Astronics Corporation Reports Net Income of $4.5 Million on Sales of $41.4 Million in Second Quarter 2007
-- Sales increased in all markets: commercial, military and business jet
-- Full year sales guidance raised to range of $150 to $155 million
EAST AURORA, N.Y.--(BUSINESS WIRE)--
Astronics Corporation (NASDAQ: ATRO), a trusted leader in innovative, high performance lighting, electrical generation, control and distribution systems for the global aerospace industry, today reported sales of $41.4 million for the second quarter of 2007 which ended June 30, 2007, a 43% increase compared with sales of $28.8 million in the same period last year. Net income for the second quarter of 2007 was $4.5 million, or $0.53 per diluted share, compared with $2.0 million, or $0.24 per diluted share, in the same period the prior year.
Sales in all three of Astronics' markets grew in the second quarter compared with the second quarter of 2006, led by sales to the commercial transport market which had second quarter 2007 sales of $27.7 million, up 66% compared with $16.7 million in the same period the prior year. The increase was primarily driven by demand for the Company's cabin electronics products, which provide power for in-flight entertainment systems and personal electronic devices. This product line had sales of $24.2 million in the quarter, up 94% from the prior year period. Sales to the business jet market increased 21% to $6.6 million, driven by strong demand and the ramp up of new aircraft programs that include more Astronics' content. Military sales were $6.8 million, a 5% increase from the second quarter of 2006.
Costs and Expenses
Gross margin improved in the second quarter to 27.6% compared with 23.5% in the second quarter of 2006. Greater operating leverage on higher sales was somewhat offset by a $1.1 million increase in Engineering and Development (E&D) costs. E&D was $3.6 million in the 2007 second quarter.
Sales grew at a faster pace than selling, general and administrative (SG&A) spending in the second quarter. SG&A expenses were $4.4 million for the second quarter of 2007, or 10.6% of sales, compared with $3.4 million, or 11.9% of sales, in the second quarter of 2006. The dollar increase in expenses was a result of higher staffing and compensation-related costs as the Company continues to add to its employee base to meet higher demand for its products.
Six-Month Review
Sales for the first six months of 2007 were $84.2 million compared with $54.1 million in the first six months of the prior year, a 56% increase. Gross margin for the first half of the year was 27.4% compared with 22.5% in the first six months of 2006. Engineering and development expenses for the six-month period in 2007 were $7.2 million, up $2.1 million from the same period the prior year. SG&A expenses decreased to 10.3% of sales, or $8.7 million, in the first half of 2007 compared with 11.9%, or $6.5 million, in the same period the prior year. Operating margin improved to 17.1% for the first half of 2007 compared with 10.6% last year's first six months.
Net income was $9.2 million, or $1.08 per diluted share, for the first six months of 2007 compared with $3.3 million, or $0.40, respectively, in the first half of 2006.
During the second quarter, the Company closed on a $6 million, 20-year tax exempt variable rate Industrial Revenue Bond to fund the expansion of its operations in Western New York.
Capital expenditures for the second quarter and first half of 2007 were $2.9 million and $5.9 million, respectively. Increases in expenditures over 2006 have mostly been a direct result of the Company's investment in machinery and equipment to add production capacity to support the expansion efforts in its East Aurora, New York and Redmond, Washington facilities.
Outlook
Bookings were $38.7 million in the second quarter of 2007 compared with $23.9 million in the same period the prior year and $40.4 million in the first quarter of 2007. At the end of the second quarter, backlog was $94.3 million, $62 million of which is planned to ship during the last six months of 2007.
Peter J. Gundermann President and CEO, noted, "We are raising our top line expectations for the year from $140 million to a range of $150 - $155 million because of our strong first half performance. For the second half of the year, we expect our cabin electronics sales to moderate and, although we expect to see continued volume increases on certain new aircraft programs as they ramp up, there is risk that the ramp up will go slower than expected. Additionally, we see several opportunities for new platforms and expect that E&D expenses, which are already at a record level for the Company, to continue to grow."
Second Quarter 2007 Webcast and Conference Call
The Company will host a teleconference at 11 a.m. ET today. During the teleconference, Peter J. Gundermann, President and CEO, and David C. Burney, 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 the following ways:
-- The live webcast can be found at http://www.astronics.com.
Participants should go to the website 10 - 15 minutes prior to
the scheduled conference in order to register and download any
necessary audio software.
-- The teleconference can be accessed by dialing (973) 935-2970
approximately 5 - 10 minutes prior to the call.
To listen to the archived call:
-- The archived webcast will be at http://www.astronics.com. A
transcript will also be posted once available.
-- A replay can also be heard by calling (973) 341-3080, and
entering the pin number, 8977984.
The telephonic replay will be available from 2 p.m. ET the day of the call through 11:59 p.m. ET August 9, 2007.
ABOUT ASTRONICS CORPORATION
Astronics Corporation is a trusted leader in innovative, high performance lighting, electrical generation, control and distribution systems for the global aerospace industry. Its strategy is to expand the value and content it provides to various aircraft platforms through product development and acquisition. Astronics Corporation, and its wholly-owned subsidiaries Astronics Advanced Electronic Systems Corp. and Luminescent Systems Inc., have a reputation for high quality designs, exceptional responsiveness, strong brand recognition and best-in-class manufacturing practices.
For more information on Astronics and its products, visit its website at www.Astronics.com.
