Page 3 of 8
Exhibit 99.1
| |
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|
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|
| |
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For more information contact: |
|
|
|
|
David C. Burney, Chief Financial Officer |
|
|
|
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Phone: (716) 805-1599, ext. 159 |
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Fax: (716) 805-1286 |
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Email: dburney@astronics.com |
FOR IMMEDIATE RELEASE
Astronics Corporation Announces 54% Growth in Sales
for Second Quarter 2006
| |
• |
|
Second quarter operating margin improves to 11.7% compared with 4.8%
in the prior year period |
| |
| |
• |
|
Second quarter net income increases to $2.0 million from $0.2 million |
| |
| |
• |
|
Astronics raises full year 2006 estimated revenue range to $105 to $110 million |
EAST AURORA, NY, August 3, 2006 — Astronics Corporation (NASDAQ: ATRO), a leading
manufacturer of advanced, high-performance lighting, electronics and electrical power systems for
the global aerospace industry, reported net income increased to $2.0 million for the second quarter
of 2006 compared with $0.2 million in the second quarter of 2005. On a diluted earnings per share
basis, earnings were $0.25 for the second quarter of 2006 compared with $0.02 in the same quarter
last year.
The company reported sales of $29.0 million for the second quarter of 2006, a 54% increase from
$18.8 million in the same period in last year. Higher sales were driven by demand for the Company’s
cabin electronics products which provide a power source for in-flight entertainment and in-seat
power systems for the global commercial airline market. Also contributing to this quarter’s growth
was sales of the Company’s airframe power products used on the Tactical Tomahawk and Taurus missile
programs which moved to high rates of production last July.
Peter J. Gundermann, President and CEO commented, “While most of our product lines
showed growth over the same period last year, sales of our cabin electronics products were
extremely strong. The primary driver of growth through the second quarter this year has been the
commercial transport market’s demand for cabin electronics, although the business jet market also
remains strong.”
Gross margin for the quarter was 23.6%, an improvement from 18.6% in the second quarter of 2005,
primarily as a result of improved operating leverage on higher sales.
Selling, general and administrative (SG&A) expenses of $3.4 million decreased to 11.9% of sales for
the second quarter of 2006 compared with $2.6 million, or 13.7% of sales, in the second quarter of
fiscal 2005. Contributing to the increase in SG&A expenses this year was the company’s recognition
of stock based compensation as an expense and costs incurred related to its Sarbanes Oxley section
404 activity.
Comparing the second quarter of 2006 to the first quarter of 2006, sales in the second quarter grew
16.5%, while net income increased 66.5%. Gross margin in the second quarter 2006 improved 2.5
percentage points over the first quarter of 2006 reflecting higher operating leverage. SG&A
expenses increased $0.4 million in the second quarter of 2006 compared with the first quarter of
2006, but declined slightly as a percent of sales, and was a result increased costs associated with
Sarbanes Oxley section 404 and increased compensation costs for stock based compensation.
Six-Month Period
Sales for the first half of 2006 were $54.0 million, a 56% increase over last year’s first half
sales of $34.5 million. Gross margin for the 2006 six-month period was 22.4%, up 2.7 percentage
points from the same period last year.
Page 4 of 8
For the 2006 six-month period, engineering and development costs were $4.8 million, up from $3.9
million in the prior year. SG&A expenses decreased from 13.9% of sales in the first half of 2005 to
12.0% of sales for the same period this year.
For the first six months of 2006, net income was $3.2 million and diluted earnings per share were
$0.39 compared with $0.8 million and $0.10 respectively in the first six months of 2005.
Liquidity
Cash and cash equivalents declined from $4.5 million at December 31, 2005, to $0.4 million at the
end of the second quarter 2006. Cash was used to support increases in working capital as well as to
pay down $1.0 million on the line of credit during the first half of the year. As of July 1, 2006,
$6.0 million was outstanding on the company’s $15 million line of credit.
Capital expenditures for the second quarter of 2006 were slightly higher at $1.0 million compared
with $0.8 million in the same period last year.
