Page 97 – Defense Daily

HII Ends 2024 On Sour Note As Earnings, Sales Decline

HII [HII] on Thursday reported a steep decline in earnings in its fourth quarter driven by lower performance in construction of attack submarines and new aircraft carriers coupled with non-recurring gains a year ago related a tax recovery and an insurance settlement.

Sales also fell across the company’s operating segments, with shipbuilding revenue down on lower volume on amphibious assault ships and aircraft carrier refueling and overhauls, less revenue from contract adjustments on attack submarine and carrier construction, less nuclear support work for the Navy, and less C5ISR work.

Net income in the quarter tumbled 55 percent to $123 million, $3.15 earnings per share (EPS), from $274 million ($6.90 EPS) a year ago, short of consensus estimates by 13 cents per share. Those estimates were already depressed following a difficult third quarter when HII said delays in an omnibus submarine building contract that factors in post-COVID labor and wage-related realities had been stalled, combined with a less experienced workforce and infrastructure constraints cut into the bottom-line (Defense Daily, Oct. 31, 2024).

The company’s guidance assumes the contract for the 17 submarines—to include two

Virginia-class submarines in the fiscal year 2024 bill, one Columbia-class nuclear missile submarine—will be signed, Chris Kastner, HII’s president and CEO, said on an earnings call. He expects the contract for the Virginia submarines to be signed in the “first part” of 2025.

Shipbuilding operating margin in 2024 across HII’s two shipbuilding segments was 5.2 percent, well off the plan of several years ago that called for margins of 9 to 10 percent in these businesses. Kastner believes the company can return to its shipbuilding margin goals, highlighting that the government “has been very receptive to understanding the current economic environment, and we will get inflation protection in those in those new contracts.”

In 2025, about 70 percent of shipbuilding sales will come from contracts that were signed before the COVID pandemic, and that percentage will drop to 60 percent in 2026, and below 50 percent in 2027, Tom Stiehle, HII’s chief financial officer, said on the earnings call.

While HII exceeded its 2024 goal of hiring more than 6,000 shipbuilders, “attrition remains stubbornly high,” Kastner said. The company’s data shows that increasing wages, with help from the Navy, will stabilize the workforce, and also allow the hiring of skilled shipbuilders, he said.

HII’s acquisition in January of metal fabricator W International, which adds 500 workers and 480,000 square feet of additional space, is part of the company’s plan to increase shipbuilding throughput by 20 percent over 2024. The Charleston, S.C., facility is already building aircraft carrier units and soon will be constructing submarine units, Kastner said.

The labor initiatives, ramp-up of the Charleston operations, increasing outsourcing, and the use of contract labor to close skill gaps, are part of the shipbuilding throughput plan for 2025, which is the first of three operational imperatives for HII this year, he said.

The second imperative is achieving $250 million in annualized cost savings already underway, including a new payroll system and reducing the Mission Technologies segment from six down to four business units.

Finally, HII is ensuring that new ship contracts account for the “current economic and production environment,” Kastner said.

Sales in the fourth quarter were down about 5 percent to $3 billion from $3.2 billion a year ago. For the year, sales increased less than a percent to $11.5 billion. Net income in 2024 fell 19 percent to $550 million ($13.96 EPS) from $681 million ($17.07 EPS) in 2023.

HII introduced expectations for 2025, with shipbuilding sales between $8.9 billion and $9.1 billion versus $8.7 billion in 2024. The outlook at Mission Technologies is $2.9 billion to $3.1 billion versus just over $2.9 billion in 2024.

Operating margin at the Ingalls and Newport News Shipbuilding segments combined is expected to be between 5.5 percent and 6.5 percent in 2025. Margin at Mission Technologies is expected in the 4 percent to 4.5 percent range. Free cash flow in 2025 is projected at between $300 million and $500 million, versus $40 million in 2024.

Over the next two years, HII expects to garner $50 billion in contract awards, helping to provide long-term visibility of more than 4 percent growth annually and putting the company on track to $15 billion in sales in 2030, and margins expanding incrementally.

