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ATK Receives Orders for Small-Caliber Ammunition Under New Production Contract at Lake City Army Ammunition Plant — Press Release

Orders Total Approximately $387 Million

ARLINGTON, Va., Nov. 11 , 2013 /PRNewswire/ — ATK (NYSE: ATK) has received orders for approximately $387 million for small-caliber rifle ammunition to be produced at the Lake City Army Ammunition Plant. The orders fall under the plant’s new production contract, which began Oct. 1, 2013, and include a mix of 5.56mm, 7.62mm and .50-caliber high-quality military ammunition.

In 2012, the U.S. Army Contracting Command, Rock Island (ACC-RI) selected ATK to continue production of small-caliber ammunition and operation and maintenance of the Independence, Mo., plant under new contracts. The contracts initially cover the next seven years through FY19, with a potential award term for a total contract term of up to 10 years.

“Our vision for Lake City is a highly-efficient production facility that is lean, scalable and sustainable for the next generation of the nation’s warfighters,” said Kent Holiday, vice president and general manager of ATK’s Small Caliber Systems division.

“ATK is giving greater value to our government customer through the new operations contract at Lake City,” said Mike Kahn, president of ATK’s Defense Group. “Our ammunition has no equal in its quality and reliability, which is the standard we set for our support of the warfighter. Our ATK-wide focus on efficiency, quality and affordability allows us to deliver an excellent value to our military customers.”

ATK Defense Group is an industry leader in providing innovative and affordable ammunition, precision and strike weapons, electronic warfare systems, and missile components across air-, sea-, and land-based systems.

ATK is an aerospace, defense and commercial products company with operations in 22 states, Puerto Rico and internationally. News and information can be found on the Internet at www.atk.com, on Facebook at www.facebook.com/atk or on Twitter @ATK.

Certain information discussed in this press release constitutes forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Although ATK believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved. Forward-looking information is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Among those factors are: changes in governmental spending, budgetary policies and product sourcing strategies; the company’s competitive environment; the terms and timing of awards and contracts; and economic conditions. ATK undertakes no obligation to update any forward-looking statements. For further information on factors that could impact ATK, and statements contained herein, please refer to ATK’s most recent Annual Report on Form 10-K and any subsequent quarterly reports on Form 10-Q and current reports on Form 8-K filed with the U.S. Securities and Exchange Commission.

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Navy Awards Contracts for New Ship Components

The building of a modern warship requires not only the initial large contract with the builder but numerous other ones to buy components and support for the actual ships. Other systems are purchased with separate contracts and then items are provided to the builder for installation on the ships as they are assembled. The U.S. Navy is currently building new aircraft carriers, missile destroyers, Littoral Combats Ships (LCS), amphibious warfare ships as well as support vessels.

The LCS is being built by 2 different yards under 2 separate contracts. The LCS-1 design are made in Wisconsin by Marinette Marine and Lockheed Martin (LMT). The LCS-2 in Mobile, AL by Austal America and General Dynamics (GD). While they have dissimilar hull designs the basic weapon fit remains the same and both will carry mission modules. Up to 20 LCS are on contract to be built with the Navy periodically issuing contracts for 2 from each builder.

2 related contracts were recently awarded to support U.S. Navy ship construction. First General Dynamics (GD) received one for 8 MK 46 Naval Weapon Systems. The MK 46 is a 30mm cannon mounted in a stabilized turret. These will be installed on LPD-12 amphibious assault ships and the LCS. The contract is worth $26 million and is a follow on to previous contracts under which 30 systems have been delivered.

Then ATK (ATK), the ammunition and explosive manufacturer, received a contract for 30mm ammo. This $12 million contract is for incendiary rounds for the MK 46. It is a 5 year Indefinite Delivery / Indefinite Quantity (ID/IQ) contract with 1 base and 4 option years. As an ID/IQ the Navy will order off of the contract what is required to outfit ships with the Mk 46 weapon.

With Sequestration and the budget reductions recently passed by Congress and agreed to by the Obama Administration FY13 will probably not see many more major contracts awarded. There may be many though like these to support bigger programs already underway.

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BAE Gets Contract for Radford Ammo Plant

Two years ago the British based BAE Systems (BAE:LSE) was able to win away from ATK (ATK) the contract to run the U.S. Army’s Radford facility that manufactures explosives. ATK had had the contract to operate it for several years and due to the demands of the fighting in Afghanistan and Iraq the plant generated a great deal of revenue for the operator. It was a hard fought win due to a protest and there being multiple competitions to evaluate the different proposals.

With the current budgetary situation and the end of Iraq’s fighting along with the winding down of Afghanistan it could be expected that demand for the products at Radford may go down. Luckily for BAE the Army has just announced that they awarded the company a large contract to manufacture explosives primarily for artillery shells at the facility. This could be worth up to $780 million if all options are executed.

As the U.S. military returns from Afghanistan it will need to replenish stocks of munitions as well as continue building newer, more reliable one. Training operations will also need to be supported. While this means that demand may not be as high as before there will still be consumption of artillery and other shells which will require production of new stock at Radford.

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ATK Awarded $17 Million Contract for AIM-9P Sidewinder Rocket Motors — Press Release

ATK Rocket Motors Support Sustainment of AIM-9P Missiles
Production of ATK’s AIM-9P Rocket Motors to be Performed at Allegany Ballistics Laboratory (ABL) in Rocket Center, W. Va.

ARLINGTON, Va., Feb. 12, 2013 /PRNewswire/ — ATK (NYSE: ATK) has been awarded a contract worth $17 million for production of rocket motors for AIM-9P Sidewinder customers within the United States Foreign Military Sales (FMS) program. Under FMS, the U.S. government procures defense articles and services on behalf of one or more foreign customers. The U.S. Air Force (USAF) at Hill Air Force Base in Utah issued the award. Work will be performed at Allegany Ballistics Laboratory (ABL) in Rocket Center, W. Va.

