Astronics Corporation Reports Record Operating Income on 28% Sales Growth for Third Quarter 2026

• Third quarter sales increased 28.5% to a record $271.7 million
• Record operating income was $54.0 million, or 19.9% of sales; adjusted operating income¹ was $51.0 million, or 18.8% of sales
• Third quarter net income was $52.2 million, or $1.08 per diluted share; adjusted EBITDA¹ was $59.3 million, or 21.8% of sales
• Record Aerospace sales of $245.5 million delivered Aerospace operating margin of 23.4%; adjusted Aerospace operating margin¹ was 22.5%
• Quarterly bookings reached $271.1 million for book-to-bill of 1.00 and backlog was $780.0 million at quarter end; Aerospace book-to-bill at 1.05, over 1:1 for five consecutive quarters
• Generated $25.8 million in cash from operations
• Maintaining 2026 revenue guidance of $1.02 billion to $1.04 billion

EAST AURORA, N.Y.--(BUSINESS WIRE)-- Astronics Corporation (Nasdaq: ATRO) (“Astronics” or the “Company”), 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 October 3, 2026. Financial results include the acquisition of Bühler Motor Aviation (“BMA”) on October 13, 2025.

Peter J. Gundermann, Chairman, President and Chief Executive Officer, commented, “We delivered a strong third quarter, with record sales and operating income and an adjusted EBITDA margin near its all-time high. These results reflect disciplined operational execution and strong demand across our markets. Bookings were a solid $271.1 million following the prior quarter that had benefited from a couple of large program awards. We expect momentum to continue as we head into the final quarter of the year.”

Third Quarter Results

Third Quarter 2026 Results (compared with the prior-year period, unless noted otherwise)

Growth in sales was driven by strong results in both the Aerospace and Test Systems segments. Aerospace sales increased $52.7 million, or 27.4%, while Test Systems sales grew $7.5 million, or 40.0%.

Gross profit increased $29.5 million to $94.0 million while gross margin expanded 410 basis points to 34.6% of sales. Gross profit growth and margin expansion were primarily attributable to higher volume, improved productivity, and $1.9 million in tariff refunds.

Selling, general and administrative expenses (“SG&A”) decreased $0.5 million. A favorable outcome in the UK patent infringement appeal resulted in a refund of approximately $4.4 million in damages and associated legal fees, and the Company received a $1.0 million favorable settlement from an unrelated matter. These benefits were largely offset by higher wages and benefits, higher incentive-based compensation expenses driven by increased profitability, and incremental expenses related to the acquired BMA business in 2025. R&D was down $0.9 million reflecting the timing of projects.

Operating margin expanded 900 basis points and adjusted operating margin² expanded 650 basis points reflecting strong operating leverage from higher volume and improved productivity in the Aerospace segment. Operating profit and margin also benefited from improved performance in the Test Systems segment.

Interest expense was down $1.1 million, or 37.1%, on lower debt balances and reduced rates following the September 2025 refinancing activities. A tax benefit of $0.2 million was recorded on pretax income of $52 million for the quarter, as the benefit from a partial reversal of the valuation allowance, R&D tax credits, and the tax deductibility of R&D expenses more than offset the otherwise expected income tax expense.

Consolidated net income of $1.08 per diluted share improved from a net loss of $0.26 per diluted share in the prior-year period. The prior year’s net loss included the impact of a $32.6 million Loss on Settlement of Debt from certain costs incurred from the partial repurchase of convertible notes due in 2030.

Adjusted EBITDA² increased 81.4% to $59.3 million, and adjusted EBITDA margin² expanded 630 basis points to a record 21.8% of consolidated sales.

Bookings of $271.1 million in the quarter resulted in a book-to-bill ratio of 1.00:1. For the trailing twelve months, bookings totaled $1.12 billion and the book-to-bill ratio was 1.12:1. Backlog at the end of the quarter was $780.0 million.

Aerospace Segment Review (compared with the prior-year period, unless noted otherwise)

Aerospace segment sales of $245.5 million increased $52.7 million, or 27.4%. Sales in the Commercial Transport market increased $43.0 million, or 28.8%. Growth was primarily related to increased demand for inflight entertainment & connectivity (“IFEC”), seat motion and lighting and safety products. General Aviation sales increased $7.2 million, or 51.7%, to $21.1 million due to higher IFEC product sales. Military Aircraft sales increased $1.5 million, or 5.3%, to $29.0 million from higher sales of flight critical airframe power products.

