Question-and-Answer Session
Operator
(Operator Instructions) The first question comes from Mr. Joe Nadol from JP Morgan. Please go ahead sir.
Joseph B. Nadol, III – JP Morgan
A few questions, to start out on the margins in Aerojet, I understand there was a favorable performance on Atlas offset by some other declines. I guess I’d like if possible some more detail on what other programs saw margin degradation and what was – if you could quantify the plus from Atlas and the minus from the other programs collectively that will be helpful.
Yasmin R. Seyal
Joe, we experienced some issues on some of our armament programs and I’d say they were probably more of a technical nature combined with some operational issues that the team has been working very, very hard to fix and I’d like to think that most of those issues are now behind us. Scott and the rest of the management team are certainly focused on those issues and I think it’s fair to say that the Atlas results were offset by these issues that were incurred on the other programs and net-net they’re probably less than five fingers on one hand.
Joseph B. Nadol, III – JP Morgan
Okay. Meaning that – were these profit reductions or were these forward losses taken on the armament programs?
Yasmin R. Seyal
They’re a combination of both.
Joseph B. Nadol, III – JP Morgan
Okay. Secondly, on the cash outlook you had it was -$19 million of free cash flow in Q1 and you’ve discussed the $35 million payment that you made as a result of the Steel Partners change of control. What’s the outlook I guess more broadly for cash flow aside from that in Q2 and the rest of the year? Do you have a grasp for sort of how working capital might play out?
Yasmin R. Seyal
I think overall on the full year basis excluding the $35 million we certainly hope to be in a breakeven cash flow position and if all goes well then in a slight cash generation position where essentially the cash coming in from Aerojet is covering interest expenses, legacy expenses, corporate expenses and the retiree medical costs.
Joseph B. Nadol, III – JP Morgan
So since we were -$19 in Q1 do you expect that to flip over and to start to go positive in Q2 or is that going to be more towards the end of the year?
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