This ATK rocket motor is used to power the AIM-9P version of the Sidewinder missile, which is a supersonic, heat-seeking air-to-air missile used by a variety of fixed-wing combat aircraft since the 1970s. The AIM-9P Sidewinder was previously exported and is still in use by NATO countries and other international U.S. allies. ATK manufactured more than 30,000 AIM-9P rocket motors at the ABL facility in Rocket Center, W. Va. between 1978 and 1990.

Many international inventories of the AIM-9P Sidewinder are aging beyond the missile’s period of expected use in service. By re-starting the AIM-9P rocket motor production line, ATK and the USAF provide international partners with an affordable solution to update and extend the service life of their defense systems well into the future, while avoiding substantial financial investments in new missiles and aircraft.

“ATK is proud to re-start production of the AIM-9P rocket motor to support the needs of our FMS customers,” said Jerry Brode, Tactical Propulsion Market Segment Director at ATK’s Missile Products division. “This rocket motor has a significant history with ATK and has maintained a long-standing position within our portfolio of tactical Sidewinder and air-to-air rocket motor production lines.”

“ATK is committed to the ongoing success of our international allies,” said Cary Ralston, vice president and general manager of the Missile Products division within ATK’s Defense Group. “We are honored to provide our customers around the globe with an affordable and efficient solution to reinvigorate and sustain the service life of their missile defense systems.”

Production of the AIM-9P rocket motor will occur at ABL, a U.S. Navy-owned, ATK-operated facility. ABL specializes in advanced manufacturing technologies for a variety of programs supporting current and future U.S. industrial base needs in advanced fuzing and integration, conventional munitions assemblies, solid rocket motor propulsion, and advanced material structures.

ATK’s Defense Group is an industry leader in providing innovative and affordable products across ammunition, precision and strike weapons, electronic warfare systems, and missile components across air, sea, and land-based systems. ATK is an aerospace, defense, and commercial products company with operations in 21 states, Puerto Rico, and internationally. News and information can be found on the Internet at www.atk.com.

Certain information discussed in this press release constitutes forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Although ATK believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved. Forward-looking information is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Among those factors are: changes in governmental spending, budgetary policies and product sourcing strategies; the company’s competitive environment; the terms and timing of awards and contracts; and economic conditions. ATK undertakes no obligation to update any forward-looking statements. For further information on factors that could impact ATK, and statements contained herein, please refer to ATK’s most recent Annual Report on Form 10-K and any subsequent quarterly reports on Form 10-Q and current reports on Form 8-K filed with the U.S. Securities and Exchange Commission.

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ATK Receives Contract from the MDA as Budget Execution Continues

Despite the “Fiscal Cliff” negotiations and the fact that the Federal Government continues to operate under Continuing Resolution Authority (CRA) the Department of Defense continues to execute contract options. Under CRA new ones cannot be awarded but options on existing contracts may be executed. That explains why a production option for the F-35 could be issued even though it is worth over $3 billion.

ATK (ATK), for example, recently received a contract from the Missile Defense Agency (MDA) related to the development of Modular Divert and Attitude Control Systems (MDACS) technology for the Navy’s SM-3 Block IIB interceptor. The SM-3 is a ship launched missile that ultimately places a kill vehicle outside the atmosphere to engage the enemy missile threat.

The recent North Korean launch highlighting potential threats that the SM-3 is designed to perhaps deal with. It was reported that the U.S. and Japanese Navy deployed ships with the SM-3 capability in response to the launch.

The contract has a value of almost $53 million.

Because the kill vehicles are based on ships they cannot use liquid propelled DACS so solid rocket ones must be developed. They are flown like miniature space ships using controlled thrust from little rockets to move them. ATK is working on extending the performance of the DACS systems already used on the SM-3 program.

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ATK Awarded Production Contract for the U.S. Navy’s Multi-Option Fuze — Press Release

ATK’s Multi-Option Fuze Provides Increased Mission Capability for U.S. Navy’s 5-inch Gun Ammunition

Five-Year Production Contract to be Performed at Allegany Ballistics Laboratory in Rocket Center, W. Va.

ARLINGTON, Va., Dec. 6, 2012 /PRNewswire/ — ATK (NYSE: ATK) announced that it received a five-year, Indefinite Delivery, Indefinite Quantity (IDIQ) contract from the U.S. Army Contracting Command for the production of the MK 437 Multi-Option Fuze, Navy (MOFN). The contract has a maximum total value of $84.1 million. ATK has received the first order on this contract, for approximately $13 million. Deliveries are scheduled to begin in November 2013.

The MOFN increases the overall mission capability of 5-inch gun ammunition used on U.S. Navy ships by providing proximity, precision time, delay and point detonating impact functions in a single fuze. The inductive fuze setting feature also optimizes MOFN for use with automated ammunition handling equipment. MOFN will be used on projectiles fired in the MK 45 Single Lightweight Gun Mount on U.S. Navy cruisers and destroyers.

“ATK is pleased to add MOFN to our portfolio of fuze production programs. MOFN leverages ATK’s design, development and production experience, providing the U.S. Navy with an affordable, reliable fuze for its 5/54 caliber ammunition,” said Dave Fine, ATK’s Director of Fuzing and Warhead programs.

“ATK has a strong program and manufacturing team dedicated to producing MOFN for the U.S. Navy,” said Cary Ralston, vice president and general manager of ATK Missile Products Division. “This award reflects the tremendous dedication and commitment of our highly-skilled workforce and our industry partners.”

