- Sales for the quarter were $177.0 million
- Consolidated orders for the quarter were $176.6
million
- Backlog at the end of the quarter was $379.4
million
- Initiates 2020 sales guidance in the range of $770 million
to $820 million
- Announces restructuring plan for antenna business
Astronics Corporation (Nasdaq: ATRO), a leading supplier of
advanced technologies and products to the global aerospace, defense
and other mission critical industries, today reported financial
results for the three and nine months ended September 28, 2019.
Financial results include the divestiture of the Test Systems’
semiconductor business on February 13, 2019.
Peter J. Gundermann, President and Chief Executive Officer,
commented, "As expected, third quarter revenue was light, due in
part to the continued grounding of the 737 MAX and the resulting
capacity challenge affecting the global airline industry. Beyond
this, we faced some headwinds that impacted our bottom line
significantly. The headwinds included continued losses from the
three struggling businesses discussed in previous quarters, higher
tariff costs, a non-cash loss on the sale of the airfield lighting
product line, and an increased reserve for a legal proceeding in
Europe. In total, the detrimental impact of these issues on the
quarter’s results was $15.4 million."
He added, "We are implementing a number of strategic initiatives
to alleviate several headwinds and to set up for a successful 2020.
We are consolidating operations, rearranging supply chains and
pushing development programs to completion. We expect our actions
will begin to show positively in the first quarter, and become even
more evident as the year progresses."
For comparability purposes, in addition to reporting
consolidated and segment results of operations on a basis
consistent with U.S. generally accepted accounting principles
("GAAP"), this press release also contains certain financial
information regarding consolidated sales, operating income and net
income, as well as Test Systems segment sales and operating profit,
adjusted to remove the sales and direct expenses of the divested
semiconductor business from all periods presented. Management
believes these non-GAAP measures are useful to investors in
understanding the performance of the ongoing business. The
reconciliation of GAAP measures to non-GAAP measures is contained
in the section labeled "Reconciliation to Non-GAAP Performance
Measures".
Three Months Ended
Nine Months Ended
($ in thousands)
September 28, 2019
September 29, 2018
%
Change
September 28, 2019
September 29, 2018
%
Change
Sales
$
177,018
$
212,674
(16.8)
%
$
574,290
$
600,339
(4.3)
%
Income from Operations
$
5,103
$
18,344
(72.2)
%
$
38,557
$
45,105
(14.5)
%
Operating Margin %
2.9 %
8.6 %
6.7%
7.5%
Net Loss (Gain) on Sale of
Businesses
$
1,332
$
—
$
(78,801)
$
—
Net Income
$
1,210
$
16,999
(92.9)
%
$
86,082
$
34,318
150.8
%
Net Income %
0.7 %
8.0%
15.0%
5.7%
*Adjusted Consolidated Sales
$
174,799
$
179,078
(2.4)
%
$
566,475
$
528,278
7.2
%
*Adjusted Income from
Operations
$
3,161
$
8,018
(60.6)
%
$
33,631
$
23,875
40.9
%
*Adjusted Operating Margin %
1.8 %
4.5%
5.9%
4.5%
*Adjusted Net Income
$
49
$
9,044
(99.5)
%
$
22,495
$
17,692
27.1
%
*Adjusted Net Income %
— %
5.1%
4.0%
3.3%
* Adjusted to remove the sales and direct costs of the divested
semiconductor business which was sold in February 2019.
Consolidated Review
Third Quarter 2019 Results (compared with
the prior-year period, unless noted otherwise)
Consolidated sales were down $35.7 million including sales of
the semiconductor business which was divested in the first quarter
of 2019. Excluding the divestiture, adjusted consolidated sales
were down 2.4%, or $4.3 million.
Consolidated operating income decreased to $5.1 million compared
with $18.3 million in the prior-year period. Adjusted consolidated
income from operations excluding the sales and direct expenses
attributable to the divested semiconductor test business was $3.2
million, or 1.8% of adjusted consolidated sales, compared with $8.0
million, or 4.5% of adjusted consolidated sales, in the prior-year
period.
Impacts to operating income and margin included tariff expenses
of $3.2 million and a $1.7 million increase to a legal reserve for
a long-term patent dispute. Also impacting operating income were
operating losses of $9.2 million related to the three challenged
Aerospace businesses, which included a program charge of $2.2
million. Operating losses related to the three challenged Aerospace
businesses were $11.2 million in the third quarter of 2018 and $7.7
million in the preceding second quarter of 2019.
