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 July 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
_________________________________________________________________
(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 July 1, 1995, 2,956,337 shares of $.01 par value common
stock and 834,005 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
July 1, 1995
With Comparative Figures for December 31, 1994
ASSETS
(Dollars in Thousands)
July 1, 1995 December 31,
(Unaudited) 1994
Current Assets:
Cash $ 2,473 $ 3,520
Accounts receivable 2,530 2,950
Inventories:
Finished goods 1,613 1,556
Work in process 645 815
Raw material 1,667 1,814
Prepaid expenses 200 659
_______ ________
Total current assets 9,128 11,314
Property, Plant and Equipment 25,785 25,228
Less accumulated
depreciation
and amortization 13,907 14,051
_______ ________
Net property, plant
and equipment 11,878 11,177
Other Assets 1,144 1,296
_______ ________
$22,150 $23,787
======= ========
See notes to financial statements.
<PAGE>
ASTRONICS CORPORATION
Consolidated Balance Sheet
July 1, 1995
With Comparative Figures for December 31, 1994
LIABILITIES AND SHAREHOLDERS' EQUITY
(Dollars in Thousands)
July 1,1995 December 31,
(Unaudited) 1994
___________ ____________
Current Liabilities:
Current maturities of long-term debt $ 2,244 $ 2,230
Accounts payable 1,763 1,599
Accrued expenses 954 1,208
Income taxes (36) 242
_______ _______
Total current liabilities 4,925 5,279
Long-Term Debt 3,853 4,771
Long-Term Obligation under Capital Leases 2,019 2,228
Deferred Income Taxes 865 1,175
Shareholders' Equity:
Common stock, $.01 par value
Authorized 10,000,000 shares, issued
3,254,454 in 1995, 3,232,157 in 1994 33 32
Class B common stock, $.01 par value
Authorized 5,000,000 shares, issued
834,005 in 1995, 850,102 in 1994 8 9
Additional paid-in capital 2,077 2,068
Retained earnings 9,135 8,687
Treasury stock, at cost (765) (462)
_______ _______
Total shareholders' equity 10,488 10,334
_______ _______
$22,150 $23,787
======= =======
See notes to financial statements.
<PAGE>
ASTRONICS CORPORATION
Consolidated Statement of Income and Retained Earnings
Period Ended July 1, 1995
With Comparative Figures for 1994
(Dollars in Thousands)
(Unaudited)
SIX MONTHS THREE MONTHS
1995 1994 1995 1994
Net Sales $13,450 $11,365 $ 6,224 $5,257
Costs and Expenses:
Cost of products sold 9,415 8,410 4,334 3,865
Selling, general and
administrative expenses 3,028 2,626 1,510 1,281
Interest expenses, net of
interest earned of $73 in
1995 and $61 in 1994 214 284 105 135
Gain on sale of equipment - (301) - (301)
______ ______ ______ _____
Total costs and expenses 12,657 11,019 5,949 4,980
______ ______ ______ _____
Income before provision
for taxes on income 793 346 275 277
Provision for taxes on income 345 181 103 148
______ ______ ______ _____
Net Income $ 448 $ 165 $ 172 $ 129
====== =====
Retained Earnings:
January 1 8,687 7,381
______ ______
July 1 $ 9,135 $ 7,546
====== ======
Income per Common Share: $ .12 $ .04 $ .05 $ .03
====== ====== ====== =====
See notes to financial statements.
<PAGE>
ASTRONICS CORPORATION
Consolidated Statement of Cash Flows
Six Months Ended July 1, 1995
With Comparative Figures for 1994
(Dollars in Thousands)
(Unaudited)
1995 1994
Cash Flows from Operating Activities
Net income $ 448 $ 165
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 1,444 1,276
Provision for doubtful accounts 291 23
Provision for deferred taxes (310) (19)
Cash flows from changes in operating
assets and liabilities:
Accounts receivable 129 324
Inventories 260 577
Prepaid expenses 459 123
Accounts payable 163 8
Accrued expenses (254) (253)
Income taxes payable (278) (15)
______ ______
Net Cash provided by Operating Activities $ 2,352 $ 2,209
______ ______
Cash Flows from Investing Activities
Proceeds from sale of assets 10 226
Change in other assets - (26)
Capital expenditures (2,003) (541)
______ ______
Net Cash used by Investing Activities $(1,993) $ (341)
Cash Flows from Financing Activities
Principal payments on long-term debt
and capital lease obligations (1,112) (877)
Proceeds from issuance of stock 9 -
Purchase of Treasury Stock (303) (103)
______ _______
Net Cash used by Financing Activities $(1,406) $ (980)
______ _______
Net increase in cash and cash equivalents (1,047) 888
Cash and Cash Equivalents, January 1 3,520 3,496
Cash and Cash Equivalents, July 1 $ 2,473 $ 4,384
====== =======
Disclosure of cash payments for:
Interest $ 294 $ 357
Income taxes 933 122
See notes to financial statements.
