“We entered fiscal 2027 from a position of strength, and our first quarter results reflect that momentum.” (President, CEO & Director Saleel Awsare) “Revenue grew over 8% year-over-year to $32.4 million.” “Embedded IoT Solutions revenue grew 37% year-over-year in the first
Seeking Alpha’s Disclaimer:This article was automatically generated by an AI tool based on content available on the Seeking Alpha website, and has not been curated or reviewed by humans. Due to inherent limitations in using AI-based tools, the accuracy, completeness, or timeliness of such articles cannot be guaranteed. This article is intended for informational purposes only. Seeking Alpha does not take account of your objectives or your financial situation and does not offer any personalized investment advice. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank.
Elbit Systems (ESLT) has secured contracts worth approximately $200M from an Asia-Pacific country to supply airborne intelligence, surveillance, reconnaissance, targeting, and training solutions.
The contracts will be executed over a period of up to five years.
An elderly man was forcibly restrained by police during a protest against Israeli weapons manufacturer Elbit Systems in Ulm, Germany. The man was seen bleeding after officers forced him to the ground.
Army Lt. Gen. Frank Lozano, the service’s Portfolio Acquisition Executive for Fires, highlighted this growing trend yesterday during a panel discussion at the Association of the U.S. Army’s (AUSA) main annual convention, at which TWZ has been in attendance.
Secretary Hegseth, second from the left, seen in front of a launcher for the Patriot surface-to-air missile system during a tour of Redstone Arsenal in Alabama earlier this year. Army Lt. Gen. Frank Lozano is seen at far right. DoW/USN Petty Officer 1st Class Alexander Kubitza
To provide some immediate context, with the exception of Patriot, the main ground-based air defense systems in Army inventory today are fielded with just one type of interceptor. In the case of Patriot, the service’s procurement of new interceptors had also been increasingly limited to just one type, the PAC-3 Missile Segment Enhancement (MSE). Production of the preceding PAC-3 Cost Reduction Initiative (CRI) missile ended in 2023. Just earlier this year, the Army placed its first order in decades for new PAC-2 Guidance Enhanced Missile-Tactical (GEM-T) missiles, an older interceptor design for Patriot that has remained in production primarily for U.S. allies and partners.
A graphic showing different interceptor load options for existing trailer-based Patriot launchers. Lockheed Martin
Separately, the Army is in the process of fielding Enduring Shield, a new middle-tier air defense system designed to handle multiple interceptor types. However, the service is currently only acquiring AIM-9X Sidewinders to load into them. We will come back to this later on.
An Enduring Shield launcher. USAF Pfc. Sang Woo Choi
“We have the capabilities we need to have to fight and win, but it’s our job to ensure that victory is achievable in the future inside of any dynamic environment scenario fight we might find ourselves in,” Lt. Gen. Lozano said yesterday. “So, it’s incumbent upon Mr. Ingraham [Assistant Secretary of the Army for Acquisition, Logistics and Technology Brent Ingraham] and I to continue to be creative and looking at, well, should we buy GEM-Ts because they’re being produced?”
“GEM-Ts are a really good missile in the battlespace within they operate. I mean, they’re being employed today by air defense brigades around the world,” he continued. “So if we have the opportunity, it’s probably something we should take advantage of, and we’re looking at doing that.
“We’ve had a lot of discussions about even more interceptors. From a PAC-3 MSE perspective, our goal has always been to get to 2,000 [per year],” he added. “Why we’re running programs like LCI [Low Cost Interceptor], and NGSRI [Next-Generation Short-Range Interceptor], and NGCM [Next-Generation C-UAS Missile], and Second Interceptor, is because I think the easy button answer is just buy more of a great missile. We’re going to buy more [PAC-3 MSEs], but when we start talking about overall missile output, we start looking at numbers like is it 4,000, is it 6,000, is it 8,000, we’re looking at a diverse set of capabilities.”
The LCI program is seeking a lower-cost and lower-tier interceptor for Patriot with a unit price of no more than $1 million. PAC-3 MSE’s average unit cost has been around $4 million in recent years.
A PAC-3 MSE interceptor seen being launched. US military A Patriot launcher fires a newer PAC-3-series missile during a test. DoD
NGSRI is the Army’s program to find a replacement for the venerable Stinger. The new missiles have to be compatible with existing vehicle-based and man-portable launchers.
A US Army soldier fires a Stinger from a man-portable launcher during training. US Army
The Army is working to field a new counter-drone interceptor through NGCM. Those missiles will be integrated into launchers the service has now for the Coyote interceptor.
Raytheon Missiles & Defense proves counter-UAS effectiveness against enemy drones
The Second Interceptor effort is for Enduring Shield, which is also known as the Indirect Fire Protection Capability Increment 2 (IFPC Inc 2). The main goal there is to provide increased capability against incoming cruise missiles compared to the AIM-9X.
