EX-99.1 2 c04024exv99w1.htm EXHIBIT 99.1 Exhibit 99.1
Exhibit 99.1
     
(ASTRONICS LOGO)   NEWS
RELEASE
Astronics Corporation • 130 Commerce Way • East Aurora, NY • 14052-2164
For more information contact:
     
Company:
  Investor Relations:
David C. Burney, Chief Financial Officer
  Deborah K. Pawlowski, Kei Advisors LLC
Phone: (716) 805-1599, ext. 159
  Phone: (716) 843-3908
Email: david.burney@astronics.com
  Email: dpawlowski@keiadvisors.com
FOR IMMEDIATE RELEASE
Astronics Corporation Reports Net Income Grows 24%
in Second Quarter of 2010
  •   Net income up 24.2% from last year’s second quarter
  •   Quarterly bookings increased 26.7% on strong aerospace order level
  •   Revenue expectation for 2010 increased to range of $185 million to $195 million
EAST AURORA, NY, July 29, 2010 — Astronics Corporation (NASDAQ: ATRO), a leader in advanced, high performance lighting, electrical power and automated test systems for the global aerospace and defense industries, today reported financial results for its second quarter and year-to-date period ended July 3, 2010.
Peter J Gundermann, President and Chief Executive Officer commented, “Overall, we had a solid quarter that was led by our Aerospace segment. We had strong cash flow and profitability and our bookings so far this year are very encouraging. New orders over the past six months total almost $106 million, up measurably over the $72 million for the same period last year.”
                                                 
    Three Months Ended     Six Months Ended  
    July 3,     July 4,     %     July 3,     July 4,     %  
    2010     2009     Change     2010     2009     Change  
Sales
   $ 47,089     $ 47,024       0.1 %   $ 94,025     $ 97,039       (3.1 )%
Gross profit
   $ 10,685     $ 8,724       22.5 %   $ 22,231     $ 17,254       28.8 %
Gross margin
     22.7 %     18.6 %             23.6 %     17.8 %        
SG&A
   $ 6,063     $ 6,444       (5.9 )%   $ 11,529     $ 12,509       (7.8 )%
SG&A percent to sales
     12.9 %     13.7 %             12.3 %     12.9 %        
Income from Operations
   $ 4,622     $ 2,280       102.7 %   $ 10,702     $ 4,745       125.5 %
Operating margin
     9.8 %     4.8 %             11.4 %     4.9 %        
Net Income
   $ 2,430     $ 1,956       24.2 %   $ 5,830     $ 3,357       73.7 %
Sales in the second quarter of 2010 were $47.1 million, up $0.1 million, or 0.1%, from the prior year second quarter. Aerospace sales, which represent 93% of total sales, increased 14% to $43.6 million in the 2010 second quarter. Test Systems sales declined by $5.3 million to $3.5 million when compared with last year’s second quarter.

 

 

 

