Exhibit 99.1
Astronics Corporation ×130 Commerce Way × East Aurora, NY × 14052-2191
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For more information contact: |
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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 Reports Net Income More than Doubles in Third Quarter 2006
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Sales grow 40% to $28.5 million compared with 2005’s third quarter |
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Operating margin improves to 10.7% from 7.8% |
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Net income was $1.9 million compared with $0.8 million |
EAST AURORA, NY, November 9, 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 of $1.9 million for the third quarter of 2006,
an increase of $1.1 million over net income of $0.8 million in the third quarter of 2005. Earnings
per diluted share were $0.23 for the third quarter of 2006 compared with $0.10 in the same period
the prior year. For the nine months ended September 30, 2006, net income was $5.1 million, or
$0.63 per diluted share, compared with $1.6 million, or $0.20 per diluted share, for the same
period last year.
Sales for the third quarter were $28.5 million, a 40% increase from $20.4 million in the third
quarter of 2005. Over 95% of the increase, or $7.9 million, can be attributed to higher sales of
the Company’s cabin electronics products, which provide power for in-flight entertainment and
in-seat power systems for the global commercial airline market. Sales to the business jet
market also increased $2.5 million reflecting increased aircraft production rates. Military sales
were down 26% from the third quarter last year. The decrease was primarily caused by a
$2.2 million decrease in deliveries for F-16 night vision kits for the Republic of Korea Air Force
as the Korean program was concluded in 2005.
Sequentially, sales in the third quarter were down 1.7% from sales in the second quarter
reflecting slower demand and production over the summer.
Peter J. Gundermann, President and CEO of Astronics Corp., commented, “Our strategy to
be in the three major aircraft markets: military, business jet and commercial transport, has
worked very well in this environment of strong commercial airlines growth, expansion of the
business jet market and stable sales to the military. Commercial and business jet aircraft
manufacturers are seeing continued expansion of their backlogs. As a result, we believe that 2007
should be another year of solid growth for Astronics.”
Gross margin for the quarter was 22.8%, up slightly from 21.9% in the third quarter of 2005, as a
result of leverage provided by higher sales.
Selling, general and administrative (SG&A) expenses were $3.5 million up from $2.9 million in the
same period the prior year. As a percentage of sales, SG&A was 12% in this year’s third quarter
compared with 14% last year as sales grew at a faster pace than SG&A spending.
Operating profit almost doubled quarter-over-quarter, from $1.6 million in the third quarter of
2005 to $3.1 million this year.
Nine-Month Period Review
For the first nine months of 2006, sales were $82.5 million, a 50% increase from $54.9 million in
the same period last year. Sales to the commercial transport sector doubled over the prior year
sales to $45.1 million and currently represent about 55% of total sales. Business jet sales have
improved 40%, when comparing the nine month periods,
from $11.9 million to $16.7 million while
military sales have remained relatively flat at $19.7 million for the first nine months of 2006.
Gross margin for the nine month period improved to 22.6% from 20.5% in the first nine months of
2005 on higher volume. SG&A increased on an absolute basis to $9.9 million from $7.7 million
during the first nine months last year, but as a percentage of sales declined to 12% this year
compared with 14% for the 2005 nine-month period.
Liquidity
Cash and cash equivalents at September 30, 2006, was $645 thousand, a decrease from $4.5 million at
December 31, 2005, but an increase from $425 thousand at July 1, 2006. Increased investment in
working capital components, primarily inventory and receivables associated with increasing sales
growth have used cash reserves.
Capital expenditures for the third quarter of 2006 were $693 thousand up from $432 thousand in the
same period last year. For the nine month period, capital expenditures increased to $2.3 million
from $1.8 million in the first nine months last year.
Outlook
Bookings for the third quarter of 2006 were $26.0 million, a 29% increase from bookings of
$20.2 million in the third quarter last year. Backlog at the end of the third quarter was $86.4
million compared with $77.6 million at the end of the same quarter last year.
Mr. Gundermann added, “As we move through the fourth quarter, we anticipate that we could be at the
high end or somewhat above our estimated sales range of $105 million to $110 million for 2006. We
are encouraged by the demand for aircraft and the success our customers are having with orders
which should contribute to next year’s growth and beyond. Across the aerospace industry conditions
remain strong.”
Third Quarter Webcast and Conference Call
The release of the financial results on November 9, 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:
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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. |
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The teleconference can be accessed by dialing (913) 312-1267 approximately 5 — 10
minutes prior to the call. |
To listen to the archived call:
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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 2437531. |
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The telephonic replay will be available through Thursday,
November 16, 2006 at 11:59 p.m. ET. |
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.
