03 Apr 20. Raytheon Technologies Corp. begins trading on NYSE. Less than a year after announcing plans to combine into a $121bn company, Raytheon and United Technologies are officially no more — replaced by the combined entity Raytheon Technologies Corp., which kicked off trading Friday on the New York Stock Exchange.
Listed under the ticker RTX, Raytheon Technologies began selling at $51 a share. With more than 866 million shares outstanding and a market cap of $74.5bn, that price is bound to shift in the coming days, weeks and months. To put it in perspective, Raytheon closed Thursday at $122.43 a share, and UTC closed at $91.37 a share.
With the merger, UTC shareholders owned 57 percent of Raytheon Technologies, and UTC will control eight of the 15 board seats. Tom Kennedy will serve as executive chairman, Greg Hayes as CEO and Toby O’Brien as chief financial officer.
Planned divestitures will be completed post merger, though United Technologies did complete the spinoff of HVAC, refrigeration, fire and security solutions company Carrier Global Corp., as well as elevator and escalator manufacturer Otis Worldwide Corp. Both are now trading on the S&P 500.
Amid the stock market fallout from the new coronavirus pandemic, Raytheon saw a bigger drop than most pure-play companies, likely due to the increased exposure to the commercial market that came with the merger. However, that could be short-lived, said Byron Callan of Capital Alpha Partners.
“Raytheon has been the worst-performing stock [during the crisis] because they got tied into commercial aerospace through the merger,” he told Defense News in an interview. “But going forward, that may be the most interesting [stock] of all because there will be a degree of balance.” (Source: Defense News)
03 Apr 20. Statement By Marillyn Hewson On Lockheed Martin Additional Support Of COVID-19 Relief And Recovery Efforts. Today, Lockheed Martin is announcing a number of additional steps we are taking to continue supporting our employees, vulnerable companies in our supply chain and those on the front lines of the medical crisis impacting our local communities and the nation.
- In addition to continuing to support our key government customers, we recognize that providing jobs during this period of economic downturn is also critically important. We are committed to continue hiring during this crisis and have added close to 1,000 new employees over the past two weeks in addition to advertising for 5,000 open positions.
- Recognizing that our workforce is our most valuable asset in supporting our national security mission, we are extending awards of up to $500 to our employees who are regularly required to work at, or travel to, a designated Lockheed Martin facility or customer site during this crisis.
- To continue supporting the small businesses and supply chain that power our U.S. defense industrial base, we are increasing our previous commitment of $53 million in accelerated payments by another $53 million, totaling more than $106m for this purpose.
- To support our first responders and health care workers on the front lines of this crisis, we are committing to donate $2m in urgently needed personal protective equipment items.
- In addition, we have donated personal protective equipment (PPE) for urgent need at local hospitals and have also initiated limited PPE and medical device production (face shields). We are also providing engineering support for select initiatives to accelerate production of PPE equipment.
As we all deal with the challenges of the health crisis, we will continue to perform and deliver critical products and capabilities for the United States and our allies, support job creation and help those in need wherever we operate.
Chairman, President and CEO
Lockheed Martin Corporation
02 Apr 20. Aerospace suppliers face bailout dilemma over job cuts. Aerospace suppliers are drawing up plans to lay off workers as coronavirus quarantines cripple their cash balances – but bailout conditions and fears of losing critical skilled labor are forcing managements to juggle survival and future growth.
The coronavirus epidemic, which has surpassed 878,000 known cases globally, has battered aviation as airlines ground planes everywhere, sending ripples through a global supply chain.
“With the airlines not flying, they’re not ordering new planes; they’re not taking delivery of planes that are coming off the line. They’re not servicing the planes, so even the aftermarket has dried up,” Eric Fanning, chief executive of the U.S. Aerospace Industries Association, told Reuters.
Many suppliers – especially those who make structural parts and lack a recurring market for repairs and replacements, unlike makers of limited-life components – are having to face hard choices over furloughing staff as they try to conserve cash.
“Their workforce is their crown jewel. Aerospace and defense have a critical problem finding the right workers for all the jobs that they have,” Fanning said.
Sekisui Aerospace, a Seattle-based subsidiary of Japan’s Sekisui Chemical (4204.T) which makes composite parts for Boeing Co (BA.N) and Airbus SE (AIR.PA), plans to pay employees through April 8 after closing for a compulsory lockdown. It’s not yet clear what Sekisui will do after that.
Fearing skill shortages, companies across the U.S. supply chain are weighing whether to apply for loans under a $2.3trn government coronavirus aid package approved last week.
To qualify, mid-sized companies must plan to restore at least 90% of their pre-crisis workforce within four months of the U.S. government declaring the health emergency is over.
But that condition assumes a relatively sharp bounceback that airlines say is far from certain – even allowing for a demand boost from the sheer scale of the stimulus.
Companies that three weeks ago were looking at cutting headcount to adapt to a 30-50% drop in demand “are now going back and revising their plans again to meet the terms of the loans,” said Regina Lee of consultancy AlixPartners.
