Quarterly Revenue and Cash Flow Reach Record
Levels
Robust New Orders Boost Year-End Backlog to
All-Time High
Guidance Provided for Revenue and EPS Growth
and Continued Strong Cash Flow in 2017
Orbital ATK, Inc. (NYSE:OA), a global leader in aerospace and
defense technologies, today announced preliminary unaudited
financial results for the fourth quarter and full year ended
December 31, 2016.
Orbital ATK reported GAAP revenues of $1,272 million for the
fourth quarter of 2016, up 11% compared to $1,145 million in the
fourth quarter of 2015. GAAP income from continuing operations,
before interest, income taxes and non-controlling interest (which
the company refers to as operating income) was $114.9 million, or
9.0% operating margin, for the fourth quarter of 2016 compared to
$94.3 million or 8.2% operating margin, in the comparable 2015
period. The company reported GAAP earnings per diluted share of
$1.08 and $0.89 in the fourth quarters of 2016 and 2015,
respectively. Free cash flow, which is a non-GAAP measure defined
as GAAP cash from operating activities ($414.7 million) minus
capital expenditures ($84.5 million), was $330.2 million in the
fourth quarter of 2016 compared to $122.2 million in the fourth
quarter of 2015.
The company also reported the following non-GAAP adjusted
results for the fourth quarter of 2016. Adjusted operating income
and profit margin were $131.6 million and 10.3%, respectively, in
the fourth quarter of 2016, compared to $140.0 million and 12.2%,
respectively, in the comparable 2015 period. Adjusted diluted
earnings per share were $1.26 and $1.44 in the fourth quarter of
2016 and 2015, respectively. Adjusted free cash flow, which
excludes certain merger and restatement related cash expenses of
$9.7 million, was $339.9 million in the fourth quarter.
______________ Free cash flow and the adjusted financial results
contained in this press release are non-GAAP financial measures.
Please refer to the reconciliation tables contained in the
Appendix- “Disclosure of Non-GAAP Financial Measures” of this press
release for more details. All amounts in this release are
preliminary and subject to revision. These preliminary results
could be impacted by new information, subsequent events or
different conclusions until the company files its Form 10-Q/A for
the quarter ended April 3, 2016, Form 10-Q for the quarters ended
July 3 and October 2, 2016 and Form 10-K for the year ended
December 31, 2016. There can be no assurance that the company’s
actual results for the periods presented herein will not differ
from the preliminary financial results, and such changes could be
material.
For the full year, Orbital ATK reported GAAP revenues of $4,455
million in 2016, compared to $4,363 million in 2015. Operating
income was $474.0 million, or 10.6% operating margin, in 2016
compared to $336.2 million, or 7.7% operating margin, in 2015. The
company reported GAAP earnings per diluted share of $5.00 in 2016
compared to $2.59 in 2015.
The company also reported the following non-GAAP adjusted
results for the full year 2016. Revenues were $4,455 million in
2016 compared to $4,509 million in 2015. Adjusted operating income
and profit margin were $518.4 million and 11.6%, respectively, in
2016, compared to $516.4 million and 11.5%, respectively, in 2015.
Adjusted diluted earnings per share in 2016 were $5.55 compared to
$5.10 in 2015. Adjusted free cash flow, which excludes certain
merger and restatement related cash expenses totaling $29.9
million, was $360.9 million in 2016 compared to $290.0 million in
2015.
“Orbital ATK’s 2016 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. “We exceeded our initial profit margin
expectations, free cash flow targets and new business booking goals
for the year. In addition, we continued to implement a disciplined
cash deployment strategy that included a mix of share repurchases,
dividend payments and investments in long-term growth initiatives
that will benefit the company in the years ahead.”
Cash Flow and Capital Allocation Activities
Cash generated by operating activities totaled approximately
$522 million, while capital expenditures were $191 million in 2016.
Free cash flow in 2016 was about $331 million. Adjusted free cash
flow was $361 million, which excludes $30 million of merger-and
restatement-related cash expenses (see non-GAAP reconciliation
tables below for details).
Orbital ATK repurchased approximately $124 million of its common
stock and also paid dividends of approximately $70 million during
2016, returning a total of nearly $195 million to shareholders
during the year. The company also invested about $305 million in
research and development and capital equipment in 2016.
“Orbital ATK’s financial performance last year reflected solid
profit margin and earnings per share results. The company generated
over $360 million in adjusted free cash flow in 2016 on top of $290
million in 2015. We returned approximately $195 million to
shareholders last year, and almost $135 million the previous year,
in the form of dividends and share repurchases,” said Garrett E.
