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Exhibit 99.1
ORBITAL ATK ANNOUNCES FOURTH QUARTER AND FULL YEAR 2015 FINANCIAL RESULTS
Company Posts Strong Quarterly and Full Year Results
and Issues 2016 Guidance
Dulles, Virginia February 29 2016 -- Orbital ATK, Inc. (NYSE: OA), a global leader in aerospace and defense technologies, today announced both GAAP and adjusted financial results for the fourth calendar quarter and calendar year ended December 31, 2015. The company is presenting adjusted results because it believes these non-GAAP metrics are useful to understand the underlying operating performance of the company by including the pre-merger Orbital and ATK Aerospace and Defense results in comparable periods and excluding significant transaction and merger-related expenses and other non-operational expenses in all periods (for details see reconciliation tables at the end of this release).
Orbital ATK reported GAAP revenues of $1,137 million for the fourth quarter of 2015, compared to $747 million in the same quarter in 2014. GAAP operating income and profit margin were $87.3 million and 7.7%, respectively, in the fourth quarter of 2015 compared to $81.0 million and 10.8%, respectively, in the same quarter of 2014. The company reported GAAP earnings per diluted share of $0.88 in the fourth quarter of 2015 compared to earnings per diluted share of $0.74 in the fourth quarter of 2014. Net cash provided by operating activities was $170.3 million in the quarter ended December 31, 2015.
Orbital ATK reported adjusted revenues of $1,137 million in the fourth quarter of 2015 compared to adjusted revenues of $1,116 million in the comparable period of 2014. Adjusted operating income and profit margin were $133.0 million and 11.7%, respectively, in the fourth quarter of 2015, compared to $127.7 million and 11.4%, respectively, in the same quarter of 2014. Adjusted diluted earnings per share in the quarter were $1.45, compared to $1.26 for the fourth quarter of 2014. Free cash flow was $122.2 million in the quarter ended December 31, 2015.
Full year 2015 GAAP revenues were $4,369 million, compared to $2,995 million in 2014. GAAP operating income and profit margin were $319.6 million and 7.3%, respectively, in 2015, compared to $311.1 million and 10.4%, respectively, in 2014.
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Orbital ATK, Inc. ǀ 45101 Warp Drive, Dulles, VA 20166 ǀ 703-406-5000
Orbital ATK Announces Fourth Quarter and Full Year 2015 Financial Results
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GAAP earnings per diluted share in 2015 were $2.85 compared to $2.78 in 2014. Net cash provided by operating activities was $443.5 million in 2015.
Full year 2015 adjusted revenues were $4,515 million, compared to $4,438 million in 2014. Adjusted operating income and profit margin were $499.8 million and 11.1%, respectively, in 2015, compared to $438.2 million and 9.9%, respectively, in 2014. Adjusted diluted earnings per share in 2015 were $5.02, compared to $4.18 in 2014. Adjusted free cash flow was $290.0 million in 2015.
“Orbital ATK completed the year with strong financial and operational results for both the fourth quarter and full year,” said David W. Thompson, Orbital ATK’s President and Chief Executive Officer. “In the fourth quarter, our revenue, profit margin, earnings per share and cash flow all exceeded our expectations. For the full year, record new orders generated a very strong 116% book-to-bill ratio, giving us excellent visibility into the work we will perform for our customers over the next several years.”
Mr. Thompson added, “We recently marked the one-year anniversary of completing the merger between Orbital and ATK Aerospace and Defense. I want to thank our customers, employees and shareholders for their encouragement, hard work and support throughout the year, which helped make the transition and integration such a success in a relatively short period of time.”
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The adjusted financial results contained in this press release are non-GAAP financial measures and are adjusted to give effect to the merger of Orbital Sciences Corporation (Orbital) and Alliant Techsystems Inc. (ATK) on February 9, 2015 as if it had occurred on January 1, 2014. In addition, adjusted results exclude significant transaction and merger-related expenses and other non-operational expenses in all periods. Please refer to the reconciliation tables contained in the “Disclosure of Non-GAAP Financial Measures” section of this press release for more details on those adjustments.