The International Air Transport Association, representing airlines, warned on Tuesday the crisis could last until the fourth quarter and that any rebound would be short-lived if there was a new winter wave of coronavirus.
“Before the crisis we were in hiring mode. Now we have stopped all hiring,” said Martin Brassard, chief executive of Montreal-based Heroux-Devtek (HRX.TO), which makes landing gear.
It has already laid off 85 workers in the Montreal area because of confinement rules, but hopes to use its backlog of defense orders to avoid further cuts.
Information Engineering Group, a nearby company that makes software to manage airport executive lounges, has laid off some workers but wants to be positioned for an eventual recovery.
“We want to make sure the talent we have is not lost,” said managing director Michael Di Corpo. “We are trying to weigh that balance as we move on.”
Still uncertain is to what extent Boeing will itself apply for government help and how much aid it would funnel to suppliers, who are already reeling from the 737 MAX grounding.
“We have got to help them through it, and that’s what will really help on the recovery side of this,” Chief Financial Officer Greg Smith said in a Mar 24 interview. (Source: Reuters)
03 Apr 20. BAE Systems plc – Market Update. BAE Systems plc provides the following update in light of the ongoing COVID-19 pandemic.
Current Business Priorities
Given the critical nature of the products and services that we provide to a number of nations, the key role we play in national economies and the local communities in which we operate, the Group has a number of near-term priorities:
1) Protect the wellbeing of our employees
2) Meet customer priorities and support them as they face unique challenges
3) Support our supply chain in dealing with pandemic related disruption
4) Preserve and protect our capabilities and the strength of the Group’s business which is underpinned by our £45bn order backlog and programme positions
5) Ensure that we maintain liquidity and balance sheet strength and thereby remain robustly funded in anticipation of a potentially extended period of uncertainty.
Our primary focus through this challenging period is to ensure that our employees are safe, our facilities are maintained securely, and the long-term future of our business is protected. A core part of this approach involves working closely with our customers and suppliers to support them in these difficult times. This will enable us to increase production for any affected operations safely and as quickly as possible once permitted to do so. This will allow us to minimise any interruption of supply to our customers and be in a position to support the economic recovery phase for the countries in which we operate.
The Company is in a strong position with a large order backlog, mainly consisting of long-term Government contracts across a wide international customer base. We have a strong balance sheet, a high quality, diverse portfolio and supply chains closely aligned to the nations in which we operate. At the same time, the Company is taking a number of actions to enhance its resilience and position the business for an eventual return to a full operational tempo.
We have mobilised our business continuity plans in response to the COVID-19 outbreak with governance and communication structures to facilitate rapid decision-making. Significant steps have already been taken in line with relevant government guidance and policy to safeguard the health and wellbeing of our employees and customers. These include working from home for a significant proportion of colleagues throughout the Group, with a number of sites on reduced operational levels. New procedures have been implemented at our sites including enhanced cleaning regimes, safe working distance measures and distribution of protective equipment to our teams on site while they continue to meet the critical priorities of our customers. We have already seen an exceptional response from our employees, customers and supply chains and are liaising closely with our customers and suppliers to understand any changes in requirements and priorities during this time.
In the first quarter of 2020, the pandemic has had no material impact on the financial performance of the Group. We have received significant awards recently on the M109A7 self-propelled howitzer programme, in US ship repair and on the THAAD missile programme in Electronic Systems.
As the second quarter commences, we are seeing more significant disruptions. We continue to assess the impact on our business of the measures announced by national governments, together with the actions the Group has taken to support customers and suppliers. In parallel, cost control measures have been implemented to help limit the financial impact of disruptions to the business.
The liquidity of the Company is strong, with significant gross cash and access to a £2bn Revolving Credit Facility committed to April 2024, along with other short and long-term debt options.
From this position of strength the Group does typically have a working capital cash outflow in the first half of the year and actions are being taken internally to optimise cash flow while maintaining operational resilience and capability. Additionally, we are discussing funding profiles with our key customers to ensure our supply chain remains strong and there is a continuity on critical defence and security programmes.
Final Dividend Payment, Executive Director Remuneration and AGM
The liquidity and business profile of the Group is strong. This remains however reliant on the goodwill of our customers and the financial strength of our supply chain to maintain the drumbeat of production commitments both now and in the future.
Against a background of significant government and social challenges, and the uncertainty as to the duration of the resulting disruption, the Board believes it is in the Company’s best interests, having regard to all our stakeholders’ interests, to defer the decision on the 13.8 pence per share dividend proposed by the Board when announcing the Company’s 2019 results in February.
We recognise the importance of the dividend to our shareholders and whilst it remains our intention to pay a dividend, the timing of any payment will be contingent on prevailing macro-economic and social conditions over the coming months. An update on the dividend payment will be provided at the Half Year results on 30 July 2020, at which time the Board will also review remuneration of the Executive Directors.
