BATTLESPACE Updates

   +44 (0)77689 54766
   

BUSINESS NEWS

by

Sponsored by SPX Communication Technologies (TCI & ECS)

 

www.tcibr.com

 

www.enterprisecontrol.co.uk

 

———————————————————————————————————————————————————————————————————————————————————————————————————————————

15 Aug 24. LeaseWorks and Portside Join Forces. LeaseWorks®, a leading provider of innovative software and digital solutions for the aviation industry, announced that it had been acquired by Portside, a leading innovator in technology and software solutions for business and government aviation.

“Our customers’ view of profitability will be greatly enhanced with the full visibility of aircraft lifecycle management, and we are excited to have LeaseWorks in the Portside family.”

Post this

The acquisition extends Portside’s suite of integrated, cloud-based software solutions for business aviation operators with LeaseWorks’ cloud-based products and services, including the AerisTM suite of software solutions, designed specifically for aircraft lessors and airlines. The transaction also signifies Portside’s first venture into the aircraft leasing space.

“Portside shares LeaseWorks’ vision for the aircraft leasing market – to build a software company of scale that will be a transformational force in the industry,” commented Haseem Vazhayil, LeaseWorks CEO. “With Portside’s investment, we’ll be able to further enhance our market-leading position as an enterprise software powerhouse, meeting the diverse needs of clients across the full spectrum of the aviation community.”

”LeaseWorks’ cutting-edge technologies and best-in-class customer service for aircraft lessors significantly advances our goal of providing a single system of record to aircraft owners and operators,” said Alek Vernitsky, Portside CEO. “Our customers’ view of profitability will be greatly enhanced with the full visibility of aircraft lifecycle management, and we are excited to have LeaseWorks in the Portside family.”

Portside is backed by Vista Equity and Insight Venture Partners, two preeminent U.S. private equity firms that specialize in software investing. The backing of these institutions is expected to generate significant opportunities to scale LeaseWorks’ business, enabling both organic and inorganic investments as well as benefiting the company’s operations through the added expertise and support from Portside.

“This transaction is a testament to the hard work, dedication, and trust our team has been privileged to bring over the years to both our customers and the industry. Together with Portside, we will continue to deliver the utmost dedication, unmatched expertise, and highest quality of service to our customers, while leveraging growth opportunities to scale mutual operations,” concluded Vazhayil.

About LeaseWorks

LeaseWorks® provides cloud-based products and services to the aviation leasing community, with solutions for both lessors and airlines. Aeris MATCH™ helps lessors more quickly and effectively deploy their aviation assets with airlines around the globe. Aeris ASSET™ allows both lessors and airlines to manage the intricate details of aviation leases. These are the first two of a suite of products that will constitute a full-life-cycle portal for managing leased aviation assets. www.leaseworks.aero

About Portside

Portside, Inc. is a premier provider of modern software solutions for the aviation industry. Portside’s cloud-based suite of products is designed to support all aspects of flight operations, including scheduling and record keeping (Avianis, Takeflite, BART and PFM product lines), safety management (Baldwin), fleet and crew optimization (Portside Optimizer), data sharing, reporting and analytics (Portside Owner Portal / Budget & Planning Dashboard), crew recruiting (Staffing Marketplace), and trip planning (Portside Trip Assist). Portside supports over 1,000 customers in 40+ countries, including passenger and cargo airlines, aircraft lessors, operators of business aircraft and helicopters, medevac, industrial and government fleets, as well as fractional ownership programs. www.portside.aero. (Source: BUSINESS WIRE)

 

15 Aug 24. Lockheed Martin [NYSE: LMT] today announced the signing of a definitive agreement to acquire Terran Orbital [NYSE: LLAP], a global leader of satellite-based solutions primarily supporting the aerospace and defense industries.

Terran Orbital brings a high throughput, robotic manufacturing capacity and high-performing modular space vehicle designs. Combined with Lockheed Martin’s record of performance and innovation, this transaction will usher in an even broader range of capabilities and value for customers. Lockheed Martin uses Terran Orbital’s satellites for its work, most notably with the Space Development Agency’s Transport and Tracking Layer programs, and in several of its self-funded technology demonstrations.

“We’ve worked with Terran Orbital for more than seven years on a variety of successful missions,” said Robert Lightfoot, president, Lockheed Martin Space. “Their capabilities, talent and business momentum align with Lockheed Martin Space’s strategic plans – and we’re looking forward to welcoming them to our team. Our customers require advanced technology and even faster product development, and that’s what we can achieve together.”

The transaction stands to pave a path for further advancement, as Lockheed Martin continues to invest in technology, people, and capacity to support future customer needs.

“This transaction combines our strengths and expertise,” said Marc Bell, chairman, CEO, and co-founder of Terran Orbital. “This move will open new opportunities for growth and innovation, and we couldn’t be more excited about the future. Access to Lockheed Martin’s incredible engineers and world class facilities will only accelerate our business plan to provide low-cost, high-value solutions to our ever-growing customer base.”

Transaction Details

The enterprise value of the transaction is approximately $450 m. Lockheed Martin will acquire Terran Orbital for $0.25 in cash for each outstanding share of common stock and retire its existing debt. This transaction also provides for Lockheed Martin and other current Terran Orbital creditors establishing a new, $30m working capital facility that has been put in place as of signing.

The transaction is expected to close in fourth quarter of 2024 and is subject to the satisfaction of customary closing conditions, including regulatory and Terran Orbital stockholder approvals. Upon closing, Terran Orbital will remain a commercial merchant supplier to industry.

Proven Spacecraft Portfolio and Technology

Terran Orbital has a track record of supporting more than 80 missions over the past decade for government and commercial customers with complex mission requirements, from low earth orbit to the Moon and beyond. As of today, Lockheed Martin is Terran Orbital’s largest customer. This longstanding working relationship between the companies underpins a strong cultural alignment and ability to recognize synergies between the two businesses.

Terran Orbital joined the Lockheed Martin Ventures (LM Ventures) portfolio – a fund that makes investments in technology innovations to drive growth in existing, adjacent and new segments for the company – with an initial investment in 2017. LM Ventures has since made two additional investments in Terran Orbital in 2020 and 2022. This marks the first LM Ventures company that Lockheed Martin has sought to acquire since founding the fund in 2007.

 

15 Aug 24. Rating Action: Moody’s Ratings upgrades Rolls Royce to Baa3 from Ba1 on continued strong financial performance; maintains positive outlook

“Rolls-Royce’s return to investment grade ratings reflects the substantial improvement in its profitability, cash flows and financial leverage, underpinned by strong demand and the very successful execution of its transformation programme so far, leading to sustainably better performance” says Frederic Duranson, a Moody’s Ratings Vice President – Senior Analyst and lead analyst for Rolls-Royce. “The company’s conservative financial policy, including excellent liquidity, also supports its investment grade rating.” Mr Duranson adds.

 

15 Aug 24. Gooch & Housego warns delivery delays will hit profits.

Photonics specialist Gooch & Housego (GHH) warned that profits for the year to September will be lower than expected due to “supplier and delivery delays”.

