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GenCorp Reports 2013 Second Quarter Results

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SACRAMENTO, Calif., July 9, 2013 (GLOBE NEWSWIRE) -- GenCorp Inc. (NYSE:GY) today reported results for the second quarter ended May 31, 2013.

Financial Overview

The Company provides Non-GAAP measures as a supplement to financial results based on accounting principles generally accepted in the United States ("GAAP"). A reconciliation of the Non-GAAP measures to the most directly comparable GAAP measures is included at the end of the release.

Second Quarter of Fiscal 2013 compared to Second Quarter of Fiscal 2012

  • Net sales for the second quarter of fiscal 2013 totaled $286.6 million compared to $249.9 million for the second quarter of fiscal 2012.
  • Net loss for the second quarter of fiscal 2013 was $11.8 million, or $0.20 loss per share, compared to net income of $1.7 million, or $0.03 diluted income per share, for the second quarter of fiscal 2012.
  • Adjusted EBITDAP (Non-GAAP measure) for the second quarter of fiscal 2013 was $30.6 million or 10.7% of net sales, compared to $26.7 million or 10.7% of net sales, for the second quarter of fiscal 2012.
  • Segment performance (Non-GAAP measure) before environmental remediation provision adjustments, retirement benefit plan expense, and unusual items was $37.4 million for the second quarter of fiscal 2013, compared to $28.5 million for the second quarter of fiscal 2012.
  • Cash provided by operating activities in the second quarter of fiscal 2013 totaled $12.0 million, compared to $29.3 million in the second quarter of fiscal 2012.
  • Free cash flow (Non-GAAP measure) in the second quarter of fiscal 2013 totaled ($0.6) million, compared to $23.6 million in the second quarter of fiscal 2012.
  • As of May 31, 2013, the Company had $102.8 million in net debt (Non-GAAP measure) compared to $99.8 million as of May 31, 2012. As of May 31, 2013, the Company had $707.4 million of debt outstanding.
  • Funded backlog was $1,014 million as of May 31, 2013 compared to $1,018 million as of November 30, 2012.

The net loss for the second quarter of fiscal 2013 compared to the comparable prior year period was primarily driven by the following: (i) $6.8 million increase in interest expense primarily related to the financing of the acquisition of United Technologies Corporation's ("UTC") Pratt & Whitney Rocketdyne (the "Rocketdyne Business"); (ii) expenses of $6.4 million incurred in the second quarter of fiscal 2013 related to the acquisition the Rocketdyne Business; (iii) $5.8 million increase in non-cash retirement benefit expense; and (iv) $1.8 million increase in stock-based compensation primarily due to increases in the fair value of the Company's stock appreciation rights.

On June 14, 2013, the Company completed the acquisition of substantially all of the Rocketdyne Business. The aggregate consideration to UTC was $411 million, paid in cash, which represents the initial purchase price of $550 million reduced by $55 million relating to the expected future acquisition of UTC's 50% ownership interest of RD Amross, LLC ("RD Amross") (a joint venture with NPO Energomash of Khimki, Russia which sells RD-180 engines to RD Amross) and the portion of the UTC business that markets and supports the sale of RD-180 engines. The acquisition of UTC's 50% ownership interest of RD Amross and UTC's related business is expected to close following the receipt of the Russian governmental regulatory approvals. The purchase price was further adjusted for changes in customer advances, capital expenditures and other net assets, and is subject further to post-closing adjustments.

Included in the (loss) income from continuing operations before income taxes of ($9.6) million and $4.6 million for the second quarter of fiscal 2013 and 2012, respectively, are the following:

Three months ended
May 31,
2013
May 31,
2012
(In millions)
Retirement benefit expense $ 16.1 $ 10.3
Acquisition costs 6.4
Interest expense associated with financing of acquisition, net 8.5
Stock compensation 3.1 1.3
$ 34.1 $ 11.6

"We are pleased with these second quarter results which reflect the continued focus on delivering program performance to our customers while launching a new ERP system and completing the acquisition of Pratt and Whitney Rocketdyne in June 2013," said GenCorp Inc. President and CEO, Scott J. Seymour. "These significant accomplishments transform our Company and create value for all stakeholders."