The Company’s AGM will be held on 7 May 2020 as scheduled. As public gatherings of more than two people are currently prohibited, shareholders (other than two senior executives) will not be able to attend the meeting in person. Shareholders will still be able to vote by proxy using the usual online and postal facilities. A poll will be taken on each of the resolutions put to the meeting and the results will be posted on the Company website. Given the deferral of the proposed dividend payment, a resolution to approve a final dividend will not be put to Shareholders at the AGM.
The proposed acquisitions of the Collins Aerospace Military Global Positioning System business and Raytheon’s Airborne Tactical Radios business are still expected to complete in the coming months. As previously announced, appropriate financing is already in place to enable completion. Both acquisitions are conditional on the completion of the Raytheon and United Technologies Corporation merger, now due to complete on 3 April 2020, as well as other customary closing conditions and required US regulatory approvals.
The latest estimates show that the UK pension deficit funding position has not materially changed since the year-end despite the market volatility in equities and bonds. The Group’s assumptions on the funding of its pension schemes are prudent and appropriately reflect expected long-term asset returns and the term of the liabilities. The latest valuation of the Group’s Main Scheme is dated 31 October 2019 and, subject to market conditions, we intend to proceed with the funding contributions agreed as part of this valuation as outlined in the Preliminary Results Announcement.
Whilst the COVID-19 pandemic will impact our previous guidance for 2020, at this stage it is not possible to predict either the duration of the disruption or its impact on the 2020 outturn. A further update will be provided when appropriate.
02 Apr 20. Investor Group Completes Acquisition of Precinmac Precision Machining. Transaction to Support Precision Machining Company’s Next Chapter of Growth. Pine Island Capital Partners, LLC, and Bain Capital Credit, LP today announced the acquisition of Precinmac Precision Machining, a diversified manufacturer of high-precision machined components and assemblies for companies in the aerospace & defense, semiconductor, and general industrials sectors. Compass Partners Capital helped arrange the transaction and is investing alongside Pine Island and Bain Capital. Financial terms of the private transaction were not disclosed.
Precinmac has four divisions – Maine Machine Products Company, Hoppe Technologies, Trimaster Manufacturing, and HPG. The Company specializes in precision milling and turning, multi-axis machining, molding and grinding, close tolerance fabrication, and complex geometries. Precinmac is a critical supplier to prime contractors in the aerospace, defense, semiconductor, automation, and other sectors that rely on ultra-high precision manufacturing capabilities and expertise. From its four integrated manufacturing locations in the U.S. and Canada, the Company is able to provide broad capabilities and expertise to these demanding industries.
“Precinmac has a long history of delivering value to customers through design assistance, precision manufacturing, and assembly, and we see an opportunity to further grow the business among aerospace, defense, semiconductor, and industrial companies,” said new Board Chairman and Pine Island Capital Partner, Admiral Mike Mullen. “We look forward to a constructive partnership with management as we continue to grow the business while serving Precinmac’s customers and strengthening the supply chain for critical industries.”
“With the support of Pine Island, Bain Capital, and Compass, we are excited to continue to expand the business by assisting high requirements customers who need impeccable quality, additional capacity, and flawless service,” said Precinmac’s CEO, Eric Wisnefsky.
Houlihan Lokey, Inc. and Alantra served as financial advisors to the seller, GenNx360 Capital Partners. Legal advisors include Winston & Strawn, LLP to GenNx360, Willkie Farr & Gallagher, LLP to Compass, Paul Hastings LLP to Pine Island, and Davis Polk & Wardwell, LLP to Bain Capital.
About Precinmac Precision Machining
Precinmac (https://www.precinmac.com/) is a leading diversified manufacturer of high-tolerance precision machined components and assemblies. Precinmac has four divisions in the United States and Canada – Maine Machine Products Company, Hoppe Technologies, Trimaster Manufacturing, and HPG.
About Pine Island Capital Partners, LLC
Pine Island Capital Partners (https://pineislandcp.com/) is a U.S. based private equity firm that has combined an experienced investment team with a deeply-connected and accomplished partner group of former senior government and military officials. The extensive leadership, investing, and networking expertise of its partners enables the firm to make a significant improvement to its portfolio companies’ operations and business expansion. (Source: BUSINESS WIRE)
02 Apr 20. Torotel Announces Standex’s Termination of Merger Agreement. Torotel, Inc. (“Torotel”) (OTCMKTS:TTLO) announced today that Standex International Corporation (“Standex”) exercised on April 1, 2020, its right to terminate effective immediately the previously announced Agreement and Plan of Merger (the “Merger Agreement”) to acquire Torotel because the conditions to closing were not satisfied on or before March 31, 2020, as required by the Merger Agreement.
The Merger Agreement closing conditions included a required prior written consent from Collins Aerospace (“Collins”), which is consistent with the consent to change in control under Torotel’s long term supply agreement with Collins (the “LTA”). Despite Torotel’s proper notice and cooperation to obtain Collins’ consent, Collins refused to provide the consent to Torotel without receiving certain concessions from Standex outside of the LTA. Standex and Collins could not agree to terms, and Standex terminated the Merger Agreement.
