Aerojet Reports 5% Revenue Drop

Aerojet Reports 5% Revenue Drop
NASA's SLS rocket is launched by Aerojet Rocketdyne engines.

Aerojet Rocketdyne Holdings Inc. reported second-quarter earnings with a backlog of nearly $7 billion.

The El Segundo aerospace and defense parts manufacturer, which also has significant facilities in Chatsworth in the San Fernando Valley, reported on Aug. 1 an adjusted net income of $16.2 million (20 cents a share) for the quarter ending June 30, compared with an adjusted net income of $49.1 million (59 cents a share) in the same period a year earlier. Revenue decreased by 5% from the prior year to $528.5 million.

Chief Executive Eileen Drake called the manufacturer’s business “strong” and added that it had $6.9 billion in backlog, or about three times the annual revenue brought in by the company.

“This backlog now includes our largest RL10 award to date for 116 engines that will fly on the Vulcan Centaur rocket and support the largest commercial launch contract in history for Amazon’s Project Kuiper satellite broadband system,” Drake said in a statement to announce the second-quarter results.

Aerojet has a rocket engine manufacturing site in Chatsworth, which is where it is currently building the RS-25 engine for NASA’s Space Launch System rocket to take humans back to the Moon on the Artemis capsule and on deep-space missions.

“We are looking forward to seeing our RS-25 engines and other propulsion systems power various parts of the Artemis I mission that is expected to launch later this month,” Drake said in the statement. In a release announcing the second-quarter financials, Aerojet attributed the decrease in revenue to a decline in the Standard Missile, RS-25, and RS-68 programs.

The decrease in net income was attributed by the company to cost growth from supply chain disruptions and necessary technical and manufacturing changes on a portion of the Standard Missile program; favorable contract performance on the RS-68 program in the prior year; and costs associated with the proxy contest and associated litigation matters in the current period, the release added.

Former board chairman Warren Lichtenstein waged a proxy battle against Drake earlier this year that resulted in Drake and her slate of candidates being overwhelmingly elected to serve on the board in late June.

“As a result of the proxy contest and related litigation, costs in excess of $16 million were incurred by certain participants in these activities,” the release continued. “These costs have been submitted to the company for reimbursement, subject to the approval of the board of directors at their upcoming meeting. Should such approval be obtained, the resulting cash outflow would be expected to occur in the second half of 2022.”

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