ATRO - Astronics Corporation Reports 2023 Third Quarter Financial Results

November, 08 2023 04:22 PM Astronics Corporation

Sales grew 24% to $162.9 million in the quarter and were up 31% year-to-date to $493.9 million
Bookings totaled $176.0 million in the quarter and $540.9 million for the nine month period
Record backlog of $604.3 million ¹ , the seventh consecutive quarterly record reflecting continued strong demand
Net loss was $17.0 million after $3.8 million tax benefit and $11.1 million non-cash reserves related to a customer bankruptcy
Adjusted EBITDA ² was $8.8 million, or 5.4% of sales, a 500 basis point improvement over prior-year period
Revenue guidance for 2023 raised to $680 million to $690 million from previous range of $640 million to $680 million; Fourth quarter revenue expected to be $185 million to $195 million, the mid-point returns to pre-pandemic average quarterly sales levels of 2019

Astronics Corporation (Nasdaq: ATRO) (“Astronics” or the “Company”), a leading supplier of advanced technologies and products to the global aerospace, defense, and other mission-critical industries, today reported financial results for the three and nine months ended September 30, 2023.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20231108843331/en/

Astronics Segment Sales and Bookings (Graphic: Business Wire)

_______________________________

¹ Backlog in all periods presented excludes backlog associated with a non-Aerospace contract manufacturing customer who recently filed bankruptcy. Please see the attached table of Order and Backlog Trend.

² Adjusted EBITDA is a Non-GAAP Performance Measure. Please see the attached table for a reconciliation of adjusted EBITDA to GAAP net loss.

Peter J. Gundermann, Chairman, President and Chief Executive Officer, commented, “Our business continues to strengthen, driven by consistent demand and an improving supply chain. Our manufacturing processes are building momentum but progress is somewhat lumpy, with light third quarter results followed by a significant step up expected in the fourth quarter. We are increasing our 2023 revenue guidance range to $680 million to $690 million from our previous range of $640 million to $680 million. At the midpoint of our updated guidance, we would record 28% growth for the year. Our expectations for a very strong fourth quarter promise an exciting end to the year, and a return in average quarterly sales volume to pre-pandemic levels.”

Third Quarter Results


Three Months Ended

Nine Months Ended
*($ in thousands)*
September 30, 2023

October 1, 2022
% Change

September 30, 2023

October 1, 2022
% Change










Sales
$
162,922


$
131,438

24.0
%

$
493,914


$
376,741

31.1
%
Loss from Operations
$
(14,479
)

$
(14,314
)
(1.2
)%

$
(14,453
)

$
(26,877
)
46.2
%
Operating Margin %

(8.9
)%


(10.9
)%



(2.9
)%


(7.1
)%

Net Gain on Sale of Business
$
—


$
—



$
(3,427
)

$
(11,284
)

Net Loss
$
(16,983
)

$
(14,857
)
(14.3
)%

$
(33,397
)

$
(28,968
)
(15.3
)%
Net Loss %

(10.4
)%


(11.3
)%



(6.8
)%


(7.7
)%











*Adjusted EBITDA
$
8,827


$
477

1,750.5
%

$
30,749


$
3,507

776.8
%
*Adjusted EBITDA Margin %

5.4
%


0.4
%



6.2
%


0.9
%

*Adjusted EBITDA is a Non-GAAP Performance Measure. Please see the attached table for a reconciliation of adjusted EBITDA to GAAP net loss.

Third Quarter 2023 Results (compared with the prior-year period, unless noted otherwise)

Consolidated sales were up $31.5 million, or 24.0%. Aerospace sales increased $29.9 million, or 26.7%, driven primarily by higher sales to the commercial transport market. Test Systems sales increased $1.6 million on higher defense revenue.

Consolidated operating loss was $14.5 million, which includes the impact of an $11.1 million non-cash reserve. In November 2023, a non-core contract manufacturing customer declared bankruptcy, and as a result, a reserve of $7.5 million was recorded for outstanding receivables, which impacted selling, general and administrative expenses, and a reserve of $3.6 million was recorded for inventory, which impacted cost of goods sold. The customer was classified within the “Other” product category of the Aerospace segment. Excluding the non-cash reserve, operating income was positively impacted by higher volume.