“We are disappointed by Standex’s decision to terminate the Merger Agreement and frustrated by the inability to obtain the required consent from Collins. Our aerospace and defense business remains strong and we are well-positioned to continue as a leading designer and manufacturer of custom magnetics products,” said Herb Sizemore, Chairman, President and CEO of Torotel. (Source: BUSINESS WIRE)
02 Apr 20. Wiley Acquires Bio-Rad’s Informatics Spectroscopy Software and Spectral Databases. Latest Acquisition Enhances Wiley Science Solutions Furthering Laboratory Impact.
John Wiley and Sons Inc. (NYSE:JWA) (NYSE:JWB), a global leader in research and education, today announced the acquisition of Bio-Rad Laboratories, Inc.’s Informatics products including the company’s spectroscopy software and spectral databases. The acquisition adds expertise, content, and powerful software to Wiley’s Science Solutions segment. Terms of the agreement are not disclosed.
“Laboratory-generated data is at the heart of all research. We welcome these new spectroscopy products and services that will help enhance the Wiley Science Solutions portfolio,” said Judy Verses, Executive Vice President, Wiley Research. “These software and spectral libraries are invaluable interpretation tools for researchers who are making an impact in laboratories ranging from environmental to pharmaceutical, and from aerospace to toxicology.”
As one of the largest providers of spectral libraries in mass spectrometry and long-standing partner of Wiley, Bio-Rad’s Sadtler spectra databases in IR, Raman, UV-Vis and NMR allows Wiley to expand its offering in the spectroscopy market. With the acquisition of Bio-Rad’s KnowItAll desktop spectroscopy data system (SDS), server SDS, web-server SDS and ChemWindow chemical structure drawing software, Wiley is poised to enhance its support in vital areas of research data interpretation.
Wiley Science Solutions has been a trusted partner in publishing empirical, experimental, and validated data for laboratory solutions, aiming to improve the quality of chemical analysis and identification through spectral libraries and providing researchers with high-quality data collections to reduce errors and increase productivity in analytical, environmental, food, medicinal, and toxicology laboratories.
This acquisition underscores Wiley’s commitment to investing in technology-based solutions that support the important research and development taking place in government, university and commercial labs around the world.
BIO-RAD, CHEMWINDOW, and KNOWITALL are trademarks of Bio-Rad Laboratories, Inc. in certain jurisdictions. All trademarks used herein are the property of their respective owner. (Source: BUSINESS WIRE)
02 Apr 20. North American expansion for Aussie space company. Adelaide-based Myriota, a global nanosatellite and internet of things (IoT) connectivity company, has confirmed a North American expansion with the creation of Myriota Canada, which highlights the growth and leading-edge capability of Australia’s space industry. Significantly adding to its North American capability, the transaction, which is subject to Canadian regulatory approval, will see Myriota Canada acquire four satellites, a global network of ground station assets, and their associated spectrum licences.
The acquisition will increase Myriota’s capability to deliver low-cost, low-power, secure direct-to-orbit satellite connectivity for IoT. In return, exactEarth will receive a payment of C$600,000; of which a portion will be reinvested into the equity of Myriota.
Chief executive and co-founder of Myriota, Alex Grant, said that amid challenging global business conditions, Myriota is in a fortunate position to accelerate the company’s international expansion plans and allow multiple industries to access disruptively low-cost satellite connectivity.
The acquisition also signifies the creation of Myriota’s first North American office, with four exactEarth experts in satellite operations, satellite engineering and spectrum management forming Myriota’s on-the-ground team in Ontario, Canada.
“This acquisition is a huge opportunity for our business to grow its North American footprint. It will add industry-leading capabilities in key areas such as satellite operations, engineering and spectrum management from an experienced team, and will fast-track our development with established ground facilities and ground stations,” Grant explained.
“Canada’s geography, scale and economic footprint share many similarities to Australia; making it a perfect location for our team to grow and rollout our low-cost, secure direct-to-orbit satellite connectivity. The increased capability generated because of this acquisition will also allow us to provide 24/7 operations from our offices in Australia and Canada.”
ExactEarth CEO Peter Mabson will continue in his role as chairman of Myriota’s board; supporting Myriota to build relationships within the Canadian space industry post-acquisition.
“The divestment of these non-core exactEarth satellite communication assets achieves several strategic and financial objectives as we position ourselves in line with that of a pure-play data services business,” Mabson said.
“This transaction allows us to maintain access to AIS data from the satellites to support our service, and will enable us to focus on the large market opportunity in front of us with our second-generation constellation. Myriota is a company that exactEarth has invested in and one that we have built a strong business relationship with, and we look forward to continuing to support Myriota’s growth.”
