Orbital ATK (NYSE:OA)

Orbital ATK (NYSE:OA) | Products & Business Segments

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Orbital ATK is an aerospace and defense company that operates in the United States and internationally. The company was incorporated in Delaware in 1990. Prior to February 9, 2015, the company was known as Alliant Techsystems Inc. (ATK). Orbital ATK designs, builds and delivers space, defense and aviation-related systems to customers around the world both as a prime contractor and as a merchant supplier. Its main products include launch vehicles and related propulsion systems; satellites and associated components and services; composite aerostructures; tactical missiles, subsystems and defense electronics; and precision weapons, armament systems and ammunition. The company is headquartered in Dulles, Virginia.

On February 9, 2015, Alliant Techsystems Inc. completed a tax-free spin-off and distribution of its Sporting Group, including the Blackhawk, Savage and Bushnell businesses, to its stockholders as a new public company called Vista Outdoor Inc. (Vista Outdoor). In connection with the distribution, the company's stockholders received two shares of Vista Outdoor for each share of company common stock held. As a result of the distribution, the Sporting Group is no longer reported within the company's results from continuing operations.

Immediately following the distribution, Alliant Techsystems Inc. combined with Orbital Sciences Corporation through the merger of a company subsidiary with Orbital. The company also changed its name from Alliant Techsystems Inc. to Orbital ATK, Inc. In connection with the merger, Orbital stockholders received 0.449 shares of company stock for each share of Orbital common stock held. Immediately following the merger, Orbital stockholders owned 46.2% of the common stock of the company and existing company stockholders owned 53.8%. The financial results of Orbital have been included in the company's consolidated financial statements since the date of the merger.

Following the distribution and merger, Orbital ATK reorganized its business groups and realigned its reporting segments. The company's remaining businesses, combined with the businesses of Orbital, are now reported in three segments: Flight Systems Group, Defense Systems Group and Space Systems Group.

Orbital ATK operates in three principal business segments:

 

Flight Systems Group
Defense Systems Group
Space Systems Group.



The following table highlights Orbital ATK's sales from 2013 to 2015 by segment:
Orbital ATK's Segment Sales


Flight Systems Group

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The Flight Systems Group is comprised of Orbital's former Launch Vehicles segment and a portion of the ATK's former Aerospace Group (Aerospace Structures division and Space Systems Operations' Launch Systems business). The Flight Systems Group develops rockets that are used as small- and medium-class space launch vehicles to place satellites into Earth orbit and escape trajectories, interceptor and target vehicles for missile defense systems and suborbital launch vehicles that place payloads into a variety of high-altitude trajectories. The Group also develops and produces medium- and large-class rocket propulsion systems for human and cargo launch vehicles, strategic missiles, missile defense interceptors and target vehicles. Additionally, Flight Systems Group operates in the military and commercial aircraft and launch structures markets. Other products include illuminating flares and aircraft countermeasures.

The following is a description of the divisions within the group:



Launch Vehicles Division


The Launch Vehicles division includes both small- and medium-class rockets for government, civil and commercial payloads. The Pegasus rocket is launched from the company's "Stargazer" L-1011 carrier aircraft and has proven to be the small space-launch workhorse for U.S. government customers, having conducted 45 missions from six different launch sites worldwide since 1990. The Minotaur C (Commercial) launch vehicle combines the Pegasus upper-stage motors with a commercially-provided first stage propulsion system for increased performance. The Minotaur I, IV, V and VI rockets combine decommissioned Minuteman and Peacekeeper rocket motors with proven company avionics and fairings to provide increased lifting capacity for government-sponsored payloads.

The division's Antares rocket is a two-stage vehicle (with optional third stage) that provides low-Earth orbit (LEO) launch capability for payloads weighing over 7,000 kg. The Antares rocket has been used in the execution of the company's Commercial Resupply Services (CRS I) contract with NASA to deliver cargo to the International Space Station (ISS). As a result of an October 2014 launch failure, the Antares design is being upgraded with newly-built RD-181 first stage engines to provide greater payload performance and increased reliability. The company is modifying the rocket's first-stage systems in anticipation of hot-fire testing in early 2016, and is currently targeting three launches of the reconfigured Antares rocket in 2016 in connection with the CRS I contract.