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Consolidated Financial Highlights
GAAP Results
Fourth Quarter | Twelve Months | |||||||||||||
($ in millions, except per share data) | 2015 | 2014 | 2015 | 2014 | ||||||||||
Revenues | $ | 1,137 | $ | 747 | $ | 4,369 | $ | 2,995 | ||||||
Operating Income | 87.3 | 81.0 | 319.6 | 311.1 | ||||||||||
Net Income | 52.3 | 44.5 | 169.6 | 166.0 | ||||||||||
Diluted Earnings Per Share | $ | 0.88 | $ | 0.74 | $ | 2.85 | $ | 2.78 | ||||||
Adjusted Results
All “adjusted” financial measures discussed below are non-GAAP adjusted financial results from continuing operations. See the reconciliation tables for details.
Fourth Quarter | Twelve Months | |||||||||||||
($ in millions, except per share data) | 2015 | 2014 | 2015 | 2014 | ||||||||||
Adjusted Revenues | $ | 1,137 | $ | 1,116 | $ | 4,515 | $ | 4,438 | ||||||
Adjusted Operating Income | 133.0 | 127.7 | 499.8 | 438.2 | ||||||||||
Adjusted Net Income | 86.5 | 75.0 | 298.9 | 249.3 | ||||||||||
Adjusted Diluted Earnings Per Share | $ | 1.45 | $ | 1.26 | $ | 5.02 | $ | 4.18 | ||||||
Adjusted results. See reconciliation tables in the "Disclosure of Non-GAAP Financial Measures" section for details. | ||||||||||||||
Adjusted revenues increased $21 million, or 1.9%, in the fourth quarter of 2015 compared to adjusted revenues in the same period in 2014, driven by a $31 million increase in Flight Systems Group (“FSG”) adjusted revenues, an $11 million increase in Space Systems Group (“SSG”) adjusted revenues, and a $3 million decrease in corporate eliminations. These revenue increases were partially offset by a $23 million decrease in Defense Systems Group (“DSG”) adjusted revenues.
Adjusted operating income increased $5.3 million, or 4.2%, in the fourth quarter of 2015 compared to the same quarter in 2014 as a result of a $21.6 million increase in FSG, a $22.8 million increase in SSG and a $2.3 million increase in DSG, mostly offset by a $41.4 million decrease in corporate income primarily resulting from the 2014 insurance settlement.
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Adjusted revenues increased $77 million, or 1.7%, in 2015 compared to adjusted revenues in 2014, driven by a $33 million increase in FSG adjusted revenues and a $122 million increase in SSG adjusted revenues. These revenue increases were partially offset by a $78 million decrease in DSG adjusted revenues. Corporate eliminations were flat year over year.
Adjusted operating income increased $61.6 million, or 14.1%, in 2015 compared to 2014, driven by a $81.4 million increase in FSG, a $35.9 million increase in SSG, and a $4.6 million increase in DSG adjusted operating income, partly offset by a $60.3 million decrease in corporate primarily resulting from the 2014 insurance settlement.
Net income and earnings per share for both quarters reflect an income tax rate of 25.4% for the fourth quarter of 2015 and an income tax rate of 34.0% for the fourth quarter of 2014. The tax rate in the fourth quarter of 2015 reflects the retroactive extension of the R&D tax credit.
“We closed 2015 with another strong quarter of financial results, including strong cash flow,” said Garrett E. Pierce, the company’s Chief Financial Officer. “As we look forward to 2016 and beyond, we expect to continue to see benefits from the merger in terms of additional cost and revenue synergies that will propel margin expansion, top-line growth and continued robust free cash flow.”
Mr. Pierce also noted, “Beginning January 1, 2016, we moved to a calendar-based fiscal year, completing the transition that occurred throughout 2015 after the merger.”
Segment Results
Orbital ATK conducts its operations in three business units: Flight Systems Group, Defense Systems Group and Space Systems Group. Each of these groups in turn consists of several product-line divisions. Segment operating results include pension expense recoverable under U.S. Government contracts as determined in accordance with government Cost Accounting Standards (CAS). The difference between pension expense recorded in accordance with GAAP Financial Accounting Standards (FAS) and pension costs recorded in accordance with CAS is reported at the corporate level. The amortization of intangible assets recorded in connection with the merger of Orbital and ATK is also reported in corporate results.
