Friday, May 14, 2010

AAVG Announces Aggressive Marketing Stance for 2010

AvStar Aviation Group, Inc. (AVSTAR)

Defense News:
HOUSTON, TX--(Marketwire - 05/14/10) - AvStar Aviation Group (Pinksheets:AAVG - News) is a full service aircraft maintenance- repair- overhaul (MRO) company focused on small, second-tier airports; and committed to developing their brand with future acquisitions of charter operations, MROs and fixed base operations (FBOs) nationwide. There are over 3,100 FBOs operating in the U.S (a $4-$5 Billion industry); and the second-tier aviation sector has experienced growth of 32.2%. Currently, AAVG revenues are at $1.3 Million; the company is very close to achieving full reporting status and has 67,049,542 shares outstanding as of March 19, 2010. AAVG can also boast an elite FBO with over 54 years as a luxury destination provider to one of the wealthiest areas in the nation, southwest Florida. Historically, the 7 plane fleet has serviced corporate clients taking vacations, Bahamians doing business in the United States, and shipping cargo to the Bahamas from the U.S.

When asked about the company's mission CEO Russell Ivy stated, "AvStar Aviation was formed to fill a void between major full service airports with maintenance centers, and smaller independent airports. By focusing on smaller tier facilities, AAVG will offer services that, until now, only the majors have enjoyed."

The projected revenues from AAVG's planned acquisitions are $10 million for 2010 and directly linked to the new marketing plan complete with: new services, maintenance staffing services, and cost-reducing technology. For investors, the new business plans promise more company transparency, revenue-generating endeavors, and structured funding in order to funnel profits into promotions. The company's revitalized list of short-term goals proves that AAVG is set to take flight in 2010.

About AvStar Aviation: AvStar Aviation Group, Inc. ("AvStar") has a main focus on acquiring, consolidating, and growing businesses in the aviation industry. Also, the company is focusing on acquiring and/or developing companies that provide products and services for the general aviation industry. Please visit,www.avstargroup.com

Forward-Looking Statements: Certain statements contained in this release issued by AvStar Aviation Group, Inc. (the "Company") that are not historical facts are "forward-looking" statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, and because such statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements are statements regarding the intent, belief, or current expectations, estimates, or projections of the Company, its directors, or its officers about the Company and the industry in which it operates and are based on assumptions made by management. Although the Company believes that its expectations are based on reasonable assumptions, it can give no assurance that the anticipated results will occur. When issued in this report, the words "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," and similar expressions are generally intended to identify forward-looking statements.

Raytheon Celebrates 50 Years of Laser Technology Innovation

Raytheon

Defense News:
WALTHAM, Mass., May 14, 2010 /PRNewswire/ -- Raytheon Company (NYSE:RTN - News) is proud to recognize the 50th anniversary of the laser and to celebrate the many innovations that emerged since Theodore Maiman of Hughes Research Labs developed the first working laser May 16, 1960.

As part of the celebration, Raytheon hosted a dinner in El Segundo, Calif., Thursday to recognize employees and retirees from Raytheon and Hughes Aircraft Company who have been central to the company's laser innovation.

Through its work with laser technology, Raytheon has improved the speed and precision of solutions that support a range of mission areas. Over the years, Raytheon has fielded thousands of laser designators and delivered tens of thousands laser systems, all while continuing to discover new opportunities to innovate with laser technology. Examples of laser innovation across Raytheon include:

  • Adaptive Photonic Phase-Locked Elements – a DARPA development program at Raytheon: APPLE's goal is to develop a directed energy weapon that achieves high powers through beam combining. This high-power laser may be realized by combining multiple low-power beams into one single high-power beam. Raytheon's APPLE program focuses on enabling laser-based weapons applications to be integrated into unmanned aerial vehicles.
  • Advanced Targeting Forward Looking Infrared: Laser technology enables Raytheon's ATFLIR to locate and designate targets at all times of day and at ranges exceeding 40 nautical miles.
  • Beam Steering Technology Demonstration: The goal of the BSTD project is to develop optical communications for satellites that enable high-bandwidth communication to support warfighters, such as real-time sensor video. A specific objective is to provide gigabit communication to remote units, as opposed to the megabit communication that is currently possible.
  • Directed Infrared Countermeasures: Raytheon uses laser technology to protect warfighters as part of a comprehensive aircraft protection system.
  • Experimental Free Electron Laser: In June 2009, the Office of Naval Research awarded Raytheon a 12-month contract to develop the preliminary design of a 100 kilowatt experimental Free Electron Laser for the U.S. Navy that will also demonstrate parameters necessary to scale to a MW-class laser system.
  • Laser Area Defense System: Part of a directed energy program, Raytheon LADS utilizes lasers to improve the precision and accuracy of the Phalanx system.
  • Quantum Sensors: Raytheon BBN is participating in the DARPA-STO Quantum Sensors Program, which is exploring concepts for using quantum states in remote sensing applications. Successful development of such concepts would allow radar, laser radar and other remote sensing systems to exceed the performance limits of today's technology.


