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Proc-Type: 2001,MIC-CLEAR
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SECURITIES AND EXCHANGE COMMISSION (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal quarter ended March 30, 2002 [ ] 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 0-7087 ASTRONICS CORPORATION New York 16-0959303 (State or Other Jurisdiction of (I.R.S. Employer 1801 Elmwood Avenue, Buffalo, New York 14207 (Address of Principal Executive Office) (Zip Code) 716-447-9013 Securities registered pursuant to Section 12(g) of the Act: Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or 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 March 30, 2002, 8,118,668 shares of common stock were
outstanding consisting of 5,869,216 shares of common stock ($.01 par value) and
2,249,452 shares of Class B common stock ($.01 par value). PART I - FINANCIAL INFORMATION Item 1. Financial Statements ASTRONICS CORPORATION (Dollars in Thousands) March 30, 2002 December 31, Current Assets: Accounts receivable Inventories Prepaid expenses Total current assets Property, Plant and Equipment, at cost Less accumulated depreciation and amortization Net property, plant and equipment Other Assets Accounts payable Accrued expenses Total current liabilities Long-term debt Other Liabilities Common Shareholders' Equity: Class B common stock, $.01 par value 24 25 Additional paid-in capital Accumulated other comprehensive income Retained earnings Less treasury shares, at cost; 419,874 in 2002 Total shareholders' equity See notes to financial statements. ASTRONICS CORPORATION (Dollars in Thousands) (Unaudited) 2002 2001 Sales $ 20,156 $ 20,356 Less: Freight charges 1,006 433 Net Sales 19,150 19,923 Costs and Expenses: Selling, general and administrative expenses 2,834 2,673 Interest expenses, net of interest income Total costs and expenses 17,010 18,084 Income before taxes 2,140 1,839 Provision for income taxes 784 633 Net Income 1,356 1,206 Retained Earnings: March 30 $ 39,634 $ 33,015 Earnings per share: Basic $ .17 $ .14 Diluted $ .16 $ .14 See notes to financial statements. ASTRONICS CORPORATION (Dollars in Thousands) (Unaudited) 2002 2001 Cash Flows from Operating Activities: Net income Adjustments to reconcile net income to net cash provided
Depreciation and amortization Other Cash flows from changes in operating assets and
liabilities, Accounts receivable Inventories Prepaid expenses Accounts payable Accrued expenses Income taxes Net Cash provided (used) by Operating Activities 2,598 2,376 Cash Flows from Investing Activities: Change in other assets Capital expenditures Net Cash provided (used) by Investing Activities (1,060) (309) Cash Flows from Financing Activities: New long-term debt Principal payments on long-term debt and capital Unexpended industrial revenue bond proceeds Proceeds from issuance of stock Purchase of treasury stock Net Cash provided (used) by Financing Activities (96) (339) Effect of exchange rate change on cash Net increase (decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at March 30 $ 10,611 $ 1,773 Cash payments for: Income taxes See notes to financial statements. ASTRONICS CORPORATION The accompanying unaudited statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments considered necessary for a fair presentation
have been included. The results of operations for any interim period are
not necessarily indicative of results for the full year. Operating results
for the three-month period ended March 30, 2002 are not necessarily
indicative of the results that may be expected for the year ended December
31, 2002. Inventories are stated at the lower of cost or market,
cost being determined in accordance with the first-in, first-out method.