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Flight Systems Group:
GAAP Results
Fourth Quarter | Twelve Months | |||||||||||||||
($ in millions) | 2015 | 2014 | % Change | 2015 | 2014 | % Change | ||||||||||
Revenues | $ | 386 | $ | 257 | 50.3 | % | $ | 1,468 | $ | 1,013 | 44.9 | % | ||||
Operating Income | 51.7 | 35.9 | 44.1 | % | 239.1 | 125.1 | 91.2 | % | ||||||||
Operating Margin | 13.4 | % | 14.0 | % | 16.3 | % | 12.3 | % | ||||||||
Adjusted Results
Fourth Quarter | Twelve Months | |||||||||||||||
($ in millions) | 2015 | 2014 | % Change | 2015 | 2014 | % Change | ||||||||||
Adjusted Revenues | $ | 386 | $ | 355 | 8.7 | % | $ | 1,506 | $ | 1,473 | 2.2 | % | ||||
Adjusted Operating Income | 51.7 | 30.1 | 71.5 | % | 241.1 | 159.7 | 51.0 | % | ||||||||
Adjusted Operating Margin | 13.4 | % | 8.5 | % | 16.0 | % | 10.8 | % | ||||||||
Adjusted results. See reconciliation tables in the "Disclosure of Non-GAAP Financial Measures" section for details. | ||||||||||||||||
FSG adjusted revenues for the fourth quarter of 2015 increased $31 million, or 8.7%, primarily resulting from higher Launch Vehicles Division revenues. Adjusted operating income increased $21.6 million, or 71.5%, while margins increased due to profit improvement in the same division.
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Defense Systems Group:
GAAP Results
Fourth Quarter | Twelve Months | |||||||||||||||
($ in millions) | 2015 | 2014 | % Change | 2015 | 2014 | % Change | ||||||||||
Revenues | $ | 442 | $ | 466 | (5.2 | )% | $ | 1,829 | $ | 1,944 | (5.9 | )% | ||||
Operating Income | 42.6 | 48.6 | (12.3 | )% | 161.9 | 184.4 | (12.2 | )% | ||||||||
Operating Margin | 9.6 | % | 10.4 | % | 8.9 | % | 9.5 | % | ||||||||
Adjusted Results
Fourth Quarter | Twelve Months | |||||||||||||||
($ in millions) | 2015 | 2014 | % Change | 2015 | 2014 | % Change | ||||||||||
Adjusted Revenues | $ | 442 | $ | 465 | (5.0 | )% | $ | 1,836 | $ | 1,914 | (4.1 | )% | ||||
Adjusted Operating Income | 50.9 | 48.6 | 4.9 | % | 190.4 | 185.8 | 2.5 | % | ||||||||
Adjusted Operating Margin | 11.5 | % | 10.4 | % | 10.4 | % | 9.7 | % | ||||||||
Adjusted results. See reconciliation tables in the "Disclosure of Non-GAAP Financial Measures" section for details. | ||||||||||||||||
DSG adjusted revenues for the fourth quarter of 2015 decreased $23 million, or 5.0%, and adjusted operating income increased $2.3 million, or 4.9%, primarily from timing of contracts in multiple divisions.
Space Systems Group:
GAAP Results
Fourth Quarter | Twelve Months | |||||||||||||||
($ in millions) | 2015 | 2014 | % Change | 2015 | 2014 | % Change | ||||||||||
Revenues | $ | 327 | $ | 69 | 375.3 | % | $ | 1,164 | $ | 309 | 277.3 | % | ||||
Operating Income | 20.4 | 4.1 | 394.0 | % | 51.3 | 23.3 | 120.5 | % | ||||||||
Operating Margin | 6.3 | % | 6.0 | % | 4.4 | % | 7.5 | % | ||||||||
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Adjusted Results
Fourth Quarter | Twelve Months | |||||||||||||||
($ in millions) | 2015 | 2014 | % Change | 2015 | 2014 | % Change | ||||||||||
Adjusted Revenues | $ | 327 | $ | 316 | 3.5 | % | $ | 1,260 | $ | 1,139 | 10.7 | % | ||||
Adjusted Operating Income | 26.8 | 4.0 | 562.7 | % | 98.3 | 62.4 | 57.6 | % | ||||||||
Adjusted Operating Margin | 8.2 | % | 1.3 | % | 7.8 | % | 5.5 | % | ||||||||
Adjusted results. See reconciliation tables in the "Disclosure of Non-GAAP Financial Measures" section for details. | ||||||||||||||||
SSG adjusted revenues for the fourth quarter of 2015 increased $11 million, or 3.5%, resulting from higher Commercial Satellite Division and higher Civil and Defense Satellite Division revenues. Adjusted operating income increased $22.8 million, or 562.7%, in the quarter resulting from profit improvements in the Civil and Defense Satellite Division.
