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16 Aug 23. Wolfspeed Reports Financial Results for the Fourth Quarter and Full Fiscal Year 2023. Wolfspeed, Inc. (NYSE: WOLF) today announced its results for the fourth quarter of fiscal 2023 and the full 2023 fiscal year.
Quarterly Financial Highlights (all comparisons are to the fourth quarter of fiscal 2022)
• Revenue of $235.8m, compared to $228.5m
• GAAP gross margin of 27.4%, compared to 34.5%
• Non-GAAP gross margin of 29.0%, compared to 36.5%
• GAAP net loss from continuing operations of $113.3m, or $0.91 per diluted share, compared to $61.8m, or $0.50 per diluted share
• Non-GAAP net loss from continuing operations of $52.8m, or $0.42 per diluted share, compared to $26.0m*, or $0.21* per diluted share
• Quarterly design-ins of $1.6bn
Full Fiscal Year Financial Highlights (all comparisons are to fiscal 2022)
• Revenue of $921.9m, compared to $746.2m
• GAAP gross margin of 30.3%, compared to 33.4%
• Non-GAAP gross margin of 32.6%, compared to 35.6%
• GAAP net loss from continuing operations of $329.9m, or $2.65 per diluted share, compared to $295.1m, or $2.46 per diluted share
• Non-GAAP net loss from continuing operations of $180.7m, or $1.45 per diluted share, compared to $115.4m*, or $0.96* per diluted share
• Year-to-date design-ins of $8.3bn
“We are very pleased with our progress in fiscal 2023 as we secured $5 bn of funding to support our continued capacity expansion plans, initiated construction on our 200mm materials factory in North Carolina, and generated initial revenue from the Mohawk Valley 200mm device fab,” said Wolfspeed CEO, Gregg Lowe. “With approximately $8.3 bn of customer design-ins secured in the last 12 months, customers are continuing to select Wolfspeed for their future silicon carbide device needs, so we must remain keenly focused on scaling our materials and device capacity in fiscal 2024.”
For its first quarter of fiscal 2024, Wolfspeed targets revenue in a range of $220m to $240m. GAAP net loss is targeted at $145 m to $169 m, or $1.16 to $1.35 per diluted share. Non-GAAP net loss is targeted to be in a range of $75m to $94m, or $0.60 to $0.75 per diluted share. Targeted non-GAAP net loss excludes $70 m to $75m of estimated expenses, net of tax, related to stock-based compensation expense, amortization or impairment of acquisition-related intangibles, amortization of debt issuance costs, net of capitalized interest, project, transformation and transaction costs and loss on Wafer Supply Agreement. Targets in this paragraph, other than revenue, reflect the presentation changes described below.
Start-up and Underutilization Costs:
As part of expanding our production footprint to support expected growth, we are incurring significant factory start-up costs relating to facilities that we are constructing or expanding that have not yet started revenue generating production. These factory start-up costs have been and will be expensed as operating expenses in our statement of operations.
When a new facility begins revenue generating production, the operating costs of that facility that were previously expensed as start-up costs will instead be primarily reflected as part of the cost of production within the cost of revenue, net line item in our statement of operations. For example, our new silicon carbide device fabrication facility in Marcy, New York began revenue generating production at the end of fiscal 2023 and the costs of operating this facility going forward will be primarily reflected in cost of revenue, net in future periods.
During the period when production begins, but before the facility is at its expected utilization level, we expect some of the costs to operate the facility will not be absorbed into the cost of inventory. The costs incurred to operate the facility in excess of the costs absorbed into inventory are referred to as underutilization costs and are expensed as incurred to cost of revenue, net. We expect that these costs will be substantial as we ramp up the facility to the expected utilization level.
We incurred $39.5m and $160.2m of factory start-up costs for the fourth quarter and full fiscal year 2023, respectively, which accounted for a significant portion of our operating expenses. For the first quarter of fiscal 2024, we target our operating expenses to include approximately $8m of factory start-up costs primarily in connection with our materials expansion efforts and our cost of revenue, net, to include approximately $37m of underutilization costs primarily in connection with our new silicon carbide device fabrication facility in Marcy, New York.
About Wolfspeed, Inc.
Wolfspeed (NYSE: WOLF) leads the market in the worldwide adoption of silicon carbide and gallium nitride (GaN) technologies. We provide industry-leading solutions for efficient energy consumption and a sustainable future. Wolfspeed’s product families include silicon carbide and GaN materials, power devices and RF devices targeted for various applications such as electric vehicles, fast charging, 5G, renewable energy and storage, and aerospace and defense. We unleash the power of possibilities through hard work, collaboration and a passion for innovation. Learn more at www.wolfspeed.com. (Source: BUSINESS WIRE)
17 Aug 23. BAE Systems plc – Proposed acquisition of Ball Aerospace.
BAE Systems plc (“BAE Systems” or the “Company”) announces that it has entered into a definitive Stock Purchase Agreement to acquire the Ball Aerospace business from Ball Corporation for c.$5.55bn in cash, subject to customary closing adjustments. The proposed stock transaction will be treated as an asset purchase for federal tax purposes, with an expected net present value tax benefit of c.$750m making the underlying economic consideration for the business c.$4.8bn.
Ball Aerospace is a unique opportunity to strengthen BAE Systems’ world class multi-domain portfolio
• Leading provider of mission critical space systems and defence technologies across air, land and sea domains
• Strong growth potential in areas aligned with the US Intelligence Community and Department of Defense’s highest priorities
• Attractive positioning and outlook across military and civil space, C4ISR and missile and munition markets
• Highly complementary fit adding material scale of high calibre space, optical and antenna solutions
• Excellent cultural fit with a long and distinguished track record of innovation and product development
• Substantial investment in world class facilities and capabilities in the last five years to support growth
• Substantial increase to our US classified revenues, offerings and embedded customer relationships
Value enhancing financial effects
• Expected revenue CAGR of c.10% over the next five years with scope to expand margins
• Accretive to margins and earnings per share in the first year post completion including run-rate cost synergies
• Accretive to cash flow per share in the first year
• ROIC expected to exceed WACC within five years post completion
• Multiple of ~13x 2024E EBITDA net of the tax benefit and run-rate cost synergies
• Proposed acquisition to be funded by a combination of new external debt and existing cash resources
BAE Systems structurally compounding investment case
• Attractive and strengthened revenue outlook
• Improved margins and continued expansion potential
• Strong cash conversion
• Consistent with capital allocation policy and allows for continued share buyback activity as announced with the Half Year 2023 results
Commenting on today’s announcement, Charles Woodburn, Chief Executive of BAE Systems, said:
“The proposed acquisition of Ball Aerospace is a unique opportunity to add a high quality, fast growing technology focused business with significant capabilities to our core business that is performing strongly and well positioned for sustained growth. It’s rare that a business of this quality, scale and complementary capabilities, with strong growth prospects and a close fit to our strategy, becomes available.
“The strategic and financial rationale is compelling, as we continue to focus on areas of high priority defence and Intelligence spending, strengthening our world class multi-domain portfolio and enhancing our value compounding model of top line growth, margin expansion and high cash generation.
