Astronics Corporation Reports Fourth Quarter and Full Year 2012 Results

Tue Feb 5, 2013 6:55am EST

* Reuters is not responsible for the content in this press release.

http://pdf.reuters.com/htmlnews/8knews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20130205:nBw055534a

http://www.businesswire.com/news/home/20130205005534/en

* Record full year net income of $21.9 million on record sales of $266.4 million
* Fourth quarter diluted earnings per share up 8.8% to $0.37 over prior-year
period
* Fourth quarter sales up 10.2% to $67.4 million
* 2013 revenue expected to be in range of $275 million to $310 million

EAST AURORA, N.Y.--(Business Wire)--
Astronics Corporation (NASDAQ: ATRO),aleading provider of advanced technologies
for the global aerospace and defense industries, today reported financial
results for the three and twelve months ended December 31, 2012. Results include
Ballard Technology acquired November 30, 2011 and Max-Viz acquired July 31,
2012.

                                                                                                                                                   
                              Three Months Ended                                          Twelve Months Ended                                      
                              Dec 31,                          Dec 31,       %            Dec 31,                            Dec 31,      %        
                              2012                             2011          Change       2012                               2011         Change   
                                                                                                                                                   
 Sales                        $         67,420            $    61,156        10.2%        $         266,446          $       228,163      16.8%    
 Gross profit                 $         17,551            $    17,349        1.2%         $         69,442           $       60,496       14.8%    
 Gross profit percentage                26.0%                  28.4%                                26.1%                    26.5%                 
 Impairment Loss                        -                      2,500                                -                        2,500                 
 SG&A                         $         9,622             $    7,326         31.3%        $         36,817           $       27,175       35.5%    
 SG&A percent to sales                  14.3%                  12.0%                                13.8%                    11.9%                 
 Income from Operations       $         7,929             $    7,523         5.4%         $         32,625           $       30,821       5.9%     
 Operating margin %                     11.8%                  12.3%                                12.2%                    13.5%                 
 Net Income                   $         5,655             $    5,169         9.4%         $         21,874           $       21,591       1.3%     
 Net Income %                           8.4%                   8.5%                                 8.2%                     9.5%                  
                                                                                                                                                   


Peter J. Gundermann, President and Chief Executive Officer, commented, "2012 was
a great year for Astronics as we continued to grow both organically and through
successful, growing acquisitions. We had record revenue and net income, and
ended the year with a strong backlog to begin 2013." 

Consolidated Fourth Quarter Review

Consolidated sales for the fourth quarter of 2012 increased by 10.2% to $67.4
million, including $4.7 million associated with acquisitions, compared with
$61.2 million for the same period last year. Aerospace sales increased by $6.5
million and Test Systems sales decreased by $0.2 million. 

Consolidated gross margin decreased to 26.0% in the fourth quarter of 2012
compared with 28.4% in the fourth quarter of 2011. Lower gross margin was a
result of increased engineering and development ("E&D") costs and increases to
inventory and warranty reserves, partially offset by the leverage achieved from
the increased sales as compared with the 2011 fourth quarter. E&D costs were
$11.1 million in the fourth quarter of 2012 compared with $9.5 million in the
same period of 2011, an increase of $1.6 million. Expense relating to warranty
and inventory reserves resulted in a $1.2 million increase in cost of goods sold
compared with the 2011 fourth quarter. 

Selling, general and administrative ("SG&A") expenses were $9.6 million, or
14.3% of sales in the fourth quarter of 2012, compared with $7.3 million, or
12.0% of sales in the same period last year. The increase of $2.3 million was
due primarily to incremental SG&A from acquisitions totaling $1.6 million, as
well as higher legal and compensation costs. The fourth quarter of 2011 included
a non-cash pre-tax charge of $2.5 million for impairment of goodwill and
intangible assets related to the Test Systems business. 

Consolidated Full Year Review

Consolidated sales for the full year of 2012 increased by 16.8%, or $38.3
million, to $266.4 million. Organic sales increased $23.4 million, while sales
associated with acquisitions added $14.8 million. Aerospace sales increased by
$41.1 million, while Test Systems sales decreased by $2.8 million in the full
year of 2012. 

