SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal quarter ended April 1, 1995
[ ] 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 16-0959303
___________________________________________________________________________
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1801 Elmwood Avenue, Buffalo, New York 14207
___________________________________________________________________________
(Address of Principal Executive Office) (Zip Code)
716-447-9013
___________________________________________________________________________
(Registrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(g) of the Act:
$.01 par value Common Stock, $.01 par value Class B Stock, Warrants
___________________________________________________________________________
(Title of Class)
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 (or such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [X] No [ ]
As of April 1, 1995, 3,032,734 shares of $.01 par value common stock and
842,608 shares of $.01 par value Class B common stock were outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ASTRONICS CORPORATION
Consolidated Balance Sheet
April 1, 1995
With Comparative Figures for December 31, 1994
ASSETS
(Dollars in Thousands)
April 1, 1995 December 31,
(Unaudited) 1994
Current Assets:
Cash $ 2,402 $ 3,520
Accounts receivable 3,265 2,950
Inventories:
Finished goods 1,633 1,556
Work in process 641 815
Raw material 1,703 1,814
Prepaid expenses 193 659
_______ _______
Total current assets 9,837 11,314
Property, Plant and Equipment 25,389 25,228
Less accumulated depreciation
and amortization 13,382 14,051
_______ _______
Net property, plant and
equipment 12,007 11,177
Other Assets 1,353 1,296
_______ _______
$23,197 $23,787
======= =======
See notes to financial statements.
<PAGE>
ASTRONICS CORPORATION
Consolidated Balance Sheet
April 1, 1995
With Comparative Figures for December 31, 1994
LIABILITIES AND SHAREHOLDERS' EQUITY
(Dollars in Thousands)
April 1, 1995 December 31,
(Unaudited) 1994
Current Liabilities:
Current maturities of
long-term debt $ 2,235 $ 2,230
Accounts payable 1,706 1,599
Accrued expenses 835 1,208
Income taxes 408 242
_______ _______
Total current liabilities 5,184 5,279
Long-Term Debt 4,312 4,771
Long-Term Obligation under Capital
Leases 2,124 2,228
Deferred Income Taxes 1,020 1,175
Shareholders' Equity:
Common stock, $.01 par value
Authorized 10,000,000 shares,
issued 3,245,851 in 1995,
3,232,157 in 1994 33 32
Class B common stock, $.01 par value
Authorized 5,000,000 shares, issued
842,608 in 1995, 850,102 in 1994 8 9
Additional paid-in capital 2,077 2,068
Retained earnings 8,963 8,687
Less Treasury stock, at cost (524) (462)
_______ _______
Total shareholders' equity 10,557 10,334
_______ _______
$23,197 $23,787
======= =======
See notes to financial statements.
<PAGE>
ASTRONICS CORPORATION
Consolidated Statement of Income and Retained Earnings
Three Months Ended April 1, 1995
With Comparative Figures for 1994
(Dollars in Thousands)
(Unaudited)
1995 1994
Net Sales $ 7,226 $ 6,108
Costs and Expenses:
Cost of products sold 5,081 4,545
Selling, general and
administrative expenses 1,518 1,345
Interest expenses, net of
interest earned of $39
in 1995 and $25 in 1994 109 149
_______ _______
Total costs and expenses 6,708 6,039
_______ _______
Income before provision for
taxes on income 518 69
Provision for taxes on income 242 33
_______ _______
Net Income 276 36
Retained Earnings:
January 1 8,687 7,381
_______ _______
April 1 $ 8,963 $ 7,417
======= =======
Income per Common Share $ .07 $ .01
======= =======
See notes to financial statements.
<PAGE>
ASTRONICS CORPORATION
Consolidated Statement of Cash Flows
Three Months Ended April 1, 1995
With Comparative Figures for 1994
(Dollars in Thousands)
(Unaudited)
1995 1994
Cash Flows from Operating Activities
Net income $ 276 $ 36
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 746 553
Provision for doubtful accounts 101 54
Provision for deferred taxes (155) 52
Cash flows from changes in
operating assets and liabilities:
Accounts receivable (416) 45
Inventories 208 335
Prepaid expenses 465 18
Accounts payable 107 (45)
Accrued expenses (373) (196)
Income taxes payable 166 (130)
_______ _______
Net Cash provided (used) by Operating
Activities $ 1,125 $ 722
_______ _______
Cash Flows from Investing Activities
Proceeds from sale of assets 10 34
Change in other assets (100) (16)
Capital expenditures (1,543) (234)
_______ _______
Net Cash provided (used) by
Investing Activities $(1,633) $ (216)
_______ _______
Cash Flows from Financing Activities
Principal payments on long-term
debt and capital lease
obligations (557) (401)
Proceeds from issuance of stock 9 --
Purchase of stock for Treasury (62) --
_______ _______
Net Cash provided (used) by
Financing Activities $ (610) $ (401)
_______ _______
<PAGE>
Net increase (decrease) in cash
and cash equivalents (1,118) 105
Cash and Cash Equivalents at
Beginning of Year 3,520 3,496
_______ _______
Cash and Cash Equivalents at
April 1 $ 2,402 $ 3,601
======= =======
Disclosure of cash payments for:
Interest $ 151 $ 182
Income taxes 231 111
See notes to financial statements.
