Financial Data and Key Metrics Changes - Sales for the second quarter were just under $205 million, up 3.3% from the previous year, driven by record sales in the Aerospace segment, which offset lower Test segment sales [5][6] - Year-to-date sales reached $411 million, a 7.2% increase from $383 million last year, indicating solid sales momentum [6] - Adjusted EBITDA for the quarter was $25.4 million, or 12.4% of sales, reflecting improved profitability from higher volume and productivity in the Aerospace segment [16][17] - GAAP earnings per share remained unchanged at $0.04, while non-GAAP adjusted EPS nearly doubled to $0.38 from $0.20 in the prior year [16] Business Line Data and Key Metrics Changes - Aerospace segment sales reached a record $193.6 million, a 9% increase year-over-year, primarily driven by a 13% increase in commercial transport sales and an 11% increase in military sales [17] - The Test segment reported sales of $11.1 million, significantly impacted by a $6.4 million adjustment related to estimated costs at completion of certain projects, resulting in an adjusted operating loss of $6.6 million [18] Market Data and Key Metrics Changes - The market demand for Aerospace products remains strong, with a positive book-to-bill ratio of 1.11 for 2025 and 1.02 for the last twelve months [7] - The company expects a strong second half of 2025, driven by increasing passenger traffic, aircraft utilization, and adoption of modern passenger entertainment systems [25] Company Strategy and Development Direction - The company is focusing on simplifying its operations by exiting non-core product lines, which resulted in $6.2 million of restructuring charges [10] - A small acquisition in the Aerospace segment, Envoy Aerospace, is expected to enhance competitive differentiation by providing FAA certification approval authority [13] - The company is committed to disciplined capital allocation and continuous improvement to drive further margin expansion [24] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong tailwinds in the Aerospace industry and expects solid improvement in the Test business based on recent bookings [25] - The company is increasing its 2025 revenue guidance to $840 million to $860 million, reflecting a 6.9% year-over-year increase at the midpoint [26] - Management acknowledged challenges related to tariffs but believes mitigation efforts can significantly reduce the impact [23][39] Other Important Information - The company closed eight facilities in recent years to reduce its footprint and simplify operations [11] - Capital expenditures for the quarter were low at $4.7 million, but the company expects total CapEx for the year to be in the range of $40 million to $50 million [22] Q&A Session Summary Question: Drivers of Aerospace Momentum and Test Business Outlook - Management highlighted production rates and strong demand in both commercial and military sectors as key drivers for Aerospace momentum, while the Test business is expected to improve despite delays in the US Army radio test program [28][30][31] Question: Margin Expectations for the Year - Management indicated that while tariffs present an unknown, they are optimistic about maintaining adjusted operating margins above 16% in the Aerospace segment, supported by pricing increases and volume growth [35][39] Question: Strategic Alternatives for the Test Segment - Management stated there are no immediate plans to evaluate strategic alternatives for the Test segment, focusing instead on improving performance and outlook for the business [54][55]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Peter J. Gundermann highlighted a solid Q2 2025 with revenue stabilizing above **$200 million**, strategic actions to improve future earnings by divesting low-margin/low-growth product lines, and a significant adjustment to estimated costs for Test business projects, expressing confidence in the company's future positioning due to supportive market conditions and simplification efforts - Revenue stabilized above **$200 million** per quarter, indicating continued progress[3](index=3&type=chunk) - Strategic actions taken to improve future earnings power include stepping away from low-margin and low-growth product lines after a company-wide portfolio review[3](index=3&type=chunk) - A meaningful increase in the estimate to complete for some projects in the Test business masked restructuring progress[3](index=3&type=chunk) [Q2 2025 Financial Highlights](index=1&type=section&id=Q2%202025%20Financial%20Highlights) Astronics Corporation reported a **3.3%** increase in Q2 sales to **$204.7 million**, driven by record Aerospace segment growth of **9.4%** to **$193.6 million**, with net income at **$1.3 million** (**$0.04**/diluted share) and adjusted EBITDA at **$25.4 million** (**12.4%** of sales), also raising the lower end of its 2025 revenue guidance Q2 2025 Key Financial Highlights | Metric | Q2 2025 | Q2 2024 | % Change | | :----- | :------ | :------ | :------- | | Sales | $204.7 million | $198.1 million | 3.3% | | Aerospace Sales | $193.6 million | N/A | 9.4% | | Net Income | $1.3 million | N/A | N/A | | Diluted EPS | $0.04 | N/A | N/A | | Adjusted EBITDA | $25.4 million | N/A | N/A | | Adjusted EBITDA Margin | 12.4% | N/A | N/A | - Raised lower end of revenue guidance to range of **$840 million to $860 million** for 2025[4](index=4&type=chunk) [Consolidated Financial Results](index=2&type=section&id=Consolidated%20Financial%20Results) [Second Quarter 2025 Performance Overview](index=2&type=section&id=Second%20Quarter%202025%20Results) Consolidated sales for Q2 2025 increased **3.3%** to **$204.7 million**, primarily due to **9.4%** growth in the Aerospace segment, which offset a decline in Test Systems sales, though revisions to estimated costs for long-term mass transit contracts in Test Systems negatively impacted consolidated sales by **$6.4 million** Consolidated Sales Performance (Three Months Ended) | Metric | June 28, 2025 (in thousands of dollars) | June 29, 2024 (in thousands of dollars) | % Change | | :----- | :-------------------------------------- | :-------------------------------------- | :------- | | Sales | $204,678 | $198,114 | 3.3% | - Aerospace sales increased **$16.7 million**, or **9.4%**, offsetting a **$10.1 million** decline in Test Systems sales[7](index=7&type=chunk) - Consolidated sales were negatively impacted by **$6.4 million** due to revisions of estimated costs to complete certain long-term mass transit contracts in