Net income in the second quarter of 2010 was $2.4 million, or $0.22 per diluted share, compared with net income of $2.0 million, or $0.18 per diluted share, in the same period of last year.
Consolidated gross margin and operating margin in the 2010 second quarter improved over the prior year period reflecting strong operating leverage in the Aerospace segment on higher volume, lower cost structure from actions taken last year to reduce costs and favorable sales mix. Also contributing to the operating margin expansion was a $0.7 million decline in amortization expense on purchased intangible assets in the Test Systems segment.
Engineering and development (E&D) costs were $7.0 million in the 2010 second quarter compared with $6.4 million in last year’s second quarter.
Sales for the first half of 2010 were $94.0 million, down $3.0 million, or 3.1%, from the same period last year. Net income for the 2010 six-month period was $5.8 million, or $0.52 per diluted share, compared with net income of $3.4 million, or $0.31 per diluted share, in the same period of last year.
The improved margins in the first half of 2010 were a result of higher margins in the Aerospace segment as leverage was achieved from increased sales volumes and reductions to our cost structure, as well as a favorable sales mix compared with last year. Also contributing to the operating margin expansion was a $1.1 million reduction in amortization expense on purchased intangible assets in the Test Systems segment.
Year-to-date engineering and development costs were $14.2 million and $13.8 million in 2010 and 2009, respectively.
The $0.4 million decrease in selling, general and administrative (SG&A) expense in the second quarter of 2010 compared with last year’s second quarter was primarily due to last year’s higher amortization expense for purchased intangible assets in the Test Systems business.
Second quarter Review: Aerospace Segment (refer to sales by market and segment data in accompanying tables)
Sales for the Aerospace segment were $43.6 million in the second quarter of 2010, up $5.4 million, or 14.1%, compared with the 2009 second quarter. The sales increase to the commercial transport market was a result of increased volume due primarily to a general improvement in the commercial transport market, as airlines increased their procurement and installation of in-flight entertainment and in-seat power systems that utilize the Company’s cabin electronics products. Sales to the business jet market were higher due to increased sales of the airframe power product line. FAA/Airport market sales increased due in part to the timing of shipments of airfield lighting equipment. Military sales were flat for the quarter compared with the previous year’s second quarter as a $2.0 million increase in sales of aircraft lighting products was offset by a decrease of airframe power product sales, as the Company’s shipments for the Tactical Tomahawk power conditioning unit concluded in the third quarter of 2009.
Year-to-date sales were $86.8 million in the first half of 2010, up $6.8 million, or 8.4%, compared with the first half of 2009. The increase in commercial transport sales was a result of a general improvement in the commercial transport market. In total, sales to the business jet market were flat as a $1.4 million increase in airframe power sales was offset by a similar decrease in aircraft lighting product sales. Military sales were lower primarily as a result of the conclusion of shipments of the Company’s power conditioning unit for the Tactical Tomahawk missile in the third quarter of 2009, somewhat offset by higher shipments of lighting products.
Aerospace operating profit for the second quarter of 2010 was $6.8 million, or 15.5% of sales, compared with $3.7 million, or 9.7% of sales, in the same period last year. Operating profit for the first half of 2010 was $13.5 million, or 15.5% of sales, compared with $7.1 million, or 8.9% of sales, in the same period last year. Margin improvement for both the three-month and year-to-date periods was due to the leverage provided on the increased sales volume, the effect of cost reductions and favorable product mix.
Bookings for the Aerospace segment during the second quarter were $46.2 million, up 34% over
$34.6 million in the second quarter of 2009. Backlog at the end of the second quarter was $85.7 million compared with $83.1 million at the end of the trailing first quarter.
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Second quarter Review: Test Systems Segment (refer to sales by market and segment data in accompanying tables)
Sales for the Test Systems segment were $3.5 million in the second quarter of 2010 compared with $8.8 million in the second quarter of 2009. Year-to-date sales were $7.2 million in the first half of 2010 compared with $17.0 million in the same period last year, a decrease of $9.8 million. The decrease in the Test Systems segment sales reflected the low rate of new orders received during the past eighteen months and the resulting low backlog level.
The segment’s operating loss was $1.0 million, or 28.5% of sales, in the second quarter of 2010, compared with a loss of $0.3 million, or 2.8% of sales, in the second quarter of 2009. The operating loss for the first six months of 2010 was $0.8 million, or 11.1% of sales, compared with a loss of $0.1 million, or 0.3% of sales, in the second quarter of 2009. Compared with last year, amortization expense relating to acquired intangible assets decreased by $0.7 million and $1.1 million for the three and six-month periods of 2010 and 2009, respectively. Additionally, the 2010 year to date operating loss reflects a reduction in estimated warranty liability of $0.7 million.
