<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                   FORM 10-Q

/X/  Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934

     For the quarterly period ended October 3, 1999 or

/_/  Transition report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934

     For the transition period from            to

                        Commission file number 1-10582

                           ALLIANT TECHSYSTEMS INC.
            (Exact name of registrant as specified in its charter)

                  DELAWARE                                    41-1672694
        (State or other jurisdiction of                   (I.R.S. Employer
        incorporation or organization)                   Identification No.)

             600 SECOND STREET N.E.
              HOPKINS, MINNESOTA                              55343-8384
     (Address of principal executive office)                  (Zip Code)

                                (612) 931-6000
             (Registrant's telephone number, including area code)

                                NOT APPLICABLE
(Former name, former address and former fiscal year if changed from last report)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed under Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                                Yes /X/  No /_/

     As of October 31, 1999, the number of shares of the registrant's common
stock, par value $.01 per share, outstanding was 9,978,515 (excluding 3,885,098
treasury shares).

<PAGE>

                         PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
                   Consolidated Income Statements (Unaudited)


<TABLE>
<CAPTION>
 (In thousands except                                           QUARTERS ENDED                     SIX MONTHS ENDED
   per share data)                                        ----------------------------       ----------------------------
                                                          October 3       September 27       October 3       September 27
                                                            1999              1998             1999              1998
                                                          ----------      ------------       ---------       ------------
<S>                                                       <C>               <C>              <C>               <C>
Sales                                                     $ 252,789         $ 258,998         $525,510         $ 515,319
Cost of sales                                               200,708           213,564          425,369           424,654
                                                           --------         ---------         --------         ---------
Gross margin                                                 52,081            45,434          100,141            90,665
Operating expenses:
    Research and development                                  2,918             2,137            4,805             3,732
    Selling                                                   5,088             5,734           10,569            14,486
    General and administrative                               14,307            13,162           26,740            24,080
                                                           --------         ---------         --------         ---------
    Total operating expenses                                 22,313            21,033           42,114            42,298
                                                           --------         ---------         --------         ---------
Income from operations                                       29,768            24,401           58,027            48,367
    Miscellaneous income                                         17                77               18                41
                                                           --------         ---------         --------         ---------
Income before interest and income taxes                      29,785            24,478           58,045            48,408
    Interest expense                                         (8,307)           (5,192)         (17,462)          (10,876)
    Interest income                                             140               323              247               667
                                                           --------         ---------         --------         ---------
Income from continuing operations before
    income taxes                                             21,618            19,609           40,830            38,199
Income tax provision                                          5,621             2,941           10,232             5,730
                                                           --------         ---------         --------         ---------
Income from continuing operations                            15,997            16,668           30,598            32,469
Gain on disposal of discontinued
    operations, net of income taxes                           9,450                 -            9,450                 -
                                                           --------         ---------         --------         ---------
Income before extraordinary loss                             25,447            16,668           40,048            32,469
Extraordinary loss on early extinguishment
    of debt, net of income taxes                                  -           (14,627)               -           (14,627)
                                                           --------         ---------         --------         ---------
Net income                                                 $ 25,447         $   2,041         $ 40,048         $  17,842
                                                           ========         =========         ========         =========

Basic earnings per common share:
    Income from continuing operations                      $   1.56         $    1.33          $  2.99         $    2.58
    Discontinued operations                                     .92                 -              .92                 -
    Extraordinary loss                                            -             (1.17)               -             (1.16)
                                                           --------         ---------         --------         ---------
Basic earnings per common share                            $   2.48         $     .16         $   3.91         $    1.42
                                                           ========         =========         ========         =========
Diluted earnings per common share:
    Income from continuing operations                      $   1.53         $    1.30         $   2.92         $    2.51
    Discontinued operations                                     .90                 -              .90                 -
    Extraordinary loss                                            -             (1.14)               -             (1.13)
                                                           --------         ---------         --------         ---------
Diluted earnings per common share                          $   2.43         $     .16         $   3.82         $    1.38
                                                           ========         =========         ========         =========

Average number of common shares
 (thousands)                                                 10,240            12,502           10,233            12,607
                                                           ========         =========         ========         =========
Average number of common and
 dilutive shares (thousands)                                 10,457            12,813           10,471            12,918
                                                           ========         =========         ========         =========

</TABLE>

See Notes to Consolidated Financial Statements
<PAGE>

                    Consolidated Balance Sheets (Unaudited)


<TABLE>
<CAPTION>
                                                                 ----------------------     --------------------
(In thousands except share data)                                     October 3, 1999           March 31, 1999
                                                                 ----------------------     --------------------
<S>                                                              <C>                        <C>
Assets
Current assets:
    Cash and cash equivalents                                    $        28,871            $          21,078
    Receivables                                                          225,217                      233,499
    Net inventory                                                         50,508                       44,030
    Deferred income tax asset                                             41,912                       41,912
    Other current assets                                                   5,520                        2,589
                                                                 ---------------            -----------------
                  Total current assets                                   352,028                      343,108
Net property, plant, and equipment                                       332,562                      335,751
Goodwill                                                                 125,092                      127,799
Prepaid and intangible pension assets                                     77,738                       77,552
Other assets and deferred charges                                          8,995                       10,108
                                                                 ---------------            -----------------
                  Total assets                                   $       896,415            $         894,318
                                                                 ===============            =================
Liabilities and Stockholders' Equity
Current liabilities:
    Current portion of long-term debt                            $        51,375            $          36,500
    Line of credit borrowings                                             17,000                            -
    Accounts payable                                                      61,355                       93,991
    Contract advances and allowances                                      35,116                       49,456
    Accrued compensation                                                  24,841                       32,433
    Accrued income taxes                                                  18,546                       13,075
    Other accrued liabilities                                             56,751                       61,033
                                                                 ---------------            -----------------
                  Total current liabilities                              264,984                      286,488
Long-term debt                                                           305,118                      305,993
Post-retirement and post-employment benefits liability                   124,006                      128,279
Other long-term liabilities                                               54,999                       54,835
                                                                 ---------------            -----------------
                  Total liabilities                              $       749,107            $         775,595
Contingencies
Common stock - $.01 par value
    Authorized - 20,000,000 shares
    Issued and outstanding 10,153,939 shares at
    October 3, 1999 and 10,284,530 at March 31, 1999             $           139            $             139
Additional paid-in-capital                                               237,247                      238,513
Retained earnings                                                        163,405                      123,357
Unearned compensation                                                     (3,418)                      (3,289)
Pension liability adjustment                                              (2,940)                      (2,940)
Common stock in treasury, at cost (3,704,674 shares held at
    October 3, 1999 and 3,579,083 at March 31, 1999)                    (247,125)                    (237,057)
                                                                 ---------------            -----------------
                  Total stockholders' equity                     $       147,308            $         118,723
                                                                 ---------------            -----------------
                  Total liabilities and stockholders' equity     $       896,415            $         894,318
                                                                 ===============            =================
</TABLE>

See Notes to Consolidated Financial Statements
<PAGE>

               Consolidated Statements of Cash Flows (Unaudited)


<TABLE>
<CAPTION>
(In thousands)                                                                       SIX MONTHS ENDED
                                                                       -------------------    --------------------
                                                                         October 3, 1999       September 27, 1998
                                                                       -------------------    --------------------
<S>                                                                    <C>                    <C>
Operating activities
Net income                                                               $       40,048         $      17,842
Adjustments to net income to arrive at cash provided by
     (used for) operations:
            Depreciation                                                         19,917                19,424
            Amortization of intangible assets and unearned
                  compensation                                                    4,587                 2,954
            Extraordinary loss on early extinguishment
                  of debt                                                             -                17,208
            Loss on disposal of property                                            499                   367
            Changes in assets and liabilities:
                  Receivables                                                     8,282                 2,052
                  Inventory                                                      (6,478)                2,320
                  Accounts payable                                              (32,636)              (12,588)
                  Contract advances and allowances                              (14,341)              (12,927)
                  Accrued compensation                                           (7,592)               (8,788)
                  Accrued income taxes                                            5,471                 1,837
                  Accrued restructuring and facility consolidation                    -                (2,295)
                  Accrued environmental liability                                   (42)                 (274)
                  Pension and post-retirement benefits                           (4,067)               (4,273)
                  Other assets and liabilities                                   (7,027)              (23,475)
                                                                         --------------         -------------
Cash provided by (used for) operations                                            6,621                  (616)
                                                                         --------------         -------------
Investing activities
Capital expenditures                                                            (17,219)              (13,688)
Acquisition of business                                                               -                (1,100)
Proceeds from disposition of property, plant, and equipment                         (59)                  260
                                                                         --------------         -------------
Cash used for investing activities                                              (17,278)              (14,528)
                                                                         --------------         -------------
Financing activities
Net borrowings on line of credit                                                 17,000               159,000
Payments made on bank debt                                                      (15,000)               (8,834)
Payments made to extinguish high yield debt                                           -              (152,997)
Proceeds from issuance of long-term debt                                         29,000                     -
Net purchase of treasury shares                                                 (13,868)              (29,213)
Proceeds from exercised stock options                                             1,318                 1,626
                                                                        ---------------         -------------
Cash provided by (used for) financing activities                                 18,450               (30,418)
                                                                         --------------         -------------
Increase (decrease) in cash and cash equivalents                                  7,793               (45,562)
Cash and cash equivalents - beginning of period                                  21,078                68,960
                                                                         --------------         -------------
Cash and cash equivalents - end of period                                $       28,871         $      23,398
                                                                         ==============         =============
</TABLE>

See Notes to Consolidated Financial Statements
<PAGE>

            Notes to Consolidated Financial Statements (Unaudited)

1.   During the six-months ended October 3, 1999, the Company made principal
     payments on its bank term debt of $15.0 million. At October 3, 1999, the
     Company had borrowings of $17.0 million against its $250 million bank
     revolving credit facility. Additionally, the Company had outstanding
     letters of credit of $41.0 million, which further reduced amounts available
     on the revolving facility to $192.0 million at October 3, 1999.

     The remaining scheduled minimum loan payments on outstanding long-term debt
     are as follows: fiscal 2000, $23.6 million; fiscal 2001, $55.7 million;
     fiscal 2002 through 2004, $69.2 million, per year; fiscal 2005, $69.7
     million.

2.   The major categories of current and long-term accrued liabilities are as
     follows (in thousands):

<TABLE>
<CAPTION>
                                                                      Period Ending
                                                 ------------------------------------------------------------
                                                       October 3, 1999                March 31, 1999
     ---------------------------------------------------------------------------------------------------------
     <S>                                         <C>                                  <C>
      Employee benefits and insurance                    $  21,994                      $  30,231
      Legal accruals                                        10,391                         10,045
      Other accruals                                        24,366                         20,757
     ---------------------------------------------------------------------------------------------------------
      Other accrued liabilities-current                  $  56,751                      $  61,033
     ---------------------------------------------------------------------------------------------------------
      Environmental remediation liability                $  18,002                      $  18,044
      Deferred tax liability                                25,870                         25,870
      Supplemental employee retirement plan                 11,159                         10,953
      Other                                                    (32)                           (32)
     ---------------------------------------------------------------------------------------------------------
      Other long-term liabilities                        $  54,999                      $  54,835
     ---------------------------------------------------------------------------------------------------------
</TABLE>

     The decrease in employee benefits and insurance since March 31, 1999 is
     reflective of payments made during the six-month period ended October 3,
     1999, for previously accrued employee payroll taxes.

3.   Tax payments of $4.7 and $1.3 million were paid for alternative minimum
     taxes during the six-month periods ended October 3, 1999, and September 27,
     1998, respectively.

     The Company's provision for income taxes included both federal and state
     income taxes. Income tax expense on continuing operations was $5.6 and
     $10.2 million for the three and six-month periods ended October 3, 1999,
     compared to $2.9 and $5.7 million for the comparable prior periods. Income
     tax provisions for interim periods are based on estimated effective annual
     income tax rates. The estimated effective tax rate for the current fiscal
     year ending March 31, 2000 is reflective of the Company's best estimate of
     the fiscal 2000 tax effects associated with its business strategies, as
     well as the resolution of tax matters during the year.

4.   On December 15, 1998, the Company completed the repurchase of 1.7 million
     shares of its common stock at a price of $77 per share, or approximately
     $130 million in total. The repurchase occurred via the terms and conditions
     of a modified "Dutch auction" tender offer (Dutch auction) and was financed
     under the Company's bank credit facilities.

     In connection with the completion of the Dutch auction, the Company's Board
     of Directors authorized the Company to repurchase up to an additional 1.1
     million shares of its common stock. As of October 3, 1999, repurchases of
     638 thousand shares have been made under the program, aggregating
     approximately $48.6 million. On October 26, 1999 the Company's Board of
     Directors authorized the Company to make additional share repurchases (over
     and above the 1.1 previously authorized) of up to 1.0 million shares of its
     common stock. Any repurchases made under these authorizations would be
     subject to market conditions and
<PAGE>

  the Company's compliance with its debt covenants. As of October 3, 1999, the
  Company's debt covenants would allow the Company to make additional
  repurchases of approximately $90 million of the Company's stock. There can be
  no assurance that the Company will purchase all or any portion of the shares,
  or as to the timing or terms thereof.

5. Contingencies:

  Environmental Matters - The Company is subject to various local and national
  laws relating to protection of the environment and is in various stages of
  investigation or remediation of potential, alleged, or acknowledged
  contamination. At October 3, 1999, the accrued liability for environmental
  remediation of $31.1 million represents management's best estimate of the
  present value of the probable and reasonably estimable costs related to the
  Company's known remediation obligations.  It is expected that a significant
  portion of the Company's environmental costs will be reimbursed to the
  Company.  As collection of those reimbursements is estimated to be probable,
  the Company has recorded a receivable of $9.6 million, representing the
  present value of those reimbursements at October 3, 1999.  Such receivable
  primarily represents the expected reimbursement of costs associated with the
  Aerospace operations acquired from Hercules in the Aerospace acquisition,
  whereby the Company generally assumed responsibility for environmental
  compliance at Aerospace facilities.  It is expected that much of the
  compliance and remediation costs associated with these facilities will be
  reimbursable under U.S. Government contracts, and that those environmental
  remediation costs not covered through such contracts will be covered by
  Hercules under various indemnification agreements, subject to the Company
  having appropriately notified Hercules of issues identified prior to the
  expiration of the stipulated notification periods (March 2000 or March 2005,
  depending on site ownership).  The Company's accrual for environmental
  remediation liabilities and the associated receivable for reimbursement
  thereof, have been discounted to reflect the present value of the expected
  future cash flows, using a discount rate, net of estimated inflation, of
  approximately 4.5 percent.

