ATK (Alliant Techsystems) today reported earnings per share from continuing operations for
the second quarter of fiscal year 2004 of 93 cents, an increase of 27 percent
over 73 cents a year ago. The current quarter includes seven cents per share
resulting from a lower tax rate due to the resolution of a tax matter during
the quarter.

Sales for the second quarter, which ended Sept. 28, rose 10 percent to
$567 million from $513 million last year on higher volume from core
ammunition, propulsion, and composite structure programs and new revenues from
acquired businesses. Organic sales growth during the quarter was greater than
6 percent.

Orders booked during the second quarter rose to $474 million from
$303 million a year ago, bringing year-to-date orders to $1.2 billion, up
50 percent over $769 million a year ago. Supplemental orders for
small-caliber ammunition and new contracts for missile defense propulsion
systems were major factors in the growth.

Paul David Miller (PDM), executive chairman, said the second-quarter
results keep ATK solidly on track to deliver another year of strong financial
and operational performance.

“A combination of factors – including strong orders and cash flow and
continued solid business execution – give us increasing confidence in our
prospects for FY04,” said PDM.

Looking beyond the current year, Dan Murphy, who became chief executive
officer on Oct. 1, said he is particularly encouraged by positive developments
in two key growth areas, missile defense and precision systems.

“We anticipate additional propulsion work on both the ground-based and
sea-based components of the nation’s missile defense system and on the
Minuteman III Intercontinental Ballistic Missile program,” said Murphy. “In
the precision-fire arena, we continue to achieve performance breakthroughs in
key technical demonstrations, most recently guided flight tests of two
Autonomous Naval Support Rounds, which flew more than 61 miles to within
20 meters of their designated targets. These are unprecedented results in the
multi-service pursuit of long-range precision gunnery.”

Murphy noted that recent developments in the Space Shuttle program provide
both a reaffirmation of the company’s sales and profit profile in the current
fiscal year and the potential for additional Shuttle-related business in the

“These developments include last week’s successful test of a new five-
segment booster, a new contract to begin supplying booster separation motors,
an opportunity to support the Shuttle Service Life Extension Program, and a
promising composite-based solution for in-flight Shuttle repairs,” said

Among other key second-quarter financial measures, the EBIT margin rate
(earnings from continuing operations before interest and income taxes as a
percent of sales) was 12.3 percent versus 12.5 percent a year ago. Excluding
the effect of pension expense, which was approximately $8 million higher than
last year, the EBIT margin rate increased 1.2 percent over a year ago,
reflecting continued strong performance in core business operations. (See
reconciliation table at the end of this news release.)

Earnings per share from continuing operations for the first half of fiscal
year 2004 increased 42 percent to $1.77 from $1.25 a year ago on sales of
$1.1 billion, up from $1.0 billion last year. Net earnings for the period
were $1.77 versus $1.35 a year ago. Last year’s results included a gain of
10 cents per share due to the cumulative effect of the adoption of a new
accounting principle and a charge of 21 cents per share reflecting a non-cash
charge to interest expense for the early prepayment of debt.

Cash provided by operating activities less capital expenditures in the
first half was stronger than anticipated, totaling $51 million versus $76
million a year ago. The variance reflects sales growth as well as the receipt
of $17 million for a swap restructuring in the year-ago period.

FY04 and FY05 Guidance

Given the strength of first-half performance and added visibility into the
remainder of the year, ATK now expects FY04 sales to be at the high end of its
previous guidance of between $2.325 billion and $2.345 billion. FY04 earnings
per share from continuing operations are expected to be $3.63 or better.

Orders for FY04, which previously were expected to approach $2.0 billion,
are now projected to be approximately $2.2 billion due to continued strength
in small-caliber ammunition and missile defense programs. The company is also
raising its expectations for cash provided by operating activities less
capital expenditures to approximately $85 million from previous guidance of
between $65 million and $75 million.

