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Strategies & Market Trends : Bosco & Crossy's stock picks,talk area -- Ignore unavailable to you. Want to Upgrade?

To: Crossy who wrote (23910)	9/24/2006 2:00:01 PM
From: ACAN	Read Replies (1) \| Respond to of 37387

Crossy; [ESLT] any thoughts on this one. A division of Israel Aircraft Industries Sep. 22, 2006 12:47 \| Updated Sep. 22, 2006 16:11 Israel's Elbit wins US security contract By YAAKOV KATZ A consortium led by Boeing, the second-largest US defense contractor, and including Israel's Elbit Systems has won the first piece of a $2 billion government contract to develop and provide new technological means to secure the US borders and curb illegal immigration, officials said Thursday. The contract, valued at $80 million, is the first part of a multibillion-dollar Homeland Security Department plan to help secure US borders with Mexico and Canada. The final bill's total is unknown, a department official said, because it hinges largely on whether Congress will approve spending about $1 billion to build a fence on the Mexican border. Until then, the contract will be given to Boeing in phases, the department official said. Chicago-based Boeing was among several major defense companies competing for the job. While other companies' proposals relied more heavily on using flying drones to patrol the border, Boeing focused on a network of 1,800 high-tech towers, equipped with cameras and motion detectors that could feed live information to Border Patrol agents. Elbit serves as a member of the consortium through Kollsman Inc., its US subsidiary. Kollsman's expertise in Homeland Security includes the integration and development of innovative electro-optical systems for surveillance and tracking, optical fiber technology for security, video communication and control systems alongside image-processing and smart systems for electronic fences. Unmanned Aerial Vehicle (UAVs) of the Hermes family of UAVs and the Skylark man-packed UAV, which are used for military and homeland security applications, are also part of the capabilities Kollsman brought to the consortium. "US citizens and the federal government are very concerned about vulnerabilities on the porous US northern and southern borders," said Elbit Systems of America President & CEO Tim Taylor. "The strategic and technological strengths we bring to the Boeing team will help restore the safety and security that Americans have known for so long." The contract, part of the Secure Border Initiative, is the government's latest attempt to use advanced technology to solve the illegal immigration problem, which lawmakers have called a national security issue and which has given new attention in light of the Sept. 11, 2001, terrorist attacks. Homeland Security gave companies chasing the contract - including Lockheed Martin Corp. and Northrop Grumman Corp. - freedom to come up with their own ideas for how best to apply new and developing technologies to the problem Allan

To: Crossy who wrote (23910)	9/24/2006 2:38:01 PM
From: jayt	Respond to of 37387

The New America column ANAREN East Syracuse, New York Defense Contractor Targets Lucrative Consumer Electronics Market BY DANIEL DEL’RE INVESTOR'S BUSINESS DAILY Anaren has transformed itself from a narrowly focused supplier of military communications technology into a big-league player in the market for commercial communications equipment. The company’s radio signal receivers help route cell phone calls along the networks of the biggest service providers, including Verizon Wireless and Cingular Wireless. The receivers also help satellite dishes catch video feed from space and transmit it to 12 million subscribers of EchoStar’s DISH Dish Network. Anaren’s ANEN commercial wireless business accounts for 63% of revenue, up from 12% in 1996, when Lawrence Sala took the helm as chief executive. Over that time, Anaren’s annual revenue surged nearly fivefold to $106 million. Sala has a 22-year history with the company and is directing product development toward the lucrative market for cell phone handsets and electronic gadgets. Tiny Receivers The consumer market opened up for Anaren when the company’s engineers found a way to shrink their microwave receivers to 1/100th their original size while enhancing their ability to find open frequencies and pick up signals. This size advantage makes them appropriate for cell phone handsets and wireless earpieces that use Bluetooth technology. “These markets are attractive because of the high sales volume,” Sala said. Shipments of cell phone handsets are expected to jump nearly 5% to 291 million in the Asia-Pacific region and almost 10% to 163 million in North America by 2009, according to research firm Yankee Group. Consumer products researcher In-Stat estimates that the number of Bluetooth-enabled headset shipments will jump 60% to 55 million units this year. Currently, radio signal splitters and combiners for cell phone network infrastructure are the core of Anaren’s commercial products. Nortel NT , Lucent LU , Ericsson ERIC and Nokia NOK put Anaren’s devices into the antennas and base stations that transmit and receive cell phone calls. Splitters and combiners manipulate arcane properties of electromagnetism to split a single radio frequency into many and to do the reverse. This helps cell phone service providers distribute signals to handle high call volumes with fewer towers and base stations. Many of the splitters and combiners are custom made. Customization is a less attractive business for Anaren because it requires greater investment in research and development; this pinches profit margins. In the most recent fiscal year, R&D expenses jumped nearly 40% to $8.7 million, or 8.3% of net sales, vs. 6.7% a year earlier. Richard Valera, an analyst with Needham and Co., says Anaren wants to focus on high volume manufacturing of standard telecom components. Anaren has consistently introduced more of these products into its portfolio. The company churns out termination devices to maintain the integrity of radio signals and prevent them from bouncing off receivers. Anaren is also rolling out a line of ferrite, or iron-based, components that prevent unusually strong radio signals from damaging the sensitive amplification systems in cell phone service infrastructure. These products can be churned out at high volumes and fat margins. As standard products increase as a proportion of sales, Anaren’s gross margin widened nearly 5 percentage points to 36.3% in the most recent fiscal year. What’s more, standard products offer smoother, more predictable revenue streams than customized products that aren’t likely to generate recurring revenue. Struggle For Handsets The company has worked with lower tier makers of cell phone technology. Two of those makers are RFMD RFMD and Skyworks. But Anaren has not scored a major product supply contract. “Handsets make up almost a totally different market than what Anaren’s used to with base stations,” Valera said. “I don’t see this as a revenue driver in the next year.” Only a small portion of Anaren’s revenue comes from the technology it supplies for satellite television dishes. But this could be a high growth segment. Anaren hopes to win business with the two major satellite TV providers, DirecTV DTV and EchoStar. This would give Anaren an advantage if the satellite TV service providers upgrade their equipment to carry high-definition signals. By 2010, 96% of American households will receive digital TV broadcasts, according to the Consumer Electronics Association. Most will probably subscribe to cable service, not satellite. Until the consumer products side of Anaren’s business comes up to speed, telecom network gear and military contracts will be mainstays. Top military contractors, including Raytheon RTN , Lockheed Martin LMT and Northrop Grumman NOC , use Anaren’s technology for satellite communication networks, missile guidance and location systems. Anaren’s backlog of space and defense contracts stood at $48 million in June. The company expects to deliver $38 million to $40 million of those orders this year. “Their defense business is rock solid,” Valera said. The mean analyst estimate for revenue in the current quarter is $28.7 million, or 30% growth in earnings to 22 cents a share. For the current fiscal year, which just began, analysts expect 14% growth in annual revenue to $120 million and 20% earnings growth to 96 cents a share.