“We couldn’t be more pleased to have reached this agreement and we look forward to welcoming the employees of Ball Aerospace to BAE Systems as we work together to support our customers and create value for shareholders.”
Ball Aerospace is a Space and Defence technology leader
Ball Aerospace is a leading provider of spacecraft, mission payloads, optical systems, and antenna systems with decades of proven success underpinned by world class advanced technologies. They have trusted customer relationships among the Intelligence Community, US Department of Defense, and civilian space agencies. The business has been a pioneer in its markets for many decades and is organised into four main divisions: National Defense, Tactical Solutions, Civil Space, and Advanced Technology and Information Solutions.
The business operates across a broad base of customers and platforms. It is well positioned in highly attractive markets, military and civil space, C4ISR, and missile and munitions. The space market exposure extends across positions in defence, intelligence, and scientific missions. The Tactical Solutions business is well positioned to capture expected increases in demand for missiles and munitions.
The business is headquartered in Colorado, with more than 5,200 employees, of whom over 60% hold US security clearances.
Ball Aerospace has high revenue visibility and strong growth outlook
The business has a long and distinguished track record as a trusted partner and pioneering innovator. Over the last five years, Ball Aerospace has demonstrated its ability to convert its highly differentiated capabilities into a strong order backlog that has nearly doubled in size. It has invested around $1bn in world class facilities and capabilities which, combined with its highly skilled workforce, positions the business to deliver continued growth for years to come.
The proposed acquisition represents an exceptional opportunity to strengthen our portfolio with significant scale and high end technology capabilities. Ball Aerospace will add more than $2bn in annual revenues in the growing space domain, C4ISR and missile and munitions markets. The acquisition will provide our US business with a position in some of the fastest growing segments of the defence market and further increases our alignment to enduring customer priorities embodied in the US National Defense Strategy.
The growth outlook, anticipated at a c.10% CAGR over the next five years will build on our US business’ existing strong portfolio by expanding our footprint in space by an order of magnitude, offering a complementary set of customer relationships in the national security space community, and providing new access to civil space markets. In addition, Ball’s expertise in spacecraft, mission payloads, optical systems, sensors, scientific and tactical systems, analytical tools, and world class antenna systems support a broad set of products and differentiated technologies to address the growing space, C4ISR and missile and munitions markets.
Highly complementary fit with BAE Systems portfolio and culture
The Ball Aerospace portfolio is highly complementary and offers a number of adjacencies to our US-based business, with particular opportunities to advance a number of franchise positions across multiple Electronic Systems businesses. On completion we expect to report Ball Aerospace as part of that sector.
We believe this proposed acquisition provides compelling value and an exciting future, underpinned by our companies’ shared culture of innovation and strong, mission-driven values. Our mission of We Protect Those Who Protect Us® resonates with the Ball Aerospace team, and our adjacent and augmented positions across the defence, intelligence, and scientific markets will strengthen our outlook and benefit BAE Systems, the Ball Aerospace business, and customers alike.
Strong synergy potential
With complementary adjacencies, Ball Aerospace and our US business will have expanded opportunities to create, develop, and manufacture solutions to some of our customers’ most challenging problems. It will position us to capture anticipated future market growth driven by modernisation and recapitalisation requirements. The differentiated products and capabilities in Ball Aerospace will also offer further acceleration of our pursuit of next-generation solutions across a number of our US businesses like Electronic Warfare and C4ISR as they address future customer demand.
In addition to these top line opportunities, we expect there to be cost synergies c.$30m p.a run rate, with savings resulting from improved competitive positioning, procurement savings, and improved programme execution and management of bids to delivery, all contributing to margin expansion.
The synergistic nature of the combined portfolio supports growth in adjacent areas for both our US business and Ball Aerospace, and adds further resilience to our existing franchises in the face of evolving customer needs and emerging technologies.
The business is expected to achieve revenues of approximately $2.2bn and adjusted EBITDA of approximately $310m in 2023 and has strong growth potential with an expected revenue CAGR of c.10% over the next five years, with continued growth expected thereafter. EBIT margins are expected to be around 12% post cost synergies over the medium term. It is an acquisition that aligns with and enhances our value compounding model of good sustained organic growth, margin expansion and strong cash generation.
The net acquisition price of c.$4.8bn represents a transaction multiple of ~ 13x estimated 2024 EBITDA net of the tax benefit and net of run-rate cost synergies. The proposed acquisition is expected to be earnings accretive in the first full year including run-rate cost synergies, cashflow accretive in the first year excluding synergies and is expected to achieve a return on invested capital in excess of cost of capital within five years post completion.
The proposed acquisition will be funded by a combination of new external debt and existing cash resources.
Our capital allocation policy remains unchanged. We are committed to a strong investment grade credit rating and will continue the ongoing share buyback programmes including that announced with the 2023 H1 results.
Timetable and Regulatory
Completion is subject to customary regulatory approvals and conditions with a targeted completion date in the first half of 2024. The Agreement includes a termination fee of US$100 m payable by BAE Systems, Inc. to Ball Aerospace’s parent company in the event the transaction is terminated because certain required regulatory conditions are not met within the agreed timeframe.
Listing Rules Disclosures
The proposed acquisition constitutes a Class 2 transaction for the purposes of the UK Financial Conduct Authority’s Listing Rules. During the full year ended 31 December 2022, the Ball Aerospace business generated revenue of $1,977m and EBIT of $170m, and the business had gross assets of $1,152m.
15 Aug 23. US space startups’ latest struggles marked by layoffs, shake-ups. U.S. space startups have slashed workforces and restructured operations to survive amid an investment drought that has grounded once-lofty aspirations. While more established players like Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin spend billions on new, bigger rockets, rocket startup Astra Space (ASTR.O), satellite imagery firm Planet Labs (PL.N) and privately held engine maker Ursa Major recently laid off workers to cut costs.
Those struggles follow the April bankruptcy filing by satellite launch firm Virgin Orbit, which was owned by billionaire Richard Branson. Among the factors cited by the company were volatile capital markets and Branson’s reluctance to invest further.
“The focus for investors in this space is very different than what it was a couple years ago. It’s less about your potential,” Ursa Major CEO Joe Laurienti told Reuters. “It’s more about how can you build a healthy pipeline … and execute and deliver upon the efforts that you promised.”
While a steep drop in space investments spurred by a grim economic outlook in the past year appeared to stabilize in the most recent quarter, startups, many of which went public through blank-check companies to raise cash, are reeling from the downturn’s impact.
Quilty Analytics analyst Caleb Henry called it a tough capital market and said startups are working with what they have rather than banking on an influx of new funds.
“We’re seeing a bit of a decrease in investor risk appetite, and that is made worse in some cases by poor company performance, and then more broadly, things like high interest rates and general market uncertainty,” he added.
Astra disclosed last week it laid off a quarter of its workforce and diverted focus from its rocket launch program, once the core of its business. It is now focusing on its satellite propulsion unit, a more immediate source of revenue that it split off as a separate entity earlier this year.
