Exhibit 99.1
Astronics Corporation Reports Sales Increase 7% for the Third Quarter of 2008
October 30, 2008
Page 1 of 7
| |
|
|
For more information contact: |
|
|
David C. Burney, Chief Financial Officer
|
|
Deborah K. Pawlowski |
Phone: (716) 805-1599, ext. 159
|
|
Kei Advisors LLC |
Fax: (716) 805-1286
|
|
Phone: (716) 843-3908 |
Email: david.burney@astronics.com
|
|
Email: dpawlowski@keiadvisors.com |
FOR IMMEDIATE RELEASE
Astronics Corporation Reports Sales Increase 7% for Third Quarter 2008
EAST AURORA, NY, October 30, 2008 — 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 $40.4 million in the third quarter of 2008,
which ended September 27, 2008, up 7.0% compared with $37.7 million in the third quarter of 2007.
Net income declined to $2.4 million, or $0.22 per diluted share, in the third quarter of 2008
compared with $4.1 million, or $0.38 per diluted share, in the same period the prior year. Net
income was adversely impacted by higher engineering and development spending, higher manufacturing
costs related to increased infrastructure and capacity, and sales mix. All per share data was
adjusted to reflect a one-for-four Class B Stock distribution that was distributed on or about
October 17, 2008.
Commercial transport market sales increased to $25.5 million in the third quarter of 2008, up 10.3%
compared with $23.1 million in the same period the prior year primarily as a result of increased
cabin electronics sales. Military sales increased 12.2% to $7.6 million in the third quarter of
2008 compared with $6.7 million in the prior year’s third quarter. Sales to the business jet
market decreased $0.5 million to $7.1 million compared with $7.6 million in the third quarters of
2008 and 2007, respectively. Lower sales to this market were directly related to a $1.7 million
decline in sales to Eclipse Aviation, a very light jet manufacturer, in the third quarter of 2008
compared with the prior year’s third quarter. This decrease was mostly offset by higher sales to
other business jet manufacturers, which included new aircraft that had higher values of product
content.
Peter J. Gundermann, President and Chief Executive Officer of Astronics, commented, “Our third
quarter demonstrated solid results despite weakening macro-economic conditions and the reduction in
aircraft production by Eclipse Aviation. However, strong sales to our customers in the commercial
transport and military markets, as well as other business jet manufacturers, more than offset the
impact of Eclipse’s decline.”
-MORE-
Astronics Corporation Reports Sales Increase 7% for the Third Quarter of 2008
October 30, 2008
Page 2 of 7
Third Quarter Operating Results
Gross profit was $7.9 million, or 19.6% of sales, in the third quarter of 2008 compared with
$10.1 million, or 26.9% of sales, in the same period the prior year. The third quarter of 2007 was
positively impacted by a $0.9 million adjustment related to the 2007 estimated manufacturing
overhead cost absorption. The reduction in gross margin reflects higher engineering and
development (E&D) spending, combined with overall higher manufacturing costs primarily related to
increased infrastructure and capacity somewhat offset by greater operating leverage from higher
sales. E&D expenses were $5.7 million in the third quarter of 2008 compared with $3.9 million in
the third quarter of 2007.
Selling, general and administrative and other (SG&A) expense was $4.1 million, or 10.1% of sales,
in the third quarter of 2008, up slightly on an absolute basis compared with $3.9 million, or 10.3%
of sales, in the same period the prior year. Operating margin for the third quarter of 2008 was
9.6% compared with 16.6% in the third quarter of 2007, primarily as a result of the lower gross
margin.
Nine-Month Review
For the first nine months of 2008, sales were $129.3 million, up $7.3 million, or 6.0%, compared
with $122.0 million in the first nine months of 2007. Gross profit was down $4.7 million in the
2008 nine-month period. Gross margin was 22.1% in the first nine months of 2008, down from 27.2%
in the same period the prior year primarily due to higher E&D expenses, combined with an overall
increase in manufacturing costs related to increased infrastructure and capacity somewhat offset by
greater operating leverage from higher sales and sales mix. E&D expense for the first nine months
of 2008 was $16.6 million compared with $11.1 million in the first nine months on 2007. E&D
expense is expected to be approximately $22 million for 2008.
