EX-99.1 2 a05-19300_1ex99d1.htm EXHIBIT 99

Exhibit 99.1

 

 

 

News Release

 

Corporate Communications

 

Phone: 952-351-3087

 

 

MN01-1030

 

Fax: 952-351-3009

 

 

5050 Lincoln Drive

 

 

 

 

Edina, MN 55436

 

 

For Immediate Release

 

Media Contact:

 

Investor Contact:

 

 

 

Bryce Hallowell

 

Steve Wold

Phone: 952-351-3087

 

Phone: 952-351-3056

E-mail: bryce.hallowell@atk.com

 

E-mail: steve.wold@atk.com

 

ATK SECOND-QUARTER EARNINGS RISE 37 PERCENT TO $1.07 PER SHARE

 

SALES INCREASE 15 PERCENT TO $772 MILLION ON STRONG DEMAND FOR AMMUNITION, ROCKET MOTORS, PRECISION MUNITIONS

 

ORDERS UP 20 PERCENT OVER PRIOR YEAR PERIOD

 

STRONG OPERATING CASH FLOW HITS $109 MILLION

 

ATK RAISES CASH FLOW GUIDANCE FOR FY06

 

CURRENT YEAR SHARE REPURCHASES TOTAL APPROXIMATELY 950,000 SHARES

 

Minneapolis, November 2, 2005 – Alliant Techsystems (NYSE: ATK), reported a 37 percent increase in earnings per share for the second-quarter of fiscal year 2006.  Earnings per share were $1.07 versus 78 cents a year ago.

 

Sales for the second-quarter, which ended October 2, rose 15 percent to $772 million from $673 million a year ago.  Organic sales grew 11 percent.  Operating cash for the second quarter was $109 million versus $54 million a year ago.  Current year cash flow benefited from higher profits and improved working capital management.

 

Other second-quarter performance highlights:

 

•                  The company’s EBIT margin (earnings before interest and income taxes as a percent of sales) rose to 10.1 percent versus 9.1 percent a year ago, reflecting improved operating results across numerous business lines.

 


 

•                  Orders increased 20 percent to $656 million versus $548 million a year ago.

 

Earnings per share for the first six months of the fiscal year increased 36 percent to $2.06 from $1.51 a year ago.  Sales rose 16 percent to $1.53 billion versus $1.32 billion in the previous year.  Year-to-date operating cash is $116 million versus $28 million a year ago.

 

Since the beginning of the fiscal year, ATK has repurchased approximately 950,000 shares of its stock.  ATK is authorized to repurchase an additional 350,000 shares.

 

Operations Review

 

ATK Thiokol sales rose 15 percent to $243 million versus $211 million last year.  The increase reflects additional revenue from the Minuteman III propulsion replacement program, as well as increased demand for various flares and decoys used in support of ongoing operations in Iraq and Afghanistan.

 

Ammunition Group sales increased 12 percent to $252 million from $225 million in the previous year.  The growth reflects demand for small and medium-caliber ammunition.  To meet additional demand for small-caliber ammunition, ATK and the U.S. Army have implemented a modernization effort of the Lake City Army Ammunition Plant designed to increase its capacity to 1.5 billion rounds annually.  The company remains on track to complete the capacity expansion by March 2006.

 

Precision Systems Group sales rose 4 percent to $124 million from $119 million a year ago.  Advanced weapons such as the precision guided mortar munition (PGMM) and advanced anti-radiation guided missile (AARGM) contributed to the growth trend.  Both programs remain on schedule and on cost.

 

Sales in the Advanced Propulsion and Space Systems Group rose 35 percent to $116 million from $86 million a year ago.  The growth reflects new revenues from the acquisition of the PSI Group and increased sales in missile defense programs.