Free Cash Flow and Capital Allocation Plan
Free cash flow in the fourth quarter of 2015 was $122.2 million. For calendar year 2015, adjusted free cash flow was $290.0 million, which resulted from $443.5 million of cash from continuing operations less $152.9 million of capital expenditures and adjustments of $0.6 million (see non-GAAP reconciliation table for details).
The company also reported that it repurchased approximately $15 million of its stock and paid dividends of approximately $15 million during the fourth quarter of 2015. For calendar year 2015, the company repurchased approximately $76 million of its stock and paid dividends of approximately $57 million.
Operational Highlights
Orbital ATK’s strong operational execution led to the achievement of numerous milestones in the quarter. These included the following important events:
In the Flight Systems Group, integration of the upgraded first stage propulsion system for the Antares rocket progressed well and a second ship-set of engines was also received in the quarter. The company carried out several successful launches, including an Intermediate Range Ballistic Target and a Patriot Target Vehicle for missile defense testing and two Coyote naval target missiles. Orbital ATK supported several successful customer launches with propulsion systems and composite structures, including a Minuteman III missile for the Air Force and three United Launch Alliance (ULA) Atlas V launch vehicles. The company reached production milestones in its aerospace
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structures division, including delivery of the 3,000th F-35 part and the 200th Rolls-Royce Trent XWB engine case.
In the Defense Systems Group, Orbital ATK delivered more than 7,000 tactical missile rocket motors, warheads and related products, and produced over 250 million rounds of small- and medium-caliber ammunition in the fourth quarter. The company also increased production of its AARGM tactical missiles and successfully demonstrated a hypersonic air-breathing engine for future missile applications as well as precision weapons technologies for customers. DSG also opened in-country offices in Saudi Arabia and United Arab Emirates to better support customers in those countries.
In the Space Systems Group, the company successfully launched its Cygnus spacecraft to the International Space Station aboard a ULA Atlas V rocket from Cape Canaveral Air Force Station, Florida, marking the resumption of cargo delivery missions for NASA. In addition, production remained on schedule for several commercial satellite programs, including final testing and ground delivery of the Thaicom-8 communications satellite that is currently scheduled for launch this spring. The company-built Dawn interplanetary spacecraft reached its final orbit around Ceres, returning first-of-its-kind images and scientific data about the giant asteroid. Orbital ATK also shipped fuel and oxidizer tanks for integration into NASA’s James Webb Space Telescope and carried out five successful suborbital research rocket launches during the fourth quarter.
Commenting on fourth quarter 2015 operations, Chief Operating Officer Blake E. Larson said, “Our focus on operational excellence throughout the company resulted in another quarter of very solid progress on numerous major contracts. In the quarter, we reinstated cargo delivery missions to the International Space Station for NASA, ramped up our monthly production rate on the A350 program for Airbus, increased production rates on the AARGM tactical missile program for the U.S. Navy, and met production demand in our small caliber ammunition business for commercial and government customers. We also exceeded our cost synergy targets for 2015, with more progress to be made this year, which should enable us to reach the high end of our expectations.”
New Business Summary
In the fourth quarter of 2015, Orbital ATK recorded approximately $855 million in new firm and option contract bookings. In addition, the company received approximately $305 million in option exercises under existing contracts. For the full year, the company booked about $6.7 billion in new firm and option orders and received $1.3 billion in option exercises. As of December 31, 2015, the company’s firm backlog was approximately $8.1 billion and its total backlog (including options, indefinite quantity contract and undefinitized orders) was approximately $13.5 billion.
