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09 Nov 23. Italy’s Leonardo posts higher Q3 core earnings and orders, confirms guidance. Italy’s state-controlled defence and aerospace group Leonardo (LDOF.MI) on Thursday posted rising third-quarter core earnings, and new orders, saying all its business areas were performing well and confirming its full-year guidance.

Earnings before interest, taxes, and amortization (EBITA) stood at 214m euros ($229.15m) in July-September, compared to 201 m euros in the same period of 2022, a statement said.

Over the same period, revenues rose to 3.375bn euros from 3.341bn, while new orders stood at 4.584 bn euros, against 4.4bn a year earlier.

Net debt was just over 3.8 bn euros as of Sept. 30, while free operating cash flow (FOCF) improved “significantly” during January-September at -604 m euros, compared to -894m euros in Jan-Sept. 2022.

“All the economic and financial indicators are performing well, with a good increase in profitability. The expected reduction in intra-year cash absorption also had a positive

effect on Group Net Debt reduction”, CEO Roberto Cingolani said.

Leonardo’s confirmed guidance for 2023 includes a forecast for new orders at around 17bn euros, revenues in the 15-15.6-bn-euro range, EBITA at 1.26-1.31bn euros and group net debt of about 2.6bn euros.

The company also confirmed it would unveil a new industrial plan in March 2024, which Cingolani previously said would focus heavily on cybersecurity and space as the two main pillars of innovation.

Like other defence groups, Leonardo has benefited from rising military spending in the wake of Russia’s invasion of Ukraine, and it is involved in the GCAP next-generation fighter jet programme undertaken by Italy, Britain and Japan.

The company’s Milan-listed shares have risen by almost 77% since January, and have almost doubled in value year-on-year. On Thursday, they closed up 0.18% at 14.205 euros. ($1 = 0.9339 euros) (Source: Google/Reuters)

 

09 Nov 23.  Kopin Corporation Reports Financial Results for the Third Quarter 2023. Kopin Corporation (Nasdaq: KOPN), a leading provider of application-specific optical solutions for defense, enterprise, industrial, and consumer products, today reported financial results for the third quarter ended September 30, 2023.

“The third quarter of 2023 was marked by positive momentum with follow-on orders and strong customer engagement and satisfaction,” said Michael Murray, Kopin’s Chief Executive Officer. “Our performance and outlook were supported by our fourth consecutive quarter of positive book to bill with a ratio of approximately two to one. During the third quarter, we achieved a new record level for orders received within the year since the divesture of the HBT business ten years ago.

“Driving our strong book to bill ratio were two significant follow-on orders from strategic customers during the quarter, including a $12.8m order for the Thermal Weapon Sight Program and a $3.4m order for the F-35 Joint Strike Fighter Program. The increased size of these orders is a direct result of our intense focus on improved customer engagement, and the improvements in our manufacturing processes and equipment have allowed Kopin to maintain a high ratio of on-time and in-full deliveries.

“We continue to take a disciplined approach to cost controls which has led to strategically reducing research & development (“R&D”) and certain selling, general and administration expenses. The benefit of our cost controls efforts has significantly improved our bottom line and we were close to achieving our cash breakeven goal for the quarter, excluding the impact of non-cash stock compensation expense and legal costs from ongoing litigation.

Mr. Murray concluded: “Looking forward, we remain ahead of our goals on our strategic initiatives, which are the bedrock for significant and sustainable revenue and profitable growth. We have significantly increased our 2024 order cover with higher prices on several key programs and believe there are opportunities for additional follow-on orders within the quarter. As a result of our strong order book, we anticipate production will significantly increase in 2024. To ensure we execute on this anticipated production ramp we are taking steps to improve production flow for long term profitability, which may impact fourth quarter of 2023’s revenues. As we stated in January, our goal for 2023 was to position Kopin for long-term growth by driving new customer design activities that fuel our future product pipeline and growth. We believe Kopin is well positioned to deliver exciting new technologies, revenues, and long-term sustainable growth.”

Third Quarter Financial Results

Total revenues for the third quarter ended September 30, 2023, were $10.6m, compared to $11.7m for the third quarter ended September 24, 2022, a 10% decrease. Product revenues for the third quarter ended September 30, 2023, were $5.5m, compared to $8.3m for the third quarter ended September 24, 2022. The decrease in product revenues was a result of lower industrial product revenues, which decreased by $1.4m or 82%, year over year due to continued weakness in the Chinese 3D automated test market and defense product revenues, which decreased by $0.8m or 14% year over year. In the third quarter of 2023, funded research and development revenues increased by $1.6 m or 47% due to new and additional program and development orders.

Cost of Product Revenues for the third quarter of 2023 was $5.4m, or 99% of net product revenues, compared with $8.0m, or 97% of net product revenues, for the third quarter of 2022, essentially flat.

R&D expenses for the third quarter of 2023 were $3.1m compared to $3.4m for the third quarter of 2022, a 10% decrease year over year. The decrease in R&D expense is attributable to a decrease in OLED development costs and more disciplined project management.

SG&A expenses were $4.8m for the third quarter of 2023, compared to $4.3m for the third quarter of 2022. The increase was primarily due to legal expenses and non-cash stock compensation of approximately $1.7m for the third quarter of 2023 as compared to approximately $0.5m for the third quarter of 2022. These increases were partially offset by a decrease in compensation and benefit costs of $1.3m for the third quarter of 2023 as compared to approximately $2.0m for the third quarter of 2022.

Other income and expense in the third quarter of 2022 included $2.0m of non-cash impairment losses on an equity investment.

Net Loss Attributable to Kopin for the third quarter of 2023 was ($2.5)m, or ($0.02) per share, compared with Net Loss Attributable to Kopin of ($6.1)m, or ($0.07) per share, for the third quarter of 2022, marking a significant and consistent improvement.

All amounts above are estimates and readers should refer to our Form 10-Q for the quarter ended September 30, 2023, for final disposition as well as important risk factors. (Source: BUSINESS WIRE)

 

10 Nov 23. Chemring announced that trading in the period to 31 October 2023 progressed as planned with the outturn for the year ending 31 October 2023 expected to be in-line with Board and analyst expectations*.

Net debt at year end is expected to be approximately £14.4m (2022: £7.2m). Strong operating cash conversion of 90% of EBITDA (three year average: 101%), has been used to fund growth opportunities, both organic and bolt-on, increase dividends by 20%, and deploy £9m into the £50m share buyback programme announced on 1 August 2023.

The Group continues to see robust market conditions, with increasing customer demand for its technology-driven solutions and a resurgent demand for traditional defence capabilities. This robust growth outlook is expected to be maintained over the long term.

Energetics Contract Awards and Further Capacity Expansion

The Group continues to experience significant increases in demand for energetic materials and devices, with its Norwegian based subsidiary Chemring Nobel winning over £40m of orders in the final month of the year, and its US based subsidiary Chemring Energetic Devices winning a $46m order from United Launch Alliance (“ULA”) in support of their Vulcan Launch Vehicle.

Considering the increased levels of demand for energetic materials and the strong organic growth opportunity this presents, the Group has decided to invest a further c£30m in increasing the capacity of Chemring Nobel. This investment, which is in addition to the c£90m capacity expansion plan across the Group’s three Energetics businesses that was announced in June 2023, is expected to deliver c£25m of incremental annual revenue.  The total investment in increased capacity in the Group’s three Energetics businesses over the next three years is expected to be c£120m which will generate increased revenue of c£85m and increased operating profit of c£21m.