HII tallied $12.1 billion in orders in 2024 and backlog stood at $48.7 billion, up a percent from $48.1 billion at the end of 2023.

Applied Intuition Acquires EpiSci, Creating Multi-Domain Autonomy Solutions Company

Applied Intuition on Thursday said it has acquired EpiSys Science, Inc. (EpiSci) in a deal that complements its capabilities and expertise in applying artificial intelligence and autonomy software to ground vehicles with similar technologies in the air and maritime domains.

The new addition also demonstrates Applied Intuition’s commitment to the defense market. EpiSci was one of several companies with AI-based software used to autonomously pilot the X-62 test aircraft—an F-16 variant—last spring with then-Air Force Secretary Frank Kendall aboard (Defense Daily

, May 3, 2024).

EpiSci’s work in defense was not the reason for the acquisition but “a takeaway is we continue to invest in defense [and] defense is a big priority for us,” Qasar Younis, co-founder and CEO of Applied Intuition, said in an interview last month ahead of the deal announcement.

“We’re very committed to this as a vertical and as a market that we want to grow in,” he said.

Last summer, EpiSci received a contract from the Defense Advanced Research Projects Agency to develop tactical AI algorithms for team-based multi-ship autonomous air combat beyond visual range. The work under the AI Reinforcements program builds on earlier work EpiSci did with the agency for the AlphaDogfight trials and Air Combat Evolution programs.

Applied Intuition is developing its technology for dual-use applications. The California-based company is working with a wide-range of global customers in the automotive and trucking markets, including General Motors [GM], Japan’s Toyota, Germany’s Audi, and others.

Applied Intuition is also developing software for the Defense Department’s Defense Innovation Unit to support the Army’s Remote Combat Vehicle (RCV) and has worked with General Dynamics [GD] on the Army’s Optionally Manned Fighting Vehicle program.

Terms of the deal, which concluded in December, were not disclosed. Merlin, a competitor in the aircraft autonomy space, last year had agreed to acquire EpiSci but that deal fell through (Defense Daily, Sept. 12, 2024).

In addition to providing Applied Intuition capabilities in all-domain autonomy, the company expects the EpiSci acquisition to accelerate growth by quickly maturing their respective technologies.

“We did the acquisition also because we think the combined entities will together grow faster than they would as independent entities,” Younis told Defense Daily. “And the way that you do that is some of the strengths that Applied has will accelerate the work that the EpiSci team is doing, and some of the strengths the EpiSci team has will accelerate the mission that Applied has.”

Younis said the complementary synergies between the companies stem from the different maturity levels in their technologies. The technology stack across autonomous systems has a lot of similarities, he said, highlighting that Applied is mature in some areas and EpiSci in others, “and when you actually combine those systems, we basically have a very productionized solution which neither company would have on their own.”

Collaborative aircraft autonomy has been a big focus for the Air Force—the Navy is also planning to begin a technical demonstration late this year—for manned fighters to work with unmanned aircraft that would conduct autonomous operations with human supervision.

Peter Ludwig, co-founder and chief technology officer of Applied Intuition, said in the same interview that collaborative autonomy is still in the advanced research and development stage but is “within striking distance” of being ready for actual combat. Applied’s expertise, engineering tools, and experience productizing technologies will help further advance EpiSci’s technology to the next level, he said.

Applied Intuition was founded in 2017. Following the acquisition, the company now has just under 1,000 employees. Younis said the late-stage, venture-backed company is valued at $6 billion, has been growing at “double-digit rates,” and has been profitable for “a number of years.”

In the maritime environment, EpiSci has won Navy contracts to demonstrate its multi-agent collaborative autonomy algorithms with surface vessels to discreetly search, localize, and track a maritime target. It is also developing software to enable multi-domain swarms of unmanned aircraft systems and unmanned surface vessels to work together.

The company’s technology prowess goes beyond autonomous aircraft and vessel operations.

EpiSci last year also won a contract from the Office of the Secretary of Defense to develop technology that allows radar and 5G wireless systems to “dynamically co-exist under shared spectrum conditions.”

