Sponsored by TCI International Inc.
04 Feb 21. Peraton Announces New Business Sectors and Executives. After the successful completion of Peraton’s transformational acquisition of Northrop Grumman’s integrated mission support and IT solutions business on February 1, Peraton has aligned the company around four business sectors and appointed five new members to its executive leadership team.
The four business sectors and their presidents are:
- Space & Intelligence: This sector incorporates several new marquee programs coming in from the acquisition that will dramatically expand Peraton’s footprint in key space and intelligence customer markets. It will be led by Roger Mason, previously president, Space, Intelligence & Cyber at Peraton.
- Cyber Mission: This sector delivers full-spectrum cyber programs, information operations, and technical solutions that support intelligence, defense, and civil markets. It will be led by Tom Afferton, previously vice president, Defense & Intelligence at Northrop Grumman.
- Global Defense & Security: This sector incorporates several new programs that deepen Peraton’s ability to provide integrated technology solutions to our global defense customers and significantly expand the company’s support to the Department of State and Department of Homeland Security. It will be led by John Coleman, previously president, Defense & Homeland Security at Peraton.
- Civil & Health: This sector delivers advanced, mission-specific technology solutions for citizen and human services agencies, as well as military, civilian, state and local, and global health customers covering critical areas such as COVID-19, Medicare, and citizen-centric services. It will be led by Tarik Reyes, previously vice president, Civil & Health at Northrop Grumman.
Additionally, Peraton has created three new executive leadership roles to support program excellence, strategy execution, and a holistic approach to diversity, equity and inclusion:
- Chief Performance Officer: Erik Buice is responsible for ensuring the adoption and application of quality and certification standards across Peraton’s portfolio, and establishing critical, value-add performance metrics for the enterprise. Buice was previously sector vice president and general manager of Northrop Grumman’s Information Solutions and Services division.
- Chief Strategy Officer: Chris Valentino is responsible for leading the strategic market creation of Peraton by operationalizing the company’s strategy and partnering with company leaders and managers for execution. Valentino was previously vice president, Information Warfare and Cyber Survivability at Northrop Grumman.
- Chief Diversity, Equity and Inclusion (DE&I) Officer: Laila Salguero is responsible for working across Peraton’s sectors and functions to help align the company’s DE&I goals with measurable business outcomes. She also leads the company’s ethics and compliance function and is charged with establishing and executing programs that support enterprise DE&I efforts, including the company’s employee resource groups. Salguero was previously vice president, Corporate Responsibility at Peraton.
“I am thrilled to welcome Tom, Tarik, Erik, Chris, and Laila to Peraton’s executive leadership team,” said Stu Shea, chairman, president and CEO. “As Peraton expands we will be faced with a complex range of new opportunities and challenges across our functions and businesses, and I am confident that our new leaders will be integral to Peraton’s success providing highly differentiated national security solutions and technologies to essential government agencies.” (Source: PR Newswire)
04 Feb 21. AMETEK Announces Fourth Quarter and Full Year Results. AMETEK, Inc. (NYSE: AME) today announced its financial results for the fourth quarter and full year ended December 31, 2020.
AMETEK’s fourth quarter 2020 sales were $1.20bn, an 8% decline compared to the fourth quarter of 2019. Operating income in the quarter was $298.1m, up slightly versus last year’s fourth quarter and operating margins were a record 24.9%, up 210 basis points over the same period last year.
On a GAAP basis, fourth quarter earnings per diluted share were $0.95. Adjusted earnings in the quarter were $1.08 per diluted share, equal to the fourth quarter of 2019. Adjusted earnings adds back non-cash, after-tax, acquisition-related intangible amortization of $0.13 per diluted share. A reconciliation of reported GAAP results to adjusted results is included in the financial tables accompanying this release and on the AMETEK website.
“AMETEK completed a challenging year with an excellent fourth quarter,” said David A. Zapico, AMETEK Chairman and Chief Executive Officer. “We continued to see solid sequential sales and order improvements in the quarter despite the ongoing impacts of the COVID-19 pandemic. Furthermore, we delivered record operating results and substantial margin expansion in the fourth quarter, with EBITDA margins a robust 30.1%.”
“Additionally, our operational strength resulted in record levels of cash flow in the fourth quarter with operating cash flow up 13% to $386m and free cash flow up 16% to $349m representing 158% of net income, further strengthening our balance sheet and liquidity position,” noted Mr. Zapico.
Electronic Instruments Group (EIG)
EIG sales in the fourth quarter were $819.4 m, down 7% from the fourth quarter of 2019. EIG’s operating income in the quarter increased 3% to a record $236.0 m and operating income margins were a record 28.8%, up 270 basis points over the prior-year period.
“EIG delivered outstanding operating results in the fourth quarter,” noted Mr. Zapico. “While year over year sales were down in line with expectations, we saw strong sequential sales improvement. Additionally, EIG’s operational initiatives drove significant margin expansion and record operating margins.”
Electromechanical Group (EMG)
Sales for EMG in the fourth quarter were $379.5m, down 11% from the same quarter in 2019. EMG’s fourth quarter operating income was $79.8m and operating income margins were 21.0%, up 110 basis points versus the same period last year.
“EMG also delivered strong operating results in the quarter,” added Mr. Zapico. “As EMG’s topline was negatively impacted by the divestiture of Reading Alloys and weaker demand due to the global pandemic, EMG drove impressive operating margin expansion through our cost and asset management initiatives.”
“This last year presented unprecedented challenges, both personally and professionally, for everyone at AMETEK. Our employees stepped up to these challenges and our businesses delivered results that consistently exceeded our expectations,” continued Mr. Zapico.
“Our success in 2020 was a testament to the strength of the AMETEK Growth Model, our ability to navigate through difficult economic environments, and the tremendous efforts of our talented workforce. We remain committed to investing in our businesses and our people to drive long-term, sustainable growth,” noted Mr. Zapico.