Consolidated gross margin decreased slightly to 26.1% in 2012 compared with
26.5% in 2011. The decrease in margin was a result of leverage that was achieved
from increased sales volumes offset by increased E&D costs and higher inventory
and warranty reserves. E&D costs were $44.9 million in 2012 compared with $36.1
million in 2011, an increase of $8.8 million. The Company expects consolidated
E&D expenses for 2013 to be in the range of $42 million to $46 million. Warranty
and inventory reserve expense was up $2.3 million in 2012 compared with 2011. 

SG&A expenses in 2012 were approximately $36.8 million, or 13.8% of sales,
compared with $27.2 million, or 11.9% of sales in the prior year. The increase
of $9.6 million was due primarily to acquisitions, which added $6.1 million to
SG&A in 2012. Also contributing to the increase were higher legal and
compensation costs. 

Aerospace Segment Review(refer to sales by market and segment data in
accompanying tables)

In the fourth quarter of 2012, sales to the Commercial Transport market
increased primarily on higher demand for Cabin Electronics products as well as
growth in sales of Airframe Power and Avionics. Military sales were down when
compared with the prior year`s fourth quarter as increased Avionics sales were
more than offset by lower Aircraft Lighting and Airframe Power sales to this
market. Sales to the Business Jet market were up when compared with the prior
year`s fourth quarter as higher Aircraft Lighting sales and the addition of
enhanced vision systems in the Avionics product line were partially offset by a
decrease in Airframe Power sales to this market. 

Aerospace operating profit for the fourth quarter of 2012 was $10.8 million, or
16.6% of sales, compared with $12.2 million, or 20.9% of sales, in the same
period the prior year. The decline in operating profit was due to leverage from
higher sales volume being offset by increased E&D costs, compensation costs,
legal costs and warranty and inventory reserve adjustments. 

Full year Aerospace sales for 2012 increased by $41.1 million, or 19.2%, to
$255.0 million from $213.9 million in 2011. Organic Aerospace sales increased
$26.2 million while acquisitions added $14.9 million. Sales growth was primarily
driven by increased sales of Cabin Electronics products sold to the Commercial
Transport market as well as the addition of acquired Avionics products. Military
sales were up slightly due primarily to the addition of Avionics being offset by
lower Aircraft Lighting and Airframe Power sales. Sales to the Business Jet
market were higher, due primarily to Avionics and increased volume of Aircraft
Lighting products somewhat offset by lower Airframe Power sales. Sales remained
flat to the FAA/Airport market. 

Aerospace operating profit for the full year of 2012 was $44.1 million, or 17.3%
of sales, compared with $40.4 million, or 18.9% of sales, in the same period the
prior year. The increase in operating profit was due to leverage from the
increased sales volume offset by increased E&D, compensation, legal costs as
well as increases to warranty and inventory reserves. 

Test Systems Segment Review(refer to sales by market and segment data in
accompanying tables)

Sales in the 2012 fourth quarter decreased slightly by $0.2 million to $2.7
million when compared with sales of $2.9 million for the same period in 2011.
Sales for the full year of 2012 decreased $2.8 million to $11.5 million when
compared with sales of $14.3 million for the same period in 2011. 

Test Systems operating loss was $1.5 million and $5.0 million for the fourth
quarter and full year of 2012, compared with losses of $3.4 million and $4.8
million for the fourth quarter and 2011 full year, respectively. The 2011
operating loss included a non-cash pre-tax charge of $2.5 million for impairment
of goodwill and intangible assets. 

Balance Sheet

Cash at the end of 2012 was $7.4 million compared with $10.9 million at December
31, 2011. Year-to-date cash provided by operating activities was approximately
$24.2 million. Cash used for acquisitions was $10.7 million and capital
expenditures were $16.7 million, of which approximately $12.0 million was
related to the build out of a new facility in Kirkland, Washington. Net cash
used to reduce long-term debt was $3.3 million during the year. 

The Company expects capital spending in 2013 to be approximately $5 million to
$10 million. 

Outlook

On December 31, 2012, backlog was $114.5 million, down from backlog of $115.6
million at the end of the trailing third quarter of 2012 and improved over
backlog of $106.3 million at the end of the fourth quarter of 2011.
Approximately $100 million of this backlog is expected to ship in 2013. 

