Exhibit 88.1
Astronics Corporation ×130 Commerce Way × East Aurora, NY × 14052-2164
For more information contact:
David C. Burney, Chief Financial Officer
Phone: (716) 805-1599, ext. 159
Fax: (716) 805-1286
Email: david.burney@astronics.com
FOR IMMEDIATE RELEASE
Astronics Corporation Reports Third Quarter 2007 Results
| |
• |
|
Third quarter net income of $4.1 million vs. $1.6 million in 2006 |
| |
| |
• |
|
Year-to-date net income of $13.3 million compared with $4.9 million in 2006 |
| |
| |
• |
|
Sales for 2007 expected to be in the $155 to $160 million range |
EAST AURORA, NY, November 2, 2007 — Astronics Corporation (NASDAQ: ATRO), a trusted leader in
innovative, high performance lighting, power generation, control and distribution systems for the
global aerospace industry, today reported sales of $37.7 million in the third quarter of 2007 which
ended September 29, 2007, a 36% increase compared with sales of $27.8 million in the third quarter
of 2006. Net income for the third quarter of 2007 was $4.1 million, up $2.5 million from the third
quarter of 2006. On a per share basis, earnings were $0.48 per diluted share, or more than double
earnings of $0.20 per diluted share in the same period last year.
Sales to the commercial transport market led the year-over-year growth by increasing 54% to
$23.1 million in the third quarter of 2007 compared with $15.0 million in the same period last
year. Cabin electronics products, which provide in-seat power and power for in-flight
entertainment systems for commercial aircraft, had sales of $18.8 million, a 63% increase compared
with the third quarter of 2006 as many airlines continue aggressive refurbishment programs for
older aircraft and new aircraft deliveries increase. Sales to the business jet market improved to
$7.6 million in the third quarter of 2007, a 20% increase compared with $6.3 million in the same
period the prior year as a result of expanded content on new aircraft platforms and the growth of
the market. Military sales increased 10% to $6.7 million.
Peter J. Gundermann, President and Chief Executive Officer of Astronics Corporation, commented, “We
continue to see strong demand across the aerospace industry for the full range of our products. We
also see an exciting range of new opportunities for the future, though we will need to increase our
engineering and development spending to develop them fully. We aim to compel our customers to
choose us as partners as they develop new aircraft by offering innovative technology and high-value
systems. When we are selected to develop products for an aircraft during its development phase, we
can typically count on participating in the program for as long as the aircraft flies.”
Costs and Expenses
Gross profit for the third quarter of 2007 was $10.1 million, or a gross margin of 26.9%, compared
with $6.1 million, or a gross margin of 22.0%, in the same period the prior year. Gross profit in
the 2007 third quarter was positively impacted by a $0.85 million adjustment related to 2007
estimated manufacturing overhead cost absorption. Had this adjustment been made in the first half
of 2007, gross margin would have been $0.85 million higher in that period and third quarter gross
margin $0.85 million lower than reported. Excluding this adjustment, gross margin would have been 24.6% in the third quarter of
2007. Engineering and Development (E&D) costs in the third quarter of 2007 were $3.8 million
compared with $2.5 million in the same period the prior year.
- MORE -
Astronics Corporation Reports Third Quarter 2007 Results
November 2, 2007
Page 2 of 6
Selling, general and administrative (SG&A) expenses in the third quarter of 2007 were $3.9 million,
or 10.3% of sales, compared with $3.5 million, or 12.5% of sales, in the same period the prior
year.
Nine-Month Review
Sales for the first nine months of 2007 were $122.0 million, a 49% increase compared with $81.8
million in the first nine months of the prior year. Commercial transport sales in the first nine
months of 2007 increased 79%, to $79.4 million compared with the same period the prior year.
Business jet sales increased 32%, to $22.0 million, for the year-over-year nine-month period, while
military sales remained flat. Strong aircraft production rates, new products and demand for
in-seat power and in-flight entertainment systems using Astronics’ power systems were the primary
reasons for the growth.
