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POINT ROBERTS, Wash., Delta B.C., September 15, 2009 - www.InvestorIdeas.com, a leading investor research portal specialized in sector investing announces a new content submission service for investors and traders to publish and share their stock picks and stock profiles, including defense stocks.
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Optex Systems Holdings, Inc., (OTCBB: OPXS) through its wholly-owned subsidiary, Optex Systems, Inc. manufactures optical sighting systems and assemblies primarily for Department of Defense (DOD) applications. Its products are installed on a majority of types of U.S. military land vehicles, such as the Abrams and Bradley fighting vehicles, Light Armored and Armored Security Vehicles and have been selected for installation on the Future Combat Systems (FCS) Stryker vehicle. Optex also manufactures and delivers numerous periscope configurations, rifle and surveillance sights and night vision optical assemblies. Optex delivers its products both directly to the military services and to prime contractors.
Read the full company profile:
Visit Optex Systems Holdings, Inc. (OTCBB: OPXS) Company Profile: http://www.investorideas.com/CO/OPTEX/
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Tuesday, September 15, 2009
Monday, August 17, 2009
Defense Contracting Opportunities in Military Vehicle Refurbishment
Defense Contracting Opportunities in Military Vehicle Refurbishment
Defense Stocks Covered: Raytheon (NYSE:RTN), Northrop Grumman (NYSE:NOC), Lockheed Martin (NYSE:LMT), Boeing (NYSE:BA), AeroVironment (NASDAQ:AVAV), General Dynamics (NYSE:GD), Optex Systems (OTCBB: OPXS)
POINT ROBERTS, Wash., DELTA, B.C. –August 17, 2009 – www.HomelandDefenseStocks.com, a leading global investor and industry portal for the defense and security sector, within Investorideas.com, presents, a defense industry overview, ‘Defense Contracting Opportunities in Military Vehicle Refurbishment’, by Lisa Springer, CFA.
Defense Contracting Opportunities in Military Vehicle Refurbishment
Defense Stocks Covered : Raytheon (NYSE:RTN), Northrop Grumman (NYSE:NOC), Lockheed Martin (NYSE:LMT), Boeing (NYSE:BA), AeroVironment (NASDAQ:AVAV), General Dynamics (NYSE:GD), Optex Systems (OTCBB: OPXS)
Defense Contracting Opportunities in Military Vehicle Refurbishment
Consistent with the changes signaled in the 2010 defense budget back in April, the Pentagon has begun cancelling contracts on a number of big ticket programs covering untested technologies. A case in point is the Kinetic Energy Interceptor program. Work contracts on the KEI laser, a technology for shooting down missiles in mid-flight, have been canceled by the Pentagon. Raytheon (NYSE:RTN), a contractor on the KEI program, lost $2.4 billion from backlog because of the cancellation while backlog for lead contractor Northrop Grumman (NYSE:NOC) fell by $5.1 billion as a result.
Lockheed Martin (NYSE:LMT) experienced a $2.6 billion reduction in backlog because of the cancellation of its contracts for high-tech helicopters and Transformational Satellite Communications systems. Boeing (NYSE:BA) received a partial termination order covering the manned ground vehicle component of the Future Combat Systems (FCS) program and subsequently reduced its FCS program workforce by 30%. FCS program cuts were cited as a reason Standard and Poor’s downgraded Boeing’s debt rating in July.
Massive spending cuts in the Army’s $200 billion FCS program were a major change in the 2010 defense budget but came as a surprise to few defense industry insiders. The intent of the FCS program, with its eight ground vehicles, was to design, test and produce the next-generation of tanks, cannons and infantry carriers to augment the U.S. military’s existing fleet of Abrams tanks and Bradley and Stryker ground vehicles. Proponents argued that FCS high-tech combat vehicles would be lighter, more maneuverable and better-suited to 21st century warfare than their predecessors. When the new vehicles were tested under actual combat conditions, however, the results were disappointing. The new vehicles were indeed faster and more maneuverable, but their light armor made them too fragile. Many were quickly destroyed or severely damaged by road-side bombs. Some pieces of the FSC program, such as ground robots and unmanned drones, did perform well in combat and continue to be funded. This was good news for AeroVironment (NASDAQ:AVAV), a supplier of unmanned military drones, which was able to beat analyst estimates in fiscal 2009 and projects at least 18% revenue growth in fiscal 2010.
General Dynamics (NYSE:GD) and a few other defense contractors that support existing military vehicle platforms are emerging as winners from the 2010 defense budget.. With the development of new platforms on-hold, Abrams tanks and Bradley and Stryker ground vehicles are likely to remain in use by the U.S. military for many more years. General Dynamics designed the Abrams tank and has produced more than 8,800 M1 and M1A1 Abrams tanks since the program’s inception in the early 1980s. General Dynamics also supplies Stryker combat vehicles and to-date has delivered 2,852 of these vehicles to seven separate Army Stryker brigades. British defense contractor BAE Systems developed the Bradley ground vehicle and has supplied more than 6,700 Bradley vehicles to the U.S. military since the early 1980s.
Instead of new vehicles, the U.S. Army is investing in upgrades and refurbishments to its aging military vehicle fleet. In July, the U.S. Army Tank Automotive Command (TACOM) awarded General Dynamics a contract potentially valued at $55.2 million to refurbish 330 Stryker infantry combat vehicles. Under the terms of the contract, General Dynamics will service, repair and upgrade Stryker vehicles returning from Iraq, restore them to like-new condition and prepare them in advance of their next deployment. This refurbishment work is long overdue; the Army’s fleet of Stryker vehicles has accumulated more than six million miles of use since 2003. The July refurbishment contract covers less than 15% of the Stryker fleet, suggesting more refurbishment contacts are likely to be awarded in the future.
Defense contractor Optex Systems (OTCBB: OPXS) should also benefit from refurbishment contract awards since it supplies General Dynamics with weapon optical sighting systems. The company provides optical sighting systems for Abrams tanks and Bradley fighting vehicles and its optical systems have been selected for installation on Stryker vehicles. In July, a General Dynamics business unit awarded Optex a $3.4 million contract to supply high-tech ICWS (Improved Commander’s Weapon Station) periscopes for Abrams tanks. Optex will begin delivering the periscopes in 2011 with delivery continuing through 2012.
Its strong relationships with major defense contractors such as General Dynamics provides Optex with high visibility in the defense contracting market, as evidenced by the company’s recent invitation to participate in the 2nd Annual Heavy Vehicle Summit this September. This event is the leading forum for developers of new technologies for heavy military vehicles such as the Abrams and Bradley. New contracts such as the one awarded in July improve Optex’s order flow and backlog and helped support a greater than 50% year-over-year improvement in revenues during the fiscal nine-month period that ended this June.
Lisa Springer Bio/ Disclaimer: http://www.investorideas.com/About/Lisa-Springer-CFA/
Additional Defense articles by Lisa Springer:
Defense Budget Winners and Losers:
How Defense Companies Boeing (NYSE:BA), Northrop Grumman (NYSE:NOC), General Dynamics (NYSE:GD), Optex Systems Holdings, Inc. (OTCBB:OPXS) and others are Impacted
Optex Systems Holdings, Inc. (OTCBB: OPXS) is a featured defense stock and showcase company on Investor Ideas defense investor portals, Homelandefensestocks.com, BorderandPortsecurity.com and http://www.nationalhomelandsecurityknowledgebase.com
Visit Optex Systems Holdings, Inc. (OTCBB: OPXS) Company Profile: http://www.investorideas.com/CO/OPTEX/
About Homelanddefensestocks.com- HomelandDefenseStocks.com Portal is a global meeting place for investors and industry following defense and security, within Investorideas.com. Global visitors use the site daily to research the latest news, articles, audio, research reports and stock directories.
Defense Stocks Directory: Research global defense and security stocks http://www.investorideas.com/Companies/HomelandDefense/Stock_List.asp
About InvestorIdeas.com:
InvestorIdeas.com is a leading global investor and industry research resource portal specialized in sector investing covering over thirty industry sectors and global markets including China, India, the Middle East and Australia.
InvestorIdeas.com Disclaimer.: www.InvestorIdeas.com/About/Disclaimer.asp
Our sites do not make recommendations, but offer information portals to investors to research news, articles, stock lists and recent research. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. We attempt to research thoroughly, but we offer no guarantees as to the accuracy of any information presented. All information relating to featured companies is sourced from public documents and/ or the company and is not the opinion of our web sites. This site is compensated by featured companies, news submissions and online advertising. OPXS Disclosure: Optex is a featured showcase company and compensates Investorideas.com $3000 month and sixty two thousand 144 shares issued quarterly.
For more information contact: Dawn Van Zant 800.665.0411 Email: dvanzant@HomelandDefenseStocks.com
Source: HomelandDefenseStocks.com, Investor Ideas, Optex Systems Holdings Inc. (OTCBB: OPXS)
Defense Stocks Covered: Raytheon (NYSE:RTN), Northrop Grumman (NYSE:NOC), Lockheed Martin (NYSE:LMT), Boeing (NYSE:BA), AeroVironment (NASDAQ:AVAV), General Dynamics (NYSE:GD), Optex Systems (OTCBB: OPXS)
POINT ROBERTS, Wash., DELTA, B.C. –August 17, 2009 – www.HomelandDefenseStocks.com, a leading global investor and industry portal for the defense and security sector, within Investorideas.com, presents, a defense industry overview, ‘Defense Contracting Opportunities in Military Vehicle Refurbishment’, by Lisa Springer, CFA.
Defense Contracting Opportunities in Military Vehicle Refurbishment
Defense Stocks Covered : Raytheon (NYSE:RTN), Northrop Grumman (NYSE:NOC), Lockheed Martin (NYSE:LMT), Boeing (NYSE:BA), AeroVironment (NASDAQ:AVAV), General Dynamics (NYSE:GD), Optex Systems (OTCBB: OPXS)
Defense Contracting Opportunities in Military Vehicle Refurbishment
Consistent with the changes signaled in the 2010 defense budget back in April, the Pentagon has begun cancelling contracts on a number of big ticket programs covering untested technologies. A case in point is the Kinetic Energy Interceptor program. Work contracts on the KEI laser, a technology for shooting down missiles in mid-flight, have been canceled by the Pentagon. Raytheon (NYSE:RTN), a contractor on the KEI program, lost $2.4 billion from backlog because of the cancellation while backlog for lead contractor Northrop Grumman (NYSE:NOC) fell by $5.1 billion as a result.
Lockheed Martin (NYSE:LMT) experienced a $2.6 billion reduction in backlog because of the cancellation of its contracts for high-tech helicopters and Transformational Satellite Communications systems. Boeing (NYSE:BA) received a partial termination order covering the manned ground vehicle component of the Future Combat Systems (FCS) program and subsequently reduced its FCS program workforce by 30%. FCS program cuts were cited as a reason Standard and Poor’s downgraded Boeing’s debt rating in July.
Massive spending cuts in the Army’s $200 billion FCS program were a major change in the 2010 defense budget but came as a surprise to few defense industry insiders. The intent of the FCS program, with its eight ground vehicles, was to design, test and produce the next-generation of tanks, cannons and infantry carriers to augment the U.S. military’s existing fleet of Abrams tanks and Bradley and Stryker ground vehicles. Proponents argued that FCS high-tech combat vehicles would be lighter, more maneuverable and better-suited to 21st century warfare than their predecessors. When the new vehicles were tested under actual combat conditions, however, the results were disappointing. The new vehicles were indeed faster and more maneuverable, but their light armor made them too fragile. Many were quickly destroyed or severely damaged by road-side bombs. Some pieces of the FSC program, such as ground robots and unmanned drones, did perform well in combat and continue to be funded. This was good news for AeroVironment (NASDAQ:AVAV), a supplier of unmanned military drones, which was able to beat analyst estimates in fiscal 2009 and projects at least 18% revenue growth in fiscal 2010.
General Dynamics (NYSE:GD) and a few other defense contractors that support existing military vehicle platforms are emerging as winners from the 2010 defense budget.. With the development of new platforms on-hold, Abrams tanks and Bradley and Stryker ground vehicles are likely to remain in use by the U.S. military for many more years. General Dynamics designed the Abrams tank and has produced more than 8,800 M1 and M1A1 Abrams tanks since the program’s inception in the early 1980s. General Dynamics also supplies Stryker combat vehicles and to-date has delivered 2,852 of these vehicles to seven separate Army Stryker brigades. British defense contractor BAE Systems developed the Bradley ground vehicle and has supplied more than 6,700 Bradley vehicles to the U.S. military since the early 1980s.
Instead of new vehicles, the U.S. Army is investing in upgrades and refurbishments to its aging military vehicle fleet. In July, the U.S. Army Tank Automotive Command (TACOM) awarded General Dynamics a contract potentially valued at $55.2 million to refurbish 330 Stryker infantry combat vehicles. Under the terms of the contract, General Dynamics will service, repair and upgrade Stryker vehicles returning from Iraq, restore them to like-new condition and prepare them in advance of their next deployment. This refurbishment work is long overdue; the Army’s fleet of Stryker vehicles has accumulated more than six million miles of use since 2003. The July refurbishment contract covers less than 15% of the Stryker fleet, suggesting more refurbishment contacts are likely to be awarded in the future.
Defense contractor Optex Systems (OTCBB: OPXS) should also benefit from refurbishment contract awards since it supplies General Dynamics with weapon optical sighting systems. The company provides optical sighting systems for Abrams tanks and Bradley fighting vehicles and its optical systems have been selected for installation on Stryker vehicles. In July, a General Dynamics business unit awarded Optex a $3.4 million contract to supply high-tech ICWS (Improved Commander’s Weapon Station) periscopes for Abrams tanks. Optex will begin delivering the periscopes in 2011 with delivery continuing through 2012.
Its strong relationships with major defense contractors such as General Dynamics provides Optex with high visibility in the defense contracting market, as evidenced by the company’s recent invitation to participate in the 2nd Annual Heavy Vehicle Summit this September. This event is the leading forum for developers of new technologies for heavy military vehicles such as the Abrams and Bradley. New contracts such as the one awarded in July improve Optex’s order flow and backlog and helped support a greater than 50% year-over-year improvement in revenues during the fiscal nine-month period that ended this June.
Lisa Springer Bio/ Disclaimer: http://www.investorideas.com/About/Lisa-Springer-CFA/
Additional Defense articles by Lisa Springer:
Defense Budget Winners and Losers:
How Defense Companies Boeing (NYSE:BA), Northrop Grumman (NYSE:NOC), General Dynamics (NYSE:GD), Optex Systems Holdings, Inc. (OTCBB:OPXS) and others are Impacted
Optex Systems Holdings, Inc. (OTCBB: OPXS) is a featured defense stock and showcase company on Investor Ideas defense investor portals, Homelandefensestocks.com, BorderandPortsecurity.com and http://www.nationalhomelandsecurityknowledgebase.com
Visit Optex Systems Holdings, Inc. (OTCBB: OPXS) Company Profile: http://www.investorideas.com/CO/OPTEX/
About Homelanddefensestocks.com- HomelandDefenseStocks.com Portal is a global meeting place for investors and industry following defense and security, within Investorideas.com. Global visitors use the site daily to research the latest news, articles, audio, research reports and stock directories.
Defense Stocks Directory: Research global defense and security stocks http://www.investorideas.com/Companies/HomelandDefense/Stock_List.asp
About InvestorIdeas.com:
InvestorIdeas.com is a leading global investor and industry research resource portal specialized in sector investing covering over thirty industry sectors and global markets including China, India, the Middle East and Australia.
InvestorIdeas.com Disclaimer.: www.InvestorIdeas.com/About/Disclaimer.asp
Our sites do not make recommendations, but offer information portals to investors to research news, articles, stock lists and recent research. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. We attempt to research thoroughly, but we offer no guarantees as to the accuracy of any information presented. All information relating to featured companies is sourced from public documents and/ or the company and is not the opinion of our web sites. This site is compensated by featured companies, news submissions and online advertising. OPXS Disclosure: Optex is a featured showcase company and compensates Investorideas.com $3000 month and sixty two thousand 144 shares issued quarterly.
For more information contact: Dawn Van Zant 800.665.0411 Email: dvanzant@HomelandDefenseStocks.com
Source: HomelandDefenseStocks.com, Investor Ideas, Optex Systems Holdings Inc. (OTCBB: OPXS)
Thursday, August 13, 2009
Defense Stocks News -Optex Systems (OTCBB:OOXS) Reports Improved Fiscal Third Quarter Financial Results
Defense Stocks News -Optex Systems (OTCBB:OOXS) Reports Improved Fiscal Third Quarter Financial Results
RICHARDSON, Texas, Aug. 13, 2009 -- Optex Systems Holdings, Inc. (OTCBB: OPXS.OB), a leading manufacturer of optical sighting systems and assemblies primarily for Department of Defense applications, today announced strong financial results for the Company's fiscal third quarter ended June 28, 2009.
For this period, the Company recorded increased revenues of $6.9 million as compared to revenues during the same period one year ago of $3.9 million, representing an increase of approximately 77%. During the nine months ended June 28, 2009, we recorded revenues of $21.0 million, as compared to revenue for the nine months ended June 28, 2008 of $13.9 million, an increase of $7.1 million or 51%. Revenues were up significantly across all product lines in the three months ended June 2009 as compared to the comparable period in 2008. Sales of the Company's periscope product lines increased significantly due to higher demand from General Dynamics.
During the quarter ended June 28, 2009, the Company recorded cost of goods sold of $6.4 million as opposed to $2.9 million during the quarter ended June 29, 2008, an increase of $3.5 million or 82.6%. This increase in cost of goods sold was primarily associated with increased revenue on certain of Company's lines in support of higher backlog and accelerated delivery schedules, in addition to increased non-cash intangible amortization charges resulting from the acquisition of Optex - Texas assets from Irvine Sensors Corporation on October 14, 2008.
The gross margin during the quarter ended June 28, 2009 was 8.6% of revenues as compared to a gross margin of 25.6% for the quarter ended June 29, 2008. Product margins decreased substantially to 15.7% for the quarter ended June 28, 2009 versus 25.6% for the quarter ended June 29, 2008 due to a shift in third quarter revenue mix toward less profitable contracts combined with increased labor costs related to the reallocation of labor from general and administrative expenses to manufacturing overhead in 2009. Margins were further impacted by higher non-cash intangible amortization charges allocable to cost of goods sold of $0.4 million, and increased reserves for valuations and warranties of $0.1 million, for a total of 7.1% of revenues in the quarter ended June 28, 2009, resulting in an overall increase in cost of goods sold of 7.1% in the quarter ended June 28, 2009.
