-- Company Reports Strong Margins, Earnings,
Cash Flow and New Orders --
-- Form 10-Q Filing to Be Delayed Due to
Ongoing Review of Defense Contract --
Orbital ATK, Inc. (NYSE:OA), a global leader in aerospace and
defense technologies, today announced preliminary unaudited
financial results for the second quarter ended July 3, 2016. The
company also announced that it will delay the filing of its
Quarterly Report on Form 10-Q for the second quarter due to an
ongoing review of accounting matters related to a Defense Systems
Group contract. All amounts in this release are preliminary and
subject to revision due to the company’s ongoing review related to
the restatement reported today on SEC Form 8-K. The included
results of the second quarter of 2015 are preliminary estimates of
the restated results, and the included results of the second
quarter of 2016 include the preliminary estimated impact of the
restatement. See “Recently Announced Restatement” below for more
information.
Orbital ATK reported revenues of $1,052 million for the second
quarter of 2016, compared to $1,077 million in the comparable
period of 2015. GAAP income from continuing operations, before
interest, income taxes and non-controlling interest (which the
company refers to as operating income) was $115.7 million, or 11.0%
operating margin, in the second quarter of 2016 compared to $96.8
million and 9.0%, respectively, in the comparable period of 2015.
The company reported GAAP earnings per diluted share of $1.23 in
the second quarter of 2016 compared to $0.92 in the comparable
period of 2015. Net cash from operating activities was $143.3
million in the second quarter of 2016.
The company also reported the following non-GAAP adjusted
results.* Adjusted operating income and operating margin were
$125.2 million and 11.9%, respectively, in the second quarter of
2016, compared to $102.6 million and 9.5%, respectively, in the
same period of 2015. Adjusted diluted earnings per share in the
quarter were $1.35, compared to $0.98 in the comparable period of
2015.
Free cash flow, defined as net cash from operating activities
minus capital expenditures, was $107.2 million in the second
quarter of 2016. Adjusted free cash flow, which excludes certain
merger-related cash expenses totaling $3.5 million, was $110.7
million in the quarter.
“Orbital ATK’s second quarter was characterized by solid
operational performance, excellent new orders, and strong earnings
and cash flow,” said David W. Thompson, Orbital ATK’s President and
Chief Executive Officer. “While the company experienced revenue
softness in certain market areas, especially in our commercial
satellite product line, we exceeded our initial profit margin
expectations, enabling us to maintain our outlook for 2016
earnings. In addition, we continued to implement a disciplined cash
deployment strategy that includes a mix of dividends, share
repurchases and investments in long-term growth initiatives that
will benefit the company in the years ahead.”
___________
* The adjusted financial results and free cash flow contained in
this press release are non-GAAP financial measures. Please refer to
the reconciliation tables contained in the “Disclosure and
Reconciliation of Non-GAAP Financial Measures” section of this
press release for more details.
Consolidated Financial Highlights
GAAP Results
Quarter Ended ($ in millions,
except per share data) July 3, 2016
July 5, 2015(restated)
Revenues $1,052 $1,077 Operating Income $115.7 $96.8
Net Income $72.1 $54.8 Diluted Earnings Per Share
$1.23 $0.92
Revenues decreased $25 million, or 2.3%, in the second quarter
of 2016 compared to revenues in the comparable period in 2015, due
to a $21 million decrease in Flight Systems Group (FSG), a $32
million decrease in Space Systems Group (SSG), and a $7 million
increase in corporate eliminations partially offset by a $35
million increase in Defense Systems Group (DSG).
Operating income increased $18.9 million, or 19.5%, in the
second quarter of 2016 compared to operating income in the same
period in 2015, due to a $2.9 million increase in FSG, a $2.4
million increase in SSG and a $4.6 million increase in DSG. There
was also a $9.0 million increase in corporate adjustments primarily
due to a favorable Financial Accounting Standards (FAS)/Cost
Accounting Standards (CAS) pension difference.
