<\/p>\n
Astronics Corporation Reports 2020 Fourth Quarter and Full Year Financial Results<\/b><\/p>\n *Adjusted EBITDA is a Non-GAAP Performance Measure. Please see the attached table for a reconciliation of Adjusted EBITDA to GAAP net income\/(loss).<\/i><\/p>\n EAST AURORA, N.Y.–(BUSINESS WIRE<\/a>)– \nPeter J. Gundermann, President and Chief Executive Officer, commented, \u201cEven while the commercial aerospace industry continues to be challenged, there was some good news in the quarter.\n<\/p>\n \nPerhaps the best news from the quarter was the initial approval of multiple effective COVID-19 vaccines, which we expect will result in increased demand for air travel later in 2021. To this end, we are seeing positive signs that demand is picking up in our aerospace business, though conditions currently remain depressed. In the meantime, we are carefully managing our cost structure, pursuing new opportunities and advancing development programs for our customers.\u201d\n<\/p>\n Fourth Quarter and 2020 Summary and Review of Demand by Major Markets<\/span><\/b><\/p>\n \nFourth quarter revenue was $114.8 million, down 42.1% from the comparator period of 2019, but up 7.8% sequentially from the third quarter. The Company incurred a pre-tax loss of $7.5 million. The Company\u2019s net loss of $20.0 million included a $14.1 million non-cash tax expense reflecting a reserve recorded against its deferred tax assets. Adjusted EBITDA was $2.9 million, or 2.5% of sales, up $3.0 million sequentially from the third quarter of 2020.\n<\/p>\n \nRevenue in 2020 was $502.6 million, down 35% compared with 2019 as a direct result of the global pandemic. Net loss for the year was $115.8 million while Adjusted EBITDA was $28.8 million as the Company rapidly adjusted to the new environment by aggressively adjusting its cost structure to changes in demand.\n<\/p>\n \nThe Company evaluates three revenue streams to monitor demand and analyze the impact of the pandemic to its business. These are (1) the commercial aircraft market, which includes OEM line fit and airline aftermarket business, (2) defense and other government markets, and (3) general aviation.\n<\/p>\n \nPeter J. Gundermann stated, \u201cWe are glad to put 2020 behind us. The pandemic hit our core aerospace business hard early in the year, but our team demonstrated resilience and flexibility in the midst of very trying times. We enacted protocols to protect our employees and dramatically reduced our cost structure. Though we continue to be heavily impacted by difficult conditions in the commercial aerospace industry, we are prepared for the recovery and look forward to improved market conditions as the vaccines take hold and demand returns to our industry.\u201d\n<\/p>\n Liquidity and Financing<\/span><\/b><\/p>\n \nOn May 4, 2020, the Company executed an amendment to the credit agreement (the \u201camended facility\u201d) which reduced the revolving credit line from $500 million to $375 million with an option to increase the line by up to $150 million. The amended facility suspends the application of the maximum net leverage ratio covenant up through and including the second quarter of 2021. The maximum net leverage ratio on a trailing twelve-month basis will be 6.00 to 1 for the third quarter of 2021, 5.50 to 1 for the fourth quarter of 2021, 4.50 to 1 for the first quarter of 2022, and return to 3.75 to 1 in the second quarter of 2022 and thereafter. At the end of 2020, the Company had $173.0 million drawn on the facility, with net debt of $132.6 million.\n<\/p>\n \nOther financial covenants include that through the second quarter of 2021, the Company is required to maintain a minimum interest coverage ratio of 1.75x on a quarterly basis, except for the first quarter of 2021, which is set at 1.50x. In addition, through the third quarter of 2021, the Company must maintain minimum liquidity, defined as unrestricted cash plus the unused revolving credit commitments, of $180 million at all times. The amended facility also temporarily restricts certain activities, including acquisitions and share repurchases, and requires mandatory prepayments during the suspension period when the Company\u2019s cash balance exceeds $100 million.\n<\/p>\n \nYear-to-date cash flow from operations totaled $37.3 million. Operating cash flows were used primarily to reduce long-term debt by $15 million during 2020. The Company was compliant with its debt covenants as of the end of the fourth quarter.\n<\/p>\n \nIn February 2021, the Company was notified by the acquirer of its semiconductor business, which was sold in February 2019, that $10.7 million is payable to the Company for earnouts related to 2020. The Company is currently reviewing the calculations and underlying data and expects to record the additional gain on the sale in the first quarter of 2021 when that review is complete.