Astronics Corporation (NASDAQ:ATRO), a leading supplier of products
to the global aerospace, defense, and semiconductor industries,
today reported financial results for the three months ended April
2, 2016. Earnings per share for 2015 are adjusted for the 3
for 20 (15%) distribution of Class B Stock for shareholders of
record on October 8, 2015.
|
Three Months Ended |
|
|
April 2, 2016 |
|
April 4, 2015 |
% Change |
|
|
|
|
|
|
Sales |
$ |
|
159,530 |
|
$ |
|
161,638 |
|
|
-1.3 |
% |
Gross
profit |
$ |
|
39,483 |
|
$ |
|
40,162 |
|
|
-1.7 |
% |
Gross margin |
|
|
24.7 |
% |
|
|
24.8 |
% |
|
SG&A |
$ |
|
21,884 |
|
$ |
|
22,619 |
|
|
-3.2 |
% |
SG&A percent of sales |
|
|
13.7 |
% |
|
|
14.0 |
% |
|
Income from
Operations |
$ |
|
17,599 |
|
$ |
|
17,543 |
|
|
0.3 |
% |
Operating margin |
|
|
11.0 |
% |
|
|
10.9 |
% |
|
Net
Income |
$ |
|
11,485 |
|
$ |
|
10,683 |
|
|
7.5 |
% |
Net Income % |
|
|
7.2 |
% |
|
|
6.6 |
% |
|
|
Peter J. Gundermann, President and Chief Executive Officer,
commented, “The first quarter was a decent start to the year for
Astronics, although we had some challenges with our Avionics
product line which suffered a substantial revenue decline from last
year. Otherwise, our Aerospace segment had a pretty good
quarter and our Test segment benefitted from the many improvements
implemented in the last year, including considerable cost
cutting. We expect to improve our Avionics situation going
forward, especially in the second half of the year, and we believe
we are well-positioned for the remainder of 2016.”
Consolidated Review
First Quarter 2016 Results
Consolidated sales for the first quarter of 2016 were $159.5
million, down 1.3% over the same period last year. Aerospace
sales decreased 2.8% to $138.3 million, while Test Systems’ sales
were up 10% to $21.2 million. The 2015 first quarter
was a very strong quarter for the Aerospace segment in particular,
with all-time record sales and earnings.
Consolidated gross margin held relatively steady on lower volume
at 24.7% compared with 24.8% in the prior-year period. The
solid margin performance was the result of improved operational
efficiencies as well as product mix offset by $1.1 million higher
Engineering and Development (“E&D”) costs. E&D was
$23.3 million, up from $22.2 million in the 2015 first
quarter. As a percent of sales, E&D was 14.6% and 13.8%
in the first quarters of 2016 and 2015, respectively.
Selling, general and administrative (“SG&A”) expenses
declined to $21.9 million, or 13.7% of sales, compared with $22.6
million, or 14.0% of sales, in the same period last year.
Operating income improved modestly to $17.6 million, or 11.0%
of sales, as operational improvements in the Test segment more than
offset the decline in Aerospace.
The effective tax rate for the first quarter was 30.4%, compared
with 34.4% in the first quarter of 2015. The tax rate in the
first quarter of 2016 was favorably impacted by the inclusion of
the federal research and development tax credit due to its
permanent reinstatement in the fourth quarter of 2015.
Net income for the 2016 first quarter grew 7.5% to $11.5 million
compared with the prior-year period. On a per diluted share
basis, earnings were $0.44, up from $0.41 in the prior-year
period.
On February 24, 2016, Astronics' Board of Directors announced a
$50 million share repurchase program. During the first
quarter, the Company repurchased approximately 129,000 shares under
the repurchase program, at an aggregate cost of approximately $4.3
million.
Aerospace Segment Review (refer to sales by
market and segment data in accompanying tables)
Aerospace First Quarter 2016 Results
Aerospace segment sales decreased by $4.0 million, or 2.8%, to
$138.3 million when compared with the prior year’s first
quarter.
