Astronics (US:ATRO)2021-05-09 13:44Financial Data and Key Metrics Changes - The company reported first quarter revenue of $105 million, down $51 million from the first quarter of 2020, reflecting the ongoing impact of the pandemic [20] - The GAAP net loss for the quarter was $11.9 million, with an operating loss of $5 million and a slight adjusted EBITDA loss of $500,000 [20][21] - Cash flow from operations was negative $6.9 million, primarily due to increased receivables and a decrease in accounts payable [23] Business Line Data and Key Metrics Changes - Aerospace segment sales were $59.7 million, down 42% from the first quarter of 2020, resulting in a segment operating loss of $5.6 million [22] - The Test Systems segment saw sales of $24.4 million, up 64% from the first quarter of 2020, with an operating income of $1.2 million [22][19] Market Data and Key Metrics Changes - Bookings in the aerospace segment improved significantly, with first quarter bookings reaching $100 million, up from $74 million in the previous quarter [11] - The commercial transport market saw sales of $38.2 million, down 62.8% compared to the first quarter of 2020 [20] Company Strategy and Development Direction - The company continues to invest in product development and new programs to position itself for a post-pandemic recovery [21] - There is a focus on increasing production rates for narrow-body aircraft, with expectations for a shift in the commercial transport business towards narrow-body sales [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in narrow-body aircraft sales as domestic flying increases [16] - The company anticipates second quarter revenues to be around $115 million, with potential for upside [28] Other Important Information - The company amended its credit facility, which matures in February 2023, and is currently compliant with its financial covenants [24][25] - There is an ongoing review regarding a recalculated earn-out from the sale of the semiconductor business, which has been revised from $10.7 million to $7.1 million [23][60] Q&A Session Summary Question: Can you provide more color on the sequential step down in Aerospace sales and expectations for the second quarter? - Management indicated that the step down was due to various factors, including inventory management and delivery schedules, and expects revenue growth in the upcoming quarters [31][32] Question: What is the outlook for bookings in Aerospace? - Bookings have improved across the board, particularly in narrow-body and business jets, with a significant increase in activity noted [34] Question: Are there any changes anticipated in the credit agreement due to leverage concerns? - Management acknowledged the tighter situation than expected but does not forecast a violation of covenants at this time [36] Question: What is the current sentiment from airline customers regarding retrofit campaigns? - There is positive interest in updating in-flight entertainment systems, particularly in North America and China [42] Question: Are there any supply chain issues affecting the company? - Management noted emerging part shortages and lead time stretches but does not currently factor these into revenue expectations [45] Question: What is the outlook for the Test segment and potential large projects? - The company remains optimistic about the Test segment, with several high-value targets being pursued despite some delays due to COVID [54][56]