Pierce, the company’s Chief Financial Officer.
New Business Summary
In the fourth quarter of 2016, Orbital ATK recorded
approximately $1,225 million in new firm and option contract
bookings. In addition, the company received approximately $750
million in option exercises under existing contracts. For the full
year 2016, new firm and option orders totaled $6,615 million and
option exercises under existing contracts were $1,850 million. As
of December 31, 2016, the company’s firm backlog was approximately
$9.34 billion, up 13% compared to a year ago, and its total backlog
(including options, indefinite quantity contracts and undefinitized
orders) was approximately $14.36 billion, 10% higher than in the
prior year.
2017 Financial Outlook
The company also provided the following financial guidance for
calendar year 2017. This guidance does not include any costs
associated with the prior-year restatement that might be incurred
in 2017.
Guidance
2017 Revenues ($ millions)
$4,550 - $4,625 Operating Income Margin 11.5%
- 12.0% Free Cash Flow ($ millions) $250 -
$300 Diluted Earnings Per Share $5.80 - $6.20
Orbital ATK currently expects an effective tax rate of
approximately 28% and interest expense of approximately $55 million
for the year. Capital expenditures are projected to be
approximately $225 million in 2017. Diluted weighted average shares
outstanding are expected to be approximately 57 million on the
basis of continued stock repurchase activity. The FAS/CAS favorable
pension adjustment is expected to be approximately $100 million for
the year.
Fourth Quarter Operational Highlights
Orbital ATK’s strong operational execution led to the
achievement of numerous milestones in the fourth quarter of 2016.
These included the following important events:
- In the Flight Systems Group, fourth
quarter operational accomplishments were highlighted by two
successful space launch missions for NASA, comprising the launch of
an Antares rocket for a cargo delivery mission to the International
Space Station and a Pegasus rocket carrying eight small weather
satellites. Also in the quarter, the company carried out four
successful target missions for the Missile Defense Agency and U.S.
Navy, and supported three Atlas V and one Delta IV rocket launches
with critical composite structures and propulsion systems.
- In the Defense Systems Group, the
company produced approximately 400 million rounds of small-,
medium-, and large-caliber ammunition, as well as about 5,000
tactical missile motors and 47,000 fuzes and warheads in the fourth
quarter. The company also delivered over 50 advanced tactical
missiles in the quarter, achieving the highest-ever quarterly
production rate for the program.
- In the Space Systems Group, fourth
quarter operational highlights included the completion of the sixth
Cygnus cargo delivery mission and associated science experiments
and micro-satellite deployments for NASA. The company initiated
work on several newly-awarded government satellites and completed
the first group of 10 Iridium NEXT satellites that were launched in
January. The company also completed several high-altitude
scientific balloon and research rocket missions.
“Fourth quarter operational results remained very solid as our
teams completed several high-profile missions, including the
return-to-flight of the Antares rocket and the 43rd mission of our
Pegasus space launcher,” said Chief Operating Officer Blake E.
Larson. “Our operational execution on key programs across all three
business groups was excellent in the final three months of 2016. We
appreciate the hard work and attention to detail of our engineering
and manufacturing teams, which is leading to high levels of product
reliability and customer satisfaction throughout our business.”
Consolidated 2016 Financial Results
As a result of the prior years’ restatement and delays in 2016
quarterly filings, cumulative contract profitability adjustments
occurring in the second half of 2016 were recorded in the second
quarter of 2016. While this had no impact on full-year results,
these adjustments resulted in lower reported operating income and
earnings per share in the third and fourth quarters and increased
operating income and earnings per share in the second quarter of
2016 (see Appendix, page 14).
GAAP Results
Fourth
Quarter Twelve Months ($ in millions,
except per share data) 2016
2015 2016 2015
Revenues $ 1,272 $ 1,145 $ 4,455 $ 4,363
Operating Income 114.9 94.3 474.0 336.2 Net Income 62.1 53.3 292.2
145.8 Diluted Earnings Per Share $ 1.08 $ 0.89
$ 5.00 $ 2.59
Revenues increased $127 million, or 11.1%, in the fourth quarter
of 2016 compared to the fourth quarter of 2015, due to a $96
million increase in Space Systems Group (SSG), a $37 million
increase in Defense Systems Group (DSG) and an $18 million increase
in Flight Systems Group (FSG) revenues, partially offset by a $24
million increase in corporate revenue eliminations. Operating
income increased $20.6 million, or 21.8%, in the fourth quarter of
2016 compared to the comparable 2015 period, due to a $17.5 million
increase in SSG, a $9.3 million increase at corporate and a $1.1
million increase in FSG income, partially offset by a $7.3 million
decrease in DSG income.
