ARLINGTON, Va. - For the second quarter of FY15, ended September 28, ATK reported sales of $1.3 billion, up 11 percent from the prior-year quarter of $1.1 billion, due to increased sales across all of ATK's business groups. Net income in the second quarter was $95 million, up from $93 million in the prior-year period.
"In the quarter, ATK secured key contracts, both domestic and international, and completed significant milestones that support the company's long-term growth strategy," said Mark DeYoung, ATK President and Chief Executive Officer. "We recorded year-over-year increases in sales, operating profit and record-level EPS."
In the second quarter, ATK completed a major design review of the solid rocket booster for NASA's Space Launch System; won multiple contracts to supply the U.S. and international allies medium- and large-caliber ammunition, as well as non-U.S. standard ammunition; and won industry awards and recognition for the company's commercial optics, trail cameras, hunting calls, shooting rests, and golf range finders.
The company maintains a backlog of $7 billion.
INDUSTRY SEGMENTS
Aerospace Group
Second quarter sales increased 3 percent to $329 million, compared to $319 million in the prior-year quarter, reflecting increased sales in the Aerospace Structures division, partially offset by lower sales in the Space Components and Space Systems Operations divisions.
Operating profit in the quarter was $39 million, down 3 percent compared to $41 million in the prior-year quarter, reflecting the absence of improved profit expectations in the Aerospace Structures division recorded in the prior year, partially offset by increased sales noted above.
Defense Group
Sales in the second quarter increased 3 percent to $488 million, compared to $472 million in the prior-year quarter. The increase was driven by international sales within the Small Caliber Systems division and sales in the Missile Products division, partially offset by decreased sales in the Armament Systems division.
Operating profit for the quarter was $50 million, down 9 percent, compared to $55 million in the prior-year period, reflecting the absence of a change in profit expectations of $22 million on a program in the Small Caliber Systems division, due to operation efficiencies gained as one contract neared completion and a new contract was initiated in the prior year. The decrease was partially offset by the increased sales noted above and favorable international contract mix.
Sporting Group
Second quarter sales increased 26 percent to $533 million, compared to $421 million in the prior-year quarter, including results from Bushnell, partially offset by a decline in organic sales of 8 percent, versus a very strong prior-year quarter. Organic sales decreased 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 (see reconciliation table for details). 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.
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