Operations Review

Aerospace and Defense Segment

Net sales for the second quarter of fiscal 2013 were $285.4 million compared to $247.7 million for the second quarter of fiscal 2012. The increase in net sales was primarily due to (i) an increase of $29.8 million in the various Standard Missile programs primarily from increased development activities for the Throttling Divert and Attitude Control System for the Standard Missile-3 Block IIA program and increased deliveries on the Standard Missile-1 Regrain program and (ii) increased deliveries on the Atlas V program generating additional sales of $13.9 million. Net sales for the first half of fiscal 2013 were $527.7 million compared to $448.0 million for the first half of fiscal 2012. The increase in net sales was primarily due to (i) an increase of $62.4 million in the various Standard Missile programs primarily from increased development activities for the Throttling Divert and Attitude Control System for the Standard Missile-3 Block IIA program and increased deliveries on the Standard Missile-1 Regrain program and (ii) increased deliveries on the Atlas V program generating additional sales of $20.0 million.

The Company's fiscal year ends on November 30 of each year. The fiscal year of the Company's subsidiary, Aerojet-General Corporation ("Aerojet"), ends on the last Saturday of November. As a result of the 2013 calendar, Aerojet had 14 weeks of operation in the first quarter of fiscal 2013 compared to 13 weeks of operations in the first quarter of fiscal 2012. The additional week of operation in the first quarter of fiscal 2013 accounted for $27.8 million in additional net sales.

Segment margin before environmental remediation provision adjustments, retirement benefit plan expense, and unusual items (Non-GAAP measure) was 12.8% for the second quarter of fiscal 2013, compared to 11.1% for the second quarter of fiscal 2012. Segment margin before environmental remediation provision adjustments, retirement benefit plan expense, and unusual items (Non-GAAP measure) was 12.4% for the first half of fiscal 2013, compared to 11.7% for the first half of fiscal 2012. The increase in the segment margin was primarily driven by improved contract performance on a space program which experienced cost growth in the first half of fiscal 2012.

A summary of the Company's backlog is as follows:

May 31, November 30,
2013 2012
(In millions)
Funded backlog $ 1,014 $ 1,018
Unfunded backlog 544 508
Total contract backlog $ 1,558 $ 1,526

Total backlog includes both funded backlog (unfilled orders for which funding is authorized, appropriated and contractually obligated by the customer) and unfunded backlog (firm orders for which funding has not been appropriated). Indefinite delivery and quantity contracts and unexercised options are not reported in total backlog. Backlog is subject to funding delays or program restructurings/cancellations which are beyond the Company's control.

Real Estate Segment

Net sales for the second quarter of fiscal 2013 were $1.2 million compared to $2.2 million for the second quarter of fiscal 2012. Segment performance for the second quarter of fiscal 2013 was income of $1.0 million compared to income of $0.9 million for the second quarter of fiscal 2012. Net sales for the first half of fiscal 2013 were $2.6 million compared to $3.8 million for the first half of fiscal 2012. Segment performance for the first half of fiscal 2013 and 2012 was income of $2.0 million. Net sales and segment performance consist primarily of rental property operations. Fiscal 2012 results included $0.6 million in land sales.

Additional Information

Debt Activity

The Company's debt activity during the first half of fiscal 2013 was as follows:

November 30,
2012

Additions
Cash
Payments
May 31,
2013
(In millions)
Term loan $ 47.5 $ — $ (1.2) $ 46.3
71/8% Second-Priority Senior Secured Notes 460.0 460.0
41/16% Convertible Subordinated Debentures 200.0 200.0
2¼% Convertible Subordinated Debentures 0.2 0.2
Other debt 1.0 (0.1) 0.9
Total Debt and Borrowing Activity $ 248.7 $ 460.0 $ (1.3) $ 707.4

As of May 31, 2013, the Company had $105.2 million available under its revolving credit facility. In addition, as of May 31, 2013, the Company had $44.8 million of outstanding letters of credit.

Retirement Benefit Plans

Components of retirement benefit expense are:

Three months ended May 31, Six months ended May 31,
2013 2012 2013 2012
(In millions)
Service cost $ 1.5 $ 1.2 $ 2.8 $ 2.3
Interest cost on benefit obligation 15.8 19.1 31.6 38.3
Assumed return on plan assets (24.1) (24.8) (48.2) (49.6)
Amortization of prior service credits (0.2) (0.4)
Recognized net actuarial losses 23.1 14.8 46.2 29.5
Retirement benefit expense $ 16.1 $ 10.3 $ 32.0 $ 20.5

The increase in retirement benefit expense was primarily due to higher actuarial losses recognized in 2013 compared to the prior year periods. The increase in actuarial losses was primarily the result of a decline in the discount rate used to determine the Company's retirement benefit obligation.

