Astronics (ATRO) Q4 2008 earnings summary

Executive summary

• FY08 sales increased 9.8% YoY to $173.7M, while net income declined to $8.4M from $15.4M, reflecting higher engineering costs and $10.0M of pre-tax Eclipse-related charges.

• Growth across military, commercial transport and business jet markets was offset by lower profitability; FY09 revenue guidance includes DME, acquired on Jan. 30, 2009.

Financial highlights

• Sales were $173.7M in 2008 versus $158.2M in 2007; operating income was $13.1M versus $24.5M, and net income was $8.4M versus $15.4M.

• Diluted EPS was $0.79 versus $1.44; gross profit was $30.5M versus $40.9M.

• Operating cash flow was $11.5M, up from $8.6M; cash used in investing was $4.6M, including $4.3M in capital expenditures.

• Year-end total assets were $104.7M, shareholders’ equity $58.3M and indebtedness $14.4M.

Outlook and guidance

• FY09 revenue guidance is $230M–$245M; excluding DME, organic revenue is projected at $155M–$165M.

• DME is expected to contribute $75M–$80M for the 11 months after closing; awards and delivery timing could materially affect its revenue.

• Organic commercial transport and military sales are expected to be fairly flat, with business jet sales decreasing; FY09 capital expenditures are projected at $6M–$9M.

• Boeing 787 and Airbus A380 production could support longer-term growth as these aircraft are expected to carry more in-seat power and in-flight entertainment equipment.