Mr. Gundermann concluded, "We expect the positive trends that supported us
through 2012 to continue in 2013. We believe that commercial airlines will
continue the trend of providing electrical power to their customers and that the
business jet industry will continue to value our advanced electrical, avionics,
and lighting solutions. We expect that our positions on premier military
programs will continue to serve us well in 2013, though the funding environment
may be challenging. We expect 2013 will be another strong year for Astronics
Corporation." 

The Company expects 2013 revenue to be in the range of $275 million to $310
million. Astronics anticipates that approximately $265 million to $300 million
of forecasted 2013 revenue will be from its Aerospace segment, while
approximately $10 million of the forecasted revenue will be from its Test
Systems segment. 

Fourth Quarter and Full Year 2012 Webcast and Conference Call

The Company will host a teleconference at 11:00 AM ET on Tuesday, February 5,
2013. During the teleconference, Peter J. Gundermann, President and CEO, and
David C. Burney, Executive 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 by calling (201) 689-8562. The
listen-only audio webcast can be monitored at www.astronics.com. To listen to
the archived call, dial (858) 384-5517 and enter conference ID number 406938.
The telephonic replay will be available from 2:00 p.m. on the day of the call
through Tuesday, February 12, 2013. A transcript will also be posted to the
Company`s Web site, once available. 

About Astronics Corporation

Astronics Corporation is a leader in advanced, high-performance lighting,
electrical power and automated test systems for the global aerospace and defense
industries. Astronics` strategy is to develop and maintain positions of
technical leadership in its chosen aerospace and defense markets, to leverage
those positions to grow the amount of content and volume of product it sells to
those markets and to selectively acquire businesses with similar technical
capabilities that could benefit from our leadership position and strategic
direction. Astronics Corporation, and its wholly-owned subsidiaries, Astronics
Advanced Electronic Systems Corp., Ballard Technology, Inc., DME Corporation,
Luminescent Systems Inc. and Max-Viz, Inc., have a reputation for high-quality
designs, exceptional responsiveness, strong brand recognition and best-in-class
manufacturing practices. The Company routinely posts news and other important
information on its Web site at www.astronics.com. 

For more information on Astronics and its products, visit its Web site at
www.astronics.com.

Safe Harbor Statement

This news 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 expressions. Because such statements apply
to future events, they are subject to risks and uncertainties that could cause
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 and defense industries, 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 news release whether to
reflect changed assumptions, the occurrence of unanticipated events or changes
in future operating results, financial conditions or prospects, or otherwise.

                                                                                                                                  
 ASTRONICS CORPORATION                                                                                                            
 
CONSOLIDATED INCOME STATEMENT DATA                                                                                              
 
(Unaudited, $ in thousands except per share data)                                                                               
                                                                                                                                  
                                          Three Months Ended                            Twelve Months Ended                       
                                                12/31/2012              12/31/2011            12/31/2012              12/31/2011  
 Sales                                    $     67,420            $     61,156          $     266,446           $     228,163     
 Cost of products sold                          49,869                  43,807                197,004                 167,667     
 Gross profit                                   17,551                  17,349                69,442                  60,496      
 Gross margin                                   26.0%                   28.4%                 26.1%                   26.5%       
                                                                                                                                  
 Impairment Loss                                -                       2,500                 -                       2,500       
 Selling, general and administrative            9,622                   7,326                 36,817                  27,175      
 SG&A % of Sales                                14.3%                   12.0%                 13.8%                   11.9%       
 Income from operations                         7,929                   7,523                 32,625                  30,821      
 Operating margin                               11.8%                   12.3%                 12.2%                   13.5%       
                                                                                                                                  
 Interest expense, net                          239                     345                   1,042                   1,806       
 Income before tax                              7,690                   7,178                 31,583                  29,015      
 Income tax expense                             2,035                   2,009                 9,709                   7,424       
 Net Income                               $     5,655             $     5,169           $     21,874            $     21,591      
 Net income % of Sales                          8.4%                    8.5%                  8.2%                    9.5%        
                                                                                                                                  