Looking ahead to FY05, ATK is projecting sales to increase between 5
percent and 7 percent, driven primarily by organic sales growth. Earnings per
share from continuing operations are expected to be between $3.80 and $3.95,
which includes an estimated increase in pension expense in FY05 of $14 million
or 22 cents per share. Cash provided by operating activities less capital
expenditures is projected to be approximately $100 million.

“We will be working across multiple fronts to deliver on our commitment to
our shareholders,” said Murphy. “We will continue to pursue organic growth
opportunities in precision systems, missile defense propulsion, and
conventional ammunition, while seeking strategic acquisitions that enhance our
prospects for continued growth. On the financial front, we have the strategic
flexibility to focus on the most efficient deployment of our cash, whether it
is for acquisitions, share repurchases, debt repayment, or pension funding.
Continued solid business execution by the ATK team will provide a strong
foundation for all of these activities.”

Second-Quarter Operations Review

Second-quarter sales for the Precision Systems Group were $138 million,
compared with $137 million last year. New revenues from ATK Missile Systems,
which was acquired in 2002, were offset by lower sales of medium-caliber gun
systems due to the completion of several contracts. Year-to-date sales rose
10 percent to $267 million from $243 million a year ago on higher volume from
ordnance systems and missile systems programs.

Aerospace Group second-quarter sales rose 14 percent to $241 million from
$212 million last year, reflecting higher volume from the Space Shuttle
propulsion program as well as other propulsion programs, increased sales of
composite products, and new revenues from Composite Optics, Inc. (COI),
acquired in January 2003. Sales for the six-month period increased 9 percent
to $503 million from $463 million a year ago, boosted by growth in core
propulsion programs, including the Space Shuttle, and core composite structure
programs, as well as new COI sales.

Ammunition and Related Products Group sales in the second quarter
increased 18 percent to $197 million from $167 million a year ago, driven by
higher sales of small-caliber ammunition. Six-month sales were $373 million,
up 10 percent from $339 million in the same period last year – again
reflecting higher volume from small-caliber ammunition programs.

Contracted backlog, which represents the estimated value of contracts for
which ATK is authorized to incur costs but for which revenue has not yet been
recognized, was $3.4 billion at the end of the second quarter. Total backlog,
which includes contracted backlog plus the value of unexercised options, was
$5.1 billion at the end of the quarter.

Recent business highlights include:

  • A five-year contract worth up to $130 million to supply ordnance
    energetic material for the U.S. armed forces.
  • A $92 million contract to supply propulsion systems to support the
    initial deployment of the STANDARD Missile-3 for the sea-based missile defense
  • Contract modifications worth $75 million to produce additional small-
    caliber ammunition to meet Department of Defense training and war reserve
  • A $13 million contract to begin supplying booster separation motors for
    the Space Shuttle, expanding the company’s presence on future Shuttle
  • Contracts from the Department of Homeland Security that provide the
    opportunity to compete for more than $130 million worth of ammunition business
    over the next five years.
  • A successful flight test of an ATK-provided three-stage rocket for an
    Orbital Sciences Corporation interceptor boost vehicle being developed for the
    ground-based missile defense system.
  • A contract to supply four composite tail cones for UH-60 Black Hawk
    helicopters for testing and qualification.
  • Delivery of advanced solid rocket motors for the U.S. Army’s Line-of-
    Sight Antitank (LOSAT) weapon system, opening the way for the start of
    production in 2004.
  • Propulsion and composite structures support for successful missions by
    Pegasus, Delta II, Delta IV, and Titan IV B launches vehicles.

ATK is a $2.2 billion aerospace and defense company with strong positions
in propulsion, composite structures, munitions, precision capabilities, and
civil and sporting ammunition. The company, which is headquartered in Edina,
Minn., employs approximately 12,200 people and has three business groups:
Precision Systems, Aerospace, and Ammunition and Related Products. ATK news
and information can be found at .