The company had said at the half-year stage that trading would be “more heavily weighted” to the second half due to destocking by industrial and medical laser customers. Although output has picked up, some of its expected sales are likely to creep into next year and adjusted pre-tax profit will likely be £1.5mn lower than anticipated.

Investec analysts cut their adjusted pre-tax profit forecast to £8mn and the shares fell by 3 per cent. (Source: Investors Chronicle)

 

14 Aug 24. Global high-assurance cybersecurity leader, Everfox, formerly Forcepoint Federal, today announced the completed acquisition of Garrison Technology Ltd. The acquisition integrates Garrison’s hardware-enforced security (hardsec) and software capabilities into Everfox’s software portfolio of cross domain, threat protection and insider risk solutions to deliver comprehensive cybersecurity to enterprise customers in government and regulated industries.

“Garrison’s solutions are highly complementary to our existing portfolio and have immense value for customers. These synergies and our track record of collaboration opened the door for a more permanent partnership,” said Sean Berg, CEO of Everfox. “This acquisition reinforces our dedication to securing the world’s most critical organizations and our ongoing commitment to ensuring that the Everfox portfolio is as comprehensive, secure and impactful as it can be.”

As the cyber threat landscape continues to evolve, global governments, critical infrastructure organizations and regulated industries are reinforcing their approach to cybersecurity. The National Institute of Standards and Technology (NIST) and other major cybersecurity entities recognize the benefits of a hardsec approach to security. Hardsec combines the reliable, physical security of hardware with the flexibility of software to deliver layered security.

Pairing Everfox’s cross domain solutions with Garrison’s field-programmable gate array (FPGA) security technology offers a strong example of how the companies’ combined capabilities can deliver the nation-state level security necessary for governments and regulated industries. Garrison’s recently announced Trust Qualified Browsing (TQB) offering will apply the hardware-enforced cybersecurity customers know and trust to remote web browsing, removing risks associated with malicious web code.

“For nearly a decade, we’ve worked to build hardsec security solutions that integrate seamlessly with existing software offerings,” said David Garfield, co-founder and CEO of Garrison Technology Ltd. “By layering our high-end isolation solutions on top of the Everfox portfolio, our customers will stay one step ahead of their adversaries.”

“As Everfox continues to carve out its place as an industry trailblazer, strategic acquisitions such as this will not only enable the company to grow its robust product portfolio, but will also expand its global footprint,” said Tim Millikin, partner at TPG. “The combination of Everfox’s offerings with Garrison’s hardsec and software solutions will bolster global cyber resilience for the world’s most critical organizations.”

Everfox is headquartered in Herndon, Virginia, with offices also located in Champaign, Illinois; Richardson, Texas; Salt Lake City, Utah; as well as London and Malvern, United Kingdom.

Citi served as financial advisor to Everfox, and Piper Sandler served as financial advisor to Garrison.

 

14 Aug 24. Air Industries Group Reports Three and Six Months 2024 Financial Results and Reaffirms Fiscal 2024 Business Outlook. Air Industries Group (“Air Industries”) (NYSE American: AIRI), a leading manufacturer of precision components and assemblies for large aerospace and defense prime contractors, today reported earnings results for the second quarter and six months 2024 along with an update of its 2024 business outlook.

“Our second quarter reflected strength across our business,” said Lou Melluzzo, CEO of Air Industries Group. “For the three months, revenues increased by 2.8% compared to the prior year, but gross profit and gross margin on sales improved dramatically. Gross profit for the second quarter increased by $474,000 or nearly 22% compared to 2023. With two quarters under our belt, 2024 is on track to be a year of significant growth.

“Net income for the second quarter was $298,000, or $0.09 a share, an improvement of nearly $700,000 from a loss of ($0.12) per share in 2023.

“Adjusted EBITDA (as defined below) for the three months was $1,413,000, an increase of $452,000, or more than 47% compared to 2023.”

Six Months 2024 Financial Results

Lou Melluzzo, CEO of Air Industries Group continued, “For the six months, revenues increased by 7.3% compared to the prior year, and the increase in gross profit outpaced the growth in sales. Gross profit for the six months increased by nearly $500,000, or 12.3% compared to 2023.

“Operating Income for the six months was $493,000 compared to a loss in 2023.

“Net loss for the first half of 2024 was ($408,000) an improvement of more than $600,000 compared to 2023.

“Adjusted EBITDA (as defined below) for the six months was $1,775,000 an increase of $236,000 or more than 15% compared to 2023”.

2024 Business Outlook and Items of Note:

  • Although it remains difficult to predict the timing of orders, raw materials, and delivery times for finished products, the Company reaffirms a target of net sales for fiscal 2024 to be at least $50.0 m, with Adjusted EBITDA in 2024 being significantly better than in 2023. Revenues for the second half of 2024 are expected to equal or exceed the amounts achieved in the first half of 2024.
  • Backlog, which represents the value of all undelivered funded orders received, increased from March 31, 2024 to just over $100 m as of June 30, 2024.
  • The book-to-bill ratio, which is bookings divided by net sales was greater than 1.20 to 1.00 for the trailing twelve months ended June 30, 2024.
  • We continue to invest to increase production efficiency, and to expand our manufacturing capabilities. To this end, we have completed the rebuild and modernization of three major pieces of equipment at a cost of approximately $1,000,000.
  • As of June 30, 2024, total indebtedness was $24,939,000, increasing $1,629,000 or 7.0% from December 31, 2023. The increase resulted from:

o An increase of $507,000 for a bank loan covering the installation of solar panels at Sterling Engineering.

o Total increases of $898,000 in the Webster Bank term and revolving loans coincident with the recent amendment of June 3, 2024.

o A new capital lease for $225,000 for a new Coordinate Measuring Machine (CMM).

Air Industries is in compliance with all Webster Bank covenants as of June 30, 2024 and expects to remain in compliance for the balance of the year. (Source: BUSINESS WIRE)

 

14 Aug 24. M-tron Industries, Inc. Reports Strong Second Quarter 2024 Results with Further Margin Expansion. M-tron Industries, Inc. (NYSE American: MPTI) (the “Company” or “MPTI”), a designer and manufacturer of highly-engineered electronic components used to control the frequency or timing of signals in electronic circuits, announced strong financial results for the three and six months ended June 30, 2024 with net income increasing 36.6% to $1,744,000, or $0.63 per diluted share, in Q2 2024 compared to $1,277,000, or $0.47 per diluted share, in Q2 2023.

“We delivered a solid performance in the quarter, with significant improvements in our financial results”

Post this

MPTI’s Chief Executive Officer, Michael J. Ferrantino, said, “Our strategy is working; our business has been trending up since the Company’s listing in 2022, and are pleased to report results that continue to be very positive. We expect revenues, new orders and earnings to remain strong and trend higher. In addition, our order backlog trend since listing is positive and anticipated to continue to grow.”

The Company will hold an Investor call on Thursday, August 15, 2024, to discuss the Company’s second quarter 2024 results and to respond to investor questions (see details below). An archive of the call will be available on MPTI’s website at https://ir.mtronpti.com/events-and-presentations.

