10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2013

Commission File Number 0-7087

Astronics Corporation

(Exact Name of Registrant as Specified in its Charter)

New York	16-0959303
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

130 Commerce Way, East Aurora, N.Y. 14052

(Address of principal executive office)

Registrant’s telephone number, including area code (716) 805-1599

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12 (g) of the Act:

$.01 par value Common Stock; $.01 par value Class B Stock

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

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 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  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer”, an “accelerated filer”, a “non-accelerated filer” and a “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨	Smaller Reporting Company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

As of January 31, 2014, 17,876,973 shares were outstanding, consisting of 13,589,794 shares of Common Stock $.01 Par Value and 4,287,179 shares of Class B Stock $.01 Par Value. The aggregate market value, as of the last business day of the Company’s most recently completed second fiscal quarter, of the shares of Common Stock and Class B Stock of Astronics Corporation held by non-affiliates was approximately $390,085,268 (assuming conversion of all of the outstanding Class B Stock into Common Stock and assuming the affiliates of the Registrant to be its directors, executive officers and persons known to the Registrant to beneficially own more than 10% of the outstanding capital stock of the Corporation).

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Company’s Proxy Statement for the 2014 Annual Meeting of Shareholders to be held May 13, 2014 are incorporated by reference into Part III of this Report.

Table of Contents

ASTRONICS CORPORATION

Index to Annual Report

on Form 10-K

Year Ended December 31, 2013

		Page
PART I
Item 1.	Business	4-6
Item 1A.	Risk Factors	6-10
Item 1B.	Unresolved Staff Comments	10
Item 2.	Properties	10
Item 3.	Legal Proceedings	11
Item 4.	Mine Safety Disclosures	11
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	12-13
Item 6.	Selected Financial Data	14
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14-27
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 8.	Financial Statements and Supplementary Data	28-59
Item 9.	Changes In and Disagreements with Accountants on Accounting and Financial Disclosure	60
Item 9A.	Controls and Procedures	60
Item 9B.	Other Information	60
PART III
Item 10.	Directors and Executive Officers of the Registrant	61
Item 11.	Executive Compensation	61
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters	61
Item 13.	Certain Relationships and Related Party Transactions and Director Independence	61
Item 14.	Principal Accountant Fees and Services	61
PART IV
Item 15.	Exhibits and Financial Statement Schedule	62-65

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FORWARD LOOKING STATEMENTS

This Annual Report contains certain forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involves uncertainties and risks. These statements are identified by the use of the “may,” “will,” “should,” “believes,” “expects,” “expected,” “intends,” “plans,” “projects,” “estimates,” “predicts,” “potential,” “outlook,” “forecast,” “anticipates,” “presume” and “assume,” and words of similar import. Readers are cautioned not to place undue reliance on these forward looking statements as various uncertainties and risks could cause actual results to differ materially from those anticipated in these statements. These uncertainties and risks include the success of the Company with effectively executing its plans; the timeliness of product deliveries by vendors and other vendor performance issues; changes in demand for our products from the U.S. government and other customers; the acceptance by the market of new products developed; our success in cross-selling products to different customers and markets; changes in government contracts; the state of the commercial and business jet aerospace market; the Company’s success at increasing the content on current and new aircraft platforms; the level of aircraft build rates; as well as other general economic conditions and other factors. Certain of these factors, risks and uncertainties are discussed in the sections of this report entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

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PART I

ITEM 1. BUSINESS

Astronics is a leading supplier of products to the aerospace and defense industries. Our products include advanced, high-performance lighting and safety systems, electrical power generation and distribution systems, aircraft structures, avionics products and other products for the global aerospace industry as well as test, training and simulation systems primarily for the military.

We have twelve primary locations; ten in the United States, one in Canada, and one in France. We design and build our products through our wholly owned subsidiaries Astronics Advanced Electronic Systems Corp. (“AES”); Astronics AeroSat Corporation (“AeroSat”); Ballard Technology, Inc. (“Ballard”); DME Corporation (“DME”); Luminescent Systems, Inc. (“LSI”); Luminescent Systems Canada, Inc. (“LSI Canada”); Max-Viz, Inc. (“Max-Viz”); Peco, Inc. (“Peco”) PGA Electronic s.a. (“PGA”) and Astronics Test Systems, Inc. We have two reportable segments, Aerospace and Test Systems.

On May 28, 2013 Astronics entered into a Stock Purchase Agreement to acquire all of the outstanding capital stock of Peco. The acquisition was completed on July 18, 2013. Peco designs and manufactures highly engineered commercial aerospace interior components and systems for the aerospace industry. Peco is a member of our Aerospace segment.

On October 1, 2013 Astronics acquired certain assets and liabilities from AeroSat Corporation and related entities, a manufacturer of fuselage and tail-mounted antenna systems for commercial transport, business jet, and military aircraft. AeroSat is a member of our Aerospace segment.

On November 4, 2013, the company entered into a sale agreement and a guarantee agreement to acquire all of the outstanding capital stock of PGA. The purchase price was paid with a combination of cash and Astronics’ stock. The acquisition was completed on December 5, 2013. PGA designs and manufactures seat motion and lighting systems primarily for business and first class aircraft seats and is Europe’s leading provider of in-flight entertainment/communication systems as well as cabin management systems for private VVIP aircraft. PGA is a member of our Aerospace segment.

On February 28, 2014, Astronics acquired, through a wholly owned subsidiary Astronics Test Systems, Inc. (“ATS”), certain assets and liabilities of EADS North America’s Test and Services division, located in Irvine, California. ATS is a leading provider of highly engineered automatic test systems, subsystems and instruments for semi-conductor and consumer electronics products to both the commercial and defense industries. ATS will be reported as a member of our Test Systems segment.

Products and Customers

Our Aerospace segment designs and manufactures products for the global aerospace industry. Product lines include lighting and safety systems, electrical power generation, distribution and motions systems, aircraft structures, avionics products and other products. Our Aerospace customers are the airframe manufacturers (OEM’s) that build aircraft for the commercial, military and general aviation markets, suppliers to those OEM’s, aircraft operators such as airlines and branches of the U.S. Department of Defense as well as the Federal Aviation Administration and airport operators. During 2013, this segment’s sales were divided 72% to the commercial transport market, 15% to the military aircraft market, 9% to the business jet market and 4% to other markets. Most of this segment’s sales are a result of contracts or purchase orders received from customers, placed on a day-to-day basis or for single year procurements rather than long-term multi-year contract commitments. On occasion the Company does receive contractual commitments or blanket purchase orders from our customers covering multiple year deliveries of hardware to our customers.

Including the acquisition of ATS, our Test Systems segment designs, develops, manufactures and maintains automatic test systems that support the semiconductor, aerospace, communications and weapons test systems as well as training and simulation devices for both commercial and military applications. In the Test Systems Segment, Astronics’ products are sold to a global customer base including OEMs and prime government contractors for both consumer electronics and military products.

During 2013, and before the acquisition of ATS, this segment’s sales were all to the military markets. This segment’s revenue is recognized at time of shipment and transfer of title and from long-term, primarily fixed price contracts using the percentage of completion method of accounting, measured by multiplying the estimated total contract value by the ratio of actual contract costs incurred to date to the estimated total contract costs. We make significant estimates involving usage of percentage-of-completion accounting to recognize contract revenues. We periodically review contracts in process for estimates-to-completion, and revise estimated gross profit accordingly. While we believe our estimated gross profit on contracts in process is reasonable, unforeseen events and changes in circumstances can take place in a subsequent accounting period that may cause us to revise our estimated gross profit on one or more of our contracts in process. Accordingly, the ultimate gross profit realized upon completion of such contracts can vary significantly from estimated amounts between accounting periods.

Sales by Segment, Geographic Region, Major Customer and Foreign Operations are provided in Note 18 of Item 8, Financial Statements and Supplementary Data in this report.

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We have a significant concentration of business with two major customers, Panasonic Avionics Corporation and the Boeing Company. Sales to Panasonic Avionics accounted for 29.6% of sales in 2013, 38.0% of sales in 2012 and 35.7% of sales in 2011. Accounts receivable from this customer at December 31, 2013 and 2012 were $14.1 million and $17.4 million, respectively. Sales to the Boeing Company accounted for 14.5% of sales in 2013, 5.5% of sales in 2012 and 4.4% of sales in 2011. Accounts receivable from this customer at December 31, 2013 and 2012 were $6.5 million and $1.9 million, respectively.

Strategy

Our strategy is to develop and maintain positions of technical leadership in our chosen aerospace and defense markets, leveraging those positions to grow the amount of content and volume of product sold to those markets and to selectively acquire businesses that could benefit from our leadership position and strategic direction.

Practices as to Maintaining Working Capital

Liquidity is discussed in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in the Liquidity section of this report.

Competitive Conditions

We experience considerable competition in the market sectors we serve, principally with respect to product performance and price, from various competitors, many of which are substantially larger and have greater resources. Success in the markets we serve depends upon product innovation, customer support, responsiveness, and cost management. We continue to invest in developing the technologies and engineering support critical to competing in our markets.

Government Contracts

All U.S. Government contracts, including subcontracts where the U.S. Government is the ultimate customer, may be subject to termination at the election of the government. Our revenue stream relies on military spending. Approximately 17% of our consolidated sales were made to the military aircraft and military test systems markets combined.

Raw Materials

Materials, supplies and components are purchased from numerous sources. We believe that the loss of any one source, although potentially disruptive in the short-term, would not materially affect our operations in the long-term.

Seasonality

Our business is typically not seasonal.

Backlog

At December 31, 2013, our backlog was $214.2 million. At December 31, 2012, our backlog was $114.5 million. Backlog in the Aerospace segment was $207.1 million of which $199.3 million is expected to be realized in 2014. Backlog in the Test Systems segment was $7.1 million at December 31, 2013 of which $4.9 million is expected to be realized in 2014.

Patents

We have a number of patents. While the aggregate protection of these patents is of value, our only material business that is dependent upon the protection afforded by these patents is our cabin power distribution products. Our patents and patent applications relate to electroluminescence, instrument panels, keyboard technology and a broad patent covering the cabin power distribution technology. We regard our expertise and techniques as proprietary and rely upon trade secret laws and contractual arrangements to protect our rights. We have trademark protection in major markets.

Research, Development and Engineering Activities

We are engaged in a variety of engineering and design activities as well as basic research and development activities directed to the substantial improvement or new application of our existing technologies. These costs are expensed when incurred and included in cost of sales. Research, development and engineering costs amounted to approximately $52.8 million in 2013, $44.9 million in 2012 and $36.1 million in 2011.

Employees

We employed 1,715 employees as of December 31, 2013. We consider our relations with our employees to be good. None of our employees are subject to collective bargaining agreements except for the hourly workforce at Peco.

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Stock Distribution

On September 27, 2013, the Company announced a one-for-five distribution of Class B Stock to holders of both Common and Class B Stock. Stockholders received one share of Class B Stock for every five shares of Common and Class B Stock held on the record date of October 10, 2013. Fractional shares were paid in cash. All share quantities, share prices and per share data reported throughout this report have been adjusted to reflect the impact of this distribution.

Available information

We file our financial information and other materials as electronically required by the SEC with the SEC. These materials can be accessed electronically via the Internet at www.sec.gov. Such materials and other information about the Company are also available through our website at www.astronics.com.

ITEM 1A. RISK FACTORS

The loss of Panasonic Avionics Corporation or the Boeing Company as major customers or a significant reduction in sales to either or both of those two customers would reduce our sales and earnings. In 2013 we had a concentration of sales to Panasonic representing approximately 29.6% of our sales and to the Boeing Company representing approximately 14.5% of our sales. The loss of one or both of these customers or a significant reduction in sales to them would significantly reduce our sales and earnings.

The amount of debt we have outstanding, as well as any debt we may incur in the future, could have an adverse effect on our operational and financial flexibility. As of December 31, 2013, we had approximately $200.3 million of debt outstanding, of which $188.0 million is long-term debt. Changes to our level of debt subsequent to December 31, 2013 could have significant consequences to our business, including the following:

• Depending on interest rates and debt maturities, a substantial portion of our cash flow from operations could be dedicated to paying principal and interest on our debt, thereby reducing funds available for our acquisition strategy, capital expenditures or other purposes;

• A significant amount of debt could make us more vulnerable to changes in economic conditions or increases in prevailing interest rates;

• Our ability to obtain additional financing for acquisitions, capital expenditures or for other purposes could be impaired;

• The increase in the amount of debt we have outstanding increases the risk of non-compliance with some of the covenants in our debt agreements which require us to maintain specified financial ratios; and

• We may be more leveraged than some of our competitors, which may result in a competitive disadvantage.

We are subject to debt covenant restrictions. Our credit facility contains several financial and other restrictive covenants. A significant decline in our operating income could cause us to violate our covenants. A covenant violation would require a waiver by the lenders or an alternative financing arrangement be achieved. This could result in our being unable to borrow under our bank credit facility or being obliged to refinance and renegotiate the terms of our bank indebtedness. Historically both choices have been available to us however it is difficult to predict the availability of these options in the future.

Our future operating results could be impacted by estimates used to calculate impairment losses on long term assets. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires Management to make significant and subjective estimates and assumptions that may affect the reported amounts of long term assets in the financial statements. These estimates are integral in the determination of whether a potential impairment loss exists as well as the calculation of that loss. Actual future results could differ from those estimates.

A write-off of all or part of our goodwill or other intangible assets could adversely affect our operating results and net worth. At December 31, 2013, goodwill and purchased intangible assets were approximately 20.9% and approximately 20.6% of our total assets respectively. Our goodwill and other intangible assets may increase in the future since our strategy includes growing through acquisitions. We may have to write off all or part of our goodwill or purchased intangible assets if their value becomes impaired. Although this write-off would be a non-cash charge, it could reduce our earnings and net worth significantly.

The markets we serve are cyclical and sensitive to domestic and foreign economic conditions and events, which may cause our operating results to fluctuate. In our Aerospace segment, demand by the business jet markets for our products is dependent upon several factors, including capital investment, product innovations, economic growth and wealth creation, and technology upgrades. In addition, the commercial airline industry is highly cyclical and sensitive to fuel price increases, labor disputes, global economic conditions, availability of capital to fund new aircraft purchases and upgrades of existing aircraft and passenger demand. A change in any of these factors could result in a reduction in the amount of air travel and the ability of airlines to invest in new aircraft or to upgrade existing aircraft. These factors would reduce orders for new aircraft and would likely reduce airlines spending for cabin upgrades for which we supply products, thus reducing our sales and profits. A reduction in air travel may also result in our commercial airline customers being unable to pay our invoices on a timely basis or not at all.

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We are a supplier on various new aircraft programs just entering or expected to begin production in the future such as the Boeing 787, F-35 Joint Strike Fighter and Lear 85. As with any new program there is risk as to whether the aircraft or program will be successful and accepted by the market. As is customary for our business we purchase inventory and invest in specific capital equipment to support our production requirements generally based on delivery schedules provided by our customer. If a program or aircraft is not successful we may have to write off all or a part of the inventory, accounts receivable and capital equipment related to the program. A write off of these assets could result in a significant reduction of earnings and cause covenant violations relating to our debt agreements. This could result in our being unable to borrow additional funds under our bank credit facility or being obliged to refinance or renegotiate the terms of our bank indebtedness.

In our Test Systems segment, demand for our products is dependent upon several factors, including government funding levels for our products, our ability to compete successfully for those contracts and our ability to develop products to satisfy the demands of our customers. A change in any of these factors could result in a reduction of our sales and profits.

Our products are sold in highly competitive markets. Some of our competitors are larger; more diversified corporations and have greater financial, marketing, production and research and development resources. As a result, they may be better able to withstand the effects of periodic economic downturns. Our operations and financial performance will be negatively impacted if our competitors:

• Develop products that are superior to our products;

• Develop products that are more competitively priced than our products;

• Develop methods of more efficiently and effectively providing products and services or

• Adapt more quickly than we do to new technologies or evolving customer requirements.

We believe that the principal points of competition in our markets are product quality, price, design and engineering capabilities, product development, conformity to customer specifications, quality of support after the sale, timeliness of delivery and effectiveness of the distribution organization. Maintaining and improving our competitive position will require continued investment in manufacturing, engineering, quality standards, marketing, customer service and support and our distribution networks. If we do not maintain sufficient resources to make these investments, or are not successful in maintaining our competitive position, our operations and financial performance will suffer.

Our future success depends to a significant degree upon the continued contributions of our management team and technical personnel. The loss of members of our management team could have a material and adverse effect on our business. In addition, competition for qualified technical personnel in our industry is intense, and we believe that our future growth and success will depend on our ability to attract, train and retain such personnel.

Future terror attacks, war, or other civil disturbances could negatively impact our business. Continued terror attacks, war or other disturbances could lead to further economic instability and decreases in demand for our products, which could negatively impact our business, financial condition and results of operations. Terrorist attacks world-wide have caused instability from time to time in global financial markets and the aviation industry. The long-term effects of terrorist attacks on us are unknown. These attacks and the U.S. Government’s continued efforts against terrorist organizations may lead to additional armed hostilities or to further acts of terrorism and civil disturbance in the United States or elsewhere, which may further contribute to economic instability.

Our inability to adequately enforce and protect our intellectual property or defend against assertions of infringement could prevent or restrict our ability to compete. We rely on patents, trademarks and proprietary knowledge and technology, both internally developed and acquired, in order to maintain a competitive advantage. Our inability to defend against the unauthorized use of these rights and assets could have an adverse effect on our results of operations and financial condition. Litigation may be necessary to protect our intellectual property rights or defend against claims of infringement. This litigation could result in significant costs and divert our management’s focus away from operations.

If we are unable to adapt to technological change, demand for our products may be reduced. The technologies related to our products have undergone, and in the future may undergo, significant changes. To succeed in the future, we will need to continue to design, develop, manufacture, assemble, test, market and support new products and enhancements on a timely and cost effective basis. Our competitors may develop technologies and products that are more effective than those we develop or that render our technology and products obsolete or uncompetitive. Furthermore, our products could become unmarketable if new industry standards emerge. We may have to modify our products significantly in the future to remain competitive, and new products we introduce may not be accepted by our customers.

Our new product development efforts may not be successful, which would result in a reduction in our sales and earnings. We may experience difficulties that could delay or prevent the successful development of new products or product enhancements, and new products or product enhancements may not be accepted by our customers. In addition, the development expenses we incur may exceed our cost estimates, and new products we develop may not generate sales sufficient to offset our costs. If any of these events occur, our sales and profits could be adversely affected.

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We depend on government contracts and subcontracts with defense prime contractors and sub-contractors that may not be fully funded, may be terminated, or may be awarded to our competitors. The failure to be awarded these contracts or failure to receive funding or the termination of one or more of these contracts could reduce our sales. Sales to the U.S. Government and its prime contractors and subcontractors represent a significant portion of our business. The funding of these programs is generally subject to annual congressional appropriations, and congressional priorities are subject to change. In addition, government expenditures for defense programs may decline or these defense programs may be terminated. A decline in governmental expenditures or the termination of existing contracts may result in a reduction in the volume of contracts awarded to us. We have resources applied to specific government contracts and if any of those contracts were terminated, we may incur substantial costs redeploying those resources.

If our subcontractors or suppliers fail to perform their contractual obligations, our prime contract performance and our ability to obtain future business could be materially and adversely impacted. Many of our contracts involve subcontracts with other companies upon which we rely to perform a portion of the services we must provide to our customers. There is a risk that we may have disputes with our subcontractors, including disputes regarding the quality and timeliness of work performed by the subcontractor or customer concerns about the subcontractor. Failure by our subcontractors to satisfactorily provide on a timely basis the agreed-upon supplies or perform the agreed-upon services may materially and adversely impact our ability to perform our obligations with our customer. Subcontractor performance deficiencies could result in a customer terminating our contract for default. A default termination could expose us to liability and substantially impair our ability to compete for future contracts and orders. In addition, a delay in our ability to obtain components and equipment parts from our suppliers may affect our ability to meet our customers’ needs and may have an adverse effect upon our profitability.

Our results of operations are affected by our fixed-price contracts, which could subject us to losses in the event that we have cost overruns. For the year ended December 31, 2013, fixed-price contracts represented almost all of the Company’s sales. On fixed-price contracts, we agree to perform the scope of work specified in the contract for a predetermined price. Depending on the fixed price negotiated, these contacts may provide us with an opportunity to achieve higher profits based on the relationship between our costs and the contract’s fixed price. However, we bear the risk that increased or unexpected costs may reduce our profit.

Some of our contracts contain late delivery penalties. Failure to deliver in a timely manner due to supplier problems, development schedule slides, manufacturing difficulties, or similar schedule related events could have a material adverse effect on our business.

The failure of our products may damage our reputation, necessitate a product recall or result in claims against us that exceed our insurance coverage, thereby requiring us to pay significant damages. Defects in the design and manufacture of our products may necessitate a product recall. We include complex system design and components in our products that could contain errors or defects, particularly when we incorporate new technology into our products. If any of our products are defective, we could be required to redesign or recall those products or pay substantial damages or warranty claims. Such an event could result in significant expenses, disrupt sales and affect our reputation and that of our products. We are also exposed to product liability claims. We carry aircraft and non-aircraft product liability insurance consistent with industry norms. However, this insurance coverage may not be sufficient to fully cover the payment of any potential claim. A product recall or a product liability claim not covered by insurance could have a material adverse effect on our business, financial condition and results of operations.

Changes in discount rates and other estimates could affect our future earnings and equity. Pension obligations and the related costs are determined using actual results and actuarial valuations that involve several assumptions. The most critical assumption is the discount rate. Other assumptions include salary increases and retirement age. The discount rate assumptions are based on current market conditions and are outside of our control. Changes in these assumptions could affect our future earnings and equity.

We are subject to financing and interest rate exposure risks that could adversely affect our business, liquidity and operating results. Changes in the availability, terms and cost of capital, increases in interest rates or a reduction in credit rating could cause our cost of doing business to increase and place us at a competitive disadvantage. At December 31, 2013, approximately 4% of our debt was at fixed interest rates with the remaining percentage subject to variable interest rates.

Contracting in the defense industry is subject to significant regulation, including rules related to bidding, billing and accounting kickbacks and false claims, and any non-compliance could subject us to fines and penalties or possible debarment. Like all government contractors, we are subject to risks associated with this contracting. These risks include the potential for substantial civil and criminal fines and penalties. These fines and penalties could be imposed for failing to follow procurement integrity and bidding rules, employing improper billing practices or otherwise failing to follow cost accounting standards, receiving or

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paying kickbacks or filing false claims. We have been, and expect to continue to be, subjected to audits and investigations by government agencies. The failure to comply with the terms of our government contracts could harm our business reputation. It could also result in suspension or debarment from future government contracts.

If we fail to meet expectations of securities analysts or investors due to fluctuations in our revenue or operating results, our stock price could decline significantly. Our revenue and earnings may fluctuate from quarter to quarter due to a number of factors, including delays or cancellations of programs. It is likely that in some future quarters our operating results may fall below the expectations of securities analysts or investors. In this event, the trading price of our stock could decline significantly. Our operations in foreign countries expose us to political and currency risks and adverse changes in local legal and regulatory environments.

Our operations in foreign countries expose us to political and currency risks and adverse changes in local legal and regulatory environments. In addition, our domestic operations have sales to foreign customers. In 2013, approximately 13.2% of our sales were to customers outside of the United States. Our financial results may be adversely affected by fluctuations in foreign currencies and by the translation of the financial statements of our foreign subsidiaries from local currencies into U.S. dollars. We expect international operations and export sales to continue to contribute to our earnings for the foreseeable future. Both the sales from international operations and export sales are subject in varying degrees to risks inherent in doing business outside of the United States. Such risks include the possibility of unfavorable circumstances arising from host country laws or regulations, changes in tariff and trade barriers and import or export licensing requirements, and political or economic reprioritization, insurrection, civil disturbance or war.

Government regulations could limit our ability to sell our products outside the United States and could otherwise adversely affect our business. In 2013, approximately 11.5% of our sales were subject to compliance with the United States export regulations. Our failure to obtain, or fully adhere to the limitations contained in, the requisite licenses, meet registration standards or comply with other government export regulations would hinder our ability to generate revenues from the sale of our products outside the United States. Compliance with these government regulations may also subject us to additional fees and operating costs. The absence of comparable restrictions on competitors in other countries may adversely affect our competitive position. In order to sell our products in European Union countries, we must satisfy certain technical requirements. If we are unable to comply with those requirements with respect to a significant quantity of our products, our sales in Europe would be restricted. Doing business internationally also subjects us to numerous U.S. and foreign laws and regulations, including regulations relating to import-export control, technology transfer restrictions, foreign corrupt practices and anti-boycott provisions. Our failure, or failure by an authorized agent or representative that is attributable to us, to comply with these laws and regulations could result in administrative, civil or criminal liabilities and could, in the extreme case, result in monetary penalties, suspension or debarment from government contracts or suspension of our export privileges, which would have a material adverse effect on us.

Our stock price is volatile. For the year ended December 31, 2013, our stock price ranged from a low of $18.99 to a high of $52.99. The price of our common stock has been and likely will continue to be subject to wide fluctuations in response to a number of events and factors, such as:

• quarterly variations in operating results;

• variances of our quarterly results of operations from securities analyst estimates;

• changes in financial estimates;

• announcements of technological innovations, new products; and

• news reports relating to trends in our markets.

In addition, the stock market in general, and the market prices for companies in the aerospace industry in particular, have experienced significant price and volume fluctuations that often have been unrelated to the operating performance of the companies affected by these fluctuations. These broad market fluctuations may adversely affect the market price of our common stock, regardless of our operating performance.

We may incur losses and liabilities as a result of our acquisition strategy. Growth by acquisition involves risks that could adversely affect our financial condition and operating results, including:

• diversion of management time and attention from our core business,

• the potential exposure to unanticipated liabilities,

• the potential that expected benefits or synergies are not realized and that operating costs increase,

• the risks associated with incurring additional acquisition indebtedness, including that additional indebtedness could limit our cash flow availability for operations and our flexibility,

• difficulties in integrating the operations and personnel of acquired companies, and

• the potential loss of key employees, suppliers or customers of acquired businesses.

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In addition, any acquisition, once successfully integrated, could negatively impact our financial performance if it does not perform as planned, does not increase earnings, or does not prove otherwise to be beneficial to us.

We currently are involved or may become involved in the future, in legal proceedings that, if adversely adjudicated or settled, could materially impact our financial condition. As an aerospace company, we may become a party to litigation in the ordinary course of our business, including, among others, matters alleging product liability, warranty claims, breach of commercial or government contract or other legal actions. In general, litigation claims can be expensive and time consuming to bring or defend against and could result in settlements or damages that could significantly impact results of operations and financial condition.

We are a defendant in an action filed in the Regional State Court of Mannheim, Germany (Lufthansa Technik AG v. Astronics Advanced Electronics Systems Corp.) relating to an allegation of patent infringement. The damages sought include injunctive relief, as well as monetary damages. We dispute the allegation and are vigorously defending ourselves in this action. We have filed a nullity action with the Federal Patent Court in Munich, Germany, requesting the court to revoke the German part of the European patent that is subject to the claim. In November 2011, the Regional State Court of Manheim, Germany, issued an interim decision to the effect that the infringement litigation proceedings be stayed until the Federal Patent Court decides on the concurrent nullity action. In February 2014, The Federal Patent Court issued a written judgment upholding the validity of a portion of the patent. This judgment is subject to appeal. However, as a result the judgment proclaimed by The Federal Patent Court the stay of the infringement litigation proceedings is no longer effective. At this time we are unable to provide a reasonable estimate of our potential liability or the potential amount of loss related to this action, if any. If the outcome of this litigation is adverse to us, our results and financial condition could be materially affected.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None

ITEM 2. PROPERTIES

On December 31, 2013, we occupied 759,000 square feet of space in the United States, Canada, and France, distributed as follows:

	Owned		Leased		Total
Aerospace:
East Aurora, NY		125,000		—		125,000
Ft. Lauderdale, FL		96,000		—		96,000
Kirkland, WA		92,000		7,600		99,600
Lebanon, NH		80,000		—		80,000
Portland, OR		—		155,000		155,000
Montierchaume, France		—		92,000		92,000
Montreal, Quebec, Canada		—		25,300		25,300
Everett, WA		—		16,000		16,000
Amherst, NH		—		14,500		14,500
Portland, OR		—		3,500		3,500
Hillsboro, OR		—		1,100		1,100
Aerospace Square Feet		393,000		315,000		708,000
Test Systems
Orlando, FL		—		51,000		51,000
Test Systems Square Feet		—		51,000		51,000
Total Square Feet		393,000		366,000		759,000

Our corporate headquarters is located in East Aurora, New York. The lease for the AES Kirkland warehouse facility expires in March, 2016. The lease for the PGA Montierchaume facility is a capital lease that will expire in December, 2018. At the end of the lease, title to this building will transfer to PGA. The lease for the LSI Canada facility in Montreal expires in July, 2018. The lease for the Ballard Everett facility expires in September, 2014. The lease for the AeroSat Amherst facility expires in July, 2015. The lease for the Max-Viz Portland facility expires in January, 2016. The lease for the Max-Viz Hillsboro facility expires in February, 2014 and is renewed annually. The lease for the DME Orlando facility expires in February, 2015 with one renewal option for seven years. Upon the expiration of our current leases, we believe that we will be able to either secure renewal terms or enter into leases for alternative locations at market terms. We believe that our properties have been adequately maintained and are generally in good condition.

In January 2014, Peco purchased two facilities totaling 233,000 square feet in Clackamas, Oregon for approximately $14.5 million and expects to invest an additional $7.0 million into the buildings before moving its operations into the buildings by the end of the fourth quarter of 2014. The leases on our two existing buildings expire in June, 2015 and June, 2017. Peco has given notice of termination on these two building leases.

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ITEM 3. LEGAL PROCEEDINGS

The Company is subject to various legal proceedings, claims, and litigation arising in the ordinary course of business. While the outcome of these matters is currently not determinable, we do not expect these matters will have a material adverse effect on our business, financial position, results of operations, or cash flows. However, the results of these matters cannot be predicted with certainty. Should the Company fail to prevail in any legal matter or should several legal matters be resolved against the Company in the same reporting period, then the financial results of that particular reporting period could be materially adversely affected.

We are a defendant in an action filed in the Regional State Court of Mannheim, Germany (Lufthansa Technik AG v. Astronics Advanced Electronics Systems Corp.) relating to an allegation of patent infringement. The damages sought include injunctive relief, as well as monetary damages. We dispute the allegation and are vigorously defending ourselves in this action. We have filed a nullity action with the Federal Patent Court in Munich, Germany, requesting the court to revoke the German part of the European patent that is subject to the claim. In November 2011, the Regional State Court of Manheim, Germany, issued an interim decision to the effect that the infringement litigation proceedings be stayed until the Federal Patent Court decides on the concurrent nullity action. In February 2014, The Federal Patent Court issued a written judgment upholding the validity of a portion of the patent. This judgment is subject to appeal. However, as a result the judgment proclaimed by The Federal Patent Court the stay of the infringement litigation proceedings is no longer effective. At this time we are unable to provide a reasonable estimate of our potential liability or the potential amount of loss related to this action, if any. If the outcome of this litigation is adverse to us, our results and financial condition could be materially affected.

Other than this proceeding, we are not party to any significant pending legal proceedings that management believes will result in material adverse effect on our financial condition or results of operations.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The table below sets forth the range of prices for the Company’s Common Stock, traded on the NASDAQ National Market System, for each quarterly period during the last two years. The approximate number of shareholders of record as of January 31, 2014, was 905 for Common Stock and 1,298 for Class B Stock.

2013	High		Low
First	$	24.85	$	18.99
Second		34.21		21.16
Third		42.37		32.23
Fourth		52.99		38.86

2012	High		Low
First	$	26.52	$	26.74
Second		25.50		17.86
Third		22.63		19.66
Fourth		22.31		16.54

The Company has not paid any cash dividends in the three-year period ended December 31, 2013. The Company has no plans to pay cash dividends as it plans to retain all cash from operations as a source of capital to finance growth in the business.

On September 27, 2013, the Company announced a twenty percent distribution of Class B Stock to holders of both Common and Class B Stock. Stockholders received one share of Class B Stock for every five shares of Common and Class B Stock held on the record date of October 10, 2013. Fractional shares were paid in cash. All share quantities, share prices and per share data reported throughout this report have been adjusted to reflect the impact of this distribution.

With respect to information regarding our securities authorized for issuance under equity incentive plans, the information contained in the section entitled “Equity Compensation Plan Information” of our definitive Proxy Statement for the 2014 Annual Meeting of Shareholders is incorporated herein by reference.

The Company repurchased and subsequently retired approximately 4,073 shares of common stock in conjunction with the exercise of stock options in 2013. In October of 2012, all shares held in the treasury were permanently retired.

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The following graph charts the annual percentage change in return on the Company’s common stock compared to the S&P 500 Index — Total Return and the NASDAQ US and Foreign Securities:

		2008		2009		2010		2011		2012		2013
Astronics Corp.	Return %		—		-3.93		145.61		85.02		-27.61		122.90
	Cum $		100.00		96.07		235.96		436.57		316.05		704.48
S&P 500 Index - Total Returns	Return %		—		26.46		15.06		2.11		16.00		32.39
	Cum $		100.00		126.46		145.51		148.59		172.37		228.19
NASDAQ Stock Market (US and Foreign Companies)	Return %		—		45.32		18.02		-0.85		17.41		40.11
	Cum $		100.00		145.32		171.51		170.05		199.67		279.75

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ITEM 6. SELECTED FINANCIAL DATA

Five-Year Performance Highlights

	2013(6)			2012(5)			2011 (4)			2010			2009(3)
(Amounts in thousands, except for employee and per share data)
PERFORMANCE:
Sales	$	339,937		$	266,446		$	228,163		$	195,754		$	191,201
Impairment Loss (2)	$	—		$	—		$	(2,500	)	$	—		$	(19,381	)
Net Income (Loss)	$	27,266		$	21,874		$	21,591		$	14,948		$	(3,802	)
Net Margin		8.0	%		8.2	%		9.5	%		7.6	%		(2.0	)%
Diluted Earnings (Loss) per Share (1)	$	1.49		$	1.20		$	1.21		$	0.88		$	(0.23	)
Weighted Average Shares Outstanding – Diluted (1)		18,359			18,157			17,817			17,129			16,292
Return on Average Equity		18.4	%		19.2	%		24.0	%		21.8	%		(6.4	)%
YEAR-END FINANCIAL POSITION:
Working Capital	$	125,961		$	60,042		$	58,833		$	65,855		$	52,857
Total Assets	$	491,271		$	211,989		$	174,905		$	150,888		$	138,714
Indebtedness	$	200 320		$	29,983		$	33,263		$	38,578		$	44,776
Shareholders’ Equity	$	171,509		$	125,134		$	102,863		$	77,215		$	60,113
Book Value Per Share (1)	$	9.61		$	7.21		$	6.04		$	4.65		$	3.68
OTHER YEAR-END DATA:
Depreciation and Amortization	$	11,059		$	6,905		$	4,943		$	4,881		$	7,342
Capital Expenditures	$	6,868		$	16,720		$	14,281		$	3,568		$	2,466
Shares Outstanding (1)		17,858			17,353			17,124			16,618			16,357
Number of Employees		1,715			1,156			1,081			1,010			1,035

(1) - Diluted Earnings (Loss) Per-Share, Weighted Average Shares Outstanding-Diluted, Book Value Per-Share and Shares Outstanding have been adjusted for the impact of the September 27, 2013 twenty percent Class B Stock distribution, the October 15, 2012 three-for-twenty Class B stock distribution and the August 16, 2011 one-for-ten Class B stock distribution.

(2) - The Company recorded a $2.4 million goodwill impairment charge and a $0.1 million impairment charge to purchased intangible assets during the fourth quarter of 2011. The Company recorded a $14.2 million goodwill impairment charge and a $5.2 million impairment charge to purchased intangible assets during the fourth quarter of 2009. Refer to “Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition” and Notes 4 and 5 of our consolidated financial statements for additional information on Intangible Assets and Goodwill.

(3) - Information includes the results of DME, acquired on January 30, 2009, from the acquisition date forward.

(4) - Information includes the results of Ballard, acquired on November 30, 2011, from the acquisition date forward.

(5) - Information includes the results of Max-Viz, acquired on July 30, 2012, from the acquisition date forward.

(6) - Information includes the results of Peco, acquired on July 18, 2013, AeroSat acquired on October 1, 2013 and PGA acquired December 5, 2013, each from the acquisition date forward.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

Astronics Corporation, through its subsidiaries, designs and manufactures advanced, high-performance lighting and safety systems, electrical power generation and distribution systems, aircraft structures, avionics products and other products for the global aerospace industry as well as test, training and simulation systems primarily for military markets. On February 28, 2014 we completed the acquisition of substantially all of the assets and liabilities of EADS North America’s Test and Services division which will be included in our Test Systems segment in the future.

Our strategy is to invest significantly in engineering, research and development to develop and maintain positions of technical leadership. We expect to leverage those positions to increase our ship set content, growing the amount of content and volume of products we sell and to selectively acquire businesses with similar technical capabilities.

We have two reportable segments, Aerospace and Test Systems. Our Aerospace segment has ten principal operating facilities located in New York State, Florida, two in New Hampshire, two in Oregon, two in Washington State, Quebec, Canada and Montierchaume, France. Our Test Systems segment has facilities located in Florida and California.

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Our Aerospace segment’s product lines in the tabular presentation found later in this MD&A have been reorganized compared to our historical presentation in prior years. The following table maps prior reported product lines to our current reported product lines.

New Product Line
Electrical Power & Motion	-	Includes Cabin Electronics, Airframe Power and PGA Seat Motion Products
Lighting & Safety	-	Includes Aircraft Lighting and Peco Safety Products (PSUs) and PGA Cabin Lighting Products
Avionics	-	Includes Avionics, AeroSat Satellite Antenna Products and PGA In-Flight Entertainment and Cabin Control Products
Structures	-	Includes Peco Structures Products (fuel access doors and diffusers)
Other	-	Includes Airfield Lighting and Other Peco Products

Our Aerospace segment serves four primary markets. They are the military, commercial transport, business jet and other. The Test systems segment serves the military and defense markets. With the addition of ATS in 2014, the Test Systems segment will also serve the commercial electronics and semi-conductor markets.

Commercial Transport Market

Sales to the commercial transport market include sales of electrical power & motion products, lighting & safety products, structures products and avionics products. Sales to this market totaled approximately $237.7 million or 70% of our consolidated sales in 2013, up $58.7 million or 32.7% from 2012.

Sales of electrical power & motion products, which provide in-seat power for airline passengers, airframe power management products, power for in-flight entertainment systems (IFE) and passenger seat motion products found on commercial airlines around the world. Sales to this market were $174.0 million or 51.2% of our consolidated sales, up $23.3 million from 2012, due primarily to increased product sales volume.

Lighting & safety products supplied to the commercial transport market were approximately $52.8 million or 15.5% in 2013, up $29.3 million from 2012 due primarily to the sales of Peco and PGA both acquired in 2013 which added $26.4 million.

Structures sales of $6.3 million were all due to the sales of Peco fuel access doors and diffusers.

Sales of avionics products to this market were $4.6 million.

Maintaining and growing our sales to the commercial transport market will depend on airlines capital spending budgets for cabin up-grades as well as the purchase of new aircraft such as the Boeing 787, Airbus A380 and Airbus A350. This spending by the airlines is impacted by their profits, cash flow and available financing as well as competitive pressures between the airlines to improve the travel experience for their passengers. We expect that these new aircraft, once in production will be equipped with more IFE and in-seat power than previous generation aircraft. Our ability to maintain and grow sales to this market depends on our ability to maintain our technological advantages over our competitors and maintain our relationships with major IFE suppliers and global airlines.

Military Aerospace Market

Sales to the military aerospace market include sales of lighting & safety products, avionics products, electrical power & motion products and other products. Sales to this market totaled approximately 14% of our consolidated revenue in 2013 and amounted to $48.7 million in 2013, up $12.1 million or 33.3% from 2012.

Sales of lighting & safety products to the military aircraft market were approximately $31.2 million in 2013, up $6.2 million from 2012, due primarily to higher volume of sales of our organic lighting and safety products.

Sales of avionics products to the military amounted to approximately $9.2 million in 2013, up $1.9 million from 2012 due primarily to higher volume of sales of our organic avionics products.

Sales of our electrical power & motion products to the military, which are primarily airframe power products, accounted for approximately $7.6 million of our sales to this market, up $3.4 million from 2012, due primarily to a higher volume of sales of our organic electrical power products.

Sales of other products to the military were all due to the addition of Peco.

The military market is dependent on governmental funding which can change from year to year. Risks are that overall spending may be reduced in the future, specific programs may be eliminated or that we fail to win new business through the competitive bid process. Astronics does not have significant reliance on any one program such that cancellation of a particular program will cause material financial loss. We believe that we will continue to have opportunities similar to past years regarding this market.

15

Business Jet Market

Sales to the business jet aerospace market include sales of lighting & safety products, avionics products, and electrical power & motion products. Sales to this market totaled approximately 9% of our consolidated revenue in 2013 and amounted to $29.8 million. Sales to the business jet market are driven by our ship set content on new aircraft and build rates of new aircraft. Business jet OEM build rates continue to be significantly impacted by slow global wealth creation and corporate profitability which have been negatively affected during the past several years by the slow recovery from the global recession. Our sales to the business jet market will continue to be challenged in the upcoming year as business jet aircraft production rates are not expected to increase significantly during 2014 as the global economy continues to struggle. Additionally, there continues to be a large supply of high quality used aircraft in the market competing with new aircraft for customers. Despite the current market conditions, we continue to see opportunities on new aircraft currently in the design phase to employ our lighting & safety, electrical power and avionics technologies in the business jet market. There is risk involved in the development of any new aircraft including the risk that the aircraft will not ultimately be produced or that it will be produced in lower quantities than originally expected and thus impacting our return on our engineering and development efforts.

Our lighting & safety products used on business jet aircraft, sales of which amounted to approximately $18.2 million in 2013, are down $2.9 million or 13.7% from 2012, due primarily to lower sales volumes of our organic lighting and safety products.

Sales of avionics products used on business jet aircraft amounted to approximately $4.9 million in 2013, up $1.9 million from 2012 due primarily to having a full year of sales of Max-Viz enhanced vision systems products, compared to a half a year of sales of those products in 2012.

Sales of our electrical power & motion products used on business jet aircraft, which are primarily airframe power management products, accounted for approximately $6.7 million of our sales to this market, up $1.4 million from 2012, due primarily to higher volume of sales of our organic electrical power & motion products.

Other Aerospace

Sales of our other aerospace products include sales of airfield lighting products and other Peco products. Sales to this market totaled approximately 4% of our total revenue in 2013 and amounted to $14.4 million in 2013 which is up approximately $4.4 million when compared to 2012. The increase in sales from 2012 was due primarily to the addition of Peco other product sales, which amounted to approximately $3.6 million.

Tests Systems Products

Our Test Systems segment accounted for approximately 3% of our consolidated sales in 2013 and amounted to $9.4 million which is down approximately $2.1 million when compared to 2012. All sales of these products are to the military test market.

On February 28, 2014, Astronics completed the acquisition of substantially all of the assets and liabilities of EADS North America’s Test and Services division, a leading provider of highly engineered automatic test systems, subsystems and instruments for semi-conductor and consumer electronics products to both the commercial and defense industries. ATS will be included in our Test Systems segment. Sales of the ATS products are expected to be a total of approximately $100 million in 2014 to the defense and commercial industries.

Important factors affecting our growth and profitability are the rate at which new aircraft are produced, government funding of military programs, our ability to have our products designed into the plans for new aircraft and the rates at which aircraft owners, including commercial airlines, refurbish or install upgrades to their aircraft. New aircraft build rates and aircraft owners spending on upgrades and refurbishments is cyclical and dependent on the strength of the global economy. Once designed into a new aircraft, the spare parts business is frequently retained by the Company. With the acquisition of ATS in 2014 future growth and profitability of the test business will be dependent on developing and procuring new and follow-on business in commercial electronics and semi-conductor markets as well as with the military.

Each of the markets that we serve presents opportunities that we expect will provide growth for the Company over the long-term. We continue to look for opportunities in all of our markets to capitalize on our core competencies to expand our existing business and to grow through strategic acquisitions.

Challenges which continue to face us include improving shareholder value through increasing profitability. Increasing profitability is dependent on many things, primarily revenue growth and the Company’s ability to control operating expenses and to identify means of creating improved productivity. Revenue is driven by increased build rates for existing aircraft, market acceptance and economic

16

success of new aircraft, continued government funding of defense programs, the Company’s ability to obtain production contracts for parts we currently supply or have been selected to design and develop for new aircraft platforms and continually identifying and winning new business for our Test Systems segment. Reduced aircraft build rates driven by a weak economy, tight credit markets, reduced air passenger travel and an increasing supply of used aircraft on the market would likely result in reduced demand for our products, which will result in lower profits. Reduction of defense spending may result in fewer opportunities for us to compete, which could result in lower profits in the future. Many of our newer development programs are based on new and unproven technology and at the same time we are challenged to develop the technology on a schedule that is consistent with specific programs. We will continue to address these challenges by working to improve operating efficiencies and focusing on executing on the growth opportunities currently in front of us.

ACQUISITIONS

On February 28, 2014, Astronics completed the acquisition of substantially all of the assets and liabilities of EADS North America’s Test and Services division. The entity, Astronics Test Systems (“ATS”) is located in Irvine, California and is a leading provider of highly engineered automatic test systems, subsystems and instruments for the semi-conductor, consumer electronics to both the commercial and defense industries. The purchase price was approximately $53.0 million in cash plus a net working capital adjustment yet to be determined. The addition of ATS compliments products and technologies that the Astronics Test Segment offers. ATS will be reported as a member of our Test Systems segment.

On December 5, 2013 we completed the acquisition of 100% of the stock of PGA. PGA designs and manufactures seat motion and lighting systems primarily for premium class aircraft seats and is Europe’s leading provider of in-flight entertainment/communication systems as well as cabin management systems for private VVIP aircraft. The addition of PGA further diversifies the products and technologies that Astronics offers. The purchase price was approximately $32.9 million for which approximately $10.7 million, net of cash acquired, was paid in cash and the balance paid with 264,168 shares of Astronics stock valued at $51.00/share. PGA is included in our Aerospace reporting segment.

On October 1, 2013, we acquired certain assets and liabilities from AeroSat Corporation and related entities, a supplier of aircraft antenna systems for $12 million in cash, plus contingent purchase consideration (“Earn Out”) of up to a maximum of $53.0 million based upon the achievement of certain revenue levels in 2014 and 2015 calculated as follows:

	AeroSat Revenue	Earn Out Formula
2014	<$30 million	No Earn Out
	>$30 million < $50 million	(AeroSat Revenue X 15%) x ((AeroSat Revenue-$30 million)/$20 million
	>$50 million	AeroSat Revenue X 15%
2015	<$40 million	No Earn Out
	>$40 million < $60 million	(AeroSat Revenue X 15%) x ((AeroSat Revenue-$40 million)/$20 million
	>$60 million	AeroSat Revenue X 15%

The addition of AeroSat further diversifies the products and technologies that Astronics offers. The additional contingent purchase consideration is recorded at its estimated fair value of approximately $5.0 million at the date of acquisition based upon the Company’s assessment of revenue levels for the earn out periods and the probability of AeroSat achieving those revenue levels. Substantially all of the goodwill and purchased intangible assets are expected to be deductible for tax purposes over 15 years.