Certain information discussed in this press release regarding FY04 and
FY05 guidance, and developments in ATK’s propulsion, missile defense,
precision systems, and Space Shuttle businesses 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: unforeseen
delays in NASA’s Space Shuttle program, changes in governmental spending,
budgetary policies, product sourcing strategies, economic conditions, equity
and corporate bond market returns, the company’s competitive environment, the
timing of awards and contracts, the outcome of contingencies, including
litigation and environmental remediation, program performance, program
terminations, and financial performance projections. 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
annual reports on Form 10-K.

     Reconciliation of Non-GAAP Financial Measure        Quarter Ended
     (in thousands)                              Sept 28, 2003  Sept 29, 2002
     Income from continuing operations before
      interest and income taxes                       $69,680       $64,107
     Less:  Pension expense (income)                    3,250        (4,225)
     Income from continuing operations before
      interest and income taxes excluding the
      effect of pension expense                        72,930        59,882
     Sales                                            566,551       513,145
     Income from continuing operations before
      interest and income taxes excluding the
      effect of pension expense as a percent of sales   12.9%         11.7%

Webcast Information: ATK will webcast its investor conference call on
FY04 second-quarter results at 10:00 a.m. Eastern Time today. The live audio
webcast will be available on the Investor Relations page of ATK’s web site at Information about downloading free Windows Media Player
software, which is required to access the webcast, is available on the
website. For those who cannot participate in the live webcast, a telephone
recording of the conference call will be available for one month after the
call. The telephone number is 719-457-0820, and the confirmation code is

                           ALLIANT TECHSYSTEMS INC.

    (In thousands except per share
     data)                           QUARTERS ENDED       SIX MONTHS ENDED
                                  September September  September   September
                                      28,       29,        28,         29,
                                     2003      2002       2003        2002

    Sales                          $566,551  $513,145  $1,125,689  $1,033,035
    Cost of sales                   445,812   398,321     883,855     804,882
    Gross profit                    120,739   114,824     241,834     228,153
    Operating expenses:
      Research and development        8,294     5,656      16,375      10,631
      Selling                        16,328    15,717      30,736      30,955
      General and administrative     26,437    29,344      57,031      55,868
      Total operating expenses       51,059    50,717     104,142      97,454
    Income from continuing
     operations before interest
     and income taxes                69,680    64,107     137,692     130,699
      Interest expense              (15,133)  (16,819)    (30,178)    (48,545)
      Interest income                   168       169         368         429
    Income from continuing
     operations before income
     taxes                           54,715    47,457     107,882      82,583

    Income tax provision             17,873    18,983      38,076      33,033
    Income from continuing
     operations before minority
     interest expense                36,842    28,474      69,806      49,550
    Minority interest expense, net
     of income taxes                    195         -         255           -
    Income from continuing
     operations                      36,647    28,474      69,551      49,550

    Cumulative effect of change in
     accounting principle, net of
     income taxes                         -         -           -       3,767
    Net income                      $36,647   $28,474     $69,551     $53,317

    Basic earnings per common
      Income from continuing
       operations                     $0.95     $0.75       $1.80       $1.30
      Cumulative effect of change
       in accounting principle          -         -           -          0.10
      Net income                       0.95     $0.75       $1.80       $1.40
    Diluted earnings per common
      Income from continuing
       operations                     $0.93     $0.73       $1.77       $1.25
      Cumulative effect of change
       in accounting principle          -         -           -          0.10
      Net income                      $0.93     $0.73       $1.77       $1.35

    Average number of common
     shares                          38,583    38,130      38,572      38,142
    Average number of common and
     dilutive shares                 39,293    39,266      39,290      39,362