As an industry-leading provider of suborbital launch vehicles for the nation's missile defense systems, the division has conducted over 75 launches for the U.S. Missile Defense Agency (MDA), the U.S. Air Force, Army and Navy, and allied nations during the last 10 years. Additionally, the division is the sole provider of interceptor boosters for the MDA's Ground-based Midcourse Defense (GMD) system designed to intercept and destroy long-range enemy missiles. Orbital ATK is also a primary supplier of highly-reliable target vehicles that serve as "threat simulators" to provide high-fidelity facsimiles of enemy missile threats in the testing and verification of missile defense systems.



Propulsion Systems Division


The Propulsion Systems division is the developmental production center for the company's solid rocket motors for NASA's current and planned human spaceflight programs, including the Space Launch System (SLS) heavy lift vehicle and the launch abort system (LAS) motor for the Orion crew capsule that is designed to safely pull the crew capsule away from the launch vehicle in the event of an emergency during launch.

The division also produces medium-class solid rocket motors for the U.S. Navy Trident II (D5) Fleet Ballistic Missile program and conducts solid rocket propulsion sustainment activities for the U.S. Air Force Minuteman III Intercontinental Ballistic Missile (ICBM). These two programs provide the backbone of the United States' strategic deterrence program. Additional solid rocket motors being produced by the division include GEM 60 motors for ULA's Delta IV; Orion motors for the company's Pegasus, Taurus, and Minotaur launch vehicles; and CASTOR motors for the company's Antares rocket and Taurus rocket, and MDA targets. The division supplies Orion motors for all three stages of the GMD system as well as other Orbital ATK launch vehicles. In addition, the division produces advanced flares and decoys that provide illumination for search and rescue missions and countermeasures against missile attacks.



Aerospace Structures Division


The Aerospace Structures division is a provider of advanced composite aircraft components for military and commercial aircraft manufacturers, using highly automated composite fabrication techniques, including automated fiber placement and stiffener forming processes. It provides a wide variety of composite parts for the F-35 Lightning II and also provides composite radomes and apertures for a number of military aircraft and provides wing stiffeners for the A400M military transport aircraft. The division provides very large fiber-placed and hand lay-up structures for Atlas V and Delta IV launch vehicles, and filament-wound composite cases for solid rocket motors and composite overwrapped pressure vessels.

The division has a commercial aerospace composites center of excellence facility in Clearfield, Utah, to support its commercial aerospace customers, including Airbus, Rolls-Royce, and Boeing. The division is under contract to produce the majority of the composite stringers and frames for the Airbus A350 XWB wide-body passenger jetliner. Additional major commercial programs include a partnership with Rolls-Royce to produce the aft fan case for the Trent XWB engine, which will be used to power the Airbus A350, and a contract to produce composite frames for the Boeing 787-9 and 787-10 commercial aircraft.

     Financial results for Orbital ATK's Flight Systems Group were as follows:
Performance of Orbital ATK's principal lines of business

The increase in sales was driven primarily by increased sales volume in Aerospace Structures of $67.0 million due to increased production on commercial aircraft programs, sales of $64.7 million resulting from the inclusion of Orbital's former Launch Vehicles segment in the company's post-merger fiscal 2015 results, and increased sales volume in Propulsion Systems of $41.3 million driven by a termination settlement on a commercial rocket motor contract.


Defense Systems Group

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The Defense Systems Group is comprised entirely of ATK's former Defense Group (Armament Systems, Defense Electronic Systems, Missile Products and Small-caliber Systems divisions). The Defense Systems Group develops and produces military small-, medium-, and large-caliber ammunition, small-caliber commercial ammunition, precision weapons and munitions, high-performance gun systems, and propellant and energetic materials. It operates the Lake City Army Ammunition Plant in Independence, MO (LCAAP) and a Naval Sea Systems Command (NAVSEA) facility in Rocket Center, WV. The Defense Systems Group is also a leader in tactical solid rocket motor development and production for a variety of air-, sea- and land-based missile systems. The Group serves a variety of domestic and international customers in the defense and security markets in either a prime contractor, partner or supplier role. The Defense Systems Group also provides propulsion control systems that support MDA and NASA programs, airborne missile warning systems, advanced fuzes, and defense electronics. The Group produces the U.S. Navy's Advanced Anti-Radiation Guided Missile (AARGM) and the Multi-Stage Supersonic Target (MSST), and has developed advanced air-breathing propulsion systems and special mission aircraft for specialized applications.