On July 18, 2013, we completed the acquisition of 100% of the stock of Peco, Inc. which designs and manufacturers highly engineered commercial aerospace interior components and systems for the aerospace industry. The company specializes in overhead Passenger Service Units, (“PSUs”) which incorporate air handling, emergency oxygen, electrical power management and cabin lighting systems. It also manufactures a wide range of fuel access doors that meet stringent strength, fuel sealing and anti-corrosion requirements. The addition of Peco diversifies the products and technologies that Astronics offers. We purchased the outstanding stock of Peco for $136.0 million in cash. Peco is included in our Aerospace reporting segment.

On July 30, 2012 we acquired by merger, 100% of the stock of Max-Viz, Inc., a manufacturer of industry-leading Enhanced Vision Systems for defense and commercial aerospace applications for the purpose of improving situational awareness. The addition of Max-Viz diversifies the products and technologies that Astronics offers. We purchased the outstanding stock of Max-Viz for $10.7 million in cash plus contingent purchase consideration up to a maximum of $8.0 million subject to meeting certain revenue thresholds through 2014. Max-Viz is included in our Aerospace reporting segment. The additional contingent purchase consideration is recorded at its estimated fair value at the date of acquisition based upon the Company’s assessment of the probability of Max-Viz achieving the revenue growth targets. At December 31, 2013, the amount recorded as additional purchase consideration is insignificant.

17

On November 30, 2011 we acquired 100% of the stock of Ballard Technology, Inc., a manufacturer of avionics databus products. Ballard is included in our aerospace reporting segment. The addition of Ballard diversifies the products and technologies that Astronics offers. We purchased the outstanding stock of Ballard for approximately $23.9 million in cash plus contingent purchase consideration up to a maximum of $5.5 million subject to meeting certain revenue growth targets over the next five years. At December 31, 2013, the amount recorded as additional purchase consideration is approximately $0.7 million.

CRITICAL ACCOUNTING POLICIES

Our financial statements and accompanying notes are prepared in accordance with U.S. generally accepted accounting principles. The preparation of the Company’s financial statements requires management to make estimates, assumptions and judgments that affect the amounts reported. These estimates, assumptions and judgments are affected by management’s application of accounting policies, which are discussed in the Notes to Consolidated Financial Statements, Note 1 of Item 8, Financial Statements and Supplementary Data of this report. The critical accounting policies have been reviewed with the Audit Committee of our Board of Directors.

Revenue Recognition

Most of our revenue is recognized at the time of shipment of goods and transfer of title. Revenue of approximately $4.4 million, $4.2 million and $10.0 million for the years ending December 31, 2013, 2012 and 2011 respectively, was recognized from long-term, fixed-price contracts using the percentage-of-completion method of accounting, measured by multiplying the estimated total contract value by the ratio of actual contract costs incurred to date to the estimated total contract costs. Substantially all long-term contracts are with U.S. government agencies and contractors thereto. The Company makes significant estimates involving its usage of percentage-of-completion accounting to recognize contract revenues. The Company periodically reviews contracts in process for estimates-to-completion, and revises estimated gross profit accordingly. While the Company believes its estimated gross profit on contracts in process is reasonable, unforeseen events and changes in circumstances can take place in a subsequent accounting period that may cause the Company to revise its estimated gross profit on one or more of its contracts in process. Accordingly, the ultimate gross profit realized upon completion of such contracts can vary significantly from estimated amounts between accounting periods.

Accounts Receivable and Allowance for Doubtful Accounts

We record a valuation allowance to account for potentially uncollectible accounts receivable. The allowance is determined based on Management’s knowledge of the business, specific customers, review of receivable aging and a specific identification of accounts where collection is at risk. At December 31, 2013, the allowance for doubtful accounts for accounts receivable was $0.1 million, or 0.2% of gross accounts receivable. At December 31, 2012, the allowance for doubtful accounts for accounts receivable was $0.7 million, or 1.4% of gross accounts receivable.

Inventory Valuation

We record valuation reserves to provide for excess, slow moving or obsolete inventory or to reduce inventory to the lower of cost or market value. In determining the appropriate reserve, Management considers the age of inventory on hand, the overall inventory levels in relation to forecasted demands as well as reserving for specifically identified inventory that we believe is no longer salable. At December 31, 2013, our reserve for inventory valuation was $11.0 million, or 11.5% of gross inventory. At December 31, 2012, our reserve for inventory valuation was $12.0 million, or 19.8% of gross inventory.

Deferred Tax Asset Valuation Allowances

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. We record a valuation allowance to reduce deferred tax assets to the amount of future tax benefit that we believe is more likely than not to be realized. Significant assumptions regarding future profitability is required to estimate the value of these deferred tax assets. We consider recent earnings projections, allowable tax carryforward periods, tax planning strategies and historical earnings performance to determine the amount of the valuation allowance. Changes in these factors could cause us to adjust our valuation allowance, which would impact our income tax expense and the carrying value of these assets when we determine that these factors have changed.

As of December 31, 2013 we had net deferred tax liabilities of $19.9 million. Included in the deferred tax liabilities are approximately $17.5 million in deferred tax assets net of a $2.5 million valuation allowance. These deferred tax assets principally relate to goodwill and intangible assets, employee benefit liabilities, asset reserves, depreciation and state and foreign general business tax credit carry-forwards.

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As of December 31, 2012, we had net deferred tax assets of $14.0 million, net of a $2.2 million valuation allowance. These assets principally relate to goodwill and intangible assets, employee benefit liabilities, asset reserves, depreciation and state and foreign general business tax credit carry-forwards.

Because of the uncertainty as to the Company’s ability to generate sufficient future taxable income in certain states, the Company has recorded the valuation allowances accordingly in 2013 and 2012.

Impairment of long-lived assets

Goodwill Impairment Testing

Our goodwill is the result of the excess of purchase price over net assets acquired from acquisitions. As of December 31, 2013, we had approximately $101.0 million of goodwill. As of December 31, 2012, we had approximately $21.9 million of goodwill. The change in goodwill is due to the acquisitions of Peco, AeroSat and PGA, increasing goodwill by $79.1 million.

We identify our reporting units by assessing whether the components of our operating segments constitute businesses for which discrete financial information is available and segment management regularly reviews the operating results of those components. The Test Systems operating segment is its own reporting unit while the other reporting units are one level below our Aerospace operating segment.

Companies may perform a qualitative assessment as the initial step in the annual goodwill impairment testing process for all or selected reporting units. Companies are also allowed to bypass the qualitative analysis and perform a quantitative analysis if desired. Economic uncertainties and the length of time from the calculation of a baseline fair value are factors that we would consider in determining whether to perform a quantitative test.

When we evaluate the potential for goodwill impairment using a qualitative assessment, we consider factors including, but not limited to, macroeconomic conditions, industry conditions, the competitive environment, changes in the market for our products and services, regulatory and political developments, entity specific factors such as strategy and changes in key personnel and overall financial performance. If, after completing this assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we proceed to a quantitative two-step impairment test.

Quantitative testing first requires a comparison of the fair value of each reporting unit to the carrying value. We use the discounted cash flow method to estimate the fair value of each of our reporting units. The discounted cash flow method incorporates various assumptions, the most significant being projected revenue growth rates, operating profit margins and cash flows, the terminal growth rate and the discount rate. Management projects revenue growth rates, operating margins and cash flows based on each reporting unit’s current business, expected developments and operational strategies. If the carrying value of the reporting unit exceeds its fair value, goodwill is considered impaired and any loss must be measured.

In measuring the impairment loss, the implied fair value of goodwill is determined by assigning a fair value to all of the reporting unit’s assets and liabilities, including any unrecognized intangible assets, as if the reporting unit had been acquired in a business combination at fair value. If the carrying amount of the reporting unit goodwill exceeds the implied fair value of that goodwill, an impairment loss would be recognized in an amount equal to that excess.

In 2013, we performed quantitative assessments for the seven reporting units which have goodwill and concluded that it is more likely than not that their fair values exceed their carrying values. Based on our quantitative assessments of our reporting units, we concluded that goodwill was not impaired.

Amortized Intangible Asset Impairment Testing

Amortizable intangible assets with a carrying value of $102.7 million at December 31, 2013 are amortized over their assigned useful lives. We test these long-lived assets for impairment when events or changes in circumstances indicate that the carrying amount of those assets may not be recoverable. The recoverability test consists of comparing the projected undiscounted cash flows, with its carrying amount. An impairment loss would then be recognized for the carrying amount in excess of its fair value.

Depreciable Asset Impairment Testing

Property, plant and equipment with a carrying value of $70.9 million at December 31, 2013 are depreciated over their assigned useful lives. We test these long-lived assets for impairment when events or changes in circumstances indicate that the carrying amount of those assets may not be recoverable. The recoverability test consists of comparing the projected undiscounted cash flows, with its carrying amount. An impairment loss would then be recognized for the carrying amount in excess of its fair value.

Supplemental Executive Retirement Plan (SERP)

We maintain two non-qualified defined benefit supplemental retirement plans (“SERP” and “SERP II”) for certain executive officers and retired former executive officers. Expense for these plans in 2013 was $1.5 million. Plan obligations and the related costs

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are determined using actuarial valuations that involve several assumptions that may be highly uncertain and may have a material impact on the financial statements if different reasonable assumptions had been used. The most critical assumptions include the discount rate, future wage increases, retirement age and life expectancy. The discount rate is used to state expected future cash flows at present value. Using a lower discount rate increases the present value of pension obligations and increases pension expense. For determining the discount rate the Company considers long-term interest rates for high-grade corporate bonds. The discount rate for determining the expense recognized in 2013 was 4.2% compared with 4.5% in 2012. We will use a discount rate of 5.1% in determining our 2014 expense. The assumption for compensation increases takes a long-term view of inflation and performance based salary adjustments based on the Company’s approach to executive compensation. The rate used for future wage increases was 5%. It was assumed that each participant retires after fully vesting in the plan at age 62 or 65. A 100 point increase in the discount rate we used would decrease our annual pension expense for 2014 by 0.2 million. If we had assumed annual wage increases of 6% our 2014 pension expense would increase approximately $0.1 million.

Stock-Based Compensation

We have stock-based compensation plans, which include non-qualified stock options as well as incentive stock options. Expense recognized for stock-based compensation was $1.4 million for the year ended 2013, $1.4 million for the year ended 2012 and $1.1 million for the year ended 2011. We determine the fair value of the option awards at the date of grant using a Black-Scholes model. Option pricing models require management to make assumptions and to apply judgment to determine the fair value of the award. These assumptions and judgments include estimating the future volatility of our stock price, expected dividend yield, future employee stock option exercise behaviors and future employee turnover rates. Changes in these assumptions can materially affect the fair value estimate.

Acquisitions

The Company accounts for its acquisitions under ASC Topic 805, Business Combinations and Reorganizations (“ASC Topic 805”). ASC Topic 805 provides guidance on how the acquirer recognizes and measures the consideration transferred, identifiable assets acquired, liabilities assumed, non-controlling interests, and goodwill acquired in a business combination. ASC Topic 805 also expands required disclosures surrounding the nature and financial effects of business combinations. Acquisition costs are expensed as incurred. Acquisition expenses in 2013 were approximately $1.9 million and were insignificant in 2012 and 2011.

When the Company acquires a business, we allocate the purchase price to the assets acquired and liabilities assumed in the transaction at their respective estimated fair values. We record any premium over the fair value of net assets acquired as goodwill. The allocation of the purchase price involves judgments and estimates both in characterizing the assets and in determining their fair value. The way we characterize the assets has important implications, as long-lived assets with definitive lives, for example, are depreciated or amortized, whereas goodwill is tested annually for impairment, as explained previously. With respect to determining the fair value of assets, the most subjective estimates involve valuations of long-lived assets, such as property, plant, and equipment as well as identified intangible assets. We use all available information to make these fair value determinations and engage independent valuation specialists to assist in the fair value determination of the acquired long-lived assets. The fair values of long-lived assets are determined using valuation techniques that use discounted cash flow methods, independent market appraisals, and other acceptable valuation techniques.

With respect to determining the fair value of the purchase price, the most subjective estimates involve valuations of contingent consideration. Significant judgment is necessary to determine the fair value of the purchase price when the transaction includes an earn out provision, such as the earn out provision included in our 2013 acquisition of Aerosat. We engage valuation specialists to assist in the determination of the fair value of contingent consideration. Key assumptions used to value the contingent consideration include future projections and discount rates.

During 2013, acquisitions added approximately, $16.3 million in property plant and equipment, $90.2 million in purchased intangible assets and $79.2 million in goodwill. See Note 19 in the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, regarding the acquisitions in 2013 and 2012.

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CONSOLIDATED RESULTS OF OPERATIONS AND OUTLOOK

	2013 (3)			2012 (2)			2011 (1)
(Dollars in thousands)
Sales	$	339,937		$	266,446		$	228,163
Gross Margin		25.8	%		26.1	%		26.5	%
Impairment Loss	$	—		$	—		$	2,500
SG&A Expenses as a Percentage of Sales		13.4	%		13.8	%		11.9	%
Interest Expense	$	4,094		$	1,042		$	1,806
Effective Tax Rate		28.6	%		30.7	%		25.6	%
Net Earnings	$	27,266		$	21,874		$	21,591

(1) Our results of operations for 2011 include the operations of Ballard beginning November 30, 2011, the effective date of the acquisition.

(2) Our results of operations for 2012 include the operations of Max-Viz, beginning July 30, 2012, the effective date of the acquisition.

(3) Our results of operations for 2013 include the operations of Peco beginning July 18, 2013, the effective date of the acquisition, AeroSat beginning October 1, 2013, the effective date of the acquisition and PGA beginning December 5, 2013, the effective date of the acquisition.

A discussion by segment can be found at “Segment Results of Operations and Outlook” in this MD&A.

CONSOLIDATED OVERVIEW OF OPERATIONS

The increase of consolidated sales in 2013 compared to 2012 was due to a combination of acquisitions and organic sales volume growth. Consolidated year-to-date sales increased by 27.6% to $339.9 million, compared with $266.4 million for the same period last year. Acquisitions contributed $39.5 million, all in the aerospace segment while organic sales increased by $34.0 million or 12.8% from the prior year. Aerospace sales of $330.5 million increased by $75.6 million, while Test Systems sales of $9.4 million decreased by $2.1 million, compared with the prior year.

The increase of consolidated sales in 2012 compared to 2011 was due to sales volume growth in our Aerospace segment offset partially by reduced sales volume in our Test Systems segment.

Consolidated cost of products sold increased $55.1 million to $252.1 million in 2013 from $197.0 million in the prior year. The increase was due to the impact of increased organic sales volumes and the additional costs of products sold associated with 2013 acquisitions. Cost of products sold as a percentage of sales was 74.2% in 2013 as compared with 73.9% in the prior year. Cost of products sold in 2013 increased by approximately $7.9 million and included $5.5 million for the expensing of fair value cost step-up of acquired inventory and increased Engineering & development (“E&D”) costs. These costs were slightly offset by lower warranty and inventory obsolescence expenses of approximately $2.9 million. E&D costs were $52.8 million for the full year of 2013 compared with $44.9 million in the prior-year period.

Consolidated cost of products sold increased $29.3 million to $197.0 million in 2012 from $167.7 million in the prior year. Cost of products sold as a percentage of sales was 73.9% in 2012 compared with 73.5% in 2011. The increase was due to the increased sales volumes, increased E&D costs of approximately $8.8 million and higher warranty and inventory obsolescence expenses of approximately $2.3 million. E&D costs were $44.9 million for the full year of 2012 compared with $36.1 million in the prior-year period.

Selling, General and Administrative (“SG&A”) expenses in 2013 were $45.6 million, or 13.4% of sales compared with $36.8 million, or 13.8% of sales, in the same period last year. The increase was due primarily to $7.8 million of additional SG&A costs for the acquired businesses, including $3.2 million of purchased intangible asset amortization expense associated with these acquisitions and $1.8 million relating to the acquisition transactions including financing, legal and diligence efforts.

The SG&A expenses in 2012 were $36.8 million or 13.8% of sales, compared with $27.2 million or 11.9% of sales in 2011. The increase in 2012 compared with 2011 was due primarily to higher legal expenses which increased $1.4 million and the additional SG&A from Ballard Technologies and Max-Viz, acquired in November of 2011 and July 2012 respectively, which added $6.1 million. Additionally, compensation costs increased in 2012 compared to 2011 primarily as a result of increased pension expense.

In 2011, as a result of declining sales and low new orders, our forecast future cash flow for our Test Systems segment indicated that its carrying value exceeded its fair value. As a result we recorded an impairment charge of $2.5 million to write down the carrying value of our Test Systems goodwill to zero and certain intangible assets to fair value. There were no impairment charges in 2013 and 2012.

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Interest expense increased in 2013 compared to 2012 due to increased debt levels used primarily to finance acquisitions and increased interest rates related to higher leverage ratios. Interest expense decreased in 2012 compared to 2011, due to a combination of lower rates and reduced debt levels when compared with the same period in the prior year.

Our effective tax rates for 2013, 2012, and 2011 were 28.6%, 30.7%, and 25.6%, respectively. Our tax rate is affected by recurring items, such as tax rates in foreign jurisdictions and the relative amount of income we earn in jurisdictions, which we expect to be fairly consistent in the near term. It is also affected by discrete items that may occur in any given year, but are not consistent from year to year. In addition to state income taxes, the following items had the most significant impact on the difference between our statutory U.S. federal income tax rate of 35% and our effective tax rate:

2013:

1. Recognition of $0.8 million of 2013 U.S. R&D tax credits as well as $1.1 million of U.S. R&D tax credits recognized relating to 2012. The 2012 R&D tax credits were not recognized in 2012, as the American Tax Payer Relief Act of 2012 which extended the R&D tax credit for 2012, was not enacted until 2013.

2. Permanent differences, primarily the impact of the Domestic Production Activities Deduction.

2012:

1. Permanent differences, primarily the impact of the Domestic Production Activities Deduction.

2. Reduction in the reserves for uncertain tax positions related to U.S. R&D tax credits.

2011:

1. Permanent differences, primarily the impact of the Domestic Production Activities Deduction.

2. Reduction in the reserves for uncertain tax positions related to U.S. R&D tax credits that occurred in tax years 2006 through 2010.

2014 Outlook

We expect consolidated sales in 2014 to be between $585 million and $640 million, including the February 2014 addition of ATS. Our consolidated backlog at December 31, 2013 was $207.1 million of which approximately $204.1 million is expected to ship in 2014.

We expect our capital equipment spending in 2014 to be in the range of $33 million to $37 million, including approximately $21 million for the acquisition and renovation of a recently acquired facility in Portland, OR. Engineering and development costs are estimated to be in the range of $65 million to $69 million excluding the impact of the acquisition of ATS.

SEGMENT RESULTS OF OPERATIONS AND OUTLOOK

Operating profit, as presented below, is sales less cost of sales and other operating expenses excluding interest expense, corporate expenses and other non-operating revenue and expenses. Cost of sales and operating expenses are directly attributable to the respective segment. Operating profit is reconciled to earnings before income taxes in Note 18 of Item 8, Financial Statements and Supplementary Data, of this report.

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AEROSPACE

(in thousands, except percentages)	2013			2012			2011
Sales	$	330,530		$	254,955		$	213,874
Operating Profit	$	55,200		$	44,137		$	40,400
Operating Margin		16.7	%		17.3	%		18.9	%
(in thousands)	2013			2012
Total Assets	$	428,619		$	177,168
Backlog	$	207,101		$	110,915
Sales by Market (in thousands)	2013			2012			2011
Commercial Transport	$	237,725		$	179,104		$	143,337
Military		48,669			36,511			35,394
Business Jet		29,784			29,379			25,983
Other		14,352			9,961			9,160
	$	330,530		$	254,955		$	213,874
Sales by Product Line (in thousands)	2013			2012			2011
Electrical Power & Motion	$	188,221		$	160,136		$	134,649
Lighting & Safety		102,233			69,597			69,653
Avionics		18,733			15,261			412
Structures		6,331			—			—
Other		15,012			9,961			9,160
	$	330,530		$	254,955		$	213,874

Sales for the Aerospace segment increased $75.6 million compared with the prior year. Sales for this segment from the acquired businesses accounted for $39.4 million of the increase. Organic sales for this segment were up $36.2 million primarily from electrical power & motion product sales. Sales to the commercial transport market increased in 2013 due to increased volume of electrical power & motion, lighting & safety products and structures products. Sales of the electrical power & motion products grew as global demand for passenger power systems continues to be strong. Lighting & safety product sales increased due primarily to the acquisition of Peco, which added $25.9 million in sales to this product line. Peco also contributed $6.3 million of structures sales to the commercial transport market. Sales of avionics products to this market were flat when compared to the prior year period. Military sales were up compared with last year as a result of higher sales volume of lighting & safety products, electrical power & motion products and avionics products. Sales to the business jet market were down slightly when compared with the prior year as higher sales volumes of electrical power & motion products and avionics product sales were more than offset by a lower volume of lighting & safety product sales. Sales to other markets increased $4.4 million due primarily to the acquisition of Peco other product sales.

Aerospace operating profit for 2013 was $55.2 million, or 16.7% of sales, compared with $44.1 million, or 17.3% of sales, in the prior year. The increase in the operating profit was due to leverage from a higher volume of sales, lower warranty and inventory obsolescence expense of $2.9 million and lower legal expenses of $1.1 million which more than offset the $5.5 million fair value expense for the step-up of acquired inventory from the 2013 acquisitions and higher E&D expenses of $8.0 million, of which approximately $1.9 million was from the acquired businesses. SG&A costs for the businesses acquired in 2013 totaled $6.6 million for 2013, including $3.2 million of purchased intangible asset amortization expense associated with these acquisitions.

Aerospace sales for 2012 increased by $41.1 million, or 19.2%, to $255.0 million from $213.9 million in 2011. Sales growth was primarily driven by increased sales of electrical power & motion products to the commercial transport market as well as the impact of acquisitions of approximately $15.3 million. Military sales were up slightly due primarily to the acquisition of Ballard adding $7.4 million in new product sales being mostly offset by lower volume of lighting & safety products and electrical power & motion products. Sales to the business jet market were higher due primarily to the acquisition of Max-Viz adding $2.7 million in new product sales and increased volume of lighting & safety products which were partially offset by decreased volume from our electrical power & motion products.

Operating margins for the Aerospace segment decreased in 2012 to 17.3% from 18.9% in 2011. Operating margins decreased as the leverage contributed from the increased sales volume was more than offset by higher E&D (“engineering and development”) expense and increased SG&A costs. E&D costs in 2012 increased compared with 2011 by $9.1 million to $41.9 million in 2012. SG&A costs increases were related to compensation, legal and warranty costs, compared with 2011.

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It is our intention to continue investing in capabilities and technologies as needed that allows us to execute our strategy to increase the ship set content and value we provide on aircraft in all markets that we serve. The rate of spending on these activities, however, will continue to be driven by market opportunities.

The backlog for our Aerospace segment at December 31, 2013 was $207.1 million compared with $110.9 million at December 31, 2012.

2014 Outlook for Aerospace – We expect 2014 Aerospace segment sales to be in the range of $475 million to $505 million.

TEST SYSTEMS

(in thousands, except percentages)	2013			2012			2011
Sales	$	10,103		$	11,491		$	14,289
Less Inter-segment Sales		(696	)		—			—
Net Sales	$	9,407		$	11,491		$	14,289
Operating Loss	$	(3,756	)	$	(4,985	)	$	(4,760	)
Operating Margin		(37.2	)%		(43.4	)%		(33.3	)%
(in thousands)	2013			2012
Total Assets	$	11,035		$	18,121
Backlog	$	7,062		$	3,565

Sales in 2013, 2012 and 2011 were all to the military market. The Test Systems segment continues to face headwinds as military spending has slowed and opportunities for large programs are fewer. With the lack of large programs we have continued to utilize our engineering capacity to continue to develop our next generation family of synthetic radio testers which we believe will provide a firm base line of repeating business for the future.

In 2011, an impairment charge relating to the write-down of goodwill and intangible assets of $2.5 million is included in our Test Systems operating loss of $4.8 million for the year. There were no impairment charges in 2013 or 2012.

The backlog for Test Systems was $7.1 million at December 31, 2013 compared with $3.6 million at December 31, 2012.

2014 Outlook for Test Systems – With the acquisition of ATS in February of 2014, we expect 2014 Test Systems sales to be approximately $110 million to $135 million.

OFF BALANCE SHEET ARRANGEMENTS

We do not have material off-balance sheet arrangements that have or are reasonably likely to have a material future effect on our results of operations or financial condition.

CONTRACTUAL OBLIGATIONS

The following table represents contractual obligations as of December 31, 2013:

	Payments Due by Period
(In thousands)	Total		2014		2015-2016		2017-2018		After 2018
Long-term Debt	$	200,320	$	12,279	$	33,167	$	151,472	$	3,402
Purchase Obligations		91,230		89,120		2,016		94		—
Interest on Long-term Debt		32,235		8,087		14,431		8,851		866
Supplemental Retirement Plan and Post Retirement Obligations		14,944		391		782		782		12,989
Operating Leases		3,762		2,183		1,205		374		—
Other Long-term Liabilities		13,287		542		12,427		255		63
Total Contractual Obligations	$	355,778	$	112,602	$	64,028	$	161,828	$	17,320

Notes to Contractual Obligations Table

Purchase Obligations — Purchase obligations are comprised of the Company’s commitments for goods and services in the normal course of business.

Long-Term Debt — See item 8, Financial Statements and Supplementary Data, Note 6, Long-Term Debt and Note Payable in this report.

Operating Leases — Operating lease obligations are primarily related to facility leases for our AES, AeroSat, Ballard, DME, Max-Viz, Peco, and foreign operations.

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LIQUIDITY AND CAPITAL RESOURCES

(in thousands)	2013			2012			2011
Net cash provided (used) by:
Operating Activities	$	49,549		$	24,178		$	27,908
Investing Activities		(166,629	)		(27,379	)		(38,132	)
Financing Activities		164,253			(341	)		(1,565	)

Our cash flow from operations and available borrowing capacity provide us with the financial resources needed to run our operations and reinvest in our business.

Operating Activities

Cash provided by operating activities was $49.5 million in 2013 compared with $24.2 million in 2012. The increase of $25.3 million in 2013 was primarily a result of higher net income, increases in non-cash expenses and decreased cash used for net working capital components due primarily to timing of payments on accounts payable and receivable collections.

Cash provided by operating activities was $24.2 million in 2012 compared with $27.9 million in 2011. The decrease of $3.7 million in 2012 was mainly a result of increased cash used for net working capital components due primarily to timing of inventory purchases and the collection of accounts receivable and customer advanced payments.

Our cash flows from operations are primarily dependent on our net income adjusted for non-cash expenses and the timing of collections of receivables, level of inventory and payments to suppliers. Sales are influenced significantly by the build rates of new aircraft, which are subject to general economic conditions, airline passenger travel and spending for government and military programs. Over time, sales will also be impacted by our success in executing our strategy to increase ship set content and obtain production orders for programs currently in the development stage. A significant change in new aircraft build rates could be expected to impact our profits and cash flow. A significant change in government procurement and funding and the overall health of the worldwide airline industry could be expected to impact our profits and cash flow as well.

Investing Activities

Cash used for investing activities in 2013 was approximately $166.6 million. The acquisitions of Peco, AeroSat and PGA used approximately $159.8 million of cash in 2013 and purchases of property, plant and equipment (“PP&E”) used $6.9 million. In January 2014, we purchased a facility near Portland, Oregon for approximately $14 million and expect to invest an additional $7 million into the buildings before moving our PECO operations into the new facility in the second half 2014.

Cash used for investing activities in 2012 was approximately $27.4 million including the acquisition of Max-Viz for $10.7 million and $16.7 million for fixed assets including the completion of the building in Kirkland, WA that we acquired in 2011. AES relocated to this facility in 2012. In 2012 we spent $12.0 million to complete the Kirkland building and $4.7 million on other capital equipment.

Our expectation for 2014 is that we will invest between $33 million and $37 million for PP&E, including approximately $21 million for the acquisition and build out of the new facility in Oregon. Future requirements for PP&E depend on numerous factors, including expansion of existing product lines and introduction of new products. Management believes that our cash flow from operations and current borrowing arrangements will provide for these capital expenditures. We expect to continue to evaluate acquisition opportunities in the future.

Financing Activities

Our ability to maintain sufficient liquidity is highly dependent upon achieving expected operating results. Failure to achieve expected operating results could have a material adverse effect on our liquidity, our ability to obtain financing and our operations in the future. Our obligations under our Credit Agreement are jointly and severally guaranteed by each of our domestic subsidiaries. The obligations are secured by a first priority lien on substantially all of the Company’s and the guarantors’ assets and 100% of the issued and outstanding equity interest of each subsidiary.

In July, 2013, in connection with funding the 2013 acquisitions, the Company amended its existing credit facility by entering into a Third Amended and Restated Credit Agreement ( the “Credit Agreement”), dated as of July18, 2013. The Credit Agreement provides for a $75 million five-year revolving credit facility and a $190 million five-year term loan, both maturing on June 30, 2018. The amended facilities carry an interest rate ranging from 225 basis points to 350 basis points above LIBOR, depending on the Company’s leverage ratio as defined in the Credit Agreement. Principal installments are payable on the term loan in varying quarterly amounts through March 31, 2018 and the entire unpaid principal balance together with interest due and payable on June 30, 2018 and with mandatory prepayments being required in certain circumstances. The credit facility is secured by substantially all of the Company’s assets. In addition, the Company is required to pay a commitment fee of between 25 basis points and 50 basis points quarterly on the unused portion of the revolving credit facility, based on the Company’s leverage ratio under the Credit Agreement.

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The proceeds of the term loan were used to finance acquisitions, pay off $7.0 million outstanding under the existing term loan, $7.0 million outstanding under the existing revolving credit facility and $0.5 million of other term debt and to pay transaction expenses.

On December 31, 2013, the Company modified its existing credit facility by entering into Amendment No, 1 dated as of December 31, 2013 to the Third Amended and Restated Credit Agreement (“Amendment”). The Amendment modifies the definition of EBITDA by adding back certain non-recurring expenses and adjustments and modifies the definition of the Fixed Charge Coverage Ratio by excluding certain Peco capital expenditures from the computation.

The Credit Agreement contains various financial covenants. The covenant for minimum fixed charge coverage, defined as the ratio of the sum of net income, interest expense, provision for taxes based on income, total depreciation expense, total amortization expense, other non-cash items reducing net income minus other non-cash items increasing net income minus capital expenditures, minus cash taxes paid and dividends paid to interest expense plus scheduled principal payments on long-term debt calculated on a rolling four-quarter basis to be not less than 1.25 to 1 for each fiscal quarter ending on or after September 30, 2011. The Company’s minimum fixed charge coverage was 3.70 to 1 at December 31, 2013. The covenant for maximum leverage, defined as the ratio of the sum of net income, interest expense, provision for taxes based on income, total depreciation expense, total amortization expense, other non-cash items reducing net income minus other non-cash items increasing net income to funded debt calculated on a rolling four-quarter basis is not to exceed 3.75 to 1 as of the end of each fiscal quarter through March 31, 2015 and 3.50 to 1 for each fiscal quarter ending thereafter. The Company’s leverage as defined in the credit agreement was 2.68 to 1 at December 31, 2013.

There was no balance outstanding on our revolving credit facility at December 31, 2013. For working capital requirements, the Company had available on its credit facility $65.2 million. The credit facility allocates up to $20 million of the revolving credit line for the issuance of letters of credit, including certain existing letters of credit totaling approximately $9.8 million at December 31, 2013. In addition, the Company is required to pay a commitment fee of between 25 basis points and 50 basis points quarterly, on the unused portion of the total revolving credit commitment, also based on the Company’s Leverage Ratio.

On February 28, 2014, in connection with the funding of the acquisition of ATS, the Company amended its existing credit facility by entering into Amendment No 2. to Third Amended and Restated Credit Agreement. The Company elected to exercise its option to increase the revolving credit commitment. The Credit Agreement now provides for a $125 million five-year revolving credit facility maturing on June 30, 2018, of which $58.0 million was drawn to finance the acquisition. There remains approximately $56.1 million available under the revolving credit facility on February 28, 2014.

The amended facility temporarily increases the maximum leverage ratio permitted under the agreement to 4.0 to 1.0 for fiscal quarters ending March 31, 2014 and June 30, 2014, 3.75 to 1.0 as of the end of fiscal quarters from September 30, 2014 through March 31, 2015 and 3.5 to 1.0 as of the end of each fiscal quarter subsequent to March 31, 2015 to maturity. There were no changes to the other covenants, interest rates being charged or commitment fees.

In the event of voluntary or involuntary bankruptcy of the Company or any subsidiary, all unpaid principal and other amounts owing under the Credit Agreement automatically become due and payable. Other events of default, such as failure to make payments as they become due and breach of financial and other covenants, give the Agent the option to declare all such amounts immediately due and payable. At December 31, 2013, we were in compliance with all of the covenants pursuant to the credit facility.

The Company’s cash needs for working capital, debt service and capital equipment during 2014 is expected to be met by cash flows from operations and cash balances and if necessary, utilization of the revolving credit facility.

DIVIDENDS

Management believes that it should retain the capital generated from operating activities for investment in advancing technologies, acquisitions and debt retirement. Accordingly, there are no plans to institute a cash dividend program.

BACKLOG

At December 31, 2013, the Company’s backlog was approximately $214.2 million compared with approximately $114.5 million at December 31, 2012.

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RELATED-PARTY TRANSACTIONS

Information regarding certain relationships and related transactions is incorporated herein by reference to the information included in the Company’s 2014 Proxy Statement which will be filed with the Commission within 120 days after the end of the Company’s 2013 fiscal year.

RECENT ACCOUNTING PRONOUNCEMENTS

See Note 1 of the Consolidated Financial Statements at Item 8 of this report.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company has limited exposure to fluctuation in Canadian and Euro currency exchange rates to the U.S. dollar. Nearly all of the Company’s consolidated sales are transacted in U.S. dollars.

Net assets held in or measured in Canadian dollars amounted to $7.2 million at December 31, 2013. Annual disbursements transacted in Canadian dollars were approximately $10.6 million in 2013. A 10% change in the value of the U.S. dollar versus the Canadian dollar would impact net income by approximately $0.8 million.

Net assets held in or measured in Euros amounted to $32.8 million at December 31, 2013. Disbursements transacted in Euros in 2013 were approximately $2.8 million. A 10% change in the value of the U.S. dollar versus the Euros would have had an insignificant impact to 2013 net income; however it could be significant in the future.

Risk due to fluctuation in interest rates is a function of the Company’s floating rate debt obligations, which total approximately $192.0 million at December 31, 2013. To offset this exposure, the Company has one interest rate swap to fix the interest rate on a portion of the underlying debt for a set period of time. The interest rate swap has a notional amount of approximately $1.5 million at December 31, 2013, and was entered into in February 2006, related to the Company’s Series 1999 New York Industrial Revenue Bond. The interest rate swap effectively fixes the rate at 3.99% plus a spread based on the Company’s leverage ratio on this obligation through 2016.

Before the Company entered into the Third Amended and Restated Credit Agreement, a change of 1% in interest rates would impact annual net income by less than $0.2 million. Subsequent to July 18, 2013, the additional $190.0 million senior secured term debt incurred in conjunction with the acquisition of Peco causes a 1% change in interest rates on all variable rate debt to impact annual net income by $1.2 million.

27

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of Astronics Corporation.

We have audited the accompanying consolidated balance sheets of Astronics Corporation as of December 31, 2013 and 2012, and the related consolidated statements of operations, comprehensive income, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2013. Our audits also included the financial statement schedule listed in the Index at Item 15(a). These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Astronics Corporation at December 31, 2013 and 2012 and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2013, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Astronics Corporation’s internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework) and our report dated March 7, 2014 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Buffalo, New York

March 7, 2014

28

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act. Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2013 based upon the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), 1992 Framework. Based on that evaluation, our management concluded that our internal control over financial reporting is effective as of December 31, 2013.

We completed an acquisition in 2013, which was excluded from our management’s report on internal control over financial reporting as of December 31, 2013. We acquired Peco Inc. on July 18, 2013, AeroSat Corporation on October 1, 2013 and PGA Electronic s.a. on December 5, 2013. These acquisitions were included in our 2013 consolidated financial statements and constituted $246.0 million and $206.1 million of total and net assets, respectively, as of December 31, 2013 and $39.5 million and $5.0 million of sales and net loss, respectively, for the year then ended.

Ernst & Young LLP, independent registered public accounting firm, has audited our consolidated financial statements included in this Annual Report on Form 10-K and, as part of their audit, has issued their report, included herein, on the effectiveness of our internal control over financial reporting.

By:	/s/ Peter J. Gundermann	March 7, 2014
	Peter J. Gundermann
	President & Chief Executive Officer
	(Principal Executive Officer)
	/s/ David C. Burney	March 7, 2014
	David C. Burney
	Vice President-Finance, Chief Financial Officer & Treasurer
	(Principal Financial and Accounting Officer)

29

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of Astronics Corporation

We have audited Astronics Corporation’s internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework) (the COSO criteria). Astronics Corporation’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As indicated in the accompanying Management’s Report on Internal Controls over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Peco, Inc. acquired on July 18, 2013, Aerosat Corporation acquired on October 1, 2013, and PGA Electronic S.A. acquired on December 5, 2013, which are included in the December 31, 2013 consolidated financial statements of Astronics Corporation and collectively constituted $246.0 million and $206.1 million of total and net assets, respectively, as of December 31, 2013 and $39.5 million and $5.0 million of sales and net loss, respectively, for the year then ended. Our audit of internal control over financial reporting of Astronics Corporation also did not include an evaluation of the internal control over financial reporting of Peco, Inc., Aerosat Corporation and PGA Electronic S.A.

In our opinion, Astronics Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, 2013, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Astronics Corporation as of December 31, 2013 and 2012 and the related consolidated statements of operations, comprehensive income, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2013 of Astronics Corporation and our report dated March 7, 2014 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Buffalo, New York

March 7, 2014

30

ASTRONICS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year Ended December 31,
(In thousands, except per share data)	2013		2012		2011
Sales	$	339,937	$	266,446	$	228,163
Cost of Products Sold		252,079		197,004		167,667
Gross Profit		87,858		69,442		60,496
Impairment Loss		—		—		2,500
Selling, General and Administrative Expenses		45,553		36,817		27,175
Income from Operations		42,305		32,625		30,821
Interest Expense, Net of Interest Income		4,094		1,042		1,806
Income Before Income Taxes		38,211		31,583		29,015
Provision for Income Taxes		10,945		9,709		7,424
Net Income	$	27,266	$	21,874	$	21,591
Basic Earnings Per Share	$	1.56	$	1.28	$	1.29
Diluted Earnings Per Share	$	1.49	$	1.20	$	1.21

See notes to consolidated financial statements.

31

ASTRONICS CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Year Ended December 31,
(In thousands)	2013			2012			2011
Net Income	$	27,266		$	21,874		$	21,591
Other Comprehensive Income:
Foreign Currency Translation Adjustments		(131	)		183			(90	)
Mark to Market Adjustments for Derivatives – Net of Tax		73			114			82
Retirement Liability Adjustment – Net of Tax		1,230			(4,194	)		(876	)
Other Comprehensive Income (Loss)		1,172			(3,897	)		(884	)
Comprehensive Income	$	28,438		$	17,977		$	20,707

See notes to consolidated financial statements.

32

ASTRONICS CORPORATION

CONSOLIDATED BALANCE SHEETS

	December 31,
(In thousands, except share and per share data)	2013			2012
ASSETS
Current Assets:
Cash and Cash Equivalents	$	54,635		$	7,380
Accounts Receivable, Net of Allowance for Doubtful Accounts		60,942			45,473
Inventories		85,269			48,624
Prepaid Expenses and Other Current Assets		5,061			1,566
Deferred Income Taxes		5,291			4.967
Total Current Assets		211,198			108,010
Property, Plant and Equipment, at Cost:
Land		6,742			5,424
Buildings and Improvements		45,551			37,045
Machinery and Equipment		54,369			43,342
Construction in Progress		1,527			1,456
		108,189			87,267
Less Accumulated Depreciation		37,289			33,730
Net Property, Plant and Equipment		70,900			53,537
Deferred Income Taxes		—			9,019
Other Assets		5,474			2,977
Intangible Assets, Net of Accumulated Amortization		102,701			16,523
Goodwill		100,998			21,923
Total Assets	$	491,271		$	211,989
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Current Maturities of Long-term Debt	$	12,279		$	9,268
Accounts Payable		25,255			10,592
Accrued Payroll and Employee Benefits		16,214			10,228
Accrued Income Taxes		1,318			—
Other Accrued Expenses		8,454			5,406
Customer Advanced Payments and Deferred Revenue		20,747			12,286
Billings in Excess of Recoverable Costs and Accrued Profits on Uncompleted Contracts		—			188
Deferred Income Taxes		970			—
Total Current Liabilities		85,237			47,968
Long-term Debt		188,041			20,715
Supplemental Retirement Plan and Other Liabilities for Pension Benefits		14,550			15,243
Other Liabilities		7,704			2,929
Deferred Income Taxes		24,230			—
Total Liabilities		319,762			86,855
Shareholders’ Equity
Common Stock, $.01 par value, Authorized 40,000,000 Shares 13,268,299 Shares Issued and Outstanding at December 31, 2013 10,865,212 Shares Issued and Outstanding at December 31, 2012		133			109
Convertible Class B Stock, $.01 par value, Authorized 10,000,000 Shares 4,590,149 Shares Issued and Outstanding at December 31, 2013 6,487,921 Shares Issued and Outstanding at December 31, 2012		46			65
Additional Paid-in Capital		40,826			22,854
Accumulated Other Comprehensive Loss		(3,611	)		(4,783	)
Retained Earnings		134,115			106,889
Total Shareholders’ Equity		171,509			125,134
Total Liabilities and Shareholders’ Equity	$	491,271		$	211,989

See notes to consolidated financial statements.

33

ASTRONICS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended December 31,
(In thousands)	2013			2012			2011
Cash Flows from Operating Activities
Net Income	$	27,266		$	21,874		$	21,591
Adjustments to Reconcile Net Income to Cash Provided By Operating Activities, Excluding the Effects of Acquisitions:
Impairment Loss		—			—			2,500
Depreciation and Amortization		11,059			6,905			4,943
Provision for Non-Cash Losses on Inventory and Receivables		216			1,632			802
Stock Compensation Expense		1,384			1,351			1,061
Deferred Tax Expense (Benefit)		(722	)		(1,544	)		423
Other		(578	)		154			(220	)
Cash Flows from Changes in Operating Assets and Liabilities:
Accounts Receivable		3,493			(8,097	)		(3,042	)
Inventories		(5,222	)		(9,330	)		(883	)
Prepaid Expenses		380			335			291
Accounts Payable		5,831			(537	)		(349	)
Accrued Expenses		3,520			3,374			638
Income Taxes Payable		2,271			669			(404	)
Customer Advanced Payments and Deferred Revenue		(359	)		6,490			1,943
Billings in Excess of Recoverable Costs and Accrued Profits on Uncompleted Contracts		(188	)		(76	)		(1,255	)
Supplemental Retirement Plan and Other Liabilities		1,198			978			(131	)
Cash Provided By Operating Activities		49,549			24,178			27,908
Cash Flows from Investing Activities
Acquisition of Business		(159,761	)		(10,659	)		(23,926	)
Capital Expenditures		(6,868	)		(16,720	)		(14,281	)
Other		—			—			75
Cash Used For Investing Activities		(166,629	)		(27,379	)		(38,132	)
Cash Flows from Financing Activities
Proceeds From Term Note		190,000			—			—
Principal Payments on Long-term Debt		(19,498	)		(10,307	)		(5,302	)
Proceeds from Note Payable		—			10,000			—
Payments on Note Payable		(7,000	)		(3,000	)		—
Payment of Contingent Consideration		(81	)		—			—
Debt Acquisition Costs		(2,288	)		—			(143	)
Proceeds from Exercise of Stock Options		1,922			1,714			2,266
Income Tax Benefit from Exercise of Stock Options		1,198			1,252			1,614
Cash Provided By (Used For) Financing Activities		164,253			(341	)		(1,565	)
Effect of Exchange Rates on Cash		82			3			(1	)
Increase (Decrease) in Cash and Cash Equivalents		47,255			(3,539	)		(11,790	)
Cash and Cash Equivalents at Beginning of Year		7,380			10,919			22,709
Cash and Cash Equivalents at End of Year	$	54,635		$	7,380		$	10,919
Supplemental Cash Flow Information:
Interest Paid	$	3,543		$	1,068		$	1,900
Income Taxes Paid, net of refunds	$	8,025		$	9,330		$	5,785
Value of Shares Issued as Consideration for Acquisition	$	13,473			—			—

See notes to consolidated financial statements.

34

ASTRONICS CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

	Year Ended December 31,
($ In thousands)	2013			2012			2011
Common Stock
Beginning of Year	$	109		$	97		$	89
Issuance of Common Shares as Consideration for Acquisition		3
Exercise of Stock Options and Stock Compensation Expense – Net of Taxes		1			2			3
Retirement of Treasury Stock		—			(2	)		—
Class B Stock Converted to Common Stock		20			12			5
End of Year	$	133		$	109		$	97
Convertible Class B Stock
Beginning of Year	$	65		$	80		$	84
Exercise of Stock Options and Stock Compensation Expense – Net of Taxes		1			—			1
Retirement of Treasury Stock		—			(3	)		—
Class B Stock Converted to Common Stock		(20	)		(12	)		(5	)
End of Year	$	46		$	65		$	80
Treasury Stock
Beginning of Year	$	—		$	(2,281	)	$	(2,281	)
Retirement of Treasury Shares		—			2,281			—
End of Year	$	—		$	—		$	(2,281	)
Additional Paid in Capital
Beginning of Year	$	22,854		$	19,231		$	14,278
Issuance of Common Shares as Consideration for Acquisition		13,470			—			—
Retirement of Treasury Stock		—			(693	)		—
Exercise of Stock Options and Stock Compensation Expense - Net of Taxes		4,502			4,316			4,953
End of Year	$	40,826		$	22,854		$	19,231
Accumulated Comprehensive Loss
Beginning of Year	$	(4,783	)	$	(886	)	$	(2	)
Foreign Currency Translation Adjustments		(131	)		183			(90	)
Mark to Market Adjustments for Derivatives – Net of Taxes		73			114			82
Retirement Liability Adjustment – Net of Taxes		1,230			(4,194	)		(876	)
End of Year	$	(3,611	)	$	(4,783	)	$	(886	)
Retained Earnings
Beginning of Year	$	106,889		$	86,622		$	65,047
Net income		27,266			21,874			21,591
Retirement of Treasury Stock		—			(1,583	)		—
Cash Paid in Lieu of Fractional Shares from Stock Distribution		(40	)		(24	)		(16	)
End of Year	$	134,115		$	106,889		$	86,622
Total Shareholders’ Equity	$	171,509		$	125,134		$	102,863
Shares (in thousands)
Common Stock
Beginning of Year		10,865			9,681			8,973
Issuance of Common Shares as Consideration for Acquisition		264			—			—
Exercise of Stock Options		145			194			232
Retirement of Treasury Shares		—			(179	)		—
Class B Stock Converted to Common Stock		1,994			1,169			476
End of Year		13,268			10,865			9,681
Convertible Class B Stock
Beginning of Year		6,488			7,971			8,374
Exercise of Stock Options		96			35			73
Retirement of Treasury Shares		—			(349	)		—
Class B Stock Converted to Common Stock		(1,994	)		(1,169	)		(476	)
End of Year		4,590			6,488			7,971
Treasury Stock
Beginning of Year		—			528			528
Retirement of Treasury Shares		—			(528	)		—
End of Year		—			—			528

See notes to consolidated financial statements

35

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES AND PRACTICES

Description of the Business

Astronics is a leading supplier of products to the aerospace and defense industries. Our products include advanced, high-performance lighting and safety systems, electrical power generation, distribution and motion systems, avionics and structure and other products for the global aerospace industry as well as test, training and simulation systems primarily for the military.