"Raytheon's long history of technology innovation is evident in our many laser technology developments, which continue to this day. Over five decades, Raytheon delivered numerous laser technology firsts, and we're proud of our accomplishments in both developing lasers and in creating innovative solutions that apply laser technology," said Mark E. Russell, vice president of Engineering, Technology and Mission Assurance at Raytheon. "Across the organization, Raytheon engineers will continue to seek new opportunities to leverage the power of lasers in order to help protect warfighters and support customer missions."

More information on Raytheon's laser innovation, including photographs and a Dual Band podcast interview, may be found on Raytheon's laser anniversary Web page.

Raytheon Company, with 2009 sales of $25 billion, is a technology and innovation leader specializing in defense, homeland security and other government markets throughout the world. With a history of innovation spanning 88 years, Raytheon provides state-of-the-art electronics, mission systems integration and other capabilities in the areas of sensing; effects; and command, control, communications and intelligence systems, as well as a broad range of mission support services. With headquarters in Waltham, Mass., Raytheon employs 75,000 people worldwide.

Lockheed Martin F-35 Program Receives Major Award For 'Cutting-Edge Design'

Defense News: FORT WORTH, Texas, May 13th, 2010 -- The Lockheed Martin [NYSE: LMT] F-35 Lightning II program has been recognized for its “cutting-edge design and technology” with an award from the American Institute of Aeronautics and Astronautics (AIAA).

The AIAA Foundation Board of Trustees presented the AIAA Foundation Award for Excellence to the F-35 program during the 2010 AIAA Aerospace Spotlight Awards Gala on May 12 in Washington, D.C. AIAA is the world’s largest technical society dedicated to the global aerospace profession.

“This award reflects the dedication and innovation of those who have made the F-35 Lightning II fighter a reality and signifies a bright future as the program ramps up flight test and commences operational training in the months ahead,” said U.S. Air Force Major General C.D. Moore, the acting program executive officer for the F-35 Lightning II Program Office.

According to the award citation, the Foundation Award for Excellence recognizes the “cutting-edge design and technology of – and global collaboration involved in – the Joint Strike Fighter, enabling a unique battlespace capability for the future.” The AIAA Foundation Board of Trustees annually recognizes unique contributions and extraordinary accomplishments by organizations or individuals in aeronautics and astronautics.

“This award acknowledges the commitment of the F-35 team, and the revolutionary technology that make the F-35 the fighter of the future,” said Tom Burbage, Lockheed Martin executive vice president and general manager of F-35 Program Integration.

The F-35 Lightning II is a 5th generation fighter, combining advanced stealth with fighter speed and agility, fully fused sensor information, network-enabled operations, advanced sustainment, and lower operational and support costs. Lockheed Martin is developing the F-35 with its principal industrial partners, Northrop Grumman and BAE Systems. Two separate, interchangeable F-35 engines are under development: the Pratt & Whitney F135 and the GE Rolls-Royce Fighter Engine Team F136.

Headquartered in Bethesda, Md., Lockheed Martin is a global security company that employs about 136,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. The Corporation reported 2009 sales of $45.2 billion.