Interest expense was $6.0 million in the current period, compared with $2.5 million in the prior-year period, primarily driven by higher interest rates on the Company’s credit facilities which were refinanced in January of this year. Interest expense included approximately $0.8 million of non-cash amortization of capitalized financing-related fees.

Tax benefit in the quarter was $3.8 million. Tax expense for the year is expected to be $1 million to $2 million, down from $5.6 million year-to-date.

Consolidated net loss was $17.0 million, or $0.51 per diluted share, compared with net loss of $14.9 million, or $0.46 per diluted share, in the prior year. The reserve for the customer bankruptcy on a per share basis was $0.33.

Consolidated adjusted EBITDA increased to $8.8 million, or 5.4% of consolidated sales, compared with adjusted EBITDA of $0.5 million, or 0.4% of consolidated sales, in the prior year period primarily as a result of higher sales.

Bookings were $176.0 million in the quarter resulting in a book-to-bill ratio of 1.08:1. For the trailing twelve months, bookings totaled $723.3 million. Backlog at the end of the third quarter was a record $604.3 million and excludes $19.9 million of backlog that was associated with the customer bankruptcy referred to previously. Approximately $505.3 million of backlog is expected to ship over the next twelve months.

Aerospace Segment Review (refer to sales by market and segment data in accompanying tables)

Aerospace Third Quarter 2023 Results (compared with the prior-year period, unless noted otherwise)

Aerospace segment sales increased $29.9 million, or 26.7%, to $142.1 million. The increase was driven by a 29.8% increase, or $23.3 million, in commercial transport sales. Sales to this market were $101.7 million, or 62.5% of consolidated sales in the quarter, compared with $78.4 million, or 59.6% of consolidated sales in the third quarter of 2022. Higher airline spending and increasing OEM build rates drove the increased demand.

Military aircraft sales increased $4.2 million, or 33.9%, to $16.7 million. General Aviation sales increased $1.4 million, or 9.8%, to $16.2 million.

Aerospace segment operating loss of $7.5 million, which includes the impact of $11.1 million in reserves related to accounts receivable and inventory, compares with operating loss of $6.9 million in the same period last year.

Aerospace bookings were $153.3 million for a book-to-bill ratio of 1.08:1. Backlog for the Aerospace segment was a record $513.9 million at quarter end.

Mr. Gundermann commented, “Our Aerospace business continues to accelerate. Demand for air travel is driving the recovery, both in terms of OEM production rates and retrofit activity. All of our major strategic Aerospace thrusts, including passenger entertainment, flight critical power and aircraft lighting are benefiting from these tailwinds. Our Aerospace bookings during the last four quarters were $644 million against sales of $574 million, for a book-to-bill of 1.12:1, confirming strong demand for our products and the opportunity for continued growth.”

Test Systems Segment Review (refer to sales by market and segment data in accompanying tables)

Test Systems Third Quarter 2023 Results (compared with the prior-year period, unless noted otherwise)

Test Systems segment sales were $20.8 million, up $1.6 million primarily as a result of higher defense revenue.

Test Systems segment operating loss was $1.8 million, an improvement over operating loss of $2.3 million in the third quarter of 2022, despite a $1.5 million increase in litigation-related legal expenses. The improvement reflects cost savings resulting from the second quarter 2023 realignment of staffing. Test Systems’ operating loss for both periods was negatively affected by mix, and under absorption of fixed costs due to volume.

Bookings for the Test Systems segment were $22.7 million for a book-to-bill ratio of 1.09:1 for the quarter. Backlog was $90.4 million at the end of the third quarter of 2023 compared with a backlog of $82.8 million at the end of the third quarter of 2022.

Mr. Gundermann commented, “Our Test business continues to tread water, awaiting significant new orders that have been in the pipeline for some time. Until those orders are booked, the Company will continue to contend with lower-than-expected revenue. We expect 2024 to be a much better year, but we need to receive the orders first.”

Liquidity and Financing

Cash on hand at the end of the quarter was $7.7 million. Capital expenditures in the quarter were $2.2 million. Net debt was $166.1 million.

Cash used for operations was $1.1 million in the third quarter of 2023, improving from cash used of $2.0 million in the second quarter. During the quarter, higher inventory and accounts receivable were partially offset by increased accounts payable and accrued expenses.

During the quarter, under its at-the-market offering, the Company sold 834,000 shares at an average price of $16.70 per share for net proceeds after offering expenses of $13.6 million.

