BUSINESS NEWS

Sponsored by TCI International Inc.

www.tcibr.com

17 Mar 22. MDA Ltd. (TSX: MDA), a leading provider of advanced technology and services to the rapidly expanding global space industry, today announced financial results for the fourth quarter and year ended December 31, 2021 demonstrating double-digit revenue growth, increased order bookings and healthy backlog.

MDA executed on its growth strategies in the fourth quarter with incremental wins across all three of its business areas, while delivering strong profitability and operating cash flow.

“With our return to public markets, multiple strategic new customer awards, and increased scale across the business, 2021 was a transformational year for MDA, setting a strong financial and operational foundation for ongoing growth,” said Mike Greenley, Chief Executive Officer of MDA. “I am pleased with our fourth quarter performance which demonstrates strong execution and our team’s ability to navigate the challenges resulting from the resurgence of the Covid-19 pandemic and supply chain disruptions. With continued business momentum, we see opportunities for significant value creation in the coming years.”

FOURTH QUARTER 2021 HIGHLIGHTS

Backlog of $864.3m was up 54% year over year driven by incremental awards across MDA’s three business areas with strong order activity in Geointelligence and Satellite Systems.
Revenues of $115.5m were up 15% compared to the prior year driven by improved program performance and continued execution on our backlog, primarily in our Satellite Systems and Robotics & Space Operations businesses.
Gross profit of $45.4m was up 59% compared to the same period in 2020, and gross margin improved to 39% compared to 29% in Q4 of 2020 reflecting improved program execution and cost control across all three business areas, coupled with increased investment tax credits (ITCs) earned in the quarter.
EBITDA increased to $22.9m from $11.6m in Q4 of 2020. Adjusted EBITDA for the quarter was $26.8m (23% adjusted EBITDA margin) compared to $30.1m in the prior year (30% adjusted EBITDA margin). Excluding the impact of Canada Emergency Wage Subsidy (CEWS), which ended in early Q4 of 2021, fourth quarter adjusted EBITDA was $26.0m compared to $21.7m in the prior year, and adjusted EBITDA margin, excluding CEWS, increased to 23% from 22% last year.
Operating cash flow improved to $34.5m in the latest quarter, up from $15.9m in Q4 of 2020 reflecting higher profitability year over year.
Healthy financial position with net debt to adjusted EBITDA ratio of 0.4x at quarter end.

FULL-YEAR 2021 HIGHLIGHTS

MDA continued to execute on its growth initiatives with order bookings of $767.9m in 2021, representing a 50% increase over 2020 and incremental awards across all three business areas.
Revenues of $476.9m were up 16% compared to 2020 driven by improved program performance and execution on our backlog, primarily in our Satellite Systems and Robotics & Space Operations businesses.
Gross profit of $167.8m was up 43% compared to the prior year, and gross margin improved to 35% compared to 29% in 2020 reflecting our ability to manage program costs and mitigate execution risks across all three business areas, coupled with increased ITC credits earned over 2020.
EBITDA increased to $123.3m compared to $65.7 m in 2020. Adjusted EBITDA for the year was $137.1m (29% adjusted EBITDA margin) compared to $126.8 m in the prior year (31% adjusted EBITDA margin). Excluding the impact of CEWS, 2021 adjusted EBITDA was $112.3m compared to $85.2m in 2020, and adjusted EBITDA margin, excluding CEWS, increased to 24% from 21% in the prior year.
Operating cash flow improved to $72.1m in 2021, up from $70.4m in the prior year largely resulting from improved earnings in 2021.
MDA hired 670 people in 2021 as part of the company’s focus on talent and recruitment to support future growth.

2022 FINANCIAL OUTLOOK

As a leading space technology provider, we are leveraging our capabilities and expertise to execute on specific growth strategies across our end markets and business areas. Underlying industry trends for space continue to be strong and market activity remains robust. We believe our long term future growth pipeline is significant and underpinned by the existing contract awards of our key programs. With Telesat Lightspeed, Canadarm3, the Canadian Surface Combatant (CSC) programs already under initial contracts, in Q4 we made and are continuing to make significant progress on next-phase contract negotiations, program definition and development, and risk reduction activities. We believe our backlog and recent awards announced in the first quarter of 2022, including Globalstar’s LEO satellite constellation (~$415m contract) and Canadarm3 phase B ($269m contract), provide us with revenue visibility and a strong business foundation for 2022 and beyond.

We continue to monitor developments related to the Covid-19 pandemic and supply chain disruptions which can impact the timing of programs, our overall productivity and ability to engage directly with our customers. We are taking pro-active measures across our three business areas to mitigate the impact on our operations to the extent possible.

Consistent with the outlook provided in Q3 2021, we expect our 2022 revenues to be $750 – $800m, representing robust year-over-year growth of approximately 55% – 65%, and expect 2022 adjusted EBITDA to be $140 – $160m. Our 2022 forecasts are predicated on continued backlog growth in the first half of 2022, with year over year revenue inflection commencing in the second quarter of 2022 and accelerating throughout the balance of the year. We expect capital expenditures in 2022 to be $180 – $220m, primarily comprising growth investments to support CHORUS and the previously outlined growth initiatives across our three business areas. (Source: PR Newswire)

Red Cat Holdings Reports Financial Results for Fiscal Third Quarter 2022 and Provides Corporate Update. Red Cat Holdings, Inc. (Nasdaq: RCAT) (“Red Cat” or “Company”), a hardware-enabled software provider to the drone industry, reports its financial results for the fiscal third quarter ended January 31, 2022 and provides a business update.

Recent Corporate Highlights:

Teal Drones (“Teal”) Selected by U.S. Army for Short Range Reconnaissance Tranche 2 Drone Program
Teal Awarded Customs and Border Protection Contract Worth up to $90m over Five Years
Teal Manufacturing Facility Doubled in Size
Skypersonic collaborating with NASA to deploy remotely piloted drones in a variety of vehicles and environments
Appointed Venture Capitalist and Cargo Drone Entrepreneur Christopher R. Moe to Board of Directors

Third Quarter 2022 Financial Highlights:

Revenue for the fiscal third quarter ended January 31, 2022 decreased 13% compared to the same period in fiscal 2021 as the Company focused its efforts on doubling the manufacturing capacity for its Teal subsidiary. Revenue for the nine months ended January 31, 2022 increased 64% compared to the nine months ended January 31, 2021
Operating Expenses for the quarter ended January 31, 2022 increased to $3.2m compared to $1.1m for the same period in fiscal 2021, reflecting the acquisitions of Skypersonic and Teal. Headcount at Teal has doubled with the addition of skilled engineering talent required to design an expanded manufacturing facility and incorporate technical product enhancements requested by customers
Cash and marketable securities were approximately $56m as of January 31, 2022

“All our business divisions are well-positioned to benefit from current tailwinds in the drone industry. The current conflict in Ukraine is leading to many inquiries for Teal’s Golden Eagle drone and we are optimistic that many of these will be converted into material contracts,” commented Red Cat CEO Jeff Thompson. “Over the longer term, our selection as one of just two companies awarded the Short Range Reconnaissance Tranche 2 $1.5m prototype contract, which may lead to a production contract award. The production award for Tranche 1 was $100 m. Ultimately, there is the Tranche 3 prototype and production awards that Teal will also be competing for. We are committed to increasing Teal’s production capacity to meet the strong demand we see from current contracts and in our pipeline.

“Skypersonic and its unique drone inspection service platform is ideally positioned to benefit from the federal Infrastructure Bill that was passed in 2021. We would expect increased commercial activity related to this opportunity later in 2022 and into 2023.

“With our strong balance sheet and numerous opportunities ahead, we look forward to keeping investors informed of our commercial progress and thank investors for their continued support,” concluded Mr. Thompson.

“We invested significantly in hiring the engineering talent required to support our expanded manufacturing facility at Teal including the technical enhancements that our military customers are seeking,” stated Joseph Hernon, Chief Financial Officer. “Our financial position remains strong with almost $56m of cash and marketable securities and debt obligations less than $3m.” (Source: PR Newswire)

17 Mar 22. Rheinmetall CEO says prepared to buy stake in Leonardo’s OTO Melara. Rheinmetall would consider buying a stake in Leonardo’s (LDOF.MI) OTO Melara unit as part of its long-term commitment to the Italian market, Chief Executive Armin Papperger said.