Inventories are as follows: (in thousands) March 31, 2002 December 31, Finished Goods $1,984 $2,201 Work in Progress 1,707 1,244 Raw Material 5,636 5,567 $9,327 $9,012 The Company operates in two business segments: The
Aerospace-Electronics segment concentrates on the design and manufacture
of specialized lighting and control systems for aircraft. These systems
typically encompass the electrical circuitry, lighting and control
fixtures as well as the light elements. System components include power
supplies, battery-based backup systems, dimmers, keyboards, control panels
and specialized lighting fixtures. The systems are typically used in
aircraft cockpits (avionics systems), cabins (escape path systems), and
exteriors (position lighting systems). Customers include the U.S. and
other militaries, well-known aircraft manufacturers, operators and
avionics companies. Astronics' Printing-Packaging segment is a leading
North American manufacturer of stock folding cartons for small to medium
size confectionary store operators. Custom folding cartons are also
manufactured for a wide range of industrial and consumer products
companies. This segment also custom prints invitations, napkins and
accessories for all social and business events. Printed office products
include business cards, post cards and presentation folders. (in thousands) Three Months Ended Three Months Ended Aerospace- Printing- Aerospace- Printing- $ 11,587 $ 7,563 $ 12,964 $ 6,959 Income before taxes $ 1,486 $ 749 $ 1,311 $ 484 March 30, 2002 December 31, 2001 Segment assets $ 34,098 $ 25,885 $ 34,041 $ 25,479 A reconciliation of combined income before taxes for
the three-month period is as follows: (in thousands) Three Months Ended March 30, 2002 March 31, 2001 Income before taxes from segments $ 2,235 $ 1,795 Corporate income (expenses), net (95) 44 Income before taxes $ 2,140 $ 1,839 On November 5, 2001, Board of Directors of the
Company declared a 25% stock distribution to shareholders of record on
November 16, 2001 payable November 30, 2001. All share and per share data
in the accompanying financial statements have been retroactively adjusted
to reflect this distribution. ASTRONICS CORPORATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Washington, DC
FORM 10-Q
(Exact Name of Registrant as Specified in Its Charter)
Incorporation or Organization)
Identification No.)
(Registrant's Telephone Number, Including Area Code)
$.01 par value Common Stock, $.01 par value Class B Stock
(Title of Class)
Consolidated Balance Sheet
March 30, 2002
With Comparative Figures for December 31, 2001
(Unaudited)
2001
Cash
$ 10,611
$ 9,176
12,424
11,828
9,327
9,012
691
564
33,053
30,580
59,720
59,082
26,087
25,097
33,633
33,985
6,718
6,482
$ 73,404
$ 71,047
Current
Liabilities:
Current maturities of long-term debt $ 1,142
$ 1,147
5,342
4,244
3,033
3,543
9,517
8,934
15,683
15,819
5,944
5,623
Common stock, $.01 par value
Authorized 10,000,000 shares, issued
6,177,250 in 2002, 5,975,409 in 2001
62
60
Authorized 5,000,000 shares, issued
2,361,292 in 2002 2,524,432 in 2001
3,741
3,433
6
35
39,634
38,278
43,467
41,831
and 414,669 in 2001
1,207
1,160
42,260
40,671
$ 73,404
$ 71,047
Consolidated Statement of Income and Retained Earnings
Period Ended March 30, 2002
With Comparative Figures for 2001
Cost of products sold
14,101
15,255
of $47 in 2002 and $46 in 2001
75
156
January 1
38,278
31,809
Consolidated Statement of Cash Flows
Three Months Ended March 30, 2002
With Comparative Figures for 2001
$ 1,356
$ 1,206
by operating activities:
1,088
1,106
322
91
excluding effects of acquisitions:
(596)
1,696
(315)
(756)
(126)
(49)
1,098
86
(982)
(1,063)
753
59
(442)
(42)
(638)
(267)
--
150
lease obligations(141)
(1,140)
87
600
5
51
(47)
--
(7)
--
1,435
1,728
9,176
45
Interest
$ 123
$ 245
80
588
Notes to Financial Statements
March 30, 2002
The balance sheet at December 31, 2001 has been derived
from the audited financial statements at that date, but does not include
all of the information and footnotes required by generally accepted
accounting principles for complete financial statements.
For further information, refer to the financial
statements and footnotes thereto included in the Company's 2001 annual
report.