  The following is a summary of the Company's amounts recorded for environmental
  remediation at October 3, 1999 (in thousands):

<TABLE>
<CAPTION>

                                                   Accrued                     Environmental Costs --
                                           Environmental Liability            Reimbursement Receivable
-----------------------------------------------------------------------------------------------------------
<S>                                        <C>                                <C>
Amounts (Payable)/Receivable                      $(40,421)                             $13,351
Unamortized Discount                                 9,351                               (3,706)
-----------------------------------------------------------------------------------------------------------
Present Value Amounts
 (Payable)/Receivable                             $(31,070)                             $ 9,645
-----------------------------------------------------------------------------------------------------------
</TABLE>

  At October 3, 1999, the estimated discounted range of reasonably possible
  costs of environmental remediation is between $31 and $46 million. The Company
  does not anticipate that resolution of the environmental contingencies in
  excess of amounts accrued, net of recoveries, will materially affect future
  operating results.

  In future periods, new laws or regulations, advances in technologies, outcomes
  of negotiations/litigations with regulatory authorities and other parties,
  additional information about the ultimate remedy selected at new and existing
  sites, the Company's share of the cost of such remedies, changes in the extent
  and type of site utilization, the number of parties found liable at each site
  and their ability to pay are all factors that could significantly change the
  Company's estimates.  It is reasonably possible that management's current
  estimates of liabilities for the above contingencies could change in the near
  term, as more definitive information becomes available.


  Legal Matters - As a U.S. Government contractor, the Company is subject to
  defective pricing and cost accounting standards non-compliance claims by the
  Government.  Additionally, the Company has
<PAGE>

  substantial Government contracts and subcontracts, the prices of which are
  subject to adjustment. The Company believes that resolution of such claims and
  price adjustments made or to be made by the Government for open fiscal years
  (1994 through 1999) will not materially exceed the amount provided in the
  accompanying balance sheets.

  The Company is a defendant in a number of lawsuits that arise out of, and are
  incidental to, the conduct of its business.  Such matters arise out of the
  normal course of business and relate to product liability, intellectual
  property, government regulations, including environmental issues, and other
  issues.  Certain of the lawsuits and claims seek damages in very large
  amounts.  In these legal proceedings, no director, officer, or affiliate is a
  party or a named defendant.

  The Company has agreed to settle the civil action captioned United States v.
  Alliant Techsystems Inc., which was filed in the U.S. District Court for the
  District of Minnesota on March 10, 1997, alleging violations of the False
  Claims Act, the Truth in Negotiations Act, and common law and equitable
  theories of recovery, in connection with a contract for the AT4 shoulder-fired
  weapon. Under the terms of the settlement, the Company will pay $1.3 million,
  including interest, but will not admit to any liability for either fraud or
  violation of the False Claims Act.

  The patent infringement case brought against the Company by Cordant
  Technologies (formerly Thiokol Corporation), which was filed in the U.S.
  District Court for the District of Delaware on November 15, 1995, was
  dismissed by the U.S. Court of Appeals for the Federal Circuit on September
  29, 1999. The dismissal followed an agreement by the parties to dismiss the
  action with prejudice and to resolve future rocket motor patent related
  disputes, if any, under a specified alternative dispute resolution mechanism.

  During fiscal 1998, the Company substantially completed the requirements of
  the M117 Bomb reclamation contract. The contract contained a priced option,
  having approximate contract value less than $5 million, whereby the customer
  could require the reclamation of additional quantities, given that such option
  be exercised within the terms and conditions of the contract. On August 4,
  1997, the customer informed the Company that it was exercising the option. The
  Company, based on advice from its counsel, maintained that the option exercise
  was invalid and therefore did not perform on the option. The Company's appeal
  of the validity of the option to the United States Court of Appeals for the
  Federal Circuit, and subsequent request for a hearing en banc related to the
  option's validity, were both denied. In late December 1997, the Company was
  informed by the customer that the Company was being terminated for default on
  the contract option. Depending on the outcome of the termination for default
  litigation, which involves allegations unrelated to the validity of the
  option, management currently believes that the impact to the Company's future
  operating earnings will not be material.

  During fiscal 1998, the Company identified potential technical and safety
  issues on its Explosive "D" contracts that, depending on the outcome of the
  continuing evaluation of these risks and the potentially mitigating solutions,
  could add cost growth to the program. These potential technical and safety
  issues have caused the Company to delay contract performance until the issues
  are resolved to the satisfaction of the Company. As a result, the Government
  customer has provided the Company notification that it has been terminated for
  default on the contracts. The Company is currently working closely with the
  customer to resolve these matters. Based on information known at this time,
  management believes that the range of reasonably possible additional cost
  impact that could occur as a result of the potential technical and safety
  issues on the Explosive "D" program will not be material. However, the
  ultimate outcome is dependent on the extent to which the Company is able to
  mitigate these potential risks and ultimately resolve the contractual
  performance issues on a mutually agreeable basis.

  The Company does not believe that the above contract terminations will have a
  material adverse impact on the Company's future results of operations, its
  liquidity, or its financial position.
<PAGE>

     While the results of litigation cannot be predicted with certainty,
     management believes, based upon the advice of counsel, that the actions
     seeking to recover damages against the Company either are without merit,
     are covered by insurance and reserves, do not support any grounds for
     cancellation of any contract, or are not likely to materially affect the
     financial condition or results of operations of the Company, although the
     resolution of any such matters during a specific period could have a
     material adverse effect on the quarterly or annual operating results for
     that period.

6.   Interest paid during the six-month periods ended October 3, 1999, and
     September 27, 1998, totaled $17.0 million and $11.2 million, respectively.
     Interest charges under the Company's revolving credit facility are
     primarily at the London Inter Bank Offering Rate (LIBOR), plus 2.00 percent
     (which totaled 7.5 percent at October 3, 1999), and will be subject to
     change in the future, as changes occur in market conditions and in the
     Company's financial performance and leverage ratios.

7.   Consistent with the Statement of Financial Accounting Standards (SFAS) No.
     128, "Earnings Per Share", the Company presents basic earnings per share
     (EPS) and diluted EPS, instead of the primary and fully diluted EPS that
     were previously required. Basic EPS is computed based upon the weighted
     average number of common shares outstanding for each period presented.
     Diluted EPS is computed based on the weighted average number of common
     shares and common equivalent shares. Common equivalent shares represent the
     effect of redeemable common stock and stock options outstanding during each
     period presented, which, if exercised, would have a dilutive effect on EPS.
     In computing EPS for the three and six month periods ended October 3, 1999
     and September 27, 1998, net income as reported for each respective period,
     is divided by:

<TABLE>
<CAPTION>
                                                         Three-Months Ended                  Six-Months Ended
                                                 ---------------------------------------------------------------------
                                                 Oct. 3, 1999     Sept. 27, 1998     Oct. 3, 1999    Sept. 27, 1998
      ----------------------------------------------------------------------------------------------------------------
<S>                                              <C>              <C>                <C>             <C>
      Basic EPS:
      - Average Shares Outstanding                   10,240            12,502           10,233           12,607
      ================================================================================================================

      Diluted EPS:
      - Average Shares Outstanding                   10,240            12,502           10,233           12,607
      - Dilutive effect of options and                  217               311              238              311
         redeemable common shares
      ----------------------------------------------------------------------------------------------------------------

      Diluted EPS Shares Outstanding                 10,457            12,813           10,471           12,918
      ================================================================================================================

</TABLE>

     Due to the option price being greater than the average market price of the
     common shares, there were 274,600 and 273,100 stock options, respectively,
     that were not included in the computation of diluted EPS for the three and
     six-month periods ended October 3, 1999, and 500 and 138,850 stock options,
     respectively, that were not included in the computation of diluted EPS for
     the comparable periods of the prior year. In addition, for the three and
     six-month periods ended September 27, 1998, 271,000 common shares, which
     were subject to the put/call agreement with Hercules were not included in
     the calculation of diluted EPS, as inclusion of those redeemable shares
     would have been anti-dilutive.

8.   During the quarter ended October 3, 1999, the Company recognized a $9.5
     million gain on disposal of discontinued operations (net of $.1 million in
     taxes), due to resolution of an insurance settlement related to the
     Company's former demilitarization operations in Ukraine.

9.   The figures set forth in this quarterly report are unaudited but, in the
     opinion of the Company, include all adjustments necessary for a fair
     presentation of the results of operations for the three and six-month
     periods ended October 3, 1999, and September 27, 1998. The Company's
     accounting policies are described in the notes to financial statements in
     its fiscal 1999 Annual Report on Form 10-K.
<PAGE>

10.  In March 1998, the AICPA issued Statement of Position (SOP) 98-1
     "Accounting for the Costs of Computer Software Developed or Obtained for
     Internal Use." Effective April 1, 1999, the Company adopted this SOP. It
     did not have a material impact to the Company's results of operations or
     its financial position for the three or six-month periods ended October 3,
     1999.

11.  Certain reclassifications have been made to the fiscal 1999 financial
     statements, as previously reported, to conform to current classification.
     These reclassifications did not affect the net income from operations as
     previously reported.
<PAGE>

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

RESULTS OF OPERATIONS
---------------------

Sales

Sales for the quarter ended October 3, 1999 totaled $252.8 million, a decrease
of $6.2 million, or 2.4 percent, from $259.0 million for the comparable quarter
in the prior year. Aerospace segment sales were $102.8 million, compared to
$103.0 million for the comparable quarter in the prior year. Conventional
Munitions segment sales were $95.6 million, a decrease of $21.4 million, or 18.3
percent, from $117.0 million for the comparable quarter in the prior year. The
decrease was primarily attributable to decreased tank ammunition and propellant
sales due to timing of contractual production requirements and replacement of a
current production program with the next-generation-round development program.
Defense Systems segment sales were $56.4 million, an increase of $16.2 million,
or 40.3 percent, from $40.2 million for the comparable quarter in the prior
year. The increase was driven primarily by an increase in volume on anti-tank
munitions programs and defense electronic sales on the AAR47 contract, which is
a missile warning system.

Sales for the six-month period ended October 3, 1999 totaled $525.5 million, an
increase of $10.2 million, or 2.0 percent, from $515.3 million for the
comparable period of the prior year. Aerospace segment sales for the six-month
period ended October 3, 1999 were $221.2 million, an increase of $27.0 million
or 13.9 percent, compared to $194.2 million for the comparable period of the
prior year. The increase is attributable to higher space propulsion sales,
primarily driven by increased sales on the Titan and Delta propulsion programs.
Conventional Munitions segment sales were $202.1 million, a decrease of $36.2
million, or 15.2 percent from $238.3 million for the comparable quarter in the
prior year. The decrease was primarily attributable to decreased tank ammunition
and propellant sales due to timing of contractual production requirements and
replacement of a current production program with the next-generation-round
development program. Defense Systems segment sales were $106.6 million, an
increase of $21.3 million, or 25.0 percent, compared to $85.3 million for the
comparable period of the prior year. The increase was primarily driven by an
increase in anti-tank munitions volume.

Company sales for fiscal 2000 are expected to be approximately $1.1 billion.

Gross Margin

The Company's gross margin in the quarter ended October 3, 1999, was $52.1
million or 20.6 percent of sales, compared to $45.4 million, or 17.5 percent of
sales for the comparable quarter of the prior year. Margin improvements in the
current year are due to improved cost performance on certain Defense Systems
fuzing and munitions programs, and also due to increased margins on tank
ammunition programs at Conventional Munitions. The current year quarter included
approximately $3 million of margin arising out of the resolution of cost
reimbursement matters, on now complete fuzing contracts. These increases were
offset by lower gross margins in the Aerospace segment, due to timing of flight
incentives and lower contract revenues as new programs ramp up. Gross margin for
the six-month period ended October 3, 1999 totaled $100.1 million, or 19.1
percent of sales, compared to $90.7 million, or 17.6 percent of sales for the
comparable period of the prior year. The increase is primarily attributable to
improved margins on certain Defense Systems fuzing and munitions programs.
<PAGE>

Fiscal 2000 gross margin, as a percent of sales, is expected to be approximately
19.0 percent.

Operating Expenses

The Company's operating expenses for the quarter ended October 3, 1999, totaled
$22.3 million, or 8.8 percent of sales, compared to $21.0 million, or 8.1
percent of sales for the comparable quarter of the prior year. Operating
expenses for the six-month period ended October 3, 1999 totalled $42.1 million,
or 8.0 percent of sales, compared to $42.3 million, or 8.2 percent of sales for
the comparable period of the prior year. The overall decrease was driven by
reduced selling costs due to the timing of program pursuits in the prior year
period, which included significant costs in the Defense Systems segment as well
as in the Conventional Munitions segment, which spent approximately $1.7 million
in pursuit of the E3 tank ammunition program. These decreases were partially
offset by one-time legal and consulting expenditures made during the current
year period on certain internal company initiatives.

Fiscal 2000 operating expenses, stated as a percent of sales, are expected to be
approximately 8.0 - 8.5 percent.

Interest Expense

The Company's net interest expense for the quarter ended October 3, 1999, was
$8.2 million, an increase of $3.3 million, compared to $4.9 million for the
comparable quarter in the prior year. Net interest expense for the six-month
period ended October 3, 1999 was $17.2 million, an increase of $7.0 million,
compared to $10.2 million for the comparable period of the prior year. The
increase in the current year expense was driven by higher average outstanding
borrowings in the current periods, which was primarily driven by repurchases of
the company's stock in fiscal 1999. See discussion of the Company's share
repurchases below.

