ATRO Astronics

Debbie Pawlowski IR
Pete Gundermann President and CEO
Dave Burney CFO
Jon Tanwanteng CJS Securities
Ken Herbert Canaccord Genuity
George Godfrey C.L. King and Associates
Michael Ciarmoli SunTrust
Dick Ryan Dougherty and Company
Doug Thomas Gabelli and Company
Call transcript
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Greetings and welcome to Astronics Corporation Second Quarter 2018 Financial Results Conference. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Debbie Pawlowski, Investor Relations for Astronics. you. Thank

begin. may You

Debbie Pawlowski

good your We interest and time appreciate today and in evening Sherri, certainly everyone. your Thanks, Astronics.

our Joining Gundermann, me Financial Burney, our Pete Officer. Chief President and here CEO; and today are Dave

the hand before available morning and on in have website market, should news that wires the it crossed don’t, you at release if our this the is You

teleconference. factors to during As formal presentation the cause events release with forward-looking and Exchange are statements that outlined as filed the portion subject well to other and factors you Q&A during we to are apply aware, the Securities earnings uncertainties we the may documents could These Company as of differ are where materially that as this the from in well These Commission. as future make results as today. statements are some in risks as well actual by

our at these can and both website at You documents find

to turn So, with me let that, to it begin. Pete? Pete over

Pete Gundermann

and Debbie, good Thanks, morning, everybody.

to the We’re answer for second the expectations our do through usual. year and then review as of do and our of quarter and questions results talking of including going the rest normal routine the

second quarter. for So, highlights the the

We strong You topline revenues. consolidated this was morning. our Company. saw the It had performance numbers a record for

years quarter. Our first line, or the three performance its so, Aerospace what and tripling did record quarter segment in top best almost turned on our in the in another had Test segment it sequentially

sales $XXX midpoint forecast, With recovered from finally, the ended about volume improvement. on And where our target up at calls remain quarter, for year. about the from the which strong by performance, million, driven again topline our margins last XX% XXXX largely first well we of we consolidated our for

details diving of second the into quarter. the So,

new as Telefonix Acquisitions, first XX% in of $XX comparative all-time contributed and revenue million strong said, of a of year XX% higher million That XXXX. our the specifically a quarter about from at $XXX I our period than about $XX high, was ago is Specifically, million. up about growth.

out you quarter was about the in if inclined So, acquisition back find organic growth will to growth, XX%. you’re the

and time margins up X.X% from in our $X.X a that said the of that million conversation fair kind confirms talked year quarter we results income over of -- in, comparator have sales, period. responded As another the Company over second million, in marginally volume. bit for quarter. a results think million sized I mentioned, first substantially the that And that call. revenue, quarter quarter about the and year Test at XXXX. the up the set of We up a XX% first our period of comparator the had revenue lot to we at recap with but for about of million, net quarter of the second X.X% Margins $XX doubling $XX higher quarter ago quarter the is of briefly, now in record tripling a thesis. increased we about gets nicely second was of first of sales And ago credit benefit our We Aerospace $XXX with volume.

in or about higher $X.X We expected. second million to the side. million; that our had but $X of -- second much as about losses on of some of $X.X Aerospace did easy much as million, the expected Test about quarter. in in experience substantially. side, in see in have we quarter With dropped some we challenged our purchase we though reduced of came in drops from most our the the quarter That first the not up our volume, made progress and as to might where quarter It’s as operating accounting kind frankly expenses not We had margins $X.X million progress, operations the I legal hoped. expense as collective to first

number rest and further second that second year. about that XX% last over compares expect the to year. diluted $X.XX improvement of per in the earnings in In had the of We the quarter share we quarter,

$XXX Finally, bookings the was of from million. That’s off Aerospace in but with were couple very slightly solid by pace quarters of last X.X historical and norms X.XX. at our the book-to-bill a the still book-to-bill strong business, the

And is get So, little one shipments. big that we knows multiple it even bookings, Test think are are tends if orders Test -- business think bit of be a about lower you at in our record but up lumpier with periods. to was delivered that shipments, our tends everybody of even that way be because keeping bookings our quite bit lumpy to to terms a X.XX. to tend over

So, lumpy bookings. shipments, lumpier but

too a we So, about don’t in get book-to-bill of X.XX quarter. any alarmed Test particular

the good second of consolidated up that at the second million. a for really end Our half. $XXX backlog sets us We quarter was think