Strategic Review of US Sensors

With both of the Group’s US DoD sole-source biological detection Programs-of-Record now in production phases**, and following the US Army’s decision to curtail production of the Husky Mounted Detection System (“HMDS”) and accelerate the transition of the program into a sustainment phase, and our assessment that it is no longer probable the Group will proceed to the next phase of the competitive Aerosol and Vapor Chemical Agent Detector (“AVCAD”)  program, the Group has conducted a strategic review of its US Sensors business and concluded that a focus on biological detection and security markets presents the best opportunity to maintain strong margins and deliver growth.As a result, the Explosive Hazard Detection (“EHD”) business will be treated as a discontinued operation in 2023 with a non-cash impairment of the goodwill associated with its acquisition in 2009, and other assets, totalling £31m being recorded.  Also, a non-cash (pre-tax) impairment of the previously capitalised AVCAD development costs and other assets associated with the program totalling £18m has been recorded as a non-underlying item; given its competitive nature the Group had not included any AVCAD program revenues in its forecasts.

The Group has moved quickly and decisively to reposition and reshape its US Sensors business to ensure sustainable competitive advantage in its targeted biological detection and security markets.

FY23 results

Chemring’s FY23 results are scheduled to be announced on 12 December 2023.

* The Group believes the consensus of analyst forecasts for adjusted operating profit for the year ended 31 October 2023 is £67.0m.

** The Enhanced Maritime Biological Detector (“EMBD”) is now in full rate production and the Joint Biological Tactical Detection System (“JBTDS”) is in low rate initial production.

 

08 Nov 23. INDUS-X Investor Strategy Session Harnesses Private Capital for Start-ups. Department of Defense Spokesperson Lt. Col. Martin Meiners provided the following readout:

The U.S. Department of Defense (DoD) and the Indian Ministry of Defence (MoD) today participated in the first investor strategy session of the India-U.S. Defense Acceleration Ecosystem (INDUS-X).

The session in New Delhi occurred in conjunction with the fifth U.S.-India 2+2 Ministerial Dialogue, led by Secretary Austin, Secretary Blinken, and their counterparts. The U.S.-India Strategic Partnership Forum (USISPF) and IndUS Tech Council organized the investor session to mobilize capital and sustain collaboration between both countries’ private sectors. At the session, Defense Innovation Unit (DIU) Director and Senior Advisor to the Secretary of Defense Douglas A. Beck addressed investors alongside Innovations for Defence Excellence (iDEX) Chief Operating Officer Vivek Virmani of the Indian MoD. Beck and Virmani joined investors and start-ups to discuss harnessing private capital to drive defense innovation and equip both countries’ armed forces with the capabilities to defend a free and open Indo-Pacific.

Launched in June against the backdrop of Prime Minister Modi’s visit to the White House, INDUS-X is strengthening ties between both countries’ defense industrial ecosystems to make them more innovative, accessible, and resilient. By enabling partnerships between both countries’ businesses, investors, and academic institutions, this initiative builds on a commitment by the U.S. and Indian National Security Advisors in January 2023 to launch an “Innovation Bridge” to connect defense start-ups from the two countries as part of the U.S.-India initiative on Critical and Emerging Technology (iCET).

At the investor session, DIU and iDEX also announced the launch of the INDUS-X Gurukul Education Series – monthly events where government officials and private sector leaders will meet with U.S. and Indian start-ups to discuss business and technology development, regulatory regimes, and investor pitches. The Education Series will inform start-ups of new programs and opportunities available through INDUS-X and be tied to priorities established by both governments, as well as other areas of interest outlined in the iCET agenda and INDUS-X Fact Sheet.

This event builds on recent collaboration between DIU and iDEX, who recently opened applications for joint challenges that enable start-ups in both countries to develop technological solutions for shared defense challenges. Aligned with the Roadmap for U.S.-India Defense Industrial Cooperation, the challenges will culminate in financial awards for the most promising technology along with potential procurement opportunities. (Source: U.S. DoD)

 

08 Nov 23. Astronics Corporation Reports 2023 Third Quarter Financial Results.

  • Sales grew 24% to $162.9m in the quarter and were up 31% year-to-date to $493.9m
  • Bookings totaled $176.0m in the quarter and $540.9m for the nine month period
  • Record backlog of $604.3m, the seventh consecutive quarterly record reflecting continued strong demand
  • Net loss was $17.0m after $3.8m tax benefit and $11.1m non-cash reserves related to a customer bankruptcy
  • Adjusted EBITDA2 was $8.8m, or 5.4% of sales, a 500 basis point improvement over prior-year period
  • Revenue guidance for 2023 raised to $680m to $690m from previous range of $640m to $680m; Fourth quarter revenue expected to be $185m to $195m, the mid-point returns to pre-pandemic average quarterly sales levels of 2019

Astronics Corporation (Nasdaq: ATRO) (“Astronics” or the “Company”), a leading supplier of advanced technologies and products to the global aerospace, defense, and other mission-critical industries, today reported financial results for the three and nine months ended September 30, 2023.

Peter J. Gundermann, Chairman, President and Chief Executive Officer, commented, “Our business continues to strengthen, driven by consistent demand and an improving supply chain. Our manufacturing processes are building momentum but progress is somewhat lumpy, with light third quarter results followed by a significant step up expected in the fourth quarter. We are increasing our 2023 revenue guidance range to $680m to $690 m from our previous range of $640m to $680m. At the midpoint of our updated guidance, we would record 28% growth for the year. Our expectations for a very strong fourth quarter promise an exciting end to the year, and a return in average quarterly sales volume to pre-pandemic levels.”

Consolidated sales were up $31.5m, or 24.0%. Aerospace sales increased $29.9m, or 26.7%, driven primarily by higher sales to the commercial transport market. Test Systems sales increased $1.6m on higher defense revenue.

Consolidated operating loss was $14.5m, which includes the impact of an $11.1 m non-cash reserve. In November 2023, a non-core contract manufacturing customer declared bankruptcy, and as a result, a reserve of $7.5 m was recorded for outstanding receivables, which impacted selling, general and administrative expenses, and a reserve of $3.6m was recorded for inventory, which impacted cost of goods sold. The customer was classified within the “Other” product category of the Aerospace segment. Excluding the non-cash reserve, operating income was positively impacted by higher volume.

Interest expense was $6.0m in the current period, compared with $2.5m in the prior-year period, primarily driven by higher interest rates on the Company’s credit facilities which were refinanced in January of this year. Interest expense included approximately $0.8 m of non-cash amortization of capitalized financing-related fees.

Tax benefit in the quarter was $3.8m. Tax expense for the year is expected to be $1m to $2m, down from $5.6m year-to-date.

Consolidated net loss was $17.0m, or $0.51 per diluted share, compared with net loss of $14.9m, or $0.46 per diluted share, in the prior year. The reserve for the customer bankruptcy on a per share basis was $0.33.

Consolidated adjusted EBITDA increased to $8.8m, or 5.4% of consolidated sales, compared with adjusted EBITDA of $0.5m, or 0.4% of consolidated sales, in the prior year period primarily as a result of higher sales.

Bookings were $176.0m in the quarter resulting in a book-to-bill ratio of 1.08:1. For the trailing twelve months, bookings totaled $723.3m. Backlog at the end of the third quarter was a record $604.3m and excludes $19.9 m of backlog that was associated with the customer bankruptcy referred to previously. Approximately $505.3m of backlog is expected to ship over the next twelve months.