Strong Results from Operations Continue Since 2022 Listing

Strategic investments in the defense sector, several new products moving into volume production, and operating efficiencies have resulted in the Company achieving significant improvements since its IPO in October 2022. Importantly, the company made a significant investment in its employees with a broad option incentive grant earlier this year aligning the strength of its platform with its team.

Since MPTI’s October 2022 IPO, the business has grown significantly as highlighted below:

  • Revenues increased 67.2% to $11,808,000 in Q2 2024 compared to $7,064,000 in Q2 2022
  • Net income increased 258.8% to $1,744,000 in Q2 2024 compared to $486,000 in Q2 2022
  • Gross margin improved to 46.6% in Q2 2024 compared to 37.5% in Q2 2022
  • Adjusted EBITDA increased 200.0% to $2,523,000 in Q2 2024 compared to $841,000 in Q2 2022

The opportunities with new engineering and designs continues to drive future growth, while manufacturing throughput improvement is helping increase margin expansion. Further, we are pleased to have initiated a stock option program earlier this year allowing the professionals at MPTI an opportunity to share in the business’s growth.

Mr. Ferrantino added, “As we report strong results, our team’s pursuit of excellence accelerates as reflected in the value creation since IPO. This continued growth and success are a testament to our dedicated professional staff and their unwavering commitment to delivering exceptional value to our customers. We remain steadfast in our mission to innovate, adapt, and lead in our industry, driving sustainable growth and creating long-term value for all stakeholders.”

“MPTI is a uniquely positioned American-made Defense product platform and presents an improved outlook for the business moving forward,” continued Mr. Ferrantino.

Second Quarter 2024

Net income was $1,744,000, or $0.63 per diluted share, for the three months ended June 30, 2024 compared with $1,277,000, or $0.47 per diluted share, for the three months ended June 30, 2023. The increase was primarily due to continued strong defense program product and solution shipments partially offset by higher Manufacturing cost of sales consistent with the growth in revenues as well as higher Engineering, selling and administrative expenses from increased investment in research and development, higher sales commissions related to an increase in revenues, and an increase in administrative and corporate expenses consistent with the overall growth in the business.

Gross margin was 46.6% for the three months ended June 30, 2024 compared with 41.6% for the three months ended June 30, 2023. The increase was primarily due to higher revenues, improved production efficiencies due to previous investments, and an improved product mix to higher margin products.

Adjusted EBITDA was $2,523,000, or $0.91 per diluted share, for the three months ended June 30, 2024 compared with $1,931,000, or $0.71 per diluted share, for the three months ended June 30, 2023. The increase was primarily due to increased gross margins; continued containment of operating expenses other than strategic investments in research and development, resulting in higher income before taxes; higher depreciation; and higher stock-based compensation partially offset by higher interest income.

Results in Second Quarter 2024 and Since Second Quarter 2022

  • Revenues increased 16.4% to $11,808,000 in Q2 2024 compared to $10,140,000 in Q2 2023, driven by strong defense program shipments, and increased 67.2% from $7,064,000 in Q2 2022 as the mix shifts developed
  • Net income increased 36.6% to $1,744,000, or $0.63 per diluted share, in Q2 2024 compared to $1,277,000, or $0.47 per diluted share, in Q2 2023 and increased 258.8% from $486,000 in Q2 2022
  • Gross margin improved to 46.6% in Q2 2024, an increase of 12.0% from Q2 2023, and an increase of 24.3% from Q2 2022, reflecting improved production efficiencies and product mix
  • Adjusted EBITDA increased 30.7% to $2,523,000 in Q2 2024 compared to $1,931,000 in Q2 2023 and increased 200.0% from $841,000 in Q2 2022

Improved 2024 Outlook

With the continued momentum in defense-related sales, and the acceleration in production and shipments during the first half of 2024, MPTI management has raised the outlook for fiscal year 2024, increasing revenues to a range of $46.0m to $48.0m from a previous range of $43.0m to $45.0m. MPTI has good visibility for the remaining two quarters of 2024 and expects EBITDA to continue to be in the 19% to 21% range.

The foregoing statements represent the Company’s current estimates of MPTI’s 2024 consolidated revenues as of the date of this release. Actual results may differ materially depending on a number of factors. Investors are urged to read the Cautionary Note Concerning Forward Looking Statements included in this release. Management does not assume any obligation to these estimates.

Fiscal Year to Date 2024

Net income was $3,230,000, or $1.16 per diluted share, for the six months ended June 30, 2024 compared with $1,830,000, or $0.68 per diluted share, for the six months ended June 30, 2023. The increase was primarily due to higher sales related to strong defense program product shipments partially offset by higher Manufacturing cost of sales consistent with the growth in revenues as well as higher Engineering, selling and administrative expenses related to increased investment in research and development, higher sales commissions related to an increase in revenues, and an increase in administrative and corporate expenses consistent with the overall growth in the business.

Gross margin was 44.7% for the six months ended June 30, 2024 compared with 38.0% for the six months ended June 30, 2023. The increase was primarily due to higher revenues, improved production efficiencies due to previous investments, and an improved product mix to higher margin products.

Adjusted EBITDA was $4,785,000, or $1.72 per diluted share, for the six months ended June 30, 2024 compared with $2,959,000, or $1.09 per diluted share, for the six months ended June 30, 2023. The increase was primarily due to increased gross margins; a continued containment of operating expenses other than strategic investments in research and development, resulting higher income before income taxes; higher depreciation; and higher stock-based compensation partially offset by higher interest income.

Backlog

Backlog was $45,322,000 as of June 30, 2024 compared to $47,831,000 as of December 31, 2023 and $51,591,000 as of June 30, 2023. The decrease in Backlog from December 31, 2023 reflects the increase in revenues along with the variability of our order intake due to the size and timing of large program-related orders.

Strategic Direction Continues

“We delivered a solid performance in the quarter, with significant improvements in our financial results,” said Bel Lazar, Chairman. “Our teams continue to execute well, driving both top-line growth and margin expansion across our businesses. Our commitment to achieving our Investor Day targets remains strong, with clear progress in our new products, pricing and efficiency initiatives. With this momentum we are confident in our continued success and growth.”

Mr. Lazar continued regarding the Company’s strategy, “Our organic strategy continues to be providing complex, integrated assemblies. This will begin to surface in revenue growth. The dollar value of some of these projects can be substantial.

“As for our external strategy, we have increased our acquisition bandwidth to include companies that are inside and outside of our current space. We will look outside of our sub sector for undervalued companies much like ours where we can rapidly drive top and bottom-line growth. Our motivation continues to be increasing shareholder value as quickly as we can,” added Mr. Lazar.

We see the ongoing development along several new and exciting growth verticals for the period ahead such as:

Space and Satellite: MPTI has over 125 design wins across satellite platforms and manned spacecraft. With expertise supporting LEO, MEO and GEO applications, the Company has a well-established team and a proven track record to meet demanding space requirements. With the evolving need for high-power space-level transmitters, high-power handling space-level RF components and sub-assemblies are instrumental for mission success. The performance of these devices used in orbiting satellites are significantly different compared to how they perform at sea level due to phenomena like multipaction. Some space-level applications require both continuous operation performance in outer space as well as performance during the assent to space while undergoing a pressure change.

