atro-20230701

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


☒			Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended July 1, 2023


☐			Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number 0-7087

ASTRONICS CORPORATION

(Exact name of registrant as specified in its charter)


New York (State or other jurisdiction of incorporation or organization)			16-0959303 (IRS Employer Identification Number)

130 Commerce Way, East Aurora, New York (Address of principal executive offices)			14052 (Zip code)

(716) 805-1599

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $.01 par value per share	ATRO	NASDAQ Stock Market

Securities registered pursuant to Section 12(g) of the Act: None

NOT APPLICABLE

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ¨

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definition of “large accelerated filer”, an “accelerated filer”, a “non-accelerated filer”, a “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

☐

Accelerated filer

☒

Emerging growth company

☐

Non-accelerated filer

☐

Smaller Reporting Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)

of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý

As of July 31, 2023, 32,536,299 shares of common stock were outstanding consisting of 26,514,253 shares of common stock ($.01 par value) and 6,022,046 shares of Class B common stock ($.01 par value).

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PAGE

PART I

FINANCIAL INFORMATION

Item 1

Financial Statements:

•

Consolidated Condensed Balance Sheets as of July 1, 2023 and December 31, 2022

•

Consolidated Condensed Statements of Operations for the Three and Six Months Ended July 1, 2023 and July 2, 2022

•

Consolidated Condensed Statements of Comprehensive Loss for the Three and Six Months Ended July 1, 2023 and July 2, 2022

•

Consolidated Condensed Statements of Cash Flows for the Six Months Ended July 1, 2023 and July 2, 2022

•

Consolidated Condensed Statements of Shareholders’ Equity for the Three and Six Months Ended July 1, 2023 and July 2, 2022

•

Notes to Consolidated Condensed Financial Statements

Item 2

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3

Quantitative and Qualitative Disclosures about Market Risk

Item 4

Controls and Procedures

PART II

OTHER INFORMATION

Item 1

Legal Proceedings

Item 1a

Risk Factors

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3

Defaults Upon Senior Securities

Item 4

Mine Safety Disclosures

Item 5

Item 6

Part I – Financial Information

Item 1. Financial Statements

ASTRONICS CORPORATION

Consolidated Condensed Balance Sheets

July 1, 2023 with Comparative Figures for December 31, 2022

(Unaudited)

(In thousands)


	July 1, 2023		December 31, 2022

Current Assets:
Cash and Cash Equivalents	$	3,472	$	13,778
Restricted Cash	822		—
Accounts Receivable, Net of Allowance for Estimated Credit Losses	170,806		147,790
Inventories	207,446		187,983
Prepaid Expenses and Other Current Assets	15,650		15,743

Total Current Assets	398,196		365,294
Property, Plant and Equipment, Net of Accumulated Depreciation	87,800		90,658
Operating Right-of-Use Assets	29,404		13,028
Other Assets	7,870		8,605
Intangible Assets, Net of Accumulated Amortization	72,108		79,277
Goodwill	58,210		58,169
Total Assets	$	653,588	$	615,031
Current Liabilities:
Current Maturities of Long-term Debt	$	8,960	$	4,500
Accounts Payable	79,837		64,193
Current Operating Lease Liabilities	4,606		4,441
Accrued Expenses and Other Current Liabilities	53,477		45,911
Customer Advance Payments and Deferred Revenue	27,288		32,567

Total Current Liabilities	174,168		151,612
Long-term Debt	168,733		159,500
Long-term Operating Lease Liabilities	26,082		9,942
Other Liabilities	54,204		54,057
Total Liabilities	423,187		375,111
Shareholders’ Equity:
Common Stock	355		354
Accumulated Other Comprehensive Loss	(8,443)		(9,526)
Other Shareholders’ Equity	238,489		249,092
Total Shareholders’ Equity	230,401		239,920
Total Liabilities and Shareholders’ Equity	$	653,588	$	615,031

See notes to consolidated condensed financial statements.

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ASTRONICS CORPORATION

Consolidated Condensed Statements of Operations

Three and Six Months Ended July 1, 2023 With Comparative Figures for 2022

(Unaudited)

(In thousands, except per share data)


	Six Months Ended				Three Months Ended
	July 1, 2023		July 2, 2022		July 1, 2023		July 2, 2022
Sales	$	330,992	$	245,303	$	174,454	$	129,127
Cost of Products Sold	270,787		209,661		141,759		113,418
Gross Profit	60,205		35,642		32,695		15,709

Selling, General and Administrative Expenses	60,179		48,205		30,299		24,105

Income (Loss) from Operations	26		(12,563)		2,396		(8,396)
Net Gain on Sale of Business	(3,427)		(11,284)		—		—
Other (Income), Net of Other Expense	(910)		753		378		291
Interest Expense, Net of Interest Income	11,390		3,293		5,920		1,662
Loss Before Income Taxes	(7,027)		(5,325)		(3,902)		(10,349)
Provision for Income Taxes	9,387		8,786		8,097		661
Net Loss	$	(16,414)	$	(14,111)	$	(11,999)	$	(11,010)
Loss Per Share:
Basic	$	(0.50)	$	(0.44)	$	(0.37)	$	(0.34)
Diluted	$	(0.50)	$	(0.44)	$	(0.37)	$	(0.34)

See notes to consolidated condensed financial statements.

