Orbital ATK Introduces New Company to Investors and Analysts
February 19 2015 - 9:00AM
Business Wire
Senior Management Discusses Business
Strategy and Market Trends
Calendar Year 2014 Pro-Forma Financial
Information and Three-Year Outlook for Revenue and Earnings Growth
Provided
Company Expected to Generate Approximately
$1 Billion of Free Cash Flow in 2015-2017
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
www.orbitalatk.com.
"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 Amortization
- - (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
Orbital ATK, Inc.Barron Beneski, 703-406-5528Public and
Investor Relationsbarron.beneski@orbitalatk.com
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