During the three months ended June 28, 2009, the Company recorded a loss of $0.3 million, versus a $0.2 million loss during the three months ended June 29, 2008. The loss from operations includes a $0.4 million increase in non-cash amortization of intangible assets as a result of the October 14, 2008 acquisition of the Company from Irvine Sensors Corporation.
Danny Schoening, COO of the Company, commented, "We have experienced substantial improvement in our EBITDA over our prior year performance. Compared to 2008, Optex has increased its EBITDA by $2.4 million in the nine months ended June 28, 2009. This increase in EBITDA is primarily due to increased revenue and lower general and administrative costs. It is our goal and expectation that this trend will continue over the next 12 months as our product mix shifts towards more profitable programs, our non-cash amortization of intangible expenses decreases and we continue to pursue cost reductions."
During the three and nine months ended June 28, 2009, Optex revenues on legacy periscope programs increased significantly over the prior year while margins decreased. The legacy periscope contracts were awarded January 2003, and due to significant material price increases subsequent to the contract award date, the company is experiencing a loss on these contracts. It is expected that product margins on the Company's periscopes will increase over the next 12 months as some of the unprofitable legacy programs are completed and are replaced with potentially profitable new awards. Optex expects that the revenue on the legacy periscope programs will decrease in the last quarter of 2009, at which point it is anticipated that operating margins will increase significantly.
Optex is aggressively pursuing additional, potentially higher margin periscope business, including the May 2009 award of a multi-year Indefinite Delivery/Indefinite Quantity (IDIQ) type contract followed by the first delivery order from the U.S. Army's Tank-Automotive and Armaments Command (TACOM) division. If all government forecasted delivery orders against this IDIQ contract are awarded and if the Company were to share equally with the other supplier in the awarded releases, the total value of the contract to Optex could be valued at approximately $7.5 million over the next three years.
The complete third quarter report, including management's discussion and analysis, financial statements, and notes can be found on the Securities Exchange Commission's website at http://www.sec.gov/.
ABOUT OPTEX SYSTEMS
Optex, which was founded in 1987, is a Richardson, Texas-based ISO 9001:2008 certified concern, which manufactures optical sighting systems and assemblies primarily for Department of Defense (DOD) applications. Its products are installed on a majority of types of U.S. military land vehicles, such as the Abrams and Bradley fighting vehicles, Light Armored and Advanced Security Vehicles and have been selected for installation on the Stryker family of vehicles. Optex also manufactures and delivers numerous periscope configurations, rifle and surveillance sights and night vision optical assemblies. Optex delivers its products both directly to the military services and to prime contractors. For additional information, please visit the Company's website at http://www.optexsys.com/.
Safe Harbor Statement
This Press Release and other written reports and oral statements made from time to time by the Company may contain so-called "forward-looking statements," all of which are subject to risks and uncertainties. You can identify these forward-looking statements by their use of words such as "expects," "plans," "will," "estimates," "forecasts," "projects" and other words of similar meaning. You can identify them by the fact that they do not relate strictly to historical or current facts. These statements are likely to address the Company's growth strategy, financial results and product and development programs. You must carefully consider any such statement and should understand that many factors could cause actual results to differ from the Company's forward-looking statements. These factors include inaccurate assumptions and a broad variety of other risks and uncertainties, including some that are known and some that are not. No forward-looking statement can be guaranteed and actual future results may vary materially.
The Company does not assume the obligation to update any forward-looking statement. You should carefully evaluate such statements in light of factors described in the Company's filings with the SEC, especially on Forms 10-K, 10-Q and 8-K. In various filings the Company has identified important factors that could cause actual results to differ from expected or historic results. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete list of all potential risks or uncertainties.
Contact:
ZA Consulting Inc.
David Zazoff
212.505.5976
116 West 23rd St.
Suite 500
New York, NY 10011
Source: Optex Systems Holdings, Inc.
Optex Systems Holdings Inc. (OTCBB:OPXS) is a featured defense stock and showcase company on Investor Ideas defense investor portals, Homelandefensestocks.com, BorderandPortsecurity.com and http://www.nationalhomelandsecurityknowledgebase.com/
Disclaimer/Discloscure: click here
Research Global Defense stocks with the defense stocks directory: click here
Visit Optex Systems Holdings Inc. (OTCBB:OPXS) Company Profile click here
Research defense stocks with the global defense stocks directory at Investorideas.com
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RICHARDSON, Texas, Aug. 13, 2009 -- Optex Systems Holdings, Inc. (OTCBB: OPXS.OB), a leading manufacturer of optical sighting systems and assemblies primarily for Department of Defense applications, today announced strong financial results for the Company's fiscal third quarter ended June 28, 2009.
For this period, the Company recorded increased revenues of $6.9 million as compared to revenues during the same period one year ago of $3.9 million, representing an increase of approximately 77%. During the nine months ended June 28, 2009, we recorded revenues of $21.0 million, as compared to revenue for the nine months ended June 28, 2008 of $13.9 million, an increase of $7.1 million or 51%. Revenues were up significantly across all product lines in the three months ended June 2009 as compared to the comparable period in 2008. Sales of the Company's periscope product lines increased significantly due to higher demand from General Dynamics.
During the quarter ended June 28, 2009, the Company recorded cost of goods sold of $6.4 million as opposed to $2.9 million during the quarter ended June 29, 2008, an increase of $3.5 million or 82.6%. This increase in cost of goods sold was primarily associated with increased revenue on certain of Company's lines in support of higher backlog and accelerated delivery schedules, in addition to increased non-cash intangible amortization charges resulting from the acquisition of Optex - Texas assets from Irvine Sensors Corporation on October 14, 2008.
The gross margin during the quarter ended June 28, 2009 was 8.6% of revenues as compared to a gross margin of 25.6% for the quarter ended June 29, 2008. Product margins decreased substantially to 15.7% for the quarter ended June 28, 2009 versus 25.6% for the quarter ended June 29, 2008 due to a shift in third quarter revenue mix toward less profitable contracts combined with increased labor costs related to the reallocation of labor from general and administrative expenses to manufacturing overhead in 2009. Margins were further impacted by higher non-cash intangible amortization charges allocable to cost of goods sold of $0.4 million, and increased reserves for valuations and warranties of $0.1 million, for a total of 7.1% of revenues in the quarter ended June 28, 2009, resulting in an overall increase in cost of goods sold of 7.1% in the quarter ended June 28, 2009.
During the three months ended June 28, 2009, the Company recorded a loss of $0.3 million, versus a $0.2 million loss during the three months ended June 29, 2008. The loss from operations includes a $0.4 million increase in non-cash amortization of intangible assets as a result of the October 14, 2008 acquisition of the Company from Irvine Sensors Corporation.
Danny Schoening, COO of the Company, commented, "We have experienced substantial improvement in our EBITDA over our prior year performance. Compared to 2008, Optex has increased its EBITDA by $2.4 million in the nine months ended June 28, 2009. This increase in EBITDA is primarily due to increased revenue and lower general and administrative costs. It is our goal and expectation that this trend will continue over the next 12 months as our product mix shifts towards more profitable programs, our non-cash amortization of intangible expenses decreases and we continue to pursue cost reductions."
During the three and nine months ended June 28, 2009, Optex revenues on legacy periscope programs increased significantly over the prior year while margins decreased. The legacy periscope contracts were awarded January 2003, and due to significant material price increases subsequent to the contract award date, the company is experiencing a loss on these contracts. It is expected that product margins on the Company's periscopes will increase over the next 12 months as some of the unprofitable legacy programs are completed and are replaced with potentially profitable new awards. Optex expects that the revenue on the legacy periscope programs will decrease in the last quarter of 2009, at which point it is anticipated that operating margins will increase significantly.
Optex is aggressively pursuing additional, potentially higher margin periscope business, including the May 2009 award of a multi-year Indefinite Delivery/Indefinite Quantity (IDIQ) type contract followed by the first delivery order from the U.S. Army's Tank-Automotive and Armaments Command (TACOM) division. If all government forecasted delivery orders against this IDIQ contract are awarded and if the Company were to share equally with the other supplier in the awarded releases, the total value of the contract to Optex could be valued at approximately $7.5 million over the next three years.
The complete third quarter report, including management's discussion and analysis, financial statements, and notes can be found on the Securities Exchange Commission's website at http://www.sec.gov/.
ABOUT OPTEX SYSTEMS
Optex, which was founded in 1987, is a Richardson, Texas-based ISO 9001:2008 certified concern, which manufactures optical sighting systems and assemblies primarily for Department of Defense (DOD) applications. Its products are installed on a majority of types of U.S. military land vehicles, such as the Abrams and Bradley fighting vehicles, Light Armored and Advanced Security Vehicles and have been selected for installation on the Stryker family of vehicles. Optex also manufactures and delivers numerous periscope configurations, rifle and surveillance sights and night vision optical assemblies. Optex delivers its products both directly to the military services and to prime contractors. For additional information, please visit the Company's website at http://www.optexsys.com/.
Safe Harbor Statement
This Press Release and other written reports and oral statements made from time to time by the Company may contain so-called "forward-looking statements," all of which are subject to risks and uncertainties. You can identify these forward-looking statements by their use of words such as "expects," "plans," "will," "estimates," "forecasts," "projects" and other words of similar meaning. You can identify them by the fact that they do not relate strictly to historical or current facts. These statements are likely to address the Company's growth strategy, financial results and product and development programs. You must carefully consider any such statement and should understand that many factors could cause actual results to differ from the Company's forward-looking statements. These factors include inaccurate assumptions and a broad variety of other risks and uncertainties, including some that are known and some that are not. No forward-looking statement can be guaranteed and actual future results may vary materially.
The Company does not assume the obligation to update any forward-looking statement. You should carefully evaluate such statements in light of factors described in the Company's filings with the SEC, especially on Forms 10-K, 10-Q and 8-K. In various filings the Company has identified important factors that could cause actual results to differ from expected or historic results. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete list of all potential risks or uncertainties.
Contact:
ZA Consulting Inc.
David Zazoff
212.505.5976
116 West 23rd St.
Suite 500
New York, NY 10011
Source: Optex Systems Holdings, Inc.
Optex Systems Holdings Inc. (OTCBB:OPXS) is a featured defense stock and showcase company on Investor Ideas defense investor portals, Homelandefensestocks.com, BorderandPortsecurity.com and http://www.nationalhomelandsecurityknowledgebase.com/
Disclaimer/Discloscure: click here
Research Global Defense stocks with the defense stocks directory: click here
Visit Optex Systems Holdings Inc. (OTCBB:OPXS) Company Profile click here
Research defense stocks with the global defense stocks directory at Investorideas.com
click here:
http://www.investorideas.com/Companies/HomelandDefense/Stock_List.asp
Tuesday, July 28, 2009
Defense Stock News - Force Protection (NASDAQ: FRPT) Receives $52.8 Million Order for Buffalo Route Clearance Vehicles U.S. Army Orders 48 Additional
Defense Stock News - Force Protection (NASDAQ: FRPT) Receives $52.8 Million Order for Buffalo Route Clearance Vehicles U.S. Army Orders 48 Additional Buffalo Vehicles
Lease Extended for Buffalo Manufacturing Facility
LADSON, S.C.--(BUSINESS WIRE)--Force Protection, Inc. (NASDAQ: FRPT), a leading designer, developer and manufacturer of survivability solutions and provider of total life cycle support for those products, today announced that it has received a modification to contract W56HZV-08-C-0028 from the United States Army Tank- automotive and Armaments Command (TACOM) for approximately $52.8 million for 48 Buffalo Mine Protected Clearance Vehicles (MPCV). This contract modification is subject to definitization.
The work will be performed in Ladson, SC and is expected to be completed prior to January 31, 2010. As a result of this award and a continued commitment to the Buffalo program, Force Protection on July 27th, 2009 amended and extended its lease for building 3 at its Ladson, SC facility until June 30, 2014.
Michael Moody, Chief Executive Officer of Force Protection, commented, “This order from TACOM is representative of the ongoing demand and requirements for the Buffalo as an integral component of the United States Army’s route clearance companies for the long term. The extension of our lease for the Buffalo manufacturing facility is an indication of our commitment to meeting the current and future requirements for Buffalo and its vital mission. ”
About Force Protection, Inc.
Force Protection, Inc. is a leading American designer, developer and manufacturer of survivability solutions, predominantly blast- and ballistic-protected wheeled vehicles currently deployed by the U.S. military and its allies to support armed forces and security personnel in conflict zones. The Company’s specialty vehicles, the Cougar, the Buffalo and the Cheetah, are designed specifically for reconnaissance and urban operations and to protect their occupants from landmines, hostile fire, and improvised explosive devices (IEDs, commonly referred to as roadside bombs). The Company also is the developer and manufacturer of ForceArmor™, an armor package providing superior protection against explosively formed projectiles (EFPs), now available for a wide range of tactical-wheeled vehicles. The Company is one of the original developers and primary providers of vehicles for the U.S. military’s Mine Resistant Ambush Protected, or MRAP, vehicle program. For more information on Force Protection and its vehicles, visit www.forceprotection.net.
Force Protection, Inc. Safe Harbor Language
This press release contains forward looking statements that are not historical facts, including statements about our beliefs and expectations. These statements are based on beliefs and assumptions of Force Protection’s management, and on information currently available to management. These forward looking statements include, among other things: the growth and demand for Force Protection’s vehicles, including the Buffalo vehicle; the rate at which the Company will be able to produce these vehicles; its expected work completion dates for the vehicles and the ability to meet current and future requirements; and the Company’s expected financial and operating results, including its revenues and cash flow, for future periods. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update any of them publicly in light of new information or future events. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statements. Examples of these factors include, but are not limited to, the ability to effectively manage the risks in the Company’s business; the ability to develop new technologies and products and the acceptance of these technologies and products; the ability to obtain and complete new orders for its vehicles and products; the Company’s ability to identify and remedy its internal control weaknesses and deficiencies; and other risk factors and cautionary statements listed in the Company’s periodic reports filed with the Securities and Exchange Commission, including the risks set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, as updated in the Quarterly Report on Form 10-Q for the period ended March 31, 2009.
Contacts Force Protection, Inc.Tommy Pruitt, 843-574-3866
Research defense stocks with the global defense stocks directory at Investorideas.com
click here:
http://www.investorideas.com/Companies/HomelandDefense/Stock_List.asp
Lease Extended for Buffalo Manufacturing Facility
LADSON, S.C.--(BUSINESS WIRE)--Force Protection, Inc. (NASDAQ: FRPT), a leading designer, developer and manufacturer of survivability solutions and provider of total life cycle support for those products, today announced that it has received a modification to contract W56HZV-08-C-0028 from the United States Army Tank- automotive and Armaments Command (TACOM) for approximately $52.8 million for 48 Buffalo Mine Protected Clearance Vehicles (MPCV). This contract modification is subject to definitization.
The work will be performed in Ladson, SC and is expected to be completed prior to January 31, 2010. As a result of this award and a continued commitment to the Buffalo program, Force Protection on July 27th, 2009 amended and extended its lease for building 3 at its Ladson, SC facility until June 30, 2014.
Michael Moody, Chief Executive Officer of Force Protection, commented, “This order from TACOM is representative of the ongoing demand and requirements for the Buffalo as an integral component of the United States Army’s route clearance companies for the long term. The extension of our lease for the Buffalo manufacturing facility is an indication of our commitment to meeting the current and future requirements for Buffalo and its vital mission. ”
About Force Protection, Inc.
Force Protection, Inc. is a leading American designer, developer and manufacturer of survivability solutions, predominantly blast- and ballistic-protected wheeled vehicles currently deployed by the U.S. military and its allies to support armed forces and security personnel in conflict zones. The Company’s specialty vehicles, the Cougar, the Buffalo and the Cheetah, are designed specifically for reconnaissance and urban operations and to protect their occupants from landmines, hostile fire, and improvised explosive devices (IEDs, commonly referred to as roadside bombs). The Company also is the developer and manufacturer of ForceArmor™, an armor package providing superior protection against explosively formed projectiles (EFPs), now available for a wide range of tactical-wheeled vehicles. The Company is one of the original developers and primary providers of vehicles for the U.S. military’s Mine Resistant Ambush Protected, or MRAP, vehicle program. For more information on Force Protection and its vehicles, visit www.forceprotection.net.
Force Protection, Inc. Safe Harbor Language
This press release contains forward looking statements that are not historical facts, including statements about our beliefs and expectations. These statements are based on beliefs and assumptions of Force Protection’s management, and on information currently available to management. These forward looking statements include, among other things: the growth and demand for Force Protection’s vehicles, including the Buffalo vehicle; the rate at which the Company will be able to produce these vehicles; its expected work completion dates for the vehicles and the ability to meet current and future requirements; and the Company’s expected financial and operating results, including its revenues and cash flow, for future periods. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update any of them publicly in light of new information or future events. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statements. Examples of these factors include, but are not limited to, the ability to effectively manage the risks in the Company’s business; the ability to develop new technologies and products and the acceptance of these technologies and products; the ability to obtain and complete new orders for its vehicles and products; the Company’s ability to identify and remedy its internal control weaknesses and deficiencies; and other risk factors and cautionary statements listed in the Company’s periodic reports filed with the Securities and Exchange Commission, including the risks set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, as updated in the Quarterly Report on Form 10-Q for the period ended March 31, 2009.
Contacts Force Protection, Inc.Tommy Pruitt, 843-574-3866
Research defense stocks with the global defense stocks directory at Investorideas.com
click here:
http://www.investorideas.com/Companies/HomelandDefense/Stock_List.asp
Thursday, July 16, 2009
Optex Systems (OTCBB: OPXS.OB), Receives Invitation to Participate in the 2nd Annual Heavy Vehicles Summit
Optex Systems (OTCBB: OPXS.OB), Receives Invitation to Participate in the 2nd Annual Heavy Vehicles Summit
RICHARDSON, Texas, July 16, 2009 -- Optex Systems Holdings, Inc. (OTCBB: OPXS.OB), a leading manufacturer of optical sighting systems and assemblies primarily for Department of Defense applications, today announced that they received an invitation from the Institute for Defense and Government Advancement (IDGA) to be a participant in the 2nd Annual Heavy Vehicles Summit. The Second Annual Heavy Vehicle Summit, www.heavyvehiclessummit.com, will be held on September 14th -16th in Vienna, Virginia.