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ASTRONICS CORPORATION

Consolidated Condensed Statements of Comprehensive Loss

Three and Six Months Ended July 1, 2023 With Comparative Figures for 2022

(Unaudited)

(In thousands)


	Six Months Ended				Three Months Ended
	July 1, 2023		July 2, 2022		July 1, 2023		July 2, 2022
Net Loss	$	(16,414)	$	(14,111)	$	(11,999)	$	(11,010)
Other Comprehensive Income (Loss):
Foreign Currency Translation Adjustments	711		(1,567)		487		(1,386)
Retirement Liability Adjustment – Net of Tax	372		698		187		347
Total Other Comprehensive Income (Loss)	1,083		(869)		674		(1,039)
Comprehensive Loss	$	(15,331)	$	(14,980)	$	(11,325)	$	(12,049)

See notes to consolidated condensed financial statements.

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ASTRONICS CORPORATION

Consolidated Condensed Statements of Cash Flows

Six Months Ended July 1, 2023 With Comparative Figures for 2022


	Six Months Ended
(Unaudited, In thousands)	July 1, 2023		July 2, 2022
Cash Flows from Operating Activities:
Net Loss	$	(16,414)	$	(14,111)
Adjustments to Reconcile Net Loss to Cash Flows from Operating Activities:
Depreciation and Amortization	13,373		14,088
Amortization of Deferred Financing Fees	1,363		—
Provisions for Non-Cash Losses on Inventory and Receivables	1,705		677
Equity-based Compensation Expense	3,992		3,721

Operating Lease Non-Cash Expense	2,563		2,928
Non-Cash Accrued 401K Contribution	2,536		2,197
Net Gain on Sale of Business, Before Taxes	(3,427)		(11,284)






Non-Cash Deferred Liability Recovery	(5,824)		—

Other	(1,275)		1,320
Changes in Operating Assets and Liabilities Providing (Using) Cash:
Accounts Receivable	(22,619)		(11,449)
Inventories	(22,638)		(19,293)
Accounts Payable	14,081		11,660
Accrued Expenses	5,460		(458)
Other Current Assets and Liabilities	472		(3,030)
Customer Advance Payments and Deferred Revenue	959		(389)
Income Taxes	7,422		16,909
Operating Lease Liabilities	(2,674)		(3,601)
Supplemental Retirement Plan and Other Liabilities	(206)		(215)
Net Cash Used by Operating Activities	(21,151)		(10,330)
Cash Flows from Investing Activities:
Proceeds from Sale of Business and Assets	3,427		21,977
Capital Expenditures	(3,806)		(2,493)


Net Cash (Used) Provided by Investing Activities	(379)		19,484
Cash Flows from Financing Activities:
Proceeds from Long-term Debt	131,732		52,625
Principal Payments on Long-term Debt	(112,774)		(79,625)

Stock Award Activity	(601)		104
Finance Lease Principal Payments	(24)		(55)



Debt Acquisition Costs	(6,388)		(771)
Net Cash Provided (Used) by Financing Activities	11,945		(27,722)
Effect of Exchange Rates on Cash	101		(505)
Decrease in Cash and Cash Equivalents and Restricted Cash	(9,484)		(19,073)
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	$	4,294	$	10,684

See notes to consolidated condensed financial statements.

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ASTRONICS CORPORATION

Consolidated Condensed Statements of Shareholders’ Equity

Three and Six Months Ended July 1, 2023 With Comparative Figures for 2022

(Unaudited)

(In thousands)


	Six Months Ended				Three Months Ended
	July 1, 2023		July 2, 2022		July 1, 2023		July 2, 2022
Common Stock
Beginning of Period	$	291	$	289	$	293	$	290


Net Issuance of Common Stock for Restricted Stock Units (“RSU’s”)	1		1		—		—

Class B Stock Converted to Common Stock	3		—		2		—
End of Period	295		290		295		290
Convertible Class B Stock
Beginning of Period	63		64		62		64


Class B Stock Converted to Common Stock	(3)		—		(2)		—
End of Period	60		64		60		64