together with ACT, we are enhancing our ability to serve customers through a broader suite of highly-engineered solutions. Bringing together TTG’s decades of manufacturing know-how in thermal management with ACT’s engineering, design and composite manufacturing capabilities will allow for significant cross-selling opportunities, as we look to build on our strategic position and strengthen our long-term growth prospects.”

Jason Christensen, President of ACT, said: “We are proud of ACT’s 30-year history of quality and serving customers with engineered composite solutions for high-reliability, and often complex applications. Joining forces with The Thermal Group creates exciting opportunities and enables us to create superior solutions for our customers in the aerospace and defense industry. We are eager to collaborate with TTG and leverage its broader infrastructure and resources to support significant growth in the years ahead.”

Grant Behrman, Managing Partner of Behrman Capital, said: “The acquisition of ACT represents an important step in the evolution of the TTG platform and continues the Company’s track record of building a robust portfolio of high-reliability engineered solutions through strategic acquisitions. We are excited to partner with ACT management as the combined company enters its next phase of growth.”

Houlihan Lokey acted as exclusive financial advisor and Latham & Watkins LLP acted as legal counsel for TTG in connection with the transaction.

About TTG

TTG is a leading designer and manufacturer of mission-critical and highly-engineered thermal management components for defense, aerospace and industrial applications. The Thermal Group’s products are critical to the functionality of electronic systems, and include ruggedized chassis, enclosures, heat sinks, cooling systems and other thermal management products. The Company’s core manufacturing capabilities include dip brazing, vacuum brazing, CNC machining, fabricating, welding, painting, laser cutting, mil-spec finishing and mechanical assembly. For more information, please visit https://www.thethermalgrp.com.

About ACT

ACT Aerospace is an aerospace and defense manufacturing leader. With a primary focus on advanced composite structures and innovation, ACT Aerospace is well-known as a major aerospace and defense supplier to many large manufacturers and OEMs. The Company’s 150,000+ sq. ft. facility is fully integrated to handle any project from design to final product. For more information, please visit www.actaero.com.

About Behrman Capital

Based in New York City, Behrman Capital was founded in 1991 by Grant G. and Darryl G. Behrman. The firm invests in management buyouts, leveraged buildups and recapitalizations of established growth businesses. The company’s investments are focused in three industries: Defense and Aerospace, Healthcare, and Specialty Industrials. The firm has raised $4.1bn since inception and is currently investing out of its seventh fund. For more information, please visit www.behrmancap.com. (Source: PR Newswire)

 

03 Feb 25. Triumph Group, Inc. (NYSE: TGI) (“TRIUMPH” or the “Company”) today announced that it has entered into a definitive agreement under which affiliates of growth-focused private equity firms Warburg Pincus and Berkshire Partners will acquire TRIUMPH through a newly formed entity for a total enterprise value of approximately $3bn. Upon completion of the transaction, TRIUMPH will become a privately held Company, jointly controlled by Warburg Pincus and Berkshire Partners.

Under the terms of the agreement, TRIUMPH shareholders will receive $26.00 per share in cash. The purchase price represents a premium of approximately 123% over the Company’s unaffected closing stock price1 and a premium of approximately 58% over the volume weighted average price (VWAP) of TRIUMPH common stock for the 90 days prior to January 31, 2025.

“We are pleased to have reached this agreement, which reflects the culmination of the Board’s robust process and will deliver immediate, certain and premium cash value to our shareholders,” said Dan Crowley, TRIUMPH’s chairman, president and chief executive officer. “Over the last few years, TRIUMPH successfully optimized our portfolio, built around a world class team and capabilities. This transaction recognizes our Company’s position as a valued provider of mission-critical engineered systems and proprietary components for both OEM and aftermarket customers. As a privately held company in partnership with Berkshire Partners and Warburg Pincus, TRIUMPH will have an enhanced ability to meet our customers’ evolving needs and provide more opportunities for our valued employees.”

“TRIUMPH has a strong reputation as a leader in highly engineered aerospace components and systems, and we are excited about partnering with them in this next chapter of growth,” said Dan Zamlong, Managing Director at Warburg Pincus. “With our deep experience investing in and developing aerospace platforms, we look forward to working with TRIUMPH’s talented global team to increase opportunities for its portfolio and capture the growing demand for high quality aerospace components.”

“TRIUMPH plays a critical role in the aerospace and defense industry and is known for providing high quality products on key platforms. Berkshire has a long history of partnering with market-leading aerospace companies, and we look forward to helping accelerate the next phase of TRIUMPH’s growth,” added Blake Gottesman, Managing Director at Berkshire Partners.

