Quickstep Holdings says deliveries of vertical tail components for the F-35 Joint Strike Fighter project have commenced, with production expected to ramp up in the period ahead.
The Australian manufacturer’s qualification process for the vertical tail fairings components, vertical tail spars and vertical tail skins were approved during 2015/16, with the first delivery set coming just before the end of the financial year.
“In June 2016, Quickstep delivered the first of 700 vertical tail sets to be supplied over the next 14 years,” Quickstep said in its 2015/16 full year results lodged with the Australian Securities Exchange on Monday.
The first delivery came in a year where Quickstep grew revenues 27 per cent to $50.13 million in the 12 months to June 30 2016, compared with the prior corresponding period.
“With the JSF program ramping up and Quickstep’s new technologies beginning to secure commercial contracts, Quickstep is a much stronger company today,” Quickstep chief executive David Marino said in a statement.
“Delivery of the first sets of vertical tail components in the second half was a significant milestone that increases manufacturing throughput, and volume is anticipated to grow substantially in the next three years.”
Marino said Quickstep completed 590 parts for the Joint Strike Fighter program during the year and expanded its Bankstown facility to support scheduled growth in the period ahead.
“Inventory increased during the year to safeguard customer deliveries as a result of scheduled production stoppages for installation of new equipment to meet increasing JSF volumes. As production levels increase with capital investments in place, excess inventory will reduce, returning cash of approximately $2 million by December 2016,” Marino said.
Quickstep has agreements with several original equipment manufacturers to supply F-35 parts for the next 20 years valued at about US$700 million. This included being the sole supplier for Northrop Grumman for 21 F-35 parts, including doors, panels, lower skins and other composite parts.
It also has a long-term agreement with Marand for the supply of about 700 sets of carbon fibre composite parts for the F-35, including skins, spars and fairings, which was signed in April 2014.
Meanwhile, Quickstep said it completed 35 shipsets of composite wing flaps for the C-130J in 2015/16, with production “completed at an accelerated rate of approximately three ship-sets per month to meet customer demand”.
“As the production schedule returns to the normal rate of two ship-sets per month, the company’s skilled employees will be reassigned to support growing JSF production,” it said.
The company is the sole global supplier of wing flaps for the C‐130J Super Hercules after signing a five-year memorandum of agreement in December 2013. Current C-130J orders extended through to 2019.
“C-130J manufacturing progressed well, fulfilling demand for additional spares, and we are in discussions to extend the program beyond 2019,” Marino said.
The company reported a net loss for 2015/16 of $5.79 million, down from a loss of $3.94 million in the prior corresponding period.
The company said in its full year accounts it incurred a number of significant items totalling $4.2 million in 2015/16, comprising startup costs for its vertical tails production ($0.6 million), a restructuring of its management team ($0.5 million), indirect taxes relating to its German operations ($1.6 million) and financing costs ($1.5 million).
Earnings before interest, tax, research and development and significant items rose 200 per cent to $4.0 million as its aerospace manufacturing ramped up.
Quickstep said its workforce grew by almost half to 174 full time equivalents at the end of the 2015/16 financial year, from 120 at the end of 2014/15.
The firm order book was valued at $125 million at June 30, up 67 per cent from a year earlier.
There were also milestones at Quickstep’s automotive arm, which completed 377 carbon fibre air intake ducts for the Ford Falcon XR6 Turbo. Further, production of bonnet, side skirts and mud guards for Thales Australia’s Hawkei light protected vehicle has started, with the first 10 sets of parts (comprising 190 individual components) due to be delivered to Thales by September.
And in June 2016, Quickstep signed a Memorandum of Understanding (MoU) with DCNS Group, the government’s preferred international partner for the design of 12 submarines for the Royal Australian Navy, to facilitate its entry into the marine defence industry and participation in supply chain contracts for the SEA 1000 Future Submarine Program.
“We are encouraged by new contracts and are working on a number of collaborative projects which are expected to lead to further international sales,” Marino said.
“Our material science, process and engineering solutions have greatly improved production speed and component surface quality.”