Gross margin for the first nine months of 2007 was 27.2% compared with 22.4% in the first nine
months of 2006. Operating leverage gained on the higher sales volume was partially offset by E&D
expenses of $11.0 million in 2007 compared with $7.7 million in the first nine months of 2006.
SG&A expenses for the first nine months of 2007 were $12.6 million, or 10.3% of sales, compared
with $9.9 million, or 12.1% of sales, in the same period the prior year. Operating margin for the
nine-month period was 16.9% compared with 10.2% in the first nine months of 2006.
Net income for the first nine months of 2007 was $13.3 million, or $1.56 per diluted share,
compared with $4.9 million, or $0.60 per diluted share, in the first nine months of 2006.
Capital expenditures for the third quarter and first nine months of 2007 were $1.6 million and $7.6
million, respectively, compared with $0.7 million and $2.3 million in the third quarter and first
nine months of 2006, respectively. The year-over-year capital expenditure increases can be
attributed to facility expansions and equipment investments for the Company’s East Aurora, New York
and Redmond, Washington facilities.
Outlook
Bookings were $33.3 million in the third quarter of 2007 compared with $26.0 million in the same
period the prior year and $38.7 million in the second quarter of 2007. At the end of the third
quarter, backlog was $90.0 million of which $33 million is planned to ship during the last three
months of 2007.
Peter J. Gundermann President and CEO, noted, “We now expect sales for the full year to be in the
range of $155 million to $160 million, up approximately 40% over our 2006 total of $110.8 million.
This will be our third year in a row of strong growth at or above this level. Our early
expectations are that 2008 will be another very good year for Astronics, but that our growth rate
will likely moderate to a range of 10% to 20%. This preliminary estimate is based on our insight
into expected production rates and retrofit programs.”
Third Quarter 2007 Webcast and Conference Call
The Company will host a teleconference at 10 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 (201) 689-8562 and requesting conference
ID number 258587 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 (201) 612-7415 and referencing account number 3055
and conference ID number 258587. |
- MORE -
Astronics Corporation Reports Third Quarter 2007 Results
November 2, 2007
Page 3 of 6
The telephonic replay will be available from 1 p.m. ET the day of the call through 11:59 p.m. ET
November 9, 2007.
ABOUT ASTRONICS CORPORATION
Astronics Corporation is a trusted leader in innovative, high performance lighting, power
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.
FINANCIAL TABLES FOLLOW.
- MORE -
Astronics Corporation Reports Third Quarter 2007 Results
November 2, 2007
Page 4 of 6
ASTRONICS CORPORATION
CONSOLIDATED INCOME STATEMENT DATA
(unaudited)
(in thousands except per share data)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three months ended |
