Sponsored by TCI International Inc.
20 May 22. HAL hits new high on strong Q4 results; stock soars 18% in a week. In the past one week, the stock has gained 18 per cent after the company reported 90 per cent year on year (YoY) jump in consolidated net profit at Rs 3,105 crore for March quarter (Q4FY22). Hindustan Aeronautics trades at all-time high; likely to see 20% upside
Analysts see up to 96% upside in HAL stock despite Russia overhang
HAL, Israel Aerospace tie up to turn civil aircraft into mid-air refuellers
Hindustan Aeronautics scales new high on tie-up with Israel Aerospace
Dornier 228 ideal for regional connectivity under UDAN: HAL CMD Madhavan
Shares of Hindustan Aeronautics hit a new high of Rs 1,785.35, after rallying 6 per cent on the BSE in Friday’s intra-day trade. In the past one week, the stock has gained 18 per cent after the company reported 90 per cent year on year (YoY) jump in consolidated net profit at Rs 3,105 crore for March quarter (Q4FY22). Meanwhile, the state-owned defence company made a profit of Rs 1,628 crore in Q4FY21.
Moreover, the company’s revenue from operations grew 6 per cent YoY to Rs 11,561 crore from Rs 10,867 crore in Q4FY21. The company said that the sales include Rs 1,276 crore of differential sales on finalization of fixed price quotation for FY2016-17, approved by the Ministry of Defence.
Meanwhile, HAL on Thursday said that ‘Type Certification’ of first indigenous light transport civil passenger aircraft “Hindustan 228-201” was handed over by Directorate General of Civil Aviation (DGCA) to Transport Aircraft R&D Center, HAL Kanpur at DGCA HQ New Delhi.
“Hindustan 228-201 aircraft is the first Type Certified fixed wing aircraft in India complying with latest FAR 23 certification requirement which is a major milestone towards vision of building a new, Atmanirbhar Bharat,” the company said.
In the previous month, HAL had entered into a pact with its long-term partner Israel Aerospace Industries (IAI). Under the pact, the company partnered with IAI to convert civil (passenger) aircraft to multi mission tanker transport (MMTT) aircraft in India. The scope of the partnership also covered “passenger to freighter aircraft” conversion along with MMTT conversions.
In the past three months, HAL outperformed the market by surging 32 per cent, as compared to 7 per cent decline in the S&P BSE Sensex.
Analyst at ICICI Securities has a ‘buy’ rating on HAL with a target price of Rs 1,805 per share. “Defence PSUs have stayed resilient in recent corrective phase after multiyear breakouts early during the year. HAL stays our top pick in the sector as it remains in a structural uptrend and offers a fresh entry opportunity with favourable risk reward after three week’s correction,” the brokerage firm added.
According to technical analyst at ICICI Securities, the stock signals inherent strength and bullishness that augurs well for the next leg of upmove. “Key observation is that the stock, has held above its 50 day EMA post results. Now fresh buying demand emerging after taking support at recent breakout area around Rs 1,500,” the brokerage firm said. (Source: News Now/https://www.business-standard.com/)
19 May 22. Triumph Group reports net sales of $386.7m in Q4 fiscal year 2022. The figure dropped 2% organically due to a fall in commercial widebody production and the timing of military OEM deliveries.
US-based aerospace and defence systems manufacturer Triumph Group has reported net sales of $386.7m in the fourth quarter of fiscal year 2022 (Q4 FY 2022) that ended on 31 March 2022.
The figure was $466.8m in the same period a year ago.
The company said that quarterly net sales declined 2% organically, excluding divestitures and sunsetting programmes, due to a fall in commercial widebody production and the timing of military OEM deliveries.
Operating income in Q4 FY 2022 totalled $38.8m, compared to a $46.2m operating loss in Q4 FY 2021. Adjusted operating income was $43m in the quarter, with an adjusted operating margin of 11%.
The company also reported a net loss in the quarter. The figure shrank year-over-year (YoY) to $10.6m in Q4 FY 2022, from a $73.5m net loss in Q4 FY 2021.
Triumph Group’s net sales totalled $1.5bn in FY 2022, down from $1.87bn recorded in the previous year.
Annual operating income was $104.3m with an operating margin of 7%.
In fiscal year 2022, the company incurred a net loss of $42.8m. The figure was $450.9m in fiscal year 2021.
The company also announced its financial outlook for FY 2023. It expects net sales to be between $1.2bn to $1.3bn in 2023.
Triumph chairman, president and CEO Dan Crowley said: “Triumph continued to deliver improving operating margin and cash flow, both sequentially and year over year, thanks to our talented and dedicated global team.
“We are pleased to provide financial outlook for fiscal 2023 powered by the diversity of our people, our highly engineered products, and the programmes and markets we serve.
“With a growing and profitable backlog, Triumph is well positioned to benefit from continued strength in military and freighter markets and the anticipated recovery in commercial aviation production and aftermarket demand over the next several years.”
Earlier this year, Triumph agreed to sell the Stuart Florida aerostructures business to Daher Aerospace. (Source: army-technology.com)
17 May 22. TEKEVER and Scorpio to Bring Drone Technology to Commercial Shipping. TEKEVER, the European drone-based maritime surveillance provider, has announced a strategic investment and partnership with Scorpio Investment Holding Ltd, part of the Scorpio group of companies, one of the world’s most storied and established maritime businesses.
