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 September 30, 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 September 30, 1995, 2,998,227 shares of $.01 par value
common stock and 830,211 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
September 30, 1995
With Comparative Figures for December 31, 1994
ASSETS
(Dollars in Thousands)
September 30, 1995 December 31,
(Unaudited) 1994
Current Assets:
Cash $ 295 $ 3,520
Accounts receivable 2,788 2,950
Inventories:
Finished goods 1,876 1,556
Work in process 553 815
Raw material 1,942 1,814
Prepaid expenses 1,612 659
_______ _______
Total current assets 9,066 11,314
Property, Plant and Equipment 26,487 25,228
Less accumulated depreciation
and amortization 14,438 14,051
_______ _______
Net property, plant
and equipment 12,049 11,177
Other Assets 1,151 1,296
_______ _______
$22,266 $23,787
======== ========
See notes to financial statements.
<PAGE>
ASTRONICS CORPORATION
Consolidated Balance Sheet
September 30, 1995
With Comparative Figures for December 31, 1994
LIABILITIES AND SHAREHOLDERS' EQUITY
(Dollars in Thousands)
September 30, 1995 December 31,
(Unaudited) 1994
Current Liabilities:
Current maturities of
long-term debt $ 2,239 $ 2,230
Accounts payable 1,695 1,599
Accrued expenses 1,165 1,208
Income taxes (14) 242
________ ________
Total current
liabilities 5,085 5,279
Long-Term Debt 3,394 4,771
Long-Term Obligation under
Capital Leases 1,926 2,228
Deferred Income Taxes 897 1,175
Shareholders' Equity:
Common stock, $.01 par value
Authorized 10,000,000 shares,
issued 3,258,248 in 1995,
3,232,157 in 1994 33 32
Class B common stock, $.01 par
value Authorized 5,000,000
shares, issued 830,211 in
1995, 850,102 in 1994 8 9
Additional paid-in capital 2,001 2,068
Retained earnings 9,602 8,687
Treasury stock, at cost (680) (462)
_________ _________
Total shareholders'
equity 10,964 10,334
_________ _________
$ 22,266 $ 23,787
========= =========
See notes to financial statements.
<PAGE>
ASTRONICS CORPORATION
Consolidated Statement of Income and Retained Earnings
Period Ended September 30, 1995
With Comparative Figures for 1994
(Dollars in Thousands)
(Unaudited)
NINE MONTHS THREE MONTHS
1995 1994 1995 1994
Net Sales $ 19,716 $ 17,502 $ 6,266 $ 6,137
Costs and Expenses:
Cost of products sold 13,791 12,539 4,376 4,129
Selling, general and
administrative expenses 4,073 3,929 1,045 1,303
Interest expenses, net of
interest earned of $97
in 1995 and $99 in 1994 319 411 105 127
Gain on sale of equipment -- (323) -- (22)
________ ________ ________ ________
Total costs and expenses 18,183 16,556 5,526 5,537
________ ________ ________ ________
Income before provision
for taxes on income 1,533 946 740 600
Provision for taxes on income 618 368 273 187
________ ________ ________ ________
Net Income $ 915 $ 578 $ 467 $ 413
======== ========
Retained Earnings:
January 1 8,687 7,381
________ ________
September 30 $ 9,602 $ 7,959
======== ========
$ .24 $ .14 $ .12 $ .10
====== ====== ====== ======
See notes to financial statements.