DIU-Singapore Make Small Awards For C-UAS, Secure Drone Communications

The Defense Innovation Unit (DIU) and Singapore’s Ministry of Defence on Wednesday they have made small prize challenge awards to two companies to optimize their counter-drone, and secure drone communications technologies for use by warfighters.

Mistral Inc., which is based in Maryland, received $80,000 to combine radio frequency sensors, kinetic and non-kinetic effects, into a single package for its counter-unmanned aircraft system (C-UAS) Victus C2 Gateway solution. DIU said that Mistral’s system integrates with existing defense systems to work with current operational tools.

“The challenge provided access to defense experts and optimizing our CUAS Victus C2 Gateway system’s open architecture for scalability and future mission adaptability,” Yoav Banai, Mistral’s senior vice president of business development, said in a statement.

Zoltix received $70,000 for its adaptive communication system that allows small commercial drones to maintain secure and stable communication in RF-contested environments by automatically sensing and adjusting frequencies. The company’s solution integrates with existing drones.

“The solution we provided has the potential to enhance the warfighter’s security and resilience in contested environments as the use of UAS continues to increase,” Matt Ryan, co-founder and CEO of Zoltix, said in a statement. “Without a communication solution that can dynamically adapt, learn and inform, the warfighter will be at risk of losing critical UAS assets and communications during contested engagements.”

The DIU and Singapore also awarded a combined $130,000 to four other U.S. companies as part of the joint challenges. New York-based Black River Systems Company adapted its low-cost Ninja C-UAS solution for port and shipboard protection. Aurelia Systems, based in San Franciso, developed edge-deployed directed energy solutions to protect troops from Group 1 and 2 UAS during operations; Virginia-based Domo Tactical Communications used its technology to help warfighters operate small drones in contested environments with low latency, demonstrating effectiveness in “noisy RF environments.” And North Carolina-based TILT Autonomy used its frequency hopping spread spectrum technology for a low-cost UAS communication platform.

Nearly 50 companies worldwide proposed solutions for the challenge and 10 were selected to make final pitches to compete for prize awards.

Army Breaks Ground On Ammo Facility To Support New Squad Weapons

The Army on Wednesday broke ground on a facility that will be dedicated to producing a new family of small caliber ammunition for its next-generation rifles, adding capacity and another competency to the Lake City Army Ammunition Plant (LCAAP).

The 6.8mm ammunition will be fired from the Next Generation Squad Weapons, the XM7 Rifle and the XM250 Automatic Rifle, that are replacing the legacy M4 Rifle and M249 Squad Automatic Weapon used by close combat forces.

The 450,000 square foot facility, which is being built on ground that previously supported Building 4, will eventually produce up to 385 million cases, 490 million projectiles, and 385 load-assemble-pack operations for the 6.88mm ammunition. Building 4, where .30 caliber ammunition was made, was demolished and the land cleared in the first half of 2023 (Defense Daily, May 19, 2023).

The ground-breaking follows an 18-month design process led by Army’s Joint Program Executive for Armaments and Ammunition. In 2023, the Army said it hoped to break ground in 2024, complete the facility in 2026, and fully commission it in 2028.

The facility will be operated by Olin Corp.’s [OLN] Winchester segment, which also manages production of other ammunition at the plant located in Independence, Mo., near Kansas City. LCAAP’s other core ammunition competencies include 5.56, 7.62, and .50 caliber munitions.

The Army said the 6.8 caliber ammunition is engineered to maximize the performance of the NGSW rifles, delivering “increased range, improved accuracy, and enhanced lethality, ensuring soldiers maintain overmatch on the battlefield.”

The new facility will also house energetic operations for loading and charging ammunition, product packaging, process quality controls, testing laboratories, maintenance operations, and administration.

The Army in March 2024 said it equipped its first unit with the Sig Sauer-produced NGSW Rifle and Automatic Rifle, including the 6.8 caliber ammunition (Defense Daily, March 28, 2024). Winchester is already in low-scale production of the new ammunition using existing LCAAP facilities.

Winchester is under contract to produce up to 1.6 billion rounds of ammunition annually. The plant supplies small caliber ammo for all the military services, and additional customers include foreign militaries and federal law enforcement agencies.