Scorpio’s investment is part of a 20M Euro round recently raised by TEKEVER, that the company will use to accelerate its global expansion. It represents an important step towards bringing TEKEVER’s innovative technology and services to the Commercial Shipping market.
Sharing the same environmental and security concerns, the two companies have complementary know-how and will together develop space and drone-based services that can contribute towards safer, greener and more efficient operations in the Commercial Shipping and Offshore Wind markets.
“Scorpio has founded and is a significant investor in the largest product tanker company in the world and the largest Wind Turbine Installation Vessel owner.”, said Ricardo Mendes, TEKEVER CEO. “they additionally manage vessels for third parties and are a global ship manager. We are excited to explore the application for our fixed wing drones, near-space communications, and VTOL solutions in the largely untapped market of commercial shipping operations. This builds on TEKEVER’s strong governmental relations and pioneering drone application contracts globally”, he added. Filippo Lauro, Vice-President of Scorpio, said:
“we constantly look for opportunities to improve safety and reduce costs across our fleet and have been examining the application of drone technology for a while. Our partnership with TEKEVER, the world’s foremost safety maritime drone company, ensures this project will accelerate. We look forward to improving outcomes for our crew and customers and harnessing the power of drone technology together.” David Morant, Scorpio Managing Director, added:
“Ricardo Mendes and his team understand the application of drones through their full-stack solution to our business, and the specific demands of the maritime environment. We look forward to working together.” (Source: UAS VISION)
18 May 22. Micross Acquires PAAL Technologies and Expands its Hi-Rel Components Offering with MIL-17 May 22. STD-1553 Data Bus Couplers and RF/Wideband Transformers. Micross Components (“Micross”), a leading provider of high-reliability microelectronic product and service solutions for aerospace, defense, space, medical, energy, industrial and other applications, today announced the acquisition of PAAL Technologies (“PAAL”), a leading provider of MIL-STD-1553 Data Bus Couplers, Harnesses and RF/Wideband Transformers. The acquisition further expands the Hi-Rel Components portfolio of Micross, while providing customers of PAAL with single-source access to the most complete offering of end-to-end advanced microelectronic services and component, die and wafer solutions.
PAAL has established itself as a best-in-class supplier of MIL-STD-1553 Data Bus Couplers, Harness Assemblies and RF/Wideband transformers serving the most demanding applications for the Defense, Aerospace, and Space markets. In addition, their product offering is highly engineered, with a meticulous understanding of high frequency magnetics, and extensive experience serving the space requirements of the military primes and system level contractors. All products are designed and manufactured in the U.S., and PAAL maintains full documentation traceability for design, development, fabrication, test and inspection. PAAL’s operating facility has ISO9001 and AS9100 quality certifications.
“We are excited to join the Micross family, enabling us to provide our valued customers with a direct sales channel and support organization that is focused on high-reliability solutions. I am confident that engineering designers, as well as program and procurement managers will benefit from the extensive capabilities, resources, and new product lines available from our combined organization,” said Estro Vitantonio, President of PAAL Technologies.
Vincent Buffa, Chairman & CEO of Micross, stated, “The acquisition of PAAL Technologies will expand Micross’ market-leading portfolio of high-reliability microelectronic solutions, delivering synergies that will benefit our high reliability customers. Micross is uniquely positioned to provide customers with greater value by leveraging our diverse portfolio of products and services to meet all their microelectronic program and operational needs, including fully integrated packaged components and kitted solutions.”
Related Link: www.micross.com/PAAL
About Micross Components, Inc.
Micross is the most complete provider of advanced microelectronic services and component, die and wafer solutions. With the broadest authorized access to die & wafer suppliers, and the most comprehensive advanced packaging, assembly, modification and test capabilities, Micross is uniquely positioned to provide unparalleled high-reliability solutions from bare die, to fully packaged devices, to complete program lifecycle sustainment. For more than 40 years, Micross has been a trusted source for the aerospace, defense, space, medical, energy, industrial, and other markets.
For more information about Micross, please visit www.micross.com and follow us on LinkedIn or Twitter.
About PAAL Technologies
PAAL Technologies provides a full range of MIL-STD-1553 data bus components and RF transformers for signal processing applications to the Defense Industry. Our high reliability products are used by industry leaders, including Boeing, Northrop Grumman, Lockheed Martin and United Launch Alliance. With a proven track record of on-time delivery and unparalleled quality, PAAL has established itself as a valued supplier of products to the MIL/Aerospace industry for its most demanding applications. Our thorough understanding of high frequency magnetics and MIL standards, and a complete commitment to total customer satisfaction provide our customers a reliable supply partner for MIL-STD-1553 Data Bus Couplers and RF/Wideband transformers. Our products are designed and manufactured in the U.S., and are backed by a two-year warranty on workmanship and materials. Our Quality Management System is certified to ISO9001:2015 and AS9100:2016, and we maintain full documentation traceability for design, development, fabrication, test and inspection. www.paaltech.com (Source: PR Newswire)
17 May 22. Sigma Defense Announces Acquisition of Sub U Systems to Deliver Enhanced C5ISR and JADC2 Capabilities. Sigma Defense Systems LLC, a portfolio company of Sagewind Capital and leading provider to the national security community, today announced it has acquired Sub U Systems. Founded in 2008, Sub U Systems is a leading manufacturer of deployable tactical edge-of-network route, switch, and computing technology for commercial, government, and military use.