Revenues increased $92 million, or 2.1%, in 2016 compared to
revenues in 2015, due to a $72 million increase in SSG, a $27
million increase in FSG and a $2 million increase in DSG revenues,
partially offset by a $9 million increase in corporate
eliminations. Operating income increased $137.8 million, or 41.0%,
in 2016 compared to operating income in 2015, primarily due to a
$100.1 million increase in corporate income driven by the absence
of 2015 merger transaction costs and an increase in pension income
in 2016 along with an $83.0 million increase in SSG income. These
increases were partially offset by a $33.6 million decrease in FSG
and an $11.7 million decrease in DSG operating income.
Net income and earnings per share reflected an income tax rate
of 28.0% for 2016 compared to 36.2% for 2015. The tax rate in 2016
benefited from the absence of certain non-deductible costs in the
prior-year period, a true-up of prior year taxes, research and
development (R&D) tax credits (including the permanent
extension of the federal credit that occurred in late 2015), and
the favorable settlement of the IRS audit of prior-year tax
returns.
Non-GAAP Results
Fourth Quarter
Twelve Months ($ in millions, except per
share data) 2016 2015
2016 2015 Adjusted Revenues $ 1,272
$ 1,145 $ 4,455 $ 4,509 Adjusted Operating Income
131.6 140.0 518.4 516.4 Adjusted Net Income 72.7 86.0 324.2 287.5
Adjusted Diluted Earnings Per Share $ 1.26 $
1.44 $ 5.55 $ 5.10
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.
Adjusted revenues increased $127 million, or 11.1%, in the
fourth quarter of 2016 compared to the fourth quarter of 2015,
consistent with GAAP revenues. Adjusted operating income decreased
$8.4 million, or 6.0%, in 2016 compared to 2015, driven by a $13.7
million decrease in DSG income and a $9.7 million decrease in
corporate income, partially offset by a $13.9 million increase in
SSG and a $1.1 million increase in FSG income.
Adjusted revenues decreased $54 million, or 1.2%, in 2016
compared to 2015, due to a $24 million decrease in SSG, a $14
million increase in corporate eliminations, an $11 million decrease
in FSG and a $5 million decrease at DSG. Adjusted operating income
increased $2.0 million in 2016 compared to 2015, driven by a $39.8
million increase in SSG and a $27.4 million increase in corporate,
partially offset by a $35.6 million decrease in FSG and a $29.6
million decrease in DSG.
Adjusted net income and earnings per share reflect the same tax
rates as the tax rates for GAAP numbers.
Segment 2016 Financial Results
Orbital ATK conducts its operations in three business segments:
Flight Systems Group, Defense Systems Group and Space Systems
Group. Each of these groups in turn consists of several
product-line divisions. Segment operating results include pension
expense recoverable under U.S. Government contracts as determined
in accordance with government Cost Accounting Standards (CAS). The
difference between pension expense recorded in accordance with GAAP
Financial Accounting Standards (FAS) and pension costs recorded in
accordance with CAS is reported at the corporate level.
Flight Systems Group:
GAAP Results
Fourth Quarter
Twelve Months ($ in millions
2016 2015 2016
2015 Revenues $ 406 $ 388 $ 1,497 $
1,470 Operating Income 53.2 52.1 204.7 238.3 Operating Margin
13.1 % 13.4 %
13.7 % 16.2 %
FSG revenues for the fourth quarter of 2016 increased $18
million, or 4.6%, and operating income increased $1.1 million, or
2.1%, compared to 2015 primarily due to higher volume in the Launch
Vehicles Division. FSG revenues for 2016 increased $27 million, or
1.8%, compared to 2015 primarily due to the inclusion of a full
year of Orbital Sciences results in 2016. Operating income
decreased $33.6 million, or 14.1%, compared to 2015 largely due to
a favorable contract close-out adjustment in 2015 that did not
reoccur in 2016.
Non-GAAP Results
Fourth Quarter
Twelve Months ($ in millions
2016 2015 2016
2015 Adjusted Revenues $ 406 $ 388 $ 1,497
$ 1,508 Adjusted Operating Income 53.2 52.1 204.7 240.3
Adjusted Operating Margin 13.1 %
13.4 % 13.7 % 15.9 %
FSG adjusted revenues and operating income for the fourth
quarter of 2016 were consistent with GAAP revenue and operating
income.
