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 three and six months ended July
2, 2011.
Three Months
Ended Six Months Ended
July 2,
July 3,
%
July 2,
July 3,
%
2011
2010
Change
2011
2010
Change
Sales $ 55,475 $ 47,089 17.8 %
$ 110,603 $ 94,025 17.6 %
Gross
profit $ 14,386 $ 10,685 34.6 % $ 28,892 $ 22,231 30.0 % Gross
margin 25.9 % 22.7 % 26.1 % 23.6 %
SG&A $ 7,144 $ 6,076
17.6 % $ 13,489 $ 11,504 17.3 % SG&A percent to sales 12.9 %
12.9 % 12.2 % 12.2 %
Income from Operations $ 7,242 $ 4,609
57.1 % $ 15,403 $ 10,727 43.6 % Operating margin % 13.1 % 9.8 %
13.9 % 11.4 %
Net Income $ 4,548 $ 2,430 87.2 % $ 9,757 $
5,830 67.4 % Net Income % 8.2 % 5.2 % 8.8 % 6.2 %
Peter J. Gundermann, President and Chief Executive Officer,
commented, “The second quarter was another very good quarter for
our company. Demand was strong, resulting in record quarterly
revenue of $55.5 million and second best quarterly bookings of
$58.5 million. Margins were solid, though down somewhat from the
preceding first quarter due primarily to increased costs relating
to legal proceedings.
Sales in the second quarter of 2011 were $55.5 million, up $8.4
million, or 17.8%, from the prior year second quarter. Aerospace
sales, which represented approximately 94% of total second quarter
sales, increased 19.1% to $51.9 million over the prior year period.
Test Systems sales remained flat at $3.5 million when compared with
last year’s second quarter. Sales for the first six months of 2011
were $110.6 million, up $16.6 million, or 17.6%, from the same
period last year. Aerospace sales, which represented approximately
92% of first half total sales, increased 17.7% to $102.1 million
over the prior year period. Test Systems sales were up
approximately $1.3 million or 18.1% to $8.5 million when compared
with $7.2 million in the first six months of 2010.
Net income in the second quarter of 2011 was $4.5 million, or
$0.39 per diluted share, compared with net income of $2.4 million,
or $0.22 per diluted share, in the same period of last year.
Year-to-date net income for the first six months of 2011 was $9.8
million, or $0.84 per diluted share, compared with net income of
$5.8 million, or $0.52 per diluted share, in the same period of
last year.
Consolidated gross margin and operating margin in the 2011
second quarter and first six months improved over the prior year
periods reflecting the margin added by increased sales offset
partially by increases in both engineering and development costs
and selling, general and administrative costs.
Engineering and development (E&D) costs were $8.8 million in
the 2011 second quarter compared with $7.0 million in last year’s
second quarter. Year-to-date E&D costs were $17.1 million and
$14.2 million in 2011 and 2010, respectively. The Company expects
E&D expenditures for 2011, which are included in cost of goods
sold, to be in the range of $32 million to $34 million.
Aerospace Segment Review
(refer to sales by market and segment data in accompanying
tables)
Second quarter and year-to-date sales to the Commercial
Transport market increased on higher demand for Cabin Electronics
products as well as increased volume for our Aircraft Lighting
Products. Second quarter and year-to-date Military sales were down
primarily due to lower Aircraft Lighting sales to that market.
Second quarter and year-to-date sales to the Business Jet market
were higher due to increased Airframe Power revenue.
Aerospace operating profit for the second quarter of 2011 was
$9.0 million, or 17.3% of sales, compared with $6.8 million, or
15.5% of sales, in the same period last year. Year-to-date
operating profit was $18.3 million in 2011, or 17.9% of sales,
compared with $13.5 million, or 15.5% of sales year-to-date in the
first half of 2010. Second quarter and year-to-date margin
improvement was due to the leverage provided on the increased sales
volume offset somewhat by increased engineering and development
costs and increased SG&A costs.
Bookings for the Aerospace segment during the second quarter
were $55.0 million, up 19.0% from $46.2 million in the second
quarter of 2010, and up 13.0% from bookings of $48.7 million in the
trailing first quarter of 2011. Backlog at the end of the second
quarter was $93.1 million.
Test Systems Segment Review
(refer to sales by market and segment data in accompanying
tables)
Sales in the 2011 second quarter remained flat at $3.5 million
when compared with the same period in 2010. Year-to-date sales for
2011 increased $1.3 million to $8.5 million compared with $7.2
million for the same period last year.
Test Systems operating loss for the second quarter of 2011 was
$0.5 million, or (15.4)% of sales, compared with an operating loss
of $1.0 million or (28.5)% of sales, in the same period last year.
For the first half of 2011, Test Systems operating loss was $0.5
million, or (6.2)% of sales, compared with an operating loss of
$0.8 million, or (11.1)% of sales, in the same period last
year.