The acquisition of Sub U Systems strengthens the Sigma Defense portfolio, expanding its existing capabilities for C5ISR, JADC2 and tactical SATCOM communications to deliver a more robust portfolio of solutions tailored to specific use cases. Together, Sigma Defense and Sub U Systems are positioned to deliver a broad range of software applications via a common hardware platform to include ISR relay, edge computing, AI/ML and analytics at the edge. Sigma Defense’s operating model, process maturity and management experience will further strengthen Sub U Systems’ product capabilities.
“The acquisition of Sub U aligns with our vision of autonomously connecting people, systems and data with an integrated hardware and software approach to communications,” said Matt Jones, CEO of Sigma Defense. “We are very excited to be able to deliver a platform that will support leading edge solutions such as artificial intelligence and machine learning and analytics at the edge delivering sense, make sense and act capabilities supporting the DoD vision for JADC2. Sub U not only accelerates our vision for the future, but their customers will recognize immediate benefits through our ability to scale and deliver more in the way of engineering resources, manufacturing output and program management.”
“Sigma Defense is a natural fit for Sub U Systems’ tactical communications and IP networking solutions,” said Keir Tomasso, President and Founder of Sub U Systems. “Our history of innovative product design and development of customized communications solutions will bring new capabilities to the Sigma Defense portfolio. Sub U customers will benefit from the experience of the Sigma Defense management team and their ability to scale and deliver system and solutions in support of customer’s unique requirements. I am very proud of what we have accomplished and the entire Sub-team looks forward to bringing our innovative approach to Sigma Defense.”
Mr. Tomasso will continue to oversee Sub-U Systems operations and develop new solutions for growth.
About Sigma Defense
Sigma Defense Systems LLC is a leading technology company serving the Department of Defense (DoD) providing systems and services for Intelligence Surveillance and Reconnaissance since 2006. The company’s software-focused approach to tactical communications accelerates information collection and sharing for faster decision making and better mission outcomes. Customers turn to Sigma Defense for engineering, program management, and data logistics services for technical solutions that encompass ground, air, and space-based systems and sensors and network and satellite communications. Sigma is headquartered in Perry, GA with satellite offices both CONUS and OCONUS. Visit sigmadefense.com and follow Sigma Defense on LinkedIn for news and updates.
Sub U Systems (SUB-U) designs and manufactures software and hardware-based IP routers, switches, computers, integrated IP-based appliances, and Software Definable Network Appliances™ (SDN‑A™), for the commercial, public safety, and defense markets. As NSA Commercial Solutions for Classified (CSfC) experts, SUB-U delivers secure, high-performance products that meet the most stringent environmental requirements where ruggedization, size, weight, and power are critical. SUB-U also provides a full range of specialized support services in the form of custom design engineering and communications solution engineering support services. www.sub-u.com (Source: BUSINESS WIRE)
17 May 22. Thales signs an agreement with Sonae Investment Management to acquire S21sec and Excellium, reinforcing its cybersecurity activities.
- S21sec and Excellium are two major players in cybersecurity consulting, integration and managed services in Europe
- With this acquisition, Thales accelerates its cybersecurity development roadmap and expands its footprint in Spain, Portugal, Luxembourg and Belgium
- S21sec and Excellium employ 546 people and generated sales of 59 m euros in 2021.
Thales (Euronext Paris: HO) announces today the signature of a definitive agreement with Sonae Investment Management to acquire two of European leading cybersecurity companies, S21sec and Excellium, gathered under the holding company Maxive Cybersecurity.
This acquisition will complement Thales’ cybersecurity portfolio, strengthening its incident detection and response services (Security Operations Centre – SOC) as well as consulting, audit and integration services.
It will bring an extensive industrial expertise and a solid, diversified customer base of industrial companies and critical infrastructure providers, including in the financial services, government and public services, which accounted for more than 50% of its revenue in 2021.
With 75% of staff at 9 sites in Spain and Portugal, and 25% in Luxembourg and Belgium, it will also materially expand Thales’s European cybersecurity footprint, building on the companies’ strong history of innovation and leadership in cybersecurity.
With 546 employees, S21sec and Excellium businesses together generated 59m euros in sales in 2021.
The acquisition, for an enterprise value of 120m euros, is an important step forward for Thales in the highly dynamic market for cybersecurity consulting and managed services, which anticipates significant growth between 2020 and 2025.
As a global leader in cybersecurity, Thales is involved at every level of the cyber value chain, offering solutions ranging from risk assessment to protection of critical infrastructure, supported by comprehensive threat detection and response capabilities. Its offer is built around three families of products and services, which generated more than €1bn in sales in 2021:
- Cybels solutions portfolio, a complete suite of cybersecurity services including risk assessment, training and simulation, and cyberattack detection and response
- Sovereign products including encryptors and sensors to protect critical information systems
- The CipherTrust data security platform, the Safenet Trusted Access Identity & Access Management as a service solution, and the broader cloud protection & licensing offerings
In 2022, Thales plans to hire 11,000 people worldwide, including 1,000 in cybersecurity.
