Astronics Corporation Reports 14% Increase in Fourth Quarter 2010 Sales

    --  Fourth quarter sales of $51.8 million sets a new quarterly record
    --  Diluted earnings per share of $0.39 in 2010 fourth quarter
    --  Record sales of $195.8 million in 2010 with diluted earnings per share
        of $1.32
    --  Expect 2011 revenue to grow to range of $205 Million to $215 Million

EAST AURORA, N.Y.--(BUSINESS WIRE)-- 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 fourth quarter and year ended December 31, 2010.



                 Three Months Ended                  Year Ended

                 Dec 31,       Dec 31,     %         Dec 31,     Dec 31,      %

                 2010          2009        Change    2010        2009         Change

Sales            $ 51,823    $ 45,576      13.7%    $ 195,754    $ 191,201    2.4%

Gross profit     $ 12,443    $ 9,899       25.7%    $ 47,567     $ 37,273     27.6%

Gross margin       24.0%       21.7%                  24.3%        19.5%

SG&A             $ 6,028     $ 5,403       11.6%    $ 23,224     $ 24,114     (3.7)%

SG&A percent       11.6%       11.9%                  11.9%        12.6%
to sales

ImpairmentLoss   $ -         $ 19,381               $ -          $ 19,381

Income (loss)
from             $ 6,415     $ (14,885)    143.1%   $ 24,343     $ (6,222)    491.2%
Operations

Operating
margin (loss)      12.4%       (32.7)%                12.4%        (3.3)%
%

Net Income       $ 4,471     $ (9,655)     146.3%   $ 14,948     $ (3,802)    493.2%
(loss)

Net Income         8.6%        (21.2)%                7.6%         (2.0)%
(loss) %



Peter J. Gundermann, President and Chief Executive Officer, commented, "We continued to experience strong demand at the end of 2010, resulting in sales records for both the quarter and the year. The strong sales resulted in solid, near record annual earnings as well. Although bookings in the fourth quarter trailed that of the third, we still managed to accumulate record orders of $210.2 million for the year, giving us confidence that 2011 will demonstrate solid results as well."

Fourth Quarter Review

Sales in the fourth quarter of 2010 were up 13.7% from the prior year's fourth quarter. Aerospace sales, which represented 90% of consolidated sales in the fourth quarter, increased 27.8% to $46.8 million in the quarter. Test Systems sales declined by $3.9 million to $5.1 million when compared with the fourth quarter of 2009.

Consolidated gross margin and operating margin in the 2010 fourth quarter improved appreciably over the prior-year period reflecting strong operating leverage in the Aerospace segment on higher sales volume, a lower cost structure from actions taken in 2009 to reduce expenses and improve productivity, and a favorable sales mix. Also contributing to operating margin expansion was a $0.2 million decline in amortization expense on purchased intangible assets in the Test Systems segment. Engineering and development (E&D) costs, which are included in cost of sales, were approximately $0.9 million higher at $7.3 million in the 2010 fourth quarter compared with $6.4 million in the prior year's fourth quarter.

Selling, general and administrative (SG&A) expense in the 2010 fourth quarter increased by $0.6 million compared with the 2009 fourth quarter. The increase was primarily due to higher compensation and benefit-related costs.

Earnings per diluted share were $0.39 in the fourth quarter of 2010 compared with a loss per diluted share of $(0.90) in last year's fourth quarter. Included in the 2009 fourth quarter was a $19.4 million non-cash pre-tax, or $1.15 per diluted share after tax, impairment charge taken against goodwill and other intangible assets related to the Test Systems segment.

Twelve-Month Review

Sales for the twelve months of 2010 were up 2.4% from the same period last year, reflecting a $24.0 million, or 15%, increase in Aerospace sales, which more than offset a $19.4 million decline in Test Systems sales.

The improved margins for the year ended December 31, 2010 were a result of higher margins in the Aerospace segment due to leverage on increased sales volumes, a more efficient cost structure, and a favorable sales mix compared with 2009. Also contributing to the operating margin expansion was a $2.0 million reduction in amortization expense on purchased intangible assets in the Test Systems segment. SG&A expense as a percentage of sales was 11.9% in 2010 compared with 12.6% in 2009. E&D costs were $28.3 million and $27.0 million in 2010 and 2009, respectively.