Media Contacts:

John R. Kent
Office: 817-763-3980
Email:
john.r.kent@lmco.com

Chris Geisel
Office: 817-763-2643
Email:
christian.g.geisel@lmco.com


Lockheed Martin Team Begins Development On Second Phase Of FBI’s Next Generation Identification Program

Efforts Underway to Build New, Web-Based Infrastructure for Wanted Persons Database

Defense News:
ROCKVILLE, Md., May 13th, 2010 -- The Lockheed Martin [NYSE: LMT]-led Next Generation Identification (NGI) team is beginning to fully develop and deploy a new NGI system capability that transforms how law enforcement officials search an FBI wanted persons database. Development efforts began after a successful Critical Design Review (CDR) for the system’s second phase, also known as Increment 2: Repository for Individuals of Special Concern (RISC).

NEXT GENERATION IDENTIFICATION (NGI)

The teacher who helps a first-grader learn simple addition. The elder care worker who assists an aging parent. The government employee with access to highly sensitive information.

What do all of these people have in common? Each needed a background check to obtain employment – and that background check involved the Federal Bureau of Investigation (FBI) and verifying a person’s identity using biometrics. To ensure that those who care for our most vulnerable, those charged with protecting our nation and its citizens, can be trusted.

And it goes beyond proving someone is who they say they are. It’s also for catching the guilty, identifying criminals through what they’ve left behind: fingerprints at a crime scene, a palm print on a door, a face caught on security videotape.

It’s Next Generation Identification (NGI). A state-of-the-art biometric identification system that the FBI will use and populate with biometric information to keep Americans and their families safe.

The System
Biometrics are already in use today with the FBI’s Integrated Automated Fingerprint Identification System (IAFIS); the result of a successful collaboration between the FBI and Lockheed Martin, IAFIS is the world’s largest database of its type with more than 55 million sets of fingerprints.

But, just as our world has changed, so has the scope of technology. Capability has increased exponentially. New methods are gaining traction. With NGI, the Bureau and Lockheed Martin face a new challenge: to significantly expand fingerprint capacity, add in palm prints, and include facial and iris recognition.

What’s Happening

Lockheed Martin Information Systems & Global Services
700 N. Frederick Ave.
Gaithersburg, MD 20879

The RISC fingerprint database, which is managed by the FBI’s Criminal Justice Information Services (CJIS) Division, includes Wanted Persons, Known or Appropriately Suspected Terrorists, Sex Offenders Registry subjects, and other persons of special interest.

“This capability gives law enforcement users more speed and flexibility in how they search the RISC fingerprint database,” explained Lockheed Martin NGI Program Director Mike Moore. “For the first time, the law enforcement community can use web-based transactions, in addition to the existing data input mechanisms, to determine whether a suspect is a wanted person within RISC.”

In addition to the full RISC development activity, the team is now beginning design work for the next phase of NGI, which will enhance today’s latent fingerprint matching accuracy and introduces palm prints to the system. NGI is being designed with a significant degree of flexibility to accommodate these and other biometric modalities that may mature and become important to law enforcement efforts in the future.

Earlier this year, the NGI team completed final delivery of its more than 800 Advanced Technology Workstations a full month ahead of schedule. The new machines replace aging Integrated Automated Fingerprint Identification System (IAFIS) Service Provider Workstations used by the FBI’s service providers and analysts.

Headquartered in Bethesda, Md., Lockheed Martin is a global security company that employs about 136,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. The Corporation reported 2009 sales of $45.2 billion.

Lockheed Martin Media Contact: Kimberly Jaindl, 301-519-6400, kimberly.jaindl@lmco.com


UPDATE 3-Weak euro brightens EADS, shares rise

* Q1 operating profit falls 64 percent

* Airbus parent reaffirms 2010 outlook

* Volatility shows crisis "not fully behind us"

* A380 drag on underlying performance

* Shares up 3 pct, hit 8-month high

(Adds comment on A380 breakeven; updates shares)

By Tim Hepher and Matthias Blamont

Defense News:
PARIS, May 14 (Reuters) - Airbus parent EADS (EAD.PA) reaped the benefits of a weaker euro on Friday, forecasting a long-term benefit from Europe's battered currency and boosting its shares to their highest in eight months.

Sharply lower first-quarter earnings from Europe's largest aerospace firm reflected the negative impact of tougher currency hedges taken out when the euro was on a high. The company's sales are mostly in dollars while it reports in euros.

Operating profit, down 64 percent to 83 million euros ($105.4 million), was also hit by concerns about costs on the A380 superjumbo, missing average market forecasts of 98 million.

