ATK Third-quarter Earnings Reach $1.26 Per Share
ATK Narrows FY06 EPS Guidance to Upper End of Range and Issues FY07 Guidance
Sales Increase 12 Percent to $770 Million
Strong Operating Cash Flow Year-to-date Reaches $145 Million
ATK Receives Authorization to Repurchase up to Five Million Shares
Minneapolis, February 2, 2006 – Alliant Techsystems (NYSE: ATK) reported third-quarter fiscal year 2006 earnings per share of $1.26 versus $1.25 a year ago. The prior year quarter included a reported one-time benefit of 8 cents related to the settlement of tax matters. Sales for the third-quarter, which ended January 1, rose to $770 million, reflecting 12 percent organic growth. Orders in the quarter were $812 million.
Earnings per share for the first nine months of the fiscal year increased 21 percent to $3.34 from $2.76 a year ago. Sales rose 15 percent to $2.3 billion versus $2.0 billion in the previous year. The company’s EBIT margin (earnings before interest and income taxes as a percent of sales) rose to 10.3 percent, up from 10.1 percent the year prior. Year-to-date operating cash rose to $145 million versus $106 million a year ago, benefiting from higher profits and the timing of compensation accrual payouts. These were partially offset by higher taxes.
Share Repurchase Authorization
Since the beginning of the current fiscal year, ATK has repurchased 1,281,000 shares of stock for $96 million under its existing authorization. The ATK Board of Directors has authorized the repurchase of up to an additional five million shares of stock at the company’s discretion. The new authorization is effective until January 31, 2008.
ATK Thiokol sales rose 12 percent to $229 million versus $204 million last year. The increase reflects additional revenue from strategic missile programs.
Ammunition Group sales increased 23 percent to $266 million from $215 million in the previous year. The increase was driven by strong small- and medium-caliber ammunition sales growth, as well as increased commercial ammunition sales.
Precision Systems Group sales rose 4 percent to $128 million from $123 million a year ago. Increased sales from advanced weapons such as the precision guided mortar munition (PGMM) and advanced anti-radiation guided missile (AARGM) were partially offset by reduced revenues from barrier systems and the planned decline in revenues related to relocating the company’s fuze operations to West Virginia. The company has now resumed normal fuze production and expects revenues to increase in the fourth quarter.
Sales in the Advanced Propulsion and Space Systems Group rose slightly to $110 million, reflecting higher revenues in missile defense programs, partially offset by lower revenues in military aircraft composite structures.
Recent business highlights:
* Initiated development of a First Stage for NASA’s next-generation Crew Launch Vehicle
* Received $43 million contract for Mk 90 rocket propellant
* Received $166 million order for small-caliber ammunition
* Completed successful preliminary design review for the Precision Guided Mortar Munition
* Achieved successful static-test firing of a second-stage Kinetic Energy Interceptor rocket motor
* Welcomed the Italian Ministry of Defense as a partner on the Advanced Anti-Radiation Guided Missile (AARGM) program
* Successfully flight-tested a missile-configured hypersonic scramjet
* Conducted a successful intercept flight-test of the U.S. Navy’s Standard Missile-3
FY06 and FY07 Guidance
With increased visibility into full-year operating results, ATK is narrowing its FY06 earnings per share guidance to a range of $4.55 to $4.58 on sales of approximately $3.1 billion. The company continues to expect to generate operating cash of approximately $240 million, and capital expenditures of approximately $70 million.
By April 1, 2006, the company will adopt new accounting rules related to expensing stock option grants as mandated by Statement of Financial Accounting Standards No. 123(R). The company currently estimates that the new standard will result in an approximate 26-cent per-share charge to FY07 earnings. Including the impact of SFAS 123(R), ATK expects FY07 earnings per share to be in the range of $4.65 to $4.80. This estimate also includes increased pension expenses of approximately $24 million. The company currently expects pension expenses to be flat to lower in years after FY07. ATK expects FY07 sales of more than $3.3 billion and operating cash in excess of $240 million. Capital expenditures are anticipated to be approximately $70 million.
ATK is a $3.1 billion advanced weapon and space systems company employing approximately 15,000 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; ATK’s access to capital markets and the costs thereof; actual pension asset returns and assumptions regarding future returns, discount rates and service costs; 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.
Third-quarter financials (pdf)
Webcast Information: ATK will webcast its investor conference call on FY06 third-quarter results and the financial outlook at 10:30 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 2057442.
- Contact Information
- Bryce Hallowell
- ATK Corporate Communications
- Alliant Techsystems
- Contact via E-mail
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