The transaction is subject to regulatory approvals and other customary closing conditions and is expected to be completed during the second half of 2022.
“After the successful acquisitions of Vormetric in 2016 and Gemalto in 2019 that represented a step change in Thales’ data security and encryption expertise, the acquisition of S21sec and Excellium consolidates our leadership in cybersecurity consulting and managed services. We are delighted to welcome the S21sec and Excellium expert teams as part of our fast-growing cybersecurity teams. Together, we will be able to provide solutions that deliver ever higher performance to our customers”. Marc Darmon, EVP Thales, Secure Communications & Information Systems
“As the majority shareholder of the company, we’ve helped Maxive Cybersecurity more than triple its yearly revenues, building on its history of innovation and specialization and helping it become one of Europe’s leading MSSP companies. The acquisition by Thales is the recognition of this exceptional work done by the entire team and the logical next step in Maxive’s journey. We are confident it will be a great opportunity to further grow Maxive’s business and people.” Carlos Alberto Silva, Managing Partner at Sonae Investment Management.
16 May 22. Aerojet Rocketdyne reprimands chairman over attempt to oust CEO. Aerojet Rocketdyne has reprimanded its executive chairman, Warren Lichtenstein, over a series of comments he made criticizing the company’s chief executive and hunting for a replacement as well as about its failed merger with Lockheed Martin.
In a memorandum dated May 2 and released Monday, the non-management committee of Aerojet’s board of directors ordered Lichtenstein to follow the company’s code of conduct in the future and not make unauthorized comments to outside parties about Aerojet’s management or strategic direction.
The board hadn’t authorized a search for a replacement CEO, the committee said in the memo outlining its investigation’s findings and explaining its decision to reprimand Lichtenstein, and he had acted improperly by approaching two parties to gauge their interest in the job.
And at least one — probably both — of those approaches came after Lichtenstein had been warned in a September memo not to make this type of outreach, the committee said.
But the committee concluded Lichtenstein’s “extensive questioning and demands for information” from Aerojet’s CEO, Eileen Drake, and other top executives on contingency plans if the Lockheed deal fell through did not amount to harassment or retaliation and were not improper.
The investigation provides a glimpse into the turmoil behind the scenes of Aerojet as the stalled acquisition by Lockheed Martin led to uncertainty as well as a look at the remarkable bad blood between Lichtenstein and Drake.
Lockheed’s initially announced its attempted $4.4 bn acquisition of Aerojet, which is a key supplier of solid rocket motors, in December 2020. The deal would have greatly strengthened Lockheed’s position in the space and hypersonic market.
Some on Capitol Hill supported the transaction, saying it would restore competitive balance to the industry after Northrop Grumman’s acquisition of Orbital ATK. But Sen. Elizabeth Warren, D-Mass., criticized it as a potential blow to competition and urged regulators to closely scrutinize it.
In January 2022, the Federal Trade Commission announced it would sue to block the acquisition over antitrust concerns, arguing the deal could allow Lockheed to cut competitors off from critical Aerojet-made missile components like scramjet engines. One month later, Lockheed said it had abandoned the deal.
In 2021, with the deal stuck in limbo, the conflict between Aerojet’s leadership grew.
Drake originally objected to Lichtenstein’s conduct in a May 2021 memo to the company’s then-general counsel, Arjun Kampani. She sent follow-up memos in September and October.
Drake described an “ongoing erosion of trust” with Lichtenstein and accused him of defaming her character and “laying the groundwork with the board … to remove me as CEO so he can pursue his strategy and personally benefit financially.”
In her memos, she said Lichtenstein was fixated on scenarios in which the Lockheed deal fell through and engaged in “premature contingency planning requests” that undermined the deal. She repeatedly called him a “liability.”
In Drake’s second memo in September, she said she had become aware of several conversations Lichtenstein had had with outside parties about the deal and Aerojet Rocketdyne’s leadership.
She alleged Lichtenstein had told Jim McAleese of McAleese and Associates in August 2021 that if the deal didn’t go through, Lichtenstein would run the company himself. This reinforced Drake’s belief that Lichtenstein was defaming her and preparing to oust her.
After Drake sent that second memo, the board of directors’ independent members warned Lichtenstein in another memo his comments to outside parties about the Lockheed deal and company management were unacceptable, even if they didn’t go so far as to violate the December 2020 merger agreement.
The board members also warned Lichtenstein his alleged discussion of plans for Aerojet’s executive management would be “highly sensitive” topics and discussing them openly could open the company up to potential harassment and defamation liabilities.
In his response, Lichtenstein strongly denied the allegations. He said he had not provided confidential information to any third parties, sought to blow up the deal, or defamed, harassed, threatened, or been hostile to any Aerojet management official.
Lichtenstein also said Aerojet must be prepared for the possibility — which eventually became a reality — that the deal might not go through.
And he said he continued “to be frustrated by management’s lack of responsiveness and transparency related to operational issues since the agreement and plan of merger [was] executed.”
But one month later, Drake sent another memo about Lichtenstein’s further alleged “improper behavior.” She said an unidentified industry colleague had been personally approached by Lichtenstein about the possibility of becoming Aerojet’s chief executive.
Lichtenstein allegedly told this person he wasn’t confident the merger would go through and that he was searching for a replacement CEO, Drake said.
