Astronics (ATRO) 15th Annual Midwest IDEAS Investor Conference summary

Company Overview and Market Position

• Operates in two segments: aerospace (88–90% of volume/sales) and test systems (10–12%).

• Holds leading market positions in commercial aerospace and test systems, with in-flight entertainment and connectivity products representing roughly half of sales and over 90% market share in in-seat power.

• Major customers include over 280 airlines and OEMs such as Boeing, Airbus, Embraer, and the U.S. military, with products installed on a wide range of aircraft.

• Broad product line enables partnerships with major IFE, connectivity, and test solution companies.

• Strategic focus on innovation, collaboration, and targeted acquisitions in aerospace, defense, and mission-critical industries.

Recent Performance and Financial Highlights

• Revenues dropped from $780M in 2019 to $450M in 2021 due to the pandemic, rebounding with 28% growth in 2022 and 20% in 2023; 2024 revenue guidance raised to $780–$800M.

• Q2 2024 bookings reached $219M, with a book-to-bill ratio of 1.11x and 10 consecutive quarters of record aerospace backlog.

• Adjusted EBITDA for Q2 2024 was $20.2M, with a target to reach mid to upper teens as a percentage of sales.

• Gross margin for Q2 2024 was 18.5%, impacted by incentive program expenses, litigation, and restructuring costs.

• Amended and expanded credit facilities in July 2024, increasing revolver to $200M and reducing term loan, with expected annual cash savings of $10.5M.

Strategic Initiatives, Product Innovation, and Growth Opportunities

• Won major programs, including a $250M IDIQ Army radio test contract and a $215M, 5-year IDIQ for U.S. Army radio test sets.

• IFEC in-seat power systems now power over 1 million seats on 280+ airlines, with significant penetration in widebody aircraft.

• Developing flight-critical electrical power systems for small aircraft and major military programs like the Bell V-280 FLRAA.

• Expanded into metro rail test systems, supporting clients like MARTA and NYCT.

• Engaged in eVTOL electrical systems, positioning for future electric aircraft markets.