David Burney, the Company’s CFO, said, “Liquidity was tight during the quarter as investment in net working capital remained at elevated levels in advance of what we expect will be a very strong fourth quarter and entry into 2024. We leveraged our at-the-market offering, which we initiated for just these purposes, to close liquidity requirements until we realize the cash generated from growing sales.”

He continued, “The customer bankruptcy reserves relate to some contract design and manufacturing work we did for a non-aerospace customer that started in 2021. The customer filed Chapter 11 just days ago so it is too early to predict a path to resolution, but we will be working to maximize our recovery through their reorganization process. The non-cash adjustment results in a very minor impact on our banking covenants and there are no other balances associated with this account on our balance sheet. We do not expect any further impacts to our balance sheet, nor any impact on our forecasted results for the fourth quarter or beyond.”

2023 and 2024 Outlook

The Company expects fourth quarter revenue to be in the range of $185 million to $195 million, and 2023 revenue to be approximately $680 million to $690 million. The midpoint of this range would be a 28% increase over 2022 sales.

The range for planned capital expenditures in 2023 has been reduced to $7 million to $9 million from previous expectations of $7 million to $12 million.

Peter Gundermann commented, “We expect our fourth quarter to be a very strong close to 2023, with revenue at pre-pandemic levels. This will be a big improvement over any other quarter we have seen since 2019, both for top and bottom line results.”

He concluded, “While we are not yet ready to issue revenue guidance for 2024, we expect the fourth quarter to be indicative of our activity level throughout the year. We will enter the year with significant tailwinds, including a record backlog, a stabilized labor force, moderating inflation, substantial new program awards, increasing OEM production rates and higher retrofit demand. Our sales increased 20% in 2022 and are projected to increase 28% in 2023. We anticipate yet another year of strong growth in 2024.”

Third Quarter 2023 Webcast and Conference Call

The Company will host a teleconference today at 4:45 p.m. ET. During the teleconference, management will review the financial and operating results for the period and discuss Astronics’ corporate strategy and outlook. A question-and-answer session will follow.

The Astronics conference call can be accessed by calling (412) 317-0518. The listen-only audio webcast can be monitored at investors.astronics.com. To listen to the archived call, dial (412) 317-6671 and enter replay pin number 10182544. The telephonic replay will be available from 8:00 p.m. on the day of the call through Wednesday, November 22, 2023. The webcast replay can be accessed via the investor relations section of the Company’s website where a transcript will also be posted once available.

About Astronics Corporation

Astronics Corporation (Nasdaq: ATRO) serves the world’s aerospace, defense, and other mission-critical industries with proven innovative technology solutions. Astronics works side-by-side with customers, integrating its array of power, connectivity, lighting, structures, interiors, and test technologies to solve complex challenges. For over 50 years, Astronics has delivered creative, customer-focused solutions with exceptional responsiveness. Today, global airframe manufacturers, airlines, military branches, completion centers, and Fortune 500 companies rely on the collaborative spirit and innovation of Astronics. The Company’s strategy is to increase its value by developing technologies and capabilities that provide innovative solutions to its targeted markets.

Safe Harbor Statement

This news release contains forward-looking statements as defined by the Securities Exchange Act of 1934. One can identify these forward-looking statements by the use of the words “expect,” “anticipate,” “plan,” “may,” “will,” “estimate” or other similar expressions and include all statements with regard to achieving any revenue or profitability expectations, the rate of recovery of the commercial aerospace widebody/long haul markets, the improvement in the supply chain and reduction of spot buys, the timing of pricing and impact of inflation on margins, the effectiveness on profitability of cost reduction efforts, the timing of receipt of task orders or future orders, and the expectations of demand by customers and markets. Because such statements apply to future events, they are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated by the statements. Important factors that could cause actual results to differ materially from what may be stated here include the continued global impact of COVID-19 and related governmental and other actions taken in response, the trend in growth with passenger power and connectivity on airplanes, the state of the aerospace and defense industries, the market acceptance of newly developed products, internal production capabilities, the timing of orders received, the status of customer certification processes and delivery schedules, the demand for and market acceptance of new or existing aircraft which contain the Company’s products, the need for new and advanced test and simulation equipment, customer preferences and relationships, the effectiveness of the Company’s supply chain, and other factors which are described in filings by Astronics with the Securities and Exchange Commission. The Company assumes no obligation to update forward-looking information in this news release whether to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results, financial conditions or prospects, or otherwise.