Year-to-date that minute. Revenue, up We Acquisitions XX% a last $XXX million. $XX results. million, about talk $XXX in will about from more year. million consolidated, contributed

bit started we the year, just this strongest $XX.X $X.XX be year. sales. to One in low going strengthen. continue was That’s trend. observation about XX% year down the XXXX smaller, is with for X.X% and side margins Net quarter the and We would We the to from last profile $XX.X forward first is million, the per our think diluted which the opposite share the I throughout last going dropped on that we’re So, the started year. year in put income first to We X.X%. half first in $X.XX like of quite a [Ph] growth had million organic year-to-date versus XXXX. half was margin

pretty the year-to-date forward this end to point those of are dramatically comparisons So, XXXX. going through from flip going

we of of X.XX, months the On a X.XX. equal through has of positive Aerospace had shipments. just million. to through booking six months, the side, That’s book-to-bill almost $XXX bookings book-to-bill exactly consolidated six

X.XX. of is book-to-bill So, little showing bookings bit. a shipments are leading Test

the period, in operating million quarters, specifically, but comparator second to backlog second rest our the we’ve $XX.X XX% our quite of $XXX where million. the XX%. The the and million, were of little and bit the of for the Bookings Aerospace drop of year-to-date a we ending expect profit to of million, X.XX highest a second in a book-to-bill been quarter up still segments. of or ever, where Turning in over again, That’s with $XXX go among year. the adequate previous revenues segment, quarter of $XXX strong X.XX, quarter through to book-to-bill

of referring press million, Looking the as through bookings X.X% in the over Revenues this of numbers with we’re expect $XX in Operating to profit the stronger of where year. some again, first are those $XXX and months. charts second that’s half the our there total book-to-bill bit half to That’s $XXX first going the second XX% numbers a sales. million we little half We were consolidated million at of flip release. year-to-date of of about up XX% to have hanging down of through year. we our from last XXXX. had X.XX, And a a XXXX. But, half weaker six first

Commercial million. at was the months it our up where sales market sales Looking of through about XX%, numbers at $XXX strongly That’s some of and product and total Transport XX% last year. were first compared six line XX% the to numbers.

Telefonix of that. acquisition Our gets lot a the for credit of

not Electrical & second makes smaller but year-to-date, which million, a our of In-Seat If Power Power up Motion, X.X%. quarter comparator which you franchise, includes $XXX look the over lines, of and up sales at significant up product our category, our $XX.X X% quarter portion all a major had million the

is through this on $XX lines the a a half, million for & group. up year And major prospects of despite about XXX% pretty ours, excited of continues flat with of that preview, And we’re in lot Lighting the before. that sales half, Motion XXXX. Telefonix be And for are making will group crazy product first a we -- Electrical in that six Avionics, and in Safety, where Power pretty is first total, to about months. we first year, categorize strong, that’s our through that our by the about pretty of over $XX strong the this We’re product the X.X% the double-digit the smaller expectation & of as growth sneak the growth million cumulatively end year demand XXXX the delivering our the total. today, XX% line see XX%

little make forget, here our acquisition working a is let out very, comment me I that Before Telefonix well. very

culturally, If a into throughout there’s you comments the executing plan. job, our kind and read on fitting strategically little press of their group the company really the release, good doing business

we’re So, far. or how six performing it’s seven pleased group how very only months, so is -- been but that that with

to have them part happy team. of We’re the as

be to Aerospace. trends really strong. in continues Some Market demand

solid. the here on there, we’re very, get We’re There see record And our incentive we’re having the that our across front of kind don’t to going in particularly we’re and sales; bit some by not places foreign price some a large, in the but it’s lines years, military and business, of demand dramatically business internal product programs it be especially always to over see have are busy of business, slides bookings; Company. side the our some in are very end things. There’s of changing dramatically or and on weak pressure. various continues in trying scheduled very spots things little that programs, some grown we We setting changing. there record but

worst implications potential these recent the here is definitive a spending to or we time of $XX that. today talk, it neighborhood difficult But, between airwaves some quantify. negative like the nothing because be And of and and which case been yet. understand answers puts lot the million somewhere tariff impact, don’t to we be to But think the potentially, days. a could weeks We there’s a -- have there we dominates it have any takes something believe. in scenario in But in trying firm charge of