“The spacecraft engine business is a much different business than launch,” Astra CEO Chris Kemp told Reuters. “Having it all mixed up with launch was making it harder for us to raise capital”
The company, which is delaying tests of its rocket to 2024 to focus on the satellite engine unit, reported on Monday it had $26m in cash and securities on hand. That was down from $201m the prior year.
With complex technologies and explosion-riddled tests that often spook investors, venture-backed and publicly traded rocket businesses have faced some of the steepest financial challenges. The industry also includes satellite imagery and analytics firms, seen as safer bets by investors due to more predictable demand.
But even those satellite firms have struggled.
Planet Labs, which went public in 2021, shed 10% of its roughly 1,000 employees earlier this month, citing the tough economy and the company’s overly fast expansion.
“Our business has scaled rapidly and continues to grow apace, but the expansion of projects has also increased cost and complexity, which slowed us down in some regards,” CEO Will Marshall told employees in an Aug. 1 note posted on the company’s website.
Quilty’s Henry said Planet Labs hired too aggressively. “That’s not an uncommon mistake for startups to make, especially once they become flush with cash.”
The financial headwinds faced by rocket startups have triggered pain elsewhere as well.
Denver-based Ursa Major, whose engines are designed for rockets and hypersonic crafts, laid off 27% of its workforce this summer. It shifted much of its focus to government defense programs as its commercial customers face tight capital markets, CEO Laurienti said.
“The hope is that shift really generated some confidence,” he added, “and started to show that we’re acknowledging this isn’t times of zero percent interest rates and venture capital flowing like crazy.” (Source: Reuters)
15 Aug 23. MTI boosted by defence spending and offers 6% yield.
The technology group is set for another year of growth, but is only priced on a cash-adjusted PE ratio of 7.5 and pays a chunky dividend, too.
• First-half pre-tax profit up 3 per cent to $2.1m on slightly lower revenue of $22.4m
• Strong performance from defence sector-related activities
• Second-half pipeline supports 11 per cent annual pre-tax profit growth
First-half results from Israel-based technology group MTI Wireless Edge (MWE:41p) highlight the benefits of diversification. For example, the group is benefiting from the increase in government defence budgets across the world following Russia’s invasion of Ukraine. Its antenna division trebled its operating profit to $0.28m (£0.22m) on revenue of $5.8m in the six-month period, buoyed by new orders from the military sector. Chief executive Moni Borovitz expects the momentum to be maintained in the second half.
The antenna business also provides 5G network backhaul antenna systems. Although this market was relatively soft in the first half, MTI has materially increased its sales prospects by developing an automatic beam steering antenna solution that adapts to any small movements caused by different climate conditions. It is now working with three tier-one radio manufacturers and two tier-two customers to prove out the system.
The group offers investors exposure to the themes of climate change and water scarcity, too. MTI’s wireless water management systems division reported 11 per cent higher first-half operating profit of $0.96mn on slightly lower revenue of $8.7mn, the improved level of profitability reflecting price increases and the benefit of costs being in shekels in a strong dollar environment. This year’s heatwave across continental Europe, and the need for countries to use water resources more efficiently, can only be positive for sales prospects. The business has started the third quarter well.
The strength in both divisions offset weakness in MTI’s Summit electronics division, which represents 40 international suppliers of radio frequency/microwave components. Divisional operating profit declined a third to $0.78mn on 5 per cent lower revenue of $8mn, mainly due to delays with two projects. However, one has since been completed and the other is well under way, so expect a much improved second-half performance. Also, defence-related activities represent the majority of the unit’s revenue base, so increased government military spending is underpinning a strong pipeline of orders and design wins.
Earnings guidance maintained
Importantly, the directors are maintaining full-year guidance of 11 per cent growth in pre-tax profit to $4.8m, which points to second-half pre-tax profit rising 18 per cent to $2.7m on 13 per cent higher revenue of $26.7m. On this basis, expect annual earnings per share (EPS) of 4.28p and a hike in the payout from 3¢ to 3.2¢ (2.5p). The dividend is rock solid, too. Net cash increased by 20 per cent to $6.25m in the first half, and analysts at Allenby Capital expect a further rise to $9.4m (8.35p) by the year-end, buoyed by strong cash generation.
So, with earnings guidance maintained, and the shares rated on a cash-adjusted forward price/earnings (PE) ratio of 7.5 and offering a 6.2 per cent prospective dividend yield, the share price drift since the 2022 annual results (‘A lowly rated technology group offering a prospective 5.5% yield’, 13 March 2023) is worth exploiting. Buy. (Source: Investors Chronicle)
15 Aug 23. Brazilian Drone Logistics Startup Speedbird Aero Raises $2m.
Brazilian drone logistics startup Speedbird Aero has successfully secured a $2m funding round led by MSW Capital. This investment aims to unlock the sky’s potential for faster drone delivery services.
Established in 2018 by Samuel Salomão and Manoel Coelho, Speedbird Aero has pioneered the development and operation of unmanned aerial systems (sUAS/Drones) for product deliveries. Notably, the company secured authorization from the Brazilian National Civil Aviation Agency (ANAC), enabling them to conduct aerial deliveries within the country.
Now functioning as a B2B enterprise, Speedbird Aero offers drone logistics services to companies seeking safe and seamless product deliveries. Some of its notable clients include food delivery service iFood and other companies including Natura, Claro, and Grupo Pardini which have already benefited from their innovative solutions.
In terms of impact, Speedbird Aero boasts an impressive track record. The company claims it has transported a substantial 10,000 kg of cargo through the air to approximately 3 m people and has established partnerships with over 10 major companies globally.
Operating across continents, Speedbird Aero is now gearing up to expand its operations into the United States, with ambitions to achieve a global reach by 2030.
The recent funding injection will fuel the ongoing development of their delivery drones and the expansion of their operations. To date, Speedbird Aero has successfully secured a total of $8.8m in funding across four rounds. (Source: UAS VISION/Techloy)
15 Aug 23. Israeli defence firm Elbit Q2 profit dips, revenue gains. Israeli defence electronics firm Elbit Systems (ESLT.TA), reported lower quarterly profit on Tuesday as higher expenses offset a rise in revenue.
One of Israel’s largest defence contractors, Elbit said it earned $1.57 per diluted share excluding one-time items in the second quarter, down from $1.73 per share a year earlier when it recorded a $27m capital gain from the sale of shares in a subsidiary and the sale of a building in Israel. Due to higher interest rates, financial expenses rose to $32.1m from $9.3m a year earlier. Elbit noted, though, its bottom line this year has benefited from the easing of supply chain and labour market pressures. Revenue rose to $1.5bn from $1.3bn, with aerospace revenue up 19%. Elbit’s board said the company would pay a dividend of 50 cents per share for the second quarter, the same as in the first quarter, to be paid on Oct 23. Its backlog of orders reached $16.1 bn. About 75% of that comes from orders outside Israel, and some 49% is due in 2023 and 2024. (Source: Google/Reuters)
14 Aug 23. Elbit Systems Ltd. (“Elbit Systems” or the “Company”) (NASDAQ: ESLT) (TASE: ESLT), the international high technology defense company, reported today its consolidated results for the second quarter ended June 30, 2023.