“While uncertainty remains, our diverse end markets, record backlog and solid order momentum provide a positive outlook for the year ahead. For 2021, we expect overall sales to be up mid-single digits on a percentage basis compared to 2020. Adjusted earnings per diluted share are expected to be in the range of $4.18 to $4.30, an increase of 6% to 9% over the comparable basis for 2020,” he added.
“For the first quarter of 2021, overall sales are expected to be down low to mid-single digits compared to the same period last year. Adjusted earnings in the quarter are anticipated to be in the range of $0.97 to $1.02 per share,” concluded Mr. Zapico. (Source: PR Newswire)
04 Feb 21. Ball Reports Strong 2020 Results.
– Full-year and fourth quarter U.S. GAAP earnings per diluted share of $1.76 and 68 cents, respectively
– Full-year and fourth quarter comparable earnings per diluted share of $2.97 and 81 cents, respectively; up 17% and 14% year-over-year, respectively
– Full-year and fourth quarter global beverage can volumes up 5% and 12%, respectively
– Aerospace contracted backlog of $2.4bn; year-over-year unfunded backlog increased 30% to $5.5bn
– Launched industry-leading framework to advance circular economy for Ball operations and aluminum packaging
– Hired over 3,000 employees to support long-term aluminum packaging and aerospace business growth
– Strong balance sheet, liquidity and cash from operations enabled over $1.1 bn of growth capital investments
– Positioned to exceed long-term diluted earnings per share growth goal of 10 to 15%
Ball Corporation (NYSE: BLL) today reported, on a U.S. GAAP basis, full-year 2020 net earnings attributable to the corporation of $585m (including net after-tax charges of $402 m, or $1.21 per diluted share for business consolidation and other non-comparable items), or $1.76 per diluted share, on sales of $11.8bn, compared to $566 m net earnings attributable to the corporation, or $1.66 per diluted share (including net after-tax charges of $295m, or 87 cents per diluted share for business consolidation and other non-comparable items), on sales of $11.5bn n 2019. Ball’s full-year 2020 comparable net earnings were $987m, or $2.97 per diluted share, compared to $861m, or $2.53 per diluted share in 2019.
Fourth quarter 2020 net earnings attributable to the corporation, on a U.S. GAAP basis, were $227 m, or 68 cents per diluted share, on sales of $3.1bn compared to $160m, or 48 cents per diluted share, on sales of $2.7 bn in the fourth quarter of 2019. Ball’s fourth quarter 2020 comparable net earnings were $272m, or 81 cents per diluted share versus fourth quarter 2019 comparable net earnings of $238m, or 71 cents per diluted share.
Results reflect the 2019 sale of the company’s Argentine steel aerosol business and Chinese beverage can assets, and new segment reporting for the company’s beverage packaging, EMEA business and other non-reportable results. References to volume data represent units shipped, and year-over-year global beverage volumes referenced exclude the impact of the 2019 sale of the Chinese beverage can assets. Details of comparable segment earnings, business consolidation activities, business segment descriptions and other non-comparable items can be found in the notes to the unaudited condensed consolidated financial statements that accompany this news release.
During the quarter, the company posted 14 percent comparable earnings per diluted share growth on 12 percent global beverage volume growth and 18 percent growth in funded and unfunded aerospace backlog. In addition, the successful fourth quarter startup of the company’s aluminum cup manufacturing facility in Rome, Georgia, will support the North American retail launch of the new aluminum cup during the first half of 2021.
“We finished 2020 with positive momentum. Significant demand growth for our aluminum packaging products and aerospace technologies continues, full-year comparable diluted earnings per share increased 17 percent, and our strong balance sheet and cash flow from operations underpinned $1.1 bn of capital investments to address sustainable growth across our global operations. Our company continues to be well-positioned, and our focus remains on our employees’ safety, our customers’ success, the efficient startup of various multi-year, EVA-enhancing capital projects, and the training and development of our workforce to ensure value creation for our stakeholders in 2021 and beyond,” said John A. Hayes, chairman and chief executive officer.
Beverage Packaging, North and Central America
Beverage packaging, North and Central America, comparable segment operating earnings for full-year 2020 were $683 m on sales of $5.1 bn compared to $555m on sales of $4.8bn in 2019. For the fourth quarter 2020, comparable segment operating earnings were $139m on sales of $1.3 bn compared to $139m on sales of $1.1bn during the same period in 2019.
Full-year comparable segment earnings increased by 23 percent supported by mid-single-digit volume growth, benefits from new contractual terms, higher specialty mix and improved operational performance offset by startup and labor costs. In the fourth quarter, 11 percent volume growth offset $25 m of startup costs related to capacity expansion projects in Glendale, Arizona, and Pittston, Pennsylvania, that are expected to be online in the first and second quarters of 2021, respectively, resulting in flat comparable segment earnings versus the fourth quarter of 2019. Demand continues to outstrip supply, and the business will continue to address consumers’ significant demand by leveraging production from mid-2020 commissioned can manufacturing lines in Rome, Georgia, and Fort Worth, Texas, and the short-term benefit of imported cans from our global network in 2021 and 2022.
To deliver longer-duration contracted volume growth and align with our customers’ can-filling investments, additional can manufacturing investments are anticipated beyond 2021. The company recently announced construction of a new aluminum end manufacturing facility in Bowling Green, Kentucky, to align end capacity with growing can demand. The new Bowling Green facility is scheduled to begin production in 2022.
Beverage Packaging, EMEA
Beverage packaging, EMEA, comparable segment operating earnings for full-year 2020 were $354 m on sales of $2.9bn compared to $351m on sales of $2.9bn in 2019. For the fourth quarter 2020, comparable segment operating earnings were $106 m on sales of $768 m compared to $74 m on sales of $642 m during the same period in 2019. Beginning in 2020, current and historical quarterly results for the company’s existing facilities in Cairo, Egypt, and Manisa, Turkey, have been consolidated into the segment.