Income before Income Taxes

The Company's income before income taxes (earnings before taxes, or "EBT") for
the quarter ended October 3, 1999 was $21.6 million, compared to $19.6 million
for the comparable quarter of the prior year. Aerospace segment EBT for the
quarter ended October 3, 1999, was $7.8 million, a decrease of $5.4 million,
compared to $13.2 million for the comparable quarter of the prior year. The
decrease was driven by the timing of flight incentives and lower overall
contract margin rates as new programs ramp up. Conventional Munitions segment
EBT for the quarter ended October 3, 1999, was $4.1 million, compared to $4.4
million for the comparable quarter of the prior year. The decrease is primarily
reflective of reduced tank ammunition and propellant sales due to timing of
contractual requirements and replacement of a current production program with
the next-generation-round development program. Defense Systems segment EBT for
the quarter ended October 3, 1999 was $4.2 million, compared to $(2.9) million
for the comparable quarter of the prior year. The increase in the current year
quarter reflects improved program performance on certain fuzing and munitions
programs and an increase of approximately $3 million arising out of resolution
of cost-reimbursement matters on now complete fuzing contracts.

EBT for the six-month period ended October 3, 1999 totaled $40.8 million, an
increase of $2.6 million, compared to $38.2 million for the comparable period of
the prior year. Aerospace segment EBT for the six-month period ended October 3,
1999, was $27.4 million, compared to $28.2 million for the comparable period of
the prior year. Conventional Munitions segment EBT for the six-month period
ended October 3, 1999 was $5.3 million, a decrease of $1.3 million,
<PAGE>

compared to $6.6 million for the comparable period of the prior year. The
decrease is primarily due to current year cost growth on ordnance reclamation
projects, and reduced tank ammunition and propellant sales. Defense Systems EBT
for the six-month period ended October 3, 1999 was $1.0 million, an increase of
$7.8 million, compared to $(6.8) million for the comparable period of the prior
year. The current year increase is driven by improved program performance on
certain fuzing and munitions programs and an increase of approximately $3
million arising out of the resolution of cost reimbursement matters on now
complete fuzing contracts, offset by a non-recurring charge of approximately
$4.0 million to re-value certain long-term assets (primarily fixed assets) to
the estimated net realizable value, as the segment's management has elected to
pursue disposal by sale of certain assets no longer deemed critical to the
business.

Income Taxes

Income tax expense was $5.6 and $10.2 million for the three and six-month
periods ended October 3, 1999, compared to $2.9 and $5.7 million for the
comparable periods of the prior year. Income tax provisions for interim periods
are based on estimated effective annual income tax rates. The estimated
effective tax rate for the current fiscal year ending March 31, 2000, is
reflective of the Company's best estimate of the fiscal 2000 tax effects
associated with its business strategies, as well as the resolution of tax
matters during the year.

Discontinued Operations

During the quarter ended October 3, 1999, the Company recognized a $9.5 million
gain on disposal of discontinued operations (net of $.1 million in taxes) due to
the resolution of an insurance settlement related to the Company's former
demilitarization operations in Ukraine.

Net Income

Net income reported for the quarter ended October 3, 1999, was $25.4 million, an
increase of $23.4 million, when compared with net income of $2.0 million for the
comparable quarter of the prior year. The overall increase is primarily the
result of the absence of an extraordinary loss incurred in the prior year due to
the early extinguishment of debt, current year increased gross margins in the
Defense Systems segment and an insurance settlement on discontinued operations,
offset by current year increases in interest and income tax expenses. Net income
for the six-month period ended October 3, 1999 was $40.0 million, an increase of
$22.2 million, compared to net income of $17.8 million for the comparable period
of the prior year. The increase was primarily driven by the absence of an
extraordinary loss incurred in the prior year due to the early extinguishment of
debt, current year increased gross margins in the Defense Systems segment, and
an insurance settlement on discontinued operations, partially offset by current
year increased interest and income tax expense.

LIQUIDITY, CAPITAL RESOURCES, AND FINANCIAL CONDITION
-----------------------------------------------------

Cash provided by operations totaled $6.6 million for the six-months ended
October 3, 1999, an increase in cash of $7.2 million, when compared with cash
used by operations of $0.6 million in the comparable period of the prior year.
The increased level of cash provided from operations during the current year
period was driven by increased net income due primarily to the resolution of an
insurance settlement related to the company's former demilitarization operations
in Ukraine. In addition, cash improved due to the absence of approximately $13
million in payments for legal settlements which occurred in the prior year
period including payments for previously settled qui-
<PAGE>

tam lawsuits. These increases were partially offset by an increase in current
year cash used for payables payments.

Cash used by investing activities for the six-months ended October 3, 1999, was
$17.3 million, a $2.8 million increase in cash used, compared to cash used by
investing activities of $14.5 million in the comparable period of the prior
year. This increase primarily represents increased capital expenditures in the
current year in the Aerospace segment to support composites structure business
growth associated with the Delta family of rockets. Fiscal 2000 capital
expenditures are currently expected to approximate fiscal 1999 expenditures.

Cash provided by financing activities for the six-months ended October 3, 1999,
was $18.5 million, a $48.9 million increase in cash provided compared to cash
used by financing activities of $30.4 million in the comparable period of the
prior year. This current year increase is due primarily to prior year borrowings
associated with the Company's stock repurchase.

As of October 3, 1999, the Company had borrowings of $17.0 million against its
$250 million bank revolving credit facility. Additionally, the Company had
outstanding letters of credit of $41.0 million, which further reduced amounts
available on the revolving credit facility to $192.0 million at October 3, 1999.
During the six-months ended October 3, 1999, the Company made additional
borrowings under its bank term debt facilities of $29.0 million. These
borrowings were made to finance, on a long-term basis, a portion of the
Company's stock repurchases which had been made primarily in late fiscal 1999.
Scheduled minimum loan payments on the Company's outstanding long-term debt is
as follows: fiscal 2000, $23.6 million; fiscal 2001, $55.7 million; fiscal 2002
through 2004, $69.2 million, per year; fiscal 2005, $69.7 million. The Company's
total debt (line of credit borrowings, current portion of long-term debt, and
long-term debt) as a percentage of total capitalization, was 72 percent on
October 3, 1999 and 74 percent on March 31, 1999.

On December 15, 1998, the Company completed the repurchase of 1.7 million shares
of its common stock at a price of $77 per share, or approximately $130 million
in total. The repurchase occurred via the terms and conditions of a modified
"Dutch auction" tender offer (Dutch auction) and was financed under the
Company's bank credit facilities.

In connection with the completion of the Dutch auction, the Company's Board of
Directors authorized the Company to repurchase up to an additional 1.1 million
shares of its common stock. As of October 3, 1999, repurchases of approximately
638 thousand shares have been made under the program, aggregating approximately
$48.6 million. On October 26, 1999, the company's Board of Directors authorized
the Company to make additional share repurchases (over and above the 1.1
previously authorized) of up to 1.0 million shares of its common stock. Any
repurchases made under these plans would be subject to market conditions and the
Company's compliance with its debt covenants. As of October 3, 1999, the
Company's debt covenants would allow the Company to make additional repurchases
of approximately $90 million of the Company's stock. There can be no assurance
that the Company will purchase all or any portion of the shares, or as to the
timing or terms thereof.

Based on the financial condition of the Company at October 3, 1999, the Company
believes that future operating cash flows, combined with the availability of
funding, if needed, under its bank revolving credit facilities, will be adequate
to fund future growth of the Company as well as service its long-term
obligations.
<PAGE>

Contingencies

Environmental Matters - The Company is subject to various local and national
laws relating to protection of the environment and is in various stages of
investigation or remediation of potential, alleged, or acknowledged
contamination. At October 3, 1999, the accrued liability for environmental
remediation of $31.1 million represents management's best estimate of the
present value of the probable and reasonably estimable costs related to the
Company's known remediation obligations. It is expected that a significant
portion of the Company's environmental costs will be reimbursed to the Company.
As collection of those reimbursements is estimated to be probable, the Company
has recorded a receivable of $9.6 million, representing the present value of
those reimbursements at October 3, 1999. Such receivable primarily represents
the expected reimbursement of costs associated with the Aerospace operations
acquired from Hercules in the Aerospace acquisition, whereby the Company
generally assumed responsibility for environmental compliance at Aerospace
facilities. It is expected that much of the compliance and remediation costs
associated with these facilities will be reimbursable under U.S. Government
contracts, and that those environmental remediation costs not covered through
such contracts will be covered by Hercules under various indemnification
agreements, subject to the Company having appropriately notified Hercules of
issues identified prior to the expiration of the stipulated notification periods
(March 2000 or March 2005, depending on site ownership). The Company's accrual
for environmental remediation liabilities and the associated receivable for
reimbursement thereof, have been discounted to reflect the present value of the
expected future cash flows, using a discount rate, net of estimated inflation,
of approximately 4.5 percent.

The following is a summary of the Company's amounts recorded for environmental
remediation at October 3, 1999 (in thousands):

<TABLE>
<CAPTION>
                                                       Accrued                         Environmental Costs --
                                               Environmental Liability                Reimbursement Receivable
--------------------------------------------------------------------------------------------------------------------
<S>                                            <C>                                    <C>
Amounts (Payable)/Receivable                          $(40,421)                               $13,351
Unamortized Discount                                     9,351                                 (3,706)
--------------------------------------------------------------------------------------------------------------------
Present Value Amounts
(Payable)/Receivable                                  $(31,070)                               $ 9,645
--------------------------------------------------------------------------------------------------------------------
</TABLE>

At October 3, 1999, the estimated discounted range of reasonably possible costs
of environmental remediation is between $31 and $46 million. The Company does
not anticipate that resolution of the environmental contingencies in excess of
amounts accrued, net of recoveries, will materially affect future operating
results.

In future periods, new laws or regulations, advances in technologies, outcomes
of negotiations/litigations with regulatory authorities and other parties,
additional information about the ultimate remedy selected at new and existing
sites, the Company's share of the cost of such remedies, changes in the extent
and type of site utilization, the number of parties found liable at each site
and their ability to pay are all factors that could significantly change the
Company's estimates.  It is reasonably possible that management's current
estimates of liabilities for the above contingencies could change in the near
term, as more definitive information becomes available.

Legal Matters - As a U.S. Government contractor, the Company is subject to
defective pricing and cost accounting standards non-compliance claims by the
Government.  Additionally, the Company has substantial Government contracts and
subcontracts, the prices of which are subject
<PAGE>

to adjustment. The Company believes that resolution of such claims and price
adjustments made or to be made by the Government for open fiscal years (1994
through 1999) will not materially exceed the amount provided in the accompanying
balance sheets.

The Company is a defendant in a number of lawsuits that arise out of, and are
incidental to, the conduct of its business.  Such matters arise out of the
normal course of business and relate to product liability, intellectual
property, government regulations, including environmental issues, and other
issues.  Certain of the lawsuits and claims seek damages in very large amounts.
In these legal proceedings, no director, officer, or affiliate is a party or a
named defendant.

The Company has agreed to settle the civil action captioned United States v.
Alliant Techsystems Inc., which was filed in the U.S. District Court for the
District of Minnesota on March 10, 1997, alleging violations of the False Claims
Act, the Truth in Negotiations Act, and common law and equitable theories of
recovery, in connection with a contract for the AT4 shoulder-fired weapon.
Under the terms of the settlement, the Company will pay $1.3 million, including
interest, but will not admit to any liability for either fraud or violation of
the False Claims Act.

The patent infringement case brought against the Company by Cordant Technologies
(formerly Thiokol Corporation), which was filed in the U.S. District Court for
the District of Delaware on November 15, 1995, was dismissed by the U.S. Court
of Appeals for the Federal Circuit on September 29, 1999.  The dismissal
followed an agreement by the parties to dismiss the action with prejudice and to
resolve future rocket motor patent related disputes, if any, under a specified
alternative dispute resolution mechanism.

During fiscal 1998, the Company substantially completed the requirements of the
M117 Bomb reclamation contract.  The contract contained a priced option, having
approximate contract value less than $5 million, whereby the customer could
require the reclamation of additional quantities, given that such option be
exercised within the terms and conditions of the contract.  On August 4, 1997,
the customer informed the Company that it was exercising the option.  The
Company, based on advice from its counsel, maintained that the option exercise
was invalid and therefore did not perform on the option.  The Company's appeal
of the validity of the option to the United States Court of Appeals for the
Federal Circuit, and subsequent request for a hearing en banc related to the
option's validity, were both denied.  In late December 1997, the Company was
informed by the customer that the Company was being terminated for default on
the contract option.  Depending on the outcome of the termination for default
litigation, which involves allegations unrelated to the validity of the option,
management currently believes that the impact to the Company's future operating
earnings will not be material.

During fiscal 1998, the Company identified potential technical and safety issues
on its Explosive "D" contracts that, depending on the outcome of the continuing
evaluation of these risks and the potentially mitigating solutions, could add
cost growth to the program.  These potential technical and safety issues have
caused the Company to delay contract performance until the issues are resolved
to the satisfaction of the Company.  As a result, the Government customer has
provided the Company notification that it has been terminated for default on the
contracts. The Company is currently working closely with the customer to resolve
these matters.  Based on information known at this time, management believes
that the range of reasonably possible additional cost impact that could occur as
a result of the potential technical and safety issues on the Explosive "D"
program will not be material.  However, the ultimate outcome is dependent on the
extent to which the Company is able to mitigate these potential risks and
ultimately resolve the contractual performance issues on a mutually agreeable
basis.
<PAGE>

The Company does not believe that the above contract terminations will have a
material adverse impact on the Company's future results of operations, its
liquidity, or its financial position.

While the results of litigation cannot be predicted with certainty, management
believes, based upon the advice of counsel, that the actions seeking to recover
damages against the Company either are without merit, are covered by insurance
and reserves, do not support any grounds for cancellation of any contract, or
are not likely to materially affect the financial condition or results of
operations of the Company, although the resolution of any such matters during a
specific period could have a material adverse effect on the quarterly or annual
operating results for that period.

YEAR 2000
---------

Background - The Company utilizes a significant amount of information technology
("IT"), such as computer hardware and software, and operating systems ("IT
systems"), and non-IT systems, such as applications used in manufacturing,
product development, financial business systems and various administrative
functions ("non-IT systems"). To the extent that these IT systems and non-IT
systems contain source code that is unable to distinguish the upcoming calendar
year 2000 from the calendar year 1900 (the "Year 2000 Issue"), some level of
modification or replacement of such systems has been necessary. The Company has
established a Year 2000 Project Management Plan ("Year 2000 Plan") to identify
and address systems requiring such modification or replacement. The Year 2000
Plan also involves assessing the extent to which the Company's suppliers and
customers are addressing the Year 2000 Issue. Company management has identified
certain business systems, suppliers, and customers as critical to its ongoing
business needs ("business critical"). Failure of these business critical
systems, suppliers, or customers to become Year 2000 compliant in a timely
manner could have a material adverse impact to the Company.