Backlog of orders at $16.1bn; Revenues of $1.5bn;
Non-GAAP net income of $70.2; GAAP net income of $62.4m;
Non-GAAP net EPS of $1.57; GAAP net EPS of $1.40
In this release, the Company is providing US-GAAP results as well as additional non-GAAP financial data, which are intended to provide investors a more comprehensive view of the Company’s business results and trends. For a description of the Company’s non-GAAP definitions see page 3 below, “Non-GAAP financial data”. Unless otherwise stated, all financial data presented is US-GAAP financial data.
Bezhalel (Butzi) Machlis, President and CEO of Elbit Systems, commented: “Double digit revenue growth in the second quarter reflects the conversion of the order backlog, increased capacity and sustained demand for our solutions from customers around the world. We have started to deliver the initial benefits of our operational improvement program with an increase in operating profitability in recent quarters, that also benefited from the easing of supply chain and labor market pressures, as anticipated. Our financial expenses in the first half mainly reflect increased interest rates. Elbit Systems’ portfolio of market leading technological solutions and growing global presence combined with an innovative culture and the resilience demonstrated by our employees in recent years should support the long term outlook.”
Second quarter 2023 results:
Revenues in the second quarter of 2023 were $1,453.9m, as compared to $1,303.4m in the second quarter of 2022.
Aerospace revenues increased by 19%, to $487.0m in the second quarter of 2023 from $408.9m in the second quarter of 2022, mainly due to growth in Training & Simulation sales in Europe.
C4I and Cyber revenues increased by 1%, to $168.7m in the second quarter of 2023 from $167.3m in the second quarter of 2022.
ISTAR and EW revenues increased by 21%, to $292.7m in the second quarter of 2023 from $241.5m in the second quarter of 2022, mainly due to European Electronic Warfare sales.
Land revenues increased by 3%, to $294.1m in the second quarter of 2023 from $284.9m in the second quarter of 2022, mainly due to armored vehicle upgrades and ammunition sales.
Elbit Systems of America revenues increased by 7% to $355.3m in the second quarter of 2023 compared to $330.6m in the second quarter of 2022 due to growth in night vision sales.
For distribution of revenues by segments and geographic regions see the tables on page 11.
Non-GAAP(*) gross profit amounted to $378.8m (26.1% of revenues) in the second quarter of 2023, as compared to $345.9m (26.5% of revenues) in the second quarter of 2022. GAAP gross profit in the second quarter of 2023 was $372.2m (25.6% of revenues), as compared to $339.7m (26.1% of revenues) in the second quarter of 2022.
Research and development expenses, net were $93.4m (6.4% of revenues) in the second quarter of 2023, as compared to $96.4m (7.4% of revenues) in the second quarter of 2022.
Marketing and selling expenses, net were $101.7m (7.0% of revenues) in the second quarter of 2023, as compared to $82.8m (6.4% of revenues) in the second quarter of 2022.
General and administrative expenses, net were $75.4m (5.2% of revenues) in the second quarter of 2023, as compared to $72.7m (5.6% of revenues) in the second quarter of 2022.
Non-GAAP(*) operating income was $112.2m (7.7% of revenues) in the second quarter of 2023, as compared to $103.3m (7.9% of revenues) in the second quarter of 2022. GAAP operating income in the second quarter of 2023 was $101.6m (7.0% of revenues), as compared to $115.1m (8.8% of revenues) in the second quarter of 2022.
Financial expenses, net were $32.1m in the second quarter of 2023, as compared to $9.3m in the second quarter of 2022. The financial expenses in 2023 were higher as a result of the significant increase in interest rates.
Taxes on income were $9.2m in the second quarter of 2023, as compared to $12.8m in the second quarter of 2022.
Non-GAAP(*) net income attributable to the Company’s shareholders in the second quarter of 2023 was $70.2m (4.8% of revenues), as compared to $76.9m (5.9% of revenues) in the second quarter of 2022. GAAP net income attributable to the Company’s shareholders in the second quarter of 2023 was $62.4m (4.3% of revenues), as compared to $81.2m (6.2% of revenues) in the second quarter of 2022. Net income in the second quarter of 2022 included capital gains from sale of our shares in a subsidiary in Israel and sale of a building in Israel.
Non-GAAP(*) diluted net earnings per share attributable to the Company’s shareholders were $1.57 for the second quarter of 2023, as compared to $1.73 for the second quarter of 2022. GAAP diluted earnings per share attributable to the Company’s shareholders in the second quarter of 2023 were $1.40, as compared to $1.82 in the second quarter of 2022.
The Company’s backlog of orders as of June 30, 2023 totaled $16.1bn. Approximately 75% of the current backlog is attributable to orders from outside Israel. Approximately 49% of the backlog is scheduled to be performed during the remainder of 2023 and 2024.
Cash flows used in operating activities in the six months ended June 30, 2023 were $210.7m, as compared to $133.5m in the six months ended June 30, 2022. The cash flows in the first half of 2023 was affected by the increase in inventories and trade receivables.
14 Aug 23. Embraer optimistic about quarters ahead as Q2 profit blows past estimates. Brazilian planemaker Embraer (EMBR3.SA) on Monday shot past market estimates for second-quarter results, with its chief executive voicing optimism about upcoming quarters for the company.
Francisco Gomes Neto said in an interview there is a “good chance” Embraer will deliver 80 or more commercial aircraft next year, up from a higher-end forecast of 70 in 2023, and return to a level of 100 or more by 2025, or 2026.
The world’s third-largest plane manufacturer – after Airbus (AIR.PA) and Boeing (BA.N) – last topped 100 deliveries in 2017, before hitting snags in an attempted deal with Boeing and then COVID-19-related hold-ups.
“Despite the supply chain challenges, we are very optimistic about this year after a good Q2,” Gomes Neto said. “We expect Q3 to be good as well and an even better Q4, with new deals in the commercial and defense units expected in the second half.”
The Brazilian company had previously disclosed deliveries of 47 aircraft in the quarter, seen as a positive sign by analysts who believe Embraer will meet its target this year of delivering up to 200 jets overall – both commercial and business.
“We’re working hard so next year we can better spread out production and deliveries throughout the year, which will further improve the company’s performance,” Gomes Neto added.
He said the company has already signed a deal with an undisclosed client that will increase its backlog by $700m in the third quarter.
Shares in Embraer rose as much as 5.7% immediately after the earnings report before paring gains in a volatile session. Brazil’s benchmark stock index Bovespa (.BVSP) dropped more than 1%.
The planemaker reported a 25% increase in second quarter adjusted net profit to $57.9m, more than double the $24.3m forecast by analysts polled by Refinitiv.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) came in at $148.9m, up 20% from the previous year and above the market consensus of $116.2m.
JPMorgan analysts highlighted its EBITDA margin of 11.5%, up 10 percentage points quarter-on-quarter, as particularly strong.
Embraer maintained its outlook for the year, with net revenue forecast to rise by as much as 27% to between $5.2bn and $5.7bn.
