Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jul. 01, 2017shares | |
Document Information | |
Entity Registrant Name | ASTRONICS CORP |
Trading Symbol | ATRO |
Entity Central Index Key | 8,063 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Document Type | 10-Q |
Document Period End Date | Jul. 1, 2017 |
Document Fiscal Year Focus | 2,017 |
Document Fiscal Period Focus | Q2 |
Amendment Flag | false |
Common Class Undefined | |
Document Information | |
Entity Common Stock, Shares Outstanding | 21,685,182 |
Convertible Class B Stock | |
Document Information | |
Entity Common Stock, Shares Outstanding | 7,016,162 |
Consolidated Condensed Balance
Consolidated Condensed Balance Sheets - USD ($) $ in Thousands | Jul. 01, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash and Cash Equivalents | $ 8,268 | $ 17,901 |
Accounts Receivable, Net of Allowance for Doubtful Accounts | 120,380 | 109,415 |
Inventories | 134,423 | 116,597 |
Prepaid Expenses and Other Current Assets | 14,444 | 11,160 |
Total Current Assets | 277,515 | 255,073 |
Property, Plant and Equipment, Net of Accumulated Depreciation | 122,646 | 122,812 |
Other Assets | 15,738 | 13,149 |
Intangible Assets, Net of Accumulated Amortization | 94,364 | 98,103 |
Goodwill | 117,565 | 115,207 |
Total Assets | 627,828 | 604,344 |
Current Liabilities: | ||
Current Maturities of Long-term Debt | 2,651 | 2,636 |
Accounts Payable | 30,840 | 25,070 |
Accrued Expenses and Other Current Liabilities | 30,504 | 35,686 |
Customer Advance Payments and Deferred Revenue | 20,095 | 23,168 |
Total Current Liabilities | 84,090 | 86,560 |
Long-term Debt | 160,315 | 145,484 |
Other Liabilities | 35,700 | 34,851 |
Total Liabilities | 280,105 | 266,895 |
Shareholders’ Equity: | ||
Common Stock | 297 | 297 |
Accumulated Other Comprehensive Loss | (12,741) | (15,494) |
Other Shareholders’ Equity | 360,167 | 352,646 |
Total Shareholders’ Equity | 347,723 | 337,449 |
Total Liabilities and Shareholders’ Equity | $ 627,828 | $ 604,344 |
Consolidated Condensed Statemen
Consolidated Condensed Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
Income Statement [Abstract] | ||||
Sales | $ 151,114 | $ 164,426 | $ 303,510 | $ 323,956 |
Cost of Products Sold | 116,964 | 119,591 | 231,043 | 239,638 |
Gross Profit | 34,150 | 44,835 | 72,467 | 84,318 |
Selling, General and Administrative Expenses | 22,401 | 22,224 | 44,094 | 44,108 |
Income from Operations | 11,749 | 22,611 | 28,373 | 40,210 |
Interest Expense, Net of Interest Income | 1,180 | 1,056 | 2,313 | 2,143 |
Income Before Income Taxes | 10,569 | 21,555 | 26,060 | 38,067 |
Provision for Income Taxes | 2,884 | 6,575 | 6,788 | 11,602 |
Net Income | $ 7,685 | $ 14,980 | $ 19,272 | $ 26,465 |
Earnings Per Share: | ||||
Basic (in usd per share) | $ 0.27 | $ 0.51 | $ 0.66 | $ 0.90 |
Diluted (in usd per share) | $ 0.26 | $ 0.50 | $ 0.64 | $ 0.87 |
Consolidated Condensed Stateme4
Consolidated Condensed Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 7,685 | $ 14,980 | $ 19,272 | $ 26,465 |
Other Comprehensive Income: | ||||
Foreign Currency Translation Adjustments | 2,096 | (511) | 2,491 | 1,305 |
Retirement Liability Adjustment – Net of Tax | 131 | 130 | 262 | 261 |
Other Comprehensive Income | 2,227 | (381) | 2,753 | 1,566 |
Comprehensive Income | $ 9,912 | $ 14,599 | $ 22,025 | $ 28,031 |
Consolidated Condensed Stateme5
Consolidated Condensed Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 01, 2017 | Jul. 02, 2016 | |
Cash Flows From Operating Activities: | ||
Net Income | $ 19,272 | $ 26,465 |
Adjustments to Reconcile Net Income to Cash Provided By Operating Activities: | ||
Depreciation and Amortization | 12,587 | 13,146 |
Provisions for Non-Cash Losses on Inventory and Receivables | 918 | 928 |
Stock Compensation Expense | 1,456 | 1,256 |
Deferred Tax Benefit | (536) | (980) |
Other | (804) | 320 |
Cash Flows from Changes in Operating Assets and Liabilities: | ||
Accounts Receivable | (7,076) | (10,860) |
Inventories | (10,453) | (4,145) |
Accounts Payable | 3,349 | (10) |
Accrued Expenses | (7,106) | (3,643) |
Other Current Assets and Liabilities | (2,668) | 32 |
Customer Advanced Payments and Deferred Revenue | (4,143) | (9,992) |
Income Taxes | (1,028) | 10,107 |
Supplemental Retirement and Other Liabilities | 758 | 695 |
Cash Provided By Operating Activities | 4,526 | 23,319 |
Cash Flows From Investing Activities: | ||
Acquisition of Business, Net of Cash Acquired | (10,223) | 0 |
Capital Expenditures | (5,750) | (6,176) |
Other Investing Activities | 186 | (850) |
Cash Used For Investing Activities | (15,787) | (7,026) |
Cash Flows From Financing Activities: | ||
Proceeds from Long-term Debt | 22,000 | 15,000 |
Payments for Long-term Debt | (7,341) | (18,279) |
Purchase of Outstanding Shares for Treasury | (13,524) | (12,154) |
Debt Acquisition Costs | 0 | (164) |
Proceeds from Exercise of Stock Options | 317 | 557 |
Income Tax Benefit from Exercise of Stock Options | 0 | 529 |
Cash Provided By (Used For) Financing Activities | 1,452 | (14,511) |
Effect of Exchange Rates on Cash | 176 | 68 |
(Decrease) Increase in Cash and Cash Equivalents | (9,633) | 1,850 |
Cash and Cash Equivalents at Beginning of Period | 17,901 | 18,561 |
Cash and Cash Equivalents at End of Period | $ 8,268 | $ 20,411 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jul. 01, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. All 2016 share quantities and per share data reported have been restated to reflect the impact of the three-for-twenty Class B stock distribution to shareholders of record on October 11, 2016 . Operating Results The results of operations for any interim period are not necessarily indicative of results for the full year. Operating results for the six months ended July 1, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017 . The balance sheet at December 31, 2016 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. For further information, refer to the financial statements and footnotes thereto included in Astronics Corporation’s 2016 annual report on Form 10-K. Description of the Business Astronics Corporation (“Astronics” or the “Company”) is a leading supplier of products to the global aerospace, defense, electronics and semiconductor industries. Our products and services include advanced, high-performance electrical power generation, distribution and motion systems, lighting & safety systems, avionics products, aircraft structures, systems certification, automated test systems and other products. We have operations in the United States (“U.S.”), Canada and France. We design and build our products through our wholly owned subsidiaries Armstrong Aerospace, Inc. (“Armstrong”); Astronics Advanced Electronic Systems Corp. (“AES”); Astronics AeroSat Corporation (“AeroSat”); Ballard Technology, Inc. (“Ballard”); Astronics DME LLC (“DME”); Luminescent Systems, Inc. (“LSI”); Luminescent Systems Canada, Inc. (“LSI Canada”); Max-Viz, Inc. (“Max-Viz”); Peco, Inc. (“Peco”); PGA Electronic s.a. (“PGA”) and Astronics Test Systems, Inc. (“ATS”). On April 3, 2017, Astronics Custom Control Concepts Inc. ("CCC") acquired all of the assets and certain liabilities of Custom Control Concepts LLC. Cost of Products Sold, Engineering and Development and Selling, General and Administrative Expenses Cost of products sold includes the costs to manufacture products such as direct materials and labor and manufacturing overhead as well as all engineering and development costs. The Company is engaged in a variety of engineering and design activities as well as basic research and development activities directed to the substantial improvement or new application of the Company’s existing technologies. These costs are expensed when incurred and included in cost of products sold. Research and development, design and related engineering amounted to $23.0 million and $21.4 million for the three months ended and $45.8 million and $44.6 million for the six months ended July 1, 2017 and July 2, 2016 , respectively. Selling, general and administrative expenses include costs primarily related to our sales and marketing departments and administrative departments. Interest expense is shown net of interest income. Interest income was insignificant for the three and six months ended July 1, 2017 and July 2, 2016 . Foreign Currency Translation The aggregate transaction gain or loss included in operations was insignificant for the three and six months ended July 1, 2017 and July 2, 2016 . Accounting Pronouncements Adopted in 2017 On January 1, 2017, the Company adopted Accounting Standards Update (“ASU”) No. 2016-09, Improvements to Employee Share-Based Payment Accounting . Prospectively, beginning January 1, 2017, excess tax benefits/deficiencies are reflected as income tax benefit/expense in the statement of income, resulting in a $0.3 million tax benefit for the six months ended July 1, 2017. The extent of excess tax benefits/deficiencies is subject to variation in the Company’s stock price and timing/extent of employee stock option exercises. Under previous accounting guidance, when a share-based payment award such as a stock option was granted to an employee, the fair value of the award was generally recognized over the vesting period. However, the related deduction from taxes payable was based on the award’s intrinsic value at the time of exercise, which could be either greater (creating an excess tax benefit) or less (creating a tax deficiency) than the compensation cost recognized in the financial statements. Excess tax benefits were recognized in additional paid-in capital (“APIC”) within equity, while deficiencies were first recorded to APIC to the extent previously recognized excess tax benefits existed, after which time deficiencies were recorded to income tax expense. The Company’s adoption of this ASU also resulted in associated excess tax benefits being classified as an operating activity in the same manner as other cash flows related to income taxes in the statement of cash flows prospectively beginning January 1, 2017. Based on the adoption methodology applied, the statement of cash flows classification of prior periods has not changed. As permitted by the ASU, the Company has elected to account for forfeitures as they occur. None of the other provisions in this amended guidance had a significant impact on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment . Under the new standard, goodwill impairment would be measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying value of goodwill. This ASU eliminates existing guidance that requires an entity to determine goodwill impairment by calculating the implied fair value of goodwill by hypothetically assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. This ASU is effective prospectively to annual and interim impairment tests beginning after December 15, 2019, with early adoption permitted. The adoption of ASU 2017-04 on January 1, 2017 had no impact on the financial statements as of or for the three or six months ended July 1, 2017, as there was no impairment analysis performed during the period. |
Inventories
Inventories | 6 Months Ended |
Jul. 01, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories are as follows: (In thousands) July 1, December 31, Finished Goods $ 31,140 $ 28,792 Work in Progress 27,888 20,790 Raw Material 75,395 67,015 $ 134,423 $ 116,597 |
Property, Plant and Equipment
Property, Plant and Equipment | 6 Months Ended |
Jul. 01, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment The following table summarizes Property, Plant and Equipment as follows: (In thousands) July 1, December 31, Land $ 11,189 $ 11,112 Buildings and Improvements 79,941 79,191 Machinery and Equipment 100,524 93,683 Construction in Progress 7,281 8,182 198,935 192,168 Less Accumulated Depreciation 76,289 69,356 $ 122,646 $ 122,812 |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jul. 01, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets The following table summarizes acquired intangible assets as follows: July 1, 2017 December 31, 2016 (In thousands) Weighted Average Life Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Patents 4 Years $ 2,146 $ 1,544 $ 2,146 $ 1,450 Non-compete Agreement 3 Years 2,500 1,229 2,500 979 Trade Names 7 Years 10,433 3,626 10,189 3,153 Completed and Unpatented Technology 5 Years 25,207 10,481 24,118 9,221 Backlog Less than 1 Year 11,384 11,277 11,224 11,224 Customer Relationships 11 Years 97,245 26,394 97,046 23,093 Total Intangible Assets 5 Years $ 148,915 $ 54,551 $ 147,223 $ 49,120 All acquired intangible assets other than goodwill and one trade name are being amortized. Amortization expense for acquired intangibles is summarized as follows: Six Months Ended Three Months Ended (In thousands) July 1, July 2, July 1, July 2, Amortization Expense $ 5,340 $ 5,607 $ 2,722 $ 2,799 Amortization expense for acquired intangible assets expected for 2017 and for each of the next five years is summarized as follows: (In thousands) 2017 $ 10,756 2018 10,314 2019 9,935 2020 9,379 2021 9,333 2022 8,937 |
Goodwill
Goodwill | 6 Months Ended |
Jul. 01, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The following table summarizes the changes in the carrying amount of goodwill for the six months ended July 1, 2017 : (In thousands) December 31, Acquisition Foreign Currency Translation July 1, Aerospace $ 115,207 $ 1,804 $ 554 $ 117,565 Test Systems — — — — $ 115,207 $ 1,804 $ 554 $ 117,565 |
Long-term Debt and Notes Payabl
Long-term Debt and Notes Payable | 6 Months Ended |
Jul. 01, 2017 | |
Debt Disclosure [Abstract] | |
Long-term Debt and Notes Payable | Long-term Debt and Notes Payable The Company’s obligations under the Credit Agreement as amended are jointly and severally guaranteed by each domestic subsidiary of the Company other than a non-material subsidiary. The obligations are secured by a first priority lien on substantially all of the Company’s and the guarantors’ assets. The Company's Credit Agreement consists of a $350 million revolving credit line with the option to increase the line by up to $150 million . On January 13, 2016, the Company amended the Agreement to add a new lender and extend the maturity date of the credit facility from September 26, 2019 to January 13, 2021 . At July 1, 2017 , there was $152.0 million outstanding on the revolving credit facility and there remains $196.9 million available, net of outstanding letters of credit. The credit facility allocates up to $20 million of the $350 million revolving credit line for the issuance of letters of credit, including certain existing letters of credit. At July 1, 2017 , outstanding letters of credit totaled $1.1 million . The maximum permitted leverage ratio of funded debt to Adjusted EBITDA (as defined in the Agreement) is 3.5 to 1, increasing to 4.0 to 1 for up to two fiscal quarters following the closing of an acquisition permitted under the Agreement. The Company’s leverage ratio was 1.77 to 1 at July 1, 2017 . The Company will pay interest on the unpaid principal amount of the facility at a rate equal to one-, three- or six-month LIBOR plus between 137.5 basis points and 225 basis points based upon the Company’s leverage ratio. The Company will also pay a commitment fee to the lenders in an amount equal to between 17.5 basis points and 35 basis points on the undrawn portion of the credit facility, based upon the Company’s leverage ratio. The Company must also maintain a minimum interest coverage ratio (Adjusted EBITDA to interest expense) of 3.0 to 1 for the term of the Agreement. The Company’s interest coverage ratio was 24.2 to 1 at July 1, 2017 . In the event of voluntary or involuntary bankruptcy of the Company or any subsidiary, all unpaid principal and other amounts owing under the Agreement automatically become due and payable. Other events of default, such as failure to make payments as they become due and breach of financial and other covenants, change of control, judgments over a certain amount, and cross default under other agreements give the Agent the option to declare all such amounts immediately due and payable. |
Product Warranties
Product Warranties | 6 Months Ended |
Jul. 01, 2017 | |
Product Warranties Disclosures [Abstract] | |
Product Warranties | Product Warranties In the ordinary course of business, the Company warrants its products against defects in design, materials and workmanship typically over periods ranging from 12 to 60 months . The Company determines warranty reserves needed by product line based on experience and current facts and circumstances. Activity in the warranty accrual is summarized as follows: Six Months Ended Three Months Ended (In thousands) July 1, July 2, July 1, July 2, Balance at Beginning of Period $ 4,675 $ 5,741 $ 4,357 $ 5,122 Acquisitions 359 — 359 — Warranties Issued 832 1,206 365 545 Warranties Settled (1,224 ) (1,290 ) (517 ) (405 ) Reassessed Warranty Exposure (5 ) (296 ) 73 99 Balance at End of Period $ 4,637 $ 5,361 $ 4,637 $ 5,361 |
Income Taxes
Income Taxes | 6 Months Ended |
Jul. 01, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective tax rates were approximately 26.0% and 30.5% for the six months ended and 27.3% and 30.5% for the three months ended July 1, 2017 and July 2, 2016 , respectively. The 2017 tax rates were favorably impacted relative to the statutory rate by excess tax benefits associated with the exercise of stock options, decreases in foreign tax rates, and from the federal research and development tax credit. |
Shareholders' Equity
Shareholders' Equity | 6 Months Ended |
