Wednesday, September 19, 2007
Sep. 19, 2007 (McClatchy-Tribune Regional News delivered by Newstex) --
EDO Corp., which earlier this week agreed to be acquired by ITT Corp. (NYSE:ITT) of White Plains for $1.7 billion, said Wednesday that the Pentagon has decided to award it an additional $172 million contract for devices that impede the use by of roadside bombs, a leading cause of combat death in Iraq.
The company said it would be prepared to open production lines at 'multiple EDO facilities' to manufacture the devices, if more Pentagon orders come through.
EDO has facilities in North Amityville and Bohemia, where about 600 of its 4,000 worldwide employees work.
Shares of EDO have more that doubled this year, primarily because the company has the market on manufacturing the devices. EDO rose 46 cents Tuesday, to close at a 52-week high of $55.30. In morning trading, shares of EDO rose 14 cents, to $55.44.
Some analysts hold open the possibility of another bid for EDO by another company. Manhattan-based EDO, one of the largest defense-electronics contractors in the metropolitan area, said before markets opened for trading that it had received the Pentagon order for an additional 2,250 of what's known as CREW 2.1 vehicle-mounted electronic jamming systems.
The latest order is in addition to the 5,200 CREW 2.1 units the Pentagon has ordered from EDO, the company said.
EDO, which started in 1925 in College Point, has at the moment cornered the market for systems to impede IEDs, which have been used against U.S. and coalition forces in Iraq and Afghanistan. The IEDs, also known as roadside bombs, are the leading cause of combat deaths in Iraq, according to the Pentagon.
In making the latest award to EDO, the Pentagon has exercised options that were included in a contract the company won competitively on April 6. EDO said in its announcement that the contract includes options for up to 10,000 additional anti-IED systems.
EDO said that on Sept. 7, the Pentagon announced its intentions to award an additional contract with options for up to 15,000 such units. In what appears to be a new move, EDO chief executive James Smith said the company is 'prepared to open production lines in multiple EDO facilities, should the government increase the ceiling on this contract.'
EDO designs and builds the CREW 2.1 devices at a company facility in California. The company's work on the Island includes electronic warfare equipment and antennas for aircraft. Smith's statement leaves open the possibility CREW 2.1 devices could be made on Long Island.
Smith earlier this week said he will be leaving EDO when ITT takes over the company, probably early next year. Smith, 66, was chief executive of AIL Systems Inc., a Deer Park-based defense electronics company that was acquired by EDO in 2000. He is credited with putting that deal together.
On Monday, ITT, one of the nation's largest defense-electronics companies, said it would pay $56 a share for EDO, an 8.7 percent premium over the closing price last Friday. ITT officials said EDO would make a strong fit with ITT's defense business, its largest unit.
While EDO has the market for the anti-IED devices, larger competitors, including General Dynamics Corp. (NYSE:GD) of Virginia, are expected to make a greater push for such work in the future. EDO, however, has a variety of other defense-related contracts, including work on the Pentagon's F-35 Joint Strike Fighter.
Newstex ID: KRTB-0134-19693115
Delivered by Newstex LLC
via theFinancials.com
e-mail:
Homepage:
