Astronics (ATRO) Q4 2016 earnings summary

Executive summary

• 2016 revenue fell 8.5% to $633.1M and net income declined 28% to $48.4M, reflecting transitions in avionics and semiconductor test products.

• Aerospace sales declined 2.9%; Test Systems sales fell 30.5%, yet the segment remained profitable at an 8.6% operating margin.

Financial highlights

• Gross profit was $159.5M and gross margin 25.2%, versus $187.9M and 27.1% in 2015.

• Operating income was $73.1M, down from $98.8M; operating margin was 11.6%, versus 14.3%.

• Diluted EPS was $1.61 versus $2.22; reported net income was $48.4M versus $67.0M.

• Operating cash flow was $48.9M, compared with $78.5M in 2015; year-end cash was $17.9M.

Outlook and guidance

• 2017 consolidated sales guidance was $640M–$720M; year-end backlog was $258.0M, with $230.4M expected to ship during 2017.

• 2017 Aerospace sales guidance was $560M–$600M; Test Systems guidance was $80M–$120M.

• 2017 capital equipment spending was expected at $17M–$22M; engineering and development costs were expected to remain near the 2016 level.

• Business jet production rates were not expected to increase significantly in 2017; semiconductor test recovery plans were expected to begin contributing as 2017 progressed.