QUOTE AND NEWS
Benzinga  Sep 9  Comment 
On CNBC's Mad Money, Jim Cramer spoke about President Obama's speech, scheduled for Wednesday, and its possible impact on the stocks market. He thinks that Alliant Techsystems Inc. (NYSE: ATK), Raytheon Company (NYSE: RTN) and Lockheed Martin...
SeekingAlpha  Jul 31  Comment 
The following audio is from a conference call that will begin on July 31, 2014 at 09:00 AM ET. The audio will stream live while the call is active, and can be replayed upon its completion. Listen now Complete Story »
Wall Street Journal  Jul 31  Comment 
StreetInsider.com  Jul 21  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/ATK+%28ATK%29+Awarded+%24220+Million+for+International+Contracts+/9674630.html for the full story.
Benzinga  Jul 16  Comment 
ATK (NYSE: ATK), announced that the ATK and Finmeccanica-Alenia Aermacchi have successfully completed the first phase of ground and flight testing of the fully configured multi-mission MC-27J tactical transport aircraft with the support of the...
Motley Fool  Jul 10  Comment 
BAE Systems, Boeing, Kaman, and Lockheed Martin also win awards Wednesday.
TheStreet.com  May 19  Comment 
NEW YORK (TheStreet) -- Shares of Alliant Techsystems Inc. are lower -1.87% to $132.94 in pre-market trading on Monday following a ratings downgrade to "neutral" from "buy" at Goldman Sachs . The firm said it reduced its rating on the aerospace...
SeekingAlpha  May 15  Comment 
Alliant Techsystems Inc. (ATK) Q4 2014 Results Earnings Conference Call May 15, 2014 9:00 AM ET Executives Mike Pici - Director, Investor Relations Mark DeYoung - President and CEO Neal Cohen - Executive Vice President and CFO ...
Gold Stocks Today  May 1  Comment 
Space exploration could turn out to be one of the hottest business sectors over the next decade. In fact, Stephen Petranek thinks it has the potential to eclipse computers, smartphones and social media platforms as the hottest tech market in just...
Forbes  Apr 30  Comment 
When President Obama decided to kick off his second term with a gun-control initiative last year, he delivered a windfall to Alliant Techsystems, the nation's biggest producer of ammunition.  Demand for every caliber and category of sporting...




 


Alliant Techsystems Inc. (NYSE: ATK) is major U.S. producer of advanced weapon and space systems. ATK was formed in 1990 as a spin off of Honeywell International's defense businesses. Headquartered in Edina, Minnesota, ATK currently has approximately 16,000 employees and operates in 24 states, producing defense products and weaponry, ammunition, and nonmilitary aerospace products such as components of satellites and space exploration vehicles.[1] The company's clients are varied and range from the U.S. government to commercial clients who purchase ATK's sporting ammunition.

Given ATK's reliance on the U.S. government's foreign policy, military spending significantly impacts its businesses. The Iraq War, for instance has led to 64% increase in ATK's profits over the last 4 years. Since ATK is also involved in providing nonmilitary-use ammunition for commercial sale, it is also affected by trends in the nonmilitary market, such as the trend towards "green" ammunition, which uses fewer heavy metals (e.g. lead). ATK's nonmilitary ammunition is purchased by law enforcement agencies across the country, as well as for consumer use in recreational hunting.

2009 has brought the end of major contracts for ATK Space Systems which has resulted in layoffs totaling approximately 850 employees in Utah. The major contracts ending include the Propulsion Replacement Program for the Air Force's Minuteman III and the Reusable Solid Rocket Motor (RSRM) for NASA's space shuttle program. Given the poor outlook for additional contracts, more layoffs are likely in 2010.

Company Overview

Alliant Techsystems is an aerospace and defense company with operations in 24 states, Puerto Rico, and internationally. ATK is a producer of military small-caliber ammunition for use in soldier-carried weapons, such as automatic and semi-automatic rifles, and machine guns. The Company is also the producer of medium-caliber ammunition used by crew-served weapons on armored vehicles and aircraft. ATK is one of the producers of military large-caliber ammunition used by tanks. In addition, the Company is the producer of ammunition for the sport enthusiast and law enforcement markets.