the Test Systems segment[7](index=7&type=chunk) [Gross Profit Analysis](index=2&type=section&id=Gross%20Profit%20Analysis) Gross profit decreased by **$2.7 million** to **$52.8 million** (**25.8%** of sales) in Q2 2025, primarily due to a **$6.9 million** impact from revisions of estimated costs for Test Systems contracts and **$5.8 million** in charges from Aerospace simplification initiatives, though adjusted gross profit improved to **$59.7 million** (**29.2%** of sales) due to higher volume and productivity Consolidated Gross Profit Performance (Three Months Ended) | Metric | June 28, 2025 (in thousands of dollars) | June 29, 2024 (in thousands of dollars) | % Change | | :----- | :-------------------------------------- | :-------------------------------------- | :------- | | Gross Profit | $52,827 | $55,568 | (4.9)% | | Gross Margin | 25.8% | 28.0% | (2.2) ppts | - Gross profit was negatively impacted by a **$6.9 million** revision of estimated costs for Test Systems contracts and **$5.8 million** in charges for Aerospace simplification initiatives[8](index=8&type=chunk) - Adjusted gross profit improved to **$59.7 million** (**29.2%** of sales) from **28.0%** in the prior year, driven by higher volume and improving productivity[8](index=8&type=chunk) [Operating Income Analysis](index=2&type=section&id=Operating%20Income%20Analysis) Consolidated operating income decreased by **$2.8 million** to **$4.8 million** (**2.3%** of sales) in Q2 2025, largely impacted by a **$6.9 million** revision of estimated costs, while adjusted operating income, excluding these impacts, increased significantly to **$18.3 million** (**8.9%** of sales) from **$12.6 million** (**6.4%** of sales) in the prior year, reflecting margin gains from increased volume and productivity in Aerospace, and cost rationalization in Test Systems Consolidated Operating Income Performance (Three Months Ended) | Metric | June 28, 2025 (in thousands of dollars) | June 29, 2024 (in thousands of dollars) | % Change | | :----- | :-------------------------------------- | :-------------------------------------- | :------- | | Income from Operations | $4,758 | $7,550 | (37.0)% | | Operating Margin % | 2.3% | 3.8% | (1.5) ppts | - The revision of estimated costs had a **$6.9 million** impact on operating income[9](index=9&type=chunk) - Adjusted operating income increased to **$18.3 million** (**8.9%** of sales) from **$12.6 million** (**6.4%** of sales) in Q2 2024, reflecting margin gain on increased volume and improved productivity in Aerospace, and realized savings from Test Systems cost rationalization[9](index=9&type=chunk) [Net Income and EPS Analysis](index=2&type=section&id=Net%20Income%20and%20EPS%20Analysis) Consolidated net income for Q2 2025 was **$1.3 million** (**$0.04** per diluted share), a slight decrease from **$1.5 million** in the prior year, though adjusted net income significantly increased by **$6.5 million** to **$13.7 million** (**$0.38** per diluted share), driven by stronger profitability and lower interest expense due to refinancing Consolidated Net Income and EPS (Three Months Ended) | Metric | June 28, 2025 (in thousands of dollars) | June 29, 2024 (in thousands of dollars) | % Change | | :----- | :-------------------------------------- | :-------------------------------------- | :------- | | Net Income (Loss) | $1,314 | $1,533 | (14.3)% | | Diluted EPS | $0.04 | $0.04 | 0.0% | - Adjusted net income for Q2 2025 increased **$6.5 million** to **$13.7 million**, or **$0.38** per diluted share, due to stronger profitability and lower interest expense[11](index=11&type=chunk) [Adjusted Non-GAAP Financial Measures](index=2&type=section&id=Adjusted%20Non-GAAP%20Financial%20Measures) Consolidated adjusted EBITDA increased **25.5%** to **$25.4 million**, representing **12.4%** of consolidated sales, reflecting improved core operating performance despite GAAP figures being impacted by specific charges Consolidated Adjusted EBITDA (Three Months Ended) | Metric | June 28, 2025 (in thousands of dollars) | June 29, 2024 (in thousands of dollars) | % Change | | :----- | :-------------------------------------- | :-------------------------------------- | :------- | | Adjusted EBITDA | $25,408 | $20,243 | 25.5% | | Adjusted EBITDA Margin % | 12.4% | 10.2% | 2.2 ppts | - Adjusted EBITDA increased **25.5%** to **$25.4 million**, reaching **12.4%** of consolidated sales[11](index=11&type=chunk) [Bookings and Backlog](index=3&type=section&id=Bookings%20and%20Backlog) Q2 2025 bookings were **$177.0 million**, resulting in a book-to-bill ratio of **0.86:1**, with trailing twelve-month bookings totaling **$841.8 million** and a book-to-bill ratio of **1.02:1**, and backlog at quarter-end standing at **$645.4 million** Consolidated Bookings and Backlog | Metric | Q2 2025 | Trailing Twelve Months | | :----- | :------ | :--------------------- | | Bookings | $177.0 million | $841.8 million | | Book-to-bill ratio | 0.86:1 | 1.02:1 | | Backlog | $645.4 million | N/A | [Segment Performance](index=3&type=section&id=Segment%20Performance) [Aerospace Segment Review](index=3&type=section&id=Aerospace%20Segment%20Review) The Aerospace segment achieved record sales of **$193.6 million** in Q2 2025, a **9.4%** increase, driven by strong demand in Commercial Transport and Military Aircraft markets, and despite a decrease in GAAP operating profit due to one-time charges, adjusted operating profit significantly improved to **16.3%** of sales - Record Aerospace segment sales of **$193.6 million**, an increase of **9.4%**[12](index=12&type=chunk) - Adjusted Aerospace operating profit was **$31.5 million**, or **16.3%** of sales, up **300 basis points** from the comparator quarter[13](index=13&type=chunk) [Sales by Market](index=3&type=section&id=Aerospace%20Sales%20by%20Market) Aerospace Sales by Market (Three Months Ended) | Market | Q2 2025 Sales (in thousands of dollars) | Q2 2024 Sales (in thousands of dollars) | % Change | | :----- | :-------------------------------------- | :-------------------------------------- | :------- | | Commercial Transport | $145,573 | $128,399 | 13.4% | | Military Aircraft | $27,433 | $24,781 | 10.7% | | General Aviation | $18,370 | $19,015 | (3.4)% | - Growth in Commercial Transport was primarily related to increased demand by airlines for cabin power and inflight entertainment & connectivity (IFEC) products[12](index=12&type=chunk) [Sales by Product Line](index=11&type=section&id=Aerospace%20Sales%20by%20Product%20Line) Aerospace Sales