Electrical Power & Motion sales grew $5.8 million, or 8.4%,
largely driven by higher sales of in-seat power products, which
were up 7.3%. This increase was offset by a $9.9 million
decline in Avionics products, which was largely due to lower sales
of satellite antenna systems.
Aerospace operating profit was $18.7 million, or 13.5% of sales,
compared with $23.4 million, or 16.4% of sales in the prior year’s
first quarter. Compared with the prior year, operating
margins were negatively affected by lower sales volume in the
Avionics product line as well an increase in E&D expenses of
$0.9 million to $20.3 million.
Mr. Gundermann commented, “Aerospace performed well in the
quarter, but was colored by challenges with our antenna business,
where we saw reduced sales of approximately $8.5 million as well as
heavy investment in next generation technology. The
combination dropped our operating income by about $4.5 million
relative to the first quarter of 2015. We expect this product
line's sales to turn around in the second half and margin to
strengthen on stabilized E&D investments and higher
volume.”
Aerospace orders were $140.4 million, relatively unchanged from
$141.1 million in the 2015 first quarter, but improved 15% from the
trailing fourth quarter of 2015. The book to bill ratio for
the quarter was 1.02x. Backlog was $214.8 million at the end
of the first quarter of 2016.
Test Systems Segment Review (refer to sales by
market and segment data in accompanying tables)
Test Systems First Quarter 2016 Results
Test Systems segment sales increased $1.9 million to $21.2
million when compared with the first quarter of 2015.
Semiconductor test sales were up $2.4 million to $7.1 million, more
than offsetting the $0.5 million, or 3%, decline in Aerospace &
Defense test sales.
Operating profit in the first quarter of 2016 was $2.2 million,
or 10.4% of sales, compared with an operating loss of $2.2 million
in the first quarter of 2015. Operating margins were
positively affected by higher volume and initiatives to improve
operating efficiencies. E&D costs were approximately $3.0
million in the first quarter of 2016 and $2.8 million in the
prior-year period.
Mr. Gundermann said, “Our Test segment is performing quite well
given the current circumstances of our Semiconductor business and
improving environment for the Aerospace & Defense
markets. While segment sales will be lower in 2016, we are
benefitting from cost reductions and operational changes that are
bearing fruit. At the same time, we continue to invest in a
wide range of development programs which we believe will provide
for a promising future. We are already looking forward to an
exciting 2017 for this business."
Orders for the Test Systems segment in the quarter were $21.5
million, up $4.7 million, or 27.7%, over the prior year period and
up $8.6 million, or 67.2%, over the trailing fourth quarter of
2015. The book to bill ratio for the quarter was 1.01x.
Backlog was $62.0 million at the end of the first quarter 2016.
Forecast
Consolidated sales in 2016 are forecasted to be in the range of
$665 million to $710 million. Approximately $572 million to $600
million of revenue is expected from the Aerospace segment, which
represents a decline in the high end of our previous range of $16
million. Expectations for Test Systems segment revenue in
2016 remains relatively unchanged at approximately $93 million to
$110 million.
Consolidated backlog at April 2, 2016 was $276.8 million, of
which $229.8 million is expected to ship in 2016.
The effective tax rate for 2016 is expected to be approximately
29% to 32%.
Capital equipment spending in 2016 is planned to be in the range
of $20 million to $25 million. E&D costs are expected to
be similar to 2015.
Mr. Gundermann concluded, “We lowered the high end of our
original revenue guidance slightly for the year, reflecting the
weakness in the Avionics product line. Current trends suggest
that our Test business could achieve the upper end of its
forecasted range while the Aerospace segment may be in the lower
part of its forecasted range. We continue to find good
opportunities in our markets, and we continue to make the
investments necessary to bring those opportunities to bear.
We remain excited about the future, and where our various pursuits
will take us.”
