This week Republican senators introduced a bill aimed at delaying the spending cuts required under sequestration by one year. Senator John McCain, R-Arizona, introduced the legislation entitled, the “Down Payment to Protect National Security Act of 2012,” aimed towards reducing federal spending by $127 billion over the next ten years. Republicans hope to realize these savings through an extension of the federal pay freeze, including members of Congress, by an additional year and a reduction in the federal workforce through attrition. According to John McCain, roughly $110 billion is required to cover the first year of cuts under sequestration; however, President Obama has formerly stated that he would veto any plan that would undo the Budget Control Act of 2011’s sequestration provision because he believes it could still force Congress to come together on a much broader solution to reduce the country’s deficit.
As budget cuts are pushed throughout the military, reductions in the Air Force are expected to be met through a heavier reliance on multirole aircraft. According to Dan Goure, an analyst at the Lexington Institute, the service cannot afford to maintain fleets of specialized aircraft anymore, even though it might mean the Air Force ends up with planes capable of performing many missions, but none particularly well. Given the delays on the F-35, however, the Air Force is currently modifying roughly 350 F-16s to add capabilities and extend the aircrafts’ service life.
Northstar Aerospace Inc. (Down 62.3%) – Shares plunged this week after the company received a notice from a major customer claiming breach of obligations under certain contracts. The aircraft parts maker said that it expects to violate its financial covenants as of January 31.
Cubic Corporation (Up 10.6%) – Shares rose this week after the company released Q12012 sales and operating income of $318.7 million and $28.2 million, compared to $284.4 million and $27.2 million the same quarter last year, an increase of 12% and 4%, respectively. The company also announced a record backlog of $3.2 billion.
BE Aerospace Inc. (Up 10.4%) – Shares are up this week after the company announced fiscal 2012 estimated revenue and earnings per share (“EPS”) to be approximately $2.95 billion and $2.75 per diluted share, respectively. Analysts had expected revenue of $2.86 billion and EPS of $2.74 for fiscal 2012.
ICF International Inc. to acquire GHK Holdings Limited, a multidisciplinary consultancy serving government and commercial clients on government, health, and international development issues. The acquisition is expected to strengthen ICF’s European presence and create critical mass for ICF in high-growth Asian markets. Terms of the deal were not disclosed.
Wynnchurch Capital, Ltd. acquired the assets of Burtek, Inc., a manufacturer of ground-based mobile military equipment, such as radar systems, ground vehicles, and shelters, for nine million dollars. Wynnchurch originally offered $14 million two months ago, but reduced its offer after Burtek lost two contracts while the deal was still pending. The deal closed late Thursday after a U.S. District Court approved the sale.
Berger Group Holdings, Inc. Acquired Ranger International Services Group, Inc., a provider of aviation, logistics, and engineering services both domestically and internationally, for an undisclosed amount. The acquisition is expected to increase Berger’s capabilities in government operations contracting, operations and maintenance, airfield operations, and specialized technical services. Ranger International Services Group, Inc., will now do business under the Louis Berger Services, Inc. name.