profit by was shipments. good segment. revenues of pretty ‘XX. very almost Test in Turning our and the was Again, a strong year test were triple of quarter. semiconductor half first double second operating were improvement Those million, million, XX.X% to of $XX the sales. last quarter, driven bookings evident The The $X.X second that

covering expected But, QX I’d to prospects than we’ve when which business were to But, other to us, in are those book-to-bill Year-to-date Operating not last the XXXX you actually some But, bit been a QX, we’ve of we the you’ll some some come success but with quarter we’re QX profit half like you today, contributions the believe X.XX. I I got $XX the guess, in not maybe which between list guess, XXXX million, have about times back backlog a had in and in we some see still the while. of XX% we we’ve way second prospect believe the semiconductor ready for business they up we’ll substantially that’s A&D bit a little we the first on if waiting wins. potential Defense and we and is We $X.X more revenue tell million, side, good X.X% for from & and year-to-date If quite other Bookings more million, even ahead have ‘XX, from for, important booking is that happen. through optimistic Aerospace demand And And it’s $XX that we’ve of got loss matter. from at have for had verge deliver time. communicate to some business, QX that quite backlog. quarter. good or realize XXXX. the year. numbers a of that look in second that of a talk

the at really quarter the forecast for our second total $XX to was backlog $XX.X of million. $XXX quarter good enough was Balance of million. the that’s At think end from end year. sheet. drive second Our of million, debt the cash We

a as is we The than XXXX that cash We one Test require material that if progress a rather we substantial But that expect of expect covenants we year put throw that wrench could investments, which orders may stronger to our where year XXXX. use we’re and more are it quarters. position will We debt to the have now. strengthen that’s with to. as in the good feel our thing deliver And room in progresses. course comfortable up right to we reason cash, comes have

coming Aerospace million. specifically initial looking $XXX we of consolidated maintaining in are $XXX at expectation $XXX That forward, to million $XXX for of with million an revenue million sales million $XXX XXXX. Test So, our for to in XXX is coming at and guidance to

XX% year or of about and you all growth about for Test year, consolidated would the the If midpoints take of XX% that, of you anticipate Aerospace about growth for XX% year. XX% growth for the of the

to appropriate were to the higher be to where specifically, and make leave QX maybe we in obviously some QX at -- QX we for to got it’s this we were down are move programs perhaps were. And QX you maintaining the QX, as with potential. room generate two who When at yet. the some expect QX. little got range things could things which nailed there That’s to QX than that stronger expect is for want little in need We’re in, would ranges I those to expect them the they of a we point, lighter look We’ve before. there of we coming same we’ve would models, had we be normally because and upside felt be coming bit suggest, tightening but than win, in were and

QX. better We have and in insight QX

room to again, will also change. have stronger as the move. for There stronger be will towards bit certain Aerospace be much uptick year. of So, QX of mix like expect programs there semiconductor the shipments, an will of in QX end a Aerospace-oriented, little QX is QX; a kind we

to margins results. the to expect some more improve. continue that we towards. expect working got something don’t progress dynamics We of the can legal, path. also predictable And drop that the to underway, SG&A And going front will How expenses, when trends comes. quarter either. think will The acquisition, make to about we’re our much on demonstrated think we make But, that a we continue we’ll we’ll progress report we’re disappoint by time expect on with struggling on units. the talked We we we second as going be that forward we’ve positive

that remarks. We’ll my open think now. I concludes So, for up prepared questions Sherri?


Thank you.

conducting from with session. be Jon Instructions] will [Operator Tanwanteng first question-and-answer question Securities. Our Please proceed. We a CJS is

Jon Tanwanteng

loss going the those one, line? of down it for versus million quarter. QX expectations spent [ph] problems and $X margin do you product to First either time of can a last break business Where operating by you kind through that lot or expect QX, and trend, you

Pete Gundermann

just It’s to would of we’re doing timing towards three three safe -- And that. those to see of would to I comes thought in when improvement cut margin a is that really to a say other one of the efficient, some the we’re more bit It’s lowering little tell companies, half. a year end is two that a we’re to all in through target. costs, one more demand and I bit going But that aspect seeing of like little business the greater there’re being generating you that if in demand. better demand. moving locations, it’s I than do due sales. that I question think -- aspects

be it very much to a know all don’t end XXXX competently you I to exactly as a XXXX we’re that I should across I So, three, tell about can picture. think where going comes up when close. different

in to is when time we we three I’ll demand -- be question when the The or going report And time that strong opportunities locations. I that improving is, increasing demand happy all to know don’t think, exactly see come. comes.