Net income in 2010 was $14.9 million compared with a net loss of $(3.8) million, an increase of 493%. Diluted earnings per share increased to $1.32 from a loss per share $(0.35) last year. Last year's net income was impacted by the $19.4 million pre-tax, or $1.14 per diluted share after tax, impairment charge previously discussed.

Aerospace Segment Review

The Aerospace segment fourth-quarter and year-to-date sales increase was primarily a result of increased cabin electronics sales to the commercial transport market as increased installations of in-flight entertainment and in-seat power systems by commercial airlines resulted in greater demand for Astronics cabin electronics products. For the year, lower sales to the military aerospace market reflect timing associated with sales of our power conditioning unit for the Tactical Tomahawk missile program. The 2010 increase in the business jet market was primarily related to increased revenue associated with the airframe power product line offset by lower sales of lighting products. Higher FAA/Airport sales were driven by two airfield projects that were completed during the year.

Peter Gundermann commented, "The improved financial condition of the airlines, the growing use of electronic devices by airline passengers and the competition among airlines to improve the passenger experience is resulting in a greater number of installations of in-flight entertainment systems on aircraft and ultimately driving the demand for our market-leading cabin electronics products."

Segment operating margin improvements for the quarter and full-year periods compared with 2009 were due to the leverage provided on higher sales volume, the effect of cost reductions and favorable product mix.

Bookings for the Aerospace segment during the fourth quarter were $40.4 million, up 37.9% over $29.3 million in the fourth quarter of 2009, but down 30.7% from bookings of $58.2 million in the trailing third quarter of 2010. Backlog at the end of the fourth quarter was $91.6 million.

Test Systems Segment Review

Test Systems segment sales in the 2010 fourth quarter were $5.1 million compared with $9.0 million for the same period in 2009. For the twelve months of 2010, sales were $16.2 million compared with $35.6 million in the 2009 period.

Test Systems' operating loss for the fourth quarter of 2010 was $0.4 million compared with an operating loss of $18.6 million in the same period last year. For the year, Test Systems' operating loss was $1.8 million in 2010 compared with an operating loss of $18.2 million in 2009. The decreased operating losses for both the 2010 fourth quarter and full year were due primarily to the $19.4 million impairment charge taken in 2009 for goodwill and other intangible assets of the segment. Excluding the impact of the impairment charges, the operating loss increased approximately $3.0 million for the year. This was due primarily to low sales volume which was somewhat offset by decreased amortization expense related to purchased intangible assets of approximately $2.0 million.

Test Systems bookings in the fourth quarter were $1.2 million compared with $0.7 million in the fourth quarter of 2009, but down from the trailing 2010 third quarter which had bookings of $4.4 million. Backlog was $8.2 million at the end of the fourth quarter.

Balance Sheet

Cash generated from operations during 2010 was $16.5 million compared with $31.1 million in 2009. The decrease of $14.6 million was mainly a result of increased investment in net working capital components in 2010.

Capital expenditures in 2010 were $3.6 million compared with $2.5 million in 2009. Payments made to reduce long-term debt during 2010 were $6.2 million compared with $15.0 million in 2009. The Company expects capital spending in 2011 to be approximately $5.0 million to $8.0 million.

At December 31, 2010, the cash balance was $22.7 million compared with $14.9 million at December 31, 2009.

Outlook

Backlog at December 31, 2010 was $99.8 million, below the backlog at the end of the trailing third quarter of 2010 of $110.0 million, but improved over backlog of $85.4 million at the end of the fourth quarter of 2009. Approximately $84.6 million, or 85%, of backlog is expected to ship by the end of 2011.

Mr. Gundermann concluded, "We anticipate another solid year in 2011, with sales in the range of $205 million to $215 million. However, we expect sales will become more dependent on new aircraft production and less on fleet retrofit programs. Customers continue to express strong interest across our entire product range, and assuming this interest turns into orders, the foreseeable future remains bright for Astronics."

Astronics anticipates that approximately $185 million to $192 million of projected revenue will be from its Aerospace segment, while approximately $20 million to $23 million of projected revenue will be from the Test Systems segment. In addition, the Company expects E&D expenditures, which is recorded in the cost of goods sold, to be approximately $28 million.