“We want to expand our industrial network, especially in Italy. We already have a good cooperation with OTO Melara there,” Papperger told Italian newspaper Il Sole 24 Ore in an interview published on Wednesday.

“To underline the long-term nature of our commitment, we are also prepared to make a financial commitment by acquiring shares in OTO Melara,” he said.

Italian defence group Leonardo said in December it had received two expressions of interest in OTO Melara, which produces naval and terrestrial cannons, and Wass, which makes torpedoes, and was waiting for binding offers.

But sources told Reuters last week that the plan to find a buyer for the units has been put on hold amid the crisis caused by Russia’s invasion of Ukraine.

Papperger also told the paper that Rheinmetall’s Lynx family of infantry fighting vehicles would be suitable for Italy, which wants to renew its army’s fleet. (Source: Reuters)

“To underline the long-term nature of our commitment, we are also prepared to make a financial commitment by acquiring shares in OTO Melara,” he said.

But sources told Reuters last week that the plan to find a buyer for the units has been put on hold amid the crisis caused by Russia’s invasion of Ukraine.

Papperger also told the paper that Rheinmetall’s Lynx family of infantry fighting vehicles would be suitable for Italy, which wants to renew its army’s fleet. (Source: Reuters)

17 Mar 22. Sypris Reports Fourth Quarter Results.

EPS UP 133%; BACKLOG UP 57%; 2022 OUTLOOK RAIS

Sypris Solutions, Inc. (Nasdaq/GM: SYPR) today reported financial results for its fourth quarter and full-year ended December 31, 2021.

HIGHLIGHTS

Revenue for the fourth quarter increased 25.2% year-over-year, driven by a 30.0% increase at Sypris Electronics and a 21.7% increase at Sypris Technologies.
Gross profit increased 65.1% year-over-year, the result of an 83.5% increase at Sypris Electronics and a 51.5% increase at Sypris Technologies.
Gross margin increased 420 basis points to 17.1%, reflecting a 540-basis point expansion for Sypris Electronics and a 310-basis point increase for Sypris Technologies.
Earnings per diluted share rose 133.3% to $0.02 per share, up from a loss of $0.06 per share for the prior-year period, reflecting the combined strength of top line growth and margin expansion. EPS for the full year increased 62.5% to $0.13 per share, up from $0.08 per share for 2020.
Year-end backlog increased 56.8% when compared to the prior-year period, driven by a 46.1% increase in orders for the year at Sypris Electronics.
Sypris Electronics recently announced several important new contract awards, including the following:

o A contract to manufacture and test embedded circuit card assemblies that will perform certain cryptographic functions for the Army Key Management System, with production to begin in 2022;

o A multi-year follow-on contract to produce and test electronic power supply modules for a large, mission-critical U.S. Navy program, which is expected to result in a meaningful step-up in shipments from existing levels beginning in 2022; and

o A multi-year follow-on contract to produce and test a variety of electronic power supply modules for a mission-critical, long-range, precision-guided anti-ship missile system, which is forecast to result in a material increase in production volume from existing levels beginning in 2022.

Subsequent to quarter-end, Sypris Technologies announced a long-term, sole-source contract extension to provide drivetrain components for use in the production of medium and heavy-duty commercial vehicles. In addition, the Company was awarded a new program to supply components for use in all-terrain vehicles.
The Company updated its outlook for 2022, with revenue now expected to increase 25% to 30% year-over-year, up from prior guidance of 25% in November. Gross margins are now expected to expand 200 to 250 basis points on the year, up from 200 basis points previously, while cash flow from operations is still forecast to increase materially year-over-year.

“We were pleased with our fourth quarter performance, as both segments reported strong double-digit growth in both revenue and gross profit while operating in an increasingly dynamic environment. Our teammates throughout the company simply did an excellent job and as a result, we are well-positioned for further growth in 2022,” commented Jeffrey T. Gill, Chairman, President & Chief Executive Officer.

“Full year revenue increased over 18% from the prior year, primarily driven by strong demand in the automotive, commercial vehicle, sport utility and off-highway markets served by Sypris Technologies. Our recent announcement of the long-term, sole-source contract extension with one of our key customers, when combined with the favorable outlook in our markets, provides Sypris Technologies with a solid path for additional growth going forward.”

“Backlog for Sypris Electronics reached its highest point in over a decade, with deliveries now scheduled well into 2023. Revenue in the fourth quarter increased 23% sequentially and 30% year-over-year, while recent contract wins are expected to provide meaningful growth to our top line during 2022. We have received customer support for multi-year material commitments to meet this growth, which is expected to help alleviate future potential production disruptions.”

“Our energy markets have strengthened, resulting in a much-improved fourth quarter for our energy products business when compared to the prior year. Additional opportunities for growth may exist with new projects in support of increasing oil and gas production. We are also actively pursuing applications for our products in new and adjacent markets to further diversify our market and customer portfolios.”

Fourth Quarter and Full-Year Results

The Company reported revenue of $25.8m for the fourth quarter ended December 31, 2021, compared to $20.6m for the prior-year period. Net income was $0.4m for the fourth quarter of 2021, or $0.02 per diluted share, compared to a net loss of $1.2m, or $0.06 per share, for the prior-year period. Results for the quarter ended December 31, 2020, include a loss of $0.6 m on the disposal of assets.

For the full-year 2021, the Company reported revenue of $97.4m compared with $82.3m for the prior year. Net income was $2.9m, or $0.13 per diluted share, for 2021 compared with $1.7 m, or $0.08 per diluted share, for the prior year. Results for 2021 include the recognition of a $3.6 m gain on the forgiveness of the Company’s PPP loan. Results for 2020 include an income tax benefit of $3.2m, primarily from the release of a valuation allowance on certain foreign deferred tax assets, and net gains of $0.2 m from the sale of idle assets by Sypris Technologies.

Sypris Technologies

Revenue for Sypris Technologies was $14.7m in the fourth quarter of 2021 compared to $12.1m for the prior-year period, reflecting the positive impact of new programs, the strength of the commercial vehicle market and increased energy related product sales. Gross profit for the fourth quarter of 2021 was $2.3m, or 15.8% of revenue, compared to $1.5 m, or 12.7% of revenue, for the same period in 2020. Gross profit for the fourth quarter of 2021 was positively impacted by the increase in volume and a favorable product mix.

Sypris Electronics

Revenue for Sypris Electronics was $11.1m in the fourth quarter of 2021 compared to $8.5 m for the prior-year period. Shipments under a full rate production contract ramped during the fourth quarter of 2021 along with increased shipments for a communications program, driving the increase in revenue. Supply chain constraints partially offset these gains, limiting shipments on certain other programs in the period. Gross profit for the fourth quarter of 2021 was $2.1m, or 18.7% of revenue, compared to $1.1m, or 13.3% of revenue, for the same period in 2020 due to higher volumes and a more favorable mix. Sypris Electronics secured favorable pricing from a customer on certain units shipped during the period on one of its multi-year programs. Additionally, a price increase was enacted during 2021 on another key multi-year program that will continue into 2022.

Outlook

Commenting on the future, Mr. Gill added, “Demand is up considerably from customers serving the automotive, commercial vehicle and sport utility markets, with Class 8 forecasts showing year-over-year production increases of 11.9% for 2022 and an additional 21.6% in 2023. Similarly, demand from customers in the defense and communications sector remains robust. While the outlook for the energy market is somewhat uncertain, we continue to secure new orders on important projects around the world.”

“We expect our backlog and markets to support continued revenue and earnings growth during 2022. We have updated our outlook accordingly, with revenue forecast to increase 25-30% year-over-year. We expect gross margin to follow suit, expanding 200-250 basis points in 2022 when compared to the prior year, while cash flow from operations is forecast to increase materially year-over-year supported by strong earnings growth.” (Source: BUSINESS WIRE)

17 Mar 22. BigBear.ai Announces Fourth Quarter and Full Year 2021 Financial Results.

Revenue of $145.6m for the year ended December 31, 2021
Gross margin of 23% for the year ended December 31, 2021
Analytics segment adjusted gross margin of 45% for the year ended December 31, 2021
Nine new prime contracts won; ending total backlog of $465m for the year
Successful completion of business combination with GigCapital4, Inc.
Added four seasoned key executives with deep industry expertise
2022 financial outlook provided

BigBear.ai Holdings, Inc. (NYSE: BBAI) (“BigBear.ai” or the “Company”), a leading provider of AI-powered analytics and cyber engineering solutions, today announced financial results for the fourth quarter and full year ended December 31, 2021.