Outlook
Bookings grew 26% in the second quarter of 2006 to $29.7 million compared with $23.6 million in the
same period last year. Backlog at the end of the second quarter was $94.7 million, a 22% increase
from $77.9 million at July 2, 2005, and up $0.7 million from the end of the first quarter this
year.
Mr. Gundermann added, “We are having an excellent year. The success of the product lines we
gained when we acquired AES combined with the overall strength of the aircraft industry continues
to spur increased sales. We believe our in-seat power system is realizing so much success because
it is the best product available, and many airlines as they acquire new aircraft, or refurbish
existing aircraft, are choosing our system. We also sell our power system to manufacturers of
in-flight entertainment systems. They integrate our in-seat power system into their product and
sell the complete package to airlines. As long as the global airline market is fairing well, we
should continue to see growth from this product. However, we do not have much visibility as to how
demand for the in-seat power system could fluctuate.”
“The business jet market is also strong with growing production rates. As a result, given what we
have realized in the first half of the year and the robustness of the current market, we are
raising our full year revenue estimate to $105 million to $110 million,” he concluded.
Second Quarter Webcast and Conference Call
The release of the financial results on August 3, 2006, will be followed by a company-hosted
teleconference at 11:00 a.m. ET. 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 (913) 312-1267 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. |
| |
| |
• |
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A replay can also be heard by calling (719) 457-0820, and entering passcode 7731947. |
The telephonic replay will be available through Thursday, August 10, 2006 at 11:59 p.m. ET.
Page 5 of 8
ABOUT ASTRONICS CORPORATION
Astronics Corporation is a leading manufacturer of advanced, high-performance lighting and
electrical power 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, the ability to cross sell products and expand
markets, 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, such as the Airbus A380; the Eclipse 500; the Air Canada’s CRJ705,
A320, and several configurations of B767; Cessna single engine aircraft; Cessna Mustang; Hawker
Horizon; the V22 Osprey; Lockheed Martin F-35 JSF; China Eastern Airlines Corp. Limited’s upgrade
of 15 Airbus A330-300’s and five Airbus A330-200’s; Air China Limited’s upgrades of 20 Airbus
A330-200’s; and F-22 Raptor; 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.
FINANCIAL TABLES FOLLOW.
Page 6 of 8
ASTRONICS CORPORATION
CONSOLIDATED INCOME STATEMENT DATA
(unaudited)
(in thousands except per share data)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three months ended |
