Astronics (ATRO) Q4 2002 earnings summary

Executive summary

• 2002 sales fell 18.4% to $42.9 million, mainly from the F-16 retrofit program wind-down and weak commercial aviation; gross margin edged up to 28.5%.

• The Joint Strike Fighter (F-35) award for the full external lighting suite expands product scope and could generate over $100 million in sales, with production planned from 2008.

Financial highlights

• Net sales were $42.940 million vs. $52.591 million in 2001; income from continuing operations was $4.047 million vs. $5.821 million, and net income was $4.553 million vs. $6.498 million.

• EBIT was $6.638 million vs. $9.261 million in 2001; basic EPS was $0.57, including $0.06 from discontinued operations, vs. $0.81.

• Gross margin was 28.5% vs. 28.3% in 2001; cost of products sold was 71.5% of sales vs. 71.7%.

• Operating cash flow was $5.6 million; reported free cash flow was $5.4 million, defined as net income plus depreciation and amortization less capital expenditures.

Outlook and guidance

• 2003 revenue guidance was $34–$36 million, assuming no further deterioration or improvement in aerospace markets; less than approximately $2 million was expected from the original F-16 program.

• Cockpit lighting sales excluding the F-16 program were expected to grow 15% in 2003; U.S. F-16 kits and spares were expected to contribute about $6.0 million.

• Year-end backlog was $17.2 million, including $2.9 million of F-16 kits and spares; approximately $13 million was scheduled to ship in 2003.

• JSF production was planned to begin in 2008; the program could result in over $100 million in sales.