(Unaudited)
2001
March 30, 2002
March 31, 2001
Electronics
Packaging
Electronics
Packaging
Net sales to
external customers
Percent of Net Sales |
||
Three Months Ended March 30, |
||
2002 |
2001 |
|
Net Sales: | ||
Aerospace and Electronics | 60.5% | 65.1% |
Printing and Packaging | 39.5 | 34.9 |
100.0% | 100.0% | |
Cost of products sold | 73.6 | 76.6 |
Selling,
general and administrative expenses |
14.8 | 13.4 |
Interest expenses, net | .4 | .8 |
88.8% | 90.8% | |
Income before
provision for income taxes |
|
|
Provision for taxes | 4.1 |
3.2 |
Net Income | 7.1% | 6.0% |
NET SALES |
Net sales for the three months ended March 30, 2002 decreased to $19.2 million from $19.9 million in the three months ended April 1, 2001, a 4% decrease. |
|
Net sales in our Aerospace-Electronics segment were $11.6 million for the three months ended March 30, 2002 compared to $13.0 million for the three months ended April 1, 2001, an 11% decrease. This decrease in sales resulted from weak demand from air carriers and the electronics device market. Net sales under this segment's F-16 night vision upgrade program with the US Air Force for the three months ended March 30, 2002 were $5.0 million compared to $5.1 million in the three months ended April 1, 2001. |
||
Net sales in our Printing-Packaging segment increased to $7.6 million for the three months ended March 30, 2002 compared to $6.9 million for the three months ended April 1, 2001, a 10% increase. Short run commercial printing accounted for 75% of the net sales increase. The remainder of the increase came from the custom folding carton product line. |
||
EXPENSES AND MARGINS |
Cost of products sold as a percentage of net sales for the three months ended March 30, 2002 compared to the three months ended April 1, 2001 was 3% lower. Both segments contributed to this reduction. In the case of Aerospace-Electronics, production efficiencies on the F-16 program and increased volume from our Montreal operation overcame the impact on margins from reduced volume in aircraft cabin lighting and lamps for electronic devices. The Printing-Packaging segment benefited from the additional volume and cost control. Selling, general and administrative costs for the three months ended March 30, 2002 compared to the three months ended April 1, 2001 increased 1.4% to 14.8%. The 2002 quarter includes $77,000 in severance accruals related to staffing adjustments made in March. As a result of the reduction in cost of products sold offset by the increase in selling, general and administrative cost, earnings before interest and taxes as a percentage of net sales (EBIT) was up 1.6% to 11.6% in 2002. |
|
TAXES |
The Company's effective tax rate for the first quarter of 2002 was 36.6% compared to 34.4%. The 2001 period was favorably affected by adjustments to estimated tax provisions. |
|
NET INCOME AND EARNINGS PER SHARE |
Net income and earnings per share for the 2002 quarter increased over 2001's as a result of the increase in EBIT margin described above offset, in part, by the higher effective tax rate. Average shares outstanding for purposes of the diluted earnings per share calculation were virtually unchanged. The Board of Directors declared a 25% stock distribution to shareholders of record on November 16, 2001. Per share amounts have been retroactively adjusted to reflect this distribution. |
|
LIQUIDITY |
Cash provided by operating activities was $2.6 million during the three months ended March 30, 2002 mainly as a result of net income plus depreciation and amortization. |
|
The Company's capital expenditures of $.6 million for the 2002 quarter were up by $.3 million from 2001 levels. |
||
The Company has a $12,000,000 revolving line of credit, of which it had utilized $3.2 million at March 30, 2002 and December 31, 2001. The line is available through June 30, 2004 at which time amounts outstanding may be converted into a four-year term loan. The revolving line of credit, among other requirements, imposes certain financial performance covenants with which the Company maintains compliance. The Company believes that cash balances at March 30, 2002, cash flow from operations and availability on the revolving line of credit are adequate to meet the Company's operational and capital expenditure requirements for 2002. |