Embraer’s quarterly figures and backlog indicate “strong results for the year,” analysts at BTG Pactual said. (Source: Reuters)
14 Aug 23. Embraer (B3: EMBR3, NYSE: ERJ) Results. The Company’s operating and financial information is presented, except where otherwise stated, on a consolidated basis in United States dollars (US$) in accordance with IFRS. The financial data presented in this document as of and for the quarters ended June 30, 2023 (2Q23), June 30, 2022 (2Q22), and March 31, 2023 (1Q23), are derived from the unaudited financial statements, except annual financial data and where otherwise stated
REVENUE AND GROSS MARGIN
Consolidated revenue of US$ 1,292m in 2Q23 represented an increase of 27% YoY due to higher volumes in Commercial and Executive aviation with strong growth of 57.4% and 41.8% respectively
• Commercial Aviation reported revenue growth of 57% YoY to US$ 471.9m due to higher number of deliveries. Reported gross margin of 12.9% versus 13.2% in 2Q22 shows a small decrease due to one-time effects.
• Executive Aviation revenues were US$ 378.0m, 42% higher than 2Q22 with an increase in volumes and deliveries mix. Gross Margin in 2Q23 was 19.8% compared to 22.1% YoY due to one-time effects last year
• Defense & Security revenue of US$ 82.4m, 28% lower YoY due to delay in revenue recognition in the 1H23. Reported gross margin of -1.5% versus 28.0% in 2Q22 due to lower revenue and different mix, partially offset by other expenses.
• Services & Support reported revenues of US$ 339.7 m, representing a YoY growth of 6%. Reported gross margin of 24.4% lower than 31.8% reported in 2Q22 due to one-time effects and different mix of services in the quarter.
Excluding the above special items, 2Q23 Adjusted EBIT was US$ 99.9m and Adjusted EBIT margin was 7.7%. Strong recovery of Adjusted EBIT in 2Q23 compared to 1Q23 was mainly driven by higher volumes from Commercial and Executive Aviation. On a YoY basis, Adjusted EBIT decrease is mainly due to difference in revenue mix and Defense margins compared to 2Q22.
NET INCOME (LOSS)
Net income (loss) attributable to Embraer shareholders and income (loss) per ADS for 2Q23 were US$ (18.8)m and US$ (0.1024) per share, respectively, compared to US$ (146.4)m in net loss attributable to Embraer shareholders and US$ (0.7972) in income per ADS in 2Q22. Excluding extraordinary effects, adjusted net income was US$ 58m compared to US$ 46m in 2Q22 representing an increase of 25% YoY.
¹ Adjusted Net Income (loss) is a non-GAAP measure, calculated by adding Net Income attributable to Embraer Shareholders plus Deferred income tax and social contribution for the period, in addition to adjusting for non-recurring items. Under IFRS for Embraer’s Income Tax benefits (expenses) the Company is required to record taxes resulting from unrealized gains or losses due to the impact of changes in the Real to US Dollar exchange rate over non-monetary assets (primarily Inventory, Intangibles, and PP&E). The taxes resulting from gains or losses over non-monetary assets are considered deferred taxes and are presented in the consolidated Cash Flow statement, under Deferred income tax and social contribution. Adjusted Net Income (loss) also excludes the net after-tax special items
DEBT & LIABILITY MANAGEMENT
Embraer ended the quarter with a net debt position of US$ 1,459.4m (without EVE), compared to US$ 1,528.7m YoY and US$ 1,432.1m QoQ.
The average loan maturity of 2Q23 was extended to 3.5 years. The cost of Dollar-denominated loans was 5.74% p.a., while the cost of Brazilian Real denominated loans was 10.04% p.a. in 2Q23.
In the last week of July, we reprofiled our debt and extended maturities until 2030 with a New Bond Issuance of US$ 750m for 7 years and 7.0% coupon.
FREE CASH FLOW
Adjusted free cash flow for the second quarter 2023 was US$ (10.7)m, with no substantial increase in working capital usage compared to 1Q23. Although we still carrying higher inventories due to larger deliveries in the second half, cash consumption was stable QoQ. CAPEX
Net additions to total PP&E for 2Q23 were US$ 35.5m, versus US$ 31.6m in net additions reported in 2Q22. Of the total 2Q23 additions to PP&E, CAPEX amounted to US$ 24.7m, and additions of pool program spare parts represented US$ 23.9m of the additions, partially offset by US$ (13.1) m of proceeds from the sale of PP&E. The increase in PP&E in 2Q23 versus 2Q22 is related to expansion in services training and maintenance.
14 Aug 23. Momentus Inc. Announces Second Quarter 2023 Financial Results. Momentus Inc. (NASDAQ: MNTS) (“Momentus” or the “Company”), a U.S. commercial space company that offers satellite buses, transportation, and other in-space infrastructure services, today announced its financial results for the second quarter of 2023.
“The second quarter marks our first million-dollar quarter with the successful deployment of commercial customers from our Vigoride-6 mission contributing to the recognition of $1.7m in revenue,” said Momentus Chief Executive Officer John Rood. “We continue to build interest with customers, particularly in the Department of Defense, and we recently signed a contract with the Space Development Agency to tailor our space vehicles for their future use.”
“The flexibility, payload capacity, and power available on the Vigoride Orbital Service Vehicle (OSV) make it well-positioned to support a range of national security missions like space situational awareness, surveillance, reconnaissance, and other priorities,” said Rood. “We’re also proud to continue to build on our flight heritage with our M-1000 satellite bus which is based on the Vigoride OSV and draws on its flight heritage. The M-1000 bus offers significant advantages to commercial and government customers such as its high power – up to 3 kW of peak power – large payload capacity, flexible configuration, speed from requirements to delivery on-orbit, and low cost. Momentus possesses the capability to manufacture satellite buses like the M-1000 at a rapid and scalable pace.”
“Our goal remains to be a market leader in satellite buses and in-space transportation and infrastructure services for U.S. government and commercial customers, and we’re excited by the progress we’re seeing,” said Rood.
Second Quarter 2023 Business Highlights:
• In Q2 2023, Momentus grew total revenue by 3,310% year over year to $1.7m. This exceeds revenue growth the Company has experienced in any previous quarters and is a key milestone for the business.
• The Company has been working to raise additional capital while pursuing and evaluating strategic alternatives. To that end, the Company engaged Deutsche Bank as its financial advisor.
• Momentus has signed a contract with FOSSA Systems to provide hosted payload services starting in 2024. Momentus provided orbital delivery services to FOSSA on the inaugural mission of Vigoride in 2022 and most recently provided mission management and integration support for the launch of the FOSSA FEROX-1 satellite in June 2023. We’re pleased that FOSSA has selected Momentus again to support its growing needs and the innovation they are bringing to the market. They are a valued repeat customer.
• In Q2 2023, Momentus deployed all customer payloads from Vigoride-6 that launched in April 2023. This includes the REVELA payload for ARCA Dynamics, the VIREO CubeSat for C3S LLC., the DISCO-1 CubeSat for Aarhus University, and the IRIS-C payload for an Asian customer booked through ISILAUNCH.
