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ALLIANT TECHSYSTEMS REPORTS PROFITABLE FOURTH QUARTER, STRONG CASH FLOW FROM OPERATIONS TOTALING $77 MILLION

 Fiscal 1993 Net Loss of $114.2 Million is Due to
 Previously Reported Restructuring Charges, Losses From
 Discontinued Operations, Adoption of FAS 106
 MINNEAPOLIS, May 13 /PRNewswire/ -- Alliant Techsystems (NYSE: ATK) today reported a profitable fourth quarter and strong cash flow from operations, which totaled $77 million during the period.
 The company also said a net loss of $114.2 million or $11.82 per share for fiscal year 1993 was due primarily to three previously reported unusual factors: restructuring charges, losses from discontinued operations, and a charge related to the adoption of Financial Accounting Standard (FAS) rule No. 106.
 Excluding the restructuring charges, income from continuing operations in fiscal 1993 would have been $29.8 million or $2.96 per share.
 Fourth-Quarter Results
 Toby G. Warson, president and chief executive officer, said fiscal 1993 ended on a positive note, with the company reporting net income and strong cash flow from operations for the fourth quarter, which ended March 31, 1993.
 Fourth-quarter net income was $8.8 million or 90 cents per share, compared with $10.4 million or $1.04 per share in the same period a year ago.
 Warson said the company's continuing emphasis on cash flow produced strong results in the fourth quarter.
 "Cash from operations reached $77 million during the quarter as we benefited from reductions in working capital levels," Warson said. "The strong performance enabled us to end the year with total debt of $94 million, down 28 percent from $131 million at the end of the previous fiscal year. Cash balances at the end of the quarter totaled $81 million, compared with $75 million a year ago. Net debt was $13 million, down from $56 million last year.
 Fourth-quarter sales from continuing operations were $297.3 million, the highest quarterly sales reported in fiscal year 1993. That compares with record sales of $498.7 million in the same period a year ago. Sales in the current fourth quarter were somewhat below expectations due principally to shipment delays and non-receipt of orders within the company's torpedo programs.
 Sales from Defense Systems were $225.2 million in the fourth quarter, compared with $337.6 million in the same period a year ago. Marine Systems reported fourth-quarter sales of $72.1 million versus $161.1 million last year.
 Warson noted that operating margins in the fourth quarter were lower than a year ago primarily due to higher than planned overhead rates resulting from the lower than expected sales as well as high employee turnover related to workforce reductions.
 "Our workforce reduction program is proceeding according to plan," Warson said. "However, because we expedited the process during the fourth quarter, the high turnover had an adverse effect on our productivity. With the majority of the reductions now behind us, our productivity will begin to improve."
 For the fiscal year ended March 31, 1993, Alliant Techsystems reported a net loss of $114.2 million or $11.82 per share. In the previous fiscal year, the company had net income of $38.8 million or $3.88 per share.
 The principal factor in the 1993 loss was a $119.9 million pre-tax charge for restructuring, nearly all of which was taken against third- quarter earnings. The restructuring program, which involves reductions of approximately 30 percent in workforce and facility space, is in response to expectations for lower sales in fiscal year 1994. The anticipated sales decline reflects declining production on several programs, a smaller U.S. defense budget, and delays in international orders.
 Warson noted that the defense industry marketplace is in the midst of dramatic and rapid change.
 "It is essential that we stay ahead of this change by taking the necessary actions that will enable us to maintain our profitability and position us for long-term efficiency and competitiveness," Warson said.
 Warson said the restructuring program, which is being funded by internally generated cash, will lower the company's annual operating expenses and further improve its competitive position.
 Warson noted that Alliant Techsystems' ongoing effort to strengthen its competitiveness is improving the company's domestic market share. Bookings for domestic orders were well ahead of plan in fiscal 1993, and included a number of follow-on contracts for significant long-term programs such as the MK50 lightweight torpedo, the AN/SQQ-89 surface ship ASW combat system, and medium caliber ammunition.
