atro-20230401

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 April 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 May 3, 2023, 32,459,574 shares of common stock were outstanding consisting of 26,343,693 shares of common stock ($.01 par value) and 6,115,881 shares of Class B common stock ($.01 par value).

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TABLE OF CONTENTS

PAGE

PART I

FINANCIAL INFORMATION

Item 1

Financial Statements:

•

Consolidated Condensed Balance Sheets as of April 1, 202 3 and December 31, 20 2 2

•

Consolidated Condensed Statements of Operations for the Three Months Ended April 1, 202 3 and April 2, 202 2

•

Consolidated Condensed Statements of Comprehensive Los s for the Three Months Ended April 1, 202 3 and April 2, 202 2

•

Consolidated Condensed Statements of Cash Flows for the Three Months Ended April 1, 202 3 and April 2, 202 2

•

Consolidated Condensed Statements of Shareholders ’ Equity for the Three Months Ended April 1, 202 3 and April 2, 202 2

•

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

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

(Unaudited)

(In thousands)


	April 1, 2023		December 31, 2022

Current Assets:
Cash and Cash Equivalents	$	4,220	$	13,778
Restricted Cash	1,497		—
Accounts Receivable, Net of Allowance for Estimated Credit Losses	152,365		147,790
Inventories	199,944		187,983
Prepaid Expenses and Other Current Assets	16,150		15,743

Total Current Assets	374,176		365,294
Property, Plant and Equipment, Net of Accumulated Depreciation	88,623		90,658
Operating Right-of-Use Assets	12,179		13,028
Other Assets	7,564		8,605
Intangible Assets, Net of Accumulated Amortization	75,697		79,277
Goodwill	58,169		58,169
Total Assets	$	616,408	$	615,031
Current Liabilities:
Current Maturities of Long-term Debt	$	6,750	$	4,500
Accounts Payable	63,266		64,193
Current Operating Lease Liabilities	4,307		4,441
Accrued Expenses and Other Current Liabilities	45,066		45,911
Customer Advance Payments and Deferred Revenue	27,432		32,567

Total Current Liabilities	146,821		151,612
Long-term Debt	165,603		159,500
Long-term Operating Lease Liabilities	8,964		9,942
Other Liabilities	56,096		54,057
Total Liabilities	377,484		375,111
Shareholders’ Equity:
Common Stock	355		354
Accumulated Other Comprehensive Loss	(9,117)		(9,526)
Other Shareholders’ Equity	247,686		249,092
Total Shareholders’ Equity	238,924		239,920
Total Liabilities and Shareholders’ Equity	$	616,408	$	615,031

See notes to consolidated condensed financial statements.

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ASTRONICS CORPORATION

Consolidated Condensed Statements of Operations

Three Months Ended April 1, 2023 With Comparative Figures for 2022

(Unaudited)

(In thousands, except per share data)


	Three Months Ended
		April 1, 2023		April 2, 2022
Sales		$	156,538	$	116,176
Cost of Products Sold		129,028		96,243
Gross Profit		27,510		19,933

Selling, General and Administrative Expenses		29,880		24,100

Loss from Operations		(2,370)		(4,167)
Net Gain on Sale of Business		(3,427)		(11,284)
Other (Income), Net of Other Expense		(1,288)		462
Interest Expense, Net of Interest Income		5,470		1,631
(Loss) Income Before Income Taxes		(3,125)		5,024
Provision for Income Taxes		1,290		8,125
Net Loss		$	(4,415)	$	(3,101)
Loss Per Share:
Basic		$	(0.14)	$	(0.10)
Diluted		$	(0.14)	$	(0.10)

See notes to consolidated condensed financial statements.

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ASTRONICS CORPORATION

Consolidated Condensed Statements of Comprehensive Loss

Three Months Ended April 1, 2023 With Comparative Figures for 2022

(Unaudited)

(In thousands)


	Three Months Ended
		April 1, 2023		April 2, 2022
Net Loss		$	(4,415)	$	(3,101)
Other Comprehensive Income:
Foreign Currency Translation Adjustments		224		(181)
Retirement Liability Adjustment – Net of Tax		185		351
Total Other Comprehensive Income		409		170
Comprehensive Loss		$	(4,006)	$	(2,931)

See notes to consolidated condensed financial statements.