FSG adjusted revenues for 2016 decreased $11 million compared to
2015. Adjusted operating income decreased $35.6 million, or 14.8%,
primarily due to a favorable contract close-out adjustment in 2015
referenced above that did not reoccur in 2016, partially offset by
increased volume in the Launch Vehicles Division in 2016.
Defense Systems Group:
GAAP Results
Fourth Quarter
Twelve Months ($ in millions
2016 2015 2016
2015 Revenues $ 482 $ 445 $ 1,822 $
1,820 Operating Income 45.1 52.4 171.5 183.2 Operating Margin
9.4 % 11.8 %
9.4 % 10.1 %
DSG revenues for the fourth quarter of 2016 increased $37
million, or 8.3%, largely due to higher activity on Armament
Systems Division contracts. Operating income decreased $7.3
million, or 13.9%, primarily from favorable profit adjustments in
the fourth quarter of 2015 that did not reoccur in 2016.
DSG revenues for 2016 were flat compared to 2015. Operating
income decreased $11.7 million, or 6.4%, primarily from a favorable
profit adjustment in 2015 that did not reoccur in 2016.
Non-GAAP Results
Fourth Quarter
Twelve Months ($ in millions
2016 2015 2016
2015 Adjusted Revenues $ 482 $ 445 $ 1,822
$ 1,827 Adjusted Operating Income 47.0 60.7 182.0 211.6
Adjusted Operating Margin 9.8 %
13.6 % 10.0 % 11.6 %
DSG adjusted revenues for the fourth quarter of 2016 were
consistent with GAAP revenues while adjusted operating income
decreased $13.7 million, or 22.6%, due to favorable profit
adjustments in the fourth quarter of 2015 that did not reoccur in
2016.
DSG adjusted revenues were essentially flat in 2016
year-over-year. DSG adjusted operating income decreased $29.6
million, or 14.0%, primarily due to lower margins on certain
Armament Systems and Missile Products Divisions contracts and a
favorable profit adjustment in 2015 that did not reoccur in
2016.
Space Systems Group:
GAAP Results
Fourth Quarter
Twelve Months ($ in millions) 2016
2015 2016 2015
Revenues $ 424 $ 328 $ 1,237 $ 1,165 Operating Income
33.7 16.2 129.5 46.5 Operating Margin 8.0 %
4.9 % 10.5 % 4.0 %
SSG revenues for the fourth quarter of 2016 increased $96
million, or 29.3%, compared to the fourth quarter of 2015 largely
due to higher activity on Advanced Programs Division and Satellite
Systems Division contracts. Operating income increased $17.5
million, or 108.0%, largely due to favorable profit adjustments on
certain Satellite Systems Division contracts in 2016.
SSG revenues for 2016 increased $72 million, or 6.2%, and
operating income increased $83.0 million, or 178.5%, primarily due
to the exclusion of pre-merger Orbital results in 2015 and
unfavorable profit adjustments in 2015 that did not reoccur in
2016.
Non-GAAP Results
Fourth Quarter
Twelve Months ($ in millions)
2016 2015 2016
2015 Revenues $ 424 $ 328 $ 1,237 $
1,261 Operating Income 36.5 22.6 133.3 93.5 Operating Margin
8.6 % 6.9 % 10.8 %
7.4 %
SSG adjusted revenues for the fourth quarter of 2016 increased
$96 million, or 29.3%, consistent with GAAP revenues. Adjusted
operating income increased $13.9 million, or 61.5%, largely due to
favorable profit adjustments on certain Satellite Systems Division
contracts in 2016.
SSG adjusted revenues for 2016 decreased $24 million, or 1.9%
compared to 2015 largely due to lower activity on commercial
satellites. Adjusted operating income increased $39.8 million, or
42.6%, largely due to favorable profit adjustments on certain
Advanced Programs Division and Satellite Systems Division contracts
in 2016.
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)
March 8, 2017. 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
77444842. The recording will be available until March 15, 2017.
Orbital ATK has also posted on its investor relations website a
presentation of the 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 12,500 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 2017 financial guidance, the company’s actual
financial results to be reported in its upcoming Form 10-K for
2016, expectations regarding our financial and operational
performance, the benefits of our long-term growth initiatives and
investments. 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 the quantitative
effects of the restatement of the financial statements for the
first quarter of 2016, and our actual annual and interim 2016
results to be reported in our upcoming SEC filings to differ
materially from those expressed in or contemplated by the
forward-looking statements, including the following: the ongoing
work to complete the restatement of our financial statements for
the first quarter of 2016 and to complete the financial statements
for the second and third quarters of 2016 and the annual financial
statements for 2016 and other matters described above; the
preliminary stage of such work; 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; 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 accounting methods; 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.