We have twelve primary locations, ten in the United States, one in Canada, and one in France. We design and build our products through our wholly owned subsidiaries Astronics Advanced Electronic Systems Corp. (“AES”); Astronics AeroSat Corporation (“AeroSat”); Ballard Technology, Inc. (“Ballard”); DME Corporation (“DME”); Luminescent Systems, Inc. (“LSI”); Luminescent Systems Canada, Inc. (“LSI Canada”); Max-Viz, Inc. (“Max-Viz”); Peco, Inc. (“Peco”); PGA Electronic s.a. (“PGA”); and Astronics Test Systems, Inc. (“ATS”).

On May 28, 2013 Astronics entered into a Stock Purchase Agreement to acquire all of the outstanding capital stock of Peco. Peco designs and manufacturers highly engineered commercial aerospace interior components and systems for the aerospace industry. The acquisition was completed on July 18, 2013. On October 1, 2013 Astronics acquired certain assets and liabilities from AeroSat Corporation and related entities, a supplier of aircraft antenna systems. On December 5, 2013, Astronics completed the acquisition of PGA. PGA designs and manufactures seat motion and lighting systems primarily for business and first class aircraft seats and is Europe’s leading provider of in-flight entertainment/communication systems as well as cabin management systems for private VVIP aircraft. Peco, AeroSat and PGA are all part of our Aerospace segment.

At December 31, 2013, the Company has two reportable segments, Aerospace and Test Systems. The Aerospace segment designs and manufactures products for the global aerospace industry. The Test Systems segment designs, manufactures and maintains communications and weapons test systems and training and simulation devices for military applications.

On February 28, 2014, Astronics acquired, through a wholly owned subsidiary Astronics Test Systems, Inc. (“ATS”), certain assets and liabilities of EADS North America’s Test and Services division, located in Irvine, California. ATS is a leading provider of highly engineered automatic test systems, subsystems and instruments for semi-conductor and consumer electronics products to both the commercial and defense industries. ATS will be reported as a member of our Test Systems segment.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated.

Acquisitions are accounted for under the acquisition method and, accordingly, the operating results for the acquired companies are included in the consolidated statements of operations from the respective dates of acquisition.

Revenue and Expense Recognition

In the Aerospace segment, revenue is recognized on the accrual basis at the time of shipment of goods and transfer of title. There are no significant contracts allowing for right of return.

In the Test Systems segment, revenue of approximately $4.4 million, $4.2 million and $10.0 million for the years ended December 31, 2013, 2012 and 2011, respectively, was recognized from long-term, fixed-price contracts using the percentage-of-completion method of accounting, measured by multiplying the estimated total contract value by the ratio of actual contract costs incurred to date to the estimated total contract costs. Substantially all long-term contracts are with U.S. government agencies and contractors thereto. The Company makes significant estimates involving its usage of percentage-of-completion accounting to recognize contract revenues. The Company periodically reviews contracts in process for estimates-to-completion, and revises estimated gross profit accordingly. While the Company believes its estimated gross profit on contracts in process is reasonable, unforeseen events and changes in circumstances can take place in a subsequent accounting period that may cause the Company to revise its estimated gross profit on one or more of its contracts in process. Accordingly, the ultimate gross profit realized upon completion of such contracts can vary from estimated amounts between accounting periods. Revenue not recognized using the percentage-of-completion method is recognized at the time of shipment of goods and transfer of title.

- 36 -

Cost of Products Sold, Engineering and Development and Selling, General and Administrative Expenses

Cost of products sold includes the costs to manufacture products such as direct materials and labor and manufacturing overhead as well as all engineering and developmental costs. The Company is engaged in a variety of engineering and design activities as well as basic research and development activities directed to the substantial improvement or new application of the Company’s existing technologies. These costs are expensed when incurred and included in cost of products sold. Research and development, design and related engineering amounted to $52.8 million in 2013, $44.9 million in 2012 and $36.1 million in 2011. Selling, general and administrative expenses include costs primarily related to our sales, marketing and administrative departments.

Shipping and Handling

Shipping and handling costs are expensed as incurred and are included in costs of products sold.

Stock Distribution

On September 27, 2013, the Company announced a one-for-five distribution of Class B Stock to holders of both Common and Class B Stock. Stockholders received one share of Class B Stock for every five shares of Common and Class B Stock held on the record date of October 10, 2013. Fractional shares were paid in cash. All share quantities, share prices and per share data reported throughout this report have been adjusted to reflect the impact of this distribution.

Equity-Based Compensation

The Company accounts for its stock options following Accounting Standards Codification (“ASC”) Topic 718 Compensation – Stock Compensation (“ASC Topic 718”). This Topic requires all equity-based payments to employees, including grants of employee stock options, to be recognized in the statement of earnings based on the grant date fair value of the award. For awards with graded vesting, the Company uses a straight-line method of attributing the value of stock-based compensation expense, subject to minimum levels of expense, based on vesting.

Under ASC Topic 718, stock compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. Vesting requirements vary for directors, officers and key employees. In general, options granted to outside directors vest six months from the date of grant and options granted to officers and key employees vest with graded vesting over a five-year period, 20% each year, from the date of grant.

The tax benefits from share based payment arrangements were approximately $1.2 million in 2013, $1.2 million in 2012, and $1.6 million in 2011. These were classified as cash flows from financing activities.

Cash and Cash Equivalents

All highly liquid instruments with a maturity of three months or less at the time of purchase are considered cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts

The Company will record a valuation allowance to account for potentially uncollectible accounts receivable. The allowance is determined based on our knowledge of the business, specific customers, review of the receivables’ aging and a specific identification of accounts where collection is at risk. Account balances are charged against the allowance after all means of collections have been exhausted and recovery is considered remote. The Company typically does not require collateral.

Inventories

Inventories are stated at the lower of cost or market, cost being determined in accordance with the first-in, first-out method. The Company records valuation reserves to provide for excess, slow moving or obsolete inventory or to reduce inventory to the lower of cost or market value. In determining the appropriate reserve, the Company considers the age of inventory on hand, the overall inventory levels in relation to forecasted demands as well as reserving for specifically identified inventory that the Company believes is no longer salable.

Property, Plant and Equipment

Depreciation of property, plant and equipment is computed using the straight-line method for financial reporting purposes and using accelerated methods for income tax purposes. Estimated useful lives of the assets are as follows: buildings, 25-40 years; machinery and equipment, 4-10 years. Leasehold improvements are amortized over the shorter of the terms of the lease or the estimated useful lives of the assets.

- 37 -

The cost of properties sold or otherwise disposed of and the accumulated depreciation thereon are eliminated from the accounts, and the resulting gain or loss, as well as maintenance and repair expenses, are reflected in income. Replacements and improvements are capitalized.

Depreciation expense was approximately $5.7 million, $4.4 million and $4.0 million in 2013, 2012 and 2011, respectively.

Long-Lived Assets

Long-lived assets to be held and used are initially recorded at cost. The carrying value of these assets is evaluated for recoverability whenever adverse effects or changes in circumstances indicate that the carrying amount may not be recoverable. Impairments are recognized if future undiscounted cash flows from operations are not expected to be sufficient to recover long-lived assets. The carrying amounts are then reduced to fair value, which is typically determined by using a discounted cash flow model.

Goodwill

The Company tests goodwill at the reporting unit level on an annual basis or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company has nine reporting units, however as of November 1, 2013 (the annual testing date), only six reporting units have goodwill and were subject to the goodwill impairment test.

We may elect to perform a qualitative assessment that considers economic, industry and company-specific factors for all or selected reporting units. If, after completing the assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we proceed to a quantitative test. We may also elect to perform a quantitative test instead of a qualitative test for any or all of our reporting units.

Quantitative testing requires a comparison of the fair value of each reporting unit to its carrying value. We use the discounted cash flow method to estimate the fair value of our reporting units. The discounted cash flow method incorporates various assumptions, the most significant being projected revenue growth rates, operating margins and cash flows, the terminal growth rate and the weighted average cost of capital. If the carrying value of the reporting unit exceeds its fair value, goodwill is considered impaired and any loss must be measured. To determine the amount of the impairment loss, the implied fair value of goodwill is determined by assigning a fair value to all of the reporting unit’s assets and liabilities, including any unrecognized intangible assets, as if the reporting unit had been acquired in a business combination at fair value. If the carrying amount of the reporting unit goodwill exceeds the implied fair value of that goodwill, an impairment loss would be recognized in an amount equal to that excess.

See Note 5 for further information regarding the goodwill impairment charges in 2011 relating to our Test Systems reporting unit. There were no impairment charges in 2013 or 2012.

Intangible Assets

Acquired intangibles are generally valued based upon future economic benefits such as earnings and cash flows. Acquired identifiable intangible assets are recorded at fair value and are amortized over their estimated useful lives. Acquired intangible assets with an indefinite life are not amortized, but are reviewed for impairment at least annually or more frequently whenever events or changes in circumstances indicate that the carrying amount of those assets are below its estimated fair value.

Impairment is tested under ASC 350, Intangibles - Goodwill and Other, as amended by Accounting Standards Update (“ASU”) 2012-02, by first performing a qualitative analysis in a manner similar to the testing methodology of goodwill discussed previously. The qualitative factors applied under this new provision indicated no impairment to the Company’s indefinite lived intangible assets in 2013 and 2012. See Note 4 for further information regarding the impairment charges in 2011 relating to intangible assets in our Test Systems reporting unit.

Financial Instruments

The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, notes payable, long-term debt and interest rate swaps. The Company performs periodic credit evaluations of its customers’ financial condition and generally does not require collateral. The Company does not hold or issue financial instruments for trading purposes. Due to their short-term nature, the carrying values of cash and equivalents, accounts receivable, accounts payable, and notes payable approximate fair value. The carrying value of the Company’s variable rate long-term debt instruments also approximates fair value due to the variable rate feature of these instruments. The Company’s interest rate swaps are recorded at fair value as described under Note 14 - Fair Value.

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Derivatives

The accounting for changes in the fair value of derivatives depends on the intended use and resulting designation. The Company’s use of derivative instruments was limited to a cash flow hedge for interest rate risk associated with long-term debt. Interest rate swaps are used to adjust the proportion of total debt that is subject to variable and fixed interest rates. The interest rate swaps are designated as hedges of the amount of future cash flows related to interest payments on variable-rate debt that, in combination with the interest payments on the debt, convert a portion of the variable-rate debt to fixed-rate debt. The Company records all derivatives on the balance sheet at fair value. The related gains or losses, to the extent the derivatives are effective as a hedge, are deferred in shareholders’ equity as a component of Accumulated Other Comprehensive Income (Loss) (AOCI) and reclassified into earnings at the time interest expense is recognized on the associated long-term debt. Any ineffectiveness is recorded in the Consolidated Statements of Operations.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities and the reported amounts of revenues and expenses during the reporting periods in the financial statements and accompanying notes. Actual results could differ from those estimates.

Foreign Currency Translation

The Company accounts for its foreign currency translation in accordance with ASC Topic 830, Foreign Currency Translation. The aggregate transaction gain or loss included in operations was insignificant for 2013, 2012 and 2011.

Dividends

The Company has not paid any cash dividends in the three-year period ended December 31, 2013. It has no plans to pay cash dividends as it plans to retain all cash from operations as a source of capital to finance growth in the business.

Loss Contingencies

Loss contingencies may from time to time arise from situations such as claims and other legal actions. Loss contingencies are recorded as liabilities when it is probable that a liability has been incurred and the amount of the loss is reasonably estimable. Disclosure is required when there is a reasonable possibility that the ultimate loss will exceed the recorded provision. Contingent liabilities are often resolved over long time periods. In recording liabilities for probable losses, management is required to make estimates and judgments regarding the amount or range of the probable loss. Management continually assesses the adequacy of estimated loss contingencies and, if necessary, adjusts the amounts recorded as better information becomes known.

Acquisitions

The Company accounts for its acquisitions under ASC Topic 805, Business Combinations and Reorganizations (“ASC Topic 805”). ASC Topic 805 provides guidance on how the acquirer recognizes and measures the consideration transferred, identifiable assets acquired, liabilities assumed, non-controlling interests, and goodwill acquired in a business combination. ASC Topic 805 also expands required disclosures surrounding the nature and financial effects of business combinations. Acquisition costs are expensed as incurred. Acquisition expenses in 2013 were approximately $1.9 million and were insignificant in 2012 and 2011. See Note 19 regarding the acquisitions in 2013 and 2012.

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Newly Adopted and Recent Accounting Pronouncements

On January 1, 2013, the Company adopted the new provisions of Accounting Standards Update (“ASU”) No. 2013-02 Comprehensive Income (Topic 220). The amendments in this ASU require the Company to provide information about the amounts reclassified out of accumulated other comprehensive income, by component. Other than requiring additional disclosures, the adoption of this amendment does not have a material impact on the Company’s financial statements.

The Company’s management has reviewed recent accounting pronouncements issued through the date of the issuance of financial statements. In management’s opinion, none of these new pronouncements apply or will have a material effect on the Company’s financial statements

NOTE 2 — ACCOUNTS RECEIVABLE

Accounts receivable at December 31 consists of:

(In thousands)	2013			2012
Trade Accounts Receivable	$	58,224		$	44,196
Long-term Contract Receivables:
Amounts Billed		—			907
Unbilled Recoverable Costs and Accrued Profits		2,858			1,020
Total Long-term Contract Receivables		2,858			1,927
Total Receivables		61,082			46,123
Less Allowance for Doubtful Accounts		(140	)		(650	)
	$	60,942		$	45,473

NOTE 3 — INVENTORIES

Inventories at December 31 are as follows:

(In thousands)	2013		2012
Finished Goods		21,627	$	10,864
Work in Progress		15,017		8,960
Raw Material		48,625		28,800
	$	85,269	$	48,624

At December 31, 2013, the Company’s reserve for inventory valuation was $11.0 million, or 11.5% of gross inventory. At December 31, 2012, the Company’s reserve for inventory valuation was $12.0 million, or 19.8% of gross inventory.

NOTE 4 — INTANGIBLE ASSETS

The following table summarizes acquired intangible assets as follows:

	December 31, 2013						December 31, 2012
(In thousands)	Weighted Average Life		Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Patents		11 Years	$	2,146	$	891	$	1,271	$	784
Trade Names		10 Years		7,453		552		2,453		162
Completed and Unpatented Technology		10 Years		15,377		2,620		6,377		1,749
Backlog and Customer Relationships		14 Years		88,998		7,210		13,085		3,968
Total Intangible Assets		13 Years	$	113,974	$	11,273	$	23,186	$	6,663

Amortization is computed on the straight-line method for financial reporting purposes. Amortization expense for intangibles was $4.9 million, $2.3 million and $0.5 million for 2013, 2012 and 2011, respectively. The Company has a $0.5 million identifiable asset with an indefinite life included above in Trade Names at December 31, 2013.

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Based upon acquired intangible assets at December 31, 2013, amortization expense for each of the next five years is estimated to be:

(In thousands)
2014	$	10,129
2015		8,249
2016		8,073
2017		8,064
2018		7,974

For the Company’s indefinite-lived intangible asset, the impairment test consists of comparing the fair value, determined using the relief from royalty method, with its carrying amount. An impairment loss would be recognized for the carrying amount in excess of its fair value. For the years ended December 31, 2013 and 2012, the Company recorded no impairment charge to any of its indefinite-lived intangible assets. For the year ended December 31, 2011, the Company recorded a $0.1 million impairment charge related to Trade Names assigned to the Company’s Test Systems reporting unit, as of the annual impairment test date of November 1, 2011. Impairment losses are reported on the Impairment Loss line of the Consolidated Statements of Operations.

NOTE 5 — GOODWILL

The following table summarizes the changes in the carrying amount of goodwill for 2013 and 2012:

(In thousands)	2013			2012
Balance at Beginning of the Year	$	21,923		$	17,185
Acquisition		79,155			4,665
Foreign Currency Translations		(80	)		73
Balance at End of the Year	$	100,998		$	21,923
Goodwill	$	117,540		$	38,465
Accumulated Impairment Losses		(16,542	)		(16,542	)
Goodwill - Net	$	100,998		$	21,923

As discussed in Note 1, goodwill is not amortized but is periodically tested for impairment. For the six reporting units with goodwill at November 1, 2013, the Company performed a quantitative assessment of the goodwill’s carrying value. The assessment indicated no impairment to the carrying value of goodwill in any of the Company’s reporting units and no impairment charge recognized.

During fiscal 2011, the weak economic conditions resulted in a decline in business and a reduction in forecasted cash flows in the Test Systems reporting unit. Based on this evaluation, we determined that the fair value of the Test Systems reporting unit was less than its carrying value. None of the reporting units in the Aerospace Segment indicated impairment. Following this assessment, ASC Topic 350 required us to perform a second step in order to determine the implied fair value of goodwill in the Test Systems reporting unit and to compare it to its carrying value. The activities in the second step included hypothetically valuing all of the tangible and intangible assets of the impaired reporting unit using market participant assumptions, as if the reporting unit had been acquired in a business combination as of the date of the valuation.

As a result of this assessment in 2011, the Company recorded an impairment charge of approximately $2.4 million in the December 31, 2011 Consolidated Statement of Operations. The impairment loss is reported on the Impairment Loss line of the Consolidated Statements of Operations. None of this loss related to goodwill is immediately deductible for tax purposes. At December 31, 2013 and 2012, the Test Systems segment has no recorded goodwill, as a result of previous impairment charges. There was no impairment to the carrying value of goodwill in 2013 or 2012.

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NOTE 6 — LONG-TERM DEBT AND NOTE PAYABLE

Long-term debt consists of the following:

	(In thousands)
	2013		2012
Senior Term Note issued under the Third Amended and Restated Credit Agreement dated July 18, 2013. Scheduled amounts payable quarterly for $2.375 million to June 30, 2015, $3.562 million to June 30, 2016, $4.750 million to March 31, 2018 with the remainder due June 30, 2018. Mandatory unscheduled prepayments for 25% of Excess Cash Flow and Net Proceeds received in connection with Asset Sales and Insurance Recoveries. Interest is at LIBOR plus between 2.25 and 3.50% (3.2% at December 31, 2013)	$	185,250	$	—
Series 2007 Industrial Revenue Bonds issued through the Erie County, New York Industrial Development Agency payable $340,000 annually through 2017 and $330,000 annually thereafter through maturity with interest reset weekly (3.2% at December 31, 2013).		4,720		5,060
Series 1999 Industrial Revenue Bonds issued through the Erie County, New York Industrial Development Agency payable $350,000 annually through 2017 and $145,000 in 2018, with interest reset weekly (3.2% at December 31, 2013).		1,545		1,895
Series 1998 Industrial Revenue Bonds issued through the Business Finance Authority of the State of New Hampshire payable $400,000 annually through 2018 with interest reset weekly (3.2% at December 31, 2013).		2,050		2,450
Revolving Credit Line, payable August 31, 2016. Interest was at LIBOR plus between 1.50% and 2.50%. The entire amount was paid off upon the issuance of the Senior Term Notes under the Third Amended and Restated Credit Agreement dated July 18, 2013.		—		7,000
Senior Term Note, payable $2.0 million quarterly in 2013 with a balloon payment of $5.0 million in January 2014. Interest was at LIBOR plus between 2.25% and 3.50%. The entire amount was refinanced in conjunction with the issuance of the Senior Term Notes under the Third Amended and Restated Credit Agreement dated July 18, 2013.		—		13,000
Note Payable at Canadian Prime		—		566
Other Bank Debt		2,936		—
Capital Lease Obligations and Other Debt		3,819		12
		200,320		29,983
Less Current Maturities		12,279		9,268
	$	188,041	$	20,715

Principal maturities of long-term debt are approximately:

(In thousands)
2014	$	12,279
2015		14,237
2016		18,930
2017		21,259
2018		130,213
Thereafter		3,402
	$	200,320

The Company’s obligations under the Credit Agreement as amended are jointly and severally guaranteed by each domestic subsidiary of the Company other than a non-material subsidiary. The obligations are secured by a first priority lien on substantially all of the Company’s and the guarantors’ assets.

The Company extended and modified its existing credit facility by entering into Amendment No. 1 dated as of March 27, 2013 (the “Amendment”), to the Second Amended and Restated Credit Agreement. The Amendment provided for an increase in the Company’s revolving credit facility from $35 million to $75 million and for an extension of the maturity date. Interest remained at a rate of LIBOR plus between 1.50% and 2.50% based on the Company’s Leverage Ratio under the Credit Agreement. The credit facility allocates up to $20 million of the $75 million revolving credit line for the issuance of letters of credit, including certain existing letters of credit.

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On July 18, 2013, in connection with the funding of the Peco Acquisition (See Note 19), the Company amended its existing credit facility by entering into a Third Amended and Restated Credit Agreement ( the “Credit Agreement”). The Credit Agreement continued to provide for a $75 million five-year revolving credit facility and a new $190 million five-year term loan, both expiring on June 30, 2018. At December 31, 2013, there were no amounts owing under the revolver, there were $9.8 million in outstanding letters of credit leaving $65.2 million available. The amended facilities carry an interest rate ranging from 225 basis points to 350 basis points above LIBOR, depending on the Company’s leverage ratio as defined in the Credit Agreement. Variable principal payments on the term loan are quarterly through March 31, 2018 with a balloon payment at maturity and with mandatory prepayments being required in certain circumstances. The credit facility is secured by substantially all of the Company’s assets. In addition, the Company is required to pay a commitment fee of between 0.25% and 0.50% on the unused portion of the total credit commitment for the preceding quarter, based on the Company’s leverage ratio under the Credit Agreement.

The Credit Agreement contains various financial covenants. The covenant for minimum fixed charge coverage, defined as the ratio of the sum of net income, interest expense, provision for taxes based on income, total depreciation expense, total amortization expense, other non-cash items reducing net income minus other non-cash items increasing net income minus capital expenditures, minus cash taxes paid and dividends paid to interest expense plus scheduled principal payments on long-term debt calculated on a rolling four-quarter basis is not to be less than 1.25 to 1 for each fiscal quarter ending on or after September 30, 2011. The Company’s fixed charge coverage was 3.70 to 1 at December 31, 2013. The covenant for maximum leverage, defined as the ratio of the sum of net income, interest expense, provision for taxes based on income, total depreciation expense, total amortization expense, other non-cash items reducing net income minus other non-cash items increasing net income to funded debt calculated on a rolling four-quarter basis is not to exceed 3.75 to 1 through March 31, 2015 or to exceed 3.5 to 1 each fiscal quarter thereafter. The Company’s leverage ratio was 2.68 to 1 at December 31, 2013.

The Company modified its existing credit facility by entering into Amendment No. 1 dated as of December 31, 2013 (the “Amendment”), to the Third Amended and Restated Credit Agreement, with HSBC Bank USA, National Association (“HSBC”), as Agent and with HSBC, Bank of America, N.A. and Manufacturers and Traders Trust Company, as Lenders ( the “Credit Agreement”). The Amendment modifies the definition of EBITDA by adding back certain non-recurring expenses and adjustments and modifies the definition of the Fixed Charge Coverage Ratio by excluding certain capital expenditures from the computation.

In the event of voluntary or involuntary bankruptcy of the Company or any subsidiary, all unpaid principal and other amounts owing under the Credit Agreement automatically become due and payable. Other events of default, such as failure to make payments as they become due and breach of financial and other covenants, change of control, judgments over a certain amount, and cross default under other agreements give the Agent the option to declare all such amounts immediately due and payable.

The Industrial Revenue Bonds are held by institutional investors and are guaranteed by a bank letter of credit, which is collateralized by certain property, plant and equipment assets, the carrying value of which approximates the principal balance on the bonds.

NOTE 7 — WARRANTY

In the ordinary course of business, the Company warrants its products against defects in design, materials and workmanship typically over periods ranging from twelve to sixty months. The Company determines warranty reserves needed by product line based on experience and current facts and circumstances. Activity in the warranty accrual, which is included in other accrued expenses on the Consolidated Balance Sheets, is summarized as follows:

(In thousands)	2013			2012			2011
Balance at Beginning of the Year	$	2,551		$	1,092		$	1,699
Warranty Liabilities Acquired		671			—			—
Warranties Issued		722			2,430			1,446
Reassessed Warranty Exposure		(222	)		—			(95	)
Warranties Settled		(926	)		(971	)		(1,958	)
Balance at End of the Year	$	2,796		$	2,551		$	1,092

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NOTE 8 — INCOME TAXES

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities. Deferred tax assets are reduced, if deemed necessary, by a valuation allowance for the amount of tax benefits which are not expected to be realized. Investment tax credits are recognized on the flow through method.

The FASB issued ASC Topic 740-10 Overall - Uncertainty in Income Taxes (“ASC Topic 740-10”) which clarifies the accounting and disclosure for uncertainty in tax positions, as defined. ASC Topic 740-10 seeks to reduce the diversity in practice associated with certain aspects of the recognition and measurement related to accounting for income taxes. The Company is subject to the provisions of ASC Topic 740-10 and has analyzed filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions.

Should the Company need to accrue a liability for uncertain tax benefits, any interest associated with that liability will be recorded as interest expense. Penalties, if any, would be recognized as operating expenses. There are no penalties or interest liabilities accrued as of December 31, 2013 or 2012, nor are any penalties or interest costs included in expense for each of the years ended December 31, 2013, 2012 and 2011. The years under which we conducted our evaluation coincided with the tax years currently still subject to examination by major federal and state tax jurisdictions, those being 2011 through 2013 for federal purposes and 2010 through 2013 for state purposes.

Pretax income from the Company’s foreign subsidiaries amounted to $0.2 million, $1.0 million and $0.9 million for 2013, 2012 and 2011, respectively. The balances of pretax earnings for each of those years were domestic.

The provision (benefit) for income taxes consists of the following:

(In thousands)	2013			2012			2011
Current
US Federal	$	10,904		$	11,173		$	6,840
State		682			78			114
Foreign		81			2			47
Deferred		(722	)		(1,544	)		423
	$	10,945		$	9,709		$	7,424

The effective tax rates differ from the statutory federal income tax rate as follows:

	2013			2012			2011
Statutory Federal Income Tax Rate		35.0	%		35.0	%		35.0	%
Permanent Items
Non-deductible Stock Compensation Expense		1.0	%		1.1	%		1.0	%
Domestic Production Activity Deduction		(3.0	)%		(3.0	)%		(2.9	)%
Non-deductible Acquisition Costs		1.0	%		—	%		—	%
Other		—	%		0.1	%		(0.2	)%
Foreign Tax Benefits		(0.3	)%		(1.2	)%		(1.0	)%
State Income Tax (Benefits), Net of Federal Income Tax Effect		(0.1	)%		(0.1	)%		1.4	%
Research and Development Tax Credits		(5.0	)%		(1.1	)%		(6.1	)%
Other		—	%		(0.1	)%		(1.6	)%
Effective Tax Rate		28.6	%		30.7	%		25.6	%

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

No provision has been made for U.S. federal or foreign taxes on that portion of certain foreign subsidiaries’ undistributed earnings ($3.8 million at December 31, 2013) considered to be permanently reinvested. It is not practicable to determine the amount of tax that would be payable if these amounts were repatriated to the U.S.

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Significant components of the Company’s deferred tax assets and liabilities as of December 31, are as follows:

	2013			2012
(In thousands)
Deferred Tax Assets:
Goodwill and Intangible Assets	$	3,367		$	6,918
Asset Reserves		5,780			4,901
Deferred Compensation		6,564			6,656
State Investment Tax Credit Carryforwards, Net of Federal Tax		665			665
Customer Advanced Payments and Deferred Revenue		956			1,113
State Net Operating Loss Carryforwards and Other		2,639			729
Total Gross Deferred Tax Assets		19,971			20,982
Valuation Allowance for State and Foreign Deferred Tax Assets and Tax Credit Carryforwards, Net of Federal Tax		(2,509	)		(2,190	)
Deferred Tax Assets		17,462			18,792
Deferred Tax Liabilities:
Depreciation		7,164			4,806
Intangible Assets		27,742			—
Other		2,465			—
Deferred Tax Liabilities		37,371			4,806
Net Deferred Tax Asset (Liabilities)	$	(19,909	)	$	13,986

The net deferred tax assets and liabilities presented in the Consolidated Balance Sheets are as follows at December 31:

(In thousands)	2013			2012
Deferred Tax Asset — Current	$	5,291		$	4,967
Deferred Tax Asset — Long-term		—			9,019
Deferred Tax Liabilities — Current		(970	)		—
Deferred Tax Liabilities — Long-term		(24,230	)		—
Net Deferred Tax Liability	$	(19,909	)	$	13,986

At December 31, 2013, state and foreign tax credit carryforwards amounted to approximately $1.5 million. These state and foreign tax credit carryforwards will expire from 2015 through 2028.

Due to the uncertainty as to the Company’s ability to generate sufficient taxable income in certain states in the future and utilize certain of the Company’s state operating loss carryforwards before they expire, the Company has recorded a valuation allowance accordingly. These state net operating loss carryforwards amount to approximately $17.8 million and expire at various dates from 2027 through 2033. As a result, the excess tax benefits included in certain state net operating loss carryforwards but not reflected in deferred tax assets was approximately $4.8 million. The excess tax benefits associated with stock option exercises are recorded directly to shareholders’ equity only when realized and amounted to approximately $1.3 million and $1.2 million for the years ended December 31, 2013 and 2012 respectively.

We have unrecognized tax benefits which, if ultimately recognized, will reduce our annual effective tax rate. Reserves for uncertain income tax positions have been recorded pursuant to ASC Topic 740-10. An estimate of the range of possible change during 2014 to the reserves cannot be made as of December 31, 2013. A reconciliation of the total amounts of unrecognized tax benefits, excluding interest and penalties which are insignificant, is as follows:

(in thousands)	2013		2012			2011
Balance at Beginning of the Year	$	840	$	880		$	1,470
Increases (Decreases) as a Result of Tax Positions Taken in Prior Years		145		(220	)		(1,090	)
Increases as a Result of Tax Positions Taken in the Current Year		955		180			500
Balance at End of the Year	$	1,940	$	840		$	880

In January 2013, the American Taxpayer Relief Act of 2012 extended the research and development tax credits for the year ended December 31, 2012. As the new law was not enacted until 2013, the 2012 tax provision contains no estimated benefit for research and development tax credits. Had the law been enacted in 2012, the company would have recognized approximately $0.7 million in tax benefits (net of a $0.7 million reserve) for the year ended December 31, 2012. The Company recognized a total benefit of $1.1 million in 2013 related to the 2012 credit.

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NOTE 9 — PROFIT SHARING/401(k) PLAN

The Company offers eligible domestic full-time employees participation in the ATRO Profit Sharing/401(k) Plan. The plan provides for annual contributions based on percentages of pretax income. In addition, employees may contribute a portion of their salary to the 401(k) plan which is partially matched by the Company. The plan may be amended or terminated at any time.

Total charges to income before income taxes for these plans were approximately $3.7 million, $3.0 million and $2.6 million in 2013, 2012 and 2011, respectively.

NOTE 10—RETIREMENT PLANS AND RELATED POST RETIREMENT BENEFITS

The Company has two non-qualified supplemental retirement defined benefit plans (“SERP” and “SERP II”) for certain current and retired executive officers. On March 6, 2012 the Company adopted SERP II for eligible current executive officers. The Company recorded a liability at the date of adoption of the new plan in the amount of approximately $5.8 million for the projected benefit obligation.

The accumulated benefit obligation of the plans as of December 31, 2013 and 2012 amounts to $10.1 million and $9.5 million, respectively.

The Plans provide for benefits based upon average annual compensation and years of service and in the case of SERP, there are offsets for Social Security and Profit Sharing benefits. It is the Company’s intent to fund the plans as plan benefits become payable, since no assets exist at December 31, 2013 or 2012 for either of the plans.

The Company accounts for the funded status (i.e., the difference between the fair value of plan assets and the projected benefit obligations) of its pension plans in accordance with the recognition and disclosure provisions of ASC Topic 715, Compensation, Retirement Benefits (“ASC Topic 715”), which requires the Company to recognize the funded status in its balance sheet, with a corresponding adjustment to AOCI, net of tax. These amounts will be subsequently recognized as net periodic pension cost pursuant to the Company’s historical policy for amortizing such amounts. Further, actuarial gains and losses that arise in subsequent periods and are not recognized as net periodic pension cost in the same periods will be recognized as a component of AOCI. Those amounts will be subsequently recognized as a component of net periodic pension cost on the same basis as the amounts recognized in AOCI.

Unrecognized prior service costs of $3.5 million ($5.3 million net of $1.8 million in taxes) and unrecognized actuarial losses of $1.2 million ($1.9 million net of $0.7 million in taxes) are included in AOCI at December 31, 2013 and have not yet been recognized in net periodic pension cost. The prior service cost included in AOCI and amounts expected to be recognized in net periodic pension cost during the fiscal year-ended December 31, 2014 is $0.3 million ($0.5 million net of $0.2 million in taxes). The actuarial loss included in AOCI expected to be recognized in net periodic pension cost during the fiscal year-ended December 31, 2014 is $0.1 million, net of taxes.

The reconciliation of the beginning and ending balances of the projected benefit obligation of the plans for the years ended December 31 is as follows:

(In thousands)	2013			2012
Funded Status
Projected Benefit Obligation
Beginning of the Year — January 1	$	15,042		$	7,588
Adoption of SERP II		—			5,790
Service Cost		295			303
Interest Cost		624			548
Actuarial (Gain) Loss		(1,299	)		1,161
Benefits Paid		(348	)		(348	)
End of the Year — December 31	$	14,314		$	15,042

The decrease in the 2013 projected benefit obligation is due primarily to an increase in the discount rate. The increase in the 2012 projected benefit obligation is due primarily to the adoption of SERP II, the decrease in the discount rate and differences between estimated and actual salaries.

The assumptions used to calculate the projected benefit obligation as of December 31 are as follows:

	2013			2012
Discount Rate		5.10	%		4.20	%
Future Average Compensation Increases		5.00	%		5.00	%

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The plans are unfunded at December 31, 2013 and are recognized in the accompanying Consolidated Balance Sheets as a current accrued pension liability of $0.3 million and a long-term accrued pension liability of $14.0 million. This also is the expected future contribution to the plan, since the plan is unfunded.

The following table summarizes the components of the net periodic cost for the years ended December 31:

(In thousands)	2013		2012		2011
Net Periodic Cost
Service Cost — Benefits Earned During Period	$	295	$	303	$	46
Interest Cost		624		548		328
Amortization of Prior Service Cost		495		426		109
Amortization of Losses		128		91		11
Net Periodic Cost	$	1,542	$	1,368	$	494

The assumptions used to determine the net periodic cost are as follows:

	2013			2012			2011
Discount Rate		4.20	%		4.50	%		5.50	%
Future Average Compensation Increases		5.00	%		5.00	%		5.00	%

The Company expects the benefits to be paid in each of the next five years to be $0.3 million and $1.7 million in the aggregate for the next five years after that. This also is the expected Company contribution to the plans.

Participants in SERP are entitled to paid medical, dental and long-term care insurance benefits upon retirement under the plan. The measurement date for determining the plan obligation and cost is December 31.

The reconciliation of the beginning and ending balances of the accumulated postretirement benefit obligation for the years ended December 31, is as follows:

(In thousands)	2013			2012
Funded Status
Accumulated Postretirement Benefit Obligation
Beginning of the Year — January 1	$	593		$	568
Service Cost		3			2
Interest Cost		24			24
Actuarial Loss		55			42
Benefits Paid		(45	)		(43	)
End of the Year — December 31	$	630		$	593

The assumptions used to calculate the accumulated postretirement benefit obligation as of December 31 are as follows:

	2013			2012
Discount Rate		5.10	%		4.20	%

The following table summarizes the components of the net periodic cost for the years ended December 31:

(In thousands)	2013		2012		2011
Net Periodic Cost
Service Cost — Benefits Earned During Period	$	3	$	2	$	2
Interest Cost		24		24		27
Amortization of Prior Service Cost		25		26		25
Amortization of (Gains) Losses		—		—		(4	)
Net Periodic Cost	$	52	$	52	$	50

The assumptions used to determine the net periodic cost are as follows:

	2013			2012			2011
Discount Rate		4.20	%		4.50	%		5.50	%
Future Average Healthcare Benefit Increases		5.76	%		6.00	%		9.00	%

- 47 -

The Company estimates that the prior service costs and net losses in AOCI for medical, dental and long-term care insurance benefits as of December 31, 2013, that will be recognized as components of net periodic benefit cost during the year ended December 31, 2014 for the Plan will be insignificant. For measurement purposes, a 7.8% and 6.4% increase in the cost of health care benefits was assumed for 2014 and 2015 respectively and a range between 6.2% and 5.1% from 2016 through 2050. A one percentage point increase or decrease in this rate would change the post retirement benefit obligation insignificantly. The Company expects the benefits to be paid in each of the next five years to be insignificant per year and approximately $0.3 million in the aggregate for the next five years after that. This also is the expected Company contribution to the plan, as it is unfunded.

As of July 18, 2013 upon completion of the acquisition of Peco, the Company is now a participating employer in a trustee-managed multiemployer defined benefit pension plan for employees who participate in collective bargaining agreements. The plan generally provides retirement benefits to employees based on years of service to the Company. The multiemployer pension plan is managed by a board of trustees. Contributions are based on the hours worked and are expensed on a current basis.

The risks of participating in a multiemployer defined benefit pension plan are different from a single-employer plan because: (a) assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers, (b) if a participating employer stops contributing to the plan, the unfunded obligations of the plan may be required to be borne by the remaining participating employers, and (c) if the Company chooses to stop participating in a multiemployer plan, it may be required to pay a withdrawal liability to the plan. In connection with ongoing renegotiation of collective bargaining agreements, the Company may discuss and negotiate for the complete or partial withdrawal from its multiemployer pension plan. Depending on the number of employees withdrawn in any future period and the financial condition of the multiemployer plan at the time of withdrawal, the associated withdrawal liabilities could be material to the Company in the period of the withdrawal. The Company has no plans to withdraw from its multiemployer pension plan.

Western Conference of Teamsters Pension Plan (“WCTPP”) provides fixed retirement payments as a function of the total employer contributions payable for all service after 1986. However in the event WCTPP is underfunded, the monthly benefit amount can be reduced by the trustees of the plan. Plan information for the WCTPP, Employer Identification Number 91-6145047, is not publicly available for 2013. According to the most recently available Form 5500 for the plan year ended December 31, 2012, plan net assets are $32.3 billion, the total actuarial present value of accumulated plan benefits is $37.9 billion, and contributions receivable from all employers totaled $99.2 million. WCTPP is over 90.1% funded as of December 31, 2012.

The collective bargaining agreement of WCTPP requires contributions on the basis of hours worked. The agreement also has a minimum contribution requirement of $2.50 per compensable hour to a maximum of 184 hours per calendar year month and cumulatively to a maximum of 2,080 hours per calendar year, for subsequent periods.

Pension Fund	EIN/Pension Plan Number	Zone Status	Rehabilitation Plan Status	2013 Company Contributions (In thousands)			Surcharge Imposed	Expiration Date of Collective Bargaining Agreement	Plan Year End
WCTPP	91-6145047	Green	None	$	830	*	None	10/31/16	12/31

* - Total contributions for fiscal year 2013, post-acquisition contributions totaled 0.3 million.

NOTE 11 — SHAREHOLDERS’ EQUITY

Reserved Common Stock

At December 31, 2013, approximately 7.9 million shares of common stock were reserved for issuance upon conversion of the Class B stock, exercise of stock options and purchases under the Employee Stock Purchase Plan. Class B Stock is identical to Common Stock, except Class B Stock has ten votes per share, is automatically converted to Common Stock on a one for one basis when sold or transferred, and cannot receive dividends unless an equal or greater amount of dividends is declared on Common Stock.

Comprehensive Income and Accumulated Other Comprehensive Income (Loss)

Comprehensive income consists of net income and the after-tax impact of currency translation adjustments, mark to market adjustments for derivatives and retirement liability adjustments. Income taxes related to derivatives and retirement liability adjustments within other comprehensive income are generally recorded based on an effective tax rate of approximately 35%. No income tax effect is recorded for currency translation adjustments.

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The components of accumulated other comprehensive income (loss) are as follows:

(In thousands)	2013			2012
Foreign Currency Translation Adjustments	$	1,284		$	1,415
Mark to Market Adjustments for Derivatives – Before Tax		(107	)		(218	)
Tax Benefit		38			76
Mark to Market Adjustments for Derivatives – After Tax		(69	)		(142	)
Retirement Liability Adjustment – Before Tax		(7,423	)		(9,316	)
Tax Benefit		2,597			3,260
Retirement Liability Adjustment – After Tax		(4,826	)		(6,056	)
Accumulated Other Comprehensive Loss	$	(3,611	)	$	(4,783	)

- 49 -

The components of other comprehensive income (loss) are as follows:

(In thousands)	2013			2012			2011
Foreign Currency Translation Adjustments	$	(131	)	$	183		$	(90	)
Reclassification to Interest Expense		109			209			298
Mark to Market Adjustments for Derivatives		2			(34	)		(171	)
Tax Benefit (Expense)		(38	)		(61	)		(45	)
Mark to Market Adjustments for Derivatives		73			114			82
Retirement Liability Adjustment		1,893			(6,451	)		(1,348	)
Tax Benefit (Expense)		(663	)		2,257			472
Retirement Liability Adjustment		1,230			(4,194	)		(876	)
Other Comprehensive (Loss) Income	$	1,172		$	(3,897	)	$	(884	)

NOTE 12 — EARNINGS PER SHARE

Earnings per share computations are based upon the following table:

	2013		2012		2011
(In thousands, except per share data)
Net Income	$	27,266	$	21,874	$	21,591
Basic Earnings Weighted Average Shares		17,484		17,143		16,750
Net Effect of Dilutive Stock Options		875		1,014		1,067
Diluted Earnings Weighted Average Shares		18,359		18,157		17,817
Basic Earnings Per Share	$	1.56	$	1.28	$	1.29
Diluted Earnings Per Share	$	1.49	$	1.20	$	1.21

Stock options with exercise prices greater than the average market price of the underlying common shares are excluded from the computation of diluted earnings per share because they are out-of-the-money and the effect of their inclusion would be anti-dilutive. The number of common shares covered by out-of-the-money stock options were insignificant at December 31, 2013 and 0.2 million and 0.1 million for the years ended December 31, 2012 and 2011, respectively.

NOTE 13 — STOCK OPTION AND PURCHASE PLANS

The Company has stock option plans that authorize the issuance of options for shares of Common Stock to directors, officers and key employees. Stock option grants are designed to reward long-term contributions to the Company and provide incentives for recipients to remain with the Company. The exercise price, determined by a committee of the Board of Directors, may not be less than the fair market value of the Common Stock on the grant date. Options become exercisable over periods not exceeding ten years. The Company’s practice has been to issue new shares upon the exercise of the options.

Stock compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. Vesting requirements vary for directors, officers and key employees. In general, options granted to outside directors vest six months from the date of grant and options granted to officers and key employees straight line vest over a five-year period from the date of grant.

	2013		2012		2011
Weighted Average Fair Value of the Options Granted	$	23.22	$	9.93	$	12.65

The weighted average fair value for these options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:

	2013	2012	2011
Risk-free Interest Rate	0.88% - 2.22%	0.89% - 1.00%	1.55% - 2.82%
Dividend Yield	0.0%	0.0%	0.0%
Volatility Factor	0.51-0.56	0.52-0.64	0.52-0.53
Expected Life in Years	5.0 – 8.0	5.0 – 8.0	7.0 – 8.0

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To determine expected volatility, the Company uses historical volatility based on weekly closing prices of its Common Stock and considers currently available information to determine if future volatility is expected to differ over the expected terms of the options granted. The risk-free rate is based on the United States Treasury yield curve at the time of grant for the appropriate term of the options granted. Expected dividends are based on the Company’s history and expectation of dividend payouts. The expected term of stock options is based on vesting schedules, expected exercise patterns and contractual terms.

The following table provides compensation expense information based on the fair value of stock options for the years ended December 31, 2013, 2012 and 2011:

(In thousands)	2013			2012			2011
Stock Compensation Expense	$	1,384		$	1,351		$	1,061
Tax Benefit		(112	)		(136	)		(93	)
Stock Compensation Expense, Net of Tax	$	1,272		$	1,215		$	968

A summary of the Company’s stock option activity and related information for the years ended December 31 is as follows:

(Aggregate intrinsic value in thousands)	2013								2012								2011
	Options			Weighted Average Exercise Price		Aggregate Intrinsic Value			Options			Weighted Average Exercise Price		Aggregate Intrinsic Value			Options			Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding at January 1		1,521,275		$	8.23	$	65,072			1,661,445		$	6.71	$	20,532			1,904,232		$	5.58	$	38,778
Options Granted		69,720		$	42.67	$	581			130,500		$	18.08	$	129			84,938		$	22.44	$	299
Options Exercised		(181,218	)	$	4.25	$	(8,472	)		(270,670	)	$	3.67	$	(4,168	)		(327,725	)	$	4.25	$	(7,112	)
Options Forfeited		—		$	—	$	—			—		$	—	$	—			—		$	—	$	—
Outstanding at December 31		1,409,777		$	10.44	$	57,181			1,521,275		$	8.23	$	16,493			1,661,445		$	6.71	$	31,965
Exercisable at December 31		1,149,532		$	7.81	$	49,648			1,168,459		$	6.72	$	14,431			1,280,744		$	5.47	$	26,237

The aggregate intrinsic value in the preceding table represents the total pretax option holder’s intrinsic value, based on the Company’s closing stock price of Common Stock which would have been received by the option holders had all option holders exercised their options as of that date. The Company’s closing stock price of Common Stock was $51.00, $19.07 and $25.95 as of December 31, 2013, 2012 and 2011, respectively.

The weighted average fair value of options vested during 2013, 2012 and 2011 was $6.20, $6.18 and $3.54, respectively. The total fair value of options that vested during the year amounted to $1.0 million, $1.0 million and $0.6 million for the years ended December 31, 2013, 2012 and 2011, respectively. At December 31, 2013, total compensation costs related to non-vested awards not yet recognized amounts to $3.5 million and will be recognized over a weighted average period of 2.5 years.

The following is a summary of weighted average exercise prices and contractual lives for outstanding and exercisable stock options as of December 31, 2013:

	Outstanding						Exercisable
Exercise Price Range	Shares		Weighted Average Remaining Life in Years		Weighted Average Exercise Price		Shares		Weighted Average Remaining Life in Years		Weighted Average Exercise Price
$  2.68 - $ 3.45		265,404		0.9	$	3.07		265,404		0.9	$	3.07
$  4.84 - $ 7.07		578,364		4.7		5.34		533,109		4.6		5.35
$  9.15 - $10.07		141,975		3.2		9.35		141,975		3.2		9.35
$14.01 - $24.88		372,314		7.5		18.62		209,044		6.9		19.08
$41.40 - $51.93		51,720		9.9		49.49		—		—		—
		1,409,777		4.8		10.44		1,149,532		4.0		7.81

The Company established Incentive Stock Option Plans for the purpose of attracting and retaining executive officers and key employees, and to align management’s interest with those of the shareholders. Generally, the options must be exercised within ten years from the grant date and vest ratably over a five-year period. The exercise price for the options is equal to the share price at the date of grant. At December 31, 2013, the Company had options outstanding for 1,136,733 shares under the plans. At December 31, 2013, there were 531,516 options available for future grant under the plan established in 2011.