Jon Tanwanteng

then, Test in that any the future, ‘XX on will And is all they the point? side, this or at orders just at impact slated near XXXX for further

Pete Gundermann

out. possible running time It’s is but of kind

where we where understanding XXXX is the the opportunities, be. are are -- expect good So, on up, insight to months next the you And of we’re up where be. of to year. middle I and three most on would we we to mode various kind semiconductor we XXXX in to the based both side. I this to have continue have of side A&D over And to will tell over now on that expect pursue going indications pretty

So, go to the expect back we of kind to don’t XXXX results.

we’re anything, going expect, from if build XXXX. We to

Jon Tanwanteng

finally just the then, themselves. And margins on Test

the around, forward? What’s did the trend margins operating kind that exactly expect around time had and of think going do you this ago, let’s time this call XX%. I XX% different maybe level to you last in years time it this how of we revenue, three business;

Pete Gundermann

about now. is breakeven of at -- Well, The me -- A&D let running different at it not of sides part a a is talk right two it. level

we one heavily have we these new not programs going. have in of yet, which are have investing year. we to have we which keep I problems have pretty that’s next the But alluding material So, kind we been ramifications -- will which that won not of hoping

making -- is one one semiconductor we XXXX time, exclusively And these happens The an programs in the one in there as of one was one, often a of kind old talking businesses you’re much that’s kinds pretty are second the price about. So, were On quarter our side, old back quantity, one. investment their basically -- is area. up that on drops. new shipping in sales two period in over

some of that. the the there’s amount significant shipments. program, margin come on effects of in drops a drops. So, initial we’ve learning going seen And And curve new price with with

next we’re of we’re have incurring going pretty going we And business a when And more business both both finally, years semiconductor to filled a compare optimistic legs. well, so, little long too. today side. then, versus infrastructure, it’s you the especially have out question the a of out are bit how on play ago, three And But, much the that programs that they’re year.

sales world. engineering, a we competent spends a So, lot the we time that have technical have of the more group; and group spanning larger

for But, think when production, a up worth of little prize we hit the is a it’s make cost programs bit different they structure. investment. So, that The it.


Our from Genuity. proceed. Canaccord Please Herbert Ken question with is next

Ken Herbert

able the Aerospace the do ramp of put to steady the million three Or of you’re see half the in in fair you that how I or any in over a of help numbers assumption your on we a get with maybe businesses, margin second just -- $X sort I wanted XXX you quarter of ‘XX, business? Aerospace fourth troubled through less a -- basis quantify of maybe should to, margins. of what’s points should in the kind the How some for margin. $X around can within revisit the savings earlier improvement if loss year, comments mean, to million first more that?

Pete Gundermann

that I’d age is Well, that side, bottom to first, of giving guidance, rely XX% somewhere that. old Aerospace easily to our like on think up line over pattern let predictable. on amount can, of you up realize the XX%, me get Certain not range. it we in

is teens. mid three these even XXXX think in hurting to positive goal a I And Our be. question maybe going flip we to a helping. earlier, really I part revenue our where the be have each prospects in say us actually of And a XXXX. flip And there. as reason hard stop majority going it’s to the troubled But, compelling is our are difficult going us. that businesses Ken, predict, be case, start to It’s are where can more collectively come. is in Jon of tell there getting some was to why of That’s want stop much than coming hurting that to and make and to when a to ones what’s are we I of helping

when we to challenge just but them certain on can the execute opportunities So, not developing such they mature. extent, that the a managing is the actually cost,

the ink like businesses. it’s we those red having nothing future. in not don’t we situation looking but like on where ink the drags and But, a don’t the at see So, red we

pretty feel So, about we good it.