The closing of the transaction is subject to receipt of all required regulatory approvals, including the approval of Innovation, Science and Economic Development (ISED) Canada for transfer of exactEarth radio spectrum licences. (Source: Space Connect)
02 Apr 20. Serco (SRP) says it had a strong first quarter with organic revenue growth of around 10 per cent. But with the uncertainty of the Covid-19 pandemic, it has withdrawn its guidance for the full year. Focusing on the public sector it currently sees no material threat to its ability to be paid by its customers. The group will defer £35m of VAT payments to early 2021. The 1.0p final dividend declared for 2019 has been withdrawn, saving £12m. At the start of the year, Serco had adjusted net debt of £215m and £508m of committed credit facilities with headroom of £286m. (Source: Investors Chronicle)
03 Apr 20. Texmaco sells off stake in defence firm. Indian firm Texmaco Rail and Engineering has announced the sale of a stake in its affiliated defence company, although the name of buyer has not been disclosed. The group said in a stock exchange filing on 1 April that it has divested a 10% stake in Texmaco Defence Systems and that the defence firm is now no longer a subsidiary. The transaction’s financial details were not revealed, although Texmaco Rail and Engineering said the total paid-up share capital of Texmaco Defence Systems is INR1 million (USD13,000). Texmaco Rail and Engineering has retained a 41% shareholding in the defence company, it said in the filing. (Source: Jane’s)
01 Apr 20. Howmet Aerospace, Leading Global Provider of Advanced Engineered Solutions, Launches as Standalone Company. Separation of Arconic Inc. into Two Standalone Companies Complete.
Howmet Begins Trading Today as “HWM” on the New York Stock Exchange.
Howmet Aerospace launches today as a leader in advanced engineered solutions after the separation of Arconic Inc. into two standalone companies – Howmet Aerospace Inc. and Arconic Corporation. Howmet Aerospace will start trading today on the New York Stock Exchange under the ticker “HWM.”
In 2019, the businesses comprising Howmet Aerospace generated more than $7bn in revenue, up five percent from the prior year, with more than 70 percent of Howmet’s revenue derived from the aerospace market.
The new company will be led by co-Chief Executive Officers John C. Plant, who will also serve as Executive Chairman of the Board, and Tolga Oal, who previously served as President of Arconic Engineered Structures. More about Howmet Aerospace and the leadership team can be found at https://www.howmet.com/.
Howmet has been a trusted brand for over 90 years. Today, Howmet Aerospace has the technological capabilities to support the innovation and growth of next-generation aerospace programs. Composed of engine products, fastening systems, engineered structures and forged wheels businesses, Howmet Aerospace is transforming the next phase of more fuel-efficient, quieter aerospace engines and sustainable ground transportation.
“Howmet Aerospace, an iconic and storied brand in the aerospace industry, today launches as a standalone company,” said Mr. Plant. “With strong market positions, differentiated technology and collaborative relationships across our customer base, the Company is well-positioned to benefit from a strong and growing aerospace market.” Mr. Plant continued, “Today is the culmination of a year of focus and hard work by our team to establish a strong and competitive company. We will build on that work and continue to serve our customers with precision-engineered and highly innovative products.”
About Howmet Aerospace
Howmet Aerospace Inc., headquartered in Pittsburgh, Pennsylvania, is a leading global provider of advanced engineered solutions for the aerospace and transportation industries. The Company’s primary businesses focus on jet engine components, aerospace fastening systems, and titanium structural parts necessary for mission-critical performance and efficiency in aerospace and defense applications, as well as forged wheels for commercial transportation. With nearly 1,300 granted and pending patents, the Company’s differentiated technologies enable lighter, more fuel-efficient aircraft to operate with a lower carbon footprint. In 2019, the businesses of Howmet Aerospace reported annual revenue of over $7bn. For more information, visit www.howmet.com.(Source: BUSINESS WIRE)
31 Mar 20. HAL Expects More Orders as It Completes Production of Su-30MKI. State-owned Hindustan Aeronautics Limited (HAL) has recorded a turnover of more than INR 21,100 crore ($3bn) for the financial year ending on 31 March 2020. The company said that the production facility of Su-30MKIs is expected to continue to be in operation as the Indian Air Force may opt for more fighter jets.
Hindustan Aeronautics Limited has completed the production of all 272 Su-30MKIs contracted to HAL by the Indian Air Force (IAF) during the current year and is expecting to get a few additional orders for the multi-role fighter jet, the company said in a statement on Tuesday.
India’s state-owned HAL was producing 272 Su-30MKI fighter jets on a license from Russia’s United Aircraft Corporation. The company, which is assembling each aircraft at $70.3m, also expects to continue the Nasik facility for the assembly of additional Su-30MKIs for the IAF. HAL set up a Su-30 (MKI) Refuelling and Overhaul (ROH) project stores facility in Nasik city in Maharashtra state in 2014. Sputnik reported last year that the state-owned firm had requested that the Defence Ministry provide an additional order for the assembly of 72 Su-30MKI fighters for about $5bn.
IAF chief Air Chief Marshal RKS Bhadauria, in a media interaction in October 2019, confirmed that the additional Sukhoi-30MKI fighters would be built by HAL in Nasik.
“We are moving towards ordering 12 more Sukhoi-30s. Whether we need some more in lieu of aircraft that are going to get phased out from 2025 onwards… we will have to take a look later. But at the moment, 12 is what is being followed up straightaway”, Bhadauria said.
