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Orbital ATK Introduces New Company to Investors and Analysts

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Orbital ATK, Inc. (NYSE:OA) , a global leader in aerospace and defense technologies, held a conference call with investors and analysts today to introduce the new company and its three-year financial outlook to the investment community. Orbital ATK was formed as a result of the merger of Orbital Sciences Corporation and the Aerospace and Defense Groups of ATK and began combined operations last week. The company has posted the presentation slides used for today’s call, as well as an updated general presentation for investors and analysts, on its website. A transcript of today’s conference call will also be posted on the Orbital ATK web site as soon as it is available.

During the call Orbital ATK’s President and Chief Executive Officer David W. Thompson reviewed the company’s business strategy of providing its customers with innovative, reliable and affordable products across domestic and international military, civil government and commercial markets. He highlighted several factors that are expected to create additional value for both customers and shareholders: cost reductions to be achieved through vertical integration and overhead efficiencies; expanded market opportunities to be pursued due to greater systems engineering know-how and strengthened technical and industrial resources; and substantial increases in capital deployment capacity to be available to improve returns to investors.

Orbital ATK’s Chief Financial Officer Garrett E. Pierce provided a summary of the company’s adjusted unaudited pro-forma calendar year 2014 financial information in order to set a new baseline to measure future financial performance.* These results were as follows:

  • Revenues of ~$4,440 million
  • EBITDA of ~$600 million
  • EBIT ~$440 million
  • Net Income ~$250 million
  • Earnings Per Share ~$4.20

Over the next three years, Mr. Pierce said the company is targeting to achieve the following financial goals:*

  • Consolidated revenue growth of ~4-5% on a compound annual growth rate (CAGR) basis, including growth due to revenue synergies in 2016 and 2017
  • EBITDA growth of ~8-10% (CAGR)
  • Earnings per share growth of ~12-15% (CAGR)
  • Cumulative three-year free cash flow of ~$1 billion

* See non-GAAP reconciliation table below

Orbital ATK’s Chief Operating Officer Blake E. Larson reviewed the company’s organizational structure and senior management team, as well as updated progress on the merger integration and synergy capture. Mr. Larson stated the company is on track to realize its cost synergy targets of $70 to 100 million per year by 2016. He also said the company expects to achieve its $150 to $200 million annual revenue synergy target by late 2016 or early 2017.

About Orbital ATK

Orbital ATK is a global leader in aerospace and defense technologies. The company designs, builds and delivers space, defense and aviation systems for customers around the world, both as a prime contractor and merchant supplier. Its main products include launch vehicles and related propulsion systems; missile products, subsystems and defense electronics; precision weapons, armament systems and ammunition; satellites and associated space components and services; and advanced aerospace structures. Headquartered in Dulles, Virginia, Orbital ATK employs more than 12,000 people in 20 states across the U.S. and in several international locations. For more information, visit

“Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995

Certain statements in this communication may be “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Words or phrases such as “may,” “will,” “expected,” “intend,” “estimate,” “anticipate,” “believe,” “project,” or “continue,” and similar expressions are used to identify these forward-looking statements. All such forward-looking statements involve estimates and assumptions that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the results expressed in the statements. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking statements include the possibility that Orbital ATK may be unable to achieve expected synergies and operating efficiencies following the merger within the expected time-frames or at all and to successfully integrate Orbital’s operations with those of the ATK Aerospace & Defense business; the integration of Orbital’s operations with those of ATK A&D being more difficult, time-consuming or costly than expected; operating costs, customer loss and business disruption that might result from the merger; potential difficulties in retaining key employees; Orbital ATK’s ability to maintain and grow its relationship with its customers; reductions or changes in U.S. Government military or NASA spending; timing of payments and budgetary policies, including impacts of sequestration under the Budget Control Act of 2011; changes in cost and revenue estimates and/or timing of programs; the potential termination of U.S. Government contracts and the potential inability to recover termination costs; the impact of a recent Antares launch failure; costs of servicing debt, including cash requirements and interest rate fluctuations; supply, availability, and costs of raw materials and components, including commodity price fluctuations; performance of subcontractors; development of key technologies and retention of a qualified workforce; and the costs and ultimate outcome of litigation matters and other legal proceedings. Additional information concerning these and other factors can be found in Orbital ATK’s filings with the Securities and Exchange Commission, including Orbital ATK’s most recent Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and Orbital ATK’s registration statement on Form S-4. Orbital ATK assumes no obligation to update or revise publicly the information in this communication, whether as a result of new information, future events or otherwise, except as required by law.

Non-GAAP Reconciliation Table:

($ in millions)
Revenue EBITDA* EBIT* Net Income EPS
Preliminary Results (Unaudited) $4,469 $594 $479 $276 $4.65

Pro Forma Purchase Accounting

(50) (33) (0.56)
Radford Pension Adjustment (31) (31) (31) (20) (0.34)
Environmental Settlement 2 2 1 0.02
Building Impairment 9 9 6 0.10
Transaction Expenses 29 29 19 0.33
Pro Forma Results (Unaudited) $4,438 $603 $438 $249 $4.20

*All Numbers Above Are Preliminary, Unaudited and Subject to Change. EBIT = Net Income + Income Tax Provision +
Net Interest Expense. EBITDA = EBIT + Depreciation + Amortization

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