First Quarter 2016 Webcast and Conference
Call
The Company will host a teleconference today at 11:00 a.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)
689-8562. The listen-only audio webcast can be monitored at
www.astronics.com. To listen to the archived call, dial (858)
384-5517 and enter conference ID number 13635227. The
telephonic replay will be available from 2:00 p.m. on the day of
the call through Wednesday, May 11, 2016. A transcript will
also be posted to the Company’s Web site once available.
About Astronics Corporation Astronics
Corporation (NASDAQ:ATRO) is a leading supplier of products to the
global aerospace, defense, electronics and semiconductor
industries. Astronics’ products and services include
advanced, high-performance electrical power generation,
distribution and motion systems, lighting & safety systems,
avionics products, aircraft structures, systems certification and
automated test systems. Astronics’ strategy is to increase
its value by developing technologies and capabilities, either
internally or through acquisition, and using those capabilities to
provide innovative solutions to its targeted markets and other
markets where its technology can be beneficial. Astronics
Corporation, through its wholly-owned subsidiaries, has a
reputation for high-quality designs, exceptional responsiveness,
strong brand recognition and best-in-class manufacturing practices.
The Company routinely posts news and other important
information on its website at www.astronics.com
For more information on Astronics and its products,
visit its Web site at www.astronics.com.
Safe Harbor StatementThis 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 |
|
4/2/2016 |
4/4/2015 |
Sales |
$ |
159,530 |
|
$ |
161,638 |
|
Cost of products
sold |
|
120,047 |
|
|
121,476 |
|
Gross profit |
|
39,483 |
|
|
40,162 |
|
Gross margin |
|
24.7 |
% |
|
24.8 |
% |
|
|
|
Selling, general and
administrative |
|
21,884 |
|
|
22,619 |
|
SG&A % of
sales |
|
13.7 |
% |
|
14.0 |
% |
Income from
operations |
|
17,599 |
|
|
17,543 |
|
Operating
margin |
|
11.0 |
% |
|
10.9 |
% |
|
|
|
Interest expense,
net |
|
1,087 |
|
|
1,246 |
|
Income before tax |
|
16,512 |
|
|
16,297 |
|
Income tax expense |
|
5,027 |
|
|
5,614 |
|
Net
income |
$ |
11,485 |
|
$ |
10,683 |
|
Net income % of
sales |
|
7.2 |
% |
|
6.6 |
% |
|
|
|
|
|
|
*Basic earnings per
share: |
$ |
0.45 |
|
$ |
0.42 |
|
*Diluted earnings per
share: |
$ |
0.44 |
|
$ |
0.41 |
|
|
|
|
*Weighted average
diluted shares outstanding (in thousands) |
|
26,399 |
|
|
26,227 |
|
|
|
|
Capital
expenditures |
$ |
2,450 |
|
$ |
7,059 |
|
Depreciation and
amortization |
$ |
6,546 |
|
$ |
6,127 |
|
|
*All 2015 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 8, 2015.