Full-year comparable segment earnings reflect 5 percent segment volume growth following the second half demand recovery associated with strong at-home consumption trends in the U.K., Nordics and Russia. In the fourth quarter, 20 percent segment volume growth and improved customer and specialty mix offset slightly by higher labor costs led to a 43 percent increase in comparable segment earnings. Packaging mix shift to sustainable aluminum cans for traditional and non-traditional beverages continues to accelerate, and additional beverage can line investments in the U.K., Czech Republic and Russia are on track to support regional contracted demand in 2021 and beyond.
Beverage Packaging, South America
Beverage packaging, South America, comparable segment operating earnings for full-year 2020 were $280 m on sales of $1.7bn compared to $288m on sales of $1.7bn in 2019. For the fourth quarter 2020, comparable segment operating earnings were $107m on sales of $529 m compared to $95 m on sales of $460m during the same period in 2019.
Segment volume ended the year and quarter up 11 percent and 12 percent, respectively. Full-year earnings reflect the extreme demand volatility experienced in the second quarter and the significant demand rebound heading into the seasonally strong fourth quarter. In Brazil, demand remains strong and continues to outstrip supply as small grocery stores and gas stations continue to emphasize recyclable aluminum beverage packaging over returnable glass.
To support contracted volume growth and align with our customers’ brewing capacity additions and can-filling investments across South America, additional can manufacturing investments are anticipated in 2021 and beyond. The previously announced multi-line facility in Frutal, Brazil, will begin production in the second half of 2021.
Aerospace comparable segment operating earnings for full-year 2020 were $153m on sales of $1.7 bn compared to $140 m on sales of $1.5bn in 2019. For the fourth quarter, comparable segment operating earnings were $3m on sales of $420 m compared to $37m on sales of $398 m. Contracted backlog ended the year at $2.4bn and year-over-year unfunded backlog consisting of contracts already won, but not yet booked into current contracted backlog, increased 30 percent to $5.5bn.
Segment results were strong for the full-year and fourth quarter despite inefficiencies created from tighter safety protocols, certain supply chain inefficiencies and costs due to COVID-19. The company continues to win defense, climate change and Earth-monitoring contracts to provide mission-critical programs and technologies to U.S. government, defense, intelligence, and reconnaissance and surveillance customers. Multiple projects to expand manufacturing capacity, test capabilities engineering, and support workspace remain on track.
Full-year results in non-reportable reflect higher year-over-year undistributed corporate expenses, the impact of the 2019 sale of the Chinese beverage can assets and Argentine steel aerosol business, lower operating results in the remaining non-reportable beverage businesses, and start-up costs in the recently launched aluminum cup business. The current and historical results from the existing facilities in Cairo, Egypt, and Manisa, Turkey, have been consolidated into the beverage packaging, EMEA segment beginning in 2020.
The results for the company’s global aluminum aerosol business and beverage can manufacturing facilities in India, Saudi Arabia and Myanmar and investments in the company’s new aluminum cup business continue to be reported as non-reportable segments. During the quarter, the company’s global aluminum aerosol volumes increased high-single-digits, excluding the impact of the recently acquired Brazilian facility, and the aluminum cup business successfully ramped up production at its new Rome, Georgia, manufacturing facility. Multi-channel, retail shipments of aluminum cups are expected to commence in the first half of 2021. In the fourth quarter, the company recorded higher corporate costs associated with compensation and benefits costs as well as investments to support a 15 percent higher year-over-year labor base.
“Our company generates significant cash from operations, and we will continue to allocate significant capital to organic growth investments while continuing to return value to shareholders. In 2020, capital expenditures exceeded $1.1 bn, and given the substantial growth in contracted volumes and backlog, total capital expenditures are expected to exceed $1.5 bn in 2021, to support additional EVA-enhancing projects,” said Scott C. Morrison, executive vice president and chief financial officer.
“As we embark on our 141st year in operation, our company has never been stronger and the opportunities never so vast. We achieved record 2020 results because of our team’s ability to adapt and work safely together while also leveraging our Drive for 10 vision and enduring culture to guide our journey through unforeseen challenges and emerging opportunities. The momentum in our businesses is accelerating, and we continue to hire and develop a diverse workforce and mentor next-generation leaders to execute multiple growth projects as efficiently and safely as possible with our employees, customers and supply chains. In 2021 and beyond, we look forward to continuing to grow our cash from operations and EVA dollars on an even larger capital base while returning capital to our shareholders and exceeding our long-term diluted earnings per share growth goal of at least 10 to 15 percent,” Hayes said. (Source: PR Newswire)
04 Feb 21. Rolls-Royce disposal plan banks 150m euros from Bergen Engines sale. Britain’s Rolls-Royce agreed to sell its Bergen Engines unit to Russia-based TMH Group for net proceeds of 150m euros ($180m), making initial progress with a disposal plan aimed at helping it survive the pandemic. The aero engines-maker is aiming to raise £2bn in total from asset sales, and the disposal of Norwegian-based Bergen announced on Thursday follows that of another small business, its civil nuclear instrumentation unit, last December. COVID-19 has shattered Rolls-Royce’s finances because it is paid by airlines on a flying-hours basis, and the company warned last week that travel would be even more constrained than it expected this year, meaning higher cash outflows.
The major part of Rolls-Royce’s disposal plan will be the sale of its Spain-based ITP Aero. Analysts have said smaller units would make up the remainder of the disposal target.
“The sale of Bergen Engines is a part of our ongoing portfolio evaluation to create a simpler, more focused group and contributes towards our target to generate at least 2 billion pounds from disposals,” Rolls-Royce CEO Warren East said.