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The Company established the Directors Stock Option Plans for the purpose of attracting and retaining the services of experienced and knowledgeable outside directors, and to align their interest with those of the shareholders. The options must be exercised within ten years from the grant date. The exercise price for the option is equal to the share price at the date of grant and vests six months from the grant date. At December 31, 2013, the Company had options outstanding for 273,044 shares under the plans. At December 31, 2013, there were 145,555 options available for future grant under the plan established in 2005.

In addition to the options discussed above, the Company has established the Employee Stock Purchase Plan to encourage employees to invest in Astronics Corporation. The plan provides employees the opportunity to invest up to 20% of their cash compensation (up to an annual maximum of approximately $21,250) in Astronics common stock at a price equal to 85% of the fair market value of the Astronics common stock, determined each October 1. Employees are allowed to enroll annually. Employees indicate the number of shares they wish to obtain through the program and their intention to pay for the shares through payroll deductions over the annual cycle of October 1 through September 30. Employees can withdraw anytime during the annual cycle, and all money withheld from the employees pay is returned with interest. If an employee remains enrolled in the program, enough money will have been withheld from the employees’ pay during the year to pay for all the shares that the employee opted for under the program. At December 31, 2013, employees had subscribed to purchase 51,253 shares at $35.16 per share. The weighted average fair value of the options was approximately $9.31, $4.99 and $3.96 for options granted during the year ended December 31, 2013, 2012 and 2011, respectively.

The fair value for the options granted under the Employee Stock Purchase Plan was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:

	2013			2012			2011
Risk-free Interest Rate		0.10	%		0.17	%		0.10	%
Dividend Yield		0.0	%		0.0	%		0.0	%
Volatility Factor		.37			.37			.52
Expected Life in Years		1.0			1.0			1.0

NOTE 14 — FAIR VALUE

ASC Topic 820, Fair value Measurements and Disclosures, (“ASC Topic 820”) defines fair value, establishes a framework for measuring fair value and expands the related disclosure requirements. This statement applies under other accounting pronouncements that require or permit fair value measurements. The statement indicates, among other things, that a fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. ASC Topic 820 defines fair value based upon an exit price model. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and involves consideration of factors specific to the asset or liability.

ASC Topic 820 establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value.

- 52 -

On a Recurring Basis:

A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The following table provides the financial assets and liabilities carried at fair value measured on a recurring basis as of December 31, 2013 and December 31, 2012:

(In thousands)	Classification	Total			Level 1		Level 2			Level 3
Interest Rate Swaps	Other Liabilities
December 31, 2013		$	(108	)	$	—	$	(108	)	$	—
December 31, 2012			(218	)		—		(218	)		—
Acquisition Contingent Consideration
December 31, 2013	Current Liabilities	$	(137	)	$	—	$	—		$	(137	)
December 31, 2012			(86	)		—		—			(86	)
December 31, 2013	Other Liabilities	$	(5,709	)	$	—	$	—		$	(5,709	)
December 31, 2012			(728	)		—		—			(728	)

Interest rate swaps are securities with no quoted readily available Level 1 inputs, and therefore are measured at fair value using inputs that are directly observable in active markets and are classified within Level 2 of the valuation hierarchy, using the income approach (See Note 15).

Our Level 3 fair value liabilities represent contingent consideration recorded related to the 2011 Ballard acquisition, to be paid up to a maximum of $5.5 million if certain revenue growth targets are met over the next five years, the 2012 Max-Viz acquisition, to be paid up to a maximum of $8.0 million if certain revenue growth targets are met over the next three years and the 2013 AeroSat acquisition, to be paid up to a maximum of $53.0 million if certain revenue growth targets are met over the next two years. The calculation of additional purchase consideration (“Earn Out”) related to the acquisition of AeroSat is as follows:

	AeroSat Revenue	Earn Out Formula
2014	<$30 million	No Earn Out
	>$30 million < $50 million	(AeroSat Revenue X 15%) x ((AeroSat Revenue-$30 million)/$20 million
	>$50 million	AeroSat Revenue X 15%
2015	<$40 million	No Earn Out
	>$40 million < $60 million	(AeroSat Revenue X 15%) x ((AeroSat Revenue-$40 million)/$20 million
	>$60 million	AeroSat Revenue X 15%

The amounts recorded for the contingent considerations were calculated using an estimate of the probability of the future cash outflows. The varying contingent payments were then discounted to the present value utilizing a discounted cash flow methodology. The contingent consideration liabilities have no observable Level 1 or Level 2 inputs.

On a Non-recurring Basis:

In accordance with the provisions of ASC Topic 350, Intangibles – Goodwill and Other the Company estimates the fair value of reporting units, utilizing unobservable Level 3 inputs. Level 3 inputs require significant management judgment due to the absence of quoted market prices or observable inputs for assets of a similar nature. The Company utilizes a discounted cash flow method to estimate the fair value of reporting units utilizing unobservable inputs. The fair value measurement of the reporting unit under the step-one and step-two analysis of the quantitative goodwill impairment test are classified as Level 3 inputs.

Intangible assets that are amortized are evaluated for recoverability whenever adverse effects or changes in circumstances indicate that the carrying value may not be recoverable. The recoverability test consists of comparing the undiscounted projected cash flows with the carrying amount. Should the carrying amount exceed undiscounted projected cash flows, an impairment loss would be recognized to the extent the carrying amount exceeds fair value. For the Company’s indefinite-lived intangible asset, the impairment test consists of comparing the fair value, determined using the relief from royalty method, with its carrying amount. An impairment loss would be recognized for the carrying amount in excess of its fair value.

- 53 -

At December 31, 2013, the fair value of goodwill and intangible assets classified using Level 3 inputs are as follows:

• Beginning January 1, 2012, previously unamortized trade names in the Test Systems segment with a fair value of $0.4 million are now being amortized over 10 years. The fair value measurement of total amortized intangible assets in the Test Systems reporting unit is $3.9 million. Inputs used to calculate the fair value were internal forecasts used to estimate undiscounted future cash flows. There was no change in fair value from December 31, 2012.

• The Max-Viz goodwill and intangible assets acquired on July 30, 2012, were valued at fair value using a discounted cash flow methodology and are classified as Level 3 inputs.

• The Peco, AeroSat, and PGA goodwill and intangible assets acquired on July 18, 2013, October 2, 2013, and December 5, 2013 respectively, were valued at fair value using a discounted cash flow methodology and are classified as Level 3 inputs.

Due to their short-term nature, the carrying value of cash and equivalents, accounts receivable, accounts payable, and notes payable approximate fair value. The carrying value of the Company’s variable rate long-term debt instruments also approximates fair value due to the variable rate feature of these instruments.

During 2011, in accordance with the provisions of ASC Topic 350, Intangibles – Goodwill and Other, the Company recorded a $2.4 million goodwill impairment charge related to the Test System reporting unit to write down goodwill to its implied fair value of zero. The Company utilizes a discounted cash flow analysis to estimate the fair value of reporting units utilizing unobservable inputs. The fair value measurement of the reporting unit under the step-one and step-two analysis of the goodwill impairment test are classified as Level 3 inputs. There were no impairment charges to goodwill in any of the Company’s reporting units in 2013 and 2012.

During 2011, the Company recorded an impairment charge to write down to fair value indefinite-lived trade name intangible assets of its Test System reporting unit. The impairment charge for the trade names was $0.1 million based on the determined fair value of $0.4 million. This impairment charge is the result of the revised downward estimates of future revenues and cash flows of the Test Systems reporting unit. The fair value measurements are calculated using unobservable inputs classified as Level 3 inputs, requiring significant management judgment due to the absence of quoted market prices or observable inputs for assets of a similar nature. There were no impairment charges to any of the Company’s intangible assets in either of the Company’s segments in 2013 and 2012.

NOTE 15 — DERIVATIVE FINANCIAL INSTRUMENTS

At December 31, 2013, we had one interest rate swap with a notional amount of approximately $1.5 million, entered into on February 6, 2006, related to the Company’s Series 1999 New York Industrial Revenue Bond, which effectively fixes the rate at 3.99% plus a spread based on the Company’s leverage ratio on this obligation through February 1, 2016.

An interest rate swap entered into on March 19, 2009 related to the Company’s term note issued January 30, 2009, was terminated in the third quarter of 2013 with no significant impact to the results of our operations.

At December 31, 2013 and 2012, the fair value of the interest rate swap was a liability of $0.1 million and $0.2 million, respectively, which is included in other liabilities (See Note 14 - Fair Value). Amounts expected to be reclassified to earnings in the next twelve months are not expected to be significant.

Activity in AOCI related to these derivatives is summarized below:

(In thousands)	2013			2012			2011
Derivative Balance at the Beginning of the Year in AOCI	$	(142	)	$	(256	)	$	(338	)
Net Deferral in AOCI of Derivatives:
Net (Increase) Decrease in Fair Value of Derivatives		2			(34	)		(171	)
Tax Effect		—			14			61
		2			(20	)		(110	)
Net Reclassification from AOCI into Earnings:
Reclassification from AOCI into Earnings – Interest Expense		109			209			298
Tax Effect		(38	)		(75	)		(106	)
		71			134			192
Net Change in Derivatives for the Year		73			114			82
Derivative Balance at the End of the Year in AOCI	$	(69	)	$	(142	)	$	(256	)

- 54 -

To the extent the interest rate swaps are not perfectly effective in offsetting the change in the value of the payments being hedged; the ineffective portion of these contracts is recognized in earnings immediately as interest expense. Ineffectiveness, if any, was not significant for the years ended December 31, 2013, 2012 and 2011. The Company classifies the cash flows from hedging transactions in the same category as the cash flows from the respective hedged items. Amounts from ineffectiveness, if any, to be reclassified during 2014 are not expected to be significant.

NOTE 16 — SELECTED QUARTERLY FINANCIAL INFORMATION

The following table summarizes selected quarterly financial information for 2013 and 2012:

	Quarter Ended
(Unaudited)	Dec. 31,		Sept. 28,		June 29,		March 30,		Dec. 31,		Sept. 29,		June 30,		March 31,
(In thousands, except for per share data)	2013		2013		2013		2013		2012		2012		2012		2012
Sales	$	105,456	$	89,681	$	70,833	$	73,967	$	67,420	$	68,899	$	64,989	$	65,138
Gross Profit (sales less cost of products sold)		25,173		23,785		18,681		20,219		17,551		16,717		17,054		18,120
Income Before Tax		8,902		10,747		7,718		10,844		7,690		7,381		7,510		9,002
Net Income		6,389		7,155		5,158		8,564		5,655		4,930		5,194		6,095
Basic Earnings Per Share		0.36		0.41		0.30		0.49		0.33		0.29		0.30		0.36
Diluted Earnings Per Share		0.34		0.39		0.28		0.47		0.31		0.27		0.29		0.34

NOTE 17 — COMMITMENTS AND CONTINGENCIES

The Company leases certain facilities and equipment under various lease contracts with terms that meet the accounting definition of operating leases. These arrangements may include fair value renewal or purchase options. Rental expense for the years ended December 31, 2013, 2012 and 2011 was $2.4 million, $3.2 million and $3.0 million, respectively. The following table represents future minimum lease payment commitments as of December 31, 2013:

(In thousands)
2014	$	2,183
2015		925
2016		279
2017		237
2018		136
	$	3,760

From time to time the Company may enter into purchase agreements with suppliers under which there is a commitment to buy a minimum amount of product. Purchase commitments outstanding at December 31, 2013 were $91.2 million. These commitments are not reflected as liabilities in the Company’s Consolidated Balance Sheets.

Legal Proceedings

The Company is subject to various legal proceedings, claims, and litigation arising in the ordinary course of business. While the outcome of these matters is currently not determinable, we do not expect these matters will have a material adverse effect on our business, financial position, results of operations, or cash flows. However, the results of these matters cannot be predicted with certainty. Should the Company fail to prevail in any legal matter or should several legal matters be resolved against the Company in the same reporting period, then the financial results of that particular reporting period could be materially adversely affected.

We are a defendant in an action filed in the Regional State Court of Mannheim, Germany (Lufthansa Technik AG v. Astronics Advanced Electronics Systems Corp.) relating to an allegation of patent infringement. The damages sought include injunctive relief, as well as monetary damages. We dispute the allegation and are vigorously defending ourselves in this action. We have filed a nullity action with the Federal Patent Court in Munich, Germany, requesting the court to revoke the German part of the European patent that is subject to the claim. In November 2011, the Regional State Court of Manheim Germany, issued an interim decision to the effect that the infringement litigation proceedings be stayed until the Federal Patent Court decides on the concurrent nullity action. In February 2014, The Federal Patent Court issued a written judgment upholding the validity of a portion of the patent. This judgment is subject to appeal. However, as a result the judgment proclaimed by The Federal Patent Court the stay of the infringement litigation proceedings is no longer effective. At this time we are unable to provide a reasonable estimate of our potential liability or the potential amount of loss related to this action, if any. If the outcome of this litigation is adverse to us, our results and financial condition could be materially affected.

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NOTE 18 — SEGMENTS

Segment information and reconciliations to consolidated amounts for the years ended December 31 are as follows:

(In thousands)	2013			2012			2011
Sales:
Aerospace	$	330,530		$	254,955		$	213,874
Test Systems		10,103			11,491			14,289
Less Inter-segment Sales		(696	)		—			—
		9,407			11,491			14,289
Total Consolidated Sales	$	339,937		$	266,446		$	228,163
Operating Profit (Loss) and Margins:
Aerospace	$	55,200		$	44,137		$	40,400
		16.7	%		17.3	%		18.9	%
Test Systems		(3,756	)		(4,985	)		(4,760	)
		(37.2	)%		(43.4	)%		(33.3	)%
Total Operating Profit		51,444			39,152			35,640
		15.1	%		14.7	%		15.6	%
Deductions from Operating Profit:
Interest Expense		(4,094	)		(1,042	)		(1,806	)
Corporate and Other Expenses, Net		(9,139	)		(6,527	)		(4,819	)
Earnings before Income Taxes	$	38,211		$	31,583		$	29,015
Depreciation and Amortization:
Aerospace	$	10,058		$	6,043		$	3,929
Test Systems		590			634			584
Corporate		411			228			430
Total Depreciation and Amortization	$	11,059		$	6,905		$	4,943
Identifiable Assets:
Aerospace	$	428,619		$	177,168		$	136,930
Test Systems		11,035			18,121			20,020
Corporate		51,617			16,700			17,955
Total Assets	$	491,271		$	211,989		$	174,905
Capital Expenditures:
Aerospace	$	6,711		$	16,324		$	14,195
Test Systems		61			396			86
Corporate		96			—			—
Total Capital Expenditures	$	6,868		$	16,720		$	14,281

Operating profit is sales less cost of products sold and other operating expenses, excluding interest expense and other corporate expenses. Cost of products sold and other operating expenses are directly identifiable to the respective segment.

For the years ended December 31, 2013 and 2012, there was no goodwill or purchased intangible asset impairment losses in either the Aerospace or Test System segment. For the year ended December 31, 2011, the operating loss in the Test Systems segment includes a goodwill impairment loss of approximately $2.4 million and a purchased intangible asset impairment loss of approximately $0.1 million. In the Aerospace segment, goodwill amounted to $101.0 million and $21.9 million at December 31, 2013 and 2012, respectively. In the Test Systems segment there was no goodwill as of December 31, 2013 and 2012.

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The following table summarizes the Company’s sales by geographic region for the years ended December 31:

	2013		2012		2011
(In thousands)
North America	$	300,368	$	233,245	$	196,447
Europe		21,190		16,188		16,238
Asia		15,570		14,030		12,544
South America		1,851		1,937		2,678
Other		958		1,046		256
	$	339,937	$	266,446	$	228,163

The following table summarizes the Company’s property, plant and equipment by country for the years ended December 31:

	2013		2012		2011
(In thousands)
United States	$	59,803	$	53,235	$	40,871
France		10,771		—		—
Canada		326		302		251
	$	70,900	$	53,537	$	41,122

Sales recorded by the Company’s foreign operations were $16.5 million in 2013, $14.2 million in 2012, and $13.1 million in 2011. Net income from these locations was $0.2 million in 2013, $1.0 million in 2012, and $0.9 million in 2011. Net assets held outside of the United States total $40.1 million at December 31, 2013 and $6.7 million at December 31, 2012. The exchange loss included in determining net income was $0.1 million in each of the years ending 2013, 2012 and 2011. Cumulative translation adjustments amounted to $1.3 million and $1.4 million at December 31, 2013 and 2012, respectively.

The Company has a significant concentration of business with two major customers, Panasonic Aviation Corporation and The Boeing Company. The following is information relating to the activity with those customers:

	2013			2012			2011
Percent of Consolidated Revenue
Panasonic		29.6	%		38.0	%		35.7	%
Boeing		14.5	%		5.5	%		4.4	%

(In thousands)	2013		2012
Accounts Receivable at December 31,
Panasonic	$	14,090	$	17,412
Boeing		6,458		1,939

Sales to Panasonic are all in the Aerospace segment. Sales to the Boeing occur in both segments.

NOTE 19 — ACQUISITIONS

PGA Electronic S.A.

On December 5, 2013 we acquired 100% of the stock of PGA, a designer and manufacturer of seat motion and lighting systems primarily for business and first class aircraft seats and is Europe’s leading provider of in-flight entertainment/communication systems as well as cabin management systems for private VVIP aircraft. The addition of PGA further diversifies the products and technologies that Astronics offers. The purchase price was approximately $32.9 million for which approximately $10.7 million, net of cash acquired, was paid in cash and the balance paid with 264,168 shares of Astronics stock valued at $51.00 per share. PGA is included in our Aerospace reporting segment. The purchase price allocation for this acquisition is not finalized as the fair value valuation of assets and liabilities is not complete.

Astronics AeroSat Corporation

On October 1, 2013, we acquired certain assets and liabilities from AeroSat Corporation and related entities, a supplier of aircraft antenna systems for $12 million in cash, plus the a potential additional purchase consideration of up to $53 million based upon the achievement of certain revenue targets in 2014 and 2015. The addition of AeroSat further diversifies the products and technologies that Astronics offers. The additional contingent purchase consideration is recorded at its estimated fair value of approximately $5.0 million at the date of acquisition based upon the Company’s assessment of the probability of AeroSat achieving the revenue growth targets. Substantially all of the goodwill and purchased intangible assets are expected to be deductible for tax purposes over 15 years. The purchase price allocation for this acquisition is not complete. The purchase price allocation for this acquisition is not finalized as the fair value valuation of the earn out liability is still being evaluated.

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Peco, Inc.

On July 18, 2013, we acquired 100% of the stock of Peco, Inc. which designs and manufacturers highly engineered commercial aerospace interior components and systems for the aerospace industry. The company specializes in PSUs which incorporate air handling, emergency oxygen, electrical power management and cabin lighting systems. It also manufactures a wide range of fuel access doors that meet stringent strength, fuel sealing and anti-corrosion requirements. The addition of Peco diversifies the products and technologies that Astronics offers. We purchased the outstanding stock of Peco for $136.0 million in cash. Peco’s unaudited 2013 revenue prior to the acquisition date was approximately $46.2 million. Peco is included in our Aerospace reporting segment.

The allocation of the purchase price paid for Peco is based on fair values of the acquired assets and liabilities assumed of Peco as of July 18, 2013.

The allocation of purchase price based on appraised fair values was as follows (In thousands):

Accounts Receivable	$	8,002
Inventory		15,473
Other Current Assets		1,881
Fixed Assets		5,153
Purchased Intangible Assets		69,000
Goodwill		69,494
Accounts Payable, Accrued Expenses, and Other Current Liabilities		(4,114	)
Deferred Income Taxes		(28,889	)
Total Purchase Price	$	136,000

The amounts allocated to the purchased intangible assets consist of the following:

(In thousands)	Weighted Average Life	Acquisition Fair Value
Trademark	10 Years	$	4,200
Technology	10 Years		3,300
Customer Relationships/Backlog	1.5-16 Years		61,500
		$	69,000

Goodwill and other intangible assets reflected above were determined to meet the criterion for recognition apart from tangible assets acquired and liabilities assumed. The goodwill is primarily attributable to expected synergies and the assembled workforce. Purchased intangible assets and goodwill are not deductible for tax purposes.

The following is a summary of the sales and amounts included in income from operations for Peco included in the consolidated financial statements of the Company from the date of acquisition to December 31, 2013 (in thousands):

Sales	$	36,452
Operating Income	$	122

The following summary, prepared on a pro forma basis, combines the consolidated results of operations of the Company with those of Peco as if the acquisition took place on January 1, 2012. The pro forma consolidated results include the impact of certain adjustments, including increased interest expense on acquisition debt, amortization of purchased intangible assets and income taxes.

(in thousands, except earnings per share)	2013		2012
Sales	$	386,170	$	344,233
Net income	$	29,456	$	24,348
Basic earnings per share	$	1.68	$	1.42
Diluted earnings per share	$	1.60	$	1.34

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The pro forma results are not necessarily indicative of what actually would have occurred if the acquisition had been in effect for the year ended December 31, 2013 and 2012. In addition, they are not intended to be a projection of future results.

Max-Viz, Inc.

On July 30, 2012 we acquired by merger, 100% of the stock of Max-Viz, Inc., a manufacturer of industry-leading Enhanced Vision Systems for defense and commercial aerospace applications for the purpose of improving situational awareness. The addition of Max-Viz diversifies the products and technologies that Astronics offers. We purchased the outstanding stock of Max-Viz for $10.7 million in cash plus contingent purchase consideration up to a maximum of $8.0 million subject to meeting certain revenue growth targets over the next three years. Max-Viz is included in our Aerospace reporting segment. The additional contingent purchase consideration was recorded at its estimated fair value at the date of acquisition based upon the Company’s assessment of the probability of Max-Viz achieving the revenue growth targets.

There was no significant change in the fair value estimate of the contingent consideration, from the date of the acquisition to December 31, 2013. The goodwill recognized is comprised primarily of intangible assets that do not require separate recognition. Substantially all of the goodwill and purchased intangible assets are expected to be deductible for tax purposes over 15 years. The purchase price allocation for the 2012 acquisition is complete.

NOTE 20 — SUBSEQUENT EVENTS

In January 2014, Peco purchased two facilities totaling 233,000 square feet in Clackamas, Oregon for approximately $14.5 million and expects to move its operations into the buildings by the end of the fourth quarter of 2014.

On January 20, 2014, the Company entered into an agreement to purchase substantially all of the assets and liabilities of the Test and Services Division of EADS North America, Inc. for approximately $53.0 million in cash plus a net working capital adjustment. On February 28, 2014, Astronics completed the acquisition. This division will be reported as part of Test Systems segment.

In connection with the funding of the acquisition discussed above, the Company amended its existing credit facility by entering into Amendment No 2. to Third Amended and Restated Credit Agreement, dated as of February 28, 2014. The Company elected to exercise its option to increase the revolving credit commitment. The Credit Agreement now provides for a $125 million five-year revolving credit facility maturing on June 30, 2018, of which $58.0 million was drawn to finance the acquisition. There remains approximately $56.1 million available under the revolving credit facility on February 28, 2014.

The amended facility temporarily increases the maximum leverage ratio permitted under the agreement to 4.0 to 1.0 for fiscal quarters ending March 31, 2014 and June 30, 2014, 3.75 to 1.0 as of the end of fiscal quarters from September 30, 2014 through March 31, 2015 and 3.5 to 1.0 as of the end of each fiscal quarter subsequent to March 31, 2015 to maturity. There were no changes to the other covenants, interest rates being charged or commitment fees.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company carried out an evaluation, under the supervision and with the participation of Company Management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as defined in Exchange Act Rules 13a-15(e) and 15d-15(e). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures are effective as of the end of the period covered by this report, to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is made known to them on a timely basis, and that these disclosure controls and procedures are effective to ensure such information is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms.

Management’s report on Internal Control over Financial Reporting

See the report appearing under item 8, Financial Statements and Supplemental Data, Managements report on Internal Control Over Financial Reporting.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None

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PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information regarding directors is contained under the captions “Election of Directors” and “Security Ownership of Certain Beneficial Owners and Management” is incorporated herein by reference to the 2014 Proxy to be filed within 120 days of the end of our fiscal year is incorporated herein by reference.

The executive officers of the Company, their ages, their positions and offices with the Company, and the date each assumed their office with the Company, are as follows:

Name and Age of Executive Officer	Positions and Offices with Astronics	Year First Elected Officer
Peter J. Gundermann	President, Chief Executive Officer and Director of the Company	2001
Age 51
David C. Burney	Vice President-Finance, Treasurer, Secretary and Chief Financial Officer of the Company	2003
Age 51
Mark A. Peabody	Astronics Advanced Electronic Systems Executive Vice President	2010
Age 54
James S. Kramer	Luminescent Systems Inc. Executive Vice President	2010
Age 50

The principal occupation and employment for all executives listed above for the past five years has been with the Company.

The Company has adopted a Code of Business Conduct and Ethics that applies to the Chief Executive Officer, Chief Financial Officer as well as other directors, officers and employees of the Company. This Code of Business Conduct and Ethics is available upon request without charge by contacting Astronics Corporation, Investor Relations at (716) 805-1599. The Code of Business Conduct and Ethics is also available on the Investor Relations section of the Company’s website at www.astronics.com.

ITEM 11. EXECUTIVE COMPENSATION

The information contained under the caption “Executive Compensation” and “Summary Compensation Table” in the Company’s definitive Proxy Statement to be filed within 120 days of the end of our fiscal year is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information contained under the captions “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” and “Executive Compensation” in the Company’s definitive Proxy Statement to be filed within 120 days of the end of our fiscal year is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS AND DIRECTOR INDEPENDENCE

The information contained under the captions “Certain Relationships and Related Party Transactions and Director Independence” and “Proposal One: Election of Directors — Board Independence” in the Company’s definitive Proxy Statement to be filed within 120 days of the end of our fiscal year is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information contained under the caption “Audit and Non-Audit Fees” in the Company’s definitive Proxy Statement to be filed within 120 days of the end of our fiscal year is incorporated herein by reference.

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PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE

(a) The documents filed as a part of this report are as follows:

1. The following financial statements are included:

(i) Consolidated Statements of Operations for the years ended December 31, 2013, 2012 and 2011

(ii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2013, 2012, and 2011

(iii) Consolidated Balance Sheets as of December 31, 2013 and 2012

(iv) Consolidated Statements of Cash Flows for the years ended December 31, 2013, 2012 and 2011

(v) Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2013, 2012 and 2011

(vi) Notes to Consolidated Financial Statements

(vii) Reports of Independent Registered Public Accounting Firm

(viii) Management’s Report on Internal Control Over Financial Reporting

2. Financial Statement Schedule

Schedule II. Valuation and Qualifying Accounts

All other consolidated financial statement schedules are omitted because they are inapplicable, not required, or the information is included elsewhere in the consolidated financial statements or the notes thereto.

3. Exhibits

Exhibit No.	Description
3 (a)	Restated Certificate of Incorporation, filed herewith.
(b)	By-Laws, as amended, incorporated by reference to the registrant’s 2008 Annual Report on Form 10-K, Exhibit 3(b), filed March 11, 2009.
(c)	Certificate of Amendment of the Certificate of Incorporation of Astronics Corporation; incorporated by reference to the registrant’s Form 8-K, Exhibit 3.1, filed May 28, 2013.
4.1 (a)	$60,000,000 Credit Agreement with HSBC Bank USA, dated May 13, 2008, incorporated by reference to the registrant’s Form 8-K, Exhibit 10.1, filed May 16, 2008.
(b)	Amended and Restated Credit Agreement with HSBC Bank USA, dated January 27, 2009, incorporated by reference to the registrant’s Form 8-K, Exhibit 10.1, filed January 30, 2009.
(c)	Amendment No. 2 to the Amended and Restated Credit Agreement dated as of December 23, 2009 among Astronics Corporation, the Lenders party thereto, HSBC Bank USA, National Association., incorporated by reference to the registrant’s Form 8-K, Exhibit 10.1, filed December 28, 2009.
(d)	Second Amended and Restated Credit Agreement, dated as of August 31, 2011, among Astronics Corporation, HSBC Bank USA, National Association, Bank of America, N.A. and Manufacturers and Traders Trust Company, incorporated by reference to the registrant’s Form 8-K, Exhibit 10.1, filed September 1, 2011.
(e)	Third Amended and Restated Credit Agreement dated as of July 18, 2013 between Astronics Corporation, the Lenders Party Hereto, HSBC Bank USA National Association, Merrill Lynch, Pierce Fenner & Smith Inc. as Lead Arrangers and Manufacturers and Traders Trust Company, incorporated by reference to the registrant’s Form 8-K, Exhibit 10.2, filed July 18, 2013.
(f)	Amendment No. 1 to Third Amended and Restated Credit Agreement entered into by and among Astronics Corporation, HSBC Bank USA, National Association, Bank of America, N.A. and Manufacturers and Traders Trust Company incorporated by reference to the registrant’s Form 8-K, Exhibit 10.1, filed December 31, 2013.
(g)	Amendment No. 2 to Third Amended and Restated Credit Agreement entered into by and among Astronics Corporation, HSBC Bank USA, National Association, Bank of America, N.A. and Manufacturers and Traders Trust Company incorporated by reference to the registrant’s Form 8-K, Exhibit 10.1, filed February 28, 2014.
10.1*	Restated Thrift and Profit Sharing Retirement Plan, incorporated by reference to the registrant’s 2010 Annual Report on Form 10-K, Exhibit 10.1, filed March 3, 2011.

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10.3*	1997 Director Stock Option Plan, incorporated by reference to the registrant’s 2010 Annual Report on Form 10-K, Exhibit 10.3, filed March 3, 2011.
10.4*	2001 Stock Option Plan, incorporated by reference to the registrant’s 2010 Annual Report on Form 10-K, Exhibit 10.4, filed March 3, 2011.
10.5*	Non-Qualified Supplemental Retirement Plan, incorporated by reference to the registrant’s 2010 Annual Report on Form 10-K, Exhibit 10.5, filed March 3, 2011.
10.6*	Employment Termination Benefits Agreement dated December 16, 2003 between Astronics Corporation and Peter J. Gundermann, President and Chief Executive Officer of Astronics Corporation, incorporated by reference to the registrant’s 2010 Annual Report on Form 10-K, Exhibit 10.6, filed March 3, 2011.
10.7*	Employment Termination Benefits Agreement dated December 16, 2003 between Astronics Corporation and David C. Burney, Vice President and Chief Financial Officer of Astronics Corporation, incorporated by reference to the registrant’s 2010 Annual Report on Form 10-K, Exhibit 10.7, filed March 3, 2011.
10.8*	2005 Director Stock Option Plan, incorporated by reference to the registrant’s 2010 Annual Report on Form 10-K, Exhibit 10.8, filed March 3, 2011.
10.9	Stock Purchase Agreement By and Among Astronics Corporation, DME Corporation and the Shareholders of DME Corporation dated January 28, 2009, incorporated by reference to the registrant’s Form 8-K, Exhibit 10.1, filed January 30, 2009.
10.10*	Supplemental Retirement Plan, Amended and Restated, March 6, 2012, incorporated by reference to the registrant’s 2012 Annual Report on Form 10-K, Exhibit 10.10, filed February 22, 2013.
10.11*	First Amendment of the Employment Termination Benefits Agreement dated December 30, 2008 between Astronics Corporation and Peter J. Gundermann, President and Chief Executive Officer of Astronics, incorporated by reference to the registrant’s 2008 Annual Report on Form 10-K, Exhibit 10.11, filed March 11, 2009.
10.12*	First Amendment of the Employment Termination Benefits Agreement dated December 30, 2008 between Astronics Corporation and David C. Burney, Vice President and Chief Financial Officer of Astronics Corporation , incorporated by reference to the registrant’s 2008 Annual Report on Form 10-K, Exhibit 10.12, filed March 11, 2009.
10.13*	Employment Termination Benefits Agreement Dated February 18, 2005 between Astronics Corporation and Mark A. Peabody, Executive Vice President of Astronics Advanced Electronic Systems, Inc., incorporated by reference to the registrant’s 2010 Annual Report on Form 10-K, Exhibit 10.13, filed March 3, 2011.
10.14*	First Amendment of the Employment Termination Benefits Agreement dated December 31, 2008 between Astronics Corporation and Mark A. Peabody, Executive Vice President of Astronics Advanced Electronic Systems, Inc., incorporated by reference to the registrant’s 2010 Annual Report on Form 10-K, Exhibit 10.14, filed March 3, 2011.
10.15*	Form of Indemnification Agreement as executed by each of Astronics Corporation’s Directors and Executive Officers, incorporated by reference to the registrant’s 2010 Annual Report on Form 10-K, Exhibit 10.15, filed March 3, 2011.
10.16	Stock Purchase Agreement by and among Ballard Technology, Inc. and its Shareholders (the Sellers) and Astronics Corporation (Purchaser) Dated as of November 30, 2011, incorporated by reference to the registrant’s Form 8-K, Exhibit 10.1, filed November 30, 2011.
10.17*	2011 Employee Stock Option Plan, incorporated by reference to the registrant’s Form S-8, Exhibit 4.1 filed on August 4, 2011.
10.18*	Supplemental Retirement Plan II, incorporated by reference to the registrant’s 2012 Annual Report on Form 10-K, Exhibit 10.18, filed February 22, 2013.
10.19	Agreement and Plan of Merger dated as of July 30, 2012 by and among Astronics Corporation, MV Acquisition Corp., Max-Viz Inc. and Gerard H. Langeler as the Shareholders’ Representative incorporated by reference to the registrant’s Form 8-K, Exhibit 10.1, filed July 30, 2012.

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10.20	Stock Purchase Agreement between Astronics Corporation, Peco, Inc., and the shareholders of the Company incorporated by reference to the registrant’s Form 8-K, Exhibit 10.1, filed May 28, 2013.
10.21	Amendment to the Stock Purchase Agreement between Astronics Corporation, Peco, Inc., and the shareholders of the Company incorporated by reference to the registrant’s Form 8-K, Exhibit 10.1, filed July 18, 2013.
10.22	Asset Purchase Agreement by and among Astronics AS Corporation. Aerosat Corporation. Aerosat Airborne Internet LLC, Aerosat Avionics, LLC and Aerosat Tech Licensing, LLC incorporated by reference to the registrant’s Form 8-K, Exhibit 10.1, filed October 1, 2013.
10.23	Sale Agreement and Guarantee Agreement relating to PGA Electronic, incorporated by reference to the registrant’s Form 8-K, Exhibit 10.1 and Exhibit 10.2, filed November 4, 2013.
10.24	Purchase Agreement between EADS North America Inc. and Astronics Corporation dated as of January 20, 2014, incorporated by reference to the registrant’s Form 8-K, Exhibit 10.1 filed January 20, 2014.
21**	Subsidiaries of the Registrant; filed herewith.
23**	Consent of Independent Registered Public Accounting Firm; filed herewith.
31.1**	Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002; filed herewith
31.2**	Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002; filed herewith
32**	Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002; filed herewith
101.INS**	XBRL Instance Document
101.SCH**	XBRL Taxonomy Extension Schema Document
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**	XBRL Taxonomy Extension Label Linkbase Document
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document

* Identifies a management contract or compensatory plan or arrangement as required by Item 15(a) (3) of Form 10-K.

** Submitted electronically herewith

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SCHEDULE II

Valuation and Qualifying Accounts

Year	Description	Balance at the Beginning of Period		Acquisitions		Charged to Cost and Expense		(Write-Offs) Recoveries / Other			Balance at End of Period
(In thousands)
2013	Allowance for Doubtful Accounts	$	650	$	—	$	112	$	(622	)	$	140
	Reserve for Inventory Valuation		12,026		—		537		(1,522	)		11,041
	Deferred Tax Valuation Allowance		2,190		—		319		—			2,509
2012	Allowance for Doubtful Accounts	$	645	$	130	$	88	$	(213	)	$	650
	Reserve for Inventory Valuation		10,599		137		1,544		(254	)		12,026
	Deferred Tax Valuation Allowance		1,898		—		292		—			2,190
2011	Allowance for Doubtful Accounts	$	274	$	—	$	466	$	(95	)	$	645
	Reserve for Inventory Valuation		11,183		—		336		(920	)		10,599
	Deferred Tax Valuation Allowance		890		—		531		477			1,898

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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, on March 7, 2014.

Astronics Corporation
By	/s/ Peter J. Gundermann	By	/s/ David C. Burney
Peter J. Gundermann President and Chief Executive Officer		David C. Burney, Vice President-Finance, Chief Financial Officer and Treasurer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Peter J. Gundermann Peter J. Gundermann	President and Chief Executive Officer (Principal Executive Officer)	March 7, 2014
/s/ David C. Burney David C. Burney	Vice President-Finance, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)	March 7, 2014
/s/ Raymond W. Boushie Raymond W. Boushie	Director	March 7, 2014
/s/ Robert T. Brady Robert T. Brady	Director	March 7, 2014
/s/ John B. Drenning John B. Drenning	Director	March 7, 2014
/s/ Peter J. Gundermann Peter J. Gundermann	Director	March 7, 2014
/s/ Kevin T. Keane Kevin T. Keane	Director	March 7, 2014
/s/ Robert J. McKenna Robert J. McKenna	Director	March 7, 2014

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EX-3.(A)

Exhibit 3 (a)

RESTATED CERTIFICATE OF INCORPORATION

OF

ASTRONICS CORPORATION

Under §807 of the Business Corporation Law

The undersigned, being the Secretary of ASTRONICS CORPORATION, hereby certifies:

1. The name of the Corporation is ASTRONICS CORPORATION. The name under which the Corporation was formed is ASTRONICS LUMINESCENT, INC.

2. The Certificate of Incorporation was filed by the Department of State on the 5th day of December, 1968.

3. The Certificate of Incorporation is hereby amended pursuant to Section 801 of the Business Corporation Law to effect certain changes authorized by the Board of Directors of the Corporation:

(a) Paragraph THIRD, setting forth the location of the office of the Corporation, is hereby changed to read in its entirety as follows:

“THIRD: The office of the Corporation is to be located in the County of Erie and State of New York.”

(b) Paragraph FIFTH, setting forth the address to which the Secretary of State shall mail a copy of process in any action or proceeding against the Corporation, is hereby changed to read in its entirety as follows:

“FIFTH: The Secretary of State of the State of New York is designated as the agent of the Corporation upon whom process against it may be served, and the post office address to which the Secretary of State shall mail a copy of any such process served upon him is Astronics Corporation, 130 Commerce Way, East Aurora, New York 14052.”

4. The text of the Certificate of Incorporation, as amended heretofore and as further changed hereby, is restated to read as herein set forth in full:

RESTATED CERTIFICATE OF INCORPORATION

OF

ASTRONICS CORPORATION

The name of the Corporation is ASTRONICS CORPORATION.

The purpose for which the Corporation is formed is to engage in any lawful act or activity for which corporations may be formed under the Business Corporation Law, but it is not formed to engage in any act or activity requiring the consent or approval of any state official, department, board, agency or other body without such consent or approval first being obtained; including, but not limited, to the following:

(a) To purchase, receive, take by grant, gift, devise, bequest or otherwise, lease or otherwise acquire, own, hold, improve, employ, use and otherwise deal in and with real or personal property or any interest therein, wherever situated.

To sell, convey, lease, exchange, transfer or otherwise dispose of, or mortgage or pledge, or create a security interest in, all or any of its property, or any interest therein, wherever situated.

To purchase, take, receive, subscribe for or otherwise acquire, own, hold, vote, employ, sell, lend, lease, exchange, transfer, or otherwise dispose of, mortgage, pledge, use and otherwise deal in and with, bonds and other obligations, shares, or other securities or interests issued by others, whether engaged in similar or different business, governmental or other activities.

To make contracts, give guarantees to the extent permitted by law and incur liabilities, borrow money at such rates of interest as the Corporation may determine, issue its notes, bonds and other obligations, and secure any of its obligations by mortgage or pledge of all or any of its property or any interest therein, wherever situated.

To purchase, receive, take or otherwise acquire, own, hold, sell, lend, exchange, transfer or otherwise dispose of, pledge, use and otherwise deal in and with its own shares.

To be a promoter, partner, member, associate or manager of other business enterprises or ventures or to the extent permitted in any other jurisdiction to be an incorporator of other corporations of any type or kind, to the extent permitted by law.

To purchase, receive, secure, apply for or otherwise acquire, own, hold, employ, use and otherwise deal in and with by grant, license or otherwise, any right, interest, invention, improvement or process used in connection with or secured under letters patent or copyright of the United States or of any jurisdiction without the United States.

To purchase, receive, take or otherwise acquire, own, hold, improve, employ, use and otherwise deal in the assets, property, rights and good will of any corporation, firm, association or entity, engaged in any business which the Corporation is authorized to engage in.

To have and exercise all powers necessary or convenient to effect any or all of the purposes for which the Corporation is formed.

The foregoing enumeration of purposes and powers shall not be deemed to limit or restrict in any manner the general powers of the Corporation, and the enjoyment and exercise thereof as conferred by the law of the State of New York upon corporations organized under the provisions of the Business Corporation Law.

The office of the Corporation is to be located in the County of Erie and State of New York.

The aggregate number of shares which the Corporation shall have authority to issue is fifty million (50,000,000) shares, consisting of forty million (40,000,000) shares of Common Stock, Par Value $.01 per share, and ten million (10,000,000) shares of Class B Stock, Par Value $.01 per share.

The relative rights, preferences and limitations of each class of capital stock are to be fixed as follows:

A. Dividends

Holders of Common Stock and Class B Stock shall be entitled to receive such dividends and other distributions in cash, stock or property of the Corporation as may be declared thereon by the Board of Directors from time to time out of assets or funds of the Corporation legally available therefor, provided that in the case of cash dividends, no dividend may be paid on the Class B Stock unless an equal or greater dividend is paid concurrently on the Common Stock, and cash dividends may be paid on the Common Stock in excess of dividends paid, or without paying dividends, on the Class B Stock. In the case of dividends or other distributions payable in stock of the Corporation, including share distributions or stock splits or divisions of stock of the Corporation, such distributions, splits or divisions shall be in the same proportion with respect to each class of stock, and the Common Stock and Class B Stock will be treated equally. A dividend or share distribution declared in shares of Common Stock will be distributed pro rata, as Common Stock, to the holders of Common Stock and Class B Stock. A dividend or share distribution declared in shares of Class B Stock will be distributed pro rata, as Class B Stock, to the holders of Common Stock and Class B Stock. In the case of any combination or reclassification of the Common Stock, the shares of Class B Stock shall also be combined or reclassified so that the relationship between the number of shares of Class B Stock and Common Stock outstanding immediately following such combination or reclassification shall be the same as the relationship between the Class B Stock and the Common Stock immediately prior to such combination or reclassification.

B. Voting

(1) At every meeting of the shareholders every holder of Common Stock shall be entitled to one (1) vote in person or by proxy for each share of Common Stock standing in his name on the transfer books of the Corporation and every holder of Class B Stock shall be entitled to ten (10) votes in person or by proxy for each share of Class B Stock standing in his name on the transfer books of the Corporation.

(2) Except in connection with share distributions, stock splits and stock dividends and anti-dilutive adjustments determined by the Board of Directors for options, stock subscriptions and warrants outstanding on the date of record for the share distribution, stock split or stock dividend, the Corporation may not effect the issuance of any shares of Class B Stock unless and until such issuance is authorized by the holders of a majority of the voting power of the shares of Common Stock and of Class B Stock entitled to vote, each voting separately as a class.

(3) No shareholder shall have the right to cumulate votes in the election of directors.

(4) Except as may be otherwise required by law or the Certificate of Incorporation, the holders of Common Stock and Class B Stock shall vote together as a single class.

C. Transfer

(1) No person holding shares of Class B Stock of record (hereinafter called a “Class B Holder”) may transfer the Class B Stock, except by gift, devise or bequest, by a transfer to the estate of a shareholder upon the death of such shareholder, or by a transfer of shares held in a trust to the grantor of such trust or to any person to whom or for whose benefit the principal of such trust may be distributed; and the Corporation and the transfer agent shall not register the transfer of such shares of Class B Stock, whether by sale, assignment, appointment or otherwise. Any purported transfer of shares of Class B Stock, other than a transfer of the type described above, shall be null and void and of no effect and the purported transfer by a Class B Holder will result in the immediate and automatic conversion of the shares of Class B Stock held by such Class B Holder into shares of Common Stock, on a one (1) share for one (1) share basis. The purported transferee shall have no rights as a shareholder of the Corporation and no other rights against, or with respect to, the Corporation except the right to receive shares of Common Stock upon the immediate and automatic conversion of his shares of Class B Stock into shares of Common Stock. The estate of any deceased shareholder, a transferee upon the distribution of the assets of such an estate, any transferee of the Class B Stock by gift, devise or bequest or a transferee from a trust of which such transferee was the grantor or a principal beneficiary shall hold the transferred shares of Class B Stock subject to the same restrictions on transferability as apply to all Class B Holders under this Paragraph Fourth.

(2) Shares of Class B Stock shall be registered in the name(s) of the beneficial owner(s) thereof (as hereafter defined) and not in “street” or “nominee” names; provided, however, certificates representing shares of Class B Stock issued as or in connection with a share distribution, stock split or stock dividend on the Corporation’s then outstanding Common Stock or Class B Stock may be registered in the same name and manner as the certificates representing the shares of Common Stock or Class B Stock with respect to which the shares of Class B Stock are issued. For the purposes of this Section C the term “beneficial owner(s)” of any shares of Class B Stock shall mean the person or persons who possess the power to dispose, or to direct the disposition, of such shares. Any shares of Class B Stock registered in “street” or “nominee” name may be transferred to the beneficial owner of such shares on the record date for such share distribution, stock split or stock dividend, upon proof satisfactory to the Corporation and the transfer agent that such person was in fact the beneficial owner of such shares on the record date for such share distribution, stock split or stock dividend.

(3) Notwithstanding anything to the contrary set forth herein, any Class B Holder may pledge such holder’s shares of Class B Stock to a pledgee pursuant to a bona fide pledge of such shares as collateral security for indebtedness due to the pledgee, provided that such shares shall not be transferred to or registered in the name of the pledgee and shall remain subject to the provisions of this Section C. In the event of foreclosure or other similar action by the pledgee, such pledged shares of Class B Stock may not be transferred to the pledgee without first being converted into shares of Common Stock.

(4) For purposes of this Section C:

(a) Each joint owner of shares of Class B Stock shall be considered a “Class B Holder” of such shares.

(b) A minor for whom shares of Class B Stock are held pursuant to a Uniform Gifts to Minors Act or similar law shall be considered a Class B Holder of such shares.

(c) Unless otherwise specified, the term “person” means both natural persons and legal entities.

(d) Persons participating in a thrift or employee stock purchase plan of the Corporation (or any similar or successor plans) shall be deemed to be the Class B Holders of the shares of Class B Stock allocated to their accounts pursuant to such plans.