Aerospace segment operating profit was $57.6 million, or 23.4% of sales, a 720 basis point improvement compared with the prior-year period. The improvement reflected operating leverage on higher volume, improved production efficiencies, $1.9 million in tariff refunds, and a $4.4 million benefit from the refund of litigation-related expenses and legal reserve adjustments related to the favorable outcome of the previously discussed UK patent dispute appeal. Adjusted Aerospace operating profit² increased 71.5% to $55.1 million, or 22.5% of sales, a 580-basis point expansion over the comparator quarter.

Aerospace bookings were $258.3 million for a book-to-bill ratio of 1.05:1. Record backlog for the Aerospace segment was $670.0 million at quarter end.

Mr. Gundermann commented, “Our Aerospace business delivered excellent third quarter results, achieving record quarterly sales and a 22.5% adjusted operating margin. Growth was broad-based, led by strong demand across multiple product lines in Commercial Transport and continued strength in General Aviation. We ended the quarter with record Aerospace backlog of $670.0 million, reflecting the sustained strength of our order pipeline. We are very pleased by the trajectory of this business as we head into the fourth quarter.”

Test Systems Segment Review (compared with the prior-year period, unless noted otherwise)

Test Systems segment sales of $26.2 million were up $7.5 million from the comparator quarter in 2025 driven by strong order flow and production for the U.S. Army’s TS-4549/T Radio Test program. This was partially offset by a $2.2 million revision of estimated costs to complete certain long-term mass transit contracts which reduced revenue recognized in the period.

The TS-4549/T program drove $5.3 million of revenue in the quarter. The program is expected to reach full rate production in the first quarter of 2027.

Test Systems segment operating profit was $3.9 million, compared with near break-even in the third quarter of 2025.

Bookings for the Test Systems segment in the quarter were $12.8 million for a book-to-bill ratio of 0.49:1. Bookings over the last twelve months were $121.8 million for a book-to-bill of 1.41:1. Backlog for the Test Systems segment was $109.9 million at quarter end.

Mr. Gundermann commented, “Our Test business continued to build momentum in the third quarter, with improved operating profit as production on the U.S. Army's TS-4549/T Radio Test program progressed. We expect continued advancement on this program to drive further improvement in operating performance over the coming quarters, positioning the business for a strong 2027.”

Balance Sheet and Liquidity

Cash provided by operations in the third quarter of 2026 was $25.8 million, reflecting higher cash earnings offset by higher working capital requirements. Working capital increased due to higher receivables based on timing and increased inventory levels to support anticipated revenue growth in 2027. Capital expenditures in the quarter were $4.2 million and $21.1 million year-to-date. Elevated capital expenditures reflect necessary catch-up investments on previously deferred spending as well as the now completed consolidation of operations and capacity expansion in a new Seattle facility.

Long-term debt decreased $49.7 million to $284.8 million at October 3, 2026, compared with the end of 2025, and decreased $25.6 million from the end of the second quarter. The Company had available liquidity of $278.0 million at quarter-end, including $14.2 million in available cash and $263.8 million in availability on its revolver.

2026 Outlook

Astronics expects to set another annual sales record in 2026 with revenue estimated to be $1.02 billion to $1.04 billion for the year, representing growth of 19.5% over 2025 at the midpoint. Fourth quarter sales are expected to be $255 million to $275 million. Backlog at the end of the third quarter was $780.0 million, of which approximately 83% is expected to convert to revenue over the next twelve months.

Mr. Gundermann concluded, “We expect a solid fourth quarter to close out a year of strong growth and substantially improved profitability. While fourth quarter sales may be modestly lighter than the third quarter record level, our preliminary outlook for 2027 suggests another year of strong double digit growth. We are planning for a solid finish to this year and preparing for an exciting 2027.”

Planned capital expenditures in 2026 are expected to be in the range of $25 million to $30 million driven largely by costs associated with the Seattle operation consolidation, which concluded in the third quarter.

The Company estimates future IEEPA tariff refunds will range from $5 million to $6 million, although the timing of such receipts cannot be confirmed at this time.

Third Quarter 2026 Webcast and Conference Call

The Company will host a teleconference today at 4:45 p.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 investors.astronics.com. To listen to the archived call, dial (412) 317-6671 and enter replay pin number 13762682. The telephonic replay will be available from 8:00 p.m. on the day of the call through Tuesday, November 24, 2026. The webcast replay can be accessed via the investor relations section of the Company’s website where a transcript will also be posted 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.