Jul. 01, 2017 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity The changes in shareholders’ equity for the six months ended July 1, 2017 are summarized as follows: Number of Shares (Dollars and Shares in thousands) Amount Common Stock Convertible Class B Stock Shares Authorized 40,000 15,000 Share Par Value $ 0.01 $ 0.01 COMMON STOCK Beginning of Period $ 297 21,955 7,665 Conversion of Class B Shares to Common Shares — 686 (686 ) Exercise of Stock Options — 17 37 End of Period $ 297 22,658 7,016 ADDITIONAL PAID IN CAPITAL Beginning of Period $ 64,752 Stock Compensation Expense 1,456 Exercise of Stock Options 317 End of Period $ 66,525 ACCUMULATED OTHER COMPREHENSIVE LOSS Beginning of Period $ (15,494 ) Foreign Currency Translation Adjustment 2,491 Retirement Liability Adjustment – Net of Tax 262 End of Period $ (12,741 ) RETAINED EARNINGS Beginning of Period $ 305,512 Net Income 19,272 End of Period $ 324,784 TREASURY STOCK Beginning of Period $ (17,618 ) (523 ) Purchase (13,524 ) (450 ) End of Period $ (31,142 ) (973 ) TOTAL SHAREHOLDERS’ EQUITY Beginning of Period $ 337,449 End of Period $ 347,723 21,685 7,016 On February 24, 2016, the Company’s Board of Directors authorized the repurchase of up to $50 million of common stock (the “Buyback Program”). The Buyback Program allows the Company to purchase shares of its common stock in accordance with applicable securities laws on the open market or through privately negotiated transactions. The Buyback Program may be suspended or discontinued at any time. Under this program, the Company has repurchased approximately 973,000 shares for $31.1 million . |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jul. 01, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic and diluted weighted-average shares outstanding are as follows: Six Months Ended Three Months Ended (In thousands) July 1, July 2, July 1, July 2, Weighted Average Shares - Basic 29,007 29,330 28,911 29,264 Net Effect of Dilutive Stock Options 1,128 960 1,178 962 Weighted Average Shares - Diluted 30,135 30,290 30,089 30,226 The 2016 information above has been adjusted to reflect the impact of the three-for-twenty Class B stock distribution to shareholders of record on October 11, 2016 . Stock options with exercise prices greater than the average market price of the underlying common shares are excluded from the computation of diluted earnings per share because they are out-of-the-money and the effect of their inclusion would be anti-dilutive. The number of common shares covered by out-of-the-money stock options at July 1, 2017 was approximately 474,000 shares. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss and Other Comprehensive Loss | 6 Months Ended |
Jul. 01, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss and Other Comprehensive Loss | Accumulated Other Comprehensive Loss and Other Comprehensive Loss The components of accumulated other comprehensive loss are as follows: (In thousands) July 1, December 31, Foreign Currency Translation Adjustments $ (6,106 ) $ (8,597 ) Retirement Liability Adjustment – Before Tax (10,208 ) (10,611 ) Tax Benefit 3,573 3,714 Retirement Liability Adjustment – After Tax (6,635 ) (6,897 ) Accumulated Other Comprehensive Loss $ (12,741 ) $ (15,494 ) The components of other comprehensive income are as follows: Six Months Ended Three Months Ended (In thousands) July 1, July 2, July 1, July 2, Foreign Currency Translation Adjustments $ 2,491 $ 1,305 $ 2,096 $ (511 ) Retirement Liability Adjustments: Reclassifications to General and Administrative Expense: Amortization of Prior Service Cost 202 219 102 109 Amortization of Net Actuarial Losses 201 183 99 92 Tax Benefit (141 ) (141 ) (70 ) (71 ) Retirement Liability Adjustment 262 261 131 130 Other Comprehensive Income $ 2,753 $ 1,566 $ 2,227 $ (381 ) |
Supplemental Retirement Plan an
Supplemental Retirement Plan and Related Post Retirement Benefits | 6 Months Ended |
Jul. 01, 2017 | |
Retirement Benefits [Abstract] | |
Supplemental Retirement Plan and Related Post Retirement Benefits | Supplemental Retirement Plan and Related Post Retirement Benefits The Company has two non-qualified supplemental retirement defined benefit plans (“SERP” and “SERP II”) for certain executive officers. The following table sets forth information regarding the net periodic pension cost for the plans. Six Months Ended Three Months Ended (In thousands) July 1, July 2, July 1, July 2, Service Cost $ 92 $ 86 $ 46 $ 43 Interest Cost 448 450 224 225 Amortization of Prior Service Cost 194 207 97 103 Amortization of Net Actuarial Losses 186 172 93 86 Net Periodic Cost $ 920 $ 915 $ 460 $ 457 Participants in the SERP are entitled to paid medical, dental and long-term care insurance benefits upon retirement under the plan. The following table sets forth information regarding the net periodic cost recognized for those benefits: Six Months Ended Three Months Ended (In thousands) July 1, July 2, July 1, July 2, Service Cost $ 4 $ 2 $ 2 $ 1 Interest Cost 20 20 10 10 Amortization of Prior Service Cost 8 12 5 6 Amortization of Net Actuarial Losses 15 11 6 6 Net Periodic Cost $ 47 $ 45 $ 23 $ 23 |
Sales to Major Customers
Sales to Major Customers | 6 Months Ended |
Jul. 01, 2017 | |
Risks and Uncertainties [Abstract] | |
Sales to Major Customers | Sales to Major Customers The Company has a significant concentration of business with two major customers, each in excess of 10% of consolidated sales. The loss of either of these customers would significantly, negatively impact our sales and earnings. Sales to these two customers represented 20% and 18% of consolidated sales for the six months ended and 16% and 18% for the three months ended July 1, 2017 . Sales to these customers were in the Aerospace segment. Accounts receivable from these customers at July 1, 2017 was approximately $32.1 million . Sales to these two customers represented 22% and 15% of consolidated sales for the six months ended and 21% and 16% for the three months ended July 2, 2016 . |
Legal Proceedings
Legal Proceedings | 6 Months Ended |
Jul. 01, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | Legal Proceedings The Company is subject to various legal proceedings, claims, and litigation arising in the ordinary course of business. While the outcome of these matters is currently not determinable, we do not expect these matters will have a material adverse effect on our business, financial position, results of operations, or cash flows. However, the results of these matters cannot be predicted with certainty. Should the Company fail to prevail in any legal matter or should several legal matters be resolved against the Company in the same reporting period, then the financial results of that particular reporting period could be materially adversely affected. On December 29, 2010, Lufthansa Technik AG (“Lufthansa”) filed a Statement of Claim in the Regional State Court of Mannheim, Germany. Lufthansa’s claim asserts that our subsidiary, AES sold, marketed and brought into use in Germany a power supply system that infringes upon a German patent held by Lufthansa. The relief sought by Lufthansa includes requiring AES to stop selling and marketing the allegedly infringing power supply system, a recall of allegedly infringing products sold to commercial customers since November 26, 2003 and compensation for damages. The claim does not specify an estimate of damages and a damages claim would be pursued by Lufthansa in separate court proceedings. On February 6, 2015, the Regional State Court of Mannheim, Germany rendered its decision that the patent was infringed. The judgment does not require AES to recall products that are already installed in aircraft or have been sold to other end users. On July 15, 2015, Lufthansa advised AES of their intention to enforce the accounting provisions of the decision, which required AES to provide certain financial information regarding sales of the infringing product to enable Lufthansa to make an estimate of requested damages. Additionally, if Lufthansa provides the required bank guarantee specified in the decision, the Company may be required to offer a recall of products that are in the distribution channels in Germany. No such bank guarantee has been issued to date. As of July 1, 2017, there are no products in the distribution channels in Germany. The Company appealed to the Higher Regional Court of Karlsruhe. On November 15, 2016, the Court issued its ruling and upheld the lower court’s decision. The Company has submitted a petition to grant AES leave for appeal to the Federal Supreme Court. The Company believes it has valid defenses to refute the decision. Should the Federal Supreme Court decide to hear the case, the appeal process is estimated to extend up to two years . We estimate AES’s potential exposure related to this matter to be approximately $1 million to $3 million . As loss exposure is not probable at this time, the Company has not recorded any liability with respect to this litigation as of July 1, 2017 . On November 26, 2014, Lufthansa filed a complaint in the United States District for the Western District of Washington. Lufthansa’s complaint in this action alleges that AES manufactures, uses, sells and offers for sale a power supply system that infringes upon a U.S. patent held by Lufthansa. The patent at issue in the U.S. action is based on technology similar to that involved in the German action. On April 25, 2016, the Court issued its ruling on claim construction, holding that the sole independent claim in the patent is indefinite, rendering all claims in the patent indefinite. Based on this ruling, AES filed a motion for summary judgment on the grounds that the Court’s ruling that the patent is indefinite renders the patent invalid and unenforceable. On July 20, 2016, the U.S. District Court granted the motion for summary judgment and issued an order dismissing all claims against AES with prejudice. Lufthansa has filed an appeal with the United States Court of Appeals for the Federal Circuit. The Company believes that it has valid defenses to Lufthansa’s claims and will vigorously contest the appeal. As loss exposure is neither probable nor estimable at this time, the Company has not recorded any liability with respect to this litigation as of July 1, 2017 . |
Segment Information
Segment Information | 6 Months Ended |