(5) Any transfer of shares of Class B Stock not permitted hereunder shall result in the conversion of the transferee’s shares of Class B Stock into shares of Common Stock, on a one (1) share for one (1) share basis, effective the date on which certificates representing such shares are presented for transfer on the books of the Corporation. The Corporation may, in connection with preparing a list of shareholders entitled to vote at any meeting of shareholders, or as a condition to the transfer or the registration of shares of Class B Stock on the Corporation’s books, require the furnishing of such affidavits or other proof as it deems necessary to establish that any person is the beneficial owner of shares of Class B Stock.

D. Conversion Rights

(1) Subject to the terms and conditions of this Section D, each share of Class B Stock shall be convertible at any time or from time to time, at the option of the respective holder thereof, at the office of any transfer agent for Class B Stock, and at such other place or places, if any, as the Board of Directors may designate or, if the Board of Directors shall fail so to designate, at the principal office of the Corporation (attention of the Secretary of the Corporation), into one (1) fully paid and nonassessable share of Common Stock. Upon conversion, the Corporation shall make no payment or adjustment on account of dividends accrued or in arrears on Class B Stock surrendered for conversion or on account of any dividends on the Common Stock issuable on such conversion. Before any holder of Class B Stock shall be entitled to convert the same into Common Stock, he shall surrender the certificate or certificates for such Class B Stock at the office of said transfer agent (or other place as provided above), which certificate or certificates, if the Corporation shall so request, shall be duly endorsed to the Corporation or in blank or accompanied by proper instruments of transfer to the Corporation (such endorsements or instruments of transfer to be in form satisfactory to the Corporation), and shall give written notice to the Corporation at said office that he elects so to convert said Class B Stock in accordance with the terms of this Section D, and shall state in writing therein the name or names in which he wishes the certificate or certificates for Common Stock to be issued. Subject to the provision of subsection (3) of this Section D, such conversion shall be deemed to have been made as of the date of such surrender of the Class B Stock to be converted; and the person or persons entitled to receive the Common Stock issuable upon conversion of such Class B Stock shall be treated for all purposes as the record holder or holders of such Common Stock on such date.

(2) The issuance of certificates for shares of Common Stock upon conversion of shares of Class B Stock shall be made without charge for any stamp or other similar tax in respect of such issuance. However, if any such certificate is to be issued in a name other than that of the holder of the share or shares of Class B Stock converted, the person or persons requesting the issuance thereof shall pay to the Corporation the amount of any tax which may be payable in respect of any transfer involved in such issuance or shall establish to the satisfaction of the Corporation that such tax has been paid.

(3) The Corporation shall not be required to convert Class B Stock, and no surrender of Class B Stock shall be effective for that purpose, while the stock transfer books of the Corporation are closed for any purpose; but the surrender of Class B Stock for conversion during any period while such books are so closed shall become effective for conversion immediately upon the reopening of such books, as if the conversion had been made on the date such Class B Stock was surrendered.

(4) The Corporation covenants that it will at all times reserve and keep available, solely for the purpose of issue upon conversion of the outstanding shares of Class B Stock, such number of shares of Common Stock as shall be issuable upon the conversion of all such outstanding shares, provided that nothing contained herein shall be construed to preclude the Corporation from satisfying its obligations in respect of the conversion of the outstanding shares of Class B Stock by delivery of shares of Common Stock which are held in the treasury of the Corporation. The Corporation covenants that all shares of Common Stock which shall be issued upon conversion of the shares of Class B Stock, will, upon issue, be fully paid and nonassessable and not entitled to any preemptive rights. All shares of Class B Stock converted into Common Stock shall be cancelled and restored to the status of authorized but unissued shares of Class B Stock.

(5) At any time when the Board of Directors and the holders of a majority of the outstanding shares of Class B Stock approve the conversion of all of the Class B Stock into Common Stock, then the outstanding shares of Class B Stock shall be converted into shares of Common Stock. In the event of such a conversion, certificates formerly representing outstanding shares of Class B Stock shall thereupon and thereafter be deemed to represent the like number of shares of Common Stock.

E. Liquidation Rights

In the event of any dissolution, liquidation or winding up of the affairs of the Corporation, whether voluntary or involuntary, after payment or provision for payment of the debts and other liabilities of the Corporation, the remaining assets and funds of the Corporation, if any, shall be divided among and paid ratably to the holders of Common Stock and the holders of Class B Stock. A merger or consolidation of the Corporation with or into any other corporation or a sale or conveyance of all or any part of the assets of the Corporation (which shall not in fact result in the liquidation of the Corporation and the distribution of assets to shareholders) shall not be deemed to be a voluntary or involuntary liquidation or dissolution or winding up of the Corporation within the meaning of this Section E.

F. Preemptive Rights

Subject to any conversion rights of any shares of Class B Stock, no holder of stock of the Corporation of any class shall be entitled as of right to subscribe for or receive any part of the authorized stock of the Corporation or any part of any new, additional or increased issues of stock of any class or of any obligations convertible into any class or classes of stock, but the Board of Directors may, without offering any such shares of stock or obligations convertible into stock to shareholders of any class, issue and sell or dispose of the same to such persons and for such consideration permitted by law as it may from time to time in its absolute discretion determine.

The Secretary of State of the State of New York is designated as the agent of the Corporation upon whom process against it may be served, and the post office address to which the Secretary of State shall mail a copy of any such process served upon him is Astronics Corporation, 130 Commerce Way, East Aurora, New York 14052.

The following provisions are inserted for the regulation and conduct of the business and affairs of the Corporation and are in furtherance of and not in limitation or exclusion of any powers conferred upon it by statute:

The affirmative vote of the holders of not less than 80% of the outstanding shares of the Corporation entitled to vote thereon shall be required:

to adopt any agreement for the merger or consolidation of the Corporation or any “subsidiary” (as hereinafter defined) with or into any other “person” (as hereinafter defined) or the merger of any other person into the Corporation or any subsidiary;

to authorize any sale, lease, exchange, mortgage, pledge or disposition to any other person of all or substantially all of the property and assets of the Corporation or any subsidiary, or any part of such assets having a then fair market value greater than 50% of the then fair market value of the total assets of the Corporation or such subsidiary; or

to authorize the issuance or transfer by the Corporation or any subsidiary of any voting securities of the Corporation in exchange or payment for the securities or property and assets (including cash) of any other person.

The Provisions of this Paragraph Sixth shall not apply to any transaction described in clauses (i), (ii) or (iii) of Section A of this Paragraph Sixth if:

prior to the consummation of such transaction, the Board of Directors of the Corporation shall have adopted a resolution approving the written agreement pursuant to which such transaction shall thereafter be consummated or a written memorandum of understanding with respect to the terms upon which such transaction shall thereafter be consummated; or

the Corporation or a subsidiary of the Corporation is, at the time such transaction is agreed to, the beneficial owner of a majority, by vote, of the voting interest in the other party or parties to the transaction.

For purposes of this Paragraph Sixth:

a “security” or “securities” shall include both equity and debt securities;

any specified person shall be deemed to be the “beneficial owner” or to “beneficially own” any securities (a) as to which such person or any affiliate or associate of such person has the right, along or with others, to direct the manner of exercise of the voting rights of such securities, whether or not such person or any affiliate or associate of such person has any interest in any income or distribution with respect to such securities, or (b) which such specified person or any of its affiliates or associates has the right to acquire pursuant to any agreement, or upon exercise of conversion rights, warrants or options, or pursuant to the automatic termination of a trust, discretionary account or similar arrangement, or otherwise, or (c) which are beneficially owned, within the meaning of clause (a) and (b) hereof, by any other person with which such specified person or any of its affiliates or associates has any agreement, arrangement, or relationship or understanding for the purpose of acquiring, holding, voting, or disposing of such securities;

a “person” is any individual, corporation or other entity;

an “affiliate” of a specified person is any person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with such specified person;

an “associate” of a specified person is (a) any person of which such specified person is an executive officer, principal, member or partner or is, directly or indirectly, the beneficial owner of 5% or more of any class of equity securities of such person, (b) any person that bears to the specified person the relationship described in sub-clause (a) of this clause (v), (c) any trust or other estate in which such specified person has a substantial beneficial interest or as to which such specified person serves as a trustee or in a similar fiduciary capacity, (d) any relative or spouse of the specified person, or any relative of such spouse, who has the same home (or is a member of the same household) as such specified person, (e) any person which controls or is controlled by such specified person, or (f) any other member or partner in a partnership, limited partnership, joint venture, syndicate or other group of which the specified person is a member or partner and which is acting together with the specified person for the purpose of acquiring, holding or disposing of any interest in the Corporation or a subsidiary of the Corporation;

a “subsidiary” of a specified person is any person, a majority, by vote, of the voting interest of which is beneficially owned, directly or indirectly, by such specified person.

The Board of Directors of the Corporation shall determine the meaning and applicability of each of the above definitions based on information then known to it, and any determination of the Board of Directors of the Corporation concerning such matters shall be inclusive and binding for all purposes and with respect to all persons.

Special meetings of the shareholders of the Corporation may be called at any time on the written request of two-thirds (2/3) of the directors then serving on the board, or upon the written request of the holders of not less than 80% of the outstanding shares of each class of capital stock of the Corporation entitled to vote generally in the election of directors as of the date on which such request is actually received by the Corporation.

The provisions set forth in Sections A, B, C, D and E of Paragraph Sixth of this Restated Certificate of Incorporation may not be altered, amended or repealed in any respect unless such alteration, amendment or repeal is approved by an affirmative vote of holders of not less than 80% of the outstanding shares of the Corporation entitled to vote thereon.

No director of the Corporation shall be personally liable to the Corporation or its shareholders for damages for any breach of his duty as a director; provided, however, that nothing in this paragraph SEVENTH shall eliminate or limit the liability of any director if a judgment or other final adjudication adverse to him establishes that his acts or omissions were in bad faith or involved intentional misconduct or a knowing violation of law or that he personally gained in fact a financial profit or other advantages to which he was not legally entitled or that his acts violated Section 719 of the Business Corporation Law of the State of New York. Notwithstanding the foregoing, nothing in this paragraph SEVENTH shall eliminate or limit the liability of a director for any act or omission occurring prior to the date of the filing of the Certificate of Amendment to the Certificate of Incorporation of the Corporation that includes this paragraph SEVENTH.

The changes to the Restated Certificate of Incorporation, as amended, and the restatement thereof were authorized as follows:

as to the changes specified above in Paragraph 3, pursuant to Section 803(b) of the Business Corporation Law, by a unanimous vote of the Board of Directors of the Corporation at a meeting duly called and held on December 11, 2013, at which a quorum was present and acting throughout, and

as to the restatement of the Certificate of Incorporation, pursuant to Section 807 of the Business Corporation Law, by a unanimous vote of the Board of Directors of the Corporation at a meeting duly called and held on December 11, 2013, at which a quorum was present and acting throughout.

IN WITNESS WHEREOF, the undersigned has made and subscribed this Certificate this 13th day of December, 2013.

/s/ David C. Burney

David C. Burney, Secretary

VERIFICATION

STATE OF NEW YORK	)
	:	SS.:
COUNTY OF ERIE	)

David C. Burney, being duly sworn, deposes and says, that he is one of the persons described in and who executed the foregoing certificate, that he has read the same and knows the contents thereof, and that the statements contained therein are true.

/s/ David C. Burney

David C. Burney

Subscribed to before me

the 13th day of December, 2013.

/s/ Linda M. Curtis

EX-21

EXHIBIT 21

ASTRONICS CORPORATION

SUBSIDIARIES OF THE REGISTRANT

Subsidiary	Ownership Percentage			State (Province), Country of Incorporation
Astronics Test Systems, Inc.		100	%	Delaware, USA
DME Corporation		100	%	Florida, USA
Astronics AeroSat Corporation		100	%	New Hampshire, USA
Luminescent Systems, Inc.		100	%	New York, USA
Astronics Air, LLC		100	%	New York, USA
Max-Viz, Inc.		100	%	Oregon, USA
Peco. Inc.		100	%	Oregon, USA
Ballard Technology, Inc.		100	%	Washington, USA
Astronics Advanced Electronic Systems Corp.		100	%	Washington, USA
LSI - Europe B.V.B.A.		100	%	Belgium
Luminescent Systems Canada, Inc.		100	%	Quebec, Canada
PGA Electronic s.a.		100	%	France
Astronics France		100	%	France

EX-23

EXHIBIT 23

Consent of Independent Registered Public Accounting Firm

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements:

(a) the Registration Statements (Form S-8 No. 333-139292, Form S-8 No. 333-87463) pertaining to the Astronics Corporation Employee Stock Purchase Plan,

(b) the Registration Statement (Form S-8 No. 333-127137) pertaining to the Astronics Corporation 2005 Director Stock Option Plan,

(c) the Registration Statement (Form S-8 No. 33-65141) pertaining to the 1993 Director Stock Option Plan,

(d) the Registration Statement (Form S-8 No. 333-143564) pertaining to the Astronics Corporation 2001 Stock Option Plan,

(e) the Registration Statements (Form S-8 No. 333-176044) pertaining to the Astronics Corporation 2011 Employee Stock Option Plan,

(f) the Registration Statement (Form S-3 No. 333-176160) and related prospectus of Astronics Corporation for the registration of common stock, preferred stock, warrants, rights, stock purchase contracts, units and debt securities;

of our reports dated March 7, 2014 with respect to the consolidated financial statements and schedule of Astronics Corporation and the effectiveness of internal control over financial reporting of Astronics Corporation included in this Annual Report (Form 10-K) of Astronics Corporation for the year ended December 31, 2013.

/s/ Ernst & Young LLP

Buffalo, New York

March 7, 2014

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer pursuant to Exchange Act rule 13a-14(a) as adopted pursuant to

Section 302 of the Sarbanes-Oxley Act of 2001

I, Peter J. Gundermann, President and Chief Executive Officer, certify that:

1. I have reviewed this annual report on Form 10-K of the Astronics Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 7, 2014

/s/ Peter J. Gundermann

Peter J. Gundermann

Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer pursuant to Exchange Act rule 13a-14(a) as adopted pursuant to

Section 302 of the Sarbanes-Oxley Act of 2001

I, David C. Burney, Vice President and Chief Financial Officer, certify that:

1. I have reviewed this annual report on Form 10-K of the Astronics Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 7, 2014

/s/ David C. Burney

David C. Burney

Chief Financial Officer

EX-32

Exhibit 32

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2001

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2001, the undersigned officers of Astronics Corporation (the “Company”) hereby certify that:

The Company’s Annual Report on Form 10-K for the year ended December 31, 2012 fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934 and the information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 7, 2014	/s/ Peter J. Gundermann
	Peter J. Gundermann
	Title: Chief Executive Officer
Dated: March 7, 2014	/s/ David C. Burney
	David C. Burney
	Title: Chief Financial Officer

This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent specifically incorporated by the Company into such filing.

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EARNINGS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2013

Earnings Per Share [Abstract]

Earnings Per Share Computations

Earnings per share computations are based upon the following table:

	2013		2012		2011
(In thousands, except per share data)
Net Income	$	27,266	$	21,874	$	21,591
Basic Earnings Weighted Average Shares		17,484		17,143		16,750
Net Effect of Dilutive Stock Options		875		1,014		1,067
Diluted Earnings Weighted Average Shares		18,359		18,157		17,817
Basic Earnings Per Share	$	1.56	$	1.28	$	1.29
Diluted Earnings Per Share	$	1.49	$	1.20	$	1.21

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Goodwill - Summary of Changes in Carrying Amount of Goodwill (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Goodwill And Intangible Assets Disclosure [Abstract]
Balance at Beginning of the Year	$ 21,923	$ 17,185
Acquisition	79,155	4,665
Foreign Currency Translations	(80)	73
Balance at End of the Year	100,998	21,923
Goodwill	117,540	38,465
Accumulated Impairment Losses	(16,542)	(16,542)
Goodwill - Net	$ 100,998	$ 21,923

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Accounts Receivable - Summary of Accounts Receivable (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Receivables [Abstract]
Trade Accounts Receivable	$ 58,224	$ 44,196
Long-term Contract Receivables:
Amounts Billed		907
Unbilled Recoverable Costs and Accrued Profits	2,858	1,020
Total Long-term Contract Receivables	2,858	1,927
Total Receivables	61,082	46,123
Less Allowance for Doubtful Accounts	(140)	(650)
Accounts Receivable	$ 60,942	$ 45,473

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Retirement Plans and Related Post Retirement Benefits - Reconciliation of Beginning and Ending Balances of Projected Benefit Obligation (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
SERP [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Beginning of the Year - January 1	$ 15,042	$ 7,588
Adoption of SERP II		5,790
Service Cost	295	303	46
Interest Cost	624	548	328
Actuarial (Gain) Loss	(1,299)	1,161
Benefits Paid	(348)	(348)
End of the Year - December 31	14,314	15,042	7,588
SERP Medical [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Beginning of the Year - January 1	593	568
Service Cost	3	2	2
Interest Cost	24	24	27
Actuarial (Gain) Loss	55	42
Benefits Paid	(45)	(43)
End of the Year - December 31	$ 630	$ 593	$ 568

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Goodwill - Additional Information (Detail) (USD $)	0 Months Ended	12 Months Ended
	Nov. 01, 2013 Reporting_Unit	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Goodwill [Line Items]
Number of reportable units	6
Goodwill impairment charge		$ 0	$ 0	$ 2,400,000	$ 0
Goodwill		100,998,000	21,923,000	17,185,000
Test Systems [Member]
Goodwill [Line Items]
Goodwill		$ 0	$ 0

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Shareholders' Equity - Components of Other Comprehensive Income (Loss) (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Equity [Abstract]
Foreign Currency Translation Adjustments	$ (131)	$ 183	$ (90)
Reclassification to Interest Expense	109	209	298
Mark to Market Adjustments for Derivatives	2	(34)	(171)
Tax Benefit (Expense)	(38)	(61)	(45)
Mark to Market Adjustments for Derivatives	73	114	82
Retirement Liability Adjustment	1,893	(6,451)	(1,348)
Tax Benefit (Expense)	(663)	2,257	472
Retirement Liability Adjustment	1,230	(4,194)	(876)
Other Comprehensive (Loss) Income	$ 1,172	$ (3,897)	$ (884)

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Acquisitions - Summary of Sales and Amounts Included in Income from Operations of Subsidiary in Consolidated Financial Statements of Company (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 28, 2013	Jun. 29, 2013	Mar. 30, 2013	Dec. 31, 2012	Sep. 29, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Business Acquisition [Line Items]
Sales	$ 105,456	$ 89,681	$ 70,833	$ 73,967	$ 67,420	$ 68,899	$ 64,989	$ 65,138	$ 339,937	$ 266,446	$ 228,163
Operating Income									42,305	32,625	30,821
Peco, Inc [Member]
Business Acquisition [Line Items]
Sales									36,452
Operating Income									$ 122

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Acquisitions (Tables)

12 Months Ended

Dec. 31, 2013

Business Combinations [Abstract]

Allocation of Purchase Price Based on Appraised Fair Values

The allocation of purchase price based on appraised fair values was as follows (In thousands):

Accounts Receivable	$	8,002
Inventory		15,473
Other Current Assets		1,881
Fixed Assets		5,153
Purchased Intangible Assets		69,000
Goodwill		69,494
Accounts Payable, Accrued Expenses, and Other Current Liabilities		(4,114	)
Deferred Income Taxes		(28,889	)
Total Purchase Price	$	136,000

Summary of Sales and Amounts Included in Income from Operations of Subsidiary in Consolidated Financial Statements of Company

The following is a summary of the sales and amounts included in income from operations for Peco included in the consolidated financial statements of the Company from the date of acquisition to December 31, 2013 (in thousands):

Sales	$	36,452
Operating Income	$	122

Consolidated Results of Operation of Company with Acquired Business

 The pro forma consolidated results include the impact of certain adjustments, including increased interest expense on acquisition debt, amortization of purchased intangible assets and income taxes.

(in thousands, except earnings per share)	2013		2012
Sales	$	386,170	$	344,233
Net income	$	29,456	$	24,348
Basic earnings per share	$	1.68	$	1.42
Diluted earnings per share	$	1.60	$	1.34

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GOODWILL (Tables)

12 Months Ended

Dec. 31, 2013

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Changes in Carrying Amount of Goodwill

The following table summarizes the changes in the carrying amount of goodwill for 2013 and 2012:

(In thousands)	2013			2012
Balance at Beginning of the Year	$	21,923		$	17,185
Acquisition		79,155			4,665
Foreign Currency Translations		(80	)		73
Balance at End of the Year	$	100,998		$	21,923
Goodwill	$	117,540		$	38,465
Accumulated Impairment Losses		(16,542	)		(16,542	)
Goodwill - Net	$	100,998		$	21,923

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Earnings Per Share - Earnings Per Share Computations (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 28, 2013	Jun. 29, 2013	Mar. 30, 2013	Dec. 31, 2012	Sep. 29, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Earnings Per Share [Abstract]
Net Income	$ 6,389	$ 7,155	$ 5,158	$ 8,564	$ 5,655	$ 4,930	$ 5,194	$ 6,095	$ 27,266	$ 21,874	$ 21,591
Basic Earnings Weighted Average Shares									17,484	17,143	16,750
Net Effect of Dilutive Stock Options									875	1,014	1,067
Diluted Earnings Weighted Average Shares									18,359	18,157	17,817
Basic Earnings Per Share	$ 0.36	$ 0.41	$ 0.30	$ 0.49	$ 0.33	$ 0.29	$ 0.30	$ 0.36	$ 1.56	$ 1.28	$ 1.29
Diluted Earnings Per Share	$ 0.34	$ 0.39	$ 0.28	$ 0.47	$ 0.31	$ 0.27	$ 0.29	$ 0.34	$ 1.49	$ 1.20	$ 1.21

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Retirement Plans and Related Post Retirement Benefits - Assumptions Used to Determine the Net Periodic Cost (Detail)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
SERP [Member]
Defined Benefit Plan Disclosure [Line Items]
Discount Rate	5.10%	4.20%	5.50%
Future Average Compensation Increases	5.00%	5.00%	5.00%
SERP Medical [Member]
Defined Benefit Plan Disclosure [Line Items]
Discount Rate	5.10%	4.20%	5.50%
Future Average Compensation Increases	5.76%	6.00%	9.00%

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Fair Value - Additional Information (Detail) (USD $)	12 Months Ended				0 Months Ended		12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Jul. 30, 2012 Max-Viz, Inc. [Member]	Oct. 01, 2013 AeroSat [Member]	Dec. 31, 2011 Trade Names [Member]	Dec. 31, 2013 Level 3 [Member] Max-Viz, Inc. [Member]	Dec. 31, 2013 Level 3 [Member] Ballard [Member]	Dec. 31, 2013 Level 3 [Member] AeroSat [Member]	Dec. 31, 2013 Level 3 [Member] Test Systems [Member]	Dec. 31, 2013 Maximum [Member] Level 3 [Member] Max-Viz, Inc. [Member]	Dec. 31, 2013 Maximum [Member] Level 3 [Member] Ballard [Member]	Dec. 31, 2013 Maximum [Member] Level 3 [Member] AeroSat [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Revenue growth target period					3 years			3 years	5 years	2 years
Contingent consideration on fair value liabilities						$ 5,000,000						$ 8,000,000	$ 5,500,000	$ 53,000,000
Unamortized trade names	500,000										400,000
Term of amortization	13 years										10 years
Total amortized intangible assets											3,900,000
Change in fair value of goodwill and intangible assets											0
Goodwill impairment charge	0	0	2,400,000	0
Determined fair value			400,000
Impairment charge of indefinite-lived intangible	$ 0	$ 0					$ 100,000

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Long-Term Debt and Note Payable - Summary of Long-Term Debt (Parenthetical) (Detail) (USD $)	12 Months Ended
	Dec. 31, 2013
Series 2007 Industrial Revenue Bonds [Member]
Debt Instrument [Line Items]
New York Industrial Development Agency payable	$ 340,000
New York Industrial Development Agency payable thereafter	330,000
Interest rate	3.20%
Series 1999 Industrial Revenue Bonds [Member]
Debt Instrument [Line Items]
New York Industrial Development Agency payable	350,000
New York Industrial Development Agency payable thereafter	145,000
Interest rate	3.20%
Series 1998 Industrial Revenue Bonds [Member]
Debt Instrument [Line Items]
New York Industrial Development Agency payable	400,000
Interest rate	3.20%
Senior Term Note issued under the Third Amended and Restated Credit Agreement [Member]
Debt Instrument [Line Items]
Interest rate on revolving credit at LIBOR rate	3.20%
Mandatory unscheduled prepayments	25.00%
Senior Term Note issued under the Third Amended and Restated Credit Agreement [Member] | July 18, 2013 to June 30, 2015 [Member]
Debt Instrument [Line Items]
Senior Term Notes, payable	2,375,000
Senior Term Note issued under the Third Amended and Restated Credit Agreement [Member] | June 30, 2015 to June 30, 2016 [Member]
Debt Instrument [Line Items]
Senior Term Notes, payable	3,562,000
Senior Term Note issued under the Third Amended and Restated Credit Agreement [Member] | June 30, 2016 to March 31, 2018 [Member]
Debt Instrument [Line Items]
Senior Term Notes, payable	4,750,000
Senior Notes [Member]
Debt Instrument [Line Items]
Senior Term Notes, payable	2,000,000
Balloon payment in 2014	$ 5,000,000
Minimum [Member] | Senior Term Note issued under the Third Amended and Restated Credit Agreement [Member]
Debt Instrument [Line Items]
Interest rate on revolving credit at LIBOR rate	2.25%
Minimum [Member] | Senior Notes [Member]
Debt Instrument [Line Items]
Interest rate on revolving credit at LIBOR rate	2.25%
Maximum [Member] | Senior Term Note issued under the Third Amended and Restated Credit Agreement [Member]
Debt Instrument [Line Items]
Interest rate on revolving credit at LIBOR rate	3.50%
Maximum [Member] | Senior Notes [Member]
Debt Instrument [Line Items]
Interest rate on revolving credit at LIBOR rate	3.50%
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of Credit Maturity	Aug. 31, 2016
Revolving Credit Facility [Member] | Minimum [Member]
Debt Instrument [Line Items]
Interest rate on revolving credit at LIBOR rate	1.50%
Revolving Credit Facility [Member] | Maximum [Member]
Debt Instrument [Line Items]
Interest rate on revolving credit at LIBOR rate	2.50%
Credit Agreement [Member]
Debt Instrument [Line Items]
Restated credit agreement date	Jul. 18, 2013

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Shareholders' Equity - Additional Information (Detail) (USD $) Share data in Millions, unless otherwise specified	12 Months Ended		12 Months Ended
	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2013 Convertible Class B Stock [Member]
Stockholders Equity [Line Items]
Common stock reserved		7.9
Class B stock voting rights per share			10 votes per share
Effective income tax rate	35.00%
Income tax effect recorded for currency translation adjustments	$ 0

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Stock Option and Purchase Plans - Summary of Weighted Average Exercise Prices and Contractual Lives for Outstanding and Exercisable Stock Options (Detail) (USD $)					12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2013 Range One [Member]	Dec. 31, 2013 Range Two [Member]	Dec. 31, 2013 Range Three [Member]	Dec. 31, 2013 Range Four [Member]	Dec. 31, 2013 Range Five [Member]	Dec. 31, 2013 Range Six [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price Lower Range					$ 2.68	$ 4.84	$ 9.15	$ 14.01	$ 41.40
Exercise Price Upper Range					$ 3.45	$ 7.07	$ 10.07	$ 24.88	$ 51.93
Outstanding, Shares	1,409,777	1,521,275	1,661,445	1,904,232	265,404	578,364	141,975	372,314	51,720	1,409,777
Outstanding, Weighted Average Remaining Life in Years					10 months 24 days	4 years 8 months 12 days	3 years 2 months 12 days	7 years 6 months	9 years 10 months 24 days	4 years 9 months 18 days
Outstanding, Weighted Average Exercise Price	$ 10.44	$ 8.23	$ 6.71	$ 5.58	$ 3.07	$ 5.34	$ 9.35	$ 18.62	$ 49.49	$ 10.44
Exercisable, Shares	1,149,532	1,168,459	1,280,744		265,404	533,109	141,975	209,044		1,149,532
Exercisable, Weighted Average Remaining Life in Years					10 months 24 days	4 years 7 months 6 days	3 years 2 months 12 days	6 years 10 months 24 days		4 years
Exercisable, Weighted Average Exercise Price	$ 7.81	$ 6.72	$ 5.47		$ 3.07	$ 5.35	$ 9.35	$ 19.08		$ 7.81

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Stock Option and Purchase Plans - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Period of options granted	5 years
Share price	$ 51.00	$ 19.07	$ 25.95
The weighted average fair value of options vested	$ 6.20	$ 6.18	$ 3.54
Total fair value of options that vested during the year	$ 1,000,000	$ 1,000,000	$ 600,000
Total compensation costs related to non-vested awards	3,500,000
Weighted average period	2 years 6 months
Options outstanding	1,409,777	1,521,275	1,661,445	1,904,232
Weighted Average Fair Value of Options Granted	$ 23.22	$ 9.93	$ 12.65
Employee Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share price	$ 35.16
Investment as percentage of cash compensation	20.00%
Common stock price to market value	85.00%
Cash compensation limit	$ 21,250
Number of shares employees had subscribed to purchase	51,253
Weighted Average Fair Value of Options Granted	$ 9.31	$ 4.99	$ 3.96
Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Period of options granted	6 months
Key Employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Period of options granted	5 years
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based payment award options exercisable period	10 years
Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based payment award options exercisable period	10 years
Period of options granted	5 years
Options outstanding	1,136,733
Options available for future grant	531,516
Directors Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based payment award options exercisable period	10 years
Period of options granted	6 months
Options outstanding	273,044
Options available for future grant	145,555

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Stock Option and Purchase Plans - Fair Value for Options Granted under Employee Stock Purchase Plan (Detail)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Dividend Yield	0.00%	0.00%	0.00%
Employee Stock [Member]
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Risk-free Interest Rate	0.10%	0.17%	0.10%
Dividend Yield	0.00%	0.00%	0.00%
Volatility Factor	0.37%	0.37%	0.52%
Expected Life in Years	1 year	1 year	1 year

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Shareholders' Equity - Components of Accumulated Other Comprehensive Income (Loss) (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Equity [Abstract]
Foreign Currency Translation Adjustments	$ 1,284	$ 1,415
Mark to Market Adjustments for Derivatives - Before Tax	(107)	(218)
Tax Benefit	38	76
Mark to Market Adjustments for Derivatives - After Tax	(69)	(142)	(256)	(338)
Retirement Liability Adjustment - Before Tax	(7,423)	(9,316)
Tax Benefit	2,597	3,260
Retirement Liability Adjustment - After Tax	(4,826)	(6,056)
Accumulated Other Comprehensive Loss	$ (3,611)	$ (4,783)

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Retirement Plans and Related Post Retirement Benefits - Assumptions Used to Calculate the Post Retirement Benefit Obligation (Detail)	Dec. 31, 2013	Dec. 31, 2012
SERP [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Discount Rate	5.10%	4.20%
Future Average Compensation Increases	5.00%	5.00%
SERP Medical [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Discount Rate	5.10%	4.20%

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SEGMENTS

12 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

SEGMENTS

NOTE 18 — SEGMENTS

Segment information and reconciliations to consolidated amounts for the years ended December 31 are as follows:

(In thousands)	2013			2012			2011
Sales:
Aerospace	$	330,530		$	254,955		$	213,874
Test Systems		10,103			11,491			14,289
Less Inter-segment Sales		(696	)		—			—
		9,407			11,491			14,289
Total Consolidated Sales	$	339,937		$	266,446		$	228,163
Operating Profit (Loss) and Margins:
Aerospace	$	55,200		$	44,137		$	40,400
		16.7	%		17.3	%		18.9	%
Test Systems		(3,756	)		(4,985	)		(4,760	)
		(37.2	)%		(43.4	)%		(33.3	)%
Total Operating Profit		51,444			39,152			35,640
		15.1	%		14.7	%		15.6	%
Deductions from Operating Profit:
Interest Expense		(4,094	)		(1,042	)		(1,806	)
Corporate and Other Expenses, Net		(9,139	)		(6,527	)		(4,819	)
Earnings before Income Taxes	$	38,211		$	31,583		$	29,015
Depreciation and Amortization:
Aerospace	$	10,058		$	6,043		$	3,929
Test Systems		590			634			584
Corporate		411			228			430
Total Depreciation and Amortization	$	11,059		$	6,905		$	4,943
Identifiable Assets:
Aerospace	$	428,619		$	177,168		$	136,930
Test Systems		11,035			18,121			20,020
Corporate		51,617			16,700			17,955
Total Assets	$	491,271		$	211,989		$	174,905
Capital Expenditures:
Aerospace	$	6,711		$	16,324		$	14,195
Test Systems		61			396			86
Corporate		96			—			—
Total Capital Expenditures	$	6,868		$	16,720		$	14,281

Operating profit is sales less cost of products sold and other operating expenses, excluding interest expense and other corporate expenses. Cost of products sold and other operating expenses are directly identifiable to the respective segment.

For the years ended December 31, 2013 and 2012, there was no goodwill or purchased intangible asset impairment losses in either the Aerospace or Test System segment. For the year ended December 31, 2011, the operating loss in the Test Systems segment includes a goodwill impairment loss of approximately $2.4 million and a purchased intangible asset impairment loss of approximately $0.1 million. In the Aerospace segment, goodwill amounted to $101.0 million and $21.9 million at December 31, 2013 and 2012, respectively. In the Test Systems segment there was no goodwill as of December 31, 2013 and 2012.

The following table summarizes the Company’s sales by geographic region for the years ended December 31:

	2013		2012		2011
(In thousands)
North America	$	300,368	$	233,245	$	196,447
Europe		21,190		16,188		16,238
Asia		15,570		14,030		12,544
South America		1,851		1,937		2,678
Other		958		1,046		256
	$	339,937	$	266,446	$	228,163

The following table summarizes the Company’s property, plant and equipment by country for the years ended December 31:

	2013		2012		2011
(In thousands)
United States	$	59,803	$	53,235	$	40,871
France		10,771		—		—
Canada		326		302		251
	$	70,900	$	53,537	$	41,122

Sales recorded by the Company’s foreign operations were $16.5 million in 2013, $14.2 million in 2012, and $13.1 million in 2011. Net income from these locations was $0.2 million in 2013, $1.0 million in 2012, and $0.9 million in 2011. Net assets held outside of the United States total $40.1 million at December 31, 2013 and $6.7 million at December 31, 2012. The exchange loss included in determining net income was $0.1 million in each of the years ending 2013, 2012 and 2011. Cumulative translation adjustments amounted to $1.3 million and $1.4 million at December 31, 2013 and 2012, respectively.

The Company has a significant concentration of business with two major customers, Panasonic Aviation Corporation and The Boeing Company. The following is information relating to the activity with those customers:

	2013			2012			2011
Percent of Consolidated Revenue
Panasonic		29.6	%		38.0	%		35.7	%
Boeing		14.5	%		5.5	%		4.4	%

(In thousands)	2013		2012
Accounts Receivable at December 31,
Panasonic	$	14,090	$	17,412
Boeing		6,458		1,939

Sales to Panasonic are all in the Aerospace segment. Sales to the Boeing occur in both segments.

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Inventories - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Inventory Disclosure [Abstract]
Reserve for inventory valuation	$ 11.0	$ 12.0
Percentage of reserve for inventory valuation	11.50%	19.80%

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DERIVATIVE FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2013

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Summary of Activity in AOCI Related to Derivatives

Activity in AOCI related to these derivatives is summarized below:

(In thousands)	2013			2012			2011
Derivative Balance at the Beginning of the Year in AOCI	$	(142	)	$	(256	)	$	(338	)
Net Deferral in AOCI of Derivatives:
Net (Increase) Decrease in Fair Value of Derivatives		2			(34	)		(171	)
Tax Effect		—			14			61
		2			(20	)		(110	)
Net Reclassification from AOCI into Earnings:
Reclassification from AOCI into Earnings – Interest Expense		109			209			298
Tax Effect		(38	)		(75	)		(106	)
		71			134			192
Net Change in Derivatives for the Year		73			114			82
Derivative Balance at the End of the Year in AOCI	$	(69	)	$	(142	)	$	(256	)

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Retirement Plans and Related Post Retirement Benefits - Details of Multi Employer Plans (Parenthetical) (Detail) (Post Acquisition [Member], USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013
Post Acquisition [Member]
Multiemployer Plans [Line Items]
Post acquisition contribution	$ 300

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Segments - Additional Information (Detail) (USD $)	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 28, 2013	Jun. 29, 2013	Mar. 30, 2013	Dec. 31, 2012	Sep. 29, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013 Customer	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Segment Reporting Information [Line Items]
Goodwill	$ 100,998,000				$ 21,923,000				$ 100,998,000	$ 21,923,000	$ 17,185,000
Purchased intangible impairment loss									0	0
Goodwill impairment loss									0	0	2,400,000	0
Sales	105,456,000	89,681,000	70,833,000	73,967,000	67,420,000	68,899,000	64,989,000	65,138,000	339,937,000	266,446,000	228,163,000
Net Income	6,389,000	7,155,000	5,158,000	8,564,000	5,655,000	4,930,000	5,194,000	6,095,000	27,266,000	21,874,000	21,591,000
Exchange loss in determining net income									100,000	100,000	100,000
Cumulative translation adjustments	1,284,000				1,415,000				1,284,000	1,415,000
Number of major customers									2
Foreign Operations [Member]
Segment Reporting Information [Line Items]
Sales									16,500,000	14,200,000	13,100,000
Net Income									200,000	1,000,000	900,000
Foreign Country [Member]
Segment Reporting Information [Line Items]
Net assets	40,100,000				6,700,000				40,100,000	6,700,000
Aerospace Segment [Member]
Segment Reporting Information [Line Items]
Goodwill	101,000,000				21,900,000				101,000,000	21,900,000
Purchased intangible impairment loss
Goodwill impairment loss
Test Systems Segment [Member]
Segment Reporting Information [Line Items]
Goodwill	0				0				0	0
Purchased intangible impairment loss											100,000
Goodwill impairment loss											$ 2,400,000

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RETIREMENT PLANS AND RELATED POST RETIREMENT BENEFITS (Tables)

12 Months Ended

Dec. 31, 2013

Details of Multi Employer Plans

Pension Fund	EIN/Pension Plan Number	Zone Status	Rehabilitation Plan Status	2013 Company Contributions (In thousands)			Surcharge Imposed	Expiration Date of Collective Bargaining Agreement	Plan Year End
WCTPP	91-6145047	Green	None	$	830	*	None	10/31/16	12/31

* - Total contributions for fiscal year 2013, post-acquisition contributions totaled 0.3 million.

SERP [Member]

Reconciliation of Beginning and Ending Balances of Projected Benefit Obligation

The reconciliation of the beginning and ending balances of the projected benefit obligation of the plans for the years ended December 31 is as follows:

(In thousands)	2013			2012
Funded Status
Projected Benefit Obligation
Beginning of the Year — January 1	$	15,042		$	7,588
Adoption of SERP II		—			5,790
Service Cost		295			303
Interest Cost		624			548
Actuarial (Gain) Loss		(1,299	)		1,161
Benefits Paid		(348	)		(348	)
End of the Year — December 31	$	14,314		$	15,042

Assumptions Used to Calculate the Post Retirement Benefit Obligation

The assumptions used to calculate the projected benefit obligation as of December 31 are as follows:

	2013			2012
Discount Rate		5.10	%		4.20	%
Future Average Compensation Increases		5.00	%		5.00	%

Summarizes the Components of Net Periodic Cost

The following table summarizes the components of the net periodic cost for the years ended December 31:

(In thousands)	2013		2012		2011
Net Periodic Cost
Service Cost — Benefits Earned During Period	$	295	$	303	$	46
Interest Cost		624		548		328
Amortization of Prior Service Cost		495		426		109
Amortization of Losses		128		91		11
Net Periodic Cost	$	1,542	$	1,368	$	494

Assumptions Used to Determine the Net Periodic Cost

The assumptions used to determine the net periodic cost are as follows:

	2013			2012			2011
Discount Rate		4.20	%		4.50	%		5.50	%
Future Average Compensation Increases		5.00	%		5.00	%		5.00	%

SERP Medical [Member]

Reconciliation of Beginning and Ending Balances of Projected Benefit Obligation

The reconciliation of the beginning and ending balances of the accumulated postretirement benefit obligation for the years ended December 31, is as follows:

(In thousands)	2013			2012
Funded Status
Accumulated Postretirement Benefit Obligation
Beginning of the Year — January 1	$	593		$	568
Service Cost		3			2
Interest Cost		24			24
Actuarial Loss		55			42
Benefits Paid		(45	)		(43	)
End of the Year — December 31	$	630		$	593

Assumptions Used to Calculate the Post Retirement Benefit Obligation

The assumptions used to calculate the accumulated postretirement benefit obligation as of December 31 are as follows:

	2013			2012
Discount Rate		5.10	%		4.20	%

Summarizes the Components of Net Periodic Cost

The following table summarizes the components of the net periodic cost for the years ended December 31:

(In thousands)	2013		2012		2011
Net Periodic Cost
Service Cost — Benefits Earned During Period	$	3	$	2	$	2
Interest Cost		24		24		27
Amortization of Prior Service Cost		25		26		25
Amortization of (Gains) Losses		—		—		(4	)
Net Periodic Cost	$	52	$	52	$	50

Assumptions Used to Determine the Net Periodic Cost

The assumptions used to determine the net periodic cost are as follows:

	2013			2012			2011
Discount Rate		4.20	%		4.50	%		5.50	%
Future Average Healthcare Benefit Increases		5.76	%		6.00	%		9.00	%

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Intangible Assets - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Schedule Of Estimated Future Amortization Expense [Line Items]
Amortization expense for intangibles	$ 4.9	$ 2.3	$ 0.5
Identifiable asset with an indefinite life	0.5
Impairment charge of indefinite-lived intangible	0	0
Trade Names [Member]
Schedule Of Estimated Future Amortization Expense [Line Items]
Impairment charge of indefinite-lived intangible			$ 0.1

XML

Income Taxes - Reconciliation of Total Amounts of Unrecognized Tax Benefits Excluding Interest and Penalties (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income Tax Disclosure [Abstract]
Balance at Beginning of the Year	$ 840	$ 880	$ 1,470
Increases (Decreases) as a Result of Tax Positions Taken in Prior Years	145	(220)	(1,090)
Increases as a Result of Tax Positions Taken in the Current Year	955	180	500
Balance at End of the Year	$ 1,940	$ 840	$ 880

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Warranty - Summary of Activity in Warranty Accrual (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Guarantees [Abstract]
Balance at Beginning of the Year	$ 2,551	$ 1,092	$ 1,699
Warranty Liabilities Acquired	671
Warranties Issued	722	2,430	1,446
Reassessed Warranty Exposure	(222)		(95)
Warranties Settled	(926)	(971)	(1,958)
Balance at End of the Year	$ 2,796	$ 2,551	$ 1,092

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Summary of Significant Accounting Principles and Practices - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 31, 2013 Segment Contract Location Reporting_Unit	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Schedule Of Accounting Policies [Line Items]
Number of Primary locations	12
Reportable segments	2
Significant contracts	0
Research and development, design and related engineering	$ 52,800,000	$ 44,900,000	$ 36,100,000
Period of options granted	5 years
Options granted	20.00%
Excess tax benefits from share based payment arrangements	1,198,000	1,252,000	1,614,000
Depreciation expense	5,700,000	4,400,000	4,000,000
Number of reporting units	9
Number of reporting units have goodwill and subject to goodwill impairment test	6
Goodwill impairment charge	0	0	2,400,000	0
Cash dividends	0
Acquisition expenses	1,900,000
Test Systems Segment [Member]
Schedule Of Accounting Policies [Line Items]
Revenue recognized from long-term, fixed-price contracts	4,400,000	4,200,000	10,000,000
Goodwill impairment charge			$ 2,400,000
UNITED STATES
Schedule Of Accounting Policies [Line Items]
Number of Primary locations	10
Canada [Member]
Schedule Of Accounting Policies [Line Items]
Number of Primary locations	1
FRANCE
Schedule Of Accounting Policies [Line Items]
Number of Primary locations	1
Buildings [Member] | Minimum [Member]
Schedule Of Accounting Policies [Line Items]
Property, plant and equipment, useful life	25 years
Buildings [Member] | Maximum [Member]
Schedule Of Accounting Policies [Line Items]
Property, plant and equipment, useful life	40 years
Machinery and Equipment [Member] | Minimum [Member]
Schedule Of Accounting Policies [Line Items]
Property, plant and equipment, useful life	4 years
Machinery and Equipment [Member] | Maximum [Member]
Schedule Of Accounting Policies [Line Items]
Property, plant and equipment, useful life	10 years
Convertible Class B Stock [Member]
Schedule Of Accounting Policies [Line Items]
Stock distribution	One-for-five

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ACCOUNTS RECEIVABLE

12 Months Ended

Dec. 31, 2013

Receivables [Abstract]

ACCOUNTS RECEIVABLE

NOTE 2 — ACCOUNTS RECEIVABLE

Accounts receivable at December 31 consists of:

(In thousands)	2013			2012
Trade Accounts Receivable	$	58,224		$	44,196
Long-term Contract Receivables:
Amounts Billed		—			907
Unbilled Recoverable Costs and Accrued Profits		2,858			1,020
Total Long-term Contract Receivables		2,858			1,927
Total Receivables		61,082			46,123
Less Allowance for Doubtful Accounts		(140	)		(650	)
	$	60,942		$	45,473

XML

Income Taxes - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income Tax Contingency [Line Items]
Penalties or interest liabilities accrued	$ 0	$ 0
Penalties or interest expense	0	0	0
Pretax income	0.2	1.0	0.9
Foreign taxes on undistributed earnings of foreign subsidiaries	3.8
Foreign tax credit	1.5
State and foreign tax credit carryforwards expiration beginning year	2015
State and foreign tax credit carryforwards expiration ending year	2028
Operating loss carryforwards, expiration dates	These state net operating loss carryforwards amount to approximately $17.8 million and expire at various dates from 2027 through 2033
Deferred tax assets	4.8
Operating loss carryforwards expiration beginning year	2027
Operating loss carryforwards expiration ending year	2033
Tax benefits related to stock option exercises	1.3	1.2
Estimated Benefits for research and development tax credits		0
Tax benefits		0.7
Tax benefits Reserve		0.7
Amount recognized in tax credit		1.1
State and Local Jurisdiction [Member]
Income Tax Contingency [Line Items]
Net operating loss carryforwards	$ 17.8
Minimum [Member] | Federal Jurisdiction [Member]
Income Tax Contingency [Line Items]
Year for tax examination	2011
Minimum [Member] | State and Local Jurisdiction [Member]
Income Tax Contingency [Line Items]
Year for tax examination	2010
Maximum [Member] | Federal Jurisdiction [Member]
Income Tax Contingency [Line Items]
Year for tax examination	2013
Maximum [Member] | State and Local Jurisdiction [Member]
Income Tax Contingency [Line Items]
Year for tax examination	2013

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SELECTED QUARTERLY FINANCIAL INFORMATION (Tables)

12 Months Ended

Dec. 31, 2013

Quarterly Financial Information Disclosure [Abstract]

Summarizes Selected Quarterly Financial Information

The following table summarizes selected quarterly financial information for 2013 and 2012:

	Quarter Ended
(Unaudited)	Dec. 31,		Sept. 28,		June 29,		March 30,		Dec. 31,		Sept. 29,		June 30,		March 31,
(In thousands, except for per share data)	2013		2013		2013		2013		2012		2012		2012		2012
Sales	$	105,456	$	89,681	$	70,833	$	73,967	$	67,420	$	68,899	$	64,989	$	65,138
Gross Profit (sales less cost of products sold)		25,173		23,785		18,681		20,219		17,551		16,717		17,054		18,120
Income Before Tax		8,902		10,747		7,718		10,844		7,690		7,381		7,510		9,002
Net Income		6,389		7,155		5,158		8,564		5,655		4,930		5,194		6,095
Basic Earnings Per Share		0.36		0.41		0.30		0.49		0.33		0.29		0.30		0.36
Diluted Earnings Per Share		0.34		0.39		0.28		0.47		0.31		0.27		0.29		0.34

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SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES AND PRACTICES (Policies)

12 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

Description of the Business

Description of the Business

Astronics is a leading supplier of products to the aerospace and defense industries. Our products include advanced, high-performance lighting and safety systems, electrical power generation, distribution and motion systems, avionics and structure and other products for the global aerospace industry as well as test, training and simulation systems primarily for the military.