The third quarter had a $1.3 million loss on the sale of a
business related to the sale of intellectual property and certain
assets associated with the Airfield Lighting product line which was
divested in July.
The effective tax rate for the quarter was 31.3%, compared with
a tax benefit recorded in the third quarter of 2018. The 2019 third
quarter tax rate was unfavorably impacted by the tax associated
with the gain on the sale of the semiconductor business.
Net income was $1.2 million, or $0.04 per diluted share,
compared with $17.0 million, or $0.52 per diluted share in the
prior year.
Bookings were $176.6 million, for a book-to-bill ratio,
excluding semiconductor activity, of 1.01:1. Backlog at the end of
the quarter was $379.4 million. Approximately $175.0 million of
backlog is expected to ship in the remainder of 2019.
During the quarter, under a share repurchase plan approved in
December 2017, the Company repurchased 1.8 million shares at cost
of $50 million completing that share repurchase plan. The average
share price purchased under the plan was $27.42. Following the
completion of the December 2017 stock repurchase plan, Astronics’
Board of Directors approved a new $50 million share repurchase
program in September 2019, authorizing the Company to repurchase,
in the aggregate, up to another $50 million of its outstanding
stock.
Year-to-Date 2019 Results (compared with
the prior-year period, unless noted otherwise)
Consolidated sales were down $26.0 million including sales of
the semiconductor business which was divested in the first quarter
of 2019. Excluding sales of the semiconductor business, adjusted
consolidated sales were up 7.2%, or $38.2 million, demonstrating
growth in both the Aerospace and Test Systems segments.
Consolidated operating income declined to $38.6 million compared
with the prior-year period.
Adjusted consolidated operating income was $33.6 million, or
5.9% of adjusted consolidated sales, compared with $23.9 million,
or 4.5% of adjusted consolidated sales, in the prior-year period.
Margin expansion was driven by higher volume, which more than
offset tariff expenses of
$6.8 million and the
previously-mentioned $1.7 million litigation charge. The challenged
Aerospace businesses had $27.6 million of operating losses,
including $3.9 million in program charges and $3.6 million of
inventory reserves. Losses from the challenged Aerospace
businesses, including program charges in the first nine months of
2018, were $28.3 million.
The effective tax rate for the first nine months of 2019 was
22.9%, compared with 6.5% in the same period of 2018. The tax rate
was unfavorably impacted by the tax associated with the gain on the
sale of the semiconductor business.
Net income was $86.1 million, or $2.61 per diluted share,
compared with $34.3 million, or $1.04 per diluted share in the
prior year. The $80.1 million pre-tax gain on the sale of the
semiconductor test business contributed $58.8 million to net income
after taxes. Adjusted net income, excluding the divested
semiconductor test business, was $22.5 million in the first nine
months of 2019 compared with $17.7 million in the prior-year
period.
Aerospace Segment Review (refer to sales by market and
segment data in accompanying tables)
Aerospace Third Quarter 2019 Results
(compared with the prior-year period, unless noted
otherwise)
Aerospace segment sales decreased $11.9 million, or 7.0%, to
$157.7 million.
Avionics sales were down $11.2 million compared with the
prior-year period due to lower demand in the quarter for inflight
entertainment and connectivity (“IFEC”) products and lower antenna
sales. System Certification sales increased $1.0 million, or
42.6%.
Aerospace operating profit was $8.8 million, or 5.6% of sales,
compared with $16.2 million, or 9.6% of sales, in the same period
last year. Aerospace operating profit was down on lower volume, and
was impacted by $3.2 million in tariffs and the $9.2 million of
operating losses related to the challenged Aerospace businesses,
which included a $2.2 million program charge.
Aerospace bookings in the third quarter of 2019 were $155.3
million, for a book-to-bill ratio of 0.98:1. Backlog was $308.2
million at the end of the third quarter of 2019.
Aerospace Year-to-Date 2019 Results
(compared with the prior-year period, unless noted
otherwise)
Aerospace segment sales increased by $20.1 million, or 4.0%, to
$520.5 million when compared with the prior year’s first nine
months.