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Calendar Year 2016 Financial Guidance
The company provided the following financial guidance for calendar year 2016. The guidance does not include any merger-related expenses that may occur in 2016. The guidance also includes about $50 million of annual non-cash intangible asset amortization expense resulting from the merger in early 2015.
Guidance | 2016 Guidance |
Revenues ($ in millions) | $4,575 - $4,650 |
Operating Income Profit Margin | 11.0% - 11.5% |
Diluted Earnings Per Share | $5.25 - $5.50 |
Free Cash Flow ($ in millions) | $275 - $325 |
Orbital ATK currently expects interest expense of approximately $60 million and an effective tax rate of approximately 32% for the year. Pension funding is expected to be approximately $40 million and capital expenditures are projected at about $215 million for the year. Diluted weighted average shares outstanding are expected to be about 58 million in 2016. The FAS/CAS pension adjustment is expected to be about $80 million in 2016.
Other SEC Filings
Earlier today, Orbital ATK reported on a Form 8-K that it is restating its financial statements for the quarterly periods ended July 5, 2015 and October 4, 2015. The accounting change resulting from the restatement of the 2015 quarterly periods is reflected in the fourth quarter and calendar year 2015 results presented in this press release. The restatement did not have a material impact on the company’s consolidated financial statements for the quarter and fiscal year ended March 31, 2015, nor does the company anticipate a material impact of the company’s consolidated financial statements for the nine-month transition period ended December 31, 2015. The restatement did not have a negative impact of the company’s operating cash flow, cash balances or backlog.
Also, as reported in our Form 12b-25 filing with the SEC filed earlier today, the company is delaying the filing of its Form 10-K for the nine-month transition period ended December 31, 2015. As such, amounts in this press release are unaudited and subject to change. The company expects to file the Form 10-K within the 15-day period permitted by SEC rules.
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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. (EDT) March 1, 2016. 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 53395841. The recording will be available until March 15, 2016. Orbital ATK has also posted on its investor relations website a presentation of fourth quarter and full calendar year 2015 financial results and operational highlights.
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 such social media channels could be deemed to be material. Therefore, we encourage investors, the media and others interested in Orbital ATK to follow the information we post 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 12,000 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 are subject to risks and
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uncertainties that could cause actual results or performance to differ, including the following: potential difficulties in achieving expected merger synergies and efficiencies within the expected time-frames or at all; the integration of business operations 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; 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 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.
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 itemized in the tables below. In addition, the adjusted results reflect estimates of interest expense, the income tax rate and diluted shares that would be in effect for the periods as if the merger of Orbital and ATK and divestiture of ATK’s Sporting Group had occurred on January 1, 2014. Please refer to the reconciliation tables below for more details.
We define free cash flow as GAAP (U.S. Generally Accepted Accounting Principles) net cash provided by (used in) operating activities less capital expenditures for property, plant and equipment. 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. The company’s management also uses free cash flow in its operational decision-making.