From its factory in Norway, Bergen makes medium speed gas and diesel engines for marine and power generation customers and employs about 950 people. It generated revenues of £239m in 2019, said Rolls-Royce. TMH Group is a supplier of rail rolling stock and will fold Bergen into its TMH International branch, said the Rolls-Royce statement. (Source: Reuters)
04 Feb 21. WesCom Group acquires PW Defence Ltd. World-leading emergency distress signal manufacturer WesCom has expanded its presence in the defence sector by acquiring UK-based defence signalling manufacturer, PW Defence Ltd. (PWD) effective from today (1 February 2021). The acquisition will enable WesCom to expand its defence product portfolio and international sales network, whilst benefitting from new manufacturing and testing facilities. WesCom, which is headquartered in Havant, Hampshire, has a long history in the defence market and is the supplier of choice for specialist pyrotechnic signalling & illumination, training & simulation and obstacle clearance products. PW Defence, which is based in Draycott, Derbyshire, has a similar heritage and respected product range, with the addition of security products, and so is a natural fit.
WesCom Chief Executive Officer, Ross Wilkinson, says, “This acquisition accomplishes a significant step forward in the strategy to expand our footprint within the global defence sector. It will enable the business to offer a much wider product portfolio to an expanded customer base.
“The purchase of PW Defence will allow us to further enhance our operational capability with a UK-based, high-class manufacturing and testing facility.”
03 Feb 21. Triumph Group Reports Third Quarter Fiscal 2021 Results.
Positive Free Cash Flow in the Quarter.
Maintains Full Year Fiscal 2021 Net Sales Guidance.
Triumph Group, Inc. (NYSE: TGI) (“Triumph” or the “Company”) today reported financial results for its third quarter of fiscal year 2021, which ended December 31, 2020.
Third Quarter Fiscal 2021
- Net sales of $426.0m
- Operating loss of $35.0m with operating margin of (8%); adjusted operating income of $38.1m with adjusted operating margin of 9%
- Net loss of $68.1m, or ($1.30) per share; adjusted net income of $4.9m, or $0.09 per diluted share
- Cash flow provided by operations of $43.9m; free cash flow of $37.7m
Full-Year Fiscal 2021 Net Sales Guidance
- Net sales between $1.8 – $1.9bn
“Revenues in Systems & Support increased for the second consecutive quarter driven by higher military volumes and partial rate recovery on Airbus programs. Organic revenue decreased compared to the prior year period due primarily to expected declines in Aerospace Structures associated with planned reductions from our portfolio transformation and the ongoing COVID-19 pandemic,” stated Daniel J. Crowley, Triumph’s chairman, president and chief executive officer. “We continued executing our plan to exit legacy programs in Aerospace Structures with only the 747-8 remaining to close out later this calendar year. Revenue from our Systems business now exceeds Structures sales volume.”
Mr. Crowley continued, “Our cash generation in the third quarter demonstrated strong working capital management, the benefits of robust cost reduction actions and lower expenses on 747-8 close-out. Profitability on an adjusted basis improved sequentially in the quarter, demonstrating measurable recovery towards pre-COVID levels across both business units. Triumph remains focused on protecting the health and safety of our people, conserving cash and partnering with our customers to ensure we are best positioned for recovery for the benefit of all our stakeholders.”
Third Quarter Fiscal Year 2021 Overview
After accounting for the impact of the divestitures, sales for the third quarter of fiscal 2021 were down 32% organically from the comparable prior year period. The decline was driven by planned reductions on sunsetting and transitioned programs, impacts of the COVID-19 pandemic and resulting production rate decreases primarily on commercial programs, partially offset by increases in military programs.
Third quarter operating loss of $35.0m included $45.3m loss on held for sale assets, $23.7m impairment of rotable inventory driven legacy aircraft retirements and $4.1 m of restructuring costs associated with facility closures. Net loss for the third quarter of fiscal year 2021 was $68.1m, or ($1.30) per share. On an adjusted basis, net income was $5.0m, or $0.09 per share.
The number of shares used in computing diluted earnings per share for the third quarter of 2021 was 52.8m.
Backlog, which represents the next 24 months of actual purchase orders with firm delivery dates or contract requirements, was $2.28bn, down as expected compared to the prior year period and on a sequential basis due to divestitures, sunsetting programs and recent production rate reductions, but partially offset by military program increases in Systems & Support.
For the third quarter of fiscal 2021, cash flow provided by operations was $43.9m, reflecting improved working capital and operating margins and included liquidation of approximately $10.0 m in prior period advances against current period deliveries.
Based on anticipated aircraft production rates and MRO demand, including the impacts of pending program exits and no extended shut-down of operations due to the pandemic, the Company continues to expect that net sales for fiscal year 2021 will be approximately $1.8 to $1.9bn.
The Company expects cash flow to be break even to positive in the fourth quarter of the fiscal year. Therefore, the Company expects cash used in operations and free cash use for the full fiscal year to be on par or moderately lower than the first nine months.
The Company’s outlook excludes the impact of the pending sale of our Composite businesses and any potential future divestitures. (Source: PR Newswire)
03 Feb 21. Daimler to split in two and list truck unit separately. Carmaker aims to separate lorry business from Mercedes-Benz cars and float it this year in Frankfurt. Daimler wants to focus on the shift to electric power. Daimler will split in two and list its truck unit separately from its Mercedes-Benz car business, allowing both companies to focus on the shift towards electric power and changing regulations. Shareholders in Daimler will receive a “significant majority stake” in the new unit, the company said on Wednesday. It aims to list the truck company this year in Frankfurt. The remaining car business will be renamed Mercedes-Benz “at the appropriate time”. The move has been expected for some time, and echoes similar moves by Volkswagen to carve out its lorry business separately to its passenger car operations. “This is a historic moment for Daimler,” chief executive Ola Kallenius said. “It represents the start of a profound reshaping of the company. Mercedes-Benz Cars & Vans and Daimler Trucks & Buses are different businesses with specific customer groups, technology paths and capital needs.” He added: “Both companies operate in industries that are facing major technological and structural changes. Given this context, we believe they will be able to operate most effectively as independent entities, equipped with strong net liquidity and free from the constraints of a conglomerate structure.” (Source: FT.com)
02 Feb 21. Metamaterial Acquires Assets and IP of Swiss Lens Manufacturer Interglass. Metamaterial Inc. (“Company” or “META”) (CSE: MMAT) a developer of high-performance functional materials and nanocomposites, today announced it has acquired specialized lens casting production equipment and intellectual property, including more than 70 patents, from Interglass Technology AG (Switzerland) for USD 800,000. META will invest and expand its capabilities in design, development, and manufacturing of metaFUSION™ products for smart eyewear. This highly integrated solution combines embedded metamaterial and functional film elements with precision cast corrective lenses, which are required by over 50% of potential users in the market.