<PAGE>
ASTRONICS CORPORATION
Notes to Financial Statements
April 1, 1995
1) The interim financial statements are unaudited, but, in the
opinion of management, reflect all adjustments necessary for
a fair presentation of results for such periods. The
results of operations for any interim period are not
necessarily indicative of results for the full year. These
financial statements should be read in conjunction with the
financial statements and notes thereto contained in the
Company's annual report for the year ended December 31,
1994.
<PAGE>
ASTRONICS CORPORATION
Item 2. Management's Discussion and Analysis of the Financial
Condition and Results of Operations
The following table sets forth as a percent of net sales certain
items reflected in the financial data and the percentage increase
(decrease) of such items as compared to the prior period.
Percent of Net Sales Period-to-Period
Three months ended Increase
April 1 (Decrease)
1995 1994 1994-1995
Net Sales:
Electronic Systems 41.4% 35.9% 36.4%
Customized Printing and
Packaging 58.6 64.1 8.1%
_____ _____
100.0% 100.0% 18.3%
Cost of products sold 70.3 74.4 11.8%
Selling, general and
administrative expenses 21.0 22.1 12.9%
Interest expenses, net 1.5 2.4 (26.8%)
_____ _____
92.8% 98.9% 11.1%
Income before provision
for income taxes 7.2% 1.1% 650.8%
Provision for taxes 3.4 .5 633.4%
_____ _____
Net Income 3.8% .6% 666.7%
====== =====
SALES Sales increased in the First Quarter of 1995 by
18.3 percent to $7,226,000, compared to the First
Quarter of 1994. In the 1994 First Quarter, sales
decreased by 7.5 percent to $6,108,000 compared to
$6,604,000. The 1995 sales increase achieved in
the First Quarter consisted of 36.4 percent in the
Electronic Systems segment and 8.1 percent in the
Customized Packaging and Printing segment. In the
Electronics segment, sales increases, in dollar
value, came about equally from the
electroluminescent and keyboard manufacturing side
and the thick walled elastomeric products. The
first is related to increased activity in the
aerospace and defense electronics products. The
latter, to the increased business activity in the
global marketplace. The Customized Printing and
Packaging sales increased about equally between
<PAGE>
folding carton sales to the confectionery industry
and from specialty imprinting for the stationery,
party and gift market. In 1994, the sales
decrease came in the Electronics Systems segment
and was related to the defense electronics and
aerospace industry. Price increases have been
nominal, but the pressure to reduce pricing has
moderated.
BACKLOG The backlog for the Company decreased to
$6,000,000 compared to $6,700,000 at December 31,
1994, and $7,500,000 as of April 2, 1994. The
April 1, 1995, backlog is composed of $4,700,000
in the Electronic Systems segment and $1,300,000
in the Customized Printing and Packaging segment.
Part of the decrease in the backlog relates to the
timing/release of orders and part is a reflection
of the reduced cycle time from the receipt of an
order to the completion and delivery of the order
to the customer.
EXPENSES Cost of products sold decreased, as a percent of
sales, from 74.4 percent in 1994 to 70.3 percent
in 1995. This decrease reflects the 1994 one-time
charges related to the transition and relocation
of the Gloucester, MA, operation into the East
Aurora, NY, manufacturing facility. The hard
costs of the move were approximately $400,000, or
6.5 percent of sales. These costs consisted of
the following:
Buyout of a 5.75 year facility lease $150,000
Employee severance payments $150,000
Moving and travel costs $100,000
Overall, therefore, operating expenses increased
in the quarter. The three areas of increase were
manufacturing supplies, repairs and depreciation.
The Company is continuing to invest in technology
and processes which require initial investments in
support items, which are generally being treated
as supplies. During the quarter, the Company
elected to do additional preventive maintenance on
several machines and facilities. This had a
temporary effect of increasing repair costs.
Depreciation expense increased in the quarter to
9.3 percent of sales compared to 7.2 percent in
1994, and 5.8 percent in 1993. This reflects the
investment in technology and processes and the
retirement of an obsolete price of machinery.