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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 results are as follows:
Adjusted Consolidated Results
Quarter Ended December 31, 2015
Operating | Operating | |||||||||
($ in millions, except per share data) | Revenue | Income | Margin | |||||||
GAAP | $ | 1,137 | $ | 87.3 | 7.7 | % | ||||
Merger-related Adjustments (1) | 10.6 | |||||||||
Business Rationalization (2) | $ | 35.1 | ||||||||
As Adjusted | $ | 1,137 | $ | 133.0 | 11.7 | % | ||||
Interest expense | (16.9 | ) | ||||||||
Taxes (3) | (29.5 | ) | ||||||||
Minority Interest | (0.1 | ) | ||||||||
Adjusted Net Income | $ | 86.5 | ||||||||
Adjusted EPS (4) | $ | 1.45 | ||||||||
(1) Includes the impact of merger related costs. | ||||||||||
(2) Includes the impact of business rationalization costs. | ||||||||||
(3) Calculated using an effective tax rate of 25.4%. | ||||||||||
(4) Calculated using a diluted share count of 59.57 million. | ||||||||||
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Twelve Months Ending December 31, 2015
Operating | Operating | |||||||||
($ in millions, except per share data) | Revenue | Income | Margin | |||||||
GAAP | $ | 4,369 | $ | 319.6 | 7.3 | % | ||||
Orbital results for Jan. 1 to Feb. 8, 2015 | 129 | (7.5 | ) | |||||||
$ | 4,498 | $ | 312.1 | 6.9 | % | |||||
Transaction Expenses | 33.4 | |||||||||
Severance and Accelerated Vesting | 29.9 | |||||||||
Intangible Amortization | (7.0 | ) | ||||||||
Goodwill Impairment | 34.3 | |||||||||
Legal Settlement | 25.0 | |||||||||
Other (1) | 17 | 72.2 | ||||||||
As Adjusted | $ | 4,515 | $ | 499.8 | 11.1 | % | ||||
Interest expense (2) | (63.3 | ) | ||||||||
Taxes (3) | (137.3 | ) | ||||||||
Minority Interest | (0.3 | ) | ||||||||
Adjusted Net Income | $ | 298.9 | ||||||||
Adjusted EPS (4) | $ | 5.02 | ||||||||
(1) Includes merger-related change in intracompany eliminations, restructuring and other transaction impacts. | ||||||||||
(2) Interest expense excludes an approximately $9 million charge related to the September 2015 debt refinance transaction. | ||||||||||
(3) Calculated using an effective tax rate of 31.5%. | ||||||||||
(4) Calculated using a diluted share count of 59.51 million. | ||||||||||
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Quarter Ended December 31, 2014
Operating | Operating | |||||||||
($ in millions, except per share data) | Revenue | Income | Margin | |||||||
GAAP, From Continuing Operations | $ | 747 | $ | 81.0 | 10.8 | % | ||||
Orbital results for October 1 to December 31, 2014 (1) | 366 | 42.5 | ||||||||
$ | 1,113 | $ | 123.4 | 11.1 | % | |||||
Intangible Amortization | (11.8 | ) | ||||||||
Transaction Expenses | 6.2 | |||||||||
Change In Intercompany Eliminations | 3 | 9.9 | ||||||||
As Adjusted | $ | 1,116 | $ | 127.7 | 11.4 | % | ||||
Interest expense (2) | (13.8 | ) | ||||||||
Taxes (3) | (38.7 | ) | ||||||||
Minority Interest | (0.1 | ) | ||||||||
Adjusted Net Income | $ | 75.0 | ||||||||
Adjusted EPS (4) | $ | 1.26 | ||||||||
(1) Per Orbital Sciences Corporation operating results. | ||||||||||
(2) Calculated assuming a blended interest rate of 3.6% on $1.6 billion average outstanding debt. | ||||||||||
(3) Calculated using an effective tax rate of 34%. | ||||||||||
(4) Calculated using a diluted share count of 59.75 million. | ||||||||||
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Twelve Months Ending December 31, 2014
Operating | Operating | |||||||||
($ in millions, except per share data) | Revenue | Income | Margin | |||||||
GAAP, From Continuing Operations | $ | 2,995 | $ | 311.1 | 10.4 | % | ||||
Orbital results for January 1 to December 31, 2014 (1) | 1,345 | 126.5 | ||||||||