Production of this fuze will occur at the Allegany Ballistics Laboratory (ABL) facility in Rocket Center, W. Va. ABL is a U.S. Navy-owned, ATK-operated facility specializing in advanced manufacturing technologies for a variety of programs supporting current and future U.S. industrial base needs in advanced fuzing and integration, conventional munitions assemblies, solid rocket motor propulsion, and advanced material structures.

ATK is an aerospace, defense, and commercial products company with operations in 21 states, Puerto Rico, and internationally. News and information can be found on the Internet at www.atk.com.

Certain information discussed in this press release constitutes forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Although ATK believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved. Forward-looking information is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Among those factors are: changes in governmental spending, budgetary policies and product sourcing strategies; the company’s competitive environment; the terms and timing of awards and contracts; and economic conditions. ATK undertakes no obligation to update any forward-looking statements. For further information on factors that could impact ATK, and statements contained herein, please refer to ATK’s most recent Annual Report on Form 10-K and any subsequent quarterly reports on Form 10-Q and current reports on Form 8-K filed with the U.S. Securities and Exchange Commission.

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ATK Gets Order for Aircraft Survivability Components

The A-10 is one of the aircraft equipped with the AAR-47.

Back in October Alliant Techsystems (ATK) received a contract from the U.S. Army to provide replaceable components for the AN/AAR-47 aircraft defense system. This was an Indefinite Quantity/Indefinite Delivery (ID/IQ) contract under whichthe military could order what they needed. Even though the total value could be close to $70 million there was no guarantee that orders would be placed.

The AAR-47 Missile Warning Set is a series of sensors, analysis and display systems mounted on helicopters and aircraft to detect, identity and inform the crew about surface-to-air missile threats. It is currently a product of ATK only but was developed by that company along with Loral in the 80′s.

The ID/IQ contract is to purchase basically replacement parts for the system.

The first order was placed this week an has a value of just over $30 million.

ATK manufactures aircraft components, ammunition and pyrotechnics. They have had a rough 12 months but things recently have got a lot better for the company. They did lose a major contract to operate the Radford Ammunition but kept the one for Lake City. Declines in orders for that type of product by the U.S. military is expected as fighting winds down in Afghanistan. They recently reorganized and the last quarter earnings showed good results from their efforts.

Photo from The National Guard’s flickr photostream.

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Some Evaluation of Smaller Defense Contractor Earnings – Seeking Alpha

Here is a post I wrote for Seeking Alpha discussing ATK and Rockwell Collins recent earning reports.

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Airbus Selects ATK to Manufacture Composite Wing Cover Stringers for the A400M Military Transport Aircraft — Press Release

Agreement in Excess of $100 Million Demonstrates ATK’s Position as World-Class Supplier in Manufacturing Composites

ARLINGTON, Va., Oct. 29, 2012 /PRNewswire/ — ATK (NYSE: ATK) announced today that Airbus Military has selected ATK for a contract in excess of $100 million to produce composite wing cover stringers for use on the A400M Military Transport Aircraft. The A400M is a new generation, four-engine turboprop military transport aircraft designed by Airbus Military, with its first aircraft delivery planned for the second trimester in 2013. This aircraft is already in full production and Airbus has selected ATK, a demonstrated expert in composite manufacturing, for this specific work package.

The A400M work package will be produced in the Aircraft Commercial Center of Excellence (ACCE) facility used for commercial aircraft and engine programs in Clearfield, Utah. The A400M work will use many of the same manufacturing processes already deployed within the ACCE facility.

“ATK is excited to continue expanding the scope of our relationship with Airbus,” said Joy de Lisser, vice president and general manager of ATK’s Aerospace Structures Division. “This scope complements the success we’ve already created with Airbus and demonstrates their confidence in our people and processes.”

The contract between ATK and Airbus includes 122 wing cover stringers per aircraft for 180 aircraft. Airbus has already achieved sales for 174 aircraft. ATK may have the opportunity to grow as more A400M aircraft are sold.

ATK is an aerospace, defense, and commercial products company with operations in 21 states, Puerto Rico, and internationally. News and information can be found on the Internet at www.atk.com.

Airbus Military is a subsidiary of Airbus, an EADS Company, a leading aircraft manufacturer with the most modern and comprehensive product line. News and information can be found on the internet at www.airbus.com and www.airbusmilitary.com.

Certain information discussed in this press release constitutes forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Although ATK believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved. Forward-looking information is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Among those factors are: future levels of business in the aerospace and commercial transport industries or in the number of aircraft to be built; the success and timely progression of our customers’ new programs; the success and timely execution of key certification and delivery milestones; the company’s competitive environment; and economic conditions. ATK undertakes no obligation to update any forward-looking statements. For further information on factors that could impact ATK, and statements contained herein, please refer to ATK’s most recent Annual Report on Form 10-K and any subsequent quarterly reports on Form 10-Q and current reports on Form 8-K filed with the U.S. Securities and Exchange Commission.

Photo via PR Newswire.

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ATK Keeps Major Contract for Lake City Plant

Alliant Techsystems (ATK) is a mid-sized defense contractor. It primarily manufactures ammunition, pyrotechnics and rocket motors. The company is experiencing some struggles due to the ending of the fighting in Iraq and Afghanistan and the potential defense budget cuts. It has made several changes recently to adjust to these new market conditions but key to the company’s near term success was retention of the contract from the U.S. Army to manage the Lake City ammunition plant operations.

Last year the company lost the contract for the Radford Plant in Virginia to BAE Systems (BAE:LSE). BAE was also aggressively targeting the Lake City contract as well. ATK had run these plants responsible for large amounts of ammunition and explosives for the U.S. military for several years and they were a core part of their revenue and earnings. Short term the loss of the Lake City contract would have been a blow to the company.

Yesterday it as announced that the Army had decided to award the contract to ATK again. The initial contract is for seven years but it has options for a further three. No value has been reported yet.

