Astronics Corporation (NASDAQ: ATRO), a leader in
advanced, high performance lighting, electrical power and automated
test systems for the global aerospace and defense industries, today
reported financial results for the first quarter of 2010.
First Quarter Operating
Results
(in millions)
Three Months Ended
Increase/(Decrease)
April 3,2010
April 4,2009
$ % Sales $
46.9 $ 50.0 $ (3.1 ) (6.2
)%
Gross profit $ 11.5 $ 8.5
$ 3.0 35.4 % Gross margin 24.6 % 17.1 %
SG&A $ 5.5 $ 6.1 $
(0.6 ) (9.9 )% SG&A percent to sales 11.6 % 12.1
%
Income from Operations $ 6.1 $
2.5 $ 3.6 146.7 % Operating margin 13.0 % 4.9
%
Net Income $ 3.4 $ 1.4
$ 2.0 142.7 %
Sales in the first quarter of 2010 were $46.9 million, down $3.1
million, or 6.2%, from the prior year period. The 2010 first
quarter included sales for Astronics’ DME subsidiary for the entire
period while the 2009 first quarter included DME sales for a nine
week period. Astronics acquired DME on January 30, 2009. The
Company reported net income in the first quarter of 2010 of $3.4
million, or $0.31 per diluted share, compared with net income of
$1.4 million, or $0.13 per diluted share, in the same period of
last year. Consolidated bookings in the first quarter totaled $54.3
million, an increase of 76% over the first quarter of 2009.
The improved margins were a result of higher margins in our
Aerospace segment as leverage was achieved from increased sales
volumes and reductions to our cost structure, as well as a
favorable sales mix compared with the first quarter of last year.
Also contributing to the margin expansion was reduced amortization
expense on purchased intangibles of $0.5 million and the reduction
of our estimated warranty liability of $0.7 million, both in our
Test Systems segment.
Engineering and development (E&D) costs were relatively flat
at $7.1 million and $7.4 million in the first quarter of 2010 and
2009, respectively.
The $0.6 million decrease in selling, general and administrative
(SG&A) expense in the first quarter of 2010 compared with last
year’s first quarter was primarily due to approximately $0.5
million in higher amortization of purchased intangible assets for
the acquired DME business in 2009.
Peter J. Gundermann, President and Chief Executive Officer of
Astronics, commented “First quarter results provided a strong start
for 2010. Demand was higher than expected, especially for our
in-seat power products, and our aggressive cost cutting over the
last year drove solid margins. We are also encouraged with the
bookings level which gives us increased confidence for the rest of
the year.”
First quarter
Review: Aerospace
Segment (refer to sales by market and segment data in
accompanying tables)
Sales for the Aerospace segment were $43.2 million in the first
quarter of 2010, up $1.4 million, or 3%, compared with the 2009
first quarter. The 19% sales increase to the commercial transport
market was a result of increased volume due in part to the timing
of shipments and in part to a general improvement of the commercial
transport market, as airlines increased their procurement and
installation of in-flight entertainment and in-seat power systems.
Sales to the business jet market were 20% below last year’s first
quarter due to reduced volumes, as the business jet manufacturers’
build rates were lower than last year and demand for our products
decreased. Military sales fell 14% primarily as a result of the
conclusion of shipments of our power conditioning unit for the
Tactical Tomahawk missile in the third quarter of 2009 and lower
shipment rates for lighting products.
Aerospace operating profit for the first quarter of 2010 was
$6.7 million, or 15.6% of sales, compared with $3.4 million, or
8.1% of sales, in the same period last year. Margin improvement was
due to the leverage provided on the increased sales volume, the
effect of cost reductions and favorable product mix.
Bookings for the Aerospace segment were $50.7 million, up
significantly from $28.0 million in the first quarter of 2009.
First quarter
Review: Test Systems
Segment (refer to sales by market and segment data in
accompanying tables)
Sales for the Test Systems segment were $3.7 million in the
first quarter of 2010 compared with $8.2 million in the first
quarter of 2009. The decrease in the Test Systems segment sales
reflected the low rate of new orders received during the past year
and the resulting low backlog level.
Operating profit was $0.2 million, or 5.0% of sales, in the
first quarter of 2010, compared with $0.2 million, or 2.4% of
sales, in the first quarter of 2009. Amortization costs decreased
by $0.5 million compared with the same quarter last year and
savings have been realized through cost reductions. Additionally,
the first quarter 2010 operating profit reflected a reduction in
estimated warranty liability of $0.7 million.