                           ALLIANT TECHSYSTEMS INC.
                         CONSOLIDATED BALANCE SHEETS

    (In thousands except share data)               Sept 28,          March 31,
    Assets                                           2003              2003
    Current assets:
      Cash and cash equivalents                    $46,114            $14,383
      Net receivables                              442,196            464,966
      Net inventory                                149,169            137,849
      Deferred income tax asset                     69,460             69,460
      Other current assets                          18,900             25,658
        Total current assets                       725,839            712,316
    Net property, plant, and equipment             451,770            463,736
    Goodwill                                       839,893            839,893
    Prepaid and intangible pension assets          310,490            281,941
    Deferred income tax asset                       60,742             62,537
    Deferred charges and other non-
     current assets                                117,679            118,841
        Total assets                            $2,506,413         $2,479,264
    Liabilities and Stockholders' Equity
    Current liabilities:
      Current portion of long-term debt             $4,080             $4,331
      Accounts payable                              98,280            115,704
      Contract advances and allowances              38,331             48,386
      Accrued compensation                          82,722            110,693
      Accrued income taxes                          58,440             23,107
      Other accrued liabilities                    127,269            125,832
        Total current liabilities                  409,122            428,053
    Long-term debt                                 795,536            820,856
    Post-retirement and post-employment
     benefits liability                            221,908            234,037
    Additional minimum pension liability           379,999            379,856
    Other long-term liabilities                    143,121            138,538
        Total liabilities                        1,949,686          2,001,340
    Common stock - $.01 par value
      Authorized - 90,000,000 shares
      Issued and outstanding 38,618,811
       shares at September 28, 2003 and
       38,486,630 at March 31, 2003                    416                416
    Additional paid-in-capital                     468,727            470,158
    Retained earnings                              528,345            458,794
    Unearned compensation                           (1,773)            (2,650)
    Accumulated other comprehensive income        (244,010)          (246,878)
    Common stock in treasury, at cost,
     2,938,287 shares held at
      September 28, 2003 and 3,070,468
       at March 31, 2003                          (194,978)          (201,916)
        Total stockholders' equity                 556,727            477,924
        Total liabilities and
         stockholders' equity                   $2,506,413         $2,479,264

                           ALLIANT TECHSYSTEMS INC.

    (In thousands)                                     SIX MONTHS ENDED
                                                   Sept 28,          Sept 29,
    Operating activities                             2003              2002
       Net income                                  $69,551           $53,317
       Adjustments to net income to arrive
        at cash provided by operating activities:
          Depreciation                              30,811            32,116
          Amortization of intangible assets and
            unearned compensation                    2,675             3,044
          Deferred income tax                            -            (6,819)
          (Gain) loss on disposal of property         (497)              216
          Minority interest expense, net
           of income taxes                             255                 -
          Cumulative effect of change in
           accounting principle, net of income
           taxes                                         -            (3,767)
          Changes in assets and liabilities:
              Net receivables                       22,770            19,875
              Net inventory                        (11,320)          (27,412)
              Accounts payable                     (17,424)           (3,854)
              Contract advances and allowances     (10,055)            9,035
              Accrued compensation                 (18,700)          (13,069)
              Accrued income taxes                  35,333            15,711
              Accrued environmental                   (643)            1,458
              Pension and post-retirement
               benefits                            (40,535)          (33,444)
              Other assets and liabilities           7,422            47,597
    Cash provided by operating activities           69,643            94,004
    Investing activities
       Capital expenditures                        (19,103)          (17,734)
       Acquisition of businesses                         -           (44,526)
       Proceeds from sale of property,
        plant, and equipment                         1,627             4,009
    Cash used for investing activities             (17,476)          (58,251)
    Financing activities
       Net borrowings on line of credit
       Payments made on bank debt                  (25,571)          (32,633)
       Payments made to extinguish debt                  -          (472,220)
       Proceeds from issuance of long-term debt          -           525,000
       Payments made for debt issue costs                -            (2,053)
       Net purchase of treasury shares              (2,426)           (1,427)
       Proceeds from employee stock
        compensation plans                           7,561             9,424
    Cash (used for) provided by financing
     activities                                    (20,436)           26,091
    Increase in cash and cash equivalents           31,731            61,844
    Cash and cash equivalents - beginning
     of period                                      14,383             8,513
    Cash and cash equivalents - end of period      $46,114           $70,357