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ITT ELECTRONIC SYSTEMS BROADENS ITS PRODUCT BASE
ITT ELECTRONIC SYSTEMS BROADENS ITS PRODUCT BASE
By Julian Nettlefold
26 Oct 10. BATTLESPACE Editor Julian met up with Ken Peterman President of ITT Communications Systems, to discuss the new product range introduced over the past year to broaden the ITT’s offering away from what was once perceived as a single product, SINCGARS radio, Company.
“We have now supplied more than 500,000 SINCGARS radios, of which 50% are less than four years old and we’ve made several technological innovations available on these new radios. This gives a huge base on which to grow capability and technology. For instance we are now building 1000 Iridium radios a month at Fort Wayne and have developed a Global Network On the Move Active Distribution (GNOMAD)system. This is a Ku-band satellite communications on-the-move system, supplying mobile networks for an array of military and government agency vehicles. The next stage, which our engineers are looking at, is to miniaturize the system, which is currently housed in a rugged container, and integrate it seamlessly into existing legacy systems.” Ken Peterman said
The acquisition of EDO gave ITT the impetus to grow its capabilities into new areas, and build on existing capabilities, particularly IED detectors which both it and EDO had a strategic presence at a time of huge growth in these systems.
On January 5th ITT Corporation announced a strategic realignment of its defense segment, a move designed to better align the company with the emerging needs of its expanding global customer base, which is increasingly integrated and network-centric. The realignment will enable better integration of its product portfolio, encouraging a more coordinated market approach and reduced operational redundancies.
“We are positioning ITT to support our customers' emerging technology needs, while also greatly enhancing our ability to stake out new markets,” said Ken Peterman. “We believe this move will also allow ITT to achieve greater operating efficiencies and optimize our cost structure, which will help drive successful business strategies for continued top-line growth.”
The company's defense segment was renamed ITT Defense and Information Solutions. Its current organizational structure, comprising seven separate business units, will be consolidated into three larger ones.
* The Electronic Systems and Communications Systems divisions, as well as a portion of the Intelligence & Information Warfare division, were merged to form a more versatile Electronic Systems division, based in Clifton, N.J. This division will deliver advanced protection measures that work together to help ITT's customers defend their networks and disable enemy networks. It will shift its focus from producing separate, point-of-use products to secure, networked communications systems and powerful sensing, surveillance and reconnaissance technologies that address the entire spectrum of electronic warfare.
“Our international sales growth has exceeded expectations to offset the expected decline post-SINCGARS. In 2007 international sales were $113m, rising to $198m in 2008 to $238m in 2009. We targeted several key countries and Iraq, in particular, has shown huge growth with sales of 40,000 radios achieved making it our third largest customer after the U.K. which has purchased 45,000 radios. In addition we developed a series of new products such as GNOMAD, Rifleman Radio, Common Core Radio, Iridium handsets and EW products.”
GNOMAD has a Raysat low-profile antenna, offering data rates of up to 2 Mbps, mounted on a vehicle. NOMAD is a ruggedized system, consisting of a satellite antenna and a baseband transit case which can be installed on a various vehicle types including HMMVs, MRAPs, MATVs, Strykers and commercial SUVs for paramilitary and government usage. The system uses an open architecture approach using COTS components to provide a system that is agnostic to line-of-sight radios and satellite modems. NOMAD provides full duplex communications over satellite, to include voice, data and video. When coupled with UHF and VHF radios, such as SINCGARS and the Embedded GPS Receiver (EGR), Blue Force Situational Awareness can be fed directly into the Common Operating Picture. This not only allows for the potential reduction in the numbers of antennas on the vehicles, but reduces the overall equipment footprint internal to the vehicle.
Soldier Radio Waveform
Harris Corporation and ITT Corporation announced this month that they are collaborating to accelerate the fielding of the Soldier Radio Waveform, a central piece of the U.S. Department of Defense vision for a networked digital battlefield. Harris and ITT have successfully exchanged voice and data between the Harris Falcon III® AN/PRC-117G manpack and ITT's Soldier Radio development model using the specified SRW Version 1.01.1C. This is the first time that independently developed tactical radios have interoperated using open-standard wideband JTRS technology. Both the AN/PRC-117G and ITT's Soldier Radio were developed under the JTRS Enterprise Business Model, which is designed to spur innovation in tactical communications. Harris' rapid implementation demonstrates the portability of SRW. The Soldier Radio Waveform is being developed to serve as a standard for wideband tactical communications for the U.S. Department of Defense. SRW will deliver voice, data, and high-bandwidth networking capabilities to forces at the tactical edge. Following the success of the exercise, Harris plans to conduct additional testing to include additional SRW features, such as communications security and SRW Network Manager integration. The company is integrating SRW into the AN/PRC-117G manpack, with release expected next summer. The Harris Falcon III AN/PRC-117G is the first wideband manpack radio system with a JTRS-certified Software Communications Architecture and NSA Type-1 certified information security. The radio's wideband architecture enables applications such as streaming video, simultaneous voice, and data feeds, collaborative chat, and connectivity to secure networks such as SIPRNet, providing warfighters and field commanders with critical real-time information through a man-portable radio that is significantly smaller, lighter and more capable than legacy units.
