Alliant Techsystems Inc.
) has received a contract, worth $36 million, from the U.S. Army to
provide 120mm training ammunitions for M1A1/A2 Abrams main battle
tanks. This contract award has a customary one-year base period and
four one-year extension options.
Alliant's 120mm cartridges are 982mm in length and weigh 22.3
kg. The ammunition is used for M1A1/A2 Abrams main battle tanks and
comprises M865 kinetic energy and the M1002 multi-purpose anti-tank
These training rounds have been designed in a way that it
closely resembles tactical ammunition in terms of its appearance
and ballistic performance, thus providing warfighters realistic
training experience. The 120mm tank ammunition delivers training
rounds that ensure greater safety, reliability and performance.
This training ammunition will be manufactured at the Allegany
Ballistics Laboratory ("ABL") facility in Rocket Center, West
Virginia. The U.S. Navy owned ABL is operated by Alliant and
provides advanced manufacturing technologies for advanced material
structures, advanced electronic fuzing and integration,
conventional munitions assemblies, and solid rocket motor
Alliant plays a significant role in meeting the U.S. defense
establishment's demand for 120mm training ammunition. To date, the
company has supplied 4 million rounds of this ammunition to the
U.S. armed forces and allied rangers.
We believe Alliant's decision to realign its reporting segments
into three business units will enable the company to become more
competitive, by increasing operational efficiency, ensuring
long-term top and bottom-line growth, and contributing to free cash
flow. Subsequently, these will add value to shareholders wealth
with distribution of continuous cash dividends.
But, we are concerned about limited military ammunition orders
due to U.S. defense budget cutbacks, continued demand for
non-standard weapons program, small caliber ammunitions and medium
caliber guns, and higher pension expenses. Alliant Techsystems Inc.
currently retains a Zacks #3 Rank, which translates into a
short-term Hold rating.
Arlington, Virginia-based Alliant Techsystems Inc. is a premier
aerospace and defense company supplying products to the U.S.
government agencies, and its prime contractors and sub-contractors.
The company also supplies ammunition and related accessories to law
enforcement agencies and commercial customers. Alliant Techsystems
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