\n<\/p>\n \nDavid C. Burney, Chief Financial Officer, commented, \u201cGiven our forecast expectations, and the structure of our revised lending agreement, combined with earnouts from the sale of the semiconductor business, we expect to have sufficient liquidity to operate through the COVID-19 pandemic and its economic impacts. We expect to remain compliant with our debt covenants through 2021 based on our current outlook.\u201d\n<\/p>\n Consolidated Review<\/b><\/p>\n \n\u00a0\n<\/p>\n<\/td>\n Three Months Ended<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n Year Ended<\/b><\/p>\n<\/td>\n<\/tr>\n ($ in thousands)<\/i><\/b><\/p>\n<\/td>\n December December % Change<\/span><\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n December December % Change<\/span><\/b><\/p>\n<\/td>\n<\/tr>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n Sales<\/b><\/p>\n<\/td>\n \n$\n<\/p>\n<\/td>\n \n114,803\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$\n<\/p>\n<\/td>\n \n198,412\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n(42.1\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n%\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$\n<\/p>\n<\/td>\n \n502,587\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$\n<\/p>\n<\/td>\n \n772,702\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n(35.0\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n%\n<\/p>\n<\/td>\n<\/tr>\n (Loss) Income from Operations<\/b><\/p>\n<\/td>\n \n$\n<\/p>\n<\/td>\n \n(5,469\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$\n<\/p>\n<\/td>\n \n(36,856\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n(85.2\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n%\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$\n<\/p>\n<\/td>\n \n(100,701\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$\n<\/p>\n<\/td>\n \n1,701\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n(6,020.1\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n%\n<\/p>\n<\/td>\n<\/tr>\n Operating Margin %<\/i><\/p>\n<\/td>\n (4.8<\/i><\/p>\n<\/td>\n )<\/i><\/p>\n<\/td>\n %<\/i><\/p>\n<\/td>\n (18.6<\/i><\/p>\n<\/td>\n )<\/i><\/p>\n<\/td>\n %<\/i><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n (20.0<\/i><\/p>\n<\/td>\n )<\/i><\/p>\n<\/td>\n %<\/i><\/p>\n<\/td>\n 0.2 <\/i><\/p>\n<\/td>\n %<\/i><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n Net Gain on Sale of Businesses<\/b><\/p>\n<\/td>\n \n$\n<\/p>\n<\/td>\n \n\u2014\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$\n<\/p>\n<\/td>\n \n\u2014\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$\n<\/p>\n<\/td>\n \n\u2014\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$\n<\/p>\n<\/td>\n \n78,801\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n Net (Loss) Income <\/b><\/p>\n<\/td>\n \n$\n<\/p>\n<\/td>\n \n(19,985\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$\n<\/p>\n<\/td>\n \n(34,065\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n(41.3\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n%\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$\n<\/p>\n<\/td>\n \n(115,781\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$\n<\/p>\n<\/td>\n \n52,017\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n(322.6\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n%\n<\/p>\n<\/td>\n<\/tr>\n Net (Loss) Income %<\/i><\/p>\n<\/td>\n (17.4<\/i><\/p>\n<\/td>\n )<\/i><\/p>\n<\/td>\n %<\/i><\/p>\n<\/td>\n (17.2<\/i><\/p>\n<\/td>\n )<\/i><\/p>\n<\/td>\n %<\/i><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n (23.0<\/i><\/p>\n<\/td>\n )<\/i><\/p>\n<\/td>\n %<\/i><\/p>\n<\/td>\n 6.7 <\/i><\/p>\n<\/td>\n %<\/i><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n *Adjusted EBITDA<\/b><\/p>\n<\/td>\n \n$\n<\/p>\n<\/td>\n \n2,897\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$\n<\/p>\n<\/td>\n \n19,804\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n(85.4\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n%\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$\n<\/p>\n<\/td>\n \n28,762\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$\n<\/p>\n<\/td>\n \n88,315\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n(67.4\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n%\n<\/p>\n<\/td>\n<\/tr>\n *Adjusted EBITDA Margin %<\/i><\/p>\n<\/td>\n 2.5<\/i><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n %<\/i><\/p>\n<\/td>\n 10.0<\/i><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n %<\/i><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n 5.7<\/i><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n %<\/i><\/p>\n<\/td>\n 11.4 <\/i><\/p>\n<\/td>\n %<\/i><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n *Adjusted EBITDA is a Non-GAAP Performance Measure. Please see the attached table for a reconciliation of Adjusted EBITDA to GAAP net income.