Astronics Corporation · NASDAQ:ATRO
Astronics — Drexel Hamilton Aerospace & Defense Conference 2016
30 slides from Astronics's conference presentation, Jun 9, 2016
Slide 1: Drexel Hamilton Aerospace & Defense Conference
Drexel Hamilton Aerospace & Defense Conference June 9, 2016 Peter J. Gundermann David C. Burney President & CEO Executive VP & CFO © 2016 by Astronics Corporation NASDAQ: ATRO
Slide 2: Safe Harbor Statement
Safe Harbor Statement These slides (and the accompanying oral discussion) contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that could cause the actual resu
Slide 3: Astronics Corporation
Astronics Corporation NASDAQ: ATRO Index membership Russell 3000®/2000® Recent price $38.23 52-week range $24.75 – $63.75 Market capitalization $976 million Total shares outstanding: 25.5 million Common 19.4 million Class B (10 votes per share) 6.1 million Avg. daily trading volume (3 mos.) 175,400
Slide 4: Expanding Product Offering
Expanding Product Offering Aerospace Sales ($ in millions) $665- Electrical Power and Motion (EP&M) $661.0 $692.3 $710 Lighting and Safety (L&S) $339.9 Avionics $228.2 $266.4 Systems Certification $159.5 Q1 2011 2012 2013 2014 2015 2016E* Structures 2016E Sales* Test Systems 15% Semicond
Slide 5: Diverse Sales Composition
Diverse Sales Composition Sales by Product Sales by Market Test: A&D 7% Test Test: Systems Semiconductor 21% 14% Structures Electrical Other 2% Power & 3% Other Motion Business 41% Jet Commercial 3% 4% Transport Systems Military 65% Certification Avionics 7% 3% 7% Lighting & Safety 23% Q1 2016 TTM S
Slide 6: Adding Technology
Adding Technology PECO: PGA: Armstrong: $136 MM purchase $31 MM purchase $52 MM purchase July 2013 December 2013 January 2015 Aerospace: Aerospace: Aerospace: Systems Lighting and Motion, Avionics Certification, Power Structures and Lighting and Avionics 2013 2014 2015 AeroSat: EADS N.A.
Slide 7: Continued Growth in Commercial Aircraft Units
Continued Growth in Commercial Commercial Transport Delivery Forecast 2000 History Forecast 1800 1600 1400 Aircraft Units 1200 1000 800 600 400 200 0 Light/Medium Heavy Source: Airbus & Boeing Actual deliveries through 12/31/2015 / Forecast International (July 2015) © 2016 by Astronics Corporation 7
Slide 8: Outlook For Business Jet Deliveries
Outlook For Business Jet Deliveries History Forecast ~9,200 Aircraft from 2015 - 2025 Source: Honeywell Business Aviation Market Update, November 2015 © 2016 by Astronics Corporation 8
Slide 9: Leading Provider of Passenger Power
Leading Provider of Passenger Power EP&M: In-Seat Power Supply (ISPS) Rapid adoption rates Outlet Units Passenger power for 800,000+ seats IFE power supplier to Panasonic, Thales, Rockwell In-Seat Power Supply and Zodiac BizJets: Cessna to Boeing Business Jet ASP: $750-$850 / seat Compet
Slide 10: Establishing Market Leadership
Establishing Market Leadership EP&M: Airframe Power Traditional Wiring System Intelligent Power Management Systems Solid-state systems replace extensive wiring and traditional electromechanical components with modular electronics & software Increased Reliability MFDS Screen Reduced Weight Auto
Slide 11: Specialize in High-End Seat Technology
Specialize in High-End Seat Technology EP&M: Seat Actuation Gen VI Smart Motion System Gen V Nano Smart Motion System © 2016 by Astronics Corporation 11
Slide 12: Established Position on 777X and 737 MAX
Established Position on 777X and 737 MAX Lighting and Safety: Passenger Service Units (PSUs) Lights, Speakers, Signage Oxygen Masks Air Ventilation System Creating value through innovation by redesign of full air ventilation system Largest PECO customer: Boeing 777 - approximately $235k in
Slide 13: Unique Product Offering
Unique Product Offering Lighting and Safety: Aircraft Lighting Exterior Lighting Systems Cabin Lighting Systems Cockpit Lighting Systems Beacon & Formation Emergency Egress Panels Taxi & Landing Lighting Avionics HMI Position / Anti-Collision Emergency Signs Lighting Controllers Pi
Slide 14: Industry Leading Technologies
Industry Leading Technologies Avionics: Databus Solutions Aircraft Interface Device Data/protocol conversion (AID): Translation devices that enable varying system protocols Gather aircraft data to communicate Data concentration/separation Run custom software or a Interface between EFB variet
Slide 15: Connectivity Solutions