Test Systems bookings in the second quarter were $3.5 million
compared with $5.4 million in the second quarter of 2010, and down
from the trailing 2011 first quarter which had bookings of $5.8
million. Backlog was $9.0 million at the end of the second quarter.
Bookings include nothing from the VDATS program which was announced
during the quarter. This award has been protested by unsuccessful
bidders and is under review at the GAO. The company expects
successful resolution in September.
Balance Sheet
Cash at the end of the 2011 second quarter declined by $6.6
million to $16.1 million compared with December 31, 2010 primarily
as a result of cash used for capital expenditures.
Capital expenditures during the second quarter and first six
months of 2011 were $6.2 million and $7.0 million, respectively,
compared with $0.6 million and $1.5 million in 2010,
respectively.
During the second quarter the Company acquired a partially
completed building located near its present Redmond, Washington
operation for approximately $5.2 million. The Company expects to
spend an additional $5 million to $8 million through 2012 for
renovations on this facility. Astronics Advanced Electronic Systems
Corp will occupy the facility when the lease on its current
location terminates in March 2013. Additionally, in July, the
Company purchased for approximately $5.1 million the building that
it had been leasing in Fort Lauderdale, Florida. Astronics
currently pays $2.6 million annually to lease facilities for these
two operations, and considers the real estate purchases to be
opportunistic given the current environment.
The Company expects capital spending in 2011 to be approximately
$17 million to $21 million including $12 million to $13 million
related to the acquisition and build out of the Fort Lauderdale and
Redmond properties.
Outlook
At July 2, 2011, backlog was $102.1 million, up from backlog of
$99.1 million at the end of the trailing first quarter of 2011 and
improved over backlog of $97.3 million at the end of the second
quarter of 2010. Approximately 75% of backlog is expected to ship
by the end of 2011.
Mr. Gundermann concluded, “The first half of 2011 has been
terrific, with record revenue of $110.6 million and net profit of
$9.8 million. Strong demand has prompted us to increase our sales
forecast for the year to $220 million to $230 million, up from our
previous forecast of $210 to $225 million,” he concluded.
Astronics anticipates that approximately $204 million to $212
million of forecasted revenue will be from its Aerospace segment,
while approximately $16 million to $18 million of the forecasted
revenue will be from its Test Systems segment.
Second Quarter 2011 Webcast and
Conference Call
The Company will host a teleconference at 10:00 AM ET on
Tuesday, August 9, 2011. 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 375499. The telephonic
replay will be available from 1:00 p.m. on the day of the call
through Tuesday, August 16, 2011. 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, Astronics Advanced Electronic Systems
Corp., DME Corporation 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 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 include the state of the aerospace and defense
industries, 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 news release whether to reflect
changed assumptions, the occurrence of unanticipated events or
changes in future operating results, financial conditions or
prospects, or otherwise.
ASTRONICS CORPORATION
CONSOLIDATED
INCOME STATEMENT DATA
(Unaudited, $ in thousands except per
share data)
Three Months Ended
Six Months Ended 7/2/2011
7/3/2010 7/2/2011
7/3/2010 Sales
$ 55,475 $ 47,089
$ 110,603 $ 94,025 Cost
of products sold 41,089 36,404
81,711 71,794
Gross profit 14,386 10,685 28,892 22,231
Gross margin
25.9 % 22.7 % 26.1 %
23.6 % Selling, general and administrative
7,144 6,076 13,489 11,504
SG&A % of Sales 12.9
% 12.9 % 12.2 % 12.3
%
