About L-3 Communications Holdings, Inc.

L3 Technologies (formerly L-3 Communications Holdings) provides products and services to the government based on intelligence, surveillance, and reconnaissance (ISR), including systems for satellite, avionics (aircraft electronics), and marine communications. Products include simulation, training, and night vision equipment, and L3 also provides aircraft maintenance and modernization services. The US government, primarily the Department of Defense (DoD), accounts for nearly 70% of its business, but L3 is expanding its commercial offerings. The company operates through 273 locations around the globe, but the majority of its revenues stem from the US.

Operations

L3 operates through four main segments: Electronic Systems, Sensor Systems, Communication Systems, and Aerospace Systems.

Geographic Reach

The company operates through 273 locations consisting of manufacturing facilities, administration, research and development and other properties throughout the US and internationally. The US is its largest market, accounting for roughly 80% of total revenue in 2016.

Sales and Marketing

The company's sales are predominantly derived from contracts with agencies of, and prime system contractors to, the US government. In 2016, the Department of Defense (DOD) and other government agencies accounted for 73% of its total revenue; the remainder of revenue was contributed by commercial (12%) and foreign governments (15%).

In addition, direct sales to end customers represented 67% of net sales in 2016, and sales acting as a subcontractor or supplier represented the remaining 33%. Sales to L3's five largest contracts generated 15% of total sales; its largest contract was the Fort Rucker Maintenance Support contract with the US Army Aviation and Missile Life Cycle Management Command (AMCOM).

Financial Performance

L3 has seen its net sales slowly diminish over the last five years. In addition, revenues remained static for 2015 and 2016, hovering around the $10.5 billion mark for both years. During 2016, L3 experienced significant sales declines in South Korea (39%), Australia (21%), Saudi Arabia (21%), and Japan (15%). These regions were affected by lower sales related to linguist services, training, and logistics support projects for the US Army due to the draw-down of American military forces in Iraq.

L3 posted a net loss of $240 million in 2015. The loss was attributed to the selling of its former National Security Solutions (NSS) business in early 2016 and led to the incurring of impairment charges and a loss from discontinued operations for 2015. With this divestiture behind it, L3 posted positive net income of $710 million in 2016.

Strategy

With such a major amount of business derived from the US government and DoD (the US Army and Air Force collectively account for about 70% of its total revenue), the company is vulnerable to the priorities of the Pentagon and other government agencies, which have resulted in cuts in defense spending and additional troop withdrawals from the Middle East.

In addition, the company enters into collaborative ventures with other businesses to develop new opportunities, especially in the area of providing full-service, rather than just products. Additionally, L3 has been transitioning from providing individual products and components to bundled products and services, including logistics, MRO (maintenance, repair, and overall), and supply chain management. Its revenues from services is now neck-and-neck with that of its products, and L3 plans to add additional services under existing programs.

To focus on this strategy, in early 2016 L3 sold its former National Security Solutions (NSS) business to CACI International for $550 million.

Mergers and Acquisitions

In early 2017, L3 acquired the explosives trace detection (ETD) business of Massachusetts-based Implant Sciences Corporation for $118 million in cash. L3 will integrate Implant into its security and detection systems division within its electronic systems business segment. The transaction enhanced its capabilities within the global aviation security and national security markets and allowed it to capitalize on significant opportunities in the growing security and detection market.

In 2016, the company obtained Micreo Limited, located in Brisbane, Australia. Micreo is a market leader in the design and production of RF and photonic products for radar and electronic warfare, and its products are currently installed in several of the world’s frontline military aircraft and ships. The deal complemented the company’s electronic warfare capabilities and expanded its Australian footprint.

In 2015, L3 snapped up UK-headquartered CTC Aviation Group (now known as L-3 CTC Ltd) for $220 million. L-3 CTC is a global airline pilot training and crew resourcing specialist catering to major airlines and retail customers globally. The acquisition expanded L3's commercial aviation training business.