SG&A expense remained flat at $12.6 million for the first nine months of 2008 and 2007. Operating
margin was 12.4% for the first nine months of 2008 compared with 16.9% in the same period the prior
year reflecting the lower gross margin.
Net income was $10.1 million, or $0.95 per diluted share, in the first nine months of 2008 compared
with $13.3 million, or $1.25 per diluted share, in the same period the prior year.
Mr. Gundermann noted, “Margins this year have been affected by our increased E&D spending, which is
focused on applied development of new technologies and products. We believe these innovations are
key enablers of our future growth.”
Liquidity and Capital Expenditures
Cash and cash equivalents were $0.5 million at September 27, 2008 compared with $2.8 million at
December 31, 2007, as cash was used to pay down debt and fund increasing working capital
requirements. The Company has a $60 million line of credit of which $56 million was available at
the end of the third quarter.
Capital expenditures for the third quarter and first nine months of 2008 were $1.1 million and
$3.2 million, respectively, compared with $1.6 million and $7.6 million in the same periods the
prior year, respectively. The higher expenditures in 2007 were primarily to support facility
expansions and equipment investments. Capital expenditures are expected to be approximately $4.5
million to $6 million for 2008.
-MORE-
Astronics Corporation Reports Sales Increase 7% for the Third Quarter of 2008
October 30, 2008
Page 3 of 7
Outlook
Orders in the third quarter of 2008 were $30.8 million compared with $33.3 million in the third
quarter of 2007. Backlog at September 27, 2008 was $92.1 million, up from backlog of $90.0 million
at the end of the third quarter of 2007. Approximately 50% of backlog is currently planned for
shipment in the fourth quarter of 2008.
Mr. Gundermann concluded, “Bookings in the third quarter were lower than our recent pace due, in
part, to the removal of $3.6 million in Eclipse orders and because the third quarter tends to be
the lightest quarter for bookings. While we recognize that there are serious economic issues right
now, our market continues to show strength. Most of our original equipment manufacturer customers
are planning production levels next year that will be at or above the current rates. We are
maintaining a revenue forecast at the lower end of our previous range at approximately $175 million
for fiscal 2008, which represents an 11% increase compared with 2007 sales. We plan to provide
revenue guidance for 2009 when we release our fourth quarter results early in 2009.”
Third Quarter 2008 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 (201) 689-8562 and requesting conference
ID number 300129 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 300129. |
The telephonic replay will be available from 2 p.m. ET the day of the call through 11:59 p.m. ET on
November 6, 2008.
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.
-MORE-
Astronics Corporation Reports Sales Increase 7% for the Third Quarter of 2008
October 30, 2008
Page 4 of 7
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 Sales Increase 7% for the Third Quarter of 2008
October 30, 2008
Page 5 of 7