FINANCIAL TABLES FOLLOW

ASTRONICS CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS DATA
(Unaudited, $ in thousands except per share data)





Three Months Ended

Nine Months Ended

9/30/2023

10/1/2022

9/30/2023

10/1/2022
Sales ¹
$
162,922


$
131,438


$
493,914


$
376,741

Cost of products sold ²

142,304



117,050



413,091



326,711

Gross profit

20,618



14,388



80,823



50,030

*Gross margin*

*12.7*
%


*10.9*
%


*16.4*
%


*13.3*
%








Selling, general and administrative ³

35,097



28,702



95,276



76,907

*SG&A % of sales*

*21.5*
%


*21.8*
%


*19.3*
%


*20.4*
%
Loss from operations

(14,479
)


(14,314
)


(14,453
)


(26,877
)
*Operating margin*

*(8.9*
)%


*(10.9*
)%


*(2.9*
)%


*(7.1*
)%








Net gain on sale of business ⁴

—



—



(3,427
)


(11,284
)
Other expense (income) ⁵

348



427



(562
)


1,180

Interest expense, net

5,991



2,519



17,381



5,812

Loss before tax

(20,818
)


(17,260
)


(27,845
)


(22,585
)
Income tax (benefit) expense

(3,835
)


(2,403
)


5,552



6,383

Net loss
$
(16,983
)

$
(14,857
)

$
(33,397
)

$
(28,968
)
*Net loss % of sales*

*(10.4*
)%


*(11.3*
)%


*(6.8*
)%


*(7.7*
)%
















*Basic loss per share:
$
(0.51
)

$
(0.46
)

$
(1.02
)

$
(0.90
)
*Diluted loss per share:
$
(0.51
)

$
(0.46
)

$
(1.02
)

$
(0.90
)








*Weighted average diluted shares outstanding (in thousands)

33,000



32,241



32,707



32,085









Capital expenditures ⁶
$
2,231


$
1,790


$
6,037


$
4,283

Depreciation and amortization
$
6,385


$
6,817


$
19,758


$
20,905

_______________________________

² In the nine months ended October 1, 2022, $6.0 million of the Aviation Manufacturing Jobs Protection Program grant was recognized as an offset to cost of products sold. In the three and nine months ended September 30, 2023, $3.6 million in non-cash inventory reserves were recorded related to the bankruptcy of a non-core contract manufacturing customer included within the Aerospace segment.

³ Selling, general and administrative expense in the three and nine months ended September 30, 2023 includes $7.5 million in non-cash accounts receivable reserves related to the bankruptcy of a non-core contract manufacturing customer included within the Aerospace segment.

⁴ Net gain on sale of business for the nine months ended September 30, 2023 and October 1, 2022 is comprised of the additional gain on the sale of the Company’s former semiconductor test business resulting from the contingent earnout for the 2022 and 2021 calendar year, respectively.

⁵ Other expense (income) for the nine months ended September 30, 2023 includes income of $1.8 million associated with the reversal of a liability related to an equity investment, as we will no longer be required to make the associated payment.

⁶ Excludes $1.4 million of capital expenditures in accounts payable at October 1, 2022.

Reconciliation to Non-GAAP Performance Measures

In addition to reporting net income, a U.S. generally accepted accounting principle (“GAAP”) measure, we present Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization, non-cash equity-based compensation expense, goodwill, intangible and long-lived asset impairment charges, equity investment income or loss, legal reserves, settlements and recoveries, restructuring charges, gains or losses associated with the sale of businesses and grant benefits recorded related to the AMJP program), which is a non-GAAP measure. The Company’s management believes Adjusted EBITDA is an important measure of operating performance because it allows management, investors and others to evaluate and compare the performance of its core operations from period to period by removing the impact of the capital structure (interest), tangible and intangible asset base (depreciation and amortization), taxes, equity-based compensation expense, goodwill, intangible and long-lived asset impairment charges, equity investment income or loss, non-cash reserves related to customer bankruptcy filings, legal reserves, settlements and recoveries, litigation-related expenses, restructuring charges, gains or losses associated with the sale of businesses and grant benefits recorded related to the AMJP program, which is not commensurate with the core activities of the reporting period in which it is included. As such, the Company uses Adjusted EBITDA as a measure of performance when evaluating its business and as a basis for planning and forecasting. Adjusted EBITDA is not a measure of financial performance under GAAP and is not calculated through the application of GAAP. As such, it should not be considered as a substitute for the GAAP measure of net income and, therefore, should not be used in isolation of, but in conjunction with, the GAAP measure. Adjusted EBITDA, as presented, may produce results that vary from the GAAP measure and may not be comparable to a similarly defined non-GAAP measure used by other companies.