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,” “feeling” or other similar expressions and include all statements with regard to the momentum for the remainder of the year, the Company’s fourth quarter and full year 2026 outlook and expectations for similar growth rate in 2027, the degree of progress on the U.S. Army Radio Test Set program and the level of profitability improvement in the Test segment related to ramping the program up to full rate production, and the amount of tariff refunds to be received. The forward-looking statements also include all statements related to achieving any revenue or profitability expectations, expectations of continued growth, the level of liquidity, the level of cash generation and free cash flow, the level of demand by customers and markets and the amount of expected capital expenditures, the amount of investment in an ERP system, the amount of backlog to be recognized as revenue over the next twelve months, statements regarding the amount of opportunities available to be executed and the effectiveness of the Company’s execution in its operations. 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 trend in growth with passenger power and connectivity on airplanes, the state of the aerospace and defense industries, commercial aircraft build rates, 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 impact of regulatory activity, the need for new and advanced test equipment, customer preferences and relationships, the effectiveness of the Company’s supply chain and execution on opportunities, and other factors which are described in filings by Astronics with the Securities and Exchange Commission. Except as required by applicable law, 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.

Use of Non-GAAP Financial Metrics and Additional Financial Information

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Astronics provides Adjusted Non-GAAP information as additional information for its operating results. References to Adjusted Non-GAAP information are to non-GAAP financial measures. These measures are not required by, in accordance with, or an alternative for, GAAP and may be different from non-GAAP financial measures used by other companies. Astronics management uses these measures for reviewing the financial results of Astronics for budget planning purposes and for making operational and financial decisions. Management believes that providing these non-GAAP financial measures to investors, as a supplement to GAAP financial measures, help investors evaluate Astronics core operating and financial performance and business trends consistent with how management evaluates such performance and trends.

FINANCIAL TABLES FOLLOW

Adjusted EBITDA is defined as net income before interest expense, income taxes, depreciation, amortization, and other adjustments. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by sales. Adjusted EBITDA and Adjusted EBITDA Margin are not measures determined in accordance with GAAP and may not be comparable with Adjusted EBITDA and Adjusted EBITDA Margin as used by other companies. Nevertheless, the Company believes that providing non-GAAP financial measures, such as Adjusted EBITDA and Adjusted EBITDA Margin, are important for investors and other readers of the Company’s financial statements.

Adjusted Gross Profit is defined as gross profit as reported, adjusted for certain items. Adjusted Gross Profit Margin is defined as Adjusted Gross Profit divided by sales. Adjusted Gross Profit and Adjusted Gross Margin are not measures determined in accordance with GAAP and may not be comparable with Adjusted Gross Profit and Adjusted Gross Profit Margin as used by other companies. Nevertheless, the Company believes that providing non-GAAP financial measures, such as Adjusted Gross Profit and Adjusted Gross Profit Margin, are important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s and current year’s gross profit and gross profit margin to the historical periods’ gross profit, as well as facilitates a more meaningful comparison of the Company’s gross profit and gross profit margin to that of other companies.

Adjusted Operating Income is defined as income from operations as reported, adjusted for certain items. Adjusted Operating Margin is defined as Adjusted Operating Income divided by sales. Adjusted Operating Income and Adjusted Operating Margin are not measures determined in accordance with GAAP and may not be comparable with Adjusted Operating Income and Adjusted Operating Margin as used by other companies. Nevertheless, the Company believes that providing non-GAAP financial measures, such as Adjusted Operating Income and Adjusted Operating Margin, are important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current periods’ income from operations to the historical periods’ income from operations and operating margin, as well as facilitates a more meaningful comparison of the Company’s income from operations and operating margin to that of other companies.

Adjusted Net Income and Adjusted Diluted EPS are defined as net income and diluted EPS as reported, adjusted for certain items, including amortization of intangibles, and also adjusted for a normalized tax rate. These are not measures determined in accordance with GAAP and may not be comparable with the measures used by other companies. Nevertheless, the Company believes that providing these non-GAAP financial measures are important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current periods’ net income and diluted EPS to the historical periods’ net income and diluted EPS, as well as facilitates a more meaningful comparison of the Company’s net income and diluted EPS to that of other companies. The Company believes that presenting Adjusted Diluted EPS provides a better understanding of its earnings power inclusive of adjusting for the non-cash amortization of intangible assets, reflecting the Company’s strategy to grow through acquisitions as well as organically.