Radar: Our latest line of timing solutions designed to meet the stringent requirements of modern radar applications is expect to further growth. For example, our e-Vibe™ series of Electronically Compensated OCXOs are designed to maintain exceptional phase-noise under dynamic conditions, meeting the rigorous demands of radar systems on the move or experiencing shock or vibration. Our radar integrated timing solutions: custom timing solutions integrating precision timing sources with additional components with maximum reliability and performance. Our systems offer excellent Phase-noise: output frequencies with extremely low phase-noise, guaranteeing reliable operation over extended periods, temperatures, and environments. Also, our systems offer Ruggedized Design and Flexible Configurations for durability and longevity, with both standard and custom output frequencies.

Electronic Warfare: As demand increased for frequencies above 2 GHz, we developed the ability to design and manufacture planar filters utilizing interdigital, combline, hairpin, edge coupled and end coupled topologies. MPTI introduced our new Planar Filter Product Line to complement our over 59 years MPTI of designing and manufacturing various topology filters for our Industrial, Commercial, Space, Aerospace and Defense customers. With Extremely Small Size and Low Height and Stable Over a Wide Temperature Range, MPTI’s planar filters support the demands of rugged, high-performance applications needs growing with the development of Electronic Warfare. (Source: BUSINESS WIRE)

 

14 Aug 24. Redwire to Acquire Spacecraft Developer Hera Systems. Redwire Corporation (NYSE: RDW), a leader in space infrastructure for the next generation space economy, today announced that it has signed a definitive agreement to acquire Hera Systems, Inc., a spacecraft developer focused on specialized missions for national security space customers. With the addition of Hera Systems’ cutting-edge platform, Redwire expects to strengthen its spacecraft portfolio and be well-equipped to support specialized National Security Space missions in geostationary orbit (GEO).

Founded in 2013, Hera Systems is a privately held company headquartered in San Jose, California that focuses on developing a new class of high-performance spacecraft to support the evolving requirements for national security missions operating in contested space. Hera Systems’ advanced platform incorporates cyber-secure communications, resilient power systems, highly accurate pointing, extensive maneuverability and massive on-board computing power supporting mission- and payload-specific machine learning. In 2022, Hera Systems was contracted by Orion Space Solutions to develop three satellites for U.S. Space Force’s Tetra-5 mission—an on-orbit servicing demonstration in GEO.

Redwire has significantly increased its national security space business, recently announcing it was awarded a prime contract to develop and demonstrate a Very Low Earth Orbit (VLEO) spacecraft for DARPA’s Otter program. Redwire continues to support the warfighter as an antenna supplier for the Space Development Agency’s Transport Layer program dating back to Tranche 0 in 2020.

“Hera Systems’ platform is highly complementary with Redwire’s suite of national security space solutions,” said Peter Cannito, Chairman and CEO of Redwire. “Similar to our focus on VLEO platforms, we see increasing opportunities to unlock and deliver new solutions in MEO, GEO and other domains to support the warfighter and address critical needs in National Security Space. This transaction fits squarely within our growth strategy by adding significant capabilities to move up the value chain in select areas of emerging hybrid architectures.”

Hera Systems has experienced profitable topline growth, and for the year ended December 31, 2023, Hera recorded $15m of revenue. Redwire will finance this acquisition with balance sheet liquidity and expects Hera Systems to add meaningfully to future growth and profitability. As part of this acquisition, which is expected to close in the third quarter, Redwire is adjusting its full-year 2024 guidance from $300m in revenue to $310m in revenue.

GH Partners LLC is serving as financial advisor and Hogan Lovells is serving as legal advisor to Redwire.

About Redwire

Redwire Corporation (NYSE:RDW) is a global space infrastructure and innovation company enabling civil, commercial, and national security programs. Redwire’s proven and reliable capabilities include avionics, sensors, power solutions, critical structures, mechanisms, radio frequency systems, platforms, missions, and microgravity payloads. Redwire combines decades of flight heritage and proven experience with an agile and innovative culture. Redwire’s approximately 700 employees working from 14 facilities located throughout the United States and Europe are committed to building a bold future in space for humanity, pushing the envelope of discovery and science while creating a better world on Earth. For more information, please visit redwirespace.com (Source: BUSINESS WIRE)

 

14 Aug 24. Tank gearbox maker Renk slips as largest business disappoints.

  • Summary
  • Q2 core profit at Vehicle Mobility Solutions misses forecast
  • Company sees FY revenues, core profit at top end of range
  • Shares fall as much as 6.8%

Shares in German tank gearbox maker Renk (R3NK.DE) fell as much as 6.8% on Tuesday after its largest business missed profit expectations, overshadowing a strong performance elsewhere.

European defence companies including Renk are seeing a boom in demand as Western nations buy supplies to help Ukraine fight Russia’s invasion and strengthen their own capabilities.

Renk, which has been revamping operations at its Augsburg plant to meet increased demand, reported a record order intake of 419m euros ($458m) in the second quarter, beating analysts’ average forecast of 376m euros in a Vara poll.

However, core profit at its Vehicle Mobility Solutions (VMS) business, whose products are used by over 70 militaries worldwide, came in at 26m euros in the quarter, missing analysts’ average forecast of 28.3m.

“The rest is fine, but the focus was really on this division”, said ODDO BHF analyst Yan Derocles.

“I think most investors were maybe expecting something better because management has been discussing the past few months’ progress they have seen in Augsburg.”

CEO Susanne Wiegand told Reuters in May that Renk was hiring 20 to 30 people per month at the plant.

Renk, which makes the transmission used in the Leopard 2 tank that is produced by KNDS, also said it expected revenue and core profit – or adjusted earnings before interest and taxes – for the year to be at the upper end of its forecast ranges.

It has forecast 1.0-1.1bn euros of revenues and core profit of 160-190m euros.

The company also increased its mid-term annual revenue growth target to about 15% from about 10%.

Renk’s shares, which were floated at 15 euros apiece in February, were last down 2.6% at 24.975 euros. ($1 = 0.9149 euros) (Source: Reuters)

 

13 Aug 24. Quantum Reports Fiscal First Quarter 2025 Financial Results. Quantum Corporation (Nasdaq: QMCO) (“Quantum” or the “Company”), a leader in solutions for AI and unstructured data, announced today financial results for its fiscal first quarter 2025 ended June 30, 2024.

Fiscal First Quarter 2025 Financial Summary

  • Revenue was $71.3m
  • GAAP gross profit was $26.1m, or 36.6% of revenue
  • GAAP net loss was $20.8m, or ($0.22) per share
  • Subscription ARR was up 29% year-over-year at $18.8m
  • Adjusted non-GAAP net loss was $8.4m, or ($0.09) per share
  • Adjusted EBITDA was ($3.1)m

“Results for the quarter were largely in-line with our expectations, reflecting further rotation of our business toward our long-term initiatives,” stated Jamie Lerner, Chairman and CEO of Quantum. “We are also seeing improving traction for Myriad and ActiveScale products. However, during the quarter we experienced a temporary headwind to gross margin caused by product mix and supply constraints of certain hardware that prevented us from shipping a portion of our higher margin deals. This also resulted in an increase to our current order backlog to above normal levels.”