Aerospace Segment Review (refer to sales by market and segment data in accompanying tables)

Aerospace Third Quarter 2023 Results (compared with the prior-year period, unless noted otherwise)

Aerospace segment sales increased $29.9m, or 26.7%, to $142.1m. The increase was driven by a 29.8% increase, or $23.3m, in commercial transport sales. Sales to this market were $101.7m, or 62.5% of consolidated sales in the quarter, compared with $78.4m, or 59.6% of consolidated sales in the third quarter of 2022. Higher airline spending and increasing OEM build rates drove the increased demand.

Military aircraft sales increased $4.2m, or 33.9%, to $16.7m. General Aviation sales increased $1.4m, or 9.8%, to $16.2m.

Aerospace segment operating loss of $7.5m, which includes the impact of $11.1 m in reserves related to accounts receivable and inventory, compares with operating loss of $6.9m in the same period last year.

Aerospace bookings were $153.3m for a book-to-bill ratio of 1.08:1. Backlog for the Aerospace segment was a record $513.9 m at quarter end.

Mr. Gundermann commented, “Our Aerospace business continues to accelerate. Demand for air travel is driving the recovery, both in terms of OEM production rates and retrofit activity. All of our major strategic Aerospace thrusts, including passenger entertainment, flight critical power and aircraft lighting are benefiting from these tailwinds. Our Aerospace bookings during the last four quarters were $644m against sales of $574m, for a book-to-bill of 1.12:1, confirming strong demand for our products and the opportunity for continued growth.”

Test Systems Segment Review (refer to sales by market and segment data in accompanying tables)

Test Systems Third Quarter 2023 Results (compared with the prior-year period, unless noted otherwise)

Test Systems segment sales were $20.8m, up $1.6m primarily as a result of higher defense revenue.

Test Systems segment operating loss was $1.8m, an improvement over operating loss of $2.3m in the third quarter of 2022, despite a $1.5m increase in litigation-related legal expenses. The improvement reflects cost savings resulting from the second quarter 2023 realignment of staffing. Test Systems’ operating loss for both periods was negatively affected by mix, and under absorption of fixed costs due to volume.

Bookings for the Test Systems segment were $22.7m for a book-to-bill ratio of 1.09:1 for the quarter. Backlog was $90.4m at the end of the third quarter of 2023 compared with a backlog of $82.8m at the end of the third quarter of 2022.

Mr. Gundermann commented, “Our Test business continues to tread water, awaiting significant new orders that have been in the pipeline for some time. Until those orders are booked, the Company will continue to contend with lower-than-expected revenue. We expect 2024 to be a much better year, but we need to receive the orders first.”

Liquidity and Financing

Cash on hand at the end of the quarter was $7.7m. Capital expenditures in the quarter were $2.2m. Net debt was $166.1m.

Cash used for operations was $1.1m in the third quarter of 2023, improving from cash used of $2.0m in the second quarter. During the quarter, higher inventory and accounts receivable were partially offset by increased accounts payable and accrued expenses.

During the quarter, under its at-the-market offering, the Company sold 834,000 shares at an average price of $16.70 per share for net proceeds after offering expenses of $13.6m.

David Burney, the Company’s CFO, said, “Liquidity was tight during the quarter as investment in net working capital remained at elevated levels in advance of what we expect will be a very strong fourth quarter and entry into 2024. We leveraged our at-the-market offering, which we initiated for just these purposes, to close liquidity requirements until we realize the cash generated from growing sales.”

He continued, “The customer bankruptcy reserves relate to some contract design and manufacturing work we did for a non-aerospace customer that started in 2021. The customer filed Chapter 11 just days ago so it is too early to predict a path to resolution, but we will be working to maximize our recovery through their reorganization process. The non-cash adjustment results in a very minor impact on our banking covenants and there are no other balances associated with this account on our balance sheet. We do not expect any further impacts to our balance sheet, nor any impact on our forecasted results for the fourth quarter or beyond.”

2023 and 2024 Outlook

The Company expects fourth quarter revenue to be in the range of $185m to $195m, and 2023 revenue to be approximately $680m to $690m. The midpoint of this range would be a 28% increase over 2022 sales.

The range for planned capital expenditures in 2023 has been reduced to $7m to $9m from previous expectations of $7m to $12m.

Peter Gundermann commented, “We expect our fourth quarter to be a very strong close to 2023, with revenue at pre-pandemic levels. This will be a big improvement over any other quarter we have seen since 2019, both for top and bottom line results.”

He concluded, “While we are not yet ready to issue revenue guidance for 2024, we expect the fourth quarter to be indicative of our activity level throughout the year. We will enter the year with significant tailwinds, including a record backlog, a stabilized labor force, moderating inflation, substantial new program awards, increasing OEM production rates and higher retrofit demand. Our sales increased 20% in 2022 and are projected to increase 28% in 2023. We anticipate yet another year of strong growth in 2024.” (Source: BUSINESS WIRE)

 

08 Nov 23. BlackSky Reports Third Quarter 2023 Results.

Q3 Total Revenue Increases 26% from Prior Year Period.

Strong Improvement in Net Income; Achieves Nearly Breakeven Adjusted EBITDA.

BlackSky Technology Inc. (“BlackSky” or the “Company”) (NYSE: BKSY) announced results for the third quarter ended September 30, 2023.

Third Quarter Financial Highlights:

  • Revenue of $21.3m, up 26% from the prior year period
  • Imagery & software analytical services revenue grew 11% over the prior year quarter
  • Cost of sales, as a percent of revenue, related to imagery & software analytical services improved to 23% from 26% in the prior year quarter

“Increased customer demand worldwide for BlackSky’s space-based intelligence drove record revenues in the third quarter, and coupled with strong operating leverage and responsible cost management, keeps us on track to achieve positive Adjusted EBITDA in Q4 this year,” said Brian E. O’Toole, BlackSky CEO. “We’re pleased with the strong momentum we’ve seen in our business. New contracts and renewal agreements primarily supporting U.S. and international government agencies illustrates growing demand and demonstrates how BlackSky is increasingly relied upon by some of the most demanding customers around the world. With our focused execution on profitable growth, we believe BlackSky is well-positioned to carry this momentum into 2024 and beyond.”

Recent Highlights

  • Awarded over $9 m in contract expansions with existing U.S. government agencies for our advanced imagery and analytic services
  • Signed a multi-year master service agreement for up to $8m to support a new International Ministry of Defense for high-frequency imagery through BlackSky’s Spectra platform
  • Expanded a contract with an existing International defense customer to increase assured access of their regions of interest
  • Signed a contract with the U.S. Air Force Research Laboratory to provide an AI-enabled automated target recognition service to track mobile assets in real-time using multiple satellite data sources
  • BlackSky was named to the 2023 Deloitte Technology Fast 500 list which honors the most innovative, fastest-growing public companies in North America

Financial Results

Revenues(1)

Total revenue for the third quarter of 2023 was $21.3m, up $4.3m, or 26%, from the third quarter of 2022. Imagery and software analytical services revenue was $15.3m in the third quarter of 2023, up 11% over the prior year period, primarily driven by increased demand from new and existing U.S. and international government customers. Professional and engineering services revenue was $6.0m in the third quarter of 2023, up 86% over the prior year period, primarily driven by new programs won in 2023. Professional and engineering services contracts are milestone-based contracts that have quarter-over-quarter variability, in contrast to the high-margin imagery and software analytical services, which are typically recurring subscription-based revenues.