To indicate the size of the production at Lake City in September the company and Army celebrated the delivery of 2 billion 7.62mm rounds from the plant. Due to the demands of the last ten years of combat ATK had expanded the plant to produce over 1.5 billion rounds annually of 5.56mm as well as other sizes.

The winning of this contract gives ATK more time to continue its adjustments and reorganization to address the changing market it finds itself in and establish a good foundation for future performance.

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More Punisher Work for ATK

The XM-25 Punisher is a man portable weapon that fires 25mm programmable air burst shells. It is the result of the U.S. Army’s attempt to develop a new rifle earlier this century. The XM-8 rifle program was cancelled but it was decided to continue work on the XM-25. Alliant Techsystems (ATK) is the prime contractor for the XM-25. The system was issued in small numbers and tested in Afghanistan over the last several months and proved very effective. It is issued at the squad level and provides fire support for the members.

In March ATK was given a contract to continue the Engineering, Manufacturing and Development (EMD) of the Punisher. This was worth about $70 million. Now a further contract to continue EMD was issued this week. That one has a value of around $17 million.

The continued contract awards show that the Pentagon has interest in the Punisher and its further limited production and use. Once EMD is complete a decision will be made to bring it into large scale production.

ATK also will support a further assessment of the weapon in Afghanistan by providing another 36 XM-25 for use. The data collected in these types of trials will only aid development and providing the best systems possible.

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ATK Changes Paying Off? — Seeking Alpha

Here is an article I wrote at Seeking Alpha discussing Alliant Techsystems (ATK) latest earnings.

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ATK Announces Retirement of TacSat-3 Satellite — Press Release

Spacecraft Significantly Exceeded Mission Life ? On-Orbit Operations Lasted Nearly Three Years

Mission Confirms Robustness of ATK’s Quick-to-Launch Spacecraft Bus and Components

ARLINGTON, Va., May 1, 2012 /PRNewswire/ — ATK (NYSE: ATK) announces the conclusion of the Tactical Satellite-3 (TacSat-3) mission. The Air Force announced on April 30th, 2012, that the satellite deorbited into and burned up in the Earth’s atmosphere nearly three years after its May 2009 launch. TacSat-3 was designed for six months of operation, with a goal of one year. Not only did it outlive its design life, it also surpassed its original mission requirements and goals as an experimental spacecraft, and was successfully transitioned to operational status in 2010.

The satellite was removed from operational status and transferred to the Space and Missile Systems Center in February 2012. Once transitioned, ATK provided the Air Force Research Laboratory with updated flight software, which allowed the vehicle to conduct on-orbit collection testing.

TacSat-3′s mission demonstrated the capability to conduct hyperspectral imaging to support the needs of U.S. warfighters.

“TacSat-3 served America well. We were proud to be part of the team that provided reconnaissance data from space to warfighters in the field and to intelligence analysts at home,” said Tom Wilson, vice president and general manager, Space Systems Division, ATK Aerospace Group. “Our innovative bus technology was a key factor in successfully extending the TacSat-3 demonstration to a longer-term operational mission. The mission enabled us to apply and enhance our flexible, modular bus platforms for future small satellite missions that included the ORS-1 spacecraft.”

The spacecraft is a pioneer of the emerging Operationally Responsive Space program, which was designed to meet the growing need of U.S. forces for flexible, affordable and responsive satellite systems.

ATK, as the spacecraft bus prime contractor, provided the complete bus system, which included the onboard command and data handling system, electrical power system, spacecraft bus primary structure, and interfaces to the launch vehicle and payload. Built and designed in just 15 months, ATK’s spacecraft bus met the TacSat-3 program goals of being operationally responsive, low-cost and with expected performance. The spacecraft also featured first-generation modular bus technology designed to provide flexibility for future small satellite missions. As a rapid, affordable experimental mission, the specification did not include a propulsion system to sustain long-term low-Earth orbit.

The TacSat-3 program was managed by the Air Force Space Command with collaboration from the Air Force Research Laboratory Space Vehicles Directorate and the Army Space and Missile Defense Command.

ATK is an aerospace, defense and commercial products company with operations in 22 states, Puerto Rico and internationally. News and information can be found on the Internet at www.atk.com.

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U.K. Awards Contract to Raytheon to Replenish Libyan Action Ordnance

The recent NATO led air campaign against Muammaf Gaddafi’s Libya was very successful. Using their advanced aircraft such as Eurofighter Typhoons, Dassault Rafales and others the European nations were able to support ground action by the rebels and support the removal of the North African dictator.

Of course this required the expenditure of quite a bit of air delivered ordnance and now the users are looking at purchasing new equipment to replenish their stocks. One of the contracts awarded to do this was to Raytheon (RTN) by the U.K. Ministry of Defence. This almost $100 million contract is for Paveway IV GPS guided bomb kits.

The Paveway adds a guidance section and fins to a normal bomb usually of around 2,000 lbs. The original Paveway used laser guidance homing in on a reflection of a beam but later ones like the IV utilize GPS guidance where the bomb flies to a coordinate utilizing satellite navigation.

Much of the kit will be made by British companies and Raytheon expects to fulfill the bulk of the order in 7 months.

The U.S. used prodigious amounts of small arms ammunition, 30mm cannon rounds and missiles like the Hellfire in Iraq and Afghanistan. This required substantial contract orders for these which allowed companies like Alliant Techsystems (ATK), who make ammunition and pyrotechnics, a good business. Unfortunately for the industry now that fighting is ending there will be some final orders to replenish stocks as Britain is doing and then there will be much less annual production requirement to support training and the expected minimal use in reduced operations.