ASTRONICS CORPORATION
CONSOLIDATED INCOME STATEMENT DATA
(unaudited)
(in thousands except per share data)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three months ended |
|
|
Nine months ended |
|
| |
|
9/27/2008 |
|
|
9/29/2007 |
|
|
9/27/2008 |
|
|
9/29/2007 |
|
Sales |
|
$ |
40,363 |
|
|
$ |
37,724 |
|
|
$ |
129,341 |
|
|
$ |
121,967 |
|
Cost of products sold |
|
|
32,455 |
|
|
|
27,582 |
|
|
|
100,811 |
|
|
|
88,740 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
7,908 |
|
|
|
10,142 |
|
|
|
28,530 |
|
|
|
33,227 |
|
Gross margin |
|
|
19.6 |
% |
|
|
26.9 |
% |
|
|
22.1 |
% |
|
|
27.2 |
% |
Selling general and administrative |
|
|
4,030 |
|
|
|
3,877 |
|
|
|
12,552 |
|
|
|
12,557 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
|
3,878 |
|
|
|
6,265 |
|
|
|
15,978 |
|
|
|
20,670 |
|
Operating margin |
|
|
9.6 |
% |
|
|
16.6 |
% |
|
|
12.4 |
% |
|
|
16.9 |
% |
Interest expense, net |
|
|
182 |
|
|
|
396 |
|
|
|
554 |
|
|
|
1,072 |
|
Other (income) expense |
|
|
60 |
|
|
|
— |
|
|
|
73 |
|
|
|
(11 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before tax |
|
|
3,636 |
|
|
|
5,869 |
|
|
|
15,351 |
|
|
|
19,609 |
|
Income taxes |
|
|
1,257 |
|
|
|
1,743 |
|
|
|
5,209 |
|
|
|
6,287 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
$ |
2,379 |
|
|
$ |
4,126 |
|
|
$ |
10,142 |
|
|
$ |
13,322 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share:* |
|
$ |
0.23 |
|
|
$ |
0.41 |
|
|
$ |
0.99 |
|
|
$ |
1.32 |
|
Diluted earnings per share:* |
|
$ |
0.22 |
|
|
$ |
0.38 |
|
|
$ |
0.95 |
|
|
$ |
1.25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted shares outstanding* |
|
|
10,688 |
|
|
|
10,669 |
|
|
|
10,681 |
|
|
|
10,618 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures |
|
$ |
1,058 |
|
|
$ |
1,649 |
|
|
$ |
3,188 |
|
|
$ |
7,566 |
|
Depreciation and Amortization |
|
$ |
980 |
|
|
$ |
876 |
|
|
$ |
2,989 |
|
|
$ |
2,447 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
| * |
|
All share quantities and per share data reported have been adjusted to reflect the impact
of a one-for-four Class B stock distribution that was distributed on or about October 17, 2008. |
ASTRONICS CORPORATION
ORDER AND BACKLOG TREND
($, in thousands)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
2007 |
|
|
2008 |
|
| |
|
Q1 2007 |
|
|
Q2 2007 |
|
|
Q3 2007 |
|
|
Q4 2007 |
|
|
Twelve Months |
|
|
Q1 2008 |
|
|
Q2 2008 |
|
|
Q3 2008 |
|
| |
|
3/31/07 |
|
|
6/30/07 |
|
|
9/29/07 |
|
|
12/31/07 |
|
|
12/31/07 |
|
|
3/29/08 |
|
|
6/28/08 |
|
|
9/27/08 |
|
Sales |
|
$ |
42,875 |
|
|
$ |
41,368 |
|
|
$ |
37,724 |
|
|
$ |
36,273 |
|
|
$ |
158,240 |
|
|
$ |
41,089 |
|
|
$ |
47,889 |
|
|
$ |
40,363 |
|
Net Income |
|
$ |
4,695 |
|
|
$ |
4,501 |
|
|
$ |
4,126 |
|
|
$ |
2,069 |
|
|
$ |
15,391 |
|
|
$ |
2,647 |
|
|
$ |
5,116 |
|
|
$ |
2,379 |
|
Bookings |
|
$ |
40,351 |
|
|
$ |
38,711 |
|
|
$ |
33,347 |
|
|
$ |
38,712 |
|
|
$ |
151,121 |
|
|
$ |
45,830 |
|
|
$ |
52,386 |
|
|
$ |
30,798 |
|
Backlog |
|
$ |
97,003 |
|
|
$ |
94,346 |
|
|
$ |
89,969 |
|
|
$ |
92,408 |
|
|
$ |
92,408 |
|
|
$ |
97,149 |
|
|
$ |
101,646 |
|
|
$ |
92,081 |
|
Book:Bill |
|
|
0.94 |
|
|
|
0.94 |
|
|
|
0.88 |
|
|
|
1.07 |
|
|
|
0.96 |
|
|
|
1.12 |
|
|
|
1.09 |
|
|
|
0.76 |
|
-MORE-