|
|
Six months ended |
|
|
|
|
| |
|
7/1/2006 |
|
7/2/2005 |
|
|
7/1/2006 |
|
7/2/2005 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
29,039 |
|
|
$ |
18,839 |
|
|
|
$ |
53,965 |
|
|
$ |
34,495 |
|
|
|
|
|
Cost of products sold |
|
|
22,195 |
|
|
|
15,344 |
|
|
|
|
41,872 |
|
|
|
27,707 |
|
|
|
|
|
Gross margin |
|
|
23.6 |
% |
|
|
18.6 |
% |
|
|
|
22.4 |
% |
|
|
19.7 |
% |
|
|
|
|
Selling general and administrative |
|
|
3,443 |
|
|
|
2,582 |
|
|
|
|
6,462 |
|
|
|
4,793 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Income from operations |
|
|
3,401 |
|
|
|
913 |
|
|
|
|
5,631 |
|
|
|
1,995 |
|
|
|
|
|
Operating margin |
|
|
11.7 |
% |
|
|
4.8 |
% |
|
|
|
10.4 |
% |
|
|
5.8 |
% |
|
|
|
|
Interest expense, net |
|
|
219 |
|
|
|
191 |
|
|
|
|
418 |
|
|
|
317 |
|
|
|
|
|
Other (income) expense |
|
|
(22 |
) |
|
|
— |
|
|
|
|
(34 |
) |
|
|
(4 |
) |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Income (loss) before tax |
|
|
3,204 |
|
|
|
722 |
|
|
|
|
5,247 |
|
|
|
1,682 |
|
|
|
|
|
Income taxes |
|
|
1,189 |
|
|
|
525 |
|
|
|
|
2,022 |
|
|
|
876 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Net Income |
|
$ |
2,015 |
|
|
$ |
197 |
|
|
|
$ |
3,225 |
|
|
$ |
806 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share: |
|
$ |
0.25 |
|
|
$ |
0.02 |
|
|
|
$ |
0.41 |
|
|
$ |
0.10 |
|
|
|
|
|
Diluted earnings per share: |
|
$ |
0.25 |
|
|
$ |
0.02 |
|
|
|
$ |
0.39 |
|
|
$ |
0.10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted shares
outstanding |
|
|
8,223 |
|
|
|
8,023 |
|
|
|
|
8,183 |
|
|
|
7,962 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
Capital Expenditures |
|
$ |
962 |
|
|
$ |
782 |
|
|
|
$ |
1,607 |
|
|
$ |
1,333 |
|
|
|
|
|
Depreciation and Amortization |
|
$ |
636 |
|
|
$ |
706 |
|
|
|
$ |
1,259 |
|
|
$ |
1,322 |
|
|
|
|
|
| |
|
|
|
ASTRONICS CORPORATION
CONSOLIDATED BALANCE SHEET DATA
(unaudited)
(in thousands)
| |
|
|
|
|
|
|
|
|
| |
|
7/1/2006 |
|
12/31/2005 |
| |
|
|
ASSETS: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
425 |
|
|
$ |
4,473 |
|
Accounts receivable |
|
|
17,784 |
|
|
|
12,635 |
|
Inventories |
|
|
23,223 |
|
|
|
19,013 |
|
Other current assets |
|
|
1,895 |
|
|
|
1,401 |
|
Property, plant and equipment, net |
|
|
21,085 |
|
|
|
20,461 |
|
Other assets |
|
|
7,757 |
|
|
|
7,874 |
|
| |
|
|
Total Assets |
|
$ |
72,169 |
|
|
$ |
65,857 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY: |
|
|
|
|
|
|
|
|
Current maturities of long term debt |
|
$ |
919 |
|
|
$ |
914 |
|
Note payable |
|
|
6,000 |
|
|
|
7,000 |
|
Accounts payable and accrued expenses |
|
|
19,396 |
|
|
|
15,843 |
|
Long-term debt |
|
|
9,868 |
|
|
|
10,304 |
|
Other liabilities |
|
|
6,126 |
|
|
|
5,962 |
|
Shareholders’ equity |
|
|
29,860 |
|
|
|
25,834 |
|
| |
|
|
Total liabilities and shareholders’ equity |
|
$ |
72,169 |
|
|
$ |
65,857 |
|
| |
|
|
Page 7 of 8
ASTRONICS CORPORATION
NET SALES BY MARKET