$ | 4,341 | $ | 437.6 | 10.1 | % | |||||
Transaction Expenses | 28.4 | |||||||||
Intangible Amortization | (48.6 | ) | ||||||||
Pension Close Out | (30 | ) | (30.5 | ) | ||||||
Environmental Settlement | 5.2 | |||||||||
Change In Intercompany Eliminations | 127 | 35.4 | ||||||||
Facility Rationalization | 10.6 | |||||||||
As Adjusted | $ | 4,438 | $ | 438.2 | 9.9 | % | ||||
Interest expense (2) | (60.0 | ) | ||||||||
Taxes (3) | (128.6 | ) | ||||||||
Minority Interest | (0.3 | ) | ||||||||
Adjusted Net Income | $ | 249.3 | ||||||||
Adjusted EPS (4) | $ | 4.18 | ||||||||
(1) Per Orbital Sciences Corporation Form 10-Q for first nine months of 2014 and operating results for the quarter ended December 31, 2014. | ||||||||||
(2) Calculated assuming a blended interest rate of 3.6% on $1.6 billion average outstanding debt. | ||||||||||
(3) Calculated using an effective tax rate of 34%. | ||||||||||
(4) Calculated using a diluted share count of 59.66 million. | ||||||||||
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Flight Systems Group Adjusted Results
Fourth Quarter 2015 | Twelve Months 2015 | |||||||||||||||
($ in millions) | Revenue | Operating Income | Operating Margin | Revenue | Operating Income | Operating Margin | ||||||||||
GAAP as Reported | $ | 386 | $ | 51.7 | 13.4 | % | $ | 1,468 | $ | 239.1 | 16.3 | % | ||||
Orbital results for Jan. 1 to Feb. 8, 2015 | — | — | 38 | 2.0 | ||||||||||||
As Adjusted | $ | 386 | $ | 51.7 | 13.4 | % | $ | 1,506 | $ | 241.1 | 16.0 | % | ||||
Fourth Quarter 2014 | Twelve Months 2014 | |||||||||||||||
($ in millions) | Revenue | Operating Income | Operating Margin | Revenue | Operating Income | Operating Margin | ||||||||||
GAAP as Reported | $ | 257 | $ | 35.9 | 14.0 | % | $ | 1,013 | $ | 125.1 | 12.3 | % | ||||
Orbital results (1) | 118 | (5.7 | ) | 511 | 33.8 | |||||||||||
$ | 374 | $ | 30.1 | 8.0 | % | $ | 1,524 | $ | 158.9 | 10.4 | % | |||||
Other eliminations | (20 | ) | (51 | ) | 0.8 | |||||||||||
As Adjusted | $ | 355 | 30.1 | 8.5 | % | $ | 1,473 | 159.7 | 10.8 | % | ||||||
(1) Per Orbital Sciences Corporation operating results for the quarter ended December 31, 2014. | ||||||||||||||||
Defense Systems Group Adjusted Results
Fourth Quarter 2015 | Twelve Months 2015 | |||||||||||||||
($ in millions) | Revenue | Operating Income | Operating Margin | Revenue | Operating Income | Operating Margin | ||||||||||
GAAP as Reported | $ | 442 | $ | 42.6 | 9.6 | % | $ | 1,829 | $ | 161.9 | 8.9 | % | ||||
Business Rationalization | — | 3.6 | — | 3.6 | ||||||||||||
Transaction-related Impacts | — | 4.8 | 7 | 24.9 | ||||||||||||
As Adjusted | $ | 442 | $ | 50.9 | 11.5 | % | $ | 1,836 | $ | 190.4 | 10.4 | % | ||||
Fourth Quarter 2014 | Twelve Months 2014 | |||||||||||||||
($ in millions) | Revenue | Operating Income | Operating Margin | Revenue | Operating Income | Operating Margin | ||||||||||
GAAP as Reported | $ | 466 | $ | 48.6 | 10.4 | % | $ | 1,944 | $ | 184.4 | 9.5 | % | ||||
Pension Close Out and Other Eliminations | (1 | ) | — | (30 | ) | 1.3 | ||||||||||
As Adjusted | $ | 465 | $ | 48.6 | 10.4 | % | $ | 1,914 | $ | 185.8 | 9.7 | % | ||||
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Orbital ATK Announces Fourth Quarter and Full Year 2015 Financial Results
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Space Systems Group Adjusted Results
Fourth Quarter 2015 | Twelve Months 2015 | |||||||||||||||
($ in millions) | Revenue | Operating Income | Operating Margin | Revenue | Operating Income | Operating Margin | ||||||||||
GAAP as Reported | $ | 327 | $ | 20.4 | 6.3 | % | $ | 1,164 | $ | 51.3 | 4.4 | % | ||||