<\/i><\/p>\n Fourth Quarter 2020 Results (compared with the prior-year period, unless noted otherwise)<\/span><\/i><\/p>\n \nConsolidated sales were down $83.6 million compared with the fourth quarter of 2019. Aerospace sales were down $80.3 million. Test System sales decreased $3.3 million.\n<\/p>\n \nConsolidated operating loss was $5.5 million, compared with operating loss of $36.9 million in the prior-year period. The loss in 2020 was due to low volume related to the continued pause of production of the 737 MAX and the impacts of the COVID-19 pandemic on the global aerospace industry. Operating loss in the prior year\u2019s fourth quarter were impacted by an increase to the legal reserve of $17.9 million for a long-outstanding patent dispute and $28.8 million of impairment and restructuring charges related to the refocusing of our antenna business.\n<\/p>\n \nIncome tax expense in the fourth quarter reflects a $14.1 million non-cash valuation allowance against federal deferred tax assets.\n<\/p>\n \nBookings were $116.0 million, for a book-to-bill ratio of 1.01:1. Backlog at the end of the quarter was $283.4 million. Approximately $216.9 million of backlog is expected to ship in 2021.\n<\/p>\n Full Year 2020 Results (compared with the prior-year period, unless noted otherwise)<\/span><\/i><\/p>\n \nConsolidated sales were down $270.1 million to $502.6 million compared with the prior year. Aerospace sales were down $274.6 million. Test System sales increased $4.5 million.\n<\/p>\n \nConsolidated operating loss was $100.7 million, reflecting non-cash impairment charges of $87.0 million in the Aerospace segment, restructuring-related severance charges of $5.3 million, primarily in the Aerospace segment, and lower sales volumes compared with the prior-year period. Impairment charges were recognized in the current year as a result of reduced expectations of future operating results due to the COVID-19 pandemic, which has significantly impacted the global aerospace industry. During the first quarter, the Company recognized full impairments of the goodwill of Astronics Connectivity Systems and Certification (\u201cCSC\u201d), PGA and Custom Control Concepts (\u201cCCC\u201d) reporting units, and a partial impairment of the goodwill of the PECO reporting unit. During the second quarter of 2020, an additional partial impairment of the PECO reporting unit was recorded. No impairment charges were recorded in the third or fourth quarters of 2020.\n<\/p>\n \nThe effective tax rate for 2020 was (3.0)%, compared with 23.8% in 2019. The effective tax rate in 2020 was impacted by the previously discussed valuation allowance on federal deferred tax assets, which was $21.5 million for the full year, as well as permanently non-deductible goodwill impairments.\n<\/p>\n \nConsolidated net loss was $115.8 million, or $(3.76) per diluted share, compared with net income of $52.0 million, or $1.60 per diluted share in the prior year. The after-tax impact of the impairment loss in 2020 was $81.4 million, or $(2.64) per diluted share. The $80.1 million pre-tax gain on the sale of the semiconductor test business in contributed $60.4 million to net income after taxes in 2019.\n<\/p>\n \nConsolidated Adjusted EBITDA was $28.8 million, or 5.7% of consolidated sales, compared with $88.3 million, or 11.4% of consolidated sales, in the prior year.\n<\/p>\n \nPrior year consolidated Adjusted EBITDA was negatively impacted by $20.1 million of charges associated with the restructuring activities, including severance; goodwill and asset impairment charges of $11.1 million; increased legal reserves for the long-term patent dispute of $19.6 million; and an equity investment impairment of $5.0 million.\n<\/p>\n Aerospace Segment Review <\/b>(refer to sales by market and segment data in accompanying tables)<\/i><\/p>\n Aerospace Fourth Quarter 2020 Results (compared with the prior-year period, unless noted otherwise)<\/span><\/i><\/p>\n \nAerospace segment sales decreased $80.3 million, or 46.7%, to $91.8 million. Sales were negatively affected by the continued grounding of the 737 MAX, overall lower build rates for commercial transport and general aviation aircraft and a weak commercial aircraft aftermarket as the airlines reduced spending due to the global COVID-19 pandemic.\n<\/p>\n \nAerospace segment operating loss for the fourth quarter of 2020 was $3.3 million compared with operating loss of $32.3 million in the same period of 2019. Under-absorption of fixed costs due to lower sales drove the operating loss in 2020. In 2019, Aerospace operating profit was impacted by increased legal reserves for a long-term patent dispute of $17.9 million and $28.8 million of impairment and restructuring charges related to the refocusing of our antenna business.