by Product Line (Three Months Ended) | Product Line | Q2 2025 Sales (in thousands of dollars) | Q2 2024 Sales (in thousands of dollars) | % Change | | :----------- | :-------------------------------------- | :-------------------------------------- | :------- | | Electrical Power & Motion | $95,166 | $90,328 | 5.4% | | Lighting & Safety | $52,999 | $46,454 | 14.1% | | Avionics | $37,050 | $28,971 | 27.9% | [Operating Profit](index=3&type=section&id=Aerospace%20Operating%20Profit) Aerospace Operating Profit (Three Months Ended) | Metric | Q2 2025 | Q2 2024 | | :----- | :------ | :------ | | Operating Profit | $18.0 million | $19.3 million | | Operating Margin | 9.3% | 10.9% | - Operating profit decreased due to a **$6.2 million** charge for simplification initiatives, a **$3.5 million** legal fee reimbursement charge, and a **$1.0 million** warranty expense true-up[13](index=13&type=chunk) [Bookings and Backlog](index=3&type=section&id=Aerospace%20Bookings%20and%20Backlog) Aerospace Bookings and Backlog (Q2 2025) | Metric | Q2 2025 | | :----- | :------ | | Bookings | $150.6 million | | Book-to-bill ratio | 0.78:1 | | Backlog | $570.9 million | [Test Systems Segment Review](index=3&type=section&id=Test%20Systems%20Segment%20Review) The Test Systems segment experienced a significant sales decline of **$10.1 million** to **$11.1 million** in Q2 2025, primarily due to a **$6.4 million** negative impact from revisions of estimated costs for long-term mass transit contracts, reporting an increased operating loss of **$6.7 million**, which was detrimentally impacted by a **$6.9 million** adjustment to estimated costs - Test Systems segment sales were **$11.1 million**, down **$10.1 million** from the prior-year quarter[14](index=14&type=chunk) - Segment sales were negatively impacted by **$6.4 million** due to revisions of estimated costs to complete certain long-term mass transit Test contracts[14](index=14&type=chunk) - Test Systems segment operating loss was **$6.7 million**, compared with an operating loss of **$5.3 million** in Q2 2024[15](index=15&type=chunk) [Sales Performance](index=3&type=section&id=Test%20Systems%20Sales%20Performance) Test Systems Sales (Three Months Ended) | Metric | Q2 2025 Sales (in thousands of dollars) | Q2 2024 Sales (in thousands of dollars) | % Change | | :----- | :-------------------------------------- | :-------------------------------------- | :------- | | Test Systems Sales | $11,052 | $21,171 | (47.8)% | [Operating Loss](index=4&type=section&id=Test%20Systems%20Operating%20Loss) Test Systems Operating Loss (Three Months Ended) | Metric | Q2 2025 | Q2 2024 | | :----- | :------ | :------ | | Operating Loss | $6.7 million | $5.3 million | - The revisions to estimated costs to complete had a **$6.9 million** detrimental impact to operating income, masking savings from restructuring activities[15](index=15&type=chunk) - The second half of 2025 is expected to improve for revenue and operating income despite a six-to-eight-week delay in a U.S. Army radio test program[15](index=15&type=chunk) [Bookings and Backlog](index=4&type=section&id=Test%20Systems%20Bookings%20and%20Backlog) Test Systems Bookings and Backlog (Q2 2025) | Metric | Q2 2025 | | :----- | :------ | | Bookings | $26.4 million | | Book-to-bill ratio | 2.39:1 | | Backlog | $74.5 million | [Financial Position & Outlook](index=4&type=section&id=Financial%20Position%20%26%20Outlook) [Liquidity and Financing](index=4&type=section&id=Liquidity%20and%20Financing) Cash used by operations in Q2 2025 was **$7.6 million**, including **$21.6 million** for patent dispute payments and **$12.0 million** in tax payments, with capital expenditures at **$4.6 million**, long-term debt (net of cash) decreasing by **$4.4 million** to **$145.8 million**, and **$191.3 million** in available liquidity maintained - Cash used by operations in Q2 2025 was **$7.6 million**, including **$21.6 million** for UK patent dispute payments and **$12.0 million** in net income tax payments[18](index=18&type=chunk) - Long-term debt, net of cash, decreased **$4.4 million** to **$145.8 million** at quarter end[18](index=18&type=chunk) - Available liquidity at the end of Q2 was **$191.3 million**[18](index=18&type=chunk) [2025 Outlook](index=4&type=section&id=2025%20Outlook) Astronics raised the lower end of its 2025 revenue guidance to **$840 million to $860 million**, with the midpoint representing a **6.9%** increase over 2024 sales, anticipating potential tariff impacts of **$15 million to $20 million** on annual material costs but expecting significant mitigation, and projecting approximately **75%** of the **$645.4 million** backlog to be recognized as revenue in the next twelve months, with planned capital expenditures between **$40 million and $50 million** - Raised 2025 revenue guidance to **$840 million to $860 million**, with the midpoint representing a **6.9%** increase over 2024 sales[19](index=19&type=chunk) - Potential incremental impact of tariffs on annual costs of materials is estimated at **$15 million to $20 million** before mitigation[20](index=20&type=chunk) - Approximately **75%** of the **$645.4 million** backlog is expected to be recognized as revenue over the next twelve months[21](index=21&type=chunk) - Planned capital expenditures in 2025 are expected to be in the range of **$40 million to $50 million**[21](index=21&type=chunk) [Company Information & Disclosures](index=5&type=section&id=Company%20Information%20%26%20Disclosures) [Webcast and Conference Call](index=5&type=section&id=Second%20Quarter%202025%20Webcast%20and%20Conference%20Call) Astronics Corporation hosted a teleconference on August 6, 2025, at 4:45 p.m. ET to discuss financial and operating results, corporate strategy, and outlook, with replay information for both telephonic and webcast access provided - A teleconference was held on August 6, 2025, at 4:45 p.m. ET to review financial and operating results, corporate strategy, and outlook[23](index=23&type=chunk) - Access details for the live call and archived replay (telephonic and webcast) were provided[24](index=24&type=chunk) [About Astronics Corporation](index=5&type=section&id=About%20Astronics%20Corporation) Astronics Corporation (Nasdaq: ATRO) is a leading supplier of advanced technology solutions to the global aerospace, defense, and other mission-critical industries, providing innovative solutions in power, connectivity, lighting, structures, interiors, and test technologies for over 50 years, aiming to increase