“One of the challenges in augmented reality (AR) eyeglasses, which Mark Zuckerberg so eloquently pointed out as a category killer, is to ensure that light from the AR display does not make the wearer look like an automaton, due to user-display-lit eye glow – especially at night. META successfully pioneered laser and security eyeglass filtering, to combat powerful pen pointers, for our customers like Airbus. Under a new brand name, metaFUSION™, we are now applying that proven technology and other functionality directly encapsulated into eyeglasses, to compliment waveguide-based displays similar to HoloLens®,” noted Jonathan Waldern, Chief Technology Officer. “The AR eyeglass display is one of the most complex engineering challenges of our time, and only advanced metamaterials, incorporated into the eyeglass lenses, will likely provide an acceptable solution.”
“Any augmented and virtual reality eyewear solution, whether from a major OEM or a startup, will need to address the need for prescription lenses. metaFUSION™ will combine the Interglass platform with META’s technology to offer embedded metamaterial solutions for on demand precision casting of prescription lenses. In addition, the associated patents would be valuable to any company participating in this eyewear market. On the same production system, we will be able to offer embedded functionality such as combiners, waveguides, and eye tracking sensors. These same integrated lenses can also enable much more compact HMDs for virtual reality,” said Gardner Wade, Chief Product Officer.
Interglass Assets Include Specialized Equipment, More Than 70 Patents
Combining the technology, equipment, and IP from Interglass with META’s metamaterial design and nanofabrication platform is expected to provide more elegant, powerful, and fully integrated solutions across a range of HMD applications. META is acquiring from Interglass Technology AG (in liquidation) lens casting equipment and related workstations and software, tools, and test equipment, along with intellectual property including patents, trademarks, know-how, technical data, proprietary software, designs, and trade secrets. Interglass has more than 70 international patents in the field of casting processes for high-quality plastic lenses or other optical components based on UV curing acrylics. Moreover, the Interglass process is highly sustainable, which will help to support META’s sustainability initiatives.
metaFUSION™ Benefits: Performance and Sustainability
metaFUSION™ lenses are directly cast into the final correction using a library of more than 2,000 prescription molds. This requires significantly less material, energy and water compared to conventional production, which involves milling and grinding an oversized lens blank. The metaFUSION™ production process requires a fraction of the energy. Typically, a corrective lens is cured in about 50 hours at >100° C – the metaFUSION™ technology just needs 10 seconds. Since metaFUSION™ lenses are poured and do not need grinding, no water is required in the production process. The metaFUSION™ coating process, based on plasma enhanced chemical vapor deposition (PECVD), is environmentally friendly and achieves superior scratch and abrasion resistance without using wet chemistry.
metaFUSION™ allows functional metamaterial films to be directly encapsulated within a prescription lens, supporting applications in Augmented and Virtual Reality (AR/VR) as well as a range of features including integrated see-through dimming to manage battery life, eye tracking to optimize resolution, latency and 5G data bandwidth, focusing and eye glow management. These films not only perform optical origami but combine to form a solid-state lens able to withstand the shock and environmental conditions for everyday work or consumer use.
META Joins LOT Network
Combining its existing portfolio with the Interglass acquisition, META now owns more than 160 patents. To protect these valuable assets, META has joined LOT Network, an international community of the world’s leading high-tech companies committed to protecting its members from costly patent troll litigation. LOT Network currently protects more than 1,100 members in 36 countries from litigation from over 3 million worldwide patents. Members include market leaders such as Covestro, IBM, Toyota, Visa, Canon, Google, Tesla, Cisco, Amazon, Microsoft, Alibaba, and Salesforce, as well as other innovative companies across industries.
About Metamaterial Inc.
META is changing the way we use, interact with, and benefit from light and other forms of energy. META designs and manufactures advanced materials and performance functional films which are engineered at the nanoscale to control light and other forms of energy. META is an award winning Global Cleantech 100 company with products that support sustainability by doing more with less; they encompass lightweight, sustainable raw materials and processes which consume less energy and offer more performance. META has a growing patent portfolio and is currently developing new materials with diverse applications in concert with companies in the automotive, aerospace, energy, consumer electronics and medical industries. META is headquartered in Halifax, Nova Scotia and has R&D and Sales offices in London, UK and Silicon Valley. For additional information on META, please visit www.metamaterial.com. (Source: PR Newswire)
02 Feb 21. Defense Industry Could See Another Wave of Mergers, Acquisitions. The defense industry could be on the cusp of further consolidation as contractors look to bolster their business portfolios and access to innovation through mergers and acquisitions, analysts say.
M&A has been a long-term trend since the end of the Cold War and the 1993 “Last Supper” when then-Deputy Defense Secretary William Perry encouraged consolidation among contractors to achieve efficiencies in an era of significantly reduced military expenditures.
“Merger activity in the defense industry increased dramatically,” noted a study by the Center for Strategic and International Studies, with the number of major prime contractors dropping from 50 to just six between 1993 and 2000.
While military budgets ramped up again in the decade after the 9/11 attacks, spending constraints stemming from the Budget Control Act of 2011, as well as the drawdowns in Iraq and Afghanistan during the Obama administration, had a major impact on industry, according to the CSIS study published in 2019 titled, “Evaluating Consolidation and the Threat of Monopolies within Industrial Sectors.”
“Across categories and vendor sizes, the analysis found that the number of vendors receiving prime contracts from the Department of Defense dropped in all by 17,000, or nearly 20 percent over the drawdown period,” the study said. Sectors experiencing major reductions in contact obligations for products and services included ships, aircraft, land vehicles, space systems, and missiles and ordnance.
