ATK Chief Executive Sees Stabilizing NASA Business

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WASHINGTON — The top executive at ATK said the company’s NASA business appears to have stabilized now that the agency has shut down its space shuttle program and settled on the Space Launch System (SLS) as a replacement for the Ares family of rockets the agency had been planning to build.

“On the NASA front, that has really settled down,” Mark DeYoung, ATK’s president and chief executive, said Nov. 1 during the company’s quarterly earnings call. “I was worrying about … NASA probably two years ago, and even last year. That has really settled down.”

ATK made the four-segment solid-rocket motors that launched the space shuttle and would have provided upgraded five-segment motors for the Ares 1 crew launch vehicle and the cargo-only Ares 5 rocket planned under Constellation, a program hatched in 2005 to return astronauts to the Moon. U.S. President Barack Obama canceled Constellation in 2010, leaving ATK unsure whether it would continue building large solid-rocket motors for NASA once the shuttle retired last year.

The future of ATK’s Utah-based solid-motor division came into clearer focus last September when NASA announced an SLS design that would use the five-segment solid-rocket boosters ATK was building for Ares 1 for the first two SLS launches. NASA is now in the early stages of work on the congressionally mandated SLS, which will be used for yet-to-be-funded deep-space exploration missions.

In the first two SLS missions, which are scheduled for 2017 and 2021, the rocket will send the Lockheed Martin-built Orion space capsule around the Moon and back. Only the second flight will be crewed. ATK plans to test-fire an SLS five-segment booster this spring at the company’s Promontory, Utah, test facility.

DeYoung said the $1.8 billion a year NASA has budgeted for SLS vehicle development is “consistent with the funding needed to support industry” on the project.

Although ATK failed to get its solid booster-based Liberty transportation system funded under NASA’s Commercial Crew Program during the company’s second quarter, which ended Sept. 30, it did receive a 30-month, $50 million SLS Advanced Booster study contract from NASA to work on an upgraded version of the SLS solid-rocket motors.

That win “positions us, I think, as a very strong competitor on future competition on SLS,” DeYoung said. ATK is one of four companies NASA picked to study options for increasing the lift capacity of future SLS rockets via solid or liquid strap-on boosters. NASA plans to hold a competition in 2015 to decide who gets to build these boosters.

ATK’s Aerospace Group, the Magna, Utah-based operating segment that includes NASA business, had $310 million in second-quarter revenue — a 6.7 percent drop from the same period last year.

The decrease primarily reflects lower NASA revenue in the space systems operations division and lower revenue in commercial aerospace structures, ATK said in its Nov. 1 earnings report. These decreases pulled the segment’s operating profit down 2 percent to $37 million, despite being partially offset by improved operating performance in the space components division, ATK said.

Without offering specifics, DeYoung spoke briefly on the conference call about space business opportunities from non-NASA customers.

“I think some of our commercial space opportunities we have with partners like [Orbital Sciences Corp. of Dulles, Va.] and others are very interesting and we’re very optimistic about the ability to continue there,” DeYoung said.

The medium-lift Antares rocket Orbital is developing to send cargo to the international space station uses an ATK Castor 30 solid-rocket motor in its upper stage. ATK also provides solid-rocket motors for Orbital’s small Pegasus XL rocket, but the future of that business is uncertain as Orbital has struggled to find payloads for the launcher and has said it may stop building it.

DeYoung also mentioned some classified government business involving small satellites.

“We’ve had a few challenges there but we’re winning new business,” DeYoung said. “We’ve won some significant classified business that we can’t talk about, but it’s exciting for us.”