||
BACKLOG |
The Company's backlog at March 30, 2002 was $26.0 million. The backlog is composed of $24.6 million in the Aerospace-Electronics segment and $1.4 million in the Printing-Packaging segment. Approximately $19.6 million of the Aerospace-Electronics backlog and all of the Printing-Packaging backlog is scheduled to ship in 2002. |
|
COMMITMENTS |
The Company has commitments for items that it purchases in the normal on-going affairs of the business. The Company is not aware of any obligations in excess of normal market conditions, nor of any long-term commitments that would have a material adverse affect on its financial condition. |
|
MARKET RISK |
The Company's foreign operations do not result in significant currency risks because nearly all of the Company's consolidated net sales are denominated in U.S. dollars and net assets held in, or measured in, currencies other than the U.S. dollar are insignificant. |
|
Risks due to fluctuation in interest rates is a function of the Company's floating rate debt obligations which total approximately $16,500,000 at March 30, 2002. To offset this exposure, the Company entered into an interest rate swap on its New York Industrial Revenue Bond through 2005 which effectively fixes the interest rate at 4.09% on this $6,300,000 obligation. As a result, a change of 1% in interest rates would impact annual net income by less than $100,000. |
||
NEW ACCOUNTING PRONOUNCEMENTS |
In July 2001, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 141, Business Combinations, and No. 142, Goodwill and Other Intangible Assets. Under the new rules, goodwill (and intangible assets deemed to have indefinite lives) is not amortized but is subject to annual impairment tests in accordance with the Statements. The Company adopted the new rules on accounting for goodwill and other intangible assets on January 1, 2002. Application of the nonamortization provisions of the Statement resulted in an increase in net income of $41,000 in the first quarter of 2002. The Company performed the first of the required impairment tests of goodwill and indefinite lived intangible assets as of January 1, 2002 and determined that no adjustment to the carrying value of such assets was required. |
Item 3. Quantitative and Qualitative Disclosures About Market Risk
See Market Risk in Item 2, above.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Securities Holders.
At the annual meeting of shareholders held on April 25, 2002, the nominees to the Board of Directors were re-elected based on the following results:
Nominees |
Votes For |
Votes Withholding |
|
Robert T. Brady | 21,672,393 | 2,008,774 | |
John B. Drenning | 22,860,493 | 820,674 | |
Peter J. Gundermann | 21,672,431 | 2,008,736 | |
Daniel G. Keane | 21,658,956 | 2,022,211 | |
Kevin T. Keane | 21,658,994 | 2,022,173 | |
Robert J. McKenna | 22,958,571 | 722,596 |
The selection of Ernst & Young LLP as the Registrant's auditors was approved by the following vote: 22,830,032 in favor; 188,887 against; and 662,248 abstentions.
The proposal to increase the authorized Common Stock from 15,000,000 shares to 25,000,000 shares was approved by the following vote: 23,345,189 in favor; 275,979 against; and 59,999 abstentions.
Under Applicable New York law and the Company's charter documents, abstentions and non-votes have no effect.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
Exhibit 11. Computation of Per Share Earnings.
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.
ASTRONICS CORPORATION
|
|
DATED: May 7, 2002 | /s/ C. Anthony Rider |
(Signature) | |
C. Anthony Rider | |
Vice President-Finance and Treasurer | |
(Principal Financial Officer) |
EXHIBIT 11
COMPUTATION OF PER SHARE EARNINGS
(in thousands, except for per share data) |
|||||
Three Months Ended March 30, |
|||||
2002 |
2001 |
||||
Net income |
$ 1,356 | $ 1,206 | |||
Basic earnings per share weighted average shares |
8,109 | 7,954 | |||
Net effect of dilutive stock options |
236 | 401 | |||
Diluted earnings per share weighted average shares |
8,345 | 8,355 | |||
Basic earnings per share |
$ .17 | $ .14 | |||
Diluted earnings per share |
$ .16 | $ .14 |
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