Astronics Corporation Reports 2017 Fourth Quarter and Full Year Financial Results

Outlook

As previously reported, consolidated sales in 2018 are expected to be in the range of $745 million to $815 million. Approximately $630 million to $680 million of revenue is expected from the Aerospace segment. Test Systems segment revenue for 2018 is expected to be approximately $115 million to $135 million.

Consolidated backlog at December 31, 2017 was $393.7 million, a record level, of which approximately $346.7 million is expected to ship in 2018.

Mr. Gundermann commented, “We believe 2018 will be an excellent year for our company, with many of the recent headwinds we have faced turning to tailwinds. The mid-point of our consolidated revenue range calls for growth of 25%, with our Aerospace segment being up about 22% and our Test segment being up 39%. We are pursuing a number of high-value awards that will heavily influence our plans, which we will refine as soon as possible.”

The effective tax rate for 2018 is expected to be approximately 18% to 22%.

Capital equipment spending in 2018 is expected to be in the range of $24 million to $28 million. E&D spending in 2018 is expected to be in the range of $110 million to $115 million including the Acquired Businesses, which represents approximately 14.4% of sales at the mid-point of the expected sales range.

Fourth Quarter 2017 Webcast and Conference Call

The Company will host a teleconference today at 5:00 p.m. ET. During the teleconference, Peter J. Gundermann, President and CEO, and David C. Burney, Executive Vice President and CFO, will review the financial and operating results for the period and discuss Astronics’ corporate strategy and outlook. A question-and-answer session will follow.

The Astronics conference call can be accessed by calling (201) 493-6784. The listen-only audio webcast can be monitored at www.astronics.com. To listen to the archived call, dial (412) 317-6671 and enter replay pin number 13676642. The telephonic replay will be available from 8:00 p.m. ET on the day of the call through Monday, March 5, 2018. A transcript will also be posted to the Company’s website once available.

About Astronics Corporation

Astronics Corporation (NASDAQ: ATRO) serves the world’s aerospace, defense and semiconductor industries with proven, innovative technology solutions. Astronics works side-by-side with customers, integrating its array of power, connectivity, lighting, structures, interiors, and test technologies to solve complex challenges. For 50 years, Astronics has delivered creative, customer-focused solutions with exceptional responsiveness. Today, global airframe manufacturers, airlines, military branches, completion centers and Fortune 500 manufacturing organizations rely on the collaborative spirit and innovation of Astronics.

For more information on Astronics and its solutions, visit Astronics.com.

Safe Harbor Statement

This news release contains forward-looking statements as defined by the Securities Exchange Act of 1934. One can identify these forward-looking statements by the use of the words “expect,” “anticipate,” “plan,” “may,” “will,” “estimate” or other similar expressions. Because such statements apply to future events, they are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated by the statements. Important factors that could cause actual results to differ materially from what may be stated here include the state of the aerospace, defense, consumer electronics and semiconductor industries, the market acceptance of newly developed products, internal production capabilities, the timing of orders received, the status of customer certification processes and delivery schedules, the demand for and market acceptance of new or existing aircraft which contain the Company’s products, the need for new and advanced test and simulation equipment, customer preferences and other factors which are described in filings by Astronics with the Securities and Exchange Commission. The Company assumes no obligation to update forward-looking information in this news release whether to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results, financial conditions or prospects, or otherwise.

FINANCIAL TABLES FOLLOW

 
ASTRONICS CORPORATION

CONSOLIDATED INCOME STATEMENT DATA

(Unaudited, $ in thousands except per share data)
 

 

Three Months Ended Year Ended
12/31/2017   12/31/2016   12/31/2017   12/31/2016
Sales $ 171,318   $ 154,068 $ 624,464   $ 633,123
Cost of products sold 139,165     117,582     487,351     473,656  
Gross profit 32,153 36,486 137,113 159,467
Gross margin 18.8 % 23.7 % 22.0 % 25.2 %
 
Impairment Loss 16,237 16,237
Selling, general and administrative 24,012 21,082 90,516 86,328
SG&A % of sales 14.0 %   13.7 %   14.5 %   13.6 %
(Loss) Income from operations (8,096 ) 15,404 30,360 73,139
Operating margin (4.7 )% 10.0 % 4.9 % 11.6 %
 
Interest expense, net 1,619     1,108     5,369     4,354  
(Loss) Income before tax (9,715 ) 14,296 24,991 68,785
Income tax expense (benefit) (4,062 )   4,411     5,312     20,361  
Net (Loss) income $ (5,653 )   $ 9,885     $ 19,679     $ 48,424  
Net (Loss) income % of sales (3.3 )% 6.4 % 3.2 % 7.6 %
 
 
Basic earnings per share: $ (0.20 ) $ 0.34 $ 0.69 $ 1.66
Diluted earnings per share: $ (0.20 ) $ 0.33 $ 0.67 $ 1.61
 
Weighted average diluted shares

outstanding (in thousands)

28,015 29,742 29,320 30,032
 
Capital expenditures $ 3,763 $ 3,168 $ 13,478 13,037
Depreciation and amortization $ 7,794 $ 6,333 $ 27,063 $ 25,790
 
 
ASTRONICS CORPORATION

CONSOLIDATED BALANCE SHEET DATA

($ in thousands)
  (unaudited)  
12/31/2017   12/31/2016

ASSETS

Cash and cash equivalents $ 17,914 $ 17,901
Accounts receivable and uncompleted contracts 132,633 109,415
Inventories 150,196 116,597
Other current assets 14,586 11,160
Property, plant and equipment, net 125,830 122,812
Other long-term assets 15,659 13,149
Intangible assets, net 153,493 98,103
Goodwill 125,645   115,207
Total assets $ 735,956     $ 604,344