Cost of Sales(1)(2)

Cost of sales as a percent of revenue was 32% for the third quarter of 2023, compared to 46% in the third quarter of 2022. Imagery and software analytical service costs as a percent of revenue was 23% in the third quarter of 2023, compared to 26% in the third quarter of 2022. The year-over-year improvement in imagery and software analytical service costs was primarily driven by greater volumes of revenue that inherently have a low fixed-cost structure as a percent of revenue.

Operating Expenses

Operating expenses for the third quarter of 2023 were $29.0m, which included $2.3m of non-cash stock-based compensation expense and $11.3m in depreciation and amortization expenses. Operating expenses for the third quarter of 2022 were $28.6m, which included $2.9m in non-cash stock-based compensation expense and $9.6m in depreciation and amortization expenses. Excluding the non-cash stock-based compensation and depreciation and amortization expenses from both years, cash operating expenses for the third quarter of 2023 were $15.4m compared to cash operating expenses of $16.1m for the third quarter of 2022. The year-over-year decrease of $0.7m, or 4%, was primarily due to reductions in general corporate costs which more than offset investments in our go-to-market initiatives.

Net Income

Net income for the third quarter of 2023 was $0.7m, compared to a net loss of $13.1m in the third quarter of 2022.

Adjusted EBITDA(3)

Adjusted EBITDA loss for the third quarter of 2023 was $0.4m, compared to an Adjusted EBITDA loss of $6.6m in the prior year quarter. The $6.2 m year-over-year improvement was primarily driven by strong operating leverage achieved through higher revenues, gross margin growth, and reductions in operating expenses.

Balance Sheet & Capital Expenditures

As of September 30, 2023, cash and cash equivalents, restricted cash, and short-term investments totaled $51.5m. Capital expenditures for the third quarter of 2023 were $35.9m.

2023 Outlook

With strong operating leverage in the third quarter resulting in nearly breakeven Adjusted EBITDA, the Company remains on track to achieve positive Adjusted EBITDA in Q4 of 2023. BlackSky continues to experience strong global demand for its high-frequency imagery and AI-driven analytics as demonstrated by the strong book of business won this year. Considering the timing on a number of new contract wins, the Company is narrowing the range of its 2023 revenue outlook to be between $84 m and $90m, representing a 33% increase over 2022 revenue. In addition, the Company expects capital expenditures for the full year 2023 to now be between $48m and $54m driven by the timing of payments on the Gen-3 constellation.

(1)  Effective January 1, 2022, the Company reorganized its classification on the consolidated statements of operations and comprehensive loss to better align the Company’s broad portfolio. As a result, the prior period amounts presented to reflect the impact of the reorganization have been recast.

(2)  Cost of sales is defined as imagery and software analytical services costs and professional and engineering services cost, less depreciation and amortization expense.  (Source: BUSINESS WIRE)

 

09 Nov 23. TransDigm to acquire the Electron Device Business of CPI.

TransDigm Group has entered into a definitive agreement to acquire the Electron Device Business of Communications & Power Industries (CPI) for approximately USD1.385bn in cash. CPI’s Electron Device Business is a manufacturer of electronic components and subsystems primarily serving the aerospace and defence market. The company’s products are proprietary components with significant aftermarket content and a strong presence across major aerospace and defence platforms. Approximately 70% of its revenue is derived from the aftermarket and nearly all of its revenue is generated from proprietary products.

CPI’s Electron Device Business generated approximately USD300m in revenue for its fiscal year ended September 30, 2023.  The company has manufacturing locations in Palo Alto, California, Beverly, Massachusetts, Middlesex, UK, and Woodland, California and employs roughly 900 people.

“We are excited about the acquisition of the Electron Device Business of CPI. This business fits well with our long-standing strategy. The vast majority of the Company’s revenues come from highly engineered, proprietary products with substantial aftermarket content. The Company has established positions across a diverse range of new and existing platforms within the broader aerospace and defense industry. As with all TransDigm acquisitions, we expect this acquisition to create equity value in-line with our long-term private equity-like return objectives,” says Kevin Stein, TransDigm’s President and Chief Executive Officer, in a press release.

The acquisition, which is expected to close by the end of TransDigm’s third fiscal quarter of 2024, is subject to regulatory approvals in the United States and United Kingdom and customary closing conditions. (Source: Google/https://evertiq.com/design)

 

08 Nov 23. Airbus reports Nine-Month (9m) 2023 results.

  • 488 commercial aircraft delivered in 9m 2023
  • Revenues € 42.6 bn; EBIT Adjusted € 3.6bn
  • EBIT (reported) € 2.7bn; EPS (reported) € 2.96
  • Free cash flow before M&A and customer financing € 1.0bn
  • Charges on certain satellite development programmes
  • Guidance maintained

Amsterdam, 08 November 2023 – Airbus SE (stock exchange symbol: AIR) reported consolidated financial results for the nine months ended 30 September 2023.

“We continue to make progress on our operational plan in a global environment that has become increasingly complex. The nine-month earnings reflect higher commercial aircraft deliveries, the good performance in helicopters as well as charges linked to the reassessment of certain satellite development programmes,” said Guillaume Faury, Airbus Chief Executive Officer. “Demand for our commercial aircraft is very strong with a continuing recovery in the widebody market. We expect the supply chain to remain challenging as we progress on the production ramp-up. In that context, we maintain our guidance for the full year.”

Gross commercial aircraft orders totalled 1,280 (9m 2022: 856 aircraft) with net orders of 1,241 aircraft after cancellations (9m 2022: 647 aircraft). The order backlog amounted to 7,992 commercial aircraft at the end of September 2023. Airbus Helicopters registered 191 net orders (9m 2022: 246 units) which were well spread across programmes. Airbus Defence and Space’s order intake by value was €8.5bn (9m 2022: €8.0bn), including the renewal of the in-service support contract for Germany’s A400M fleet.

Consolidated revenues increased 12 percent year-on-year to €42.6bn (9m 2022: €38.1bn). A total of 488 commercial aircraft were delivered (9m 2022: 437(1)(2) aircraft), comprising 41 A220s, 391 A320 Family, 20 A330s and 36 A350s. Revenues generated by Airbus’ commercial aircraft activities increased 18 percent, mainly reflecting the higher number of deliveries. Airbus Helicopters’ deliveries increased slightly to 197 units (9m 2022: 193 units) with revenues rising 3 percent, reflecting the overall performance across programmes and services. Revenues at Airbus Defence and Space decreased 6 percent, mainly driven by a backloaded A400M delivery profile and updated Estimates at Completion of certain satellite development programmes. A total of 4 A400M military airlifters were delivered (9m 2022: 7 aircraft).

Consolidated EBIT Adjusted – an alternative performance measure and key indicator capturing the underlying business margin by excluding material charges or profits caused by movements in provisions related to programmes, restructuring or foreign exchange impacts as well as capital gains/losses from the disposal and acquisition of businesses – was €3,631m (9m 2022: €3,481m).

EBIT Adjusted related to Airbus’ commercial aircraft activities increased to €3,216m (9m 2022: €2,875m), reflecting the higher deliveries and a more favourable hedge rate, partially offset by investments for preparing the future. 9m 2022 included the non-recurring positive impact from retirement obligations partly offset by the impact resulting from international sanctions against Russia. In H1 2023 provisions were released to reflect further progress made on compliance-related topics.

