Aerojet Rocketdyne Holdings, Inc. (NYSE:AJRD) (the "Company") today reported results for the fourth quarter and year ended December 31, 2022.
Aerojet Rocketdyne Holdings, Inc. reported a record high in quarterly sales of $648 million and full year sales of $2,238 million, which represents an increase of 9.9% for the quarter and 2.3% for the year. Book to bill for the year was 1.0, resulting in strong backlog of $6.8 billion, $2.3 billion of which is expected to convert to sales in the next 12 months. Free cash flow was positive in the quarter at $9 million bringing full year free cash flow to a negative $89 million. This was largely driven by working capital growth on large multi-year fixed price defense contracts, higher cash taxes related to tax legislation requiring the capitalization of research and development expenditures, and cash expenditures for the proxy contest, legal matters, and the terminated Lockheed Martin merger. Adjusted EBITDAP margins excluding changes in contract estimates were 8.3% in the quarter and 12.1% for the full year. Excluding accelerated and increased stock compensation expense related to the announced L3Harris Technologies, Inc. ("L3Harris") transaction, Adjusted EBITDAP margins excluding changes in contract estimates were 12.0% and 13.2% for the quarter and full year, respectively.
"Aerojet Rocketdyne delivered record sales for the fourth quarter and for the full year and book to bill of 1.0, as we stayed focused on our business fundamentals and continued to build on our strong foundation. I commend our team's perseverance, which is reflected in our positive results," said Eileen P. Drake, Aerojet Rocketdyne CEO and president. "The highlight of the quarter was the central role we played in enabling humanity's next giant leap with the successful launch of NASA's super-heavy lift Space Launch System exploration rocket and the Orion spacecraft's splashdown after traveling more than 1.4 million miles on a nearly 26-day mission around and beyond the Moon. Aerojet Rocketdyne provided 39 propulsive elements for the Artemis I mission, as well as 14 high pressure tanks. Additionally, an Aerojet Rocketdyne scramjet recently powered the Lockheed Martin version of DARPA's Hypersonic Airbreathing Weapon Concept ("HAWC") missile through its second and final successful flight test, capping a program that accomplished its initial objectives and is providing critical data to inform Air Force Research Laboratory hypersonic technology maturation efforts. We also successfully tested our next generation large solid rocket motor, called eSR-19, which validated advanced motor technology while demonstrating the production maturity of new and upgraded facilities in both Camden, Arkansas and Huntsville, Alabama. Aerojet Rocketdyne has begun hiring for our third campus in Huntsville, Alabama, a 379,000 sq. ft. manufacturing facility that will enable increased manufacturing capacity for our nation's defense production needs. Finally, in December, we announced an agreement to be acquired by L3Harris in an all-cash transaction that will accelerate innovation and strengthen competition for national security and space exploration propulsion solutions. In addition to providing a premium value to our shareholders, the transaction with L3Harris provides tremendous benefits for our employees, customers, partners and the communities in which we operate."