ASTRONICS CORPORATION |
CONSOLIDATED BALANCE SHEETS |
(Unaudited, $ in thousands) |
|
|
|
4/2/2016 |
|
12/31/2015 |
ASSETS |
|
|
|
|
Cash and cash
equivalents |
$ |
15,791 |
$ |
18,561 |
Accounts receivable and
uncompleted contracts |
|
106,177 |
|
95,277 |
Inventories |
|
118,666 |
|
115,467 |
Other current
assets |
|
16,403 |
|
20,662 |
Property, plant and
equipment, net |
|
123,971 |
|
124,742 |
Other long-term
assets |
|
11,438 |
|
10,889 |
Intangible assets,
net |
|
105,633 |
|
108,276 |
Goodwill |
|
115,742 |
|
115,369 |
Total assets |
$ |
613,821 |
$ |
609,243 |
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
|
Current maturities of
long term debt |
$ |
2,664 |
$ |
2,579 |
Accounts payable and
accrued expenses |
|
57,605 |
|
62,896 |
Customer advances and
deferred revenue |
|
34,878 |
|
38,757 |
Long-term debt |
|
169,682 |
|
167,210 |
Other liabilities |
|
38,019 |
|
37,576 |
Shareholders'
equity |
|
310,973 |
|
300,225 |
Total liabilities and
shareholders' equity |
$ |
613,821 |
$ |
609,243 |
|
ASTRONICS CORPORATION |
SEGMENT DATA |
(Unaudited, $ in thousands) |
|
|
Three Months Ended |
|
|
4/2/2016 |
|
4/4/2015 |
Sales |
|
|
|
|
Aerospace |
$ |
|
138,649 |
|
$ |
|
142,352 |
|
Less Inter-segment |
|
|
(340 |
) |
|
|
- |
|
Total Aerospace |
|
|
138,309 |
|
|
|
142,352 |
|
|
|
|
|
|
Test Systems |
|
|
21,221 |
|
|
|
19,341 |
|
Less Inter-segment |
|
|
- |
|
|
|
(55 |
) |
Total Test Systems |
|
|
21,221 |
|
|
|
19,286 |
|
Total
sales |
|
|
159,530 |
|
|
|
161,638 |
|
|
|
|
|
|
Operating profit and
margins |
|
|
|
|
Aerospace |
|
|
18,691 |
|
|
|
23,402 |
|
|
|
|
13.5 |
% |
|
|
16.4 |
% |
Test Systems |
|
|
2,210 |
|
|
|
(2,225 |
) |
|
|
|
10.4 |
% |
|
|
-11.5 |
% |
Total operating
profit |
|
|
20,901 |
|
|
|
21,177 |
|
|
|
|
13.1 |
% |
|
|
13.1 |
% |
|
|
|
|
|
Interest expense |
|
|
1,087 |
|
|
|
1,246 |
|
Corporate expenses and
other |
|
|
3,302 |
|
|
|
3,634 |
|
Income before
taxes |
$ |
|
16,512 |
|
$ |
|
16,297 |
|
|
|
|
10.4 |
% |
|
|
10.1 |
% |
|
ASTRONICS CORPORATION |
SALES BY MARKET |
(Unaudited, $ in thousands) |
|
Three Months Ended |
|
4/2/2016 |
4/4/2015 |
% change |
|
2016 YTD |
|
|
|
|
|
|
Aerospace
Segment |
|
|
|
|
|
Commercial Transport |
$ |
113,396 |
|
$ |
120,194 |
|
|
-5.7 |
% |
|
|
71.1 |
% |
Military |
|
12,280 |
|
|
9,258 |
|
|
32.6 |
% |
|
|
7.7 |
% |
Business Jet |
|
6,525 |
|
|
8,092 |
|
|
-19.4 |
% |
|
|
4.1 |
% |
Other |
|
6,108 |
|
|
4,808 |
|
|
27.0 |
% |
|
|
3.8 |
% |
Aerospace
Total |
|
138,309 |
|
|
142,352 |
|
|
-2.8 |
% |
|
|
86.7 |
% |
|
|
|
|
|
|
Test Systems
Segment |
|
|
|
|
|
Semiconductor |
|
7,137 |
|
|
4,752 |
|
|
50.2 |
% |
|
|
4.5 |
% |
Aerospace & Defense |
|
14,084 |
|
|
14,534 |
|
|
-3.1 |
% |
|