ASTRONICS CORPORATION
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
(Unaudited, $ in thousands)









Consolidated

Three Months Ended

Nine Months Ended

9/30/2023

10/1/2022

9/30/2023

10/1/2022
Net loss
$
(16,983
)

$
(14,857
)

$
(33,397
)

$
(28,968
)
Add back (deduct):







Interest expense

5,991



2,519



17,381



5,812

Income tax expense (benefit)

(3,835
)


(2,403
)


5,552



6,383

Depreciation and amortization expense

6,385



6,817



19,758



20,905

Equity-based compensation expense

1,611



1,457



5,603



5,178

Restructuring-related charges including severance

—



25



564



199

Legal reserve, settlements and recoveries

(1,227
)


2,000



(2,532
)


2,000

Customer accommodation settlement

—



2,100



—



2,100

Lease termination settlement

—



450



—



450

Non-cash accrued 401K contribution

1,237



1,103



3,773



3,300

Litigation-related legal expenses

4,574



1,266



14,024



3,440

Equity investment accrued payable write-off

—



—



(1,800
)


—

AMJP grant benefit

—



—



—



(6,008
)
Net gain on sale of business

—



—



(3,427
)


(11,284
)
Non-cash reserves for customer bankruptcy

11,074



—



11,074



—

Deferred liability recovery

—



—



(5,824
)


—

Adjusted EBITDA
$
8,827


$
477


$
30,749


$
3,507









Sales
$
162,922


$
131,438


$
493,914


$
376,741

Adjusted EBITDA margin on sales

5.4
%


0.4
%


6.2
%


0.9
%


ASTRONICS CORPORATION
CONSOLIDATED BALANCE SHEET DATA
($ in thousands)

(unaudited)



9/30/2023

12/31/2022
ASSETS



Cash and cash equivalents
$
3,981

$
13,778
Restricted cash

3,670


—
Accounts receivable and uncompleted contracts

152,961


147,790
Inventories

203,900


187,983
Other current assets

16,714


15,743
Property, plant and equipment, net

86,742


90,658
Other long-term assets

36,052


21,633
Intangible assets, net

68,682


79,277
Goodwill

58,169


58,169
Total assets
$
630,871

$
615,031




LIABILITIES AND SHAREHOLDERS' EQUITY



Current maturities of long-term debt
$
8,996

$
4,500
Accounts payable and accrued expenses

123,100


114,545
Customer advances and deferred revenue

26,127


32,567
Long-term debt

160,000


159,500
Other liabilities

80,241


63,999
Shareholders' equity

232,407


239,920
Total liabilities and shareholders' equity
$
630,871

$
615,031


ASTRONICS CORPORATION
CONSOLIDATED CASH FLOWS DATA

Nine Months Ended
(Unaudited, $ in thousands)
9/30/2023

10/1/2022
Cash flows from operating activities:



Net loss
$
(33,397
)

$
(28,968
)
Adjustments to reconcile net loss to cash from operating activities:



Non-cash items:



Depreciation and amortization

19,758



20,905

Amortization of deferred financing fees

2,148



—

Provisions for non-cash losses on inventory and receivables ¹

13,713



1,033

Equity-based compensation expense

5,603



5,178

Net gain on sale of business

(3,427
)


(11,284
)
Operating lease non-cash expense

3,816



4,568

Non-cash 401K contribution accrual

3,773



3,300

Non-cash litigation provision adjustment

(1,305
)


2,000

Non-cash deferred liability reversal

(5,824
)


—

Other

911



2,997

Cash flows from changes in operating assets and liabilities:



Accounts receivable

(12,980
)


(28,196
)
Inventories

(24,024
)


(35,444
)
Accounts payable

4,033



17,595

Accrued expenses

5,111



935

Income taxes

3,443



14,583

Operating lease liabilities

(3,660
)