Test Systems bookings in the first quarter were $3.6 million
compared with $2.8 million in the first quarter of 2009.
Balance Sheet
At April 3, 2010, the cash balance was $12.7 million compared
with $14.9 million at December 31, 2009. The Company has
availability of approximately $32 million at April 3, 2010 from its
revolving credit facility.
Cash generated from operations during the first quarter of 2010
was $1.6 million compared with cash generated from operations of
$2.9 million in the 2009 first quarter. Higher net income was
offset by increased investment in net working capital components.
Capital expenditures in the quarter were $0.9 million and payments
made to reduce long-term debt during the quarter were $3.1 million.
The Company expects capital spending in 2010 to be approximately
$2.5 million to $3.5 million.
Outlook
Backlog at April 3, 2010 was $92.8 million, above backlog at the
end of the fourth quarter of 2009 of $85.4 million and down from
backlog at the end of the first quarter of 2009 of $111.7 million.
Approximately $71 million of total backlog is expected to ship by
the end of 2010 and approximately $79 million of total backlog is
expected to ship in the next 12 months.
Mr. Gundermann stated, “We are off to a better start to the year
than we anticipated, but are not ready to increase our revenue
guidance for 2010. Aerospace has had a better start than expected,
while Test Systems is off to a somewhat slower start. We continue
to expect that sales for the year will be in the range of $170 to
$190 million.”
Astronics anticipates that approximately $145 million to $155
million of projected 2010 revenue will be from the Aerospace
segment, while approximately $25 million to $35 million will be
from the Test Systems segment.
First quarter 2010 Webcast and
Conference Call
The Company will host a teleconference at 1:00 p.m. ET today.
During the teleconference, Peter J. Gundermann, President and CEO,
and David C. Burney, 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 dialing (201)
689-8562 and entering conference ID number 348533. The listen-only
audio webcast can be monitored at www.astronics.com. To listen to
the archived call, dial (201) 612-7415 and enter conference ID
number 348533 and account number 3055. The telephonic replay will
be available from 4:00 p.m. on the day of the call until 11:59 p.m.
ET, Wednesday, May 12, 2010. A transcript will also be posted to
the Company’s Web site, once available.
ABOUT ASTRONICS CORPORATION
Astronics Corporation is a leader in advanced, high performance
lighting, electrical power and automated test systems for the
global aerospace and defense industries. Astronics’ strategy is to
develop and maintain positions of technical leadership in its
chosen aerospace and defense markets, to leverage those positions
to grow the amount of content and volume of product it sells to
those markets and to selectively acquire businesses with similar
technical capabilities that could benefit from our leadership
position and strategic direction. Astronics Corporation, and its
wholly-owned subsidiaries, DME Corporation, Astronics Advanced
Electronic Systems Corp. and Luminescent Systems Inc., have 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 Web site at www.Astronics.com.
For more information on Astronics and its products, visit its
Web site at www.Astronics.com.