Net income and earnings per share reflected an income tax rate
of 27.7% for the second quarter of 2016 compared to 32.1% for the
same period in 2015. The tax rate in the second quarter of 2016
benefited from the permanent extension of the federal research and
development (R&D) tax credit that occurred in late 2015 and
other favorable adjustments.
Adjusted Non-GAAP Results
All adjusted financial measures discussed below are non-GAAP
adjusted financial results from continuing operations. See the
reconciliation tables in the “Disclosure of Non-GAAP Financial
Measures” section for details.
Quarter Ended ($ in millions,
except per share data) July 3, 2016
July 5, 2015(restated)
Revenues $1,052 $1,077 Adjusted Operating Income
$125.2 $102.6 Adjusted Net Income $79.0 $58.8 Adjusted Diluted
Earnings Per Share $1.35 $0.98
Adjusted operating income increased $22.6 million, or 22.0%, in
the second quarter of 2016 compared to the same period in 2015,
driven by a $2.9 million increase in FSG, a $3.3 million increase
in SSG and a $2.0 million increase in DSG. There was also a $14.4
million increase in corporate adjustments due mainly to a favorable
FAS/CAS pension difference.
“Orbital ATK’s financial performance in the second quarter
reflects solid profit margin and earnings per share results. The
company also generated over $110 million in free cash flow in the
second quarter,” said Garrett E. Pierce, the company’s Chief
Financial Officer. "As we indicated in our Form 8-K filed with the
SEC today, management is reviewing the prior accounting for a
long-term contract to produce small-caliber ammunition for the U.S.
Army that was awarded to Alliant Techsystems Inc. (ATK) in 2012. We
currently expect to restate financial results for the fiscal year
ended March 31, 2015 and subsequent periods to account for this
program as a loss contract," he added.
Recently Announced Restatement
Orbital ATK reported today on SEC Form 8-K that it expects to
restate its financial statements for the fiscal year ended March
31, 2015 (“fiscal 2015”), the nine-month transition period ended
December 31, 2015 (“2015 transition period”), the quarters in
fiscal 2015 and the 2015 transition period, and the quarter ended
April 3, 2016 (the “Restated Periods”). The restatement is not
expected to have a material impact on the company’s operating cash
flow, cash balances or backlog as of and for the Restated
Periods.
The misstatements which the company has identified relate
primarily to its $2.3 billion long-term contract (the “Contract”)
with the U.S. Army to manufacture and supply small caliber
ammunition at the U.S. Army’s Lake City Army Ammunition Plant. The
Contract is managed by the Small Caliber Systems Division within
the Defense Systems Group.
After considering the misstatements described below, the company
believes that the Contract will result in a net loss over its
10-year term. Under generally accepted accounting principles, the
company is required to record the entire anticipated forward loss
provision for a contract in the period in which the loss becomes
evident. The company believes that a forward loss provision should
have been recorded for the Contract in fiscal 2015, which was the
first year of large-scale production under the Contract.
The company estimates that this forward loss provision will
reduce previously reported pre-tax operating income by
approximately $400 million to $450 million, after-tax net income by
approximately $250 million to $280 million, and the applicable
balance sheet accounts including retained earnings by approximately
$250 million to $280 million. These adjustments represent the
company’s current estimate of the entire anticipated forward loss
for the full 10-year term of the Contract. The misstatements also
resulted in revenues being overstated by $100 million to $150
million, primarily in fiscal 2015. Based on the information
currently available, management believes that the primary impact of
the restatement is in fiscal 2015, but there are also related
changes necessary in periods subsequent to fiscal 2015. The
company’s evaluation of the misstatements is ongoing and,
accordingly, the determination as to which fiscal period the
forward loss provision and related effects should have been
recorded is preliminary and could change. The company continues to
evaluate whether periods prior to fiscal 2015 are materially
misstated and whether a portion of the loss should be treated as a
change in estimate in the quarterly period ended July 3, 2016.
Please refer to the tables at the end of this release which
present the preliminary estimated restated income statement for the
second quarter of 2015.
As a result of the restatement and the ongoing review, all
adjustments and amounts and time periods presented in this press
release are preliminary and subject to revision.