“As part of our ongoing strategic and financial initiatives, we have reached an agreement with our current lenders that significantly improves our liquidity, allows us to take action on improving our operational initiatives and focus on driving Myriad, ActiveScale and the rest of our businesses to the next level. With this newly restructured financing in place, we have improved our overall capital structure and balance sheet. Additionally, we continue to maintain strong cost and discretionary spending controls as we execute toward profitable growth.”

“We are fully dedicated to executing on our business initiatives toward achieving sustainable operating performance that is driven by tangible proof points, including accelerated growth of new products, divestment of non-core products and assets, and restructuring our organization to become a more focused and operationally efficient business.”

Fiscal First Quarter 2025 vs. Prior Year Quarter

Revenue for the fiscal first quarter of 2025 was $71.3m, compared to $92.5 m in the fiscal first quarter of 2024, primarily reflecting lower revenue contribution from hyperscale customers combined with lower tape media and royalty business. GAAP gross profit in the first quarter of 2025 was $26.1m, or 36.6% of revenue, compared to $35.6m, or 38.5% of revenue, in the prior fiscal year quarter. Non-GAAP gross profit in the first quarter 2025 was $26.3m, or 36.9% of revenue, compared to $35.9m, or 38.8% of revenue, in the first quarter of fiscal 2024.

Total GAAP operating expenses in the fiscal first quarter of 2025 were $43.9m, or 61.5% of revenue, compared to $40.8m, or 44.1% of revenue, in the fiscal first quarter of 2024. Selling, general and administrative expenses were $34.4m, compared to $28.5m in the prior fiscal year. Research and development expenses in the fiscal first quarter of 2025 were $8.3m, compared to $10.9m in the prior fiscal year quarter. Non-GAAP operating expenses in the first quarter of 2025 were $30.8m, compared to $35.5m in the fiscal first quarter of 2024.

GAAP net loss in the first quarter of fiscal 2025 was $20.8m, or ($0.22) per share, compared to a net loss of $9.1m, or ($0.10) per share in the prior fiscal year quarter. Excluding the income statement impact of the warrants, stock compensation, restructuring charges, and other non-recurring costs, non-GAAP adjusted net loss in the quarter was $8.4m, or ($0.09) per share, compared to an adjusted net loss of $4.1m, or ($0.04) per share in the fiscal first quarter of 2024.

Adjusted EBITDA in fiscal first quarter 2025 was ($3.1)m, compared to $1.5 m in the first quarter of fiscal year 2024.

For a reconciliation of GAAP to non-GAAP financial results, please see the financial reconciliation tables below.

Liquidity and Debt (as of June 30, 2024)

  • Cash, cash equivalents and restricted cash were $17.5m, compared to $25.7 m as of June 30, 2023.
  • Total interest expense for the first quarter was $3.8m, compared to $3.2 m for the same period a year ago.
  • Outstanding term loan debt, excluding debt issuance costs, was $75.8m, compared to $88.6m as of June 30, 2023. Outstanding borrowings on revolving credit facility was $35.8m, compared to $17.8m as of June 30, 2023.

o During the quarter, the Company paid down $12.3m of term loan debt through improved working capital by outsourcing service inventory logistics and management.

Guidance

For the fiscal second quarter of 2025, the Company expects the following guidance:

  • Revenues of $73.0m, plus or minus $2.0m
  • Non-GAAP adjusted basic net loss per share of ($0.06), plus or minus $0.02
  • Adjusted EBITDA of approximately breakeven

This assumes an effective annual tax rate of negative 14%; non-GAAP adjusted net loss per share assumes an average basic share count of approximately 96m in the fiscal second quarter of 2025.

(Source: BUSINESS WIRE)

 

14 Aug 24. Rheinmetall agrees takeover of vehicle specialist Loc Performance. Acquisition expands and strengthens Rheinmetall’s position in North America and the competition for high-volume major orders in the USA

With a strategic acquisition in the USA, the Düsseldorf-based Rheinmetall Group is expanding its position in the world’s largest defense market and strengthening its core business in the field of land vehicles for military customers worldwide.

On 13 August 2024 Rheinmetall has signed an agreement to acquire all equity interests in Loc Performance Products, LLC, a renowned vehicle specialist based in Plymouth, Michigan.

The acquisition expands the Group’s business with the US military, increases its industrial base in the USA and creates further access for its technologies in North America. Furthermore, Rheinmetall is strengthening its production capacities in the USA with a view to targeted high-volume major orders for U.S. Army vehicle programs with a total potential of over USD 60bn. Rheinmetall is one of two remaining participants in the current prototype phase of the XM30 program. This program serves to introduce a new generation of infantry fighting vehicles. The volume is estimated at around USD 45bn for around 4,000 infantry fighting vehicles. Furthermore, Rheinmetall is participating in the CTT (Common Tactical Truck) program, which has a volume of around USD 16bn for around 40,000 trucks.

In addition, Rheinmetall expects the acquisition of Loc Performance to bring considerable benefits for both its American and for its global business. For example, an experienced workforce with a high level of technical expertise – including in the maintenance, repair and combat enhancement of military combat vehicles – will be integrated into Rheinmetall’s internal supply chains.

The purchase price agreed for Loc Performance, which will become due upon closing, is based on an enterprise value of USD 950m. Closing of the transaction is subject to regulatory approvals.

With its skilled workforce of around 1,000 employees, Loc Performance generated significant and growing sales revenues. With its broad-based activities, the company will make a direct contribution to the Rheinmetall Group’s fast-growing US military vehicle business, which is managed by American Rheinmetall Vehicles based in Sterling Heights, MI.

The acquisition provides the Rheinmetall Group with key capabilities in the US and enables American Rheinmetall Vehicles to more effectively and comprehensively supply the US Department of Defense by expanding the company’s product portfolio and domestic manufacturing capabilities.

The investment follows Rheinmetall’s clear strategy for growth in the United States, which will be an important core business for the Group in the future. Loc Performance is already pursuing a sustainable business model with robust organic growth, has a highly skilled workforce and offers the Rheinmetall Group ample capacity reserves for the targeted orders in the USA.

Loc Performance Products, LLC was founded in 1971 in Plymouth, MI and is a diversified full-service provider for both military and civilian customers. In addition to its headquarters in Plymouth, MI, the company has further locations in Lansing, MI and Lapeer, MI as well as in St. Marys, OH.

The vehicle specialist is a high-performance full-line supplier of drivetrains, suspensions, track systems, rubber products, armour products and fabricated structures for vehicle platforms. The company is an established supplier to the US government and, in particular, OEM for most military ground vehicle track systems in the USA. In addition, the company’s products are used by major vehicle manufacturers in the agricultural, construction, mining, locomotive, transportation and oil and gas industries.  Loc Performance’s current manufacturing capabilities include modernised fabrication, machining and welding technologies capable of meeting the critical manufacturing requirements of the US Army’s XM30 and CTT programs. An available manufacturing footprint of 1.7 m square feet provides significant capacity for future expansion.