Safe Harbor Statement
This press 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
expression. Because such statements apply to future events, they
are subject to risks and uncertainties that could cause the actual
results to differ materially from those contemplated by the
statements. Important factors that could cause actual results to
differ materially include the state of the aerospace industry, the
market acceptance of newly developed products, internal production
capabilities, the timing of orders received, the status of customer
certification processes, the demand for and market acceptance of
new or existing aircraft which contain the Company’s products,
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 press 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 4/3/2010
4/4/2009 Sales $ 46,936
$ 50,015 Cost of products sold 35,390
41,485 Gross profit 11,546 8,530
Gross
margin 24.6 % 17.1 %
Selling, general and administrative 5,466
6,065 Income from operations 6,080 2,465
Operating
margin 13.0 % 4.9 % Interest
expense, net 599 424 Other income (38 ) (13 )
Income before tax 5,519 2,054 Income tax expense 2,119
653
Net Income $
3,400 $ 1,401
Basic earnings per share: $ 0.31 $ 0.13 Diluted earnings per share:
$ 0.31 $ 0.13 Weighted average diluted shares outstanding
10,966 10,768 Capital
Expenditures $ 875 $ 968 Depreciation and Amortization $
1,239 $ 1,740
ASTRONICS CORPORATION
CONSOLIDATED BALANCE SHEET
DATA
(Unaudited, $ in thousands)
4/3/2010
12/31/2009
ASSETS:
Cash and cash equivalents $ 12,678 $ 14,949 Accounts
receivable 30,831 30,560 Inventories 31,716 31,909 Other current
assets 4,966 5,075 Property, plant and equipment, net 31,174 31,243
Other long-term assets 3,697 3,763 Deferred taxes long-term 7,916
8,131 Intangible assets 5,453 5,591 Goodwill 7,610
7,493
Total Assets $
136,041 $ 138,714
LIABILITIES AND SHAREHOLDERS'
EQUITY:
Current maturities of long term debt $ 5,245 $ 6,238 Accounts
payable and accrued expenses 20,960 23,398 Long-term debt 36,523
38,538 Other liabilities 9,285 10,427 Shareholders' equity
64,028 60,113
Total Liabilities and
Shareholders' Equity $ 136,041
$ 138,714
ASTRONICS
CORPORATIONSEGMENT
DATA(Unaudited, $ in thousands)
Three Months Ended 4/3/2010
4/4/2009 Sales Aerospace $
43,190 $ 41,818 Test Systems 3,746
8,197
Total Sales $ 46,936 $ 50,015
Operating Profit and Margins Aerospace $ 6,742 $
3,395 15.6 % 8.1 % Test Systems 187 198 5.0 %
2.4 %
Total Operating Profit 6,929 3,593 14.8 % 7.2 %
Corporate Expenses and Other (849 ) (1,128 )
Income from Operations $ 6,080 $ 2,465 13.0 %
4.9 %
ASTRONICS CORPORATION
SALES BY MARKET
(Unaudited, $ in thousands)
Three Months Ended 2010 4/3/2010
4/4/2009
%change
YTD % Aerospace Segment Commercial Transport $ 27,445
$ 23,006 19 % 58 % Military 8,398 10,486 -20 % 18 % Business Jet
5,592 6,522 -14 % 12 % FAA/Airport 1,755 1,804
-3 % 4 % Aerospace Total
$ 43,190 $
41,818 3 % 92 % Test
Systems Segment
Military
$ 3,746 $ 8,197
-54 % 8 % Total $
46,936 $ 50,015 -6
% 100 % ASTRONICS CORPORATION
SALES BY PRODUCT
(Unaudited, $ in thousands)
Three Months Ended
2010 4/3/2010 4/4/2009
%change
YTD % Aerospace Segment Cabin
Electronics
$
21,496
$ 16,502 30 % 46 % Aircraft Lighting
15,733
18,051 -13 % 33 % Airframe Power
4,206
5,461 -23 % 9 % Airfield Lighting
1,755
1,804 -3 % 4 % Aerospace Total
$
43,190
$ 41,818 3 % 92 %
Test Systems Segment
$
3,746
$ 8,197 -54 % 8
% Total
$
46,936
$ 50,015 -6 % 100
% ASTRONICS CORPORATION
ORDER AND BACKLOG TREND
(Unaudited, $ in thousands)
Q12009*
Q22009
Q32009
Q42009
Q12010
4/4/2009
7/4/2009
10/3/2009
12/31/2009
4/3/2010
Sales Aerospace $ 41,818 $ 38,216 $ 38,958 $ 36,613 $ 43,190
Test Systems 8,197 8,808 9,628
8,963 3,746
Total Sales $
50,015 $
47,024 $
48,586
$
45,576 $
46,936 Bookings
Aerospace $ 28,016 $ 34,605 $ 40,135 $ 29,270 $ 50,668 Test Systems
2,798 6,168 3,932
743 3,634
Total Bookings $
30,814
$
40,773 $
44,067 $
30,013 $
54,302 Backlog
Aerospace $ 85,418 $ 81,807 $ 82,983 $ 75,639 $ 83,116 Test Systems
26,311 23,671 17,974
9,755 9,644
Total Backlog $
111,729 $
105,478 $
100,957
$
85,394 $
92,760
Book:Bill Aerospace 0.67 0.91 1.03 0.80 1.17 Test Systems
0.34 0.70 0.41
0.08 0.97
Total Book:Bill 0.62
0.87 0.91
0.66 1.16
* On January 30, 2009, Astronics acquired DME Corporation,
including backlog of $10,172 for Aerospace and $31,710 for Test
Systems.
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