• During the Vigoride-6 mission, Momentus also deployed two CubeSats into Low-Earth Orbit as part of the NASA LLITED (Low-Latitude Ionosphere/Thermosphere Enhancements in Density) mission. These two CubeSats were released from the Vigoride OSV and NASA has confirmed the two CubeSats are functional, and the team will be able to operate the science instruments onboard.
• To date, Momentus has placed three Vigoride Orbital Service Vehicles in Low-Earth Orbit, deployed 15 customer satellites, and is providing ongoing hosted payload support for Caltech’s Solar Power Project Demonstrator mission that recently demonstrated its ability to wirelessly transmit power in space and to beam detectable power to Earth.
• In addition to the Vigoride Orbital Service Vehicle, Momentus is now also offering its M-1000 satellite bus. With a growing demand for satellite bus services, Momentus is positioned to advance its hardware and flight-proven technology for this market. The M-1000 bus is a flexible option to meet a variety of mission requirements. Innovations to improve sensor capability, maneuverability, increased power, and overall lower costs are integrated into the product. Momentus possesses the capability to manufacture satellite buses like the M-1000 at a rapid and scalable pace.
• Momentus signed a contract for a Small Business Innovation Research award from the Space Development Agency. The first contract action is valued at $746,073. We expect it will be followed by a contract modification to add an additional $1,196,404 at a later date. The scope of work is focused on tailoring the underlying platform used for the Vigoride Orbital Service Vehicle and M-1000 satellite bus to meet SDA mission requirements for future missions.
• Momentus submitted a bid to the SDA for the Tranche 2 Transport Layer Alpha program to build 50 satellites. Under this proposal to the SDA, Momentus is the prime contractor with a strong team of traditional and non-traditional peers.
• Momentus submitted a proposal to the Defense Innovation Unit (DIU) for novel approaches to operationally responsive space. This project requires precise point-to-point delivery of cargo in a cost-effective manner at scale, a need for which the Company’s capabilities and technology are well-suited.
• Momentus’ next mission is planning to deliver customers to orbit during the SpaceX Transporter-9 mission, which is targeted to launch no earlier than November 2023. The Company has space reserved on every SpaceX Transporter mission through the end of 2024 and is actively booking customers. (Source: BUSINESS WIRE)
14 Aug 23. Rouble hits 16-month low as military spending rises and exports fall. The rouble has fallen to a 16-month low against the dollar as a surge in Russian military spending and a collapse in export revenues add pressure to a currency suffering under western sanctions and an escalation of capital outflows. Russia’s currency has lost about 25 per cent of its value this year and traded below 99 roubles a dollar on Friday as the impact of the war with Ukraine bites. The decline has more than offset the rouble’s rise last year when Russia’s initial invasion of Ukraine was followed by a sharp increase in oil and gas prices. The drop has accelerated in recent weeks, raising economic pressure on Moscow after western sanctions limited capital inflows and European countries weaned themselves off Russia’s energy supplies, reducing the revenues it receives from oil sales. The domestic economy has been boosted by government spending on defence and social commitments such as the “coffin payments” received by families of soldiers who have died on the battlefield in Ukraine. But this has also raised the budget deficit, pushing the currency lower. The surge in spending has driven a 20 per cent increase in annual imports in the first half of this year. “Very little currency comes into the country, so a currency famine has formed,” said Vladimir Milov, a former deputy energy minister who now opposes the Kremlin from exile. “Imports have now recovered to prewar levels, only now we import all consumer goods and manufactured goods from China, Turkey, Central Asia and the Emirates, and not from the West. You still have to pay for it in some currency but no one wants roubles.” (Source: FT.com)
11 Aug 23. Advent Technologies Reports Q2 2023 Results.
• Agreement with BASF to establish end-to-end supply chain for hydrogen fuel cell systems in Europe.
• Signed MoU with Safran Power Units to advance HT-PEM fuel cell technology for the aerospace sector.
• Secured $1.1m contract to supply HT-PEM MEAs for fuel cell-powered trucks in Asia.
• Working actively with the Greek State for the timely signing of Advent’s Green HiPo project, following official ratification from the European Commission under the Important Projects of Common European Interest (“IPCEI”) Hy2Tech Program.
Advent Technologies Holdings, Inc. (NASDAQ: ADN) (“Advent” or the “Company”), an innovation-driven leader in the fuel cell and hydrogen technology space, today announced consolidated financial results for the three months ended June 30, 2023. All amounts are in U.S. dollars unless otherwise noted and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”).
Q2 2023 Financial Highlights
(All comparisons are to Q2 2022, unless otherwise stated)
• Revenue of $1.1m and income from grants of $0.7m, for a total of $1.8m.
• Operating expenses of $11.2m, a year-over-year increase of $0.6m, primarily related to an increase in research and development costs, as well as expenses related to our new Hood Park facility in Charlestown, MA.
• Recognized $9.8m of asset impairment charges, mostly related to the assessment of goodwill and other intangible assets from the Company’s acquisitions in 2021.
• Net loss in Q2 of $(21.8)m or $(0.41) per share.
• Unrestricted cash reserves were $10.1m as of June 30, 2023, a decrease of $9.5m from March 31, 2023, which includes $3.4m of cash raised from the Company’s equity line of credit with Lincoln Park Capital, $1.9 m paid to complete the acquisition of the fuel cell systems business in Denmark, Germany and the Philippines, $0.8m paid to acquire land in Kozani, Greece for the Green HiPo project, and $0.4m paid for the build-out of the Hood Park facility.
“The consolidation of our operations continued apace during Q2 2023, which has increased focus towards securing commercial contracts across our core energy markets of stationary and mobility. This has also resulted in our cash burn becoming gradually reduced, and as various non-core fixed costs decline, we will continue to drive efficiencies wherever possible,” said Dr. Vasilis Gregoriou, Chairman and CEO of Advent Technologies. “OEMs are increasingly showing interest in our HT-PEM technology due to its functional applicability and adaptability with a range of non-fossil fuel sources. We are confident that our technology can provide the means for our core markets to move to an environmentally cleaner and large-scale sustainable model. We shall remain focused on successfully developing innovative fuel cell systems and expanding our collaboration agreements with world-class partners.”
BASF and Advent Sign Agreement to Establish End-to-End Supply Chain for Hydrogen Fuel Cell Systems in Europe: BASF Environmental Catalyst and Metal Solutions, a global leader in precious metals and catalysis, and Advent concluded the terms of a new agreement to join efforts in building a full-loop component supply chain for fuel cells.
For the past 20 years, BASF Environmental Catalyst and Metal Solutions has been a leader in membrane and membrane electrode assembly (“MEA”) technology for high temperature proton exchange membrane (“HT-PEM”) fuel cells with a strong foundation in precious metal services and catalysis. Advent is a significant manufacturer of HT-PEM fuel cell systems, targeting emerging markets in the field of sustainable and decentralized energy such as stationary power that can replace diesel generators, maritime power from e-methanol fuel cells, and heavy-duty mobility.