“The growth of our federal Analytics business and new commercial opportunities are fueling our move toward more scalable, high growth, technology-first solutions and products,” said BigBear.ai CEO Dr. Reggie Brothers. “We have a deep bench of top-tier talent with domain expertise across our product, engineering, and sales & marketing functions, and we are well positioned to execute our commercial SaaS strategy in 2022. Our government business continues to thrive, providing a solid foundation for R&D innovation in areas that resonate with the public and private sectors. 2021 was a milestone year for BigBear.ai, and we are looking forward to even more exciting growth opportunities in 2022.”

Financial Highlights

Revenue of $33.5m in the fourth quarter and $145.6m for the year ended 2021
Gross margin of 11% in the fourth quarter, largely due to transaction-related stock-based compensation, and 23% for the year ended 2021
Non-GAAP adjusted gross margin of 34% for the Analytics segment and 28% for the Cyber & Engineering segment in the fourth quarter and 45% and 23% for the year ended 2021, respectively
Net loss of $114.8 m in the fourth quarter and $123.6m for the year ended 2021, reflective of $61 m of stock-based compensation expense from vesting that occurred upon the merger
Non-GAAP adjusted EBITDA* of $(2.3)m in the fourth quarter and $4.9m for the year ended 2021
Ending backlog of $465m
Cash and cash equivalents of $68.9m as of December 31, 2021

“Our aggressive investment strategy has put us in a remarkable position to capture new growth opportunities, while also growing our core business among federal customers,” said BigBear.ai CFO Josh Kinley. “We added new contracts and customers throughout the year, resulting in a backlog of $465m, which is three times the size of our entire revenue for 2021. Delayed government contract awards and the Continuing Resolution pushed some revenue into future periods, and this depressed near-term EBITDA, but our investments throughout the year have positioned the company for growth in 2022. The company continues to be EBITDA positive on an adjusted basis, and we are already seeing the results of our investments.”

Dr. Brothers continued, “We will continue to rely on our strong services business as a predictable source of revenue as we ramp up our commercial business toward the latter half of the year. The geopolitical climate today is increasing demand for technical solutions, operational support, and expert guidance among our federal customers. Our significant backlog, which is 14% higher than last year, multiple new customer wins, and 100% customer retention rate provide strong momentum for the entire business in 2022.”

Financial Outlook

The following information and other sections of this release contain forward-looking statements, which are based on the Company’s current expectations. Actual results may differ materially from those projected. It is the Company’s practice not to incorporate adjustments into its financial outlook for proposed acquisitions, divestitures, changes in law, or new accounting standards until such items have been consummated, enacted or adopted. For additional factors that may impact the Company’s actual results, refer to the “Forward-Looking Statements” section in this release.

For the year-ended December 31, 2022, the Company is projecting:

Revenue between $175m and $205m, including approximately $20m of commercial revenue
Positive Adjusted EBITDA*

“We will leverage our history of strong organic growth and strategic M&A to make 2022 a transformational year for the company,” Dr. Brothers continued. “We expect to grow revenue substantially among commercial customers, positioning the company for sustainable, highly-profitable revenue in a growing addressable market.”

The Company notes that 2022 projections reflect known impacts from the COVID-19 pandemic based on the Company’s understanding at the time of this news release and its experience to date. Internal analysis of federal solicitations in the Company’s market showed that the time between solicitation and contract award increased from 290 days to more than 600 days between 2019 and 2021. COVID led to delays in government contract awards in 2020 and 2021, and the Company cannot predict how the pandemic will evolve or what impact it will continue to have.

Although the Company does provide guidance for adjusted EBITDA* (which is a non-GAAP financial measure), it is not able to forecast the most directly comparable measure calculated and presented in accordance with GAAP without unreasonable effort. Certain elements of the composition of the GAAP amounts are not predictable, making it impracticable for the Company to forecast. As a result, no GAAP guidance or reconciliation of the Company’s adjusted EBITDA* guidance is provided. For the same reasons, the Company is unable to assess the probable significance of the unavailable information, which could have a potentially significant impact on its future GAAP financial results. The outlook is based on certain assumptions that are subject to the risk factors discussed in the Company’s filings with the Securities and Exchange Commission (“SEC”). (Source: BUSINESS WIRE)

17 Mar 22. BAE Systems well placed to profit from UAV spread. Events in Ukraine are likely to drive demand for unmanned aerial vehicles, providing another profitable opportunity for investors in Europe’s biggest defence contractor
It’s difficult to gauge the effectiveness of weapons systems outside of what the Americans sometimes refer to as “real world situations”. We’re getting a taste of that through events on the ground in Ukraine. By the time hostilities cease, defence contractors – and government procurement agencies – should have a clearer idea of which systems best match the varying strategic requirements of NATO member states.
With many NATO members set to reverse years of real-term declines in defence spending, the question is where the increased budget allocations are headed? This has material implications for anyone looking to gain (or increase) exposure to the broader defence sector. It may be too early to judge whether we are witnessing any shifts to the way in which conventional warfare will be conducted in the future, although the terrible events in Ukraine do point to the growing importance of unmanned aerial vehicles (UAVs) in the battlefield.
The sight of Russian armoured columns being decimated through drone attacks probably wouldn’t come as a surprise to military strategists, nor the fact that most of the damage is being done by the low-cost, Turkish-made Bayraktar TB2 UAV. The effectiveness of this technology against advanced armoured vehicles has certainly improved commercial prospects for the world’s leading defence contractors in this area, not least because of its inherent cost effectiveness. Flying a fifth-generation F-35 through enemy-controlled airspace carries a significant degree of financial risk given its $78mn (£60mn) price tag. It’s worth considering that Ukraine received its initial consignment of TB2s in March 2019 at a cost of $1m-$2m apiece.
The employment of drone technologies unlike, say, the use of cyber-tech, does not fall within the scope of asymmetrical warfare, but the capabilities linked to UAVs, whether in reconnaissance or air-to-ground missile operations, offer a relatively low-cost, flexible option for defence forces across the globe. The technologies are also seen as being complementary to many existing warfare systems.
It is little wonder that some of the west’s largest defence contractors are pouring billions into research and development linked to the advancement of a new generation of autonomous drones, along with counter-measures designed to reduce the effectiveness of UAVs launched by hostile combatants.
Some of the more advanced work is being conducted by BAE Systems (BA.), evidenced by the Mantis and Taranis proof-of-concept, technology demonstration programmes. These were undertaken to assess the limitations of existing technologies, but also to gain insights into systems integration. UAVs in development from the latter programme are expected to be operational “post 2030” and used in concert with manned aircraft. The Ministry of Defence (MoD) has previously announced plans for a new Royal Air Force squadron that will operate a fleet of UAVs able to fly together as a networked swarm with the minimum of human intervention. This underlines that applications are wide-ranging and evolving.

