Senior Management Discusses Business Strategy and Market Trends
Calendar Year 2014 Pro-Forma Financial Information and Three-Year
Outlook for Revenue and Earnings Growth Provided
Company Expected to Generate Approximately $1 Billion of Free Cash
Flow in 2015-2017
DULLES, Va.Feb. 19, 2015--
Orbital
ATK, Inc. (NYSE:OA), a global leader in aerospace and defense
technologies, held a conference call with investors and analysts today
to introduce the new company and its three-year financial outlook to the
investment community. Orbital ATK was formed as a result of the merger
of Orbital Sciences Corporation and the Aerospace and Defense Groups of
ATK and began combined operations last week. The company has posted the
presentation slides used for today s call, as well as an updated general
presentation for investors and analysts, on its website.
A transcript of today s conference call will also
be posted on the Orbital ATK web site as soon as it is available.
During the call Orbital ATK s President and Chief Executive Officer
David W. Thompson reviewed the company s business strategy of providing
its customers with innovative, reliable and affordable products across
domestic and international military, civil government and commercial
markets. He highlighted several factors that are expected to create
additional value for both customers and shareholders: cost reductions to
be achieved through vertical integration and overhead efficiencies;
expanded market opportunities to be pursued due to greater systems
engineering know-how and strengthened technical and industrial
resources; and substantial increases in capital deployment capacity to
be available to improve returns to investors.
Orbital ATK s Chief Financial Officer Garrett E. Pierce provided a
summary of the company s adjusted unaudited pro-forma calendar year 2014
financial information in order to set a new baseline to measure future
financial performance.* These results were as follows:
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Revenues of ~$4,440 million
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EBITDA of ~$600 million
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EBIT ~$440 million
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Net Income ~$250 million
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Earnings Per Share ~$4.20
Over the next three years, Mr. Pierce said the company is targeting to
achieve the following financial goals:*
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Consolidated revenue growth of ~4-5% on a compound annual growth rate
(CAGR) basis, including growth due to revenue synergies in 2016 and
2017
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EBITDA growth of ~8-10% (CAGR)
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Earnings per share growth of ~12-15% (CAGR)
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Cumulative three-year free cash flow of ~$1 billion
* See non-GAAP reconciliation table below
Orbital ATK s Chief Operating Officer Blake E. Larson reviewed the
company s organizational structure and senior management team, as well
as updated progress on the merger integration and synergy capture. Mr.
Larson stated the company is on track to realize its cost synergy
targets of $70 to 100 million per year by 2016. He also said the company
expects to achieve its $150 to $200 million annual revenue synergy
target by late 2016 or early 2017.
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 more than 12,000 people in 20 states across the U.S. 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 communication may be forward-looking
statements within the meaning of Section 21E of the Securities Exchange
Act of 1934. Words or phrases such as may, will, expected,
intend, estimate, anticipate, believe, project, or continue,
and similar expressions are used to identify these forward-looking
statements. All such forward-looking statements involve estimates and
assumptions that are subject to risks, uncertainties and other factors
that could cause actual results to differ materially from the results
expressed in the statements. Among the key factors that could cause
actual results to differ materially from those projected in the
forward-looking statements include the possibility that Orbital ATK may
be unable to achieve expected synergies and operating efficiencies
following the merger within the expected time-frames or at all and to
successfully integrate Orbital s operations with those of the ATK
Aerospace & Defense business; the integration of Orbital s operations
with those of ATK A&D being more difficult, time-consuming or costly
than expected; operating costs, customer loss and business disruption
that might result from the merger; potential difficulties in retaining
key employees; Orbital ATK s ability to maintain and grow its
relationship with its customers; reductions or changes in U.S.
Government military or NASA spending; timing of payments and budgetary
policies, including impacts of sequestration under the Budget Control
Act of 2011; changes in cost and revenue estimates and/or timing of
programs; the potential termination of U.S. Government contracts and the
potential inability to recover termination costs; the impact of a recent
Antares launch failure; costs of servicing debt, including cash
requirements and interest rate fluctuations; supply, availability, and
costs of raw materials and components, including commodity price
fluctuations; performance of subcontractors; development of key
technologies and retention of a qualified workforce; and the costs and
ultimate outcome of litigation matters 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,
including Orbital ATK s most recent Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and
Orbital ATK s registration statement on Form S-4. Orbital ATK assumes no
obligation to update or revise publicly the information in this
communication, whether as a result of new information, future events or
otherwise, except as required by law.
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Non-GAAP Reconciliation Table:
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($ in millions)
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Revenue
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EBITDA*
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EBIT*
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Net Income
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EPS
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Preliminary Results (Unaudited)
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$4,469
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$594
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$479
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$276
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$4.65
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Pro Forma Purchase Accounting Amortization
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-
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-
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(50)
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(33)
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(0.56)
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Radford Pension Adjustment
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(31)
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(31)
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(31)
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(20)
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(0.34)
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Environmental Settlement
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-
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2
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2
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1
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0.02
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Building Impairment
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-
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9
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9
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6
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0.10
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Transaction Expenses
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-
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29
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29
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19
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0.33
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Pro Forma Results (Unaudited)
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$4,438
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$603
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$438
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$249
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$4.20
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__________________
*All Numbers Above Are Preliminary, Unaudited and Subject to
Change. EBIT = Net Income + Income Tax Provision + Net
Interest Expense. EBITDA = EBIT + Depreciation + Amortization
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Source: Orbital ATK
Orbital ATK, Inc.
Barron Beneski, 703-406-5528
Public
and Investor Relations
barron.beneski@orbitalatk.com