Fourth quarter 2010 Webcast and Conference Call

The Company will host a teleconference at 11:00 AM ET on Tuesday, February 8, 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 and entering conference ID number 364169. 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 364169. The telephonic replay will be available from 4:00 p.m. on the day of the call through Tuesday, February 15, 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 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 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       Twelve Months Ended

                                12/31/2010  12/31/2009   12/31/2010  12/31/2009

Sales                           $ 51,823    $ 45,576     $ 195,754   $ 191,201

Cost of products sold             39,380      35,677       148,187     153,928

Gross profit                      12,443      9,899        47,567      37,273

Gross margin                      24.0%       21.7%        24.3%       19.5%

Impairment loss                   -           19,381       -           19,381

Selling, general and              6,028       5,403        23,224      24,114
administrative

SG&A % to Sales                   11.6%       11.9%        11.9%       12.6%

Income (loss) from operations     6,415       (14,885)     24,343      (6,222)

Operating margin                  12.4%       (32.7)%      12.4%       (3.3)%

Interest expense, net             589         1,226        2,551       2,533

Other (income) expense            (24)        11           (37)        (1,009)

Income (loss) before tax          5,850       (16,122)     21,829      (7,746)

Income tax expense (benefit)      1,379       (6,467)      6,881       (3,944)

Net Income                      $ 4,471     $ (9,655)    $ 14,948    $ (3,802)

Basic earnings (loss) per       $ 0.41      $ (0.90)     $ 1.38      $ (0.35)
share:

Diluted earnings (loss) per     $ 0.39      $ (0.90)     $ 1.32      $ (0.35)
share:

Weighted average diluted          11,539      10,775       11,284      10,733
shares outstanding

Capital Expenditures            $ 994       $ 488        $ 3,568     $ 2,466

Depreciation and Amortization   $ 1,224     $ 1,693      $ 4,881     $ 7,342




ASTRONICS CORPORATION

CONSOLIDATED BALANCE SHEET DATA

(in thousands)

                                             12/31/2010   12/31/2009

                                             (Unaudited)

ASSETS:

Cash and cash equivalents                    $ 22,709     $ 14,949

Accounts receivable                            30,941       30,560

Inventories                                    37,763       31,909

Other current assets                           5,727        5,075

Property, plant and equipment, net             30,873       31,243

Other long-term assets                         3,342        3,763

Deferred taxes long-term                       6,883        8,131

Intangible assets                              5,040        5,591

Goodwill                                       7,610        7,493

Total Assets                                 $ 150,888    $ 138,714

LIABILITIES AND SHAREHOLDERS' EQUITY:

Current maturities of long term debt         $ 5,314      $ 6,238

Accounts payable and accrued expenses          25,971       23,398

Long-term debt                                 33,264       38,538

Other liabilities                              9,124        10,427

Shareholders' equity                           77,215       60,113

Total Liabilities and Shareholders' Equity   $ 150,888    $ 138,714




ASTRONICS CORPORATION

SEGMENT DATA

(Unaudited, $ in thousands)

                                Three Months Ended       Twelve Months Ended

                                12/31/2010  12/31/2009   12/31/2010  12/31/2009

Sales

Aerospace                       $ 46,773    $ 36,613     $ 179,586   $ 155,605

Test Systems                      5,050       8,963        16,168      35,596

Total Sales                     $ 51,823    $ 45,576     $ 195,754   $ 191,201

Operating Profit (Loss) and
Margins

Aerospace                       $ 7,845     $ 4,496      $ 30,120    $ 16,274

                                  16.8%       12.3%        16.8%       10.5%

Test Systems                      (435)       (18,649)     (1,806)     (18,219)

                                  (8.6)%      (208.1)%     (11.2)%     (51.2)%

Total Operating Profit (Loss)     7,410       (14,153)     28,314      (1,945)

                                  14.3%       (31.1)%      14.5%       (1.0)%

Corporate Expenses, Interest      1,560       1,969        6,485       5,801
and Other

Income (Loss) Before Income     $ 5,850     $ (16,122)   $ 21,829    $ (7,746)
Taxes





ASTRONICS CORPORATION

SALES BY MARKET

(Unaudited, $ in thousands)

              Three Months Ended               Twelve Months Ended              2010

                                      %                                %        YTD
              12/31/2010  12/31/2009           12/31/2010  12/31/2009
                                      change                           change   %