<PAGE>
ASTRONICS CORPORATION
Consolidated Statement of Cash Flows
Nine Months Ended September 30, 1995
With Comparative Figures for 1994
(Dollars in Thousands)
(Unaudited)
1995 1994
Cash Flows from Operating Activities
Net income $ 915 $ 578
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 1,986 1,841
Provision for doubtful accounts 229 159
Provision for deferred taxes (278) (71)
Cash flows from changes in
operating assets and liabilities:
Accounts receivable (67) (167)
Inventories (186) 479
Prepaid expenses (953) (446)
Accounts payable 96 270
Accrued expenses (43) (243)
Income taxes payable (256) 15
________ ________
Net Cash provided by Operating
Activities $ 1,443 $ 2,415
________ ________
Cash Flows from Investing Activities
Proceeds from sale of assets 10 245
Change in other assets (19) (25)
Capital expenditures (2,705) (1,176)
________ ________
Net Cash used by Investing Activities $ (2,714) $ (956)
________ ________
Cash Flows from Financing Activities
Principal payments on long-term
debt and capital lease obligations (1,670) (1,430)
Proceeds from issuance of stock 160 --
Purchase of Treasury Stock (444) (366)
Net Cash used by Financing Activities $ (1,954) $ (1,796)
________ ________
Net increase in cash and cash equivalents (3,225) (337)
Cash and Cash Equivalents, January 1 3,520 3,496
________ ________
Cash and Cash Equivalents, September 30 $ 295 $ 3,159
========= ========
Disclosure of cash payments for:
Interest $ 426 $ 524
Income taxes 1,144 429
See notes to financial statements.
<PAGE>
ASTRONICS CORPORATION
Notes to Financial Statements
September 30, 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 Period-to-
Sales Period
Nine months ended Increase
September 30 (Decrease)
1995 1994 1994-1995
Net Sales:
Electronic Systems 41.3% 37.7% 23.4%
Customized Printing and
Packaging 58.7 62.3 6.1%
________ ______
100.0% 100.0% 12.7%
Cost of products sold 69.9 71.6 10.0%
Selling, general and
administrative expenses 20.7 22.5 3.7%
Interest expense, net 1.6 2.3 (22.4%)
Gain on sale of equipment -- (1.8) --
________ ______
92.2% 94.6% 9.8%
Income before provision
for income taxes 7.8% 5.4% 62.1%
Provision for taxes 3.1 2.1 67.9%
________ ______
Net Income 4.7% 3.3% 58.3%
======== ======
SALES Sales for the first nine months of 1995 increased
12.7 percent compared to a decrease of 1.3 percent
in 1994, and an increase of 5.4 percent in 1993.
Sales were $19,716,000, $17,502,000, and
$17,734,000 for the nine month period in 1995,
1994, and 1993, respectively. The trailing twelve
months sales are up 14.5 percent, compared to a
decline in sales of 3.8 for the prior twelve
months.
<PAGE>
Sales in the Electronic Systems segment increased
in 1995 by 23.4 percent, compared to a decrease of
7.9 percent in 1994, and an increase of 18.5
percent in 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.
Sales in the Third Quarter were flat. The net
sales increase from 1993 to 1995 is 13.7 percent.
Sales in the Customized Printing and Packaging
segment increased in 1995 by 6.1 percent, compared
to 3.1 percent in 1994, and a decrease of 1.9
percent in 1993. The growth of sales in the
Customized Printing and Packaging segment is from
increased business in the stock box, imprinting
and invitation area. This segment has experienced
heavy pressure from competitive pricing resulting
in lower revenue per unit. Sales in the Third
Quarter were slightly ahead of 1994. The net
sales increase from 1993 to 1995 is 9.5 percent.
EXPENSES Cost of products sold increased 10.0 percent in
1995, 2.7 percent in 1994, and 2.9 percent in
1993. In 1995 and 1993, sales increased by a
larger percent than costs, while in 1994 costs
increased while sales decreased. Raw material
costs are increasing in several areas; for
example, purchases of board, corrugated, and
plastics. The Company is unable to pass on the
full affect of these increases as pricing
adjustments in many cases. To offset these
increased costs, the Company has made investments
in technology, processes, and equipment, which
have reduced costs. These include investments in
new equipment with expanded technology, improved
processes, and productivity improvements. Also,
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
25.0 percent, 27.2 percent, and 25.8 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 23.4
percent, 23.9 percent, and 25.8 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
<PAGE>
depreciation costs, which as a percent of sales,
were 8.7 percent, 7.7 percent, and 6.8 percent in
1995, 1994, and 1993, respectively. Manufacturing
supplies have increased by 54.5 percent this year
reflecting the new dies, plates, and support items
used in improving the processes. Other cost areas
have not experienced dramatic changes.
