Astronics (ATRO) 16th Annual Midwest Ideas Conference summary

Business Overview and Market Position

• Market capitalization exceeds $1 billion, with strong institutional and insider ownership, and two classes of stock outstanding; member of the Russell 3000 and 2000 indices.

• Operations are divided into Aerospace (90–91% of sales) and Test segments, with commercial aerospace as the largest market.

• Holds leading market positions in commercial aerospace, general aviation, and defense, serving over 280 airlines and major OEMs like Airbus, Boeing, Lockheed Martin, and the U.S. military.

• Focused on innovation and collaboration, targeting aerospace, defense, and mission-critical industries with advanced technology solutions.

• Growth strategy includes organic development and acquisitions, with recent portfolio expansion in connectivity, power, and test systems.

Strategic Business Verticals and Product Innovation

• Four main verticals: Inflight Entertainment & Connectivity, Aircraft Lighting, Flight-Critical Electrical Power, and Test Systems.

• Inflight Entertainment & Connectivity represents about half of business, with dominant 90%+ market share in in-seat passenger power, powering over 1 million seats on 280+ airlines.

• Aircraft Lighting covers cockpit, cabin, and exterior lighting for military, commercial, and private aircraft, with key programs on Boeing and Airbus platforms.

• First-mover in solid-state power distribution for small aircraft, selected for the U.S. Army FLRAA program, with a $90 million development effort through 2026.

• Test Systems segment includes major military radio test programs and transit system contracts, with a $200 million Army program expected to start in early 2026 and diversification into metro rail test systems.

Financial Performance and Outlook

• Q2 2025 sales reached $204.7 million, with aerospace segment at a record $193.6 million; backlog remains elevated at $645–$645.4 million, supporting future revenue visibility.

• 2025E sales guidance is $840–$860 million, with a 17% CAGR since 2021.

• Adjusted EBITDA margin improved to 12.4% in Q2 2025, and adjusted diluted EPS rose to $0.38; adjusted net income was $13.7 million and adjusted EBITDA $25.4 million.

• Operating leverage in aerospace segment reached 48% in Q2, with double-digit growth in commercial and military markets.

• Operating cash flow was $13 million in H1 2025, despite $22 million in legal settlement payments and $13 million in tax payments.