value by developing innovative solutions for its target markets - Astronics Corporation (Nasdaq: ATRO) serves the global aerospace, defense, and other mission-critical industries[25](index=25&type=chunk) - The company provides innovative technology solutions in power, connectivity, lighting, structures, interiors, and test technologies[25](index=25&type=chunk) - Strategy is to increase value by developing technologies and capabilities that provide innovative solutions to targeted markets[25](index=25&type=chunk) [Safe Harbor Statement](index=5&type=section&id=Safe%20Harbor%20Statement) This section clarifies that the news release contains forward-looking statements, identifiable by terms like 'expect,' 'anticipate,' or 'plan,' which are subject to risks and uncertainties that could cause actual results to differ materially, and the company disclaims any obligation to update these statements, except as required by law - The news release contains forward-looking statements, identifiable by specific keywords, regarding future events and financial expectations[26](index=26&type=chunk) - These statements are subject to risks and uncertainties that could cause actual results to differ materially[26](index=26&type=chunk) - The Company assumes no obligation to update forward-looking information, except as required by applicable law[26](index=26&type=chunk) [Use of Non-GAAP Financial Metrics](index=6&type=section&id=Use%20of%20Non-GAAP%20Financial%20Metrics) Astronics provides Adjusted Non-GAAP financial measures as supplementary information to GAAP results, which management uses for internal review, budget planning, and operational decisions, believing they help investors evaluate core operating and financial performance consistent with management's perspective - Adjusted Non-GAAP information is provided as additional information to GAAP results[27](index=27&type=chunk) - These measures are not GAAP-compliant and may differ from those used by other companies[27](index=27&type=chunk) - Management uses these measures for budget planning and operational/financial decisions, believing they help investors evaluate core performance[27](index=27&type=chunk) [Financial Statements (Tables)](index=7&type=section&id=Financial%20Statements%20(Tables)) [Consolidated Statement of Operations](index=7&type=section&id=CONSOLIDATED%20STATEMENT%20OF%20OPERATIONS%20DATA) Presents the consolidated income statement data for the three and six months ended June 28, 2025, and June 29, 2024, detailing sales, cost of products sold, gross profit, operating expenses, income from operations, interest expense, and net income Consolidated Statement of Operations Data | Metric | Three Months Ended 6/28/2025 (in thousands of dollars) | Three Months Ended 6/29/2024 (in thousands of dollars) | Six Months Ended 6/28/2025 (in thousands of dollars) | Six Months Ended 6/29/2024 (in thousands of dollars) | | :-------------------------------- | :-------------------------------------- | :-------------------------------------- | :-------------------------------------- | :-------------------------------------- | | Sales | $204,678 | $198,114 | $410,614 | $383,188 | | Gross profit | $52,827 | $55,568 | $113,676 | $103,082 | | Income from operations | $4,758 | $7,550 | $17,895 | $9,216 | | Net income (loss) | $1,314 | $1,533 | $10,842 | $(1,645) | | Diluted earnings (loss) per share | $0.04 | $0.04 | $0.30 | $(0.05) | [Consolidated Balance Sheets](index=8&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) Provides a snapshot of the company's financial position as of June 28, 2025, and December 31, 2024, including assets, liabilities, and shareholders' equity Consolidated Balance Sheets Data | Metric | 6/28/2025 (in thousands of dollars) | 12/31/2024 (in thousands of dollars) | | :-------------------------------- | :---------------------------------- | :----------------------------------- | | Total current assets | $418,709 | $426,172 | | Total assets | $646,688 | $648,764 | | Total current liabilities | $137,883 | $156,152 | | Long-term debt | $159,276 | $168,669 | | Total liabilities | $375,117 | $392,667 | | Total shareholders' equity | $271,571 | $256,097 | [Consolidated Cash Flows](index=9&type=section&id=CONSOLIDATED%20CASH%20FLOWS%20DATA) Details the cash flows from operating, investing, and financing activities for the six months ended June 28, 2025, and June 29, 2024, showing a net cash provided by operating activities in 2025 compared to cash used in 2024 Consolidated Cash Flows Data (Six Months Ended) | Metric | 6/28/2025 (in thousands of dollars) | 6/29/2024 (in thousands of dollars) | | :-------------------------------- | :---------------------------------- | :---------------------------------- | | Net cash provided (used) by operating activities | $13,008 | $(4,223) | | Net cash used by investing activities | $(6,710) | $(3,394) | | Net cash (used) provided by financing activities | $(12,546) | $805 | | Cash and cash equivalents and restricted cash at end of period | $13,460 | $4,392 | [Segment Sales and Profit](index=10&type=section&id=SEGMENT%20SALES%20AND%20PROFIT) Presents sales, gross profit, and operating profit broken down by the Aerospace and Test Systems segments for the three and six months ended June 28, 2025, and June 29, 2024 Segment Sales and Profit Data | Segment/Metric | Three Months Ended 6/28/2025 (in thousands of dollars) | Three Months Ended 6/29/2024 (in thousands of dollars) | Six Months Ended 6/28/2025 (in thousands of dollars) | Six Months Ended 6/29/2024 (in thousands of dollars) | | :------------- | :-------------------------------------- | :-------------------------------------- | :-------------------------------------- | :-------------------------------------- | | **Sales** | | | | | | Aerospace | $193,626 | $176,943 | $385,001 | $340,581 | | Test Systems | $11,052 | $21,171 | $25,613 | $42,607 | | **Gross Profit** | | | | | | Aerospace | $54,891 | $54,019 | $113,374 | $98,400 | | Test Systems | $(2,064) | $1,549 | $302 | $4,682 | | **Operating Profit (Loss)** | | | | | | Aerospace | $18,039 | $19,280 | $40,303 | $31,377 | | Test Systems | $(6,710) | $(5,336) | $(8,933) | $(8,415) | [Sales by Market](index=11&type=section&id=SALES%20BY%20MARKET) Details sales figures for the Aerospace segment across Commercial Transport, Military Aircraft, and General Aviation markets, and for the Test Systems segment in Government & Defense, for both three and six months ended June 28, 2025, and June 29, 2024 Sales by Market Data | Market | Three Months Ended 6/28/2025 (in thousands of dollars) | Three Months Ended 6/29/2024 (in thousands of dollars) | % Change (3M) | Six Months Ended 6/28/2025 (in thousands of dollars) | Six Months Ended 6/29/2024 (in thousands of dollars) | % Change (6M) | 2025 YTD % of Sales | | :----------------- | :-------------------------------------- | :-------------------------------------- | :------------ | :-------------------------------------- | :-------------------------------------- | :------------ | :------------------ | | Commercial Transport | $145,573 | $128,399 | 13.4% | $283,115 | $249,829 | 13.3% | 69.0% | | Military Aircraft | $27,433 | $24,781 | 10.7% | $60,696 | $41,860 | 45.0% | 14.8% | | General Aviation | $18,370 | $19,015 | (3.4)% | $33,613 | $38,566 | (12.8)% | 8.2% | | Government & Defense (Test Systems) | $11,052 | $21,171 | (47.8)% | $25,613 | $42,607 | (39.9)% | 6.2% | [Sales by Product Line](index=11&type=section&id=SALES%20BY%20PRODUCT%20LINE) Provides a breakdown of sales by product line within the Aerospace segment (Electrical Power & Motion, Lighting & Safety, Avionics, Systems Certification, Structures, Other) and for the Test Systems segment, for the three and six months ended June 28, 2025, and June 29, 2024 Sales by Product Line Data | Product Line | Three Months Ended 6/28/2025 (in thousands of dollars) | Three Months Ended 6/29/2024 (in thousands of dollars) | % Change (3M) | Six Months Ended 6/28/2025 (in thousands of dollars) | Six Months Ended 6/29/2024 (in thousands of dollars) | % Change (6M) | 2025 YTD % of Sales | | :------------------------ | :-------------------------------------- | :-------------------------------------- | :------------ | :-------------------------------------- | :-------------------------------------- | :------------ | :------------------ | | Electrical Power & Motion | $95,166 | $90,328 | 5.4% | $195,246 | $173,452 | 12.6% | 47.7% | | Lighting & Safety | $52,999 | $46,454 | 14.1% | $102,670 | $88,241 | 16.4% | 25.0% | | Avionics | $37,050 | $28,971 | 27.9% | $65,284 | $54,565 | 19.6% | 15.9% | | Test Systems Segment | $11,052 | $21,171 | (47.8)% | $25,613 | $42,607 | (39.9)% | 6.2% | [Order and Backlog Trend](index=12&type=section&id=ORDER%20AND%20BACKLOG%20TREND) Presents quarterly sales, bookings, and backlog data for the Aerospace and Test Systems segments, as well as consolidated totals, for Q3 2024 through Q2 2025, including trailing twelve-month figures and book-to-bill ratios Order and Backlog Trend Data | Metric | Q3 2024 (in thousands of dollars) | Q4 2024 (in thousands of dollars) | Q1 2025 (in thousands of dollars) | Q2 2025 (in thousands of dollars) | Trailing Twelve Months (in thousands of dollars) | | :----------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :--------------------------------------- | | Total Sales | $203,698 | $208,540 | $205,936 | $204,678 | $822,852 | | Total Bookings | $189,166 | $195,904 | $279,726 | $177,026 | $841,822 | | Total Backlog | $611,865 | $599,229 | $673,019 | $645,367 | N/A | | Total Book:Bill Ratio | 0.93 | 0.94 | 1.36 | 0.86 | 1.02 | [Reconciliation of Non-GAAP Financial Measures](index=13&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section provides detailed reconciliations of GAAP financial measures to various Adjusted Non-GAAP financial measures, including Adjusted EBITDA, Adjusted Gross Profit, Adjusted Operating Income, Adjusted Net Income, Adjusted Diluted EPS, and Adjusted Segment Operating Profit, for the reported periods, with these adjustments accounting for specific non-recurring or non-operational items to provide a clearer view of core performance [Adjusted EBITDA Reconciliation](index=13&type=section&id=RECONCILIATION%20OF%20NET%20INCOME%20(LOSS)%20TO%20ADJUSTED%20EBITDA) Reconciliation of Net Income (Loss) to Adjusted EBITDA | Metric | Three Months Ended 6/28/2025 (in thousands of dollars) | Three Months Ended 6/29/2024 (in thousands of dollars) | Six Months Ended 6/28/2025 (in thousands of dollars) | Six Months Ended 6/29/2024 (in thousands of dollars) | | :-------------------------------- | :-------------------------------------- | :-------------------------------------- | :-------------------------------------- | :-------------------------------------- | | Net income (loss) | $1,314 | $1,533 | $10,842 | $(1,645) | | Add back: Interest expense | $3,097 | $5,856 | $6,247 | $11,615 | | Add back: Income tax expense (benefit) | $537 | $(274) | $1,183 | $(1,625) | | Add back: Depreciation and amortization expense | $5,378 | $6,203 | $10,966 | $12,531 | | Add back: Simplification and restructuring initiatives | $6,229 | $657 | $6,508 | $774 | | Add back: Legal reserve, settlements and recoveries | $3,504 | — | $9,732 | — | | Add back: Litigation-related legal expenses | $2,753 | $4,428 | $5,728 | $8,122 | | Add back: Warranty reserve | $1,039 | — | $1,039 | — | | Adjusted EBITDA | $25,408 | $20,243 | $56,147 | $37,868 | | Adjusted EBITDA margin % | 12.4% | 10.2% | 13.7% | 9.9% | [Adjusted Gross Profit Reconciliation](index=14&type=section&id=RECONCILIATION%20OF%20GROSS%20PROFIT%20TO%20ADJUSTED%20GROSS%20PROFIT) Reconciliation of Gross Profit to Adjusted Gross Profit | Metric | Three Months Ended 6/28/2025 (in thousands of dollars) | Three Months Ended 6/29/2024 (in thousands of dollars) | Six Months Ended 6/28/2025 (in thousands of dollars) | Six Months Ended 6/29/2024 (in thousands of dollars) | | :-------------------------------- | :-------------------------------------- | :-------------------------------------- | :-------------------------------------- | :-------------------------------------- | | Gross profit | $52,827 | $55,568 | $113,676 | $103,082 | | Add back: Simplification and restructuring initiatives | $5,807 | — | $5,807 | — | | Add back: Warranty reserve | $1,039 | — | $1,039 | — | | Adjusted gross profit | $59,673 | $55,568 | $120,522 | $103,082 | | Adjusted gross margin | 29.2% | 28.0% | 29.4% | 26.9% | [Adjusted Operating Income Reconciliation](index=15&type=section&id=RECONCILIATION%20OF%20OPERATING%20INCOME%20TO%20ADJUSTED%20OPERATING%20INCOME) Reconciliation of Operating Income to Adjusted Operating Income | Metric | Three Months Ended 6/28/2025 (in thousands of dollars) | Three Months Ended 6/29/2024 (in thousands of dollars) | Six Months Ended 6/28/2025 (in thousands of dollars) | Six Months Ended 6/29/2024 (in thousands of dollars) | | :-------------------------------- | :-------------------------------------- | :-------------------------------------- | :-------------------------------------- | :-------------------------------------- | | Income