In its first day of operations following the merger of the former ATK and Orbital Sciences, Orbital ATK [OA] on Tuesday said it would organize its operations around three groups and the defense and space company also announced its executive and operational leaders.
David Thompson, the head of the former Orbital Sciences, as stated previously will continue to lead $4.5 billion Orbital ATK as president and CEO. Garrett Pierce, who was chief financial officer (CFO) at Orbital Sciences, continues Orbital ATK’s CFO. Blake Larson, who ran ATK’s Aerospace Group for six years, is now the chief operating officer of the new company.
Going forward, Orbital ATK expects to grow about 4 to 5 percent compounded annually during the next three years, according to briefing charts the company posted on its website on Tuesday. It also expects operating margins to increase 2 to 3 percent during the next three years and attain more than $1 billion in free cash flow in that time.
“Now, with our two organizations coming together under the Orbital ATK banner, we begin operations with substantially greater technical and industrial capabilities and increased financial resources,” Thompson said in a statement.
The three operating groups that make up Orbital ATK are Defense Systems, which is currently the largest, Flight Systems, and Space Systems. The Defense Systems Group, which is led by former ATK Defense Group President Michael Kahn, begins with about $1.9 billion in annual sales.
The Defense Systems Group, based in Baltimore, Md., has responsibility for tactical missiles and precision guided munitions, missile propulsion systems, aircraft protection systems, medium- and small-caliber ammunition, advanced gun systems, and light gunships.
During the next three years, the company forecasts that Defense Systems will grow between 1 and 3 percent compounded annually and hold 29 percent of the company’s overall $12.1 billion backlog.
Flight Systems, which is based in Chandler, Ariz., and has about $1.4 billion in sales, is led by Ronald Grabe, who was executive vice president and general manager of Orbital Sciences’ Launch Systems Group. He will oversee a business with responsibility for the company’s small and medium-class launch vehicles, missile defense interceptors and suborbital targets, propulsion systems for large-class launch vehicles, and commercial and military aerostructures.
Orbital ATK expects Flight Systems to grow between 5 and 7 percent during the next three years. The business has 53 percent of overall backlog.
Frank Culbertson is president of the Dulles, Va.-based Space Systems Group, the smallest of the three sectors with $1.2 billion in sales. He previously led Orbital Sciences’ Advanced Programs Group.
Space Systems includes commercial and national security satellites, scientific spacecraft, human and advanced space systems, space components, space engineering services, and research rocket and balloon operations.
Space Systems is expected to grow between 7 and 9 percent during the next three years.
By 2016, Orbital ATK expects revenue synergies from the combination of the two former companies to be between $150 million and $200 million annually and cost saving synergies gained from various efficiencies, supply chain integration, and savings in marketing, research and development, and other costs to be between $70 million and $100 million annually.
Other corporate executives announced by Orbital ATK include Antonio Elias, chief technical officer, Christine Wolf, who leads Human Resources, Thomas McCabe, general counsel, and Edward Fortunato, head of government relations.