We have twelve primary locations, ten in the United States, one in Canada, and one in France. We design and build our products through our wholly owned subsidiaries Astronics Advanced Electronic Systems Corp. (“AES”); Astronics AeroSat Corporation (“AeroSat”); Ballard Technology, Inc. (“Ballard”); DME Corporation (“DME”); Luminescent Systems, Inc. (“LSI”); Luminescent Systems Canada, Inc. (“LSI Canada”); Max-Viz, Inc. (“Max-Viz”); Peco, Inc. (“Peco”); PGA Electronic s.a. (“PGA”); and Astronics Test Systems, Inc. (“ATS”).

On May 28, 2013 Astronics entered into a Stock Purchase Agreement to acquire all of the outstanding capital stock of Peco. Peco designs and manufacturers highly engineered commercial aerospace interior components and systems for the aerospace industry. The acquisition was completed on July 18, 2013. On October 1, 2013 Astronics acquired certain assets and liabilities from AeroSat Corporation and related entities, a supplier of aircraft antenna systems. On December 5, 2013, Astronics completed the acquisition of PGA. PGA designs and manufactures seat motion and lighting systems primarily for business and first class aircraft seats and is Europe’s leading provider of in-flight entertainment/communication systems as well as cabin management systems for private VVIP aircraft. Peco, AeroSat and PGA are all part of our Aerospace segment.

At December 31, 2013, the Company has two reportable segments, Aerospace and Test Systems. The Aerospace segment designs and manufactures products for the global aerospace industry. The Test Systems segment designs, manufactures and maintains communications and weapons test systems and training and simulation devices for military applications.

On February 28, 2014, Astronics acquired, through a wholly owned subsidiary Astronics Test Systems, Inc. (“ATS”), certain assets and liabilities of EADS North America’s Test and Services division, located in Irvine, California. ATS is a leading provider of highly engineered automatic test systems, subsystems and instruments for semi-conductor and consumer electronics products to both the commercial and defense industries. ATS will be reported as a member of our Test Systems segment.

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated.

Acquisitions are accounted for under the acquisition method and, accordingly, the operating results for the acquired companies are included in the consolidated statements of operations from the respective dates of acquisition.

Revenue and Expense Recognition

Revenue and Expense Recognition

In the Aerospace segment, revenue is recognized on the accrual basis at the time of shipment of goods and transfer of title. There are no significant contracts allowing for right of return.

In the Test Systems segment, revenue of approximately $4.4 million, $4.2 million and $10.0 million for the years ended December 31, 2013, 2012 and 2011, respectively, was recognized from long-term, fixed-price contracts using the percentage-of-completion method of accounting, measured by multiplying the estimated total contract value by the ratio of actual contract costs incurred to date to the estimated total contract costs. Substantially all long-term contracts are with U.S. government agencies and contractors thereto. The Company makes significant estimates involving its usage of percentage-of-completion accounting to recognize contract revenues. The Company periodically reviews contracts in process for estimates-to-completion, and revises estimated gross profit accordingly. While the Company believes its estimated gross profit on contracts in process is reasonable, unforeseen events and changes in circumstances can take place in a subsequent accounting period that may cause the Company to revise its estimated gross profit on one or more of its contracts in process. Accordingly, the ultimate gross profit realized upon completion of such contracts can vary from estimated amounts between accounting periods. Revenue not recognized using the percentage-of-completion method is recognized at the time of shipment of goods and transfer of title.

Cost of Products Sold, Engineering and Development and Selling, General and Administrative Expenses

Cost of Products Sold, Engineering and Development and Selling, General and Administrative Expenses

Cost of products sold includes the costs to manufacture products such as direct materials and labor and manufacturing overhead as well as all engineering and developmental costs. The Company is engaged in a variety of engineering and design activities as well as basic research and development activities directed to the substantial improvement or new application of the Company’s existing technologies. These costs are expensed when incurred and included in cost of products sold. Research and development, design and related engineering amounted to $52.8 million in 2013, $44.9 million in 2012 and $36.1 million in 2011. Selling, general and administrative expenses include costs primarily related to our sales, marketing and administrative departments.

Shipping and Handling

Shipping and Handling

Shipping and handling costs are expensed as incurred and are included in costs of products sold.

Stock Distribution

Stock Distribution

On September 27, 2013, the Company announced a one-for-five distribution of Class B Stock to holders of both Common and Class B Stock. Stockholders received one share of Class B Stock for every five shares of Common and Class B Stock held on the record date of October 10, 2013. Fractional shares were paid in cash. All share quantities, share prices and per share data reported throughout this report have been adjusted to reflect the impact of this distribution.

Equity-Based Compensation

Equity-Based Compensation

The Company accounts for its stock options following Accounting Standards Codification (“ASC”) Topic 718 Compensation – Stock Compensation (“ASC Topic 718”). This Topic requires all equity-based payments to employees, including grants of employee stock options, to be recognized in the statement of earnings based on the grant date fair value of the award. For awards with graded vesting, the Company uses a straight-line method of attributing the value of stock-based compensation expense, subject to minimum levels of expense, based on vesting.

Under ASC Topic 718, stock compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. Vesting requirements vary for directors, officers and key employees. In general, options granted to outside directors vest six months from the date of grant and options granted to officers and key employees vest with graded vesting over a five-year period, 20% each year, from the date of grant.

The tax benefits from share based payment arrangements were approximately $1.2 million in 2013, $1.2 million in 2012, and $1.6 million in 2011. These were classified as cash flows from financing activities.

Cash and Cash Equivalents

Cash and Cash Equivalents

All highly liquid instruments with a maturity of three months or less at the time of purchase are considered cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts Receivable and Allowance for Doubtful Accounts

The Company will record a valuation allowance to account for potentially uncollectible accounts receivable. The allowance is determined based on our knowledge of the business, specific customers, review of the receivables’ aging and a specific identification of accounts where collection is at risk. Account balances are charged against the allowance after all means of collections have been exhausted and recovery is considered remote. The Company typically does not require collateral.

Inventories

Inventories

Inventories are stated at the lower of cost or market, cost being determined in accordance with the first-in, first-out method. The Company records valuation reserves to provide for excess, slow moving or obsolete inventory or to reduce inventory to the lower of cost or market value. In determining the appropriate reserve, the Company considers the age of inventory on hand, the overall inventory levels in relation to forecasted demands as well as reserving for specifically identified inventory that the Company believes is no longer salable.

Property, Plant and Equipment

Property, Plant and Equipment

Depreciation of property, plant and equipment is computed using the straight-line method for financial reporting purposes and using accelerated methods for income tax purposes. Estimated useful lives of the assets are as follows: buildings, 25-40 years; machinery and equipment, 4-10 years. Leasehold improvements are amortized over the shorter of the terms of the lease or the estimated useful lives of the assets.

The cost of properties sold or otherwise disposed of and the accumulated depreciation thereon are eliminated from the accounts, and the resulting gain or loss, as well as maintenance and repair expenses, are reflected in income. Replacements and improvements are capitalized.

Depreciation expense was approximately $5.7 million, $4.4 million and $4.0 million in 2013, 2012 and 2011, respectively.

Long-Lived Assets

Long-Lived Assets

Long-lived assets to be held and used are initially recorded at cost. The carrying value of these assets is evaluated for recoverability whenever adverse effects or changes in circumstances indicate that the carrying amount may not be recoverable. Impairments are recognized if future undiscounted cash flows from operations are not expected to be sufficient to recover long-lived assets. The carrying amounts are then reduced to fair value, which is typically determined by using a discounted cash flow model.

Goodwill

Goodwill

The Company tests goodwill at the reporting unit level on an annual basis or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company has nine reporting units, however as of November 1, 2013 (the annual testing date), only six reporting units have goodwill and were subject to the goodwill impairment test.

We may elect to perform a qualitative assessment that considers economic, industry and company-specific factors for all or selected reporting units. If, after completing the assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we proceed to a quantitative test. We may also elect to perform a quantitative test instead of a qualitative test for any or all of our reporting units.

Quantitative testing requires a comparison of the fair value of each reporting unit to its carrying value. We use the discounted cash flow method to estimate the fair value of our reporting units. The discounted cash flow method incorporates various assumptions, the most significant being projected revenue growth rates, operating margins and cash flows, the terminal growth rate and the weighted average cost of capital. If the carrying value of the reporting unit exceeds its fair value, goodwill is considered impaired and any loss must be measured. To determine the amount of the impairment loss, the implied fair value of goodwill is determined by assigning a fair value to all of the reporting unit’s assets and liabilities, including any unrecognized intangible assets, as if the reporting unit had been acquired in a business combination at fair value. If the carrying amount of the reporting unit goodwill exceeds the implied fair value of that goodwill, an impairment loss would be recognized in an amount equal to that excess.

See Note 5 for further information regarding the goodwill impairment charges in 2011 relating to our Test Systems reporting unit. There were no impairment charges in 2013 or 2012.

Intangible Assets

Intangible Assets

Acquired intangibles are generally valued based upon future economic benefits such as earnings and cash flows. Acquired identifiable intangible assets are recorded at fair value and are amortized over their estimated useful lives. Acquired intangible assets with an indefinite life are not amortized, but are reviewed for impairment at least annually or more frequently whenever events or changes in circumstances indicate that the carrying amount of those assets are below its estimated fair value.

Impairment is tested under ASC 350, Intangibles - Goodwill and Other, as amended by Accounting Standards Update (“ASU”) 2012-02, by first performing a qualitative analysis in a manner similar to the testing methodology of goodwill discussed previously. The qualitative factors applied under this new provision indicated no impairment to the Company’s indefinite lived intangible assets in 2013 and 2012. See Note 4 for further information regarding the impairment charges in 2011 relating to intangible assets in our Test Systems reporting unit.

Financial Instruments

Financial Instruments

The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, notes payable, long-term debt and interest rate swaps. The Company performs periodic credit evaluations of its customers’ financial condition and generally does not require collateral. The Company does not hold or issue financial instruments for trading purposes. Due to their short-term nature, the carrying values of cash and equivalents, accounts receivable, accounts payable, and notes payable approximate fair value. The carrying value of the Company’s variable rate long-term debt instruments also approximates fair value due to the variable rate feature of these instruments. The Company’s interest rate swaps are recorded at fair value as described under Note 14 - Fair Value.

Derivatives

Derivatives

The accounting for changes in the fair value of derivatives depends on the intended use and resulting designation. The Company’s use of derivative instruments was limited to a cash flow hedge for interest rate risk associated with long-term debt. Interest rate swaps are used to adjust the proportion of total debt that is subject to variable and fixed interest rates. The interest rate swaps are designated as hedges of the amount of future cash flows related to interest payments on variable-rate debt that, in combination with the interest payments on the debt, convert a portion of the variable-rate debt to fixed-rate debt. The Company records all derivatives on the balance sheet at fair value. The related gains or losses, to the extent the derivatives are effective as a hedge, are deferred in shareholders’ equity as a component of Accumulated Other Comprehensive Income (Loss) (AOCI) and reclassified into earnings at the time interest expense is recognized on the associated long-term debt. Any ineffectiveness is recorded in the Consolidated Statements of Operations.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities and the reported amounts of revenues and expenses during the reporting periods in the financial statements and accompanying notes. Actual results could differ from those estimates.

Foreign Currency Translation

Foreign Currency Translation

The Company accounts for its foreign currency translation in accordance with ASC Topic 830, Foreign Currency Translation. The aggregate transaction gain or loss included in operations was insignificant for 2013, 2012 and 2011.

Dividends

Dividends

The Company has not paid any cash dividends in the three-year period ended December 31, 2013. It has no plans to pay cash dividends as it plans to retain all cash from operations as a source of capital to finance growth in the business.

Loss Contingencies

Loss Contingencies

Loss contingencies may from time to time arise from situations such as claims and other legal actions. Loss contingencies are recorded as liabilities when it is probable that a liability has been incurred and the amount of the loss is reasonably estimable. Disclosure is required when there is a reasonable possibility that the ultimate loss will exceed the recorded provision. Contingent liabilities are often resolved over long time periods. In recording liabilities for probable losses, management is required to make estimates and judgments regarding the amount or range of the probable loss. Management continually assesses the adequacy of estimated loss contingencies and, if necessary, adjusts the amounts recorded as better information becomes known.

Acquisitions

Acquisitions

The Company accounts for its acquisitions under ASC Topic 805, Business Combinations and Reorganizations (“ASC Topic 805”). ASC Topic 805 provides guidance on how the acquirer recognizes and measures the consideration transferred, identifiable assets acquired, liabilities assumed, non-controlling interests, and goodwill acquired in a business combination. ASC Topic 805 also expands required disclosures surrounding the nature and financial effects of business combinations. Acquisition costs are expensed as incurred. Acquisition expenses in 2013 were approximately $1.9 million and were insignificant in 2012 and 2011. See Note 19 regarding the acquisitions in 2013 and 2012.

Newly Adopted and Recent Accounting Pronouncements

Newly Adopted and Recent Accounting Pronouncements

On January 1, 2013, the Company adopted the new provisions of Accounting Standards Update (“ASU”) No. 2013-02 Comprehensive Income (Topic 220). The amendments in this ASU require the Company to provide information about the amounts reclassified out of accumulated other comprehensive income, by component. Other than requiring additional disclosures, the adoption of this amendment does not have a material impact on the Company’s financial statements.

The Company’s management has reviewed recent accounting pronouncements issued through the date of the issuance of financial statements. In management’s opinion, none of these new pronouncements apply or will have a material effect on the Company’s financial statements

Income Taxes Policy

The FASB issued ASC Topic 740-10 Overall - Uncertainty in Income Taxes (“ASC Topic 740-10”) which clarifies the accounting and disclosure for uncertainty in tax positions, as defined. ASC Topic 740-10 seeks to reduce the diversity in practice associated with certain aspects of the recognition and measurement related to accounting for income taxes. The Company is subject to the provisions of ASC Topic 740-10 and has analyzed filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions.

Should the Company need to accrue a liability for uncertain tax benefits, any interest associated with that liability will be recorded as interest expense. Penalties, if any, would be recognized as operating expenses. There are no penalties or interest liabilities accrued as of December 31, 2013 or 2012, nor are any penalties or interest costs included in expense for each of the years ended December 31, 2013, 2012 and 2011. The years under which we conducted our evaluation coincided with the tax years currently still subject to examination by major federal and state tax jurisdictions, those being 2011 through 2013 for federal purposes and 2010 through 2013 for state purposes.

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Schedule II - Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2013

Valuation And Qualifying Accounts [Abstract]

Schedule II - Valuation and Qualifying Accounts

SCHEDULE II

Valuation and Qualifying Accounts

Year	Description	Balance at the Beginning of Period		Acquisitions		Charged to Cost and Expense		(Write-Offs) Recoveries / Other			Balance at End of Period
(In thousands)
2013	Allowance for Doubtful Accounts	$	650	$	—	$	112	$	(622	)	$	140
	Reserve for Inventory Valuation		12,026		—		537		(1,522	)		11,041
	Deferred Tax Valuation Allowance		2,190		—		319		—			2,509
2012	Allowance for Doubtful Accounts	$	645	$	130	$	88	$	(213	)	$	650
	Reserve for Inventory Valuation		10,599		137		1,544		(254	)		12,026
	Deferred Tax Valuation Allowance		1,898		—		292		—			2,190
2011	Allowance for Doubtful Accounts	$	274	$	—	$	466	$	(95	)	$	645
	Reserve for Inventory Valuation		11,183		—		336		(920	)		10,599
	Deferred Tax Valuation Allowance		890		—		531		477			1,898

XML

Segments - Schedule of Activities with Major Customers (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Panasonic [Member]
Revenue, Major Customer [Line Items]
Percent of Consolidated Revenue	29.60%	38.00%	35.70%
Accounts Receivable	$ 14,090	$ 17,412
Boeing [Member]
Revenue, Major Customer [Line Items]
Percent of Consolidated Revenue	14.50%	5.50%	4.40%
Accounts Receivable	$ 6,458	$ 1,939

XML

Long-Term Debt and Note Payable - Summary of Long-Term Debt (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Total Long-term Debt	$ 200,320	$ 29,983
Capital Lease Obligations and Other Debt	3,819	12
Less Current Maturities	12,279	9,268
Long-term Debt net of current maturities	188,041	20,715
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Total Long-term Debt		7,000
Restated Credit Agreement [Member]
Debt Instrument [Line Items]
Total Long-term Debt	185,250
Series 2007 Industrial Revenue Bonds [Member]
Debt Instrument [Line Items]
Total Long-term Debt	4,720	5,060
Series 1999 Industrial Revenue Bonds [Member]
Debt Instrument [Line Items]
Total Long-term Debt	1,545	1,895
Series 1998 Industrial Revenue Bonds [Member]
Debt Instrument [Line Items]
Total Long-term Debt	2,050	2,450
Senior Notes [Member]
Debt Instrument [Line Items]
Total Long-term Debt		13,000
Notes Payable to Banks [Member]
Debt Instrument [Line Items]
Total Long-term Debt		566
Other Bank Debt [Member]
Debt Instrument [Line Items]
Total Long-term Debt	$ 2,936

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COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2013

Commitments And Contingencies Disclosure [Abstract]

Schedule of Future Minimum Lease Payment Commitments

 The following table represents future minimum lease payment commitments as of December 31, 2013:

(In thousands)
2014	$	2,183
2015		925
2016		279
2017		237
2018		136
	$	3,760

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ACCOUNTS RECEIVABLE (Tables)

12 Months Ended

Dec. 31, 2013

Receivables [Abstract]

Summary of Accounts Receivable

Accounts receivable at December 31 consists of:

(In thousands)	2013			2012
Trade Accounts Receivable	$	58,224		$	44,196
Long-term Contract Receivables:
Amounts Billed		—			907
Unbilled Recoverable Costs and Accrued Profits		2,858			1,020
Total Long-term Contract Receivables		2,858			1,927
Total Receivables		61,082			46,123
Less Allowance for Doubtful Accounts		(140	)		(650	)
	$	60,942		$	45,473

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INVENTORIES (Tables)

12 Months Ended

Dec. 31, 2013

Inventory Disclosure [Abstract]

Summary of Inventories

Inventories at December 31 are as follows:

(In thousands)	2013		2012
Finished Goods		21,627	$	10,864
Work in Progress		15,017		8,960
Raw Material		48,625		28,800
	$	85,269	$	48,624

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SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES AND PRACTICES

12 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES AND PRACTICES

NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES AND PRACTICES

Description of the Business

Astronics is a leading supplier of products to the aerospace and defense industries. Our products include advanced, high-performance lighting and safety systems, electrical power generation, distribution and motion systems, avionics and structure and other products for the global aerospace industry as well as test, training and simulation systems primarily for the military.

We have twelve primary locations, ten in the United States, one in Canada, and one in France. We design and build our products through our wholly owned subsidiaries Astronics Advanced Electronic Systems Corp. (“AES”); Astronics AeroSat Corporation (“AeroSat”); Ballard Technology, Inc. (“Ballard”); DME Corporation (“DME”); Luminescent Systems, Inc. (“LSI”); Luminescent Systems Canada, Inc. (“LSI Canada”); Max-Viz, Inc. (“Max-Viz”); Peco, Inc. (“Peco”); PGA Electronic s.a. (“PGA”); and Astronics Test Systems, Inc. (“ATS”).

On May 28, 2013 Astronics entered into a Stock Purchase Agreement to acquire all of the outstanding capital stock of Peco. Peco designs and manufacturers highly engineered commercial aerospace interior components and systems for the aerospace industry. The acquisition was completed on July 18, 2013. On October 1, 2013 Astronics acquired certain assets and liabilities from AeroSat Corporation and related entities, a supplier of aircraft antenna systems. On December 5, 2013, Astronics completed the acquisition of PGA. PGA designs and manufactures seat motion and lighting systems primarily for business and first class aircraft seats and is Europe’s leading provider of in-flight entertainment/communication systems as well as cabin management systems for private VVIP aircraft. Peco, AeroSat and PGA are all part of our Aerospace segment.

At December 31, 2013, the Company has two reportable segments, Aerospace and Test Systems. The Aerospace segment designs and manufactures products for the global aerospace industry. The Test Systems segment designs, manufactures and maintains communications and weapons test systems and training and simulation devices for military applications.

On February 28, 2014, Astronics acquired, through a wholly owned subsidiary Astronics Test Systems, Inc. (“ATS”), certain assets and liabilities of EADS North America’s Test and Services division, located in Irvine, California. ATS is a leading provider of highly engineered automatic test systems, subsystems and instruments for semi-conductor and consumer electronics products to both the commercial and defense industries. ATS will be reported as a member of our Test Systems segment.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated.

Acquisitions are accounted for under the acquisition method and, accordingly, the operating results for the acquired companies are included in the consolidated statements of operations from the respective dates of acquisition.

Revenue and Expense Recognition

In the Aerospace segment, revenue is recognized on the accrual basis at the time of shipment of goods and transfer of title. There are no significant contracts allowing for right of return.

In the Test Systems segment, revenue of approximately $4.4 million, $4.2 million and $10.0 million for the years ended December 31, 2013, 2012 and 2011, respectively, was recognized from long-term, fixed-price contracts using the percentage-of-completion method of accounting, measured by multiplying the estimated total contract value by the ratio of actual contract costs incurred to date to the estimated total contract costs. Substantially all long-term contracts are with U.S. government agencies and contractors thereto. The Company makes significant estimates involving its usage of percentage-of-completion accounting to recognize contract revenues. The Company periodically reviews contracts in process for estimates-to-completion, and revises estimated gross profit accordingly. While the Company believes its estimated gross profit on contracts in process is reasonable, unforeseen events and changes in circumstances can take place in a subsequent accounting period that may cause the Company to revise its estimated gross profit on one or more of its contracts in process. Accordingly, the ultimate gross profit realized upon completion of such contracts can vary from estimated amounts between accounting periods. Revenue not recognized using the percentage-of-completion method is recognized at the time of shipment of goods and transfer of title.

Cost of Products Sold, Engineering and Development and Selling, General and Administrative Expenses

Cost of products sold includes the costs to manufacture products such as direct materials and labor and manufacturing overhead as well as all engineering and developmental costs. The Company is engaged in a variety of engineering and design activities as well as basic research and development activities directed to the substantial improvement or new application of the Company’s existing technologies. These costs are expensed when incurred and included in cost of products sold. Research and development, design and related engineering amounted to $52.8 million in 2013, $44.9 million in 2012 and $36.1 million in 2011. Selling, general and administrative expenses include costs primarily related to our sales, marketing and administrative departments.

Shipping and Handling

Shipping and handling costs are expensed as incurred and are included in costs of products sold.

Stock Distribution

On September 27, 2013, the Company announced a one-for-five distribution of Class B Stock to holders of both Common and Class B Stock. Stockholders received one share of Class B Stock for every five shares of Common and Class B Stock held on the record date of October 10, 2013. Fractional shares were paid in cash. All share quantities, share prices and per share data reported throughout this report have been adjusted to reflect the impact of this distribution.

Equity-Based Compensation

The Company accounts for its stock options following Accounting Standards Codification (“ASC”) Topic 718 Compensation – Stock Compensation (“ASC Topic 718”). This Topic requires all equity-based payments to employees, including grants of employee stock options, to be recognized in the statement of earnings based on the grant date fair value of the award. For awards with graded vesting, the Company uses a straight-line method of attributing the value of stock-based compensation expense, subject to minimum levels of expense, based on vesting.

Under ASC Topic 718, stock compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. Vesting requirements vary for directors, officers and key employees. In general, options granted to outside directors vest six months from the date of grant and options granted to officers and key employees vest with graded vesting over a five-year period, 20% each year, from the date of grant.

The tax benefits from share based payment arrangements were approximately $1.2 million in 2013, $1.2 million in 2012, and $1.6 million in 2011. These were classified as cash flows from financing activities.

Cash and Cash Equivalents

All highly liquid instruments with a maturity of three months or less at the time of purchase are considered cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts

The Company will record a valuation allowance to account for potentially uncollectible accounts receivable. The allowance is determined based on our knowledge of the business, specific customers, review of the receivables’ aging and a specific identification of accounts where collection is at risk. Account balances are charged against the allowance after all means of collections have been exhausted and recovery is considered remote. The Company typically does not require collateral.

Inventories

Inventories are stated at the lower of cost or market, cost being determined in accordance with the first-in, first-out method. The Company records valuation reserves to provide for excess, slow moving or obsolete inventory or to reduce inventory to the lower of cost or market value. In determining the appropriate reserve, the Company considers the age of inventory on hand, the overall inventory levels in relation to forecasted demands as well as reserving for specifically identified inventory that the Company believes is no longer salable.

Property, Plant and Equipment

Depreciation of property, plant and equipment is computed using the straight-line method for financial reporting purposes and using accelerated methods for income tax purposes. Estimated useful lives of the assets are as follows: buildings, 25-40 years; machinery and equipment, 4-10 years. Leasehold improvements are amortized over the shorter of the terms of the lease or the estimated useful lives of the assets.

The cost of properties sold or otherwise disposed of and the accumulated depreciation thereon are eliminated from the accounts, and the resulting gain or loss, as well as maintenance and repair expenses, are reflected in income. Replacements and improvements are capitalized.

Depreciation expense was approximately $5.7 million, $4.4 million and $4.0 million in 2013, 2012 and 2011, respectively.

Long-Lived Assets

Long-lived assets to be held and used are initially recorded at cost. The carrying value of these assets is evaluated for recoverability whenever adverse effects or changes in circumstances indicate that the carrying amount may not be recoverable. Impairments are recognized if future undiscounted cash flows from operations are not expected to be sufficient to recover long-lived assets. The carrying amounts are then reduced to fair value, which is typically determined by using a discounted cash flow model.

Goodwill

The Company tests goodwill at the reporting unit level on an annual basis or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company has nine reporting units, however as of November 1, 2013 (the annual testing date), only six reporting units have goodwill and were subject to the goodwill impairment test.

We may elect to perform a qualitative assessment that considers economic, industry and company-specific factors for all or selected reporting units. If, after completing the assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we proceed to a quantitative test. We may also elect to perform a quantitative test instead of a qualitative test for any or all of our reporting units.

Quantitative testing requires a comparison of the fair value of each reporting unit to its carrying value. We use the discounted cash flow method to estimate the fair value of our reporting units. The discounted cash flow method incorporates various assumptions, the most significant being projected revenue growth rates, operating margins and cash flows, the terminal growth rate and the weighted average cost of capital. If the carrying value of the reporting unit exceeds its fair value, goodwill is considered impaired and any loss must be measured. To determine the amount of the impairment loss, the implied fair value of goodwill is determined by assigning a fair value to all of the reporting unit’s assets and liabilities, including any unrecognized intangible assets, as if the reporting unit had been acquired in a business combination at fair value. If the carrying amount of the reporting unit goodwill exceeds the implied fair value of that goodwill, an impairment loss would be recognized in an amount equal to that excess.

See Note 5 for further information regarding the goodwill impairment charges in 2011 relating to our Test Systems reporting unit. There were no impairment charges in 2013 or 2012.

Intangible Assets

Acquired intangibles are generally valued based upon future economic benefits such as earnings and cash flows. Acquired identifiable intangible assets are recorded at fair value and are amortized over their estimated useful lives. Acquired intangible assets with an indefinite life are not amortized, but are reviewed for impairment at least annually or more frequently whenever events or changes in circumstances indicate that the carrying amount of those assets are below its estimated fair value.

Impairment is tested under ASC 350, Intangibles - Goodwill and Other, as amended by Accounting Standards Update (“ASU”) 2012-02, by first performing a qualitative analysis in a manner similar to the testing methodology of goodwill discussed previously. The qualitative factors applied under this new provision indicated no impairment to the Company’s indefinite lived intangible assets in 2013 and 2012. See Note 4 for further information regarding the impairment charges in 2011 relating to intangible assets in our Test Systems reporting unit.

Financial Instruments

The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, notes payable, long-term debt and interest rate swaps. The Company performs periodic credit evaluations of its customers’ financial condition and generally does not require collateral. The Company does not hold or issue financial instruments for trading purposes. Due to their short-term nature, the carrying values of cash and equivalents, accounts receivable, accounts payable, and notes payable approximate fair value. The carrying value of the Company’s variable rate long-term debt instruments also approximates fair value due to the variable rate feature of these instruments. The Company’s interest rate swaps are recorded at fair value as described under Note 14 - Fair Value.

Derivatives

The accounting for changes in the fair value of derivatives depends on the intended use and resulting designation. The Company’s use of derivative instruments was limited to a cash flow hedge for interest rate risk associated with long-term debt. Interest rate swaps are used to adjust the proportion of total debt that is subject to variable and fixed interest rates. The interest rate swaps are designated as hedges of the amount of future cash flows related to interest payments on variable-rate debt that, in combination with the interest payments on the debt, convert a portion of the variable-rate debt to fixed-rate debt. The Company records all derivatives on the balance sheet at fair value. The related gains or losses, to the extent the derivatives are effective as a hedge, are deferred in shareholders’ equity as a component of Accumulated Other Comprehensive Income (Loss) (AOCI) and reclassified into earnings at the time interest expense is recognized on the associated long-term debt. Any ineffectiveness is recorded in the Consolidated Statements of Operations.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities and the reported amounts of revenues and expenses during the reporting periods in the financial statements and accompanying notes. Actual results could differ from those estimates.

Foreign Currency Translation

The Company accounts for its foreign currency translation in accordance with ASC Topic 830, Foreign Currency Translation. The aggregate transaction gain or loss included in operations was insignificant for 2013, 2012 and 2011.

Dividends

The Company has not paid any cash dividends in the three-year period ended December 31, 2013. It has no plans to pay cash dividends as it plans to retain all cash from operations as a source of capital to finance growth in the business.

Loss Contingencies

Loss contingencies may from time to time arise from situations such as claims and other legal actions. Loss contingencies are recorded as liabilities when it is probable that a liability has been incurred and the amount of the loss is reasonably estimable. Disclosure is required when there is a reasonable possibility that the ultimate loss will exceed the recorded provision. Contingent liabilities are often resolved over long time periods. In recording liabilities for probable losses, management is required to make estimates and judgments regarding the amount or range of the probable loss. Management continually assesses the adequacy of estimated loss contingencies and, if necessary, adjusts the amounts recorded as better information becomes known.

Acquisitions

The Company accounts for its acquisitions under ASC Topic 805, Business Combinations and Reorganizations (“ASC Topic 805”). ASC Topic 805 provides guidance on how the acquirer recognizes and measures the consideration transferred, identifiable assets acquired, liabilities assumed, non-controlling interests, and goodwill acquired in a business combination. ASC Topic 805 also expands required disclosures surrounding the nature and financial effects of business combinations. Acquisition costs are expensed as incurred. Acquisition expenses in 2013 were approximately $1.9 million and were insignificant in 2012 and 2011. See Note 19 regarding the acquisitions in 2013 and 2012.

Newly Adopted and Recent Accounting Pronouncements

On January 1, 2013, the Company adopted the new provisions of Accounting Standards Update (“ASU”) No. 2013-02 Comprehensive Income (Topic 220). The amendments in this ASU require the Company to provide information about the amounts reclassified out of accumulated other comprehensive income, by component. Other than requiring additional disclosures, the adoption of this amendment does not have a material impact on the Company’s financial statements.

The Company’s management has reviewed recent accounting pronouncements issued through the date of the issuance of financial statements. In management’s opinion, none of these new pronouncements apply or will have a material effect on the Company’s financial statements

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INTANGIBLE ASSETS (Tables)

12 Months Ended

Dec. 31, 2013

Summary of Acquired Intangible Assets

The following table summarizes acquired intangible assets as follows:

	December 31, 2013						December 31, 2012
(In thousands)	Weighted Average Life		Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Patents		11 Years	$	2,146	$	891	$	1,271	$	784
Trade Names		10 Years		7,453		552		2,453		162
Completed and Unpatented Technology		10 Years		15,377		2,620		6,377		1,749
Backlog and Customer Relationships		14 Years		88,998		7,210		13,085		3,968
Total Intangible Assets		13 Years	$	113,974	$	11,273	$	23,186	$	6,663

Summary of Amortization Expense for Intangible Assets for Each of Next Five Years

Based upon acquired intangible assets at December 31, 2013, amortization expense for each of the next five years is estimated to be:

(In thousands)
2014	$	10,129
2015		8,249
2016		8,073
2017		8,064
2018		7,974

Peco, Inc [Member]

Summary of Acquired Intangible Assets

The amounts allocated to the purchased intangible assets consist of the following:

(In thousands)	Weighted Average Life	Acquisition Fair Value
Trademark	10 Years	$	4,200
Technology	10 Years		3,300
Customer Relationships/Backlog	1.5-16 Years		61,500
		$	69,000

XML

Stock Option and Purchase Plans - Summary of Weighted-Average Assumptions (Detail)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividend Yield	0.00%	0.00%	0.00%
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free Interest Rate	0.88%	0.89%	1.55%
Volatility Factor	0.51%	0.52%	0.52%
Expected Life in Years	5 years	5 years	7 years
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free Interest Rate	2.22%	1.00%	2.82%
Volatility Factor	0.56%	0.64%	0.53%
Expected Life in Years	8 years	8 years	8 years

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STOCK OPTION AND PURCHASE PLANS (Tables)

12 Months Ended

Dec. 31, 2013

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Weighted Average Fair Value of Options Granted

 In general, options granted to outside directors vest six months from the date of grant and options granted to officers and key employees straight line vest over a five-year period from the date of grant.

	2013		2012		2011
Weighted Average Fair Value of the Options Granted	$	23.22	$	9.93	$	12.65

Summary of Weighted-Average Assumptions

The weighted average fair value for these options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:

	2013	2012	2011
Risk-free Interest Rate	0.88% - 2.22%	0.89% - 1.00%	1.55% - 2.82%
Dividend Yield	0.0%	0.0%	0.0%
Volatility Factor	0.51-0.56	0.52-0.64	0.52-0.53
Expected Life in Years	5.0 – 8.0	5.0 – 8.0	7.0 – 8.0

Compensation Expense Information Based on Fair Value of Stock Options

The following table provides compensation expense information based on the fair value of stock options for the years ended December 31, 2013, 2012 and 2011:

(In thousands)	2013			2012			2011
Stock Compensation Expense	$	1,384		$	1,351		$	1,061
Tax Benefit		(112	)		(136	)		(93	)
Stock Compensation Expense, Net of Tax	$	1,272		$	1,215		$	968

Summary of Company's Stock Option Activity and Related Information

A summary of the Company’s stock option activity and related information for the years ended December 31 is as follows:

(Aggregate intrinsic value in thousands)	2013								2012								2011
	Options			Weighted Average Exercise Price		Aggregate Intrinsic Value			Options			Weighted Average Exercise Price		Aggregate Intrinsic Value			Options			Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding at January 1		1,521,275		$	8.23	$	65,072			1,661,445		$	6.71	$	20,532			1,904,232		$	5.58	$	38,778
Options Granted		69,720		$	42.67	$	581			130,500		$	18.08	$	129			84,938		$	22.44	$	299
Options Exercised		(181,218	)	$	4.25	$	(8,472	)		(270,670	)	$	3.67	$	(4,168	)		(327,725	)	$	4.25	$	(7,112	)
Options Forfeited		—		$	—	$	—			—		$	—	$	—			—		$	—	$	—
Outstanding at December 31		1,409,777		$	10.44	$	57,181			1,521,275		$	8.23	$	16,493			1,661,445		$	6.71	$	31,965
Exercisable at December 31		1,149,532		$	7.81	$	49,648			1,168,459		$	6.72	$	14,431			1,280,744		$	5.47	$	26,237

Summary of Weighted Average Exercise Prices and Contractual Lives for Outstanding and Exercisable Stock Options

The following is a summary of weighted average exercise prices and contractual lives for outstanding and exercisable stock options as of December 31, 2013:

	Outstanding						Exercisable
Exercise Price Range	Shares		Weighted Average Remaining Life in Years		Weighted Average Exercise Price		Shares		Weighted Average Remaining Life in Years		Weighted Average Exercise Price
$  2.68 - $ 3.45		265,404		0.9	$	3.07		265,404		0.9	$	3.07
$  4.84 - $ 7.07		578,364		4.7		5.34		533,109		4.6		5.35
$  9.15 - $10.07		141,975		3.2		9.35		141,975		3.2		9.35
$14.01 - $24.88		372,314		7.5		18.62		209,044		6.9		19.08
$41.40 - $51.93		51,720		9.9		49.49		—		—		—
		1,409,777		4.8		10.44		1,149,532		4.0		7.81

Fair Value for Options Granted under Employee Stock Purchase Plan

The fair value for the options granted under the Employee Stock Purchase Plan was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:

	2013			2012			2011
Risk-free Interest Rate		0.10	%		0.17	%		0.10	%
Dividend Yield		0.0	%		0.0	%		0.0	%
Volatility Factor		.37			.37			.52
Expected Life in Years		1.0			1.0			1.0

XML

Intangible Assets - Summary of Amortization Expense for Intangible Assets for Each of Next Five Years (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013
Goodwill And Intangible Assets Disclosure [Abstract]
2014	$ 10,129
2015	8,249
2016	8,073
2017	8,064
2018	$ 7,974

XML

Retirement Plans and Related Post Retirement Benefits - Summarizes the Components of the Net Periodic Cost (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
SERP [Member]
Net Periodic Cost
Service Cost - Benefits Earned During Period	$ 295	$ 303	$ 46
Interest Cost	624	548	328
Amortization of Prior Service Cost	495	426	109
Amortization of (Gains) Losses	128	91	11
Net Periodic Cost	1,542	1,368	494
SERP Medical [Member]
Net Periodic Cost
Service Cost - Benefits Earned During Period	3	2	2
Interest Cost	24	24	27
Amortization of Prior Service Cost	25	26	25
Amortization of (Gains) Losses			(4)
Net Periodic Cost	$ 52	$ 52	$ 50

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Consolidated Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income Statement [Abstract]
Sales	$ 339,937	$ 266,446	$ 228,163
Cost of Products Sold	252,079	197,004	167,667
Gross Profit	87,858	69,442	60,496
Impairment Loss			2,500
Selling, General and Administrative Expenses	45,553	36,817	27,175
Income from Operations	42,305	32,625	30,821
Interest Expense, Net of Interest Income	4,094	1,042	1,806
Income Before Income Taxes	38,211	31,583	29,015
Provision for Income Taxes	10,945	9,709	7,424
Net Income	$ 27,266	$ 21,874	$ 21,591
Basic Earnings Per Share	$ 1.56	$ 1.28	$ 1.29
Diluted Earnings Per Share	$ 1.49	$ 1.20	$ 1.21

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SEGMENTS (Tables)

12 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

Summary of Segment Reporting Information

Segment information and reconciliations to consolidated amounts for the years ended December 31 are as follows:

(In thousands)	2013			2012			2011
Sales:
Aerospace	$	330,530		$	254,955		$	213,874
Test Systems		10,103			11,491			14,289
Less Inter-segment Sales		(696	)		—			—
		9,407			11,491			14,289
Total Consolidated Sales	$	339,937		$	266,446		$	228,163
Operating Profit (Loss) and Margins:
Aerospace	$	55,200		$	44,137		$	40,400
		16.7	%		17.3	%		18.9	%
Test Systems		(3,756	)		(4,985	)		(4,760	)
		(37.2	)%		(43.4	)%		(33.3	)%
Total Operating Profit		51,444			39,152			35,640
		15.1	%		14.7	%		15.6	%
Deductions from Operating Profit:
Interest Expense		(4,094	)		(1,042	)		(1,806	)
Corporate and Other Expenses, Net		(9,139	)		(6,527	)		(4,819	)
Earnings before Income Taxes	$	38,211		$	31,583		$	29,015
Depreciation and Amortization:
Aerospace	$	10,058		$	6,043		$	3,929
Test Systems		590			634			584
Corporate		411			228			430
Total Depreciation and Amortization	$	11,059		$	6,905		$	4,943
Identifiable Assets:
Aerospace	$	428,619		$	177,168		$	136,930
Test Systems		11,035			18,121			20,020
Corporate		51,617			16,700			17,955
Total Assets	$	491,271		$	211,989		$	174,905
Capital Expenditures:
Aerospace	$	6,711		$	16,324		$	14,195
Test Systems		61			396			86
Corporate		96			—			—
Total Capital Expenditures	$	6,868		$	16,720		$	14,281

Summarizes the Company's Sales by Geographic Region

The following table summarizes the Company’s sales by geographic region for the years ended December 31:

	2013		2012		2011
(In thousands)
North America	$	300,368	$	233,245	$	196,447
Europe		21,190		16,188		16,238
Asia		15,570		14,030		12,544
South America		1,851		1,937		2,678
Other		958		1,046		256
	$	339,937	$	266,446	$	228,163

Summarizes the Company's Property, Plant and Equipment by Geographic Region

The following table summarizes the Company’s property, plant and equipment by country for the years ended December 31:

	2013		2012		2011
(In thousands)
United States	$	59,803	$	53,235	$	40,871
France		10,771		—		—
Canada		326		302		251
	$	70,900	$	53,537	$	41,122

Schedule of Activities with Major Customers

The following is information relating to the activity with those customers:

	2013			2012			2011
Percent of Consolidated Revenue
Panasonic		29.6	%		38.0	%		35.7	%
Boeing		14.5	%		5.5	%		4.4	%

(In thousands)	2013		2012
Accounts Receivable at December 31,
Panasonic	$	14,090	$	17,412
Boeing		6,458		1,939

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Segments - Summary of Segment Reporting Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 28, 2013	Jun. 29, 2013	Mar. 30, 2013	Dec. 31, 2012	Sep. 29, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Segment Reporting Information [Line Items]
Sales	$ 105,456	$ 89,681	$ 70,833	$ 73,967	$ 67,420	$ 68,899	$ 64,989	$ 65,138	$ 339,937	$ 266,446	$ 228,163
Income from Operations									42,305	32,625	30,821
Depreciation and Amortization									11,059	6,905	4,943
Total Assets	491,271				211,989				491,271	211,989	174,905
Interest Expense, Net of Interest Income									(4,094)	(1,042)	(1,806)
Total Capital Expenditures									6,868	16,720	14,281
Income Before Income Taxes	8,902	10,747	7,718	10,844	7,690	7,381	7,510	9,002	38,211	31,583	29,015
Aerospace [Member]
Segment Reporting Information [Line Items]
Depreciation and Amortization									10,058	6,043	3,929
Total Assets	428,619				177,168				428,619	177,168	136,930
Total Capital Expenditures									6,711	16,324	14,195
Test Systems [Member]
Segment Reporting Information [Line Items]
Sales									9,407	11,491	14,289
Depreciation and Amortization									590	634	584
Total Assets	11,035				18,121				11,035	18,121	20,020
Total Capital Expenditures									61	396	86
Corporate [Member]
Segment Reporting Information [Line Items]
Depreciation and Amortization									411	228	430
Total Assets	51,617				16,700				51,617	16,700	17,955
Total Capital Expenditures									96
Operating Segments [Member]
Segment Reporting Information [Line Items]
Income from Operations									51,444	39,152	35,640
Percentage of Operating Profit (Loss) and Margins									15.10%	14.70%	15.60%
Operating Segments [Member] | Aerospace [Member]
Segment Reporting Information [Line Items]
Sales									330,530	254,955	213,874
Income from Operations									55,200	44,137	40,400
Percentage of Operating Profit (Loss) and Margins									16.70%	17.30%	18.90%
Operating Segments [Member] | Test Systems [Member]
Segment Reporting Information [Line Items]
Sales									10,103	11,491	14,289
Income from Operations									(3,756)	(4,985)	(4,760)
Percentage of Operating Profit (Loss) and Margins									(37.20%)	(43.40%)	(33.30%)
Intersegment Eliminations [Member] | Test Systems [Member]
Segment Reporting Information [Line Items]
Sales									(696)
Segment Reconciling Items [Member]
Segment Reporting Information [Line Items]
Interest Expense, Net of Interest Income									(4,094)	(1,042)	(1,806)
Corporate and Other Expenses, Net									$ (9,139)	$ (6,527)	$ (4,819)

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Cash Flows from Operating Activities
Net Income	$ 27,266	$ 21,874	$ 21,591
Adjustments to Reconcile Net Income to Cash Provided By Operating Activities, Excluding the Effects of Acquisitions:
Impairment Loss			2,500
Depreciation and Amortization	11,059	6,905	4,943
Provision for Non-Cash Losses on Inventory and Receivables	216	1,632	802
Stock Compensation Expense	1,384	1,351	1,061
Deferred Tax Expense (Benefit)	(722)	(1,544)	423
Other	(578)	154	(220)
Cash Flows from Changes in Operating Assets and Liabilities:
Accounts Receivable	3,493	(8,097)	(3,042)
Inventories	(5,222)	(9,330)	(883)
Prepaid Expenses	380	335	291
Accounts Payable	5,831	(537)	(349)
Accrued Expenses	3,520	3,374	638
Income Taxes Payable	2,271	669	(404)
Customer Advanced Payments and Deferred Revenue	(359)	6,490	1,943
Billings in Excess of Recoverable Costs and Accrued Profits on Uncompleted Contracts	(188)	(76)	(1,255)
Supplemental Retirement Plan and Other Liabilities	1,198	978	(131)
Cash Provided By Operating Activities	49,549	24,178	27,908
Cash Flows from Investing Activities
Acquisition of Business	(159,761)	(10,659)	(23,926)
Capital Expenditures	(6,868)	(16,720)	(14,281)
Other			75
Cash Used For Investing Activities	(166,629)	(27,379)	(38,132)
Cash Flows from Financing Activities
Proceeds From Term Note	190,000
Principal Payments on Long-term Debt	(19,498)	(10,307)	(5,302)
Proceeds from Note Payable		10,000
Payments on Note Payable	(7,000)	(3,000)
Payment of Contingent Consideration	(81)
Debt Acquisition Costs	(2,288)		(143)
Proceeds from Exercise of Stock Options	1,922	1,714	2,266
Income Tax Benefit from Exercise of Stock Options	1,198	1,252	1,614
Cash Provided By (Used For) Financing Activities	164,253	(341)	(1,565)
Effect of Exchange Rates on Cash	82	3	(1)
Increase (Decrease) in Cash and Cash Equivalents	47,255	(3,539)	(11,790)
Cash and Cash Equivalents at Beginning of Year	7,380	10,919	22,709
Cash and Cash Equivalents at End of Year	54,635	7,380	10,919
Supplemental Cash Flow Information:
Interest Paid	3,543	1,068	1,900
Income Taxes Paid, net of refunds	8,025	9,330	5,785
Value of Shares Issued as Consideration for Acquisition	$ 13,473

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Commitments and Contingencies - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Commitments And Contingencies Disclosure [Abstract]
Rental expense	$ 2.4	$ 3.2	$ 3.0
Purchase commitments outstanding	$ 91.2

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Long-Term Debt and Note Payable - Additional Information (Detail) (USD $)	12 Months Ended					12 Months Ended		12 Months Ended	0 Months Ended	12 Months Ended			0 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Jul. 18, 2013	Dec. 31, 2013 Revolving Credit Facility [Member]	Dec. 31, 2012 Revolving Credit Facility [Member]	Dec. 31, 2013 Credit Agreement [Member] Revolving Credit Facility [Member]	Jul. 18, 2013 Credit Agreement [Member] Revolving Credit Facility [Member]	Dec. 31, 2013 Credit Agreement [Member] Term Loan [Member] Revolving Credit Facility [Member]	Jul. 18, 2013 Minimum [Member]	Dec. 31, 2013 Minimum [Member] Revolving Credit Facility [Member]	Dec. 31, 2013 Minimum [Member] Credit Agreement [Member]	Dec. 31, 2013 Minimum [Member] Credit Agreement [Member] Revolving Credit Facility [Member]	Jul. 18, 2013 Maximum [Member]	Dec. 31, 2013 Maximum [Member] Revolving Credit Facility [Member]	Dec. 31, 2013 Maximum [Member] Credit Agreement [Member]	Dec. 31, 2013 Maximum [Member] Credit Agreement [Member] Revolving Credit Facility [Member]	Dec. 31, 2012 Before March 31, 2015 [Member]	Dec. 31, 2012 After March 31, 2015 [Member]
Debt Instrument [Line Items]
Revolving credit line												$ 35,000,000				$ 75,000,000
Interest rate on revolving credit at LIBOR rate										1.50%	1.50%	2.25%		2.50%	2.50%	3.50%
Credit facility allocated				20,000,000
Interest rate on revolving credit line and term loan at LIBOR rate	LIBOR plus between 1.50% and 2.50% based on the Company's Leverage Ratio		Interest rate ranging from 225 basis points to 350 basis points above LIBOR, depending on the Company's leverage ratio
Revolving credit facility							75,000,000
Term loan	200,320,000	29,983,000			7,000,000		190,000,000
Remaining borrowing capacity							65,200,000
Line of credit facility unused capacity									0.25%				0.50%
Revolving credit facility, maturity date								Jun. 30, 2018
Outstanding letter of credit						5 years
Current outstanding for letters of credit	$ 9,800,000
The covenant for minimum fixed charge coverage		1.25
Fixed charge coverage		3.70
The covenant for maximum leverage																	3.75	3.50
Leverage ratio	2.68

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Segments - Summarizes the Company's Property, Plant and Equipment by Geographic Region (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Revenues from External Customers and Long-Lived Assets [Line Items]
Property, Plant and Equipment, Net	$ 70,900	$ 53,537	$ 41,122
UNITED STATES
Revenues from External Customers and Long-Lived Assets [Line Items]
Property, Plant and Equipment, Net	59,803	53,235	40,871
FRANCE
Revenues from External Customers and Long-Lived Assets [Line Items]
Property, Plant and Equipment, Net	10,771
Canada [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Property, Plant and Equipment, Net	$ 326	$ 302	$ 251

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WARRANTY (Tables)

12 Months Ended

Dec. 31, 2013

Guarantees [Abstract]

Summary of Activity in Warranty Accrual

 Activity in the warranty accrual, which is included in other accrued expenses on the Consolidated Balance Sheets, is summarized as follows:

(In thousands)	2013			2012			2011
Balance at Beginning of the Year	$	2,551		$	1,092		$	1,699
Warranty Liabilities Acquired		671			—			—
Warranties Issued		722			2,430			1,446
Reassessed Warranty Exposure		(222	)		—			(95	)
Warranties Settled		(926	)		(971	)		(1,958	)
Balance at End of the Year	$	2,796		$	2,551		$	1,092

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Income Taxes - Significant Components of Company's Deferred Tax Assets and Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Deferred Tax Assets:
Goodwill and Intangible Assets	$ 3,367	$ 6,918
Asset Reserves	5,780	4,901
Deferred Compensation	6,564	6,656
State Investment Tax Credit Carryforwards, Net of Federal Tax	665	665
Customer Advanced Payments and Deferred Revenue	956	1,113
State Net Operating Loss Carryforwards and Other	2,639	729
Total Gross Deferred Tax Assets	19,971	20,982
Valuation Allowance for State and Foreign Deferred Tax Assets and Tax Credit Carryforwards, Net of Federal Tax	(2,509)	(2,190)
Deferred Tax Assets	17,462	18,792
Deferred Tax Liabilities:
Depreciation	7,164	4,806
Intangible Assets	27,742
Other	2,465
Deferred Tax Liabilities	37,371	4,806
Net Deferred Tax Asset (Liabilities)	$ (19,909)	$ 13,986

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DERIVATIVE FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2013

Derivative Instruments And Hedging Activities Disclosure [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS

NOTE 15 — DERIVATIVE FINANCIAL INSTRUMENTS

At December 31, 2013, we had one interest rate swap with a notional amount of approximately $1.5 million, entered into on February 6, 2006, related to the Company’s Series 1999 New York Industrial Revenue Bond, which effectively fixes the rate at 3.99% plus a spread based on the Company’s leverage ratio on this obligation through February 1, 2016.