Segment Results
Orbital ATK conducts its operations in three business segments:
Flight Systems Group, Defense Systems Group and Space Systems
Group. Each of these groups in turn consists of several
product-line divisions. Segment operating results include pension
expense recoverable under U.S. Government contracts as determined
in accordance with government Cost Accounting Standards. The
difference between pension expense recorded in accordance with GAAP
Financial Accounting Standards and pension costs recorded in
accordance with CAS is reported at the corporate level. The
amortization of intangible assets recorded in connection with the
merger of Orbital and ATK is also reported at the corporate
level.
Flight Systems Group:
GAAP Results
Quarter Ended ($ in millions)
July 3, 2016
July 5, 2015(restated)
Revenues $370 $391 Operating Income $54.4 $51.5
Operating Margin 14.7% 13.1%
FSG revenues for the second quarter of 2016 decreased $21
million, or 5.4%. Operating income increased $2.9 million, or 5.6%.
The changes were due mainly to lower revenues and higher margins in
the Launch Vehicles Division.
Adjusted Non-GAAP Results
Quarter Ended ($ in millions)
July 3, 2016
July 5, 2015(restated)
Revenues $370 $391 Adjusted Operating Income $54.4
$51.5 Adjusted Operating Margin 14.7%
13.1%
FSG adjusted operating income increased $2.9 million, or 5.6%.
The changes were due mainly to higher margins in the Launch
Vehicles Division.
Defense Systems Group:
GAAP Results
Quarter Ended ($ in millions)
July 3, 2016
July 5, 2015(restated)
Revenues $441 $406 Operating Income $35.5 $30.9
Operating Margin 8.1% 7.6%
DSG revenues for the second quarter of 2016 increased $35
million, or 8.6%, while operating income increased $4.6 million, or
14.9%, mainly due to higher revenues in the Defense Electronics
Division and Missile Products Division, partially offset by lower
Small Caliber Systems Division revenues and margins.
Adjusted Non-GAAP Results
Quarter Ended ($ in millions)
July 3, 2016
July 5, 2015(restated)
Revenues $441 $406 Adjusted Operating Income $38.2
$36.2 Adjusted Operating Margin 8.7%
8.9%
DSG adjusted operating income increased $2.0 million, or 5.5%,
mainly due to higher revenues in the Defense Electronics Division
and Missile Products Division, partially offset by lower Small
Caliber Systems Division revenues and margins.
Space Systems Group:
GAAP Results
Quarter Ended ($ in millions)
July 3, 2016
July 5, 2015(restated)
Revenues $265 $297 Operating Income $32.2 $29.8
Operating Margin 12.2% 10.0%
SSG revenues for the second quarter of 2016 decreased $32
million, or 10.8% mainly due to lower revenues in the Satellite
Systems Division, while operating income increased $2.4 million, or
8.1%, primarily due to higher margins in the Advanced Programs
Division.
Adjusted Non-GAAP Results
Quarter Ended ($ in millions)
July 3, 2016
July 5, 2015(restated)
Revenues $265 $297 Adjusted Operating Income $32.9
$29.8 Adjusted Operating Margin 12.4%
10.0%
SSG adjusted operating income increased $3.1 million, or 10.4%,
mainly due to higher
margins in the Advanced Programs Division.
Operating Cash Flow, Free Cash Flow and Capital Allocation
Activities
Cash generated by operating activities totaled $143.3 million,
while capital expenditures totaled $36.1 million in the quarter.
Free cash flow in the second quarter of 2016 was $107.2 million.
Adjusted free cash flow was $110.7 million which excluded $3.5
million of cash payments associated with merger-related activities
(see non-GAAP reconciliation table below for details).
The company repurchased approximately $18 million of its common
stock and also paid dividends of approximately $17 million during
the second quarter of 2016, returning a total of about $35 million
to shareholders in the period. The company reduced outstanding debt
by $85 million in the quarter as well. For the first six months of
2016, Orbital ATK repurchased about $45 million of its shares and
paid dividends of $35 million, returning a total of $80 million to
shareholders.