The summit is designed to focus on the most important and relevant aspects of heavy vehicle technology, modernization and advancements. It provides a forum for those who have a personal and professional stake in heavy vehicle technology to explore new technologies. Heavy vehicles such as the Abrams and Bradley are mission critical to ensuring the success of overseas military contingency operations. Currently, through its relationship with General Dynamics Land Systems and TACOM (Tank-Automotive and Armaments Command), Optex Systems provides its Laser Protected Periscopes and Fire Control Sighting Systems for both the Bradley fighting vehicle and the Abrams tank.
Danny Schoening, COO of Optex Systems, commented, "Optex continues to support our ground vehicle customers like General Dynamics Land Systems and TACOM by attending and sponsoring information summits. The Heavy Vehicles Summits will focus on the modernization, the survivability, and the future plans on many of the vehicles we support."
ABOUT OPTEX SYSTEMS
Optex, which was founded in 1987, is a Richardson, Texas-based ISO 9001:2008 certified concern, which manufactures optical sighting systems and assemblies primarily for Department of Defense (DOD) applications. Its products are installed on a majority of types of U.S. military land vehicles, such as the Abrams and Bradley fighting vehicles, Light Armored and Advanced Security Vehicles and have been selected for installation on the Stryker family of vehicles. Optex also manufactures and delivers numerous periscope configurations, rifle and surveillance sights and night vision optical assemblies. Optex delivers its products both directly to the military services and to prime contractors. For additional information, please visit the Company's website at www.optexsys.com.
Safe Harbor Statement
This Press Release and other written reports and oral statements made from time to time by the Company may contain so-called "forward-looking statements," all of which are subject to risks and uncertainties. You can identify these forward-looking statements by their use of words such as "expects," "plans," "will," "estimates," "forecasts," "projects" and other words of similar meaning. You can identify them by the fact that they do not relate strictly to historical or current facts. These statements are likely to address the Company's growth strategy, financial results and product and development programs. You must carefully consider any such statement and should understand that many factors could cause actual results to differ from the Company's forward-looking statements. These factors include inaccurate assumptions and a broad variety of other risks and uncertainties, including some that are known and some that are not. No forward-looking statement can be guaranteed and actual future results may vary materially.
The Company does not assume the obligation to update any forward-looking statement. You should carefully evaluate such statements in light of factors described in the Company's filings with the SEC, especially on Forms 10-K, 10-Q and 8-K. In various filings the Company has identified important factors that could cause actual results to differ from expected or historic results. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete list of all potential risks or uncertainties.
Contact:
ZA Consulting Inc.
David Zazoff
212.505.5976
116 West 23rd St.
Suite 500
New York, NY 10011
Source: Optex Systems Holdings, Inc.; General Dynamics Corp.
Optex Systems Holdings Inc. (OTCBB:OPXS) is a featured defense stock and showcase company on Investor Ideas defense investor portals, Homelandefensestocks.com, BorderandPortsecurity.com and http://www.nationalhomelandsecurityknowledgebase.com/
Disclaimer/Discloscure: click here
Research Global Defense stocks with the defense stocks directory: click here
Visit Optex Systems Holdings Inc. (OTCBB:OPXS) Company Profile click here
Research defense stocks with the global defense stocks directory at Investorideas.com
click here:
http://www.investorideas.com/Companies/HomelandDefense/Stock_List.asp
RICHARDSON, Texas, July 16, 2009 -- Optex Systems Holdings, Inc. (OTCBB: OPXS.OB), a leading manufacturer of optical sighting systems and assemblies primarily for Department of Defense applications, today announced that they received an invitation from the Institute for Defense and Government Advancement (IDGA) to be a participant in the 2nd Annual Heavy Vehicles Summit. The Second Annual Heavy Vehicle Summit, www.heavyvehiclessummit.com, will be held on September 14th -16th in Vienna, Virginia.
The summit is designed to focus on the most important and relevant aspects of heavy vehicle technology, modernization and advancements. It provides a forum for those who have a personal and professional stake in heavy vehicle technology to explore new technologies. Heavy vehicles such as the Abrams and Bradley are mission critical to ensuring the success of overseas military contingency operations. Currently, through its relationship with General Dynamics Land Systems and TACOM (Tank-Automotive and Armaments Command), Optex Systems provides its Laser Protected Periscopes and Fire Control Sighting Systems for both the Bradley fighting vehicle and the Abrams tank.
Danny Schoening, COO of Optex Systems, commented, "Optex continues to support our ground vehicle customers like General Dynamics Land Systems and TACOM by attending and sponsoring information summits. The Heavy Vehicles Summits will focus on the modernization, the survivability, and the future plans on many of the vehicles we support."
ABOUT OPTEX SYSTEMS
Optex, which was founded in 1987, is a Richardson, Texas-based ISO 9001:2008 certified concern, which manufactures optical sighting systems and assemblies primarily for Department of Defense (DOD) applications. Its products are installed on a majority of types of U.S. military land vehicles, such as the Abrams and Bradley fighting vehicles, Light Armored and Advanced Security Vehicles and have been selected for installation on the Stryker family of vehicles. Optex also manufactures and delivers numerous periscope configurations, rifle and surveillance sights and night vision optical assemblies. Optex delivers its products both directly to the military services and to prime contractors. For additional information, please visit the Company's website at www.optexsys.com.
Safe Harbor Statement
This Press Release and other written reports and oral statements made from time to time by the Company may contain so-called "forward-looking statements," all of which are subject to risks and uncertainties. You can identify these forward-looking statements by their use of words such as "expects," "plans," "will," "estimates," "forecasts," "projects" and other words of similar meaning. You can identify them by the fact that they do not relate strictly to historical or current facts. These statements are likely to address the Company's growth strategy, financial results and product and development programs. You must carefully consider any such statement and should understand that many factors could cause actual results to differ from the Company's forward-looking statements. These factors include inaccurate assumptions and a broad variety of other risks and uncertainties, including some that are known and some that are not. No forward-looking statement can be guaranteed and actual future results may vary materially.
The Company does not assume the obligation to update any forward-looking statement. You should carefully evaluate such statements in light of factors described in the Company's filings with the SEC, especially on Forms 10-K, 10-Q and 8-K. In various filings the Company has identified important factors that could cause actual results to differ from expected or historic results. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete list of all potential risks or uncertainties.
Contact:
ZA Consulting Inc.
David Zazoff
212.505.5976
116 West 23rd St.
Suite 500
New York, NY 10011
Source: Optex Systems Holdings, Inc.; General Dynamics Corp.
Optex Systems Holdings Inc. (OTCBB:OPXS) is a featured defense stock and showcase company on Investor Ideas defense investor portals, Homelandefensestocks.com, BorderandPortsecurity.com and http://www.nationalhomelandsecurityknowledgebase.com/
Disclaimer/Discloscure: click here
Research Global Defense stocks with the defense stocks directory: click here
Visit Optex Systems Holdings Inc. (OTCBB:OPXS) Company Profile click here
Research defense stocks with the global defense stocks directory at Investorideas.com
click here:
http://www.investorideas.com/Companies/HomelandDefense/Stock_List.asp
Wednesday, July 15, 2009
The Changing Face of the Defense Industry; an Exclusive Interview with Mr. Brian W. Ruttenbur, Managing Director at Morgan Keegan
The Changing Face of the Defense Industry; an Exclusive Interview with Mr. Brian W. Ruttenbur, Managing Director at Morgan Keegan
Analyst Interview on Defense Budget and Commentary from Defense Company, Optex Systems Holdings, Inc. (OTCBB: OPXS)
POINT ROBERTS, Wash., DELTA, B.C. –July 15, 2009 – www.HomelandDefenseStocks.com, a leading global investor and industry portal for the defense and security sector, within Investorideas.com, provides investors and defense industry participants, new Defense Budget commentary from defense analyst, Mr. Brian W. Ruttenbur, Managing Director at Morgan Keegan.
Mr. Ruttenbur discusses the recent changes in the defense budget and the changing face of the defense industry and how it impacts both companies and investors.
One public company, Optex Systems Holdings, Inc. (OTCBB: OPXS), continues to see the flow down of these trends in government spending. According to Danny Schoening, Chief Operating Officer, “The army is committed to a rigorous maintenance and repair program in these very harsh operating conditions in addition to their new vehicle supply. Further, the demand for night vision equipment and weapon sights remains high.”
Previous Budget related releases from Homelanddefensestocks.com:
Defense Budget Winners and Losers May 6 2009
Defense Investing- Cyber Security: The Next Great Defense Opportunity June 16, 2009
The Changing Face of the Defense Industry
Homelanddefensestocks.com (HDS) June 2009 Interview with Mr. Brian W. Ruttenbur, Managing Director at Morgan Keegan & Company, Inc., Research Division, who covers the security, safety, and defense sector. Mr. Ruttenbur discusses the recent changes in the defense budget and the changing face of the defense industry.
HDS Question
Brian, the defense industry is currently undergoing some major changes, with the recent Budget announcements of 663.8 billion for fiscal year 2010, with a base budget of $533.8 billion, an increase 4.0% from the 2009 budget of $513.3 billion, plus $130 billion for ongoing military operations in
Afghanistan and Iraq. Within the budget there is a shift in the direction of spending, concentrating on the current wars and a mandate to monitor spending and eliminate waste. In that - can you give us some insight as to what companies are impacted the most and how?
Mr. Brian W. Ruttenbur Answer -
Companies that focus on basic troop support – the “beans and bullets” – will be hurt by declining troop levels and supplemental spending over the next several years; those focused on areas we think demand will continue to grow in (such as maintenance/refurbishment, cybersecurity and ISR) we expect will continue to grow and perform well. Additionally, we believe international defense spending will grow at a faster rate than domestic. Companies we see doing well include L-3 (focus on defense electronics & maintenance), Raytheon (focus on defense electronics, strong international presence), Lockheed Martin (strong international growth opportunities particularly w/ F-35), and General Dynamics (should do well with the military’s large reset bill – Army projected to spend $13+ billion annually over several years). The talk of reform and reducing waste will most likely not result in any major changes that will significantly impact the industry, though it may put additional pressure on companies to fix operational issues (such as those at Northrop Grumman).
HDS Question -
For investors who have followed the defense sector in the past - there are new trends to factor in. What do you see as the most significant short term trends in the defense industry and how can investors play into those?
Mr. Brian W. Ruttenbur Answer -
Short term, we see strong demand for ISR assets – IR cameras, UAVs, spy/surveillance planes, as well as training and logistics support for the developing Iraqi / Afghan armies. We also expect growth in cybersecurity spending, which will be spread across the DoD, DHS, intelligence agencies, and civilian government agencies. Despite the drawdown in Iraq, we see no near term decline in core U.S. defense spending. Given a flattening of defense growth combined with the solid balance sheets of most defense contractors, we expect M&A activity to begin picking up, and be particularly strong around the 2010/2011 timeframe. We also note that we expect the government to move toward using more fixed price contracts. While we expect developmental work will remain largely cost-plus, we see full run rate procurement work becoming a higher proportion fixed price over time. While this may add some risk to programs, we believe that it may also provide opportunities to companies which are able to efficiently run their operations, as fixed price contracts traditionally are awarded with a higher potential margin rate.
HDS Question
The defense industry is also changing in terms of the global spending picture and several US companies benefited from the February International Defence Exhibition & Conference 2009 (IDEX) in Abu Dhabi, where an estimated $ 5 billion was spent. How do you see global spending impacting the markets,
and what do North American companies have to do to participate?
Mr. Brian W. Ruttenbur Answer -
We expect that growth international defense spending will outpace domestic spending over the next several years (though the U.S. will remain far and away the largest single defense customer). In particular, we see strong opportunities with India (expected $30+ billion over next 10 years to modernize its forces), Australia (recently completed long term defense outlook, expects 3% real growth annually through 2018 off $13 billion base), South Korea/Japan (given heightened North Korean tensions and the rise of China), and in the Middle East (particularly Saudi Arabia). We believe it will be important for U.S. companies to be able to match their offerings to local needs, and be able to provide and support last generation technology to customers who may not have the resources of the U.S. (for instance, Lockheed Martin’s continued sales of F-16s and Boeing’s concept of creating a stealth F-15 for far cheaper than the F-35).
HDS Question
Brian since you have covered the Homeland Security sector from its beginnings, how do you think the US is positioned for potential threats, and is the new Government correct in its thinking and focus on cyber security?
And following on to the previous question - with China and other global powers increasing their defense and military spending - is the current Government in line with the rest of the world?
Mr. Brian W. Ruttenbur Answer -
We believe the administration is moving in the right direction with its increased focus on cybersecurity. This was an area that had been relatively neglected until near the end of the Bush administration, and given the increasing interconnectedness and therefore vulnerability of modern information, we see this as a vital portion of Homeland Security efforts (i.e. the concern over whether hackers could shut down the electric system, and the stealing of classified data on the F-35 program).
Compared with other global powers, the U.S. is still far and away the largest spender on defense. The Stockholm International Peace Research Institute recently came out with its 2008 arms spending report, indicating that global defense spending neared $1.5 trillion in 2008. It reported that the U.S. spent $607 billion in 2008 (42% of the global total), and the next nine countries spent a combined $476 billion. However, the rate of growth in certain foreign countries appears to be higher. While the U.S. grew 9.7% in 2008, we see its growth rate declining to a low to mid single digit rate going forward, while countries such as China (which grew spending 10% in 2008 to become the number 2 spender overall) and Russia (grew spending 13% in 2008 to reach 5th overall) will most likely continue their high rates of growth. While we expect international spending to grow faster than U.S. spending, we note that we do not believe any foreign nation, or group of foreign nations, will reach a point where they could compete against the U.S. in a conventional sense within the next several decades.
Companies Mentioned
Boeing (BA NR - $52.83)
General Dynamics (GD O/M - $60.46)
Lockheed Martin (LMT O/M - $85.85)
L-3 Communications (LLL O/S - $74.97)
Northrop Grumman (NOC M/M - $48.70)
Raytheon (RTN O/M - $45.95)
Disclosures
The research analyst responsible for the preparation of this report does not hold investment positions of any nature in the securities of this issuer. The research analyst responsible for the preparation of this report is compensated in part on the firm's investment banking revenue but is not compensated based upon specific investment banking services transactions.
Morgan Keegan & Co., Inc. expects to receive or intends to seek compensation for investment banking services from LLL, security, in the next 3 months.
Optex Systems Holdings, Inc. (OTCBB: OPXS) is a featured defense stock and showcase company on Investor Ideas defense investor portals, Homelandefensestocks.com, BorderandPortsecurity.com and http://www.nationalhomelandsecurityknowledgebase.com ( See disclosure below )
Visit Optex Systems Holdings, Inc. (OTCBB: OPXS) Company Profile: http://www.investorideas.com/CO/OPTEX/
ABOUT OPTEX SYSTEMS - Optex, which was founded in 1987, is a Richardson, Texas-based ISO 9001:2008 certified concern, which manufactures optical sighting systems and assemblies primarily for Department of Defense (DOD) applications. Its products are installed on a majority of types of U.S. military land vehicles, such as the Abrams and Bradley fighting vehicles, Light Armored and Advanced Security Vehicles and have been selected for installation on the Stryker family of vehicles. Optex also manufactures and delivers numerous periscope configurations, rifle and surveillance sights and night vision optical assemblies. Optex delivers its products both directly to the military services and to prime contractors. Company's website: www.optexsys.com
About Homelanddefensestocks.com- HomelandDefenseStocks.com Portal is a global meeting place for investors and industry following defense and security, within Investorideas.com. Global visitors use the site daily to research the latest news, articles, audio, research reports and stock directories.
Defense Stocks Directory: http://www.investorideas.com/Companies/HomelandDefense/Stock_List.asp
About InvestorIdeas.com:
InvestorIdeas.com is a leading global investor and industry research resource portal specialized in sector investing covering over thirty industry sectors and global markets including China, India, the Middle East and Australia.
InvestorIdeas.com Disclaimer.: www.InvestorIdeas.com/About/Disclaimer.asp
Our sites do not make recommendations, but offer information portals to investors to research news, articles, stock lists and recent research. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. We attempt to research thoroughly, but we offer no guarantees as to the accuracy of any information presented. All information relating to featured companies is sourced from public documents and/ or the company and is not the opinion of our web sites. This site is compensated by featured companies, news submissions and online advertising. OPXS Disclosure: Optex is a featured showcase company and compensates Investorideas.com $3000 month and sixty two thousand 144 shares issued quarterly.
For more information contact: Dawn Van Zant 800.665.0411 Email: dvanzant@HomelandDefenseStocks.com
Source: HomelandDefenseStocks.com, Investor Ideas, Optex Systems Holdings Inc. (OTCBB: OPXS)Research defense stocks with the global defense stocks directory at Investorideas.com
click here:
http://www.investorideas.com/Companies/HomelandDefense/Stock_List.asp
Analyst Interview on Defense Budget and Commentary from Defense Company, Optex Systems Holdings, Inc. (OTCBB: OPXS)
POINT ROBERTS, Wash., DELTA, B.C. –July 15, 2009 – www.HomelandDefenseStocks.com, a leading global investor and industry portal for the defense and security sector, within Investorideas.com, provides investors and defense industry participants, new Defense Budget commentary from defense analyst, Mr. Brian W. Ruttenbur, Managing Director at Morgan Keegan.
Mr. Ruttenbur discusses the recent changes in the defense budget and the changing face of the defense industry and how it impacts both companies and investors.
One public company, Optex Systems Holdings, Inc. (OTCBB: OPXS), continues to see the flow down of these trends in government spending. According to Danny Schoening, Chief Operating Officer, “The army is committed to a rigorous maintenance and repair program in these very harsh operating conditions in addition to their new vehicle supply. Further, the demand for night vision equipment and weapon sights remains high.”