                                                                                                                                  
 *Basic earnings per share                $     0.39              $     0.36            $     1.53              $     1.55        
 *Diluted earnings per share              $     0.37              $     0.34            $     1.45              $     1.45        
                                                                                                                                  
 *Weighted average diluted shares               15,212                  15,014                15,131                  14,848      
 outstanding (in thousands)                                                                                                       
                                                                                                                                  
 Capital Expenditures                     $     6,150             $     1,406           $     16,720            $     14,281      
 Depreciation and Amortization            $     1,950             $     1,351           $     6,905             $     4,943       
                                                                                                                                  


*All share quantities and per share data reported has been restated to reflect
the impact of the three-for-twenty Class B stock distribution to shareholders of
record on October 29, 2012.

                                                                                      
 ASTRONICS CORPORATION                                                                
 
CONSOLIDATED BALANCE SHEET DATA                                                     
 
(in thousands)                                                                      
                                                                                      
                                                         12/31/2012       12/31/2011  
                                                 (Unaudited)                          
 ASSETS                                                                               
 Cash and cash equivalents                       $       7,380         $  10,919      
 Accounts receivable                                     45,473           35,669      
 Inventories                                             48,624           40,094      
 Other current assets                                    6,533            5,628       
 Property, plant and equipment, net                      53,537           41,122      
 Deferred taxes long-term                                9,019            7,039       
 Other long-term assets                                  2,977            3,249       
 Intangible assets, net                                  16,523           14,000      
 Goodwill                                                21,923           17,185      
 Total Assets                                    $       211,989       $  174,905     
                                                                                      
 LIABILITIES AND SHAREHOLDERS' EQUITY                                                 
 Current maturities of long term debt            $       9,268         $  5,290       
 Accounts payable and accrued expenses                   38,700           28,187      
 Long-term debt                                          20,715           27,973      
 Other liabilities                                       18,172           10,592      
 Shareholders' equity                                    125,134          102,863     
 Total Liabilities and Shareholders' Equity      $       211,989       $  174,905     
                                                                                      


                                                                                                                             
 ASTRONICS CORPORATION                                                                                                       
 
SEGMENT DATA                                                                                                               
 
(Unaudited, $ in thousands)                                                                                                
                                                                                                                             
                                     Three Months Ended                            Twelve Months Ended                       
                                           12/31/2012              12/31/2011            12/31/2012              12/31/2011  
 Sales                                                                                                                       
 Aerospace                           $     64,743            $     58,224          $     254,955           $     213,874     
 Test Systems                              2,677                   2,932                 11,491                  14,289      
 Total Sales                               67,420                  61,156                266,446                 228,163     
                                                                                                                             
 Operating Profit and Margins                                                                                                
 Aerospace                                 10,778                  12,177                44,137                  40,400      
                                           16.6%                   20.9%                 17.3%                   18.9%       
 Test Systems                              (1,460)                 (3,400)               (4,985)                 (4,760)     
                                           (54.5)%                 (116.0)%              (43.4)%                 (33.3)%     
 Total Operating Profit                    9,318                   8,777                 39,152                  35,640      
                                           13.8%                   14.4%                 14.7%                   15.6%       
                                                                                                                             
 Interest Expense                          239                     345                   1,042                   1,806       
 Corporate Expenses and Other              1,389                   1,254                 6,527                   4,819       
 Income Before Taxes                 $     7,690             $     7,178           $     31,583            $     29,015      
 Income Before Taxes % of Sales            11.4%                   11.7%                 11.9%                   12.7%       


                                                                                                                                                       
 ASTRONICS CORPORATION                                                                                                                                 
 
SALES BY MARKET                                                                                                                                      
 
(Unaudited, $ in thousands)                                                                                                                          
                                                                                                                                                       
                           Three Months Ended                                        Twelve Months Ended                                       2012    
                                12/31/2012            12/31/2011       % change           12/31/2012            12/31/2011       % change      YTD %   
 Aerospace Segment                                                                                                                                     
 Commercial Transport      $    45,884           $    40,881           12.2%         $    179,104          $    143,337          25.0%         67.3%   
 Military                       8,697                 9,478            -8.2%              36,511                35,394           3.2%          13.7%   
 Business Jet                   7,607                 5,557            36.9%              29,379                25,983           13.1%         11.0%   
 FAA/Airport                    2,555                 2,308            10.7%              9,961                 9,160            8.7%          3.7%    
 Aerospace Total                64,743                58,224           11.2%              254,955               213,874          19.2%         95.7%   
                                                                                                                                                       