Test Systems bookings in the second quarter were $5.4 million compared with $6.2 million in the second quarter of 2009. Backlog was $11.6 million at the end of the second quarter compared with $9.6 million at the end of the trailing first quarter.
Balance Sheet
Cash generated from operations during the first half of 2010 was $7.5 million compared with $9.5 million in 2009. Higher net income was offset by increased investment in net working capital components. Capital expenditures in the first half of the 2010 were $1.5 million and payments made to reduce long-term debt during the six-month period were $4.5 million. The Company expects capital spending in 2010 to be approximately $2.5 million to $3.5 million.
At July 3, 2010, the cash balance was $16.4 million compared with $14.9 million at December 31, 2009. The Company has $35 million available on its revolving credit facility at July 3, 2010.
Outlook
Backlog at July 3, 2010 was $97.3 million, above backlog at the end of the first quarter of 2010 of $92.8 million and down from backlog at the end of the second quarter of 2009 of $105.5 million. Approximately $69 million of total backlog is expected to ship by the end of 2010 and approximately $82 million of total backlog is expected to ship in the next 12 months.
Mr. Gundermann stated, “As a result of our strong bookings over the past six months, we are increasing our revenue expectations for the year. We now expect that our sales for the year will be in the range of $185 to $195 million, up from the previous estimate of $170 to $190 million.”
Astronics anticipates that approximately $165 million to $170 million of projected 2010 revenue will be from the Aerospace segment, while approximately $20 million to $25 million will be from the Test Systems segment.
Second quarter 2010 Webcast and Conference Call
The Company will host a teleconference at 10:00 a.m. EDT on Friday, July 30, 2010. During the teleconference, Peter J. Gundermann, President and CEO, and David C. Burney, Vice President and CFO, will review the financial and operating results for the period and discuss Astronics’ corporate strategy and outlook. A question-and-answer session will follow.
The Astronics conference call can be accessed by dialing (201) 689-8562 and entering conference ID number 353788. The listen-only audio webcast can be monitored at www.astronics.com. To listen to the archived call, dial (858) 384-5517 and enter conference ID number 353788 and account number 3055. The telephonic replay will be available from 1:00 p.m. on the day of the call until 11:59 p.m. ET, Friday, August 6, 2010. A transcript will also be posted to the Company’s Web site, once available.
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ABOUT ASTRONICS CORPORATION
Astronics Corporation is a leader in advanced, high performance lighting, electrical power and automated test systems for the global aerospace and defense industries. Astronics’ strategy is to develop and maintain positions of technical leadership in its chosen aerospace and defense markets, to leverage those positions to grow the amount of content and volume of product it sells to those markets and to selectively acquire businesses with similar technical capabilities that could benefit from our leadership position and strategic direction. Astronics Corporation, and its wholly-owned subsidiaries, DME Corporation, Astronics Advanced Electronic Systems Corp. and Luminescent Systems Inc., have a reputation for high quality designs, exceptional responsiveness, strong brand recognition and best-in-class manufacturing practices. The Company routinely posts news and other important information on its Web site at www.Astronics.com.
For more information on Astronics and its products, visit its website at www.Astronics.com.
Safe Harbor Statement
This press release contains forward-looking statements as defined by the Securities Exchange Act of 1934. One can identify these forward-looking statements by the use of the words “expect,” “anticipate,” “plan,” “may,” “will,” “estimate” or other similar expression. Because such statements apply to future events, they are subject to risks and uncertainties that could cause the actual results to differ materially from those contemplated by the statements. Important factors that could cause actual results to differ materially include the state of the aerospace industry, the market acceptance of newly developed products, internal production capabilities, the timing of orders received, the status of customer certification processes, the demand for and market acceptance of new or existing aircraft which contain the Company’s products, customer preferences, and other factors which are described in filings by Astronics with the Securities and Exchange Commission. The Company assumes no obligation to update forward-looking information in this press release whether to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results, financial conditions or prospects, or otherwise.
FINANCIAL TABLES FOLLOW.
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ASTRONICS CORPORATION
CONSOLIDATED INCOME STATEMENT DATA
(Unaudited, $ in thousands except per share data)
                                 