In 2015, then-Undersecretary of Defense for Acquisition, Technology and Logistics Frank Kendall voiced concerns about the state of affairs.
“The trend toward fewer and larger prime contractors has the potential to affect innovation, limit the supply base, pose entry barriers to small, medium and large businesses, and ultimately reduce competition — resulting in higher prices to be paid by the American taxpayer,” he warned.
There have been a number of high profile mergers and acquisitions in recent years including the combinations of General Dynamics and CSRA, Northrop Grumman and Orbital ATK, L-3 Technologies and Harris Corp., Lockheed Martin and Sikorsky, and Raytheon and United Technologies Corp.
Analysts say another wave of consolidation could be on the horizon. Many observers expect a decline in defense spending as the nation grapples with the economic fallout from the COVID-19 pandemic and exploding federal budget deficits.
“We forecast a range of scenarios, with the best case being essentially a flat budget, and the worst being a steep decline. If the worst case occurs, it’s likely that new programs will be postponed, R&D cut for all but the most strategic efforts, and current procurements will slip,” analysts with the Boston Consulting Group wrote in a recent report titled, “Building Beachheads in the U.S. Defense Market Through M&A.”
The report added: “Such downturns have historically been periods of consolidation in the industry, a chance for stronger companies to buy firms in financial distress and either establish a beachhead in the U.S. or expand their presence.”
A number of factors could drive mergers and acquisitions.
“Intense competition for fewer programs and contract awards … coupled with possible re-emergence of [lowest-price technically acceptable] contracts, may expedite consolidation in some of the more fragmented and under-capitalized segments,” according to a report by advisory firm KPMG titled, “After the Shock: Implications for M&A in the Aerospace and Defense Market.”
This could prompt companies to pursue both vertical and horizontal integration strategies, it noted.
In another study titled, “2020 Aerospace and Defense Industry Outlook: A Midyear Update,” consulting firm Deloitte noted that larger contractors may use acquisitions to gain access to new and advanced technologies. M&A activity could be shaped by demand growth in areas such as: command, control, communications, computers, intelligence, surveillance and reconnaissance, unmanned and autonomous vehicles and hypersonics.
During a quarterly earnings call in October, Lockheed Martin indicated it is on the hunt for opportunities.
“We’re going to invest in R&D to sustain our technological leadership … but we’re also going to seek acquisition and joint venture opportunities to deepen our capabilities and … add technological firepower to our existing company,” said Lockheed president and CEO James Taiclet. “We plan to be active.”
The company recently bought a company called i3 that gave Lockheed novel capability for hypersonic glide bodies, he noted. That is “something we wanted to bring in-house and again accelerate our own potential for developing that piece of the technology that’s so absolutely critical.”
Liquidity challenges and the prevalence of distressed assets could create a buyer’s market for companies pursuing acquisitions, the KPMG report said.
M&A isn’t just an option for the major primes, the Boston Consulting Group noted, suggesting other firms should pursue opportunities to become “conduits of innovation” for the large players.
To achieve that, contractors may need to acquire subunits from other companies, then couple their know-how with cutting edge capabilities.
Deloitte predicted that consolidation by parts family — components, aero structures, electronics and interiors — will also continue as firms focus on gaining economies of scale.
The Boston Consulting Group said: “Recent developments in the U.S. defense industry have placed it on the cusp of the next consolidation wave. Companies looking to make inroads have no time to waste. They need to lay their plans now to capitalize on opportunities.”
What would be the consequences of further consolidation?
Basic economic theory would suggest that it would reduce competition and potentially lead to higher prices for goods and services for the Pentagon and taxpayers, said Greg Sanders, deputy director of the Defense-Industrial Initiatives Group at CSIS.
Primes have pushed back on the idea that larger defense contractors inherently undermine competition or inhibit innovation.
“What the companies will argue is that by bringing things together, they are able to rationalize, eke out efficiencies, get economies of scale, etc.,” Sanders said. “Probably their best argument for that sort of thing might be that … there are better products they can provide, they are bringing different expertise.”
There are a number of tools available to the Defense Department and other agencies to prevent unwanted consolidation and mitigate its effects.
One is regulatory scrutiny of proposed mergers and acquisitions. The Justice Department’s Antitrust Division and the Federal Trade Commission lead the U.S. government’s antitrust reviews, and the Pentagon provides input when deals involve the defense industry.
“The overriding goal of the agencies in enforcing the antitrust laws is to maintain competition going forward for the products and services purchased by DoD,” the Justice Department and FTC said in a joint statement in 2016. “Competition ensures that DoD has a variety of sourcing alternatives and the most innovative technology to protect American soldiers, sailors, Marines and air crews, all at the lowest cost for the American taxpayer.”
They assess whether a sufficient number of both prime and subcontractors will remain after a deal is consummated to ensure that future procurement competition is robust.
As part of its reviews, the agencies also consider procompetitive aspects of a proposed transaction, including economies of scale, decreased production costs and enhanced R&D capabilities.
“However, if a transaction threatens to harm innovation, reduce the number of competitive options needed by DoD, or otherwise lessen competition — and therefore has the potential to adversely affect our national security — the agencies will not hesitate to take appropriate enforcement action, including a suit to block the transaction,” the statement added.
President Donald Trump has expressed concerns about combinations in the defense industry.
At the annual Defense News Conference in September, Undersecretary of Defense for Acquisition and Sustainment Ellen Lord was asked if she also had concerns.
“I actually put a process in place early on when we are notified of M&A deals that we go out very formally to all the services and agencies and ask for objective evidence as to whether or not these mergers or acquisitions will constrain competition in any way,” she said.
“We’ve worked very, very closely with either FTC or DoJ on those deals to make sure there are divestitures, if needed,” she added. “We watch very carefully. And at this point we think we’ve made some smart divestitures on some of those. And we like competition. It’s our friend.”
Another path the Pentagon could pursue to fend off consolidation is to award contracts to multiple offerors to build a particular type of system, “taking a bit of quantity from each” rather than conducting “big winner-take-all” competitions, Sanders said.
Requiring open systems architectures is another way to encourage competition when it comes time for technology upgrades, he noted.
Additionally, the Pentagon could utilize cost-based contracting in an effort to keep prices down.
Under that construct, “DoD gets access to a lot of cost and accounting data and will take a very close look, and you end up with a bit more of a utility model than a commercial competition model,” Sanders explained.
To add more players to the marketplace, the Defense Department can try to do business with nontraditional contractors and commercial firms.
The military is already making a big push to tap into commercial tech and expand the use of other transaction authority agreements to speed prototyping and fielding of new capabilities. Most of those agreements are with nontraditional companies. (For more on OTAs, see story on page 35)
However, that could potentially lead to unintended consequences.
“Traditional defense technology developers may feel compelled to acquire or partner with emerging nontraditional suppliers, given nontraditional firms’ current dominance in the prototyping marketplace,” analyst Rhys McCormick wrote in a CSIS report titled, “Defense Acquisition Trends 2020.”
If traditional players are unable to increase their market share in the next generation of defense systems, their revenue base will start to erode, he said. “This raises the potential for a substantial round of industry consolidation in the next five to 10 years.”
However, Sanders doesn’t anticipate consolidation on a scale seen in the 1990s after the Last Supper for several reasons. One is the expectation that U.S. defense spending will remain more robust than it was after the threat posed by the Soviet Union disappeared.
“The Cold War had ended. There was a definite sense that we were just in a different strategic state, whereas [today] there’s a … very big bipartisan concern with Chinese activities,” he said. “Even if you disagree about the amount of defense spending needed, we’re not going from a period of higher tension to a lower one.”
The amount of consolidation that has already occurred also means there are now fewer opportunities for contractors to merge, and analysts predict that proposed combinations of large companies would face intense regulatory scrutiny.
Some elements of the Democratic Party are less friendly toward big business. Sanders said the incoming Biden administration will likely be more wary of M&A than the previous one.
“We haven’t seen that much detail on Biden antitrust policy,” he said, “but I think that probably this administration would be a little more skeptical … on how much they want to encourage consolidation.” (Source: glstrade.com/National Defense)
01 Feb 21. COMSovereign Acquires Fastback Networks, Adding Top-Performing “Sub-6 GHz” Backhaul for Public and Private Networks and Expanding Telecom IP Portfolio.
– Acquisition Brings Existing Tier One Customers Along with Patents Vital to the Development of 5G Small Cells and Integrated Access and Backhaul (“IAB”) Radios
COMSovereign Holding Corp. (NASDAQ: COMS) (“COMSovereign” or the “Company”), a U.S.-based developer of 4G LTE Advanced and 5G Communication Systems and Solutions, announced today that it completed the acquisition of Skyline Technology Partners, LLC d/b/a Fastback Networks (“Fastback”). The transaction includes all operations, radio designs, customers, and intellectual property of Fastback.
Terms of the transaction include total consideration of approximately $14m consisting of cash, debentures, and convertible debentures.
In addition to an installed base of tier one mobile network operator customers in North America, the acquisition is highlighted by a valuable intellectual property (“IP”) portfolio of sixty-five granted and six pending patents. These active patents cover many of the key systems and methods vital to 5G wireless networking including Signal Processing, Adaptive Antennas, Beam Forming/Steering, Self-Optimizing Networks, Spectrum Sharing and Hybrid Band Operations.
“We are pleased to have completed the Fastback transaction, expanding our installed base of tier one customers and bringing with it, broad and early patent coverage of many critical 5G enabling technologies,” said Dr. Dustin McIntire, CTO of COMSovereign Holding Corp. “We intend to quickly integrate Fastback into our operations so we can capitalize on growing customer interest in 4G LTE Advanced, 5G, and IAB small cells with integrated access and backhaul utilizing this unique IP.”
Since its founding in 2010, Fastback has been a leader in the development and commercialization of its intelligent backhaul radio (“IBR”) systems that deliver high-performance wireless connectivity to virtually any location including those challenged by Non-Line of Sight (NLOS) limitations. Fastback’s advanced IBR products allow operators to economically add capacity and density to their macrocells and expand service coverage density with small cells. These solutions also allow operators to both provide temporary cellular and data service utilizing mobile/portable radio systems and provide wireless Ethernet connectivity.
For more information about COMSovereign, please visit www.COMSovereign.com and connect with us on Facebook and Twitter.
About COMSovereign Holding Corp.
COMSovereign Holding Corp. has assembled a portfolio of communications technology companies that enhance connectivity across the entire data transmission spectrum. Through strategic acquisitions and organic research and development efforts, COMSovereign has become a U.S.-based communications provider able to provide 4G LTE Advanced and 5G-NR telecom solutions to network operators and enterprises. For more information about COMSovereign, please visit www.COMSovereign.com.
About Fastback Networks
Fastback Networks delivers innovative technology for the mobile infrastructure of the future. Fastback solutions enable network operators to expand and enhance services, and private networks to secure, monitor, and manage operations via high-capacity data connectivity. With insights derived from the team’s experience building leading-edge radio and data networking solutions, Fastback Networks looks at the challenges of 4G/5GLTE deployment with fresh eyes and better ideas, and develops transformational mobile backhaul solutions that enable the acceleration of the mobile future. Fastback Networks is a privately held company that was initially funded by nationally recognized technology investment funds before it was acquired during 2017 by Skyline Technology Partners, LLC, and the company’s key employees. (Source: PR Newswire)
01 Feb 21. McKean Defense Completes Acquisition of Mikros Systems Corporation. McKean Defense Group, Inc. (“McKean”), a leading Employee-Owned Life Cycle Management, Engineering, Enterprise Transformation, and Program Management business headquartered in Philadelphia, PA, announced today that it has completed the acquisition of Mikros Systems Corporation (“Mikros”).