In her own release issued Monday, Drake applauded the committee’s findings and reprimand of Lichtenstein and suggested he’s not fit to continue as executive chairman.
“Shareholders should ask themselves, if Mr. Lichtenstein’s allies believe he should be reprimanded for his conduct as the executive chairman of the company, why should he be entrusted to run the company without independent oversight?” Drake said in her release.
Lichtenstein also issued a release in which he reiterated his stance he was acting in shareholders’ best interests by talking to third parties about contingency plans if the deal went under.
“If these conversations truly crossed a line, one would expect that the committee would call them a violation of applicable company policies or of my fiduciary duty,” Lichtenstein said. “The committee did not.”
And he criticized Drake specifically, saying she pushed for the investigation for her own “personal motives” and wasted company resources in the process.
“These conclusions also speak volumes about Ms. Drake’s utter lack of credibility and selfish and self-serving motivations,” Lichtenstein said.
(Source: Defense News)
16 May 22. Kromek Group plc (“Kromek” or the “Group”) Business and Trading Update. Kromek (AIM: KMK), a leading developer of radiation and bio-detection technology solutions for the advanced imaging and CBRN detection segments, provides an update on business and trading for the year ended 30 April 2022. As noted in the Group’s interim results announcement in January 2022, Kromek continued to deliver on its existing contracts as well as win new and repeat orders during the first half of the year. In H2 2022, the commercial momentum increased, ahead of management’s expectations, including £5.9m in new orders being won in the final quarter, primarily in the CBRN detection segment.
The additional contract wins contributed to the Group achieving strong revenue growth in H2 over H1 2022 and Kromek expects to report revenue of £12.1m for the year ended 30 April 2022 (FY 2021: £10.4m), an increase of approximately 16%. However, the Group continued to be impacted by supply chain issues as detailed in the interim results. Specifically, the late arrival of certain components prevented the completion of orders totalling approximately £2.9m that were scheduled to be delivered before the year end. These orders have now begun to be shipped and the revenue is expected to be recognised in the first half of the current financial year. As a result, the Group expects to report an adjusted EBITDA loss for the year ended 30 April 2022 of approximately £1.2m.
The Group continued to maintain tight cost control, improve collections, and manage cash flow. As a result, and despite the significant increase in inventories due to the delayed shipment of certain orders, the Group had cash and cash equivalents at 30 April 2022 of approximately £5.1m. Kromek expects cash inflows following the delivery and payment of the aforementioned £2.9m orders; the unwinding of high inventory levels; and a continued improvement in customer collections. Consequently, the Board believes that the Group has sufficient cash available for the foreseeable future.
For the current financial year, Kromek continues to expect accelerated growth in both its segments and is forecasting substantial revenue growth in the year to 30 April 2023. The Group has excellent visibility over full year revenue forecasts with 50% contracted, 37% going through contract negotiation and the remaining 13% being provided by the Group’s regular repeat order business. This is the highest level of visibility that the Group has ever had at the start of a financial year.
The anticipated growth is based on delivery under existing long-term contracts, new orders won in H2 2022, and the sustained demand being received for its products. In particular, the current geo-political environment is driving increased interest from government agencies in Kromek’s products in the CBRN detection segment. In advanced imaging, Kromek’s CZT-based products continue to be in high demand from both its existing and new OEM customers.
Accordingly, the Board remains confident of the Group’s prospects and of delivering further strong growth in the current year. The level of contracted revenue continues to build, further improving revenue visibility and the Board is enthused by the substantial opportunities for Kromek and its technology.
The Group will provide further information at the time of its full year results announcement in July 2022.
17 May 22. Kromek Poised for a strong recovery.
- Estimated contract backlog of £55m
- Cash profitability expected in 2022/23 financial year
- Cash position to be bolstered by unwinding of inventory
Sedgefield-based Kromek (KMK:9.75p), a radiation detection technology company focused on the medical imaging and nuclear markets, has reported accelerating growth across both business segments.
Buoyed by £5.9mn of contract wins in the last three months of the 2021/22 financial year, the directors expect a near 50 per cent ramp up in revenue to £18mn in the 12 months to 30 April 2023. Importantly, 50 per cent of the revenue forecast is already contracted, 37 per cent is going through contract negotiation and the balance represents repeat orders.
The recent contract awards have been partly driven by increasing interest for Kromek’s chemical, biological, radiological and nuclear (CBRN) detectors from governments. I can only see demand gaining further momentum given the current geopolitical environment and the need for multiple sovereign states to step up their national security as an urgent priority.
The directors also report high demand for the group’s cadmium zinc telluride (CZT) based products from original equipment manufacturers (OEMs) in the medical imaging industry. Following Canon’s acquisition of Redlen Technologies, medical imaging OEMs that adopting CZT technology in their next generation x-ray and gamma ray imaging products – Phillips and United Imaging, for example – are now far more reliant on Kromek, the only independent manufacturer of CZT.
The strong demand that is now in evidence is slightly tempered by supply chain disruption. Specifically, the late arrival of certain components prevented £2.9mn worth of orders being completed in the 12 months to 30 April 2022. These will be shipped in the current financial year. As a result, the group will post a cash loss of £1.2mn on revenue of £12.1mn for the year just ended, an improvement on the prior year but shy of the breakeven result that Equity Development had anticipated.