State of Readiness - The Year 2000 Plan, which encompasses both IT and non-IT
systems, involves the following five-phase approach to the Year 2000 Issue, with
the indicated timetable for completion of business critical items:

<TABLE>
<CAPTION>
                                                                                     Timetable
  Phase                               Activity                                     for Completion              Status
  -----                               --------                                     --------------              ------
<S>        <C>                                                                  <C>                         <C>
    1      Ensure Company-wide awareness of the Year 2000 Issue..........       September 30, 1997          Completed

    2      Assess the impact of the Year 2000 Issue on the Company, and
           conduct inventories, analyze systems, prioritize modification
           or replacement, and develop contingency plans.................       January 31, 1998            Completed

    3      Begin modification, replacement or elimination of selected
           platforms, applications, databases and utilities, and modify
           interfaces, as appropriate....................................       August 31, 1998             Completed

    4      Complete work begun in Phase 3, and test, verify and validate
           all systems...................................................       September 30, 1999          Completed

    5      Implement modified or replaced platforms, applications,
           databases and utilities.......................................       September 30, 1999          Completed
</TABLE>

The Company is not aware of any problems reasonably likely to occur as a result
of third party failures to address the Year 2000 Issue. Extensive work was done
to ensure supplier issues were
<PAGE>

highlighted and prioritized. Suppliers were requested to provide a Year 2000
Issue status on their products, operating systems, suppliers and facilities and
visits were made to numerous key suppliers. Contact is occurring on a periodic
basis to secure additional information from suppliers on specific Year 2000
Issues and to ensure that no issues arise as the year progresses. Phase 4
activity encompasses supplier visits and phone interviews, final testing, and
preparation for complete system implementation. Critical actions and completion
dates have been identified to ensure that no business critical system will pass
its respective time-horizon-to-failure date.

The Company has utilized the services of several independent industry
consultants to assist it in assessing the reliability of its risk and cost
estimates. The Company's schedule for completing all internal Year 2000 actions,
other than manual actions required on January 1, 2000, has been substantially
completed.

Costs - The Company currently estimates that costs associated with modifying or
replacing systems affected by the Year 2000 Issue, including the amounts
expended in connection with the Company's ongoing, normal course-of-business
efforts to upgrade or replace business critical systems and software
applications as necessary, will be approximately $13 million (over three fiscal
years), compared to the Company's normal, annual IT operating budget of
approximately $30 million. These costs are being funded through cash flows from
operations. Costs associated with incremental personnel costs, consulting, and
hardware and software modifications are being expensed as incurred. The costs of
newly purchased hardware and software are being capitalized in accordance with
normal policy. The majority of estimated project costs were incurred during
fiscal year 1999 and early fiscal 2000, as approximately $12 million had been
expended through October 3, 1999. Approximately 40% of the total amount
ultimately expended is expected to be for systems modification, and the balance
for systems replacement. There are no IT projects which the Company has had to
delay due to the Year 2000 Issues that would have a material impact on the
Company's results of operations or financial position. The Company continues to
review its contractual obligations relative to the Year 2000 Issue, and
currently believes that there are no such obligations that would have material
impact to the Company's results of operations or its financial position.

Risks - The failure to resolve a material Year 2000 Issue could result in an
interruption in, or a failure of, certain normal business activities or
operations. Such failures could materially and adversely affect the Company's
results of operations, liquidity and financial position. Due to the general
uncertainty inherent in the Year 2000 Issue, resulting in part from the
uncertainty of the Year 2000 Issue readiness of third-party suppliers and
customers, the Company is unable to determine at this time whether the
consequences of failures resulting from the Year 2000 Issue will have a material
impact on the Company's results of operations, liquidity or financial position.
The Year 2000 Plan is expected to significantly reduce the Company's level of
uncertainty about the Year 2000 Issue and, in particular, about the Year 2000
Issue compliance and readiness of its business critical systems, suppliers, and
customers.

The most significant risk to the Company is the potential impact of
circumstances beyond its control, such as the failure of its business critical
suppliers and/or customers (particularly the U.S. Government) to resolve their
Year 2000 Issues, with a resulting inability of such suppliers to supply
critical goods and services to the Company, or of such customers to pay for
their purchases from the Company. A related significant risk to the Company is
that an inability of its business critical suppliers to resolve their Year 2000
Issues could result in the Company not being able to meet its contractual
obligations. Another significant risk to the Company could be the significant
loss of critical personnel on its Year 2000 Plan team.
<PAGE>

The Company currently believes that there is minimal risk that its Year 2000
Plan will not be successfully implemented in a timely manner. In the event that
the Company is ultimately unable to implement its Year 2000 Plan in a timely
manner, the Company believes that its contingency plans, described below,
adequately accommodate its business critical systems in a way that would not
result in a material adverse impact to the Company's results of operations, its
liquidity, or its financial position. However, there can be no assurance that
the Company and/or relevant third parties will successfully resolve all of their
Year 2000 Issues or that the Company's contingency plans will be entirely
successful in mitigating those issues. Any such failure could have a material
adverse effect on the Company's operations, liquidity, or its financial
position.

Contingency Plans - The Company has been informed that the U.S. Government has
resolved the Year 2000 Issues affecting its payment system as of March 1999,
which allows about 9 months for testing of the payment system. (The Company is
working with the Government payment office on a contingency plan that will
accommodate a manual billing and payment process in the event the Year 2000
Issues affecting the Government payment system are not successfully resolved in
a timely manner.) Contingency plans have been established for all business
critical Company systems identified as Year 2000 Issues, and contingency plans
have also been developed for certain critical suppliers, including
identification of back-up supply sources, and consideration of the need to
purchase additional critical supplies. Additionally, the Company has developed
plans addressing the operation of its facilities during and immediately after
the beginning of calendar 2000, to prepare for the possibility of infrastructure
failure (i.e., power system failure). All contingency plans will continue to be
reviewed during the third quarter of the fiscal year.

Cautionary Statement - The costs of the Year 2000 Plan and the timing in which
the Company believes it will implement the Year 2000 Plan are based on
management's best estimates, which were derived utilizing numerous assumptions
of future events, including the continued availability of certain resources and
other factors. However, there can be no assurance that these estimates will be
achieved, and actual results could differ materially from those anticipated.
Specific factors that might cause such material differences include, but are not
limited to, the success of the Company in identifying systems and programs
having Year 2000 Issues, the nature and amount of programming required to
upgrade or replace the affected programs, the availability and cost of personnel
trained in this area, and the extent to which the Company might be adversely
impacted by the failure of third parties (i.e., suppliers, customers, etc.) to
remediate their own Year 2000 issues. Failure by the Company and/or its
suppliers and customers (in particular, the U.S. Government, on which the
Company is materially dependent) to complete Year 2000 Issue compliance work in
a timely manner could have a material adverse effect on the Company's
operations, its liquidity, and/or its financial position.

INFLATION
---------

In the opinion of management, inflation has not had a significant impact upon
the results of the Company's operations. The selling prices under contracts, the
majority of which are long term, generally include estimated cost to be incurred
in future periods. These cost projections can generally be negotiated into new
buys under fixed-price government contracts, while actual cost increases are
recoverable on cost-type contracts.
<PAGE>

RISK FACTORS
------------

Certain of the statements made and information contained in this report,
excluding historical information, are "forward-looking statements" as defined in
the Private Securities Litigation Reform Act of 1995. These forward-looking
statements include those relating to fiscal 2000 sales, gross margin, operating
expenses, and capital expenditures. Also included are statements relating to the
repurchase of Company common stock, the funding of future growth, long-term debt
repayment, environmental remediation costs and reimbursement prospects, the
financial and operating impact of the resolution of environmental and litigation
contingencies in general, the M117 and Explosive "D" contract terminations for
default in particular, and the ultimate cost and impact of the Company's Year
2000 Issue compliance effort. Such forward-looking statements involve risks and
uncertainties that could cause actual results or outcomes to differ materially.
Some of these risks and uncertainties are set forth in connection with the
applicable statements. Additional risks and uncertainties include, but are not
limited to, changes in government spending and budgetary policies, governmental
laws and other rules and regulations surrounding various matters such as
environmental remediation, contract pricing, changing economic and political
conditions in the United States and in other countries, international trading
restrictions, outcome of union negotiations, customer product acceptance, the
Company's success in program pursuits, program performance, continued access to
technical and capital resources, supply and availability of raw materials and
components, timely compliance with the technical requirements of the Year 2000
Issue, including timely compliance by the Company's vendors and customers, and
merger and acquisition activity within the industry. All forecasts and
projections in this report are "forward-looking statements," and are based on
management's current expectations of the Company's near-term results, based on
current information available pertaining to the Company, including the
aforementioned risk factors. Actual results could differ materially.
<PAGE>

                         PART II -- OTHER INFORMATION

ITEM 2. LEGAL PROCEEDINGS

     The appeals in the patent infringement action captioned Thiokol Corporation
(now known as Cordant Technologies Inc.) vs. Alliant Techsystems Inc. and
Hercules Incorporated (which was filed in the U.S. District Court for the
District of Delaware on November 15, 1995, and decided in the Company's favor on
March 25, 1999) were dismissed by the U.S. Court of Appeals for the Federal
Circuit on September 29, 1999. The dismissal followed an agreement by the
parties to dismiss the appeals with prejudice and to resolve future rocket motor
patent related disputes, if any, under a specified alternative dispute
resolution mechanism.

     The Company has agreed to settle the civil action captioned United States
v. Alliant Techsystems Inc., which was filed in the U.S. District Court for the
District of Minnesota on March 10, 1997, alleging violations of the False Claims
Act, the Truth in Negotiations Act, and common law and equitable theories of
recovery, in connection with a contract for the AT4 shoulder-fired weapon.
Under the terms of the settlement, the Company will pay $1.3 million, including
interest, but will not admit to any liability for either fraud or violation of
the False Claims Act.

     Incorporated herein by reference is note 5 of Notes to Consolidated
Financial Statements included in Item 1 of Part I of this report.


ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

          (a)  On August 3, 1999, the registrant held its annual meeting of
               stockholders.

          (b)  At the above annual meeting, the following persons were elected
               directors to serve until the next annual meeting of stockholders:
               Peter A. Bukowick; Gilbert F. Decker, Thomas L. Gossage; Joel M.
               Greenblatt; Jonathan G. Guss; David E. Jeremiah; Gaynor N.
               Kelley; Joseph F. Mazzella; Paul David Miller; Daniel L. Nir; and
               Michael T. Smith.

          (c)  At the above annual meeting, the stockholders voted upon the
               following proposals: (1) election of directors; (2) ratification
               of the selection of Deloitte & Touche as independent accountants
               for the fiscal year ending March 31, 2000; and (3) a stockholder
               proposal. The votes cast on each of the above proposals were as
               follows:

<PAGE>

          Proposal Number 1:
          -----------------
                                                For          Withheld
                                                ---          --------

           Peter A. Bukowick........           8,883,915        65,248
           Gilbert F. Decker........           8,899,116        50,047
           Thomas L. Gossage........           8,871,966        77,197
           Joel M. Greenblatt.......           8,869,065        80,098
           Jonathan G. Guss.........           8,885,025        64,138
           David E. Jeremiah........           8,924,991        24,172
           Gaynor N. Kelley.........           8,867,041        82,122
           Joseph F. Mazzella.......           8,889,095        60,068
           Paul David Miller........           8,897,037        52,127
           Daniel L. Nir............           8,875,305        73,858
           Michael T. Smith.........           8,927,982        21,181

           Broker non-votes: None

          Proposal Number 2:
          -----------------

           For..................        8,907,695
           Against..............           26,328
           Abstain..............           15,140
           Broker non-votes.....             None


          Proposal Number 3:
          -----------------

           For..................          283,702
           Against..............        7,735,018
           Abstain..............          261,658
           Broker non-votes.....          668,785


ITEM 5. OTHER INFORMATION

     Attached to this report as Exhibit 99 is a list of the registrant's
directors and executive officers, as of the date of this report, which reflects
the following changes since August 12, 1999: new titles: Richard N. Jowett, Vice
President and Treasurer; Mark L. Mele, Vice President - Investor Relations and
Strategic Planning; and Scott S. Meyers, Vice President and Chief Financial
Officer.
<PAGE>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)    Exhibits.

            Exhibit No.                         Description of Exhibit
            -----------                         ----------------------

              10.1            Alliant Techsystems Inc. Management Deferred
                              Compensation Plan (incorporated by reference from
                              Exhibit 4 to the registrant's registration
                              statement on Form S-8 filed August 4, 1999
                              (registration no. 333-84445))

              10.2            Trust Agreement for Alliant Techsystems Inc.
                              Management Deferred Compensation Plan

              10.3            Separation Agreement and General Release between
                              the registrant and John L. Lotzer

              27              Financial Data Schedule

              99              Alliant Techsystems Inc. Directors and Executive
                              Officers


     (b)    Reports on Form 8-K.

            During the quarterly period ended October 3, 1999, the registrant
            filed no reports on Form 8-K.
<PAGE>

                                  SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                        ALLIANT TECHSYSTEMS INC.


Date: November 12, 1999            By:  /s/ Charles H. Gauck
                                 Name:  Charles H. Gauck
                                Title:  Vice President and Secretary
                                        (On behalf of the registrant)

Date: November 12, 1999            By:  /s/ Scott S. Meyers
                                 Name:  Scott S. Meyers
                                Title:  Vice President and Chief Financial
                                        Officer (Principal Financial Officer)
<PAGE>

                           ALLIANT TECHSYSTEMS INC.

                                   FORM 10-Q

                                 EXHIBIT INDEX

The following exhibits are filed herewith electronically or incorporated herein
by reference. The applicable Securities and Exchange Commission File Number is
1-10582.

