Aerospace Contractor Orbital ATK to Restate Financials

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)

Orbital Atk, Inc. (delisted) (NYSE:OA)
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