Income from operations 7,242 4,609 15,403 10,727
Operating
margin 13.1 % 9.8 % 13.9
% 11.4 % Interest expense, net
534 722 1,071
1,321 Income before tax 6,708 3,887
14,332 9,406 Income tax expense 2,160
1,457 4,575 3,576
Net Income $ 4,548
$ 2,430 $ 9,757
$ 5,830 Basic earnings per
share: $ 0.41 $ 0.22 $ 0.89 $ 0.54 Diluted earnings per share: $
0.39 $ 0.22 $ 0.84 $ 0.52 Weighted average diluted shares
outstanding 11,703 11,289 11,665 11,127
Capital Expenditures $ 6,225 $ 611 $
6,979 $ 1,486 Depreciation and Amortization
$ 1,204 $ 1,224
$ 2,394 $ 2,463
ASTRONICS CORPORATION
CONSOLIDATED
BALANCE SHEET DATA
(in thousands)
7/2/2011 12/31/2010
(Unaudited)
ASSETS:
Cash and cash equivalents $ 16,075 $
22,709 Accounts receivable 35,762 30,941 Inventories 40,826 37,763
Other current assets 6,453 5,727 Property, plant and equipment, net
35,944 30,873 Other long-term assets 3,231 3,342 Deferred taxes
long-term 6,332 6,883 Intangible assets 4,824 5,040 Goodwill
7,712 7,610
Total Assets $
157,159 $ 150,888
LIABILITIES AND
SHAREHOLDERS' EQUITY:
Current maturities of long term debt $ 5,310 $ 5,314 Accounts
payable and accrued expenses 24,674 25,971 Long-term debt 29,806
33,264 Other liabilities 8,889 9,124 Shareholders' equity
88,480
77,215
Total Liabilities and Shareholders' Equity
$ 157,159
$ 150,888
ASTRONICS CORPORATION
SEGMENT
DATA
(Unaudited, $ in thousands)
Three Months Ended
Six Months Ended
7/2/2011 7/3/2010
7/2/2011
7/3/2010 Sales
Aerospace $ 51,942 $ 43,599 $ 102,141 $
86,789 Test Systems 3,533
3,490 8,462
7,236
Total Sales 55,475
47,089 110,603
94,025
Operating Profit (Loss) and
Margins
Aerospace 9,011 6,753 18,330 13,495 17.3 % 15.5 % 17.9 % 15.5 %
Test Systems (545 ) (993 ) (528 ) (806 ) (15.4 )%
(28.5 )% (6.2 )%
(11.1 )%
Total Operating Profit 8,466 5,760
17,802 12,689 Corporate Expenses and Other
1,758 1,873
3,470 3,283
Income
Before Taxes $ 6,708 $ 3,887
$ 14,332 $ 9,406
ASTRONICS CORPORATION
SALES BY
MARKET
(Unaudited, $ in thousands)
Three Months Ended
Six Months Ended 2011 7/2/2011
7/3/2010 % change
7/2/2011
7/3/2010 % change
YTD % Aerospace Segment
Commercial Transport $ 34,271 $ 24,891
38 % $ 67,196 $ 52,336 28 % 60.8 % Military 7,919 9,521 (17 )%
17,179 17,918 (4 )% 15.5 % Business Jet 7,426 6,379 16 % 14,063
11,971 17 % 12.7 % FAA/Airport 2,326
2,808 (17 )% 3,703
4,564 (19 )% 3.3 %
Aerospace Total 51,942 43,599 19
% 102,141 86,789 18 %
92.3 %
Test Systems
Segment
Military
3,533
3,490 1 %
8,462 7,236
17 % 7.7 %
Total $ 55,475 $
47,089 18 %
$ 110,603 $ 94,025
18 % 100.0 %
ASTRONICS CORPORATION
SALES BY
PRODUCT
(Unaudited, $ in thousands)
Three Months Ended Six Months
Ended 2011 7/2/2011
7/3/2010 % change
7/2/2011 7/3/2010
% change
YTD %
Aerospace Segment Cabin Electronics $ 26,874 $ 19,087
41 % $ 52,949 $ 40,584 30 % 47.9 % Aircraft Lighting 17,549 17,586
- % 35,720 33,319 7 % 32.3 % Airframe Power 5,193 4,117 26 % 9,769
8,322 17 % 8.8 % Airfield Lighting 2,326 2,809 (17 )% 3,703 4,564
(19 )% 3.3 %
Aerospace Total
51,942 43,599 19 % 102,141
86,789 18 % 92.3 %
Test Systems
Segment
3,533 3,490
1 % 8,462
7,236 17 %
7.7 % Total
$ 55,475 $ 47,089
18 % $ 110,603
$ 94,025 18
% 100.0 %
ASTRONICS CORPORATION
ORDER AND BACKLOG
TREND
(Unaudited, $ in thousands)
Q3
Q4 Q1
Q2 Trailing 12 2010 2010
2011 2011 Months
10/2/2010 12/31/2010
4/2/2011 7/2/2011
7/2/2011 Sales Aerospace $
46,024 $ 46,773 $ 50,199 $ 51,942 $ 194,938 Test Systems
3,882 5,050 4,929
3,533 17,394
Total
Sales $
49,906 $
51,823 $
55,128 $ 55,475
$
212,332 Bookings Aerospace $
58,250 $ 40,378 $ 48,682 $ 55,029 $ 202,339 Test Systems
4,358 1,224 5,756
3,459 14,797
Total
Bookings $
62,608 $
41,602 $ 54,438
$ 58,488 $ 217,136
Backlog Aerospace $ 97,970 $ 91,573 $ 90,056 $ 93,143 N/A
Test Systems 12,041 8,216
9,043 8,969
N/A
Total Backlog $
110,011
$ 99,789 $ 99,099
$ 102,112 N/A
Book:Bill Ratio Aerospace 1.27 0.86 0.97 1.06 1.04
Test Systems 1.12 0.24
1.17 0.98
0.85
Total Book:Bill 1.25
0.80 0.99
1.05 1.02
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