<TABLE>
<CAPTION>
 Exhibit
  Number                        Description of Exhibit                           Method of Filing
 -------                        ----------------------                           ----------------
 <S>        <C>                                                            <C>
    10.1    Alliant Techsystems Inc. Management Deferred                   Incorporated by reference from
            Compensation Plan...........................................   Exhibit 4 to the registrant's
                                                                           registration statement on Form S-8
                                                                           filed August 4, 1999 (registration
                                                                           no. 333-84445)

    10.2    Trust Agreement for Alliant Techsystems Inc. Management
            Deferred Compensation Plan..................................   Filed herewith electronically

    10.3    Separation Agreement and General Release between the
            registrant and John L. Lotzer...............................   Filed herewith electronically

    27      Financial Data Schedule.....................................   Filed herewith electronically

    99      Alliant Techsystems Inc. Directors and Executive Officers...   Filed herewith electronically
</TABLE>
[{"type": "10-Q", "sequence": "1", "description": "FORM 10-Q", "secsgml_size_bytes": 83694}]
{"company-data": {"conformed-name": "ALLIANT TECHSYSTEMS INC", "cik": "0000866121", "assigned-sic": "3480", "irs-number": "411672694", "state-of-incorporation": "DE", "fiscal-year-end": "0331"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "001-10582", "film-number": "99758276"}, "business-address": {"street1": "600 2ND ST NE", "city": "HOPKINS", "state": "MN", "zip": "55343-8384", "phone": "6129316000"}, "mail-address": {"street1": "600 2ND ST NE", "city": "HOPKINS", "state": "MN", "zip": "55343-8384"}}
SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                   FORM 10-Q

/X/  Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934

     For the quarterly period ended October 3, 1999 or

/_/  Transition report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934

     For the transition period from            to

                        Commission file number 1-10582

                           ALLIANT TECHSYSTEMS INC.
            (Exact name of registrant as specified in its charter)

                  DELAWARE                                    41-1672694
        (State or other jurisdiction of                   (I.R.S. Employer
        incorporation or organization)                   Identification No.)

             600 SECOND STREET N.E.
              HOPKINS, MINNESOTA                              55343-8384
     (Address of principal executive office)                  (Zip Code)

                                (612) 931-6000
             (Registrant's telephone number, including area code)

                                NOT APPLICABLE
(Former name, former address and former fiscal year if changed from last report)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed under Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                                Yes /X/  No /_/

     As of October 31, 1999, the number of shares of the registrant's common
stock, par value $.01 per share, outstanding was 9,978,515 (excluding 3,885,098
treasury shares).
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
                   Consolidated Income Statements (Unaudited)
(In thousands except                                           QUARTERS ENDED                     SIX MONTHS ENDED
   per share data)                                        ----------------------------       ----------------------------
                                                          October 3       September 27       October 3       September 27
                                                            1999              1998             1999              1998
                                                          ----------      ------------       ---------       ------------
Sales                                                     $ 252,789         $ 258,998         $525,510         $ 515,319
Cost of sales                                               200,708           213,564          425,369           424,654
                                                           --------         ---------         --------         ---------
Gross margin                                                 52,081            45,434          100,141            90,665
Operating expenses:
    Research and development                                  2,918             2,137            4,805             3,732
    Selling                                                   5,088             5,734           10,569            14,486
    General and administrative                               14,307            13,162           26,740            24,080
                                                           --------         ---------         --------         ---------
    Total operating expenses                                 22,313            21,033           42,114            42,298
                                                           --------         ---------         --------         ---------
Income from operations                                       29,768            24,401           58,027            48,367
    Miscellaneous income                                         17                77               18                41
                                                           --------         ---------         --------         ---------
Income before interest and income taxes                      29,785            24,478           58,045            48,408
    Interest expense                                         (8,307)           (5,192)         (17,462)          (10,876)
    Interest income                                             140               323              247               667
                                                           --------         ---------         --------         ---------
Income from continuing operations before
    income taxes                                             21,618            19,609           40,830            38,199
Income tax provision                                          5,621             2,941           10,232             5,730
                                                           --------         ---------         --------         ---------
Income from continuing operations                            15,997            16,668           30,598            32,469
Gain on disposal of discontinued
    operations, net of income taxes                           9,450                 -            9,450                 -
                                                           --------         ---------         --------         ---------
Income before extraordinary loss                             25,447            16,668           40,048            32,469
Extraordinary loss on early extinguishment
    of debt, net of income taxes                                  -           (14,627)               -           (14,627)
                                                           --------         ---------         --------         ---------
Net income                                                 $ 25,447         $   2,041         $ 40,048         $  17,842
                                                           ========         =========         ========         =========

Basic earnings per common share:
    Income from continuing operations                      $   1.56         $    1.33          $  2.99         $    2.58
    Discontinued operations                                     .92                 -              .92                 -
    Extraordinary loss                                            -             (1.17)               -             (1.16)
                                                           --------         ---------         --------         ---------
Basic earnings per common share                            $   2.48         $     .16         $   3.91         $    1.42
                                                           ========         =========         ========         =========
Diluted earnings per common share:
    Income from continuing operations                      $   1.53         $    1.30         $   2.92         $    2.51
    Discontinued operations                                     .90                 -              .90                 -
    Extraordinary loss                                            -             (1.14)               -             (1.13)
                                                           --------         ---------         --------         ---------
Diluted earnings per common share                          $   2.43         $     .16         $   3.82         $    1.38
                                                           ========         =========         ========         =========

Average number of common shares
 (thousands)                                                 10,240            12,502           10,233            12,607
                                                           ========         =========         ========         =========
Average number of common and
 dilutive shares (thousands)                                 10,457            12,813           10,471            12,918
                                                           ========         =========         ========         =========
See Notes to Consolidated Financial Statements
Consolidated Balance Sheets (Unaudited)
----------------------     --------------------
(In thousands except share data)                                     October 3, 1999           March 31, 1999
                                                                 ----------------------     --------------------
Assets
Current assets:
    Cash and cash equivalents                                    $        28,871            $          21,078
    Receivables                                                          225,217                      233,499
    Net inventory                                                         50,508                       44,030
    Deferred income tax asset                                             41,912                       41,912
    Other current assets                                                   5,520                        2,589
                                                                 ---------------            -----------------
                  Total current assets                                   352,028                      343,108
Net property, plant, and equipment                                       332,562                      335,751
Goodwill                                                                 125,092                      127,799
Prepaid and intangible pension assets                                     77,738                       77,552
Other assets and deferred charges                                          8,995                       10,108
                                                                 ---------------            -----------------
                  Total assets                                   $       896,415            $         894,318
                                                                 ===============            =================
Liabilities and Stockholders' Equity
Current liabilities:
    Current portion of long-term debt                            $        51,375            $          36,500
    Line of credit borrowings                                             17,000                            -
    Accounts payable                                                      61,355                       93,991
    Contract advances and allowances                                      35,116                       49,456
    Accrued compensation                                                  24,841                       32,433
    Accrued income taxes                                                  18,546                       13,075
    Other accrued liabilities                                             56,751                       61,033
                                                                 ---------------            -----------------
                  Total current liabilities                              264,984                      286,488
Long-term debt                                                           305,118                      305,993
Post-retirement and post-employment benefits liability                   124,006                      128,279
Other long-term liabilities                                               54,999                       54,835
                                                                 ---------------            -----------------
                  Total liabilities                              $       749,107            $         775,595
Contingencies
Common stock - $.01 par value
    Authorized - 20,000,000 shares
    Issued and outstanding 10,153,939 shares at
    October 3, 1999 and 10,284,530 at March 31, 1999             $           139            $             139
Additional paid-in-capital                                               237,247                      238,513
Retained earnings                                                        163,405                      123,357
Unearned compensation                                                     (3,418)                      (3,289)
Pension liability adjustment                                              (2,940)                      (2,940)
Common stock in treasury, at cost (3,704,674 shares held at
    October 3, 1999 and 3,579,083 at March 31, 1999)                    (247,125)                    (237,057)
                                                                 ---------------            -----------------
                  Total stockholders' equity                     $       147,308            $         118,723
                                                                 ---------------            -----------------
                  Total liabilities and stockholders' equity     $       896,415            $         894,318
                                                                 ===============            =================
See Notes to Consolidated Financial Statements
Consolidated Statements of Cash Flows (Unaudited)
(In thousands)                                                                       SIX MONTHS ENDED
                                                                       -------------------    --------------------
                                                                         October 3, 1999       September 27, 1998
                                                                       -------------------    --------------------
Operating activities
Net income                                                               $       40,048         $      17,842
Adjustments to net income to arrive at cash provided by
     (used for) operations:
            Depreciation                                                         19,917                19,424
            Amortization of intangible assets and unearned
                  compensation                                                    4,587                 2,954
            Extraordinary loss on early extinguishment
                  of debt                                                             -                17,208
            Loss on disposal of property                                            499                   367
            Changes in assets and liabilities:
                  Receivables                                                     8,282                 2,052
                  Inventory                                                      (6,478)                2,320
                  Accounts payable                                              (32,636)              (12,588)
                  Contract advances and allowances                              (14,341)              (12,927)
                  Accrued compensation                                           (7,592)               (8,788)
                  Accrued income taxes                                            5,471                 1,837
                  Accrued restructuring and facility consolidation                    -                (2,295)
                  Accrued environmental liability                                   (42)                 (274)
                  Pension and post-retirement benefits                           (4,067)               (4,273)
                  Other assets and liabilities                                   (7,027)              (23,475)
                                                                         --------------         -------------
Cash provided by (used for) operations                                            6,621                  (616)
                                                                         --------------         -------------
Investing activities
Capital expenditures                                                            (17,219)              (13,688)
Acquisition of business                                                               -                (1,100)
Proceeds from disposition of property, plant, and equipment                         (59)                  260
                                                                         --------------         -------------
Cash used for investing activities                                              (17,278)              (14,528)
                                                                         --------------         -------------
Financing activities
Net borrowings on line of credit                                                 17,000               159,000
Payments made on bank debt                                                      (15,000)               (8,834)
Payments made to extinguish high yield debt                                           -              (152,997)
Proceeds from issuance of long-term debt                                         29,000                     -
Net purchase of treasury shares                                                 (13,868)              (29,213)
Proceeds from exercised stock options                                             1,318                 1,626
                                                                        ---------------         -------------
Cash provided by (used for) financing activities                                 18,450               (30,418)
                                                                         --------------         -------------
Increase (decrease) in cash and cash equivalents                                  7,793               (45,562)
Cash and cash equivalents - beginning of period                                  21,078                68,960
                                                                         --------------         -------------
Cash and cash equivalents - end of period                                $       28,871         $      23,398
                                                                         ==============         =============
See Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements (Unaudited)

1.   During the six-months ended October 3, 1999, the Company made principal
     payments on its bank term debt of $15.0 million. At October 3, 1999, the
     Company had borrowings of $17.0 million against its $250 million bank
     revolving credit facility. Additionally, the Company had outstanding
     letters of credit of $41.0 million, which further reduced amounts available
     on the revolving facility to $192.0 million at October 3, 1999.

     The remaining scheduled minimum loan payments on outstanding long-term debt
     are as follows: fiscal 2000, $23.6 million; fiscal 2001, $55.7 million;
     fiscal 2002 through 2004, $69.2 million, per year; fiscal 2005, $69.7
     million.

2.   The major categories of current and long-term accrued liabilities are as
     follows (in thousands):
Period Ending
                                                 ------------------------------------------------------------
                                                       October 3, 1999                March 31, 1999
     ---------------------------------------------------------------------------------------------------------
Employee benefits and insurance                    $  21,994                      $  30,231
      Legal accruals                                        10,391                         10,045
      Other accruals                                        24,366                         20,757
     ---------------------------------------------------------------------------------------------------------
      Other accrued liabilities-current                  $  56,751                      $  61,033
     ---------------------------------------------------------------------------------------------------------
      Environmental remediation liability                $  18,002                      $  18,044
      Deferred tax liability                                25,870                         25,870
      Supplemental employee retirement plan                 11,159                         10,953
      Other                                                    (32)                           (32)
     ---------------------------------------------------------------------------------------------------------
      Other long-term liabilities                        $  54,999                      $  54,835
     ---------------------------------------------------------------------------------------------------------
The decrease in employee benefits and insurance since March 31, 1999 is
     reflective of payments made during the six-month period ended October 3,
     1999, for previously accrued employee payroll taxes.

3.   Tax payments of $4.7 and $1.3 million were paid for alternative minimum
     taxes during the six-month periods ended October 3, 1999, and September 27,
     1998, respectively.

     The Company's provision for income taxes included both federal and state
     income taxes. Income tax expense on continuing operations was $5.6 and
     $10.2 million for the three and six-month periods ended October 3, 1999,
     compared to $2.9 and $5.7 million for the comparable prior periods. Income
     tax provisions for interim periods are based on estimated effective annual
     income tax rates. The estimated effective tax rate for the current fiscal
     year ending March 31, 2000 is reflective of the Company's best estimate of
     the fiscal 2000 tax effects associated with its business strategies, as
     well as the resolution of tax matters during the year.

4.   On December 15, 1998, the Company completed the repurchase of 1.7 million
     shares of its common stock at a price of $77 per share, or approximately
     $130 million in total. The repurchase occurred via the terms and conditions
     of a modified "Dutch auction" tender offer (Dutch auction) and was financed
     under the Company's bank credit facilities.

     In connection with the completion of the Dutch auction, the Company's Board
     of Directors authorized the Company to repurchase up to an additional 1.1
     million shares of its common stock. As of October 3, 1999, repurchases of
     638 thousand shares have been made under the program, aggregating
     approximately $48.6 million. On October 26, 1999 the Company's Board of
     Directors authorized the Company to make additional share repurchases (over
     and above the 1.1 previously authorized) of up to 1.0 million shares of its
     common stock. Any repurchases made under these authorizations would be
     subject to market conditions and
the Company's compliance with its debt covenants. As of October 3, 1999, the
  Company's debt covenants would allow the Company to make additional
  repurchases of approximately $90 million of the Company's stock. There can be
  no assurance that the Company will purchase all or any portion of the shares,
  or as to the timing or terms thereof.