Combined selling, general and administrative costs
were 20.7 percent, 22.5 percent, and 19.0 percent
of sales in 1995, 1994, and 1993, respectively.
The largest portion of these is employee costs
which were 11.3 percent, 11.3 percent and 10.1
percent in 1995, 1994, and 1993, respectively. In
1995, the Company recorded a provision for
doubtful accounts of $253,000, or 1.3 percent of
sales, compared to $182,000, or 1.0 percent in
1994, and $101,000, or .6 percent of sales in
1993. The Company automatically reserves all
accounts over 180 days and those accounts, which
in the opinion of management, have unique credit
situations. All other areas of expenses are
stable.
Interest costs, net, were $319,000, or 1.6 percent
of sales in 1995, $411,000, or 2.4 percent in
1994, and $610,000, or 3.4 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 and the earnings
on the temporary investment of excess funds,
accounts for lower net 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
$323,000. The largest piece of equipment was a
five color printing press.
The combined effect of the above items resulted in
income before taxes, of $1,533,000, or 7.8 percent
of sales in 1995, $946,000, or 5.4 percent of
sales in 1994, and $1,544,000, or 8.7 percent of
sales in 1993.
TAXES The provision for taxes for 1995 is $618,000 or
3.1 percent of sales, compared to $368,000, or 2.1
percent in 1994, and $701,000, or 4.0 percent of
sales, in 1993.
<PAGE>
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 $915,000, or $.24 per share in 1995,
$578,000, or $.14 per share in 1994, and $536,000,
or $.13 per share in 1993.
LIQUIDITY The Company's cash has decreased in 1995 by
$3,225,000 compared to $337,000 in 1994. During
the first nine months of 1995, the Company
invested $2,705,000 in capital expenditures
compared to $1,176,000 in the same period of 1994.
The Company anticipates capital expenditures of
approximately $6,000,000 for the year. Also, it
had $1,500,000 deposited on equipment to be
delivered in the Fourth Quarter, compared to
$460,000 at this time in 1994. The Company has
reduced its indebtedness by $1,670,000 and
$1,430,000 in 1995 and 1994, respectively. The
Company also purchased 155,000 shares of Treasury
Stock for $432,000, compared to 179,000 shares at
a cost of $448,000 in 1994.
The Company has a $5,000,000 line of credit
available for additional working capital needs.
The Company feels that its cash flow from internal
operations and the line of credit are adequate to
meet the Company's operational and investment
plans for 1995 and 1996. The Company will borrow
on its line of credit in early November, 1995.
This will increase interest expense both from the
additional outstanding amount of indebtedness and
from the reduction of available cash for temporary
investment.
BACKLOG The Company's backlog at the end of the Third
Quarter was $6,400,000, down from $6,700,000 at
December 31, 1994. It was $6,900,000, at this
time in 1994, compared to $7,600,000 in 1993. The
September 30, 1995, backlog is $4,000,000 in the
Electronic Systems segment and $2,400,000 in the
Customized Printing and Packaging segment.
<PAGE>
COMMITMENTS The Company plans to make capital investments of
approximately $6,000,000 for investments in
technology, processes and equipment in 1995. The
Company is planning on making approximately
$6,000,000 in capital investments in 1996. During
the Fourth Quarter, they may make deposits on
equipment to be delivered in 1996. 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 a 12.7 percent rate during
the first nine months of 1995. Business activity
has increased during the third quarter which
should provide double digit growth for the year.
Earnings for the same period are up 58.3 percent
compared to net income for the same period 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.
None.
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: November 15, 1995
ASTRONICS CORPORATION
______________________________
By John M. Yessa
____________________________
(Signature)
John M. Yessa
Vice President-Finance and
Treasurer
<PAGE>
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