Astronics Corporation (NASDAQ:ATRO), a leading
supplier of advanced technologies and products to the global
aerospace, defense, and semiconductor industries, today reported
financial results for the three months ended April 1, 2017.
Earnings per share for prior periods are adjusted for the 3 for 20
(15%) distribution of Class B Stock for shareholders of record on
October 11, 2016.
Three Months Ended
April 1,
2017
April 2,
2016
%
Change
Sales $ 152,396 $ 159,530 (4.5 )%
Gross profit
$ 38,317 $ 39,483 (3.0 )% Gross margin 25.1 % 24.7 %
SG&A $ 21,693 $ 21,884 (0.9 )% SG&A percent of sales
14.2 % 13.7 %
Income from Operations $ 16,624 $ 17,599 (5.5
)% Operating margin % 10.9 % 11.0 %
Net Income $ 11,587 $
11,485 0.9 % Net Income % 7.6 % 7.2 %
Peter J. Gundermann, President and Chief Executive Officer,
commented, “As anticipated, first quarter results were similar to
the last few quarters of 2016. We expect revenue to grow
sequentially through the remainder of this year and continue to
believe we are well-positioned generally. However, we are also
sensitive to some gathering headwinds, so we have moved our revenue
range down accordingly. Nonetheless, we are making excellent
progress on a wide range of substantial opportunities which we
believe will become apparent this year, justifying our enthusiasm
for the future.”
Consolidated Review
First Quarter 2017 Results
Consolidated sales were down $7.1 million from the same period
last year. Aerospace segment sales of $136.8 million were down $1.5
million and Test Systems segment sales of $15.6 million were down
$5.7 million.
Consolidated gross margin was 25.1% in the first quarter of 2017
compared with 24.7% in the first quarter of 2016. The solid margin
performance was the result of improved operational efficiencies and
product mix which offset the impact of lower sales volume.
Engineering and Development (“E&D”) costs were $22.9 million in
the quarter, down slightly from $23.3 million of E&D costs in
last year’s first quarter. As a percent of sales, E&D was 15.0%
and 14.6% in the first quarters of 2017 and 2016, respectively.
Selling, general and administrative (“SG&A”) expenses were
$21.7 million, or 14.2% of sales, in the first quarter of 2017
compared with $21.9 million, or 13.7% of sales, in the same period
last year.
The effective tax rate for the quarter was 25.2%, compared with
30.4% in the first quarter of 2016. The 2017 first quarter tax rate
was favorably impacted by excess tax benefits associated with
employee share-based compensation and also benefited from decreases
in foreign tax rates.
Net income was $11.6 million, or $0.38 cents per diluted
share.
During the first quarter, the Company repurchased approximately
148,000 shares at an aggregate cost of $4.4 million under its share
repurchase program. Since the inception of the program in February
2016, the Company has repurchased approximately 671,000 shares at
an aggregate cost of $22.0 million.
Aerospace Segment Review (refer to sales by market and
segment data in accompanying tables)
Aerospace First Quarter 2017
Results
Aerospace segment sales decreased by $1.5 million, or 1.1%, when
compared with the prior year’s first quarter to $136.8 million.
Electrical Power & Motion sales decreased $2.9 million, or
3.9%, largely driven by lower sales of in-seat and cabin power
products. Systems Certification sales decreased by $2.4 million on
lower project activity. These decreases were partially offset by a
$2.1 million increase in sales of Lighting & Safety products
and a $1.7 million increase in Avionics products sales.
Aerospace operating profit for the first quarter of 2017 was
$19.8 million, or 14.4% of sales, compared with $18.7 million, or
13.5% of sales, in the same period last year. Aerospace E&D
costs remained consistent when compared with the same period last
year at $20.3 million.
Aerospace orders in the first quarter of 2017 were $122.8
million. Backlog was $205.2 million at the end of the first quarter
of 2017.
Mr. Gundermann commented, “While our Aerospace revenue has been
improving sequentially the last two quarters, it is apparent that
we are working our way through a soft patch in the market, with
some program delays, market pricing pressure, and the slowing
conditions in the widebody market. Still, we anticipate posting a
new record in Aerospace revenue for 2017.”