|
|
Nine months ended |
|
| |
|
9/29/2007 |
|
|
9/30/2006 |
|
|
9/29/2007 |
|
|
9/30/2006 |
|
Sales |
|
$ |
37,724 |
|
|
$ |
27,752 |
|
|
$ |
121,967 |
|
|
$ |
81,847 |
|
Cost of products sold |
|
|
27,582 |
|
|
|
21,633 |
|
|
|
88,740 |
|
|
|
63,550 |
|
Gross margin |
|
|
26.9 |
% |
|
|
22.0 |
% |
|
|
27.2 |
% |
|
|
22.4 |
% |
Selling general and administrative |
|
|
3,877 |
|
|
|
3,469 |
|
|
|
12,557 |
|
|
|
9,931 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
|
6,265 |
|
|
|
2,650 |
|
|
|
20,670 |
|
|
|
8,366 |
|
Operating margin |
|
|
16.6 |
% |
|
|
9.5 |
% |
|
|
16.9 |
% |
|
|
10.2 |
% |
Interest expense, net |
|
|
396 |
|
|
|
232 |
|
|
|
1,072 |
|
|
|
650 |
|
Other (income) expense |
|
|
— |
|
|
|
(5 |
) |
|
|
(11 |
) |
|
|
(39 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before tax |
|
|
5,869 |
|
|
|
2,423 |
|
|
|
19,609 |
|
|
|
7,755 |
|
Income taxes |
|
|
1,743 |
|
|
|
775 |
|
|
|
6,287 |
|
|
|
2,826 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
$ |
4,126 |
|
|
$ |
1,648 |
|
|
$ |
13,322 |
|
|
$ |
4,929 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share: |
|
$ |
0.51 |
|
|
$ |
0.21 |
|
|
$ |
1.65 |
|
|
$ |
0.62 |
|
Diluted earnings per share: |
|
$ |
0.48 |
|
|
$ |
0.20 |
|
|
$ |
1.56 |
|
|
$ |
0.60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted shares outstanding |
|
|
8,605 |
|
|
|
8,264 |
|
|
|
8,531 |
|
|
|
8,210 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures |
|
$ |
1,649 |
|
|
$ |
693 |
|
|
$ |
7,566 |
|
|
$ |
2,300 |
|
Depreciation and Amortization |
|
$ |
876 |
|
|
$ |
701 |
|
|
$ |
2,447 |
|
|
$ |
1,960 |
|
ASTRONICS CORPORATION
ORDER AND BACKLOG TREND
($, in thousands)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
2006 |
|
|
2007 |
|
| |
|
Q1 2006 |
|
|
Q2 2006 |
|
|
Q3 2006 |
|
|
Q4 2006 |
|
|
Twelve Months |
|
|
Q1 2007 |
|
|
Q2 2007 |
|
|
Q3 2007 |
|
| |
|
4/1/06 |
|
|
7/1/06 |
|
|
9/30/06 |
|
|
12/31/06 |
|
|
12/31/06 |
|
|
3/31/07 |
|
|
6/30/07 |
|
|
9/29/07 |
|
Sales |
|
$ |
25,263 |
|
|
$ |
28,832 |
|
|
$ |
27,752 |
|
|
$ |
28,920 |
|
|
$ |
110,767 |
|
|
$ |
42,875 |
|
|
$ |
41,368 |
|
|
$ |
37,724 |
|
Net Income |
|
$ |
1,318 |
|
|
$ |
1,963 |
|
|
$ |
1,648 |
|
|
$ |
807 |
|
|
$ |
5,736 |
|
|
$ |
4,695 |
|
|
$ |
4,501 |
|
|
$ |
4,126 |
|
Bookings |
|
$ |
23,850 |
|
|
$ |
23,929 |
|
|
$ |
25,985 |
|
|
$ |
40,411 |
|
|
$ |
114,175 |
|
|
$ |
40,351 |
|
|
$ |
38,711 |
|
|
$ |
33,347 |
|
Backlog |
|
$ |
94,706 |
|
|
$ |
89,803 |
|
|
$ |
88,036 |
|
|
$ |
99,527 |
|
|
$ |
99,527 |
|
|
$ |
97,003 |
|
|
$ |
94,346 |
|
|
$ |
89,969 |
|
Book:Bill |
|
|
0.94 |
|
|
|
0.83 |
|
|
|
0.94 |
|
|
|
1.40 |
|
|
|
1.03 |
|
|
|
0.94 |
|
|
|
0.94 |
|
|
|
0.88 |
|
- MORE -
Astronics Corporation Reports Third Quarter 2007 Results
November 2, 2007
Page 5 of 6
ASTRONICS CORPORATION
SOLIDATED BALANCE SHEET DATA
(unaudited)
(in thousands)
| |
|
|
|
|
|
|
|
|
| |
|
9/29/2007 |
|
|
12/31/2006 |
|
ASSETS: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
