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Mar 28, 2020
Astronics Q1 2020 Earnings Report
Reported financial results for the first quarter of 2020, which were impacted by COVID-19 and the grounding of the 737 MAX.
Key Takeaways
Astronics Corporation reported a challenging first quarter in 2020, with sales of $157.6 million and a net loss of $67.0 million, which included impairment charges of $74.4 million due to the impact of COVID-19 on the aerospace segment. The company has taken significant actions to reduce costs and maintain cash flow, expecting to be cash positive even with a potential 30% to 35% decline in sales from 2019.
Sales for the quarter were $157.6 million with bookings of $167.4 million.
Net loss was ($67.0) million, after impairment charges of $74.4 million.
Adjusted EBITDA was $16.2 million or 10.3% of sales.
Amended credit facility suspends leverage covenant and accommodates for challenging environment.
Astronics
Astronics
Astronics Revenue by Segment
Revenue by Segment
Aerospace Revenue
CapyFin.comTest Systems Revenue
CapyFin.com Forward Guidance
Astronics anticipates a potential revenue decline of 30% to 35% from 2019, while aiming to remain cash positive with adjusted EBITDA in the range of 5% to 9%. Capital expenditures for 2020 are expected to be approximately $8 million.
Positive Outlook
- Management believes it has structured the Company to be cash positive at this level.
- Adjusted EBITDA in the range of 5% to 9% is expected.
- Capital expenditures for 2020 are expected to be approximately $8 million.
- The company believes that its revised lending agreement, along with the actions it has taken, positions it well to operate through the COVID-19 pandemic.
- The defense and government business appears strong.
Challenges Ahead
- Revenue could drop 30% to 35% from 2019.
- Aircraft build rates are expected to drop.
- The airline aftermarket is expected to weaken considerably.
- The commercial transport market is expected to be significantly impacted by the COVID-19 pandemic.
- Impairment charges were recognized in the current quarter due to reduced expectations of future operating results due to the COVID-19 pandemic, which has significantly impacted the global economy, and particularly the aerospace industry.
Revenue & Expenses
Visualization of income flow from segment revenue to net income