Astronics Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Segments

Segments

12 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

Segments

SEGMENTS

Segment information and reconciliations to consolidated amounts for the years ended December 31 are as follows:



(In thousands)	2017			2016			2015
Sales:
Aerospace	$	534,724		$	534,408		$	549,738
Less Inter-segment Sales	(121		)	(367		)	—
Total Aerospace Sales	534,603			534,041			549,738

Test Systems	89,861			99,082			142,596
Less Inter-segment Sales	—			—			(55		)
Test Systems	89,861			99,082			142,541
Total Consolidated Sales	$	624,464		$	633,123		$	692,279
Operating Profit and Margins:
Aerospace	$	38,888		$	77,966		$	85,103
	7.3		%	14.6		%	15.5		%
Test Systems	7,359			8,507			25,529
	8.2		%	8.6		%	17.9		%
Total Operating Profit	$	46,247		$	86,473		$	110,632
	7.4		%	13.7		%	16.0		%
Deductions from Operating Profit:
Interest Expense, Net of Interest Income	$	(5,369	)	$	(4,354	)	$	(4,751	)
Corporate and Other Expenses, Net	(15,887		)	(13,334		)	(11,831		)
Income before Income Taxes	$	24,991		$	68,785		$	94,050
Depreciation and Amortization:
Aerospace	$	22,111		$	19,873		$	19,377
Test Systems	4,302			5,273			5,209
Corporate	650			644			723
Total Depreciation and Amortization	$	27,063		$	25,790		$	25,309
Assets:
Aerospace	$	621,047		$	500,892		$	510,884
Test Systems	90,859			76,575			64,934
Corporate	24,050			26,877			33,425
Total Assets	$	735,956		$	604,344		$	609,243
Capital Expenditures:
Aerospace	$	10,656		$	9,511		$	16,503
Test Systems	2,721			3,345			2,103
Corporate	101			181			35
Total Capital Expenditures	$	13,478		$	13,037		$	18,641

Operating profit is sales less cost of products sold and other operating expenses, excluding interest expense and other corporate expenses. Cost of products sold and other operating expenses are directly identifiable to the respective segment.

For the years ended December 31, 2017, there was a goodwill impairment loss of $16.2 million recorded in the Aerospace segment. In 2016 and 2015, there was no goodwill or purchased intangible asset impairment losses in either the Aerospace or Test System segment. In the Aerospace segment, goodwill amounted to $125.6 million and $115.2 million at December 31, 2017 and 2016, respectively. In the Test Systems segment, there was no goodwill as of December 31, 2017 and 2016.

The following table summarizes the Company’s sales into the following geographic regions for the years ended December 31:



	2017		2016		2015
(In thousands)
United States	$	482,219	$	504,270	$	508,724
North America (excluding United States)	6,198		12,331		13,044
Asia	58,732		52,171		108,967
Europe	73,677		61,200		57,936
South America	1,280		577		1,112
Other	2,358		2,574		2,496
	$	624,464	$	633,123	$	692,279

The following table summarizes the Company’s property, plant and equipment by country for the years ended December 31:



	2017		2016		2015
(In thousands)
United States	$	116,026	$	114,048	$	115,117
France	9,094		8,216		9,092
Canada	710		548		533
	$	125,830	$	122,812	$	124,742

Sales recorded by the Company’s foreign operations were $53.9 million, $50.1 million and $50.8 million in 2017, 2016 and 2015, respectively. Net income from these locations was $2.2 million, $1.8 million and $3.4 million in 2017, 2016 and 2015, respectively. Net assets held outside of the U.S. total $47.4 million and $36.8 million at December 31, 2017 and 2016, respectively. The exchange gain included in determining net income was insignificant in 2017 and 2016. Cumulative translation adjustments amounted to $(4.5) million and $(8.6) million at December 31, 2017 and 2016, respectively.

The Company has a significant concentration of business with two major customers; Panasonic Aviation Corporation (“Panasonic”) and The Boeing Company (“Boeing”). The following is information relating to the activity with those customers:



	2017	2016	2015
Percent of Consolidated Revenue
Panasonic	19.1%	21.6%	21.0%
Boeing	16.8%	15.2%	13.0%



(In thousands)	2017		2016
Accounts Receivable at December 31,
Panasonic	$	10,200	$	17,126
Boeing	$	12,969	$	11,737

Sales to Panasonic are in the Aerospace segment. Sales to Boeing occur in both segments.