Astronics Corporation Reports Third Quarter 2004 Results.EAST AURORA Aurora, cities, United States Aurora (ərôr`ə, ô–). 1 City (1990 pop. 222,103), Adams and Arapahoe counties, N central Colo., a growing suburb on the east side of Denver; inc. 1903. , N.Y. -- --Net sales increase 11% driven by business jet market --Net loss a result of increasing engineering and development expense for new programs --Backlog at highest level in two years Astronics Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : ATRO ATRO Actual Time of Return to Operation ),a leader in advanced, high performance lighting and electronics systems for the global aerospace and defense industry, today reported a net loss for the 2004 third quarter of $0.4 million, or $.05 per share, compared with last year's third quarter loss of $0.3 million, or $.04 per share. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight increased $0.8 million, or 11%, to $8.4 million for the third quarter of 2004, which ended October October: see month. 2, 2004. Net sales for the third quarter of 2003 were $7.6 million. The increase in sales for the third quarter was the result of increases in sales to the three aircraft markets that Astronics serves: business jet, military and commercial transport. Sales to the business jet market for the reported period increased 21.6%, up $0.4 million to $2.4 million from sales of $2.0 million in the third quarter last year. Military sales in the third quarter of this year were $4.3 million, up 10.3%, or $.4 million, from the same period last year. Sales to the commercial transport market in the 2004 third quarter were $1.5 million compared with $1.3 million in the same period last year. Gross profit as a percent of sales declined to 11.6% in this year's third quarter from 14.5% in the same period last year as engineering and development costs net of nonrecurring Non`re`cur´ring a. 1. Nonrecurrent; as, the costs of a layoff are considered as a nonrecurring expense s>. engineering revenue increased $0.4 million to $1.2 million. The increase of engineering and development costs is being driven by the high number of developmental projects awarded to Astronics during the past two years. Selling, general and administrative and interest costs declined to $1.4 million this quarter compared with $1.5 million last year. During the quarter, Astronics recorded a charge of $150 thousand to its bad debt expense relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the write down of a note receivable note receivable A debt due from borrowers and evidenced by a written promise of payment. Note receivable, an entry on the asset side of many corporate balance sheets, indicates the dollar amount of loans due to be repaid by borrowers. held by the Company. The note relates to the sale in 2001 of a former production facility that was sold when the Company built its current operation in East Aurora, NY. At October 2, 2004 the note was valued at $300 thousand, or approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 50 percent of the face value of the note. Offsetting the write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. was the reversal reversal n. the decision of a court of appeal ruling that the judgment of a lower court was incorrect and is reversed. The result is that the lower court which tried the case is instructed to dismiss the original action, retry the case, or is ordered to change its of approximately $100 thousand of accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. variable compensation. Peter J. Gundermann, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Astronics Corporation, noted, "As we expected, the third quarter proved to be a challenging one for our bottom-line bot·tom-line adj. 1. Concerned exclusively with costs and profits: bottom-line issues. 2. Ruthlessly realistic; pragmatic: a bottom-line political strategy. . We continue to have engineering and development expense pressures that we had in the first half of the year. And, we expect this higher level of expense will continue through the fourth quarter. On the positive side, we continue to make very good progress with our new development programs, many of which are transitioning to production programs. We had excellent bookings during the quarter with a book-to-bill ratio Book-to-Bill Ratio The technology industry's demand-to-supply ratio for orders on a "firm's book" to number of orders filled. Notes: This ratio tells whether the company has more orders than it can deliver (if greater than 1), has the same amount of orders that it can of 1.38 and our backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. is in excellent shape as we prepare for 2005." Bookings, or orders received, during the third quarter of 2004 were $11.7 million, up $5.5 million from the 2003 third quarter and up 41% from $8.3 million in the second quarter of this year. Backlog, or firm purchase orders for production, at the end of the third quarter of 2004 was up 51% to $25.6 million from $17.0 million at the end of the third quarter of 2003, and up $3.3 million, or 15% compared with backlog at the end of the second quarter this year. Capital expenditures in the third quarter of 2004 were $279 thousand, while depreciation and amortization for the quarter was $337 thousand. Nine Month Review For the nine-month period ended October 2, 2004, Astronics had net sales of $26.4 million, a 6 % increase over the first nine months of last year. This increase was the result of a $1.5 million increase in business jet market sales and $0.3 million in higher sales to the commercial transport market. These increases more than offset the $0.4 million decline in sales to the military. Excluding $0.7 million in sales for the original U.S. F-16 NVIS NVIS Near Vertical Incidence Skywave NVIS Night Vision Imaging System NVIS Night Vision Imaging Spectrometer NVIS Nuclear Verification Information System program completed in the first half of last year, sales to the military for this year's first nine months were up $0.3 million. For the first nine months of 2004, higher levels of spending on engineering and development were somewhat offset by lower selling, general and administrative expenses. Engineering and development expenses have increased as the Company adds engineers and incurs expenses for the development of lighting products and subsystems for new generation aircraft. Loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the nine-month period of 2004 was $76 thousand compared with income from continuing operations of $240 thousand for the same period in 2003. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. net loss through the first three quarters of 2004 was $76 thousand compared with net income of $552 thousand for the comparable period of 2003. Last year's nine-month period included income from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. of $312 thousand. On a per share basis, loss from continuing operations for the first nine months of this year was $.01 compared with income from continuing operations of $.03 for the same period last year. Net loss per share was $.01 for the 2004 nine-month period. Net income per share from the 2003 nine-month period was $.07. Mr. Gundermann noted, "We knew when the year began that 2004 was going to be challenging. We do not like to have losses, but we are encouraged about our future. We remain largely on track executing the important development programs on which we are working and these programs are transforming our company. We are developing more complex technical capabilities and, as the aircraft enter into production, we will have increased shipset content on these aircraft that is much greater than what we had on aircraft in the past." He went on to say, "The increased sophistication so·phis·ti·cate v. so·phis·ti·cat·ed, so·phis·ti·cat·ing, so·phis·ti·cates v.tr. 1. To cause to become less natural, especially to make less naive and more worldly. 2. of our products is demonstrated in our bookings. For the trailing twelve months In commerce, the trailing twelve months (TTM) is a moving measurement (for example, an average or a sum) over the 12 previous months, using the most recent data available. Also sometimes known as last twelve months (LTM). just ended, we recorded bookings of over $43 million, 25% greater than shipments during that same period. This booking level supports our optimism about our prospects for 2005 and beyond. We are early in our planning for next year, but are anticipating 2005 revenue in the range of $41 to $44 million. This would be an increase of approximately 20% over the expected revenue of $34 to $36 million for this year. As we move beyond this current period of investment in infrastructure, we expect to see improvement to our bottom line." Webcast and Conference Call Astronics will hold a teleconference and webcast to discuss its third quarter 2004 results at 11:00 a.m. ET today. 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 To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. any necessary audio software. --The teleconference can be accessed by calling (303) 262-2130 approximately 5 - 10 minutes prior to the call. An archive of the webcast will be available at http://www.astronics.com within two to three hours after the event. A transcript A generic term for any kind of copy, particularly an official or certified representation of the record of what took place in a court during a trial or other legal proceeding. A transcript of record will also be posted once available. A replay of the webcast can also be heard by calling (303) 590-3000, and entering passcode 11010478#. The telephonic replay will be available through Thursday Thursday: see week. , November November: see month. 4, 2004 at 11:59 p.m. ET. ABOUT ASTRONICS CORPORATION Astronics Corporation is a manufacturer of specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. lighting and electronics for the cockpit This article is about the flight deck of an aircraft. For other uses, see Cockpit (disambiguation). A cockpit is the area usually nearer the front of a piloted aircraft from which a pilot controls the aircraft. , cabin and exteriors of military, commercial transport and business jet aircraft. A major lighting and electronics supplier to the aircraft industry, its strategy is to expand from a components and subsystems supplier to an aircraft lighting systems integrator An individual or organization that builds systems from a variety of diverse components. With increasing complexity of technology, more customers want complete solutions to information problems, requiring hardware, software and networking expertise in a multivendor environment. , increasing the value and content it provides to various aircraft platforms. Luminescent lu·mi·nes·cent adj. Capable of, suitable for, or exhibiting luminescence. [Latin l  men, l Systems Inc. is Astronics' primary
operating subsidiary An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. which produces its aerospace and defense products.For more information on Astronics and its products, visit its website at www.Astronics.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 than those contemplated by the statements. Important factors that could cause actual results to differ materially include the Company's ability to execute its strategy, the impact of the economy, the likelihood activity in the markets served will translate into future sales, the likelihood that product qualifications will result in full production contracts, the expected level of revenue can be achieved, and the state of the aerospace industry, 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 for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. 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.
