Astronics Corporation Reports 2018 Third Quarter Financial Results

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				Nine Months Ended
	9/29/2018		9/30/2017		9/29/2018		9/30/2017
Sales	$	212,674	$	149,636	$	600,339	$	453,146
Cost of products sold		166,354		117,143		467,315		348,186
Gross profit		46,320		32,493		133,024		104,960
Gross margin		21.8%		21.7%		22.2%		23.2%

Selling, general and administrative		27,976		22,099		87,919		65,573
SG&A % of sales		13.2%		14.8%		14.6%		14.5%
Income from operations		18,344		10,394		45,105		39,387
Operating margin		8.6%		6.9%		7.5%		8.7%

Other expense, net of other income		253		311		1,091		931
Interest expense, net		2,511		1,437		7,326		3,750
Income before tax		15,580		8,646		36,688		34,706
Income tax (benefit) expense		(1,419)		2,586		2,370		9,374
Net income	$	16,999	$	6,060	$	34,318	$	25,332
Net income % of sales		8.0%		4.0%		5.7%		5.6%


*Basic earnings per share:	$	0.53	$	0.19	$	1.06	$	0.77
*Diluted earnings per share:	$	0.52	$	0.18	$	1.04	$	0.74

*Weighted average diluted shares outstanding (in thousands)		32,969		33,350		33,035		34,220

Capital expenditures	$	3,921	$	3,965	$	12,416	$	9,715
Depreciation and amortization	$	8,172	$	6,681	$	26,756	$	19,269

*All share quantities and per-share data have been restated to reflect the impact of the fifteen percent Class B stock distribution to shareholders of record on October 12, 2018.


ASTRONICS CORPORATION
CONSOLIDATED BALANCE SHEET DATA
($ in thousands)
	(unaudited)
	9/29/2018		12/31/2017
ASSETS
Cash and cash equivalents	$	4,893	$	17,914
Accounts receivable and uncompleted contracts		189,110		132,633
Inventories		154,870		150,196
Other current assets		17,155		14,586
Property, plant and equipment, net		124,652		125,830
Other long-term assets		21,893		15,659
Intangible assets, net		138,347		153,493
Goodwill		125,136		125,645
Total assets	$	776,056	$	735,956

LIABILITIES AND SHAREHOLDERS' EQUITY
Current maturities of long term debt	$	1,965	$	2,689
Accounts payable and accrued expenses		85,522		80,595
Customer advances and deferred revenue		30,186		19,607
Long-term debt		257,680		269,078
Other liabilities		31,258		34,060
Shareholders' equity		369,445		329,927
Total liabilities and shareholders' equity	$	776,056	$	735,956


SEGMENT DATA
(Unaudited, $ in thousands)

	Three Months Ended				Nine Months Ended
	9/29/2018		9/30/2017		9/29/2018		9/30/2017
Sales
Aerospace	$	169,588	$	128,663	$	500,445	$	395,037
Less inter-segment	(9)		—		(62)		—
Total Aerospace	169,579		128,663		500,383		395,037

Test Systems	43,095		20,973		99,956		58,109
Total consolidated sales	212,674		149,636		600,339		453,146

Operating profit and margins
Aerospace	16,210		13,015		47,525		46,753
	9.6%		10.1%		9.5%		11.8%
Test Systems	5,833		1,093		10,151		2,843
	13.5%		5.2%		10.2%		4.9%
Total operating profit	22,043		14,108		57,676		49,596


Interest expense	2,511		1,437		7,326		3,750
Corporate expenses and other	3,952		4,025		13,662		11,140
Income before taxes	$	15,580	$	8,646	$	36,688	$	34,706


ASTRONICS CORPORATION
CONSOLIDATED CASH FLOWS DATA
(Unaudited, $ in thousands)

	Nine Months Ended
	September 29,			September 30,
	2018			2017
Cash flows from operating activities:
Net income	$	34,318		$	25,332
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	26,756			19,269
Provisions for non-cash losses on inventory and receivables	2,432			943
Stock compensation expense	2,349			2,203
Deferred tax benefit	(1,536		)	(920		)
Other	(507		)	(657		)
Cash flows from changes in operating assets and liabilities:
Accounts receivable	(52,890		)	(1,515		)
Inventories	(15,768		)	(18,480		)
Accounts payable	571			8,267
Accrued expenses	4,977			(5,483		)
Other current assets and liabilities	(1,620		)	(4,556		)
Customer advanced payments and deferred revenue	19,241			(2,336		)
Income taxes	(4,315		)	(883		)
Supplemental retirement and other liabilities	1,351			1,129
Cash provided by operating activities	15,359			22,313
Cash flows from investing activities:
Acquisition of business, net of cash acquired	—			(10,199		)
Capital expenditures	(12,416		)	(9,715		)
Other investing activities	(3,376		)	(2,070		)
Cash used for investing activities	(15,792		)	(21,984		)
Cash flows from financing activities:
Proceeds from long-term debt	35,015			42,000
Payments for long-term debt	(47,116		)	(13,031		)
Purchase of outstanding shares for treasury	—			(32,382		)
Debt acquisition costs	(516		)	—
Proceeds from exercise of stock options	283			349
Cash used for financing activities	(12,334		)	(3,064		)
Effect of exchange rates on cash	(254		)	211
Decrease in cash and cash equivalents	(13,021		)	(2,524		)
Cash and cash equivalents at beginning of period	17,914			17,901
Cash and cash equivalents at end of period	$	4,893		$	15,377