<PAGE>
ASTRONICS CORPORATION
Notes to Financial Statements
July 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
Six months ended July 1 Increase (Decrease)
1995 1994 1994-1995
Net Sales:
Electronic Systems 44.0% 38.6% 35.0%
Customized Printing
and Packaging 56.0 61.4 7.9%
_____ _____
100.0% 100.0% 18.4%
Cost of products sold 70.0 74.0 12.0%
Selling, general and
administrative
expenses 22.5 23.1 15.3%
Interest expense, net 1.6 2.5 (24.6%)
Gain on sale of equipment - (2.6) -
_____ _____
94.1% 97.0% 14.9%
Income before provision
for income taxes 5.9% 3.0% 129.2%
Provision for taxes 2.6 1.6 90.6%
_____ _____
Net Income 3.3% 1.4% 171.5%
===== =====
SALES Sales for the first six months of 1995 increased
18.4 percent compared to a decrease of 4.4 percent
in 1994, and an increase of 6.7 in 1993. Sales
were $13,450,000, $11,365,000, and $11,890,000 in
the first half of 1995, 1994, and 1993,
respectively. The trailing twelve months sales
are up 15.4 percent, compared to a decline in
sales of 4.3 for the prior twelve months.
Sales in the Electronic Systems segment increased
in the first half of 1995 by 35.0 percent,
compared to a decrease of 12.2 percent in 1994,
and an increase of 26.1 percent in the 1993. The
growth of sales in 1995 is from increased
shipments to the defense aerospace industry and to
the international market for runflats. In 1994,
sales decreased as shipments were slow to the
defense aerospace industry. The net sales
increase from 1993 to 1995 is 18.5 percent.
<PAGE>
Sales in the Customized Printing and Packaging
segment increased in the first half of 1995 by 7.9
percent, compared to 1.3 percent in 1994, and a
decrease of 4.0 percent in the 1993. The growth
of sales in the Customized Printing and Packaging
segment is from increased business in the
imprinting and invitation area. This segment has
experienced heavy pressure from competitive
pricing resulting in lower revenue per unit. The
net sales increase from 1993 to 1995 is 9.2
percent.
EXPENSES Cost of products sold increased 12.0 percent in
1995, 3.4 percent in 1994, and 3.1 percent in
1993. In 1995 and 1993, sales increased by a
larger percent than costs, while in 1994 costs
increased while sales decreased. Costs are
increasing in several areas; for example,
purchases of board, corrugated, and plastics. The
Company is unable to pass on these increases as
pricing adjustments in most cases. The offset to
these increased costs is the Company's investment
in technology, processes, and equipment, which
have reduced costs. In 1994, the company
relocated the Massachusetts portion of the
Electronic Systems segment and combined it with
the East Aurora, NY, operations.
Raw material costs, as a percent of sales were
25.7 percent, 27.4 percent, and 25.1 percent in
1995, 1994, and 1993, respectively. These costs
are affected by product mix changes, changes in
inventory levels, and manufacturing efficiency.
Overall, the increased benefits from investments
in technology, processes and equipment have
reduced material usage through lower scrap rates.
Employee costs, as a percent of sales were 23.3
percent, 24.6 percent, and 26.4 percent in 1995,
1994, and 1993, respectively. This area is also
affected by product mix. The benefits of the
investments referred to above also have reduced
employee costs. The cost side of these
investments is reflected in increasing
depreciation costs, which as a percent of sales,
were 9.1 percent, 7.8 percent, and 6.5 percent in
1995, 1994, and 1993, respectively. Other cost
areas have not experienced dramatic changes.
Combined selling, general and administrative costs
were 22.5 percent, 23.1 percent, and 19.6 percent
of sales in 1995, 1994, and 1993, respectively.
The largest portion of these is employee costs
which were 11.4 percent, 11.5 percent and 10.2
percent in 1995, 1994, and 1993, respectively. In
1995, the Company recorded a provision for
doubtful accounts of $305,000, or 2.3 percent of
sales. In prior years this was less than .5
percent. All other areas of expenses are stable.
