Space is not the final frontier for Orbital ATK, as long as its aerospace/defense offerings are paving new paths. Through several operating segments, the company (formerly Alliant Techsystems) is a leading manufacturer of mission-critical products, including launch vehicles and related propulsion systems; satellites and associated components and services; composite aerospace structures; tactical missiles, subsystems and defense electronics; and precision weapons, armament systems and ammunition. It spun off its sporting goods business as Vista Outdoor in 2015 upon its merger with Orbital Sciences.
Change in Company Type
Alliant Techsystems and Orbital Sciences merged their aerospace and defense operations in early 2015, in a $5 billion transaction that created Orbital ATK, a defense and aviation systems developer with a combined $4.5 billion in revenue. As part of the deal, Alliant spun off its sporting segment (Vista Outdoor), which focuses on commercial sporting equipment, to shareholders.
Orbital ATK is stationed in Arlington, Virginia, and has locations in some 20 states, Canada, Puerto Rico, and other countries.
After the merger, Orbital ATK organized into three groups: Flight Systems, Defense Systems, and Space Systems.
The Flight Systems Group provides small and medium-class space launch vehicles, solid rocket propulsion systems, interceptor boosters and target vehicles, and composite structures for commercial and military aircraft. The Defense Systems Group offers propulsion and controls for tactical missiles and missile defense interceptors, advanced defense electronics, and ammunition (small-, medium-, and large-caliber). Lastly, the Space Systems Group supplies commercial satellites, spacecraft for research and security missions, and spacecraft components and subsystems.
Sales and Marketing
The US Army is its largest customer. Other significant customers include the US Navy, NASA, and the US Air Force.
Prior to the merger, ATK had seen revenue declines over the last few years. Revenues fell 5% from $4.61 billion in 2012 to $4.36 billion in 2013. Profits, however, jumped 4% from $263 million to $272 million due to lower operating expenses and the absence of litigation, accrual, and realignment charges.
The declines were driven by a 7% drop in aerospace sales as a result of the completion of NASA's Space Shuttle program and reduced production levels on other programs. Within its defense segment, ATK was hurt by a dip in energetics systems sales as a result of the loss of a facility management contract. This segment also experienced a decrease in small-caliber systems sales due to lower demand for non-standard ammunition.
Mergers and Acquisitions
In a large move to bolster its sporting segment, Orbital ATK in late 2013 purchased Bushnell for $985 million. Bushnell makes rifle scopes, binoculars, and gun accessories, and Orbital ATK is making the transaction to capitalize on the surge in overall sales for guns and ammunition in the US. The purchase allowed it to penetrate the new sports markets of golf, camping, and snow skiing.
Also in 2013, Orbital ATK picked up Caliber Company (the parent company of Savage Sports Corporation) for $315 million. Savage is a leading maker of rifles and shotguns, and the deal fortified Orbital ATK's own portfolio of consumer brands.