5. Contingencies:

  Environmental Matters - The Company is subject to various local and national
  laws relating to protection of the environment and is in various stages of
  investigation or remediation of potential, alleged, or acknowledged
  contamination. At October 3, 1999, the accrued liability for environmental
  remediation of $31.1 million represents management's best estimate of the
  present value of the probable and reasonably estimable costs related to the
  Company's known remediation obligations.  It is expected that a significant
  portion of the Company's environmental costs will be reimbursed to the
  Company.  As collection of those reimbursements is estimated to be probable,
  the Company has recorded a receivable of $9.6 million, representing the
  present value of those reimbursements at October 3, 1999.  Such receivable
  primarily represents the expected reimbursement of costs associated with the
  Aerospace operations acquired from Hercules in the Aerospace acquisition,
  whereby the Company generally assumed responsibility for environmental
  compliance at Aerospace facilities.  It is expected that much of the
  compliance and remediation costs associated with these facilities will be
  reimbursable under U.S. Government contracts, and that those environmental
  remediation costs not covered through such contracts will be covered by
  Hercules under various indemnification agreements, subject to the Company
  having appropriately notified Hercules of issues identified prior to the
  expiration of the stipulated notification periods (March 2000 or March 2005,
  depending on site ownership).  The Company's accrual for environmental
  remediation liabilities and the associated receivable for reimbursement
  thereof, have been discounted to reflect the present value of the expected
  future cash flows, using a discount rate, net of estimated inflation, of
  approximately 4.5 percent.

  The following is a summary of the Company's amounts recorded for environmental
  remediation at October 3, 1999 (in thousands):
Accrued                     Environmental Costs --
                                           Environmental Liability            Reimbursement Receivable
-----------------------------------------------------------------------------------------------------------
Amounts (Payable)/Receivable                      $(40,421)                             $13,351
Unamortized Discount                                 9,351                               (3,706)
-----------------------------------------------------------------------------------------------------------
Present Value Amounts
 (Payable)/Receivable                             $(31,070)                             $ 9,645
-----------------------------------------------------------------------------------------------------------
At October 3, 1999, the estimated discounted range of reasonably possible
  costs of environmental remediation is between $31 and $46 million. The Company
  does not anticipate that resolution of the environmental contingencies in
  excess of amounts accrued, net of recoveries, will materially affect future
  operating results.

  In future periods, new laws or regulations, advances in technologies, outcomes
  of negotiations/litigations with regulatory authorities and other parties,
  additional information about the ultimate remedy selected at new and existing
  sites, the Company's share of the cost of such remedies, changes in the extent
  and type of site utilization, the number of parties found liable at each site
  and their ability to pay are all factors that could significantly change the
  Company's estimates.  It is reasonably possible that management's current
  estimates of liabilities for the above contingencies could change in the near
  term, as more definitive information becomes available.

  Legal Matters - As a U.S. Government contractor, the Company is subject to
  defective pricing and cost accounting standards non-compliance claims by the
  Government.  Additionally, the Company has
substantial Government contracts and subcontracts, the prices of which are
  subject to adjustment. The Company believes that resolution of such claims and
  price adjustments made or to be made by the Government for open fiscal years
  (1994 through 1999) will not materially exceed the amount provided in the
  accompanying balance sheets.

  The Company is a defendant in a number of lawsuits that arise out of, and are
  incidental to, the conduct of its business.  Such matters arise out of the
  normal course of business and relate to product liability, intellectual
  property, government regulations, including environmental issues, and other
  issues.  Certain of the lawsuits and claims seek damages in very large
  amounts.  In these legal proceedings, no director, officer, or affiliate is a
  party or a named defendant.

  The Company has agreed to settle the civil action captioned United States v.
  Alliant Techsystems Inc., which was filed in the U.S. District Court for the
  District of Minnesota on March 10, 1997, alleging violations of the False
  Claims Act, the Truth in Negotiations Act, and common law and equitable
  theories of recovery, in connection with a contract for the AT4 shoulder-fired
  weapon. Under the terms of the settlement, the Company will pay $1.3 million,
  including interest, but will not admit to any liability for either fraud or
  violation of the False Claims Act.

  The patent infringement case brought against the Company by Cordant
  Technologies (formerly Thiokol Corporation), which was filed in the U.S.
  District Court for the District of Delaware on November 15, 1995, was
  dismissed by the U.S. Court of Appeals for the Federal Circuit on September
  29, 1999. The dismissal followed an agreement by the parties to dismiss the
  action with prejudice and to resolve future rocket motor patent related
  disputes, if any, under a specified alternative dispute resolution mechanism.

  During fiscal 1998, the Company substantially completed the requirements of
  the M117 Bomb reclamation contract. The contract contained a priced option,
  having approximate contract value less than $5 million, whereby the customer
  could require the reclamation of additional quantities, given that such option
  be exercised within the terms and conditions of the contract. On August 4,
  1997, the customer informed the Company that it was exercising the option. The
  Company, based on advice from its counsel, maintained that the option exercise
  was invalid and therefore did not perform on the option. The Company's appeal
  of the validity of the option to the United States Court of Appeals for the
  Federal Circuit, and subsequent request for a hearing en banc related to the
  option's validity, were both denied. In late December 1997, the Company was
  informed by the customer that the Company was being terminated for default on
  the contract option. Depending on the outcome of the termination for default
  litigation, which involves allegations unrelated to the validity of the
  option, management currently believes that the impact to the Company's future
  operating earnings will not be material.

  During fiscal 1998, the Company identified potential technical and safety
  issues on its Explosive "D" contracts that, depending on the outcome of the
  continuing evaluation of these risks and the potentially mitigating solutions,
  could add cost growth to the program. These potential technical and safety
  issues have caused the Company to delay contract performance until the issues
  are resolved to the satisfaction of the Company. As a result, the Government
  customer has provided the Company notification that it has been terminated for
  default on the contracts. The Company is currently working closely with the
  customer to resolve these matters. Based on information known at this time,
  management believes that the range of reasonably possible additional cost
  impact that could occur as a result of the potential technical and safety
  issues on the Explosive "D" program will not be material. However, the
  ultimate outcome is dependent on the extent to which the Company is able to
  mitigate these potential risks and ultimately resolve the contractual
  performance issues on a mutually agreeable basis.

  The Company does not believe that the above contract terminations will have a
  material adverse impact on the Company's future results of operations, its
  liquidity, or its financial position.
While the results of litigation cannot be predicted with certainty,
     management believes, based upon the advice of counsel, that the actions
     seeking to recover damages against the Company either are without merit,
     are covered by insurance and reserves, do not support any grounds for
     cancellation of any contract, or are not likely to materially affect the
     financial condition or results of operations of the Company, although the
     resolution of any such matters during a specific period could have a
     material adverse effect on the quarterly or annual operating results for
     that period.

6.   Interest paid during the six-month periods ended October 3, 1999, and
     September 27, 1998, totaled $17.0 million and $11.2 million, respectively.
     Interest charges under the Company's revolving credit facility are
     primarily at the London Inter Bank Offering Rate (LIBOR), plus 2.00 percent
     (which totaled 7.5 percent at October 3, 1999), and will be subject to
     change in the future, as changes occur in market conditions and in the
     Company's financial performance and leverage ratios.

7.   Consistent with the Statement of Financial Accounting Standards (SFAS) No.
     128, "Earnings Per Share", the Company presents basic earnings per share
     (EPS) and diluted EPS, instead of the primary and fully diluted EPS that
     were previously required. Basic EPS is computed based upon the weighted
     average number of common shares outstanding for each period presented.
     Diluted EPS is computed based on the weighted average number of common
     shares and common equivalent shares. Common equivalent shares represent the
     effect of redeemable common stock and stock options outstanding during each
     period presented, which, if exercised, would have a dilutive effect on EPS.
     In computing EPS for the three and six month periods ended October 3, 1999
     and September 27, 1998, net income as reported for each respective period,
     is divided by:
Three-Months Ended                  Six-Months Ended
                                                 ---------------------------------------------------------------------
                                                 Oct. 3, 1999     Sept. 27, 1998     Oct. 3, 1999    Sept. 27, 1998
      ----------------------------------------------------------------------------------------------------------------
Basic EPS:
      - Average Shares Outstanding                   10,240            12,502           10,233           12,607
      ================================================================================================================

      Diluted EPS:
      - Average Shares Outstanding                   10,240            12,502           10,233           12,607
      - Dilutive effect of options and                  217               311              238              311
         redeemable common shares
      ----------------------------------------------------------------------------------------------------------------

      Diluted EPS Shares Outstanding                 10,457            12,813           10,471           12,918
      ================================================================================================================
Due to the option price being greater than the average market price of the
     common shares, there were 274,600 and 273,100 stock options, respectively,
     that were not included in the computation of diluted EPS for the three and
     six-month periods ended October 3, 1999, and 500 and 138,850 stock options,
     respectively, that were not included in the computation of diluted EPS for
     the comparable periods of the prior year. In addition, for the three and
     six-month periods ended September 27, 1998, 271,000 common shares, which
     were subject to the put/call agreement with Hercules were not included in
     the calculation of diluted EPS, as inclusion of those redeemable shares
     would have been anti-dilutive.

8.   During the quarter ended October 3, 1999, the Company recognized a $9.5
     million gain on disposal of discontinued operations (net of $.1 million in
     taxes), due to resolution of an insurance settlement related to the
     Company's former demilitarization operations in Ukraine.

9.   The figures set forth in this quarterly report are unaudited but, in the
     opinion of the Company, include all adjustments necessary for a fair
     presentation of the results of operations for the three and six-month
     periods ended October 3, 1999, and September 27, 1998. The Company's
     accounting policies are described in the notes to financial statements in
     its fiscal 1999 Annual Report on Form 10-K.
10.  In March 1998, the AICPA issued Statement of Position (SOP) 98-1
     "Accounting for the Costs of Computer Software Developed or Obtained for
     Internal Use." Effective April 1, 1999, the Company adopted this SOP. It
     did not have a material impact to the Company's results of operations or
     its financial position for the three or six-month periods ended October 3,
     1999.

11.  Certain reclassifications have been made to the fiscal 1999 financial
     statements, as previously reported, to conform to current classification.
     These reclassifications did not affect the net income from operations as
     previously reported.
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

RESULTS OF OPERATIONS
---------------------

Sales

Sales for the quarter ended October 3, 1999 totaled $252.8 million, a decrease
of $6.2 million, or 2.4 percent, from $259.0 million for the comparable quarter
in the prior year. Aerospace segment sales were $102.8 million, compared to
$103.0 million for the comparable quarter in the prior year. Conventional
Munitions segment sales were $95.6 million, a decrease of $21.4 million, or 18.3
percent, from $117.0 million for the comparable quarter in the prior year. The
decrease was primarily attributable to decreased tank ammunition and propellant
sales due to timing of contractual production requirements and replacement of a
current production program with the next-generation-round development program.
Defense Systems segment sales were $56.4 million, an increase of $16.2 million,
or 40.3 percent, from $40.2 million for the comparable quarter in the prior
year. The increase was driven primarily by an increase in volume on anti-tank
munitions programs and defense electronic sales on the AAR47 contract, which is
a missile warning system.

Sales for the six-month period ended October 3, 1999 totaled $525.5 million, an
increase of $10.2 million, or 2.0 percent, from $515.3 million for the
comparable period of the prior year. Aerospace segment sales for the six-month
period ended October 3, 1999 were $221.2 million, an increase of $27.0 million
or 13.9 percent, compared to $194.2 million for the comparable period of the
prior year. The increase is attributable to higher space propulsion sales,
primarily driven by increased sales on the Titan and Delta propulsion programs.
Conventional Munitions segment sales were $202.1 million, a decrease of $36.2
million, or 15.2 percent from $238.3 million for the comparable quarter in the
prior year. The decrease was primarily attributable to decreased tank ammunition
and propellant sales due to timing of contractual production requirements and
replacement of a current production program with the next-generation-round
development program. Defense Systems segment sales were $106.6 million, an
increase of $21.3 million, or 25.0 percent, compared to $85.3 million for the
comparable period of the prior year. The increase was primarily driven by an
increase in anti-tank munitions volume.

Company sales for fiscal 2000 are expected to be approximately $1.1 billion.

Gross Margin

The Company's gross margin in the quarter ended October 3, 1999, was $52.1
million or 20.6 percent of sales, compared to $45.4 million, or 17.5 percent of
sales for the comparable quarter of the prior year. Margin improvements in the
current year are due to improved cost performance on certain Defense Systems
fuzing and munitions programs, and also due to increased margins on tank
ammunition programs at Conventional Munitions. The current year quarter included
approximately $3 million of margin arising out of the resolution of cost
reimbursement matters, on now complete fuzing contracts. These increases were
offset by lower gross margins in the Aerospace segment, due to timing of flight
incentives and lower contract revenues as new programs ramp up. Gross margin for
the six-month period ended October 3, 1999 totaled $100.1 million, or 19.1
percent of sales, compared to $90.7 million, or 17.6 percent of sales for the
comparable period of the prior year. The increase is primarily attributable to
improved margins on certain Defense Systems fuzing and munitions programs.
Fiscal 2000 gross margin, as a percent of sales, is expected to be approximately
19.0 percent.

Operating Expenses

The Company's operating expenses for the quarter ended October 3, 1999, totaled
$22.3 million, or 8.8 percent of sales, compared to $21.0 million, or 8.1
percent of sales for the comparable quarter of the prior year. Operating
expenses for the six-month period ended October 3, 1999 totalled $42.1 million,
or 8.0 percent of sales, compared to $42.3 million, or 8.2 percent of sales for
the comparable period of the prior year. The overall decrease was driven by
reduced selling costs due to the timing of program pursuits in the prior year
period, which included significant costs in the Defense Systems segment as well
as in the Conventional Munitions segment, which spent approximately $1.7 million
in pursuit of the E3 tank ammunition program. These decreases were partially
offset by one-time legal and consulting expenditures made during the current
year period on certain internal company initiatives.

Fiscal 2000 operating expenses, stated as a percent of sales, are expected to be
approximately 8.0 - 8.5 percent.

Interest Expense

The Company's net interest expense for the quarter ended October 3, 1999, was
$8.2 million, an increase of $3.3 million, compared to $4.9 million for the
comparable quarter in the prior year. Net interest expense for the six-month
period ended October 3, 1999 was $17.2 million, an increase of $7.0 million,
compared to $10.2 million for the comparable period of the prior year. The
increase in the current year expense was driven by higher average outstanding
borrowings in the current periods, which was primarily driven by repurchases of
the company's stock in fiscal 1999. See discussion of the Company's share
repurchases below.

