The spectacular failure of an unmanned space rocket in Virginia Oct. 28 could kill Alliant Teksystems Inc.’s plans to spin off its Outdoor Sports segment, which includes Bushnell and a host of firearms and ammunition brands.
ATK announced Oct. 29 that it is conducting a thorough evaluation of its plans to merge its Aerospace and Defense businesses with Orbital Sciences Corp., which built the Antares rocket that was detonated last week as it was falling back to earth after a malfunction. The rocket was supposed to carry 5,000 pounds of supplies and experiments to the International Space Station on behalf of the National Aeronautical and Space Administration. An Orbital Sciences executive told CNN it cost $200 million to build the rocket and spacecraft.
ATK has said that one of the conditions for spinning off its Outdoor Sports unit to shareholders as the new, publicly traded company Vista Outdoor Inc. is consummating the merger with Orbital Sciences.
ATK reported Wednesday that sales at its Sporting Group grew 26 percent to $533 million in the fiscal second quarter ended Sept. 28. ATK said $145 million in sales from Bushnell more than offset an 8 percent decline in organic sales, which consist primarily of more than 30 shooting sports brands, including firearms and ammunition brands. ATK acquired Bushnell Nov. 5, 2013 as a nearly two year boom in firearms and ammunition sales started waning.
Segment operating profit increased 29 percent to $74 million, including $15 million from Bushnell, compared to $58 million in the fiscal second quarter of 2013. Adjusted operating profit increased $9 million to $75 million, as Bushnell’s results and the absence of prior-period restructuring and facility rationalization costs were partially offset by lower organic sales. Adjusted organic operating profit decreased 9 percent in the second quarter, primarily due to lower sales noted above.
In April, ATK proposed a tax-free spin-off of the Sporting Group to ATK shareholders as part of a tax-free, all-stock merger with Orbital Sciences Corporation.