[SatNews] ATK (NYSE: ATK) has reported operating results for the first quarter of its Fiscal Year 2014, which ended on June 30, 2013. Orders were $1.4 billion, representing a book-to-bill ratio of approximately 1.3, driven by strong orders in the Aerospace and Sporting Groups, partially offset by orders decline in the Defense Group. First quarter sales were flat year over year at $1.1 billion.
Excluding sales from contracts at the Radford Army Ammunition Plant (RFAAP), prior-year first quarter as adjusted sales were $1.0 billion (see reconciliation table for details). The increase relative to prior-year adjusted sales was due to increased sales in the Aerospace and Sporting Groups, partially offset by a sales decline in the Defense Group.
Margins in the first quarter were 11.6 percent compared to the prior-year quarter at 12.1 percent. Excluding sales and associated profit from RFAAP, prior-year as adjusted margins were 8.7 percent (see reconciliation table for details). The increase relative to prior-year adjusted margins was driven primarily by higher sales and profit in the Sporting Group and higher profit in the Defense Group. Net income for the quarter was up 1.7 percent to $72.1 million compared to $70.9 million in the prior-year quarter. Excluding sales and associated profit from RFAAP, prior-year as adjusted net income was $45.6 million (see reconciliation table for details). The increase relative to prior-year adjusted net income was due to higher profit, lower interest expense, and a lower tax rate.
Fully diluted earnings per share (EPS) were $2.24 compared to $2.16 in the prior year period. Excluding sales and associated profit from RFAAP, as adjusted EPS in the prior year was $1.39 (see reconciliation table for details). The increase relative to prior-year adjusted EPS was due to higher profit, lower interest expense, a lower tax rate, and reduced share count compared to the prior-year quarter. The acquisition of Caliber Company, parent company of Savage Sports Corporation, had minimal impact to the first quarter financial results, given the transaction was completed on June 21, 2013.
“ATK had a strong first quarter, where we continue to see positive momentum from disciplined capital deployment, operational excellence initiatives and investments in technology and new product development,” said Mark DeYoung, ATK President and Chief Executive Officer. “Our continued focus is to generate superior shareholder returns over time through the application of affordable innovation and execution excellence as we develop and manufacture highly engineered products for our customers.
“The Company’s completion of the Savage acquisition builds upon strong Sporting Group performance and market leadership with a well-respected and recognized brand in the long guns market. We are well underway with the integration of Savage and I am confident our wholesalers, retailers, distributors and consumers will find value in our robust portfolio of product offerings.”
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