HAL on Tuesday hoped that with additional Su-30MKI orders and the expected order for 83 domestically made MK1A LCA, “the order book is likely to attain a healthy position during the next financial year 2020-21”. For the financial year 2019-20, HAL recorded a turnover of over INR 21,100 crore ($3bn).
The IAF chief also provided details on upgrading the Sukhoi-30MKI with modern “radar and weapons capabilities and also tackling obsolescence management and electronic warfare aspects”.
Earlier this year, the IAF commissioned its first squadron of Su-30MKI with the BrahMos-A (Air) supersonic cruise missiles in the southern part of the country to counter threats emanating from the Indian Ocean Region. HAL has said that the avionics upgrade of the SU-30MKIs and BrahMos missile modifications would be a game-changer and is important for the future growth of the company. Currently, the Indian Air Force has been facing a shortage of over 250 fighter jets against a required strength of 42 squadrons (18-20 fighter jets in each). (Source: defense-aerospace.com/Sputnik News)
31 Mar 20. Mikros Systems Announces 2019 Year End Financial Results and Prospects For 2020. Mikros Systems Corporation (OTCQB: MKRS), a technology company specializing in electronic systems for advanced maintenance in military, industrial and commercial applications, announced today its financial results for 2019.
Revenues for 2019 were $6,366,226 compared to $8,561,346 in 2018, a decrease of $2,195,120, or 26%. The decrease was due principally to delays of follow-on contract awards and no ADEPT units produced in 2019.
Costs of sales were $2,279,823 in 2019 compared to $3,602,555 in 2018, a decrease of $1,322,732, or 37%. The decrease resulted from change in the mix of contracts generating revenues as compared to 2018. In 2019, Mikros did not produce any ADEPT units and all revenue was generated from engineering support services.
Engineering costs were $2,547,007 in 2019 as compared to $2,712,810 in 2018, a decrease of $165,803, or 6%. The decrease in 2019 was due to delays of follow-on contract awards and a shift of engineering personnel from revenue generating contracts resulting in such costs being included in general and administrative expenses. Net income decreased to $30,532 in 2019 as compared to $329,210 in 2018.
“We had a temporary setback last year,” commented Mikros’ newly appointed President Chuck Bristow. “After a seventeen-year run, the Navy decided to move on to a new generation of shipboard maintenance tools to replace our ADEPT product line. Now that the ADEPT program has ended, we are focused on advancing our ADSSS Condition-Based Maintenance solutions to serve additional ship classes and shipboard systems. These efforts resulted in an important new award to develop condition-based maintenance capabilities for the NATO Seasparrow Missile System, which will allow us to expand the SYM-3 system to two new Navy ship classes.”
In September 2019, Mikros was awarded a follow-on Delivery Order for the AN/SYM-3 system, valued at up to $21m, under its long-term Indefinite Delivery Indefinite Quantity (IDIQ) contract with the Navy’s Port Hueneme Division. The SYM-3 is used for remote monitoring of the combat system and data analytics aboard the Littoral Combat Ship (LCS). During 2019, the Company completed installation of SYM-3 on three additional LCS ships, with a fourth ship in process. In 2020, Mikros expects to expand the SYM-3 program to include additional combat systems and accelerate the pace of installation on Navy ships.
“The SYM-3 program has gone from strength to strength,” said Lori Ogles, Mikros Vice President of Programs and Business Development. “LCS installations will continue throughout 2020 and we expect to receive additional funding to extend the SYM-3 for other onboard LCS equipment. The new NATO Seasparrow version of the SYM-3 extends the system to aircraft carriers and “big deck” amphibious assault ships, which represents a great potential for follow-on production on these two new platforms.”
Mikros’ Manufacturing and Depot facility in Largo FL will continue to manufacture “smart sensor” modules for the SYM-3 program and pursue new contract manufacturing opportunities. The Mikros MindR® product line, a low-cost commercial version of the SYM-3, has been deployed in several pilot projects, which may result in significant revenues over the next year.
Mikros Chief Executive Officer Tom Meaney added, “We had a long and successful program with ADEPT on Navy cruisers and destroyers, a testament to our technical strengths and our participation in the Small Business Innovation Research or SBIR program. We expect to more than compensate for the closeout of the ADEPT program by pursuing new opportunities for the SYM-3. Emerging opportunities for condition-based maintenance systems can be found across the entire Navy fleet. We have also renewed our commitment to the SBIR program. We received one new award in 2019 and have already submitted multiple proposals this year, any of which may evolve into new and exciting business segments, particularly in the rapidly expanding field of unmanned vehicles. We are confident that we have in place the best people to execute our business plan and serve our important DoD customers, and we remain very optimistic about the future growth opportunities available to us.”
