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 |
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(Unaudited, $ in thousands except per share data) | |||||||||||||||
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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 |
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($ in thousands) | |||||||
(unaudited) | |||||||
12/31/2017 | 12/31/2016 | ||||||
ASSETS |
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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 | |||
|
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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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 |
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(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 |
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(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 |
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(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) |
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Q1 2017 |
Q2 2017 |
Q3 2017 |
Q4 2017 |
Trailing
|
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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 |