- 2015 first quarter diluted earnings per share was $0.47
vs. $0.33 in 2014 first quarter
- First quarter Aerospace segment sales, bookings and
backlog reached new records of $142.4 million,
$141.1 million and $234.0 million,
respectively
- Consolidated organic sales grew 9.9%, organic Aerospace
segment sales were up 10.9%
Astronics Corporation (Nasdaq:ATRO), a leading supplier of products
to the global aerospace, defense, electronics and semiconductor
industries, today reported financial results for the first three
months ended April 4, 2015.
|
Three Months
Ended |
|
April 4,
2015 |
Mar. 29,
2014 |
% Change |
|
|
|
|
Sales |
$ 161,638 |
$ 140,951 |
14.7% |
Gross profit |
$ 40,162 |
$ 30,005 |
33.9% |
Gross margin |
24.8% |
21.3% |
|
SG&A |
$ 22,619 |
$ 16,378 |
38.1% |
SG&A percent of sales |
14.0% |
11.6% |
|
Income from operations |
$ 17,543 |
$ 13,627 |
28.7% |
Operating margin % |
10.9% |
9.7% |
|
Net income |
$ 10,683 |
$ 7,507 |
42.3% |
Net income % |
6.6% |
5.3% |
|
Consolidated Review
First Quarter 2015 Results
Peter Gundermann, CEO of Astronics, said "Our first quarter was
largely as anticipated. Performance in our Aerospace segment was
strong and steady, while our Test Systems segment dealt with an
adverse combination of product mix and delivery schedules. We
expect Test shipments to improve dramatically in the coming
quarters, particularly in the third quarter, resulting once again
in new records. All in all, we view our first quarter results as a
solid start to the year."
Consolidated sales for the first quarter of 2015 increased 14.7%
to $161.6 million compared with $141.0 million for the same period
last year. First quarter 2014 sales included four weeks of activity
for Astronics Test Systems, Inc. ("ATS"), which was acquired on
February 28, 2014. The 2015 first quarter included incremental
sales of $6.6 million from Armstrong Aerospace, Inc. ("Armstrong"),
acquired on January 14, 2015, while organic sales increased $14.0
million, or 9.9% to $155.0 million. Aerospace segment sales
increased $19.9 million to $142.4 million and Test Systems segment
sales increased $0.7 million to $19.3 million.
Consolidated gross margin was 24.8% compared with 21.3% in the
first quarter of 2014. The expanded margin primarily was due to
$8.7 million related to inventory step-up expense in the first
quarter of 2014, compared with $0.6 million in the first quarter of
2015. Engineering and development ("E&D") costs were $22.2
million, which included an incremental $1.9 million for ATS and
$1.3 million for Armstrong. E&D costs in the prior year's first
quarter were $17.2 million.
Selling, general and administrative ("SG&A") expenses were
$22.6 million, or 14.0% of sales, compared with $16.4 million, or
11.6% of sales, in the same period last year. The increase was due
primarily to the incremental SG&A costs of ATS and Armstrong,
which added $3.1 million to SG&A in the first quarter of 2015,
including $0.8 million of amortization expense for acquired
intangible assets of those businesses. Additionally, higher
SG&A expense reflects increased headcount and compensation
costs to support growth.
Diluted earnings per share for the 2015 first quarter were $0.47
compared with $0.33 in the same period last year.
Aerospace Segment Review (refer to sales by
market and segment data in accompanying tables)
Aerospace First Quarter 2015 Results
Aerospace segment sales increased by $19.9 million, or 16.3%,
when compared with the prior year's first quarter to $142.4
million. Organic sales grew 10.9%, or $13.3 million, and sales from
Armstrong added $6.6 million.
Sales to the Commercial Transport market increased $20.9
million, of which $6.6 million was related to the acquisition of
Armstrong, primarily comprised of Systems Certification sales. The
remaining increase was mostly higher organic sales of Lighting
& Safety, Avionics and Electrical Power & Motion products.