Test Systems Segment Review (refer to sales by market and
segment data in accompanying tables)
Test Systems First Quarter 2017
Results
Sales in the first quarter of 2017 decreased approximately $5.7
million to $15.6 million compared with the same period in 2016, a
decrease of 26.6%. Sales to the Semiconductor market decreased $2.5
million and sales to the Aerospace and Defense market decreased
$3.2 million compared with the same period in 2016.
Operating profit was $0.3 million, or 2.0% of sales, compared
with $2.2 million, or 10.4% of sales, in last year’s first quarter.
The decrease in operating profit was the result of lower volumes.
E&D costs were $2.5 million, down from $3.0 million in the
first quarter of 2016.
Orders for the Test Systems segment in the quarter were $24.2
million, for a book-to-bill ratio of 1.56 for the quarter. Backlog
was $47.6 million at the end of the first quarter of 2017.
Mr. Gundermann commented, “Although our Test business had a weak
start to the year, we saw relatively strong bookings in the
quarter, and expect results to improve markedly as we move through
2017. We have seen some program awards slide, but believe we are
operating in a target rich environment which will produce a number
of substantial wins yet this year.”
2017 Outlook
Consolidated sales in 2017 are forecasted to be in the range of
$635 million to $690 million, which represents a decline from the
high end of the previous range. Approximately $545 million to $580
million of revenue is expected from the Aerospace segment and $90
million to $110 million from the Test Systems segment.
Consolidated backlog at April 1, 2017 was $252.7 million,
of which approximately $218.7 million is expected to ship in
2017.
Assuming no change in the federal statutory rate, the effective
tax rate for 2017 is expected to be in the range of 28% to 31%.
Capital equipment spending in 2017 is expected to be in the
range of $21 million to $25 million.
E&D costs are expected to be in the range of $93 million to
$95 million excluding the engineering costs from the acquired
Custom Control Concepts business.
Mr. Gundermann concluded, “We are disappointed to be lowering
our revenue forecast so early in the year, but we are facing some
headwinds along the lines of schedule delays, pricing pressure, and
weakening conditions in certain of our markets, including in
particular the widebody commercial airplane market. At the same
time, we continue to hold leading market positions and are making
important progress in key areas. We expect 2017 to be a year of
progress compared with 2016, and that we will carry strong momentum
into the future.”
First Quarter 2017 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 (412)
317-6671 and enter conference ID number 13659615. The telephonic
replay will be available from 2:00 p.m. on the day of the call
through Thursday, May 11, 2017. 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
advanced technologies and products to the global aerospace, defense
and semiconductor industries. Astronics’ products and services
include advanced, high-performance electrical power generation and
distribution systems, seat motion solutions, lighting and 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.
Through its wholly owned subsidiaries, Astronics 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 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 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 4/1/2017 4/2/2016
Sales $ 152,396 $ 159,530
Cost of products sold 114,079 120,047 Gross
profit 38,317 39,483
Gross margin 25.1 %
24.7 % Selling, general and administrative
21,693 21,884
SG&A % of sales 14.2 %
13.7 % Income from operations 16,624 17,599
Operating margin 10.9 % 11.0 %
Interest expense, net 1,133 1,087
Income before tax 15,491 16,512 Income tax expense 3,904
5,027
Net income $ 11,587
$ 11,485 Net income % of sales
7.6 % 7.2 % *Basic
earnings per share: $ 0.40 $ 0.39 *Diluted earnings per share: $
0.38 $ 0.38 *Weighted average diluted shares outstanding (in
thousands) 30,182 30,359 Capital expenditures $ 2,767 $
2,450 Depreciation and amortization $ 6,298 $ 6,546
*April 2, 2016 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 11, 2016.