The Company does not expect to make any cash contributions to its tax-qualified defined benefit pension plan until fiscal 2015 or later. In addition, under the Office of Federal Procurement Policy rules, the Company will recover portions of any required pension funding through its government contracts and the Company estimates that approximately 84% of its unfunded pension obligation as of November 30, 2012 is related to its government contracting business.

The funded status of the pension plan may be adversely affected by the investment experience of the plan's assets, by any changes in U.S. law and by changes in the statutory interest rates used by tax-qualified pension plans in the U.S. to calculate funding requirements. Accordingly, if the performance of the Company's plan's assets does not meet assumptions, if there are changes to the Internal Revenue Service regulations or other applicable law or if other actuarial assumptions are modified, future contributions to the underfunded pension plan could be higher than the Company expects.

Forward-Looking Statements

This release may contain certain "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. Such statements in this release and in subsequent discussions with the Company's management are based on management's current expectations and are subject to risks, uncertainty and changes in circumstances, which cause actual results, performance or achievements to differ materially from anticipated results, performance or achievements. All statements contained herein and in subsequent discussions with the Company's management that are not clearly historical in nature are forward-looking and the words "anticipate," "believe," "expect," "estimate," "plan," and similar expressions are generally intended to identify forward-looking statements. A variety of factors could cause actual results or outcomes to differ materially from those expected and expressed in the Company's forward-looking statements. Some important risk factors that could cause actual results or outcomes to differ from those expressed in the forward-looking statements include, but are not limited to, the following:

  • future reductions or changes in U.S. government spending;
  • cancellation or material modification of one or more significant contracts;
  • negative audit of the Company's business by the U.S. government;
  • the integration difficulties or inability to integrate the Rocketdyne Business into the Company's existing operations successfully or to realize the anticipated benefits of the acquisition;
  • ability to manage effectively the Company's expanded operations following the acquisition of the Rocketdyne Business;
  • expenses related to the acquisition of the Rocketdyne Business and the integration of our operations with the Rocketdyne Business;
  • the increase in the Company's leverage and debt service obligations as a result of the acquisition of the Rocketdyne Business;
  • the Rocketdyne Business's international sales are subject to applicable laws relating to export controls, the violation of which could adversely affect its operations;
  • the acquisition of the RD Amross, LLC is subject to a number of conditions which could delay or materially adversely affect the timing of its completion, or prevent it from occurring;
  • cost overruns on the Company's contracts that require the Company to absorb excess costs;
  • failure of the Company's subcontractors or suppliers to perform their contractual obligations;
  • failure to secure contracts;
  • failure to comply with regulations applicable to contracts with the U.S. government;
  • failure to comply with applicable laws, including laws relating to export controls and anti-corruption or bribery laws;
  • costs and time commitment related to potential acquisition activities;
  • the Company's inability to adapt to rapid technological changes;
  • failure of the Company's information technology infrastructure;
  • failure to effectively implement the Company's enterprise resource planning ("ERP") system, including the ERP implementation for the Rocketdyne Business;
  • product failures, schedule delays or other problems with existing or new products and systems;
  • the release, or explosion, or unplanned ignition of dangerous materials used in the Company's businesses;
  • loss of key qualified suppliers of technologies, components, and materials;
  • the funded status of the Company's defined benefit pension plan and the Company's obligation to make cash contributions in excess of the amount that the Company can recover in its current period overhead rates;
  • effects of changes in discount rates, actual returns on plan assets, and government regulations of defined benefit pension plans;
  • the possibility that environmental and other government regulations that impact the Company become more stringent or subject the Company to material liability in excess of its established reserves;
  • environmental claims related to the Company's current and former businesses and operations;
  • reductions in the amount recoverable from environmental claims;
  • the results of significant litigation;
  • occurrence of liabilities that are inadequately covered by indemnity or insurance;
  • inability to protect the Company's patents and proprietary rights;
  • business disruptions;
  • the earnings and cash flow of the Company's subsidiaries and the distribution of those earnings to the Company;
  • the substantial amount of debt which places significant demands on the Company's cash resources and could limit the Company's ability to borrow additional funds or expand its operations;
  • the Company's ability to comply with the financial and other covenants contained in the Company's debt agreements;
  • risks inherent to the real estate market;
  • changes in economic and other conditions in the Sacramento, California metropolitan area real estate market or changes in interest rates affecting real estate values in that market;
  • additional costs related to the Company's divestitures;
  • the loss of key employees and shortage of available skilled employees to achieve anticipated growth;
  • a strike or other work stoppage or the Company's inability to renew collective bargaining agreements on favorable terms;
  • fluctuations in sales levels causing the Company's quarterly operating results and cash flows to fluctuate;
  • failure to maintain effective internal controls in accordance with the Sarbanes-Oxley Act; and
  • those risks detailed from time to time in the Company's reports filed with the SEC.