Jul. 01, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Below are the sales and operating profit by segment for the six months ended July 1, 2017 and July 2, 2016 and a reconciliation of segment operating profit to income before income taxes. Operating profit is net sales less cost of products sold and other operating expenses excluding interest and corporate expenses. Cost of products sold and other operating expenses are directly identifiable to the respective segment. Six Months Ended Three Months Ended (Dollars in thousands) July 1, July 2, July 1, July 2, Sales Aerospace $ 266,374 $ 281,177 $ 129,547 $ 142,528 Less Intersegment Sales — (367 ) — (27 ) Total Aerospace Sales 266,374 280,810 129,547 142,501 Total Test Systems Sales 37,136 43,146 21,567 21,925 Total Consolidated Sales $ 303,510 $ 323,956 $ 151,114 $ 164,426 Operating Profit and Margins Aerospace $ 33,738 $ 43,542 $ 13,984 $ 24,851 12.7 % 15.5 % 10.8 % 17.4 % Test Systems 1,750 3,284 1,432 1,074 4.7 % 7.6 % 6.6 % 4.9 % Total Operating Profit 35,488 46,826 15,416 25,925 11.7 % 14.5 % 10.2 % 15.8 % Deductions from Operating Profit Interest Expense, Net of Interest Income 2,313 2,143 1,180 1,056 Corporate Expenses and Other 7,115 6,616 3,667 3,314 Income Before Income Taxes $ 26,060 $ 38,067 $ 10,569 $ 21,555 Total Assets: (In thousands) July 1, December 31, Aerospace $ 529,369 $ 500,892 Test Systems 77,382 76,575 Corporate 21,077 26,877 Total Assets $ 627,828 $ 604,344 |
Fair Value
Fair Value | 6 Months Ended |
Jul. 01, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value A fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. Fair value is based upon an exit price model. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and involves consideration of factors specific to the asset or liability. The Company follows a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. On a Recurring Basis: A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The financial liabilities carried at fair value measured on a recurring basis consisted of contingent consideration related to a prior acquisition, valued at zero at December 31, 2016 , determined using Level 3 inputs. This arrangement has expired and as of July 1, 2017 there are no financial liabilities carried at fair value measured on a recurring basis. There were no financial assets carried at fair value measured on a recurring basis at December 31, 2016 or July 1, 2017 . On a Non-recurring Basis: The Company estimates the fair value of reporting units, utilizing unobservable Level 3 inputs. Level 3 inputs require significant management judgment due to the absence of quoted market prices or observable inputs for assets of a similar nature. The Company utilizes a discounted cash flow analysis to estimate the fair value of reporting units utilizing unobservable inputs. The fair value measurement of the reporting unit under the step-one and step-two analysis of the quantitative goodwill impairment test are classified as Level 3 inputs. Intangible assets that are amortized are evaluated for recoverability whenever adverse effects or changes in circumstances indicate that the carrying value may not be recoverable. The recoverability test consists of comparing the undiscounted projected cash flows with the carrying amount. Should the carrying amount exceed undiscounted projected cash flows, an impairment loss would be recognized to the extent the carrying amount exceeds fair value. For the Company’s indefinite-lived intangible asset, the impairment test consists of comparing the fair value, determined using the relief from royalty method, with its carrying amount. An impairment loss would be recognized for the carrying amount in excess of its fair value. At July 1, 2017 , the fair value of goodwill and intangible assets classified using Level 3 inputs are comprised of the CCC goodwill and intangible assets acquired on April 3, 2017 , which are currently valued based on management’s best estimates. When the accounting for the acquisition is finalized, these intangible assets will be valued using discounted cash flow methodology. Due to their short-term nature, the carrying value of cash and equivalents, accounts receivable, accounts payable, and notes payable approximate fair value. The carrying value of the Company’s variable rate long-term debt instruments also approximates fair value due to the variable rate feature of these instruments. As of July 1, 2017 , the Company concluded that no indicators of impairment relating to intangible assets or goodwill existed and an interim test was not performed. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jul. 01, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-9, Revenue from Contracts with Customers . This new standard is effective for reporting periods beginning after December 15, 2017, pursuant to the issuance of ASU 2015-14, Revenue from Contracts with Customers: Deferral of Effective Date issued in August 2015. The comprehensive new standard will supersede existing revenue recognition guidance and require revenue to be recognized when promised goods or services are transferred to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. Adoption of the new rules could affect the timing of revenue recognition for certain transactions. The guidance permits two implementation approaches, one requiring retrospective application of the new standard with restatement of prior years and one requiring prospective application of the new standard with disclosure of results under old standards. The Company will adopt the new standard on January 1, 2018, using the modified retrospective transition method. The adoption of this amendment may require us to accelerate the recognition of revenue as compared to current standards, for certain customers, in cases where we produce products unique to those customers; and for which we would have an enforceable right of payment for production completed to date. The Company has identified its revenue streams, reviewed the initial impacts of adopting the new standard on those revenue streams, and appointed a project management leader. The Company continues to evaluate the quantitative and qualitative impacts of the standard. In February 2016, the FASB issued ASU No. 2016 - 02, Leases . The new standard is effective for reporting periods beginning after December 15, 2018. Early adoption is permitted. The standard will require lessees to report most leases as assets and liabilities on the balance sheet, while lessor accounting will remain substantially unchanged. The standard requires a modified retrospective transition approach for existing leases, whereby the new rules will be applied to the earliest year presented. The adoption of the standard is not expected to have a material effect on the Company’s financial position, results of operations or cash flows. In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments , which is intended to reduce diversity in practice in how certain cash receipts and payments are presented and classified in the statement of cash flows. The standard provides guidance in a number of situations including, among others, settlement of zero-coupon bonds, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, and distributions received from equity method investees. The ASU also provides guidance for classifying cash receipts and payments that have aspects of more than one class of cash flows. This ASU is effective for fiscal years beginning after December 15, 2017, with early adoption permitted. The standard requires application using a retrospective transition method. This ASU is not expected to have a material impact on the Company’s consolidated results of operations and financial condition. In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business , which narrows the existing definition of a business and provides a framework for evaluating whether a transaction should be accounted for as an acquisition (or disposal) of assets or a business. The ASU requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities (collectively, the set) is not a business. To be considered a business, the set would need to include an input and a substantive process that together significantly contribute to the ability to create outputs. The standard also narrows the definition of outputs. The definition of a business affects areas of accounting such as acquisitions, disposals and goodwill. Under the new guidance, fewer acquired sets are expected to be considered businesses. This ASU is effective for fiscal years beginning after December 15, 2017 on a prospective basis with early adoption permitted. The Company would apply this guidance to applicable transactions after the adoption date. In March 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which requires employers to include only the service cost component of net periodic pension cost and net periodic postretirement benefit cost in operating expenses. The other components of net benefit cost, including amortization of prior service cost/credit and net actuarial gains/losses, and settlement and curtailment effects, are to be included in non-operating expenses. The ASU also stipulates that only the service cost component of net benefit cost is eligible for capitalization. The effective date for adoption of this guidance begins on January 1, 2018, with early adoption permitted. The Company is currently evaluating the effect that this standard will have on the consolidated financial statements. |
Acquisition
Acquisition | 6 Months Ended |
Jul. 01, 2017 | |
Business Combinations [Abstract] | |