 

Recent business highlights:

 

•                  NASA’s September announcement to baseline ATK’s reusable solid rocket motors as the foundation for next-generation space exploration initiatives

 

•                  The consolidation of all fuze operations into ATK’s manufacturing center of excellence in West Virginia

 


 

•                  The signing of a strategic alliance with Nitrochemie to develop the North American market for advanced energetics

 

•                  $15 million contract to conduct additional air-breathing hypersonic research for NASA

 

•                  A contract to supply the British Royal Navy Type 23 Frigates with Bushmaster Mk44 gun systems

 

•                  Successful initial qualification of an Orbus 1A rocket motor for missile defense

 

•                  The 100th successful launch of a Delta II rocket using ATK GEM motors

 

•                  ATK’s Scathe View infrared and electro-optical sensor technology was used extensively by Air National Guard units to conduct search and rescue mission in the aftermath of Hurricane Katrina – it received very positive reviews from the air crews

 

FY06 Guidance

 

ATK continues to expect FY06 earnings per share in the range of $4.48 to $4.58 on sales of approximately $3.1 billion.  Cash flow from operations is expected to increase to approximately $240 million, up from previous guidance of $230 million.  The company expects capital expenditures to remain steady at approximately $70 million.

 

ATK is a $3.1 billion advanced weapon and space systems company employing approximately 14,500 people in 23 states.   News and information can be found on the Internet at www.atk.com.

 

Certain information discussed in this press release constitutes forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.  Although ATK believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved.  Forward-looking information is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Among those factors are: changes in governmental spending, budgetary policies and product sourcing strategies; the company’s competitive environment; the terms and timing of awards and contracts; and economic conditions.  ATK undertakes no obligation to update any forward-looking statements. For further information on factors that could impact ATK, and statements contained herein, reference should be made to ATK’s filings with the Securities and Exchange Commission, including quarterly reports on Form 10-Q, current reports on Form 8-K, and ATK’s Annual Report on Form 10-K for the fiscal year ended March 31, 2005.

 


 

Webcast Information:  ATK will webcast its investor conference call on FY06 second-quarter results and the financial outlook at 10:00 a.m. Eastern Time today.  The live audio webcast will be available on the Investor Relations page of ATK’s web site at www.atk.com.  Information about downloading free Windows Media Player software, which is required to access the webcast, is available on the website.  For those who cannot participate in the live webcast, a telephone recording of the conference call will be available for one month after the call.  The telephone number is (719) 457-0820, and the confirmation code is 1096146.

 

#          #          #

 


 

ALLIANT TECHSYSTEMS INC.

CONSOLIDATED INCOME STATEMENTS

 

 

 

QUARTERS ENDED

 

SIX MONTHS ENDED

 

(In thousands except per share data)

 

October 2,
2005

 

October 3,
2004

 

October 2,
2005

 

October 3,
2004

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

772,092

 

$

673,050

 

$

1,529,084

 

$

1,317,445

 

Cost of sales

 

621,647

 

552,159

 

1,245,236

 

1,082,933

 

Gross profit

 

150,445

 

120,891

 

283,848

 

234,512

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development

 

14,196

 

7,698

 

24,077

 

13,229

 

Selling

 

19,309

 

16,085

 

37,285

 

35,262

 

General and administrative

 

38,676

 

35,662

 

74,041

 

66,236

 

Total operating expenses

 

72,181

 

59,445

 

135,403

 

114,727

 

Income before interest, income taxes, and minority interest

 

78,264

 

61,446

 

148,445

 

119,785

 

Interest expense

 

(17,044

)

(15,549

)

(34,514

)

(30,532

)

Interest income

 

241

 

388

 

368

 

483

 

Income before income taxes and minority interest

 

61,461

 

46,285

 

114,299

 

89,736

 

Income tax provision

 

21,207

 

16,369

 

36,716

 

32,120

 

Income before minority interest

 

40,254

 

29,916

 

77,583

 

57,616

 

Minority interest, net of income taxes

 

102

 

18

 

211

 

144

 

Net income

 

$

40,152

 

$

29,898

 

$

77,372

 

$

57,472

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

1.08

 

$

0.80

 

$

2.09

 

$

1.53

 

Diluted

 

1.07

 

0.78

 

2.06

 

1.51

 

 

 

 

 

 

 

 

 

 

 

Average number of common shares

 

37,027

 

37,590

 

37,026

 

37,507

 

Average number of common and dilutive shares

 

37,646

 

38,094

 

37,625

 

38,076

 

 


 

ALLIANT TECHSYSTEMS INC.