That said, Kromek looks incredibly well placed to return to profit in the new financial year when analysts pencil in a small cash profit of £0.3mn. Also, the unwinding of inventory and cash inflow from order completions will bolster gross cash of £5.1mn (excluding £6.5mn of borrowings) so the group is adequately funded to deliver on its order book. Moreover, it will not take too many additional CBRN wins from governments to deliver a material step change in profits given the high gross margin earned. I also expect Kromek to be awarded multi-year and multi-m dollar contracts from medical imaging OEMs looking to lock in surety of supply.
So, although the news void since my last article has undermined investor confidence (‘Pivotal year unfolding for Kromek’, 18 January 2022), as more tenders are converted in major orders, then a reappraisal of Kromek’s prospects should lead to a re-rating. New house broker finnCap has a 12-month target price of 27p, but sees scope for a move towards 40p as new orders are landed. Recovery buy. (Source: Investors Chronicle)
16 May 22. Carlyle to buy U.S. defense contractor ManTech for $3.9bn. ManTech International Corp (MANT.O) on Monday agreed to a $3.93bn all-cash deal with Carlyle Group Inc (CG.O) as the private equity firm strengthens its portfolio of U.S. defense contractors.
Carlyle has offered $96 per ManTech share held, representing a 17% premium to the stock’s closing on Friday. The company’s shares were up about 15% in early trading in a weak broader market.
Shares have gained about 11% since Reuters in February reported that ManTech’s co-founder, George Pederson, was exploring options for his controlling stake that included a sale.
Fairfax, Virginia-based ManTech performs defense and non-defense contracting services for the intelligence community, the Pentagon and other government agencies.
Carlyle will benefit from ManTech’s large exposure to intelligence customers and to the cybersecurity sector, Wells Fargo analyst Matthew Akers said.
ManTech’s business could be an attractive addition to the portfolios of other Fed IT companies such as Leidos Holdings Inc (LDOS.N), Booz Allen Hamilton Holding Corp (BAH.N), Akers said, adding he would not rule out further bids.
The enterprise value of the deal, expected to close in the second half of 2022, was $4.2bn.
The deal comes when the outlook for mergers and acquisitions in the defense sector has been uncertain after arms maker Lockheed Martin Corp (LMT.N) in February terminated its $4.4 bn proposal to acquire rocket engine maker Aerojet Rocketdyne Holdings Inc (AJRD.N) amid opposition from U.S. antitrust enforcers. read more
The Biden administration has also released a report detailing recommendations to boost competition in its defense industrial base, saying rapid consolidation has created a national security risk.
16 May 22. Rocket Lab Announces First Quarter 2022 Financial Results and Guidance for Second Quarter 2022.
- Revenue of $40.7m, representing 124% Year-on-Year revenue growth
- Space Systems contributed 84% of total Q1 revenue, representing Year-on-Year revenue growth of 1,873%
- Second quarter revenue expected to range between $51m and $54m
Rocket Lab USA, Inc. (Nasdaq: RKLB) (“Rocket Lab” or “the Company”), a global leader in launch services and space systems, today shared the financial results for its fiscal first quarter of 2022, ended March 31, 2022.
“Our team delivered a strong first quarter of 2022, continuing to execute across launch services and space systems,” said Rocket Lab founder and CEO, Peter Beck. “Our rapid succession of space systems acquisitions, bookended with the acquisition of SolAero Technologies, Inc. in Q1 2022, has strengthened our position as a leading end-to-end space company delivering complete spacecraft design and manufacturing, satellite components, flight software, and launch services. This strategic evolution was cemented with the award of our single largest contract to date: a $143 m contract with MDA to design and build 17 spacecraft buses for use by Globalstar, Inc., a leading provider of Mobile Satellite Services.
“We continued to deliver reliable access to space with a successful Electron launch in Q1, delivering the first of three launches for Earth-imaging company Synspective. Our Q1 momentum continued into the early half of our second quarter with an additional two launches deploying 36 satellites to space, another bulk-buy of three Electron missions, the announcement of our first launch scheduled from Launch Complex 2 in Wallops Island, Virginia, and a monumental achievement in our rocket reusability development program with the mid-air helicopter catch of a returning Electron rocket booster from space for the first time.”
First Quarter 2022 Business Highlights:
- Awarded a $143 m subcontract by MDA Ltd (TSX:MDA) to deliver 17 spacecraft buses for the Globalstar constellation. The partnership with MDA Ltd includes options for additional satellites, satellite dispensers, launch integration, and satellite operations control center by Rocket lab, and represents the strength of Rocket Lab’s strategy to grow its Space Systems business and provide end-to-end space mission solutions at scale.
- Successfully launched the first of three dedicated missions for Synspective, delivering an Earth-imaging satellite to low Earth orbit as part of Synspective’s growing constellation.
- Completed the construction of and successfully launched from Rocket Lab’s third Electron launch pad, Pad B, located at the Company’s Launch Complex 1 in New Zealand.
- Closed the acquisition of SolAero Technologies, Inc. and shortly after began qualification of what we expect to be the world’s highest-performing space solar cells, scheduled to be available for commercial use in late 2022.