from operations | $4,758 | $7,550 | $17,895 | $9,216 | | Add back: Simplification and restructuring initiatives | $6,229 | $657 | $6,508 | $774 | | Add back: Legal reserve, settlements and recoveries | $3,504 | — | $9,732 | — | | Add back: Litigation-related legal expenses | $2,753 | $4,428 | $5,728 | $8,122 | | Add back: Warranty reserve | $1,039 | — | $1,039 | — | | Adjusted operating income | $18,283 | $12,635 | $40,902 | $18,112 | | Adjusted operating margin | 8.9% | 6.4% | 10.0% | 4.7% | [Adjusted Net Income and EPS Reconciliation](index=16&type=section&id=RECONCILIATION%20OF%20NET%20INCOME%20(LOSS)%20AND%20DILUTED%20EARNINGS%20(LOSS)%20PER%20SHARE%20TO%20ADJUSTED%20NET%20INCOME%20AND%20ADJUSTED%20DILUTED%20EARNINGS%20PER%20SHARE) Reconciliation of Net Income (Loss) and Diluted EPS to Adjusted Net Income and Adjusted Diluted EPS | Metric | Three Months Ended 6/28/2025 (in thousands of dollars) | Three Months Ended 6/29/2024 (in thousands of dollars) | Six Months Ended 6/28/2025 (in thousands of dollars) | Six Months Ended 6/29/2024 (in thousands of dollars) | | :-------------------------------- | :-------------------------------------- | :-------------------------------------- | :-------------------------------------- | :-------------------------------------- | | Net income (loss) | $1,314 | $1,533 | $10,842 | $(1,645) | | Add back: Amortization of intangibles | $2,945 | $3,269 | $5,920 | $6,539 | | Add back: Simplification and restructuring initiatives | $6,229 | $657 | $6,508 | $774 | | Add back: Legal reserve, settlements and recoveries | $3,504 | — | $9,732 | — | | Add back: Litigation-related legal expenses | $2,753 | $4,428 | $5,728 | $8,122 | | Add back: Warranty reserve | $1,039 | — | $1,039 | — | | Normalize tax rate | $(4,043) | $(2,677) | $(9,055) | $(4,666) | | Adjusted net income | $13,741 | $7,210 | $30,714 | $9,124 | | Adjusted diluted earnings per share | $0.38 | $0.20 | $0.85 | $0.26 | [Adjusted Segment Operating Profit Reconciliation](index=17&type=section&id=RECONCILIATION%20OF%20SEGMENT%20OPERATING%20PROFIT%20TO%20ADJUSTED%20SEGMENT%20OPERATING%20PROFIT) Reconciliation of Segment Operating Profit to Adjusted Segment Operating Profit | Segment/Metric | Three Months Ended 6/28/2025 (in thousands of dollars) | Three Months Ended 6/29/2024 (in thousands of dollars) | Six Months Ended 6/28/2025 (in thousands of dollars) | Six Months Ended 6/29/2024 (in thousands of dollars) | | :-------------------------------- | :-------------------------------------- | :-------------------------------------- | :-------------------------------------- | :-------------------------------------- | | **Aerospace** | | | | | | Aerospace operating profit | $18,039 | $19,280 | $40,303 | $31,377 | | Adjusted Aerospace operating profit | $31,487 | $23,502 | $62,502 | $39,133 | | Adjusted Aerospace margin | 16.3% | 13.3% | 16.2% | 11.5% | | **Test Systems** | | | | | | Test Systems operating loss | $(6,710) | $(5,336) | $(8,933) | $(8,415) | | Adjusted Test Systems operating loss | $(6,633) | $(4,473) | $(8,125) | $(7,275) | | Adjusted Test Systems margin | (60.0)% | (21.1)% | (31.7)% | (17.1)% | [Supplemental Prior Period Adjusted EBITDA](index=18&type=section&id=Supplemental%20Prior%20Period%20Tables) Reconciliation of Net Income (Loss) to Adjusted EBITDA (Trailing Twelve Months Ended 6/28/2025) | Metric | Q3 2024 (in thousands of dollars) | Q4 2024 (in thousands of dollars) | Q1 2025 (in thousands of dollars) | Q2 2025 (in thousands of dollars) | Trailing Twelve Months (6/28/2025) (in thousands of dollars) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :------------------------------------------- | | Net income (loss) | $(11,738) | $(2,832) | $9,528 | $1,314 | $(3,728) | | Adjusted EBITDA | $27,059 | $31,539 | $30,739 | $25,408 | $114,745 | Reconciliation of Net Income (Loss) to Adjusted EBITDA (Trailing Twelve Months Ended 6/29/2024) | Metric | Q3 2023 (in thousands of dollars) | Q4 2023 (in thousands of dollars) | Q1 2024 (in thousands of dollars) | Q2 2024 (in thousands of dollars) | Trailing Twelve Months (6/29/2024) (in thousands of dollars) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :------------------------------------------- | | Net income (loss) | $(16,983) | $6,976 | $(3,178) | $1,533 | $(11,652) | | Adjusted EBITDA | $8,827 | $24,830 | $17,625 | $20,243 | $71,525 |

Core Viewpoint - Astronics Corporation (ATRO) is expected to report second-quarter 2025 results on August 6, with projected revenues of $207.1 million, reflecting a 4.5% year-over-year growth, and earnings estimated at 33 cents per share, indicating a significant 725% increase from the previous year's 4 cents [1][4]. Revenue and Earnings Estimates - The Zacks Consensus Estimate for revenues is $207.1 million, which represents a 4.5% increase from the same quarter last year [1][4]. - The earnings consensus is set at 33 cents per share, suggesting a substantial improvement of 725% from the prior year's figure of 4 cents [1][4]. Segment Performance - The Aerospace segment is anticipated to drive sales growth, with expected sales of $190.2 million, up 7.5% year-over-year, due to increased demand for cabin power, in-flight entertainment, and military aircraft products [5][6]. - The Test Systems unit is projected to see a decline in sales, estimated at $16.9 million, down 20% from the previous year, attributed to delays and cost challenges [7]. Historical Performance - Astronics has a strong earnings surprise history, beating the Zacks Consensus Estimate in three of the last four quarters, with an average surprise of 55.64% [2][3]. Stock Performance and Valuation - ATRO's stock has increased by 84% over the past six months, outperforming the Zacks Aerospace-Defense Equipment industry's gain of 20.5% and the broader sector's rise of 19% [10]. - The forward 12-month price-to-earnings (P/E) ratio for ATRO is 20.21X, which is significantly lower than the peer group's average of 49.78X, indicating a more attractive valuation relative to expected earnings growth [11][14]. Industry Context - The aerospace and defense industry presents substantial growth opportunities, driven by expanding commercial air traffic and a solid presence in the defense sector, which provides a diversified cushion against crises [16]. - However, challenges such as supply chain pressures, raw material costs, and labor availability persist, which could impact performance [15][17].