CONSOLIDATED BALANCE SHEETS

 

(In thousands except share data)

 

October 2, 2005

 

March 31, 2005

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

37,820

 

$

12,772

 

Net receivables

 

608,318

 

626,711

 

Net inventories

 

142,644

 

125,190

 

Deferred income tax asset

 

29,066

 

30,754

 

Other current assets

 

35,711

 

37,987

 

Total current assets

 

853,559

 

833,414

 

Net property, plant, and equipment

 

441,477

 

456,310

 

Goodwill

 

1,167,649

 

1,154,406

 

Prepaid and intangible pension assets

 

364,284

 

362,158

 

Deferred charges and other non-current assets

 

189,501

 

209,522

 

Total assets

 

$

3,016,470

 

$

3,015,810

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Cash overdrafts

 

 

 

$

6,092

 

Current portion of long-term debt

 

$

27,000

 

2,692

 

Accounts payable

 

86,994

 

147,286

 

Contract advances and allowances

 

44,961

 

31,717

 

Accrued compensation

 

106,574

 

107,509

 

Accrued income taxes

 

36,075

 

—

 

Other accrued liabilities

 

140,707

 

136,444

 

Total current liabilities

 

442,311

 

431,740

 

Long-term debt

 

1,099,727

 

1,131,353

 

Deferred income tax liability

 

9,442

 

8,279

 

Postretirement and postemployment benefits liability

 

202,415

 

209,893

 

Accrued pension liability

 

409,042

 

409,042

 

Other long-term liabilities

 

137,999

 

139,144

 

Total liabilities

 

2,300,936

 

2,329,451

 

Commitments and contingencies

 

 

 

 

 

Common stock - $.01 par value

 

 

 

 

 

Authorized - 90,000,000 shares

 

 

 

 

 

Issued and outstanding 36,646,605 shares at  October 2, 2005 and 37,248,241 at March 31, 2005

 

416

 

416

 

Additional paid-in-capital

 

444,130

 

449,883

 

Retained earnings

 

852,011

 

774,639

 

Unearned compensation

 

(2,136

)

(1,674

)

Accumulated other comprehensive loss

 

(253,148

)

(259,590

)

Common stock in treasury, at cost, 4,910,493 shares held at

 

 

 

 

 

October 2, 2005 and 4,308,857 at March 31, 2005

 

(325,739

)

(277,315

)

Total stockholders’ equity

 

715,534

 

686,359

 

Total liabilities and stockholders’ equity

 

$

3,016,470

 

$

3,015,810

 

 


 

ALLIANT TECHSYSTEMS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

SIX MONTHS ENDED

 

(In thousands)

 

October 2, 2005

 

October 3, 2004

 

 

 

 

 

 

 

Operating activities

 

 

 

 

 

Net income

 

$

77,372

 

$

57,472

 

Adjustments to net income to arrive at cash provided by operating activities:

 

 

 

 

 

Depreciation

 

34,137

 

32,949

 

Amortization of intangible assets and unearned compensation

 

6,962

 

4,667

 

Deferred income tax

 

6,762

 

(1,604

)

Loss on disposal of property

 

266

 

2,102

 

Minority interest, net of income taxes

 

211

 

144

 

Changes in assets and liabilities:

 

 

 

 

 

Net receivables

 

16,814

 

(65,570

)

Net inventories

 

(20,227

)

13,411

 

Accounts payable

 

(60,292

)

(40,332

)

Contract advances and allowances

 

13,244

 

(12,275

)

Accrued compensation

 

900

 

(34,018

)

Accrued income taxes

 