The following is a description of the divisions within the group:



Armament Systems Division


The Armament Systems division is home to the company's precision fire weapons and medium- and large-caliber ammunition programs. It is under contract to produce the Precision Guidance Kit (PGK) for 155mm artillery and is the developer and producer of the PGK units for 120mm mortars that are fielded as the U.S. Army's Advanced Precision Mortar Initiative. An additional program of note is the XM-25 Counter Defilade Target Engagement System (XM-25) under development for the U.S. Army. The division also produces the family of medium-caliber Bushmaster chain guns and is a global systems designer and integrator of medium-caliber ammunition for integrated gun systems. These gun systems are used on a variety of ground combat vehicles, helicopters and naval vessels, including the Bradley Fighting Vehicle, the Light Armored Vehicle (LAV), coastal patrol craft and AH-64 Apache helicopters. To date, the division has supplied approximately 18,000 medium-caliber gun systems to the U.S. military and allied forces worldwide. New products include a link-fed variant of the Apache gun-system for ground and naval applications. The Armament Systems division also leads Defense Systems Group's international co-production efforts and provides munitions support to allied nations.



Defense Electronics Division


The Defense Electronics division provides customers with advanced capabilities for offensive and defensive electronic warfare and specializes in weaponized airborne intelligence, surveillance and reconnaissance platforms and advanced anti-radiation homing missile systems, special-mission aircraft, missile warning systems, and mission support equipment. Key programs include the AARGM missile, the AN/AAR-47 missile warning system used by U.S. and allied fixed and rotor-wing aircraft to defeat incoming missile threats and the MSST for the U.S. Navy. The division also provides special-mission aircraft that integrate sensors, fire control software, gun systems and air-to-ground weapons capability for use in counterinsurgency, border/coastal surveillance and security missions.



Missile Products Division


The Missile Products division provides customers with high-performance tactical solid rocket motor propulsion for a variety of surface and air-launched missile systems including AGM-114 Hellfire, Maverick, AIM-120 AMRAAM and AIM-9 Sidewinder. The division also produces fuzing and sensors for various artillery, mortar, grenade and air-dropped weapons including the Hard Target Void Sensing Fuze. The division produces metal components for various medium-caliber ammunition and 120mm tank ammunition and also produces specialty composite and ceramic structures used on military platforms and in energy applications. The division provides customers with the third-stage propulsion and the Solid Divert and Attitude Control System used to guide the kinetic warhead on the Standard Missile defense interceptor. Additional capabilities include the STAR family of satellite orbit insertion motors, high performance rocket boosters, and advanced air-breathing propulsion for platforms designed for Mach 3+ flight. The company continues to operate its New River Energetics facility located on the Radford Army Ammunition Plant (RFAAP) in Radford, VA, which provides energetics to support international program efforts and other business.



Small Caliber Systems Division


The Small Caliber Systems division is the largest producer of military small-caliber ammunition for the U.S., operating the LCAAP. The division provides non-NATO munitions and weapons systems to the U.S. Army for use by allied security forces. The division also provides commercial ammunition to Vista Outdoor. Since 2000, the company has operated and modernized the LCAAP, and is currently under contract with the U.S. Army to operate LCAAP through September 2020. In fiscal 2015, the company produced approximately 1.4 billion rounds of small-caliber ammunition in the facility, including the U.S. Army's 5.56mm and 7.62mm enhanced performance rounds. In 2015, the company also completed a move of 20mm production equipment to a remodeled facility in preparation for resumption of production in fiscal 2016.

     Financial results for Orbital ATK's Defense Systems Group were as follows:
Performance of Orbital ATK's principal lines of business

The decrease in sales was driven primarily by reduced sales of $68.7 million in Small Caliber Systems largely due to lower volumes, a decrease in Missile Products of $23.6 million due to the absence of a favorable RFAAP pension segment adjustment recorded in fiscal 2014, partially offset by a favorable contract adjustment in 2015, and a decrease in Defense Electronics of $19.1 million as a result of completing several contracts in the current year, partially offset by increased sales in Armament Systems of $41.3 million resulting from increased foreign sales.


Space Systems Group

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The Space Systems Group is comprised of Orbital Sciences' former Advanced Space Programs and Satellite and Space Systems segments and a portion of ATK's former Aerospace Group (Space Components division and part of the Space Systems Operations division). The Space Systems Group develops and produces small- and medium-class satellites that are used to enable global and regional communications and broadcasting, conduct space-related scientific research, and perform other activities related to national security. In addition, Space Systems Group develops and produces human-rated space systems for Earth-orbit and deep-space exploration, including re-supplying the ISS. This Group is also a provider of spacecraft components and subsystems and specialized engineering and operations services to U.S. government agencies.