(5,715
)
Customer advance payments and deferred revenue

(562
)


1,990

Supplemental retirement plan liabilities

(304
)


(306
)
Other - net

898



(4,312
)
Net cash from operating activities

(22,276
)


(39,141
)
Cash flows from investing activities:



Proceeds on sale of business and assets

3,427



21,981

Capital expenditures

(6,037
)


(4,283
)
Net cash from investing activities

(2,610
)


17,698

Cash flows from financing activities:



Proceeds from long-term debt

135,732



109,625

Principal payments on long-term debt

(125,984
)


(113,625
)
Stock award and employee stock purchase plan activity

2,480



104

Proceeds from at-the-market stock sales

13,045



—

Finance lease principal payments

(47
)


(85
)
Financing-related costs

(6,447
)


(968
)
Net cash from financing activities

18,779



(4,949
)
Effect of exchange rates on cash

(20
)


(797
)
Decrease in cash and cash equivalents and restricted cash

(6,127
)


(27,189
)
Cash and cash equivalents and restricted cash at beginning of period

13,778



29,757

Cash and cash equivalents and restricted cash at end of period
$
7,651


$
2,568

Supplemental Disclosure of Cash Flow Information



Non-Cash Investing Activities:



Capital Expenditures in Accounts Payable
$
—


$
1,392

_______________________________

¹ In the nine months ended September 30, 2023, $11.1 million of non-cash reserves against receivables and inventory was recorded associated with the bankruptcy of a non-core contract manufacturing customer included within the Aerospace segment.

ASTRONICS CORPORATION
SEGMENT DATA
(Unaudited, $ in thousands)




Three Months Ended

Nine Months Ended

9/30/2023
10/1/2022

9/30/2023
10/1/2022
Sales





Aerospace
$
142,116

$
112,177


$
436,217

$
322,871

Less inter-segment

(12
)

—



(134
)

(10
)
Total Aerospace

142,104


112,177



436,083


322,861







Test Systems ¹

20,818


19,261



57,831


53,899

Less inter-segment

—


—



—


(19
)
Total Test Systems

20,818


19,261



57,831


53,880







Total consolidated sales

162,922


131,438



493,914


376,741







Segment operating (loss) profit and margins





Aerospace ²

(7,464
)

(6,859
)


10,342


(7,085
)


(5.3
)%

(6.1
)%


2.4
%

(2.2
)%
Test Systems ¹

(1,781
)

(2,312
)


(8,521
)

(4,125
)


(8.6
)%

(12.0
)%


(14.7
)%

(7.7
)%
Total segment operating (loss) profit

(9,245
)

(9,171
)


1,821


(11,210
)












Net gain on sale of business

—


—



(3,427
)

(11,284
)
Interest expense

5,991


2,519



17,381


5,812

Corporate expenses and other ³

5,582


5,570



15,712


16,847

Loss before taxes
$
(20,818
)
$
(17,260
)

$
(27,845
)
$
(22,585
)

_______________________________

¹ In the nine months ended September 30, 2023, $5.8 million was recognized in sales related to the reversal of a deferred revenue liability recorded with a previous acquisition within our Test Systems Segment, which also benefits operating loss for the period. Absent that benefit, Test Systems operating loss was $14.3 million.

² In the nine months ended October 1, 2022, $6.0 million of the Aviation Manufacturing Jobs Protection Program grant was recognized as an offset to the cost of products sold in the Aerospace segment. Aerospace segment operating loss in the three and nine months ended September 30, 2023 includes reserves for $11.1 million in accounts receivable and inventory related to the bankruptcy filing of a non-core contract manufacturing customer classified within the Aerospace segment.

³ Corporate expenses and other for the nine months ended September 30, 2023 includes income of $1.8 million associated with the reversal of a liability related to an equity investment, as we will no longer be required to make the associated payment.