The ramp-up on the A220 programme is continuing towards a monthly production rate of 14 aircraft in 2026. Production on the A320 Family programme is progressing well towards the previously announced rate of 75 aircraft per month in 2026. The modernisation and digitalisation of the industrial system continues, as illustrated by the inauguration of the A321XLR equipment installation hangar in Hamburg. The A321XLR is progressing towards certification, with entry-into-service expected to take place in Q2 2024.

On widebody aircraft, the Company has decided to increase the production rate for the A350 to 10 aircraft a month in 2026 and continues to target rate 4 for the A330 in 2024.

Airbus Helicopters’ EBIT Adjusted increased to €417m (9m 2022: € 380 m), reflecting the overall performance across programmes and services. 9m 2022 also included net positive non-recurring elements.

EBIT Adjusted at Airbus Defence and Space decreased to €-1m (9m 2022: €231m). It included charges of € 0.4 bn related to updated Estimates at Completion of certain satellite development programmes, mostly recorded in the third quarter. 9m 2022 also included net positive non-recurring elements.

On the A400M programme, development activities continue towards achieving the revised capability roadmap. Retrofit activities are progressing in close alignment with the customer. No further net material impact was recognised in the first nine months of 2023. Risks remain on the qualification of technical capabilities and associated costs, on aircraft operational reliability, on cost reductions and on securing overall volume as per the revised baseline.

In order to cope with an evolving defence and security environment, the Company has launched a transformation of its Defence and Space division. This aims to adapt ways of working, focusing on rigorous programme execution and a rebalancing of risks and opportunities to reinforce end-to-end accountability and ownership in the business lines and improve competitiveness.

Consolidated self-financed R&D expenses totalled €2,167m (9m 2022: €1,965m).

Consolidated EBIT (reported) amounted to €2,712m (9m 2022: €3,552m), including net Adjustments of €-919m.

These Adjustments comprised:

  • €-806m related to the dollar pre-delivery payment mismatch and balance sheet revaluation, of which € -155m were in Q3. This mainly reflects the phasing impact arising from the difference between transaction date and delivery date;
  • €-57m related to the Aerostructures transformation, of which €-23m were in Q3;
  • €-56m of other costs including compliance, of which €-10m were in Q3.

The financial result was €231m (9m 2022: €-306m). It mainly reflects a positive impact from the revaluation of certain equity investments and the evolution of the US dollar, partly offset by negative impacts from the revaluation of financial instruments. Consolidated net income(3) was €2,332m (9m 2022: € 2,568m) with consolidated reported earnings per share of €2.96 (9m 2022: € 3.26).

Consolidated free cash flow before M&A and customer financing was € 1,037m (9m 2022: € 2,899m), mainly reflecting the inventory build-up in Q3, consistent with the backloaded delivery profile and production ramp-up.

Consolidated free cash flow of € 718m (9m 2022: € 2,502m) included €-261m of customer financing, mostly related to the planned execution of certain contractual obligations. The gross cash position stood at €22.4bn at the end of September 2023 (year-end 2022: €23.6 bn), with a consolidated net cash position of €8.3bn (year-end 2022: €9.4bn).

Outlook

The guidance issued in February 2023 is maintained.

As the basis for its 2023 guidance, the Company assumes no additional disruptions to the world economy, air traffic, the supply chain, the Company’s internal operations, and its ability to deliver products and services.

The Company’s 2023 guidance is before M&A.

On that basis, the Company targets to achieve in 2023 around:

  • 720 commercial aircraft deliveries;
  • EBIT Adjusted of €6.0bn;
  • Free Cash Flow before M&A and Customer Financing of €3.0bn.

On 26 October 2023, Airbus received notice from the US State Department that the Consent Agreement it had entered into in January 2020 had been closed, based on fulfilment of its terms. This notice, as well as the earlier discontinuation of the deferred prosecution agreements of Airbus with the UK Serious Fraud Office, France’s Parquet National Financier and the US Department of Justice, concludes a three-year probation period during which Airbus demonstrated to the authorities its commitment to compliance and integrity. This enables Airbus to move forward and continue to grow in a sustainable and responsible manner.

 

09 Nov 23. Rheinmetall with strong figures for the third quarter: Order backlog of €36.5bn – significant increase in operating result.

  • Expansion of military business: further substantial growth in orders – Rheinmetall Backlog increases by 42% to around €36.5bn
  • Consolidated sales up 13% to €4.6bn
  • Operating result climbs by 17% to €387m
  • Operating margin improves to 8.4%
  • Forecast for 2023 confirmed

Rheinmetall AG, Düsseldorf, closed the third quarter of fiscal 2023 with continued sales growth and significantly higher income. This positive development was mainly driven by business with the armed forces of Germany and its partner nations in the EU and NATO. The Group recorded double-digit sales growth thanks to the dynamic market situation and the high level of demand in military business.

The sharp rise in the operating result in the third quarter, which significantly exceeded market expectations, had already prompted the Group to release an ad hoc statement on October 25, 2023. Based on its preliminary figures, Rheinmetall announced that it was expecting an operating result of €191m in the third quarter of 2023 (Q3 2022: €120m). The profit contribution from the most recent acquisition in Spain, the munitions manufacturer Expal, is already accounted for in this forecast.

In light of the current market situation and the consistently positive order situation, management is confirming its current guidance for the Group’s sales growth and operating margin.

Armin Papperger, CEO of Rheinmetall AG, commented: “We are well on track to achieve our ambitious annual targets for sustainable and profitable growth. Many countries need Rheinmetall in order to meet the dramatically increased demand for military equipment – this is demonstrated by record figures for new orders and orders on hand. We accept the resulting responsibility to deliver and bring the projects to a successful conclusion.”

Armin Papperger: “The integration of our latest acquisition, the Spanish munitions manufacturer Expal Systems, has got off to a successful start. Furthermore, we have massively increased our additional capacities. As one of the world’s leading ammunition producers, we can make a considerable contribution in this set-up to ensuring Ukraine’s ability to defend itself in this area and to replenishing the supplies of NATO partners.”

“We are grateful for the opportunity to provide Ukraine with effective aid for its defence in close coordination with the German government. Now we are also operating directly within the country: The joint venture that we recently established with Ukrainian Defense Industry (UDI) in Kyiv has picked up pace. It will initially perform servicing and maintenance for Ukraine before we begin producing and developing military vehicles there,” says Armin Papperger.

Rheinmetall Group: Sales growth of 13% – Rheinmetall Nomination climbs by around 130%

Consolidated sales increased by €529m or 13% year-on-year to €4,618m in the first three quarters of 2023 (previous year: €4,089m). Adjusted for currency effects, sales were more than 14% higher than in the previous year. The percentage of international sales increased year-on-year from around 71% to 75%.

The consolidated figures also include the sales and earnings contributions of the Spanish company Expal Systems, which was acquired as at July 31, 2023.

The operating result for the period ended September 30, 2023, therefore amounted to €387m, up €56m or 17% on the previous year’s figure of €331m. The improvement in the operating result is mainly attributable to dynamic performance on the market for security technology, which led to margin effects and a more profitable product mix. The Group’s operating margin improved to 8.4% in the third quarter of 2023 (previous year: 8.1%).

Earnings per share from continuing operations increased from €3.93 to €4.73 in the first nine months of fiscal 2023.