Acquisition | Acquisition Custom Control Concepts LLC On April 3, 2017 , Astronics Custom Control Concepts Inc., a wholly owned subsidiary of the Company acquired substantially all the assets and certain liabilities of Custom Control Concepts LLC (“CCC”), located in Kent, Washington. CCC is a provider of cabin management and in-flight entertainment systems for a range of aircraft. The total consideration for the transaction was approximately $10.2 million , net of $0.5 million in cash acquired. All of the goodwill and purchased intangible assets are expected to be deductible for tax purposes over 15 years . The purchase price allocation for this acquisition has not been finalized. CCC is included in our Aerospace segment. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jul. 01, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. |
Operating Results | Operating Results The results of operations for any interim period are not necessarily indicative of results for the full year. Operating results for the six months ended July 1, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017 . The balance sheet at December 31, 2016 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. |
Description of the Business | Description of the Business Astronics Corporation (“Astronics” or the “Company”) is a leading supplier of products to the global aerospace, defense, electronics and semiconductor industries. Our products and services include advanced, high-performance electrical power generation, distribution and motion systems, lighting & safety systems, avionics products, aircraft structures, systems certification, automated test systems and other products. We have operations in the United States (“U.S.”), Canada and France. We design and build our products through our wholly owned subsidiaries Armstrong Aerospace, Inc. (“Armstrong”); Astronics Advanced Electronic Systems Corp. (“AES”); Astronics AeroSat Corporation (“AeroSat”); Ballard Technology, Inc. (“Ballard”); Astronics DME LLC (“DME”); Luminescent Systems, Inc. (“LSI”); Luminescent Systems Canada, Inc. (“LSI Canada”); Max-Viz, Inc. (“Max-Viz”); Peco, Inc. (“Peco”); PGA Electronic s.a. (“PGA”) and Astronics Test Systems, Inc. (“ATS”). On April 3, 2017, Astronics Custom Control Concepts Inc. ("CCC") acquired all of the assets and certain liabilities of Custom Control Concepts LLC. |
Cost of Products Sold, Engineering and Development and Selling, General and Administrative Expenses | Cost of Products Sold, Engineering and Development and Selling, General and Administrative Expenses Cost of products sold includes the costs to manufacture products such as direct materials and labor and manufacturing overhead as well as all engineering and development costs. The Company is engaged in a variety of engineering and design activities as well as basic research and development activities directed to the substantial improvement or new application of the Company’s existing technologies. These costs are expensed when incurred and included in cost of products sold. |
Foreign Currency Translation | Foreign Currency Translation The aggregate transaction gain or loss included in operations was insignificant for the three and six months ended July 1, 2017 and July 2, 2016 . |
Accounting Pronouncements Adopted in 2017 and Recent Accounting Pronouncements | Accounting Pronouncements Adopted in 2017 On January 1, 2017, the Company adopted Accounting Standards Update (“ASU”) No. 2016-09, Improvements to Employee Share-Based Payment Accounting . Prospectively, beginning January 1, 2017, excess tax benefits/deficiencies are reflected as income tax benefit/expense in the statement of income, resulting in a $0.3 million tax benefit for the six months ended July 1, 2017. The extent of excess tax benefits/deficiencies is subject to variation in the Company’s stock price and timing/extent of employee stock option exercises. Under previous accounting guidance, when a share-based payment award such as a stock option was granted to an employee, the fair value of the award was generally recognized over the vesting period. However, the related deduction from taxes payable was based on the award’s intrinsic value at the time of exercise, which could be either greater (creating an excess tax benefit) or less (creating a tax deficiency) than the compensation cost recognized in the financial statements. Excess tax benefits were recognized in additional paid-in capital (“APIC”) within equity, while deficiencies were first recorded to APIC to the extent previously recognized excess tax benefits existed, after which time deficiencies were recorded to income tax expense. The Company’s adoption of this ASU also resulted in associated excess tax benefits being classified as an operating activity in the same manner as other cash flows related to income taxes in the statement of cash flows prospectively beginning January 1, 2017. Based on the adoption methodology applied, the statement of cash flows classification of prior periods has not changed. As permitted by the ASU, the Company has elected to account for forfeitures as they occur. None of the other provisions in this amended guidance had a significant impact on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment . Under the new standard, goodwill impairment would be measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying value of goodwill. This ASU eliminates existing guidance that requires an entity to determine goodwill impairment by calculating the implied fair value of goodwill by hypothetically assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. This ASU is effective prospectively to annual and interim impairment tests beginning after December 15, 2019, with early adoption permitted. The adoption of ASU 2017-04 on January 1, 2017 had no impact on the financial statements as of or for the three or six months ended July 1, 2017, as there was no impairment analysis performed during the period. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-9, Revenue from Contracts with Customers . This new standard is effective for reporting periods beginning after December 15, 2017, pursuant to the issuance of ASU 2015-14, Revenue from Contracts with Customers: Deferral of Effective Date issued in August 2015. The comprehensive new standard will supersede existing revenue recognition guidance and require revenue to be recognized when promised goods or services are transferred to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. Adoption of the new rules could affect the timing of revenue recognition for certain transactions. The guidance permits two implementation approaches, one requiring retrospective application of the new standard with restatement of prior years and one requiring prospective application of the new standard with disclosure of results under old standards. The Company will adopt the new standard on January 1, 2018, using the modified retrospective transition method. The adoption of this amendment may require us to accelerate the recognition of revenue as compared to current standards, for certain customers, in cases where we produce products unique to those customers; and for which we would have an enforceable right of payment for production completed to date. The Company has identified its revenue streams, reviewed the initial impacts of adopting the new standard on those revenue streams, and appointed a project management leader. The Company continues to evaluate the quantitative and qualitative impacts of the standard. In February 2016, the FASB issued ASU No. 2016 - 02, Leases . The new standard is effective for reporting periods beginning after December 15, 2018. Early adoption is permitted. The standard will require lessees to report most leases as assets and liabilities on the balance sheet, while lessor accounting will remain substantially unchanged. The standard requires a modified retrospective transition approach for existing leases, whereby the new rules will be applied to the earliest year presented. The adoption of the standard is not expected to have a material effect on the Company’s financial position, results of operations or cash flows. In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments , which is intended to reduce diversity in practice in how certain cash receipts and payments are presented and classified in the statement of cash flows. The standard provides guidance in a number of situations including, among others, settlement of zero-coupon bonds, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, and distributions received from equity method investees. The ASU also provides guidance for classifying cash receipts and payments that have aspects of more than one class of cash flows. This ASU is effective for fiscal years beginning after December 15, 2017, with early adoption permitted. The standard requires application using a retrospective transition method. This ASU is not expected to have a material impact on the Company’s consolidated results of operations and financial condition. In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business , which narrows the existing definition of a business and provides a framework for evaluating whether a transaction should be accounted for as an acquisition (or disposal) of assets or a business. The ASU requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities (collectively, the set) is not a business. To be considered a business, the set would need to include an input and a substantive process that together significantly contribute to the ability to create outputs. The standard also narrows the definition of outputs. The definition of a business affects areas of accounting such as acquisitions, disposals and goodwill. Under the new guidance, fewer acquired sets are expected to be considered businesses. This ASU is effective for fiscal years beginning after December 15, 2017 on a prospective basis with early adoption permitted. The Company would apply this guidance to applicable transactions after the adoption date. In March 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which requires employers to include only the service cost component of net periodic pension cost and net periodic postretirement benefit cost in operating expenses. The other components of net benefit cost, including amortization of prior service cost/credit and net actuarial gains/losses, and settlement and curtailment effects, are to be included in non-operating expenses. The ASU also stipulates that only the service cost component of net benefit cost is eligible for capitalization. The effective date for adoption of this guidance begins on January 1, 2018, with early adoption permitted. The Company is currently evaluating the effect that this standard will have on the consolidated financial statements. |
