Alvarez and Marsal

Publish Date

Jun 08, 2021

Pandemic Impacts on Mid-Cap A&D Sector Liquidity Start to Emerge

James Marceau, Managing Director | Luigi Peluso, Managing Director

Service / Industry: Aerospace, Defense & Aviation

The COVID-19 pandemic has clearly had a significant impact on the Aerospace & Defense sector, but as annual results continue to be released, data suggests that while some of the larger firms are managing to ride out the storm, many of the smaller firms are heading for a period of turbulence.

Basis of the Analysis

As more and more firms are publishing results that show the impact of COVID-19 throughout 2020, some clear indicators on the health of the sector are starting to emerge. We examined recently published data on mid-cap Aerospace & Defense firms in the U.S. and Canada1 to determine the impact on cash-conversion metrics year-over-year. While the data indicated an expected deterioration in key metrics, deeper analysis revealed a wide variety in performance, with a pronounced impact on the smaller organizations and some surprising performance changes among some of the larger players in the sector.

Performance by Revenue Grouping

The primary sub-level of analysis performed was on the different revenue groupings within the sector. Dividing companies into those that had current year revenues of $0–$500 million, $500 million–$1 billion, $1–$2.5 billion and $2.5–$5 billion, we compared recent year-over-year data in DSO, DIO and DPO to determine what changes were taking place, what the potential root causes could be and what actions could be expected to follow.


James Marceau

James Marceau is a Managing Director with Alvarez & Marsal Private Equity Performance Improvement in Boston. He is a senior leader in the firm’s Global Aerospace, Defense & Aviation practice. Mr. Marceau has a history of leading talented teams of engineers, data scientists, and financial and operations executives to deliver corporate and mission results.

Luigi Peluso

Luigi “Lou” Peluso is a Managing Director with Alvarez & Marsal Private Equity Performance Improvement in New York.