ASTRONICS CORPORATION
CONSOLIDATED INCOME STATEMENT DATA
(unaudited)
(in thousands except per share data)
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Three months ended |
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Nine months ended |
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9/30/2006 |
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10/1/2005 |
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9/30/2006 |
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10/1/2005 |
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Sales |
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$ |
28,540 |
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$ |
20,421 |
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$ |
82,505 |
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$ |
54,916 |
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Cost of products sold |
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22,019 |
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15,947 |
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63,891 |
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43,654 |
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Gross margin |
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22.8 |
% |
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21.9 |
% |
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22.6 |
% |
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20.5 |
% |
Selling general and administrative |
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3,469 |
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2,890 |
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9,931 |
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7,679 |
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Income from operations |
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3,052 |
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1,584 |
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8,683 |
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3,583 |
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Operating margin |
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10.7 |
% |
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7.8 |
% |
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10.5 |
% |
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6.5 |
% |
Interest expense, net |
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232 |
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202 |
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650 |
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519 |
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Other (income) expense |
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(5 |
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— |
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(39 |
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— |
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Income (loss) before tax |
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2,825 |
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1,382 |
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8,072 |
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3,064 |
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Income taxes |
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912 |
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|
592 |
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2,934 |
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1,468 |
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Net Income |
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$ |
1,913 |
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$ |
790 |
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$ |
5,138 |
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$ |
1,596 |
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Basic earnings per share: |
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$ |
0.24 |
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$ |
0.10 |
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$ |
0.65 |
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$ |
0.20 |
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Diluted earnings per share: |
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$ |
0.23 |
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$ |
0.10 |
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$ |
0.63 |
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$ |
0.20 |
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Weighted average diluted shares outstanding |
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8,264 |
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8,094 |
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8,210 |
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8,006 |
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Capital Expenditures |
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$ |
693 |
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$ |
432 |
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$ |
2,300 |
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$ |
1,765 |
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Depreciation and Amortization |
|
$ |
701 |
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$ |
720 |
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|
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$ |
1,960 |
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$ |
2,042 |
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ASTRONICS CORPORATION
CONSOLIDATED BALANCE SHEET DATA
(unaudited)
(in thousands)
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9/30/2006 |
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12/31/2005 |
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ASSETS: |
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Cash and cash equivalents |
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$ |
645 |
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$ |
4,473 |
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Accounts receivable |
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18,065 |