Timing and Approvals

The transaction is expected to close in the second half of calendar year 2025 and is subject to customary closing conditions, including approval by TRIUMPH shareholders and receipt of required regulatory approvals. TRIUMPH’s Board of Directors unanimously approved the definitive agreement. The transaction is not contingent upon financing. Upon completion of the transaction, TRIUMPH will no longer be traded on the New York Stock Exchange.

Third Quarter Fiscal 2025 Earnings

In connection with its pending transaction, TRIUMPH will release its third quarter fiscal 2025 earnings and file its Form 10-Q by February 10, 2025, as planned, and is cancelling its previously scheduled earnings conference call and webcast.

Advisors

Goldman Sachs & Co. LLC is serving as exclusive financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal counsel to TRIUMPH. Lazard is serving as financial advisor and Kirkland & Ellis LLP and Covington & Burling LLP are acting as legal counsel to Berkshire Partners and Warburg Pincus.

About TRIUMPH

Founded in 1993 and headquartered in Radnor, Pennsylvania, TRIUMPH designs, develops, manufactures, repairs and provides spare parts across a broad portfolio of aerospace and defense systems and components. The Company serves the global aviation industry, including original equipment manufacturers and the full spectrum of military and commercial aircraft operators.

More information about TRIUMPH can be found on the Company’s website at www.triumphgroup.com.

About Berkshire Partners

Berkshire Partners is a 100% employee-owned, multi-sector specialist investor in private and public equity. The firm’s private equity team invests in well-positioned, growing companies across business & consumer services, healthcare, industrials, and technology & communications. Berkshire is currently investing from its Fund XI, which held its final closing in 2024 with approximately $7.8 bn in commitments. Since inception, Berkshire Partners has made more than 150 private equity investments and has a strong history of collaborating with management teams to grow the companies in which it invests. For additional information, visit www.berkshirepartners.com.

About Warburg Pincus

Warburg Pincus LLC is the pioneer of private equity global growth investing. A private partnership since 1966, the firm has the flexibility and experience to focus on helping investors and management teams achieve enduring success across market cycles. Today, the firm has more than $86 bn in assets under management, and more than 230 companies in their active portfolio, diversified across stages, sectors, and geographies. Warburg Pincus has been an active investor in the aerospace & defense and industrial technology sectors with current and former investments including Accelya, Aquila Air Capital, CAMP Systems, Consolidated Precision Products, Duravant, Extant Aerospace, Infinite Electronics, Inmarsat, iNRCORE, Quest Global, Sundyne, TransDigm and Wencor Group. Warburg Pincus has invested in more than 1,000 companies across its private equity, real estate, and capital solutions strategies.

The firm is headquartered in New York with offices in Amsterdam, Beijing, Berlin, Hong Kong, Houston, London, Luxembourg, Mumbai, Mauritius, San Francisco, São Paulo, Shanghai, and Singapore. For more information, please visit www.warburgpincus.com or follow us on LinkedIn. (Source: PR Newswire)

 

03 Feb 25. Palantir Technologies Inc. (NASDAQ:PLTR) today announced financial results for the fourth quarter and fiscal year ended December 31, 2024.

“Our business results continue to astound, demonstrating our deepening position at the center of the AI revolution. Our early insights surrounding the commoditization of large language models have evolved from theory to fact,” said Alexander C. Karp, Co-Founder and Chief Executive Officer of Palantir Technologies Inc. “I would also like to congratulate Palantirians for their extraordinary contributions to our growth. They have earned every bit of the compensation from the delivery of their market-vesting stock appreciation rights (SARs).”

Q4 2024 Highlights

• U.S. revenue grew 52% year-over-year and 12% quarter-over-quarter to $558m

o U.S. commercial revenue grew 64% year-over-year and 20% quarter-over-quarter to $214m

o U.S. government revenue grew 45% year-over-year and 7% quarter-over-quarter to $343m

• Revenue grew 36% year-over-year and 14% quarter-over-quarter to $828m
• Closed 129 deals of at least $1m, 58 deals of at least $5m, and 32 deals of at least $10m
• Closed a record-setting $803 m of U.S. commercial total contract value (“TCV”), up 134% year-over-year and 170% quarter-over-quarter
• U.S. commercial remaining deal value (“RDV”) of $1.79bn, up 99% year-over-year and 47% quarter-over-quarter
• Customer count grew 43% year-over-year and 13% quarter-over-quarter
• Cash from operations of $460m, representing a 56% margin
• Adjusted free cash flow of $517m, representing a 63% margin
• GAAP net income of $79m, representing a 10% margin

o $165m of net income when excluding one-time SAR-related expenses, representing a 20% margin

• GAAP income from operations of $11m, representing a 1% margin

o $142 m of income from operations when excluding one-time SAR-related expenses, representing a 17% margin