But investors leaped on hopes that EADS, which once said its long-term existence was threatened by an overvalued euro, would be able to translate a recent slump in the currency's fortunes into improved profits once the currency hedges run out.

"The group is expected to continue benefiting from the weak euro, currently the main reason for the fluctuating share price," said analyst Olivier Brochet at brokerage Natixis Securities.

The company also reaffirmed its outlook for the rest of the year, saying the aviation industry was slowly on its way back up even though the turmoil over European government finances was a reminder that the financial crisis was not yet over.

"The crisis is not yet fully behind us and particularly for commercial helicopters we are only recovering slowly," Finance Director Hans Peter Ring told reporters in a conference call.

"After the crisis of the financial sector we have seen the crisis of some countries and, following that, the crisis of the euro's weakening which will likely persist for some time."

Chief Executive Louis Gallois said EADS should benefit in the mid- and long-term if the dollar trend was confirmed.

EADS shares were up or 3 percent at 15.99 euros by 1022 GMT, having risen as high as 16.20 euros -- their highest since September. They have risen 13 percent this year, outperforming the French blue-chip index .FCHI by 22 percent.

DEBT CRISIS

The bounce came as the euro hit a 14-month low below $1.25, punished by lingering concerns about the euro debt crisis despite a bailout for Greece earlier this week. [FRX/]

The euro is off 16 percent from its 2009 high of around $1.50, which was also the prevailing level when Airbus Chief Executive Tom Enders warned in 2007 of an "existential" threat to Airbus from a weak dollar that helps rival Boeing (BA.N).

EADS hedges its currency exposure by buying the euros it needs around two years ahead. Ring said it would take until 2012 for current euro trends to be reflected in the bottom line.

Currency strategists polled by Reuters have said the euro will continue to struggle over the coming year [EUR/POLL].

The euro's woes may be a double-edged sword for EADS. While boosting export demand and helping the translation from revenue received in dollars, it conveys fears about the strength of the domestic economy, which may in turn hit its defence business.

Still, analysts said currency was the main factor driving EADS shares and several upgraded recommendations. [EADS-RCH]

Brokers said sentiment had also been boosted by a relatively calm set of numbers from EADS after a torrid year that saw it take hefty charges for delays in its A400M military airlifter.

Quarterly net profit fell 39 percent to 103 million euros. Sales rose 6 percent to 8.95 billion, in line with expectations.

Longer term, investors will be wary of any delays to the next major Airbus project, the mid-sized A350, which is nearing a critical point in its development, as well as any resurgence of problems in the A380 or A400M military transporter.

EADS said the A380 continued to weigh significantly on its underlying performance but that it was making progress.

Finance Director Ring said if the dollar stayed where it was, the plane could start making a profit in about five years. [ID:nWEA2402]

Airbus is battling a backlog of work and the high costs of customising the world's largest airliner, whose deliveries are running more than two years behind their original schedule.

Boeing last month posted a narrower-than-expected fall in first-quarter profits and cut its 2010 forecast due to the impact of U.S. healthcare reforms. [ID:nN20252563] (Additional reporting byBlaise Robinson; Editing by James Regan, David Holmes and Karen Foster) ($1=.7872 Euro)

Global Technologies to Acquire $9,000,000 in Wind Turbine Technology

global technologies









Defense News:
LONDON--(Marketwire - 05/14/10) - Global Technologies, Ltd. (Pinksheets:GTLL - News) announced today it executed an Agreement with Creative Laboratory Enterprises (CLE) to acquire CLE's Innovative Wind Turbine Blade Design Intellectual Property Portfolio. The transaction is valued at more than $9,000,000 and the Company anticipates completing the acquisition on or before 15 JUNE 2010.

The Company previously announced the signing of a Joint Development Agreement with Creative Laboratory Enterprises (CLE), a private Intellectual Property (IP). The holding company currently has a portfolio exceeding $60,000,000 of IP asset valuation, primarily focused in the sustainable energy and environmental sectors.

As part of the first phase of the Agreement, the Company has identified a number of wind blade technologies to be developed. The two companies will timely agree upon development schedules, patent protection procedures and collaboration partner identification. The parties anticipate a final closing within the next 30 days.

