IMCO Industries jumps on NIS 61m defense orders

IMCO Industries
IMCO Industries

IMCO is negotiating a NIS 327 million multi-year framework agreement with the customer.

IMCO Industries, one of the smaller shares on the Tel Aviv Stock Exchange, stood out today with a leap of over 10%, after having been ahead as much as 30% during the session. The company reported near the start of trading that it had received orders to manufacture and supply products for NIS 61 million, close to its entire market cap, before the day's trading.

IMCO said that the orders came from a defense customer "to supply and manufacture cable harnesses and electrical and electronics boxes" for a period between one and three years "according to the supply dates listed in the orders." According to IMCO, the deal includes NIS 21 million in development orders and NIS 40 million in initial assembly line production orders.

Looking ahead, IMCO is optimistic, saying that it expects to receive additional orders from the customer in the near future, although it qualifies this by adding that it is "unable at this stage to estimate the date on which these orders will be received, or their volume." IMCO disclosed that these orders were "the result of negotiations that took place between the customer and the company in recent months concerning a multi-year framework deal with an expected volume of NIS 327 million." The company expects to recognize revenue from the orders "in accordance with completion of milestones and the rate at which the products are supplied," according to GAAP accounting rules.

According to IMCO, its board of directors decided last November to postpone reporting of the matter, "since immediate reporting was liable to have prevented completion of the deal, or to have greatly worsened its terms." The company added, "The negotiations that took place between the parties have not yet yielded an agreement," and that the terms for the orders "are subject to the company's approval and the signing of an agreement between the company and the customer."

IMCO, which develops, manufactures, and markets electronics, electrical, and mechanical products, primarily for military use, is controlled by siblings Ron, Dan, and Nilly Yakir.

Since November, IMCO has announced its wins in several tenders and framework orders for the production and supply of harnesses, electric and electronics cables, and electric boxes amounting to NIS 21 million over periods of up to three years. The increase in its share price today brought its gains over the past year to nearly 80%, and pushed its market cap up to nearly NIS 80 million. IMCO's CEO since the summer has been Eitan Zait, who resigned as head of Carmor Integrated Vehicle Solutions shortly before that company entered a stay of proceedings. Zait replaced Michael Maixner, who left IMCO after being appointed CEO of Israel Railways.

Published by Globes, Israel business news - en.globes.co.il - on January 2, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

IMCO Industries
IMCO Industries
Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018