Safe Harbor Statement
This press 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 expression. 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 industry, 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 press 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
6/30/2007 7/1/2006 6/30/2007 7/1/2006
----------------------------------------------
Sales $ 41,368 $ 28,832 $ 84,243 $ 54,095
Cost of products sold 29,933 22,066 61,158 41,917
Gross margin 27.6% 23.5% 27.4% 22.5%
Selling general and
administrative 4,404 3,443 8,680 6,462
----------------------------------------------
Income from operations 7,031 3,323 14,405 5,716
Operating margin 17.0% 11.5% 17.1% 10.6%
Interest expense, net 380 219 676 418
Other (income) expense (3) (22) (11) (34)
----------------------------------------------
Income before tax 6,654 3,126 13,740 5,332
Income taxes 2,153 1,163 4,544 2,051
----------------------------------------------
Net Income $ 4,501 $ 1,963 $ 9,196 $ 3,281
==============================================
Basic earnings per
share: $ 0.56 $ 0.25 $ 1.14 $ 0.41
Diluted earnings per
share: $ 0.53 $ 0.24 $ 1.08 $ 0.40
Weighted average
diluted shares
outstanding 8,535 8,223 8,494 8,183
----------------------------------------------------------------------
Capital Expenditures $ 2,872 $ 962 $ 5,917 $ 1,607
Depreciation and
Amortization $ 801 $ 636 $ 1,571 $ 1,259
----------------------------------------------------------------------
ASTRONICS CORPORATION
ORDER AND BACKLOG TREND
($, in
thousands) 2006 2007
Twelve
Q1 2006 Q2 2006 Q3 2006 Q4 2006 Months Q1 2007 Q2 2007
4/1/06 7/1/06 9/30/06 12/31/06 12/31/06 3/31/07 6/30/07
----------------------------------------------------------------------
Sales $25,263 $28,832 $27,752 $ 28,920 $110,767 $42,875 $41,368
----------------------------------------------------------------------
Net Income $ 1,318 $ 1,963 $ 1,648 $ 807 $ 5,736 $ 4,695 $ 4,501
----------------------------------------------------------------------
Bookings $23,850 $23,929 $25,985 $ 40,411 $114,175 $40,351 $38,711
----------------------------------------------------------------------
Backlog $94,706 $89,803 $88,036 $ 99,527 $ 99,527 $97,003 $94,346
----------------------------------------------------------------------
Book:Bill 0.94 0.83 0.94 1.40 1.03 0.94 0.94
----------------------------------------------------------------------
ASTRONICS CORPORATION
CONSOLIDATED BALANCE SHEET DATA
----------------------------------------------------------------------
(unaudited)
(in thousands)
6/30/2007 12/31/2006
--------------------
ASSETS:
-------------------------------------------------
Cash and cash equivalents $ 1,180 $ 222
Accounts receivable 27,862 17,165
Inventories 37,744 31,570
Other current assets 3,020 2,699
Property, plant and equipment, net 28,107 23,436
Other assets 9,425 7,446
--------------------
Total Assets $107,338 $82,538
========= ==========
LIABILITIES AND SHAREHOLDERS' EQUITY:
-------------------------------------------------
Current maturities of long term debt $ 939 $ 923
Note payable 15,300 8,100
Accounts payable and accrued expenses 26,819 25,196
Long-term debt 15,060 9,426
Other liabilities 7,563 7,545
Shareholders' equity 41,657 31,348
--------------------
Total liabilities and shareholders' equity $107,338 $82,538
====================
ASTRONICS CORPORATION
SALES BY PRODUCT
($, in thousands)
Three Months Ended
6/30/2007 7/1/2006 % change
---------------------------
Cabin Electronics $24,220 $12,459 94%
Cockpit Lighting 8,939 7,209 24%
Airframe Power 3,663 4,396 -17%
Cabin Lighting 2,406 2,276 6%
Exterior Lighting 1,830 2,229 -18%
Other 310 263 18%
---------------------------
Total $41,368 $28,832 43%
---------------------------
Six Months Ended
6/30/2007 7/1/2006 % change 2007 YTD %
--------------------------- ----------
Cabin Electronics $46,752 $21,088 122% 56%
Cockpit Lighting 17,013 15,283 11% 20%
Airframe Power 11,283 8,562 32% 13%
Cabin Lighting 4,475 4,461 0% 5%
Exterior Lighting 4,085 3,978 3% 5%
Other 635 723 -12% 1%
--------------------------- ----------
Total $84,243 $54,095 56% 100%
--------------------------- ----------
ASTRONICS CORPORATION
SALES BY MARKET
($, in thousands)
Three Months Ended
6/30/2007 7/1/2006 % change
---------------------------
Commercial Transport $27,717 $16,674 66%
Military 6,766 6,448 5%
Business Jet 6,575 5,447 21%
Other 310 263 18%
---------------------------
Total $41,368 $28,832 43%
---------------------------
Six Months Ended
6/30/2007 7/1/2006 % change 2007 YTD %
--------------------------- ----------
Commercial Transport $56,317 $29,455 91% 67%
Military 12,964 13,589 -5% 15%
Business Jet 14,327 10,328 39% 17%
Other 635 723 -12% 1%
--------------------------- ----------
Total $84,243 $54,095 56% 100%
--------------------------- ----------
Source: Astronics Corporation
Released August 2, 2007