HT-PEM fuel cells operate at 120°C to 180°C, offer a broad operating window and can tolerate impurities in the hydrogen fuel gas. The fuel cells also enable simplified cooling and do not require humidification. Advent offers competitive fuel cell systems for stationary and portable applications based on methanol and on-site reforming. Looking ahead, HT-PEM fuel cells will also become available for heavy-duty mobility and maritime power.
The scope of the agreement includes BASF’s role in scaling-up MEA production at Advent’s planned state-of-the-art manufacturing facility in Western Macedonia, Greece, while offering Advent its full portfolio of products and services to enable circularity in key materials. Both companies will cooperate on BASF’s latest membrane development, Celtec®-Z, and the new Ion Pair™ MEA by Advent, aiming for improved performance, lifetime and cost competitiveness.
Advent Technologies and Safran Power Units Sign MoU to Advance HT-PEM Fuel Cell Technology for the Aerospace Sector: Advent signed a memorandum of understanding (“MoU”) with Safran Power Units, a leader in auxiliary power systems and turbojet engines. Leveraging Advent’s proprietary Ion Pair™ MEA technology, and Safran’s aerospace knowledge and capabilities, this new collaboration seeks to advance the development of next-generation HT-PEM fuel cell technology, specifically for the aerospace sector.
HT-PEM enables more efficient heat management versus low temperature-PEM (“LT-PEM”). HT-PEM is more adapted for applications requiring high amounts of power combined with strong integration constraints such as aviation. HT-PEM is also more robust and can withstand tougher operating conditions, such as extreme temperatures and pollution, versus LT-PEM.
The collaboration is further supported by a strong research consortium including Safran Tech (the Research & Technology Center of Safran Group), the French Alternative Energies and Atomic Energy Commission, Fraunhofer Institute, the French National Centre for Scientific Research, the University of Strasbourg, and the IMDEA Energy Institute. Led by Safran Power Units and with the support of Advent, the consortium has secured a grant for the Clean Hydrogen Partnership TC3-08 NIMPHEA Project. Running from 2023 to 2026, the project is funded by Horizon Europe. NIMPHEA Project’s main objective is to develop an aircraft-compatible, next-generation HT-PEM MEA. This involves optimizing and enhancing various components such as the catalyst layer, membrane, and gas diffusion layer. Advent’s Ion Pair™ MEA technology serves as the foundation for these advancements.
As part of the MoU, Advent and Safran Power Units are exploring a joint development agreement for the advancement of HT-PEM fuel cells in aviation and for enhancing Advent’s supply capability.
Advent Technologies Secures $1.1m Contract to Supply its HT-PEM MEAs for Fuel Cell-Powered Trucks in Asia: Advent announced a contract with a prominent fuel cell manufacturer specializing in truck applications in the East Asian market. Under this contract, Advent will supply MEAs to support the development of advanced fuel cell solutions for trucks. The contract, which was signed in the second quarter of 2023 with a combined value of $1.1m, comes after a highly successful testing phase of Advent’s proprietary MEA technology conducted by its customer. Advent will deliver HT-PEM MEAs with a projected continuation of deliveries aligned to the customer’s specified timeframe.
The use of Advent’s MEA technology in fuel cell-powered trucks is a critical and substantial enhancement to EV technology, effectively tackling the challenges associated with charging infrastructure and the limited range of pure EVs. MEAs are the critical component of fuel cell systems and have a pivotal role in determining the overall performance, durability, efficiency, weight, and cost-effectiveness of the electrochemical products they empower.
Advent’s electrochemistry components business includes electrodes, membranes, and MEAs. These components are critical for fuel cells, electrolysers, and for long-duration energy storage such as flow batteries.
European Electrolyser Summit: Advent participated in the 2nd European Electrolyser Summit held in Brussels. Dr. Vasilis Gregoriou, Advent’s Chairman and CEO, was part of a group of 30 CEOs representing the European electrolyser manufacturing sector in a meeting with European Commissioner Thierry Breton. The primary purpose of the meeting was to discuss and address the objectives outlined in the Joint Declaration of the May 2022 EU Electrolyser Summit. The meeting, jointly organized by the European Commission and Hydrogen Europe as part of the Electrolyser Partnership, brought together approximately 44 companies actively involved in the European electrolyser supply chain.
Following the 2nd European Electrolyser Summit, the industry remains steadfast in its commitment of achieving the ambitious goals set out in the REPowerEU communication. The objective is to accomplish 10 m tons (“Mt”) of domestic hydrogen production and import 10Mt of hydrogen by 2030. As part of this commitment, the industry is planning to significantly increase electrolyser production in the EU, aiming to ramp-up capacity by a factor of seven within three years. This will involve scaling-up from the current 3GW production capacity to approximately 21GW by 2025.
In a recently published document, the partnership members and the European Commission provided an update on the progress that has been made one year after the signing of the Joint Declaration. The document highlights the industry’s continued efforts to expand its European footprint as the regulatory framework moves closer to completion. Notable developments include the Renewable Energy Directive, Delegated Acts on Additionality, and the Hydrogen Bank.
Update on Green HiPo Project: On May 26, 2023, Advent provided an update on the implementation of the Green HiPo project under the framework of IPCEI Hy2Tech. This update highlighted the recent milestones achieved in the project as described below, emphasizing the collective dedication of the entire Advent team towards decarbonization, and the transformation of the clean energy landscape in Greece and Europe.
1. Acquisition of Land: Advent successfully acquired the ownership rights to a prime parcel of real estate located in Kozani, Greece, where its planned state-of-the-art facility for its Green HiPo IPCEI project is expected to be located. This land acquisition underscores Advent’s unwavering dedication to establishing a robust infrastructure that will effectively and strategically support the objectives of the Green HiPo IPCEI project. Advent has also set-up a coordination and planning office in the center of Kozani which will serve as the operational hub for the Green HiPo IPCEI project.
2. Recruitment Process and Hiring of Key Professionals: Advent has initiated the process of identifying and hiring key professionals – scientists, engineers, and managers who will play integral roles at the new state-of-the-art facility in Kozani. These individuals will drive critical functions such as research and development, first industrial deployment, and supply chain management. Their expertise will be instrumental in the development, design, and manufacture of innovative fuel cell systems and electrolyser systems. Advent’s careful selection process will ensure that top-tier talent is recruited to support the successful execution of the Green HiPo IPCEI project, thereby ensuring the project’s success and innovation.
On August 4, 2023, Advent was informed by the Ministry of National Economy and Finance that the Greek State is currently reviewing the financing for IPCEI Hy2Tech. Accordingly, and as a pre-requisite for unlocking the State Aid funding for Green HiPo, the Greek State is examining and planning ways to implement actions and to strengthen initiatives that will contribute to the transition of the productive and growth model of the Greek economy towards climate neutrality. Parameters for the planning of such actions include implementing projects at specific times, the viability of the completed proposed plans, as well as compliance with regulatory obligations and guidelines regarding the management of European funds.