Fair Value | Fair Value A fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. Fair value is based upon an exit price model. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and involves consideration of factors specific to the asset or liability. The Company follows a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories are as follows: (In thousands) July 1, December 31, Finished Goods $ 31,140 $ 28,792 Work in Progress 27,888 20,790 Raw Material 75,395 67,015 $ 134,423 $ 116,597 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant and Equipment | The following table summarizes Property, Plant and Equipment as follows: (In thousands) July 1, December 31, Land $ 11,189 $ 11,112 Buildings and Improvements 79,941 79,191 Machinery and Equipment 100,524 93,683 Construction in Progress 7,281 8,182 198,935 192,168 Less Accumulated Depreciation 76,289 69,356 $ 122,646 $ 122,812 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Acquired Intangible Assets | The following table summarizes acquired intangible assets as follows: July 1, 2017 December 31, 2016 (In thousands) Weighted Average Life Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Patents 4 Years $ 2,146 $ 1,544 $ 2,146 $ 1,450 Non-compete Agreement 3 Years 2,500 1,229 2,500 979 Trade Names 7 Years 10,433 3,626 10,189 3,153 Completed and Unpatented Technology 5 Years 25,207 10,481 24,118 9,221 Backlog Less than 1 Year 11,384 11,277 11,224 11,224 Customer Relationships 11 Years 97,245 26,394 97,046 23,093 Total Intangible Assets 5 Years $ 148,915 $ 54,551 $ 147,223 $ 49,120 |
Summary of Amortization Expense for Acquired Intangibles | All acquired intangible assets other than goodwill and one trade name are being amortized. Amortization expense for acquired intangibles is summarized as follows: Six Months Ended Three Months Ended (In thousands) July 1, July 2, July 1, July 2, Amortization Expense $ 5,340 $ 5,607 $ 2,722 $ 2,799 |
Summary of Amortization Expense for Intangible Assets for Each of Next Five Years | Amortization expense for acquired intangible assets expected for 2017 and for each of the next five years is summarized as follows: (In thousands) 2017 $ 10,756 2018 10,314 2019 9,935 2020 9,379 2021 9,333 2022 8,937 |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Carrying Amount of Goodwill | The following table summarizes the changes in the carrying amount of goodwill for the six months ended July 1, 2017 : (In thousands) December 31, Acquisition Foreign Currency Translation July 1, Aerospace $ 115,207 $ 1,804 $ 554 $ 117,565 Test Systems — — — — $ 115,207 $ 1,804 $ 554 $ 117,565 |
Product Warranties (Tables)
Product Warranties (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Product Warranties Disclosures [Abstract] | |
Summary of Activity in Warranty Accrual | Activity in the warranty accrual is summarized as follows: Six Months Ended Three Months Ended (In thousands) July 1, July 2, July 1, July 2, Balance at Beginning of Period $ 4,675 $ 5,741 $ 4,357 $ 5,122 Acquisitions 359 — 359 — Warranties Issued 832 1,206 365 545 Warranties Settled (1,224 ) (1,290 ) (517 ) (405 ) Reassessed Warranty Exposure (5 ) (296 ) 73 99 Balance at End of Period $ 4,637 $ 5,361 $ 4,637 $ 5,361 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Equity [Abstract] | |
Summary of Changes in Shareholder's Equity | The changes in shareholders’ equity for the six months ended July 1, 2017 are summarized as follows: Number of Shares (Dollars and Shares in thousands) Amount Common Stock Convertible Class B Stock Shares Authorized 40,000 15,000 Share Par Value $ 0.01 $ 0.01 COMMON STOCK Beginning of Period $ 297 21,955 7,665 Conversion of Class B Shares to Common Shares — 686 (686 ) Exercise of Stock Options — 17 37 End of Period $ 297 22,658 7,016 ADDITIONAL PAID IN CAPITAL Beginning of Period $ 64,752 Stock Compensation Expense 1,456 Exercise of Stock Options 317 End of Period $ 66,525 ACCUMULATED OTHER COMPREHENSIVE LOSS Beginning of Period $ (15,494 ) Foreign Currency Translation Adjustment 2,491 Retirement Liability Adjustment – Net of Tax 262 End of Period $ (12,741 ) RETAINED EARNINGS Beginning of Period $ 305,512 Net Income 19,272 End of Period $ 324,784 TREASURY STOCK Beginning of Period $ (17,618 ) (523 ) Purchase (13,524 ) (450 ) End of Period $ (31,142 ) (973 ) TOTAL SHAREHOLDERS’ EQUITY Beginning of Period $ 337,449 End of Period $ 347,723 21,685 7,016 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted Weighted-Average Shares Outstanding | Basic and diluted weighted-average shares outstanding are as follows: Six Months Ended Three Months Ended (In thousands) July 1, July 2, July 1, July 2, Weighted Average Shares - Basic 29,007 29,330 28,911 29,264 Net Effect of Dilutive Stock Options 1,128 960 1,178 962 Weighted Average Shares - Diluted 30,135 30,290 30,089 30,226 |
Accumulated Other Comprehensi32
Accumulated Other Comprehensive Loss and Other Comprehensive Loss (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Equity [Abstract] | |
Components of Accumulated Other Comprehensive Loss | The components of accumulated other comprehensive loss are as follows: (In thousands) July 1, December 31, Foreign Currency Translation Adjustments $ (6,106 ) $ (8,597 ) Retirement Liability Adjustment – Before Tax (10,208 ) (10,611 ) Tax Benefit 3,573 3,714 Retirement Liability Adjustment – After Tax (6,635 ) (6,897 ) Accumulated Other Comprehensive Loss $ (12,741 ) $ (15,494 ) |
Components of Other Comprehensive Income | The components of other comprehensive income are as follows: Six Months Ended Three Months Ended (In thousands) July 1, July 2, July 1, July 2, Foreign Currency Translation Adjustments $ 2,491 $ 1,305 $ 2,096 $ (511 ) Retirement Liability Adjustments: Reclassifications to General and Administrative Expense: Amortization of Prior Service Cost 202 219 102 109 Amortization of Net Actuarial Losses 201 183 99 92 Tax Benefit (141 ) (141 ) (70 ) (71 ) Retirement Liability Adjustment 262 261 131 130 Other Comprehensive Income $ 2,753 $ 1,566 $ 2,227 $ (381 ) |
Supplemental Retirement Plan 33
Supplemental Retirement Plan and Related Post Retirement Benefits (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Retirement Benefits [Abstract] | |
Summary of the Components of Net Periodic Cost | The following table sets forth information regarding the net periodic pension cost for the plans. Six Months Ended Three Months Ended (In thousands) July 1, July 2, July 1, July 2, Service Cost $ 92 $ 86 $ 46 $ 43 Interest Cost 448 450 224 225 Amortization of Prior Service Cost 194 207 97 103 Amortization of Net Actuarial Losses 186 172 93 86 Net Periodic Cost $ 920 $ 915 $ 460 $ 457 Participants in the SERP are entitled to paid medical, dental and long-term care insurance benefits upon retirement under the plan. The following table sets forth information regarding the net periodic cost recognized for those benefits: Six Months Ended Three Months Ended (In thousands) July 1, July 2, July 1, July 2, Service Cost $ 4 $ 2 $ 2 $ 1 Interest Cost 20 20 10 10 Amortization of Prior Service Cost 8 12 5 6 Amortization of Net Actuarial Losses 15 11 6 6 Net Periodic Cost $ 47 $ 45 $ 23 $ 23 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Segment Reporting [Abstract] | |
Summary of Segment Reporting Information | Below are the sales and operating profit by segment for the six months ended July 1, 2017 and July 2, 2016 and a reconciliation of segment operating profit to income before income taxes. Operating profit is net sales less cost of products sold and other operating expenses excluding interest and corporate expenses. Cost of products sold and other operating expenses are directly identifiable to the respective segment. Six Months Ended Three Months Ended (Dollars in thousands) July 1, July 2, July 1, July 2, Sales Aerospace $ 266,374 $ 281,177 $ 129,547 $ 142,528 Less Intersegment Sales — (367 ) — (27 ) Total Aerospace Sales 266,374 280,810 129,547 142,501 Total Test Systems Sales 37,136 43,146 21,567 21,925 Total Consolidated Sales $ 303,510 $ 323,956 $ 151,114 $ 164,426 Operating Profit and Margins Aerospace $ 33,738 $ 43,542 $ 13,984 $ 24,851 12.7 % 15.5 % 10.8 % 17.4 % Test Systems 1,750 3,284 1,432 1,074 4.7 % 7.6 % 6.6 % 4.9 % Total Operating Profit 35,488 46,826 15,416 25,925 11.7 % 14.5 % 10.2 % 15.8 % Deductions from Operating Profit Interest Expense, Net of Interest Income 2,313 2,143 1,180 1,056 Corporate Expenses and Other 7,115 6,616 3,667 3,314 Income Before Income Taxes $ 26,060 $ 38,067 $ 10,569 $ 21,555 Total Assets: (In thousands) July 1, December 31, Aerospace $ 529,369 $ 500,892 Test Systems 77,382 76,575 Corporate 21,077 26,877 Total Assets $ 627,828 $ 604,344 |
