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 (32% of net sales) 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 (56%) 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 (12%) supplies commercial satellites, spacecraft for research and security missions, and spacecraft components and subsystems.
Sales and Marketing
The US Army is its largest customer, generating 27% of its sales. Other significant customers include the US Navy, NASA, and the US Air Force.
ATK saw its revenues drop 34% from 2014 to 2015, primarily due to the selling of its sporting goods business in 2014. It also in 2015 experienced declines within its Defense Systems segment resulting from lower small caliber systems sales and the completion of several contracts within the defense electronics sector.
Its profits declined by around 40% from 2014 to 2015 due to the lower revenue coupled with additional expenses associated with the selling of its sporting goods business. In addition, the company's operating cash flows decreased by 20% in 2015, due to outflows in net receivables and pension and other post-retirement benefits.