Previous Budget related releases from Homelanddefensestocks.com:
Defense Budget Winners and Losers May 6 2009
Defense Investing- Cyber Security: The Next Great Defense Opportunity June 16, 2009
The Changing Face of the Defense Industry
Homelanddefensestocks.com (HDS) June 2009 Interview with Mr. Brian W. Ruttenbur, Managing Director at Morgan Keegan & Company, Inc., Research Division, who covers the security, safety, and defense sector. Mr. Ruttenbur discusses the recent changes in the defense budget and the changing face of the defense industry.
HDS Question
Brian, the defense industry is currently undergoing some major changes, with the recent Budget announcements of 663.8 billion for fiscal year 2010, with a base budget of $533.8 billion, an increase 4.0% from the 2009 budget of $513.3 billion, plus $130 billion for ongoing military operations in
Afghanistan and Iraq. Within the budget there is a shift in the direction of spending, concentrating on the current wars and a mandate to monitor spending and eliminate waste. In that - can you give us some insight as to what companies are impacted the most and how?
Mr. Brian W. Ruttenbur Answer -
Companies that focus on basic troop support – the “beans and bullets” – will be hurt by declining troop levels and supplemental spending over the next several years; those focused on areas we think demand will continue to grow in (such as maintenance/refurbishment, cybersecurity and ISR) we expect will continue to grow and perform well. Additionally, we believe international defense spending will grow at a faster rate than domestic. Companies we see doing well include L-3 (focus on defense electronics & maintenance), Raytheon (focus on defense electronics, strong international presence), Lockheed Martin (strong international growth opportunities particularly w/ F-35), and General Dynamics (should do well with the military’s large reset bill – Army projected to spend $13+ billion annually over several years). The talk of reform and reducing waste will most likely not result in any major changes that will significantly impact the industry, though it may put additional pressure on companies to fix operational issues (such as those at Northrop Grumman).
HDS Question -
For investors who have followed the defense sector in the past - there are new trends to factor in. What do you see as the most significant short term trends in the defense industry and how can investors play into those?
Mr. Brian W. Ruttenbur Answer -
Short term, we see strong demand for ISR assets – IR cameras, UAVs, spy/surveillance planes, as well as training and logistics support for the developing Iraqi / Afghan armies. We also expect growth in cybersecurity spending, which will be spread across the DoD, DHS, intelligence agencies, and civilian government agencies. Despite the drawdown in Iraq, we see no near term decline in core U.S. defense spending. Given a flattening of defense growth combined with the solid balance sheets of most defense contractors, we expect M&A activity to begin picking up, and be particularly strong around the 2010/2011 timeframe. We also note that we expect the government to move toward using more fixed price contracts. While we expect developmental work will remain largely cost-plus, we see full run rate procurement work becoming a higher proportion fixed price over time. While this may add some risk to programs, we believe that it may also provide opportunities to companies which are able to efficiently run their operations, as fixed price contracts traditionally are awarded with a higher potential margin rate.
HDS Question
The defense industry is also changing in terms of the global spending picture and several US companies benefited from the February International Defence Exhibition & Conference 2009 (IDEX) in Abu Dhabi, where an estimated $ 5 billion was spent. How do you see global spending impacting the markets,
and what do North American companies have to do to participate?
Mr. Brian W. Ruttenbur Answer -
We expect that growth international defense spending will outpace domestic spending over the next several years (though the U.S. will remain far and away the largest single defense customer). In particular, we see strong opportunities with India (expected $30+ billion over next 10 years to modernize its forces), Australia (recently completed long term defense outlook, expects 3% real growth annually through 2018 off $13 billion base), South Korea/Japan (given heightened North Korean tensions and the rise of China), and in the Middle East (particularly Saudi Arabia). We believe it will be important for U.S. companies to be able to match their offerings to local needs, and be able to provide and support last generation technology to customers who may not have the resources of the U.S. (for instance, Lockheed Martin’s continued sales of F-16s and Boeing’s concept of creating a stealth F-15 for far cheaper than the F-35).
HDS Question
Brian since you have covered the Homeland Security sector from its beginnings, how do you think the US is positioned for potential threats, and is the new Government correct in its thinking and focus on cyber security?
And following on to the previous question - with China and other global powers increasing their defense and military spending - is the current Government in line with the rest of the world?
Mr. Brian W. Ruttenbur Answer -
We believe the administration is moving in the right direction with its increased focus on cybersecurity. This was an area that had been relatively neglected until near the end of the Bush administration, and given the increasing interconnectedness and therefore vulnerability of modern information, we see this as a vital portion of Homeland Security efforts (i.e. the concern over whether hackers could shut down the electric system, and the stealing of classified data on the F-35 program).
Compared with other global powers, the U.S. is still far and away the largest spender on defense. The Stockholm International Peace Research Institute recently came out with its 2008 arms spending report, indicating that global defense spending neared $1.5 trillion in 2008. It reported that the U.S. spent $607 billion in 2008 (42% of the global total), and the next nine countries spent a combined $476 billion. However, the rate of growth in certain foreign countries appears to be higher. While the U.S. grew 9.7% in 2008, we see its growth rate declining to a low to mid single digit rate going forward, while countries such as China (which grew spending 10% in 2008 to become the number 2 spender overall) and Russia (grew spending 13% in 2008 to reach 5th overall) will most likely continue their high rates of growth. While we expect international spending to grow faster than U.S. spending, we note that we do not believe any foreign nation, or group of foreign nations, will reach a point where they could compete against the U.S. in a conventional sense within the next several decades.
Companies Mentioned
Boeing (BA NR - $52.83)
General Dynamics (GD O/M - $60.46)
Lockheed Martin (LMT O/M - $85.85)
L-3 Communications (LLL O/S - $74.97)
Northrop Grumman (NOC M/M - $48.70)
Raytheon (RTN O/M - $45.95)
Disclosures
The research analyst responsible for the preparation of this report does not hold investment positions of any nature in the securities of this issuer. The research analyst responsible for the preparation of this report is compensated in part on the firm's investment banking revenue but is not compensated based upon specific investment banking services transactions.
Morgan Keegan & Co., Inc. expects to receive or intends to seek compensation for investment banking services from LLL, security, in the next 3 months.
Optex Systems Holdings, Inc. (OTCBB: OPXS) is a featured defense stock and showcase company on Investor Ideas defense investor portals, Homelandefensestocks.com, BorderandPortsecurity.com and http://www.nationalhomelandsecurityknowledgebase.com ( See disclosure below )
Visit Optex Systems Holdings, Inc. (OTCBB: OPXS) Company Profile: http://www.investorideas.com/CO/OPTEX/
ABOUT OPTEX SYSTEMS - Optex, which was founded in 1987, is a Richardson, Texas-based ISO 9001:2008 certified concern, which manufactures optical sighting systems and assemblies primarily for Department of Defense (DOD) applications. Its products are installed on a majority of types of U.S. military land vehicles, such as the Abrams and Bradley fighting vehicles, Light Armored and Advanced Security Vehicles and have been selected for installation on the Stryker family of vehicles. Optex also manufactures and delivers numerous periscope configurations, rifle and surveillance sights and night vision optical assemblies. Optex delivers its products both directly to the military services and to prime contractors. Company's website: www.optexsys.com
About Homelanddefensestocks.com- HomelandDefenseStocks.com Portal is a global meeting place for investors and industry following defense and security, within Investorideas.com. Global visitors use the site daily to research the latest news, articles, audio, research reports and stock directories.
Defense Stocks Directory: http://www.investorideas.com/Companies/HomelandDefense/Stock_List.asp
About InvestorIdeas.com:
InvestorIdeas.com is a leading global investor and industry research resource portal specialized in sector investing covering over thirty industry sectors and global markets including China, India, the Middle East and Australia.
InvestorIdeas.com Disclaimer.: www.InvestorIdeas.com/About/Disclaimer.asp
Our sites do not make recommendations, but offer information portals to investors to research news, articles, stock lists and recent research. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. We attempt to research thoroughly, but we offer no guarantees as to the accuracy of any information presented. All information relating to featured companies is sourced from public documents and/ or the company and is not the opinion of our web sites. This site is compensated by featured companies, news submissions and online advertising. OPXS Disclosure: Optex is a featured showcase company and compensates Investorideas.com $3000 month and sixty two thousand 144 shares issued quarterly.
For more information contact: Dawn Van Zant 800.665.0411 Email: dvanzant@HomelandDefenseStocks.com
Source: HomelandDefenseStocks.com, Investor Ideas, Optex Systems Holdings Inc. (OTCBB: OPXS)Research defense stocks with the global defense stocks directory at Investorideas.com
click here:
http://www.investorideas.com/Companies/HomelandDefense/Stock_List.asp
Thursday, July 9, 2009
GE to Transform U.S. Military Base into Smart Grid Showcase
GE to Transform U.S. Military Base into Smart Grid Showcase
Awarded $2 Million in Federal stimulus funds for new, smart microgrid demonstration project that will serve as a model for maximizing energy security, improving efficiency, and supplying clean, renewable power for military bases
NISKAYUNA, N.Y--With the goals of increasing energy security, energy efficiency, and promoting cleaner, alternative energy at U.S. military bases, GE today announced it has been awarded $2 million in Federal stimulus funding from the U.S. Department of Defense (DOD) for a smart microgrid demonstration project at Twentynine Palms Base, California. The base is the world's largest Marine Corps Base and it is the premier training facility in the world for Marine operations, drawing military personnel from all over the world for Combined Arms Exercises. GE and the Environmental Security Technology Certification Program (ESTCP) office at DOD are in the process of finalizing a contract for the project.
GE will design and demonstrate a smart energy management system that enables installations to more optimally manage on-site power generation and energy storage, while interacting with the regional electrical grid in a more intelligent and efficient way. Additionally, GE’s system will provide enhanced capabilities for installations to integrate renewable resources, such as solar energy, to help meet their electricity needs and reduce their carbon footprints.
According to the 2009 Defense Appropriations Act, U.S. military installations consumed 3.8 billion kilowatt-hours of electricity last year, enough electricity to power 350,000 households in the United States. In addition to high energy costs for these installations, critical defense facilities must operate seamlessly through a power outage or other infrastructure disturbance. These are two key challenges that a smarter, more intelligent grid management system will help to address.
“GE’s smart microgrid demonstration project will show how a more intelligent energy management system can help military bases further safeguard the operation of their power systems while also reducing overall energy costs,” said John Kern, Manager of GE’s Smart Grid Research Lab. “This project will serve as a model for other bases and it also will demonstrate how similar types of facilities, such as industrial complexes and universities, can take advantage of a smarter grid.”
U.S. military bases typically manage power in two ways: local power is generated on site for critical facility needs; and, the bases are connected to the larger U.S. electrical grid network. As part of the project, GE will provide an enhanced suite of microgrid control system technologies that will enable a military base to more effectively manage its local energy resources as well as the interaction with the larger electrical grid network.
To develop this new system, researchers at GE Global Research in Upstate New York will develop and incorporate advanced algorithms and computational decision engines into a microgrid controller built by GE Digital Energy. This microgrid controller will optimize the power generation and distribution within the microgrid. GE Fanuc Intelligent Platforms will also integrate many of these advanced technologies into a new supervisory control and software system that can span power generation and distribution as well as major power consumers within the microgrid.
GE has completed considerable research and development in microgrids in recent years for both the U.S. Department of Energy and the Canadian government. Because microgrids are essentially self-contained systems, they have great potential for enabling a higher penetration of clean, renewable power sources into the electrical distribution network. For contained complexes like a military base that can supplement their own power needs with power generation onsite, microgrids can be an attractive option for bringing more renewable power online.
About GE Global Research
GE Global Research is one of the world's most diversified industrial research labs, providing innovative technology for all of GE's businesses. Global Research has been the cornerstone of GE technology for more than 100 years, developing breakthrough innovations in areas such as medical imaging, energy generation technology, jet engines and lighting. GE Global Research is headquartered in Niskayuna, New York and has facilities in Bangalore, India, Shanghai, China and Munich, Germany. Visit GE Global Research at www.ge.com/research.
Contacts GEPatrick Jarvis, 518-387-6284 (Media)patrick.jarvis@ge.com Research defense stocks with the global defense stocks directory at Investorideas.com
click here:
http://www.investorideas.com/Companies/HomelandDefense/Stock_List.asp
Awarded $2 Million in Federal stimulus funds for new, smart microgrid demonstration project that will serve as a model for maximizing energy security, improving efficiency, and supplying clean, renewable power for military bases
NISKAYUNA, N.Y--With the goals of increasing energy security, energy efficiency, and promoting cleaner, alternative energy at U.S. military bases, GE today announced it has been awarded $2 million in Federal stimulus funding from the U.S. Department of Defense (DOD) for a smart microgrid demonstration project at Twentynine Palms Base, California. The base is the world's largest Marine Corps Base and it is the premier training facility in the world for Marine operations, drawing military personnel from all over the world for Combined Arms Exercises. GE and the Environmental Security Technology Certification Program (ESTCP) office at DOD are in the process of finalizing a contract for the project.
GE will design and demonstrate a smart energy management system that enables installations to more optimally manage on-site power generation and energy storage, while interacting with the regional electrical grid in a more intelligent and efficient way. Additionally, GE’s system will provide enhanced capabilities for installations to integrate renewable resources, such as solar energy, to help meet their electricity needs and reduce their carbon footprints.
According to the 2009 Defense Appropriations Act, U.S. military installations consumed 3.8 billion kilowatt-hours of electricity last year, enough electricity to power 350,000 households in the United States. In addition to high energy costs for these installations, critical defense facilities must operate seamlessly through a power outage or other infrastructure disturbance. These are two key challenges that a smarter, more intelligent grid management system will help to address.
“GE’s smart microgrid demonstration project will show how a more intelligent energy management system can help military bases further safeguard the operation of their power systems while also reducing overall energy costs,” said John Kern, Manager of GE’s Smart Grid Research Lab. “This project will serve as a model for other bases and it also will demonstrate how similar types of facilities, such as industrial complexes and universities, can take advantage of a smarter grid.”
U.S. military bases typically manage power in two ways: local power is generated on site for critical facility needs; and, the bases are connected to the larger U.S. electrical grid network. As part of the project, GE will provide an enhanced suite of microgrid control system technologies that will enable a military base to more effectively manage its local energy resources as well as the interaction with the larger electrical grid network.
To develop this new system, researchers at GE Global Research in Upstate New York will develop and incorporate advanced algorithms and computational decision engines into a microgrid controller built by GE Digital Energy. This microgrid controller will optimize the power generation and distribution within the microgrid. GE Fanuc Intelligent Platforms will also integrate many of these advanced technologies into a new supervisory control and software system that can span power generation and distribution as well as major power consumers within the microgrid.
GE has completed considerable research and development in microgrids in recent years for both the U.S. Department of Energy and the Canadian government. Because microgrids are essentially self-contained systems, they have great potential for enabling a higher penetration of clean, renewable power sources into the electrical distribution network. For contained complexes like a military base that can supplement their own power needs with power generation onsite, microgrids can be an attractive option for bringing more renewable power online.
About GE Global Research
GE Global Research is one of the world's most diversified industrial research labs, providing innovative technology for all of GE's businesses. Global Research has been the cornerstone of GE technology for more than 100 years, developing breakthrough innovations in areas such as medical imaging, energy generation technology, jet engines and lighting. GE Global Research is headquartered in Niskayuna, New York and has facilities in Bangalore, India, Shanghai, China and Munich, Germany. Visit GE Global Research at www.ge.com/research.
Contacts GEPatrick Jarvis, 518-387-6284 (Media)patrick.jarvis@ge.com Research defense stocks with the global defense stocks directory at Investorideas.com
click here:
http://www.investorideas.com/Companies/HomelandDefense/Stock_List.asp
Wednesday, July 8, 2009
Re-release of Report on “Cyber Security: The Next Great Defense Opportunity” Following Recent Cyber Attacks on White House, DOD, NYSE, Washington Post
Homelanddefensestocks.com Re-release of Report on “Cyber Security: The Next Great Defense Opportunity” Following Recent Cyber Attacks on White House, DOD, NYSE, Washington Post
POINT ROBERTS, Wash., DELTA, B.C. –July 8, 2009 – www.HomelandDefenseStocks.com, a leading global investor and industry portal for the defense and security sector, within Investorideas.com, re- releases “Cyber Security: The Next Great Defense Opportunity ”, by Lisa Springer, CFA, as attention builds on the cyber security sector following recent cyber attacks on White House, DOD, NYSE, Washington Post and other leading sites.
Cyber Security: The Next Great Defense Opportunity
(Originally released June 16, 2009)
Lisa Springer CFA, Equity research analyst and financial writer
Defense Stocks: Lockheed Martin (NYSE:LMT), Raytheon (NYSE:RTN), Northrop Grumman (NYSE:NOC), AeroVironment (NASDAQ:AVAV), Optex Systems (OTCBB: OPXS), General Dynamics (NYSE:GD)
Many defense contractors look for huge growth opportunities in the market for cyber security. Bruce Tanner, the CFO of Lockheed Martin, recently identified cyber security as the quickest, near-term defense opportunity, with market growth well exceeding DoD growth rates. Tanner also believes cyber security margins will be comparable to DoD contracts. Lockheed has begun focusing M&A activity in the global security area and anticipates additional cyber security acquisitions this year.
Both Boeing (NYSE:BA) and Lockheed Martin (NYSE:LMT) are eager to gain share in this $7.4 billion market and have formed business units to tap cyber security spending. Boeing created its Cyber Solutions division last August and Lockheed launched its cyber-defense unit last October.
To address cyber security opportunities, Raytheon (NYSE:RTN) has acquired three network security providers, plans to hire 300 certified security engineers this year, and is partnering with University of Texas researchers on new cyber solutions. Northrop Grumman (NYSE:NOC) is also expanding cyber security capacity and was recently awarded a DoD contract for the National Cyber Range, part of a major government-wide effort to improve the nation’s defense against electronic attacks.
The need for a national cyber security plan is becoming increasingly evident as cyber attacks on U.S. agencies and civilian facilities cost the U.S. billions of dollars annually. The problem is getting worse; security breaches of government and private computer networks nearly doubled last year to 72,000. In response, the government is increasing spending for cyber security, which is forecast to rise by 44% to $10.7 billion in 2013. The Bush administration launched a cyber initiative last year funded at around $6 billion and the Obama administration is making cyber security an even higher priority.
