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Alliant Techsystems Inc. at Cowen and Company Aerospace/Defense Conference - Final.

Article Excerpt
UNIDENTIFIED PARTICIPANT: Good afternoon. We're very pleased here today to have Alliant Techsystems presenting at our conference. Representing the Company we have Chief Financial Officer, John Shroyer; and Director of Investor Relations, Jeff Huebschen. John, please take it away.

JOHN SHROYER, CFO, ALLIANT TECHSYSTEMS INC.: Good afternoon, everyone. Welcome to the afternoon session. I'm going to give you an update on ATK. I'll probably spend about 15, 20 minutes just giving you a general overview and hopefully allow enough time for all of your Q&A that I know you have.

We just wrapped up our third quarter in December. And one more quarter to go for the year. But we had another very good quarter as a Company. Solid year-over-year organic growth of 5%, driven by our Armament Systems segment again, is really driving well. 15% year-over-year growth we expect for this year out of that segment. Again, that's like the fourth, fifth year in a row of very solid returns out of that group.

For the quarter on the EPS line, 19% year-over-year growth. Right now expecting to end the year at the high end of our current guidance of $7.40 to $7.50 per share, which will put us up in the, again, the 18% to 19% year-over-year EPS growth. And over the last three years that's an average EPS growth of 17% for the Company.

But, most importantly for the quarter, a very strong orders quarter. $1.3 billion in orders for the quarter; a book to bill of about $1.2 billion, giving us a lot of confidence in our future growth outlook as a Company.

We also increased our orders guidance for the year in this call, from $4 billion for the year, up to $5 billion, which will put us at backlog at the end of the year of about $7 billion, which will be a record for ATK. And I'll get into some of the details of what makes that up as we go through the pitch here.

Jeff, you want to head back a couple slides?

Just kind of the key tenants, that strong financial performance, strong backlog, we're really focused on margin improvement in the Company over the last few years. That continues well. We're even going to put more emphasis on it now for the next couple of years to help offset some of the pension headwinds that we're -- we'll talk about here.

But then with all that organic growth, improved margins really are helping out on our cash flow, strong cash flow, which has given us a lot of flexibility, from a capital deployment perspective to create shareholder value for you folks.

Next slide, Jeff.

This chart just gives you a graphical representation of what I talked about in terms of the revenue growth and the EPS growth over the last four years. You can see just three years ago $3.2 billion of revenue; forecasting $4.5 billion this year. That's about an 8% to 9% year-over-year growth from last year. And then there's the EPS, I mentioned, up in the high end of that $7.40 to $7.50 range here, with about a quarter to go for our current fiscal year.

Next slide, Jeff.

This is the backlog. I show it a little bit. You can see it climbing quite steadily the last two years. A year ago we had just about $2 billion for Ares I, the next generation space shuttle. That really drove that up, gave us some long-term backlog as well as some programs in our weapons area.

And then this year, as I mentioned, $5 billion, which will give us $7 billion of backlog, have been driven by about $1 billion in commercial structures aircraft business. We did book about $240 million in the third quarter for engine components...