GTL encourages collaboration with public, private and institutional partners across all phases of the development cycle. The Company accepts submissions from both inventors and joint venture development partners; and will be actively seeking collaboration from all sectors in advancing its Wind Turbine Blade Designs.

GTL will release various updates and disclosures in the coming days and weeks as the Company's revitalized business plan for 2010 gains momentum. Shareholders can expect full financial disclosures and regular filings alongside regular updates on acquisitions, assets, and revenues projections.

About Global Technologies, Ltd.

GLOBAL TECHNOLOGIES (GTL) is a technology portfolio company that acquires nascent technology and related innovations, inventions and IP assets to enhance their growth and development. The company builds revenues and asset value through a model of continuous growth, income from or sale of its portfolio holdings, and technology licensing or distribution agreements.

GTL invests primarily in innovative and promising clean/renewable energy or bio-tech technologies that have reached the stage in the critical Technology Development & Demonstration phase of the Innovative Cycle, which includes Prototype, Demonstration and Market Analysis.

Safe-Harbor
This press release contains statements (such as projections regarding future performance) that are forward-looking as defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected as a result of certain risks and uncertainties. The company's website and prior SEC and Pink Sheets filings contain various disclosures and RISK FACTORS (incorporated herein by reference) and should be read before any investment decision.

Statements made in this news release may be forward-looking statements within the meaning of Federal Securities laws that are subject to certain risks and uncertainties and involve factors that may cause actual results to differ materially from those projected or suggested. Factors that could cause actual results to differ materially from those in forward-looking statements include, but are not limited to: (1) the availability of additional funds to enable us to successfully pursue our business plan; (2) the uncertainties related to the appeal and acceptance of our proprietary method of play and our planned on-line products; (3) the success or failure of our development of additional products and services; (4) our ability to maintain, attract and integrate management personnel; (5) our ability to secure suitable broadcast and sponsorship agreements; (6) our ability to effectively market and sell our services to current and new customers; (7) changes in the rules and regulations governing our business; (8) the intensity of competition; and (9) general economic conditions. Additional factors that could cause actual results to differ materially from those projected or suggested in any forward-looking statements are contained in the company's website and Pink Sheets filings contain disclosures and RISK FACTORS (incorporated herein by reference) and should be read before any investment decision. The Company assumes no obligation to update and supplement forward-looking statements because of subsequent events.

UPDATE 1-Food and cars boost Canada March factory sales


* Sales beat Reuters forecast of 1.0 pct gain

* Food and autos the biggest gainers

* New and unfilled orders, inventories drop

Defense News:
OTTAWA, May 14 (Reuters) - Canadian manufacturing sales beat expectations in March to grow 1.2 percent from February on strong gains in the food and auto sectors, Statistics Canada said on Friday.

The median forecast of analysts in a Reuters poll was for a gain of 1.0 percent in the month. Statscan's revised data showed sales were flat in February versus its previous estimate of a 0.1 percent increase.

Excluding auto products and parts, factory sales climbed 0.9 percent. In volume terms, they were up 1.7 percent.

Food manufacturers sold 3.5 percent more than in March after experiencing flat sales for the prior six months. Carmakers reported a 3.6 percent jump in sales at the factory gate and most other durable good industries also reported gains.

Inventories slid 1.1 percent and the inventory-to-sales ratio -- the number of months it would take to exhaust stock at the current sales pace -- dropped to its lowest since September 2008 at 1.32.

Despite a strengthening trend in new orders since last June, they fell 0.7 percent in March. At the same time, manufacturers worked off some of their backlog for the first time in four months, causing a 0.4 percent drop in unfilled orders. ($1 = $1.02 Canadian) (Reporting by Louise Egan; Editing by Theodore d'Afflisio)

Sparton Corporation Reports EPS of $0.07 for the Fiscal 2010 Third Quarter; Gross Margin of 14.3%

logo

Defense News:
SCHAUMBURG, Ill.--(BUSINESS WIRE)--Sparton Corporation (NYSE: SPA - News) today announced results for the third quarter of fiscal 2010 ended March 31, 2010. The Company reported third quarter net income of $0.7 million, or $0.07 per share, versus a net loss of $0.8 million, or $0.08 loss per share, for the third quarter of fiscal 2009.