Income before Income Taxes

The Company's income before income taxes (earnings before taxes, or "EBT") for
the quarter ended October 3, 1999 was $21.6 million, compared to $19.6 million
for the comparable quarter of the prior year. Aerospace segment EBT for the
quarter ended October 3, 1999, was $7.8 million, a decrease of $5.4 million,
compared to $13.2 million for the comparable quarter of the prior year. The
decrease was driven by the timing of flight incentives and lower overall
contract margin rates as new programs ramp up. Conventional Munitions segment
EBT for the quarter ended October 3, 1999, was $4.1 million, compared to $4.4
million for the comparable quarter of the prior year. The decrease is primarily
reflective of reduced tank ammunition and propellant sales due to timing of
contractual requirements and replacement of a current production program with
the next-generation-round development program. Defense Systems segment EBT for
the quarter ended October 3, 1999 was $4.2 million, compared to $(2.9) million
for the comparable quarter of the prior year. The increase in the current year
quarter reflects improved program performance on certain fuzing and munitions
programs and an increase of approximately $3 million arising out of resolution
of cost-reimbursement matters on now complete fuzing contracts.

EBT for the six-month period ended October 3, 1999 totaled $40.8 million, an
increase of $2.6 million, compared to $38.2 million for the comparable period of
the prior year. Aerospace segment EBT for the six-month period ended October 3,
1999, was $27.4 million, compared to $28.2 million for the comparable period of
the prior year. Conventional Munitions segment EBT for the six-month period
ended October 3, 1999 was $5.3 million, a decrease of $1.3 million,
compared to $6.6 million for the comparable period of the prior year. The
decrease is primarily due to current year cost growth on ordnance reclamation
projects, and reduced tank ammunition and propellant sales. Defense Systems EBT
for the six-month period ended October 3, 1999 was $1.0 million, an increase of
$7.8 million, compared to $(6.8) million for the comparable period of the prior
year. The current year increase is driven by improved program performance on
certain fuzing and munitions programs and an increase of approximately $3
million arising out of the resolution of cost reimbursement matters on now
complete fuzing contracts, offset by a non-recurring charge of approximately
$4.0 million to re-value certain long-term assets (primarily fixed assets) to
the estimated net realizable value, as the segment's management has elected to
pursue disposal by sale of certain assets no longer deemed critical to the
business.

Income Taxes

Income tax expense was $5.6 and $10.2 million for the three and six-month
periods ended October 3, 1999, compared to $2.9 and $5.7 million for the
comparable periods of the prior year. Income tax provisions for interim periods
are based on estimated effective annual income tax rates. The estimated
effective tax rate for the current fiscal year ending March 31, 2000, is
reflective of the Company's best estimate of the fiscal 2000 tax effects
associated with its business strategies, as well as the resolution of tax
matters during the year.

Discontinued Operations

During the quarter ended October 3, 1999, the Company recognized a $9.5 million
gain on disposal of discontinued operations (net of $.1 million in taxes) due to
the resolution of an insurance settlement related to the Company's former
demilitarization operations in Ukraine.

Net Income

Net income reported for the quarter ended October 3, 1999, was $25.4 million, an
increase of $23.4 million, when compared with net income of $2.0 million for the
comparable quarter of the prior year. The overall increase is primarily the
result of the absence of an extraordinary loss incurred in the prior year due to
the early extinguishment of debt, current year increased gross margins in the
Defense Systems segment and an insurance settlement on discontinued operations,
offset by current year increases in interest and income tax expenses. Net income
for the six-month period ended October 3, 1999 was $40.0 million, an increase of
$22.2 million, compared to net income of $17.8 million for the comparable period
of the prior year. The increase was primarily driven by the absence of an
extraordinary loss incurred in the prior year due to the early extinguishment of
debt, current year increased gross margins in the Defense Systems segment, and
an insurance settlement on discontinued operations, partially offset by current
year increased interest and income tax expense.

LIQUIDITY, CAPITAL RESOURCES, AND FINANCIAL CONDITION
-----------------------------------------------------

Cash provided by operations totaled $6.6 million for the six-months ended
October 3, 1999, an increase in cash of $7.2 million, when compared with cash
used by operations of $0.6 million in the comparable period of the prior year.
The increased level of cash provided from operations during the current year
period was driven by increased net income due primarily to the resolution of an
insurance settlement related to the company's former demilitarization operations
in Ukraine. In addition, cash improved due to the absence of approximately $13
million in payments for legal settlements which occurred in the prior year
period including payments for previously settled qui-
tam lawsuits. These increases were partially offset by an increase in current
year cash used for payables payments.

Cash used by investing activities for the six-months ended October 3, 1999, was
$17.3 million, a $2.8 million increase in cash used, compared to cash used by
investing activities of $14.5 million in the comparable period of the prior
year. This increase primarily represents increased capital expenditures in the
current year in the Aerospace segment to support composites structure business
growth associated with the Delta family of rockets. Fiscal 2000 capital
expenditures are currently expected to approximate fiscal 1999 expenditures.

Cash provided by financing activities for the six-months ended October 3, 1999,
was $18.5 million, a $48.9 million increase in cash provided compared to cash
used by financing activities of $30.4 million in the comparable period of the
prior year. This current year increase is due primarily to prior year borrowings
associated with the Company's stock repurchase.

As of October 3, 1999, the Company had borrowings of $17.0 million against its
$250 million bank revolving credit facility. Additionally, the Company had
outstanding letters of credit of $41.0 million, which further reduced amounts
available on the revolving credit facility to $192.0 million at October 3, 1999.
During the six-months ended October 3, 1999, the Company made additional
borrowings under its bank term debt facilities of $29.0 million. These
borrowings were made to finance, on a long-term basis, a portion of the
Company's stock repurchases which had been made primarily in late fiscal 1999.
Scheduled minimum loan payments on the Company's outstanding long-term debt is
as follows: fiscal 2000, $23.6 million; fiscal 2001, $55.7 million; fiscal 2002
through 2004, $69.2 million, per year; fiscal 2005, $69.7 million. The Company's
total debt (line of credit borrowings, current portion of long-term debt, and
long-term debt) as a percentage of total capitalization, was 72 percent on
October 3, 1999 and 74 percent on March 31, 1999.

On December 15, 1998, the Company completed the repurchase of 1.7 million shares
of its common stock at a price of $77 per share, or approximately $130 million
in total. The repurchase occurred via the terms and conditions of a modified
"Dutch auction" tender offer (Dutch auction) and was financed under the
Company's bank credit facilities.

In connection with the completion of the Dutch auction, the Company's Board of
Directors authorized the Company to repurchase up to an additional 1.1 million
shares of its common stock. As of October 3, 1999, repurchases of approximately
638 thousand shares have been made under the program, aggregating approximately
$48.6 million. On October 26, 1999, the company's Board of Directors authorized
the Company to make additional share repurchases (over and above the 1.1
previously authorized) of up to 1.0 million shares of its common stock. Any
repurchases made under these plans would be subject to market conditions and the
Company's compliance with its debt covenants. As of October 3, 1999, the
Company's debt covenants would allow the Company to make additional repurchases
of approximately $90 million of the Company's stock. There can be no assurance
that the Company will purchase all or any portion of the shares, or as to the
timing or terms thereof.

Based on the financial condition of the Company at October 3, 1999, the Company
believes that future operating cash flows, combined with the availability of
funding, if needed, under its bank revolving credit facilities, will be adequate
to fund future growth of the Company as well as service its long-term
obligations.
Contingencies

Environmental Matters - The Company is subject to various local and national
laws relating to protection of the environment and is in various stages of
investigation or remediation of potential, alleged, or acknowledged
contamination. At October 3, 1999, the accrued liability for environmental
remediation of $31.1 million represents management's best estimate of the
present value of the probable and reasonably estimable costs related to the
Company's known remediation obligations. It is expected that a significant
portion of the Company's environmental costs will be reimbursed to the Company.
As collection of those reimbursements is estimated to be probable, the Company
has recorded a receivable of $9.6 million, representing the present value of
those reimbursements at October 3, 1999. Such receivable primarily represents
the expected reimbursement of costs associated with the Aerospace operations
acquired from Hercules in the Aerospace acquisition, whereby the Company
generally assumed responsibility for environmental compliance at Aerospace
facilities. It is expected that much of the compliance and remediation costs
associated with these facilities will be reimbursable under U.S. Government
contracts, and that those environmental remediation costs not covered through
such contracts will be covered by Hercules under various indemnification
agreements, subject to the Company having appropriately notified Hercules of
issues identified prior to the expiration of the stipulated notification periods
(March 2000 or March 2005, depending on site ownership). The Company's accrual
for environmental remediation liabilities and the associated receivable for
reimbursement thereof, have been discounted to reflect the present value of the
expected future cash flows, using a discount rate, net of estimated inflation,
of approximately 4.5 percent.

The following is a summary of the Company's amounts recorded for environmental
remediation at October 3, 1999 (in thousands):
Accrued                         Environmental Costs --
                                               Environmental Liability                Reimbursement Receivable
--------------------------------------------------------------------------------------------------------------------
Amounts (Payable)/Receivable                          $(40,421)                               $13,351
Unamortized Discount                                     9,351                                 (3,706)
--------------------------------------------------------------------------------------------------------------------
Present Value Amounts
(Payable)/Receivable                                  $(31,070)                               $ 9,645
--------------------------------------------------------------------------------------------------------------------
At October 3, 1999, the estimated discounted range of reasonably possible costs
of environmental remediation is between $31 and $46 million. The Company does
not anticipate that resolution of the environmental contingencies in excess of
amounts accrued, net of recoveries, will materially affect future operating
results.

In future periods, new laws or regulations, advances in technologies, outcomes
of negotiations/litigations with regulatory authorities and other parties,
additional information about the ultimate remedy selected at new and existing
sites, the Company's share of the cost of such remedies, changes in the extent
and type of site utilization, the number of parties found liable at each site
and their ability to pay are all factors that could significantly change the
Company's estimates.  It is reasonably possible that management's current
estimates of liabilities for the above contingencies could change in the near
term, as more definitive information becomes available.

Legal Matters - As a U.S. Government contractor, the Company is subject to
defective pricing and cost accounting standards non-compliance claims by the
Government.  Additionally, the Company has substantial Government contracts and
subcontracts, the prices of which are subject
to adjustment. The Company believes that resolution of such claims and price
adjustments made or to be made by the Government for open fiscal years (1994
through 1999) will not materially exceed the amount provided in the accompanying
balance sheets.

The Company is a defendant in a number of lawsuits that arise out of, and are
incidental to, the conduct of its business.  Such matters arise out of the
normal course of business and relate to product liability, intellectual
property, government regulations, including environmental issues, and other
issues.  Certain of the lawsuits and claims seek damages in very large amounts.
In these legal proceedings, no director, officer, or affiliate is a party or a
named defendant.

The Company has agreed to settle the civil action captioned United States v.
Alliant Techsystems Inc., which was filed in the U.S. District Court for the
District of Minnesota on March 10, 1997, alleging violations of the False Claims
Act, the Truth in Negotiations Act, and common law and equitable theories of
recovery, in connection with a contract for the AT4 shoulder-fired weapon.
Under the terms of the settlement, the Company will pay $1.3 million, including
interest, but will not admit to any liability for either fraud or violation of
the False Claims Act.

The patent infringement case brought against the Company by Cordant Technologies
(formerly Thiokol Corporation), which was filed in the U.S. District Court for
the District of Delaware on November 15, 1995, was dismissed by the U.S. Court
of Appeals for the Federal Circuit on September 29, 1999.  The dismissal
followed an agreement by the parties to dismiss the action with prejudice and to
resolve future rocket motor patent related disputes, if any, under a specified
alternative dispute resolution mechanism.

During fiscal 1998, the Company substantially completed the requirements of the
M117 Bomb reclamation contract.  The contract contained a priced option, having
approximate contract value less than $5 million, whereby the customer could
require the reclamation of additional quantities, given that such option be
exercised within the terms and conditions of the contract.  On August 4, 1997,
the customer informed the Company that it was exercising the option.  The
Company, based on advice from its counsel, maintained that the option exercise
was invalid and therefore did not perform on the option.  The Company's appeal
of the validity of the option to the United States Court of Appeals for the
Federal Circuit, and subsequent request for a hearing en banc related to the
option's validity, were both denied.  In late December 1997, the Company was
informed by the customer that the Company was being terminated for default on
the contract option.  Depending on the outcome of the termination for default
litigation, which involves allegations unrelated to the validity of the option,
management currently believes that the impact to the Company's future operating
earnings will not be material.

During fiscal 1998, the Company identified potential technical and safety issues
on its Explosive "D" contracts that, depending on the outcome of the continuing
evaluation of these risks and the potentially mitigating solutions, could add
cost growth to the program.  These potential technical and safety issues have
caused the Company to delay contract performance until the issues are resolved
to the satisfaction of the Company.  As a result, the Government customer has
provided the Company notification that it has been terminated for default on the
contracts. The Company is currently working closely with the customer to resolve
these matters.  Based on information known at this time, management believes
that the range of reasonably possible additional cost impact that could occur as
a result of the potential technical and safety issues on the Explosive "D"
program will not be material.  However, the ultimate outcome is dependent on the
extent to which the Company is able to mitigate these potential risks and
ultimately resolve the contractual performance issues on a mutually agreeable
basis.
The Company does not believe that the above contract terminations will have a
material adverse impact on the Company's future results of operations, its
liquidity, or its financial position.

While the results of litigation cannot be predicted with certainty, management
believes, based upon the advice of counsel, that the actions seeking to recover
damages against the Company either are without merit, are covered by insurance
and reserves, do not support any grounds for cancellation of any contract, or
are not likely to materially affect the financial condition or results of
operations of the Company, although the resolution of any such matters during a
specific period could have a material adverse effect on the quarterly or annual
operating results for that period.

YEAR 2000
---------

Background - The Company utilizes a significant amount of information technology
("IT"), such as computer hardware and software, and operating systems ("IT
systems"), and non-IT systems, such as applications used in manufacturing,
product development, financial business systems and various administrative
functions ("non-IT systems"). To the extent that these IT systems and non-IT
systems contain source code that is unable to distinguish the upcoming calendar
year 2000 from the calendar year 1900 (the "Year 2000 Issue"), some level of
modification or replacement of such systems has been necessary. The Company has
established a Year 2000 Project Management Plan ("Year 2000 Plan") to identify
and address systems requiring such modification or replacement. The Year 2000
Plan also involves assessing the extent to which the Company's suppliers and
customers are addressing the Year 2000 Issue. Company management has identified
certain business systems, suppliers, and customers as critical to its ongoing
business needs ("business critical"). Failure of these business critical
systems, suppliers, or customers to become Year 2000 compliant in a timely
manner could have a material adverse impact to the Company.

