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Lockheed Martin Awards F-35 Contract

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Vision Systems International (NYSE:VSI - News), a joint venture between Elbit Systems of America, a subsidiary of Elbit Systems Ltd. (NasdaqGS:ESLT - News) and Rockwell Collins Inc. (NYSE:COL - News), has won a contract from the Aerospace division of defense behemoth Lockheed Martin Corporation (NYSE:LMT - News) to enhance the helmet mounted display system (:HMDS) on the F-35.

Comprising of two additional phases in the development, the contract will enable VSI to improve the F-35 HMDS currently in production for the 5th generation Lightning II Joint Strike Fighter aircraft. 

The VSI team is already in the process of mitigating display jitter affecting the display symbology, enhance the helmet system's night-vision performance capabilities, and incorporate the latest digital imaging sensor capabilities into the HMDS to improve night vision performance. The joint venture has been working on these attributes since March 2011.

In the process, VSI has modified the current magnetic receiver unit (:MRU) contained in the pilot's HMDS to detect both seat and aircraft vibration frequencies and filter them out in both the hardware and software contained in the HMDS display processor. It has already tested and proven the capabilities of the new MRU.

In an effort to enhance the night-vision performance capabilities, VSI is incorporating new digital night-vision sensors in both the fixed camera mounted in the cockpit and the helmet camera with the pilot's helmet mounted display (Toronto:HMD.TO - News). The resulting images will be sharper and more viewable at extremely low light levels.

To date, VSI has produced more than 4,500 joint helmet mounted cueing systems (:JHMCS) for the F-15, F-16 and F/A-18 aircraft. VSI is also currently under contract to deliver Night Vision Cueing and Display Systems (:NVCD) to the US Air Force and Navy, and the Fifth Generation HMDS for the F-35 Joint Strike Fighter. It also produces the Targo HMDs for multiple aviation platforms including fighters, light attack, military airlift and trainers.

This contract award demonstrates the confidence Lockheed Martin has in VSI to advance the fifth generation HMDS capabilities that are integral to the success of the F-35 program. VSI expects to deliver the enhanced HMDS beginning in the third quarter of 2013.

Based in Bethesda, Maryland, Lockheed Martin is a global security company that is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.

Rockwell Collins Inc. also retains a short-term Zacks #3 Rank (Hold), which supports our long-term Neutral recommendation on the stock.

ROCKWELL COLLINS INC (COL): Read the Full Research Report

LOCKHEED MARTIN CORP (LMT): Read the Full Research Report

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