ATK is also manufactures solid rocket motors. The Company is the contractor of the first stage of NASA's next-generation family of launch vehicles, the Ares I and Ares V. The Company produces other large solid rocket motors used to launch, or help launch, a variety of strategic missiles, and launch vehicles for satellite insertions or deep-space scientific exploration, including the Trident II (D5) and Minuteman III, which provide strategic deterrence capability for the United States and its allies; missile intercept solid rocket motors for Ground-based missile defense and the SM-3 program, and Graphite Epoxy Motors for launch vehicles, such as the Delta II.[1]

The Company is a manufacturer of medium-caliber chain guns for use on a variety of land, sea and airborne platforms. It is also a provider of satellite and spacecraft components and subsystems and has established itself as a provider of tactical accessories for military, security, law enforcement and sport enthusiast markets. ATK is a provider of energetics and propellants for warheads and bomb-fill. It provides advanced missile warning sensors for a variety of aircraft; fuses for a variety of weapon systems and advanced barrier systems used by the United States Armed forces and its allies. Additional business lanes include special mission aircraft for intelligence, surveillance and reconnaissance missions, and advanced flares and decoys used for night operations and search and rescue missions. The Company also produces smaller solid rocket motors for tactical missiles such as the Hellfire and Maverick.[1]

Business and Financial Metrics

First Quarter Fiscal 2011 Results (ended July 4, 2010)[2]

Alliant reported fully diluted earnings per share in the first quarter of fiscal 2011 rose 7.4 percent to $2.24, compared to $2.09 in the prior-year quarter. Margins in the first quarter improved to 11.1 percent compared to 10.9 percent in the prior-year quarter, despite significantly higher pension expense. The margin increase reflects benefits from cost-management initiatives and operating efficiency improvements across the company. First quarter sales of $1.2 billion were in line with expectations and remained steady compared to the prior-year quarter. First quarter net income rose 8 percent to $75 million, reflecting a lower tax rate, margin improvements, and lower interest expense.

Business Segments

Armament Systems[1]

Armament Systems develops and produces military ammunition and gun systems, commercial products, tactical systems and equipment, and propellant and energetic materials. It also operates the United States Army ammunition plants in Independence, Missouri and Radford, Virginia. The Company produces ammunition for the sport hunting/sport enthusiast market. Its additional brands include Fusion, and Estate Cartridge. The Company also produces ammunition for the law enforcement market. In addition to ammunition, the Company includes ATK's accessories product lines, such as reloading equipment, gun care products, targets and traps, rifle scopes and mounts, and binoculars. These products are marketed under a number of well-know brand names, including RCBS, Outers, Shooter's Ridge, Weaver Optics and Nitrex.

The Company operates the Radford Army Ammunition Plant in Radford, Virginia, where it provides TNT and develops and produces energetics and a variety of warheads and bomb fill, including nitrocellulose. It also manufactures propellants for tank ammunition and tactical rocket motors. Its products include the Guided Advanced Tactical Rocket System (GATR) and flexible energetic products. The group produces medium-caliber chain guns and manages medium-caliber ammunition design and orders. These gun systems are used on a variety of land vehicles, helicopters and naval vessels, including the Bradley Fighting Vehicle, the Expeditionary Fighting Vehicle, Light Armored Vehicle and Apache helicopter. Its products include the Light Weight 25mm gun system and ammunition suite, the Palletized Autonomous Weapon System, and the M230LF gun system. The group provides tactical accessories to the armed forces and allies, special operations forces, law enforcement (both domestic and international) and sport enthusiasts.

Mission Systems[1]

Mission Systems operates across in large caliber direct fires, force protection, precision guided munitions, missiles, propulsion, missile defense, fuzes and warheads, composites, special mission aircraft, electronic warfare, military aircraft structures, commercial aircraft structures and launch structures. During the fiscal year ended March 31, 2010 (fiscal 2010), the Mission Systems consisted of more than 1,000 different programs for United States and allied armed forces, National Aeronautics and Space Administration (NASA) and international governments.

The Company is a provider of composite aircraft components for military and commercial aircraft manufacturers. It provides composite wing skins and nacelles for the F-35 II Lightning, a fifth-generation fighter aircraft for the United States military and its allies. The Company is also under contract to produce composite stringers and frames for the Airbus A350 passenger jetliner. Its additional composite programs include containment cases for General Electric's GEnx engine which is used to power the Boeing 747-8 Cargo aircraft, and the Rolls Royce Trent XWB, which is used to power the A350 aircraft. Mission Systems segment is the production home to the Company's AAR-47 missile warning system, which is used by a variety of fixed and rotor-wing aircraft to defeat shoulder-fired missile threats. The Company holds one of two contracts to develop a next-generation missile warning system, the Joint Allied Threat Awareness System (JATAS). The Company also provides special-mission aircraft to the United States Government and international customers. These aircraft are equipped for advanced intelligence, surveillance and reconnaissance missions, as well as search and rescue missions.

Space Systems[1]

Space Systems produces rocket motor systems for human and cargo launch vehicles, conventional and strategic missiles, missile defense interceptors, small and micro-satellites, satellite components, structures and subsystems, lightweight space deployables and solar arrays, and provides engineering and technical services. Its other products include ordnance, such as decoy and illuminating flares.