There is also the Army’s Future Interceptor effort, which also came up separately at the panel yesterday, and is also for Patriot. Unlike LCI, the aim here is to acquire a new interceptor with improved capabilities against hypersonic missiles and other upper-tier threats.
Historically, Army programs like these would eventually result in the selection of a single winning missile design. Lozano’s remarks yesterday point to the service increasingly taking a very different approach.
On “second interceptor, obviously, we just moved into phase two of that program. We’ve got Lockheed Martin competing with Boeing, who was teamed with Anduril,” Lozano said. “But we wanted to turn up the heat on that program. I constantly get frustrated when a funding profile emerges over the FYDP [the Future Years Defense Program], and then magically we lay in a five-year program.”
At left, a model of the Boeing/Anduril offering for the Second Interceptor effort. At right, a rendering of Lockheed Martin’s proposed Second Interceptor. Jamie Hunter/Lockheed Martin
“I’m like, no, I actually need that capability now,” he continued. “So, have we thought maybe what if we ran a 24-month program or a 36-month program, right? And so, in that vein, what we have decided to do is, while those two companies continue to compete, we’re going to create a shoot-off opportunity in [the] fourth quarter [of Fiscal Year 20]27, and I want to run an in-parallel, what I call an in-stride competition.”
“We just held an industry day, and we basically just said, hey, if there’s any other company who didn’t make the first cut in the phase one, but, oh, by the way, who continued to invest in the IFPC Second Interceptor capability, we’d love for you to come out to the range,” he added. “We’ll give you range time, we’ll present targets, and we’ll allow you to recompete with an opportunity to get back into the program folder.”
The Army is doing the exact same thing with NGSRI, where Lockheed Martin and Raytheon have been competing face-to-face. That program is also now planning to hold a new shoot-off that will be open to other vendors in the fourth quarter of Fiscal Year 2027.
A picture showing a test of Lockheed Martin’s NGSRI entrant, called QuadStar. Lockheed MartinRaytheon, which is also the prime contractor for Stinger, has previously released this image in relation to work on its NGSRI design. Raytheon
To reiterate, on top of all this, the Army is also now pursuing at least two new interceptor options for Patriot.
“We have to address the threat, and we need to address the threat in a complementary way, meaning we need to fight on a cost curve that’s affordable for the U.S. Army to maintain and sustain that warfighting capability abroad,” Lozano stressed yesterday.
This gets to the crux of the matter. It is not at all a new observation that just having a stockpile of any particular munition on day one of a conflict is not enough, especially if the fight becomes drawn out. There needs to be sufficient depth to those stocks at the start and the ability to readily replenish them in line with expenditures. The war with Iran, compounded by other crises in the Middle East and the ongoing conflict in Ukraine, has made clear that these core truths apply to all armed forces, even the U.S. military.
Lower-cost munitions are part of the solution, but they also need to be producible at scale on reasonable timelines. The lead time for higher-end munitions today is often measured in months, if not years. Furthermore, being locked into a single vendor has been shown to not just be undesirable, but a potential national security risk in an actual conflict. Lozano’s remarks yesterday, and how the Army is now pursuing new anti-air interceptors, reflect larger trends, not just in the acquisition of larger volumes of munitions overall, but also from a broader array of total suppliers.
The @DeptofWar has reached new framework agreements with a slate of disruptive new entrants to aggressively expand the United States military’s lethal cruise missile and hypersonic missile strike capabilities.
With regard to the LCI program, specifically, Lozano highlighted an additional aspect of all of this yesterday.
LCI has “a unique twist to it because we’re looking for companies who have all-up rounds, but I’m also asking for companies to come in at the component level,” he explained. “We typically don’t do that, right? There’s a lot of risk in managing components and generating all-up round systems. But we’re also looking for weapon system integrators, because I want to be able to create two or three teams who can compete with the all-up round guys to see if we can generate some momentum behind the fact that we need to thicken our inventory with low-cost, affordable munitions.”
The U.S. Navy is now pursuing a roughly similar approach with its Naval Modular Missile (NMM) program. NMM envisions an entirely new family of sea-launched surface-to-air missiles that offer very different capabilities, but that all feature certain common components, as you can read more about here.
A graphic laying out the Navy’s vision for the different members of the NMM family, and shared components between them. USN
It is also important to note here that the underlying aim is not to eliminate more exquisite munitions, or the capabilities that they offer, but to create a more affordable, complementary mix of options.
“What I would say is we’re solely focused on delivering on the programs we are executing now,” Lozano said in closing at the end of the panel yesterday. “We have to deliver, and if we deliver on that wide variety of capability, then we can increase and ramp that capacity. And that would be my wish list, that we have enough resources and we achieve programmatic success in the way that we’re planning to, so we can deliver in mass.”
All signs point to the diversity in munitions that Lozano is talking about here being particularly pronounced in future Army air defense capabilities full of systems firing multiple types of interceptors.