Naturally, there are also expanding civil applications, so dozens of private and state-controlled enterprises are engaged in the development of the technology. However, BAE’s rivals in the military space include Lockheed Martin Corp (US:LMT), Raytheon Company (US:RTX), Northrop Grumman (US:NOC), and Elbit System Ltd (TLV: ESLT). There are some heavy hitters in there, but it’s worth pointing out that the UK military is underserved in this area even though Blighty is one of the leading countries in terms of its military technological development. With domestic procurement high on the MoD agenda, BAE Systems is well placed to profit from the expansion of UAV defence budgets, even though spending growth slowed due to the impact of Covid-19. Analysis from Fortune Business Insights, published in July 2021, indicates that the size of the global military drone market will grow from $11.3bn in 2021 to $26.1bn in 2028 at a CAGR of 12.8 per cent. It would be reasonable to expect that these figures may be upwardly revised. (Source: Investors Chronicle)

14 Mar 22. TransDigm Announces Acquisition of DART Aerospace. TransDigm Group Incorporated (NYSE: TDG), announced today that it has entered into a definitive agreement to acquire DART Aerospace (“DART” or “the Company”), a portfolio company of Greenbriar Equity Group, L.P. and First Aviation Services Inc., for approximately $360m in cash.
DART is headquartered in Montreal, Quebec. The Company is a leading provider of highly engineered, unique helicopter mission equipment solutions that predominantly service civilian aircraft. The Company is expected to generate approximately $100m in pro forma revenues for the calendar year ending December 31, 2022. Approximately 95% of DART’s revenues are derived from proprietary products and about 80% of DART’s revenues comes from the aftermarket. The products have a strong presence across major commercial rotary-wing platforms as well as select applications for defense and safety services. The Company employs approximately 400 people and operates from four primary facilities in Hawkesbury, Ontario; Portland, Oregon; Fort Collins, Colorado and Chihuahua, Mexico.
Kevin Stein, TransDigm’s President and Chief Executive Officer, stated, “We are excited about the acquisition of DART Aerospace. DART is an industry leader in helicopter mission equipment and its unique helicopter solutions fit well with our proprietary and aftermarket-focused value generation strategy. The Company has established positions on a diverse range of new and existing rotary-wing platforms, strong aftermarket content and an outstanding reputation with its customers. As with all TransDigm acquisitions, we expect the DART acquisition to create equity value in-line with our long-term private equity-like return objectives.”
The acquisition, which is expected to close during the second calendar quarter of 2022, is subject to regulatory approvals and customary closing conditions. The acquisition will be financed through existing cash on hand. (Source: PR Newswire)

17 Mar 22. Rheinmetall achieves record figures in fiscal 2021:
Earnings at all-time high – margin reaches 10.5%
Rheinmetall on course for profitable growth in 2022
Fiscal 2021
– Consolidated sales increase by 4.7% to €5,658m
– Operating result improves by 33% to a record figure of €594m
– Group’s operating margin reaches 10.5%, after 8.3% in the previous year
– Operating free cash flow increases from €217m to €419m
– Record Rheinmetall backlog of €24.5bn
– Proposed dividend of €3.30 per share, after €2.00 in the previous year
Outlook for 2022: Sales growth and stable high margins
– Rheinmetall forecasts sales and earnings growth to continue in 2022
– Consolidated sales currently expected to grow by between 15% and 20%
– Group’s operating margin currently expected to be over 11%
Rheinmetall AG, Düsseldorf, continued on its profitable growth trajectory and closed fiscal 2021 with record figures. New record highs were set for both the operating result and operating free cash flow. Thanks to high-volume major orders from military customers and because international automotive manufacturers were awarding more contracts again, the order backlog is also at an all-time high. Consolidated sales increased mainly in the civilian business, which was characterized in 2021 by increasing demand in the global automotive industry.
Rheinmetall forecasts continuing sales and earnings growth for fiscal 2022. In the altered security policy situation, the Group considers itself to be in an auspicious position to play an important role in the imminent increase in defence capabilities with military products in Germany and partner countries.
Armin Papperger, Chief Executive Officer of Rheinmetall AG, comments: “Rheinmetall is on a very good course. Thanks to the strategy program concluded in 2021, we have completed the development into an integrated technology group in organizational terms. This is now paying off: For the first time, we have generated a record operating margin of more than half a bn. We are very proud of this achievement, which is based on all five of our divisions. In light of the changed political situation in Europe, many countries are now intensifying their efforts for security. With our products, we will participate in increasing budgets for military equipment. Security – as shown by the current conflict – is the bedrock of our life in peace and freedom. Rheinmetall has a special obligation here. We have created excellent conditions to help shape the transformation of the markets and achieve our ambitious targets for sustainable profitable growth. This also applies to our civilian activities: With a growing share of sales attributable to alternative drive technologies, we are well on track to handle the transformation of the industry and leverage new growth potential.”
Group’s profits soar with rising sales – free cash flow nearly doubled
In fiscal 2021, the Rheinmetall Group generated consolidated sales of €5,658m. Compared with the previous year’s sales of €5,405m (adjusted for discontinued operations in accordance with IFRS 5), this is an increase of €253m or 4.7%. Adjusted for currency effects, sales growth was 4.4%.
Fiscal 2021 was characterized by significant sales increases in the Sensors and Actuators and Materials and Trade divisions. With their civilian business, these divisions benefited from the – compared with the crisis year 2020 – increasing demand in the global automotive industry. In the other divisions, the sales level increased slightly. The international share of consolidated sales in the year under review was around 66% after 64% in the previous.
On December 31, 2021, the Rheinmetall backlog was €24.5bn, a new high. This figure includes binding orders (order backlog) and orders from framework contracts (frame backlog) as well as the nominated backlog of the civilian business.
With growth of 33%, Rheinmetall significantly increased its consolidated operating result (EBIT before special items) year-on-year in fiscal 2021. It increased by €148m to €594m, after €446m (previous year’s figure adjusted for discontinued operations in accordance with IFRS 5) in fiscal 2020. This is the highest operating result in the company’s recent history. The Group’s operating margin was 10.5%, which was significantly higher than the previous year’s figure of 8.3%.
Taking into account the positive special items of €14m – primarily from a real estate sale – EBIT in the Rheinmetall Group was €608m and thus €211m above the previous year’s figure of €398m.
Earnings after taxes reached €332m, significantly higher than the previous year’s figure of €1m. In the previous year, earnings included special items for impairment for piston production and provisions for restructuring measures.
After deduction of earnings attributable to non-controlling interests of €41m (previous year: €27m), earnings attributable to shareholders of Rheinmetall AG were €291m, compared with € 27m in the previous year. This results in earnings per share of €6.72, compared with € 0.62 in the previous year. Adjusted earnings per share from continuing operations increased from €5.93 to €9.04.
On this basis, a dividend payment for fiscal 2021 of €3.30 per share will be proposed to the Annual General Meeting, compared with €2.00 in the previous year. This equates to a payout ratio of 36.5% of adjusted earnings per share (previous year: 34%).
The operating free cash flow generated in the Rheinmetall Group in fiscal 2021 amounted to €419m or 7.4% of sales. It was therefore well above the strategic target range of 3% to 5% of sales. Compared with €217 m in the previous year, free cash flow increased by around 93% in the period under review.
Vehicle Systems: Orders acquired worth more than €2.8bn
The Vehicle Systems division, which operates in the sector of military wheeled and tracked vehicles, generated sales of €1,883m in fiscal 2021, exceeding the previous year’s figure of €1,846 m by 2.0%.
Significant sales contributions came from two major international projects relating to armored Boxer all-wheel-drive vehicles. In Australia, deliveries were made under the major order for 211 Boxer combat reconnaissance vehicles. In Great Britain, the start of production of the high-volume program to deliver 500 Boxer mechanised infantry vehicles resulted in initial sales.
Further significant sales were generated with the delivery of military trucks to the Bundeswehr and with logistic vehicles delivered to the Australian armed forces on the basis of a contract in place since 2013.
The order intake for the Vehicle Systems division in the year under review was €2,851 m, after €4,389 m in the previous year. With the order to modernize the British Challenger 2 main battle tank fleet, the division won a major contract of around €770 m to equip the European NATO land forces. Major new contracts were also signed with the armed forces in Germany. The delivery of armored engineering vehicles to the Bundeswehr has a net contract value of around €248m; the further modernization of the Puma infantry fighting vehicle comprises an order volume of around €421m (net).
The division’s operating result improved by around €24m to a total of €174m in 2021.
At 9.2%, the operating margin exceeded the previous year’s figure of 8.1% thanks to a better product mix.
Weapon and Ammunition: Operating result increases to €218m
The Weapon and Ammunition division generated sales of €1,233m with its weapon system and ammunition activities in the year under review. Measured against the previous year, this represents an increase in sales of €34m or 2.8%. The Propulsion Systems business unit made a contribution to this sales growth, increasing its sales by €15m year-on-year, mainly due to growth in the civilian chemicals business. Another positive effect resulted from the development of new business areas by the newly founded Rheinmetall Project Solutions GmbH, which provides the Bundeswehr with logistical deployment services. Based on a framework agreement, initial sales worth €16 m have already been generated here.
At €1,403m, order intake in the Weapon and Ammunition division was €357m lower than the previous year’s figure of €1,760m, which was particularly high due to a large-volume individual order from Hungary. Significant individual orders in fiscal 2021 included the order for the modernization of the British Challenger 2 main battle tanks’ weapon systems in the amount of €134m and orders from the Bundeswehr with a total volume of €283m.
The operating result in the Weapon and Ammunition division rose by €33m to around €218 m in fiscal 2021 (previous year: €184m), mainly due to the higher sales volume. The operating margin improved from 15.4% in the previous year to 17.6% in the year under review due to intensified cost optimization measures and a more profitable product mix in the traditional ammunition business.
Electronic Solutions: Operating margin increased to 10.6%
The Electronic Solutions division, which develops and produces solutions in the field of defence electronics, generated sales of €932m in fiscal 2021, on a par with the previous year (€931m). Sales in the period under review were largely influenced by the delivery of air defence systems to an international customer and by sales as part of the German contribution to NATO’s VJTF (Very High Readiness Joint Task Force) forces. Other relevant sales came from the division’s share in a major vehicle project for Australia and the expansion and modernization of Skyguard air defence systems for international customers.
The division recorded order intake of €1,021m in fiscal 2021, compared with €1,065 m in the previous year. Significant incoming orders were booked for air defence systems and for electronic components in the modernization program for the German armed forces’ Puma infantry fighting vehicle.
The order backlog of the Electronic Solutions division amounted to €2,420m at the end of fiscal 2021, compared with €2,298m in the previous year. The order backlog thus increased by €122m or around 5.3% year-on-year.
At €99m, the division’s operating result was up 7.6% on the previous year’s figure of €92m. The operating margin increased from 9.8% in the previous year to 10.6% in the year under review thanks to the successful completion of major orders and due to measures to reduce costs.
Sensors and Actuators: Significant increase in sales and operating result
The Sensors and Actuators division, which does business with its components and control systems for reducing emissions and for thermal management, increased its sales by 9.4% or €113m to €1,315m in the year under review following the pandemic-related slump in 2020. Significant increases in sales were generated in the first half of 2021 in particular. The second half of 2021 was dominated by the market shortage for electronic components and correspondingly reduced customer call-offs. The increase in the division’s sales is significantly greater than the global growth in light vehicle production, which is put at 2.5% (IHS Markit).
The division’s booked business in fiscal 2021 was 48% higher than a year earlier at €2,472m (previous year: €1,665m). The volume of orders for alternative drive systems almost doubled as against the previous year and attained a share in total booked business of roughly 30%.
The Sensors and Actuators division achieved an operating result of €103m in fiscal 2021. This corresponds to a significant increase of €67m compared with the previous year. The division’s operating margin increased by 4.9 percentage points to 7.8%.
Materials and Trade: Operating result more than doubled
The Materials and Trade division, which supplies plain bearings and structural components and conducts global aftermarket business, increased sales in 2021 by 22% or €115 m to €651 m compared with the previous year, which was severely impacted by the coronavirus pandemic.
The Bearings and Trade business units showed a very good year-on-year sales performance. The Bearings business unit increased sales by 22% year-on-year. In the plain bearings business this was due to higher overall volume sales, which were achieved despite supply volume reductions at some automotive manufacturers due to the shortage of semiconductors. The business unit increased sales year-on-year in Europe in particular. In the Continuous Castings unit, the increase in sales resulted from a significant rise in tonnage and material price increases which could be passed on to customers.
The Trade business unit achieved 20% higher sales than a year earlier. The key factor here was the Independent Aftermarket unit, which considerably increased its sales in Western and Eastern Europe and Latin America above all. However, sales in the Original Equipment
Supplier/Original Equipment business also exceeded the previous year’s level.
Booked business in the Materials and Trade division came to €720m in the period under review, a significant year-on-year increase of 26%. However, the previous year’s figure was impacted by the cautious approach of automotive customers to orders in the pandemic situation.
The Materials and Trade division achieved an operating result of €51m in fiscal 2021, up €22m on the previous year. As a result, the division’s operating margin increased by 2.4 percentage points year-on-year to 7.8%.
Rheinmetall Group forecast for 2022:
Strong sales growth with stable high margins
Based on the current market outlooks, the Rheinmetall Group expects growth in sales and anticipates a higher operating margin combined with an improved operating result in fiscal 2022.
The Rheinmetall Group’s annual sales are expected to increase organically by between 15% and 20% against the previous year’s level in fiscal 2022 (previous year’s sales: €5,658 m). This growth forecast accounts for the latest knowledge regarding the German government’s plans for possible procurements from the 2022 defence budget and the new special armed forces fund, more details of which have emerged in recent days.
In light of this, the growth forecast (8% to 10%) stated in the 2021 annual report could be adjusted to the current situation for the first time.
Based on the current sales forecast and taking into account holding costs, in fiscal 2022 Rheinmetall is expecting to see an improvement in the Group operating result and a Group operating margin of over 11% (previous year’s margin: 10.5%).
In line with the relevant current developments, Rheinmetall will make any necessary adjustments to its forecast during the course of the year.