Consolidated results for the three and nine months ended March 31, 2010 and 2009:

($ in 000’s, except per share) Third Quarter Nine Months
2010 20092010 2009
Net Sales$38,637$54,592$133,964$163,104
Gross Profit5,5154,69921,07611,257
Restructuring / Impairment Charges2383502,121660
Operating Income (Loss)324743,466(4,007)
Income Tax Expense (Benefit)(132)183(2,027)381
Net Income (Loss)689(763)5,342(6,916)
Income (Loss) Per Share, Basic and Diluted0.07(0.08)0.54(0.70)

Highlights for the fiscal 2010 third quarter are summarized below:

  • Fiscal 2010 third quarter net income of $0.7 million, Sparton’s third consecutive profitable quarter
  • Fiscal 2010 third quarter gross profit of $5.5 million, compared to $4.7 million in the same period in fiscal 2009, despite a decrease in net sales of $16.0 million
  • Defense & Security Systems business unit experienced an 87% increase in sales in the third quarter of fiscal 2010 compared to the same period in fiscal 2009
  • Substantial completion of restructuring activities in the third quarter of fiscal 2010, resulting in charges of $0.2 million
  • Gain on sale of partial interest in Cybernet Systems Corporation of $0.2 million

Sparton President and CEO Cary Wood commented, “While earnings for the quarter were below those achieved in the first and second quarters of fiscal 2010, third quarter results exceeded our internal plan. Our DSS business unit continues to excel, experiencing significant growth over the prior year quarter while continuing to achieve improved margins. Although we experienced an expected drop in sales to foreign governments compared to the first two quarters of fiscal 2010, we continued to experience minimal rework costs resulting from improvements in operating performance leading to successful sonobuoy drop tests. In our Medical business unit, consistent with our previous guidance, we experienced an anticipated softening in volume which negatively impacted overall margins. We continue to review our cost structure to align it with expected future volume levels. Performance within our EMS business unit continues to reflect the effects of the significant changes implemented during the past eighteen months while maintaining consistent margin levels with the first two quarters. Through our continued implementation of Lean Enterprise, we are confident that we will ultimately be successful in increasing our EMS gross margins to acceptable levels.”

As previously reported, beginning in fiscal 2010, Sparton has segmented its financial reporting into three distinct business units: Medical Device (“Medical”), Electronic Manufacturing Services (“EMS”), and Defense & Security Systems (“DSS”).

Third Quarter Consolidated Results

Net sales for the three months ended March 31, 2010 were $38.6 million, a decrease of 29% from the same prior year period, reflecting the full disengagement from several significant customer contracts within our EMS business unit during the second half of fiscal 2009 and the first quarter of fiscal 2010 and a quarter over quarter decrease in sales to one Medical customer, partially offset by increased volume from the DSS business unit.

The gross profit percentage for the three months ended March 31, 2010 was 14%, a significant increase from 9% for the same period last year. The increase in gross profit in the quarter ended March 31, 2010 was driven by favorable product mix, continued elevated margins in our DSS business unit and the Company’s ongoing implementation of Lean Enterprise, partially offset by the overall decrease in sales volume. Additionally, gross profit was positively impacted from reduced overhead costs associated with the consolidation of manufacturing operations and workforce reductions which took place in the second half of fiscal 2009.

Selling and administrative expenses for the three months ended March 31, 2010 remained relatively flat with the prior year quarter.

Restructuring and impairment charges were $0.2 million and $0.4 million for the three months ended March 31, 2010 and 2009, respectively, as the Company has substantially completed its restructuring activities.

Interest expense was $0.2 million for the third quarter of fiscal 2010 compared to $0.4 million for the third quarter of fiscal 2009. The decrease in interest expense primarily reflects the repayment of the Company’s outstanding bank debt in August 2009.

The Company recorded an income tax benefit of approximately $0.1 million for the quarter ended March 31, 2010, compared to an expense of $0.2 million for the same period in the prior year. The fiscal 2010 benefit reflects the additional release of $0.2 million of the Company’s deferred tax asset valuation allowance due to recent tax regulation changes.

Net income of $0.7 million, or $0.07 per share, basic and diluted, was reported for the three months ended March 31, 2010, compared to a net loss of $0.8 million or a loss of $(0.08) per share, basic and diluted, for the corresponding period of fiscal 2009.