Operating free cash flow improved significantly by €251m to €-427m in the first three quarters of 2023 after €-678m in the same period of the previous year. Despite the continued growth in inventories, operating free cash flow improved considerably in the first nine months of fiscal 2023 thanks to higher customer payments.

Rheinmetall Backlog saw substantial growth of around 42%, from €25.7bn to €36.5bn (September 30, 2023). In addition to orders on hand, Rheinmetall Backlog includes the call-offs expected from framework agreements in place with military customers and potential orders from contracts with civilian clients.

Rheinmetall Nomination more than doubled, increasing by around 130% year-on-year to €14,505m in the first three quarters of 2023 (previous year: €6,325m). Rheinmetall Nomination comprises traditional incoming orders as well as the volume from future call-offs under new framework agreements entered into with military customers and new contracts with civilian clients (nominations).

Vehicle Systems: Fivefold increase in order intake

Sales in the Vehicle Systems division, which mainly operates in military wheeled and tracked vehicles, increased by €351m or 27% year-on-year to €1,671m in the first nine months of 2023. The sales growth is attributable in particular to projects for the delivery of tactical vehicles.

Rheinmetall Nomination – the total of order intake and the volume of new framework agreements with military customers – increased by €4,047 m as against the previous year to €4,889m. This was due in particular to a fivefold increase in order intake resulting from the acquisition of new major orders, especially in connection with the program to replace the

Bradley infantry fighting vehicle in the US, orders for new Puma infantry fighting vehicles and state-of-the-art military trucks for the German armed forces, and the Leopard 2 upgrade for Norway. A framework agreement for trucks in Austria was another strategically important success.

Rheinmetall Backlog in the division – comprising orders on hand and the expected call-offs under the framework agreements in place with military customers – amounted to €15.0bn as at September 30, 2023, up €2,716m or around 22% on the previous year’s figure. The operating result improved from €123m to €183m in the first three quarters of 2023. This represents growth of €60m or 49%. This positive development is mainly attributable to margin effects in projects. The operating margin of around 11% significantly exceeded the previous year’s level of around 9%.

Weapon and Ammunition: Backlog more than doubles to over €11bn

The Weapon and Ammunition division generated sales of €1,035m from its weapon systems and ammunition activities in the first three quarters of 2023, an increase of €186m or 22% on the previous year’s figure. The year-on-year increase is due in particular to higher ammunition call-offs by customers and higher sales of protected truck cabs. The Rheinmetall Expal Munitions companies acquired on July 31, 2023 generated sales of €41m.

Rheinmetall Nomination amounted to €7,026m after the first nine months of 2023, well over double the strong figure recorded in the same period of the previous year (€2,352m). Major new orders related to two multi-year framework agreements for munitions and associated initial call-offs of tank and artillery ammunition, ammunition orders for the Gepard anti-aircraft tank, and tank ammunition orders for Marder and Leopard 1 for Ukraine. The previous year’s high figure was therefore significantly exceeded.

Rheinmetall Backlog in the division more than doubled by €6,476m or around 135% to €11.3bn as at September 30, 2023 (previous year: €4.8bn).

In the first nine months of 2023, the operating result improved by €70m or 63% to €180m (previous year: €110m). This positive development is mainly attributable to a more profitable product mix. As a result, the operating margin rose substantially from 13% to over 17%. This includes an earnings contribution of €17m from Rheinmetall Expal Munitions.

Electronic Solutions: Sales growth of 14%

The Electronic Solutions division, which produces solutions in the field of armed forces digitalization, infantry equipment, air defence and simulation, increased its sales by €87m to €729m in the first nine months of 2023 (previous year: €642m); this corresponds to growth of around 14%.

Rheinmetall Nomination increased by €142m or 17% year-on-year to €987m. A major new order for Puma was placed in the first nine months of 2023. Rheinmetall Backlog amounted to €3.4bn as at September 30, 2023, up 21% year-on-year (previous year: €2.8bn).

In the first nine months of 2023, the operating result improved slightly to €52 m after €51 m in the previous year. The operating margin declined to 7.2% (previous year: 7.9%), largely as a result of changes in the product mix.

Sensors and Actuators: Nominated backlog up around 18%

Sales in the Sensors and Actuators division, which provides solutions for industrial applications and electric mobility as well as components and control systems for emissions reductions, increased by €11m or 1% year-on-year to €1,057m in the first nine months of 2023. This development primarily resulted from increased volumes in Europe. Booked business in the first nine months of 2023 was below the previous year’s level at €1,821 m (previous year: €2,083m). The nominated backlog, i.e. the volume of call-offs expected from customer agreements, increased by around 18% to €8.3bn as at September 30, 2023 (previous year: €7.0bn).

The operating result declined by 42% to €39m in the first three quarters of 2023 (previous year: €67m). Among other things, this development is attributable to additional costs for dealing with the consequences of the cyberattack on the division’s IT systems in April 2023 as well as increased raw material prices, which can only be passed on to customers after a delay. Accordingly, the operating margin fell to 3.7% (previous year: 6.4%).

Materials and Trade: Downturn in sales due to cyberattacks

Sales in the Materials and Trade division, which supplies plain bearings and structural components and operates global aftermarket business, declined by €12m or around 2% to €550m in the first three quarters of 2023. The downturn was due in particular to the lower sales volume in the Bearings business unit. In the Trade business unit, the downturn in sales was attributable to the consequences of the cyberattacks in April 2023. Booked business amounted to €546 m in the first nine months of fiscal 2023. This represents a year-on-year decrease of almost 7% (previous year: €584m). The nominated backlog was largely unchanged year-on-year at around €602m as at September 30, 2023 (previous year: €604 m).

The operating result of the Materials and Trade division fell by €4m or 9% to €41m in the first nine months of 2023. The operating margin declined to 7.5% (previous year: 8.1%). This was due in particular to a decline in the at-equity result of a Chinese joint venture as well as the earnings effect of the downturn in sales.

Outlook: Current forecast for year confirmed

Rheinmetall is confirming its current annual guidance for 2023.

Dynamic performance on the market for security technology – especially in the Weapon and Ammunition division – led to a favorable product and margin mix in the third quarter. In recent months, the company has also continued to use strict cost control, active provisioning, and the mitigation of risks on the energy and procurement markets as measures to successfully counter the general trend of inflation and the situation on the markets for raw materials and primary products.

In light of the extremely positive development in the third quarter and the fact that call-offs are typically higher in Q4, the Executive Board is confirming its full-year sales and earnings guidance for 2023 with consolidated sales of between €7.4bn and €7.6bn and an operating margin of around 12%. The separately communicated sales forecast for Rhein¬metall Expal Munitions is now above €190m. The operating margin of Rheinmetall Expal Munitions is expected at above 25%.

 

09 Nov 23. HENSOLDT continues growth trajectory with significant revenue growth in core business in the third quarter of 2023.

  • Revenue at EUR 1,136m; mainly driven by significant revenue growth of 15.0% in core business
  • Adjusted EBITDA improves by 19.6% to EUR151m
  • Adjusted EBITDA margin rises to 13.3%
  • Order intake of EUR1,281m
  • Robust order backlog of EUR5,472m
  • Guidance confirmed for the 2023 financial year

The HENSOLDT Group (“HENSOLDT”) continued its positive business development in the first nine months of the 2023 financial year. During this period, the company’s revenues increased to EUR 1,136m (previous year: EUR 1,100m). Driven primarily by significant revenue growth of 15.0% in the core business, adjusted EBITDA increased by 19.6% to EUR 151m (previous year: EUR126m), while the adjusted EBITDA margin improved to 13.3% (previous year: 11.5%).