Industry Overview - Rising global aircraft deliveries, expanding airline fleet sizes, and increasing demand for maintenance, repair, and overhaul (MRO) services are driving growth in the aviation services industry, supported by the recovery in global air travel and defense modernization programs [1] - Investor interest is growing in aerospace service providers like Astronics Corporation (ATRO) and AAR Corp. (AIR) due to these trends [1] Company Profiles - Astronics focuses on advanced aircraft electrical systems, lighting technologies, and connectivity solutions, which are crucial for enhancing passenger experience and cockpit modernization in both commercial and military aircraft [2] - AAR operates as a diversified aviation services provider, offering aftermarket support, parts supply, and integrated solutions to airlines, governments, and defense contractors globally [2] Financial Performance - Astronics ended March 2025 with cash and cash equivalents of $26 million and long-term debt of $160 million, indicating a solid solvency position [4] - AAR's cash and cash equivalents were $96.5 million as of May 31, 2025, with long-term debt totaling $968 million, also reflecting a strong solvency position [6] - Astronics reported an 11.3% year-over-year sales improvement in Q1 2025, driven by a 13.3% surge in sales to the commercial transport market [7] - AAR experienced a 12% increase in sales to commercial customers during its fiscal fourth quarter, supported by strong demand for new parts distribution [7] Growth Drivers - The recovery in air passenger traffic post-COVID-19 has been a primary growth catalyst for both ATRO and AIR [7] - Sales growth in defense-related aerospace parts has also contributed to the top-line performance of both companies, with ATRO seeing a 94.8% improvement in sales to the military aircraft market [8] - AAR benefits from rising MRO activity due to aging aircraft and increased fleet utilization, while Astronics is driven by demand for advanced avionics and aircraft electrification [9] Stock Performance - Over the past three months, ATRO has outperformed AIR with a stock increase of 50.5% compared to AIR's 38.1% [17] - In the past year, ATRO's shares surged 50.4%, while AIR rose 17.8% [17] Valuation and Debt Analysis - Astronics is trading at a forward price/earnings ratio of 20.49X, which is higher than AAR's 16.83X, indicating that AAR may offer a more attractive valuation [18] - A comparative analysis shows that ATRO has a lower long-term debt-to-capital ratio of 37.51% compared to AAR's 44.41%, suggesting ATRO is less leveraged [22][23] Conclusion - Both companies are positioned to benefit from long-term aerospace trends, but Astronics appears better positioned for near-term outperformance due to stronger stock performance and financial discipline [24][25]

Group 1 - Astronics Corporation (ATRO) shares increased by 16.2% to close at $36.11, following a recent upgrade from Truist Securities, which raised its rating from Hold to Buy and increased the price target from $32.00 to $49.00 [1] - The company is expected to report quarterly earnings of $0.33 per share, reflecting a year-over-year increase of 725%, with revenues projected at $207.09 million, up 4.5% from the previous year [2] - The consensus EPS estimate for Astronics has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [3] Group 2 - Astronics is part of the Zacks Aerospace - Defense Equipment industry, where TAT Technologies Ltd. (TATT) also operates, finishing the last trading session down 1.3% at $29.82, but has returned 16.4% over the past month [3] - TAT Technologies' consensus EPS estimate for the upcoming report is $0.29, representing a year-over-year change of 16%, with its Zacks Rank also at 3 (Hold) [4]

Core Insights - Astronics Corporation (ATRO) has acquired Envoy Aerospace for $8 million, enhancing its capabilities in aircraft connectivity and cabin modifications as airlines invest in upgrades [1][3] - The acquisition provides Astronics with a competitive edge in obtaining FAA approvals, strengthening its regulatory capabilities [2] - The deal positions Astronics to capture growth in aerospace retrofits and in-flight entertainment, signaling strategic expansion into high-margin aviation segments [3] Company Performance - Astronics' shares have increased by 126.3% year-to-date, outperforming the Zacks Aerospace-Defense Equipment industry's growth of 22.8% and the broader Zacks Aerospace sector's gain of 23.5% [5][9] - The military aircraft unit of Astronics reported a 95% year-over-year sales improvement, benefiting from increased defense spending due to geopolitical tensions [10] Growth Prospects - Rising global defense budgets driven by geopolitical tensions are increasing demand for military aircraft and related technologies [7] - The demand for advanced cabin power systems and in-flight entertainment solutions is also growing due to surging global air travel [11] - Sales estimates for 2025 and 2026 indicate year-over-year growth of 6.4% and 8.5%, respectively, reflecting solid growth prospects [13] Valuation - Astronics' forward 12-month price-to-earnings (P/E) ratio is 21.54X, which is a discount compared to the industry average of 47.89X, suggesting a favorable valuation for investors [16] - Other industry peers are trading at higher P/E ratios, with Leonardo DRS at 40.31X and Curtiss-Wright Corp. at 35.93X [17] Financial Considerations - Astronics is currently facing elevated debt levels, with a long-term debt-to-capital ratio of 37.51%, higher than the peer group average of 26.94% [20][23] - The company has not seen movement in its near-term earnings estimates over the past 60 days, indicating a cautious outlook from analysts [13]

Core Insights - Increasing global air traffic and robust growth in aftermarket services are driving demand for aerospace technology stocks like Astronics Corporation (ATRO) and HEICO Corporation (HEI) [2] - Heightened geopolitical tensions are leading to increased defense budgets, boosting demand for advanced avionics and aerospace components supplied by ATRO and HEI [2] Company Overview - Astronics specializes in advanced technologies in electrical power, lighting, connectivity, and cabin electronics for commercial and military customers [3] - HEICO is the largest independent aerospace parts manufacturer and supplier of jet engines and aircraft components [3] Financial Stability - Astronics had cash and cash equivalents of $26 million and long-term debt of $160 million as of March 2025, indicating a solid solvency position [5] - HEICO's cash and cash equivalents were $0.24 billion with long-term debt of $2.27 billion as of April 30, 2025, also reflecting strong solvency [6] Growth Catalysts - Both companies are benefiting from recovering air passenger traffic post-COVID-19, with Astronics reporting an 11.3% year-over-year