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ASTRONICS CORPORATION

Consolidated Condensed Statements of Cash Flows

Three Months Ended April 1, 2023 With Comparative Figures for 2022


	Three Months Ended
(Unaudited, In thousands)	April 1, 2023		April 2, 2022
Cash Flows from Operating Activities:
Net Loss	$	(4,415)	$	(3,101)
Adjustments to Reconcile Net Loss to Cash Flows from Operating Activities:
Depreciation and Amortization	6,662		7,088
Amortization of Deferred Financing Fees	616		—
Provisions for Non-Cash Losses on Inventory and Receivables	627		175
Equity-based Compensation Expense	2,399		2,101

Operating Lease Non-Cash Expense	1,186		1,424
Non-Cash Accrued 401K Contribution	1,208		1,011
Net Gain on Sale of Business, Before Taxes	(3,427)		(11,284)






Non-cash deferred liability recovery	(5,824)		—

Other	(525)		513
Changes in Operating Assets and Liabilities Providing (Using) Cash:
Accounts Receivable	(4,170)		(10,024)
Inventories	(13,860)		(9,015)
Accounts Payable	(3,488)		8,625
Accrued Expenses	2,909		(1,380)
Other Current Assets and Liabilities	16		(363)
Customer Advance Payments and Deferred Revenue	1,190		(113)
Income Taxes	1,262		16,492
Operating Lease Liabilities	(1,447)		(1,724)
Supplemental Retirement Plan and Other Liabilities	(100)		(109)
Cash Flows (Used) Provided by Operating Activities	(19,181)		316
Cash Flows from Investing Activities:
Proceeds from Sale of Business	3,437		21,961
Capital Expenditures	(1,573)		(1,160)


Cash Flows Provided by Investing Activities	1,864		20,801
Cash Flows from Financing Activities:
Proceeds from Long-term Debt	126,122		17,925
Principal Payments on Long-term Debt	(111,986)		(43,925)

Stock Award Activity	(602)		108
Finance Lease Principal Payments	(11)		(23)



Debt Acquisition Costs	(4,347)		(771)
Cash Flows Provided (Used) by Financing Activities	9,176		(26,686)
Effect of Exchange Rates on Cash	80		(173)
Decrease in Cash and Cash Equivalents and Restricted Cash	(8,061)		(5,742)
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	$	5,717	$	24,015

See notes to consolidated condensed financial statements.

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ASTRONICS CORPORATION

Consolidated Condensed Statements of Shareholders’ Equity

Three Months Ended April 1, 2023 With Comparative Figures for 2022

(Unaudited)

(In thousands)


	Three Months Ended
		April 1, 2023		April 2, 2022
Common Stock
Beginning of Period		$	291	$	289


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

Class B Stock Converted to Common Stock		1		—
End of Period		293		290
Convertible Class B Stock
Beginning of Period		63		64


Class B Stock Converted to Common Stock		(1)		—
End of Period		62		64
Additional Paid in Capital
Beginning of Period		98,630		92,037


Net Exercise of Stock Options and Equity-based Compensation Expense		2,399		2,501
Tax Withholding Related to Issuance of RSU’s		(603)		(293)
End of Period		100,426		94,245
Accumulated Comprehensive Loss
Beginning of Period		(9,526)		(14,495)

Foreign Currency Translation Adjustments		224		(181)

Retirement Liability Adjustment – Net of Taxes		185		351
End of Period		(9,117)		(14,325)
Retained Earnings
Beginning of Period		240,360		287,225


Net Loss		(4,415)		(3,101)
Reissuance of Treasury Shares for 401K Contribution		(1,482)		(5,077)


End of Period		234,463		279,047
Treasury Stock
Beginning of Period		(89,898)		(108,516)

Shares Issued to Fund 401K Obligation		2,695		9,277

End of Period		(87,203)		(