Dr. Gregoriou concluded, “Advent continues to make significant progress in both the stationary and mobility power sectors. We will continue to consolidate our business with a view to maximizing efficiency and effectiveness throughout our global operations, and to focus on core markets and significant projects. The Greek State is progressing with its review of the Green HiPo project, and we await the finalization of all necessary procedures. I am confident in the potential of Advent and our technology, and I am very optimistic that we will continue to increase market share as economies embrace clean energy and decarbonization.” (Source: BUSINESS WIRE)
11 Aug 23. Tel-Instrument Electronics Corp. Reports Financial Results For First Quarter FY 2024. Tel-Instrument Electronics Corp. (“Tel-Instrument,” “TIC,” or the “Company”) (OTCQB: TIKK), a leading designer and manufacturer of avionics test and measurement solutions, today reported a net income of $295K ($0.07 per basic and $0.06 per diluted share) on revenues of $2.9m for the first quarter of 2024 fiscal year, ended June 30, 2023.
Notes On First Quarter:
• Revenues for the first quarter were $2.9m, a 27% increase from $2.3m in the year-ago quarter.
• The gross margin percentage increased to 45% versus 37% in the year-ago quarter.
• Operating expenses decreased by $205K, a 19% decline versus the year ago level as a result of funded engineering projects.
• Operating income was $420K as compared to an operating loss of $244K in the year ago quarter.
• Net income was $295K or $0.07 per share, compared to net loss of $233K or $(0.10) per share in the year-ago quarter.
• The Company recorded $706K in positive cash-flow from operating activities for the quarter with cash balances improving to $6.5m.
• Backlog decreased to $5.3m at the end of the first quarter, a $1.2m decrease from the prior quarter-end.
Additionally, the Kansas Appellate Court denied our appeal motion on July 21, 2023. We continue to explore available options for next steps, including filing a further appeal.
Mr. Jeffrey O’Hara, Tel-Instrument’s President and CEO commented: “We were extremely disappointed with the decision of the Kansas Appellate Court and are currently evaluating whether to pay the full judgment amount or appeal the decision to the Kansas Supreme Court. We were pleased with the revenue growth and profitability for the first quarter, although parts availability and lead times continue to hamper production. We are predicting solid growth for the remainder of this fiscal year. Notable orders received in the second quarter include a $875k TS-4530A software upgrade project for the U.S. Army and a $1.7m order for Germany for T-4530i units. This T-4530i order has been received by our European distributor and we are waiting for them to issue the purchase order to TIC. We have also submitted a quote for 111 MADL test sets totaling $1.5m and we expect a contract award this year. Additionally, TIC has $2 m of remaining funding for the CRAFT ECP. The Test Readiness Review (“TRR”) will take place late in the Spring of 2024 and this is expected to generate an additional $1.2m of revenues. The production contract should commence later next year and is expected to generate annual revenues of up to $5m per year. The SDR/OMNI continues to receive positive reviews from our customers, and we expect larger volume orders to start this Fall.
From a cash perspective, we have sufficient liquidity to pay the Aeroflex judgment amount in full if we elect not to appeal. TIC’s Board has also indicated its willingness to invest additional capital if needed to support our growth plans. (Source: BUSINESS WIRE)
11 Aug 23. Hindustan Aeronautics first-quarter profit rises 31% on higher revenue. Hindustan Aeronautics Limited (HAL) (HIAE.NS) posted a 31% rise in first-quarter profit on Friday as fullfillment of orders helped boost aerospace and defense equipment maker’s revenue. The state-owned company reported a net profit of 8.14bn rupees ($98.28 m) for the quarter through June 30, up from 6.20 bn rupees, a year earlier.
Revenue from operations rose 8.1% to 39.15 bn rupees in the quarter, outpacing a 7.8% rise in total expenses, which were led by surging employee benefit costs. Its other income, which includes interest and dividends, more than doubled to 4.1bn rupees compared with a year-ago quarter. HAL, the supplier of aircraft to the Indian military, also supplies to Airbus (AIR.PA) and Boeing (BA.N).
The company in May said it is targeting revenue growth of 10% in fiscal 2024 as it bets on finalising orders worth at least $480bn in coming months.
“The company had a good start for FY24. The results are in line with the company’s guidance as well as our estimates,” said Harshit Kapadia, research analyst at rating agency Elara Securities.
The Bengaluru-based company also benefited from the rising indigenisation of vessels as a part of the government’s “make in India” push.
HAL’s shares closed almost flat after the results, taking its year-to-date gains to about 49%. ($1 = 82.8250 Indian rupees) (Source: Google/Reuters)
11 Aug 23. Archer Accelerates Path To Market.
• Secures $215m Investment From Stellantis, Boeing, United Airlines, Ark Midnight; Archer On Track To Complete First Ever eVTOL Aircraft Customer Delivery
–Secures $215m Investment From Stellantis, Boeing, United Airlines, Ark Invest And Others; FAA Issues Archer Certificate To Begin Flying Midnight; Archer On Track To Complete First Ever eVTOL Aircraft Customer Delivery
–Archer secures $215m investment, which includes Stellantis, Boeing, United Airlines, and ARK Investment Management LLC (“ARK Invest”), increasing Archer’s total funding to date to over $1.1bn, bolstering Archer’s path to FAA certification and commercial operations in 2025
–Midnight receives FAA Special Airworthiness Certificate, expected to begin flight test and become the first eVTOL aircraft to be delivered to a customer as part of Archer’s contracts with the Department of Defense (DoD)
–Long-term strategic partner, Stellantis, leads investment round by accelerating investment under existing strategic funding agreement
–Boeing, Archer, and Wisk reach agreement to enter into autonomous flight collaboration and settle litigation
Archer Aviation Inc. (NYSE: ACHR), a leader in electric vertical takeoff and landing (eVTOL) aircraft, today announced operating and financial results for the second quarter ended June 30, 2023. In tandem with earnings, Archer made a series of announcements that reinforce its path to FAA certification and commercial operations in 2025. Archer has landed a $215 m equity investment from industry leaders Stellantis, Boeing and United Airlines, as well as other financial institutions, including ARK Invest, increasing the company’s total funding to over $1.1 bn to date, received FAA approval to begin flying its Midnight eVTOL aircraft, and reached an agreement with Boeing and Wisk to enter into an autonomous flight collaboration and settle litigation between the companies. Additionally, Archer announced that it is on track to complete what it believes will be the first ever eVTOL aircraft delivery to a customer as part of its recently announced contracts with the Department of Defense (DoD). These announcements come on the heels of the FAA Administrator leaving to join Archer and the DoD awarding Archer the largest total contract value of any eVTOL company. (Source: ASD Network)
SPX CommTech, part of SPX Technologies Inc, innovates specialised technologies within the Radio Frequency (RF) spectrum to ensure a smarter, more secure future for all. Formed by TCI and ECS, SPX CommTech’s Battlespace portfolio enables defence and security teams to detect, defeat and exploit RF signals to enhance communications intelligence (COMINT) and counter unmanned aerial systems (Counter-UAS). Additionally, its Tactical Data Link portfolio allows intelligence gathering agencies, special forces, emergency response, and security teams to securely and reliably transfer video and data between enabled-aircraft and ground teams over long distances for airborne Intelligence, Surveillance, Reconnaissance (ISR). For more information visit www.tcibr.com and www.enterprisecontrol.co.uk