Segment results for the three and nine months ended March 31, 2010 and 2009:

Sales:

($ in 000’s) Third Quarter Nine Months
SEGMENT2010 2009 % Chg2010 2009 % Chg
Medical$14,228$17,619(19%)$51,142$46,9809%
EMS13,07634,076(62%)45,003101,829(56%)
DSS14,2937,65787%46,66023,61798%
Eliminations (2,960) (4,760)(38%) (8,841) (9,322)(5%)
Totals$38,637 $54,592 (29%)$133,964 $163,104 (18%)

Gross profit:

($ in 000’s) Third Quarter Nine Months
SEGMENT2010 GP % 2009 GP %2010 GP % 2009 GP %
Medical$1,420 10%$2,430 14%$6,871 13%$5,353 11%
EMS6205%1,3214%2,3495%3,3603%
DSS 3,47524% 94812% 11,85625% 2,54411%
Totals$5,51514%$4,6999%$21,07616%$11,2577%

Operating income (loss):

($ in 000’s) Third Quarter Nine Months
SEGMENT2010
% of
Sales
2009
% of
Sales
2010
% of
Sales
2009
% of
Sales
Medical$273 2%$1,321 7%$3,733 7%$2,142 5%
EMS(426)(3%)870%(1,189)(3%)(526)(1%)
DSS2,78419%(30)(0%)9,86121%(100)(0%)
Other Unallocated (2,307)- (1,304)- (8,939)- (5,523)-
Totals$324 1%$74 0%$3,466 3%$(4,007)(2%)

Third Quarter Segment Results

Medical Device (“Medical”)

Medical sales decreased $3.4 million in the three months ended March 31, 2010 as compared with the same quarter last year. This decrease in sales was primarily due to $3.0 million of reduced sales to one customer, as it suspended production of one of its lines to make product enhancement modifications. Additionally, this customer exhibited elevated purchasing in the fiscal 2009 third quarter as it returned to normal inventory levels after ending a worldwide inventory reduction program at the end of calendar 2008.

The gross profit percentage on Medical sales decreased to 10% from 14% for the three months ended March 31, 2010 and 2009, respectively. This decline in margin on Medical sales reflects the overall decrease in sales volume as well as unfavorable product mix between the two periods, partially offset by greater operating efficiencies from consolidation of manufacturing operations and the Company’s continued implementation of Lean Enterprise.

Electronic Manufacturing Services (“EMS”)

EMS sales for the three months ended March 31, 2010 decreased $21.0 million as compared with the same quarter last year. This decrease primarily reflects decreased sales to three customers, whose combined decrease totaled $19.6 million from the prior year quarter. Sparton disengaged with one of these customers as of June 30, 2009 and completed its disengagement with another customer, Honeywell, during the three months ended December 31, 2009. The decrease in sales to the third customer reflects the quarter over quarter loss of certain programs with this customer. Partially offsetting these decreases were sales to another customer which increased by $1.5 million.

The gross profit percentage on EMS sales increased to 5% for the three months ended March 31, 2010 compared to 4% for the three months ended March 31, 2009. The quarter over quarter comparison reflects improvement in gross profit mainly attributable to the reduced overhead costs associated with the plant closings and the consolidation of EMS operations, partially offset by the overall decrease in sales volume. Margin was also favorably impacted by improved performance and price increases to certain customers.

Defense & Security Systems (“DSS”)

DSS sales for the three months ended March 31, 2010 improved significantly compared to the third quarter of last year, showing an increase of $6.6 million. This increase reflected higher U.S. Navy product volume due to successful sonobuoy lot acceptance testing in the current fiscal year as well as an increase in the awarded annual Navy contracts in production during the respective periods. Increased engineering sales revenue also contributed to the quarter over quarter variance. Sonobuoy sales to foreign governments were $2.0 million and $2.9 million in the three months ended March 31, 2010 and 2009, respectively.

The gross profit percentage on DSS sales increased to 24% from 12% for the three months ended March 31, 2010 and 2009, respectively. The improvement in gross margin reflects a significant increase in overall sales volume from the prior year quarter. Additionally, gross profit percentage was favorably affected by the incurrence of minimal rework costs as a result of successful sonobuoy drop tests in the current year, reflecting improvement in operating performance, due in part to the Company’s continued implementation of Lean Enterprise.