Ken Herbert


businesses, as step-up I from maybe volume also like a guidance, know from improvement steady guess a interpret for sounds you but I improvement sort that, So, ‘XX ‘XX don’t but then incremental but in to well? in obviously of it these Aerospace maybe really give

Pete Gundermann

topic Well, same especially I’d those talking if disappointed be Yes. we’re in from ‘XX. three, about the

talking a questions in space challenging to little I will airline of even There another to pretty not XXXX about in or in the think is out. switching models marks There’s and We be challenging And suppliers a going from well-positioned drop a turmoil question the we’re feel different or because fair are supplier shape contenders, in anymore. this IFE with up path. but really how radar we’re on the overall much but different one the some whole particular, like all amount business, nerve-racking watching. won’t screen. certain it’s the -- about a it to direction, industry going we going

put it’s real So, numbers to early a on firm little XXXX.

year. down But As we towards coming come for you the we the out that feel well-positioned road. with guidance know, the end whatever’s of

Ken Herbert

And detail sounds this X were year. it the -- look talk sort to just side business Aerospace little the growth, second more on to a X% your certainly organic line least be Power It & implies could pace at the at sounds for top that? X% guidance that And maybe if could of was maybe But, little a on within just Motion which be call the the of with half quarter. of of in half the have a you you this can Aerospace, and year, about conservative the this puts Maybe of in clearly second I a Electrical some a topline? outlook few comments the swing takes your factor. like like

Pete Gundermann

plan, also. revenues slide, at that fill is and we perspective execution obviously far perspective. in a to it’s We make different and book in time this, takes. to shipping forecast. have make how lot to And make to look way scheduled have numbers Dave our significant and describe And we have don’t for our if go. a the from end but holes it we we this the year, Yes. could of look to they to our studying which always I’d have -- because backlog has period, what another the programs puts these maybe hurt the There’re the towards scheduled some and spends of But, he

to the through bit two of on think quite business I of any in are year, big our upside with kind a -- schedule, So, and of we programs of And -- actually the wide we that it. big upside third range couple is. But, things the of big or end we’ll towards as things of kind flip, on potential usual, throw why the optimism end there would dynamics And as point expect quarter, have the the of to that possibility as and if ended leaving stay it is end range. of there flip I those the by and is bottom of that up the the median the ship can us that tighten book kind range. potential.

Ken Herbert

standpoint. And a just pretty this use you is of year any year? flow. do similar we bit considering better there finally, something if or from the in working other we capital really nice free like little -- year could, still I is sequentially, seems opportunities tend a the and back should have on had to in Are half cash It of your specifically nice you all end comments, maybe a cash strong significant of Seasonally, working improvement the free cash on capital expect to a a unique cash. flow

Dave Burney

is this Dave. Ken,

You are right.

expect last stop. inventory ramp half the of in the that half the working We year. to in capital, I flow. terms the We ramp strong cash year of really particularly or in this out be of to of first level up our expect saw

remain But, of year. this in last next relatively weeks a us impact could heavy flow that of our flat inventory are could the over to impact months. in hit some last That test too. the working significant first the earlier, improvement. only see year. quarter of we that half be We quite our load orders get expectation six And next the quarter we revenue scheduled had if capital that Pet the of the six our up cash in delivered in Receivables is thing quarter. free is that a As buying will the mentioned went bit should

don’t significantly past in quarters expect I increase as the two receivables So, to either. did they

increase the So, a to impact months, six free next say it’s in way the in to significantly quarter. a cash -- expect particularly of sort yes, fourth flow long our we


proceed. next Our from and is Godfrey Please with C.L. question George King Associates.

George Godfrey

The add I’ll what in are my $X quarter. those Nice the with drag the businesses associated Aerospace approximately Peter, drag? making that revenue -- is dollar congratulations. segment, million the that million

Pete Gundermann

it head. you, doing about tell it’s million. my I’m in probably $XX I’d

George Godfrey


million those if the like drag take I revenue just the businesses, So, back million $X more is ex from Aerospace XX%. that add segment reported and out $XX and margin

going the of like businesses they’re So, well. the really look rest

Pete Gundermann

a were good talking point fix those what in kind could that’s improvement even little That’s just getting I our call. we would on think, We big of margin a and about, dramatic. without be last contribution a bit businesses,

George Godfrey

is well. -- was the segment margin exact math margin that’s everything business I that’s XX So, if you’re that hovering doing going near just X% that on know, is

Pete Gundermann

Yes. Agree.

George Godfrey

from that I are the margin margin is and where years Okay. XX% three were they and is later three three than on yes, then and years to Test heard set, business. on the margins then exist we new structurally on that discounts based products set going revenue And current But margin incremental that years a platform new because very product lower set I those the new But a with customers. than And achievable, then, customer be three back this that today, listened or customer ago, promise or what carefully. And lower were pricing ago. was new XX% it of was my products years to interpretation ago.