Basis of Presentation (Details)
Basis of Presentation (Details) $ in Millions | Oct. 11, 2016 | Jul. 01, 2017USD ($) | Jul. 02, 2016USD ($) | Jul. 01, 2017USD ($) | Jul. 02, 2016USD ($) |
Business Acquisition | |||||
Research and development, design and related engineering | $ 23 | $ 21.4 | $ 45.8 | $ 44.6 | |
Excess tax benefit | $ 0.3 | ||||
Convertible Class B Stock | |||||
Business Acquisition | |||||
Common stock conversion | 0.15 | ||||
Date of payment of dividend to shareholders | Oct. 11, 2016 |
Inventories - Summary of Invent
Inventories - Summary of Inventories (Details) - USD ($) $ in Thousands | Jul. 01, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Finished Goods | $ 31,140 | $ 28,792 |
Work in Progress | 27,888 | 20,790 |
Raw Material | 75,395 | 67,015 |
Inventory, net | $ 134,423 | $ 116,597 |
Property, Plant and Equipment -
Property, Plant and Equipment - Summary of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Jul. 01, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 198,935 | $ 192,168 |
Less Accumulated Depreciation | 76,289 | 69,356 |
Property, plant and equipment, net | 122,646 | 122,812 |
Land | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 11,189 | 11,112 |
Buildings and Improvements | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 79,941 | 79,191 |
Machinery and Equipment | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 100,524 | 93,683 |
Construction in Progress | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 7,281 | $ 8,182 |
Intangible Assets - Summary of
Intangible Assets - Summary of Acquired Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 01, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets | ||
Weighted Average Life (Less than for Backlog) | 5 years | |
Gross Carrying Amount | $ 148,915 | $ 147,223 |
Accumulated Amortization | $ 54,551 | 49,120 |
Patents | ||
Finite-Lived Intangible Assets | ||
Weighted Average Life (Less than for Backlog) | 4 years | |
Gross Carrying Amount | $ 2,146 | 2,146 |
Accumulated Amortization | $ 1,544 | 1,450 |
Non-compete Agreement | ||
Finite-Lived Intangible Assets | ||
Weighted Average Life (Less than for Backlog) | 3 years | |
Gross Carrying Amount | $ 2,500 | 2,500 |
Accumulated Amortization | $ 1,229 | 979 |
Trade Names | ||
Finite-Lived Intangible Assets | ||
Weighted Average Life (Less than for Backlog) | 7 years | |
Gross Carrying Amount | $ 10,433 | 10,189 |
Accumulated Amortization | $ 3,626 | 3,153 |
Completed and Unpatented Technology | ||
Finite-Lived Intangible Assets | ||
Weighted Average Life (Less than for Backlog) | 5 years | |
Gross Carrying Amount | $ 25,207 | 24,118 |
Accumulated Amortization | $ 10,481 | 9,221 |
Backlog | ||
Finite-Lived Intangible Assets | ||
Weighted Average Life (Less than for Backlog) | 1 year | |
Gross Carrying Amount | $ 11,384 | 11,224 |
Accumulated Amortization | $ 11,277 | 11,224 |
Customer Relationships | ||
Finite-Lived Intangible Assets | ||
Weighted Average Life (Less than for Backlog) | 11 years | |
Gross Carrying Amount | $ 97,245 | 97,046 |
Accumulated Amortization | $ 26,394 | $ 23,093 |
Intangible Assets - Summary o39
Intangible Assets - Summary of Amortization Expense for Acquired Intangibles (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization Expense | $ 2,722 | $ 2,799 | $ 5,340 | $ 5,607 |
Intangible Assets - Summary o40
Intangible Assets - Summary of Amortization Expense for Intangible Assets for Each of Next Five Years (Details) $ in Thousands | Jul. 01, 2017USD ($) |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |
2,017 | $ 10,756 |
2,018 | 10,314 |
2,019 | 9,935 |
2,020 | 9,379 |
2,021 | 9,333 |
2,022 | $ 8,937 |
Goodwill - Summary of Changes i
Goodwill - Summary of Changes in Carrying Amount of Goodwill (Details) $ in Thousands | 6 Months Ended |
Jul. 01, 2017USD ($) | |
Goodwill [Roll Forward] | |
Balance at beginning of period | $ 115,207 |
Acquisition | 1,804 |
Foreign Currency Translation | 554 |
Balance at end of period | 117,565 |
Operating Segments | Aerospace | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 115,207 |
Acquisition | 1,804 |
Foreign Currency Translation | 554 |
Balance at end of period | 117,565 |
Operating Segments | Test Systems | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 0 |
Acquisition | 0 |
Foreign Currency Translation | 0 |
Balance at end of period | $ 0 |
Long-Term Debt and Notes Paya42
Long-Term Debt and Notes Payable (Details) | 6 Months Ended |
Jul. 01, 2017USD ($)fiscal_quarter | |
Debt Instrument | |
Duration of permitted leverage ratio following acquisition, number of fiscal quarters | fiscal_quarter | 2 |
Leverage ratio | 1.77 |
Interest coverage ratio | 24.2 |
Amended and Restated Credit Agreement | |
Debt Instrument | |
Maturity date of loans | Jan. 13, 2021 |
Ratio of funded debt to Adjusted EBITDA | 3.5 |
Minimum interest coverage ratio | 3 |
Amended and Restated Credit Agreement | Maximum | |
Debt Instrument | |
Ratio of funded debt to Adjusted EBITDA | 4 |
Amended and Restated Credit Agreement | Line of Credit | Revolving Credit Facility | |
Debt Instrument | |
Maximum borrowing capacity | $ 350,000,000 |
Line of credit facility increase amount | 150,000,000 |
Credit facility outstanding | 152,000,000 |
Revolving credit facility remaining | $ 196,900,000 |
Amended and Restated Credit Agreement | Line of Credit | Revolving Credit Facility | Minimum | |
Debt Instrument | |
Basis points for commitment fee | 0.175% |
Amended and Restated Credit Agreement | Line of Credit | Revolving Credit Facility | Minimum | LIBOR | |
Debt Instrument | |
Basis points for variable interest rate | 1.375% |
Amended and Restated Credit Agreement | Line of Credit | Revolving Credit Facility | Maximum | |
Debt Instrument | |
Basis points for commitment fee | 0.35% |
Amended and Restated Credit Agreement | Line of Credit | Revolving Credit Facility | Maximum | LIBOR | |
Debt Instrument | |
Basis points for variable interest rate | 2.25% |
Amended and Restated Credit Agreement | Line of Credit | Letter of Credit | |
Debt Instrument | |
Credit facility allocated (up to) | $ 20,000,000 |
Outstanding letters of credit | $ 1,100,000 |
Product Warranties - Summary of
Product Warranties - Summary of Activity in Warranty Accrual (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Balance at Beginning of Period | $ 4,357 | $ 5,122 | $ 4,675 | $ 5,741 |
Acquisitions | 359 | 0 | 359 | 0 |
Warranties Issued | 365 | 545 | 832 | 1,206 |
Warranties Settled | (517) | (405) | (1,224) | (1,290) |
Reassessed Warranty Exposure | 73 | 99 | (5) | (296) |
Balance at End of Period | $ 4,637 | $ 5,361 | $ 4,637 | $ 5,361 |
Minimum | ||||
Product Liability Contingency [Line Items] | ||||
Product warranty period | 12 months | |||
Maximum | ||||
Product Liability Contingency [Line Items] | ||||
Product warranty period | 60 months |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 27.30% | 30.50% | 26.00% | 30.50% |
Shareholders' Equity - Summary
Shareholders' Equity - Summary of Changes in Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 24, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Beginning of Period | $ 337,449 | ||||
Foreign Currency Translation Adjustment | $ 2,096 | $ (511) | 2,491 | $ 1,305 | |
Retirement Liability Adjustment – Net of Tax | 131 | 130 | 262 | 261 | |
Net Income | 7,685 | $ 14,980 | 19,272 | $ 26,465 | |
End of Period | $ 347,723 | $ 347,723 | |||
Common Stock | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
End of Period (in shares) | 21,685,000 | 21,685,000 | |||
Convertible Class B Stock | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
End of Period (in shares) | 7,016,000 | 7,016,000 | |||
COMMON STOCK | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Beginning of Period | $ 297 | ||||
Conversion of Class B Shares to Common Shares | 0 | ||||
Exercise of Stock Options | 0 | ||||
End of Period | $ 297 | $ 297 | |||
COMMON STOCK | Common Stock | |||||
Class of Stock [Line Items] | |||||
Shares Authorized (in shares) | 40,000,000 | 40,000,000 | |||
Share Par Value (in usd per share) | $ 0.01 | $ 0.01 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Beginning of Period (in shares) | 21,955,000 | ||||
Conversion of Class B Shares to Common Shares (in shares) | 686,000 | ||||
Exercise of Stock Options (in shares) | 17,000 | ||||
End of Period (in shares) | 22,658,000 | 22,658,000 | |||
COMMON STOCK | Convertible Class B Stock | |||||
Class of Stock [Line Items] | |||||
Shares Authorized (in shares) | 15,000,000 | 15,000,000 | |||
Share Par Value (in usd per share) | $ 0.01 | $ 0.01 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Beginning of Period (in shares) | 7,665,000 | ||||
Conversion of Class B Shares to Common Shares (in shares) | (686,000) | ||||
Exercise of Stock Options (in shares) | 37,000 | ||||
End of Period (in shares) | 7,016,000 | 7,016,000 | |||
ADDITIONAL PAID IN CAPITAL | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Beginning of Period | $ 64,752 | ||||