An interest rate swap entered into on March 19, 2009 related to the Company’s term note issued January 30, 2009, was terminated in the third quarter of 2013 with no significant impact to the results of our operations.

At December 31, 2013 and 2012, the fair value of the interest rate swap was a liability of $0.1 million and $0.2 million, respectively, which is included in other liabilities (See Note 14 - Fair Value). Amounts expected to be reclassified to earnings in the next twelve months are not expected to be significant.

Activity in AOCI related to these derivatives is summarized below:

(In thousands)	2013			2012			2011
Derivative Balance at the Beginning of the Year in AOCI	$	(142	)	$	(256	)	$	(338	)
Net Deferral in AOCI of Derivatives:
Net (Increase) Decrease in Fair Value of Derivatives		2			(34	)		(171	)
Tax Effect		—			14			61
		2			(20	)		(110	)
Net Reclassification from AOCI into Earnings:
Reclassification from AOCI into Earnings – Interest Expense		109			209			298
Tax Effect		(38	)		(75	)		(106	)
		71			134			192
Net Change in Derivatives for the Year		73			114			82
Derivative Balance at the End of the Year in AOCI	$	(69	)	$	(142	)	$	(256	)

To the extent the interest rate swaps are not perfectly effective in offsetting the change in the value of the payments being hedged; the ineffective portion of these contracts is recognized in earnings immediately as interest expense. Ineffectiveness, if any, was not significant for the years ended December 31, 2013, 2012 and 2011. The Company classifies the cash flows from hedging transactions in the same category as the cash flows from the respective hedged items. Amounts from ineffectiveness, if any, to be reclassified during 2014 are not expected to be significant.

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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Provision (Benefit) for Income Taxes

The provision (benefit) for income taxes consists of the following:

(In thousands)	2013			2012			2011
Current
US Federal	$	10,904		$	11,173		$	6,840
State		682			78			114
Foreign		81			2			47
Deferred		(722	)		(1,544	)		423
	$	10,945		$	9,709		$	7,424

Effective Tax Rates Differ from Statutory Federal Income Tax Rate

The effective tax rates differ from the statutory federal income tax rate as follows:

	2013			2012			2011
Statutory Federal Income Tax Rate		35.0	%		35.0	%		35.0	%
Permanent Items
Non-deductible Stock Compensation Expense		1.0	%		1.1	%		1.0	%
Domestic Production Activity Deduction		(3.0	)%		(3.0	)%		(2.9	)%
Non-deductible Acquisition Costs		1.0	%		—	%		—	%
Other		—	%		0.1	%		(0.2	)%
Foreign Tax Benefits		(0.3	)%		(1.2	)%		(1.0	)%
State Income Tax (Benefits), Net of Federal Income Tax Effect		(0.1	)%		(0.1	)%		1.4	%
Research and Development Tax Credits		(5.0	)%		(1.1	)%		(6.1	)%
Other		—	%		(0.1	)%		(1.6	)%
Effective Tax Rate		28.6	%		30.7	%		25.6	%

Significant Components of Company's Deferred Tax Assets and Liabilities

Significant components of the Company’s deferred tax assets and liabilities as of December 31, are as follows:

	2013			2012
(In thousands)
Deferred Tax Assets:
Goodwill and Intangible Assets	$	3,367		$	6,918
Asset Reserves		5,780			4,901
Deferred Compensation		6,564			6,656
State Investment Tax Credit Carryforwards, Net of Federal Tax		665			665
Customer Advanced Payments and Deferred Revenue		956			1,113
State Net Operating Loss Carryforwards and Other		2,639			729
Total Gross Deferred Tax Assets		19,971			20,982
Valuation Allowance for State and Foreign Deferred Tax Assets and Tax Credit Carryforwards, Net of Federal Tax		(2,509	)		(2,190	)
Deferred Tax Assets		17,462			18,792
Deferred Tax Liabilities:
Depreciation		7,164			4,806
Intangible Assets		27,742			—
Other		2,465			—
Deferred Tax Liabilities		37,371			4,806
Net Deferred Tax Asset (Liabilities)	$	(19,909	)	$	13,986

Components of Net Deferred Tax Assets and Liabilities

The net deferred tax assets and liabilities presented in the Consolidated Balance Sheets are as follows at December 31:

(In thousands)	2013			2012
Deferred Tax Asset — Current	$	5,291		$	4,967
Deferred Tax Asset — Long-term		—			9,019
Deferred Tax Liabilities — Current		(970	)		—
Deferred Tax Liabilities — Long-term		(24,230	)		—
Net Deferred Tax Liability	$	(19,909	)	$	13,986

Reconciliation of Total Amounts of Unrecognized Tax Benefits Excluding Interest and Penalties

A reconciliation of the total amounts of unrecognized tax benefits, excluding interest and penalties which are insignificant, is as follows:

(in thousands)	2013		2012			2011
Balance at Beginning of the Year	$	840	$	880		$	1,470
Increases (Decreases) as a Result of Tax Positions Taken in Prior Years		145		(220	)		(1,090	)
Increases as a Result of Tax Positions Taken in the Current Year		955		180			500
Balance at End of the Year	$	1,940	$	840		$	880

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Segments - Summarizes the Company's Sales by Geographic Region (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 28, 2013	Jun. 29, 2013	Mar. 30, 2013	Dec. 31, 2012	Sep. 29, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Revenues from External Customers and Long-Lived Assets [Line Items]
Sales	$ 105,456	$ 89,681	$ 70,833	$ 73,967	$ 67,420	$ 68,899	$ 64,989	$ 65,138	$ 339,937	$ 266,446	$ 228,163
North America [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Sales									300,368	233,245	196,447
Europe [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Sales									21,190	16,188	16,238
Asia [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Sales									15,570	14,030	12,544
South America [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Sales									1,851	1,937	2,678
Other Continent [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Sales									$ 958	$ 1,046	$ 256

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COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2013

Commitments And Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 17 — COMMITMENTS AND CONTINGENCIES

The Company leases certain facilities and equipment under various lease contracts with terms that meet the accounting definition of operating leases. These arrangements may include fair value renewal or purchase options. Rental expense for the years ended December 31, 2013, 2012 and 2011 was $2.4 million, $3.2 million and $3.0 million, respectively. The following table represents future minimum lease payment commitments as of December 31, 2013:

(In thousands)
2014	$	2,183
2015		925
2016		279
2017		237
2018		136
	$	3,760

From time to time the Company may enter into purchase agreements with suppliers under which there is a commitment to buy a minimum amount of product. Purchase commitments outstanding at December 31, 2013 were $91.2 million. These commitments are not reflected as liabilities in the Company’s Consolidated Balance Sheets.

Legal Proceedings

The Company is subject to various legal proceedings, claims, and litigation arising in the ordinary course of business. While the outcome of these matters is currently not determinable, we do not expect these matters will have a material adverse effect on our business, financial position, results of operations, or cash flows. However, the results of these matters cannot be predicted with certainty. Should the Company fail to prevail in any legal matter or should several legal matters be resolved against the Company in the same reporting period, then the financial results of that particular reporting period could be materially adversely affected.

We are a defendant in an action filed in the Regional State Court of Mannheim, Germany (Lufthansa Technik AG v. Astronics Advanced Electronics Systems Corp.) relating to an allegation of patent infringement. The damages sought include injunctive relief, as well as monetary damages. We dispute the allegation and are vigorously defending ourselves in this action. We have filed a nullity action with the Federal Patent Court in Munich, Germany, requesting the court to revoke the German part of the European patent that is subject to the claim. In November 2011, the Regional State Court of Manheim Germany, issued an interim decision to the effect that the infringement litigation proceedings be stayed until the Federal Patent Court decides on the concurrent nullity action. In February 2014, The Federal Patent Court issued a written judgment upholding the validity of a portion of the patent. This judgment is subject to appeal. However, as a result the judgment proclaimed by The Federal Patent Court the stay of the infringement litigation proceedings is no longer effective. At this time we are unable to provide a reasonable estimate of our potential liability or the potential amount of loss related to this action, if any. If the outcome of this litigation is adverse to us, our results and financial condition could be materially affected.

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Profit Sharing/401(k) Plan - Additional Information (Detail) (Astronics Plan [Member], USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Astronics Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Income before income taxes for the plan Total	$ 3.7	$ 3.0	$ 2.6

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Consolidated Statements of Shareholders' Equity (USD $) In Thousands, except Share data	Total	Convertible Class B Stock [Member]	Common Stock [Member]	Treasury Stock [Member]	Additional Paid in Capital [Member]	Accumulated Comprehensive Loss [Member]	Retained Earnings [Member]
Beginning balance at Dec. 31, 2010		$ 84	$ 89	$ (2,281)	$ 14,278	$ (2)	$ 65,047
Beginning balance, shares at Dec. 31, 2010		8,374,000	8,973,000	528,000
Foreign Currency Translation Adjustments	(90)					(90)
Net Income	21,591						21,591
Exercise of Stock Options and Stock Compensation Expense - Net of Taxes		1	3		4,953
Mark to Market Adjustments for Derivatives - Net of Taxes	82					82
Retirement Liability Adjustment - Net of Taxes						(876)
Class B Stock Converted to Common Stock		(5)	5
Cash Paid in Lieu of Fractional Shares from Stock Distribution							(16)
Exercise of Stock Options, shares	327,725	73,000	232,000
Class B Stock Converted to Common Stock, shares		(476,000)	476,000
Ending balance at Dec. 31, 2011	102,863	80	97	(2,281)	19,231	(886)	86,622
Ending balance, shares at Dec. 31, 2011		7,971,000	9,681,000	528,000
Foreign Currency Translation Adjustments	183					183
Net Income	21,874						21,874
Exercise of Stock Options and Stock Compensation Expense - Net of Taxes			2		4,316
Mark to Market Adjustments for Derivatives - Net of Taxes	114					114
Retirement Liability Adjustment - Net of Taxes						(4,194)
Retirement of Treasury Shares		(3)	(2)	2,281	(693)		(1,583)
Class B Stock Converted to Common Stock		(12)	12
Cash Paid in Lieu of Fractional Shares from Stock Distribution							(24)
Exercise of Stock Options, shares	270,670	35,000	194,000
Retirement of Treasury Stock, shares		(349,000)	(179,000)	(528,000)
Class B Stock Converted to Common Stock, shares		(1,169,000)	1,169,000
Ending balance at Dec. 31, 2012	125,134	65	109		22,854	(4,783)	106,889
Ending balance, shares at Dec. 31, 2012		6,488,000	10,865,000
Issuance of Common Shares as Consideration for Acquisition			3		13,470
Foreign Currency Translation Adjustments	(131)					(131)
Net Income	27,266						27,266
Exercise of Stock Options and Stock Compensation Expense - Net of Taxes		1	1		4,502
Mark to Market Adjustments for Derivatives - Net of Taxes	73					73
Retirement Liability Adjustment - Net of Taxes						1,230
Class B Stock Converted to Common Stock		(20)	20
Cash Paid in Lieu of Fractional Shares from Stock Distribution							(40)
Issuance of Common Shares as Consideration for Acquisition, shares			264,000
Exercise of Stock Options, shares	181,218	96,000	145,000
Class B Stock Converted to Common Stock, shares		(1,994,000)	1,994,000
Ending balance at Dec. 31, 2013	$ 171,509	$ 46	$ 133		$ 40,826	$ (3,611)	$ 134,115
Ending balance, shares at Dec. 31, 2013		4,590,000	13,268,000

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Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Statement Of Income And Comprehensive Income [Abstract]
Net Income	$ 27,266	$ 21,874	$ 21,591
Other Comprehensive Income:
Foreign Currency Translation Adjustments	(131)	183	(90)
Mark to Market Adjustments for Derivatives - Net of Tax	73	114	82
Retirement Liability Adjustment - Net of Tax	1,230	(4,194)	(876)
Other Comprehensive Income (Loss)	1,172	(3,897)	(884)
Comprehensive Income	$ 28,438	$ 17,977	$ 20,707

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RETIREMENT PLANS AND RELATED POST RETIREMENT BENEFITS

12 Months Ended

Dec. 31, 2013

Compensation And Retirement Disclosure [Abstract]

RETIREMENT PLANS AND RELATED POST RETIREMENT BENEFITS

NOTE 10—RETIREMENT PLANS AND RELATED POST RETIREMENT BENEFITS

The Company has two non-qualified supplemental retirement defined benefit plans (“SERP” and “SERP II”) for certain current and retired executive officers. On March 6, 2012 the Company adopted SERP II for eligible current executive officers. The Company recorded a liability at the date of adoption of the new plan in the amount of approximately $5.8 million for the projected benefit obligation.

The accumulated benefit obligation of the plans as of December 31, 2013 and 2012 amounts to $10.1 million and $9.5 million, respectively.

The Plans provide for benefits based upon average annual compensation and years of service and in the case of SERP, there are offsets for Social Security and Profit Sharing benefits. It is the Company’s intent to fund the plans as plan benefits become payable, since no assets exist at December 31, 2013 or 2012 for either of the plans.

The Company accounts for the funded status (i.e., the difference between the fair value of plan assets and the projected benefit obligations) of its pension plans in accordance with the recognition and disclosure provisions of ASC Topic 715, Compensation, Retirement Benefits (“ASC Topic 715”), which requires the Company to recognize the funded status in its balance sheet, with a corresponding adjustment to AOCI, net of tax. These amounts will be subsequently recognized as net periodic pension cost pursuant to the Company’s historical policy for amortizing such amounts. Further, actuarial gains and losses that arise in subsequent periods and are not recognized as net periodic pension cost in the same periods will be recognized as a component of AOCI. Those amounts will be subsequently recognized as a component of net periodic pension cost on the same basis as the amounts recognized in AOCI.

Unrecognized prior service costs of $3.5 million ($5.3 million net of $1.8 million in taxes) and unrecognized actuarial losses of $1.2 million ($1.9 million net of $0.7 million in taxes) are included in AOCI at December 31, 2013 and have not yet been recognized in net periodic pension cost. The prior service cost included in AOCI and amounts expected to be recognized in net periodic pension cost during the fiscal year-ended December 31, 2014 is $0.3 million ($0.5 million net of $0.2 million in taxes). The actuarial loss included in AOCI expected to be recognized in net periodic pension cost during the fiscal year-ended December 31, 2014 is $0.1 million, net of taxes.

The reconciliation of the beginning and ending balances of the projected benefit obligation of the plans for the years ended December 31 is as follows:

(In thousands)	2013			2012
Funded Status
Projected Benefit Obligation
Beginning of the Year — January 1	$	15,042		$	7,588
Adoption of SERP II		—			5,790
Service Cost		295			303
Interest Cost		624			548
Actuarial (Gain) Loss		(1,299	)		1,161
Benefits Paid		(348	)		(348	)
End of the Year — December 31	$	14,314		$	15,042

The decrease in the 2013 projected benefit obligation is due primarily to an increase in the discount rate. The increase in the 2012 projected benefit obligation is due primarily to the adoption of SERP II, the decrease in the discount rate and differences between estimated and actual salaries.

The assumptions used to calculate the projected benefit obligation as of December 31 are as follows:

	2013			2012
Discount Rate		5.10	%		4.20	%
Future Average Compensation Increases		5.00	%		5.00	%

The plans are unfunded at December 31, 2013 and are recognized in the accompanying Consolidated Balance Sheets as a current accrued pension liability of $0.3 million and a long-term accrued pension liability of $14.0 million. This also is the expected future contribution to the plan, since the plan is unfunded.

The following table summarizes the components of the net periodic cost for the years ended December 31:

(In thousands)	2013		2012		2011
Net Periodic Cost
Service Cost — Benefits Earned During Period	$	295	$	303	$	46
Interest Cost		624		548		328
Amortization of Prior Service Cost		495		426		109
Amortization of Losses		128		91		11
Net Periodic Cost	$	1,542	$	1,368	$	494

The assumptions used to determine the net periodic cost are as follows:

	2013			2012			2011
Discount Rate		4.20	%		4.50	%		5.50	%
Future Average Compensation Increases		5.00	%		5.00	%		5.00	%

The Company expects the benefits to be paid in each of the next five years to be $0.3 million and $1.7 million in the aggregate for the next five years after that. This also is the expected Company contribution to the plans.

Participants in SERP are entitled to paid medical, dental and long-term care insurance benefits upon retirement under the plan. The measurement date for determining the plan obligation and cost is December 31.

The reconciliation of the beginning and ending balances of the accumulated postretirement benefit obligation for the years ended December 31, is as follows:

(In thousands)	2013			2012
Funded Status
Accumulated Postretirement Benefit Obligation
Beginning of the Year — January 1	$	593		$	568
Service Cost		3			2
Interest Cost		24			24
Actuarial Loss		55			42
Benefits Paid		(45	)		(43	)
End of the Year — December 31	$	630		$	593

The assumptions used to calculate the accumulated postretirement benefit obligation as of December 31 are as follows:

	2013			2012
Discount Rate		5.10	%		4.20	%

The following table summarizes the components of the net periodic cost for the years ended December 31:

(In thousands)	2013		2012		2011
Net Periodic Cost
Service Cost — Benefits Earned During Period	$	3	$	2	$	2
Interest Cost		24		24		27
Amortization of Prior Service Cost		25		26		25
Amortization of (Gains) Losses		—		—		(4	)
Net Periodic Cost	$	52	$	52	$	50

The assumptions used to determine the net periodic cost are as follows:

	2013			2012			2011
Discount Rate		4.20	%		4.50	%		5.50	%
Future Average Healthcare Benefit Increases		5.76	%		6.00	%		9.00	%

The Company estimates that the prior service costs and net losses in AOCI for medical, dental and long-term care insurance benefits as of December 31, 2013, that will be recognized as components of net periodic benefit cost during the year ended December 31, 2014 for the Plan will be insignificant. For measurement purposes, a 7.8% and 6.4% increase in the cost of health care benefits was assumed for 2014 and 2015 respectively and a range between 6.2% and 5.1% from 2016 through 2050. A one percentage point increase or decrease in this rate would change the post retirement benefit obligation insignificantly. The Company expects the benefits to be paid in each of the next five years to be insignificant per year and approximately $0.3 million in the aggregate for the next five years after that. This also is the expected Company contribution to the plan, as it is unfunded.

As of July 18, 2013 upon completion of the acquisition of Peco, the Company is now a participating employer in a trustee-managed multiemployer defined benefit pension plan for employees who participate in collective bargaining agreements. The plan generally provides retirement benefits to employees based on years of service to the Company. The multiemployer pension plan is managed by a board of trustees. Contributions are based on the hours worked and are expensed on a current basis.

The risks of participating in a multiemployer defined benefit pension plan are different from a single-employer plan because: (a) assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers, (b) if a participating employer stops contributing to the plan, the unfunded obligations of the plan may be required to be borne by the remaining participating employers, and (c) if the Company chooses to stop participating in a multiemployer plan, it may be required to pay a withdrawal liability to the plan. In connection with ongoing renegotiation of collective bargaining agreements, the Company may discuss and negotiate for the complete or partial withdrawal from its multiemployer pension plan. Depending on the number of employees withdrawn in any future period and the financial condition of the multiemployer plan at the time of withdrawal, the associated withdrawal liabilities could be material to the Company in the period of the withdrawal. The Company has no plans to withdraw from its multiemployer pension plan.

Western Conference of Teamsters Pension Plan (“WCTPP”) provides fixed retirement payments as a function of the total employer contributions payable for all service after 1986. However in the event WCTPP is underfunded, the monthly benefit amount can be reduced by the trustees of the plan. Plan information for the WCTPP, Employer Identification Number 91-6145047, is not publicly available for 2013. According to the most recently available Form 5500 for the plan year ended December 31, 2012, plan net assets are $32.3 billion, the total actuarial present value of accumulated plan benefits is $37.9 billion, and contributions receivable from all employers totaled $99.2 million. WCTPP is over 90.1% funded as of December 31, 2012.

The collective bargaining agreement of WCTPP requires contributions on the basis of hours worked. The agreement also has a minimum contribution requirement of $2.50 per compensable hour to a maximum of 184 hours per calendar year month and cumulatively to a maximum of 2,080 hours per calendar year, for subsequent periods.

Pension Fund	EIN/Pension Plan Number	Zone Status	Rehabilitation Plan Status	2013 Company Contributions (In thousands)			Surcharge Imposed	Expiration Date of Collective Bargaining Agreement	Plan Year End
WCTPP	91-6145047	Green	None	$	830	*	None	10/31/16	12/31

* - Total contributions for fiscal year 2013, post-acquisition contributions totaled 0.3 million.

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Acquisitions - Amounts Allocated to Purchased Intangible Assets (Detail) (Peco, Inc [Member], USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013
Acquired Finite-Lived Intangible Assets [Line Items]
Acquisition Fair Value	$ 69,000
Trademark [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Weighted Average Life	10 years
Acquisition Fair Value	4,200
Technology [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Weighted Average Life	10 years
Acquisition Fair Value	3,300
Backlog and Customer Relationships [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Acquisition Fair Value	$ 61,500
Backlog and Customer Relationships [Member] | Minimum [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Weighted Average Life	1 year 6 months
Backlog and Customer Relationships [Member] | Maximum [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Weighted Average Life	16 years

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Selected Quarterly Financial Information - Summarizes Selected Quarterly Financial Information (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 28, 2013	Jun. 29, 2013	Mar. 30, 2013	Dec. 31, 2012	Sep. 29, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Quarterly Financial Information Disclosure [Abstract]
Sales	$ 105,456	$ 89,681	$ 70,833	$ 73,967	$ 67,420	$ 68,899	$ 64,989	$ 65,138	$ 339,937	$ 266,446	$ 228,163
Gross Profit (sales less cost of products sold)	25,173	23,785	18,681	20,219	17,551	16,717	17,054	18,120	87,858	69,442	60,496
Income Before Tax	8,902	10,747	7,718	10,844	7,690	7,381	7,510	9,002	38,211	31,583	29,015
Net Income	$ 6,389	$ 7,155	$ 5,158	$ 8,564	$ 5,655	$ 4,930	$ 5,194	$ 6,095	$ 27,266	$ 21,874	$ 21,591
Basic Earnings Per Share	$ 0.36	$ 0.41	$ 0.30	$ 0.49	$ 0.33	$ 0.29	$ 0.30	$ 0.36	$ 1.56	$ 1.28	$ 1.29
Diluted Earnings Per Share	$ 0.34	$ 0.39	$ 0.28	$ 0.47	$ 0.31	$ 0.27	$ 0.29	$ 0.34	$ 1.49	$ 1.20	$ 1.21

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Derivative Financial Instruments - Additional Information (Detail) (USD $)		12 Months Ended
	Dec. 31, 2013	Dec. 31, 2013 Industrial Revenue Bond [Member]	Dec. 31, 2013 Term Note [Member]	Dec. 31, 2012 Term Note [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Notional amount of interest rate swap		$ 1,500,000
Interest of interest rate swap		3.99%
Derivative, variable rate basis		3.99% plus a spread based on the Company's leverage ratio
Derivative, date inception		Feb. 06, 2006
Derivative, date maturity		Feb. 01, 2016
Derivative, date inception	Mar. 19, 2009
Fair value of interest rate derivative liabilities			$ 100,000	$ 200,000

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Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2013	Jan. 31, 2014	Jun. 30, 2013
Document Information [Line Items]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	FY
Entity Registrant Name	ASTRONICS CORP
Entity Central Index Key	0000008063
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		17,876,973
Entity Public Float			$ 390,085,268
Common Stock [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		13,589,794
Convertible Class B Stock [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		4,287,179

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SHAREHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2013

Equity [Abstract]

SHAREHOLDERS' EQUITY

NOTE 11 — SHAREHOLDERS’ EQUITY

Reserved Common Stock

At December 31, 2013, approximately 7.9 million shares of common stock were reserved for issuance upon conversion of the Class B stock, exercise of stock options and purchases under the Employee Stock Purchase Plan. Class B Stock is identical to Common Stock, except Class B Stock has ten votes per share, is automatically converted to Common Stock on a one for one basis when sold or transferred, and cannot receive dividends unless an equal or greater amount of dividends is declared on Common Stock.

Comprehensive Income and Accumulated Other Comprehensive Income (Loss)

Comprehensive income consists of net income and the after-tax impact of currency translation adjustments, mark to market adjustments for derivatives and retirement liability adjustments. Income taxes related to derivatives and retirement liability adjustments within other comprehensive income are generally recorded based on an effective tax rate of approximately 35%. No income tax effect is recorded for currency translation adjustments.

The components of accumulated other comprehensive income (loss) are as follows:

(In thousands)	2013			2012
Foreign Currency Translation Adjustments	$	1,284		$	1,415
Mark to Market Adjustments for Derivatives – Before Tax		(107	)		(218	)
Tax Benefit		38			76
Mark to Market Adjustments for Derivatives – After Tax		(69	)		(142	)
Retirement Liability Adjustment – Before Tax		(7,423	)		(9,316	)
Tax Benefit		2,597			3,260
Retirement Liability Adjustment – After Tax		(4,826	)		(6,056	)
Accumulated Other Comprehensive Loss	$	(3,611	)	$	(4,783	)

The components of other comprehensive income (loss) are as follows:

(In thousands)	2013			2012			2011
Foreign Currency Translation Adjustments	$	(131	)	$	183		$	(90	)
Reclassification to Interest Expense		109			209			298
Mark to Market Adjustments for Derivatives		2			(34	)		(171	)
Tax Benefit (Expense)		(38	)		(61	)		(45	)
Mark to Market Adjustments for Derivatives		73			114			82
Retirement Liability Adjustment		1,893			(6,451	)		(1,348	)
Tax Benefit (Expense)		(663	)		2,257			472
Retirement Liability Adjustment		1,230			(4,194	)		(876	)
Other Comprehensive (Loss) Income	$	1,172		$	(3,897	)	$	(884	)

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Earnings Per Share - Additional Information (Detail) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Earnings Per Share [Abstract]
Number of common shares covered by out-of-the-money stock options	0.2	0.1

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Fair Value - Calculation of Additional Purchase Consideration (Earn Out) (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013
Aero Sat Revenue Formula One [Member] | Fiscal Year Twenty Fourteen [Member]
Earnout Payments Payable [Line Items]
AeroSat Revenue	$ 30
AeroSat Revenue
Aero Sat Revenue Formula One [Member] | Fiscal Year Twenty Fifteen [Member]
Earnout Payments Payable [Line Items]
AeroSat Revenue	40
AeroSat Revenue
Aero Sat Revenue Formula Two [Member] | Fiscal Year Twenty Fourteen [Member]
Earnout Payments Payable [Line Items]
Earn out multiplier, percentage	15.00%
Earn out formula adjustment, amount	30
Earn out formula denominator, amount	20
AeroSat Revenue	30
AeroSat Revenue	50
Aero Sat Revenue Formula Two [Member] | Fiscal Year Twenty Fifteen [Member]
Earnout Payments Payable [Line Items]
Earn out multiplier, percentage	15.00%
Earn out formula adjustment, amount	40
Earn out formula denominator, amount	20
AeroSat Revenue	40
AeroSat Revenue	60
Aero Sat Revenue Formula Three [Member] | Fiscal Year Twenty Fourteen [Member]
Earnout Payments Payable [Line Items]
Earn out multiplier, percentage	15.00%
AeroSat Revenue
AeroSat Revenue	50
Aero Sat Revenue Formula Three [Member] | Fiscal Year Twenty Fifteen [Member]
Earnout Payments Payable [Line Items]
Earn out multiplier, percentage	15.00%
AeroSat Revenue	60
AeroSat Revenue

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Current Assets:
Cash and Cash Equivalents	$ 54,635	$ 7,380
Accounts Receivable, Net of Allowance for Doubtful Accounts	60,942	45,473
Inventories	85,269	48,624
Prepaid Expenses and Other Current Assets	5,061	1,566
Deferred Income Taxes	5,291	4,967
Total Current Assets	211,198	108,010
Property, Plant and Equipment, at Cost:
Land	6,742	5,424
Buildings and Improvements	45,551	37,045
Machinery and Equipment	54,369	43,342
Construction in Progress	1,527	1,456
Total Property, Plant and Equipment, at Cost	108,189	87,267
Less Accumulated Depreciation	37,289	33,730
Net Property, Plant and Equipment	70,900	53,537
Deferred Income Taxes		9,019
Other Assets	5,474	2,977
Intangible Assets, Net of Accumulated Amortization	102,701	16,523
Goodwill	100,998	21,923
Total Assets	491,271	211,989
Current Liabilities:
Current Maturities of Long-term Debt	12,279	9,268
Accounts Payable	25,255	10,592
Accrued Payroll and Employee Benefits	16,214	10,228
Accrued Income Taxes	1,318
Other Accrued Expenses	8,454	5,406
Customer Advanced Payments and Deferred Revenue	20,747	12,286
Billings in Excess of Recoverable Costs and Accrued Profits on Uncompleted Contracts		188
Deferred Income Taxes	970
Total Current Liabilities	85,237	47,968
Long-term Debt	188,041	20,715
Supplemental Retirement Plan and Other Liabilities for Pension Benefits	14,550	15,243
Other Liabilities	7,704	2,929
Deferred Income Taxes	24,230
Total Liabilities	319,762	86,855
Shareholders' Equity
Additional Paid-in Capital	40,826	22,854
Accumulated Other Comprehensive Loss	(3,611)	(4,783)
Retained Earnings	134,115	106,889
Total Shareholders' Equity	171,509	125,134
Total Liabilities and Shareholders' Equity	491,271	211,989
Convertible Class B Stock [Member]
Shareholders' Equity
Common Stock, value	46	65
Total Shareholders' Equity	46	65
Common Stock [Member]
Shareholders' Equity
Common Stock, value	133	109
Total Shareholders' Equity	$ 133	$ 109

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GOODWILL

12 Months Ended

Dec. 31, 2013

Goodwill And Intangible Assets Disclosure [Abstract]

GOODWILL

NOTE 5 — GOODWILL

The following table summarizes the changes in the carrying amount of goodwill for 2013 and 2012:

(In thousands)	2013			2012
Balance at Beginning of the Year	$	21,923		$	17,185
Acquisition		79,155			4,665
Foreign Currency Translations		(80	)		73
Balance at End of the Year	$	100,998		$	21,923
Goodwill	$	117,540		$	38,465
Accumulated Impairment Losses		(16,542	)		(16,542	)
Goodwill - Net	$	100,998		$	21,923

As discussed in Note 1, goodwill is not amortized but is periodically tested for impairment. For the six reporting units with goodwill at November 1, 2013, the Company performed a quantitative assessment of the goodwill’s carrying value. The assessment indicated no impairment to the carrying value of goodwill in any of the Company’s reporting units and no impairment charge recognized.

During fiscal 2011, the weak economic conditions resulted in a decline in business and a reduction in forecasted cash flows in the Test Systems reporting unit. Based on this evaluation, we determined that the fair value of the Test Systems reporting unit was less than its carrying value. None of the reporting units in the Aerospace Segment indicated impairment. Following this assessment, ASC Topic 350 required us to perform a second step in order to determine the implied fair value of goodwill in the Test Systems reporting unit and to compare it to its carrying value. The activities in the second step included hypothetically valuing all of the tangible and intangible assets of the impaired reporting unit using market participant assumptions, as if the reporting unit had been acquired in a business combination as of the date of the valuation.

As a result of this assessment in 2011, the Company recorded an impairment charge of approximately $2.4 million in the December 31, 2011 Consolidated Statement of Operations. The impairment loss is reported on the Impairment Loss line of the Consolidated Statements of Operations. None of this loss related to goodwill is immediately deductible for tax purposes. At December 31, 2013 and 2012, the Test Systems segment has no recorded goodwill, as a result of previous impairment charges. There was no impairment to the carrying value of goodwill in 2013 or 2012.

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INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2013

Goodwill And Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

NOTE 4 — INTANGIBLE ASSETS

The following table summarizes acquired intangible assets as follows:

	December 31, 2013						December 31, 2012
(In thousands)	Weighted Average Life		Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Patents		11 Years	$	2,146	$	891	$	1,271	$	784
Trade Names		10 Years		7,453		552		2,453		162
Completed and Unpatented Technology		10 Years		15,377		2,620		6,377		1,749
Backlog and Customer Relationships		14 Years		88,998		7,210		13,085		3,968
Total Intangible Assets		13 Years	$	113,974	$	11,273	$	23,186	$	6,663

Amortization is computed on the straight-line method for financial reporting purposes. Amortization expense for intangibles was $4.9 million, $2.3 million and $0.5 million for 2013, 2012 and 2011, respectively. The Company has a $0.5 million identifiable asset with an indefinite life included above in Trade Names at December 31, 2013.

Based upon acquired intangible assets at December 31, 2013, amortization expense for each of the next five years is estimated to be:

(In thousands)
2014	$	10,129
2015		8,249
2016		8,073
2017		8,064
2018		7,974

For the Company’s indefinite-lived intangible asset, the impairment test consists of comparing the fair value, determined using the relief from royalty method, with its carrying amount. An impairment loss would be recognized for the carrying amount in excess of its fair value. For the years ended December 31, 2013 and 2012, the Company recorded no impairment charge to any of its indefinite-lived intangible assets. For the year ended December 31, 2011, the Company recorded a $0.1 million impairment charge related to Trade Names assigned to the Company’s Test Systems reporting unit, as of the annual impairment test date of November 1, 2011. Impairment losses are reported on the Impairment Loss line of the Consolidated Statements of Operations.

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SELECTED QUARTERLY FINANCIAL INFORMATION

12 Months Ended

Dec. 31, 2013

Quarterly Financial Information Disclosure [Abstract]

SELECTED QUARTERLY FINANCIAL INFORMATION

NOTE 16 — SELECTED QUARTERLY FINANCIAL INFORMATION

The following table summarizes selected quarterly financial information for 2013 and 2012:

	Quarter Ended
(Unaudited)	Dec. 31,		Sept. 28,		June 29,		March 30,		Dec. 31,		Sept. 29,		June 30,		March 31,
(In thousands, except for per share data)	2013		2013		2013		2013		2012		2012		2012		2012
Sales	$	105,456	$	89,681	$	70,833	$	73,967	$	67,420	$	68,899	$	64,989	$	65,138
Gross Profit (sales less cost of products sold)		25,173		23,785		18,681		20,219		17,551		16,717		17,054		18,120
Income Before Tax		8,902		10,747		7,718		10,844		7,690		7,381		7,510		9,002
Net Income		6,389		7,155		5,158		8,564		5,655		4,930		5,194		6,095
Basic Earnings Per Share		0.36		0.41		0.30		0.49		0.33		0.29		0.30		0.36
Diluted Earnings Per Share		0.34		0.39		0.28		0.47		0.31		0.27		0.29		0.34

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EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2013

Earnings Per Share [Abstract]

EARNINGS PER SHARE

NOTE 12 — EARNINGS PER SHARE

Earnings per share computations are based upon the following table:

	2013		2012		2011
(In thousands, except per share data)
Net Income	$	27,266	$	21,874	$	21,591
Basic Earnings Weighted Average Shares		17,484		17,143		16,750
Net Effect of Dilutive Stock Options		875		1,014		1,067
Diluted Earnings Weighted Average Shares		18,359		18,157		17,817
Basic Earnings Per Share	$	1.56	$	1.28	$	1.29
Diluted Earnings Per Share	$	1.49	$	1.20	$	1.21

Stock options with exercise prices greater than the average market price of the underlying common shares are excluded from the computation of diluted earnings per share because they are out-of-the-money and the effect of their inclusion would be anti-dilutive. The number of common shares covered by out-of-the-money stock options were insignificant at December 31, 2013 and 0.2 million and 0.1 million for the years ended December 31, 2012 and 2011, respectively.

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Stock Option and Purchase Plans - Compensation Expense Information Based on Fair Value of Stock Options (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Stock Compensation Expense	$ 1,384	$ 1,351	$ 1,061
Tax Benefit	(112)	(136)	(93)
Stock Compensation Expense, Net of Tax	$ 1,272	$ 1,215	$ 968

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INCOME TAXES

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 8 — INCOME TAXES

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities. Deferred tax assets are reduced, if deemed necessary, by a valuation allowance for the amount of tax benefits which are not expected to be realized. Investment tax credits are recognized on the flow through method.

The FASB issued ASC Topic 740-10 Overall - Uncertainty in Income Taxes (“ASC Topic 740-10”) which clarifies the accounting and disclosure for uncertainty in tax positions, as defined. ASC Topic 740-10 seeks to reduce the diversity in practice associated with certain aspects of the recognition and measurement related to accounting for income taxes. The Company is subject to the provisions of ASC Topic 740-10 and has analyzed filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions.

Should the Company need to accrue a liability for uncertain tax benefits, any interest associated with that liability will be recorded as interest expense. Penalties, if any, would be recognized as operating expenses. There are no penalties or interest liabilities accrued as of December 31, 2013 or 2012, nor are any penalties or interest costs included in expense for each of the years ended December 31, 2013, 2012 and 2011. The years under which we conducted our evaluation coincided with the tax years currently still subject to examination by major federal and state tax jurisdictions, those being 2011 through 2013 for federal purposes and 2010 through 2013 for state purposes.

Pretax income from the Company’s foreign subsidiaries amounted to $0.2 million, $1.0 million and $0.9 million for 2013, 2012 and 2011, respectively. The balances of pretax earnings for each of those years were domestic.

The provision (benefit) for income taxes consists of the following:

(In thousands)	2013			2012			2011
Current
US Federal	$	10,904		$	11,173		$	6,840
State		682			78			114
Foreign		81			2			47
Deferred		(722	)		(1,544	)		423
	$	10,945		$	9,709		$	7,424

The effective tax rates differ from the statutory federal income tax rate as follows:

	2013			2012			2011
Statutory Federal Income Tax Rate		35.0	%		35.0	%		35.0	%
Permanent Items
Non-deductible Stock Compensation Expense		1.0	%		1.1	%		1.0	%
Domestic Production Activity Deduction		(3.0	)%		(3.0	)%		(2.9	)%
Non-deductible Acquisition Costs		1.0	%		—	%		—	%
Other		—	%		0.1	%		(0.2	)%
Foreign Tax Benefits		(0.3	)%		(1.2	)%		(1.0	)%
State Income Tax (Benefits), Net of Federal Income Tax Effect		(0.1	)%		(0.1	)%		1.4	%
Research and Development Tax Credits		(5.0	)%		(1.1	)%		(6.1	)%
Other		—	%		(0.1	)%		(1.6	)%
Effective Tax Rate		28.6	%		30.7	%		25.6	%

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

No provision has been made for U.S. federal or foreign taxes on that portion of certain foreign subsidiaries’ undistributed earnings ($3.8 million at December 31, 2013) considered to be permanently reinvested. It is not practicable to determine the amount of tax that would be payable if these amounts were repatriated to the U.S.

Significant components of the Company’s deferred tax assets and liabilities as of December 31, are as follows:

	2013			2012
(In thousands)
Deferred Tax Assets:
Goodwill and Intangible Assets	$	3,367		$	6,918
Asset Reserves		5,780			4,901
Deferred Compensation		6,564			6,656
State Investment Tax Credit Carryforwards, Net of Federal Tax		665			665
Customer Advanced Payments and Deferred Revenue		956			1,113
State Net Operating Loss Carryforwards and Other		2,639			729
Total Gross Deferred Tax Assets		19,971			20,982
Valuation Allowance for State and Foreign Deferred Tax Assets and Tax Credit Carryforwards, Net of Federal Tax		(2,509	)		(2,190	)
Deferred Tax Assets		17,462			18,792
Deferred Tax Liabilities:
Depreciation		7,164			4,806
Intangible Assets		27,742			—
Other		2,465			—
Deferred Tax Liabilities		37,371			4,806
Net Deferred Tax Asset (Liabilities)	$	(19,909	)	$	13,986

The net deferred tax assets and liabilities presented in the Consolidated Balance Sheets are as follows at December 31:

(In thousands)	2013			2012
Deferred Tax Asset — Current	$	5,291		$	4,967
Deferred Tax Asset — Long-term		—			9,019
Deferred Tax Liabilities — Current		(970	)		—
Deferred Tax Liabilities — Long-term		(24,230	)		—
Net Deferred Tax Liability	$	(19,909	)	$	13,986

At December 31, 2013, state and foreign tax credit carryforwards amounted to approximately $1.5 million. These state and foreign tax credit carryforwards will expire from 2015 through 2028.

Due to the uncertainty as to the Company’s ability to generate sufficient taxable income in certain states in the future and utilize certain of the Company’s state operating loss carryforwards before they expire, the Company has recorded a valuation allowance accordingly. These state net operating loss carryforwards amount to approximately $17.8 million and expire at various dates from 2027 through 2033. As a result, the excess tax benefits included in certain state net operating loss carryforwards but not reflected in deferred tax assets was approximately $4.8 million. The excess tax benefits associated with stock option exercises are recorded directly to shareholders’ equity only when realized and amounted to approximately $1.3 million and $1.2 million for the years ended December 31, 2013 and 2012 respectively.

We have unrecognized tax benefits which, if ultimately recognized, will reduce our annual effective tax rate. Reserves for uncertain income tax positions have been recorded pursuant to ASC Topic 740-10. An estimate of the range of possible change during 2014 to the reserves cannot be made as of December 31, 2013. A reconciliation of the total amounts of unrecognized tax benefits, excluding interest and penalties which are insignificant, is as follows:

(in thousands)	2013		2012			2011
Balance at Beginning of the Year	$	840	$	880		$	1,470
Increases (Decreases) as a Result of Tax Positions Taken in Prior Years		145		(220	)		(1,090	)
Increases as a Result of Tax Positions Taken in the Current Year		955		180			500
Balance at End of the Year	$	1,940	$	840		$	880

In January 2013, the American Taxpayer Relief Act of 2012 extended the research and development tax credits for the year ended December 31, 2012. As the new law was not enacted until 2013, the 2012 tax provision contains no estimated benefit for research and development tax credits. Had the law been enacted in 2012, the company would have recognized approximately $0.7 million in tax benefits (net of a $0.7 million reserve) for the year ended December 31, 2012. The Company recognized a total benefit of $1.1 million in 2013 related to the 2012 credit.

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Warranty - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2013
Guarantees [Abstract]
Product warranty period	The Company warrants its products against defects in design, materials and workmanship typically over periods ranging from twelve to sixty months.