 Test Systems Segment                                                                                                                                  
 Military                       2,677                 2,932            (8.7)%             11,491                14,289           (19.6)%       4.3%    
                                                                                                                                                       
 Total                     $    67,420           $    61,156           10.2%         $    266,446          $    228,163          16.8%         100.0%  
                                                                                                                                                       


                                                                                                                                                    
 ASTRONICS CORPORATION                                                                                                                              
 
SALES BY PRODUCT                                                                                                                                  
 
(Unaudited, $ in thousands)                                                                                                                       
                                                                                                                                                    
                           Three Months Ended                                        Twelve Months Ended                                     2012   
                                12/31/2012            12/31/2011       % change           12/31/2012            12/31/2011       % change    YTD %  
                                                                                                                                                    
 Aerospace Segment                                                                                                                                  
 Cabin Electronics         $    37,402           $    33,186           12.7%         $    141,458          $    114,540          23.5%       53.3%  
 Aircraft Lighting              15,076                16,997           (11.3)%            69,597                69,653           (0.1)%      26.2%  
 Airframe Power                 4,601                 5,321            (13.5)%            18,678                20,109           (7.1)%      7.0%   
 Avionics                       5,109                 412              1140.0%            15,261                412              3604.1%     5.6%   
 Airfield Lighting              2,555                 2,308            10.7%              9,961                 9,160            8.7%        3.6%   
 Aerospace Total                64,743                58,224           11.2%              254,955               213,874          19.2%       95.7%  
                                                                                                                                                    
 Test Systems Segment           2,677                 2,932            (8.7)%             11,491                14,289           (19.6)%     4.3%   
                                                                                                                                                    
 Total                     $    67,420           $    61,156           10.2%         $    266,446          $    228,163          16.8%       100%   
                                                                                                                                                    


                                                                                                           
 ASTRONICS CORPORATION                                                                                     
 
ORDER AND BACKLOG TREND                                                                                  
 
(Unaudited, $ in thousands)                                                                              
                                                                                                           
                         Q1               Q2               Q3               Q4                Twelve       
                         2012             2012             2012             2012              Months       
                         3/31/2012        6/30/2012        9/29/2012        12/31/2012        12/31/2012   
 Sales                                                                                                     
 Aerospace            $  62,001        $  62,423        $  65,788        $  64,743         $  254,955      
 Test Systems            3,137            2,566            3,111            2,677             11,491       
 Total Sales          $  65,138        $  64,989        $  68,899        $  67,420         $  266,446      
                                                                                                           
 Bookings                                                                                                  
 Aerospace            $  58,567        $  75,654        $  64,674        $  65,611         $  264,506      
 Test Systems            2,272            1,526            2,144            705               6,647        
 Total Bookings       $  60,839        $  77,180        $  66,818        $  66,316         $  271,153      
                                                                                                           
 Backlog*                                                                                                  
 Aerospace            $  94,468        $  107,699       $  110,045       $  110,915           N/A          
 Test Systems            7,544            6,504            5,537            3,565             N/A          
 Total Backlog        $  102,012       $  114,203       $  115,582       $  114,480           N/A          
                                                                                                           
 Book:Bill Ratio                                                                                           
 Aerospace               0.94             1.21             0.98             1.01              1.04         
 Test Systems            0.72             0.59             0.69             0.26              0.58         
 Total Book:Bill         0.93             1.19             0.97             0.98              1.02         
                                                                                                           


*On July 30, 2012, Astronics Corporation acquired Max-Viz, Inc. which included a
backlog of approximately $3.5 million for the Aerospace segment. Max-Viz sales
for 2012 were $2.7 million.

Company:
Astronics Corporation
David C. Burney, 716-805-1599, ext. 159
Chief Financial Officer
david.burney@astronics.com
or
Investor Relations:
Kei Advisors LLC
Deborah K. Pawlowski, 716-843-3908
dpawlowski@keiadvisors.com



Copyright Business Wire 2013

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.