About Mikros Systems
Mikros Systems Corporation is an advanced technology company specializing in the development and production of electronic systems technology for advanced maintenance in military, industrial and commercial applications. Classified by the U.S. Department of Defense as a small business, its capabilities include technology management, electronic systems engineering and integration, radar systems engineering, command, control, communications, computers and intelligence systems engineering, and communications engineering. For more information on Mikros, please visit: www.mikrossystems.com. (Source: PR Newswire)
01 Apr 20. QinetiQ postpones decision on dividend until later in year. British defense company Qinetiq Group said it would postpone a decision on whether to propose paying a full-year dividend until later in 2020, citing uncertainty caused by the coronavirus pandemic.
The company, whose main customers are governments, said it would provide an update on the impact that the pandemic is having on its business at the time of its full-year results on May 21.
“Our customers face unprecedented challenges in overcoming COVID-19, while continuing to deliver critical defense and security capabilities; we play a key role in supporting them to do this,” QinetiQ CEO Steve Wadey said in a statement on Wednesday. (Source: Reuters)
01 Apr 20. QinetiQ (QQ.) says performance in the fourth quarter to 31 March has been in line with expectations despite the Covid-19 outbreak. Still, the group is postponing the decision on whether to propose a final dividend until later in the year. The pandemic is affecting all key markets and there has been some disruption to customer trials and product shipments. QinetiQ expects to end the year with £60m of net cash and has an undrawn committed revolving credit facility of £275m. To preserve cash, the chief executive and chief financial officer will see their salaries reduced by a third while the wider board will take a 25 per cent pay cut. Buy. (Source: Investors Chronicle)
31 Mar 20. Rolls-Royce targets in jeopardy as pandemic brings air travel slump. British aero-engine maker Rolls-Royce (RR.L) will likely have to slash its 2020 cash flow target after airline customers parked hundreds of planes due to the coronavirus pandemic, analysts said.
Rolls last updated the market at the end of February, when it forecast 2020 free cash flow of 1bn pounds ($1.2bn), excluding any material impact from COVID-19. The company is paid by airlines based on how many hours its engines fly, and since its update air travel has slumped.
Jefferies analyst Sandy Morris said he could see free cash flow drop into negative territory this year, even with the firm’s 400m pound cost cuts, based on flying hours which could be down about two-thirds for four months of 2020.
But he said the company could withstand that. “Given that Rolls-Royce started the year with 1.36bn pounds of cash it’s not as hamstrung as I think some people portray,” said Morris, who rates the company a “buy”.
Vertical Research Partners analyst Robert Stallard, who rates Rolls “sell”, said airlines would likely retire many older aircraft earlier than expected, hitting revenue Rolls earns from spare parts and servicing in its aftermarket business.
“While this downcycle is set to hurt all aerospace suppliers, Rolls looks particularly vulnerable in our view. This is a company that was not in the best of financing shape before this downcycle hit,” he said.
A Rolls-Royce spokesman said the company had a robust financial position with 7bn pounds of liquidity at the end of 2019, including a 2.5bn pound credit facility.
“We are closely monitoring the situation and taking prudent measures to conserve cash, such as reducing or deferring discretionary spend. Our good starting position and the measures we have taken, and will continue to take, give us confidence in the ongoing financial resilience of our business,” he said.
General Electric Co’s (GE.N) aviation unit, a rival to Rolls in making engines for Boeing and Airbus aircraft, said last week it would cut its U.S. workforce by about 10%.
Rolls declined to comment on whether it would be furloughing staff under a British government job retention scheme.
According to analysis by travel data firm Cirium, flying hours on Rolls-Royce powered flights reduced from 20,421 hours on Jan. 3 to 4,664 on March 29.
Rolls started this year having got to grips with a long-running engine problem and having made progress with a multi-year turnaround plan which had seen it cut costs, and focus on raising free cash flow to 873m pounds for 2019 from a nadir of 100m pounds for 2016.
It relies on aerospace for just over half of its 15bn pounds of annual revenues, deriving the rest from its defense and power systems businesses. The company suspended production in its British aero-engine factories for a week last week, and the facilities are likely to return with reduced activity.
Shares in the company have dropped 45% in the last month, hitting their lowest level for more than 10 years. As for the timing of any market update, Morris said Rolls’ contracts with airlines meant the reduction in flying hours may not have come through yet, but it would. “At some point there will be a reckoning,” he said. (Source: Reuters)
30 Mar 20. Microsoft divests from Israeli facial-recognition startup. Microsoft said Friday it is pulling its investments from a facial-recognition startup that scans faces at Israeli military checkpoints, even though the tech giant couldn’t substantiate claims that the startup’s technology is used unethically.
Microsoft late last year hired former U.S. Attorney General Eric Holder to lead a team of lawyers to audit Israeli firm AnyVision.
AnyVision had announced a $74m investment in June from a group including Microsoft’s venture capital arm. The firm and its Microsoft backing attracted public scrutiny as the Israeli military installed face scanners at border crossings where Palestinians enter Israel from the West Bank.
Holder’s team was asked in October to determine whether AnyVision’s technology applications comply with Microsoft’s ethical principles against using facial recognition for mass surveillance. Microsoft and AnyVision jointly announced Friday that the audit didn’t substantiate any breach of Microsoft’s principles.