Armin Papperger, CEO of Rheinmetall AG: “We are making this investment because we have a clear strategy for growth and the United States will be an important core market for us in the coming years. The acquisition of Loc Performance proves that we are consistently focussing on success in the USA and want to expand our share of the large market volume. Everything speaks in favour of this acquisition: Loc Performance is already pursuing a sustainable business model there with robust organic growth, has a highly qualified workforce and offers us significant capacity reserves for the orders we are targeting in the USA.”

Matthew Warnick, CEO of American Rheinmetall Vehicles: “In the USA, we have a promising position in two major military projects, both in the XM30 infantry fighting vehicle program and in the CTT project. The acquisition of Loc Performance gives us the manufacturing readiness that will enable us to realise the major orders we are aiming for. This puts us in a position to realise 100% local value creation in the USA.”

Jason Atkinson, CEO of Loc Performance: “The significant engineering capabilities of American Rheinmetall Vehicles and the next-generation technologies that are part of the exceptional global Rheinmetall Group are a great fit with Loc Performance’s 53 years of manufacturing experience in the United States. I am excited about this combination, which represents a powerful end-to-end solution that will bring even better products to our customers and even more growth to our combined company.”

American Rheinmetall Vehicles provides US customers with next-generation tracked and wheeled combat vehicles and tactical wheeled vehicle platforms. American Rheinmetall Vehicles supports the U.S. Army in two major modernisation programs, the XM30 Combat Vehicle program, and the CTT program.

The acquisition of Loc Performance will be of great benefit to American Rheinmetall Vehicles as the company further expands and strengthens its presence in the United States. With the purchase, American Rheinmetall Vehicles acquires 1.7m square feet of modern, efficient manufacturing space with significant capacity for future expansion.

American Rheinmetall is supporting the Department of Defense in key modernisation programs of national significance that directly improve the effectiveness, mobility and situational awareness of soldiers on the battlefield. This includes developing and delivering next-generation products and capabilities, including advanced direct and long-range precision fire weapons, innovative tracked and wheeled combat vehicle platforms, and intelligent mission systems.

The American Rheinmetall family includes American Rheinmetall Vehicles in Sterling Heights (MI) and Troy (MI), American Rheinmetall Munitions in Stafford (VA), Windham (ME) and Camden (AR), American Rheinmetall Systems in Biddeford (ME) and the parent company American Rheinmetall Defense in Reston (VA).

 

13 Aug 24. Sypris Reports Second Quarter Results

Gross Profit up 21%; Backlog Exceeds $115m

Sypris Solutions, Inc. (Nasdaq/GM: SYPR) today reported financial results for its second quarter ended June 30, 2024.

HIGHLIGHTS

  • The Company’s second quarter 2024 consolidated revenue was even with the prior year at $35.5m, reflecting a rotation in mix driven by continued growth at Sypris Electronics and reduced shipments for Sypris Technologies. Orders are up 15.8% year-to-date, reflecting positive growth for both businesses.
  • Gross profit for the Company increased 20.8% from the prior-year period and increased 95.6% sequentially, while gross margin expanded 280 basis points and 780 basis points, respectively.
  • Revenue for Sypris Electronics increased 13.6%, reflecting the positive impact of recently announced contracts with customers serving the markets for electronic warfare, aircraft and missile avionics, and subsea communications. Gross profit increased 9.7% from the prior year and 250.8% sequentially. Orders are up 16.6% year-to-date.
  • Gross profit for Sypris Technologies increased 35.5% year-over-year and 32.6% sequentially, while gross margin expanded 520 basis points and 400 basis points, respectively. Orders for energy products are up 13.6% year-to-date.
  • During the quarter, Sypris Electronics announced that it received releases for an additional four systems under a multi-year production contract that was first announced in 2022. The modules to be produced by Sypris will be integrated into an electronic warfare improvement program for the U.S. Navy. Deliveries are expected to begin in 2024.
  • Subsequent to quarter end, Sypris Technologies announced that it entered into a long-term sole-source extension to its current supply agreement with one of the world’s largest commercial vehicle manufacturers. The agreement provides for a continuation of Sypris’ Ultra® Axle Shafts for use in the assemblies of the customer’s branded drive axles for medium and heavy-duty trucks.
  • The Company reaffirmed its full-year outlook for 2024, maintaining the expected increase in revenue at 10-15% year-over-year. Gross profit is expected to increase 20-25%, while gross margins are expected to expand 100-125 basis points year-over-year.

“We were pleased with the year-over-year revenue growth at Sypris Electronics,” commented Jeffrey T. Gill, President and Chief Executive Officer. “The backlog at Sypris Electronics exceeds $100m and is expected to support growth through the remainder of 2024 and beyond. Customer funding has already been secured for a portion of these key programs, which enables us to procure inventory under multi-year purchase orders to mitigate future supply chain issues.

“Demand from Sypris Technologies customers serving the automotive, commercial vehicle, sport utility and off-highway markets has remained relatively stable, with new product line shipments offsetting the anticipated cyclical decline for the commercial vehicle market. We believe that the market diversification Sypris Technologies has accomplished over recent years by adding new programs in the automotive, sport-utility and off-highway markets will help offset some of this decline.

“Orders for our energy products increased during the period, with open quotes yet to be closed still outstanding on several large projects. Additional opportunities for growth may exist with new global projects in support of increasing LNG demand. We are also actively pursuing applications for our products in adjacent markets to further diversify our industry and customer portfolios.”

Second Quarter Results

The Company reported revenue of $35.5m for the second quarter of 2024, compared to $35.6m for the prior-year comparable period. Additionally, the Company reported breakeven net income compared with net income of $0.2m, or $0.01 per diluted share, for the prior-year period.

For the six months ended June 30, 2024, the Company reported revenue of $71.1 m compared to $67.9m for the first half of 2023. The Company reported a net loss of $2.2m compared with breakeven for the prior-year period.

Sypris Technologies

Revenue for Sypris Technologies was $17.8m in the second quarter of 2024 compared to $20.1 m for the prior-year period, reflecting the short-term timing delay of certain energy shipments and the anticipated cyclical decline in the commercial vehicle market. Gross profit for the second quarter of 2024 was $2.7m, or 15.2% of revenue, compared to $2.0m, or 10.0% of revenue, for the same period in 2023. Gross profit for the second quarter of 2024 benefited from a favorable mix and higher absorption.

Sypris Electronics

Revenue for Sypris Electronics was $17.7m in the second quarter of 2024 compared to $15.6m for the prior-year period. Increased shipments for a follow-on program contributed to the growth over the prior-year comparable period. Gross profit for the second quarter of 2024 was $2.9m, or 16.5% of revenue, compared to $2.7m, or 17.1% of revenue, for the same period in 2023 primarily due to higher revenue and favorable material costs, partially offset by additional labor and overhead costs incurred on programs that recently ramped production.

Outlook

Commenting on the future, Mr. Gill added, “Demand from customers serving the markets for electronic warfare, aircraft and missile avionics, secure and subsea communications, and ground-based radar remain robust, while the outlook for the energy market continues to move in the right direction. Similarly, demand from customers serving the automotive, commercial vehicle and sport utility markets remains healthy despite the anticipated cyclical decline in the commercial vehicle market.