Electrical Power & Motion sales increased $36.1 million, or
16.5%, and Lighting & Safety sales increased $10.3 million.
Sales of Avionics products were down $20.9 million to $79.4 million
for similar reasons as in the quarter. Systems Certification sales
decreased $3.0 million compared with the first nine months of
2018.
Aerospace operating profit was $48.9 million, or 9.4% of sales,
compared with $47.5 million, or 9.5% of sales, in the same period
last year. Aerospace operating profit in the first nine months of
2019 benefited from higher volume and $2.3 million lower
amortization expense related to acquired intangible assets. These
benefits were offset by $6.8 million in tariffs and $27.6 million
in operating losses related to the three challenged Aerospace
businesses, which included $3.6 million in inventory reserve and
$3.9 million in program charges. Operating profit in the first nine
months of 2018 was negatively impacted by $28.3 million in
operating loss from challenged Aerospace businesses and $1.4
million in acquisition-related inventory step-up expense.
Mr. Gundermann commented, “We believe we are on the verge of
drastically reducing the losses we have seen at our three
stragglers. One of them, Armstrong Aerospace, is no longer
generating significant losses and is in the process of
consolidating into our Connectivity Systems & Certification
organization, which we refer to as CSC.
The second, CCC, is on track to wrap up the development program
during the current quarter that has been driving its losses. As
development expense drops off in early 2020, we expect that
business will be essentially break-even for the year and profitable
in the second half.
We have made the decision as well to consolidate the third,
AeroSat, into CSC during the first half of 2020. We intend to
narrow the focus of the company such that we continue to pursue the
most promising market opportunities while minimizing costs. We will
maintain an office in New Hampshire for certain engineering,
program management, and sales functions, but the manufacturing
operations will transition to our new CSC facility in Chicago. We
are doing an assessment of that business’s initiatives to determine
which we will continue and which we will not, and those decisions
will drive our transition plan and timing. In any event, we expect
the transition to be complete by the end of the second quarter of
2020 at the latest.”
Mr. Gundermann continued, “We also are taking actions regarding
tariffs, which affect us because part of our supply chain is in
China. We incurred $3.2 million in tariff expense in the third
quarter and $6.8 million through the nine-month period. We are
adjusting our supply base such that our tariff exposure in 2020
will be reduced by half for the full year, and significantly
reduced by year-end, assuming the rules do not change.”
Test Systems Segment Review (refer to sales by market and
segment data in accompanying tables)
Test Systems Third Quarter 2019 Results
(compared with the prior-year period, unless noted
otherwise)
Test Segment sales decreased to $19.3 million as a result of the
divestiture of the semiconductor business. Adjusted Test Systems
segment sales, excluding the semiconductor test business from both
periods, were up $7.6 million, or 80.0%, to $17.1 million. Freedom
Communications Technologies (“FCT”), acquired in July 2019,
contributed $3.0 million in sales in the third quarter.
The Test segment operating profit was $2.1 million, or 10.7% of
sales, compared with operating profit of $5.8 million, or 13.5% of
sales, in last year’s third quarter. Adjusted for the sale of the
semiconductor business, the Test segment had operating income of
$0.1 million compared with an operating loss of $4.5 million in the
prior-year period. Operating income in 2019 included the results of
the acquired FCT business. Operating profit for the third quarter
was negatively impacted by $0.4 million in acquisition-related
inventory step-up expense.
Bookings for the Test Systems segment in the quarter were $21.2
million, for a book-to-bill ratio, excluding semiconductor
activity, of 1.22:1 for the quarter. Backlog was $71.1 million at
the end of the third quarter of 2019.
Mr. Gundermann commented, “It has been a year of transition for
our Test business. We sold the semiconductor portion in February
and added Freedom Communications Technologies in July and, most
recently, added Diagnosys in October. The two acquisitions
complement our offerings in expanding markets: Radio test for
Freedom and Transit test for Diagnosys. These are niche markets
where we believe we can be successful in the immediate future.”
Test Systems Year-to-Date 2019 Results
(compared with the prior-year period, unless noted
otherwise)
Test Segment sales decreased to $53.8 million compared with the
prior-year period. Excluding the semiconductor test business from
both periods, adjusted Test Systems segment sales were $46.0
million, up 64.9% compared with the prior year, driven by growth in
the Aerospace & Defense market. FCT contributed $3.0 million in
sales.