Operational Highlights
Orbital ATK’s strong operational execution led to the
achievement of numerous milestones in the quarter. These included
the following important events:
In the Flight Systems Group, the company completed two major
ground tests of launch vehicle propulsion systems and launched
several missile defense targets during the second quarter. In May,
Orbital ATK successfully completed a 30-second on-pad “hot-fire” of
the Antares rocket that tested the vehicle’s modified first stage
core and two liquid-fuel RD-181 engines. In June, at the company’s
Promontory, Utah facilities, Orbital ATK successfully completed the
final ground test of the world’s largest solid rocket booster that
will be used with NASA’s Space Launch System. Also in the quarter,
Orbital ATK launched a medium-range target rocket in support of a
missile defense test and three short-range Coyote target missiles
for the U.S. Navy. The company also supported two United Launch
Alliance missions with propulsion systems and composite structures
and reached a long-term production milestone by completing its
500th large-scale launch vehicle composite structure during the
quarter.
In the Defense Systems Group, the company delivered about 6,000
tactical rocket motors and warheads during the quarter and produced
approximately 375 million rounds of small-, medium- and
large-caliber ammunition for domestic and international customers.
Orbital ATK also supported two successful flight tests for the
Missile Defense Agency’s Standard Missile-3 using the company’s
enhanced third stage rocket motor. In addition, the company
achieved production milestones on several important weapons
programs, including the transition to full-rate production of
approximately 10,000 annual units for its Precision Guidance Kit
and the first deliveries of the alternate warhead for the U.S.
Army’s Guided Multiple Launch Rocket System.
In the Space Systems Group, second quarter operations were
highlighted by the successful completion in June of the OA-6 cargo
logistics mission for NASA, which delivered a record amount of
pressurized cargo to the space station and completed post-departure
scientific experiments. Earlier in the quarter, Orbital ATK
deployed, checked-out and completed handover of the Thaicom 8
commercial communications satellite to the customer. The company
also launched two suborbital research rockets, completed two high
altitude scientific balloon missions, and delivered numerous
satellite components for Orbital ATK spacecraft and other external
customers. Finally, the company-built Dawn spacecraft completed its
historic nine-year mission to the main asteroid belt during which
it returned never-before-seen images and other data about two
near-planet sized bodies, Ceres and Vesta.
“In the second quarter, Orbital ATK successfully carried out a
number of high-profile operational events, including critical tests
of our Antares rocket and NASA’s Space Launch System, as well as
the deployment of a new communications satellite, three successful
missile defense launches, and production step-ups on several
defense programs,” said Chief Operating Officer Blake E. Larson.
“Our operational execution on key programs across all three
business groups remains strong as a result of the hard work and
attention to detail by our program and technical teams.”
New Business Summary
In the second quarter of 2016, Orbital ATK recorded
approximately $1,590 million in new firm and option contract
bookings. In addition, the company received approximately $255
million in option exercises under existing contracts. As of July 3,
2016, the company’s firm backlog was approximately $8.48 billion,
up 1% compared to a year ago, and its total backlog (including
options, indefinite quantity contracts and undefinitized orders)
was approximately $15.17 billion, 25% higher than this time last
year.
2016 Financial Guidance
The company lowered its annual revenue guidance to $4,450-$4,500
million, increased its guidance for adjusted operating profit
margins to 11.5% to 12.0%, and increased the lower end of its
guidance for adjusted diluted earnings per share. The company also
updated the range of its free cash flow guidance to $225-$275
million. Please see the reconciliation table in the “Disclosure of
Non-GAAP Financial Measures” section below for details concerning
adjustments to the corresponding GAAP items.
2016 Guidance
GAAP Guidance Adjustments
Adjusted Guidance
PreviousGuidance
Revenues ($ millions) $4,450 - $4,500
$0 $4,450 - $4,500 $4,575 -
$4,650 Operating Income Margin 11.0% - 11.5%
0.5% 11.5% - 12.0% 11.0%
- 11.5% Free Cash Flow ($ millions) N/A
N/A $225 - $275 $275 - $325
Diluted Earnings Per Share $5.05 - $5.25
$0.25 $5.30 - $5.50 $5.25
- $5.50
Orbital ATK currently expects an effective tax rate of
approximately 28% for the year and interest expense of
approximately $70 million, which includes approximately $8 million
due to non-cash interest related to certain adjustments required in
purchase accounting. Pension funding is expected to be
approximately $40 million and capital expenditures are projected to
be approximately $200 million for the year. Diluted weighted
average shares outstanding are expected to be approximately 58
million on the basis of continued repurchase activity in 2016. The
FAS/CAS favorable pension adjustment is expected to be
approximately $80 million for the year.