<PAGE>
Interest costs, net, were $214,000, or 1.6 percent
of sales in 1995, $284,000, or 2.5 percent in
1994, and $442,000, or 3.7 percent in 1993. The
Company refinanced its subordinated debentures on
April 30, 1993, at a fixed cost of 6.96 percent
over five years. The subordinated debentures
carried a 10.25 percent rate. This, combined with
normal reductions in indebtedness, accounts for
lower interest costs.
In 1994, the Company was able to sell equipment
that was no longer necessary as a result of the
1993 and 1994 capital expenditure programs. The
net gain from the sale of this equipment was
$301,000. The largest piece of equipment was a
five color printing press.
The combined effect of the above items resulted in
income before taxes, of $793,000, or 5.9 percent
of sales in 1995, $346,000, or 3.0 percent of
sales in 1994, and $990,000, or 8.3 percent of
sales in 1993.
TAXES The provision for taxes for 1995 is $345,000 or
2.6 percent of sales, compared to $181,000, or 1.6
percent in 1994, and $434,000, or 3.7 percent of
sales.
EXTRAORDINARY
ITEM In April 1993, the Company refinanced its 10.25
percent, September 1, 1996, subordinated
debentures through a five-year unsecured loan at
6.96 percent. The Company paid a one percent
premium on the bonds redeemed and wrote-off the
balance of the deferred financing costs incurred
with the original issuance of the 10.25 percent
debentures. These costs, net of taxes, were
$307,000, or $.08 per share, and are identified as
an extraordinary charge in 1993.
NET INCOME Net income is $448,000, or $.12 per share in 1995,
$165,000, or $.04 per share in 1994, and $249,000,
or $.06 per share in 1993.
LIQUIDITY The Company's cash decreased in the first six
months of 1995 by $1,047,000 compared to an
increased of $888,000 at July 2, 1994. In the
first half of 1995, the Company invested
$2,003,000 in capital expenditures compared to
$541,000 in the same period of 1994. The Company
anticipates capital expenditures of approximately
$6,000,000 for the year. The Company also
purchased 111,000 shares of Treasury Stock for
$303,000, compared to 41,000 shares at a cost of
$103,000 in 1994. The Company has a $5,000,000
line of credit available for additional working
capital needs. The Company feels that its cash
<PAGE>
flow from internal operations and the line of
credit are adequate to meet the Company's
operational and investment plans for 1995. They
believe they will be using the line of credit by
the Fourth Quarter of 1995.
BACKLOG The Company's backlog at the end of the Second
Quarter was $5,500,000, down from $6,700,000 at
December 31, 1994. It was $6,500,000, at July 2,
1994, compared to $7,100,000 at July 3, 1993. The
July 1,1995, backlog is $4,100,000 in the
Electronic Systems segment and $1,400,000 in the
Customized Printing and Packaging segment.
COMMITMENTS The Company plans to make capital investments of
approximately $6,000,000 for investments in
technology, processes and equipment in 1995. As
of July 1, 1995, approximately $5,500,000 had been
spent or committed. Also, the Company has
authorized the repurchase of an additional 250,000
shares of its common stock at various times when
the market conditions warrant.
The Company 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.
OUTLOOK Sales have increased at an 18 percent rate for the
first half of 1995, a growth rate that is not
expected to be maintained. Earnings for the first
half of 1995 are up 171 percent, compared to net
income for the first half of 1994, which was
affected by the one-time transition costs of
combining the Massachusetts and New York
defense/electronics aerospace operations in East
Aurora, NY. While the Company believes earnings
will continue to grow, they should more closely
reflect the sales growth.
<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 Company's Annual Meeting of Shareholders held on
April 28, 1995, the nominees to the Board of Directors
were re-elected based upon the following results:
Nominee For Withheld
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
In addition, Ernst & Young LLP was ratified to continue
as auditors based upon the following votes: For,
7,899,622; Against 156,839; Abstain, 313,749. There
were no broker non-votes.
Item 5. Other Information.
As reported in its March 21, 1995 proxy statement,
registrant made an equity investment of $200,000 in a
newly-formed French company engaged in the printing
business in which Robert S. Keane is a principal. Robert
S. Keane is the son of Kevin T. Keane, an officer and
director of registrant. Registrant thereafter determined
to liquidate the investment and accepted the offer of
Kevin T. Keane to acquire the same at registrant's cost,
a transaction which was concluded during registrant's
second quarter.
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: August 15, 1995
ASTRONICS CORPORATION
John M. Yessa
By___________________________
(Signature)
John M. Yessa
Vice President-Finance and
Treasurer
<PAGE>
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