AVAV Notes:

IBD Article 09/15/08

• It does not appear that a solution in Iraq will cause decline in military contracts

  • US Millitary is preparing for a future beyond IRAQ and is tapping a myriad of companies to do it

• Aero Vironment has made its name building airplanes small enough to carry into battle and launch by hand

  • Camera and electronic equipment let soldier see over next ridge or in next valley

• L-3 is the largest contractor - $14 bil in sales last year (focus is on intelligence and surveillance systems for aircraft

• Must stay in contact with military and Washington to know what systems / services are needed

• Contracts usually renewed on quality, experience basis – not as much on price

  • Military has vested interest in small companies staying in business – contracts continue to be serviced

• US defense budget grown from $364B in 2001 to $622 billion in 2007

  • Companies can sell to other militaries as a secondary source of revenue

• 35% of defense budget goes toward modernization efforts.