President Obama earmarked $355 billion for cyber security in his 2010 fiscal budget and also announced plans to name a cyber security czar, who will have broad authority and likely serve on the National Security Council. Last month, the White House published a cyber security report with guidelines for strategies ranging from communications networks for emergency response teams to the government’s role in protecting infrastructure. The report followed a 60 day review of current government cyber security initiatives and was ordered by Obama shortly after he took office.
Many investors think increased government spending for cyber security will offset revenues lost by defense contractors due to military spending cuts. Share prices for many defense contractors are continuing to rise despite program cuts under the new defense budget. Since early April when the new budget was announced, Lockheed shares have climbed 18%, Boeing shares have jumped 39%, General Dynamic shares have gained 34% and Raytheon shares have improved 11%. This compared to a 13% rise in the S&P 500 during the same period.
In addition, earnings for this group remain strong; most large defense contractors recorded EPS gains and increased EPS guidance after the March 2009 quarter. Lockheed Martin raised full-year guidance by 10 cents to $7.15-47.35, Northrop Grumman increased guidance by 15 cents to $4.65-$4.90, and Raytheon boosted guidance by 10 cents to $4.55-4.70. Boeing was a notable exception; earnings for its defense business fell 18% year-over-year and Boeing cut full-year guidance by 35 cents to $4.70-$5.00.
Small defense contractors providing tools for existing military operations will benefit from $130 billion in funding for the Iraq and Afghanistan wars in the new defense budget. An $83.4 billion war-time supplement request has been submitted to Congress to cover Iraq/Afghanistan costs through the second half of 2009.
Shares of AeroVironment (NASDAQ:AVAV) have jumped 15% since the new defense budget was announced. This company manufactures unmanned military drones used in Afghanistan and Pakistan. In June, AeroVironment received orders for a third global observer aircraft, the sixth contract option exercised under a program cumulatively valued at $120 million.
Newly-public Optex Systems (OTCBB: OPXS) manufactures optical sighting systems for large Howitzer guns used to shell insurgent positions in Afghanistan. During the March quarter, Optex grew revenues nearly 20% and cut its net loss by half. Excluding non-cash intangible expense, the company would have recorded positive net income. Prior to the earnings release, Optex signed a new $7.5 million contract with the U.S. Army for laser-protected periscopes. The company’s shares began trading in early May and quickly climbed to $0.45 before retreating to the current $0.25 range.
General Dynamics (NYSE:GD) is capitalizing on contracting opportunities in sensors and imaging by acquiring Axsys Technology (NASDAQ:AXYS), a manufacturer of high-performance sensors, in a transaction valued at $54 per share, a premium to Axys’ pre-merger share price. Axsys competes with Optex in military applications for sensors and imaging. This acquisition will likely focus increased attention on the optical sensor space and may cause Optex to emerge as an attractive takeover candidate.
Lisa Springer Bio/ Disclaimer: http://www.investorideas.com/About/Lisa-Springer-CFA/
Original article – Defense Budget Winners and Losers May 6th
How Defense Companies Boeing (NYSE:BA), Northrop Grumman (NYSE:NOC), General Dynamics (NYSE:GD), Optex Systems Holdings, Inc. (OTCBB: OPXS) and others are Impacted
Optex Systems Holdings, Inc. (OTCBB: OPXS) is a featured defense stock and showcase company on Investor Ideas defense investor portals, Homelandefensestocks.com, BorderandPortsecurity.com and http://www.nationalhomelandsecurityknowledgebase.com
Visit Optex Systems Holdings, Inc. (OTCBB: OPXS) Company Profile: http://www.investorideas.com/CO/OPTEX/
About Homelanddefensestocks.com- HomelandDefenseStocks.com Portal is a global meeting place for investors and industry following defense and security, within Investorideas.com. Global visitors use the site daily to research the latest news, articles, audio, research reports and stock directories.
Defense Stocks Directory: http://www.investorideas.com/Companies/HomelandDefense/Stock_List.asp
About InvestorIdeas.com:
InvestorIdeas.com is a leading global investor and industry research resource portal specialized in sector investing covering over thirty industry sectors and global markets including China, India, the Middle East and Australia.
InvestorIdeas.com Disclaimer.: www.InvestorIdeas.com/About/Disclaimer.asp
Our sites do not make recommendations, but offer information portals to investors to research news, articles, stock lists and recent research. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. We attempt to research thoroughly, but we offer no guarantees as to the accuracy of any information presented. All information relating to featured companies is sourced from public documents and/ or the company and is not the opinion of our web sites. This site is compensated by featured companies, news submissions and online advertising. OPXS Disclosure: Optex is a featured showcase company and compensates Investorideas.com $3000 month and sixty two thousand 144 shares issued quarterly.
For more information contact: Dawn Van Zant 800.665.0411 Email: dvanzant@HomelandDefenseStocks.com
Source: HomelandDefenseStocks.com, Investor Ideas, Optex Systems Holdings Inc. (OTCBB: OPXS)Research defense stocks with the global defense stocks directory at Investorideas.com
click here:
http://www.investorideas.com/Companies/HomelandDefense/Stock_List.asp
POINT ROBERTS, Wash., DELTA, B.C. –July 8, 2009 – www.HomelandDefenseStocks.com, a leading global investor and industry portal for the defense and security sector, within Investorideas.com, re- releases “Cyber Security: The Next Great Defense Opportunity ”, by Lisa Springer, CFA, as attention builds on the cyber security sector following recent cyber attacks on White House, DOD, NYSE, Washington Post and other leading sites.
Cyber Security: The Next Great Defense Opportunity
(Originally released June 16, 2009)
Lisa Springer CFA, Equity research analyst and financial writer
Defense Stocks: Lockheed Martin (NYSE:LMT), Raytheon (NYSE:RTN), Northrop Grumman (NYSE:NOC), AeroVironment (NASDAQ:AVAV), Optex Systems (OTCBB: OPXS), General Dynamics (NYSE:GD)
Many defense contractors look for huge growth opportunities in the market for cyber security. Bruce Tanner, the CFO of Lockheed Martin, recently identified cyber security as the quickest, near-term defense opportunity, with market growth well exceeding DoD growth rates. Tanner also believes cyber security margins will be comparable to DoD contracts. Lockheed has begun focusing M&A activity in the global security area and anticipates additional cyber security acquisitions this year.
Both Boeing (NYSE:BA) and Lockheed Martin (NYSE:LMT) are eager to gain share in this $7.4 billion market and have formed business units to tap cyber security spending. Boeing created its Cyber Solutions division last August and Lockheed launched its cyber-defense unit last October.
To address cyber security opportunities, Raytheon (NYSE:RTN) has acquired three network security providers, plans to hire 300 certified security engineers this year, and is partnering with University of Texas researchers on new cyber solutions. Northrop Grumman (NYSE:NOC) is also expanding cyber security capacity and was recently awarded a DoD contract for the National Cyber Range, part of a major government-wide effort to improve the nation’s defense against electronic attacks.
The need for a national cyber security plan is becoming increasingly evident as cyber attacks on U.S. agencies and civilian facilities cost the U.S. billions of dollars annually. The problem is getting worse; security breaches of government and private computer networks nearly doubled last year to 72,000. In response, the government is increasing spending for cyber security, which is forecast to rise by 44% to $10.7 billion in 2013. The Bush administration launched a cyber initiative last year funded at around $6 billion and the Obama administration is making cyber security an even higher priority.
President Obama earmarked $355 billion for cyber security in his 2010 fiscal budget and also announced plans to name a cyber security czar, who will have broad authority and likely serve on the National Security Council. Last month, the White House published a cyber security report with guidelines for strategies ranging from communications networks for emergency response teams to the government’s role in protecting infrastructure. The report followed a 60 day review of current government cyber security initiatives and was ordered by Obama shortly after he took office.
Many investors think increased government spending for cyber security will offset revenues lost by defense contractors due to military spending cuts. Share prices for many defense contractors are continuing to rise despite program cuts under the new defense budget. Since early April when the new budget was announced, Lockheed shares have climbed 18%, Boeing shares have jumped 39%, General Dynamic shares have gained 34% and Raytheon shares have improved 11%. This compared to a 13% rise in the S&P 500 during the same period.
In addition, earnings for this group remain strong; most large defense contractors recorded EPS gains and increased EPS guidance after the March 2009 quarter. Lockheed Martin raised full-year guidance by 10 cents to $7.15-47.35, Northrop Grumman increased guidance by 15 cents to $4.65-$4.90, and Raytheon boosted guidance by 10 cents to $4.55-4.70. Boeing was a notable exception; earnings for its defense business fell 18% year-over-year and Boeing cut full-year guidance by 35 cents to $4.70-$5.00.
Small defense contractors providing tools for existing military operations will benefit from $130 billion in funding for the Iraq and Afghanistan wars in the new defense budget. An $83.4 billion war-time supplement request has been submitted to Congress to cover Iraq/Afghanistan costs through the second half of 2009.
Shares of AeroVironment (NASDAQ:AVAV) have jumped 15% since the new defense budget was announced. This company manufactures unmanned military drones used in Afghanistan and Pakistan. In June, AeroVironment received orders for a third global observer aircraft, the sixth contract option exercised under a program cumulatively valued at $120 million.
Newly-public Optex Systems (OTCBB: OPXS) manufactures optical sighting systems for large Howitzer guns used to shell insurgent positions in Afghanistan. During the March quarter, Optex grew revenues nearly 20% and cut its net loss by half. Excluding non-cash intangible expense, the company would have recorded positive net income. Prior to the earnings release, Optex signed a new $7.5 million contract with the U.S. Army for laser-protected periscopes. The company’s shares began trading in early May and quickly climbed to $0.45 before retreating to the current $0.25 range.
General Dynamics (NYSE:GD) is capitalizing on contracting opportunities in sensors and imaging by acquiring Axsys Technology (NASDAQ:AXYS), a manufacturer of high-performance sensors, in a transaction valued at $54 per share, a premium to Axys’ pre-merger share price. Axsys competes with Optex in military applications for sensors and imaging. This acquisition will likely focus increased attention on the optical sensor space and may cause Optex to emerge as an attractive takeover candidate.
Lisa Springer Bio/ Disclaimer: http://www.investorideas.com/About/Lisa-Springer-CFA/
Original article – Defense Budget Winners and Losers May 6th
How Defense Companies Boeing (NYSE:BA), Northrop Grumman (NYSE:NOC), General Dynamics (NYSE:GD), Optex Systems Holdings, Inc. (OTCBB: OPXS) and others are Impacted
Optex Systems Holdings, Inc. (OTCBB: OPXS) is a featured defense stock and showcase company on Investor Ideas defense investor portals, Homelandefensestocks.com, BorderandPortsecurity.com and http://www.nationalhomelandsecurityknowledgebase.com
Visit Optex Systems Holdings, Inc. (OTCBB: OPXS) Company Profile: http://www.investorideas.com/CO/OPTEX/
About Homelanddefensestocks.com- HomelandDefenseStocks.com Portal is a global meeting place for investors and industry following defense and security, within Investorideas.com. Global visitors use the site daily to research the latest news, articles, audio, research reports and stock directories.
Defense Stocks Directory: http://www.investorideas.com/Companies/HomelandDefense/Stock_List.asp
About InvestorIdeas.com:
InvestorIdeas.com is a leading global investor and industry research resource portal specialized in sector investing covering over thirty industry sectors and global markets including China, India, the Middle East and Australia.
InvestorIdeas.com Disclaimer.: www.InvestorIdeas.com/About/Disclaimer.asp
Our sites do not make recommendations, but offer information portals to investors to research news, articles, stock lists and recent research. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. We attempt to research thoroughly, but we offer no guarantees as to the accuracy of any information presented. All information relating to featured companies is sourced from public documents and/ or the company and is not the opinion of our web sites. This site is compensated by featured companies, news submissions and online advertising. OPXS Disclosure: Optex is a featured showcase company and compensates Investorideas.com $3000 month and sixty two thousand 144 shares issued quarterly.
For more information contact: Dawn Van Zant 800.665.0411 Email: dvanzant@HomelandDefenseStocks.com
Source: HomelandDefenseStocks.com, Investor Ideas, Optex Systems Holdings Inc. (OTCBB: OPXS)Research defense stocks with the global defense stocks directory at Investorideas.com
click here:
http://www.investorideas.com/Companies/HomelandDefense/Stock_List.asp
Sunday, June 21, 2009
Investor Ideas Membership Now Includes Stock Directories for Natural Gas Stocks,Biotech Stocks, Defense Stocks
Investor Ideas Membership Now Includes Stock Directories for Natural Gas Stocks, Renewable Energy Stocks, Water Stocks, Environment Stocks, Fuel Cell Stocks, Biotech Stocks, Defense Stocks
What makes our stock directories unique? Directories Include Micro-cap OTC stocks, TSX, NASDAQ, NYSE stocks as well as public companies on global stock exchanges
- www.InvestorIdeas.com, one of the first online investor resources providing in-depth information on renewable energy, water and Homeland Security, has recently added the Natural Gas Stocks Directory to the growing list of stock directories for Investor Ideas members.
The Natural gas stocks directory is available to all investors in a preview format that also features investor trading tools on the side bar including stock charts, analyst commentary and more.
Investorideas.com membership gives full login access to the Water Stocks Directory, Renewable Energy Stocks Directory , Environment Stocks, Fuel cell Stocks, Natural Gas Stocks, Biotech Stocks Directory , Defense Stocks Directory and the Insiders Corner Investing Stock Newsletter.
Learn more about InvestorIdeas.com membership: http://www.investorideas.com/membership/
From China stocks to renewable energy to gaming and tech, the stock directories provide investors with an initial starting point of due diligence for each sector. To meet the full range of investor needs and preferences, the directories include stocks listed on the TSX, OTCBB, NASDAQ, NYSE and global exchanges.
To review the full list of stock directories available to investors : Water Stocks, Renewable Energy and Green Stocks, Energy Stocks, Oilsands Stocks, Mining Stocks, Homeland Defense Stocks, Nanotech Stocks, Biotech Stocks, RFID Stocks, Music Stocks, Homebuilder Stocks, Digital Media and more: Visit
http://www.investorideas.com/dirs/stocklist.asp
Investor Ideas Stock Directories in the News ... San Francisco Chronicle
Investor Ideas: Say you want to invest in stocks involved in the wireless industry but you don't know where to start. Investor Ideas ( www.investorideas.com) maintains amazingly comprehensive lists of stocks in a variety of industries including homeland security, renewable energy, natural gas, coal, gaming, food and beverage, and many more. The site doesn't just list the stocks; it includes a paragraph describing each firm's business. Many of the stocks listed are tiny firms that are too risky for most investors. Nevertheless, it's a good place to start your research. Full Investing article -Web sites give tips for savvy investing
About InvestorIdeas.com:
Investorideas.com creates a meeting place for investing ideas to take form and come to life in an entrepreneurial environment, servicing the needs of small investors and start- up companies to large conglomerates! We cover multiple industry sectors but specialize in environmental and water.
Disclaimer: Our sites do not make recommendations. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. We attempt to research thoroughly, but we offer no guarantees as to the accuracy of information presented. All Information relating to featured companies is sourced from public documents and/ or the company and is not the opinion of our web sites. This site is currently compensated by featured companies, news submissions and online advertising. www.InvestorIdeas.com/About/Disclaimer.asp
For Additional Information:
Dawn Van Zant: 800-665-0411 - dvanzant@investorideas.com
Source – Investorideas.com
Research defense stocks with the global defense stocks directory at Investorideas.com
click here:
http://www.investorideas.com/Companies/HomelandDefense/Stock_List.asp
What makes our stock directories unique? Directories Include Micro-cap OTC stocks, TSX, NASDAQ, NYSE stocks as well as public companies on global stock exchanges
- www.InvestorIdeas.com, one of the first online investor resources providing in-depth information on renewable energy, water and Homeland Security, has recently added the Natural Gas Stocks Directory to the growing list of stock directories for Investor Ideas members.
The Natural gas stocks directory is available to all investors in a preview format that also features investor trading tools on the side bar including stock charts, analyst commentary and more.
Investorideas.com membership gives full login access to the Water Stocks Directory, Renewable Energy Stocks Directory , Environment Stocks, Fuel cell Stocks, Natural Gas Stocks, Biotech Stocks Directory , Defense Stocks Directory and the Insiders Corner Investing Stock Newsletter.
Learn more about InvestorIdeas.com membership: http://www.investorideas.com/membership/
From China stocks to renewable energy to gaming and tech, the stock directories provide investors with an initial starting point of due diligence for each sector. To meet the full range of investor needs and preferences, the directories include stocks listed on the TSX, OTCBB, NASDAQ, NYSE and global exchanges.
To review the full list of stock directories available to investors : Water Stocks, Renewable Energy and Green Stocks, Energy Stocks, Oilsands Stocks, Mining Stocks, Homeland Defense Stocks, Nanotech Stocks, Biotech Stocks, RFID Stocks, Music Stocks, Homebuilder Stocks, Digital Media and more: Visit
http://www.investorideas.com/dirs/stocklist.asp
Investor Ideas Stock Directories in the News ... San Francisco Chronicle
Investor Ideas: Say you want to invest in stocks involved in the wireless industry but you don't know where to start. Investor Ideas ( www.investorideas.com) maintains amazingly comprehensive lists of stocks in a variety of industries including homeland security, renewable energy, natural gas, coal, gaming, food and beverage, and many more. The site doesn't just list the stocks; it includes a paragraph describing each firm's business. Many of the stocks listed are tiny firms that are too risky for most investors. Nevertheless, it's a good place to start your research. Full Investing article -Web sites give tips for savvy investing
About InvestorIdeas.com:
Investorideas.com creates a meeting place for investing ideas to take form and come to life in an entrepreneurial environment, servicing the needs of small investors and start- up companies to large conglomerates! We cover multiple industry sectors but specialize in environmental and water.