• Adjusted income from operations of $373m, representing a 45% margin
• Rule of 40 score of 81%
• GAAP earnings per share (“EPS”) of $0.03

o $0.07 EPS when excluding one-time SAR-related expenses

• Adjusted EPS of $0.14
• Cash, cash equivalents, and short-term U.S. Treasury securities of $5.2bn

FY 2024 Highlights

• U.S. revenue grew 38% year-over-year to $1.90bn

o U.S. commercial revenue grew 54% year-over-year to $702m

o U.S. government revenue grew 30% year-over-year to $1.20bn

• Revenue grew 29% year-over-year to $2.87bn
• Cash from operations of $1.15bn, representing a 40% margin
• Adjusted free cash flow of $1.25bn, representing a 44% margin
• GAAP net income of $462m, representing a 16% margin
• GAAP income from operations of $310m, representing an 11% margin

o $442 m of income from operations when excluding one-time SAR-related expenses, representing a 15% margin

• Adjusted income from operations of $1.13bn, representing a 39% margin

For Q1 2025, we expect:

• Revenue of between $858 – $862m.
• Adjusted income from operations of between $354 – $358m.

For full year 2025, we expect:

• Revenue of between $3.741 – $3.757bn.
• U.S. commercial revenue in excess of $1.079 bn, representing a growth rate of at least 54%.
• Adjusted income from operations of between $1.551 – $1.567bn.
• Adjusted free cash flow of between $1.5 – $1.7bn.
• GAAP operating income and net income in each quarter of this year.

(Source: BUSINESS WIRE)

 

31 Jan 25. Northrop Grumman delivers reassuring results.

Free cash flow improved by a quarter

• Higher book-to-bill ratio
• Two units set for sales declines in 2025

As with US sector rivals, Northrop Grumman (US:NOC) has markedly underperformed the S&P 500 at the same time as peers in Europe have been boosted by higher defence demand after the invasion of Ukraine.

But in the aftermath of contractor peer Lockheed Martin’s (US:LMT) poorly received results, this was a reassuring set of annual figures from Northrop after it was hit in 2023 by a $1.56bn (£1.17bn) pre-tax charge on its B-21 bomber aircraft programme. In that context, no unpleasant surprises was a relief.

Agency Partners analysts said that “having been first to deliver an inflation-related cost overrun (on B-21), Northrop Grumman may be the first out of that phase”.

The book-to-bill ratio improved to 1.23, and the backlog sat at at record $91.5bn. Big awards in the fourth quarter included $4bn for restricted programmes and $3.5bn for the US military’s take charge and move out (TACAMO) communication system.

Revenue guidance for 2025 is a range of $42bn-$42.5bn, with growth driven by the aeronautics business, which delivered a 12 per cent annual sales uplift this time around.

Northrop expects revenue declines at its space systems and defence systems arms, although the agreed $327mn sale of its training services business to Serco (SRP) has been taken into account at the latter. The transaction is expected to complete around the middle of this year.

Free cash flow was guided to improve to $2.85bn-$3.25bn, after surging by 25 per cent in the year to $2.62bn.

But Northrop is not immune to the uncertainty around the traditional defence contractors as the new US administration takes a fresh look at the budget. The shares trade on 17 times forward consensus earnings, in line with the five-year average. Hold.  (Source: Investors Chronicle)

 

03 Feb 25. Albion River (“Albion”) is proud to announce the acquisition of Arotech from Greenbriar Equity Group. Headquartered in Ann Arbor, Michigan, Arotech is a recognized leader in high-fidelity training and simulation, portable power systems, and advanced electronics manufacturing, serving global defense and security customers.

Dean Krutty, CEO of Arotech, commented, “We are excited to join forces with Albion River as we embark on this next phase of growth. With Albion River’s resources and expertise, we are poised to expand our global footprint, enhance our product offerings, pursue strategic acquisitions, and continue delivering for our customers.” Arotech’s existing management team, led by Dean Krutty, will continue in their existing roles.

Bryan Cave Leighton Paisner LLP served as legal advisor to Albion on the transaction. 3Wire Partners served as financial advisor and Kirkland & Ellis LLP served as legal advisor to Greenbriar Equity Group on the transaction.

About Arotech Corporation

Arotech Corporation provides high-fidelity training & simulation, advanced electronics manufacturing, and portable power systems for defense, law enforcement, and select commercial end-markets. Its products are embedded in hundreds of defense platforms and protected by its extensive portfolio of intellectual property and decades of proprietary manufacturing and development know-how. Arotech has a proven track record across all branches of the U.S. military, numerous federal agencies, major prime contractors, foreign militaries, and state & local customers. Additional Information may be found at www.arotech.com.

About Albion River

Albion River LLC is a private direct investment firm focused on acquiring companies that produce highly technical Defense Products & Services. Albion River is led by its group of partners, supported by a team of expert advisors and an extensive network of industry and government professionals. Additional information may be found at www.albionriver.com. (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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