• Revenue: $208.5 million for Q4 2024, near all-time high.
• Adjusted Operating Income: 11.4% for Q4, up from 5.9% last year.
• Adjusted Net Income: 8.1% for Q4, up from 3.3% last year.
• Adjusted EBITDA: $31.5 million or 15.1% of sales for Q4.
• Cash from Operations: $26.4 million for Q4, first significant positive cash quarter since pre-pandemic.
• Aerospace Segment Sales: $188.5 million, an all-time high, up 11.7% for Q4.
• Aerospace Adjusted Operating Margin: 16% for Q4, up from 10.2% last year.
• Gross Margin: Expanded 3.5 points to 24.0% over the prior year quarter.
• Net Debt: Approximately $157 million, down $18 million from the prior quarter.
• Backlog: $599 million at year-end.
• Q4 Bookings: $196 million, book-to-bill ratio of 0.94.
• Non-GAAP Adjusted Earnings Per Share: $0.48 for Q4, compared to $0.19 last year.
• Capital Expenditures for 2025: Expected to be $35 million to $40 million.

• Warning! GuruFocus has detected 4 Warning Signs with ATRO.

Release Date: March 04, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Astronics Corp (NASDAQ:ATRO) reported strong fourth-quarter sales of $208.5 million, reaching the high end of their forecasted range.
• The Aerospace segment achieved record sales of $188.5 million, marking an 11.7% increase over the previous year.
• Adjusted operating income for the quarter improved to 11.4%, up from 5.9% last year, indicating enhanced operational efficiency.
• The company generated $26.4 million in cash from operations, marking its first significantly positive cash quarter since before the pandemic.
• Astronics Corp (NASDAQ:ATRO) ended the year with a backlog of $599 million, reflecting strong demand and future growth potential.

Negative Points

• The Boeing strike negatively impacted bookings by approximately $10 million in both the third and fourth quarters.
• The company incurred $12 million in atypical SG&A costs, including legal expenses and restructuring charges.
• Astronics Corp (NASDAQ:ATRO) faced a $4.8 million increase in their legal settlement reserve due to a patent infringement dispute in the U.K.
• The Test segment experienced a weak performance, with restructuring charges and anticipated weak first-half results for 2025.
• The company is dealing with ongoing legal proceedings in multiple countries, which could result in further financial liabilities.

Q & A Highlights

Q: Could you talk about the potential for other open-ended cases to have damages claims similar to the U.K. case? A: Peter Gundermann, CEO: It's uncertain. In France, if the appeal court maintains the dismissal, we are done there. If not, it could lead to further litigation. In Germany, the patent validity is not in question, but damages are. The U.K. ruling was favorable, and we hope for similar outcomes in other jurisdictions.

Q: Could you elaborate on the increased CapEx for this year and the expected cash flow cadence? A: Nancy Hedges, CFO: CapEx will be level-loaded throughout the year, primarily driven by facility consolidation and deferred maintenance. We've been on a tight budget for years, but with improved liquidity, we're investing in necessary areas to support business growth.

Q: Any thoughts on military programs and potential defense budget changes? A: Peter Gundermann, CEO: We have three major military program categories: spare parts for existing aircraft, work on small drone-like aircraft, and the FLRAA program. We believe these programs have strong support and are unlikely to be affected by budget reallocations.

Q: Can you provide insights into the Aero/Test split for 2025 and margin expectations? A: Peter Gundermann, CEO: We expect a 90-10 split between Aero and Test. Aero margins are strong, with potential upside if Boeing exceeds production forecasts. The Test segment's performance will depend on the timing of the Army radio test program.

Q: What are your expectations regarding tariffs and their impact? A: Peter Gundermann, CEO: The situation is fluid, but our supply chain has minimized dependence on China. Most contracts should obligate buyers to pay tariffs, so we don't foresee a significant impact.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.