Orbital ATK Provides Third Quarter 2016 Business And Financial Update

Orbital ATK, Inc. (NYSE:OA), a global leader in aerospace and defense technologies, today announced strong new order activity and solid operational results for the third quarter ended October 2, 2016. The company also updated its previously issued GAAP financial guidance and reaffirmed its previously issued adjusted guidance for 2016.

Due to the ongoing review related to the previously announced restatement, Orbital ATK announced on November 3, 2016 that it will delay the filing of its third quarter Quarterly Report on Form 10-Q and updated the status of the review. See "Restatement Update" below.

"From a new business and operational standpoint, Orbital ATK turned in a solid third quarter, highlighted by continued strong customer demand for our products and outstanding operational execution throughout the company," said David W. Thompson, Orbital ATK's President and Chief Executive Officer. "While we are not able to report financial results at this time, our overall performance for the first three quarters of the year has enabled us to reaffirm our adjusted annual guidance for 2016."

Mr. Thompson continued, "The company's new order and option activity in the third quarter exceeded $2.0 billion and, together with additional bookings in October, boosted year-to-date totals to over $7.5 billion. In addition, we remained committed to our capital deployment strategy by returning approximately $60 million in the third quarter and about $170 million so far this year to stockholders in share repurchases and dividends."

2016 Financial Guidance and Capital Deployment

The company updated its previously issued GAAP guidance and reaffirmed its previously issued adjusted guidance for the year, as summarized below:
                   
2016 Guidance     GAAP Guidance     Adjustments     Adjusted Guidance
Revenues ($ millions)     $4,450 - $4,500     $0     $4,450 - $4,500
Operating Income Margin     10.75% - 11.25%     0.75%     11.5% - 12.0%
Free Cash Flow ($ millions)     N/A     N/A     $225 - $275
Diluted Earnings Per Share     $4.85 - $5.05     $0.45     $5.30 - $5.50
           

Orbital ATK currently expects an effective tax rate of 27% - 28% and interest expense of approximately $70 million for the year, which includes approximately $8 million due to non-cash interest related to certain charges required in purchase accounting. Pension funding is expected to be approximately $40 million and capital expenditures are projected to be about $200 million in 2016. Diluted weighted average shares outstanding are expected to be approximately 58 million on the basis of continued repurchase activity in 2016. The FAS/CAS favorable pension adjustment is expected to be about $80 million for the year. Adjustments to GAAP results include the impact of merger-related costs of about $28 million and costs related to the restatement of about $12 million (see reconciliation table for details).

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