DOGE May Recommend Contract Terminations, Contract Experts Say

President Trump’s administration took a page from an unlikely book–that of former President Obama, in creating the inaptly named Department of Government Efficiency (DOGE).

To get around the public meeting/comment and reporting requirements under the Federal Advisory Committee Act (FACA) of 1972, the DOGE is not an advisory committee under FACA but instead a temporary organization under the new U.S. DOGE Service (USDS). The latter is a renaming of Obama’s U.S. Digital Service–also USDS, created in 2014 to hire temporary civil servants to issue counsel on federal agencies, initially advice on modernizing federal information technology to prevent a recurrence of the problems with Obama’s Affordable Care Act website.

The temporary DOGE, headed by tech billionaire and SpaceX CEO Elon Musk, is to expire on July 4 next year after providing recommendations on federal spending to the White House.

“They’re going to be making recommendations, and you’re gonna have the leadership of all of these agencies thinking like DOGE people,” Robert Burton, a partner at Crowell and Moring and a former deputy administrator at the Office of Federal Procurement Policy under former President George W. Bush, told a Wednesday virtual forum by George Mason University’s Greg and Camille Baroni Center for Government Contracting.

While Musk recently criticized the Lockheed Martin [LMT] F-35 and said that manned fighters are obsolete because of drone autonomy advances, Burton did not mention the program and suggested that program cancellations would focus on non-DoD departments and agencies.

“I think you’re going to see some terminations for convenience,” Burton said. “This is one way the government is different than the private sector. They have the power of termination for convenience, and they don’t really need to give much of a reason as to why they’re doing it. It’s an incredible power. I think they will de-scope or reduce the scope of contracts and terminate some contracts that they don’t feel have been productive or have not gone well.”

“Of course, they’re going to be terminating any contracts related to DEI (diversity, equity, and inclusion) or some of the entitlement programs,” Burton said. “You can guess the agencies that may see termination of contracts–[Department of] Education, IRS [Internal Revenue Service], the Labor Department.”

Burton said that there may be a 20 percent or more reduction in Federal Acquisition Regulations.

The DOGE recommendations may dovetail with provisions in S. 5618, the proposed Fostering Reform and Government Efficiency in Defense Act (FORGED Act), which Senate Armed Services Committee (SASC) Chairman Roger Wicker (R-Miss.) introduced in December (Defense Daily, Jan. 9).

“I think the heavy movers, the things we really want to change, some of it is going to have to come in statute,” Matt MacGregor, senior director of strategic growth at Anduril Industries, told the forum on Wednesday. “I think the FORGED Act is an incredible start to that.”

The FORGED Act contains provisions that may favor defense start-ups and non-traditional defense contractors, such as Anduril, Palantir Technologies [PLTR], and SpaceX, over traditional defense original equipment manufacturers, like Lockheed Martin, Boeing [BA], RTX [RTX], and Northrop Grumman [NOC].

For example, Section 303 of the Wicker bill has exemptions from the Defense Federal Acquisition Regulation Supplement (DFARS) for non-traditional defense contractors.

MacGregor said on Wednesday that Wicker’s bill would begin reducing unnecessary and/or “burdensome” parts in the 1,200 pages of Title 10.

“More broadly, I would say where we talk about DOGE as a cost savings and efficiency-focused organization…there’s a lot of savings maybe to be had, but in the defense space particularly where we’re more focused here, there’s not necessarily savings,” MacGregor said. “There’s a lot of military priorities, a lot of stuff that we can’t get after. We’ve seen the Air Force and Space Force having to make some very hard trade-offs so it wouldn’t be so much, in my view, hopefully, pulling money from them, but being able to maximize the value of those dollars so that we can get after where space is going, where our competitors are going, the increased threats in INDOPACOM.”

“Where I am hopeful is that we can bring a tech mindset to government and remove excess layers,” he said. “One of the things I think Elon has done very well in his commercial companies is trying to make sure everybody is adding value to the bottom line. If there’s a lot of people in these layers that are just being kind of what the GE approach used to be–checkers checking checkers–doing some streamlining of that…so that the smart people we’ve trained for 20 years and spent millions of dollars training, like program executive officers, that they can actually make the change and do things that they know are smart to get capability fielded faster.”

