Astronics (ATRO) Q4 2004 earnings summary

Executive summary

• 2004 sales were $34.7 million, up 4.6% YoY; net loss from continuing operations was $734,000, or $0.09 per diluted share, following 2003 net income of $782,000, or $0.10 per share.

• Engineering and development investment increased substantially as new programs and capabilities were pursued; year-end backlog rose 45% to $27.2 million.

• The February 2005 AES acquisition broadened capabilities into aircraft electrical power generation, distribution and control, and added significant backlog ahead of the year.

Financial highlights

• 2004 sales were $34.696 million versus $33.182 million in 2003; net loss from continuing operations was $734,000 versus net income of $782,000.

• Diluted EPS was -$0.09 in 2004 versus $0.10 in 2003; diluted weighted-average shares were 7.766 million versus 7.815 million.

• Engineering and development expense was $5.8 million in 2004, up $2.2 million, or 61%, YoY; the expense was equivalent to $0.46 per share after tax.

Outlook and guidance

• 2005 consolidated revenue was projected at ~$70 million, with ~$30 million in H1 and ~$40 million in H2; profitability was expected to return.

• Backlog entering 2005 was $73.0 million including AES backlog; higher shipping volume was expected to help cover E&D costs, which were expected to stabilize at current levels.

• AES was expected to generate ~$28 million in 2005 revenue and be accretive to earnings; its $46 million acquisition-date backlog supported the growth outlook.