Astronics (ATRO) Q4 2014 earnings summary

Executive summary

• FY14 sales rose 94.5% to $661.0M; net income more than doubled to $56.2M and diluted EPS reached $2.48, the 11th consecutive year of growth.

• Organic sales grew 14.9%; acquisitions contributed $270.4M of sales growth. Engineering and development spending was $76.7M, nearly 12% of revenue.

• Bookings reached a record $674.7M and year-end backlog a record $370.7M, positioning the business for 2015 growth.

Financial highlights

• Sales were $661.0M vs. $339.9M; gross profit was $167.0M vs. $87.9M; operating profit was $87.4M vs. $42.3M.

• Gross margin was 25.3% vs. 25.8%; operating margin improved to 13.2% from 12.4%; net margin increased to 8.5% from 8.0%.

• Net income was $56.2M vs. $27.3M; diluted EPS was $2.48 vs. $1.24. Results include $19.4M of acquired-inventory fair-value step-up expense.

• Cash provided by operating activities was $99.9M, compared with $49.5M in 2013.

Outlook and guidance

• FY15 consolidated sales expected at $680M–$740M, including Armstrong; year-end backlog of $370.7M, with $321.8M expected to ship in 2015.

• FY15 Aerospace sales expected at $550M–$580M; $205.5M of year-end Aerospace backlog expected to ship over the next 12 months.

• FY15 Test Systems sales expected at $130M–$160M; $116.3M of year-end segment backlog scheduled for shipment over the next 12 months.

• FY15 capital equipment spending forecast at $20M–$25M and E&D at $75M–$80M, both excluding Armstrong.