Appendix: Disclosure 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 GAAP cash from operating activities
less GAAP 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:
Consolidated Non- GAAP
Results
Quarter Ended December 31,
2016
($ in millions,
except per share data) GAAP
Adjustment (1) As Adjusted
Revenues $ 1,271.8 $ - $ 1,271.8 Operating Income
114.9 16.7 131.6 Net Interest Expense (17.1 )
(17.1 ) Income before taxes 97.8 16.7 114.5 Income Taxes (35.5 )
(6.1 ) (41.6 ) Minority Interest (0.2 ) (0.2 )
Net Income $ 62.1 $ 10.6 $ 72.7 EPS
Diluted $ 1.08 $ 0.18 $ 1.26 Diluted Shares 57.7
57.7 57.7
(1) Includes the impact of merger-related costs from the company's
change in its fiscal year, severance payments, and IT expenses,
among others. Also includes costs related to the restatement.
Adjustments use the effective tax rate.
Quarter Ended December 31,
2015
($ in millions,
except per share data) GAAP
Adjustment (1) As Adjusted
Revenues $ 1,144.6 $ - $ 1,144.6 Operating Income
94.3 45.7 140.0 Net Interest Expense (20.0 )
(20.0 ) Income before taxes 74.3 45.7 120.0 Income Taxes (21.1 )
(13.0 ) (34.1 ) Minority Interest 0.1
0.1 Net Income $ 53.3 $ 32.7 $ 86.0
EPS Diluted $ 0.89 $ 0.55 $ 1.44 Diluted Shares
59.6 59.6 59.6
(1) Includes the impact of merger-related costs from
the company's change in its fiscal year, severance payments, and IT
expenses, among others. Adjustments use the effective tax rate.
Year Ended December 31,
2016
($ in millions,
except per share data) GAAP
Adjustment (1) As Adjusted
Revenues $ 4,455.3 $ - $ 4,455.3 Operating Income
474.0 44.4 518.4 Net Interest Expense (68.3 ) -
(68.3 ) Income before taxes 405.7 44.4 450.1 Income
Taxes (113.6 ) (12.4 ) (126.0 ) Minority Interest 0.1
- 0.1 Net Income $ 292.2 $ 32.0
$ 324.2 Diluted EPS $ 5.00 $ 0.55 $ 5.55
Diluted Shares 58.4 58.4
58.4 (1) Includes the impact of
merger-related costs from the company's change in its fiscal year,
severance payments, and IT expenses, among others. Also includes
costs related to the restatement. Adjustments use the effective tax
rate.
Year Ended December 31,
2015
($ in millions,
except per share data) GAAP
Adjustment (1) As Adjusted
Revenues $ 4,362.5 $ 146.0 $ 4,508.5 Operating Income
336.2 180.2 516.4 Net Interest Expense (81.1 ) 15.2 (65.9 ) Debt
Extinguishment (26.6 ) 26.6 -
Income before taxes 228.5 222.0 450.5 Income Taxes (82.7 ) (80.3 )
(163.0 ) Minority Interest - - -
Net Income $ 145.8 $ 141.7 $ 287.5
Diluted EPS $ 2.59 $ 2.52 $ 5.10 Diluted Shares
56.3 56.3 56.3
(1) Includes Orbital Sciences, the impact of
merger-related costs from the company's change in its fiscal year,
severance payments, and IT expenses, debt consolidation costs,
among others. Adjustments use the effective tax rate.
Consolidated Adjusted Non-GAAP
Results
2016 Quarterly Non-GAAP Reconciliation ($ in
millions) Q1 Q2
Q3 Q4 Total
Year Revenue: GAAP $ 1,056
$ 1,083 $ 1,044 $ 1,272
$ 4,455 Adjustments(2) -
- - -
-
As Adjusted $ 1,056 $
1,083 $ 1,044 $ 1,272 $
4,455 Operating Income: GAAP $
120.5 $ 147.3 $ 91.3 $
114.9 $ 474.0 Adjustments(2) 9.7
10.1 7.9
16.7 44.4
As Adjusted $
130.2 $ 157.4 $ 99.2 $
131.6 $ 518.4 Diluted Earnings Per
Share: GAAP $ 1.31 $ 1.57
$ 1.04 $ 1.08 $ 5.00
Adjustments(2) 0.13 0.12
0.11 0.18 0.55
As Adjusted $ 1.44
$ 1.69 $ 1.15
$ 1.26 $ 5.55
(2) Includes the impact of merger-related costs from the
company's change in its fiscal year, severance payments, and IT
expenses, among others. Also includes costs related to the
restatement. Adjustments use the effective tax rate.