Organic Lighting and Safety product sales to the Commercial
Transport market increased by $5.4 million. Organic sales of
Avionics products to the Commercial Transport market increased by
$5.0 million. Organic sales of Electrical Power & Motion
products to the Commercial Transport market increased approximately
$3.5 million.
Sales to the Business Jet market decreased $1.8 million when
compared with last year's first quarter, due to lower organic sales
of avionics and lighting products to this market.
Aerospace operating profit for the first quarter of 2015 was
$23.4 million, or 16.4% of sales, compared with $17.5 million, or
14.3% of sales, in the same period last year. Approximately $0.6
million in operating profit was related to Armstrong, which was
acquired in January 2015. Armstrong inventory step-up expense was
$0.6 in the first quarter of 2015. Operating profit in the first
quarter of 2014 was impacted by $2.4 million associated with
inventory step-up, primarily related to AeroSat and PGA, which were
acquired in the fourth quarter of 2013. Operating leverage gained
on volume for the organic business was partially offset by
approximately $1.9 million of higher organic E&D costs.
Aerospace SG&A expense increased $2.6 million in the first
quarter of 2015 as compared with 2014. Incremental SG&A from
Armstrong was $1.2 million, including $0.4 million of purchased
intangible asset amortization expense for acquired intangible
assets.
Test Systems Segment Review (refer to sales by
market and segment data in accompanying tables)
Test Systems First Quarter 2015 Results
2014 results reflect only four weeks of sales and costs for ATS,
which was acquired on February 28, 2014. Sales in the 2015 first
quarter increased $0.7 million to $19.3 million compared with sales
of $18.6 million for the same period in 2014. The 2015 sales level
is reflective of owning ATS for a full quarter. Sales to the
Commercial Electronics market decreased compared with the same
period in 2014 as ATS completed the delivery of units with its
primary customer in the Commercial Electronics market during 2014.
Current year deliveries to this customer are expected to be
concentrated in the second and third quarters. The decrease in the
Commercial Electronics market was more than offset by increased
sales to the Military market, primarily resulting from the
inclusion of ATS for a full quarter in 2015 compared with only four
weeks in 2014.
Operating loss was $2.2 million compared with an operating loss
of $1.7 million in last year's first quarter. The 2015 first
quarter reflects operating expenses of ATS for a full quarter, as
compared with only four weeks of operating expenses in the prior
year first quarter. Additionally, the 2014 first quarter reflects
inventory step-up costs of $6.3 million that reduced normal
operating margins for that period.
Forecast
Expectations for consolidated sales in 2015 are unchanged at a
range of $680 million to $740 million, including the January 2015
addition of Armstrong. Approximately $550 million to $580 million
of forecasted 2015 revenue is expected from the Aerospace segment,
while approximately $130 million to $160 million of the forecasted
revenue is expected from the Test Systems segment.
Consolidated backlog at April 4, 2015 was $378.5 million, of
which approximately $314.1 million is expected to ship in 2015.
Capital equipment spending in 2015 is expected to be in the
range of $20 million to $27 million. E&D costs are estimated to
be in the range of $75 million to $80 million.
Mr. Gundermann commented, "We are maintaining our original 2015
revenue forecast of $680 to $740 million. Our Test Systems segment
is expected to have strong results in our second and third quarters
as we deliver on the major contract announced late last year. As is
typical, our consolidated fourth quarter will be dependent upon the
level of bookings we achieve over the next six months. We remain
pleased with our range of market positions and expect continued
success as the year unfolds."
First Quarter 2015 Webcast and Conference
Call
The Company will host a teleconference today at 11:00 a.m. EDT.