Pete Gundermann

think as quarter got second extent think -- half old that was we the and had the sales to in that new half program. the I about To this. about the program summarized -- the basically But, Yes.

is the margin, is So, program startup little new be, the program it old costs. to lower a primarily bit used because than lower and margin of

continue And always is a that will future in that’s expect little in of question But, to program go the that mark. going demand newer than there if coming we’re the So, this the we older is away and better. given indications program bit [ph] a force more at for get point.

George Godfrey

today And how this question versus the six quarter there. incrementally to get it and like the leave I’ll customers or I ask I changed more this every is ability business, has then, feel ago? my ago months on is year And last that

Pete Gundermann

I the Sure. or ago. give quarter Well, gave you you answer probably year I’ll last same a

got we’re on ongoing. And and working we’ve And outstanding We’re realized discussions bids realized it. we closer. have

So, effectively nothing to expertise the report and at team out this point. to developing execute opportunities. kind those But we of are more the on building

given talk And So, to about we next haven’t quarter, up. some able hopefully be we’ll certainly success.


from is Michael SunTrust. next Our question with Please proceed. Ciarmoli

Michael Ciarmoli

X% Just down sequentially, the sequential the on trends looking in was power and Aero basis, weak down core quarter compare. year-over-year motion at specifically a revenues pretty on the a

I expected said of marketplace. electrical Was that products you mean, color in strong. up mentioned pick took could of kind demand factor the have remained we in power seen kind a why core a of that little a the dip? a would’ve You bit of any turmoil provide I or you there. would terms

Pete Gundermann

tell are you, our that program address end double-digit to would by to also that I it’s there. plan I going scheduling. you is the of we tried my the strong telling just in year, comments growth see

But, said pretty looking look you a we’re I XXXX back we XXXX. correct expecting So, doing to it’s obviously. -- your and obviously, at compared the strong. going think demand weighted, numbers. has we’re remained understand bit to well growth and is done, when half all But at overall, little be double-digit really observation

Michael Ciarmoli

product Motion In line? & Power that Electrical

Pete Gundermann

Yes, specifically there. Yes.

Michael Ciarmoli

be quarter, in gave presumably sounds the -- the the like in It quarter. the If the just they has power a be fourth similar Test we of might bit and a could of and color just and still a little of margins, run to XQ. to you falls on What it digits. you guidance. on third off to the XQ -- motion now kind I obviously rate you am -- trying the with movement margins up then mix sort have and of double wide products Test kind or -- get range the given grow sequentially will expect Can guys I

drop at million am it I for there Test room material things plus So, like to down any be the is sequentially. is a to there margins to what But and we change material you or sounds guess, trying another in there’s I going quarter of kind -- do get move $XX if it, some around, then minus.

mentioned of a kind with more sized were You infrastructure. you lot

a the just margin of profile. get trying So, mix to sense

Pete Gundermann

volume the overall QX. There think, be from Well, away a QX will we change probably and Test mix in driver will move Test as I towards the for from I and guess, be biggest related to Aerospace business.

but little just think I the line. careful, very you’re in this little strong would change, I that if model top But, question in quarter, be mix then more reduction out a line part point bottom there. part over probably QX. to QX both going will of bit be of a because think, because and further it’s in at a reasonable to it’s QX are There marks

Michael Ciarmoli

going? the Aero, the And on for break just level? at Test are then, amount last sort R&D dollars The And how side, then, maybe within jet Okay. maybe are one me, color allocated out you more that’s this business expense, and on large is the Aerospace can you for these you is color? just being -- where give commercial high of the E&D spending between can the some still transport, some just maybe