Flight Systems Group Adjusted Non-GAAP
Results
Quarter Ended December
31, 2016 Year Ended December 31, 2016
($ in millions) Revenue
OperatingIncome
OperatingMargin
Revenue
OperatingIncome
OperatingMargin
GAAP $ 406
$ 53.2 13.1 % $ 1,497
$ 204.7 13.7 % - -
As Adjusted $ 406
$ 53.2 13.1 %
$ 1,497 $ 204.7
13.7 %
Quarter
Ended December 31, 2015 Year Ended December 31, 2015
($ in millions) Revenue
OperatingIncome
OperatingMargin
Revenue
OperatingIncome
OperatingMargin
GAAP $ 388 $ 52.1
13.4 % $ 1,470 $ 238.3
16.2 % Orbital results for Jan. 1 to Feb. 8, 2015
38 2.0
As Adjusted
$ 388 $ 52.1
13.4 % $ 1,508
$ 240.3 15.9 %
Defense Systems Group Adjusted Non-GAAP
Results
Quarter Ended December
31, 2016 Year Ended December 31, 2016
($ in millions) Revenue
OperatingIncome
OperatingMargin
Revenue
OperatingIncome
OperatingMargin
GAAP $ 482
$ 45.1 9.4 % $ 1,822
$ 171.5 9.4 % Merger-related
Adjustments (2) - 1.9 10.5
As Adjusted $ 482
$ 47.0 9.8 %
$ 1,822 $ 182.0
10.0 %
Quarter
Ended December 31, 2015 Year Ended December 31, 2015
($ in millions) Revenue
OperatingIncome
OperatingMargin
Revenue
OperatingIncome
OperatingMargin
GAAP $ 445 $ 52.4
11.8 % $ 1,820 $ 183.2
10.1 % Merger-related Adjustments (2)
8.3 7 28.4
As Adjusted
$ 445 $ 60.7 13.6
% $ 1,827 $
211.6 11.6 % (2) Merger-related
adjustments include the impact of transaction expenses and other
merger-related costs.
Space Systems Group Adjusted Non-GAAP
Results
Quarter Ended December
31, 2016 Year Ended December 31, 2016
($ in millions) Revenue
OperatingIncome
OperatingMargin
Revenue
OperatingIncome
OperatingMargin
GAAP $ 424
$ 33.7 8.0 % $ 1,237
$ 129.5 10.5 % Merger-related
Adjustments (2) 2.8 3.8
As Adjusted $ 424 $
36.5 8.6 % $
1,237 $ 133.3 10.8
%
Quarter Ended December
31, 2015 Year Ended December 31, 2015 ($ in
millions) Revenue
OperatingIncome
OperatingMargin
Revenue
OperatingIncome
OperatingMargin
GAAP $ 328 $ 16.2
4.9 % $ 1,165 $ 46.5
4.0 % Orbital results for Jan. 1 to Feb. 8, 2015
92 2.3
$
328 $ 16.2 4.9 % $
1,257 $ 48.8 3.9 % Goodwill
impairment 34.3 Merger-related Adjustments (2) 6.4
4 10.4
As Adjusted
$ 328 $ 22.6 6.9
% $ 1,261 $
93.5 7.4 % (2) Merger-related
adjustments include the impact of transaction expenses and other
merger-related costs.
Free Cash Flow and Adjusted Free Cash
Flow
2016 ($ in millions) Fourth
Quarter Twelve Months Net Cash Provided By
Operating Activities $ 414.7 $ 521.5 Capital
Expenditures (84.5 ) (190.5 ) Free Cash Flow $ 330.2
$ 331.0 Adjustments (3) 9.7 29.9
Adjusted Free Cash Flow $ 339.9
$ 360.9
(3) Includes the impact of
merger-related cash expenses from severance payments, retention
payments and IT expenses. Also includes costs related to the
restatement, among others.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170308005415/en/
Investors and Media:Orbital ATK, Inc.Barron Beneski,
703-406-5528Barron.Beneski@orbitalatk.com
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