About GenCorp

GenCorp is a leading technology-based manufacturer of aerospace and defense products and systems with a real estate segment that includes activities related to the entitlement, sale and leasing of the Company's excess real estate assets. Additional information about the Company can be obtained by visiting the Company's website at http://www.GenCorp.com.

GenCorp Inc.
Unaudited Condensed Consolidated Statements of Operations
Three months ended May 31, Six months ended May 31,
2013 2012 2013 2012
(In millions, except per share amounts)
(Unaudited)
Net Sales $ 286.6 $ 249.9 $ 530.3 $ 451.8
Operating costs and expenses:
Cost of sales (exclusive of items shown separately below) 254.4 220.3 471.9 394.2
Selling, general and administrative 13.5 11.2 25.8 21.5
Depreciation and amortization 5.3 5.5 11.4 10.8
Other expense, net 10.5 2.6 16.4 4.5
Total operating costs and expenses 283.7 239.6 525.5 431.0
Operating income 2.9 10.3 4.8 20.8
Non-operating (income) expense:
Interest income (0.1) (0.1) (0.2) (0.3)
Interest expense 12.6 5.8 23.8 11.8
Total non-operating expense, net 12.5 5.7 23.6 11.5
(Loss) income from continuing operations before income taxes (9.6) 4.6 (18.8) 9.3
Income tax provision 2.1 3.3 7.0 5.6
(Loss) income from continuing operations (11.7) 1.3 (25.8) 3.7
(Loss) income from discontinued operations, net of income taxes (0.1) 0.4 0.4
Net (loss) income $ (11.8) $ 1.7 $ (25.8) $ 4.1
(Loss) Income Per Share of Common Stock
Basic and Diluted
(Loss) income per share from continuing operations $ (0.20) $ 0.02 $ (0.43) $ 0.06
Income per share from discontinued operations, net of income taxes 0.01 0.01
Net (loss) income per share $ (0.20) $ 0.03 $ (0.43) $ 0.07
Weighted average shares of common stock outstanding, basic and diluted 59.5 59.0 59.4 58.9

GenCorp Inc.
Unaudited Operating Segment Information
Three months ended May 31, Six months ended May 31,
2013 2012 2013 2012
(In millions)
(Unaudited)
Net Sales:
Aerospace and Defense $ 285.4 $ 247.7 $ 527.7 $ 448.0
Real Estate 1.2 2.2 2.6 3.8
Total Net Sales $ 286.6 $ 249.9 $ 530.3 $ 451.8
Segment Performance:
Aerospace and Defense $ 36.4 $ 27.6 $ 65.6 $ 52.5
Environmental remediation provision adjustments (1.2) (2.3) (0.6) (2.8)
Retirement benefit plan expense (10.8) (4.7) (21.5) (9.4)
Unusual items (1.7) (0.2) (1.6) (0.4)
Aerospace and Defense Total 22.7 20.4 41.9 39.9
Real Estate 1.0 0.9 2.0 2.0
Total Segment Performance $ 23.7 $ 21.3 $ 43.9 $ 41.9
Reconciliation of segment performance to (loss) income from continuing operations before income taxes:
Segment performance $ 23.7 $ 21.3 $ 43.9 $ 41.9
Interest expense (12.6) (5.8) (23.8) (11.8)
Interest income 0.1 0.1 0.2 0.3
Stock-based compensation expense (3.1) (1.3) (6.3) (2.2 )
Corporate retirement benefit plan expense (5.3) (5.6) (10.5) (11.1)
Corporate and other (7.8) (3.7) (11.7) (7.4)
Unusual items (4.6) (0.4) (10.6) (0.4)
(Loss) income from continuing operations before income taxes $ (9.6) $ 4.6 $ (18.8) $ 9.3

