ATK Awarded Contracts Worth $205 Million for Munitions Production and International Technology Transfer
Orders Strengthen Company's Leadership Position in Global Munitions Market
Apr 18, 2000
ATK (Alliant Techsystems) (NYSE: ATK), the nation's largest supplier of military conventional ammunition, said it has received contracts worth $205 million for production of small and medium-caliber ammunition and rocket system propellant and warhead components, and the transfer of medium-caliber ammunition production technology to a NATO allied nation. The contracts are:
-- A $105 million award from the U.S. Army for production of small-caliber ammunition, including 5.56mm, 7.62mm, and .50-caliber rounds. Production will be done at the Lake City Army Ammunition Plant in Independence, Mo., which is operated by Alliant Lake City Small Caliber Ammunition Company. The award is the second procurement under a 10-year contract valued at approximately $1 billion won by ATK in July 1999.
-- Three awards from General Dynamics Armament Systems totaling $51 million for production of propellant and smoke warhead components for the U.S. Army's HYDRA-70 rocket. The propellant will be produced by Alliant Ammunition and Powder Company at the Radford Army Ammunition Plant in Radford, Va. The warhead components will be manufactured by Alliant Kilgore Flares Company, Toone, Tenn. The contracts are part of the second-year procurement under a five-year program that could generate total sales of $400 million to $450 million.
-- A $28 million award from a NATO allied nation for the transfer of technology to produce 25mm training and tactical ammunition at a new facility in the country. Under the three-year contract, Alliant Ammunition Systems Company, New Brighton, Minn., will purchase and install production equipment, train operations personnel, and oversee manufacturing start-up. The contract also includes the immediate sale of approximately 150,000 rounds of 25mm ammunition for use by the nation's military forces, and an agreement for the additional purchase of medium-caliber system components once production is underway at the new facility.
-- A $21 million award from the U.S. Army for production of 25mm and 30mm training ammunition for use by infantry fighting vehicles and helicopters. The contract represents the second-year procurement under a five-year award valued at $145 million. Alliant Ammunition Systems Company will manufacture projectile assemblies for the rounds, and Alliant Kilgore Flares Company will supply the ignition train components. Propellant will be produced by Alliant Ammunition and Powder Company, which will also perform final system integration work at its new load, assemble, and pack facility at the Radford Army Ammunition Plant.
In addition to the international technology transfer contract, each of the other orders includes product sales by the U.S. government to allied and friendly nations.
A Total Ammunition Supplier
Nick Vlahakis, group vice president, Conventional Munitions, said the new contracts strengthen ATK's leadership position as the largest supplier of conventional munitions to the U.S. government and allied and friendly nations.
"We are leveraging our market position to become a total ammunition supplier to the U.S. Department of Defense," said Vlahakis. "With the Lake City contract win, our portfolio now spans all calibers, from 5.56mm and 7.62mm small arms rounds, to 25mm and 30mm ammunition for large fighting platforms, to 120mm projectiles for the Abrams main battle tank. Ancillary products include vital ammunition system components such as propellant, fuzes, and warheads, while our service offering includes total system integration and management of Army ammunition manufacturing plants. We are aggressively pursuing opportunities to secure additional work in the ammunition distribution chain."
ATK has delivered more than 120 million rounds of medium caliber ammunition and over two million rounds of tank ammunition to the U.S. and allied nations. In its first full year of production at the Lake City plant, the company is expected to deliver 350 million small-caliber rounds.
The forecasts, projections, expectations, and opportunities for anticipated sales included in this news release are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from anticipated results, including changes in governmental spending and budgetary policies, economic conditions, the company's competitive environment, the timing of awards and contracts, the outcome of contingencies, including litigation and environmental remediation, and program performance, in addition to other factors identified in ATK's filings with the Securities and Exchange Commission.
ATK is a $1.1 billion aerospace and defense company with leading market positions in munitions, solid propulsion, composite structures, and precision electronic fuzes. The company, which is headquartered in Hopkins, Minn., employs approximately 6,400 people and has three business segments: Conventional Munitions, Aerospace, and Defense Systems. Alliant Lake City Small Caliber Ammunition Company, Alliant Ammunition and Powder Company, Alliant Ammunition Systems Company, and Alliant Kilgore Flares Company are operating units within the Conventional Munitions Group.
SOURCE: ATK
Contact: Rod Bitz, Media, 612-931-5413, rod_bitz@atk.com, or
Melanie E.R. Miller, Investors, 612-931-6921, melanie_miller@atk.com, both of ATK
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