|
8.8 |
% |
|
|
21,221 |
|
|
19,286 |
|
|
10.0 |
% |
|
|
13.3 |
% |
|
|
|
|
|
|
Total |
$ |
159,530 |
|
$ |
161,638 |
|
|
-1.3 |
% |
|
|
100.0 |
% |
|
ASTRONICS CORPORATION |
SALES BY PRODUCT LINE |
(Unaudited, $ in thousands) |
|
Three Months Ended |
|
4/2/2016 |
4/4/2015 |
% change |
|
2016 YTD |
|
|
|
|
|
|
Aerospace
Segment |
|
|
|
|
|
Electrical Power & Motion |
$ |
75,392 |
|
$ |
69,570 |
|
|
8.4 |
% |
|
|
47.3 |
% |
Lighting & Safety |
|
40,566 |
|
|
42,077 |
|
|
-3.6 |
% |
|
|
25.4 |
% |
Avionics |
|
7,474 |
|
|
17,367 |
|
|
-57.0 |
% |
|
|
4.7 |
% |
Systems Certification |
|
4,606 |
|
|
4,574 |
|
|
0.7 |
% |
|
|
2.9 |
% |
Structures |
|
4,163 |
|
|
3,956 |
|
|
5.2 |
% |
|
|
2.6 |
% |
Other |
|
6,108 |
|
|
4,808 |
|
|
27.0 |
% |
|
|
3.8 |
% |
Aerospace
Total |
|
138,309 |
|
|
142,352 |
|
|
-2.8 |
% |
|
|
86.7 |
% |
|
|
|
|
|
|
Test
Systems |
|
21,221 |
|
|
19,286 |
|
|
10.0 |
% |
|
|
13.3 |
% |
|
|
|
|
|
|
Total |
$ |
159,530 |
|
$ |
161,638 |
|
|
-1.3 |
% |
|
|
100.0 |
% |
|
ASTRONICS CORPORATIONORDER AND
BACKLOG TREND(Unaudited, $ in thousands) |
|
|
|
Q2
2015 |
|
Q3
2015 |
|
Q4 2015 |
|
Q1
2016 |
|
TrailingTwelveMonths |
|
|
7/4/2015 |
|
10/3/2015 |
|
12/31/2015 |
|
4/2/2016 |
|
Sales |
|
|
|
|
|
|
|
|
|
|
Aerospace |
$ |
132,170 |
$ |
138,728 |
$ |
136,488 |
$ |
138,309 |
$ |
545,695 |
Test Systems |
|
40,986 |
|
61,417 |
|
20,852 |
|
21,221 |
|
144,476 |
Total
Sales |
$ |
173,156 |
$ |
200,145 |
$ |
157,340 |
$ |
159,530 |
$ |
690,171 |
|
|
|
|
|
|
|
|
|
|
|
Bookings |
|
|
|
|
|
|
|
|
|
|
Aerospace |
$ |
134,478 |
$ |
129,807 |
$ |
121,796 |
$ |
140,427 |
$ |
526,508 |
Test Systems |
|
12,242 |
|
15,352 |
|
12,860 |
|
21,503 |
|
61,957 |
Total
Bookings |
$ |
146,720 |
$ |
145,159 |
$ |
134,656 |
$ |
161,930 |
$ |
588,465 |
|
|
|
|
|
|
|
|
|
|
|
Backlog |
|
|
|
|
|
|
|
|
|
|
Aerospace |
$ |
236,264 |
$ |
227,345 |
$ |
212,651 |
$ |
214,769 |
|
|
Test Systems |
|
115,770 |
|
69,705 |
|
61,713 |
|
61,995 |
|
|
Total
Backlog |
$ |
352,034 |
$ |
297,050 |
$ |
274,364 |
$ |
276,764 |
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
Book:Bill
Ratio |
|
|
|
|
|
|
|
|
|
|
Aerospace |
|
1.02 |
|
0.94 |
|
0.89 |
|
1.02 |
|
0.96 |
Test Systems |
|
0.30 |
|
0.25 |
|
0.62 |
|
1.01 |
|
0.43 |
Total
Book:Bill |
|
0.85 |
|
0.73 |
|
0.86 |
|
1.02 |
|
0.85 |
For more information, contact:
Company:
David C. Burney, Chief Financial Officer
Phone: (716) 805-1599, ext. 159
Email: david.burney@astronics.com
Investor Relations:
Deborah K. Pawlowski, Kei Advisors LLC
Phone: (716) 843-3908
Email: dpawlowski@keiadvisors.com
Astronics (NASDAQ:ATRO)
Historical Stock Chart
From Aug 2024 to Sep 2024
Astronics (NASDAQ:ATRO)
Historical Stock Chart
From Sep 2023 to Sep 2024