- Completed the production of solar panels for the OneWeb constellation, a planned constellation of spacecraft to provide world-wide internet access. The contract is the largest program deployment of high-efficiency space solar cells in SolAero’s history.
- Selected by NASA as one of 12 companies to provide launch services for its Venture-Class Acquisition of Dedicated and Rideshare (VADR) missions, a $300 m opportunity in launch contracts across the program.
- Began the expansion of the Company’s Space Systems footprint in Littleton, Colorado, where the new facility will triple capacity to support growing customer demand for flight software, mission simulation, and Guidance, Navigation, and Control (GNC) services.
- Selected Wallops Island, Virginia, as the location of a 250,000 sqft production complex and launch site for Rocket Lab’s Neutron launch vehicle, with the commencement of construction shortly after.
Since March 31, 2022 Rocket Lab also:
- Launched two Electron missions to deploy 36 commercial satellites to space.
- Completed the first helicopter catch of an Electron rocket booster returning from space under a parachute, a monumental achievement in the Company’s program to make Electron the world’s first reusable orbital-class small rocket.
- Supported eight missions with Rocket Lab satellite hardware and flight software across two launches on another launch provider.
- Signed a multi-launch agreement with Hawkeye360 for three Electron missions from late 2022 to deliver 15 satellites to low Earth orbit.
- Scheduled the first Electron launch from Launch Complex 2 in Wallops Island for no earlier than December 2022, pending NASA certification of its NAFTU software. Completed the Readiness Review for the CAPSTONE mission to the Moon for NASA scheduled to be launched on an Electron launch vehicle and Photon spacecraft in May 2022.
Second Quarter 2022 Guidance
- Revenue between $51 and $54m
- Launch Services revenue of approximately $19m
- Space Systems revenue of between $32 to $35m
- GAAP Gross Margins between 11% to 13%
- Non-GAAP Gross Margins between 26 to 28%
- GAAP Operating Expenses $39 to $41m
- Non-GAAP Operating Expenses $23 to $25m
- Expected Interest expenses (Income), net $2.5m expense
- Adjusted EBITDA loss of $3.5 to $5.5m
- Basic Shares Outstanding 464m
(Source: BUSINESS WIRE)
09 May 22. Investment Agreement Signed Between Officina Stellare + Satellogic Will Strengthen Their Alliance. Officina Stellare S.p.A. (the “Company”), with headquarters in Sarcedo (Vicenza), listed on Euronext Growth Milan (“EGM”) of the Italian Stock Exchange, has signed an investment agreement with shareholders Virgilio Holding S.p.A., Astro Alliance S.r.l., MIRAK Enterprise S.r.l. and Gino Bucciol (the “Major Shareholders”), owners of a stake in the share capital of the Company consisting of 4,677,690 shares and equal to 82.44% of its capital, and Nettar Group Inc. (“Nettar” and, jointly with the Company and the Major Shareholders, the “Parties”), a wholly-owned subsidiary of Satellogic Inc. (“Satellogic”) (NASDAQ: SATL), a geospatial company and a leader in sub-meter resolution, Earth Observation (EO) data collection (the “Investment Agreement”).
Gino Bucciol, Co-founder and Director of Business Development at Officina Stellare, said, “Officina Stellare and Satellogic have always had in their genetic code the innovative and disruptive approach imposed by the new challenges of the New Space Economy. Although operating in different domains, both companies have tried to seize the opportunities generated by the democratization of space. Therefore, there are the best conditions for this collaboration to be a starting point for new successful projects. The solid collaboration with a leading international group such as Satellogic will amplify the positive returns for the business, and it will attest Officina Stellare’s uniqueness as a primary Space Factory, appreciated worldwide for its in-house skillset and capabilities in the aerospace sector; a production facility where technology and versatility are at the highest levels. We are convinced that the synergies that will arise from this partnership will have positive impacts on the business of both companies, and will ensure a greater market penetration in those areas not yet conquered by our Group.”
Emiliano Kargieman, Co-founder and CEO of Satellogic Inc., said, “We are happy to support Officina Stellare in its growth trajectory with this investment that will strengthen our ongoing collaboration. They are a valued supplier and this agreement solidifies our shared commitment to continue to develop and improve Earth Observation technology through the use of advanced optical systems.”
For the in-depth details of this transaction, please email the company’s Investor Relations division at . (Source: Satnews)
13 May 22. Terran Orbital Reports First Quarter 2022 Financial Results. Terran Orbital Corporation (NYSE: LLAP) (“Terran Orbital” or the “Company”), a leading small satellite manufacturer primarily serving the United States aerospace and defense industry, today announced financial results and operational highlights for its first fiscal quarter ending March 31, 2022.
First Quarter 2022 Highlights
- Generated $13.1m of revenues, a 25% increase from first quarter of 2021
- Signed record $162m of new contracts during the quarter
- Record backlog of $222m as of March 31, 2022, up 200% since December 31, 2021
- Awarded 42 satellites for US Space Development Agency’s (“SDA”) Tranche 1 Transport Layer
- Increased manufacturing and office space to over 250,000 sf and headcount to more than 330
- Built pipeline to 140 opportunities representing over $12bn in value as of March 31, 2022
- Completed merger with Tailwind Two Acquisition Corp. (the “Tailwind Two Merger”) and related private equity and debt transactions; began trading on NYSE: LLAP
- Net loss of $71.4m or ($0.85) per share
- Adjusted EBITDA(1) loss of $14.7m
- Ended quarter with $76.7m of cash
Marc Bell, Co-Founder, Chairman & CEO, said, “We had a record quarter of contract wins and grew our backlog to more than $220 m by quarter end. We are focused on delivering satellites and expanding our production capacity to satisfy our growing customer demand. Market demand signals for small satellites have been increasing rapidly in 2022 as evidenced by the growth in defense budgets. We continue to see tremendous demand for our satellite manufacturing business going into 2022 and have built our pipeline to over $12bn of opportunities.”