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ATK Receives a Fourth Contract Option for Continued Production of 30mm PGU Ammunition — Press Release

ATK Receives a Fourth Contract Option for Continued Production of 30mm PGU Ammunition

ATK’s Domestic and International Awards for 30mm Ammunition Exceed $29 Million in FY12

ARLINGTON, Va., Feb. 29, 2012 /PRNewswire/ — ATK (NYSE: ATK) was recently awarded a fourth contract option to produce 30mm PGU-15A/B cartridges for the U.S. Army Contracting Command, Rock Island Contracting Center (RICC), Rock Island, Ill. The order is a part of a multi-year contract originally signed in July 2007. ATK’s worldwide sales of 30mm ammunition in the current fiscal year now exceed $29 million.

ATK’s 30mm PGU-series target practice ammunition is specially designed for training applications. These cartridges, currently in use with the 30mm GAU-8/A Gatling gun on the U.S. Air Force A-10 Warthog close-support aircraft provide cost-effective, ballistic-matched training rounds for improved warfighter performance.

“We are proud to continue our role as the primary provider of PGU-15 ammunition in support of the U. S. Air Force’s A-10 aircraft,” said Dan Olson, Vice President and General Manager, ATK Integrated Weapon Systems. “This round plays an integral role in training A-10 aircrews to develop and maintain essential air-to-ground combat skills. ATK supports this program through the delivery of high quality products, outstanding value and great customer service.”

ATK’s Mesa, Ariz.-based Integrated Weapon Systems division will produce the rounds at its facilities in Radford, Va. and Rocket Center, W. Va. Delivery of the optioned rounds is set to begin this year.

ATK is an aerospace, defense, and commercial products company with operations in 22 states, Puerto Rico, and internationally, and revenues of approximately $4.8 billion. News and information can be found on the Internet at www.atk.com.

Certain information discussed in this press release constitutes forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Although ATK believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved. Forward-looking information is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Among those factors are: changes in governmental spending, budgetary policies and product sourcing strategies; the company’s competitive environment; the terms and timing of awards and contracts; and economic conditions. ATK undertakes no obligation to update any forward-looking statements. For further information on factors that could impact ATK, and statements contained herein, please refer to ATK’s most recent Annual Report on Form 10-K and any subsequent quarterly reports on Form 10-Q and current reports on Form 8-K filed with the U.S. Securities and Exchange Commission.

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ATK Selected to Develop Alternative Warhead for Guided Multiple Launch Rocket System — Press Release

ATK Selected to Develop Alternative Warhead for Guided Multiple Launch Rocket System

New GMLRS Warhead Meets U.S. Army Performance Requirements, Improves User Safety, and Eliminates Risk of Unexploded Ordnance

ARLINGTON, Va., Feb. 20, 2012 /PRNewswire/ — ATK (NYSE: ATK) announced that it has been selected by the U.S. Army to develop an alternative warhead for the Guided Multiple Launch Rocket System (GMLRS). ATK was one of three companies competing to proceed into the Engineering and Manufacturing Design and Demonstration (EMDD) phase of the program. ATK will be a subcontractor to GMLRS prime contractor Lockheed Martin.

The GMLRS alternative warhead eliminates the use of submunitions, but performs as a drop-in replacement for the currently-fielded Dual-Purpose Improved Conventional Munition (DPICM) warhead.

“This new warhead offers the advantage of uncompromised performance without leaving unexploded submunitions on the battlefield,” said Dave Wise, Vice President and General Manager of ATK Defense Components. “We look forward to further development and integration of our improved warhead solution for GMLRS. We are also excited to demonstrate that we can adapt our lethality-enhanced ordnance design for other missile, mortar, artillery and air-dropped weapon applications.”

During live-fire testing by the U.S. Army, ATK’s alternative warhead – featuring ATK’s Lethality Enhanced Ordnance (LEO) design – demonstrated that it meets performance and mission requirements, lowers technical risk, and matches current weapon flight characteristics without modifications to the existing GMLRS delivery system. In addition, the design improves user safety by lessening the risk of chain-reaction explosions should the warhead be struck by bullets or fragments, or encounter other hazardous events.

ATK will refine the design to enhance manufacturability, ensuring a low risk transition to low rate initial production. Warhead production work will be performed at ATK’s Allegany Ballistics Laboratory (ABL) facility in Rocket Center, W.Va. ABL is a U.S. Navy-owned, ATK-operated facility specializing in advanced manufacturing technologies for a variety of programs supporting current and future U.S. industrial base needs in conventional munitions assemblies, advanced electronic fuzing and integration, solid rocket motor propulsion, and advanced material structures. ATK’s Plymouth, Minn. facility will provide key engineering and program support.

ATK is an aerospace, defense, and commercial products company with operations in 22 states, Puerto Rico, and internationally, and revenues of approximately $4.8 billion. News and information can be found on the Internet at www.atk.com.
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Alliant Techsystems Faces Double Dose of Bad News

24 January – Updated to reflect the loss of the Lake City contract would be a blow to the company instead of “will be”.

Over the last ten years the U.S. military has consumed large amounts of ammunition. This includes not only small arms and support weapons like machine guns and mortars but also larger and more sophisticated weapons such as tank rounds, artillery shells, aerial bombs and guided missiles. Alliant Techsystems (ATK) has become one of the largest suppliers of ammunition and other pyrotechnics to the U.S. military during this time.

Up to last year they had contracts to run two of the largest government owned plants involved in this process — the one in Radford, VA that manufactures nitrocellulose used as the basis for ammunition as well as the one in Lake City, MO which makes small arms ammunition.

Last year the Army awarded the contract for Radford to BAE Systems (BAE:LSE) in the spring. Alliant protested that decision and the Army agreed to revise the competition and conduct another source selection. In October the new contract bids were received and again BAE won. Alliant protested that decision too.