State of Readiness - The Year 2000 Plan, which encompasses both IT and non-IT
systems, involves the following five-phase approach to the Year 2000 Issue, with
the indicated timetable for completion of business critical items:
Timetable
  Phase                               Activity                                     for Completion              Status
  -----                               --------                                     --------------              ------
1      Ensure Company-wide awareness of the Year 2000 Issue..........       September 30, 1997          Completed

    2      Assess the impact of the Year 2000 Issue on the Company, and
           conduct inventories, analyze systems, prioritize modification
           or replacement, and develop contingency plans.................       January 31, 1998            Completed

    3      Begin modification, replacement or elimination of selected
           platforms, applications, databases and utilities, and modify
           interfaces, as appropriate....................................       August 31, 1998             Completed

    4      Complete work begun in Phase 3, and test, verify and validate
           all systems...................................................       September 30, 1999          Completed

    5      Implement modified or replaced platforms, applications,
           databases and utilities.......................................       September 30, 1999          Completed
The Company is not aware of any problems reasonably likely to occur as a result
of third party failures to address the Year 2000 Issue. Extensive work was done
to ensure supplier issues were
highlighted and prioritized. Suppliers were requested to provide a Year 2000
Issue status on their products, operating systems, suppliers and facilities and
visits were made to numerous key suppliers. Contact is occurring on a periodic
basis to secure additional information from suppliers on specific Year 2000
Issues and to ensure that no issues arise as the year progresses. Phase 4
activity encompasses supplier visits and phone interviews, final testing, and
preparation for complete system implementation. Critical actions and completion
dates have been identified to ensure that no business critical system will pass
its respective time-horizon-to-failure date.

The Company has utilized the services of several independent industry
consultants to assist it in assessing the reliability of its risk and cost
estimates. The Company's schedule for completing all internal Year 2000 actions,
other than manual actions required on January 1, 2000, has been substantially
completed.

Costs - The Company currently estimates that costs associated with modifying or
replacing systems affected by the Year 2000 Issue, including the amounts
expended in connection with the Company's ongoing, normal course-of-business
efforts to upgrade or replace business critical systems and software
applications as necessary, will be approximately $13 million (over three fiscal
years), compared to the Company's normal, annual IT operating budget of
approximately $30 million. These costs are being funded through cash flows from
operations. Costs associated with incremental personnel costs, consulting, and
hardware and software modifications are being expensed as incurred. The costs of
newly purchased hardware and software are being capitalized in accordance with
normal policy. The majority of estimated project costs were incurred during
fiscal year 1999 and early fiscal 2000, as approximately $12 million had been
expended through October 3, 1999. Approximately 40% of the total amount
ultimately expended is expected to be for systems modification, and the balance
for systems replacement. There are no IT projects which the Company has had to
delay due to the Year 2000 Issues that would have a material impact on the
Company's results of operations or financial position. The Company continues to
review its contractual obligations relative to the Year 2000 Issue, and
currently believes that there are no such obligations that would have material
impact to the Company's results of operations or its financial position.

Risks - The failure to resolve a material Year 2000 Issue could result in an
interruption in, or a failure of, certain normal business activities or
operations. Such failures could materially and adversely affect the Company's
results of operations, liquidity and financial position. Due to the general
uncertainty inherent in the Year 2000 Issue, resulting in part from the
uncertainty of the Year 2000 Issue readiness of third-party suppliers and
customers, the Company is unable to determine at this time whether the
consequences of failures resulting from the Year 2000 Issue will have a material
impact on the Company's results of operations, liquidity or financial position.
The Year 2000 Plan is expected to significantly reduce the Company's level of
uncertainty about the Year 2000 Issue and, in particular, about the Year 2000
Issue compliance and readiness of its business critical systems, suppliers, and
customers.

The most significant risk to the Company is the potential impact of
circumstances beyond its control, such as the failure of its business critical
suppliers and/or customers (particularly the U.S. Government) to resolve their
Year 2000 Issues, with a resulting inability of such suppliers to supply
critical goods and services to the Company, or of such customers to pay for
their purchases from the Company. A related significant risk to the Company is
that an inability of its business critical suppliers to resolve their Year 2000
Issues could result in the Company not being able to meet its contractual
obligations. Another significant risk to the Company could be the significant
loss of critical personnel on its Year 2000 Plan team.
The Company currently believes that there is minimal risk that its Year 2000
Plan will not be successfully implemented in a timely manner. In the event that
the Company is ultimately unable to implement its Year 2000 Plan in a timely
manner, the Company believes that its contingency plans, described below,
adequately accommodate its business critical systems in a way that would not
result in a material adverse impact to the Company's results of operations, its
liquidity, or its financial position. However, there can be no assurance that
the Company and/or relevant third parties will successfully resolve all of their
Year 2000 Issues or that the Company's contingency plans will be entirely
successful in mitigating those issues. Any such failure could have a material
adverse effect on the Company's operations, liquidity, or its financial
position.

Contingency Plans - The Company has been informed that the U.S. Government has
resolved the Year 2000 Issues affecting its payment system as of March 1999,
which allows about 9 months for testing of the payment system. (The Company is
working with the Government payment office on a contingency plan that will
accommodate a manual billing and payment process in the event the Year 2000
Issues affecting the Government payment system are not successfully resolved in
a timely manner.) Contingency plans have been established for all business
critical Company systems identified as Year 2000 Issues, and contingency plans
have also been developed for certain critical suppliers, including
identification of back-up supply sources, and consideration of the need to
purchase additional critical supplies. Additionally, the Company has developed
plans addressing the operation of its facilities during and immediately after
the beginning of calendar 2000, to prepare for the possibility of infrastructure
failure (i.e., power system failure). All contingency plans will continue to be
reviewed during the third quarter of the fiscal year.

Cautionary Statement - The costs of the Year 2000 Plan and the timing in which
the Company believes it will implement the Year 2000 Plan are based on
management's best estimates, which were derived utilizing numerous assumptions
of future events, including the continued availability of certain resources and
other factors. However, there can be no assurance that these estimates will be
achieved, and actual results could differ materially from those anticipated.
Specific factors that might cause such material differences include, but are not
limited to, the success of the Company in identifying systems and programs
having Year 2000 Issues, the nature and amount of programming required to
upgrade or replace the affected programs, the availability and cost of personnel
trained in this area, and the extent to which the Company might be adversely
impacted by the failure of third parties (i.e., suppliers, customers, etc.) to
remediate their own Year 2000 issues. Failure by the Company and/or its
suppliers and customers (in particular, the U.S. Government, on which the
Company is materially dependent) to complete Year 2000 Issue compliance work in
a timely manner could have a material adverse effect on the Company's
operations, its liquidity, and/or its financial position.

INFLATION
---------

In the opinion of management, inflation has not had a significant impact upon
the results of the Company's operations. The selling prices under contracts, the
majority of which are long term, generally include estimated cost to be incurred
in future periods. These cost projections can generally be negotiated into new
buys under fixed-price government contracts, while actual cost increases are
recoverable on cost-type contracts.
RISK FACTORS
------------

Certain of the statements made and information contained in this report,
excluding historical information, are "forward-looking statements" as defined in
the Private Securities Litigation Reform Act of 1995. These forward-looking
statements include those relating to fiscal 2000 sales, gross margin, operating
expenses, and capital expenditures. Also included are statements relating to the
repurchase of Company common stock, the funding of future growth, long-term debt
repayment, environmental remediation costs and reimbursement prospects, the
financial and operating impact of the resolution of environmental and litigation
contingencies in general, the M117 and Explosive "D" contract terminations for
default in particular, and the ultimate cost and impact of the Company's Year
2000 Issue compliance effort. Such forward-looking statements involve risks and
uncertainties that could cause actual results or outcomes to differ materially.
Some of these risks and uncertainties are set forth in connection with the
applicable statements. Additional risks and uncertainties include, but are not
limited to, changes in government spending and budgetary policies, governmental
laws and other rules and regulations surrounding various matters such as
environmental remediation, contract pricing, changing economic and political
conditions in the United States and in other countries, international trading
restrictions, outcome of union negotiations, customer product acceptance, the
Company's success in program pursuits, program performance, continued access to
technical and capital resources, supply and availability of raw materials and
components, timely compliance with the technical requirements of the Year 2000
Issue, including timely compliance by the Company's vendors and customers, and
merger and acquisition activity within the industry. All forecasts and
projections in this report are "forward-looking statements," and are based on
management's current expectations of the Company's near-term results, based on
current information available pertaining to the Company, including the
aforementioned risk factors. Actual results could differ materially.
PART II -- OTHER INFORMATION

ITEM 2. LEGAL PROCEEDINGS

     The appeals in the patent infringement action captioned Thiokol Corporation
(now known as Cordant Technologies Inc.) vs. Alliant Techsystems Inc. and
Hercules Incorporated (which was filed in the U.S. District Court for the
District of Delaware on November 15, 1995, and decided in the Company's favor on
March 25, 1999) were dismissed by the U.S. Court of Appeals for the Federal
Circuit on September 29, 1999. The dismissal followed an agreement by the
parties to dismiss the appeals with prejudice and to resolve future rocket motor
patent related disputes, if any, under a specified alternative dispute
resolution mechanism.

     The Company has agreed to settle the civil action captioned United States
v. Alliant Techsystems Inc., which was filed in the U.S. District Court for the
District of Minnesota on March 10, 1997, alleging violations of the False Claims
Act, the Truth in Negotiations Act, and common law and equitable theories of
recovery, in connection with a contract for the AT4 shoulder-fired weapon.
Under the terms of the settlement, the Company will pay $1.3 million, including
interest, but will not admit to any liability for either fraud or violation of
the False Claims Act.

     Incorporated herein by reference is note 5 of Notes to Consolidated
Financial Statements included in Item 1 of Part I of this report.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

          (a)  On August 3, 1999, the registrant held its annual meeting of
               stockholders.

          (b)  At the above annual meeting, the following persons were elected
               directors to serve until the next annual meeting of stockholders:
               Peter A. Bukowick; Gilbert F. Decker, Thomas L. Gossage; Joel M.
               Greenblatt; Jonathan G. Guss; David E. Jeremiah; Gaynor N.
               Kelley; Joseph F. Mazzella; Paul David Miller; Daniel L. Nir; and
               Michael T. Smith.

          (c)  At the above annual meeting, the stockholders voted upon the
               following proposals: (1) election of directors; (2) ratification
               of the selection of Deloitte & Touche as independent accountants
               for the fiscal year ending March 31, 2000; and (3) a stockholder
               proposal. The votes cast on each of the above proposals were as
               follows:
Proposal Number 1:
          -----------------
                                                For          Withheld
                                                ---          --------

           Peter A. Bukowick........           8,883,915        65,248
           Gilbert F. Decker........           8,899,116        50,047
           Thomas L. Gossage........           8,871,966        77,197
           Joel M. Greenblatt.......           8,869,065        80,098
           Jonathan G. Guss.........           8,885,025        64,138
           David E. Jeremiah........           8,924,991        24,172
           Gaynor N. Kelley.........           8,867,041        82,122
           Joseph F. Mazzella.......           8,889,095        60,068
           Paul David Miller........           8,897,037        52,127
           Daniel L. Nir............           8,875,305        73,858
           Michael T. Smith.........           8,927,982        21,181

           Broker non-votes: None

          Proposal Number 2:
          -----------------

           For..................        8,907,695
           Against..............           26,328
           Abstain..............           15,140
           Broker non-votes.....             None

          Proposal Number 3:
          -----------------

           For..................          283,702
           Against..............        7,735,018
           Abstain..............          261,658
           Broker non-votes.....          668,785

ITEM 5. OTHER INFORMATION

     Attached to this report as Exhibit 99 is a list of the registrant's
directors and executive officers, as of the date of this report, which reflects
the following changes since August 12, 1999: new titles: Richard N. Jowett, Vice
President and Treasurer; Mark L. Mele, Vice President - Investor Relations and
Strategic Planning; and Scott S. Meyers, Vice President and Chief Financial
Officer.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)    Exhibits.

            Exhibit No.                         Description of Exhibit
            -----------                         ----------------------

              10.1            Alliant Techsystems Inc. Management Deferred
                              Compensation Plan (incorporated by reference from
                              Exhibit 4 to the registrant's registration
                              statement on Form S-8 filed August 4, 1999
                              (registration no. 333-84445))

              10.2            Trust Agreement for Alliant Techsystems Inc.
                              Management Deferred Compensation Plan

              10.3            Separation Agreement and General Release between
                              the registrant and John L. Lotzer

              27              Financial Data Schedule

              99              Alliant Techsystems Inc. Directors and Executive
                              Officers

     (b)    Reports on Form 8-K.

            During the quarterly period ended October 3, 1999, the registrant
            filed no reports on Form 8-K.
SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                        ALLIANT TECHSYSTEMS INC.

Date: November 12, 1999            By:  /s/ Charles H. Gauck
                                 Name:  Charles H. Gauck
                                Title:  Vice President and Secretary
                                        (On behalf of the registrant)

Date: November 12, 1999            By:  /s/ Scott S. Meyers
                                 Name:  Scott S. Meyers
                                Title:  Vice President and Chief Financial
                                        Officer (Principal Financial Officer)
ALLIANT TECHSYSTEMS INC.

                                   FORM 10-Q

                                 EXHIBIT INDEX

The following exhibits are filed herewith electronically or incorporated herein
by reference. The applicable Securities and Exchange Commission File Number is
1-10582.
Exhibit
  Number                        Description of Exhibit                           Method of Filing
 -------                        ----------------------                           ----------------
10.1    Alliant Techsystems Inc. Management Deferred                   Incorporated by reference from
            Compensation Plan...........................................   Exhibit 4 to the registrant's
                                                                           registration statement on Form S-8
                                                                           filed August 4, 1999 (registration
                                                                           no. 333-84445)

    10.2    Trust Agreement for Alliant Techsystems Inc. Management
            Deferred Compensation Plan..................................   Filed herewith electronically

    10.3    Separation Agreement and General Release between the
            registrant and John L. Lotzer...............................   Filed herewith electronically

    27      Financial Data Schedule.....................................   Filed herewith electronically

    99      Alliant Techsystems Inc. Directors and Executive Officers...   Filed herewith electronically