Aerospace
Segment

Commercial    $ 28,993    $ 21,532    35%      $ 109,956   $ 88,155    25%      56%
Transport

Military        9,600       8,247     16%        34,867      37,791    (8)%     18%

Business        5,291       4,767     11%        22,548      21,630    4%       12%
Jet

FAA/Airport     2,889       2,067     40%        12,215      8,029     52%      6%

Aerospace       46,773      36,613    28%        179,586     155,605   15%      92%
Total

Test
Systems
Segment

Military        5,050       8,963     (44)%      16,168      35,596    (55)%    8%

Total         $ 51,823    $ 45,576    14%      $ 195,754   $ 191,201   2%       100%





ASTRONICS CORPORATION

SALES BY PRODUCT

(Unaudited, $ in thousands)

              Three Months Ended               Twelve Months Ended              2010

                                      %                                %        YTD
              12/31/2010  12/31/2009           12/31/2010  12/31/2009
                                      change                           change   %

Aerospace
Segment

Cabin         $ 23,019    $ 15,825    45%      $ 86,511    $ 64,309    35%      45%
Electronics

Aircraft        16,289      14,917    9%         65,009      64,347    1%       33%
Lighting

Airframe        4,576       3,804     20%        15,851      18,920    (16)%    8%
Power

Airfield        2,889       2,067     40%        12,215      8,029     52%      6%
Lighting

Aerospace       46,773      36,613    28%        179,586     155,605   15%      92%
Total

Test
Systems         5,050       8,963     (44)%      16,168      35,596    (55)%    8%
Segment

Total         $ 51,823    $ 45,576    14%      $ 195,754   $ 191,201   2%       100%




ASTRONICS CORPORATION
ORDER AND BACKLOG TREND
(Unaudited, $ in thousands)

                      Q1          Q2          Q3           Q4            Total
                      2010        2010        2010         2010

                      4/3/2010    7/3/2010    10/2/2010    12/31/2010    2010

Sales

Aerospace           $ 43,190    $ 43,599    $ 46,024     $ 46,773      $ 179,586

Test Systems          3,746       3,490       3,882        5,050         16,168

Total Sales         $ 46,936    $ 47,089    $ 49,906     $ 51,823      $ 195,754

Bookings

Aerospace           $ 50,668    $ 46,227    $ 58,250     $ 40,378      $ 195,522

Test Systems          3,634       5,411       4,358        1,224         14,628

Total Bookings      $ 54,302    $ 51,638    $ 62,608     $ 41,602      $ 210,150

Backlog

Aerospace           $ 83,116    $ 85,744    $ 97,970     $ 91,573      $ 91,573

Test Systems          9,644       11,565      12,041       8,216         8,216

Total Backlog       $ 92,760    $ 97,309    $ 110,011    $ 99,789      $ 99,789

Book:Bill Ratio

Aerospace             1.17        1.06        1.27         0.86          1.09

Test Systems          0.97        1.55        1.12         0.24          0.90

Total Book:Bill       1.16        1.10        1.25         0.80          1.07




                      Q1          Q2          Q3           Q4            Total
                      2009        2009        2009         2009

                      4/4/2009    7/4/2009    10/3/2009    12/31/2009    2009

Sales

Aerospace           $ 41,818    $ 38,216    $ 38,958     $ 36,613      $ 155,605

Test Systems          8,197       8,808       9,628        8,963         35,596

Total Sales         $ 50,015    $ 47,024    $ 48,586     $ 45,576      $ 191,201

Bookings

Aerospace           $ 28,016    $ 34,605    $ 40,135     $ 29,270      $ 132,026

Test Systems          2,798       6,168       3,932        743           13,641

Total Bookings      $ 30,814    $ 40,773    $ 44,067     $ 30,013      $ 145,667

Backlog

Aerospace           $ 85,418    $ 81,807    $ 82,983     $ 75,639      $ 75,639

Test Systems          26,311      23,671      17,974       9,755         9,755

Total Backlog       $ 111,729   $ 105,478   $ 100,957    $ 85,394      $ 85,394

Book:Bill Ratio

Aerospace             0.67        0.91        1.03         0.80          0.85

Test Systems          0.34        0.70        0.41         0.08          0.38

Total Book:Bill       0.62        0.87        0.91         0.66          0.76




    Source: Astronics Corporation