15 Mar 22. Precision Aviation Group, Inc. (PAG) acquires Velocity Aerospace Group. Atlanta-based Precision Aviation Group, Inc. (PAG), a leading provider of products and value-added services to the Worldwide Aerospace and Defense industries is pleased to announce the acquisition of Velocity Aerospace Group (Velocity). Velocity is a leading provider of aviation maintenance, repair and overhaul (MRO) services as well as manufacturing. Velocity is headquartered in Frisco, TX, and operates 3 FAA Repair Stations in Burbank and Van Nuys, California and Ft. Lauderdale, Florida.
“Velocity is a great fit for PAG, by expanding our avionics and DER repair portfolio, as well as entering into the manufacturing space. They have a long history of delivering exceptional customer service, industry leading products and cost-effective repair solutions. With the Burbank and Van Nuys facilities added to our existing operations in Long Beach and Camarillo, as well as the new facility in Ft. Lauderdale, we now have “Next Generation Avionics MRO Centers of Excellence” in Southern California and South Florida that allows us to better serve our customers. These locations employ 140 personnel, perform over 25,000 annual repairs, and operate out of over 110,000 square feet of MRO facilities. I am excited about the collaboration of these facilities in terms of leveraging our avionics expertise, infrastructure, and our focus on next generation avionics repair solutions,” said David Mast, President & CEO of PAG.
Dan McDonald, Vice President and GM of Velocity stated, “It’s a very exciting time to join PAG as they continue to execute their strategic growth plans which include significant investments in Velocity’s product and service offerings, process updates, and new repair capabilities. We have worked closely with PAG’s management team throughout the acquisition process and believe this partnership will provide significant benefits to our customers, vendors, and employees.”
Precision Aviation Group (PAG) is a leading provider of products and value-added services to the aerospace and defense industries worldwide. With 16 Repair Stations, and over 650,000-square-feet of sales and service facilities in the United States, Canada, Australia, Singapore, and Brazil – PAG uses its twenty-two distinct business units and customer-focused business model to serve aviation customers through two business functions – Aviation Supply Chain – and its trademarked Inventory Supported Maintenance, Repair and Overhaul (ISMRO®).
PAG provides MRO and Supply Chain solutions for Fixed and Rotary-wing aircraft. PAG subsidiaries have MRO and manufacturing capabilities on over 150,000 products in four vertical categories – Avionics, Components, Engines and Manufacturing/Sub Assembly/DER. (www.precisionaviationgroup.com)
About Velocity Aerospace Group:
Velocity Aerospace Group provides Maintenance, Repair and Overhaul (MRO) services, Manufacturing and DER repairs to a global base of commercial, corporate, regional aircraft and helicopters. Velocity operates three FAA-certified repair stations in California and Florida which offer unique capabilities on avionics, cockpit panels, electrical systems, fire protection, interior lights, multi-layer circuit board assemblies and waste assemblies. (www.velocityaerospace.com) (Source: PR Newswire)

