Tuesday’s spectacular explosion of a space rocket in Virginia could kill ATK’s plans to spin off its Outdoor Sports segment to shareholders as a new, publicly traded company that would be called Vista Outdoor Inc.
ATK said Wednesday, Oct. 29, that it is conducting a thorough evaluation of its plans to merge its Aerospace and Defense businesses with Orbital Sciences Corp. following the Oct. 28 failure of Orbital Sciences Antares rocket launch. Consummating the merger is a condition for spinning off Vista Outdoor, according to Vista Outdoor filings with the Securities & Exchange Commission.
ATK reported Wednesday that sales at its Sporting Group grew 26 percent to $533 million in the fiscal second quarter ended Sept. 28, as results from Bushnell more than offset a drop in firearms sales from last year’s peak levels.
Organic sales at ATK’s Sporting Group declined 8 percent due to lower sales volume in firearms and legacy accessories, partially offset by a slight increase in ammunition. Sales from Bushnell were $145 million.
Operating profit in the second quarter increased 29 percent to $74 million, compared to $58 million in the prior-year quarter. The increase was $9 million when compared to adjusted operating profit in the prior-year quarter of $66 million. The increase was a result of Bushnell and the absence of prior-period restructuring and facility rationalization costs, partially offset by lower organic sales noted above. Adjusted organic operating profit decreased 9 percent in the second quarter, primarily due to lower sales noted above. Operating profit from Bushnell was $15 million, including transition costs.
In April, ATK proposed proposed a tax-free spin-off of the Sporting Group to ATK shareholders and the tax-free, all-stock merger between ATK’s Aerospace and Defense Groups and Orbital Sciences Corporation.
SUMMARY OF REPORTED RESULTS
The following table presents the
company’s results for the second quarter of the fiscal year, which
ended Sept. 28, 2014 (in thousands).
Sales
|
Quarters Ended |
|||||||||||||||
|
September 28, 2014 |
September 29, 2013 |
$ Change |
% Change |
||||||||||||
|
Aerospace Group |
$ |
329,189 |
$ |
319,403 |
$ |
9,786 |
3.1% |
||||||||
|
Defense Group |
487,734 |
471,900 |
15,834 |
3.4% |
|||||||||||
|
Sporting Group |
532,502 |
421,359 |
111,143 |
26.4% |
|||||||||||
|
Eliminations |
(76,176) |
(70,281) |
(5,895) |
8.4% |
|||||||||||
|
Total sales |
$ |
1,273,249 |
$ |
1,142,381 |
$ |
130,868 |
11.5% |
||||||||
Income before Interest, Income Taxes, and Noncontrolling Interest (Operating Profit):
|
Quarters Ended |
|||||||||||||||
|
September 28, 2014 |
September 29, 2013 |
$ |
% |
||||||||||||
|
Aerospace Group |
$ |
39,347 |
$ |
40,570 |
$ |
(1,223) |
(3.0)% |
||||||||
|
Defense Group |
50,342 |
55,071 |
(4,729) |
(8.6)% |
|||||||||||
|
Sporting Group |
74,459 |
57,823 |
16,636 |
28.8% |
|||||||||||
|
Corporate |
(3,470) |
(5,198) |
1,728 |
33.2% |
|||||||||||
|
Total operating profit |
$ |
160,678 |
$ |
148,266 |
$ |
12,412 |
8.4% |
||||||||