($, in thousands)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
Six Months Ended |
|
|
| |
|
7/1/2006 |
|
7/2/2005 |
|
% change |
|
7/1/2006 |
|
7/2/2005 |
|
% change |
|
2006 YTD % |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Military |
|
$ |
6,448 |
|
|
$ |
6,077 |
|
|
|
6.10 |
% |
|
$ |
13,589 |
|
|
$ |
11,172 |
|
|
|
21.63 |
% |
|
|
25.18 |
% |
Commercial Transport |
|
|
16,881 |
|
|
|
8,428 |
|
|
|
100.30 |
% |
|
|
29,325 |
|
|
|
14,590 |
|
|
|
100.99 |
% |
|
|
54.34 |
% |
Business Jet |
|
|
5,447 |
|
|
|
4,098 |
|
|
|
32.92 |
% |
|
|
10,328 |
|
|
|
8,102 |
|
|
|
27.47 |
% |
|
|
19.14 |
% |
Other |
|
|
263 |
|
|
|
236 |
|
|
|
11.44 |
% |
|
|
723 |
|
|
|
631 |
|
|
|
14.58 |
% |
|
|
1.34 |
% |
| |
|
|
|
|
|
|
Total |
|
$ |
29,039 |
|
|
$ |
18,839 |
|
|
|
54.14 |
% |
|
$ |
53,965 |
|
|
$ |
34,495 |
|
|
|
56.44 |
% |
|
|
100.00 |
% |
| |
|
|
|
|
|
|
ASTRONICS CORPORATION
NET SALES BY PRODUCT
($, in thousands)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
Six Months Ended |
|
|
| |
|
7/1/2006 |
|
7/2/2005 |
|
% change |
|
7/1/2006 |
|
7/2/2005 |
|
% change |
|
2006 YTD % |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cockpit Lighting |
|
$ |
7,209 |
|
|
$ |
6,996 |
|
|
|
3.04 |
% |
|
$ |
15,282 |
|
|
$ |
13,716 |
|
|
|
11.42 |
% |
|
|
28.32 |
% |
Cabin Electronics |
|
|
12,666 |
|
|
|
5,092 |
|
|
|
148.74 |
% |
|
|
20,958 |
|
|
|
8,084 |
|
|
|
159.25 |
% |
|
|
38.84 |
% |
Airframe Power |
|
|
4,396 |
|
|
|
2,087 |
|
|
|
110.64 |
% |
|
|
8,562 |
|
|
|
3,927 |
|
|
|
118.03 |
% |
|
|
15.87 |
% |
External Lighting |
|
|
2,229 |
|
|
|
2,728 |
|
|
|
-18.29 |
% |
|
|
3,979 |
|
|
|
4,700 |
|
|
|
-15.34 |
% |
|
|
7.37 |
% |
Cabin Lighting |
|
|
2,276 |
|
|
|
1,700 |
|
|
|
33.88 |
% |
|
|
4,461 |
|
|
|
3,437 |
|
|
|
29.79 |
% |
|
|
8.27 |
% |
Other |
|
|
263 |
|
|
|
236 |
|
|
|
11.44 |
% |
|
|
723 |
|
|
|
631 |
|
|
|
14.58 |
% |
|
|
1.34 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
Total |
|
$ |
29,039 |
|
|
$ |
18,839 |
|
|
|
54.14 |
% |
|
$ |
53,965 |
|
|
$ |
34,495 |
|
|
|
56.44 |
% |
|
|
100.00 |
% |
| |
|
|
|
|
|
|
-END-
Page 8 of 8
ASTRONICS CORPORATION
ORDER AND BACKLOG TREND
($, in thousands)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
2005 |
|
|
2006 |
| |
|
|
|
|
|
|
| |
|
|
Q1 2005 |
|
Q2 2005 |
|
Q3 2005 |
|
Q4 2005 |
|
Twelve Months |
|
|
Q1 2006 |
|
Q2 2006 |
|
Six Months |
| |
|
|
4/2/05 |
|
7/2/05 |
|
10/1/05 |
|
12/31/05 |
|
12/31/05 |
|
|
4/1/06 |
|
7/1/06 |
|
7/1/06 |
Bookings |
|
|
$ |
14,868 |
|
|
$ |
23,564 |
|
|
$ |
20,176 |
|
|
$ |
37,946 |
|
|
$ |
96,554 |
|
|
|
$ |
23,850 |
|
|
$ |
29,729 |
|
|
$ |
53,579 |
|
Backlog |
|
|
$ |
72,292 |
|
|
$ |
77,856 |
|
|
$ |
77,611 |
|
|
$ |
95,121 |
|
|
$ |
95,121 |
|
|
|
$ |
94,045 |
|
|
$ |
94,735 |
|
|
$ |
94,735 |
|
Book:Bill |
|
|
|
0.95 |
|
|
|
1.25 |
|
|
|
0.99 |
|
|
|
1.86 |
|
|
|
1.28 |
|
|
|
|
0.96 |
|
|
|
1.02 |
|
|
|
0.99 |
|
-END-