Orbital results for Jan. 1 to Feb. 8, 2015 | — | — | 92 | 2.3 | ||||||||||||
$ | 327 | $ | 20.4 | 6.3 | % | $ | 1,257 | $ | 53.6 | 4.3 | % | |||||
Goodwill Impairment | — | — | — | 34.3 | ||||||||||||
Business Rationalization | — | 6.4 | — | 6.4 | ||||||||||||
Transaction-related Impacts | — | — | 4 | 4.0 | ||||||||||||
As Adjusted | $ | 327 | $ | 26.8 | 8.2 | % | $ | 1,260 | $ | 98.3 | 7.8 | % | ||||
Third Quarter 2014 | First Nine Months 2014 | |||||||||||||||
($ in millions) | Revenue | Operating Income | Operating Margin | Revenue | Operating Income | Operating Margin | ||||||||||
GAAP as Reported | $ | 69 | $ | 4.1 | 6.0 | % | $ | 309 | $ | 23.3 | 7.5 | % | ||||
Orbital results (1) | 252 | 1.4 | 851 | 43.2 | ||||||||||||
$ | 321 | $ | 5.5 | 1.7 | % | $ | 1,160 | $ | 66.4 | 5.7 | % | |||||
Other Eliminations | (5 | ) | (1.5 | ) | (21 | ) | (4 | ) | ||||||||
As Adjusted | $ | 316 | 4.0 | 1.3 | % | $ | 1,139 | $ | 62.4 | 5.5 | % | |||||
(1) Per Orbital Sciences Corporation operating results for the quarter ended December 31, 2014. | ||||||||||||||||
Free Cash Flow and Adjusted Free Cash Flow
Fourth | Twelve | |||||||
Quarter | Months | |||||||
($ in millions) | 2015 | 2015 | ||||||
Net Cash Used In/Provided By Continuing Operating Activities | $ | 170.3 | $ | 443.5 | ||||
Capital Expenditures | (48.2 | ) | (152.9 | ) | ||||
122.2 | 290.6 | |||||||
Adjustments | — | (0.6 | ) | (1) | ||||
Adjusted Free Cash Flow | $ | 122.2 | 290.0 | |||||
(1) Includes Orbital cash flow for pre-merger period; excludes merger and other non-recurring cash expenditures and adjusts for the timing of certain significant cash expenditures. | ||||||||
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Orbital ATK Announces Fourth Quarter and Full Year 2015 Financial Results
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Condensed Consolidated Statements of Income from Continuing Operations
GAAP As Reported
Nine Months Ended | ||||
(In millions, except per share data) | December 31, 2015 | |||
Sales | $ | 3,399 | ||
Cost of sales | (2,498 | ) | ||
Operating expenses | (630 | ) | ||
Gain on settlement | 50 | |||
Operating income | 321 | |||
Interest expense | (57 | ) | ||
Pretax income | 264 | |||
Income taxes | (83 | ) | ||
Net income from continuing operations | $ | 181 | ||
Basic net income from continuing operations per common share | $ | 3.05 | ||
Weighted-average number of common shares outstanding (in thousands) | 59,358 | |||
Diluted net income from continuing operations per common share | $ | 3.02 | ||
Weighted-average number of diluted common shares outstanding (in thousands) | 59,915 | |||
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Condensed Consolidated Balance Sheets
GAAP As Reported
($ In millions) | December 31, 2015 | March 31, 2015 | |||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 104 | $ | 139 | |||
Net receivables | 1,792 | 1,794 | |||||
Other current assets | 354 | 455 | |||||
Total current assets | 2,250 | 2,388 | |||||
Net property, plant and equipment | 806 | 807 | |||||
Goodwill | 1,853 | 1,875 | |||||
Other noncurrent assets | 443 | 434 | |||||
Total assets | $ | 5,352 | $ | 5,504 | |||
Liabilities and Equity | |||||||
Total current liabilities | $ | 974 | $ | 1,097 | |||
Long-term debt | 1,450 | 1,529 | |||||
Other noncurrent liabilities | 981 | 1,090 | |||||
Total liabilities | 3,405 | 3,716 | |||||
Total equity | 1,947 | 1,788 | |||||
Total liabilities and equity | $ | 5,352 | $ | 5,504 | |||
Investor and Media Contact:
Barron Beneski (703) 406-5528
Orbital ATK Inc.
Barron.Beneski@orbitalatk.com
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