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ATK Awarded $13.5 Million Contract to Produce Environmentally Friendly Ammunition

Oct 16, 2000

ATK (NYSE: ATK) (Alliant Techsystems), said it has been awarded a $13.5 million contract from the U.S. Army Operations Support Command, Rock Island, Ill., to produce lead-free 5.56mm training ammunition as part of a U.S. Army initiative to move to "green ammunition" in the 21st century.

ATK Lake City Small Caliber Ammunition Company will produce the environmentally friendly ammunition at the Lake City Army Ammunition Plant in Independence, Mo.

Mark W. DeYoung, president, ATK Lake City Small Caliber Ammunition Company, said ATK and the U.S. Army share a strong commitment to environmental stewardship.

"We are pleased to be a partner with the U.S. Army on this important program, which will ensure that training levels are maintained while reducing the environmental effects of firing range operations," said DeYoung. "We look forward to producing these rounds for the Army, and working with the service to expand this new technology to other small-caliber configurations."

Developed by the U.S. Army Armament Research, Development, and Engineering Center (ARDEC) at Picatinny Arsenal, N.J., the environmentally friendly rounds fired from the M-16 rifle use a core made of tungsten-tin or tungsten-nylon mix instead of lead. They are similar in performance and effectiveness and are as safe to fire as the lead-core rounds currently in use. Approximately one million of the rounds have been produced since the program began in 1995.

ATK was awarded a contract in 1999 to operate the Lake City Army Ammunition Plant and supply all the U.S. Army's requirements for small-caliber ammunition. The contract is expected to generate total sales of approximately $1 billion over the next 10 years, with annual sales averaging approximately $100 million. Annual production of 5.56mm, 7.62mm, .30-caliber, and .50-caliber ammunition at the plant is expected to average more than 450 million rounds.

ATK has been an industry partner to the U.S. Army and its soldiers for more than 60 years. Sales to the Army accounted for approximately 32 percent of total revenues in the most recent fiscal year, making the service the company's single largest customer. Major ATK Army programs include small-caliber, medium-caliber, and large-caliber ammunition, the Objective Individual Combat Weapon (OICW), anti-tank and anti-personnel barrier systems, and mortar and artillery fuzes.

ATK is a $1.1 billion aerospace and defense company with leading market positions in munitions, smart weapons and precision capabilities, propulsion, and composite structures. The company, which is headquartered in Hopkins, Minn., employs approximately 6,400 people and has three business segments: Conventional Munitions, Aerospace, and Defense Systems. ATK news and information can be found on the Internet at http://www.atk.com/

SOURCE: ATK

Contact: Rod Bitz, Media, 612-931-5413, rod_bitz@atk.com, or Mark Mele,
Investors, 612-931-6367, mark_mele@atk.com, both of ATK