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LONG-TERM DEBT AND NOTE PAYABLE

12 Months Ended

Dec. 31, 2013

Debt Disclosure [Abstract]

LONG-TERM DEBT AND NOTE PAYABLE

NOTE 6 — LONG-TERM DEBT AND NOTE PAYABLE

Long-term debt consists of the following:

	(In thousands)
	2013		2012
Senior Term Note issued under the Third Amended and Restated Credit Agreement dated July 18, 2013. Scheduled amounts payable quarterly for $2.375 million to June 30, 2015, $3.562 million to June 30, 2016, $4.750 million to March 31, 2018 with the remainder due June 30, 2018. Mandatory unscheduled prepayments for 25% of Excess Cash Flow and Net Proceeds received in connection with Asset Sales and Insurance Recoveries. Interest is at LIBOR plus between 2.25 and 3.50% (3.2% at December 31, 2013)	$	185,250	$	—
Series 2007 Industrial Revenue Bonds issued through the Erie County, New York Industrial Development Agency payable $340,000 annually through 2017 and $330,000 annually thereafter through maturity with interest reset weekly (3.2% at December 31, 2013).		4,720		5,060
Series 1999 Industrial Revenue Bonds issued through the Erie County, New York Industrial Development Agency payable $350,000 annually through 2017 and $145,000 in 2018, with interest reset weekly (3.2% at December 31, 2013).		1,545		1,895
Series 1998 Industrial Revenue Bonds issued through the Business Finance Authority of the State of New Hampshire payable $400,000 annually through 2018 with interest reset weekly (3.2% at December 31, 2013).		2,050		2,450
Revolving Credit Line, payable August 31, 2016. Interest was at LIBOR plus between 1.50% and 2.50%. The entire amount was paid off upon the issuance of the Senior Term Notes under the Third Amended and Restated Credit Agreement dated July 18, 2013.		—		7,000
Senior Term Note, payable $2.0 million quarterly in 2013 with a balloon payment of $5.0 million in January 2014. Interest was at LIBOR plus between 2.25% and 3.50%. The entire amount was refinanced in conjunction with the issuance of the Senior Term Notes under the Third Amended and Restated Credit Agreement dated July 18, 2013.		—		13,000
Note Payable at Canadian Prime		—		566
Other Bank Debt		2,936		—
Capital Lease Obligations and Other Debt		3,819		12
		200,320		29,983
Less Current Maturities		12,279		9,268
	$	188,041	$	20,715

Principal maturities of long-term debt are approximately:

(In thousands)
2014	$	12,279
2015		14,237
2016		18,930
2017		21,259
2018		130,213
Thereafter		3,402
	$	200,320

The Company’s obligations under the Credit Agreement as amended are jointly and severally guaranteed by each domestic subsidiary of the Company other than a non-material subsidiary. The obligations are secured by a first priority lien on substantially all of the Company’s and the guarantors’ assets.

The Company extended and modified its existing credit facility by entering into Amendment No. 1 dated as of March 27, 2013 (the “Amendment”), to the Second Amended and Restated Credit Agreement. The Amendment provided for an increase in the Company’s revolving credit facility from $35 million to $75 million and for an extension of the maturity date. Interest remained at a rate of LIBOR plus between 1.50% and 2.50% based on the Company’s Leverage Ratio under the Credit Agreement. The credit facility allocates up to $20 million of the $75 million revolving credit line for the issuance of letters of credit, including certain existing letters of credit.

On July 18, 2013, in connection with the funding of the Peco Acquisition (See Note 19), the Company amended its existing credit facility by entering into a Third Amended and Restated Credit Agreement ( the “Credit Agreement”). The Credit Agreement continued to provide for a $75 million five-year revolving credit facility and a new $190 million five-year term loan, both expiring on June 30, 2018. At December 31, 2013, there were no amounts owing under the revolver, there were $9.8 million in outstanding letters of credit leaving $65.2 million available. The amended facilities carry an interest rate ranging from 225 basis points to 350 basis points above LIBOR, depending on the Company’s leverage ratio as defined in the Credit Agreement. Variable principal payments on the term loan are quarterly through March 31, 2018 with a balloon payment at maturity and with mandatory prepayments being required in certain circumstances. The credit facility is secured by substantially all of the Company’s assets. In addition, the Company is required to pay a commitment fee of between 0.25% and 0.50% on the unused portion of the total credit commitment for the preceding quarter, based on the Company’s leverage ratio under the Credit Agreement.

The Credit Agreement contains various financial covenants. The covenant for minimum fixed charge coverage, defined as the ratio of the sum of net income, interest expense, provision for taxes based on income, total depreciation expense, total amortization expense, other non-cash items reducing net income minus other non-cash items increasing net income minus capital expenditures, minus cash taxes paid and dividends paid to interest expense plus scheduled principal payments on long-term debt calculated on a rolling four-quarter basis is not to be less than 1.25 to 1 for each fiscal quarter ending on or after September 30, 2011. The Company’s fixed charge coverage was 3.70 to 1 at December 31, 2013. The covenant for maximum leverage, defined as the ratio of the sum of net income, interest expense, provision for taxes based on income, total depreciation expense, total amortization expense, other non-cash items reducing net income minus other non-cash items increasing net income to funded debt calculated on a rolling four-quarter basis is not to exceed 3.75 to 1 through March 31, 2015 or to exceed 3.5 to 1 each fiscal quarter thereafter. The Company’s leverage ratio was 2.68 to 1 at December 31, 2013.

The Company modified its existing credit facility by entering into Amendment No. 1 dated as of December 31, 2013 (the “Amendment”), to the Third Amended and Restated Credit Agreement, with HSBC Bank USA, National Association (“HSBC”), as Agent and with HSBC, Bank of America, N.A. and Manufacturers and Traders Trust Company, as Lenders ( the “Credit Agreement”). The Amendment modifies the definition of EBITDA by adding back certain non-recurring expenses and adjustments and modifies the definition of the Fixed Charge Coverage Ratio by excluding certain capital expenditures from the computation.

In the event of voluntary or involuntary bankruptcy of the Company or any subsidiary, all unpaid principal and other amounts owing under the Credit Agreement automatically become due and payable. Other events of default, such as failure to make payments as they become due and breach of financial and other covenants, change of control, judgments over a certain amount, and cross default under other agreements give the Agent the option to declare all such amounts immediately due and payable.

The Industrial Revenue Bonds are held by institutional investors and are guaranteed by a bank letter of credit, which is collateralized by certain property, plant and equipment assets, the carrying value of which approximates the principal balance on the bonds.

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WARRANTY

12 Months Ended

Dec. 31, 2013

Guarantees [Abstract]

WARRANTY

NOTE 7 — WARRANTY

In the ordinary course of business, the Company warrants its products against defects in design, materials and workmanship typically over periods ranging from twelve to sixty months. The Company determines warranty reserves needed by product line based on experience and current facts and circumstances. Activity in the warranty accrual, which is included in other accrued expenses on the Consolidated Balance Sheets, is summarized as follows:

(In thousands)	2013			2012			2011
Balance at Beginning of the Year	$	2,551		$	1,092		$	1,699
Warranty Liabilities Acquired		671			—			—
Warranties Issued		722			2,430			1,446
Reassessed Warranty Exposure		(222	)		—			(95	)
Warranties Settled		(926	)		(971	)		(1,958	)
Balance at End of the Year	$	2,796		$	2,551		$	1,092

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PROFIT SHARING/401(k) PLAN

12 Months Ended

Dec. 31, 2013

Postemployment Benefits [Abstract]

PROFIT SHARING/401(k) PLAN

NOTE 9 — PROFIT SHARING/401(k) PLAN

The Company offers eligible domestic full-time employees participation in the ATRO Profit Sharing/401(k) Plan. The plan provides for annual contributions based on percentages of pretax income. In addition, employees may contribute a portion of their salary to the 401(k) plan which is partially matched by the Company. The plan may be amended or terminated at any time.

Total charges to income before income taxes for these plans were approximately $3.7 million, $3.0 million and $2.6 million in 2013, 2012 and 2011, respectively.

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Income Taxes - Effective Tax Rates Differ from Statutory Federal Income Tax (Detail)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income Tax Disclosure [Abstract]
Statutory Federal Income Tax Rate	35.00%	35.00%	35.00%
Non-deductible Stock Compensation Expense	1.00%	1.10%	1.00%
Domestic Production Activity Deduction	(3.00%)	(3.00%)	(2.90%)
Non-deductible Acquisition Costs	1.00%
Other		0.10%	(0.20%)
Foreign Tax Benefits	(0.30%)	(1.20%)	(1.00%)
State Income Tax (Benefits), Net of Federal Income Tax Effect	(0.10%)	(0.10%)	1.40%
Research and Development Tax Credits	(5.00%)	(1.10%)	(6.10%)
Other		(0.10%)	(1.60%)
Effective Tax Rate	28.60%	30.70%	25.60%

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Stock Option and Purchase Plans - Summary of Company's Stock Option Activity and Related Information (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Option Outstanding, Beginning balance	1,521,275	1,661,445	1,904,232
Options Granted	69,720	130,500	84,938
Options Exercised	(181,218)	(270,670)	(327,725)
Options Forfeited
Option Outstanding, Ending balance	1,409,777	1,521,275	1,661,445
Option Exercisable, Ending balance	1,149,532	1,168,459	1,280,744
Weighted Average Exercise Price, Outstanding, Beginning balance	$ 8.23	$ 6.71	$ 5.58
Weighted Average Exercise Price, Options Granted	$ 42.67	$ 18.08	$ 22.44
Weighted Average Exercise Price, Options Exercised	$ 4.25	$ 3.67	$ 4.25
Weighted Average Exercise Price, Options Forfeited
Weighted Average Exercise Price, Outstanding, Ending balance	$ 10.44	$ 8.23	$ 6.71
Weighted Average Exercise Price, Exercisable , Ending balance	$ 7.81	$ 6.72	$ 5.47
Aggregate Intrinsic Value, Outstanding , Beginning Balance	$ 65,072	$ 20,532	$ 38,778
Aggregate Intrinsic Value, Options Granted	581	129	299
Aggregate Intrinsic Value, Options Exercised	(8,472)	(4,168)	(7,112)
Aggregate Intrinsic Value, Options Forfeited
Aggregate Intrinsic Value, Outstanding, Ending Balance	57,181	16,493	31,965
Aggregate Intrinsic Value, Exercisable , Ending balance	$ 49,648	$ 14,431	$ 26,237

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Income Taxes - Components of Net Deferred Tax Assets and Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Income Tax Disclosure [Abstract]
Deferred Tax Asset - Current	$ 5,291	$ 4,967
Deferred Tax Asset - Long-term		9,019
Deferred Tax Liabilities - Current	(970)
Deferred Tax Liabilities - Long-term	(24,230)
Net Deferred Tax Asset (Liabilities)	$ (19,909)	$ 13,986

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Acquisitions - Preliminary Allocation of Purchase Price Based on Appraised Fair Values (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Business Acquisition [Line Items]
Goodwill	$ 100,998	$ 21,923	$ 17,185
Peco, Inc [Member]
Business Acquisition [Line Items]
Accounts Receivable	8,002
Inventory	15,473
Other Current Assets	1,881
Fixed Assets	5,153
Purchased Intangible Assets	69,000
Goodwill	69,494
Accounts Payable, Accrued Expenses, and Other Current Liabilities	(4,114)
Deferred Income Taxes	(28,889)
Total Purchase Price	$ 136,000

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Income Taxes - Provision (Benefit) for Income Taxes (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Current
US Federal	$ 10,904	$ 11,173	$ 6,840
State	682	78	114
Foreign	81	2	47
Deferred	(722)	(1,544)	423
Provision (benefit) for income taxes, net	$ 10,945	$ 9,709	$ 7,424

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Derivative Financial Instruments - Summary of Activity in AOCI Related to Derivatives (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Derivative Instruments And Hedging Activities Disclosure [Abstract]
Derivative Balance at the Beginning of the Year in AOCI	$ (142)	$ (256)	$ (338)
Net Deferral in AOCI of Derivatives:
Net (Increase) Decrease in Fair Value of Derivatives	2	(34)	(171)
Tax Effect		14	61
Net Deferral in AOCI of Derivatives	2	(20)	(110)
Net Reclassification from AOCI into Earnings:
Reclassification from AOCI into Earnings - Interest Expense	109	209	298
Tax Effect	(38)	(75)	(106)
Net Reclassification from AOCI into Earnings	71	134	192
Mark to Market Adjustments for Derivatives	73	114	82
Derivative Balance at the End of the Year in AOCI	$ (69)	$ (142)	$ (256)

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LONG-TERM DEBT AND NOTE PAYABLE (Tables)

12 Months Ended

Dec. 31, 2013

Debt Disclosure [Abstract]

Summary of Long-Term Debt

Long-term debt consists of the following:

	(In thousands)
	2013		2012
Senior Term Note issued under the Third Amended and Restated Credit Agreement dated July 18, 2013. Scheduled amounts payable quarterly for $2.375 million to June 30, 2015, $3.562 million to June 30, 2016, $4.750 million to March 31, 2018 with the remainder due June 30, 2018. Mandatory unscheduled prepayments for 25% of Excess Cash Flow and Net Proceeds received in connection with Asset Sales and Insurance Recoveries. Interest is at LIBOR plus between 2.25 and 3.50% (3.2% at December 31, 2013)	$	185,250	$	—
Series 2007 Industrial Revenue Bonds issued through the Erie County, New York Industrial Development Agency payable $340,000 annually through 2017 and $330,000 annually thereafter through maturity with interest reset weekly (3.2% at December 31, 2013).		4,720		5,060
Series 1999 Industrial Revenue Bonds issued through the Erie County, New York Industrial Development Agency payable $350,000 annually through 2017 and $145,000 in 2018, with interest reset weekly (3.2% at December 31, 2013).		1,545		1,895
Series 1998 Industrial Revenue Bonds issued through the Business Finance Authority of the State of New Hampshire payable $400,000 annually through 2018 with interest reset weekly (3.2% at December 31, 2013).		2,050		2,450
Revolving Credit Line, payable August 31, 2016. Interest was at LIBOR plus between 1.50% and 2.50%. The entire amount was paid off upon the issuance of the Senior Term Notes under the Third Amended and Restated Credit Agreement dated July 18, 2013.		—		7,000
Senior Term Note, payable $2.0 million quarterly in 2013 with a balloon payment of $5.0 million in January 2014. Interest was at LIBOR plus between 2.25% and 3.50%. The entire amount was refinanced in conjunction with the issuance of the Senior Term Notes under the Third Amended and Restated Credit Agreement dated July 18, 2013.		—		13,000
Note Payable at Canadian Prime		—		566
Other Bank Debt		2,936		—
Capital Lease Obligations and Other Debt		3,819		12
		200,320		29,983
Less Current Maturities		12,279		9,268
	$	188,041	$	20,715

Principal Maturities of Long-Term Debt

Principal maturities of long-term debt are approximately:

(In thousands)
2014	$	12,279
2015		14,237
2016		18,930
2017		21,259
2018		130,213
Thereafter		3,402
	$	200,320

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Intangible Assets - Summary of Acquired Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Finite-Lived Intangible Assets [Line Items]
Weighted Average Life	13 years
Gross Carrying Amount	$ 113,974	$ 23,186
Accumulated Amortization	11,273	6,663
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Life	11 years
Gross Carrying Amount	2,146	1,271
Accumulated Amortization	891	784
Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Life	10 years
Gross Carrying Amount	7,453	2,453
Accumulated Amortization	552	162
Completed and Unpatented Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Life	10 years
Gross Carrying Amount	15,377	6,377
Accumulated Amortization	2,620	1,749
Backlog and Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Life	14 years
Gross Carrying Amount	88,998	13,085
Accumulated Amortization	$ 7,210	$ 3,968

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FAIR VALUE

12 Months Ended

Dec. 31, 2013

Fair Value Disclosures [Abstract]

FAIR VALUE

NOTE 14 — FAIR VALUE

ASC Topic 820, Fair value Measurements and Disclosures, (“ASC Topic 820”) defines fair value, establishes a framework for measuring fair value and expands the related disclosure requirements. This statement applies under other accounting pronouncements that require or permit fair value measurements. The statement indicates, among other things, that a fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. ASC Topic 820 defines fair value based upon an exit price model. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and involves consideration of factors specific to the asset or liability.

ASC Topic 820 establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value.

On a Recurring Basis:

A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The following table provides the financial assets and liabilities carried at fair value measured on a recurring basis as of December 31, 2013 and December 31, 2012:

(In thousands)	Classification	Total			Level 1		Level 2			Level 3
Interest Rate Swaps	Other Liabilities
December 31, 2013		$	(108	)	$	—	$	(108	)	$	—
December 31, 2012			(218	)		—		(218	)		—
Acquisition Contingent Consideration
December 31, 2013	Current Liabilities	$	(137	)	$	—	$	—		$	(137	)
December 31, 2012			(86	)		—		—			(86	)
December 31, 2013	Other Liabilities	$	(5,709	)	$	—	$	—		$	(5,709	)
December 31, 2012			(728	)		—		—			(728	)

Interest rate swaps are securities with no quoted readily available Level 1 inputs, and therefore are measured at fair value using inputs that are directly observable in active markets and are classified within Level 2 of the valuation hierarchy, using the income approach (See Note 15).

Our Level 3 fair value liabilities represent contingent consideration recorded related to the 2011 Ballard acquisition, to be paid up to a maximum of $5.5 million if certain revenue growth targets are met over the next five years, the 2012 Max-Viz acquisition, to be paid up to a maximum of $8.0 million if certain revenue growth targets are met over the next three years and the 2013 AeroSat acquisition, to be paid up to a maximum of $53.0 million if certain revenue growth targets are met over the next two years. The calculation of additional purchase consideration (“Earn Out”) related to the acquisition of AeroSat is as follows:

	AeroSat Revenue	Earn Out Formula
2014	<$30 million	No Earn Out
	>$30 million < $50 million	(AeroSat Revenue X 15%) x ((AeroSat Revenue-$30 million)/$20 million
	>$50 million	AeroSat Revenue X 15%
2015	<$40 million	No Earn Out
	>$40 million < $60 million	(AeroSat Revenue X 15%) x ((AeroSat Revenue-$40 million)/$20 million
	>$60 million	AeroSat Revenue X 15%

The amounts recorded for the contingent considerations were calculated using an estimate of the probability of the future cash outflows. The varying contingent payments were then discounted to the present value utilizing a discounted cash flow methodology. The contingent consideration liabilities have no observable Level 1 or Level 2 inputs.

On a Non-recurring Basis:

In accordance with the provisions of ASC Topic 350, Intangibles – Goodwill and Other the Company estimates the fair value of reporting units, utilizing unobservable Level 3 inputs. Level 3 inputs require significant management judgment due to the absence of quoted market prices or observable inputs for assets of a similar nature. The Company utilizes a discounted cash flow method to estimate the fair value of reporting units utilizing unobservable inputs. The fair value measurement of the reporting unit under the step-one and step-two analysis of the quantitative goodwill impairment test are classified as Level 3 inputs.

Intangible assets that are amortized are evaluated for recoverability whenever adverse effects or changes in circumstances indicate that the carrying value may not be recoverable. The recoverability test consists of comparing the undiscounted projected cash flows with the carrying amount. Should the carrying amount exceed undiscounted projected cash flows, an impairment loss would be recognized to the extent the carrying amount exceeds fair value. For the Company’s indefinite-lived intangible asset, the impairment test consists of comparing the fair value, determined using the relief from royalty method, with its carrying amount. An impairment loss would be recognized for the carrying amount in excess of its fair value.

At December 31, 2013, the fair value of goodwill and intangible assets classified using Level 3 inputs are as follows:

• Beginning January 1, 2012, previously unamortized trade names in the Test Systems segment with a fair value of $0.4 million are now being amortized over 10 years. The fair value measurement of total amortized intangible assets in the Test Systems reporting unit is $3.9 million. Inputs used to calculate the fair value were internal forecasts used to estimate undiscounted future cash flows. There was no change in fair value from December 31, 2012.

• The Max-Viz goodwill and intangible assets acquired on July 30, 2012, were valued at fair value using a discounted cash flow methodology and are classified as Level 3 inputs.

• The Peco, AeroSat, and PGA goodwill and intangible assets acquired on July 18, 2013, October 2, 2013, and December 5, 2013 respectively, were valued at fair value using a discounted cash flow methodology and are classified as Level 3 inputs.

Due to their short-term nature, the carrying value of cash and equivalents, accounts receivable, accounts payable, and notes payable approximate fair value. The carrying value of the Company’s variable rate long-term debt instruments also approximates fair value due to the variable rate feature of these instruments.

During 2011, in accordance with the provisions of ASC Topic 350, Intangibles – Goodwill and Other, the Company recorded a $2.4 million goodwill impairment charge related to the Test System reporting unit to write down goodwill to its implied fair value of zero. The Company utilizes a discounted cash flow analysis to estimate the fair value of reporting units utilizing unobservable inputs. The fair value measurement of the reporting unit under the step-one and step-two analysis of the goodwill impairment test are classified as Level 3 inputs. There were no impairment charges to goodwill in any of the Company’s reporting units in 2013 and 2012.

During 2011, the Company recorded an impairment charge to write down to fair value indefinite-lived trade name intangible assets of its Test System reporting unit. The impairment charge for the trade names was $0.1 million based on the determined fair value of $0.4 million. This impairment charge is the result of the revised downward estimates of future revenues and cash flows of the Test Systems reporting unit. The fair value measurements are calculated using unobservable inputs classified as Level 3 inputs, requiring significant management judgment due to the absence of quoted market prices or observable inputs for assets of a similar nature. There were no impairment charges to any of the Company’s intangible assets in either of the Company’s segments in 2013 and 2012.

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Acquisitions

12 Months Ended

Dec. 31, 2013

Business Combinations [Abstract]

Acquisitions

NOTE 19 — ACQUISITIONS

PGA Electronic S.A.

On December 5, 2013 we acquired 100% of the stock of PGA, a designer and manufacturer of seat motion and lighting systems primarily for business and first class aircraft seats and is Europe’s leading provider of in-flight entertainment/communication systems as well as cabin management systems for private VVIP aircraft. The addition of PGA further diversifies the products and technologies that Astronics offers. The purchase price was approximately $32.9 million for which approximately $10.7 million, net of cash acquired, was paid in cash and the balance paid with 264,168 shares of Astronics stock valued at $51.00 per share. PGA is included in our Aerospace reporting segment. The purchase price allocation for this acquisition is not finalized as the fair value valuation of assets and liabilities is not complete.

Astronics AeroSat Corporation

On October 1, 2013, we acquired certain assets and liabilities from AeroSat Corporation and related entities, a supplier of aircraft antenna systems for $12 million in cash, plus the a potential additional purchase consideration of up to $53 million based upon the achievement of certain revenue targets in 2014 and 2015. The addition of AeroSat further diversifies the products and technologies that Astronics offers. The additional contingent purchase consideration is recorded at its estimated fair value of approximately $5.0 million at the date of acquisition based upon the Company’s assessment of the probability of AeroSat achieving the revenue growth targets. Substantially all of the goodwill and purchased intangible assets are expected to be deductible for tax purposes over 15 years. The purchase price allocation for this acquisition is not complete. The purchase price allocation for this acquisition is not finalized as the fair value valuation of the earn out liability is still being evaluated.

Peco, Inc.

On July 18, 2013, we acquired 100% of the stock of Peco, Inc. which designs and manufacturers highly engineered commercial aerospace interior components and systems for the aerospace industry. The company specializes in PSUs which incorporate air handling, emergency oxygen, electrical power management and cabin lighting systems. It also manufactures a wide range of fuel access doors that meet stringent strength, fuel sealing and anti-corrosion requirements. The addition of Peco diversifies the products and technologies that Astronics offers. We purchased the outstanding stock of Peco for $136.0 million in cash. Peco’s unaudited 2013 revenue prior to the acquisition date was approximately $46.2 million. Peco is included in our Aerospace reporting segment.

The allocation of the purchase price paid for Peco is based on fair values of the acquired assets and liabilities assumed of Peco as of July 18, 2013.

The allocation of purchase price based on appraised fair values was as follows (In thousands):

Accounts Receivable	$	8,002
Inventory		15,473
Other Current Assets		1,881
Fixed Assets		5,153
Purchased Intangible Assets		69,000
Goodwill		69,494
Accounts Payable, Accrued Expenses, and Other Current Liabilities		(4,114	)
Deferred Income Taxes		(28,889	)
Total Purchase Price	$	136,000

The amounts allocated to the purchased intangible assets consist of the following:

(In thousands)	Weighted Average Life	Acquisition Fair Value
Trademark	10 Years	$	4,200
Technology	10 Years		3,300
Customer Relationships/Backlog	1.5-16 Years		61,500
		$	69,000

Goodwill and other intangible assets reflected above were determined to meet the criterion for recognition apart from tangible assets acquired and liabilities assumed. The goodwill is primarily attributable to expected synergies and the assembled workforce. Purchased intangible assets and goodwill are not deductible for tax purposes.

The following is a summary of the sales and amounts included in income from operations for Peco included in the consolidated financial statements of the Company from the date of acquisition to December 31, 2013 (in thousands):

Sales	$	36,452
Operating Income	$	122

The following summary, prepared on a pro forma basis, combines the consolidated results of operations of the Company with those of Peco as if the acquisition took place on January 1, 2012. The pro forma consolidated results include the impact of certain adjustments, including increased interest expense on acquisition debt, amortization of purchased intangible assets and income taxes.

(in thousands, except earnings per share)	2013		2012
Sales	$	386,170	$	344,233
Net income	$	29,456	$	24,348
Basic earnings per share	$	1.68	$	1.42
Diluted earnings per share	$	1.60	$	1.34

The pro forma results are not necessarily indicative of what actually would have occurred if the acquisition had been in effect for the year ended December 31, 2013 and 2012. In addition, they are not intended to be a projection of future results.

Max-Viz, Inc.

On July 30, 2012 we acquired by merger, 100% of the stock of Max-Viz, Inc., a manufacturer of industry-leading Enhanced Vision Systems for defense and commercial aerospace applications for the purpose of improving situational awareness. The addition of Max-Viz diversifies the products and technologies that Astronics offers. We purchased the outstanding stock of Max-Viz for $10.7 million in cash plus contingent purchase consideration up to a maximum of $8.0 million subject to meeting certain revenue growth targets over the next three years. Max-Viz is included in our Aerospace reporting segment. The additional contingent purchase consideration was recorded at its estimated fair value at the date of acquisition based upon the Company’s assessment of the probability of Max-Viz achieving the revenue growth targets.

There was no significant change in the fair value estimate of the contingent consideration, from the date of the acquisition to December 31, 2013. The goodwill recognized is comprised primarily of intangible assets that do not require separate recognition. Substantially all of the goodwill and purchased intangible assets are expected to be deductible for tax purposes over 15 years. The purchase price allocation for the 2012 acquisition is complete.

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Commitments and Contingencies - Schedule of Future Minimum Lease Payment Commitments (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013
Operating Leases Future Minimum Payments Due [Abstract]
2014	$ 2,183
2015	925
2016	279
2017	237
2018	136
Total	$ 3,760

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Inventories - Summary of Inventories (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Inventory Disclosure [Abstract]
Finished Goods	$ 21,627	$ 10,864
Work in Progress	15,017	8,960
Raw Material	48,625	28,800
Inventory, Net	$ 85,269	$ 48,624

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Acquisitions - Consolidated Results of Operation of Company with Acquired Business (Detail) (Peco, Inc [Member], USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Peco, Inc [Member]
Business Acquisition [Line Items]
Sales	$ 386,170	$ 344,233
Net income	$ 29,456	$ 24,348
Basic earnings per share	$ 1.68	$ 1.42
Diluted earnings per share	$ 1.60	$ 1.34

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FAIR VALUE (Tables)

12 Months Ended

Dec. 31, 2013

Fair Value Disclosures [Abstract]

Financial Assets and Liabilities Carried at Fair Value Measured on Recurring Basis

The following table provides the financial assets and liabilities carried at fair value measured on a recurring basis as of December 31, 2013 and December 31, 2012:

(In thousands)	Classification	Total			Level 1		Level 2			Level 3
Interest Rate Swaps	Other Liabilities
December 31, 2013		$	(108	)	$	—	$	(108	)	$	—
December 31, 2012			(218	)		—		(218	)		—
Acquisition Contingent Consideration
December 31, 2013	Current Liabilities	$	(137	)	$	—	$	—		$	(137	)
December 31, 2012			(86	)		—		—			(86	)
December 31, 2013	Other Liabilities	$	(5,709	)	$	—	$	—		$	(5,709	)
December 31, 2012			(728	)		—		—			(728	)

Calculation of Additional Purchase Consideration (Earn Out)

The calculation of additional purchase consideration (“Earn Out”) related to the acquisition of AeroSat is as follows:

	AeroSat Revenue	Earn Out Formula
2014	<$30 million	No Earn Out
	>$30 million < $50 million	(AeroSat Revenue X 15%) x ((AeroSat Revenue-$30 million)/$20 million
	>$50 million	AeroSat Revenue X 15%
2015	<$40 million	No Earn Out
	>$40 million < $60 million	(AeroSat Revenue X 15%) x ((AeroSat Revenue-$40 million)/$20 million
	>$60 million	AeroSat Revenue X 15%

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Schedule II - Valuation and Qualifying Accounts (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Allowance for Doubtful Accounts [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at the Beginning of Period	$ 650	$ 645	$ 274
Acquisitions		130
Charged to Cost and Expense	112	88	466
(Write-Offs) Recoveries/Other	(622)	(213)	(95)
Balance at End of Period	140	650	645
Reserve for Inventory Valuation [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at the Beginning of Period	12,026	10,599	11,183
Acquisitions		137
Charged to Cost and Expense	537	1,544	336
(Write-Offs) Recoveries/Other	(1,522)	(254)	(920)
Balance at End of Period	11,041	12,026	10,599
Deferred Tax Valuation Allowance [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at the Beginning of Period	2,190	1,898	890
Charged to Cost and Expense	319	292	531
(Write-Offs) Recoveries/Other			477
Balance at End of Period	$ 2,509	$ 2,190	$ 1,898

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Consolidated Balance Sheets (Parenthetical) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Convertible Class B Stock [Member]
Common Stock, Par value	$ 0.01	$ 0.01
Common Stock, Shares authorized	10,000,000	10,000,000
Common Stock, Shares issued	4,590,149	6,487,921
Common Stock, Shares outstanding	4,590,149	6,487,921
Common Stock [Member]
Common Stock, Par value	$ 0.01	$ 0.01
Common Stock, Shares authorized	40,000,000	40,000,000
Common Stock, Shares issued	13,268,299	10,865,212
Common Stock, Shares outstanding	13,268,299	10,865,212

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Fair Value - Financial Assets and Liabilities Carried at Fair Value Measured on Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Other Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest Rate Swaps	$ (108)	$ (218)
Acquisition Contingent Consideration	(5,709)	(728)
Current Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Acquisition Contingent Consideration	(137)	(86)
Level 1 [Member] | Other Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest Rate Swaps
Acquisition Contingent Consideration
Level 1 [Member] | Current Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Acquisition Contingent Consideration
Level 2 [Member] | Other Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest Rate Swaps	(108)	(218)
Acquisition Contingent Consideration
Level 2 [Member] | Current Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Acquisition Contingent Consideration
Level 3 [Member] | Other Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest Rate Swaps
Acquisition Contingent Consideration	(5,709)	(728)
Level 3 [Member] | Current Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Acquisition Contingent Consideration	$ (137)	$ (86)

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INVENTORIES

12 Months Ended

Dec. 31, 2013

Inventory Disclosure [Abstract]

INVENTORIES

NOTE 3 — INVENTORIES

Inventories at December 31 are as follows:

(In thousands)	2013		2012
Finished Goods		21,627	$	10,864
Work in Progress		15,017		8,960
Raw Material		48,625		28,800
	$	85,269	$	48,624

At December 31, 2013, the Company’s reserve for inventory valuation was $11.0 million, or 11.5% of gross inventory. At December 31, 2012, the Company’s reserve for inventory valuation was $12.0 million, or 19.8% of gross inventory.

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Long-Term Debt and Note Payable - Principal Maturities of Long-Term Debt (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Debt Disclosure [Abstract]
2014	$ 12,279
2015	14,237
2016	18,930
2017	21,259
2018	130,213
Thereafter	3,402
Total Long-term Debt	$ 200,320	$ 29,983

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Stock Option and Purchase Plans - Summary of Weighted Average Fair Value of Options Granted (Detail) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Weighted Average Fair Value of the Options Granted	$ 23.22	$ 9.93	$ 12.65

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Subsequent Event - Additional Information (Detail) (USD $)	12 Months Ended		1 Months Ended		1 Months Ended
	Dec. 31, 2013	Dec. 31, 2013 Revolving Credit Facility [Member]	Jan. 31, 2014 Subsequent Event [Member] Facility sqft	Jan. 20, 2014 Subsequent Event [Member]	Feb. 28, 2014 Subsequent Event [Member] March 31, 2014 and June 30, 2014 [Member] Maximum [Member]	Feb. 28, 2014 Subsequent Event [Member] March 31, 2014 and June 30, 2014 [Member] Minimum [Member]	Feb. 28, 2014 Subsequent Event [Member] September 30, 2014 through March 31, 2015 [Member] Maximum [Member]	Feb. 28, 2014 Subsequent Event [Member] September 30, 2014 through March 31, 2015 [Member] Minimum [Member]	Feb. 28, 2014 Subsequent Event [Member] Fiscal Quarter Subsequent to March 31, 2015 to Maturity [Member] Maximum [Member]	Feb. 28, 2014 Subsequent Event [Member] Fiscal Quarter Subsequent to March 31, 2015 to Maturity [Member] Minimum [Member]	Feb. 28, 2014 Subsequent Event [Member] Revolving Credit Facility [Member]
Subsequent Event [Line Items]
Number of facility purchased			2
Total area of a facilities			233,000
Purchase price of facilities			$ 14,500,000
Additional Purchase consideration				53,000,000
Total amount issued under revolving credit facility		20,000,000									125,000,000
Revolving credit facility, maturity date											Jun. 30, 2018
Financing fee incurred for acquisition	9,800,000										58,000,000
Term of revolving credit facility											5 years
Revolving credit facility amount remaining											$ 56,100,000
Leverage ratio	2.68				4.00	1.00	3.75	1.00	3.50	1.00

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Retirement Plans and Related Post Retirement Benefits - Additional Information (Detail) (USD $)	12 Months Ended			12 Months Ended
	Dec. 31, 2013 RetirementPlans	Dec. 31, 2012	Mar. 06, 2012	Dec. 31, 2015 Forecast [Member]	Dec. 31, 2014 Forecast [Member]	Dec. 31, 2012 WCTPP [Member]	Dec. 31, 2013 Maximum [Member]	Dec. 31, 2013 Minimum [Member]	Dec. 31, 2012 SERP [Member]
Defined Benefit Plan Disclosure [Line Items]
Number of non-qualified supplemental retirement defined benefit plans	2
Projected benefit obligation			$ 5,800,000
Accumulated benefit obligation of the plans	10,100,000	9,500,000
Assets existing for retirement plans	0	0
Unrecognized prior service costs	3,500,000
Unrecognized prior service costs, net	5,300,000
Unrecognized prior service costs, tax	1,800,000
Unrecognized actuarial losses	1,200,000
Unrecognized actuarial losses, net	1,900,000
Unrecognized actuarial losses, tax	700,000
Net periodic pension cost	300,000
Net periodic pension cost net of tax	500,000
Net periodic pension cost, tax	200,000
Defined benefit plan amortization of net gains losses net of taxes	100,000
Current accrued pension liability	300,000
Long-term accrued pension liability	14,000,000
Expected benefit payments	300,000
Expected benefit payments, year two	300,000
Expected benefit payments, year three	300,000
Expected benefit payments, year four	300,000
Expected benefit payments, year five	300,000
Benefits to be paid in each of the next five years	1,700,000								300,000
Annual increase in the cost of health care benefits				6.40%	7.80%
Annual increase in the cost of health care benefits range							6.20%	5.10%
Plan assets						32,300,000,000
Accumulated plan benefits						37,900,000,000
Contributions of employer						99,200,000
Percentage of fund						90.10%
Minimum contribution per compensable hour	$ 2.50
Compensable hour	184 hours
Maximum cumulative number of hours per calendar year	2080 hours

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Subsequent Events

12 Months Ended

Dec. 31, 2013

Subsequent Events [Abstract]

Subsequent Events

NOTE 20 — SUBSEQUENT EVENTS

In January 2014, Peco purchased two facilities totaling 233,000 square feet in Clackamas, Oregon for approximately $14.5 million and expects to move its operations into the buildings by the end of the fourth quarter of 2014.

On January 20, 2014, the Company entered into an agreement to purchase substantially all of the assets and liabilities of the Test and Services Division of EADS North America, Inc. for approximately $53.0 million in cash plus a net working capital adjustment. On February 28, 2014, Astronics completed the acquisition. This division will be reported as part of Test Systems segment.

In connection with the funding of the acquisition discussed above, the Company amended its existing credit facility by entering into Amendment No 2. to Third Amended and Restated Credit Agreement, dated as of February 28, 2014. The Company elected to exercise its option to increase the revolving credit commitment. The Credit Agreement now provides for a $125 million five-year revolving credit facility maturing on June 30, 2018, of which $58.0 million was drawn to finance the acquisition. There remains approximately $56.1 million available under the revolving credit facility on February 28, 2014.

The amended facility temporarily increases the maximum leverage ratio permitted under the agreement to 4.0 to 1.0 for fiscal quarters ending March 31, 2014 and June 30, 2014, 3.75 to 1.0 as of the end of fiscal quarters from September 30, 2014 through March 31, 2015 and 3.5 to 1.0 as of the end of each fiscal quarter subsequent to March 31, 2015 to maturity. There were no changes to the other covenants, interest rates being charged or commitment fees.

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Retirement Plans and Related Post Retirement Benefits - Details of Multi Employer Plans (Detail) (WCTPP [Member], USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013
WCTPP [Member]
Multiemployer Plans [Line Items]
EIN/Pension Plan Number	916145047
Zone Status	Green
Rehabilitation Plan Status	No
2013 Company Contributions	$ 830
Surcharge Imposed	No
Collective Bargaining Agreement	Oct. 31, 2016
Plan Year End	--12-31

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SHAREHOLDERS' EQUITY (Tables)

12 Months Ended

Dec. 31, 2013

Equity [Abstract]

Components of Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss) are as follows:

(In thousands)	2013			2012
Foreign Currency Translation Adjustments	$	1,284		$	1,415
Mark to Market Adjustments for Derivatives – Before Tax		(107	)		(218	)
Tax Benefit		38			76
Mark to Market Adjustments for Derivatives – After Tax		(69	)		(142	)
Retirement Liability Adjustment – Before Tax		(7,423	)		(9,316	)
Tax Benefit		2,597			3,260
Retirement Liability Adjustment – After Tax		(4,826	)		(6,056	)
Accumulated Other Comprehensive Loss	$	(3,611	)	$	(4,783	)

Components of Other Comprehensive Income (Loss)

The components of other comprehensive income (loss) are as follows:

(In thousands)	2013			2012			2011
Foreign Currency Translation Adjustments	$	(131	)	$	183		$	(90	)
Reclassification to Interest Expense		109			209			298
Mark to Market Adjustments for Derivatives		2			(34	)		(171	)
Tax Benefit (Expense)		(38	)		(61	)		(45	)
Mark to Market Adjustments for Derivatives		73			114			82
Retirement Liability Adjustment		1,893			(6,451	)		(1,348	)
Tax Benefit (Expense)		(663	)		2,257			472
Retirement Liability Adjustment		1,230			(4,194	)		(876	)
Other Comprehensive (Loss) Income	$	1,172		$	(3,897	)	$	(884	)

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STOCK OPTION AND PURCHASE PLANS

12 Months Ended

Dec. 31, 2013

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

STOCK OPTION AND PURCHASE PLANS

NOTE 13 — STOCK OPTION AND PURCHASE PLANS

The Company has stock option plans that authorize the issuance of options for shares of Common Stock to directors, officers and key employees. Stock option grants are designed to reward long-term contributions to the Company and provide incentives for recipients to remain with the Company. The exercise price, determined by a committee of the Board of Directors, may not be less than the fair market value of the Common Stock on the grant date. Options become exercisable over periods not exceeding ten years. The Company’s practice has been to issue new shares upon the exercise of the options.

Stock compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. Vesting requirements vary for directors, officers and key employees. In general, options granted to outside directors vest six months from the date of grant and options granted to officers and key employees straight line vest over a five-year period from the date of grant.

	2013		2012		2011
Weighted Average Fair Value of the Options Granted	$	23.22	$	9.93	$	12.65

The weighted average fair value for these options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:

	2013	2012	2011
Risk-free Interest Rate	0.88% - 2.22%	0.89% - 1.00%	1.55% - 2.82%
Dividend Yield	0.0%	0.0%	0.0%
Volatility Factor	0.51-0.56	0.52-0.64	0.52-0.53
Expected Life in Years	5.0 – 8.0	5.0 – 8.0	7.0 – 8.0

To determine expected volatility, the Company uses historical volatility based on weekly closing prices of its Common Stock and considers currently available information to determine if future volatility is expected to differ over the expected terms of the options granted. The risk-free rate is based on the United States Treasury yield curve at the time of grant for the appropriate term of the options granted. Expected dividends are based on the Company’s history and expectation of dividend payouts. The expected term of stock options is based on vesting schedules, expected exercise patterns and contractual terms.

The following table provides compensation expense information based on the fair value of stock options for the years ended December 31, 2013, 2012 and 2011:

(In thousands)	2013			2012			2011
Stock Compensation Expense	$	1,384		$	1,351		$	1,061
Tax Benefit		(112	)		(136	)		(93	)
Stock Compensation Expense, Net of Tax	$	1,272		$	1,215		$	968

A summary of the Company’s stock option activity and related information for the years ended December 31 is as follows:

(Aggregate intrinsic value in thousands)	2013								2012								2011
	Options			Weighted Average Exercise Price		Aggregate Intrinsic Value			Options			Weighted Average Exercise Price		Aggregate Intrinsic Value			Options			Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding at January 1		1,521,275		$	8.23	$	65,072			1,661,445		$	6.71	$	20,532			1,904,232		$	5.58	$	38,778
Options Granted		69,720		$	42.67	$	581			130,500		$	18.08	$	129			84,938		$	22.44	$	299
Options Exercised		(181,218	)	$	4.25	$	(8,472	)		(270,670	)	$	3.67	$	(4,168	)		(327,725	)	$	4.25	$	(7,112	)
Options Forfeited		—		$	—	$	—			—		$	—	$	—			—		$	—	$	—
Outstanding at December 31		1,409,777		$	10.44	$	57,181			1,521,275		$	8.23	$	16,493			1,661,445		$	6.71	$	31,965
Exercisable at December 31		1,149,532		$	7.81	$	49,648			1,168,459		$	6.72	$	14,431			1,280,744		$	5.47	$	26,237

The aggregate intrinsic value in the preceding table represents the total pretax option holder’s intrinsic value, based on the Company’s closing stock price of Common Stock which would have been received by the option holders had all option holders exercised their options as of that date. The Company’s closing stock price of Common Stock was $51.00, $19.07 and $25.95 as of December 31, 2013, 2012 and 2011, respectively.

The weighted average fair value of options vested during 2013, 2012 and 2011 was $6.20, $6.18 and $3.54, respectively. The total fair value of options that vested during the year amounted to $1.0 million, $1.0 million and $0.6 million for the years ended December 31, 2013, 2012 and 2011, respectively. At December 31, 2013, total compensation costs related to non-vested awards not yet recognized amounts to $3.5 million and will be recognized over a weighted average period of 2.5 years.

The following is a summary of weighted average exercise prices and contractual lives for outstanding and exercisable stock options as of December 31, 2013:

	Outstanding						Exercisable
Exercise Price Range	Shares		Weighted Average Remaining Life in Years		Weighted Average Exercise Price		Shares		Weighted Average Remaining Life in Years		Weighted Average Exercise Price
$  2.68 - $ 3.45		265,404		0.9	$	3.07		265,404		0.9	$	3.07
$  4.84 - $ 7.07		578,364		4.7		5.34		533,109		4.6		5.35
$  9.15 - $10.07		141,975		3.2		9.35		141,975		3.2		9.35
$14.01 - $24.88		372,314		7.5		18.62		209,044		6.9		19.08
$41.40 - $51.93		51,720		9.9		49.49		—		—		—
		1,409,777		4.8		10.44		1,149,532		4.0		7.81

The Company established Incentive Stock Option Plans for the purpose of attracting and retaining executive officers and key employees, and to align management’s interest with those of the shareholders. Generally, the options must be exercised within ten years from the grant date and vest ratably over a five-year period. The exercise price for the options is equal to the share price at the date of grant. At December 31, 2013, the Company had options outstanding for 1,136,733 shares under the plans. At December 31, 2013, there were 531,516 options available for future grant under the plan established in 2011.

The Company established the Directors Stock Option Plans for the purpose of attracting and retaining the services of experienced and knowledgeable outside directors, and to align their interest with those of the shareholders. The options must be exercised within ten years from the grant date. The exercise price for the option is equal to the share price at the date of grant and vests six months from the grant date. At December 31, 2013, the Company had options outstanding for 273,044 shares under the plans. At December 31, 2013, there were 145,555 options available for future grant under the plan established in 2005.

In addition to the options discussed above, the Company has established the Employee Stock Purchase Plan to encourage employees to invest in Astronics Corporation. The plan provides employees the opportunity to invest up to 20% of their cash compensation (up to an annual maximum of approximately $21,250) in Astronics common stock at a price equal to 85% of the fair market value of the Astronics common stock, determined each October 1. Employees are allowed to enroll annually. Employees indicate the number of shares they wish to obtain through the program and their intention to pay for the shares through payroll deductions over the annual cycle of October 1 through September 30. Employees can withdraw anytime during the annual cycle, and all money withheld from the employees pay is returned with interest. If an employee remains enrolled in the program, enough money will have been withheld from the employees’ pay during the year to pay for all the shares that the employee opted for under the program. At December 31, 2013, employees had subscribed to purchase 51,253 shares at $35.16 per share. The weighted average fair value of the options was approximately $9.31, $4.99 and $3.96 for options granted during the year ended December 31, 2013, 2012 and 2011, respectively.

The fair value for the options granted under the Employee Stock Purchase Plan was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:

	2013			2012			2011
Risk-free Interest Rate		0.10	%		0.17	%		0.10	%
Dividend Yield		0.0	%		0.0	%		0.0	%
Volatility Factor		.37			.37			.52
Expected Life in Years		1.0			1.0			1.0

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Acquisitions - Additional Information (Detail) (USD $)	12 Months Ended			0 Months Ended			0 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Jul. 18, 2013 Peco, Inc. [Member]	Jul. 30, 2012 Max-Viz, Inc. [Member]	Dec. 05, 2013 PGA Electronic, s.a. [Member]	Oct. 01, 2013 AeroSat [Member]
Business Acquisition [Line Items]
Percentage of acquired stock				100.00%	100.00%	100.00%
Business acquisition purchase price						$ 32,900,000
Business acquisition purchase price paid in cash						$ 10,700,000
Business acquisition purchase price paid with share						$ 264,168
Stock valued at per share						$ 51.00
Purchase consideration in cash					10,700,000		12,000,000
Contingent purchase consideration							5,000,000
Goodwill and purchased intangible assets deductible for tax purposes period					15 years		15 years
Additional Purchase consideration							53,000,000
Purchase outstanding stock in cash				136,000,000
Revenue prior to acquisition				46.2
Acquisition contingent consideration	$ 159,761,000	$ 10,659,000	$ 23,926,000		$ 8,000,000
Target period of growth					3 years