Aeronautics in breach of financial covenants
Talks are underway to solve the problem as founder and CEO Avi Leumi steps down after 14 years.
5 January 12 12:20, Ron Steinblatt and Ron Stein
Sources inform ”Globes” that unmanned aerial vehicle (UAV) makerAeronautics Ltd. CEO Avi Leumi is stepping down 14 years after founding the company, and that he is heading a search committee to find his successor. Leumi will probably stay on as either chairman or president, but he will no longer be involved in day-to-day operations.Yesterday, “Globes” revealed that KCPS & Co. states in its financial report for the third quarter of 2011 that Aeronautics is in breach of part of the financial covenants for the loan to the company, and talks are underway to solve the problem.KCPS adds, “The company, especially at the solo level, has significant cash flow problems, due in part to the nature of the defense market. Most of the cash flow shortfalls are due to financing for large projects, and dependence on a small number of customers at any particular point in time. At the same time, the company has obtained projects through tenders, which make it more difficult to make long-term plans, and cause severe volatility in revenue compared with a fixed cost base.”
Sources estimate that Aeronautics’ revenue totaled $160 million in 2010, but that its revenue in 2011 was much lower.
