CPI Buoyed by Radant Technologies Division Sales

A CPI radome under static loads testing. Photo: CPI

[Via Satellite 12-18-2014] Communications & Power Industries (CPI) brought in $475 million in sales during fiscal year 2014, a 13 percent increase from the year prior. Fiscal year 2014 was one of CPI’s strongest, with orders in defense and communications — the company’s two largest markets — topping all previous years save for fiscal 2013 where the receipt of unusually large orders for certain defense and communications programs yielded record order levels. Joe Caldarelli, CEO of CPI, attributed a significant part of the year’s success to the acquisition of Radant Technologies.

“The acquisition of the radome technology business in 2013 played a notable role in our financial success in fiscal 2014,” Caldarelli said during CPI’s FY2014 earnings call. “Radant contributed more than $40 million dollars in defense and communications sales during the year. This business has been successfully integrated into CPI, and the acquisition has been very positive for us.”

Radant Technologies produces advanced composite radomes (weatherproof casings for antennas that do not interfere with electromagnetic signals) as well as reflector antennas and other structures that have applications in satellite and other industries. Earlier this year CPI’s Radant Technologies division developed a quadband satellite communications radome that ViaSat used for a flight demonstration of an integrated Ku- and Ka-band airborne satellite terminal. CPI used cash on hand to acquire the privately held company in October 2013.

CPI’s business is split almost 50-50 between defense and commercial communications. Caldarelli said the radome business boosted the company’s military communications sales this year, as did a significant multi-year program at the company’s Malibu division. CPI saw a 21 percent increase in sales within the communications market, reaching $181 million mainly due to higher sales to support military communications applications, including sales of radomes and reflectors from CPI’s Radant Technologies Division and sales of advanced Tactical Common Data Link (TCDL) antennas from CPI’s Malibu Division.

In fiscal 2013, CPI received a major order worth more than $25 million for TCDL antennas, which did not recur in 2014. CPI did not anticipate repeating the contract, which was the largest single order in the company’s history. Bookings for Ka-band communications products also did not reach the same level as 2013, but Caldarelli said such orders tend to be cyclical, not annual. CPI won several multi-million dollar orders for Ka-band communications products in 2013. Caldarelli linked the nonrecurring orders in fiscal 2014 to customers needing more time to establish Ka-band infrastructures with the products already shipped. He expressed confidence in continuing demand for satellite services.

“The number and size of very large military satcom programs such as the [Warfighter Information Network-Tactical] WIN-T program has tapered in recent years, but there remains a steady stream of smaller opportunities for our milcom products. On the commercial side there is an ever-growing demand worldwide for satcom applications for Direct-to-Home (DTH) broadcasting, broadband data communication, and in-flight entertainment systems,” he said.

Regarding possible Merger and Acquisition (M&A) activity, Caldarelli said CPI would continue to look for adjacent lines of business that might replicate the success of the Radant Technologies purchase. He said there are no pressing M&A ambitions at the moment, but that CPI has the capability to buy a company or product line that is deemed of good value and beneficial to pursue ownership. In the absence of such opportunities, CPI will continue to focus on paying down its debt, he said.