Operating profit for the segment was $4.2 million, or 7.7% of
sales, compared with operating income of $10.2 million in the
prior-year period. Adjusted for the sale of the semiconductor
business, there was an operating loss for the segment of $0.8
million which was mostly the result of $2.0 million in
restructuring costs incurred in the second quarter. Operating loss
in the prior-year period adjusted for the divestiture of the
semiconductor business was $11.1 million.
2019 Outlook
We expect fourth quarter sales to be $175 to $195 million, which
will result in consolidated sales for 2019 to be in the range of
$750 million to $770 million. Of the total, $680 million to $690
million is expected from the Aerospace segment and $70 million to
$80 million is expected from the Test segment.
Mr. Gundermann concluded, “We expect volume to step up in the
fourth quarter, providing momentum as we close out the year. We
will, however, incur a reserve related to the AeroSat
consolidation. The reserve could be significant depending on our
final plan, which will be determined by the end of the quarter. We
expect the reserve to be at least $5 million and could be above $10
million.”
Consolidated backlog at September 28, 2019 was $379.4 million.
Approximately 46% of the backlog is expected to ship in 2019.
The effective tax rate for 2019 is expected to be in the range
of 21% to 25%, which reflects the higher tax rate on the gain on
the sale of the semiconductor business.
Capital equipment spending in 2019 is expected to be between $14
million to $19 million.
2020 Outlook
The Company is initiating revenue guidance for 2020, expecting
consolidated sales in the range of $770 million to $820 million.
The Aerospace segment is expected to generate $690 million to
$730
million, and the Test segment is expected to see sales of $80
million to $90 million. The midpoint of revenue guidance for 2020
is $795 million, a 5% increase over the midpoint of revenue
guidance for 2019.
The effective tax rate for 2020 is expected to be in the range
of 18% to 22%.
Mr. Gundermann added, “This is obviously an early look at 2020,
but we are optimistic about the future and believe we are well
positioned. We believe our plans with CCC, AeroSat, and our supply
chain will substantially improve our bottom line performance. We
did assume that the 737 MAX is flying again at or near year-end
2019. We will update these numbers, of course, as time passes or if
anything material changes in our market position.”
Third Quarter 2019 Webcast and Conference Call
The Company will host a teleconference today at 11:00 a.m. ET.
During the teleconference, management 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 13694912. The telephonic
replay will be available from 2:00 p.m. on the day of the call
through Tuesday, November 19, 2019. A transcript will also be
posted to the Company’s Web site once available.
About Astronics
Corporation
Astronics Corporation (Nasdaq: ATRO) serves the world’s
aerospace, defense, and other mission critical 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 over 50 years,
Astronics has delivered creative, customer-focused solutions with
exceptional responsiveness. Today, global airframe manufacturers,
airlines, military branches, completion centers, and Fortune 500
companies rely on the collaborative spirit and innovation of
Astronics. The Company’s strategy is to increase its value by
developing technologies and capabilities that provide innovative
solutions to its targeted markets. 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 success
of results at addressing headwinds and eliminating losses at the
three challenged Aerospace operations, the continuation of the
trend in growth with passenger power and connectivity on airplanes,
the ability of the Company to advance its Test business and have it
succeed in niche markets, the success of the Company achieving its
sales expectations and improving its profitability, 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 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
9/28/2019
9/29/2018
9/28/2019
9/29/2018
Sales
$
177,018
$
212,674
$
574,290
$
600,339
Cost of products sold
140,224
166,354
445,056
467,315
Gross profit
36,794
46,320
129,234
133,024
Gross margin
20.8%
21.8%
22.5%
22.2%
