Aerospace Contractor Orbital ATK to Restate Financials
August 10 2016 - 8:30AM
Dow Jones News
Orbital ATK Inc. said Wednesday that it would miss its filing
deadline for its most recent quarter and restate more than a year
of results due to accounting issues.
The company said its results from the quarters ended June 29,
2014, through April 3, 2016, "should no longer be relied upon." The
company is also delaying its quarterly report for the most recently
completed quarter and said that the issues "indicate the existence
of one or more material weaknesses in its internal control over
financial reporting."
Orbital is an aerospace and defense contractor that supplies
governments with space-launch vehicles, satellites, tactical
missiles and ammunition.
The misstatements relate primarily to the company's $2.3 billion
contract with the U.S. Army to manufacture and supply ammunition at
the Army's Lake City Army Ammunition Plant Independence, Mo., for
an initial period of seven years and up to 10 years total.
The misstatements were discovered during management's work to
change the company's accounting and oversight controls.
Orbital management found that cost estimates for the contract
were incorrect and that when fixed, the contract became
unprofitable and so needed to be accounted for in a different
way.
The company said it continues to assess the issues with the help
of outside professionals.
Orbital said the misstatements overestimated revenue by $100
million to $150 million in total and that a forward loss provision,
related to the unprofitable contract, would reduce previously
reported pretax operating income by about $400 million to $450
million.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
August 10, 2016 08:15 ET (12:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Orbital Atk, Inc. (delisted) (NYSE:OA)
Historical Stock Chart
From Jun 2024 to Jul 2024
Orbital Atk, Inc. (delisted) (NYSE:OA)
Historical Stock Chart
From Jul 2023 to Jul 2024