Disclaimer: Our sites do not make recommendations. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. We attempt to research thoroughly, but we offer no guarantees as to the accuracy of information presented. All Information relating to featured companies is sourced from public documents and/ or the company and is not the opinion of our web sites. This site is currently compensated by featured companies, news submissions and online advertising. www.InvestorIdeas.com/About/Disclaimer.asp
For Additional Information:
Dawn Van Zant: 800-665-0411 - dvanzant@investorideas.com
Source – Investorideas.com
Research defense stocks with the global defense stocks directory at Investorideas.com
click here:
http://www.investorideas.com/Companies/HomelandDefense/Stock_List.asp
Tuesday, June 16, 2009
Defense Investing- Cyber Security: The Next Great Defense Opportunity
POINT ROBERTS, Wash., DELTA, B.C. –June 16, 2009 – www.HomelandDefenseStocks.com, a leading global investor and industry portal for the defense and security sector, within Investorideas.com, presents a follow-up to the May 6th feature on defense stocks, “Defense Budget Winners and Losers”, by Lisa Springer, CFA, as attention builds on the cyber security sector.
Cyber Security: The Next Great Defense Opportunity
Lisa Springer CFA, Equity research analyst and financial writer
Defense Stocks: Lockheed Martin (NYSE:LMT), Raytheon (NYSE:RTN), Northrop Grumman (NYSE:NOC), AeroVironment (NASDAQ:AVAV), Optex Systems (OTCBB: OPXS), General Dynamics (NYSE:GD)
Many defense contractors look for huge growth opportunities in the market for cyber security. Bruce Tanner, the CFO of Lockheed Martin, recently identified cyber security as the quickest, near-term defense opportunity, with market growth well exceeding DoD growth rates. Tanner also believes cyber security margins will be comparable to DoD contracts. Lockheed has begun focusing M&A activity in the global security area and anticipates additional cyber security acquisitions this year.
Both Boeing (NYSE:BA) and Lockheed Martin (NYSE:LMT) are eager to gain share in this $7.4 billion market and have formed business units to tap cyber security spending. Boeing created its Cyber Solutions division last August and Lockheed launched its cyber-defense unit last October.
To address cyber security opportunities, Raytheon (NYSE:RTN) has acquired three network security providers, plans to hire 300 certified security engineers this year, and is partnering with University of Texas researchers on new cyber solutions. Northrop Grumman (NYSE:NOC) is also expanding cyber security capacity and was recently awarded a DoD contract for the National Cyber Range, part of a major government-wide effort to improve the nation’s defense against electronic attacks.
The need for a national cyber security plan is becoming increasingly evident as cyber attacks on U.S. agencies and civilian facilities cost the U.S. billions of dollars annually. The problem is getting worse; security breaches of government and private computer networks nearly doubled last year to 72,000. In response, the government is increasing spending for cyber security, which is forecast to rise by 44% to $10.7 billion in 2013. The Bush administration launched a cyber initiative last year funded at around $6 billion and the Obama administration is making cyber security an even higher priority.
President Obama earmarked $355 billion for cyber security in his 2010 fiscal budget and also announced plans to name a cyber security czar, who will have broad authority and likely serve on the National Security Council. Last month, the White House published a cyber security report with guidelines for strategies ranging from communications networks for emergency response teams to the government’s role in protecting infrastructure. The report followed a 60 day review of current government cyber security initiatives and was ordered by Obama shortly after he took office.
Many investors think increased government spending for cyber security will offset revenues lost by defense contractors due to military spending cuts. Share prices for many defense contractors are continuing to rise despite program cuts under the new defense budget. Since early April when the new budget was announced, Lockheed shares have climbed 18%, Boeing shares have jumped 39%, General Dynamic shares have gained 34% and Raytheon shares have improved 11%. This compared to a 13% rise in the S&P 500 during the same period.
In addition, earnings for this group remain strong; most large defense contractors recorded EPS gains and increased EPS guidance after the March 2009 quarter. Lockheed Martin raised full-year guidance by 10 cents to $7.15-47.35, Northrop Grumman increased guidance by 15 cents to $4.65-$4.90, and Raytheon boosted guidance by 10 cents to $4.55-4.70. Boeing was a notable exception; earnings for its defense business fell 18% year-over-year and Boeing cut full-year guidance by 35 cents to $4.70-$5.00.
Small defense contractors providing tools for existing military operations will benefit from $130 billion in funding for the Iraq and Afghanistan wars in the new defense budget. An $83.4 billion war-time supplement request has been submitted to Congress to cover Iraq/Afghanistan costs through the second half of 2009.
Shares of AeroVironment (NASDAQ:AVAV) have jumped 15% since the new defense budget was announced. This company manufactures unmanned military drones used in Afghanistan and Pakistan. In June, AeroVironment received orders for a third global observer aircraft, the sixth contract option exercised under a program cumulatively valued at $120 million.
Newly-public Optex Systems (OTCBB: OPXS) manufactures optical sighting systems for large Howitzer guns used to shell insurgent positions in Afghanistan. During the March quarter, Optex grew revenues nearly 20% and cut its net loss by half. Excluding non-cash intangible expense, the company would have recorded positive net income. Prior to the earnings release, Optex signed a new $7.5 million contract with the U.S. Army for laser-protected periscopes. The company’s shares began trading in early May and quickly climbed to $0.45 before retreating to the current $0.25 range.
General Dynamics (NYSE:GD) is capitalizing on contracting opportunities in sensors and imaging by acquiring Axsys Technology (NASDAQ:AXYS), a manufacturer of high-performance sensors, in a transaction valued at $54 per share, a premium to Axys’ pre-merger share price. Axsys competes with Optex in military applications for sensors and imaging. This acquisition will likely focus increased attention on the optical sensor space and may cause Optex to emerge as an attractive takeover candidate.
Lisa Springer Bio/ Disclaimer: http://www.investorideas.com/About/Lisa-Springer-CFA/
Original article – Defense Budget Winners and Losers May 6th
How Defense Companies Boeing (NYSE:BA), Northrop Grumman (NYSE:NOC), General Dynamics (NYSE:GD), Optex Systems Holdings, Inc. (OTCBB:OPXS) and others are Impacted
Optex Systems Holdings, Inc. (OTCBB: OPXS) is a featured defense stock and showcase company on Investor Ideas defense investor portals, Homelandefensestocks.com, BorderandPortsecurity.com and http://www.nationalhomelandsecurityknowledgebase.com
Visit Optex Systems Holdings, Inc. (OTCBB: OPXS) Company Profile: http://www.investorideas.com/CO/OPTEX/
About Homelanddefensestocks.com- HomelandDefenseStocks.com Portal is a global meeting place for investors and industry following defense and security, within Investorideas.com. Global visitors use the site daily to research the latest news, articles, audio, research reports and stock directories.
Defense Stocks Directory: http://www.investorideas.com/Companies/HomelandDefense/Stock_List.asp
About InvestorIdeas.com:
InvestorIdeas.com is a leading global investor and industry research resource portal specialized in sector investing covering over thirty industry sectors and global markets including China, India, the Middle East and Australia.
InvestorIdeas.com Disclaimer.: www.InvestorIdeas.com/About/Disclaimer.asp
Our sites do not make recommendations, but offer information portals to investors to research news, articles, stock lists and recent research. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. We attempt to research thoroughly, but we offer no guarantees as to the accuracy of any information presented. All information relating to featured companies is sourced from public documents and/ or the company and is not the opinion of our web sites. This site is compensated by featured companies, news submissions and online advertising. OPXS Disclosure: Optex is a featured showcase company and compensates Investorideas.com $3000 month and sixty two thousand 144 shares issued quarterly.
For more information contact: Dawn Van Zant 800.665.0411 Email: dvanzant@HomelandDefenseStocks.com
Source: HomelandDefenseStocks.com, Investor Ideas, Optex Systems Holdings Inc. (OTCBB: OPXS)
Research defense stocks with the global defense stocks directory at Investorideas.com
click here:
http://www.investorideas.com/Companies/HomelandDefense/Stock_List.asp
Cyber Security: The Next Great Defense Opportunity
Lisa Springer CFA, Equity research analyst and financial writer
Defense Stocks: Lockheed Martin (NYSE:LMT), Raytheon (NYSE:RTN), Northrop Grumman (NYSE:NOC), AeroVironment (NASDAQ:AVAV), Optex Systems (OTCBB: OPXS), General Dynamics (NYSE:GD)
Many defense contractors look for huge growth opportunities in the market for cyber security. Bruce Tanner, the CFO of Lockheed Martin, recently identified cyber security as the quickest, near-term defense opportunity, with market growth well exceeding DoD growth rates. Tanner also believes cyber security margins will be comparable to DoD contracts. Lockheed has begun focusing M&A activity in the global security area and anticipates additional cyber security acquisitions this year.
Both Boeing (NYSE:BA) and Lockheed Martin (NYSE:LMT) are eager to gain share in this $7.4 billion market and have formed business units to tap cyber security spending. Boeing created its Cyber Solutions division last August and Lockheed launched its cyber-defense unit last October.
To address cyber security opportunities, Raytheon (NYSE:RTN) has acquired three network security providers, plans to hire 300 certified security engineers this year, and is partnering with University of Texas researchers on new cyber solutions. Northrop Grumman (NYSE:NOC) is also expanding cyber security capacity and was recently awarded a DoD contract for the National Cyber Range, part of a major government-wide effort to improve the nation’s defense against electronic attacks.
The need for a national cyber security plan is becoming increasingly evident as cyber attacks on U.S. agencies and civilian facilities cost the U.S. billions of dollars annually. The problem is getting worse; security breaches of government and private computer networks nearly doubled last year to 72,000. In response, the government is increasing spending for cyber security, which is forecast to rise by 44% to $10.7 billion in 2013. The Bush administration launched a cyber initiative last year funded at around $6 billion and the Obama administration is making cyber security an even higher priority.
President Obama earmarked $355 billion for cyber security in his 2010 fiscal budget and also announced plans to name a cyber security czar, who will have broad authority and likely serve on the National Security Council. Last month, the White House published a cyber security report with guidelines for strategies ranging from communications networks for emergency response teams to the government’s role in protecting infrastructure. The report followed a 60 day review of current government cyber security initiatives and was ordered by Obama shortly after he took office.
Many investors think increased government spending for cyber security will offset revenues lost by defense contractors due to military spending cuts. Share prices for many defense contractors are continuing to rise despite program cuts under the new defense budget. Since early April when the new budget was announced, Lockheed shares have climbed 18%, Boeing shares have jumped 39%, General Dynamic shares have gained 34% and Raytheon shares have improved 11%. This compared to a 13% rise in the S&P 500 during the same period.
In addition, earnings for this group remain strong; most large defense contractors recorded EPS gains and increased EPS guidance after the March 2009 quarter. Lockheed Martin raised full-year guidance by 10 cents to $7.15-47.35, Northrop Grumman increased guidance by 15 cents to $4.65-$4.90, and Raytheon boosted guidance by 10 cents to $4.55-4.70. Boeing was a notable exception; earnings for its defense business fell 18% year-over-year and Boeing cut full-year guidance by 35 cents to $4.70-$5.00.
Small defense contractors providing tools for existing military operations will benefit from $130 billion in funding for the Iraq and Afghanistan wars in the new defense budget. An $83.4 billion war-time supplement request has been submitted to Congress to cover Iraq/Afghanistan costs through the second half of 2009.
Shares of AeroVironment (NASDAQ:AVAV) have jumped 15% since the new defense budget was announced. This company manufactures unmanned military drones used in Afghanistan and Pakistan. In June, AeroVironment received orders for a third global observer aircraft, the sixth contract option exercised under a program cumulatively valued at $120 million.
Newly-public Optex Systems (OTCBB: OPXS) manufactures optical sighting systems for large Howitzer guns used to shell insurgent positions in Afghanistan. During the March quarter, Optex grew revenues nearly 20% and cut its net loss by half. Excluding non-cash intangible expense, the company would have recorded positive net income. Prior to the earnings release, Optex signed a new $7.5 million contract with the U.S. Army for laser-protected periscopes. The company’s shares began trading in early May and quickly climbed to $0.45 before retreating to the current $0.25 range.
General Dynamics (NYSE:GD) is capitalizing on contracting opportunities in sensors and imaging by acquiring Axsys Technology (NASDAQ:AXYS), a manufacturer of high-performance sensors, in a transaction valued at $54 per share, a premium to Axys’ pre-merger share price. Axsys competes with Optex in military applications for sensors and imaging. This acquisition will likely focus increased attention on the optical sensor space and may cause Optex to emerge as an attractive takeover candidate.
Lisa Springer Bio/ Disclaimer: http://www.investorideas.com/About/Lisa-Springer-CFA/
Original article – Defense Budget Winners and Losers May 6th
How Defense Companies Boeing (NYSE:BA), Northrop Grumman (NYSE:NOC), General Dynamics (NYSE:GD), Optex Systems Holdings, Inc. (OTCBB:OPXS) and others are Impacted
Optex Systems Holdings, Inc. (OTCBB: OPXS) is a featured defense stock and showcase company on Investor Ideas defense investor portals, Homelandefensestocks.com, BorderandPortsecurity.com and http://www.nationalhomelandsecurityknowledgebase.com
Visit Optex Systems Holdings, Inc. (OTCBB: OPXS) Company Profile: http://www.investorideas.com/CO/OPTEX/
About Homelanddefensestocks.com- HomelandDefenseStocks.com Portal is a global meeting place for investors and industry following defense and security, within Investorideas.com. Global visitors use the site daily to research the latest news, articles, audio, research reports and stock directories.
Defense Stocks Directory: http://www.investorideas.com/Companies/HomelandDefense/Stock_List.asp
About InvestorIdeas.com:
InvestorIdeas.com is a leading global investor and industry research resource portal specialized in sector investing covering over thirty industry sectors and global markets including China, India, the Middle East and Australia.
InvestorIdeas.com Disclaimer.: www.InvestorIdeas.com/About/Disclaimer.asp
Our sites do not make recommendations, but offer information portals to investors to research news, articles, stock lists and recent research. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. We attempt to research thoroughly, but we offer no guarantees as to the accuracy of any information presented. All information relating to featured companies is sourced from public documents and/ or the company and is not the opinion of our web sites. This site is compensated by featured companies, news submissions and online advertising. OPXS Disclosure: Optex is a featured showcase company and compensates Investorideas.com $3000 month and sixty two thousand 144 shares issued quarterly.
For more information contact: Dawn Van Zant 800.665.0411 Email: dvanzant@HomelandDefenseStocks.com
Source: HomelandDefenseStocks.com, Investor Ideas, Optex Systems Holdings Inc. (OTCBB: OPXS)
Research defense stocks with the global defense stocks directory at Investorideas.com
click here:
http://www.investorideas.com/Companies/HomelandDefense/Stock_List.asp
Monday, June 8, 2009
Homeland Defense Stocks Spade Defense Index Commentary for June 2009; Ten Keys for Investing in Defense over the Next Six Months
Homeland Defense Stocks Spade Defense Index Commentary for June 2009; Ten Keys for Investing in Defense over the Next Six Months
POINT ROBERTS, Wash., DELTA, B.C. –June 8, 2009 – www.HomelandDefenseStocks.com (HDS), a leading global investor and industry portal for the defense and security sector, within Investorideas.com, provides interested defense stocks investors with sector commentary from Scott Sacknoff, manager of the SPADE® Defense Index.
Ten Keys for Investing in Defense Over the Next Six Months
By Scott Sacknoff, SPADE Indexes
The following is our commentary from the June 2009 “The SPADE Investor” newsletter.
Specifics of the FY2010 Defense Department budget were finally made available in early May and there were few surprises from the information that was leaked over the previous weeks. A number of large programs were cancelled or scaled back including major initiatives such as the Future Combat System, Transformational Satellite TSAT, and the presidential helicopter, but each were “replaced” with other programs that are designed to meet the ongoing needs of the agency. In fact, despite the cancellation of the multi-billion TSAT program, spending on new communications satellites in FY10 rose.
Analysts have now shifted their attention toward gathering information on the 2010 Quadrennial Defense Review (QDR) which will be the guide for the FY-2011 to FY-2015 budgets -- although final details are not due until next February. While a number of analysts think defense spending has peaked with the FY-10 budget, dramatic cuts in future budgets is meeting with resistance from a number of current and former members of the executive branch and Congress as well as military officials.
So with investors starting to look again toward the sector, it appears as if the recent decline in share prices over the past nine months went too far. Which brings us to the top 10 keys for the next six months.
Ten Keys for the Next Six Months (and Beyond)
1. The FY10 Budget is Released. The budget has always been the most important factor in determining the health of the sector and the companies that will benefit. With the base budget for FY 2010 showing a 5.6% growth ($5.7 billion) in procurement and another supplemental spending package to fund war efforts through the rest of 2009 coming, the issue has been put to rest for the time being.
2. Global Tension: North Korea and Iran. The launch of rockets by Iran and North Korea as well as their nuclear interests have raised the potential that something might happen. Fears that Israel may act in Iran before the U.S. are rising.
3. Rebound in Commercial Aerospace. The global recession and the collapse of the financial system had little impact on defense spending but commercial activities suffered. With roughly 20% of the defense sector maintaining commercial aerospace operations, an improving economy is showing benefits. The first test flights and delivery of the Boeing 787 will an additional provide a boost to the sector.
4. Positive Press Over the Next Month from the Paris Air Show. The improving commercial sector be showcased at the mid-June Paris Air Show, the largest and most important show of its kind. Over the next several weeks hundreds of press releases and articles will be issued highlighting new contracts and new products. More than $50 billion worth of contract announcements are anticipated. In addition, rumor is that the Boeing 787 may make its maiden flight.
5. Declining Dollar is Positive for Exports. The United States has become a net importer of products; but one sector in which the U.S. has a positive trade balance is aerospace. With companies around the world still operating in a recessionary mindset, a weakening dollar offers a competitive advantage against global competitors.
6. Valuations Still Well Below Recent Levels. The market decline wiped out years of gains that took the sector through the dotcom bubble, the 9-11 attacks, and the wars in Iraq and Afghanistan. Today, valuations in the industry are at levels typically seen after a major decline in the defense budget with P/E, P/S, PEG, etc all bottoming earlier this year. Advance comments from several companies indicate that 2Q09 reports should continue to show healthy balance sheets.
7. Strength in the Satellite and Space Business. Like the defense sector, spending on satellite services did not see major declines over the past year and many firms are reporting steady revenue gains. Going forward, U.S. satellite manufacturers (such as Orbital Sciences (ORB), Lockheed Martin (LMT), Boeing (BA), General Dynamics (GD)) and other hardware and software providers (Integral Systems (ISYS), Moog (MOG.A), etc.) could benefit if a provision in the 2010 State Department Authorization Act passes turning satellite export review over to the Department of Commerce. Prior to the law change in 1998, the AIA states that 78% of communications satellites were U.S. made, whereas today it is 27%.