Selling, general and administrative
31,691
27,976
90,677
87,919
SG&A % of sales
17.9%
13.2%
15.8%
14.6%
Income from operations
5,103
18,344
38,557
45,105
Operating margin
2.9%
8.6%
6.7%
7.5%
Net loss (gain) on sale of businesses
1,332
—
(78,801)
—
Other expense, net of other income
464
253
1,197
1,091
Interest expense, net
1,547
2,511
4,576
7,326
Income before tax
1,760
15,580
111,585
36,688
Income tax expense (benefit)
550
(1,419)
25,503
2,370
Net income
$
1,210
$
16,999
$
86,082
$
34,318
Net income % of sales
0.7%
8.0%
15.0%
5.7%
*Basic earnings per share:
$
0.04
$
0.53
$
2.65
$
1.06
*Diluted earnings per share:
$
0.04
$
0.52
$
2.61
$
1.04
*Weighted average diluted shares
outstanding (in thousands)
32,583
32,969
33,002
33,035
Capital expenditures
$
1,933
$
3,921
$
8,850
$
12,416
Depreciation and amortization
$
8,203
$
8,172
$
24,183
$
26,756
SEGMENT
DATA
(Unaudited, $ in thousands)
Three
Months Ended
Nine
Months Ended
9/28/2019
9/29/2018
9/28/2019
9/29/2018
Sales
Aerospace
$
157,702
$
169,588
$
520,495
$
500,445
Less inter-segment
—
(9)
(5)
(62)
Total Aerospace
157,702
169,579
520,490
500,383
Test Systems
19,346
43,095
53,995
99,956
Less inter-segment
(30)
—
(195)
—
Total Test Systems
19,316
43,095
53,800
99,956
Total consolidated sales
177,018
212,674
574,290
600,339
Segment operating profit and
margins
Aerospace
8,789
16,210
48,949
47,525
5.6%
9.6%
9.4%
9.5%
Test Systems
2,075
5,833
4,166
10,151
10.7%
13.5%
7.7%
10.2%
Total segment operating profit
10,864
22,043
53,115
57,676
Net loss (gain) on sale of businesses
1,332
—
(78,801)
—
Interest expense
1,547
2,511
4,576
7,326
Corporate expenses and other
6,225
3,952
15,755
13,662
Income before taxes
$
1,760
$
15,580
$
111,585
$
36,688
Reconciliation to Non-GAAP Performance Measures
The Company’s press release contains financial information
regarding consolidated sales, operating income and net income, as
well as Test Systems segment sales and operating profit, as
adjusted to remove the direct effects of the semiconductor business
from all periods presented. Each of these adjusted balances are
non-GAAP performance measures. Management believes these non-GAAP
measures are useful to investors in understanding the performance
of the ongoing business.
(Unaudited, $ in thousands)
Consolidated
Three
Months Ended
Nine
Months Ended
9/28/2019
9/29/2018
9/28/2019
9/29/2018
Sales
Consolidated sales
$
177,018
$
212,674
$
574,290
$
600,339
Non-GAAP Adjustment - Remove effect of
semiconductor business*
(2,219)
(33,596)
(7,815)
(72,061)
Adjusted Consolidated Sales
$
174,799
$
179,078
$
566,475
$
528,278
Income from Operations
Consolidated income from operations
$
5,103
$
18,344
$
38,557
$
45,105
Non-GAAP Adjustment - Remove effect of
semiconductor business*
(1,942)
(10,326)
(4,926)
(21,230)
Adjusted Income from Operations
$
3,161
$
8,018
$
33,631
$
23,875
1.8%
4.5%
5.9%
4.5%
Net Income
Consolidated net income
$
1,210
$
16,999
$
86,082
$
34,318
Non-GAAP Adjustment - Remove effect of
semiconductor business*
(1,161)
(7,955)
(63,587)
(16,626)
Adjusted Net Income
$
49
$
9,044
$
22,495
$
17,692
Test Segment
Test Segment Sales
Test Segment Sales
$
19,316
$
43,095
$
53,800
$
99,956
Non-GAAP Adjustment - Remove effect of
semiconductor business*
(2,219)
(33,596)
(7,815)
(72,061)
Adjusted Test Segment Sales
$
17,097
$
9,499
$
45,985
$
27,895
Loss from Test Segment
Operations
Income (loss) from Test Segment
operations
$
2,075
$
5,833
$
4,166
$
10,151
Non-GAAP Adjustment - Remove effect of
semiconductor business*
(1,942)
(10,326)
(4,926)
(21,230)
Adjusted Loss from Test Segment
Operations
$
133
$
(4,493)
$
(760)
$
(11,079)
0.8%
(47.3)%
(1.7)%
(39.7)%
* The non-GAAP adjustment eliminates all semiconductor test
sales and associated direct costs from all periods presented. There
are significant indirect costs, overheads, and other general and
administrative costs that are not included in the non-GAAP
adjustment, as such functions benefited all operations and products
within the Test Systems segment and have not been eliminated as a
result of the divestiture. The non-GAAP adjustment to net income
for the three-month and nine-month period ended September 28, 2019
also eliminates the impact of the gain on the sale of the
semiconductor business, net of tax at the forecasted consolidated
tax rate for 2019.