Unfortunately the Government Accountability Office (GAO) announced today that it had denied that protest upholding the award to BAE. Alliant will lose a key contract that it had had since 1995. BAE’s 10 year initial contract also has multiple five year options that could make the contract last until 2036. The value could be well over a billion dollars if all options are exercised and production at Radford remains fairly steady.

Alliant will also face a challenge this year for the Lake City contract as BAE announced it will team with ammunition manufacturer Olin (OLN) to form a team to bid on that one. The Lake City contract could be worth up to $200 million a year to the winner. With the knowledge used for their successful Radford contract proposal BAE and Olin should have a good chance of winning the Lake City one as well.

The loss of these two contracts would be a hard blow to Alliant as they form a decent portion of their revenue each year. They have already seen declines in revenues the last few quarters and this would continue that negative trend. In 2011 their total sales to the U.S. Government, primarily ammunition and explosives, was about $3.3 billion. In their annual report the company stated that they “derived approximately 15% of our total fiscal
sales from the military small-caliber ammunition contract at Lake City”. The loss could be made up if their were other contracts to win or demand for their other products would increase. Unfortunately with the fighting winding down in Afghanistan and budget cuts predicted this might be hard.

Alliant may have recognized that the future might get tough as they moved their headquarters from Minnesota to the Washington D.C. area. In this they followed Northrop Grumman (NOC) which left California. It places them nearer Congress and the Pentagon and will facilitate engagement. This should aid them in keeping work and perhaps gaining new efforts.

All defense contractors no matter what the size are facing the same problems that Alliant is. Cost pressure on the Defense Department will make them look at new providers who may offer the best price meaning contracts will be harder to keep. There will also be less contracts due to the retrenchment from the recent fighting and budget cuts. If the 1990′s when a similar decline in defense spending is a guide then some contractors will have to adjust or face converting to new markets or just merging with other companies.

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Mid-tier Defense Contractors Report Poorer Results for Most Recent Quarter

The larger defense contractors all reported their most recent quarterly earnings a few weeks ago. Most maintained their profits or saw an increase although revenue did decline in some cases. They remained mainly positive for the year stating that they would meet or exceed their full year estimates indicating that despite all of the talks and plans of cuts there has not yet been a significant slowdown in U.S. defense spending.

This week two of the mid-tier defense contractors, Kratos (KTOS) and Alliant Techsystems (ATK), also reported for the third quarter and somewhat surprisingly they both saw worst performance with Kratos even suffering a loss.

Kratos Defense & Security Systems is a supplier of IT, safety and security, engineering and technical support for a variety of defense, FMS and civil customers. They saw a loss of about $7 million on sales of $211 million. This was a significant increase in sales from the previous year which saw only $120 million. The primary reason given for the swing to the negative was the completion of the acquisition of Integral Systems. Kratos has over the last few years been fairly aggressive in M&A to expand its business base and customers.

ATK which makes rocket motors, ammunition and explosives primarily saw a decline in revenue of of about $100 million and income fall $17 million. The company is exposed not only to cut backs at the Defense Department but also NASA. ATK is also suffering due to a decline in demand for civil ammunition.

ATK is also waiting on a new competition for one of its major contracts with the U.S. Army. The company had run the Radford, VA plant for the Army but lost a re-compete to BAE Systems (BAE:LSE) which they then protested. The Army decided to have a new contest due to ATK’s protest. That is a $200 million a year contract.

What these results illustrate is that the defense contracting industry is already adjusting to a different market. Results may be uneven for several quarters as this adjustment takes place. The companies that have not diversified or have a wide customer base will be the first to see changes in their revenues and earnings as decisions on individual programs or demand for some supplies begin to dry up. Both Kratos and ATK remain confident for the year but there is starting to be pressure on the sector.

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U.S. Navy Continues LRIP of AARGM from ATK

The U.S. Navy awarded ATK (ATK) a contract for the third production lot of Low Rate Initial Production for the Advanced Anti-Radiation Guided Missile (AARGM). The contract is worth a little over $50 million and brings the total of the missiles ordered to 115.

The AARGM is an evolution of the High-Speed Anti-Radiation Missile (HARM) developed in the 1980′s and used in attacks on Libya and in Desert Storm. The AARGM is a joint U.S. and Italian program and is used by EF-18G and Tornado aircraft to attack enemy air defense radars.

The AARGM utilizes a HARM propulsion stack and adds more sophisticated guidance such as a Millimeter Wave (MMW) transceiver, advanced digital Anti-Radiation Homing (ARH) receiver and a tightly coupled GPS/INS. It is able to engage a variety of targets and the aircrew have the ability to select the target in flight or after launch. Like the HARM the AARGM will continue to attack a target even if they shut down their emitter.

The use of these missile began in Vietnam when the U.S. military was confronted by the layered and sophisticated air defenses in the North. The original missile developed was called the Shrike and there were also versions of the Navy’s shorter ranged air defense missile called the STANDARD ARM. These were used along with bombs and rockets to attack Vietnamese fire control and search radars for their Surface to Air Missiles (SAM) and Air Defense Artillery (ADA).

There have been no confirmed reports of the AARGM being used in the recent air strikes on Libya but it would be a good choice of system to attack their air defenses to allow NATO aircraft to conduct ground strikes.

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ATK Follows Others and Moves to Washington D.C. Area

Following in the footsteps of other defense contractors Alliant Techsystems (ATK) announced that it would re-locate its corporate headquarters from Minnesota to Washington D.C. Recently Northrop Grumman (NOC), much larger then ATK, did the same transferring its personnel out of California and settling in the Northern Virginia suburbs. These moves are to aid the companies in preparing for future reductions in the U.S. defense budget by allowing better and easier engagement with Congress, the Pentagon and other Federal offices.