14 Mar 22. ECA Group and iXblue enter exclusive negotiations period to create new European high-tech champion. ECA Group and iXblue have entered an exclusive negotiations period to bring the two French companies together. Carried out by Group Gorgé, this operation will lead to the rise of a European high-tech industrial champion in the fields of maritime, inertial navigation, space and photonics. Long-standing partners, ECA Group and iXblue benefit from strong technological and commercial synergies. Bringing those two companies together will create a world-class player in the civil and defense sectors. With a unique offer ranging from components to complex systems, the group will provide high performance solutions for critical missions in harsh environments.
“Our two companies share the same culture of innovation, agility and entrepreneurship that are at the heart of each of our DNAs and for which we are both recognized and valued,” explains Fabien Napolitano, President & CEO of iXblue. “The new synergies created will not only ensure we keep this DNA but will also strengthen our capacity for innovation by leveraging our complementary expertise. This will allow us to continue to push the technological frontiers and support our customers in their most demanding challenges.”
“The joining of our two companies, which will employ over 1,500 people, offers great growth opportunities,” rejoices Dominique Giannoni, CEO of ECA Group. “Once combined, our various technological expertise will greatly help strengthen our leadership positions in our markets, while our complementary geographical footprint will enable us to better serve our customers by being closer to them.”
About ECA Group
ECA Group is a subsidiary of Groupe Gorgé since 1992, owned at 100%. The company is one of the world leaders in the field of autonomous robotics and integrated systems, particularly in the naval sector. The company provides its customers with the most efficient and technologically advanced solutions in the field of naval, land and air drones. ECA Group also offers innovative technological solutions for the Aeronautics and Space sectors.
About iXblue
iXblue is a global high-tech company recognized worldwide for delivering advanced navigation, photonics and maritime autonomy solutions. From components to systems and comprehensive solutions, iXblue critical technologies are at work in both the civil and defense markets. They meet customers demanding requirements for successful missions in the most challenging environments, from the deep sea to outer space. (Source: PR Newswire)

16 Mar 22. Envistacom To Divest Its Technology Development Business Unit.
Apothym Technology Group (ATG) will launch at Satellite 2022.
Envistacom, LLC will divest its technology development business unit, the Advanced Technologies Group (ATG), as a standalone business. The official name of the new company will be Apothym Technologies Group, LLC, but it will continue to be known as ATG.
Tweet this
“This development is the fulfillment of our strategy when we began ATG,” said Alan Carson, President of Envistacom. “Over the last three years, ATG has made great strides in both virtualization and antenna development and will continue to develop new and innovative technologies based on both warfighter and commercial market requirements. This change will allow both Envistacom and ATG to focus on their respective markets.”
Apothym Technologies Group will be headquartered in Peachtree Corners, GA, with a research and development center in Frederick, MD. Michael Geist, Envistacom’s current SVP of Strategy & Technology, will lead the company as President and will be supported by the current ATG team and an independent board of directors.
“We’re in an unprecedented time of technology advancement in the field of satellite communications. The emergence of highly customized next-generation satellite constellations demonstrates that the capabilities we are developing today will address tomorrow’s needs,” said Michael Geist, President of ATG. “With six patents and numerous others pending in the areas of transport virtualization and advanced antenna technologies, we aim to exceed our customer’s requirements. Today’s announcement is aligned with our commitment to our developmental customers and technology partners to deliver best in class, focused capabilities in support of their operational strategy.”
ATG will officially launch during the SATELLITE 2022 conference, which will take place from March 21 to 24, 2022 in Washington, DC.
About Apothym Technologies Group, LLC
Founded in 2022, Apothym Technologies Group (ATG) delivers products and capabilities that enable ubiquitous and secure wireless connectivity. Those solutions are derived from the company’s focus on developing a transport virtualization platform and advanced multi-beam, multi-frequency antenna technologies. ATG is headquartered in Peachtree Corners, GA, with an additional research and development center in Frederick, MD.
About Envistacom, LLC
Headquartered in Atlanta, GA, Envistacom provides communications, cyber, and intelligence solutions, support services and technology to the U.S. DoD and coalition partners in aerospace, defense, and intelligence communities. Customers rely on Envistacom for rapid-response, secure technology solutions and subject-matter expertise to support mission critical operations. With an elite team of former military leaders and domain experts located around the world, and multiple indefinite delivery, indefinite quantity (IDIQ) contract vehicles worth over $137B, Envistacom is a trusted partner in protecting military, civilians, and critical infrastructure around the world. Envistacom is a Disadvantaged Woman-Owned Small Business (DWOSB). For more information on solutions or contract vehicles, please visit www.envistacom.com, and follow @Envistacom on Facebook, Twitter, LinkedIn, and YouTube. (Source: BUSINESS WIRE)

16 Mar 22. Booz Allen to Acquire EverWatch and Accelerate Classified Capabilities for Clients
Expands cyber, software development, and analytics capabilities to support national security missions
• Accelerates Booz Allen’s national security growth aligned with VoLT strategy
• Complements Booz Allen’s National Cyber platform with specialized software development and analytics capabilities, a highly cleared workforce, and a focus on mission-critical classified programs
• Enables faster digital and cyber transformation for agencies in the Intelligence Community and beyond
Booz Allen Hamilton (NYSE: BAH) today announced that it has entered into a definitive agreement to acquire EverWatch, a leading provider of advanced solutions to the defense and intelligence communities.
Leveraging a highly skilled, cleared workforce, EverWatch builds and operates mission-critical classified platforms to defend against increasingly sophisticated national cyber threats. Its specialized capabilities complement Booz Allen’s deep AI and cyber portfolio, and will help Booz Allen to leapfrog technology development cycles and meaningfully accelerate the delivery of classified software development and analytics capabilities for national security clients.
EverWatch, a portfolio company of Enlightenment Capital, was founded in 2017 and is headquartered in Reston, Virginia. Following the closing of the transaction, EverWatch will operate as a wholly owned subsidiary of Booz Allen, working closely with the firm’s National Security Sector led by Sector President Judi Dotson.
“U.S. national and economic security depends on secure, trusted, and resilient technology, and in the most dynamic threat landscape of our time, delivering advanced solutions with speed and agility is essential for mission success,” said Dotson. “Combining Booz Allen’s mission experience and advanced technologies with EverWatch’s classified software development and analytics capabilities will help implement faster and more comprehensive solution delivery to help defense and intelligence agencies transform and stay ahead of threats.”
“EverWatch is an excellent strategic and cultural fit and this acquisition is a strategic accelerator well aligned with Booz Allen’s VoLT strategy, our investment thesis, and our expanding National Cyber platform capabilities,” said Matt Calderone, Chief Strategy Officer at Booz Allen. “Our combined capabilities will deliver exceptional value for our clients, employees, and shareholders.”
“Booz Allen and EverWatch share a deep commitment to protecting our national interests with advanced technology, mission intimacy, and digital transformation. We look forward to the combined strength of our organizations to deliver exceptional support to clients in the Intelligence Community and beyond,” said John Hillen, Chief Executive Officer at EverWatch.
EverWatch brings a legacy of service to national security agencies and core capabilities in software development and architecture, cloud, analytics, AI/ML, and TechSIGINT that strategically align with Booz Allen’s deep mission insights and robust portfolio of full-spectrum cyber operations, mission analytics, AI, and 5G offerings.
“EverWatch has invested heavily in developing innovative solutions and has become a market leader solving some of the most complex problems facing the national security sector. The combination with Booz Allen will further deepen innovation capabilities, accelerate our collective support of critical national security efforts, and enhance opportunities for EverWatch’s growing, skilled employee base,” said Devin Talbott, Founder and Managing Partner of Enlightenment Capital.
The transaction is expected to close in the first quarter of Booz Allen’s fiscal year 2023 and is subject to customary closing conditions. Terms of the transaction were not disclosed.
Booz Allen retained Jefferies LLC as financial advisor for the transaction and King & Spalding LLP as legal advisor, and Avascent for strategic industry advisory services. EverWatch retained Baird as financial advisor and Moore & Van Allen PLLC as legal advisor. EverWatch is backed by Enlightenment Capital, a private investment firm providing flexible capital and strategic support to middle market businesses in the Aerospace, Defense, Government & Technology (ADG&T) sector.
About Booz Allen Hamilton
For more than 100 years, military, government, and business leaders have turned to Booz Allen Hamilton to solve their most complex problems. As a consulting firm with experts in analytics, digital solutions, engineering, and cyber, we help organizations transform. We are a key partner on some of the most innovative programs for governments worldwide and trusted by its most sensitive agencies. We work shoulder-to-shoulder with clients, using a mission-first approach to choose the right strategy and technology to help them realize their vision.
With global headquarters in McLean, Virginia, our firm employs approximately 29,500 people globally as of December 31, 2021, with revenue of $7.9bn for the 12 months ended March 31, 2021. To learn more, visit www.boozallen.com. (NYSE: BAH)
About EverWatch
Headquartered in Reston, Virginia, EverWatch is a technology solutions company providing advanced intelligence, defense, and mission support to the U.S. Government for its most critical national security missions. Our technology and mission professionals help our national security partners gather and assess critical and actionable knowledge by building custom solutions to confront the most complex intelligence and counterintelligence challenges. Learn more at www.everwatchsolutions.com.
About Enlightenment Capital
Enlightenment Capital, a Washington, DC area based private investment firm, provides flexible capital and strategic support to middle-market companies in the Aerospace, Defense, Government & Technology (ADG&T) sector. The firm partners with businesses that provide vital services, protect critical infrastructure, innovate cyber and data solutions, enhance decision making capabilities, engineer aerospace and space systems, safeguard national security, and endeavor to meet the challenges of today and tomorrow. For more information, visit www.enlightenment-cap.com. (Source: BUSINESS WIRE)