Astronics Corporation Reports Sales Increase 7% for the Third Quarter of 2008
October 30, 2008
Page 6 of 7
ASTRONICS CORPORATION
CONSOLIDATED BALANCE SHEET DATA
(unaudited)
| |
|
|
|
|
|
|
|
|
| (in thousands) |
|
9/27/2008 |
|
|
12/31/2007 |
|
|
|
|
|
|
|
|
|
|
ASSETS: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
509 |
|
|
$ |
2,818 |
|
Accounts receivable |
|
|
27,818 |
|
|
|
20,720 |
|
Inventories |
|
|
42,661 |
|
|
|
36,920 |
|
Other current assets |
|
|
3,184 |
|
|
|
3,563 |
|
Property, plant and equipment, net |
|
|
30,611 |
|
|
|
30,083 |
|
Other assets |
|
|
9,169 |
|
|
|
10,017 |
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
113,952 |
|
|
$ |
104,121 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY: |
|
|
|
|
|
|
|
|
Current maturities of long term debt |
|
$ |
943 |
|
|
$ |
951 |
|
Note payable |
|
|
4,000 |
|
|
|
7,300 |
|
Accounts payable and accrued expenses |
|
|
25,986 |
|
|
|
23,670 |
|
Long-term debt |
|
|
14,093 |
|
|
|
14,684 |
|
Other liabilities |
|
|
8,253 |
|
|
|
8,284 |
|
Shareholders’ equity |
|
|
60,677 |
|
|
|
49,232 |
|
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity |
|
$ |
113,952 |
|
|
$ |
104,121 |
|
|
|
|
|
|
|
|
ASTRONICS CORPORATION
SALES BY MARKET
($, in thousands)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
|
| |
|
9/27/2008 |
|
|
9/29/2007 |
|
|
% change |
|
|
9/27/2008 |
|
|
9/29/2007 |
|
|
% change |
|
|
2008 YTD % |
|
Commercial Transport |
|
$ |
25,501 |
|
|
$ |
23,116 |
|
|
|
10 |
% |
|
$ |
77,609 |
|
|
$ |
79,433 |
|
|
|
-2 |
% |
|
|
60 |
% |
Military |
|
|
7,556 |
|
|
|
6,731 |
|
|
|
12 |
% |
|
|
24,225 |
|
|
|
19,696 |
|
|
|
23 |
% |
|
|
19 |
% |
Business Jet |
|
|
7,052 |
|
|
|
7,626 |
|
|
|
-8 |
% |
|
|
26,687 |
|
|
|
21,952 |
|
|
|
22 |
% |
|
|
20 |
% |
Other |
|
|
254 |
|
|
|
251 |
|
|
|
1 |
% |
|
|
820 |
|
|
|
886 |
|
|
|
-7 |
% |
|
|
1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
40,363 |
|
|
$ |
37,724 |
|
|
|
7 |
% |
|
$ |
129,341 |
|
|
$ |
121,967 |
|
|
|
6 |
% |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-MORE-
Astronics Corporation Reports Sales Increase 7% for the Third Quarter of 2008
October 30, 2008
Page 7 of 7
ASTRONICS CORPORATION
SALES BY PRODUCT
($, in thousands)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
|
| |
|
9/27/2008 |
|
|
9/29/2007 |
|
|
% change |
|
|
9/27/2008 |
|
|
9/29/2007 |
|
|
% change |
|
|
2008 YTD % |
|
Cabin Electronics |
|
$ |
20,548 |
|
|
$ |
18,803 |
|
|
|
9 |
% |
|
$ |
63,418 |
|
|
$ |
65,556 |
|
|
|
-3 |
% |
|
|
49 |
% |
Cockpit Lighting |
|
|
9,689 |
|
|
|
10,051 |
|
|
|
-4 |
% |
|
|
32,679 |
|
|
|
27,064 |
|
|
|
21 |
% |
|
|
25 |
% |
Airframe Power |
|
|
5,169 |
|
|
|
4,079 |
|
|
|
27 |
% |
|
|
17,493 |
|
|
|
15,362 |
|
|
|
14 |
% |
|
|
14 |
% |
Exterior Lighting |
|
|
2,247 |
|
|
|
2,353 |
|
|
|
-5 |
% |
|
|
8,065 |
|
|
|
6,437 |
|
|
|
25 |
% |
|
|
6 |
% |
Cabin Lighting |
|
|
2,456 |
|
|
|
2,187 |
|
|
|
12 |
% |
|
|
6,866 |
|
|
|
6,662 |
|
|
|
3 |
% |
|
|
5 |
% |
Other |
|
|
254 |
|
|
|
251 |
|
|
|
1 |
% |
|
|
820 |
|
|
|
886 |
|
|
|
-7 |
% |
|
|
1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
40,363 |
|
|
$ |
37,724 |
|
|
|
7 |
% |
|
$ |
129,341 |
|
|
$ |
121,967 |
|
|
|
6 |
% |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
END