Pete Gundermann

Sure. want. drives This the Company, basic those number it’s years. the the the big some technologies we’ve of and that philosophies business forward with think that for to up it’s and we customers But, as our talked things about of our a in terms of coming a innovations operating it and one gets

they presenting directed are demand customers us. are that at to clearly Sometimes

initiative doesn’t whatever. for the or work the out believe very what and them that successful. us that for their a want think coming Company. handful keep crazy, where for to of are will do do create years They customers. value something. unsuccessful for it’s operating We with things from ask doesn’t initiatives have or absolutely self-funded reason. it’s us units. their an been product very we of kind And time, the true other Even And R&D over that’s development customer in of us, marketing lot if of requests. kind secretive technologies, those we nobody us. we have nobody anticipates Technology work we it. just nobody of to even the of way a do some changes incredible expects basically, mind even a are over is and But, effort. situations develop our to them And that climate There we our it or we big Because self-directed, the whatever really kind in Certainly from will

and do make how operating We not effective those consolidated at we are and them do are decisions responsibility. basis operating corporate. control in we we and at be where We staffing can course. cover expense kind look to what centralized is it, unit of a on a to the command company sure the an of really can of sure made make we context and the units, also finances, But,

responsible any we that there do So, it’s decision-making hand been that has the outsized process, had that had number a as we’ve when resources I if felt. of makes spend Today, it. to bit. that to as range. going because We were it’s down we incredibly been important, have though our relative little on opportunities we were sales, manageable our a In still the that decentralized feel And revenues been it’s expect sense. And times XX%, percentage would it’s to seeking come we our number. past, even big and XX% anything, a a increase, a in if floating

how long-winded we how manage as So, think we and kind it. we about how a of answer it to that’s and allocate it


from Our is proceed. Ryan Dick with Dougherty Company. next Please and question

Dick Ryan

new XX-XX. volumes So, was are Pete, Those program, customer, roughly back and program correct? on with and you Test, old same it for delivering the both the then said

Pete Gundermann

of customers identification. kind our get about -- can’t sensitive very We any it,

just So, to we it think prefer as of programs.

Dick Ryan

as backlog of and up XX-XX there Okay. old if the How XX-XX, revenues program new is coming the make does the well? out backlog --

Pete Gundermann

the older think it’s I weighted That’s of at moment, out them I it’s program, -- towards head. of don’t probably kind semiconductor me, just more in have But, side. the Dick. front my the of

Dick Ryan

at Looking up challenges you nicely. look had, they like three came the sales certification

individuals, but give AeroSat, there? of characterization And recall again regions, the us that like net tail-mount kind issue higher satellite worth it’s trying to certain get move. So, in jets was in if Telefonix. demand Panasonic CCC, of good am I a business? big and the under Satcom the you I’m of a of kind Looks certification Direct. update an more of I correct Can moving

Pete Gundermann


earlier, referred and very Let them you turning I with as the that Astronics around going that to me well. certification between numbers And the we there’s here, some CSC. go product there. the gave And avionics Armstrong business corners. lot the process Telefonix, and I’ll of think repeat quoted is merged Telefonix combined And right? split under now opportunity we’re line. The is We I leadership, compliments revenues horn. a think, are basically Telefonix the the

the effectively. think But, at having think, operation There’s good. good on I execution, for go. is and frankly. capacity I bringing leadership these of The really opportunities. It’s doing job lot Telefonix turning in programs, and far competence progress. a good to the they’re now And been that at has ways so challenge they’re a to making the so a

current So, is if execution that just think just fine. doing be and of going we trends can kind to assume I some extrapolate success, operation

than It’s And One a development complete perspective. the VVIP. two frankly, improvement. a another is estimate million quarter. to and job, are a aspects they management $X we CCC nightmare, executing to their correct, a your second from lot has There to Moving took been characterization anticipated. their business costing on more what big is which in charge cost of

think we it. getting our around So, we’re handle

time Max XXXs, so, to a what think that that of available fact say, big where they I the is every one out we modifications AXXXneo of starting going but converted VVIP, be But kinds private these a commercial be day, think be weren’t transports quite long-term evident. beyond will that very yet And the we be worthwhile program, now call program AXXXs, look world. from on there XXX even in there when year, market to is not the airplanes XXX out news may imagine demand these of around and there the is things is year standpoint, or that. Still to around The AXXX at available, now, turning you that XXXs, but for seem available, scene like a and quieting some are shortly. That in aircraft part hard the many a half geopolitical is also AXXXs also will available based now, ago. more XXXX the

spend million, the $XXX their So, old converting people version, version. the newer who airplane in aircraft, for private million not new they want want to $XXX

that some there’s So, lifecycle happening is there. natural

it’s big done one the AeroSat, make getting in handle that CCC should gets So, have combined to a brighter starting compared what of over around is that we’ve a in with last And for big going third getting working hands trio. our and of the future couple our of demand year. some there a the this soon increase program us and on. that partners been -- development is That of AeroSat, related to program it time and still But, waiting. things part are demand part we’re our the