Defense companies are providing input to DOGE. Last month, L3Harris Technologies [LHX] CEO Chris Kubasik, the new chairman of the Aerospace Industries Association, advised DOGE to eliminate cost and accounting standards (CAS) (Defense Daily, Jan. 16).

In addition, Kubasik advised DOGE to recommend the creation of a central contracting arm within the Office of the Secretary of Defense to remove some of the decision-making from the military services to be more responsive to the president’s priorities and coordinate multi-service efforts like the Joint All Domain Command and Control architecture; limit bid protests by a company to three per year to reduce development and fielding timelines; and either limit required certified cost and pricing data submissions to only the largest DoD sole-source programs or raise the contract value ceiling of such certified cost and pricing data submissions under the Truth in Negotiations Act (TINA) from $2 million to $500 million.

Kubasik’s letter to DOGE last month said that the lower TINA threshold adds one to two years to the acquisition process for an inordinate number of DoD programs because of the time it takes for the submission, audit, review, and negotiation of the cost estimates of a program’s entire supply chain.

“The government, by its own admission, when they’re trying to attract these non-traditional and commercial companies into the ecosystem, those are done without CAS requirements,” Kim Herrington, vice president of government finance at L3Harris, said during the Wednesday forum. “The government has already recognized that these are things that slow things down. These are barriers, and so we gave for consideration to DOGE to go eliminate those things or greatly increase the thresholds. Don’t just do it in a small way. Do it in a big way, and that will free up hundreds/thousands, if you will, companies in getting out from underneath very burdensome regulations.”

“Essentially, put the entire industrial base on the same footing and free up the innovative capabilities and power of the industrial base to move at the speed of the marketplace,” he said.

Army Eyes Full-Rate Production Decision For Extended Range GMLRS In Early FY ‘27, DOT&E Says

The Army is anticipating a full-rate production (FRP) decision for the extended range version of the Guided Multiple Launch Rocket System, or ER-GMLRS, in early fiscal year 2027, according to a new Pentagon report.

Further testing with the ER-GMLRS is expected as the Army works through “reliability failures” with the new side-mounted proximity sensor (SMPS) and in the lead-up to a planned Milestone C decision in FY ‘26, the Office of the Director of Operational Test and Evaluation (DOT&E) notes in its annual report on the program.

Extended Range-GMLRS. Photo: Lockheed Martin.

“Following integration and testing of the new ER-GMLRS SMPS, DOT&E will publish an ER GMLRS [initial operational test and evaluation] report that encompasses all production representative testing of ER GMLRS to inform the FRP decision in 1QFY27,” states the report, which is one of a slate of annual reviews the DoD’s weapons tester office released late last month.

The ER-GMLRS, which has been in development for several years, is designed to increase the maximum range from 70 kilometers out to 150 kilometers and “enhance maneuverability, adjust the attack trajectory to vertical at select ranges, and incorporate an SMPS to enable an optimal [height of burst] for both the ER GMLRS Unitary and [alternative warhead rocket variants,” the DOT&E report notes.

The DOT&E report notes the Army’s upcoming test plan with ER-GMLRS includes three system qualification tests with the alternative warhead variant in the second quarter of FY ‘26 and an intent to complete operational testing with two multiple rocket missions utilizing the alternative warhead and unitary variants in late FY ‘26 that will include the redesigned SMPS.

The Army last fall awarded Lockheed Martin [LMT] a multi-year GMLRS contract initially worth up to $4.1 billion, with the deal covering the first production order for the new ER-GMLRS (Defense Daily, Oct. 16, 2024).

An Army spokesperson confirmed to Defense Daily at the time that the award involved converting an existing contract into the new undefinitized, multi-year deal.

Paula Hartley, Lockheed Martin’s vice president of tactical missiles, told reporters in October the new multi-year deal covers fiscal years 2025 to 2027, and includes a first production lot quantity for 240 ER-GMLRS with deliveries to begin in 2027.