ASTRONICS CORPORATION
SALES BY MARKET
(Unaudited, $ in thousands)






Three Months Ended

Nine Months Ended
*2023 YTD*

9/30/2023
10/1/2022
% Change

9/30/2023
10/1/2022
% Change
% of Sales
Aerospace Segment








Commercial Transport
$
101,724
$
78,389
29.8
%

$
308,016
$
211,721
45.5
%
62.3
%
Military Aircraft

16,687

12,463
33.9
%


44,335

41,336
7.3
%
9.0
%
General Aviation

16,193

14,751
9.8
%


60,656

48,748
24.4
%
12.3
%
Other

7,500

6,574
14.1
%


23,076

21,056
9.6
%
4.7
%
Aerospace Total

142,104

112,177
26.7
%


436,083

322,861
35.1
%
88.3
%









Test Systems Segment ¹








Government & Defense

20,818

19,261
8.1
%


57,831

53,880
7.3
%
11.7
%









Total Sales
$
162,922
$
131,438
24.0
%

$
493,914
$
376,741
31.1
%


SALES BY PRODUCT LINE
(Unaudited, $ in thousands)






Three Months Ended

Nine Months Ended
*2023 YTD*

9/30/2023
10/1/2022
% Change

9/30/2023
10/1/2022
% Change
% of Sales
Aerospace Segment








Electrical Power & Motion
$
64,312
$
46,155
39.3
%

$
185,712
$
132,757
39.9
%
37.6
%
Lighting & Safety

38,496

29,740
29.4
%


116,967

90,339
29.5
%
23.7
%
Avionics

22,347

24,172
(7.6
)%


83,011

67,453
23.1
%
16.8
%
Systems Certification

6,535

3,985
64.0
%


19,832

6,656
198.0
%
4.0
%
Structures

2,914

1,551
87.9
%


7,485

4,600
62.7
%
1.5
%
Other

7,500

6,574
14.1
%


23,076

21,056
9.6
%
4.7
%
Aerospace Total

142,104

112,177
26.7
%


436,083

322,861
35.1
%
88.3
%









Test Systems Segment ¹

20,818

19,261
8.1
%


57,831

53,880
7.3
%
11.7
%









Total Sales
$
162,922
$
131,438
24.0
%

$
493,914
$
376,741
31.1
%

_______________________________

¹ Test Systems sales in the nine months ended September 30, 2023 included a $5.8 million reversal of a deferred revenue liability recorded with a previous acquisition.

ASTRONICS CORPORATION
ORDER AND BACKLOG TREND
(Unaudited, $ in thousands)

Q4 2022
Q1 2023
Q2 2023
Q3 2023
Trailing Twelve Months

12/31/2022
4/1/2023
7/1/2023
9/30/2023
9/30/2023
Sales





Aerospace
$
138,335
$
135,597
$
158,382
$
142,104
$
574,418
Test Systems ¹

19,818

20,941

16,072

20,818

77,649
Total Sales ¹
$
158,153
$
156,538
$
174,454
$
162,922
$
652,067






Bookings





Aerospace
$
151,688
$
150,096
$
188,800
$
153,272
$
643,856
Test Systems

30,707

7,740

18,252

22,724

79,423
Total Bookings
$
182,395
$
157,836
$
207,052
$
175,996
$
723,279






Backlog





Aerospace ²
$
457,796
$
472,295
$
502,713
$
513,881

Test Systems

93,696

86,319

88,499

90,405

Total Backlog
$
551,492
$
558,614
$
591,212
$
604,286

N/A






Book:Bill Ratio





Aerospace

1.10

1.11

1.19

1.08

1.12
Test Systems ¹

1.55

0.51

1.14

1.09

1.11
Total Book:Bill ¹

1.15

1.05

1.19

1.08

1.12

_______________________________

¹ In the first quarter of 2023, Test Systems and Total sales include the $5.8 million reversal of a deferred revenue liability. The book:bill ratios have been calculated excluding the impact of that transaction.

² In November of 2023, a non-core contract manufacturing customer reported within the Aerospace segment declared bankruptcy, and as a result, Aerospace and Total Backlog was reduced by $19.9 million in all periods affected. In the bar chart presented above, Aerospace and Total Bookings was reduced by $2.6 million and $17.2 million in second and third quarters of 2021, respectively.

View source version on businesswire.com: https://www.businesswire.com/news/home/20231108843331/en/

For more information:
Company:
David C. Burney, Chief Financial Officer
Phone: (716) 805-1599, ext. 159
Email: david.burney@astronics.com

Investor Relations:
Deborah K. Pawlowski, Kei Advisors LLC
Phone: (716) 843-3908
Email: dpawlowski@keiadvisors.com

Company Name:	Astronics Corporation
Stock Symbol:	ATRO
Market:	NASDAQ
Website:	astronics.com

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