ITT Soldier Radio
The ITT Soldier Radio is a next generation of software-defined wideband communication capability for the dismounted soldier that provides dynamic ad hoc networked voice and data under all combat conditions. This Soldier Radio leverages on the maturity of ITT-developed SRW—with several years of field experiments, demonstrations and tests, including the most recent 36-node test at Fort Dix—and ITT's advanced technology optimized for low size, weight, power and cost. ITT's insertion of advanced hardware has enabled simplified portability and higher waveform performance. Given the proven maturity, scalability and performance of SRW, and the ubiquity of SRW in the Army's architecture, the ITT Soldier Radio will enable the warfighter to achieve an affordable network centric capability for the dismounted Soldier.
Other new products include:
*The C2 Tactical radio which combines the power of a touch screen computer with on-the-move (OTM), over-the-horizon, secure voice and data communications. Based on the proven design of the handheld RO tactical Radio, the C2 includes a visual display extending Command and Control (C2) functionality to the field.
*The RO Tactical Radio goes to extremes to provide on-the-move (OTM) over-the-horizon secure voice and global position information in a handheld push-to-talk (PTT communications device. The RO utilizes the Distributed Tactical Communications System (DTCS) architecture and Iridium’s low-earth orbiting(LEO) satellites through the Defense Information Systems Agency’s (DISA) Enhanced Mobile Satellite Service (EMSS).
*ITT NexTrak is the first handheld GPS Global messenger to place reliable Blue Force Tracking, Situational Awareness and Global Messaging in the palm of your hand.
ITT reported improved third-quarter results
To underline this success, ITT reported improved third-quarter results on October 29th which reflected a prediction of a small decline of 1% in defense revenues for the full year.
ITT Corporation (NYSE: ITT) reported 2010 third-quarter revenue of $2.6bn and net income of $145mn, or $0.78 per share. Income from continuing operations was $12m, or $0.07 per share. Excluding the impact of special items, income from continuing operations for the quarter was $200m, or $1.08 per share, representing 6 percent year-over-year growth.
"Our outstanding results this quarter reflect strong revenue growth in our commercial businesses and excellent operating performance by our teams across the company. Our focused productivity and cost management programs more than offset the headwinds of higher commodity pricing and foreign exchange," said Steve Loranger, ITT's chairman, president and chief executive officer. "We are seeing excellent order intake in our Defense & Information Solutions group, with some key strategic wins that we believe position us well for the future. Our Fluid Technology and Motion & Flow Control markets continue to strengthen across the majority of our product categories and geographic regions, and we continue to see strong performance in emerging markets."
During the quarter, the company completed the acquisition of Godwin Pumps and announced plans to acquire O.I. Corporation and SRA International's Airport Operations Solutions group. The sale of CAS, Inc. was also completed in the third quarter.
Year-to-date cash from operations was $654m. Free cash flow, representing cash from operations less capital expenditures, was $480m; and the company projects it will exceed its full-year cash flow conversion target, which is 100 percent of income from continuing operations adjusted for non-cash special items.
In the third quarter of 2010, ITT completed its first annual review and update of its net asbestos liability and increased the balance to reflect recent data that point to higher expected net costs over the next 10 years. Third-quarter 2010 results reflect an after-tax charge of $198m, or $1.07 per share, related to the net liability increase. Currently, this charge is not projected to materially impact the company’s ten-year forecasted operating annual cash flows. In addition, the company recognized an after-tax gain of $152m, or $0.82 per share, from the divestiture of CAS, Inc. This gain partially offset the charge related to the net asbestos liability.
Third-Quarter Segment Results
Defense & Information Solutions
The Defense business ended the quarter with solid backlog and excellent order growth rates in the quarter. Third-quarter 2010 revenue for the Defense segment was $1.4bn, down 9 percent compared with the year-ago period. The third-quarter revenue decline was partially driven by anticipated declines in counter improvised explosive device units and tactical radios and a decline in revenue related to software engineering services. In addition, there were lower shipments on firm orders of night vision goggles, which were delayed into the fourth quarter. This was partially offset by growth in special purpose jammers, radar, composite structures and increased activity under the Automatic Dependent Surveillance-Broadcast (ADS-B) air-traffic control program. Organic orders were up 100 percent on a sequential basis and increased 25 percent compared with the prior-year period, driven by orders for tactical radios in Iraq, commercial imaging satellites and new service contracts.
Strong productivity and cost reductions in the segment were offset by lower volume, resulting in an 11 percent decrease in third-quarter operating income to $178 million.
The company is increasing its guidance for full-year 2010 adjusted earnings per share to a range of $4.28 to $4.32, compared with a previous forecast of $4.08 to $4.18. The new midpoint of $4.30 represents 15 percent growth compared with the prior year.
Revenue for the full year is expected to grow approximately 4 percent to $11bn. Organic revenue is expected to grow 2 percent. Based on current order patterns, the company projects 2010 Defense & Information Solutions revenue for the full year to decline 1 percent. Fluid Technology 2010 revenue is expected to grow 8 percent, and organic revenue for the segment is expected to grow 1 percent. In Motion & Flow Control, total revenue is expected to grow 15 percent, and organic revenue is expected to grow 18 percent.
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