837 |
|
|
$ |
222 |
|
Accounts receivable |
|
|
23,869 |
|
|
|
17,165 |
|
Inventories |
|
|
37,800 |
|
|
|
31,570 |
|
Other current assets |
|
|
2,931 |
|
|
|
2,699 |
|
Property, plant and equipment, net |
|
|
29,057 |
|
|
|
23,436 |
|
Other assets |
|
|
9,372 |
|
|
|
7,446 |
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
103,866 |
|
|
$ |
82,538 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY: |
|
|
|
|
|
|
|
|
Current maturities of long term debt |
|
$ |
949 |
|
|
$ |
923 |
|
Note payable |
|
|
10,400 |
|
|
|
8,100 |
|
Accounts payable and accrued expenses |
|
|
23,542 |
|
|
|
25,196 |
|
Long-term debt |
|
|
15,086 |
|
|
|
9,426 |
|
Other liabilities |
|
|
7,582 |
|
|
|
7,545 |
|
Shareholders’ equity |
|
|
46,307 |
|
|
|
31,348 |
|
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity |
|
$ |
103,866 |
|
|
$ |
82,538 |
|
|
|
|
|
|
|
|
- MORE -
Astronics Corporation Reports Third Quarter 2007 Results
November 2, 2007
Page 6 of 6
ASTRONICS CORPORATION
SALES BY MARKET
($, in thousands)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
% |
|
|
2007 |
|
| |
|
9/29/2007 |
|
|
9/30/2006 |
|
|
change |
|
|
9/29/2007 |
|
|
9/30/2006 |
|
|
change |
|
|
YTD |
|
Military |
|
$ |
6,731 |
|
|
$ |
6,136 |
|
|
|
10 |
% |
|
$ |
19,696 |
|
|
$ |
19,724 |
|
|
|
0 |
% |
|
|
16 |
% |
Commercial Transport |
|
|
23,116 |
|
|
|
14,993 |
|
|
|
54 |
% |
|
|
79,433 |
|
|
|
44,448 |
|
|
|
79 |
% |
|
|
65 |
% |
Business Jet |
|
|
7,626 |
|
|
|
6,340 |
|
|
|
20 |
% |
|
|
21,952 |
|
|
|
16,668 |
|
|
|
32 |
% |
|
|
18 |
% |
Other |
|
|
251 |
|
|
|
283 |
|
|
|
-11 |
% |
|
|
886 |
|
|
|
1,007 |
|
|
|
-12 |
% |
|
|
1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
37,724 |
|
|
$ |
27,752 |
|
|
|
36 |
% |
|
$ |
121,967 |
|
|
$ |
81,847 |
|
|
|
49 |
% |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASTRONICS CORPORATION
SALES BY PRODUCT
($, in thousands)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
% |
|
|
2007 |
|
| |
|
9/29/2007 |
|
|
9/30/2006 |
|
|
change |
|
|
9/29/2007 |
|
|
9/30/2006 |
|
|
change |
|
|
YTD % |
|
Cockpit Lighting |
|
$ |
10,051 |
|
|
$ |
8,300 |
|
|
|
21 |
% |
|
$ |
27,064 |
|
|
$ |
23,582 |
|
|
|
15 |
% |
|
|
22 |
% |
Cabin Electronics |
|
|
18,803 |
|
|
|
11,570 |
|
|
|
63 |
% |
|
|
66,346 |
|
|
|
32,658 |
|
|
|
103 |
% |
|
|
54 |
% |
Airframe Power |
|
|
4,079 |
|
|
|
3,759 |
|
|
|
9 |
% |
|
|
14,572 |
|
|
|
12,320 |
|
|
|
18 |
% |
|
|
12 |
% |
Exterior Lighting |
|
|
2,353 |
|
|
|
1,872 |
|
|
|
26 |
% |
|
|
6,437 |
|
|
|
5,851 |
|
|
|
10 |
% |
|
|
5 |
% |
Cabin Lighting |
|
|
2,187 |
|
|
|
1,968 |
|
|
|
11 |
% |
|
|
6,662 |
|
|
|
6,429 |
|
|
|
4 |
% |
|
|
6 |
% |
Other |
|
|
251 |
|
|
|
283 |
|
|
|
-11 |
% |
|
|
886 |
|
|
|
1,007 |
|
|
|
-12 |
% |
|
|
1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
37,724 |
|
|
$ |
27,752 |
|
|
|
36 |
% |
|
$ |
121,967 |
|
|
$ |
81,847 |
|
|
|
49 |
% |
|
|
100 |
% |
|
|
|
|
|
|
|
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- END -