17 Mar 22. Airbus interested in taking over Atos’s cybersecurity business – report. European aero and defence conglomerate Airbus (AIR.PA) is interested in taking over the cybersecurity business of French software company Atos (ATOS.PA), France’s BFM TV said on Thursday, citing sources with knowledge of the matter. Airbus did not immediately reply to a Reuters request for comment.
BFM, in its report, cited one source as saying Airbus had been looking into a potential acquisition of Atos over the last few weeks, driven by its interest in the field of cybersecurity, but added that at this stage, no outright takeover was on the cards.
“(Airbus CEO) Guillaume Faury believes that this topic (Atos) is too complicated given Airbus’s interests,” BFM cited one source as saying.
The report added that the group therefore opted against buying Atos as a whole as it had no interest in acquiring the French firm’s other activities. (Source: Reuters)

15 Mar 22. New venture capital fund focused on high-need, dual-use technology. A team of national security experts has launched a new venture capital fund targeting entrepreneurs developing critical dual-use commercial and defense technology.
Shield Capital announced the new fund Tuesday, which exceeded its target capitalization of $120m and is focused on four “high-growth” technology areas: artificial intelligence, space, autonomy and cybersecurity. Founders and managing partners Philip Bilden, a businessman and former military intelligence officer, and Raj Shah, the first director of the Pentagon’s Defense Innovation Unit, told Defense News in an interview that Shield has been working with a number of companies across those areas of expertise and will announce one of the fund’s first investments in an artificial intelligence company in the next few weeks.
Shah said the firm differentiates itself by bringing together partners from a diverse range of companies with deep knowledge of the government procurement process.
“Inside a firm, we really haven’t seen that done in any venture fund, and it’s resonated with our limited partners and the companies that we’ve invested in so far,” Shah said.
Along with Shah and Bilden, Shield’s team includes former military officers, program managers, acquisition experts and industry executives. Its board of advisers is filled with former national security officials, including retired Secretary of Defense Ashton Carter and past Director of the National Geospatial-Intelligence Agency Letitia Long.
Bilden said having a team of experts who are engaged and know how to navigate DoD processes brings value to the companies Shield invests in.
“These are earlier stage businesses — they need all the help they can get,” he said. “And one of the ways that we can do that is to have our national security advisors support them by either serving on their boards or basically giving them counsel on how to approach working with the labyrinth that is the Department of Defense or the federal government.”
Bilden and Shah began planning for Shield Capital in 2015, originally focusing their seed investments on cybersecurity. In 2016, Shah went to lead DIU, where he worked to leverage commercial technology to address national security needs and help non-traditional companies work with the government. That experience helped shape Shield’s investment strategy and after Shah left, he and Bilden decided to institutionalize their investments and create a fund.
Bilden said Shield hopes to create more funds in the future, focused on the “very important challenges in our national security ecosystem.”
The firm’s investment in technologies that are needed by both commercial and national security customers is key, Shah said, noting that companies developing dual-use capabilities tend to outperform.
“Historically, companies that have successfully done these dual-use strategies have grown very, very quickly,” he said. “We also think that by doing so now, we help build and support entrepreneurs creating great companies.”
Shield’s early portfolio companies include Resilience Insurance, Hawkeye 360, Elroy Air, GoSecure, Authentic8 and Rebellion Defense.
(Source: Defense News)

14 Mar 22. Bodycote turnaround slowed by automotive and aerospace markets.
Restructuring work to deliver £30mn of permanent cost savings
• Assets redeployed to higher-growth markets
• Lag in passing on energy price hikes could hit margins
There have been clear signs of progress at engineering group Bodycote (BOY) over the past year, although the delayed recovery of both the aerospace and the automotive industries weighed on its prospects.
The company’s revenue edged up by 3 per cent (or just 1.3 per cent in organic terms) to £616mn, which was slightly below the analysts’ consensus estimate of £619mn. Earnings per share of 35.8p were also lower than the consensus estimate of 36.7p.
Restructuring charges that wiped out last year’s profit lessened as work on Bodycote’s transformation plan completed. The company has closed 26 plants and opened five new ones, transferring “virtually all” of its productive assets into facilities in higher growth markets, it said.
Although it took a further £8.5mn restructuring charge in 2021, mainly due to asset impairments, the programme has delivered about £30mn of permanent cost savings, the company said. Its headline operating margin increased to 15.4 per cent, from 12.6 per cent in 2020.
End markets were a mixed bag. Business from general industrial customers grew by 14 per cent, but aerospace and defence revenue fell by 1 per cent, or 7 per cent on an organic basis and remains a third lower than in 2019. Automotive revenue rose 9 per cent year on year, but the chip shortage disrupting global production meant it remains 13 per cent below 2019 levels.
Bodycote said there are signs shortages in the sector “are starting to abate”, though.
Although the company has no direct exposure to Russia, Belarus or Ukraine, the jump in energy prices that has taken place since war broke out has meant higher costs for a company whose work involves heat treatment and thermal processing of parts.
Energy prices equate to about 10 per cent of current sales and the company argued it had been able to pass these on “year in, year out” for the past decade. However, it does so either through surcharges or contract indexation. Using the latter method, which it does for about 20 per cent of its business, can lead to a lag to recovery of between six to 12 months, which is not inconsequential given the scale of recent price increases.
Broker Jefferies said it expects downward revisions to Bodycote’s consensus earnings forecast for the year ahead of £121mn, given cost and foreign exchange headwinds. These pressures, and a lack of firm evidence of a recovery in aerospace or automotive, mean we don’t see yet any reason for changing our recommendation. Sell. Last IC View: Sell, 796p,12 Mar 2021. (Source: Investors Chronicle)