 "We entered fiscal year 1994 with backlog of about $1.0 billion, or 15 months of sales," Warson said.
 International orders were substantially below plan in fiscal 1993 principally due to continued delays in purchase decisions. It is expected that a majority of the delayed orders will be booked in the future.
 The net loss from continuing operations in fiscal 1993 was $45.2 million or $4.68 per share, compared with net income of $45.7 million or $4.57 per share a year ago.
 Sales from continuing operations in fiscal 1993 were $1.0 billion, compared with $1.19 billion last year. Defense Systems sales were $735.5 million in 1993, compared with $756.8 million last year. Marine Systems reported a decline in 1993 sales to $269.8 million from $431.1 million a year ago primarily due to lower torpedo sales.
 Operating profit in fiscal 1993 was $59.4 million, compared with $90.5 million last year. Defense Systems reported operating profit approximately equal to a year ago, while Marine Systems reported a decline in operating profit. (Operating profit is gross margin less operating expenses, exclusive of restructuring costs.)
 After-tax losses from discontinued operations in fiscal 1993 totaled $37.8 million, reflecting operating losses from Metrum Information Storage, a loss on the sales of Metrum, and reversals of previously recorded tax benefits. The tax benefits will be available to reduce future taxable income.
 During the fourth quarter, Alliant Techsystems completed the sale of Metrum Information Storage to affiliates of Group Technologies Corporation for $14 million. Metrum's results have been accounted for as discontinued operations since March 1992, when the company's board of directors authorized a plan for divestiture.
 The adoption of FAS rule No. 106 in the third quarter resulted in a one-time after-tax charge of $31.2 million, which was reflected retroactive to the beginning of the year. The new accounting rule requires corporations to change their accounting method for retiree health care benefits from a cash basis to an accrual basis.
 Alliant Techsystems supplies defense and marine systems to the U.S. government and its allies. The company is headquartered in Edina, Minn., and employs 4,400 people throughout the United States.
 INCOME STATEMENTS
 (In thousands except per share amounts)
 Quarter Ended Year Ended
 3/31/93 3/31/92 3/31/93 3/31/92
 Sales $297,336 $498,741 $1,005,291 $1,186,939
 Cost of sales 252,606 416,481 838,510 971,940
 Gross margin 44,730 82,260 166,781 214,999
 Operating expenses
 Research and development 6,236 11,762 17,779 24,542
 Selling 16,495 26,015 51,852 57,620
 General and administrative 12,389 19,017 37,721 42,309
 Restructuring charges (600) 2,819 119,881 2,819
 Total operating expenses 34,520 59,613 227,233 127,290
 Income (loss)
 from operations 10,210 22,647 (60,452) 87,709
 Other income (expense):
 Interest expense (2,788) (3,675) (12,698) (16,203)
 Interest income 530 237 1,020 700
 Miscellaneous
 income (expense) 843 (197) 1,872 2,020
 Total other
 income (expense) (1,415) (3,635) (9,806) (13,483)
 Income (loss) from
 continuing operations
 before income taxes 8,795 19,012 (70,258) 74,226
 Income tax
 provision (benefit) -- 7,453 (25,053) 28,530
 Income (loss) from
 continuing operations 8,795 11,559 (45,205) 45,696
 Income (loss) from
 discontinued operations
 net of income taxes -- (1,190) (37,811) (6,901)
 Cumulative effect of
 accounting change
 net of income taxes -- -- (31,181) --
 Net income (loss) $8,795 $10,369 $(114,197) $38,795
 Primary and fully
 diluted earnings (loss)
 per common and common
 equivalent share:
 Continuing operations $0.90 $1.16 $(4.68) $4.57
 Discontinued operations -- (0.12) (3.91) (0.69)
 Cumulative effect of
 accounting change -- -- (3.23) --
