Astronics Corporation Annual report [Section 13 and 15(d), not S-K Item 405]

Annual report [Section 13 and 15(d), not S-K Item 405]

INCOME TAXES (Tables)

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2025

Schedule of Income before Income Tax, Domestic and Foreign

The components of income (loss) before provision for (benefit from) income taxes are as follows:


(In thousands)	2025		2024		2023
United States	$	22,956	$	(17,426)	$	(32,809)
Foreign	8,989		9,559		6,498
Income (Loss) Before Provision for (Benefit from) Income Taxes	$	31,945	$	(7,867)	$	(26,311)

Schedule of Provision for (Benefit from) Income Taxes

The provision for (benefit from) income taxes at December 31 consists of the following:


(In thousands)	2025		2024		2023
Current
U.S. Federal	$	1,190	$	6,026	$	(2,573)
State	1,398		985		937
Foreign	1,360		1,357		1,600
Current	3,948		8,368		(36)

Deferred
U.S. Federal	(449)		(14)		(336)
State	(502)		(98)		583
Foreign	(411)		92		(101)
Deferred	(1,362)		(20)		146
Total	$	2,586	$	8,348	$	110

Schedule of Cash Flow, Supplemental Disclosures

The following table summarizes the Company’s income tax payments net of tax refunds by jurisdiction:


(In thousands)	2025		2024		2023
U.S. Federal	$	8,903
U.S. State and Local	742
Foreign:
Canada	2,177
Other1	(217)
Foreign	1,960
Total Cash Paid for Income Taxes, Net of Refunds	$	11,605
Total Cash Paid for Income Taxes, Net of Refunds (Prior to ASU 2023-09)			$	3,537	$	1,964

1 Includes jurisdictions below the threshold for the period presented

Schedule of Effective Tax Rates Differ From Statutory Federal Income Tax Rate

The effective tax rates differ from the statutory federal income tax rate as follows:


	Amount (in thousands)		Percent
Statutory Federal Income Tax Rate	$	6,708	21.0	%
State and Local Income Taxes, Net of Federal Income Tax Effect1	707		2.2	%
Foreign Tax Effects
France
Change in Valuation Allowance	(1,243)		(3.9)	%
Other	37		0.1	%
Other Foreign Jurisdictions	267		0.8	%
Effect of Cross-Border Tax Laws
Global Intangible Low-taxed Income	2,307		7.2	%
Foreign-derived Intangible Income	(513)		(1.6)	%
Tax Credits
Research and Development Tax Credits	(4,291)		(13.4)	%
Change in Valuation Allowance	(8,711)		(27.2)	%
Nontaxable or Nondeductible Items
Stock Compensation Expense	(822)		(2.6)	%
Nondeductible Premium on Bond Repurchase	4,491		14.1	%

162(m) Limitation2	2,675		8.4	%
Other	539		1.7	%


IRS Audit Adjustments	361		1.1	%
Other	74		0.2	%
Effective Tax Rate	$	2,586	8.1	%

1 State taxes in California for 2025 make up the majority (greater than 50%) of the tax effect in this category 2 Approximately $0.7 million of the line item relates to current year 162(m) limitations and the remaining amount relates to anticipated limitations of the existing deferred tax asset upon reversal

The table below includes a reconciliation of the U.S. federal statutory rate of 21% to the Company's effective tax rate for the years ended December 31, 2024 and 2023, prior the adoption of ASU 2023-09:


	2024		2023
Statutory Federal Income Tax Rate	21.0	%	21.0	%
Permanent Items
Stock Compensation Expense	(2.0)	%	(1.4)	%
Meals and Entertainment	(1.7)	%	—	%
Parking Expenses	(1.4)	%	—	%
Other	(7.4)	%	(1.4)	%
Foreign Tax Rate Differential	7.1	%	(0.4)	%
State Income Tax, Net of Federal Income Tax Effect	(8.9)	%	(4.6)	%
Research and Development Tax Credits	47.4	%	14.1	%
Change in Valuation Allowance	(172.7)	%	(26.1)	%
Net GILTI and FDII Tax Expense (Benefit)	16.4	%	(1.0)	%
Penalties	(3.1)	%	—	%
Other	(0.8)	%	(0.6)	%
Effective Tax Rate	(106.1)	%	(0.4)	%

Schedule of Significant Components of Company's Deferred Tax Assets and Liabilities

Significant components of the Company’s deferred tax assets and liabilities at December 31, are as follows:


(In thousands)	2025		2024
Deferred Tax Assets:
Asset Reserves	$	22,450	$	22,293
Deferred Compensation	5,835		6,096
Financing Costs	5,699		—
Section 163(j) - Interest Expense Limitation	43		2,982
State Investment and Research and Development Tax Credit Carryforwards, Net of Federal Tax	4,684		1,093
Customer Advanced Payments and Deferred Revenue	697		257
Net Operating Loss Carryforwards and Other	18,139		10,060
Goodwill and Intangible Assets	575		890
ASC 606 Revenue Recognition	428		374
Research & Development Costs	18,754		35,061
Lease Liabilities	10,753		6,059
Other	4,455		6,941
Total Gross Deferred Tax Assets	92,512		92,106
Valuation Allowance	(74,451)		(78,659)
Deferred Tax Assets	18,061		13,447
Deferred Tax Liabilities:
Depreciation	8,559		7,771
ASC 606 Revenue Recognition - Section 481(a) Adjustment	—		113
Lease Assets	8,024		5,695
Earnout Income Accrual	104		102
Other	1,392		1,041
Deferred Tax Liabilities	18,079		14,722
Net Deferred Tax Liabilities	$	(18)	$	(1,275)

Schedule of Components of Net Deferred Tax Assets and Liabilities

The net deferred tax assets and liabilities presented in the Consolidated Balance Sheets are as follows at December 31:


(In thousands)	2025		2024
Other Assets — Long-term	$	622	$	159

Deferred Tax Liabilities — Long-term	(640)		(1,434)

Net Deferred Tax Liabilities	$	(18)	$	(1,275)

Schedule of Reconciliation of Total Amounts of Unrecognized Tax Benefits Excluding Interest and Penalties


(in thousands)	2025		2024		2023
Balance at Beginning of the Year	$	—	$	100	$	443
Decreases as a Result of Tax Positions Taken in Prior Years	—		(100)		(343)

Balance at End of the Year	$	—	$	—	$	100