“With a strong backlog, new program wins, and long-term contract extensions in place, we are confident that the second half of 2024 has the potential to be very positive for Sypris. As a result, we continue to expect revenue to increase 10-15% year-over-year. We expect to achieve gross margin expansion in the range of 100 to 125 basis points with gross profit forecast to increase 20-25% in 2024.” (Source: BUSINESS WIRE)

 

14 Aug 24. Israel’s Elbit sees conflicts driving strong weapons demand.

Defence firm Elbit Systems reported higher second-quarter profit on Wednesday, continuing to benefit from supplying Israel in its war against Hamas militants in Gaza and strong demand more generally.

One of Israel’s largest defence contractors, Elbit earned $2.08 per diluted share excluding one-time items in the quarter, versus $1.65 a year earlier.

Revenue rose to $1.63bn from $1.45bn. Some 27% of quarterly sales came from Israel, against 17% last year. At 29%, Europe was Elbit’s largest customer, with North America steady at 23% but Asia-Pacific slipping to 15%.

“We see many more opportunities for us in the global market, not just in Israel,” CEO Bezhalel Machlis told Reuters, adding that given its pipeline “it’s quite obvious the company will continue to grow quite rapidly in the coming years.”

“Unfortunately, globally there are many conflicts right now, and these conflicts drive high investment in defence … Our portfolio is very wide and we can take advantage of this.”

Machlis said an order backlog of $21.1bn meant Elbit was likely to reach $7bn in revenue in 2025 rather than in 2026 as initially thought.

“What really limits us is our operational capacity,” he said.

To that end, Elbit plans to open a new munitions facility in southern Israel with robots and automation that Machlis said should “drastically” boost production and revenue, as well as another plant to produce unmanned aerial vehicles (UAVs).

Elbit has some 40 subsidiaries around the world, including in the United States, Britain and Germany, that have helped with production. “Quite soon, we will be able to meet all the demand that we see ahead of us,” Machlis said.

Revenue over the first half of 2024 hit $3.2bn.

Machlis said that since the Gaza war erupted on Oct. 7, Elbit had brought out a host of new technologies for the Israeli military.

“The portfolio was improved drastically and this war has been an accelerator for many developments. The IDF (Israel Defense Forces) is using these technologies now and in the future, we will bring them to the rest of the market as well,” he said.

These include UAVs, communication systems and AI capabilities.

Elbit’s Nasdaq listed shares were up 4.6% at $198.67 in early trading, but down 11% this year, partly pressured by divestments by some investors, including Scotiabank’s 1832 Asset Management, a unit of Canada’s Bank of Nova Scotia.  (Source: Reuters)

 

14 Aug 24. Elbit Systems Ltd. (“Elbit Systems” or the “Company”) (NASDAQ and TASE: ESLT), the international high technology defense company, reported today its consolidated results for the second quarter ended June 30, 2024.

Order backlog at $21.1bn; Revenues of $1.6bn; Non-GAAP

net income of $93m; GAAP net income of $78m;

Non-GAAP net EPS of $2.08; GAAP net EPS of $1.76

Management Comment: Bezhalel (Butzi) Machlis, President and CEO of Elbit Systems, commented: “Elbit Systems demonstrated a 12% year-over-year increase in revenues in the second quarter. The continuous high demand for our products and solutions reinforces our position as industry leaders. Our long-term investments in technologies, research and development in collaboration with our key customers, and the expansion of our manufacturing capabilities, enable us to meet our commitments to our customers and to drive the continued growth and focus on profitability of the Company, in alignment with our strategic goals. This growth reflects the dedication and commitment of Elbit Systems’ employees in Israel and around the world, who contribute every day to the Company’s success.”

 

13 Aug 24. Dowlais struggles to maintain momentum.

Slowing battery electric vehicle market take-up hits ePowertrain arm

  • Shares are 60 per cent below debut price
  • Chief executive points to market recovery next year

The birth of Dowlais (DWL) as a standalone entity has been an increasingly tortured affair. Its shares started to fall as soon as the former GKN Automotive, powder metallurgy and hydrogen business units were spun out from Melrose (MRO) in April last year and – with a few brief exceptions – have maintained their downward spiral since.

After a disappointing set of half-year results and a lowering of full-year expectations, the shares are now 60 per cent below the 146p level at which they commenced trading. Management put a brave face on things, highlighting how its driveline, China and powder metallurgy arms (which make up 75 per cent of sales) outperformed the wider market, with global light vehicle production outside China declining by 2.4 per cent in the year to date. Full-year (ex-China) production is forecast by S&P Global Mobility to fall by 2.9 per cent, but the market is expected to return to a compound annual growth rate of 2.8 per cent over the next three years, Dowlais chief executive Liam Butterworth said.

Management also took measures to improve margins, such as offloading its lossmaking hydrogen business for a nominal sum and announced a strategic review of the powder metallurgy business.

At the current price, there will be value investors tempted by a business whose shares trade at less than four-times forecast earnings and just a third of their book value, offering a dividend yield of 6.8 per cent. Yet free cash flow generation remains anaemic and the performance of its ePowertrain arm is a concern given the slower uptake of battery electric vehicles, so we stick to hold. Last IC view: Hold, 86p, 21 Mar 2024.

(Source: Investors Chronicle)

 

13 Aug 24. Dowlais looks to offload powder metallurgy division.

Car parts supplier will seek to sell its £1bn business a second time amid a slowdown in electric car sales.

Dowlais has taken large bets on investments in epowertrains for zero-emission vehicles.

Dowlais is looking at selling its £1bn powder metallurgy business as the car parts supplier counts the cost of the slowdown in demand for electric cars.

For the first six months of this year, Dowlais’s revenues were down by 9 per cent at £2.57bn and, with group margins falling to 5.9 per cent, its pre-tax profits tumbled by 32 per cent to £95m. Dowlais, which was spun off from Melrose Industries, the aerospace supplier, in April last year, said it now expected its 2024 adjusted revenue to fall by mid-to-high single digits.

Its businesses comprise GKN Automotive and GKN Powder Metallurgy. While GKN Automotive is a provider of the drivetrains and sideshafts in conventional cars, the electric revolution has led Dowlais to take large bets on investments in epowertrains for zero-emission vehicles. It is this part of the business, accounting for more than a fifth of Dowlais, that is hurting.

Car production in general is decelerating more rapidly than expected and is likely to be down by 2 per cent for the full year. The production of electric cars is still growing, but only just. It is up 2 per cent year-on-year, but that is against growth of 49 per cent at this time last year. Without China, the largest electric car market in the world, the production of zero-emission vehicles would be down by 9 per cent year-on-year.

Big players, such as the Volkswagen Group and Stellantis, have been powering down their expansion into electric vehicles as consumer subsidies to buy battery electric cars are withdrawn across Europe, most notably in Germany, the Continent’s largest market.

“Battery electric vehicle production has significantly impacted our epowertrain business,” Liam Butterworth, Dowlais’ chief executive, said, blaming the issue for all of the decline in the group’s revenue.

Dowlais, which has no operations in Britain, has been a poor play for investors since it was spun out of Melrose. Soon after its initial public offering, the shares touched 139p. Since then they have collapsed and were down by 2¾p, or 4.4 per cent, at 58¾p at the close.