The Company evaluates its operating segments based on several factors, of which the primary financial measure is segment performance. Segment performance represents net sales from continuing operations less applicable costs, expenses and provisions for unusual items relating to the segment operations. Segment performance excludes corporate income and expenses, provisions for unusual items not related to the segment operations, interest expense, interest income, and income taxes. The Company believes that segment performance provides information useful to investors in understanding its underlying operational performance. Specifically, the Company believes the exclusion of the items listed above permits an evaluation and a comparison of results for on-going business operations. It is on this basis that management internally assesses the financial performance of its segments.

GenCorp Inc.
Unaudited Condensed Consolidated Balance Sheets
May 31,
2013
November 30,
2012
(In millions)
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 134.6 $ 162.1
Restricted cash 10.0
Accounts receivable 142.0 111.5
Inventories 59.2 46.9
Recoverable from the U.S. government and other third parties for environmental remediation costs 22.3 22.3
Receivable from Northrop Grumman Corporation ("Northrop") 6.0 6.0
Other receivables, prepaid expenses and other 9.2 16.8
Income taxes 2.4 2.5
Total Current Assets 385.7 368.1
Noncurrent Assets
Restricted cash 460.0
Property, plant and equipment, net 155.9 143.9
Real estate held for entitlement and leasing 71.8 70.2
Recoverable from the U.S. government and other third parties for environmental remediation costs 97.7 107.9
Receivable from Northrop 69.5 69.3
Goodwill 94.9 94.9
Intangible assets 13.1 13.9
Other noncurrent assets, net 62.5 51.1
Total Noncurrent Assets 1,025.4 551.2
Total Assets $ 1,411.1 $ 919.3
LIABILITIES, REDEEMABLE COMMON STOCK, AND SHAREHOLDERS' DEFICIT
Current Liabilities
Short-term borrowings and current portion of long-term debt $ 2.8 $ 2.7
Accounts payable 73.4 56.1
Reserves for environmental remediation costs 41.6 39.5
Postretirement medical and life benefits 7.5 7.5
Advance payments on contracts 95.4 100.1
Income taxes 0.3
Deferred income taxes 10.5 9.4
Other current liabilities 126.3 103.3
Total Current Liabilities 357.8 318.6
Noncurrent Liabilities
Senior debt 43.8 45.0
Second-priority senior notes 460.0
Convertible subordinated notes 200.2 200.2
Other debt 0.6 0.8
Deferred income taxes 2.5 2.2
Reserves for environmental remediation costs 139.9 150.0
Pension benefits 439.1 454.5
Postretirement medical and life benefits 66.7 68.3
Other noncurrent liabilities 67.4 68.5
Total Noncurrent Liabilities 1,420.2 989.5
Total Liabilities 1,778.0 1,308.1
Commitments and contingencies (Note 7)
Redeemable common stock 2.7 3.9
Shareholders' Deficit
Common stock 5.9 5.9
Other capital 272.7 269.6
Accumulated deficit (207.7) (181.9)
Accumulated other comprehensive loss, net of income taxes (440.5) (486.3)
Total Shareholders' Deficit (369.6) (392.7)
Total Liabilities, Redeemable Common Stock and Shareholders' Deficit $ 1,411.1 $ 919.3
GenCorp Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
Six months ended
May 31, May 31,
2013 2012
(In millions)
(Unaudited)
Operating Activities
Net (loss) income $ (25.8) $ 4.1
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Income from discontinued operations (0.4)
Depreciation and amortization 11.4 10.8
Amortization of debt discount and financing costs 2.7 1.2
Stock-based compensation 6.3 2.2
Retirement benefit expense 32.0 20.5
Tax benefit on stock-based awards (0.1) (0.7)
Loss on debt repurchased 0.4
Changes in assets and liabilities (7.5) 9.3
Net cash provided by continuing operations 19.0 47.4
Net cash used in discontinued operations (0.1) (0.1)
Net Cash Provided by Operating Activities 18.9 47.3
Investing Activities
Purchases of restricted cash investments (470.0)
Purchases of investments (0.5)
Proceeds from sale of property 0.6
Capital expenditures (21.7) (9.3)
Net Cash Used in Investing Activities (492.2) (8.7)
Financing Activities
Tax benefit on stock-based awards 0.1 0.7
Proceeds from shares issued equity plans 0.1
Proceeds from issuance of debt 460.0
Debt issuance costs (13.1) (0.3)
Debt repayments (1.3) (76.4)
Vendor financing repayments (0.4)
Net Cash Provided by (Used in) Financing Activities 445.8 (76.4)
Net Decrease in Cash and Cash Equivalents (27.5) (37.8)
Cash and Cash Equivalents at Beginning of Year 162.1 188.0
Cash and Cash Equivalents at End of Year $ 134.6 $ 150.2