\n<\/p>\n \nAerospace bookings in the fourth quarter of 2020 improved sequentially to $74.1 million, for a book-to-bill ratio of 0.81. Backlog was $191.1 million at the end of the fourth quarter of 2020 compared with backlog of $275.8 million at the end of the fourth quarter of 2019.\n<\/p>\n Aerospace Full Year Results<\/span><\/i><\/p>\n \nAerospace segment sales decreased by $274.6 million, or 39.7%, to $418.0 million, when compared with 2019. Sales were negatively affected for the same reasons noted for the quarter.\n<\/p>\n \nAerospace operating loss for 2020 was $89.8 million compared with operating income of $16.7 million, or 2.4% of sales, in the same period of 2019. Aerospace 2020 operating profit was impacted by impairment charges of $87.0 million, of which $86.3 million was related to goodwill, as previously discussed. Restructuring-related severance charges of $5.3 million and leverage lost on reduced sales also significantly impacted operating results.\n<\/p>\n Test Systems Segment Review <\/b>(refer to sales by market and segment data in accompanying tables)<\/i><\/p>\n Test Systems Fourth Quarter Results<\/span><\/i><\/p>\n \nTest Systems segment sales in the fourth quarter were $23.0 million, down $3.3 million compared with the prior-year period.\n<\/p>\n \nTest Systems operating profit was $1.3 million, or 5.6% of sales, up from $0.3 million, or 1.2% of sales, in last year’s fourth quarter.\n<\/p>\n \nBookings for the Test Systems segment in the quarter were $41.9 million, for a book-to-bill ratio, excluding semiconductor activity, of 1.83:1 for the quarter. Backlog was $92.3 million at the end of 2020 compared with backlog of $83.8 million at the end of 2019.\n<\/p>\n Test Systems Full Year Results<\/span><\/i><\/p>\n \nTest Systems Segment sales were $84.6 million, up $4.5 million compared with the prior year. Acquisitions completed in July 2019 and October 2019 contributed an incremental $6.2 million in sales. Sales related to the Semiconductor business, which was sold in early 2019, decreased $6.2 million.\n<\/p>\n \nTest Systems operating profit was $5.5 million, or 6.6% of sales, compared with operating profit of $4.5 million, or 5.6% of sales, in 2019. Operating profit in the prior-year period was impacted by restructuring-related severance charges of $2.0 million.\n<\/p>\n \nMr. Gundermann commented, \u201cOur Test business had a good year in 2020, benefiting from strong government and defense spending. The business made strides integrating two 2019 acquisitions and won a couple of significant awards in the emerging transit test market, which we believe promises to be important for our future. The table is set for these trends to continue in 2021 and for Test to have another solid year.\u201d\n<\/p>\n Outlook<\/b><\/p>\n \nMr. Gundermann commented, \u201cWhile it is difficult to provide guidance for all of 2021 given the ongoing pandemic, we do expect that customer demand in the first half of 2021 will be similar to that of the second half of 2020. The year will start slowly, however, with first quarter sales of about $100 million. We expect conditions to strengthen through the year. We expect we will manage the business to generate cash that we will use to reduce debt. We believe we are well-positioned for the future, and we expect to do well when market conditions rebound.\u201d\n<\/p>\n \nCapital expenditures for 2021 are expected to be approximately $10 million to $11 million up from $7.5 million in 2020 due to investments in customer programs.\n<\/p>\n Fourth Quarter 2020 Webcast and Conference Call<\/b><\/p>\n \nThe Company will host a teleconference today at 11:00 a.m. ET. During the teleconference, management will review the financial and operating results for the period and discuss Astronics\u2019 corporate strategy and outlook. A question-and-answer session will follow.\n<\/p>\n \nThe Astronics conference call can be accessed by calling 201.493.6784. The listen-only audio webcast can be monitored at www.astronics.com<\/a>. To listen to the archived call, dial 412.317.6671 and enter replay pin number 13715117. The telephonic replay will be available from 2:00 p.m. on the day of the call through Tuesday, March 2, 2021. A transcript of the call will also be posted to the Company\u2019s Web site once available.\n<\/p>\n\n
\nAstronics Corporation (Nasdaq: ATRO) (\u201cAstronics\u201d or the \u201cCompany\u201d), 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 twelve months ended December 31, 2020.\n<\/p>\n\n
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31, 2019<\/span><\/b><\/p>\n<\/td>\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n