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|
12,635 |
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Inventories |
|
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26,584 |
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19,013 |
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Other current assets |
|
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1,966 |
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|
1,401 |
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Property, plant and equipment, net |
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21,221 |
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20,461 |
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Other assets |
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7,691 |
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|
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7,874 |
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Total Assets |
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$ |
76,172 |
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$ |
65,857 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY: |
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Current maturities of long term debt |
|
$ |
921 |
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$ |
914 |
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Note payable |
|
|
7,900 |
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|
|
7,000 |
|
Accounts payable and accrued expenses |
|
|
18,843 |
|
|
|
15,843 |
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Long-term debt |
|
|
9,837 |
|
|
|
10,304 |
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Other liabilities |
|
|
6,179 |
|
|
|
5,962 |
|
Shareholders’ equity |
|
|
32,492 |
|
|
|
25,834 |
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Total liabilities and shareholders’ equity |
|
$ |
76,172 |
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|
$ |
65,857 |
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ASTRONICS CORPORATION
NET SALES BY MARKET
($, in thousands)
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Three Months Ended |
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Nine Months Ended |
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9/30/2006 |
|
10/1/2005 |
|
% change |
|
9/30/2006 |
|
10/1/2005 |
|
% change |
|
2006 YTD % |
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Military |
|
$ |
6,136 |
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|
$ |
8,330 |
|
|
|
-26.3 |
% |
|
$ |
19,724 |
|
|
$ |
19,500 |
|
|
|
1.15 |
% |
|
|
23.9 |
% |
Commercial Transport |
|
|
15,781 |
|
|
|
7,943 |
|
|
|
98.7 |
% |
|
|
45,106 |
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|
22,534 |
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100.17 |
% |
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|
54.7 |
% |
Business Jet |
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6,340 |
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|
3,812 |
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|
66.3 |
% |
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|
16,668 |
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|
|
11,914 |
|
|
|
39.90 |
% |
|
|
20.2 |
% |
Other |
|
|
283 |
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|
|
336 |
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|
|
-15.8 |
% |
|
|
1,007 |
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|
|
968 |
|
|
|
4.03 |
% |
|
|
1.2 |
% |
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Total |
|
$ |
28,540 |
|
|
$ |
20,421 |
|
|
|
39.8 |
% |
|
$ |
82,505 |
|
|
$ |
54,916 |
|
|
|
50.24 |
% |
|
|
100.0 |
% |
| |
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|
|
|
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ASTRONICS CORPORATION
NET SALES BY PRODUCT
($, in thousands)
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|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
Nine Months Ended |
|
|
| |
|
9/30/2006 |
|
10/1/2005 |
|
% change |
|
9/30/2006 |
|
10/1/2005 |
|
% change |
|
2006 YTD % |
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|
Cockpit Lighting |
|
$ |
8,300 |
|
|
$ |
8,184 |
|
|
|
1.42 |
% |
|
$ |
23,582 |
|
|
$ |
21,597 |
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|
|
9.2 |
% |
|
|
28.6 |
% |
Cabin Electronics |
|
|
12,358 |
|
|
|
4,472 |
|
|
|
176.34 |
% |
|
|
33,316 |
|
|
|
12,556 |
|
|
|
165.3 |
% |
|
|
40.4 |
% |
Airframe Power |
|
|
3,759 |
|
|
|
3,959 |
|
|
|
-5.05 |
% |
|
|
12,320 |
|
|
|
8,189 |
|
|
|
50.4 |
% |
|
|
14.9 |
% |
External Lighting |
|
|
1,872 |
|
|
|
1,933 |
|
|
|
-3.16 |
% |
|
|
5,851 |
|
|
|
6,632 |
|
|
|
-11.8 |
% |
|
|
7.1 |
% |
Cabin Lighting |
|
|
1,968 |
|
|
|
1,537 |
|
|
|
28.04 |
% |
|
|
6,429 |
|
|
|
4,974 |
|
|
|
29.3 |
% |
|
|
7.8 |
% |
Other |
|
|
283 |
|
|
|
336 |
|
|
|
-15.77 |
% |
|
|
1,007 |
|
|
|
968 |
|
|
|
4.0 |
% |
|
|
1.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Total |
|
$ |
28,540 |
|
|
$ |
20,421 |
|
|
|
39.76 |
% |
|
$ |
82,505 |
|
|
$ |
54,916 |
|
|
|
50.2 |
% |
|
|
100.0 |
% |
| |
|
|
|
|
|
|
|
|
ASTRONICS CORPORATION
ORDER AND BACKLOG TREND
($, in thousands)
| |
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
2005 |
|
|
|
2006 |
|
| |
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|
|
|
|
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|
|
|
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|
|
Twelve |
|
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Nine |
|
| |
|
Q1 2005 |
|
|
Q2 2005 |
|
|
Q3 2005 |
|
|
Q4 2005 |
|
|
Months |
|
|
|
Q1 2006 |
|
|
Q2 2006 |
|
|
Q3 2006 |
|
|
Months |
|
| |
|
4/2/05 |
|
|
7/2/05 |
|
|
10/1/05 |
|
|
12/31/05 |
|
|
12/31/05 |
|
|
|
4/1/06 |
|
|
7/1/06 |
|
|
9/30/06 |
|
|
9/30/06 |
|
| |
|
|
|
|
|
Bookings |
|
$ |
14,868 |
|
|
$ |
23,564 |
|
|
$ |
20,176 |
|
|
$ |
37,946 |
|
|
$ |
96,554 |
|
|
|
$ |
23,850 |
|
|
$ |
23,929 |
|
|
$ |
25,985 |
|
|
$ |
73,764 |
|
| |
|
|
|
Backlog |
|
$ |
72,292 |
|
|
$ |
77,856 |
|
|
$ |
77,611 |
|
|
$ |
95,121 |
|
|
$ |
95,121 |
|
|
|
$ |
94,045 |
|
|
$ |
88,935 |
|
|
$ |
86,380 |
|
|
$ |
86,380 |
|
| |
|
|
|
Book:Bill |
|
|
0.95 |
|
|
|
1.25 |
|
|
|
0.99 |
|
|
|
1.86 |
|
|
|
1.28 |
|
|
|
|
0.96 |
|
|
|
0.82 |
|
|
|
0.91 |
|
|
|
0.89 |
|