Use of Non-GAAP Financial Measures

In addition to segment performance (discussed above), the Company provides the Non-GAAP financial measures of its operational performance called Adjusted EBITDAP. The Company uses this metric to further its understanding of the historical and prospective consolidated core operating performance of its segments, net of expenses incurred by its corporate activities in the ordinary, on-going and customary course of its operations. Further, the Company believes that to effectively compare the core operating performance metrics from period to period on a historical and prospective basis, the metric should exclude items relating to retirement benefits (pension and postretirement benefits), significant non-cash expenses, the impacts of financing decisions on the earnings, and items incurred outside the ordinary, on-going and customary course of its operations. Accordingly, the Company defines Adjusted EBITDAP as GAAP (loss) income from continuing operations before income taxes adjusted by interest expense, interest income, depreciation and amortization, retirement benefit expense, and unusual items which the Company does not believe are reflective of such ordinary, on-going and customary activities. Adjusted EBITDAP does not represent, and should not be considered an alternative to, net (loss) income, as determined in accordance with GAAP.

Three months ended May 31, Six months ended May 31,
2013 2012 2013 2012
(In millions, except percentage amounts)
(Unaudited)
(Loss) income from continuing operations before income taxes $ (9.6) $ 4.6 $ (18.8) $ 9.3
Interest expense 12.6 5.8 23.8 11.8
Interest income (0.1) (0.1) (0.2) (0.3)
Depreciation and amortization 5.3 5.5 11.4 10.8
Retirement benefit plan expense 16.1 10.3 32.0 20.5
Unusual items
Rocketdyne Business acquisition related costs 6.4 11.8
Legal related matters (0.1) 0.2 0.4 0.4
Loss on debt repurchased 0.4 0.4
Adjusted EBITDAP $ 30.6 $ 26.7 $ 60.4 $ 52.9
Adjusted EBITDAP as a percentage of net sales 10.7% 10.7% 11.4% 11.7%

In addition to segment performance and Adjusted EBITDAP, the Company provides the Non-GAAP financial measures of free cash flow and net debt. The Company uses these financial measures, both in presenting its results to stockholders and the investment community, and in its internal evaluation and management of the business. Management believes that these financial measures are useful to investors because they permit investors to view the Company's business using the same tools that management uses to gauge progress in achieving its goals.

Three months ended May 31, Six months ended May 31,
2013 2012 2013 2012
(In millions)
(Unaudited)
Cash provided by operating activities $ 12.0 $ 29.3 $ 18.9 $ 47.3
Capital expenditures (12.6) (5.7) (21.7) (9.3)
Free cash flow $ (0.6) $ 23.6 $ (2.8) $ 38.0
May 31, May 31,
2013 2012
(In millions)
(Unaudited)
Debt principal $ 707.4 $ 250.0
Cash and cash equivalents including restricted cash (604.6) (150.2)
Net debt $ 102.8 $ 99.8

Because the Company's method for calculating the Non-GAAP measures may differ from other companies' methods, the Non-GAAP measures presented above may not be comparable to similarly titled measures reported by other companies. These measures are not recognized in accordance with GAAP, and the Company does not intend for this information to be considered in isolation or as a substitute for GAAP measures.

CONTACT: Investors: Kathy Redd vice president and chief financial officer 916.355.2361 Ron Samborsky vice president, investor relations 916.355.3610 Media: Glenn Mahone vice president, communications 202.302.9941

Source:GenCorp Inc.