Conference Call Information
Investors can listen to a live audio webcast of the conference
call with analysts that Orbital ATK will host at 9:00 a.m. (EST) on
August 10, 2016. To listen to the call, visit the company’s website
at www.orbitalatk.com/investors. For those who cannot listen to the
live webcast, a telephone recording of the conference call will be
available by dialing (855) 859-2056 and using the conference ID
53395841. The recording will be available until August 20, 2016.
Orbital ATK has also posted on its investor relations website a
presentation of second quarter 2016 financial results and
operational highlights.
Website and Social Media Disclosure
Orbital ATK communicates material financial information to its
investors using press releases, Securities and Exchange Commission
filings, its investor relations website, public conference calls
and webcasts. From time to time, Orbital ATK communicates
information regarding its business and operations, such as new
contract awards and mission updates, via Twitter and Facebook. It
is possible that the information disclosed through our website or
social media channels could be deemed to be material. Therefore, we
encourage investors, media and others interested in Orbital ATK to
follow the information we post on our website at
www.orbitalatk.com/investors, on Twitter at
https://twitter.com/OrbitalATK and on Facebook at
https://facebook.com/OrbitalATK.
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
approximately 12,000 people in 18 states across the United States
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 press release may be “forward-looking
statements” as defined by the Private Securities Litigation Reform
Act of 1995. Forward-looking statements often include the words
“forecast,” “expect,” “believe,” “will,” “intend,” “plan,” and
words of similar substance. Such forward-looking statements include
the company’s 2016 financial guidance, statements regarding
materiality or significance, the quantitative effects of the
restated and other financial statements including the estimated
range or ranges of adjustments described herein, the timing of the
filing of the company’s second quarter 2016 Form 10-Q and the
amended Forms 10-K and 10-Q that will include the restatement. Such
forward-looking statements are subject to risks and uncertainties
that could cause actual results or performance, as well as the
Company’s expectations regarding materiality or significance and
the restatement’s quantitative effects to differ materially from
those expressed in or contemplated by the forward-looking
statements, including the following: the ongoing internal review of
accounting errors and other matters described above, the
preliminary stage of such analysis, additional information arising
or different conclusions being reached prior to the expected filing
with the SEC of the contemplated filings, other subsequent events
requiring the company to make additional adjustments, the inherent
limitations in internal controls over financial reporting,
potential increased costs or reputational harm associated with
restating the company’s financial statements, potential
difficulties in achieving expected merger synergies and
efficiencies within the expected time-frames; the integration of
business operations being more difficult, time-consuming or costly
than expected; operating costs that might result from the merger;
potential difficulties in retaining key employees; the company’s
ability to maintain and grow its relationship with its customers;
reductions or changes in U.S. Government military or NASA spending,
including impacts of sequestration under the Budget Control Act of
2011; changes in cost and revenue estimates and/or timing of
programs and payments; the potential termination of U.S. Government
contracts; failure to win or retain key contracts; costs of
servicing debt, including cash requirements and interest rate
fluctuations; the company’s capital deployment strategy, including
share repurchases and dividend payments; actual pension asset
returns and assumptions regarding future returns, discount rates
and service costs; supply, availability, and costs of raw materials
and components, including commodity price fluctuations; performance
of subcontractors and other third parties; development of key
technologies; and the costs and ultimate outcome of contingencies,
including litigation, government investigations 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. Orbital ATK undertakes no obligation to
update any forward-looking statements, except as may be required by
law.