 Net income (loss) $0.90 $1.04 $(11.82) $3.88
 Average number of common
 and common equivalent
 shares 9,719 9,997 9,659 9,987
 BALANCE SHEETS
 (in thousands)
 3/31/93 3/31/92
 ASSETS
 Current assets:
 Cash and cash equivalents $81,286 $74,451
 Receivables 129,621 105,953
 Net inventory 111,506 151,200
 Income tax refunds receivable 5,400 --
 Deferred income tax asset - current -- 8,101
 Other current assets 3,683 4,997
 Total current assets 331,496 344,702
 Net property, plant and equipment 89,307 121,832
 Deferred income tax asset - long-term 8,970 --
 Goodwill and other long-term assets 17,592 18,644
 Net assets of discontinued operations -- 36,599
 Total assets $447,365 $521,777
 LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities:
 Current portion of long-term debt $28,396 $23,000
 Accounts payable 57,344 75,631
 Customer advances 22,042 32,144
 Accrued compensation 19,222 21,054
 Accrued income taxes 8,083 7,600
 Restructuring reserves - current 48,539 --
 Other accrued liabilities 45,050 49,115
 Total current liabilities 228,676 208,544
 Long-term debt 65,485 107,500
 Deferred income tax liability -- 12,606
 Post-retirement benefits reserves 33,886 --
 Restructuring reserves-long-term 30,000 --
 Pension and retirement liabilities 23,723 14,972
 Total liabilities 381,770 343,622
 Stockholders' equity
 Common stock - $.01 par value;
 authorized-20,000,000 shares;
 issued and outstanding 9,729,698
 at March 31, 1993 and 9,625,173
 at March 31, 1992 97 96
 Additional paid-in-capital 127,057 125,606
 Retained earnings (deficit) (60,965) 53,232
 Unearned compensation (594) (779)
 Total stockholders' equity 65,595 178,155
 Total liabilities and
 stockholders' equity $447,365 $521,777
 STATEMENTS OF CASH FLOW
 (In Thousands)
 Years Ended
 3/31/93 3/31/92
 Cash flow from operating activities:
 Net income (loss) $(114,197) $38,795
 Adjustments to reconcile net
 income (loss) to cash provided
 by (used for) operations:
 Restructuring charges -
 non-cash portion 109,669 --
 Cumulative effect of change in
 accounting for postretirement
 medical benefit costs 31,181 --
 Depreciation 25,151 27,600
 Amortization 1,779 1,595
 Deferred income taxes (13,505) 11,688
 Losses on disposal of property 493 2,728
 Changes in:
 Receivables (23,668) 31,345
 Inventory 39,695 (39,112)
 Accounts payable (18,287) 13,725
 Customer advances (10,103) 8,561
 Accrued compensation costs (1,831) 2,716
 Accrued income taxes (2,087) 3,544
 Other assets and liabilities (13,868) (4,522)
 Discontinued operations - non-cash
 charges and working capital changes 39,155 (1,213)
 Cash provided by operations 49,577 97,450
 Cash flow from investing activities:
 Capital expenditures (11,319) (19,482)
 Proceeds from disposition of property,
 plant, and equipment 279 370
 Other - continuing operations (2,026) --
 Other - discontinued operations (2,507) (2,139)
 Cash (used for) investing activities (15,573) (21,251)
 Cash flow from financing activities:
 Payments made on long-term debt (36,619) (23,000)
 Proceeds from sale of note receivable 8,000 --
 Proceeds from exercised stock options 1,450 1,839
 Other - net -- (3,245)
 Cash (used for) financing activities (27,169) (24,406)
 Net increase in cash and cash equivalents 6,835 51,793
 Cash and cash equivalents
 - beginning of period 74,451 22,658
 Cash and cash equivalents - end of period $81,286 74,451
 -0- 5/13/93
 /CONTACT: Media: Rod Bitz, 612-939-2646, or Coleen Southwell, 612-939-2709; Investor: Richard N. Jowett, 612-939-2777, all of Alliant Techsystems/
 (ATK)


CO: Alliant Techsystems ST: Minnesota IN: ARO SU: ERN

AL -- MN001 -- 7895 05/13/93 08:03 EDT
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Date:May 13, 1993
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