ASTRONICS CORPORATION
CONSOLIDATED BALANCE SHEET DATA
($ in thousands)
(unaudited)
9/28/2019
12/31/2018
ASSETS
Cash and cash equivalents
$
22,795
$
16,622
Accounts receivable and uncompleted
contracts
159,715
182,308
Inventories
149,621
138,685
Other current assets
17,576
17,198
Assets held for sale
3,186
19,358
Property, plant and equipment, net
113,137
120,862
Other long-term assets
45,911
21,272
Intangible assets, net
132,433
133,383
Goodwill
133,594
124,952
Total assets
$
777,968
$
774,640
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current maturities of long-term debt
$
191
$
1,870
Accounts payable and accrued expenses
95,367
98,436
Customer advances and deferred revenue
23,525
26,880
Liabilities held for sale
—
906
Long-term debt
180,055
232,112
Other liabilities
53,038
27,811
Shareholders' equity
425,792
386,625
Total liabilities and shareholders'
equity
$
777,968
$
774,640
ASTRONICS CORPORATION
CONSOLIDATED CASH FLOWS DATA
(Unaudited, $ in thousands)
Nine
Months Ended
9/28/2019
9/29/2018
Cash flows from operating
activities:
Net income
$
86,082
$
34,318
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation and amortization
24,183
26,756
Provisions for non-cash losses on
inventory and receivables
4,613
2,432
Equity-based compensation expense
2,943
2,349
Deferred tax benefit
(3,820)
(1,536)
Net gain on sale of businesses
(78,801)
—
Other
(792)
(507)
Cash flows from changes in operating
assets and liabilities:
Accounts receivable
23,423
(52,890)
Inventories
(18,963)
(15,768)
Accounts payable
(5,494)
571
Accrued expenses
(5,867)
4,977
Other current assets and liabilities
(697)
(1,620)
Customer advanced payments and deferred
revenue
(3,266)
19,241
Income taxes
5,581
(4,315)
Supplemental retirement and other
liabilities
1,116
1,351
Cash provided by operating activities
30,241
15,359
Cash flows from investing
activities:
Acquisition of business, net of cash
acquired
(21,785)
—
Proceeds on sale of businesses
104,792
—
Capital expenditures
(8,850)
(12,416)
Other investing activities
—
(3,376)
Cash provided by (used for) investing
activities
74,157
(15,792)
Cash flows from financing
activities:
Proceeds from long-term debt
99,000
35,015
Payments for long-term debt
(146,080)
(47,116)
Purchase of outstanding shares for
treasury
(50,000)
—
Debt acquisition costs
—
(516)
Proceeds from exercise of stock
options
423
283
Other financing activities
(1,284)
—
Cash used for financing activities
(97,941)
(12,334)
Effect of exchange rates on cash
(284)
(254)
Increase (decrease) in cash and cash
equivalents
6,173
(13,021)
Cash and cash equivalents at beginning of
period
16,622
17,914
Cash and cash equivalents at end of
period
$
22,795
$
4,893
ASTRONICS CORPORATION
SALES BY
MARKET
(Unaudited, $ in thousands)
Three
Months Ended
Nine
Months Ended
9/28/2019
9/29/2018
% Change
9/28/2019
9/29/2018
% Change
% of Sales
Aerospace Segment
Commercial Transport
$
122,212
$
136,692
(10.6)
%
$
393,721
$
402,539
(2.2)
%
68.5
%
Military
17,255
16,125
7.0
%
57,753
46,410
24.4
%
10.1
%
Business Jet
12,432
9,289
33.8
%
49,555
30,291
63.6
%
8.6
%
Other
5,803
7,473
(22.3)
%
19,461
21,143
(8.0)
%
3.4
%
Aerospace Total
157,702
169,579
(7.0)
%
520,490
500,383
4.0
%
90.6
%
Test Systems Segment excluding
Semiconductor
17,097
9,499
80.0
%