Hartley added that Lockheed Martin is aiming to ramp up that production line to eventually handle a capacity “in the low thousands…think two to four thousand.”

Oshkosh Defense Receives $215 Million In FMTV Deals From The Army

The Army has awarded Oshkosh Defense [OSK] several deals totaling $215 million for delivery of more Family of Medium Tactical Vehicle (FMTV) trucks.

The largest of the four contracts announced on Tuesday evening is a $133 million firm fixed price contract for M1093 and M1081 Low-Velocity Airdrop Vehicles, with work on that deal expected to be completed by the end of September 2027.

Yi Hak-tae, 403rd Army Field Support Brigade Acquisition, logistics and technology supply technician, guides a family of medium tactical vehicle onto a railhead June 22 as part of 25th Transportation Battalion and 403rd Army Field Support Brigade railhead operations. Photo by Pfc. Sung Eun Kim, 19th Expeditionary Sustainment Command

Just over a year ago, the Army detailed plans to extend its FMTV contract with Oshkosh Defense for an additional three years, estimating it may order an additional 1,343 vehicles over that period (Defense Daily, Feb. 2 2024).

The contract extension covers vehicle, trailer and kit production and logistics, fielding and maintenance and system technical support and potential procurement and installation of Arctic kits, underbody armor kits and B-kits for supplemental cab armor.

The Army’s remaining three awards announced on Wednesday do not specify which FMTV platforms or support services are covered.

The FMTV deals include a $43.7 million firm-fixed price contract covering work through the end of 2026, a $23.3 million contract modification that includes Army Reserve and National Guard funds and a $14.9 million award that will run through the end of August 2026.

The Army in August 2024 awarded Oshkosh Defense a $1.54 billion contract to continue supplying its Family of Heavy Tactical Vehicle (FHTV) fleet, which includes Heavy Expanded Mobility Tactical Trucks (HEMTT), Palletized Load System (PLS) trucks and trailers and Heavy Equipment Transporters (Defense Daily, Aug. 20 2024).

Oshkosh Defense is also competing with Mack Defense, Navistar Defense and a team of American Rheinmetall Vehicles and GM Defense [GM] in the Common Tactical Truck prototyping program, which aims to find a future replacement for the FHTV fleet.

Marines Plan To Shift Some Future F-35Bs To More F-35Cs

The Marine Corps plans to shift some of its planned future F-35B short takeoff and vertical landing (STOVL) aircraft into the F-35C carrier variant, according to the service’s latest Aviation Plan.

The Marine Corps’ 2025 Aviation Plan

noted that while it is not changing the total number of F-35s in its planned procurement (420 aircraft), it is changing several squadrons.

A Marine Corps F-35B lands on the amphibious assault ship USS *Wasp* (LHD-1) (Photo: U.S. Navy).

“Per the TACAIR Transition plan, Marine Fighter Attack Squadron 232 (VMFA) and VMFA-323, VMFA-112, and VMFA-134 will now transition as F-35C squadrons,” the plan said.

This means the program of record will now stand at a planned 280 F-35Bs in 12 squadrons and 140 F-35Cs in eight squadrons.

The service also confirmed it expects 183 F-35Bs and 52 F-35Cs will have been delivered by the end of this year, including Developmental/Operational Test aircraft, an F-35B Fleet Replacement Squadron on each coast, an F-35C FRS detachment and 11 fleet squadrons.

This shift is in addition to the Navy’s current plan to buy a field a total of 273 F-35Cs.

Two F-35C Lightning II aircraft from Naval Air Station Lemoore fly in formation over the Sierra Nevada Mountain Range after completing a training mission (U.S. Navy Photo)

The F-35 moves are likely connected to factors discussed in the Director of Operational Test and Evaluation (DOT&E) annual FY 2024 report, released in January, which compares metrics among the Air Force’s F-35A, Marine Corps F-35B, and Navy and Marine Corps F-35C variants.

The F-35 portion of the report shows in the last decade the F-35C variant has improving rates of material availability compared to the others declining, maintaining mission capable status while the others also decline, and improving fully mission capable rates compared to a declining rate for the F-35A and merely flat rate for the F-35B.