The powder metallurgy business makes parts for automotive and other industrial concerns, typically processing materials into precision-engineered components, including for gear systems and motors. Under Melrose, which is now solely the GKN Aerospace business, it had been strongly signalled that the powder metallurgy business would go up for sale, but no buyer was found.

When Dowlais was spun out of Melrose, a sale of powder metallurgy was still on the agenda. However, a review of the business culminated in a £449m accounting writedown in the value of the business to £884 m because of the “overly ambitious growth projections” of previous management.

That £884m book value of powder metallurgy is larger on its own than the market value of Dowlais, which stands at about £814m. That suggests investors believe the rest of Dowlais is worth less than nothing, or that the accounting valuation of powder metallurgy remains too high.

Last year powder metallurgy brought in revenue of £1.04bn and, on profit margins of 9.2 per cent, it made an operating profit of £96 m. In the first six months of this year, revenues have fallen by 3 per cent, but, with margins up at 9.5 per cent, first-half profits have remained steady at £50m.

The expected sale of powder metallurgy comes hard on the heels of the company’s decision to quit investment in hydrogen powertrains of the future and to sell its nascent business at a loss.

Dowlais is holding its interim dividend at 1.4p. (Source: The Times)

 

12 Aug 24. Spirit Aero CEO Shanahan to get $28.5m ‘golden parachute.’ Spirit AeroSystems (SPR.N) CEO Patrick Shanahan will receive a payout of $28.5m after the 737 MAX fuselage supplier completes its merger with Boeing (BA.N), according to a regulatory filing on Monday.

Shanahan will get a cash payment of $2.3m, converted Spirit restricted stock units worth $26.1m and perquisites and benefits worth $45,000 as part of a package known as a “golden parachute”.

Such payments are commonplace in corporate America and are intended to incentivize management to sell a company, even if it means ending their own employment.

Boeing agreed in July to buy back Spirit AeroSystems for $4.7bn in stock and Airbus (AIR.PA) moved to take on the supplier’s loss-making Europe-focused activities. It was a transatlantic break-up of the world’s largest standalone aerostructures company.

Shanahan had been seen as a frontrunner to take over the reins at Boeing, which is now headed by former aerospace executive Kelly Ortberg.

Boeing chair Steven Mollenkopf asked Shanahan in May if he would be interested in being considered as a candidate for the role of Boeing’s president and chief executive officer, the filing showed.

Shanahan responded that he would not rule out being in the running for the role, according to the filing. (Source: Reuters)

 

10 Aug 24. High yield TT Electronics on brink of turnaround. The electronics components company is focusing on productivity as it strips away unnecessary parts. Electronic components business TT Electronics (TTG) is continuing its path towards recovery, and at its low price offers an enticing dividend yield. On the surface, the results look underwhelming but this is a business in recovery, so they come with a few caveats. In the six months to June, adjusted operating margin dropped 20 basis points to 8.1 per cent. However, this included £1.7m of divestment costs. It sold businesses in Cardiff, Hartlepool and China which completed at the end of Q1. In the short run this is costly but will help management reach its long-term 10 per cent operating margin target. The most important number is the order intake. This grew 15 per cent organically and means the book to bill ratio if now up to 110 per cent. It has signed a couple new contracts with defence customers to supply them with electric cabling and power cabinets. Profit is expected to start improving as this order book is converted into revenue. FactSet analyst consensus is forecasting EPS to rise to 21.7p in 2025. This leaves TT Electronics trading on a forward PE ratio of just 7, while its dividend yield is five per cent. This is good value for a company on the brink of a turnaround. Looking for profit growth through cost cutting is not a sign of a high growth business. But at this price, there looks to be more value here than the market is suggesting. Stick to buy.   Last IC View: Buy, 149p, 08 Mar 2024. (Source: Investors Chronicle)

 

12 Aug 24. Pexco LLC, a leading North American specialty plastics processor, announced the acquisition of Precise Aerospace Manufacturing, Inc. Based in Yorba Linda, CA, Precise Aerospace Manufacturing is a leading full-service supplier of injection, compression, transfer molded plastic, and value added assembly and contract manufacturing, with expertise in tight tolerance custom molding of high performance thermoplastic materials such as PEEK, Torlon®, Ultem® and Ryton®.

This acquisition enhances Pexco’s injection molding and material science capabilities and increases the Company’s presence on the West Coast. Precise Aerospace Manufacturing’s end-to-end capabilities and commitment to quality and customer service align with Pexco’s strategy. The acquisition also builds on Pexco’s presence in the Aerospace, Defense, Medical and Electronics markets.

Pexco CEO Sam Patel stated, “The acquisition of Precise Aerospace Manufacturing marks a significant milestone in Pexco’s strategic growth journey. This expansion not only strengthens our capabilities in injection molding and high-performance polymers but also underscores our commitment to enhancing service offerings for Aerospace & Defense. We look forward to integrating Precise Aerospace Manufacturing’s expertise seamlessly into Pexco’s operations, further advancing our position as a leader in engineered plastic components.”

Roxanne Abdi, CEO at Precise Aerospace Manufacturing, added, “We are excited to become part of Pexco and are thrilled to join forces to expand the breadth of products and services to each of our customer bases. Combining with Pexco enables us to continue building on both companies’ reputation for quality products and service excellence. Our focus on high performance products and complex engineering are a great cultural fit with Pexco.”

Precise Aerospace Manufacturing was founded as Precise Plastic Products in 1965 and has a 55-year track record of manufacturing and quality excellence. They now join Pexco as part of its strategic expansion, marking the addition as Pexco’s 13th manufacturing site. Houlihan Lokey served as financial advisor to Precise Aerospace Manufacturing.

About Pexco LLC

Based in Atlanta, with multiple plants across North America, Pexco is a leader in the design and fabrication of engineered plastic components. It provides standard and specialty parts and components to manufacturers and end users for a broad range of custom applications, including the specialty industrial, fluid handling, aerospace, life science, traffic safety, lighting, fence, and electrical insulation industries. Pexco offers a full range of custom design, engineering, and fabrication services, with ISO 9001:2015 registration across its manufacturing operations. For more information, visit www.pexco.com or call (770) 872-8013.

About Precise Aerospace Manufacturing, Inc.

Since 1965, Precise Aerospace Manufacturing Inc. has been the premier full-service supplier of injection, compression, transfer molded plastic, CNC machining and value-added assembly specializing in close tolerance custom molding for the aerospace, defense, medical, and electronics industries with complex engineering resin projects, from thermoset and thermoplastic materials. We are AS9100, ISO9001, and ITAR certified. For more information, visit www.precisemfg.com.

About Odyssey Investment Partners

Odyssey Investment Partners, with offices in New York and Los Angeles, is a leading private equity investment firm with a more than 25-year history of partnering with skilled managers to transform middle-market companies into more efficient and diversified businesses with strong growth profiles. Odyssey makes majority-controlled investments in industries with a long-term positive outlook and favorable secular trends. For further information about Odyssey, please visit www.odysseyinvestment.com. (Source: BUSINESS WIRE)

——————————————————————————————————————————————————————————————————————————————————————————————————————————————–

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

————————————————————————————————————————————————————————————————————————————————————————————————————————————————-