HENSOLDT yet again achieved a strong order intake of EUR1,281m (previous year: EUR1,377m). The main drivers for this were orders for TRML-4D radars and for equipping the PUMA and Leopard 2 platforms. The previous year’s high figure included several key orders for the Eurofighter (service contract C3 and Halcon program) and for equipping the F126 multi-purpose frigate.

Thomas Müller, CEO of the HENSOLDT Group, says: “The sharp rise in geopolitical tensions and conflicts has created a global polycrisis that is shaking our understanding of a rule-based world order. In the face of general uncertainty, the need and demand for electronic defence and security solutions to neutralise a wide range of air, sea, land, space and cyber space threats are increasing. In the first nine months of 2023, we have once again demonstrated that our strategic position is ideal to provide our customers with innovative, high-end defence and security solutions in these challenging times. The significant growth in our core business is a strong signal: our customers trust our reliability, innovative strength, and expertise – and above all our unwavering commitment to contribute to a safer tomorrow. We have created the necessary capacities for this in recent months and are ready to deliver.”

Christian Ladurner, CFO of the HENSOLDT Group, says: “Our solid, high-growth business performance in the first nine months of 2023 is further evidence of the successful execution of our strategy, underpinned by strong EBITDA growth and significant revenue growth in our core business. In an increasingly challenging global geopolitical environment, we will continue to provide the right solutions to meet the increasing demand for security with our innovative defence and security technologies. We are confident that we will achieve our ambitious growth targets for 2023.”

Strong order intake and significantly higher revenue in core business

Order intake in the first nine months of 2023 was again at a high level, reaching EUR 1,281 m. In the Sensors segment, this was driven primarily by orders for TRML-4D radars to support Ukraine and the Bundeswehr, including the Multifunction Self Protection System for the Bundeswehr’s PUMA infantry fighting vehicle. In the Optronics segment, the first nine months of 2023 were dominated by orders for the PUMA and Leopard 2 platforms and an order for the Norwegian Ula-class submarines.

Continued positive development in revenue, profitability and free cash flow

Compared to the previous year, revenues of the HENSOLDT Group increased by 3.2% to EUR 1,136m in the first nine months of 2023 (previous year: EUR 1,100m). This led to significant revenue growth of 15.0% in the core business. At the same time, revenue from pass-through business was significantly below the previous year’s figure. Adjusted EBITDA rose by 19.6% to EUR 151 m (previous year: EUR126m). The strong increase in adjusted EBITDA mainly resulted from an increased revenue volume, driven primarily by the core business, and a slower increase in costs in relation to the increase of revenues. At 13.3%, the adjusted EBITDA margin exceeded the prior-year level of 11.5%. Adjusted free cash flow before interest and taxes of EUR-126m was below the level of the prior-year period and mainly reflected the investments in working capital to cope with the planned volume of business in the fourth quarter of 2023 (previous year: EUR-49 m).

Guidance confirmed for 2023 financial year

In view of the positive business development in the first nine months of 2023, HENSOLDT confirms its short- and medium-term forecast and expects moderate organic revenue growth to around EUR1,850m for the 2023 financial year, in particular due to the unchanged high order backlog. With the traditionally strong fourth quarter and a number of orders expected both in domestic and international markets, the company expects a moderate year-on-year increase in order intake.

 

07 Nov 23. Kromek Group plc (“Kromek” or the “Company” or the “Group”)

Collaboration agreement with new CT technology partner

Kromek and global technology solutions provider to develop next-generation CT detector technology

Kromek Group plc (AIM: KMK), a leading developer of radiation and bio-detection technology solutions for the advanced imaging and CBRN detection segments, announces that it has entered into a collaboration agreement with a new partner to develop Cadmium Zinc Telluride (“CZT”) based detectors for photon counting computed tomography applications in the medical imaging sector.

The new blue-chip partner is a technology solutions provider to over 100,000 customers globally for a range of applications, including healthcare.

As part of the collaboration, Kromek will integrate its CZT sensors with the partner’s read-out electronics to ensure optimal computed tomography (“CT”) detection system performance. As the project progresses towards commercialisation, the Group will ensure production capability is available to support commercial demand ramp-up.

Arnab Basu, CEO of Kromek, said: “At Kromek, we have a strong track record of teaming up with leading global technology partners to advance new imaging solutions. Our CZT-based products are the enabling technology in ultra high-resolution systems. These systems provide clinicians with greater image quality that leads to earlier diagnosis, better patient outcomes and ultimately saves lives. We look forward to working with this new blue-chip partner to make another important advancement in medical imaging technology.”

 

06 Nov 23. Signia Aerospace Acquires Meeker Aviation and Airfilm Camera Systems. Signia Aerospace, a portfolio company of Arcline Investment Management (“Arcline”), today announced the acquisition of Meeker Aviation and Airfilm Camera Systems (“Meeker Aviation”).

Based in California, Meeker Aviation is a leading international supplier of aircraft external payload mounts for Electro-Optical and Infrared (EO/IR) sensors, Light Detection and Ranging (LiDAR) laser scanners, searchlights, camera systems, and speaker systems. Meeker Aviation also manufactures a popular line of door hinge and pin kits. With an installed base of more than 10,000 units in service, Meeker Aviation’s systems are used by a wide range of customers across military, utility, law enforcement, and production markets.

“Meeker Aviation’s position as a leading designer and manufacturer of highly engineered mounts used in critical aerospace missions makes it an excellent addition to the Signia Aerospace portfolio,” said Norman Jordan, Chief Executive Officer of Signia Aerospace. “As the latest addition to our Mission Systems business segment, Meeker Aviation will enable us to provide an expanded range of mission-specific equipment to the global aerospace community.”

Cal Meeker, Meeker Aviation’s president, will continue in his day-to-day role leading growth, development, and operations at the company.

“Signia is an ideal partner for us,” Meeker said. “This acquisition ensures Meeker Aviation will have the resources it needs to accelerate product development and keep up with customer demand. We look forward to continuing to grow and thrive as part of Signia’s Mission Systems team.”

Cory VanBuskirk, President of Signia Mission Systems, added, “Meeker Aviation’s stellar reputation in the industry for both product quality and dedication to customer service are a perfect fit for Signia Mission Systems.”

About Signia Aerospace

Signia Aerospace is a global, integrated provider of high-performance systems and specialized components for the aerospace industry. Signia currently operates two complementary business segments: Thermal Management (key brands include ACE Thermal Systems and Mezzo Technologies) and Mission Systems (key brands include Onboard Systems International, Lifesaving Systems, and Meeker Aviation). The Signia brands are leaders in their respective markets and provide a compelling value proposition to both aerospace and defense OEMs and end-users. For more information visit www.signiaaerospace.com.

About Meeker Aviation

Founded in 1995, Meeker Aviation is a world leader in the design and manufacture of aircraft external payload mounts for Electro-Optical and Infrared (EO/IR) sensors, cinematography camera systems, searchlights, Light Detection and Ranging (LiDAR) laser scanners, and speaker systems. In addition to their equipment mounts, Meeker also manufactures a popular line of door hinge and pin kits for aircraft. With over 10,000 STC’d products in service, Meeker continues to develop new products and support existing designs worldwide. For more information visit www.meekeraviation.com.