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 13607337. The telephonic
replay will be available from 2:00 p.m. EST on the day of the call
through Tuesday, May 19, 2015. A transcript of the call 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. Our products and services include
advanced, high-performance electrical power generation &
distribution systems, lighting & safety systems, avionics
products, aircraft structures, engineering design and 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 our targeted
markets and other markets where our 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 website 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, defense,
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 |
|
4/4/2015 |
3/29/2014 |
Sales |
$ 161,638 |
$ 140,951 |
Cost of products sold |
121,476 |
110,946 |
Gross profit |
40,162 |
30,005 |
Gross margin |
24.8% |
21.3% |
|
|
|
Selling, general and administrative |
22,619 |
16,378 |
SG&A % of Sales |
14.0% |
11.6% |
Income from operations |
17,543 |
13,627 |
Operating margin |
10.9% |
9.7% |
|
|
|
Interest expense, net |
1,246 |
2,323 |
Income before tax |
16,297 |
11,304 |
Income tax expense |
5,614 |
3,797 |
Net Income |
$ 10,683 |
$ 7,507 |
Net income % of
Sales |
6.6% |
5.3% |
|
|
|
*Basic earnings per share: |
$ 0.49 |
$ 0.35 |
*Diluted earnings per share: |
$ 0.47 |
$ 0.33 |
|
|
|
*Weighted average diluted shares outstanding
(in thousands) |
22,806 |
22,652 |
|
|
|
Capital expenditures |
$ 7,059 |
$ 16,906 |
Depreciation and amortization |
$ 6,127 |
$ 4,838 |
|
|
|
*All share quantities and
per-share data have been restated to reflect the impact of the
twenty percent Class B stock distribution to shareholders of record
on September 5, 2014. |
|
ASTRONICS
CORPORATION |
CONSOLIDATED
BALANCE SHEET DATA |
(in thousands) |
|
4/4/2015 |
12/31/2014 |
|
(Unaudited) |
|
ASSETS |
|
|
Cash and cash equivalents |
$ 22,563 |
$ 21,197 |
Accounts receivable |
76,346 |
88,888 |
Inventories |
120,784 |
115,053 |
Other current assets |
17,628 |
20,680 |
Property, plant and equipment, net |
124,917 |
116,316 |
Other long-term assets |
6,382 |
5,632 |
Intangible assets, net |
112,033 |
94,991 |
Goodwill |
119,630 |
100,153 |
Total Assets |
$ 600,283 |
$ 562,910 |
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY |
|
|
Current maturities of long term debt |
$ 2,658 |
$ 2,796 |
Accounts payable and accrued expenses |
65,938 |
61,368 |
Customer advances and deferred revenue |
37,039 |
45,052 |
Long-term debt |
214,099 |
180,212 |
Other liabilities |
43,558 |
45,305 |
Shareholders' equity |
236,991 |
228,177 |
Total Liabilities and
Shareholders' Equity |
$ 600,283 |
$ 562,910 |
|
|
ASTRONICS
CORPORATION |
SEGMENT
DATA |
(Unaudited, $ in
thousands) |
|
|
|
Three Months
Ended |
|
4/4/2015 |
3/29/2014 |
Sales |
|
|
Aerospace |
$ 142,352 |
$ 122,372 |
Test Systems |
19,341 |
18,689 |
Less Inter-segment |
(55) |
(110) |
Total Sales |
$ 161,638 |
$ 140,951 |
|
|
|
Operating profit and margins |
|
|
Aerospace |
$ 23,402 |