The Company is the production home for the Company's four-segment reusable solid rocket motors for the Space Shuttle program and five-segment solid rocket motors under development for NASA's next-generation launch vehicles, the Ares I and Ares V. In addition, the Space Systems group produces a launch abort system (LAS) motor for the Orion crew capsule that was designed to safely pull the crew away from the launch vehicle in the event of an emergency during the launch. The Space Shuttle, Ares I/Ares V, and LAS programs accounted for approximately 14% of ATK's total revenue in fiscal 2010.

The Company also produces large solid rocket motors for the Trident II (D5) Fleet Ballistic Missile and the Minuteman III Intercontinental Ballistic Missile. Additional solid rocket motors being produced by the group include GEM 40 and GEM 60 motors for the Delta II, Orionmotors for the Orbital Science Corporation's Pegasus, Taurus, and Minotaur launch vehicles, and CASTOR motors for Japan's H-11A and Orbital Sciences Taurus rocket.

The Company supplies Orion motors for all three-stages of the ground-based missile defense system. In addition, the Company produces advanced flares and decoys that provide illumination for search and rescue missions, and countermeasures against missile attacks. The Company also produces thermal management systems that provide heating and cooling for spacecraft, either on-orbit or traveling through the solar system.

Acquisitions

On April 12, 2010, ATK announced that it had acquired Blackhawk Industries Products Group Unlimited, LLC.[1]

Trends and Forces

U.S. Foreign Policy Impacts Demand for Defense Products

The majority of ATK's sales, just under 80%, are to the U.S. government, with the U.S. Army comprising 29% and the U.S. Air Force making up 17% of Alliant Techsystems's sales. As such, ATK's success is heavily dependent on the government's continuing demand for defense systems and other military products. The Iraq War benefits ATK, as it boosts government spending on defense products and military equipment.

Eco-Friendly Trend Shifts Towards "Greener" Ammunition

The United States has generally seen a shift towards "greener," more environmentally-friendly policies, most notably the shift towards renewable energy and increased environmental legislation. The equivalent shift in commercial hunting is a movement towards cleaner ammunition, which contains less heavy metal content, and thus pollutes the natural environment less than lead bullets. As the top producer of civil ammunition, ATK has also been a leader in developing methods to produce useable, low-lead content ammunition.[3]

Higher Material Costs Cut Into ATK's Profit

Alliant Techsystems uses many different types of raw materials in manufacturing its products, including aluminum, steel, copper, lead, graphite fiber, and epoxy resins and adhesives.[4] The prices of these materials, especially copper, have risen significantly over the past several years, which increases ATK's costs of doing business. Since most of ATK's business comes from contracts, ATK is at risk of losing profits if commodity prices rise sharply.

Furthermore, for several of ATK's government contracts, the company is required to purchase its raw materials from sources approved by the U.S. Department of Defense.[5] This restricts ATK's freedom to shop around for cost-effective commodities, and can limit ATK's ability to adjust to rising materials prices.

Competitors

Alliant Techsystems's main competitors for aerospace and defense products are:

  • Lockheed Martin (LMT): LMT is the world's largest defense contractor in terms of revenue. Lockheed Martin manufactures weapons, systems, and military vehicles, and is best known for providing its cutting edge airplanes and electronic systems to the U.S. Government.
  • Raytheon Company (RTN): Raytheon specializes in manufacturing radars and elector-optical sensors (airborne, naval and ground based), missiles, satellite sensors, radios and digital communication systems, and missile defense. Raytheon diversifies in smaller subcontracts and relies on international contracts more than any of its competitors.
  • General Dynamics (GD): GD serves clients including from domestic and international governments and militaries. It is also the leading manufacturer of corporate jets, with its Gulfstream fleet accounting for one fourth of all business jet sales.
  • Orbital Sciences (ORB) ORB specializes in building satellites and rockets.

While ATK is significantly smaller than its competitors, it seeks to gain a competitive advantage by focusing on its research and development programs, in order to improve existing products and develop new ones to meet clients' needs. ATK and its competitors are susceptible to many of the same risks, as they are all substantially influenced by the U.S. Department of Defense budget and geopolitical factors.

In the civil ammunition and accessories market, ATK competes with:



Footnotes

  1. 1.0 1.1 1.2 1.3 1.4 1.5 1.6 Reuters: ATK Company Profile
  2. PR Newswire: "ATK Reports Strong FY11 First-Quarter Operating Results" August 5, 2010
  3. from 2007 Annual Report (pages 4-5)
  4. from 2007 Annual Report (under Item 1: Business, page 9)
  5. from 2007 Annual Report (under Item 1: Business, page 9)
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki