Sales Increase Nine Percent Entirely From Organic Growth
Sales and EPS Exceed Prior Guidance
ATK on Track to Achieve Double Digit EPS Growth

Alliant Techsystems (NYSE: ATK) announced today that earnings per share in the first quarter rose 10 percent to $1.09 from 99 cents per share a year ago. The prior year period included an 8-cent tax gain. Excluding this gain, FY07 first quarter EPS increased by 20 percent (see reconciliation table).

Sales for the quarter, which ended July 2, climbed nine percent to $822 million with organic sales growth accounting for all of the gain. Sales in the prior year period were $757 million. The company also said its EBIT margin (earnings before interest and income taxes as a percent of sales) increased to 9.7 percent from 9.3 percent a year ago.

“ATK’s strong first quarter paves the way for an outstanding fiscal year 2007,” said Dan Murphy, Chairman and Chief Executive Officer. “We continue delivering double digit earnings growth by focusing on the fundamentals – organic growth on the top line, improved margins and a capital deployment strategy that optimizes shareholder value. I am particularly pleased with the recent Precision Guidance Kit win, which builds on ATK’s earlier successes in precision weapons and further establishes ATK as an industry leader in developing inexpensive, effective solutions for warfighting requirements,” said Murphy. Other recent highlights:

— ATK initiated work under a $30 million NASA contract for development of the Ares I and Ares V next-generation launch vehicles

— Discovery astronauts conducted successful tests using the ATK-developed NOAX resin designed for on-orbit repair of damage to the leading edge of the space shuttle’s wing

— The company delivered its first engineering hardware for the James Webb Space Telescope, which is currently scheduled to fly in 2013 with more than $65 million of ATK content

— ATK received a contract to manufacture composite fan containment cases for General Electric’s next-generation of commercial aircraft engines, which will be used on the Boeing 747-8 series

— Revenue in the company’s civil ammunition business increased 27 percent to $87 million


The following table presents the company’s results for the quarter ended on July 2, 2006.

  Net Sales and Income before Interest, Income Taxes, and Minority Interest
                            (Dollars in Thousands)

                                    Quarters Ended
                             July 2, 2006  July 3, 2005  $ Change    % Change

    Ammunition Systems Group    $286,934     $247,005     $39,929      16.2%
    Launch Systems Group         264,622      237,040      27,582      11.6%
    Mission Systems Group        270,862      272,947      (2,085)     (0.7)%
    Total external sales        $822,418     $756,992     $65,426       8.6%

    Income before Interest, Income Taxes, and Minority Interest:

                                    Quarters Ended
                             July 2, 2006  July 3, 2005  $ Change

    Ammunition Systems Group     $19,820      $20,514       $(694)
    Launch Systems Group          37,646       32,551       5,095
    Mission Systems Group         27,106       21,985       5,121
    Corporate                     (5,194)      (4,869)       (325)
    Total                        $79,378      $70,181      $9,197
    Note: The net expense of Corporate primarily reflects expenses incurred
for administrative functions that are performed centrally at the corporate
headquarters (as well as stock option expenses and elimination of
intercompany profits.)


ATK operates three principal business groups: Ammunition Systems Group; Launch Systems Group; and Mission Systems Group.


Revenue from the Ammunition Systems Group increased $40 million in the quarter to $287 million from $247 million in the prior year, a 16 percent organic growth rate over the prior-year quarter. Civil ammunition sales contributed significantly to the growth by posting a $19 million increase on continued strong demand for commercial and law enforcement products. Demand for military small-caliber ammunition and medium-caliber ammunition also contributed to the increase. The company expects mid-to-upper single-digit organic growth for the full year.

First quarter earnings before interest and taxes (operating profit) in Ammunition Systems were $20 million compared to $21 million in the prior year quarter. The Group’s EBIT reflects higher sales volume in civil and military ammunition, offset by the final costs related to completion of the company’s new TNT production line.


Revenue from the Launch Systems Group increased $28 million in the quarter to $265 million compared to $237 million in the prior year, a 12 percent organic growth rate. The increase was driven by the favorable timing of $21 million in revenue from the Minuteman III Propulsion Replacement Program (PRP), a $9 million increase in flares and decoys, and a $6 million increase associated with Ares I. The increase was partially offset by reduced sales due to the timing of reusable solid rocket motor (RSRM) material purchases last year, and completion of work related to an in-flight repair kit for the leading edge of the Space Shuttle’s wings, which accounted for $4 million in prior year sales. ATK expects mid-single-digit growth for the full year.

First quarter operating profit for Launch Systems increased to $38 million, compared to $33 million the prior year quarter. The improvements were driven in part by timing on the Minuteman III and Trident D5 strategic propulsion programs.


Mission Systems revenue was $271 million compared to $273 million in the prior year quarter. Revenue highlights from the quarter included a $6 million increase for the Advanced Anti-Radiation Guided Missile (AARGM) program, which successfully completed its Critical Design Review (CDR), and a $10 million increase in fuze and proximity sensors due to higher demand and the successful consolidation of the fuze business. These increases were primarily offset by a decline in revenue from existing barrier systems programs due to contract timing as the company prepares for production of its next-generation barrier system. ATK expects that the Mission Systems Group will achieve mid-to-upper single-digit organic growth for the full year.

First quarter operating profit increased to $27 million from $22 million in the prior year quarter. The increase resulted primarily from improved margins in large-caliber ammunition, the absence of fuze restructuring costs, and the timing of an SM-3 flight incentive.


The company expects FY07 revenues to exceed $3.40 billion; operating profit margin of approximately 10 percent; and EPS in a range of $4.85 – $5.00 per share. ATK expects cash flow from operations of approximately $260 million and capital expenditures of approximately $75 million.

The company expects average share count of less than 36 million in FY07. The effective tax rate is expected to be approximately 35 percent (assuming the research and development tax credit is extended). Pension expenses are expected to be less than $78 million.

Reconciliation of Non-GAAP Financial Measures

Earnings per share excluding a tax gain

Earnings per share excluding a tax gain is defined as diluted earnings per share excluding the impact of a tax gain. ATK management believes prior period earnings per share excluding the impact of a prior period tax gain provides investors with an important perspective on the results of ATK’s earnings.

                                             Quarter Ended
                                              July 3, 2005
     Diluted earnings per share $                  0.99
     Tax gain                                     (0.08)
     Earnings per share excluding a tax gain      $0.91

ATK is a $3.4 billion advanced weapon and space systems company employing approximately 15,000 people in 22 states. News and information can be found on the Internet at .

Certain information discussed in this press release constitutes forward- looking statements as defined in the Private Securities Litigation Reform Act of 1995. Although ATK believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved. Forward-looking information is subject to certain risks, trends, and uncertainties that could cause actual results to differ materially from those projected. Among these factors are: delays in NASA’s Space Shuttle program; changes in governmental spending, budgetary policies and product sourcing strategies; the company’s competitive environment; risks inherent in the development and manufacture of advanced technology; increases in commodity costs, energy prices, and production costs; the terms and timing of awards and contracts; program performance; program terminations; changes in cost estimates related to relocation of facilities; the outcome of contingencies, including litigation and environmental remediation; actual pension asset returns and assumptions regarding future returns, discount rates and service costs; the availability of capital market financing; changes to accounting standards; changes in tax rules or pronouncements; economic conditions; and the company’s capital deployment strategy, including debt repayment, share repurchases, pension funding, mergers and acquisitions and any integration thereof. ATK undertakes no obligation to update any forward-looking statements. For further information on factors that could impact ATK, and statements contained herein, reference should be made to ATK’s filings with the Securities and Exchange Commission, including quarterly reports on Form 10-Q, current reports on Form 8-K, and ATK’s Annual Report on Form 10-K for the fiscal year ended March 31, 2006.

                           ALLIANT TECHSYSTEMS INC.

    (In thousands except per share data)                QUARTERS ENDED
                                                   July 2,           July 3,
                                                    2006              2005

    Sales                                         $822,418          $756,992
    Cost of sales                                  671,060           623,589
    Gross profit                                   151,358           133,403
    Operating expenses:
       Research and development                     11,657             9,881
       Selling                                      24,798            17,976
       General and administrative                   35,525            35,365
       Total operating expenses                     71,980            63,222
    Income before interest, income taxes,
     and minority interest                          79,378            70,181
       Interest expense                            (16,835)          (17,470)
       Interest income                                 203               127
    Income before income taxes and
     minority interest                              62,746            52,838
    Income tax provision                            23,800            15,509
    Income before minority interest                 38,946            37,329
    Minority interest, net of income taxes              73               109
    Net income                                     $38,873           $37,220

    Earnings per common share:
       Basic                                         $1.10             $1.01
       Diluted                                        1.09              0.99

    Average number of common shares                 35,327            37,035

    Average number of common and dilutive shares    35,771            37,616

                           ALLIANT TECHSYSTEMS INC.
                         CONSOLIDATED BALANCE SHEETS

    (In thousands except share data)           July 2, 2006     March 31, 2006
    Current assets:
        Cash and cash equivalents                  $11,543             $9,090
        Net receivables                            789,741            738,909
        Net inventories                            159,980            139,876
        Deferred income tax assets                  77,279             77,848
        Other current assets                        52,372             53,728
           Total current assets                  1,090,915          1,019,451
    Net property, plant, and equipment             447,521            453,958
    Goodwill                                     1,163,186          1,163,186
    Prepaid and intangible pension assets           81,964             82,254
    Deferred charges and other non-
     current assets                                180,679            183,131
           Total assets                         $2,964,265         $2,901,980
    Liabilities and Stockholders' Equity
    Current liabilities:
        Cash overdrafts                            $12,919            $63,036
        Current portion of long-term debt           27,000             29,596
        Line of credit borrowings                   75,000                  -
        Accounts payable                           146,137            165,955
        Contract advances and allowances            44,861             49,667
        Accrued compensation                        85,466            114,537
        Accrued income taxes                        42,998             23,710
        Other accrued liabilities                  230,107            224,443
           Total current liabilities               664,488            670,944
    Long-term debt                               1,089,250          1,096,000
    Deferred income tax liabilities                  3,011              2,909
    Postretirement and postemployment
     benefits liability                            172,362            175,314
    Minimum pension liability                      230,044            212,258
    Other long-term liabilities                    116,359            116,197
           Total liabilities                     2,275,514          2,273,622
    Common stock - $.01 par value
        Authorized - 90,000,000 shares
        Issued and outstanding
         35,449,002 shares at July 2, 2006
         and 35,207,335 at March 31, 2006              355                352
    Additional paid-in-capital                     476,117            472,861
    Retained earnings                              967,394            928,521
    Unearned compensation                              -               (2,760)
    Accumulated other comprehensive loss          (332,543)          (333,136)
    Common stock in treasury, at cost,
     6,106,059 shares held at July 2, 2006
     and 6,347,726 at March 31, 2006              (422,572)          (437,480)
           Total stockholders' equity              688,751            628,358
           Total liabilities and
            stockholders' equity                $2,964,265         $2,901,980

                           ALLIANT TECHSYSTEMS INC.

    (In thousands)                                        QUARTERS ENDED
                                               July 2, 2006       July 3, 2005
    Operating activities
          Net income                               $38,873            $37,220
          Adjustments to net income to
           arrive at cash (used for)
           provided by operating activities:
                Depreciation                        17,231             17,094
                Amortization of intangible assets    2,043              2,178
                Amortization of deferred
                 financing costs                       810                972
                Deferred income taxes                  271              3,072
                (Gain) loss on disposal of property    (72)               220
                Minority interest, net of
                 income taxes                           73                109
                Share-based plans expense            9,137              4,900
                Excess tax benefits from
                 share-based plans                  (1,385)                 -
                Changes in assets and liabilities:
                      Net receivables              (50,832)           (44,590)
                      Net inventories              (20,104)            (8,271)
                      Accounts payable             (12,538)           (37,892)
                      Contract advances
                       and allowances               (4,806)            27,453
                      Accrued compensation         (27,923)           (17,674)
                      Accrued income taxes          19,288             19,137
                      Pension and other
                       postretirement benefits      15,124              7,581
                      Other assets and
                       liabilities                  13,271             (4,229)
    Cash (used for) provided by operating
     activities                                     (1,539)             7,280
    Investing activities
          Capital expenditures                     (18,760)            (6,618)
          Proceeds from the disposition
           of property, plant, and equipment           370                  8
    Cash used for investing activities             (18,390)            (6,610)
    Financing activities
          Change in cash overdrafts                (50,117)            11,856
          Net borrowings on line of credit          75,000                  -
          Payments made on bank debt                (6,750)          (273,303)
          Payments made to extinguish debt          (2,596)                 -
          Proceeds from issuance of long-term debt       -            270,000
          Payments made for debt issue costs          (185)              (644)
          Net purchase of treasury shares           (6,147)           (24,989)
          Proceeds from employee stock
           compensation plans                       11,792             11,573
          Excess tax benefits from share-based
           plans                                     1,385                  -
    Cash provided by (used for) financing
     activities                                     22,382             (5,507)
    Increase (decrease) in cash and cash
     equivalents                                     2,453             (4,837)
    Cash and cash equivalents - beginning
     of period                                       9,090             12,772
    Cash and cash equivalents - end of period      $11,543             $7,935
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