atro-20230930

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 September 30, 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 an “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 November 3, 2023, 33,940,478 shares of common stock were outstanding consisting of 27,948,897 shares of common stock ($.01 par value) and 5,991,581 shares of Class B common stock ($.01 par value).

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PAGE

PART I

FINANCIAL INFORMATION

Item 1

Financial Statements:

•

Consolidated Condensed Balance Sheets as of September 30 , 2023 and December 31, 2022

•

Consolidated Condensed Statements of Operations for the Three and Nine Months Ended Sept e mber 30 , 2023 and Octobe r 1 , 2022

•

Consolidated Condensed Statements of Comprehensive Loss for the Three and Nine Months Ended Sep tember 30 , 2023 and October 1 , 2022

•

Consolidated Condensed Statements of Cash Flows for the Nine Months Ended Septembe r 30 , 2023 and October 1 , 2022

•

Consolidated Condensed Statements of Shareholders’ Equity for the Three and Nine Months Ended Septembe r 30 , 2023 and October 1 , 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

September 30, 2023 with Comparative Figures for December 31, 2022

(Unaudited)

(In thousands)


	September 30, 2023		December 31, 2022

Current Assets:
Cash and Cash Equivalents	$	3,981	$	13,778
Restricted Cash	3,670		—
Accounts Receivable, Net of Allowance for Estimated Credit Losses	152,961		147,790
Inventories	203,900		187,983
Prepaid Expenses and Other Current Assets	16,714		15,743

Total Current Assets	381,226		365,294
Property, Plant and Equipment, Net of Accumulated Depreciation	86,742		90,658
Operating Right-of-Use Assets	28,137		13,028
Other Assets	7,915		8,605
Intangible Assets, Net of Accumulated Amortization	68,682		79,277
Goodwill	58,169		58,169
Total Assets	$	630,871	$	615,031
Current Liabilities:
Current Maturities of Long-term Debt	$	8,996	$	4,500
Accounts Payable	69,561		64,193
Current Operating Lease Liabilities	4,598		4,441
Accrued Expenses and Other Current Liabilities	48,941		45,911
Customer Advance Payments and Deferred Revenue	26,127		32,567

Total Current Liabilities	158,223		151,612
Long-term Debt	160,000		159,500
Long-term Operating Lease Liabilities	25,025		9,942
Other Liabilities	55,216		54,057
Total Liabilities	398,464		375,111
Shareholders’ Equity:
Common Stock	368		354
Accumulated Other Comprehensive Loss	(9,086)		(9,526)
Other Shareholders’ Equity	241,125		249,092
Total Shareholders’ Equity	232,407		239,920
Total Liabilities and Shareholders’ Equity	$	630,871	$	615,031

See notes to consolidated condensed financial statements.

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ASTRONICS CORPORATION

Consolidated Condensed Statements of Operations

Three and Nine Months Ended September 30, 2023 With Comparative Figures for 2022

(Unaudited)

(In thousands, except per share data)


	Nine Months Ended				Three Months Ended
	September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
Sales	$	493,914	$	376,741	$	162,922	$	131,438
Cost of Products Sold	413,091		326,711		142,304		117,050
Gross Profit	80,823		50,030		20,618		14,388

Selling, General and Administrative Expenses	95,276		76,907		35,097		28,702

Loss from Operations	(14,453)		(26,877)		(14,479)		(14,314)
Net Gain on Sale of Business	(3,427)		(11,284)		—		—
Other (Income) Expense, Net of Other Expense (Income)	(562)		1,180		348		427
Interest Expense, Net of Interest Income	17,381		5,812		5,991		2,519
Loss Before Income Taxes	(27,845)		(22,585)		(20,818)		(17,260)
Provision for (Benefit from) Income Taxes	5,552		6,383		(3,835)		(2,403)
Net Loss	$	(33,397)	$	(28,968)	$	(16,983)	$	(14,857)
Loss Per Share:
Basic	$	(1.02)	$	(0.90)	$	(0.51)	$	(0.46)
Diluted	$	(1.02)	$	(0.90)	$	(0.51)	$	(0.46)

See notes to consolidated condensed financial statements.

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ASTRONICS CORPORATION

Consolidated Condensed Statements of Comprehensive Loss

Three and Nine Months Ended September 30, 2023 With Comparative Figures for 2022

(Unaudited)

(In thousands)


	Nine Months Ended				Three Months Ended
	September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
Net Loss	$	(33,397)	$	(28,968)	$	(16,983)	$	(14,857)
Other Comprehensive Income (Loss):
Foreign Currency Translation Adjustments	(117)		(3,241)		(828)		(1,674)
Retirement Liability Adjustment – Net of Tax	557		1,046		185		348
Total Other Comprehensive Income (Loss)	440		(2,195)		(643)		(1,326)
Comprehensive Loss	$	(32,957)	$	(31,163)	$	(17,626)	$	(16,183)

See notes to consolidated condensed financial statements.

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ASTRONICS CORPORATION

Consolidated Condensed Statements of Cash Flows

Nine Months Ended September 30, 2023 With Comparative Figures for 2022


	Nine Months Ended
(Unaudited, In thousands)	September 30, 2023		October 1, 2022
Cash Flows from Operating Activities:
Net Loss	$	(33,397)	$	(28,968)
Adjustments to Reconcile Net Loss to Cash Flows from Operating Activities:
Depreciation and Amortization	19,758		20,905
Amortization of Deferred Financing Fees	2,148		—
Provisions for Non-Cash Losses on Inventory and Receivables	13,713		1,033
Equity-based Compensation Expense	5,603		5,178

Operating Lease Non-Cash Expense	3,816		4,568
Non-Cash Accrued 401K Contribution	3,773		3,300
Net Gain on Sale of Business, Before Taxes	(3,427)		(11,284)

Non-Cash Litigation Provision Adjustment	(1,305)		2,000




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

Other	911		2,997
Changes in Operating Assets and Liabilities Providing (Using) Cash:
Accounts Receivable	(12,980)		(28,196)
Inventories	(24,024)		(35,444)
Accounts Payable	4,033		17,595
Accrued Expenses	5,111		935

Customer Advance Payments and Deferred Revenue	(562)		1,990
Income Taxes	3,443		14,583
Operating Lease Liabilities	(3,660)		(5,715)
Supplemental Retirement Plan Liabilities	(304)		(306)
Other Assets and Liabilities	898		(4,312)
Net Cash Used by Operating Activities	(22,276)		(39,141)
Cash Flows from Investing Activities:
Proceeds from Sale of Business and Assets	3,427		21,981
Capital Expenditures	(6,037)		(4,283)


Net Cash (Used) Provided by 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 Activity	2,480		104
Proceeds from At-the-Market Stock Sales	13,045		—
Finance Lease Principal Payments	(47)		(85)



Debt Acquisition Costs	(6,447)		(968)
Net Cash Provided (Used) by 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

See notes to consolidated condensed financial statements.

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ASTRONICS CORPORATION

Consolidated Condensed Statements of Shareholders’ Equity

Three and Nine Months Ended September 30, 2023 With Comparative Figures for 2022

(

SEC Form 10-Q filed by Astronics Corporation