The following is a description of the divisions within the group:



Commercial Satellites Division


The Commercial Satellites division develops and produces small- and medium-class satellites that are used to enable global and regional communications and broadcasting and to collect imagery and other remotely-sensed data about the Earth. The company's GEOStar-2 and -3 geostationary Earth orbit (GEO) satellites are among the industry's best-selling small- and medium-class communications satellites for 2 to 8 kilowatt missions. The world's leading satellite communications service providers rely on our lower-cost, highly reliable GEOStar satellites for their broadband, television broadcasting, mobile communications, business data networks and other telecommunications missions. The company is also an industry pioneer in the design and production of commercial imaging satellites as well as in the incorporation of civil and military hosted payloads on its commercial spacecraft.



Government Satellites Division


The Government Satellites division develops and produces small- and medium-class satellites that conduct space-related scientific research, carry out interplanetary and other deep-space exploration missions, and demonstrate new space technologies. It also provides human-rated space systems for Earth-orbit and deep-space exploration. This includes cargo missions to the ISS under the CRS I program. The company is currently under contract to deliver up to 20,000 kg of cargo to the ISS between 2013 and 2016. This division also designs and produces small- and medium-class satellites used for national security space programs and satellites used to conduct astrophysics, earth science/remote sensing, heliophysics, planetary exploration and technology demonstrations.



Space Components Division


The Space Components division is a major supplier of satellite mechanical components and assemblies for a wide variety of commercial, civil, and defense spacecraft programs. It has strong market positions in spacecraft composite primary and secondary structures, satellite fuel and oxidizer tanks, precision structures, solar power arrays, deployable structures, and thermal control systems.



Technical Services Division


The Technical Services division provides a full spectrum of cost-effective engineering, manufacturing and program management services to NASA and other civil government and military space agencies. The division manages high-profile NASA science programs including its scientific sounding rocket and high-altitude balloon program offices. ​

     Financial results for Orbital ATK's Space Systems Group were as follows:
Performance of Orbital ATK's principal lines of business

The increase in sales was driven by additional sales in Government Satellites of $56.1 million, Commercial Satellites of $42.2 million and Technical Services of $21.0 million, resulting from the inclusion of Orbital Sciences' former Advanced Space Programs and Satellite and Space Systems segments in our post-Merger fiscal 2015 results, primarily offset by lower activity on two major proprietary programs that were completed in the Space Components division.

Company Information

Revenues ('15): $3,174M +8.5%

R&D ('15): $49M +1.7%

Net Profit ('15): $341M -40.6%

CAPEX ('15): $113M +6.6%

Orbital ATK - OEM/Tier I

Products News Subsidiaries Acquisitions Competitors Customers R&D Spending 5-Year Financials

Aerospace Sector:

   

Space Systems; Missiles/Munitions.

Orbital ATK | Products:


Orbital: Antares, Pegasus, Taurus and Minotaur space launch vehicles; Interceptor launch vehicles; Target launch vehicles; Communications satellites; Science and remote sensing satellites and related subsystems; Booster vehicles; Space technical services; Human-rated spacecraft.

ATK: Rocket motors systems for human and cargo launch vehicles, conventional and strategic missiles, and missile defense interceptors; Solid rocket motors; Solid rocket motor propulsion for surface and air launched missile systems; Satellite mechanical components and assemblies; Satellite fuel and oxidizer tanks; Precision structures; Solar power arrays; Deployable structures; Spacecraft composite primary and secondary structures; Precision Guidance Kits; Mortar Guidance Kits; Medium-caliber chain guns; Small-, medium-, and large-caliber ammunition; Military precision munitions; Propellant and energetic materials; Target missiles; Missile Subsystems & Components; Missile Warning Systems (MWS); Weapons sensors and fuzes; Composite aircraft components: upper and lower wing skins, fuselage skins, nacelles, ducts, access covers, fan cases, radomes, apertures, stringers and frames.

Orbital ATK's Major DoD Defense Programs:


| Aerial Targets | DoD Prime ContractorAGM-88 AARGM | AMRAAM | EELV | F-22 Raptor | F-35 Lightning II |
| GMD | Hellfire | AGM-65 Maverick | Minuteman III | RQ-4 Global Hawk | Sidewinder |
| SM-3 | MSST | THAAD | Trident II |

Orbital ATK's Commercial Programs:


| Airbus: A350 XWB | Boeing 747-8, 787 |

Sales 2011-2015 Net Income 2011-2015 R&D Spending 2011-2015 # Employees 2011-2015

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