Exercise of Stock Options | 317 | ||||
Stock Compensation Expense | 1,456 | ||||
End of Period | $ 66,525 | 66,525 | |||
ACCUMULATED OTHER COMPREHENSIVE LOSS | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Beginning of Period | (15,494) | ||||
Foreign Currency Translation Adjustment | 2,491 | ||||
Retirement Liability Adjustment – Net of Tax | 262 | ||||
End of Period | (12,741) | (12,741) | |||
RETAINED EARNINGS | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Beginning of Period | 305,512 | ||||
Net Income | 19,272 | ||||
End of Period | 324,784 | 324,784 | |||
TREASURY STOCK | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Beginning of Period | $ (17,618) | ||||
Beginning of Period (in shares) | 523,000 | ||||
Purchase | $ (31,100) | $ (13,524) | |||
Purchase (in shares) | (973,000) | (450,000) | |||
End of Period | $ (31,142) | $ (31,142) | |||
End of Period (in shares) | 973,000 | 973,000 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) shares in Thousands | Feb. 24, 2016 | Jul. 01, 2017 |
Class of Stock [Line Items] | ||
Authorized repurchase of common stock, amount | $ 50,000,000 | |
Treasury Stock | ||
Class of Stock [Line Items] | ||
Number of shares repurchased (in shares) | 973 | 450 |
Repurchase of shares | $ 31,100,000 | $ 13,524,000 |
Earnings Per Share - Summary of
Earnings Per Share - Summary of Basic and Diluted Weighted-Average Shares Outstanding (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
Earnings Per Share [Abstract] | ||||
Weighted Average Shares - Basic (in shares) | 28,911 | 29,264 | 29,007 | 29,330 |
Net Effect of Dilutive Stock Options (in shares) | 1,178 | 962 | 1,128 | 960 |
Weighted Average Shares - Diluted (in shares) | 30,089 | 30,226 | 30,135 | 30,290 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) shares in Thousands | Oct. 11, 2016 | Jul. 01, 2017shares |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Number of shares out-of-the-money (in shares) | 474 | |
Convertible Class B Stock | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Common stock conversion | 0.15 | |
Date of payment of dividend to shareholders | Oct. 11, 2016 |
Accumulated Other Comprehensi49
Accumulated Other Comprehensive Loss and Other Comprehensive Loss - Components of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | Jul. 01, 2017 | Dec. 31, 2016 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Total Shareholders’ Equity | $ 347,723 | $ 337,449 |
Foreign Currency Translation Adjustments | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Total Shareholders’ Equity | (6,106) | (8,597) |
Retirement Liability Adjustment | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Total Shareholders’ Equity | (6,635) | (6,897) |
Retirement Liability Adjustment – Before Tax | (10,208) | (10,611) |
Tax Benefit | 3,573 | 3,714 |
Accumulated Other Comprehensive Loss | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Total Shareholders’ Equity | $ (12,741) | $ (15,494) |
Accumulated Other Comprehensi50
Accumulated Other Comprehensive Loss and Other Comprehensive Loss - Components of Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Other Comprehensive Income | $ 2,227 | $ (381) | $ 2,753 | $ 1,566 |
Foreign Currency Translation Adjustments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Other Comprehensive Income | 2,096 | (511) | 2,491 | 1,305 |
Amortization of Prior Service Cost | ||||
Reclassifications to General and Administrative Expense: | ||||
Reclassifications to General and Administrative Expense | 102 | 109 | 202 | 219 |
Amortization of Net Actuarial Losses | ||||
Reclassifications to General and Administrative Expense: | ||||
Reclassifications to General and Administrative Expense | 99 | 92 | 201 | 183 |
Retirement Liability Adjustment | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Other Comprehensive Income | 131 | 130 | 262 | 261 |
Reclassifications to General and Administrative Expense: | ||||
Tax Benefit | $ (70) | $ (71) | $ (141) | $ (141) |
Supplemental Retirement Plan 51
Supplemental Retirement Plan and Related Post Retirement Benefits - Summary of the Components of Net Periodic Cost (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2017USD ($) | Jul. 02, 2016USD ($) | Jul. 01, 2017USD ($)retirement_plan | Jul. 02, 2016USD ($) | |
Retirement Benefits [Abstract] | ||||
Number of non-qualified supplemental retirement defined benefit plans | retirement_plan | 2 | |||
SERP | ||||
Defined Benefit Plan Disclosure | ||||
Service Cost | $ 46 | $ 43 | $ 92 | $ 86 |
Interest Cost | 224 | 225 | 448 | 450 |
Amortization of Prior Service Cost | 97 | 103 | 194 | 207 |
Amortization of Net Actuarial Losses | 93 | 86 | 186 | 172 |
Net Periodic Cost | 460 | 457 | 920 | 915 |
SERP | SERP Medical | ||||
Defined Benefit Plan Disclosure | ||||
Service Cost | 2 | 1 | 4 | 2 |
Interest Cost | 10 | 10 | 20 | 20 |
Amortization of Prior Service Cost | 5 | 6 | 8 | 12 |
Amortization of Net Actuarial Losses | 6 | 6 | 15 | 11 |
Net Periodic Cost | $ 23 | $ 23 | $ 47 | $ 45 |
Sales to Major Customers (Detai
Sales to Major Customers (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2017USD ($) | Jul. 02, 2016 | Jul. 01, 2017USD ($)customer | Jul. 02, 2016customer | |
Segment Reporting, Asset Reconciling Item | ||||
Number of major customers | customer | 2 | 2 | ||
Sales Revenue, Net | Customer Concentration Risk | Major Customer One | ||||
Segment Reporting, Asset Reconciling Item | ||||
Percent of consolidated revenue | 16.00% | 21.00% | 20.00% | 22.00% |
Sales Revenue, Net | Customer Concentration Risk | Major Customer Two | ||||
Segment Reporting, Asset Reconciling Item | ||||
Percent of consolidated revenue | 18.00% | 16.00% | 18.00% | 15.00% |
Sales Revenue, Net | Customer Concentration Risk | Two Major Customers | ||||
Segment Reporting, Asset Reconciling Item | ||||
Accounts receivable from major customers | $ | $ 32.1 | $ 32.1 |
Legal Proceedings Legal Proceed
Legal Proceedings Legal Proceedings (Details) - Germany - Lufthansa Technik AG $ in Millions | 6 Months Ended |
Jul. 01, 2017USD ($)product | |
Loss Contingencies [Line Items] | |
Number of products in distribution channels | product | 0 |
Patent Infringement | |
Loss Contingencies [Line Items] | |
Appeal process duration (in years, up to) | 2 years |
Patent Infringement | AES | Minimum | |
Loss Contingencies [Line Items] | |
Estimate of the value of the dispute | $ 1 |
Patent Infringement | AES | Maximum | |
Loss Contingencies [Line Items] | |
Estimate of the value of the dispute | $ 3 |
Segment Information - Summary o
Segment Information - Summary of Segment Reporting Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | Dec. 31, 2016 | |
Sales | |||||
Total Consolidated Sales | $ 151,114 | $ 164,426 | $ 303,510 | $ 323,956 | |
Operating Profit and Margins | |||||
Total Operating Profit | 11,749 | 22,611 | 28,373 | 40,210 | |
Deductions from Operating Profit | |||||
Interest Expense, Net of Interest Income | 1,180 | 1,056 | 2,313 | 2,143 | |
Income Before Income Taxes | 10,569 | 21,555 | 26,060 | 38,067 | |
Total Assets | 627,828 | 627,828 | $ 604,344 | ||
Aerospace | |||||
Sales | |||||
Total Consolidated Sales | 129,547 | 142,501 | 266,374 | 280,810 | |
Test Systems | |||||
Sales | |||||
Total Consolidated Sales | 21,567 | 21,925 | 37,136 | 43,146 | |
Operating Segments | |||||
Operating Profit and Margins | |||||
Total Operating Profit | $ 15,416 | $ 25,925 | $ 35,488 | $ 46,826 | |
Operating margins | 10.20% | 15.80% | 11.70% | 14.50% | |
Operating Segments | Aerospace | |||||
Sales | |||||
Total Consolidated Sales | $ 129,547 | $ 142,528 | $ 266,374 | $ 281,177 | |
Operating Profit and Margins | |||||
Total Operating Profit | $ 13,984 | $ 24,851 | $ 33,738 | $ 43,542 | |
Operating margins | 10.80% | 17.40% | 12.70% | 15.50% | |
Deductions from Operating Profit | |||||
Total Assets | $ 529,369 | $ 529,369 | 500,892 | ||
Operating Segments | Test Systems | |||||
Operating Profit and Margins | |||||
Total Operating Profit | $ 1,432 | $ 1,074 | $ 1,750 | $ 3,284 | |
Operating margins | 6.60% | 4.90% | 4.70% | 7.60% | |
Deductions from Operating Profit | |||||
Total Assets | $ 77,382 | $ 77,382 | 76,575 | ||
Intersegment Eliminations | Aerospace | |||||
Sales | |||||
Total Consolidated Sales | 0 | $ (27) | 0 | $ (367) | |
Corporate Expenses and Other | |||||
Deductions from Operating Profit | |||||
Corporate Expenses and Other | 3,667 | $ 3,314 | 7,115 | $ 6,616 | |
Total Assets | $ 21,077 | $ 21,077 | $ 26,877 |
Fair Value - Financial Assets a
Fair Value - Financial Assets and Liabilities Carried at Fair Value Measured on Recurring Basis (Details) - Recurring Basis - USD ($) | Jul. 01, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Financial liabilities carried at fair value | $ 0 | |
Financial assets carried at fair value | $ 0 | $ 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Acquisition contingent consideration | $ 0 |
Acquisition (Details)
Acquisition (Details) - USD ($) $ in Thousands | Apr. 03, 2017 | Jul. 01, 2017 | Jul. 02, 2016 |
Business Acquisition | |||
Business acquisition purchase price paid in cash | $ 10,223 | $ 0 | |
Custom Control Concepts LLC | Astronics Custom Control Concepts Inc. | |||
Business Acquisition | |||
Business acquisition purchase price paid in cash | $ 10,200 | ||
Cash acquired | $ 500 | ||
Period goodwill and purchased intangible assets are expected to be deductible for tax purposes | 15 years |