8. Rebound in the Economy to Put Less Pressure on Obama. Beginning with the FY-11 budget, the Obama administration will seek to reduce a number of spending programs in order to pay for new programs (such as health care) and pay down the debt generated from the stimulus and overcoming the financial crisis. Defense, as the largest discretionary budget item, is likely to come under pressure. Defense Secretary Gates and a number of members of Congress have already begun efforts to hold back any dramatic cuts. A recent article in the NY Times highlighted that rocket launches by North Korea have started to sway some in Congress toward the need for continued defense spending.
9. Leaks about the 2010 QDR. Lastly, between now and February 2010, there will be a number of leaks as the agency determines its strategic direction and acquisition plans for the rest of Obama‘s first term. We can anticipate that not every trial balloon that is flirted with will make it to the final version. It is likely, however, that these comments will lead to temporary moves in the market for the companies that might be impacted.
10. New Initiatives / Diversification. Defense companies have seen the future and have already begun positioning their firms to adapt to changes inside the Pentagon as well as to leverage their skills and technologies to meet the needs of customers outside the core defense sector. In addition, the cancellation of large multi-billion programs is opening up new opportunities to compete for new business against the former incumbent and new initiatives, such as cybersecurity, will see billions spent not only by DoD but other government agencies.
More info and previous interviews:
http://www.homelanddefensestocks.com/Content_Partners/SI/Default.asp
About the SPADE Defense Index
The SPADE Defense Index® (AMEX: DXS) is a modified capitalization-weighted index comprised of publicly traded companies that benchmarks the performance of companies involved with the defense, homeland security, and space marketplace.
The SPADE Defense Index has been developed to be used by investors, financial professionals, trade analysts, and media as a benchmark for publicly traded stocks involved in these business sectors. The Index can be used as the basis for a range of financial instruments including options and other derivatives, exchange traded funds, and conventional mutual funds.
For more information: http://www.spadeindex.com
Disclaimers: The information presented in this interview is for informational purposes and should not represent a solicitation or an offer to purchase an investment product. SPADE and the SPADE Defense Index are registered trademarks of the ISBC.
About Homelanddefensestocks.com- HomelandDefenseStocks.com Portal is a global meeting place for investors and industry following defense and security, within Investorideas.com. Global visitors use the site daily to research the latest news, articles, audio, research reports and stock directories.
Free Defense Stocks Newsletter Sign-up:
http://www.twotigersonline.com/newsletter.html
Showcase Defense Company:
Optex Systems Holdings, Inc., (OTCBB: OPXS) through its wholly-owned subsidiary, Optex Systems, Inc. manufactures optical sighting systems and assemblies primarily for Department of Defense (DOD) applications. Its products are installed on a majority of types of U.S. military land vehicles, such as the Abrams and Bradley fighting vehicles, Light Armored and Armored Security Vehicles and have been selected for installation on the Future Combat Systems (FCS) Stryker vehicle. Optex also manufactures and delivers numerous periscope configurations, rifle and surveillance sights and night vision optical assemblies. Optex delivers its products both directly to the military services and to prime contractors.
Read the full company profile:
Visit Optex Systems Holdings, Inc. (OTCBB: OPXS) Company Profile: http://www.investorideas.com/CO/OPTEX/
About InvestorIdeas.com:
InvestorIdeas.com is a leading global investor and industry research resource portal specialized in sector investing covering over thirty industry sectors and global markets including China, India, the Middle East and Australia.
Investorideas.com Membership – Defense Stocks directory:
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Become an InvestorIdeas.com -Learn more: http://www.investorideas.com/membership/
InvestorIdeas.com Disclaimer: www.InvestorIdeas.com/About/Disclaimer.asp
Our sites do not make recommendations, but offer information portals to investors to research news, articles, stock lists and recent research. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. We attempt to research thoroughly, but we offer no guarantees as to the accuracy of any information presented. All information relating to featured companies is sourced from public documents and/ or the company and is not the opinion of our web sites. This site is compensated by featured companies, news submissions and online advertising. OPXS Disclosure: Optex is a featured showcase company and compensates Investorideas.com $3000 month and sixty two thousand 144 shares issued quarterly.
For more information contact:
Dawn Van Zant 800.665.0411
Email: dvanzant@HomelandDefenseStocks.com
Source: HomelandDefenseStocks.com, Investor Ideas
Research defense stocks with the global defense stocks directory at Investorideas.com
click here:
http://www.investorideas.com/Companies/HomelandDefense/Stock_List.asp
POINT ROBERTS, Wash., DELTA, B.C. –June 8, 2009 – www.HomelandDefenseStocks.com (HDS), a leading global investor and industry portal for the defense and security sector, within Investorideas.com, provides interested defense stocks investors with sector commentary from Scott Sacknoff, manager of the SPADE® Defense Index.
Ten Keys for Investing in Defense Over the Next Six Months
By Scott Sacknoff, SPADE Indexes
The following is our commentary from the June 2009 “The SPADE Investor” newsletter.
Specifics of the FY2010 Defense Department budget were finally made available in early May and there were few surprises from the information that was leaked over the previous weeks. A number of large programs were cancelled or scaled back including major initiatives such as the Future Combat System, Transformational Satellite TSAT, and the presidential helicopter, but each were “replaced” with other programs that are designed to meet the ongoing needs of the agency. In fact, despite the cancellation of the multi-billion TSAT program, spending on new communications satellites in FY10 rose.
Analysts have now shifted their attention toward gathering information on the 2010 Quadrennial Defense Review (QDR) which will be the guide for the FY-2011 to FY-2015 budgets -- although final details are not due until next February. While a number of analysts think defense spending has peaked with the FY-10 budget, dramatic cuts in future budgets is meeting with resistance from a number of current and former members of the executive branch and Congress as well as military officials.
So with investors starting to look again toward the sector, it appears as if the recent decline in share prices over the past nine months went too far. Which brings us to the top 10 keys for the next six months.
Ten Keys for the Next Six Months (and Beyond)
1. The FY10 Budget is Released. The budget has always been the most important factor in determining the health of the sector and the companies that will benefit. With the base budget for FY 2010 showing a 5.6% growth ($5.7 billion) in procurement and another supplemental spending package to fund war efforts through the rest of 2009 coming, the issue has been put to rest for the time being.
2. Global Tension: North Korea and Iran. The launch of rockets by Iran and North Korea as well as their nuclear interests have raised the potential that something might happen. Fears that Israel may act in Iran before the U.S. are rising.
3. Rebound in Commercial Aerospace. The global recession and the collapse of the financial system had little impact on defense spending but commercial activities suffered. With roughly 20% of the defense sector maintaining commercial aerospace operations, an improving economy is showing benefits. The first test flights and delivery of the Boeing 787 will an additional provide a boost to the sector.
4. Positive Press Over the Next Month from the Paris Air Show. The improving commercial sector be showcased at the mid-June Paris Air Show, the largest and most important show of its kind. Over the next several weeks hundreds of press releases and articles will be issued highlighting new contracts and new products. More than $50 billion worth of contract announcements are anticipated. In addition, rumor is that the Boeing 787 may make its maiden flight.
5. Declining Dollar is Positive for Exports. The United States has become a net importer of products; but one sector in which the U.S. has a positive trade balance is aerospace. With companies around the world still operating in a recessionary mindset, a weakening dollar offers a competitive advantage against global competitors.
6. Valuations Still Well Below Recent Levels. The market decline wiped out years of gains that took the sector through the dotcom bubble, the 9-11 attacks, and the wars in Iraq and Afghanistan. Today, valuations in the industry are at levels typically seen after a major decline in the defense budget with P/E, P/S, PEG, etc all bottoming earlier this year. Advance comments from several companies indicate that 2Q09 reports should continue to show healthy balance sheets.
7. Strength in the Satellite and Space Business. Like the defense sector, spending on satellite services did not see major declines over the past year and many firms are reporting steady revenue gains. Going forward, U.S. satellite manufacturers (such as Orbital Sciences (ORB), Lockheed Martin (LMT), Boeing (BA), General Dynamics (GD)) and other hardware and software providers (Integral Systems (ISYS), Moog (MOG.A), etc.) could benefit if a provision in the 2010 State Department Authorization Act passes turning satellite export review over to the Department of Commerce. Prior to the law change in 1998, the AIA states that 78% of communications satellites were U.S. made, whereas today it is 27%.
8. Rebound in the Economy to Put Less Pressure on Obama. Beginning with the FY-11 budget, the Obama administration will seek to reduce a number of spending programs in order to pay for new programs (such as health care) and pay down the debt generated from the stimulus and overcoming the financial crisis. Defense, as the largest discretionary budget item, is likely to come under pressure. Defense Secretary Gates and a number of members of Congress have already begun efforts to hold back any dramatic cuts. A recent article in the NY Times highlighted that rocket launches by North Korea have started to sway some in Congress toward the need for continued defense spending.
9. Leaks about the 2010 QDR. Lastly, between now and February 2010, there will be a number of leaks as the agency determines its strategic direction and acquisition plans for the rest of Obama‘s first term. We can anticipate that not every trial balloon that is flirted with will make it to the final version. It is likely, however, that these comments will lead to temporary moves in the market for the companies that might be impacted.
10. New Initiatives / Diversification. Defense companies have seen the future and have already begun positioning their firms to adapt to changes inside the Pentagon as well as to leverage their skills and technologies to meet the needs of customers outside the core defense sector. In addition, the cancellation of large multi-billion programs is opening up new opportunities to compete for new business against the former incumbent and new initiatives, such as cybersecurity, will see billions spent not only by DoD but other government agencies.
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About the SPADE Defense Index
The SPADE Defense Index® (AMEX: DXS) is a modified capitalization-weighted index comprised of publicly traded companies that benchmarks the performance of companies involved with the defense, homeland security, and space marketplace.
The SPADE Defense Index has been developed to be used by investors, financial professionals, trade analysts, and media as a benchmark for publicly traded stocks involved in these business sectors. The Index can be used as the basis for a range of financial instruments including options and other derivatives, exchange traded funds, and conventional mutual funds.
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Optex Systems Holdings, Inc., (OTCBB: OPXS) through its wholly-owned subsidiary, Optex Systems, Inc. manufactures optical sighting systems and assemblies primarily for Department of Defense (DOD) applications. Its products are installed on a majority of types of U.S. military land vehicles, such as the Abrams and Bradley fighting vehicles, Light Armored and Armored Security Vehicles and have been selected for installation on the Future Combat Systems (FCS) Stryker vehicle. Optex also manufactures and delivers numerous periscope configurations, rifle and surveillance sights and night vision optical assemblies. Optex delivers its products both directly to the military services and to prime contractors.
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Thursday, June 4, 2009
Defense Stocks News - SAIC, Inc. (NYSE: SAI ) Announces Financial Results for First Quarter of Fiscal Year 2010; Operating Income: Up 17 percent
Defense Stocks News - SAIC, Inc. (NYSE: SAI ) Announces Financial Results for First Quarter of Fiscal Year 2010; Operating Income: Up 17 percent to $204 million
- Diluted EPS from Continuing Operations: Up 16 percent to $0.29
- Reaffirming Guidance for Fiscal Year 2010
SAN DIEGO and MCLEAN, Va., June 3 -- SAIC, Inc. (NYSE: SAI ), a scientific, engineering, and technology applications company, today announced financial results for the first quarter of fiscal year 2010, which ended April 30, 2009.
After the quarter ended, the U.S. Department of Defense indicated that it intends to restructure the Future Combat Systems (FCS) program, which represents about 3 percent of the company's annual revenue. The company currently expects to have a significant role under the restructured program, but the level of effort and terms and conditions remain under negotiation.
"In the first quarter of fiscal year 2010, we continued to demonstrate a pattern of solid program execution and financial performance," said Ken Dahlberg, SAIC chairman and chief executive officer. "I am especially pleased that the results were so uniformly positive. That is, all of our major metrics -- revenue, operating margin, earnings per share, and cash flow -- were robust, and virtually all of our business units met or exceeded our expectations. Although the potential restructuring of FCS provides some uncertainty, based on our strong market position across our wide business base, we expect fiscal year 2010 to be another solid year for the company."
Summary Operating Results
Revenues for the quarter were $2.65 billion, up 12 percent from $2.37 billion in the first quarter of fiscal year 2009. Internal, or non-acquisition, growth represented 11 percentage points of the consolidated growth for the quarter. Key drivers of internal growth included the initial ramp of recent wins in defense logistics, information technology, cyber-security, and intelligence support as well as increased tasking on existing defense and intelligence programs.
Operating income for the quarter was $204 million (7.7 percent of revenue), up 17 percent from $174 million (7.4 percent of revenue) in the first quarter of fiscal year 2009. Growth in quarterly operating margin percentage was driven by continued improvements in cost efficiency and contract fees. Income from continuing operations for the quarter was $117 million, up 11 percent from $105 million in the first quarter of fiscal year 2009. Income from continuing operations grew more slowly than operating income primarily because of a $7 million reduction in interest income net of interest expense and a $5 million reduction in other income resulting from joint venture activities and a gain on the sale of two venture capital portfolio investments in the year-ago period.
Diluted earnings per share (EPS) from continuing operations for the quarter were $0.29, up 16 percent from $0.25 in the first quarter of fiscal year 2009, driven by the increase in income from continuing operations and a lower share count compared to the prior year quarter. The diluted share count for the quarter was 397 million, down 3 percent from 410 million in the first quarter of fiscal year 2009, due primarily to share repurchases made over the last four quarters. Diluted earnings per share, which include discontinued operations, were $0.28 for the quarter, up 17 percent from $0.24 in the first quarter of fiscal year 2009. Discontinued operations include Telcordia Technologies, Inc., which was sold in the first quarter of fiscal year 2006, and the Applied Marine Technology, Inc. products business, which was sold in the first quarter of fiscal year 2010.
Earnings per share and share count figures quoted for fiscal year 2009 differ from those cited previously because on February 1, 2009, the company adopted Financial Accounting Standards Board (FASB) Staff Position (FSP) No. EITF 03-6-1 "Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities," which requires retrospective application to prior periods. Upon adoption, basic EPS from continuing operations, basic EPS, diluted EPS from discontinued operations and diluted EPS for the three months ended April 30, 2008 each decreased by $0.01. The new methodology had a similarly dilutive effect for the three months ended April 30, 2009.
Cash Generation and Capital Deployment
Cash flow from operations for the quarter was $163 million (or 1.4 times income from continuing operations) compared to $14 million in the first quarter of fiscal year 2009. Cash collections continued to be strong as days sales outstanding (DSO) were 68 days, flat sequentially and an improvement of five days year-over-year.
During the quarter, the company used $223 million to repurchase approximately 12 million common shares including 11 million under the company's stock repurchase program and the remainder in recurring repurchases from employees in settlement of withholding taxes associated with stock option exercises and vesting events. Whether any future repurchases are made and the timing and actual number of shares repurchased under the stock repurchase program will depend on a variety of factors, including share price, corporate capital requirements, and other market conditions. As of April 30, 2009, the company had $898 million in cash and cash equivalents and $1.1 billion in long-term debt.
New Business Awards
Net new business bookings totaled $2.6 billion in the first quarter, representing a book-to-bill ratio of 1.0. Net bookings are calculated as the current period ending backlog plus the current period's revenue less prior period ending backlog and backlog obtained in acquisitions. No bookings value is assigned unless the company has received a signed contract for a priced statement of work.
Large, competitive definite delivery contract awards received during the quarter include:
Armed Forces Health Longitudinal Technology Application/Composite Health Care System (AHLTA/CHCS) Support. Under a 30-month, $158 million task order, SAIC will provide engineering, logistics and sustainment support to AHLTA/CHCS to ensure the quality care of 9.4 million beneficiaries at more than 135 Military Treatment Facilities worldwide. Together, the AHLTA electronic health record and the CHCS integrated hospital information system enable the Military Health System to track clinical care and exposures of deployed units, monitor demand-management effectiveness, better understand disease prevalence and prevention, and study both clinical and management outcomes.
Tactical Biometrics Systems (TBS) Support. SAIC was awarded a subcontract by Sensor Technologies Incorporated to support the U.S. Army Communications and Electronics Command by providing operations and user maintenance support to TBS. SAIC's subcontract has a four-year period of performance and a total contract value of more than $115 million. TBS devices collect fingerprints, iris scans, facial photos and biographical information on persons of interest. The biometric data is then matched against a database, potentially identifying wanted or dangerous persons. SAIC will provide operations and user maintenance support to help ensure continued, reliable technical support of TBS systems, peripherals and networks.
Center for Domestic Preparedness (CDP) Support. SAIC received a five-year, $104 million contract from the Department of Homeland Security to provide training support to the CDP. CDP offers all-hazards training at the only federally chartered weapons of mass destruction training center, catering to emergency responders from all 50 states, the District of Columbia, and the U.S. territories. SAIC will design and develop emergency responder curriculum, provide qualified instructors to teach each course, and manage training logistics and sustainment activities.
U.S. Joint Forces Command (USJFCOM) Joint Capability Development Directorate (J8) Support. Under a five-year, $81 million task order, SAIC will support USJFCOM J8 in the areas of engineering, analysis, test, and evaluation. SAIC will perform work in the areas of command and control, capability engineering, system engineering and integration, capability portfolio management, and net-enabled command capability to help address the complex challenges associated with joint capability development.
Hawaii Energy Efficiency Program Administration. SAIC was awarded a contract to administer the rate-payer funded Hawaii Energy Efficiency Program, helping Hawaiian residents and businesses become more energy efficient. The contract potentially runs through 2016; the contract has a value of $38 million for the first two years. SAIC will provide program design and implementation, customer incentives and rebates, new initiatives, interface with the Hawaii Clean Energy Initiative, and manage efforts concerning commercial, industrial, residential, and renewable energy programs.
In addition, SAIC also won several indefinite delivery/indefinite quantity (IDIQ) contracts that are not included in net bookings. The most notable IDIQ awards during the quarter were:
General Services Administration (GSA) Alliant. SAIC was awarded a prime contract on the Alliant government-wide acquisition contract from the GSA. Alliant is a multiple-award contract with a 10-year period of performance and a total ceiling value for all awardees of $50 billion. The scope of work includes all components of an integrated information technology solution, including future technologies that may emerge during the life of the contract.