Results for the First Quarter of 2022
Total revenue for the first quarter of 2022 was $13.1m, up 25% compared to $10.5m in the same period in the prior year. During the quarter we executed on a growing mix of missions for defense, civil, and commercial customers. In the face of supply chain pressures widely reported across the industry, we successfully delivered multiple satellites to customers. We did, however, adjust our estimate-at-completion (“EAC”) on certain firm fixed price contracts. EAC adjustments reduced revenues by approximately $3m in the first quarter of 2022.
Cost of sales for the quarter was $16.0m compared to $9.7m in the same period in the prior year. The increase in cost of sales was primarily due to an increase of $4m in direct costs incurred in satisfying customer contracts. Cost of sales included $2.1m of non-recurring share-based compensation expense and approximately $0.7m of contract loss reserves due to EAC adjustments.
Gross profit was $(2.8)m, compared to $0.8m in the same period in the prior year. Excluding share-based compensation and depreciation and amortization included in cost of sales, Adjusted Gross Profit(1) was $(0.2) m, compared to $1.2m in the same period in the prior year. EAC adjustments reduced gross profit and Adjusted Gross Profit by approximately $3.7m, including approximately $3m from revenue adjustments and $0.7m of contract loss reserves.
Selling, general and administrative expenses were $30.2m in the first quarter of 2022, compared to $6.7m in the same period in the prior year. The increase was primarily due to $15.1m of non-recurring share-based compensation expense as a result of the Tailwind Two Merger, increases in corporate salaries and wages and facility costs related to capacity expansions, as well as accounting, legal and other professional fees connected to the company’s efforts to become a public company.
Our net loss for the quarter was $71.4m compared to a net loss of $77.5m for the same period in the prior year. In addition to the items discussed above, net loss decreased as a result of a reduction in loss on extinguishment of debt due to the timing and impact from recent financing transactions, partially offset by an increase in change in fair value of warrant and derivative liabilities as a result of the Tailwind Two Merger and higher interest expense as a result of recent financing transactions.
Adjusted EBITDA was $(14.7)m, compared to $(3.6)m in the same period in the prior year. The decrease in Adjusted EBITDA was primarily due to a decrease in gross profit and increases in salaries and wages, facility expenses, and professional fees.
The Company views growth in backlog as a key measure of its business growth. Backlog represents the estimated dollar value of executed contracts, including both funded (firm orders for which funding is authorized and appropriated) and unfunded portions of such contracts, for which work has not been performed.
As of March 31, 2022, the Company’s backlog totaled approximately $222 m, a 200% increase since December 31, 2021, driven primarily by the Company’s contract awards during the quarter including an award to build 42 satellites for the SDA Tranche 1 Transport Layer.
Balance Sheet and Liquidity
As of March 31, 2022, Terran Orbital had $76.7m of cash on hand and approximately $204.5m in gross debt obligations. The Company’s debt includes $28.1m in connection with an obligation under one of the PIPE investment subscription agreements, of which $5.6m is payable in cash with the remaining $22.5m payable in cash or equity at the Company’s option, subject to certain requirements.
The Company’s near-term focus is on the successful execution of its existing contracts and obligations as well as winning new contracts to continue to expand our backlog. Accordingly, the Company plans to contribute significant resources to continue to expand its manufacturing capacity, vertically integrate, and continue to expand our ever-growing exceptional pool of talent. Capital expenditures for fiscal year 2022 are currently expected to be approximately $15m to $20m.
(1) This is a non-GAAP financial measure. Definitions of the non-GAAP financial measures used in this press release and reconciliations of such measures to their nearest GAAP equivalents are included below.
(Source: BUSINESS WIRE)
10 May 22. CPI buys sensor pod maker AdamWorks. US-based Communications & Power Industries (CPI) has expanded its airborne product line by acquiring AdamWorks LLC, which manufactures composite structures for military, commercial, and business aircraft, CPI announced on 9 May.
AdamWorks co-founder and CEO Kim Madigan will continue to run the Centennial, Colorado-based company, which will become part of the Radant Technologies Division within CPI’s Satcom & Antenna Technologies business unit. The financial terms of the deal were not disclosed.
AdamWorks’ defence products include pods and radomes that house sensors, and fairings that cover gaps and spaces in aircraft structures. Its wares have flown on such military platforms as the General Atomics Aeronautical Systems Inc (GA-ASI) MQ-9 Reaper unmanned aerial vehicle (UAV), the Northrop Grumman RQ-4 Global Hawk UAV, the Airbus C295 transport plane, and the Northrop Grumman E-8C Joint Surveillance Target Attack Radar System (Joint STARS) ground surveillance plane. (Source: Janes)
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.