ATK will now be near the majority of the larger defense contractors as Lockheed Martin (LMT), General Dynamics (GD) and SAIC (SAIC) are also in the D.C. suburbs. This means that of the biggest defense contractors only Boeing (BA) and Raytheon (RTN) maintain their headquarters somewhere else. Boeing in Chicago and Raytheon in Massachusetts. Certainly the tax and economic situation in their states could easily see them moving at some time in the future to Virginia.

ATK is a mid-size defense contractor who primarily make ammunition, pyrotechnics and rocket engines. They serve a variety of U.S. defense customers as well as NASA. They have done quite well in the last decade due to the U.S. demand for small arms and heavier rounds for machine guns, tanks and artillery often used in Afghanistan and Iraq. Recently ATK has seen some contraction in their business with the last quarter reporting a drop in earnings and revenue.

A few months ago the company lost the contract to run the Army’s Radford plant making explosives to BAE Systems (BAE:LSE). This would have had a further significant effect on future earnings and the company protested. Before the protest could be resolved the Army decided to carry out a new competition which gives ATK hope of staying the incumbent.

The move to DC will not only help the company with its lobbying and engagement with customers but also allow easier business development efforts as being co-located with so many other companies will allow easier discussions of teaming and participating in larger contracts. Somewhat ironically BAE and ATK have teamed together to develop the new defense system for U.S. Navy aircraft called JATAS. Being in Washington may facilitate further contract efforts like this.

If companies feel they need to do this to gain a competitive advantage or even to maintain there current level of business we may see more moves. It used to be that companies did not feel the need to have a large office in D.C. and maintained headquarters across the country. Now it seems that in order to fight for every penny of reduced defense budgets this may be one way to gain an upper hand.

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Army Decides to Recompete Radford Contract

In June the U.S. Army announced that it had awarded a contract with BAE Systems (BAE:LSE) to run the U.S. explosives production facility at the Radford, VA Army Ammunition Plant. The losing company, ATK (ATK), who had had contracts to run the facility for several years protested the award. Under normal processes the Government Accountability Office (GAO) which is responsible for deciding these matters would have made a decision no later then September.

The protest though is now not necessary as the Army has decided to recompete the contract which led to the GAO dismissing the protest. After a review by the GAO the Army will change some parts of the Request for Proposals (RFP) and allow bidders to submit new ones. This is good news for ATK as the Radford contract had a value of over $800 million over its ten year duration.

Because of this decision ATK, the incumbent, will continue to operate the plant and be paid by the Army until a new contract is awarded. Both BAE and ATK have indicated they will submit new proposals and there is always a potential for other companies to also try to win the work.

If the U.S. defense budget does decline for any company the key will be keeping their existing contracts and then attempting to win new ones. Having a core of existing work will cushion any lack of new work caused by the reduced opportunities available in the next decade or so as the U.S. reduces its investment in Iraq and Afghanistan as well as new development programs or building up stockpiles of weapons and munitions.

ATK recently had a rough quarter with sales down which led to a drop of about 4% in profits when compared to the similar quarter last year. One areas where revenue was down was sales of ammunition to U.S. allies like Afghanistan. The loss of the Radford contract would have reduced annual revenue $80 million or so or about 2%. A chance to win the work back will only help the company in the future.

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More Ammunition for the U.S. Armed Forces

As the U.S. military has remained engaged in Iraq and Afghanistan over the last decade one area where they have spent a lot of funding is on ammunition. The U.S. Army, Marine Corps and other services have utilized large amounts of small arm ammunition as well as fire support weapons such as Apache attack helicopters, mortars, artillery and aircraft weapons. These have ranged from the very mundane to the very sophisticated but the U.S. has utilized a large amount of rounds in the 5.56mm to 30mm variety.

Different companies have benefited from this market. One of the biggest has been ATK (ATK) which has had contracts since 2001 to operate U.S. ammo plants as well as provided larger ammunition and pyrotechnics. Other companies as well have been able to win contracts due to the large demand for this product.

Recent Federal Cartridge Co. was just awarded a contract for training ammunition. As the fighting has continued the U.S. has also increased training making it more realistic and demanding which has required more consumption of ammunition for this purpose. Federal will make a special training round in 5.56mm which is the primary small arms round for the U.S. military. This is made out of polymers and is designed to fragment upon impact minimizing penetration and ricochet. The use of plastic rather then lead means it is better for the environment. The value of this contract is about $46 million.

In another announced contract Olin Corp. (OLN) announced that their Winchester division had received a contract for small arms ammunition. This includes 5.56mm, 7.62mm and .50 caliber rounds primarily used by soldiers and in vehicle mounted support weapons. The value of that contract if all options are exercised is about $300 million. The contract will begin in 2012.

One of the downsides for defense contractors is that as the U.S. withdraws from Iraq and Afghanistan the requirement for large amounts of ammo like this will be reduced. If the military is not involved in active operations they will not require large replacement stocks of consumable items like this. They will rely on what they have on hand to support training and any small operations. The large capacity built up over the last ten years of activity will not be needed.

For companies that have provided this product they will see a reduced market and a fall in orders unless they can find new products or customers to make up for the loss. The U.S. contraction in the defense industry will not just be the end of large acquisition programs but also cuts in soldiers, their support and basic items like 5.56mm training bullets and other ammunition.

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ATK Selected as a Major Subcontractor for Intermediate-Range Ballistic Missile Target Rockets – Press Release

ATK Selected as a Major Subcontractor for Intermediate-Range Ballistic Missile Target Rockets

ATK Award has Initial Value of $48 Million with Options to Grow to $90 Million
Award Represents New Application for ATK’s Orion Commercial Rocket Motors

SALT LAKE CITY, July 26, 2011 /PRNewswire/ — ATK (NYSE: ATK) has received a $48 million major subcontractor award from Orbital Sciences Corporation (NYSE: ORB) to provide commercial solid rocket motors for the Missile Defense Agency (MDA) Intermediate Range Ballistic Missile (IRBM) target rocket program. With follow-on options ATK believes the contract has a potential value of up to $90 million. Orbital is the prime contractor for the IRBM program.