About Arcline Investment Management

Arcline is a growth-oriented private equity firm with $8.9bn in cumulative capital commitments. Arcline seeks to invest in technology-driven, meaningful to the world industrial businesses that enable a better future. For more information visit www.arcline.com.

(Source: PR Newswire)

 

06 Nov 23. Mitsubishi Heavy expects record defence orders as Japan boosts military. Mitsubishi Heavy Industries (7011.T) has doubled its forecast for defence orders to a record 1.6trn yen ($10.7bn) in the current financial year, it said on Monday, as Japan expands its military by the most since World War Two.

Tokyo has said it aims to double defence spending to 2% of gross domestic product by 2027 in response to an increasingly assertive China and an unpredictable North Korea.

The country’s top defence contractor Mitsubishi Heavy makes missiles, tanks, submarines and other defence equipment, and military work accounts for around a tenth of its overall revenue.

The revision of the internal projection for defence orders compared to a range of 800 bn to 850bn yen it had previously expected, a company spokesperson told Reuters.

The company on Monday also lifted estimates for total orders for the full year by around a fifth, to 5.6trn yen.

After the company released its results for the six months to September, Mitsubishi Heavy CEO Seiji Izumisawa told reporters it had “a rather conservative estimate” and had seen bigger-than-expected orders for aircraft, defence and space.

“It’s reasonable for us to revise up estimates assuming orders continue to come in the second half of the year as usual,” he said.

The company also said its energy business expected orders to be 200 bn yen more than previously estimated for the full year to March.

(Source: Reuters)

 

06 Nov 23. EDGE Group acquires 52% share in Swiss VTOL manufacturer.

The Emirati defence conglomerate rides the AI wave, having its portfolio of autonomous vehicles work alongside ANAVIA’s VTOL systems.

EDGE Group announced that it has purchased a 52% share in the Swiss VTOL systems manufacturer ANAVIA on 6 November 2023.

The European company produces a range of industry-leading unmanned helicopters for various mission profiles such as surveillance and reconnaissance, inspection, and mapping and cargo, which can be adapted to EDGE’s complementary portfolio of air, land, and maritime capabilities.

The Group is placing a major focus on the development of autonomous systems, a decision that complements GlobalData’s company filings intelligence. The intelligence consultancy indicates that artificial intelligence (AI) is the leading theme in the defence and aerospace industry with 29 mentions so far this year.

AI is closely followed by robotics (25 mentions) and drones (17), while electric aircraft (8) also makes the top ten themes mentioned in company filings this year.

“The acquisition of a majority share in ANAVIA is an important step in EDGE’s strategy of bolstering its advanced autonomous aerial vehicle capabilities as it rapidly expands its portfolio of multi-domain systems,” Mansour AlMulla, Managing Director & CEO of EDGE Group stated.

ANAVIA employs a highly-skilled team of experts in the autonomous aircraft domain, covering areas such as composite, mechatronics, aircraft maintenance, flight testing and software engineering.

“It will also allow ANAVIA to take advantage of EDGE’s scale and the opportunities this presents for further innovation across relevant areas of the group,” AlMulla added.

EDGE has begun to consolidate industry in South America, particularly in Brazil, where the group has made company share purchases and set-up teaming arrangements with Government institutions. There, the group is embarking on the development and manufacture of next-generation smart weapons.

Increased demand for Unmanned Aerial System (UAS)

The global military UAS market was valued at $7.9bn in 2022 and it will continue to grow at a compound annual growth rate of 4.2% to reach a value of $12bn by 2032, according to GlobalData intelligence.

Modernisation drives initiated by leading countries are replacing enduring fleets, developing domestic UAS platform programmes, and implementing network-centric warfare (NCW) stratagems.

The latter is a factor to watch out for, as defence companies such as the American UAS manufacturer have recently received $2.7bn in a series F funding round to support the research and development of its ongoing AI pilot: ‘Hivemind’.

Hivemind enables teams of intelligent aircraft to operate autonomously in high-threat environments at the edge, without the need for remote operators, command inputs or a global positioning system.

When AlMulla states that the deal will enable EDGE “to complement our existing range of autonomous aerial systems, and [ANAVIA’s] established supply chains, to become a market leader in this field,” the group may be looking to secure a NCW pilot that works alongside other autonomous vehicles in the EGDE Group portfolio. (Source: naval-technology.com)

 

06 Nov 23. Embraer Reports Results.

HIGHLIGHTS

Embraer delivered 43 jets in the third quarter, of which 15 commercial aircraft and 28 executive jets (19 light and 9 mid-size). The total number of deliveries represent an increase of 30% compared to 3Q22 and an increase of 33% Year to Date (YTD) from 105 versus 79 aircraft.

  • Revenues reached US$ 1,284 m in the quarter (38% higher than 3Q22 and equal to 2Q23). YTD revenues represent an increase of 29% compared to the same period last year. All Business Units had higher revenues and volumes Year over Year (YoY) and YTD, with the main highlight being Commercial Aviation representing a strong growth of 68% YoY and 52% YTD.
  • Adjusted EBIT of 7.8% compared to 5.4% in 3Q22 due to higher volumes in all business units.
  • Firm order backlog ended 3Q23 at US$17.8bn, the highest level in one year, driven by higher sales in Commercial Aviation. Commercial Aviation backlog rose from US$8bn to US$ 8.6bn compared to 2Q23, with 42 aircraft sold in 2023. Services & Support reached US$ 2.8 bn in the quarter, the highest volume ever recorded in the business unit. Executive Aviation strong backlog at US$4.3bn highlights it sustained demand backlog.
  • Adjusted Free Cash Flow w/o EVE (FCF) in 3Q23 of US$ 44.0m pointing to a strong cash generation in the 4Q23 due to higher deliveries.
  • Successful conclusion of Liability Management, extending the average loan maturity to 4.8 years.
  • Operational and financial guidance for 2023 remains unchanged.

(B3: EMBR3, NYSE: ERJ). 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 September 30, 2023 (3Q23), September 30, 2022 (3Q22), and June 30, 2023 (2Q23), are derived from the unaudited financial statements, except annual financial data and where otherwise stated.

REVENUE AND GROSS MARGIN

Consolidated revenue of US$1,284m in 3Q23 represented an increase of 38% YoY mainly explained by Commercial Aviation with 68% increase, while Defense rose by 40%, 25% for Executive and 24% for Services.

Comparing January to September of 2022 to the same period of 2023, total revenue rose 29%. Commercial Aviation represented the most expressive increase with 52% variance, followed by Executive Aviation with 28%, Services & Support and Defense with 16% and 15%, respectively.

Commercial Aviation reported revenue growth of 68% YoY to US$ 424.9 m due to the higher number of deliveries, with reported gross margin increase from 5.4% in 3Q22 to 6.5% in 3Q23.

Executive Aviation revenues were US$339.9m, 25% higher than 3Q22 with an increase in volumes and deliveries mix. As a result, gross margin increased from 19.7% to 21.8% YoY.

Defense & Security revenue of US$133.1m, 40% higher YoY. Reported gross margin of 16.1% in 3Q22 versus 26.0% in 3Q23 due to baseline adjustments of current contracts and physical progress, according to its percentage of completion evolution.

Services & Support revenue of US$365.8m, registering growth for 2 quarters in a row, representing a YoY increase of 24%. Reported gross margin of 24.9% lower than 31.0% reported in 3Q22 due to different mix of services.

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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

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