A statement from the Washington-based law firm Covington & Burling, where Holder works, said that available evidence “demonstrates that AnyVision’s technology has not previously and does not currently power a mass surveillance program in the West Bank that has been alleged in media reports.” The law firm said the audit included a review of accounting records and a site visit to AnyVision’s facilities in Holon, Israel.
But Microsoft also said Friday it is still divesting its stake in the startup, and will stop making minority investments in companies that sell facial-recognition technology.
The company based in Redmond, Washington, said that the audit underscored the challenges of being a minority investor in a company selling sensitive technology because it may not have enough oversight or control over how the technology is used. AnyVision has previously said its technology is used at border crossings similarly to how facial recognition is used at some airports. (Source: Defense News)
27 Mar 20. Small defense businesses see cash issues during coronavirus outbreak. More than 60 percent of small companies in the defense supply chain are seeing disrupted cash flow, according to a new survey put forth from the National Defense Industrial Association.
“This survey shows how the defense lifeline runs through small business,” Hawk Carlisle, NDIA’s president and CEO, said in a statement. “These companies must survive if the defense industrial base is to remain the best in the world on other side of COVID-19.”
COVID-19 is a newly discovered coronavirus — a family of viruses, some of which cause disease in people and animals, named for crownlike spikes on their surfaces. As of Friday, 458 small businesses had responded to the survey, which will remain open through April 10. Fifty-five percent of respondents have less than $5m in annual revenue, and 70 percent have less than 50 employees.
Sixty-two percent of the respondents have seen disrupted cash flow as a result of the economic downturn. Primarily, those have come as cuts to billable hours or delayed payments from prime contractors because of shutdowns or telework. A lack of telework options is also an issue for contractors.
Notably, 54 percent of respondents say they cannot work on a contract because they are currently under a shelter-in-place order.
And optimistically, 69 percent do not expect cost overruns on fixed-price contracts as a result of the coronavirus-related disruptions. Those that do expect such overruns predict them to be in the 10-20 percent range. The results of the survey were delivered Friday to Ellen Lord, the undersecretary of defense for acquisition and sustainment. Speaking to reporters on Wednesday, Lord said she is closely watching the lower tier of the supply chain for weak spots that may appear.
Last week, the Defense Department announced new measures to increase progress payments out to both small and large companies to ensure they are able to keep work moving on schedule. (Source: Defense News)
30 Mar 20. Raytheon and United Technologies Obtain All Regulatory Approvals to Close Merger of Equals.
– All regulatory approvals have been obtained
– Merger of equals expected to close immediately following United Technologies’ separations of Carrier and Otis on April 3, 2020
– Raytheon Technologies stock will trade on the NYSE under ticker symbol “RTX”
Raytheon Company (NYSE: RTN) and United Technologies Corporation (NYSE: UTX) announced that they have received the necessary regulatory approvals for their all-stock merger of equals and expect to close the merger prior to the opening of trading on the New York Stock Exchange (NYSE) on Friday, April 3, 2020, the distribution date for United Technologies’ spin-offs of Carrier and Otis.
Upon the closing of the merger, United Technologies will be renamed Raytheon Technologies Corporation, and its common stock will trade on the NYSE under the ticker symbol “RTX.” The last full day of trading in the shares of Raytheon Company is expected to be Thursday, April 2, 2020, and upon the closing of the merger on Friday, April 3, 2020, each share of Raytheon Company common stock will be converted into the right to receive 2.3348 Raytheon Technologies shares. The first day of trading for Raytheon Technologies shares is expected to be Friday, April 3, 2020.
“We are pleased to have received all the necessary regulatory approvals, which clears the way for the successful completion of our merger of equals,” said Tom Kennedy, Raytheon Chairman and CEO. “We are more than just two businesses coming together – Raytheon Technologies will be uniquely positioned to deliver advanced and innovative solutions to our customers while delivering significant value to shareowners.”
“We are excited about the future of Raytheon Technologies. I am exceptionally proud to lead this new organization and the talented people who serve our nation, its allies and our commercial aerospace customers so well,” said Greg Hayes, United Technologies Chairman and CEO. “I also want to thank both the Raytheon and UTC teams who have worked tirelessly to complete the merger and integration work and to stand up both Carrier and Otis as independent public companies, creating three world class organizations.”
The regulatory process requires the divestitures of Raytheon’s military airborne radios business and United Technologies’ military Global Positioning System (GPS) and Space Optical Systems businesses, which are all expected to be completed following the merger.
Immediately prior to the closing of the merger, United Technologies will effect the separations of its Otis and Carrier businesses into separate publicly-traded companies. Carrier will trade under the ticker symbol “CARR” on the NYSE and Otis will trade under the ticker symbol “OTIS” on the NYSE. United Technologies shareowners will receive 0.5 of a share of Otis and 1 share of Carrier for each share of United Technologies common stock held as of 5:00 p.m. EDT on March 19, 2020, the record date for the distributions. (Source: PR Newswire)