Astronics (ATRO) Q4 2020 earnings summary

Executive summary

• 2020 sales fell 35% YoY to $502.6M amid COVID-19 disruption and the 737 MAX production pause; net loss was $115.8M, while adjusted EBITDA was $28.8M, or 5.7% of sales.

• Cost actions reduced annualized operating costs by ~$140M from the original 2020 plan; workforce fell by about 800 employees, and cash remained positive for the year.

Financial highlights

• Sales declined to $502.6M from $772.7M; gross profit was $96.8M versus $156.1M, and operating loss was $100.7M versus operating profit of $1.7M in 2019.

• Net loss was $115.8M, or diluted EPS of $(3.76), versus net income of $52.0M and diluted EPS of $1.60 in 2019.

• Operating cash flow was $37.3M; cash and equivalents ended 2020 at $40.4M, up from $31.9M at year-end 2019.

• R&D, design and related engineering expenses were $86.8M, down from $108.9M in 2019.

Outlook and guidance

• No FY2021 guidance; H1 customer demand was expected to resemble H2 2020, with Q1 sales of ~$100M and strengthening through the year.

• Cash generation and covenant compliance were expected through 2021; cash flow was planned to support debt reduction, with sufficient liquidity expected through the pandemic under the current outlook.

• 2021 capital equipment spending was forecast at $10M–$11M, up from $7.5M in 2020, primarily for customer programs.

• Backlog was $283.4M at year-end 2020; $216.9M was expected to convert to revenue in 2021.