Astronics (ATRO) Q4 2015 earnings summary

Executive summary

• 2015 marked a 12th consecutive year of higher revenue: sales rose 4.7% to $692.3M and net income increased 19% to $67.0M.

• Aerospace growth and strong cash generation offset lower Test Systems sales; year-end cash was $18.6M and debt was $169.8M.

Financial highlights

• Revenue was $692.3M versus $661.0M; organic sales increased 0.9%, while Armstrong added $25.5M.

• Gross profit rose to $187.9M from $167.0M; gross margin improved to 27.1% from 25.3%.

• Operating profit was $98.8M, up from $87.4M; operating margin was 14.3% versus 13.2%.

• Net income was $67.0M versus $56.2M; diluted EPS was $2.55 versus $2.16.

• Operating cash flow was $78.5M, compared with $99.9M; the decline primarily reflected higher net operating assets.

Outlook and guidance

• 2016 consolidated sales guidance: $665M–$725M; $236.1M of year-end backlog was expected to ship during 2016.

• Aerospace sales guidance was $572M–$616M; $186.8M of its $212.7M backlog was expected to ship over the next 12 months.

• Test Systems sales guidance was $93M–$109M; $49.3M of its $61.7M backlog was expected to ship over the next 12 months.

• 2016 capital equipment spending was forecast at $25M–$30M; engineering and development costs were expected to remain near the 2015 rate.