Astronics (US:ATRO)2022-08-11 02:35Financial Data and Key Metrics Changes - Second quarter bookings were $148 million, resulting in a book-to-bill ratio of 1.15 and a record backlog of $494 million [5][6] - Revenue for the second quarter was $129 million, an increase from the previous four-quarter average of $114 million, marking the highest volume since the pandemic began [9][10] - The company revised its full-year revenue guidance to a range of $550 million to $580 million, implying an average quarterly volume of $160 million in the second half of the year [10][14] Business Line Data and Key Metrics Changes - The commercial transport market continues to drive revenue growth, with a significant increase in bookings and sales [21] - Major program wins include in-seat power for Southwest Airlines, SATCOM hardware with Safran, and an electrical distribution system for the Lilium aircraft, although these did not significantly contribute to second quarter bookings [7][8][41] Market Data and Key Metrics Changes - The aviation industry, particularly commercial transport, is recovering, contributing to strong demand for the company's products [5][9] - Supply chain challenges, particularly with electronic components, continue to impact operations and revenue realization [12][14] Company Strategy and Development Direction - The company is focused on maintaining its product line strategy and customer relationships as the aviation industry recovers from the pandemic [36] - There is an emphasis on developing capabilities for the electric vertical takeoff and landing (eVTOL) market, with expectations of significant future contributions [41][42] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about demand but acknowledged ongoing supply chain struggles and inflationary pressures affecting margins [12][16] - The company expects a revenue ramp-up in the second half of the year, driven by strong bookings and backlog, despite supply chain challenges [10][64] Other Important Information - The company extended its revolving credit facility by three months to allow for a new long-term credit arrangement [20][27] - Cash flow for the quarter was negative, with a $10.6 million use for operations, primarily due to increased inventory levels [25][26] Q&A Session Summary Question: What specific components are causing supply chain difficulties? - Management indicated that electronic components are the primary issue, along with raw materials like plastics and hardware, describing the situation as a "whackamole" effort [32] Question: Can you elaborate on the new contracts with Southwest Airlines and others? - The Southwest contract involves in-seat power for their Max fleet, with potential revenues around $100,000 per ship. The Safran program aims to provide flexible satellite communication capabilities, while the Lilium project focuses on eVTOL systems [36][40] Question: What is the outlook for the FLRAA and FARA programs? - The FLRAA program award is expected in mid to late October, while the FARA program has been delayed by about a year [56] Question: Will the company be operating income positive in the second half? - Management stated that breakeven sales are around $160 million to $165 million per quarter, and they expect to generate positive cash flow if they can manage working capital effectively [49] Question: What are the details of the new credit facilities? - The new credit facilities will be SOFR-based, with expected increases in annual interest expense due to rising SOFR rates and spreads [51]