Astronics Corporation Reports 2018 Third Quarter Financial Results

Operating profit for the segment was $5.8 million, or 13.5% of sales, compared with $1.1 million, or 5.2% of sales, in last year’s third quarter. Higher margin was driven by the increase in volume. E&D costs were $3.1 million, up from $2.6 million in the third quarter of 2017.

Bookings for the Test Systems segment in the quarter were $37.1 million, for a book-to-bill ratio of 0.86:1 for the quarter. Backlog was $72.3 million at the end of the third quarter of 2018.

Test Systems Year-to-Date 2018 Results

Sales in the first nine months of 2018 increased 72.0% to $100.0 million compared with sales of$58.1 million for the same period in 2017. The growth was driven by a $53.7 million increase in sales to the Semiconductor market. This was somewhat offset by a decrease in Aerospace & Defense sales of $11.9 million.

Operating profit increased $7.3 million to $10.2 million, or 10.2% of sales, as a result of increased volume. E&D costs were $8.7 million in the first nine months of 2018 compared with $7.0 million in the prior year period.

Mr. Gundermann commented, “Our Test segment continues to perform well, with third quarter revenue the strongest of any quarter in three years, combined with solid bookings. Year-to-date, our Test revenue is up 72% over 2017. We continue to make very good progress on new programs also, and continue negotiations on the awarded letter of intent from the transportation project that we announced during the quarter, which was not included in bookings. We believe the segment is very well positioned for 2019.”

2018 Fourth Quarter Outlook

Fourth quarter sales are forecasted to be in the range of $190 million to $200 million, with $170 million to $175 million expected from the Aerospace segment and $20 million to $25 million from the Test segment.

Consolidated annual sales for 2018 are forecasted to be in the range of $790 million to $800 million, with $670 million to $675 million expected from the Aerospace segment and $120 million to $125 million from the Test segment.

Consolidated backlog at September 29, 2018 was $398.1 million. Approximately 47% of backlog is expected to ship in 2018.

We expect the effective tax rate for the fourth quarter to be in the range of 18% to 21%. The effective tax rate for the year, inclusive of the adjustments referred to above, is expected to be in the range of 10% to 13%.

Capital equipment spending in 2018 is expected to be between $18 million to $22 million, lower than the prior forecast of $24 million to $28 million.

E&D costs for 2018 are expected to be in the range of $115 million to $120 million, up slightly from the previous forecast of $110 million to $115 million.

Mr. Gundermann concluded, “We expect to finish 2018 with a solid fourth quarter, though it will be a little lighter than the second and third quarters. Revenue will be weighted more towards Aerospace and Test will be lighter. Also, we believe our record backlog and continued strong demand for our products sets us up well for another year of growth in 2019.”

Third Quarter 2018 Webcast and Conference Call

The Company will host a teleconference today at 5:00 p.m. ET. During the teleconference, management 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) 493-6784. The listen-only audio webcast can be monitored at www.astronics.com. To listen to the archived call, dial (412) 317-6671 and enter replay pin number 13683920. The telephonic replay will be available from 8:00 p.m. on the day of the call through Monday, November 12, 2018. A transcript will also be posted to the Company’s Web site once available.

About Astronics Corporation

Astronics Corporation (Nasdaq: ATRO) is a leading supplier of advanced technologies and products to the global aerospace, defense and semiconductor industries. Astronics’ products and services include advanced, high-performance electrical power generation and distribution systems, seat motion solutions, lighting and safety systems, avionics products, aircraft structures, systems certification and automated test systems. Astronics’ strategy is to increase its value by developing technologies and capabilities, either internally or through acquisition, and using those capabilities to provide innovative solutions to its targeted markets and other markets where its technology can be beneficial. Through its wholly owned subsidiaries, Astronics has 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 website at www.astronics.com.

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

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