Liquidity and Capital Resources

Mr. Wood stated, “Sparton remains committed to improving its working capital position and overall liquidity.” During the third quarter of fiscal year 2010, the Company generated $4.1 million in cash from operating activities, reflecting cash generated from positive operating results, receipt of tax refunds, collection of our Electropac receivable and the successful management of working capital requirements to support sales volumes. These cash inflows were partially offset by cash outlays during the period related to the production of U.S. Navy sonobuoys for which advance billings had been previously received. In addition, during the third quarter of fiscal 2010, the Company received $0.5 million from the sale of a portion of its interest in Cybernet Systems Corporation. The cash generated from operating activities during the quarter and the partial sale of the Company’s interest in Cybernet resulted in a cash balance of $16.1 million at the end of the quarter. During the fiscal 2010 fourth quarter, the Company expects to collect initial advanced billings on certain recently awardedU.S. Navy fiscal year 2010 contracts. In addition, as previously reported, on May 1, 2010 the Company entered into a long-term lease of its Coors Road property in Albuquerque, New Mexico, which provided for an upfront payment of approximately $2.5 million and approximately $0.8 million being paid over three years in a series of equal annual payments. Mr. Wood continued, “The continuance of U.S. Navy advanced billings and the progress toward the monetization of our non-performing assets will further add to the Company’s cash reserves and provide us maneuverability in our operational and strategic direction.”

As of March 31, 2010, the Company had no outstanding borrowings against available funds on its $20 million revolving credit facility provided in August 2009 by PNC Bank, National Association. The credit facility is subject to certain customary covenants which were met at March 31, 2010.

Outlook

Mr. Wood further commented, “We remain focused on sustained profitability and we are pleased to have delivered positive results through the first three quarters of fiscal 2010. We anticipate that fourth quarter sales volumes will be relatively consistent with that of the third quarter. Accordingly, we will continue to analyze our cost structure to ensure it is aligned with our forecasted sales volumes. In addition, we expect the ongoing implementation of our lean and quality efforts to lead to improvements in operating performance. As we move forward, we continue to monitor the health of our businesses and remain vigilant for events or trends that could impede our success as we look to implement organic and inorganic growth strategies to increase future earnings.”

Conference Call

Sparton will host a conference call with investors and analysts on May 18, 2010 at 10:00am EST to discuss its fiscal year 2010 third quarter financial results, provide a general business update, and respond to investor questions. To participate, callers should dial (800) 682-8593. Participants should dial in at least 15 minutes prior to the start of the call. A Web presentation link is also available for the conference call:https://www.livemeeting.com/cc/gc_min_pro_usa/join?id=R5N4QC&role=attend. Investors and financial analysts are invited to ask questions after the presentation is made. The presentation and a replay of the call will be available on Sparton’s Web site: http://www.sparton.com in the “Investor Relations” section for up to two years after the conference call.

About Sparton Corporation

Sparton Corporation (NYSE:SPA - News), now in its 110th year, is a provider of complex and sophisticated electromechanical devices with capabilities that include concept development, industrial design, design and manufacturing engineering, production, distribution, and field service. The primary markets served are in the Medical Device, Defense & Security Systems, and Electronic Manufacturing Services industries. Headquartered in Schaumburg, IL, Sparton currently has four manufacturing locations worldwide. The Company's Web site may be accessed at http://www.sparton.com.

Safe Harbor and Fair Disclosure Statement

Certain statements described in this press release are forward-looking statements within the scope of the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements may be identified by the words “believe,” “expect,” “anticipate,” “project,” “plan,” “estimate,” “will” or “intend” and similar words or expressions. These forward-looking statements reflect Sparton’s current views with respect to future events and are based on currently available financial, economic and competitive data and its current business plans. Actual results could vary materially depending on risks and uncertainties that may affect Sparton’s operations, markets, prices and other factors. Important factors that could cause actual results to differ materially from those forward-looking statements include, but are not limited to, Sparton’s financial performance and the implementations and results of its ongoing strategic initiatives. For a more detailed discussion of these and other risk factors, see Part I, Item 1A, Risk Factors and Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in Sparton’s Form 10-K for the year ended June 30, 2009, and its other filings with the Securities and Exchange Commission. Sparton undertakes no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.