    Three Months Ended     Six Months Ended  
    7/3/2010     7/4/2009     7/3/2010     7/4/2009  
Sales
   $ 47,089     $ 47,024     $ 94,025     $ 97,039  
Cost of products sold
     36,404       38,300       71,794       79,785  
 
                        
Gross profit
     10,685       8,724       22,231       17,254  
Gross margin
     22.7 %     18.6 %     23.6 %     17.8 %
 
Selling, general and administrative
     6,063       6,444       11,529       12,509  
SG&A % to Sales
     12.9 %     13.7 %     12.3 %     12.9 %
 
                        
Income from operations
     4,622       2,280       10,702       4,745  
Operating margin
     9.8 %     4.8 %     11.4 %     4.9 %
 
                                
Interest expense, net
     722       476       1,321       900  
Other expense (income)
     13       (900 )     (25 )     (913 )
 
                        
Income before tax
     3,887       2,704       9,406       4,758  
Income tax expense
     1,457       748       3,576       1,401  
 
                        
Net Income
   $ 2,430     $ 1,956     $ 5,830     $ 3,357  
 
                        
 
                                
Basic earnings per share:
   $ 0.22     $ 0.18     $ 0.54     $ 0.31  
Diluted earnings per share:
   $ 0.22     $ 0.18     $ 0.52     $ 0.31  
 
                                
Weighted average diluted shares outstanding
     11,289       11,030       11,127       10,899  
 
                        
 
                                
Capital Expenditures
   $ 611     $ 583     $ 1,486     $ 1,551  
Depreciation and Amortization
   $ 1,224     $ 1,955     $ 2,463     $ 3,695  
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ASTRONICS CORPORATION
CONSOLIDATED BALANCE SHEET DATA
(in thousands)
                 
    7/3/2010     12/31/2009  
    (Unaudited)        
ASSETS:
                
Cash and cash equivalents
   $ 16,412     $ 14,949  
Accounts receivable
     28,128       30,560  
Inventories
     32,501       31,909  
Other current assets
     6,584       5,075  
Property, plant and equipment, net
     30,813       31,243  
Other long-term assets
     3,647       3,763  
Deferred taxes long-term
     7,368       8,131  
Intangible assets
     5,315       5,591  
Goodwill
     7,472       7,493  
 
            
Total Assets
   $ 138,240     $ 138,714  
 
            
 
                
LIABILITIES AND SHAREHOLDERS’ EQUITY:
                
Current maturities of long term debt
   $ 5,239     $ 6,238  
Accounts payable and accrued expenses
     22,347       23,398  
Long-term debt
     35,015       38,538  
Other liabilities
     9,234       10,427  
Shareholders’ equity
     66,405       60,113  
 
            
Total Liabilities and Shareholders’ Equity
   $ 138,240     $ 138,714  
 
            
ASTRONICS CORPORATION
SEGMENT DATA
(Unaudited, $ in thousands)
                                 
    Three Months Ended     Six Months Ended  
    7/3/2010     7/4/2009     7/3/2010     7/4/2009  
Sales
                                
Aerospace
   $ 43,599     $ 38,216     $ 86,789     $ 80,034  
Test Systems
     3,490       8,808       7,236       17,005  
 
                        
Total Sales
   $ 47,089     $ 47,024     $ 94,025     $ 97,039  
 
                        
 
                                
Operating Profit (Loss) and Margins
                                
Aerospace
   $ 6,753     $ 3,700     $ 13,495     $ 7,095  
 
     15.5 %     9.7 %     15.5 %     8.9 %
Test Systems
     (993 )     (251 )     (806 )     (53 )
 
     (28.5 )%     (2.8 )%     (11.1 )%     (0.3 )%
 
                        
Total Operating Profit
     5,760       3,449       12,689       7,042  
 
Corporate Expenses and Other
     1,873       745       3,283       2,284  
 
                        
Income from Operations
   $ 3,887     $ 2,704     $ 9,406     $ 4,758  
 
                        
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ASTRONICS CORPORATION
SALES BY MARKET
($, in thousands)
                                                         