Disclosure and Reconciliation of Non-GAAP Financial
Measures
The adjusted financial results contained in this press release
are non-GAAP financial measures adjusted to give effect to the
merger of Orbital and ATK in all periods and adjust for the impact
of costs and expenses summarized in the tables below. In addition,
the adjusted results reflect estimates of interest expense, income
tax expense and diluted shares that would be in effect for the
periods as if the merger of Orbital and ATK and the divestiture of
ATK’s Sporting Group had occurred on January 1, 2015. Please refer
to the reconciliation tables below for more details.
We define free cash flow as cash from operating activities less
capital expenditures. Management believes that the company’s
presentation of free cash flow is useful because it provides
investors with an important perspective on the company’s liquidity,
financial flexibility and ability to fund operations and service
debt.
Adjusted measures are provided so investors can more easily
compare current and prior period results of the combined companies.
These adjusted results should not be considered in isolation or as
a substitute for the related GAAP measures, and other companies may
define such measures differently. We encourage investors to review
our financial statements and publicly-filed reports in their
entirety and not to rely on any single financial measure. The
reconciliation of GAAP results to adjusted non-GAAP results are as
follows:
Quarter Ended July 5, 2015
Preliminary Restated Unaudited GAAP Income
Statement**
($ in millions, exceptper share
data)
As Reported in10-K - Note
18
PreliminaryUnauditedEstimatedAdjustments
PreliminaryUnauditedRestated Results
Revenues $1,107.2
($30.6) $1,076.6 Operating Income 94.3 2.5 96.8 Net Interest
Expense (16.0) 0.0 (16.0) Income before taxes 78.4 2.5 80.9 Income
Taxes (25.1) (0.8) (25.9) Minority Interest (0.1) 0.0 (0.1) Net
Income $53.1 $1.7 $54.8 EPS Diluted $0.89 $0.03 $0.92
Diluted Shares 59.7 59.7
59.7 **The financial information for the second quarter of
2015 was previously restated in the company’s Transition Report on
Form 10-K for the 2015 transition period. Please refer to the
restatement disclosures and presentation in the company’s Form 10-K
for the nine months ended 12/31/15. In addition, all references to
results of the second quarter of 2015 are preliminary estimates
including the restatement reported today on SEC Form 8-K.
Preliminary unaudited estimated adjustments are the companies best
estimate and should be viewed in conjunction with the ranges
included in the restatement reported today on Form 8-K.
Adjusted Non-GAAP Consolidated
Results
Quarter Ended July 3, 2016
($ in millions, except per share
data)
GAAP Adjustment
(1)
AsAdjusted
Revenues $ 1,052.2
$0.0 $ 1,052.2 Operating Income 115.7 9.5 125.2 Net Interest
Expense (16.3) 0.0 (16.3) Income before taxes 99.4 9.5 108.9 Income
Taxes (27.5) (2.6) (30.1) Minority Interest 0.2 0.0 0.2 Net Income
$72.1 $6.9 $79.0 Diluted EPS $1.23 $0.12 $1.35 Diluted
Shares 58.6 0.0 58.6
Quarter Ended July 5, 2015 as restated**
($ in millions, except per share data)
GAAP (restated)
Adjustment (1) As Adjusted
Revenues $ 1,076.6
$0.0 $ 1,076.6 Operating Income 96.8 5.8 102.6 Net Interest Expense
(16.0) 0.0 (16.0) Income before taxes 80.9 5.8 86.7 Income Taxes
(25.9) (1.9) (27.8) Minority Interest (0.1) 0.0 (0.1) Net Income
$54.8 $3.9 $58.8 Diluted EPS $0.92 $0.07 $0.98 Diluted
Shares 59.7 0.0 59.7
(1) Includes the impact of
merger-related costs from the company's change in its fiscal year,
severance payments and IT expenses. Adjustments use the effective
tax rate. **The financial information for the second quarter
of 2015 was previously restated in the company’s Transition Report
on Form 10-K for the 2015 transition period. Please refer to the
restatement disclosures and presentation in the company’s Form 10-K
for the nine months ended 12/31/15. In addition, all references to
results of the second quarter of 2015 are preliminary estimates
including the restatement reported today on SEC Form 8-K.