36,318

 

42,327

 

Accrued environmental

 

(1,174

)

138

 

Pension and postretirement benefits

 

(9,604

)

10,858

 

Other assets and liabilities

 

14,662

 

17,582

 

Cash provided by operating activities

 

116,351

 

27,851

 

Investing activities

 

 

 

 

 

Capital expenditures

 

(20,430

)

(24,603

)

Acquisition of business

 

—

 

(164,198

)

Proceeds from the disposition of property, plant, and equipment

 

1,371

 

289

 

Cash used for investing activities

 

(19,059

)

(188,512

)

Financing activities

 

 

 

 

 

Change in cash overdrafts

 

(6,092

)

—

 

Payments made on bank debt

 

(280,053

)

(2,000

)

Proceeds from issuance of long-term debt

 

270,000

 

200,000

 

Payments made for debt issue costs

 

(699

)

(5,567

)

Net purchase of treasury shares

 

(69,908

)

(25,988

)

Proceeds from employee stock compensation plans

 

14,508

 

18,333

 

Cash (used for) provided by financing activities

 

(72,244

)

184,778

 

Increase in cash and cash equivalents

 

25,048

 

24,117

 

Cash and cash equivalents - beginning of period

 

12,772

 

24,306

 

Cash and cash equivalents - end of period

 

$

37,820

 

$

48,423

 

 


 

Net Sales and Income before Interest, Income Taxes, and Minority Interest by Segment

(Dollars in Millions)

 

Net Sales:

 

 

 

Quarters Ended

 

Six Months Ended

 

 

 

Oct 2, 2005

 

Oct 3, 2004

 

$ Change

 

%
Change

 

Oct 2, 2005

 

Oct 3, 2004

 

$ Change

 

%
Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ATK Thiokol

 

$

242.8

 

$

211.0

 

$

31.8

 

15.1

%

$

473.5

 

$

419.0

 

$

54.5

 

13.0

%

Ammunition

 

252.0

 

224.5

 

27.5

 

12.2

%

499.0

 

424.1

 

74.9

 

17.7

%

Precision Systems

 

123.7

 

118.6

 

5.1

 

4.3

%

251.3

 

230.6

 

20.7

 

9.0

%

Advanced Propulsion and Space Systems

 

116.0

 

85.7

 

30.3

 

35.4

%

226.7

 

163.6

 

63.1

 

38.6

%

Other

 

37.6

 

33.3

 

4.3

 

12.9

%

78.6

 

80.1

 

(1.5

)

(1.9

)%

Total sales

 

$

772.1

 

$

673.1

 

$

99.0

 

14.7

%

$

1,529.1

 

$

1,317.4

 

$

211.7

 

16.1

%

 

Income before Interest, Income Taxes, and Minority Interest:

 

 

 

Quarters Ended

 

Six Months Ended

 

 

 

Oct 2,
2005

 

As a %
of Sales

 

Oct 3,
2004

 

As a %
of Sales

 

Oct 2,
2005

 

As a %
of Sales

 

Oct 3,
2004

 

As a %
of Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ATK Thiokol

 

$

34.5

 

14.0

%

$

27.4

 

12.9

%

$

66.6

 

13.9

%

$

60.3

 

14.3

%

Ammunition

 

23.9

 

9.4

%

21.6

 

9.5

%

44.4

 

8.8

%

34.4

 

8.0

%

Precision Systems

 

10.1

 

7.6

%

11.0

 

8.9

%

19.5

 

7.3

%

22.4

 

9.3

%

Advanced Propulsion
and Space Systems

 

13.1

 

9.8

%

8.2

 

8.6

%

25.0

 

9.7

%

9.7

 

5.3

%

Corporate and other

 

(3.3

)

 

 

(6.8

)

 

 

(7.1

)

 

 

(7.0

)

 

 

Total

 

$

78.3

 

10.1

%

$

61.4

 

9.1

%

$

148.4

 

9.7

%

$

119.8

 

9.1

%