Connectivity Solutions Avionics: Antenna Systems Satellite-Based Broadband Cost effective solutions for in-flight internet and TV connectivity Ku-band: leading technology, lower cost, flexible applications, efficient, upgrading Suited for commercial, business, VVIP and military aircraft applic
Slide 16: Specialized Capabilities
Specialized Capabilities Avionics: In-flight Entertainment for VVIP Large private and government jets $2 million to $10 million per install UHD Media Center ♦ First aeronautical player with 4K Ultra HD technology © 2016 by Astronics Corporation 16
Slide 17: Engineering Solutions
Engineering Solutions Systems Certification A leading provider of engineering, design and certification solutions for commercial aircraft Specialize in connectivity, in-flight entertainment, electrical power systems and off-seat power solutions Customers include Panasonic and Gogo New capabi
Slide 18: Aerospace Segment: Well Positioned
Aerospace Segment: Well Positioned Wide range of high profile next generation aircraft platforms Embraer Phenom 100/300: Boeing 787: Pilatus PC-24: Exterior lighting Passenger power & fuel doors Airframe power & induction starter generator UH-60 Blackhawk: Boeing 737 NG & BSI: Exterior cockpit light
Slide 19: Test Systems
Test Systems Leading provider of highly engineered automated test systems, subsystems and instruments for the commercial and defense markets Strong capabilities of both hardware and software expertise Family of test systems support all levels of performance verification Solutions for massively
Slide 20: Test Systems Advantages & Opportunities
Test Systems Advantages & Opportunities Shortened Time to Volume Rapid test development and deployment Reduced Cost of Test massively parallel, system level test dramatically reduces cost of test (COT) Innovative Test Solutions “Engineer to engineer” design and manufacturing philosophy Opportunities
Slide 21: Financials
FINANCIALS © 2016 by Astronics Corporation
Slide 22: Sales & Bookings
Sales & Bookings ($ in millions, except EPS) Sales Annual Bookings $665- $661.0 $692.3 $710¹ $674.7 $584.5 $588.5 $339.9 $357.5 $266.4 $271.2 2014 YTD Q1 $159.5 $495.0 2012 2013 2014 2015 2016E 2012 2013 2014 2015 Q1 2016 TTM $0.87 $1.08 $2.16 $2.55 Diluted EPS² ¹ Guidance provided as of May 4, 2016
Slide 23: Solid Margins
Solid Margins ($ in millions) Gross Profit & Margin Operating Profit & Margin $187.9 $187.3 $167.0 $98.8 $98.9 $87.4 $87.9 $69.4 $42.3 $32.6 26.1% 25.8% 25.3% 27.1% 27.1% 12.2% 12.4% 13.2% 14.3% 14.3% 2012 2013 2014 2015 Q1 2016 2012 2013 2014 2015 Q1 2016 TTM TTM © 2016 by Astronics Corporation 23
Slide 24: Develop and Capitalize on Technical Expertise
Develop and Capitalize on Technical Expertise ($ in millions) Engineering & Majority focused on customer Development Expense specific projects Identify market opportunities $90.1 ~$90.0 $76.7 Develop/acquire technical capability $52.8 Earn higher returns by providing $44.9 innovative solutio
Slide 25: Strong Balance Sheet
Strong Balance Sheet ($ in millions) Cash & Cash Equivalents Cash From Operations $54.6 $99.9 $78.5 $21.2 $49.5 $52.3 $18.6 $15.8 2013 2014 2015 Q1 2016 2013 2014 2015 Q1 2016 TTM Funded Debt & Capital Expenditures Shareholders’ Equity $40.9 $169.8 $172.3 $183.0 $20-$25 $200.3 $18.6 $300.2 $311.0 $6
Slide 26: Financial Strategy and Priorities
Financial Strategy and Priorities Maintain a strong, flexible balance sheet for growth Capital allocation priorities: 1. Organic growth 2. Acquisitions 3. Pay down debt 4. Stock repurchases Tolerance for debt: 2x - 3x Willing to flex up Maintenance CapEx: $20 million to $25 million CapEx
Slide 27: Drexel Hamilton Aerospace & Defense Conference
Drexel Hamilton Aerospace & Defense Conference June 9, 2016 © 2016 by Astronics Corporation NASDAQ: ATRO
Slide 28: Supplemental Slides
Supplemental Slides © 2016 by Astronics Corporation
Slide 29: Major Competitors
Major Competitors Electrical Power & Motion • Airbus KID – Systeme • Zodiac • Hamilton • Honeywell Sundstrand/UTC • OEM internal processes • Crane Aerospace Lighting & Safety • Zodiac • Goodrich • Honeywell • Whelen • Esterline • Diehl Aerospace • Hamilton Sundstrand/UTC • Numerous smaller suppliers
Slide 30: Astronics Locations
Astronics Locations Everett, WA East Aurora, NY Avionics Databus Solutions Corporate Headquarters Aircraft Lighting Montreal, Quebec Clackamas, OR Aircraft Lighting PSUs & Structures Kirkland, WA Itasca, IL Enhanced Vision Airframe Power In-flight Connectivity Systems In-seat Power S
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