Material usage costs, despite some increases in
raw material costs, continued to decrease. In
1995, they were 26.7 percent, in 1994, they were
27.0 percent. In 1993, product mix differences
reduced material usage to 25.0 percent. Employee
costs also continue to decrease. In 1995, these
costs are 23.1 percent of sales, compared to 24.2
percent in 1994, and 25.4 percent in 1993. The
<PAGE>
remaining areas of costs were similar in 1995,
1994, and 1993. Total costs in this areas were
$5,801,000, or 70.3 percent of sales in 1995,
compared to $4,545,000, or 74.4 percent of sales
in 1994, compared to $4,376,000, or 66.3 percent
in 1993.
Selling, general and administrative expenses
increased 12.9 percent in 1995, compared to an
increase of 8.5 percent in 1994. The 1995
increase compares to an increase in sales of 18.3
percent. The Company has a policy that it
reserves all trade receivables over 180 days, or
earlier if their are substantial questions.
During this quarter, an increase in reserves of
$102,000 was recorded. While the Company makes
every effort to collect all receivables, it
believes it is prudent to adequately reserve
accounts that are not collected in a reasonable
timeframe. Because of timing, some normal
advertising expenses experienced in the 1994 First
Quarter will be incurred in the Second Quarter of
1995. Total selling, general and administrative
expenses were $1,518,000, or 21 percent of sales
in 1995, compared to $1,345,000, or 22.0 percent
in 1994, and $1,240.000, or 18.8 percent of sales
in 1993.
INTEREST Interest costs, net, continues to decrease. This
is the result of the refinancing of the
subordinated debentures in 1993 and the steady
reduction of indebtedness. During the last twelve
months, the company has reduced indebtedness by
over $2,000,000. The earnings on temporary
available cash was $39,000 in 1995, $25,000 in
1994, and $26,000 in 1993. As a percent of sales,
interest costs, net, were 1.5 percent in 1995, 2.4
percent in 1994 and 3.8 percent in 1993.
Combining all the costs areas, the Company
experienced a 11.1 percent increase in costs,
while sales were increasing 18.3 percent. This
compares to an increase in costs in 1994 of 3.0
percent on a decline of sales of 7.5 percent.
Income before taxes increased to $518,000, or 7,2
percent compared to $69,000, or 1.1 percent of
sales in 1994, and $739,000, or 11.2 percent of
sales in 1993.
TAXES The effective tax rate for the First Quarter of
1995 was 46.7 percent, compared to 47.8 percent in
1994, and 40.2 percent in 1993. The tax provision
reflects the Federal income tax rate of 34.0
percent and various state income/franchise tax
rates. Where there are minimum taxes required by
law in various taxing jurisdictions, these are
accrued in the First Quarter.
<PAGE>
NET INCOME Net income was for the First Quarter was $276,000,
or $.07 per share. In 1994, the Company earned
$36,000, or $.01 per share compared to the First
Quarter of 1993 record earnings of $442,000, or
$.11 per share.
LIQUIDITY The Company's working capital decreased in the
First Quarter of 1995 by $1,382,000. This
reflects the following items for which working
capital was used:
Investment in technology and processes $1,543,000
Reduction of indebtedness 557,000
Acquisition of Treasury Stock 62,000
__________
$2,162,000
This compares to a increase of $135,000 in 1994
and an increase of $414,000 in 1993. The Company
has a $5,000,000 line of credit available for
additional working capital needs, which the
Company has not utilized in recent years. The
Company feels that its beginning cash balance, the
cash flow from internal operations and the line of
credit are adequate to meet the Company's
operational and investment plans for 1995.
COMMITMENTS The Company is continuing its commitment to
technology and processes. As such, it has
outstanding commitments at the end of the First
Quarter of 1995 of approximately $3,500,000. All
of these commitments should be completed and
operational by the end of the Fourth Quarter.
The Company also has commitments for items that it
purchases in the normal on-going affairs of the
business. The Company is not aware of any
obligations in excess of normal market conditions,
nor of any long-term commitments that would affect
its financial condition.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Securities Holders.
At the annual meeting of shareholders held on April 28,
1995, the nominees to the Board of Directors were re-
elected based on the following results:
Votes Withholding
Nominees Votes For Authority
Guy P. Berner 7,341,461 1,028,749
Robert T. Brady 7,383,498 986,712
John B. Drenning 7,341,461 1,028,749
Kevin T. Keane 7,385,701 984,509
John M. Yessa 7,385,851 984,359
The selection of Ernst & Young as the Registrant's
auditors was approved by the following vote: 7,899,622
in favor; 156,839 against; and 313,749 abstentions.
Under applicable New York law and the Company's charter
documents, abstentions and non-votes have no effect.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
DATED: May 16, 1995
ASTRONICS CORPORATION
_________________________________
_________________________________
(Signature)
John M. Yessa
Vice President-Finance and Treasurer
<PAGE>
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