ASTRONICS CORPORATION
CONSOLIDATED
BALANCE SHEET DATA
($ in thousands) (unaudited)
4/1/2017
12/31/2016
ASSETS
Cash and cash equivalents $ 10,763 $ 17,901 Accounts receivable and
uncompleted contracts 112,781 109,415 Inventories 122,184 116,597
Other current assets 10,674 11,160 Property, plant and equipment,
net 122,159 122,812 Other long-term assets 13,902 13,149 Intangible
assets, net 95,529 98,103 Goodwill 115,294 115,207
Total
assets $ 603,286 $ 604,344
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current maturities of long term debt $ 2,582 $ 2,636 Accounts
payable and accrued expenses 59,606 60,756 Customer advances and
deferred revenue 20,937 23,168 Long-term debt 138,914 145,484 Other
liabilities 35,147 34,851 Shareholders' equity 346,100
337,449
Total liabilities and shareholders' equity $
603,286 $ 604,344
ASTRONICS CORPORATION
Segment
Data
(Unaudited, $ in thousands)
Three Months Ended
4/1/2017 4/2/2016 Sales Aerospace $
136,827 $ 138,649 Less Inter-segment — (340 ) Total
Aerospace 136,827 138,309 Total Test Systems 15,569
21,221
Total consolidated sales 152,396
159,530 Operating profit and margins Aerospace
19,754 18,691 14.4 % 13.5 % Test Systems 318 2,210 2.0 %
10.4 %
Total operating profit 20,072 20,901
Interest expense 1,133 1,087 Corporate expenses and other 3,448
3,302
Income before taxes $ 15,491
$ 16,512
ASTRONICS
CORPORATION
SALES BY
MARKET
(Unaudited, $ in thousands)
Three Months
Ended
4/1/2017
4/2/2016
%
change
2017
YTD
Aerospace Segment Commercial Transport $ 109,723 $ 113,396
-3.2 % 72.1 % Military 15,146 12,280 23.3 % 9.9 % Business Jet
7,536 6,525 15.5 % 4.9 % Other 4,422 6,108 -27.6 %
2.9 %
Aerospace Total 136,827 138,309 -1.1 % 89.8 %
Test Systems Segment Semiconductor 4,631 7,137 -35.1
% 3.0 % Aerospace & Defense 10,938 14,084 -22.3 %
7.2 %
Test Systems Total 15,569 21,221
-26.6 % 10.2 %
Total $ 152,396 $
159,530 -4.5 %
ASTRONICS
CORPORATION
SALES BY PRODUCT
LINE
(Unaudited, $ in thousands)
Three Months
Ended
4/1/2017
4/2/2016
%
change
2017
YTD
Aerospace Segment Electrical Power & Motion $
72,444 $ 75,392 -3.9 % 47.6 % Lighting & Safety 42,670 40,566
5.2 % 28.0 % Avionics
9,136
7,474 22.2 % 6.0 % Systems Certification 2,159 4,606 -53.1 % 1.4 %
Structures 5,996 4,163 44.0 % 3.9 % Other 4,422 6,108
-27.6 % 2.9 %
Aerospace Total 136,827 138,309 -1.1 %
89.8 %
Test Systems 15,569 21,221 -26.6
% 10.2 %
Total $ 152,396 $ 159,530
-4.5 %
ASTRONICS CORPORATION
ORDER AND BACKLOG
TREND
(Unaudited, $ in thousands)
Q2
2016
Q3
2016
Q4
2016
Q1
2017
TrailingTwelveMonths
07/02/2016 10/1/2016
12/31/2016 4/1/2017
4/1/2017 Sales Aerospace $ 142,501 $ 125,179 $
128,052 $ 136,827 $ 532,559 Test Systems 21,925
29,920 26,016 15,569
93,430
Total Sales $ 164,426
$ 155,099 $ 154,068
$ 152,396 $ 625,989
Bookings Aerospace $ 163,532 $ 122,821 $ 113,756 $ 122,836 $
522,945 Test Systems 17,941 13,694
23,118 24,236 78,989
Total
Bookings $ 181,473 $ 136,515
$ 136,874 $ 147,072
$ 601,934 Backlog Aerospace $
235,800 $ 233,442 $ 219,146 $ 205,155 Test Systems 58,011
41,785 38,887 47,554
Total Backlog $ 293,811
$ 275,227 $ 258,033
$ 252,709 N/A
Book:Bill Ratio Aerospace 1.15 0.98 0.89 0.90 0.98 Test
Systems 0.82 0.46 0.89
1.56 0.85
Total Book:Bill
1.10 0.88 0.89
0.97 0.96
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170504005444/en/
Company:Astronics CorporationDavid C. Burney,
716-805-1599, ext. 159Chief Financial
Officerdavid.burney@astronics.comorInvestor Relations:Kei
Advisors LLCDeborah K. Pawlowski,
716-843-3908dpawlowski@keiadvisors.com
Astronics (NASDAQ:ATRO)
Historical Stock Chart
From Mar 2024 to Apr 2024
Astronics (NASDAQ:ATRO)
Historical Stock Chart
From Apr 2023 to Apr 2024