ASTRONICS CORPORATION
SALES BY MARKET
(Unaudited, $ in thousands)

	Three Months Ended					Nine Months Ended					2018 YTD
	9/29/2018		9/30/2017		% change	9/29/2018		9/30/2017		% change	% of Sales
Aerospace Segment
Commercial Transport	$	136,692	$	98,821	38.3%	$	402,539	$	306,898	31.2%	67.1%
Military	16,125		15,365		4.9%	46,410		46,297		0.2%	7.7%
Business Jet	9,289		10,592		(12.3)%	30,291		28,844		5.0%	5.1%
Other	7,473		3,885		92.4%	21,143		12,998		62.7%	3.5%
Aerospace Total	169,579		128,663		31.8%	500,383		395,037		26.7%	83.4%

Test Systems Segment
Semiconductor	33,596		6,632		406.6%	72,061		18,343		292.9%	12.0%
Aerospace & Defense	9,499		14,341		(33.8)%	27,895		39,766		(29.9)%	4.6%
Test Systems Total	43,095		20,973		105.5%	99,956		58,109		72.0%	16.6%

Total	$	212,674	$	149,636	42.1%	$	600,339	$	453,146	32.5%


SALES BY PRODUCT LINE
(Unaudited, $ in thousands)

	Three Months Ended					Nine Months Ended					2018 YTD
	9/29/2018		9/30/2017		% change	9/29/2018		9/30/2017		% change	% of Sales
Aerospace Segment
Electrical Power & Motion	$	78,610	$	63,972	22.9%	$	218,931	$	199,014	10.0%	36.5%
Lighting & Safety	43,481		37,001		17.5%	129,244		122,317		5.7%	21.6%
Avionics	31,059		11,348		173.7%	100,354		31,424		219.4%	16.7%
Systems Certification	2,373		4,454		(46.7)%	12,028		9,405		27.9%	2.0%
Structures	6,583		8,003		(17.7)%	18,683		19,879		(6.0)%	3.1%
Other	7,473		3,885		92.4%	21,143		12,998		62.7%	3.5%
Aerospace Total	169,579		128,663		31.8%	500,383		395,037		26.7%	83.4%

Test Systems Segment	43,095		20,973		105.5%	99,956		58,109		72.0%	16.6%

Total	$	212,674	$	149,636	42.1%	$	600,339	$	453,146	32.5%


ASTRONICS CORPORATION
ORDER AND BACKLOG TREND
(Unaudited, $ in thousands)

	Q4 2017		Q1 2018		Q2 2018		Q3 2018		Trailing Twelve Months
	12/31/2017		3/31/2018		6/30/2018		9/29/2018		9/29/2018
Sales
Aerospace	$	139,566	$	164,600	$	166,204	$	169,579	$	639,949
Test Systems		31,752		14,459		42,402		43,095		131,708
Total Sales	$	171,318	$	179,059	$	208,606	$	212,674	$	771,657

Bookings
Aerospace	$	179,340	$	180,883	$	158,870	$	196,671	$	715,764
Test Systems		57,719		15,280		28,060		37,137		138,196
Total Bookings	$	237,059	$	196,163	$	186,930	$	233,808	$	853,960

Backlog*
Aerospace	$	298,604	$	305,977	$	298,643	$	325,735
Test Systems		95,086		92,635		78,293		72,335
Total Backlog	$	393,690	$	398,612	$	376,936	$	398,070		N/A

Book:Bill Ratio
Aerospace		1.28		1.10		0.96		1.16		1.12
Test Systems		1.82		1.06		0.66		0.86		1.05
Total Book:Bill		1.38		1.10		0.90		1.10		1.11

* During the fourth quarter of 2017, the Telefonix PDT acquisition added backlog of approximately $25.7 million for the Aerospace segment. In the first quarter of 2018, the implementation of new required revenue recognition accounting rules resulted in a reduction to backlog of $8.9 million and $3.3 million for the Aerospace and Test Systems segments, respectively.

« Previous Page 1 | 2 | 3 | 4 | 5 | 6 Next Page »