ATK 3Q Space Sales Slip; Company to Restructure in 2013 Under New CFO
[Satellite News 02-02-12] It has been a busy day for aerospace and defense firm ATK as the company announced its third quarter 2012 results, its 2013 restructuring plan and a new appointment to its executive management team on Feb. 2.
ATK’s 2012 third fiscal quarter ended on Jan. 1. ATK Aerospace Systems sales declined six percent from $321 million in the prior-year quarter to $302 million, driven by lower sales in NASA human space flight programs. The company said its loss was partially offset only by the absence of a $25 million sales reduction recorded in the prior-year quarter.
Third quarter EBITDA, however, increased 46 percent to $35 million, compared to $24 million in the prior-year quarter, reflecting the absence of the aforementioned profit reduction taken in the prior-year quarter and partially offset by lower sales volume in human space flight programs.
Overall, ATK reported diluted earnings per share (EPS) of $1.51 compared to $2.09 in the prior-year quarter. The company said the drop reflected the impact of a $33 million accrual regarding a lawsuit arising from events that predated the acquisition of its Thiokol Corporation in 2001. ATK said it has reached a tentative agreement with the plaintiff and the U.S. Department of Justice to settle the claim. The company expects to finalize the agreement in the fourth quarter of the fiscal year.
Separately, ATK announced that it would reorganize at the beginning of its 2013 fiscal year to operate in a three-group structure. The new structure will divide the company into an Aerospace Group in Magna, Utah, a Defense Group in Baltimore, Md. and a Sporting Group in Anoka, Minn.
“This structure will allow us to leverage ATK’s agile and innovative capabilities to proactively address the federal budget pressures facing many of our customers, the state of the economy and the increased need to be more competitive, domestically and internationally,” ATK President and CEO Mark DeYoung said in a statement. “We are committed to creating new products and solutions to address customer priorities at an affordable price, which will support long-term performance in each of our business segments.”
ATK Defense Group will integrate the engineering, manufacturing and management excellence of the company’s current Armament Systems and Missile Products groups. The new integrated team aims to strengthen ATK’s brand in the defense industry, according to DeYoung. “[The division] will deliver improved synergies and cost savings critical to our competitiveness and achieve long-term growth through resource alignment, investment and an international focus to deliver the company’s strategic priorities.”
DeYoung added that ATK Aerospace Group would continue its significant progress in streamlining its core businesses. The new structure aims to drive near-term results and long-term growth in solid rocket propulsion systems, advanced materials, satellite structures and launch structures, and positioning for long-term growth in next-generation commercial and military aircraft structures, and small satellite systems.
“Our performance on the Airbus A350 program and the architecture announced by NASA in September 2011 for the Space Launch System provides a solid basis for the Aerospace Group’s future financial performance,” according to DeYoung.
The Sporting Group will be dedicated to supporting its portfolio of ammunition, accessories, and individual sporting equipment brands.
ATK also announced that it hired Neal Cohen as its new Executive Vice President and CFO effective Feb. 13, with responsibility over accounting and controls, treasury, tax, financial planning and analysis, internal audit, and investor relations.
Cohen previously served as President and COO for Laureate Education. He also held the executive vice president and CFO position at U.S. Airways.
DeYoung said Cohen would play a key role in developing business strategies to drive growth and profitability. “Cohen brings nearly 30 years of experience working for several public companies, including those in the aviation and manufacturing industries.”