Space is not the final frontier for Alliant Techsystems (ATK), as long as its aerospace/defense offerings are paving new paths. Through four operating segments, ATK is a leading manufacturer of mission-critical products, including military ammunition and gun propellants (armament systems), rocket motors and small satellites (aerospace systems), and defense electronics and missile components (missile products). It also makes ammunition for the law enforcement and sporting markets (security and sporting). As a prime contractor and a subcontractor, ATK is a top supplier of ammunition -- from small-caliber rounds to tank ammunition -- to the US and its allies. The US Army is its largest customer.
Other significant customers include the US Navy, NASA, and the US Air Force.
ATK's armament and aerospace segments together generate a majority of its sales. Armament systems develops and produces small-, medium-, and large-caliber ammunition, gun systems, and propellant materials. The segment's sales fell 12% in fiscal 2012 as a result in part because of lower demand for small-caliber systems, energetics systems, integrated weapons systems, and advanced weapons. Under a contract that is expected to continue to demand product until 2013, it operates a US Army ammunition plant in Missouri that is primary supplier of small-caliber ammunition for the US Department of Defense. It also supplies non-NATO munitions and weapon systems for the US Army's operations in Afghanistan.
The company's aerospace systems segment develops and produces rocket motor systems for human and cargo space vehicles, missiles, missile defense interceptors, small satellites, and satellite components. It also offers engineering and technical services. Its space systems operations division is the production home for the company's reusable solid rocket motors for NASA's current and planned human spaceflight programs, including the International Space Station Cargo Re-supply Services and the Space Launch System heavy-lift vehicle.
Aerospace systems saw a decrease of about 6% in sales in fiscal 2012 largely driven by the wind-down of the Space Shuttle program, which was concluded in 2011, and by the end of the Launch Abort System. However, that decrease was partially offset by more demand for strategic and commercial systems, flares, decoys, and space systems and services operations. ATK's aerospace systems also continues to produce large solid rocket motors for the Trident II and Minuteman III ballistic missile programs, considered to be the backbone of the US' strategic deterrence.
The missile products segment serves the defense, aerospace, security, and energy sectors by developing and producing tactical solid rocket motor for a variety of air-, sea-, and land-based systems. Included among the segment's projects is the US Navy's Advanced Anti-Radiation Guided Missile and the Multi-stage Super Sonic Missile. Missile products' sales rose 1% in fiscal 2011 thanks in part to demand for propulsion and controls and the awarding of a development contract for Joint and Allied Threat Awareness System program.
Besides ammunition, security & sporting also supplies such accessories as reloading equipment, gun care products, targets, and riflescopes. Other products from the segment include tactical systems and equipment for the armed forces and law enforcement. Sales for the segment shot up about 8% from demand for both ammunition and accessories.
In fiscal 2013 ATK realigned to form a three-group structure of aerospace (aerospace structures, space systems operations, and structures and components); defense (including the former armament systems and missile products); and sporting (accessories and commercial ammunition). The reorganization is intended to bring more efficiency and lower costs, among other goals.
Along with its growth, however, ATK has accrued a substantial amount of debt -- roughly $1.3 billion. This makes matters difficult for a company whose products are highly engineered and require sophisticated manufacturing and system integration. The product and program needs of both its government and commercial customers are ever evolving, and as such ATK's future performance depends on its ability to identify emerging technological trends and bring them to market at cost-effective prices. – less