The aviation plan was signed out by Lt. Gen. Bradford Gering, Deputy Commandant for Aviation.

Marine Corps Aviation Plan Calls For New Support Ships

The Marine Corps’ latest Aviation Plan, released this week, pushes for new Aviation Logistics Support Capability vessels.

The plan noted the current aviation logistics vessels, SS Wright (T-AVB 3) and SS

Curtis (T-AVB 4), are both past their expected service lives and expected to be retired in 2030 and 2033, respectively.

The aviation logistic ship S.S. Wright (T-AVB-3) ports during Exercise Trident Juncture 18 at Orkanger Port, Norway, Oct. 27, 2018. (Photo: U.S. Marine Corps by Gunnery Sgt. Christopher Giannetti)

The Marine Corps said without a replacement they will experience a “critical shortfall.”

“We require a standing capability to conduct afloat aviation sustainment activities to support [Expeditionary Advanced Base Operations] and [Distributed Aviation Operations],” the plan said.

The two 600-foot-long Curtis-class ships are Maritime Administration (MARAD) ships permanently assigned to Military Sealift Command’s prepositioning program to aid Marine Corps aviation maintenance. They carry aviation maintenance support equipment for fixed and rotary wing Marine Corps aircraft. The ships were converted to their current use in 1986 and 1987, respectively.

The Marine Corps envisions replacing these aging vessels with a “reimagined afloat aviation logistics” that provides for the possibility to conduct repair of battle-damaged aircraft and some components. It said Marine Aviation will pursue this material solution, called T-AVB(Next), that will offer the Stand-in Force seven major capabilities.

These include sea-based mobility and cargo handling; Intermediate Maintenance Activities (IMA) to reduce deployment and sustainment timelines; flexibility to support aviation and ground maintenance operations; scalable and modular capacity to accommodate up to 400 deployable maintenance facilities; ability to self-load at multiple access points; day and night flight deck operations and aircraft refueling capability; and Vertical and Connected Replenishment (VERTREP CONREP) from Combat Logistic Fleet (CLF) vessels.

The plan argued the new ships with these capabilities will allow the T-AVB(Next) to extend aviation endurance, enabling “the rapid deployment of robust intermediate aviation sustainment functions.”

Amentum Reports Stronger First Quarter Earnings; Not Worried About Musk Cuts

Earnings rose at Amentum [AMTM] in the first quarter of fiscal 2025, which the company that recently combined with the government contracting wing of Jacobs attributed to strong core businesses linked with national security.

In response to questions from Wall Street analysts during a Wednesday morning conference call, CEO John Heller said Amentum management was not worried about being hurt by potential federal cuts initiated by the new administration’s Department of Government Efficiency, led by billionaire Elon Musk.

While perhaps 1% of Amentum’s revenue comes from contracts tied to U.S. foreign aid, most of its income is centered around programs dealing with national security, cyber, intelligence and NASA, Heller said.

Net earnings for the first quarter ended Dec. 27 were $12 million, or $$0.05 a share, up from a loss of $41 million, or negative $0.46 a share, in the year-ago quarter, according to Amentum’s Tuesday press release. Quarterly revenue was $3.4 billion, up year-over-year from $1.98 billion.

Amentum is a junior partner in a BWX Technologies [BWXT]-led team that won a new $3-billion, 10-year Department of Energy environmental remediation contract at the West Valley Demonstration Project in New York state during November. Amentum will provide advanced technology including robotics as part of the award, Heller said.

Also during the quarter, the Department of Defense awarded Amentum a seven-year, $447 million contract for Air Forces Central Command Global Prepositioned Materiel Services, according to the company’s slide presentation.

In December, Virginia-based Amentum completed its merger with the government contracting arm of Dallas-based Jacobs [J], which remains a major stakeholder in the combined company.

“We are off to a strong start as a newly combined company,” said Amentum Heller said during a Wednesday conference call with Wall Street analysts. “Our first quarter results were robust and in line with our expectations across all key financial metrics, including organic growth and free cash flow.”