ATK’s contract includes an initial award of $48 million for the first eight Orion 50S XLT and 50 XLT vehicles to be delivered by first quarter 2013, with contract options for delivery of 14 additional vehicles over the following two years. ATK’s Orion solid rocket motors will provide first and second stage propulsion for the target rocket.

“This is an entirely new application for our versatile Orion solid rocket motor family,” said Scott Lehr, ATK Aerospace Systems vice president and general manager of Strategic and Commercial Systems. “ATK Orion motors are currently used by MDA and Orbital for missile defense and in a variety of Orbital commercial launch vehicles.”

The Orion motor product line was initiated in 1988 in a joint venture with Orbital for the development of the winged Pegasus® space launch vehicle. Since that time, the motors have been modified for use on a variety of platforms, including Pegasus® XL, Taurus® and Taurus® XL, Minotaur I and IV, Hyper-X. Versions of Orion motors are also used on the Ground-based Midcourse Defense Orbital Boost Vehicle.

“There is a significant cost and reliability benefit gained by selecting solid rocket motors that are already in production for other applications,” said Lehr. Derived from Orbital’s air-launched Pegasus® vehicle, the IRBM target is a multi-stage vehicle that will be air-launched from a standard C-17 cargo aircraft via a parachute extraction system, providing MDA with increased flexibility in testing its Ballistic Missile Defense System (BMDS).

ATK is an aerospace, defense, and commercial products company with operations in 22 states, Puerto Rico, and internationally, and revenues of approximately $4.8 billion. News and information can be found on the Internet at www.atk.com.

Certain information discussed in this press release constitutes forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Although ATK believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved. Forward-looking information is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Among those factors are: changes in governmental spending, budgetary policies and product sourcing strategies; the company’s competitive environment; the terms and timing of awards and contracts; and economic conditions. ATK undertakes no obligation to update any forward-looking statements. For further information on factors that could impact ATK, and statements contained herein, please refer to ATK’s most recent Annual Report on Form 10-K and any subsequent quarterly reports on Form 10-Q and current reports on Form 8-K filed with the U.S. Securities and Exchange Commission.

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ATK Receives Contract to Continue Development of Army’s New Tank Round

ATK (ATK) was awarded a contract by the U.S. Army to continue development of a new round for the M1 Abrams tank. This three year contract is for the second phase of Engineering, Manufacturing and Development (EMD). At the end of the EMD the round should enter Low Rate Initial Production (LRIP) and then ultimately Full Rate. The value of the contract is about $77 million.

The new M829E4 120mm cartridge is a kinetic energy round optimized for engaging other tanks at extended ranges. It is designed to defeat modern, advanced armor including explosive reactive designs. Ideally the improved performance of the new ammo will require fewer rounds to be used for each engagement improving the overall survivability of the M1 tank.

ATK won a competition with its design to enter this phase of development although it had carried out the previous EMD contract as well.

The M1 has been deployed to Iraq and Afghanistan and seen a great deal of work providing fire support for U.S. troops as they engaged in irregular warfare. It has been the Army’s primary main battle tank since the 1980′s. Originally equipped with a 105mm gun it was up-gunned to the 120mm early in its service life.

The Army does not build new M1 tanks but relies on a program of modification and re-equipping to keep the M1 abreast of advances in new technology. In the FY12 budget the Army had proposed shutting down the M1 production and retrofit facility run by General Dynamics (GD) to save money and because current inventory objectives have been met. That plan did not meet with much approval from Congress and right now the 2012 budget bills working their way through the House and Senate have money to keep the plant open.

Incremental improvements such as the M829E4 keep the M1 capable of engaging modern threats and providing the necessary capability required on the modern battlefield.

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U.S. Army Explosives Production Contract Protested by Alliant Techsystems

Since the Nineties and the downsizing of the U.S. defense establishment due to the end of the Cold War the Department of Defense has leased its ammo production facilities to a variety of defense companies. Then they have awarded contracts for the delivery of small arms, artillery and other ammunition. With the fighting since 9/11 in Iraq and Afghanistan there has been substantial investment in these types of products as the U.S. military has consumed large amounts of small arm ammo and those for supporting weapons such as the 30mm cannon on the AH-64 Apache attack helicopter.

Alliant Techsystems (ATK) has been one of the major suppliers of ammunition and pyrotechnics for the U.S. military over the last decade. The company is a leading manufacturer of small arms rounds as well as larger artillery rounds, missiles and rocket engines. They have been able to operate two of the major production plants owned by the Government for several years. These are the ones in Radford, VA and Independence, MO.

Now the Army has awarded the contract to run the Radford plant to BAE Systems (BAE:LSE). It is estimated the contract will have a value of over $800 million during its ten year duration. Alliant has filed a protest with the Government over the award. Normally the Government Accountability Office (GAO) will resolve the protest within 100 days. The contract does not start until September so Alliant will continue running the plant until then pending the review of the protest.

If the GAO finds that there were irregularities in the award to BAE they may order a new competition, ask the Army to review how their source selection was conducted or even give the contract to Alliant. Most protests are denied and Alliant will have to hope that the Army did not carry out their source selection properly in order to get a ruling in their favor.

As the U.S. defense budget begins to decline and troops return from Iraq and Afghanistan demands for certain products like ammo and explosives will also be reduced. This means that locking in contracts now at the beginning of this process is very important. Alliant relies on this work for a large portion of their revenue and earnings. Losing the contracts will have an impact on their long term prospects and force them to try to expand their other product lines or look for new markets.

Photo from Yarden Sach’s flickr photostream.

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