|Shares Out. (in M):||85||P/E||10.6x||9.4x|
|Market Cap (in $M):||615||P/FCF||0.0x||0.0x|
|Net Debt (in $M):||548||EBIT||0||0|
ARX was founded in 1937 and has a long history of research and development focused on specialized technologies, often in collaboration with their customers. The proprietary technology was developed throughout the years from the “know-how” of their ~700 engineers and experienced management team.
After 46 years as a public company, ARX was acquired on August 15, 2007 in a going-private transaction and returned as a public company via IPO in November 2010 at $13.50 per share. As a result of the going-private transaction, Leonard Borow was promoted to CEO upon consummation of the transaction and instilled a results oriented culture where business managers are encouraged to make strategic decisions to drive growth and margin enhancement.
ARX is a leading provider of RF, microwave integrated circuits, components and systems used in the design, development and maintenance of technically demanding, high performance wireless communication systems. ARX’s solutions included highly specialized microelectronic components and test and measurement equipment used by companies in the (i) space, avionics and defense (ii) commercial wireless communications; and (iii) medical and other markets. These customers are targeted because ARX’s solutions address their technically demanding requirements.
ARX is worth more on a sum of the parts basis than it is as a combined entity.
ARX operates in two segments: Aeroflex Microelectronic Solutions (AMS) 55.8% of FY13 sales & Aeroflex Test Solutions (ATS) which was 44.2% of sales. In Q413, ARX reclassified their frequency synthesizer business from ATS to AMS, which will leverage the synthesizer group’s engineering, sales and marketing functions with AMS’s RFMW group. The synthesizer business is close to $20MM in sales a year.
Aeroflex Microelectronic Solutions(AMS): manufactures a range of RF, microwave and millimeter wave microelectronic components with a focus on HiRel and radiation hardened or RadHard, ICs and analog and mixed-signal devices. FY13 AMS generated $360.8MM in sales and $179.4MM in gross profit.
AMS offers a broad range of microelectronics products and is a leading provider of high performance, high reliability specialty products for the space, defense, commercial wireless communications, medical and other markets.
AMS offers a broad range of complementary products that provide connectivity and computing functionality for applications that are characterized by their high-performance, high reliability requirements.
AMS Products Offered
AMS: provides customers with high precision, high reliability, application specific standard products and ASICs including databuses, transceivers, microcontrollers, microprocessors and memory products. In addition AMS also sells sub-assemblies and multichip modules, or MCMs, as well as a diverse portfolio of commercial mixed signal ICs and RF, microwave and millimeter wave devices. “AMS’s broad product portfolio has a longstanding, field-tested, history of reliable performance often characterized by long product life cycles and mission-critical functionality.”
HiRel Microelectronics/Semiconductors: AMS provides HiRel standard and custom ICs and circuit card assembly for the aerospace, high reliability altitude avionics, medical, x-ray, GPS receivers, networking and telecommunication markets. AMS’ HiRel products include transceivers, analog multiplexers, clock management
Aeroflex Test Solutions (ATS): is a leading provider of a broad line of specialized test and measurement hardware and software products, primarily for the space, avionics, defense, commercial wireless and other markets. As technology continues to evolve and “next-gen” communication protocols are introduced equipment manufacturers and network providers need both test and measurement products that are compatible with new technology and products that work with older generation equipment.
ATS’s strength in testing and measurement stems from their expertise with RF and microwave signals and innovative product design and development to meet the changing needs of the end markets. ATS has hardware and software expertise across a number of wireless markets: cell infrastructure, cell device, mobile radio and satellite markets.
Examples of ATS products and applications include:
The volume of mobile traffic from multiple data streams is rising rapidly and has resulted in significant technological innovation to address the increasing need for higher rates of data transmission and more efficient use of existing spectrum. This has led to the development of a number of advanced data transmission systems and technologies that use RF, microwave and millimeter wave frequencies that are used in a broad range of end markets including, space, avionics, defense, commercial wireless communications, medical and other markets. The growing number of applications include data transmission, video transmission, control of UAVs, growing number of satellites are driving increased demand for RF, microwave and millimeter wave technologies. Also, the “next-gen” wireless communication network to accommodate the rapidly growing volume of data being transmitted to smart phones and tablets requires new test and measurement equipment for R&D, conformance testing, production testing, installation and commissioning, monitoring and optimization, and service and maintenance.
ARX’s Business Model
Board of Directors/Insiders
I mention the makeup and ownership dynamics of the Board to emphasize insiders are motivated and concerned shareholders. And this is an opportunity to invest along with great stewards of capital.
Balance Sheet & Highlights