ASTRONICS CORPORATION
CONSOLIDATED INCOME STATEMENT DATA
----------------------------------
(unaudited)
(in thousands except per share data)
Three months ended Nine months ended
10/2/2004 9/27/2003 10/2/2004 9/27/2003
---------- ----------- ---------- ----------
Net Sales $8,449 $7,607 $26,358 $24,855
Cost of products sold 7,469 6,505 22,241 19,935
Selling general and
administrative and
interest expense 1,424 1,538 4,098 4,524
---------- ----------- ---------- ----------
Income (loss) from
continuing operations
before tax (444) (436) 19 396
Income taxes (85) (156) 95 156
---------- ----------- ---------- ----------
Income (loss) from
continuing operations (359) (280) (76) 240
Income (loss) from
discontinued operations - (17) - 312
---------- ----------- ---------- ----------
Net Income (loss) $(359) $(297) $(76) $552
========== =========== ========== ==========
Basic earnings (loss) per
share:
Continuing operations $(0.05) $(0.04) $(0.01) $0.03
Discontinued operations $- $- $- $0.04
---------- ----------- ---------- ----------
Net Income (loss) $(0.05) $(0.04) $(0.01) $0.07
========== =========== ========== ==========
Diluted earnings (loss)
per share:
Continuing operations $(0.05) $(0.04) $(0.01) $0.03
Discontinued operations $- $- $- $0.04
---------- ----------- ---------- ----------
Net Income (loss) $(0.05) $(0.04) $(0.01) $0.07
========== =========== ========== ==========
Weighted average diluted
shares outstanding 7,762 7,736 7,762 7,824
ASTRONICS CORPORATION
CONSOLIDATED BALANCE SHEET DATA
-------------------------------
(in thousands) (unaudited)
10/2/2004 12/31/2003
---------- -----------
ASSETS:
-------
Cash and cash equivalents $11,383 $11,808
Accounts receivable 5,677 4,383
Inventories 6,607 5,707
Prepaid expenses 1,047 1,378
Property, plan and
equipment, net 15,055 15,119
Other assets 7,045 7,079
---------- -----------
Total Assets $46,814 $45,474
========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY:
-------------------------------------
Current maturities of
long term debt $901 $896
Accounts payable and
accrued expenses 4,781 3,458
Net current liabilities
of discontinued
operations 494 155
Long-term debt 12,027 12,482
Long term liabilities of
discontinued operations - 397
Other liabilities 5,538 5,146
Shareholders' equity 23,073 22,940
---------- -----------
Total liabilities and
shareholders' equity $46,814 $45,474
========== ===========
ASTRONICS CORPORATION
NET SALES BY MARKET
($, in thousands)
Three Months Ended Nine Months Ended
10/2/2004 9/27/2003 % change 10/2/2004 9/27/2003 % change
----------------------------- -----------------------------
Military $4,289 $3,890 10.26% $12,666 $13,048 -2.93%
Commercial
Transport 1,459 1,320 10.53% 4,960 4,657 6.51%
Business
Jet 2,427 1,996 21.59% 7,642 6,178 23.70%
Other 274 401 -31.67% 1,090 972 12.14%
----------------------------- -----------------------------
Total $8,449 $7,607 11.07% $26,358 $24,855 6.05%
----------------------------- -----------------------------
ORDER AND BACKLOG TREND
($, in thousands)
Q303 Q403 FY 2003
9/27/03 12/31/03 12/31/03
----------------------------------------------------------------------
Bookings $6,207 $10,057 $34,765
----------------------------------------------------------------------
Backlog $17,000 $18,730 $18,730
----------------------------------------------------------------------
Book:Bill 0.82 1.21 1.05
ORDER AND BACKLOG TREND
($, in thousands)
Q104 Q204 Q304 TTM
3/29/04 7/3/04 10/2/04 10/2/04
----------------------------------------------------------------------
Bookings $13,270 $8,300 $11,700 $43,327
----------------------------------------------------------------------
Backlog $23,030 $22,300 $25,600 NA
----------------------------------------------------------------------
Book:Bill 1.48 0.93 1.38 1.25
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