Alliant's Sales and Earnings Increase
Minneapolis, Aug. 4, 1999 - Alliant Techsystems (NYSE: ATK) said higher sales, improved operating margins, and fewer shares outstanding boosted first-quarter earnings per share to $1.39, an increase of 15 percent over $1.21 a year ago.
Earnings before interest and income taxes (EBIT) were $28.3 million in the first quarter, up 18 percent from $24.0 million a year ago. The EBIT margin rate rose to 10.4 percent from 9.3 percent last year, benefiting from increased sales and lower operating expenses. Net earnings for the quarter were $14.6 million versus $15.8 million a year ago.
First-quarter sales rose 6 percent to $273 million from $256 million last year, driven by higher volume from solid propulsion rocket motors and anti-tank munition systems.
Paul David Miller, chairman and chief executive officer, said ATK's first-quarter results represent a strong start to fiscal year 2000.
"Our businesses turned in another quarter of solid performance," said Miller. "We are particularly pleased with the strong improvement in our operating margin rate, which topped 10 percent for the first time in the company's history."
Orders booked during the first quarter totaled $289 million. Backlog at the end of the quarter was $2.5 billion or 27 months of equivalent sales, up from $2.4 billion or 26 months of equivalent sales in the same period a year ago.
Business Segment Results
Aerospace sales in the first quarter rose 30 percent to $118 million from $91 million last year, reflecting higher volume from solid rocket motors for the Delta and Titan IV B launch vehicles, and the National Missile Defense interceptor. First-quarter sales from Defense Systems were $50 million, up 11 percent over $45 million a year ago. The gain resulted from higher sales of anti-tank munition systems. Sales from Conventional Munitions in the first quarter were $107 million, down from $121 million last year primarily due to lower volume from tank ammunition.
Recent business highlights include:
- The award of a contract to supply the U.S. Army's requirements for small-caliber ammunition, which is expected to generate total sales of approximately $1 billion over the next 10 years. Annual revenues during the period will average approximately $100 million starting in January 2000.
- Selection of the General Dynamics Ordnance Systems team, which includes ATK, to continue production of the U.S. Army's HYDRA-70 rocket system. ATK's portion of the firm fixed-price contract is expected to result in sales of $400 million to $450 million through 2006 if maximum quantities are procured.
- Delivery of the first composite liquid hydrogen fuel tank for the X-33 Advanced Technology Demonstrator to NASA for testing. The tank was fabricated by Alliant Aerospace Company.
- Certification of Alliant Aerospace Company as a Boeing Gold Preferred Supplier, placing ATK among the top one percent of all Boeing suppliers.
- The award of two contracts to Alliant Integrated Defense Company for development of secure electronics subsystems used in GPS receivers.
- The award of two contracts to Alliant Precision Fuze Company for production of electronic bomb fuzes for two U.S. allies.
Cash Flow Performance
First-quarter cash flow as indicated by earnings before interest, taxes, depreciation, and amortization (EBITDA) was $41.5 million or $3.96 per share, compared with $35.2 million or $2.70 per share last year. Free cash flow (cash from operations less capital expenditures) used during the quarter was $(47.4) million, compared with $(17.6) million a year ago. The increase reflects primarily the timing of program receipts and payments. ATK typically uses cash during the first half of its fiscal year and generates cash during the second half of the year.
During the first quarter, ATK repurchased 87,000 shares of its common stock on the open market. In fiscal year 1999, the company repurchased approximately three million shares of its common stock.
The forecasts, projections, expectations, and opportunities for earnings per share, EBIT margins, cash flow, share repurchases, program timetables, and business growth through the exercise of production options included in this news release are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from anticipated results, including changes in governmental spending and budgetary policies, economic conditions, the company's competitive environment, the timing of awards and contracts, the outcome of contingencies, including litigation and environmental remediation, and program performance, in addition to other factors not listed.
Alliant Techsystems is a $1.1 billion aerospace and defense company with approximately 6,000 employees. Headquartered in Hopkins, Minn., the company's operating segments are Conventional Munitions, Aerospace, and Defense Systems. ATK news and information can be found on the Internet at www.atk.com.