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L-3 Communications Holdings, Inc.

600 3rd Ave
New York, NY 10016-1901
Phone: 1 (212) 697-1111
Fax: 1 (212) 805-5477

Stats

  • Employer Type: Public
  • Evp Corporate Strategy And Development: Curtis Brunson
  • Senior Vice President: James W Dunn
  • Chairman, President, And Ceo: Michael Strianese
  • Employees: 38,000

Major Office Locations

  • New York, NY

Other Locations

  • Fort Rucker, AL
  • Huntsville, AL
  • Glendale, AZ
  • Mesa, AZ
  • Phoenix, AZ
  • Tempe, AZ
  • Anaheim, CA
  • Camarillo, CA
  • Campbell, CA
  • Carlsbad, CA
  • Fairfield, CA
  • Folsom, CA
  • Gardena, CA
  • Menlo Park, CA
  • Montrose, CA
  • National City, CA
  • Pasadena, CA
  • Ridgecrest, CA
  • Sacramento, CA
  • San Carlos, CA
  • San Diego, CA
  • San Leandro, CA
  • Simi Valley, CA
  • Sylmar, CA
  • Greenwood Village, CO
  • Simsbury, CT
  • Washington, DC
  • Cape Canaveral, FL
  • Crestview, FL
  • Eglin A F B, FL
  • Fort Lauderdale, FL
  • Jacksonville, FL
  • Largo, FL
  • Melbourne, FL
  • Merritt Island, FL
  • Milton, FL
  • Niceville, FL
  • Orange Park, FL
  • Orlando, FL
  • Panama City, FL
  • Saint Petersburg, FL
  • Sarasota, FL
  • Shalimar, FL
  • Tampa, FL
  • Albany, GA
  • Alpharetta, GA
  • Saint Marys, GA
  • West Des Moines, IA
  • Rolling Meadows, IL
  • Fort Campbell, KY
  • Louisville, KY
  • Harahan, LA
  • Ayer, MA
  • Burlington, MA
  • Haverhill, MA
  • Northampton, MA
  • Waltham, MA
  • Wilmington, MA
  • Woburn, MA
  • Columbia, MD
  • Frederick, MD
  • Hanover, MD
  • Linthicum Heights, MD
  • Patuxent River, MD
  • Ann Arbor, MI
  • Muskegon, MI
  • Madison, MS
  • Matthews, NC
  • Omaha, NE
  • Londonderry, NH
  • Budd Lake, NJ
  • Camden, NJ
  • Cranford, NJ
  • Mount Ephraim, NJ
  • Albuquerque, NM
  • Binghamton, NY
  • Hauppauge, NY
  • Kirkwood, NY
  • Patchogue, NY
  • Cincinnati, OH
  • Dayton, OH
  • Broken Arrow, OK
  • Oklahoma City, OK
  • Tinker Afb, OK
  • Tulsa, OK
  • Bristol, PA
  • Collegeville, PA
  • Pittsburgh, PA
  • Williamsport, PA
  • Ashaway, RI
  • Arlington, TX
  • Austin, TX
  • Corpus Christi, TX
  • Dallas, TX
  • Del Rio, TX
  • Garland, TX
  • Greenville, TX
  • Houston, TX
  • Killeen, TX
  • Kingsville, TX
  • Quinlan, TX
  • Rockwall, TX
  • San Angelo, TX
  • Universal City, TX
  • Waco, TX
  • Ogden, UT
  • Salt Lake City, UT
  • Alexandria, VA
  • Arlington, VA
  • Ashburn, VA
  • Chantilly, VA
  • Culpeper, VA
  • Leesburg, VA
  • Norfolk, VA
  • Portsmouth, VA
  • Stafford, VA
  • Virginia Beach, VA
  • Silverdale, WA
  • Tomahawk, WI
  • Cold Lake, Canada
  • Goffs, Canada
  • Mississauga, Canada
  • Nepean, Canada
  • Trenton, Canada
  • Chester, England
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