Mikros is McKean’s first acquisition, targeted to enhance the company’s offerings in combat systems monitoring and diagnostic analytics. Mikros will operate as a wholly owned subsidiary of McKean that will continue to be led by Mr. Chuck Bristow.
“With the addition of Mikros, McKean has augmented our technology solutions,” said Joseph Carlini, Chief Executive Officer of McKean. “Integration of their SYM-3 and Prognostics Framework applications that provide shipboard monitoring on Littoral Combat System (LCS) Ships is just one example of the business growth we expect as a result of this acquisition.”
“Mikros is excited about the access to broader capabilities that will enhance our ability to service current customers and the opportunity to work with McKean to introduce our products and offerings to new clients,” said Chuck Bristow, President of Mikros Systems.
Mikros’ capabilities include technology management, electronic systems engineering and integration, radar systems engineering, command, control, communications, computers and intelligence systems engineering, communications engineering and production services. The Mikros acquisition also expands McKean’s physical footprint by adding facilities in Princeton, NJ; Fort Washington, PA; Largo, FL and Port Hueneme, CA.
McKean Defense is an 100% Employee Owned company with cutting edge engineers, developers, technical staff, programmers, analysts, and program managers who identify and deploy new shipboard technologies, integrate information technology across shipboard platforms, and develop strategies to support the Warfighter. McKean Defense’s employees create strategic solutions to help customers reach new levels of mission support and transform their organizations. More information is available at www.mckean-defense.com. (Source: PR Newswire)
01 Feb 21. Acquisition saves Porvair from steeper sales decline. The filtration specialist would have seen revenue drop by almost a fifth in the absence of Royal Dahlman.
- The 2019 Royal Dahlman acquisition helped offset weak aerospace sales
- The laboratory business is benefiting from demand for Covid-19 testing products
While filtration and environmental technology specialist Porvair’s (PRV) saw its revenue dip by just 7 per cent to £135m in the year to 30 November, this was largely thanks to the contribution of Royal Dahlman, the Dutch industrial filtration company purchased in 2019. Excluding this acquisition, the group’s revenue declined by close to a fifth.
This reflects the fact that Porvair derives around a quarter of its revenue from the aerospace sector, which has been hit hard by the Covid-19 pandemic. Royal Dahlman helped offset a 19 per cent decline in aerospace sales with a better-than-expected performance from its petrochemical and distribution businesses.
Still, the fall in aerospace sales weighed on margins and the group’s adjusted operating profit dropped by more than a tenth to £14m. Statutory operating profit came in slightly lower at £13m, reflecting restructuring efforts in response to Covid-19 and the impairment of assets in China on the back of trade war pressures.
The laboratory business proved more resilient to pandemic disruption. While revenue ticked down by 4 per cent in the face of lab closures around the world, the shift away from industrial products to higher-margin diagnostic equipment meant that the segment’s operating profit actually increased by 2 per cent to £7m. Porvair has benefited from the demand for Covid testing products and this helped it enter 2021 with a record laboratory order book.
So, while the group has not been left unscathed by this crisis, it has remained profitable and cash generative throughout. Excluding lease liabilities, it was sitting on £5m of net cash at the end of November, up from £4m a year earlier. Unlike the countless other companies that cut their dividends last year, Porvair held its half-year payout steady and has now increased its final dividend to 3.3p a share.
Looking ahead, the group says that the near-term outlook remains uncertain. The recovery is being led by the laboratory business and aerospace will take longer to bounce back. The ‘aerospace and industrial’ business has lowered its cost base by trimming its headcount by over a fifth and aerospace orders are building for the second half of the year.
But the long-term investment case remains intact. Porvair will continue to benefit from structural growth drivers, with tightening regulation spurring demand for emissions and water filtration products. Such products are typically designed into systems that have a long life cycle and the need to replace them regularly means that around 80 per cent of Porvair’s annual revenue comes from repeat orders. Buy. (Source: Investors Chronicle)
01 Feb 21. Northrop Grumman Corporation (NYSE: NOC) today announced that it has entered into an accelerated share repurchase (ASR) agreement with Goldman Sachs & Co. LLC to repurchase $2 bn of Northrop Grumman’s common stock. Under the ASR agreement, Northrop Grumman will receive initial deliveries of approximately 5.9 million shares on Feb. 2, representing approximately 85 percent of the expected share repurchases under the ASR agreement, based on the company’s closing price of $286.61 on Jan. 29, 2021. The final number of shares to be repurchased will be based on Northrop Grumman’s volume-weighted average price during the term of the transaction, less a discount, and is expected to be completed in the second quarter of 2021. The ASR will be completed under the company’s current share repurchase authorization, which currently has $5.8bn in authorization remaining.
Northrop Grumman solves the toughest problems in space, aeronautics, defense and cyberspace to meet the ever evolving needs of our customers worldwide. Our 97,000 employees define possible every day using science, technology and engineering to create and deliver advanced systems, products and services.
01 Feb 21. Northrop Grumman Corporation (NYSE: NOC) has closed the sale of its IT services business to Peraton, an affiliate of Veritas, for $3.4bn in cash. Northrop Grumman expects to use the sale proceeds primarily for share repurchases, to offset dilution from the transaction, and for debt retirement. As noted on the company’s January 28, 2021 earnings call, neither the book gain nor various fees associated with this transaction are included in its 2021 financial guidance. Northrop Grumman solves the toughest problems in space, aeronautics, defense and cyberspace to meet the ever evolving needs of our customers worldwide. Our 97,000 employees define possible every day using science, technology and engineering to create and deliver advanced systems, products and services.
TCI International, Inc., is a wholly-owned subsidiary of SPX Corporation. TCI provides turn-key solutions for spectrum management and monitoring, direction finding, geolocation and communications intelligence to civilian, government, military and intelligence agencies as well as antennas for communications and high-power radio broadcasting. TCI is headquartered in Fremont, California, USA. For more information, visit www.tcibr.com.