sales increase in Q1 2025, driven by a 13.3% rise in commercial transport sales [7] - HEICO's Flight Support unit achieved 14% organic sales growth in fiscal Q2 2025 due to increased commercial aerospace product sales [7] Defense Sector Performance - Astronics experienced a 94.8% sales increase in the military aircraft market, contributing to its overall sales growth [8] - HEICO's Electronic Technologies Group unit saw a 4% organic sales growth driven by rising demand for defense products [8] Stock Performance - Over the past three months, ATRO's stock increased by 38.4%, outperforming HEI's 21.9% rise [16] - In the past year, ATRO's shares surged 69.8%, while HEI rose 47.6% [16] Valuation Comparison - Astronics is trading at a forward price/earnings ratio of 20.01X, lower than HEI's 66.07X, indicating a more attractive valuation for ATRO [17] - ATRO is less leveraged than HEI, which is advantageous in a supply-chain-constrained environment [19] Return on Equity - ATRO demonstrates a better Return on Equity (ROE) compared to HEI, indicating more efficient profit generation from its equity base [20] Investment Outlook - Both companies are positioned to benefit from long-term aerospace trends, but ATRO's stronger recent performance and better financial metrics suggest it may offer a more compelling investment opportunity [21][25] - HEI's scale and acquisition-driven growth model remain solid, but its higher debt levels and premium valuation may limit near-term upside [25]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Astronics Corporation (ATRO) - Astronics Corporation currently holds a Momentum Style Score of B, indicating a positive outlook based on price changes and earnings estimate revisions [2] - The company has a Zacks Rank of 1 (Strong Buy), suggesting strong potential for outperformance in the market [3] Price Performance - Over the past week, ATRO shares increased by 4.22%, while the Zacks Aerospace - Defense Equipment industry remained flat [5] - In a longer timeframe, ATRO's monthly price change is 9.58%, outperforming the industry's 7.47% [5] - Over the past quarter, ATRO shares rose by 28.87%, and over the last year, they increased by 80.31%, compared to the S&P 500's gains of 7.18% and 10.37%, respectively [6] Trading Volume - The average 20-day trading volume for ATRO is 472,795 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Outlook - Recent earnings estimate revisions show one upward revision for the full year, increasing the consensus estimate from $1.13 to $1.50 over the past 60 days [9] - For the next fiscal year, there has been one upward revision with no downward revisions during the same period [9] Conclusion - Given the positive price performance, strong earnings outlook, and favorable momentum indicators, ATRO is positioned as a 1 (Strong Buy) stock with a Momentum Score of B, making it a compelling investment option [11]

Core Insights - Astronics Corporation (ATRO) shares have increased by 118.4% year-to-date, significantly outperforming the Zacks Aerospace-Defense Equipment industry and the broader Zacks Aerospace sector, which gained 19.3% and the S&P 500's return of 1.2% in the same period [1][9]. Group 1: Performance and Market Trends - Other industry players like Leonardo DRS (DRS) and Curtiss-Wright Corp. (CW) have also shown strong performance, with shares rising 42.8% and 33.4% respectively year-to-date [2]. - The rise in global air travel and defense modernization is driving strong momentum in aerospace technology stocks, including Astronics, prompting potential investor interest [3]. Group 2: Financial Performance and Innovations - Astronics reported preliminary fourth-quarter and full-year 2024 revenues of $208-$210 million (up 7% at the midpoint) and $796 million, reflecting a 15.5% year-over-year increase [5]. - The company launched the SkyShow Server and received the 2025 PAX Award for its EmPower UltraLite G2 Power System, highlighting its innovation in in-flight entertainment and power solutions [6]. - In May, Astronics reported a first-quarter revenue increase of 11.3% year-over-year and a gross profit increase of 28.1%, with record bookings of $279.7 million and a backlog of $673 million as of March 2025 [7][9]. Group 3: Future Growth Prospects - The Zacks Consensus Estimate for ATRO's 2025 sales suggests a year-over-year growth of 6.4%, with 2026 sales expected to improve by 8.5% [13]. - The company is well-positioned to benefit from the growing demand for advanced cabin power systems and in-flight entertainment solutions, as indicated by a 13.3% year-over-year increase in its first-quarter 2025 Commercial Transport sales [11]. Group 4: Valuation and Market Position - ATRO's forward 12-month price-to-earnings (P/E) ratio is 21.10X, which is a discount compared to the industry average of 46.49X, suggesting a favorable valuation for investors [16]. - Competitors DRS and CW are trading at higher P/E ratios of 39.46X and 36.38X respectively, indicating that ATRO may offer better value [17]. Group 5: Investor Sentiment - The stock has a VGM Score of A and a Zacks Rank 1 (Strong Buy), indicating strong investor confidence and potential for continued performance [22].

Core Insights - The article highlights the positive momentum for Astronics Corporation (ATRO) driven by rising order volumes and an improved book-to-bill ratio, indicating potential revenue acceleration in upcoming quarters [1][2][9] Group 1: Company Performance - ATRO has achieved year-over-year bookings growth exceeding 5% for the past four quarters, with a notable 37% increase in bookings for the first quarter of 2025 [1][9] - The book-to-bill ratio for ATRO improved to 1.36X in Q1 2025 from 1.10X in Q4 2024 and 1.11X a year ago, signaling robust demand and a healthy sales pipeline [1][2][9] - The Zacks Consensus Estimate indicates continued year-over-year sales growth for ATRO, with projected sales of $846.29 million for the current year and $918.33 million for the next year, reflecting growth rates of 6.39% and 8.51% respectively [4] Group 2: Industry Context - Increased government defense spending due to rising geopolitical tensions and modernization initiatives is boosting order growth for defense contractors, including ATRO [5] - Other defense companies like Kratos Defense & Security Solutions Inc. (KTOS) and Esco Technologies (ESE) are also showing strong book-to-bill ratios and revenue growth prospects, with KTOS reporting a ratio of 1.2 and ESE's Aerospace & Defense segment at 1.06X [6][7] Group 3: Stock Performance and Valuation - ATRO shares have surged 109.6% year-to-date, significantly outperforming the industry average gain of 19.9% [8][9] - The company is currently trading at a forward 12-month earnings multiple of 20.05X, which is approximately 57% lower than the industry average of 46.84X, indicating a potential undervaluation [10]