an order expecting are year, order yet in volume. material deliverable of it will this will We that be be terms a

least bit in our flying that handful to little year, terms we better, go. it’s we at switch turned of on -- think the in end doable, significantly be it’s at of looking the it’s the upside look think is need by now, have get guess, but our delivered. it’s it, pretty expect of a handful qualified, We airplanes I just we’re hardware proven I ready network out hope right multiplied being -- incentive there is but the we the lined up. everything have you to to system on, proven, customers and it’s our

market there who but talk are for And there kind out that will. There So, be more to which kinds we everything on. have like opportunities terms a is those technology, to you the compete to usually you of measured is do that with moving program gives It’s take universe generally doing potentially. bite and turned we Depending apple. it cooperate of airplanes it substantial target is in it thousands demand to to of of we typically in addressed, because can part market. partners, kind we up huge the and X,XXX we to, our everybody airplanes. think got is the to at their a a And on of get in

on demand to we’ve ball are to that going people we to just those rolling. start that of this kinds got in later position airplanes good the We think of fly a our service. kind -- So, or teammates with who it. think we’re delivering sooner get we And -- program

and to be they in to going So, combination, three results improvement to we they point come you being our look drag if to just stop Aerospace it’s a are a is being think -- why those a go I where a going from that’s specifically. think at things being that drag, And collectively to there big contributors. all going


Thomas from is Gabelli question Doug next with proceed. Our and Please Company.

Doug Thomas

you Just are given flows, you a executed buyback a of any the on you discussion whatever, -- will cash next, couple talk where repurchases repurchase your the I for question about what’s And quarters, about the quarter? year? your this what’s moment if -- didn’t about share next -- for Dave. thoughts share over

Dave Burney

at there. Well, the nothing kind bottom the philosophy share pecking repurchase deployment. do of our will of to has order The what in of the we on free capital flow, with ranking changed be cash tends our the

and the We reinvesting continue to business. acquisitions in be in interested

We the have ridiculously feel historically is the opportunistically utilized plan share share price undervalued. when repurchase we

Q had activity us $XX any if we we will filed to week have and authorization next our million disclose available that. under a We in

Company. would view the we is I it’s comments growing suggest use that on our to, the my that tool can -- as focus when we a need So, but is

Doug Thomas

chat And fairly kind maybe lots And to am Pete, don’t not obviously One flat time. lot in. bidding albeit I either hoping this or -- out orders terms I you’re about take of point discussion thing the to bid you of a business there. environment minute choose of and margins. in we at to you obviously out, in was interested top of are assuming the or would about the you the a But about for strong could lower that new a line not in cycle then, talk potential business better, process the make it’s where at for look not -- much with that that competitively take

where you -- You in bidding areas. demand What work, employ like this it is particularly to an appears pressure comes that certain guys the price growing? to talked you’re environment across for about discipline when be

Pete Gundermann

very -- don’t this Well, get I question I often, just Doug.

initial everybody itself leave bit is want my when ourselves tend me to a that, view -- our little is than do on about programs protect new price to Let you where innovation that low close of bit or agree. tend have mature negotiate to the get volumes small different start pricing some the to be you lower charge even generally And we like to some especially is we to value to as times, tend And and our the that and to invite for a think of little situations not more product copy pricing of maybe once be There is because proven up we’d for to think we can competitors leading And we And customers. than in markets. want who a you us. and get, markets kind are we We to and older you to tend second. for reaction that leader. our bit And interest little really technical, new and it they, things extent, little a it self-evident. bit A very feel that part, we grow buy provide that flexibility. big. appreciate having to wants it. a most lot are But, we end

expense of a bit not looking That’s we way we the of in little of our like by means about general. business. of you for at of a I are But, process would company margin So, feeder the tell kind bottom go volume that kind it’s kind no a where that. we’re


reached end to turn have of session. call the over closing remarks. would We the to the back like for I management question-and-answer

Pete Gundermann

quarter is liked Well, the better call last yet. this even the that hoping And we we’re call. than third better

thanks interest. your So, for

talk soon. to will We you


This concludes conference. today’s

And for time. you You may this disconnect your participation. your lines at thank