Flight Systems Group Adjusted Non-GAAP
Results
Quarter Ended
July 3, 2016 ($ in millions)
Revenue
OperatingIncome
OperatingMargin
GAAP $370 $54.4 14.7%
As Adjusted $370
$54.4 14.7%
Quarter Ended July 5, 2015 ($
in millions) Revenue
OperatingIncome
OperatingMargin
GAAP, restated** $391
$51.5 13.1% As Adjusted
$391 $51.5
13.1% **The financial information for the second
quarter of 2015 was previously restated in the company’s Transition
Report on Form 10-K for the 2015 transition period. Please refer to
the restatement disclosures and presentation in the company’s Form
10-K for the nine months ended 12/31/15. In addition, all
references to results of the second quarter of 2015 are preliminary
estimates including the restatement reported today on SEC Form 8-K.
Defense Systems Group Adjusted Non-GAAP
Results
Quarter Ended July 3,
2016 ($ in millions) Revenue
OperatingIncome
OperatingMargin
GAAP $441 $35.5
8.1% Merger-related Adjustments (2) 2.7
As
Adjusted $441
$38.2 8.7%
Quarter Ended July 5, 2015 ($ in
millions) Revenue
OperatingIncome
OperatingMargin
GAAP, restated** $406
$30.9 7.6% Merger-related Adjustments (2) 5.3
As Adjusted $406
$36.2 8.9% (2) Merger-related
adjustments include the impact of transaction expenses,
merger-related costs and debt consolidation costs. **The
financial information for the second quarter of 2015 was previously
restated in the company’s Transition Report on Form 10-K for the
2015 transition period. Please refer to the restatement disclosures
and presentation in the company’s Form 10-K for the nine months
ended 12/31/15. In addition, all references to results of the
second quarter of 2015 are preliminary estimates including the
restatement reported today on SEC Form 8-K.
Space Systems Group Adjusted Non-GAAP
Results
Quarter Ended July 3,
2016 ($ in millions) Revenue
OperatingIncome
OperatingMargin
GAAP $265 $32.2
12.2% Merger-related Adjustments (2) 0.7
As
Adjusted $265
$32.9 12.4%
Quarter Ended July 5, 2015 ($ in
millions) Revenue
OperatingIncome
OperatingMargin
GAAP, restated** $297
$29.8 10.0% As Adjusted
$297 $29.8
10.0%
Guidance
($ in millions, except per
share data) Revenue
OperatingIncome
OperatingMargin
Diluted EarningsPer
Share
GAAP $4,450 - $4,500 $490 - $515 11.0%
-11.5% $5.05 - $5.25 Merger-related Adjustments (2) $0
$25 0.5% $0.25
As Adjusted $4,450 -
$4,500 $515 - $540 11.5%
- 12.0% $5.30 - $5.50 (2) Merger-related
adjustments include the impact of transaction expenses,
merger-related costs and debt consolidation costs. **The
financial information for the second quarter of 2015 was previously
restated in the company’s Transition Report on Form 10-K for the
2015 transition period. Please refer to the restatement disclosures
and presentation in the company’s Form 10-K for the nine months
ended 12/31/15. In addition, all references to results of the
second quarter of 2015 are preliminary estimates including the
restatement reported today on SEC Form 8-K.
($ in millions)
2016 Guidance Net Cash Provided By Operating Activities
$405 - $455 Capital Expenditures (200) Free
Cash Flow $205 - $255 Adjustments (3) 20
Adjusted Free
Cash Flow $225 - $275
Free Cash Flow and Adjusted Free Cash
Flow
($ in millions)
Quarter EndedJuly 3,
2016
Net Cash Provided By Operating Activities
$143.3 Capital Expenditures (36.1) Free Cash Flow $107.2
Adjustments (3) 3.5
Adjusted Free Cash Flow $110.7
(3) Includes the impact of
merger-related cash expenses from severance payments, retention
payments and IT expenses.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160810005508/en/
Investor and Media:Orbital ATK, Inc.Barron Beneski,
703-406-5528Barron.Beneski@orbitalatk.com
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