Simulation and Training Omnibus Contract (STOC II). SAIC will provide simulation, training and instrumentation services and products under STOC II, which was awarded by the U.S. Army's Program Executive Office for Simulation Training and Instrumentation (PEO STRI). This ten-year, multiple-award contract has a total ceiling value of $17.5 billion for all awardees. SAIC will perform a full range of life cycle management to include front end analysis, design, development, fielding, and sustainment of training and testing systems, instrumentation, and gaming system simulators.
U.S. Strategic Command (USSTRATCOM) Support Services. SAIC received a contract to provide technical analysis and studies for programs and strategies for USSTRATCOM. This multiple-award contract has a five-year period of performance and a ceiling value of $900 million for all awardees. USSTRATCOM's missions include Space Operations; Cyberspace Operations; Strategic Deterrence; Combating Weapons of Mass Destruction; Global Command and Control; Global Strike and Integration; Information Operations; Integrated Missile Defense; and Intelligence, Surveillance and Reconnaissance.
The company's backlog of signed business orders at the end of the first quarter of fiscal year 2010 was $16.7 billion, of which $5.7 billion was funded. As compared to the end of the first quarter of fiscal year 2009, total backlog increased 11 percent and funded backlog increased 6 percent. The negotiated unfunded backlog of $11.0 billion represents the estimated amount to be earned in the future from firm orders for which funding has not been appropriated or otherwise authorized and unexercised priced contract options. Negotiated unfunded backlog does not include any estimate of future expected task orders to be awarded under IDIQ or other master agreement contract vehicles.
Included within the backlog is approximately $0.1 billion in funded backlog and $1.0 billion in negotiated unfunded backlog related to FCS through the current contract end date of December 31, 2014. The company expects that it will soon stop work on the manned ground vehicle component of FCS but continue work on the system-of-systems integration component and the new technology spin-outs under a new or modified contract. The company expects that approximately $0.2 billion of the FCS backlog will be recognized as revenues throughout the remainder of fiscal 2010.
Forward Guidance
Despite the FCS developments, SAIC maintains a healthy backlog and a strong market position across its wide business base. Absent further disruptions in government funding, the company currently expects to achieve all of its long-term, average annual financial goals in fiscal year 2010:
Growing revenue internally in the six percent to nine percent range;Improving operating margin by 20 to 30 basis points until reaching a sustainable level between eight percent and nine percent; and Growing earnings per share from 11 percent to 18 percent.
Mark Sopp, SAIC chief financial officer commented, "The company has built a resilient and diversified base of business and new opportunities that enables us to reaffirm our expectation that we will achieve our long-term financial growth goals again in fiscal year 2010 despite the restructuring of FCS. The strength of this company lies not with one contract, but with thousands of contracts and 45,000 employees dedicated to solving our customers' most difficult problems."
About SAIC
SAIC is a FORTUNE 500® scientific, engineering, and technology applications company that uses its deep domain knowledge to solve problems of vital importance to the nation and the world, in national security, energy and the environment, critical infrastructure, and health. The company's approximately 45,000 employees serve customers in the U.S. Department of Defense, the intelligence community, the U.S. Department of Homeland Security, other U.S. Government civil agencies and selected commercial markets. SAIC had annual revenues of $10.1 billion for its fiscal year ended January 31, 2009. For more information, visit www.saic.com.
SAIC: From Science to Solutions®
Forward-Looking Statements
Certain statements in this release contain or are based on "forward-looking" information within the meaning of the Private Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by words such as "expects," "intends," "plans," "anticipates," "believes," "estimates," "guidance" and similar words or phrases. Forward-looking statements in this release include, among others, estimates of future revenues, earnings, backlog, outstanding shares and cash flows. These statements reflect our belief and assumptions as to future events that may not prove to be accurate. Actual performance and results may differ materially from the guidance and other forward-looking statements made in this release depending on a variety of factors, including: changes in the U.S. Government defense budget or budgetary priorities or delays in the U.S. budget process; changes in U.S. Government procurement rules and regulations; our compliance with various U.S. Government and other government procurement rules and regulations; the outcome of U.S. Government reviews, audits and investigations of our company; our ability to win contracts with the U.S. Government and others; our ability to attract, train and retain skilled employees; our ability to maintain relationships with prime contractors, subcontractors and joint venture partners; our ability to obtain required security clearances for our employees; our ability to accurately estimate costs associated with our firm-fixed-price and other contracts; resolution of legal and other disputes with our customers and others; our ability to successfully acquire and integrate businesses; our ability to manage risks associated with our international business; our ability to compete with others in the markets in which we operate; and our ability to execute our business plan effectively and to overcome these and other known and unknown risks that we face. These are only some of the factors that may affect the forward-looking statements contained in this release. For further information concerning risks and uncertainties associated with our business, please refer to the filings we make from time to time with the SEC, including the "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Legal Proceedings" sections of our latest annual report on Form 10-K and quarterly report on Form 10-Q, which may be viewed or obtained through the Investor Relations section of our Web site at www.saic.com.
All information in this release is as of June 3, 2009. SAIC expressly disclaims any duty to update the guidance or any other forward-looking statement provided in this release to reflect subsequent events, actual results or changes in the company's expectations. SAIC also disclaims any duty to comment upon or correct information that may be contained in reports published by investment analysts or others.
CONTACTS: Investor Relations: Stuart Davis 703-676-2283 stuart.davis@saic.com
Media Relations: Laura Luke Melissa Koskovich 703-676-6533 703-676-6762 laura.luke@saic.com
melissa.l.koskovich@saic.com
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- Diluted EPS from Continuing Operations: Up 16 percent to $0.29
- Reaffirming Guidance for Fiscal Year 2010
SAN DIEGO and MCLEAN, Va., June 3 -- SAIC, Inc. (NYSE: SAI ), a scientific, engineering, and technology applications company, today announced financial results for the first quarter of fiscal year 2010, which ended April 30, 2009.
After the quarter ended, the U.S. Department of Defense indicated that it intends to restructure the Future Combat Systems (FCS) program, which represents about 3 percent of the company's annual revenue. The company currently expects to have a significant role under the restructured program, but the level of effort and terms and conditions remain under negotiation.
"In the first quarter of fiscal year 2010, we continued to demonstrate a pattern of solid program execution and financial performance," said Ken Dahlberg, SAIC chairman and chief executive officer. "I am especially pleased that the results were so uniformly positive. That is, all of our major metrics -- revenue, operating margin, earnings per share, and cash flow -- were robust, and virtually all of our business units met or exceeded our expectations. Although the potential restructuring of FCS provides some uncertainty, based on our strong market position across our wide business base, we expect fiscal year 2010 to be another solid year for the company."
Summary Operating Results
Revenues for the quarter were $2.65 billion, up 12 percent from $2.37 billion in the first quarter of fiscal year 2009. Internal, or non-acquisition, growth represented 11 percentage points of the consolidated growth for the quarter. Key drivers of internal growth included the initial ramp of recent wins in defense logistics, information technology, cyber-security, and intelligence support as well as increased tasking on existing defense and intelligence programs.
Operating income for the quarter was $204 million (7.7 percent of revenue), up 17 percent from $174 million (7.4 percent of revenue) in the first quarter of fiscal year 2009. Growth in quarterly operating margin percentage was driven by continued improvements in cost efficiency and contract fees. Income from continuing operations for the quarter was $117 million, up 11 percent from $105 million in the first quarter of fiscal year 2009. Income from continuing operations grew more slowly than operating income primarily because of a $7 million reduction in interest income net of interest expense and a $5 million reduction in other income resulting from joint venture activities and a gain on the sale of two venture capital portfolio investments in the year-ago period.
Diluted earnings per share (EPS) from continuing operations for the quarter were $0.29, up 16 percent from $0.25 in the first quarter of fiscal year 2009, driven by the increase in income from continuing operations and a lower share count compared to the prior year quarter. The diluted share count for the quarter was 397 million, down 3 percent from 410 million in the first quarter of fiscal year 2009, due primarily to share repurchases made over the last four quarters. Diluted earnings per share, which include discontinued operations, were $0.28 for the quarter, up 17 percent from $0.24 in the first quarter of fiscal year 2009. Discontinued operations include Telcordia Technologies, Inc., which was sold in the first quarter of fiscal year 2006, and the Applied Marine Technology, Inc. products business, which was sold in the first quarter of fiscal year 2010.
Earnings per share and share count figures quoted for fiscal year 2009 differ from those cited previously because on February 1, 2009, the company adopted Financial Accounting Standards Board (FASB) Staff Position (FSP) No. EITF 03-6-1 "Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities," which requires retrospective application to prior periods. Upon adoption, basic EPS from continuing operations, basic EPS, diluted EPS from discontinued operations and diluted EPS for the three months ended April 30, 2008 each decreased by $0.01. The new methodology had a similarly dilutive effect for the three months ended April 30, 2009.
Cash Generation and Capital Deployment
Cash flow from operations for the quarter was $163 million (or 1.4 times income from continuing operations) compared to $14 million in the first quarter of fiscal year 2009. Cash collections continued to be strong as days sales outstanding (DSO) were 68 days, flat sequentially and an improvement of five days year-over-year.
During the quarter, the company used $223 million to repurchase approximately 12 million common shares including 11 million under the company's stock repurchase program and the remainder in recurring repurchases from employees in settlement of withholding taxes associated with stock option exercises and vesting events. Whether any future repurchases are made and the timing and actual number of shares repurchased under the stock repurchase program will depend on a variety of factors, including share price, corporate capital requirements, and other market conditions. As of April 30, 2009, the company had $898 million in cash and cash equivalents and $1.1 billion in long-term debt.
New Business Awards
Net new business bookings totaled $2.6 billion in the first quarter, representing a book-to-bill ratio of 1.0. Net bookings are calculated as the current period ending backlog plus the current period's revenue less prior period ending backlog and backlog obtained in acquisitions. No bookings value is assigned unless the company has received a signed contract for a priced statement of work.
Large, competitive definite delivery contract awards received during the quarter include:
Armed Forces Health Longitudinal Technology Application/Composite Health Care System (AHLTA/CHCS) Support. Under a 30-month, $158 million task order, SAIC will provide engineering, logistics and sustainment support to AHLTA/CHCS to ensure the quality care of 9.4 million beneficiaries at more than 135 Military Treatment Facilities worldwide. Together, the AHLTA electronic health record and the CHCS integrated hospital information system enable the Military Health System to track clinical care and exposures of deployed units, monitor demand-management effectiveness, better understand disease prevalence and prevention, and study both clinical and management outcomes.
Tactical Biometrics Systems (TBS) Support. SAIC was awarded a subcontract by Sensor Technologies Incorporated to support the U.S. Army Communications and Electronics Command by providing operations and user maintenance support to TBS. SAIC's subcontract has a four-year period of performance and a total contract value of more than $115 million. TBS devices collect fingerprints, iris scans, facial photos and biographical information on persons of interest. The biometric data is then matched against a database, potentially identifying wanted or dangerous persons. SAIC will provide operations and user maintenance support to help ensure continued, reliable technical support of TBS systems, peripherals and networks.
Center for Domestic Preparedness (CDP) Support. SAIC received a five-year, $104 million contract from the Department of Homeland Security to provide training support to the CDP. CDP offers all-hazards training at the only federally chartered weapons of mass destruction training center, catering to emergency responders from all 50 states, the District of Columbia, and the U.S. territories. SAIC will design and develop emergency responder curriculum, provide qualified instructors to teach each course, and manage training logistics and sustainment activities.
U.S. Joint Forces Command (USJFCOM) Joint Capability Development Directorate (J8) Support. Under a five-year, $81 million task order, SAIC will support USJFCOM J8 in the areas of engineering, analysis, test, and evaluation. SAIC will perform work in the areas of command and control, capability engineering, system engineering and integration, capability portfolio management, and net-enabled command capability to help address the complex challenges associated with joint capability development.
Hawaii Energy Efficiency Program Administration. SAIC was awarded a contract to administer the rate-payer funded Hawaii Energy Efficiency Program, helping Hawaiian residents and businesses become more energy efficient. The contract potentially runs through 2016; the contract has a value of $38 million for the first two years. SAIC will provide program design and implementation, customer incentives and rebates, new initiatives, interface with the Hawaii Clean Energy Initiative, and manage efforts concerning commercial, industrial, residential, and renewable energy programs.
In addition, SAIC also won several indefinite delivery/indefinite quantity (IDIQ) contracts that are not included in net bookings. The most notable IDIQ awards during the quarter were:
General Services Administration (GSA) Alliant. SAIC was awarded a prime contract on the Alliant government-wide acquisition contract from the GSA. Alliant is a multiple-award contract with a 10-year period of performance and a total ceiling value for all awardees of $50 billion. The scope of work includes all components of an integrated information technology solution, including future technologies that may emerge during the life of the contract.
Simulation and Training Omnibus Contract (STOC II). SAIC will provide simulation, training and instrumentation services and products under STOC II, which was awarded by the U.S. Army's Program Executive Office for Simulation Training and Instrumentation (PEO STRI). This ten-year, multiple-award contract has a total ceiling value of $17.5 billion for all awardees. SAIC will perform a full range of life cycle management to include front end analysis, design, development, fielding, and sustainment of training and testing systems, instrumentation, and gaming system simulators.
U.S. Strategic Command (USSTRATCOM) Support Services. SAIC received a contract to provide technical analysis and studies for programs and strategies for USSTRATCOM. This multiple-award contract has a five-year period of performance and a ceiling value of $900 million for all awardees. USSTRATCOM's missions include Space Operations; Cyberspace Operations; Strategic Deterrence; Combating Weapons of Mass Destruction; Global Command and Control; Global Strike and Integration; Information Operations; Integrated Missile Defense; and Intelligence, Surveillance and Reconnaissance.
The company's backlog of signed business orders at the end of the first quarter of fiscal year 2010 was $16.7 billion, of which $5.7 billion was funded. As compared to the end of the first quarter of fiscal year 2009, total backlog increased 11 percent and funded backlog increased 6 percent. The negotiated unfunded backlog of $11.0 billion represents the estimated amount to be earned in the future from firm orders for which funding has not been appropriated or otherwise authorized and unexercised priced contract options. Negotiated unfunded backlog does not include any estimate of future expected task orders to be awarded under IDIQ or other master agreement contract vehicles.
Included within the backlog is approximately $0.1 billion in funded backlog and $1.0 billion in negotiated unfunded backlog related to FCS through the current contract end date of December 31, 2014. The company expects that it will soon stop work on the manned ground vehicle component of FCS but continue work on the system-of-systems integration component and the new technology spin-outs under a new or modified contract. The company expects that approximately $0.2 billion of the FCS backlog will be recognized as revenues throughout the remainder of fiscal 2010.
Forward Guidance
Despite the FCS developments, SAIC maintains a healthy backlog and a strong market position across its wide business base. Absent further disruptions in government funding, the company currently expects to achieve all of its long-term, average annual financial goals in fiscal year 2010:
Growing revenue internally in the six percent to nine percent range;Improving operating margin by 20 to 30 basis points until reaching a sustainable level between eight percent and nine percent; and Growing earnings per share from 11 percent to 18 percent.
Mark Sopp, SAIC chief financial officer commented, "The company has built a resilient and diversified base of business and new opportunities that enables us to reaffirm our expectation that we will achieve our long-term financial growth goals again in fiscal year 2010 despite the restructuring of FCS. The strength of this company lies not with one contract, but with thousands of contracts and 45,000 employees dedicated to solving our customers' most difficult problems."
About SAIC
SAIC is a FORTUNE 500® scientific, engineering, and technology applications company that uses its deep domain knowledge to solve problems of vital importance to the nation and the world, in national security, energy and the environment, critical infrastructure, and health. The company's approximately 45,000 employees serve customers in the U.S. Department of Defense, the intelligence community, the U.S. Department of Homeland Security, other U.S. Government civil agencies and selected commercial markets. SAIC had annual revenues of $10.1 billion for its fiscal year ended January 31, 2009. For more information, visit www.saic.com.
SAIC: From Science to Solutions®
Forward-Looking Statements
Certain statements in this release contain or are based on "forward-looking" information within the meaning of the Private Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by words such as "expects," "intends," "plans," "anticipates," "believes," "estimates," "guidance" and similar words or phrases. Forward-looking statements in this release include, among others, estimates of future revenues, earnings, backlog, outstanding shares and cash flows. These statements reflect our belief and assumptions as to future events that may not prove to be accurate. Actual performance and results may differ materially from the guidance and other forward-looking statements made in this release depending on a variety of factors, including: changes in the U.S. Government defense budget or budgetary priorities or delays in the U.S. budget process; changes in U.S. Government procurement rules and regulations; our compliance with various U.S. Government and other government procurement rules and regulations; the outcome of U.S. Government reviews, audits and investigations of our company; our ability to win contracts with the U.S. Government and others; our ability to attract, train and retain skilled employees; our ability to maintain relationships with prime contractors, subcontractors and joint venture partners; our ability to obtain required security clearances for our employees; our ability to accurately estimate costs associated with our firm-fixed-price and other contracts; resolution of legal and other disputes with our customers and others; our ability to successfully acquire and integrate businesses; our ability to manage risks associated with our international business; our ability to compete with others in the markets in which we operate; and our ability to execute our business plan effectively and to overcome these and other known and unknown risks that we face. These are only some of the factors that may affect the forward-looking statements contained in this release. For further information concerning risks and uncertainties associated with our business, please refer to the filings we make from time to time with the SEC, including the "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Legal Proceedings" sections of our latest annual report on Form 10-K and quarterly report on Form 10-Q, which may be viewed or obtained through the Investor Relations section of our Web site at www.saic.com.
All information in this release is as of June 3, 2009. SAIC expressly disclaims any duty to update the guidance or any other forward-looking statement provided in this release to reflect subsequent events, actual results or changes in the company's expectations. SAIC also disclaims any duty to comment upon or correct information that may be contained in reports published by investment analysts or others.
CONTACTS: Investor Relations: Stuart Davis 703-676-2283 stuart.davis@saic.com
Media Relations: Laura Luke Melissa Koskovich 703-676-6533 703-676-6762 laura.luke@saic.com
melissa.l.koskovich@saic.com
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