$ 17,490 |
|
16.4% |
14.3% |
Test Systems |
(2,225) |
(1,695) |
|
(11.5)% |
(9.1)% |
Total Operating Profit |
21,177 |
15,795 |
|
13.1% |
11.2% |
|
|
|
Interest expense |
1,246 |
2,323 |
Corporate expenses and other |
3,634 |
2,168 |
Income Before Taxes |
$ 16,297 |
$ 11,304 |
|
10.1% |
8.0% |
|
ASTRONICS
CORPORATION |
SALES BY
MARKET |
(Unaudited, $ in
thousands) |
|
|
|
|
|
|
Three
Months Ended |
|
4/4/2015 |
3/29/2014 |
% change |
2015 YTD |
|
|
|
|
|
Aerospace Segment |
|
|
|
|
Commercial Transport |
$ 120,194 |
$ 99,287 |
21.1% |
74.4% |
Military |
9,258 |
8,958 |
3.3% |
5.7% |
Business Jet |
8,092 |
9,866 |
(18.0)% |
5.0% |
Other |
4,808 |
4,261 |
12.8% |
3.0% |
Aerospace Total |
142,352 |
122,372 |
16.3% |
88.1% |
|
|
|
|
|
Test Systems Segment |
|
|
|
|
Commercial Electronics |
4,752 |
14,337 |
(66.9)% |
2.9% |
Military |
14,534 |
4,242 |
242.6% |
9.0% |
|
19,286 |
18,579 |
3.8% |
11.9% |
|
|
|
|
|
Total |
$ 161,638 |
$ 140,951 |
14.7% |
100.0% |
|
|
|
ASTRONICS
CORPORATION |
SALES BY
PRODUCT |
(Unaudited, $ in
thousands) |
|
|
|
|
Three Months
Ended |
|
4/4/2015 |
3/29/2014 |
% change |
2015 YTD |
|
|
|
|
|
Aerospace Segment |
|
|
|
|
Electrical Power & Motion |
$ 69,570 |
$ 65,833 |
5.7% |
43.1% |
Lighting & Safety |
42,077 |
35,091 |
19.9% |
26.0% |
Avionics |
17,367 |
12,752 |
36.2% |
10.7% |
Systems Certification |
4,574 |
-- |
-- |
2.8% |
Structures |
3,956 |
3,638 |
8.7% |
2.5% |
Other |
4,808 |
5,058 |
(4.9)% |
3.0% |
Aerospace Total |
142,352 |
122,372 |
16.3% |
88.1% |
|
|
|
|
|
Test Systems |
19,286 |
18,579 |
3.8% |
11.9% |
|
|
|
|
|
Total |
$ 161,638 |
$ 140,951 |
14.7% |
100.0% |
|
|
|
|
|
|
|
ASTRONICS
CORPORATION |
|
ORDER AND BACKLOG
TREND |
|
(Unaudited, $ in
thousands) |
|
Q2
2014 |
Q3
2014 |
Q4
2014 |
Q1
2015 |
Trailing
Twelve Months |
|
6/28/2014 |
9/27/2014 |
12/31/2014 |
4/4/2015 |
4/4/2015 |
Sales |
|
|
|
|
|
Aerospace |
$ 121,523 |
$ 122,233 |
$ 128,619 |
$ 142,352 |
$ 514,727 |
Test Systems |
53,040 |
57,209 |
37,464 |
19,286 |
166,999 |
Total Sales |
$ 174,563 |
$ 179,442 |
$ 166,083 |
$ 161,638 |
$ 681,726 |
|
|
|
|
|
|
Bookings |
|
|
|
|
|
Aerospace |
$ 117,761 |
$ 139,486 |
$ 130,588 |
$ 141,113 |
$ 528,948 |
Test Systems |
21,241 |
14,560 |
104,782 |
16,836 |
157,419 |
Total Bookings |
$ 139,002 |
$ 154,046 |
$ 235,370 |
$ 157,949 |
$ 686,367 |
|
|
|
|
|
|
Backlog* |
|
|
|
|
|
Aerospace |
$ 204,545 |
$ 221,797 |
$ 223,769 |
$ 233,955 |
N/A |
Test Systems |
122,296 |
79,648 |
146,964 |
144,514 |
N/A |
Total Backlog |
$ 326,841 |
$ 301,445 |
$ 370,733 |
$ 378,469 |
N/A |
|
|
|
|
|
|
Book:Bill Ratio |
|
|
|
|
|
Aerospace |
0.97 |
1.14 |
1.02 |
0.99 |
1.03 |
Test Systems |
0.40 |
0.25 |
2.80 |
0.87 |
0.94 |
Total Book:Bill |
0.80 |
0.86 |
1.42 |
0.98 |
1.01 |
|
|
|
|
|
|
* On January 14, 2015, Astronics
Corporation acquired Armstrong Aerospace, Inc. which included a
backlog of approximately $11.4 million for the Aerospace
segment. |
CONTACT: 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
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