45,985
27,895
64.9
%
8.0
%
Total sales excluding
Semiconductor
174,799
179,078
(2.4)
%
566,475
528,278
7.2
%
98.6
%
Test-Semiconductor
2,219
33,596
(93.4)
%
7,815
72,061
(89.2)
%
1.4
%
Total Sales
$
177,018
$
212,674
(16.8)
%
$
574,290
$
600,339
(4.3)
%
SALES BY
PRODUCT LINE
(Unaudited, $ in thousands)
Three
Months Ended
Nine
Months Ended
9/28/2019
9/29/2018
% Change
9/28/2019
9/29/2018
% Change
% of Sales
Aerospace Segment
Electrical Power & Motion
$
78,428
$
78,610
(0.2)
%
$
255,007
$
218,931
16.5
%
44.3
%
Lighting & Safety
44,127
43,481
1.5
%
139,502
129,244
7.9
%
24.3
%
Avionics
19,871
31,059
(36.0)
%
79,414
100,354
(20.9)
%
13.8
%
Systems Certification
3,384
2,373
42.6
%
9,050
12,028
(24.8)
%
1.6
%
Structures
6,089
6,583
(7.5)
%
18,056
18,683
(3.4)
%
3.1
%
Other
5,803
7,473
(22.3)
%
19,461
21,143
(8.0)
%
3.4
%
Aerospace Total
157,702
169,579
(7.0)
%
520,490
500,383
4.0
%
90.6
%
Test Systems Segment excluding
Semiconductor
17,097
9,499
80.0
%
45,985
27,895
64.9
%
8.0
%
Total sales excluding
Semiconductor
174,799
179,078
(2.4)
%
566,475
528,278
7.2
%
98.6
%
Test-Semiconductor
2,219
33,596
(93.4)
%
7,815
72,061
(89.2)
%
1.4
%
Total Sales
$
177,018
$
212,674
(16.8)
%
$
574,290
$
600,339
(4.3)
%
ASTRONICS CORPORATION
ORDER
AND BACKLOG TREND
(Unaudited, $ in thousands)
Q4 2018
Q1 2019
Q2 2019
Q3 2019
Trailing Twelve Months
12/31/2018
3/30/2019
6/29/2019
9/28/2019
9/28/2019
Sales
Aerospace
$
175,242
$
188,501
$
174,287
$
157,702
$
695,732
Test Systems (excluding Semi)
15,482
16,319
12,569
17,097
61,467
Sales (excluding Semi)
190,724
204,820
186,856
174,799
757,199
Test-Semiconductor
12,193
3,354
2,242
2,219
20,008
Total Sales
$
202,917
$
208,174
$
189,098
$
177,018
$
777,207
Bookings
Aerospace
$
175,554
$
191,701
$
157,631
$
155,336
$
680,222
Test Systems (excluding Semi)
43,300
11,812
12,675
20,892
88,679
Bookings (excluding Semi)
218,854
203,513
170,306
176,228
768,901
Test-Semiconductor
1,510
1,470
354
330
3,664
Total Bookings
$
220,364
$
204,983
$
170,660
$
176,558
$
772,565
Backlog*
Aerospace
$
326,047
$
329,247
$
310,590
$
308,224
Test Systems (excluding Semi)
66,436
61,929
62,035
65,939
Backlog (excluding Semi)
392,483
391,176
372,625
374,163
Test-Semiconductor
23,034
8,975
7,087
5,198
Total Backlog
$
415,517
$
400,151
$
379,712
$
379,361
N/A
Book:Bill Ratio**
Aerospace
1.00
1.02
0.90
0.98
0.98
Test Systems excl. Semi
2.80
0.72
1.01
1.22
1.44
Total Book:Bill excl. Semi
1.15
0.99
0.91
1.01
1.02
(*) During the first quarter of 2019, Test
Systems segment backlog of approximately $12.2 million was disposed
of in the divestiture of the semiconductor business. Aerospace
backlog of approximately $2.0 million has been removed in the
second quarter of 2019 above related to the airfield lighting
product line, which was divested in July 2019. Test Systems backlog
of approximately $0.1 million was added in the third quarter of
2019 above related to the acquisition of FCT.
(**) Calculations of Test Systems and
Total Book:Bill excludes the total semiconductor business, which
does include residual warranty backlog that is expected to be
recognized.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191105005505/en/
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
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