 

LIABILITIES AND SHAREHOLDERS' EQUITY

Current maturities of long term debt $ 2,689 $ 2,636
Accounts payable and accrued expenses 80,595 60,756
Customer advances and deferred revenue 19,607 23,168
Long-term debt 269,078 145,484
Other liabilities 34,060 34,851
Shareholders' equity 329,927   337,449
Total liabilities and shareholders' equity $ 735,956     $ 604,344
 
ASTRONICS CORPORATION

Segment Data

 
(Unaudited, $ in thousands)
  Three Months Ended Year Ended
12/31/2017   12/31/2016   12/31/2017   12/31/2016
Sales      
Aerospace $ 139,687 $ 128,052 $ 534,724 $ 534,408
Less Inter-segment (121 )       (121 )   (367 )
Total Aerospace 139,566 128,052 534,603 534,041
 
Total Test Systems 31,752     26,016     89,861     99,082  
Total consolidated sales 171,318     154,068     624,464     633,123  
 
Operating (loss) profit and margins
Aerospace (7,865 ) 16,867 38,888 77,966
(5.6 )% 13.2 % 7.3 % 14.6 %
Test Systems 4,516 1,983 7,359 8,507
14.2 %   7.6 %   8.2 %   8.6 %
Total operating (loss) profit (3,349 ) 18,850 46,247 86,473
 
 
Interest expense 1,619 1,108 5,369 4,354
Corporate expenses and other 4,747     3,446     15,887     13,334  
(Loss) Income before taxes $ (9,715 )   $ 14,296     $ 24,991     $ 68,785  
 
 
ASTRONICS CORPORATION

SALES BY MARKET

(Unaudited, $ in thousands)
     
Three Months Ended Year Ended
12/31/2017   12/31/2016   % change 12/31/2017   12/31/2016   % change 2017 YTD
Aerospace Segment
Commercial Transport $ 107,624 $ 104,378 3.1 % $ 414,523 $ 435,552 -4.8 % 66.4 %
Military 14,974 14,624 2.4 % 61,270 54,556 12.3 % 9.8 %
Business Jet 12,454 5,042 147.0 % 41,298 25,407 62.5 % 6.6 %
Other 4,514   4,008   12.6 % 17,512   18,526   -5.5 %   2.8 %
Aerospace Total 139,566 128,052 9.0 % 534,603 534,041 0.1 % 85.6 %
 
Test Systems Segment
Semiconductor 13,655 4,076 235.0 % 31,999 37,939 -15.7 % 5.1 %
Aerospace & Defense 18,097   21,940   -17.5 % 57,862   61,143   -5.4 %   9.3 %
Test Systems Total 31,752   26,016   22.0 % 89,861   99,082   -9.3 %   14.4 %
 
Total $ 171,318     $ 154,068     11.2 % $ 624,464   $ 633,123   -1.4 %
 
ASTRONICS CORPORATION

SALES BY PRODUCT LINE

(Unaudited, $ in thousands)
   
Three Months Ended Year Ended
12/31/2017   12/31/2016   % change 12/31/2017   12/31/2016   % change 2017 YTD
 
Aerospace Segment
Electrical Power & Motion $ 65,273 $ 69,250 -5.7 % $ 264,286 $ 288,465 -8.4 % 42.3 %
Lighting & Safety 36,346 35,351 2.8 % 158,663 156,871 1.1 % 25.4 %
Avionics 22,536 10,077 123.6 % 53,960 32,761 64.7 % 8.6 %
Systems Certification 4,927 3,954 24.6 % 14,333 16,531 -13.3 % 2.3 %
Structures 5,970 5,412 10.3 % 25,849 20,887 23.8 % 4.1 %
Other 4,514   4,008   12.6 % 17,512   18,526   -5.5 %   2.8 %
Aerospace Total 139,566 128,052 9.0 % 534,603 534,041 0.1 % 85.6 %
 
Test Systems 31,752   26,016   22.0 % 89,861   99,082   -9.3 %   14.4 %
 
Total $ 171,318   $ 154,068     11.2 % $ 624,464   $ 633,123   -1.4 %
 
 

ASTRONICS CORPORATION

ORDER AND BACKLOG TREND

(Unaudited, $ in thousands)

 
Q1
2017
 
Q2
2017
 
Q3
2017
 

Q4

2017

 

Trailing
Twelve
Months

04/01/2017   7/1/2017   9/30/2017   12/31/2017   12/31/2017
Sales
Aerospace $ 136,827 $ 129,547 $ 128,663 $ 139,566 $ 534,603
Test Systems 15,569   21,567   20,973   31,752   89,861
Total Sales $ 152,396   $ 151,114   $ 149,636   $ 171,318   $ 624,464
 
Bookings
Aerospace $ 122,836 $ 134,822 $ 146,178 $ 179,340 $ 583,176
Test Systems 24,236   23,944   40,161   57,719   146,060
Total Bookings $ 147,072   $ 158,766   $ 186,339   $ 237,059   $ 729,236
 
Backlog*
Aerospace $ 205,155 $ 215,647 $ 233,162 $ 298,604
Test Systems 47,554   49,931   69,119   95,086    
Total Backlog $ 252,709   $ 265,578   $ 302,281   $ 393,690   N/A
 
Book:Bill Ratio
Aerospace 0.90 1.04 1.14 1.28 1.09
Test Systems 1.56   1.11   1.91   1.82   1.63
Total Book:Bill 0.97   1.05   1.25   1.38   1.17

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