    Three Months Ended     Six Months Ended     2010  
    7/3/2010     7/4/2009     % change     7/3/2010     7/4/2009     % change     YTD %  
 
                                                        
Aerospace Segment
                                                        
Commercial Transport
   $ 24,890     $ 21,387       16 %   $ 52,336     $ 44,393       18 %     55 %
Military
     9,521       9,855       (3 )%     17,918       20,341       (12 )%     19 %
Business Jet
     6,379       5,394       18 %     11,971       11,916       0 %     13 %
FAA/Airport
     2,809       1,580       78 %     4,564       3,384       35 %     5 %
 
                                          
Aerospace Total
     43,599       38,216       14 %     86,789       80,034       8 %     92 %
 
                                                        
Test Systems Segment
                                                        
Military
     3,490       8,808       (60 )%     7,236       17,005       (57 )%     8 %
 
                                          
 
                                                        
Total
   $ 47,089     $ 47,024       0 %   $ 94,025     $ 97,039       (3 )%     100 %
 
                                          
ASTRONICS CORPORATION
SALES BY PRODUCT
($, in thousands)
                                                         
    Three Months Ended     Six Months Ended     2010  
    7/3/2010     7/4/2009     % change     7/3/2010     7/4/2009     % change     YTD %  
 
                                                        
Aerospace Segment
                                                        
Cabin Electronics
   $ 19,087     $ 15,396       24 %   $ 40,583     $ 31,898       27 %     43 %
Aircraft Lighting
     17,586       15,879       11 %     33,319       33,930       (2 )%     35 %
Airframe Power
     4,117       5,361       (23 )%     8,323       10,822       (23 )%     9 %
Airfield Lighting
     2,809       1,580       78 %     4,564       3,384       35 %     5 %
 
                                          
 
                                                        
Aerospace Total
     43,599       38,216       14 %     86,789       80,034       8 %     92 %
 
                                                        
Test Systems Segment
     3,490       8,808       (60 )%     7,236       17,005       (57 )%     8 %
 
                                          
 
                                                        
Total
   $ 47,089     $ 47,024       0 %   $ 94,025     $ 97,039       (3 )%     100 %
 
                                          
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ASTRONICS CORPORATION
ORDER AND BACKLOG TREND
(Unaudited, $ in thousands)
                                                 
    Q1     Q2     Q3     Q4     Q1     Q2  
    2009     2009     2009     2009     2010     2010  
    4/4/2009     7/4/2009     10/3/2009     12/31/2009     4/3/2010     7/3/2010  
Sales
                                                
Aerospace
   $ 41,818     $ 38,216     $ 38,958     $ 36,613     $ 43,190     $ 43,599  
Test Systems
     8,197       8,808       9,628       8,963       3,746       3,490  
 
                                    
Total Sales
   $ 50,015     $ 47,024     $ 48,586     $ 45,576     $ 46,936     $ 47,089  
 
                                    
 
                                                
Bookings
                                                
Aerospace
   $ 28,016     $ 34,605     $ 40,135     $ 29,270     $ 50,668     $ 46,227  
Test Systems
     2,798       6,168       3,932       743       3,634       5,411  
 
                                    
Total Bookings
   $ 30,814     $ 40,773     $ 44,067     $ 30,013     $ 54,302     $ 51,638  
 
                                    
 
                                                
Backlog
                                                
Aerospace
   $ 85,418     $ 81,807     $ 82,983     $ 75,639     $ 83,116     $ 85,744  
Test Systems
     26,311       23,671       17,974       9,755       9,644       11,565  
 
                                    
Total Backlog
   $ 111,729     $ 105,478     $ 100,957     $ 85,394     $ 92,760     $ 97,309  
 
                                    
 
                                                
Book:Bill Ratio
                                                
Aerospace
     0.67       0.91       1.03       0.80       1.17       1.06  
Test Systems
     0.34       0.70       0.41       0.08       0.97       1.55  
 
                                    
Total Book:Bill
     0.62       0.87       0.91       0.66       1.16       1.10  
 
                                    
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