14 Mar 22. Luna Innovations Reports Fourth-Quarter and Full-Year 2021 Results.
Luna Completes Divestiture of Luna Labs.
Acquires LIOS Sensing from NKT Photonics.
Highlights
• Total revenues of $24.2m for the three months ended December 31, 2021, up 26%, compared to the three months ended December 31, 2020
• Gross margin of 58% for the three months ended December 31, 2021, compared to 61% for the three months ended December 31, 2020
• Operating income of $1.0 m for the three months ended December 31, 2021, compared to operating loss of $0.6m for the three months ended December 31, 2020
• Net income of $1.6m for the three months ended December 31, 2021, compared to net loss of $0.1m for the three months ended December 31, 2020
• Adjusted EBITDA of $3.1m for the three months ended December 31, 2021, compared to $3.0m for the three months ended December 31, 2020
• Adjusted EPS of $0.08 for the three months ended December 31, 2021, compared to $0.05 for the three months ended December 31, 2020
• Company provides 2022 outlook
Luna Innovations Incorporated (NASDAQ: LUNA), a global leader in advanced optical technology, today announced its financial results for the three months and full fiscal year ended December 31, 2021.
“In many ways, 2021 was a pivotal year for Luna Innovations, and that has continued into early 2022,” said Scott Graeff, President and Chief Executive Officer of Luna. “Through the challenges of the global pandemic, we stayed focused on our strategy and on enhancing our global leadership position in fiber optic technology. We integrated the OptaSense acquisition, and subsequent to year-end, completed the divestiture of Luna Labs and acquired LIOS Sensing. We reported record backlog and delivered double-digit revenue and gross profit growth for the fourth-quarter and full-year. Across our sensing and communications testing businesses, we realized some of the largest customer orders to date and penetrated into new geographies and markets, while implementing systems to support growth.”
Graeff continued, “Luna’s businesses are stronger than ever. The strategic initiatives that we undertook during the past five years, and in particular the past 18 months, have placed us in a better position to more fully capitalize on the growing 5G network communications, electric vehicle and other emerging market opportunities. The absolute focus and dedication of the Luna team is evident every day, as we serve our customers with excellence. I’m proud of the team for what they’ve accomplished and know that they will continue to execute against our vision: Enabling the Future with Fiber. We look forward to reporting against our 2022 goals, and updating you on initiatives, over the coming the months.”
Fourth-Quarter Fiscal 2021 Financial Summary
A reconciliation of Adjusted EPS and Adjusted EBITDA to the nearest comparable figures under generally accepted accounting principles (“GAAP”) can be found in the schedules included in this release.
Revenues for the three months ended December 31, 2021 increased 26% compared to the prior year period, primarily due to revenue generated by the businesses the Company acquired during 2020.
Gross margin for the three months ended December 31, 2021 was 58%, compared to 61% for the three months ended December 31, 2020, driven primarily by product mix as a result of acquisitions. Operating income increased to $1.0 m for the three months ended December 31, 2021, compared to an operating loss of $0.6 m for the three months ended December 31, 2020. The increase in operating income was primarily due to higher revenue resulting in a higher gross profit, as well as lower acquisition costs in the current quarter versus the prior-year quarter.
Net income was $1.6m, or $0.05 per fully diluted share, for the three months ended December 31, 2021, compared to a net loss of $0.1m, or $0.00 per fully diluted share, for the three months ended December 31, 2020. Adjusted EPS was $0.08 for the three months ended December 31, 2021 compared to $0.05 for the three months ended December 31, 2020. Adjusted EBITDA was $3.1m for the three months ended December 31, 2021, compared to $3.0 m for the three months ended December 31, 2020.
Full-Year Fiscal 2021 Financial Summary
A reconciliation of Adjusted EPS and Adjusted EBITDA to the nearest comparable GAAP figures can be found in the schedules included in this release.
Revenues for the twelve months ended December 31, 2021 increased 48% compared to the prior-year period, primarily due to our acquisitions in 2020.
Gross margin of 59% for the twelve months ended December 31, 2021 was down compared to 61% for the twelve months ended December 31, 2020 due to product mix as a result of acquisitions. Operating loss of $2.6m for the twelve months ended December 31, 2021, declined compared to operating income of $0.8m for the twelve months ended December 31, 2020. The decrease in operating income was primarily due to incremental amortization of intangible assets and inventory step-up related to Luna’s completed acquisitions.
Net income was $1.4m, or $0.04 per fully diluted share, for the twelve months ended December 31, 2021, compared to a net income of $3.3m, or $0.10 per fully diluted share, for the twelve months ended December 31, 2020. Adjusted EPS was $0.17 for the twelve months ended December 31, 2021, compared to $0.18 for the twelve months ended December 31, 2020. Adjusted EBITDA was $7.6 m for the twelve months ended December 31, 2021, compared to $7.9m for the twelve months ended December 31, 2020.
Subsequent Events
Subsequent to the close of the fiscal year, Luna completed two important and strategic transactions:
• Divestiture of Luna Labs, which was moved to Discontinued Operations in the third quarter 2021
• Acquisition of LIOS Sensing
LIOS Sensing, based in Cologne, Germany, is a recognized market leader in fiber optic distributed monitoring solutions for power cable, pipelines, oilfield services, security, highways, railways and industrial fire detection systems. The acquisition brings to Luna important Distributed Temperature Sensing (“DTS”) intellectual property, products and expertise. DTS strongly complements Luna’s existing offerings and provides algorithm development expertise, critical for AI and machine learning.
2022 Full-Year and Q1 Outlook
For fiscal year and Q1 2022, including both the mid-March divestiture of Luna Labs and the acquisition of LIOS Sensing, Luna expects:
• Total revenues in the range of $109m to $115m for full year 2022
• Adjusted EBITDA in the range of $10m to $12m for full year 2022
• Total revenues in the range of $20m to $22m for Q1 2022
Luna is not providing an outlook for net income, which is the most directly comparable GAAP measure to Adjusted EBITDA, because changes in the items that Luna excludes from net income to calculate Adjusted EBITDA, such as share-based compensation, tax expense, and significant non-recurring charges, among other things, can be dependent on future events that are less capable of being controlled or reliably predicted by management and are not part of Luna’s routine operating activities.
The outlook above does not include any future acquisitions, divestitures, or unanticipated events. (Source: BUSINESS WIRE)

14 Mar 22. Leonardo to boost defence electronics business with 1bn euro spending. Leonardo (LDOF.MI) plans to invest 1bn euros ($1.10bn) in Italy over five years to develop new products, modernize its factories and strengthen its supply chain in the defence electronics, the group said on Monday.
The Italian group aims to become the leader in defence electronics in Europe and has recently bought a stake in Germany’s Hensoldt (HAGG.DE) to move in this direction, Leonardo’s CEO recently said.
The group’s electronics division currently employs 13,000 workers, of which 8,500 are in Italy. The division designs, develops, produces and supports radar systems, advanced sensor technology and protection and defence systems for aviation, space, land-based and naval platforms.
“The plan will see Leonardo invest 200 m euros in Italian industry each year, plus an additional 50 m euros will be used to optimise Leonardo’s sites in Italy in each of the first three years of the plan,” the group said in a statement.
In parallel, the Italian group will also invest 300 m euros over three years in its electronics business in Britain. The company will create a new centralised logistics hub in Pomezia, near Rome, which will enable significant improvements in operational performance, efficiency and quality assurance. ($1 = 0.9115 euros) (Source: Reuters)

11 Mar 22. Leonardo posts 5% increase in annual revenues. Leonardo’s net profit more than doubled on a year-on-year basis, from €243m to €587m.
Italian multinational aerospace, defence, and security company Leonardo has posted revenues of €14.1bn in financial year 2021, an increase of 5%, compared to the €13.4bn recorded in 2020.
The increase was attributed to the strong performance of the European component of Defence Electronics and Security. The Aircraft unit of the Aeronautics and Helicopters segments also contributed to the rise.
The company’s earnings before interest, taxes, and amortisation (EBITA) in 2021 totalled €1.12bn. The figure represents a 19.7% increase from €938m, in 2020.
Net profit increased by 142% on a year-on-year (YoY) basis, from €243m to €587m.
The total value of new orders in the financial year amounted to €14.31bn, up 4% from 2020. The order backlog remained flat at €35.53bn.
Leonardo CEO Alessandro Profumo said: “We are back to our growth path and above pre-covid levels, excluding Aerostructures, for which a restructuring and relaunch plan is running. Our Defence and Governmental businesses remain strong and account for 88% of 2021 revenues, and we are seeing signs of recovery in our civil aeronautics business.
“We are fully committed to ESG. We have reduced CO₂ emissions by 23%, and increased the percentage of women hired with STEM profiles, and of young people under 30. 50% of our financial sources are ESG linked, with objectives fully aligned with our strategy and long-term incentive plan.”
The company has also decided to resume dividends, based on its 2021 performance.
In 2022, Leonardo expects order volumes to be at approximately €15bn, taking into account the impact of the current geopolitical and global health situation on the supply chain and the economy. Annual revenues are expected to be within the range of €14.5bn to €15bn.
Earlier this year, Leonardo completed the acquisition of a 25.1% stake in the German defence technology company Hensoldt. (Source: army-technology.com)

————————————————————————-
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.
————————————————————————-

BUSINESS NEWS

Ajax vehicles on course for new delivery times.

EXHIBITIONS AND CONFERENCES

VETERANS UPDATE